Credito Emiliano S.p.a. · MIL:CE

Credito Emiliano — Q1 2020 Earnings Presentation

23 slides from Credito Emiliano's earnings presentation, 2020

  1. Slide 1: Group Results 1Q20

    A = GROUP RESULTS 1020

  2. Slide 2: 1Q20: Key Points

    1Q20: KEY POINTS LOANS GROWTH NPL RATIO Loans to Customers Credit quality: reached €26.2 6.7% best-in-class in +4.7% billion, with a +4.7% Italy and in line growth YoY, almost with the EU 8x compared to the 3.8% 3.2% average 0.6% Industry PROFITABILITY CAPITAL Net Profit 13.30% Capital position at t

  3. Slide 3: COVID-19 Emergency

    COVID-19 EMERGENCY  PEOPLE  GOVERNMENT INITIATIVES Above 85% of people working remotely €3.5 billion to more than 21 thousand customers and Coronavirus included in insurance for moratoria, loans and State-guaranteed policy coverage funding, and participation to ABI agreements  SERVICES  FUNDING

  4. Slide 4: 1Q20 Highlights

    1Q20 HIGHLIGHTS • Excellent Loans to Customers growth, with a net production up by almost +€1.2 billion in the last 12 GROWTH months (+4.7% YoY), compared to +0.6% YoY of the Industry • Strong acceleration in Customers Funding in the quarter, up by ~€600 million thanks to the sharp growth of Direct

  5. Slide 5: Reclassified Income Statement

    RECLASSIFIED INCOME STATEMENT €, million 1Q19 4Q19 1Q20 Δvs 1Q19 Δvs 4Q19 • 1Q20 Income Statement did not yet show significant impacts from the ù Operating Income 287.4 316.3 298.3 +3.8% -5.7% current healthcare and economic scenario «Core» Operating 271.7 270.5 267.7 -1.5% -1.0% • Operating Income

  6. Slide 6: Net Interest Income (1/3)

    NET INTEREST INCOME (1/3) NET INTEREST INCOME: EVOLUTION EURIBOR AND SPREAD BTP/BUND -8.7% 268 256 238 250 243 -0.1% + €5 milion: 129 NIM reclassification 199 123 160 119 129 139 115 112 -0.2% -0.32% -0.31% -0.32% -0.33% -0.33% -0.32% -0.3% -0.40% -0.40% -0.41% -0.4% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q

  7. Slide 7: Net Interest Income (2/3)

    NET INTEREST INCOME (2/3) 2.5 CUSTOMER SPREAD* 2.0 1.87 1.86 1.79 1.74 1.73  Customer spread showed a 1.5 substantial stability vs 4Q19 1.0  Average loans and deposit rates 1.82 1.82 1.75 1.70 1.69 were in line with 4Q19 figures both 0.5 for Credem and for the Industry 0.06 0.04 0.04 0.05 0.05 0.0

  8. Slide 8: Net Interest Income (3/3)

    NET INTEREST INCOME (3/3) SECURITIES’ PORTFOLIO BREAKDOWN  Securities portfolio temporarily reduced 00% to €8.7 billion, down by almost €600 million compared to the end of 2019, 90% mainly after the consolidation of some 37% 33% 36% 35% 80% 43% capital gains on US Treasury 70%  Italian government

  9. Slide 9: Non Interest Margin

    NON INTEREST MARGIN Total 164.9 171.1 182.2 201.5 186.4 +13% YoY 2.7 27.8 13.1 6.2 Performance Fees 14.5 47.5 Income from 49.2 49.8 Financial Activities 43.8 52.4 13.7 Banking Fees 13.6 10.2 17.1 12.3 Insurance Income 98.1 91.4 Asset Management 82.2 85.1 81.7 and Brokerage Fees 1Q19 2Q19 3Q19 4Q19 1

  10. Slide 10: Operating Costs

    OPERATING COSTS OPERATING COSTS EMPLOYEES / NETWORKS +0.5% 183 183 173 180 184 Employees 6,195 6,201 6,237 6,068 6,140 180 5,899 51 54 49 52 5,763 55 5,544 5,519 5,6045,609 130 80 132 130 118 131 132 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 30 1Q19 2Q19 3Q19 4Q19 1Q20 Payroll Administr

  11. Slide 11: Loans to Customers

    LOANS TO CUSTOMERS LOANS TO CUSTOMERS: EVOLUTION 24,000 5,444 5,699 5,328 5,362 5,332 20,000 Other Loans 7,405 16,000 6,838 7,045 7,206 7,484 Residential Mortgage 2,594 2,681 Leasing 12,000 2,546 2,601 2,656 Short-Term 8,000 Loans 10,282 10,452 10,200 11,155 10,342 4,000 0 1Q19 1H19 9M19 2019 1Q20 T

  12. Slide 12: Loans: Comparison with the Industry

    LOANS: COMPARISON WITH THE INDUSTRY LOANS TO CUSTOMERS GROWTH* MARKET SHARES** EVOLUTION +4.7% YoY 1.89% 1.86% 1.9% 1.79%1.77% Industry 1.77% 140 1.66% Credem 130 +44% 1.58% 1.6% 1.48% 120 1.28% 110 1.3% 1.20% 1.16% MS on Performing Loans 100 1.07% 0.6% YoY 90 1.0% 2010 2011 2012 2013 2014 2015 2016

  13. Slide 13: Group Customers Funding: Net Inflows Breakdown

    GROUP CUSTOMERS FUNDING: NET INFLOWS BREAKDOWN 1,033 945 840 AUC 609 573 Direct Deposits 511 AUM + Insurance Total Net Inflows 259 245 285 193 70 130 41 -18 -103 -74 -146 -226 -389 -554 1Q16 1Q17 1Q18 1Q19 1Q20 • 1Q20 total Net1Q16 Inflows were positive1Q17 for almost €600 1Q18million, potentially 1

  14. Slide 14: Deposits, AUM and Insurance

    DEPOSITS, AUM AND INSURANCE €, million 2018 2019 1Q20 • Direct Deposits grew +3.8% YTD and +15.7% Slight / Saving Depo. 23,142 25,825 26,868 YoY, with a 12 p.p. over-performance compared to the Industry CD and Other Deposit 485 482 468 • AUM and Insurance were influenced by the Direct Deposits 23,62

  15. Slide 15: Bonds Issuances and Maturities

    BONDS ISSUANCES AND MATURITIES ISSUANCES MATURITIES Wholesale Retail 1,000 Covered Bond ,000 800 500: SNP 365 750: CB 500 SNP ,500 600 1,407 1,473 ,000 400 750 750 1,500 549 1,250 500 Tier 2 Covered 500 938 200 Bond 600 38 312 523 249 100 100 - 50 100 - 50 2010 2011 2012 2013 2014 2015 2016 2017 201

  16. Slide 16: Credit Quality: Gross NPL Ratio

    CREDIT QUALITY: GROSS NPL RATIO GROSS NON PERFORMING LOANS 900 707 2018 578 572 600 2019 413 399 406 Disposal 1Q20 300 ~€90 mln 34 49 52 0 Gross Bad Loans Gross UTP Loans Gross Past Due Loans % on Loans (Credem) 2.7 2.1 2.1 1.6 1.5 1.5 0.1 0.2 0.2 % on Loans (Industry)* 5.1 3.7 4.1 3.2 0.2 0.2 8.0%

  17. Slide 17: NPL: Accounting Coverage

    NPL: ACCOUNTING COVERAGE NET NON PERFORMING LOANS  Further reduction in Net NPL, that were below 2018 2019 1Q20 0 €, million €490 million. Comprehensive NPL coverage Net Bad Loans 232.6 174.6 168.6 kept growing, at 52.5%, and Bad Loans coverage reached a new high, at 70.5% Net UTP Loans 300.2 275.5

  18. Slide 18: Comprehensive Coverage

    COMPREHENSIVE COVERAGE Gross Net Shortfall* Coverage NPL Coverage (€, mln) (€, mln) (€, mln) incl. Shortfall €, million Bad Loans 571.5 168.6 70.5% 88.0 85.9% +488.7 + Net NPL UTP Loans 405.8 276.9 31.8% 15.7 35.6% - Shortfall - 104.5 = NPL net of Shortfall 384.2 Total NPL (1Q20) 1,028.8 488.7 52.5%

  19. Slide 19: Cost of Risk

    COST OF RISK 68 59 55 58 52 48 42 44 31 32 34 38 47 45 39 41 24 24 24 28 34 30 18 27 20 21 13 8 15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 Cost of risk Cost of risk (net of non-recurring items) COST OF RISK: HISTORY • 1Q20 Cost of Risk remained remarkably 80 70 low at 24 bps, despite

  20. Slide 20: Assets & Liabilities

    ASSETS & LIABILITIES 26.684 ASSETS 26.181  Securities porftolio reduced 2019 12,000 1Q20 after the consolidation of some capital gains in the first quarter, with HTCS accounting 7,283 7,021 6,143 category down by ~€1.4 billion 4,784 3,786 3,684 6,000  New ECB announcements 2,956 2,033 (two-tier sy

  21. Slide 21: Liquidity Ratios

    LIQUIDITY RATIOS NSFR LCR 251% 125% 127% 240% 121% 210% 199% 180% 172% 150% 120% 90% 2018 2019 1Q20E 2018 2019 1Q20E 1.30 1.25 1.20 LOAN TO DEPOSIT RATIO*  Both NSFR and LCR ratios were well above 1.15 1.10 1.05 0.97 minimum regulatory requirements. In 1.00 0.91 0.87 particular, the high NSFR level

  22. Slide 22: Consolidated Capital Ratios

    CONSOLIDATED CAPITAL RATIOS CAPITAL AND CAPITAL RATIOS CET1 RATIO (CREDEMHOLDING)* Banking Group Credemholding €, million 2019 1Q20 2018 2019 1Q20 14.0% 13.5% 1,90 13.3% CET 1 2,220 2,161 1,782 2,039 1,965 13.3% 1,70 Total Capital 2,567 2,311 2,093 2,339 2,164 13.0% 12.7% 1,50 Capital absorption fro

  23. Slide 23: Disclaimer and Contacts

    DISCLAIMER AND CONTACTS The manager responsible for preparing the company’s financial reports Mr. Paolo Tommasini of Credito Emiliano S.p.A., declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corres

Credito Emiliano S.p.A. (Credem) — Q1 2020 Earnings Presentation on 6ix