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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

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. 30.06.2004. 30.06.2005. Var. pro-forma. GROUP NET INCOME. 61.6. 49.8. 23.7%. Total income. 598.7. 571.3. 4.8%. Operating profit. 205.7. 186.2.

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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

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

  2. 30.06.2004 30.06.2005 Var. pro-forma GROUP NET INCOME 61.6 49.8 23.7% Total income 598.7 571.3 4.8% Operating profit 205.7 186.2 10.5% Pre-tax income 131.1 109.7 19.7% ROE (adj.) 14.5% 13.7% 80 b.p. COST / INCOME 63.5% 65.5% -200 b.p. Tier 1 ratio 5.2% 5.3% -10 b.p. 1H 2005 - Results at a Glance

  3. YoY change 1H 2005 Pre-Tax Income - Breakdown • 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 Infogroup’s income is due to its new repositioning within the Group • Tax collection services: delays in government refunds % weight € 142.4 mn. 2% 8% -4% 36% 58% Pre-tax income, goodwill excluded *B. CR Firenze, CR Pistoia, CR Spezia, CR Civitavecchia, CR Orvieto, CR Mirandola

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

  5. 1H 2005 Mark-up change YoY change 1H 2004 1H 2005 % Weight Total loans* 14,462 15,709 8.6% (0.17) Retail banks 11,478 12,392 8.0% 79% (0.14) Individuals 6,577 7,198 9.4% 46% (0.19) Corporates 4,901 5,194 6.0% 33% (0.10) Consumer credit 2,984 3,317 11.2% 21% (0.42) NII – Customer loans • 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 * Progressive average outstanding loans

  6. NII – Customer deposits • Higher contribution margin due to both volumes* and mark-down • current accounts re-pricing • individuals still lead but corporate mark-down is improving 1H 2005 Mark-down change YoY change 1H 2004 1H 2005 % Weight Total deposits* 14,680 15, 568 6.1% 12 bp Retail banks 13,939 14,646 5.1% 95% 9 bp Individuals 11,150 11,597 4.0% 76% 7 bp Corporates 2,789 3,048 9.3% 19% 11 bp Consumer credit 740 922 24.6% 5% 87 bp * Progressive average outstanding loans

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

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

  9. Var. stamps 1H ‘04 1H ‘05 1H ‘04 Var. Var. & duty excl. PF 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% Operative costs • 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

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

  11. 30.06.2005 31.12.2004 Shareholders' equity 1,151.4 1,152.5 Tier 1 capital 993.6 993.8 Tier 2 capital 901.4 893.0 Regulatory capital 1,805.3 1,796.7 Risk weighted assets 18,597.5 19,116.7 Tier 1 ratio 5.34% 5.20% Solvency ratio 9.71% 9.56% Capital ratios • Stable Tier 1 ratio as at 30.06.2005 • Findomestic Banca recorded with the equity method will strengthen capital ratios

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

  13. 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 First Time Adoption - Criteria • IAS/IFRS as per EU Commission ratifications released up until January 2005. IAS 32 and 39 are included.* • Value adjustments recognised in the shareholders’ equity (IFRS 1) * Modification of the existing standards, new standards and/or changes of interpretation which could arise may vary FTA impact.

  14. Impatto della FTA sul Patrimonio netto e sul Patrimonio di vigilanza Nota L’impatto 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 • No material impact on shareholders’ equity + € 42 million 1,193 1,151 Euro million

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

  19. A P P E N D I X

  20. 31.12.2004 IFRS New perimeter adj. IFRS adj. 31.12.2004 Fin. Assets held for trading (HFT) 712.8 24.2 17.6 754.6 Fin. Assets valued at fair value (FV Option) 0.0 0.8 1,781.1 1,781.9 Fin. Assets available for sale (AFS) 1,935.4 60.8 712.7 2,708.9 Fin. Assets held to maturity (HTM) 15.6 0.0 (15.6) 0.0 Amounts owing by banks 1,209.4 0.0 339.5 1,548.9 - doubtful loans 0.0 0.0 0.0 0.0 - in bonis loans 1,209.4 0.0 339.5 1,548.9 Customer loans 15,581.0 (47.6) (3,290.9) 12,242.5 - doubtful loans 372.7 (41.3) 0.0 331.4 - in bonis loans 15,208.3 (6.3) (3,290.9) 11,911.1 Hedging derivatives 46.3 95.4 0.0 141.7 Tangible assets 311.9 150.3 6.7 468.9 - instrumental assets 268.9 130.7 25.2 424.8 - investment assets 43.0 19.6 (18.5) 44.1 Intangibles assets 304.7 (0.7) (3.8) 301.6 - goodwill 268.2 (1.1) 0.0 269.3 - other intangible assets 36.5 (0.4) (3.8) 32.3 Fiscal assets 225.7 51.3 22.5 299.5 Partecipating interests in Group companies 45.8 11.3 252.7 309.8 Partecipating interests in affiliated companies 81.9 (9.2) 0.0 72.7 Other assets 894.1 (5.9) (72.1) 816.1 TOTAL ASSETS 21,364.6 332.1 (249.6) 21,447.1 FTA – Impact on balance sheet

  21. FTA – Impact on balance sheet 31.12.2004 IFRS New perimeter adj. IFRS adj. 31.12.2004 Trading financial liabilities 1,286.9 0.0 292.1 1,579.0 Fin. Liabilities recognized at amortized cost 17,160.5 97.8 (1,164.3) 16,094.0 Trading derivatives 0.0 31.1 0.0 31.1 Hedging derivatives 10.6 (0.7) (1.8) 8.1 Provisions for staff severance pay 172.7 23.1 (8.0) 187.8 Provisions for pensions 170.4 7.9 0.0 178.3 Tax provisions and other fiscal liabilities 126.0 83.7 (39.2) 170.5 Other provisions for risks and charges 77.7 (3.2) (3.4) 71.1 Put options owned by minority shareholders' of consolidated companies 0.0 174.7 0.0 174.7 Other liabilities 999.8 20.7 651.8 1,672.3 LIABILITIES 20,004.6 435.1 (272.8) 20,166.9 Minority interests 208.6 (144.9) 23.1 86.8 Share capital and share premium 704.0 0.1 0.0 704.4 Revaluation reserves 0.0 39.5 0.0 39.5 FTA reserve 0.0 (23.8) 0.0 (23.8) Other reserves 345.1 (11.1) 0.2 334.2 Net profit for the period 102.3 37.4 (0.6) 139.1 SHAREHOLDERS' EQUITY + Minority interests 1,151.4 41.9 0.1 1,193.4 TOTAL LIABILITIES 21,364.6 332.1 (249.6) 21,447.1

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

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

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

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

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

  27. AMOUNT LOAN RATE AVG. MATURITY Initial rate 5.0 years Mortgage loans 0 - 2,500 1.1 year 2,501 - 15,000 3.5 years Initial rate Weighted average NON PERFORMING Unsecured loans 15,001 - 50,000 5.8 years LOANS 6 years 50,000 - 250,000 7.2 years > 250,000 7.1 years as per expiry date with repayment scheme DOUBTFUL and RESTRUCTURED Initial rate LOANS without repayment scheme 10 months Customer loans – Evaluation Criteria • 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% • Problem loans: time-discounted recovery value has been determined as follows

  28. Put Options • 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. MAIN ADJUSTMENTS TO HFS FINANCIAL ASSETS Revaluation Depreciation Fondiaria-Sai 14.9 CR Forlì (28.6) Firenze Parcheggi 2.0 Engineering (1.7) Brain Technology 1.1 Sì Holding 2.3 Sanpaolo IMI 34.2 Others 1.0 (0.1) TOTAL 55.5 -30.4 Net revaluation 25.1 Financial assets - HFS

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

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