Bper Banca S.p.a. · MIL:BPE
Bper Banca — Q1 2020 Earnings Presentation
53 slides from Bper Banca's earnings presentation, June 2020
Slide 1: Investor Presentation
Banca Investor Presentation
Slide 2: Disclaimer
Disclaimer This document has been prepared by “BPER Banca” solely for of specific assumptions which could prove wrong, in which case information purposes, and only in order to present its strategies the actual data would differ from the figures given herein. and main financial figures. No part of th
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by “BPER Banca” solely for information purposes, and only in order to present its strategies and main financial figures. This presentation does not constitute an offer or an invitation to subscribe for or purchase any securities. The securities referred
Slide 4: Important methodological note
Important methodological note July 2019 saw completion of the acquisition of an additional 4Q19 and 1Q20 are comparable on a like-for-like basis. shareholding in Arca Holding, the acquisition of the minority Note that figures in the following pages may not add exactly due interests in Banco di Sarde
Slide 5: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 5
Slide 6: BPER Banca Group’s structure
BPER Banca Group’s structure Introduction to BPER Banca Group Commercial banks Main companies Main Strategic shareholdings BPER Banca (Emilia Romagna) ASSET MANAGEMENT Arca Vita (Insurance company) Parent bank ARCA Fondi SGR2 19.67% Optima Sim Banco di Sardegna (Sardinia) Alba Leasing (Leasing compa
Slide 7: Widespread national presence and strong multi-regional footprint
Widespread national presence Introduction to BPER Banca Group and strong multi-regional footprint 4 2 Commercial banks # branches 61 49 BPER Banca 958 Banco di Sardegna 343 61 CR Bra 26 333 branches (13.3% market share*) Headquarter in MODENA (Emilia Romagna) CR Saluzzo 22 11 Total 1,349 33 17 Geogr
Slide 8: One of the largest Banking Group in Italy
One of the largest Banking Group in Italy Introduction to BPER Banca Group #6 in Italy by branches and total asset focused on traditional business with customers Number of Italian branches1 Total assets1 (€/bn) 2 2 Customer loans / Total assets3 (%) Customer loans breakdown by customer segment (%) 4
Slide 9: Rating
Rating BPER Rating Overview (Moody’s/Fitch) LT Issuer Default Ba3 Outlook NEG Subordinated Tier 2 Ba3 LT Issuer Default BB Outlook RW NEG Subordinated Tier 2 B+ Source: Bloomberg as of 5 June 2020 9
Slide 10: Shareholders structure of BPER Banca and market information
Shareholders structure of BPER Banca Introduction to BPER Banca Group and market information Main shareholders1 (Current shares outstanding: # 520,627,9482) BPER Banca share milestones Unipol Gruppo S.p.A. Mercato MTA FTSEMIB 19.7% ristretto «MercatoTelematico Index* (Local mkt.) Azionario» (Blue Ch
Slide 11: Sustainability: 2019-2021 objectives of BPER Group
Sustainability: 2019-2021 objectives of BPER Group Introduction to BPER Banca Group The BPER Group has decided to prepare its sustainability report within the framework of the Sustainable Development Goals, the objectives identified by the United Nations and included in the Global Agenda for Sustain
Slide 12: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 12
Slide 13: Health emergency and BPER Group
Health emergency and BPER Group Quick reaction to challenges in uncertain and tough environment • BPER Group immediately reacted to face this unprecedented event - the health, economic and social emergency caused by the spread of the Covid-19 virus – with the objective to offer numerous initiatives
Slide 14: Executive summary (1/2)
Executive summary (1/2) • 1Q20 results confirm the strategic value of the extraordinary operations completed during 2019. In fact, Good revenues despite a context characterized first by the economic slowdown, then by the effects of the health generation, emergency, BPER Group showed good ability to
Slide 15: Executive summary (2/2)
Executive summary (2/2) • Gross and net NPE stock decrease respectively by 1.1% and 2.8% vs Dec.’19 Asset quality • Default rate annualized down to 1.5% vs 1.7% in Dec.’19 improvements • NPE coverage up by 85 bps to 51.9% vs Dec.’19 confirmed • Gross NPE ratio stable at 11.1% vs Dec.’19 in the prese
Slide 16: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 16
Slide 17: 1Q20 reclassified Profit & Loss
1Q20 reclassified Profit & Loss Profit and loss Good ability to generate revenues (operating profitability, even in the presence of a limited contribution from finance, almost reached 600 €/mn) despite a context characterized by the slowdown of the economy and then the effects of the health emergenc
Slide 18: Net Interest Income
Net Interest Income Profit and loss Stated NII up by 1.8% q/q and broadly stable on ordinary basis (-0.1% q/q) despite the difficult economic and financial environment Net Interest Income evolution (€/mn) Spread contribution (%) 1.94 1.90 1.89 1.86 1.87 -0.1% Ordinary NII1 260.9 257.6 304.7 299.5 29
Slide 19: Net Commissions
Net Commissions Profit and loss Net commissions down by 3.0% q/q mainly due to credit cards/payments hit by prolonged lockdown (-13.4% q/q), but broadly stable vs 3Q19 Net Commissions breakdown (€/mn) Chg % Chg % • Good performance in the net vs 4Q19 vs 3Q19 commissions of the AUM and AUC 268.3 275.
Slide 20: Dividends and Trading income
Dividends and Trading income Profit and loss 1Q20 lower contribution of trading income at 5.6 €/mn vs 36.8 €/mn in 4Q19 strongly influenced by the turmoil on financial markets following the health emergency crisis Trading income evolution (€/mn) Non recurring charge due to the write-down of the cont
Slide 21: Operating costs
Operating costs Profit and loss Operating costs amount to 411.1 €/mn, down by 4.4% compared to the 4Q19 calculated net of non- recurring items Operating costs evolution (€/mn) -4.4% 337.7 344.7 389.3 429.8 411.1 44.5 41.0 40.2 33.2 35.4 129.3 114.5 118.2 90.9 96.2 230.9 256.0 255.6 213.6 213.1 1Q19
Slide 22: Provisions and other items
Provisions and other items Profit and loss Loan loss provisions in 1Q20 at 139.6 €/mn including additional provisions of approximately 50.0 €/mn as the first significant intervention following the worsening of the macroeconomic context caused by the health emergency. Provisions and other items (€/mn
Slide 23: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 23
Slide 24: Customer loans
Customer loans Balance sheet structure Net customer loans down by 1.9% since Dec.’19 mainly due to corporate segment and financial companies, while retail sector recorded substantial stability. Good quality of performing loans book Customer loans breakdown (net & gross fig.; €/mn; %) Net customer lo
Slide 25: Non Performing Exposures (1/2)
Non Performing Exposures (1/2) Balance sheet structure Gross NPE stock down by 1.1% since Dec.’19. NPE coverage up by 85 bps in the quarter Gross NPE (€/mn; %) Gross NPE, quarterly trend (€/bn) Disposal of about 1 €/bn of bad loans Bad loans securitizations: to UnipolReC and “4Mori Sardegna” of 0.9
Slide 26: Non Performing Exposures (2/2)
Non Performing Exposures (2/2) Balance sheet structure Improvement of default rate at 1.5% (1.7% in 2019) and strong increase of average recovery rate of bad loans at 7.2% (6.3% in 2019) Default rate (%) Bad loans average recovery rate (%) (Bper Credit Management) 4.2% 7.2% 6.3% 5.3% 2.1% 4.3% 1.9%
Slide 27: Financial assets portfolio
Financial assets portfolio Balance sheet structure Financial assets portfolio at 19.9 €/bn up by 0.9 €/bn since Dec.’19 Financial Assets breakdown (€/mn; %) Italian Government bonds1 (€/mn) €/mn FVTPL FVOCI AC Total % on total Bonds 354 6,294 12,325 18,973 95.4% o.w. Italian gov 186 420 6,003 6,609
Slide 28: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 28
Slide 29: Total funding
Total funding Balance sheet structure Stock down to 165.6 €/bn by 5.6% vs Dec.’19 manly due to indirect deposits decrease strongly affected by market effect related to financial markets turmoil following health emergency crisis Total Funding (€/mn; %) Total Funding, quarterly trend (€/bn) Data compa
Slide 30: Direct funding
Direct funding Balance sheet structure Direct funding at 57.1 €/bn down by 1.6% since Dec.’19 Direct Funding breakdown (€/mn; %) Direct Funding, quarterly trend (€/bn) Data comparable on a like-for-like basis* -1.6% €/mn Dec 19 Mar 20 Chg (%) 58.2 58.1 57.1 51.0 3.2 3.4 3.3 50.0 50.6 Direct customer
Slide 31: Indirect funding and Bancassurance
Indirect funding and Bancassurance Balance sheet structure Stock at 108.5 €/bn down by 7.6% vs Dec.’19. Net inflows in AuM and Bancassurance positive despite the turmoil on financial markets following health emergency Indirect Deposits and Bancassurance1 (€/mn; %) Indirect Deposits and Bancassurance
Slide 32: Bonds maturities and issues details
Bonds maturities and issues details Balance sheet structure Outstanding bonds (€/bn) Bonds issued (€/bn) Dec 18 Dec 19 Mar 20 0.5 0.7 Wholesale bonds 2.5 3.2 3.2 0.5 0.1 o/w covered bonds 2.0 2.6 2.7 o/w subordinated bonds 0.5 0.5 0.5 0.6 0.5 0.5 Retail bonds 1.5 2.0 1.7 0.0 o/w subordinated bonds 0
Slide 33: Liquidity
Liquidity Liquidity and Capital adequacy Very solid liquidity position. In Mar.’20, total eligible assets increased at 21.2 €/bn. Unencumbered eligible assets and deposits with ECB at 11.4 €/bn Total eligible Assets evolution* (€/mn) Eligible Assets Pool Composition (%) +1.6% 20,911 21,239 18,716 11
Slide 34: Capital
Capital Liquidity and Capital adequacy Solid capital position confirmed with a CET1 Fully Loaded at 12.07% compared with 12.01% in Dec.’19. Common Equity Tier 1 Ratios (%) Fully Loaded Phased In +35 bps -31 bps +21 bps -15 bps -4 bps +547 bps 13.60% 12.01% 12.07% ECB Minimum Regulatory Requirement*
Slide 35: Total Capital Position
Total Capital Position Sound total capital position well above regulatory requirement SREP capital requirements (Phased-in) 16.59% • 409bps buffer to total capital 2.54% 1 1 0.45% requirements 12.50% 12.50% 2.00% 2.50% • CRD V Art 104a allows P2R to be 1.50% 1.88% fulfilled proportionally with CET1,
Slide 36: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 36
Slide 37: Final remarks
Final remarks QUICK REACTION to the health emergency granting OPERATIONAL STABILITY and full range of customer services ACCESSIBLE Ability to GENERATE REVENUES despite a difficult economic and financial environment and tight COST CONTROL PRUDENT APPROACH ON CREDIT (approx. 50.0 €/mn additional provi
Slide 38: Agenda
Agenda INTRODUCTION TO BPER BANCA GROUP BPER GROUP CONSOLIDATED RESULTS Executive summary Profit and loss Balance sheet structure Assets Funding & Capital Final remarks ANNEXES 38
Slide 39: Customer loans
Customer loans Annexes Portfolio composition Net customer loans breakdown by sectors Customer loans breakdown by geographical (€/mn; %) distribution1(%) % on Total ∆% Business sector Mar 20 Customer vs Dec 19 Loans North Centre 53.3% 15.7% Manufacturing 7,310 14.3% -1.4% Wholesale and retail service
Slide 40: Asset quality
Asset quality Annexes Asset quality breakdown (excl. customer debt securities) Gross exposures (€/mn) Mar 19 Jun 19 Sep 19 Dec 19 Mar 20 Chg YTD Chg Y/Y % % % % % Abs. Chg (% ) Abs. Chg (% ) Non Performing Exposures (NPEs) 6,947 13.8% 6,937 13.7% 6,515 11.6% 6,123 11.1% 6,056 11.1% -67 -1.1% -891 -1
Slide 41: Financial Assets details
Financial Assets details Annexes Bond PTF by Geographical breakdown (%) Govies PTF Geographical breakdown (%) Other 24.5% France Other 4.9% Germany 1.5% 1.9% Spain 14.6% Netherlands Italy 4.1% 45.5% Germany 5.4% Spain 8.6% France Italy 11.9% 77.1% 5.0 Bonds PTF Maturities1 (€/bn) 13.6 Italian Govies
Slide 42: Reclassified financial statement of BPER Group as at 31.03.2020
Reclassified financial statement of BPER Group Annexes as at 31.03.2020 For greater clarity in the presentation of the results for the period, the accounting schedules envisaged by the 6th update of Bank of Italy Circular no. 262/2005 have been reclassified as follows. In the balance sheet: • Debt s
Slide 43: Reclassified consolidated balance sheet
Reclassified consolidated balance sheet Annexes (in thousands) Assets 31.03.2020 31.12.2019 Change % Change Cash and cash equivalents 402,042 566,930 (164,888) -29.08 Financial assets 19,878,531 18,956,906 921,625 4.86 a) Financial assets held for trading 244,181 270,374 (26,193) -9.69 b) Financial
Slide 44: Reclassified consolidated balance sheet
Reclassified consolidated balance sheet Annexes (in thousands) Liabilities and shareholders' equity 31.03.2020 31.12.2019 Change % Change Due to banks 14,092,713 12,213,133 1,879,580 15.39 Direct deposits 57,136,313 58,055,608 (919,295) -1.58 a) Due to customers 51,700,785 52,220,719 (519,934) -1.00
Slide 45: Reclassified consolidated income statement
Reclassified consolidated income statement Annexes (in thousands) Captions 31.03.2020 31.03.2019 Change % Change 10+20 Net interest income 307,971 273,896 34,075 12.44 of which IFRS 9 components* 9,414 13,352 (3,938) -29.49 40+50 Net commission income 267,595 192,544 75,051 38.98 70 Dividends 809 53
Slide 46: Reclassified consolidated income statement by quarter
Reclassified consolidated income statement by quarter Annexes (in thousands) 1st quarter 1st quarter 2nd quarter 3rd quarter 4th quarter Captions 2020 2019 2019 2019 2019 10+20 Net interest income 307,971 273,896 272,288 315,909 302,446 of which IFRS 9 components* 9,414 13,352 15,083 11,748 3,460 40
Slide 47: Consolidated balance sheet
Consolidated balance sheet Annexes (in thousands) Assets 31.03.2020 31.12.2019 Change % Change 10 Cash and cash equivalents 402,042 566,924 (164,882) -29.08 20 Financial assets measured at fair value through profit or loss 1,069,556 1,120,111 (50,555) -4.51 a) financial assets held for trading 244,1
Slide 48: Consolidated balance sheet
Consolidated balance sheet Annexes (in thousands) Liabilities and shareholders' equity 31.03.2020 31.12.2019 Change % Change 10 Financial liabilities measured at amortised cost 71,100,285 70,135,262 965,023 1.38 a) due to banks 14,092,713 12,213,133 1,879,580 15.39 b) due to customers 51,572,044 52,
Slide 49: Consolidated income statement
Consolidated income statement Annexes (in thousands) Captions 31.03.2020 31.03.2019 Change % Change 10 Interest and similar income 359,864 330,874 28,990 8.76 of which: interest income calculated using the effective interest method 357,791 330,435 27,356 8.28 20 Interest and similar expense (51,893)
Slide 50: Performance ratios (1)
Performance ratios (1) Annexes (cont.) Financial ratios 31.03.2020 2019 (*) Financial ratios 31.03.2020 2019 (*) Risk ratios Structural ratios Net non-performing loans/net loans to customers 5.71% 5.77% Net loans to customers/total assets 63.71% 65.80% Net bad loans/net loans to customers 2.27% 2.25
Slide 51: Performance ratios notes
Performance ratios notes Annexes (1) To construct ratios, reference was made to the balance sheet and income statement figures of the reclassified statements prepared from a management point of view . (2) Fixed assets include both Equity investments and Property, plant and equipment. The ratio would
Slide 52: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Roberto Ferrari Gilberto Borghi Chief Financial Officer Head of Investor Relations Via Aristotele 195 - 41126 Modena - Italy Via San Carlo, 8/20 - 41121 Modena - Italy +39 059 2021199 +39 059 2022194 roberto.ferrari@bper.it gilberto.borghi@bper.it Giulia
Slide 53: Notes
Notes BPER: Banca 53