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1
2 0 0 3 R E S U L T S
2 0 0 4 - 0 5 T A R G E T S U P D A T E
M a r c h 3 1, 2 0 0 4
2
GROUP NET INCOME (€ mn) 95.5 78.0*
+22.4%
ROE (goodwill adj.) 13.0% 11.1%
+190 bp
ROE 10.2% 8.9% +130 bp
COST / INCOME 67.0% 67.1% ---
NET NPLs RATIO 1.14% 1.06%
+ 8 bp
2003 results at a glance
2003 2002 Change
* 2002 net income has been adjusted for 2002 Eptaconsors extraordinary dividend
3
Business segment results
2003 2002 PF 2001 PF 2003 2002 PF 2001 PF
Retail banking 126 123 151 56% 62% 72%
Consumer credit 75 54 41 33% 27% 19%
Product companies 20 19 13 9% 10% 6%
Gross income* 225 199 211
as % of gross income
Service companies 5 5 4 2% 2% 2%
Tax collection -1 -2 2 0% -1% 1%
* € mn - Goodwill and taxes excluded
4
Total income
2003 total income € 1,009.5 mn [+5.7%]
% change has been adjusted for 2002 Eptaconsors extraordinary dividend
588.4612.2
2002PF 2003
+4.0%
€ m
n
Interest margin
333.6
373.0
2002PF 2003
+11.8%Non-interest income
€ m
n
Dividends 9.3Cos at equity 15.0
Banks’ spread compression
Positive trend for companies at equity
Strong contribution from consumer credit Greater commissions and trading income, less dividend
payouts
5
Interest margin
* Mark-up + mark-down
3.78%
3.75%3.75%
3.84%3.85%
2.15%2.15%2.15%
2.53%
2.94%
4Q ’02 1Q 2Q 3Q 4Q’03
Bank customers’ spread*
3 months Euribor
147.6 145.5150.6
144.7
€ m
n
2002 quarters
Avg. total spread
3.29%
150.7 152.3155.3 154.0
2003 quarters
Avg. total spread
3.14%
€ m
n
6
Non-interest income
49.4
88.5
57.2
96.2
AUMCollect. &
pay’t serv.
+8.7%
+15.8%
2002PF
2003
Other services
23%
Tax collection
10%
Guarantees2%
AUM39%
Collect.& payment services
23%
Trading3%
Net commissions
+7.9%
Net other inc.
+6.0%
Trading inc.
+157.3%
+11.8%
230.2 248.4
93.498.9
25.710.0
2002PF 2003
€ m
n
333.6 373.0
7
Total costs
Goodwill excluded - * The % change is in comparison to “Ex Findomestic 2002PF”
659.1676.0
557.2
+2.6%
€ m
n
2002PF 2003 2003(ex
Findomestic)*
+1.1%
2003 2002 PF Change CAGR
ExFindomestic
Personnel exp. 378.7 370.1 2.3% 0.9%
Other costs 236.0 223.7 5.5% 4.2%
Depreciation 61.3 65.3 -6.1% -6.3%
Cost control achieved Personnel expenses slightly affected by labour contract
renewal Restructuring costs better then expected
8
Operating and net incomes
€ mn - % change has been adjusted for Eptaconsors 2002 extraordinary dividend
95.5121.7
333.5 116.2
91.7 15.1 11.2
26.2
Operatinginc.
Provisions Charges &other
Extr. items Tax &minorities
Net incomeadj.
Goodwill Net income
+12.8%+30.4%
+16.8% +22.4%
+8.3%-13.5%
-44.1%
Clear improvement in operating income
Better tax rate
Prudent provisions management
Assets streamlining
9
Total financial assets
12,340 13,294
13,956 14,543
2002 2003
€ m
n
Indir. Funding
+4.2%
Direct funding
+7.7%
26,296
27,838
+5.9%
8,198 8,843
5,758 5,700
2002 2003
Assets under
mng. +7.9%
Assets under
custody -1.0%
Bonds +14.9%
Sight
borrowing +7.7%
Other -12.7%
6,861 7,392
4,0634,666
1,2361,416
2002 2003
10
Assets under management
Discr. Accounts
+20.5%
Mutual funds
-3.7%
4,471 4,306
1,948 2,347
1,7792,190
2002 2003
8,198 8,843
+7.9%
Insurance products
+23.1%
44.6% 37.6%
28.0%25.6%
36.8%27.3%
2002commissions
2003commissions
27% 25%
49%
24% 22%
55%
Portfolio composition
2002 2003
Discr. accounts Insurance prod. Mutual funds
€ m
n
11
Customer loans
31.3%
24.5%
20.0%
21.2%
32.3%
25.5%
19.4%
20.5%
2.3% 2.9%
2002 2003
Small Business
Corporate
Consumer Credit
Retail
Public admin.
12,233
13,101
2002 2003
€ m
n
+7.1%
Good increase despite non-favourable economic cycle
High portfolio balance thanks to consumer credit
Real estate financing (+ 13.6%): an important contribution
Volumes moved towards retail and P.A.
12
Credit quality
38.3%
18.1%
12.6%
27.7%
34.6%
19.7%
12.3%
30.2%
3.3% 3.4%
2002 2003
Controlled credit risk loans 69%
+240 bp
Self-liquidatingCollateral sec.
Not secured
Personal sec.
OtherNet NPLs/Net loans
Gross NPLs/Gross loansNet NPLs cover ratio
53.5%54.4%52.6%
2001 2002 2003
2.40%2.28%2.36%
1.14%1.06%1.14%
Credit quality is unchanged Increase in guaranteed and self-liquidating loans The internal rating system shows more loans in “good
shape”
13
CORPORATE & PRIVATE BKG.
RETAIL BRANCHES
RETAIL
CORPORATE CENTERS
117 staff
109 portfolio managers
13 centers*
14 special prod. advisors 8 credit managers
12 branch managers
PRIVATE BKG. CENTERS
48 portfolio managers
9 centers*
11 staff
Network restructuring program
704 staff
366 Family portfolio mgrs
278 branches*
301 Personal portfolio mgrs 272 Business portfolio mgrs
254 branch managers
STRUCTURE COMPLETED by SEPTEMBER 2003
* Banca CR Firenze only
14€ mn - * Core capital - No preference shares issued
Capital ratios
2003 2003 1H 2002 2003-02change
Tier 1* 895.6 842.5 896.5 -0.1%
Tier 2 816.7 642.1 608.5 34.2%
Deductions 92.0 97.6 114.6 -19.7%
Regulatory capital 1,620.3 1, 387.0 1,390.4 16.5%
Risk weighted assets 15,753.4 15,232.3 14,434.0 9.1%
SOLVENCY ratio 10.61% 9.30% 9.80% 0.81 bp
TIER 1 ratio 5.68% 5.55% 6.21% - 0.53 bp
15
C A S S A D I R I S P A R M I O
D E L L A S P E Z I A
16
Strategic rationale
"
"
"
"
"
CR Spezia
ParmaCR Mirandola
Bologna
CR Firenze
Territorially adjacent to the area currently presided by Banca CR Firenze Group
The opportunity to rationalize the limited number of overlaps
Ideal platform for West-East development
Area of the city of Parma Possibility of joining forces with the CR
Mirandola area
Asset structure efficiency enhancement within an overall group management context
CR Spezia
17
Strong franchise - Market share*
funding 46.8%, loans 25.5%, branches 38.%
High level liquidity loans/funding ratio at 62%
AUM/Indirect funding ratio at 64%progressive switch to Group companies’ products
Company’s main features
Governance rules that will allow real efficiency enhancement Majority of members of the Board of Directors and the
Executive Committee
Appointment of the General Manager
Main characteristics
* Main business territory (Province of La Spezia) - 30.09.2003
CR Spezia
18
Actions
Rapid Group integration
Extension of the Banca CR Firenze business model Centralization of key functions, such as
- Planning & Risk Management- Finance- Auditing- Asset Managment- Accounting
Support for innovative commercial actions
Transfer of decision-making powers to the local level
Strengthen risk control Enrichment of the product range
CR Spezia
19
NET INCOME 2.9 5.0 -42.0%
ROE 1.9% 3.3% -140 bp
COST / INCOME 75.0% 78.1% -310 bp
TAX RATE 75.9% 60.6% +1,530 bp
2003 results at a glance
2003 2002 Change
TOTAL FIN. ASSETS 2.955 2,871 +2.9%
of which AUM 930 848 +9.7%
CUSTOMER LOANS 845 844 ---
Net NPLs ratio 3.2% 3.4% -20 bp
€ million
20
76%
49%
Targets
63.0%
75.0%
2003 2006
Tax rate
Cost/income
2.9
15.5
2003 2006
ROENet income
€ m
n
1.9%
9.7%
Total financial assets +7% CAGR ( AUM +11% )
Customers loans +12% “
21
2 0 0 4 - 0 5 T A R G E T S U P D A T E
22
GDP 0.5% 1.6% 2.3%
2003 2004 2005
Old* 1.4% 2.6% 2.5%
Macroeconomic scenario
Domestic demand 1.3% 2.1% 2.9% Old* 2.0% 2.5% 2.5%Disposable income 1.3% 1.8% 2.3% Old* 1.4% 2.0% 2.2%
Lending 6.3% 6.5% 6.2% Old* 5.4% 6.2% 6.1%Lending rate (avg.) 5.0% 4.7% 4.8% Old* 5.3% 5.6% 5.9%Direct funding 4.3% 4.4% 4.3% Old* 4.7% 5.1% 5.1%
Source: Prometeia, December 2003 - * Figures underlying 2003-05 Business Plan
23
TOTAL COSTS 722.4 780.0 + 2.6% +3.2 % +0.8 %
2002 PF 2005 Change - New Change - Old FINDOMESTIC CAGR CAGR Excluded - CAGR
Personnel expenses 407.8 428.0 + 1.6% + 1.4 % + 0.5 %
Other costs 246.5 284.0 + 4.8% + 5.7 % + 2.1 %
Depreciation 68.1 68.0 FLAT + 5.0 % - 1.3 %
Cost breakdown update
€ million
24
EPS and Cost/Income
0.115
0.0970.088
0.104
0.085
0.0760.084
0.03
0.14
2002 2003 2004 2005
With CR Spezia* Without CR Spezia
62.6%
66.3%
70.2%
65.1%
67.6%
67.1%67.0%
50%
80%
2002 2003 2004 2005
New Old
EPS Cost/Income
* EPS takes into account the capital increase connected to the acquisition
25
F I N D O M E S T I C B A N C A
C O N S U M E R C R E D I T
26
TorinoMilano
Bologna
Bari
Reggio C.Palermo
Sassari
Udine
Cosenza
PerugiaAncona
VeronaPadova
GenovaFirenze
Roma
NapoliLecce
Pescara
Salerno
Cagliari
Catania
2003 results at a glance
2003 LEADING FINANCIAL COMPANIES
FINDOMESTIC 4.6
FIATSAVA 3.0
AGOS ITAFINCO 2.7
DEUTSCHE BANK 2.4
FIDITALIA 1.8
GR. FINEMIRO 1.7
BIPIELLE DUCATO 1.6
FINCONSUMO 1.4€ billion
Net income (euro mn) 90.6 (+45%)
ROE 25.7%
Market share 13.4%
S&P ratings Long term A+ (1 notch up)Short term A1 (positive outlook)
Main figures
27
Volumes and credit quality
1,127
834
994 1,015
1,310
968
1,2031,138
Revolvingcards
Personalloans
Homeappliances
Vehiclefinancing
20022003
Eu
ro
mn
New business
1.15%
1.58%
1.88%
1.12%
0.95%
1.00%
1.15%1.22%
1.39%
1.1%
2.0% 1.8% 1.6%
2.9%
1.8%
0.4% 0.3%
2.9%
1995 1996 1997 1998 1999 2000 2001 2002 2003
NPLs ratio Italian GDP annual increase
2003 / 2002
+16.4%
28
Growth comparison
11.1%
31.5%
24.8%
12.1% 12.1%
21.0%
16.1%16.3%
Revolvingcards
Personalloans
Homeappliances
Vehiclefinancing
FindomesticMarket
2003 New business growth
1,310
442
218
658
Ag
os
DB
Cards - Volumes
Cart
as
i
Fin
dom
esti
c
10.0
3.9
2.2
5.1
Fin
dom
esti
c
Cart
as
i Ag
os
BP
L
Cards - Transactions 968
523463
684
Fin
dom
esti
c
DB
Ag
os
BP
L
Personal loans - Volumes
€ million € million /000,000
29Source: ASSOFIN and Prometeia
The Italian market: recent developments
16.0
14.4
0
10,000
20,000
30,000
40,000
50,000
60,000
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
E
-10
0
10
20
30
2.1
-0.8
Total outstandingConsumer credit Durable goods consumption
% -
CA
GR
€ m
n
0
2002
2003
E
30
A prospective outlook
2012EAbsolute change CAGR
1 GermanyPersonal loans GermanyRevolving credit 181,6 GermanyRevolving credit 158,6
2 UK Personal loans UK Revolving credit 150,9 France Revolving credit 112,2 3 GermanyMotor finance UK Personal loans 145,9 Italy Personal loans 102,8 31%4 Spain Personal loans France Revolving credit 136,1 Italy Revolving credit101,4 26%5 UK Revolving credit GermanyMotor finance 122,8 UK Revolving credit 78,2
6 France Personal loans Italy Revolving credit113,1 France Personal loans 63,5
7 UK Motor finance France Personal loans 111,7 Spain Revolving credit 39,6
8 France Revolving credit Italy Personal loans 109,9 UK Personal loans 38,5
9 GermanyRevolving credit Spain Personal loans 99,5 GermanyMotor finance 35,8
10 France Motor finance GermanyPersonal loans 84,2 Spain Personal loans 18,8 11 Italy Motor finance UK Motor finance 62,1 UK Motor finance 18,6
12 UK Other balances Spain Revolving credit 49,5 Italy Motor finance 12,7 13 Spain Motor finance
2002E
113,2
107,4 86,9
80,6
72,7
48,1
43,5
23,8
23,0 22,7 21,8 18,1 17,7 Italy Motor finance 34,5 UK Other balances 11,6
14 ItalyRevolving credit 11,6 France Motor finance 31,4 Spain Motor finance 9,2
15 Spain Revolving credit 9,8 UK Other balances 29,8 France Motor finance 8,7
16 France Other balances 8,8 Spain Motor finance 27,0 France Other balances 3,5
17 Italy Personal loans 7,1 France Other balances 12,4 Spain Other balances 2,9
18 Spain Other balances 4,4 Spain Other balances 7,4 GermanyOther balances 0.5
19 GermanyOther balances 1,0 GermanyOther balances 1,5 GermanyPersonal loans 28,9-
V O L U M E S
(€ billion)
Source: Goldman Sachs - 2003, October
31
B A C K - U P
32
Carinord2 fanout costs 6.7
CR Spezia Foundation 38.22% 162.2 2.67
CR della Spezia - The deal
Banca INTESA 29.87% 69.0 1.44
Stake Euro mn PBV x
TOTAL 68.09% 237.9 2.20
Dedicated capital increase mispricing -19.3 TOTAL 68.09% 218.6 2.02
Put option 31.9% 58.3 1.15 TOTAL 100.00% 276.9 1.74
Date* Target Buyer PBV28-Mar-01 B. Pop. Trentino BPL 4.902-Feb-00 Banca 121 MPS 4.319-Dec-00 B. Legnano B. Pop. Milano 3.929-Nov-00 CR Forlì SPIMI/B. CR Firenze 3.909-Mar-00 B. dell'Umbria Rolo Banca 1473 3.222-Apr-03 B. Pop. Cremona BPL 3.115-May-00 CR Pescara BPL 3.101-Feb-02 CR Bolzano BPL 3.019-Apr-00 B. Pop. Crema BPL 3.004-Jan-01 CR Mirandola B. CR Firenze 2.714-Jan-00 CR Carpi Rolo Banca 1473 2.707-Dec-02 B. Chiavari BPL 2.621-Nov-00 Carime BPCI 2.606-Jan-00 Cr Imola BPL 2.517-Jul-03 CR Spezia B. CR Firenze 2.214-Dec-02 CR Prato B.Pop.Vicenza 2.217-Jul-03 CR Carrara Banca Carige 2.010-Jun-00 B. Napoli SPIMI 1.903-Nov-00 B. Pop. Ancona B. Pop. Bergamo 1.820-Dec-01 B. Cardine SPIMI 1.715-Jan-02 CR Pescara BPL 1.625-Oct-00 Cardine SPIMI 1.529-Nov-00 B. Sardegna B. Pop. Em. Romagna 1.1
33
Asset under management
* Net inflows, source: Assogestioni ** Business territory, source: Prometeia Dec. 2003
2003 LEADING ASSET GATHERERS*
Sanpaolo IMI 5,615 BPU 2,920
ANIMA 2,231
BANCA CR FIRENZE 1,632
CREDEM 1,491
MPS 1,449
B. LOMBARDA 1,333
POSTE ITALIANE 1,288Euro mn
11.1%
12.6%12.8%
9.6%
7.1%
5.9%
7.4%
10.9%
2000 2001 2002 3Q 2003
AUM market share** (ex insurance products)
Insurance product market share**
34
3.2%
4.7%
6.0%
6.7%
10.9%
11.0%
15.7%
0.0% 8.0% 16.0%
Italy
Belgium
France
Spain
Germany
U.K.
U.S.A.
5.8%
7.5%
10.1%
10.8%
17.4%
18.9%
23.0%
0.0% 12.0% 24.0%
Italy
Belgium
France
Spain
Germany
U.K.
U.S.A.
2002 - Consumer credit / G.D.P.
2002 - Consumer credit / Household consumption
Consumer credit - Market comparison
35
0%
5%
10%
15%
20%
25%
30%
1Q'98
2Q 3Q 4Q 1Q'99
2Q 3Q 4Q 1Q'00
2Q 3Q 4Q 1Q'01
2Q 3Q 4Q 1Q'02
2Q 3Q 4Q97.0
100.0
103.0
106.0
109.0
112.0
Household consumption
New vehicles
Furniture
Personal loans
Credit cards
Electronics
Source: ASSOFIN and Prometeia. 1Q ’98 household consumption=100
Consumer credit - Low price sensitivity
36
One of the best performer since the enactment of the
Italian “Securitisation Law” (1999)
Perseo Finance: NPLs securitisation
CUMULATED RECOVERIES
0
20000
40000
60000
80000
100000
120000
Quarters
Eu
ro A
mo
un
ts
Total recovered
Scenario 1
Scenario 2
Scenario 3
Scenario 4
37
Euro 521 million of “in bonis” residential mortgage
loans: no value adjustment required so far
CR Firenze Mutui: mortgage loans securitisation
Class Face amount/ million
YieldUnderwriting
priceRating
Fitch/Moody's/S&P
A1 51.3 Euribor 3 m + 19 bp 100 AAA / Aaa / AAA
A2 425.6 Euribor 3 m + 28 bp 100 AAA / Aaa / AAA
B 28.2 Euribor 3 m + 75 bp 100 A / A2 / A
C 7.7 Euribor 3 m + 145 bp 100 BBB / Bbb / BBB
D 8.2 Floating BCRF portfolio 100 ----
38
2 0 0 3 R E S U L T S
2 0 0 4 - 0 5 T A R G E T S U P D A T E
M a r c h 3 1, 2 0 0 4
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