An introduction
to the UBI Banca Group
August 2015
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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 either
participated in a stock option plan and were therefore assigned stock of the company or possess stock of the bank otherwise acquired. The disclosure relating to shareholdings of top management is available in the half year and the annual reports.
Methodology
All data are as at 30th June 2015 unless
otherwise stated.
Disclaimer
Agenda
The UBI Banca Group
Background
UBI Banca and its Peers
UBI Banca’s profile in a snapshot
The Group Structure
Presence in Italy
The UBI Banca International Network
Contacts
Annexes
Background
Unione di Banche Italiane Scpa
(“UBI Banca”) was formed following the merger of the BPU Banca and Banca
Lombarda e Piemontese Groups (1
stApril 2007)
The history of UBI Banca is marked by a succession of mergers which have led banks with strong roots in local
communities to become the significant reality that exists today and employs approximately 17,800 people.
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”
Background
UBI Banca is a cooperative bank (“
società cooperativa
”). Its capital is represented by ordinary shares . Shareholders are divided
between
unregistered
shareholders (who have a right to share in dividends, options, etc. but have no voting rights) and
registered
shareholders (who have both the right (i) to share in dividends, options, etc., and (ii) to vote at general meetings). To become a
registered shareholder, one must own and hold at least 250 shares and apply to the management board. Each registered shareholder
has only one vote. No one may hold shares amounting to more than 1% of the share capital (with the exception of collective
investment companies). As at June 2015, voting shareholders number nearly 81,750*.
A recent Law (March 2015) has established that cooperative banks with total assets above 8€ bln must transform into Joint Stock
Companies. Bank of Italy has recently issued instructions (11 June) and the Popolari involved have 18 months to transform into Joint
Stock Companies. UBI Banca, which totals €120 bln of total assets, is one of the Banks involved in this process.
UBI Banca is listed on the Milan Stock Exchange and included in the FTSE/MIB index.
UBI Banca’s governance model is based on a “dualistic” system. Under this dualistic governance system, the registered shareholders
appoints a Supervisory Board (strategy and supervision); the Supervisory Board, in turn, appoints a Management Board (day-by-day
management of the bank)
Page 4
* Total shareholders (voting and non voting) number around 155,000
Market Capitalisation* as at 27
thAugust 2015
(EUR bln)
Source: “Il Sole 24ore” – Italian Financial Newspaper – Dated 28th August 2015
55.2
35.3
3.8
4.2
5.7
# 3
6.5
5.4
UBI Banca and its Peers
Page 5 Source: Press releases.
84 875 668 61 178 125 49
Total assets as at 30th June2015 (€ bln)
7,121 5,608 1,530 1,274 654 2,223 1,813
No. of branches as at 30th June 2015
Customer loans as at 30th June 2015 (€ bln)
474 344 80 43 33 117 85 581 365 46 126 94 37
Total direct funding as at 30th June 2015 (€ bln)
# 5
# 4
# 5
# 4
The Group Structure
Page 6
NETWORK BANKS
MAIN PRODUCT COMPANIES
288 branches 196 branches 66 branches 21 branches, ~ 772 financial advisors 100.00% 74.77% (2) 100.00% 84.13% (3)
1) moreover, 16.24% of capital held by Fondazione Banca del Monte di Lombardia
2) further 24.90% of Banca Regionale Europea capital held by Fondazione Cassa di Risparmio di Cuneo and the rest by minority shareholders 3) moreover, 5.50% of capital held by Cattolica Assicurazioni and the rest by minority shareholders
UBI BANCA provides management, co-ordination, control and supply of centralized services to the network
banks (single IT System, centralised risk management, centralised finance and treasury, commercial
coordination, credit coordination, logistics, purchasing, on line banking, etc...)
Northern
Italy
Southern
Italy
208 branches 216 branches 99.54% 99.99%Central
Italy
350 branches 100.00% 208+3* branches 83.76% (1)Information updated as at 31 March 2015, unless otherwise stated * indicates branches outside Italy
**Merger between IW Bank and UBI Private Investment completed on 25 May 2015
7
**
ASSET MANAGEMENT UBI Pramerica
(partnership with Prudential US)
FACTORING UBI Factor
LEASING UBI Leasing
LIFE BANCASSURANCE Lombarda Vita (partnership with Cattolica) Aviva Vita Spa
Page 7
Presence in Italy
1,557
branches in Italy + 6 branches abroad
As at 30th June 2015
* Market shares calculated as at 31st March 2015 in terms of branches and as at
31st December 2014 in terms of volumes.
1 169 38 759 1 27 9 43 7 1 84 94 78 6 19 17 80 106 18
Approx.
3.6 million clients
, mainly retail
1,557 branches, of which 759 in Lombardy
(which
generates over 20% of Italian GDP)
Market share in terms of branches above 20% in
some of the richest Provinces
such as Bergamo,
Brescia and Varese
National market share of 5.1%
in terms of branches
Introduction to the UBI Banca Group:
Predominant Retail Business and Strong Northern Italian Franchise
Market Shares*
% Branches
Current accounts
& deposits Loans
Bergamo 22.4 30.5 40.7
Brescia 21.9 26.7 34.8
Varese 24.3 28.0 23.2
Agenda
UBI Banca International Network
International Network
Presence in the world
International Network
Page 9
MENTON, NICE AND ANTIBES (Banca Regionale Europea)
KRAKOW (UBI Factor) SHANGHAI (Zhong Ou Asset Management Company) UBI TRUSTEE SA (Luxembourg) LUXEMBOURG MADRID MUNICH MOSCOW MUMBAI HONG KONG SAO PAULO SHANGHAI VIENNA (Business Consultant) SUBSIDIARIES FOREIGN BRANCHES COMMERCIAL BANKS FOREIGN BRANCHES SUBSIDIARIES BRANCHES REPRESENTATIVE OFFICES FOREIGN BANKS
Head office in Luxembourg
NEW YORK
Presence in the world
Luxembourg • UBI Banca International • UBI Trustee SA • UBI Management Co SA
Page 10
Munich UBI Banca International Branch
Krakow
UBI Factor Branch
Vienna Business Consultant Moscow RepresentativeOffice Mumbai Representative Office Hong Kong Representative Office São Paulo Representative Office Madrid UBI Banca International Branch Antibes, Menton, Nice Banca Regionale Europea Branches Shanghai Representative Office
ShanghaiZhong Ou Asset Management Company Co. Ltd*
* Joint-venture in which UBI Banca holds 35% of the total share.
2015 upcoming opening of Representative Office New York
Dubai RepresentativeOfficeAgenda
Contacts
UBI Banca Correspondent Banking
Representative Offices Contacts
UBI Banca
Page 12
Correspondent Banking -
correspondent.banking@ubibanca.it
Sergio Passoni
Head of Global Transaction and Operations
Isabella Moavero - Head of Correspondent Banking and Representative Offices
• Indian Subcontinent, China & Far East, Oceania
Alistair Newell
Relationship Manager
alistair.robert.newell@ubibanca.it
• North America, Central America, South America,
Caribbean, Israel
Ernst Rolf Hartmann
Relationship Manager
ernst.rolf.hartmann@ubibanca.it
• Turkey, Middle East, Africa
Lorenzo Tassini
Relationship Manager
lorenzo.tassini@ubibanca.it
• Global Players – Responsible for relationships with
multi-regional banking groups & Special Projects
Marco Camozzi
Relationship Manager
marco.camozzi@ubibanca.it
• Europe & CIS Countries
Riccardo Rossi van Lamsweerde
Relationship Manager
Representative Offices Contacts
MUMBAI
Mr Andrea Croci
hongkong@ubihk.com
Suite 2911, Tower Two,
Times Square 1, Matheson St. - Causeway Bay Hong Kong - S.A.R. Tel. +852 2878 7393 Fax +852 2878 7932
HONG KONG
Ms Rajeshree Balsari
mumbai@ubibanca.com92 Mittal Chambers, 9th Floor,
Nariman Point, 400 021 Mumbai - India Tel. +91 22 22023601 Fax +91 22 22023603
SHANGHAI
Ms Lu Bo
office@ubibanca.sh.cn The Center Suite 3304 989, Changle Road 200031 Shanghai – China Tel +86 21 61675333 Fax +86 21 61675582MOSCOW
Mr Ferdinando Pelazzo
moscow@ubibanca.com 10, Nikolskaya str., 4th floor,Business Centre “Nikolskaya Plaza” 109012 Moscow - Russia Tel. +7 495 725 4466 Fax +7 495 725 4465
SAO PAULO
Mr Isidoro Guerrerio
saopaulo@ubibanca.comAl. Ministro Rocha Azevedo, 456 Ed. Jaù - 4° And.Cj.402 CEP 01410-000 São Paulo - Brazil
Tel. +55 11 3063 0454 Fax +55 11 3063 3785
VIENNA (Business Consult.)
Ms Annick Stockert
annick.stockert@esterni.ubibanca .it Seilerstätte 16/11 1010 Vienna Austria Tel. +43 1 514 37 26 Fax +43 1 514 37 60 Page 13DUBAI
(since Aug 2015)Mr Luigi Landoni
Office 113, Level 1, Tower 1 Al Fattam Currency House, Dubai Intl Financial Centre Dubai, UAE
P.O. BOX 506989
Tel +971 4 3277289 Fax +971 4 3277290
Agenda
Annex
Foreign Banks
Product Companies
Group Results
Group BIC codes
Product Companies
Page 15 Data as at 30.06.2015 unless otherwise stated
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.
27.6 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.
6.8 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.
Other foreign Banks
Page 16
Qualified and specific services offered to Corporate and Private 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
Page 17
UBI Banca’s profile in a snapshot: predominant retail business, solid capital
base and low risk profile
Figures as at 30th June 2015 unless otherwise stated
* Data referred to banking perimeter only. ** UCG, ISP, BP, MPS, BPER and BPM
Strong
competitive
positioning
Solid Capital
and Balance
Sheet Position
Good Asset
Quality
Low Risk Profile
Focus on traditional banking activities: Customer loans/total assets at 71.38%
Funding mainly from own customer base (over 76%)
; limited recourse to institutional markets
Financial assets/total assets: 18.3%. Italian Govies represent approx. 17% of total assets
1
stItalian cooperative banking Group by market capitalization
EUR 85.3 bn customer lending and EUR 94.3 bn direct funding (loan/deposit ratio: 90.5%)
As at 30 June 2015,
81% of loans to customers were granted in Northern Italy
, 10.7% in Central Italy
and 8.3% in Southern Italy,
while 73.2% of customer deposits came from Northern Italy
, 12.1% from
Central Italy and 14.7% from Southern Italy
Capital ratios
as at 30 June 2015:
CET 1 ratio phased in: 12.94%
vs. 9.5% SREP requirement
CET 1 ratio fully loaded under Basel 3 rules: 12.33%
Leverage ratio under Basel 3
(tier one capital / (on- and off-balance-sheet assets))
is at 6.14% phased in,
5.88% fully loaded
Sound Liquidity position:
the Group already complies with the Net stable Funding Ratio and Liquidity
Coverage Ratio as per Basel 3 requirements
(also net of TLTRO)
Good asset quality
compared to the Italian banking system
MAIN INCOME STATEMENT ITEMS
Figures in € mln 1H14 1H15
% change 1H15 vs 1H14
Net interest income 909 847 (6.8%)
Net commission income 610 669 9.7%
Net result from finance 137 111 (18.7%)
Profits of equity-accounted investees 21 20 (5.3%)
Other income items 60 62 2.7%
Operating income 1,736 1,709 (1.6%)
Staff costs (648) (655) 1.1%
Other administrative expenses (311) (313) 0.6%
Net impairment losses on property, equipment and investment
property and intangible assets (85) (78) (8.7%)
Operating expenses (1,044) (1,046) 0.1%
Net operating income 692 663 (4.1%)
Net impairment losses on loans (429) (389) (9.3%)
Net impairment losses on other financial assets and liabilities (2) (3) 67.3%
Net provisions for risks and charges (3) (29) n.s.
Profits (losses) from disposal of equity investments (0) 0 n.s.
Pre-tax profit from continuing operations 257 242 (6.0%)
Taxes on income for the period from continuing operations (135) (99) (26.8%)
Profits for the period attributable to non-controlling interests (16) (17) 8.7%
Charges for exit incentives
(net of tax and non-controlling interests) (1) n.s.
Profit for the period 106 124 17.2%
Profit for the period NET OF NON-RECURRING ITEMS 131 136 3.9%
Page 18
The UBI Banca Group: consolidated results as at 30th June 2015
OUTLOOK
The actions undertaken in the first half and the expected progressive improvement in the macroeconomic environment should allow a further increase in new grants of loans in the second half of the year in order to counter the strong competitive pressure on pricing.
Net fee and commission income should benefit year-on-year from positive trends expected for assets under management and insurance and from possible growth in fees and commissions associated with the trend for lending.
The continuation of the favourable evolution of the general macroeconomic environment and, hopefully, the absence of further tensions in the more critical countries of the euro area could allow a result to be achieved for trading and hedging activity in line with that of the first half.
Actions planned for 2015 allow to confirm our objective of containing operating expenses in line with those for 2014, notwithstanding the additional costs in relation to the contribution to the European Resolution Fund and the Deposit Guarantee Scheme, estimated at over €30 million for the entire year and which will be recognised in the item “other administrative expenses” once final quantification, expected before year-end, is received.
The improvements in the macroeconomic environment and the exit from recession, recently confirmed by the principal economic research institutes, should allow loan losses to be contained at a level lower than in 2014
Profit net of non recurring items to 136 million, the highest half year results since 2H2008
Stated Profit for the period to 124.4 million (+17.2% vs 106.2 in 1H2014)
Profits from equity-accounted investees, include 8.5 mln/€ from Zhong Ou in 1H15 (vs. 0.7 mln/€ in 1H14) thanks to strong growth in AuM reaching close to €18 billion at end June15
