Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS
Banca Monte Dei Paschi Di Siena — Kepler Italian Financials Conference 2024
31 slides from Banca Monte Dei Paschi Di Siena's conference presentation, Nov 15, 2024
Slide 1: A Clear and Simple Commercial Bank, Revolving Around Customers
A Clear and Simple Commercial Bank, Revolving Around Customers, Combining Technology With Human Touch Kepler Italian Financials Conference Peschiera del Garda, 15th November 2024
Slide 2: Agenda
Agenda ▪ A nationwide «clear and simple commercial bank» ▪ The 2024 – 2028 Business Plan ▪ The latest performance (3Q24 & 9M24 Results) 2
Slide 3: Historic franchise with a view to innovation
Historic franchise with a view to innovation Scale Franchise Reach Capabilities Historic franchise with 1.3k €164bn Branches covering Digital platform with 566 Total commercial savings (1) ~550 years of history all Italian regions financial advisors (6.6% m.s. nationwide(3)) #1 in Tuscany (19.2% m.s
Slide 4: A nationwide simple commercial bank
A nationwide simple commercial bank Market shares and GDP coverage(1) 9M24 operating income: breakdown by commercial segments Ranked by % Italian GDP Market shares by >90% of operating income are related to Retail and SMEs % Italian GDP Branches (#) GDP Coverage per area Branches (%) North-West 33.3
Slide 5: A path started two years ago
A path started two years ago …. 2022 ✓ New CEO appointment Aug ✓ EUR 450mln Alken’s claim rejected also by Court of Appeal Feb 2022 ✓ New Business Plan 2023 ✓ Fitch rating upgrade by 2 notches ✓ Execution of merger of subsidiaries ✓ Pre-underwriting agreement signed for share capital increase ✓ New
Slide 6: Reaching/surpassing 2026 Business Plan in less than two years
… allowing the Bank to reach/surpass 2026 Business Plan in less than two years… 2026E Target Actual Results (2022-2026 Business Plan) (2023A, if not otherwise stated) Selected P&L Items (€m) Operating Income 3,286 3,797 ✓ Operating Costs (1,885) (1,843) ✓ Gross Operating Profit 1,401 1,954 ✓ Pre-tax
Slide 7: Successful implementation of launched initiatives
… thanks to the successful implementation of launched initiatives Selected Initiatives Selected Highlights 1 • Simplify Group structure ✓ Completed successful merger of subsidiaries Achieve • Optimise and redeploy workforce ✓ ~4k voluntary FTE exits through “Solidarity Fund” business model • Impleme
Slide 8: Agenda
Agenda ▪ A nationwide «clear and simple commercial bank» ▪ The 2024 – 2028 Business Plan ▪ The latest performance (3Q24 & 9M24 Results) 8
Slide 9: Business Plan 2024-2028
Business Plan 2024-2028 “ A clear and simple commercial Bank, revolving around customers, ” combining technology with human touch “ Enrich business model sustainability through enhancing and innovating initiatives, underpinned by digitalisation and new technologies, leveraging our strong historic fr
Slide 10: Strategic clarity on enhancing and innovating initiatives
The evolution of BMPS’ journey is rooted in our strategic clarity on enhancing and innovating initiatives Vision A clear and simple commercial Bank, revolving around customers, combining technology with human touch Evolution of fee-based proposition New dedicated service models for value-added activ
Slide 11: BMPS 2024-2028 Business Plan key strategic initiatives
BMPS 2024-2028 Business Plan key strategic initiatives Enhancing and innovating Digital and technological enablers & initiatives Key actions accelerators Key financial ⚫ Enhancement of wealth management advisory capabilities Evolution of fee-based ⚫ Innovation of non-life insurance offering ⚫ Furthe
Slide 12: Updated Financial Targets Recap
Updated Financial Targets Recap 2024E 2026E 2028E 24-26E 24-28E Sustainable revenues with improved mix Selected P&L Items (€m) CAGR CAGR Operating Income 3,840 3,844 4,056 0.1% 1.4% Operating Costs (1,868) (1,967) (2,034) 2.6% 2.2% Enhanced structural efficiency Gross Operating Profit 1,972 1,878 2,
Slide 13: Financial Targets underpinned by a comprehensive investment plan
Financial Targets underpinned by a comprehensive investment plan to introduce innovations and new technologies Technology Innovation Strategy Highlights Focus on Key Initiatives Evolution of digital channels proposition, including • €500m plan of Capex over Cumulated IT Capex 2024-28E (€m) Digital B
Slide 14: Focus on Net Interest Income
Focus on Net Interest Income Net Interest Income Evolution (€m) • Net interest income component related to commercial activities(1) Commercial Commercial Substantially flat negatively impacted by NII(1) Evolution NII(1) Evolution expected rates dynamics 2,247 (over the period 2024-26E), 135 24 to be
Slide 15: Focus on Commercial Volumes
Focus on Commercial Volumes Commercial Loans Mix(1) (€bn) Commercial Direct Savings Mix(1) (€bn) CAGR 1H-24-’28E: 0.6% CAGR 1H-24-’28E: 2.1% CAGR 1H-24-’26E: -0.1% Titolo del grafico CAGR 1H-24-’26E: 1.7% • Commercial loans stock projected to grow at 2.1% CAGR 72.8 72.7 74.7 72.5 over the period 1H2
Slide 16: Focus on Net Fee & Commission income: evolution and breakdown
Focus on Net Fee & Commission income: evolution and breakdown Net Fee & Commission income composition (€m) CAGR ‘24E-’26E CAGR ‘24E-’28E • Growth in net fee & commission 1,662 +4.3% income at +4.3% CAGR over the 1,527 +4.4% period 2024-28E driven by both: 1,402 834 +2.3% ‒ Wealth Management & 799 +2
Slide 17: Evolution of Wealth Management & Protection Fees
Focus on Net Fee & Commission Income: evolution of Wealth Management & Protection Fees Wealth Management & Protection Fees(1) (€m) Indirect Funding Growth(2) (€bn) • Projected sustained growth in CAGR ‘24E-’28E: +6.6% CAGR wealth management & CAGR 1H24A- protection fees (+6.6% CAGR 1H24A- 2028E over
Slide 18: Build-up of Widiba's platform at scale
Focus on Net Fee & Commission Income: build-up of Widiba’s platform at scale • Accelerated recruiting of financial advisors (mainly mid-sized, but also some with Financial Advisors (#) Growth of large portfolios), focusing on geographic areas with higher potential ~820 network and • Evolution of dig
Slide 19: Proactive Capital Management Strategy
Embedding Value Distribution and Creation in our Proactive Capital Management Strategy 75% ~€1.3bn Pay-out Ratio(1) >€950m ~18% 2024E Guidance Pre-tax Profit Cash Dividend CET1 Ratio (vs. ~25% in 2023) Assuming Not yet reflecting the benefit at CET1 level of for illustration CET1 ratio “off-balance
Slide 20: Agenda
Agenda ▪ A nationwide «clear and simple commercial bank» ▪ The 2024 – 2028 Business Plan ▪ The latest performance (3Q24 & 9M24 Results) 20
Slide 21: Net Profit
Net Profit Quarterly Evolution (€m) Yearly Evolution (€m) +31.4% +68.6% 1,566 470 827 929 457 407 +18.9% 310 1,096 +5.7% 922 307 370 390 3Q-23 2Q-24 3Q-24 9M-23 9M-24 positive net tax • 9M-24 net profit at €1,566m, up +68.6% y/y, including €470m of positive net tax • 3Q-24 net profit at €407m, up +5
Slide 22: Gross Operating Profit
Gross Operating Profit Operating Income (€m) Gross Operating Profit (€m) +8.3% +13.7% 2,804 3,037 2,674 2,860 1,645 1,446 9M-23 9M-24 Core revenues (NII + Fees) Other financial revenues Operating Costs (€m) +2.5% 1,358 1,392 9M-23 9M-24 Cost/Income 48% 46% 9M-23 9M-24 • 9M-24 gross operating profit
Slide 23: Net Customer Loans
Net Customer Loans Net Loans (1) (€bn) -2.1% -1.9% 62.8 63.1 62.6 61.5 30.6 31.0 30.6 29.5 32.1 32.1 32.1 31.9 6.1 6.2 6.2 6.0 Dec-23 Mar-24 Jun-24 Sep-24 Small business & medium enterprises Retail Large Corporate & Other • Net customer loans volumes dynamics reflecting market trend Notes: (1) Loans
Slide 24: Total Commercial Savings
Total Commercial Savings Total Commercial Savings(1) (€bn) +3.7% -0.4% 161.7 164.4 163.7 Q/Q vs Dec-23 157.9 56.6 57.8 58.3 59.2 +1.5% +4.5% 29.9 32.1 31.8 32.4 -1.5% +3.2% 71.4 71.8 74.4 72.2 Dec-23 Mar-24 Jun-24 Sep-24 Deposits AuC AuM • Total commercial savings increased by €+5.8bn since Dec-23 a
Slide 25: Net Fee and Commission Income
Net Fee and Commission Income Commercial Banking Fees(1) (€m) Total Fees (€m) +3.2% +10.7% 539 556 1,092 987 9M-23 9M-24 Wealth Management and Advisory Fees (1) (€m) +19.6% 536 448 9M-23 9M-24 9M-23 9M-24 • 9M-24 total fees at €1,092m, up +10.7% y/y, thanks to almost +20% y/y growth in wealth manage
Slide 26: Operating Costs
Operating Costs HR Costs (€m) Operating Costs (€m) +6.9% +2.5% 859 918 1,358 1,392 9M-23 9M-24 Non-HR Costs (€m) -4.9% 499 475 9M-23 9M-24 9M-23 9M-24 • 9M-24 operating costs at €1,392m (+2.5% y/y), with ongoing optimization of non-HR costs (-4.9% y/y) partially offsetting the impact of 2023 labour
Slide 27: Gross NPE Stock
Gross NPE Stock Gross NPE Stock (€bn) Breakdown by Category (€bn) 3.6 3.7 3.9 3.6 3.5 2.2 2.2 2.3 Bad loans/ 2.1 2.3 Total NPEs 1.4 1.5 1.5 1.6 1.3 36% 3.6 3.7 3.9 3.6 3.5 Dec-23 Mar-24 Jun-24 Sep-24 Sep-24 Bad loan UTP + Past due net of disposals Breakdown by type of guarantee (€bn) (2) Dec-23 Mar-
Slide 28: Coverage and Cost of Risk
Coverage and Cost of Risk NPE Coverage Breakdown Cost of Risk (bps) 68.1% 67.5% 68.4% 67.6% 37.6% 38.1% 37.7% 37.7% 21.7% 23.1% 22.8% 22.8% 57 54 50 50 9M-24 CoR Bad loan Coverage UTP Coverage Past Due Coverage 52bps Dec-23 Jun-24 Sep-24 Sep-24 net of disposals Total NPE Coverage 49.1% 49.8% 49.9% 4
Slide 29: Capital
Capital CET1 Ratio Fully Loaded(1) Fully Loaded Capital Ratios(1) SREP 18.1% 18.2% 18.1% 18.3% Dec-23 Mar-24 Jun-24 Sep-24 2024 CET1 ratio (%) 18.1% 18.2% 18.1% 18.3% 8.57% 8.6% Tier 1 ratio (%) 18.1% 18.2% 18.1% 18.3% 10.58% Total capital Dec-23 Mar-24 Jun-24 Sep-24 SREP ratio (%) 21.6% 21.6% 21.4%
Slide 30: Conclusions
Conclusions ▪ €1.6bn net profit after 9 months, up by +68.6% y/y, confirming sustainability of results ▪ Gross operating profit up +13.7% y/y, with boosted WM fees +19.6% y/y driving revenues increase +8.3% y/y ▪ Healthy growth of total commercial savings, up by €5.8bn since the beginning of the ye
Slide 31: Disclaimer
Disclaimer THIS DOCUMENT IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS DOCUMENT, WHICH WAS PREPARED BY BANCA MONTE DEI PASCHI DI SIENA S.P.A. (THE “COMPANY” OR “BMPS” AND TOGETHER WITH ITS CONSOLIDATED SUBSIDIARIES, THE “GROUP”), MAY NOT BE REPRODUCED IN ANY FORM, FURTHER DISTRIBUTED OR
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