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The IntesaBci Group

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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  1. The IntesaBci Group June 2002

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

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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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% 1° 1° 2° 1° 2° 1° N.D. 1° 5° (*) Data as of March 2002

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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. 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

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

  24. 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

  25. 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

  26. 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

  27. -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.

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