BIPIEMME GROUP Q financial results

Transcription

1 BIPIEMME GROUP Q financial results 10 May

2 Disclaimer This document has been prepared by Banca Popolare di Milano S.c.a r.l. (the Company and. together with its subsidiaries. the Group ) solely for information purposes and for use in presentations of the Group Q results. This document and the information contained therein does not constitute an offer of securities for sale or an invitation to purchase or subscribe for any securities in the United States. Australia. Canada or Japan or any other jurisdiction where such an offer or solicitation would require the approval of local authorities or otherwise be unlawful (the Other Countries ). This document may contain forward-looking statements. which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions. expectations. projections and provisional data concerning future events and are subject to a number of uncertainties and other factors. many of which are outside the control of BPM. There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus. such forward-looking statements are not a reliable indicator of future performance. BPM undertakes no obligation to publicly update or revise any forward-looking statements. whether as a result of new information. future events or otherwise except as may be required by applicable law. None of the Company. its subsidiaries or any of their respective members. directors. officers or employees nor any other person accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or otherwise arising in connection therewith. By attending the Q financial results presentation or otherwise accessing this document you will be taken to have represented warranted and undertaken that: (i) you have read and agree to be bound by and comply with the contents of this notice. *** Mr Angelo Zanzi. as the manager responsible for preparing the bank s account. hereby states. pursuant to Article 154 bis. paragraph 2 of the Testo Unico della Finanza (the Finance Act) that the accounting information contained in this presentation corresponds to the documentary evidence. corporate books and accounting records. In case of doubt the Italian version will prevail 2

3 Index Highlights Q financial results Annexes 3

4 Q1 2016: P&L and balance sheet results confirm the positive trend in the last two years 1 SOUND P&L RESULTS IN SPITE OF DIFFICULT ECONOMIC ENVIRONEMENT NET PROFIT: 48.3M 2 EXCELLENT NPE COVERAGE BAD LOANS COVERAGE: 54.3% AND 60.4% WITH CANCELLATIONS 3 NET NPEs DOWN Y/Y and Q/Q NET NPEs:-2.2%Y/Y; -0.2% Q/Q 4 LARGE BASE OF ELIGIBLE SECURITIES ELIGIBLE SECURITIES 1 : 5.6BN (+ 600m Y/Y) 5 SOUND CAPITAL RATIOS CET1 FL: 12.32% (WITHOUT AIRB) 1: data as at 2/05/2016 Internal Liquidity Report. 4

5 Q1 2016: MAIN P&L TRENDS +3.9% m 1 CORE REVENUES 1 INCREASING % % Q1 '15 Q1 '16 NII Fees&Commission 2 ADMIN. EXPENSES DECREASING (NET OF CONTRIBUTION TO SRF 2 ) % 64.5 m Q1 '15 Q1 '16 Admin SRF 91-14bps bps 3 REDUCTION IN COST OF RISK 77 Q1 '15 Q1 '16 Cost of Risk (bps) 1: Net Interest Income + Net Fees and Commission. 2: Single Resolution Fund 5

6 Q1 2016: MAIN BALANCE SHEET TRENDS 1 SIGHT DEPOSITS GROWING 19, % m 22,545 Q1 '15 Q1 '16 Sight Deposits 2 EXCELLENT GROWTH IN LOANS TO CUSTOMERS 32, % m 34,182 Q1 '15 Q1 '16 Customer Loans 3 NEW LOANS TO HOUSEHOLDS 1 UP STRONGLY +48.5% m % % Q1 '15 Q1 '16 Mortgages Personal Loans 1. Internal management data 6

7 Q1 2016: Gross Non-performing Exposure trend GROSS NPEs: Y/Y change GROSS FLOWS (INFLOWS) FROM PERFORMING TO NPEs ( m) 34.6% 25.6% Change Y/Y 1,960 1,860 1,710 1, % 10.9% 2.5% 7.3% 0.7% Dec '12 Dec '13 Dec '14 Dec '15 Mar '15 Mar ' Q1 '15 Q1 '16 Good decrease in the year-on-year growth pace of gross NPE from 2012 to 2015, Gross NPEs: +0.7% Y/Y in Q1 16 Gross flows from performing loans to NPEs: -37.4% Y/Y 7

8 Focus on Bad Loans: a new business approach Business Plan targets Actions implemented 1 Strenghtening of organisation and tools Reorganisation of units by homogeneus portfolio Strenghtened NPL management team and re-distribution of the workloads Introduction of KPI with budget/incentive mechanisms New IT tools to support NPL management Introduction of Periodic Management Reports 2 Recovery and value creation strategies Moving from a legal to a pure asset management approach Use of external providers for NPL management and creation of a dedicated and specialised internal team More efficiency in the management of all categories of NPEs Targeted NPL disposals with NPV maximisation 2015 GROSS RECOVERIES OF NPL : 121m (+25% VS 2014) 2015 AVERAGE RECOVERY RATE: 3.8% (VS 3.4% IN 2014) 8

9 Index Highlights Q financial results Annexes 9

10 Q results: Direct Customer Funding ( bn) Mar '15 Dec '15 Mar '16 Q/Q Y/Y Direct Funding -0.8% +2.4% Repos +8.2% +15.8% Securities and FL at FV -18.1% -27.8% Time deposits +4.8% -7.5% Sight deposits +2.5% +14.0% Sight deposits Time deposits Securities & FL at FV Repos Direct Funding up 2.4% Y/Y thanks to the positive trend in sight deposits (+14.0% Y/Y) Outstanding securities and financial liabilities at FV down 27.4% Y/Y due to matured wholesale and retail securities : Retail: trend reflects customers investment shift towards AUM and insurance products Wholesale funding: the decrease is due to 1bn EMTN that matured in January 2016 In Q1 16, the positive trend in sight deposits continued (+2.5% Q/Q). The slight decrease in direct funding is due to the mentioned 1bn EMTN that matured in January Details in the next slide. 10

11 ( bn) Q results: Direct Customer Funding - Breakdown (A) Mar 16 (B) Dec 15 (C) Mar '15 m A-B m A-C DIRECT FUNDING FROM RETAIL CUSTOMERS Sight deposits Time deposits² Securities in issue: o/w subordinated Financial Liabilities at fair value DIRECT FUNDING FROM INSTITUTIONAL CUSTOMERS Covered Bond and securitisations EMTN and other subordinated Repos with CCG³ and against own securities TOTAL DIRECT FUNDING ( m) Retail bonds by maturity Wholesale funding by maturity ( m) 1, ~1, Cov. Bond Senior EMTN Altro Oth. Istit. Wholes Current accounts and demand savings deposits 2. Restricted deposits and other forms of time deposits 3. Cassa di Compensazione e Garanzia 2. 4.First call date for Tier1 instrument 11

12 Q results: Indirect customer funding ( bn) Y/Y -5.3% ASSETS UNDER MANAGEMENT (63% of indirect funding) AUM up 6.2% Y/Y and stable Q/Q, mainly driven % by the good trend in fund and insurance products. Net inflows continued to be positive in the quarter (about 300m) Mar '15 Dec '15 Mar ' % ASSETS UNDER CUSTODY (37% of indirect funding) AuC down 20.3% Y/Y and 7.6% Q/Q owing to the switch to AUM products and the financial market trend AuM AuC AUC BY ASSET CLASS FUNDS BY ASSET CLASS¹ Equity 26% 43% 31% Equity: Govies: Bonds and Other: Equity +4pp Y/Y stable Y/Y -4pp Y/Y Government Bonds Bonds and other 10% 29% 35% 26% 1% Equity: - 3pp Y/Y Balanced: +20 pp Y/Y Liquidity: stable Y/Y Flexible: Bonds: Balanced Liquidity Flexible Bond -6 pp Y/Y -11 pp Y/Y 1. Data as at January

13 Q results: liquidity position Use of eligible securities 1 Breakdown of eligible securities 2 ( bn) % 10% Govies 4% Covered Bonds ABS Mar '15 Dec '15 May '16 ECB Repo&Other Eligible fin. securities (unencumbered) 3 70% ABACO Net liquidity balance 3 : spot 11.1% of total assets and about 4.6bn at 3 months ECB exposure: 4.7bn The group s liquidity profile continued to be sound thanks to 5.6bn unencumbered eligible securities in addition to a wide buffer of other eligible assets (residential mortgages, SMEs and retail loans) 1. Includes eligible securities received as collateral 2. Dirty price net of ECB haircut 3. Figures as at 2 May 2016 from Internal Liquidity Report 13

14 Q results: Financial Assets m Mar 16 Dec 15 Mar 15 Ch. Y/Y BPM & other commercial banks Banca Akros 10, ,034 1,132 9,850 1, (258) TOTAL NET FINANCIAL ASSETS 10,992 10,166 10, m Mar 16 Dec 15 Mar 15 Ch. Y/Y Breakdown of net financial assets 10,992 10,166 10, o/w Governement (o/w 98% Italian) 9,985 8,938 9, Financials and other (297) Equity stakes (201) Mutual funds and private equity (15) Net hedging and trading derivatives (17) As at March 2016 the AFS reserve of the Italian government bond portfolio (before taxes) was positive for about 309m The government bond portfolio has a duration of about 3.5 years 14

15 Q results: loans to customers ( bn) Q/Q Y/Y Loans to customers flat +4.9% Mar '15 Dec '15 Mar '16 Repos -8.7% n.s. Others -1.2% +3.3% Mortgages +1.4% +5.8% Mortgages Other Repos Loans to customers increased 4.9% Y/Y and were substantially flat Q/Q. The Y/Y result is excellent considering that loans to corporates and households in the system were unchanged Y/Y¹ Almost all commercial sectors experienced credit growth, in particular manufacturing (+14.0% Y/Y²) and wholesale commerce (+5.6% Y/Y²). Real Estate and Construction continued to decrease (-1.2%Y/Y²) New mortgages and instalment loans² totalled 1.15bn in Q1 16 (+30% Y/Y). In detail: households: +48.5% Y/Y corporates: +18.7% Y/Y The loans market share increased sharply:1.97% as at Feb 16 vs 1.84% as at Feb ABI Monthly Oulook 2. Internal Management Data 15

16 Q results: total net non-performing exposures ( m) Q/Q Y/Y 3,699 3,678 3,715 3,624 3, % -10.8% -2.2% -31.1% 2,221 2,131 2,051 2,043 1, % -10.3% 1,361 1,456 1,512 1,491 1, % +13.5% Mar '15 Jun '15 Set '15 Dec'15 Mar '16 Bad Loans Unlikely to pay Past due Net NPEs down 2.2% vs Mar 15, and -0.2% Q/Q, a positive result given the sharp reduction in the cost of credit in Q1 16. On a quarterly basis, net Bad Loans were up by 3.6% Q/Q but were more than offset by the decrease of the other categories: Unlikely to pay: -2.5% Q/Q Past due: -10.8% Q/Q 16

17 Q results: non-performing exposure coverage coverage % Mar 15 Jun 15 Sept 15 Dec 15 Mar 16 Mar 16 Coverage % with cancellations Tot. NPEs Bad Loans Unlikely to pay Past-due Performing Tot. Loans Excellent increase in non-performing exposure coverage, now at 40.1% (+180 bps vs Mar 15, +50bps Q/Q) and 44.9% with cancellations Bad loans coverage was still high at 54.3% (60.4% with cancellations). The slight decrease Q/Q was due to new inflows of loans backed by real guarantees Performing loans coverage was 0.56% (vs 0.60% as at Dec 15) due to the improved quality of the loans portfolio 17

18 Q results: Net interest income YEARLY COMPARISON ( M) QUARTERLY COMPARISON ( M) % +3.3% Q1 '15 Q1 '16 Q4 '15 Q1 '16 Net interest income up 5.3% Y/Y thanks to the positive trend in average loan volumes (commercial net interest income +2.9% Y/Y) and the decrease in wholesale funding cost (- 7.2m) which more than offset the decrease in the government bond portfolio contribution (- 1.4m) Net interest income up 3.3% Q/Q mainly due to lower wholesale funding costs, which offset the decrease in asset spread mainly owing to the drop in the Euribor. The contribution from the bond portfolio was stable Q/Q. 18

19 Q results: BPM Group customer spread quarterly trend¹ Average change¹ Y/Y Q/Q Lending rates -41bps -7bps Deposits rates -32bps -3bps Spread -9bps -4bps Euribor 3M -23bps -9bps Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 deposit rates lending rates Customer spread decreased slightly Y/Y (-9bps) owing to the effect of the lower cost of funding (-32bps), which does not totally offset the decrease in lending rates (-41bps). The Q/Q decrease (-4bps) was caused by the reduction in lending rates (-7bps) while deposit rates decreased by 3bps 1. Average quarterly data 19

20 Q results: Net fees and commission YEARLY COMPARISON ( M) QUARTERLY COMPARISON ( M) % +2.0% Q1 '15 Q1 '16 Management, trading & adv. Others 1 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Management, trading & adv. Others 1 Net fees and commission were up 2.0% Y/Y thanks to traditional banking fees which than offset the slight decrease in management fees: AUM fees² : 56m (-2.1% Y/Y) owing to lower upfront fees on AUM and insurance products (- 7.2m Y/Y) whereas AUM management fees were up (+ 6m Y/Y) due to the increase of the stock. the increase in customer loans drove fees and commission higher in the credit segment (+18.7% Y/Y²) 1. See details in annexes 2. Internal management data 20

21 Q results: Net income from financial activities YEARLY COMPARISON ( M) % QUARTERLY COMPARISON ( M) Q1 '15 Q1 ' Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Net result from financial act. (recurr.) One-off Net result from financial activities in Q1 16 was down Y/Y(- 45m), mainly due to: the volatility in financial markets, which affected the net result from financial assets held-for-trading (- 1.1m vs m in Q1 15) lower gains on AFS securities (- 7.9m) also due to forward sales whose effects will be seen over the coming quarters. Banca Akros contribution in the quarter was 7m (vs 15m in Q1 15) 21

22 Q results: operating costs YEARLY COMPARISON ( M) QUARTERLY COMPARISON ( M) % % Net of SRF % Includes 39.7m one-off to SRF % Q1 '15 Q1 '16 Staff Administrative SRF Depreciations Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Staff Administrative SRF Depreciations Operating costs, net of the contribution to the SRF, were up 0.6% Y/Y and show a good trend in the core components: staff costs substantially stable Y/Y (+0.2% Y/Y) administrative expenses down 1.2% Y/Y, net of the contribution to the SRF ( 8m in Q1 15 vs 14.4m in Q1 16) D&A increased due to the investments in 2015 As at Mar 16 the group had 7,723 employees (-32 Y/Y) 22

23 Q results: Net adjustments on loans¹ YEARLY COMPARISON ( M) QUARTERLY COMPARISON ( M) 91bps 77bps 91bps 112bps 93bps 112bps 77bps Q1 '15 Q1 '16 Net adjustments on loans and other op. Annualised cost of risk Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Net adjustments on loans and other op. Annualised cost of risk Cost of risk in Q1 16 was 77bps, down vs both Q1 15 (91bps) and the average cost of risk in FY 2015 (100bp), even though the NPE coverage levels increased 1. Net adjustments on loans, other operations and losses from disposal of loans 23

24 Q1 2016: a sound capital base COMMON EQUITY TIER1 VS SREP (%) COMMON EQUITY TIER 1 RATIO EVOLUTION (%) WITHOUT AIRB Buffer SREP CET1 Phase In CET1 Fully Loaded Mar '15 Dec '15 Mar '16 CET1 Phase in CET1 Fully Loaded (without AIRB) Capital ratios have been calculated using the standard method (without benefiting from the AIRB models) and do not include the quarterly net profit RWA: 34,590m Credit risk: 31,180m Market risk: 752m Operating risk: 2,658m 24

25 Consolidated reclassified P&L ( m) 1Q Q 2015 Change Amount % Net interest income Non-interest income Net fees and commission income Other operating income Share of profit (loss) on invest. value under the equity method Net income (loss) from financial activities Other operating income/expenses Operating income Administrative expenses a) personel expenses b) other administrative expenses Depreciations and amortization Operating costs Operating profit Net adjustments to loans and other operations Net provisions for risk and charges n.s. Profit (loss) from equity and other investments and adjustments to goodwill and intangible assets n.s. Profit (loss) before tax from continuing operations Tax on income from continuing operations Net profit (loss) for the period Minority interests Net profit

26 Q&A 26

27 Index Highlights Q financial results Annexes 27

28 Asset quality ( 000) Gross exposure Change (A - B) Change (A - C) A % B % C % Amount % Amount % o/w Non performing exposure 6,043, ,997, ,998, , , a) Bad loans 3,380, ,276, ,077, , , b) Unlikely to pay 2,574, ,621, ,793, , , c) Past due 88, , , , , o/w Performing loans 30,735, ,747, ,102, , ,633, Total gross loans and advance to customers 36,778, ,745, ,101, , ,677, Total adjustments A Change (A - B) Change (A - C) Coverage % B Coverag e % C Coverage % Amount % Amount % o/w Non performing exposure 2,426, ,372, ,299, , , a) Bad loans 1,835, ,785, ,716, , , b) Unlikely to pay 582, , , , , c) Past due 7, , , , , o/w Performing loans 170, , , , , Total adjustments 2,597, ,558, ,500, , , Net loans and advance to customers Change (A - B) Change (A - C) A % B % C % Amount % Amount % o/w Non performing exposure 3,616, ,624, ,698, , , a) Bad loans 1,544, ,490, ,361, , , b) Unlikely to pay 1,991, ,043, ,220, , , c) Past due 80, , , , , o/w Performing loans 30,564, ,562, ,901, , ,663, Total net loans and advance to customers 34,181, ,186, ,600, , ,581,

29 Reclassified balance sheet Assets ( m) mar-16 dic-15 mar-15 Amount Y/Y % Y/Y Change Amount vs dic.'15 % Cash and equivalents % % Financial assets at fair value and hedging derivates: 12,479 11,417 12, % 1, % Financial assets held for trading 1,877 1,798 2, % % Financial assets designated at fair value % % Financial assets available for sale 10,469 9,491 10, % % Hedging derivates % % Change in fair value of hedged items (+/-) % % Loans and advanced to banks 1,832 1,225 1, % % Loans and advance to customers 34,182 34,187 32,600 1, % % Fixed assets 1,216 1,199 1, % % Other assets 1,584 1,875 1, % % Total assets 51,541 50,203 49,310 2, % 1, % Change Liabilities and Shareholders Equity mar-16 dic-15 mar-15 Amount % Amount Y/Y Y/Y vs dic.'15 % Due to banks 6,099 4,839 4,172 1, % 1, % Due to customers 37,309 37,602 36, % % Debt securities in issue 30,896 28,623 27,590 3, % 2, % Financial liabilities at fair value and hedging 6,280 8,849 8,677-2, % -2,569 derivates -29.0% Financial liabilities held for trading % 3 2.2% Financial liabilities designated at fair value % % Financial liabilities available for sale 1,376 1,184 1, % % Hedging derivates % % Other liabilities 1,539 1,430 1, % % Provision for specific use % % Share capital and reserves 4,626 4,338 4, % % Minority interest % 0 0.0% Net profit (loss) for the period (+/-) % -241 n.s. Total liabilities and Shareholders Equity 51,541 50,203 49,310 2, % 1, % 29

30 Net fees and commission 1 Q Q 2015 Change Amount in % Fees and commission income 167, ,704 2, Fees and commission expense (16,508) (17,412) Total net fees and commission 151, ,292 3, Breakdown: guarantees giv en and receiv ed 8,453 7,164 1, credit deriv ativ es n.a. management, trading and adv isory serv ices 74,007 77,599 (3,592) -4.6 collection and payment serv ices 17,147 15,023 2, securitization transaction serv ices n.a. management of current accounts 13,931 14,498 (567) -3.9 other serv ices 37,757 34,008 3, Total net fees and commission 151, ,292 3,