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Michal Ron –Head of International Relations and Network @SACE Italian Festival in Bulgaria 2010 Forum economico “Bulgaria-Italia: insieme per uscire dalla crisi” Sofia, 7 giugno 2010
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Bridge over troubled watersSofia, 7th June 2010
Michal Ron – Head of International Relations and Network
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We offer solutions for theintegrated management
of commercial and political risks
THE LEADING ITALIAN CREDIT MANAGEMENT COMPANY
Export credit and Project Finance Protection of foreign investments Financial guarantees Credit insurance Surety and construction risks
3
Our strengths
Over 30 years of providing risk management solutions to small and medium-sized business and large corporations
EXPERIENCE
Aa2 credit rating (Moody’s)
Shareholders’ equity: € 5.9 BnFINANCIAL SOUNDNESS
Outstanding commitments for over € 50 Bn to insure commercial and financial transactions in over 180 countries
RELIABILITY
Insured business: € 34 Bn, + 22% yoy
Consolidated net income: € 460 Mn, + 32% yoy
Gross written premiums: € 430 Mn, + 13% yoy
FINANCIAL RESULTS
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Risks insured by geographical area (31/03/2010)
We cover political and commercial risk in over 180 countries
SACE Exposure
1. Italy 15%2. Russia 13%3. Turkey 8%…6. Balkans 4.5%
of which:
Bulgaria 2% € 0.5 Bn
Outstanding Guarantees
TOTAL 35,3 bln
Others25,0 %
Turkey7,1 %
Europe28,4 %
LATAM5,5%
North America
4,5 %
Russia & CIS16,3%
Sub Saharian
Africa2 ,1%
Asia Pacif ic6,5 %
Balkans4,5 %
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Economic trends in recession: ECAs’ role
• The contraction of international trade in 2009 has been dramatic. The main drivers of the trade collapse have been the strong reduction of demand combined with an increase in the elasticity of world trade.
• Part of the international response to the global crisis has involved, and is involving, support to trade financing. Export Credit Agencies have played an important role in the recovery, and their contribution is still essential in supporting economic growth.
• In a global context of growing uncertainty, where risks are more unpredictable and banks that greatly scaled down their lending facilities, dramatically increased their liquidity spreads and show little or no willingness to share risk, the role of ECAs appear even more determinant in helping enterprises to carry on their activities.
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Pure ECA
Pure Market Player
Advanced productsTraditional products
Non
mar
keta
ble
risk
Mar
keta
ble
risk
U.S EXIM ECGD (UK)
Euler (Germany) Coface (France) Atradius (Netherlands) CESCE (Spain) OekB (Austria)
Sinosure (China) KEIC (Korea)
NEXI (Japan)
ONDD (Belgium) Nordic Agencies European Emerging Markets Agencies EFIC (Australia)
EDC (Canada)
SACE (Italy)
The evolution of an ECA: a time pattern
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The evolution of SACE: increasing our scope as a global partner
Export Credit OECD regulated
PRI insurance
Bonding & Surety
Export Credit MADE BY
Export Credit UNTIED
SME Credit Insurance/
Enhancement
Domestic Strategic Sectors
Working Capital Facilities
Credit Insurance(Short Term)
DU
RAT
ION C
ON
TENT
PRODUCTS
MARKETS
Factoring
Export Bank
Financial Guarantee
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Our outlook on the Region
• Before global crisis, large capital inflows into Bulgaria generated a robust GDP growth.
• At the end of 2008, capital inflows sharp decrease led to a contraction of domestic demand, whereas the recession in Bulgaria’s trading partners caused a drop in exports (GDP growth: -5,1% in 2009)
• In 2010, due to the recovery in global GDP, which growth will stimulate exports, Bulgarian GDP is projected to increase by 0.2%
• The main challenge for the banking system will be to absorb the increase in NPLs. Anyway, thanks to prudent regulation, the banking system has built up substantial buffers during the boom years.
• Some concerns derive from the fact that 28% of the Bulgarian banking sector is held by Greek banks. Anyway the general assumption is that Greek parent banks will support their investments in the Region.
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SACE Market Risk Index
RISK: M2
BULGARIA
SACE Terms of Cover
Sovereign Risk openCorporate Risk openBank Risk open
OECD Country Risk Category
4/7
Consensus Category
2
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SACE’s support in Bulgaria
Total Exposure
21 new operations in the last three years, mostly transactions involving Italian SMEs
New Guarantees
Several potential transactions under current evaluation, for a total amount of € 70 MnPipeline
€ 454 Mn (2% of total portfolio, 13th Country in terms of total exposure)
€ 659 MnFinancial Guarantee
Modernisation of Stara Zagora plant
2006 Bulgaria
€ 12 MnBuyer Credit
Supply of a four-high combination reversing mill
2007 Bulgaria
€ 1.5 MnBuyer Credit
Plant for the production of tiles
2009 Bulgaria
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SACE’s Balkans Programme
• After a long period of political instability and economic distress related to the breakup of ex-Yugoslavia, the Balkans have reached a more stable situation and commenced implementing important reform programs.
• In December 2006 SACE adopted a more open approach towards the Region in response to the growing request for SACE’s support from Italian exporters.
• SACE’s cover policy takes into consideration the improvements in the Countries’ political and economic situation and, regarding sovereign risk, the presence of IMF ceilings on public or publicly guaranteed debt.
• The Balkans Programme has allocated an amount of € 300 Mn to directly support transactions in the Region.
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SACE’s future office in Balkans
Balkans region plays a strategic role for Italy. Trade flows between our firms and these Countries have been increasing significantly in the last years. New business opportunities have emerged for Italian firms in the context of growing political stability and economic expansion.
Considering the positive market outlook and the business opportunities under current evaluation, SACE wishes to establish a formal presence in the Region through the opening, in 2010, of a Representative Office in Bucharest.
The new office will act as a reference point for Italian exporters and their local partners and will enable SACE to further expand its Balkan operations and meet the growing demand for our support provided to investments in the Balkan Region.
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SACE’s International Network
MOSCOW
* To be opened in 2010
SAO PAULO
MUMBAI*
BUCHAREST*
JOHANNESBURG
ISTANBUL*
HONG KONG
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HEAD OFFICERomePiazza Poli 37/42 - 00187 RomeTel. +39 06 67361 • Fax +39 06 6736225
ITALY
BariVia Amendola 172/5 - 70125 BariTel. +39 080 5467763 • Fax +39 080 5467764
LuccaVia Dante Alighieri 167 - 55100 LuccaTel. +39 0583 40071 • Fax +39 0583 400790
MilanVia A. De Togni 2 - 20123 MilanTel. +39 02 4344991 • Fax +39 02 434499749
ModenaVia Elsa Morante 71 - 41123 ModenaTel. +39 059 891240 • Fax +39 059 820832
Monzac/o Unione Industriali Monza e BrianzaViale Petrarca 10 - 20010 MonzaTel. +39 039 3638262 • Fax +39 039 3638208
RomePiazza Poli, 37/42 - 00187 RomeTel. +39 06 6736309 • Fax +39 06 6736770
Turinc/o ICE - Via Bogino 13 - 10123 TurinTel. +39 011 836128 • Fax +39 011 836425
VeniceViale Ancona 26 - 30172 Venice MestreTel. +39 041 2905111 • Fax +39 041 2905103
WORLDWIDE
China40/f Suite 4001 - Central Plaza 18Harbour Road - Wanchai, Hong KongTel. +852 36202323 • Fax +852 36210227
South AfricaTwo Commerce Square 39, Rivonia Road Corner Melville Road Sundhurst2196 Sandton, JohannesburgTel. +27 11 2680623 • Fax +27 11 2680617
BrazilAvenida Paulista 1971 - 4° andar01311-300 Sao PauloTel. +55 11 31712138 • Fax +55 11 32664051
Russiac/o ICE - Office n.1202 Krasnopresnenskaja Naberejnaja 12123610 MoscowTel. +7 49 52582155 • Fax +7 49 52582156
New openings: Istanbul, Bucarest.
How to contact us
www.sace.itCustomer care: +39 06 6736000