Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS
Banca Monte Dei Paschi Di Siena — Corporate Update (October 2013)
18 slides from Banca Monte Dei Paschi Di Siena's corporate update, Oct 7, 2013
Slide 1: Restructuring Plan 2013-2017 Guidelines
Restructuring Plan 2013-2017 Guidelines Siena, 7 October 2013
Slide 2: A new equity story with attractive growth and risk-return
A new equity story with attractive growth and risk- return… Repositioning BMPS as a lean, leading Italian commercial bank with an attractive risk-reward profile Solid plan built upon strong turnaround track record, clearly identified actions and prudent macroeconomic assumptions Restored profi
Slide 3: ...building on strong momentum...
…building on strong momentum… Simplified Introduction of a new management team, a new mindset and a new culture group structure Group simplification completed, with renewed focus on core business and Overhaul of credit, risk and compliance functions completed governance In-depth review of ba
Slide 4: ...and underpinned by conservative macro assumptions
…and underpinned by conservative macro assumptions Gross Domestic Product1 (YoY %) BTP – BUND Spread1 (bps) 452.4 Market sources report 255 and 150 in 2013/20142 1.4% 0.5% Current level: ~ 250 164.0 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 3Tasso month Euribor BCE – annu
Slide 5: Key targets 2017
Key targets 2017 Growth (CAGR 12- Revenues (%) +0.8 17) Operating expenses (%) -4.8 Efficiency Cost / income (%) ~ 50 Risk Cost of credit (bps) 90 Δ Italian Govies 1H13 - 2017 (EUR bn, AFS) ~ -6 Balance sheet Loans / deposits1 (%) ~ 90 structure CET1 (phased-in)2 (%) ~ 10 Profitability RoTE (%) ~9 R
Slide 6: Main drivers
Main drivers Funding cost reduction leveraging the opportunity to close the gap vs. the 1 Revenue Italian system Increase Commercial productivity recovery, realigninig MPS performance to Italian peers’ average levels via targeted initiatives Operating Total headcount reduction 11-17: ~ 8,000 e
Slide 7: Funding cost reduction
1 Funding cost reduction ` Total Cost of Funding1/Volumes2 Italian Banks 5Y CDS 1,000 BAPO UCI UBI MPS ISP Gap 1.92% EUR 0.8bn ex. NFI 750 1.39% 500 250 0 3 Average It Banks MPS Cost of Corporate Funding (EUR 17bn stock) Drivers of revenue recovery, despite deleveraging of financial assets, from:
Slide 8: Commercial productivity recovery
1 Commercial productivity recovery Average Net Commissions1/Total volumes2 Drivers of revenue recovery from: Increasing sales productivity, Gap closing the performance gap vs. peers EUR 340m 0.64% Better product mix as evidenced by 1H 13 results 0.55% Reducing LTRO costs equivalent to EUR 10
Slide 9: Commercial productivity recovery - new initiatives
2 Commercial productivity recovery - new initiatives New rules for sales and distribution supply Launch of the new On Line Bank Project chain for Private customers “Widiba” Multiple initiatives in place to relaunch asset New Head hired management and advisory services, with a special focus o
Slide 10: Operating cost optimisation
2 Operating cost optimisation Headcount: trend line Headcount reduction of ~ 8,000 by 2017 (~ EUR ~ 31,200 500m cost reduction) ~ 28,500 - ~2,700 ~ 23,100 - ~5,300 Reduction of ~2,700 already realised from 2011 to 1H13, thanks to staff rearrangement 2011 1H 2013 2017 initiatives Remaining 5,30
Slide 11: De-risking via strict credit risk management
3 De-risking via strict credit risk management… Impaired loans coverage 1H13 (%) Significant shift to less risky loan portfolio mix supporting lower cost of risk 41.1 34.9 Coverage confirmed above Italian system average Review of problem loan management processes Several actions planned to r
Slide 12: ...asset deleveraging and exiting higher risk businesses...
3 …asset deleveraging and exiting higher risk businesses… Loans breakdown 2017 vs 1H 20131 Cost of credit (1H13 ann.) 0.9% 4.0% 1.5% 2.5% nm 40% 44% 41% 40% 11% 15% 4% 4% 0% 0% Retail Consumer credit Leasing Corporate Other loans 1H 2013 2017 Italian Sovereign Bonds in AFS Portfolio «Run-off» of n
Slide 13: ...and improving liquidity...
3 …and improving liquidity… Loan/deposit ratio (%) Reduction of loan/deposit ratio -15% -34% Stronger unencumbered counterbalancing capacity (already at 134% EUR 21bn in 1H13 vs EUR 8bn 1H12) 105% ~ 100% ~ 90% Less reliance on institutional funding, with full phase-out of ECB funding by 2015 2
Slide 14: ...whilst restoring MPS to standalone financial strength
…whilst restoring MPS to standalone financial 4 strength Planned capital increase of EUR 2.5bn to be carried out in 2014 Enhanced capital quality via repayment of the New Financial Instruments (of which EUR 3bn in 2014 and the residual more gradually by 2017) Minimise coupons on NFIs and cost
Slide 15: Significant additional potential upside
Significant additional potential upside RoTE and Net Income (EUR m) By way of illustration, a better macroeconomic scenario would enable BMPS to significantly ~ 12% increase profitability +2% +1.0% ~1,200 Up to ~ EUR 300m ~ 9% additional net income ~200 ~ 900 ~100 RoTE comfortably above CoE Ne
Slide 16: The 2013-2017 roadmap
The 2013-2017 roadmap Oct Dec 2013 2014 2015 2016 2017 Restructuring Plan DG Comp Capital increase execution (EUR 2.5bn) EUR 1.1bn EUR 3bn NFI reimbursement Reduction of Italian govies portfolio (approx -EUR 6bn) LTRO reimbursement Target RoTE ~ 9% Full details of the plan and actions to be presente
Slide 17: Disclaimer
Disclaimer This document has been prepared by Banca Monte dei Paschi di Siena S.p.A. (the “Company” and, together with its subsidiaries, the “Group”) solely for information purposes and for use in presentations of the Restructuring Plan 2013- 2017. The information contained herein has not been indep
Slide 18: fe DEI PASCHI
fe DEI PASCHI I SIENA ==” BANCA DAL 1472 www.mps.it
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