Credito Emiliano S.p.a. · MIL:CE

Credito Emiliano — 9M 2020 Earnings Presentation

27 slides from Credito Emiliano's earnings presentation, 2020

  1. Slide 1: Group Results 9M20

    A = GROUP RESULTS 9M20

  2. Slide 2: 9M20: Key Points

    9M20: KEY POINTS LOANS GROWTH NPL RATIO Loans to Customers Credit quality: above €28 billion, best-in-class in +10.9% 6.1% growing more than Italy and in line 10% YoY, more than with the EU 3X compared to the 3.4% average 2.9% 3.0% Industry PROFITABILITY CAPITAL Net profit 13.9% Capital position at

  3. Slide 3: A Growing Digital Approach

    A GROWING DIGITAL APPROACH INTERNET BANKING - 1 DIGITAL OPERATION: 4 RETAIL MIGRATION TREND  >620,000 contracts (+8%)  +21% of accesses  as of September 2020, more  +25% of online operations than 88% of overall transactions was carried out through digital channels 2 MOBILE - RETAIL (internet ban

  4. Slide 4: M&A with CR Cento: New Corporate Structure

    M&A WITH CR CENTO: NEW CORPORATE STRUCTURE As is To be 78.6% 76.3% 1.8% 67.1% Free 21.4% float Credem shares: 332,392,107 CR Cento shares: 14,949,935 Credem shares: 342,157,062 1,000,000 shares 13,949,935 shares with +9,764,955 at €7 per share share swap* of 0.7 shares shares of Credem each share of

  5. Slide 5: Expected Results from the M&A Operation

    EXPECTED RESULTS FROM THE M&A OPERATION REVENUES/COSTS GEOGRAPHICAL SYNERGIES  Badwill generation net of PPA to be defined concurrently with the merger plan  +€9 million of revenue synergies (fully phased) driven by better cost of funding and increase in product margins  +€13 million of cost syne

  6. Slide 6: Covid-19 Emergency: Total Delivered Loans

    COVID-19 EMERGENCY: TOTAL DELIVERED LOANS Moratoria State-backed guaranteed loans «Cura Italia» decree, «Accordo Abi» and «Liquidità» decree «Fondo di solidarietà prima casa» Households: €650 mln <€30 k: €460 mln Governative Corporate: €3,550 mln initiatives >€30 k: €1,299 mln and other of which mor

  7. Slide 7: Profitability: 9M20 Highlights

    9M20 HIGHLIGHTS • Strong expansion of Loans to Customers, that grew +€2.8 billion in the last 12 months (+10.8% YoY), GROWTH once again significantly over-performing the Industry (+3% YoY) • All-time high Customer Funding, with €4.6 billion of net production, mainly driven by Direct Deposits and the

  8. Slide 8: Reclassified Income Statement

    RECLASSIFIED INCOME STATEMENT €, million 3Q19 2Q20 3Q20 Δvs 3Q19 9M19 9M20 • Operating Income reached Δvs 9M19 almost €895 million (+0.7% ù Operating Income 300.9 278.1 318.3 +5.8% 888.2 894.7 +0.7% vs 9M19), thanks to resilient revenues and Core Op. Income 270.3 271.8 296.9 +9.9% 835.7 836.4 +0.1%

  9. Slide 9: Normalized Income Statement

    NORMALIZED INCOME STATEMENT 9M19 9M20 POSITIVE EVOLUTION OF ALL €, million ù NORMALIZED AGGREGATES Net Interest Income 361.0 342.7 • The table shows aggregates normalized from Non Interest Margin 500.4 528.6 positive and negative contributions coming Operating Income 861.4 871.3 from TLTRO II and II

  10. Slide 10: Net Interest Income (1/3)

    NET INTEREST INCOME (1/3) NET INTEREST INCOME: EVOLUTION EURIBOR AND SPREAD BTP/BUND +16.8% 256 243 0,5% TLTRO III 0,4% benefit 136 199 0,3% 230 129 160 171 0,2% 123 139 133 119 116 0,1% 115 112 0,0% 130 -0,1% -0,31% -0,32% -0,30% -0,2% 30 -0,40% -0,40% -0,41% -0,3% -0,47% -0,4% -0,5% -70 1Q19 2Q19

  11. Slide 11: Net Interest Income (2/3)

    NET INTEREST INCOME (2/3) CUSTOMER SPREAD  In 3Q20, Customer Spread narrowed both for 1,99 Credem and for the Industry 1,97 1,92 1,90 1,91 1,85 1,82 1,82 1,78  In detail, the contraction was mainly due to 1,75 1,70 1,68 1,69 1,80 loans interest rates, that were penalized by an -0.23 1,55 even stro

  12. Slide 12: Net Interest Income (3/3)

    NET INTEREST INCOME (3/3) SECURITIES’ PORTFOLIO BREAKDOWN  Securities portfolio decreased to ~€9 billion, 5.4 bn 5.4 bn allowing to benefit from some securities’ 00% disposals (mainly US Treasury), although 90% the Group is likely to evaluate new 37% 33% 36% 35% purchases to reconsitute it 80% 43%

  13. Slide 13: Non Interest Margin

    NON INTEREST MARGIN Total 164.9 171.1 182.2 201.5 186.4 161.9 182.6 2,7 27,8 19,4 Performance Fees 13,1 6,2 14,5 4,1 47,5 46,0 Income from 49,2 49,8 47,9 Financial Activities 43,8 52,4 13,7 14,6 Banking Fees 10,2 17,1 13,6 14,4 12,3 Insurance Income 98,1 91,4 96,0 Asset Management 82,2 85,1 81,7 86,

  14. Slide 14: Operating Costs and D&A

    OPERATING COSTS AND D&A OPERATING COSTS EMPLOYEES / NETWORKS -1.8% Employees 183 183 173 180 184 164 170 6.195 6.201 6.266 6.068 6.140 5.899 85 5.763 5.544 5.519 5.604 5.609 51 54 49 52 55 43 49 35 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 9M20 85 132 130 118 131 132 121 121 Financial Adviso

  15. Slide 15: Loans to Customers

    LOANS TO CUSTOMERS LOANS TO CUSTOMERS: EVOLUTION 24.000 5.444 5.699 7.119 7.964 5.328 5.362 5.332 20.000 Other Loans 7.405 7.484 16.000 6.838 7.045 7.206 7.733 7.993 Residential Mortgage12.000 2.594 2.681 2.656 2.546 2.601 2.710 2.753 Leasing 8.000 Short-Term Loans 10.282 10.452 10.200 11.155 10.342

  16. Slide 16: Loans: Comparison with the Industry

    LOANS: COMPARISON WITH THE INDUSTRY LOANS TO CUSTOMERS GROWTH* MARKET SHARES** EVOLUTION +10.9% YoY 1,92% 1,89% Industry 1,79% 1,82% 1,9% 1,77% Credem 1,66% +54% 1,58% 1,6% 1,48% 1,28% 1,3% 1,20% 1,16% MS on Performing Loans 1,07% 3.0% YoY 1,0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 9M20

  17. Slide 17: Group Customers Funding: Net Inflows Breakdown

    GROUP CUSTOMERS FUNDING: NET INFLOWS BREAKDOWN 4,592 AUC Direct Deposits AUM + Insurance 2,945 2,962 Total Net Inflows 2,011 2,300 1,976 1,880 1,582 1,490 1,130 930 845 700 625 447 511 -161 -94 -195 -454 9M16 9M17 9M18 9M19 9M20 9M16 9M17 9M18 9M19 9M20 • 9M20 Net Inflows reached a new high at €4.6

  18. Slide 18: Deposits, AUM and Insurance

    DEPOSITS, AUM AND INSURANCE • Excellent evolution of Direct Deposits, that grew €, million 9M19 9M20 +10% YTD and +14.5% YoY • Strong increase of AUM, up by +3.6% YoY mainly Slight / Saving Depo. 24,694 28,384 thanks to the greater contribution of net inflows in CD and Other Deposit 538 515 the thir

  19. Slide 19: Bonds Issuances and Maturities

    BONDS ISSUANCES AND MATURITIES ISSUANCES MATURITIES Wholesale Retail 1000 Covered Bond 2.000 800 365 500: SNP 1.500 750: CB 600 500 SNP 1.407 1.473 1.000 400 750 750 1.500 549 Tier 2 1.250 Tier 2 Covered 500 938 Tier 2 200 Bond 600 312 523 38 200 - 249 50 100 200 50 100 100 0 2010 2011 2012 2013 201

  20. Slide 20: Credit Quality: Gross NPL Ratio

    CREDIT QUALITY: GROSS NPL RATIO GROSS NON PERFORMING LOANS 900 707 2018 578 526 600 2019 413 399 390 9M20 Disposal 300 ~€90 mln Disposal New DoD ~€40 mln 34 49 64 effect 0 Gross Bad Loans Gross UTP Loans Gross Past Due Loans % on Loans (Credem) 2.7 2.1 1.9 1.6 1.5 1.5 0.1 0.2 0.2 % on Loans (Industr

  21. Slide 21: NPL: Accounting Coverage

    NPL: ACCOUNTING COVERAGE NET NON PERFORMING LOANS €/mln 2018 2019 9M20 0  Net Non Performing Loans were €473 million, down by 3.5% YTD. Coverage ratio Net Bad Loans 232.6 174.6 155.8 was 51.6% on NPL, driven by lower bad loans after the disposal performed in Net UTP Loans 300.2 275.5 266.2 2Q20, an

  22. Slide 22: Comprehensive Coverage

    COMPREHENSIVE COVERAGE Coverage NPL Gross Net Coverage Shortfall* incl. Shortfall Bad Loans 525.5 155.8 70.4% 91.6 87.8% +473.4 + Net NPL UTP Loans 389.8 266.2 31.7% 17.2 36.1% - Shortfall - 108.1 = NPL net of Shortfall 365.3 Total NPL (9M20) 979.0 473.4 51.6% 108.1 62.7% PERFORMING LOANS COVERAGE F

  23. Slide 23: Cost of Risk

    COST OF RISK 68 59 55 58 52 48 42 44 39 36 31 32 34 38 47 45 39 41 24 24 24 28 34 30 18 27 20 21 13 17 15 8 15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 1H20 9M20 Cost of risk Cost of risk (net of non-recurring events) COST OF RISK: HISTORY • Annualized Cost of Risk reduced to 36 bps, 8

  24. Slide 24: Assets & Liabilities

    ASSETS & LIABILITIES ASSETS 18,000  Securities portfolio shrinked 28,103 27,421 9M20 mainly for the drop of HTCS 1H20 12,000 aggregate. On top of that, 8,635 Due from Banks increased 7,534 7,371 also for the excess liquidity 5,623 5,200 4,986 5,067 3,699 6,000 generated by TLTRO III  Loans to Cust

  25. Slide 25: Liquidity Ratios

    LIQUIDITY RATIOS NSFR LCR 199% 186% 125% 125% 180% 172% 121% 150% 120% 90% 2018 2019 9M20E 2018 2019 9M20E  Both NSFR and LCR ratios were well above 1,30 1,25 LOAN TO DEPOSIT RATIO* minimum regulatory requirements. In 1,20 1,15 1,10 1,05 0,97 particular, the high NSFR level enables the 1,00 0,91 0,

  26. Slide 26: Consolidated Capital Ratios

    CONSOLIDATED CAPITAL RATIOS CET1 RATIO CAPITAL AND CAPITAL RATIOS (CREDEMHOLDING)* Banking Group Credemholding 15,0% 2.100 13,9% €, million 2019 9M2 0 2018 2019 9M2 0 14,0% 2.220 2.410 1.782 2.039 2.177 13,5% 1.900 CET 1 Total Capital 2.567 2.762 2.093 2.339 2.576 13,3% 1.700 13,0% 12,7% Capital abs

  27. Slide 27: Disclaimer and Contacts

    DISCLAIMER AND CONTACTS The manager responsible for preparing the company’s financial reports Mr. Paolo Tommasini of Credito Emiliano S.p.A., declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corres

Credito Emiliano S.p.A. (Credem) — 9M 2020 Earnings Presentation on 6ix