The Restructuring Plan approved in July 2017 aims for the Bank’s return to an adequate level of profitability, with a target ROE of > 10% in 2021.
The Plan is based on the following 4 pillars:
- full leveraging of Retail and Small Business customers thanks to a new, simplified and highly digitalised business model;
- renewed operating model, with a continuous focus on efficiency, which will result in a cost/income ratio of below 51% in 2021 and the reallocation to commercial activities of resources employed in the administrative area;
- radically improved credit risk management, with a new Chief Lending Officer (“CLO”) organisational structure that will make it possible to strengthen the Bank’s early detection processes and improve the recovery rate, and which will bring the cost of risk to below 60 bps and the gross NPE ratio to below 13% in 2021;
- strengthened capital and liquidity position, with targets at 2021 that include a CET1 of > 14%, a Loan to Deposit Ratio of 150%, with at the same time a significant decrease in the cost of funding.
The Restructuring Plan includes the transfer of almost the entire doubtful loan portfolio as at 31 December 2016 for a gross amount of Euro 28.6 billion.
(*) Shareholding held through subsidiary companies.
(**) Own shares held by MPS Group following the capital strengthening operations pursuant to Italian Law Decree Law no. 237/2016 (as subsequently amended and converted) and Italian Ministerial Decree of 27 July 2017.