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An introduction
to the UBI Banca Group
August 2015
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 30th June 2015 unless
otherwise stated.
Disclaimer
Page 1
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
Page 2
Background Unione di Banche Italiane Scpa (“UBI Banca”) was formed following the merger 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 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” Page 3
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 27th August 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
119.5
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 Aviva Assicurazioni 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
Cuneo 20.3 17.9 15.5
Agenda
UBI Banca International Network
International Network
Presence in the world
Page 8
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
(Upcoming opening 2015) DUBAI
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
Representative Office
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.
2015 upcoming opening of Representative Office
New York
Dubai
Representative Office
Agenda
Contacts
UBI Banca Correspondent Banking
Representative Offices Contacts
Page 11
UBI Banca
Page 12
Correspondent Banking - [email protected]
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 [email protected]
• North America, Central America, South America, Caribbean, Israel
Ernst Rolf Hartmann Relationship Manager
• Turkey, Middle East, Africa Lorenzo Tassini
Relationship Manager [email protected]
• Global Players – Responsible for relationships with multi-regional banking groups & Special Projects
Marco Camozzi Relationship Manager
• Europe & CIS Countries Riccardo Rossi van Lamsweerde
Relationship Manager [email protected]
Representative Offices Contacts
MUMBAI
Mr Andrea Croci
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
92 Mittal Chambers, 9th Floor,
Nariman Point,
400 021 Mumbai - India
Tel. +91 22 22023601
Fax +91 22 22023603
SHANGHAI
Ms Lu Bo
The Center
Suite 3304
989, Changle Road
200031 Shanghai – China
Tel +86 21 61675333
Fax +86 21 61675582
MOSCOW
Mr Ferdinando Pelazzo
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
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 Consult.)
Ms Annick Stockert
.it
Seilerstätte 16/11
1010 Vienna
Austria
Tel. +43 1 514 37 26
Fax +43 1 514 37 60
Page 13
DUBAI (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
Page 14
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.
4.3 bln EUR Turnover; 2.1 bln EUR net Loans to Customers
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
1st Italian 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
Annualised cost of credit of 91 bps of total loans vs. 98 bps of Italian Peers**
MAIN INCOME STATEMENT ITEMS
Figures in € mln1H14 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
Group BIC codes
Page 19
BEPOIT21
BCABIT21
BREUITM1
POCIITM1
BPAMIT31
CARMIT31
BVCAIT21
BLPIIT21
UBIBESMM
BEPODEMM
BLOPIT22
CABILULL Madrid Branch
Munich Branch
BIC ACTIVE
BIC NON ACTIVE