GRUPPO BANCA CARIGE · GRUPPO BANCA CARIGE Ennio La Monica General Manager Page | 1 Presentation to...
Transcript of GRUPPO BANCA CARIGE · GRUPPO BANCA CARIGE Ennio La Monica General Manager Page | 1 Presentation to...
GRUPPO BANCA CARIGE
Ennio La MonicaGeneral ManagerGeneral Manager
Page | 1
Presentation to the Financial CommunityMilan, 22 May 2012
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 2
Complex banking, insurance and social security organisation...
M k t
~50,000 minor shareholders
9.999.99%% 43.0243.02%%
Market
46.9946.99%%
Fi
BancaBanca CarigeCarige SpASpACassaCassa di di RisparmioRisparmio di di GenovaGenova e Imperiae Imperia
T t
Federalmodel
Listed companies
Mkt Cap: €1.2 Bln
Insurance activities 1Banking activities1
Finance activities 1
Banca Carige
CR Savona
Carige Vita Nuova (vita)
Carige Ass.ni (danni)
Carige AM SGR
Creditis (Credito al
Trustee activities 1
Centro Fiduciario
CR Carrara
BM Lucca
B. Cesare Ponti
consumo)
Own Product Factories
5,974Employees
677 branches &432 insurance outlets
~ 2 Mln customers Shareholders’ equity~€2.9 Bln
Page | 3
1 Major companies
Source: company data to May 2012
...with 677 branches in 5 banks
Branches distribution by bank (as at 31/12/2011)
of which #207 in
84% 560
of which #207 in Liguria1 and
#353 outside Liguria
7% 50
3%
5% 37
23
1%
3% 23
7
100% 677
Page | 44
1 Liguria includes Nice branch
SOURCE: Company data
Carige Group showed strong resilience during the crisis, particularly if compared with peers...
Comparison of pre and post crisis cumulated profits (€ Mln)
2005-2007
2008-2011
-53%775
+64%
309
661775
474
309
Peers average1 Carige
Page | 5
1 BPER, BPM, BPVi, Credem, Creval
SOURCE: Banca Carige, annual reports
… and confirming the federal model’s worth
CAGR Inte mediation acti ities Net P ofit C/I
Federal model: marginal administrative and organisational costs against significant commercial benefits and territorial presence
AquiredCAGR
Pre-deal/2011Intermediation activities
(€ Bln)Net Profit(€ Mln)
C/I(%)
∆ p.p.Pre-deal/2011
Dic2011Pre-deal Pre-deal Dic
2011
24 0 p p
Pre-dealDic
2011
1999Banca del Monte
di Lucca(#23 branches)
2.3
10.6%
0.7
12.7%
0.6
2.5
-24.0 p.p.
86.5
62.5
1999
Cassa di Risparmiodi Savona
(#50 branches)
4.72.8
4.4% 7.3%
5.7
13.3
-13.2 p.p.
71.458.2
2003
Cassa di Risparmiodi Carrara
(#37 branches)
3.2
5.3%
2.1
2.4%
4.14.9
-6.3 p.p.
73.6 67.3
Dicembre
2004
BancaCesare Ponti
(#7 branches)2.4
11.7%
1.1
…
-0.6
8.891.6
-15.3 p.p.
76.3
Page | 6The data "Pre-deal" refers to the last balance sheet prior to the acquisition. For Banca Cesare Ponti data "pre deal" refers to the 2004 balanceSource: company data
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 7
The crisis impacted significantly the banking sector…
Impact on Banking systemPeriod Effect Focus
2007-2008Sub-prime mortgages and
toxic assets: low asset quality
LimitedAsset
quality
2009-2010
low asset quality
Economic recession: high credit risk cost Significant
2011Liquidity crisis on
institutional markets: Limited, due to
T
2011 institutional markets: sourcing and disposal
Retail funding cost increase:
Retail funding
Si ifi Li bilitiTomorrow gstructural margin reduction Significant Liabilities
quality
Impacts on Italian banks P&L are strictly connected to the traditional banking model
Page | 8
Impacts on Italian banks P&L are strictly connected to the traditional banking model
… with several factors putting under pressure the traditional retail banking model
- Overall uncertainty and higher volatility than in the past
- Global economic re-balancing, with significant growth of emerging countries that will cause banking resources (capital) transfer across markets
Macro-economic
t t cause banking resources (capital) transfer across markets
- Worsening conditions of funding market, which have already transformed liquidity in a scarce and costly resource
context
- Change in the European Banking system regulatory framework, with theintroduction of Basel III, resulting in:
. Higher capital requirements
Stricter liquidity management rules
Regulation
• c
. Stricter liquidity management rules
- Tightening consumer protection
- Change in customers’ key needs and behaviours driven by demographic and economic trends:
. Older customers, on average, but with different needs and expectations compared to current “elderly people”
. Greater confidence and usage of remote channels and, consequently, lower usage of Customers g , q y, gphysical branches
. Reduction in saving propensity and increase in borrowing and consumprionpropensity
. Increasing churn rates, shopping around and mobility to other banks
Page | 9
. Increasing churn rates, shopping around and mobility to other banks
Profitability recovery must be achieved by reducing service cost and increasing commercial productivity…
European Banking system profitability evolution1 – ROE, %
Despite the expected
16.7
Despite the expected market growth and the decreasing risk costs, a performance improvement of 25-30% i d d t hi7 9-9 2 is needed to achieve pre-crisis profitability levels, via:
Reduction of service cost
7.4-8.6
1.2-1.41.7-2.0
7.9 9.2
service cost
Increase of commercial productivity
2015 EInertial growth impact
Regulatory impact on
capital
2007 2010
Page | 10SOURCE: External provider analyses based on Thomson-Reuters data
1 Europe-27 and Switzerland
… and leveraging the increasing usage of remote channels, driven by technology innovation and lower costs
Online banking usage1
I70
80
g g
PercentNorway
S dFinland
Netherlands
3-5 years “Self-service”
50
60
70
Switzerland US
Canada
SwedenFinland
Luxembourg
Denmark
10-15 years III
II7-10 years“Multi-channel”
30
40
Japan
South Korea
Australia
UK
Austria
France
SpainIreland
Germany
Belgium
“Brick & mortar”
10-15 years
IV
III
“Online adaptors”10
20 Brazil
ArgentinaColombia
South Korea
Russia
Middle
EastMexico Serbia
Slovenia
PortugalPoland
HungaryItaly
Spain
Czech
Republic
00 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
IndiaColombia
China
Internet usage1
Mexico Serbia
Turkey MacedoniaRomania GreeceBulgaria
Page | 11
Percent1 Percentage of individuals using the internet/online banking in the last 3 months
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 12
The Strategic Plan identifies four main strategicguidelines
Carige Group Strategic Plan 2011 - 2014 has identified strategic guidelines and actions to enable CarigeGroup to overcome the limits of profitability related to the maturity condition of the Banking sector
STRATEGIC GUIDELINES STRATEGIC GOALS
1 Higher commercial productivity :
− Improvement of cross selling
− Product portfolios evolving towards higher-margin higher-commissionDevelopment of revenues and commercial offering: “discover” business areas (territories, products, customers) that still have untapped value potential
Product portfolios evolving towards higher margin, higher commission products (upselling)
− Lower business performance variance
Broader customer base
Development of inter-channelling
• c
Rationalisation of operating costs and processes: constant striving for technical and
ti ffi i
2
Service model fine-tuning
Review of the pricing policies
New sales processes to free up resources for commercial activities
Personnel's proactive commercial attitudeoperating efficiency
Optimisation of liquidity, capital and cost of risk: efficient allocation of short resources
Efficient cost base and process management
Focus on retail and institutional deposits
Closing of the intermediation circuit
Active capital management in a Basel 3 perspective
3
Focus on innovation and skills: not only on processes and products, but also on human
Active capital management in a Basel 3 perspective
Qualitative selection and management of credit
4 Widespread use of technology
Recognition of merit
Page | 13
resources' behaviours and social skills Optimal use of skills and abilities (knowledge and know-how)
By spinning-off Extra-Liguria branch network from BancaCarige and establishing Banca Carige Italia, the bank will reach the Plan’s targets
Two separate banks, specialised on C i G N t i
p , ptheir own geographical areas of reference, with different mission and, as a consequence, radical differences in strategy, distribution model and
Carige Group – Net income€ Mln
commercial approach
Preserving the current positioning in the historical areas of
33010%CAGR:
presence, defending the customer base, the market leadership and thus the profitability of the bank
Liguria
187the bank
Accelerating the acquisition of customers and the growth of
l d i thExtra-
187
volumes reducing the cost of service to self-finance growth Reducing the funding
gap
Extra-Liguria
Page | 14
gap20172011
Banca Carige Italia will be a network bank, consistently with the federal model of the Group
ReorganisationSet up of a new bank, Carige Italia, that will receive Banca C i ’ b h f th E t Li i t k ( t NiReorganisation
ProjectCarige’s branches of the Extra-Liguria network (except Nicebranch)
Market
9.99% 46.99% 43.02%
Target Structure
NewCoBanca
Carige SpA-listed-
Target Structure of the Group
Carige Italia SpA
95.9% 90.0% 60.0% 100%100%
Othercompanies (1)
Page | 151) Insurance companies, financial, fiduciary and instrumental
Two branch networks significantly different for history, geographical presence and productivity
Extra-Liguria networkLiguria network
History
• Significant presence in the territory outside Liguria only from early ’90s
• “Young” network, develop in the last 15 yearsthrough branches acquisition and new openings
• Historical presence in Liguria region for over 500 years
• Mature network and stable number of branches (207 at date)
Market share and
through branches acquisition and new openings (from 40 branches in 1998 to the actual 353)
branches (207 at date)
• High market share (over 20% in terms of branches and deposits)
• Low market share (below 1.5% in all the regions of presence except Piedmont, Sicily and Sardinia)
share and coverage • Diffuse coverage, based on branches
proximity, close to each other• Low coverage (few, distant branches to cover larger
territory)
• Higher productivity by branch, thanks to hi h b f li b h
• Branch productivity far from Liguria’s, due to l b f l b h ( )Productivity high number of clients per branch
• Higher volumes per client
low number of clients per branch (-38%)
• Limited volumes per client vs. Liguria network (-40%) but higher profitability
Customer base
• More balanced portfolio in terms of customer segments vs. Extra Liguria, with Mass Market representing ~63% of total customer base
• Customer base on average older than Liguria’s
• Higher share of Mass Market segment (72%) vs. Liguria network; Affluent e Private segments less represented in the customer portfolio
• Customer base on average younger than Liguria’s
Page | 16
• Customer base on average older than Liguria s, with relevant portion of clients in the senior age bands
Liguria s
Liguria Network represents the historical core of the bank, while Extra-Liguria Network is the result of an intense growth phase during the last 15 years
Number of branches1
1998 2000 2002 2004 2006 2008 2010 2012
Liguria 200 201 200 201 203 205 207 207
1990
129g
Extra-Liguria
40 79 186 189 198 327 348 353
New openings 18 4 3 9 10 1 5
7
337New openings 18 4 3 9 10 1 5
Acquisitions - 21 103 - - 119 20 -
33 90
263
7
-
Total 240 280 386 390 401 532 555 560
Acquired
136
Banco di Sicilia
IntesaCapitalia
ISPUniCredit MPS
Acquired from
Page | 17
1 Net of closed branches
The two networks operate in completely different markets
Banca Carige: Branch Market ShareBranch Market Share
Customer loans Market Share
Direct depositsMarket Share
1.9%1.2%
0.8%
1%
21 2%
1%
Italy: 1.3%Liguria: 18.9%
Extra-Liguria: 0.8%
Italy: 1.2%Liguria: 22.3%
Extra-Liguria: 0.7% 2
1%0.3%
0.4%21.2%
1 4%0.6%
1.6%
1.4%
Italy 2%Liguria: 21.2% 3.6%
Page | 18
Liguria: 21.2%Extra-Liguria: 1.3%
During the last years, the main commercial indicators of Extra-Liguria network improved
Clients / FTEs Bank Accounts / FTEs
297286251
+9% p.a.
243232220
+5% p.a.
201120102009 201120102009201120102009 201120102009
Cross-selling Index Acquisition Index
+3% p.a.
3.93.83 7
+13% p.a.10.4%
9.2%8.2%3.83.7
Page | 19
201120102009 201120102009
However, Extra-Liguria network still counts a lower number of customers per branch…
Index, Liguria=100Data at 31/12/2011
Customers per FTE %
Extra-Liguria Network has
100
Customers per branch %
a lower number of customers per FTE…
100
75100
6200
ExtraLiguria
Liguria
and on
FTE per branch %
Liguria
82100 ...and, on
average, smaller branches
82100
Page | 20
… customers with lower average volume…
Index, Liguria=100Data at 31/12/2011
Volume per customer%
Extra-Liguria has customers
100
Total Income per customer %
significantly smaller…63
100
87100
with higher
Total Income on volume %
Liguria ExtraLiguria
133100 ...with higher
volume profitability
100
Page | 21
… and a gap in terms of Affluent and Private customers, also driven by the lower average age of the customers
Extra-Liguria
Liguria
Customer distribution by segment Average customer age
Mass Market72%
63%
Private4%
Affluent15%
22%
52
57
Small Business10%
7%
Private1%
52
Corporate1
2%
4%
10%
Liguria Extra-Liguria
Page | 221 Includes Mid and Large Corporate, and Public Institutions
It’s time for a step-change and a discontinuity in the way we work
PhaseE Li i kExtra-Liguria network: 353 branches
Discontinuity in the way we work and full
Extra-Liguria network: 40 branches
Acquisition and integration into the Group
way we work and full exploitation of the opportunities out of Liguria region
1998 2012 2017
Objectives Branch network expansion beyond the historical region of the Bank
Full exploitation of the growth potential of the Extra-Liguriathe historical region of the Bank
Improvement of the commercial performance,volumes productivity and profitability
potential of the Extra Liguria network
Step-change in the growth pathof number of clients and volumes, th h b h f t d
Page | 23
through new branch format and distribution model innovation
The performance improvement will be achieved through the implementation of two separated operating and commercial strategies
Objectives Operating and commercial strategy
Maintain actual strategy, focused on volumes profitability and branches operational efficiency, by:
Preserving the current
Defending the customer base and executing qualitative remix (with assignment of specific targets in terms of client acquisition by age band)
Safeguarding profitability Enhancing efficiency (interventions on back office
Carige
positioning in the historical areas of presence, defending the customer base Enhancing efficiency (interventions on back-office
and multi-channel distribution) Improving productivity per square meter
customer base, the market leadership and thus the profitability of the b k
Innovate the client service model, integrating the existing branch network with new and flexible
bank
Accelerating the acquisition of g
acquisition and sales channels and testing new solutions in a “laboratory-style” set-up, with focus on: Increasing number of leads (development) Acquiring new clients
A i i “ l bl ” li t (“ ti ”
Carige Italia
acquisition of customers and the growth of volumes reducing the cost of service to self finance Acquiring “valuable” clients (“native” cross
selling) Develope a new product offer aimed to attract
valuable clients
to self-finance growth Reducing the
funding gap
Page | 24
In order to increase volumes and clients, the strategy of Carige Italia will focus on channel and product innovation
Innovate the h d l
Innovate service model, developing the existing retail capacity and coupling it with low cost and more effective
t h lgrowth model remote channels Introduce “attack” products, simple and appealing for
value customers
Historically, the existence of two completely different networks in one bank h d d i
Increase accountability
Increase transparency on results and differentiate commercial accountability, in order to maximize the values of the two different strategies and avoid mix-up between the objectives Differentiate management performance systems
has produced a mix-up of strategies and commercial approaches, resulting in the acceptance of Differentiate management performance systems,
focusing on growth in terms of objectives and commercial targets, planning process, incentives programs and KPIs
I t d i l t t tt t d
several “compromises” in order to manage safely and profitably the Bank
h li f h Specialize infrastructure
Introduce new commercials systems to attract and manage new clients through remote and innovative channels
The split of the two networks will enable a clear strategy differentiation and the activation of the
Strengthen credit risk control
Achieve a more balanced asset-liability structure, reducing Carige Italia funding gap Differentiate credit powers between Carige and Carige
Italia in order to assure selective loan growth, in compliance to the Holding credit policies
required enablers
Page | 25
compliance to the Holding credit policies
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 26
Business model differentiation will take into account innovation needs and the continuous curb of operative cost
Rationale
Diff ti t dHolding Functions
Centralised management and control functions, in order to maintain scale and scope synergiesF C i It li t d l d
Banca Carige
Differentiated strategy and commercial approach to better cope with different
Focus on Carige Italia to develop and test product innovations, service model, ICT platforms, and roll-out them to the Liguria network in a second phase
Centralised back-office functions tocope with different geographic needs and market opportunities
Common operative platform to maintain
Centralised back office functions to leverage economy of scale
platform to maintain scale advantages and possibility to implement specific differentiations
Carige
Network
(Liguria)
CarigeItalia
Network
(
Wholly differentiated commercial networks in terms of role, objectives, and distribution model
Duplication limited to commercial (e.g. pricing) and credit functionsdifferentiations
(Extra-Liguria)
pricing) and credit functions
Page | 27
The target organisational structure of Carige Italia isconsistent with the management of the Group’s Network Banks
BOARD OF DIRECTORS
CEO
Corporate affairs
Managing, directingand controlling
functions centralisedin the Parent Bank
LENDING NETWORK
in the Parent Bank
• c
Market SupportLending Monitoring Development & Private Banking
Large corporate Lending Support NPL management
TUSCANY & UMBRIA Area
PIEDMONT Area
LOMBARDY Area
VENETO Area
EMILIA ROMAGNA Area
LATIUM-MARCHES Area
SARDINIA Area
APULIA Presidium
SICILY Area
Page | 28
SICILY Area
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 29
Benefits of the Project
RecurrentBenefits
Running gross benefits equal to €55 Millions (Net €37 Millions):• Increase of annual recurrent revenues equal to €37 Millions (2017), due to
productivity growth and network efficiency, optimisation stabilisation of cost ofinstitutional funding, active capital management, net of higher taxes on intra-groupfunding and dividends
Revenues
funding and dividends
• Running annual cost savings equal to €18 Millions, due to higher efficiency ofinfrastructures, optimisation of processes and tax savings net of the increase ofother minor recurrent structural costs (<1M€)
• Also due to these actions the running Cost/Income for 2017 is expected to be in
Cost savings
Non Recurrent
g / preduction of 13.5% at 45%
Economic• Benefits of €715.8 Millions, of which:
• 456 5 for Banca Carige due to the positive effect of DTL write off DTABenefits • 456.5 for Banca Carige due to the positive effect of DTL write-off, DTA recognition on goodwill not yet amortised as at 31/12/2012 and negative effectof recognition of DTL on the stake in Carige Italia - according to PEX – equal tothe original fiscal value of goodwill
• 259.3 for Carige Italia due to the positive effect of recognition of DTA related
Financial
g p gto the goodwill and negative effect of the substitute tax recognition, due to the exercise of the tax release option applied to the goodwill
• 254 bps benefit on the regulatory ratios, for the fully retained extraordinaryearning, net of the tax benefits already recorded under shareholders’ equity
Investments • Utilisation of a significant part of the investments already planned in the Strategic Plan 2011-2014 (€110 Millions) and of those further expected for
• Core Tier 1 at 9.3% as at 31/12/2012• CET1 full compliant expected to be greater than 8% as at 1/1/2013
Page | 30
Strategic Plan 2011-2014 (€110 Millions) and of those further expected forthe three-years period 2015-2017 (€90-110 Million) supporting the requestedprojects’ initiatives and innovations
recurrent economics benefits
€ Mln
55
18
3737
18 Expected contribution to the3737 to the Group’s net income of about €37 Mln runningMln running in 2017
Grossbenefits
Net benefits
Taxeffect
Lowercosts
Higherrevenues
Page | 31
Detail of the gross recurrent economic benefits
Benefits Action and economic impact Rationale
1 1.1
€ Mln
Optimisation and stabilisation of cost of funding
Stategic and rigorous approach to Capital Management
Development of new customers taking into accont risk/return equilibrium
Improvement of productivity thanks to the newGross
recurrent
Productivity growth and network efficiency
Active capital management
Credit standing improvement
~22
~10
~11
1.1
1.2
1.3
Improvement of productivity thanks to the new commercial model deriving from the establishment of Carige Italia
More efficent allocation of resources
recurrentrevenuesbenefits
Credit standing improvement
Total revenues benefits ~37
~11
Intra-group funding and fiscal ~(6)1.4
Rationalization of localnetwork
Higher efficiency of
~1
~3
2 2.1
2.2
Rationalization of the network and enhancement of local brand
Higher efficiency in the allocation of resources
O i i i f h
infrastructures
Optimisation of processes
~3
~9Gross
recurrentcost
benefits‘ACE’ benefits/reserves
2.3
2.4
~6
Optimisation of the expense processbenefits
Total cost benefits ~18
Other recurrent costs ~(1)2.5
Page | 32
Non recurrent benefits from the Reorganisation Project
Action Effects
Regulatory (bps)
One-off effects(2012)
Core Tier 1 (2012 pro forma)
P&L € Mln
1
One-off effects(2012)
Reg. Cap. € Mln
144457The Project allows a total benefit of 254
Emerging latent deferredtaxation on goodwill 340
bps on the Core Tier 1 ratio at the end of 2012Fiscal recognition of
2
110259Fiscal recognition ofgoodwill ad upfrontwithholding tax
259
2547161Total effect 598
Page | 331 Gross of €5.1 Million one-off costs (€3.4 Mln net) expensed in 2012. Additional one-off costs for €2.4 Million will be expensed from 2013 to 2017
Benefits from the Reorganisation Project
Positive effect of the DTA recognition on goodwill not yet amortised as at 31/12/2012 (~ €1 1 Bln)
€ Mln
1
€114 1 Mln positive
31/12/2012 (~ €1.1 Bln)
456.5363.5
21.1
• c
The Project willallow the emerging oflatent defferredtaxation on
€114.1 Mln positive effect of the DTL write-off as at 31/12/2012 Negative effect of the
recognition of DTL on the stake in Carige Italia –taxation on
goodwillg
according to PEX – equalto the original fiscal valueof goodwill
114.1
DTL write-off DTA recognitionon goodwill
DTL recognition on the stake Net benefit
• cPositive net effect on the regulatory capital equal to about €340 Mln / 144 bps (net effect on the pro forma Core Tier 1 ratio)
Page | 34
144 bps (net effect on the pro forma Core Tier 1 ratio)
Financial benefits of the Reorganisation Project
Upfront withholding taxequal to the 16.0% of the goodwill for Carige Italia
€ Mln
2 DTA relatedto the goodwill (taxrate 33.07%)
goodwill for Carige Italia Effect of the recognition of
DTA related to the goodwill asgranted by art. 15, par. 10 ofthe Legislative Decree n°185/2008 (+ ~110 bps for
502.3
• c
Fiscal recognition ofgoodwill ad upfrontwithholding tax
185/2008 (+ 110 bps forregulatory purposes)
259.3
243.0g
Recognition on goodwill Substitute tax Net benefitRecognition on goodwill Substitute tax Net benefit
• cPositive net effect on the regulatory capital equal to about €260 Mln / 110 bps on the pro forma Core Tier 1 ratio
Page | 35
110 bps on the pro forma Core Tier 1 ratio
Benefits on Regulatory Capital
Effects on Regulatory Capital %
~9.3
2 5
CET1 full compliant as at 1/1/2013
2.5
6.8
5 0 / /greater than8% thanks tothe Reorganisation
5.0
Reorganisation
ReorganisationProject
CT131.03.2012
CT131.12.2012
CT131.12.2011
Page | 36
The resources required to support the strategy will be derived from the investments already planned in the Strategic Plan 2011-2014 and additional investments
Pl d i t t The Group has already planned Planned investments
€ Mln
The Group has already plannedin the Strategic Plan 2011-2014 investiments on technologyequal to about €110 Million
111
90-110
A considerable part of theseinvestments will be used tosupport the project’s initiativesaiming at the innovation of the network (eg automatisedbranches, remote channels toattract new customers), ofproducts, marketing and training (eg for the evolution ofskills of the branch staff)
Additional investments for €90-110 Million planned for the three
2015-20172012-2014110 Million planned for the threeyears period 2015-2017
Page | 37
Financial highlights of the commercial networks, evolution 2011-2017
Carige (branches in Liguria)1 Carige Italia
2011 2017 CAGR 11-17 2011 2017 CAGR 11-17
6.2% 6.2%9.2 13.2 8.9 12.7GROSS LOANS € Bln
4.3%
4 0%
7.1%
6 1%
12.11 15.6
9 72 12 2
7.62 11.42
5 62 8 02
DIRECT DEPOSITS € Bln
INDIRECT DEPOSITS € Bln 4.0%
4.2%
6.1%
6.7%
9.72 12.2
21.8 27.9
5.62 8.02
13.2 19.4
INDIRECT DEPOSITS € Bln
FIA € Bln 4.2%
4.5%3
6.7%
18.9%
21.8 27.9
125.4 163.4
13.2 19.4
53.4 150.7NET PROFIT € Mln
-2.9bp -12.1bp38.5 35.6 60.3 48.2COST INCOME %
Page | 38
1 Banca Carige SpA, in addition to the Liguria commercial network (represented here), maintains also its own internalinstitutional funding, its security portfolio, Leasing, Factoring, medium and long term Pool financing and foreign activities; 2 Intragroup Bonds are reclassified as Direct Deposits; 3 Excluding one-off for cagr calculation purposes
Strategic rationale
1 Acceleretion in achieving the targets of the Carige Group’ Strategic Plan 2011-20141 Acceleretion in achieving the targets of the Carige Group Strategic Plan 2011-2014
Optimisation of the market’s defence by strenghtening the inter-channelling
Cost synergies related to the processes’ optimisation and increasing productivity of the
networks thanks to the specific focus on their core business (unbundling of the Carige network)
and to the emulation effect
2
Strengthening of coordination and control functions of the Parent Bank
Significant strengthening of regulatory capital (even with the new Basel III requirements)2
with expected improvements in the Carige Group’s ratings and, consequently, for its cost of funding
Actions to accelerate the achievement of the targetscommunicated to the market (improving productivity, cost savings, capital
strengthening)…“K i d i l ”
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…“Keep growing producing value”
Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
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Outlined schedule of the Reorganisation Project
Date Milestones Description
Board of Directors of Banca Carige
Presentation to the Financial Community21 May 2012
22 May 2012
Approval of the Group’s Reorganisation Project
17 SeptemberBoard of Directors of Banca Carige
23 May 2012 Set up of Carige Italia
Approval of the contribution’s balance as at 30/6/20122012
Board of Directors of Banca Carige
Starting Dec. 2012
Extraordinary shareholder’s meeting of
Carige Italia to formally approve the capital
increase
Approval of the capital increase to be realised in nature through
the transfer of the business unit with effect 31/12/2012, and the
subsequent amendments to the Articles of Association with effect
pp o a o t e co t but o s ba a ce as at 30/6/ 0
Starting Dec. 2012
increase subsequent amendments to the Articles of Association with effect
1/1/2013
Draw up of the agreements on the
contribution to Carige Italia
31 December2012
Date of effectiveness of the Reorganisation
Project
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Contents
• Carige Group today
• New market scenario
• Carige Group Reorganisation Project
• Target organisational structure• Target organisational structure
• Economic impact of the Reorganisation
• Timeline
• Contacts
Page | 42
Disclaimer
This document has been prepared by Banca Carige S.p.A. solely for information purposes andsolely to present the Group's strategies and key financial data.
The Company, its consultants and representatives shall not be held responsible (for losses arisingfrom negligence or any other
reasons) for any losses arising from the use of this document and of the contents hereof.All forward-looking information contained in this document have been prepared on the basis of
assumptions that may prove incorrect, and therefore the results may vary.In forming their own opinion, readers should keep in mind the aforesaid factors.
This document does not constitute an offer or solicitation to purchase or subscribe shares, andno part of this document can be regarded as the basis of any contract or agreement.
N f th i f ti t i d h i b d d bli h d di t ib t d iNone of the information contained herein may be reproduced, published or distributed, infull or in part, for whatever purpose.
By accepting this notice you agree to all the limits listed above.
**********
The manager responsible for preparing the company’s financial reports Ms. Daria Bagnasco, Deputy General Manager (Governance and Control) of Banca CARIGE S.p.A., declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the consolidated accounting information of Banca CARIGE Group
contained in this presentation corresponds to the document results books and accounting recordscontained in this presentation corresponds to the document results, books and accounting records.
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