BANCO BPM S.P.A. FY 2019 Group Results Presentation
6 February 2020
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***
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.
FY 2019 Group Results Presentation 2
METHODOLOGICAL NOTES
- The new accounting standard IFRS 16 on Leasing contracts became effective beginning on 1 January 2019 and, therefore, the P&L and balance sheet results as at 31 December 2019 have been prepared in compliance with the new accounting standard. Banco BPM has chosen to carry out thefirst-time adoption (FTA) through the modified retrospective approach, which provides the option, established by IFRS 16, of recognizing the cumulative effect of the adoption of the standard at the date of first-time adoption and not restating the comparative information of the financial statements of first-time adoption of IFRS 16. As a result, the figures for 2019 will not be comparable with regard to the valuation of the rights of use, lease payable and related economic effects. For more information and the related impacts, please refer to the Methodological Notes included in the News Release regarding the Consolidated results of Banco BPM as at 30/06/2019 and to the disclosure provided in the Consolidated Interim Report as at 30 June 2019.
- Starting from 30/06/2018, ordinary and extraordinary systemic charges related to SRF and DGS have been reclassified from Other Operating Expenses to a dedicated item "Systemic charges after tax". Q1 2018 P&L schemes have been reclassified accordingly.
- Starting from 30/06/2019, upfront fees related to the placement of Certificates have been reclassified from the Net Financial Result to Net Fees & Commissions. The previous quarters (2018 and Q1 2019) have been reclassified accordingly.
- 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 beenre-determined. The P&L of 2018 has not been restated accordingly and, therefore, the items "Amortisation & Depreciation" and "Operating Costs" are not fully comparable on an annual basis.
- 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 thecut-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 mid-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 31/12/2019, the residual amount of these loans stood at €313m GBV and at €94m NBV.
- On 28 June 2019, Banco BPM sold the Profamily captive business to Agos (the company subject to the disposal was renamed ProAgos S.p.A.). Thenon-captive business was demerged prior to this transaction through a spin-off operation in favour of a new company which keeps the name of ProFamily S.p.A. and which is 100% held by Banco BPM. The assets and liabilities (mainly composed of customer loans for a NBV of €1.4bn) related to this non-captive business in Q2 and Q3 were classified as discontinued operations according to IFRS5 standard and, then, in Q4 2019 they have been re-classifiedline-by-line under the relevant Balance Sheet items. In this presentation, in order to allow a proper comparison, the data of Customer Loans as at 30/09/2019 have been restated re-including Profamily non-captive volumes. It is also noted that, with reference to P&L, the contribution has always been represented line-by-line, under the relevant P&L items.
- Pursuant to art. 26, paragraph 2 of EU Regulation no. 575/2013 of 26 June 2013 (CRR), the inclusion ofyear-end profits in Common Equity Tier 1 Capital (CET1) before the annual report is approved by Shareholders at the AGM is subject to the prior permission of the competent authority (the ECB), which to grant permission requires that profits are verified by an independent auditing firm; otherwise, profits can be included once the annual report has been approved by Shareholders at the AGM. As to the data and capital ratios illustrated in this presentation, in addition to the net income as at 30 June 2019, which was included following the permission granted on the back of the limited audit of the condensed consolidated half-yearly report as at 30 June 2019, also the 2H 2019 net income portion has been included, as reported in the
Group's draft consolidated financial statements at 31 December 2019, which has been approved today by the Board of Directors, net of the amount that the Board of Directors has decided to allocate for dividend distribution and donations to be submitted to the Shareholders for approval at the AGM; this profit will be formally included in the capital as soon as the Shareholders at the AGM will approve the annual report.
FY 2019 Group Results Presentation 3
Agenda
1. Key FY 2019 Performance Highlights | 4 |
2. Performance Details: | 29 | |
- | Profitability | 30 |
- | Balance Sheet | 37 |
- | Funding and Liquidity | 38 |
- Customer Loans and Focus on Credit Quality | 43 | |
- | Capital Position | 46 |
FY 2019 Group Results Presentation 4
FY 2019: SUCCESSFUL FINAL YEAR OF THE MERGER PLAN
Turnaround completed and back to dividend
| SUCCESFULL ACHIEVEMENTS….. | Strategic Plan | 2019 | Achieved as at | ||||||
Starting Point1 | YE Target | YE 2019 | ||||||||
CAPITAL POSITION | - CET 1 RATIO FL | 12.3% | 12.9% | 12.8% | Post | |||||
- TEXAS RATIO | 162% | 114% | 52% | dividend | ||||||
- GROSS NPE | €31.5BN2 | €23.2BN3 | €10.1BN | |||||||
DERISKING | - GROSS NPE RATIO | 24.8%2 | 17.5%3 | 9.1% | ||||||
- NET NPE RATIO | 15.7% | 11.1% | 5.2% | |||||||
RATIONALIZATION | - BRANCHES (#) | 2,417 | 2,082 | 1,727 | ||||||
- HEADCOUNT (#) | 25,073 | 22,560 | 21,9414 | |||||||
COST EFFICIENCY | - TOTAL OPERATING COST | €3,086M5 | €2,858M5 | €2,604M | ||||||
- COST REDUCTION SINCE YE15 | -€228M | -€482M | ||||||||
(%) | Euribor 3M | +0.1 | ||
…IN A CHALLENGING | 0.1 | 2017 | 2018 | 2019 |
ENVIRONMENT(2017-2019) | -0.1 | |||
Yearly average embedded | -0.3 | -0.3 | ||
-0.3 | ||||
in the Strategic Plan | -0.38 | |||
-0.32 | ||||
-0.5 |
(%) | GDP | bps | ||
2 | 1.7 | 330 | ||
1.2 | ||||
280 | ||||
1.0 | 230 | |||
1 | 1.1 | 0.8 | 180 | |
0.2 | 130 | |||
0 | 80 | |||
2017 | 2018 | 2019 | ||
BTP/BUND Spread | ||
155 | ||
160 | ||
81 | ||
2017 | 2018 | 2019 |
- PROFITABILITY ABOVE RECENT GUIDANCE
- BACK TO DIVIDEND: PROPOSED DPS OF €0.08 (DIVIDEND YIELD OF 4.1%6)
- NEW STRATEGIC PLAN: 3 MARCH 2020
Notes: 1.Strategic Plan starting point YE 2015 2.Nominal values. 3.Corresponding to Nominal targets (incl. write-offs) of €23.9bn and of 17.9%, respectively 4. The figure includes 251 exits related to non-recurring corporate transactions. 5.Proforma operating cost target, updated to take account of the perimeter change. The data indicated for 2015 as well as for the 2019 target and for the effective 2019 data are affected by different accounting effects. 6.Calculated over the share price closure of €1.96 as at 05/02/2020).
1. Key FY 2019 Performance Highlights 5
SOLID 2019 PERFORMANCE: KEY HIGHLIGHTS (1/2)
Strong profitability and capital position
FY 2019
Net Income
€797m€649m
PROFITABILITY
AND CAPITAL GENERATION
- Paving the way for the new Strategic Plan
- All profitability definitions provide strong evidence of the ability to deliver excellent results
StatedAdj.
FY 2019
Comprehensive Profitability
€1,324m €926m
StatedAdj.
CAPITAL POSITION
AND BUFFERS
- Atstrongest-ever level: well positioned to face potential future headwinds
CET 1 | MDA Buffers1 | |||
14.6% Phased | +440bps Phased | |||
12.8% FL | +229bps FL | |||
Note: 1.Do not include the €400m AT1 instrument issued in January 2020, corresponding to 61bps.
1. Key FY 2019 Performance Highlights | 6 |
SOLID 2019 PERFORMANCE: KEY HIGHLIGHTS (2/2)
Successful balance sheet strategy
RISK PROFILE
RESERVES & UNREALISED
GAINS
- Gross NPE:-1.7bn y/y
- Net NPE:-1.2bn y/y
- Texas ratio1: 52.3% (74.9% YE 18)
- Effective management of debt securities, maintaining a robust buffer of reserves and unrealised gains, which registered a further increase at the beginning of 20202
Gross NPE | Net NPE | ||||
ratio | ratio | ||||
9.1% | 5.2% | ||||
RESERVES | UNREALISED | ||||
(FVOCI) | GAINS (AC)3 | ||||
€71m | €520m | ||||
CUSTOMER VOLUMES
LIQUIDITY & FUNDING
- Solid 'core' commercial volumes
- Growing 'core' funding base: opportunity to boost wealth management business
- Strong position confirmed
- Unencumbered eligible securities at ~€20bn
Core Perf. | C/A & | AUM | ||||||||
Loans | Deposits | |||||||||
+2.9% | +8.2% | +4.7% | ||||||||
y/y | y/y | y/y | ||||||||
LCR | NSFR | |||||||||
>165% | >100% | |||||||||
Notes: 1.Net NPE on Tangible Shareholders' Equity. 2.See Slide 17 for details. 3.Unrealised Gains on Debt Securities at AC are not included in the
'Comprehensive Profitability', nor in the Capital position.
1. Key FY 2019 Performance Highlights | 7 |
FY 2019 GROUP COMPREHENSIVE PROFITABILITY
PROFIT & LOSS (€ m) | FY 2019 Stated | FY 2019 Adjusted | P&L One-off elements1 | ||
TOTAL INCOME | 4,293 | 4,288 | 5 | ||
OPERATING COSTS | -2,604 | -2,600 | -4 | ||
PROFIT FROM OPERATIONS | 1,689 | 1,689 | 0 | ||
LLPs | -779 | -779 | 0 | ||
OTHER PRE-TAX ELEMENTS | 109 | 12 | 97 | ||
PRE-TAX PROFIT | 1,020 | 922 | 97 | ||
NET INCOME | 797 | 649 | 148 | ||
FY 2019 results: from P&L Net Income to Comprehensive Profitability
€ m | 527 | 1,324 | |||||
797 | |||||||
P&L Net Income
(Stated)
Includes Property and Artworks revaluation impact of -€131m pre- tax (-€95mpost-tax)
Net Income directly to Equity (Stated) | Comprehensive | ||
Profitability | |||
(Stated) | |||
COMPOSITION OF NET INCOME | Pre-tax | Post-tax | |
DIRECTLY TO EQUITY | |||
Excludes unrealized gains | |||
Property and Artworks revaluation2 | +367 | +250 | |
on AC portfolio (+€699m | |||
Evolution of the Debt FVOCI reserves | +267 | +179 | |
y/y pre-tax, +€468m y/y | |||
Evolution of the Equity FVOCI reserves | +151 | +120 | post-tax) |
- o/w: Sorgenia | +73 | +49 | |
Other | -33 | -22 | |
TOTAL | +752 | +527 | |
Notes: 1.For details on non-recurring elements, see slide 33. 2.Element not included in the Adjusted Comprehensive Profitability.
1. Key FY 2019 Performance Highlights 8
2019 QUARTERLY P&L RESULTS: STATED AND ADJUSTED
P&L STATED | P&L ADJUSTED1 | ||||||||||||||||||
€ m | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Chg. | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Chg. | |||||||||
q/q | q/q | ||||||||||||||||||
Restated | Restated | ||||||||||||||||||
NII | 505.2 | 514.8 | 500.0 | 477.9 | -4.4% | 505.2 | 514.8 | 500.0 | 473.2 | -5.4% | |||||||||
FEES & COMMISSIONS | 434.5 | 453.7 | 444.1 | 462.2 | 4.1% | 434.5 | 453.7 | 444.1 | 462.2 | 4.1% | |||||||||
NET FINANCIAL RESULT | 72.3 | 10.7 | 41.7 | 207.4 | 397.7% | 72.3 | 10.7 | 41.7 | 207.4 | 397.7% | |||||||||
TOTAL INCOME | 1,063.4 | 1,020.1 | 1,021.7 | 1,187.7 | 16.2% | 1,063.4 | 1,020.1 | 1,021.7 | 1,183.0 | 15.8% | |||||||||
OPERATING COSTS | -656.2 | -648.9 | -642.8 | -656.1 | 2.1% | -656.2 | -648.2 | -640.9 | -654.3 | 2.1% | |||||||||
PROFIT FROM OPERATIONS | 407.2 | 371.3 | 378.9 | 531.6 | 40.3% | 407.2 | 371.9 | 380.9 | 528.7 | 38.8% | |||||||||
LLPs | -152.0 | -197.7 | -208.4 | -220.5 | 5.8% | -152.0 | -197.7 | -208.4 | -220.5 | 5.8% | |||||||||
FV VALUATION OF TANGIBLE ASSETS | -7.5 | -19.3 | -0.7 | -131.0 | n.m. | 0.0 | 0.0 | 0.0 | 0.0 | n.m. | |||||||||
PROVISIONS FOR RISKS & CHARGES | 4.4 | -10.1 | -2.7 | -62.6 | n.m. | 4.4 | 5.2 | -1.7 | -1.5 | n.m. | |||||||||
P&L FROM DISPOSALS | 0.2 | 336.6 | 0.0 | -3.6 | n.m. | 0.0 | 0.0 | 0.0 | 0.0 | n.m. | |||||||||
PRE-TAX PROFIT | 248.4 | 484.8 | 171.1 | 115.4 | -32.6% | 255.7 | 183.5 | 174.9 | 308.3 | 76.2% | |||||||||
TAX | -52.6 | -25.2 | -43.2 | -24.4 | -43.6% | -54.4 | -46.2 | -44.1 | -57.8 | 30.9% | |||||||||
SYSTEMIC CHARGES2 | -41.6 | -15.2 | -31.5 | -4.5 | -85.7% | -41.6 | 0.0 | -31.5 | -4.5 | -85.7% | |||||||||
NET INCOME | 155.4 | 447.6 | 98.2 | 95.8 | -2.5% | 160.3 | 140.5 | 101.1 | 246.6 | 143.8% | |||||||||
€797m | €649m | ||||||||||||||||||
Restated: Q1, Q2 and Q3 2019 Operating Costs (specifically D&A item) are restated for the application in Q4 of the new valuation model on properties and artworks. Refer to methodological notes for details.
Notes: 1.For details on non-recurring elements excluded from the stated Net Income see slide 33. 2.Net of taxes.
1. Key FY 2019 Performance Highlights | 9 |
RESILIENT CORE REVENUES
Core Revenues: quarterly contribution
- m
939.7 | 968.5 | 944.1 | 940.1 | |||||||||
434.5 | 453.7 | 444.1 | 462.2 | |||||||||
(46%) | (47%) | (47%) | (49%) | |||||||||
505.2 | 514.8 | 500.0 | ||||||||||
477.9 | ||||||||||||
(54%) | (53%) | (53%) | (51%) | |||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | |||||||||
NII | Net Fees and Commissions | (%) Composition | ||||||||||
- Broadly stable quarterly core revenues (aggregate NII and Net Fees and Commissions) in 2019, with Net Fees and Commissions increasing the share to 49% in Q4
1. Key FY 2019 Performance Highlights 10
NET INTEREST INCOME: HIGHLIGHTS
Net Interest Income | Core NII: Evolution Breakdown |
€ m | € m | ||||||||||
505.2 | 514.8 | 1.2 | 500.0 | 477.9 | 499.3 | -8.7 | -2.9 | -12.9 | |||
6.2 | 0.7 | 3.1 | 474.9 | ||||||||
Commercial Banking : | |||||||||||
• | -€5.7m:Euribor | ||||||||||
499.0 | 513.7 | 499.3 | 474.9 | • | -€3m:volume effects | ||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q3 19 | COMMERCIAL | NPE | NON- | Q4 19 | |||||||||||||||||||||||
BANKING | INTEREST | COMMERCIAL | |||||||||||||||||||||||||||||
Core NII | Other1 | ||||||||||||||||||||||||||||||
NPE Interest | BANKING2 | ||||||||||||||||||||||||||||||
36.4 | 34.1 | 29.6 | 26.7 | ||||||||||||||||||||||||||||
(Excl. PPA | |||||||||||||||||||||||||||||||
and IFRS9): | |||||||||||||||||||||||||||||||
1.90 | 1.87 | 1.85 | 1.85 | Asset spread | |||||||||||||||||||||||||||
Customer | |||||||||||||||||||||||||||||||
1.47 | 1.43 | 1.34 | 1.33 | ||||||||||||||||||||||||||||
spread | |||||||||||||||||||||||||||||||
Liability spread | |||||||||||||||||||||||||||||||
-0.43 | -0.44 | -0.51 | -0.52 | ||||||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||||
EURIBOR 3M | -0.31 | -0.32 | -0.39 | -0.41 | |||||||||||||||||||||||||||
QUARTERLY AVG. |
Notes: 1.'Other' includes PPA as well as impacts from IFRS9 and IFRS16; see slide 35 for details. 2. Non-commercial banking includes: financial activities, Hedging, interest on Bonds (Retail and Institutional) and other elements.
1. Key FY 2019 Performance Highlights 11
VOLUME GROWTH AT A GLANCE
Strong commercial performance: growth in core customer volumes
€ bn | 31/12/2018 | 30/09/2019 | 31/12/2019 | % chg.Y/Y | % chg. Q4 | |||
Net Performing Customer Loans | 97.3 | 101.1 | 100.3 | 3.1% | -0.8% | |||
o/w: Core Performing Customer Loans1 | 88.6 | 92.0 | 91.1 | 2.9% | -1.0% | |||
- Medium/Long - Term Loans | 58.6 | 62.0 | 62.5 | 6.8% | 0.9% | |||
- Current Accounts | 11.2 | 11.2 | 10.5 | -6.2% | -5.8% | |||
- Other Loans | 18.8 | 18.9 | 18.1 | -3.8% | -4.1% | |||
Direct Funding2 | 101.5 | 106.5 | 108.9 | 7.3% | 2.3% | |||
C/A & Deposits (Sight + Time) | 81.1 | 87.0 | 87.8 | 8.2% | 0.8% | |||
Bonds | 14.9 | 14.4 | 15.8 | 6.7% | 10.4% | |||
Certificates | 3.4 | 3.1 | 3.2 | -3.9% | 3.2% | |||
Other | 2.1 | 1.9 | 2.0 | -5.6% | 4.5% | |||
Indirect Funding3 | 87.0 | 89.2 | 89.7 | 3.2% | 0.6% | |||
o/w: AUM | 55.7 | 57.6 | 58.3 | 4.7% | 1.2% | |||
- Funds & Sicav | 36.0 | 38.5 | 39.0 | 8.5% | 1.5% | |||
- Bancassurance | 14.9 | 15.2 | 15.4 | 3.2% | 1.4% | |||
- Managed Accounts & Funds of Funds | 4.8 | 4.0 | 3.9 | -18.8% | -2.0% | |||
Customer Loans as at 30/09/19 are restated including Profamily non-captive volumes. See Methodological Notes for details.
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.
1. Key FY 2019 Performance Highlights 12
SOUND LENDING PERFORMANCE OF THE NETWORK
Solid volumes, with a recovery in pricing of Corporate and SME new lending y/y
All-In Rates of the New M/L-Term Lending to | |||||||||||||||||||||||
€21.4bn New Loans in FY 2019 | Main Corporate Segments2 | ||||||||||||||||||||||
(Management data of the commercial network1) | (Management data of the commercial network) | ||||||||||||||||||||||
€ bn | bps | 214 | 222 | ||||||||||||||||||||
FY 2018 | 3.0 | 18.2 | 21.2 | Enterprises | 135 | ||||||||||||||||||
+0.9% | 120 | ||||||||||||||||||||||
FY 2019 | 3.7 | 17.6 | |||||||||||||||||||||
21.4 | |||||||||||||||||||||||
Large + Mid Corporate | |||||||||||||||||||||||
Households | Enterprise & Corporate | ||||||||||||||||||||||
FY 2018 | FY 2019 | ||||||||||||||||||||||
+26.2% | -3.2% | Due to big ticket | Euribor 3M Average | -33 | |||||||||||||||||||
transactions | -36 | ||||||||||||||||||||||
y/y | y/y | ||||||||||||||||||||||
concentrated in | |||||||||||||||||||||||
Q4 2018 |
- Solid level of newM/L-Term lending (>€21bn) confirmed, coupled with increased pricing in the main corporate segments vs. FY 2018
- The contribution from the better pricing of the new lending is mitigated by the still higher rates of the maturing portfolio, with the exception of the Corporate segments, which already show increasing spreads in net lending
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. 2.All-in rates include commission income related to insurance policies, interest rate hedges and loan granting fees. Exclude volumes related to Structured Finance.
1. Key FY 2019 Performance Highlights 13
SUCCESSFUL ACCESS TO A WIDE RANGE OF INSTRUMENTS IN THE WHOLESALE MARKET
€2.8bn public wholesale issues in the period | Wholesale bond maturities1 | ||||||||
FY 2019-Jan. 2020 | |||||||||
€ bn | 2.40 | Issue details | € bn | ||||||
2.4 | |||||||||
1.75 | |||||||||
1.7 | |||||||||
1.75 | 0.7 | ||||||||
0.50 | 0.40 | 0.30 | 0.35 | 0.40 | 1.7 | ||||
FY | FY | FY | Jan. | FY 19 | FY 19 | FY 19 | Jan-20 | FY 2019 | FY 2020 |
2017 | 2018 | 2019 | 2020 | Senior Pref. | AT1 | T2 | Senior Pref. | Subordinated | |
Bond funding composition as at 31/12/2019 | Senior Preferred Wholesale Bonds: | ||||||
Spreads & Rates | |||||||
Nominal | 16.6% | Cap.-Protected | |||||
SENIOR PREFERRED | AVERAGE | AVERAGE | |||||
amounts | |||||||
Certificates | |||||||
Covered | INSTRUMENTS | RATES | SPREADS | ||||
FY 2019 ISSUES | 2.2% | 2.3% | |||||
Bonds2 | |||||||
Equal to €3.4bn, o/w: | 33.2% | €19.4bn | 32.8% | ||||
~€1.5bn not included in | Senior | FY 2019 MATURITIES | 3.8% | 3.1% | |||
Own Funds Phased-in, but | |||||||
Preferred | |||||||
representing MREL-eligible | |||||||
FY 2020 MATURITIES | 2.8% | 2.3% | |||||
funding. Data exclude | |||||||
the €400m AT1 issued in | 17.3% | ||||||
Jan. 2020 | Subordinated |
(AT1 and T2) | |
Notes: 1.Managerial data based on nominal amounts, including calls. 2.Include €0.95bn Repo with underlying retained Covered Bonds. | |
1. Key FY 2019 Performance Highlights 14 |
NET FEES AND COMMISSIONS: GROWTH IN Q4
Net Fees and Commissions | Focus on Investment Product Fees1 | ||||||||||||||||||||||||||||
€ m | +6.4% | ||||||||||||||||||||||||||||
€ m | +9.0% | ||||||||||||||||||||||||||||
+4.1% | |||||||||||||||||||||||||||||
453.7 | 462.2 | +2.2% | +€28.9m | ||||||||||||||||||||||||||
434.5 | 444.1 | ||||||||||||||||||||||||||||
171.7 | 180.7 | 183.1 | 187.2 | vs Q4 18 | |||||||||||||||||||||||||
224.8 | |||||||||||||||||||||||||||||
204.2 | 220.6 | 216.8 | |||||||||||||||||||||||||||
65.5 | 72.4 | 75.0 | 76.1 | Not including | |||||||||||||||||||||||||
230.3 | 233.1 | 237.4 | |||||||||||||||||||||||||||
227.3 | 106.2 | 108.3 | 108.1 | 111.1 | €5.7m perf. fees | ||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||
Management & Advisory | Commercial Banking Fees | Upfront fees | Running fees | ||||||||||||||||||||||||||
- Net fees and commission at €462.2m in Q4 2019, up 4.1% Q/Q, thanks both to the increase in advisory and management fees (+3.7% Q/Q), as well as to commercial fees (+4.4% Q/Q).
- After some pressure registered in 2018, due to the adoption of a new commercial approach coinciding with liquidity preference of customers, a balanced quarterly progression is seen in 2019, thanks to advisory and management fees (especially investment product placement, bancassurance and consumer finance fees)
Notes: 1.Internal management data of the Commercial Network regarding the breakdown of running and upfront fees on investment products.
1. Key FY 2019 Performance Highlights 15
GROWTH IN INVESTMENT PRODUCT PLACEMENTS
Investment product placements volumes1
- bn
+48% | |||||||||||
4.6 | Positive trend reversal in 2019 | ||||||||||
3.7 | |||||||||||
3.5 | 3.2 | 2.9 | 3.4 | 3.5 | |||||||
2.5 | |||||||||||
Q1 18Q2 18 Q3 18 Q4 18 | Q1 19 Q2 19 Q3 19 Q4 19 |
Share of investment product Upfront fees
on Total Net Fees & Commissions
Upfront Profitability (%) | ||||||
2.1% | 2.2% | 2.2% | 2.2% | 2.1% | 2.1% | |
2.0% | 2.0% | |||||
21% | ||||||
17% | 12% | 15% | 16% | 17% | 16% | |
14% | ||||||
Q1 18 Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | Q3 19 | Q4 19 |
New commercial approach
- After the decline registered in quarterly investment product placements during 2018, a constant performance recovery is seen in all quarters of 2019, with Q4 coming in at €3.7bn (vs. €2.5bn in Q4 2018 and €3.5bn in Q3 2019)
- Following the adoption of a newcustomer-based commercial approach in 2018, the Group has rebalanced the composition of Management & Advisory fees, registering a resilient contribution from the upfront component of investment products
Notes: 1.Management data of the Commercial Network related only to the placements of investment products which generate upfront fees.
1. Key FY 2019 Performance Highlights 16
NFR: EXCELLENT PERFORMANCE MAINTAINING A ROBUST LEVEL OF RESERVES & UNREALISED GAINS
Net Financial Result
€ m | 207.4 |
72.3
41.7
10.7
Q1 19 | Q2 19 | Q3 19 | Q4 19 |
Not included in P&L results, but included in the Capital Position
Reserves of
Debt Securities at FVOCI
Pre-tax, | |
in € m | +267m |
y/y |
€172m as at
22531/01/2020271
-197
31/12/18 30/09/19 31/12/19
Not included neither in the P&L results nor in the Capital Position1
Unrealised gains on
Debt Securities at AC
Pre-tax,
in € m | +699m | €697m as at |
y/y | ||
31/01/20202 |
865
520
-179
31/12/18 30/09/19 31/12/19
€104m realised in
Q4 2019
- Material increase in NFR in Q4 (to €207.4m), mainly as a result of gains from the disposal of debt securities (€125.1m), together with those from debt and equity instruments coming from the disposal of Sorgenia (€44.6m under NFR, with an additional €73.2m contributing directly to equity)
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 data.
1. Key FY 2019 Performance Highlights 17
WELL DIVERSIFIED DEBT SECURITIES PORTFOLIO
Further rationalisation of Italian Govies portfolio in Q4 2019
Evolution & Composition of Debt Securities | Classification of Debt | |||||||
€ bn | Securities at 31/12/2019 | |||||||
31.6 | 30.2 | 32.9 | 34.2 | 31.2 | ||||
26.7 | FVOCI | |||||||
Debt securities | 20.7 | 17.7 | 19.3 | 38.1% | ||||
15.5 | €11.9bn | AC | ||||||
o/w: Italian | €31.2bn | |||||||
55.2% | ||||||||
Govies | ||||||||
31/12/16 | 31/12/17 | 31/12/18 | 30/09/19 | 31/12/19 | €17.3bn | |||
84% | 69% | FVTPL | ||||||
54% | 56% | 50% | ||||||
Share of Italian | 6.7% | |||||||
Govies on Debt | €2.1bn | |||||||
securities |
Evolution of Govies at FVOCI | Evolution of Govies at AC |
FOCUS ON TOTAL
GOVIES IN THE
BANKING BOOK
- bn
11.7 | 10.0 | 9.1 |
31/12/2018 | 30/09/2019 | 31/12/2019 |
Duration: 2.5 years1
€ bn | Duration: | ||
15.1 | 16.5 | 15.7 | |
3.6 years1 | |||
31/12/2018 30/09/2019 31/12/2019
Notes: 1.Management data as at end-January 2020, including hedging strategies.
1. Key FY 2019 Performance Highlights
18
STRONG REDUCTION IN OPERATING COSTS: Y/Y
Total Operating Costs1
€ m | -6.8% | FY 2019 vs. | 3,0862 | ||||
starting point | |||||||
2,792.8 | 2,604.0 | ||||||
1,732.8 | 1,696.5 | -€482m | ||||||||||||||||||||||||||||||||||
1,060.0 | ||||||||||||||||||||||||||||||||||||
907.5 | ||||||||||||||||||||||||||||||||||||
2018 | 2019 | Strategic Plan | ||||||||||||||||||||||||||||||||||
starting point | ||||||||||||||||||||||||||||||||||||
Other | Staff costs | |||||||||||||||||||||||||||||||||||
# Headcount evolution | # Retail network evolution | |||||||||||||||||||||||||||||||||||
-3,132 | -690 | |||||||||||||||||||||||||||||||||||
25,073 | ||||||||||||||||||||||||||||||||||||
Includes #251 exits | 2,417 | |||||||||||||||||||||||||||||||||||
related to non-recurring | 1,727 | |||||||||||||||||||||||||||||||||||
21,941 | corporate transactions | |||||||||||||||||||||||||||||||||||
Strategic Plan | 31/12/2019 | |||||||||||||||||||||||||||||||||||
Strategic Plan | 31/12/2019 | |||||||||||||||||||||||||||||||||||
starting point | starting point | |||||||||||||||||||||||||||||||||||
Notes: 1.2018 figures are not fully comparable, due to the restatement of Q1, Q2 and Q3 2019 Operating Costs (specifically related to the D&A item). Refer to methodological notes. 2.Internal Management Data, adjusted for non-recurring items and systemic charges. Figures are pro-forma for the Strategic Plan starting point, with ex Aletti Gestielle coherently not included in Operating Costs.
1. Key FY 2019 Performance Highlights 19
OPERATING COSTS: QUARTERLY EVOLUTION
Total Operating Costs1
stable
+2.1%
656.2648.9 642.8 656.1
Q1 19 | Q2 19 | Q3 19 | Q4 19 |
o/w:Staff costs | o/w:Other admin. costs | o/w: D&A | |||||||||||||||||||||||||||||||||||||||
+2.6% | -10.3% | +9.4% | |||||||||||||||||||||||||||||||||||||||
425.9 | |||||||||||||||||||||||||||||||||||||||||
418.0 | 415.6 | 437.0 | |||||||||||||||||||||||||||||||||||||||
167.0 | 163.1 | ||||||||||||||||||||||||||||||||||||||||
158.6 | 68.6 | 69.3 | |||||||||||||||||||||||||||||||||||||||
149.8 | 63.3 | 67.7 | |||||||||||||||||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q1 19 | Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||||||||||||||
Note: 1.Q1, Q2 and Q3 2019 Operating Costs (specifically related to the D&A item) are restated for the application in Q4 of the new valuation model on properties and artworks, now impacting the item Profit (Loss) on Fair Value measurement of tangible assets.
1. Key FY 2019 Performance Highlights 20
ACCOUNTING MODEL CHANGE FOR PROPERTY AND ARTWORKS
RATIONALE AND NATURE
OF MODEL CHANGE
IMPACT ON
PROPERTY AND ARTWORK
VALUATION
IMPACT ON P&L
VS DIRECT IMPACT TO
CAPITAL
-
Rationalisation and value enhancement of the Group's real estate portfolio
(both instrumental and Investment property) and artworks - Fromcost-based to fair-value accounting model
- Impact on total property and artworks as at 31/12/2019 (vs. BV at YE 2018):
Total impact (pre-tax) | +€223.0m1 | |
- o/w: Property | +€181.8m | |
- o/w: Artworks | +€ 41.2m | |
P&L includes | ||
Total impact to P&L (pre-tax): | -€131.4m | essentially |
decreases vs. | ||
- o/w: Property | -€129.5m | the value as of |
- o/w: Artworks | -€1.9m | 31/12/18 |
Total impact direct to capital (pre-tax) | +€354.4m1 | |
- o/w: Property | +€311.4m | |
- o/w: Artworks | +€43.1m |
Note: 1.Of which -€12.6m not recorded under the Comprehensive Profitability.
1. Key FY 2019 Performance Highlights 21
STRONG IMPROVEMENT ACROSS ASSET QUALITY METRICS
Reduction in NPE stock and ratios, with strengthened coverage in all categories
NPE Stock (GBV) | NPE Stock (NBV) | |||||||||||||||||||||||
€ m | 11,814 | 10,474 | -14.6% Y/Y | € m | -17.6% Y/Y | |||||||||||||||||||
10,087 | ||||||||||||||||||||||||
106 | ||||||||||||||||||||||||
6,727 | ||||||||||||||||||||||||
131 | 98 | -3.7% in Q4 | 5,968 | -7.1% in Q4 | ||||||||||||||||||||
5,544 | ||||||||||||||||||||||||
7,768 | 88 | |||||||||||||||||||||||
6,949 | 6,424 | 107 | 73 | |||||||||||||||||||||
5,048 | ||||||||||||||||||||||||
3,939 | 3,565 | 4,373 | 3,912 | |||||||||||||||||||||
3,395 | 1,591 | 1,488 | 1,560 | |||||||||||||||||||||
31/12/18 | 30/09/191 | 31/12/19 | 31/12/18 | 30/09/19 1 | 31/12/19 | |||||||||||||||||||
Bad Loans | UTP | PD | Bad Loans | UTP | PD | |||||||||||||||||||
NPE Ratios | Coverage & Collaterlisation | |||||||||||||||||||||||
10.8% | 9.4% | 9.1% | ||
6.5% | ||||
TOTAL NPE | 5.6% | 5.2% | ||
RATIOS | ||||
31/12/18 | 30/09/191 | 31/12/19 | ||
3.6% | 3.0% | 3.2% | ||
BAD LOAN | 1.5% | 1.5% | ||
1.4% | ||||
RATIOS | ||||
31/12/18 | 30/09/191 | 31/12/19 | ||
Gross | Net |
30/09/191 | 31/12/19 | 62.5% | |
56.2% | 56.2% | ||
BAD LOAN COVERAGE | incl. | ||
write-offs | |||
UTP COVERAGE | 37.1% | 39.1% | |
PD COVERAGE | 18.2% | 25.9% | |
48.1% | |||
TOTAL NPE COVERAGE | 43.0% | 45.0% | incl. |
write-offs | |||
% of Secured NPE | 62% | 61% | |
on Total NPE (GBV) | |||
Note: 1.Customer Loans as at 30/09/19 are restated including Profamily non-captive volumes. Refer to the Methodological Notes for details.
1. Key FY 2019 Performance Highlights 22
NPE FLOWS AND COST OF RISK: MATERIAL IMPROVEMENT Y/Y
Net Flows to NPEs | Flows from UTP to Bad Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
€ m | € m | -32.4% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-15.1% | 1,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
892 | 758 | 216 | 233 | 220 | 864 | 260 | 245 | |||||||||||||||||||||||||||||||||||||||||||||||||||
188 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
171 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY 2018 FY 2019 | Q1 | Q2 | Q3 | Q4 | FY 2018 FY 2019 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
LLPs | Cost of Risk1 | 62bps, when | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
considering | the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
€ m | bps (EoP) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
+5.8% | positive impact | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
from Sorgenia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
152.0 | 197.7 | 208.4 | 220.5 | Stated | 73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
116 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY 2018 | FY 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 19 Q2 19 | Q3 19 | Q4 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LLPs and CoR do not include the positive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
impact from Sorgenia: €44.6m registered in the | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
P&L under NFR and €73.2m directly to Equity |
Note: 1.CoR calculated including also loans classified at IFRS 5, for coherence with related LLPs.
1. Key FY 2019 Performance Highlights 23
NPE: EFFECTIVE WORKOUT ACTIVITY
NPE, gross book value: -€1.7bn in 2019
- bn
11.8 | -0.6 | +1.2 | -2.3 |
10.1
31/12/18 | Bad Loan | Inflows from | Cancellations, | 31/12/19 |
portfolio disposals | Performing | Write-offs, | ||
Recoveries, Cure &
Other
- Effective NPE management with internal workout more than compensating annual inflows
1. Key FY 2019 Performance Highlights 24
UTP LOANS: CONSISTENT REDUCTION WITH EFFECTIVE WORKOUT AND SIGNIFICANTLY STRENGTHENED COVERAGE SINCE YE 2016
UTP, gross book value: -€4.9bn since YE 2016
- bn
11.3 | +1.4 | -1.5 | -1.7 | 9.5 | ||||||||
+1.4 | -1.3 | -1.6 | ||||||||||
0.3 * | ||||||||||||
7.8 | +0.8 | -0.9 | -1.3 | |||||||||
6.4 | ||||||||||||
9.2 | ||||||||||||
31/12/16 | Inflows | Outflows | Workout1 | 31/12/17 | Inflows | Outflows | Workout1 | 31/12/18 | Inflows | Outflows | Workout1 | 31/12/19 |
from | to | from | to | from | to | |||||||
Performing Bad Loans | Performing | Bad Loans | Performing | Bad Loans | ||||||||
loans | loans | loans |
* -0.3m of IFRS 9 reclassification impact
UTP Coverage: +11.9 p.p. since YE 2016
Strong reduction in gross UTP:-€1.4bnin FY | |||||||||||||||
37.1% | 39.1% | 2019 and -€4.9bn since year-end 2016 | |||||||||||||
35.0% | Significant and consistent strengthening of UTP | ||||||||||||||
32.3% | | ||||||||||||||
coverage levels:+4.1p.p. in FY 2019 and | |||||||||||||||
27.2% | |||||||||||||||
+11.9p.p since year-end 2016 | |||||||||||||||
UTP quality: high share of secured positions | |||||||||||||||
31/12/2016 | 31/12/2017 | 31/12/2018 | 30/09/2019 | 31/12/2019 | |||||||||||
(61% GBV and 71% NBV), with predominant | |||||||||||||||
Note: 1.Cancellations, Recoveries, Cure and Other net movements. | exposure in northern Italy | ||||||||||||||
1. Key FY 2019 Performance Highlights 25 |
SIGNIFICANT STRENGTHENING IN ALL CAPITAL RATIOS
Well positioned to withstand potential future headwinds
Fully Loaded Capital Ratios: evolution
%TOTAL | 12.4% | 14.4% | Proposed DPS | 15.6%1 | ||||||
12.5% | of €0.08 | 13.3%1 | ||||||||
TIER 1 | 10.0% | |||||||||
CET 1 PF | 13.0 | 12.8 | CET 1 | |||||||
12.1 | +52bps | -13bps | +37bps | +14bps | -20bps | Phase-in | ||||
at 11.5% | ||||||||||
10.0 | at 14.6% | |||||||||
CET 1 | ||||||||||
31/12/2018 | 30/09/2019 | Q4 | HTCS | Property and | Reduction in | 31/12/2019 | Proposed | 31/12/2019 | ||
performance | reserves | Artworks: | CR Asti stake | pre-dividend | dividends | |||||
change in | (to below | |||||||||
MDA buffers1 | accounting | 10%) | ||||||||
model |
Phased-in+440bps
Fully Loaded | +229bps |
- Fully loaded CET 1 capital ratio up at 12.8%(Phased-in up at 14.6%), already after deduction of the dividend accrual: proposed DPS of € 0,08
- Optimized capital position, with wide MDA buffers, thanks to strong CET 1 level and a significant bucket strengthening in AT1
Notes: 1.The figures do not include the €400m AT1 instrument issued in January 2020, corresponding to 61bps.
Ratios as at 30/09/2019 include the contribution of the Q3 2019 net result, while those as at 31/12/2019 include the net result, post dividend, pertaining to H2 2019 (see methodological notes for details).
1. Key FY 2019 Performance Highlights 26
FINAL REMARKS ON FY 2019 PERFORMANCE
- SOLID PROFITABILITY, OPERATIONALLY DRIVEN BY:
- POSITIVE TREND IN INVESTMENT PRODUCT FEES
- STRICT ONGOING COST CONTROL
- REDUCTION IN THE COST OF RISK
- RESILIENT GROWTH IN BUSINESS VOLUMES
- CAPITAL POSITION ATSTRONGEST-EVERLEVELALLOWING TO WITHSTAND POTENTIAL FUTURE REGULATORY HEADWINDS
- ONGOING IMPROVEMENT IN ASSET QUALITY METRICS, DRIVEN BY EFFECTIVE WORKOUT, LOWER INFLOWS AND HIGHER COVERAGE
- STRONG FUNDING AND LIQUIDITY POSITION
BACK TO DIVIDEND:
PROPOSED DPS OF €0.08 (DIVIDEND YIELD OF 4.1%1)
Note: 1.Calculated over the share price closure of €1.96 as at 05/02/2020).
1. Key FY 2019 Performance Highlights 27
OUTLOOK FOR FY 2020
-
CORE REVENUES:
GROWTH IN NET FEE & COMMISSION INCOME EXPECTED TO OFFSET PRESSURE ON NET INTEREST INCOME - STRICT COST CONTROL:
ONGOING COST MANAGEMENT ACTIVITIES ALLOW TO COMPENSATE THE EFFECT FROM THE RENEWAL OF THE COLLECTIVE LABOUR CONTRACT AND TO MINIMISE THE IMPACT OF ADDITIONAL INVESTMENTS MAINLY IN IT - COST OF RISK:
FURTHER PROGRESS EXPECTED IN THE PATH OF REDUCTION, CONSISTENT ALSO WITH AN IMPROVEMENT IN THE CREDIT PORTFOLIO - CAPITAL POSITION:
BUILDING ON THE TRACK RECORD OF INTERNAL CAPITAL GENERATION TO SUPPORT A SUSTAINABLE SHAREHOLDER REMUNERATION, MANAGING POTENTIAL FUTURE REGULATORY HEADWINDS
BANCO BPM'S NEW STRATEGIC PLAN AND TARGETS TO BE PROVIDED ON 3 MARCH 2020
1. Key FY 2019 Performance Highlights 28
Agenda
1. Key FY 2019 Performance Highlights | 4 |
2. Performance Details: | 29 | |
- | Profitability | 30 |
- | Balance Sheet | 37 |
- | Funding and Liquidity | 38 |
- Customer Loans and Focus on Credit Quality | 43 | |
- | Capital Position | 46 |
FY 2019 Group Results Presentation 29
GROUP FY 2019 COMPREHENSIVE NET INCOME
Resilient capital generation also from the elements not directly impacting P&L
€ m | 9M 2019 | FY 2019 | Q1 | Q2 | Q3 | Q4 | |
2019 | 2019 | 2019 | 2019 | ||||
A. | P&L NET INCOME | 701.2 | 797.0 | 155.4 | 447.6 | 98.2 | 95.8 |
o/w: ADJUSTED | 402.0 | 648.6 | 160.3 | 140.5 | 101.1 | 246.6 |
OTHER NET INCOME DIRECTLY ACCOUNTED
B.TO EQUITY1
o/w Tangible assets at Fair Value 2
o/w Reserves of Debt Securities at FVOCI (net of tax)
283.2 | 526.7 | 110.5 | 13.5 | 159.2 | 243.5 |
0.0 | 249.7 | 0.0 | 0.0 | 0.0 | 249.7 |
281.8 | 178.8 | 91.5 | 64.3 | 126.0 | -103.0 |
o/w Reserves of Equity Securities at | 14.0 | 119.8 | 19.5 | -31.9 | 26.3 | 105.8 | |
FVOCI (net of tax) | |||||||
A.+B. | COMPREHENSIVE NET INCOME OF THE | 984.5 | 1,323.7 | 265.9 | 461.1 | 257.4 | 339.3 |
GROUP |
Notes: 1. Other Comprehensive Income components, excluded from the distributable amount available for dividends. 2.Element not included in the Adjusted Comprehensive Profitability.
Q1, Q2, Q3 2019 and 9M 2019 figures have been restated for the application in Q4 of the accounting standard for the valuation of the Group's property and works of art. Refer to methodological notes.
2. Performance Details: Profitability 30
RECLASSIFIED P&L: ANNUAL COMPARISON
Reclassified income statement | FY 2018 | FY 2019 | Chg. Y/Y | Chg. Y/Y | ||
(in euro million) | Stated | Stated | % | |||
Net interest income | 2,292.6 | 1,998.0 | -294.6 | -12.9% | ||
Income (loss) from investments in associates carried at | 159.5 | 131.3 | -28.2 | -17.7% | ||
equity | ||||||
Net interest, dividend and similar income | 2,452.0 | 2,129.2 | -322.8 | -13.2% | ||
Net fee and commission income | 1,860.9 | 1,794.4 | -66.5 | -3.6% | ||
Other net operating income | 389.8 | 37.2 | -352.5 | -90.4% | ||
Net financial result | 70.2 | 332.1 | 261.9 | 373.2% |
Other operating income | 2,320.9 | 2,163.7 | -157.1 | -6.8% | ||
Total income | 4,772.9 | 4,293.0 | -480.0 | -10.1% | ||
Personnel expenses | -1,732.8 | -1,696.5 | 36.3 | -2.1% | ||
Other administrative expenses | -816.5 | -638.6 | 177.9 | -21.8% | ||
Amortization and depreciation | -243.5 | -268.9 | -25.5 | 10.5% |
Operating costs | -2,792.8 | -2,604.0 | 188.7 | -6.8% | ||
Profit (loss) from operations | 1,980.1 | 1,688.9 | -291.2 | -14.7% | ||
Net adjustments on loans to customers | -1,941.1 | -778.5 | 1,162.6 | -59.9% | ||
Profit (loss) on FV measurement of tangible assets | -158.5 | -158.5 | ||||
Net adjustments on other financial assets | 3.3 | 5.8 | 2.5 | 75.0% | ||
Net provisions for risks and charges | -345.3 | -71.0 | 274.3 | -79.4% | ||
Profit (loss) on the disposal of equity and other | 173.4 | 333.2 | 159.8 | 92.2% | ||
investments | ||||||
Income (loss) before tax from continuing operations | -129.7 | 1,019.7 | 1,149.4 | n.m. | ||
Tax on income from continuing operations | 162.8 | -145.4 | -308.3 | n.m. | ||
Systemic charges after tax | -100.2 | -92.9 | 7.3 | -7.3% | ||
Income (loss) after tax from discontinued operations | 0.9 | -0.9 | n.m. | |||
Income (loss) attributable to minority interests | 9.6 | 15.6 | 5.9 | 61.7% | ||
Net income (loss) for the period excluding Badwill & | -59.4 | 797.0 | 856.4 | n.m. | ||
Impairment of goodwill and client relationship | ||||||
The trends in NII and LLPs haves to be read strictly together, due to the impact of the derisking activity: the reduced contribution of NPEs to NII is more than compensated by lower LLPs for NPEs
Starting from 30/06/2019, upfront fees related to the placement of Certificates have been reclassified from Net Financial Results to Net Fees & Commissions. The previous quarters (2018 and Q1 2019) have been reclassified coherently.
2018 figures not fully comparable due to the restatement of Q1, Q2 and Q3 2019 Operating Costs (specifically D&A item) for the application in Q4 of the new valuation model on properties and artworks. Refer to methodological notes.
2. Performance Details: Profitability 31
RECLASSIFIED P&L: QUARTERLY EVOLUTION
Reclassified income statement | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | |||||||||
(in euro million) | Stated | Stated | Stated | Stated | Stated | Stated | Stated | Stated | |||||||||
Net interest income | 595.1 | 585.0 | 557.8 | 554.7 | 505.2 | 514.8 | 500.0 | 477.9 | |||||||||
Income (loss) from investments in associates carried at | 42.6 | 33.4 | 32.8 | 50.7 | 36.8 | 32.6 | 28.0 | 33.9 | |||||||||
equity | |||||||||||||||||
Net interest, dividend and similar income | 637.7 | 618.4 | 590.6 | 605.4 | 541.9 | 547.5 | 528.0 | 511.8 | |||||||||
Net fee and commission income | 477.9 | 457.3 | 451.4 | 474.4 | 434.5 | 453.7 | 444.1 | 462.2 | |||||||||
Other net operating income | 24.2 | 130.0 | 214.5 | 21.1 | 14.6 | 8.3 | 8.0 | 6.3 | |||||||||
Net financial result | 27.9 | 73.9 | 46.8 | -78.4 | 72.3 | 10.7 | 41.7 | 207.4 | |||||||||
Other operating income | 530.0 | 661.2 | 712.7 | 417.0 | 521.5 | 472.7 | 493.7 | 675.9 | |||||||||
Total income | 1,167.7 | 1,279.6 | 1,303.2 | 1,022.4 | 1,063.4 | 1,020.1 | 1,021.7 | 1,187.7 | |||||||||
Personnel expenses | -442.1 | -437.1 | -431.5 | -422.2 | -425.9 | -418.0 | -415.6 | -437.1 | |||||||||
Other administrative expenses | -211.5 | -203.1 | -196.2 | -205.7 | -167.0 | -163.1 | -158.6 | -149.8 | |||||||||
Amortization and depreciation | -47.9 | -49.0 | -49.5 | -97.1 | -63.3 | -67.7 | -68.6 | -69.3 | |||||||||
Operating costs | -701.5 | -689.2 | -677.1 | -725.0 | -656.2 | -648.9 | -642.8 | -656.1 | |||||||||
Profit (loss) from operations | 466.2 | 590.4 | 626.1 | 297.4 | 407.2 | 371.3 | 378.9 | 531.6 | |||||||||
Net adjustments on loans to customers | -326.2 | -360.2 | -267.4 | -987.3 | -152.0 | -197.7 | -208.4 | -220.5 | |||||||||
Profit (loss) on FV measurement of tangible assets | -7.5 | -19.3 | -0.7 | -131.0 | |||||||||||||
Net adjustments on other financial assets | 2.2 | -1.6 | -1.3 | 4.0 | -4.0 | 4.0 | 4.1 | 1.6 | |||||||||
Net provisions for risks and charges | -25.0 | -20.7 | -71.9 | -227.8 | 4.4 | -10.1 | -2.7 | -62.6 | |||||||||
Profit (loss) on the disposal of equity and other | 179.7 | -1.1 | -10.3 | 5.1 | 0.2 | 336.6 | 0.0 | -3.6 | |||||||||
investments | |||||||||||||||||
Income (loss) before tax from continuing operations | 296.9 | 206.8 | 275.2 | -908.6 | 248.4 | 484.8 | 171.1 | 115.4 | |||||||||
Tax on income from continuing operations | -25.9 | -61.3 | -72.3 | 322.4 | -52.6 | -25.2 | -43.2 | -24.4 | |||||||||
Systemic charges after tax | -49.0 | -18.4 | -32.1 | -0.7 | -41.6 | -15.2 | -31.5 | -4.5 | |||||||||
Income (loss) after tax from discontinued operations | 0.0 | 0.0 | 0.9 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||
Income (loss) attributable to minority interests | 1.4 | 2.2 | 0.3 | 5.8 | 1.2 | 3.2 | 1.8 | 9.2 | |||||||||
Net income (loss) for the period excluding Badwill & | 223.3 | 129.3 | 171.9 | -581.0 | 155.4 | 447.6 | 98.2 | 95.8 | |||||||||
Impairment of goodwill and client relationship | |||||||||||||||||
Starting from 30/06/2019, upfront fees related to the placement of Certificates have been reclassified from Net Financial | |||||||||||||||||
Results to Net Fees & Commissions. The previous quarters (2018 and Q1 2019) have been reclassified coherently. | |||||||||||||||||
Restated:Q1, Q2 and Q3 2019 Operating Costs (specifically D&A item) are restated for the application in Q4 of the new | |||||||||||||||||
valuation model on properties. Refer to methodological notes | 2. Performance Details: Profitability | 32 |
FY 2019 ADJUSTED P&L: DETAILS ON NON-RECURRING ITEMS
Reclassified income statement | FY 2019 | FY 2019 | One- off |
(in euro million) | Stated | Adjusted | |
Net interest income | 1,998.0 | 1,993.3 | 4.7 |
Income (loss) from investments in associates carried at equity | 131.3 | 131.3 | 0.0 |
Non-recurring items and extraordinary systemic charges
Rem uneration of sub. Bond Carige through FITD
Net interest, dividend and similar income | 2,129.2 | 2,124.5 | 4.7 | ||
Net fee and commission income | 1,794.4 | 1,794.4 | 0.0 | ||
Other net operating income | 37.2 | 37.2 | 0.0 | ||
Net financial result | 332.1 | 332.1 | 0.0 | ||
Other operating income | 2,163.7 | 2,163.7 | 0.0 | ||
Total income | 4,293.0 | 4,288.3 | 4.7 | ||
Personnel expenses | -1,696.5 | -1,696.5 | 0.0 | ||
Other administrative expenses | -638.6 | -638.6 | 0.0 | ||
Amortization and depreciation | -268.9 | -264.5 | -4.4 | Adjustm ents on intangible assets | |
Operating costs | -2,604.0 | -2,599.6 | -4.4 | ||
Profit (loss) from operations | 1,688.9 | 1,688.7 | 0.2 | ||
Net adjustments on loans to customers | -778.5 | -778.5 | 0.0 | ||
Profit (loss) on FV measurement of tangible assets | -158.5 | 0.0 | -158.5 | Application of the new valuation m odel on properties and | |
artworks | |||||
Net adjustments on other assets | 5.8 | 5.8 | 0.0 | ||
Net provisions for risks and charges | -71.0 | 6.5 | -77.5 | Adjustm ents on custom er conditions, charges for | |
litigation and provisions for custom er care and other | |||||
Profit (loss) on the disposal of equity and other investments | 333.2 | 0.0 | 333.2 | Disposal of ProAgos, First Servicing (NPL platform ) and | |
other | |||||
Income (loss) before tax from continuing operations | 1,019.7 | 922.4 | 97.4 | ||
Tax on income from continuing operations | -145.4 | -202.5 | 57.1 | Extraordinary positive fiscal item s | |
Systemic charges after tax | -92.9 | -77.6 | -15.2 | Additional contribution to Italian resolution fund | |
Income (loss) after tax from discontinued operations | 0.0 | ||||
Income (loss) attributable to minority interests | 15.6 | 6.3 | 9.3 | Other | |
Net income (loss) for the period excluding Badwill & Impairment | 797.0 | 648.6 | 148.4 | ||
of goodwill and client relationship | |||||
2. Performance Details: Profitability 33
FY 2019 RECLASSIFIED P&L - PPA AND IFRS 9 IMPACTS
(A-B):(A-C-E):
A B C D E
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 assets
Net provisions for risks and charges1
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) after tax from discontinued operations Income (loss) attributable to minority interests
Net income (loss) for the period
2019 | 2019 | 2019 | 2019 | 2019 | |
Stated | CE ex PPA | PPA | CE ex PPA | Ricl. | |
(Totale) | e IFRS 9 | IFRS 9 | |||
1,998.0 | 1,981.1 | 16.9 | 1,977.1 | 4.0 | |
131.3 | 131.3 | - | |||
2,129.2 | 2,112.3 | 16.9 | 1,977.1 | 4.0 | |
1,794.4 | 1,794.4 | - | |||
37.2 | 76.0 | -38.8 | 76.0 | ||
332.1 | 332.1 | - | |||
2,163.7 | 2,202.5 | -38.8 | 76.0 | - | |
4,293.0 | 4,314.9 | -21.9 | 2,053.1 | 4.0 | |
-1,696.5 | -1,696.5 | - | |||
-638.6 | -638.6 | - | |||
-268.9 | -268.9 | - | |||
-2,604.0 | -2,604.0 | - | - | - | |
1,688.9 | 1,710.8 | -21.9 | 2,053.1 | 4.0 | |
-778.5 | -778.5 | -774.6 | -4.0 | ||
-158.5 | -158.5 | ||||
5.8 | 5.8 | - | |||
-71.0 | -71.0 | - | |||
333.2 | 333.2 | - | |||
1,019.7 | 1,041.6 | -21.9 | 1,278.6 | - | |
-145.4 | -152.7 | 7.2 | -152.7 | ||
-92.9 | -92.9 | - | |||
- | - | ||||
15.6 | 15.6 | - | |||
797.0 | 811.7 | -14.7 | 1,125.9 | - | |
Operating Costs (specifically D&A item) in first three 2019 quarters have been restated for the application in Q4 of the new valuation model on tangible assets with conseguent effects on PPA. Refer to methodological notes.
2. Performance Details: Profitability 34
FY 2019 RESULTS: NET INTEREST INCOME
Q/Q comparison | Y/Y comparison | |||||||||||||||||||||||||||||
€ m | 505.2 | 514.8 | 500.0 | 477.9 | € m | 2,292.6 | 1,998.0 | |||||||||||||||||||||||
214.6 | 11.1 | |||||||||||||||||||||||||||||
6.2 | 1.2 | 0.7 | 3.1 | |||||||||||||||||||||||||||
499.0 | 513.7 | 499.3 | 474.9 | -4.9% | 2078.0 | 1986.7 | -4.4% | |||||||||||||||||||||||
Q1 19 | Q2 19 | Q3 19 | Q4 19 | FY 18 | FY 19 | |||||||||||||||||||||||||
Core NII | Other | Core NII | Other | |||||||||||||||||||||||||||
Details of Other (Non-Core Components)
€ m | Q319 | Q4 19 |
Reversal PPA | 4,2 | 4,0 |
o/w Bad loans (IFRS 9) | 2,6 | 2,2 |
o/w Unlikely to pay | 14,8 | 14,0 |
o/w Performing loans | -13,3 | -12,2 |
Other IFRS 9 | -1,1 | 1,4 |
Reversal time value on bad loans | 4,8 | 5,0 |
Adjustment on UTP & PD interests | -5,9 | -3,6 |
IFRS 16 | -2,4 | -2,3 |
Total 'OTHER' | 0,7 | 3,1 |
Details of Other (Non-Core Components)
€ m | FY 18 | FY 19 |
Reversal PPA | 143,3 | 16,9 |
o/w Bad loans (IFRS 9) | 119,6 | 12,5 |
o/w Unlikely to pay | 106,1 | 61,6 |
o/w Performing loans | -82,4 | -57,3 |
Other IFRS 9 | 71,3 | 4,0 |
Reversal time value on bad loans | 107,7 | 26,7 |
Adjustment on UTP & PD interests | -36,4 | -22,8 |
IFRS 16 | 0,0 | -9,7 |
Total 'OTHER' | 214,6 | 11,1 |
The yearly decrease of the Non-Core Components of NII is due to the strong derisking activity and has to be read strictly together with the material reduction in the cost of risk
2. Performance Details: Profitability 35
FY 2019 RESULTS: Y/Y COMPARISON
Net Fees and Commissions1 | Net Financial Result | |||||||||||||||||||||||||||||||||||
€ m | 1,860.9 | -3.6% | 1,794.4 | € m | +261.9m 332.1 | |||||||||||||||||||||||||||||||
896.4 | 866.4 -3.3% | |||||||||||||||||||||||||||||||||||
964.6 | 928.1 | -3.8% | 70.2 | |||||||||||||||||||||||||||||||||
FY 18 | FY 19 | FY 18 | FY 19 | |||||||||||||||||||||||||||||||||
Commercial Banking Fees | Management & Advisory | |||||||||||||||||||||||||||||||||||
Operating Costs2 | Loan Loss Provisions | |||||||||||||||||||||||||||||||||||
€ m | 2,792.8 | -6.8% | 2,604.0 | € m | ||||||||||||||||||||||||||||||||
75 | 1,941.1 | -59.9% | ||||||||||||||||||||||||||||||||||
713.9 | ||||||||||||||||||||||||||||||||||||
2,717.8 | ||||||||||||||||||||||||||||||||||||
1,227.2 | -36.5% | 778.5 | ||||||||||||||||||||||||||||||||||
FY 18 | FY 19 | FY 18 | FY 19 | |||||||||||||||||||||||||||||||||
Operating costs | One-off3 | LLPs | "Exodus+ACE" impact | |||||||||||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||||||||||
1.Fees & Commissions include the restatement of the upfront components for the placements of Certificates (previously booked under NFR).2. 2018 figures are not fully comparable, due to the restatement of Q1, Q2 and Q3 2019 Operating Costs (specifically D&A item). Refer to methodological notes. 3.Mainly referring to adjustments on tangible assets.
2. Performance Details: Profitability 36
RECLASSIFIED BALANCE SHEET AS AT 31/12/2019
Reclassified assets (€ m) | Chg. | |||||
31/12/2018 | 31/12/2019 | Value | % | |||
Cash and cash equivalents | 922 | 913 | -9 | -1.0% | ||
Loans and advances measured at AC | 108,208 | 115,890 | 7,682 | 7.1% | ||
- Loans and advances t o banks | 4,193 | 10,044 | 5,851 | 139.5% | ||
- Loans and advances t o cust omers (*) | 104,015 | 105,845 | 1,831 | 1.8% | ||
Other financial assets | 36,853 | 37,069 | 216 | 0.6% | ||
- Asset s measured at FV t hrough PL | 5,869 | 7,285 | 1,416 | 24.1% | ||
- Asset s measured at FV t hrough OCI | 15,352 | 12,527 | -2,825 | -18.4% | ||
- Asset s measured at AC | 15,632 | 17,257 | 1,625 | 10.4% | ||
Equity investments | 1,434 | 1,386 | -48 | -3.4% | ||
Property and equipment | 2,776 | 3,624 | 848 | 30.6% | ||
Intangible assets | 1,278 | 1,269 | -9 | -0.7% | ||
Tax assets | 5,012 | 4,620 | -393 | -7.8% | ||
Non-current assets held for sale and discont. operations | 1,593 | 131 | -1,462 | -91.8% | ||
Other assets | 2,389 | 2,136 | -253 | -10.6% | ||
Total | 160,465 | 167,038 | 6,573 | 4.1% | ||
Reclassified liabilities (€ m) | 31/12/2018 | 31/12/2019 | Value | % | ||
Due to banks | 31,634 | 28,516 | -3,118 | -9.9% | ||
Direct Funding | 105,220 | 109,506 | 4,287 | 4.1% | ||
- Deposits from customers | 90,198 | 93,375 | 3,177 | 3.5% | ||
- Debt securities and financial liabilities desig. at FV | 15,022 | 16,131 | 1,109 | 7.4% | ||
Debts for Leasing | - | 733 | n.m. | n.m. | ||
Other financial liabilities designated at FV | 7,229 | 10,919 | 3,691 | 51.1% | ||
Liability provisions | 1,705 | 1,487 | -218 | -12.8% | ||
Tax liabilities | 505 | 619 | 114 | 22.5% | ||
Liabilities associated with assets held for sale | 3 | 5 | 2 | 67.5% | ||
Other liabilities | 3,864 | 3,366 | -498 | -12.9% | ||
Minority interests | 46 | 26 | -20 | -42.8% | ||
Shareholders' equity | 10,259 | 11,861 | 1,602 | 15.6% | ||
Total | 160,465 | 167,038 | 6,573 | 4.1% |
2019 figures are not fully comparable to 2018 figures as a result of IFRS16 first adoption and for the change in the accounting standard for the valuation of the Group's property and works of art.
Note: * "Customer loans" include the Senior Notes of the two GACS | ||
transactions (Exodus and ACE), for a total of €2.5bn as at 31/12/2019. | 2. Performance Details: Balance Sheet | 37 |
DIRECT FUNDING
Solid position confirmed in core deposits, which account for 79% of the total
Direct customer funding1(withoutRepos)
- bn
Capital-protected Certificates
Other
Bonds
Time deposits
C/A & Sight deposits
(%) Share of total
Note:
+7.3% | +2.3% | 108.9 | |||||||||||||
101.5 | 106.5 | 3.2 | |||||||||||||
3.1 | |||||||||||||||
3.4 | 1.9 | 2.0 | |||||||||||||
2.1 | 14.4 | 15.8 | |||||||||||||
14.9 | 1.8 | 1.6 | |||||||||||||
2.4 | |||||||||||||||
78.7 | 85.2 | 86.2 | |||||||||||||
(78%) | (80%) | (79%) | |||||||||||||
31/12/2018 | 30/09/2019 | 31/12/2019 | |||||||||||||
CHANGE | In % Y/Y | In % Q4 | |||||||||||||
C/A & Sight deposits | |||||||||||||||
9.5% | 1.1% | ||||||||||||||
Time deposits | |||||||||||||||
-32.5% | -10.8% | ||||||||||||||
Bonds | |||||||||||||||
6.7% | 10.4% | ||||||||||||||
Other | |||||||||||||||
-5.6% | 4.5% | ||||||||||||||
Capital-protected Certificates | |||||||||||||||
-3.9% | 3.2% | ||||||||||||||
Direct Funding (excl. Repos) | 7.3% | 2.3% | |||||||||||||
1.Direct funding restated according to a management logic: it includes capital-protected certificates, recognized under 'Held-for-trading liabilities', while it does not include Repos (€3.9bn at December 2019 vs. €7.1bn at December 2018), mainly transactions with Cassa di Compensazione e Garanzia.
2. Performance Details: Funding and Liquidity 38
BOND MATURITIES: LIMITED AND MANAGEABLE AMOUNTS
Institutional bond maturities
- bn
3.75 | ||||||||||||
2.43 | 2.43 | 2.50 | ||||||||||
0.73 | 0.45 | |||||||||||
1.70 | 0.77 | |||||||||||
1.21 | 1.25 | |||||||||||
2020 | 2021 | 2022 | ||||||||||
1 | ||||||||||||
Senior | Subordinated | Covered bond | ||||||||||
Aggregate senior & subordinated in the period 2020-2022: €5.7bn
Managerial data based on nominal amounts, including calls.
Retail bond maturities
- bn
0.35 | 0.50 | ||||||
0.11 | 0.11 | ||||||
0.24 | |||||||
2020 | 2021 | 2022 | |||||
Senior | Subordinated | ||||||
Aggregate senior & subordinated in the period 2020-2022: €1.0bn
Note:
1.Include also the maturities of Repos with underlying retained Covered Bonds: €0.45bn in 2021 and €0.50bn in 2022
2. Performance Details: Funding and Liquidity 39
INDIRECT CUSTOMER FUNDING AT €89.7BN
Assets under Management | Assets under Custody1 | ||||||||||||||||||||||||||
€ bn | € bn | ||||||||||||||||||||||||||
55.7 | 57.6 | 58.3 | |||||||||||||||||||||||||
4.8 | 4.0 | 3.9 | 31.3 | 31.5 | 31.4 | ||||||||||||||||||||||
14.9 | 15.2 | 15.4 | |||||||||||||||||||||||||
38.5 | 39.0 | ||||||||||||||||||||||||||
36.0 | |||||||||||||||||||||||||||
31/12/2018 | 30/09/2019 | 31/12/2019 | 31/12/2018 Adj. | 30/09/2019 | 31/12/2019 |
Managed Accounts and Funds of Funds
Bancassurance
Funds & Sicav
- Total Indirect Customer Funding at €89.7bn: +3.2% YTD and +0.6% q/q
- Growth in the AuM component (at €58.3bn: +4.7% YTD and +1.2% q/q), registering:
- A confirmed positive trend of Funds & Sicav (+8.5% YTD and +1.5% q/q)
- The recovery is consolidating in Bancassurance (+3.2% YTD and +1.4% q/q )
- Assets under Custody are up YTD (+0.5%), while registering a slight decline in the quarter(-0.4%)
- The progressive increase in C/A & deposits (+€6.7bn since 31/12/18, of which +€0.7bn in Q4) offers opportunity to boost wealth management business
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 38).
2. Performance Details: Funding and Liquidity 40
STRONG LIQUIDITY POSITION: LCR >165% & NSFR >100%1
Eligible Securities2 | +€1.9bn in the | UnencumberedLiquid | ||||||||||||
Up at >€22bn atSecurities as at 31/12/2019 | ||||||||||||||
year | ||||||||||||||
end-Jan. 2020 | € bn | |||||||||||||
€ bn | 54.9 | 54.0 | 1.6 | 2.7 | 29.8 | |||||||||
5.6 | ||||||||||||||
Unencumb. | ||||||||||||||
21.1 | 19.9 | 19.9 | ||||||||||||
Eligible securities | ||||||||||||||
Encumbered with Repos & other
Encumbered with
ECB
12.6 | 13.3 |
21.2 | 20.8 |
30/09/19 | 31/12/19 |
Net of the | ||||||
accrued interest | ||||||
Unencumb. | Excess ECB | HQLA lent 3Marketable | TOTAL | |||
Eligible | deposits | securities | LIQUID | |||
Securities | (non-eligible) | SECURITIES |
Breakdown of the exposure with the ECB
as at 31/12/2019
€ bn | 20.8 | Other | |||||||
4% | Retained | ||||||||
MRO | 4.0 | Covered | |||||||
Bonds | |||||||||
TLTRO III | 1.5 | ||||||||
Abaco | €20.8bn | 32% | |||||||
TLTRO II | 15.3 | 47% | |||||||
Self | |||||||||
securitisation | |||||||||
31/12/2019 | |||||||||
17% |
- €29.8bn of total unencumbered liquid securities(net of haircuts) as at 31/12/2019
- Long-termbilateral refinancing operations at €3.4bneuro (net of haircuts), with an average maturity of 2.2 years
- In Q4 2019, €6bn of TLTRO II were reimbursed and €1.5bn of TLTRO III and €4bn of MRO drawn
- >€10bn of assetsencumbered with ECBare rated A or higher: easy to refinance at good conditions
- €9.7bn of credit claims (ABACO)encumbered with ECBare eligible for securitisations
Internal management data, net of haircuts
Notes:
1. | Monthly LCR of December 2019; NSFR for Q4 2019. | 2. Performance Details: Funding and Liquidity 41 |
2. | Includes assets received as collateral. |
3.Refers to securities lending (uncollateralized high quality liquid assets).
SECURITIES PORTFOLIO
€ bn
31/12/18 | 30/09/19 | 31/12/19 | Chg. y/y | Chg. in Q4 | |||||
Debt securities | 32.9 | 34.2 | 31.2 | -5.0% | -8.8% | ||||
- o/w Total Govies | 27.5 | 29.7 | 26.4 | -4.0% | -10.9% | ||||
- o/w: Italian Govies | 17.7 | 19.3 | 15.5 | -12.0% | -19.8% | ||||
IT Govies in % on Debt Securities | 53.7% | 56.5% | 49.7% | -7.4% | -12.0% | ||||
Equity securities, Open-end funds & Private equity | 1.8 | 2.2 | 2.5 | 40.5% | 15.8% | ||||
TOTAL SECURITIES | 34.7 | 36.4 | 33.8 | -2.6% | -7.3% | ||||
€ bn | 31/12/18 | 30/09/19 | 31/12/19 | Chg. y/y | Chg. in Q4 | ||||
Govies in the
Banking Book
Govies at FVOCI
- Italian
- Non Italian
Govies at AC
- Italian
- Non Italian
11.7 | 10.0 | 9.1 | -22.4% | -9.3% | ||
6.6 | 5.9 | 4.6 | -29.4% | -21.3% | ||
5.1 | 4.1 | 4.4 | -13.5% | 7.9% | ||
15.1 | 16.5 | 15.7 | ||||
4.3% | -4.7% | |||||
10.3 | 10.9 | 10.0 | -3.2% | -8.5% | ||
4.7 | 5.6 | 5.7 | 20.7% | 2.7% | ||
Govies at FVTPL | 0.8 | 3.1 | 1.6 | 115.9% | -48.3% | |||
- Italian | 0.8 | 2.5 | 0.9 | 17.6% | -65.0% | |||
- Non Italian | 0.0 | 0.6 | 0.7 | n.m. | 20.4% | |||
2. Performance Details: Funding and Liquidity 42
NET CUSTOMER LOANS
Satisfactory increase in Performing Loans, with new loans granted at €21.4bn in FY 20191
Net Customer Loans2
€ bn | 104.0 | 107.0 | 105.8 | |||||||||||||||||
NPE | 6.7 | 6.0 | 5.5 | |||||||||||||||||
97.3 | 101.1 | 100.3 | ||||||||||||||||||
Performing Loans | ||||||||||||||||||||
31/12/2018 | 30/09/2019 | 31/12/2019 | ||||||||||||||||||
CHANGE | ||||||||||||||||||||
PERFORMING LOANS | 31/12/18 | 30/09/19 | 31/12/19 | In % y/y | In % Q4 | |||||||||||||||
Core customer loans | 88.6 | 92.0 | 91.1 | 2.9% | -1.0% | |||||||||||||||
- Medium/Long-Term loans | 58.6 | 62.0 | 62.5 | 6.8% | 0.9% | |||||||||||||||
- Current Accounts | 11.2 | 11.2 | 10.5 | -6.2% | -5.8% | |||||||||||||||
- Other loans | 16.9 | 17.0 | 16.1 | -4.6% | -4.9% | |||||||||||||||
- Cards & Personal Loans | 1.9 | 1.9 | 2.0 | 3.4% | 3.1% | |||||||||||||||
Leasing | 1.0 | 1.0 | 1.0 | -9.3% | -3.7% | |||||||||||||||
Repos | 6.2 | 5.5 | 5.7 | -8.2% | 4.7% | |||||||||||||||
GACS Senior Notes | 1.4 | 2.6 | 2.5 | 75.1% | -3.6% | |||||||||||||||
Total Performing Loans | 97.3 | 101.1 | 100.3 | 3.1% | -0.8% | |||||||||||||||
Customer Loans as at 30/09/19 are restated including Profamily non-captive volumes. See Methodological Notes for details.
Notes:
1.Management data. Include MLT 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. 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). Year-end 2018 data already excluded €1.3bn Bad Loans (having being classified as discontinued operation), then disposed with the ACE project in Q1 2019.
2. Performance Details: Customer Loans and Focus on Credit Quality 43
ASSET QUALITY DETAILS
GROSS EXPOSURES | 31/12/2018 | 30/09/2019 | 31/12/2019 | Chg. y/y | Chg. in Q4 | ||||||||
€/m and % | Incl. Profamily | Value | % | Value | % | ||||||||
Bad Loans | 3,939 | 3,395 | 3,565 | 170 | |||||||||
-375 | -9.5% | 5.0% | |||||||||||
UTP | 7,768 | 6,949 | 6,424 | -1,345 | -17.3% | -525 | -7.6% | ||||||
Past Due | 106 | 131 | 98 | -8 | -7.2% | -32 | -24.7% | ||||||
NPE | 11,814 | 10,474 | 10,087 | -1,727 | -14.6% | -387 | -3.7% | ||||||
Performing Loans | 97,659 | 101,438 | 100,631 | 2,972 | 3.0% | -807 | -0.8% | ||||||
TOTAL CUSTOMER LOANS | 109,473 | 111,912 | 110,718 | 1,245 | 1.1% | -1,195 | -1.1% | ||||||
NET EXPOSURES | 31/12/2018 | 30/09/2019 | 31/12/2019 | Chg. y/y | Chg. in Q4 | ||||||||
€/m and % | Incl. Profamily | Value | % | Value | % | ||||||||
Bad Loans | 1,591 | 1,488 | 1,560 | -32 | -2.0% | 72 | 4.8% | ||||||
UTP | 5,048 | 4,373 | 3,912 | -1,136 | -22.5% | -462 | -10.6% | ||||||
Past Due | 88 | 107 | 73 | -15 | -16.6% | -34 | -31.8% | ||||||
NPE | 6,727 | 5,968 | 5,544 | -1,183 | -17.6% | -424 | -7.1% | ||||||
Performing Loans | 97,288 | 101,072 | 100,301 | 3,013 | 3.1% | -771 | -0.8% | ||||||
TOTAL CUSTOMER LOANS | 104,015 | 107,040 | 105,845 | 1,831 | 1.8% | -1,195 | -1.1% |
COVERAGE | 31/12/2018 | 30/09/2019 | 31/12/2019 |
% | Incl. Profamily | ||
Bad Loans | 59.6% | 56.2% | 56.2% |
UTP | 35.0% | 37.1% | 39.1% |
Past Due | 17.5% | 18.2% | 25.9% |
NPE | 43.1% | 43.0% | 45.0% |
Performing Loans | 0.38% | 0.36% | 0.33% |
TOTAL CUSTOMER LOANS | 5.0% | 4.4% | 4.4% |
Data refer to Loans and advances to customers measured at Amortized Cost, including also the GACS Senior Notes.
Customer Loans as at 30/09/19 restated including Profamily non-captive volumes. Refer to Methodological Notes for details.
2. Performance Details: Customer Loans and Focus on Credit Quality 44
UTP LOANS: HIGH SHARE OF RESTRUCTURED AND SECURED POSITIONS
UTP analysis | Breakdown of Net UTPs |
€ bn | -17.3% | Unsecured | ||||
7.8 | YTD | Secured | ||||
2.9 | 6.4 | (%) | % composition | |||
(37%) | ||||||
2.5 | 2.5 | 3.9 | 1.1 | |||
(39%) | ||||||
4.9 | (29%) | 2.8 | ||||
(63%) | 3.9 | |||||
(61%) | (71%) | |||||
Gross | Gross | Adjustments | Net | Unsec. | Sec. | |
Exposure | Exposure | Book | ||||
31/12/18 | 31/12/19 | value | ||||
Coverage ratio: | 39.1% | 55.2% | 28.6% |
€ bn | |||
31/12/18 | 31/12/2019 | % Chg. | |
Restructured | 2.3 | 1.7 | -27.2% |
- Secured | 1.3 | 0.9 | -29.0% |
- Unsecured | 1.1 | 0.8 | -25.1% |
Other UTP | 2.7 | 2.2 | -18.8% |
- Secured | 2.3 | 1.9 | -15.6% |
- Unsecured | 0.5 | 0.3 | -34.8% |
5.0 | 3.9 | -22.5% |
o/w:
- Nort h | 68.8% | 72.6% |
- Cent re | 22.8% | 20.9% |
- Sout h, Islands | 8.4% | 6.5% |
& not resident | ||
- Solid level of coverage for unsecured UTP: 55.2%
- Net Restructured loans (€1.7bn) account for 43% of total net UTP: they are essentially related to formalized underlying restructuring plans and procedures (mainly under Italian credit protection procedures)
- Net unsecured UTP other than Restructured loans are limited to €0.3bn
- ~94% of Net UTPs are located in the northern & central parts of Italy
2. Performance Details: Customer Loans and Focus on Credit Quality 45
CAPITAL POSITION DETAILS
PHASED IN CAPITAL | 31/12/2018 | 30/09/2019 | 31/12/2019 | ||||||||||||
POSITION(€/m and %) | |||||||||||||||
CET 1 Capital | 7,754 | 9,254 | 9,586 | ||||||||||||
T1 Capital | 7,888 | 9,686 | 10,017 | ||||||||||||
Total Capital | 9,442 | 10,966 | 11,542 | ||||||||||||
RWA | 64,324 | 67,278 | 65,841 | ||||||||||||
CET 1 Ratio | 12.05% | 13.75% | 14.56% | ||||||||||||
AT1 | 0.21% | 0.64% | 0.66% | ||||||||||||
T1 Ratio | 12.26% | 14.40% | 15.21% | ||||||||||||
Tier 2 | 2.42% | 1.90% | 2.32% | ||||||||||||
Total Capital Ratio | 14.68% | 16.30% | 17.53% | ||||||||||||
FULLY PHASED CAPITAL | 31/12/2018 | 30/09/2019 | 31/12/2019 | ||||||||||||
POSITION(€/m and %) | |||||||||||||||
CET 1 Capital | 6,406 | 8,097 | 8,453 | ||||||||||||
T1 Capital | 6,410 | 8,399 | 8,754 | ||||||||||||
Total Capital | 7,964 | 9,679 | 10,280 | ||||||||||||
RWA | 64,034 | 67,165 | 65,856 | ||||||||||||
CET 1 Ratio | 10.00% | 12.06% | 12.84% | ||||||||||||
AT1 | 0.01% | 0.45% | 0.46% | ||||||||||||
T1 Ratio | 10.01% | 12.51% | 13.29% | ||||||||||||
Tier 2 | 2.43% | 1.91% | 2.32% | ||||||||||||
Total Capital Ratio | 12.44% | 14.41% | 15.61% | ||||||||||||
RWA COMPOSITION | 31/12/2018 | 30/09/2019 | 31/12/2019 | |
(€/bn) | ||||
CREDIT & | 56.3 | 59.3 | 57.9 | |
COUNTERPARTY RISK | ||||
of which: Standard | 27.7 | 29.5 | 28.0 | |
MARKET RISK | 1.9 | |||
2.0 | 1.9 | |||
OPERATIONAL RISK | 5.9 | |||
5.7 | 5.8 | |||
CV A | 0.2 | |||
0.3 | 0.2 | |||
TOTAL | 64.3 | 67.3 | 65.8 | |
RWA COMPOSITION | 31/12/2018 | 30/09/2019 | 31/12/2019 | ||
(€/bn) | |||||
CREDIT & | 56.0 | 59.2 | 58.0 | ||
COUNTERPARTY RISK | |||||
of which: Standard | 27.4 | 29.4 | 28.0 | ||
MARKET RISK | 2.0 | ||||
2.0 | 1.9 | ||||
OPERATIONAL RISK | 5.9 | ||||
5.7 | 5.8 | ||||
CV A | 0.2 | ||||
0.3 | 0.2 | ||||
TOTAL | 64.0 | 67.2 | 65.9 | ||
Ratios as at 30/09/2019 include the contribution of the Q3 2019 net result and those as at 31/12/2019 include the net result, post dividend, pertaining to H2 2019 (see methodological notes for details).
2. Performance Details: Capital Position 46
STRENGTHENING CAPITAL EFFICIENCY AND BUFFERS
Wide capital buffers, both at Phased-in and Fully Loaded level
ADDITIONAL TIER 1 CAPITAL RATIO
Does not consider
the €400m AT1
TIER 2 CAPITAL RATIO
Phased-in
0.6% | 0.7% | |
0.2% | ||
31/12/18 | 30/09/19 | 31/12/19 |
Fully Loaded
0.4% | 0.5% | |
0.0% | ||
31/12/18 | 30/09/19 | 31/12/19 |
issued in Jan. 2020 (corresponding to 61 bps)
Phased-in & Fully Loaded
2.4% | 2.3% |
1.9% | |
+40bps | |
in Q4 |
SREP Requirements
31/12/18 | 30/09/19 | 31/12/19 |
% | Phased-in | Fully Loaded | SREP buffers on CET 11 | MDA buffers2 | |
2019 | 2019 | ||||
(2020) | (2020) | ||||
CET 1 Ratio
Tier 1 Ratio
Total
Capital Ratio
9.315% 9.505%
(9.385%) 9.505%)
10.815% 11.005%
(10.885%) (11.005%)
12.815% 13.005%
(12.885%) (13.005%)
Phased-in+525bps
Fully Loaded | +334bps |
Phased-in+440bps
Fully Loaded | +229bps |
Notes: 1.Calculated considering SREP requirements for 2019. 2.The figures do not include the €400m AT1 instrument issued in January 2020, corresponding to 61bps.
2. Performance Details: Capital Position 47
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)
48
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Banco BPM S.p.A. published this content on 06 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 February 2020 20:57:01 UTC
