Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — Banco Bpm Societa Ord — 9M 2021 Earnings Presentation
38 slides from Banco Bpm Spa's earnings presentation, Nov 5, 2021
Slide 1: 9M 2021 Group Results Presentation
9M 2021 Group Results Presentation 5 November 2021
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 question and answer session and any written or oral material discussed following the distribution of this document. The distribut
Slide 3: Methodological Notes
METHODOLOGICAL NOTES Before 30/09/2020, the impact from the change in own credit risk on certificates classified as financial liabilities measured at fair value through profit or loss was accounted under the item “Net Financial Results” of the Reclassified P&L scheme. Starting from 30/09/2020, thi
Slide 4: Agenda
Agenda 1. Summary 4 2. 9M 2021 Performance Details 14 9M 2021 Group Results Presentation 4
Slide 5: 9M 2021 at a glance: strong performance, driven by robust core revenues
9M 2021 AT A GLANCE: STRONG PERFORMANCE, DRIVEN BY ROBUST CORE REVENUES CORE REVENUES1 PRE-PROVISION COST OF RISK3 CAPITAL POSITION AND (Incl. Income from Associates) INCOME & ASSET QUALITY BUFFERS €3,106m €1,533m Gross NPE ratio down at CET1 FL 13.3% (+10.3% Y/Y) (+20.8% Y/Y) 5.9% (4.8% EBA definit
Slide 6: Key P&L highlights: 9M 2021 net income at €472m
KEY P&L HIGHLIGHTS: 9M 2021 NET INCOME AT €472M P&L STATED P&L STATED €m Q1 2021 Q2 2021 Q3 2021 9M 2020 9M 2021 Y/Y NET I NTEREST I NCOME 497 522 516 1,474 1,536 4.2% NET FEES & COMMISSI ONS 471 479 475 1,235 1,425 15.5% I NCOME FROM ASSOCIATES 42 57 47 107 145 35.3% CORE REVENUES 1,010 1,058 1,039
Slide 7: Net interest income growth in 9M 2021
NET INTEREST INCOME GROWTH IN 9M 2021 Yearly trend Quarterly trend NII Evolution Bridge €m +4.2% €m €m -1.1% 1,473.5 1,535.6 522.4 +5.1 516.4 -2.6 -4.3 496.8 522.4 516.4 -4.2 Including negative impact from reinvestment of TLTRO III extra liquidity Comm. NPE TLTRO Non 9M 20 9M 21 Q1 21 Q2 21 Q3 21 Q2
Slide 8: Strong fees & commissions: growth in commercial banking fees
STRONG FEES & COMMISSIONS: GROWTH IN COMMERCIAL BANKING FEES COMPENSATING Q3 SEASONALITY Yearly trend Quarterly trend Q3 monthly trend €m €m +13.8% €m +15.5% 1,234.6 1,425.4 -0.7% 587.3 713.5 +21.5% 417.7 478.7 475.3 162.0 163.0 247.7 226.7 150.4 197.3 647.3 711.8 +10.0% 77.3 72.6 76.8 220.3 231.0 2
Slide 9: Operating costs: strong focus with further savings
OPERATING COSTS: STRONG FOCUS WITH FURTHER SAVINGS Total Operating Costs €m -0.2% Y/Y -4.0% Y/Y Normalised figures1 Normalised figures1 +5.9% +3.3% 1,891 -2.9% -2.5% 1,830 VS 9M 2019 581.5 631.6 615.6 Staff costs 1,173.9 1,253.9 Other 357.0 417.1 409.8 656.4 637.3 224.6 214.5 205.8 9M 20 9M 21 Cost/
Slide 10: Healthy volume growth, reduction in moratoria loans and safe liquidity profile
HEALTHY VOLUME GROWTH, WITH A FURTHER REDUCTION IN MORATORIA LOANS AND SAFE LIQUIDITY PROFILE «CORE» NET PERF. CUSTOMER LOANS LOANS GUARANTEED BY THE STATE COVID MORATORIA € bn Provided Default rate of expired Concentrated in the +3.2% amount +129.6% Moratoria at ~1%, down best rating classes (stock
Slide 11: De-risking strategy: achieving the 5% threshold
DE-RISKING STRATEGY: ACHIEVING THE 5% THRESHOLD MATERIAL IMPROVEMENT IN CREDIT QUALITY, ACCELERATED ALSO BY NEW DE-RISKING STRATEGY € bn Increased by €0.5bn, with CoR already ~4.8% EBA fully frontloaded as at 30/09/21 8.6% 7.5% definition Gross NPE Ratio -1.5 5.9% ~5.3% -0.5 ~4.3% EBA -0.65 <€6bn Gr
Slide 12: Capital: solid position and buffers, at top level since the merger
CAPITAL: SOLID POSITION AND BUFFERS, AT TOP LEVEL SINCE THE MERGER Further strengthening of capital adequacy, with excellent buffers even after the absorption of regulatory headwinds in 2021 (-95bps) % Evolution of Fully Loaded Capital Ratios Phased-In TOTAL 17.2 17.5 17.9 19.3 TIER1 14.3 14.5 15.0
Slide 13: FY 2021 outlook confirmed by consistent 9M 2021 results
FY 2021 OUTLOOK CONFIRMED BY CONSISTENT 9M 2021 RESULTS TOTAL REVENUES OPERATING COSTS PRE-PROVISION INCOME ~€4.4BN ~€2.5BN ~€1.9BN COST OF RISK EPS & PAYOUT CAPITAL In line with H1 2021 EPS: 35 cents CET1 FL: ~13% Including front-laoding for additional derisking Dividend payout: ~40% MDA Buffer FL:
Slide 14: Agenda
Agenda 1. Summary 4 2. 9M 2021 Performance Details 14 9M 2021 Group Results Presentation 14
Slide 15: New lending: still fostered by State-guaranteed measures
NEW LENDING: STILL FOSTERED BY STATE-GUARANTEED MEASURES €16.9BN NEW LOANS IN 9M 2021, O/W €6.1BN COVID-19 MEASURES GUARANTEED BY THE STATE € bn TOTAL NEW LENDING1 20.2 Strong yearly performance of new lending 2.3 16.9 to Households: +35.4% 5.8 6.3 3.1 Quarterly and yearly trend of new lending H
Slide 16: Covid-19 moratoria: 73% reduction with very low default rate
COVID-19 MORATORIA: 73% REDUCTION WITH VERY LOW DEFAULT RATE STRONG RESILIENCE OF THE MORATORIA PORTFOLIO: • Outstanding Performing Moratoria down to €4.2bn: - representing a very limited portion of gross performing customer loans (4.0%) - concentrated in the best rating classes (71%), with Composit
Slide 17: Focus on Govies portfolio
FOCUS ON GOVIES PORTFOLIO Italian Govies at AC Italian Govies at FVOCI Italian Govies at FVTPL € bn -13.7% € bn -31.4% € bn -35.7% -3.8% -32.4% 14.8 +16.9% 13.2 12.7 6.2 6.3 4.3 3.0 1.6 1.9 30/09/20 30/06/21 30/09/21 30/09/20 30/06/21 30/09/21 30/09/20 30/06/21 30/09/21 Basis Point -€4.3m -€1.6m -€1
Slide 18: NPE evolution: another significant step in derisking
NPE EVOLUTION: ANOTHER SIGNIFICANT STEP IN DERISKING NPE STOCK: COVERAGE: DOWN BY €23.4BN SINCE THE MERGER TREND DRIVEN BY LOWER SHARE OF BAD LOANS AND HIGHER WITH BAD LOANS DOWN BY >€16.4BN SHARE OF SECURED POSITIONS AFTER PROJECT ROCKETS Coverage ratios 31/03/21 GBV in € bn -32.6% indicated in bra
Slide 19: Further improvement in key AQ indicators
FURTHER IMPROVEMENT IN KEY AQ INDICATORS MATERIAL AND ONGOING IMPROVEMENT IN NPE RATIOS SINCE THE MERGER 4.8% (EBA definition)1 8.6% 7.5% 6.2% 5.9% Gross 4.7% 3.9% 3.4% 3.2% Net 30/09/20 31/12/20 30/06/21 30/09/21 TEXAS RATIO2 44.4% 38.6% 31.4% 29.2% Ca. 0.7% excl. New DoD FTA DEFAULT RATE 1.2% DANG
Slide 20: Financial portfolio: net financial result, reserves & unrealised gains
FINANCIAL PORTFOLIO: NET FINANCIAL RESULT – RESERVES & UNREALISED GAINS Net Financial Result (excl. FV on Own Liabilities) €m +4.7% 240.8 252.1 -69.2% 116.5 35.9 9M 20 9M 21 Q2 21 Q3 21 Reserves of Debt Securities at FVOCI Unrealised gains on Debt Securities at AC Pre-tax, in € m Pre-tax, in € m Not
Slide 21: 9M 2021 quarterly P&L results
9M 2021 QUARTERLY P&L RESULTS Chg. Chg. Reclassified income statement (€m) Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q/Q Q/Q % Net interest income 474.1 479.5 519.9 509.0 496.8 522.4 516.4 -5.9 -1.1% Income (loss) from invest. in associates carried at equity 22.3 48.0 36.8 23.7 41.5 56.5 46.8 -9.7 -
Slide 22: P&L: 9M 2021 stated and adjusted comparison
P&L: 9M 2021 STATED AND ADJUSTED COMPARISON Chg. Y/Y 9M 20 9M 21 Chg. Y/Y Reclassified income statement (€m) 9M 20 9M 21 % adjusted adjusted % Net interest income 1,473.5 1,535.6 4.2% 1,473.5 1,535.6 4.2% Income (loss) from invest. in associates carried at equity 107.1 144.9 35.3% 107.1 144.9 35.3%
Slide 23: Adjusted P&L: details on non-recurring items
ADJUSTED P&L: DETAILS ON NON-RECURRING ITEMS 9M 21 Reclassified income statement (€m) 9M 21 adjusted One-off Non-recurring items Net interest income 1,535.6 1,535.6 0.0 Income (loss) from invest. in associates carried at equity 144.9 144.9 0.0 Net interest, dividend and similar income 1,680.5 1,680.
Slide 24: Reclassified balance sheet as at 30/09/2021
RECLASSIFIED BALANCE SHEET AS AT 30/09/2021 Chg. y/y Chg. YTD Chg. in Q3 Reclassified assets (€ m) 30/09/20 31/12/20 30/06/21 30/09/21 Value % Value % Value % Cash and cash equivalents 806 8,858 20,718 19,732 18,926 n.m. 10,874 122.8% -986 -4.8% Loans and advances measured at AC 125,680 120,456 117,
Slide 25: Direct funding
DIRECT FUNDING Solid position confirmed in Core funding Direct customer funding1 (without Repos) € bn +3.4% +1.1% Capital-protected Certificates 120.1 122.6 121.4 117.4 Other Bonds 103.0 94.8 98.5 101.4 Time deposits +€6.6bn Y/Y C/A & Sight deposits (80.8%) (82.0%) (84.0%) (83.5%) (% Share on total)
Slide 26: Indirect customer funding at €96.6bn
INDIRECT CUSTOMER FUNDING AT €96.6BN Assets under Management (AuM) Assets under Custody (AuC)1 € bn € bn +9.7% +8.3% +6.9% 63.7 +2.9% 58.0 59.6 62.9 4.1 4.0 3.9 4.1 14.9 15.0 15.1 14.8 30.4 32.0 33.5 32.9 39.2 40.8 43.8 44.4 30/09/2020 31/12/2020 30/06/2021 30/09/2021 30/09/2020 31/12/2020 30/06/202
Slide 27: Bonds outstanding: portfolio analysis
BONDS OUTSTANDING: PORTFOLIO ANALYSIS Bonds Outstanding as at 30/09/2021 Nominal 19.8% Cap.-Protected amounts Certificates Covered Bonds1 35.2% €18.4bn 20.7% Senior Preferred €3.7bn, o/w: €0.4bn not included in Own 4.1% Senior Funds Phased-in, but 20.2% Non-preferred representing MREL- Subordinated
Slide 28: Bond maturities: limited and manageable amounts
BOND MATURITIES: LIMITED AND MANAGEABLE AMOUNTS Institutional bond maturities Retail bond maturities € bn 3.75 € bn €1.78bn already reimbursed 2.50 in 9M 20211 1.91 0.67 1.40 0.50 0.47 1.25 0.00 0.00 0.20 0.51 Q4 2021 FY 2022 FY 2023 Q4 2021 FY 2022 FY 2023 Senior Pref. Covered Bonds 2 Senior Pref.
Slide 29: Securities: significant weight of the AC portfolio
SECURITIES: SIGNIFICANT WEIGHT OF THE AC PORTFOLIO € bn 30/09/20 31/12/20 30/06/21 30/09/21 Chg. y/y Chg. YTD Chg. in Q3 Debt securities 39.9 33.9 39.7 36.8 -7.7% 8.7% -7.3% Equity securities, Open-end funds & Private equity 1.9 2.4 3.0 3.3 78.0% 39.3% 11.1% TOTAL SECURITIES 41.8 36.3 42.7 40.2 -3.9
Slide 30: Solid liquidity position: LCR at 209% & NSFR >100%
SOLID LIQUIDITY POSITION: LCR AT 209% & NSFR >100%1 Up at ~€14bn Eligible Assets2 as at end-October 2021 € bn 64.0 65.0 61.4 ADDITIONAL UNENCUMBERED LIQUID ASSETS 58.2 o/w: Unencumbered 22.1 16.5 12.3 Excess ECB deposits: €6.1bn 9M 2021 average (€8.3bn 19.9 stock as at 30/09/2021) Encumbered Oth
Slide 31: Net customer loans
NET CUSTOMER LOANS Satisfactory increase in Performing Loans, with new loans granted at €16.9bn in 9M 20211 Net Customer Loans2 € bn 108.7 109.3 109.4 108.7 5.1 4.3 3.7 3.5 -31.8% Y/Y NPE 103.6 105.0 105.7 105.3 +1.6% Y/Y Performing Loans 30/09/2020 31/12/2020 30/06/2021 30/09/2021 CHANGE NET PERFOR
Slide 32: Analysis of performing loan portfolio
ANALYSIS OF PERFORMING LOAN PORTFOLIO Performing customer loan (GBV) Staging evolution of breakdown as at 30/09/20211 Performing Loans Other (Public Sector, GBV in € bn GACS Senior Notes No-Profit, etc.) 104.1 105.5 106.1 105.7 2.3% 4.2% 15% represented by Covid-19 6.6% 6.8% 10.7% 10.8% State-guaran
Slide 33: Asset quality details – loans to customers at AC
ASSET QUALITY DETAILS – LOANS TO CUSTOMERS AT AC GROSS EXPOSURES 30/09/2020 31/12/2020 30/06/2021 30/09/2021 Chg. y/y Chg. YTD Chg. in Q3 €/m and % Value % Value % Value % Bad Loans 3,615 3,578 2,123 2,148 -1,467 -40.6% -1,431 -40.0% 25 1.2% UTP 6,076 4,946 4,825 4,386 -1,690 -27.8% -560 -11.3% -439
Slide 34: NPE flows
NPE FLOWS Inflows from Performing to NPEs Outflows from NPEs to Perf. Loans €m €m Up at €35m including also 332 308 257 loans at FV 261 224 153 110 114 81 43 222 55 44 21 33 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Impact from New DoD FTA Flows from UTP
Slide 35: Gross NPEs down by €23.4bn vs. YE 2016
GROSS NPEs DOWN BY €23.4BN VS. YE 2016 NPE REDUCTION SINCE THE BEGINNING OF THE MERGER NPEs (GBV€ bn) Down by 18.2bn vs. YE 2016, o/w: 30.0 • Inflows from Performing: +€3.6bn • Cancellations, Write-offs, Recoveries, Cure & Other2: -€6.9bn • Disposals: -€14.6bn o/w: €0.1bn in January • IFRS 9 reclass
Slide 36: UTP loans: high share of restructured & secured positions
UTP LOANS: HIGH SHARE OF RESTRUCTURED & SECURED POSITIONS UTP analysis Breakdown of Net UTPs € bn -11.3% YTD Unsecured € bn 31/12/20 30/09/21 % Chg. Secured 4.9 Forborne 1.8 1.7 -6.7% (%) Composition 4.4 - Secured 1.3 1.3 1.5% 2.1 (42%) 1.6 - Unsecured 0.5 0.4 -26.8% (36%) 1.9 2.5 0.6 Other UTP 1.0
Slide 37: Capital position in detail
CAPITAL POSITION IN DETAIL PHASED IN CAPITAL PHASED IN 30/09/2020 31/12/2020 30/06/2021 30/09/2021 POSITION (€/m and %) RWA COMPOSITION 30/09/2020 31/12/2020 30/06/2021 30/09/2021 CET 1 Capital 9,785 9,597 9,676 9,654 (€/bn) T1 Capital 10,589 10,397 10,853 10,830 CREDI T & COUNTERPARTY Total Capital
Slide 38: Contacts for investors and financial analysts
CONTACTS FOR INVESTORS AND FINANCIAL ANALYSTS INVESTOR RELATIONS Roberto Peronaglio +39-02-9477.2090 Tom Lucassen +39-045-867.5537 Arne Riscassi +39-02-9477.2091 Silvia Leoni +39-045-867.5613 Carmine Padulese +39-02-9477.2092 Registered Offices: Piazza Meda 4, I-20121 Milan, Italy Corporate Offices:
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