Bper Banca S.p.a. · MIL:BPE
Bper Banca — Q2 2020 Earnings Presentation
41 slides from Bper Banca's earnings presentation, Aug 5, 2020
Slide 1: 1H20 consolidated results
• 1H20 consolidated results • Transaction with Intesa Sanpaolo update • Outlook 2021 Alessandro Vandelli, CEO 5 August 2020 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by “BPER Banca” solely for No part of the information contained herein may for any purpose information purposes, and only in order to present its strategies be reproduced or published as a whole or in part, nor may such and main financial figures. informati
Slide 3: Important methodological note
Important methodological note July 2019 saw completion of the acquisition of an additional 4Q19, 1Q20 and 2Q20 are comparable on a like-for-like basis. shareholding in Arca Holding, the acquisition of the minority interests in Banco di Sardegna and the acquisition of 100% of Note that figures in the
Slide 4: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 5: Health emergency and BPER Group
Health emergency and BPER Group Quick reaction to challenges in uncertain and tough environment. Normalization started: full operations restored in compliance with the regulation Key priorities were to protect the health of employees and customers and implement support measures for households, small
Slide 6: Executive summary (1/2)
Executive summary (1/2) Resilient • 1H20 net profit of 104.7 €/mn supported by ability to generate revenues and tight cost control despite a context characterized by the economic slowdown as a consequence of the health emergency profitability with good revenues • 1H20 result is affected by some non-
Slide 7: Executive summary (2/2)
Executive summary (2/2) • Strong focus on asset quality allowed to reach the lowest NPE ratios and stocks since 2009 • Gross and net NPE ratios respectively at 9.1% and 5.0% significantly down vs 11.1% and 5.8% in Dec.’19 Strong improvement • Gross and net NPE stocks decrease respectively by 18.2% a
Slide 8: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 9: Direct and Indirect funding
Direct and Indirect funding Balance sheet structure Direct funding (+4.7% vs Mar.’20) and Indirect funding/Bancassurance (+4.7% vs Mar.’20) strong recovery in 2Q20 after the contraction in the first part of 2020. Net inflows more than doubled in 2Q20 vs 1Q20 Total Funding (€/mn; %) Direct Funding, q
Slide 10: Customer loans
Customer loans Balance sheet structure Net customer loans up by 3.0% since Mar.’20 and by 1.1% since Dec.’19 also supported by the measures of the Government to sustain the economy. High quality of performing loans book Customer loans breakdown (net & gross fig.; €/mn; %) Net customer loans, quarter
Slide 11: Non Performing Exposures (1/2)
Non Performing Exposures (1/2) Balance sheet structure Asset quality strong improvement. Gross NPE stock down by 18.2% since Dec.’19. Gross and net NPE ratios respectively down to 9.1% and 5.0% Gross NPE (€/mn; %) Gross NPE, quarterly trend (€/bn) Bad loans securitizations: “4Mori Sardegna” of 0.9 €
Slide 12: Non Performing Exposures (2/2)
Non Performing Exposures (2/2) Balance sheet structure Stable default rate at 1.7% (1.7% in 2019) despite of the economic slow-down and further strong increase of recovery rate at 7.0% from 6.3% in 2019 Default rate (%) Bad loans average recovery rate1 (%) (Bper Credit Management) 4.2% 7.0% 6.3% 5.3
Slide 13: Financial assets portfolio
Financial assets portfolio Balance sheet structure Financial assets portfolio at 22.3 €/bn up by 2.4 €/bn since Mar.’20 Financial Assets breakdown (€/mn; %) Italian Government bonds1 (€/mn) €/mn FVTPL FVOCI AC Total % on total Bonds 346 6,234 14,730 21,310 95.7% o.w. Italian gov 174 428 6,938 7,540
Slide 14: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 15: 1H20 reclassified Profit & Loss
1H20 reclassified Profit & Loss Profit and loss • 1H20 Net profit of 104.7 €/mn supported by good revenues generation and effective cost control. The result is affected by some non-recurring items such as additional loan loss provisions for 90.5 €/mn relating to the worsening of the macroeconomic co
Slide 16: Net Interest Income
Net Interest Income Profit and loss NII improvement in 2Q20 up by 0.7% q/q and by 1.3% q/q on ordinary basis mainly due to improvement of spread (+8 bps q/q) thanks to decrease of cost of funding and slight increase of asset yield Net Interest Income evolution (€/mn) Spread contribution (%) 1.90 1.8
Slide 17: Net Commissions
Net Commissions Profit and loss Net commissions down by 8.4% q/q impacted by the prolonged lock-down of over 2 months related to the health emergency Net Commissions breakdown (€/mn) Chg % • AuC and Bancassurance resilient, broadly vs 1Q20 unchanged q/q 268.3 275.9 267.6 • AuM (-9.5 €/mn; -10.6% q/q
Slide 18: Trading income and Dividends
Trading income and Dividends Profit and loss 2Q20 trading income of 46.8 €/mn vs 5.6 €/mn in 1Q20 influenced by the rebound in financial markets after the turmoil following the health emergency crisis Trading income evolution (€/mn) Dividends (€/mn) 9.7 3.4 0.5 0.8 12.0 Data comparable on a like-for
Slide 19: Operating costs
Operating costs Profit and loss 2Q20 operating costs amount to 410.1 €/mn slightly down by 0.2% q/q (-4.6% vs. 4Q19). Staff costs (-2.5% q/q) benefiting from redundancy plan. Higher admin costs (+2.1% q/q) mainly due to strategic operations projects and D&A (+7.6% q/q) Operating costs evolution (€/m
Slide 20: Provisions and other items
Provisions and other items Profit and loss Additional loan loss provisions of 90.5 €/mn in 1H20 relating to the worsening of the macroeconomic scenario caused by the health emergency (50 €/mn in 1Q20 and 40.5 €/mn in 2Q20). Provisions and other items (€/mn) 2Q19 3Q19 4Q19 1Q20 2Q20 Of which 50.0 €/m
Slide 21: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 22: Liquidity
Liquidity Liquidity and Capital adequacy Solid liquidity position. In Jun.’20, total eligible assets strongly increased at 27.1 €/bn. Large unencumbered eligible assets and deposits with ECB at 13.7 €/bn Total eligible Assets evolution* (€/mn) Eligible Assets Pool Composition (%) +29.6% 27,101 20,91
Slide 23: Capital Fully Loaded Phased In
Capital Liquidity and Capital adequacy Capital position significant improvement with a CET1 Fully Loaded at 12.57% up by 50 bps vs. 12.07% in Mar.’20 and up by 56 bps vs. 12.01% in Dec.’19 Common Equity Tier 1 Ratios (%) Fully Loaded Phased In +77 bps -27 bps +599 bps 14.11% 12.57% 12.57% 12.01% 12.
Slide 24: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 25: Final remarks
Final remarks • 1H20 Net profit of 104.7€/mn showing a good ability to generate revenues, despite the RESILIENT difficult economic and financial environment, and tight cost control PROFITABILITY • Conservative approach to asset quality (90.5 €/mn additional provisions accounted in 1H20 following the
Slide 26: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 27: Progress Update on Acquisition of Going Concern
Progress Update on Acquisition of Going Concern Indicative Timetable Feb 17th 2020 Transaction announcement Apr 22nd 2020 EGM approval of up to €1.0bn share capital increase Aug 5th 2020 Agreement on Revised Transaction Terms1 Summer 2020 Regulatory and Antitrust approvals 2H 2020 Capital Incr
Slide 28: Summary Overview of the Transaction
Summary Overview of the Transaction Acquisition of a Going Concern from Intesa Sanpaolo including 532 branches, c. #1.4m clients and c. €26bn of loans, significantly enhancing competitive positioning in Italy Overview of the Going Concern perimeter Revised transaction terms Branches: #532 (mainly
Slide 29: Strong Strategic Rationale Confirmed
Strong Strategic Rationale Confirmed Confirming sound and sustainable growth 1 Transaction coherent with 2019 – 2021 industrial plan guidelines 2 Creating shareholders value enhancing profitability, improving asset quality and maintaining a strong capital position 3 Significant scale increase and st
Slide 30: Enhancing Scale and Competitive Positioning in the Italian Banking Landscape
Enhancing Scale and Competitive Positioning in the Italian Banking Landscape Ranking of Selected Listed Italian Commercial Banks1 By Net Customer Loans (€bn) By Total Funding2 (€bn) By number of branches (#) PRE POST PRE POST PRE POST Unicredit 483 Unicredit 483 Intesa SP 960 Intesa SP ~1,100 Intesa
Slide 31: Strengthening of BPER Presence in Attractive Geographic Areas (1/2)
Strengthening of BPER Presence in Attractive Geographic Areas (1/2) Highly complementary branch networks which will significantly enlarge BPER “multi-regional presence” in the wealthiest northern Italian regions BPER branches + Going Concern branches = BPER branches pro-forma Branches: #1,3131 (5.4%
Slide 32: Strengthening of BPER Presence in Attractive Geographic Areas (2/2)
Strengthening of BPER Presence in Attractive Geographic Areas (2/2) Strengthening of group presence across Italy and in particular in the more productive and dynamic areas of the country (North-West and Lombardy) Going Concern BPER Market Shares (%) Going Concern BPER Pro-Forma Estimated Contributio
Slide 33: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 34: BPER is Fully Equipped to Face the New Challenging Environment
BPER is Fully Equipped to Face the New Challenging Environment Selected Macro Indicators1 Revised Macro GDP contraction in 2020E, with recovery in 2021 Environment "Lower for longer" interest rate environment -9.4% / +5.4% GDP Evolution (2020 / 2021) Selected Indicators (1H 2020) Strong reduct
Slide 35: Update on Financial Guidance
Update on Financial Guidance Selected Metrics Updated Guidance 2021E BPER Standalone Combined PF P&L (€/bn – unless otherwise stated) Revenues ~2.5 >3.4 Operating Expenses ~(1.6) ~(2,1) LLPs ~(0.5) ~(0.7) Net Income (€/m) ~235 ~375 Balance Sheet (€/bn) Total Loans ~54 ~80 Direct Funding ~58 ~90 Indi
Slide 36: Agenda
Agenda • BPER GROUP CONSOLIDATED RESULTS Executive summary Balance sheet structure Profit and loss Liquidity and Capital adequacy Final remarks • RATIONALE FOR THE ACQUISITION OF A GOING CONCERN FROM INTESA SANPAOLO GROUP AND DEFINITION OF THE MULTIPLE TO BE APPLIED TO THE CET1 OF THE GOING CONCERN
Slide 37: Customer loans
Customer loans Annexes Portfolio composition Net customer loans breakdown by sectors Customer loans breakdown by geographical (€/mn; %) distribution1(%) % on Total ∆% Business sector Jun 20 Customer vs Dec 19 Loans Centre North Manufacturing 7,472 14.2% +0.8% Wholesale and retail services, 52.5% 17.
Slide 38: Asset quality
Asset quality Annexes Asset quality breakdown (excl. customer debt securities) Gross exposures (€/mn) Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 Chg YTD Chg Y/Y % % % % % Abs. Chg (% ) Abs. Chg (% ) Non Performing Exposures (NPEs) 6,937 13.7% 6,515 11.6% 6,123 11.1% 6,056 11.1% 5,008 9.1% -1,115 -18.2% -1,9
Slide 39: Financial Assets details
Financial Assets details Annexes Bond PTF by Geographical breakdown (%) Govies PTF Geographical breakdown (%) France Other 1.9% 4.8% Other Germany 22.3% 2.7% Spain 14.9% Netherlands 4.0% Italy 45.7% Germany 6.0% Italy Spain 75.7% 8.6% France 13.4% 4.6 Bonds PTF Maturities1 (€/bn) 15.8 Italian Govies
Slide 40: Bonds maturities and issues details
Bonds maturities and issues details Annexes Outstanding bonds (€/bn) Bonds issued (€/bn) Dec 18 Dec 19* Jun 20* 0.7 Wholesale bonds 2.5 3.2 3.6 0.5 0.5 0.1 0.5 o/w covered bonds 2.0 2.6 3.1 o/w subordinated bonds 0.5 0.5 0.5 0.6 0.5 0.5 0.5 Retail bonds 1.5 2.0 1.4 o/w subordinated bonds 0.3 0.4 0.4
Slide 41: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Gilberto Borghi Via San Carlo, 8/20 - 41121 Modena - Italy Head of Investor Relations +39 059 2022194 gilberto.borghi@bper.it Giulia Bruni Via San Carlo, 8/20 - 41121 Modena - Italy Investor Relations +39 059 2022528 giulia.bruni@bper.it Nicola Sponghi V