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London, March 13 th 2002 2001 Group Results Alessandro Profumo - CEO UniCredito Italiano.

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Presentation on theme: "London, March 13 th 2002 2001 Group Results Alessandro Profumo - CEO UniCredito Italiano."— Presentation transcript:

1 London, March 13 th 2002 2001 Group Results Alessandro Profumo - CEO UniCredito Italiano

2 2 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

3 3 2000 2001 ROE (1) 20.8% (4) COST/INCOME RATIO 52.7% 51.0% 2000 2001 47.8% 47.7% Structural Cost/Income 18.0% +3.5% 2000 2001 9,318 NET INCOME 4,726 9,989 4,566 +7.2% 2000 2001 1,395 1,454 2000 2001 (Euro mln) +4.2% 1,611 (2) 1,695 (3) +5.3% 22.2% (2) 21.0% (3) (Euro mln) 19.2% (5) DESPITE A DETERIORATED MARKET ENVIRONMENT UCI SHOWS GOOD REVENUE AND INCOME GROWTH TOTAL REVENUES OPERATING INCOME (1) Calculated on end of period net equity (2) Adding back goodwill amortisation related to the Group and 98-’99 provisions related to Ciampi Law (3) Adding back goodwill amortisation related to the Group (4) Adding back ’98-’99 provisions related to Ciampi Law (5) Calculated on Group net income of Euro 1395 mln (Euro mln)

4 4 TOTAL REVENUES BREAKDOWN REVENUES INCREASED 7.2% y/y THANKS TO A DIVERSIFIED MIX OF REVENUES... 2000 4,747 3,339 638 594 9,318 2001 5,049 3,291 933 716 9,989 Net commissions Net interest income Trading profits Other income +6.4% -1.4% +20.5% +46.2% +7.2% Positive contribution from the domestic network: +8.5% y/y due to increased volumes both in customer deposits(+3% y/y) and loans (+7% y/y) with improved average spread from 4.8% to 5.09% in 2001 In New Europe net interest income up 16% y/y mainly due to increased volumes in customer deposits (+16.1% y/y) and loans (+16.4% y/y) At Group level net interest income is partially reduced by debt impact and cost of equity investments financing Net non interest income up 8.1% on 2000 due to positive trend in other income and trading profits that more than compensates the decline in net commissions (Euro mln)

5 5 Italian Banking- Other Italian Banking- Wealth Management * New Europe UBM + TLPioneer REVENUE COMPOSITION BY BUSINESS AREA (Net of Corporate Centre negative contribution) … AND A WELL BALANCED BUSINESS PORTFOLIO 59.8% 13.7% 2.7% 4.8% 19.0% 60.2% 14.6% 4.7% 5.8% 14.6% 78.8% 74.8% 20002001

6 6 NEGATIVE IMPACT OF FINANCIAL MARKETS ON TOTAL COMMISSIONS PARTIALLY COUNTERBALANCED BY DISTRIBUTION OF VALUE ADDED PRODUCTS NET COMMISSIONS 2000* 2001 % ch. (Euro mln) Excellent impact of capital guaranteed products on commissions from segregated accounts and insurance products * consistent with new Bank of Italy criteria for breakdown of commissions Commissions from securities in custody suffered the lower turnover of customers’ portfolios Positive contribution from other services (mainly commissions from loans granted and from payment services) Asset management commissions stable despite negative market environment Asset management1,8031,789+0.8 Mutual funds1,3241,447-8.5 Securities in custody334422-20.8 Other services, of which:1.1541,128+2.3 Insurance products226156 +44.9 Total3,2913,339-1.4 Loans granted & received456497+9.0 Cash management services250263+5.2 Segregated accounts253186 +36.0

7 7 PROFIT FROM FINANCIAL TRANSACTIONS HAD A BRILLIANT PERFORMANCE (+46.2% ON 2000) THANKS TO THE CONTRIBUTION OF ALL DIVISIONS INCOME FROM FINANCIAL TRANSACTIONS (Euro mln) UBM (excl. TL) TradingLab Italian banks +46.6% +59.1% New Europe banks +105.5% * Balance due to Other Group companies +46.2% Cautious risk management: average daily VaR of only Euro 3.7 mln for UBM and Euro 2.9 mln for TL during 2001 Increasing impact of CorporateLab, accounting for around 370 Euro mln (220 Euro mln inside UBM and 150 Euro mln inside the Italian Banking division). Corporate derivatives volumes up 125% on 2000 to 19.1 Euro bln 2001 208 312 337 202 933 *

8 8 TOTAL OPERATING COSTS (Euro mln) Staff Costs Other costs % y/y Ch. +9.8% +15.4% Depreciation +11.4% +10.8% Staff costs (excl. Pioneer): +2.6% development of Wholesale Banking (IB and Asset Management) +0.4% Zloty appreciation +3.2% investments in sales effectiveness, incentivisation program 2001 3,045 1,813 405 5,263 % ch. Excl. Pioneer +7.2% +12.9% +7.6% +6.2% OPERATING COSTS UP 10.8%, SUPPORTING UCI’s REVENUE GENERATION AND FUTURE GROWTH Other costs: +7.6% related to the Group’s restructuring and development (IT, branches, Pioneer advertising campaign) Staff from 65,124 (2000) to 63,576 (-2.4% y/y)

9 9 Acquisitions : Lower weight (from 4.3% in 1H01) due to closing of C/I gap between acquisitions and internal best practice (know-how transfer, improvement of efficiency) New Initiatives :  Development of new business models dedicated to specific customer segments 47.8% 3.4% 1.0% 0.5% Develop. projects Acquisitions New Initiatives EXCELLENT STRUCTURAL C/I CONFIRMED Italian Banks:  Reorganisational process of commercial network under way (full segmentation, improvement branch layout) Structural C/I ratio 2001 C/I 52.7% 2001 C/I lower than the budgeted 55.3%. 2001 investment savings don’t affect future growth targets

10 10 DIVISIONAL CONTRIBUTION TO GROUP NET INCOME 58 (1) 227 (1) -61 +35.1% N.m. 1,669 (1) 1,454 +16.6% 2,109 Italian banking (2) Wholesale banking New Europe banking (5) New Initiatives (6) Corp. Centre & elisions (7 ) Group total Total pre- Corp. Centre -655 (1) GOODWILL AND HOLDING CHARGES: - 242 goodwill depr. - 460 holding loss (net of dividends), of which 275 due to financial costs (Euro mln) +4.2% N.m. 216 (1) +38.5% +14.6% Inv. banking (3 ) Pioneer Group (4) (1) Net of infragroup dividends. Goodwill depreciation is fully charged to Corp. Centre (2) Credito Italiano, Rolo Banca 1473, Cariverona, CRT, Cassamarca, Caritro, CRTrieste, Banca dell’Umbria, CRCarpi, Mediovenezie, BMC, Adalya Banca Imm. Spa, Banque Monegasque, Unicredit Suisse, BAC Marino, CRTS Zagabria, RoloPioneer Lux, Rolo Pioneer Sgr, Gesticredit, Gestiveneto, Fondinvest, Pioneer inv. Management SA, S+R Investimenti, Fida Sim, FRT Sim, Fid. Cordusio, CRV Ireland, CRTS Ireland, Uniriscossioni, Quercia Funding, Unicredit Servizi informativi, Unicredit Prod. Acc., Trivimm, Quercia Software (3) UBM, TradingLab, Euro Capital Structures (4) Group Pioneer Global Asset Management Spa, Unicredit Capital Italia Spa (5) Group Pekao, Bulbank, Pol’nobanka, Splitska Banka (6) Xelion, Clarima (7) Parent Company, other financial companies and elisions

11 11 42 1.272 442 7517 Italian banking Wholesale banking New Europe banking New Initiatives CAPITAL ABSORPTION 1.469 -73 226 90 VALUE CREATION 7.076Group total706 Adj NET INCOME 2.139 (3) -65 374 (3) 222 (3) 1.558 RARORAC % 19,5 N.s. 17,7 20,4 9,97 (*) Estimate (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) Includes minorities and elisions MARGINAL RARORAC % 19,8 N.s. 23,2 60,1 13,9 (Euro mln) Tier 1 from 6.85% (Dec 00) to 7,17% (*) (Dec 01) WE ARE ABLE AND COMMITTED TO CREATE EXTRA VALUE FOR OUR SHAREHOLDERS, OPTIMISING CAPITAL ALLOCATION Net Income + goodwill depreciation (a) Risk taken (1) (b) Shareholder’s value added (c) =(a)-COE (2) Value added per unit of risk taken (c)/(b)

12 12 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

13 13 ITALIAN BANKING DIVISION: KEY HIGHLIGHTS SIGNIFICANT INVESTMENTS ON BANKS’ SERVICE MODELS FOR FUTURE GROWTH GOOD RESULTS DESPITE A DIFFICULT MARKET SCENARIO SOUND COST CONTROL STABILISING COST-INCOME DESPITE INVESTMENTS Started roll-out of new service models for affluent, mass market and small business customers, preparing all banks for S3 project Ability to promptly react to difficult market conditions, with significant growth in mutual funds, bancassurance and capital guaranteed products, more than compensating decrease in AuM due to financial markets turmoil Cost Income ratio at 47.5% (46.9% in 2000), 46.6% (46.5% in 2000) without project investments ASSET QUALITY AT EXCELLENT LEVEL Improved NPL/Gross loans ratio as a result of selective loan growth and careful risk management policies

14 14 2000 % ch.2001 Cost/Income ratio (1) 46.9% 47.5% Interest margin3,702+8.5 4,017 Net non interest income3,641-5.2 3,801 Total revenues7,343+6.5 7,818 Administr. costs (incl. depr.) 3,502+10.3 3,862 Operating income 3,841+3.0 3,956 Net loan loss provisions -568-17.4 -469 Net extraordinary income 33 +103.0 67 Net income +15.71,730 2,002 Other net provisions -211 -24.2 -160 (Euro mln) Tax expenses -1,365 +2.0 -1,392 Net income for the Group +16.61,431 1,669 GOOD RESULTS IN A DIFFICULT MARKET ENVIRONMENT, WITH IMPROVEMENT OF KEY PERFORMANCE INDICATORS (1) After deduction of costs and revenues arising from USI/UPA services (around Euro 280 mln in 2001, Euro mln 111 in 2000), which are included in other net operating income for USI/UPA and in administrative costs for the other companies of the division. At Group level these costs/revenues are elided “Ordinary” C/I Impact on C/I of project investments Impact on C/I of Cost Excellence project 46.6% +1.1% -0.2% 2001 COST/INCOME COMPOSITION Revenues per employee from Euro 210.5 th. to Euro 221.4 th., + 5.2% Net income per employee from Euro 49.6 th. to Euro 56.7 th., + 14.3%

15 15 GROWTH IN MASS MARKET, SMALL BUSINESS AND CORPORATE SEGMENTS MORE THAN OFFSETS DECLINE IN AFFLUENT AND PRIVATE BANKING DUE TO FINANCIAL MARKETS TURMOIL Oper. Income (Euro mln) Net Income (Euro mln) Private banking -18 Affluent -19 Mass market +2 +9 Small Business +20 +48 Corporate +37 +79 Other * -7 +23 % ch. y/y Total 7 banks +2 +14 % ch. y/y C/I ratio, % 26.9 50.0 65.7 49.8 36.3 N.s. 46.9 * Revenues and costs not arising from segment activities (mainly Rolo treasury dept., Rolo foreign subsidiary, free capital of the banks and inter-banking activities) Corporate: excellent results thanks to selective reduction of less profitable assets, growth in low risk loans and in commissions from high value-added services Small business: positive impact of Imprendo package on commissions and volumes; growth of lending volumes supported interest margin increase Mass market: improved cross selling (current account packages), growth of lending volumes and increased spreads Private & affluent: results penalised by bad performance of financial markets, but excellent sales of high value-added products 322183 566309 685323 473206 871381 667388 3,5841,790

16 16 Asset mgmt commissions Other commissions Net interest income Other income 52% 17% 30% 1% BREAKDOWN OF TOTAL REVENUES Euro 1,573 mln, -10.1% y/y PRIVATE & AFFLUENT: NEGATIVE IMPACT OF FINANCIAL MARKETS TURMOIL ON AUM AND ASSET MANAGEMENT COMMISSIONS BUT EXCELLENT NET SALES OF HIGH VALUE-ADDED PRODUCTS ASSET MANAGEMENT COMMISSIONS 2001 sales New inflows 1,96513.56 Ch. on 2000 +23 bp Dec 01 mkt sh. MUTUAL FUNDS 2001 sales Premium written +43 Rank in Italy 1 st UNIT LINKED 2001 inflows New inflows 4,362 O/w unit linked 1,599 O/w segreg. accounts CAPITAL GUARANTEED 3,889 7,460 909 814 -10.4% UCI Group ranked first in the sales of all high value-added products in Italy, partially compensating the devaluation of stocks Confirmed leadership in market shares on Unit Linked (98% of the total new production of insurance premiums): 34.5% (+11 pp y/y) in Bancassurance 26.7% (+ 9.7 pp y/y) on total market % Ch. on 00 (Euro mln) PRIVATE & AFFLUENT 20002001

17 17 MASS MARKET: GOOD RESULTS THANKS TO INCREASE IN LENDING VOLUMES AND SPREADS, WITH IMPROVED CROSS SELLING 2000 1,924 1,999 TOTAL REVENUES +3.9% INTEREST INCOME NON INTEREST INCOME 974 950 1,044 955 +0.5% +7.2% (Euro mln) The good increase in lending volumes more than offset the decrease of deposits M/l term loans: + 16% Sight deposits: +2.4% Improved spreads both on loans and deposits: Loans: + 3 bp Deposits: + 12 bp Increase in Assets & Deposits per customer (+6.9%, from 14.3 th Euro to 15.3 th Euro) as a consequence of improved cross selling Good results from package accounts: 1.5 mln customers, 19% growth on Dec 00 (compared with 2% growth of the number of traditional current accounts) penetration from 34% (Dec 00) to 40% (Dec 01) 2001 20002001 20002001

18 18 SMALL BUSINESS: GOOD LENDING PERFORMANCE AND POSITIVE EFFECT FROM IMPRENDO NEW CUSTOMERS 848 943 635 574 308 274 11,434 12,048 3.94 4.24 TOTAL REVENUES INTEREST INCOME NON INTEREST INCOME LENDING VOLUMES SPREAD ON LOANS, % + 11.2% +10.6% +12.5% (Euro mln) Imprendo customers as of Dec 01: 125,000 (+ 36% on Dec 00), representing 23% of total small business customers 35,000 new customers (19,000 in 2001 only) Positive effect on revenues per customer from Euro 1.5 th to 1.7 th, +13.3% y/y) + 5.4% + 30 bp 20002001 20002001 20002001 20002001 20002001

19 19 CORPORATE: EXCELLENT RESULTS DUE TO IMPROVED CUSTOMERS PORTFOLIO AND GROWING COMMISSIONS FROM HIGH VALUE- ADDED SERVICES BREAKDOWN OF COMMISSIONS % ch. on 00 % weight on total 2001 Forex & derivatives Foreign services Payment services Portfolio management Other Total 187+5938 95+2820 68+2114 39+58 99+120 488+27100 32.0-1.9 6.036.1 Avg. Loans 00 Selective reduction Avg. Loans 01 New Loans (Euro bn) Increase lending profitability: growing loans (+12.8% y/y), even after a selective reduction of less profitable assets better spread, +23 bp y/y (Euro mln) Good performance of all commissions, not only from Forex & Derivatives 5.6% 0.5% +5.1 pp 20002001 RARORAC PROFITABILITY INCREASE

20 20 SELECTIVE GROWTH TO MAINTAIN ASSET QUALITY AT EXCELLENCE LEVEL ALSO FOR THE FUTURE DEFAULT LIKELIHOOD (1) LOW (1) MEDIUM (1) HIGH (1) Total portfolio (1) See Annex for definition WEIGHT ON LOAN PORTFOLIO (DEC 2001) % GROWTH (DEC O1/00) 51.1% 38.1% 10.8% +12.4 +2.1 -10.0 100.0%+5.5 2000 2.9%2.6% 4.0%3.3% 0.73%0.68% Gross NPL /Gross Loans Gross NPL /Gross Loans T-2 New NPL /Gross Loans T-2 1.05%0.99% New Watchlist /Gross Loans T-1 2001 7 MAJOR ITALIAN BANKS 48.2%48.1% Coverage ratio on total gross NPL Good improvement of asset quality indicators of the 7 major Italian Banks (includes a securitisation of Euro 660 mln of NPL carried out by Cariverona and Mediovenezie in 2001) The flows of NPL and Watchlist Loans on Gross Loans show a good improvement Stable coverage ratios GOOD ASSET QUALITY:

21 21 S3 PROJECT IS WELL ON TRACK AND REINFORCES OUR CONFIDENCE TOWARDS THE RESPECT OF THE PLANNED TIMETABLE MAIN EVENTS OCCURRED AFTER THE APPROVAL OF S3 PROJECT (DECEMBER, 14TH 2001) Creation of 13 task forces responsible of the reorganisation plan, with direct involvement of the Holding company Top Management Top Management’s Roadshow in the main Italian towns to meet more than 8,000 members of the middle management to share the rationale and targets of Project S3 The task forces organised into working groups focused on the operational aspects of the reorganisation, 40 of which are currently working towards Jan 1st deadline (spin-off of the 3 new segment banks)

22 22 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

23 23 2001 REPRESENTED A TEST OF REVENUE STABILITY AND PREDICTABILITY FOR UCI’S INVESTMENT BANKING NON CYCLICAL BEHAVIOR OF P&L UBM & TRADINGLAB: TOWARDS A MODEL OF STABLE GROWTH IN INVESTMENT BANKING HIGH VOLUMES WITH LIMITED RISKS: LOW AND STABLE DAILY VAR, RESILIENCE TO MARKET STRESS LIGHT AND FLEXIBLE PROFESSIONAL STRUCTURE LIMITED IMPACT OF BAD MARKET CONDITIONS: NON-CORRELATION BETWEEN REVENUE SOURCES (CORPORATE DERIVATIVES VS RETAIL DERIVATIVES AND CORPORATE FINANCE) STABILITY OF DAILY REVENUES 35.4% C/I (including variable compensation)

24 24 BRILLIANT INCREASE IN NET INCOME... Net Income Total Revenues Euro mln C/I ratio (%) Net operating income 394.1 610.3 35.4 218.3 2001 444.0 155.8 37.3 278.6 2000% Ch. +37.4 +40.2 -1.9 pp +41.5 Key figures C/I Ratio at excellent level (35.4%, -1.9 pp vs. 2000), despite significant IT investments and increased headcount (566, +181 vs. 2000) ROE higher than 55% Average daily net revenues from trading up 35% vs 2000 (Euro 2.04 mln vs Euro 1.51 mln), despite difficult market conditions; their “recurring nature” confirmed by 2002 trend

25 25 Wider product range (“Range”, “Pick Up”, “Strategy”, “Super Stock” and “Dynamo”); issuance (Euro 4.5 bn) and market making of Derivatives Linked Notes 50% market share in CW in Italy as at Dec. 2001, despite increased competition... MAINLY DUE TO A STRONG REVENUE INCREASE IN COUNTERCYCLICAL DERIVATIVES FOR CORPORATE AND INSTITUTIONAL CUSTOMERS Derivatives (1) Capital Markets & Corporate Finance Euro mln Fixed Income (1) Equities (1) (1) Sales & Trading Corporate Banking 19.4 Corporate Institutional 220.6 75.1 Total Revenue Composition 32.0 30.2 25.3 295.7 2001 38.5 127.1 40.6 40.9 - 93.7 33.4 2000% Ch. -16.9 -25.4 -29.0 (2) 402.6 TOTAL 247.1+62.9 n.s. +135.4 +124.2 +132.6 198.7196.9+0.9 610.3 TOTAL INVESTMENT BANKING (3) 444.0+37.4 (2) Calculated on a comparable basis UBM KEY HIGHLIGHTS DERIVATIVES CORPORATE: More than 25,000 deals with customers (nominal value of risk covered higher than 120 bn Euro) INSTITUTIONAL: Engineering (in jv with Pioneer) of Capital Guaranteed Products Euro 19.4 mln from Syndication Financing (start-up in 2001) Ranking 1 st in the Italian Gov. Bonds primary market with 8.4% market share Ranking 1 st Italian issuer in Corporate Bond League Table CORPORATE BANKING FIXED INCOME TRADINGLAB KEY HIGHLIGHTS (3) Balance due to Euro Capital Structures, operating as Agent in the securitisation business

26 26 2001 Average daily VAR (1) 4.3% down vs 2000 (Euro 4.4 mln vs Euro 4.6 mln) 11 Trading days with negative P&L before September 11 th ; 16 after September 11 th ; no negative daily P&Ls in 2002 up to end of February No negative outliner RESILIENCE TO MARKET STRESS PROVED BY STABILITY OF POSITIVE DAILY P&Ls FROM TRADING ACTIVITIES Daily VAR (1) and P&L UBM+TL (Jan. 2001 - Feb. 2002) Euro mln Daily VAR and P&L UBM+TL Daily P&LVaR (1) Figure relates to UBM and TL combined; calculation made with a 98-99% asymmetric double tail confidence interval

27 27 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

28 28 Best performance in Pioneer US’ history for gross and net sales in 2001, despite bad market conditions SUCCESSFUL TURNAROUND OF INFLOWS IN USA IN THE FIRST YEAR AFTER ACQUISITION... 1,019 1,361 2,166 2,287 3,430 3,283 2,751 3,838 1,000 2,000 3,000 4,000 5,000 19941995199619971998199920002001 PIONEER US - Gross Domestic Sales 0 USD mln 563 629 1,000 506 1,189 -251 -1,740 1,231 -2,000 -1,000 0 1,000 2,000 19941995199619971998199920002001 PIONEER US - Net Domestic Sales USD mln Euro 673 mln net sales in the first two months of 2002 Euro 21.7 bn AuM as at end 2001; Euro 22.4 bn as at 28.2.2002 Increased market shares in USA: 1.32% (+5 bp) on total AuM (1) ; 1.98 (+14 bp) on Equity AuM (2) (2) Year-end figures (1) Non Proprietary Long Term Assets

29 29 Leadership in the institutional segment thanks to a strong contribution from life insurance and pension products marketed to institutional customers (Insurance +13.1%; pension funds +39.0% vs 2000) Increased market shares (2) in Italy (from 13.33% in Dec00 to 13.56% in Dec01) and Poland (from 19.7% to 24%) Excellent turnaround of inflows in the “International” business area: +596 Euro mln in 2001, +561 in 2002 first two months vs -414 Euro mln in 2000... AND GOOD RESULTS IN ALL THE COUNTRIES WHERE PIONEER OPERATES THROUGH THIRD PARTY DISTRIBUTORS TOTAL New Europe International (Euro mln) 2,683 1,044 Italy +596 +408 +561 +37 3,370 1,071 2001 Net sales Institutional (2) 5,7335,843 10,2839,460 +1,048 +2,052+775 +177 Dec ‘01 AUM 2002 Net sales (1) 28.2.’02 AUM (1) (1) January and February 2002 - Management accounts Pioneer TOTAL AuM as at 31.12.2001: Euro 111.0 bn Pioneer TOTAL AuM as at 28.2.2001: Euro 111.6 bn (2) Market shares in mutual funds including institutional and retail customers Pioneer TOTAL net sales in 2001: Euro 3.0 bn

30 30 Total Revenues 2001 Operating costs Gross operating income Net Profit (3) 483.9 378.4 105.6 58.2 (Euro mln) +3.9% Vs. 2000 pro-forma (1) thanks to successful turnaround of inflows and focus on high margin products (i.e. Capital Guaranteed) Costs impacted by non recurring restructuring charges, interest expenses (2) and advertising campaigns to relaunch Pioneer brand Gross operating income affected by impact of turnaround costs Net Profit also affected by increased reserves and very conservative approach to tax provisions (1) Pro-forma based on UCI estimates (not accounting figures) including Pioneer USA results (for the whole 2000) in 2000 Pioneer Group’s income statement PIONEER HAD A GOOD INCREASE IN REVENUES (ON A PRO-FORMA BASIS); C/I RATIO AFFECTED BY THE COSTS OF TURNAROUND Trend Vs. 2000 Percentage changes over 2000 reported figures are not meaningful because of differences in consolidation perimeter (3) Contribution to UCI Group’s Net Profit (2) Interest expenses related to financing of goodwill

31 31 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

32 32 BRILLIANT ECONOMIC RESULTS … +43% OPERATING INCOME GROWTH (+31% at fixed FX), THANKS TO: Revenue generation (+21% y/y, +11% at fixed FX) and diversification (Net non Interest Income/Total Revenues 39%,+2.5 p.p. y/y) Strict cost control (C/I Ratio down by 8 p.p. to 48.9%) NEW EUROPE BANKING: KEY HIGHLIGHTS … IN A LESS FAVOURABLE THAN EXPECTED 2001 ENVIRONMENT (TO IMPROVE IN 2002) Economic slowdown in Poland (1,1% real GDP growth in 2001 vs 4.0% in 2000) while growth in other countries remained strong Strong reduction of Polish interest rates (-750 bp in 12 months) STRONG PERFORMANCE OF THE DIVISION ALSO PROVEN BY: Outperformance of Bank PEKAO vs. major competitors Increased contribution of other banks MORE AND MORE AN IMPORTANT GROWTH FACTOR FOR UCI Macroeconomic environment sustains accelerated growth Further restructuring opportunities available New acquisition in the pipeline to fuel further growth CAPITAL GAIN ON SPLITSKA (over Euro 34 mln gross of tax effect with 60% gross return on 1.5 years) PROVIDES TANGIBLE EVIDENCE OF NE STRATEGY

33 33 Net Interest Income 2000 2001 552 787 1,275 1,541 56.7% 48.9% Operating Income Total Revenues Cost/Income 2000 2001 812 943 464 599 Non Net Interest Income 2000 2001 +43% +21% +16% -7.8 pp (Euro mln) OPERATING INCOME UP 43% Y/Y AND NET INCOME GROWTH AT +53% Y/Y (+31% AND +42% AT END 2000 FX RESPECTIVELY) +31% +11% +6% +29% +18% -2.400 HEADCOUNT VS 2000: Implementation of outsourcing opportunities Incentivised exits, management of turnovers STRICT COST CONTROL Tight procurement, centralised purchasing Real estate restructuring Full scope contract renegotiation At end 2001 FX At end of period FX (1) * Calculated on end of period data VOLUMES GROWTH: Gross Customer Loans: +17,3% yoy * Customer Deposits: +16,6% yoy * COMMERCIAL ACTIONS: Active and rapid Repricing Increased sales productivity NEW VALUE ADDED PRODUCTS INTRODUCED Structured CD Asset Management products Credit Cards and Payment Services (1) Exchange ratio of 31 dec 01 for 2001, exchange ratio of 31 dec 00 for 2000

34 34 NEW EUROPE BANKING NET INCOME – UCI’s PORTION: EURO 227.3 mln (+35% y/y) SPLITSKA 5% (Euro 10.9 mln) BULBANK 14% (Euro 30.9 mln) INCREASED CONTRIBUTION TO DIVISION’S NET INCOME FROM BULBANK, SPLITSKA AND POL’NOBANKA THANKS TO RESTRUCTURING (1) At Unchanged FX (2) For 2000 Bulbank Net Profit net of € 79 mln (pre tax) extraordinary income from UBB disposal GROUP PEKAO 80% (Euro 183.3 mln) POL’NOBANKA 1% (Euro 2.2 mln) Total Division Net Income – % y/y growth (1) ROE, % Splitska Pol’no Banka Group Pekao Bulbank n.s. 9.0 +175 23.8 +80 (2) 14.722.222.2 +53 C/I Ratio, % 68.268.248.045.948.7 C/I Ratio – p.p. Ch. on 2000 -13.7-6.9-5.2-5.2-7.9-7.9 +81 (2) 21.1 48.9 -7.8-7.8 ROE – p.p. Ch. on 2000 n.s.+13.5+6.6 (2) +2.6 +5.5 (2) RARORAC, % 1.81.817.929.723.5 17.7

35 35 BANK PEKAO OUTPERFORMS ALL MAJOR COMPETITORS THANKS TO ADEQUATE REPRICING AND TIGHT COST CONTROL y/y % growth (1) Pekao 65 Net Income -29 Best perf. Pekao Banking System (3) Pekao 20 46 Net Commissions 17 Best perf. BH Banking System (3) (1) Calculated on data based on Polish accounting standards at unchanged FX; all data are unconsolidated (2) Salaries, statutory employment costs, Non-personnel costs, Taxes and charges, Contribution and payment to Bank, Other costs (3) Considered Kredyt Bank, BSK, LG Petro Bank, BZWBK, BRE, BH, BPH + PBK, BOS, BIG BG, Fortis Bank (not included Pekao) Pekao 77 Net Interest Income -6 Best perf. Pekao Banking System (3) Pekao -4 Overheads costs (2) 18 Best perf. Pekao Banking System (3) 65

36 36 OVERALL ASSET QUALITY OF THE DIVISION PRESERVED DESPITE ECONOMIC SLOWDOWN IN POLAND THANKS TO PEKAO’S SELECTIVE LENDING POLICY AND EFFECTIVE RECOVERY ACTIONS % Ch. (Fixed FX) 2000 (1) Total loan loss provisions /Total gross loans (2) Total specific provisions for doubtful loans/ Total gross doubtful loans (3) Internal estimate based on Pekao’s current portfolio situation (4) Due to restrictive Polish regulation based on financial ratios and risky sectors 2001 (Euro mln) WE ARE PROMPTLY REACTING THROUGH: Conservative lending policy Implementation of new lending rules and procedures and active monitoring Effective recovery actions KEY HIGHLIGHTS Coverage ratios -on Total gross Loans (%) (1) -on Total gross doubtful loans (%) (2) +0.7 -3.3 9.7 59.4 10.4 56.1 Good coverage ratios, although negatively impacted by write-offs Volumes Total gross loans9,845+7.411,552 Gross NPL916+25.41,241 Gross NPL/Tot. gross loans (%) Net NPL/Tot. net loans (%) 9.3+1.4 1.4+1.0 10.7 2.4 Selective and conservative lending policies Deterioration of asset quality mainly due to the economic slowdown in Poland in 2001 Approximately 25% (3) of Doubtful Loans with no payment delays (4)

37 37 IN AN INTERNATIONAL SLOWDOWN SCENARIO NECs SHOW A STRONGER GROWTH (COMPARED TO USA AND EUROZONE) WITH A DECREASING RISK Good GDP growth above both the Eurozone and the USA (1) UCI – FBD (2) J.P. Morgan EMBI Global (Emerging Market Bond Index) (3) UCI - FBD- Average S&P’s NEC’s Country Rating weighted on GDP (4) Average of first two months of 2002 Real % GDP Growth (1) BBB BBB- 194 bp 208 bp 254 bp 250 bp 1999200020012002 (4) Decreasing risk supported by economic stability, inflation and budget deficit control EU accession process accelerated as a result of Nice meeting leading very likely to EU entrance in 2004, and thus contributing to a virtuous economic cycle S&P’s NECs Rating (3) Average yearly spread of Polish sovereign debt vs Treasury (2)

38 38 POSITIVE MARKET ENVIRONMENT AND EXPLOITMENT OF FURTHER RESTRUCTURING OPPORTUNITIES WILL SUPPORT DOUBLE DIGIT INCOME INCREASE Increase in salesforce productivity Divisionalisation (Corporate, Affluent / SMEs, Mass Market) to lead to improved commercial effectiveness Product range enlargement to develop higher value added products and increase fee contribution (Asset management, Structured Products, Life Insurance in Retail; Forex,Trade Finance and Derivatives in Corporate) Possible launch of focused initiatives (with dedicated sales force) to reinforce leadership in Affluent segment Rebranding and relaunch of Pol’nobanka activities (to be renamed UniBanka in April 2002) SUSTAINED REVENUES GROWTH Common business models and standard applications New IT system in Pekao and Bulbank leading to higher effectiveness and efficiency NEW IT SYSTEM Ongoing cost control initiatives supported by further cost reduction driven by economies of scale Development of regional credit card processing operation Centralised IT purchase COST CONTROL Full redesign of credit process Development of focused/state of the art rating and scoring system CREDIT PROCESS IMPROVING

39 39 2001 Key Highlights (1) SUCCESSFUL COMPLETION OF THE ZAGREBACKA DEAL Successfully completed tender offer for ZaBA Total shareholding of Consortium: 80% Mandatory cash offer for outstanding voting shares expected to be launched on 15 March 2002 Splitska sold to allow completion of Zagrebacka deal generating Euro 34 mln gross capital gain and 60% gross return in 1.5 years Strategic Rationale 2004 EPS accretion of 1.8% (3) at group level Operating income:378.2 Pre-tax income:84.5 Total assets:6,723 Branches (2) :237 Customers (2) :1,3 mln Market share deposits (2) :36% Undisputed leading bank in Croatia and Bosnia-Herzegovina One of the most efficient and best performing banks in the region Natural platform for further regional expansion (1) Euro mln, Kune/Euro FX: 7.14 as at 8th March (2) Number of total group branches as at 1H01 (3) Based on net effect of UCI acquiring an 85% shareholding in ZaBa and disposal of Splitska banka

40 40 2001 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions Agenda

41 41 SUMMING UP: 2001 GROUP HIGHLIGHTS Italian Banking: Corporate, Small Business and Mass Market counterbalance the Private and Affluent results hit by negative market conditions Investment Banking: strong revenue increase in countercyclical products for corporate and institutional customers more than offsets the decline in traditional Investment Banking New Europe: revenue growth led by increased volumes and commercial actions (distribution of new value-added products) with improved efficiency STRATEGIC VISION AND RAPID ACTIONS: S3 project enhances UCI’s competitive advantage and value creation SOUND COST CONTROL: Cost Income Ratio at 52.7%, 47.8% at structural level GOOD REVENUE GENERATION AND INCREASED PROFITABILITY SUPPORTED BY A WELL BALANCED REVENUE MIX:

42 42 Annexes

43 43 2001 CONSOLIDATED INCOME STATEMENT Net extraordinary income Net interest income (incl. dividends) Net non interest income Total revenues Operating income Tax rate, % Net loan loss provisions 2000 % ch. Administrative costs (incl. depr.) Net income +4.2 4,571 4,747 9,318 903 100 +6.4 +8.1 +7.2 1,395 -5.5 +131.0 4,752+10.8 4,566+3.5 Other net provisions* 355 +9.6 43.6 Goodwill depr. 115+140.9 2001 43.2 5,049 4,940 9,989 5,263 4,726 853 231 1,454 389 277 (Euro mln) Minorities 463 +8.0 500 Taxes 1,435 +3.4 1,484 (*) Including provisions to general banking risk fund

44 44 GOOD ASSET QUALITY CONFIRMED DESPITE THE SLOWDOWN IN ECONOMIC ACTIVITY TIER 1 ratio 2001E Coverage ratios -on total gross NPL, % -on tot. Gross doubtful loans, % Total gross doubtful loans y/y % change Italian banks ‘00‘01 New Europe banks Other (2) Group ‘00‘01‘00‘01‘00‘01 Gross NPL y/y % change Gross NPL/Tot. Gr. Loans,% Net NPL/Tot. Net Loans,% 3,3792,761 (1) 9161,2413412454,6364,247 -18.3+35.5-28.2-8.4 3.42.79.310.71.81.73.93.5 1.81.51.42.40.6 1.71.5 4,9684,309 (1) 1.5452,0775154577,0286,843 -13.3+34.4-11.3-2.6 47.546.386.879.667.264.956.8 39.337.859.456.153.445.244.4 Coverage ratios are satisfactory. Securitisation deal impacts on the mix of doubtful loans (lower weight of non-performing loans with higher coverage ratios and higher weight of watchlist with lower coverage ratios) Total capital ratio 7.17% 10.50% (1) In 1H01 Cariverona and Mediovenezie carried out a securitisation of Gross NPL for Euro 660 mln (Euro 250 mln net of write downs) (2) Mainly Locat, UniCredit Factoring and Parent Company Net Doubtful Loans/Tot. Net Loans,% 3.33.23.12.77.18.81.11.5 60.0 (Euro mln) Italian Banks Division’s asset quality substantially better than industry (Gross NPL ratio at 2.8% compared to 4.7%) 57.1

45 45 LOW LENDING EXPOSURE VERSUS HIGH RISK SECTORS AND COUNTRIES High risk sectors (relative to the economic trend) High risk countries 4,303 (1) Euro mln2001 138 (2) Low lending exposure to South America (0.1% of 2001 gross customer loans):  Euro 39.5 mln Argentina  Euro 41.1 mln Cile  Euro 24.1 mln Venezuela  Euro 33.2 mln Brazil Low lending exposure versus sectors with high conjunctural risk (4.7% of 2001 performing loans):  Euro 98 mln Aeronautics  Euro 312 mln Insurance  Euro 2,008 mln Leisure and Entertainment  Euro 1,171 mln Telecommunications  Euro 714 mln Telecom equipment manufactures (1)Based on Bank of Italy matrix account and related to 7 banks, BMC and BMV (2)Of which Euro 42.9 mln guaranteed primarily by SACE

46 46 RESULTS BREAKDOWN BY DIVISION Italian banking Wholesale banking New Europe banking New Initiatives Corp. Centre & elisions Group total Interest margin (incl. div.) 4,0175,049-209422108 Net non interest income 3,8014,9401,11759922-599 Total revenues 7,8189,9891,0971,54124-491 Administrative costs (incl. depr.) 3,8625,26359575483-31 Operating income 3,9564,726502787-59-460 Net provisions and other costs 6291,242262072378 Tax expenses 1,3921,484183164--255 Net income for The Group 1,6691,454274227-61-655 of which: Staff 2,0903,04529138513266 Goodwill depreciation -277--- Net income 2,0021,954290410-61-687 Extraordinary Income +67+231-3-6-+173 (Euro mln)

47 47 APPENDIX ON ASSET QUALITY FOR ITALIAN BANKING The Default Likelihood is based on internal calculations, taking into account historical trends of NPL, doubtful loans and watch- list loans, sector historical trends and expectations Low default likelihood - main sectors included: Metal products Farm & industrial machinery Other industrial products Electrical materials & supplies Energy products Other sales-oriented services Medium default likelihood - main sectors included: Commercial services Textile leather & clothing Food beverages & tobacco High default likelihood - Sectors included: Construction and public works TMT Transport related services

48 48 UBMT.Lab ASSET MANAGEMENT (Pioneer+UCI Capital Italia) Interest margin (incl. div.) 11.4-13.4-2.0-18.5-20.5 Net non interest income 391.2212.2612.3505.01,117.3 Total revenues 402.6198.7610.3486.51,096.8 Administrative costs (incl. depr.) 138.474.1216.2378.4594.6 Operating income 264.2124.6394.1108.1502.2 103.2 -0.5-2.8-0.5-3.3 Net income for The Group 143.471.1216.058.2274.3 of which: Staff 69.123.192.6198.4291.0 Net income 143.471.1218.371.9290.2 Extraordinary Income -1.3 50.8154.628.3182.9 (Euro mln) TOTAL INVESTMENT BANKING* TOTAL WHOLESALE BANKING Tax expenses C/I Ratio, % 34.437.335.477.854.2 WHOLESALE BANKING DIVISION INCOME STATEMENT (*) Balance due to Euro Capital Structures (52% owned by UBM)

49 49 THE COOPERATION WITH UBM AND TRADINGLAB RESULTED IN A SOUND SUCCESS FOR CAPITAL GUARANTEED PRODUCTS CAPITAL GUARANTEED PRODUCTS: EURO 7.46 Bn NET INFLOWS IN 2001*, MORE THAN EURO 8.7 Bn FROM LAUNCH TO FEB. ‘02 (1) Net of Euro 91 mln. inflow from a joint BANK PEKAO / TRADINGLAB Capital Protected Note issued in October DIFFERENT PRODUCTS - ONE COMMON CONCEPT Freedom for the asset manager; equity up to 60% of total capital invested Low cost of the guarantee Low capital absorption (according to B.I. standards) ADVANTAGES FOR THE WHOLESALER Higher equity content of AUM Higher market share in wealth management 1,242 731 16 2,734 868 386 1,000 2,000 (Euro mln) 0 2Q’013Q’014Q’01Jan-Feb. 2002 Segregated Accounts Unit Linked (UNISTAR) 1Q’01 465 386 632 703 165 146 Fund, Equity & Index Linked Notes 3,000 4,000 Tot: 1,018 Tot: 465 Tot: 1,989 Tot: 3,988 Tot: 1,273

50 50 NEW EUROPE BANKING: RESULTS BREAKDOWN BY BANK Interest margin (incl. div.) Net non interest income Total revenues Operating costs (incl. dep.) Net operating income Net income ROE Cost/income (excl. goodwill dep.) - Staff costs - Other costs TOTAL (1) SPLITSKA BANKA (62,6%) POL’NO BANKA (72,4%) Group PEKAO (53,2%) BULBANK (85,2%) 823514721942 599 1 541 754 787 410 21,1% 48,9% 13 34 23 11 3 9,0% 68,2% 18 65 31 34 18 23,8% 48,0% 23 74 34 40 14,7% 45,9% 545 1 368 666 702 22,2% 48,7% 353 38591714345 36914 20321 Net loan loss provisions 185 5126*174 Tax Rate 28,6%16,0%20,9%29,6%46,6% Capital Absorption RARORAC Value Creation (Euro mln) (UCI stake) 36 Net income (UCI’s portion) 227,32,210,9183,3 30,9 1.27265941.08329 12282551 226 17,9%29,7%23,5%1,8% 17,7% (*) Writeback (1) Balance due to roundings and elisions

51 51  Monetary policy from expansionary to restrictive in 2002:after the wait and see policy in the first months of 2002, the EBC might revise up its stance by year end in line with the expected recovery (Refi rate at 3,25% in Dec.’02 as at in Dec.’01)  Customer Deposits (domestic banking business): growth expected to moderate its pace (+4% current accounts in 2002 vs +9.5% in Dec.’01). Stock markets recovery will lower households’ risk aversion reducing their liquidity preference and increasing AuM business (+4,9% Mutual Funds * stock in 2002 vs –6,2% in 2001)  Customer Loans (domestic banking business): further slowdown in 2002, but still increasing (5% vs. 7,7%)  Interest rates average banking spread is expected to end this year at the same level as in Dec.’01, but narrowing on 2002 average (4.44% vs 4.57%) due to the very low rates reached in the 1Q’02  The business cycle is expected to improve at a moderate pace (real GDP +1.4% in Italy in 2002, +1,6% in Europe and +1,5% in US)  Financial markets are turning up in line with stronger than expected Us economic figures, but volatility remains high (+3% the market effect of AuM expected for 2002) AFTER A DIFFICULT 2001 WE EXPECT A MORE FAVOURABLE SCENARIO THIS YEAR ALREADY SUPPORTED BY SIGNS OF RECOVERY TREND OF MAIN ECONOMIC INDICATORS * Total funds managed by Italian asset managers


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