H1 2020 Group Results Presentation
6 August 2020
DISCLAIMER
This presentation has been prepared by Banco BPM ("Banco BPM"); for the purposes of this notice, "presentation" means this document, any oral presentation, any question and answer session and any written or oral material discussed following the distribution of this document.
The distribution of this presentation in other jurisdictions may be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of, and observe, these restrictions. To the fullest extent permitted by applicable law, Banco BPM and its subsidiaries disclaim any responsibility or liability for the violation of such restrictions by any person.
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The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating without notice. Certain statements in this presentation are forward-looking statements about Banco BPM. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates" and similar expressions. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.
Banco BPM does not undertake any obligation to 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. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. All subsequent written and oral forward-looking statements attributable to Banco BPM or persons acting on its behalf are expressly qualified in their entirety by this disclaimer.
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By participating to the presentation of the Group results and accepting a copy of this presentation, you agree to be bound by the foregoing limitations regarding the information disclosed in this presentation.
***
This presentation includes both accounting data (based on financial accounts) and internal management data (which are also based on estimates).
Mr. Gianpietro Val, as the manager responsible for preparing the Bank's accounts, hereby states pursuant to Article 154-bis, paragraph 2 of the Financial Consolidated Act that the accounting data contained in this presentation correspond to the documentary evidence, corporate books and accounting records.
H1 2020 Group Results Presentation 2
METHODOLOGICAL NOTES
- Before 31/03/2020, the impact of the PPA (Purchase Price Allocation) of the business combinations of the former Banca Popolare di Milano Group and of the former Banca Popolare Italiana and Banca Italease Groups, was split and registered under the following items: "Net interest income", "Other net operating income" and "Tax on income from continuing operations". Starting from Q1 2020, the aggregated impact net of tax of this PPA has been regrouped and reclassified in one new single P&L Item: "PPA after tax"; the previous quarters of 2019 have been reclassified accordingly.
- In H1 2020, the Net Financial Result was strongly influenced by the impact from the change in BBPM's creditworthiness on the valuation at fair value of own liabilities issued (certificates), triggered by the Covid-19 crisis. For a better understanding of the quarterly trend of the operating profitability, in this presentation, the P&L is, therefore, also shown reclassifying the FV on own liabilities from NFR to a dedicated line item, post tax, before net income.
- Due to the change of the valuation criteria applied to the Group's properties and artworks, starting from 31/12/2019, a new item called «Profit & Loss on Fair Value measurement of tangible assets» has been introduced in the reclassified P&L scheme as at 31/12/2019. In this item, also the depreciations of properties previously accounted in the item "Amortisation & Depreciation" within the "Operating Costs" have been reclassified, restating accordingly all the previous quarters of 2019 for coherence. Furthermore, considering that the new accounting principle does not foresee for the amortisation of investment properties, the amortisation on such assets in the first three quarters of 2019 has been cancelled; as a consequence, the Item "Amortization and Depreciation" as well as the net result of the first three quarters of 2019 have been re-determined.
- It is reminded that, in Q2 2019, the assets and liabilities (mainly composed by customer loans for an amount of €1,352m) referred to the non-captive business of the subsidiary Profamily were classified as discontinued operations according to IFRS5 standard, but then, in Q4 2019, they have been re-classifiedline-by-line under the relevant Balance Sheet items. While the official Balance Sheet Scheme as at 30/06/2019 still maintains Profamily non-captive volumes classified as discontinued operations, in this presentation, in order to allow a proper comparison, the data of Customer Loans as at 30/06/2019 have been restated re-including Profamily non-captive volumes.
- It is also reminded that, on 16 April 2019, Banco BPM accepted the binding offer submitted by Illimity Bank S.p.A. and regarding the sale of a portfolio of Leasing Bad Loans. More in detail, the disposal concerns a portfolio for a nominal value of about €650 million at the cut-off date of 30th June 2018, mainly composed of receivables deriving from the active and passive legal relationships related to leasing contracts classified as bad loans, together with the related agreements, legal relationships, immovable or movable assets and the underlying contracts. The closure of the operation is subject to precedent conditions that are customary for transactions of this kind, including the notarial certification for the transferability of the assets, and shall be executed in various phases, with the conclusion expected by end-2020. Starting from Q2 2019, the loans subject to this transaction (€607m GBV and €156m NBV as at 30/06/2019) have been reclassified as discontinued operations according to the IFRS5 standard. As at 30/06/2020, the residual amount of these loans stood at €114m GBV and at €38m NBV.
- In the area of companies consolidated with the equity method, the second quarter has seen the entry of Anima Holding S.p.A., in which Banco BPM holds a stake of 19.385%. In the light of the changes brought about in the governance of the company, this stake, which is considered of strategic nature and which is destined to be held on a stable basis, is deemed to represent a situation of significant influence on the side of Banco BPM.
- Please note that, on 4 April 2020, the Annual Shareholders' Meeting of Banco BPM didn't discuss and vote on item 2 of the agenda (Resolutions on the allocation and distribution of profits); this is in order to acknowledge the guidelines provided by the ECB on 27 March 2020, with which, in order to strengthen the capital resources of relevant banks subject to its monitoring, and in order to be able to make use of the more extensive resources in support of households and businesses in the current situation brought about by the ongoing Covid-19 health emergency, it requested the banks, inter alia, not to proceed with the payment of dividends (still not approved) and not to assume any irrevocable commitment for their payment for the years 2019 and 2020 at least until 1 October 2020. It is also noted that on 27 July 2020, the ECB announced the extension of the afore-mentioned dividend ban from 01/10/2020 to 31/12/2020. The capital ratios included in this presentation are calculated coherently with this decision, i.e. including the entire net income as at 31/12/2019. Furthermore, the ratios as at 31/03/2020 and as at 30/06/2020 are here reported including also the net income of the quarters.
H1 2020 Group Results Presentation 3
Agenda
1. | Covid 19: Update on Banco BPM's Response | 4 | |
2. | Key H1 2020 Performance Highlights | 11 | |
3. | Performance Details: | 34 | |
- | Profitability | 35 | |
- Balance Sheet | 41 | ||
- | Funding and Liquidity | 42 | |
- Customer Loans and Focus on Credit Quality | 46 | ||
- | Capital Position | 50 |
H1 2020 Group Results Presentation 4
COVID 19: BACK TO NORMAL WITH MORE DIGITAL BUSINESS
1,581 BRANCHES REGULARLY OPEN AS OF TODAY
BRANCHES | (vs. 1,155 in the peak the lockdown, o/w 364 open 2 days per week) | ||||||
FULL CAPACITY TO BE ACHIEVED IN SEPT. 2020, with the opening of the remaining 147 branches | |||||||
H1 2020 | Y/Y | ||||||
| DIGITAL USERS1: | #1.3M | +15.4% | ||||
| APP USERS1: | #700K | +54.5% | ||||
DIGITAL | | ONLINE TRANSACTIONS1: | #16M | +25.3% | |||
| DIGITAL SALES: | #27K | +28.4% | ||||
| EXECUTED ORDERS (WEB): | #1.7M | +35.1% | ||||
INV. PRODUCT | | PRODUCT PLACEMENTS: | |||||
PLACEMENTS | €1.3BN IN JUNE 2020 vs. €0.7bn in May and €0.3bn in April | ||||||
| FEES & COMMISSIONS: | ||||||
FEES & COMM. | |||||||
€151M IN JUNE vs. €104m in April, €121m in May (and a monthly average of €147m in Q1 2020) | |||||||
Note: 1. Households | |
1. Covid 19: Update on Banco BPM's Response | 5 |
COVID 19: A THREE-STEP APPROACH TO IDENTIFY THE BEST CREDIT MANAGEMENT ACTIONS
PROACTIVE APPROACH ADOPTED: SUPPORT CUSTOMERS WITH THE RIGHT CUSTOMISED PROPOSITION,
IMPLEMENT THE GOVERNMENT SUPPORT MEASURES AND SAFEGUARD BBPM'S CREDIT PORTFOLIO
1
ANALYTICAL ASSESSMENT
AT BORROWER LEVEL
2
RISK-BASED
SEGMENTATION
Analyze Corporate/SME clients to | Input: drivers | |
assess: | | Pre-Covid rating |
• potential impact of the evolving | | Capital solidity-resilience |
market conditions | | Sector outlook |
• identify financial priorities | | Share of wallet |
Clients grouped into homogeneous | Output: clusters based on expected Covid impact | |
clusters based on the results | | Low impact |
assessment | Impact only in the short term | |
Potentially high and long-lasting impact | ||
| High impact |
3
DEFINITION AND IMPLEMENTATION OF DEDICATED STRATEGIES AT BORROWER LEVEL
• | Define the strategy for each | Output: target lists |
cluster, taking into account also | Target lists made available to the Relationship | |
the Group's share of wallet | Managers, with indications on the strategy to be | |
• | Implementation of Government | adopted at single customer level |
support measures, coherently with the strategy
1. Covid 19: Update on Banco BPM's Response 6
COVID 19: NEW LENDING ACTIVITY
Update on Liquidity Decree Measures
New lending activity
€ bn | +13.2% | ~€2.0bn as at 30/06/2020 | ||||||||
~84% | ~16% | (up at €4.0bnas at | ||||||||
31/07/2020) | ||||||||||
12.4 | ||||||||||
10.9 | ||||||||||
Ordinary business | ||||||||||
H1 2019 | H1 2020 | |||||||||
Covid-19 Measures | ||||||||||
Lending measures assisted by public guarantees as at 31/07/20
- bn
10.2 | 11.5 | €4.9bn | ||||||||||||||||
In progress | ||||||||||||||||||
€2.6bn | ||||||||||||||||||
Already provided | 1.3 | 7.3 | 7.5 | |||||||||||||||
0.2 | ||||||||||||||||||
1.1 | 2.9 | 4.0 | ||||||||||||||||
Total | ||||||||||||||||||
"Micro" (<=€30K) | "Other" (>€30K) | Approved | ||||||||||||||||
100% guaranteed | 70%-90% guaranteed | (Avg. level of | ||||||||||||||||
guarantees | Under approval | |||||||||||||||||
(include also renegotiations) | ||||||||||||||||||
at 86%) | ||||||||||||||||||
Strong speed-up in new | ||||||||||||||||||
lending since June 2020 |
1. Covid 19: Update on Banco BPM's Response 7
COVID 19: UPDATE ON MORATORIA MEASURES
Suspended installments
€ bn | 2.3 | |
ABI Moratoria | ||
0.4 |
Cure Italy Decree
1.9 Moratoria
31/07/2020
STRATEGY FOR IDENTIFIED CLUSTERS
Moratoria to 'Low-Medium' risk categories:
Higher flexibility for managing short-term liquidity
Moratoria to 'Mid-High'and 'High' risk categories: Opportunity to define the most appropriate strategy for the customer and for safeguarding BBPM's credit portfolio
Total underlying loan exposure as at 31/07/20
€ bn | 16.1 | |
Slight increase vs. | 3.2 | ABI Moratoria |
€15.9bn as at 30/06/201
12.9 | Cure Italy Decree |
Moratoria | |
GBV
Distribution by rating classes
76% | 14% | 10% | |||||
Low-Medium | Mid-High risk | High risk | |||||
risk | |||||||
o/w: Exposure to selected | €0.5bn | €0.3bn | |||||
sectors2 with "High-potential | |||||||
impact" from Covid 19 |
Note: 1. Of which €12.9bn already perfected at the end of June 2. Selected sectors: Transport & Storage services; Accomodation, Restaurants & Travel Agencies; Textile fibers & Leather; Automotive trade; Means of Transport.
1. Covid 19: Update on Banco BPM's Response 8
PERFORMING LOANS: FOCUS ON SENSITIVITY TO COVID 19
Customer loan (GBV) breakdown as at 30/06/201
Other (Public Sector,
No-Profit, etc.)
4.7%
Households | |
26.5% | €101.8bn |
Financials | Non-Financial |
Corporates | |
12.9% | |
55.9% | |
Performing portfolio: EAD by risk categories2
31/03/2020 | 30/06/2020 | ||||||
28.7% 26.3% | 35.8% 35.6% | ||||||
23.3% 24.2% | |||||||
7.8% | 8.5% | 4.4% | 5.4% | ||||
Low | Medium-Low Medium Medium-High | High |
Limited exposure to selected sectors3 with "High-potential Impact" from Covid 19
Secured | ||||
o/w: | o/w: | o/w: | ||
with Real | Acquisition of | Unsecured but | ||
TOTAL | and/or State | State guar. | with acquisition | |
guar. as at | already | of State guar. | ||
30/06/20 | approved to | in progress | ||
be perfected | ||||
Exposure | €8bn | €3bn | €2bn | €3bn |
% on Perf. Loans | ||||
8% | 3% | 2% | 3% | |
o/w: with High | €0.4bn | €0.2bn | €0.1bn | €0.1bn |
Risk ratings | ||||
o/w: with Mid- | €1.0bn | €0.4bn | €0.2bn | €0.4bn |
High Risk ratings | ||||
From 87.8% as at March to 86.1% as at June
Internal management data. | Note: 1. GBV of on balance-sheet performing exposures, excluding the GACS Senior Notes. Financials include REPOs with CC&G. 2. | ||
Includes all performing customer loans subject to the internal rating process (AIRB). Based on 11 rating classes for rated performing | |||
loans. 3. Selected sectors: Transport & Storage services; Accomodation, Restaurants & Travel Agencies; Textile Fibers & Leather; | |||
Automotive trade; Means of Transport. | 1. Covid 19: Update on Banco BPM's Response | 9 | |
PERFORMING LOANS: NEW ECL ASSESSMENT DRIVEN BY A MORE SEVERE SCENARIO
Macro
Scenario
Methodological
approach
Government
measures
Q1 2020: Macro-scenario
5.6% | 4.5% | |||||||||
3.4% | 0.15% | |||||||||
-6.0% | ||||||||||
-8.0% | ||||||||||
-10.0% | ||||||||||
2020 | 2021 | Long Term | ||||||||
Covid 1 | Covid 2 | Covid 3 | ||||||||
Q1 2020
- Projection based on the average between short-term "Covid" scenario (average IT GDP decline in 2020 = 8%) and long-term "normal" scenario (IT GDP growth = 0.15%)
- GDP decline impacting credit portfolio on aggregated basis (satellite models)
- Included in the elaboration based on preliminary information available in the initial phase of the lockdown
Q2 2020: Macro-scenario
6.1% | 2.7% | |
4.8% | ||
2.6% | 1.2% | |
3.5% | 2.5% | 1.0% |
1.0% | Covid impact | ||||||
on ECL | |||||||
-8.2% | in H1 2020: | ||||||
-9.2% | ~ €140m | ||||||
-13.1% | |||||||
2020 | 2021 | 2022 | 2023 | ||||
Worst | Base | Best | |||||
Q2 2020
- Multiscenario approach using official ECB estimates
- GDP decline disaggregated at sector level: projections on credit portfolio take into account sector-specific expectations
- Updated elaboration based on current outstanding volumes and pipeline of transactions expected to benefit from public guarantees
1. Covid 19: Update on Banco BPM's Response 10
Agenda
1. | Covid 19: Update on Banco BPM's Response | 4 | |
2. | Key H1 2020 Performance Highlights | 11 | |
3. | Performance Details: | 34 | |
- | Profitability | 35 | |
- | Balance Sheet | 41 | |
- | Funding and Liquidity | 42 | |
- Customer Loans and Focus on Credit Quality | 46 | ||
- | Capital Position | 50 |
H1 2020 Group Results Presentation 11
H1 2020 NET INCOME: €105.2M STATED AND €128.4M ADJ.1
Resilient performance in the adverse environment: quarterly growth in pre-provision profit (excl. FV2)
€ m | Q1 2020 | Q2 2020 | ||||
NII | 474.1 | 479.5 | ||||
FEES & COMMISSIONS | 440.6 | 376.4 | ||||
NET FINANCIAL RESULT | 206.8 | -82.7 | ||||
o/w: FV on Own Liabilit ies | 206.0 | -165.4 | ||||
TOTAL INCOME | 1,160.5 | 836.1 | ||||
OPERATING COSTS | -635.0 | -613.8 | ||||
PROFIT FROM OPERATIONS | 525.5 | 222.3 | ||||
LLPs | -213.2 | -263.0 | ||||
PRE-TAX PROFIT | 309.6 | -59.2 | ||||
TAX | -93.8 | 41.4 | ||||
SYSTEMIC CHARGES (net of taxes) | -57.5 | -18.2 | ||||
NET INCOME BEFORE PPA | 158.2 | -34.4 | ||||
PPA AFTER TAX | -6.6 | -12.0 | ||||
NET INCOME | 151.6 | -46.4 | ||||
Based on a re-
exposition of
'FV on own
liabilities' (pre-tax)
into a separate line
item (post tax)
H1 20 Net Income
€105.2m
NEW RECLASSIFIED SCHEME | Q1 2020 | Q2 2020 |
NII | 474.1 | 479.5 |
FEES & COMMISSIONS | 440.6 | 376.4 |
NFR (excl. FV on Own Liabilities) | 0.8 | 82.7 |
TOTAL INCOME | 954.4 | 1,001.5 | ||
OPERATING COSTS | -635.0 | -613.8 | ||
PROFIT FROM OPERATIONS | 319.5 | 387.7 | ||
LLPs | -213.2 | -263.0 | ||
PRE-TAX PROFIT | 103.5 | 106.2 | ||
TAX | -25.7 | -13.3 | ||
SYSTEMIC CHARGES (net of taxes) | -57.5 | -18.2 | ||
NET INCOME BEFORE PPA & FV | 20.3 | 76.3 | ||
PPA AFTER TAX | -6.6 | -12.0 | ||
FV ON OWN LIABILITIES AFTER TAX | 137.9 | -110.7 | ||
NET INCOME | 151.6 | -46.4 |
In H1 2020, NFR was strongly influenced by the effect from the change in BBPM's creditworthiness on the valuation at fair value of own liabilities issued (certificates), triggered by the Covid19 crisis, with no impact on the CET1 calculation.
Note: 1. See slide 39 for details of adjustment elements (mainly
Systemic Charges). 2. Exclude from NFR the FV on own liabilities, 2. Key H1 2020 Performance Highlights 12 which does not impact the capital position.
SOLID H1 2020 PERFORMANCE IN "COVID-19 CONTEXT" (1/3)
OPERATING
PERFORMANCE
(excl. from Revenues the
FV on Own Liabilities)
RESERVES &
UNREALISED GAINS
Q1 2020 | Q2 2020 | Strong recovery of | |||||||||
Core Revenues in June | |||||||||||
(NII + Net Commissions) | |||||||||||
TOT. REVENUES | €954m | €1,001m | |||||||||
315 | |||||||||||
259 | 282 | ||||||||||
OPERATING COSTS | -€635m | -€614m | |||||||||
April 20 May 20 June 20 | |||||||||||
PRE-PROVISION INCOME | €319m | €388m | |||||||||
31/03/20 | 30/06/20 | DELTA Q/Q | Corresponding to | |
RESERVES OF DEBT | ||||
-€198m | €32m | +€230m | ||
+40bps on CET 1 ratio | ||||
SECURITIES AT FVOCI | ||||
in Q2 20 | ||||
>€110m at the | ||||
end of July 2020 | Excellent performance | |||
UNREALISED GAINS ON | ||||
of debt securities | ||||
€300m | €545m | +€245m | ||
DEBT SECURITIES AT AC1 | portfolio | |||
>€660m at the end of July 2020
Notes: 1. Unrealised Gains on Debt Securities at AC are not included | 2. Key H1 2020 Performance Highlights | 13 |
in the 'Comprehensive Profitability', nor in the Capital position. |
SOLID H1 2020 PERFORMANCE IN "COVID-19 CONTEXT" (2/3)
30/06/20 | DELTA Y/Y | DELTA Q/Q | ||
+1.1% | ||||
CORE NET PERF. LOANS | €95.0bn | +4.1% | ||
CUSTOMER VOLUMES | +3.2% | |||
C.A. & DEPOSITS | €93.1bn | +8.7% | ||
+7.0% | ||||
AUM | €57.8bn | +2.1% | ||
31/12/19 | 31/03/20 | 30/06/20 | ||||
GROSS NPE RATIO | 9.1% | 8.8% | ||||
8.7% | ||||||
ASSET QUALITY | ||||||
NET NPE RATIO | 5.2% | 5.0% | ||||
5.0% | ||||||
TEXAS RATIO2 | 52.3% | 50.1% | ||||
49.3% | ||||||
Volume growth confirmed also in July vs. June1:
- Loans +1%
- Core Funding +2%
Note: 1. Internal Management data of the Commercial Network as at 31/07/20. 2. Net NPEs over Tangible Net Equity (Shareholders' Net Equity - Intangible assets).
2. Key H1 2020 Performance Highlights | 14 |
SOLID H1 2020 PERFORMANCE IN "COVID-19 CONTEXT" (3/3)
Benefiting also from
TLTRO III take-up
LIQUIDITY & FUNDING
LCR | NSFR | UNENCUMBERED | |||
ELIGIBLE SECURITIES | |||||
193% | >100% | €24.2bn | |||
Including additional sources of available liquidity, total liquid assets stand at €37.3bn
CAPITAL RATIOS
CAPITAL BUFFERS
CET1 RATIO | TC RATIO | ||||
PHASED-IN | |||||
14.7% | 17.9% | ||||
FULLY LOADED | |||||
13.3% | 16.3% | ||||
ON CET 1 RATIO | ON TC RATIO | ||||
(vs. Min. requirement) | (MDA buffer) | ||||
PHASED-IN | |||||
+633bps | +506bps | ||||
FULLY LOADED | |||||
+479bps | +335bps | ||||
Further capital strengthening in Q2:
- FL CET1 ratio: +42bps
- FL TCR ratio: +27bps
- FL MDA Buffer increases by 27bps in Q2
- FL MDA Buffer well above strategic target of min. 250 bps
2. Key H1 2020 Performance Highlights 15
NET INTEREST INCOME: HIGHLIGHTS
Net Interest Income | NII: Evolution Breakdown | ||||||||
€ m | € m | ||||||||
474.1 | 479.5 | ||||||||
154.4 | 160.4 | 164.7 | 474.1 | +0.6 | +0.9 | +3.9 | 479.5 |
Apr -20May-20Jun-20 | |||||||||||||||||||
Q1 20 | Q2 20 | ||||||||||||||||||
Q1 20 | Comm. | NPE | TLTRO | Q2 20 | |||||||||||||||
NPE: 29.1m | 29.9m | ||||||||||||||||||
banking | contribution | ||||||||||||||||||
Commercial spreads
1.90 | 1.87 | 1.85 | 1.85 | 1.87 | 1.81 | ||||||||||||||||||||||||||
1.47 | 1.43 | 1.34 | 1.33 | 1.36 | 1.40 | ||||||||||||||||||||||||||
-0.43 | -0.44 | -0.51 | -0.52 | -0.51 | -0.41 | ||||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q1 20 | Q2 20 | ||||||||||||||||||||||||||
Asset spread | Customer spread | Liability spread | EURIBOR 3M | ||||||||||||||||||||||||||||
-0.31 | -0.32 | -0.39 | -0.41 | -0.41 | -0.30 | ||||||||||||||||||||||||||
QUAR. AVG. | |||||||||||||||||||||||||||||||
Key asset spread drivers:
- Segment mix: volume growth mostly concentrated in Corporate Segment, in particular in MLT lending
- Rating mix: higher volumes addressed towards lowest-risk borrowers to preserve the overall quality of the loan portfolio
2. Key H1 2020 Performance Highlights 16
VOLUMES AT A GLANCE
Solid commercial performance in a challenging environment
€ bn | 30/06/19 31/12/19 31/03/20 30/06/20 % chg.Y/Y % chg. YTD % chg. Q/Q |
Net Performing Customer Loans | 100.3 | 100.3 | 102.6 | 103.0 | 2.7% | 2.7% | 0.4% | ||
o/w: Core Performing Customer Loans1 | 91.2 | 91.1 | 94.0 | 95.0 | 4.1% | 4.3% | 1.1% | ||
- Medium/Long - Term Loans | 61.2 | 62.5 | 64.4 | 67.1 | 9.6% | 7.3% | 4.3% | ||
- Current Accounts | 10.7 | 10.5 | 10.4 | 9.4 | -11.5% | -10.0% | -9.5% | ||
- Other Loans | 19.4 | 18.1 | 19.2 | 18.5 | -4.6% | 2.0% | -3.6% | ||
Direct Funding2 | 105.2 | 108.9 | 111.5 | 114.4 | 8.8% | 5.1% | 2.7% | ||
C/A & Deposits (Sight + Time) | 85.6 | 87.8 | 90.2 | 93.1 | 8.7% | 6.0% | 3.2% | ||
Bonds | 14.4 | 16.1 | 16.6 | 16.4 | 14.1% | 2.2% | -1.0% | ||
Certificates | 3.3 | 3.2 | 3.0 | 3.1 | -4.2% | -3.4% | 3.7% | ||
Other | 2.0 | 1.8 | 1.7 | 1.8 | -5.5% | 2.3% | 8.3% | ||
Indirect Funding3 | 89.4 | 89.7 | 82.2 | 88.4 | -1.1% | -1.5% | 7.5% | ||
o/w: AUM | 56.7 | 58.3 | 54.1 | 57.8 | 2.1% | -0.8% | 7.0% | ||
- Funds & Sicav | 37.7 | 39.0 | 35.0 | 38.8 | 2.9% | -0.7% | 10.9% | ||
- Bancassurance | 14.8 | 15.4 | 15.3 | 15.1 | 1.4% | -2.1% | -1.5% | ||
- Managed Accounts & Funds of Funds | 4.1 | 3.9 | 3.8 | 4.0 | -3.1% | 2.6% | 4.6% |
Resilient trend in loans of the
Commercial Network confirmed also in July:
+€1bn vs. June4
Strong support from Core Funding of the Commercial Network confirmed also in July: +€2bn vs. June4
Strong recovery in AUM in Q2, due both to volumes (+€1.4bn) and market effect (+2.3bn)
Notes: 1. Exclude GACS senior notes, REPOs and Leasing. 2. Restated excluding REPOs and including Capital-Protected Certificates. 3. Restated excluding Capital-Protected Certificates from AUC. 4. Internal Management data of the Commercial Network as at 31/07/20.
Customer Loans as at 30/06/19 are adjusted for the reclassification of | ||
the Profamily non-Captive loan portfolio (see Methodological Notes). | 2. Key H1 2020 Performance Highlights | 17 |
SOUND LENDING PERFORMANCE OF THE NETWORK
€12.4bn New Loans in H1 2020
(Management data of the commercial network1)
€ bn | +13.2% | ||||||||||||||||||||||||||||||||||
10.9 | 12.4 | ||||||||||||||||||||||||||||||||||
Enterprise & | 9.0 | 11.1 | +22.3% | ||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||
Households | 1.9 | 1.3 | -30.2% | ||||||||||||||||||||||||||||||||
H1 2019 | H1 2020 | ||||||||||||||||||||||||||||||||||
2020 Quarterly trend | 2020 Monthly trend | ||||||||||||||||||||||||||||||||||
+27.3% | Enterprise & Corporate | ||||||||||||||||||||||||||||||||||
Households | |||||||||||||||||||||||||||||||||||
5.5 | 6.9 | 2.6 | 2.9 | ||||||||||||||||||||||||||||||||
1.5 | 2.1 | 1.5 | 2.0 | ||||||||||||||||||||||||||||||||
+26.7% | 1.3 | ||||||||||||||||||||||||||||||||||
4.9 | 6.2 | 0.3 | 0.3 | 0.4 | |||||||||||||||||||||||||||||||
+32.2% | 0.2 | 0.2 | 0.1 | 0.2 | |||||||||||||||||||||||||||||||
0.6 | 0.8 | ||||||||||||||||||||||||||||||||||
Jan. Feb. Mar. Apr. May. Jun. Jul. | |||||||||||||||||||||||||||||||||||
Q1 2020 | Q2 2020 | ||||||||||||||||||||||||||||||||||
20 | 20 | 20 | 20 | 20 | 20 | 20 |
- Customer loan growth in H1 2020 supported by the strong performance in new M/L-Term lending to Enterprises and Corporate
- New State-guaranteed lending facilities represent ~29% of new lending in Q2 (~€2bn as at 30/06/20, up at €4bn as at end-July)
- State-guaranteednew lending (with an average spread at ~1.6%) implies:
- Increase of the share of lending assisted by guarantees ~60% of total new lending in July (~70% of new lending to
Enterprises and Corporates) - Non-State-guaranteednew lending (ordinary business) more concentrated on the best risk categories
- Increase of the share of lending assisted by guarantees ~60% of total new lending in July (~70% of new lending to
Notes: 1. Include M/L-term Mortgages (Secured and Unsecured), Personal Loans, Pool, ST/MLT Structured Finance. Exclude Agos and Profamily volumes sold by the network, but not consolidated by the Group. Exclude ST lending other than Structured Finance.
2. Key H1 2020 Performance Highlights | 18 |
STRONG AND WELL DIVERSIFIED BOND FUNDING
Bond funding as at 30/06/2020
Nominal | 16.0% | Cap.-Protected | |
amounts | |||
Covered | Certificates | ||
Bonds1 | €20.3bn | 29.9% Senior | |
31.8% | |||
Preferred | |||
€3.7bn, o/w: ~€1.7bn | |||
not included in Own | 18.5% | 3.7% Senior | |
Funds Phased-in, but | Non-preferred | ||
representing MREL- | |||
Subordinated | |||
eligible funding | (T1, AT1 and T2) | ||
- Total bonds outstanding at €20.3bn
- Very manageable amount of wholesale bond maturities in H2 2020 (€2.4bn), considering €1.15bn already issued in H1 2020 (Jan. and Feb.) and the strong liquidity position (with unencumbered eligible assets at €24.2bn, highly exceeding total bonds outstanding)
- New Senior Non-Preferred successfully issued in February 2020, for a total of €750m, with a spread of 193bps
H1 2020: €1.15bn already issued, 48% of wholesale bond maturities of the year
€ bn | Wholesale bond issues | |||||||||||||||||
2.40 | ||||||||||||||||||
1.75 | ||||||||||||||||||
1.15 | ||||||||||||||||||
0.50 | ||||||||||||||||||
0.75 | ||||||||||||||||||
0.40 | ||||||||||||||||||
FY 17 | FY 18 FY 19 H1 20 | Jan-20 | Feb-20 |
AT1 Senior Non Pref.
Managerial data based on nominal amounts.
Notes: 1. Include also Repos with underlying retained Covered Bonds.
Wholesale bond maturities
2.4
0.7No maturities
registered in H1
1.7
H2 2020
Subordinated Senior Pref.
2. Key H1 2020 Performance Highlights 19
SOLID LIQUIDITY POSITION: LCR AT 193% & NSFR >100%1
Eligible Securities2 | Up at >€28bn | ||||
€ bn | |||||
54.0 | 54.5 | 63.4 | as at 31 July 2020 | TOTAL LIQUID ASSETS AT €37.3BN, o/w: | |
Unencumb. Eligible | |||||
19.9 | 22.6 | 24.2 | | €24.2bn Unencumbered Eligible Securities | |
securities | |||||
Encumbered with | 13.3 | 18.1 | 13.2 | | €8.5bn of Excess ECB deposits (~€5bn average in H1 2020) |
Repos & other | 26.0 | | €2.0bn HQLA lent3 | ||
Encumbered with | 20.8 | 13.8 | |||
€2.6bn Marketable securities (unencumb. non-eligible) | |||||
ECB | |||||
31/12/19 | 31/03/20 | 30/06/20 |
ECB exposure: breakdown as at 30/06/2020
TLTRO II completely | TLTRO III | ||
reimbursed in June 2020 | |||
25.5 | Other | ||
(€10.4bn) | |||
€26.0bn | |||
TLTRO III drawn: | 0.5 | ||
- €1.5bn in Dec. 2019 | 3-month refinancing | ||
- €2.0bn in March 2020 | |||
operations in USD, | |||
- €22.0bn in June 2020 | |||
reimbursed on |
2 July 2020
- Sizeable funding contribution also from long-term bilateral refinancing operations at €3.4bn euro (net of haircuts), with an average maturity of 1.7 years
- Still large potential room for TLTRO III, with maximum take-up of €35.7bn (+€10.2bn vs. current exposure)
Internal management data, net of haircuts.
Notes: 1. Monthly LCR (June 2020) and Quarterly NSFR (Q2 2020). 2. Includes assets received as collateral. 3. Refers to securities lending (uncollateralized high quality liquid assets).
2. Key H1 2020 Performance Highlights 20
NET FEES AND COMMISSIONS
Y/Y trend | Q/Q trend | Monthly trend restored | ||||||||||||||||||||||||||||
€ m | -8.0% | € m | € m | |||||||||||||||||||||||||||
-14.6% | ||||||||||||||||||||||||||||||
888.2 | 816.9 | |||||||||||||||||||||||||||||
440.6 | ||||||||||||||||||||||||||||||
424.8 | 376.4 | 150.8 | ||||||||||||||||||||||||||||
389.9 | 121.5 | |||||||||||||||||||||||||||||
104.1 | ||||||||||||||||||||||||||||||
220.2 | ||||||||||||||||||||||||||||||
169.8 | 75.7 | |||||||||||||||||||||||||||||
55.3 | ||||||||||||||||||||||||||||||
38.8 | ||||||||||||||||||||||||||||||
463.4 | 427.0 | |||||||||||||||||||||||||||||
220.4 | 206.6 | 65.3 | 66.2 | 75.1 | ||||||||||||||||||||||||||
April -20 | May-20 | June-20 | ||||||||||||||||||||||||||||
H1 19 | H1 20 | Q1 20 | Q2 20 | |||||||||||||||||||||||||||
Commercial Banking Fees | Management & Advisory | |||||||||||||||||||||||||||||
- Net fees and commissions come in at €376.4m in Q2 (-14.6% Q/Q), with April and May strongly hit by the Covid-19 crisis
- Monthly Net fees and commissions are building up again during Q2, with June back at a solid performance level of €150.8m
Investment product placements: monthly trend1
€ bn | Lockdown | |
impact | ||
1.2 | 1.5 | 1.3 |
0.9 0.3 0.7
Jan-20Feb-20Mar-20Apr-20May-20Jun-20
2. Key H1 2020 Performance Highlights 21
FINANCIAL PORTFOLIO: NET FINANCIAL RESULT AND RESERVES/UNREALISED GAINS
Net Financial Result
€ m | 206.8 | NFR excl. FV on | ||||
Own Liabilities | ||||||
82.7 | ||||||
-82.7 | 0.8 | |||||
Q1 20 | Q2 20 | Q1 20 | Q2 20 | |||
- Stated NFR at -€82.7min Q2 (against €206.8m in Q1) is strongly impacted by valuation effects on own liabilities
- The change in FVO included in the stated NFR (-€165.4m in Q2 vs. +€206.0m in Q1) has no impact on capital
- Excluding the FVO effect, NFR reached a positive result of €82.7m in Q2
Reserves of Debt Securities at FVOCI
Unrealised gains on Debt Securities at AC1
Pre-tax, in € m | >€110m as at | |||||||||
36 | 71 | 31/07/20202 | ||||||||
32 | ||||||||||
Not included in the P&L | ||||||||||
-198 | results, but included in | |||||||||
the Capital Position | ||||||||||
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 |
Pre-tax, in € m
520545
318300
30/06/19 31/12/19 31/03/20 30/06/20
>€660m as at
31/07/20202
Included neither in
the P&L results, nor in the Capital Position
Notes: 1. Debt Securities accounted at Amortised Costs are subject to a specific policy which sets dedicated limits to the amount of disposals allowed throughout the year. 2 Internal management estimates.
2. Key H1 2020 Performance Highlights 22
DEBT SECURITIES: INCREASING THE WEIGHT OF THE AC PORTFOLIO
Evolution & Composition of Debt Securities
€ bn | 34.2 | 34.5 | 31.2 | 34.5 | 38.3 | |||
31.6 | 32.9 | |||||||
Debt securities | 30.2 | o/w: €2.9m | ||||||
o/w: Italian | 26.7 | at FVTPL | ||||||
20.7 | 17.7 | 20.0 | 19.4 | 15.5 | 18.2 | 21.7 | ||
Govies | ||||||||
31/12/16 31/12/17 31/12/18 31/03/19 30/06/19 31/12/19 31/03/20 30/06/20
Share of Italian Govies on Debt securities
84% | 69% | 54% | 59% | 53% | Mainly | |||
56% | 50% | 57% | ||||||
concentrated | ||||||||
in AC portfolio |
(see next slide)
30/06/201930/06/2020
Classification
of Debt
Securities
FVOCI | FVOCI | ||||
38.5% | |||||
33.2% | AC | ||||
€13.3bn | AC | ||||
€34.5bn | €12.7bn | €38.3bn | |||
56.7% | |||||
51.9% | |||||
€17.9bn | €21.7bn | ||
FVTPL | €3.3bn | FVTPL | €3.9bn |
9.6% | |||
10.1% | |||
2. Key H1 2020 Performance Highlights 23
FOCUS ON GOVIES PORTFOLIO
Italian Govies at AC | Italian Govies at FVOCI |
63% maturing by next year
Italian Govies at FVTPL
€ bn | +€2.9bn in Q2 | ||
11.0 | 10.0 | 10.9 | 13.8 |
30/06/19 31/12/19 31/03/20 30/06/20
Duration in years1 | 3.9 | 3.3 |
- bn
6.2 | 4.6 | 5.0 | 5.0 |
30/06/19 31/12/19 31/03/20 30/06/20 |
Duration in years1 | 2.3 | 1.6 |
- bn
+0.6bn in Q2
2.2 | 2.3 | 2.9 |
0.9 | ||
30/06/19 31/12/19 31/03/20 30/06/20 |
Non-ITGovies at AC | Non-ITGovies at FVOCI | ||||||||||||||||||||||||||
€ bn | -€0.3bn in Q2 | € bn | |||||||||||||||||||||||||
5.4 | 5.7 | 6.5 | 6.2 | ||||||||||||||||||||||||
4.5 | 4.4 | 4.8 | 4.8 | ||||||||||||||||||||||||
30/06/19 31/12/19 31/03/20 30/06/20 | 30/06/19 31/12/19 31/03/20 30/06/20 | ||||||||||||||||||||||||||
Duration in years1 | 2.4 | 2.4 | Duration in years1 | 4.3 | 3.1 |
Non-ITGovies at FVTPL
- bn
+€0.2bn in Q2
0.6 | 0.7 | 0.4 |
0.2 | ||
30/06/19 31/12/19 31/03/20 30/06/20 |
Notes: 1. Management data, including hedging strategies. | 2. Key H1 2020 Performance Highlights | 24 |
OPERATING COSTS: QUARTERLY COMPARISON
Total Operating Costs | Quarterly average costs in 2017-20201 | |||||||||||||||||||||||||||||||||||||||||||
€ m | ||||||||||||||||||||||||||||||||||||||||||||
€ m | -3.3% | 735.1 | 676.6 | 649.9 | ||||||||||||||||||||||||||||||||||||||||
623.3 | ||||||||||||||||||||||||||||||||||||||||||||
635.0 | 613.8 | |||||||||||||||||||||||||||||||||||||||||||
FY 17 | FY 18 | FY 19 | H1 20 | |||||||||||||||||||||||||||||||||||||||||
Q1 20 | Q2 20 | Avg. Q | Avg. Q | Avg. Q | Avg. Q | |||||||||||||||||||||||||||||||||||||||
o/w: Staff costs | o/w: Other admin. costs | o/w: D&A | ||||||||||||||||||||||||||||||||||||||||||
€ m | -5.0% | € m | c.+€5m | € m | ||||||||||||||||||||||||||||||||||||||||
-0.3% | Covid 19- | +0.5% | ||||||||||||||||||||||||||||||||||||||||||
419.0 | 397.9 | related | 61.7 | |||||||||||||||||||||||||||||||||||||||||
154.6 | 154.1 | 61.4 | ||||||||||||||||||||||||||||||||||||||||||
Q1 20 | Q2 20 | Q1 20 | Q2 20 | Q1 20 | Q2 20 |
Note: 1. Net of non recurring items and, for 2017 and 2018, net also of PPA to ensure a homogeneous comparison.
2. Key H1 2020 Performance Highlights 25
STRONG IMPROVEMENT ACROSS ASSET QUALITY METRICS
Reduction in NPE stock and ratios, with strong coverage confirmed
NPE Stock (GBV) | NPE Stock (NBV) | ||||||||||||||
€ bn 10.7 | 10.1 | 9.9 | 9.8 | -8.0% Y/Y | € bn | 6.2 | 5.5 | 5.4 | 5.4 | -12.8% Y/Y | |||||
0.11 | 0.10 | 0.11 | 0.15 | -0.4% in Q2 | -0.6% in Q2 | ||||||||||
0.09 | 0.07 | 0.08 | 0.11 | ||||||||||||
7.3 | 6.4 | 6.3 | 6.2 | 4.7 | |||||||||||
3.9 | 3.8 | 3.7 | |||||||||||||
3.3 | |||||||||||||||
3.6 | 3.5 | 3.5 | 1.4 | 1.6 | 1.6 | 1.5 | |||||||||
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | ||||||||
Bad Loans | UTP | PD | Bad Loans | UTP | PD | ||||||||||
9.6% | 9.1% | 8.8% | 8.7% | 31/12/19 | 31/03/20 | 30/06/20 | 63.0% | ||||||||
incl. | |||||||||||||||
TOTAL NPE | 5.8% | 5.2% | 5.0% | 5.0% | BAD LOAN COVERAGE | 56.2% | 55.3% | 56.1% | |||||||
write-offs | |||||||||||||||
RATIOS | |||||||||||||||
UTP COVERAGE | 39.1% | 39.6% | 39.3% | ||||||||||||
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | ||||||||||||
PD COVERAGE | 25.9% | 23.7% | 25.6% | ||||||||||||
3.0% | 3.2% | 3.1% | 3.1% | ||||||||||||
1.5% | 1.5% | 48.6% | |||||||||||||
BAD LOAN | 1.3% | 1.4% | TOTAL NPE COVERAGE | 45.0% | 45.0% | 45.1% | |||||||||
incl. | |||||||||||||||
RATIOS | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | % of Secured NPE | 61% | 60% | 60% | write-offs | ||||||
on Total NPE (GBV) | |||||||||||||||
Gross | Net | ||||||||||||||
Note: Data as at 30/06/19 are adjusted for the reclassification of the | 2. Key H1 2020 Performance Highlights | 26 | |||||||||||||
Profamily non-Captive loan portfolio (see Methodological Notes). | |||||||||||||||
FLOWS & MIGRATION RATES
MIGRATION RATES | 31/12/19 | 30/06/20 | ||
(annualised) | ||||
DEFAULT RATE | ||||
1.2% | 1.1% | |||
(from Performing Loans1 to NPEs) | ||||
NPE DANGER RATE | 11.1% | 8.1% | ||
(from UTP to Bad Loans) | ||||
CURE RATE | 5.1% | 3.7% | ||
(from UTP to Performing Loans1) | ||||
- H1 2020 shows a slight improvement in the Default rate as well as a better Danger rate vs. FY 2019
- The challenging macroeconomic scenario in Q2 2020 impacted mainly the outflows to performing loans
Inflows to NPEs | Outflows to Perf. Loans | ||||||||||||||||||||||||||
€ m | € m | ||||||||||||||||||||||||||
650 | 569 | ||||||||||||||||||||||||||
261 | 308 | 201 | 125 | 81 | |||||||||||||||||||||||
43 | |||||||||||||||||||||||||||
H1 19 | H1 20 | Q1 20 | Q2 20 | H1 19 | H1 20 | Q1 20 | Q2 20 |
Note: 1. Total Performing loans to customers, including also the Senior
Notes of the two GACS transactions (Exodus and ACE).
Flows from UTP to Bad Loans
- m
505
261 | 178 | |||||||||
83 | ||||||||||
H1 19 | H1 20 | Q1 20 Q2 20 |
2. Key H1 2020 Performance Highlights 27
COST OF RISK
LLPs: quarterly evolution
- m
213.2 | 263.0 | Covid 19- | |||||||||||
208.4 | 220.5 | related top-up | |||||||||||
197.7 | |||||||||||||
152.0 | 70 | 70 | in generic | ||||||||||
provisions1 | |||||||||||||
143.2 | 193.0 | ||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q1 20 | Q2 20 |
- LLPs at €476.2m in H1 2020 include €140m of a Covid-19-related top- up in generic provisions
- Annualised CoR at 88 bps, with a physiological level of 62 bps
Cost of Risk2
Annualised, in bps (EoP)
Stated CoR | 66 | 73 | 88 |
Physiological CoR | 62 | ||
H1 2019 | FY 2019 | H1 2020 |
Note: 1. Impact of the macroeconomic crisis (Covid-19) on the ECL Assessment of Performing Loans. 2. CoR calculated including also loans classified at IFRS 5, for coherence with related LLPs.
2020 quarterly analysis
7997
53 | 71 |
Q1 2020 | Q2 2020 |
2. Key H1 2020 Performance Highlights 28
STRONG BRANCH PRESENCE IN REGIONS WITH LOWER NPE RATIO
Geographic data | Gross NPE ratio | Regional branch market shares | |||||||||||||||||||||||||||||||||||||||
Peer 1 | Peer 2 | Peer 3 | |||||||||||||||||||||||||||||||||||||||
# Regions | |||||||||||||||||||||||||||||||||||||||||
6 | 7 | >13% | 16.8% | 8.9% | 11.0% | 1.5% | |||||||||||||||||||||||||||||||||||
4.2% | |||||||||||||||||||||||||||||||||||||||||
11-13% | 6.3% | ||||||||||||||||||||||||||||||||||||||||
13.9% | 14.4% | ||||||||||||||||||||||||||||||||||||||||
9-11% | 3.8% | 7.2% | |||||||||||||||||||||||||||||||||||||||
12.6% | |||||||||||||||||||||||||||||||||||||||||
3 | 4 | 11.7% | |||||||||||||||||||||||||||||||||||||||
<9% | 7.4% | 10.4% | |||||||||||||||||||||||||||||||||||||||
15.2% | 10.2% | ||||||||||||||||||||||||||||||||||||||||
Avg. Italy | 14.7% | 11.1% | 6.7% | 7.5% | |||||||||||||||||||||||||||||||||||||
Supportive in safeguarding the Group's asset quality profile
Note: Italian regions have been divided into clusters according to ranges of NPE ratios, with a calculation based on loans to the private sector (excluding the public sector)
Source: Bankit as at 31/12/2019
2. Key H1 2020 Performance Highlights 29
COST OF RISK: HISTORICAL TREND ANALYSIS
Cost of Risk: evolution of key components | Flow-driven LLPs / Inflows (€ m) | |
€ m | 1,941 | 1,400 | ||||||
1,661 | 2 | 1,200 | ||||||
285 | Flow-driven | |||||||
293 | Disposals | Flow- | 1,000 | |||||
244 | 714 | 800 | ||||||
driven | FY18 | |||||||
Performing/ | 600 | |||||||
779 | LLPs | FY19 | ||||||
400 | ||||||||
Covid impact | ||||||||
215 24 | 476 | 200 | H120 | FY17 | ||||
1,197 | ||||||||
941 | Stock-driven | - | (Annualised) | |||||
140 | ||||||||
570 | 123 | 1,100 1,200 1,300 1,400 1,500 1,600 | ||||||
(73) | (31) | 213 | Flows to NPE | |||||
2017 | 2018 | 2019 | 30/06/2020 |
CoR | 154 | 184 | 73 | 88 | Stock-driven LLPs / BoP Stock (€ m) | ||||||||||||||||||||||
(bps) | |||||||||||||||||||||||||||
1,400 | FY17 | ||||||||||||||||||||||||||
Stock of gross NPEs: evolution1 | 1,200 | ||||||||||||||||||||||||||
Stock-1,000 | |||||||||||||||||||||||||||
€ bn | FY19 | ||||||||||||||||||||||||||
driven | 800 | FY18 | |||||||||||||||||||||||||
600 | |||||||||||||||||||||||||||
LLPs | |||||||||||||||||||||||||||
30.0 | 25.4 | 400 | H1 20 | ||||||||||||||||||||||||
11.8 | 10.1 | ||||||||||||||||||||||||||
200 | (Annualised) | ||||||||||||||||||||||||||
01/01/2017 | 01/01/2018 | 01/01/2019 | 01/01/2020 | - | |||||||||||||||||||||||
5,000 | 15,000 | 25,000 | 35,000 | ||||||||||||||||||||||||
Note: 1. Data at the beginning of the period, with NPE stock | Stock BoP | ||||||||||||||||||||||||||
2. Key H1 2020 Performance Highlights | 30 | ||||||||||||||||||||||||||
levels as driver of the Cost of Risk sustained during the period. | |||||||||||||||||||||||||||
STRONG CAPITAL RATIOS & BUFFERS
CET 1 ratios further strengthened: Well positioned to face the tough scenario
Fully Loaded Capital Ratios: evolution | Phase-In Ratios |
% | TOTAL | 15.6% | 16.1% | 16.3% | 17.9% | |||||
TIER 1 | 13.3% | 14.0% | 14.4% | 16.0% | ||||||
12.8 | 12.9 | -9bps | +40bps | +33bps | -26bps | +3bps | 13.3% | 14.7 | ||
CET 1 | ||||||||||
31/12/2019 | 31/03/2020 | Anima | FVOCI | SME | RWA and | Q2 Perf. | 30/06/2020 | 30/06/2020 | ||
(increase in | Reserves | supporting | Shortfall | & AT1 | Phased-in | |||||
stake from | factor | Dynamics | ||||||||
15.0% to 19.4%) |
Capital buffers1
Strong FL Capital buffers: 479bps on CET 1 ratio and 335bps on TCR (MDA buffer) |
Phased-in
Fully
Loaded
ON CET1 RATIO
(Min. requirement)
+633bps |
+479bps |
ON TC RATIO
(MDA Buffers)
+506bps |
+335bps |
Capital ratios in Q2 benefitted from the evolution in FVOCI reserves(+40 bps) and |
from the SME supporting factor(+33bps) |
Q2 saw -26bps mostly from a PD-driven increase in RWA, with only a marginal |
benefit from State guarantees perfected as of June (higher benefit to be |
registered in H2), partially offset by a reduction in the Shortfall on performing loans |
The combined effect of regulatory headwinds and tailwinds is expected to come |
in at about -35bps in H2 2020 |
Note: 1. Calculated with the application of the CRD V rules. | 2. Key H1 2020 Performance Highlights 31 |
FINAL REMARKS
Covid-19 emergency: evolution update
- Reassuring level of recovery in June 2020, as a return to full commercial capacity is well under way, flanked by a strengthened use of digital and omnichannel-based banking
- Strong and ongoing support provided to our customer base on the back of the various measures and guarantee schemes mitigating the impact of the adverse environment
H1 2020 performance
- Stated Net income at €105.2m (Adjusted at €128.4m), with pre-provision profit (excluding the FV on own liabilities) at €707.2m (€387.7m in Q2 and €319.5m in Q1), with a gradual but consistent recovery in commission income during Q2 2020 and with tight ongoing cost containment
- Prudent provisioning policy, with the inclusion of a €140m top-up in generic loan loss provisions, in the light of the impact expected from the worsening scenario: annualised total CoR at 88bps
- No deterioration in asset quality, with Net NPE and Net Bad Loan ratios at 5.0% and 1.4% (vs. 5.2% and 1.5% at year- end 2019), respectively, on the back of supportive migration dynamics (default rate at 1.1%)
- Robust capital position: CET 1 ratio Phased-in at 14.7% and 13.3% Fully Loaded
- Optimized capital structure, with strong MDA Bufferson total capital: +506bps Phased-In and +335bps Fully Loaded
- Solid liquidity position confirmed: LCR 193% & NSFR >100%
2. Key H1 2020 Performance Highlights 32
OUTLOOK 2020
NII CONFIRMED AT A STRONG LEVEL, thanks to a solid trend in commercial volumes and | |||
TOP LINE | |||
favourable funding conditions (incl. TLTRO III). The full benefit of TLTRO III is expected in H2 | |||
PERFORMANCE | |||
| FEES ON TRACK TOWARDS FULL POTENTIAL, based on GDP recovery expected in H2 2020 | ||
COST
MANAGEMENT | STRICT COST CONTROL allowing to achieve further efficiency improvements in H2 20 |
COST | | CONFIRMED OUTLOOK OF ~90/100 BPS |
OF RISK | ||
CAPITAL SOLID MDA BUFFER, well above strategic target of min. 250 bps
2. Key H1 2020 Performance Highlights 33
Agenda
1. | Covid-19: Update on Banco BPM's Response | 4 | |
2. | Key H1 2020 Performance Highlights | 11 | |
3. | Performance Details: | 34 | |
- | Profitability | 35 | |
- | Balance Sheet | 41 | |
- | Funding and Liquidity | 42 | |
- Customer Loans and Focus on Credit Quality | 46 | ||
- | Capital Position | 50 |
H1 2020 Group Results Presentation 34
RECLASSIFIED P&L: QUARTERLY EVOLUTION
Reclassified income statement | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Chg. Y/Y | Chg. Y/Y | Chg. Q/Q | Chg. Q/Q | |||||||
(in euro million) | % | % | |||||||||||||||
Net interest income | 499,2 | 512,1 | 495,8 | 474,0 | 474,1 | 479,5 | -32,6 | -6,4% | 5,4 | 1,1% | |||||||
Income (loss) from investments in associates | 36,8 | 32,6 | 28,0 | 33,9 | 22,3 | 48,0 | 15,4 | 47,2% | 25,8 | 115,7% | |||||||
carried at equity | |||||||||||||||||
Net interest, dividend and similar income | 535,9 | 544,7 | 523,8 | 507,9 | 496,4 | 527,5 | -17,2 | -3,2% | 31,2 | 6,3% | |||||||
Net fee and commission income | 434,5 | 453,7 | 444,1 | 462,2 | 440,6 | 376,4 | -77,3 | -17,0% | -64,2 | -14,6% | |||||||
Other net operating income | 24,2 | 17,9 | 17,8 | 16,1 | 16,7 | 14,9 | -3,1 | -17,1% | -1,9 | -11,3% | |||||||
Net financial result | 72,3 | 10,7 | 41,7 | 207,4 | 206,8 | -82,7 | -93,4 | n.m. | -289,5 | n.m. | |||||||
Other operating income | 531,0 | 482,3 | 503,5 | 685,7 | 664,1 | 308,5 | -173,8 | -36,0% | -355,6 | -53,5% | |||||||
Total income | 1.067,0 | 1.027,0 | 1.027,3 | 1.193,5 | 1.160,5 | 836,1 | -191,0 | -18,6% | -324,4 | -28,0% | |||||||
Personnel expenses | -425,9 | -418,0 | -415,6 | -437,1 | -419,0 | -398,0 | 20,0 | -4,8% | 21,1 | -5,0% | |||||||
Other administrative expenses | -167,0 | -163,1 | -158,6 | -149,8 | -154,6 | -154,1 | 9,0 | -5,5% | 0,5 | -0,3% | |||||||
Amortization and depreciation | -63,3 | -67,7 | -68,6 | -69,3 | -61,4 | -61,7 | 6,0 | -8,9% | -0,3 | 0,5% | |||||||
Operating costs | -656,2 | -648,9 | -642,8 | -656,1 | -635,0 | -613,8 | 35,1 | -5,4% | 21,2 | -3,3% | |||||||
Profit (loss) from operations | 410,8 | 378,2 | 384,4 | 537,4 | 525,5 | 222,3 | -155,9 | -41,2% | -303,2 | -57,7% | |||||||
Net adjustments on loans to customers | -152,0 | -197,7 | -208,4 | -220,5 | -213,2 | -263,0 | -65,3 | 33,0% | -49,8 | 23,3% | |||||||
Profit (loss) on FV measurement of tangible assets | -7,5 | -19,3 | -0,7 | -131,0 | -0,3 | -5,1 | 14,2 | -73,6% | -4,8 | n.m. | |||||||
Net adjustments on other financial assets | -4,0 | 4,0 | 4,1 | 1,6 | -4,7 | -3,7 | -7,7 | n.m. | 0,9 | -19,9% | |||||||
Net provisions for risks and charges | 4,4 | -10,1 | -2,7 | -62,6 | 2,2 | -9,8 | 0,3 | -2,9% | -12,0 | n.m. | |||||||
Profit (loss) on the disposal of equity and other | 0,2 | 336,6 | 0,0 | -3,6 | 0,1 | 0,1 | -336,5 | n.m. | 0,0 | 41,8% | |||||||
investments | |||||||||||||||||
Income (loss) before tax from continuing | 252,0 | 491,7 | 176,7 | 121,2 | 309,6 | -59,2 | -550,9 | n.m. | -368,8 | n.m. | |||||||
operations | |||||||||||||||||
Tax on income from continuing operations | -53,7 | -27,4 | -44,9 | -26,6 | -93,8 | 41,4 | 68,8 | n.m. | 135,2 | n.m. | |||||||
Systemic charges after tax | -41,6 | -15,2 | -31,5 | -4,5 | -57,5 | -18,2 | -2,9 | 19,2% | 39,3 | -68,4% | |||||||
Income (loss) attributable to minority interests | 1,2 | 3,2 | 1,8 | 9,2 | 0,0 | 1,5 | -1,7 | -52,3% | 1,6 | n.m. | |||||||
Net income (loss) gross of PPA | 157,9 | 452,3 | 102,1 | 99,4 | 158,2 | -34,4 | -486,7 | n.m. | -192,6 | n.m. | |||||||
Purchase Price Allocation after tax | -2,5 | -4,7 | -3,8 | -3,7 | -6,6 | -12,0 | -7,3 | n.m. | -5,4 | 82,2% | |||||||
Net income (loss) for the period | 155,4 | 447,6 | 98,2 | 95,8 | 151,6 | -46,4 | -494,0 | n.m. | -198,0 | n.m. | |||||||
3. Performance Details: Profitability 35
RECLASSIFIED P&L: ANNUAL COMPARISON
Reclassified income statement (in euro million)
Net interest income
Income (loss) from investments in associates
carried at equity
Net interest, dividend and similar income
Net fee and commission income
Other net operating income
Net financial result
Other operating income
Total income
Personnel expenses
Other administrative expenses
Amortization and depreciation
Operating costs
Profit (loss) from operations
Net adjustments on loans to customers
Profit (loss) on FV measurement of tangible assets
Net adjustments on other financial assets
Net provisions for risks and charges
Profit (loss) on the disposal of equity and other
investments
Income (loss) before tax from continuing operations
Tax on income from continuing operations
Systemic charges after tax
Income (loss) attributable to minority interests
Net income (loss) gross of PPA
Purchase Price Allocation after tax
Net income (loss) for the period
H1 2019 | H1 2020 | Chg. Y/Y | Chg. Y/Y | ||
% | |||||
1.011,3 | 953,6 | -57,7 | -5,7% | ||
69,4 | 70,3 | 0,9 | 1,3% | ||
1.080,7 | 1.023,9 | -56,8 | -5,3% | ||
888,2 | 816,9 | -71,3 | -8,0% | ||
42,1 | 31,6 | -10,5 | -25,0% | ||
83,0 | 124,1 | 41,0 | 49,4% | ||
1.013,3 | 972,6 | -40,7 | -4,0% | ||
2.094,0 | 1.996,5 | -97,5 | -4,7% | ||
-843,9 | -817,0 | 26,9 | -3,2% | ||
-330,2 | -308,7 | 21,5 | -6,5% | ||
-131,1 | -123,1 | 8,0 | -6,1% | ||
-1.305,1 | -1.248,7 | 56,3 | -4,3% | ||
788,9 | 747,8 | -41,2 | -5,2% | ||
-349,6 | -476,2 | -126,6 | 36,2% | ||
-26,8 | -5,4 | 21,4 | -79,8% | ||
0,0 | -8,4 | -8,4 | n.m. | ||
-5,7 | -7,6 | -1,9 | 34,0% | ||
336,8 | 0,2 | -336,6 | -99,9% | ||
743,7 | 250,4 | -493,3 | -66,3% | ||
-81,1 | -52,4 | 28,7 | -35,4% | ||
-56,9 | -75,7 | -18,8 | 33,1% | ||
4,5 | 1,5 | -3,0 | -66,3% | ||
610,1 | 123,8 | -486,4 | -79,7% | ||
-7,2 | -18,5 | -11,4 | n.m. | ||
603,0 | 105,2 | -497,8 | -82,5% |
3. Performance Details: Profitability 36
RESTATED P&L: ANNUAL AND QUARTERLY COMPARISON
…with restatement of FV on own liabilities into a separate line item (post-tax)
Reclassified income statement | H1 2019 | H1 2020 | Chg. Y/Y | Chg. Y/Y | Q1 2020 | Q2 2020 | Chg. Q/Q | Chg. Q/Q | |||||
(in euro million) | % | % | |||||||||||
Net interest income | 1.011,3 | 953,6 | -57,7 | -5,7% | 474,1 | 479,5 | 5,4 | 1,1% | |||||
Income (loss) from investments in associates | 69,4 | 70,3 | 0,9 | 1,3% | 22,3 | 48,0 | 25,8 | 115,7% | |||||
carried at equity | |||||||||||||
Net interest, dividend and similar income | 1.080,7 | 1.023,9 | -56,8 | -5,3% | 496,4 | 527,5 | 31,2 | 6,3% | |||||
Net fee and commission income | 888,2 | 816,9 | -71,3 | -8,0% | 440,6 | 376,4 | -64,2 | -14,6% | |||||
Other net operating income | 42,1 | 31,6 | -10,5 | -25,0% | 16,7 | 14,9 | -1,9 | -11,3% | |||||
Net financial result | 82,4 | 83,5 | 1,0 | 1,2% | 0,8 | 82,7 | 82,0 | n.m. | |||||
Other operating income | 1.012,7 | 932,0 | -80,7 | -8,0% | 458,1 | 473,9 | 15,9 | 3,5% | |||||
Total income | 2.093,4 | 1.955,9 | -137,5 | -6,6% | 954,4 | 1.001,5 | 47,0 | 4,9% | |||||
Personnel expenses | -843,9 | -817,0 | 26,9 | -3,2% | -419,0 | -398,0 | 21,1 | -5,0% | |||||
Other administrative expenses | -330,2 | -308,7 | 21,5 | -6,5% | -154,6 | -154,1 | 0,5 | -0,3% | |||||
Amortization and depreciation | -131,1 | -123,1 | 8,0 | -6,1% | -61,4 | -61,7 | -0,3 | 0,5% | |||||
Operating costs | -1.305,1 | -1.248,7 | 56,3 | -4,3% | -635,0 | -613,8 | 21,2 | -3,3% | |||||
Profit (loss) from operations | 788,4 | 707,2 | -81,2 | -10,3% | 319,5 | 387,7 | 68,3 | 21,4% | |||||
Net adjustments on loans to customers | -349,6 | -476,2 | -126,6 | 36,2% | -213,2 | -263,0 | -49,8 | 23,3% | |||||
Profit (loss) on FV measurement of tangible assets | -26,8 | -5,4 | 21,4 | -79,8% | -0,3 | -5,0 | -4,7 | n.m. | |||||
Net adjustments on other financial assets | 0,0 | -8,4 | -8,4 | n.m. | -4,7 | -3,7 | 0,9 | -19,9% | |||||
Net provisions for risks and charges | -5,7 | -7,6 | -1,9 | 34,0% | 2,2 | -9,8 | -12,0 | n.m. | |||||
Profit (loss) on the disposal of equity and other | 336,8 | 0,2 | -336,6 | -99,9% | 0,1 | 0,1 | 0,0 | 41,8% | |||||
investments | |||||||||||||
Income (loss) before tax from continuing | 743,1 | 209,8 | -533,3 | -71,8% | 103,5 | 106,3 | 2,7 | 2,6% | |||||
operations | |||||||||||||
Tax on income from continuing operations | -80,9 | -39,0 | 41,9 | -51,8% | -25,7 | -13,3 | 12,4 | -48,3% | |||||
Systemic charges after tax | -56,9 | -75,7 | -18,8 | 33,1% | -57,5 | -18,2 | 39,3 | -68,4% | |||||
Income (loss) attributable to minority interests | 4,5 | 1,5 | -3,0 | -66,3% | 0,0 | 1,5 | 1,6 | n.m. | |||||
Net income (loss) gross of PPA and net of valuation | 609,7 | 96,6 | -513,2 | -84,2% | 20,3 | 76,3 | 56,1 | n.m. | |||||
effect on own liabilities | |||||||||||||
Purchase Price Allocation after tax | -7,2 | -18,5 | -11,4 | n.m. | -6,7 | -12,0 | -5,3 | 79,7% | |||||
Fair value on own liabilities after Taxes | 0,4 | 27,2 | 26,8 | n.m. | 137,9 | -110,7 | -248,7 | n.m. | |||||
Net income (loss) for the period | 603,0 | 105,2 | -497,8 | -82,5% | 151,5 | -46,4 | -197,9 | n.m. |
3. Performance Details: Profitability 37
ADJUSTED P&L: ANNUAL COMPARISON
…with restatement of FV on own liabilities into a separate line item (post-tax)
Reclassified income statement | H1 2019 | H1 2020 | Chg. Y/Y | Chg. Y/Y | |||
(in euro million) | adjusted | adjusted | % | ||||
Net interest income | 1.011,3 | 953,6 | 57,7 | -5,7% | |||
Income (loss) from investments in associates | 69,4 | 70,3 | -0,9 | 1,3% | |||
carried at equity | |||||||
Net interest, dividend and similar income | 1.080,7 | 1.023,9 | 56,8 | -5,3% | |||
Net fee and commission income | 888,2 | 816,9 | 71,3 | -8,0% | |||
Other net operating income | 42,1 | 31,6 | 10,5 | -25,0% | |||
Net financial result | 82,4 | 83,5 | -1,0 | 1,2% | |||
Other operating income | 1.012,7 | 932,0 | 80,7 | -8,0% | |||
Total income | 2.093,4 | 1.955,9 | 137,5 | -6,6% | |||
Personnel expenses | -843,9 | -817,0 | -26,9 | -3,2% | |||
Other administrative expenses | -330,2 | -308,7 | -21,5 | -6,5% | |||
Amortization and depreciation | -130,4 | -121,0 | -9,4 | -7,2% | |||
Operating costs | -1.304,4 | -1.246,6 | -57,8 | -4,4% | |||
Profit (loss) from operations | 789,0 | 709,3 | 79,7 | -10,1% | |||
Net adjustments on loans to customers | -349,6 | -476,2 | 126,6 | 36,2% | |||
Profit (loss) on FV measurement of tangible assets | 0,0 | 0,0 | 0,0 | - | |||
Net adjustments on other financial assets | 0,0 | -8,4 | 8,4 | n.m. | |||
Net provisions for risks and charges | 9,6 | -7,6 | 17,2 | -179,0% | |||
Profit (loss) on the disposal of equity and other | 0,0 | 0,0 | - | ||||
investments | |||||||
Income (loss) before tax from continuing | 449,0 | 217,1 | 232,0 | -51,7% | |||
operations | |||||||
Tax on income from continuing operations | -103,8 | -41,1 | -62,7 | -60,4% | |||
Systemic charges after tax | -41,6 | -57,5 | 15,9 | 38,2% | |||
Income (loss) attributable to minority interests | 3,9 | 1,3 | 2,7 | -67,9% | |||
Net income (loss) gross of PPA and net of valuation | 307,6 | 119,7 | 187,9 | -61,1% | |||
effect on own liabilities | |||||||
Purchase Price Allocation after tax | -7,2 | -18,5 | 11,4 | n.m. | |||
Fair value on own liabilities after Taxes | 0,4 | 27,2 | -26,8 | n.m. | |||
Net income (loss) for the period | 300,8 | 128,4 | 172,4 | -57,3% |
3. Performance Details: Profitability 38
ADJUSTED P&L: DETAILS ON NON-RECURRING ITEMS
...with restatement of FV on own liabilities into a separate line item (post-tax)
Reclassified income statement | H1 2020 | H1 2020 | One-off | |||
adjusted | ||||||
(in euro million) | ||||||
Net interest income | 953,6 | 953,6 | 0,0 | |||
Income (loss) from investments in associates | 70,3 | 70,3 | 0,0 | |||
carried at equity | ||||||
Net interest, dividend and similar income | 1.023,9 | 1.023,9 | 0,0 | |||
Net fee and commission income | 816,9 | 816,9 | 0,0 | |||
Other net operating income | 31,6 | 31,6 | 0,0 | |||
Net financial result | 83,5 | 83,5 | 0,0 | |||
Other operating income | 932,0 | 932,0 | 0,0 | |||
Total income | 1.955,9 | 1.955,9 | 0,0 | |||
Personnel expenses | -817,0 | -817,0 | 0,0 | |||
Other administrative expenses | -308,7 | -308,7 | 0,0 | |||
Amortization and depreciation | -123,1 | -121,0 | -2,1 | |||
Operating costs | -1.248,7 | -1.246,6 | -2,1 | |||
Profit (loss) from operations | 707,2 | 709,3 | -2,1 | |||
Net adjustments on loans to customers | -476,2 | -476,2 | 0,0 | |||
Profit (loss) on FV measurement of tangible assets | -5,4 | 0,0 | -5,4 |
Non-recurring items and extraordinary systemic charges
Adjustments on intangible assets
Application of the new valuation model on properties and artworks
Net adjustments on other financial assets
Net provisions for risks and charges
Profit (loss) on the disposal of equity and other investments
Income (loss) before tax from continuing operations
Tax on income from continuing operations
Systemic charges after tax
Income (loss) attributable to minority interests
Net income (loss) gross of PPA and net of valuation effect on own liabilities
Purchase Price Allocation after tax
Fair value on own liabilities after Taxes
Net income (loss) for the period
-8,4 | -8,4 | 0,0 | ||||
-7,6 | -7,6 | 0,0 | ||||
0,2 | 0,2 | Real Estate gains | ||||
209,8 | 217,1 | -7,3 | ||||
-39,0 | -41,1 | 2,1 | Extraordinary positive fiscal items | |||
-75,7 | -57,5 | -18,2 | Additional contribution to Italian resolution fund | |||
1,5 | 1,3 | 0,2 | Other | |||
96,6 | 119,7 | -23,1 | ||||
-18,5 | -18,5 | 0,0 | ||||
27,2 | 27,2 | 0,0 | ||||
105,2 | 128,4 | -23,2 |
3. Performance Details: Profitability 39
COMPREHENSIVE PROFITABILITY
- m
- P&L NET INCOME
- OTHER NET INCOME DIRECTLY ACCOUNTED TO EQUITY
o/w Tangible assets at Fair Value
o/w Reserves of Debt Securities at FVOCI (net of tax)
o/w Reserves of Equity Securities at FVOCI (net of tax)
Q1 2019 | Q2 2019 | Q1 2020 | Q2 2020 | H1 2019 | H1 2020 | |
155.4 | 447.6 | 151.6 | -46.4 | 603.0 | 105.2 | |
110.5 | 13.5 | -289.7 | 151.1 | 124.0 | -138.7 | |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
91.5 | 64.3 | -180.1 | 154.3 | 155.8 | -25.7 | |
19.5 | -31.9 | -114.9 | -5.4 | -12.3 | -120.3 | |
H1 2019 Net Income | |
includes | the capital |
gains from the sale of | |
Profamily Captive and | |
from the JV on the NPL | |
platform | (€326.2m |
post-tax) | |
H1 2020 Net Income | |
includes a Covid-19- | |
related top-up in | |
generic | provisions |
A.+B. | COMPREHENSIVE NET INCOME | 265.9 461.1 | -138.1 | 104.7 | 727.0 | -33.4 |
OF THE GROUP |
(€93.7m post-tax) |
3. Performance Details: Profitability 40
RECLASSIFIED BALANCE SHEET AS AT 30/06/2020
Reclassified assets (€ m) | Restated | Chg. y/y | Chg. YTD | Chg. in Q2 | |||||||||
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | Value | % | Value | % | Value | % | ||||
Cash and cash equivalents | 795 | 913 | 755 | 838 | 44 | 5.5% | -74 | -8.1% | 83 | 11.0% | |||
Loans and advances measured at AC | 112,408 | 115,890 | 116,021 | 121,213 | 8,805 | 7.8% | 5,323 | 4.6% | 5,192 | 4.5% | |||
- Loans and advances to banks | 7,308 | 10,044 | 8,004 | 12,825 | 5,516 | 75.5% | 2,780 | 27.7% | 4,821 | 60.2% | |||
- Loans and advances to customers (*) | 105,100 | 105,845 | 108,018 | 108,389 | 3,289 | 3.1% | 2,543 | 2.4% | 371 | 0.3% | |||
Other financial assets | 39,184 | 37,069 | 39,485 | 43,885 | 4,701 | 12.0% | 6,816 | 18.4% | 4,401 | 11.1% | |||
- Assets measured at FV through PL | 7,496 | 7,285 | 7,301 | 9,075 | 1,579 | 21.1% | 1,790 | 24.6% | 1,774 | 24.3% | |||
- Assets measured at FV through OCI | 13,764 | 12,527 | 13,206 | 13,112 | -652 | -4.7% | 585 | 4.7% | -94 | -0.7% | |||
- Assets measured at AC | 17,925 | 17,257 | 18,978 | 21,698 | 3,774 | 21.1% | 4,441 | 25.7% | 2,721 | 14.3% | |||
Equity investments | 1,320 | 1,386 | 1,329 | 1,577 | 257 | 19.5% | 191 | 13.8% | 248 | 18.7% | |||
Property and equipment | 3,527 | 3,624 | 3,585 | 3,522 | -5 | -0.1% | -102 | -2.8% | -63 | -1.7% | |||
Intangible assets | 1,261 | 1,269 | 1,270 | 1,261 | 0 | 0.0% | -9 | -0.7% | -9 | -0.7% | |||
Tax assets | 4,876 | 4,620 | 4,698 | 4,628 | -248 | -5.1% | 9 | 0.2% | -69 | -1.5% | |||
Non-current assets held for sale and discont. operations | 1,545 | 131 | 139 | 105 | -1,440 | -93.2% | -26 | -19.7% | -33 | -24.1% | |||
Other assets | 2,920 | 2,136 | 2,057 | 2,385 | -535 | -18.3% | 249 | 11.7% | 327 | 15.9% | |||
Total | 167,837 | 167,038 | 169,339 | 179,415 | 11,579 | 6.9% | 12,377 | 7.4% | 10,077 | 6.0% | |||
Reclassified liabilities (€ m) | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | Value | % | Value | % | Value | % | |||
Due to banks | 31,189 | 28,516 | 21,873 | 32,930 | 1,741 | 5.6% | 4,414 | 15.5% | 11,056 | 50.5% | |||
Direct Funding | 110,185 | 109,506 | 111,660 | 115,234 | 5,048 | 4.6% | 5,727 | 5.2% | 3,574 | 3.2% | |||
- Due from customers | 95,698 | 93,375 | 95,018 | 98,769 | 3,072 | 3.2% | 5,394 | 5.8% | 3,751 | 3.9% | |||
- Debt securities and financial liabilities desig. at FV | 14,487 | 16,131 | 16,641 | 16,464 | 1,977 | 13.6% | 333 | 2.1% | -177 | -1.1% | |||
Debts for Leasing | 782 | 733 | 707 | 682 | -100 | -12.7% | -51 | -6.9% | -25 | -3.5% | |||
Other financial liabilities designated at FV | 8,104 | 10,919 | 16,900 | 11,499 | 3,395 | 41.9% | 579 | 5.3% | -5,401 | -32.0% | |||
Liability provisions | 1,552 | 1,487 | 1,417 | 1,278 | -274 | -17.7% | -209 | -14.1% | -140 | -9.8% | |||
Tax liabilities | 503 | 619 | 669 | 612 | 108 | 21.6% | -8 | -1.2% | -58 | -8.6% | |||
Liabilities associated with assets held for sale | 40 | 5 | 5 | 4 | -36 | -89.4% | -1 | -17.3% | -1 | -13.7% | |||
Other liabilities | 4,174 | 3,366 | 3,965 | 4,942 | 769 | 18.4% | 1,576 | 46.8% | 977 | 24.6% | |||
Minority interests | 39 | 26 | 26 | 25 | -14 | -36.3% | -2 | -5.8% | -2 | -5.9% | |||
Shareholders' equity | 11,270 | 11,861 | 12,116 | 12,211 | 941 | 8.3% | 350 | 2.9% | 95 | 0.8% | |||
Total | 167,837 | 167,038 | 169,339 | 179,415 | 11,579 | 6.9% | 12,377 | 7.4% | 10,077 | 6.0% | |||
Note: * "Customer loans" include the Senior Notes of the two GACS transactions and, as at 30/06/19, excludeProfamily non-captive portfolio classified as discontinued operations (see Methoodological Notes).
30/06/2019 data are restated for the incorporation of the effects due to the change 3. Performance Details: Balance Sheet 41
of the valuation criteria applied to the Group's properties and artworks starting from 31/12/2019.
DIRECT FUNDING
Solid position confirmed in core deposits, which account for 80% of the total Direct customer funding1 (withoutRepos)
€ bn | +8.8% |
+2.7% |
Capital-protected Certificates | 105.2 | 108.9 | 111.5 | 114.4 | |||||||||||
3.0 | 1.8 | 3.1 | |||||||||||||
2.0 | 3.3 | 1.8 | 3.2 | 1.7 | |||||||||||
16.4 | |||||||||||||||
Other | 14.4 | 16.1 | 16.6 | 1.7 | |||||||||||
Bonds | 1.8 | 1.6 | 1.6 | ||||||||||||
Time deposits | 83.8 | 86.2 | 88.6 | 91.4 | |||||||||||
C/A & Sight deposits | (79.7%) | (79.25%) | (79.5%) | (80.0%) | |||||||||||
(%) Share of total | |||||||||||||||
30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 | ||||||||||||
CHANGE | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | In % Y/Y | In % YTD | In % Q1 | ||||||||
C/A & Sight deposits | 83.8 | 86.2 | 88.6 | 91.4 | 9.1% | 6.1% | 3.1% | ||||||||
Time deposits | 1.8 | 1.63 | 1.56 | 1.66 | -9.7% | 2.1% | 6.6% | ||||||||
Bonds | 14.4 | 16.1 | 16.6 | 16.4 | 14.1% | 2.2% | -1.0% | ||||||||
Other | 2.0 | 1.8 | 1.7 | 1.8 | -5.5% | 2.3% | 8.3% | ||||||||
Capital-protected Certificates | 3.3 | 3.2 | 3.0 | 3.1 | -4.2% | -3.4% | 3.7% | ||||||||
Direct Funding (excl. Repos) | 105.2 | 108.9 | 111.5 | 114.4 | 8.8% | 5.1% | 2.7% | ||||||||
Note:
1. Direct funding restated according to a management logic: it includes capital-protected certificates, recognized essentially under 'Held-for- trading liabilities', while it does not include Repos (€3.9bn at June 2020 vs. €8.2bn at June 2019), mainly transactions with Cassa di Compensazione e Garanzia.
3. Performance Details: Funding and Liquidity 42
BOND MATURITIES: LIMITED AND MANAGEABLE AMOUNTS
Institutional bond maturities | Retail bond maturities | |||||||||||||||||||||||||||||
€ bn | € bn | |||||||||||||||||||||||||||||
3.75 | 0.50 | |||||||||||||||||||||||||||||
2.41 | 2.43 | 2.50 | ||||||||||||||||||||||||||||
0.71 | 0.45 | |||||||||||||||||||||||||||||
0.14 | ||||||||||||||||||||||||||||||
0.77 | ||||||||||||||||||||||||||||||
1.70 | 0.11 | 0.01 | ||||||||||||||||||||||||||||
1.21 | 1.25 | |||||||||||||||||||||||||||||
0,03 | ||||||||||||||||||||||||||||||
H2 2020 | FY 2021 | FY 2022 | H2 2020 | FY 2021 | FY 2022 | |||||||||||||||||||||||||
Senior | Subordinated | Covered bond 1 | Senior | Subordinated | ||||||||||||||||||||||||||
Aggregate senior & | Aggregate senior & | |||||||||||||||||||||||||||||
subordinated in the period | subordinated in the period | |||||||||||||||||||||||||||||
2020-2022: €5.6bn | 2020-2022: €0.7bn |
Managerial data based on nominal amounts, including calls.
Note: 1. Include also the maturities of Repos with underlying retained Covered Bonds: €0.45bn in 2021 and €0.50bn in 2022
3. Performance Details: Funding and Liquidity 43
INDIRECT CUSTOMER FUNDING AT €88.4BN
Assets under Management | ||||
€ bn | +2.1% | |||
56.7 | 58.3 | +7.0% | 57.8 | |
54.1 | ||||
4.1 | 3.9 | 3.8 | 4.0 | |
14.8 | 15.4 | 15.3 | 15.1 | |
37.7 | 39.0 | 35.0 | 38.8 | |
30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 |
Funds & Sicav Bancassurance Managed Accounts and Funds of Funds
Assets under Custody1
- bn
-6.5%
+8.6%
32.7 | 31.4 | 28.1 | 30.5 |
30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 |
- Total Indirect Customer Funding at €88.4bn, slightly below the level as at 30 June 2019 (-1.1%), entirely due to the market effect, but with a strong recovery registered in Q2 thanks to volume effect (+€1.8bn) and market effect (+€4.4bn)
- AUM shows resilience also on an annual basis, driven by Q2 performance. Positive volume effect both y/y (€+1.7bn) and in Q2 (+€1.4bn).
- AUC decrease by 6.5% y/y, mainly driven by volume effect (-€1.6bn), with a recovery in Q2.
Management data of the commercial network. AUC historic data restated for managerial adjustments.
Note: 1. AuC data are net of capital-protected certificates, as they have been regrouped under Direct Funding (see slide 42).
3. Performance Details: Funding and Liquidity 44
SECURITIES PORTFOLIO
€ bn
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | Chg. y/y | Chg. YTD | Chg. in Q2 | |
Debt securities | 34.5 | 31.2 | 34.5 | 38.3 | 10.9% | 22.6% | 10.9% |
- o/w Total Govies | 29.9 | 26.4 | 29.6 | 33.1 | 10.7% | 25.2% | 11.7% |
- o/w: Italian Govies | 19.4 | 15.5 | 18.2 | 21.7 | 11.9% | 39.9% | 19.6% |
IT Govies in % on Debt Securities | 56.2% | 49.7% | 52.6% | 56.7% | |||
Equity securities, Open-end funds & Private equity | 2.3 | 2.5 | 1.7 | 1.6 | -32.6% | -38.2% | -7.3% |
TOTAL SECURITIES | 36.9 | 33.8 | 36.2 | 39.9 | 8.1% | 18.0% | 10.0% |
€ bn | |||||||||
30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | Chg. y/y | Chg. YTD | Chg. in Q2 | |||
Govies at FVOCI | 10.7 | 9.1 | 9.8 | 9.8 | -8.4% | 7.6% | -0.4% | ||
- Italian | 6.2 | 4.6 | 5.0 | 5.0 | -18.9% | 7.6% | -1.2% | ||
- Non Italian | 4.5 | 4.4 | 4.8 | 4.8 | 6.1% | 7.5% | 0.3% | ||
Govies at AC | 16.5 | 15.7 | 17.4 | 20.0 | 21.7% | 27.2% | 15.1% | ||
- Italian | 11.0 | 10.0 | 10.9 | 13.8 | 25.0% | 37.8% | 27.0% | ||
- Non Italian | 5.4 | 5.7 | 6.5 | 6.2 | 15.0% | 8.7% | -4.6% | ||
Govies at FVTPL | 2.8 | 1.6 | 2.4 | 3.3 | 18.3% | 104.3% | 36.7% | ||
- Italian | 2.2 | 0.9 | 2.3 | 2.9 | 32.7% | 232.9% | 30.5% | ||
- Non Italian | 0.6 | 0.7 | 0.2 | 0.4 | -36.0% | -49.3% | 116.6% | ||
3. Performance Details: Funding and Liquidity 45
NET CUSTOMER LOANS
Satisfactory increase in Performing Loans, with new loans granted at €12.4bn in H1 20201
Net Customer Loans2
€ bn | 106.5 | 105.8 | 108.0 | 108.4 | |||||||||||||||||||||
NPE | 6.2 | 5.5 | 5.4 | 5.4 | |||||||||||||||||||||
100.3 | 100.3 | 102.6 | 103.0 | ||||||||||||||||||||||
Performing Loans | |||||||||||||||||||||||||
30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 | ||||||||||||||||||||||
CHANGE | |||||||||||||||||||||||||
NET PERFORMING LOANS | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | In % y/y | In % YTD | In % q/q | ||||||||||||||||||
Core customer loans | 91.2 | 91.1 | 94.0 | 95.0 | 4.1% | 4.3% | 1.1% | ||||||||||||||||||
- Medium/Long-Term loans | 61.2 | 62.5 | 64.4 | 67.1 | 9.6% | 7.3% | 4.3% | Net Performing loans in Stage 2 | |||||||||||||||||
- Current Accounts | 10.7 | 10.5 | 10.4 | 9.4 | -11.5% | -10.0% | -9.5% | at €6.6bn as at 30/06/20 | |||||||||||||||||
- Other loans | 17.4 | 16.1 | 17.3 | 16.6 | -4.4% | 3.2% | -4.0% | ||||||||||||||||||
(€5.7bn as at 31/12/19), with a | |||||||||||||||||||||||||
- Cards & Personal Loans | 2.0 | 2.0 | 1.8 | 1.8 | -5.8% | -7.6% | 0.0% | ||||||||||||||||||
coverage of 3.8% (3.5% as at | |||||||||||||||||||||||||
Leasing | 1.0 | 1.0 | 0.9 | 0.9 | -12.4% | -5.0% | -1.5% | ||||||||||||||||||
31/12/19) | |||||||||||||||||||||||||
Repos | 5.2 | 5.7 | 5.3 | 4.7 | -9.4% | -17.4% | -10.0% | ||||||||||||||||||
GACS Senior Notes | 2.8 | 2.5 | 2.4 | 2.3 | -16.1% | -6.5% | -4.1% | ||||||||||||||||||
Total Net Performing Loans | 100.3 | 100.3 | 102.6 | 103.0 | 2.7% | 2.7% | 0.4% |
Notes: 1. Management data. See slide 18 for details. 2. Loans and advances to customers at Amortized Cost, including also the GACS senior notes (Exodus since June 2018 and, moreover, ACE since March 2019).
Data as at 30/06/19 are adjusted for the reclassification of the Profamily non-Captive loan portfolio (see Methodological Notes).
3. Performance Details: Customer Loans and Focus on Credit Quality 46
ASSET QUALITY DETAILS
GROSS EXPOSURES | 30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 | Chg. y/y | Chg. YTD | Chg. in Q2 | |||
€/m and % | Incl. Profamily | Value | % | Value | % | Value | % | |||
Bad Loans | 3,338 | 3,565 | 3,517 | 3,530 | 192 | 5.8% | -34 | -1.0% | 13 | 0.4% |
UTP | 7,257 | 6,424 | 6,252 | 6,159 | -1,098 | -15.1% | -265 | -4.1% | -93 | -1.5% |
Past Due | 105 | 98 | 106 | 150 | 45 | 42.6% | 51 | 52.1% | 44 | 41.1% |
NPE | 10,700 | 10,087 | 9,875 | 9,839 | -861 | -8.0% | -248 | -2.5% | -36 | -0.4% |
Performing Loans | 100,648 | 100,631 | 102,962 | 103,431 | 2,783 | 2.8% | 2,800 | 2.8% | 469 | 0.5% |
TOTAL CUSTOMER LOANS | 111,348 | 110,718 | 112,837 | 113,269 | 1,921 | 1.7% | 2,552 | 2.3% | 432 | 0.4% |
NET EXPOSURES | 30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 | Chg. y/y | Chg. YTD | Chg. in Q2 | |||
€/m and % | Incl. Profamily | Value | % | Value | % | Value | % | |||
Bad Loans | 1,428 | 1,560 | 1,571 | 1,549 | 121 | 8.5% | -10 | -0.7% | -21 | -1.4% |
UTP | 4,681 | 3,912 | 3,778 | 3,739 | -942 | -20.1% | -173 | -4.4% | -39 | -1.0% |
Past Due | 85 | 73 | 81 | 111 | 26 | 30.8% | 38 | 52.7% | 30 | 37.5% |
NPE | 6,194 | 5,544 | 5,430 | 5,399 | -795 | -12.8% | -145 | -2.6% | -30 | -0.6% |
Performing Loans | 100,276 | 100,301 | 102,588 | 102,989 | 2,713 | 2.7% | 2,688 | 2.7% | 401 | 0.4% |
TOTAL CUSTOMER LOANS | 106,470 | 105,845 | 108,018 | 108,389 | 1,919 | 1.8% | 2,543 | 2.4% | 371 | 0.3% |
COVERAGE | 30/06/2019 | 31/12/2019 | 31/03/2020 | 30/06/2020 |
% | Incl. Profamily | |||
Bad Loans | 57.2% | 56.2% | 55.3% | 56.1% |
UTP | 35.5% | 39.1% | 39.6% | 39.3% |
Past Due | 18.9% | 25.9% | 23.7% | 25.6% |
NPE | 42.1% | 45.0% | 45.0% | 45.1% |
Performing Loans | 0.37% | 0.33% | 0.36% | 0.43% |
TOTAL CUSTOMER LOANS | 4.4% | 4.4% | 4.3% | 4.3% |
Data refer to Loans and advances to customers measured at Amortized Cost, including also the GACS Senior Notes.
Data as at 30/06/19 are adjusted for the reclassification of the Profamily non-Captive loan portfolio (see Methodological Notes).
3. Performance Details: Customer Loans and Focus on Credit Quality 47
IMPROVING TREND IN ASSET QUALITY
NPE, gross book value: -€1.7bn in 2019 and further -€0.3bn in H1 2020
- bn
11.8 | -0.6 | +1.2 | -2.3 | |||
10.1 | +0.6 | -0.9 | ||||
9.8 |
31/12/18 | Bad Loan | Inflows from | Cancellations, | 31/12/19 | Inflows from | Cancellations, | 30/06/20 |
portfolio disposals | Performing | Write-offs, | Performing | Write-offs, | |||
Recoveries, Cure & | Recoveries, Cure & | ||||||
Other | Other |
3. Performance Details: Customer Loans and Focus on Credit Quality 48
UTP LOANS: HIGH SHARE OF RESTRUCTURED AND SECURED POSITIONS
UTP analysis | Breakdown of Net UTPs |
€ bn | Unsecured | ||||
-4.1% YTD | Secured | ||||
6.4 | 6.2 | (%) | Composition | ||
2.5 | 2.4 | 2.4 | 3.7 | 1,0 | |
(39%) | (39%) | ||||
3.9 | (28%) | 2,7 | |||
3.8 | |||||
(61%) | |||||
(61%) | (72%) | ||||
GBV | GBV | Adjustments | NBV | Unsec. | Sec. |
31/12/19 | 30/06/20 | ||||
Coverage ratio: | 39.3% | 57.1% | 27.9% |
€ bn | 31/12/19 | 30/6/20 | ||
Restructured | 1.7 | 1.6 | ||
- Secured | 0.9 | 0.9 | ||
- Unsecured | 0.8 | 0.7 | ||
Other UTP | 2.2 | 2.1 | ||
- Secured | 1.9 | 1.8 | ||
- Unsecured | 0.3 | 0.3 | ||
3.9 | 3.7 | |||
o/w: | ||||
- North | 72.6% | 72.5% | ||
- Centre | 20.9% | 20.5% | ||
- South, Islands | 6.5% | 7.0% | ||
& not resident | ||||
% Chg. |
-5.9% |
0.0% |
-12.5% |
-4.5% |
-5.3% |
0.0% |
-5.1% |
UTP Coverage: +4.3 p.p. since YE 2018
35.0% 35.5%
39.1% 39.3%
Solid level of coverage for unsecured UTP: 57.1% | |
| Net unsecured UTP other than Restructured loans are |
limited to €0.3bn | |
| 93% of Net UTPs are located in the northern & central |
31/12/2018 30/06/2019 31/12/2019 30/06/2020
parts of Italy |
3. Performance Details: Customer Loans and Focus on Credit Quality 49
CAPITAL POSITION IN DETAIL
PHASED IN CAPITAL | 30/06/19 31/12/19 31/03/20 30/06/20 | |||
POSITION (€/m and %) | ||||
CET 1 Capital | 8.972 | 9.586 | 9.449 | 9.585 |
T1 Capital | 9.404 | 10.017 | 10.253 | 10.388 |
Total Capital | 10.765 | 11.542 | 11.636 | 11.676 |
RWA | 65.236 | 65.841 | 65.435 | 65.090 |
CET 1 Ratio | 13,75% | 14,56% | 14,44% | 14,73% |
AT1 | 0,66% | 0,66% | 1,23% | 1,23% |
T1 Ratio | 14,42% | 15,21% | 15,67% | 15,96% |
Tier 2 | 2,09% | 2,32% | 2,11% | 1,98% |
Total Capital Ratio | 16,50% | 17,53% | 17,78% | 17,94% |
FULLY PHASED CAPITAL | 30/06/19 31/12/19 31/03/20 | 30/06/20 | ||||||||
POSITION (€/m and %) | ||||||||||
CET 1 Capital | 7.742 | 8.453 | 8.423 | 8.692 | ||||||
T1 Capital | 8.044 | 8.754 | 9.122 | 9.390 | ||||||
Total Capital | 9.404 | 10.280 | 10.506 | 10.679 | ||||||
RWA | 64.968 | 65.856 | 65.353 | 65.317 | ||||||
CET 1 Ratio | 11,92% | 12,84% | 12,89% | 13,31% | ||||||
AT1 | 0,46% | 0,46% | 1,07% | 1,07% | ||||||
T1 Ratio | 12,38% | 13,29% | 13,96% | 14,38% | ||||||
Tier 2 | 2,09% | 2,32% | 2,12% | 1,97% | ||||||
Total Capital Ratio | 14,48% | 15,61% | 16,08% | 16,35% |
RWA COMPOSITION | 30/06/19 | 31/12/19 | 31/03/20 | 30/06/20 | |
(€/bn) | |||||
CREDIT & COUNTERPARTY | 57,2 | 57,7 | 56,9 | 56,9 | |
RISK | |||||
of which: Standard | 30,1 | 29,3 | 29,1 | 29,1 | |
MARKET RISK | 2,1 | 1,9 | 2,3 | 2,0 | |
OPERATIONAL RISK | 5,7 | 6,0 | |||
6,0 | 6,0 | ||||
CVA | 0,2 | 0,2 | |||
0,2 | 0,2 | ||||
TOTAL | 65,2 | 65,8 | 65,4 | 65,1 | |
RWA COMPOSITION | 30/06/20 | 31/12/19 | 31/03/20 | 30/06/20 | |
(€/bn) | |||||
CREDIT & COUNTERPARTY | 57,0 | 57,7 | 56,9 | 57,1 | |
RISK | |||||
of which: Standard | 29,9 | 29,3 | 29,1 | 29,3 | |
MARKET RISK | 2,1 | 1,9 | 2,3 | 2,0 | |
OPERATIONAL RISK | 5,7 | 6,0 | |||
6,0 | 6,0 | ||||
CVA | 0,2 | 0,2 | |||
0,2 | 0,2 | ||||
TOTAL | 65,0 | 65,8 | 65,4 | 65,3 | |
Ratios as at 31/03/2019 and 31/03/2020 include also the Net Income of the pertinent quarter.
3. Performance Details: Capital Position 50
CONTACTS FOR INVESTORS AND FINANCIAL ANALYSTS
I N V E S T O R R E L A T I O N S
Roberto Peronaglio | +39-02-9477.2090 |
Tom Lucassen | +39-045-867.5537 |
Arne Riscassi | +39-02-9477.2091 |
Silvia Leoni | +39-045-867.5613 |
Carmine Padulese | +39-02-9477.2092 |
Registered Offices: Piazza Meda 4, I-20121 Milan, Italy
Corporate Offices: Piazza Nogara 2, I-37121 Verona, Italy
investor.relations@bancobpm.itwww.bancobpm.it(IR Section)
51
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Banco BPM S.p.A. published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2020 16:53:09 UTC