Credito Emiliano S.p.a. · MIL:CE

Credito Emiliano — H1 2020 Earnings Presentation

25 slides from Credito Emiliano's earnings presentation, 2020

  1. Slide 1: Group Results 1H20

    A = GROUP RESULTS 1H20

  2. Slide 2: 1H20: Key Points

    1H20: KEY POINTS LOANS GROWTH NPL RATIO Loans to Customers Credit quality: reched €27.4 billion, best-in-class in +7.7% with a +7,7% 6.4% Italy and in line growth YoY, more with the EU than 4x compared average 3.6% 3.1% 1.9% to the Industry PROFITABILITY CAPITAL Net Profit 13.9% Capital position at

  3. Slide 3: Sustainability

    SUSTAINABILITY GOOGLE MENTIONED CREDEM CARBON DISCLOSURE PROJECT Alphabet and Google CEO, Participation to CDP, the most Sundar Pichai, mentioned important and accredited Credem as an example of reporting system, able to best practice in Smart provide ESG information and Working technology figures t

  4. Slide 4: A Growing Digital Approach

    A GROWING DIGITAL APPROACH INTERNET BANKING - 1 DIGITAL OPERATION: 4 RETAIL MIGRATION TREND  >600,000 contracts (+4.5%)  +39% of accesses  as of June 2020, more than  +24% of online operations 88% of overall transactions was carried out through digital channels (internet 2 MOBILE - RETAIL bankin

  5. Slide 5: Covid-19 Emergency, Governative Initiatives and Other

    COVID-19 EMERGENCY  PEOPLE  SERVICES During the lockdown, more than 85% of people Full service continuity with more than 99% of branches worked from home. Moreover, all people working in that remained open during the lockdown. The Group the Group were granted an insurance policy to cover remotely

  6. Slide 6: 1H20 Highlights

    1H20 HIGHLIGHTS • Excellent Loans to Customers growth, with a growth of almost €2 billion in the last 12 months (+7.7% GROWTH YoY), above 4X compared to the Industry (+1.9% YoY) • All-time high Customer Funding, with a net production of almost €3 billion, mainly driven by Direct Deposits in the seme

  7. Slide 7: Reclassified Income Statement

    RECLASSIFIED INCOME STATEMENT 2Q19 1Q20 2Q20 Δvs 2Q19 1H19 1H20 • Resilient Operating Income, Δvs 1H19 €, million ù that reached €576 million in Operating Income 299.8 298.3 278.1 -7.2% 587.2 576.4 -1.8% 1H20 (-1.8% vs 1H19) despite the «Core» Operating adverse scenario caused by the 293.6 267.7 271

  8. Slide 8: Net Interest Income (1/3)

    NET INTEREST INCOME (1/3) NET INTEREST INCOME: EVOLUTION EURIBOR AND SPREAD BTP/BUND 256 243 129 +3.8% -0.1 199 123 160 171 119 139 115 112 116 -0.2 -0.31% -0.30% -0.32% -0.3 -0.40% -0.40% -0.41% -0.4 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3 month Euribor (avg) Spread BTP vs Bund 10 yrs (bps) 1Q19 2Q19 3Q19

  9. Slide 9: Net Interest Income (2/3)

    NET INTEREST INCOME (2/3) CUSTOMER SPREAD  In 2Q20, Industry average loans rates were materially affected by the lower rates of the secured credit lines 1.99 1.97 1.92 1.90 1.91 foreseen by «Cura Italia» and «Liquidità» decree 1.84 1.82 1.82 1.75  Credem rates showed greater steadiness, partially

  10. Slide 10: Net Interest Income (3/3)

    NET INTEREST INCOME (3/3) SECURITIES’ PORTFOLIO BREAKDOWN  Securities portfolio reached €10.8 billion, 00% allowing to partially allocate the excess liquidity and, meanwhile, strengthen NII 90%  Purchases tactically targeted Italian Govies 37% 33% 36% 35% 80% 43% with 12-month maturity. As a conse

  11. Slide 11: Non Interest Margin

    NON INTEREST MARGIN Total 164.9 171.1 182.2 201.5 186.4 161.9 Performance Fees 2.7 27.8 14.5 5.6 13.1 6.2 4.1 3.7 9.3 4.4 7.0 Income from Financial 6.1 Activities 47.5 49.8 47.9 Despite the 43.8 49.2 52.4 lockdown!! Other Income 13.7 Banking Fees 13.6 10.2 14.4 17.1 12.3 Insurance Income 98.1 91.4 A

  12. Slide 12: Operating Costs and D&A

    OPERATING COSTS AND D&A OPERATING COSTS EMPLOYEES / NETWORKS -10.7% Employees 183 183 173 180 184 163 6,195 6,201 6,237 6,237 6,068 6,140 85 5,899 5,763 5,544 5,519 5,604 5,609 51.4 53.7 48.8 51.8 55.5 43.1 35 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 1H20 85 131.7 129.7 118.0 130.9 132

  13. Slide 13: Loans to Customers

    LOANS TO CUSTOMERS LOANS TO CUSTOMERS: EVOLUTION 24,000 5,444 5,699 7,119 5,328 5,362 5,332 Other Loans 20,000 Residential 7,405 7,484 16,000 6,838 7,045 7,206 7,733 Mortgage Leasing 2,594 2,681 2,656 12,000 2,546 2,601 2,710 Short-Term Loans 8,000 10,282 10,452 10,200 11,155 10,342 9,859 4,000 0 1Q

  14. Slide 14: Loans: Comparison with the Industry

    LOANS: COMPARISON WITH THE INDUSTRY LOANS TO CUSTOMERS GROWTH* MARKET SHARES** EVOLUTION +7.7% YoY 1.89% 1.86% 1.9% 1.79%1.78% Industry 1.77% 140 Credem 1.66% +48% 1.58% 130 1.6% 1.48% 120 1.28% 110 1.3% 1.20% 1.16% MS on Performing Loans 100 1.07% 1.9% YoY 90 1.0% 2010 2011 2012 2013 2014 2015 2016

  15. Slide 15: Group Customers Funding: Net Inflows Breakdown

    GROUP CUSTOMERS FUNDING: NET INFLOWS BREAKDOWN 2,961 AUC Direct Deposits AUM + Insurance 2,000 1,945 Total Net Inflows 1,666 1,783 1,268 972 910 1,193 434 491 462 517 570 446 343 118 214 -82 -35 1H16 1H17 1H18 1H19 1H20 1H16 1H17 1H18 1H19 1H20 • 1H20 Net Inflows were all-time high, reaching almost

  16. Slide 16: Deposits, AUM and Insurance

    DEPOSITS, AUM AND INSURANCE • Strong expansion of Direct Deposits, that were €, million 2019 1Q20 1H20 up +6.4% YTD and +16.0% YoY Slight / Saving Depo. 25,825 26,868 27,456 • Excellent recovery of AUM, that only in 2Q20 grew by €2.6 billion, thanks to a strong CD and Other Deposit 482 468 525 incre

  17. Slide 17: Bonds Issuances and Maturities

    BONDS ISSUANCES AND MATURITIES ISSUANCES MATURITIES Wholesale Retail Covered Bond 1,000 2,000 800 500: SNP 365 750: CB 500 SNP 1,500 600 1,407 1,473 1,000 400 750 750 1,500 549 1,250 500 Tier 2 Covered 500 938 200 Bond 600 38 312 523 249 50 100 100 - 50 100 - 2010 2011 2012 2013 2014 2015 2016 2017

  18. Slide 18: Credit Quality: Gross NPL Ratio

    CREDIT QUALITY: GROSS NPL RATIO GROSS NON PERFORMING LOANS 900 707 2018 578 532 600 2019 413 399 406 1H20 Disposal 300 ~€90 mln Disposal New DoD ~€40 mln 34 49 67 effect 0 Gross Bad Loans Gross UTP Loans Gross Past Due Loans % on Loans (Credem) 2.7 2.1 1.9 1.6 1.5 1.5 0.1 0.2 0.2 % on Loans (Industr

  19. Slide 19: NPL: Accounting Coverage

    NPL: ACCOUNTING COVERAGE NET NON PERFORMING LOANS  Net NPL were €497 million and were slightly €,million 2018 2019 1H20 0 up vs 2019 as a mere consequence of the Net Bad Loans 232.6 174.6 161.3 new “Definition of Default” regulation. NPL coverage were 50.6% after the Bad Loans Net UTP Loans 300.2 2

  20. Slide 20: Comprehensive Coverage

    COMPREHENSIVE COVERAGE Coverage NPL Gross Net Coverage Shortfall* incl. Shortfall Bad Loans 532.3 161.3 69.7% 95.2 87.6% +496.8 + Net NPL UTP Loans 406.1 279.9 31.1% 20.8 36.2% - Shortfall - 117.5 = NPL net of Shortfall 379.3 Total NPL (1H20) 1,005.3 496.8 50.6% 117.5 62.3% PERFORMING LOANS COVERAGE

  21. Slide 21: Cost of Risk

    COST OF RISK 68 59 55 58 52 42 44 48 39 31 32 34 38 47 45 39 41 24 24 24 28 34 30 18 27 20 21 13 17 8 15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 1H20 Cost of risk Cost of risk (net of non-recurring items) COST OF RISK: HISTORY • 1H20 Cost of Risk was 39 bps, well below 80 the average

  22. Slide 22: Assets & Liabilities

    ASSETS & LIABILITIES ASSETS 27,421  In June, the Group increased 26,181 1Q20 its TLTRO III exposure 12,000 1H20 reaching the maximum “take-up” (€7.1 billion) 7,371 7,021 5,623 4,784  Loans to customers grew by 4,986 5,067 3,786 3,684 6,000 +€1.2 billion in 2Q20, also driven by the distribution of

  23. Slide 23: Liquidity Ratios

    LIQUIDITY RATIOS NSFR LCR 199% 186% 125% 127% 180% 172% 121% 150% 120% 90% 2018 2019 1H20E 2018 2019 1H20E 1.30 1.25 LOAN TO DEPOSIT RATIO*  Both NSFR and LCR ratios were well above 1.20 1.15 1.10 minimum regulatory requirements. In 1.05 0.97 1.00 0.95 0.91 0.89 particular, the high NSFR level enab

  24. Slide 24: Consolidated Capital Ratios

    CONSOLIDATED CAPITAL RATIOS CAPITAL AND CAPITAL RATIOS CET1 RATIO (CREDEMHOLDING)* Banking Group Credemholding 15.0% 2,100 13.9% €, million 2019 1H20 2018 2019 1H20 14.0% 1,900 13.5% CET 1 2,220 2,334 1,782 2,039 2,110 1,700 13.3% Total Capital 2,567 2,482 2,093 2,339 2,306 13.0% 12.7% 1,500 Capital

  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 S.p.A. (Credem) — H1 2020 Earnings Presentation on 6ix