Mediobanca - Banca Di Credito Finanziario S.p.a. · MIL:MB
Mediobanca - Banca Di Credito Finanziario — Mediobanca — Q1 FY2023 Earnings Presentation
47 slides from Mediobanca - Banca Di Credito Finanziario's earnings presentation, Oct 27, 2022
Slide 1: Mediobanca 1Q/3M Results as at 30 September 2022
MEDIOBANCA 1Q/3M RESULTS AS AT 30 SEPTEMBER 2022 Milan, 27 October 2022
Slide 2: Agenda
Agenda Section 1. Executive summary Section 2. 1Q Group results Section 3. Divisional results Section 4. Closing remarks Annexes 1. Divisional results by quarter 2. Glossary
Slide 3: Distinctive positioning and business growth opportunities drive solid MB performance
DISTINCTIVE POSITIONING AND BUSINESS GROWTH OPPORTUNITIES DRIVE SOLID MB PERFORMANCE IN TOUGH SCENARIO GROWTH, QUALITY, PROFITABILITY Robust new business and growth in profitable assets (loans up 7% YoY to €52bn, TFA up 8% to € 81bn) 3M revenues to highest-ever levels: ~€760m (up 7% YoY), NII ~€400m
Slide 4: Group KPIs: strong performance
GROUP KPIs: STRONG PERFORMANCE Executive Summary Section 1 Financial results Highlights MEDIOBANCA GROUP – 3M as at Sept22 EPS up 5% to €0.31, benefiting from cancellation of 39 million shares following buyback (now 848 million shares) EPS 3m TBVPS ROTE adj RORWA PER ROTE up 2pp to 12%, vs. avg. 8%
Slide 5: Divisional snapshot: sound performance by all divisions
DIVISIONAL SNAPSHOT: SOUND PERFORMANCE BY ALL DIVISIONS Executive Summary Section 1 WM: ROAC @ 38% Wealth Management – 3M results as at Sept22 • Solid NNM (€1.1bn), consisting entirely of AUM/AUA despite strong market volatility. Best performer in the industry with AUM/AUA inflows Revenues Net profi
Slide 6: Agenda
Agenda Section 1. Executive summary Section 2. 1Q Group results Section 3. Divisional results Section 4. Closing remarks Annexes 1. Divisional results by quarter 2. Glossary
Slide 7: Robust new business and growth in profitable assets
ROBUST NEW BUSINESS AND GROWTH IN PROFITABLE ASSETS… DESPITE MACRO AND MARKETS CONCERNS 1Q - Group results Section 2 CIB: robust new business at increased marginality. CF: high new business despite summer and prudent scoring. Loans book up 8% YoY, 2% QoQ Faster than expected repricing. Loans up 6% W
Slide 8: Drove revenues to highest-ever levels
…DROVE REVENUES TO HIGHEST-EVER LEVELS LEVERAGING BUSINESSES AND SOURCES DIVERSIFICATION 1Q - Group results Section 2 Revenues at best ever levels: ~€760m for 3M WM: growing at double-digit rates, close to €200m Group revenues, €m, 3M WM revenues, €m, 3M +13% YoY +7% YoY Fees +18% YoY +15% YoY 28% 7
Slide 9: NII up 11% YoY
NII UP 11% YoY DUE TO LOAN GROWTH, INTEREST RATES RISE AND RESILIENT FUNDING STOCK 1Q - Group results Section 2 NII momentum improving (€m, 3M) Loans: up 7% YoY and up 1% QoQ (€bn) +11% YoY +6% QoQ 375 373 373 396 358 52.4 Sept22 15.8 13.9 20.9 62 67 60 65 66 73 72 76 84 74 51.7 June22 15.3 13.8 20.
Slide 10: Fees: another quarter > than €200m
FEES: ANOTHER QUARTER > THAN €200M DIVERSIFICATION AND STRONG CUSTOMER RELATIONS 1Q - Group results Section 2 Fee income trend by division (€m, 3M) CIB fees (€m, 3M) 93 76 7 68 69 +4% YoY +2% QoQ 69 11 7 7 15 7 7 Specialty fin 17 14 19 13 25 Lending 241 20 14 CapMkt 59 203 205 210 39 33 38 Advisory
Slide 11: Industrial cost of risk flat @48bps
INDUSTRIAL COST OF RISK FLAT @48bps NO OVERLAYS RELEASED 1Q - Group results Section 2 CoR trend (bps) 12M COR 12M COR Overlay stock trend (€m) Group 52bps Group 48bps Consumer 198bps Consumer 142bps 248 CIB (21)bps CIB (34)bps ~300 ~300 ~300 196 174 183 160 141 138 146 CB ~90 ~60 60 133 61 53 56 60
Slide 12: Prudent staging
PRUDENT STAGING NPLs DOWN AND COVERAGE RATIOS UP 1Q - Group results Section 2 Gross NPLs – Stage 31 Net NPLs – Stage 31 ➢ Stage 3 – Gross NPLs flat vs June 22 level, (Net exposure/Loans) at 2.5% of gross loans. Net NPLs down 5% 72.4% QoQ and 29% YoY in absolute terms with 71.0% 8.0% 64.9% coverage u
Slide 13: Positive asset quality trend in all divisions
POSITIVE ASSET QUALITY TREND IN ALL DIVISIONS 1Q - Group results Section 2 Net NPLs (€m) of which bad loans (€m) NPL coverage NPLs as % of loans (“deteriorate”) (“sofferenze”) 72% 3.1% 2.5% 2.5% 71% -5% 67% Gross Mediobanca -5% 1.1% 0.7% 0.7% 516 384 367 Group 67 53 51 Net Sept21 June22 Sept22 Sept2
Slide 14: Capital ratios high
CAPITAL RATIOS HIGH CET1 PHASE-IN @15.1% - FULLY LOADED @ 14.0% 1Q - Group results Section 2 CET1¹ ratio 1Q trend 15.7% (35bps) +50bps (15bps) (15bps) 15.1% (45) 14.5% FL 14.0% FL June22 Generated 70% cash INS RWA organic Regulation & Sept22 earnings payout growth Other CET1 ratio1 @15.1%, down 60bp
Slide 15: 1Q results summary
1Q22 RESULTS SUMMARY 1Q - Group results Section 2 Financial results Highlights D D Growth in revenues (up 7% YoY, up 8% QoQ) driven by all €m 1Q23 4Q22 1Q22 YoY1 QoQ1 sources Total income 757 704 706 +7% +8% Material growth in NII (up 11% YoY, up 6% QoQ) due to higher Net interest income 396 373 358
Slide 16: ESG pathway
ESG PATHWAY 1Q - Group results Section 2 ENVIRONMENT First TCFD Report First TCFD Report most relevant contents: New metrics in the Group's Risk Appetite Framework (RAF), focusing on environmental and climate-related risks (both transition and physical risks). Very limited exposure to transition ris
Slide 17: Agenda
Agenda Section 1. Executive summary Section 2. 1Q Group results Section 3. Divisional results Section 4. Closing remarks Annexes 1. Divisional results by quarter 2. Glossary
Slide 18: WM: satisfactory results in tough environment
WM: SATISFACTORY RESULTS IN TOUGH ENVIRONMENT 1Q - Divisional results - WM Section 3 Financial results Highlights €m 1Q23 4Q21 1Q21 D D Tough scenario ongoing: industry NNM down 30% YoY2 Sept22 June22 Sept21 YoY1 QoQ1 and negative market performance. Total income 199 183 172 +15% +8% Net interest in
Slide 19: In a reshaped market environment
IN A RESHAPED MARKET ENVIRONMENT… 1Q - Divisional results - WM Section 3 Assoreti NNM (AUM&AUA) by quarter (€bn) NNM 9.2bn 12.2bn 8.4bn 11.5bn 7.1bn % stock +1.5% +1.9% +1.3% +1.8% +1.2% Market - +2.0% -4.8% -7.4% NA performance 12.4 9.5 7.6 5.8 3.9 3.8 3.4 2.6 1Q22 2Q22 3Q22 4Q22 1Q23* Russia/Ukrai
Slide 20: MB outperformed the market
…MB OUTPERFORMED THE MARKET DUE TO NNM RISING CAPABILITIES - LIMITED MARKET IMPACT ON TFAS 1Q - Divisional results - WM Section 3 Group TFAs trend (€bn) MBWM: NNM of AUM/AUA by quarter (€bn, % stock) 1.1% 3.7% 3.2% 2.9% 2.5% 1.8 80.9 1.7 1.5 80.2 1.3 1.1 (0.5) 0.5 NNM breakdown 1Q22 2Q22 3Q22 4Q22 1
Slide 21: With AUM/AUA inflows at €1.3bn
WITH AUM/AUA INFLOWS AT €1.3BN 1Q - Divisional results - WM Section 3 Private Banking Premier €0.7bn NNM in AUM/AUA €0.7bn NNM in AUM/AUA AUM/AUA up 6% YoY and 2% QoQ to €23.4bn AUM/AUA stock up 3% YoY and 2% QoQ to €16.7bn Key initiatives/trends in 3M: completion of Milan RE trophy assets Key initi
Slide 22: Consumer Finance
CONSUMER FINANCE STRONG NEW BUSINESS AND ASSET QUALITY ABSOLUT CONTROL 1Q - Divisional results - CF Section 3 Financial results Highlights 1Q23 4Q22 1Q22 D D Solid quarterly results with net profit @100m and ROAC @34% €m Sept22 June22 Sept21 YoY1 QoQ1 Distribution enhancement ongoing Total income 27
Slide 23: Compass leverages innovation to boost new business
COMPASS LEVERAGES INNOVATION TO BOOST NEW BUSINESS, DIRECT DISTRIBUTION AND INTERNATIONALIZATION 1Q - Divisional results - CF Section 3 TWO DEALS IN FINTECH SPACE TO BOOST BNPL BNPL volume to double as penetration progresses: BNPL for Compass: worth in 5 years as Market potential Europe: from 7% in
Slide 24: BNPL growing steadily while opportunities materialize
BNPL GROWING STEADILY WHILE OPPORTUNITIES MATERIALIZE COMBINING COMPASS’ RISK MANAGEMENT STRENGTHS WITH FINTECH BOOST 1Q - Divisional results - CF Section 3 Pagolight progressive growth will benefit from … … the new partnership with HeidiPay e Soisy (SP loans new business and Pagolight increasing we
Slide 25: Strong asset quality preserved
STRONG ASSET QUALITY PRESERVED 1Q - Divisional results - CF Section 3 Ongoing healthy trend in early risk indicators … … keeping CoR at a very low level … Early deterioration index (3 months average) LLPs (€m) and cost of risk (bps) 361 380 80.0 150 330 70.0 248 60.0 223 280 185 196 50.0 197 174 183
Slide 26: CIB: product diversification and strong positioning
CIB: PRODUCT DIVERSIFICATION AND STRONG POSITIONING FOR A GOOD QUARTER DESPITE MARKET TURBOLENCE 1Q - Divisional results - CIB Section 3 Financial results2 Highlights 1Q23 4Q22 1Q22 D D Strong start to FY23 in CIB, with revenues staying high at €m €182m (up 28% QoQ and 8% YoY), despite macro Sept22
Slide 27: Leading position in M&A confirmed
LEADING POSITION IN M&A CONFIRMED... 1Q - Divisional results - CIB Section 3 Selected M&A Large Corp Transactions Pending Pending September 2022 August 2022 July 2022 Resilient M&A deal flow in 1Q 2022/23 despite persistent adverse macro conditions ~€50bn EV AMMOTEC ~CHF 6bn €1.3bn total considerati
Slide 28: As well as in capital markets and lending
…AS WELL AS IN CAPITAL MARKETS AND LENDING 1Q - Divisional results - CIB Section 3 Current macro-economic environment, characterized by Selected ECM Transactions inflationary pressure, conservative monetary policies and geopolitical tensions, significantly impacted European market in September 2022
Slide 29: Insurance & PI: positive contribution
INSURANCE & PI: POSITIVE CONTRIBUTION 1Q - Divisional results – Insurance & PI Section 3 Financial results Highlights €m 1Q23 4Q22 1Q22 D D 1Q23 net profit at €78m, down 20% YoY due to: Sept22 June22 Sept21 YoY1 QoQ1 10% lower AG contribution, due to some impairments Total income 87 101 98 -11% -14%
Slide 30: Holding Functions – improved results
HOLDING FUNCTIONS – IMPROVED RESULTS 1Q - Divisional results – HF Section 3 Financial results4 Highlights 1Q23 4Q22 1Q22 D D €m 1Q22 loss €25m, 5% lower YoY, with PBT improving by 14% Sept22 June22 Sept21 YoY1 QoQ1 YoY, on higher contribution from Treasury and lower LLPs Total income 19 14 17 +12% +
Slide 31: Active management of funding cost
ACTIVE MANAGEMENT OF FUNDING COST 1Q - Divisional results – HF Section 3 Bond stock stable at ~€19bn, new issuance at Deposit stable in stock and cost competitive cost €bn, cost in bps vs Eur3M €bn 135bps 115bps 28.8 28.6 26.1 ~2bn 9 11.3 11.6 3.2 1.2 17.2 17.4 17.0 0.75 Bond expiring 12M FY23 Bond
Slide 32: Agenda
Agenda Section 1. Executive summary Section 2. 1Q Group results Section 3. Divisional results Section 4. Closing remarks Annexes 1. Divisional results by quarter 2. Glossary
Slide 33: Macro scenario trends
MACRO SCENARIO TRENDS Closing remarks Section 4 Key macro variable trends ECB Deposit Facility expected rate (%) 2.5 OLD - June 22 NEW - October 22 1.75 2021 2022 2023 2024 2022 2023 2024 2.0 IT GDP (y/y) 6.6% 2.7% 2.1% 1.1% 3.3% (0.1%) 1.2% 2.00 1.5 EA GDP (y/y) 5.3% 2.7% 2.6% 1.9% 3.0% 0.1% 2.0% 1
Slide 34: Market concerns
MARKET CONCERNS Closing remarks Section 4 Mediobanca: low interest rate sensitivity compared to CF: lower customers’ purchasing power and higher interest commercial banks with higher deposits rates could revert to lower NII and higher COR Intrinsic low interest rate sensitivity due to Compass histor
Slide 35: MB investment opportunities
MB INVESTMENT OPPORTUNITIES Closing remarks Section 4 What’s most important going forward given the challenging macro ✓ Foster GOP risk adj growth ✓ Superior asset quality and risk management capabilities ✓ Strong capital position ✓ Capability to offer sound shareholders remuneration For the next qu
Slide 36: Mediobanca 1Q/3M Results as at September 2022
MEDIOBANCA 1Q/3M RESULTS AS AT 30 SEPTEMBER 2022 Milan, 27 October 2022
Slide 37: Agenda
Agenda Section 1. Executive summary Section 2. 1Q Group results Section 3. Divisional results Section 5. Closing remarks Annexes 1. Divisional results by quarter 2. Glossary
Slide 38: Mediobanca Group P&L
MEDIOBANCA GROUP P&L 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 757 704 688 753 706 +8% +7% Net interest income 396 373 373 375 358 +6% +11% Fee income 210 205 202 241 203 +2% +4% Net treasury income 65 29 35 47 50 n.
Slide 39: Mediobanca Group A&L
MEDIOBANCA GROUP A&L 3M results as at September 2021 Annex D D €bn Sept22 June22 Sept21 QoQ1 YoY1 Funding 60.3 61.2 57.8 -1% +4% Bonds 18.6 18.5 18.8 +1% -1% Direct deposits (retail&PB) 28.7 28.8 26.1 -0% +10% ECB 8.4 8.4 8.5 +0% -0% Others 4.5 5.4 4.4 -17% +1% Loans to customers 52.4 51.7 48.9 +1%
Slide 40: Wealth Management results
WEALTH MANAGEMENT RESULTS 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 199 183 179 192 172 +8% +15% Net interest income 84 76 72 73 74 +11% +14% Fee income 112 105 104 117 96 +7% +17% Net treasury income 2 3 3 1 3 -20%
Slide 41: Consumer Banking results
CONSUMER BANKING RESULTS 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 276 269 265 268 257 +3% +7% Net interest income 243 236 237 236 226 +3% +8% Fee income 33 33 28 32 31 -2% +6% Total costs (78) (87) (79) (77) (72) -1
Slide 42: Corporate & Investment Banking results
CORPORATE & INVESTMENT BANKING RESULTS 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 182 142 139 189 168 +28% +8% Net interest income 67 62 66 65 60 +8% +11% Fee income 69 68 69 93 76 +1% -10% Net treasury income 47 12 5
Slide 43: Principal Investing results
PRINCIPAL INVESTING RESULTS 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 87 101 77 96 98 -14% n.m. Impairments (11) (27) (6) (3) 3 Net profit 78 69 66 88 97 +12% -20% Book value (€bn) 3.3 3.9 4.6 4.6 4.5 -16% -28% Ass.
Slide 44: Holding Functions results
HOLDING FUNCTIONS RESULTS 3M results as at September 2021 Annex 1Q23 4Q22 3Q22 2Q22 1Q22 D D €m Sept22 June22 Mar22 Dec21 Sept21 QoQ1 YoY1 Total income 19 14 33 14 17 +34% +12% Net interest income (3) (5) (7) (4) (6) -33% -41% Net treasury income 12 7 25 6 10 n.m. +22% Fee income 11 12 15 13 13 -15%
Slide 45: Glossary
GLOSSARY MEDIOBANCA BUSINESS SEGMENT PROFIT & LOSS (P&L) and BALANCE SHEET CIB Corporate and investment banking DPS Dividend per share WB Wholesale banking EPS Earning per share EPS adj. Earning per share adjusted1 SF Specialty finance ESG Environmental, Social, Governance CB Consumer banking FAs Fi
Slide 46: Disclaimer & declaration of head of financial reporting
DISCLAIMER & DECLARATION OF HEAD OF FINANCIAL REPORTING Disclaimer This document includes certain projections, estimates, forecasts and consequent targets which reflect the current views of Mediobanca – Banca di Credito Finanziario S.p.A. (the “Company”) with regard to future events (“forward-lookin
Slide 47: Investor contacts
INVESTOR CONTACTS Mediobanca Group Investor Relations Piazzetta Cuccia 1, 20121 Milan, Italy Jessica Spina Tel. no. (0039) 02-8829.860 Luisa Demaria Tel. no. (0039) 02-8829.647 Matteo Carotta Tel. no. (0039) 02-8829.290 Marcella Malpangotto Tel. no. (0039) 02-8829.428 Email: investor.relations@medio