Banca Monte Dei Paschi Di Siena S.p.a. · MIL:BMPS
Banca Monte Dei Paschi Di Siena — FY2020 Earnings Presentation
33 slides from Banca Monte Dei Paschi Di Siena's earnings presentation, Feb 10, 2021
Slide 1: BMPS FY20 and 4Q20 Preliminary Results
BMPS FY20 and 4Q20 Preliminary Results 10 February 2021
Slide 2: 2020 highlights
2020 highlights EUR 23bn Focus on supporting our customers Loans subject to moratoria, extended revocable lines and guaranteed loans WM gross flows: stable YoY Good commercial activity Commercial direct funding stock*: +17% YoY Operating costs: Ongoing cost discipline -3.7% YoY Gross NPE ratio: Comp
Slide 3: Highlights of FY20 Results
Highlights of FY20 Results Pre-provision profit Cost of risk Net operating result 90bps EUR -39mln EUR 714mln including 2020 additional provisions impacted by Covid-related provisions and environment NII impacted by cost of institutional funding and (~EUR 348mln) related to the impact of RWA/NPE der
Slide 4: Unwavering support to our customers – Moratoria and new guaranteed loans
Unwavering support to our customers – Moratoria and new guaranteed loans Moratoria* Guaranteed Loans (€/bn) Applications Accepted % of loan # €/bn 8.1 (€/bn) book 6.1 Performing customers 78k 12.0 11.8 15% 3.2 Households 23k 2.4 2.3 7% Corporates & Institutions 55k 9.6 9.5 22% Jun-20 Sep-20 Dec-20 N
Slide 5: Good commercial activity thanks to franchise resilience
Good commercial activity thanks to franchise resilience Wealth management gross inflows* (€/mln) ❑ Commercial momentum firmly +0.3% sustained, despite Covid-19: 11.3 11.3 1,278 1,332 1,125 1,149 1,333 ▪ WM gross inflows stable vs. 1,139 978 872 965 945 759 1,112 1,107 2019, notwithstanding Covid- 1,
Slide 6: Banca Widiba: strong business growth and innovation achievements continue
Banca Widiba: strong business growth and innovation achievements continue Growth acceleration: best year ever on total net new flow collection and higher customer acquisition Total Net Flows Total funding New Accounts Significant growth in net flows, Business (€/mln) (#/mld) (#/k) reaching up to 7x
Slide 7: Ongoing cost discipline as a key driver for sustainable profitability
Ongoing cost discipline as a key driver for sustainable profitability Operating cost evolution (€/bn) Personnel expenses (€/mln) 1,433 -1.2% 1,415 2,290 -3.7% 2,204 2019 2020 2019 2020 ❑ Ongoing strict cost discipline: operating costs -3.7% YoY Other administrative expenses o Personnel costs: -1.2%
Slide 8: Derisking process completed with NPE stock at EUR 4bn
Derisking process completed with NPE stock at EUR 4bn Gross NPE stock evolution (€/bn) ✓ Gross NPE ratio at ~4% from ~11% (Sept-20), vs. 12.4% in Dec-19, thanks 11.9 to the completion of Hydra 11.4 transaction and additional EUR 1.3bn NPE disposals/reductions completed 4.0 in the year ✓ EUR 4.0bn Gr
Slide 9: Solid liquidity position
Solid liquidity position ✓ Liquidity position strongly improved in the year thanks to: Loan to deposit ratio (%) 88.5% -538bps YoY ▪ positive commercial dynamics 85.1% ▪ issuance of EUR 0.7bn Tier 2 and EUR 1.5bn Senior BANKING 79.7% Preferred bonds ▪ take-up of EUR 20bn TLTRO III (for a total amoun
Slide 10: Post-Hydra capital ratios sustained by capital management actions & State guarantees
Post-Hydra capital ratios sustained by capital management actions & State guarantees Buffer Buffer Buffer ~340bps ~140bps ~230bps CET1 ratio (%) vs. SREP Tier 1 ratio (%) vs. SREP Total Capital ratio (%) vs. SREP 16.2 15.7 SREP: 12.9 12.9 SREP*: 14.1 13.5 13.44% 12.1 SREP*: 12.1 10.9 10.9 10.75% V 9
Slide 11: Agenda
Agenda ❑ FY20 and 4Q20 Results ❑ Annex 11
Slide 12: FY20 P&L highlights
FY20 P&L highlights ❑ Core Revenues: P&L (€/mln) 4Q19 1Q20 2Q20 3Q20 4Q20 FY19 FY20 ▪ YoY decrease explained by the cost of institutional funding (also to support Hydra de-risking) and, for a residual portion, by the cost of Net Interest Income 333 327 320 332 312 1,501 1,291 excess liquidity, boost
Slide 13: Net Interest Income
Net Interest Income NII at EUR 312mln (EUR -20mln vs. 3Q20) with: Net Interest Income (€/mln) ❑ Commercial net interest income largely stable: 333 327 332 -6.0% ▪ Reduction fully explained by Hydra transaction, as 320 312 positive/negative impacts of other commercial components offset each other ❑ N
Slide 14: Fee and Commission Income
Fee and Commission Income 4Q20 Fees (€/mln) €/mln 1Q20 2Q20 3Q20 4Q20 vs. 3Q20 +2.5% Wealth Management fees: 174 139 157 162 3,0% WM Placement 63 35 48 46 -3,7% +7.0% 380 371 370 Continuing 88 82 87 91 4,2% 355 324 Custody 10 12 10 11 10,2% Protection 12 9 12 14 14,5% Traditional Banking fees: 228 2
Slide 15: Financial Revenues
Financial Revenues* Dividends/Income from investments (€/mln) ❑ Dividends, similar income and gains (losses) on equity investments 4Q19 1Q20 2Q20 3Q20 4Q20 up in the quarter thanks to the higher contribution by AXA, positively impacted in 4Q20 by the recovery of financial markets Dividends/Income fr
Slide 16: Operating Costs
Operating Costs Operating Costs (€/mln) Non-recurring items ❑ Operating costs up by 5.2% QoQ, but down by 3.7% FY20 vs. FY19 -3.5% ▪ Personnel expenses: marginally increase QoQ, mainly for non-recurring costs (EUR 5mln); full benefit of 560 exit in 4Q20 starting from 1Q21 594 573 548 537 545 ▪ Other
Slide 17: Cost of Risk & Coverage
Cost of Risk & Coverage Cost of Customer loans (€/mln) Component ralated to Cost of Risk (bps) Component ralated to 315 macro scenario macro scenario 89 84 90 192 205 83 73 127 102 59 53 49 48 4Q19 1Q20* 2Q20* 3Q20 4Q20* FY19 1Q20** 1H20** 9M20** FY20 Non-performing Exposures Coverage (%) ❑ Cost of
Slide 18: Asset Quality Migration Matrix
Asset Quality Migration Matrix NPE inflows from performing (€/mln)* NPE outflows to performing (€/mln) Default rate Cure rate 1.1% 4.6% vs. 1.4% in FY19 vs. 10.1% in FY19 464 314 283 245 252 173 92 61 84 27 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Migration from UTPs/PDs to bad loans Cash r
Slide 19: Non-Operating Items and Taxes
Non-Operating Items and Taxes Non-operating items* (€/mln) ❑ Non-operating items at EUR -240mln including: ▪ EUR -23mln for the contribution to the Deposit Guarantee Scheme 4Q19 1Q20 2Q20 3Q20 4Q20 (annual contribution ~EUR -60mln, vs. ~EUR-41mln estimated in 3Q20) and the net loss on the exposure w
Slide 20: Customer Loans
Customer Loans Loans to Customers (€/bn) ❑ Customer loans down by ~EUR 4.5bn QoQ, mainly for non- core activities: 87,1 80,1 82,6 ▪ EUR -3.6bn decrease in NPEs thanks to completion of 14,4 15,9 3,6 13,6 Hydra deal 9,8 3,0 4,6 8,6 4,4 ▪ EUR +1.8bn increase in m/l term loans, mainly related to disburs
Slide 21: Direct Funding and Liquidity
Direct Funding and Liquidity Direct Funding (€/bn) ❑ Total direct funding up by ~EUR 5.3bn QoQ 103.7 ▪ EUR +3.1bn increase in commercial direct funding, with 98.4 94.2 5.7 5.2 increase concentrated on current accounts 8.2 12.2 11.6 14.2 8.0 9.5 ▪ More expensive time deposits down 7.5% QoQ 6.2 ▪ EUR
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 3.0 2.9 management up by EUR 1.9bn QoQ, thanks to Wealth Management Mix (€/bn) Mutual Funds/Sicav 2.1 positive market effect; up by Individual Portfolios Under Mgmt EUR 1.1bn YoY mostly
Slide 23: Capital Structure
Capital Structure (€/bn) 3Q20 4Q20 Phased-in CET1 ratio (%) TBV 6.6 5.6 12.9 0.0 +0.8 +0.1 12.1 -1.4 -0.3 Transitional 7.2 6.1 CET1 Fully-loaded 6.1 4.9 CET1* RWAs 56.1 49.9 Sep-20 Hydra deal 4Q20 4Q20 Other Other effects Dec-20 (incl. release of Net operating Net non-operating RWAs (incl. software
Slide 24: Strong de-risking of Italian Govies Portfolio
Strong de-risking of Italian Govies Portfolio* Italian Govies Portfolio (€/bn) Since 2016: ❑ Italian Govies portfolio down by ~EUR 4bn QoQ, -EUR 6.5bn, -36% o Decrease mainly connected with the reduction of the 18.0 16.6 17.3 FVTPL portfolio of MPS Capital Services 0.1 2.7 15.4 0.1 3.1 3.8 o In 2020
Slide 25: Agenda
Agenda ❑ FY4Q20 Results ❑ Annex 25
Slide 26: 4Q20 and FY20 P&L: Highlights
4Q20 and FY20 P&L: Highlights Change Change € mln 3Q20 4Q20 FY19 FY20 Starting from 1Q20, the portion (QoQ%) (YoY%) relating to loans to customers of Net Interest Income 332 312 -6.0% 1,501 1,291 -14.0% P&L items 100a, 110b, 130a and 140, plus item 200a, have been Net Fees 355 380 +7.0% 1,450 1,430
Slide 27: Balance Sheet
Balance Sheet Total Assets (€/mln) Starting from 1Q20, the reclassified balance Dec-19 Jun-20 Sep-20 Dec-20 QoQ% YoY% sheet was revised in order to ensure greater consistency of the aggregates with the Loans to Central banks 9,405 15,038 18,680 28,526 52.7% n.m. instruments that constitute them. The
Slide 28: Lending & Direct Funding
Lending & Direct Funding Total Lending (€/mln) Dec-19 Sep-20 Dec-20 QoQ% YoY% Current accounts 4.626 3.649 3.039 -16,7% -34,3% Medium-long term loans 49.046 53.417 55.200 3,3% 12,5% Other forms of lending 15.921 14.421 13.616 -5,6% -14,5% Reverse repurchase agreements 4.434 9.829 8.617 -12,3% 94,3%
Slide 29: Focus on commercial net interest income
Focus on commercial net interest income* 4Q19 1Q20 2Q20 3Q20 4Q20 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 73.2 2.13% 72.5 2.12% 73.3 2.08% 73.
Slide 30: 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 4Q20 o DTAs related to write-downs of loans, goodwill and ➢ 100% included in Risk-Weighted Assets like any 1 Converti
Slide 31: Focus on legal risks
Focus on legal risks Legal risks at 31/12/20 Legal risks from financial information ~EUR 5.1bn total petita for litigations, ❑ Overall claims connected to litigations arising classified by disbursement risk profile: from the financial information disclosed by the Claims related to disclosed financia
Slide 32: Focus on Asset Quality
Focus on Asset Quality Non-Performing Exposures - NPEs (€/mln) Gross Book Value Net Book Value Coverage 3Q20 4Q20 3Q20 4Q20 3Q20 4Q20 Bad loans (sofferenze) 6,287 1,499 2,856 565 54.6% 62.3% Unlikely-to-Pay loans 4,892 2,438 2,724 1,541 44.3% 36.8% Past due/overdue exposures 266 76 203 55 23.6% 27.8
Slide 33: 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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