Volksbank - Banca Popolare dell Alto Adige

Transcription

1 February 2018 Volksbank - Banca Popolare dell Alto Adige

2 Agenda 1 Volksbank at a glance 5 Funding & Liquidity Results Update 6 Business Plan 3 Capital Position 7 Concluding Remarks 4 Asset Quality 2

3 1 Volksbank at a glance Volksbank is a retail bank firmly established in South Tyrol, one of the wealthiest provinces in Italy

4 Province of South Tyrol Republic of Italy South Tyrol GDP pro capita (2014) EUR 26,548 EUR 39,894 Unemployment rate (Q3 2017) 11.2% 3.3% Republic of Italy South Tyrol Long-Term Rating BBB A- Outlook Stable Stable Long-Term Rating Republic of Italy Baa2 South Tyrol A3 Outlook negative Negative 4

5 As of 31/12/2017 History & distribution network 60 branches Bolzano Province History: 1992 merger of Volksbank Bozen (founded in 1902) and Volksbank Brixen (founded in 1889), the merged bank is named «Volksbank» 1995 acquisition of Volksbank Meran (founded in 1886) 2015 merger with the Banca Popolare di Marostica Group 18 branches Trento Province 32 branches Vicenza Province 6 branches Padua Province Bolzano Marostica 20 branches Belluno Province branches Pordenone Province 15 branches Venice Province 22 branches Treviso Province 5 Commercial region Alto Adige Commercial region Veneto Total number of branches

6 A snapshot on Volksbank s recent years 12/ / / / /2017 Strategy 11/2016: Approval of new Business Plan "Strategy " 06/2017: Fourth pillar in Omnichannel strategy (Contact Center) 09/2017: Stock listing on Hi-MTF Capital increase & statutory changes 01/2016: Capital increase of EUR 95.8m 12/2016: Transformation into a S.p.A., following the Popolari reform 08/2017: Issuance of first private placement of EUR 5m Tier2 09/2017: Issuance of EUR 100m Tier2 notes Funding 10/2016: VOBA 6 SME securitisation Asset Quality 1H 2016: Ordinary Inspection by Banca d'italia on credit portfolio 06/2017: Gross NPL 14.9% 12/2017: Gross NPL 12.9% 6

7 Ownership, member structure & governance Volksbank transformed in a joint-stock company in 2016 following the italian popolari reform. The Volksbank Stock is quoted at Hi-MTF (order driven azionario) since September 2017 with moderate liquidity Evolution of shareholders

8 Core business overview: we promote regional development As a retail bank based in South Tyrol, Trentino and Veneto, Volksbank looks after more than 268,000 customers in the following lines of business: Business Line Retail Corporate Private Mission From geographical to personal proximity, Omnichannel Sector specialisation (e.g. tourism, food/agriculture, mechanical engineering/metalworking industry, real estate) Repositioning for growth in Veneto region 8

9 Results Update Positive net result of EUR 24.3m thanks to solid commercial performance

10 Overview on lending & deposits Solid growth in loans to customers (+3% YoY) during 2017 driven by positive evolution of mortgages (+9% YoY). Direct funding +3% up YoY thank to healthy dynamics in current accounts and deposits only partially offset by a selective decrease in the debt securities in issue Net indirect deposits record growth of +10.2% to 2,775.6 million, as compared with the 2,518.1 million of 2016, with a positive result of assets under management (+13.9% to 2,213.7 million) and a marginal change in administered assets (-2.3% to million). Indirect deposits dropped by -1.8% to 3,405.2 million. The reduction is entirely due to the repricing of own issue shares. Loans to customers EUR m Direct funding EUR m Indirect funding EUR m +8% % %

11 Overview of operating income Net Interest Margin stood at EUR 151.9m (+9% YoY) thanks to a strong re-pricing on the liability side (interest expenses down by 23% YoY) only partially offset by a declining trend in the interest income Excellent result on the commission income (+7% YoY) driven by positive evolution of the indirect funding These results affect the Operating income at EUR 257.7m (+6%) Net interest income EUR m 132,5 138,9 151,9 Net fee & commission income EUR m 77,5 82,1 88,2 Net interest and other banking income EUR m 242,3 243,4 257,7 +15% +14% +6%

12 Overview of operating expenses Operating expenses were down by 4% YoY driven by a reduction in other admin expenses During 2017 there was a notable impact from charges connected with ordinary contributions to the deposit guarantee system Operating expenses EUR m FTE (#) Cost Income Ratio (%) 71,8% 72,2% 65,6% 172,6 170,5 164,5-5% -4% -9%

13 Overview of cost of risk evolution Successfully reduced cost of risk from peak in 2016 with further improvement underway in 2018 Loan loss provisions EUR m 89,2 Cost of Risk bps ,

14 Overview of net profit Volksbank reports EUR 24.3m net profit in 2017, compared to a EUR 7.7m net profit in 2016 The profit for 2017 confirms the goals set out in the business plan, based on adding customers, increasing volumes and profit margins, and improving operational efficiency Since its foundation, Volksbank has always been profitable without having ever posted a single loss 14

15 3 Capital Position Total capital ratio of 13.6% increased in 2017

16 Capital ratios evolution CET1 ratio up to 11.9% compared to 11.7% in 2016, Total capital ratio up to 13.6% thanks to TIER 2 subordinated bonds issued in the second half of 2017 CET1 ratio and TCR significantly above SREP requirements in EUR m phased in Shareholders equity CET1 capital Total capital RWA 5,756 6,176 6,033 Current SREP overall capital requirements CET1 ratio 6.30% Tier1 ratio 8.00% Total capital ratio 10.25% RWA density 66.0% 66.3% ~ 62.4% CET1 ratio 11.2% 11.7% 11.9% TCR 11.2% 11.7% 13.6% 16

17 4 Asset Quality Strong asset quality shown by a Texas ratio of 71.9%.

18 Overview of non-performing exposures 2017 Gross EUR Evolution Gross NPL* / gross loans to customers 15.2% 16.0% 12.9% Net NPL* / loans to customers 9.7% 9.9% 7.8% 18 of which net bad loans** / loans to customers 5.1% 5.1% 4.1% Bad loans coverage ratio 50.9% 53.8% 53.7% UTP coverage ratio 23.0% 23.3% 25.7% Past-due coverage ratio 7.7% 9.0% 8.1% NPL coverage ratio 40.1% 42.5% 43.5% Texas ratio*** 95.8% 90.3% 71.9% * NPL = Crediti deteriorati ** Bad Loans = Sofferenze Net EUR Coverage Bonis 6,467,784 6,419, % NPL 959, , % of which past-due 10,118 9, % of which UTP 334, , % of which bad loans 614, , % Texas ratio = Net non performing loans Tangible equity Volksbank s asset quality benefits from: Exposure to more positive economic conditions in the Italian North-Eastern region compared to the Italian average Swift application of local legal procedures, with foreclosures procedures taking less time than the average Italian level Conservative underwriting and strong-track record in NPL management Texas ratio*** at a sound level of 71.9% declining versus 2015 and 2016

19 5 Funding & Liquidity Sound funding and liquidity position

20 Overview of funding and liquidity TOT: 7, ,0 238,9 644,1 480,0 599,6 800, ,5 Funding structure EUR m TOT: 8, , TOT: 8, ,0 584,1 994,7 946,9 Repos Deposits from Other Banks Other Deposits from Customers , , , Deposits from Government / Central Banks Debt Securities in Issue, Trading and FV liabilities Current Accounts, Demand and Time Deposits from Customers

21 Overview of funding plan Key elements of Volksbank s long-term funding plan: Achieve sustainable growth in retail deposit base Balanced utilization of institutional funding in terms of sources and expiration dates and gradual substitution of ECB funding Issuance of subordinated AT1 / Tier 2 instruments to institutional investors to further improve Group Total Capital Ratio while managing a MIFID compliant investor base Plan to broaden diversification by adding Covered Bonds along ABS to the funding mix, collateralizing retail loans to the Covered Bond Program and SME loans to further securitisations Cooperation for SNP/MRel issuance 21

22 Securitisations Status Year Name Type Arranger Legal advisor Agent Fully repaid 2006 Voba Finance RMBS Fully repaid 2008 Voba 2 Mixed Amortizing Class A2 Notes 2011 Voba 3 RMBS Rated notes repaid Amortizing Class A1 Notes 2012 Voba 4 SME 2015 Voba 5 RMBS Amortizing Class A2 Notes 2016 Voba 6 SME Not issued 2018 Voba 7 SME Estimated issue of notes within 1H

23 Covered Bond Program Program details Cover Pool Residential Mortgages, LTV <=80% Program size EUR 3,000m Estimated issuances until 2020 First issue date 1H 2019 EUR 700-1,000m The Covered Bond Program is currently under development Estimated first issue amount Arranger of the program Legal advisor Target rating EUR 250m [AA] 23

24 Euro Medium Term Notes Program The following notes can be issued under the 1,000m EUR EMTN-Program: Senior Senior Non-Preferred Subordinated Tier 2 Program Arranger Legal advisor Status: Active First set up: 2008 Next revision: May

25 EUR 100m 10NC5 Tier 2 Notes Terms & Conditions Issue Rating BB / BB (Fitch / DBRS) Format Subordinated, 10NC5 Tier 2 Issue Size EUR 100m Launch Date 28/09/2017 Settlement Date 06/10/2017 Call Date 06/10/2022 Maturity 06/10/2027 Coupon Documentation 5.625% per annum, Fixed, Annual, Actual/Actual (ICMA) EUR 1.000m EMTN- Programme Pricing IPTs Guidance Re-offer Yield Re-offer Spread Issue Price 100% Germany & Austria 11% 6.00% yield area 5.75% (+/- 0,125% WPIR) yield 5.625% yield MS bps Allocation by Country Spain 3% UK 2% France 1% Allocation by Investor Type Private Banking 25% Other 1% Banks 25% Others 1% Fund Managers 49% Listing Luxembourg Stock Exchange Denomination EUR 100,000 + EUR 1,000 Sole Manager & Bookrunner Banca IMI Switzerland 13% Italy 69% 25

26 Ratings of Volksbank Republic of Italy Volksbank Republic of Italy Volksbank Long-Term Rating BBB BB+ Long-Term Rating BBB BB+ Outlook Stable Stable Outlook Stable stable Republic of Italy Volksbank Long-Term Rating BBB (high) BBB (low) Outlook Stable Negative 26 Source: Bloomberg as of 13/02/2018

27 6 Business Plan The Volksbank business plan envisages the Bank becoming more efficient, with a push toward digitalization

28 Business Plan FOCUS POINTS 1 REVENUES DIVERSIFICATION TARGETS Maintain the interest income level also enlarging and diversifying the Banking Book Increase penetration on the commission margin 2 CHANNEL STRATEGY Development of new channels (i.e. Contact Center and on-location advisory hubs) in order to distribute more value-added services and reduce the cost-to-produce of lower added activities 3 PRODUCTIVITY Reduction of the cost basis through digitalization and process improvements. Reduction of productivity gap between the Trentino-Alto Adige and Veneto 4 ASSET QUALITY Continue to strengthen Volksbank's asset quality profile and NPL management capabilities thanks to the creation of the business line Workout focusing on value creation 28

29 7 Concluding Remarks

30 Concluding remarks Unique exposure to one of the wealthiest regions in Italy Lean business model focused on retail and SME business Profitable bank as shown by the fact that Volksbank has always delivered positive net results Sound balance sheet with a Texas ratio of 72% and a TCR 13.6% 30 Strong commitment from all the stakeholders in executing the 2017/2021 Plan

31 Annex Full Financial Statements & P&L Contacts Disclaimer

32 Balance Sheet: Assets (in euro) Cash and cash equivalents 62,622,180 59,170,988 71,358, Financial assets held for trading 39,093,738 14,394,347 11,531, Financial assets available for sale 1,387,185,925 1,625,719,283 1,090,651, Investments held to maturity 170,425, ,923, ,971, Due from banks 44,803,704 41,916, ,745, Loans to customers 6,447,870,911 6,727,222,564 6,961,711, Investments 4,769,334 6,913,336 5,793, Property and equipment 145,591, ,475, ,577, Intangible assets of which: - goodwill 121,936,848 99,601, ,370,270 99,601, ,213,815 99,601, Tax assets a) current b) deferred of which: Law no. 214/ ,480,147 65,970,087 98,510,060 86,611, ,995,804 59,943, ,052,357 79,438, ,106,370 59,540, ,565,737 69,457, Other assets 126,544, ,982, ,274,793 Total assets 8,715,324,394 9,316,085,716 9,637,936,195

33 Balance Sheet: Liabilities and shareholders equity (in euro) Due to banks 838,462,663 1,085,006,401 1,150,659, Due to customers 5,207,990,000 6,001,785,846 6,396,871, Debt securities issued 1,570,686,783 1,099,040, ,837, Financial liabilities held for trading 3,129,718 2,269,549 2,074, Financial liabilities carried at fair value 9,692,320 9,720,698 9,738, Tax liabilities a) current b) deferred 51,475,184 15,335,514 36,139,670 31,850,865 1,844,721 30,006,144 33,831,834 3,668,215 30,163, Other liabilities 214,845, ,328, ,010, Employee termination indemnities 21,260,432 20,523,562 19,751, Provisions for risks and charges a) pensions and similar commitments b) other provisions 20,628,487-20,628,487 17,139,791-17,139,791 16,791,778-16,791, Valuation reserves (15,302) (5,543,206) 681, Reserves 267,738, ,644, ,365, Share premium reserve 307,527, ,158, ,158, Share capital 179,535, ,439, ,439, Shares in treasury - - (18,553,559) Net income (loss) for the year 22,367,508 7,721,587 24,277,481 Total liabilities and shareholder s equity 8,715,324,394 9,316,085,716 9,637,936,195

34 Balance Sheet: Income statement (1) Interest and similar income 197,878, ,930, ,256, Interest and similar expense (65,400,300) (38,031,970) (29,320,643) 30. Net interest income 132,477, ,898, ,935, Fee and commission income 86,154,885 90,620,801 97,895, Fee and commission expense (8,612,504) (8,526,675) (9,689,201) 60. Net fee and commission income 77,542,381 82,094,126 88,205, Dividends and similar income 7,996,901 6,453,969 4,476, Net income from trading activities 2,025,039 2,213,643 2,281, Profits (losses) on disposal or repurchase of: a) receivables b) financial assets avaiable for sale c) financial assets held to maturity d) financial liabilities 22,124,216 (2,190,918) 24,097, ,194 13,699,432 (258,114) 13,633,780 (8) 323,774 10,829,366 (2,871,380) 13,278,185 1, , Profits (losses) on financial assets and liabilities designated at fair value through profit or loss 114, (66,841) 120. Net interest and other banking income 242,280, ,359, ,662, Net losses/recoveries on impairment of: a) receivables b) financial assets available for sale c) financial assets held to maturity d) other financial transactions (46,485,762) (43,661,500) (2,403,672) - (420,590) (91,891,075) (89,205,421) (2,260,305) - (425,349) (59,501,999) (52,046,970) (7,403,397) - (51,632) 140. Net income from financial activities 195,794, ,468, ,160,094

35 Balance Sheet: Income statement (2) Administrative expenses: a) Personnel costs b) Other administrative expenses (184,764,382) (97,953,754) (86,810,628) (181,564,617) (99,090,206) (82,474,411) (174,426,100) (99,771,207) (74,654,893) 160. Net provisions for risks and charges (6,186,708) (671,851) (2,689,594) 170. Net adjustments to/recoveries on property and equipment (6,583,809) (7,368,327) (7,042,860) 180. Net adjustments to/recoveries on intangible assets (1,882,549) (1,848,253) (1,336,198) 190. Other operating income/expenses 26,820,734 20,950,554 21,000, Operating costs (172,596,714) (170,502,494) (164,494,541) 210. Profits (losses) on investments in associates and companies subject to joint control 143,568 2,438,900 (1,067,588) 240. Profits (losses) on disposal of investments 71,979 2,554, , Income (loss) before tax from continuing operations 23,413,635 (14,041,181) 32,903, Year-end income taxes for continuing operations (1,046,127) 21,762,768 (8,626,103) 270. Income (loss) after tax from continuing operations 22,367,508 7,721,587 24,277, Profit (loss) for the year 22,367,508 7,721,587 24,277,481

36 Contacts Johannes Schneebacher Chief Executive Officer Direct line: Martin Schweitzer Chief Financial Officer Direct line: Siegfried Stocker Head of Treasury Direct line:

37 Disclaimer This document has been prepared by Volksbank solely for information purposes and for use in presentations of the Bank s strategies and financials. The information contained herein has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the company, nor its advisors or representatives shall have any liability whatsoever (in negligence nor otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations.