Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS
Banca Monte Dei Paschi Di Siena — FY2021 Earnings Presentation
35 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, Feb 7, 2022
Slide 1: MPS 4Q21 & FY2021 preliminary results
MPS 4Q21 & FY2021 preliminary results 7 February 2022
Slide 2: 2021 in Review: A solid business model with clear room for upside
2021 in Review: A solid business model with clear room for upside ✓ Ordinary lending revamping, with focus on asset quality and pricing Recovery of ordinary ✓ Commercial spread gap vs the market decreased from 16bps in Jan-21 to 6bps in Nov-21 lending and ongoing balance sheet repricing ✓ Ongoing re
Slide 3: 2021 in Review: De-risked balance sheet & clear upside from capital strengthening
2021 in Review: De-risked balance sheet & clear upside from capital strengthening ✓ Gross NPE stock almost stable vs 2020, even with no disposals ✓ Gross Stage 2 loans decreased EUR 2.7bn YoY, with a weight on performing loans now in line Prudent Asset Quality with pre-Covid level management ahead ✓
Slide 4: FY2021 Results
FY2021 Results Pre-provision profit Cost of risk Net operating result Net result EUR 874mln 31bps EUR 629mln EUR 310mln (+15.3% YoY or +33.5% adjusted for (EUR -20mln in 2020; (post EUR -169mln for systemic Hydra) Or 21bps excluding the impact of model +48mln adjusted for Hydra) charges) changes & G
Slide 5: Business machine – Lending and Deposits rates optimization, and room for growth
Business machine – Lending and Deposits rates optimization, and room for growth Current accounts & time deposits (€/bn) Commercial spread (%) ✓ Exit from non core 76.8 72.6 65.6 customers and repricing initiatives -62% in11M of which 16bps time 14.6% ✓ Time deposits down 6bps 11.5% 8.9% EUR -2.4bn s
Slide 6: Business machine – A Fee-oriented business model
Business machine – A Fee-oriented business model Wealth management gross inflows* (€/bn) Solid franchise Fees / (Net interest income + Fees) track-record in Including 14.3 achieving income from commercial results 57% 11.3 11.3 55% investment in 53% AXA MPS 49% 2019 2020 2021 2019 2020 2021 Fees / (N
Slide 7: A solid track record in cost rationalization, even before future investments
A solid track record in cost rationalization, even before future investments Operating costs evolution (€/bn) Personnel expenses (€/bn) -0.5% -8.0% +0.9% like-for- like* -3.6% 1.43 1.42 1.43 2.29 2.18 2.11 2019 2020 2021 2019 2020 2021 Other operating costs (€/bn) ❑ Ongoing operating costs reduction
Slide 8: Balance sheet derisked & prudent management of asset quality profile
Balance sheet derisked & prudent management of asset quality profile Performing book Gross Stage 2 / Gross performing loans (%) Moratoria on performing book* (€/bn) ✓ 3.7% of expired ✓ Stock of Stage 2 moratoria prudentially loans decreased -98% vs. -3 p.p. 15.5 classified as NPE, EUR 2.7bn YoY Jun-
Slide 9: Strong commitment to reducing extraordinary legal risks
Strong commitment to reducing extraordinary legal risks Claims settled: Provisions vs disbursements (%) Yes Claims settled within existing provisions? No ❑ Exposures well covered in terms of provisions ▪ In the last 5 years, on claims settled, provisions were well above amounts disbursed 2017 2018 2
Slide 10: Capital ratios significantly improved with room for upside
Capital ratios* significantly improved with room for upside CET1 Ratio FL evolution & capital generation (%, bps) ❑ Potential upside from: ~140bps of capital generation (gross of regulatory headwinds) ➢ DTA reassessment, once updated 11.0 projections ➢ Renegotiation of Anima partnership 9.9 ➢ Upside
Slide 11: FY2021: commercial and de-risking performance above public targets
FY2021: commercial and de-risking performance above public targets* Total revenues (€/mln) Operating costs (€/mln) Net operating result (€/mln) +€0.6bn +2.9% 2,980 -2.3% operating 2,895 2,156 2,106 profit 629 -5.3% generated like-for-like** -11 2021 target FY21 2021 target FY21 2021 target FY21 ➢ Fe
Slide 12: ESG: criteria and activities increasingly rooted in the Bank
ESG: criteria and activities increasingly rooted in the Bank • On the 3rd of February 2022, Standard Ethics has upgraded its rating on Banca Monte dei Paschi from “EE-”(adequate) to “EE”(strong), with a long term expected rating EE+ • The rating upgrade confirms the Bank’s increasing focus on ESG, a
Slide 13: Banca Widiba: 2021 – A new business focus, and another year of solid growth
Banca Widiba: 2021 – A new business focus, and another year of solid growth Significant leap of investment placements and mortgages following the Asset growth & remix bank’s strategy with focus on liquidity transformation Gross WM flows New Mortgages Total funding stock (€/mln) (€/mln) (€/bn) Solid
Slide 14: Agenda
Agenda ❑ FY21 & 4Q21 Results ❑ Annex 14
Slide 15: FY21 P&L highlights
FY21 P&L highlights FY20 FY20 * FY21 Change (YoY (€/mln) Stated proforma proforma, %) Net Interest Income 1,291 1,196 1,222 2.2% ➢ NII up with steady quarter-by-quarter increase; 4Q21 +9.4% vs 4Q20* Fees and commissions 1,430 1,430 1,484 3.8% ➢ Fees revamp; +5.6% like-for-like excluding cost for syn
Slide 16: Net Interest Income – Ongoing positive progression
Net Interest Income – Ongoing positive progression +9.4% vs 4Q20 Net Interest Income (€/mln) adjusted for Hydra Commercial Spread** (%) +3.6% 1.89 1.87 1.84 1.83 +3.1% 312 313 323 306 1.68 1.72 1.71 1.72 17 280 BANKING BANKING 0.21 0.14 0.13 0.12 295 1Q21 2Q21 3Q21 4Q21 Quarterly avg commercial lend
Slide 17: Fee and Commission Income – The key source of revenues
Fee and Commission Income – The key source of revenues Fees FY21 vs FY20 (€/mln) Fees (€/mln) Total Fees excluding cost 377 388 367 380 YoY QoQ 1,430 1,484 of synthetic securitizations 380 383 3.8% 17% 371 0% 372 358 631 740 5 5 8 9 865 849 -2% 7.6% 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 cost of synthet
Slide 18: Financial Revenues - Sustainable income from AXA MPS JV
Financial Revenues* - Sustainable income from AXA MPS JV Dividends/Income from investments (€/mln) Includes also ❑ Dividend/Income from the EUR 9mln investments include Bank of Italy dividend contribution from the successful partnership 113 43 96 101 with AXA: 34 38 ▪ Low volatility 21 20 ▪ Increasi
Slide 19: Operating Costs – Strict control pending union negotiations
Operating Costs – Strict control pending union negotiations Operating Costs (€/mln) Operating Costs FY21 vs FY20 (€/mln) -4.5% -8.2% like-for-like* 566 2,185 2,106 540 533 513 1.1% 519 210 Personnel -3.6% 180 174 168 expenses 155 1,415 0.9% 360 1,428 down 355 359 358 351 like-for-like* Other Operati
Slide 20: Cost of Risk – Building on de-risked Balance Sheet
Cost of Risk – Building on de-risked Balance Sheet 2021 Cost of Risk (€/mln) 4Q21 Cost of Risk (€/mln) 31bps Update models & methodological refinements 4Q21 21bps 250 Cost of risk +222 -53 €87mln in 2H21 163 including reclassification -99 of moratoria expired (3.7% +124 - 4Q21 LLPs -103 vs 1.1% not
Slide 21: NPEs stock – Stable YoY thanks to proactive management portfolio
NPEs stock – Stable YoY thanks to proactive management portfolio Gross NPE stock (€/bn) Gross NPEs 2021 evolution (€/bn) 11.9 Of which c. EUR +0.2bn for the new DoD +1.1 4.0 4.1 4.1 -0.5 -0.1 -0.2 4.0 -0.2 2019 2020 2021 2020 Default Cure Cash Bad loans Delta UTP 2021 Gross NPE ratio* NPE stock reco
Slide 22: Non-Operating Items – Affected by systemic charges
Non-Operating Items – Affected by systemic charges Non-operating items (€/mln) 1Q21 2Q21 3Q21 4Q21 FY21 FY20 1Q21 2Q21 3Q21 4Q21 Systemic Funds contribution -68 -22 -69 -10 -169 -140 DTA Fees -16 -16 -16 -16 -63 -71 Sub-total -84 -38 -85 -26 -233 -211 -89 -93 -74 Net provisions for risks and charges
Slide 23: Capital Structure
Capital Structure* Phased-in CET1 ratio (%) Dec-20 Dec-21 +0.8 12.5 Transitional 12.1 +0.6 12.1% 12.5% +0.6 CET1 ratio (%) -0.3 -1.0 -0.3 Fully-loaded CET1 ratio (%) 9.9% 11.0% -1.3 p.p. regulatory headwinds RWA (€ bn) 49.9 47.8 Dec-20 IFRS 9 RWA inflation 2021 Capital Mgmt Actions 2021 RWA Other ef
Slide 24: Key takeaways: FY21 vs FY20
Key takeaways: FY21 vs FY20* Commercial performance Net Interest Income (€/mln) Fees (€/mln) Net operating result (€/mln) Positive Above pre-Covid level quarter-by-quarter +2.2% progression 1,430 +3.8% 1,484 +0.6bn 1,196 1,222 629 BANKING INDUSTRY 48 FY20 FY21 FY20 FY21 FY20 FY21 De-Risking Petitum
Slide 25: Agenda
Agenda ❑ FY21 & 4Q21 Results ❑ Annex 25
Slide 26: 4Q21 & FY21 P&L: Highlights (2020 stated figures)
4Q21 & FY21 P&L: Highlights (2020 stated figures) Change Change Comparative figures for 2020 may € mln 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 (QoQ%) (YoY%) differ from those published, due to Net Interest Income 312 280 306 313 323 +3.1% 1,291 1,222 -5.4% the retrospective application of the change in v
Slide 27: 4Q21 & FY21 P&L: Highlights (2020 proforma figures)
4Q21 & FY21 P&L: Highlights (2020 proforma figures*) Change Change Comparative figures for 2020 may € mln 4Q20* 1Q21 2Q21 3Q21 4Q21 FY20* FY21 (QoQ%) (YoY%) differ from those published, due to Net Interest Income 295 280 306 313 323 +3.1% 1,196 1,222 +2.2% the retrospective application of the change
Slide 28: Balance Sheet
Balance Sheet Total Assets (€/mln) Dec-20 Sep-21 Dec-21 QoQ% YoY% Comparative figures for 2020 may differ from those published, due to the Loans to Central banks 28,526 20,941 20,770 -0.8% -27.2% retrospective application of the change in Loans to banks 3,897 3,344 3,493 4.5% -10.4% valuation criter
Slide 29: Lending & Direct Funding
Lending & Direct Funding Total Lending (€/mln) Dec-20 Sep-21 Dec-21 QoQ% YoY% Current accounts 3,039 2,871 2,696 -6.1% -11.3% Medium-long term loans 55,200 57,014 56,268 -1.3% 1.9% Other forms of lending 13,616 12,935 13,152 1.7% -3.4% Reverse repurchase agreements 8,617 6,095 5,126 -15.9% -40.5% Im
Slide 30: Assets Under Management and Assets Under Custody
Assets Under Management and Assets Under Custody Asset Under Management*(€/bn) AuM: Assets Under Custody (€/bn) +8.1% YoY 64.1 64.4 65.3 60.4 62.1 AuC: -6.1% YoY 41.7 42.4 40.5 40.3 39.1 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 AuM / Total 59% 59% 61% 62% 63% indirect fu
Slide 31: Italian Govies Portfolio: strong derisking in last years
Italian Govies Portfolio*: strong derisking in last years Italian Govies Portfolio (€/bn) Porfolio down by 28% vs Dec- 17, with significant improvement in all FVTOCI risk indicators ❑ FVTOCI & AC components down YoY, mainly for maturities 16.6 17.3 15.4 3.1 3.9 ➢ Persistent positive contribution to
Slide 32: Focus on DTAs
Focus on DTAs Current Italian fiscal regulations do not set any time limit to the use of fiscal losses against the taxable income of subsequent years. Definition Regulatory treatment 4Q21 o DTAs related to write-downs of loans, goodwill and ➢ 100% included in Risk-Weighted Assets like any 1 Converti
Slide 33: Asset Quality Migration Matrix
Asset Quality Migration Matrix NPE inflows from performing NPE outflows to performing ❑ Prudent Asset Quality (€/mln) (€/mln) management, default rate at low Default rate 1.0% Cure rate 19.7% level, with clean up in 4Q21. (0.8% in 3Q21) (10.4% in 3Q21) For 2021 default flow: 293 392 ▪ past dues repr
Slide 34: Moratoria and guaranteed loans breakdown
Moratoria and guaranteed loans breakdown Moratoria* New guaranteed loans* Applications Applications Disbursed Accepted Accepted % of loan # €/bn (outstanding) # €/bn (€/bn) (€/bn) book (€/bn) Performing customers 2k 0.3 0.3 0.3% Total guaranteed loans 107.7k 11.6 11.1 10.4 100% guaranteed (≤€30k) 78
Slide 35: Disclaimer
Disclaimer THIS DOCUMENT IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS DOCUMENT, WHICH WAS PREPARED BY BANCA MONTE DEI PASCHI DI SIENA S.P.A. (THE “COMPANY” AND TOGETHER WITH ITS CONSOLIDATED SUBSIDIARIES, THE “GROUP”), IS PRELIMINARY IN NATURE AND MAY BE SUBJECT TO UPDATING, REVISION A
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