BIPIEMME GROUP 9M 2015 financial results

Transcription

1 BIPIEMME GROUP 9M 2015 financial results 10 November

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 9 months 2015 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 9 months 2015 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. 2

3 Index Highlights 9M 2015 financial results Annexes 3

4 The financial results as at 30 September 2015 confirm the excellent operating trends in the first 6 months of 2015, both on the balance sheet side 9M 15 Chg. vs 9M 14 DIRECT CUSTOMER FUNDING 37.0bn +1.6% l l o/w SIGHT DEPOSITS 21.4bn +14.8% l ASSETS UNDER MANAGEMENT 20.1bn +15.5% l CUSTOMER LOANS 33.4bn +4.1% 4

5 and the P&L 9M 15 Chg. vs 9M 14 l CORE REVENUES (NII + Net Fees and Comm.) 1,058.4m +4.9% o/w NET INTEREST INCOME l 606.8m +0.8% l o/w NET FEES AND COMMISSION 451.6m +10.9% l OPERATING COSTS 708.0m -1.5% l COST OF CREDIT 98bps -21bps with strong recovery in profitability 9M 15 Chg. vs 9M 14 NORMALISED NET PROFIT1 l 213.9m +69.8% 1. Net of non-recurring items 5

6 BPM: a bank close to its territory, companies and households 9M 15 Chg. vs 9M 14 c NEW MORTGAGES AND PERSONAL LOANS¹ PRIVATE CORPORATE + 3.6bn + 1.3bn + 2.3bn + 1.2bn + 0.4bn + 0.8bn with a low risk profile 9M 15 Chg. vs 9M 14 l NPE COVERAGE LEVEL 39.5% +190bps NET BAD LOANS/ NET CUSTOMER l LOANS 4.5% VS 4.8% INDUSTRY 1. Internal management data 6

7 ..and well known capital and liquidity soundness 9M 15 l CET1 B3 Fully Loaded¹ (without AIRB models) 12.13% TEXAS ratio % l LEVERAGE ratio 7.72% l Liquidity Coverage Ratio (LCR) 3 105% l 1. CET1 includes the amount of net profit as at 30 September 2015 calculated in compliance with the curreìnt regulations 2. Texas ratio: Net NPE / (capital + reserves intangible assets) 3. Daily LCR. Latest available data 7

8 Index Highlights 9M 2015 financial results Annexes 8

9 9M 2015 results: Direct Customer Funding ( bn) Dec '14 Jun '15 Sept '15 vs Jun 15 vs Dec 14 Direct Funding +0.5% +0.4% Repos -21.9% -7.6% Securities and FL at FV +10.6% -9.4% Time deposits -5.1% -25.9% Sight deposits +4.2% +12.1% Sight deposits Time deposits Securities & FL at FV Repos The positive trend in sight deposits continued (+4.2% Q/Q and +12.1% YTD) Outstanding securities and financial liabilities at FV down 9.4% YTD, mainly due to non renewal of bonds that matured in the period (about 1.2bn). This trend, also seen in time deposits, was reflected in the growth of AUM and sight deposits, in line with the group s forecasts In Q3 15, the growth in securities (+10.6%) was mainly driven by the issue of a 1bn 7-year Covered Bond, successfully placed with institutional investors at an interest rate equal to the Mid-Swap + 25bps 9

10 9M 2015 results: Direct Customer Funding - Breakdown ( bn) (A) Sept 15 (B) Jun 15 (C) Dec 14 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 against Cassa di Compensazione e Garanzia Repos against own securities TOTAL DIRECT FUNDING A-B A-C 1. Current accounts and demand saving deposits 2. Restricted deposits and other forms of time deposits 10

11 9M 2015 results: Indirect customer funding ( bn) Dec '14 Jun '15 Set '15 AuM AuC vs Dec % -7.5% +12.5% ASSETS UNDER MANAGEMENT (60% of indirect funding) AUM +12.5% vs Dec 14, mainly driven by net inflows (about 2.2bn YTD) AUM substantially flat Q/Q owing to the negative performance of financial markets, though net inflows were over 300m ASSETS UNDER CUSTODY (40% of indirect funding) AuC down 7.5% vs Dec 14 owing to customers ongoing preference for AUM products 29.1% AUC BY ASSET CLASS 39.8% 31.1% Equity Government Bonds Bonds and other 46.0% FUNDS BY ASSET CLASS 10.0% Equity 14.9% Balanced 0.8% Liquidity Flexible 28.3% Bond Equity: +6 pp vs Sept 14 Govies: -1 pp vs Sept 14 Bonds and Other: -5 pp vs Sept 14 Equity: - 4 pp vs Sept 14 Balanced: -1 pp vs Sept 14 Liquidity: - 1 pp vs Sept 14 Flexible: -7 pp vs Sept 14 Bond: +11 pp vs Sept 14 11

12 9M 2015 results: liquidity position Use of eligible securities 1 Composition of eligible securities 2 ( bn) % 8% 1% Govies % Covered Bonds ABS ABACO % Others Dec '14 Jun '15 Nov '15 3 ECB Repo&Other Eligible fin. securities (unencumbered) Net liquidity balance 3 : spot 12.1% of total assets and about 2bn at 3 months ECB exposure: 3.1bn, includes 3.0bn TLTRO 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, SME and retail loans) 1. Includes eligible securities received as collateral 2. Dirty price net of ECB haircut 3. Figures as at 3 November 2015 from Internal Liquidity Report 12

13 9M 2015 results: maturing securities 1 Retail bonds by maturity Wholesale funding by maturity ( m) ( m) 1,000 1, Cov. Bond Senior EMTN Altro Other Istit. Ist. 2 A m Covered Bond is due to expire in November 2015, already re-financed by the issue of the aforementioned 1bn 7 year-covered Bond placed in Sept-15 at a interest rate equal to Mid- Swap +25bps In addition to wholesale and retail maturities, 1.8bn time deposits will expire in Wholesale (net of repurchases)and callable retail securities are expressed at first call date 2. Tier 1 instruments: first call date 13

14 9M 2015 results: Financial Assets m Sept 15 Jun 15 Dec 14 vs Jun 15 BPM & other commercial banks 9,563 9,056 9, Banca Akros 1,084 1, (189) TOTAL NET FINANCIAL ASSETS 10,647 10,329 10, m Sept 15 Jun 15 Dec 14 vs Jun 15 Breakdown of net financial assets 10,647 10,329 10, o/w: Governement (o/w: over 99% Italian) 9,246 8,859 8, Financials and other (111) Equity stakes (6) Mutual funds and private equity Net hedging and trading derivatives As at September 2015 the AFS reserve of the Italian government bond portfolio (before fiscal effect) was positive for about 302m The duration of the Italian government bond portfolio is about 3.8 years 14

15 9M 2015 results: loans to customers ( bn) Vs. Jun 15 Vs. Dec Loans to customers -0.2% +4.1% Repos +14.1% +61.5% Others -0.5% +5.0% Mortgages +0.5% +2.9% Dec '14 Jun '15 Set '15 Mortgages Other Repos Loans to customers increased 4.1% vs Dec 14 and were substantially flat Q/Q: In terms of customer segments¹, it is important to highlight private loans (+1.7% YTD) and corporate (+4.8% YTD); all commercial sectors experienced credit growth, in particular manufacturing (+11.1%), while Real Estate and Construction decreased New mortgages and instalment loans¹ in the first 9M 15 totalled about 3.6bn (o/w 2.3bn corporate), up 53.1% Y/Y Loans market share at 1.90% as at Aug 15 vs 1.83% as at Dec Internal Management Data 15

16 9M 2015 results: total net non-performing exposures ( m) 3,591 3,598 3,699 3,678 3, ,181 2,117 2,221 2,131 2,051 1,276 1,344 1,361 1,456 1,512 Sep '14 Dec '14 Mar '15 Jun '15 Set '15 Bad Loans Unlikely to pay Past due Net NPE up 1.0% vs Jun 15; overall the aggregate experienced a sharp slow down of the pace of growth (+3.3% YTDvs +6.4% in the first 9M 14) Net Bad Loans + 56m Q/Q, owing to new flows from unlikely to pay which decreased by over 80m in Q3 Net Bad Loans on total customer loans at 4.5%, below the industry average (4.8%¹) 1. Data as at Aug 15 16

17 9M 2015 results: non-performing exposure coverage coverage % Dec 14 Mar 15 Jun 15 Sept 15 Sept 15 with cancellat ions NPE Bad Loans Unlikely to pay Past-due Performing loans Tot. loans % Excellent increase in non-performing exposure coverage, now at 39.5% (+100bps vs Dec 14, +20bps Q/Q) Bad loans coverage was still high at 54.7% and the slight decrease Q/Q (-20bps) was due to new inflows from well collateralised positions Performing loans coverage was 0.64% (vs 0.67% as at Jun 15) due to the improved quality of the loans portfolio related to the outflows of high risk loans into NPE 17

18 9M 2015 results: Net interest income Yearly comparison ( m) Quarterly comparison ( m) % % % like-for-like basis +0.6% like-for-like basis 9M '14 9M '15 Net interest income one-off 1 Q2 '15 Q3 15 Net interest income one-off 1 Net interest income up 0.8% Y/Y (+1.1% on a like-for-like basis): commercial net interest income growth was mainly due to the positive trend in both average customer spreads (+4bps in 9M 15) and loan volumes government bond portfolio contribution decreased in line with the bank s forecast but was partially offset by lower interbank and institutional funding costs and higher margins from financial activities Net interest income was +0.6% Q/Q on a like-for-like basis¹ due to the positive trend in average customer loans, which offset the decrease in the government bond portfolio contribution 1. Net interest income in Q1 14 and Q2 15 include ~ 6m and ~ 4m positive effects, which are considered one-off for a like-for-like comparison 18

19 9M 2015 results: BPM Group customer spread quarterly trend¹ 2014 (average quarterly data) 2015¹ ² 2.15 Average quarterly change Y/Y Lending rates -49bps Deposit rates -45bps Spread -4bps EUR 3M -20bps Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 deposit rates lending rates spread Customer spread decreased slightly Y/Y (-4bps) owing to the combined effect of the lower cost of funding (-45bps) and decrease in lending rates (-49bps) The Q/Q decrease (-2bps) was caused by the decrease in lending rates (-10bps) and was not entirely offset by the decrease in deposit rates (-8bps) 1. Average quarterly data 2. Average customer spread in Q2 15 net of the one-off effect related to a tax credit reimbursement 19

20 9M 2015 results: Net fees and commission Yearly comparison ( m) Quarterly comparison ( m) % +1.2% M '14 9M '15 Management, trading & adv. 1 Others Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 1 Management, trading & adv. Others Net fees and commission were up strongly Y/Y (+10.9%) mainly due to the positive trend in AUM AUM fees (+33.6% Y/Y²) the increase in customer loans, in particular corporate, drove fees and commission higher in the credit segment (+13.8% Y/Y²) Net fees and commission decreased 8.6% Q/Q, affected by the usual Q3 seasonal effect. However, the figure was much higher than in Q3 14 (+10.7%) 1. See details in annexes 2. Internal management data 20

21 9M 2015 results: Net income from financial activities Yearly comparison ( m) Quarterly comparison ( m) M '14 9M ' Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Net result from financial activities in the first 9M 15 decreased, in line with the bank s forecast, to 81.6m (- 68.8m Y/Y) vs 150.5m in the first 9M In detail: net income on disposal/repurchase of financial assets: 73.8m, (- 44.4m Y/Y). It includes the negative impact from repurchase of retail bonds in Q2 15 ( m) net income from held-for-trading activities : 19.2m (- 10.4m Y/Y) lower income from investment banking activities, affected by the volatility in financial markets in the quarter As at September 2015, the AFS reserve on the Italian governement bond portfolio (before fiscal effect) was positive for about 302m vs 168m as at Jun 15 21

22 9M 2015 results: Operating costs Yearly comparison ( m) % % like-for-like basis o/w 12.4m for SRF and DGS Quarterly comparison ( m) M '14 9M '15 Staff Administrative Depreciations Operating costs down 1.5% Y/Y. In detail: staff costs decreased 2.8% Y/Y thanks to the actions taken by the bank in the last few years and lower variable costs linked to results other admin. costs increased by 4.0% Y/Y due to the yearly contribution to the SRF¹ and DGS¹ (already fully expensed), which was not booked in Net of these items administrative costs would be down 2.3% Operating costs down 4.3% Q/Q. In detail: stable staff costs other administrative expenses were down 15.8% vs Q2, which included about 4.4m contribution to the DGS¹. The decrease was also affected by the usual seasonal effect 1. Single Resolution Fund and Deposit Guarantee Scheme 2.Net of 12.4m for SRF and DGS Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Staff Administrative Depreciations 22

23 9M 2015 results: Net adjustments on loans¹ Yearly comparison ( m) Quarterly comparison ( m) 119bps 98bps 110bps 170bps 91bps 112bps 93bps M '14 9M '15 Net adjustments on loans and other op. Annualised cost of risk Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Net adjustments on loans and other op. Annualised cost of risk Cost of risk in 9M 15 was 98bps, down vs 9M 14 (119bps), in spite of the increase in coverage of non-performing exposures Cost of risk in Q3 15 (93bps) was down vs Q2 15 (112bps) 1. Net adjustments on loans and other operations 23

24 9M 2015 results: capital ratios 1 Capital ratios calculated according to the standard model methodology, thus not benefiting from the effects of the AIRB models Total Capital ratio (phase-in) CET1 (phase-in) CET1 FULLY LOADED 12.13% 2014 giu-15 Jun 15 Sept set Jun giu Sept set RWA: 34.9bn, in detail: Credit Risk 31.2bn Market Risk 1.0bn Operating Risk 2.7bn 1. CET1 as at Sept 15 includes the capitalised 9M 15 net income as provided for by the current regulation 24

25 9M 2015 results: stated vs normalised¹ stated ( m) 9M 15 9M 14 Var Y/Y % Net interest income % Non-interest income: % - Net fees and commission income % - Other operating income % - Profit (loss)on invest. valued under the equity method % - Net income (loss) from financial activities % - Other operating income/expenses % Operating income 1, , % Administrative expenses: % a) Personnel expenses % b) Other administrative expenses % Depreciations and amortisation % Operating costs % Operating profit % Net adjustments to loans and other operation % Net provisions to risk and charges n.s. Profit (loss) from equity and other investments % Profit (loss) before tax from continuing operations % Tax on income from continuing operations % Net profit (loss) for the period % Minority Interest ,0% Net profit % Sept 15 norm Net of non-recurring items Sept 14 norm Var Y/Y % % % % % % % % 1, , % % % % % % % % n.s n.s % % % % % 1. Net of non-recurring items 25

26 9M 2015 Results: reclassified P&L Y/Y¹ Q/Q² ( m) chg. m Chg. % Chg. m Chg. % 3Q 2Q 1Q 4Q 3Q 2Q 1Q Net interest income % % Non-interest income: % % - Net fees and commission income % % - Other operating income % % - Share of Profit (loss) on the investments valued under the equity method % % - Net income (loss) from financial activities % % - Other operating income/expenses % % Operating income % % Administrative expenses: % % a) Personnel expenses % 0 0.0% b) Other administrative expenses % % Depreciations and amortisation % % Operating costs % % Operating profit % % Net adjustments to loans and other operation % % Net provisions to risk and charges n.s n.s. Profit (loss) from equity and other investments % n.s. Profit (loss) before tax from continuing operations ,8% % Tax on income from continuing operations n.s % Net profit (loss) for the period % % Minority Interest % -0.7 n.s. Net profit % % 1. Q3 15 vs Q Q3 15 vs Q

27 Q&A 27

28 Index Highlights 9M 2015 financial results Annexes 28

29 Net fees and commission ( 000) 9M M 2014 Change Amount in % Fees and commission income 504, ,030 39, Fees and commission expense (53,124) (57,813) 4, Total net fees and commission 451, ,217 44, Breakdown: guarantees giv en and receiv ed 24,414 15,171 9, credit deriv ativ es management, trading and adv isory serv ices 232, ,667 38, collection and payment serv ices 48,954 48, securitization transaction serv ices management of current accounts 43,703 48,295 (4,592) -9.5 other serv ices 101, , Total net fees and commission 451, ,217 44,

30 Credit Quality ( 000) Change (A - B) Change (A - C) Gross exposure A B C Amount % Amount % D % % % % o/w Non performing exposure 6,139, ,062, ,852, , , ,750, a) Bad loans 3,341, ,226, ,046, , , ,887, b) Unlikely to pay 2,629, ,735, ,658, , , ,714, c) Past due 168, , , , , , o/w Performing loans 29,878, ,006, ,690, , ,187, ,713, Total gross loans and advance to customers 36,018, ,068, ,543, , ,474, ,464, Total adjustments Change (A - B) Change (A - C) A Coverage % B Coverage % C Coverage % Amount Coverage % Amount % D Coverage % o/w Non performing exposure 2,424, ,384, ,255, , , ,159, a) Bad loans 1,828, ,770, ,701, , , ,611, b) Unlikely to pay 578, , , , , , c) Past due 16, , , , , , o/w Performing loans 192, , , , , , Total adjustments 2,616, ,585, ,464, , , ,368, Net loans and advance to customers Change (A - B) Change (A - C) A % B % C % Amount % Amount % D % o/w Non performing exposure 3,715, ,677, ,597, , , ,590, a) Bad loans 1,512, ,456, ,344, , , ,275, b) Unlikely to pay 2,050, ,131, ,117, , , ,181, c) Past due 152, , , , , , o/w Performing loans 29,686, ,805, ,480, , ,205, ,505, Total net loans and advance to customers 33,401, ,483, ,078, , ,322, ,095,