Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — Investor Presentation (November 2016)
92 slides from Mediobanca - Banca Di Credito Finanziario's investor presentation, Nov 16, 2016
Slide 1: Mediobanca a long-term value player
Mediobanca a long-term value player Strategic update 2016/19 16 November 2016
Slide 2: Agenda
Agenda 1. Leveraging on our strengths 2. Strategic ambitions 3. Divisional action plan 4. Group targets Annexes
Slide 3: Leveraging on our strengths
Leveraging on our strengths Leveraging on our strengths Section 1 Mediobanca has emerged stronger after the crisis in terms of resiliency, reputation and solidity outperforming many EU banks by profitability and market performance due to our SPECIFIC STRENGTHS 1 3 Distinctive DNA and culture Ability
Slide 4: Distinctive DNA and culture
1 Distinctive DNA and culture Leveraging on our strengths Section 1 We are a business built on people, using a client-centred approach to build trust WHAT MAKE US DIFFERENT Specialization and Innovation Strong Reputation Reference IB for Italian corporates built in 70 years of ethical business appro
Slide 5: Sound business positioning
2 Sound business positioning Leveraging on our strengths Section 1 CORPORATE & INVESTING BANKING CONSUMER BANKING “Mediobanca: the leading Italian investment bank, “Compass: top Italian consumer credit operator” established role in Southern EU” Client driven, highly specialized business Distribution
Slide 6: Ability to adapt business model
3 Ability to adapt business model Leveraging on our strengths Section 1 In 2003 we embarked on a period of profound change, transforming Mediobanca from an equity holding company to a group of highly specialized banking businesses We focused on a business model that offers greater returns for a lowe
Slide 7: Banking revenues doubled and diversified with effective corporate/retail mix
Banking revenues doubled and diversified with effective corporate/retail mix Leveraging on our strengths Section 1 Group revenues by product and division (€m, %) 2,050 260 1,630 130 Fees Corporate Retail 65% 190 35% €0.5bn 450 1,160 410 290 1,210 150 1,030 240 Retail Corporate 480 78% NII 22% €1.2bn
Slide 8: Loans and funds doubled and also reshaped
Loans and funds doubled and also reshaped Leveraging on our strengths Section 1 2005 2016 LOAN BOOK Corporate Retail contribution Corporate 78% €18bn €35bn 51% from 22% to 49% FUNDING Institutional Institutional Retail contribution €46bn 45% €25bn 57% from 43% to 55% Loans: Retail includes mortgages
Slide 9: Last 3Y business plan: Simplify, exit equity
Last 3Y business plan Simplify, exit equity Leveraging on our strengths Section 1 Our 2014-2016 business plan gave further impetus to the disposal of equity investments and the development of banking activities OBJECTIVES Create a Focus on three specialized, Deliver simpler, more valuable, growing a
Slide 10: Ability to grow and be profitable while reshaping
4 Ability to grow and be profitable Leveraging on our strengths while reshaping Section 1 In last 3Y €1.5bn disposals, with €0.5bn capital gains Reduce equity exposure Remove low earnings visibility linked to AFS equity valuation AG 3pp sale commenced then postponed, for market reasons GOP risk
Slide 11: Generate growth by leveraging on strong KPIs
generate growth by leveraging on strong KPIs Leveraging on our strengths Section 1 Growing banking revenues Growing net profit Growing profitability € bn 43% C/I ratio 44% €m ROTE 605 7% 1.8 465 6% 1.6 June14 June16 June14 June 16 June14 June16 Superior asset quality Superior asset quality Strong ca
Slide 12: MB outperformed most EU banks by profitability
MB outperformed most EU banks by profitability… Leveraging on our strengths Section 1 Italy France Spain 13 13 13 12 12 12 11 ROE % 11 11 1010 10 10 10 10 9 9 9 8 8 8 7 7 7 6 6 6 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1 - 0 0 -1 -1 Mediobanca ISP UCG PMI UBI BP MPS BPE Bankinter Bankia Caixa Sabadell Natixis G
Slide 13: Mediobanca market performance vs ITA and EU banks
2 3 4 5 6 7 8 9 10 11 13 Jul-13 Last 3Y Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Leveraging on our strengths Feb-14 Mar-14 MB 67.3% Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mediobanca market performance vs ITA and EU banks Mar-15 Apr-15 EU Banks 5.2% May-15 Jun-1
Slide 14: Without capital increases and while distributing dividends
…without capital increases and while distributing Leveraging on our strengths dividends Section 1 Right issues/cap. increases by banks (€bn) Banking industry staff trends (/000) Italian listed banks 48 2008 2014 Chg.% MB last capital Mediobanca 3 4 +17% increase in 1998 Italy- large banks 272 216 -2
Slide 15: Agenda
Agenda 1. Leveraging on our strengths 2. Strategic ambitions 3. Divisional action plan 4. Group targets Annexes
Slide 16: Current environment requires new competitive skills
Current environment requires new competitive skills... Strategic ambitions Section 2 NEW competitive SKILLS for being SUCCESSFUL in BANKING MACRO: adverse Strong positioning in core businesses/countries Low GDP growth High cost efficiency Low interest rates Strong risk selection capability TECHNOLOG
Slide 17: …and creates substantial opportunities for MB
…and creates substantial opportunities for MB Strategic ambitions Section 2 Corporate & Investment Banking Consumer Lending Wealth Management Specialty Finance Sector concentration and Market to expand, driven by Polarization of wealth, in part restructuring changing customer behaviour due to demogr
Slide 18: NEXT 3Y Mission: Position MB as a Long-Term Value Player
NEXT 3Y Mission Position MB as a Long-Term Value Player Strategic ambitions Section 2 Our 2017-19 business plan aims to enhance the MB Group business model, reshaping it with a view to definitively upgrading MB to become a LONG-TERM VALUE PLAYER OBJECTIVES Grow revenues, Materially improve Confirm b
Slide 19: New BU segmentation consistent with change in strategic priorities
new BU segmentation consistent with change in strategic priorities Mediobanca Group Holding Functions Group ALM & Treasury Corporate & Investment Consumer Banking Wealth Management Principal Investing Banking (CIB) (CB) (WM) (PI) Corporate & Investment Consumer Banking Affluent & Premier Principal I
Slide 20: Visible, valuable, diversified BUs
Visible, valuable, diversified BUs WM sizeable and scalable Mediobanca Group Corporate & Investment Consumer Banking Wealth Management Principal Investing Banking (CIB) (CB) (WM) (PI) Revenues 625m 28% Revenues 870m 39% Revenues 475m 21% Revenues 280m 12% GOP 350m 47% GOP 245m 33% GOP 50m 7% GOP 280
Slide 21: Playing our next 3Y priorities…
Playing our next 3Y priorities… Strategic ambitions Section 2 1 CIB: enhance client coverage in specific industries, sectors, Leveraging on strengths customers segments and opportunities SF: exploit opportunities in factoring and credit management in CIB and Consumer Consumer: enduring growth with a
Slide 22: …will make us stronger in income generation & diversification
…will make us stronger in income generation & diversification… Strategic ambitions Section 2 Growing revenues Growing fees contribution Growing GOP1, more diversified FY16: FY16: FY16 €2bn €0,5bn Consumer Consumer 30% 33% NII 59% Fees WM 22% WM PI €0.7bn 7% 21% 38% CIB Trading 49% Corporate2 & PI 19
Slide 23: …stronger in profitability and solidity
…stronger in profitability and solidity Strategic ambitions Section 2 ROAC1 FY16 FY19 target GROUP ROTE 7% 10% BANKING ROAC2 5% 12% CIB 9% 13% Consumer Lending 16% 20% Wealth Management 8% 20% Principal Investing3 17% 12% Holding Functions neg neg RATIOS FY16 FY19 target CET1 12% 12% + 2% Total Capi
Slide 24: …stronger in capital generation & allocation
…stronger in capital generation & allocation Strategic ambitions Section 2 Tangible Book value allocation¹ (€bn) €9bn Up to 200bps €8bn for M&A or distribution 0.8 1.3 CET1 = 12% 2.1 Capital exceeding regulatory requirement 2.6 Principal Inv. (Equity stakes) 1.9 (SREP 2015 = 8.75%) Corporate 2.9 (CI
Slide 25: Agenda
Agenda 1. Leveraging on our strengths 2. Strategic ambitions 3. Divisional action plan 3A. Corporate & Investment Banking 3B. Consumer Banking 3C. Wealth Management 3D. Principal Investing 3E. Holding Functions 4. Group Targets
Slide 26: Corporate & Investment Banking
Corporate & Investment Corporate & Banking (CIB) Investment Banking Corporate & Investment Section 3B Banking Specialty Finance 26
Slide 27: CIB client-driven, profitable, specialized business
CIB client-driven, profitable, specialized business Divisional action plan. CIB Section 3A For over 70 years MB has helped its clients to grow, with high-quality advisory services and credit solutions Today, we are the leading IB in Italy and have an expanding presence in Europe and beyond In recent
Slide 28: Next 3Y in CIB: Increase further profitability
Next 3Y in CIB Increase further profitability Divisional action plan. CIB Section 3A Our 2017-2019 business plan aims to increase CIB profitability further OBJECTIVES Strengthen MB positioning Exploit Reduce in Italy and EU new market opportunities RWA density ACTIONS 1 2 3 Empowered client coverage
Slide 29: Strengthen MB positioning in Italy and EU
Strengthen MB positioning in Italy and EU Divisional action plan. CIB Section 3A MB aims to become a leading investment bank in Italy and in selected European countries, providing high quality advisory services, capital raising and financing solutions to support our clients in their domestic and cro
Slide 30: Improve profitability: Capital-light Products
1 2 Improve profitability Capital-light Products Divisional action plan. CIB Section 3A CF, ECM, DCM, Eq. Sales New management responsibilities in place (Country and Product Heads), streamlined organization across the company Italy Focus on client coverage to increase wallet share/productivity and e
Slide 31: Improve profitability: Capital-Intensive Products
1 2 Improve profitability Capital-Intensive Products Divisional action plan. CIB Section 3A Lending and Structure Finance (LSF), Capital Market Solutions (CMS) Management actions Regulatory-driven actions Maintain asset quality and increase ROAC Re-focusing RWA use New products development (CMS) Tow
Slide 32: Leading IB for MidCaps
1 3 Leading IB for MidCaps combining Corporate Finance & Personal wealth solutions Divisional action plan. CIB Section 3A FAMILY OFFICE CORPORATE & INVESTMENT BANKING (Spafid) Lending, CMS, Corporate Finance, Capital Markets PRIVATE BANKING Banca Esperia, CMB MidCap SPECIALTY FINANCE Factoring, Cred
Slide 33: Factoring: keep on growing exploiting market opportunities
Factoring Keep on growing exploiting market opportunities Divisional action plan. CIB Section 3A Factoring: a growing and … with opportunities for growth: Launched two years ago, developed internally and concentrated market… 1.2 MB Facta mkt share trend 5 growing fast 13 1 Mkt. 10 1.2% Loan book: ap
Slide 34: Exploit sizeable Italian NPL market: MB positioning
3 Exploit sizeable Italian NPL market: MB positioning Divisional action plan. CIB Section 3A NPLs: the new Italian paradigm¹ … and opportunities for Mediobanca Existing stocks (€bn) 21% Banks Compass 141 (sell side) 53% 47% 200 79% 42 42 Structuring Mediobanca 2008 2015 (advisory, financing, distrib
Slide 35: Credit/NPLs Management: time to leverage longstanding skills
Credit/NPLs Management time to leverage longstanding skills Divisional action plan. CIB Section 3A CREDITECH TODAY Longstanding but still small business both captive (Compass) and on open market Three areas of operations: credit management, NPLs purchase, NPLs servicing Current focus: retail unsecur
Slide 36: 3Y CIB Targets: Focus on ROAC and K allocation
3Y CIB Targets Focus on ROAC and K allocation Divisional action plan. CIB Section 3A ROAC PROJECTED GROWTH for: Capital-light products CF: new fully integrated organization between >200% industry teams and countries; specific focus on Italian mid-corporate Specialty CMS: new products 20 Finance deve
Slide 37: CIB final takeaways: Further boost profitability
CIB final takeways Further boost profitability Divisional action plan. CIB Section 3A CIB TODAY CIB 2019 STRATEGIC GOALS Client-driven, highly specialized, niche business Stronger positioning in core markets, primarily Italy, in IB services Leading Italian IB, established role in EU Become the leadi
Slide 38: Consumer Banking
Consumer Banking Consumer Banking (CB) Section 3B Consumer Banking Compass 38
Slide 39: COMPASS a pioneer, innovative, profitable operator
COMPASS a pioneer, innovative, profitable operator… Divisional action plan. Consumer Banking Section 3B Compass Banca has been a pioneering force in consumer credit in Italy since 1951 Today it is among the top three operators in Italy, in a profitable and high entry barrier industry In recent years
Slide 40: …steadily delivering amazing growth
…steadily delivering amazing growth Divisional action plan. Consumer Banking Section 3B Compass: NII growth (€m) Compass: GOP risk adj² (€m) Compass: net profit (€m), ROAC +12% 747 +10% 668 609 200 16% 18.0% ROAC 16.0% +59% 245 150 14.0% 154 12.0% +54% 8% 10.0% 154 100 8.0% 100 82 6.0% 50 4.0% 51 2.
Slide 41: Next 3Y in Compass: Keep Growing
Next 3Y in Compass Keep Growing Divisional action plan. Consumer Banking Section 3B In next three year Compass aims to keep revenues and profitability steadily growing leveraging on its proven strong capabilities OBJECTIVES CONSOLIDATE EXPLOIT IMPROVE POSITIONING NEW OPPORTUNITIES PROFITABILITY ACTI
Slide 42: Consolidate positioning increasing direct distribution
1 Consolidate positioning increasing direct distribution Divisional action plan. Consumer Banking Section 3B PROPRIETARY - DIRECT DISTRIBUTION INDIRECT DISTRIBUTION OBJECTIVES OBJECTIVES Enlarge direct distribution… ring-fencing …in an innovative way… preserving loyalty …at variable costs… Compass C
Slide 43: Exploit new opportunities
2 Exploit new opportunities Divisional action plan. Consumer Banking Section 3B INNOVATION New Products New tools New products to: Continuous enhancement of risk assessment process: leverage direct channels new generation of credit increase customer Personal loans scoring model to maximize experienc
Slide 44: Improve profitability
3 Improve profitability Divisional action plan. Consumer Banking Section 3B VALUE MANAGEMENT New loans by product (€bn, %) New personal loans by channel (€bn) ROAC and CoR (€bn, %) 6.2 6.6 3.2 3.3 3.3% 25% 3.5% 2.7% 3.0% 20% 20% 2.5% 15% 2.0% 16% 10% 1.5% 55% 1.0% 23% 24% 36% 47% 5% 32% 0.5% 9% 12%
Slide 45: Consumer Banking Final takeaways: Keep growing
Consumer Banking Final takeways Keep growing Divisional action plan. Consumer Banking Section 3B COMPASS TODAY COMPASS 2019 STRATEGIC GOALS Top Italian consumer credit operator Keep revenues and profitability growing, leveraging primarily on excellent pricing Client-driven, highly specialized busine
Slide 46: Wealth Management
Wealth Management Wealth Management (WM) Section 3C Affluent & Premier Private & HNWI Mediobanca AM 46
Slide 47: Next 3Y in WM: Become a sizeable WM player
Next 3Y in WM Become a sizeable WM player Divisional actions plan. WM Section 3C In next three years Mediobanca aims to prioritize the development of a sizeable WM platform leveraging on the existing and new customer base (affluent, premier, private and HNWI), selecting qualitative presence in the A
Slide 48: CheBanca!
Wealth Management CheBanca! (WM) Section 3C Affluent & Premier CheBanca! Private & HNWI Mediobanca AM 48
Slide 49: CheBanca! change in mission since start-up phase
CheBanca! change in mission since start-up phase Divisional action plan. CheBanca! (WM) Section 3C INNOVATIVE AND FUNDING ARM PROFITABILITY Set up CUSTOMER FRIENDLY (May 08) Unprofitable but strategic Introduced new way of Retail funding arm for MB doing banking in Italy, group (€12bn deposits for t
Slide 50: Multiple needs – multiple channels: The Human digital bank
DEI DUE MO Multiple Needs – multiple channels CheBanca! response: «The Human digital bank» Divisional action plan. CheBanca! (WM) Section 3C CheBanca! clients already looking increasingly for … and in the near future a higher % of advice “multichannel journey” … seekers will shift towards digital-ba
Slide 51: Next 3Y in CheBanca!: exploiting option value
Next 3Y in CheBanca! exploiting option value Divisional action plan. CheBanca! (WM) Section 3C In next 3Y CheBanca! aims to fully exploit its OPTION VALUE, significant earnings growth (g) associated with low volatility, embedded in the innovative, digitally enabled, distribution platform. The questi
Slide 52: Build wealth sales force to serve large customer base better
Build wealth sales force, in order to serve large customer 1 3 base better. Proprietary and… Divisional action plan. CheBanca! (WM) Section 3C CB! Customer segmentation Clients TFA New proprietary Actions 800K €21bn sales force Targets Intensive “wealth WEALTH management” >500k€ -80 7k 5bn training
Slide 53: FAs network: visible in size, innovative in clients relation
1 3 …FAs network: visible in size, innovative in clients relation Divisional action plan. CheBanca! (WM) Section 3C CheBanca! Financial Advisors network set up, trend and positioning AUM/AUA per FAs (€m) TFA €0.3bn €2.0bn Banca Generali 25 600 Allianz 20 Fineco 320 Azimut 15 Fideuram 250 Mediolanum
Slide 54: Integrating Barclays: reaping the benefits of the transaction
2 3 Integrating barclays reaping the benefits of the transaction Divisional action plan. CheBanca! (WM) Section 3C Aug 16, Deal closed CheBanca! received June17 June18 June19 €240m from Barclays (“badwill”) Since closing Network optimization CheBanca! has had Network 143 branches – 1.5K - Resolve br
Slide 55: Private Banking
Wealth Management Private Banking (WM) Section 3C Affluent & Premiere Private & HNWI Banca Esperia Spafid CMB Mediobanca AM 55
Slide 56: Next 3Y in Private Banking: a definitively different offering
next 3Y in Private Banking a definitively different offering Divisional action plan. Private (WM) Section 3C In the next three years we want substantially reshape our presence in Italian Private Banking. Now that the governance issues in Banca Esperia have been resolved, the bank will be rebranded a
Slide 57: Italian private banking market
Italian private banking market Divisional action plan. Private (WM) Section 3C Private wealth: +3% (6Y CAGR) with Only 40% of Private wealth is under GROWING: in last 5Y Private Banking stable GDP (nominal value: +0.3%) advisory/management mandate has grown 3 times faster than total +1% 3,972 family
Slide 58: PB & IB - strong fit
PB & IB - strong fit Divisional action plan. Private (WM) Section 3C Positioning Products Customers Most of the banks specialized in Wealth management services to be Banca Esperia client asset wealth management to high-end integrated in the offering to composition and client distribution customers a
Slide 59: Banca Esperia – now fully controlled: integrate, rebrand, launch new offering
Banca Esperia – now fully (100%) controlled Integrate, rebrand, launch new offering Divisional action plan. Private (WM) Section 3C Fully exploit strengths and potential Deliver synergies within MB Group Privileged 70% of AUM (or €12bn) by Private clients, of which STRONG SYNERGIES positioning in Ul
Slide 60: SPAFID: A bridge between Private & Corporate
SPAFID A bridge between Private & Corporate Divisional action plan. Private (WM) Section 3C Unique integrated administration platform serving: Fiduciary Corporate affairs Services services Private: from fiduciary services to multi-family office Wealth Corporate Corporate: from shareholders & bondhol
Slide 61: Compagnie Monegasque de Banque: feed consistent and profitable business
Compagnie Monegasque de Banque Feed consistent and profitable business Divisional action plan. Private (WM) Section 3C Increasing attractiveness of Monaco Longstanding presence in Monaco. Top 5 (expected to exit blacklisted countries) ranking MARKET Relevant players (i.e. Credit Suisse, HSBC) Divers
Slide 62: Mediobanca Asset Management
Wealth Management Mediobanca (WM) Affluent & Premier Asset Management Private & HNWI Section 3C Mediobanca AM Cairn Capital DueEmme SGR CMG 62
Slide 63: Next 3Y in Mediobanca AM
Next 3Y in Mediobanca AM Set up an efficient and specialized group AM factory Divisional action plan. MB AM (WM) Section 3C In next three years we want to develop Mediobanca’s Asset Management factory focusing on specialized capabilities and able to serve customers and increase AUM and WM profitabil
Slide 64: Mediobanca Asset Management
Mediobanca Asset management Divisional action plan. MB AM (WM) Section 3C MEDIOBANCA AM Support functions Coverage/Distribution HR, Legal, Compliance,… Dedicated sales force Cairn Capital Duemme SGR CMG + (formerly Banca Esperia) (formerly CMB) Alternative credit products, Fixed-income & equity Fund
Slide 65: Cairn Capital - Alternative AM: continue building
Cairn Capital - Alternative AM continue building Divisional action plan. MB AM (WM) Section 3C Today AM market has …€7tn of which (9%) Set up in 2004, asset specialist (credit) based in reached ≈€80tn… focused on alternative London, 60 employees assets Cairn Capital Assets: €2.1bn of AUM (Funds and
Slide 66: Wealth management final takeaways
Wealth management final takeways Become a sizeable player – exploit the option value Divisional action plan. WM Section 3C WM TODAY WM 2019 STRATEGIC GOALS CheBanca! Strong positioning in the Affluent- Leverage on existing and new customer base, Premier segment, at forefront of digital frontier extr
Slide 67: Strong trend in assets, set to double again in next 3Y
Strong trend in assets like in last 3Y, set to double again in next 3Y MB Group AUM/AUA trend (€bn) +2x +50% 21 59 Consolidating 2016 acquisitions 16 47 +2x 38 5 27.9 7.5 Cairn 8.1 2.9 6 8.1 8.1 13.7 Esperia 15.0 7.5 Esperia 6.5 CMB 5.3 5.3 CheBanca! 12 CMB 5.2 3.9 6.8 FY13 Internal Cairn FY16 Barcl
Slide 68: Principal Investing
Principal Investing (PI) Principal Investing Section 3D Principal Investing Ass. Generali AFS stake ptf 68
Slide 69: Next 3Y in Principal Investing: Keep deleveraging
Next 3Y in Principal investing Keep deleveraging Divisional action plan. PI Section 3D In next three years we want to reduce further capital allocated to the Principal Investing division reallocating redeployed capital into banking and being efficient in terms of regulation Targeting double-digit RO
Slide 70: Holding Functions
Holding Functions Holding Functions Section 3E Group ALM & Treasury Leasing 70
Slide 71: Next 3Y in Holding Functions: Keep Optimizing
Next 3Y in Holding Functions Keep Optimizing Divisional action plan. HF Section 3E In next 3y we want to reduce capital allocated to Holding Function and definitely exhaust negative flows related to legacies of the crisis and increased regulation OBJECTIVES Leasing Treasury / ALM Continuing ordered
Slide 72: Agenda
Agenda 1. Leveraging on our strengths 2. Strategic ambitions 3. Divisional action plan 4. Group targets Annexes
Slide 73: Playing several new projects in key areas
Playing several new projects in 3 key areas… June16 June 17 June 18 June 19 CheBanca! A M 1. BARCLAYS integration Network, IT, customer integration Commercial relaunch, network restructuring (revenues and costs synergies) 2. FAs network launch Product / Platform set up Project development on sizeabl
Slide 74: …and with effective RWA management
…and with effective RWA management... Group targets Section 4 3Y MB Group RWA trend by division (€bn, 3YCAGR %) RWA @ STD RWA @ AIRB flat -4% 1.6 1.5 (4.5) 55 2.2 +8% 55 +4% (0.8) -30% +3% -7% (6) 49 Density Density 77% 64% FY16PF CIB Consumer WM PI HF FY19 AIRB FY19 STD AIRB Organic growth (in CIB,
Slide 75: …will generate material growth in GOP
…will generate material growth in GOP… Group targets Section 4 3Y MB Group GOP net of risk trend by division (€m) CAGR: +10% (55) 1,000 70 90 3pp AG disposal 80 740 80 FY16 CIB Consumer WM Holding Functions PI FY19 asset driven fee driven cost driven Execution risk mitigated by sound diversification
Slide 76: …and strong capital generation
…and strong capital generation. CET1 at high level, buffer for M&A and distribution Group targets Section 4 MB Group 2016/19 CET1 evolution (% and bps) 14% 200bps (120 bps) 12% (130bps) 250 bps 200bps 12% Banking business Capital management +120bps Regulation +80bps CET1 FY16 Retained Earnings RWA C
Slide 77: Group Targets
Group Targets Group targets Section 4 Rationale Group FY16 FY19E Boost growth (GOP 3YCAGR +10%) GOP after LLPs € 0.7bn € 1.0bn completing equity disposals Equity stake in AG 13% ≤10% preserving cost efficiency and superior asset quality CoR 115bps 105 bps Improve profitability and value Banking ROAC
Slide 78: Divisional Targets
Divisional Targets Group target Section 4 CIB CONSUMER WEALTH MANAGEMENT €bn June16 June19T 3YCAGR June16 June19T 3YCAGR June16 June19T 3YCAGR GOP¹ €m 350 430 +7% 245 330 +10% 50 140 +40% Loans 15 18 +6% 11 13 +5% 10 12 +8% RWA 27 25 -3% 11 12 +3% 6 6 - CoR 25bps 45bps +20bps 330bps 270bps -60bps 20
Slide 79: Final takeaways
Final takeaways Group targets Section 4 Mediobanca has emerged stronger after the crisis. We have outperformed many EU banks due to distinctive DNA, sound business positioning and ability to adapt the business model while growing The current tough environment requires new competitive skills but also
Slide 80: Annexes
Annexes 1. Macro assumptions 2. A&L section - Loans: growing in stock, decreasing in density - Funding 3. Restatements - MB Group 2016 pro forma - Business unit restatements
Slide 81: Macro assumptions
Macro assumptions Annex 1 Macro Scenario Market Rates EURO Baseline growth/inflation rate (%) Country 2016 2017 2018 Puntual Jun16 June17 June18 June19 Italy 1.5 1.4 1.7 Eur 1M (0,36) (0,35) (0,15) 0,22 France 1.4 1.7 1.6 Eur 3M (0,29) (0,25) (0,05) 0,25 Netherlands 2.1 2.3 1.4 Eur 6M (0,18) (0,16)
Slide 82: Loans: growing in stock, decreasing in density
Loans: growing in stock, decreasing in density Annex 2 Major trends (3YΔ in €bn, % as 3YCAGR) RWA density trend (RWA/Asset) +5% 44.6 Consumer 2.0 94% +10% 38.1 90% 34.7 2.5 79% CIB 2.5 17.9 77% 15.1 69% 15.1 Group 64% 2.6 2.0 1.1 9.5 5.0 7.5 36% Mortgages 11.0 11.0 12.6 27% June16 June16PF June19T J
Slide 83: Funding and new issues
Funding and new issues Annex 2 Funding trend (€bn) New issue and redemption volumes (€bn) 51.2 +4% 53.1 4.2 +10% 3.8 4.0 46.7 0.5 0.5 4.1 0.5 0.5 1.0 5.0 4.7 5.0 4.6 3.0 3.0 3.0 2.7 13.6 15.1 10.7 June17 June18 June19T 20.3 20.3 21.3 -3.7 -3.4 -3.9 June16 June16PF June19T Bond Retail deposit PB BCE
Slide 84: Mediobanca Group FY16PF
Mediobanca Group FY16PF Annex 3 FY16 (12 months) FY16 Barclays Esperia Cairn FY16 €m Stated¹ Italia 100% 12m Pro Forma 12m Revenues 2,047 90 82 20 2,237 - NII 1,207 60 12 1,279 - Fees 450 30 60 20 560 - Trading 133 0 10 143 - Equity method 257 (2) 255 Costs (892) (90) (72) (20) (1074) - Labour (441)
Slide 85: CIB restatement
CIB restatement Annex 3 CIB - OLD CIB - CURRENT WB Private Banking WB Specialty Finance Client Business Client Business 50% Banca Esperia Credit management Lending Lending CMB Factoring Advisory Advisory Spafid Capital markets Capital markets Cairn Capital Non Client Business Non Client Business Tre
Slide 86: Consumer Banking restatement
Consumer Banking restatement Annex 3 CONSUMER - OLD CONSUMER - CURRENT Consumer Lending Specialty Finance Consumer Lending Credit management Factoring FY16 - €m TOT CONSUMER SF FY16 - €m TOT CONSUMER Revenues 925 870 55 Revenues 870 870 Costs (300) (270) (30) Costs (270) (270) LLPs (360) (355) (5) L
Slide 87: Wealth Management division FY16PF
Wealth Management division FY16PF Annex 3 FY16 (12 months) TOT Affluent Che Barclays Private CMB Esperia Spafid Cairn Banca! Italia €m WM CheBanca! Banking 100% + Barclays Italia Revenues 475 280 190 90 195 83 80 10 20 - Net interest 250 210 150 60 40 31 10 1 income - Fee income 205 70 40 30 135 43
Slide 88: Wealth management - TFA trend
Wealth management - TFA trend Annex 3 MB Group TFA trend (€bn) +85% +38% 79 Consolidating 2016 acquisitions 16 +53% 57 6 8.4 8.1 52 43 5.8 7.9 8.1 8.1 16.8 28 8.4 Esperia 7.1 8.3 8.3 CMB 6.7 27 CheBanca! 20.5 14.7 12.5 FY13 Internal Cairn FY16 Barclays 50% Esperia FY16PF Internal FY19 growth acquisi
Slide 89: Holding Functions restatement
Holding Functions restatement Annex 3 Corporate Centre - OLD Holding Functions - CURRENT Leasing Other Leasing Other Intercompany Intercompany Some central costs ALM/Treasury Funding Some central costs Liquidity Central direction costs AFS/HTM portfolio €m TOT Leasing Other €m TOT ALM/ Leasing Other
Slide 90: WB and HF restatement from old to new
WB and HF restatement Annex 3 from old to new Wholesale Banking Wholesale LESS LESS Wholesale PLUS CIB Corporate & IB Banking ALM/ Central Banking SPECIALTY NEW FY16 - €m OLD Treasury Costs NEW FINANCE Revenues 500 +70 570 55 625 Costs (300) +30 +60 (210) (30) (240) Net profit 100 +70 +35 205 15 220
Slide 91: Disclaimer
Disclaimer This presentation contains certain forward-looking statements, estimates and targets with respect to the operating results, financial condition and business of the Mediobanca Banking Group. Such statements and information, although based upon Mediobanca’s best knowledge at present, are ce
Slide 92: Investor contacts
Investor contacts Mediobanca Group Investor Relations Piazzetta Cuccia 1, 20121 Milan, Italy Jessica Spina Tel. no. (0039) 02-8829.860 Luisa Demaria Tel. no. (0039) 02-8829.647 Matteo Carotta Tel. no. (0039) 02-8829.290 Email: investor.relations@mediobanca.com http://www.mediobanca.com 92