MEDIOBANCA GROUP PROFILE
30 June 2021 AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions MEDIOBANCA: A DIVERSIFIED FINANCIAL GROUP…
MB Group profile Section 1
Key financial information¹
Wealth Consumer Revenues: €2.6bn TFA: €71bn Management Banking Net profit: €808m Loan book: €48bn
ROTE adj2: 9% Gross NPLs/Gross Ls 3.2%
C/I ratio: 47% DPS FY21: €0.663
No. of staff: 4.9k Payout FY22: 70% Corporate & Principal Investment Investing CET1 phase in: 16.3% Loan/funding ratio: 86% Banking Total assets: €83bn Market cap4: €8.9bn
Revenues GOP risk adj. RWAs Loans TFAs
WM WM 11% WM WM 12% 24% 30% Affluent CIB CIB Consumer 45% Consumer UHNWI CIB Consumer 38% 42% 25% 38% CIB 42% 27% 38% Consumer 40% 26% Other AM Other Other Other 22% 13% 11% 12% 4%
1) Figures as at end-June 2021 (financial year) 3 2) ROTE based on net profit adjusted calculated as GOP net of LLPs, minorities and taxes, with normalized tax rate (33% for Affluent, CIB, Consumer and HF; 25% for PB and AM; 2% for PI) 3) Subject to ECB authorization 4) As at 9 August 2021 ...WITH AN INTEGRATED BUSINESS MODEL
MB Group profile Section 1
HIGH SYNERGIC BUSINESS
Capital light Wealth Corporate & Labour intensive Fee driver Fee driver Recurrent Management Inv.Banking Cyclical
REALLOCATION OPPORTUNITY DIVERSIFICATION OPPORTUNITY
EPS/DPS accretive Principal Capital intensive Revenue driver Consumer NII driver Source of capital Investing Banking Anti-cyclical
HIGH RETURN BUSINESS
4 A STORY OF BUSINESS GROWTH AND DEVELOPMENT
MB Group profile Section 1
Founded in 1946 by three state-owned banks (Comit, Credit and Banco di Roma), Mediobanca’s mission was initially to support the rebuilding of Italian industry. 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. Mediobanca pioneered also retail/mid-corporate banking activities, entering the consumer credit sector with Compass (1960), leasing with Selma (1970), residential mortgages with Micos (1992) and private banking with Banca Esperia (2001) and CMB (2003). Listed since 1956, Mediobanca was privatized in 1988. The banking shareholders reduced their stake to 25%, entering into a shareholder agreement with some industrial corporates holding another 25%. The syndicate agreement was reduced over time to roughly 30% and expired on Dec.2018. A light consultation agreement gathers today roughly 12% of the capital. Since 2003, the current management team has focused the corporate strategy on the three core divisions, prioritizing the development of Wealth Management, while sustaining the long standing growth of the other two business: Wealth Management: was born as a division in 2016, gathering all AM driven businesses: Affluent & Premier: the multi-channel digital bank CheBanca! (set up in 2008 as a deposit arm) became a wealth manager in late 2017 when it acquired selected retail activities of Barclays in Italy and launched a fast growing network of financial advisors and relationship managers Private Banking & HNWI: Banca Esperia full control was achieved in 2017 while a stronger integration of CMB was started Asset Management: Cairn Capital, a London based credit specialist, was acquired in 2015, followed in 2018 by RAM Active Investments, Geneva based leading European systematic asset manager. MBSGR was relaunched in 2017 as a group AM factory. In February 2021 Cairn Capital, supported by Mediobanca S.p.A., has agreed terms for a strategic partnership with Bybrook Capital LLP, a specialist distressed credit manager based in London Consumer credit: in 2008 Compass doubled its size with the acquisition of Linea, thus catching up with the top five consumer lending Italian players; European CIB operations: 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 & Associés In the meantime Mediobanca has actively managed its equity portfolio, selling off cross-shareholdings, exiting shareholder agreements and disposing of non-strategic stakes. It has remained a key shareholder of Ass. Generali (13% stake).
5 SHAREHOLDERS’ BASE
MB Group profile Section 1
Mediobanca shareholders’ structure1
10.7% Consultation Agreement2
Institutional investors by region
Institutional Investors Mediolanum 45% Retail & Other U.S. 41% 22.4% 3.3%
S.-33 (Benetton) 2.1% U.K. 18% L. Del Vecchio FINPRIV 1.6% 18.9% Italy 14%
France 6% Belgium 4% F.G.Caltagirone Other <1% 3.7% Rest of 3.0% the world 17%
Historical syndicated pact expired. A new consultation agreement was signed in December 2018, gathering 10.7% of capital, lasting 3Y, with no restrictions on shares Institutional investors account for almost 50%, stably split by geographical region: U.S. (41%), U.K. (18%) and Italy (14%)
1) Institutional investor breakdown by geography source: Nasdaq Shareholder Analysis, August 2021 6 2) No provision made for commitments either in terms of lock-up or voting rights over shares syndicated. The agreement governs the means by which shareholders meet to share reflections and considerations regarding the Group’s performance, in accordance with the principle of parity of information versus the market MEDIOBANCA DISTINCTIVENESS…
MB Group profile Section 1
Stable Board and Responsible business Specialization and Strong positioning management in the last approach Innovation in business whose 15Y growth is driven by long-term trends Indepth knowledge of Strong brand value Private-Investment Bank business environment of choice for Italian Leading investment bank in Reputable, trusted, high- entrepreneurs Long-term approach to quality player Southern Europe business Innovative, long-standing One of top 5 operators in Talent-driven profitable consumer bank Strong risk management as organization Italian Consumer Banking part of DNA Unique human-digital Distinctive player in WM bank for affluent customers
High capital generation, Limited exposure to ITA Governance Comprehensive ESG high asset quality macro and adverse progressively evolving approach content regulation
Low exposure to Italian Institutional investors at 50% CSR involving the whole CET1@16% spread and govies of the shareholder base organization Last capital increase in 1998 Low NII sensitivity Board quality steadily Remuneration policy fully Unrivalled asset quality to interest rates and GDP improved/improving in aligned with stakeholders’ Low operational gearing Solid loan book/TFAs growth number, mix of interests over the whole cycle competences, independence
7 …HAS REVERTED INTO AN ONGOING ACCRETIVE VALUE CYCLE
MB Group profile Section 1
STRONG POSITIONING RESPONSIBLE
SPECIALIZED FINANCE DNA REPUTABLE - HIGH QUALITY Effectiveness of MB business model, > 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 capital with no compromise on risk profile
8 BP19-23 MISSION:TO DEFINITIVELY ESTABLISH MEDIOBANCA AS A DISTINCTIVE GROWTH PLAYER
MB Group profile Section 1
Our 2019-23 BP aims to further upgrade the effectiveness of our business model in order to definitively establish Mediobanca as a distinctive growth player in Europe which is consistently valued as a Specialized Financial Group
IN NEXT 4Y MEDIOBANCA WILL STAND OUT BECAUSE OF ITS
DISTINCTIVE BUSINESS MODEL GROWTH CAPABILITIES VALUE CREATION by by by CAPABILITY TO PROFIT FROM BRAND, REVENUES, DELIVERING INDUSTRY LEADING A CHALLENGING MACRO SCENARIO CAPITAL AND PROFIT STAKEHOLDER REMUNERATION
DUE TO
STRONG POSITIONING & BUSINESS SOUND MARKET OPPORTUNITIES SELF-PERPETUATING DIVERSIFICATION and MB ACCRETIVE VALUE CYCLE and MATERIAL INVESTMENTS and CULTURE & SUSTAINABILITY in people, innovation and distribution TALENT/CAPITAL MANAGEMENT
9 BP19/23 PLAN CONFIRMED, COVID IMPACT FULLY RECOVERED
MB Group profile Section 1
Shift to capital-light fee Revenue growth in a Enhanced return to business challenging environment shareholders
Targeting industry-leading performance
Shareholders’ remuneration Revenues growth Earnings growth Profitability growth 70% cash payout FY21and FY22 1 1 +4% CAGR +4% EPS CAGR ROTE23 @11% + BB2 annually set
CAPITAL MANAGEMENT POLICY Capital invested in growth, organic and through M&A, cash DPS distribution, new buyback programmes set annually depending on M&A delivered and MB price DPS21: €0.66, with 70% cash dividend payout 70% cash dividend payout confirmed also in FY22 Buybacks resumed from October 21: up to 22.6 million treasury shares cancellation + new up to 3% buyback programme2
1) 4YCAGR 19/23, including treasury shares cancellation (subject to ECB authorization) 10 2) Subject to ECB and EGM authorization. Buyback purpose: cancellation, performance shares and M&A. GROUP TARGETS
MB Group profile Section 1
Group Target June19 June23 4Y CAGR Divisional Target June19 June23 4Y CAGR
Revenues (€bn) 2.5 3.0 +4% Revenues (€bn)
EPS (€) 0.93 1.10 +4%3 Wealth Management 0.5 0.7 +8% Corp. & Inv. Banking 0.6 0.8 +6% ROTE adj. 10% 11% +1pp Consumer Banking 1 >1.1 +3% CET1 phase-in 14% ~13.5% ROAC (%) TFAs (€bn) 61 83 +8% Wealth Management 16% 25% +9pp
Loans (€bn) 44 51 +4% Consumer Banking 30% 28/30% ~
Funding (€bn) 51 56 +2% Corp. & Inv. Banking 15% 16% +1pp
Financial targets based on current regulatory requirements and Group scope of consolidation
11 CSR ENHANCEMENT FOR ALL STAKEHOLDERS’ BENEFIT
MB Group profile Section 1
CSR AT BOARD LEVEL (competencies, strategies)
CSR IN THE PLAN WITH TARGET DISCLOSURE (Sustainable Development Goals framework)
CSR TARGETS INCLUDED IN TOP MANAGEMENT LONG-TERM INCENTIVE PLAN
€4m per year in projects with positive Avg. training hours up 25%, to enhance social/environmental impact employees’ competences MB Social Impact Fund: AUM increase at least by 20%
Sustainable bond issue: €500m ~50% of female profiles to be considered for external selections 40% of procurement expenses assessed with CSR criteria All suitable female profiles to be considered for internal Customer satisfaction: promotions and/or vacancies CheBanca! CSI¹ on core segment² @73, NPS¹ @25 Compass: CSI @85, NPS @55
Asset Management: 100% of new investments Energy: 92% from renewable sources, CO2 emissions down screened also with ESG criteria 15%; hybrid cars @90% of MB fleet €700m investments in Italian excellent SMEs RAM: first issue of a carbon neutral fund ESG qualified products in clients’ portfolio +30% CheBanca! Green mortgages up 50%
1) CSI: Customer Satisfaction Index; NPS: Net Promoter Score 12 2) Core: Premier: clients with wealth between €100k and €5m AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions MEDIOBANCA GROUP BUSINESS MODEL
MB Group KPIs Section 1.a Mediobanca Group
Holding Functions Group ALM & Treasury Non core assets (leasing)
Corporate & Investment Consumer Banking Wealth Management Principal Investing Banking (CB) (WM) (PI) (CIB)
Consumer Banking Affluent & Premiere Principal Investing Corporate & Investment Banking Compass CheBanca! Ass. Generali Mediobanca Spa Messier & Associés Private & HNWI Mediobanca PB, CMB
Specialty Finance Mediobanca AM MBFacta MB SGR, CMG MBCredit Solution Cairn, RAM
Corporate Consumer AUA/AUM driven Proprietary client business client business client business equity stakes
14 PROFITABLE AND VALUABLE DIVISIONS
MB Group KPIs Section 1.a
Mediobanca Group as at 30 June 2021 (12M)
Corporate & Investment Consumer Banking Wealth Management Principal Investing Banking (CB) (WM) (PI) (CIB)
Revenues 698m Revenues 1,002m Revenues 627m Revenues 295m GOP 432m GOP 430m GOP 137m GOP 291m Loan book 19bn Loan book 13bn Loan book 14bn TFA 71bn of AUM/AUA 46bn RWA 20bn RWA 12bn RWA 5bn RWA 7bn C/I ratio 44% C/I ratio 31% C/I ratio 75% C/I ratio nm ROAC 16% ROAC 27% ROAC 21% ROAC 14%
Holding Functions Revenues 2,628m (HF) GOP 1,142m Loan book 48bn Revenues 22m TFA 71bn Loan book 2bn RWA 46bn
RWA 3bn Group MB C/I ratio 47% ROTE adj 9%
15 SUPPORTED BY A STRONG A&L STRUCTURE …
MB Group profile Section 1
Specialty Balance sheet as at 30 June 2021 Finance PB deposits 6% Mortgages Total: €82.6bn 15% 23% Retail Other deposits 9% Large Leasing 30% corporate 4% 34% €48.4bn Private €56.2bn ECB Banking 13% 7% Loans/ Bonds Loans Consumer Funding: to retail Bonds to lending 59% Funding 10% 86% institutional 26% 68% 23%
CET11: 16.3% Total Capital: 18.9% Leverage Ratio: 9.1% BB govies 40% Liquidity Treasury Net NSFR: 116%2, LCR (end-of period): 158% 38% assets Treasury Treasury liabilities 16% €14bn 32% €14bn NPLs/loans: 3.2% gross, 1.2% net NPLs coverage: 65% Equity 13% Equity Inv. 6% Bad loans/loans: 1% gross, 0.1% net Bad loans coverage: 86% Corporate Client & bonds other Trading Assets Liabilities 13% 8% book 1%
Loans : 43% corporate, 57% retail; ~80% Italy, ~20% non-domestic Funding: 55% from retail investors (10% bonds to retail, 30% retail deposits and 15% PB deposits)
16 1) CET1 FL: 15.1% 2) NSFR reclassified according to new CRR ex Regulation (EU) 2019/876 from June 2021 …COMBINED WITH A LOW RISK PROFILE
MB Group profile Section 1
Loans under moratoria well below Italian average, Stage 2 high coverage, stage 3 aligned to EU averages
Total granted moratoria Stage 2 loans Stage 3 loans % of loans¹ % of loans2 % of loans2 Granted 25% 20.0% 21% 9.5% 15.0% 20% Residual 4.1% 3.3% 10.0% 12% 15% coverage 5.0%10% 52.5% 53.3% 0.0% 8% 46.0% 60.0% 10% coverage 50.0% 5.3% 6% -5.0%6% 3% 13.3% -10.0%4% 40.0% 1.4% 5% 9.0% 6.8% -15.0%2% 3.8% 3.1% 5.0% 30.0% 0% -20.0%0% 20.0% MB Listed ITA ITA banking MB EU avg. IT avg. MB EU avg. IT avg. banks system Mar21 Mar21 Mar21 Mar21 Mar21 Mar21
MB: buffers well over SREP and MREL requirements MB: liquidity and funding ratios at strong levels
193% >800bps buffer 37.2% MREL liabilities >650bps fully loaded ~2x requirement 166% 165% 160% 164% LCR 155% 153% 158%
16.3% 116% 109% 109% 105% 103% 103% 107% 109% MREL req. NSFR3 21.84% SREP req. 7.9%
CET1 ratio (June21) MREL liabilities (% RWA, Mar21) Sept19 Dec19 Mar20 June20 Sept20 Dec20 Mar21 June21
1) MB as at June 21. Source: Bank of Italy, as of 14 July 2021; Listed ITA banks’ June21 results presentations, reports and pillar 3 17 2) Source: EBA Risk Dashboard – Data as of March 2021- %of loans (histogram) and coverage ratio (dots) 3) NSFR reclassified according to new CRR ex Regulation (EU) 2019/876 from June 2021 AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions MB WEALTH MANAGEMENT RATIONALE AND OPPORTUNITIES
Wealth Management Section 1.b
Italy one of the most attractive European markets for WM Size worth €4.4tr, in Affluent (€3.5tr) and Private (€1.0tr) segments Largely un-managed Need for “qualified” offering: non-universal banks gaining market share
MB entered and is now focused on WM with a view to leveraging: Distinctive positioning/branding, unparalleled in the Private/Mid Corp area Wealth Group synergies Management Capital buffer to be redeployed into acquisitions
Mediobanca distinctiveness: Affluent: sustainable, through-the-customer’s-eyes, innovative offer HNWI/UHNWI: leadership based on unique IB/PB model AM: targeting the illiquid segment
Strong Group support to foster WM growth, both organic and through M&A
19 WE ENTERED IN 2016 AGO AND ARE NOW A WELL-REPUTED PLAYER…
Wealth Management Section 1.b
MBWM gaining positioning BP19-23 Mission
Wealth management players ranking by TFA¹ (€bn, as at June21)
Become an established player in the 92 Affluent segment, by quality and 89 sustainability, with best in class mix of 79 digital/human distribution capabilities 71
61
49
38 Become a leader in HNWI and UHNWI
29 28 with a unique Private and Investment Bank model, working together with CIB to 20 20 19 17 18 offer integrated advisory and investment 10 10 8 8 6 solutions in Private Assets/Markets 5 4
MBWM Maximize growth and margins in the group value chain reinforcing research & Financial Advisors Specialized product synergies among traditional and centred models Private Banks alternative AM
20 1) Sources for other players: data from Assoreti, Associazione Italiana Private Banking, companies’ web site, press. Data as at: June21 for Financial Advisors centred models; June19 for Specialized Private Banks …WITH GROWTH ACHIEVED THROUGH SELECTIVE ACQUISITIONS AND ORGANICALLY… Wealth Management Section 1.b
Group AUM/AUA trend (€bn)
63% 65% 63% 66% 46.3 39.8 6.5 63% 37.1 39.0 9.2 1.9 0.8 4.1 9.6 30.0 11.8 55% 3.2 12.4 21.4 12.6 17.4 17.7 22.9 16.8 16.3 13.5 12.5 15.6 8.4 10.3 3.9 7.1 June16 Barclays, June17 Organic RAM June18 Organic June19 Organic June20 Organic June21 Esperia growth acquisition growth growth growth acquisitions
AUM+AUA / TFA % Affluent Private* AM
AUM/AUA development continuing fuelled by organic growth and M&A Growth concentrated in managed assets, now 65% of TFAs Strong performance in Affluent and Private (2Y CAGR +17%)
21 * In 2016 and 2017 Private segment includes also AM … THANKS TO STRONG INVESTMENTS IN DISTRIBUTION
Wealth Management Section 1.b
Fintech Robo advisory buy and customize best Digital & applications for banking, Platform Robo for advisory saving & investing to increase productivity and efficiency
RMs staff: from 260 to 618 FAs: from 0 to 465
618 Partnerships 572 582 541 465 132 132 414 452 125 127 130 335 260 486 226 Mortgages 907K SALEFORCE 90 416 445 454 322 Third-party 170 customers distribution 0 65 networks FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21
DIGITAL CRM DIGITAL Private& Affluent& HNWI Premier Institutional Branches right-sized sale forces FA shops: from 0 to 98 MAAM, MBSGR 15 15 15 10 10 7 141 98 111 110 107 107 70 85 59 46 19 0 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21
22 AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions MB CONSUMER BANKING RATIONALE AND OPPORTUNITIES Consumer Banking Section 1.c
Italian consumer banking an attractive market: Low penetration/low yield environment Banking sector restructuring, with branches reducing massively Upcoming regulation painful for riskier players
MB focus on Consumer Banking with a view to leveraging: Strong positioning (since 1960s) in a high entry barrier business Compass Diversification effect vs Group activities, as an anti-cyclical business High and sustainable profitability
Mediobanca CB a frontrunner in consumer banking with: Outstanding credit scoring, pricing, management capabilities generating superior asset quality Broad, integrated distribution network Best-in-class service with a full product range
Strong Group support to foster growth, both organic and through M&A
24 COMPASS – A PIONEER, INNOVATIVE, PROFITABLE OPERATOR…
Consumer Banking Section 1.c
DISTINCTIVE STRENGTHS POSITIONING Compass market shares EXCELLENT ASSET QUALITY 11.7% 12.0% 11.7% AND INDUSTRIALIZED COLLECTION 40% 10.5% 10.2% 13.0% OUTSTANDING SCORING 11.0% 30% AND PRICING CAPABILITIES Net NPLs/Loans: 1.8% 9.0% 20% 16%
7.0% Net Bad Loans /Loans: 0.1% 7% 10% 8% 8% 10% 6% 6% NPLs fully covered in 12m 5% 5.0%
3.0% 0%
1.0%
-10%
-1.0%
VALUE-DRIVEN APPROACH -20% EFFICIENT PLATFORM -3.0% TO BUSINESS -21 -30% -30% -5.0% Very low and stable cost/income (~30%) 2016 2017 2018 2019 2020 New production driven solely by risk-adj returns Direct distribution growing at variable cost Market growth (YoY) Compass growth (YoY) Margin resiliency and profitability preserved Compass market share Consumer credit market ranking¹ BROAD PRODUCT CAPABILITIES BROAD & INTEGRATED (new loans, €bn, 2020) BEST-IN-CLASS SERVICE DISTRIBUTION NETWORK UCI 8.9 Compass branches 4,400 €6.5bn new loans, 80% repeat business 179 Findom. 8.4 3rd parties bank Deutsche 5.5 Compass / branches Personal Special Compass Quinto Compass 5.4 loans purpouse agencies 12,600 45% 15% Agos 100 Post offices 5.1 Salary UBI Online business 3.4 guarenateed 215 Cards ISP 2.4 Cars 5% Partnerships/JVs 13% 44,000 22% Dealers Fiditalia 2.1 (car/retail) Credem 1.7 Direct business Indirect business Santander CB 1.7
25 1) Source: Assofin. New statistics do not include vehicle credit …WITH THE ABILITY TO GROW STEADILY TEMPORARY SLOWDOWN ONLY DUE TO COVID-19 Consumer Banking Section 1.c
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 12.9 996 1,027 1,022 12.5 936 11.8 873 11.0 10.4 800 9.3 9.6 687 713 713 8.8 9.1 605 638 8.4 8.1 8.3 592 Linea 379 acquisition 322 3.7
J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J-21 J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J21
…while careful risk approach has kept CoR under control… …with net profit up 10x: ROAC in the range 27-30% CoR back to pre-Covid level in FY21, following a temporary increase in FY20 €m, bps €m, % 470 463 550 420 415 411 413 450 +10x
370 372 361 354 347 360 332 336
320 350 315 297 243 247 279 270 185 258 199 198 250 220 154 170 150 95 97 120 66 82 50 59 32 39 41 70 22 145 224 298 337 302 311 331 438 413 354 276 242 238 325 258
20 -50 J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J21 J07 J08 J09 J10 J11 J12 J13 J14 J15 J16 J17 J18 J19 J20 J21
LLPs CoR 26 AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions MB CORPORATE AND INVESTMENT BANKING RATIONALE & OPPORTUNITIES Corporate & Investment Banking Section 1.d
Investment Banking is the native business of Mediobanca Strong market positioning: leader in Italy, with a growing footprint in Europe Cornerstone of Mediobanca business diversification strategy Resilient over the cycle due to balanced product mix
Investment Banking has been a challenging market in the last decade Boutique-like models continue to outperform bulge-bracket banks M&A to act as growth enabler in a stagnant economic scenario Financial Sponsor activity likely to remain high due to low interest rates and ample dry powder Corporate Investment Banking Mediobanca distinctiveness Strong brand recognition and trustworthiness Client-driven business Boutique-type approach Steady profitability with low gearing and excellent asset quality
Mediobanca CIB is best positioned to exploit the potential of a client-driven business model enhancing its pre-eminent role in Europe
28 MEDIOBANCA CIB DISTINCTIVE MODEL …
Corporate & Investment Banking Section 1.d
SOLID AND WELL DEFINED MARKET POSITIONING BP19-23 MISSION
Strong solution Empowerment of origination capabilities capabilities across the full (focus on Italy, Spain, France) for IB CIB product offering Leverage European Capital Market platform and O2D model DISTRIBUTION PLATFORM Empower MidCaps coverage UK & US M&A and CapMkt boutiques aggregator
Leverage Messier&Associés partnership Leading M&A boutique in France with 40 deals announced Integrated trading platform since the acquisition and good Foster cross-fertilization among track-record in cross-borders with 1st in Italy customer/product clusters (MidCap, Italy and France M&A Private banking, Financial Sponsors) with >100 deals in last 3Y ECM Capital-light business growth (especially with >20 deals advisory) in last 3Y Capital consumption optimization (especially in lending) Strong M&A in Spain with more than 20 deals in last 3Y Cost of risk normalization and good positioning in cross-border with Italy and Spain
29 … DELIVERING SOUND BUSINESS RESULTS
Corporate & Investment Banking Section 1.d
CIB loan book up @ €19bn … … with significative decrease in UTPs (€m) GROWTH &
1200 QUALITY 19.3 18.6 1000 17.9 765 767 16.1 800 CIB loan book rebounding 15.1 14.5 667 642 after the crisis 600 519
Non domestic exposure 400 ~45% of total with good 198 country diversification 200
Net NPLs/Loans: 0.5%¹ 0 Net Bad Ls /Loans: zero¹ 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
CIB revenues client driven and …by geography (~30% non-domestic) diversified by product … Advisory DIVERSIFICATION 18%
& EFFICIENCY Domestic Non- 70% Client driven activity with Lending domestic 31% diversified fee income €0.7bn CapMkt 30% €0.7bn stream 25%
Cost/income: 44%
Specialty Prop Finance Trading 17% 9%
30 1) Excluding NPLs purchased by MBCS AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investing
Annex
1. 2021 Group figures by divisions PRINCIPAL INVESTING RATIONALE & OPPORTUNITIES
Principal Investing Section 1.e
AG: high-quality investment (A-rated by Fitch) with sound financial performance: AG BP 2018-21 targets: EPS CAGR range +6-8%; payout range 55-65% Consensus:¹ steady growth in net profit (4YCAGR 2019-23: +2%)
Investment rationale: EPS accretive, revenues stabilizer, ROAC above cost of capital Principal Strong value option as a readily available K-source for potential business Investing growth and transactions
Fully integrated in MB Group diversified business model by Revenue source (insurance business) Capital source (re-deployable in banking business when needed)
32 1) Consensus as at November 2019 PI: SOURCE OF REVENUE AND CAPITAL
Principal Investing Section 1.e
PI EQUITY EXPOSURE Assicurazioni Generali
REVENUES/EPS STABILIZER PROFITABLE INVESTMENT Double-digit ROAC1 AG contribution to AG contribution to Book Value (as at June 2021, € bn) Group revenues Group net profit
11% 11% 11%
Ass.Generali 32% 3.7 11% FY16 FY19 BP23T Other investments 0.7 CAPITAL-ACCRETIVE READILY AVAILABLE with significant revenue contribution CAPITAL-SOURCE for scale acquisitions AG revenues pro-rata €m
320 304 255 264 280 272 NO PRESSURE FROM REGULATION (Danish Compromise extended)
FY16 FY17 FY18 FY19 FY20 FY21
1) Fully loaded, i.e. without Danish Compromise 33 AGENDA
1. MB Group profile
a) Group KPIs
b) Wealth Management
c) Consumer Banking
d) Corporate & Investment Banking
e) Principal Investment
Annex
1. 2021 Group figures by divisions 12M RESULTS BY DIVISION AS AT 30 JUNE 21
12m figures as at June 21 Annex 1
Wealth Consumer Principal Holding 12m- June21 (€m) CIB Group Management Banking Investing Functions
Net interest income 281 879 287 (7) (47) 1,415 Net treasury income 10 - 93 31 58 197 Net fee and commission income 336 123 318 - 12 745 Equity-accounted companies - - - 272 - 272 Total income 627 1,002 698 295 22 2,628 Labour costs (241) (104) (165) (4) (121) (635) Administrative expenses (231) (210) (141) (1) (39) (603) Operating costs (472) (314) (307) (5) (160) (1,238) Loan loss provisions (19) (258) 40 - (13) (249) Provisions for other financial assets 2 - 2 52 (8) 48 Other income (losses) 4 (15) 1 - (74) (86) Profit before tax 143 415 434 343 (232) 1,104 Income tax for the period (42) (136) (147) (34) 68 (292) Minority interest - - (3) - (2) (4) Net profit 100 279 285 309 (166) 808
Customer loans 14,405 12,943 19,292 - 1,774 48,414 RWAs 5,217 11,779 19,925 7,246 2,992 47,159 No. of staff 2,037 1,446 635 11 792 4,921
35 INVESTOR CONTACT DETAILS
Mediobanca Group Investor Relations
Piazzetta Cuccia 1, 20121 Milan, Italy
Jessica Spina Tel. no. (0039) 02-8829.860 Luisa Demaria Tel. no. (0039) 02-8829.647 Matteo Carotta Tel. no. (0039) 02-8829.290 Marcella Malpangotto Tel. no. (0039) 02-8829.428
Email: [email protected]
http://www.mediobanca.com
36