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2 0 0 5 I N T E R I M R E S U L T S T R A N S I T I O N TO I A S / I F R S MILANO, Palazzo Mezzanotte - September 15 th, 2005.

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Presentation on theme: "2 0 0 5 I N T E R I M R E S U L T S T R A N S I T I O N TO I A S / I F R S MILANO, Palazzo Mezzanotte - September 15 th, 2005."— Presentation transcript:

1 2 0 0 5 I N T E R I M R E S U L T S T R A N S I T I O N TO I A S / I F R S MILANO, Palazzo Mezzanotte - September 15 th, 2005

2 2 1H 2005 - Results at a Glance 30.06.2005 30.06.2004 pro-forma Var. GROUP NET INCOME61.649.823.7% Total income598.7571.34.8% Operating profit205.7186.210.5% Pre-tax income131.1109.719.7% ROE(adj.)14.5%13.7%80 b.p. COST / INCOME63.5%65.5%-200 b.p. Tier 1 ratio5.2%5.3%-10 b.p.

3 3 1H 2005 Pre-Tax Income - Breakdown Pre-tax income, goodwill excluded *B. CR Firenze, CR Pistoia, CR Spezia, CR Civitavecchia, CR Orvieto, CR Mirandola 58% 36% 8% 2% -4% % weight 142.4 mn. YoY change v Pre-tax income shows growth in core businesses Retail banking * : positive contribution mainly thanks to NII and credit quality Consumer credit: in line with budget but weaker 2Q (-9.6% QoQ) Service companies: decrease in Infogroups income is due to its new repositioning within the Group Tax collection services: delays in government refunds

4 4 Net Interest Income v Positive contribution from both retail banking and consumer credit 360.3 334.1 +7.8% 3 months EuriborCustomer spread Net interest income mn Retail banking * Consumer credit YoY change * B. CR Firenze, CR Pistoia, CR Spezia, CR Civitavecchia, CR Orvieto, CR Mirandola

5 5 NII – Customer loans v Increase in average outstandings * leads to higher contribution margin despite mark-up reduction retail banks: change in portfolio mix (higher mortgage loans weight lower mark-up) consumer credit: less household spending and stronger competition YoY change Total loans * 14,462 15,709 8.6%(0.17) Retail banks11,47812,392 8.0%79%(0.14) Individuals6,577 7,198 9.4%46%(0.19) Corporates4,901 5,194 6.0%33%(0.10) Consumer credit2,984 3,317 11.2%21%(0.42) 1H 20041H 2005 % Weight Mark-up change * Progressive average outstanding loans

6 6 NII – Customer deposits v Higher contribution margin due to both volumes * and mark-down current accounts re-pricing individuals still lead but corporate mark-down is improving YoY change Total deposits * 14,680 15, 568 6.1%12 bp Retail banks13,93914,646 5.1%95%9 bp Individuals11,150 11,5974.0%76%7 bp Corporates2,789 3,048 9.3%19%11 bp Consumer credit740 922 24.6%5%87 bp 1H 20041H 2005 % Weight Mark-down change * Progressive average outstanding loans

7 7 Mortgage Loans v Sustainable volume growth, in line with budget stable spread despite stronger competition improving quality, far better then the system v Continued synergies with Findomestic: all branches operative BCRF Italy Doubtful loans * Distributed by Findomestic 5% of Group flows mn Total loans - bn +6.3% (13% yearly) +15.8% bn * B. CR Firenze, CR Pistoia, CR Civitavecchia, CR Orvieto. Source: Assofin

8 8 Non-Interest Income v Stable fees on adjusted basis: positive impact from re-pricing of current accounts AUM campaigns: short term negative impact; average customer portfolio still comprises monetary products 206 Fees Fees + other income 202 +2% YoY PF Flat on adj. basis Fees + Other income

9 9 Operative costs v Adjusted costs better than business plan. The stated values affected by the merger of Datacentro and the increase of tax stamps: YoY comparisons throughout 2005 affected by the increase of government tax stamps Datacentro costs moved from other op. expenses to other administrative costs 1H 051H 04Var. 1H 04 PF Var. Var. stamps & duty excl. Admin. costs(365.5)(347.9)5.1%(356.3)2.6%1.5% Personnel(215.7)(210.3)2.6%(212.1)1.7% Other costs(149.8)(137.5)8.9%(144.2)3.9%0.9% Depreciation(27.5)(28.8)-4.5%(28.8)-4.5% Total costs(393.0)(376.6)4.4%(385.1)2.0%1.0%

10 10 Customer Loans v Total customer loans (+4.2%) in line with budget v Stable quality and stable market share NPLs/ Net loans Corporate unit mkt. share * NPLs market share * Consumer Credit Corporate & Retail Euro bn +3.2% banks + 6.0% c. credit Loans Market share * Parent company on business territory

11 11 Capital ratios v Stable Tier 1 ratio as at 30.06.2005 v Findomestic Banca recorded with the equity method will strengthen capital ratios 31.12.2004 30.06.2005 Shareholders' equity1,151.4 Tier 1 capital993.6 Tier 2 capital901.4 Regulatory capital1,805.3 Risk weighted assets18,597.5 Tier 1 ratio5.34% Solvency ratio9.71% 1,152.5 993.8 893.0 1,796.7 19,116.7 5.20% 9.56%

12 I A S / I F R S F I R S T T I M E A D O P T I O N

13 13 v IAS/IFRS as per EU Commission ratifications released up until January 2005. IAS 32 and 39 are included. * v Value adjustments recognised in the shareholders equity (IFRS 1) First Time Adoption - Criteria * Modification of the existing standards, new standards and/or changes of interpretation which could arise may vary FTA impact. Applied the integral version of IAS 39 ratified by EU Commission Fair value model has been adopted to revaluate investment and instrumental properties Amortized costs as at 31.12.2004 is equal to face value because transactional costs (up-front) have been reckoned not significant. Findomestic Banca (JV with BNP Paribas Group) has been accounted for the equity method (IAS 31) In the collective assessment of performing loans, Basel II recommendations have been optimized Perimeter of consolidation comprises companies active in business sectors other than that of the parent company (i.e. Centrovita - bancassurance) Put options have been accounted following IAS 32

14 14 >Impatto della FTA sul Patrimonio netto e sul Patrimonio di vigilanza 15 Nota Limpatto della prima applicazione dei principi IAS/IFRS sul Patrimonio di vigilanza consolidato e sui coefficienti prudenziali è stato stimato considerando i filtri prudenziali indicati dal Comitato di Basilea sul trattamento dei valori IAS.

15 15 >Impatto della FTA sulla qualità del credito 16

16 FTA - Impact at a glance v No material impact on shareholders equity 1,151 1,193 + 42 million Euro million

17 17 >Raccordo tra Patrimonio netto contabile civilistico e IAS (1/2) (1) La valutazione ha tenuto conto degli accantonamenti a Fondo rischi su crediti (voce 90 del passivo) esistenti al 31 dicembre 2004, pari a 24,7 milioni di euro, che sono stati imputati in diretta diminuzione di tali crediti. 18

18 * The evaluation takes into account provisions for risks and charges as at 31.12.2004 FTA - Impact Breakdown

19 A P P E N D I X

20 20 FTA – Impact on balance sheet

21 21 FTA – Impact on balance sheet 31.12.2004 IFRS adj. New perimeter adj. 31.12.2004 IFRS Trading financial liabilities1,286.90.0292.11,579.0 Fin. Liabilities recognized at amortized cost17,160.597.8(1,164.3)16,094.0 Trading derivatives0. Hedging derivatives10.6(0.7)(1.8)8.1 Provisions for staff severance pay172.723.1(8.0)187.8 Provisions for pensions170.47.90.0178.3 Tax provisions and other fiscal liabilities126.083.7(39.2)170.5 Other provisions for risks and charges77.7(3.2)(3.4)71.1 Put options owned by minority shareholders' of consolidated companies0.0174.70.0174.7 Other liabilities999.820.7651.81,672.3 LIABILITIES20,004.6 435.1(272.8)20,166.9 Share capital and share premium704.0 Minority interests208.6(144.9)23.186.8 0.10.0704.4 Revaluation reserves0. FTA reserve0.0(23.8)0.0(23.8) Other reserves345.1(11.1)0.2334.2 Net profit for the period102.337.4(0.6)139.1 SHAREHOLDERS' EQUITY + Minority interests1,151.4 41.9 0.1 1,193.4 TOTAL LIABILITIES21,364.6 332.1 (249.6)21,447.1

22 22 IFRS 1 – Sharehold. equity reconciliation statements 1) Consob Regulation no. 11971 - Art. 81 bis, paragraph 1b

23 23 IFRS 1 – Sharehold. equity reconciliation statements 2) Consob regulations no. 11971 - Art. 81 bis, paragraph 1b

24 24 IAS/IFRS - Reconciliation Statements 1) Consob Regulation no. 11971 - Art. 81 bis, paragraph 1a

25 25 IAS/IFRS - Reconciliation Statements 2) Consob Regulation no. 11971 - Art. 81 bis, paragraph 1a

26 26 >Prospetto di riconciliazione dei saldi (art. 81 bis, 1°comma, lettera a), del regolamento CONSOB): Conto economico 27

27 Customer loans – Evaluation Criteria v In bonis loans: expected losses (EL) have been estimated on the basis of PD and LDG of loans residual duration as per the following criteria: 40 risk categories: 5 classes x 8 segments PD: risk category adjusted – LGD: 18% v Problem loans: time-discounted recovery value has been determined as follows AMOUNTLOAN RATEAVG. MATURITY Mortgage loans Initial rate 5.0 years 0 - 2,500 1.1 year 2,501 - 15,000 3.5 years 15,001 - 50,000 5.8 years 50,000 - 250,000 7.2 years > 250,000 7.1 years Weighted average 6 years with repayment scheme as per expiry date without repayment scheme 10 months Initial rate NON PERFORMING LOANS DOUBTFUL and RESTRUCTURED LOANS Unsecured loans Initial rate

28 28 Put Options v In the consolidated annual report these instruments are classified as a financial liability. Based on this classification, put options pertaining to minority interests, have been recorded with a value equal to the present value of the put options themselves. In the future, any change in the fair value of the financial liability will be accounted for in the P&L.

29 29 Financial assets - HFS MAIN ADJUSTMENTS TO HFS FINANCIAL ASSETS RevaluationDepreciation Fondiaria-Sai14.9 CR Forlì(28.6) Firenze Parcheggi2.0 Engineering(1.7) Brain Technology1.1 Sì Holding2.3 Sanpaolo IMI34.2 Others1.0(0.1) TOTAL55.5-30.4 Net revaluation25.1

30 2 0 0 5 I N T E R I M R E S U L T S T R A N S I T I O N TO I A S / I F R S MILANO, Palazzo Mezzanotte - September 15 th, 2005

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