Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS
Banca Monte Dei Paschi Di Siena — Q1 2020 Earnings Presentation
41 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, May 7, 2020
Slide 1: BMPS 1Q20 Results
MONTE | DEI PASCHI BMPS 1Q20 Results | DI SIENA BANCA DAL 1472 7 May 2020
Slide 2: Highlights of 1Q20 Results
Highlights of 1Q20 Results Pre-provision profit Cost of risk Net income EUR 181mln EUR 315mln c. 60bps EUR -244mln BANKING INDUSTRY Ordinary component NII: essentially stable net of “calendar effect” of which EUR 193mln Including non-operating costs for Fees: strong WM performance before Covid-19 ad
Slide 3: Covid-19 immediate response
Covid-19 immediate response Smart working: Branch access & digital channel drive: Sustaining the economy: ▪ 90% of staff able to promptly & ▪ Only 1.6% of branches closed during ▪ Timely rollout of financial relief measures efficiently work from home, thanks to pandemic introduced by the government*
Slide 4: Supporting the economy - Moratorium
Supporting the economy - Moratorium Moratorium Applications received* c. 90k moratorium applications received, for a total GBV of EUR 10.2bn Applications Exposure (#) (€/bn) c. 25% applications pertain to GMPS ad-hoc initiatives, mainly in favour of households Total 90k 10.2 Good quality custo
Slide 5: Supporting the economy - Guarantees
Supporting the economy - Guarantees Guarantees Applications received** New facilities introduced by the “Cura Italia” and “Liquidità” Applications for loans up to EUR 25k, 100% guaranteed by decrees* are entering in the decision-making framework, Fondo Garanzia Imprese***: being factored into st
Slide 6: Good commercial performance before Covid-19 crisis
Good commercial performance before Covid-19 crisis Wealth management gross inflows* (€/mln) Good performance in the first months of the year, confirming franchise solidity 1,278 1,332 Positive commercial dynamics in 1Q20: 978 872 840 818 616 ✓ WM gross flows at EUR 3.2bn, c. +22% YoY and +8% QoQ,
Slide 7: Widiba's first quarter 2020: no impact from Covid-19
Widiba's first quarter 2020: no impact from Covid-19 Bank’s, current Customers’ and Advisors’ activities did not come to a halt, showing on the contrary an increase throughout all business fields vs. the same period of last year Transactional First quarter 2020 characterised Platform Banking Investm
Slide 8: Solid capital ratios, above regulatory requirements
Solid capital ratios, above regulatory requirements CET1 ratio (%) Buffer Total Capital ratio (%) Buffer c. 475bps c. 257bps vs. amended vs. SREP SREP 16.7 16.2 14.7 13.6 14.7 14.5 12.7 11.9 SREP: 10.14% 13.64% Original SREP 8.83% New SREP with art. 104 relief measures on P2R Dec-19 Mar-20 Dec-19 Ma
Slide 9: Funding & Liquidity
Funding & Liquidity Counterbalancing All liquidity indicators Main Capacity LCR NSFR well above requirements liquidity after reimbursement of EUR 21.7bn >150% >100% indicators EUR 8bn GGBs in 1Q20 (c. 16% of total assets) Main events of the quarter: Funding strategy: Access to wholesale funding ma
Slide 10: Agenda
Agenda 1Q20 Results Details on 1Q20 Results Annex 10
Slide 11: 1Q20 P&L: highlights
1Q20 P&L: highlights P&L (€/mln) 1Q19 2Q19 3Q19 4Q19 1Q20 Pre-provision profit at EUR 181mln: Net Interest Income 409 404 355 333 327 ▪ NII impacted by ongoing pressure on lending (lower average volumes and asset spread) and increased cost of wholesale Fees and commissions 359 364 356 371 370 fund
Slide 12: Net Interest Income
Net Interest Income Net interest income down by 1.9% QoQ, mainly impacted by: Net Interest Income (€/mln) ▪ persisting pressure on asset margins ▪ slightly decreased average loan volumes (EUR -0.7bn in the 409 quarter) 404 -1.9% ▪ increased cost of wholesale funding, ascribable to institutional 35
Slide 13: Fee and Commission Income
Fee and Commission Income 1Q20 1Q20 €/mln 1Q19 4Q19 1Q20 vs. vs. 4Q19 1Q19 Fees (€/mln) Wealth Management fees: 155 166 174 4.6% 11.7% +3.1% WM Placement 49 53 63 18.6% 27.8% Continuing 85 89 88 -0.9% 4.0% -0.3% 364 371 370 359 356 Custody 10 9 10 18.2% -1.1% Protection 11 15 12 -21.2% 10.8% Traditi
Slide 14: Financial Revenues
Financial Revenues* Dividends, similar income and gains (losses) on equity Dividends/Income from investments (€/mln) investments include the contribution from the joint venture with AXA 1Q19 2Q19 3Q19 4Q19 1Q20 Dividends/Income from investments 16 27 37 15 12 Trading/Disposal/Valuation Hedging of
Slide 15: Operating Costs
Operating Costs Operating Costs (€/mln) Operating costs for 1Q20 decrease by c. EUR 46mln (-7.7%) QoQ and by -3.6% c. EUR 21mln (-3.6%) YoY ▪ Personnel expenses increase by 1.2% QoQ due to collective labour -7.7% agreement renewal effects; on a yearly basis, 3.2% decrease driven by 569 577 594 549
Slide 16: Cost of Risk & Coverage
Cost of Risk & Coverage Cost of Customers loan* (€/mln) Cost of Risk (bps) 315 83 192 70 63 73 144 64 137 110 c. 60bps net of additional provisions for new scenario 1Q19 1H19 9M19 FY19 1Q20** 1Q19 2Q19 3Q19 4Q19 1Q20 Non-performing Exposures Coverage (%) Cost of customer loans at EUR 315mln for th
Slide 17: Focus on Cost of customer loans: Covid-19 impacts
Focus on Cost of customer loans: Covid-19 impacts PE portfolio: prudentially, performing loan portfolio revised ahead of publication of ECB scenario expected by June and full implementation of national economic relief measures (moratorium and guarantees). Worsening Cost of risk affected by the downw
Slide 18: Asset Quality Migration Matrix
Asset Quality Migration Matrix NPE Inflows from Performing* (€/bn) NPE Outflows to Performing* (€/bn) Default rate Cure rate 1.1% 6.4% vs. 1.4% FY19 vs. 10,1% FY19 0.5 0.2 0.1 0.1 0.1 0.3 0.3 0.3 0.2 0.3 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Migration from UTPs/PDs to Bad Cash recovery o
Slide 19: Non-Operating Items and Taxes
Non-Operating Items and Taxes Non-operating items* (€/mln) Non-operating items at EUR -112mln including: ▪ EUR -58mln for the annual contribution to the Single Resolution -60 -70 Fund -114 -109 -112 ▪ EUR -18mln for quarterly DTA fees introduced by Law Decree 59/2016 ▪ EUR -35mln mainly related to
Slide 20: Customer Loans
Customer Loans Loans to Customers (€/bn) Customer loans up by c. EUR 2.1bn QoQ: 81.9 80.1 82.2 ▪ EUR +0.5bn increase in mortgages, with new inflows 16.5 15.9 16.5 higher than maturities 4.6 4.0 5.0 4.4 4.6 5.7 ▪ EUR +1.3bn increase in repos ▪ EUR +0.6bn increase in other forms of lending 48.9 49.0
Slide 21: Direct Funding and Liquidity
Direct Funding and Liquidity Direct Funding (€/bn) Total direct funding up by c. EUR 1.2bn QoQ ▪ EUR +0.4bn increase in funding from commercial customers 92.7 94.2 95.4 (mainly in the retail segment) 8.2 5.4 8.7 12.0 14.2 11.7 9.5 ▪ EUR +1.7bn increase in the current account deposit held by an 7.9
Slide 22: Wealth Management and Assets Under Custody
Wealth Management and Assets Under Custody Wealth Management gross inflows* (€/bn) 3.2 Stock of assets under 3.0 management down QoQ, 2.7 2.9 Wealth Management Mix (€/bn) 2.6 due to strong negative market effect Mutual Funds/Sicav Individual Portfolios Under Mgmt Stock of assets under Life Insur
Slide 23: Capital Structure
Capital Structure (€/bn) 4Q19 1Q20 Phased-in CET1 ratio (%) TBV 8.1 7.8 14.7 13.6 -0.3 -0.4 -0.1 -0.2 -0.1 Transitional 8.6 8.0 CET1 Fully loaded 7.4 7.0 CET1* RWAs 58.6 59.3 Dec-19 IFRS 9 phase-in 1Q20 net result FVTOCI reserves RWAs Other effects Mar-20 Fully loaded CET1* (%) 12.7 11.9 Total Capit
Slide 24: Focus on Italian Govies Portfolio
Focus on Italian Govies Portfolio* Italian Govies portfolio slightly increased QoQ mainly due to Italian Govies Portfolio (€/bn) AMORTISED COST (nominal value) FVTPL component, with banking book (FVTOCI/AC) slightly FVTPL (net of short positions) decreased. Sensitivities virtually unchanged FVTOCI
Slide 25: Potential impacts on capital from newly approved and proposed measures
Potential impacts on capital from newly approved and proposed measures* Measures Potential impact ▪ Opportunity to operate temporarily below P2G and ▪ Potential buffer on CET1 and Total Capital of CCB capital levels c. EUR 2.3bn ▪ Six-month postponement of TRIM impact on books ▪ c. EUR 3bn RWA incre
Slide 26: Potential impacts on funding & liquidity from newly approved measures
Potential impacts on funding & liquidity from newly approved measures* Measures Potential impact ▪ Opportunity to operate temporarily below the 100% LCR ▪ LCR target confirmed well above minimum requirement, if needed threshold ▪ Changes to TLTRO3: ▪ Possible increased access to TLTRO3 up to a ▪ inc
Slide 27: Agenda
Agenda 1Q20 Results Details on 1Q20 Results Annex 27
Slide 28: 1Q20 P&L: Highlights
1Q20 P&L: Highlights Change Change € mln 4Q19 1Q20 1Q19 1Q20 Starting from 1Q20, the portion (QoQ%) (YoY%) relating to loans to customers of Net Interest Income 333 327 -1.9% 409 327 -20.0% P&L items 100a, 110b, 130a and 140, plus item 200a, have been Net Fees 371 370 -0.3% 359 370 +3.1% traced back
Slide 29: Balance Sheet
Balance Sheet Total Assets (€/mln) Starting from 1Q20, the reclassified balance Mar-19 Dec-19 Mar-20 QoQ% YoY% sheet was revised in order to ensure greater Loans to Central banks 5,773 9,405 8,110 -13.8% 40.5% consistency of the aggregates with the instruments that constitute them. The main Loans to
Slide 30: Lending & Direct Funding
Lending & Direct Funding Total Lending (€/mln) Mar-19 Dec-19 Mar-20 QoQ% YoY% Current accounts 4,997 4,626 4,552 -1.6% -8.9% Mortgages 48,878 49,046 49,549 1.0% 1.4% Other forms of lending 16,458 15,921 16,550 3.9% 0.6% Reverse repurchase agreements 4,033 4,434 5,723 29.1% 41.9% Impaired loans 7,534
Slide 31: Focus on commercial net interest income
Focus on commercial net interest income* 1Q19 2Q19 3Q19 4Q19 1Q20 Net interest income (€/mln, %) average average average average average average average average average average volumes rates volumes rates volumes rates volumes rates volumes rates Commercial Loans 74.6 2.32% 74.9 2.26% 73.5 2.17% 73.
Slide 32: Focus on DTAs
Focus on DTAs Current Italian fiscal regulations do not set any time limit to the use of fiscal losses against the taxable income of subsequent years. Definition Regulatory treatment 1M20 o DTAs related to write-downs of loans, goodwill and ➢ 100% included in Risk-Weighted Assets like any 1 Converti
Slide 33: Focus on legal risks
Focus on legal risks Legal risks at 31/03/20 Legal risks from financial information EUR 4.8bn total petita, classified Overall claims connected to litigations arising from the Claims related to disclosed financial 31/03/20 31/12/19 by disbursement risk profile: financial information disclosed by t
Slide 34: Focus on Asset Quality
Focus on Asset Quality Non-Performing Exposures - NPEs (€/mln) Gross Book Value Texas Ratio* (%) excluding interest in Net Book Value Coverage arrears on defaulted assets FY19 1Q20 FY19 1Q20 FY19 1Q20 92.2% Bad loans (sofferenze) 6,424 6,265 2,982 2,853 53.6% 54.5% 85.6% 85.7% Unlikely-to-Pay loans
Slide 35: Restructured unlikely-to-pay loans
Restructured unlikely-to-pay loans* Breakdown by Guarantees (€/bn) Breakdown by Vintage (€/bn) # Tickets** GBV Coverage NBV % NBV GBV <3Y >3Y Secured 155 0.4 34.4% 0.3 24.0% Secured 0.4 27.1% 72.9% Personal guarantees 149 0.3 54.5% 0.1 12.0% Personal guarantee 0.3 24.9% 75.1% Unsecured 483 1.6 51.5%
Slide 36: Other Unlikely-to-Pay
Other Unlikely-to-Pay* Breakdown by Guarantees (€/bn) Breakdown by Vintage (€/bn) # Tickets** GBV Coverage NBV % NBV GBV < 3Y > 3Y Secured 8,432 1.4 22.9% 1.1 62.3% Secured 1.4 64.5% 35.5% Personal guarantees 8,616 0.5 53.0% 0.2 13.6% Personal guarantees 0.5 61.1% 38.9% Unsecured 98,548 1.0 59.4% 0.
Slide 37: Agenda
Agenda 1Q20 Results Details on 1Q20 Results Annex 37
Slide 38: New cost of risk calculation
New cost of risk calculation P&L (€ mln) Dec-19 P&L (€ mln) Dec-19 Net Interest Income 1,501 Net Interest Income 1,501 Net Fees and commissions Income 1,450 Fees and commissions 1,450 Financial revenues 353 o/w: cost of State guarantee -94 100 a) Financial assets measured at amortised cost (loans) -
Slide 39: Balance sheet reclassification
Balance sheet reclassification Securities vs. banks Assets Reclassified consolidated Balance Sheet Reclassified consolidated Balance Sheet - new and vs. Loans classifie Central Tax customers measure d as Derivatives Banks assets measured at d at FV held for Assets 31 12 2019 amortised sale 31 12 201
Slide 40: SME Guarantee Fund
Guarantees provided for by the “Decreto Liquidità”* COMPANY SIZE FINANCEABLE AMOUNT % DIRECT ASSESSMENT OF THRESHOLDS AMOUNTS THRESHOLDS GUARANTEE BENEFICIARY BY BANK (Businesses with up to 499 employees) No limit on 25% of 2019 Formal assessment of SME Guarantee Fund Up to €25k 100% revenues revenu
Slide 41: 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” AND TOGETHER WITH ITS CONSOLIDATED SUBSIDIARIES, THE “GROUP”), IS PRELIMINARY IN NATURE AND MAY BE SUBJECT TO UPDATING, REVISION A
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