Bff Bank Spa · MIL:BFF
Bff Bank Spa — Banca Farmafactoring — Debt Investor Presentation (October 2017)
16 slides from Bff Bank Spa's debt investor presentation, October 2017
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation October 2017
Slide 2: Disclaimer
Disclaimer This presentation may contain written and oral "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number or assumptions, expectations, p
Slide 3: BFF Banking Group: A Bank Like No Other
BFF Banking Group: A Bank Like No Other General Overview High Profitability and Solid Balance Sheet (1H17) • Leading financial services provider to suppliers of the European Healthcare and Public Administration sectors Net income(2) : Cost of Risk: +5% vs. 1H16 15 bps • Three main business lines: Co
Slide 4: Long and Successful Track Record in a Changing Environment
Long and Successful Track Record in a Changing Environment • Established in 1985 • Spanish subsidiary active • Expand funding base: • Acquisition of Magellan • Listing on Borsa Italiana • Initial investment of €260k since 2011 − Senior bond issued in June 2014 in June 2016 and Stock Exchange in Apri
Slide 5: Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers
Leading Provider of Credit Management and Working Capital Solutions to Public Sector Suppliers, to Tackle the Payment Delays From the Public Administration in Southern Europe and CEE 1H17 Customer Loans by geography €250bn of Public Sector expenditures in the countries we operate in(4) 4% 30% 16% 7%
Slide 6: We Operate in an Underpenetrated €250bn Market, with Leadership Position in Many Geographies…
We Operate in an Underpenetrated €250bn Market, with Leadership Position in Many Geographies… Key Considerations BFF Positioning Total Public Expenditure in Goods and Service (€bn) Non-recourse Factoring outstandings 2020E Total potential market is the with PA & NHS (€7.3bn) 134 140 133 132 136 pu
Slide 7: Investment Highlights
Investment Highlights 1 • Resilient profitability across market cycles: 23% net income CAGR 2013-16, +5% 1H’17-’16(1) Solid and Resilient • Long-standing relationship with top suppliers to the PA (leading multinational and national suppliers) Business Model • Long track record in dealing with Public
Slide 8: Solid Business Model…
Solid Business Model… Suppliers Debtors Long-standing relationship with top suppliers to the Long track record in dealing with Public entities PA (leading multinational and national suppliers) and deep knowledge of the payment dynamics top 10 clients have been BFF clients for more than bette
Slide 9: …Able to Grow Profitably through Every Season
…Able to Grow Profitably through Every Season Net Income (2007-2016) Credit Bubble Financial Crisis Sovereign Debt Crisis BFF with Banking License Downgrade Downgrade of Downgrade Downgrade of ofItalian ITA Gov. Gov. Downgrade Downgrade ofto BBB Italian Downgrade Downgrade to of Italian Downgrade Do
Slide 10: Fortress Balance Sheet and Low Risk Profile…
Fortress Balance Sheet and Low Risk Profile… Key Considerations Breakdown of Balance Sheet 1H17 (€m) A fortress balance sheet 4,594 4,594 298 Other 167 Other − Conservative asset / liability management 464 AFS REPOs approach: loan book funding duration higher Liquid government bonds 1,618 than tha
Slide 11: … Coupled With a Diversified Funding Base…
… Coupled With a Diversified Funding Base… Key Considerations Available Funding(1) (€m) Liquidity 351% 391% 502% 153% Balanced funding profile with deposits Coverage Ratio(2) (3) accounting for 36% of drawn funds: 3,152 (3) 3,136 − €850m deposits gathered as of June 2017, c. 2x versus FY2015 817 8
Slide 12: … and Backed by a Strong Capital Position…
… and Backed by a Strong Capital Position… Total Capital Ratio - Banking Group ex TUB Capital Ratio(1) Robust capital position maintained also after the cash SREP Requirements acquisition of Magellan, the full 2016 net income pay-out CET1 18.1% 16.7% 13.7% 6.55% and the DBRS Italian downgrade Ba
Slide 13: … With Additional Buffer from LPI Stock
… With Additional Buffer from LPI Stock Key Considerations LPI Stock Evolution (Excl. Magellan) (€m) • LPI stock represents a further buffer to an already strong capital position • BFF prudentially accounts for LPIs in P&L based on 45% (40% before 547 2016) recovery rate (recovery rate has been high
Slide 14: High Profitability and Strong Earnings Growth…
High Profitability and Strong Earnings Growth… Key Considerations Net Income adjusted (€m) Almost doubled net income in the last 4 years to €88m RoTE adjusted combined(1) 26% 22% 28% 37% 31% 30% in 2016 (incl. Magellan) Significantly improved return on capital thanks to an efficient use of capit
Slide 15: … with Potential for Further Funding Cost Optimization
… with Potential for Further Funding Cost Optimization Key Considerations Interest Expenses (€m) Cost of Funding(1) Reduction in cost of funding continued with an average cost of BFF ex Magellan 4.9% 3.4% 2.2% 1.7% funding of 2.04% in 1H17, more than offsetting Tier 2 issuance and Vs. 4.4% Magella
Slide 16: BFF 2020 “Strategic Targets”
BFF 2020 “Strategic Targets” Further consolidate leadership in Italy Continue to develop tailor-made offering to serve specific customer needs High quality services for large clients covering the full healthcare value chain Increase penetration into adjacent segments of non-healthcare supplier
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