Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca - Banca di Credito Finanziario — FY2020 Earnings Presentation
58 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, Jul 30, 2020
Slide 1: Mediobanca FY20 Results as at 30 June 2020
MEDIOBANCA FY20 RESULTS AS AT 30 JUNE 2020 Milan, 30 July 2020
Slide 2: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 3: Steady, consistent progress made in implementing BP19-23
MEDIOBANCA STEADY, CONSISTENT PROGRESS MADE IN IMPLEMENTING BP19-23 Executive summary Section 1 Covid-19 impact managed successfully, confirming validity of business model: MB strongly positioned in resilient segments: households & large-mid caps and fee-driven capital light businesses MB moved from
Slide 4: …in the new macro environment
…IN THE NEW MACRO ENVIRONMENT Executive summary Section 1 Macro factors Economic and sector trends Covid-19 & lockdown deeply impacting Financial markets recovering1 GDP globally BTP Spread Itraxx VIX Euro Stoxx +115bps Jan-Mar20 +95bps Jan-Mar20 +6x Jan- Mar20 -33% Jan-Mar20 +15bps YtD +15bps YtD +
Slide 5: Solid 4Q/FY20 results: snapshot
SOLID 4Q/FY20 RESULTS: SNAPSHOT Executive summary Section 1 Mediobanca Group – FY results: 12M as at June (€) Wealth Management – FY results: 12M as at June (€) Revenues Cost/income CoR ROTE adj Revenues Net profit TFA / NNM ROAC FY20: 2.5bn FY20: 47% FY20: 82bps FY20: 10% FY20: 584m FY20: 80m FY20:
Slide 6: BP19/23 strategy, shareholders' remuneration, targets confirmed, now including Covid impact
BP19/23 STRATEGY, SHAREHOLDERS’ REMUNERATION, TARGETS CONFIRMED, NOW INCLUDING COVID IMPACT Shift to capital-light fee Revenue growth in a Enhanced return to business challenging environment shareholders Targeting industry-leading performance CET1 ratio progressively Revenues growth Earnings growth
Slide 7: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 8: Financial markets recovering nicely…
FINANCIAL MARKETS RECOVERING NICELY… 4Q - Group results Section 2 Euro Stoxx 600 VIX +6x since Jan-20 450 -13% YtD 90 410 -33% since 75 Jan-20 60 +80% YtD 370 366 45 330 30 25 290 15 250 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 BTP/Bund spread 5Y a
Slide 9: …as is Italian households' behaviour
…AS IS ITALIAN HOUSEHOLDS’ BEHAVIOUR 4Q - Group results Section 2 TFA MORTGAGE CONSUMER LENDING Net New Money mix switched to AUM/AUA New business recovering fast since the end Strong, proven advisors’ capability in New business back to pre-Covid levels of lockdown, now back to ~90% assisting client
Slide 10: Some upturn of activity also in IB industry
SOME UPTURN OF ACTIVITY ALSO IN IB INDUSTRY 4Q - Group results Section 2 Italy ($bn, announced) Core Markets ($bn, announced) M&A recovery ground to a halt in Mar20, with deals 26.3 delayed or 6.5 5.0 suspended. 14.0 3.0 10.0 Apparently "V 1.5 1.5 6.1 6.3 0.7 3.4 shaped" recovery in Jun20 Jan-20 Feb
Slide 11: Mediobanca monthly activity: WM trend confirmed as solid…
MEDIOBANCA MONTHLY ACTIVITY: 4Q - Group results WM TREND CONFIRMED AS SOLID… Section 2 Net New Money by product TFAs trend (€bn) (Affluent & Private, €bn) NNM in 4Q +6% QoQ €2.1bn 1.1 +2.1 +2.0 63.6 NNM in 3Q 60.2 €1.1bn 0.2 (0.7) 23.8 22.4 0.6 0.4 0.4 0.3 0.9 0.4 0.3 0.3 37.8 39.8 0.3 0.4 0.4 0.3 0
Slide 12: …with corporate & retail towards normalization faster than expected
…WITH CORPORATE & RETAIL TOWARDS NORMALIZATION FASTER THAN EXPECTED 4Q - Group results Section 2 Corporate new loans (€bn) Mortgages new loans (€bn) Consumer new loans (€bn) Term loan 3Q 3Q 3Q RCF €0.5bn €1.7bn €1.8bn 4Q €0.4bn 4Q €0.8bn 4Q €1.1bn 0.8 0.20 0.6 0.7 0.17 0.15 0.14 0.1 0.1 0.11 0.4 0.4
Slide 13: No worries on asset quality
NO WORRIES ON ASSET QUALITY Q4 - Group results Section 2 Loans under moratoria Details on Consumer Banking moratoria (€m) Expired €0.7bn Outstanding: €0.6bn Gross carrying amount (€bn, June20)¹ o/w 85% back to regular payments Total o/w >3M <3M >6M 294 granted expired <6M 230 239 MB Group 2.6 0.7 40
Slide 14: 4Q ordinary profits sufficient to cover all one-off FY20 items
4Q ORDINARY PROFITS SUFFICIENT TO COVER ALL ONE-OFF FY20 ITEMS 4Q - Group results Section 2 One-off items and Covid-19 impact 4Q/FY20 results One-off items MB Group FY19 FY20 FY20 Var % adj. Var % 4Q20 4Q20 €m €m €m adj.1 19/20 19/20 stated adj.1 Income from AG (45) Revenues 2,525 2,513 2,605 +3% -
Slide 15: Solid 4Q/FY20 results
SOLID 4Q/FY20 RESULTS 4Q - Group results Section 2 Financial results Highlights 12m D 4Q 3Q 4Q Impressive 4Q20 results, above expectations €m June20 YoY1 June20 Mar20 June19 Strong resilience in revenues Total income 2,513 -0% 606 582 641 NII stable with impressive trend in Consumer B. despite Covid
Slide 16: Resilient core revenues
RESILIENT CORE REVENUES 4Q - Group results Section 2 Group revenues trend by source (€m, 3M) NII trend by division (€m, 3M) - 349 359 362 360 361 684 +4% 68 69 67 67 69 Other 641 641 66 69 69 66 67 606 CIB 136 48 582 96 55 224 235 239 237 237 WM 57 66 46 35 48 Consumer 174 4Q19 1Q20 2Q20 3Q20 4Q20 1
Slide 17: GOP comfortably able to cover CoR spike
GOP COMFORTABLY ABLE TO COVER COR SPIKE 4Q - Group results Section 2 Group GOP and LLPs (€m, 3M) Cost of risk by segment (bps) 361 400 402 300 332 333 223 308 193 197 185 282 200 141 85 56 58 100 39 70 37 0 (61) (65) (44) (100) (15) (165) (25) -100 (52) -200 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3
Slide 18: Asset quality remains excellent, provisioning conservative
ASSET QUALITY REMAINS EXCELLENT, PROVISIONING CONSERVATIVE 4Q - Group results Section 2 Mediobanca: coverage ratios remain rigorous post-Covid-19, with increase in stage 2 largely due to moratoria “Performing” - Stage 12 “Performing” - Stage 22 NPLs - Stage 32 o/w Bad Loans2 14.0% 20.0% 120% 0.55% 1
Slide 19: CET1 at 16.1% due to capital generation and new regulatory measures
CET1 AT 16.1% DUE TO CAPITAL GENERATION AND NEW REGULATORY MEASURES Core Tier 1 trend +220bps +10bps +50bps +65bps +30bps 16.1% +30bps +10bps +25bps 14.1% 13.9% DPS DPS DPS € 0.47 € 0.27 €0 CET1 phased-in CET1 phased-in Earnings RWA Valuation Covid measures AG Other Dividend CET1 phased-in June19 Ma
Slide 20: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 21: FY20: business model has proved to be effective and able to cope with new scenario…
FY20: BUSINESS MODEL HAS PROVED TO BE EFFECTIVE AND ABLE TO COPE WITH NEW SCENARIO… FY20 Group performance Section 3 Key priorities post-Covid-19 outbreak Rooting in specialized businesses confirmed Support to corporates and households MB positioned in resilient segments: households & large-mid caps
Slide 22: …well on track on BP19-23 roadmap delivery
… WELL ON TRACK ON BP19-23 ROADMAP DELIVERY FY20 Group performance Section 3 BP19-23 actions/targets Achievements in FY20 ♦ Distribution: >1,400 salespeople (up ~500 in 4Y) ♦ Sale force up by ~90 to over 1K people with high productivity ♦ Client segmentation, brand repositioning ♦ Ongoing customer a
Slide 23: Commercial trajectory on track
COMMERCIAL TRAJECTORY ON TRACK FY20 Group performance Section 3 Loan book up 5% TFAs up 4% NNM: ~€5bn € bn € bn € bn, Affluent&Private +4% +5% +9% +8% 61.4 63.6 46.7 44.4 56.2 9.6 41.1 11.8 5.7 12.4 +4% 18.6 4.9 +11% 17.9 16.1 +11% 30.2 3.9 +10% 27.2 1.3 24.7 3.4 11.4 16% 13.2 1.4 10.4 +10% 3.6 +18%
Slide 24: Revenues: NII and fees up 3% each
REVENUES: NII AND FEES UP 3% EACH FY20 Group performance Section 3 WM and CB up Group revenues resilient CIB and PI delayed +4% +4% = = 2,525 2,513 2,525 2,513 2,419 2,419 +15% 321 -5% 304 -6% 280 +13% 332 313 295 +25% 197 -31% 136 157 - 627 -8% 575 +3% 630 631 622 -2% 611 +4% 547 +7% 584 526 1,359
Slide 25: Costs under control – focus on distribution & IT
COSTS UNDER CONTROL – FOCUS ON DISTRIBUTION & IT FY20 Group performance Section 3 WM and Consumer Banking up for investments Cost flat HF and CIB down +2% 46% 47% +4% 1,162 1,189 18 12 6 1,189 1,162 19 1,115 (27) 165 159 157 +5% 269 +3% 276 582 599 256 434 +4% 451 417 +4% 580 590 +3% 303 285 294 +3%
Slide 26: CoR up to 82bps reflecting macro update, coverage ratios up
COR UP TO 82BPS REFLECTING MACRO UPDATE COVERAGE RATIOS UP FY20 Group performance Section 3 LLPs higher … …to preserve asset quality excellence (€m) +68% +56 Group coverage Consumer coverage +87 o/w 42 from 375 Covid 81% 82% 93% 94% 95% 90.0% 80% 5.00% o/w 64m from Bad loans 96.0% 8.0% +9 Covid 80.0
Slide 27: CSR/ESG path: delivery commenced, well on track
CSR/ESG PATH: DELIVERY COMMENCED, WELL ON TRACK FY20 Group performance Section 3 FY20 non-financial performance Further ESG cornerstones set Several targets already reached, working to consolidate the remaining Employee competences enhanced with avg. training hours up 95% YoY (BPTarget23: 25%) in pa
Slide 28: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 29: Wealth Management
WEALTH MANAGEMENT Be MEDIOBANCA
Slide 30: WM: business model effectiveness confirmed
WM: BUSINESS MODEL EFFECTIVENESS CONFIRMED REVENUE UP 7%, NET PROFIT UP 13%; ROAC@19% FY20 Divisional results - WM Section 4 Financial results Highlights Business model effectiveness confirmed in the new 12m D €m June20 YoY1 4Q20 3Q20 4Q19 environment: Total income 584 +7% 140 145 138 Digitalization
Slide 31: TFAs up to €64bn, with €5bn NNM in Affluent&Private
TFAs UP TO €64BN, WITH €5BN NNM IN AFFLUENT&PRIVATE FY20 Divisional results - WM Section 4 Group TFAs trend (€bn) +4% 61.4 63.6 3.2 (1.1) 56.2 (0.1) 5.3 NNM by segment NNM by segment Affluent +2.6 Affluent +2.6 39.8 39.0 37.1 Private +3.0 Private +2.3 AM -0.4 AM -1.6 NNM by product NNM by product AU
Slide 32: Revenues up 7%, ROAC at 19%
REVENUES UP 7%, ROAC AT 19% FY20 Divisional results - WM Section 4 WM revenues by source (€m) Fee margin (%) Profitability and efficiency (€m, %) +7% +4% Gross fees ex performance fee/(AUM+AUA) 79% 79% 77% 584 547 150 40% 526 130 30% 0.84% 19% +9% 306 110 16% +9% 281 0.82% 13% 20% 259 90 0.79% 10% 7
Slide 33: Affluent: revenue +7%, TFA +10% with AUM/AUA +21%
AFFLUENT: REVENUE +7%, TFA +10% WITH AUM/AUA +21% FY20 Divisional results - WM Section 4 Revenues (€m) AUM/AUA NNM trend (3M,€bn) TFA stock trend (€bn) €2.3bn +10% +7% +12% 27.8 0.8 317 25.4 2.9 297 €1.8bn 0.7 22.6 2.6 +21% 293 +23% 2.1 9.6 0.5 0.5 0.5 7.7 102 0.5 6.3 +19% 80 +8% 86 0.2 0.3 14.2 +6%
Slide 34: Private Banking: revenues +12%, TFA +8%
PRIVATE BANKING: REVENUES +12%, TFA +8% FY20 Divisional results - WM Section 4 Revenues (€m) AUM/AUA NNM trend (3M,€bn) TFA stock trend (€bn) +12% 195 +8% 175 173 +14% 154 €1.3bn 26.2 24.3 132 0.5 21.2 +12% €0.5bn 8.0 118 7.5 121 +15% 0.4 6.4 +5% +4% 9.7 0.3 9.4 0.3 9.9 0.2 +19% 50 +15% 57 43 0.1 +5
Slide 35: Consumer Banking
CONSUMER BANKING Be MEDIOBANCA
Slide 36: Business model strength and profitability confirmed
BUSINESS MODEL STRENGHT AND PROFITABILITY CONFIRMED NET PROFIT DOWN 12%; ROAC@31% FY20 Divisional results - Consumer Section 4 Financial results Highlights 12m D Business model effectiveness and resilience confirmed in the €m 4Q20 3Q20 4Q19 June20 YoY1 new environment: Strong product diversification
Slide 37: New loans impacted by lock down, now normalizing
NEW LOANS IMPACTED BY LOCK DOWN, NOW NORMALIZING FY20 Divisional results - Consumer Section 4 Quarterly new business by product (3M, €bn) Loans portfolio (€bn) 13.7 €7.4bn 14 13.2 13.0 12.8 €6.4bn 13 12.5 12 2.0 11 1.9 2.0 1.8 1.9 0.1 10 1.7 0.1 0.1 1.7 0.1 0.1 9 0.1 0.1 June18 Dec18 June19 Dec19 Ju
Slide 38: Distribution pace, revenues +4%, ROAC 31%
DISTRIBUTION PACE, REVENUES +4%, ROAC 31% FY20 Divisional results - Consumer Section 4 Distribution and efficiency Revenues (€m) Net profit & ROAC (€m, %) 28.6% 28.6% 28.3% 500 30% 31% 0.35 30% 30% C/I ratio (%) +4% 450 ROAC 0.3 25% 261 +3% 400 +7% 0.25 1,071 -12% 0.2 20% 1,027 350 336 48 199 996 12
Slide 39: Reassuring trend in moratoria and asset quality
REASSURING TREND IN MORATORIA AND ASSET QUALITY FY20 Divisional results - Consumer Section 4 Moratoria (€m, June20) Consumer Banking: early deterioration asset quality index 10% Expired €0.7bn Outstanding €0.6bn 3M avg. o/w 85% back to 294 9% regular payments Monthly 230 239 8% data 7% 159 6% 106 58
Slide 40: Corporate & Investment Banking
CORPORATE & INVESTMENT BANKING 40
Slide 41: CIB: resilience fostered by client-driven approach & diversification
CIB: RESILIENCE FOSTERED BY CLIENT-DRIVEN APPROACH & DIVERSIFICATION NET PROFIT DOWN 32%, ROAC@13% DUE TO MACRO PROVISIONING FY20 Divisional results - CIB Section 4 Financial results Highlights Effective diversification of business, reflected in resilient trend 12m D in revenues, plus sound performa
Slide 42: Leading positioning confirmed in M&A…
LEADING POSITIONING CONFIRMED IN M&A… FY20 Divisional results - CIB Section 4 Mediobanca M&A team has been involved in most Selected M&A Large Corp Transactions since July 2019 industry-shaping deals of 2020, including the merger of Ongoing Ongoing Ongoing March 2020 September 2019 equals between FC
Slide 43: …and in ECM and DCM
…AND IN ECM AND DCM FY20 Divisional Results - CIB Section 4 Mediobanca Capital Markets teams successfully completed several major transactions for both Italian and international clients, including DCM CDP’s ECM Italy FY20 (Bookrunner) inaugural Social Housing bond, Generali’s inaugural green Tier 2
Slide 44: NII and fees resilient
NII AND FEES RESILIENT FY20 Divisional Results - CIB Section 4 CIB revenues by source (€m) CIB revenues by product (€m) Net profit & ROAC (€m, %) 400 20% -8% 14% 15% 631 627 631 627 350 13% 15% 575 6% 2% 575 111 +15% 2% 300 127 -39% 265 266 78 30% ROAC 30% 10% 25% 250 254 -11% 228 -1% 226 10% 14% 20
Slide 45: High quality of corporate loan book confirmed
HIGH QUALITY OF CORPORATE LOAN BOOK CONFIRMED FY20 Divisional Results - CIB Section 4 WB loan book by sector (as at June 2020) 15% 12% 9% High impact from Covid-19 Immediate impact from Covid-19 8% 7% 7% 7% 6% 4% 4% 3% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 0.6% 0.4% WB exposure skewed to IG/crossover2 (as a
Slide 46: Principal Investing
PRINCIPAL INVESTING a 492) MEDIOBANCA
Slide 47: Principal Investing: positive stable contribution
PRINCIPAL INVESTING: POSITIVE STABLE CONTRIBUTION FY20 Divisional Results - PI Section 4 Financial results Highlights FY20 net profit down 6% to €295m on lower AG 12M D €m 4Q20 3Q20 4Q19 contribution (down 5% YoY) and impairment to seed June20 YoY1 capital portfolio in Q3 with partial recovery in Q4
Slide 48: Holding Functions
HOLDING FUNCTIONS = MEDIOBANCA
Slide 49: HF – comfortable funding and liquidity positions
HF – COMFORTABLE FUNDING AND LIQUIDITY POSITIONS FY20 – Divisional results - HF Section 4 Financial results Highlights 12m D €m 4Q20 3Q20 4Q19 FY20 loss at €184m, up 10% due to higher non-operating items June20 YoY1 (contribution to systemic funds and one-off charges in leasing), Total income (7) n.
Slide 50: Funding & liquidity
FUNDING & LIQUIDITY FY20 Divisional Results - HF Section 4 Substantial availability of MREL eligible liabilities, with buffer comfortably above requirement and maturities under control MREL Liabilities: 41.6%RWA1 MB securities redemptions Deposits2: 4% (€bn, CoF bps vs Euribor3M) Senior MREL Surplus
Slide 51: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 52: Closing remarks
CLOSING REMARKS Covid-19 impact managed successfully, confirming the validity of the Mediobanca Group business model. MB able to grow through the cycles and deliver above average growth and shareholders total return fostering its solidity with improved capital ratio and asset quality Along with soun
Slide 53: Mediobanca FY20 Results as at 30 June 2020
MEDIOBANCA FY20 RESULTS AS AT 30 JUNE 2020 Milan, 30 July 2020
Slide 54: Agenda
Agenda Section 1. Executive summary Section 2. 4Q Group results Section 3. FY20 Group performance Section 4. Divisional results Section 5. Closing remarks Annexes 1. Asset quality by division 2. Glossary
Slide 55: Asset quality by divisions
ASSET QUALITY BY DIVISIONS Net NPLs of which bad loans NPL coverage NPL as % of loans (“deteriorate”) (“sofferenze”) new DoD1 3.9% 4.1% +5% 3.8% 55% 55% 55% Gross Mediobanca 874 1.8% 1.8% 1.9% 806 836 +2% Group 80 77 78 Net June19 Mar20 June20 June19 Mar20 June20 June19 Mar20 June20 June19 Mar20 Jun
Slide 56: Glossary
GLOSSARY MEDIOBANCA BUSINESS SEGMENT PROFIT & LOSS (P&L) and BALANCE SHEET CIB Corporate and investment banking DPS Dividend per share WB Wholesale banking EPS Earning per share EPS adj. Earning per share adjusted1 SF Specialty finance ESG Environmental, Social, Governance CB Consumer banking FAs Fi
Slide 57: Disclaimer & declaration of head of financial reporting
DISCLAIMER & DECLARATION OF HEAD OF FINANCIAL REPORTING Disclaimer This document includes certain projections, estimates, forecasts and consequent targets which reflect the current views of Mediobanca – Banca di Credito Finanziario S.p.A. (the “Company”) with regard to future events (“forward-lookin
Slide 58: Mediobanca Group Investor Relations
INVESTOR CONTACT DETAILS 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 Marcella Malpangotto Tel. no. (0039) 02-8829.428 Email: investor.relation
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