Fabrizio Marchetti Head of Corporate and International Division

Transcription

1 Seminar in Honour of Italian Multinational SME s Fabrizio Marchetti Head of Corporate and International Division London, Friday 11th November

2 AGENDA Page 1. BANCO POPOLARE GROUP 3 Banco Popolare Group Geographical mix Highlights on Group results Conclusions on H Business Plan /15: guidelines Large Banca Popolare Project International Division Network International Division Network: Values and Goals 2. IMPORTANCE OF THE REGIONAL CONNECTION AND RELATIONSHIPS WITH COMPANIES SERVICES/PRODUCTS IN SUPPORT OF INTERNATIONAL DEVELOPMENT AND THE ROLE OF BANKS IN THIS PROCESS RECEPTIVENESS OF THE UK MARKET AS FAR AS HIGH QUALITY ITALIAN COMPANIES ARE CONCERNED CAPABILITY IN FINANCING COMPANIES AND SUPPORT IN THE EXPLORATORY PHASE 26 2

3 AGENDA Page 1. BANCO POPOLARE GROUP 3 2. IMPORTANCE OF THE REGIONAL CONNECTION AND RELATIONSHIPS WITH COMPANIES SERVICES/PRODUCTS IN SUPPORT OF INTERNATIONAL DEVELOPMENT AND THE ROLE OF BANKS IN THIS PROCESS RECEPTIVENESS OF THE UK MARKET AS FAR AS HIGH QUALITY ITALIAN COMPANIES ARE CONCERNED CAPABILITY IN FINANCING COMPANIES AND SUPPORT IN THE EXPLORATORY PHASE 26 3

4 Banco Popolare Group Today, Banco Popolare is the 1st Italian popolare bank per branch number (1.992) and the 4th largest Italian bank by total assets. Excellent geographical position, with an average branch market share of 10% in the main regions in northern Italy and a deeply rooted network. Core business focused on retail and SME clients (~70% of total revenues) with approximately 2.3 million(**) customers and has employees (*). The commercial banking activity of Banco Popolare is carried out by its regional banks which operate under specific local brands: BANCA POPOLARE DI VERONA - SGSP established in 1867 BANCA POPOLARE DI NOVARA established in 1871 BANCA POPOLARE DI LODI established in 1864 CREDITO BERGAMASCO established in 1891 CASSA DI RISPARMIO DI LUCCA PISA LIVORNO established in 1834 (*) data as of 30/9/2011 (**) data Source: Retail BP 4

5 Banco Popolare Group : geographical mix - branch network located mainly in wealthy northern Italy, with strong positioning in attractive areas Market share by number of branches (31/12/10) (i) Customer loans by geographical area (30/06/11) >15% 5-15% 1.5-5% >0-1.5% 0% Centre South and Islands RoW North- West North-East Market share by loans and deposits in some of the main regions (as at 30/06/2011) (ii) Veneto Lombardy Emilia Romagna Piedmont Liguria Tuscany Loans Deposits 7.58% 8.48% 7.00% 6.01% 7.63% 6.58% 6.71% 6.17% 8.74% 9.40% 7.28% 7.47% ITALY 5.33% 4.79% (iii) Group franchise at a glance Leading player in the Italian domestic market, mainly concentrated in the wealthiest regions of Italy, with good market shares in both loans and deposits: North West: 7.06% (loans) and 6.33% (deposits); North East: 6.57% and 6.28%. Strong base of domestic retail customers. Excellent geographical position: Economically resilient northern Italy accounts for 74.8% of the Banks of Territory branch network (more than 85% including Tuscany) as at 31/12/2010. Franchise quality. Well-recognized brands in core market regions (i) Branch market shares are calculated as of 31 Dec and are based on a total of 1,992 branches of the Banks of the Territory. (ii) Referred to the so-called Core Business, composed of Non-financial Corporates, Small Business and Households. (iii) Deposit market shares are based on the Bank of Italy s Statistical Bulletin and hence comprise banks fund-raising in the form of deposits (with agreed maturity, sight, overnight and redeemable at notice), savings certificates, CDs, current accounts and repos. 5

6 Banco Popolare Group Highlights on Group results Consolidated net income reaches 191.4m in H of which: Banco Popolare Standalone net income: 237.8m of which: Net contribution of Italease: m Normalised Group net income at 172.9m. (1) Growth volumes of the branch franchise: Loans to customers: +2.4% y/y and +1.1% vs dec.10 Direct customer funds: +2.3% y/y and +2.3% vs dec.10 Household mortgage loans (granted): +7.0% y/y Good operating performance: Net Interest Income at 886m (-4.1% y/y) Commissions at 654m (+1.8% y/y) Satisfactory liquidity profile: institutional funding needs fully covered for 2011 and for most of Operating Income at 1,885m, in line with H Operating costs under control (+0.8% y/y). Excluding extraordinary costs related to the headcount reduction plan registered in Q (equal to 6.6m), the change is +0.2%. In H1 2011, in line with the headcount reduction plan, the total number of employees decreased by 365. Income Before Taxes From Continuing Operations at 315m (+14.7% y/y) Cost of credit risk at 79bps, substantially in line with the level of 2010, but improving in Q over Q (1) Net of Fair Value Option, PPA, gain/write-backs on government bond portfolio, profits from the disposal of equity investments and costs for the headcount reduction plan. 6

7 Banco Popolare Group Conclusions on H The first half of 2011 has been characterized by: Capital strengthening ( 2bn capital increase and disposal of non-strategic stakes of equity investments). Good and strengthening of the liquidity position (wholesale bond maturities fully covered for 2011 and in good part for 2012). Good performance at operating and commercial level. Annualized cost of credit risk in H substantially in line with FY 2010, but improving on a quarterly basis. Generation of a normalized net income of 173mln. The Business Plan /15 and the Large Banca Popolare project are set to further strengthen the Group s financial profile in terms of capital, liquidity, asset quality and profitability. 7

8 Banco Popolare Group Business Plan /15: guidelines Efforts of the Territorial Divisions to be poured onto their historic franchise (one brand for each municipality). Strengthen the role of the branch through a higher focus on the relationship with SMEs and the development of the role of Branch Manager New customers Focus on the territory Satisfy customer needs, old and new, by: - Introducing new highly qualified and professional specialized managers to grant wide consulting services in order to better meet the customers needs - Introducing specific and innovative products services - Using integrated multi-channels that minimize the cost-to-serve Efficiency gains Growing together in a sustainable way, improving efficiency, and with a low risk profile Large Banca Popolare Project Increase in branch performance Branch restructuring by: - Rationalising and Reorganising the underperforming branches - Limiting the number - of new branch openings in strategic areas Innovation of customer service models for SMEs, Affluent and Mid Corporate customers Efficiency gains by: - Reduction of headquarter resources in favour of the commercial network. - Elimination of activity duplication between Holding, Banks of the Territory/Territorial Divisions and territorial areas. From optimisation of the federal model to the Large Banca Popolare Project - strong simplification of Group structure - simplification of Group corporate governance 8

9 Banco Popolare Group Large Banca Popolare Project Change in corporate governance: from dual to traditional order Simplification of the Group s governance, with return to a single Board of Directors Creation of a Board of Directors composed of a maximum of 24 resources, of which 3 up to 4 chosen among the top managers of the group; three of the executive members of the Board of Directors shall represent half of the members of an Executive Committee, which shall also be composed of the Chairman and the two Deputy Chairmen, for a total of 6 members Strengthening of the proximity to the territory, through the creation of a Local consulting and credit committee for each of the Divisions, with the function of expressing non-binding advisory opinions on major decisions regarding the local reality 9

10 Banco Popolare Group Large Banca Popolare Project As Is To Be 2010 Assets held for sale Separate legal entities Separated legal entities Large Banca Popolare Project Italease BP Holding Aletti Efibanca BP Holding Italease Aletti BPV BPN Creberg BPL CRL BP Česká R BP Croatia BP Hungary BP Lux. B. Aletti Suisse BP Cremona BP Crema Caripe Entities indicated in the dotted boxes are set to be merged in BPV Division BP Croatia BP Hungary BP Lux. B. Aletti Suisse BPN Division BPL Division Three Territorial Divisions Creberg 10

11 Banco Popolare Group Large Banca Popolare Project 4 balanced Divisions Divisions Business Division BPV L. Guidetti BPL d Division M. Di Maio Division BPN D. De Angelis a.i Staff Business Staff Business Staff Division CREBERG B. Pezzoni Business function presence: Retail, Corporate and Credit Staff functions reduced to the minimum in comparison with the Banks of he Territory model Territorial Departments (TD) T.D. BPV (Deputy) T.D. SGSP (Manager) T.D. BPL (Deputy) T.D. LuPiLi (Manager) T.D. BPN (Deputy) Staff Staff Staff Staff Staff Staff T.D. Centre- South (Manager) 6 Territorial Departments Main Territorial Department with role of Deputy of the Division heads Remote Territorial Department located in the centre of the territory served Areas Business Area Business Area Business Area Business Area Business Area Business Area Re-allocation and optimisation of the current Business Areas within the Territorial Departments of reference Introduction of light Business Areas to increase the commercial grip in dense areas Branches Branch Branch Branch Branch Branch Branch 11

12 Banco Popolare Group : International Division Network U.K. London Branch BP Luxembourg RUSSIA Moscow Rep. Off. CHINA Beijing Rep. Off. BANCA ALETTI Suisse BP Hungary CHINA Shanghai Rep. Off. BP Croatia D.D. CHINA Hong Kong Rep. Off. AT Leasing S.A. Romania INDIA Mumbai Rep. Off. 12

13 Banco Popolare Group : International Division Network: Values and Goals Our values in international activities: they are based on our customers needs. Our focus is to be linked to them in order to help them to increase and develop their international business. Products and Services: a high quality combination of efficient and personalised products and services is put at the disposal of customers and international correspondent Banks in the world. Our network: our branches, subsidiaries and Representative Offices are ready to help the enterprises who conduct their activities abroad. In Countries where there is not a direct presence of our bank, we can rely on a large network of correspondent banks with specific cooperation agreements signed by our Correspondent Banking Department. Our International Division Team: the spirit of enterprise is put in every project we develop, our Team is strongly committed in efficiency, flexibility, business originator efforts. Not last the ability to develop technological solutions to meet the precise needs of Customers. 13

14 1. Banco Popolare Group 3 2. Importance of the regional connection and relationships 15 with companies 3. Services/Products in support of international development 19 and the role of Banks in this process 4. Receptiveness of the UK market as far as high quality Italian 23 companies are concerned 5. Capability in financing companies and support 26 in the exploratory phase 14

15 Importance of the regional connection and relationships with companies Banco Popolare engages with the entrepreneurs of the region, firmly intent on responding in a practical way to companies real needs and requirements The objective is to create a way of providing financial oxygen in order to support companies in their working capital management in the context of longer cash conversion periods Working Capital Development The objective is to support companies in their investments to enhance productivity, including the most innovative energy saving methods Banco Popolare s support is based on four types of involvement The objective is to help companies to improve their capital structures with the provision of tailored financing Capital International The objective is to accompany Italian SMEs in the process of international development, through an array of banking services ranging from financing to insurance of the foreign commercial supply chain to real assistance and advice in every phase of the process 15

16 Importance of the regional connection and relationships with companies 70% of italian Companies export to foreign markets (*) 44% (of this 70 %) export to a single country This situation exposes this percentage of Companies to a loss of revenue should the foreign market concerned experience a crisis (a drop in demand or the entry of a stronger competitor), either for macroeconomic reasons (e.g. a misalignment in exchange rates as was the case when exports priced in Euros were negatively affected by an appreciation of the Euro against the USD) or geopolitical reasons. 70% of these companies export to Europe (*) source: Bank of Italy annual report COMPANIES WHICH EXPORT TO A SINGLE MARKET COMPANIES EXPORT Export more than a country Export to one Country outside Europe Export to one Country outside Europe OUTSIDE EUROPE OUTSIDE EUROPE 16

17 Importance of the regional connection and relationships with companies 56% (of this 70%) export to more than one country MARKET PRESENCE From 3 to 5 markets 2 markets Over 5 markets There is clearly a need to know how to work with companies as partners in their international endeavours. This includes not only the provision of financial support but also the provision of introductions, assistance and advice. 17

18 1. Banco Popolare Group 3 2. Importance of the regional connection and relationships 15 with companies 3. Services/Products in support of international development 19 and the role of Banks in this process 4. Receptiveness of the UK market as far as high quality Italian 23 companies are concerned 5. Capability in financing companies and support 26 in the exploratory phase 18

19 Services, Products to support the international development and the role of Banks in this process The development of vanilla and structured financing aimed specifically to assist in the development of international activity. Export finance products tailored individually to target markets. Support of commercial integration (Law 133/2008 Simest). Development of an additional service package (excluding banking services) in order to support SMEs international efforts. Creation and development of a network of collaboration agreements with professional services firms. 19

20 Services, Products to support the international development and the role of Banks in this process Organisation of regional information and educational events covering strategic themes in relation to SMEs exports in collaboration with national associations, regional entities, Sace and Simest. A widespread presence on the ground in the regions through the support of 50 specialised officials dedicated to international expansion. Synergies with Simest and Sace always in the logic of extending the support to the company involved in the international process. 20

21 Services, Products to support the international development and the role of Banks in this process The most important challenge for our companies is to grow and approach international markets in a very professional way, trying to find the best opportunities and to face and know in advance potential difficulties. An answer to them can be given not only at Institutional Level but also by banks which offer tools and professional skills in analysing foreign markets and mitigating those risks which can be faced in international relations. Banks can support the process of international development of companies as well as through their own domestic networks, with a direct presence in international markets, through representative offices, branches or subsidiaries. 21

22 1. Banco Popolare Group 3 2. Importance of the regional connection and relationships 15 with companies 3. Services/Products in support of international development 19 and the role of Banks in this process 4. Receptiveness of the UK market as far as high quality Italian 23 companies are concerned 5. Capability in financing companies and support 26 in the exploratory phase 22

23 Receptiveness of the UK market as far as high quality Italian companies are concerned The UK and the world The UK is a commercial and financial international HUB for Companies and Markets. London is one of the world's greatest financial and business capital. In recent years the UK has attracted a growing number of companies in their international growth projects, helping them to expand their activities not only in the Country, but in a large number of other Countries, being the UK a strategic crossway in Europe and outside. UK's success is its capacity to attract investors and companies and give them its internationally flavoured style. The UK provides an unrivalled and highly cost effective environment The UK is the sixth largest economy in the world, with a GDP of $2,174 billion where the service sector represents over ¾ of GDP. Setting up in the UK The UK is the easiest place to set up and run a business in Europe (World Bank: Doing Business 2011). It ranks first in Europe and fourth in the world for ease of doing business. (In the period : new 44 companies opened subsidiaries in the UK). The UK tax and regulatory environment The UK is an internationally competitive location for tax. Advantages include one of the lowest main corporate tax rates in the EU. 23

24 Receptiveness of the UK market as far as high quality Italian companies are concerned The UK labour market The UK s labour market is one of the worlds most flexible. The UK search and innovation Innovation is key to world competitiveness and the cornerstone of successful business. The UK holds an extraordinary record of innovations and scientific discoveries that transform the lives of people and businesses. Quality of life in the UK The UK residents enjoy a high standard of living, education and recreation.. Finding business premises in the UK The UK has one of the most open and dynamic commercial property markets in Europe, with companies benefitting from a wide range of property options, stable rents and flexible lease arrangements. Finance and incentives in the UK The UK has the best developed financial services sector in Europe and with London one of the world s leading financial centres. Financing options range from specialist seed funds through to a full listing on the London Stock Exchange. 24

25 1. Banco Popolare Group 3 2. Importance of the regional connection and relationships 15 with companies 3. Services/Products in support of international development 19 and the role of Banks in this process 4. Receptiveness of the UK market as far as high quality Italian 23 companies are concerned 5. Capability in financing companies and support 26 in the exploratory phase 25

26 Our capability in financing companies and support in the exploratory phase Since 1991 Banco Popolare, London Branch, is able to meet any requirement in terms of the satisfactory execution of local and international banking transactions: CORPORATE ACCOUNTS Collection of funds, Cash Management, Internet Banking DEPOSIT GATHERING OPERATIONS AND TREASURY MANAGEMENT Corporate deposits, Issuance of commercial paper and short term certificates of deposit HEDGING OPERATIONS FX operations on a spot and fwd basis (spot, swaps, out-right, options), IRS and CCY swaps SHORT AND MEDIUM TERM FINANCING Trade finance (documentary operations, opening of L/Cs, back to back L/Cs, standby L/Cs and every type of international guarantee) 26

27 Our capability in financing companies and support in the exploratory phase In addition to the normal banking operations, supported by decades-long knowledge of the UK market, Banco Popolare London benefits from close collaboration with the primary local institutions (Italian Chamber of Commerce in the UK, the Italian Embassy, London&Partners), as well as advisors, such as Studio Belluzzo, with proven skills in different areas (legal, tax and start-up). There is also in progress the drafting of operating agreements with the UK Trade & Industry through its representative at the British consulate in Milan. For Banco Popolare, is an additional way to support and advice at no cost Italian companies who want to explore the possibility of developing business in the British market. 27