Banca Mediolanum Spa · MIL:BMED
Banca Mediolanum Spa — Debt Investor Presentation (November 2022)
48 slides from Banca Mediolanum Spa's debt investor presentation, November 2022
Slide 1: Fixed Income Investor Presentation - Inaugural Green Senior Preferred
Fixed Income Investor Presentation Inaugural Green Senior Preferred - November 2022
Slide 2: Banca Mediolanum's Team
2 Banca Mediolanum’s Team Top Management Massimo Antonio Doris Gianluca Bosisio Angelo Lietti Chief Executive Officer General Manager Chief Financial Officer ● 26 years of ● 34 years of ● 34 years of experience experience experience ● 23 years in ● 23 years in ● 34 years in Mediolanum Mediolanum Med
Slide 3: Executive Summary (1/2)
3 Executive Summary (1/2) Inaugural Green Senior Preferred ● Intended Transaction o Issuer Banca Mediolanum (or “Mediolanum") rated BBB (stable) / BBB (stable) by S&P / Fitch o [4NC3] Fixed Rate Senior Preferred o Expected Issue Ratings BBB / BBB by S&P / Fitch o RegS Bearer format o Green Use of Pr
Slide 4: Executive Summary (2/2)
4 Executive Summary (2/2) Inaugural Green Senior Preferred ● The balance sheet structure is solid and simple (loans to deposit ratio at 62%), liquidity is above average (LCR at 335%) Balance Sheet and the funding is mainly geared on customers deposits (NSFR at 181%) ● Credit Book amounting to € 15.8
Slide 5: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 6: Indicative T&C for the Inaugural Green Senior Preferred
6 Indicative T&C for the Inaugural Green Senior Preferred Issuer • Banca Mediolanum S.p.A. Issuer Ratings • BBB (stable) / BBB (stable) by S&P / Fitch Expected Issue Ratings • BBB / BBB by S&P / Fitch Status of the Notes • Senior, direct, unconditional, unsubordinated and unsecured Format • RegS, TE
Slide 7: Transaction Rationale (1/2)
7 Transaction Rationale (1/2) FY 2021 Current and Prospect MREL Position Group Already compliant with fully Loaded MREL requirement (2024) Current buffer over Fully Loaded RWA based requirement of € 56 mn (0.46% Q322 RWAs) and over Fully Loaded Leverage based requirement of € 178 mn (0.41% Q322 Leve
Slide 8: Transaction Rationale (2/2)
8 Transaction Rationale (2/2) Preliminary Overview of the Green and Social Eligible Portfolio ● The assets depicted below are an indicative representation of a portion of the eligible categories identified as of 30 June 2022 on Mediolanum’s balance sheet ● All these assets are i) performing ii) loca
Slide 9: Credit Ratings
9 Credit Ratings ● On July 13th 2022, Banca Mediolanum announced its inaugural credit ratings ● The BBB level achieved on the long term ratings by S&P and Fitch represents the maximum level achievable by an Italian bank and are in line with the Republic of Italy and the National Champions operating
Slide 10: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 11: Banca Mediolanum at a Glance
11 Banca Mediolanum at a Glance ● Italian Asset Gatherer addressing Italian & Spanish retail markets ● Vertically integrated to fully control the value chain (manufacturer & distributor) ● Offering all kind of financial services to customers (banking, investing, insurance) ● Multi-channel platform &
Slide 12: History and Evolution of the Group
12 History and Evolution of the Group 40 years of successes 2022 Banca Mediolanum 1. Obtained inaugural credit ratings at BBB by both S&P 1982 2020 and Fitch 1996 2006 2013 2017 2. Established an EMTN Ennio Doris 2001 Banca Mediolanum 1998 Change from Mediolanum founds Mediolanum Mediolanum Programm
Slide 13: Products, Producers and Distributors
13 Products, Producers and Distributors Products Description Producers Distributors Banking and consumer products, to BANKING AND CONSUMER support clients needs: current accounts, Banca Mediolanum S.p.A., Banco credit/debit cards, lending/mortgages, Mediolanum S.p.A., Prexta S.p.A. consumer/personal
Slide 14: Business Results Highlights
14 Business Results Highlights FY 2021 € bn Group 9M2022 FY2021 9M2021 FY2020 FY2019 Total Net Inflows 5.62 9.18 6.43 7.72 4.06 Net Inflows into Managed Assets 4.23 6.66 4.63 4.11 2.95 Total AUA/AUM 99.90 108.36 104.00 93.35 84.72 Loans Granted 2.88 3.90 2.85 3.05 2.67 Credit Book 15.88 14.38 13.76
Slide 15: Economic & Financial Highlights
15 Economic & Financial Highlights FY 2021 € mn Group 9M2022 FY2021 9M2021 FY2020 FY2019 Net Commission Income 762.3 959.1 718.8 844.1 835.7 Net Interest Income 253.0 270.2 197.2 247.7 239.0 Contribution Margin 1,010.6 1,235.0 903.8 1,067.0 1,080.2 Operating Margin 474.6 502.6 379.0 389.5 430.9 Mark
Slide 16: Focus on Commission Income
16 Focus on Commission Income Commission Income By Business Line - 9M 2022 835.7 844.1 959.1 762.3 0.8% Asset Management Active Commissions 0.4% Passive Commissions 0.9% 7.5% Insurance Banking 1,765.8 1,460.1 1,506.9 49.9% 1,336.0 Other 40.5% Spain -624.4 -662.8 -573.8 -806.7 Germany 2019 2020 2021
Slide 17: Focus on Contribution Margin
17 Focus on Contribution Margin Contribution Margin By Business Line - 9M 2022 1,080.2 1,067.0 1,232.9 1,010.6 0.4% Asset Management Net Interest Income 0.5% Net Commission Income 8.5% Insurance Other 270.2 33.5% Banking 239 247.7 23.5% 253.0 Other 959.1 835.7 844.1 Spain 762.3 33.5% Germany 2019 20
Slide 18: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 19: Balance Sheet Structure
FY 2021 19 Balance Sheet Structure Group ● Solid and simple balance sheet structure Balance sheet structure Banking Group 9M 2022 ● Bond portfolio almost entirely composed of Govies € mn 41,595 41,595 ● Loans to customer mainly retail mortgages Cash 2,531 ● Above average liquidity position Financial
Slide 20: Banking Book Composition
20 Banking Book Composition € bn – nominal values – as at 30/09/2022 Banking Book: € 17.4 bn (nom. values) Rate Type Sector % 41.0% Government 99.5% Fixed Floating Financial 0.5% 59.0% Govies % Italy 99.3% Over €10 bn of floaters directly linked to Spain 0.7% EUR6M and benefiting from rate increase
Slide 21: Credit Book Trend
21 Credit Book Trend € mn Credit Book Trend 15,879 Salary-Backed Loans (Prexta) Lines of credit Personal Loans 14,380 Mortgages 12,139 10,354 2019 2020 2021 9M 2022
Slide 22: Asset Quality
22 Asset Quality Group asset quality overview (1/2) ● Best in class asset Group Asset Quality evolution quality, far better than Italian banking system ● Constant ratios over the years 1.35% ● Never did an NPL 1.31% 1.30% 1.18% disposal 0.74% 0.71% 0.67% 0.57% 0.18% 0.16% 0.15% 0.10% 2019 2020 2021
Slide 23: Asset Quality
23 Asset Quality Group asset quality overview (2/2) ● Limited non-performing Gross NPEs breakdown exposures with declining share of bad loans in the period ‘18- 3.50% ’21 52% 53.00% ● FY21 Gross NPEs ratio 3.00% 49% 49% 46% 46% 46% 2.50% 43.00% better than European average 2.00% (1.35% vs 2.0%*) 33.
Slide 24: Funding Overview
FY 2021 24 Funding Overview Group 1.4% 1.4% 1.4% 3.5% 1.2%3.1% 2.8% Other 18.7% 10.9% 20.1% 0.6% 25.1% 1.4% Funding mix, % Debt Securities 0.9% 0.3% TLTRO Repo 78.5% 83.6% 74.6% 70.4% Time Deposits Customer Deposits 2019 2020 2021 9M2022 € mn 2019 2020 2021 9M 2022 Total Funding 24,095 26,772 33,510
Slide 25: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 26: Capital Adequacy
26 Capital Adequacy 9M2022 FY 2021 FY 2020 FY 2019 CET1 ratio 20.7% 20.9% 20.4% 19.5% Risk-weighted assets (€ 12,044 11,274 9,810 9,388 mn) Leverage ratio 5.7% 6.0% 6.3% 6.4% Loan to deposit ratio 62% 58% 54% 55% *Dividend considered in CET1 calculation
Slide 27: Regulatory Requirements
27 Regulatory Requirements ● Banca Mediolanum’s capital level SREP Capital Requirements and MDA strongly exceeds minimum regulatory requirements 20.73% ● As of September 2022, the buffer versus CET1 SREP (including guidance) is 1,248 bps +838 bps 12.35% T2 2.34% +1,248 bps CET1 20.73% AT1 1.76% P2G
Slide 28: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 29: Sustainability Governance
29 Sustainability Governance «BMED is committed to create stakeholder value through ethical & sustainable business practices, with the aim of having an ongoing positive impact on society» Innovability & Value ESG Commission GSS Bond Framework Strategy Department • Director of Investment Commission •
Slide 30: Stakeholders' Engagement
30 Stakeholders’ Engagement ESG aspects rooted in Banca Mediolanum DNA since years ● BMED strives to act responsibly and has always been a people-centered bank Response to the Covid-19 emergency: In 2008, approximately 1% of BMED customers held • Suspended the repayments on outstanding loans Lehman
Slide 31: Materiality Matrix
31 Materiality Matrix Economic Responsibility Responsibility to Customers Responsibility to Employees Responsibility to Community & Environment
Slide 32: Official Commitments and Voluntary Pledges
32 Official Commitments and Voluntary Pledges ● BMED is committed to help create a better life for the community at large by focusing on people and on the planet, in all its decisions and strategies. ● BMED organises and participates in various social, cultural and sporting activities in order to pr
Slide 33: ESG Indices and Ratings
33 ESG Indices and Ratings ● Euronext MIB ESG Component ● MSCI ESG Rating: AAA AA A BBB BB B CCC ● ESG S&P Global: 100 52 0 ● CDP: A A- B B- C C- D D- ● FTSE Russel: 5 4 3 2.5 2 1 0 ● Vigeo Eiris: 100 51 0 ● Standard Ethics: EEE EEE- EE+ EE LONG TERM EE- E+ E E- F
Slide 34: ESG Products Offered by the Group
34 ESG Products Offered by the Group ● BMED has a long standing ESG product offering - with the launch of first ‘ad hoc’ funds in 2015 – that is gaining more and more momentum ● Over € 8 bn of ESG AUM, 12% of total MF AUM as at 9M22, 47% of 9M22 Net Inflows 9M 2022 AUM ● 7 Captive Sustainable Mutual
Slide 35: ESG Products Offered in detail (1/2)
35 ESG Products Offered in detail (1/2) Mediolanum Best Brands Energy Transition Fund by Mediolanum International Funds Mediolanum Flessibile Futuro Sostenibile by Mediolanum Gestione Fondi SGR p.A. LTD (Article 9 of EU Regulation 2019/2088): global equity fund established in 2022 (Article 8 of EU R
Slide 36: ESG Products Offered in detail (2/2)
36 ESG Products Offered in detail (2/2) Mutuo Mediolanum Fondo di Garanzia Prima Casa: In December 2021, BMED joined Hipoteca Freedom Green: Banco Mediolanum's mortgage dedicated to top the Fondo Prima Casa of Consap, a state-guaranteed fund dedicated to the customers for the purchase of high-energy
Slide 37: ESG Product Offer Rating Model
37 ESG Product Offer Rating Model ● Asset Management products rated by a third-party provider, MSCI ESG Research: ● 100% of captive mutual fund AUM rated, o/w 99.95% scored ‘Leaders’ or ‘Average’ ● Rest of the offer: created together with Cattolica University - a pioneering ESG rating model which al
Slide 38: ESG Risk Management Overview and Framework
38 ESG Risk Management Overview and Framework – D. Lgs. 254/16 Responsible Business Code of Ethics Risk of corruption within company Organisational, Management Fight against operations deriving from non and Control Model pursuant ● During 2021, the process of identification, evaluation and complianc
Slide 39: Diversity and Inclusion
39 Diversity and Inclusion ● BMED is committed to valuing diversity and equal opportunities within its workforce, following and promoting the principles of merit and competence, in line with the Group’s values ● At the same time, differences in competencies, skills, cultural & social backgrounds and
Slide 40: Flowe – A Better Being «Plat-firm»
40 Flowe – A Better Being «Plat-firm» ● Flowe, launched in 2020, is Banca Mediolanum e-money platform dedicated to younger customers (677k users) ● Being a benefit company Flowe targets not only profitability objectives, but also broader purposes in order to create a positive impact on the ● Certifi
Slide 41: Agenda
Agenda 1 Inaugural Green Senior Preferred Transaction 2 Banca Mediolanum at a Glance 3 Balance Sheet Overview 4 Regulatory Capital 5 Sustainability at Mediolanum 6 Green, Social and Sustainability Bond Framework
Slide 42: Green, Social and Sustainability Bond Framework
42 Green, Social and Sustainability Bond Framework ● With the release of its Green, Social and Sustainability Bond Framework (the “GSS Framework”), Mediolanum equips itself with a sustainable financing tool that acknowledges the pivotal role financial markets play in tackling climate change and ensu
Slide 43: I. Use of Proceeds
43 I. Use of Proceeds ● Six Eligible Categories have been identified by Mediolanum reflecting its actual lending products offering ● Energy efficiency class A / B or belonging to the top 15% in Italy in terms of most carbon-efficient buildings ● PED at least 10% lower than the threshold set for the
Slide 44: II. Process for Project Evaluation and Selection
44 II. Process for Project Evaluation and Selection ● The process for evaluation and selection of the Eligible green and social Assets is as follows: 2. The GSS Bond Framework Commission – 3. The final decision on the allocation of an internal cross-functional platform the bond proceeds to the desig
Slide 45: III. Management of Proceeds
45 III. Management of Proceeds ● An amount equivalent to the Green, Social and Sustainability Bond net proceeds will be allocated to disbursement for the portfolio of Eligible Assets. The proceeds raised through Green, Social and Sustainability Bond transactions are managed on an aggregated basis (i
Slide 46: IV. Reporting
46 IV. Reporting Allocation report will be published every one year from the date of issuance of each GSS Bond until the full allocation of the proceeds: ● the total amount of Green, Social and Sustainability Bonds net proceeds raised ● breakdown of total amount of Eligible Assets per category throu
Slide 47: V. External Review
47 V. External Review Second Party Opinion ● BMED has engaged ISS ESG to provide its opinion on the alignment of its Framework with the latest ICMA’s Principles and Guidelines ● Moreover, ISS ESG expressed positive views on BMED sustainability quality of the Selection criteria, as the UoP will have
Slide 48: Disclaimer
48 Disclaimer This document has been prepared by Banca Mediolanum S.p.A. for the sole purpose of providing information and presenting the Group’s strategies. The information, opinions, valuations and forecasts it contains have not been audited by any independent body; they may be altered at any time
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