Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS

Banca Monte Dei Paschi Di Siena — 9M 2013 Earnings Presentation

38 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, Nov 14, 2013

  1. Slide 1: 9M13 and 3Q13 Results

    9M13 and 3Q13 Results Siena, 14th November 2013

  2. Slide 2: Contents

    Contents  Key messages  9M13 Results - Balance sheet  9M13 Results - Profit and Loss  Annexes page 2

  3. Slide 3: Executive Summary (1/2)

    Executive Summary (1/2) 1  Acceleration in 3Q13 on De-risking of Financial Assets Improving portfolio and Deleveraging of loan book Balance sheet  Optimisation of funding mix with decrease in expensive funding structure sources and increase in AUM 2  Costs decreased by 11.4% YoY*  400 branches c

  4. Slide 4: Executive Summary (2/2)

    Executive Summary (2/2) Restructuring Plan: Waiting for  Awaiting final EC approval of Restructuring Plan submitted on 7th Oct 2013 final and now filed approval Main  Restored profitability and capital generation, targeting ~ 9% RoTE and ~ EUR 900m net income in 2017 via, inter alia: Guidelines 

  5. Slide 5: 9M13 and 3Q13 results consistent with our strategy

    1 9M13 and 3Q13 results consistent with our strategy De-risking and Improving Positive Deleveraging funding mix impact on P&L  De-risking of financial  Decrease in more costly  Improvement in net interest portfolio funding sources income thanks to a lower Securities and Derivatives cost of fundin

  6. Slide 6: Continued delivery on cost optimisation

    2 Continued delivery on cost optimisation Total Costs (YoY % growth) Headcount: trend line 3Q13 vs 3Q12 -13% Operating Costs ~ 31,200 ~ 28,500 - ~2,700 ~ 23,100 - ~5,300 -3.7% 2011 Sep-13 1H 2013 2017 -11.4% Other admin. expenses: trend line (€ mln) Dec-12 Sep-13 ~ 1,110 - ~160 ~ 950 - ~280 ~ 670 20

  7. Slide 7: MPS risk profile vs. peers

    3 MPS risk profile vs. peers Higher Coverage ratio on Impaired loans Level 3/Total Assets lower than peers 40.8% 0.94% 34.9% 0.14% Average It Banks MPS Average It Banks MPS Sep-13* Sep-13 Jun-13 * Sep-13 Core Tier 1 higher than peers  MPS and Italian Banks already adopt the best practice on Asset Q

  8. Slide 8: P&L impacted by several Group-specific elements

    4 P&L impacted by several Group-specific elements while structural cost cutting offsets revenue reduction 9M13 Core Pre-Tax Profit trend  9M13 results impacted by “non core” elements Commissions  Approx 67% of core Pre-tax on Pre-tax profits ex NFI € mln Profit (loss) Cost of NFI Monti Bonds and M

  9. Slide 9: Contents

    Contents  Key messages  9M13 Results - Balance sheet  9M13 Results - Profit and Loss  Annexes page 9

  10. Slide 10: Assets & Liabilities trend

    Assets & Liabilities trend Total Assets €/mln Sep-12 * Jun-13 Sep-13 QoQ% YoY% Customer loans 145,329 138,082 135,564 -1.8% -6.7%  Customer loans down in line Loans to banks 12,371 12,240 11,439 -6.5% -7.5% with deleveraging plans, with Financial assets 47,704 50,702 46,267 -8.7% -3.0% run-off of p

  11. Slide 11: Direct funding optimisation

    Direct funding optimisation Direct funding by Source  Current accounts and time deposits €/mln Sep-12* Jun-13 Sep-13 QoQ% YoY% remain stable Current accounts 57,975 57,536 57,264 -0.5% -1.2% Time deposits 4,801 8,766 8,759 -0.1% 82.4%  Direct funding down on both the quarter and Repos 10,823 14,86

  12. Slide 12: Focus on AuM: accelerating momentum

    Focus on AuM: accelerating momentum AuM  Assets under management: increase due to +2.8% positive net flows (concentrated in funds and bancassurance) and positive market impact 44.8 44.5 42.8 44.0  For the insurance sector:  Life: approx. EUR 3.2 bn in gross placements as at Sep-13 (up approx. EUR

  13. Slide 13: Institutional funding and interbank exposure

    Institutional funding and interbank exposure Bond Maturities breakdown*  Net interbank exposure almost entirely consisting of ECB exposure made up of two three- 3.6 year Long Term Refinancing Operations (LTROs) amounting to EUR 29 bn, of which EUR 1 bn repaid in October (new exposure EUR 28 bn) 1.5

  14. Slide 14: Lending: deleveraging ongoing

    Lending: deleveraging ongoing Total Lending €/mln * Jun-13 Sep-13 QoQ% YoY% Sep-12  Loans to customers down 6.7% YoY and Current accounts 13,480 12,028 12,060 0.3% -10.5% 1.8% QoQ, due to slowing economic cycle and Mortgages 74,640 69,231 66,735 -3.6% -10.6% the Group’s more selective credit polici

  15. Slide 15: Asset quality: NPL and watchlist flows

    Asset quality: NPL and watchlist flows Gross NPL and Watchlist Inflows* NPL Watchlist** 376 319 271 272 233 248 230 194 o/w 353 311 310 384 296 266 272 252 € mln 3Q12 4Q12 1Q13 2Q13 3Q13 Jul-13 Aug-13 Sep-13 Monthly Monthly Monthly Monthly Monthly avg avg avg avg avg Inflows by Geography*** (%) Infl

  16. Slide 16: Coverage ratios: trend line

    Coverage ratios: trend line Impaired Loans Coverage  Impaired loans coverage broadly in line +244bps with end of June. Specifically: -28bps  NPL coverage stable 41.1% 40.8%  Watchlist coverage slightly lower owing 38.4% IT Banks to the higher rate of “objective”** Avg.* 34.9% watchlists requiring

  17. Slide 17: Impaired loans composition

    Impaired loans composition NPL Watchlist* Restructured Past due 10.0% Retail 14.2% 0.4% 13.8% 19.3% 26.1% 23.6% Small Business 59.7% 66.4% 99.6% 66.9% Corporate Corporate and Small Business breakdown Real Estate 24.9% 39.1% 26.0% 42.0% Construction 17.5% 22.1% 8.9% 26.2% RE activities 7.4% 16.9% 17.

  18. Slide 18: Financial Assets

    Financial Assets Securities and Derivatives Portfolio*  Ongoing optimisation activities on both government Market Value Sep-13 QoQ% bonds portfolio (AFS) and Loans & Receivables (L&R): (€ mln)  HFT: down owing to primary dealer trading by HFT 8,268 -28.0% MPS Capital Services  AFS: down as a resu

  19. Slide 19: Focus on de-risking of Finance Portfolio and Bank of Italy stake

    Focus on de-risking of Finance Portfolio and Bank of Italy stake Private Equity Funds Portfolio  Financial Asset Portfolio optimisation, in line with Restructuring Plan c265 guidelines, with sharp reduction in low risk-return positions not consistent with the profile of c120 Commercial Bank, and no

  20. Slide 20: RWAs, Capital Ratios and AFS reserve

    RWAs, Capital Ratios and AFS reserve RWAs over time  Core Tier 1 ratio, including EUR 4.1 bn of New -EUR 8.5 bn -9.2% Financial Instruments, at 11.1% (8.9% as at 31 Dec- 12) -EUR 3.5 bn  Ongoing optimisation of RWAs (EUR 8.5 bn as at 92.8 87.8 84.3 Dec-12) mainly driven by a significant reduction

  21. Slide 21: Contents

    Contents  Key messages  9M13 Results - Balance sheet  9M13 Results - Profit and Loss  Annexes page 21

  22. Slide 22: P&L: 9M13

    P&L: 9M13 09/30/12 09/30/13 Change MPS Group (*) Ins. % Net interest income 2,395.1 1,590.1 (805.0) -33.6% Net fee and commission income 1,249.9 1,252.8 2.9 0.2% Income from banking activities 3,645.0 2,842.9 (802.1) -22.0% Dividends, similar income and gains (losses) on investments 56.6 96.9 40.3 7

  23. Slide 23: Net Interest Income: a quarterly pick up

    Net Interest Income: a quarterly pick up Net Interest Income (YoY)  Up by approx. EUR 20 mln QoQ due to : -33.6%  Cost of funding effect: mainly for pricing -24.6% 2,395 like-for-like containment and remix in consumer & Basis* corporate funding 1,590  Deleverage effect: reduction of average loans

  24. Slide 24: …supported by a lower funding cost

    …supported by a lower funding cost MPS Spread* trend (%) MPS Spread Euribor 3M  Gap with peers begins to narrow (avg. lending rate – avg. deposit rate)  In 3Q13, market spread up approx. 14 bps 2.39 2.23 +14bps owing to: 1.97 1.68 1.73 1.63 1.77  reduction of 11 bps in funding rate payable both f

  25. Slide 25: Fee and Commission Income

    Fee and Commission Income Fees YoY Fees QoQ -2.1% -3.1% +0.2% 431 417 413 404 1,250 1,253 383 € mln € mln Sep-12 Sep-13 3Q12 * 4Q12 * 1Q13 2Q13 3Q13 Fees breakdown €/mln ** 3Q12 2Q13 3Q13 QoQ% YoY%  Net fee and commission income AuM fees, o/w 128 154 152 -1.4% 18.9% largely stable YoY due to the of

  26. Slide 26: Dividends and trading

    Dividends and trading Trading/valuation of financial assets QoQ  Net profit (loss) from trading / valuation / 255.1 repurchase of financial assets/liabilities totalled approximately EUR 287 mln at the end of Sep-13, down by over EUR 200 mln vs. Sep-12 120.8 when results had benefitted from the publ

  27. Slide 27: Operating Costs (1/2)

    Operating Costs (1/2) Operating Costs Operating Costs QoQ -11.4% -1.1% 822 833 2,461 746 721 714 2,181 € mln € mln 3Q12* 4Q12 * 1Q13 2Q13 3Q13 Sep-12 * Sep-13 Operating costs Operating costs per headcount (€/000) per branch (€/000)  Cost rationalisation ongoing, -11.4% YoY: -6.1% • Personnel expens

  28. Slide 28: Operating Costs (2/2)

    Operating Costs (2/2) Personnel expenses (€/mln) Admin expenses (€/mln) Amortization and Depreciation (€/mln) -10.7% -11.1% -20.8% 1,516 805 716 1,354 140 111 Sep-12* Sep-13 Sep-12 * Sep-13 Sep-12 * Sep-13 Personnel expenses QoQ (€/mln) Admin expenses QoQ (€/mln) Amortization and D.QoQ (€/mln) -8.3%

  29. Slide 29: Provisioning

    Provisioning Net loan loss provisions and Cost of Credit (bps) Cost of credit* 119 188 138 149 151  Net loan loss provisions +18.5% YoY due to trends in impaired loans. In 3Q13 loan loss 1,372 provisions dropped 6.2% owing to a higher -6.2% share of new impaired loans having a low “degree of severi

  30. Slide 30: Conclusion

    Conclusion  Bank's capital/financial rebalancing process consolidated in Q3, with consequent positive impacts on P&L  Meanwhile, rollout of Business Plan initiatives continues  Additional information on the Restructuring Plan will be disclosed once EC approval has been received page 30

  31. Slide 31: Thank you for your attention Q&A

    Thank you for your attention Q&A page 31

  32. Slide 32: Annexes

    Annexes page 32

  33. Slide 33: P&L: Quarterly figures

    P&L: Quarterly figures 2012 (*) 2013 MPS Group 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter Net interest income 882.6 788.5 724.0 434.5 597.0 486.5 506.6 Net fee and commission income 424.3 412.6 413.1 382.9 431.3 417.3 404.2 Income from banking activities 1,30

  34. Slide 34: Creation of new Sales & Marketing model

    Creation of new Sales & Marketing model Objective: Substantially increase Retail sales productivity, contributing significantly to growth of revenues  Strengthening and optimisation of marketing  Structuring of management processes and leverage (targeting, initiatives, monitoring...) sales & marke

  35. Slide 35: The new online bank project is moving forward at full speed

    The new online bank project is moving forward at full speed  Wise Dialog Internet Banking: brand selected New Bank through crowdsourcing with a public contest and presented to 1.800+ contributions the market  Presentation event with 500 qualified participants  Strong impact on social and traditio

  36. Slide 36: Asset quality overview

    Asset quality overview Impaired Loans  High-granularity of loan book with a strong (€ mln) Gross Net geographical diversification NPL 19,980 8,393 vs. Jun-13 +4.7% +5.1% 1.7% 20.7% Watchlist 9,032 7,229 20.2% vs. Jun-13 +4.7% +5.2% 12.4% Restructured 1,715 1,476 vs. Jun-13 +9.6% +11.6% Past Due 3,1

  37. Slide 37: Disclaimer

    Disclaimer Disclaimer Declaration of the Financial Reporting Officer This document has been prepared by Banca Monte dei Paschi di Siena S.p.A. solely for information purposes and for use in presentations of the its Group’s strategies and financials. The information contained herein has not been Purs

  38. Slide 38: fe DEI PASCHI

    fe DEI PASCHI I SIENA ==” BANCA DAL 1472 www.mps.it

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