View
31
Download
0
Category
Preview:
DESCRIPTION
UniCredito Italiano Group. 1 st Quarter 2002 Results. Alessandro Profumo - CEO. Milan, May 14 th 2002. Agenda. 1Q2002 Group Highlights Divisional Reporting Italian Commercial Banking Wholesale Banking Investment Banking Asset Management New Europe Banking Conclusions. - PowerPoint PPT Presentation
Citation preview
Milan, May 14th 2002
1st Quarter 2002 Results
Alessandro Profumo - CEO
UniCredito Italiano Group
2
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
3
2,453
TOTAL REVENUES (Euro mln) OPERATING EXPENSES (Euro mln)
1Q01 01 Avg 1Q02
2,457 2,5371,242
1Q01 01 Avg 1Q02
1,289 1,295
OPERATING INCOME
GOOD INCREASE OF OPERATING INCOME OVER 2001 QUARTERLY AVERAGE THANKS TO REVENUE GROWTH AND COST CONTROL
1,215
1Q01 01 Avg 1Q02
1,164 1,242
restated restated restatedrestated
restatedrestated
+3.3%
+3.4%
+4.3%
+0.4%
+2.2%
+6.7%(Euro mln)
4
Tax Rate at 44.9%, due to the end of benefits of the Ciampi Law (1)
14.3% of Operating Income, of which Euro 174 mln Specific provisions and Euro 4 mln for possible loan losses
0.16% (0.62% Annualised) of Total Net Customers Loans, in line with 1Q’01
NON-OPERATING ITEMS IN LINE WITH 1Q2001 RESTATED
(Euro mln)
OperatingIncome
Goodwill Net loanloss prov.
Other netprov.
Net Extr.income
Taxes Minorities Net
+1,242 -64
amort.
-178
-20-16 -433
-130
+401
Income
(1) In 2001 the Group made lower provisions for taxes (in line with the prescriptions of the Ciampi Law), resulting in a lower tax rate. UCI prudentially made equivalent provisions for risks and charges, neutralising tax benefits from the Ciampi Law in the bottom line
5
+10.3%
ROE %COST/INCOME RATIO %
NET INCOME(Euro mln)
NET INCOME 10.3% UP ON ‘01 AVERAGE RESTATED, EFFICIENCY AND PROFITABILITY STILL AT EXCELLENT LEVELS
401
1Q01 01 Avg 1Q02
414364
restatedrestated
50.5
1Q01
51.0
01 Avg 1Q02
52.6
restatedrestated
20.8 (1)
1Q01 01 Avg 1Q02
18.0 (2)
restatedrestated
(1) Calculated on end of period net equity excluding profit for the period and including profit for the previous period allocated to reserves. For 1Q’02 deducting also Euro 234 mln of net shareholders’ equity increase to finance the acquisition of ZABA (not yet consolidated).
18.2 (1)
(2) Calculated on end of period net equity (excluding profit for the period)
Net income slightly down vs 1Q’01 restated (-3.1%) but significantly higher than 2001 Av.
(+10.3%)
-3.1%
6
REVENUE COMPOSITION BY BUSINESS AREA (Net of infra-Group dividends and of Corporate Centre & Elisions negative contribution)
Asset Management (Pioneer)
Investment Banking (UBM+TL)
Italian Banking New Europe Banking
75.4%
12.6%4.6%
7.4%
71.4%
13.5%4.8%
10.1%
1Q’01 restated : Euro 2,591 mln 1Q’02: Euro 2,665 mln
New Initiatives
0.2%
INCREASED CONTRIBUTION OF WHOLESALE BANKING AND NEW EUROPE BUSINESSES ...
7
TOTAL REVENUES BREAKDOWN
... SUPPORTING A GOOD REVENUE INCREASE (3.3% Y/Y) WITH STRONG PERFORMANCES OF INTEREST INCOME AND TRADING FROM FINANCIAL TRANSACTIONS
1Q01
1,169
815
319
154
2,457
1Q02
1,251
779
329
178
2,537
Net commissions
Net interest income
Trading from financial trans.
Other income
+7.0%
-4.4%
+15.6%
+3.1%
+3.3%Net interest income up
2.7% on quarterly average 2001
Diversified mix of revenues: Net Interest Income/Total Revenues still under 50%
Net non interest income in line with 1Q01 (-0.2%).Growth in trading profits and other income partially offsets the decrease of net commissions
(Euro mln)
restated
8
(Euro mln)
New Europe (at unchanged FX)
992 990
1Q01
Italian banking
GOOD NET INTEREST INCOME GROWTH DESPITE A WEAK ECONOMIC CICLE BOTH IN ITALY AND IN NEW EUROPE
1Q02
209245
1,1701,251
Group(at unchanged FX)
3.1% increase in customer loans vs. 1Q01 (1.1% on avg 2001 loans)
8.1% increase in customer deposits vs. 1Q01 (3.7% on avg 2001 deposits)
57 bp increase of mark up vs. 1Q01 (+38bp vs. avg 2001)
87 bp reduction of mark down vs. 1Q01 (-58 bp vs. avg 2001)
18.9% increase in gross retail loans* vs. 1Q01 (+6.0% on avg 01)
The parent company benefited from the decrease of interest rates, reducing the interest paid on debt issued and the cost of equity investments financing
1,213
Avg 01
1Q01 1Q02Avg 01
1Q01 1Q02Avg 01
1,004
221
-0.3%
-1.5%
+17%
+11%
+6.9%
+3.1%
Based on Bank of Italy Matrix figures
7.2% increase in gross corporate loans* vs. 1Q01 (+6.0% on avg 01)
2.2% increase in retail deposits* vs. 1Q01 (+0.9% on avg 01)
9.8% increase in corporate deposits* vs. 1Q01 (+5.7% on avg 01)
Selective lending policy towards less profitable customers
Widening overall spread between assets and liabilities*Management accounts
9
Still good impact of capital guaranteed products on commissions from segregated accounts and insurance products
Decrease in Commissions from Mutual Funds mainly due to lower sales of Luxembourg funds and to the lower share of equity and balanced funds on total AuM:
Av. 1Q02 Equity Funds 45.3% vs. Av. 48.3% in 2001
Av. 1Q02 Balanced Funds 13.6% vs. 16.4% in 2001
NET COMMISSIONS AFFECTED BY THE NEGATIVE CONTRIBUTION FROM MUTUAL FUNDS
NET COMMISSIONS01 Avg* 1Q’02 % ch.
(Euro mln)
* Consistent with the new Bank of Italy criteria for breakdown of commissions; 1Q’01 restated not available
Asset management 419451 -7.1
Mutual funds 287331 -13.3
Securities in custody 8383 -
Other services, of which: 277281 -1.4
Insurance products 6157 +7.0
TOTAL 779815 -4.4
Loans granted & received 120 114 - 5.0
Cash manag. services 100 106 +6.0
Segregated accounts 7163 +12.7
10
Total Group Insurance Portfolio as at 31.3.02: Euro 13,434 mln, +7.7% yoy, of which:
Euro 9,452 mln unit-linkedEuro 3,982 mln other policies
BRILLIANT SALES OF CAPITAL GUARANTEED AND INSURANCE PRODUCTS IN ITALY SUSTAIN OUR CONFIDENCE IN MEETING NET COMMISSIONS BUDGET TARGETS
CAPITAL GUARANTEED PRODUCTS: EURO 2.8 Bn NET INFLOWS IN 2002, EURO 10.2 Bn FROM LAUNCH TO
APR. ‘02
2Q’01
386
632
Tot: 1,018
1Q’01
465
Tot: 465
1,242
731
16
3Q’01
Tot: 1,989
2,734
868
386
4Q’01
Tot: 3,988
1Q’02
1,156
691
191
Tot: 2,038
384
258
94
April’02
Tot: 736
1,000
2,000
(Euro mln)
0
Segregated Accounts
Unit Linked (UNISTAR)
Fund, Equity & Index Linked Notes
3,000
4,000
Increased contribution of annual premiums (Annual/ Total Premiums written: 5.3%, +150 bp vs. 1Q’01), positively impacting the profitability of our sales
Total New Premiums as at 31.3.02: Euro 1,018 mln, of which:
Euro 963 mln Single Premiums
Euro 55 mln Annual Premiums
LIFE INSURANCE
11
Cautious risk management: Euro 4.2 mln Av. Daily
VAR for UBM in 1Q’02 Euro 2.8 mln for TL Euro 5.5 mln UBM+TL
STILL GOOD RESULTS IN INCOME FROM FINANCIAL TRANSACTIONS (+3.1% Y/Y) SUPPORTED BY SOUND RISK MANAGEMENT
INCOME FROM FINANCIAL TRANSACTIONS(Euro mln)
BankingInvestment
Italian banks
New Europe banks
(1) Balance due to other Group companies
+3.1%
Increased contribution of CorporateLab, accounting for around Euro 216 mln (137 (2) Euro mln inside UBM and 79 Euro mln inside the Italian Banking division). Volumes of derivatives sold to corporate customers (3) up to Euro 8.9 bn (around 46% of total 2001 sales)
1Q’02
232
103
27
329 (1)
1Q’01
179
103
31
319 (1)
+0.6%
-13.6%
(UBM & TL)
(2) Of which: Euro 124 mln from Sales, Euro 13 mln from trading
+29.5%
(3) Excluding large corporate customers
12
Staff costs:
+3.2% due to the development of Wholesale Banking (IB and Asset Management)
+0.3% due to the development of New Initiatives (Xelion and Clarima)
+3.5% due to strengthening of commercial units and the incentivisation program
OPERATING COSTS IN LINE WITH 2001 QUARTERLY AVERAGE, +4.3% ON 1Q’01 RESTATED MAINLY DUE TO INCREASED STAFF COSTS
(Euro mln)
1Q01 01 Avg1Q02restated
718 749768
442 442434
82 9893
1,242 1,2891,295
Staff Costs
Other costs
Depreciation
+7.0%
-1.8% -1.8%
+2.5%
+13.4% -5.3% Other costs still do not include the expenses related to the S3 Project
Total Staff from 63,506 (1Q’01 restated) to 62,288 as of 31.3.2002 (-1.9% y/y)
restated
+4.3%
+0.4%
13
Net Doubtful Loans
GOOD ASSET QUALITY INDICATORS DESPITE THE ECONOMIC SLOWDOWN, WITH IMPROVED COVERAGE RATIOS
Net NPLs and Doubtful Loans as % of Total Net Loans
3.2
2001 1Q02
3.3
1.6 1.6
restated
56.2
2001 1Q02restated
56.7
43.7 44.5
Coverage ratios
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
Net NPLs
3,770 -
+2.11,809
Dec. 2001*
% ch. on
Dec.’01(Euro mln)
3,770
1,848
1Q’02
* Restated
Slight increase of Net NPLs (+2.1% on 31.12.2001 restated) compensated by the reduction of other doubtful loans (-2.0% on 31.12.2001 restated); stable Net NPL/Tot. Net Loans Ratio
Significantly higher Coverage Ratios: +60 bp on Total Gross NPLs, +80 bp on Tot. Gross Doubtful Loans, thanks to conservative provisioning in all the business areas
14
DIVISIONAL CONTRIBUTION TO GROUP NET INCOME
24(1)54(1)
-15+13.1%
+1.2% N.m.
381(1) 401-9.0%
566
Italian banking(2)
Wholesale banking
New Europe
banking(5)
New Initiatives(6)
Corp. Centre & elisions(7)
Group total
Total pre-Corp. Centre
-165(1)
GOODWILL AND HOLDING CHARGES:
- 55 goodwill depr.- 110 holding loss (net of
dividends), of which 95.8 due to financial costs
(Euro mln)
-3.1%
N.m.122(1)
+45.1% -0.4%
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
15
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
16
Decrease in commissions vs. 1Q01 mainly due to different asset mix (-24 mln Euro) and lower commissions from securities in custody (-20 mln Euro)
1Q’01 % ch.1Q’02
Cost/Income ratio(1) 48.5% 50.1%
Net interest income 992 -0.2990
Net non interest income 963 -5.2913
Total revenues 1,955 -2.71,903
Administr. costs (incl. depr.) -948 +0.5-953
Operating income 1,007 -5.7950
Net loan loss provisions -110 -6.4-103
Net extraordinary income 8 N. m.-2
Net income -8.1508 467
Other net provisions -20 +15.0-23
(Euro mln)
Tax expenses -377 -5.8-355
Net income for the Group -9.3420 381
ITALIAN BANKING DIVISION 1Q RESULTS IN LINE WITH INTERNAL EXPECTATIONS; SLIGHT DECREASE OF REVENUES DUE TO LESS FAVOURABLE MARKET ENVIRONMENT
Stable interest income vs. 1Q01
Stable costs vs. 1Q01, with tight costs control expected for 2H02, resulting from the merger of the existing 7 banks into a unique entity
17
2,681
2.60%
3.30%
2001
37.8%
1,483
46.3%
2,709
2.78%
3.30%
1Q’02
37.9%
1,493
46.8%
SELECTIVE LOAN GROWTH KEEPS ASSET QUALITY AT EXCELLENT LEVEL
Gross NPL/Gross Loans
Gross NPL/Gross Loans T-2
Coverage on Total Gross Doubtful loans
Stable Gross NPL/Gross Loans T-2 Ratio
Increased Coverage Ratios
Net Doubtful Loans
Net NPLs
1.0%
+18 bp
-
+10 bp
0.7%
+50 bp
% Ch. On Dec.01
Coverage on Total Gross NPLs
7 MAJOR ITALIAN BANKS ONLY
Very limited increase of Net Doubtful Loans and NPLs due to the economic slowdown
18
S3 PROJECT IS WELL ON TRACKPHASE 1 (JAN - JULY 2002): FROM 7 BANKS TO THE MERGER IN UCI BANCA
Approved acquisition of the minorities by all the Shareholders’ meetings of the Italian Banks
Managing Director and “first line” management of the new 3 banks appointed
Assets and Liabilities of the single banks as well as of the Parent Company identified
1st July 2002: merger date
Organisational charts as well as branch network redesign for all 3 banks completed
Operational models for the 3 new banks defined
INTERNAL COMMUNICATION
Top Management’s Roadshow in the main Italian towns to meet all 7,500 middle managers to share the rationale and targets of the S3 Project
LEGAL AND ACCOUNTING
ORGANISATION
19
PHASE 2 (JULY 2002 – JANUARY 2003):FROM UCI BANCA TO 3 SEGMENT BANKS (RETAIL, PRIVATE AND CORPORATE)
IT INTEGRATION
Completion of IT for new Private and Corporate Bank by Sep02; fine tuning and customer migration by Dec02
COMMERCIAL ALIGNMENT & ENHANCEMENT
Harmonisation of product ranges, commercial policies, planning & control tools, credit processing already started; high value product lines to be aligned by Sep02
ORGANISATION
Complete divisionalisation of UniCredit Banca (headquarters and network) to be completed by Sep02
20
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
21
High growing, recurring, non-cyclical and stress-proof Trading Profits generated by:
CorporateLab TradingLab Institutional deriv. Securities
business
Excellent C/I Ratio (21%), 2.3% down on 1Q’01
EXCELLENT RESULTS IN INVESTMENT BANKING, MAINLY DUE TO THE STRONG GROWTH OF CORPORATE DERIVATIVES
1Q’01 % ch.1Q’02
By n
atu
reB
y b
usin
ess
lin
e
Net Interest margin
Trading profits
Total revenues
Net Commissions
Staff costs
Operating income
Net provisions & other costs
Tax expenses
Other costs
Net income
Sales & Trading (incl. Inst. Deriv.)
Investment & Corporate Banking
CorporateLab (Corporate Deriv.)
TradingLab (Retail Derivatives)
(Euro mln)
7
179
6
192
68
4
46
74
-19
-26
147
-4
-60
83
12
232
26
270
137*
15
63
55
-30
-27
213
-5
-86
122
+71
+30
+333
+41
+101
+275
+37
-26
+58
+4
+45
+43
+47
Exceptional results for CorporateLab: 1Q’02 Revenues accounting for 62% of FY’01 Results (Euro 220 mln)
Significant growth in Investment and Corporate Banking, despite the negative market scenario
* In 1Q’02 Euro 124 mln from Sales (of which Euro 69 mln through the Italian Network and Euro 55 through Non-Captive distribution) and Euro 13 mln from Trading
N. m.
22
-8
-6
-4
-2
0
2
4
6
8
TRADING RISKS UNDER STRICT CONTROL,WITH A FURTHER CONSIDERABLE IMPROVEMENT OF THE AV. DAILY P&L / AV. DAILY VAR RATIO
Low 1Q’02 Average Daily VAR(1), 12% up vs 4Q’01 (Euro 5.5 mln vs Euro 4.9 mln) due to increased volumes
No negative daily P&Ls in 2002 up to end of March
No negative outliner from 1st
January 2001
UBM+TL Daily VAR(1) and P&L (Jan. 2001 - Mar. 2002)
Euro mln
UB
M+
TL D
aily V
AR
an
d P
&L
Daily P&L VaR
(1) Figure relates to UBM and TL combined; calculation made with a 98-99% asymmetric double tail confidence interval. P&L net of accounting adjustments as of 31.12.2001
More and more efficient use of VaR Channel: Avg Daily P&L / Avg Daily VaR Ratio from 17% in 1999 to 33% in 1Q2002
Avg Daily P&L / Avg Daily VaR
21%
1999 2000 2001
23%
17%
33%
1Q02
23
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
24
BRILLIANT NET SALES IN THE US AND INTERNATIONAL BUSINESS AREAS ...
TOTAL PIONEER AuM
Record Net Sales in the US (Euro 1.8 bn vs. Euro 1.4 bn in FY01) and International Division (Euro 671 mln vs. Euro 596 mln in FY01) and positive results in New Europe and Italy-Institutional, completely offsetting negative sales in the Italian Retail Area
Increasing “Non Captive” share on total AuMs (3)
(2) Including FX effect(1) Based on official BCE FX as at 31.12.2001
Non Captive/Total AuM(3) - Assets Breakdown
25,31%
29,22%
30,71%
20%
22%
24%
26%
28%
30%
32%
2000 2001 30 April 2002
New Europe
International
(Euro mln)
USA
Italy
30st Apr. 2002
2001(1) Inv.Perf.(2)
of which Institutional (3)
Net Sales
111,049
21,742
85,580
5,731
2,683
1,044
+2,478
+1,836
-140
+276
+671
+111
-1,623
-940
-742
-156
+44
+15
111,904
22,638
84,698
5,851
3,398
1,170
(3) Excluding Proprietary Funds
25
...AND A STRONG EFFICIENCY IMPROVEMENT LEADING TO A 30% EBIT INCREASE
Revenues (1)
130 138+37%
Managerial EBIT
35
48
Managerial C/I Ratio
73%65%
112.2 112.5
Average AuM
46.4 49.1
Revenues on Av. AuM, bp(2)
(1) Revenues from pure Asset Management
Managerial EBIT on Av. AuM, bp (2)
37
1Q01
131
72%
110.5
47.3
1Q02/1Q01% ch.
+30%
1Q02/Av.01% ch.
Av.01 1Q02
1Q01 Av.01 1Q02
1Q01 Av.01 1Q02
1Q01 Av.01 1Q02
+0.3%
+1.8%
1Q01 Av.01 1Q02
+6%
+5%
(2) Annualised data
12.5
17.213.4
1Q01 Av.01 1Q02
26(*) Total Investment: Euro 120 mln (calculated with Euro/USD FX as at 10.5.2002: 0.915), approx. 8% of Total AuMs as of Apr.02
Creating an extensive Institutional Hedge Fund product provider
Exploiting current growth in Alternative Investment products with an established brand and worldwide distribution capability
Offering a complete set of Alternative Investment products: Single Strategy,Fund of Funds, Structured Products, Managed Accounts
Developing long only business in existing Momentum locations
Cost-saving in marketing & international distribution network development
Euro 1.5 bn AuM as of 31.04.2002
Strong brand in the FOHF market
Strong track record in FOHF products
Innovative FOHF product development in expanding marketplaces (e.g. Structured products)
Established distribution offices in London, Hong Kong, Israel and Australia
Euro 112 bn AuM Euro 503 mln AuM
(Alternative Assets) Unified investment
process and focus on risk management
Strong distribution network
Established operating platform to facilitate growth
PAI Dublin: single strategy products
PAI Milan: multi-manager provider in the Italian market
Strong Operational Risk Management
PIONEER brings VALUE CREATION Momentum* brings
MOMENTUM ACQUISITION PERFECTLYFITS PIONEER’S STRATEGY, COMPLETING THE PRODUCT RANGE AND REINFORCING THE DISTRIBUTION NETWORK
27
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
28
Customer volumes growth constrained by slight delay in macroeconomic pick-up and by tight pricing policy:
Selective Customer Loans growth: +1.5% yoy(2) (+9.6% y/y retail and corporate average volumes)
Customer Deposits: +2.7% yoy(2) (+4% y/y retail and corporate average volumes)
Net Interest Income
1Q01
154190
324359
52.5%
47.1%
Operating Income
Total Revenues
Cost/Income
207245
117 114
Non NetInterestIncome
+23.4%
-5.4 pp
(Euro mln)
OPERATING INCOME UP 23% Y/Y AND NET INCOME GROWTH AT +19% Y/Y (+23% AND +18% AT END 1Q02 FX RESPECTIVELY)
+23.4%
-2.6%
-2.6%
EFFICIENT COST CONTROL Staff costs down 1.1% at unchanged FX (-1.158
headcount reduction vs 1Q01) Tight procurement, centralised purchasing, outsourcing Real estate restructuring
INCREASED PRODUCTIVITY Total Revenues per employee up 16% at unchanged FX
from Euro 57 th. in 1Q01 to 66 th. in 1Q02
At end of March FX
At end of period FX(1)
Negative impact of conservative customer lending activity on commissions (-4.7% y/y)
Positive contribution of other income (+18.2% y/y) due to fees on current account packages
(1) Exchange ratio of 31 mar 02 for 1Q02, exchange ratio of 31 mar 01 for 1Q01
(2) End of period
1Q02
1Q01 1Q02
1Q01 1Q02
1Q01 1Q02
1Q01 1Q02
+10.8%
+10.1%
+18.4%
+17.2%
-5.7 pp
Perimeter: Group Pekao, Bulbank and Unibanka fully consolidated, Splitska at net equity with P&L impact of Euro 2.4 mln in 1Q01 and Euro 4.2 mln in 1Q02 in NE dividend figure
29(1) Balance due to Splitska Banka, consolidated by Net Equity Method
NEW EUROPE BANKING NET INCOME – UCI’s PORTION: EURO 54 mln (+12.5% y/y)
BULBANK 10%(Euro 5 mln)
INCREASED CONTRIBUTION TO GROUP’S NET INCOME FROM NEW EUROPE BANKS (+2 pp y/y), DIVISION’S C/I AT EXCELLENT LEVEL THANKS TO RESTRUCTURING
GROUP PEKAO 80% (Euro 43 mln)
Total Division (1)
Total Revenues, (Euro mln)
Operating Income, (Euro mln)
Uni Banka
Group Pekao
Bulbank
9
4
15
8173
330
C/I Ratio, % 60.745.147.5
359
190
47.1
ROE,% 11.411.118.6 18.4
(2) Calculated at Unchanged FX as at the end of March 2002
* Formerly Pol’nobankaSPLITSKA 8% (Euro 4 mln)
UNIBANKA* 2% (Euro 1 mln)
Differently from FY01 Splitska is
consolidated by net equity method
% Ch. y/y on Tot. (2)
+10
+23
-57 bp
+92 bp
30
Net Doubtful Loans
OVERALL ASSET QUALITY OF THE DIVISION PRESERVED THANKS TO PEKAO’S SELECTIVE LENDING POLICY AND EFFECTIVE RECOVERY ACTIONS
Net NPLs and Doubtful Loans as % of Total Net Loans
9.0
2001 1Q02
9.2
2.5 2.8
restated
78.6
2001 1Q02restated
78.6
54.6 56.8
Coverage ratios
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
Net NPLs
876 -3.3
+6.2240
Dec. 2001*
% ch. on
Dec.’01(Euro mln)
847
255
1Q’02
* Restated
Selective and conservative lending policies (weight of net non-performing and doubtful loans on total loans nearly stable)
Improvement of coverage ratios
Implementation of new lending rules and procedures, active monitoring
Effective recovery actions
31
New IT systems in Pekao and Bulbank to be completed by 2003
REVENUE GROWTH, RISK CONTROL AND INCREASED EFFICIENCY TO BE SUPPORTED BY THE IMPLEMENTATION OF NEW PROJECTS
“Credit Excellence Project” to improve credit process and monitoring in all NE banks
New common platform for card processing to increase economies of scale and to enhance competitive advantage
Divisionalisation to lead to improved commercial effectiveness (for Pekao to be completed by June 2002)
Product enlargement (current account packages, investment products, pension funds, life insurance, cards)
32
1Q2002 Group Highlights
Divisional Reporting
Italian Commercial Banking
Wholesale Banking
Investment Banking
Asset Management
New Europe Banking
Conclusions
Agenda
33
SUMMING UP
S3 project well on track
Strong innovation capability results in high value added products for corporate and retail customers
Business diversification enhances the Group’s revenue generation capability (+3.4% on 2001 quarterly average)
Good cost control (+0.4% on 2001 quarterly average), C/I Ratio at excellent levels (51%)
Stable total doubtful loans with higher coverage ratios
Good Net Income growth on 2001 quarterly average (+10.3%), in line with our expectations and targets
34
Annexes
35
1Q02 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
1Q01 % ch.
Administrative costs (incl. depr.)
Net income -3.1
1,288
1,169
2,457
175
30
+7.0
-0.2
+3.3
414
+1.7
n.m.
1,242 +4.3
1,215 +2.2
Other net provisions* 30 -33.3
44.9
Goodwill depr. 64 +0.0
1Q02
44.9
1,251
1,286
2,537
1,295
1,242
178
-16
401
20
64
(Euro mln)
Minorities 124 +4.8130
Taxes 438 -1.1433
(*) Including provisions to general banking risk fund
% ch. on Avg. 01
+10.3
+2.7
+4.1
+3.4
-7.3
n.m.
+0.4
+6.7
-72.2
-7.6
Avg.01
1,218
1,235
2,453
1,289
1,164
192
54
364
72
69
+2.6127
+9.8394
44.5
36
ASSET QUALITY BY DIVISION
Coverage ratios
-on total gross NPL, %
-on tot. Gross doubtful loans, %
Total gross doubtful loans
Italian banks
Dec.01(2) 1Q02
New Europe banks
Other (1) Group
1Q02 1Q02 1Q02
Gross NPL% change on Dec. ‘01
Gross NPL/Tot. Gr. Loans,%
Net NPL/Tot. Net Loans,%
2,761 1,119 245 4,125
+9.4 +3.4
2.7 10.3 1.7 3.4
1.5 2.5 0.6 1.6
4,309 1,928 457 6,694
1.8 +1.4
46.3 78.6 64.9 56.1
37.8 54.6 43.7
(1) Mainly Locat, UniCredit Factoring and Parent Company
Net Doubtful Loans/Tot. Net Loans,%
3.22.7 9.0 1.5
53.4
(Euro mln)
2,805
2.8
1.6
4,363
46.8
37.9
2.8
+1.6
+1.2
+6.5
+1.8
1,192
11.5
2.8
1,962
78.6
56.8
9.2
Dec.01(2)
268
1.6
0.6
465
62.7
1.3
54.0
4,265
3.6
1.6
6,790
56.7
44.5
3.3
% change on Dec. ‘01
Dec.01(2) Dec.01(2)
(2) 2001 restated
37
1Q02 RESULTS BREAKDOWN BY DIVISION
Italian banking
Wholesale banking
New Europe banking
New Initiatives
Corp. Centre
& elisions
Group total
Interest margin (incl. div.) 990 1,2514 245 1 11
Net non interest income 913 1,286395 114 3 -139
Total revenues 1,903 2,537399 359 4 -128Administrative costs (incl. depr.) 953 1,295148 169 19 6
Operating income 950 1,242251 190 -15 -134Net provisions and other costs
126 1985 50 - 17
Tax expenses 355 43393 49 - -64
Net income for The Group 381 401146 54 -15 -165
of which: Staff 537 76883 87 3 58
Goodwill depreciation - 64- - - 64
Net income 467 531153 93 -15 -167
Extraordinary Income -2 -16- +2 - -16
(Euro mln)
38
UBM T.Lab
ASSET MANAGEMENT (Pioneer+UCI Capital Italia)
Interest margin (incl. div.) 19 -7 12 -8 4
Net non interest income 197 62 258 137 395
Total revenues 216 55 270 129 399
Administrative costs (incl. depr.)
39 19 57 90 148
Operating income 177 36 213 39 251
70
0 0 0 0
Net income for The Group 101 21 122 24 146
of which: Staff 24 6 30 52 83
Net income 101 21 122 31 153
Extraordinary Income 0
15 86 7 93
(Euro mln) TOTALINVESTMENT BANKING(1)
TOTALWHOLESALE BANKING (2)
Tax expenses
C/I Ratio, % 18 34 21 69 37
WHOLESALE BANKING DIVISION INCOME STATEMENT
(1) Balance due to roundings and to Euro Capital Structures (52% owned by UBM) (2) Balance due to roundings
39
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)UNI BANKA (72,4%)
Group PEKAO (53,2%)
BULBANK (85,2%)
224 10 7 245
114
359
169
190
93
18,4%
47,1%
3
9
6
4
2
11,4%
60,7%
5
15
7
8
11,1%
45,1%
106
330
157
173
18,6%
47,5%
81
872382
643359
Net loan loss provisions 482047
Tax Rate 34%28%36% 21%
(1) Including Euro 4.2 mln due to Splitska Banka consolidation at net equity; balance due to roundings
(Euro mln)
(UCI stake)
6
Net income (UCI’s portion) 54143 5
Recommended