MEDIOBANCA BUSINESS PROFILE AND KEY PERFORMANCE INDICATORS - July 2021
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MEDIOBANCA
BUSINESS PROFILE AND KEY
PERFORMANCE INDICATORS
July 2021Agenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsMEDIOBANCA TODAY: A DIVERSIFIED FINANCIAL GROUP…
MB Group Section 1
Key financial information¹
Wealth Consumer Revenues: €2.5bn TFA: €64bn
Management Banking
Net profit: €600m Loan book: €47bn
ROTE adj: 10% Gross NPLs/Gross Ls 4.1%
C/I ratio: 47% DPS: €02
Corporate & No. of staff: 4.9k Stated payout: 0%
Principal
Investment Investing CET1 phase in: 16.1% Loan/funding ratio: 85%
Banking
Total assets: €79bn Market cap:3 €8.7bn
Revenues GOP RWAs Loans TFAs
WM
WM WM
WM 10%
12% 28%
23%
Affluent
Consumer CIB Consumer UHNWI
44%
CIB Consumer CIB 47% 42% 25% 41%
CIB Consumer
23% 43% 29%
40% 28%
Other AM
Other Other Other 15%
23%
11% 12% 4%
1) Figures as at end-June 2020 (financial year)
3 2) In accordance with ECB guidance on Covid crisis
3) As at 17 May 2021...WITH AN INTEGRATED BUSINESS MODEL
MB Group Section 1
HIGH SYNERGIC BUSINESS
Capital light Corporate & Labour intensive
Wealth
Fee driver Fee driver
Recurrent Management Inv.Banking Cyclical
REALLOCATION OPPORTUNITY DIVERSIFICATION OPPORTUNITY
EPS/DPS accretive Capital intensive
Principal Consumer
Revenue driver NII driver
Source of capital Investing Banking Anti-cyclical
HIGH RETURN BUSINESS
4…DELIVERING ITS ACCRETIVE VALUE CYCLE…
MB Group Section 1
STRONG POSITIONING RESPONSIBLE
SPECIALIZED DNA
Effectiveness of MB business model,
> REPUTABLE - HIGH QUALITY
Strong brand value
focused on high-margin, specialized, Standing and quality
long-term growing businesses Ethical approach
STAKEHOLDER-FRIENDLY SOLID
High yield for our shareholders CAPITAL GENERATION CAPABILITY
Workplace welfare for our people Possibility to invest
Corporate citizenship for our community to enhance positioning
PROFITABLE GROWING
ABOVE AVERAGE PERFORMANCE > UNBROKEN GROWTH
High profitability and capitalization
in human talent, assets and profit
All business units repaying cost of with no compromise on risk profile
capital
5...OUTPERFORMING THE INDUSTRY BY FINANCIAL & MARKET METRICS
MB Group Section 1
Mediobanca, has delivered BP 16/19 targets, outperforming the sector with solid financial results
Last 3Y performance MEDIOBANCA ITALIAN BANKS avg EUROPEAN BANKS avg
Revenues (3Y CAGR¹) +7% 0% -1%
PBT (3Y CAGR¹) +13% +6% +9%
ROTE² 10% 7% 8%
Cost/income ratio² 46% 62% 67%
Mediobanca market performance, including the Covid-19 period, has consistently been above both ITA and EU banks
No capital increase in last 20Y and sound shareholder remuneration: €2,2bn distributed in 10Y
MB 3Y market performance vs ITA and EU banks MB 5Y market performance vs ITA and EU banks
€ 12 €12
11 11
10 10
9 9
8
8
7
7
6
6
5
5 4
MB total shareholders return: -13% MB total shareholders return: -5%
4 3
EU Banks total shareholders return: -54% EU Banks total shareholders return: -51%
3 2
ott-17 apr-18 ott-18 apr-19 ott-19 apr-20 ott-20 ott-15 ott-16 ott-17 ott-18 ott-19 ott-20
MB -24,6% EU banks -58,4% ITA banks -43,7% MB -23% EU banks -59,3% ITA banks -60,4%
6 1) 3YCAGR: June16/19 Mediobanca, Dec16/18 peers
2) June19 for Mediobanca, Dec18 peers
Source for ITA and EU banks: ROTE from MB Securities, other figures from public annual report. Employees: Bank of ItalyWE DELIVERED SIGNIFICANT GROWTH OVER LAST 10Y…
MB Group Section 1
Disciplined growth in customer assets reflected in increase in revenues at low cost/income ratio
TFA - €bn Loans - €bn
47
3.5 46
64
47 45
3.0
46
40
35 2.5
40 2.5 40
2.0
1.5 35
17 1.6
1.0
30
10 24 0.5
7
0.0 25
June09 June20 June09 June20 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-20
Revenues (€bn) MB cost/income (%)
Deposits AUM/AUA
…keeping asset quality¹ strong and generating sound GOP growths in any macro scenario
4.6% 4.7%
4.4%
4.2%
3.7% 230 250
ITA Banks 168
147 142
1,500
3.2% 141 127 124
200
2.9% 119
2.6% 87 82
150
62
1,000
2.2% 52 100
1.9%
1.6%
500 50
Mediobanca 1.5% 871 1,046 1,159 1,201 876 1,028 1,198 1,155 1,172 1,304 1,363 1,324 0
(419) (317) (247) (223) (375)
0
(504) (517) (424) (468) (507)
-50
0.6% 0.6%
0.5% 0.5% 0.4% 0.3% (736) (533)
0.2% 0.2% 0.2%
-100
0.1%
-500
0.0% 0.0% -150
-1,000 -200
J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-20 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-19
GOP (€m) before LLPs LLPs (€m) CoR (bps)
ITA banks: Net bad loans/Net Loans MB: Net bad loans/Net Loans
7 1) Source: ABI…BY EVOLVING BUSINESS MODEL
FROM HOLDING COMPANY TO SPECIALIZED FINANCIAL GROUP…
MB Group Section 1
MEDIOBANCA business model timeline
Early ‘2000s BP 2013-16 BP 2016-19
From Holding company Simplify Position MB as a long term
to Banking Group Reduce equity exposure value player
CIB international footprint started WM division set up including
€1.5bn AFS equity disposed with affluent, private and AM
Compass dimension doubled €0.5bn capital gains
also with Linea acquisition CheBanca: from deposit gatherer
Cross shareholdings solved to wealth manager,
Private banking entered: Cairn, Barclays and RAM acquired
Banca Esperia JV set up CIB deleveraging, focus on IB Esperia: acquired and merged
CMB acquired capital-light
CIB: capital optimization (AIRB)
Corporate Center created Messier Maris acquisition
Compass: record results
Holding functions set up
8…RESULTING IN AN EFFECTIVE GROUP RESHAPING…
MB Group Section 1
Enlarged and diversified funding and loan book: retail: corporate now at 55%:45%
Funding by product Loans by division
€bn €bn 47
53 55
4%
19% 12%
10% 35 30% Leasing
12% 14%
Other
43% 23% Consumer
TLTRO 26%
11% Residential
WM Deposits 69%
Mortgages
Bonds 35% 52% 40% Large
corporate
FY June09 FY June20 FY June09 FY June20
Enlarged and diversified revenues, with WM now at ~25% (from zero), CIB at ~25%, Consumer doubled at ~40%, PI
reduced to ~13% (from 30%)
Revenues by product Fees by division Revenues by division
€bn 2.5 €bn €bn
2.5
13%
8% 13%
1.6 24%
Equity acc. WM 23% PI
26%
1.6
Trading 45% WM
10% CIB 30%
Fees 23% 35% 2% 42% Consumer
55% 24%
NII 41% CIB
Consumer 44% 23%
20%
FY June07 FY June20
FY June07 FY June20
9… SOUND CAPITAL CREATION & STAKEHOLDERS REMUNERATION…
MB Group Section 1
High capital generation (last capital increase in 1998) and high profitability…
CET1 ratio % ROTE adj. %
16.1% 10 10
9 10
14.2% 14.1% 9 8
13.3% 8 7
7
11.7% 12.0% 12.1%
11.1% 11.2% 11.5% 11.1% 5
10.3% 4 4
J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-20 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-20
… has enabled MB to return more than €2bn to shareholders, while investing constantly in growth projects
€m Group staff (‘000)
Cumulative ~€2.2bn 5.3
5.1
4.9 4.9
160
413 4.1
320 3.8
410
231 3.5 3.5 3.6
213 3.5
3.1 3.2
144 144 127
42
J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 J-19 J-20
Dividend Buy-back Employees FAs
10…PAVING THE WAY FOR THE DEFINITIVE REPOSITIONING
OF MEDIOBANCA AS A DISTINCTIVE AND SUSTAINABLE
SPECIALIZED FINANCIAL PLAYER
BP 2019-23 ROADMAP
CONSISTENCY
MB continues on its growth roadmap
with focus on specialized, high-margin, capital light, long-standing growing businesses
with one of the lowest risk/high return profiles in Europe
TARGETING INDUSTRY-LEADING PERFORMANCE
Revenues growth: +4%¹ CAGR
Earnings growth: +4%2 EPS CAGR
Profitability growth: ROTE23@11%
CET1 ratio progressively optimized at 13.5% throughout 2023
with a mix of cash dividend and share buyback
TO BE VALUED AS A SPECIALIZED FINANCIAL PLAYER
Distinctive growth should position Mediobanca further up on the Value Map of European Financials
1) 4YCAGR 2019-2023
11
2) 4Y CAGR, including treasury shares cancellationSTRATEGY EVOLUTION CAME ALONG WITH SUBSTANTIAL
GOVERNANCE IMPROVEMENT…
MB Group Section 1
Mediobanca shareholders’ structure1
10.7% Consultation Agreement2
Institutional investors by region
Mediolanum
Retail & Other
U.S. 39% Institutional 3.3%
18.3%
Investors
50%
S.-33 (Benetton)
2.1%
U.K. 18% L. Del
Vecchio
18.9% FINPRIV 1.6%
Italy 14%
France 7%
Belgium 5%
Other…LEADING TO STEADY BOD ENHANCEMENT
MB Group Section 1
Reducing number of BoD members coupled with … … increasing independent members …
22 67%
18 50% 53%
15 15 44%
BoD BoD BoD BoD exp. BoD BoD BoD BoD exp.
2011-2014 2014-2017 2017-2019 2020-2023 2011-2014 2014-2017 2017-2019 2020-2023
… increasing gender diversity … …and increased minority representation
40%
33% 33%
13% 13%
15% 6%
5%
BoD BoD BoD BoD exp. BoD BoD BoD BoD exp.
2011-2014 2014-2017 2017-2019 2020-2023 2011-2014 2014-2017 2017-2019 2020-2023
The current BoD, considered the most suitable choice for the delivery of FY 2019-23 BP targets, was renewed in 2020
AGM and formed by 15 members, 13 o/w taken from the slate proposed by the BoD (that gathered 2/3 of the votes
of the AGM) and 2 members from the slate proposed by Assogestioni.
BoD, enhanced every renewal, has been:
right sized according to business development and regulators recommendation
fostered by increasing presence of independent Directors, higher diversity and minority representation
all BoD members eligible for CEO position after any restriction removal
13Agenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsMEDIOBANCA WM: THE LARGEST VALUE OPTION
Wealth Management Section 2.a
The entrance of MB in WM is recent (4Y ago) and positive in terms of track record
WM represents the largest value option for MB Group
MB group could enjoy higher recurring revenues/ profits, deserving higher valuation for the shareholders
Italian private savings market: a clear opportunity to be exploited: large (€3.5tn), still under-penetrated, with huge
potential in the Upper Affluent segment, and mid caps where there is entrepreneur-corporate identification.
The winners are increasingly specialized operators with a strong advisory relation-based approach
Mediobanca: distinctive positioning in both UNWHI and Upper-Affluent segment with growth strategy primarily based
on scale up distribution
WM strategy has changed deeply in the last four years, and now the Group is a recognized operator, fast growing
and well positioned in the market
Private banking: full control of Banca Esperia acquired in 2007, synergic approach with CIB launched with a competitive
edge on illiquid assets. CMB strategy reviewed and management renewed
Affluent: CheBanca! from funding arm to innovative multichannel operator focused on managing affluent people’s savings,
with an integrated, digital and human advisory approach. The Barclays acquisition (for which MB was paid) fitted well in the
new model because it was not a traditional acquisition but a cherry-picking of businesses, and represented an important
step in moving CheBanca! from mass retail to affluent/wealth by importing the financial advisory business model
Asset management: most succesfull operators have a model that maximizes the benefits of integrating distribution and
production. MB has set up its own factory to exploit synergies and improve margins, and has entered niche AM businesses in
alternative spaces to provide a valuable product offering to its clients.
15MB REFOCUSED STRATEGY ON WM SINCE 2016
Wealth Management Section 2.a
Affluent Private Banking Asset Management
Before CheBanca! founded in 2008 as
2016 CMB: 34% stake acquired in 1989, Some undifferentiated domestic
innovative player and deposits at 100% in 2004 activity in the Group
gatherer Banca Esperia: founded in 2001,
Alternative started: Cairn Capital
No focus on AM 50% stake
M&A: scouting opportunity in off- acquired
shore market, especially CH
CheBanca! from deposit to asset 2017: full control of Banca Esperia
Business and merger into MB MBSGR enhanced
gatherer
Plan MB Private Banking launched, with RAM acquired
Barclays acquired
16-19 a synergic approach with CIB M&A: scouting ongoing, especially
M&A: scouting domestic FA
M&A: scouting specialized, in illiquid credit
domestic player
Become an established player by Become a leader in HNWI and
quality and sustainability, with best UHNWI with a unique Private and Maximize growth and margins in
in class mix of digital/human Investment Bank model, working the group value chain
Next 3Y distribution capabilities together with CIB to offer Reinforce research & product
BP23 Enhance positioning and scale integrated advisory and synergies among traditional and
investing in distribution and investment solutions in Private alternative AM
innovation Assets/Markets
16WE ARE NOW A WELL-REPUTED PLAYER…
Wealth Management Section 2.a
MBWM gaining positioning Achievements
Wealth management players ranking by TFA¹ (€bn, Dec19 peers, MB as at June20) Franchise empowered
Customer base up 50% to over 880K,
85 Affluent: 865K, Private 15K
81
Sales force: Affluent tripled to > 900
69 people
64
59 Bankers’ reshuffle in PB with focus on
UHNWI AuM growth: up 21% YoY
49
Size materially scaled
29
TFAs doubled to over €60bn
28
20 20
Annual NNM >€5bn per year
19 18
15 14 13
10 10 10 Profitability boosted
5 6
4
ROAC from 9% to 16%
MBWM
Financial Advisors Specialized
centred models Private Banks
17 1) MB TFAs excluding AUC. Sources for other players: data from Associazione Italiana Private Banking, companies’ web site, press.
Data as at: Dec.19 for Financial Advisors centred models; June19 for Specialized Private Banks… and M&A COULD ACCELERATE WM GROWTH
Wealth Management Section 2.a
M&A
2015 2016 2017 2018
Selected scope of Barclays 50% of Banca Esperia
Illiquid credit fund Italian activities bought by bought out and Systematic quant.
CheBanca! and merged merged into MB fund
into it, causing it to double Mediobanca Private
First step by MBAM in size Banking launched
into alternative space Definitive shift by MBAM enhancement
CheBanca! from deposit to in alternative space
asset gatherer
In Affluent segment
MB has followed a strategy to execute selective M&A to accelerate growth.
BP 19-23 envisages acquisition especially in WM where also AG stake can be redeployed:
preference for K-light businesses which are an excellent fit for Mediobanca by culture, ethics and business
approach
Mediobanca criteria for value creation always met
18Agenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsMB CONSUMER BANKING: A SUCCESS STORY SET TO CONTINUE
Consumer Banking Section 2.b
Growth in Consumer has been strong and it is not challenged by temporary slow down due to Covid
Business founded in 1960, diversifying corporate exposure. In 2000 Compass had €1.3bn of loan book
Strong development since 2003: Linea acquisition in 2008 taking Compass from a second-tier operator (ranking
8th in the domestic market) to a top 3 player. The acquisition offered an opportunity to diversify product mix
(adding salary-backed products), distribution channels (adding a third-party branch network), and
geographical presence (NE Italy).
Since then, excellent results have been achieved in last 10Y:
franchise empowered, with direct branches up to ~200, digital started
revenues trebled to €1bn, loans trebled to €13bn, net profit up 10x to over €300m, ROAC up to 30%
asset quality has remained strong, due to optimization of value management approach, based on superior
scoring and pricing capabilities and effective recovery system
platform remains efficient: cost/income ratio below 30% at all times
Business plan based on organic growth in proprietary channels, ring-fencing of third-party agreements, and
exploiting opportunities in digital banking.
Covid impact (volume slowdown and increase in cost of risk) temporary and manageable
20COMPASS – A PIONEER, INNOVATIVE, PROFITABLE OPERATOR…
Consumer Banking Section 2.b
DISTINCTIVE STRENGTHS POSITIONING
Compass market shares
EXCELLENT ASSET QUALITY
11.7% 12.0% 11.7%
AND INDUSTRIALIZED COLLECTION 10.5%
OUTSTANDING SCORING
30% 13.0%
11.0%
AND PRICING CAPABILITIES
25%
Net NPLs/Loans: 2.5%
9.0%
20%
16% 7.0%
Net Bad Loans /Loans: 0.1% 5.0%
NPLs fully covered in 12m 10%
15%
7% 8% 8%
3.0%
10%
6% 5% 6% 1.0%
-1.0%
5%
-3.0%
0% -5.0%
VALUE-DRIVEN APPROACH 2016 2017 2018 2019
EFFICIENT PLATFORM
TO BUSINESS
Market growth (YoY) Compass growth (YoY)
Very low and stable cost/income (~30%)
New production driven solely by risk-adj returns Compass market share
Direct distribution growing at variable cost
Margin resiliency and profitability preserved
Consumer credit ranking¹
(new business, €bn, 2019)
BROAD PRODUCT CAPABILITIES BROAD & INTEGRATED
BEST-IN-CLASS SERVICE DISTRIBUTION NETWORK UCI 12.3
Findom. 9.4
Compass branches
€6.4bn new loans, 80% repeat business 5,000
172
3rd parties bank
Compass 6.9
Compass / branches Agos 6.0
Personal
Special Compass Quinto
loans 12,600 Deutsche 5.9
purpouse agencies
47% Post offices
14% 89 ISP 4.3
Salary Online business UBI 3.9
guarenateed 200
Cards Cars Partnerships/JVs Credem 2.3
7% 39,000
15% 17%
Dealers Fiditalia 1.3
(car/retail)
Direct business Indirect business
Finitalia 1.2
21 1) Source: Assofin. New statistics do not include vehicle credit…WITH THE ABILITY TO GROW STEADILY
TEMPORARY SLOWDOWN IN FY20 ONLY DUE TO COVID-19
Consumer Banking Section 2.b
Since 2007 Compass’s loan book has tripled… … as have its revenues (now > €1bn) …
Loan growth halted only due to Covid outbreak
€bn €m
+3x +3x 1,071
13.2 13.0 996 1,027
12.5 936
11.8 873
11.0 800
10.4
9.1 9.3 9.6 687 713 713
8.8 638
8.4 8.1 8.3 592 605
Linea
acquisition 379
322
3.7
J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20
…while careful risk approach has kept CoR under control… …with net profit up 10x: ROAC ~30%
Temporary increase in FY20 due to Covid
€m, bps €m, %
463
470 550
420
415 411 413 +10x
372 361 354 347 360
450
332
370
315 336
320 350
297
243 247 258
199 185
270
250
220
170 150
154
95 97 82
120
59 66
50
32 39 22 41
145 224 298 337 302 311 331 438 413 354 276 242 238 325
70
20 -50
J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20
LLPs CoR
22OPEN TO STRATEGIC CHANGES IF THEY MAKE SENSE
Consumer Banking Section 2.b
We have evaluated certain strategic options and rejected them when suboptimal
M&A? Compass has been always monitoring domestic and international markets while keeping strong discipline:
Commercial agreement pursued in domestic market and preferred to asset purchase
Foreign markets scouting both on developed markets and emerging ones. Exclusivity agreement achieved with
BFI in Indonesia in 2018 to exploit a second high growth market. Acquisition put off due to Covid disruption on
relative valuations
Merger with CheBanca!? CheBanca! is affirming as an Affluent Wealth Manager, making any option based
primarily on a retail funding merger between CheBanca! and Compass a very poor strategic choice, due to
Completely different customer base, with different needs, no industrial synergies, brands dilution and possibility of
negative synergies due to lower positioning of Compass customers base compared with CheBanca! ones
Funding mix not improved by the merger from an ALM point of view (A&L durations, cost of funding, etc.)
Stand alone strategy as a way to optimize Funding? Compass today has a well-balanced funding mix: roughly 50%
is already external to MB group (ABS regularly placed on the market, ABS retained used as collateral for TLTRO); the
remaining 50% (€6.4bn) is made up of intergroup loans with MB Group Treasury. Funding mix aligned with
international practice
Compass standalone unsecured funding would be sub-optimal due to absence of rating, lack of dedicated
investor base for unsecured transactions, potential higher cost of funding and lower flexibility compared to MB
23Agenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsMEDIOBANCA CIB: THE CORE BUSINESS…
Corporate & Investment Banking Section 2.c
Corporate & Investment banking is Mediobanca DNA
We have reinforced leadership in Italy and materially enhanced international profile, with a client driven approach
We have been able to constantly manage a challenging macro and competitive scenario
Since the foundation in 1946, Mediobanca became close to the most important Italian industrial families, supporting
the growth of their businesses also through equity investments. Mediobanca worked with Italian corporates in their
restructuring, privatization and internationalization processes, easing their access to capital markets.
The leadership on the domestic market has been reinforced, while important diversification was achieved on
international market since 2004: offices have been opened in Paris (2004), New York (2006), Madrid (2007), Frankfurt
(2007) and London (2008). In 2019 Mediobanca strengthened its presence in France through the partnership with
Messier Maris & Associés
In recent years MB CIB has delivered resilient revenues (~€600m) and business profitable at all times (ROAC 10-15%),
which have outperformed the IB average, by:
Leveraging on its distinctive positioning in client-driven business
Enlarging business diversification by geography (F, S, UK), product (Capital Market Solutions, factoring , NPLs
purchase and management business) and customer base (increasing focus on mid caps)
Preserving excellent asset quality with enhanced capital allocation (AIRB adoption in 2018) and tightened risk
appetite (reduction of large exposure and LBOs operations, improved rating profile), confirmed also in Covid era
Controlling costs (cost/income ratio below 50% at all times)
In BP19/23 CIB is clearly addressed as a core business, with strategy focused on K-light businesses and enhancement
of distribution and Group synergies in mid caps, private banking and recently-acquired MMA
25… A UNIQUE INDEPENDENT PLATFORM WITH NO DIRECT PEERS
Corporate & Investment Banking Section 2.c
SOLID AND WELL DEFINED MARKET POSITIONING KPIS
Mediobanca distinctiveness
Strong solution Strong brand recognition and
capabilities across the full trustworthiness
CIB product offering
Client-driven business
DISTRIBUTION PLATFORM Boutique-type approach
UK, GERMANY & US Synergic with Private Banking
Steady profitability with
high revenue diversification (mix of
capital light and intensive business)
low gearing
Top 3 M&A boutique
excellent asset quality
in France with more
than 200 deals since Room for k optimization
inception 1st in Italy
M&A
with >100 deals
in last 3Y Where we are not present and don’t plan
ECM to change:
with 30 deals in sizeable trading books/activities
last 3Y high risk appetite in debt underwriting
Top 10 in M&A in Spain
with more than15 deals
in last 3Y
26A FLEXIBLE, CLIENT DRIVEN MODEL IS ‘THE RIGHT’ MODEL
TO MAXIMISE RISK/RETURNS
Corporate & Investment Banking Section 2.c
European Bulge Brackets M&A Fee Evolution ($m)
Although bulge-brackets continue to top
Mkt
share
3,8% 3,5% 2,5% 2,8% 3,4% 2,0% 2,8% 1,6% league table rankings, boutiques have been
gaining a higher share of advisory driven by the
1,154 1,113
following factors:
1,018
914 857 more flexible and efficient in terms of its
763
642 structure and operation
527
more personalized, independent advice
bound by less regulation and supervision
Credit Suisse Barclays Capital UBS Deutsche Bank AG Boutiques/Independents have been expanding
2011 2018
their product expertise to encompass a broad
range of other advisory mandates such as
Boutique Advisory Firms M&A Fee Evolution ($m) restructuring advisory, capital markets advisory,
and shareholder activism advisory
Mkt
2,3% 4,0% 2,3% 3,1% 0,9% 2,2% 1,5%
share 2,0% 0,8% 1,3% As a result, revenues are less dependent on the
pure M&A cycle, with some segments, such as
1,284 restructuring, performing at their best when the
989 M&A cycle is at its weakest
687 706 721 657
445 404
284 236
Lazard Rothschild Evercore Jefferies & Co Houlihan Lokey
Partners Inc
2011 2018
27 Source: Thomson ReutersMB CIB LEADING POSITIONING REINFORCED IN M&A…
Corporate & Investment Banking Section 2.c
Selected M&A Large Corp Transactions since July 2019
Ongoing Ongoing Ongoing March 2020 September 2019
Mediobanca M&A team has been involved in
most industry-shaping deals of 2020 in Italy and Undisclosed
Tower
€400m
is fast growing in France thanks to MMA
€ 6,1bn (EqV 100%) € 573m €11bn
Public Exchange Offer launched Acquisition of 49.07% stake in
by Intesa Sanpaolo on all UBI Disposal of Violetta Caprotti stake Acquisition of €570m hotel Integration of INWIT and Vodafone
Banca ordinary shares in Esselunga portfolio from Värde Partners Italia Tower Offshore LNG Toscana by Snam
Intesa Sole Financial Advisor
Increasing presence in financial sponsors & mid Sole Global Coordinator and
Bookrunner of BPER rights issue
Financial Advisor to
Violetta Caprotti
Financial Advisor to
Värde Partners Financial Advisor to INWIT Financial Advisor to Snam
corporate transactions Selected M&A Mid Corp Transactions since July 2019
March 2020 November 2019 September 2019 September 2019 July 2019
Improved footprint in Europe
Undisclosed €75m Undisclosed €68m ~150m
Acquisition of ABB’s solar inverter CBG disposal to Acquisition of Disposal of AMF to Alpha Private
Acquisition of La Pavoni by SMEG
business by Fimer Xenon Private Equity FT System by Antares Vision Equity
Financial advisor to Fimer Financial Advisor to CBG Financial Advisor to Smeg Financial Advisor to Antares Financial Advisor to A.M.F.
Selected M&A Sponsors Transactions since July 2019
June 2020 February 2020 August 2019 September 2019 July 2019
M&A Italy FY20 – Ranking by Deal Value1
20.3 19.8 $bn, Deal Value Undisclosed Undisclosed €822m £68.4m Undisclosed
Acquisition of Sorgenia by F2i Partial Tender Offer launched by
17.2 and Asterion and contribution Acquisition of a controlling stake
in Engineering by Bain Capital
Acquisition of Solvia Desarrollos
Inmobiliarios by Oaktree
Investindustrial on 3% of the share Clessidra acquisition of a 80% stake
in the share capital of L&S Light
of Veronagest and San Marco capital of Aston Martin Lagonda
Bioenergie
Financial Advisor to
14.3 Sole Financial Advisor to F2i and
Asterion
Financial Advisor to Bain Capital Financial Advisor to Oaktree Financial Advisor to
InvestIndustrial
Clessidra SGR
12.9
12.3
11.4 11.3
10.7 Selected M&A International Transactions since July 2019
June 2020 May 2020 February 2020 December 2019 December 2019
5.4
€2,4bn €515m Undisclosed €30bn €260m
Disposal of 80% of Eurobank
Financial Planning Services and Has announced the acquisition of Acquisition by Cellnex of
a portion of Mezzanine and a portfolio of Power Generation DWS Infrastructure Sale of the Merger of Equals 1,500 telecom towers from
Junior Securitization Notes of the and Supply assets from EDP Arenales CSP Solar Plant to Cubico Orange in Spain
€7.5bn multi-asset NPE Sustainable Investments
Securitization to doValue
MB UBS GS IMI Equita KPMG BofA JPM ROTH MS Financial Advisors to Eurobank Exclusive Financial Advisors to Total Sell-side financial advisor to DWS Lead Financial Advisor to PSA Financial Advisor to Cellnex
28 Source: Refinitiv as of June 2020 – Any Italian involvement…AND IN CAPITAL MARKETS
Corporate & Investment Banking Section 2.c
ECM Italy FY20 (Bookrunner)
Mediobanca Capital Markets teams successfully 33.3% 33.3%
# of deals priced as percentage of
completed several major transactions for both Italian 29.2%
and international clients 25.0%
total deals priced
Mediobanca has been awarded the “best Italian 20.8% 20.8%
ECM bank of the year” prize by Global Capital for the 16.7% 16.7%
fourth year in a row and was recognized as the best
Equity House for US, UK and European funds who want 8.3% 8.3%
to access top Italian issuers
MB GS BofA IMI UCG Citi JPM HSBC UBS UBI
Selected DCM Transactions since July 2019 DCM Italy FY20 (Bookrunner)
May 2020 Social Housing February 2020 January 2020 October 2019 September 2019
Bond
25.9%
# of deals priced as percentage of
Tender offer on:
£ 495m 6.416% callable in Feb-2022
Senior dual-tranche: Inaugural Green Bond:
€ 750m € 750m 10.125% callable in Jul-2022
€ 1,000m
€ 1,000m
1.250% May 2026
€ 750m
1.000% Senior Unsecured Bond
1.700% 60.5NC5.5 Senior Preferred Bond
€ 1,250m 7.750% callable in Dec-2022
19.8%
due February 2030
Green Hybrid Bond 0.300% October 2026 Inaugural Green issue:
18.3%
total deals priced
€ 1,000m due July 2080 € 750m Subordinated Tier 2 Bullet Notes
2.000% May 2031 2.124% due October 2030
Joint Bookrunner
Joint Bookrunner Joint Bookrunner Joint Bookrunner
Dealer Manager & Joint
Bookrunner
16.2%
14.2%
13.2%
Selected ECM Transactions since July 2019 12.2% 12.2% 11.7%
10.7%
Italy 2020 Italy 2020 Italy 2020 Italy 2019 Spain 2019
€ 500m € 46m € 562m € 300m € 2,500m
Rights Issue
Convertible Bond ABB ABB Rights Issue
€ 850m
Convertible Bond
Joint Bookrunner Joint Bookrunner Joint Bookrunner JGC & JBR Joint Bookrunner UCG IMI BNP SocGen MB CASA JPM BAR GS BofA
29 Source: Dealogic, Bond Radar as of June 2020 – No self deals….DELIVERING SOUND BUSINESS RESULTS
Corporate & Investment Banking Section 2.c
Revenues resilient High ROAC, enhanced by lower K
absorption
GROWTH & 625 636 631 627 620
QUALITY 15%
14%
16%
14%
13%
Revenue resilient 11%
10%
12%
10%
K optimization ongoing 8%
Asset quality excellence
6%
AIRB
Net NPLs/Loans: 1.7%¹ with
4%
UTPs in reduction
2%
Net Bad Ls /Loans: zero¹ 2016 2017 2018 2019 2020
0%
CIB revenues client driven and …by geography (~40% non-domestic)
diversified by product …
Advisory
DIVERSIFICATION 20%
& EFFICIENCY Non-
domestic Domestic
Lending 62%
Client driven activity with 38%
diversified fee income 33% €0.6bn
€0.6bn
stream CapMkt
25%
Cost/income: 48%
Specialty Prop
Finance Trading
20% 2%
30 1) Excluding NPLs purchased by MBCSAgenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsPRINCIPAL INVESTING: AG LARGE BUT VALUABLE INVESTMENT
Principal Investing Section 2.d
Principal Investing is the division gathering all equity exposure
From 2002 to 2017, almost all portfolio of stakes was sold (€6.2bn with €1.2bn in capital gains),
reducing capital absorption and business volatility
Only 13% stake in AG has been retained as AG is a strong contributor in terms of EPS/DPS/Capital.
Assicurazioni Generali REVENUES/EPS STABILIZER PROFITABLE INVESTMENT
Double-digit ROAC1
AG contribution to AG contribution to
13% AG stake retained as Phased-in
Group revenues Group net profit
19%
Profitable investment 15%
Capital created through MB organic Fully loaded
growth has been higher than expected
35% 11% 11% 11%
Regulation has evolved favourably: Danish
compromise extended until 2024 13%
FY16 FY19 BP23T
Book Value (as at June 2020, € bn)
CAPITAL-ACCRETIVE
with significant revenue
READILY AVAILABLE
contribution
CAPITAL-SOURCE
Ass.Generali AG revenues pro-rata €m
3.2 320 304
255 264 280 NO PRESSURE
Other
FROM REGULATION
investments (Danish Compromise extended)
0.7
FY16 FY17 FY18 FY19 FY20
1) Fully loaded, i.e. without Danish Compromise
32EQUITY STAKES DISPOSED SINCE 2002
Principal Investing Section 2.d
Burgo
Capitalia
Ciments Francais
Commerzbank
Burgo
Ferrari
Delmi
FIAT
FIAT
Finmeccanica
Gemina
Gemina
Italmobiliare
HdP Italmobiliare
Pirelli
Intesa BCI RCS
RCS
Italmobiliare
Santè
La Fondiaria Assicurazioni
Sintonia
Lucchini
Telco
Mediolanum
Olivetti
Pirelli
Sai
Tirrenia Navigazione
Main equity stakes Main equity stakes Main equity stakes
as at June 20021 as at June 20091 as at June 20171
33 1. Excluding Assicurazioni GeneraliAgenda
Section 1. Group
Section 2. Divisions
Wealth Management
Consumer Banking
Corporate & Investment Banking
Principal Investing/Ass. Generali
Holding FunctionsHOLDING FUNCTIONS
Holding Functions Section 2.e
The significant growth of the Group in the last ten year has entailed a growth of central functions.
Such central costs were part of the CIB division cost base due to the fact that historically CIB has always been in the
parent company.
In 2013 the “Corporate Center” (CC) was created to avoid CIB to bear costs not strictly related with its activity
separating some central group costs, to include resolution costs and some non core assets whose portfolio was
running-off (leasing). The creation of a CC has been also supported by the Regulators in order to facilitate a
centralized monitoring of significant indicators (i.e.: liquidity) and to efficiently run the planning, direction and control
of the business lines.
In 2016 the CC turned to Holding Function as all the activities run at Group level (ALM/Treasury) entered the perimeter.
Corporate Centre - OLD Holding Functions - CURRENT
Leasing Other Leasing Other
Intercompany Intercompany
Some central costs ALM/Treasury
Funding Some central costs
Liquidity Central direction costs
AFS/HTM portfolio
Significant differences in composition (variability in terms of activities, amount of group revenues, costs and LLPs) and
size of banks’ corporate centers (low flexibility of central function costs due to scale) make direct peer comparison of
Holding Functions based only on disclosed information difficult and misleading.
MB Holding Functions does not include significant NPE/non-core asset management divisions, while some major Italian
and foreign banks does (with significant LLPs accounted by their corporate centers).
35HOLDING FUNCTIONS
Holding Functions Section 2.e
Today Holding Function include: centralized common corporate functions (IT, Middle and Back office, Accounting,
HR), control functions (Risk Management, Group Audit Unit and Compliance), staff and senior management, Group
Treasury & ALM including banking book securities and non-core activities (SelmaBPM leasing, Spafid Connect).
Centralized treasury maintains continuous markets access in order to minimize the cost of funding and ensure funds
transferability within the Group (according to the Funds Transfer Pricing (FTP) model whose policy and disclosure are
managed according to best international standards and whose Framework is approved and validated by ECB),
manages liquidity risk ensuring full compliance to Regulatory requirements, optimizes collateral management
maintaining appropriate asset encumbrance levels, controls intra-Group exposures, ensures cash flows and intraday
liquidity management.
In the last 4Y FTEs have increased (from 769 in 2017 to 817) as a result of the centralization of certain common
corporate functions (Compliance, AML, Accounting, HR) and the Banca Esperia merger (which added 62 FTEs). On a
like-for-like basis gross FTEs have decreased
Some corporate functions costs are charged back to the business units on a pro rata basis according to FTEs time
allocation (#224 FTEs or 30% of total HF staff)
Holding Function cost base, stable notwithstanding the aforementioned staff evolution, has steadily decreased in
relative terms.
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