An introduction to the UBI Banca Group - August 2015
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Disclaimer This document has been prepared by solicitation, offer, invitation or Group, please refer to publicly available Unione di Banche Italiane Scpa (“UBI”) for recommendation to purchase, subscribe or information, including Annual, Quarterly informational purposes only. sell for any investment instruments, to and Interim Reports. It is not permitted to publish, transmit or effect any transaction, or to conclude any By receiving this document you agree to be otherwise reproduce this document, in legal act of any kind whatsoever. bound by the foregoing limitations. whole or in part, in any format, to any third This document may contain statements party without the express written consent that are forward-looking: such statements Please be informed that some of the of UBI and it is not permitted to alter, are based upon the current beliefs and managers of UBI involved in the drawing manipulate, obscure or take out of context expectations of UBI and are subject to up and in the presentation of data any information set out in the document. significant risks and uncertainties. These contained in this document either The information, opinions, estimates and risks and uncertainties, many of which are participated in a stock option plan and were forecasts contained herein have not been outside the control of UBI, could cause the therefore assigned stock of the company or independently verified and are subject to results of UBI to differ materially from those possess stock of the bank otherwise change without notice. set forth in such forward looking acquired. The disclosure relating to They have been obtained from, or are statements. shareholdings of top management is based upon, sources we believe to be available in the half year and the annual reliable but UBI makes no representation Under no circumstances will UBI or its reports. (either expressed or implied) or warranty affiliates, representatives, directors, on their completeness, timeliness or officers and employees have any liability accuracy. whatsoever (in negligence or otherwise) for Nothing contained in this document or any loss or damage howsoever arising expressed during the presentation from any use of this document or its Methodology constitutes financial, legal, tax or other contents or otherwise arising in connection All data are as at 30th June 2015 unless advice, nor should any investment or any with the document or the above mentioned otherwise stated. other decision be solely based on this presentation. document. This document does not constitute a For further information about the UBI 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. Birth of the “BPU Birth of the “Banca Birth of the “Società Acquisition of Banca Group” from Mutua Popolare per la Stagionatura e “Banca the integration of della Città e Acquisition of “Banca l’Assaggio delle Sete Carime” by BPB-CV and BPCI 1st April 2007 Provincia di Popolare di Ancona” ed Affini” Merger of BPB and BPCI 2003 Birth of Bergamo” , (BPA) by BPB-CV. Birth of subsequently “Credito Varesino” 2001 “UBI Banca” subsequently the BPB-CV Group renamed “Banca (BPB-CV) following the renamed “Banca 1996 Popolare 1992 merger of the Popolare di Commercio e BPU Banca Bergamo” (BPB) Industria” (BPCI) Group and the 1869 1888 Banca Lombarda e 2000 Piemontese Acquisition of “Banca Regionale Group Europea”* by Banca Lombarda. 1998 The Group takes the name of Merger of CAB and BSPB “Banca Lombarda e Piemontese 1963 with the creation of “Banca Group” 1888 BSPB acquires Lombarda” as parent 1883 Birth of the “Banca “Banca di Valle company and contribution of Birth of the San Paolo di Camonica” (BVC) branch network of CAB and “Credito Agrario Brescia” (BSPB) BSPB to “Banco di Brescia”0 Bresciano” (CAB) * Banca Regionale Europea was created in 1994 following the merger between “Cassa di Risparmio di Cuneo” and “Banca del Page 3 Monte di Lombardia”
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) 55.2 35.3 #3 Market Capitalisation* as at 27th August 2015 6.5 (EUR bln) 5.7 Source: “Il Sole 24ore” – Italian Financial Newspaper – 5.4 Dated 28th August 2015 4.2 3.8 * Total shareholders (voting and non voting) number around 155,000 Page 4
UBI Banca and its Peers No. of branches as at 30th June 2015 Total assets as at 30th June2015 (€ bln) 7,121 875 5,608 668 2,223 #5 1,813 1,530 178 #5 1,274 654 125 119.5 61 49 Customer loans as at 30th June 2015 (€ bln) Total direct funding as at 30th June 2015 (€ bln) 581 474 365 344 #4 #4 117 126 94 85 80 84 43 33 46 37 Page 5 Source: Press releases.
The Group Structure 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...) NETWORK BANKS MAIN PRODUCT COMPANIES 100.00% 350 branches ASSET MANAGEMENT UBI Pramerica 100.00% (partnership with Prudential US) 288 branches FACTORING UBI Factor 83.76% (1) Northern 196 branches Italy LEASING UBI Leasing 74.77% (2) 208+3* branches LIFE BANCASSURANCE Lombarda Vita (partnership with Cattolica) Aviva Vita Spa 66 branches 84.13% (3) Aviva Assicurazioni Vita Spa Central 99.54% 208 branches Italy Southern 216 branches 99.99% Italy ** 21 branches, ~ 772 financial advisors 100.00% 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 1) moreover, 16.24% of capital held by Fondazione Banca del Monte di Lombardia Page 6 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 7
Presence in Italy Introduction to the UBI Banca Group: Predominant Retail Business and Strong Northern Italian Franchise 1 9 Approx. 3.6 million clients, mainly retail 1 759 27 1,557 branches, of which 759 in Lombardy (which 169 38 43 generates over 20% of Italian GDP) 7 80 Market share in terms of branches above 20% in 18 some of the richest Provinces such as Bergamo, 106 17 Brescia and Varese 6 Current 94 Market Shares* 78 Branches accounts Loans % & deposits 19 1 Bergamo 22.4 30.5 40.7 84 Brescia 21.9 26.7 34.8 Varese 24.3 28.0 23.2 Cuneo 20.3 17.9 15.5 National market share of 5.1% in terms of branches 1,557 branches in Italy + 6 branches abroad * Market shares calculated as at 31st March 2015 in terms of branches and as at 31st December 2014 in terms of volumes. As at 30th June 2015 Page 7
Agenda UBI Banca International Network International Network Presence in the world Page 8
International Network COMMERCIAL BANKS SUBSIDIARIES REPRESENTATIVE FOREIGN BRANCHES FOREIGN BRANCHES OFFICES MENTON, NICE AND ANTIBES KRAKOW (Banca Regionale Europea) MOSCOW SAO PAULO (UBI Factor) SHANGHAI SHANGHAI MUMBAI (Zhong Ou Asset Management Company) VIENNA HONG KONG (Business Consultant) NEW YORK DUBAI (Upcoming opening 2015) FOREIGN BANKS Head office in Luxembourg SUBSIDIARIES BRANCHES UBI TRUSTEE SA LUXEMBOURG (Luxembourg) MADRID MUNICH Page 9
2015 upcoming opening of Representative Office New York Presence in the world Munich Krakow UBI Banca International UBI Factor Branch Branch Vienna Business Consultant Moscow Representative Office Luxembourg • UBI Banca International • UBI Trustee SA • UBI Management Co SA Shanghai Representative Office Antibes, Menton, Nice Banca Regionale Europea Shanghai Zhong Ou Asset Management Branches Company Co. Ltd* Madrid Hong Kong UBI Banca International Representative Office Branch Dubai Mumbai São Paulo Representative Office Representative Office Representative Office * Joint-venture in which UBI Banca holds 35% of the total share. Page 10
Agenda Contacts UBI Banca Correspondent Banking Representative Offices Contacts Page 11
Sergio Passoni UBI Banca Head of Global Transaction and Operations Isabella Moavero - Head of Correspondent Banking and Representative Offices Correspondent Banking - correspondent.banking@ubibanca.it Alistair Newell Relationship Manager • Indian Subcontinent, China & Far East, Oceania alistair.robert.newell@ubibanca.it Ernst Rolf Hartmann Relationship Manager • North America, Central America, South America, ernst.rolf.hartmann@ubibanca.it Caribbean, Israel Lorenzo Tassini Relationship Manager • Turkey, Middle East, Africa lorenzo.tassini@ubibanca.it Marco Camozzi Relationship Manager • Global Players – Responsible for relationships with multi- marco.camozzi@ubibanca.it regional banking groups & Special Projects Riccardo Rossi van Lamsweerde Relationship Manager • Europe & CIS Countries riccardo.rossi.van.lamsweerde@ubibanca.it Page 12
Representative Offices Contacts DUBAI MUMBAI HONG KONG SHANGHAI (since Aug 2015) Mr Andrea Croci Ms Lu Bo Mr Luigi Landoni Ms Rajeshree Balsari hongkong@ubihk.com office@ubibanca.sh.cn Office 113, Level 1, Tower 1 mumbai@ubibanca.com Al Fattam Currency House, Suite 2911, Tower Two, The Center Dubai Intl Financial Centre 92 Mittal Chambers, 9th Floor, Times Square 1, Matheson St. - Suite 3304 Dubai, UAE Nariman Point, Causeway Bay Hong Kong - 989, Changle Road P.O. BOX 506989 400 021 Mumbai - India S.A.R. 200031 Shanghai – China Tel. +91 22 22023601 Tel +971 4 3277289 Tel. +852 2878 7393 Tel +86 21 61675333 Fax +971 4 3277290 Fax +91 22 22023603 Fax +852 2878 7932 Fax +86 21 61675582 MOSCOW SAO PAULO VIENNA (Business Consult.) Mr Ferdinando Pelazzo Mr Isidoro Guerrerio Ms Annick Stockert moscow@ubibanca.com saopaulo@ubibanca.com annick.stockert@esterni.ubibanca .it 10, Nikolskaya str., 4th floor, Al. Ministro Rocha Azevedo, Business Centre “Nikolskaya 456 Ed. Jaù - 4° And.Cj.402 Seilerstätte 16/11 Plaza” CEP 01410-000 São Paulo - 1010 Vienna 109012 Moscow - Russia Brazil Austria Tel. +7 495 725 4466 Tel. +55 11 3063 0454 Tel. +43 1 514 37 26 Fax +7 495 725 4465 Fax +55 11 3063 3785 Fax +43 1 514 37 60 Page 13
Agenda Annex Foreign Banks Product Companies Group Results Group BIC codes Page 14
Product Companies 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 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 Page 15 Data as at 30.06.2015 unless otherwise stated
Other foreign Banks 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 Qualified and specific services offered to Corporate and Private customers Page 16
UBI Banca’s profile in a snapshot: predominant retail business, solid capital base and low risk profile 1st Italian cooperative banking Group by market capitalization Strong EUR 85.3 bn customer lending and EUR 94.3 bn direct funding (loan/deposit ratio: 90.5%) competitive As at 30 June 2015, 81% of loans to customers were granted in Northern Italy, 10.7% in Central Italy positioning 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: Solid Capital CET 1 ratio phased in: 12.94% vs. 9.5% SREP requirement CET 1 ratio fully loaded under Basel 3 rules: 12.33% and Balance Sheet Position 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 Good asset quality compared to the Italian banking system Quality Annualised cost of credit of 91 bps of total loans vs. 98 bps of Italian Peers** Focus on traditional banking activities: Customer loans/total assets at 71.38% Low Risk Profile 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 Figures as at 30th June 2015 unless otherwise stated Page 17 * Data referred to banking perimeter only. ** UCG, ISP, BP, MPS, BPER and BPM
The UBI Banca Group: consolidated results as at 30th June 2015 MAIN INCOME STATEMENT ITEMS 1H14 1H15 % change Profit net of non recurring items to 136 million, the Figures in € mln 1H15 vs 1H14 highest half year results since 2H2008 Net interest income 909 847 (6.8%) Stated Profit for the period to 124.4 million (+17.2% Net commission income 610 669 9.7% vs 106.2 in 1H2014) Net result from finance 137 111 (18.7%) Profits from equity-accounted investees, include 8.5 mln/€ from Zhong Ou in Profits of equity-accounted investees 21 20 (5.3%) 1H15 (vs. 0.7 mln/€ in 1H14) thanks to strong growth in AuM reaching close to Other income items 60 62 2.7% €18 billion at end June15 Operating income 1,736 1,709 (1.6%) OUTLOOK Staff costs (648) (655) 1.1% Other administrative expenses (311) (313) 0.6% The actions undertaken in the first half and the expected progressive Net impairment losses on property, equipment and investment improvement in the macroeconomic environment should allow a further (85) (78) (8.7%) increase in new grants of loans in the second half of the year in order to counter property and intangible assets the strong competitive pressure on pricing. Operating expenses (1,044) (1,046) 0.1% Net fee and commission income should benefit year-on-year from positive Net operating income 692 663 (4.1%) trends expected for assets under management and insurance and from possible Net impairment losses on loans (429) (389) (9.3%) growth in fees and commissions associated with the trend for lending. Net impairment losses on other financial assets and liabilities (2) (3) 67.3% The continuation of the favourable evolution of the general macroeconomic Net provisions for risks and charges (3) (29) n.s. environment and, hopefully, the absence of further tensions in the more critical Profits (losses) from disposal of equity investments (0) 0 n.s. 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. Pre-tax profit from continuing operations 257 242 (6.0%) Actions planned for 2015 allow to confirm our objective of containing operating Taxes on income for the period from continuing operations (135) (99) (26.8%) expenses in line with those for 2014, notwithstanding the additional costs in Profits for the period attributable to non-controlling interests (16) (17) 8.7% relation to the contribution to the European Resolution Fund and the Deposit Charges for exit incentives Guarantee Scheme, estimated at over €30 million for the entire year and which (1) n.s. will be recognised in the item “other administrative expenses” once final (net of tax and non-controlling interests) quantification, expected before year-end, is received. Profit for the period 106 124 17.2% The improvements in the macroeconomic environment and the exit from Profit for the period NET OF NON-RECURRING ITEMS 131 136 3.9% recession, recently confirmed by the principal economic research institutes, should allow loan losses to be contained at a level lower than in 2014 Page 18
Group BIC codes BEPOIT21 BCABIT21 BREUITM1 BLOPIT22 POCIITM1 BPAMIT31 CARMIT31 BVCAIT21 BLPIIT21 UBIBESMM Madrid Branch CABILULL BEPODEMM Munich Branch BIC ACTIVE BIC NON ACTIVE Page 19
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