Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS

Banca Monte Dei Paschi Di Siena — FY2010 Earnings Presentation

59 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, Mar 29, 2011

  1. Slide 1: ge, MONTE

    ge, MONTE \) DEI PASCHI 7 DISIENA BANCA DAL 1472

  2. Slide 2: 2010 Results Presentation

    2010 Results Presentation Siena, 29t* March 2011

  3. Slide 3: The base of MPS Credibility

    The base of MPS Credibility  Strong Increase in market shares (eg.+90bps in Deposits in 2010) through product innovation (rated Most Innovative bank of the Year) and improved customer satisfaction  Customer retention up to 95.3% and higher customer acquisition rate (5.7%)  Increased diversificati

  4. Slide 4: The base of MPS Credibility: Top Line Sustainability

    The base of MPS Credibility: Top Line Sustainability High Value of the Network Focus on Product Innovation Deposits Market Shares 8.3% 7.4% A forward-looking player capable of offering 6.8% innovative and distinctive solutions, with no prejudice to its long-standing tradition of local proximity and

  5. Slide 5: The base of MPS Credibility: Efficiency improvement

    The base of MPS Credibility: Efficiency improvement What we said we would do (March 2008)…. … and what we have done €530mln Cost base reduction, better than predicted and 1 year ahead of schedule 2,700 net outflows vs 2,200 planned Group restructuring and network rationalization Four consecutive yea

  6. Slide 6: The base of MPS Credibility: Capital strengthening

    The base of MPS Credibility: Capital strengthening What we said we would do (2009) …. … and what we have done Adoption of Advanced Models (AIRB and AMA) Sale of non-core stakes (i.g. Banca Monte Parma) 87 branches sold Real Estate deal completed AIRB model extension to Antonveneta and floor reductio

  7. Slide 7: The base of MPS Credibility: Strong attention to the stakeholders

    The base of MPS Credibility: Strong attention to the stakeholders Customer satisfaction Employee engagement Environment & Society Customer Perception Service Quality Index CO2 emissions per Renewable electricity Index (CPI)* (SQI)* Absenteeism Rate Turnover Rate capita (Kg) 81 3.95 0.45% 97% 0.35% 1

  8. Slide 8: 12M and 4Q10 Results

    12M and 4Q10 Results 12M and 4Q10 P&L (mln €) 4Q10* 4Q10/4Q09 2010* 2010/2009 Net Interest Income 900.8 +3.0% 3,591.7 +0.4% Net Fees 489.0 +8.0% 1,911.5 +3.8% Basic income 1,389.8 +4.7% 5,503.2 +1.6% Total Revenues 1,406.2 +5.1% 5,571.3 -0.4% Operating Costs -921.1 -9.5% -3,431.1 -5.2% Personnel cos

  9. Slide 9: 12M and 4Q2010 Highlights

    12M and 4Q2010 Highlights  >72,000 net new customers in 12M  Loans: +4.1% YoY; Total Funding: +6.9% YoY, with Direct Funding +3.6% YoY and Indirect Funding +10.7% YoY  Growing market shares in all main businesses since Dec 09  Net profit in 4Q at €629mln, €985mln in 12M  NII +3% vs 4Q09, +0.4%

  10. Slide 10: Business & Market

    Business & Market Good funding and lending and stronger market shares  Good funding and lending: Total Total funding Funding* +6.9% YoY and Total lending* +4.1% YoY  Strong credit flows mainly to corporate +€20bn 303 284  Growing market shares in all main businesses  Strong attention to our cust

  11. Slide 11: Good Funding volumes and inflows

    Good Funding volumes and inflows Direct Funding* Current Accounts +3.6% +2.5% +2.2% 65.8 158.5 152.9 154.7 64.4 € bn € bn Dec-09 Sep-10 Dec-10 2009 2010 Indirect Funding* Bancassurance Flows +10.7% + 4.5% +8.9% 144.9 138.6 5.2 130.9 4.8 € bn € bn Dec-09 Sep-10 Dec-10 2009 2010 * Excluding contributi

  12. Slide 12: Lending: good momentum in the Corporate business

    Lending: good momentum in the Corporate business Total Lending* Mortgage loan stock +4.1% +12.7% +2.3% 84.4 156.2 74.9 152.7 150.1 € bn € bn Dec-09 Sep-10 Dec-10 2009 2010 Consumer Business Unit Corporate Business Unit +12.5% +4.7% 74.9 65.2 71.6 57.9 € bn € bn 2009 2010 2009 2010 * Excluding contri

  13. Slide 13: Group Product Companies: Good Credit Flows

    Group Product Companies: Good Credit Flows MPS Capital Services Disbursements Turnover Factoring +18% +48% 6.6 2.1 4.5 1.8 € bn € bn 2009 2010 2009 2010 Leasing Mortgages Inflows +1.2% +11% 15.8 14.0 1.38 1.40 € bn € bn 2009 2010 2009 2010 pag. 13

  14. Slide 14: Growing market shares

    Growing market shares Direct Funding Deposits Bond +70bps +90bps +37bps +26bps 8.25% 7.62% 7.88% o/w 7.18% 7.35% 7.30% 6.93% Dec-09 Sep-10 Dec-10 2009 2010 2009 2010 Total Lending Consumer Credit Mortgages Factoring -18bps +48bps +31bps +113bps -9bps 10.27% 10.58% 8.02% o/w 7.93% 7.84% 4.71% 5.19% 3

  15. Slide 15: Consolidating our customer base

    Consolidating our customer base … Retention rate Acquisition rate 95.3% 5.8% 5.7% 94.1% 2009 2010 2009 2010 Families Needs Coverage* (%) Small Business Needs Coverage* (%) 22.4 18.6 16.5 17.9 11.4 13.8 14.0 15.6 2009 2010 2009 2010 Household products Property products Household products Property ins

  16. Slide 16: … while improving Customer Relation

    … while improving Customer Relation Product range innovation High Value-Added Services Financial Advisory Financial Advisory Services: Customers Services: Assets +77% +70% 144 25.2 A forward-looking player capable of offering innovative and distinctive 82 14.8 solutions, with no prejudice to its lon

  17. Slide 17: An Analysis of Revenues

    An Analysis of Revenues Basic Income +1.6% 5,503 Resilient revenues with a strong 5,418 contribution from product companies  NII +3% vs 4Q09; +0.4% YoY € mln 2009 2010  Fees increased 3.8% YoY and +8% vs 4Q09 +4.7%  AuM Placing fees increased by 93% YoY 1,390 1,327 € mln 4Q09 4Q10 pag. 17

  18. Slide 18: A focus on Net Interest Income

    A focus on Net Interest Income Net Interest Income +0.4% +3.0% 3,577 3,592 901 874 € mln € mln 2009 2010 4Q09 4Q10 4Q NII analysis: NII major impact in 4Q 907 5.2 -10.9 901  Six month basis mortgage repricing (Jan and June)  Institutional funding in a difficult environment € mln  Interbank exposu

  19. Slide 19: Commercial Mark up and Mark down

    Commercial Mark up and Mark down Short term Mark up Delay in Corporate loan book repricing 3.8 1.9 1.7 3.75 1.5 3.7 1.3 3.65 1.1 3.6 0.9 0.7 3.55 0.5 3.5 3Q10 4Q10 Oct-09 mag-10 Oct-10 mar-10 Dec-08 Feb-09 Aug-09 Sep-09 Dec-09 Feb-10 Sep-10 Dec-10 Jul-09 giu-10 lug-10 ago-10 Jan-09 Apr-09 Jun-09 Jan

  20. Slide 20: Improvement of fees driven by AuM

    Improvement of fees driven by AuM Fees +3.8% +8.0% 1,841 1,912 489 453 € mln € mln 2009 2010 4Q09 4Q10 Fees YoY evolution (%) 93.1%  Revenues from Asset Management +32.4% YoY 15.7% 1.8% 3.8% benefitted from a positive contribution from Mutual -9.2% -10.8% Funds and Bancassurance Total Fees Continui

  21. Slide 21: Dividends from product companies

    Dividends from product companies Dividends -16.8% +33.3% 110.3 91.8 32.2 24.1 € mln € mln 2009 2010 4Q09 4Q10 Bancassurance contribution  Gains on equity investments mainly from: 26.3 23.4 €52 mln 8.1 €10 mln 5.2 € mln €18 mln 1Q10 2Q10 3Q10 4Q10 pag. 21

  22. Slide 22: Trading/valuation of financial assets

    Trading/valuation of financial assets Net profit from trading/valuation of fin. Assets 66.1 € mln € mln -20.9 -5.7 -23.1 2009 2010 4Q09 4Q10 MPS Group Trading Book Var 99% in Eur mln  Net profit/loss from trading/valuation of financial assets reflects the sovereign debt crisis which affected “net p

  23. Slide 23: Cost Analysis

    Cost Analysis Efficiency improvement continues  Operating cost -5.2% YoY, better than FY10 guidance (-4.5%) Cost/Income ratio  C/I at 61.6% (-315 bps since Dec 2009) -315bps  Staff rationalized: c500 net outflows vs 2009 and increased attention to employees 64.7% satisfaction 61.6%  Other Admini

  24. Slide 24: Operating costs: efficiency improvement continues

    Operating costs: efficiency improvement continues Trend of GMPS Total Cost -530 mln€ -0.2% -0.8% -5.2% -8.0% 2007 2008 2009* 2010 Cost/Income Cost/Assets 67.2% -560bps Since Dec 2008 64.7% 61.6% 1.84% 1.61% 1.40% 2008 2009 2010 2008 2009 2010 * Net of € 60mln of early retirement one off classified a

  25. Slide 25: Personnel costs: a structural reduction

    Personnel costs: a structural reduction Personnel Expenses -3.8% -2.3% 2,300 2,211 611 597 € mln € mln 2009 2010 4Q09 4Q10 Group Headcount Employee Perception Training per employee ~ -2,700 net outflows Index (EPI)** (hours) ~34,200 ~32,900 ~32,000 69.2 +33% -3.8% ~31,500 -2.7% 65.2 -1.6% 36 48 2007

  26. Slide 26: Administrative expenses and amortization

    Administrative expenses and amortization Other Administrative Expenses Breakdown of Savings Others -9.8% -24.8% 0.4% Real Logistic Estate 23.7% 17.1% 1,158 1,045 361 Taxes 271 13.3% € mln € mln 2009 2010 4Q09 4Q10 ICT Consulting 33.5% 6.9% TLC 5.1% Net adjustments to tangible and intangible fixed as

  27. Slide 27: Operating costs: the next step

    Operating costs: the next step The Reorganization Plan Rationalization and Customer centricity simplification of and enhancement of distribution structure the role of branches Operating Costs (€ mln) Personnel Outflows Front Office /Total Staff Ratio Phase 1 Phase 2 Phase 1 Phase 2 >70% 66% 62% -2,7

  28. Slide 28: Asset Quality

    Asset Quality Net adjustments for impairment of loans Asset quality in control: -21.2%  Cost of credit at 74bps (vs 98bps in 1,466 1,156 2009), with increased Impaired loans coverage (+140bps vs 2009)  Decreasing Impaired loan inflows: € mln 2009 2010 NPL inflows -8% YoY, Watchlist inflows -24% Yo

  29. Slide 29: Provisions towards a normalised level

    Provisions towards a normalised level Provisions (bps) -24bps 98 76 74 Dec-09* Sep-10 Dec-10 Breakdown by type of customers** (bps) -17bps -13bps QoQ QoQ -5bps QoQ stable 120 QoQ 104 -6bps QoQ 85 39 o.w. 20 o.w. Consumer (Retail + residential SB Corporate SMEs Private) mortgages * Restated figures,

  30. Slide 30: Increased coverage

    Increased coverage Impaired loans coverage +140bps +120bps 41.8% 40.6% 40.4% Dec-09 Sep-10 Dec-10 NPL coverage Watchlist coverage stable +150bps 56.0% 56.1% 56.0% 21.1% 19.6% 19.7% Dec-09 Sep-10 Dec-10 Dec-09 Sep-10 Dec-10 pag. 30

  31. Slide 31: Strong reduction in NPL and Watchlist inflows

    Strong reduction in NPL and Watchlist inflows NPL Inflows Monthly NPL Inflows -8% 2,390 2,201 202 195 180 137 € mln € mln 2009 2010 Sep-10 Oct-10 Nov-10 Dec-10 NPL breakdown by NPL breakdown by type of customer geographical areas Watchlist Inflows 31% -24% 21% 25% 2,741 16% 2,089 63% 23% 21% € mln C

  32. Slide 32: Good credit collection inflows and High level of excellent quality Collateral

    Good credit collection inflows and High level of excellent quality Collateral Collections Monthly Collection Inflows +13.2% 76 630 57 37 40 556 € mln € mln 2009 2010 Sep-10 Oct-10 Nov-10 Dec-10 Collateralized Loans Guarantees Breakdown 12% 68% 57% 47% 20% 42% 69% 2009 2010 Real Estate Stakes Other G

  33. Slide 33: Reduction in Impaired Loan stocks

    Reduction in Impaired Loan stocks Market share of Performing and Non Performing Loans +15bps Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Delta of Performing Loan Market Share Delta of NPL Market Share -372bps Impaired loans /Total loans (%) Impaired loans Stocks (€ mln) Gross Net

  34. Slide 34: The value of diversification

    The value of diversification The Group managed to deliver a strong operational rebound thanks to: Net Operating Profits  Antonveneta: pick up in funding and lending, with strong focus on asset quality  MPS Capital Services: becoming a national player in Italian Corporate +105% Investment Banking 9

  35. Slide 35: The value of diversification (1/3)

    The value of diversification (1/3) Banca Antonveneta *  Improving funding/lending strength and asset quality: +3% 139.7  +12,000 net new customers 135.6  Direct Funding +6.2% YoY, Loans +7.7% YoY € mln 2009 2010  Cost of credit at 56bps with NPL inflows –58% YoY  Net Profits at €163mln MPS Capi

  36. Slide 36: The value of diversification (2/3)

    The value of diversification (2/3) Consum.it * (Consumer Credit)  An excellent year: +102%  Flows +4.3% YoY with market share at 5.2% 43.1 (+48 bps vs 2009) 21.3  Best in class in cost /income (21%) € mln 2009 2010  Net profits €23mln (vs €6mln in 2009) MPS Gestione Crediti * (NPL workout)  Pro

  37. Slide 37: The value of diversification (3/3)

    The value of diversification (3/3) Bancassurance Gross inflows Bancassurance Business mix 15.3% +8.9% 5.2 4.8 24.8% 59.9% € bn 2009 2010 Traditional policies Index Linked Unit linked Life protection products P&C protection products  Strong growth of life +18% and P&C protection +35% business 135.2

  38. Slide 38: Risk and Capital Management

    Risk and Capital Management Capital generation (bps)* Monitoring of capital and liquidity position: 130 210  Loan/Deposit ratio steadily below 1 80  Institutional bonds expiring in 2011: €2.9bn 2008-2009 2009-2010 2008-2010  Counterbalancing capacity: €9.2bn in February 2011 BV per share**  Tier

  39. Slide 39: Improvement of Liquidity position, with a small amount of Institutional Bonds expiring in 2011

    Improvement of Liquidity position, with a small amount of Institutional Bonds expiring in 2011 Loan/Deposit ratio Maturity of Institutional Bonds from 2011 (€bln) Covered Senior Subordinated Total Bonds 2011 2.9 - - 2.9 1.02 0.98 0.99 2012 4.6 0.5 - 5.1 2013 1.0 0.9 1.3 3.2 2014 2.0 - - 2.0 2008 200

  40. Slide 40: Strong consolidation of Capital

    Strong consolidation of Capital Main Tier 1 Items (%) 1.6 8.4 0.4* 8.8 0.6 1.05 5.1 2008 RWA Retained T-Bond 2010 Real Estate 2010 with Real optimization earnings Estate Revised Basel 3 impact excluding DTA at c30bps from previously 70bps estimated in November** * Subject to Regulatory approval ** E

  41. Slide 41: Gruppo Montepaschi expects to deliver an improvement of Net Operating Profit in 2011

    Gruppo Montepaschi expects to deliver an improvement of Net Operating Profit in 2011 by:  boosting recurring revenues through increased diversification while defending margins  curbing costs as a result of Phase 2 of the restructuring plan  improving asset quality, with consequent cost of credit

  42. Slide 42: Thank you for your attention

    Thank you for your attention Q&A pag. 42

  43. Slide 43: pag. 43

    pag. 43

  44. Slide 44: Increasing Funding volumes and inflows

    Increasing Funding volumes and inflows Direct Funding* (€bn) Securities 2010: Breakdown Total: Total: Total: €155 bn 1.7% €142 bn €158bn Total: 29.1% €113 bn 64.3 60.7 60.9 o/w 52.9 Covered Bond 81.6 91.1 97.8 12.9 % 60.4 2007 2008 2009 2010 69.2% Due to customers Securities Private Placement Public

  45. Slide 45: A focus on BMPS institutional funding

    A focus on BMPS institutional funding Issuance and Maturities of Senior and Subordinated Notes in 2010 and in 2011 Lower Tier 2 Covered Bond Senior RMBS 1,250 1,250 1,000 1,000 1,000 1,000 500 350 150 € mln -350 -600 -1,000 Feb Apr Jun Jun Aug Sept Sept Sept Oct Nov Feb Mar 2010 2011 LT2 CB LT2 CB S

  46. Slide 46: Financial assets

    Financial assets GMPS Securities and Derivatives Portfolio c -€2.6 bn since June 2010 Market Value (€ mln) 31 Dec 2010  HFT Portfolio: -6.3 €bn due to maturing government bonds and disposal of capital gain-generating HFT 10,132 positions with simultaneous risk profile reduction AFS 21,802  AFS Por

  47. Slide 47: Funding and lending are growing…

    Funding and lending are growing… Direct Funding Loans +6.2% +7.7% 12,886 11,966 11,378 10,711 € mln € mln 2009 2010 2009 2010 WM Flows Mortgage loan Flows +37.7% -1.8% 2,698 1,959 2,200 2,161 € mln € mln 2009 2010 2009 2010 pag. 47

  48. Slide 48: … maintaining focus on asset quality

    … maintaining focus on asset quality Cost of credit (bps) Impaired loans coverage -38bps +320bps 47.1% 94 43.9% 56 2009 2010 2009 2010 Inflows of Impaired loans (Dec10 vs Dec09) -54% -58% NPLs Watchlist pag. 48

  49. Slide 49: Revenues and profitability are growing…

    Revenues and profitability are growing… Basic Income Net Interest Income Fees +21% +15% +110% 299.7 264.0 230.1 35.7 247.1 17.0 € mln € mln € mln 2009 2010 2009 2010 2009 2010 Cost/Income Net Profit -310bps +66% 26.7% 82.4 23.6% 49.8 € mln 2009 2010 2009 2010 pag. 49

  50. Slide 50: … with Strong revenues in 2010

    … with Strong revenues in 2010 Investment banking Ordinary finance +31% 141.3 -9% 8.9 128.7 6.8 Revenues by segment € mln € mln 2009 2010 2009 Investment 2009 2010 Banking 2.3% Ordinary f inance 47.0% Global Markets 39.7% Global markets Corporate Corporate finance Finance 11.1% +17% 139.1 2010 Inves

  51. Slide 51: L&F flows outperform the market with positive impact on profitability

    L&F flows outperform the market with positive impact on profitability Leasing Factoring +1.2% +48.0% 6,608 1,399 4,464 1,383 € mln € mln 2009 2010 2009 2010 Revenues Net Profit +5.7% 120.5 +315.6% 114.0 6.9 1.6 € mln € mln 2009 2010 2009 2010 pag. 51

  52. Slide 52: A focus on MPS Gestione Crediti

    A focus on MPS Gestione Crediti Collections Revenues +13% +8.9% 630 53.4 556 49.1 € mln € mln 2009 2010 2009 2010 Cost/Income ROE +300bps 66% 26% 62% 23% 2009 2010 2009 2010 pag. 52

  53. Slide 53: Good inflows, with a pick up in revenues

    Good inflows, with a pick up in revenues Consum.it flows Stock €6.4bn 58% +4.3% 4% 2,721 8% 2,608 31% Finalised loans Cards € mln Personal loans Fifth of salary backed loans 2009 2010 Revenues Cost income +10% -10bps 311.3 282.9 21.1% 21.0% €mln 2009 2010 2009 2010 pag. 53

  54. Slide 54: Good bancassurance inflows and improved business mix

    Good bancassurance inflows and improved business mix Gross inflows Business mix 15.3% +8.9% 5.2 24.8% 4.8 € bn 59.9% 2009 2010 Traditional policies Index Linked Unit linked Life protection products P&C protection products +18%  Strong growth in life 135,2 and P&C protection 114,3 +35% business 51,3

  55. Slide 55: Good results from integration of MPS B. with BMPS

    Good results from integration of MPS B. with BMPS Total deposits Average Portfolio Revenues +22.6% +19% +28.7% 5,854 6.9 21.3 4,777 5.8 16.5 € mln € mln € /000 2009 2010 2009 2010 2009 2010 Market share Positioning +38bps 11° Total Net Inflow 7° 2.53% 2.15% 10° Total Net Managed 8° 10° Total Assets

  56. Slide 56: Details on MPS Retail Mortgage Loans

    Details on MPS Retail Mortgage Loans Stock New Flows 24.0% 19.8% 0.2% Residential 4.9% Mortgages: Breakdown by Type of Rate 56.2% 95.0% Fixed rate Floating rate Mixed rate Fixed rate Floating rate Mixed rate Stock New Flows 4.9% 0.2% Loan/Value 45.9% 40.9% 54.2% 53.9% Breakdown < 70% 70% - 80% > 80%

  57. Slide 57: Contacts

    Contacts Declaration of the Financial Reporting Officer Strategic Planning, Research & Pursuant to para. 2, article 154- bis of the Consolidated Law on Investor Relations Finance, the Financial Reporting Alessandro Santoni (Head) Officer, Mr. Daniele Bigi, declares that the accounting information Pi

  58. Slide 58: Disclaimer

    Disclaimer This document has been prepared by Gruppo Monte dei Paschi di Siena solely for information purposes and for use in presentations of the Group’s strategies and financials. The information contained herein has not been independently verified. No representation or warranty, express or implie

  59. Slide 59: fe DEI PASCHI

    fe DEI PASCHI I SIENA ==” BANCA DAL 1472 www.mps.it

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