Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — Banco Bpm Societa Ord — 9M 2024 Earnings Presentation
40 slides from Banco Bpm Spa's earnings presentation, Nov 6, 2024
Slide 1: Group 9M 2024 Results Presentation
Group 9M 2024 Results Presentation 06 November 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Banco BPM ("Banco BPM"); for the purposes of this notice, "presentation" means this document, any oral presentation, any questions and answers session and any written or oral material discussed following the distribution of this document. The distrib
Slide 3: Methodological Notes
Methodological Notes ▪ The balance sheet and income statement layouts contained in this news release have been reclassified along management criteria in order to provide an indication on the Group’s overall performance based on more easily understandable aggregate operating and financial data. These
Slide 4: Agenda
Agenda 1 Executive Summary 5 2 Key Highlights 10 3 Final Remarks 22 4 9M 2024 Performance Details 24 4
Slide 5: Executive Summary
Executive Summary 1
Slide 6: 9M 2024: Confirming an outstanding performance track record
9M 2024: CONFIRMING AN OUTSTANDING PERFORMANCE TRACK RECORD… INCREASING NET INCOME & SHAREHOLDER REMUNERATION 9M NET INCOME €1.7BN CONFIDENT TO OVERPERFORM €0.95 FY 2024 EPS • €1.24bn adjusted, +25% Y/Y PREVIOUS GUIDANCE (excl. one-offs) Quarterly Net Income, € m Numia 946 deal ▪ €0.75 DPS €0.4 DPS
Slide 7: Leveraging on key strategic strengths
… LEVERAGING ON KEY STRATEGIC STRENGTHS OVERDELIVERY ON MAIN PLAN DRIVERS CORE REVENUES GROSS NPEs at €3.2bn CET 1 ratio +132bps in 9M €4.27bn in 9M -18% Y/Y MDA buffer at 641bps ~€620m NPEs disposed in 9M Core Revenue growth Gross NPE ratio CET 1 RATIO: +6.7% 15.48% 3.1% ~3.0% ~14.0% ~ +1% 9M 2024
Slide 8: Outperforming Strategic Plan targets
Outperforming Strategic Plan targets PROFITABILITY: QUARTERLY TREND EFFICIENCY & ASSET QUALITY: YTD PROGRESS TOTAL REVENUES COST / INCOME Strategic Strategic €m +7.9% Plan Plan 55% 55% 1,367 1,475 ~1,350 1,101 1,168 +9% <50% vs. 2026 target 48% 47% Q3 21 Q3 22 Q3 23 Q3 24 FY 26E 30/09/21 30/09/22 30
Slide 9: Numia deal successfully completed, with launch of business well under way
Numia deal successfully completed, with launch of business well under way ESTABLISHING ITALY’S SECOND LARGEST PLAYER DEAL OVERVIEW IN THE PAYMENTS BUSINESS >10% market share ~400K POS ~28.6% ~42.9% ~28.6% >€100bn in transacted ~8m payment cards Numia business volumes Group SpA Network distribution:
Slide 10: Key Highlights
Key Highlights 2
Slide 11: 9M 2024 Net Income at €1,696m and €1,245m excluding one-offs
9M 2024 Net Income at €1,696m and €1,245m excluding one-offs P&L HIGHLIGHTS, €m Q2 24 Q3 24 Chg. Q/Q 9M 23 9M 24 Chg. Y/Y 9M TREND: TWO-YEAR EVOLUTION Net interest income 858 862 0.4% 2,422 2,585 6.7% €m Net fees and commissions 500 488 -2.3% 1,453 1,509 3.9% +36% Income from associates 45 31 95 106
Slide 12: NII: outperformance and supportive outlook
NII: outperformance and supportive outlook RESILIENT NII TREND REDUCED INTEREST RATE SENSITIVITY1 €m €m Impact from mitigating actions on interest rate risk +6.7% management (detailed in the following slide) ~250 2,585 2,422 ~200 +0.4% -50 858 862 9M 23 9M 24 Q2 24 Q3 24 YE 2023 9M 24 EVOLUTION OF C
Slide 13: Actions implemented to support NII target over the Plan horizon
Actions implemented to support NII target over the Plan horizon KEY SENSITIVITY DRIVERS Stock of replicating portfolio Share on total C/A GROWING SIZE OF € bn 21 INCREASED SHARE 24% 32% 33% REPLICATING 15 OF INDEXED C/A PORTFOLIO1 31/12/23 30/09/24 31/12/23 30/06/24 30/09/24 ▪ Avg. Yield 2.1% and du
Slide 14: Total Customer Financial Assets +€7.6bn YTD and >€15bn of New Lending
Total Customer Financial Assets +€7.6bn YTD and >€15bn of New Lending TOTAL CUSTOMER FINANCIAL ASSETS CORE PERFORMING CUSTOMER LOANS € bn 217.8 GBV, € bn 97.3 95.6 210.3 Cap.-protected Certificates & 6.1 11.8 10.9 5.3 other Debt Securities at FV 44.2 49.1 27.9 27.3 Financials, PA & Other AUC 62.0 65
Slide 15: Total Net Fees & Commissions up at €1,509m: +3.9% Y/Y
Total Net Fees & Commissions up at €1,509m: +3.9% Y/Y TOTAL NET FEES & COMMISSIONS1 €m +6.2% adjusted2 2024 QUARTERLY TREND +3.9% Q2 24 Q3 24 1,453 1,509 Investment Total 500 488 Product Fees 508 556 Other fees Investment 178 178 944 953 Product Fees Other fees 322 310 9M 23 9M 24 INVESTMENT PRODUCT
Slide 16: Cost/Income ratio down at 47%, notwithstanding the new labour contract
Cost/Income ratio down at 47%, notwithstanding the new labour contract TOTAL OPERATING COSTS €m 1,910 1,995 198 197 D&A 501 502 Staff costs impacted by the Other Administrative Expenses new labour contract 1,210 1,296 (+€75m Y/Y) Staff Costs 9M 23 9M 24 Cost / Income ratio 48% 47% STAFF COSTS OTHER
Slide 17: Accelerated derisking plan, with enhanced asset quality and CoR
Accelerated derisking plan, with enhanced asset quality and CoR Gross NPEs: -15.0% YTD GBV, Stock €m DERISKING PATH €3.75bn €3.19bn LLPS & COST OF RISK 700 ~620 ~40 UTP + PD 2.15 1.91 LLPs Bad Loans 2024-2026 NPEs sold in NPEs sold in 1.60 1.28 Original NPE 9M 24 Oct 24 -21.3% disposal plan €m 31/12
Slide 18: Optimization and diversification of Debt Securities portfolio
Optimization and diversification of Debt Securities portfolio TREND AND BREAKDOWN BY ACCOUNTING CATEGORY COMPOSITION BY COUNTERPARTY € bn € bn 31/12/23 30/06/24 30/09/24 42.5 42.9 6.1 8.1 8.1 Non-Govies 1.3 1.1 36.5 0.5 11.8 13.1 FVTPL Govies 30.4 34.4 34.8 10.4 FVOCI 60.2% 61.0% Non-IT Govies 63.9%
Slide 19: Positive trend in FVOCI debt reserves and Net Financial Result
Positive trend in FVOCI debt reserves and Net Financial Result RESERVES OF DEBT SECURITIES BREAKDOWN OF NET FINANCIAL RESULT: AT FVOCI1 STRONG CONTRIBUTION FROM HEDGING STRATEGIES Post-tax EVOLUTION Y/Y DETAILS Q/Q €m Total Net -65.3 +6.0 Other NFR Components ▪ Benefitting from 31/12/23 30/06/24 30/
Slide 20: Strong liquidity & funding position
Strong liquidity & funding position Cash + Unencumbered Assets: +€7.5bn in 9M 30/06/24 30/09/24 € bn 49.4 45.1 Cash 41.9 0.5 Remix in liquidity LCR 153% 0.6 0.5 8.1 140% Depo facility with ECB 10.2 components driven by 17.4 TLTRO reimbursement in HQLA1 €26.3bn €28.2bn Eligible Assets 36.4 29.0 Q1 an
Slide 21: Strong internal capital generation: CET 1 ratio improving to 15.48%
Strong internal capital generation: CET 1 ratio improving to 15.48% Further significant enhancement of ratios and buffers YTD CET 1 RATIO EVOLUTION: +132BPS IN 9M 2024 % +300bps -210bps -49bps +12bps +28bps +52bps 15.48 14.16 Including +88bps from Numia transaction 31/12/23 9M 2024 Dividends Impact
Slide 22: Final Remarks
Final Remarks 3
Slide 23: Excellent 9M 24 performance: another step towards our targets' achievement
Excellent 9M 24 performance: another step towards our targets’ achievement CAPITAL & REMUNERATION: NET INCOME: RESILIENT OUTLOOK CONTINUING OVERDELIVERY Progressive 2024 EPS guidance improvement, … supporting long- CET1 Ratio above Plan landing point2: despite declining 3M Euribor expectations… term
Slide 24: 9M 2024 Performance Details
9M 2024 Performance Details 4
Slide 25: P&L: Quarterly comparison
P&L: Quarterly Reclassified income statement (€m) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Chg. Q/Q Chg. Q/Q % comparison Net interest income Income (loss) from invest. in associates carried at equity 743.0 36.3 809.9 24.3 868.7 34.1 867.7 49.4 864.4 30.3 858.4 44.6 861.9 31.1 3.5 -13.4 0.4% -30.1%
Slide 26: P&L: 9M comparison
P&L: 9Mcomparison Reclassified income statement (€m) 9M 23 9M 24 Chg. Y/Y Chg. Y/Y % Net interest income 2,421.6 2,584.7 163.1 6.7% Income (loss) from invest. in associates carried at equity 94.7 106.1 11.3 11.9% Net interest, dividend and similar income 2,516.3 2,690.8 174.4 6.9% Net fee and commis
Slide 27: P&L 9M 2024: comparison of stated vs. adjusted
P&L 9M 2024: Reclassified income statement (€m) 9M 24 9M 24 Adjusted One-off Non-recurring items Net interest income 2,584.7 2,584.7 0.0 comparison of Income (loss) from invest. in associates carried at equity Net interest, dividend and similar income 106.1 2,690.8 106.1 2,690.8 0.0 0.0 stated vs. a
Slide 28: Balance Sheet
Reclassified assets (€ m) Chg. Y/Y Chg. YTD Chg. Q/Q Balance Sheet Cash and cash equivalents 30/09/23 17,617 31/12/23 18,297 30/06/24 10,994 30/09/24 9,079 Value -8,538 % -48.5% Value -9,219 % -50.4% Value -1,916 % -17.4% Loans and advances measured at AC 111,926 109,568 105,594 104,694 -7,232 -6.5%
Slide 29: Indirect customer funding up at €114.4bn
Indirect customer funding up at €114.4bn: +14.5% Y/Y; +7.8% YTD and +2.9% Q/Q ASSETS UNDER MANAGEMENT (AuM)1 ASSETS UNDER CUSTODY (AuC) € bn € bn +8.5% +23.5% +5.5% +11.1% +2.1% +4.1% 64.1 65.4 60.3 62.0 4.6 4.7 4.2 4.4 49.1 16.0 16.2 44.2 47.1 15.7 15.7 39.7 40.4 41.9 43.4 44.5 30/09/2023 31/12/202
Slide 30: Total Direct Funding from the Banking business
Total Direct Funding from the Banking business EVOLUTION OF TOTAL DIRECT FUNDING1 € bn Capital-protected Certificates & other 129.8 128.6 Debt Securities at FV 125.6 126.0 REPOs & Other Bonds 100.5 98.8 101.1 97.3 C/A, Sight & Time deposits - (Core Funding) (80.0%) (78.4%) (77.9%) (75.7%) (% Share o
Slide 31: Strong and well diversified liability profile, driven by successful issuance activity
Strong and well diversified liability profile, driven by successful issuance activity BONDS, CERTIFICATES & OTHER DEBT SECURITIES AT FV MREL REQUIREMENTS & BUFFERS outstanding as at 30/09/2024 as at 30/09/2024 Nominal amounts MREL as % of RWA, including Combined Buffer Requirement2 9.5% Senior Prefe
Slide 32: Wholesale bond maturities and calls
Wholesale bond maturities and calls SENIORITY PROFILE OF WHOLESALE BOND MATURITIES1 & CALLS2 UNTIL YE 2026 € bn Calls 0.22 €0.72bn 0.50 0.40 Calls €1.05bn 0.65 2.00 Maturities 0.75 €3.25bn 0.50 Maturities €2.40bn 0.75 Calls 1.15 €0.35bn 0.50 No maturities Sept-Dec. 2024 FY 2025 FY 2026 Senior Pref.
Slide 33: Net Customer Loans at Amortized Cost
Net Customer Loans at Amortized Cost EVOLUTION OF NET CUSTOMER LOANS € bn -6.2% -0.6% Change Net Performing Customer Loans 30/09/23 31/12/23 30/06/24 30/09/24 In % Y/Y In % YTD In % Q/Q 108.0 105.4 102.0 101.4 Core customer loans 99.1 96.9 95.3 95.1 -4.0% -1.8% -0.2% 2.0 1.9 1.7 - Medium/Long-Term l
Slide 34: Analysis of Commercial Real Estate exposure as at 30/09/2024
Analysis of Commercial Real Estate exposure as at 30/09/2024 Highly secured, concentrated in low-mid risk rating classes and in the North of Italy GBV, in € bn Performing In % on total SAFE RISK PROFILE: Exposure Perf. loans • 89% Secured (€6.5bn) Construction of buildings1 2.96 3% • 84% in Low-Mid
Slide 35: Asset Quality details
Asset Quality details Loans to Customers at AC Gross exposures 30/09/2023 31/12/2023 30/06/2024 30/09/2024 Chg. Y/Y Chg. YTD Chg. Q/Q € m and % Value % Value % Value % Bad Loans 1,630 1,601 1,545 1,282 -348 -21.3% -319 -19.9% -262 -17.0% UTP 2,169 2,056 1,697 1,703 -466 -21.5% -352 -17.1% 6 0.4% Pas
Slide 36: NPE migration dynamics
NPE migration dynamics €m 354 296 €249m excl. one big ticket Inflows from 231 260 202 286 212 inflow in Q3 Performing to NPEs Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 €m Outflows from NPEs 42 38 22 37 24 36 17 to Perf. Loans Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 €m Flows from UTP to 102 84 46 3
Slide 37: Focus on Govies portfolio of the Banking Business
Focus on Govies portfolio of the Banking Business Italian Govies at AC Italian Govies at FVOCI Italian Govies at FVTPL € bn € bn € bn +16.0% -24.2% +627% -0.4% +6.6% 8.7 11.0 10.9 -22.0% 9.4 2.5 2.1 1.8 1.9 0.9 0.7 0.1 0.1 30/09/23 31/12/23 30/06/24 30/09/24 30/09/23 31/12/23 30/06/24 30/09/24 30/09
Slide 38: Capital position in detail
Capital position in detail FULLY LOADED CAPITAL FULLY LOADED RWA 30/09/2023 31/12/2023 30/06/2024 30/09/2024 30/09/2023 31/12/2023 30/06/2024 30/09/2024 POSITION (€ m and %) COMPOSI TI ON (€ bn) CET 1 Capital 8,381 9,036 9,438 9,583 CREDI T & COUNTERPARTY RI SK 49.6 54.2 53.0 52.7 T1 Capital 9,771 1
Slide 39: Definitions of key indicators included in the presentation
DEFINITIONS OF KEY INDICATORS INCLUDED IN THE PRESENTATION INDICATOR DEFINITION CASH + UNENCUMBERED ASSETS Including assets received as collateral, net of accrued interests. M anagerial data, net of haircuts CORE REVENUES Core Revenues: NII + Net Commissions + Income from Associates and Income from
Slide 40: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Arne Riscassi Banco BPM +39 02 9477.2091 Registered Offices: Piazza Meda 4, I-20121 Milano, Italy Tom Lucassen Corporate Offices: Piazza Nogara 2, I-37121 Verona, Italy +39 045 867.5537 Silvia Leoni +39 045 867.5613 investor.relations@bancobpm.it Carmine
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