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UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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Page 1: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

UNICREDITO ITALIANO GROUP

Andrea Moneta – Deputy CEO & CFO

UBS Warburg 2003 Global Financial Services Conference

New York - April, 28th 2003

Page 2: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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AGENDA

2002 Group Highlights

“The 2003 opportunity”: managing organic growth through 3 segment banks

2003 Outlook

Page 3: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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Confirmed high profitability (ROE at 17.2%) even in a tougher than expected environment

Diversification of revenue sources enabled to keep revenues stable vs. 2001 (-0.2%)

S3 one-off costs partially counterbalanced by strict cost-control policies. Efficiency still at excellence levels (Cost/Income at 54.3%)

Strengthened Group financial position: improved coverage ratios and increased Core Tier I ratio (from 6.06% in 2001 to 7.10% in 2002)

2002 KEY HIGHLIGHTS

Page 4: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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53.7% excl. S3 one-

off costs

DESPITE WORSE THAN EXPECTED ECONOMIC SCENARIO AND INTERNAL RESTRUCTURING UCI CONFIRMS IN 2002 ITS REVENUE GENERATION AND COST CONTROL CAPABILITY …

TOTAL REVENUES (Euro mln)

2001 2002

10,122 10,099

-0.2%

3Q02 4Q02

Quarterly evolution

2,408 2,472

2001 2002

5,353 5,483

+2.4%

3Q02 4Q02

Quarterly evolution

1,372 1,441

+5.0%

COST/INCOME RATIO %

OPERATING EXPENSES(Euro mln)

2002

54.3

2001

52.9

+2.7%

At unchanged FX (1)

+1.6%

+4.2%

+1.9%

+4.6%

(1) Calculated on the FX of all the currencies of New Europe countries where UCI is present with fully consolidated banks.

Page 5: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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OPERATING INCOME (Euro mln)

2001 2002

4,769 4,616

-3.2%

3Q02 4Q02

Quarterly evolution

1,036 1,031

-0.5%

2001 2002

1,767 1,801

+1.9%

3Q02 4Q02

Quarterly evolution

441 352

ROE (1) %

NET INCOME (Euro mln)

2002

17.2

2001 restated

18.4

… LEADING TO A SATISFYING NET INCOME GROWTH (+1.9% ON 2001) AND GOOD PROFITABILITY LEVELS (ROE AT 17.2% IN 2002)

(1) Calculated on end of period net equity excluding profit for the period.

-20.2%

At unchanged FX

-1.3%

+1.8%

-1.6%

-21.5%

Page 6: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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POSITIVE VALUE CREATION AND FURTHER STRENGTHENING OF CAPITAL BASE

9

904

6,346Italian banking

Wholesale banking

New Initiatives

CAPITAL ABSORPTION

1,023

-96

129

VALUE CREATION

8,979Group total(3) 654

NOPAT

1,594

-94

315

1,641

RARORAC %

16.1

n.m.

14.3

7.3

(1) Minimum regulatory capital, market risks, credit risks and operational risks (2) The Cost of Equity is related to the capital employed (Net equity for the Group and allocated capital for the business units)(3) Balance due to Corporate Center and Other companies, respectively -311 for NOPAT, 784 for Capital absorption and -448 for

Value Creation

MARGINAL RARORAC %

16.4

n.m.

38.0

11.4

(Euro mln)

NOPAT(a)

Risk taken(1)

(b)

Shareholder’s value added(c) =(a)-COE(2)

Value added per unit of risk taken

(c)/(b)

From 6.06% (Dec 01)to 7.10% (Dec 02)

CORE TIER 1 RATIO(considering all RWA)

From 10.96% (Dec 01)to 11.64% (Dec 02)

TOTAL CAPITAL RATIO(considering all RWA) From Euro 143.4 bn

(Dec 01) to Euro 138.1 bn (Dec 02), -3.7%

TOTAL RWA

936New Europe banking 46136 4.9 13.1

Page 7: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

7

AGENDA

2002 Group Highlights

“The 2003 opportunity”: managing organic growth through 3 segment banks

2003 Outlook

Page 8: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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OUR THREE SEGMENT BANKS REPRESENT THE PILLARS OF UCI’S NEW ORGANISATION

New Europe Banks

New Europe division

Private & AM division

Pioneer

Xelion

Corporate division

UBM

BMC(3)

Locat(4)

Clarima(1)

Adalya(2)

TradingLab

Retail division

(1) Consumer Finance (2) Retail mortgages (3) M/l term corporate financing (4) Leasing

Page 9: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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OUR RETAIL BANK, WITH THE MISSION OF BEING THE “QUALITY BRAND” IN THE MARKET OF FINANCIAL SERVICES FOR FAMILIES AND SMALL BUSINESSES, ACTING AS THE “LARGEST ITALIAN LOCAL BANK”

OUR CORPORATE BANK, WITH THE MISSION OF BECOMING THE FIRST BANK FOR ITALIAN MID-CORPORATES THANKS TO A SUPERIOR ABILITY IN THE OFFER OF CORPORATE FINANCIAL RISK-MANAGEMENT SOLUTIONS

OUR PRIVATE BANK, WITH THE MISSION OF PROTECTING AND INCREASING WEALTH OF PRIVATE CUSTOMERS

THEY STARTED THEIR OPERATIONS ON JANUARY 1st WITH CLEARLY DEFINED MISSIONS

Page 10: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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UNICREDIT BANCA IS THE SINGLE LARGEST BANK IN ITALY…

TOTAL LOANS Around 37 bn Euro

CURRENT ACCOUNTS Around 32 bn Euro

6.2 mln CUSTOMERS, of which

3,600 salespeople

2,500 financial consultants

1,300 account managers

4.8 mln MASS MARKET

0.9 mln AFFLUENT

0.5 mln SMALL BUSINESS

INDIRECT DEPOSITS Around 97 bn Euro

Page 11: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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... WITH AN IMPORTANT PRESENCE IN THE WEALTHIEST REGIONS, WHERE THE FORMER 7 BANKS WERE TRADITIONALLY ROOTED

Italian ProvincesFinancial wealth (€M)

17.000 to 317.000 (35)

11.000 to 17.000 (25)

2.000 to 11.000 (43)

RETAIL PRIVATE CUSTOMERS FINANCIAL WEALTH

UCI BANCA BRANCHES MKT SH.

CENTRAL ITALY

5.5%

NORTH-EAST

16.2%

NORTH-WEST8.5%

SOUTH

4.7%

NATIONWIDE 9.2%

% Of italian GDP

UCI Banca Branches

#Branches mkt share

Lombardia 20.4% 251 4.5%

Piemonte 8.7% 425 17.9%

Veneto 9.1% 605 19.9%

Friuli V. G. 2.3% 152 17.6%

Emilia Romagna 8.8% 422 14.3%

Total 5 Regions 49.3% 1,855 12.6%

Page 12: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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THE BANKS’ STRATEGIC GOALS AND GUIDELINES HAVE BEEN CLEARLY SET OUT

INCREASE in MARKET SHARES

Maintain COST/INCOME at EXCELLENCE LEVELS

Optimisation of Capital Allocation

Focus on SERVICE QUALITY and CUSTOMER SATISFACTION

Maintain excellence levels in the operating performance

Efficient allocation and motivation of Human Resources

STRATEGIC GOALS

STRATEGIC GUIDELINES

Page 13: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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THE FIRST THREE MONTHS OF 2003 SHOW GOOD COMMERCIAL RESULTS, ALSO THANKS TO THE POSITIVEEFFECTS OF THE MAIN STRATEGIC PROJECTS

Good sales in first 3 months of 2003 vs. 4Q, traditionally strong in terms of sales:

avg. monthly sales of bancassurance: 496 mln single premiums (+80% vs. 4Q02) and 56 mln recurring premiums (+274% vs. 4Q02)

2,059 avg. monthly IMPRENDO subscriptions by new Small Business clients, +16.2% vs. 4Q02

Customer retention project: monitoring marginal and sleeping customers behaviours to re-activate relationships

Increase either in household’s mortgages or in current accounts volumes

Good pricing ability, resulting in a resilient spread (789 bp in March)

Focus on the 2 riskier customer classes (representing around 5% of the total loans but 29% of the total expected loss), to reduce exposure and drive down cost of risk

Lower than expected extraordinary costs for incentivisation to leave

MAIN PROJECTS UNDERGOING

FIRST 3 MONTHS ACHIEVEMENTS

Brand management: strong marketing efforts in order to enhance brand recognition at local and national level

Page 14: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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UNICREDIT BANCA D’IMPRESA’s core active customers: represent around 40% of the total Italian market* on those, UBI has an exposure of 10.2% of their outstanding

loans portfolio**

UNICREDIT BANCA D’IMPRESA CAN ENJOY A HUGECRITICAL MASS

Around 3,500 employees

900 account managers210 branches articulated in 4 commercial regions

Around Euro 40 bn of total loans

50 teams of foreign services consultants

Around 92,000 total customers: around 55,000 represent the bank core customers (non

financial enterprises with a turnover of at least 1.5 mln Euro) out of these, 40,000 have outstanding loans

*UBI estimates**Bank of Italy Credit Bureau (Centrale Rischi)

Page 15: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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STARTING FROM THE CURRENT PENETRATION OF THEEXISTING CUSTOMERS UNICREDIT BANCA D’IMPRESA HAS A BIG GROWTH OPPORTUNITY AT “LOW COST” AND “LOW RISK” THROUGH A REGIONAL DIFFERENTIATED APPROACH

UNICREDIT BANCA D’IMPRESA WILL INCREASE MARKET SHARES THANKS TO A SELECTIVE GEOGRAPHICAL ANALYSIS AND THE OFFER OF QUALITY SERVICES,

WELL AWARE OF THE RISK-REWARD PARADIGM

(1) Calculated dividing the number of core active customers of UniCredit Banca d’Impresa for the total customers of the region

10.2% avg. mkt share on core non-financial

customers

HIGH MKT SHARE

(>11%)

MEDIUM MKT SHARE

(9-11%)

LOW MKT SHARE

(<9%)

LOW COVERAGE (1)

(<30%)

MEDIUM COVERAGE (1)

(30-55%)

HIGH COVERAGE (1)

(>55%)

TRENTINO AA FRIULI VG VENETO

EMILIA R

TOSCANA

PUGLIA

SARDEGNA

PIEMONTE

V. AOSTA

MARCHE

MOLISE

LOMBARDIA

UMBRIA (2)

CAMPANIA

BASILICATA

SICILIA

LIGURIA LAZIO

ABRUZZO

CALABRIA

UNICREDIT BANCA D’IMPRESA WILL INCREASE MARKET SHARES THANKS TO A SELECTIVE GEOGRAPHICAL ANALYSIS AND THE OFFER OF QUALITY SERVICES,

WELL AWARE OF THE RISK-REWARD PARADIGM

(2) Banca dell’Umbria not included in the calculation (data not available)

Page 16: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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UNICREDIT BANCA D’IMPRESA WILL LEVERAGE ON INFRA-GROUP AND “CROSS” DIVISION SYNERGIES TO DEVELOP ITS SERVICE MODEL

WE IDENTIFIED THREE MAIN AREAS ON WHICH WE WILL FOCUS TO ACHIEVE OUR GOALS:

Take advantage of synergies with our investment bank (UBM) to maintain and further develop leadership in corporate derivatives, with increasing focus on quality of service

Increase the weight of innovative products (Equity risk hedging, Commodity & Energy risk) vs. traditional ones (Interest rate & Forex hedging)

Increase our market shares on foreign payments & collections of our clients through a better coverage of our customer base

Sustain the internationalisation process of Italian companies leveraging on: the presence of our banks in New Europe to satisfy our customers’ needs the activity of our foreign branches (New York, London, etc.)

Develop a service model to answer the request for corporate finance services of our top clients, starting from:

the strong synergies with UBM (investment banking) and Banca Mediocredito (long term and project finance)

a team of specialists fully dedicated to 150/200 “leader” companies selected as pilot to better identify and satisfy their needs

CORPORATE DERIVATIVES

FOREIGN TRANSACTION SERVICES

CORPORATE FINANCE

Page 17: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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SOUND COMMERCIAL RESULTS IN THE FIRST THREE MONTHS OF 2003 AND NEW PROJECTS WELL ON TRACK

Derivatives: around 13% customer base increase, with good increase in volumes and gross margins up 29% vs. same period in 2002

Improved pricing on loans: mark up at 2.69% in March (+ 14 bp vs January and +2 bp vs February)

Customers loans in line with end 2002 (-0.3%) despite rationalization of lending portfolio

Key clients: new service model to support origination of value added products (corporate finance, derivatives, asset finance etc.)

Foreign transactions services: dedicated team to increase mkt share on foreign payments and collections, also through synergies with UCI New Europe network

MAIN PROJECTS UNDERGOING

FIRST 3 MONTHS ACHIEVEMENTS

Page 18: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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Around 550 Bankers

Around 95,000 customers, around 40,000 families

UNICREDIT PRIVATE BANKING IS THE BIGGEST PRIVATE BANK IN ITALY...

KEY FIGURES

More than 150 branches

Market Shares*: 1.8% in AM 2.4% in Mutual Funds 2.5% in Securities in Custody

Around Euro 36 bn Direct and Indirect Deposits

Assets under Management Securities in Custody

Liquidity Loans

Breakdown of Total Dir. & Ind. Deposits + Loans

7%

48%

44%

1%

* Source (for Total Italian Market): Internal calculations on Assogestioni and BankIT data

Note: Management accounts figures

ROOM TO INCREASE PENETRATION OF HIGH VALUE-ADDED SERVICES

Page 19: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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… OPERATING IN AN INTERESTING MARKET, COMPOSEDBY FEW INDIVIDUALS CONTROLLING A HUGE PROPORTIONOF WEALTH

HNWI: liquid assets > Euro 500K; Affluent = € 50K TO € 500K; Mass =< €50KSource: 2000, National Statistics, PwC Analysis

88%

26% 20%

10%

52%55%

22% 25%

2%

Affluent

HNWI

Mass

21 mlnFamilies

€ 2,639bn

€ 11.2bn

Total Banking assets

Families Profits

> Euro 500K

< Euro 500K

WEALTH DISTRIBUTION AND UCI PB PRESENCE IN ITALY

Wealth in Italy*by region

UCI PB AuM** by region

3.5%

2%

4%

5%

9%

6%

9%

9%26%10%

7.6%

2.5%

18.3%18.2% 17,0%

3.3%

2.7%

20.3%

2.5%2%

1.6%

* Weighted Average of income and deposits by region** UCI PB AuMs by regionSource: UCI PB – Strategic Marketing calculations on UCIBANCA – Strategic Marketing data

Page 20: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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THE BANK WILL LEVERAGE ON ITS STRONG COMPETITIVE POSITION

COMPETITORSTYPICAL TARGET

CUSTOMERPOSITIONING

UCI PB COMPETITIVE ADVANTAGES

LOCAL DOMESTIC PLAYERS

NATIONAL DOMESTIC PLAYERS

FOREIGN PLAYERS

Upper Affluent / Lower Private

(500,000 Euro<Total Financial Wealth<1 bn Euro)

All categories of Private Clients

Upper Private / Large Accounts(Total Financial

Wealth>10 bn Euro)

Strong for brand and tradition, but limited (on-shore)

Wider offer of products/ services

Higher quality of service

Superior skills and competencies

Higher focus and better strategy

Wide-spread presence all-across the country

Deeper knowledge/ understanding of customers

Synergies with other Group companies

Consolidated long-term “trust” with the client

Sub-scaled

Large but weak

Page 21: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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RESULTS IN THE FIRST THREE MONTHS OF 2003 ARE ENCOURAGING, DESPITE THE ADVERSE MARKET SCENARIO

Around 400 net acquisitions of clients

Around Euro 1.2 bn Total Gross Sales of AM products and Euro 250 mln of structured bonds

Total Direct and Indirect Deposits stable on 31.12.2002 levels despite negative market performance (around –1.7%)

Good start of the second “tax-amnesty” for the repatriation of capitals managed in foreign countries, with the acquisition of 281 mandates

FIRST 3 MONTHS ACHIEVEMENTS

Development of a distinctive offer for highly sophisticated and wealthy customers

MAIN PROJECTS UNDERGOING

Optimisation of the offer for customers with less than Euro 500K; senior Private Bankers focused on the acquisition of new customers

Joint-project with UCI Banca d’Impresa for a combined offer of Corporate and Private services to entrepreneurs

Page 22: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

22

AGENDA

2002 Group Highlights

“The 2003 opportunity”: managing organic growth through 3 segment banks

2003 Outlook

Page 23: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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WE HAVE CONSIDERED TWO DIFFERENT MACROECONOMIC SCENARIOS FOR 2003

Economic scenario

Real GDP growth:

Refi ECB (as at 31.12.2003)

Mutual Funds Perf. (3)

Avg. Loans growth (2)

Avg. Deposits growth (2)

Avg. Sh. Term Spread (2)

BASE SCENARIO(60% likelihood1)

ADVERSE SCENARIO(35% likelihood1)

Gradual improvement of macroeconomic fundamentals

Still weak macroeconomic fundamentals

+1.0% +0.2%

2.50%

+5.5% +4.2%

+5.6% +8.0%

4.29% (-5bp on 2002)

+3.7% (on 31.12.2002) -3.0% (on 31.12.2002)

(2) Data related to the whole Italian Banking System

(1) Balance (5% likelihood) attributed to a more positive scenario

(3) Calculated on the whole stock of Mutual Funds in Italy (“perimetro Assogestioni”)

4.18% (-16bp on 2002)

1.75%

- in Italy

- in Poland +2.1% +1.0%

Page 24: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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WE ARE ACTIVELY WORKING IN ORDER TO PRESERVE NET INCOME GROWTH EVEN IN THE ADVERSE SCENARIO

UCI 2003 BUDGET(Base Scenario)

IMPACTS OF THE ADVERSE SCENARIO (pre contingency plan)

Net interest IncomeModerate increase on 2002: increased market shares in loans and deposits in Italy offsetting slightly lower spreads

~ -100 Euro mln. vs Base Scenario

Net Non-interest Income

~ -260 Euro mln. vs Base Scenario

Growth related to increased net commissions (due to sales of high value added products, synergies among the segment-banks and growth of foreign- trade services) and income from financial transactions from Corporate Banking

Operating CostsModerate growth mainly due to S3 one-off costs and launch of strategic projects in the 3 segment banks. Tight control on ordinary costs

Savings for ~ 60 Euro mln costs

directly linked to lower revenues

Loan Loss ProvisionsOverall decreasing; moderate growth on 2002 levels net of extraordinary provisions (i.e. Pekao and alignment of provisioning criteria in the 7 banks)

In line with 2002, including 2002 extraordinary

provisions

Page 25: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

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Annex

Page 26: UNICREDITO ITALIANO GROUP Andrea Moneta – Deputy CEO & CFO UBS Warburg 2003 Global Financial Services Conference New York - April, 28 th 2003

26

Net extraordinary income

Net interest income (incl. div.)

Net non interest income

Total revenues

Operating income

Net write-down of loans

% ch. on FY01

Administrative costs (incl. depr.)

Net income +1.9

+0.9

-1.3

-0.2

+34.8

+69.3

+2.4

-3.2

Other net provisions* +32.6

Goodwill depr. -11.6

FY02

5,127

4,972

10,099

5,483

4,616

979

359

1,801

472

245

(Euro mln)

Minorities -37.8161

Taxes -17.51,317

(*) Including provisions to reserve for general banking risk

-20.2

+0.3

+5.2

+2.7

+84.5

n.m.

+5.0

-0.5

n.m.

-6.3

4Q02

1,253

1,219

2,472

1,441

1,031

321

218

352

309

59

-38.031

-42.0178

% ch. on 3Q02

FY02 CONSOLIDATED INCOME STATEMENT