Banco Bpm Spa · MIL:BAMI
Banco Bpm Spa — Banco Bpm Societa Ord — H1 2024 Earnings Presentation
43 slides from Banco Bpm Spa's earnings presentation, Aug 6, 2024
Slide 1: Group H1 2024 Results Presentation
Group H1 2024 Results Presentation 06 August 2024
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 questions and answers session and any written or oral material discussed following the distribution of this document. The distrib
Slide 3: Methodological Notes
Methodological Notes ▪ The balance sheet and income statement layouts contained in this news release have been reclassified along management criteria in order to provide an indication on the Group’s overall performance based on more easily understandable aggregate operating and financial data. These
Slide 4: Agenda
Agenda 1 Executive Summary 5 2 Key Highlights 11 3 Final Remarks 23 4 H1 2024 Performance Details 26 4
Slide 5: Executive Summary
Executive Summary 1
Slide 6: H1 2024: Another set of solid results leading to guidance upgrade
H1 2024: ANOTHER SET OF SOLID RESULTS LEADING TO GUIDANCE UPGRADE ADJUSTED NET INCOME AT €776m CET1 RATIO AT 15.2% • +19% Y/Y • Highest level since the merger • Above the Strategic Plan trajectory • Well ahead of Strategic Plan landing point INCREASED EPS EXPECTED FOR 2024 2024 INTERIM DIVIDEND UPGR
Slide 7: Strong progress in H1 2024 performance & fundamentals
Strong progress in H1 2024 performance & fundamentals Data as at 30/06/2024 CUSTOMER HIGH-LEVEL +€7.7bn in H1 CORE €2.83bn in H1 FINANCIAL ASSETS IMPROVING REVENUES1 FRANCHISE PROFITABILITY +8.3% Y/Y INVESTMENT PRODUCT VALUE +31.0% Y/Y PLACEMENTS Contribution from new key Closing of Numia ▪ Stock of
Slide 8: Well on-track vs. Plan targets (1/3): Profitability
Well on-track vs. Plan targets (1/3) Profitability performance gaining momentum TOTAL REVENUES COST / INCOME +8.4% €m % 2,794 ~2,700 2,324 2,273 2,577 55% 55% 49% 48% <50% H1 21 H1 22 H1 23 H1 24 FY 26E H1 21 H1 22 H1 23 H1 24 FY 26 Half-Y. Target Avg. PRE–PROVISION INCOME LLPs & CoR +11.8% €m €m 47
Slide 9: Well on-track vs. Plan targets (2/3): Asset Quality
Well on-track vs. Plan targets (2/3) Accelerated enhancement in Asset Quality GROSS NPEs ALREADY BELOW STRATEGIC PLAN TARGET FOR 2026 GROSS NPEs: € bn 6.4 -20% Y/Y • -€0.8bn Y/Y 4.8 4.2 3.8 • -€0.4bn in H1 24 3.6 <3.4 <3.5 31/12/21 31/12/22 30/06/23 31/12/23 31/03/24 30/06/24 YE 2026 SP Target Gross
Slide 10: Well on-track vs. Plan targets (3/3): Funding Position
Well on-track vs. Plan targets (3/3) Solid Funding Position confirmed, wide buffers from record-high capital ratios INCREASING CAPITAL STRENGTH: EXCELLENT FUNDING CAPACITY UNPRECEDENTED LEVEL €2.9BN WHOLESALE BONDS ISSUED SO FAR IN 2024 (€2.5BN IN H1) CET 1 RATIO +101BPS IN H1 € bn 0.75 Senior & 0.5
Slide 11: Key Highlights
Key Highlights 2
Slide 12: H1 2024 Stated Net Income at €750m, +20.1% Y/Y
H1 2024 Stated Net Income at €750m, +20.1% Y/Y P&L HIGHLIGHTS Q2 23 Q2 24 Chg. Y/Y H1 23 H1 24 Chg. Y/Y H1 TREND: TWO-YEAR EVOLUTION €m Net interest income 810 858 6.0% 1,553 1,723 10.9% €m Net fees and commissions 485 500 3.1% 978 1,021 4.5% +37% Income from associates 24 45 61 75 2,616 2,834 Incom
Slide 13: NII at €1,723m in H1 2024
NII at €1,723m in H1 2024 Resilient outlook with rate sensitivity reduced to ~€200m NII TREND MAIN ACTIONS SUPPORTING NII TARGET OVER THE PLAN HORIZON €m +10.9% € bn €25bn Plan Target 1,723 GROWING SIZE OF 1,553 -0.7% REPLICATING PORTFOLIO2 20 864 858 15 16 Further mitigation of expected rate reduct
Slide 14: Total Customer Financial Assets +€7.7bn in H1 and New Lending +10.7% Q/Q
Total Customer Financial Assets +€7.7bn in H1 and New Lending +10.7% Q/Q TOTAL CUSTOMER FINANCIAL ASSETS CORE PERFORMING CUSTOMER LOANS € bn 215.6 218.0 GBV, € bn 97.3 96.9 95.8 210.3 11.8 11.4 Cap.-protected Certificates & 5.7 5.7 11.1 5.3 Financials, PA & Other 27.9 other Debt Securities at FV 44.
Slide 15: Total Net Fees & Commissions up at €1,021m: +4.5% Y/Y
Total Net Fees & Commissions up at €1,021m: +4.5% Y/Y INVESTMENT PRODUCT FEES €m +8.1% TOTAL NET FEES & COMMISSIONS1 350 379 Y/Y Running fees 234 +0.6% 233 €m +4.5% Upfront fees 144 +23.0% 1,021 117 978 H1 23 H1 24 350 379 Investment Product placements2 8.1 10.6 (€ bn) 628 643 Placements of BTP (€ b
Slide 16: Cost/Income ratio down at 48%
Cost/Income ratio down at 48%, notwithstanding the impact of the new labour contract TOTAL OPERATING COSTS €m 1,275 1,339 130 129 D&A 349 337 Staff costs impacted by the Other Administrative Expenses new labour contract 808 861 (+€50m H/H) Staff Costs H1 23 H1 24 Cost / Income 49% 48% STAFF COSTS OT
Slide 17: Improving CoR while strengthening coverage ratios
Improving CoR while strengthening coverage ratios Gross NPEs: -9.7% YTD and -5.0% Q/Q Migration rates well GBV, Stock €3.75bn €3.57bn €3.39bn under control LLPS & COST OF RISK <1% since UTP + PD 2.15 2.02 1.84 9M 2021 H1 24 Bad Loans FY 23 LLPs annualised 1.60 1.55 1.54 Default rate 0.93% 0.99% -25.
Slide 18: Optimization and diversification of Debt Securities portfolio
Optimization and diversification of Debt Securities portfolio TREND AND BREAKDOWN BY ACCOUNTING CATEGORY COMPOSITION BY COUNTERPARTY € bn € bn 31/12/23 31/03/24 30/06/24 42.5 40.5 36.5 1.3 Non-Govies 6.1 7.7 8.1 0.6 0.5 11.8 10.6 FVTPL 10.4 Govies 30.4 32.7 34.4 FVOCI 60.2% Non-IT Govies 63.9% 62.1%
Slide 19: Reserves of debt securities at FVOCI and Net Financial Result
Reserves of debt securities at FVOCI and Net Financial Result RESERVES OF DEBT SECURITIES BREAKDOWN OF NET FINANCIAL RESULT AT FVOCI1 Post-tax EVOLUTION H/H DETAILS Q/Q €m Total NFR -42.5 -42.0 Other NFR Components ▪ Positive contribution 31/12/23 31/03/24 30/06/24 €m from trading items €m 83.8 conf
Slide 20: Strong liquidity & funding position
Strong liquidity & funding position LIQUIDITY LCR 155% Cash + Unencumbered Assets1: + €3.2bn in H1 140% € bn HQLA2 €28.3bn €26.3bn 47.9 45.1 41.9 0.5 9.0 0.5 Remix in liquidity Cash 0.6 10.2 31/03/24 30/06/243 17.4 components driven by TLTRO NSFR 127% Depo facility with ECB reimbursement in Q1 126%
Slide 21: ESG strategy: well in progress
ESG strategy: well in progress ENVIRONMENT SOCIAL & GOVERNANCE NZBA NEW “TRANSITION & SUSTAINABILITY” UNIT TARGETS APPROVED IN TERMS OF DIRECTLY REPORTING TO THE CO-GENERAL MANAGER - CFO Representing ~75% of the INTENSITY EMISSION REDUCTION BY overall financed emissions1 of 2030 FOR 5 PRIORITY SECTO
Slide 22: Strong internal capital generation: outstanding CET 1 ratio at 15.17%
Strong internal capital generation: outstanding CET 1 ratio at 15.17% Further significant enhancement of ratios and buffers CET 1 RATIO EVOLUTION: +101BPS IN H1 2024, +43BPS IN Q2 % 14.16 14.74 +67bps -48bps -4bps -3bps +30bps 15.17 31/12/23 31/03/24 Q2 2024 Dividends FVOCI Debt Ordinary RWA Regulat
Slide 23: Final Remarks
Final Remarks 3
Slide 24: 2024 Net Income Guidance raised, well on track for 2026 targets
2024 Net Income Guidance raised, well on track for 2026 targets… KPIs 2024E VS. 2023 2026 E KEY P&L TARGETS H1 24 Half-yearly Avg. Net Interest Income € bn Net Fees & Commissions Total Revenues 2.79 ~2.70 Cost / Income Cost of Risk ~ Pre-Prov. Income Net Income 1.46 0.78 Adj. ~1.38 >0.75 0.75 Stated
Slide 25: ... with a promising outlook for shareholder remuneration
... with a promising outlook for shareholder remuneration AHEAD OF THE PLAN TRAJECTORY +117bps 15.17% 14.16% ~14% CET1 RATIO 31/12/23 30/06/2024 2026 STRATEGIC PLAN TOTAL SHAREHOLDER LANDING POINT REMUNERATION 2023-26: +€150m ahead POTENTIAL TO EXCEED of Strategic Plan €m GUIDANCE UPDATE OUR €4BN ST
Slide 26: H1 2024 Performance Details
H1 2024 Performance Details 4
Slide 27: P&L: Quarterly comparison
Reclassified income statement (€m) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Chg. Q/Q Chg. Q/Q % P&L: Quarterly Net interest income 743.0 809.9 868.7 867.7 864.4 858.4 -6.0 -0.7% comparison Income (loss) from invest. in associates carried at equity 36.3 24.3 34.1 49.4 30.3 44.6 14.2 46.9% Net interest, di
Slide 28: P&L: H1 comparison
Reclassified income statement (€m) H1 23 H1 24 Chg. Y/Y Chg. Y/Y % P&L: H1 comparison Net interest income Income (loss) from invest. in associates carried at equity 1,552.9 60.6 1,722.8 74.9 169.9 14.3 10.9% 23.6% Net interest, dividend and similar income 1,613.5 1,797.7 184.2 11.4% Net fee and comm
Slide 29: P&L: H1 2024 comparison of stated and adjusted with one-off details
P&L: H1 2024 comparison of stated and adjusted with one-off details H1 24 Reclassified income statement (€m) H1 24 One-off Non-recurring items Adjusted Net interest income 1,722.8 1,722.8 0.0 Income (loss) from invest. in associates carried at equity 74.9 74.9 0.0 Net interest, dividend and similar
Slide 30: Balance Sheet
Balance Sheet Reclassified assets (€ m) 30/06/23 31/12/23 31/03/24 30/06/24 Chg. Y/Y Value % Chg. YTD Value % Chg. Q/Q Value % Cash and cash equivalents 21,845 18,297 9,877 10,994 -10,851 -49.7% -7,303 -39.9% 1,117 11.3% Loans and advances measured at AC 112,014 109,568 108,140 105,594 -6,420 -5.7%
Slide 31: Indirect customer funding up at €111.2bn
Indirect customer funding up at €111.2bn: +12% Y/Y; +5% YTD and +1% Q/Q Assets under Management (AuM)1 Assets under Custody (AuC)2 € bn € bn +6.0% +20.2% +3.3% +6.7% +0.7% +1.0% 62.0 63.6 64.1 60.5 4.6 46.7 47.1 4.4 4.6 44.2 4.1 15.9 16.0 39.2 15.4 15.7 41.0 41.9 43.1 43.4 30/06/2023 31/12/2023 31/0
Slide 32: Wholesale bond maturities and calls
Wholesale bond maturities1 and calls Seniority profile of wholesale bond maturities1 & calls2 until YE 2026 € bn Calls 0.40 €0.90bn 0.50 0.40 Calls €1.05bn 0.65 2.00 Maturities 0.75 €3.25bn 0.50 Maturities Maturities €2.40bn €0.0bn 0.75 Calls 1.15 €0.35bn 0.50 July-Dec. 2024 FY 2025 FY 2026 Senior P
Slide 33: Strong and well diversified liability profile
Strong and well diversified liability profile, driven by successful issuance activity Bonds, Certificates & Other Debt Securities at FV MREL requirements & buffers outstanding as at 30/06/2024 as at 30/06/2024 Nominal amounts MREL as % of RWA, including Combined Buffer Requirement2 10.3% Senior Pref
Slide 34: Total Direct Funding from the Banking business
Total Direct Funding from the Banking business Evolution of Total Direct Funding1 € bn Capital-protected Certificates & other 129.1 129.8 126.1 126.0 Debt Securities at FV REPOs & Other Bonds 101.3 98.8 99.7 101.1 C/A, Sight & Time deposits - (Core Funding) (80.3%) (78.4%) (77.2%) (77.9%) (% Share o
Slide 35: Net Customer Loans at Amortized Cost
Net Customer Loans at Amortized Cost1 Net Customer Loans € bn -5.7% Change -2.8% Net Performing Customer Loans 30/06/23 31/12/23 31/03/24 30/06/24 In % Y/Y In % YTD In % Q/Q 108.2 105.4 104.9 Core customer loans 100.9 96.9 96.5 95.3 -5.5% -1.6% -1.2% 102,0 - Medium/Long-Term loans 79.3 77.1 76.9 76.
Slide 36: Analysis of Commercial Real Estate exposure
Analysis of Commercial Real Estate exposure Highly secured, concentrated in low-mid risk rating classes and in the North of Italy GBV, in € bn Performing In % on total SAFE RISK PROFILE: Exposure Perf. loans • 90% Secured (€6.7bn) Construction of buildings1 3.0 3% • 75% in Low-Mid Risk rating classe
Slide 37: Asset Quality details
Asset Quality details Loans to Customers at AC1 Gross exposures 30/06/2023 31/12/2023 31/03/2024 30/06/2024 Chg. Y/Y Chg. YTD Chg. Q/Q € m and % Value % Value % Value % Bad Loans 1,868 1,601 1,547 1,545 -324 -17.3% -57 -3.5% -2 -0.1% UTP 2,280 2,056 1,931 1,697 -583 -25.6% -358 -17.4% -233 -12.1% Pa
Slide 38: NPE migration dynamics
NPE migration dynamics €m Inflows from 231 260 286 296 202 212 Performing to NPEs (Default rate) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 €m Outflows from NPEs 42 38 22 37 24 36 to Perf. Loans Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 €m Flows from UTP to 102 84 Bad Loans 46 38 79 80 (Danger rate) Q1 23 Q2 23
Slide 39: Focus on Govies portfolio of the Banking Business
Focus on Govies portfolio of the Banking Business Italian Govies at AC Italian Govies at FVOCI Italian Govies at FVTPL € bn € bn € bn +20.6% -25.9% n.m. +1.9% +23.0% 8.7 10.8 11.0 +399.2% 9.1 2.4 2.1 1.8 1.4 0.9 0.2 0.1 0.1 30/06/23 31/12/23 31/03/24 30/06/24 30/06/23 31/12/23 31/03/24 30/06/24 30/0
Slide 40: ESG integration update: Key results in H1 2024
ESG integration update: Key results in H1 2024 ENVIRONMENT SOCIAL & GOVERNANCE • NZBA: targets approved in terms of intensity emission 2023 H1 2024 Plan Target reduction by 2030 for 5 priority sectors1 +20% • New “Transition & • Introduction of an internally developed rating Women in managerial posi
Slide 41: Successfully continuing our digitalization path
Successfully continuing our digitalization path DIGITAL BANKING KPIs H1 2024 INITIATIVES IN DIGITAL # BRANCH AND APP-BASED TRANSACTIONS (M) ▪ New products and services available Branch-based APP-based for digital sales (e.g. time deposits and personal loans on mobile) 40 33 35 26 23 22 10 16 ▪ New f
Slide 42: Capital position in detail
Gruppo Banco BPM - Uso Interno Capital position in detail FULLY LOADED CAPITAL FULLY LOADED RWA 30/06/2023 31/12/2023 31/03/2024 30/06/2024 30/06/2023 31/12/2023 31/03/2024 30/06/2024 POSITION (€ m and %) COMPOSI TI ON (€ bn) CET 1 Capital 8,386 9,036 9,238 9,439 CREDI T & COUNTERPARTY 49.9 54.2 53.
Slide 43: Contacts for Investors and Financial Analysts
Contacts for Investors and Financial Analysts Arne Riscassi Banco BPM +39 02 9477.2091 Registered Offices: Piazza Meda 4, I-20121 Milano, Italy Tom Lucassen Corporate Offices: Piazza Nogara 2, I-37121 Verona, Italy +39 045 867.5537 Silvia Leoni +39 045 867.5613 investor.relations@bancobpm.it Carmine
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