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The IntesaBci Group. June 2002. Strategic Highlights. Agenda. 1. The IntesaBci Group. 2. Ongoing Integration Process and 1 st Quarter 2002 Results. 3. Strategic Highlights. Agenda. 1. The IntesaBci Group. 2. Ongoing Integration Process and 1 st Quarter 2002 Results. 3.

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The IntesaBci Group


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agenda
Strategic HighlightsAgenda

1

The IntesaBci Group

2

Ongoing Integration Process and 1st Quarter 2002 Results

3

agenda1
Strategic HighlightsAgenda

1

The IntesaBci Group

2

Ongoing Integration Process and 1st Quarter 2002 Results

3

setting up of intesabci main steps
Setting up of IntesaBci: Main Steps

January 1998

1998

1999

2000-2001

Divisional Model, Merger and Network Restructuring

Setting up of Banca Intesa (Federal Model)

Acquisition of Cariparma and Friuladria

Acquisition 70% of BCI

+

+

31.12.2001

31.12.1997

31.12.1998

31.12.1999

Total Assets

144

168

315

304

(€ bn)

4,231

Branches

1,885

2,429

4,365

slide5

Shareholding

Shareholders’ Agreement : 37.98%

Generali

Group

Lombardo

Group

Parma

Foundation

Crédit

Agricole

Cariplo

Foundation

Commerzbank

Group

3.15%

13.78%

8.42%

5.36%

4.00%

3.27%

Market

62.02%

Total Number of Shares Outstanding (m) 6,848

- Ordinary Shares: 5,916

- Savings Shares: 932

mission and strategic objective s
To optimise capital allocation and value creation through the divisional model

To achieve best practice in operating efficiency

To develop business opportunity offered by the multi-channel approach

Mission and Strategic Objectives

To consolidate leadership in the Italian market and become one of the best European groups by:

  • value creation
  • market share
  • quality and width of product range
divisional model and merger to improve commercial effectiveness

Service Centre (IT, Logistic, etc)

Staff and Governance Centre

Divisional Model and Merger to Improve Commercial Effectiveness

Top Management

Business units specialised per clients/market/ product with full control of operating leverage

Centralisation of services and infrastructures with a specialisation per business unit

Italian Banks

Product Companies

Retail

Division

Private

Division

Intl.

Division

Wholesale

Division

Asset Mgmt

E-Lab

Corporate

Division

a multichannel distribution model for a unique franchise

Retail

1,900

Financial

Consultants

3,125(a)

Branches

4,000

ATM

Private

Intesa-BCI

Private

Banking

Branches

53

Corporate

109

Corporate

Branches

Wholesale

15

Global

Relationship

Manager

Operative

Points

A Multichannel Distribution Model for a Unique Franchise

Physical Network

Virtual Channels

Mobile Phones

Home Banking

TV Banking

Telephone Banking

Distribution capability with dedicated structure per market segment, supported by high quality products factories and effective commercial strategies, is the key factor for success

  • Only domestic branches and including non-integrated banks (Friuladria, Cariparma, Banco di Chiavari, etc). Foreign branches are around 1,100
a leading role in europe

Italy

Euroland

Europe

1st in Total Assets

As of 31/12/01

17th in Total Assets

As of 31/12/01

25th in Total Assets

As of 31/12/01

9 million in Italy

13 million

customers

IntesaBci Group

4 million abroad

Total assets: € 314,897 m

As of 31/12/01

Shareholders equity: € 14,171 m (*)

As of 31/12/01

Credit Ratings

Moody’s

Standard & Poor’s

Fitch

Market Capitalization: € 21 bn

As of 31/05/02

A1

A

Long term

A+

P1

A1

Short term

F1

A Leading Role in Europe

(*) Including Net income

slide10

Strong Presence in the Richest Italian Regions

Branches

Deposits

Leadership in the richest Italian regions (>40% of GDP)

North-West

22%

North-West

15%

North-East

10%

North-East 12%

Leadership in Lombardy:

Branches: 16%

Deposits: 25%

Centre

9%

Centre

9%

Islands

8%

Islands

9%

South

7%

South

7%

Deposits

Branches

10.8%

Market Share

13.5%

Data as of December 2001

l eadership in italy in retail and wholesale banking
Customer Loans 14.9%

Direct Funds 13.5%

Mutual Funds (*) 18.4%

Portfolio Management 22.2%

Leasing 8.1%

Factoring 27.0%

Life Insurance 8.9%

Branches 10.8%

Financial Consultants 6.1%

Leadership in Italy in Retail and Wholesale Banking

Retail Banking

Investment Banking

Ranking

Market Share

as of 31.12.01

Market Share

as of 31.12.01

Bond

Secondary (MTS) 4.8%

Secondary (MOT) 8.3%

Equity

Secondary (*)7.0%

Derivatives

FIB 30 4.2%

Warrants 5.0%

N.D.

(*) Data as of March 2002

agenda2
Strategic HighlightsAgenda

1

The IntesaBci Group

2

Ongoing Integration Process and 1st Quarter 2002 Results

3

a focused strategy for each market segment
A Focused Strategy for each Market Segment

Market Segment

Strategy

Maintain market share and increase customer loyalty. Offer standardized products; keep use of virtual channels; increase cross selling; develop consumer credit; offer non financial mass products, i.e. P.C., travel packages, etc. (branches as “salespoints”); B2C

RETAIL

Base

Increase market share and acquire customer loyalty. Offer customized financial products, also through sophisticated remote banking; fidelize clients through advisory services with dedicated managers (branches as advising centres)

Premium

Increase market share and acquire new customers. Offer wide range of products suited to meet all small business needs by dedicated personnel; offer structured finance products, parabanking and electronic corporate banking. B2B access

Business

Offer complete, highly sophisticated and tailored financial services (art advisory, trustees, etc.), through specialized branches and by well-trained personnel

PRIVATE

Offer full range of sophisticated products and advisory services through specialized channels, by dedicated personnel, including structured finance products (e.g. project financing) and B2B access

CORPORATE

Maintain global relationship with corporate customers, focusing on highly profitable fee-based services and structured finance products

LARGE CORPORATE

some commercial data

Nearly 117,000 new cards issued in 2001

Almost 7,900 new contracts in 2001

104,000 new contracts in 2001

More than 168,000 new contracts in 2001

More than 468,000 new contracts in 2001

Some Commercial Data
asset management
Asset Management

AUM / Indirect Deposits (%)

Mutual Funds Asset Mix

As of 31.12.2001

  • AUM / Indirect Deposits ratio lower than market best practice (42% vs 63% of SanPaoloImi and 50% of UniCredito as of 31.12.01)
  • Equity and balanced funds lower than the system average (Equity + Balanced : 28% vs 37% for the system)
  • Stable Mutual Funds market share thanks to a more defensive asset mix
bancassurance complementary pension schemes
Bancassurance & Complementary Pension Schemes

Bancassurance - Technical Reserves

Leader in Open-Ended Pension Funds Market

As of31.12.01

(Euro m)

+25%

  • Strong market position and growth opportunity in bancassurance (technical reserves +25% YoY, 2001 new premium: €3.2bn)
  • Open-ended Pension Funds: n. 1 in Italy with nearly one third of the market
  • Open-ended Pension Funds 2001 net inflows: €102m
  • Strong growth potential in Italy in the Pension Funds Industry
lending policy
Lending Policy

Return on Capital Allocated has become the Key Driver of our Lending Policy

Improving spreads even vs the industry

Pricing

Average Customer Spreads (*)

Short Term Spread

D avg. 2001 vs avg. 2000

Long Term Spread

D avg. 2001 vs avg. 2000

(*) Source : Bank of Italy - Major Italian banks

well diversified sources of revenue
Well Diversified Sources of Revenue

2001 Total Income Breakdown by Business Area (a)

Private Division

1.9%

Retail Division

32.7%

Corporate Division

8.8%

Wholesale

Division

17.6%

OECD

(excluding

Hungary)

2.7%

Product

Companies(b)

9.2%

Regional Banks

13.1%

Central Eastern

Europe

3.6%

LatAm

10.4%

Multinational Banking

16.7% (c)

46% of consolidated Total Income deriving from Retail Division and Regional Banks

(a) Excluding Corporate Center

(b) Leasing, Factoring & AUM

(c) VUB excluded

exposure to large corporates
Exposure to Large Corporates
  • Exposure to Large Corporates has already been curtailed in 2001
  • Weekly monitoring available through IntesaBci’s Intranet for every Global Relationship Manager
  • Adoption of different risk indicators:
    • External ratings (S&P, Moody’s)
    • Internal ratings (“judgmental” approach)
    • “Market-based” measures (spreads on listed bonds and Expected Default Frequency - EDF)
  • Analysis of each single position exposure combined with its risk profile
  • Identification of “outlier” positions
  • Risk analysis, by macroareas, of the sectors of the “outlier” positions with the EDF method
  • Analysis by risk profile, geographical area and economic sector
latin america risk comprehensive ly dea l t with

Country

2001 Provisions

(Euro m)

Argentina

  • 100% investment value in local subsidiaries on Sudameris SA Paris Book 260
  • 100% of the infragroup credits and 40% of cross border exposure 220
  • Previous charges to the consolidated Financial Statements (70)

Net consolidated charges 410

Peru

  • 100% investment value in local subsidiaries on Sudameris SA Paris Book 430

of which: - €120m referable to goodwill write-off

- €120m referable to cancellation of deferred taxes

  • Previous charges to the consolidated Financial Statements (90)

Net consolidated charges 340

Latin America Risk Comprehensively Dealt With
sale of banco sudameris brasil

31/12/01 adjusted Book Value of BSB (a)

+

Fixed goodwill component of $925m

Price Offered

31/12/01 unadjusted Book Value of BSB

approx. €590m

approx. €890m

approx. €560m (b)

31/12/01 carrying value of BSB on the balance sheet of Banque Sudameris SA Paris

31/12/01 carrying value of BSB on the consolidated balance sheet of IntesaBci

Sale of Banco Sudameris Brasil

Share Purchase Agreement signed with Banco Itau’

for the purchase of 94.57% of the capital

of Banco Sudameris Brasil (BSB)

held by IntesaBci’s subsidiary Banque Sudameris SA Paris

  • Due Diligence under way
  • Due to exchange and consolidation differences charged to the consolidated shareholders’ equity
strengthened financial structure

NPLs Coverage Ratio (%)

NPLs/Customer Loans (%)

+6.8 p.p

+7.5 p.p.

NPLs/ Shareholders’ Equity

Tier 1 Ratio

(*)

-27 p.p.

-8 p.p.

(*) After €1,158 m Put Warrant mark to market and Put Warrant market risk capital absorption of €761m. By November 2002,a 35 b.p. residual impact from Put Warrant other things being equal

StrengthenedFinancial Structure
agenda3
Strategic HighlightsAgenda

1

The IntesaBci Group

2

Ongoing Integration Process and 1st Quarter 2002 Results

3

integration process
Integration Process

Divisional

Model

&

Mergers

  • Divisional Model at work
    • Governance Centre: completed 3 months in advance
    • Private Division: completed 1 year in advance
    • Corporate Division: completed 9 months in advance
    • Retail Division: Central and Regional Structures completed 9 months in advance
  • Elimination of duplication and merger of Product Companies (AUM, Financial Agents, Caboto …)
  • Rationalization of the branch network
  • One single IT system for Cariplo and Bav 9 months in advance
  • One single IT system for the Group at the beginning of 2003

IT System

slide25
Shareholders’ Equity 14,279 14,172 0.8

Total Assets 314,713 314,898 (0.1)

Customer Direct Funds 184,204 185,105 (0.5)

Customer Indirect Funds 327,380 325,579 0.6

- of which Assets under Management 141,536 137,471 3.0

Total Customer Administered Funds 511,584 510,683 0.2

Customer Loans 179,345 183,356 (2.2)

Tier 1 Ratio6.25%

Tier Total Ratio9.66%

Assets Under Management Growing

31.03.2002(*)

31.12.2001

%

(Euro m)

After €975mPut Warrant

mark to market and Put Warrant market risk capital absorption of €715m

(*) VUB at Equity Method

costs and provisions declining
Costs and Provisions Declining

(Euro m)

-6.4% vs Q1 2001 official(Carime and Legnano included)

Including €183m income from put warrantmark to market

-5% vs Q1 2001net of non recurring dividends from merchant banking

D% Q1 02/ Q1 01 (2.4) (58.6) (9.4) (11.8) (8.1) (1.0) (20.2) 7.8 (2.9) 52.5 0.9 (23.2)

pro forma (*)

Net Provisions

NetIncomefor the period

Operating Costs

Net Commissions

Total Income

Income taxes,Change in GBR Fund and Minority Interest

Net Interest Income

Goodwill Amortization

Extraordinary Income & Non Recurring Items

Operating Margin

Dividends +

Income from Equity Invest.

Trading Profits and

other Net Operating Income

(*) Q1 01 restated with Carime and Banca di Legnano excluded and BCI 100%.Not restated for the disposal of branches

efficiency and financial strength improved

-1.2 p.p.

-1.8 p.p.

+0.9 p.p.

Efficiency and Financial Strength Improved

Personnel Cost / Net Interest Income

Cost / Income (*)

(*) Excluding non-recurring dividends from MerchantBanking in 2001

NPLs Coverage Ratio

NPLs / Shareholders’ Equity

-1.5 p.p.