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An introduction

to the UBI Banca Group

March 2015

(2)

This document has been prepared by Unione di Banche Italiane Scpa (“UBI”) for informational purposes only.

It is not permitted to publish, transmit or otherwise reproduce this document, in whole or in part, in any format, to any third party without the express written consent of UBI and it is not permitted to alter, manipulate, obscure or take out of context any information set out in the document. The information, opinions, estimates and forecasts contained herein have not been independently verified and are subject to change without notice.

They have been obtained from, or are based upon, sources we believe to be reliable but UBI makes no representation (either expressed or implied) or warranty on their completeness, timeliness or accuracy.

Nothing contained in this document or expressed during the presentation constitutes financial, legal, tax or other advice, nor should any investment or any other decision be solely based on this document.

This document does not constitute a

solicitation, offer, invitation or recommendation to purchase, subscribe or sell for any investment instruments, to effect any transaction, or to conclude any legal act of any kind whatsoever.

This document may contain statements that are forward-looking: such statements are based upon the current beliefs and expectations of UBI and are subject to significant risks and uncertainties. These risks and uncertainties, many of which are outside the control of UBI, could cause the results of UBI to differ materially from those set forth in such forward looking statements.

Under no circumstances will UBI or its affiliates, representatives, directors, officers and employees have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection with the document or the above mentioned presentation.

For further information about the UBI

Group, please refer to publicly available information, including Annual, Quarterly and Interim Reports.

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 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 31st December 2014 unless otherwise stated.

Disclaimer

(3)

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

(4)

Background

Unione di Banche Italiane Scpa (“UBI Banca”) was formed following the merger of the BPU Banca and Banca

Lombarda e Piemontese Groups (1

st

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 become the significant reality that exists today and employs approximately 18,000 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”

(5)

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.

UBI Banca is the only bank of the Group which is listed on the Milan Stock Exchange and included in the

FTSE/MIB index.

No one may hold shares amounting to more than 1% of the share capital (with the exception of collective

investment companies)

As at December 2014, voting shareholders number nearly 79,237*

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)

The said principles are equally applied

to listed and non-listed popular banks

Page 4

* *As at 19th May 2014 (ex dividend date), total shareholders (voting and non voting) number 152,000

Market Capitalisation as at 5

th

March 2015

(EUR bln)

Source: “Il Sole 24ore” – Italian Financial Newspaper – Dated 6th March 2015

48.9

35.3

3.5

3.7

2.8

4.9

# 3

6.3

(6)

UBI Banca and its Peers

Page 5 Source: Press releases.

87 844 646 61 183 123 48 Total assets as at 31st December 2014 ( bln)

7,616 5,867 1,676 1,274 706 2,226 1,878

No. of branches as at 31st December 2014

Customer loans as at 31st December 2014 ( bln)

471 339 80 44 32 120 86 561 360 46 126 93 37 Total direct funding as at 31st December 2014 ( bln)

# 5

# 4

# 5

# 4

(7)

Page 6

UBI

Banca’s

profile in a snapshot: predominant retail business, solid capital

base and low risk profile

Figures as at 31st December 2014 unless otherwise stated

* Data referred to banking perimeter only.

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

70.3%

Funding mainly from own customer base (over 80%)

; limited recourse to institutional markets

Financial assets/total assets: 19%. Italian Govies represent approx.18% of total assets

1

st

Italian cooperative banking Group by market capitalization

EUR

85.6 bn customer lending

and EUR

93.2 bn direct funding

(loan/deposit ratio: 91.9%)

As at 31 December 2014

, 81.5% of loans to customers were granted in Northern Italy

, 10.2% in

Central Italy and 8.3% in Southern Italy,

while 72.5% of customer deposits came from Northern Italy

,

12.6% from Central Italy and 14.9% from Southern Italy

Capital ratios

as at 31 December 2014:

CET 1 ratio (phased in): 12.33%; CET 1 ratio (fully loaded)

under Basel 3 rules: 11.5%

Leverage ratio under Basel 3

(tier one capital / (on- and off-balance-sheet assets))

is

at 5.78% phased

in, 5.42% 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 LTRO/TLTRO)

Good asset quality

compared to the Italian banking system

(8)

The Group Structure

Page 7

8 DOMESTIC NETWORK BANKS

MAIN PRODUCT COMPANIES

288 branches 196 branches 66 branches 21 branches 713 financial advisors 100.00% 74.76% (2) 100.00% 82.96% (3)

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 99.53% 99.99%

Central

Italy

351 branches 100.00% 208+3* branches 83.76% (1)

Information updated as at 19 January 2015 *indicates branches outside Italy

**Merger announced to be completed in 1H2015

**

ASSET MANAGEMENT

UBI Pramerica

(partnership with Prudential US)

FACTORING

UBI Factor

LEASING

UBI Leasing

LIFE BANCASSURANCE

Lombarda Vita (partnership with Cattolica)

Aviva Vita Spa

Aviva Assicurazioni Vita Spa

(9)

Page 8

Presence in Italy

1,560

branches in Italy + 6 branches abroad

As at 19 January 2015

* Market shares calculated as at 30th June 2014 .

1 169 38 762 1 27 9 43 7 1 84 94 78 6 19 17 80 106 18

Approx. 3.7 million clients, mainly retail

1,560 branches, of which 762 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 5.4%

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 22.3 28.7 40.2

Brescia 22.5 27.1 35.0

Varese 23.7 27.8 21.0

(10)

Agenda

UBI Banca International Network

International Network

Presence in the world

(11)

International Network

Page 10

MENTON, NICE AND ANTIBES

(Banca Regionale Europea) (UBI Factor) KRAKOW

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 (Opening 2015)

DUBAI (Opening 2015)

(12)

Presence in the world

Luxembourg

• UBI Banca International • UBI Trustee SA

Page 11

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

Shanghai

Zhong Ou Asset Management Company Co. Ltd*

* Joint-venture in which UBI Banca holds 35% of the total share. (Other partners: Guodu Securities Co. Ltd. holds 30% of the total share, Beijing Baijun Investment Co., Ltd holds 30% of the total share and WinnerKey Investment Co. Ltd holds 5% of the total share). At 31st December 2013, the ex Lombarda China Fund Management Co., actives in the management of retail

funds and of IPO, handled an AUM of 14.5 billions of Rmb (about 1.7 billions of euro).

2015 opening of Rep Offices in New York and Dubai

(13)

Agenda

Contacts

UBI Banca Correspondent Banking

Representative Offices Contacts

(14)

UBI Banca

Page 13

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

(15)

Representative Offices Contacts

HONG KONG

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

MUMBAI

Ms Rajeshree Balsari

mumbai@ubibanca.com 92 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 61675582

MOSCOW

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

SAO PAULO

Mr Isidoro Guerrerio

saopaulo@ubibanca.com Al. 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 Consultant)

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 14

(16)

Agenda

Annex

Foreign Banks

Product Companies

Group Results

Group BIC codes

(17)

Foreign Banks

Page 16

Qualified and specific services offered to Corporate customers: establishment of international companies

trustee operations and corporate financing

payment services

corporate and syndicated loans

issuance of bonds and international guarantees

cash pooling

factoring

Services offered to Private customers:

wealth management and investment advisory;

heritage and personal wealth planning with tailor made financial engineering solutions;

investment Funds and Sicav;

financial and asset planning with tailored engineering solutions;

term deposits in all major currencies,;

trading and safekeeping of securities on all the major stock and bond markets;

spot and forward foreign exchange transactions;

services for the establishment of Trust Companies through UBI Trustee SA based in Luxembourg.

Leasing

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.

6.9 bln EUR in net Loans to Customers

(18)

Product Companies

Factoring

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.

7.7 bln EUR Turnover; 2 bln EUR net Loans to Customers

Page 17 Data as at 31.12.2014, 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.

35.4 bln EUR in Assets Under Management Online Trading

IW Bank is a 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. Assets under management of EUR 569.7 mln.

(19)

Page 18

FY14 Results: improving core profitability and cost control confirmed

Growth in core revenues and operating income in 2014 compared with 2013

Consolidated profit net of non-recurring items of 146.5 mln/€, up 46.2% compared with 100.2 mln/€ in 2013

Consolidated results (stated)

Operating income of 3,409.6 mln/€ (-0.8% YoY)

Net interest income of 1,818.4 mln/€ (+3.9% YoY)

Net fee and commission income of 1,226.6 mln/€ (+3.3% YoY) Finance result of 199.7 mln/€ (324.6 mln/€ in 2013)

Constantly lower operating expenses down to 2,108.2 mln/€ (-1.6%) - 6th consecutive year of reduced costs

Net operating income of 1,301.4 mln/€ (+0.5%)

Annualised loan loss rate of 108 bps or 929 mln/€ inclusive of the results of the AQR (107 bps or 943 mln/€ in 2013)

New inflows from performing loans to deteriorated status down significantly by 36.2% vs 2013

Profit on continuing operations before tax of €449.1 mln/€ (+57.4%)

A consolidated loss for the Group of 725.8 mln/€ compared with a profit of 250.8 mln/€ in 2013, following approximately 883 mln/€ of net impairment losses on goodwill and intangible assets (no impact on real profitability, +32bps of CET1 following booking of deferred taxes in income statement on fiscally recognised goodwill, lower PPA (-6 mln/€) starting from 2015)

Approximately 80% of the redundancies planned under the Framework Agreement signed with trade unions on 26th Nov 14 (a total of 500 workers) were complete as at 31st Jan 15

Loans at 85.6 bln/€, up 0.8% compared with Sept ‘14 – Positive trend confirmed in Jan ‘15

Direct funding at 93.2 bln/€, up 6.1% compared with Sept ‘14

0,05

0,06

0,08

FY12 FY13 FY14

PROPOSED DIVIDEND PER SHARE PROPOSED DIVIDEND PER SHARE

(€)

(20)

UBI Banca Main Consolidated figures: Balance Sheet

Page 20

Main balance sheet

figures

Figures in billions of euro

Dec ‘13

Dec ‘14

Loans to customers

88.4

85.6

Direct funding

92.6

93.2

of which: Direct Funding from Ordinary Customers (current accounts + retail bonds)

74.7 74.0

of which: Direct Funding from

Institutional Customers 17.9 19.3

Net Interbank exposure

(not included in Direct Funding – mainly LTRO)

10.9

10.0

Total assets

124.2

121.8

Loans to customers / total

assets

71.2%

70.3%

Indirect funding (AuM + AuC)

71.7

75.9

of which: AUM 39.6 43.3 of which: AUC 32.1 32.5 Page 19 CET 1 as at 1stJan 2014 AQR adjusted CET 1 CET 1 after adverse scenario Capital excess after AQR

and adverse stress test

11.77% 11.35% 8.37% 12.25% 11.82% 8.20% + 1.7 bln/ SSM* UBI 10.17% 9.47% 6.14% Italy

COMPREHENSIVE ASSESSMENT RESULTS 26 Oct 14

COMPREHENSIVE ASSESSMENT RESULTS 26

TH

Oct 14

CAPITAL RATIOS AS AT 31 Dec 14

CAPITAL RATIOS AS AT 31

st

Dec 14

The

Group’s

solid capital strength is confirmed:

Common Equity Tier 1 ratio

“phased

in”

as at 31

st

December 2014:

12.33%

following update of risk

parameters (13% as at 30/09/2014)

Pro forma Common Equity Tier 1 ratio

“fully

loaded”

estimate of

11.5%

(12% as at 30/09/2014)

Basel 3 leverage ratio:

“phased

in”

at

5.78%

,

(21)

UBI Banca Main Consolidated figures: P&L & Outlook

Page 20 Page 20

MAIN INCOME STATEMENT ITEMS

Figures in € mln FY13 FY14 % change 4Q13 3Q14 4Q14

% change 4Q14 vs 4Q13

% change 4Q14 vs 3Q14

Net interest income 1,751 1,818 3.9% 459 468 442 (3.8%) (5.5%)

Net commission income 1,187 1,227 3.3% 299 299 318 6.5% 6.7%

Net result from finance 325 200 (38.5%) 156 14 49 (68.5%) 254.7%

Other income items 175 165 (5.6%) 37 42 42 15.9% 2.1%

Operating income 3,437 3,410 (0.8%) 951 822 852 (10.4%) 3.7%

Staff costs (1,302) (1,302) 0.0% (327) (329) (325) (0.7%) (1.1%)

Other administrative expenses (660) (635) (3.8%) (166) (147) (177) 6.5% 20.2%

Net impairment losses on property, equipment and investment property

and intangible assets (180) (171) (4.9%) (45) (42) (44) (3.2%) 2.9%

Operating expenses (2,142) (2,108) (1.6%) (538) (518) (546) 1.3% 5.3%

Net operating income 1,295 1,301 0.5% 413 303 306 (25.7%) 1.0%

Net impairment losses on loans (943) (929) (1.5%) (366) (197) (302) (17.4%) 53.5%

Net impairment losses on other financial assets and liabilities (48) (9) (81.8%) (25) (0) (6) (74.7%) n.s.

Net provisions for risks and charges (12) (9) (26.7%) 2 (1) (5) n.s. n.s.

Profits (losses) from disposal of equity investments (7) 94 n.s. (8) 0 94 n.s. n.s.

Pre-tax profit from continuing operations 285 449 57.4% 15 105 87 460.8% (17.3%)

Taxes on income for the period from continuing operations 55 (187) n.s. 205 (52) 1 n.s. n.s.

Profits for the period attributable to non-controlling interests (26) (29) 11.7% (8) (9) (4) (47.5%) (56.7%)

Profit/loss for the period attributable to the shareholders of the Parent before charges for exit incentives and impairments on tangible and intangible assets

315 233 (25.9%) 213 44 83 (72.7%) (17.3%)

Impairment on tangible and intangible assets

(net of tax and non-controlling interests) (38) (883) n.s. (38) (883) n.s. n.s.

Charges for exit incentives

(net of tax and non-controlling interests) (26) (76) n.s. (26) (76) 193.7% n.s.

Profit for the period 251 -726 n.s. 149 44 (876) n.s. n.s.

Profit for the period NET OF NON-RECURRING ITEMS 100 147 46.2% 26 45 -29 n.s. n.s.

 In 2015 net interest income will be affected by a lower contribution from the securities portfolio, mainly as a result of positions that matured in the held-to-maturity portfolio in the last months of 2014. A recovery in volumes of business with customers should make it possible to increase net interest income from business with customers, even in the presence of strong competition on pricing, and help offset the lower contribution forecast from the securities portfolio

 Net fee and commission income should benefit from positive trends expected for assets under management and insurance and possible growth in fees and commissions associated with lending

 A further decrease in sovereign debt risk could allow positive results to be achieved for trading and hedging activity again in 2015

 The recent trade union agreement will help compensate for the automatic increases in staff costs, the overall performance of which will in any case depend on the final outcome of the renewal of the national trade union contract

 The downwards trend for other administrative expenses is forecast to continue

 The slowdown in the pace of new defaulted loans recorded in 2014 is expected to continue in 2015 and could favour an improvement in loan losses compared with 2014

OUTLOOK

OUTLOOK

(22)

Group BIC codes

Page 21 BEPOIT21 BCABIT21 BREUITM1 POCIITM1 BPAMIT31 CARMIT31 BVCAIT21 BLPIIT21 UBIBESMM BEPODEMM BLOPIT22

CABILULL Madrid Branch

Munich Branch

BIC ACTIVE

References

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