An introduction to the UBI Banca Group - March 2015
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An introduction to the UBI Banca Group March 2015
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 information, including Annual, Quarterly informational purposes only. or 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 otherwise reproduce this document, in legal act of any kind whatsoever. be 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 forecasts contained herein have not been outside the control of UBI, could cause the were therefore assigned stock of the independently verified and are subject to results of UBI to differ materially from company or possess stock of the bank change without notice. those set forth in such forward looking otherwise acquired. The disclosure They have been obtained from, or are statements. relating to shareholdings of top based upon, sources we believe to be management is available in the half year reliable but UBI makes no representation Under no circumstances will UBI or its and the annual 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) Nothing contained in this document or for 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 All data are as at 31st December 2014 advice, nor should any investment or any connection with the document or the unless otherwise stated. other decision be solely based on this above mentioned 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 2Background
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 18,000 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.
The said principles
UBI Banca is the only bank of the Group which is listed on the Milan Stock Exchange and included in the are equally applied
FTSE/MIB index. to listed and non-
listed popular banks
No one may hold shares amounting to more than 1% of the share capital (with the exception of collective
investment companies)
As at December 2014, voting shareholders number nearly 79,237*
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)
48.9
35.3
Market Capitalisation as at 5th March 2015 #3
(EUR bln) 6.3
Source: “Il Sole 24ore” – Italian Financial Newspaper – 4.9
Dated 6th March 2015 3.7 3.5 2.8
* *As at 19th May 2014 (ex dividend date), total shareholders (voting and non voting) number 152,000
Page 4UBI Banca and its Peers
No. of branches as at 31st December 2014 Total assets as at 31st December 2014 (€ bln)
7,616 844
5,867
646
2,226 #5
1,878
1,676
183 #5
1,274
706 123 122 61 48
Customer loans as at 31st December 2014 (€ bln) Total direct funding as at 31st December 2014 (€ bln)
561
471
360
339
#4 #4
120 126
93
86 80 87
44 32 46
37
Page 5 Source: Press releases.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 85.6 bn customer lending and EUR 93.2 bn direct funding (loan/deposit ratio: 91.9%)
competitive As at 31 December 2014, 81.5% of loans to customers were granted in Northern Italy, 10.2% in
positioning Central Italy and 8.3% in Southern Italy, while 72.5% of customer deposits came from Northern Italy,
12.6% from Central Italy and 14.9% from Southern Italy
Capital ratios as at 31 December 2014: CET 1 ratio (phased in): 12.33%; CET 1 ratio (fully loaded)
Solid Capital under Basel 3 rules: 11.5%
and Balance Leverage ratio under Basel 3 (tier one capital / (on- and off-balance-sheet assets)) is at 5.78% phased
Sheet Position in, 5.42% 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 LTRO/TLTRO)
Good Asset Good asset quality compared to the Italian banking system
Quality Cost of credit of 108 bps of total loans
Focus on traditional banking activities: Customer loans/total assets at 70.3%
Funding mainly from own customer base (over 80%); limited recourse to institutional markets
Low Risk Profile
Financial assets/total assets: 19%. Italian Govies represent approx.18% of total assets
Figures as at 31st December 2014 unless otherwise stated
Page 6 * Data referred to banking perimeter only.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...)
8 DOMESTIC NETWORK BANKS MAIN PRODUCT COMPANIES
100.00%
351 branches
ASSET MANAGEMENT UBI Pramerica
100.00%
288 branches (partnership with Prudential US)
83.76% (1)
FACTORING UBI Factor
Northern 196 branches
Italy
74.76% (2)
LEASING UBI Leasing
208+3* branches
LIFE BANCASSURANCE Lombarda Vita (partnership with Cattolica)
82.96% (3) Aviva Vita Spa
66 branches
Aviva Assicurazioni Vita Spa
Central 99.53%
208 branches
Italy ON LINE TRADING IW Bank **
Southern 216 branches
99.99%
Italy
21 branches
** 100.00%
713 financial
advisors
Information updated as at 19 January 2015
Page 7 *indicates branches outside Italy
**Merger announced to be completed in 1H2015Presence in Italy
Introduction to the UBI Banca Group:
Predominant Retail Business and Strong Northern Italian Franchise
1
9 Approx. 3.7 million clients, mainly retail
1
762
27
1,560 branches, of which 762 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
78 94 Market Shares*
Branches accounts Loans
% & deposits
19
1 Bergamo 22.3 28.7 40.2
84 Brescia 22.5 27.1 35.0
Varese 23.7 27.8 21.0
Cuneo 23.4 18.4 16.0
National market share of 5.4% in terms of branches
1,560 branches in Italy + 6 branches abroad * Market shares calculated as at 30th June 2014 .
As at 19 January 2015
Page 8Agenda
UBI Banca International Network
International Network
Presence in the world
Page 9International 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
(Opening 2015) (Opening 2015)
FOREIGN BANKS
Head office in Luxembourg
SUBSIDIARIES BRANCHES
UBI TRUSTEE SA LUXEMBOURG
(Luxembourg) MADRID
MUNICH
Page 102015 opening of Rep Offices in New
Presence in the world York and Dubai
Munich
Krakow
UBI Banca International
UBI Factor Branch
Branch Vienna
Business Consultant
Moscow
Representative Office
Luxembourg
• UBI Banca International
• UBI Trustee 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
Mumbai
São Paulo Representative Office
Representative Office
* Joint-venture in which UBI Banca holds 35% of the total share. (Other partners: Guodu Securities Co. Ltd. holds 30% of the
total share, Beijing Baijun Investment Co., Ltd holds 30% of the total share and WinnerKey Investment Co. Ltd holds 5% of
Page 11 the total share). At 31st December 2013, the ex Lombarda China Fund Management Co., actives in the management of retail
funds and of IPO, handled an AUM of 14.5 billions of Rmb (about 1.7 billions of euro).Agenda
Contacts
UBI Banca Correspondent Banking
Representative Offices Contacts
Page 12Sergio 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 13Representative Offices Contacts
HONG KONG MUMBAI SHANGHAI
Mr Andrea Croci Ms Rajeshree Balsari Ms Lu Bo
hongkong@ubihk.com mumbai@ubibanca.com office@ubibanca.sh.cn
Suite 2911, Tower Two, 92 Mittal Chambers, 9th Floor, The Center
Times Square 1, Matheson St. - Nariman Point, Suite 3304
Causeway Bay Hong Kong - S.A.R. 400 021 Mumbai - India 989, Changle Road
200031 Shanghai – China
Tel. +852 2878 7393 Tel. +91 22 22023601
Fax +852 2878 7932 Fax +91 22 22023603 Tel +86 21 61675333
Fax +86 21 61675582
MOSCOW SAO PAULO VIENNA (Business Consultant)
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, Seilerstätte 16/11
Business Centre “Nikolskaya Plaza” 456 Ed. Jaù - 4° And.Cj.402 1010 Vienna
109012 Moscow - Russia CEP 01410-000 São Paulo - Austria
Brazil
Tel. +7 495 725 4466
Fax +7 495 725 4465 Tel. +55 11 3063 0454 Tel. +43 1 514 37 26
Fax +55 11 3063 3785 Fax +43 1 514 37 60
Page 14Agenda
Annex
Foreign Banks
Product Companies
Group Results
Group BIC codes
Page 15Foreign Banks
Qualified and specific services offered to Corporate customers:
establishment of international companies
trustee operations and corporate financing
payment services
corporate and syndicated loans
issuance of bonds and international guarantees
cash pooling
factoring
Services offered to Private customers:
wealth management and investment advisory;
heritage and personal wealth planning with tailor made financial engineering solutions;
investment Funds and Sicav;
financial and asset planning with tailored engineering solutions;
term deposits in all major currencies,;
trading and safekeeping of securities on all the major stock and bond markets;
spot and forward foreign exchange transactions;
services for the establishment of Trust Companies through UBI Trustee SA based in Luxembourg.
Leasing
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.
6.9 bln EUR in net Loans to Customers
Page 16 Data as at 31.12.2014Product Companies
Factoring
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.
7.7 bln EUR Turnover; 2 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.
35.4 bln EUR in Assets Under Management
Online Trading
IW Bank is a 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.
Assets under management of EUR 569.7 mln.
Page 17 Data as at 31.12.2014, unless otherwise statedFY14 Results: improving core profitability and cost control confirmed
Growth in core revenues and operating income in 2014 compared with 2013
PROPOSED DIVIDEND PER SHARE
Consolidated profit net of non-recurring items of 146.5 mln/€, up 46.2% compared with 100.2
mln/€ in 2013 (€)
0,08
Consolidated results (stated) 0,05 0,06
Operating income of 3,409.6 mln/€ (-0.8% YoY)
Net interest income of 1,818.4 mln/€ (+3.9% YoY)
Net fee and commission income of 1,226.6 mln/€ (+3.3% YoY) FY12 FY13 FY14
Finance result of 199.7 mln/€ (324.6 mln/€ in 2013)
Cash dividend always paid through the crisis
Constantly lower operating expenses down to 2,108.2 mln/€ (-1.6%) - 6th consecutive year
of reduced costs
Net operating income of 1,301.4 mln/€ (+0.5%)
Annualised loan loss rate of 108 bps or 929 mln/€ inclusive of the results of the AQR (107
bps or 943 mln/€ in 2013)
New inflows from performing loans to deteriorated status down significantly by 36.2% vs
2013
Profit on continuing operations before tax of €449.1 mln/€ (+57.4%)
A consolidated loss for the Group of 725.8 mln/€ compared with a profit of 250.8 mln/€ in
2013, following approximately 883 mln/€ of net impairment losses on goodwill and intangible
assets (no impact on real profitability, +32bps of CET1 following booking of deferred taxes in
income statement on fiscally recognised goodwill, lower PPA (-6 mln/€) starting from 2015)
Approximately 80% of the redundancies planned under the Framework Agreement signed
with trade unions on 26th Nov ‘14 (a total of 500 workers) were complete as at 31st Jan ‘15
Loans at 85.6 bln/€, up 0.8% compared with Sept ‘14 – Positive trend confirmed in Jan ‘15
Direct funding at 93.2 bln/€, up 6.1% compared with Sept ‘14
Page 18UBI Banca Main Consolidated figures: Balance Sheet
Main balance sheet COMPREHENSIVE ASSESSMENT RESULTS 26TH Oct 14
figures Dec ‘13 Dec ‘14
Figures in billions of euro UBI Italy SSM*
CET 1
Loans to customers 88.4 85.6 as at 1st Jan 2014
12.25% 10.17% 11.77%
AQR adjusted 11.82% 11.35%
9.47%
Direct funding 92.6 93.2 CET 1
CET 1 after
of which: Direct Funding from adverse scenario
8.20% 6.14% 8.37%
Ordinary Customers (current 74.7 74.0
Capital excess after AQR + 1.7
accounts + retail bonds) and adverse stress test bln/€
of which: Direct Funding from
17.9 19.3
Institutional Customers
Net Interbank exposure CAPITAL RATIOS AS AT 31st Dec 14
(not included in Direct Funding – 10.9 10.0
mainly LTRO) The Group’s solid capital strength is confirmed:
Total assets 124.2 121.8 Common Equity Tier 1 ratio “phased in” as at 31st
December 2014: 12.33% following update of risk
Loans to customers / total parameters (13% as at 30/09/2014)
71.2% 70.3%
assets Pro forma Common Equity Tier 1 ratio “fully loaded”
estimate of 11.5% (12% as at 30/09/2014)
Indirect funding (AuM + AuC) 71.7 75.9
Basel 3 leverage ratio: “phased in” at 5.78%,
of which: AUM 39.6 43.3 “fully loaded” of 5.42%
of which: AUC 32.1 32.5
Page 19
Page 20UBI Banca Main Consolidated figures: P&L & Outlook
OUTLOOK
MAIN INCOME STATEMENT ITEMS % change % change
FY13 FY14 % change In4Q13
2015 3Q14interest4Q14
net income4Q14
will be
vs 4Q13 affected by a lower
4Q14 vs 3Q14
Figures in € mln
contribution from the securities portfolio, mainly as a result of
Net interest income 1,751 1,818 3.9% 459 468 442 (3.8%) (5.5%)
Net commission income 1,187 1,227 3.3%
positions
299
that299matured 318
in the held-to-maturity
6.5%
portfolio in the
6.7%
Net result from finance 325 200 (38.5%) last 156
months of14 2014. A49recovery(68.5%)in volumes254.7%
of business with
Other income items 175 165 (5.6%) customers
37 should
42 make42it possible 15.9%to increase2.1%net interest
Operating income 3,437 3,410 (0.8%) income
951 from 822
business with
852 customers,
(10.4%) even in the
3.7% presence of
Staff costs (1,302) (1,302) 0.0% strong
(327) competition
(329) on
(325)pricing, (0.7%)
and help offset(1.1%) the lower
Other administrative expenses (660) (635) (3.8%) contribution
(166) forecast from
(147) (177) the securities
6.5% portfolio
20.2%
Net impairment losses on property, equipment and investment property
(180) (171) (4.9%) (45) (42) (44) (3.2%) 2.9%
and intangible assets Net fee and commission income should benefit from positive
Operating expenses (2,142) (2,108) (1.6%) (538) expected
trends (518) for assets
(546) under management
1.3% 5.3%
and insurance
Net operating income 1,295 1,301 0.5% and possible growth in fees and commissions 1.0%
413 303 306 (25.7%) associated with
Net impairment losses on loans (943) (929) (1.5%) (366)
lending (197) (302) (17.4%) 53.5%
Net impairment losses on other financial assets and liabilities (48) (9) (81.8%) (25) (0) (6) (74.7%) n.s.
Net provisions for risks and charges (12) (9) (26.7%) A 2
further (1)
decreasein (5)
sovereign debtn.s.risk
could n.s.
allow positive
Profits (losses) from disposal of equity investments (7) 94 n.s. (8) 0 94 n.s. n.s.
results to be achieved for trading and hedging activity again in
Pre-tax profit from continuing operations 285 449 57.4% 201515 105 87 460.8% (17.3%)
Taxes on income for the period from continuing operations 55 (187) n.s. 205 (52) 1 n.s. n.s.
Profits for the period attributable to non-controlling interests (26) (29) 11.7% The recent
(8) trade
(9) union agreement
(4) will help compensate
(47.5%) (56.7%) for the
Profit/loss for the period attributable to the shareholders of the Parent automatic increases in staff costs, the overall performance of
before charges for exit incentives and impairments on tangible and 315 233 (25.9%) 213 will in 44
which any case 83 (72.7%)
depend on the final(17.3%)
outcome of the
intangible assets
renewal of the national trade union contract
Impairment on tangible and intangible assets
(38) (883) n.s. (38) (883) n.s. n.s.
(net of tax and non-controlling interests)
Charges for exit incentives The downwards trend for other administrative expenses is
(26) (76) n.s. (26) (76) 193.7% n.s.
(net of tax and non-controlling interests) forecast to continue
Profit for the period 251 -726 n.s. 149 44 (876) n.s. n.s.
The slowdown in the pace of new defaulted loans recorded in
Profit for the period NET OF NON-RECURRING ITEMS 100 147 46.2%
201426is expected
45 -29
to continue n.s.
in 2015 n.s.
and could favour an
improvement in loan losses compared with 2014
Page 20
Page 20Group BIC codes
BEPOIT21
BCABIT21
BREUITM1
BLOPIT22 POCIITM1
BPAMIT31
CARMIT31
BVCAIT21
BLPIIT21
UBIBESMM Madrid Branch
CABILULL
BEPODEMM Munich Branch
BIC ACTIVE
BIC NON ACTIVE
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