Bff Bank Spa · MIL:BFF
Bff Bank Spa — BFF Banking Group — Investor Presentation (November 2018)
23 slides from Bff Bank Spa's investor presentation, November 2018
Slide 1: BFF Banking Group Overview
BFF Banking Group Overview November 2018 A Bank Like No Other 11
Slide 2: BFF Banking Group: A Bank Like No Other
BFF Banking Group: A Bank Like No Other General Overview Key Financials (4) Historical Financials - €/m FY2013 FY2014 FY2015 FY2016 FY2017 9M18 ▪ Leading financial services provider to suppliers of the European Net Interest Income(5) 97.2 107.7 133.0 166.9 172.8 126.0 Healthcare and Public Administr
Slide 3: Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers in EU
Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers in EU Over €260bn of Public Sector expenditure in Goods & Services in the Structural Delay in Payments in the Public Sector Countries BFF operates in ▪ Some European countries have structural delays in pay
Slide 4: Profitable and Growing in Every Season
Profitable and Growing in Every Season Net Income (2007-2017) Total Capital Invested: IT Lira 500m (€260k) in 1985 vs c.€530m dividend distributed thus far Regulated financial intermediary BFF with Banking License Credit Bubble Financial Crisis Sovereign Debt Crisis Low interest rate and plenty of l
Slide 5: Successful International Expansion
Successful International Expansion From domestic market leader… …to leader in Europe Turning point: 2010 BFF becomes 2018 bank in July 2013 2011 2012 2013 2014 2015 2016 2017 2018 Loans to Customers Evolution - €bn 3.0 2.5 (1) CEE and Other Greece 2.0 1.6 Iberia - PA and Other 1.1 Iberia - NHS Italy
Slide 6: A Growing Business, Increasingly Diversified…
A Growing Business, Increasingly Diversified… Key Considerations Customer Loans Evolution (€m) By Product (€m) 3,018 ▪ Significant customer loans growth with an 2,499 627 higher contribution from less capital 1,962 447 intensive segments 1,555 1,314 1,137 297 840 1,037 ▪ Ongoing diversification towa
Slide 7: …Consolidating its Market Leadership…
…Consolidating its Market Leadership… BFF Banking Group Market Share and Leadership Position ▪ Leading financial services Italy Spain provider to suppliers of the BFF’s Market Share by counterparty #1 Independent Player European HC and PA sectors (%) 2014 2015 2016 2017 ▪ Cross border services incre
Slide 8: …and Increasing Its Addressable Market and Growth Prospects in More Underpenetrated and Faster Growing Markets
…and Increasing Its Addressable Market and Growth Prospects in More Underpenetrated and Faster Growing Markets Key Considerations Evolution of BFF Addressable Market (€bn) ▪ Since 2013, BFF has expanded its €1.8bn €2.5bn €3.0bn €3.4bn €4.0bn BFF’s purchased addressable market by 6x adding As % of ad
Slide 9: A Solid Business Model…
A Solid Business Model… Suppliers Debtors ▪ Leading multinational and national suppliers of the ▪ Entities of the public administration in public sector → low dilution risk Europe → negligible Cost of Risk ▪ Recurring business thanks to long-standing ▪ Long track record in dealing with Public relati
Slide 10: …With Revenues Coming from both Suppliers and Debtors
…With Revenues Coming from both Suppliers and Debtors Focus on Non-recourse Factoring – Revenues Model Stable Regulatory Framework ▪ Non-recourse purchase of receivables towards the European Public ▪ BFF has a consolidated experience in collecting LPIs form the Administration (National Healthcare Sy
Slide 11: Update on 9M-2018 Results
Update on 9M-2018 Results 11 11
Slide 12: 9M2018 Results: Key Highlights
9M2018 Results: Key Highlights • €58.0m of Adjusted Net Income (+6% y/y), after having expensed €0.8m of additional Tier II costs and provisions for €1.1m on Polish SME factoring portfolio in run off, and despite €15m of lower cashed in LPI vs. 9M17 • +8% of Adjusted Net Interest Income Solid financ
Slide 13: +6% Growth in Adjusted Net Income
+6% Growth in Adjusted Net Income ▪ €58.0m of 9M18 Adjusted Net Income, +6% vs 9M17: Adjusted Net income(2) (€m) − €3.4m of higher net over-recovery(1) accounted in P&L vs 9M17 Adjusted 31% 29% 31% Reported ROTE(3) − €54m of cashed-in LPI vs. €69m in 9M17 68 ▪ The 9M18 Adjusted Net Income after havi
Slide 14: Growing Adjusted Net Interest Income and Net Banking Income
Growing Adjusted Net Interest Income and Net Banking Income Adjusted Net Interest Income (€m) Net customer Reported int. 5.9% 5.6% 5.3% income/loans(1) ▪ Adjusted net interest income and Adjusted Net Banking 141 126 126 income +8% compared to 9M17 mainly driven by higher stock 116 108 21 14 19 of ne
Slide 15: Improving Funding Costs
Improving Funding Costs Adj. Interest expenses (€m) ▪ Reduction in cost of funding continued: Average funding lines used (excl. 1,946 +19% 2,320 +12% 2,609 – 1.79% 9M2018 cost of funding versus 2.03% in 9M2017 REPO, €m) Cost of funding – Increasing interest expenses from €29.8m to €31.7m in 2.15% -1
Slide 16: Good Operating Efficiency Despite Investment in Growth
Good Operating Efficiency Despite Investment in Growth Operating Costs(1) (€m) ▪ Highly efficient structure with adjusted Cost/Income Adjusted(1,2) cost/income ratio 35% 37% 38% ratio of 38% and improving operating leverage, with Adjusted(1,2) 2.35% 2.34% 2.24% operating costs/loans at 2.24% vs. 2.3
Slide 17: Double Digit Growth in Customer Loans
Double Digit Growth in Customer Loans ▪ Strong growth in customer loans (+17% y/y) throughout the Customer Loans Evolution (€m) Group: 3,026 − Growing loans in all geographies 2,596 702 − Assets in Spain more than doubled y/y 2,211 545 405 − BFF Polska Group up by 29% ▪ Residual €3m net customer loa
Slide 18: Diversified Funding Base with Ample Liquidity and no ECB Refinancing Risk
Diversified Funding Base with Ample Liquidity and no ECB Refinancing Risk Available Funding(2;3) (€m) ▪ A diversified and flexible funding base to support business Drawn funding growth: − Deposits account for 31% of drawn funds and are equal to €795m as of September 2018, stable y/y despite strong 3
Slide 19: Fortress Balance Sheet
Fortress Balance Sheet Breakdown of Balance Sheet 9M 2018 (€m) ▪ Decreasing Government bond portfolio (-25% y/y): LCR 167.5% negative mark to market of HTC&S for €6.9m after tax (booked in equity) and €17.7m after tax on HTC NSFR (1) 105.7% Leverage ▪ Conservative asset / liability management 5.8% R
Slide 20: Negligible Credit Risk
Negligible Credit Risk ▪ Increase in Net NPLs (€36.0m, 1.2% of net loans) driven almost Net Non Performing Loans Evolution (€m) entirely by the growing activities towards the Italian Municipalities: NPL Ratio 0.6% 0.6% 1.2% – €29m (80% of total) are related to Italian municipalities in Coverage Rati
Slide 21: Strong capital position
Strong capital position ▪ Total Capital ratio of 17.1% and CET1 ratio of 12.2%: Total Capital Ratio - Banking Group ex TUB Capital Ratio(1) – €58.0m of reported net income not included in capital SREP ratios (equal to 287 bps of additional CET1 and total requirement Other DBRS Country PA capital) an
Slide 22: Key Takeaways
Key Takeaways BFF Banking Group: A Bank Like No Other European market leader in large and underpenetrated markets €255bn market Solid and simple business model with proven track record in >15% CAGR 2013-2017(1) assets and earnings growth and internalisation expansion 32% of loans outside Italy 17bps
Slide 23: Disclaimer
Disclaimer This presentation may contain written and oral "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number or assumptions, expectations, p
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