Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT - Correios de Portugal — Non-Deal Roadshow (September 2023)
41 slides from Ctt - Correios De Portugal Sa's roadshow presentation, Sep 29, 2023
Slide 1: Banco CTT: growth and profitability
Banco CTT: growth and profitability Lisbon, 28-29 September 2023
Slide 2: Disclaimer
Disclaimer DISCLAIMER This documenthas been prepared by CTT ~ Correios de Portugal, S.A. (the "Company" or"CTT") exclusively for use during the summer23 roadshow. Asa consequence thereof, this documentmay notbe disclosedor published, nor used by any other person or entity, for any other reason or pu
Slide 3: Banco CTT launched in 2016 on a differentiated value proposition
Banco CTT was launched in 2016 on a differentiated value proposition that remains compelling CTT brand awareness CTT retail network 569 212 All 308 65k unique client visits >80% share CTT’s brand awareness, reputation and coverage of the retail network, are unique
Slide 4: Banco CTT is the fastest growing banking franchise in Portugal
Banco CTT is the fastest growing banking franchise in Portugal Aug’20: 500,000 accounts, close to 2 Bn€ total assets Oct’18: Introduction of off-balance sheet saving products Jan’17: 202 branches in operation, launch of May’19: Acquisition of Nov’22: mortgage lending 321 Crédito Apr’21: Insurance p
Slide 5: A clear strategy rendered a proven business model
A clear strategy… rendered a proven business model 2022 104 15 625k current 31 accounts 2021 101 16 2020 66 0 +74.3% 3,288 €m 2019 46 -8 deposits & off- balance AUM’s 2018 19 -17 2017 6 -21 1,795 €m 2016 1 -21 retail credit book 2015 0 -6 … enabled fast growth and achieving profitability
Slide 6: BCTT remains focused on client growth and engagement
BCTT remains focused on client growth and will double-down efforts on engagement Client Client NII Sustainable growth x engagement x expansion = PBT growth • • • • • • • Enhancing Improving IT capabilities sales force Extensive retail network Operations and risk management Solid capital structure Bu
Slide 7: Building a sizable and profitable franchise
Building a sizable and profitable franchise
Slide 8: BCTT launched in 2016 focusing on simple, competitive retail banking
BCTT was launched in 2016, focusing on simple, competitive, retail banking, by leveraging CTT historical network and brand A recognized and well trusted brand Simple and low-cost product offer, that is easy to understand and operate Always nearby, combining efficient physical channels, with nationwi
Slide 9: +700,000 clients in 7 years
7 years after inception, BCTT has proven strong attraction power Sizable, high potential franchise… ‒ 700,000 clients (625,000 current accounts), 65% Lisbon/Porto metro areas ‒ Average age 45 years, strong digital adoption +700,000 ‒ Social profile aligned with Portuguese mass-market (e.g. average m
Slide 10: Increased focus on BCTT franchise earning power
Last 12 months have been particularly eventful, bringing increased focus on “BCTT franchise earning power” Sea change in monetary context… New monetary context translates (Euribor 12 months rates) directly into more earning power, 4.1% particularly on “classical balance sheet business”… 1.0% …Bringi
Slide 11: Strategy update increases focus on BCTT franchise
Given this context, strategy update increases focus on BCTT franchise, while doubling down investment on its key platforms Same 3 “growth Monetize Excel in Grow selectively themes”, but with customer base savings on credit emphasis on Increase engagement, Leverage new Generali Focus on “on-franchise
Slide 12: Taking the value ladder
High franchise potential establishes foundation for monetization Taking the value ladder… The following years Current state 1st years • Increased focus on “value per client” and product penetration: • 700,000 clients onboarded, on/off balance sheet savings, high potential profile • Branch network an
Slide 13: Client engagement with room to increase, leading to volume growth
Room to significantly increase franchise volumes, particularly on savings Client engagement with room to increase… …Leading to expressive volume growth Client engagement benchmark1 BCTT’s total client’s resources Execution to be founded on 3 (measured as total resources per client, Euros) (On/off ba
Slide 14: Recent countercyclical execution shows BCTT potential
Recent countercyclical execution shows BCTT potential, already under new monetary context Evolution of total onbalance deposits1 (Retail clients, Billion €) -4.1% Commercial operation well 182.4 geared towards new era, with resurgent “fight for deposits” 174.9 +6.3% 2.4 Market lost more than 4% of d
Slide 15: Credit stocks will keep increasing, with a more selective approach
Credit stocks will also keep increasing, but with a more selective approach Unrivaled execution in auto loans… …Moderating pace going forward BCTT auto loans market share evolution BCTT’s on balance credit stock Going forward, significant (measured in new loans production) (Excluding Universo book,
Slide 16: Significant upgrade on digital platforms
This strategy implies a significant upgrade on digital platforms, bringing BCTT to market best practices BCTT well positioned for faster technologic deployment ‒ Strong digital adoption (+50% of clients actively using digital channels) ‒ Flexible architecture, based on middleware interface, allowing
Slide 17: New digital platform focus on sales and product penetration
New digital platform focus on sales and product penetration >50% From a limited platform, focused on transactionality… …To a complete financial services “digital hub” clients already digitally engaged, ‒ Focus on end-2-end sales processes, both in credit (e.g. pre-evaluated personal loans; with recu
Slide 18: Commercial staff transformation with specialized workforce
Additionally, increased focus on “client engagement” requires commercial staff transformation, with a fully specialized and dedicated workforce… From mostly shared workforce… ‒ Proven ability for account opening and transactional services ‒ Highly synergic value to maintain, releasing productive tim
Slide 19: Adjustments to current branch design
…While implementing adjustments to current branch design Current branches with limited privacy levels and working areas, essential to engage deeper client interactions and “fight for product penetration” Revamped “BCTT hubs” to be launched in most productive locations… ‒ Increase BCTT working area,
Slide 20: Revisited scaleup strategy and 2025 guidance
In short, a revisited scaleup strategy, underpinned on intrinsic franchise value and core platforms upgrade BCTT franchise value is a reality 2025 guidance Sizeable franchise, with increased client Going forward, our obsession will be client engagement… engagement… 825-875k clients (700-750k current
Slide 21: Scaling up for profitable and sustainable growth
Scaling up for profitable and sustainable growth
Slide 22: Increased profitability momentum with value creation
Increased profitability momentum with value creation As % of 11-13 14.5% 15.0% RWA 179 6 8.3 7 16 5.5 150 Includes contribution from 4.6 specific items 2.2 2021 1H22 2022 1H23 2025 2021 RoTE Variation in Other 1H23 target Intangibles effects @CMD Strong progress in ROTE, ahead of … with Tangible Equ
Slide 23: Significant expansion of ROTE aligned with CMD aspiration
Significant expansion of ROTE, with main trends aligned with CMD aspiration 2025 aspiration @CMD, recordatory 2.7 5.7 0.7 8.3 9.8 2.2 2021 Revenue Efficiency Loan losses Taxes & 1H23 gains Others Net Profit Only (ex-specific 3.2 7.2 half-year items) - €m
Slide 24: CTT acquired Payshop from Banco CTT
To align the payments strategy in the context of e-commerce value proposition, in August, CTT acquired Payshop from Banco CTT Prior • CTT aims at integrating Payshop with its e-commerce strategy of becoming an Iberian e-commerce powerhouse CTT • Last 11 August, CTT SA acquired 100% of Payshop, a pay
Slide 25: Increasing operational jaws and stable impairments
Increasing “operational jaws” and stable impairments +€3.3m +€4.8m 4.3 3.8 29.5 28.5 PBT 27.7 3.0 25.1 Revs 2.6 2.4 23.7 22.2 0.9 +€2.2m 18.0 18.2 18.0 +€2.8m 16.4 Opex 15.7 15.8 3.8 2.9 2.3 -€0.8m 1.7 1.5 Net Income 7.0 7.7 6.4 1.0 6.3 6.2 Imp. & 3.9 Provs 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q
Slide 26: Strong revenue momentum driven by Net Interest Income
Strong revenue momentum driven by Net Interest Income +€5.6m 23.7 Net 22.0 • Strong increase growth (+31% y.o.y) driven by 20.9 19.1 Interest 18.0 higher interest rates primarily. NII 16.4 income • Positive underlying evolution of account and card -€0.2m Net commissions and in auto business fees 5.8
Slide 27: Business growth anchored on a solid and liquid balance sheet
Business growth anchored on a solid and liquid balance sheet Jun 2023 CAGR vs. 2021 Loans to customers 1,795 +8% Liquidity 0.7 Bonds 0.4 Customer 2.4 Deposits Loans to 1.8 customers 0.4 Securitizations 0.1 Other Other 0.2 0.3 Equity Assets Liabilities & Equity Stronger growth in core segments agains
Slide 28: Customer deposits focus translating into volume expansion
Strategic focus on customer deposits starting to translate in volume expansion +8% 2,388 BCTT Market 2,243 2,278 2,245 2,210 Retail Deposits Deposits of Individuals 2,166 +6% -4% 1,431 1,610 1,629 1,608 1,413 1,536 797 957 630 633 649 637 Beta vs. EUR 6M 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 0.38 0.17 0.02
Slide 29: Positive rate environment translating into financial margins
Positive rate environment translating into financials margins NII +31.2% 23.7 3.0% 20.9 22.0 18.0 19.1 16.4 2.5% +0.7% -0.2% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 Securitization NIM (ex-Sec.) 2Q23 +0.5pp 2.9% 3.0% 2.6% NIM • Steady quarterly NII increase, despite the impact of Jun-22 2.4% 2.5% 2.4% sec
Slide 30: Increasing efficiency levels despite investment in growth
Increasing efficiency levels, despite the investment in growth +13.9% +18% +20% Opex 18.0 18.2 18.0 15.7 15.8 16.4 490 120 415 100 Financial Transactions FTEs (rebased) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 2Q23 2Q22 2Q23 71% -3pp • Main drivers CIR 67% 65% 66% • (i) headcount increase, namely commerci
Slide 31: Impairment & Provisions charges stabilising
Impairment & Provisions charges stabilising notwithstanding the cycle 7.7 7.0 6.3 6.4 6.2 NPE, €m 3.9 NPE 7.6 7.0 6.3 6.4 6.1 Coverage Credit 3.7 Other 0.1 0.1 -0.1 0.0 0.1 0.1 NPE ratio, excluding credit cards, -0.4pp increasing but under control 1.7% 1.7% 1.5% 1.4% 1.3% Cost of Risk excluding cred
Slide 32: Active management of the capital position
Active management of the capital position +14% 1,193 15.4 2.1 15.6 3.5 0.4 0.4 1,043 1.6 Total Capital Ratio is 100% composed by CET1 FY21, EoP Net Income Business Securitisation Securitisation Other 1H23, EoP 2021 1H23 RWA growth Issue scheduled redemption
Slide 33: Key messages on guidance
Key messages on guidance 1 Accelerated business Volumes… 2 …Reinforcement of capital position… 3 …While delivering on business profitability
Slide 34: Growth acceleration in business volumes anchored on client resources
1 Growth acceleration in business volumes anchored on client resources +16% >5,000 +12% 3,175 >7,000 2,831 +15% • Targeting 700-750k client accounts by 2025 +13% • Grow across the client’s business, 4,722 2021 2022 2023 2024 2025 namely in customer resources 4,192 (deposits and off-balance sheet) +9
Slide 35: Capital position to be materially reinforced
2 Capital position to be materially reinforced, supporting the bank position Material one-off positive impacts 24.1 Envisaged two significant positive one-offs in BCTT’s capital position: 2.9 5.6 15.6 Capital expected to be retained • • • 1H23 Universo Exit Generali Proforma • A proforma CET1 ratio
Slide 36: Projected 2025 double digit business RoTE
3 Taking advantage of favorable context and opportunity to invest for a new sustainable growth phase while de-risking the loan book -7-8 Above CMD comparable aspiration: 10-12% +8-10 +8-9 11-13 -3 7.1 4.4 0.8 2021 2022 1H23 Revenue Loan losses Opex Taxes & 2025 Main macro assumption: benign economic
Slide 37: Increasing profitability translated in PBT growth
3 Increasing profitability translated in PBT growth • • 2021 2022 2023 2024 2025 Above CMD comparable aspiration: 10-12% Projected 2025 double digit returns ahead of CMD aspiration, on a comparable basis 1Comparable RoTE calculated excluding specific items assuming a Tangible Equity of 15% of averag
Slide 38: Focus on client growth and double-down efforts on engagement
Focus on client growth and double-down efforts on engagement Improved sales force Client Client NII Sustainable growth x engagement Enhanced x expansion = PBT growth IT capabilities Business volumes and increased engagement enable growth with an improved risk profile
Slide 39: Key take-aways
Key take-aways Strong execution and good tailwinds… BCTT upgraded key ambitions 2025 … which accommodate new investments on core operating platforms, without jeopardizing profitability commitment… … and offer higher degree of freedom for BCTT’s capital strategy A scaleup strategy for a sustainable a
Slide 40: A scaleup strategy for a sustainable and profitable banking business
Strong execution and tailwind… BCTT key ambitions 2025 A scaleup strategy for a … accommodate new investments on core operating platforms, without jeopardizing profitability commitment… sustainable and profitable … and offer higher degree of freedom for BCTT’s capital strategy banking business 1Comp
Slide 41: Investor Relations
Investor Relations Phone: +351210 471087 E-mail: investors@ctt.pt ctt.pt Delivering the future by connecting people and businesses in a sustainable way
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