Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — H1 FY2020 Earnings Presentation
54 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, Feb 6, 2020
Slide 1: Mediobanca 2Q20/6M Results as at 31 December 2019
MEDIOBANCA 2Q20/6M RESULTS AS AT 31 DECEMBER 2019 Milan, 6 February 2020
Slide 2: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 3: MB continues on its growth story with record levels of commercial activity
MB CONTINUES ON ITS GROWTH STORY WITH RECORD LEVELS OF COMMERCIAL ACTIVITY 4% GROWTH IN REVENUES & PROFIT DELIVERED Strong commercial results Distribution: WM sale force up to 1K (+140 YoY), Consumer direct franchise up to 206 (+14 YoY), Compass Quinto launched NNM: €2bn of AUM/AUM in last 6M, with
Slide 4: Last quarter takeaways
LAST QUARTER TAKEAWAYS 6m results as at December 2019 Section 1 Franchise enlarged in Wealth Management and Consumer, in line with BP23 guidelines : WM sale force recruitment ongoing: >30 in last Q (mainly in Affluent) achieving ~1K professionals Record level of Compass network up to 206 (7 agencies
Slide 5: Higher revenue-generating assets fostered 4% revenues growth
HIGHER REVENUE-GENERATING ASSETS FOSTERED 4% REVENUES GROWTH 6m results as at December 2019 Section 1 Steady loan book … … and robust TFAs growth … …generate sound revenue increase (€bn) (€bn) (6m, €m) +10% +2% +8% +4% +3% 63.7 62.4 57.9 1,277 1,325 46.3 45.0 1,170 42.9 49.4 21.9 186 22.6 171 21.0 1
Slide 6: Long-term NII growth trend continuing
LONG-TERM NII GROWTH TREND CONTINUING UP 3% YoY AND 1%QoQ 6M results as at December 2019 Section 1 NII by division (€m. 6M) New loans by product (€bn, 6M) +1% Mortgages QoQ 362 +3% 359 +4% +58% 722 1.3 672 701 1.0 139 136 0.8 136 1Q20 2Q20 128 138 127 1H19 2H19 1H20 474 Consumer Banking 450 432 +11%
Slide 7: Fees rebounding, especially in 2Q, driven by K-light business
FEES REBOUNDING , ESPECIALLY IN 2Q, DRIVEN BY K-LIGHT BUSINESS WM: THE MAIN CONTRIBUTOR TO GROUP FEES (48%) 6m results as at December 2019 Section 1 Fees by division (€m,6M) CIB fees by product (€m, 3m) +12% 66 65 QoQ 174 57 +5% 14 11 Lending +7% 155 9 8 9 10 16 9 12 10 9 10 Specialty fin 329 12 313
Slide 8: Record level of activity in AUM/AUA gathering
RECORD LEVEL OF ACTIVITY IN AUM/AUA GATHERING €2bn NNM in last 6M, of which €1.6bn in last 3M AUM/AUA now 66% of TFA Group TFAs trend (€bn) 1.6 0.3 (0.6) 1Q20 2Q20 63.7 61.4 1.0 56.2 1.3 5.3 47.8 3.7 4.7 Affluent +2.6 Affluent +0.8 Affluent +2.2 Private +3.0 39.0 Private +0.9 41.8 Private +1.6 37.1
Slide 9: Asset quality at best historical levels
ASSET QUALITY AT BEST HISTORICAL LEVELS 6M results as at December 2019 Section 1 Cost of risk by division (bps) Gross NPL (“deteriorate”, €m) and coverage (%) 57% 55% 185 190 3000.0 53% 54% 60% 2500.0 50% 1,920 1,976 2000.0 1,782 New 1,832 40% DoD ~170m 193 197 185 -7% 1500.0 30% 52 48 1000.0 20% 50
Slide 10: Asset quality details by divisions
ASSET QUALITY DETAILS BY DIVISIONS 6M results as at December 2019 Section 1 Net NPLs of which Bad loans NPL Coverage NPL as % of loans (“deteriorate”) (“sofferenze”) From stage 2 Gross for new DoD1 4.3% 3.9% Mediobanca +2% -33% 57% Net 826 844 54% 1.9% 1.8% Group 114 76 Dec18 Dec19 Dec18 Dec19 Dec18
Slide 11: GOP up 3% to €625m – cost/income @45%
GOP UP 3% TO €625M – COST /INCOME @45% 6M results as at December 2019 Section 1 MB Group operating profit by division (YoY, 6M, €m) Cost/income: 44% Cost/income: 45% +3% YoY 15 (4) (8) 16 +32% +9% -1% - 625 606 GOP Wealth Principal Consumer Corporate & Holding GOP 6M-Dec18 Management Investing Banki
Slide 12: Group ROTE >10%
GROUP ROTE >10% WM increasing ROAC to 23% 6M results as at December 2019 Section 1 Revenues GOP Net profit ROAC1 +4% ROTE 11.1% +3% +4% Mediobanca 1,277 1,325 10.8% 10.6% 606 625 468 ROTE adj. 10.4% Group 451 Dec18 Dec19 Dec18 Dec19 Dec18 Dec19 Dec18 Dec19 23% Wealth +10% 14% +32% Management 299 +35
Slide 13: MB strong capital profile confirmed
MB STRONG CAPITAL PROFILE CONFIRMED BUFFERS COMFORTABLY ABOVE SREP (>550 bps) 6m results as at December 2019 Section 1 Capital ratios vs capital requirements 2020 MB SREP requirement: among the lowest in EU and the second lowest in Italy2 MB Total Capital: 17.1% MB CET1 ratio: Avg. 9.9% 14.1% Buffer
Slide 14: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 15: Wealth Management
WEALTH MANAGEMENT Be MEDIOBANCA
Slide 16: Record level of activity …
RECORD LEVEL OF ACTIVITY … €1.9bn NNM in AUM/AUA with AUM/AUA at €42bn (+13% YoY), New loan +58%, LOAN +18% Franchise (no. of salespeople) TFAs Net New Money (6M, €bn) New loans (€bn, mortgages) Deposits ~1K 0.9K AUM/AUA 0.8K ~130 ~130 ~130 1.9 1.3 1.0 ~780 ~850 1.9 0.8 ~710 +20% 1.7 1.4 +58% 0.2 (0
Slide 17: … driving revenues (up 10%) and ROAC (up to 23%)
… DRIVING REVENUES (UP 10%) AND ROAC (UP TO 23%) 6M results as at December 2019 Section 2 WM revenues by source (6M, €m) WM revenues by segment (6M, €m) Profitability and efficiency (6M, €m, %) +10% +7% 79% 79% 299 75% 299 272 272 100 40% 256 256 = 40 90 35% 22 40 80 30% 23% +12% 158 100 70 25% +16%
Slide 18: Affluent: enlarged distribution & focus on AUM/AUA
AFFLUENT: ENLARGED DISTRIBUTION & FOCUS ON AUM/AUA 6M results as at December 2019 Section 2 AUM/AUA NNM trend (3M,€bn) AUM/AUA NNM: peer analysis1 (€bn) AUM/AUA stock trend (€bn) Saleforce2 (∆%Dec18) €1.4bn 1.8k 4.1k 2.0k 0.9k 2.5k +35% +4% -1% +3% +20% -1% 0.8 +16% -4% €1bn €0.8bn 2.0 2.0 +31% -50%
Slide 19: Private: focus on product mix and margins
PRIVATE: FOCUS ON PRODUCT MIX AND MARGINS 6M results as at December 2019 Section 2 AUM/AUA NNM trend (3M,€bn) TFA trend: peers analisys¹ AUM/AUA (€bn) 9M to 3M to +18% Sept19 Sept19 +9% €0.9bn 18% 18.5 0.5 17.0 14% 15.7 €0.3bn 0.4 12% €0.2bn 11% 7% 7% 0.3 0.2 2% 0.1 (0.1) Dec18 June19 Dec19 -4% 1Q19
Slide 20: Consumer Banking
CONSUMER BANKING Be MEDIOBANCA
Slide 21: Enhanced distribution driving record new business
ENHANCED DISTRIBUTION DRIVING RECORD NEW BUSINESS 6M results as at December 2019 Section 2 Ongoing distribution enhancement to keep efficiency at …and impacting positively on new business, above €2bn top levels… for the first time in 2Q 33% 9.6 10 (3M, €m) 32% 8.9 9.5 2,028 31% 8.5 1,954 9 C/I ratio
Slide 22: Strong new loans activity, rebalancing ongoing
STRONG NEW LOANS ACTIVITY, REBALANCING ONGOING 6M results as at December 2019 Section 2 Compass new business by product (6M, €bn) Personal loans new business by channel (6M, €bn) +11% Compass branches/agencies Banks 3.9 3.5 0.5 1.0 1.1 0.5 0.8 0.8 0.6 0.6 0.6 0.6 1.8 +10% 1.9 Dec16 Dec17 Dec18 Dec19
Slide 23: Strong profitability confirmed @ 30%
STRONG PROFITABILITY CONFIRMED @ 30% REVENUES UP 4%, COR @190BPS 6M results as at December 2019 Section 2 Revenues (6M, €m) LLPs and CoR (€m, bps) Net profit & ROAC (€m, %) 204 CoR 300 32% 0.35 190 30% +4% 190 (bps) 180 200 ROAC 30% +4% 532 0.3 513 170 250 493 +9% +12% 150 -4% 0.25 150 -6% 128 200 0
Slide 24: Corporate & Investment Banking
CORPORATE & INVESTMENT BANKING 24
Slide 25: Revenues resilient due to effective diversification
REVENUES RESILIENT DUE TO EFFECTIVE DIVERSIFICATION 6M results as at December 2019 Section 2 CIB revenues YoY trend (€m, 6M) December 19 December 18 Lending Improved mix Lending 34% 30% Advisory Advisory <50% Financing ~45% Investment Banking 19% 14% ~5% Trading €333m €332m Specialty Specialty Finan
Slide 26: Leading position in M&A …
LEADING POSITION IN M&A … 6M results as at December 2019 Section 2 Selected M&A Large Corp Transactions since January 2019 M&A Italy 2019 – Ranking by Deal Value1 Pending Pending September 2019 April 2019 March 2019 16.2 €bn, Deal Value Tower €400m €11bn Undisclosed €151m Agreement between ISP and P
Slide 27: …Debt and Equity Capital Markets
…DEBT AND EQUITY CAPITAL MARKETS 6M results as at December 2019 Section 2 Mediobanca’s DCM and ECM team successfully completed several Bookrunner Italy ECM1 transactions for Italian and international clients, including major roles (From July 2019) in Unicredit’s Tier 2 transaction, Snam Tender Offer
Slide 28: Sound asset quality and ROAC resilient at 16%
SOUND ASSET QUALITY AND ROAC RESILIENT AT 16% 6M results as at December 2019 Section 2 Loan book by segment (€bn) Gross UTP loans and CoR (€m, bps) Net profit & ROAC (€m, %) +4% ROAC +1% 18% 1200 (17) -10 16% 16% 190 19 14% 16% 17.9 18.0 (29) -20 1000 (33) 170 14% 18 17.4 0.4 0.4 CoR -30 0.3 150 146
Slide 29: Principal Investing
PRINCIPAL INVESTING 9 492) MEDIOBANCA
Slide 30: Investments stable - ROAC @13%
INVESTMENTS STABLE - ROAC @13% 6M results as at December 2019 Section 2 KPIs (€m) Main equity investments as at Dec19 (€m) PI - €m Dec18 Dec19 D Book value HTC&S Company (€m) % €m reserve Revenues 171 186 +9% Ass.Generali 12.9% 3,790 n.m.1 Gain from disposals/ (11) 8 n.m. Other listed equities 114 6
Slide 31: Holding Functions
HOLDING FUNCTIONS = MEDIOBANCA
Slide 32: Funding stable at €52bn, CoF under control
FUNDING STABLE AT €52BN, COF UNDER CONTROL 6M results as at December 2019 Section 2 Funding stock breakdown (€bn) Avg. cost of funding trend (bps vs Eur3M) +1% HoH 145 51.4 52.6 -1% 52.1 130 130 6.1 6.4 QoQ 6.5 4.3 4.3 4.3 90 80 80 18.5 19.3 19.4 60 60 60 22.4 22.6 21.9 June19 Sept19 Dec19 June18 Ju
Slide 33: Effective access to markets, liquidity optimized
EFFECTIVE ACCESS TO MARKETS, LIQUIDITY OPTIMIZED 6M results as at December 2019 Section 2 KPIS Key funding issuances since June19 Effective access to funding markets in all market conditions Issue date Bond type Size (€m) Spread at issue Investor through variety of channels, with a good balance betw
Slide 34: MREL requirements confirm MB among best in Europe
MREL REQUIREMENTS CONFIRM MB AMONG BEST IN EUROPE 6m results as at December 2019 Section 2 MREL liabilities vs MREL requirements MREL requirement: MB and peers2 MREL Liabilities: 41.5%RWA Deposits³: 2.4% Senior MREL Surplus Avg. 25.7% bonds: 19.9% 19.5% 21.6% Sub Surplus Sub: 5.4% MREL Senior bonds
Slide 35: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 36: Closing remarks
CLOSING REMARKS Closing remarks Section 3 Intense business activity fostered by robust capital, strong business positioning and investment in distribution delivered growth in revenue-generating assets in revenues (+4% to €1,325m) in net profit (+4% to €468m) Group ROTE >10% Asset contents and operat
Slide 37: Mediobanca 2Q20/6M Results as at December 2019
MEDIOBANCA 2Q20/6M RESULTS AS AT 31 DECEMBER 2019 Milan, 6 February 2020
Slide 38: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 39: Mediobanca Group P&L
MEDIOBANCA GROUP P&L 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income 1,325 1,248 1,277 4% 641 684 641 607 639 Net interest income 722 695 701 3% 362 359 349 346 357 Fee income 329 298 313 5% 174 155 150 149 158
Slide 40: Mediobanca Group A&L
MEDIOBANCA GROUP A&L 6M results as at December 2019 Annex 1 D D D €bn Dec19 Sept19 June19 Dec18 QoQ1 HoH1 YoY1 Funding 52.1 52.6 51.4 50.8 -1% +1% +3% Bonds 19.4 19.3 18.5 19.2 +0% +4% +1% Direct deposits (retail&PB) 21.9 22.6 22.4 21.2 -3% -2% +3% ECB 4.3 4.3 4.3 4.3 Others 6.5 6.4 6.1 6.0 +2% +7%
Slide 41: Wealth Management Results
WEALTH MANAGEMENT RESULTS 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income 299 275 272 +10% 159 140 138 137 137 Net interest income 138 132 128 +8% 69 69 66 66 64 Fee income 158 140 141 +12% 89 70 71 69 71 Net tr
Slide 42: Consumer Banking Results
CONSUMER BANKING RESULTS 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income 532 514 513 +4% 264 267 257 257 256 Net interest income 474 449 450 +5% 239 235 224 224 227 Fee income 58 65 63 -9% 25 33 33 32 29 Total c
Slide 43: CIB Results
CIB RESULTS 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income 332 294 333 -1% 182 150 149 145 174 Net interest income 136 134 139 -2% 67 69 68 66 70 Net treasury income 74 55 72 +2% 50 24 28 27 38 Fee income 122 1
Slide 44: Principal Investing Results
PRINCIPAL INVESTING RESULTS 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income 186 162 171 9% 49 137 102 60 72 Impairments 8 8 (11) 5 3 3 4 (15) Net result 187 156 159 18% 51 136 95 60 60 Book value (€bn) 4.5 3.9 3
Slide 45: Holding Function Results
HOLDING FUNCTION RESULTS 6M results as at December 2019 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec19 June19 Dec18 Dec19 Sept19 June19 Mar19 Dec18 Total income (11) 12 (7) (5) (6) (1) 13 1 Net interest income (31) (24) (24) (15) (16) (10) (13) (8) Net treasury income 12 33 12 6 6 10 23 8 Fee incom
Slide 46: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 47: Long-Term Incentive Plan: main characteristics
LONG-TERM INCENTIVE PLAN: MAIN CHARACTERISTICS 6M results as at December 2019 Annex 2 Aspects Comments Performance evaluation The four financial years from FY 2019-20 to FY 2022-23, in tandem with the strategic plan timeframe CEO, Mediobanca Beneficiaries General Manager, Mediobanca CEO CheBanca!/Co
Slide 48: Financial/quantitative indicators, LTI 2019-23
FINANCIAL/QUANTITATIVE INDICATORS, LTI 2019-23 6M results as at December 2019 Annex 2 Assessment criteria Target KPI KPI Weighting % fixed annual Plan 2023 KPI threshold salary – plan time horizon¹ > 5% 40% 4-5% 30-40% Growth EPS Growth 33% 4% 4% 30% 3-4% 20% < 3% 0 > 12.1% 40% 11-12.1% 30-40% Profi
Slide 49: Non-financial/qualitative indicators, LTI FY 2019-23
NON-FINANCIAL/QUALITATIVE INDICATORS, LTI FY 2019-23 6M results as at December 2019 Annex 2 The variable LTI component linked to achievement of the financial/quantitative objectives may be adjusted by the Board of Directors based on the achievement of the non-financial/qualitative objectives, by a p
Slide 50: Means of payment and deferral structure for LTI plan
MEANS OF PAYMENT AND DEFERRAL STRUCTURE FOR LTI PLAN 6M results as at December 2019 Annex 2 Long-term incentive plan Performance evaluation Payment Instrument Total FY 2019-20 - FY 2022-23 2023 2024 2025 2026 2027 2028 Cash 20% 13% 14% 47% Equity 20% 11% 11% 11% 53% 4 years 5 years 9 years The equit
Slide 51: Agenda
Agenda Section 1. Group results as at December 2019 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Long Term Incentive Plan 3. Glossary
Slide 52: 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 WM Wealth management
Slide 53: Disclaimer & Declaration of Head of Financial Reporting
DISCLAIMER & DECLARATION OF HEAD OF FINANCIAL REPORTING Declaration by Head of Company Financial Disclaimer Reporting Some declarations included in this document are As required by Article 154-bis, paragraph 2 of Italian forward-looking statements and are based on Legislative Decree 58/98, the under
Slide 54: 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