Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — Banco Bpm Societa Ord — 9M 2023 Earnings Presentation
39 slides from Banco Bpm Spa's earnings presentation, Nov 7, 2023
Slide 1: Group 9M 2023 Results Presentation
Group 9M 2023 Results Presentation 07 November 2023
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Banco BPM ("Banco BPM"); for the purposes of this notice, "presentation" means this document, any oral presentation, any question and answer session and any written or oral material discussed following the distribution of this document. The distribut
Slide 3: Methodological Notes
Methodological Notes ▪ The balance sheet and income statement layouts contained in this news release have been reclassified along management criteria in order to provide an indication on the Group’s overall performance based on more easily understandable aggregate operating and financial data. These
Slide 4: Agenda
Agenda 1 Executive Summary 5 2 Key Highlights 10 3 Final Remarks 23 4 9M 2023 Performance Details 25 4
Slide 5: Executive Summary
Executive Summary 1
Slide 6: 9M of strong and sustainable profitability
9M OF STRONG AND SUSTAINABLE PROFITABILITY SOLID PACE OF GROWTH FY 2023 GUIDANCE TRAJECTORY: CONFIRMED WITH 9M P&L TRENDS WELL ON TRACK RESILIENT BUSINESS MODEL 9M 2023 NET INCOME AT RECORD LEVEL NET INTEREST INCOME €m EPS >€0.80 • Revenue diversification +52.3% Y/Y +134% +94% • High-Value product T
Slide 7: Excellent P&L performance & solid fundamentals
EXCELLENT P&L PERFORMANCE & SOLID FUNDAMENTALS CONFIRMED INVESTMENT GRADE RATING ALSO BY S&P CONFIRMING A GROWING PROFITABILITY TRAJECTORY «Core» Revenues1 Pre-Provision Income LLPs Profit Before Taxes €m €m €m €m 3,957 2,035 1,593 1,533 1,557 3,106 3,137 673 498 975 384 788 9M 21 9M 22 9M 23 9M 21
Slide 8: Ongoing progress in Digital Banking
Ongoing progress in Digital Banking MAIN DIGITAL-ENABLED ACHIEVEMENTS # Branch and APP-based transactions (m) % Remote-based transaction Branch-based APP-based App + Web + ATM Weight on 26% 17% 16% 15% 7% 16% 20% 22% total transactions 83% 84% 85% 40 29 32 24 23 23 23 74% 10 FY 19 FY 21 FY 22 9M 23
Slide 9: Sustainability: integration in all key areas
Sustainability: integration in all key areas ENVIRONMENTAL & SOCIAL GOVERNANCE BUSINESS ORGANISATION & POLICIES • NZBA joined in March 2023, with 5 • €1.5bn green bonds issued in 9M 2023 • Sustainability Committee at Board level priority sectors identified1 established in April 2023, following the r
Slide 10: Key Highlights
Key Highlights 2
Slide 11: 9M 2023: Strong profitability drivers, Net Income almost doubled Y/Y
9M 2023: Strong profitability drivers, with Net Income almost doubled Y/Y P&L HIGHLIGHTS Q3: QUARTERLY EVOLUTION €m +68.2% €m Q2 23 Q3 23 Chg. Q/Q 9M 22 9M 23 Chg. Y/Y 869 NET INTEREST 516 551 Net interest income 810 869 7.3% 1,590 2,422 52.3% INCOME Net fees and commissions 470 460 -2.0% 1,440 1,40
Slide 12: NII: another quarter of growth
NII: another quarter of growth Y/Y trend Quarterly trend €m €m +57.6% +52.3% FY 2023 NII Guidance: 2,422 +7.3% ~€3.25bn 1,590 810 869 551 NII sensitivity 9M 22 9M 23 Q3 22 Q2 23 Q3 23 • CURRENT INTEREST RATE SCENARIO: Commercial spread: +30bps Q/Q • «Observed» deposit beta: ~33% Commercial spread 4.
Slide 13: Solid franchise value: low risk loan portfolio
Solid franchise value: low risk loan portfolio, highly secured, well positioned ANALYSIS OF “CORE” PERFORMING CUSTOMER LOANS GBV €99.5bn 57% SHARE OF SECURED EXPOSURE: LOW RISK PROFILE • 31% with State Guarantees Non-Financial • 26% Collateralised 69% Secured Corporates 59.7% o/w: Small Businesses1
Slide 14: Total customer funding up by €6.1bn YTD
Solid franchise value: total customer funding up by €6.1bn YTD Analysis of total customer funding1 € bn POSITIVE FLOWS IN Q32 199.3 206.0 205.4 ▪ Volume effect 4.3 5.0 4.9 (AUM & AUC net flows + + €1.1bn RESILIENT Δ stock of Deposits & Certificates) 31.9 39.2 39.7 VOLUMES ▪ Market effect - €1.7bn (A
Slide 15: Net Fees at €1,408m in 9M 2023
Net Fees at €1,408m in 9M 2023, supported by Commercial Banking Commercial Banking fees Total Net Fees & Commissions -€8m Q/Q due to higher costs €m on synthetic 1,440 1,408 +2.7% securitizations 254 245 251 Commercial Banking fees 747 +0.5% 750 Q1 23 Q2 23 Q3 23 Management, Intermediation 693 -5.1%
Slide 16: Strict cost control: Cost/Income down at 48.4%
Strict cost control: Cost/Income down at 48.4% in 9M 23 (54.7% in 9M 22) Staff costs €m 405 402 401 Banking business costs1 €m +0.8% 1,882 1,898 D&A 195 197 Q1 23 Q2 23 Q3 23 476 493 Other Administrative Expenses Other administrative expenses & D&A Staff Costs 1,211 1,208 €m 232 227 230 64 65 68 9M
Slide 17: Asset quality turnaround: NPEs and Cost of Risk at record low
Asset quality turnaround: NPEs and Cost of Risk at record low NPE EVOLUTION: -€26.1BN VS. PRE-MERGER LEVEL, THANKS TO TOTAL DERISKING OF €34.5BN Gross NPE 24.1% Material derisking since the merger Ratio 9.2% GBV 30.0 + 8.4 - 34.5 €bn UTP + PD 3.9 3.2% (EBA definition)1 Bad Loans NPEs as at 2017-9M 2
Slide 18: Prudent provisioning policy with strong NPE coverage
Prudent provisioning policy with strong NPE coverage and improving migration rates Gross NPE -26.5% Y/Y and -7.9% Q/Q Migration rates well under control QUARTERLY LLPs Stock 9M 23 €5.3bn FY 22 Steadily €m €4.2bn €3.9bn annualised <1% since Default rate 0.94% 0.88% 9M 2021 UTP + PD 3.3 2.4 2.3 (from
Slide 19: Optimization and diversification of Debt securities portfolio
Optimization and diversification of Debt securities portfolio Overall trend and accounting breakdown Composition by counterparty € bn € bn 31/12/16 30/09/22 31/12/22 30/06/23 30/09/23 36.1 36.7 34.9 4.7 5.1 5.5 5.8 Other 31.6 31.0 0.3 0.4 0.4 Corporate 4.7 categories 0.5 9.9 2.9 0.4 9.1 9.8 Govies 2
Slide 20: Reserves of debt securities at FVOCI and Net Financial Result
Reserves of debt securities at FVOCI and Net Financial Result Very low sensitivity of debt securities portfolio at FVOCI confirmed Reserves of debt securities at FVOCI Breakdown of Net Financial Result Post-tax €m €m Total 30/09/22 31/12/22 30/06/23 NFR +75.1 -8.4 -22.8 30/09/23 • In Q3 2023, resili
Slide 21: Sound liquidity & funding position
Sound liquidity & funding position, with ratios well above minimum requirements and plan targets Cash + Unencumbered Assets1 LCR €bn 40.7 44.5 40.4 38.7 0.5 0.5 2021-24 0.7 0.5 30/09/23 12.2 21.0 • TLTRO III at €16.7bn Plan target 22.0 16.6 • Net ECB position: LIQUIDITY 20.9 18.6 18.8 +€5.6bn as at
Slide 22: Danish Compromise application authorized: CET1 ratio PF at 14.9%
Danish Compromise application authorized: CET 1 ratio PF at 14.9% STRONG ORGANIC CAPITAL GENERATION: +150BPS IN 9M 20231 % Ca. +60bps +150bps Danish Compromise 13.6 14.2 +60bps -34bps -9bps -9bps 14.3 14.9 12.8 Authorization for the CET 1 application of the ratio Danish Compromise received by ECB on
Slide 23: Final Remarks
3 Final Remarks
Slide 24: Solid track record & growing shareholder value creation
SOLID TRACK RECORD & GROWING SHAREHOLDER VALUE CREATION: READY FOR THE NEW STRATEGIC PLAN GUIDANCE 9M 23 TRAJECTORY ▪ Net Income €943m EPS >0.8 € FY 2023G1 > +75% vs 2022 (+94% Y/Y) EPS ~0.9€ FY 2024G2 +12.5% vs 2023G Excellent P&L ▪ Net Interest Income €2,422m ~€3.25bn FY 2023G performance (+52% Y/
Slide 25: 9M 2023 Performance Details
9M 2023 Performance Details 4
Slide 26: P&L: 9M 2023 comparison
P&L: Chg. Y/Y Reclassified income statement (€m) 9M 22 9M 23 % Net interest income 1,590.5 2,421.6 52.3% 9M 2023 comparison Income (loss) from invest. in associates carried at equity 97.6 94.7 -3.0% Net interest, dividend and similar income 1,688.1 2,516.3 49.1% Net fee and commission income 1,440.1
Slide 27: P&L: Quarterly results
P&L: Reclassified income statement (€m) Net interest income Q1 22 511.5 Q2 22 527.6 Q3 22 551.3 Q4 22 724.0 Q1 23 743.0 Q2 23 809.9 Q3 23 868.7 Chg. Q/Q Chg. Q/Q % 58.7 7.3% Quarterly results Income (loss) from invest. in associates carried at equity Net interest, dividend and similar income 42.4 55
Slide 28: Balance Sheet
Reclassified assets (€ m) Restated Chg. YTD Chg. Q/Q Balance Sheet Cash and cash equivalents 31/12/22 30/06/23 30/09/23 13,131 21,845 17,617 Value % 4,486 34.2% Value -4,228 % -19.4% Loans and advances measured at AC 113,633 112,014 111,926 -1,707 -1.5% -88 -0.1% - Loans and advances to banks 4,178
Slide 29: Focus on Govies portfolio
Focus on Govies portfolio Italian Govies at AC Italian Govies at FVOCI Italian Govies at FVTPL € bn € bn € bn +28.9% +18.8% +42.9% +3.6% +4.2% 9.2 9.1 9.4 +75.4% 7.3 2.5 2.1 1.7 2.4 0.1 0.1 0.02 0.1 30/09/22 31/12/22 30/06/23 30/09/23 30/09/22 31/12/22 30/06/23 30/09/23 30/09/22 31/12/22 30/06/23 30
Slide 30: Direct funding from the Banking business
Direct funding from the Banking business Direct funding1 € bn Capital-protected Certificates 122.7 123.4 124.7 124.5 Other Bonds 103.3 103.7 101.3 100.5 C/A, Sight & Time deposits (84.2%) (84.0%) (81.3%) (80.7%) (% Share on total) 30/09/2022 31/12/2022 30/06/2023 30/09/2023 30/09/22 31/12/22 30/06/2
Slide 31: Successful issuance activity and well diversified liability profile
Successful issuance activity and well diversified liability profile Wholesale bonds issued since 2022 at €5.75bn, with a well diversified seniority • Wholesale bonds issued for a total of €3.0bn €bn 0.75 in 9M 2023 (o/w: 50% «green») 0.75 0.75 0.75 0.75 0.40 0.50 0.50 0.30 0.30 • In rolling out its
Slide 32: Bond maturities: limited and manageable amounts
Bond maturities: limited and manageable amounts Institutional bond maturities € bn 3.25 2.0 0.50 0.75 n.m. 0.5 Q4 2023 FY 2024 FY 2025 Senior Pref. Senior Non-Pref. Covered Bonds Following the reimbursement in 9M 2023 of institutional bonds for a total of €1.9bn (of which: €1.4bn Covered Bonds and €
Slide 33: Indirect customer funding up at €100bn
Indirect customer funding up at €100bn: +13.8%Y/Y Assets under Management (AuM) Assets under Custody (AuC)1 € bn € bn +2.9% +35.7% +1.5% +24.4% -0.3% +1.4% 58.6 59.4 60.5 60.3 3.8 4.0 4.1 4.2 15.4 15.7 39.2 39.7 15.6 15.5 31.9 29.3 39.2 39.9 41.0 40.4 30/09/2022 31/12/2022 30/06/2023 30/09/2023 30/0
Slide 34: Net Customer Loans
Net Customer Loans Net Customer Loans € bn -1.2% Change -0.1% Net Performing Customer Loans 30/09/22 31/12/22 30/06/23 30/09/23 In % Y/Y In % YTD In % Q/Q 109.4 Core customer loans 102.9 102.8 100.9 99.1 -3.7% -3.6% -1.8% 109.5 108.2 108.0 - Medium/Long-Term loans 80.6 80.4 79.3 78.6 -2.4% -2.2% -0.
Slide 35: Analysis of Customer loan portfolio
Analysis of Customer loan portfolio Performing customer loan stock breakdown as at 30/09/2023 Managerial data, GBV Breakdown by customer segments Breakdown by geographic area (excluding GACS Senior Notes) Other (Public Sector, No-Profit, etc.) GACS Senior 71.2% 4.0% Notes 1.4% Financials 1 12.1% 21.
Slide 36: NPE migration dynamics
NPE migration dynamics 735 693 €m Inflows from 231 260 202 Performing to NPEs 9M 22 9M 23 Q1 23 Q2 23 Q3 23 €m 136 103 Outflows from NPEs 42 38 22 to Perf. Loans 9M 22 9M 23 Q1 23 Q2 23 Q3 23 348 €m 232 Flows from UTP to 102 84 46 Bad Loans 9M 22 9M 23 Q1 23 Q2 23 Q3 23 4. 9M 2023 Performance Detail
Slide 37: Asset Quality details
Asset Quality details Loans to Customers at AC1 Gross exposures 30/09/2022 31/12/2022 30/06/2023 30/09/2023 Chg. Y/Y Chg. YTD Chg. Q/Q €/m and % Value % Value % Value % Bad Loans 1,997 2,047 1,868 1,630 -367 -18.4% -417 -20.4% -238 -12.7% UTP 3,218 2,639 2,280 2,169 -1,048 -32.6% -470 -17.8% -110 -4
Slide 38: Capital position in detail
Capital position in detail1 FULLY LOADED CAPI TAL 31/12/2022 30/09/2022 31/03/2023 30/06/2023 30/09/2023 POSI TI ON (€/m and %) Restated CET 1 Capital 7,397 7,686 8,076 8,386 8,381 T1 Capital 8,786 9,076 9,466 9,776 9,771 Total Capital 10,576 10,800 11,192 11,484 11,510 RWA 61,399 59,859 59,514 58,8
Slide 39: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Roberto Peronaglio Banco BPM +39 02 9477.2090 Registered Offices: Piazza Meda 4, I-20121 Milano, Italy Tom Lucassen +39 045 867.5537 Corporate Offices: Piazza Nogara 2, I-37121 Verona, Italy Arne Riscassi +39 02 9477.2091 Silvia Leoni +39 045 867.5613 in
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