Groups Results 9M17 9M17 Highlights Groups growth strategy was - - PowerPoint PPT Presentation

▶
group s results 9m17 9m17 highlights
SMART_READER_LITE
LIVE PREVIEW

Groups Results 9M17 9M17 Highlights Groups growth strategy was - - PowerPoint PPT Presentation

Mar 12, 2023 202 likes •443 views

Groups Results 9M17 9M17 Highlights Groups growth strategy was confirmed by the increase of all aggregates, both Loans and Customers Funding. In detail: Wealth Managements strong expansion continued, with AUM and Insurance

slide-1
SLIDE 1

Group’s Results 9M17

slide-2
SLIDE 2

2

Group’s growth strategy was confirmed by the increase of all aggregates, both Loans and Customers’ Funding. In detail: Wealth Management’s strong expansion continued, with AUM and Insurance Reserves exceeding €33 billion at the end of 9M17, as a result of the €2.5 billion increase since the beginning of 2017 (+8.2% ytd) Loans to Customers were up by €1.5 billion YoY (+6.9%), accelerating furtherly toward the Industry (overperformance increased by 1.3%) The above mentioned expansion of the various business aggregates drove Operating Income up by 6% YoY, with Interest Margin up by 5% YoY and «core» Non Interest Income up by 6.7% YoY. Internal capital generation resulting from such growth fostered capital ratios, with Fully Phased CET1 Ratio at 12.8%*, up by 90 bps since the end of 2016 Annualized Cost of Risk improved furtherly, posting 22 bps in 9M17, with an exceptional performance in the quarter (~€10 million). It is worth to highlight that Gross NPLs average quarterly flows were negative for the fourth quarter in a row. The total decrease in the stock was -€17.2 million YoY, net of NPLs disposal 9M17 Net Profit was €146.5 million (+42.1% YoY), with 3Q17 figure at €45.2 million (+38.2% QoQ) despite a circa €10 million contribution to the Deposit Guarantee Scheme**

9M17 Highlights

Loans to Customers are net of Repos with Institutional sand Loans to Group’s SPVs . (*) Phased-in capital ratio related to the group’s prudential (Credemholding level) (**) gross of fiscal effect

slide-3
SLIDE 3
  • «Core» revenues grew by

almost 6% YoY in 9M17 (the stated aggregate performed +6.3% YoY) thank to both Interest Margin and Non Interest Income positive evolution

  • Operating Costs’ pace of

growth decelerated (+1.4% YoY in 9M17)

  • Net Adjustments to Loans

performed very well with

  • nly ~€10 million in the

quarter (-36.9% YoY), while the 9M17 aggregate was down 16% YoY

  • 9M17

Net Consolidated Profit growth was confirmed and reached €146.5 million (+42.1% YoY), thank to a quarterly result above €45 million (+38.2% vs 3Q16)

€, million

3Q16 2Q17 3Q17

% 3Q17 vs 3Q16

9M16 9M17

% 9M17 vs 9M16

Operating Income 258.1 297.2 264.8 2.6% 800.4 850.6 6.3%

  • Op. Income net of

Income from Fin. Activities and Perf. Fees 249.9 263.3 261.3 4.6% 746.5 790.7 5.9% Operating Costs

  • 171.6
  • 184.1
  • 169.3
  • 1.3%
  • 531.9
  • 539.2

1.4% D&A

  • 11.6
  • 12.3
  • 12.3

6.0%

  • 33.9
  • 36.1

6.5% Net Operating Profit 74.9 100.8 83.2 11.1% 234.6 275.3 17.3% Net Adjustments to Loans

  • 15.7
  • 18.2
  • 9.9
  • 36.9%
  • 47.2
  • 39.3
  • 16.7%

Provisions for Risks and Charges

  • 2.0
  • 2.1

0.2 n.s.

  • 7.4

0.8 n.s. Extraordinary Income/Expenses

  • 9.6
  • 0.8
  • 8.7

n.s.

  • 27.3
  • 20.9

n.s. Pre Tax Profit 47.6 79.7 64.8 36.1% 152.7 215.9 41.4% Taxes

  • 14.9
  • 27.4
  • 19.6

31.5%

  • 49.6
  • 69.4

39.9% Net Profit for the Period 32.7 52.3 45.2 38.2% 103.1 146.5 42.1%

3

Income Statement

slide-4
SLIDE 4

209.9 224.4 220.7 224.4 234.0 248.8 247.7 256.5 263.6

200 210 220 230 240 250 260 270 280 Avg 2009 Avg 2010 Avg 2011 Avg 2012 Avg 2013 Avg 2014 Avg 2015 Avg 2016 Avg 2017

  • First 9 months of 2017 once again confirmed how a steady volumes’ growth translated into a

«core» revenues increase (net of more volatile components, such as Income from Financial Activities and Performance Fees), despite the strong pressure on earnings, driven by interest rates environment and harsh competition on pricing

  • 2017 quarterly average operating income is, so far, 3% higher compared to 2016 and more than 25%

higher since the beginning of the crisis

+25.6%

4

Average quarterly Core Operating Income (net of Income for Financial Activities and Performance Fees)

Operating Income

€, million

slide-5
SLIDE 5

106.2103.8 111.2 117.0114.9 111.1 112.3 117.5118.1118.8 118.4

80 90 100 110 120

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

5

Interest Margin was still on the rise both in the quarter (+5.4% YoY compared to 3Q16) and in the first nine months (+5% 9M17 vs 9M16), while was substantially stable QoQ Customers’ spread continued to shrink because

  • f

the fierce competition

  • n

lending +5.4%

Interest Margin (1/3)

Quarterly Interest Margin

€, million

Quarterly Customers’ Spread

(Credem SpA management accounting)

Euribor and BTP/Bund spread: evolution

2.14 2.12 2.07 2.04 2.02 1.95 1.88 1.86 1.89 1.87 1.81 2.92 2.76 2.62 2.51 2.45 2.34 2.22 2.15 2.13 2.06 1.97 0.78 0.64 0.55 0.47 0.42 0.39 0.34 0.29 0.24 0.19 0.16

0.0 0.5 1.0 1.5 2.0 2.5 3.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

Spread Average loans rate Average deposit rate

0.05% 0.01%-0.03%

  • 0.09%
  • 0.18%
  • 0.26%-0.30%-0.31%-0.33%-0.33%
  • 0.33%

116 127 121 103 116 131 126 156 180 187 164

30 60 90 120 150 180

  • 0.5%
  • 0.4%
  • 0.3%
  • 0.2%
  • 0.1%

0.0% 0.1%

3 months Euribor (%) Spread (bps) BTP vs. Bund 10 yrs

slide-6
SLIDE 6

2.09 1.93 1.86 1.89 1.87 1.81 2.11 1.97 1.89 1.86 1.85 1.82 .00 .60 .20 2015 2016 4Q16 1Q17 2Q17 3Q17

Credem: Spread Industry: Spread 0.61 0.36 0.29 0.24 0.19 0.16 1.31 1.07 1.01 1.00 0.95 0.95

  • 0.60

1.20 2015 2016 4Q16 1Q17 2Q17 3Q17

Credem: average deposit rate Industry: average deposit rate

2.70 2.29 2.15 2.13 2.06 1.97 3.42 3.04 2.90 2.85 2.80 2.77

  • 0.50

1.00 1.50 2.00 2.50 3.00 3.50 2015 2016 4Q16 1Q17 2Q17 3Q17

Credem: average loans rate Industry: average loans rate

6

Fonte: ABI Monthly Outlook October 2017

%

Group Customers’ Spread narrowed because of the strong competition on loans, but remained in line with the Industry level (1.81 vs 1.82)

%

  • 0.02
  • 0.72
  • 0.71
  • 0.70
  • 0.75
  • 0.01
  • 0.75
  • 0.72
  • 0.72
  • 0.76

%

  • 0.04
  • 0.03
  • 0.74
  • 0.76

0.03

  • 0.80
  • 0.79

0.02

Interest Margin (2/3)

Evolution of Average Loan Rate

(Credem SpA management accounting)

Evolution of Average Deposit Rate

(Credem SpA management accounting)

Evolution of Average Customers’ Spread

(Credem SpA management accounting)

slide-7
SLIDE 7

7

Securities’ portfolio has been progressively rebuilt in the quarter, growing by €800 million in comparison with the balance at end

  • f

1H17. Purchases involved mostly US treasury

  • bonds. Consequently, the incidence of

Italian securities declined

  • Portfolio’s average maturity remains at

around 6 years

Interest Margin (3/3)

Securities’ Portfolio Breakdown

(Credem SpA management accounting)

Banking Group Securities’ Portfolio

€, million

15% 14% 19% 20% 26% 24% 18% 38% 25% 30% 25% 33% 11% 9% 8% 7% 8% 7% 56% 39% 48% 43% 41% 36% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 1Q17 2Q17 3Q17

Other non-Italy Other Govies / EFSF/ EIB Other Italy Italian Govies

39% 14% 46% 0%

0% 20% 40% 60% 80% 100%

Rating distribution

Altro BBB A AAA/AA

6,219 6,420 7,401 6,641 6,589 5,781 6.0 1 2 3 4 5 6 7 Average maturity (years)

Securities’ Portfolio details

(Credem SpA management reporting)

slide-8
SLIDE 8

69.1 75.0 72.1 88.2 85.5 85.5 82.5 10.4 12.2 14.6 15.0 12.2 12.0 12.6 46.0 46.6 46.3 49.4 45.0 43.6 44.2 38.8 6.4 7.7 15.3 22.1 33.4 3.0 11.6 10 60 110 160 210 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

Performance Fees Income from Financial Activities Other Banking Fees Insurance Fees Asset Management and Brokerage Fees

8

Non Interest Income grew very healthy, with «core» NII expanding by 6.7% YoY (9M17 vs 9M16) and by 7.2% YoY also considering the contribution of Financial Activities. Such performance was mainly driven by Asset Manangement Fees (+17.3% YoY), despite the third quarter was penalized by the usual seasonality

Non Interest Income

Non Interest Income: Quarterly Evolution

€, million

Non Interest Income (net of

Income from Fin. Act. and Perf. Fees)

169.5 130.5 146.8 140.1 137.6 145.8 188.8 161.9 148.1 170.5 178.3 144.4

+ 6.7%

142.9 146.4

+ 7.2%

slide-9
SLIDE 9

9

  • Costs’ pace of growth continued to slow

down, at +1.4% YoY in the first 9M17 (was +4% considering 9M16 vs 9M15)

  • Looking at 3Q17 figure only, Operating Costs

were down 1.3% YoY compared to 3Q16 Employees Financial Advisors

Operating Costs

Operating Costs: Quarterly Evolution Employees / Networks Creacasa and Salary backed loans Agents

123 121 115 131 127 123 118 57 60 56 51 59 61 51

50 100 150 200 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

Payroll Administrative Expenses

€, million

179 181 172 181 184 186 169 +1.4%

5,740 5,544 5,519 5,604 5,609 5,763 5,899 6,068 6,134 2009 2010 2011 2012 2013 2014 2015 2016 9M17

1,006 885 795 750 770 785 827 855 837 158 217 272 359 353 394 376 361 314

slide-10
SLIDE 10

7,484 7,667 8,114 8,296 8,742 9,834 10,328 9,049 10,488 9,767 1,941 1,935 2,001 2,042 2,014 2,100 2,175 2,285 2,328 2,371 5,534 5,845 6,282 6,241 6,127 6,235 6,392 6,655 6,715 6,710 2,577 3,323 3,324 3,370 3,056 3,339 3,755 3,977 4,156 4,626

4,000 8,000 12,000 16,000 20,000 24,000

2009 2010 2011 2012 2013 2014 2015 9M16 2016 9M17 Short-Term Loans Leasing Residential Mortgage Other Loans

10

Loans to Customers continued to grow with high inflows amounting to a remarkable +€1.5 billion in 9M17, increasing by almost 7% YoY (compared to +4.9% 1H17 vs 1H16) YoY growth continued to be even more significant for Other Loans (+16.3% YoY). Remarkably, Short Term Lending was back to growth (+7.9% YoY), while Residential Mortgages were substantially flat (+0.8% YoY) as a result of the strong competitive pressure

17,536 18,770 19,721 19,949 17,536 18,884 20,643 19,938 19,938 21,695 22,649 23,093 21,508 21,966 19,995 21,966 23,687 23,687 23,474 23,474

+6.9%

Loans to Customers

Loans to Customers (net of Repos with Institutional and Loans to Group’s SPVs)

€, million

Loan to Customer

(Balance Sheet figure)

slide-11
SLIDE 11

0.55% 0.45% 0.44%0.43% 0.40%0.42%0.43% 0.39% 0.45% 0.2% 0.3% 0.4% 0.5% 0.6% Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Aug. 2016 Dec. 2016 Aug. 2017

MS on Gross Bad Loans

90 100 110 120 130 140 150 2009 2010 2011 2012 2013 2014 2015 2016 9M17

Industry Credem

1.07% 1.16%1.20% 1.28% 1.48% 1.58%1.54% 1.66%1.68% 1.0% 1.3% 1.6% Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Aug. 2016 Dec. 2016 Aug. 2017

MS on Performing Loans 11

Loans to Customers: comparison with the Industry

Loans to Customers growth (Retail and Public Sector) Market shares on retail, corporate customers and small business (net of financial institutions)

(Credem SpA management reporting) Credem YoY over-performance (∆%)

Source: ABI Monthly Outlook October 2017; Bankit data: data flows from «Matrice dei Conti Bankit (Bastra1)» since December 2011. Bankit Public database (Bollettino Bankit) until November 2011

Credem Group kept an edge over the Industry, that exceeded the 1% growth treshold after many years. Despite an intense competitive environment, the

  • verperformance was higher than

FY16 and 1H17 (when it had been around +4%), reaching +5.6% YoY The growth in Bad Loans’ market share, despite the stock decrease, was due to material NPLs disposal deals performed by many italian banks during 2017

2.9 2.2 3.8 4.2 9.2 5.5 5.6

+6.9% YoY +1.3% YoY

%

+44% 4.2

2009: base 100

slide-12
SLIDE 12

12

€, million 2013 2014 2015 2016 9M17 Sight / Saving Deposits 13,625 15,335 16,979 19,331 19,981 CD and Other Deposits 260 333 460 555 606 Direct Deposits 13,885 15,668 17,439 19,886 20,586 Bonds

  • Institutional
  • Retail

4,187 1,131 3,056 4,718 2,105 2,613 4,477 2,349 2,128 4,071 2,400 1,671 3,314 2,500 814 Direct Dep, & Retail Bonds 16,941 18,281 19,567 21,557 21,400 Insurance Reserves 3,236 4,409 5,513 6,336 6,660 Portfolio Management 3,766 4,481 5,648 6,088 6,780 Mutual Funds 3,051 3,420 4,090 5,297 6,208 SICAVs 5,314 5,882 5,979 6,175 5,714 Others and Third Parties’ Products 5,556 6,425 6,826 7,057 8,139 AUM 17,687 20,208 22,543 24,617 26,841

Deposits, Bonds and AUM

Direct Deposits & Retail Bonds growth

Source: ABI monthly Outlook October 2017

  • AUM kept on growing also in 3Q17. The

aggregate at the end of 9M17 was up by more than €2,2 billion since the beginning

  • f the year (+9% compared to 2016 year-

end), mainly driven by Portfolio Management Accounts (~ +€700 million year to date)

  • Insurance

Reserves continued to rise (+5% compared to 2016 year-end), while Direct Deposits & Retail Bonds reduced thier

  • ver-performance vs the industry, because of

significant retail bonds’ maturities (circa €1 billion YoY)

90 100 110 120 130 140 2012 2013 2014 2015 2016 9M17

Industry Credem

+3.7% a/a +1.3% a/a

+35%

% 2012: base 100

slide-13
SLIDE 13

17,687 20,208 22,543 24,617 26,841 3,236 4,409 5,513 6,336 6,660 14,000 19,000 24,000 29,000 34,000 2013 2014 2015 2016 9M17

Insurance Reserves AUM

1% 1% 1% 2% 1% 39% 33% 24% 26% 27% 40% 45% 51% 50% 49% 20% 21% 24% 22% 23% 0% 20% 40% 60% 80% 100% 2013 2014 2015 2016 9M17

Money Market Bonds Balanced/ Flexible Equity

12% 9% 7% 8% 5% 49% 49% 44% 51% 56% 33% 35% 42% 35% 32% 6% 7% 7% 6% 7% 0% 20% 40% 60% 80% 100% 2013 2014 2015 2016 9M17

Money Market Bonds Balanced/ Flexible Equity

13

AUM and Insurance Reserves kept on growing, with an overall increase of +€2.5 billion in the first nine months (+8,2% since the 2016 year-end) and more than €12.5 billion since the beginning of the Group’s growth strategy (+60%) The breakdown by asset class showed how customers’ preference moved further towards fixed income at the expense of money market products

+60%

AUM and Insurance Reserves

AUM and Insurance Reserves Evolution Third Parties’ Products Breakdown by Asset Class (Group management reporting) Own Products Breakdown by Asset Class

(Group management reporting)

€, million

slide-14
SLIDE 14

14

2015 2016

Group’s customer funding: net inflows breakdown

Quarterly Net Inflows evolution Yearly Net Inflows evolution

€, million €, million

In 9M17, €2.3 billion net inflows and went entirely into AUM (of which ~ €500 million in 3Q17 only)

  • 807
  • 382
  • 117
  • 161
  • 94

372 309

  • 144

1,130

  • 195

1,258 2,823 2,815 1,976 2,300

823 2,750 2,554 2,945 2,011

  • 400

100 600 1,100 1,600 2,100 2,600

  • 900
  • 300

300 900 1500 2100 2700

9M13 9M14 9M15 9M16 9M17

AUC Direct Deposits AUM Total Net Inflows

  • 156
  • 352

763 2,252 3,476 2,608

4,083 4,508

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

  • 500

100 700 1300 1900 2500 3100 3700

2015 2016

slide-15
SLIDE 15

15

Bonds issued and future maturities

Bonds Issued

(Credem SpA management account)

Bonds Maturities

(Credem SpA management account)

€, million €, million

Retail Bonds Institutional Bonds

Strong liquidity position of the Group has been limiting the need

  • f

new bonds’ issuances After 3Q17 maturities, amounting to ~€130 million, about €590 million retail bonds are still outstanding On July 10th, 2017, a T2 (10nc5) subordinated bond for a nominal amount of €100 million was issued

312 523 600 1,500 249 50 100 1,407 938 1,473 365 38

  • 500

1,000 1,500 2,000 2010 2011 2012 2013 2014 2015 2016 9M17

Institutional Retail

134 318 236 34 200 400 600 800 1,000 2017 2018 2019 2020 2021

  • 750

500 750 249 50 100 100

  • 200

400 600 800 1,000 2017 2018 2019 2020 2021 2025 2026 2027 2028

slide-16
SLIDE 16

16

3.5

% on Loans (Credem) % on Loans (Industry)**

10.1 2.1 0.2 3.6 9.6 2.1 0.2 3.6 2.1 0.2 5.8 5.3 0.4 0.3

Credit Quality

Gross Non Performing Loans Quarterly Average Gross NPLs’ Flows - Net of Bad Loans disposal (€, Million)*

** Source: ABI; internal calculation on Bank of Italy figures (TRI30266) * 15 million average for 2016 was calculated according to the following formula: (Gross NPLs at the end 2016, amounting to €1,403 million + Bad Loans portfolio disposed amounting to €87 million – Gross NPLs at the end 2015. amounting to €1,431 million)/4

  • Gross

NPLs average quarterly flows remained negative for the fourth quarter in a row (- €6,5 million in 3Q17 only). The total decrease was -€17.2 million YoY

  • Gross

NPLs stock declined furtherly, showing an

  • verall

reduction in every aggregate

  • Gross NPLs incidence on Gross Total

Loans remained stable at 5.8% (compared to the Industry figure still above 15%) as a result of the decrease of Gross Loans

855.3 506.1 40.9 861.1 501.0 39.0 858.0 498.8 37.8

300 600 900

Gross Bad Loans Gross UTP Loans Gross Past Due Loans

1Q17 1H17 9M17

70 25 27 42 46 26 22 15

  • 3
  • 5

5 15 25 35 45 55 65 75 2009 2010 2011 2012 2013 2014 2015 2016 9M17

slide-17
SLIDE 17

17

€, million

2013 2014 2015 2016 1H17 9M17 Net Bad Loans 334.4 356.8 345.7 339.1 335.3 Net Unlikely to Pay Loans 362.8 376.2 425.3 422.7 416.9 Net Past-due Loans 100.2 60.0 35.8 31.5 30.6 Total Net NPLs 788.4 797.4 793.0 806.8 793.3 782.8 Net NPLs’ Ratio* 4.0% 3.7% 3.5% 3.4% 3.4% 3.3%

NPLs’ Coverage

Net Non Performing Loans Bad Loans’ Coverage (%) Non Performing Loans’ Coverage (%)

** Source: ABI Monthly Outlook October 2017, figure as at August 2017 * Loans to Customers net of Repos with Institutional and Loans to Group’s SPVs

Net NPLs decreased for the third quarter in a row (-€24.0 million in 9M17, more than -€10 million in 3Q17 only). Net NPLs’ Ratio decreased at 3.3% Net Bad Loans’ Ratio was 1.43% (1.46% at the end of 2016) vs the Industry figure at 3.83%** Coverage ratios continued to increase

36.3 35.8 35.0 38.7 40.7 44.6 42.5 43.9 30 32 34 36 38 40 42 44 46 2010 2011 2012 2013 2014 2015 2016 9M17 57.4 56.0 55.4 58.2 58.6 60.8 59.6 60.9 50 52 54 56 58 60 62 2010 2011 2012 2013 2014 2015 2016 9M17

slide-18
SLIDE 18

18

NPLs: comprehensive coverage

Also considering the amount of the shortfall*, which is included in all the most recent «coverage backstop» draft proposals and which is already fully deducted from fully-phased CET1 Ratio, Credem Group’s actual coverage levels are materially higher than those calculated considering NPLs’ specific write-downs only From a capital standpoint, NPLs are therefore already «provisioned» considering the amount

  • f

the

  • verall

longlife expected loss, which means:

  • 79% for bad loans
  • 37% for unlikely to pay loans
  • 24% for past-due loans

Gross

(€/million)

Net

(€/million)

Coverage Shortfall*

(€/million)

Coverage including Shortfall* Bad Loans 858.0 335.3 60.9% 156.7 79.2% Unlikely to Pay Loans 498.8 416.9 16.4% 103.4 37.1% Past-due Loans 37.8 30.6 19.0% 2.5 24.3% Total NPLs 1.394.6 782.8 43.9% 262.6 62.7%

Coverage (%)

* Shortfall is calculated as the difference between ELBE - Expected Loss Best Estimate (which represents the best esitmate of the expected loss for each credit exposure, given its stage and the current economic environment) and Net Adjustments to Loans

60.9% 16.4% 19.0% 43.9% 79.2% 37.1% 25.7% 62.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Bad Loans Unlikely to Pay Loans Past Due Loans Total NPLs

Coverage Coverage including Shortfall

slide-19
SLIDE 19

19

Cost of Risk continued to perform very well, with a 3Q17 figure exceptionally low (Net Adjustments to Loans below €10 million) Annualized Cost of Risk was 22 bps (almost half of the historical average figure), even lower than 25 bps posted in 1H17 (and 28 bps in 9M16)

Parmalat default Historical Average

Cost of risk

Cost of risk (bps) Cost of risk: history (bps)

21 31 70 7 19 20 35 35 62 34 27 44 59 55 52 32 10 20 30 40 50 60 70 80

59 27 31 52 55 70 60 51 52 19 28 28 32 19 25 22 47 37 39 41 45 39 39 37 41 28 33 33 30 22 21 19 10 20 30 40 50 60 70 2013 1Q14 1H14 9M14 2014 1Q15 1H15 9M15 2015 1Q16 1H16 9M16 2016 1Q17 1H17 9M17

Cost of risk Cost of risk (net of non recurrent events)

slide-20
SLIDE 20

2,400 904 606 3,000 20,284 1,211 6,512 2,524 2,500 1,095 526 3,000 20,586 814 6,660 2,581

5,000 10,000 15,000 20,000

1H17 9M17

155 5,781 6,385 1,948 23,543 151 6,589 6,531 1,103 23,474

6,000 12,000 18,000 24,000

  • Fin. Assets held

for trading*

  • Fin. Assets at

fair value*

  • Fin. Assets av.

for sale*

  • Fin. Assets

(insurance companies)* Due from banks Loans to customers

1H17 9M17

20

(*) Internal calculation

On the Assets’ side, AFS securities increased by €800 million, following the purchase

  • f US government bonds. Such

manouvre caused a liquidity decrease on the ECB deposit Loans to Customers, even if influenced by usual 3Q seasonality, remained fairly stable (-€70 million QoQ) On the Liabilities’ side, Retail Bonds maturities (-€400 million) were

  • ffset

by the Deposits growth (+€300 million) and by the institutional subordinated bond issuance (+100 million)

Assets & Liabilities

Assets (Euro, millions)

Institutional Clientele Equity

Liabilities (Euro, millions)

slide-21
SLIDE 21

21

Liquidity Ratios

NSFR LCR Loan to Deposit Ratio*

Source: internal estimates as at September 30th, 2017 (*) Loans to Customers net of Repos with Institutional and Loans to Group’s SPVs, Deposits includes Institutional Bonds

Both NSFR and LCR ratios show values well above the future target thresholds, with NSFR at 124% and LCR at 198% ECB unencumbered eligible securities net

  • f haircut at the end of June 2017 were €5

billion (12,6% of Total Assets)

1.10 1.06 1.03 0.99 0.98 0.90 0.95 1.00 1.05 1.10 2013 2014 2015 2016 9M17

124% 116% 125% 125% 124% 50% 70% 90% 10% 30% 50% 2013 2014 2015 2016 9M17E

149% 179% 144% 211% 198% 70% 100% 130% 160% 190% 220% 2013 2014 2015 2016 9M17E

slide-22
SLIDE 22

13.7 13.8 13.9 14.3 13.2 12.9 13.0 13.4

3.0 5.0 7.0 9.0 11.0 13.0 15.0

2016 1Q17 1H17 9M17

Credem CredemHolding 22

%

2017 SREP Requirement: 6.75%

662 bps

Buffer vs Srep

Consolidated Capital Ratios

Phased-in CET1 Ratio Capital and Capital Ratios

(Credemholding’s prudential perimeter)

Credem Group’s CET1 Ratio increased by 40 bps in the quarter, from 13.9% at the end of 1H17 to 14.3% at the end of 9M17 («fully phased» ratio went from 13.6% to14.0%), thank to RWA’s reduction and without including the quarterly net profit At CredemHolding level (prudential perimeter), fully phased CET1 improved by 33 bps in the quarter, from 12.5% at the end of 1H17 to 12.8% at the end of 9M17 (similarly the Phased-in ratio increased from 13.0% to 13.4%) Since 2016 year-end CredemHolding fully phased CET1 increased by 90 bps, without any extraordinary actions on capital

2016 9M17 2016 1Q17 1H17 9M17

CET 1 (€/million)

1,765 1,739 1,590 1,591 1,661 1,664

Tier Total (€/million)

1,939 1,959 1,818 1,843 1,902 1,951 Capital absorpt. from: 1,074 1,040 1,069 1,036 1,065 1,039 Credit and Counterp. 939 907 934 907 930 906 Market 21 18 21 14 20 18 Operational 115 115 115 115 115 115

CET 1 Ratio 13.2% 13.4% 11.9% 12.3% 12.5% 12.8%

  • Tot. Capital Ratio

14.4% 15.1% 13.6% 14.2% 14.3% 15.0%

RWAs (€/million) 13,426 13,004 13,366 12,946 13,315 12,989

Fully phased Basel 3 Phased-in

slide-23
SLIDE 23

23

Disclaimer and Contacts

The manager responsible for preparing the company’s financial reports Mr. Paolo Tommasini

  • f Credito Emiliano S.p.A., declares, pursuant to paragraph 2 of Article 154 bis of the

Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

*** This presentation includes certain forward looking statements, projections, objectives and estimates reflecting the current views of the management

  • f the Company with respect to future events. Forward looking statements, projections, objectives, estimates and forecasts are generally identifiable

by the use of the words “may,” “will,” “should,” “plan,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “goal” or “target” or the negative

  • f these words or other variations on these words or comparable terminology. These forward-looking statements include, but are not limited to, all

statements other than statements of historical facts, including, without limitation, those regarding the Company’s future financial position and results

  • f operations, strategy, plans, objectives, goals and targets and future developments in the markets where the Company participates or is seeking to
  • participate. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a

prediction of actual results. The Group’s ability to achieve its projected objectives or results is dependent on many factors which are outside management’s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking

  • statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain

key assumptions. All forward-looking statements included herein are based on information available to the Company as of the date hereof. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events

  • r otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company
  • r persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

Investor Relations Team Contacts

Benedetta Levi – Head of IR blevi@credem.it +39 0522582580 Paolo Pratissoli - IR ppratissoli@credem.it +39 0522583029