BAWAG Group AG · VIE:BG
BAWAG — FY2020 Earnings Presentation
31 slides from BAWAG's earnings presentation, Feb 9, 2021
Slide 1: Preliminary FY 2020 Earnings
Preliminary FY 2020 Earnings Anas Abuzaakouk, CEO Enver Sirucic, CFO 09 February 2021 09 February 2021 | BAWAG Group AG 1
Slide 2: Preliminary FY 2020 Highlights and segment performance
Preliminary FY 2020 Highlights and segment performance Detailed financials Group Overview & Strategy 09 February 2021 | BAWAG Group AG 2
Slide 3: Highlights FY 2020
Highlights FY 2020 • Net Profit of €284m, EPS of €3.19, and RoTCE 10.2% EARNINGS • Pre-provision profit of €653m and CIR 44.3% … includes ~€22m restructuring charge in Q4 ‘20 • Risk cost of €225m, of which ~€100m ECL reserves and management overlays • Conservative provisioning with no ECL releases,
Slide 4: Financial performance
Financial performance Key highlights P&L | € millions 2020 vPY Q4 ‘20 vPY vPQ Balance Sheet & Capital | € millions Q4 ‘20 Q3 ‘20 vPQ vPY Core revenues 1,171 1% 298 1% - Total assets 53,128 51,238 4% 16% Operating income 1,172 (5%) 302 (4%) 4% Interest-bearing assets 40,410 40,274 - 10% Operating exp
Slide 5: Capital development … CET1 ratio (FL)
Capital development … CET1 ratio (FL) Solid capital generation despite macroeconomic downturn ~+180bps Q4 ’20 CET1 ratio excluding dividend at 16.3% … (2020 gross capital generation through earnings) post dividend of €460m at 14.0% 16.3% 0.1% CET1 ratio target unchanged @12.25% … ~310bps, or ~€620m,
Slide 6: Capital distribution update
Capital distribution update Consistent average annual capital generation through +220bps earnings +220bps since 2017 ~410 bps = €820m Total Excess capital 16.3% “Earmarked dividends” Dividends of €460m deducted from CET1 capital … €5.17 per share pre-dividend €3.28b 1 1 ~230 bps = €460m (a) €230m fo
Slide 7: Retail & SME
Retail & SME Financial performance Customer development € millions 2020 2019 vPY Q4 ‘20 vPQ € millions 2020 2019 vPY Q4 ‘20 vPQ Core revenues 882.7 868.3 2% 219.4 - Housing loans 14.331 13.068 10% 14.331 2% Net interest income 664.1 626.0 6% 164.4 (1%) Consumer and SME 4.915 5.087 (3%) 4.915 (2%) Ne
Slide 8: Retail & SME
Retail & SME Portfolio overview of €19.2b of customer loans and leases Payment deferral overview NPL ratio Reserve development Reserve ratio Payment holiday average time on Assets paying ratio payments Q4 '20 (expired YE '19 YE '20 YE '19 YE '20 YE '19 YE '20 31.12.2020 05.02.2021 (expired deferrals
Slide 9: Corporates & Public
Corporates & Public Financial performance Customer development € millions 2020 2019 vPY Q4 ‘20 vPQ € millions 2020 2019 vPY Q4 ‘20 vPQ Core revenues 275.1 292.1 (6%) 69.0 1% Corporate lending 4.060 5.188 (22%) 4.060 (5%) Net interest income 236.1 249.1 (5%) 59.0 (1%) Asset backed lending 4.954 4.602
Slide 10: Corporates & Public
Corporates & Public Portfolio overview of €13.9 billion of customer loans … whereof €4.9b in public sector Payment Deferral overview NPL ratio Reserve development Reserve ratio Payment holiday average time on Assets paying ratio payments Q4 '20 (expired YE '19 YE '20 YE '19 YE '20 YE '19 YE '20 31.1
Slide 11: Investment book and Cash
Investment book and Cash Deployed excess cash into high-quality securities in 2020 YE ‘19 YE ‘20 Cash & Cash equivalent As of YE ‘20, cash and cash equivalents (mainly money 9% at central banks) at €10.9b ... TLTRO III of €5.8b in 20% Q2 ’20 €7.1b in % +€ 3.8b €10.9b in % Investment book primarily s
Slide 12: Detailed financials
Preliminary FY 2020 Highlights and segment performance Detailed financials Group Overview & Strategy 09 February 2021 | BAWAG Group AG 12
Slide 13: P&L & key ratios
P&L & key ratios P&L | € millions Q4 ‘20 vPY vPQ 2020 vPY Key ratios Q4 ‘20 vPY vPQ 2020 vPY Net interest income 233.8 4% - 916.3 4% Return on Common Equity 9.7% (3.7pts) 0.4pts 8.5% (5.0pts) Net commission income 64.3 (8%) 2% 254.8 (10%) Return on Tangible Common Equity 11.5% (4.5pts) 0.4pts 10.2%
Slide 14: Balance sheet
Balance sheet Growing overall balance sheet thru increased interest-bearing assets Balance sheet | € billions 2020 2019 vPY vPQ Capital & RWA | € billions 2020 2019 vPY vPQ Customer loans 32.0 30.5 5% 1% Common equity 3.4 3.3 4% - Securities and bonds 7.5 5.4 41% (3%) Tangible common equity 2.9 2.7
Slide 15: P&L details – core revenues
P&L details – core revenues Solid core revenues in Q4 ‘20 … NCI still impacted by COVID-19 effects € millions Net interest income (NII) stable vPQ … net interest margin (NIM) at 2.28% in Q4 ‘20 293.9 291.8 297.6 298.1 283.6 ‒ Positive annual trend resulting from increasing average interest-bearing a
Slide 16: P&L details – operating expenses
P&L details – operating expenses Core costs lower versus prior year … Q4 ’20 includes restructuring costs Cost-income ratio at 47.9% in Q4 ’20 … FY 44.3% and 42.5% when excluding restructuring charges € millions Core operating expenses FY ‘20 core operating expenses down 6% vPY as a result Restructu
Slide 17: P&L details – risk costs
P&L details – risk costs Strong underlying asset quality € millions Risk costs / average interest-bearing assets General reserve including macro-forecast, ECL and overlays Q4 ‘20 risk costs €45m … risk cost ratio at 44bps Risk costs / average interest-bearing assets (w/o general reserve) ‒ €19m spec
Slide 18: Details on reserves
Details on reserves Continuing to remain prudent despite improved economic forecast IFRS 9 Migration- Customer Segment Assets Non-performing stage 3 loans, in €m 836 860 885 811 809 Stage 3 2% 2% 2% 2% 2% Stage 2 4% 5% 254 254 10% 10% 8% 254 254 254 City of Linz (CoL) Stage 1 94% 93% 557 554 582 605
Slide 19: Regulatory Capital
Regulatory Capital Strong capital position € billions CET1 Capital and ratios Impact of capital measures: dividend ‒ “City of Linz” worst case scenario fully addressed CET1 capital (post dividend) through prudential filter; net impact of (60bps) to CET1 ratio (post dividend) CET1 ratio in 2020 3.3 ‒
Slide 20: 2021 Outlook
2021 Outlook Developments in 2021 OUTLOOK 2021 Core revenues ‒ We anticipate subdued activity during H1 ’21 given continued Core revenues lockdowns, followed by a normalized environment in H2 ’21 FY ’20: €1,171m ~2% growth Operating expenses ‒ Booked ~€22m restructuring charges in 2020 … ongoing eff
Slide 21: Targets
Targets TARGETS 2021 MEDIUM-TERM TARGETS Extraordinary Based on normalized environment General Meeting 03 March ‘21 Return on tangible Return on tangible common equity (RoTCE) common equity (RoTCE) Capital >13% >15% Markets Day September ‘21 Cost-income ratio Cost-income ratio <41% <40% Annual Gener
Slide 22: Group Overview & Strategy
Preliminary FY 2020 Highlights and segment performance Detailed financials Group Overview & Strategy 09 February 2021 | BAWAG Group AG 22
Slide 23: BAWAG Group
BAWAG Group COMPANY PROFILE CAPITAL MANAGEMENT TARGETS Focused on organic One of Austria‘s leading banking groups with and inorganic growth 2.3 million customers across DACH/NL region RoTCE CIR 2021 >13% <41% 2020 results: €284m net profit, 10.2% RoTCE, CIR 44.3% and CET1 ratio (post dividend) 14.0%
Slide 24: Strategy
Strategy 4 pillars of our growth strategy Drive efficiency through Maintaining a safe and Growing in our core markets Focus on Customer Centricity operational excellence secure risk profile ‒ Our foundation is Austria with focus on ‒ Build multi-channel and multi-brand ‒ Our DNA is to focus on the t
Slide 25: ESG embedded into our strategic roadmap
ESG embedded into our strategic roadmap Committed to responsible, sustainable and profitable growth ENVIRONMENT SOCIAL GOVERNANCE ‒ Reduce own Scope 1 and Scope 2 CO2 ‒ Empower our clients by continuously enhancing ‒ Executive body of ESG-topics is the Non- emissions mid-term our services and digita
Slide 26: Bank transformation
Bank transformation Focusing on things we control and driving operational excellence KEY METRICS Increased profitability … Private company Public company Pre-tax profit (€ millions) 2013 2014 2015 2016 2017 2018 2019 2020 573 604 500 419 445 RoTCE 11% 15% 17% 18% 15% 15% 16% 10% 370 316 191 C/I rati
Slide 27: Customer businesses €33.2 billion
Customer businesses €33.2 billion As of December 2020 RETAIL & SME CORPORATES & PUBLIC CUSTOMER BUSINESSES By product €33.2 billion of which … 26% 29% 35% ~79% €19.2b €13.9b in % in % 74% 36% Secured or public sector lending Housing loans Consumer & SME Corporate lending Asset backed lending Public
Slide 28: Proven M&A track record
Proven M&A track record Experienced with bolt-on acquisitions to build out customer franchise 2019 Key M&A targets 3) €0.1b assets, 3k customers €1b factoring volume 2019 ‒ Continued focus on companies within the DACH/NL region and core Europe 2019 €0.6b assets 50k customers ‒ Assessing banks, speci
Slide 29: Investor relations calendar
Investor relations calendar UPCOMING ROADSHOWS AND CONFERENCES SHAREHOLDER STRUCTURE 9 Feb Digital one-on-one and group meetings Managing Board 2.4 3 Mar Extraordinary General Meeting (virtual; https://www.bawaggroup.com/agm) 78.2% Free Float GoldenTree Week of 8 Mar Digital one-on-one and group mee
Slide 30: Important Disclaimer
IMPORTANT DISCLAIMER: This presentation is prepared solely for the purpose of providing general information about BAWAG Group, Wiedner Gürtel 11, 1100 Wien. The information does not constitute investment or other advice or any solicitation to participate in investment business. This presentation doe
Slide 31: Annex – Definitions and abbreviations
Annex – Definitions and abbreviations After-tax earnings per share (EPS) Pre-tax earnings per share Net profit / weighted average number of shares outstanding (diluted) Profit before tax / weighted average number of shares outstanding (diluted) B/S leverage Return on common equity (RoCE) Total asset