Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — H1 FY2019 Earnings Presentation
62 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, Feb 7, 2019
Slide 1: 2Q19/6M results as at 31 December 2018
Mediobanca 2Q19/6M results as at 31 December 2018 MB strong business positioning delivers growth results Milan, 7 February 2019
Slide 2: Agenda
Agenda Section 1. Group results as at December 2018 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 3: Growth results highlight MB strong business positioning
Growth results highlight MB strong business positioning, distinguishing us further in an uncertain & volatile scenario Despite market uncertainty and macro deterioration MB has achieved its best half-year results ever in terms of revenues and profitability focusing on high-margin, specialized, long-
Slide 4: Last Quarter takeaways
Last Quarter takeaways Good news from regulation: SREP confirmed at 8.25% Strong capital AIRB validation for mortgages obtained (~40bps positive impact from 2019) Regulation: New CRR2 proposal more pros AG deduction moved to 2024 (~120 bps deduction no longer applicable from 2019) than cons reduced
Slide 5: GOP up 16% driven by 9% growth in revenues
GOP up 16% driven by 9% growth in revenues… 6M results as at December 2018 Section 1 MB Group IH19 gross operating profit after LLPs by source (€m) +16%, +14% adj¹ 44 (28) 4 (22) 12 -4% 22 29 +5% -3% +14% +37% +7% +3% adj.1 +4% flat adj.1 606 584 523 Revenues up 9% GOP risk adj. Net interest Fee Tre
Slide 6: …and positive performances by all businesses
…and positive performances by all businesses 6M results as at December 2018 Section 1 MB Group operating profit by division (6M, €m) +16% 47 - - 9 23 4 +38% +9% +10% 0% 606 523 GOP risk adj. Consumer Corporate & Wealth HF Principal GOP risk adj. 6M-Dec17 banking Investment Banking Management & other
Slide 7: Long-term growth trend continuing: NII up 4%
Long-term growth trend continuing: NII up 4% 6M results as at December 2018 Section 1 NII by division (€m) Loans by division (€bn) +4% +4% 357 WB +10% Specialty finance 344 +28% 672 701 15.0 14.8 13.4 136 139 1Q19 2Q19 2.6 +€7m HF 2.0 2.1 128 +€4m Consumer 127 Dec17 Sept18 Dec18 Dec17 Sept18 Dec18 4
Slide 8: Higher funding at reduced cost
Higher funding at reduced cost 6M results as at December 2018 Section 1 Funding stock breakdown (€bn) Avg. cost of funding trend (bps vs Eur3M) 49.6 50.8 48.9 6.3 6.0 6.0 155 4.3 4.3 145 135 4.3 130 18.6 19.2 100 19.2 90 85 80 80 60 19.1 20.8 21.2 60 60 June18 Sept18 Dec18 FY17 FY18 1Q19 2Q19 WM dep
Slide 9: WM: strong NNM (€3.4bn in 6M), TFAs up 11%
WM: strong NNM (€3.4bn in 6M), TFAs up 11% 6M results as at December 2018 Section 1 1.9 Group TFAs trend (€bn) 1.5 0.1 1.6 1.2 0.4 1Q19 2Q19 63.9 3.4 64.6 4.7 59.9 (2.7) (0.7) Affluent +2.2 Affluent +1.0 30.0 PB/AM +2.5 37.3 PB/AM +2.4 37.0 12.1 7.6 Deposits +2.0 6.6 Deposits +1.4 AUM/AUA +3.3 AUM/A
Slide 10: Fees up 7%, driven by WM and CIB
Fees up 7%, driven by WM and CIB 6M results as at December 2018 Section 1 KPIs Group fees by quarter (€m) WM confirmed as the largest contributor to Group fees: €141m fees, or 43% of Group total WM fee up 16% YoY, driven by AUM increase. Last quarter impacted by negative market trend in AM business
Slide 11: Costs: business development matched by cost discipline
Costs: business development matched by cost discipline 6M results as at December 2018 Section 1 Group cost base by half-year (€m) KPIs Costs up 3% like-for-like, to €562m, with cost/income ratio 44% Cost/income 44% stable at 44% ratio Increased operations and distribution enhanced in CheBanca! (WM):
Slide 12: Asset quality and coverage ratios improved further
Asset quality and coverage ratios improved further… NPLs down as stock and as % of loans (4.3% gross and 1.9% net) NPLs Bad loans Coverage As % of loans (“deteriorate”) (“sofferenze”) 72% 77% -7% 2.3% Mediobanca -20% 1.9% 892 826 57% Group 143 114 55% 0.4% 0.3% Dec17 Dec18 Dec17 Dec18 Dec17 Dec18 De
Slide 13: …driving lowest-ever CoR: 48bps in last Q
…driving lowest-ever CoR: 48bps in last Q 6M results as at December 2018 Section 1 Cost of risk by division (bps) NPLs (“deteriorate”, €m) and coverage (%) 180 55% 57% 57% 60% 181 180 1,000 55% 50% 800 45% 600 892 842 826 40% 52 35% 400 30% Dec17 June18 Dec18 56 48 Net NPLs NPLs coverage -17 Perform
Slide 14: Solid capital generation – Regulations playing positively
Solid capital generation –Regulations playing positively CET11 up 100bps YoY to 13.9%… … and down 30bps QoQ due to buyback accrual +100bps 14.2% 13.9% -30 13.9% 12.9% -40 +20 -40 +110 -20 -10 +80 Dec17 Retained RWA RAM Buy back Other Dec18 Sept18 Retained Buy Others Dec18 earnings change acq. earnin
Slide 15: MB risk profile outstanding at EU level
MB risk profile outstanding at EU level 6M results as at December 2018 Section 1 Low risk profile due to capital ratios well above … low sovereign bond exposure … regulatory requirements… EBA transparency – 30 June 2018 347% MB SREP 2019 confirmed at the same level as previous year (MB second best I
Slide 16: Group ROTE at 11%
Group ROTE at 11% All divisions with high-double digit ROAC Revenues GOP PBT ROAC1 +9% 11% ROTE 11% +16% -4% Mediobanca 1,277 1,170 606 607 Group 523 584 9% ROTE adj. Dec17 Dec18 Dec17 Dec18 Dec17 Dec18 Dec17 Dec18 16% Wealth +7% 13% +9% Management 272 +8% 256 46 51 47 51 (WM) Dec17 Dec18 Dec17 Dec1
Slide 17: CSR to be more at centre of our action
CSR to be more at centre of our action 6M results as at December 2018 Section 1 IH19 IIH19 What we have done and what we plan to do… … in the foreseeable future BLOOMBERG GENDER-EQUALITY INDEX SUSTAINABILITY INDEXES MB chosen to join Bloomberg Gender-Equality Index Selection and active contribution
Slide 18: Agenda
Agenda Section 1. Group results as at December 2018 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 19: Wealth Management
WEALTH MANAGEMENT " ie MEDIOBANCA
Slide 20: Building a new sustainable & omni-channel wealth manager
Building a new sustainable & omni-channel wealth manager PROPRIETARY CHANNELS INDIRECT CHANNELS Relationship Managers Financial Advisors 541 543 452 Relationship 125 125 Financial Managers Advisors 130 418 Affluent 288 288 125 Private 226 416 418 65 322 FA shops Digital platform J17 J18 D18 59 J17 J
Slide 21: €3.4bn NNM in 6M despite adverse markets
€3.4bn NNM in 6M despite adverse markets both Affluent and Private customer segments up both AUM/Deposits materially increased 6M results as at December 2018 Section 2 Group TFAs NNM by customer segment (€bn) Group TFAs NNM by product (€bn) 4.7 4.7 3.4 2.2 1.5 3.4 1.1 1.9 1.5 1.9 1.5 2.0 0.6 3.0 0.4
Slide 22: AUM/AUA consolidated at €37bn
AUM/AUA consolidated at €37bn 6M results as at December 2018 Section 2 Group AUM/AUA trend (€bn) +17% YoY -1% HoH 1.8 37.3 1.3 (1.6) 37.0 31.5 ~4 28.9 28.1 23.9 0.5bn FAs 1.1bn FAs 1.3bn FAs 7.6 8.4 8.9 Dec17 RAM acquisition Organic growth June18 NNM Market Dec18 Affluent&Premier Private&HNWI&AM AUM
Slide 23: Revenues, GOP & ROAC up and well diversified
Revenues, GOP & ROAC up and well diversified 6M results as at December 2018 Section 2 WM revenues by customer WM revenues by source WM GOP risk adj. by customer, segment (6M, €m) (6M, €m) ROAC (6M, €m, %) 16%¹ ROAC 272 272 256 +7% 13% 256 +7% +19% +19% 11% 214 214 +9% 51 +16% 141 ~55% 46 +13% 126 ~4
Slide 24: Consumer Banking
CONSUMER BANKING * ie MEDIOBANCA
Slide 25: Efficient structure and enhanced distribution franchise
Efficient structure and enhanced distribution franchise… 6M results as at December 2018 Section 2 Compass growing platform in size, efficiency and …coupling direct distribution with the new digital productivity… channel 10 32% 31% 9.5 8.9 C/I ratio (%) 8.5 9 30% 29% 8.5 28% 28% Loans/staff (€m) 8 28
Slide 26: …drive new business through all distribution channels
…drive new business through all distribution channels… 6M results as at December 2018 Section 2 Compass new business by product (€bn) Personal loans new business by channel (€m) Compass branches Banks +4% 3.5 3.3 0.5 0.5 0.8 1.0 0.7 0.8 0.6 0.6 0.6 0.6 +2% 1.8 Dec15 Dec16 Dec17 Dec18 Dec15 Dec16 Dec
Slide 27: …And once again best-ever results: ROAC 32%
…And once again best-ever results: ROAC 32% Contributing ~40% MB Group revenues, GOP, net profit 6M results as at December 2018 Section 2 Revenues and CoR (€m, bps) Net profit and ROAC (€m, %) Consumer contribution to MB Group +4% ROAC +4% 32% 600 500 300 30% 24% 30 550 513 450 HF HF 493 PI 500 476
Slide 28: Corporate & Investment Banking
Corporate & Investment Banking 28
Slide 29: Revenues resilient due to stronger M&A and Specialty Finance
Revenues resilient due to stronger M&A and Specialty Finance 6M results as at December 2018 Section 2 CIB revenues YoY trend (€m, 6M) December 17 December 18 Lending Advisory Lending 38% 9% Advisory 34% 14% ~55% Financing €317m ~40% IB (M&A+Capmkt) €333m Capmkt* ~5% Trading 26% Capmkt* Specialty 28%
Slide 30: Leading Position in M&A
Leading Position in M&A … 6M results as at December 2018 Section 2 M&A CF Italy – Completed deals Strong ties with all other IB departments guarantee a complete product offering to the customer (January 18 – December 18) Involved in all industry-shaping deals of 2018, including F2i and Mediaset tend
Slide 31: Equity capital markets and cash equity
… Equity capital markets and cash equity … 6M results as at December 2018 Section 2 Mediobanca boasts an unrivalled track record in Italian Global Coordinator Italy ECM ECM transactions, managing virtually all the largest deals as (Jan 18 – Dec 18) Global Co-ordinator Growing leadership in Southern
Slide 32: Significant role in the main ITA ABS transactions
… with significant role in the main ITA ABS transactions 6M results as at December 2018 Section 2 NPLs securitizations with GACS January 2018 May 2018 June 2018 June 2018 July 2018 August 2018 November 2018 Maior SPV S.r.l. Aqui SPV S.r.l. Siena NPL 2018 S.r.l. Aragorn NPL 2018 S.r.l. Red Sea SPV S.
Slide 33: Spec.Fin.: intense activity delivers material growth
Spec.Fin.: intense activity delivers material growth revenues up 21% to ~€70m, earning up 30% to €20m in last 6M 6M results as at December 2018 Section 2 KPIs MBCredit Solution loan book trend (€m) +29% Specialty Finance: significant contributor to CIB well diversified-growing revenues: ~70m, up 21%
Slide 34: CIB: ROAC up to 16%, distinctive positioning confirmed
CIB: ROAC up to 16% distinctive positioning confirmed 6M results as at December 2018 Section 2 CIB KPIs CIB contribution to MB Group CIB - €m Dec17 Dec18 D HF Revenues 317 333 +5% PI HF PI PI ow NII 136 139 +2% Consumer ow Fees 117 123 +5% Consumer Consumer Consumer GOP risk adj. 218 218 - 40% Net p
Slide 35: Principal Investing
PRINCIPAL INVESTING * ie MEDIOBANCA
Slide 36: PI: high profitability with no gains on disposals
PI: high profitability with no gains on disposals 6M results as at December 2018 Section 2 Main equity investments as at Dec18 (€m) Principal Investing AG source of capital and profitability PI contribution to MB Group Revenues up 38% due to AG contribution HF 13% 24% Consumer 13% Net profit at €159
Slide 37: Holding Functions
HOLDING FUNCTIONS 4 MEDIOBANCA oar
Slide 38: Comfortable funding and liquidity position
Comfortable funding and liquidity position Key funding issuances Wide access to funding market through different product and channels addressing various geographies/pockets of investors: >€3bn raised Amount Spread at Investor (excluding deposit growth) with cost under control Issue date Bond type (€
Slide 39: MREL needs already fully addressed: sizeable surplus
MREL needs already fully addressed: sizeable surplus 6M results as at December 2018 Section 2 MREL eligible liabilities (€bn, June 18) Total MREL eligible instruments: €20.1bn ~42% ~30% Senior Deposits unsecured Structured (not covered, Total capital 5.6 notes €3.4bn 8.6 not preferential) 1.8 Struct
Slide 40: Agenda
Agenda Section 1. Group results as at December 2018 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 41: MB accretive value cycle leveraged successfully
MB accretive value cycle leveraged successfully … Closing remarks – What’s next Section 3 Strong positioning Mediobanca focused on high-margin, specialized, long-standing growing businesses Shareholders remuneration Growth MEDIOBANCA Unbroken growth Yield > 9% ACCRETIVE in assets, revenues and profi
Slide 42: …by MB strong positioning in long-standing growing businesses
…by MB strong positioning in long-standing growing businesses Closing remarks – What’s next Section 3 WEALTH MANAGEMENT CONSUMER BANKING CIB Italian saving market is one of the Highly profitable business in Italy, Italian mid-caps among the most most attractive in Europe in terms of decoupled from G
Slide 43: Maintain growth and shareholders remuneration at the top of European standard
Maintain growth and shareholders remuneration at the top of European standard Stronger distribution Stronger brand Stronger capital in all businesses in all businesses no headwinds ahead Market shares to be further enlarged + Low correlation with Italian GDP trend Additional selected acquisitions =
Slide 44: 2Q19/6M results as at December 2018
Mediobanca 2Q19/6M results as at 31 December 2018 MB strong business positioning delivers growth results Milan, 7 February 2019
Slide 45: Agenda
Agenda Section 1. Group results as at December 2018 Section 2. Divisional results Section 3. Closing remarks Annexes 1. Quarterly segmental reporting tables 2. Glossary
Slide 46: Divisional results
Divisional results Annex 1 46
Slide 47: Mediobanca business model
Mediobanca business model Mediobanca Group Holding Functions Group ALM & Treasury Corporate & Investment Consumer Banking Wealth Management Principal Investing Banking (CIB) (CB) (WM) (PI) Corporate & Investment Consumer Banking Affluent & Premier Principal Investing Banking Compass CheBanca! Ass. G
Slide 48: Mediobanca Group P&L
Mediobanca Group P&L 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 1,277 1,249 1,170 9% 639 638 619 630 572 Net interest income 701 687 672 4% 357 344 345 342 340 Fee income 313 331 291 7% 158 155 166 165 153
Slide 49: Mediobanca Group A&L
Mediobanca Group A&L 6M results as at December 2018 Annex 1 D D D €bn Dec18 Sept18 June18 Dec17 QoQ1 HoH1 YoY1 Funding 50.8 49.6 48.9 47.4 +2% +4% +7% Bonds 19.2 18.6 19.2 18.8 +4% +2% Direct deposits (retail&PB) 21.2 20.8 19.1 18.2 +2% +11% +17% ECB 4.3 4.3 4.3 4.3 Others 6.0 6.0 6.3 6.1 -5% -1% Lo
Slide 50: Wealth Management results
Wealth Management results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 272 271 256 +7% 137 136 142 129 133 Net interest income 128 129 127 +1% 64 64 66 63 63 Fee income 141 137 122 +16% 71 70 73 64 66 Net tre
Slide 51: Affluent & Premiere: CheBanca! results
Affluent & Premiere: CheBanca! results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 146 149 144 +2% 74 72 76 73 74 Net interest income 104 105 107 -2% 52 53 53 52 53 Fee income 42 43 37 +13% 22 19 23 20 21 To
Slide 52: Private Banking results
Private Banking results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 126 122 112 +13% 63 64 65 56 59 Net interest income 24 23 20 +17% 12 12 12 11 10 Fee income 99 94 85 +17% 49 50 51 44 45 Net treasury incom
Slide 53: Consumer Banking results
Consumer Banking results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 513 503 493 +4% 256 257 252 251 247 Net interest income 450 437 432 +4% 227 223 218 218 218 Fee income 63 67 61 +4% 29 34 34 32 29 Total c
Slide 54: CIB results
CIB results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 333 314 317 +5% 174 159 150 164 164 Net interest income 139 130 136 +2% 70 69 66 64 67 Net treasury income 72 46 65 +11% 38 34 20 26 34 Fee income 123
Slide 55: WB results
WB results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 265 256 261 2% 138 127 119 136 133 Net interest income 98 93 106 -7% 50 48 47 46 52 Net treasury income 72 46 65 11% 38 34 20 26 34 Fee income 95 117 90
Slide 56: Specialty Finance results
Specialty Finance results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 68 58 56 21% 36 32 30 28 31 Net interest income 41 38 30 36% 20 20 20 18 16 Fee income and other income 28 21 27 4% 16 12 11 10 15 Total
Slide 57: Principal Investing results
Principal Investing results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income 171 171 124 38% 72 99 78 93 33 Gains from disposals (11) 3 94 (15) 4 2 0 5 Impairments 0 (1) (1) 0 0 (1) (0) (0) Net result 159 169 205
Slide 58: Holding function results
Holding function results 6M results as at December 2018 Annex 1 1H 2H 1H 2Q 1Q 4Q 3Q 2Q €m D YoY1 Dec18 June18 Dec17 Dec18 Sept18 June18 Mar18 Dec17 Total income (7) 2 (11) 1 (7) 3 (1) (3) Net interest income (24) (13) (25) (8) (15) (7) (6) (9) Net treasury income 12 8 5 8 4 6 3 3 Fee income 5 7 9 1
Slide 59: Glossary
GLOSSARY Annex 2 59 MEDIOBANCA
Slide 60: Glossary
GLOSSARY MEDIOBANCA BUSINESS SEGMENT PROFIT & LOSS (P&L) and BALANCE SHEET CIB Corporate and investment banking GOP Gross operating profit WB Wholesale banking Leverage ratio CET1 / Total Assets (FINREP definition) SF Specialty finance Ls Loans CB Consumer banking LLPs Loan loss provisions WM Wealth
Slide 61: Disclaimer & Declaration of head of financial reporting
Disclaimer & Declaration of head of financial reporting As from this semester, the Mediobanca Group is adopting IFRS 9 to represent its financial instruments. The transition to the new standard has resulted in an approx. €81m reduction in net equity, chiefly due to the introduction of the new impair
Slide 62: Investor contacts
Investor contacts Mediobanca Group Investor Relations Piazzetta Cuccia 1, 20121 Milan, Italy Jessica Spina Tel. no. (0039) 02-8829.860 Luisa Demaria Tel. no. (0039) 02-8829.647 Matteo Carotta Tel. no. (0039) 02-8829.290 Email: investor.relations@mediobanca.com http://www.mediobanca.com 62