Banco Bpm Spa · MIL:BAMI

Banco Bpm Spa — Goldman Sachs Banking Conference (June 2016)

40 slides from Banco Bpm Spa's conference presentation, Jun 9, 2016

  1. Slide 1: The New Leading Bank - Building Our Future, Strategic Plan 2016-2019

    The New Leading Bank Building Our Future Strategic Plan 2016  2019 June 9th, 2016 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIB

  2. Slide 2: Disclaimer

    Disclaimer This presentation has been prepared by Banco Popolare – Società Cooperativa (“Banco Popolare”) and Banca Popolare di Milano S.c. a r.l. (“Banca Popolare di Milano”, together with Banco Popolare, the “Companies”) solely for your information and may not be reproduced, distributed or passed

  3. Slide 3: 2019 Strategic Plan Key Messages

    2019 Strategic Plan Key Messages Attractive and Sustainable Profitability Solid Balance Sheet and Improved Asset Quality Significant Value Creation Remunerative Dividend Policy 2 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,

  4. Slide 4: 1. Summary of Strategic Plan Targets

    1. Summary of Strategic Plan Targets NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION MIGHT BE UNLAWFUL

  5. Slide 5: Attractive and Sustainable Profitability Supported by a Solid Capital Position

    Attractive and Sustainable Profitability Supported by a Solid Capital Position… Normalised Net Income1 Cost / Income Ratio2 Euro million Delta Delta +80% (4.2p.p.) 1,070 62.0% 57.8% 593 2015 2019 2015 2019 RoTE3 CET 1 Ratio Fully Phased Delta Delta +3.5p.p. +0.6p.p. 9.0% 12.9% 4 12.3% 5.5% 2015 2019

  6. Slide 6: Coupled with a Strong Asset Quality Improvement

    …Coupled with a Strong Asset Quality Improvement Nominal NPL volumes1 Cost of Risk2 Euro billion Bad Loans bps Unlikely to Pay Delta Delta (39bps) (25%) Past Due 102 31.5 0.4 23.9 12.5 0.3 63 11.2 18.6 12.3 2015 2019 2015 2019 Coverage ratio1 NPL Ratio Secured bad loans on total Bad Loans Bad Loans

  7. Slide 7: 2. Strategic Plan Guidelines

    2. Strategic Plan Guidelines NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION MIGHT BE UNLAWFUL

  8. Slide 8: Summary of Key Strategic Guidelines

    Summary of Key Strategic Guidelines  3rd largest banking group in Italy with a leading position in the North A new leading banking group  4 million customers served through an extensive and fully complementary in some of the wealthiest distribution network regions in Europe…  National leading pla

  9. Slide 9: The 3rd Largest Italian Banking Group

    The 3rd Largest Italian Banking Group… Market Capitalization Domestic Branches1 Customer Loans Euro billion Number, December 2015 Euro billion, December 2015 Peer 1 37.3 Peer 1 4,144 Peer 1 298 Peer 2 17.4 Peer 2 3,873 Peer 2 215 3rd also by New 4.0 5.0 3rd New 2,467 3rd New 113 3rd direct and Group

  10. Slide 10: Leader in the Wealthiest Areas of Italy with Complementary Distribution Network

    …Leader in the Wealthiest Areas of Italy with an Extensive and Fully Complementary Distribution Network Market Share of the New Group Pro-Forma Market Share in Italy Market Share in Lombardy, Veneto and Piedmont (before rationalizations) (before rationalizations) # Clients: 4 million # Branches % Mk

  11. Slide 11: 4 out of the Top 10 Manufacturing Regions in Europe are Core for the New Group

    4 out of the Top 10 Manufacturing Regions in Europe are Core for the New Group Number of Employees in Manufacturing Activities Thousands, 2013 1,500 1,200 900 600 300 0 Bayern Lombardia Île de Baden- Veneto Emilia- Cataluña Piemonte Rhône- North Rhine- France Württemberg Romagna Alpes Westphalia Sou

  12. Slide 12: Leading Position in a Number of High Value Products

    Leading Position in a Number of High Value Products 1st 15% in Consumer Credit (by stock)1 Cross-Selling Opportunities 2nd 25% in Debt Brokerage (by volumes)2 Leadership position 3rd 13% in Equity Brokerage (by volumes)3 3rd Strongly 6% in Private Banking (by volumes)4 Recognized Brands 4th 6% in Ba

  13. Slide 13: Complementary and Experienced Top Management Team

    Complementary and Experienced Top Management Team Giuseppe Castagna Maurizio Faroni Chief Executive Officer General Manager  Currently CEO of BPM  Currently General Manager of Banco Popolare  More than 35 years in corporate, investment and retail banking  Broad experience in finance, corporate i

  14. Slide 14: Summary of Key Strategic Guidelines

    Summary of Key Strategic Guidelines  3rd largest banking group in Italy with a leading position in the North A new leading banking group  4 million customers served through an extensive and fully complementary in some of the wealthiest distribution network regions in Europe…  National leading pla

  15. Slide 15: The New Group Will Serve 4 Million Customers with a Tailored Proposition

    The New Group Will Serve 4 million Customers with a Tailored Proposition Number of Customers Thousands, 2015 (as is) Size Total Corporate1,2 >€5m 23 70% 30% 10 33 Private3,4 >€1m 22 73% 27% 8 30 Retail and Small Business clients Small business2 <€5m 286 70% 30% 125 411 Affluent3 €50k–€1m 478 65% 35%

  16. Slide 16: Become the Italian Mid Caps' Preferred Corporate and Investment Bank

    Become the Italian Mid Caps’ Preferred Corporate and Investment Bank with the Brand Pro-forma segments Key Strategic Guidelines Gross Loans Euro billion  Dedicated division for Mid Caps 2015 43% 57% 44 CAGR 3.8% 2019 43% 57% 51  Excellent credit underwriting process ST MLT Fees  Full leverage on

  17. Slide 17: A Dedicated Top Tier Private Bank with an Established Brand

    A Dedicated Top Tier Private Bank with an Established Brand Pro-forma segments Key Strategic Guidelines Total Client Assets1 Euro billion 2015 39% 38% 8% 15% 28 CAGR 3.2%  Coherent brand strategy, evolving the vision 2019 47% 34% 8% 10% 32 from investment to wealth advisory AuM AuC Bancassurance Li

  18. Slide 18: A Fully Integrated Multichannel Bank Serving Retail and Small Business Clients

    A Fully Integrated Multichannel Bank Serving Retail and Small Business Clients Pro-forma segments Key Strategic Guidelines Gross Loans Euro billion 2015 85% 15% 44 CAGR 3.5% 2019 85% 15% 51  Focus on client development and cross selling MLT ST Total Client Assets1  Differentiate by customer sub se

  19. Slide 19: Full-Scope Product Offering Sustained by Strongly Recognized Brands

    Full-Scope Product Offering Sustained by Strongly Recognized Brands Asset Management Consumer Credit AUM New Loans  Increased commercial focus on core segment Euro billion 53.5 CAGR Euro billion CAGR +7%  Improved productivity 1.7 +5% (Private and Affluent) via commercial best 40.7 1.4 practice sh

  20. Slide 20: Effective Organizational Structure

    Effective Organizational Structure New Group  Macro Building Blocks Executive Management Team Corporate Centre General Risk Finance CEO Manager HR Credit Co-General Co-General Manager Manager Compliance Legal New Strategic Unit Planning Accounting Organisation Audit NPL unit Communication Investor

  21. Slide 21: Enhanced IT Platform Sustained by Investments in Digitalization

    Enhanced IT Platform Sustained by Investments in Digitalization IT Integration ICT Operating Expenses  State-of-the-art IT architecture integrating Euro million existing areas of excellence resulting in higher 143 efficiency 114  Quick migration process (by 2017) enhancing digital platform evoluti

  22. Slide 22: Fully Integrated Multichannel Distribution

    Fully Integrated Multichannel Distribution Key Strategic Guidelines Success Factors  Extend fully digital model Retail Corporate Products Multichannel Usage Multichannel Usage 2015 2019  Evolve and strengthen SME/SB Sicav  Sustained digital offer >80% Bancass. Life  >70% Bancass. non life  digi

  23. Slide 23: Engaged and Customer-Focused Human Resources

    Engaged and Customer-Focused Human Resources Key Strategic Guidelines Resources Allocation1  Introduction of new career development programs and commercial role opportunities “Offerta fuori sede” 2,600  Adoption of performance management and Private coverage incentive schemes linked to customer te

  24. Slide 24: Summary of Key Strategic Guidelines

    Summary of Key Strategic Guidelines  3rd largest banking group in Italy with a leading position in the North A new leading banking group  4 million customers served through an extensive and fully complementary in some of the wealthiest distribution network regions in Europe…  National leading pla

  25. Slide 25: Evolution of the New Group's Capital and Asset Quality

    Evolution of the New Group’s Capital and Asset Quality KPIs Key Strategic Guidelines KPIs Evolution  New dedicated unit to ensure effective 2015 2019 management of NPL Asset  Increase coverage of bad loans together with a Quality rebalanced secured/unsecured mix NPL Ratio  Nominal 24.8% 17.9%  S

  26. Slide 26: Top Management Fully Committed on the New Dedicated NPL Unit

    Top Management Fully Committed on the New Dedicated NPL Unit A new NPL unit focused on bad loans management and workout will increase recovery performance and could create further opportunities for maximizing value. Performance and results will be adequately disclosed over the strategic plan horizon

  27. Slide 27: Nominal NPL Ratio Below 18% and Net NPL Ratio at 11%

    Nominal NPL Ratio Below 18% and Net NPL Ratio at 11% Key Strategic Guidelines and Initiatives KPIs Evolution Cost of Risk1 Bps  Dedicated business unit for the management of 102 Organizational Bad Loans directly reporting to CEO 63 Structure  Loan portfolio diversification and adoption of best pra

  28. Slide 28: Solid Capital Position with CET1 Ratio at 12.9%

    Solid Capital Position with CET1 Ratio at 12.9% Key CET1 Evolution Items KPIs Evolution CET 1 Ratio Fully Phased Current SREP:  Extension of BP AIRB system to the New Group BPM: 9.0% Pillar I Capital BP: 9.55% Requirements  Conservative assumptions on market risk and 12.9% operational risk capital

  29. Slide 29: ALM Strategy Focused on Reducing Cost of Funding

    ALM Strategy Focused on Reducing Cost of Funding Funding Mix Evolution KPIs Evolution Cost of Funding Evolution Euro million 1,089 (312) 822  Funding mix rebalancing and an improved credit standing will lead to a reduction of cost of funding 106 (105) 44 driven by: 2015 Bonds Deposits ECB Other1 20

  30. Slide 30: Prudential Management of the Securities Portfolio

    Prudential Management of the Securities Portfolio Securities Portfolio Evolution Securities Portfolio Euro billion Yield 1.7% 0.9%  Low interest rate scenario will reduce the returns of 36 34 securities portfolio 2% 1% 14% 19% 7%  IFRS3 fair value impact on BPM portfolio would also reduce the iner

  31. Slide 31: Summary of Key Strategic Guidelines

    Summary of Key Strategic Guidelines  3rd largest banking group in Italy with a leading position in the North A new leading banking group  4 million customers served through an extensive and fully complementary in some of the wealthiest distribution network regions in Europe…  National leading pla

  32. Slide 32: Cost Base Optimization with Substantial Savings

    Cost Base Optimization with Substantial Savings Value % Key Actions Euro million  Personnel reduction, through the Personnel 44% activation of redundancy funds for c. 140 1.800 FTEs Other  Rationalization of expenses and Administrative 110 34% increased contractual power Expenses ICT 45 14%  Migr

  33. Slide 33: Revenues Boost from New Banking Model

    Revenues Boost from New Banking Model Value % Key Actions Euro million  Leveraging areas of excellence (e.g. Banca Aletti and Banca Akros) and benefiting from Corporate 76% strengthened banking capabilities 105 underpinned by a solid capital base and competitive position  Align productivity in sel

  34. Slide 34: Synergies Fully Achieved by 2019 with Integration Costs Expensed by 2018

    Synergies Fully Achieved by 2019 with Integration Costs Expensed by 2018 Phasing Effect Full Amount (pre-tax) Cost Synergies 100% 80% 80% 10.1% on combined operating 40% 38% €320m costs 2015 0% 2016 2017 2018 2019 Revenue Synergies 100% 70% 69% 2.7% 40% on combined revenues 39% €138m 2015 0% 201

  35. Slide 35: 3. Financial Projections

    3. Financial Projections NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION MIGHT BE UNLAWFUL

  36. Slide 36: Macroeconomic and Banking Scenario

    Macroeconomic and Banking Scenario Italy GDP and Inflation (y/y, % change) Euribor 3m (%) Annual Mean Inflation 0.0% (0.1%) 1.1% 1.4% 2.0% 0.1% 1.2% 1.1% 0.0% 1.0% 1.0% 0.6% (0.3%) (0.3%) (0.3%) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Gross Loans to Customer (y/y, % change) Direct Funding

  37. Slide 37: Pre-Provision Income Reaching €2.2bn by 2019

    Pre-Provision Income Reaching €2.2bn by 2019 Components of Δ PPI Euro million CAGR +3.1% 2,197 20 182 (243) 1,944 320 57 (62) (159) 138 PPI 2015 Net Interest Fees Net Financial Other Costs Revenue Cost Funding PPI 2019 Income Result Revenues (inertial) synergies synergies synergies 1 & Dividends Not

  38. Slide 38: Key P&L and Balance Sheet Targets

    Key P&L and Balance Sheet Targets CAGR / Delta 2015 2019 2015-2019 Normalised Operating Income1 €5.1bn €5.2bn +0.4% Operating Expenses (€3.2bn) (€3.0bn) (1.3%) Key P&L Items Pre Provision Income €1.9bn €2.2bn +3.1% Normalised Net Income1 €0.6bn €1.1bn +16.1% Gross Performing Loans €95bn €109bn +3.1%

  39. Slide 39: 4. Integration Timeline and Guidelines

    4. Integration Timeline and Guidelines NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION MIGHT BE UNLAWFUL

  40. Slide 40: Timetable Overview

    Timetable Overview  EGM of BP   Merger is Approval of Release of Approval of the approved to effective the Business regulatory transaction by grant the BoD Plan by the approvals from the boards of the delegated Spin-off of boards of BP the relevant BP and BPM powers to carry BPM SpA and BPM & sup

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