BAWAG GROUP AG BAWAG Group
Q3 2022 Credit update
19 October 2022
August19Oc ober20212022| BAWAG| BAWAGGroup GroupAG AG
BAWAG Group franchise
FRANCHISE
DELIVERING
RESULTS
BEST-IN-CLASS
EFFICIENCY
GOOD STEWARDS
OF CAPITAL
RETURN TARGETS
2025 PLAN
Multi-brand and multi-channel commercial bank with approximately 2.1 million customers across our core markets
Mid-teens Return on Tangible Common Equity (RoTCE) ~14% versus sector of ~5% since 2012
Cost-incomeratio (CIR) of 39.5% in 2021 driven by simplification, technology and process focus
Since IPO, completed 7 acquisitions and distributed €1.4 billion capital (€1.0 billion dividends and €400 million buyback)
New capital distribution policy: Dividend payout of 55% from 2022 … share buyback of €325 million in progress since end of July 2022 … ~ 65% completed as of October 18
Return on tangible common equity (RoTCE) >17% and Cost-income ratio (CIR) <38%
By 2025, pre-tax profit >€750 million and EPS >€7.25 with ~10% annual EPS growth through 2025; DPS >€4.00
19 October 2022 | BAWAG Group AG | 2 |
BAWAG Group structure
Legal structure and issuer of debt instruments
BAWAG Group
(Issuer capital instruments: AT1, Tier2)
BAWAG P.S.K
(Issuer debt instruments: SNP, SP, Covered)
BAWAG PSK | |||||
start:bausparkasse | … | ||||
Wohnbaubank | |||||
Shareholder structure
5% shares bought back
89.1m shares
Top institutional shareholders (>4% holding):
T. Rowe Price | 5.6% |
Wellington | 5.0% |
GoldenTree | 4.6% |
BAWAG Senior Leadership Team | 3.3% |
(Management Board: 3.0%) |
1) BAWAG P.S.K., easybank and Südwestbank are the main brands for banking operations of BAWAG P.S.K. | Number of shares: 89,142,237; Shares bought back based on 18 October 2022 |
19 October 2022 | BAWAG Group AG | 3 |
Highlights Q3 2022
- | Q3 '22 incorporates full write-off of City of Linz receivable of €254m in risk cost (€190m after tax) | |
- Q3 '22 (including City of Linz): Net loss of €(58)m and EPS €(0.66) | ||
EARNINGS | - | Adjusted Q3 '22 (excluding City of Linz): Net profit of €132m, EPS of €1.49, and RoTCE of 19.3% |
- Pre-provision profit of €218m (+17% vPY) and CIR at 35.1% | ||
- Risk costs of €35m, of which €12m related to ECL management overlay that stands at €82m | ||
- Average customer loans flat vPQ and +9% vPY | ||
BALANCE SHEET & | - | CET1 ratio at 13.0% … deducting €325m buyback and €207m dividend accrual (55% adjusted net profit) |
CAPITAL | - Bank positioned for rising interest rate environment that will materialize in the coming quarters |
- Solid credit performance across the business … NPL ratio 1.0% with management overlay ~1x annual risk costs | |
- Execution of €325m share buyback started on 25 July with ~65% executed as of October 18 | |
OUTLOOK | - Maintaining dry powder to address potential organic and inorganic opportunities in the coming quarters |
- Reconfirmed 2022 targets (adjusted): Profit before tax >€675m, RoTCE >17%, and CIR < 38% | |
- Updating outlook for core revenue growth to ~9% in 2022 | |
19 October 2022 | BAWAG Group AG | 4 |
Financial performance
P&L | € million | Q3'22 | Q3'22 | vPY | YTD '22 | YTD'22 | vPY | ||||||||
reported | adjusted | reported | adjusted | |||||||||||
Core revenues | 335 | 335 | 10% | 986 | 986 | 9% | ||||||||
Operating income | 336 | 336 | 9% | 993 | 993 | 9% | ||||||||
Operating expenses | (118) | (118) | (2%) | (357) | (357) | (2%) | ||||||||
Pre-provision profit | 218 | 218 | 17% | 636 | 636 | 16% | ||||||||
Regulatory charges | (3) | (3) | (21%) | (49) | (49) | (19%) | ||||||||
Risk costs | (290) | (35) | 64% | (340) | (86) | 15% | ||||||||
Profit before tax | (73) | 181 | 12% | 249 | 504 | 22% | ||||||||
Net profit | (58) | 132 | 7% | 186 | 377 | 19% | ||||||||
Balance Sheet & Capital | € million Total assets Interest-bearing assets (average) Customer loans (average) Customer deposits (average) Common Equity Tangible Common Equity CET1 Capital Risk-weighted assets CET1 Ratio (post dividend)
Q3'22 | Q2'22 | vPQ | vPY |
55 997 | 55 029 | 2% | 3% |
44 733 | 44 530 | - | 8% |
36 804 | 36 764 | - | 9% |
34 219 | 33 558 | 2% | 3% |
3 207 | 3 351 | (4%) | (11%) |
2 678 | 2 820 | (5%) | (12%) |
2 764 | 2 699 | 2% | (7%) |
21 343 | 21 326 | - | 5% |
13.0% | 12.7% | 0.3pts | (1.7pts) |
Ratios | Q3'22 | Q3'22 | vPY | YTD '22 | YTD'22 | vPY | ||||||
reported | adjusted | reported | adjusted | |||||||||
RoCE | (7.1%) | 16.2% | 2.3pts | 7.6% | 15.4% | 3.4pts | ||||||
RoTCE | (8.5%) | 19.3% | 2.9pts | 9.1% | 18.4% | 4.2pts | ||||||
CIR | 35.1% | 35.1% | (4.1pts) | 35.9% | 35.9% | (4.0pts) | ||||||
Risk cost ratio | 2.59% | 0.32% | 0.11pts | 1.04% | 0.26% | 0.02pts | ||||||
Earnings per share (€) | (0.66) | 1.49 | 8% | 2.10 | 4.24 | 20% | ||||||
Per share data Book value (€) Tangible book value (€) Shares outstanding (€ m)
Q3'22 | vPQ | Q3'21 | vPY |
37.57 | - | 40.46 | (7%) |
31.38 | (1%) | 34.43 | (9%) |
85.34 | (4%) | 88.86 | (4%) |
Note: All equity, capital, ratios and per share data reflect deduction of €207m dividend accrual and €325m buyback for Q3 2022 figures. "Adjusted" view excludes write-off of City of Linz receivable of €254m (€190m after tax).
19 October 2022 | BAWAG Group AG
5
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BAWAG Group AG published this content on 19 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2022 21:19:17 UTC.
