Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — BoA Merrill Lynch 22nd Annual CEO Financial Conference 2017
25 slides from Banco Bpm Spa's conference presentation, Sep 28, 2017
Slide 1: Banco BPM S.p.A. – Corporate presentation
Banco BPM S.p.A. – Corporate presentation BoA Merrill Lynch “22nd Annual CEO Financial Conference” London, 28 September 2017
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 question and answer session and any written or oral material discussed following the distribution of this document. The distribut
Slide 3: Agenda
Agenda 1. Status of the main strategic projects 3 2. Profile of the Group 9 3. H1 2017 Highlights 13 4. Focus on NPE Unit and NPE Management 22 Agenda 3
Slide 4: Banco BPM: the franchise value of the new Group
BANCO BPM: THE FRANCHISE VALUE OF THE NEW GROUP BANCO BPM IS ITALY’S THIRD LARGEST BANKING GROUP WITH A LEADING POSITION IN THE WEALTHIEST AREAS OF THE COUNTRY A WIDE CUSTOMER BASE (~4 MILLION) SERVED THROUGH AN EXTENSIVE AND DEEPLY ROOTED DISTRIBUTION NETWORK SIGNIFICANT COST AND REVENUE SYNERGIES
Slide 5: Main achievements and ongoing projects at a glance
MAIN ACHIEVEMENTS AND ONGOING PROJECTS AT A GLANCE June-17 July-17 Aug-17 Sept-17 Dec-17 Completion of organizational set-up NPL Unit set up Closure of 50% of branches Cost optimization under the Plan1 Definition of strategic Bancassurance partnerships «Beauty contest» and definition of new strategi
Slide 6: BPM migration on the Group's IT platform
BPM MIGRATION ON THE GROUP’S IT PLATFORM 100% OF BRANCHES IT MIGRATION COMPLETED DURING THE WEEKEND OF 22/23 JULY OPENED BY 08:30A.M. MONDAY MORNING About 6 months 700 More than kick off: 9 January go live: 24 July colleagues have been working on this project over the last 6 months Migrated on Group
Slide 7: Sale of Aletti Gestielle to Anima: main workstreams of the project
SALE OF ALETTI GESTIELLE TO ANIMA: MAIN WORKSTREAMS OF THE PROJECT Project Timeline Final MOU Negotiations with Anima Change in Poste Italiane’s Management Team Discussions with August Poste / Anima June 2017 April / May 2017 April 2017 2017 February 2017 November 2016 Discussions with Revival of Di
Slide 8: Transaction with Anima: 20-year partnership
TRANSACTION WITH ANIMA: 20-YEAR PARTNERSHIP Transaction Financial Data The transaction with Anima to allow Banco BPM to receive up to €1.1bn: (i) an upfront cash consideration of €700m, (ii) excess capital distribution of c. €250m and (iii) potentially c. €150m from the sale of management of insuran
Slide 9: Agenda
Agenda 1. Status of the main strategic projects 3 2. Profile of the Group 9 3. H1 2017 Highlights 13 4. Focus on NPE Unit and NPE Management 22 Agenda 9
Slide 10: Among the top players in the Italian banking industry
AMONG THE TOP PLAYERS IN THE ITALIAN BANKING INDUSTRY TOTAL ASSETS SHAREHOLDERS' EQUITY € bn 827 788 € bn #3 #3 55 53 168 144 134 12 10 71 41 40 5 26 25 3 3 3 2 2 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 CUSTOMER LO
Slide 11: Banco BPM: geographical footprint
BANCO BPM: GEOGRAPHICAL FOOTPRINT NATIONAL MARKET SHARES # Customers: 4 million 6 15 # branches: ~2,300 14 6.3% 1.8% Market share: 8.0% 1.7% 838 271 14.7% 9.3% 280 Leadership in the wealthiest regions of Italy 11.9% 227 119 7.7% 1° 3° 3° 14.5% 210 2 Lombardy Veneto Piedmont 9.8% 10 0.2% 2.0% # branc
Slide 12: Banco BPM: group structure
BANCO BPM: GROUP STRUCTURE Commercial Banking: Holding, including Territorial Divisions (1,646 branches), + BPM S.p.A. (600 branches) Private & Investment Asset Consumer Leasing Bancassurance Banking Management Credit & Factoring Alba Leasing 100% 50.0% 100% 39.0% 39.2% Selma Bipiemme 100% 50.0% 14.
Slide 13: Agenda
Agenda 1. Status of the main strategic projects 3 2. Profile of the Group 9 3. H1 2017 Highlights 13 4. Focus on NPE Unit and NPE Management 22 Agenda 13
Slide 14: Executive summary: P&L - main data
EXECUTIVE SUMMARY: P&L - MAIN DATA «CORE1» REVENUES UP +5.6% €2,151m in H1 2017 (+5.6% y/y) Y/Y OPERATING COSTS DOWN -5.5% €1,525m in H1 2017 (-5.5% y/y) Y/Y Cost Income ratio: -344bps y/y, at 64% STRONG OPERATING PROFITABILITY +10.2% €853.6m in H1 2017 (+10.2% y/y) Y/Y NET PROFIT AT €94M / €127M AD
Slide 15: Executive summary: balance sheet - main data
EXECUTIVE SUMMARY: BALANCE SHEET - MAIN DATA C/A AND SIGHT DEPOSITS UP +€6.8BN Y/Y Reaching €72bn (+10.5% y/y) AUM INCREASING +€6.2BN Y/Y Reaching €62bn (+11.1% y/y) NEW LOANS GROWING +€0.8BN Y/Y €9.3bn (+9.7% y/y), o/w €7.1bn granted to corporates (+10.0% y/y) and €2.2bn to households (+8.6% y/y) 1
Slide 16: Executive summary: risk profile keeps improving
EXECUTIVE SUMMARY: RISK PROFILE KEEPS IMPROVING 2016-19 BAD LOAN DISPOSAL PLAN WELL ON TRACK 31% COMPLETED Total disposals already completed: €2.5bn Additional ~€2bn Bad loan disposals planned in Q4 2017 NET NPL RATIO IMPROVING SIGNIFICANTLY 13.0% VS From 15.0% as at June 2016 to 13.0% as at June 20
Slide 17: Highlights: risk profile keeps improving
HIGHLIGHTS: RISK PROFILE KEEPS IMPROVING NET NPLs NET NPL RATIO € bn % -€2.9bn -200bps -16.8% 15,0 14,7 13,0 17,1 16,2 11,1 14,2 30/06/16 PF 31/12/16 PF 30/06/17 30/06/16 31/12/16 30/06/17 Target PF PF 2019 NET FLOWS TO NPLs €m -€596m -52.9% 1.126 530 H1 2016 H1 2017 3. H1 2017 Highlights 17
Slide 18: Strong NPL stock reduction and significant improvement in new NPL flows
STRONG NPL STOCK REDUCTION AND SIGNIFICANT IMPROVEMENT IN NEW NPL FLOWS Net NPLs €m -€2.9bn Chg. 12M Chg. 6M Chg. 3M CHANGE 17,115 16,204 €/m and % Value % Value % Value % 15,033 14,237 228 125 147 103 Bad Loans -723 -9.4% -892 -11.4% -397 -5.4% 9,234 8,257 7,558 7,203 UTP -2,030 -22.0% -1,054 -12.8
Slide 19: Significant increase in coverage levels
SIGNIFICANT INCREASE IN COVERAGE LEVELS Coverage in line with Strategic Plan targets NPL coverage 1 31/12/16 PF 30/06/16 PF CHANGE (in bps) 30/06/17 31/03/17 2 2 Nominal Nominal 12M 3 6M 3 3M Total NPLs Nominal: 50.7% 49.0% 48.2% 47.9% 45.5% 350 110 80 Bad Loans Nominal: 62.1% 59.9% 59.0% 60.0% 59.5
Slide 20: Focus on bad loans and unlikely-to-pay loans
FOCUS ON BAD LOANS AND UNLIKELY-TO-PAY LOANS Including off-balance Bad loan Breakdown sheet write-offs of about €1.0bn. UTP Breakdown 30/06/2017 (€bn) 30/06/2017 (€bn) Unsecured Unsecured 18.3 10.5 Secured Secured 7.4 FV of collateral: 2.7 3.3 (40%) 11.3 €14.3bn (25%) 7.2 1.4 6.9 (20%) 1.2 10.9 (18%
Slide 21: Fully-loaded CET1 ratio: evolution in detail
FULLY-LOADED CET1 RATIO: EVOLUTION IN DETAIL Does not factor in Fully-Loaded CET 1 ratio: evolution additional positive impacts specified below 11.42% +24bps 11.14% +91bps 11.31% -52bps 10.40% -74bps 31/12/2016 IMPACT OF RWA BUSINESS 30/06/2017 PUT OPTIONS 30/06/2017 IMPACT EXPECTED 30/06/2017 ON DE
Slide 22: Agenda
Agenda 1. Status of the main strategic projects 3 2. Profile of the Group 9 3. H1 2017 Highlights 13 4. Focus on NPE Unit and NPE Management 22 Agenda 22
Slide 23: NPL Unit at a glance
NPL UNIT AT A GLANCE A new recovery machine… … built upon clear selected success factors • Established since day 1 of the 1. Complete digital-based data infrastructure allowing to merger, directly reporting to • Provide clear targets and managerial inputs to workout the CEO professionals • 220 profe
Slide 24: NPL Unit: main KPI in H1 2017
NPL UNIT: MAIN KPI IN H1 2017 €m +30% vs 341 2017 Plan Recovery actions have +39% been achieving Target 245 significant results right from the first months. Workout NPL stock reduction of 2.6 recoveries times recovery H1 16 H1 17 (~€886m in H1 2017). Solid collection pipeline also in H2. € bn Dispos
Slide 25: Focus on disposals: the Rainbow deal
FOCUS ON DISPOSALS: THE RAINBOW DEAL Percentage pricing distribution and comparison with residual secured Bad loans stock of Banco BPM RAINBOW1 Portafoglio BAMI secured BAMI 2 sec.portfolio Disposal of Secured Bad loans, for a 65 total of €693m 54 46 Price well above the one considered 35 in the Bus
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