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An introduction
to the UBI Banca Group
April 2017
This document has been prepared by
Unione di Banche Italiane Spa (“UBI”) for
informational purposes only.
It is not permitted to publish, transmit or
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The information, opinions, estimates and
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This document may contain statements
that are forward-looking: such statements
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outside the control of UBI, could cause the
results of UBI to differ materially from those
set forth in such forward looking
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Under no circumstances will UBI or its
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Group, please refer to publicly available
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By receiving this document you agree to be
bound by the foregoing limitations.
Please be informed that some of the
managers of UBI involved in the drawing
up and in the presentation of data
contained in this document possess stock
of the bank. The disclosure relating to
shareholdings of top management is
available in the half year and the annual
reports.
Methodology
All data are as at 31st December 2016
unless otherwise stated.
Disclaimer
Page 2
Agenda
The UBI Banca Group
Background
UBI Banca and its Peers
UBI Banca’s profile in a snapshot
Key figures as at 31st December 2016
The Group Structure
Presence in Italy
The UBI Banca International Network
Contacts
Annexes
Page 3
Background
1888 Birth of the “Banca San Paolo di Brescia” (BSPB)
1883 Birth of the “Credito Agrario Bresciano” (CAB)
1963 BSPB acquires “Banca di Valle Camonica” (BVC)
1998 Merger of CAB and BSPB with the creation of “Banca Lombarda” as parent company and contribution of branch network of CAB and BSPB to “Banco di Brescia”0
2000 Acquisition of “Banca Regionale Europea”* by Banca Lombarda. The Group takes the name of “Banca Lombarda e Piemontese Group”
Birth of the “Banca Mutua Popolare della Città e Provincia di Bergamo”, subsequently renamed “Banca Popolare di Bergamo” (BPB) 1869
Birth of the “Società per la Stagionatura e l’Assaggio delle Sete ed Affini” subsequently renamed “Banca Popolare Commercio e Industria” (BPCI) 1888
Merger of BPB and “Credito Varesino” (BPB-CV) 1992
Acquisition of “Banca Popolare di Ancona” (BPA) by BPB-CV. Birth of the BPB-CV Group 1996
Acquisition of “Banca Carime” by BPCI 2001
Birth of the “BPU Banca Group” from the integration of BPB-CV and BPCI 2003
1st April 2007 Birth of
“UBI Banca” following the merger of the
BPU Banca Group and the
Banca Lombarda e Piemontese
Group
* Banca Regionale Europea was created in 1994 following the merger between “Cassa di Risparmio di Cuneo” and “Banca del Monte di Lombardia” Page 4
1992 CAB acquires “Banco di San Giorgio” (BSG)
Unione di Banche Italiane Spa (“UBI Banca”) was formed following the merger of the skills and experience of
the BPU Banca and Banca Lombarda e Piemontese Groups (1st April 2007)
The history of UBI Banca is marked by a succession of mergers which have led banks with strong roots in local
communities to the significant reality of today
20 February 2017
UBI Banca concludes
incorporation of 7 Network
Banks completing the
Single Bank Project
12 October
2015 UBI is the first popolare bank to become a Joint Stock Company
Background
Since 4th November 2014 UBI Banca is under the ECB’s Single Supervisory Mechanism.
UBI Banca is a joint stock company as from the 12th of October 2015. The transformation from co-operative was approved by a general meeting of the shareholders on 10th October 2015, after a recent Law dated March 2015 established that cooperative banks with total assets above 8€ bln must transform into Joint Stock Companies.
UBI Banca is listed on the Milan Stock Exchange and included , among others, in the FTSE/MIB and in the FTSE4Good indexes.
UBI Banca’s governance model is based on a “dualistic” system. Under this dualistic governance system, the shareholders appoint a Supervisory Board (strategy and supervision). The current Supervisory Board was appointed on 2nd April 2016 by the General Meeting of Shareholders of UBI Banca (15 members) for the 3-year period 2016-18.
The Supervisory Board, in turn, appoints a Management Board (day-by-day management of the bank), currently composed by 7 members.
Page 5
* Total shareholders (voting and non voting) number around 155,000
Market Capitalisation* as at 22nd February
2017 (EUR bln) Source: “Il Sole 24Ore” – Italian Financial Newspaper –
Dated 23rd February 2017
35.8
7.6
2.1
3.5
# 4
2.9
UBI Banca and its Peers
Page 6
117
860
725
65
153 168
3,978
2,032
No. of branches as at 31st December 2016
3,524
Customer loans as at 31st December 2016 (bln/€)
444
365
111
45
107 82
396
394
48
105 85
1,524
# 5
# 5
# 5
# 5
112 1,200
2,300
1 1
2
Source: Press releases and presentation 1) Domestic branches 2) Customer loans include repos
Total assets as at 31st December 2016 (bln/€)
Total direct funding 31st December 2016 (bln/€)
* Data as at 30 September 2016
Figures as at 31 December 2016 unless otherwise stated
Strong competitive positioning
■ 1,524 branches in Italy and 6 abroad, with a market share of 5.2%* serving approx. 3.6 million clients ■ 5th largest bank in Italy by customer lending and direct funding ■ Focus on Northern Italy where 80.3% of loans to customers and 74.3% of customer deposits are generated
Solid Capital and Balance Sheet Position
■ Capital ratios as at 31.12.2016, after booking significant 2019/2020 Business Plan costs (€ 1.3 bln gross; € 0.85 bln net)
CET 1 ratio phased in: 11.48% vs. 7.5% SREP requirement, representing a buffer of 3.98 p.p.
CET 1 ratio fully loaded under Basel 3 rules: 11.22% (approx. 11.7% pro-forma of DTAs from shortfall reabsorption)
■ Basel 3 Leverage ratio at 5.75% phased in, 5.62% fully loaded
■ RWAs density of c. 53%
Good Asset Quality
■ 77.5% of Performing Exposures is low risk (73.6% in December 2015)
■ Good asset quality compared to the Italian banking system. Gross NPEs/total gross loans at 14.4% (9.8% net). New inflows to NPEs from performing loans down by 46.9% vs FY2015, back to 2007 levels.
■ Coverage up to 45.8% for NPEs and to 58.5% for Bad Loans (including write-offs), respectively +8.6 percentage points and +6.2 percentage points vs. December ‘15
■ Strong liquidity position framework with total eligible assets at € 28 bln (over 53% of current accounts and deposits) and both LCR and NSFR >100%
■ Direct funding mainly from own customer base (over 80%)
■ Current accounts and deposits from ordinary customers at € 52.4 mln (+9.9% vs. December 2015)
Funding and Liquidity
Low Risk Profile
■ Focus on traditional banking activities: Customer Loans / Total Assets at 72.8%
■ Financial Assets / Total Assets: c. 16%. Italian Govies represent 11.7% of total assets
The Group in a snapshot: predominant retail business, solid capital base,
low risk profile
Page 7
Key figures as at Dec 2016
11,48% 11,22%
7,50%
CET 1 phased in
CET 1 fully loaded
SREP requirement
STRONG CAPITAL
Buffer 398 bps (372 bps vs FL)
VOLUMES
FINANCIAL ASSETS & LIQUIDITY ECONOMICS
Loan book at 82 bln/€: growth in M/L term component at 55.7 bln/€ compared to 54.9 in Dec 2015
Assets under management + Bancassurance, amounting to 54.6 bln/€, (+12.5% vs Dec 2015)
Deposits and current accounts to 52.4 bln/€, up both compared to Dec 2015 (+9.9%) and to Jun 2016 (+6.8%)
Further downsizing of Italian Govies Portfolio: 13.2 bln/€ (-28% vs Dec 2015) within UBI’s diversification strategy
A very high proportion of the portfolio consists of HQLA (High Quality Liquid Assets), with govies accounting for 73.8% of net financial assets
Total eligible assets at 28 bln/€, over 53% of current accounts and deposits, of which 14.4 bln/€ unencumbered
MAIN INCOME STATEMENT ITEMS in FY16 (€ mln)
Core revenue: NII + Net fees & commissions 2,833
Operative income 3,119
Operating expenses (2,153)
Net operating income 966
Profit (loss) for the period before BP impact* (566)
Business Plan impacts (264)
Profit (loss) for the period after BP impact* (830)
Profit net of non recurring items and net of the portion of impairment losses on loans with absorption of the shortfall
112
Proposed a dividend at 11€/cent per share for the year 2016, to be paid in May 2017. The Group has always paid cash dividend throughout the crisis
* Nearly 100% of Business Plan one off costs have been booked in 2016. The Business Plan was launched on 27Th June 2016 and covers a time span from 2015 to 2020. “Profit (loss) for the period before BP Impact” also includes the impact of the increased provisions with a consequent absorption of the provision shortfall mentioned in the Business Plan (approx. €851 mln gross, €586 mln net)
Page 8
Page 9
“Single Bank” project completed on 20th February 2017,
4 months ahead of schedule… (1/2)
287 branches
192 branches
64 branches
21 branches, ~ 787
financial advisors
100.00%
74.79%
100.00%
98.73%
202 branches
211 branches
99.59%
99.99%
346 branches 100.00%
207 branches
83.76%
Information updated as at 31st December 2016
Network Banks Main Product Companies
Asset
Management
■ UBI Pramerica (partnership with
Prudential US)
Factoring ■ UBI Factor
Leasing ■ UBI Leasing
Life
Bancassurance
■ Lombarda Vita (partnership with
Cattolica)
■ Aviva Vita Spa (partnership with Aviva)
Execution of “Banca Unica” (“Single Bank”) announced
in the 2019-20 Business Plan.
(Extraordinary General Meeting on 14th Oct 2016). The
merger of BPCI and BRE into UBI Banca is effective
from 21st November. Merger of other 5 Network banks
completed on 20th February 2017
On 18th Jan 2017 the contract for the purchase of Nuova Banca
delle Marche, Nuova Banca dell’Etruria e del Lazio and Nuova
Cassa di Risparmio di Chieti, present in central Italy, was signed.
See press release as of 12th Jan 2017 for further detail
The Group Structure : New organisational structure implemented (2/2)
Subsidiaries
merged into
UBI Banca
Page 10
Agenda
UBI Banca International Network
Presence in the world
Munich and Madrid Branches
Page 11
Presence in the world
Luxembourg
• UBI Banca International**
• UBI Trustee SA
• UBI Management Co SA
Page 12
Munich***
UBI Banca
Branch
Krakow
UBI Factor Branch
Vienna
Business Consultant
Moscow
Representative Office
Mumbai
Representative Office
Hong Kong
Representative Office
São Paulo
Representative Office
Madrid***
UBI Banca
Branch
Antibes, Menton, Nice
UBI Banca Branches
Shanghai
Representative Office
Shanghai
Zhong Ou Asset Management
Company Co. Ltd*
* Joint-venture in which UBI Banca holds 35% of the total share.
Casablanca
Representative Office
New York
Representative Office
** On 28th April 2016 UBI Banca signed a contract for the sale of 100% of the share capital of UBI Banca International S.A. to EFG International AG. The transaction is expected to be completed during the first half of 2017. ***As of April 2017, the branches of Munich and Madrid (formerly UBI Banca International) have been incorporated into UBI Banca Spa
Dubai
Representative Office
Page 13
Domestic/Export/Import Factoring, Confirming
Credit and Bilateral Loans
Syndicated Loans
Guarantees and commitments
(Under implementation)
Invoice receivables discount & financing Advances on invoices Bill discounting
Corporate Banking services Deposits in the major currencies Internet banking
Execution of payments transactions
Advice
Products and services
Bid Bonds Financial Bonds
Advance Payment Bonds Performance Bonds
(Trade Finance)
Overdraft facility Medium and short term loans
Advance on invoices Real estate financing
Factoring with recourse, no recourse, with notification, not notification Reverse factoring
Advice and services related to mergers and start up
Financial Institutions and Corporate customers Target customers
Munich and Madrid Branches
Agenda
Contacts
UBI Banca - Financial Institutions
Representative Offices Contacts
Foreign Branches
Page 14
Page 15
Isabella Moavero Head of Financial Institutions
Lorenzo Tassini Head of Correspondent Banking
• Indian Subcontinent, China & Far East, Oceania
Alistair Newell Relationship Manager
• North America, Central America, South America, Caribbean, Israel
Ernst Rolf Hartmann Relationship Manager
• Turkey, Middle East, Africa Lorenzo Tassini
Relationship Manager [email protected]
• Europe & CIS Countries
Maria Lagonigro
Relationship Manager [email protected]
• Global Players – Responsible for relationships with multi-regional banking groups & Special Projects
Marco Camozzi Relationship Manager
• Silvia Colosio
• Elisa Gasparini
• Matteo Scandella STAFF
Paolo Vitali Head of International Network
REPRESENTATIVE
OFFICES
STAFF Elena Rustico Jasmina Dzindo Antonella Taiocchi Elena Voronova
UBI Banca
Raffaella Chilelli Foreign Branches Coordinator
STAFF Sara Miglioli Alessandro Guidi
Representative Offices Contacts
MUMBAI
Mr Andrea Croci
Tel. +852 2878 7393
Fax +852 2878 7932
HONG KONG
Ms Rajeshree Balsari
Tel. +91 22 22023601
Fax +91 22 22023603
SHANGHAI
Ms Lu Bo
Tel +86 21 61675333
Fax +86 21 61675582
Page 16
MOSCOW
Mr Isidoro Guerrerio
Tel. +55 11 3063 0454
Fax +55 11 3063 3785
SAO PAULO
Mr Ferdinando Pelazzo
Tel. +7 495 725 4466
Fax +7 495 725 4465
VIENNA (Business Consult.)
Ms Annick Stockert
Tel. +43 1 514 37 26
Fax +43 1 514 37 60
DUBAI
Mr Andrea De Benedittis
Tel +1 646 871 7600
Fax +1 646 205 4006
NEW YORK
Mr Luigi Landoni
Tel +971 4 3277289
Fax +971 4 3277290
CASABLANCA
Mr Abdelkrim Sbihi
Tel +212 520 48 12 70
Fax +212 520 48 12 72
Page 17
Munich
Mr. Vitale Bonacina, General Manager
5, Nymphenburgerstrasse, 80335, Munich
Ph: (+49) 89-29006114
Email: [email protected]
Contacts
BEPODEMM
BIC CODE
Mr. Enrique Salomone, General Manager
Torre Espacio Planta 45 Pº Castellana, 259 – 28046 Madrid
Ph: (+34) 91 334 40 61
Email: [email protected]
Contacts
UBIBESMM
BIC CODE
Foreign Branches
Madrid
Agenda
Annex
UBI Banca’s consolidated results as at 31st December 2016
Other main Group Companies
Page 18
The UBI Banca Group: consolidated results as at 31st Dec 2016 2016 results create the premises for a 2017 financial year with strongly improved results
FY2016 includes all one off charges sustained for the implementation of the 2019/2020 Business Plan presented in June 2016
OUTLOOK FOR ORDINARY OPERATIONS (NET OF NON RECURRING ITEMS) Figures in € mln
FY15FY15 net of non
recurring itemsFY16
FY16 net of non
recurring items
and BP impacts
Net interest income 1,631.1 1,631.1 1,497.9 1,497.9
Net commission income 1,300.1 1,300.1 1,335.0 1,335.0
Dividends and similar income 10.3 10.3 9.7 9.7
Profits of equity-accounted investees 35.3 35.3 24.1 24.1
Net result from finance 290.6 290.6 153.7 153.7
Other income items 103.4 103.4 99.1 99.1
Operating income 3,370.9 3,370.9 3,119.5 3,119.5
Staff costs (1,295.1) (1,295.1) (1,275.3) (1,275.3)
Other administrative expenses (727.1) (661.7) (734.7) (660.0)
of which ordinary contribution to RF and DGS (33.4) (33.4) (57.2) (57.2)
of which extraordinary contribution to RF (65.3) (74.7)
Other administrative expenses excluding all the contributions to RF and DGS (628.4) (628.4) (602.8) (602.8)
Net impairment losses on property, equipment and investment property and
intangible assets(153.0) (153.0) (143.5) (143.5)
Operating expenses (2,175.2) (2,109.9) (2,153.5) (2,078.8)
Net operating income 1,195.7 1,261.0 966.0 1,040.7
Net impairment losses on loans (802.6) (802.6) (714.6) (714.6)
Net impairment losses on other financial assets and liabilities (16.9) (16.9) (130.1) (60.9)
of which impairment of Atlante fund contribution (73.0)
Net provisions for risks and charges (3.0) (3.0) (42.9) (42.9)
Profits (losses) from disposal of investments and equity investments 0.5 0.9 23.0 1.0
of which sale of BPCI building - - 20.7
Pre-tax profit from continuing operations 373.7 439.4 101.5 223.3
Taxes on income for the period from continuing operations (161.1) (156.7) (82.5) (112.9)
Profits/losses for the period attributable to non-controlling interests (29.8) (30.9) 1.3 1.2
Profit for the period before Business Plan impacts 182.8 251.8 20.2 111.6
Net impairment losses on loans with shortfall absorption (net of tax) (586.0)
Charges for exit incentives (net of tax) (62.7) (62.7) (207.8)
Brands impairment (net of tax) (37.9)
Real estate impairment (net of tax) (3.3) (3.1)
Charges for Single Bank project (net of tax) (15.5)
Profit (loss) for the period 116.8 189.1 (830.2) 111.6
The net normalised result for 2017 is expected to grow substantially, facilitated, amongst other things, by the conclusion of the “Single Bank” project ahead of schedule
The overall trend for operating income is one of growth compared with 2016 as a result of the combined effect of the following main components: growth in net interest income notwithstanding a smaller
contribution from the proprietary portfolio, also due to the forecast further reduction in its dimension. An improvement in net interest income from customers is expected, benefiting from a recovery in volumes of lending, the further re-composition of direct funding towards less costly items and the positive impact of the expected achievement of volumes of lending targets for TLTRO2;
continued growth in fee and commission income from indirect funding with a greater contribution from the “running” component.
The positive conclusion of the recent trade union agreement and the encouraging result for applications to the “Solidarity Fund” (over 1,250 applications received) make it possible to improve the target for the containment of recurring operating expenses.
The particularly low risk attaching to the performing
portfolio, the action to increase coverage undertaken in the first half of 2016 and the continuation of the reduction in inflows of new non-performing loans and in the stock of NPEs as a consequence, should confirm the substantial reduction in loan losses forecast in the 2017 Business Plan.
As concerns the operation to acquire the 3 Target Bridge
Institutions, the pre-closing conditions are taking place with the expected modalities.
Page 19
Other main Group Companies
Page 20 Data as at 31.12.2016
Asset Management – Joint Venture with Prudential US
● UBI Pramerica develops, manages, markets and distributes a wide range of financial
products and services dedicated to private customers and institutions. It has been
awarded various international prizes.
● 48.2 bln EUR in Assets Under Management
● UBI Leasing offers its clients financing for asset acquisition such as: instrumental
leasing, real estate leasing, car leasing, aero naval leasing as well as specific
insurance and accessory services.
● 6.3 bln EUR in net Loans to Customers
● UBI Factor offers highly specialized factoring services to companies and public
administrations. The company is based in Milan with a capillary structure across the
national territory and is present also in Poland with its Krakow subsidiary. Since 1984
UBI Factor is part of the Factors Chain International network which allows it to retain a
presence in more than 75 countries and with more than 270 foreign partners.
● 9 bln EUR Turnover; 2.5 bln EUR net Loans to Customers
Recent merger between IW Bank (market leader in online trading in Italy with a strategy
based on three fundamental objectives: continuous product/service innovation, constant
development of technological platforms, professional support for the customer) and UBI
Private Investment, the network of financial agents of the UBI Group