BAWAG Group AG · VIE:BG
BAWAG — Q1 2021 Earnings Presentation
31 slides from BAWAG's earnings presentation, Apr 26, 2021
Slide 1: Q1 2021 Earnings
Q1 2021 Earnings Anas Abuzaakouk, CEO Enver Sirucic, CFO 26 April 2021 26 April 2021 | BAWAG Group AG 1
Slide 2: Q1 2021 Highlights and segment performance
Q1 2021 Highlights and segment performance Detailed financials Supplemental information Group Overview & Strategy 26 April 2021 | BAWAG Group AG 2
Slide 3: Highlights Q1 2021
Highlights Q1 2021 • Net Profit of €74m in Q1 ’21, EPS of €0.83, and RoTCE of 10.2% (normalized: 14.3%) EARNINGS • Pre-provision profit of €179m and CIR at 40.5% • Risk cost of €29m … no ECL reserves released • Regulatory charges of €54m representing 90% of full year charge • Customer loans +3% and
Slide 4: Financial performance
Financial performance Key highlights P&L | € millions Q1 ‘21 Q1 ‘20 vPY Q4 ‘20 vPQ Balance Sheet & Capital | € millions Q1 ‘21 Q4 ‘20 vPQ Core revenues 297 292 2% 298 - Total assets 52,975 53,128 - Operating income 301 296 2% 302 - Interest-bearing assets 41,260 40,410 2% Operating expenses (122) (1
Slide 5: Capital development … CET1 ratio (FL)
Capital development … CET1 ratio (FL) Strong capital position Capital distribution plans ✓ €40m dividend paid in Q1 ’21 in line with ECB ~+40bps recommendation (Q1 ’21 gross capital generation) a €37m dividends accrued based on dividend → 16.5% policy for Q1 ’21 earnings b €420m dividends (€4.72 per
Slide 6: Retail & SME
Retail & SME Financial performance Customer development € millions Q1 ‘21 Q1 ‘20 vPY Q4 ‘20 vPQ € millions Q1 ‘21 Q1 ‘20 vPY Q4 ‘20 vPQ Core revenues 222.8 229.9 (3%) 219.4 2% Housing loans 14,861 13,266 12% 14,331 4% Net interest income 163.1 168.1 (3%) 164.4 (1%) Consumer and SME 4,994 5,042 (1%)
Slide 7: Corporates & Public
Corporates & Public Financial performance Customer development € millions Q1 ‘21 Q1 ‘20 vPY Q4 ‘20 vPQ € millions Q1 ‘21 Q1 ‘20 vPY Q4 ‘20 vPQ Core revenues 69.7 69.1 1% 69.0 1% Corporate lending 4,227 4,858 (13%) 4,060 4% Net interest income 61.0 58.4 4% 59.0 3% Asset backed lending 4,955 4,921 1%
Slide 8: Detailed financials
Q1 2021 Highlights and segment performance Detailed financials Supplemental information Group Overview & Strategy 26 April 2021 | BAWAG Group AG 8
Slide 9: P&L & key ratios
P&L & key ratios P&L | € millions Q1 ‘21 Q1 ‘20 vPY vPQ Key ratios Q1 ‘21 Q1 ‘20 vPY vPQ Net interest income 229.6 219.9 4% (2%) Return on Common Equity 8.6% 7.5% 1.1pts (1.1pts) Net commission income 67.7 71.9 (6%) 5% Return on Tangible Common Equity 10.2% 9.1% 1.1pts (1.3pts) Core revenues 297.3 2
Slide 10: Balance sheet
Balance sheet Growing overall balance sheet thru increased interest-bearing assets Balance sheet | € millions Q1 ‘21 Q4 ‘20 vPQ Capital & RWA | € millions Q1 ‘21 Q4 ‘20 vPQ Customer loans 33,015 32,004 3% Common equity 3,439 3,423 - Securities and bonds 6,775 7,531 (10%) Tangible common equity 2,899
Slide 11: P&L details – core revenues
P&L details – core revenues Solid core revenues in Q1 ‘21 … NCI continues recovery € millions Net interest income (NII) down (2%) vPQ … net interest margin (NIM) at 2.28% in Q1 ‘21 ‒ Decrease in Q1 ‘21 mainly related to day count 291.8 297.6 298.1 297.3 ‒ Stable NIM at 2.28% with positive underlying
Slide 12: P&L details – operating expenses
P&L details – operating expenses Costs targets on track € millions Core operating expenses CIR at 40.5% in Q1 ’21 down (1.8pts) vPY Restructuring charges On track to meet full-year targets … gradual decrease 144.7 over the coming quarters resulting from efficiency measures 125.0 124.7 125.3 ~22 121.
Slide 13: P&L details – risk costs
P&L details – risk costs Strong underlying asset quality € millions Risk costs / average interest-bearing assets General reserve including macro-forecast, ECL and overlays Risk costs / average interest-bearing assets (w/o general reserve) Q1 ‘21 risk costs €29m … risk cost ratio at 29bps ‒ Normal ri
Slide 14: Details on reserves
Details on reserves Continuing to remain prudent despite improved economic forecast IFRS 9 Migration- Customer Segment Assets Non-performing stage 3 loans, in €m 885 883 Stage 3 2% 2% 2% 2% 811 836 Stage 2 4% 8% 7% 254 10% 254 254 254 City of Linz (CoL) Stage 1 94% 90% 91% 631 629 88% 557 582 Custom
Slide 15: 2021 Outlook
2021 Outlook OUTLOOK 2021 TARGETS Core revenues FY ’20: €1,171m ~2% growth Annual General RoTCE CIR Meeting Other income €0m expected 2021 >13% <41% Q4 ‘21 FY ’20: €1m Operating expenses: Below €485m FY ’20: €520m RoTCE CIR MID-TERM Based on normalized environment >15% <40% Capital Regulatory charge
Slide 16: Supplemental information
Q1 2021 Highlights and segment performance Detailed financials Supplemental information Group Overview & Strategy 26 April 2021 | BAWAG Group AG 16
Slide 17: Customer businesses €34.1 billion
Customer businesses €34.1 billion As of March 2021 RETAIL & SME CORPORATES & PUBLIC CUSTOMER BUSINESSES By product 25% €34.1 billion of which … 30% 35% 79% €19.9b €14.2b in % in % 75% 35% Secured or public sector lending Housing loans Consumer & SME Corporate lending Asset backed lending Public clie
Slide 18: Retail & SME
Retail & SME Portfolio overview of €19.9b of customer loans and leases Payment deferral overview NPL ratio Reserve development Reserve ratio Payment holiday Assets paying ratio Q1 '21 (expired Q4 '19 Q4 '20 Q1 '21 Q4 '19 Q4 '20 Q1 '21 Q4 '19 Q4 '20 Q1 '21 31.12.2020 31.03.2021 (€b) deferrals) Housin
Slide 19: Corporates & Public
Corporates & Public Portfolio overview of €14.2 billion of customer loans … whereof €5.0b in public sector Payment deferral overview NPL ratio Reserve development Reserve ratio Payment holiday Assets paying ratio Q1 '21 (expired Q4 '19 Q4 '20 Q1 '21 Q4 '19 Q4 '20 Q1 '21 Q4 '19 Q4 '20 Q1 '21 31.12.20
Slide 20: Investment book and Cash
Investment book and Cash Q4 ‘20 Q1 ‘21 Cash & Cash equivalent As of Q1 ‘21, cash and cash equivalents (mainly money 9% 10% at central banks) at €11.1b ... TLTRO III of €6.4b €10.9b in % +€ 0.2b €11.1b in % Investment book primarily serves as liquidity book of the Bank 91% 90% Focus on low credit ris
Slide 21: Regulatory Capital
Regulatory Capital Strong capital position € billions Capital distribution plans: CET1 Capital and ratios ✓ €40m dividend paid in Q1 ’21 in line with ECB dividend recommendation CET1 capital (post dividend) ‒ €37m dividends accrued based on dividend policy CET1 ratio (post dividend) for Q1 ’21 earni
Slide 22: Capital distribution update
Capital distribution update Consistent average annual capital generation through +220bps earnings +220bps since 2017 ~425 bps = €839m Total Excess capital 16.5% “Earmarked dividends” 1 Dividends of €457m deducted from CET1 capital … pre-dividend €3.30b 1 ~235 bps = €457m – €420m dividends relating t
Slide 23: Group Overview & Strategy
Q1 2021 Highlights and segment performance Detailed financials Supplemental information Group Overview & Strategy 26 April 2021 | BAWAG Group AG 23
Slide 24: BAWAG Group
BAWAG Group COMPANY PROFILE CAPITAL MANAGEMENT TARGETS Focused on organic One of Austria‘s leading banking groups with and inorganic growth 2.3 million customers across DACH/NL region RoTCE CIR 2021 >13% <41% 2020 results: €284m net profit, 10.2% RoTCE, CIR 44.3% and CET1 ratio (post dividend) 14.0%
Slide 25: Strategy pillars of our growth strategy
Strategy 4 pillars of our growth strategy Drive efficiency through Maintaining a safe and Growing in our core markets Focus on Customer Centricity operational excellence secure risk profile ‒ Our foundation is Austria with focus on ‒ Build multi-channel and multi-brand ‒ Our DNA is to focus on the t
Slide 26: ESG embedded into our strategic roadmap
ESG embedded into our strategic roadmap Committed to responsible, sustainable and profitable growth ENVIRONMENT SOCIAL GOVERNANCE ‒ Reduce own Scope 1 and Scope 2 CO2 emissions ‒ Empower our clients by continuously enhancing ‒ Executive body of ESG-topics is the Non-Financial mid-term our services a
Slide 27: Bank transformation
Bank transformation Focusing on things we control and driving operational excellence KEY METRICS Increased profitability … Private company Public company Pre-tax profit (€ millions) 2013 2014 2015 2016 2017 2018 2019 2020 573 604 500 419 445 RoTCE 11% 15% 17% 18% 15% 15% 16% 10% 370 316 191 C/I rati
Slide 28: Proven M&A track record
Proven M&A track record Experienced with bolt-on acquisitions to build out customer franchise Key M&A targets 2021 DEPFA Bank plc Signed deal to acquire DEPFA Bank plc, closing expected in 2H’21 ‒ Continued focus on companies within the 2019 3) DACH/NL region and developed markets €0.1b assets, 3k c
Slide 29: Investor relations calendar
Investor relations calendar UPCOMING ROADSHOWS AND CONFERENCES SHAREHOLDER STRUCTURE 26 April Digital one-on-one and Group Meetings after Q1 results Managing Board 2.4 05 May Goldman Sachs small/mid-cap conference 78.2% Free Float GoldenTree 12 May KBW European Financials Conference 21.8 12 May UBS
Slide 30: Important Disclaimer
IMPORTANT DISCLAIMER: This presentation is prepared solely for the purpose of providing general information about BAWAG Group, Wiedner Gürtel 11, 1100 Wien. The information does not constitute investment or other advice or any solicitation to participate in investment business. This presentation doe
Slide 31: Annex – Definitions and abbreviations
Annex – Definitions and abbreviations After-tax earnings per share (EPS) Pre-tax earnings per share Net profit / weighted average number of shares outstanding (diluted) Profit before tax / weighted average number of shares outstanding (diluted) B/S leverage Reserve ratio Total assets / IFRS equity T