Bff Bank Spa · MIL:BFF
Bff Bank Spa — Banca Farmafactoring S.p.A. (BFF Banking Group) — Debt Investor Presentation (November 2017)
23 slides from Bff Bank Spa's debt investor presentation, November 2017
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation November 2017 11
Slide 2: Disclaimer
Disclaimer “IMPORTANT: YOU ARE ADVISED TO READ THE FOLLOWING CAREFULLY BEFORE READING, ACCESSING OR MAKING ANY OTHER USE OF THE MATERIALS THAT FOLLOW. • As used in this document, the expression “these materials” means this document, together with any oral statements or question-and-answer sessions a
Slide 3: BFF Banking Group: A Bank Like No Other
BFF Banking Group: A Bank Like No Other General Overview High Profitability and Solid Balance Sheet (9M17) • Leading financial services provider to suppliers of the European Healthcare and Public Administration sectors Adj. net income(2) : Annualised €55m in line with Cost of Risk: • Three main busi
Slide 4: Long and Successful Track Record in a Changing Environment
Long and Successful Track Record in a Changing Environment • Established in 1985 • Spanish subsidiary active • Expand funding base: • Acquisition of Magellan • Listing on Borsa Italiana • Initial investment of €260k since 2011 − Senior bond issued in June 2014 in June 2016 Stock Exchange in April •
Slide 5: Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers
Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers, to Tackle the Payment Delays From the Public Administration in Southern Europe and CEE Endemic Delay in Payments in the Public Sector €250bn of Public Sector expenditures in the countries we operate in(4)
Slide 6: Investment Highlights
Investment Highlights 1 • Market leader in an unpenetrated market • Resilient profitability across market cycles: 23% adj. net income CAGR 2013-16, €55m in 9M17, in line with 9M16(1) Solid and Resilient • Long-standing relationship with top suppliers to the PA (leading multinational and national sup
Slide 7: We Operate in a €250bn Market, with Leadership Position in Many Geographies
We Operate in a €250bn Market, with Leadership Position in Many Geographies and Attractive Opportunities for Growth Key Considerations BFF Positioning Total Public Expenditure in Goods and Service (€bn) Non-recourse Factoring outstandings 2020E Total potential market is the with PA & NHS (€7.3bn)
Slide 8: Solid Business Model…
Solid Business Model… Suppliers Debtors Long-standing relationship with top suppliers to the Long track record in dealing with Public entities PA (leading multinational and national suppliers) and deep knowledge of the payment dynamics top 10 clients have been BFF clients for more than bette
Slide 9: …Able to Grow Profitably through Every Season…
…Able to Grow Profitably through Every Season… Net Income (2007-2016) Credit Bubble Financial Crisis Sovereign Debt Crisis BFF with Banking License Downgrade Downgrade of Downgrade Downgrade of ofItalian ITA Gov. Gov. Downgrade Downgrade ofto BBB Italian Downgrade Downgrade to of Italian Downgrade D
Slide 10: ... Increasingly Diversified
... Increasingly Diversified Key Considerations Customer Loans Evolution (€m) Significant customer loans growth with 2,596 BFF ex Magellan (€m) an higher contribution from less 545 capital intensive segments 1,962 2,052 2,050 Increased geographic diversification 1,555 1,137 2,050 with strengthen
Slide 11: Fortress Balance Sheet and Low Risk Profile…
Fortress Balance Sheet and Low Risk Profile… Key Considerations Breakdown of Balance Sheet 9M17 (€m) A fortress balance sheet 4,216 4,216 Other Other 120 179 − Conservative asset / liability management 204 AFS approach: loan book funding duration higher than REPOs Liquid government bonds HTM that
Slide 12: … Coupled With a Diversified Funding Base…
… Coupled With a Diversified Funding Base… Key Considerations Available Funding(1) (€m) Liquidity 351% 391% 502% 286% Balanced funding profile with deposits Coverage Ratio(2) accounting for 36% of drawn funds: 3,152 (3) (3) 2,988 − €799m deposits gathered as of September 2017, c. 2x versus FY2015
Slide 13: … and Backed by a Strong Capital Position…
… and Backed by a Strong Capital Position… Total Capital Ratio - Banking Group ex TUB Capital Ratio(1) Robust capital position maintained also after the cash SREP Requirements acquisition of Magellan, the full 2016 net income pay-out CET1 18.6% 16.7% 14.0% 6.55% and the DBRS Italian downgrade Ba
Slide 14: …with Additional Buffer from LPI Stock
…with Additional Buffer from LPI Stock Key Considerations LPI Stock Evolution (Excl. Magellan) (€m) • LPI stock represents a further buffer to an already strong capital position • BFF prudentially accounts for LPIs in P&L based on 45% (40% before 547 541 2016) recovery rate (recovery rate has been h
Slide 15: High Profitability and Strong Earnings Growth
High Profitability and Strong Earnings Growth Key Considerations Net Income adjusted (€m) Almost doubled net income in the last 4 years to €88m in RoTE 2016 (incl. Magellan) adjusted 26% 22% 28% 37% 31% 29% combined(1) Strong return on capital thanks to an efficient use of capital Equal to €60m
Slide 16: Good Operating Efficiency with Flat QoQ Costs…
Good Operating Efficiency with Flat QoQ Costs… Operating Costs(1) (€m) Adjusted(1,2) Including cost/income 35% 37% extraordinary Highly efficient structure with adjusted Cost/Income ratio costs ratio of 37% 49 49 9 4 6 Investments in infrastructures now largely made: 5 Stable 3Q17 operating co
Slide 17: …with Potential for Further Funding Cost Optimization
…with Potential for Further Funding Cost Optimization Key Considerations Interest Expenses (€m) Cost of Funding(1) Reduction in cost of funding continued with an average cost of BFF ex Magellan 4.9% 3.4% 2.2% 1.7% funding of 2.03% in 9M17, more than offsetting Tier 2 issuance and Vs. 4.4% Magellan
Slide 18: BFF 2020 “Strategic Targets”
BFF 2020 “Strategic Targets” Further consolidate leadership in Italy Continue to develop tailor-made offering to serve specific customer needs High quality services for large clients covering the full healthcare value chain Increase penetration into adjacent segments of non-healthcare supplier
Slide 19: Appendix
Appendix bffgroup.com 19
Slide 20: Summary Profit & Loss
Summary Profit & Loss €m 9M16 9M16 9M16 9M16 9M16 9M17 9M17 9M17 Reported Reported BFF Combined Adjustments Adjusted Reported Adjustments Adjusted Magellan 5M Interest Income 122,1 13,8 136,0 0,0 136,0 171,1 -25,2 145,9 Interest Expenses -22,2 -6,1 -28,3 0,4 -27,9 -29,8 0,0 -29,8 Net Interest Income
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet Assets 30.09.2016 31.12.2016 30.09.2017 Cash and cash equivalents 25,376 149,035 20,646,764 Financial assets held for trading 315,614 244,420 0 Financial assets at fair value through profit or loss 3,472,865 3,401,129 971,144 Available-for-sale financial assets 366,000,910
Slide 22: Consolidated Balance Sheet (Cont’d)
Consolidated Balance Sheet (Cont’d) Liabilities and Equity 30.09.2016 31.12.2016 30.09.2017 Due to banks Securities issued 385,872,701 634,806,875 541,075,903 Due to customers 2,817,683,437 2,996,142,256 2,587,554,738 Securities issued 646,169,916 634,282,882 574,168,292 Financial liabilities held f
Slide 23: Disclaimer
Disclaimer We have prepared this document solely for informational purposes. You should not definitively rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. You and your directors, off
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