Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — Investor Day (May 2023)
92 slides from Mediobanca - Banca Di Credito Finanziario's investor day presentation, May 24, 2023
Slide 1: Strategic Guidelines FY 2023-26 – One Brand, One Culture
STRATEGIC GUIDELINES FY 2023-26 MEDIOBANCA ONE BRAND – ONE CULTURE Milan, 24 May 2023
Slide 2: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 3: A story of distinctiveness, growth and value
MEDIOBANCA A STORY OF DISTINCTIVNESS, GROWTH AND VALUE Executive summary Section 1 In the past decade Mediobanca has always delivered on its strategy and targets, growing and reshaping over time, with robust revenue growth and attractive, higher-than-industry returns Mediobanca’s mission today is to
Slide 4: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 5: In last 10Y we have upscaled the Group significantly
IN LAST 10Y WE HAVE UPSCALED THE GROUP SIGNIFICANTLY… REVENUES, PROFITABILITY AND REMUNERATION CONSISTENTLY INCREASING STRATEGIES AND TARGETS DELIVERED AT ALL TIMES Group ambitions & targets Section 2 BP 2013-16 BP 2016-19 BP 2019-23¹ Mediobanca: from Holding Mediobanca as Mediobanca as Company to B
Slide 6: Doubling our revenues
DOUBLING OUR REVENUES ... GROWTH DELIVERED IN ALL MACRO SCENARIOS AND DESPITE CRISIS Group ambitions & targets Section 2 End of Sovereign crisis Ukraine War Covid-19 Quantitative Easing Monetary tightening Pandemic Negative interest rates Positive interest rates 3,500 Revenues trend (€bn) 3.2 BP19-2
Slide 7: Increasing our earnings, profitability and capital
INCREASING OUR EARNINGS, PROFITABILITY AND CAPITAL … Group ambitions & targets Section 2 CET1 ratios, ROTE and EPS trend (%, €) 30% ~1.15 0.93 1 25% 0.69 ~12% 0.5 0.281 20% 10% 0 BP19-23 Group targets 7% 4Y KPI BP23T FY23E CAGR -0.5 15% 4% 15.8% 10% 11.7% 12.1% 14.1% -1 EPS €1.10 +4% ~1.15✓ ~12% ✓ -
Slide 8: Offering strong returns to our shareholders
OFFERING STRONG RETURNS TO OUR SHAREHOLDERS ... Group ambitions & targets Section 2 Shareholder remuneration trend (€bn) Tot distributed €2.2bn TBVPS1 trend (€) 120% BP19-13 60% Avg Pay-out 100% Tot distributed €1.3bn 0.8 80% BP16-19 >40% 53% 0.2 Avg Pay-out Tot distributed €0.5bn 60% 0.6 11 BP13-16
Slide 9: Outperforming the sector in financial results and stock performance
OUTPERFORMING THE SECTOR IN TERMS OF FINANCIAL RESULTS AND STOCK MARKET PERFORMANCE (TSR 216%)… Group ambitions & targets Section 2 Last 10Y performance MEDIOBANCA ITALIAN BANKS1 avg EUROPEAN BANKS1 avg Revenues (10Y CAGR2) +7% +1% +2% Net interest income / fees (10Y CAGR2) +6% / +7% 0% / +2% +2% /
Slide 10: Improving the effectiveness of our business model
AND IMPROVING THE EFFECTIVNESS OF OUR BUSINESS MODEL FOLLOWING TEN YEARS OF GROWTH AND RESHAPING Group ambitions & targets Section 2 MEDIOBANCA AS THE “GO-TO” BANK FOR ENTREPRENEURS AND CORPORATES Top positioning as Italian Private Investment Bank Leading offering in terms of value added, sophistica
Slide 11: What's next: a pre-eminent Wealth Manager
WHAT’S NEXT: A PRE-EMINENT WEALTH MANAGER POWERED BY ONE BRAND – ONE CULTURE Group ambitions & targets Section 2 MEDIOBANCA: ONE BRAND – ONE CULTURE WHERE SOPHISTICATED APPROACH IS ORDINARY BUSINESS Mediobanca will be a leading player for high-value, high-end, complex operations, executed effectivel
Slide 12: BP23-26 Roadmap
BP23-26 ROADMAP Group ambitions & targets Section 2 ▪ Closing the size gap with current Italian top asset gatherers Pre-eminent Wealth ▪ Capturing the full potential of its unique positioning with HNWI/UHNWI clients Manager leveraging PIB ▪ Repositioning and rebranding of the Premier segment model w
Slide 13: Playing to our strengths and enablers
PLAYING TO OUR STRENGTHS AND ENABLERS… Group ambitions & targets Section 2 WM CIB CF Affirm Mediobanca ONE BRAND – ONE CULTURE Affirm Compass digital leadership Leverage unique PRIVATE & INVESTMENT BANK model Obtain multichannel distribution SCALE service model SCALE franchise SCALE franchise toward
Slide 14: Delivering strong and capital efficient growth
DELIVERING STRONG AND CAPITAL EFFICIENT GROWTH … Group ambitions & targets Section 2 Growing TFAs RWAs flat Growing revenues with improving mix Sound growth & optimization with K-light share² up to ~50% (Group TFAs, €bn, %) (Group RWAs, €bn) (Group revenues, €bn) +11%¹ Flat +6%¹ 51 3.8 52 115 +4 (4)
Slide 15: Boosting revenues up to €3.8bn
BOOSTING REVENUES UP TO €3.8bn… WM TO BE THE TOP DRIVER OF REVENUE GROWTH Group ambitions & targets Section 2 Revenue trend (€bn, 3YCAGR %) Group +6% 3Y CAGR +6% normalizing 3.8 +5% +11% +10% 3.2 +7% excl. Arma FY23E WM CIB CF INS HF BP26T Group revenues up 6%¹ to €3.8bn: WM: up 10%¹, capital-light
Slide 16: Keeping cost/income ratio flat at 44%
AND KEEPING COST/INCOME RATIO FLAT @44% RISING COSTS DRIVEN BY FRANCHISE ENHANCEMENT, OFFSET BY REVENUE GROWTH Group ambitions & targets Section 2 MB Group cost/income evolution (%, bps) Cost/income ratio flat @44% +590bps (840bps) C/I +160bps C/I @44% +90bps @44% -Distribution platform - National l
Slide 17: We will keep RWAs flat
WE WILL KEEP RWAs FLAT... WITHOUT SHRINKING THE BUSINESS Group ambitions & targets Section 2 3Y MB Group RWA trend by division (€bn, 3YCAGR %) RWAs: flat in volumes reducing in density Regulation & Optimization 52 1.0 1.0 (2.5) 51 CIB (0.5) AIRB model roll out completion (LGD/PD from 2025) FRTB mana
Slide 18: And raise profitability
AND RAISE PROFITABILITY … WITH EXECUTION RISK MITIGATED BY DIVERSIFICATION 50% P&L GROWTH 50% K MANAGEMENT Group ambitions & targets Section 2 Group RORWA 3Y trend by division contribution (%, bps) Divisional RoRWA (%) WM RORWA to 2.7% 2.7% 4.0% up 60bps in 3Y INS 2.1% 3.2% +5bps +10bps 2.9% CF +20b
Slide 19: And capital generation by 50%
AND CAPITAL GENERATION BY 50% TO FEED GROWTH, DISTRIBUTION, POSSIBLE M&A Group ambitions & targets Section 2 MB Group annual average K generation (bps) 2023/2026 avg. annual CET1 generation BP19-23 avg. Net +40% +250bps +180bps earnings Optimization/ +40bps neutral Regulation Business (40)bps (20)bp
Slide 20: We will boost shareholder remuneration
WE WILL BOOST SHAREHOLDER REMUNERATION €3.7BN DISTRIBUTED OVER 3Y, UP 70% Group ambitions & targets Section 2 Total payout trend (%) Total cumulative shareholder remuneration (€bn) +70% 3.7 1.0 90/100% 2.2 ~80% 0.3 2.7 70% 70% 1.9 3Y FY21/22/23 3Y FY24/25/26 4Y FY20/21/22/23 3Y FY24/25/26 Cash Payou
Slide 21: Visible value creation: ROTE up to ~15%
VISIBLE VALUE CREATION ROTE UP TO ~ 15% TBVPS + 3Y CUMULATIVE DPS: UP TO €15/16 p.s. Group ambitions & targets Section 2 CET1 of at least 14.5% with up to Group ROTE3 up to ~15% EPS up to €1.80 100bps buffer available for M&A (ROTE, %) (EPS, €) (CET1, %) 3Y CAGR +3pp ~15% 1.80 15.4%¹ +15% 14.5% ~12%
Slide 22: Key benefits for shareholders
KEY BENEFITS FOR SHAREHOLDERS … Group ambitions & targets Section 2 Stronger industrial Superior High distribution footprint feeding high capital creation with low execution risk and sustainable growth Targeting industry-leading performance REVENUES +6%1 to €3.8bn ROTE2 up to 15% Shareholder remuner
Slide 23: And for the community
AND FOR THE COMMUNITY Group ambitions & targets Section 2 Supporting the Responsible Push for D&I community and climate school of banking change transition Contributing to a more sustainable future Carbon footprint: financed emissions First Employee Share Ownership Plan D&I: >20% female executives i
Slide 24: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 25: MBWM in last decade: from newcomer to unique player
MBWM IN LAST DECADE: FROM NEWCOMER TO UNIQUE PLAYER Divisional ambitions: WM Section 3.1 BP 2016-19 BP 2019-23 BP 2013-16 to asset gatherer, to priority business, MBWM: from deposit gatherer.. enhanced with M&A… distinctive and specialized First steps in WM sector CheBanca! repositioning (from Stron
Slide 26: In last 10Y we have upscaled MBWM significantly
IN LAST 10Y WE HAVE UPSCALED MBWM SIGNIFICANTLY… REVENUES AND PROFITABILITY HAVE RISEN CONSISTENTLY STRATEGIES AND TARGETS DELIVERED AT ALL TIMES Divisional ambitions: WM Section 3.1 BP19-23 WM targets 14000% 0.35 >30% 4Y (€bn) BP23T FY23E 12000% CAGR ✓ Barclays & TFAs 83 +8% >85 0.25 B. Esperia >85
Slide 27: Establishing a successful Private Investment Bank model
ESTABLISHING A SUCCESSFUL “PRIVATE INVESTMENT BANK” MODEL Divisional ambitions: WM Section 3.1 Private Banking integrated with IB… …with strong track record in last 4Y REVENUE GROWTH (+12% CAGR) MB Private Banking has focused its operations on: Global advisory model, highly synergistic with IB TFAs
Slide 28: Case study: fully-integrated PIB approach
CASE STUDY: FULLY-INTEGRATED PIB APPROACH Divisional ambitions: WM Section 3.1 Investment allocation after 3m Mediobanca generated a complex sell-side deal by advising Liquidity management a leading Italian mid-corp company Insurance 37% 2% This transaction was led by both Private Banking and Invest
Slide 29: One of the most visible and dynamic projects in the Premier segment in Italy
WITH ONE OF THE MOST VISIBILE & DYNAMIC PROJECTS IN THE PREMIER SEGMENT IN ITALY Divisional ambitions: WM Section 3.1 CheBanca! ready to play in the “Premier League”… leveraging on the achievements of last 4Y Since 2016 CheBanca! has delivered above-average growth rates, with TFAs 2x and profitabili
Slide 30: High potential of Italian saving market
HIGH POTENTIAL OF ITALIAN SAVING MARKET TO BE CAPTURED WITH REPOSITIONING VS HIGHER END CLIENTS Divisional ambitions: WM Section 3.1 MKT POTENTIAL CHALLENGES OPPORTUNITIES Italian household financial wealth1 Scenario profoundly influenced by Dissatisfaction with generalist banks’ macro (e.g. rising
Slide 31: High market potential from family-owned corporates
HIGH MARKET POTENTIAL FROM FAMILY-OWNED CORPORATES WHERE MB ALREADY HAS STRONG TRACK RECORD Divisional ambitions: WM Section 3.1 MidCaps by regional district1 MB bankers’ coverage2 today OPPORTUNITIES # 469 Avg. Rev. 73m FTE 376 FTE 5 Italian industrial backbone consists primarily of MidCaps, often
Slide 32: What's next: One Brand – One Culture
WHAT’S NEXT ONE BRAND – ONE CULTURE Divisional ambitions: WM Section 3.1 Mediobanca aims to be the leading Wealth Manager attracting the best talent and clients on the market We will leverage on Mediobanca brand & culture in Private and Premier segments closing the gap with current top Italian asset
Slide 33: Establish a single, unique Mediobanca brand and culture
ESTABLISH A SINGLE, UNIQUE MEDIOBANCA BRAND AND CULTURE THROUGH THE WHOLE CLIENT SEGMENT/PRODUCT OFFERING Divisional ambitions: WM Section 3.1 Mediobanca Mediobanca Private and Premier Banking Investment Banking The Mediobanca Brand is associated with core values (Trust, Solidity, Membership) with a
Slide 34: Mediobanca Premier: a new player in WM
MEDIOBANCA PREMIER A NEW PLAYER IN THE WM Divisional ambitions: WM Section 3.1 OBJECTIVES Capitalize on the strong value of Mediobanca brand vs both customers and bankers/FA Complete repositioning of the offering and business model with consistent brand image and communication Generate synergies acr
Slide 35: Franchise scaled up and geared to high-end clients
FRANCHISE WILL BE SCALED UP AND GEARED TO HIGH END CLIENTS… NNM CAPACITY DOUBLING TO ~€10BN P.A. Divisional ambitions: WM Section 3.1 Sales network growing… and repositioning vs higher with high NNM capacity portfolios/clients… (No. Salespeople) (Avg. banker portfolio1,€m) (Avg. annual NNM2) +2x >1,
Slide 36: With an upgrade to the service model
WITH AN UPGRADE TO THE SERVICE MODEL… GROSS FEE MARGIN STABLE AT ~90BPS ACROSS THE PLAN Divisional ambitions: WM Section 3.1 Customer trend towards high-end segment, coupled with upgrade to service model, with resilient overall margins Network TFAs by client wealth Gross fee margin1 trend ✓ Private
Slide 37: Enhancing inhouse asset management capabilities
ENHANCING INHOUSE ASSET MANAGEMENT CAPABILITIES TO BUILD AN EFFICIENT, TIMELY-TO-MARKET INHOUSE ADVISORY /AM PLATFORM DRIVEN BY CUSTOMER NEEDS Divisional ambitions: WM Section 3.1 MEDIOBANCA ASSET MANAGEMENT MEDIOBANCA MEDIOBANCA PRIVATE STRUCTURING ASSET MANAGEMENT PREMIER WEALTH ADVISORY UHNWI/HNW
Slide 38: MBWM by 2026: a leader in the Italian space
MBWM BY 2026: A LEADER IN THE ITALIAN SPACE, CLOSING THE GAP VS PEERS Divisional ambitions: WM Section 3.1 MBWM will grow TFAs (to €115bn), revenues ( to > €1bn) and profitability (RoRWA to 4.0%, additional 110bps), closing the profitability gap versus the current top asset gatherers MBWM will maint
Slide 39: WM targets
WM TARGETS Divisional ambitions: WM Section 3.1 Accelerated growth in TFAs… mostly driven by AUM/AUA… with resilient gross fee margin… +11% CAGR to €115bn +13% CAGR, ~75% of TFAs Flat at 0.90% (TFA, €bn) (AUM/AUA, €bn) (Gross Fees ex performance fee/AUM+AUA) 3YCAGR +13% 3YCAGR +11% 4YCAGR 4YCAGR 85
Slide 40: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 41: MB CIB: quality and profitability delivered
MB CIB: QUALITY AND PROFITABILITY DELIVERED Divisional ambitions: CIB Section 3.2 BP 13-16 BP 16-19 BP 19-23 Back to growth Capital absorption optimization Private & Investment Banking after sovereign crisis Road to ROAC model Mid-Cap platform and set up with Empower origination Empower origination
Slide 42: MB CIB: resiliency across the cycle
MB CIB: RESILIENCY ACROSS THE CYCLE Divisional ambitions: CIB Section 3.2 MB CIB has delivered stable results across the cycle in terms of both revenue and profitability on the back of its diversified portfolio of businesses across products, clients and geographies, with a strong focus on: K-light r
Slide 43: MB CIB today: a client-driven international franchise
MB CIB TODAY: A CLIENT-DRIVEN INTERNATIONAL FRANCHISE… Divisional ambitions: CIB Section 3.2 MB CIB – a successful and growing European presence with a leading position …built on international talent and a in Italy and an established footprint in Spain, France and UK… unique culture Strong markets s
Slide 44: With a highly distinctive business model
WITH A HIGHLY DISTINCTIVE BUSINESS MODEL Divisional ambitions: CIB Section 3.2 OUR KEY BUSINESS MODEL PILLARS MB CIB REVENUE MIX COMPARISON1 CIB is in Mediobanca’s DNA, having operated successfully since its foundation 12% 16% 19% 8% 17% 8% 10% 39% 6% 33% 33% 32% 11% Fee-driven revenue model based o
Slide 45: Leading investment bank in Italy
LEADING INVESTMENT BANK IN ITALY… Divisional ambitions: CIB Section 3.2 Last 10Y MB CIB ranking1: 1st in M&A ($360bn, 370+ deals), 1st in ECM ($12bn, 80+ deals), 4th in DCM ($30bn, 245+ deals) Alongside traditional leadership in Large Corporates and Financial Institutions, more recent establishment
Slide 46: With a strong presence in Spain and France
WITH A STRONG PRESENCE IN SPAIN AND FRANCE… Divisional ambitions: CIB Section 3.2 Historical and successful presence in Spain complemented by the establishment of a leading advisory franchise in France with Messier & Associés Combining entrenched local coverage Involved in many large French transact
Slide 47: European leadership in technology with Arma Partners
AND EUROPEAN LEADERSHIP IN TECHNOLOGY WITH ARMA PARTNERS Divisional ambitions: CIB Section 3.2 The leading technology advisory franchise in Europe Highly diversified revenue mix Revenues by sector1 Revenues by geography1 Arma Partners is a leading international advisory franchise in the Digital Econ
Slide 48: What's next: a leading international fee driven investment bank
WHAT’S NEXT: A LEADING INTERNATIONAL FEE DRIVEN/K-LIGHTER INVESTMENT BANK Divisional ambitions: CIB Section 3.2 Mediobanca CIB aims to affirm itself as a leading international investment bank pursuing profitable growth through a fee-driven business model with diversification across geographies, indu
Slide 49: Market opportunities arise for MB CIB
IN A FAST CHANGING ENVIRONMENT FOR INVESTMENT BANKS MARKET OPPORTUNITIES ARISE FOR MB CIB Divisional ambitions: CIB Section 3.2 MACRO TRENDS POTENTIAL OPPORTUNITIES FOR MB CIB Lean organizations continue to outperform bulge-bracket banks CHALLENGING ECONOMIC Mid-Cap market proving to be resilient an
Slide 50: Expand Private Investment Bank model: One Franchise between CIB and WM
EXPAND UNIQUE PRIVATE INVESTMENT BANK MODEL BY DEVELOPING “ONE FRANCHISE” BETWEEN CIB AND WM Divisional ambitions: CIB Section 3.2 New Industries (Tech, Energy Private Capital Mid International Transition and Healthcare) New CF initiatives providing access to new clients and industries accelerate op
Slide 51: Broaden MB CIB franchise across geographies, industries, clients, products
BROADEN MB CIB FRANCHISE ACROSS GEOGRAPHIES, INDUSTRIES, CLIENTS AND PRODUCTS Divisional ambitions: CIB Section 3.2 New growth initiatives aligned to MB CIB k-light and risk-disciplined approach ENHANCE BROADEN CLIENT BASE DEVELOP NEW PRODUCTS INDUSTRY COVERAGE Build a European Tech industry Expand
Slide 52: MBCIB revenue will increase and become more diversified
MBCIB REVENUE WILL INCREASE AND BECOME MORE DIVERSIFIED Divisional ambitions: CIB Section 3.2 Revenue growing… more K-light and visible Advisory up to ~2/3 of CIB fees (CIB revenues, €bn) (CIB fees, %) 3Y CAGR +11% 0.9 ~2/3 0.7 Advisory 50% CapMkt 40% 16% Lending 28% 23% FY23E BP26T 11% Specialty 1
Slide 53: Strong discipline in K absorption and risk profile
STRONG DISCIPLINE IN K ABSORPTION AND RISK PROFILE Divisional ambitions: CIB Section 3.2 Strong RWA reduction through… more disciplined use of capital… (CIB RWA, €bn) Focus on more profitable core clients Increase focus on k-light products (e.g. debt advisory, AIRB originate to distribute) and co-or
Slide 54: CIB targets
CIB TARGETS Divisional ambitions: CIB Section 3.2 More efficient capital use… without shrinking the business… will generate significant capital-light RWA down 4% 3Y CAGR Loans flat revenue growth… (RWA, €bn) (Loan book, €bn) (Revenues, €bn) flat 3YCAGR 3YCAGR +11% -4% 20 20 3000% 27 21 0.9 19 18 15
Slide 55: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 56: MB CF: in last 10Y we have upscaled Compass significantly
MB CF: IN LAST 10Y WE HAVE UPSCALED COMPASS SIGNIFICANTLY EARNINGS AND PROFITABILITY DOUBLED Divisional ambitions: Consumer Finance Section 3.3 BP 13-16 BP 16-19 BP 19-23 Back to growth Road to value Empower distribution after sovereign debt crisis Launch new products to diversify Continue growing r
Slide 57: Growth and profitability delivered through the cycle
GROWTH AND PROFITABILITY DELIVERED THROUGH THE CYCLE Divisional ambitions: Consumer Finance Section 3.3 35% 1,400 31% >30% 30% BP19-23 CF Targets ~1,100 1,200 25% 1,027 4Y Target (€bn) BP23T FY23E 1,000 CAGR 873 20% 691 17% 800 Revenues >1.1 ✓ +3% 1.1 15% 600 ROAC 28/30% ~ >30% ✓ 10% 400 Loans 14.1
Slide 58: Compass today: a unique value-driven consumer bank platform
COMPASS TODAY: A UNIQUE VALUE (NOT VOLUME) DRIVEN CONSUMER BANK PLATFORM Divisional ambitions: Consumer Finance Section 3.3 Unique Consumer Bank, with unrivalled capacity to defend appropriate risk adj. pricing grounded in: unique distribution platform with solid proprietary network 60 years of cred
Slide 59: Superior asset quality and clean balance sheet
SUPERIOR ASSET QUALITY AND CLEAN BALANCE SHEET … Divisional ambitions: Consumer Finance Section 3.3 Compass has been able to enhance its risk profile all over Rigorous impairment policies driving up coverage ratios… the cycle by pro-actively managing grids/policies with weekly fine-tuning in line wi
Slide 60: CoR structurally lowered by industrialized collection processes
TOGETHER WITH A COR STRUCTURALLY LOWERED BY STRONG AND INDUSTRIALIZED COLLECTION PROCESSES Divisional ambitions: Consumer Finance Section 3.3 Strong and actively managed collection process further enhanced since Covid by fostering relations with collectors and clients using multichannel approach and
Slide 61: What's next: the leading multichannel consumer finance bank
WHAT’S NEXT: THE LEADING MULTICHANNEL CONSUMER FINANCE BANK Divisional ambitions: Consumer Finance Section 3.3 Consumer Finance aims to upgrade its leadership in term of new business, service model and sustainable high profitability We will scale up our own direct production and digital platforms wi
Slide 62: Market opportunity
MARKET OPPORTUNITY Divisional ambitions: Consumer Finance Section 3.3 Consumer Compass targets growth by leveraging specific strength and the longstanding, solid and credit market coherent support of the Mediobanca Group Extensive and diversified distribution platform, with personal loans new busine
Slide 63: Multichannel distribution
MULTICHANNEL DISTRIBUTION … HIGHER STRATEGIC DISTRIBUTION INDEPENDENCE Divisional ambitions: Consumer Finance Section 3.3 In recent years distribution has been significantly enhanced, especially at variable cost. Strongly-integrated digital platforms have been empowered to achieve a multichannel dis
Slide 64: Fostered by the development of digital platforms
FOSTERED BY THE DEVELOPMENT OF DIGITAL PLATFORMS… Divisional ambitions: Consumer Finance Section 3.3 Digital business will rely on two platforms with distinctive roles: B2B - BNPL will be a tool to access new clients/market/geographies B2C Digital lending & Compass App will drive personal loan direc
Slide 65: Will translate to growth and diversification
WILL TRANSLATE TO GROWTH AND DIVERSIFICATION Divisional ambitions: Consumer Finance Section 3.3 Next 3Y new business will focus on balanced growth skewed toward the most profitable products: personal loans (especially through direct channels), cars, special purpose and BNPL (essential to enlarge cli
Slide 66: BNPL opportunities: new clients and geographies
BNPL OPPORTUNITIES: NEW CLIENTS & GEOGRAPHIES Divisional ambitions: Consumer Finance Section 3.3 BNPL opportunity: new clients/geographies for future repeat business BNPL will allow Compass to access selected new geographies gradually with limited physical presence COMPASS STRENGTH BNPL BUSINESS UP
Slide 67: Compass approach to BNPL risk is sound
COMPASS APPROACH TO BNPL RISK IS SOUND AND ALREADY FORGED BY MATERIAL EXPERIENCE Divisional ambitions: Consumer Finance Section 3.3 Compass applies proven consumer credit risk assessment skills to develop a profitable (net of risk) credit (not fintech) product GROUNDED STATISTICAL EVIDENCE FROM EXPE
Slide 68: Consumer Finance targets
CONSUMER FINANCE TARGETS Divisional ambitions: Consumer Finance Section 3.3 Enlarged network supports strong translating to loan book growth will deliver increasing revenues new loan generation… which… (New loans, €bn) (Loan book, €bn) (Revenues, €m) 3Y CAGR 3Y CAGR +6% 3Y CAGR 4Y CAGR +5% +5% +2% 9
Slide 69: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 70: Insurance: contribution over the last 10Y positive with uncorrelated cash flows
INSURANCE: CONTRIBUTION OVER THE LAST 10Y HAS ALWAYS BEEN POSITIVE WITH STRONG UNCORRELATED CASH FLOWS Divisional ambitions: Insurance Section 3.4 BP 2013-16 BP 2016-19 BP 2019-23 From wide and diversified to basically one single stake in held due to its profitability and equity stake portfolio… Ins
Slide 71: INS: high return investment, strong value option
INS: HIGH RETURN INVESTMENT, STRONG VALUE OPTION PROFITABILITY WILL FURTHER INCREASE Divisional ambitions: Insurance Section 3.4 In the next 3Y Insurance will further improve its significant return, with revenues increasing and favorable capital treatment becoming permanent (“Danish Compromise”) Ins
Slide 72: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 73: A&L in last decade centralized within HF
A&L IN LAST DECADE CENTRALIZED WITHIN HF, WORKING TO MEET GROUP NEEDS Divisional ambitions: A&L Section 3.5 BUSINESS PLAN 2013-16 BUSINESS PLAN 2019-23 BUSINESS PLAN 2016-19 Start of negative interest rates, From negative to positive Back to growth end of sovereign crisis interest rates Significant
Slide 74: Where we are now: comfortable A&L position
WHERE WE ARE NOW: COMFORTABLE A&L POSITION Divisional ambitions: A&L Section 3.5 Diversification & quality of funding… …loan book… …and treasury assets Banks Private ECB and banking 9% other 9% 7% Mortgages Liquidity MB bonds 24% Consumer 5.0 institutional 27% €60bn €14bn Govies 25% €53bn Leasing 6.
Slide 75: Macro scenario ahead
MACRO SCENARIO AHEAD Divisional ambitions: A&L Section 3.5 2023 2024 2025 2026 International scenario: IT GDP (y/y) 0.7% 1.3% 1.2% 1.3% China and Western Countries frictions stabilizing EA GDP (y/y) 0.5% 1.8% 2.3% 2.2% Post-Covid China reopening IT Inflation (y/y) 6.9% 3.5% 2.7% 2.1% World potential
Slide 76: What's next: active management of new rates environment
WHAT’S NEXT: ACTIVE MANAGEMENT OF NEW RATES ENVIRONMENT Divisional ambitions: A&L Section 3.5 The ALM structure will be functional to support the Group development and NII growth during the plan horizon Core funding sources growth (bonds and WM deposits) will support a value-driven lending originati
Slide 77: Asset side: value driven approach
ASSET SIDE: VALUE DRIVEN APPROACH Divisional ambitions: A&L Section 3.5 Lending trend BP 23-26 (€bn) Banking book trend BP 23-26 (€bn) 3Y CAGR 4Y CAGR +3% CBC €14bn €15bn €19bn +4% 10 57 9 53 2 44 20 7 2 20 18 2 20 8 17 11 7 5 13 14 >16 FY19 FY23E BP26T FY19 FY23E BP26T CF WM CIB Other BB Govies BB
Slide 78: Funding: all core sources growing
FUNDING: ALL CORE SOURCES GROWING Divisional ambitions: A&L Section 3.5 Deposits MB bonds Challenges/Opportunities Challenges/Opportunities Higher yield demand from investors managed through guided High demand from investors Funding BP 2023-26 (€bn) MB brand/solidity conversion into term deposits an
Slide 79: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 80: IT strategic plan for growth and efficiency
IT STRATEGIC PLAN FOR GROWTH & EFFICIENCY Divisional ambitions: Enablers Section 3.6 MAIN TECH PRIORITIES AND BENEFITS ENHANCEMENT OF DIGITAL AI AND AUTOMATION ON DIGITAL SALES PLATFORMS CHANNELS AND USER OPERATIONS FOR COST DEVELOPMENT EXPERIENCE OPTIMIZATION Enhancement of digital offering to Deve
Slide 81: Investment projects
THE IT STRATEGIC PLAN AND THE KEY INITIATIVES BY DIVISION Divisional ambitions: Enablers Section 3.6 MAIN DESCRIPTION PROGRAMMES Consolidation of a uniform technology platform to Digital Wealth maximizes synergies between legal entities and Platform improve the overall digital posture Innovation roa
Slide 82: Long-standing responsible approach to banking: new Group ESG targets
LONG-STANDING RESPONSIBLE APPROACH TO BANKING NEW GROUP ESG TARGETS Divisional ambitions: Enablers Section 3.6 ENVIRONMENT SOCIAL GOVERNANCE CARBON FOOTPRINT DIVERSITY & INCLUSION REMUNERATION Net Zero financed emissions by 2050 >30% female members of MB New Long-Term Incentive Plan Key Function Hol
Slide 83: Structured ESG offering across all divisions
STRUCTURED ESG OFFERING ACROSS ALL DIVISIONS Divisional ambitions: Enablers Section 3.6 Wealth Management Consumer Finance Corporate & Investment Banking >50% qualified funds1 in clients’ 15% CAGR ESG loans Corporate finance: experienced portfolio dedicated Energy Transition advisory team +50% quali
Slide 84: Disciplined approach to M&A
DISCIPLINED APPROACH TO M&A Divisional ambitions: Enablers Section 3.6 Criteria for M&A: strong industrial rationale, capital-light businesses that are an excellent fit for MB in terms of culture, ethics and business approach Several bolt-on acquisitions made in order to enhance core businesses with
Slide 85: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 86: Consistency and delivery; ambition and future growth
CONSISTENCY AND DELIVERY AMBITION AND FUTURE GROWTH Closing remarks Section 4 CONSISTENCY AND DELIVERY Over the last 10Y MB has consistently grown and reshaped regardless of the macro economic scenario The success of the strategy has allowed MB to reinvest capital in the key growth opportunities acr
Slide 87: The pillars of BP23-26: One Brand – One Culture
MEDIOBANCA THE 4 PILLARS OF BP23-26 ONE BRAND – ONE CULTURE Closing remarks Section 4 1 WM to become as large as other businesses SUBSTANTIAL GROWTH Fee-related business to be largest contributor to CIB IN CAPITAL-LIGHT PORTFOLIO Flat RWA growth 2 RoTE1 target of 15% TARGETING BEST-IN-CLASS 15% EPS
Slide 88: Strategic Guidelines FY 2023-26 – One Brand, One Culture
STRATEGIC GUIDELINES FY 2023-26 MEDIOBANCA ONE BRAND – ONE CULTURE Milan, 24 May 2023
Slide 89: Agenda
AGENDA Section 1. Executive summary Section 2. Group ambitions & targets Section 3. Divisional ambitions 3.1 Wealth Management 3.2 Corporate & Investment Banking 3.3 Consumer Finance 3.4 Insurance 3.5 A&L 3.6 Enablers Section 4. Closing remarks Annexes 1. Glossary
Slide 90: Glossary
GLOSSARY MEDIOBANCA BUSINESS SEGMENT PROFIT & LOSS (P&L) and BALANCE SHEET CIB Corporate and investment banking FAs Financial Advisors WB Wholesale banking FVOCI Fair Value to Other Comprehensive Income GOP Gross operating profit SF Specialty finance Leverage ratio CET1 / Total Assets (FINREP defini
Slide 91: Disclaimer
DISCLAIMER This Business Plan may contain "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and p
Slide 92: Investor Contacts
INVESTOR CONTACTS Mediobanca Group Investor Relations Piazzetta Cuccia 1, 20121 Milan, Italy Tel. no. (0039) 02-8829. 860 Email: investor.relations@mediobanca.com http://www.mediobanca.com 92