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

Banca Monte Dei Paschi Di Siena — Q1 2014 Earnings Presentation

37 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, May 12, 2014

  1. Slide 1: 1Q2014 GMPS Results

    1Q2014 GMPS Results Fabrizio Viola CEO & General Manager Bernardo Mingrone Deputy General Manager, Head of Finance & Operations Siena, 12th May 2014

  2. Slide 2: Disclaimers

    Disclaimers 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 independently verified. No representation or warranty, expres

  3. Slide 3: Contents

    Contents  Key messages  1Q14 Results - Balance sheet  1Q14 Results - P&L  Final Remarks  Annexes page 3

  4. Slide 4: Core business gaining momentum

    Core business gaining momentum 1 Net interest income (net of one-off components) continues to grow: +4.3% QoQ thanks to lower cost of funding and notwithstanding lower number of days 2 Strong increase in fees and commissions (+10% QoQ) mainly thanks to savings component 3 Cost reduction continues bo

  5. Slide 5: Core Net interest income continues to grow

    1 Core Net interest income* continues to grow Net Interest Income (€/mln) +16.1% +4.3% 598 589 564 507 ca.-11 ca.-10 ca.+10 ca.+48 ca. -12 563 ca.+57 ca. -143 1Q13 3Q13 Cost of funding Deleverage Other 4Q13 Cost of funding Deleverage "Calendar" 1Q14 Cost related to Effect Effect Effects Effect Effec

  6. Slide 6: Strong increase in fees and commissions

    2 Strong increase in fees and commissions Fees (€/mln) +10.0% 445 431 -0.8 +3.1 +5.9 405 +32.2 1Q13 4Q13 AM Fees Insurance Credit facilities Other* 1Q14  Strong increase in fees & commissions thanks to:  business model redesign and a proactive sales approach (indirect funding +EUR 1.9bn vs Dec-13)

  7. Slide 7: Cost reduction continues

    3 Cost reduction continues Operating Costs trend (€/mln) -3.8% 729 705 697 686 661 1Q13 2Q13 3Q13 4Q13 1Q14 Cost/Income* 57.9% 54.2% 50% 1Q13 1Q14 Target BP 2017 * Excluding cost related to NFIs (coupon and price adjustment) and cost of State guarantee on Monti bonds page 7

  8. Slide 8: LTRO reimbursement plan underway and upward trend in total funding

    LTRO reimbursement plan underway and 4 upward trend in total funding Total Funding (€/bn) New current accounts (#) +0.4% 21,000 233 234 -28,300 2013 Mar-14 Dec-13 Mar-14 LTRO evolution (€/bn) Unencumbered counterbalancing capacity (€/bn) on Total Assets 6.5% 8.1% 10.5% 12.9%* 29 28 28 24 25.8 21.1 1

  9. Slide 9: New impaired loans down 30% from 4Q13

    5 New impaired loans down 30% from 4Q13 Gross Impaired loans*: delta stock (€/bn) -18.7% ~-30% 2.1 1.7 1.8 1.5 2012 1Q13 4Q13 1Q14 Quarterly of which Avg € mln ~-150 ~-600 NPL Watchlist * NPL, Watchlist, Restructured and Past due page 9

  10. Slide 10: Contents

    Contents  Key messages  1Q14 Results - Balance sheet  1Q14 Results - P&L  Final Remarks  Annexes page 10

  11. Slide 11: Assets & Liabilities trend

    Assets & Liabilities trend Total Assets*  Customer loans up QoQ due to increase in repos with €/mln Mar-13 Dec-13 Mar-14 QoQ% YoY% institutional counterparties, on Customer loans 140,510 130,598 132,677 1.6% -5.6% which temporary surpluses of liquidity (ahead of reimbursement Loans to banks 13,676

  12. Slide 12: Direct funding optimization

    Direct funding optimization Direct funding by Source €/mln Mar-13 Dec-13 * Mar-14 QoQ% YoY%  Direct funding substantially Current accounts 52,892 55,076 56,912 3.3% 7.6% stable vs. Dec-13 (-0.8% QoQ) Time deposits 8,324 8,003 8,709 8.8% 4.6% thanks to current accounts Repos 16,482 16,096 13,749 -14

  13. Slide 13: AuM/AuC: growing momentum

    AuM/AuC: growing momentum AuM/AuC  Indirect funding was up 1.8% vs 4Q13: €/mln Mar-13 Dec-13 Mar-14 QoQ% YoY%  Assets under management increase 3.4% QoQ: Assets under 66,695 58,292 58,617 0.6% -12.1% o Mutual fund increases +6.6% QoQ, due to custody Assets under positive flows (also thanks to Anim

  14. Slide 14: LTRO reimbursement plan underway

    LTRO reimbursement plan underway LTROs (€/bn) 29 28 28 24 14 0 Sep-13 Dec-13 Mar-14 Apr-14 Dec-14E Feb-15E Repayment 1 4 4 6 14 €/bn Oct-13 Apr-14 May/Jun-14 Jul/Dec-14 Jan/Feb-15 Sources:  On the basis of prevailing market conditions and most convenient sources of funding for the Bank at that time

  15. Slide 15: Lending: selected deleverage

    Lending: selected deleverage Total Lending  Loans to customers down 5.6% YoY due €/mln Mar-13 Dec-13* Mar-14 QoQ% YoY% to the prolonged macroeconomic downturn Current accounts 12,626 10,953 11,404 4.1% -9.7% and Group’s more selective credit policies Mortgages 70,515 64,757 62,966 -2.8% -10.7%  Cu

  16. Slide 16: Financial Assets and Equity investments

    Financial Assets and Equity investments Securities and Derivatives Portfolio  Portfolio down 4.4% YoY, mainly in the AFS component, Market as a result of ongoing optimization activities Value Mar-14 QoQ% YoY%  Portfolio increased 2.1% QoQ: (€mln)  HFT: up as a result of temporary purchase of HFT

  17. Slide 17: RWAs, Capital Ratios and AFS reserve

    RWAs, Capital Ratios and AFS reserve RWAs over time  Ongoing optimization of RWAs (EUR 81.1bn as at Mar-14) mainly driven by a significant reduction in credit and counterparty risk -1.6%  CET1 ratio phased-in at 10.8% in line with 84.5 82.4 restated 2013 CET1 for BIS3 81.1  AFS reserve at Mar-14

  18. Slide 18: Contents

    Contents  Key messages  1Q14 Results - Balance sheet  1Q14 Results - P&L  Final Remarks  Annexes page 18

  19. Slide 19: P&L 1Q14

    P&L 1Q14 Change Change 1Q13* 4Q13 1Q14 (QoQ %) (YoY %) € mln Net Interest Income 597.7 564.0 445.8** -21.0 -25.4 o/w: NFI coupon -60.9 -94.6 -94.6 o/w: NFI price adjustment -142.6 Net Fees 431.3 404.8 445.2 +10.0 +3.2 o/w: Monti Bond cost -25.3 -25.9 -25.3 Basic income 1,029.0 968.8 891.0 -8.0 -13.4

  20. Slide 20: Net Interest Income: structural quarterly increase

    Net Interest Income: structural quarterly increase Net Interest Income* (YoY)  The following factors contributed to the NII result:  Cost of funding effect: mainly from improved MPS credit spread 598 588  Deleverage effect: reduction in average loans both for the network and product companies mor

  21. Slide 21: Focus on cost of funding

    Focus on cost of funding MPS 5Y CDS evolution* Retail Bonds (cumulative) 750 Average rate on 2.9 retail bonds 2.7 issued in the 2.7 quarter (%) 550 191bps as at 2.2 6,908 2.1 30 Apr-14 1.9 350 3,652 1,930 2,370 873 1,162 150 € mln 2012 1Q13 1H13 9M13 2013 1Q14 Senior Spread Covered Bond Spread  In

  22. Slide 22: Fee and Commission Income

    Fee and Commission Income Fees YoY Fees QoQ +10.0% +3.2% 445 431 417 431 445 404 405 € mln € mln Mar-13 Mar-14 1Q13 2Q13 3Q13 4Q13 1Q14 Breakdown 1Q14 vs 1Q14 vs €/mln 1Q13 4Q13 1Q14 4Q13 (%) 1Q13 (%)  Net fees and commissions pick AuM fees, o/w 159 152 187 23.3% 17.6% up significantly, +10.0% QoQ

  23. Slide 23: Dividends and trading

    Dividends and trading Trading*/valuation of financial assets QoQ  Net profit (loss) from trading / valuation / 119.5 repurchase of financial assets/liabilities 89.6 totalled approx. EUR 45 mln and included: 76.5 45.1  Net profit from trading amounting to EUR € mln -271.6 43.8 mln (vs. -EUR 114.8 m

  24. Slide 24: Operating Costs

    Operating Costs Total Costs (YoY % growth) Operating Costs* QoQ -9.4% -3.8% 729 705 697 686 661 -8.3% € mln -9.4% 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 1Q14 Personnel expenses* (€/mln) Admin expenses* (€/mln) -5.2% Due to 4Q13 non -22.9% recurring +3.6% items -19.4% 453 423 429 429 414 237 246 230 227 183 1

  25. Slide 25: Provisioning

    Provisioning Net loan loss provisions and Cost of Credit (bps) Annualized  Net loan loss provisions down by EUR cost 140 149 151 211 144 of credit 733 mln vs. the previous quarter and slightly below 1Q13 (-1.6% YoY) 1,253  Cost of credit is still high on account of the prolonged macroeconomic down

  26. Slide 26: Coverage ratios

    Coverage ratios Impaired Loans Coverage +120bps  Impaired loans coverage stable at 2013 year- end levels: 41.6% -20bps  Specifically: 41.8% 41.6%  NPL coverage: -30bps QoQ and +70bps 40.4% YoY  Watchlist coverage: +30bps QoQ, -20bps Mar-13 Dec-13 Mar-14 NPL Coverage Watchlist Coverage +70bps -20

  27. Slide 27: Contents

    Contents  Key messages  1Q14 Results - Balance sheet  1Q14 Results - P&L  Final Remarks  Annexes page 27

  28. Slide 28: Sales productivity increases also thanks to Progetto Regata

    Sales productivity increases also thanks to Progetto Regata Network Sales productivity  The results of the Pilot show a positive Change % Per impact on the P&L Volumes Per Employee 1Q14 vs. 1Q13 Branch  First Regata Area (Wave 1) increased YoY Current Accounts net Adds +20% +32% +35% revenues grow

  29. Slide 29: Cost Optimization Update

    Cost Optimization Update Personnel Gross Savings on Other Admin Expenses 8,000 2,700 434 164 ~1,100 4,200 150 20 100 2017 Target 2012 and 2013 1Q14 Exits In progress 2017 Achieved in To be To be In progress Exits (Fruendo) Target 2013 achieved in achieved in 2014* 2015* Personnel Cost and Admin. Exp

  30. Slide 30: Capital increase update

    Capital increase update Events Potential upside  MPS will benefit from a sizeable capital buffer to absorb  BoD approved potential negative impacts arising from the Comprehensive upsizing of the capital Assessment increase to EUR 5bn  The larger capital increase would allow BMPS to accelerate  T

  31. Slide 31: Benchmarking ahead of AQR and Stress Test

    Benchmarking ahead of AQR and Stress Test L3/Total Assets Impaired loans/NPL Coverage Italian govies**/Assets Impaired Loans NPL Coverage Coverage 58.8% 52.4% 14.4% 0.83% 13% 41.8% 37.4% 0.35% Top 6 IT Banks* MPS Top 6 IT Banks* MPS Top 6 IT Bank* MPS  Over plan period, average buffer (post tax) fo

  32. Slide 32: Final remarks

    Final remarks  1Q14 results show very good core top line growth momentum  Growing customer acquisition trend with a renewed drive on deposits  Enhanced capital position ahead of asset quality review and stress test  Ongoing restructuring is accelerating MPS Business Plan targets page 32

  33. Slide 33: Thank you for your attention Q&A

    Thank you for your attention Q&A page 33

  34. Slide 34: Annexes

    Annexes page 34

  35. Slide 35: P&L: Quarterly trend

    P&L: Quarterly trend 2013 (*) 2014 MPS Group 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter Net interest income 597.7 487.2 507.3 564.0 445.8 (**) Net fee and commission income 431.3 417.3 404.2 404.8 445.2 Income from banking activities 1,029.0 904.4 911.5 968.8 891.0 Dividends, simila

  36. Slide 36: Asset quality overview

    Asset quality overview Impaired Loans as at Mar-14 (€ mln) Gross QoQ (%) YoY (%) Net QoQ (%) YoY (%) NPL 22,498 +4.4 +23.8 9,332 +5.1 +21.9 Watchlist 9,688 +2.6 +17.3 7,685 +2.3 +17.5 Restructured 2,081 +9.2 +29.7 1,843 +9.5 +34.1 Past Due 3,272 +4.4 -1.3 3,065 +5.0 -1.5 Total 37,538 +4.2 +19.7 21,9

  37. Slide 37: fe DEI PASCHI

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

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