Group’s Results – 1H2015
1H2015 Highlights � The Group continued to develop its business with Total Customers’ Deposits (Direct Deposits, AUM, Insurance Reserves and AUC) growing by more than €4.5 billion year on year (+8.7%), of which €2.7 billion only in the last semester (+5.0% on 2014 year-end figures) � Strong increase also on Loans to Customers (+€1.1 billion year on year: +5.3%) , which were back to 2014 year-end value, after the usual seasonality that penalized the first quarter of the year � The quality and the sustainability of the growth is confirmed by: � The LtD ratio* at 1.03 , despite loan growth, vs.1.06 at the end of 2014 � 86% of corporate loans to customers belonging to the best 4 rating classes (new historical peak) � Net Impaired Loans on Total Loans at 3.7% continuously decreasing since 2013 � CET1 ratio at 11,4% ** (11.6% if considering the Credem consolidated perimeter only) vs. 11.1% at the end of 2014 (11.1% at Credem level) � Despite current growth strategy, Profit for the Period was €119.4 million, up by more than 20% YoY (*) Loans to Customers are net of Repos with Institutional sand Loans to Group’s SPVs . Deposits include Bonds issued to Institutional (**) Capital ratio related to the new group’s statutory perimeter that includes Credemholding 2
Income Statement 2Q14 1Q15 2Q15 % vs. 2Q14 % vs. 1Q15 1H14 1H15 % YoY Euro, million Operating Income 256.0 353.1 257.9 0.7% -27.0% 542.7 611.1 12.6% Operating Income net of Trading 249.6 253.0 239.8 -3.9% -5.2% 497.1 492.8 -0.9% and Performance Fees Operating Costs -164.2 -175.5 -173.7 5.8% -1.0% -330.9 -349.2 5.5% D&A -9.8 -9.5 -10.0 2.0% 5,3% -19.0 -19,5 2,6% 192.8 242.3 Operating Profit 82.0 168.1 74.2 -9.5% -55,9% 25.7% Net value Adj. to Loans -17.6 -36.8 -27.3 55.1% -25.8% -31.1 -64.1 -106.1% Provision for Risks and Charges -1.6 -9.4 0.0 n.a. n.a. -3.9 -9.4 n.a. Extraord. Income/Expenses 2.0 5.4 -2.6 n.a. n.a. 0.4 3.1 n.a. 158.2 171.6 Profit Before Tax 64.8 127.3 44.3 -31.6% -65.2% 8.5% Income Taxes/Minorities -22.8 -43.3 -8.9 -61.0% -79.4% -59.2 -52.2 -11.8% 99.0 119.4 Profit for the Period 42.0 84.0 35.4 -15.7% -57.9% 20.6% • Operating Income net of Trading and Performance Fees Performance was close to 2014 figures thank to a Net Fee strong improvement which almost offset the securities portfolio’s lower contribution , due to a diminished exposure to Italian government bonds, and to interest rates at historical low • Thank also to Trading performance, the Profit for the Period is up by more than 20% year on year 3
Interest Margin (1/3) Quarterly Interest Margin � Interest Margin is down 2% QoQ as a result of Euro, million a reverted increasing competition on lending 130 which, along with Euribor rates trend, penalized 120 125.6 123.6 Credem’s average loans’ rates, and the full 122.2 119.4 110 impact of the €200 million subordinated debt issuance performed in March 106.2 100 103.8 � Actions finalized to funding cost reduction 90 continued, even if they weren’t able to fully 80 offset average loan rate decrease 70 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Euribor and BTP/Bund: Spread Evolution Quarterly Customers’ Spread (Credem SpA management reporting) bps 0.4% 250 % 0.31% 0.30% 4.0 200 3.38 3.31 0.3% 3.5 3.12 154 146 2.96 2.92 196 2.76 127 3.0 150 116 2.38 2.36 0.17% 2.22 159 2.14 0.2% 2.5 2.11 2.12 100 2.0 0.08% 1.5 0.1% 1.00 0.05% 0.94 0.90 0.85 50 0.78 0.64 1.0 0.01% 0.5 0.0% 0 0.0 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 spread average loan rate average deposit rate Euribor 3 months Spread BTP vs. Bund (10 years) 4
Interest Margin (2/3) Evolution of Average Loan Rate Evolution of Average Deposit Rate (Credem SpA management reporting) (Credem SpA management reporting) 2.50 4.50 % % 3.96 3.79 3.79 2.09 4.00 3.65 3.59 1.96 3.52 3.45 3.33 0.80% 2.00 3.18 3.50 1.68 2.96 2.92 0.74% -0.44% 2.76 1.53 3.00 -0.61% -0.46% 1.40 1.36 0.76% -0.69% -0.67% 1.50 1.29 0.68% -0.68% 2.50 1.22 0.63% 0.71% 2.00 0.92 0.85 1.00 0.78 1.50 0.64 1.00 0.50 0.50 - - 2012 2013 2014 4Q14 1Q15 2Q15 2012 2013 2014 4Q14 1Q15 2Q15 Credem: Average loan rate Industry: Average loan rate Credem: Average deposit rate Industry: Average deposit rate Evolution of Average Customers’ Spread � The Group commercial policy, more oriented (Credem SpA management reporting ) to increase volumes, brought to a 2.26 2.23 2.19 differential with the average industry loans’ 2.12 2.14 2.12 2.11 2.10 2.11 2.09 2.50 % 1.87 1.82 rate of ~68/69 bps in comparison with ~45 0.03% 2.00 0.16% -0.05% bps seen in the past . -0.02% 0.36% 0.29% 1.50 � On the other hand, a decrease in cost of 1.00 funding higher than the industry (the gap moves from 63 bps to 71 bps), even if was not 0.50 enough to improve the level of the 0.00 customers’ spread , allowed to a slight 2012 2013 2014 4Q14 1Q15 2Q15 improvement towards industry's customers spread Credem: spread Industry: spread Source: ABI Monthly Outlook July 2015 5
Interest Margin (3/3) Securities’ Portfolio Breakdown (Credem Group management reporting) � In 2Q15 there was a fine tuning on the 100% Banking Group securities’ portfolio 13% 90% 20% exposure to «Italy», moved from 23% 10% as of the end March 2015 to 29%, also 80% 9% benefitting from the volatility on 56% 70% 62% European markets that drove to a rise on yields 60% � However, the breakdown of the 50% 60% portfolio doesn’t change 57% 40% 11% significantly , with 57% invested in 10% «core» European countries and 30% 18% supranational securities 16% 20% 10% 17% 15% 14% 13% 0% 2013 2014 1Q15 1H15 Other non-Italy Gov. Other/ EFSF/ EIB Other Italy Gov. Italy Banking Group securities’ 6,743 5,902 6,219 6,154 portfolio (€ mln) 6
Non Interest Margin Non Interest Margin: Quarterly Evolution 246,9 Performance Fees 250 3 Trading 200 97.1 154,1 163,1 € Million 2.2 141,7 Other 145,8 138,9 136,8 133,8 150 127,7 39.1 5 15.9 118,7 10 5.4 27.6 10.7 3.4 13.2 3.4 5.4 11.8 5 4.3 4.9 3.8 4.5 5.6 49.3 4 Banking Services Comm. 4.5 4.5 48.9 100 47.9 52.5 48.4 49.5 52.5 51.3 49.2 49.9 24 7.6 13.4 Insurance Income 11.6 9.7 11.8 9.7 10.5 9.9 7.3 50 74.1 68.5 61.8 61.2 60.9 58.1 54.9 52 51.9 51.9 Management & Brokerage 0 Comm. 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 117.8 115.5 113.6 122.7 123.9 127.4 124.7 128.3 146.8 136.0 NIM net of Trading and Perform. Fees Non Interst Margin: YoY Comparison � Non Interest Margin, net of «non recurrent items» continued to grow 300 246 218 250 205 progressively +55% vs. 1H13 200 113 � Over the last two years, with the 150 1H13 +20% vs. 1H13 100 45 39 1H14 32 Interest Margin penalized by rates 25 20 10 50 9 9 decrease, the Group was able to 1H15 0 increase Net fees and commissions by 20% and insurance revenues by 55% 7
AUM and Insurance Reserves Mutual Funds and SICAVs Breakdown by Asset AUM and Insurance Reserves Evolution Class (management reporting data) 100% 30,000 20% 21% 23% 27,129 26,866 80% 24,616 60% 25,000 40% +30% 45% 50% 40% 20,923 20,000 20% 39% 33% 26% 0% 1% 1% 1% 15,000 2013 2014 1H15 2013 2014 1Q15 2Q15 Money Market Bonds Balanced/ Flexible Equity Mutual Funds and SICAVs Breakdown by Asset Class (management reporting data) � The growth of AUM fees has being driven by the continuous increase of AUM volumes , up 100% 6% 7% 7% by 30% since the end of 2013 and by 10% 80% 33% during the 1H15 35% 42% 60% � Such trend is paired by a favorable « mix effect » with increasing volumes for those 40% 49% 49% 44% asset classes characterized by an higher 20% risk profile and an higher profitability 12% 9% 8% 0% 2013 2014 1H15 Money Market Bonds Balanced/ Flexible Equity 8
Operating Costs Operating Costs: Quarterly Evolution Networks Euro, Million Employees 200 175.5 173.7 6,200 166.7 167.1 5,993 164.2 156.8 5,7635,852 6,000 5,740 150 5,800 55 5,5445,5195,6045,609 57 45 54 52 48 5,600 5,400 100 5,200 2008 2009 2010 2011 2012 2013 2014 1H15 122 121 117 113 113 109 50 Financial Advisers 1,500 0 1,0021,006 885 795 785 804 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 1,000 770 750 500 Personnel costs Other administrative costs 0 Creacasa and Salary Backed Loans Agents The quarterly Operating Costs evolution (+5.8% YoY, -1.0% QoQ) rebates Credem Group investment strategy which is confirmed also by the 600 394 381 growth of the headcount (+1.5% compared to 359 353 400 272 217 2014 year end) and volumes 158 200 0 9
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