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MPS Presentation
Antonio Vigni
General Manager
Merrill Lynch – Banking & Insurance CEO Conference
London
07 – 09 Oct 2008
3kLD0237_screenshow_english.ppt
How MPS is dealing with market turmoil
Reinforced committment
on cost restructuring
Working to anticipate the impact of
2009E cost synergies (50% of €
476mln of total cost synergies)
Delivery on asset disposal
well on track
Confident in the closing of the
branches disposal in the short term
Tight control on loans
and confirmed good retail
funding growth
Retail funding: +8% annualized
3Q08 vs 2Q08*
* Figure at end September, referred to commercial network
pag. 2
GMPS key figures
€ 522 mln
+2.6%
Reported net profit
+5.7%
(MPS 6M + BAV 1M)
25%
Basic Income
Integration cost
(MPS 6M + BAV 6M)
already done
€ 476 mln
-2.0%
Well on track with BP target
Costs
(MPS 6M + BAV 6M)
Cost Synergies
(Expected)
+9.7%
Direct Deposits
€ 7 bn
New Saving Inflows
+200,000
Net New Clients
(4% customer base)
pag. 3
Pro-forma results* vs Business Plan target before
synergies
Results
1H08/1H07 (%)
BP targets
2Q08/2Q07 (%)
7.9
5.7
5.8
-2
-1.8
NII + Fees
(6M BMPS+ 6M BAV)
Costs
(6M BMPS+ 6M BAV)
-3.5
Loans (%)
7.8
**
Direct Funding (%)
Indirect Funding (%)
5
9.7 **
7.7
5.6
-8
1H08/1H07
BP target
1H08/1H07
BP target
* Includes BAV for 6 months
** Ex BAV: Inclusive of BAV: Loans +7.5%; direct funding +8.5%
pag. 4
1H08/1H07
BP target
1H08 and 2Q08 GMPS Results* versus Competitors**
1H08/1H07
2Q08/2Q07
GMPS*
Average**
GMPS*
Average**
NII
+12.9%
+11.2%
+14.6%
+10.2%
Net fees
-3.8%
-8.2%
-4.4%
-9.9%
Basic Income
+7.3%
+3.9%
+8.3%
+2.7%
Revenues
-2.5%
-2.1%
+1.3%
-0.5%
Costs
-0.5%
+3.3%
-0.7%
+6.8%
Net op.income
-5.3%
-7.8%
+4.1%
-8.1%
LLP
+16.5%
***
+13.1%
+17% ***
+10.5%
Net Income
+2.6%
-6.2%
+31.1%
+8.5%
1H08/2007
30/06/08
Cost/Income
LLP
GMPS*
Average**
58.3%
57.3%
50bps***
35.6 bps
*Stand- alone, with IFRS5
**Competitors are UCI, ISP, BAPO, UBI Pop Mi
GMPS*
Average**
Loans
+7.8%
+4.7%
Direct Funding
+9.7%
+5.1%
*** Net of Hopa/Fingruppo: Including these: +39.8% 1H08/1H07; 61.5% 2Q08/2Q07;
LLP 50 bps
pag. 4
Our results confirm our focus on recurring revenues
and cost containment
+5.5%
1,207
1,193
1,144
Basic
Income*
(€ mln)
1,017
2005 Q
avg
Mln.€
1,051
2006 Q
avg
2007 Q
avg**
1Q08***
1.9%
Costs YoY
evolution
(€ mln)
The basis
of our
credibility
2Q08***
Includes
€95mln of
one-off
-0.2%
-1.5%
****
-1.3%
-2.0%
-2.2%
2003
* 4th quarters net of Junior notes / Banking
book
** Including Biverbanca in
2004
2005
2006
pag. 6
2007
1H08
*** Only GMPS (ex BAV)
**** Pro-forma MPS 6M + BAV 6M
Driven by a world-class franchise network
+290 bps
197.000
161,000
Market
shares**
vs Dec 07
129,000
Net
New
Clients*
109,000
83,000
+130 bps
+40 bps
44,500
+50 bps
+20 bps
31.03.07
30.06.07
30.09.07
31.12.07
31.03.08
Mutual funds
30.06.08
Consumer
Credit
Factoring
Leasing
Bancassurance
3,590
3,520
3,406
2,621
WM
Gross
Flows
1,773
Mln.€
1Q07
2Q07
3Q07
1,902
4Q07
1Q08
2Q08
*Active customers of BMPS, BAM , BT and B. Personale; ex BAV.
** Not comparable with other figures reported: Mutual funds calculations are based on the new methodology and include foreign funds; Direct funding and Bancassurance
were restated to include the sale of Banca Depositaria; loans include Consumit loans.
pag. 7
Performance of direct funding and loans
+9.7%
YoY
Retail +16.1% YoY
Corporate +29.2% YoY
106,487
97,044
51,040
43,960
Direct
funding*
+11.7%
YoY
34,430
26,650
+6.7%
YoY
€ mln
Jun-07
€ mln
Jun-08
Short term deposits
Jun-07
Retail
Jun-08
Corporate
M/L term deposits
+7.8%
YoY
Retail +13.5% YoY
Corporate +3.9% YoY
98,182
91,045
54,310
52,270
+11.9%
YoY
Loans*
43,750
38,540
+0.1%
YoY
€ mln
Jun-07
Short term loans
Jun-08
€ mln
M/L term loans
* Commercial network, ex BAV. GMPS (stand alone) growth calculated
on average balance: Direct funding +10%, Loans +11.8%
pag. 8
Jun-07
Retail
Jun-08
Corporate
Focus on:
BAV
 Recurring revenues: +1.1% vs 1H07, +7.6% 2Q08 vs 1Q08
(Banca Antonveneta
stand alone)
 Costs well under control: -6.0% YoY and -1.1% 2Q vs 1Q
Asset Quality
and Liquidity
position
 Asset quality under control, with increasing coverage in BAV
 Direct funding: +9.7% YoY
 Good liquidity position, with a counterbalancing capacity
amounted to € 12 bn at mid September
 FY08 staff reduction planned already completed
Synergies
 FY08 Admin costs savings targets already met
 BAM integration approved and to be completed by 3Q08
 Tier 1 at 5.1% in 1H08, 5.4% with B2 advanced full impact*
Tier 1 and
TCR (E)
 Total capital at 9.4%, 9.8% with B2 advanced full impact*
 B2 standard for BAV and product companies
 Asset disposals well on track
* Estimates including expected benefit from asset disposal in
accordance with IFRS5 (Banca Monte Parma and MPS Sgr)
pag. 9
BAV
BAV: The Acquisition Bolstering GMPS
Competitive Positioning
Market share by region
“The New Group”*
Branches
o/w in Northern Italy
Market share
Customers (m)
SME customers
Direct funding (€ bn)
Loans (€ bn)
from...
...to
~2,000
~3,000
30%
43%
6%
9%
~4.8
~6.4
~50,000
113
106
11,
11.2%
188,
7.2%
12,
1.8%
215,
6.3%
103,
609,
8.8%
25.6% 65,
11.8%
63, 17,
239, 9.4% 12.1%
9.2%
181,
145,
13.0%
9.1% 15,
6.0%
66,
12.5%
138
137
Positioning (by branches)
 Italy: #3
 North-West: #5
 North-East: #3
 Centre: #2
 South & Islands: #3
8th November: Deal announcement
30th May: BAV acquisition
2nd June: IT integration
* 2007
72,
402,
7.8%
6.4% 363,
10.5%
39,
4.1%
~80,000
6,
0.6%
pag. 10
200,
11.4%
MS > 25%
MS 10% -25%
MS 6% - 10%
MS 2% - 5%
MS < 2%
BAV
First evidence of the commercial pick up in 2Q
together with cost control
+6.7%
-6.0%
+7.8%
409
415
405
389
550
385
517
Basic
income
Costs
Mln.€
BAV
network:
Direct
funding and
loans
YoY
performance
2Q07
3Q07
4Q07
1Q08
9.7%
8.3%
4.0%
2Q08
5.4%
4.7%
1.0%
Jan-08
Mar-08
Direct funding
* Including Key clients positions
Jun-08*
Loans
pag. 11
Mln.
€
1H07
1H08
Asset
Quality
Asset Quality Under Control*
Doubtful loans/Loans per Geographical Area**
GMPS Loan Loss provisions
222
Dec07 Mar08 Jun08
Total:
0.8% 0.8% 0.9%
199
Dec07 Mar08 Jun08
Dec07 Mar08 Jun08
0.4% 0.4% 0.5%
0.5%
0.4% 0.5%
123
127
115
145
(ex Hopa)
Hopa
Dec07 Mar08 Jun08
0.9%
Dec07 Mar08 Jun08
0.7%
GMPS
0.8% 0.9%
0.6% 0.6%
Dec07 Mar08 Jun08
0.9% 0.8% 0.8%
2Q07
Dec07 Mar08 Jun08
3Q07
1.4% 1.6% 1.7%
Dec07 Mar08 Jun08
144
0.9% 0.8% 0.8%
4Q07
1Q08
2Q08
GMPS NPL flows
123
Dec07 Mar08 Jun08
105
2.4% 2.3% 2.3%
93
81
68
Dec07 Mar08 Jun08
1.0%
0.9% 0.9%
Loan Loss provisions
Jan-08
NPL flows
-38%
204
BAV
Mln.€
1H07
* BMPS Group (pre BAV).
**Figures refer to Banca MPS
179
166
126
111
2H07
Feb-08
1H08
118
Mln.€ 2Q07
1Q08
pag. 12
2Q08
Mar-08
Apr-08
May-08
Jun-08
Asset
Quality
Our core market macro scenario
29.9%
19.5%
19.1%
Italy export
growth 6M08
vs 6M07
6.0%
-4.4%
-5.2%
Mercosur
OPEC C.
Core BMPS
market
Core BAV
market
4.9
4.0
Unemployment
Rate (%)
3.2
Russia
3.8 3.5
6.8
EU
USA
Japan
flat
+6.9%
6.0
20%
4.3
GDP
Growth
50%
25%
5%
(2Q08/2Q07)
+0.2%
Veneto
Lombardy
2006
Tuscany
Italy
2007
pag. 13
Agricolture
Industry
+0.6%
Building
Services
Asset
Quality
Families debt*: low leverage vs Europe
Italy % of EU 25
12.9%
GDP
Total Loans
9.4%
Corporate loans
14,9%
Retail loans
6,0%
Listed companies(n.)
3,6%
Derivatives
2,0%
Insurance premium
10,6%
Mutual Funds
Pension Funds
5,2%
0,6%
Financial debt/disposable income (%)
124
93
96
91
63
46
Spain
70
47
25
Germany
Euro Area
1996
*Source: ABI, data at 2006, Bank of
Italy
54
2007/Last available
pag. 14
France
Italy
Liquidity
position
Liquidity Position under control
Loan / Deposit ratio
1.00
0.99
0.98
0.95
Loan/Dep
Ratio post
BAV at 1x
Wholesale Securities <15% total funding
Funding
0.94
10%
Breakdown
 c€5bn wholesale
maturity in 2009
34%
56%
dec-05
Dec-06
Dec-07
Mar-08
Jun 08*
Jun-08
Due to costumers
Financ.liabilities at FV
CD Programme and Counterbalancing
Capacity (€/000)
Counterbalancing
capacity:
+€12bn
Securities
14,100
12,100
10,100
8,100
6,100
4,100
2,100
Counterbalncing
CD
4-set-08
18-set-08
7-ago-08
21-ago-08
24-lug-08
10-lug-08
26-giu-08
12-giu-08
29-mag-08
1-mag-08
15-mag-08
3-apr-08
17-apr-08
6-mar-08
20-mar-08
7-feb-08
21-feb-08
24-gen-08
27-dic-07
10-gen-08
13-dic-07
29-nov-07
1-nov-07
15-nov-07
-1,900
18-ott-07
100
Liquidity
and
maturity
ladder in
the short
term
The Counterbalancing capacity is the total amount of the assets
immediately disposable in order to face liquidity needs
* Reported figures, including BAV
pag. 15
Maturity
Ladder
1day
2days
5days
1month
3months
Liquidity
(€bn)
14,785
14,193
14,429
12,734
11,823
 Excess liquidity is invested in
collateralized transactions
Synergies
Fundraising
First 6 months of 2008 with many extraordinary
activities
Right issue/Tier 1: € 5 bn + € 1 bn
Upper Tier II: € 2.2 bn
Asset disposal: € 850 mln cash inflows


(€ 1,420 mln at 30/09/08)
BAV IT integration: completed on June 2nd
Group
restructuring
Efficiency
improvement
BAM incorporation


Completely subscribed
Better than expected
(planned amount € 2 bn)
47% (77% at 30/09/08)
of expected cash inflows
4 months earlier
than expected
Approved on 28th August
by Shareholders
Integration costs: € 138 mln*
25%
of integration costs planned
Staff rationalization: 980 exits
82%
of 2008 planned exits
Staff requalification (from BO to FO): 260
35%
of requalifications planned in BP
Admin costs synergies: € 33 mln of savings
*Pro-forma GMPS 6M + BAV 6M
pag. 16

2008 target met ahead of
schedule
Synergies
Cost synergies
Headcount reduction
Personnel expenses evolution
(€ bn) (pre-asset disposal)
560
net exits
~ 34,200
~ 630
~980 exits
28% of planned exits
0.20
82% of 2008 Target
0.14
2.52
2.47
HR:
Headcount
reduction
~ 350
2007*
2008
Admin
Costs:
ahead of
schedule
Incentivated
exits
Natural exits
~ 33,640
~ 420
Hiring on the
network
1H08 (Ante
asset
disposal)
2007
Inertial Personnel 2011E
Personnel growth manoeuvreStructural
expenses
cost base
(net of oneoff)
10%
2009
2010
€ 332 mln
2011
10%
Reached in 1H08
50%
Planned
* FTE. Includes Antonveneta (9383) and Biver (696)
pag. 17
80%
100%
Synergies
Integration Charges highlights
25%
81
Integration
charges
of planned
integration charges
138
67
6
138
65
57
Mln.€
GMPS
BAV
Total integration
charges
IT
integration
and the size
of a “Big
Bang
solution”
pag. 18
Mln.€
IT integration
Early retirement Consultancy and Total integration
advisory fees
charges
and other
Tier 1 and
TCR
Tier 1 and TCR evolution
Further improvement from:
9.4%
Tier1
and
Total
Capital*
5.1%
9.8%
1. RWA optimization 2008 vs 2007
-5.1
-2.1
5.4%
-1.0
-4.0
-2.4
Tier 1
Tier 1**
Total capital
Total
capital**
Results
achieved
(June 08)
€ bn
Asset disposal
MPS
immobiliare
Real Estate
BAV
€ 1.0 bn
20%
of expected
amount
2. Asset disposal
* Estimates include expected benefit from asset disposal in
accordance with IFRS5 (Banca Monte Parma and MPS Sgr)
** B2 advanced full impact; B2 standard for BAV and product
companies
pag. 19
BAV
Capital Mgmt Optimization
optimization
actions
actions
€ 1.2 bn
30% of
expected
amount
€ 3.0 bn
125%
of expected
amount
Tier 1 and
TCR
Assets dismissed in 9M08 and to be dismissed
in 4Q08
570
Cash inflows (€ mln)
192
Assets
dismissed
in 9M08 …
30
98
147
44
255
90
Mln.€ Fontana
fredda
… and to
be
dismissed
in 4Q08
Fins oe Quadrifoglio Portinari Valorizzazion
BM
MPS
Vita
Salvati im obliliari Parm a* Ges t.Crediti
MPS
SGR
Asset
Status
Marinella
Exclusive agreement with CCC-Unieco
Via Normanni (Rome)
2 binding offers received
Branches (125-150)
Non binding offers received; binding offers expected
in October
In progress
MPS Immobiliare
* Subject to regulatory approval
pag. 20
Conclusion
 Structural growth: confirmed in GMPS and starting
in BAV
 1H08 Results: Good results notwithstanding the
macro environment and in line with Business Plan
 Asset quality and liquidity position: under control
 Cost synergies: already reached the 2008 BP target
 Capital: Tier 1>6%, also thanks RWA optimization
and asset disposal
Contacts
Contacts
Declaration
In accordance with section 2,
Article
154bis
of
the
Consolidated Law on Finance
(TUF), the Financial Reporting
Manager
Daniele
Pirondini,
declares that the accounting
information contained in this
press release corresponds to
documentary records, ledgers
and accounting entries.
Investor Relations
Piazza Salimbeni, 3
53100 Siena
Tel:+39 0577-296477
Investor Relations Team:
Alessandro Santoni (Head)
Simone Maggi
Elisabetta Pozzi
Email: [email protected]
pag. 22
Disclaimer
This document has been prepared by Gruppo Monte dei Paschi di Siena solely for
information purposes and for use in presentations of the Group’s strategies and
financials. The information contained herein has not been independently verified. No
representation or warranty, express or implied, is made as to, and no reliance should be
placed on, the fairness, accuracy, completeness or correctness of the information or
opinions contained herein. Neither the company, its advisors or representatives shall
have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising
from any use of this document or its contents or otherwise arising in connection with this
document. The forward-looking information contained herein has been prepared on the
basis of a number of assumptions which may prove to be incorrect and, accordingly,
actual results may vary.
This document does not constitute an offer or invitation to purchase or subscribe for any
shares and no part of it shall form the basis of or be relied upon in connection with any
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The information herein may not be reproduced or published in whole or in part, for any
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bound by the foregoing limitations.
pag. 23