Credito Emiliano S.p.a. · MIL:CE

Credito Emiliano — 9M18 Earnings Presentation

25 slides from Credito Emiliano's earnings presentation, 2018

  1. Slide 1: Group Results 9M18

    GROUP RESULTS 9M18

  2. Slide 2: 3Q18 Highlights

    3Q18 HIGHLIGHTS GROWTH • Loans to Customers grew by more than €600 million in the last year (+2.6% YoY) • Customers Funding net inflows were up by +€1.6 billion year to date: all aggregates (Direct Deposits, AUC, and AUM) showed a positive growth despite the adverse financial markets evolution • Bot

  3. Slide 3: Income Statement

    INCOME STATEMENT €, million 3Q17 2Q18 3Q18 Δvs 3Q17 9M17 9M18 0 Δvs 9M17 • Strong growth of 3Q18 Operating Income (+7.1% vs ù Operating Income 264.8 274.0 283.5 +7.1% 850.6 867.4 +2.0% 3Q17, +2% YoY 9M18 vs Core* Operating 9M17) thanks to the positive Income (net of Fin. contribution of both Interes

  4. Slide 4: Core Operating Income

    CORE OPERATING INCOME CORE OPERATING INCOME (quarterly average) 272.5 280 +30% 268.3 270 257.0 260 248.8 247.7 250 234.0 240 224.4 224.4 230 220.7 220 209.9 210 200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Core* Operating Income (net of Income from Financial Activities and Performance Fees)

  5. Slide 5: Interest Margin (1/3)

    INTEREST MARGIN (1/3) INTEREST MARGIN: EVOLUTION  Remarkable growth of the 3Q18 Interest Margin, 133 132 +5.3% up by 5.3% YoY (+3% 9M18 vs 9M17) thanks to 131 130 129 128 127 126 125 124 123 132.8 the volumes’ expansion and the contribution of 122 121 120 119 118 117 116 120.9 124.7 Group’s Securit

  6. Slide 6: Interest Margin (2/3)

    INTEREST MARGIN (2/3) LOANS RATE DEPOSIT RATE 2.85 2.80 2.77 2.72 Discontinuity 2.68 2.63 2.59 in the time 0 1.00 0.95 0.95 series* 2.13 0.90 2.06 1.97 1.94 - 0.71 0 1.91 1.93 1.88 0.75 0.73 0.72 0 0.60 0 - 0.63 0.24 0.19 0.16 0.11 0 0.11 0.10 0.09 0 - 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 1Q17 2Q17 3Q

  7. Slide 7: Interest Margin (3/3)

    INTEREST MARGIN (3/3) SECURITIES’ PORTFOLIO BREAKDOWN  Securities’ Portfolio stood at €7.5 billion, 2.7 bn 2.7 bn decreasing from 1H18 figure, mainly due to the sale of US govies (~€850 million). 3Q18 Italian govies exposure remained 28% 33% 36% 35% 36% unchanged in ablsolute value, while its 43% 4

  8. Slide 8: Non Interest Income

    NON INTEREST INCOME Total (€, million) 170.5 178.3 146.4 164.6 189.0 153.6 158.8 33.4 9.2 30.3 Performance Fees 22.1 3.3 7.7 3.0 5.9 44.8 43.2 45.3 Income from 45.0 43.6 44.2 43.5 Financial Activities 15.5 Banking Fees 12.2 12.0 12.6 16.0 13.9 16.2 Insurance Income 85.5 85.5 82.5 83.4 91.0 84.6 83.6

  9. Slide 9: Operating Costs

    OPERATING COSTS OPERATING COSTS EMPLOYEES / NETWORKS +2.3 % Employees 6,231 6,068 6,140 186 184 169 180 192 184 176 5,899 5,763 0 5,544 5,519 5,604 5,609 59 59 61 51 61 56 51 0 2010 2011 2012 2013 2014 2015 2016 2017 9M18 Financial Advisors 80 127 123 129 133 123 120 118 885 855 827 820 821 795 785

  10. Slide 10: Loans to Customers

    LOANS TO CUSTOMERS LOANS TO CUSTOMERS*: EVOLUTION 24,000 4,785 4,520 4,626 4,844 5,045 5,077 4,252 20,000 Other Loans Residential 6,775 Mortgages 16,000 6,648 6,657 6,710 6,744 6,751 6,726 Leasing 12,000 2,377 Short-Term 2,336 2,355 2,371 2,392 2,435 2,476 Loans 8,000 9,752 10,011 9,767 10,783 9,925

  11. Slide 11: Loans: Comparison with the Industry

    LOANS: COMPARISON WITH THE INDUSTRY LOANS TO CUSTOMERS GROWTH* MARKET SHARES** EVOLUTION 1.77% 1.74% 1.66% 1.69% 140 Industry 1.58% Credem 1.6% 130 +2.6% YoY 1.48% +34% 120 1.28% 1.3% 1.20% 110 1.16% MS on Performing Loans 100 1.07% +1.6% YoY 90 1.0% 2010 2011 2012 2013 2014 2015 2016 2017 9M18 dec.

  12. Slide 12: Deposits, Bonds and AUM

    DEPOSITS, BONDS AND AUM €, million 2016 2017 1H18 9M18 • Total Funding from Clientele showed a material Sight / Saving Deposits 19,331 21,451 22,022 22,134 growth of Direct Deposits from Customers CD and Other Deposits 555 499 613 516 (+€700 million YTD, +3.2%) whereas AUM, despite its positive infl

  13. Slide 13: Group Customers Funding: Net Inflows Breakdown

    GROUP CUSTOMERS FUNDING: NET INFLOWS BREAKDOWN 3600 2,945 1,666 2,750 2,823 (1H17) 2,5542,815 3000 AUC 1,268 Direct Deposits 2,300 (1H18) 2400 AUM 2,011 1,976 1800 Total Net Inflows 1,602 1,258 1,130 1200 823 645 600 447 511 372 309 0 -117 -144 -161 -94 -195 -600 -382 -807 -1200 9M13 9M14 9M15 9M16

  14. Slide 14: AUM and Insurance Reserves

    AUM AND INSURANCE RESERVES AUM AND INSURANCE RESERVES EVOLUTION OICR BY ASSET CLASS* Money Market Bonds Balanced/ Flexible Equity 34.0 33.5 100% 6% +73% 31.0 26% Insurance 28.1 6.8 Reserves 7.0 80% 36% 24.6 6.3 AUM 5.5 60% 20.9 19.3 18.8 4.4 45% 17.3 3.2 40% 2.4 2.6 27.2 26.5 2.5 22.5 24.6 57% 20.2

  15. Slide 15: Issued Bonds and Future Maturities

    ISSUED BONDS AND FUTURE MATURITIES ISSUED BONDS BONDS MATURITIES Retail Bonds 2,000 Institutional 365 Retail 1,500 1,407 1,473 1,000 176 212 25 1,500 500 938 2018 2019 2020 2021 523 600 38 312 249 100 - 50 2010 2011 2012 2013 2014 2015 2016 2017 9M18 1,000 Institutional Bonds 800  In accordance wit

  16. Slide 16: Credit Quality (1/2)

    CREDIT QUALITY (1/2) GROSS NON PERFORMING LOANS 856 820 900 798 2016 600 2017 504 465 418 9M18 300 43 41 39 0 Gross Bad Loans Gross UTP Loans Gross Past Due Loans % on Loans (Credem) 3.5 3.2 3.2 2.1 1.8 1.7 0.2 0.2 0.2 % on Loans (Industry)** 10.0 8.5 6.7 5.9 4.8 4.4 0.4 0.3 0.3 12.0% GROSS NPL RATI

  17. Slide 17: Credit Quality (2/2)

    CREDIT QUALITY (2/2) NET QUARTERLY AVERAGE* GROSS 2017 & 2018 NET NPL FLOWS QUARTERLY FOCUS* 70 5 68 2017-18 Quarterly Average : -€14 million 46 0 48 42 -1 -5 -1 25 27 26 28 22 -10 -7 15 8 -15 -20 -16 12 -151% -6 -25 -22 -23 32 -24 -30 -26 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18 1Q17 2Q17

  18. Slide 18: NPLs Coverage

    NPLs COVERAGE NET NON PERFORMING LOANS  Net NPL reduction benefitted both from the €, million 2016 2017 1H18 9M18 0 gross NPL decrease and from further €20 million of non-recurrent loan loss provisions Net Bad Loans 345.7 319.3 271.6 251.8  NPL accounting coverages increased Net UTP Loans 425.3 37

  19. Slide 19: NPLs: Comprehensive Coverage

    NPLs: COMPREHENSIVE COVERAGE Gross Net Shortfall* Coverage incl. NPLs Coverage (€, million) (€, million) (€, million) Shortfall*  Further ~€20 million of Bad Loans 797.9 251.8 68.4% 119.1 83.4% higher loan loss provisions resulted in the reduction of UTP Loans 418.2 321.3 23.2% 61.1 37.8% the NPL s

  20. Slide 20: Expected Bad Loans Disposal: Pro-forma Impacts

    EXPECTED BAD LOANS DISPOSAL: PRO-FORMA IMPACTS Pro-forma 9M18 % change after disposal Gross Bad Loans (€, million) 797.9 719.2 -9.9% Total Gross NPL (€, million) 1,254.9 1,176.2 -6.3% NPL Ratio 5.1% 4.8% (Gross NPL on Gross Loans) Bad Loans Coverage 68.4% 65.9% Total NPL Coverage 51.9% 49.2%  Durin

  21. Slide 21: Cost of Risk

    COST OF RISK 68 59 55 58 52 42 44 48 31 32 34 38 47 45 28 39 41 34 30 13 13 14 18 27 8 21 13 13 13 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 1H18 9M18 Cost of risk Cost of Risk (net of non-recurrent events) COST OF RISK: HISTORY 80 70 Parmalat  Annualized Cost of Risk remained at 70 Default 62 5

  22. Slide 22: Assets & Liabilities

    ASSETS & LIABILITIES ASSETS 24.246 24.092  Banking Group’s Securities 1H18 12,000 9M18 Portfolio decreased in the quarter (-€850 million), mainly because of US 7,240 7,183 6,159 govies disposal 5,302 6,000  Loans to Customers were slighlty down compared to 2,093 2,112 1,719 1,515 the end of June f

  23. Slide 23: Liquidity Ratios

    LIQUIDITY RATIOS NSFR LCR 225% 125% 123% 124% 220% 211% 190% 166% 160% 130% 2016 2017 9M18E 2016 2017 9M18E  Both NSFR and LCR ratios were well above 1.10 LOAN TO DEPOSIT RATIO* their target thresholds. In particular, thanks to 1.05 a NSFR at 124%, the Group will have a greater 1.00 0.99 0.98 flexi

  24. Slide 24: Consolidated Capital Ratios

    CONSOLIDATED CAPITAL RATIOS CAPITAL AND CAPITAL CET1 RATIO FULLY PHASED RATIOS (fully phased) (CREDEMHOLDING)* Banking Group Credemholding 14.0% 13.3% 13.1% €/mln 1H18 9M18 2017 FL 1H18 9M18 13.0% 13.0% CET 1 1,872 1,903 1,799 1,716 1,750 12.3% Tier Total 2,219 2,250 2,106 2,015 2,048 12.0% 11.9% Ca

  25. Slide 25: 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 — 9M18 Earnings Presentation on 6ix