Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — 9M FY2020 Earnings Presentation
43 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, May 7, 2020
Slide 1: Mediobanca 3Q20/9M Results as at 31 March 2020
MEDIOBANCA 3Q20/9M RESULTS AS AT 31 MARCH 2020 Milan, 7 May 2020
Slide 2: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 3: Mediobanca grew and reshaped across cycles...
MEDIOBANCA GREW AND RESHAPED ACROSS CYCLES... Disciplined growth in revenue-generating assets reflected in increase in revenues, while keeping efficiency … TFA - €bn Loans - €bn 10YCAGR Revenues: +5% 3.5 46 46 61 44 3.0 45 46 40 35 2.5 2.5 40 39 2.0 1.5 35 17 1.6 1.0 30 10 22 0.5 7 0.0 25 June09 Jun
Slide 4: ...showing sound resilience & stakeholders remuneration
… SHOWING SOUND RESILIENCE & STAKEHOLDERS REMUNERATION High capital generation (last capital increase in 1998) and high profitability… CET1 ratio % ROTE adj. % 14.2% 14.1% 10 13.3% 9 10 9 8 12.0% 12.1% 8 7 11.7% 7 11.1% 11.2% 11.5% 11.1% 10.3% 5 4 4 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18
Slide 5: MB entered Covid-19 crisis in a stronger position
MB ENTERED COVID-19 CRISIS IN A STRONGER POSITION COMPARED TO THE TWO PREVIOUS ONES… Stronger capital base Different funding and loan book mix CET1 ratio (%) €bn 53 Funding 51 35 Loans 44 14% Others SME 4% 12% 19% 12% 14% TLTRO 8% Consumer 30% 10% 12% 23% WM Residential 44% 11% Deposits mortgages 26
Slide 6: ...and stronger than most of the EU banks
…AND STRONGER THAN MOST OF THE EU BANKS Stronger in capital… …stronger in asset quality… MB buffer over SREP: ~600bps, among the highest in EU Stage 32 - MB vs ITA and EU 10% 54% 60.0% Avg. 9.9% 8% 8.25% 46% 43% 50.0% 6% 40.0% 4% 2% 30.0% 3.8% 3.1% 6.9% MB Bank 10 Bank 11 Bank 12 Bank 13 Bank 14 Ban
Slide 7: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 8: Covid-19 – Mediobanca Group crisis management and support in the emergency
COVID-19 – MEDIOBANCA GROUP CRISIS MANAGEMENT AND SUPPORT IN THE EMERGENCY March 2020: Italy was the first EU nation of many to be impacted by the outbreak of a healthcare crisis, unprecedented in modern times, with severe consequences in terms of human, social and economic losses. No-one expected t
Slide 9: Covid-19 – Specific initiatives for our clients
COVID-19 – SPECIFIC INITIATIVES FOR OUR CLIENTS Covid-19 Impact Section 2 WEALTH MANAGEMENT CONSUMER BANKING CIB Advisory services intensified for Pure digital channel enhanced to Investment Banking affluent and private customers to allow loan applications from home Management of impact on CF & cope
Slide 10: Covid-19: heavy impact on financial markets...
COVID-19: HEAVY IMPACT ON FINANCIAL MARKETS… Covid-19 Impact Section 2 Euro Stoxx 600 VIX 450 90 430 80 410 70 390 60 370 50 350 40 38 330 328 310 30 290 20 270 10 250 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jan-20 Feb-20 Mar-20 Apr-20 May-20 BTP/Bund spread 5Y and 10Y (bps) iTraxx Main and Itraxx Xove
Slide 11: ...household behaviour...
…HOUSEHOLD BEHAVIOUR… Covid-19 Impact Section 2 WM¹ MORTGAGES2 CONSUMER LENDING³ New business significantly reduced Net New Money mix back to liquidity New business has dropped by 40% in due to financial uncertainties and the Advisors have shown resilience thanks to March, and as much as 70% in the
Slide 12: ...and investment banking volumes...
…AND INVESTMENT BANKING VOLUMES… Covid-19 Impact Section 2 M&A ECM DCM The M&A rebound ground to a halt, ECM activity further reduced in core DCM showed resilience in core markets, with transaction volumes slowing in markets, with Italy lagging behind on while Italy was impacted by the sudden March
Slide 13: MB monthly activity YTD – WM strongly resilient...
MB MONTHLY ACTIVITY YTD – WM STRONGLY RESILIENT… Covid-19 Impact Section 2 Net New Money by product Net New Money by segment TFAs (Affluent & Private, €bn) (Total, €bn) (€bn) €1.1bn NNM in 3Q €0.6bn NNM in 3Q -6% QoQ 0.6 0.4 0.3 +0.6 0.4 0.1 0.3 - 0.3 - 0.3 (4,1) 0,4 0,4 0,3 0.3 0,3 63.7 (0,1) (0,1)
Slide 14: ...rebound in corporate, heavy reduction in retail
…REBOUND IN CORPORATE, HEAVY REDUCTION IN RETAIL Covid-19 Impact Section 2 Corporate new loans (€bn) Mortgages new loans (€bn) Consumer new loans (€bn) Term loan RCF 0.8 0.6 0.7 0.7 0.7 0.4 0.20 0.6 0.6 0.17 0.14 0.15 0.4 0.12 0.11 0.4 0.5 0.12 0.3 0.2 0.3 0.3 0.3 0.07 0.1 0.2 19 20 19 20 19 20 19 2
Slide 15: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 16: Group P&L: strong core revenues with NII +3% and fees +6%
GROUP P&L: STRONG CORE REVENUES WITH NII +3% AND FEES +6% Group results at March 2020 Section 3 Financial results Highlights 9m D 3Q 2Q 3Q €m Despite the COVID-19 impact on March, last quarter Mar20 YoY1 Mar20 Dec19 Mar19 shows sound banking results with €360m in NII (up 4% Total income 1,907 +1% 58
Slide 17: Loan book up with asset quality remaining distinctive...
LOAN BOOK UP WITH ASSET QUALITY REMAINING DISTINCTIVE… Group results at March 2020 Section3 Loans: diversification & quality Despite the impact of COVID-19 on new lending in D March on Consumer, loans grew in the quarter (up 3%) €bn Mar20 Dec19 Mar19 QoQ1 driven by stronger Wholesale (up 8%) Loans
Slide 18: ...without major impact from Covid-19 due to...
…WITHOUT MAJOR IMPACT FROM COVID-19 DUE TO… Group results at March 2020 Section 3 Limited impact of COVID-19 emergency on asset quality as at March 2020 Stage 1¹ Stage 2¹ Stage 3¹ Loans under moratoria 120% 1.0% 16.0% 20.0%08% 70.0% 0.5% 0.5% 0.5% 58% 110% 54% 55% ➢ €0.5bn gross (~1% Group loans) as
Slide 19: ...in corporate: limited exposure to sectors impacted by Covid-19
…IN CORPORATE: LIMITED EXPOSURE TO SECTORS IMPACTED BY COVID-19 AND SMES, PORTFOLIO FOCUSED ON IG COUNTERPARTIES Group results at March 2020 Section 3 WB loan book by sector (as at March 2020) 15% 14% High impact from Covid-19 Immediate impact from Covid-19 9% 9% 8% 7% 6% 4% 4% 4% 3% 3% 2% 2% 2% 2%
Slide 20: ...in consumer: limited CoR & new loan correlation with GDP
… IN CONSUMER : LIMITED COR & NEW LOAN CORRELATION WITH GDP, STRONG CAPABILITIES IN PRICING, RECOVERY, DISPOSALS Group results at March 2020 Section 3 Linea acquired in 2008. Following 18m spent harmonizing the AQR impact 500 acquired portfolio up to Compass asset quality standards (10) 450 (8) 400
Slide 21: Asset quality confirmed as strong in all divisions
ASSET QUALITY CONFIRMED AS STRONG IN ALL DIVISIONS Group results at March 2020 Section 3 Net NPLs of which bad loans NPL coverage NPL as % of loans (“deteriorate”) (“sofferenze”) From stage 2 4.2% -1% 3.9% 3.8% for new DoD1 58% 54% 55% Gross Mediobanca 1.8% 1.8% 1.8% 792 844 836 +1% Group 115 76 77
Slide 22: Funding & capital at comfortable levels
FUNDING & CAPITAL AT COMFORTABLE LEVELS Group results at March 2020 Section 3 Funding & liquidity: comfortable position in a stressed scenario FY20 funding plan 100% completed at pre-crisis levels (avg CoF flat at 80 bps). Capital structure optimization on track D €bn Mar20 Dec19 Mar19 with inaugu
Slide 23: CET1 stable at ~14% including DPS accrual
CET1 STABLE AT @14% INCLUDING DPS ACCRUAL EARNINGS GENERATION, RWA CONTROL AND CAUTIOUS ASSET ALLOCATION CET1¹ @ 13.9%, with ~60 bps of already accrued dividend as at RWA under control at 47bn (Mar20, €bn) Dec19 maintained. WM: flat QoQ +20bps 14.1% 10% - 13.9% Dividend -20bps Dividend accrued -15bp
Slide 24: WM: business model resilience and effectiveness confirmed
WM: BUSINESS MODEL RESILIENCE AND EFFECTIVENESS CONFIRMED NET PROFIT UP 19%; ROAC@21% Group results at March 2020 Section 3 Financial results Highlights 9m D 3m 3m 3m €m Mar20 YoY1 Mar20 Dec19 Mar19 Business model resilience and effectiveness confirmed in the new environment: Total income 444 +8% 14
Slide 25: TFAs: positive NNM in Private & Affluent, deposits up
TFAs: POSITIVE NNM IN PRIVATE & AFFLUENT, DEPOSITS UP Group results at March 2020 Section 3 Group TFAs trend (€bn) 61.4 62.4 63.7 0.3 0.6 60.2 0.3 0.7 1.0 (4.1) NNM by segment NNM by segment NNM by segment Affluent +0.3 Affluent +0.5 41.8 Affluent +0.9 39.0 39.8 37.8 Private +0.7 Private +0.2 Privat
Slide 26: Consumer: asset quality preserved due to value-driven approach
CONSUMER: ASSET QUALITY PRESERVED DUE TO VALUE-DRIVEN APPROACH NET PROFIT DOWN 3%; ROAC@29% Group results at March 2020 Section 3 Financial results Highlights 9m D 3m 3m 3m Business model resilience confirmed in the new environment: €m Mar20 YoY1 Mar20 Dec19 Mar19 Strong product diversification: per
Slide 27: CIB: resilience fostered by client-driven approach & diversification
CIB: RESILIENCE FOSTERED BY CLIENT-DRIVEN APPROACH & DIVERSIFICATION NET PROFIT DOWN 26%, ROAC@11% Group results at March 2020 Section 3 Financial results Highlights 9m D 3m 3m 3m Business model diversification fostering resilience: €m Mar20 YoY1 Mar20 Dec19 Mar19 Total income 436 -9% 104 182 145 Fi
Slide 28: PI – net profit +3%, ROAC@14%
PI – NET PROFIT +3%, ROAC@14% Group results at March 2020 Section 3 Financial results Highlights 9m D 3m 3m 3m 3Q20 net profit down 36% YoY to €38m due to impairment €m Mar20 YoY1 Mar20 Dec19 Mar19 (~€40m) charges to the seed capital portfolio2 for Cairn Total income 252 +9% 67 49 60 and RAM (down 9
Slide 29: HF – comfortable funding and liquidity positions
HF – COMFORTABLE FUNDING AND LIQUIDITY POSITIONS Group results at March 2020 Section 3 Financial results Highlights 9m D 3m 3m 3m €m Mar20 YoY1 Mar20 Dec19 Mar19 Comfortable funding and liquidity position, as FY20 funding plan 100% completed with cost of funding flat at 80 bps. Total income (13) n.m
Slide 30: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 31: What's next
WHAT’S NEXT Closing remarks Section 4 9M20 SHOW STRONG RESULTS Robust performance in core revenues, strong new lending business and NNM Superior asset quality and capitalization confirmed: CET1@14% with 60bps dividend accrued High profitability with ROTE @10% MB HAS PROVED TO BE ABLE TO GROW AND DEL
Slide 32: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 33: Mediobanca Group P&L
MEDIOBANCA GROUP P&L 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income 1,907 1,884 1% 582 641 684 641 607 Net interest income 1,082 1,047 3% 360 362 359 349 346 Fee income 487 462 6% 159 174 155 150 149 Net treasury income 89 151 -41% (3) 57 35 46
Slide 34: Mediobanca Group A&L
MEDIOBANCA GROUP A&L 9M results as at March 2020 Annex 1 ∆ ∆ €bn Mar20 Dec19 June19 Mar19 QoQ1 YoY1 Funding 53.9 52.1 51.4 52.0 +3% +4% Bonds 19.2 19.4 18.5 19.2 - +0% Direct deposits (retail&PB) 22.4 21.9 22.4 22.6 +2% -1% ECB 4.7 4.3 4.3 4.3 - - Others 7.6 6.5 6.1 5.9 +17% +30% Loans to customers
Slide 35: Wealth Management results
WEALTH MANAGEMENT RESULTS 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income 444 410 +8% 145 159 140 138 137 Net interest income 204 194 +5% 66 69 69 66 66 Fee income 235 210 +12% 77 89 70 71 69 Net treasury income 5 5 +0% 3 1 2 1 2 Total costs (338
Slide 36: Consumer Banking results
CONSUMER BANKING RESULTS 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income 805 770 +5% 273 264 267 257 257 Net interest income 711 675 +5% 237 239 235 224 224 Fee income 94 95 -2% 36 25 33 33 32 Total costs (227) (216) +5% (77) (79) (70) (77) (75)
Slide 37: CIB results
CIB RESULTS 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income 436 478 -9% 104 182 150 149 145 Net interest income 203 205 -1% 67 67 69 68 66 Fee income 174 175 -0% 52 65 57 53 52 Net treasury income 59 98 -40% (15) 50 24 28 27 Total costs (213) (19
Slide 38: Principal Investing results
PRINCIPAL INVESTING RESULTS 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income 252 231 +9% 67 49 137 102 60 Impairments (32) (7) n.m. (40) 5 3 3 4 Net result 225 219 +3% 38 51 136 95 60 Book value (€bn) 4.3 3.7 +15% 4.3 4.5 4.2 3.9 3.7 Ass. Generali
Slide 39: Holding Function results
HOLDING FUNCTION RESULTS 9M results as at March 2020 Annex 1 9m 9m ∆ €m 3Q20 2Q20 1Q20 4Q19 3Q19 Mar20 Mar19 YoY1 Total income (13) 7 (1) (5) (6) (1) 13 Net interest income (41) (37) +11% (10) (15) (16) (10) (13) Net treasury income 19 35 -46% 7 6 6 10 23 Fee income 9 8 +11% 2 3 4 -1 4 Total costs (
Slide 40: Agenda
AGENDA Section 1. MB well equipped to cope with Covid-19 Section 2. Covid-19 impact Section 3. Group results as at March 2020 Section 4. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 41: Glossary
GLOSSARY MEDIOBANCA BUSINESS SEGMENT PROFIT & LOSS (P&L) and BALANCE SHEET CIB Corporate and investment banking DPS Dividend per share WB Wholesale banking EPS Earning per share SF Specialty finance ESG Environmental, Social, Governance CB Consumer banking FAs Financial Advisors FVOCI Fair Value to
Slide 42: Disclaimer & declaration of Head of Financial Reporting
DISCLAIMER & DECLARATION OF HEAD OF FINANCIAL REPORTING Disclaimer This document includes certain projections, estimates, forecasts and consequent targets which reflect the current views of Mediobanca – Banca di Credito Finanziario S.p.A. (the “Company”) with regard to future events (“forward-lookin
Slide 43: Investor contacts
INVESTOR CONTACTS Mediobanca Group Investor Relations Piazzetta Cuccia 1, 20121 Milan, Italy Jessica Spina Tel. no. (0039) 02-8829.860 Luisa Demaria Tel. no. (0039) 02-8829.647 Matteo Carotta Tel. no. (0039) 02-8829.290 Marcella Malpangotto Tel. no. (0039) 02-8829.428 Email: investor.relations@medio