57 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, Aug 5, 2016
Slide 1: FY16 results as at 30 June 2016
FY16 results as at 30 June 2016 Another good year in a tough environment Milan, 5 August 2016
Slide 2: Agenda
Agenda Section 1. FY16 results in a nutshell Section 2. FY16 results - Group performance Section 3. 3YBP concluded - where we are Section 4. Closing remarks – what’s next Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by business as at June 2016 2
Slide 3: FY16. Another good year, in a tough environment
FY16. Another good year, in a tough environment Growth in loan book associated with improved asset quality and high coverage ratios Consolidation of highest-ever top line despite 3 out of 4 really tough quarters for macro-events Growth in NII (up 6%) unparalleled by other Italian banks Growth in GOP
Slide 4: Last 3M. Revenues and net profit up, by 5% and 34%, RWA down 10%
Last 3M. Revenues and net profit up, by 5% and 34%, RWA down 10% In last quarter Mediobanca has successfully achieved: Growth in revenues Resilient NII due to corporate/retail diversification Growth in fees driven by IB and WM Growth in net profit Declining NPLs and bad loans both in stocks and as %
Slide 5: Growth achieved, leveraging on distinctive Mediobanca DNA
Growth achieved, leveraging on distinctive Mediobanca DNA These results have been reached by leveraging on: Sustainable and profitable business model focused on three specialized-diversified banking businesses working efficiently in a low-growth GDP and all-time low interest rate scenario Distinctiv
Slide 6: Agenda
Agenda Section 1. FY16 results in a nutshell Section 2. FY16 results - Group performance Section 3. 3YBP concluded - where we are Section 4. Closing remarks – what’s next Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by business as at June 2016 6
Slide 7: Growth in loans across all segments achieved ...
Growth in loans across all segments achieved ... FY16 results as at 30 June 2016 - MB Group Section 2 FY16: loans up 5% to €34.6bn driven Group loans trend by division (€bn) by all divisions CIB: up 4% with good new business matched by cautious risk appetite 3Y CAGR: +1% Consumer business up 9
Slide 8: … preserving MB distinctive asset quality (in ITA & EU scenario) ...
… preserving MB distinctive asset quality (in ITA & EU scenario) ... FY16 results as at 30 June 2016 - MB Group Section 2 Net NPLs: % of total loans and coverage ratio (%) Texas ratio (Net NPL / CET1, %) Coverage ratio 54% 51% 46% 115% 10,7% 3.5% 37% 2,9% 16% Mediobanca Europe Italy Mediobanca Europ
Slide 9: … unparalleled by other ITA banks in terms of size and trend
… unparalleled by other ITA banks in terms of size and trend FY16 results as at 30 June 2016 - MB Group Section 2 NPLs: MB vs ITA banks (% on loans, coverage ratio) Mediobanca: coverage by division (%) 54% 72% 20 55% 18 45% 46% 16 45% 14 39% 56% 12 50% 10 35% 9,9 49% 8 9,1 47% 6 25% 4 39% 2 3,0 2,9
Slide 10: Growth in funding at reduced cost
Growth in funding at reduced cost FY16 results as at 30 June 2016 - MB Group Section 2 Group funding trend by category (€bn) Average stock cost of funding (“CoF”, bps vs Eur3M) 3Y CAGR: -4% 51.3 6,1 45.8 +8% 45.9 290 42.7 7,5 6,2 9,1 7,9 5,5 5,0 5,5 155 25,9 130 22,6 21,1 115 19,7 105 95 11,9 11,5 9
Slide 11: Highest-ever top line consolidated, effective business diversification
Highest-ever top line consolidated, effective business diversification FY16 results as at 30 June 2016 - MB Group Section 2 Group revenues trend (€m) 3Y CAGR: +8% 2,045 - 2,047 1,819 224 257 1,628 207 133 264 200 450 Driven by CIB and WM 472 424 410 1,143 1,207 Driven by Consumer lending 1,028 1,087
Slide 12: Spectacular NII growth (>€1.2bn) driven by Consumer lending
Spectacular NII growth (>€1.2bn) driven by Consumer lending FY16 results as at 30 June 2016 - MB Group Section 2 Group NII trend (€m) NII trend: MB vs IT banks1 and EU banks2 (100 rebased) 3Y CAGR: +5% +6% 1,207 1,143 1,087 1,028 215 -14% 251 Mediobanca 273 288 149 139 +7% 141 Consumer EU banks 142
Slide 13: Fee income resiliency at Group and CIB levels, WM growing
Fee income resiliency at Group and CIB levels, WM growing FY16 results as at 30 June 2016 - MB Group Section 2 Group fee income trend (€m) CIB fee income trend (€m) 3Y CAGR: +3% 472 -5% 3YCAGR: +5% 424 450 28 410 43 343 23 +57% 15 304 310 147 141 141 269 84 159 -9% 78 91 70 143 69 115 110 343 304 31
Slide 14: WM in MB group: size, visibility and fee contribution enhanced
WM in MB group: size, visibility and fee contribution enhanced FY16 results as at 30 June 2016 - MB Group Section 2 MB WM composition by business (€bn) 3YCAGR: +30% 34.7 CMB Spafid 50%BE Cairn CheBanca! 7,1 20% Retail +60% 3.2 Barclays 24% 21.6 8,1 Institutional 17.9 2,9 15.9 1,5 0,7 8,4 8,8 7,2 7,8
Slide 15: Deflated CoR coupled with increased coverage
Deflated CoR coupled with increased coverage FY16 results as at 30 June 2016 - MB Group Section 2 LLPs and cost of risk by segment (€m, bps) NPLs (“deteriorate”), Unlike to pay (“incagli e ristrutturati”), Bad Ls (“sofferenze”) 461 407 Net stock - €m June15 March16 June16 360 317 NPLs 1,152 1,055 1,
Slide 16: GOP up 11% in FY16
GOP up 11% in FY16 FY16 results as at 30 June 2016 - MB Group Section 2 MB Group FY16 operating profit¹ (€m) +11% 114 (22) FI disposals 841 105 (104) 33 (74) (45) 64 736 736 666 GOP NII AG LLPs Fee Treasury Total GOP Net equity PBT SRF PBT FY15 income income costs FY16 disposals FY16 contribution FY
Slide 17: CET1 at 12.1% with RWA optimization and 50% of AG pre-loaded
CET1 at 12.1% with RWA optimization and 50% of AG pre-loaded FY16 results as at 30 June 2016 - MB Group Section 2 RWA trend by division (€bn) CET1 phase-in trend (bps) -10% 12.0% 12.1% +25bps +60bps -75bps 59.6 53.9 YoY 12,1 +1.8 (2.4) (5.1) 13,9 11,7 June15 Retained RWA AG June16 6,6 earnings optim
Slide 18: Changes in regulation fully addressed: CET1 at all times well > 12%
Changes in regulation fully addressed: CET1 at all times well > 12% FY16 results as at 30 June 2016 - MB Group Section 2 CET1 ratio trend (%) 13.2% 12.5% 12.5% 12.6% K management 12.0% 12.1% >12% 11.7% 11.1% 9.00% SREP 8.75% June13 B2 June14 B3 June15 June16 June17 June18 June19 CET1 phase-in CET1 f
Slide 19: Mediobanca: best in class in stress test exercise in EU landscape
Mediobanca: best in class in stress test exercise in EU landscape FY16 results as at 30 June 2016 - MB Group Section 2 Transitional CET1 capital ratio starting 2015 (%), 2018 (%) and delta to starting 2015 (bps) Delta EBA sample¹ (MB excluded) Dec15 Adverse Dec18 SREP Dec18 adv.-Dec15 Mediobanca 12.
Slide 20: Group ROTE >7%
Group ROTE >7% FY16 results as at 30 June 2016 - MB Group Section 2 FY13 FY14 FY15 FY16 GROUP ROTE Neg. 6.4% 7.2% 7.4% CET1 11.7% 11.1% 12.0% 12.1% CIB ROAC¹ 8% 6% 8% 5% RCB ROAC¹ 5% 5% 11% 17% of which Consumer lending ROAC¹ 10% 9% 15% 20% of which Retail banking ROAC¹ neg. neg. neg. 5% PI ROAC¹ 46
Slide 21: Shareholders’ remuneration: DPS at €0.27, up 8%
Shareholders’ remuneration: DPS at €0.27, up 8% FY16 results as at 30 June 2016 - MB Group Section 2 D € FY14 FY15 FY16 16/15 EPS 0.54 0.68 0.69 +2% Cash DPS 0.15 0.25 0.27 +8% BVPS 9.0 9.9 9.9 - Total dividend paid 127m 213m 231m +8% Shares number 861m 867m 871m - Stated payout 27% 36% 38% +2pp Gro
Slide 22: Agenda
Agenda Section 1. FY16 results in a nutshell Section 2. FY16 results - group performance Section 3. 3YBP concluded - where we are Section 4. Closing remark – what’s next Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by business as at June 2016 22
Slide 23: Mediobanca mission
Mediobanca mission 3YBP concluded - where we are Section 3 Mediobanca aims to be: a simpler, more valuable banking group focused on three growing, specialized banking businesses delivering sustainable profitability over the cycle by: 1 Reducing equity exposure and optimizing use of capital 2 Investi
Slide 24: BP13-16: strategic vision delivered in a much tougher environment
BP13-16: strategic vision delivered in a much tougher environment 3YBP concluded - where we are Section 3 Simplify business model In last 3Y €1.5bn disposals, with €0.5bn capital gains Low earnings visibility due to AFS equity valuation being removed Reduce equity exposure AG 3pp disposal started,
Slide 25: Divisional BP13-16 strategic guidelines
Divisional BP13-16 strategic guidelines 3YBP concluded - where we are Section 3 CORPORATE & INVESTING BANKING PRINCIPAL INVESTING Confirm validity of specialized, client-oriented Redeploy capital from equity to banking business business model Remove low Group EPS/DPS visibility Consolidate leade
Slide 26: CIB: validity of specialized boutique model confirmed
CIB: validity of specialized boutique model confirmed 3YBP concluded - where we are Section 3 Corporate and Private Banking Specialized, niche, Domestic leadership confirmed, recognition empowered in southern EU countries client-oriented Growth in fees (3YCAGR: +5%) due to diversified client-foc
Slide 27: Principal Investing: equity exposure definitively reduced
Principal Investing: equity exposure definitively reduced 3YBP concluded - where we are Section 3 Principal Investing AFS portfolio shrunk by €1.5bn BV, with €0.5bn capital gains Group EPS & DPS low visibility FY14: €840m disposals, with €240m capital gains due to AFS equity valuation definitive
Slide 28: Consumer banking: countercyclical, growing steadily, high profitable
Consumer banking: countercyclical, growing steadily, high profitable 3YBP concluded - where we are Section 3 Consumer Banking- Compass Top 3 positioning in Italy (11% mkt share, 17% in personal loans) Managing leadership with a value-driven Enlarged distribution (7K bank branches, up 50% in last
Slide 29: Retail Banking: CheBanca! definitively a profitable wealth manager
Retail Banking: CheBanca! definitively a profitable wealth manager 3YBP concluded - where we are Section 3 Retail banking - CheBanca! Recognized innovative multichannel operator in Italy DNA changed: “Human” digital robot-advisory model launched from deposit gatherer to Wide client base to be
Slide 30: Agenda
Agenda Section 1. FY16 results in a nutshell Section 2. FY16 results - group performance Section 3. 3YBP concluded - where we are Section 4. Closing remarks – what’s next Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by business as at June 2016 30
Slide 31: MB: distinctive DNA and unique positioning create base for growth
MB: distinctive DNA and unique positioning create base for growth Closing remarks: what’s next Section 4 No business model No asset quality No capital/leverage reshuffle needed concern ratio concern No cost No litigation or restructuring reputational issues concern Set for growth in all businesses 3
Slide 32: What’s next
What’s next Closing remarks: what’s next Section 4 Revenues: client business fees resilience, opportunities in M&A and ECM CIB businesses; NII hammered by lower Euribor expectations Business resilience First beneficiary of function revision process between holding company and coupled with RWA an
Slide 33: FY16 results as at 30 June 2016
FY16 results as at 30 June 2016 Milan, 5 August 2016
Slide 34: Annexes
Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by segment 34
Slide 35: MB Group: A&L by quarters
MB Group: A&L by quarters FY16 results - quarterly segmental focus and reporting tables Annexes D D A&L - €bn June16 Mar16 Dec15 Sept15 June15 QoQ1 YoY1 Funding 45.9 45.5 44.3 44.2 42.7 +1% +8% Bonds 21.1 21.1 20.8 20.6 19.7 -0% +7% Retail direct deposits 10.7 10.4 10.4 10.5 9.6 +3% +11% ECB 5.0 5.5
Slide 36: MB Group: A&L last 4Y
MB Group: A&L last 4Y FY16 results - quarterly segmental focus and reporting tables Annexes A&L - €bn June16 June15 June14 June13 Funding 45.9 42.7 45.8 51.3 Bonds 21.1 19.7 22.6 25.9 Retail direct deposits 10.7 9.6 11.5 11.9 ECB 5.0 5.5 5.5 7.5 Others 9.1 7.9 6.2 6.1 Loans to customers 34.6 32.9 30
Slide 37: Group P&L by quarters
Group P&L by quarters FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q P&L - €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 2,047 2,045 0% 528 503 509 507 530 Net interest income 1,207 1,143 6% 301 301 302 303 303 Fee income 450 472
Slide 38: Group P&L last 4Y
Group P&L last 4Y FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M 12M 12M P&L - €m June16 June15 June14 June13 Total income 2,047 2,045 1,819 1,628 Net interest income 1,207 1,143 1,087 1,028 Fee income 450 472 424 410 Net treasury income 133 207 45 200 Equity accounted
Slide 39: CIB results
CIB results FY16 results as at 30 June 2016 - MB Group Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 639 776 -18% 142 179 170 148 153 Net interest income 215 251 -14% 45 52 57 61 66 Fee income 310 343 -9% 71 75 99 65 82 Net treasury income 113 1
Slide 40: Wholesale results
Wholesale results FY16 results as at 30 June 2016 - MB Group Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 497 644 -23% 104 143 134 116 123 Net interest income 178 218 -18% 35 43 47 52 58 Fee income 219 259 -15% 47 51 76 46 61 Net treasury incom
Slide 41: Private Banking results
Private Banking results FY16 results as at 30 June 2016 - MB Group Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 142 132 7% 39 36 36 31 31 Net interest income 37 34 11% 10 9 9 9 8 Fee income 91 84 9% 25 24 24 19 21 Net treasury income 13 15 -13%
Slide 42: Retail and Consumer Banking results
Retail and Consumer Banking results FY16 results as at 30 June 2016 - MB Group Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 1,117 1,008 11% 304 276 272 265 262 Net interest income 933 833 12% 241 235 230 226 221 Fee income 184 175 5% 62 42 41 3
Slide 43: Consumer banking: Compass results
Consumer banking: Compass results FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 925 841 10% 255 229 223 218 216 Net interest income 784 694 13% 205 198 193 188 184 Fee income 141 147
Slide 44: Retail banking: CheBanca! results
Retail banking: CheBanca! results FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 192 167 +15% 49 47 49 48 46 Net interest income 149 139 +7% 36 37 37 38 37 Fee income 43 28 +57% 13 10
Slide 45: CheBanca! AUM/AUA up 38% (to €3.9bn), fees up 57% (to €43m)
CheBanca! AUM/AUA up 38% (to €3.9bn), fees up 57% (to €43m) FY16 results as at 30 June 2016 - MB Group Annex CheBanca! Customer assets breakdown trend since June 16 (€bn) % on total AUA/AUM up 38% 14.7 % on total asset asset 1,1 1,9 12.5 (1.2) 1.3 3.9 AUA/AUM 27% 1,0 1,1 23% AUA/AUM 2.9 0,9 0,9 0,9
Slide 46: Principal Investing results
Principal Investing results FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 284 254 +12% 90 41 65 89 109 Gains from disposals 120 123 -3% 23 5 3 88 7 Impairments (18) (21) -14% (1) (5)
Slide 47: Principal Investing: main equity investments
Principal Investing: main equity investments FY16 results - quarterly segmental focus and reporting tables Annexes % ordinary share June 2016 Book value €m AFS reserve of capital Assicurazioni Generali 13% 3,092 n.m.1 Atlantia 2.71% 500 198 Italmobiliare 9.5% 66 32 RCS Mediagroup 6.2% 26 6 Other lis
Slide 48: Corporate Centre results
Corporate Centre results FY16 results - quarterly segmental focus and reporting tables Annexes 12M 12M D 2Q 1Q 4Q 3Q 2Q €m June16 June15 YoY1 June16 Mar16 Dec15 Sept15 June15 Total income 64 64 1% 15 16 18 16 17 Net interest income 53 55 -3% 12 13 14 14 15 Fee income 11 9 27% 3 3 4 2 2 Total costs (
Slide 49: Annexes
Annexes 1. FY16 results - quarterly segmental focus and reporting tables 2. Asset quality details by segment 49
Slide 50: MB Group Bad Loans (“sofferenze”)
MB Group Bad Loans (“sofferenze”) Asset quality details by business as at June 2016 Annexes Group net bad loans by segment (June 16) Group net bad loans and coverage by segment (June 16, €m, %) 300 Net bad loans: €255 m 92% 55% 48% 67% Net bad loans/net loans: 0.7% 250 WB & Private 66 Leasing bankin
Slide 51: MB Group NPLs (“deteriorate”)
MB Group NPLs (“deteriorate”) Asset quality details by business as at June 2016 Annexes Group net NPLs by segment (June 16) Group net NPLs and coverage by category (June 16, €m, %) Net NPLs: €1.0 bn 1.200 67% 48% 64% 54% Net NPLs/net loans: 3.0% 1.000 51 Leasing 23% WB and Private 800 banking 711 60
Slide 52: Wholesale NPLs
Wholesale NPLs Asset quality details by business as at June 2016 Annexes Group net NPLs by segment (June 16) WB1 net NPLs and coverage by category (June 16, €m, %) WB net NPLs: €0.4 bn 600 50% 50% WB net NPLs/net loans: 2.5% 500 Leasing 23% WB and 400 - Private banking 300 37% 379 200 379 Retail Con
Slide 53: Consumer credit NPLs
Consumer credit NPLs Asset quality details by business as at June 2016 Annexes Group net NPLs by segment (June 16) Consumer net NPLs and coverage by category (June 16, €m, %) Consumer net NPLs: €0.3 bn 350 91% 62% 72% 72% Consumer net NPLs/net loans: 2.2% 300 Leasing 250 23% 33 200 WB and 150 135 Pr
Slide 54: Retail banking NPLs
Retail banking NPLs Asset quality details by business as at June 2016 Annexes Group net NPLs by segment (June 16) Retail net NPLs and coverage by category (June 16, €m, %) Retail net NPLs: €0.1 bn 55% 30% 32% 49% Retail net NPLs/net loans: 3.0% 160 140 4 Leasing 120 44 23% 100 WB and 80 149 Private
Slide 55: Leasing NPLs
Leasing NPLs Asset quality details by business as at June 2016 Annexes Group net NPLs by segment (June 16) Leasing net NPLs and coverage by category (June 16, €m, %) Leasing net NPLs: €0.2 bn 250 48% 23% 13% 32% Leasing net NPLs/net loans: 9.2% 11 200 Leasing 23% 150 153 WB and 230 Private 100 banki
Slide 56: Disclaimer
Disclaimer This presentation contains certain forward-looking statements, estimates and targets with respect to the operating results, financial condition and business of the Mediobanca Banking Group. Such statements and information, although based upon Mediobanca’s best knowledge at present, are ce
Slide 57: 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 57