BIPIEMME GROUP 2015 financial results

Transcription

1 BIPIEMME GROUP 2015 financial results 8 February

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 FY 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 FY 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. In case of doubt the Italian version will prevail 2

3 Index Highlights 2015 financial results Annexes 3

4 BPM : a significant turnaround ( m) Adjustments on loans and other op. Net profit Net loss In the period the group also enterely wrote down 671m of goodwill 4

5 BPM 2015: a sound bank with a low risk profile and sustainable profitability thanks to HIGH CAPITAL LEVELS l CET1 SREP RATIO 2016 l CET1: PHASE IN l CET1 FULLY LOADED 9.00% 11.53% (without AIRB) 12.21%... LOW RISK PROFILE l TEXAS ratio 1 l NPE COVERAGE 2 l LEVERAGE ratio: 86.2% 7.67% >150% (including real guarantees)... AND IMPROVING PROFITABILITY l NET PROFIT 2015: 289M (+24.4% Y/Y) PAYOUT 41% DIVIDEND YIELD 4.1%³ 1. Texas ratio: net NPE/ (capital + reserves intanglible assets) 2. Source: internal management data 3. Calculated as at 5 February closing price 5

6 BPM 2015: main trends P&L ( m) 2015 CH. Y/Y CORE 1 REVENUES 1, % OPERATING COSTS (like-for-like) % NET ADJUSTMENTS ON LOANS AND OTHER OP % COST OF CREDIT 100bps -32bps BALANCE SHEET ( m) 2015 CH. Y/Y CUSTOMER LOANS 34, % SIGHT DEPOSITS 21, % 1. Net interest income + net fees and commission 2. In order to have a like-for-like comparison with 2014, the figure is net of the recurring contribution to the DGS and SFR and the non-recurring items 6

7 BPM 2015: comparison with Italian Banking System¹ BPM s CUSTOMER LOANS VS SYSTEM: CHANGE Y/Y 6.6% BPM s NET INTEREST INCOME CHANGE Y/Y 0.8% 0.5% -3.8% -1.8% BPM Sistema System BPM s GROSS BAD LOANS VS SYSTEM: CH. Y/Y -4.4% BPM s GROSS BAD LOANS RATIO VS SYSTEM 20.1% 21.1% 10.4% 7.5% 9.4%² 8.8% 9.5% 8.9% BPM Sistema System 1. Source: ABI Monthly Outlook January Nov 15 vs Dec BPM Sistema System 7

8 BPM 2015: trend in Gross NPE 12% 10% 8% 6% 7.7% Gross NPE: change Q/Q 5.9% Gross Inflows from performing to NPE ( m) -33% 4% 2% 2.6% 0.6% 1,960 1,860 0% -2% -4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % 1,710 1, Gross inflows from performing to NPE decreased: -33% Y/Y Gross inflows in the last three quarters of 2015 stabilised Gross NPE: -2.3% Q/Q also due to the disposal of some bad loans. Net of these operations the stock is in any case down 0.1% Significant reduction in Gross NPE average quarterly growth rate: +0.6% in 2015 vs +7.7% in 2012 Net NPE on total loans down to 10.6% from 11.2% in

9 BPM 2015: Normalised net profit (+83.4% Y/Y) ( m) % Others include: result from divestement in Pitagora1936; provisions for contractual undertakings for disposal of custodian bank; result from disposal of Edipower 2. So called Fondo di Solidarietà 3. write-back of the quota ( 17.4 million) exceeding the provisions for disputes arising out of the now closed mandatory convertible bond Prestito Obbligazionario Convertendo BPM 2009/ %, ended in

10 CET1 ratio and RWA density CET1 phase-in & fully loaded (%) Total Capita Ratio (%) Sept set CET1 CET1 FL RWA DENSITY (AIRB MODEL)¹ Average RWA Density: 42.6% Sept set RWA DENSITY (STANDARD MODEL)¹ Average RWA Density: 65.1% (ex BPM) 45.8% 42.2% 43.5% 37.6% 50.2% 36.2% 70.5% 65.5% 60.2% 67.0% 63.6% 66.1% 68.4% Unicredit Intesa Monte Paschi Banco Popolare UBI Credem 2 BPM Carige Creval BPER Pop. Pop. Veneto Vicenza Sondrio Banca 1. RWA Density of the sample was calculated as at September As at December 2015 BPM s RWA/density was 69.8% 10

11 Index Highlights 2015 financial results Annexes 11

12 2015 results: Direct Customer Funding ( bn) Dec '14 Sept '15 Dec '15 vs Sept 15 vs Dec 14 Direct Funding +1.7% +2.1% Repos +12.8% +4.2% Securities and FL at FV -6.0% -14.8% Time deposits -4.9% -29.5% Sight deposits +2.9% +15.4% Sight deposits Time deposits Securities & FL at FV Repos The positive trend in sight deposits continued (+15.4% Y/Y) Outstanding securities and financial liabilities at FV down 14.8% Y/Y, mainly due to: Retail: non renewal of bonds that matured in the period. This trend reflects customers different investment choices towards AUM and insurance products Institutional funding: volumes in line with Dec maturities were replaced by the placement of two covered bonds ( 1bn in September and 750mln in November) In Q4 15, the growth in sight deposits continued (+2.9% Q/Q) and more than offset the decrease in time deposits and retail bonds 12

13 ( bn) 2015 results: Direct Customer Funding - Breakdown (A) Dec 15 (B) Sept 15 (C) Dec 14 A-B 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 against Cassa di Compensazione e Garanzia Repos against own securities TOTAL DIRECT FUNDING Retail bonds by maturity Wholesale funding by maturity 4 1, Cov. Bond Senior EMTN Altro Other Istit. Ist.³ 1. Current accounts and demand saving deposits 2. Restricted deposits and other forms of time deposits 3. First call date for Tier1 instrument 4. Net of redemption of a senior bond ( 1bn) matured in Jan 16 13

14 2015 results: Indirect customer funding vs Dec 14 ( bn) % ASSETS UNDER MANAGEMENT (61% of indirect funding) AUM +16.9% vs Dec 14. mainly driven by net % inflows (about 2.6bn YTD) Net inflows continued to be positive in the quarter (over 400m) % AUC BY ASSET CLASS 40.7% Dec '14 Set '15 Dec '15 AuM 32.2% AuC Equity Government Bonds Bonds and other Equity: +9pp vs Dec 14 Govies: -3 pp vs Dec 14 Bonds and Other: -5 pp vs Dec % ASSETS UNDER CUSTODY (39% of indirect funding) AuC down 10.7% vs switch to AUM products 47.2% FUNDS BY ASSET CLASS 10.2% 26.2% 15.6% Equity: - 3 pp vs Dec 14 Balanced: -2 pp vs Dec 14 Liquidity: - 1 pp vs Dec % Dec 14 owing to the Equity Balanced Liquidity Flexible Bond Flexible: -8 pp vs Dec 14 Bond: +13 pp vs Dec 14 14

15 2015 results: liquidity position Use of eligible securities 1 Composition of eligible securities 2 ( bn) % 10% Govies 2% Covered Bonds ABS Dec '14 Sept '15 Feb ' % ABACO ECB Repo&Other Eligible fin. securities (unencumbered) Net liquidity balance 3 : spot 10.5% of total assets and about 3.6bn at 3 months ECB exposure: 3.4bn 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 2 February 2016 from Internal Liquidity Report 15

16 2015 results: Financial Assets m Dec 15 Sept 15 Dec 14 vs Dec 14 BPM & other commercial banks 9,034 9,563 9,393 (359) Banca Akros 1,132 1, TOTAL NET FINANCIAL ASSETS 10,166 10,647 10,350 (184) m Dec 15 Sept 15 Dec 14 vs Dec 14 Breakdown of net financial assets 10,166 10,647 10,350 (184) o/w: Governement (o/w: over 99% Italian) 8,938 9,246 8,930 8 Financials and other Equity stakes (157) Mutual funds and private equity (16) Net hedging and trading derivatives (44) As at December 2015 the AFS reserve of the Italian government bond portfolio (before fiscal effect) was positive for about 303m The duration of the Italian government bond portfolio is about 3.8 years 16

17 2015 results: loans to customers ( bn) Vs. Sept 15 Vs. Dec 14 Loans to customers +2.4% +6.6% Dec '14 Set '15 Dec '15 Mortgages Other Repos Repos n.s. n.s. Others +2.3% +7.4% Mortgages +1.6% +4.6% Loans to customers increased 6.6% vs Dec 14 and 2.4% vs Sept 15, an excellent result considering that loans to corporate and households in the system grew 0.5% Y/Y¹ All commercial sectors experienced credit growth, in particular wholesale commerce (+10.7% Y/Y²), manufacturing (+9.2% Y/Y²). Real Estate and Construction continued to decreased (-3.8%Y/Y²) New mortgages and instalment loans² totalled 5.1bn (+43% Y/Y). In detail: new mortgages to households: +72% Y/Y new mortgages and installment loans to corporates: +33% Y/Y Loans market share increased sharply:1.94% as at Nov 15 vs 1.83% as at Dec ABI Monthly Oulook 2. Internal Management Data 17

18 2015 results: total gross non-performing exposures Vs. Sept 15 ( m) 5,853 5,999 6,062 6,139 5, % ,658 2,793 2,736 2,629 2, % -0.3% 3,046 3,078 3,226 3,341 3, % Dec '14 Mar '15 Jun '15 Sep '15 Dec '15 Bad Loans Unlikely to pay Past due Gross NPE down 2.3% vs Sept 15, partially due to the disposal of Bad Loans in the quarter. Net of these operations, the stock is anyway down 0.1% Q/Q vs an average quarterly growth rate of 0.6% in 2015, 2.6% in 2014 and 5.9% in In detail: Net Bad Loans: -1.9% Q/Q (+2.2% on a like-for-like basis. slowing down vs previous quarters) Unlikely to pay: -0.3% Q/Q Past due: -41.1% Q/Q 18

19 2015 results: non-performing exposure coverage coverage % Dec 14 Jun 15 Sept 15 Dec 15 Dec 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 39.6% (+110 bps vs Dec bps Q/Q) and 44.5% with cancellations Bad loans coverage was still high at 54.5% (60.8% with cancellations). The slight decrease Q/Q was partially due to the disposals of Bad Loans with high coverage and new inflows of loans backed by real guarantees Performing loans coverage was 0.60% (vs 0.64% as at Sept 15) due to both the improved quality of the loans portfolio and customer loans growth 19

20 2015 results: Net interest income Yearly comparison ( m) Quarterly comparison ( m) % % % like-for-like basis FY '14 FY '15 Net interest income one-off 1 Q3 '15 Q4 '15 Net interest income Net interest income up 0.8% Y/Y (+1.1% on a like-for-like basis): commercial net interest income: +1.3% Y/Y, mainly due to the positive trend in average loan volumes and the resilience of the average customer spreads in 2015 decrease in the government bond portfolio contribution ( -36m), in line with the bank s forecast, and partially offset by lower institutional funding costs Net interest income decreased 2.0% Q/Q: commercial net interest income: +1.4% Q/Q thanks to the growth in average volumes financial net interest income (-4.6% Q/Q) owing to lower income from the governement bond portfolio increase in institutional funding cost due to new placements 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 20

21 2015 results: BPM Group customer spread quarterly trend¹ 2014 (average quarterly data) 2015 (average quartely data) Average quarterly change Y/Y Lending rates -45bps Deposit rates -40bps Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Spread EUR 3M -5bps -17bps deposit rates lending rates spread Customer spread decreased slightly Y/Y (-5bps) owing to the combined effect of the lower cost of funding (-40bps) which does not offset the decrease in lending rates (-45bps). The decrease in customer spread is anyway below that of the Euribor (-17bps) in the same period The Q/Q decrease (-3bps) was caused by the decrease in lending rates (-9bps) and was not entirely offset by the decrease in deposit rates (-6bps) 1. Average quarterly data 21

22 2015 results: Net fees and commission Yearly comparison ( m) Quarterly comparison ( m) % +1.2% FY '14 FY '15 Management, trading & adv. Others 1 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Management, trading & adv. Others 1 Net fees and commission were up strongly Y/Y (+8.9%) mainly due to the positive trend in AUM AUM fees increased to 228m (+31.3% Y/Y²) the increase in customer loans, in particular corporate, drove fees and commission higher in the credit segment (+9.6% Y/Y²) Net fees and commission increased 6.5% Q/Q thanks to the same trends mentioned above 1. See details in annexes 2. Internal management data 22

23 2015 results: Net income from financial activities Yearly comparison ( m) Quarterly comparison ( m) % FY '14 FY '15 Net result from financial act. One-off Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Net result from financial act. (recurr.) One-off Net result from financial activities in 2015 was slightly down (-3.6% Y/Y). The result includes both positive and negative non-recurring components such as the disposal of a stake in ICBPI (+ 75.4m), the repurchase of retail bonds (- 11.5m) and the write off of Banca Etruria subordinated bond (~ - 25m). In detail: The net result from financial operations includes about 124m income from the disposal of italian govies, down vs 150m in 2014 and Banca Akros contribution ( 34m vs 46m in 2014) The net result from financial activities totalled 100.1m in Q4 and it includes the capital gain from the disposal of a stake held in ICBPI (mentioned above)and the partial write-off of Banca Etruria subordinated bond ( 12.6m) 23

24 2015 results: operating costs Y/Y comparison (1/2) OPERATING COSTS: Y/Y COMPARISON - STATED VS NORMALIZZATI - ( m) D&A +4.7% 974 1, ~7 ~40 ~19-0.7% Adm Staff Op. Oneri costs op Oneri Op. costs op F.do F.do Extr. Risol. 3 Solidarietà Straordinario Resolution Fund Others Altro (1) (1) Op. Oneri costs op (likefor-like) omogenei Oneri Op. costs op (likefor-like) omogenei 2015 operating costs net of non-recurring items²: -0.7% Y/Y. In detail: staff cost: stable Y/Y. Net of adjustments to Fondo di Solidarietà and higher variable components linked to the results, they are down 1.4% administrative expenses: +16.1% Y/Y. Net of the extraordinary contribution to the Resolution Fund and the ordinary contribution to the DGS and SFR (not present in 2014) administrative expenses are down 4.4%, below business plan target for 2016 D&A: 74.8m, substantially stable Y/Y 1. Recurring contribution to DGS and SFR 2. Net of non-recurring items + footnote1 3. Early Retirement Plan 24

25 2015 results: operating costs Q/Q comparison (2/2) OPERATING COSTS: Q/Q COMPARISON - STATED VS NORMALISED - ( m) +37.6% +16.0% ~ ~40 ~7 24 D&A Admin Staff Oneri Op. costs 3T 15 Oneri Op. costs 4T 15 F.do F.do Extr. Risol. Altro (1) Oneri Op. Costs 4T 15 Oneri Op. Costs 3T 15 2 Others (1) Q3 15 Q4 15 Solidarietà Straordinario Resolution normal. Q4 15 normal. Q3 15 Fund normalised normalised OPERATING COSTS: LIKE-FOR-LIKE COMPARISON Y/Y ( m) Recurring contribution to DGS and SFR 2. Early Retirement Plan Q4 '14 Q4 '15 Staff Administrative Depreciations 25

26 2015 results: Net adjustments on loans¹ Yearly comparison ( m) Quarterly comparison ( m) 132bps 100bps bps bps bps 94 93bps bps 96 FY '14 FY '15 Net adjustments on loans and other op. Annualised cost of risk Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Net adjustments on loans and other op. Annualised cost of risk Cost of risk in 2015 was 100bps, down vs 2014 (132bps). in spite of the increase in coverage of non-performing exposures Cost of risk in Q4 15 was 112bps 1. Net adjustments on loans, other operations and losses from disposal of loans 26

27 Consolidated reclassified P&L: stated vs normalised¹ ( m) FY 2015 FY 2014 Change FY 2015 FY 204 Change Amount % norm norm Amount % Net interest income % % Non-interest income % % - Net fees and commission income % % - Other operating income % % - Share of profit (loss) on inv. value under equity method % % - Net income (loss) from financial activities % % - Other operating income/expenses % % Operating Income 1, , % % Administrative expenses % % a) personel expenses % % b) other administrative expenses % % Depreciations and amortization % % Operating Costs -1, % % 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 ,2% 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 % % 1. Net of non-recurring items 27

28 Q&A 28

29 Index Highlights 2015 financial results Annexes 29

30 Asset Quality (euro/000) Gross exposure Change (A - B) Change (A - C) A % B % C % Amount % Amount % o/w Non performing exposure 5,997, ,139, ,852, , , a) Bad loans 3,276, ,341, ,046, , , b) Unlikely to pay 2,621, ,629, ,658, , , c) Past due 99, , , , , o/w Performing loans 30,747, ,878, ,690, , ,057, Total gross loans and advance to customers 36,745, ,018, ,543, , ,201, Total adjustments A Change (A - B) Change (A - C) Coverage % B Coverage % C Coverage % Amount % Amount % o/w Non performing exposure 2,372, ,424, ,255, , , a) Bad loans 1,785, ,828, ,701, , , b) Unlikely to pay 578, , , , c) Past due 9, , , , , o/w Performing loans 185, , , , , Total adjustments 2,558, ,616, ,464, , , Net loans and advance to customers Change (A - B) Change (A - C) A % B % C % Amount % Amount % o/w Non performing exposure 3,624, ,715, ,597, , , a) Bad loans 1,490, ,512, ,344, , , b) Unlikely to pay 2,043, ,050, ,117, , , c) Past due 90, , , , , o/w Performing loans 30,562, ,686, ,480, , ,081, Total net loans and advance to customers 34,186, ,401, ,078, , ,107,

31 Reclassified balance sheet: quarterly evolution (euro/000) Assets Cash and equivalents 300, , , , , , , ,900 Financial assets at fair value and hedging derivates: 11,416,540 11,965,118 11,715,087 12,780,251 11,887,806 11,959,086 11,434,356 10,941,852 - Financial assets held for trading 1,797,874 1,832,200 1,824,944 2,284,325 1,921,518 1,954,084 1,712,025 1,587,646 - Financial assets designated at fair value 75,543 80,854 81, ,443 97, , , ,542 - Financial assets available for sale 9,491,248 9,947,242 9,632,210 10,208,114 9,670,272 9,662,753 9,336,110 8,969,488 - Hedging derivates 40,638 91, , , , , , ,081 - Change in fair value of hedged item s (+/-) 11,237 13,649 14,544 21,872 20,107 17,332 15,196 12,095 Loans and advanced to banks 1,224,717 1,287,592 1,162,731 1,050, ,777 1,562,185 1,849,987 2,254,757 Loans and advance to customers 34,186,837 33,401,500 33,483,029 32,600,377 32,078,843 32,095,916 32,520,786 32,821,420 Fixed assets 1,199,459 1,167,942 1,156,028 1,127,543 1,117,879 1,099,811 1,099,688 1,085,101 Non recurrent assets and disposal groups held for sale 0 6,118 6, ,596 Other assets 1,875,033 1,459,941 1,561,095 1,541,504 1,879,666 1,519,517 1,627,113 1,544,831 Total assets 50,203,300 49,515,033 49,308,272 49,309,633 48,271,811 48,468,810 48,780,872 49,025,457 Liabilities and Shareholders Equity Due to banks 4,839,439 4,550,638 4,494,906 4,171,724 3,318,564 3,792,622 4,313,017 6,015,928 Due to customers 28,622,852 28,577,221 28,777,043 27,589,895 27,702,942 26,979,219 26,812,018 26,025,446 Debt securities in issue 8,849,290 8,281,217 7,867,754 8,677,218 8,981,834 9,271,996 9,316,712 9,503,147 Financial liabilities at fair value and hedging derivates 1,379,948 1,450,858 1,543,437 1,981,271 1,690,396 1,716,900 1,544,651 1,477,065 - Financial liabilities held for trading 1,183,557 1,256,371 1,326,834 1,746,892 1,463,445 1,491,342 1,321,381 1,240,546 - Financial liabilities designated at fair value 129, , , , , , , ,224 - Financial liabilities available for sale 48,678 43,438 44,092 58,053 58,751 57,102 45,742 30,833 - Hedging derivates 18,086 18,513 14,809 14,567 16,084 17,883 19,682 21,462 Other liabilities 1,429,895 1,568,866 1,650,859 1,686,438 1,501,993 1,622,393 1,777,531 1,645,410 Provision for specific use 434, , , , , , , ,693 Share capital and reserves 4,338,440 4,404,959 4,333,508 4,613,588 4,304,390 4,328,863 4,266,963 3,732,552 Minority interest 19,974 19,816 19,038 19,493 19,424 19,418 19,228 18,895 Net profit (loss) for the period (+/-) 288, , ,053 67, , , ,468 64,321 Total liabilities and Shareholders Equity 50,203,300 49,515,033 49,308,272 49,309,633 48,271,811 48,468,810 48,780,872 49,025,457 31

32 Net fees and commission (euro/000) Change Amount % Fees and commission income 678, ,506 42, Fees and commission expense (72,901) (79,940) 7, Total net fees and commission 605, ,566 49, Breakdown: guarantees giv en and receiv ed 32,799 24,860 7, credit deriv ativ es management, trading and adv isory serv ices 306, ,302 51, collection and payment serv ices 71,623 74,730 (3,107) -4.2 securitization transaction serv ices management of current accounts 58,473 64,189 (5,716) -8.9 other serv ices 136, ,485 (1,105) -0.8 Total net fees and commission 605, ,566 49,