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Nomura — Banca Popolare dell'Emilia Romagna (BPER Group) — Nomura Financials Conference - London 2011

37 slides from Nomura's conference presentation, Sep 1, 2011

  1. Slide 1: BPER Group Presentation

    BPER Group Presentation Nomura Financials Conference - London 1 September 2011

  2. Slide 2: Disclaimer

    Disclaimer This document has been prepared by the cooperative company “Banca Popolare dell’Emilia Romagna” solely for information purposes, and only in order to present its strategies and main financial figures. The information contained in this document has not been subjected to independent audit.

  3. Slide 3: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 3

  4. Slide 4: A Leading Federated Banking Group (1/2)

    A Leading Federated Banking Group (1/2) Number of branches and market share by Province BPER Group highlights  1,300 branches in Italy and 1 branch in Luxembourg as of 30 June 2011  National market share of 3,85% (number of branches)  Strong regional presence with a market share over 4% in 7 regi

  5. Slide 5: A Leading Federated Banking Group (2/2)

    A Leading Federated Banking Group (2/2) Rationalization and group simplification becomes visible … Commercial banks Wealth Management Other financial Corporate & & insurance services Investment banking Banca popolare dell’Emilia Romagna (Parent bank) Optima SGR ABF Leasing Meliorbanca Banca Pop. di

  6. Slide 6: BPER Group: history and growth

    BPER Group has an excellent track record in acquiring and restructuring small local banks,a process which has – in just a few years – turned it into one of Italy’s foremost national banking groups BPER Group: history and growth Incorporation of EBT in Disposal of BPER ARCA Vita Total assets (€/bn) c

  7. Slide 7: BPER Group peers

    BPER Group peers Loans/Total assets Total RWA/Total assets 81,1% 81% 59% 65,8% BPER Peers BPER Peers Sources: 1H11 Consolidated Results – Peers: UCG, ISP, MPS,UBI, BP, BPM; Sources: FY10 Consolidated Results – Peers: UCG, ISP, MPS,UBI, BP, BPM; Internal data calculations Internal data calculations G

  8. Slide 8: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 8

  9. Slide 9: Main figures trend (1/2)

    Main figures trend (1/2) Loans Direct Funding Total 8 % Cagr 5,3% Cagr 8, 48.284 45.232 47.001 45.442 47.780 40.135 40.213 37.366 35.391 31.274 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Cost/income Cost of credit * 2008-2010 figures pro-formed to be comparable with previous years 1,28% 59,8%

  10. Slide 10: Main figures trend (2/2)

    Main figures trend (2/2) ROE (Net profit/Shareholders’ equity) ROA (Net profit/Tot. Assets) 13,0% 13,3% 1,0% 0,9% 8,0% 0,6% 5,7% 4,7%* 0,4% 4,3% 0,3% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 * ROE recurrent (net of disposal of Arca Vita) BPER PAYOUT Ratio 54,9% 54,4% 42,4% 24,5% 25,3% 2006

  11. Slide 11: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 11

  12. Slide 12: Main events

    Main events  1H11 main events  Closing ClosingofofMeliorbanca MeliorbancaPrivate disposal Private to Santander disposal (February ‘11) to Santander  Goodwill impairment of -19.1 €/mn (out of a value of 35.7 €\mn) of two affiliated banks (“Casse piemontesi”)  Meliorfactor fully incorporated in Em

  13. Slide 13: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 13

  14. Slide 14: Direct funding (1/2)

    Direct funding (1/2) Total Direct Funding (€/mn) Main trends +2.1%  Wholesale funding represents only 2.4% (1.1 €/bn) +0.6% of the total direct funding  Nearly 70% of direct funding comes from retail 48.584  Sight deposits (more than 57% of the total direct 48.284 funding) amount 28 €/bn of which

  15. Slide 15: Direct funding (2/2)

    Direct funding (2/2) 2011 bond maturities – monthly view (€/mn) Main trends 1.4 €\bn 0.7 €\bn 400  No wholesale bond maturities in 2011 and 2012 350  Strong placing power in the 1H11: bond issues 300 exceeded full 2011 maturities 250  1H11 fund-raising operations: a) 400 €/mn senior 200 bond - 2y

  16. Slide 16: Indirect deposits and bancassurance

    Indirect deposits and “bancassurance” Total Indirect Deposits (€/mn) Main trends -0.6%  Indirect deposits decrease in 1H11 due to -3.1% institutional counterparties outflows and 28.065 switches into direct funding 27.345 27.191  AUM outflows concentrated expecially in 1H11 (-0.6 €/mn)  Bancassura

  17. Slide 17: Customer loans

    Customer loans Loans (€/mn) Main trends +5.1%  ABF Factoring incorporated in EmilRo Factor: +0.7% loans growth contribution +0.3 €/bn 48.121  Good performance of mortgages (+9.9% y/y), 47.780 mainly supported by SMEs  Market share (may’11): 3.18% (+2 bps in 1H11) on corporates and 2.04% (-2 bps i

  18. Slide 18: Doubtful loans

    Doubtful loans Doubtful Loans Breakdown (net figures; €/mn) Main trends Change Change on YoY on dec'10  Doubtful loans stock up, substantially in line with the peers 3.918 13,1% 10,8% 3.608 3.535 3.728  Watchlist loans increase due to inflows from 3.465 571 commercial banks 538 -5,4% 7,1% 605 533

  19. Slide 19: Securities portfolio

    Securities portfolio Securities portfolio breakdown (as of 30 june ‘11) Main trends €/m HFT CFV AFS HTM total % on total Bonds 1.908 138 1.459 697 4.201 84,7%  Securities portfolio slight reduction in the 1H11, Equity 11 7 426 - 444 8,9% mainly concentrated in HFT. Italian Govies Funds and Sicav 18

  20. Slide 20: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 20

  21. Slide 21: Profit & Loss

    Profit & Loss Profit & Loss (yearly view) P&L 30 june 2011 30 june 2010 Change Change recurrent non-recurrent recurrent non-recurrent recurrent total €/mn total total 2011 vs 2010 2011 vs 2010 Interest Margin 650,6 0,0 650,6 634,1 0,0 634,1 16,6 2,6% 16,6 2,6% Commissions 341,0 0,0 341,0 350,8 0,0 3

  22. Slide 22: Commercial banks contribution

    Commercial banks contribution Contribution by commercial bank 61,6%  Good contribution form BPER, B.P. di BPER Ravenna e B.P. di Aprila 51,4%  Carispaq recovering after the post- 5,9% earthquake difficult period BPRA 4,1%  BPMZ e BdS in turnaround following 2,4% new top management appointment BPA

  23. Slide 23: Interest margin

    Interest margin Interest margin (€/mn) Main trends +2.6% 650,6  Remarkable growth (+2.6% y/y) supported by volume 634,1 effect and despite of the worsening of market conditions  2Q11 higher than 1Q11 even net of calendar-effect jun.'10 jun.'11 Interest margin change breakdown (YoY) Interest margin

  24. Slide 24: Spread effect – Quarterly trends

    Spread effect – Quarterly trends Spread* (%) Main trends 2,03  Mark down improved despite the total funding cost 1,98 1,96 1,95 1,93 growth due to higher market interest rates:  sight deposits: cost increase by 32 bps y/y (+19 bps in the 1H11) pushed up by Corporate and Large Corporate  bonds cos

  25. Slide 25: Commissions

    Commissions Commissions (€/mn) Main trends -2.8%  Down by -9.8 €/mn y/y mainly due to Meliorbanca Private and Sis.Pa. deconsolidation (-7.7 €/mn) 350,8 341,0  Substantial stability on a like-for-like basis, in the presence of different effects:  disappearance of fees from retail CDs placed into r

  26. Slide 26: Non interest income – Dividend and Trading gains

    Non interest income – Dividend and Trading gains Dividends and Trading gains (€/mn) Main trends +72.2%  Comparison y/y influenced by non-recurrent 48,8 income on the sale of Arca Assicurazioni in the 1H10  Fair value option for financial liabilities positive 28,3 contribution (+18.1 €/mn) due to w

  27. Slide 27: Operating costs

    Operating costs Operating Costs (€/mn) Main trends +2.2%  Operating costs up by 2.2% y/y, mainly explained by a different accounting approach related to the 631,5 645,5 staff costs in BdS and new employment contract in BPER  Meliorbanca Private disposal and SisPa posted among assets under disposal

  28. Slide 28: Loan Loss Provisions

    Loan Loss Provisions Provisions Breakdown Main trends jun.'11 jun.'10 Change 2011 2010  Provisions: improvement (-9,8% y/y) mainly €/mn Abs. % Q2 Q1 Q4 Q3 Q2 Q1 driven by performing loans provisions and write- Loan Loss Provisions 169,0 181,8 -12,8 -7,0% 95,4 73,6 104,5 64,7 83,8 98,0 backs expecia

  29. Slide 29: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 29

  30. Slide 30: Regulatory capital

    Regulatory capital Capital Ratios (quarterly trend) Main trends 11,3% 10,6% 10,8% 10,6% Total Capital  Effective CT1 ratio improves vs march ’11 and includes: 11,0% Ratio  67 €/mn retained earnings 7,3% 7,3% 7,1% 7,1%  Carispaq free share capital increase executed in 6,8% Tier 1 Ratio 2Q11 (+27 €

  31. Slide 31: Capital base strengthening activities (1/2)

    Capital base strengthening activities (1/2) Capital base strengthening without turning to the BPER’s shareholders for new capital  2 MAIN PILLARS:  BPER’s decision to evaluate the opportunity to anticipate the Basel 3 requirements by 31/12/2011 through: 1) Anticipated conversion of the Soft Mandat

  32. Slide 32: Capital base strengthening (2/2)

    Capital base strengthening (2/2) The aim of the envisaged projects is to match the Basel 3 parameter of 7% starting from the end ‘11  Decrease in minorities interests, assuming full take-out, generates a Common Equity Tier 1 Ratio increase of around 250 €/mn (approx. 50 bps) 31/12/2011 estimated 

  33. Slide 33: Contents

    CONTENTS  BPER Group  Main figures trend  1H11 Results  Highlights  Assets and liabilities  Profit and loss  Capital adequacy  Group Business Plan 2009-2011: work in progress 33

  34. Slide 34: Implementation Plan: 7 Programs and 28 Project initiatives

    The Implementation Plan is articulated in 7 Programs and 28 Project initiatives, 16 of them with high priority Programs Initiatives % Status Distribution Channel Program Re-launch of underperforming Branches CRM instruments&methods + Commercial Behaviours Marketing&Commercial Program Empowerment / R

  35. Slide 35: Closing the gap: upside potential in coming years

    Closing the gap: upside potential in coming years. Productivity per employee (€/000) Main trends 13.120  Good potential in terms of productivity, 10.573 mainly on indirect deposits side 4.268 2.521  Good return on assets, but with operating 4.609 structure to improve 4.048 4.005 4.243 BPER Peers C

  36. Slide 36: Business Plan 2009-2011: three development scenarios

    Business Plan 2009-2011: three development scenarios Sensitivity analysis Changes in Net profit and ROE* (€m,%) 550 Early economic 468 recovery 450 416 338 Basic scenario 350 327 ROE* 250 224 Net Profit* 270 6,5% 202 209 191 150 169 Recurrent Net Profit* Net Profit* 50 2003 2004 2005 2006 2007 2008

  37. Slide 37: Contacts

    Contacts Gilberto Borghi Alessandro Simonazzi Head of Investor Relations Head of Planning & Control Via San Carlo, 8/20 Via San Carlo, 8/20 41100 Modena - Italy 41100 Modena - Italy Ph. +39 059 2022194 Ph. +39 059 2022014 E-mail: gilberto.borghi@bper.it E-mail: alessandro.simonazzi@bper.it 37

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