Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — Banco Bpm Societa Ord — Q1 2024 Earnings Presentation
38 slides from Banco Bpm Spa's earnings presentation, May 7, 2024
Slide 1: Group Q1 2024 Results Presentation
Group Q1 2024 Results Presentation 07 May 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Banco BPM ("Banco BPM"); for the purposes of this notice, "presentation" means this document, any oral presentation, any questions and answers session and any written or oral material discussed following the distribution of this document. The distrib
Slide 3: Methodological Notes
Methodological Notes ▪ The balance sheet and income statement layouts contained in this news release have been reclassified along management criteria in order to provide an indication on the Group’s overall performance based on more easily understandable aggregate operating and financial data. These
Slide 4: Agenda
Agenda 1 Executive Summary 5 2 Key Highlights 11 3 Final Remarks 22 4 Q1 2024 Performance Details 25 4
Slide 5: Executive Summary
Executive Summary 1
Slide 6: A powerful start into the year: high profitability and strong capital generation
A POWERFUL START INTO THE YEAR: HIGH PROFITABILITY AND STRONG CAPITAL GENERATION FULL CONFIDENCE IN OUR COMPELLING FINANCIALS STRATEGIC PLAN TARGETS • Well-diversified business model NET FEES Q1 NET INCOME @ €370M: & solid franchise +12% Q/Q • +40% Y/Y and +15% Q/Q • Ahead of FY 2024 guidance (quart
Slide 7: Q1 2024: Strong performance in key P&L items
Q1 2024: Strong performance in key P&L items CONFIRMING A SOLID GROWTH IN OUR PROFITABILITY TRAJECTORY €m €m Core Revenues1 €m LLPs Profit from continuing operations (pre-tax) +11% -40% +40% +2% -53% +48% 1,282 1,397 1,421 662 175 474 539 529 557 137 448 82 743 868 864 Q1 23 Q4 23 Q1 24 Q1 23 Q4 23
Slide 8: Key Product Factories: further opportunities over the plan horizon
Key Product Factories: further opportunities over the plan horizon EVOLUTION PATH OF OUR NEW STRATEGIC GROWTH ENGINES Full Ownership in JV in P&C 2026 Life Insurance Insurance 2025 NUMIA JV in Payments System 2024 Full integration 2022/2023 Implementing the new configuration • Migration to the new L
Slide 9: Asset Quality trajectory well on track
Asset Quality trajectory well on track DECREASING COST OF RISK BACKED BY SAFE ASSET QUALITY Including frontloading of NPE disposals (9bps) STRATEGIC PLAN COST OF RISK 2023-26 A PROMISING START: (bps) 51 53 ~45 ALREADY CLOSE TO OUR 31 STRATEGIC PLAN TARGETS Q1 23 FY 23 Q1 24 FY 26 annualised annualis
Slide 10: Strong capital base and well-balanced liquidity & funding position
Strong capital base and well-balanced liquidity & funding position CET1 RATIO EVOLUTION: +117BPS Y/Y AND +58BPS IN Q1 SIGNIFICANT 14.16% 14.74% 13.57% ~14% CAPITAL MDA BUFFER GENERATION @ 567BPS 31/03/23 31/12/23 31/03/24 2026 Strategic Plan Forecast TOTAL DIRECT FUNDING1: +€4.2BN Y/Y AND +€3BN IN Q
Slide 11: Key Highlights
Key Highlights 2
Slide 12: P&L at a glance
P&L at a glance P&L € m HIGHLIGHTS Q1 23 Q4 23 Q1 24 Chg. Q/Q Chg. Y/Y Q1 TREND: TWO-YEAR EVOLUTION €m Net interest income 743 868 864 -0.4% 16.3% €m +36% Net fees and commissions * 493 467 522 11.7% 5.8% 1,048 1,282 1,421 Income from associates 36 49 30 +0.7% Q/Q «CORE» excl. day effect REVENUES *
Slide 13: NII at €864m in Q1 2024
NII at €864m in Q1 2024 NII TREND MAIN ACTIONS SUPPORTING NII TARGET OVER THE PLAN HORIZON €m +16.3% ❑ INCREASE SIZE OF • Notional amount of IRS @hedge accounting2: 743 868 864 REPLICATING €16bn as at 31/03/24 • Additional option-based structures ready to PORTFOLIO (STRATEGIC increase fix-receiver a
Slide 14: Solid franchise value
Solid franchise value Strong growth in Total Customer Financial Assets and resilient Loan volumes TOTAL CUSTOMER FINANCIAL ASSETS1: +€5.4BN IN Q1 STEADY CORE PERFORMING CUSTOMER LOANS € bn GBV, € bn 210.3 215.6 Cap.-protected Certificates & other Debt Securities at FV 5.3 5.7 97.3 96.9 Financials, P
Slide 15: Total Net Fees & Commissions up at €522m
Total Net Fees & Commissions up at €522m: +11.7% Q/Q and +5.8% Y/Y INVESTMENT PRODUCT FEES €m +14.6% Investment Product +27.0% Fees benefit from 175 201 Q/Q Y/Y TOTAL NET FEES & Running fees 158 strong commercial COMMISSIONS1 120 +4% +2% activity in WM, 117 115 confirmed by Upfront fees 58 43 81 +90
Slide 16: Cost/Income ratio down at 47%
Cost/Income ratio down at 47% 2023 impact from new STAFF COSTS Labour Contract €m 462 • Staff costs in Q1 2024 include the 405 432 ~50 quarterly incremental impact from the new labour contract (€12.5m) TOTAL OPERATING COSTS vs. the year 2023 • Upcoming savings from Early €m Q1 23 Q4 23 Q1 24 Retirem
Slide 17: Cost of Risk: an excellent quarter
Cost of Risk: an excellent quarter Gross NPEs: -23.8% Y/Y and -4.9% Q/Q Migration rates well LLPS & COR GBV, Stock €4.7bn under control €3.8bn €3.6bn LLPs -40.0% UTP + PD 2.6 <1% since 2.1 2.0 9M 2021 Q1 24 Bad Loans FY 23 €m -52.9% 2.1 annualised 1.6 1.5 Default rate 175 0.93% 0.83% 137 31/03/23 31
Slide 18: Optimization and diversification of Debt Securities portfolio
Optimization and diversification of Debt Securities portfolio OVERALL TREND AND ACCOUNTING BREAKDOWN COMPOSITION BY COUNTERPARTY € bn € bn 31/03/23 31/12/23 31/03/24 40.5 36.2 36.5 0.6 Corporate 5.4 6.1 7.7 0.4 0.5 10.6 FVTPL 9.8 10.4 Govies 30.8 30.4 32.7 FVOCI 62.3% 62.1% Non-IT Govies 63.9% 26.0
Slide 19: Reserves of debt securities at FVOCI and Net Financial Result
Reserves of debt securities at FVOCI and Net Financial Result Very low sensitivity of debt securities portfolio at FVOCI confirmed RESERVES OF DEBT SECURITIES AT FVOCI1 BREAKDOWN OF NET FINANCIAL RESULT Post-tax €m €m Total NFR -34.1 -13.8 +8.8 31/03/23 31/12/23 31/03/24 Other NFR components 14.5 60
Slide 20: Robust liquidity & funding position, with ratios well above minimum requirements
Robust liquidity & funding position, with ratios well above minimum requirements CASH + UNENCUMBERED ASSETS1 Remix in liquidity components driven by TLTRO reimbursement LCR 187% 155% € bn 47.9 40.7 41.9 0.5 HQLA2 €34.1bn €28.3bn Cash 0.5 0.6 9.0 LIQUIDITY Depo facility with ECB 22.0 17.4 o/w: 31/12/
Slide 21: Strong internal capital generation driving increase in CET1 ratio to 14.74%
Strong internal capital generation driving increase in CET1 ratio to 14.74% Further significant strengthening in ratios and buffers CET 1 RATIO EVOLUTION: +58BPS IN Q1 2024 % 14.16 +65bps -46bps +3bps +12bps +24 bps +1 bps 14.74 31/12/23 Q1 2024 Dividends FVOCI Debt Dividends from Credit Risks Other
Slide 22: Final Remarks
Final Remarks 3
Slide 23: Highly confident in the delivery of our targets in 2024…
Highly confident in the delivery of our targets in 2024… MAIN DRIVERS KPIs Δ VS. 2023 Interest rate Confirmed vs. previous forecast: Net Interest Income scenario 3 ECB rate cuts in H2 2024 Commercial Strong boost from Investment Product placements Net Fees & Commissions activity Operating costs Stri
Slide 24: … and in 2026, thanks to the accelerated pace vs. the Plan
… and in 2026, thanks to the accelerated pace vs. the Plan STRATEGIC PLAN 2023A Q1 2024A 2026E TOTAL REVENUES €1.34bn €1.43bn ~€1.35bn Quarterly Avg. Quarterly Avg. PRE-PROV. INCOME €0.69bn €0.77bn ~€0.69bn Quarterly Avg. Quarterly Avg. COST OF RISK 53bps (FY) 31bps (annualized) ~45bps (FY) GROSS NP
Slide 25: Q1 2024 Performance Details
Q1 2024 Performance Details 4
Slide 26: P&L: Quarterly comparison
Reclassified income statement (€m) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Chg. Q/Q Chg. Q/Q % P&L: Quarterly Net interest income 743.0 809.9 868.7 867.7 864.4 -3.3 -0.4% Income (loss) from invest. in associates carried at equity 36.3 24.3 34.1 49.4 30.3 -19.0 -38.5% comparison Net interest, dividend and simi
Slide 27: Balance Sheet
Balance Sheet Reclassified assets (€ m) Chg. Y/Y Chg. YTD 31/03/23 31/12/23 31/03/24 Value % Value % Cash and cash equivalents 23,068 18,297 9,877 -13,191 -57.2% -8,421 -46.0% Loans and advances measured at AC 111,393 109,568 108,140 -3,253 -2.9% -1,428 -1.3% - Loans and advances to banks 3,643 4,14
Slide 28: Total Direct Funding from the Banking business
Total Direct Funding from the Banking business Total Direct Funding1 € bn 126.0 129.1 Capital-protected Certificates & 124.8 other Debt Securities at FV REPOs & Other Bonds 101.3 98.8 99.7 C/A, Sight & Time deposits (81.2%) (78.4%) (77.2%) (% Share on total) 31/03/2023 31/12/2023 31/03/2024 31/03/23
Slide 29: Solid and well diversified liability profile, driven by successful issuance activity
Solid and well diversified liability profile, driven by successful issuance activity Bonds, Certificates & Other Debt Securities at FV MREL requirement & buffer outstanding as at 31/03/2024 as at 31/03/2024 Nominal amounts MREL as % of RWA, including Combined Buffer 12.0% Senior Preferred Requiremen
Slide 30: Bond maturities: limited and manageable amounts
Bond maturities: limited and manageable amounts Wholesale bond maturities1 and calls € bn Calls 0.40 €0.90bn 0.50 Calls 0.40 €1.05bn 0.65 2.00 0.75 Maturities €3.25bn 0.50 Maturities Calls 0.08 €2.40bn 0.75 €0.43bn 0.35 Maturities 1.15 0.50 €0.5bn 0.50 Apr.-Dec. 2024 FY 2025 FY 2026 Senior Pref. Sen
Slide 31: Indirect customer funding up at €110.3bn
Indirect customer funding up at €110.3bn: +15.4% Y/Y and +3.9% YTD Assets under Management (AuM)1 Assets under Custody (AuC)2 € bn € bn +5.9% +31.5% +2.6% +5.7% 60.1 62.0 63.6 4.6 44.2 46.7 4.0 4.4 15.5 15.7 15.9 35.5 40.6 41.9 43.1 31/03/2023 31/12/2023 31/03/2024 31/03/2023 31/12/2023 31/03/2024 F
Slide 32: Net Customer Loans at Amortized Cost
Net Customer Loans at Amortized Cost1 Net Customer Loans € bn Change -2.6% Net Performing Customer Loans 31/03/23 31/12/23 31/03/24 In % Y/Y In % YTD Core customer loans 102.3 96.9 96.5 -5.6% -0.4% -0.5% - Medium/Long-Term loans 80.1 77.1 76.9 -3.9% -0.2% 107.8 - Current Accounts 8.4 7.5 7.2 -14.5%
Slide 33: Analysis of Commercial Real Estate exposure
Analysis of Commercial Real Estate exposure Highly secured, concentrated in low-mid risk rating classes and in the North of Italy GBV, in € bn Performing In % on total SAFE RISK PROFILE: Exposure Perf. loans • 89% Secured (€6.7bn) Construction of buildings1 3.0 3% • 73% in Low-Mid Risk rating classe
Slide 34: Asset Quality details
Asset Quality details Loans to Customers at AC1 Gross exposures 31/03/2023 31/12/2023 31/03/2024 Chg. Y/Y Chg. YTD € m and % Value % Value % Bad Loans 2,094 1,601 1,547 -547 -26.1% -55 -3.4% UTP 2,522 2,056 1,931 -592 -23.5% -125 -6.1% Past Due 64 93 90 26 40.6% -3 -3.2% NPE 4,680 3,751 3,568 -1,113
Slide 35: NPE migration dynamics
NPE migration dynamics €m Inflows from 286 231 260 202 212 Performing to NPEs (Default rate) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 €m Outflows from NPEs 42 38 22 37 24 to Perf. Loans Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 €m Flows from UTP to 102 84 79 Bad Loans 46 38 (Danger rate) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Loan
Slide 36: Focus on Govies portfolio of the Banking Business
Focus on Govies portfolio of the Banking Business Italian Govies at AC Italian Govies at FVOCI Italian Govies at FVTPL € bn € bn € bn +15.7% -36.7% +371.8% +23.2% -31.5% 9.3 8.7 10.8 +50.5% 2.3 2.1 1.4 0.1 0.2 0.04 31/03/23 31/12/23 31/03/24 31/03/23 31/12/23 31/03/24 31/03/23 31/12/23 31/03/24 Non-
Slide 37: Capital position in detail
Capital position in detail FULLY LOADED CAPITAL FULLY LOADED RWA 31/03/2023 31/12/2023 31/03/2024 31/03/2023 31/12/2023 31/03/2024 POSITION (€ m and %) COM POSITION (€ bn) CET 1 Capital 8,076 9,036 9,238 CREDIT & COUNTERPARTY RISK 50.6 54.2 53.4 T1 Capital 9,466 10,425 10,627 of which: AIRB 23.2 20.
Slide 38: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Banco BPM Registered Offices: Piazza Meda 4, I-20121 Milano, Italy Tom Lucassen +39 045 867.5537 Corporate Offices: Piazza Nogara 2, I-37121 Verona, Italy Arne Riscassi +39 02 9477.2091 Silvia Leoni +39 045 867.5613 investor.relations@bancobpm.it Carmine
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