Cariparma 2014 Inaugural Covered Bond Market Issue. November PDF Free Download

Cariparma 2014 Inaugural Covered Bond Market Issue November 2014

Disclaimer This document has been prepared by Cassa di Risparmio di Parma e Piacenza S.p.A. ( Cariparma ) for discussion and information purposes only and is only intended to provide a general overview of the proposed transaction and should not be used for any other purpose. Failure to comply with this directive may result in a violation of the Securities Act of 1933, as amended (the Securities Act ), or the applicable laws of other jurisdictions where it would be unlawful (the Other Countries ). None of Cariparma or its affiliates, advisers, dealers or representatives takes any responsibility for these materials or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it by any person. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of Cariparma or its affiliates, advisers, dealers or representatives, or any other person, shall have any liability whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its contents or otherwise arising in connection with this document. The information, opinions, estimates and forecasts contained herein have not been independently verified and are subject to change without notice. They have been obtained from, or are based upon, sources we believe to be reliable but Cariparma makes no representation (either expressed or implied) or warranty on their completeness, timeliness or accuracy. Nothing contained in this document or expressed during the presentation constitutes financial, legal, tax or other advice, nor should any investment or any other decision be solely based on this document. This document is for preliminary informational purposes only, limited in nature, and is not an offer to sell or the solicitation of an offer to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information presented herein does not comprise a prospectus for the purposes of EU Directive 2003/71/EC (as amended by the EU Directive 2010/73). Without limiting the foregoing, this document does not constitute an offer to sell, or a solicitation of offers to purchase or subscribe for, securities in the United States or Other Countries. The securities referred to herein have not been, and will not be, registered under the Securities Act or the laws of Other Countries and may not be offered or sold within the United States or Other Countries or to, or for the account or benefit of, U.S. persons (except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act) or Other Countries persons. Cariparma does not intend to register any portion of any offering in the United States or in Other Countries or to conduct a public offering of securities in the United States or Other Countries. All of the numerical data provided in this document is derived from Cariparma s consolidated and corporate financial statements or from its registration document and annual report and financial review updates, unless otherwise indicated. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. By receiving this document you agree to be bound by the foregoing limitations. Forward-Looking Statements This communication may contain forward-looking information and statements about Cariparma Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words believe, expect, anticipate, target or similar expressions. Although Cariparma. s management believes that the expectations reflected in such forwardlooking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Cariparma, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, those discussed or identified in the annual reports and other filings with the French Autorité des marchés financiers made or to be made by Cariparma. Cariparma undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. 1

Contents 1 2 3 4 5 6 7 8 Executive Summary Cariparma Crédit Agricole Group Cariparma Crédit Agricole Group Financial Highlights Italian Housing Market Cariparma Crédit Agricole Group Residential Mortgage Business Cariparma OBG Programme Appendix Contact list 2

1 Executive Summary (1/2) Cariparma Crédit Agricole Group Highlights Cariparma Crédit Agricole Group: 86.5% controlled by Crédit Agricole of which 76,5% Crédit Agricole S.A. 8 th largest retail banking group in Italy by number of branches, with 1.7 million customers Operating in the prosperous regions of Northern Italy Group scope including Cariparma, FriulAdria, Carispezia, Crédit Agricole Leasing Italia Total assets: 50.6bn, of which 37bn in loans outstanding at H1-14 Net Income Group share: 70m at H1-14 Long-term ratings of Baa2 and BBB assigned by Moody s and S&P respectively, the highest bank ratings among Italian banks Transaction Inaugural Covered Bond market issue under Cariparma Covered Bond Programme, created in July 2013 Provisional rating of A2 assigned by Moody s 3

1 Executive Summary (2/2) Transaction rationale for Cariparma Cariparma is funded mostly by customers through deposits and bond issues with an average maturity of 3 to 4 years The Italian covered bond market offers Cariparma Access to longer maturities of 5 to 12 years Diversification, with a broad market investor base Currently, favorable market conditions Accessing this market on a regular basis is a way of minimising and stabilising Cariparma s cost of funding Transaction rationale for Crédit Agricole S.A. This transaction is in line with Crédit Agricole S.A. s strategy limiting cross-border funding flows 4

2 Cariparma Crédit Agricole Group Crédit Agricole Group: Customer-focused Universal Bank* An integrated banking model to originate and provide a comprehensive range of financial services to all our customers Individual customers Farmers Small businesses Local authorities Corporates Institutional customers 39 Regional Banks Poland CIB Savings management & Insurance Specialised services Crédit Agricole Group: a powerful sales force In the French market: Leader in all segments: Regional Banks and LCL aggregate penetration rates: Individual customers: 36 % 1 SMEs: 45 % 2 Small businesses: 42 % 3 Farmers: over 85 % 4 Stable market shares since 2010: Lending: 21 % 5 of which 17.1% for the Regional Banks Deposits: 25 % 5 of which 20.5% for the Regional Banks 1,400 branches in Italy and Poland Leading bank in France with 21 million customers and 7,000 branches nationwide Leading financial partner of the French economy with 400bn of loans outstanding to customers A bank with 6 million customers and 1,900 branches mainly in urban areas 8 th largest retail bank in Italy by branch network size, leading foreign retail bank in the regions it serves, which are the most prosperous in Italy 1. Aged 18 plus Source: OPERBAC 2012 CSA 2. Overall penetration rate in 2013 (entities with 10 to 1,000 employees and over 1.5m of revenues) Source: "Les Entreprises et les Banques 2013", TNS Sofres 3. Penetration rate for personal or business banking in 2012 (entities with less than 10 employees, excluding agriculture) Source: "Pépites 2011-2012", CSA 4. Penetration rate for business banking in 2012 Source: "Etude Installation des Agriculteurs, volet global", ADquation 2012. 5. Total Regional Banks and LCL, businesses and households, end- 2013 Source: Banque de France, Surfi statements, Crédit Agricole S.A. * Source: 20 March 2014 Medium Term Plan 6

2 Cariparma Crédit Agricole Group Crédit Agricole Group in Italy Business lines in Italy 2016 ambitions* Retail Banking Asset Management & Insurance Continue Cariparma s transformation and step up its development Transform our distribution models Reorganise and modernise the branch network Become a leading digital bank in Italy: develop multi-channel and online banking Gain market shares in lending and deposits and increase cross-selling of Group products Continue efforts to industrialise processes Centralise some back office functions, automate the branches, etc.: c.720 departures by 2015 (9% of 2012 headcount) Industrialise lending and collection processes Develop Group convergence (shared applications, tools, etc.) A 180m investment programme to sustain our development ambitions over the plan period 2013-2016 Cariparma revenues: +5% p.a. Corporate & Investment Banking Specialized Financial Services Develop priority markets through Group synergies Develop capability in the intermediate-sized enterprises segment through synergies between Cariparma and CACIB Become a leading bank in farming and agri-food sector in Italy Strengthen the wealth management and private banking offer through synergies between Cariparma and CA Private Banking Develop the insurance business and particularly death & disability Synergies in Italy in 2016: c. 500m Continue to control risks Cariparma: decrease in cost of risk of c.60bp (normalisation of economic conditions, result of lending policies implemented since the crisis) Agos: continued reduction in cost of risk ahead of initial plan FGAC: maintain a low cost of risk (c.80bp) Decrease in cost of risk: c.40% for Agos and Cariparma * Source: 20 March 2014 Medium Term Plan 7

2 Cariparma Crédit Agricole Group A group operating in Italy s most prosperous regions 1.7 million customers 1.5 million individual customers 240,000 small business customers 15,000 corporate customers Exposure to individual customers, specifically the high net worth segment, above the Italian banking sector average High contribution from clients Revenue per customer > 920 36bn in on-balance sheet deposits at H1-14* 54bn in off-balance sheet savings at H1-14* 37bn in loans outstanding at H1-14* 8 th largest retail bank in Italy with 920 branches (including Private, Enterprise and Corporate Centers) Backbone in Italy for all the Group's businesses Operating in the prosperous regions of Northern Italy which have a higher GDP per capita and a lower unemployment rate than the French average GDP per capita by region, in K in 2012 GDP per capita 30,000 GDP per capita 29,000-30,000 GDP per capita 25,000-29,000 GDP per capita 18,000-25,000 GDP per capita 18,000 34.5 27.9 19.7 27.3 1. Includes deposits and bank bonds (based on Bank of Italy data) Source: Italian statistics, 2013 33.1 33.8 31.5 28.1 29.5 23.3 29.1 25.6 22.3 29.2 20.0 16.8 16.4 17.2 18.0 16.6 On-B/S deposits market share, December 2013 1 >10% 5-10% 2-5% 1-2% <1% Not present 3.0% 6.7% 1.2% 8.3% 1.8% 1.9% 0.7% 14.0% 1.1% 5.2% * Source: Consolidated half-year Financial report as at 30th June 2014 8

2 Cariparma Crédit Agricole Group Organisation & History 2006 Significant development of Crédit Agricole Group s International retail banking business line with the announced acquisitions of Cariparma, FriulAdria and 202 Banca Intesa branches in Italy. 13.50% 76.50% 10.00% 2011 Continuation of the expansion strategy in Italy, with the acquisition of 96 branches and Carispezia from Intesa Sanpaolo S.p.A. * 85.00% 80.17% 80.00% 2014 Medium Term Plan Italy * Cariparma Crédit Agricole Group scope includes: Cariparma, FriulAdria, Carispezia and Crédit Agricole Leasing Italia 9

3 Cariparma Crédit Agricole Group Financial Highlights Results at 30.09.2014 as disclosed in Crédit Agricole S.A. Q3-14 Business performance Continued rise in production in life insurance and mutual funds: customer funds up 3.4bn (+18.2%) YoY On-balance sheet deposits: down 1.1% QoQ in Q3, up 1.6% YoY in Q3 Loans outstanding: up 0.8% YoY, with home loans up 5.1% Loan-to-deposit* ratio: 89% Branch network transformation continued Net income Group share: 32m in Q3-14 Revenues: up 3.7% YoY in Q3 Improvement since Q1-13 Improvement of margin thanks to fall in average cost of deposits and to investment of liquidity surplus with the Group's other Italian subsidiaries Fee and commissions income still underpinned by off-balance sheet deposits Expenses under control: up 2.3% YoY in Q3, down 2.8% YoY in first 9M Continued improvement in cost/income ratio Cost of risk: up 18.2% YoY in Q3, up 8.0% YoY in first 9M Impaired loans ratio: 12.6%, with coverage ratio of 44.2% (including collective reserves) Customer assets 86.1 87.1 88.1 91.4 51,4 50,9 52,1 54,1 56,1 34,7 36,2 36,0 35,7 35,3 Sept 13 Dec. 13 Mar-14 June 14 Sept 14 On-balance sheet Off-balance sheet Customer business ( bn) 89.8 33,0 33,1 33,2 33,3 33,3 Sept 13 Dec. 13 Mar- 14 June 14 Sept 14 Contribution to Crédit Agricole S.A. results ( m) m Q3-14 Q3/Q3 9M-14* 9M*/9M** Revenues 410 +3.7% 1,219 +3.7% Operating expenses (230) +2.3% (691) (2.8%) Gross operating income 180 +5.6% 527 +13.7% Cost of risk (109) +18.2% (319) +8.0% Net income 43 +21.0% 133 +15.0% Net income Group share 32 +26.1% 96 +14.6% Cost/income ratio* 56.1% (0.8pp) 56.7% (3.8pps) * Excluding items recognised by Cariparma in its local consolidated financial statements at 31/12/13 after closing of Crédit Agricole S.A. financial statements, i.e. + 80m in revenues, o/w + 92m for revaluation of Bank of Italy shares and - 109m in cost of risk and tax consequences relating to these restatements ** After restatement in Q4-12 of additional provisions required by Bank of Italy recorded in the Corporate Centre in Q4-12 and in Cariparma s contribution in Q1-13 ( 39m) *** According to the local perimeter Loans Net income for Cariparma Group* and *** : 136m in 9M-14 11

3 Cariparma Crédit Agricole Group Financial Highlights Construction of Cariparma Crédit Agricole Group P&L at H1-14 H1-14 in m Contribution to Crédit Agricole S.A. results* Crédit Agricole Leasing Italia & interco. results Cariparma Credit Agricole Group local scope* Non-recurring tax impact re. Bank of Italy equity stake Cariparma Crédit Agricole Group local scope Net interest income 491 14 505 505 Net Commission Income 331 (1) 330 330 Other Income (13) 22 9 9 Revenues 809 35 844 844 Staff Expenses (289) (2) (291) (291) Administrative Expenses (143) (1) (144) (144) Depreciation and Amortisation (29) (12) (41) (41) Operating expenses (461) (15) (477) (477) Gross operating income 348 19 367 367 Cost of risk (210) (9) (219) (219) Income before tax 138 10 148 148 Tax (48) (4) (52) (22) (74) Net income 90 6 96 (22) 74 Net income Cariparma Crédit Agricole Group share 86 6 92 (22) 70 Net income Crédit Agricole Group share 65 *Excluding items recognised by Cariparma in its local consolidated financial statements at 31/12/13 after closing of Crédit Agricole S.A. financial statements, i.e. + 80m in revenues, o/w + 92m for revaluation of Bank of Italy shares and - 109m in cost of risk and tax consequences relating to these restatements 12

3 Cariparma Crédit Agricole Group Financial Highlights Ranking at H1-14 NUMBER OF BRANCHES TOTAL VOLUMES (loans, on and off-balance sheet customer assets bn) 7,765 1,294 1,156 5,984 371 2,333 1,958 1,679 1,291 888 843 672 668 657 543 251 238 140 127 122 101 82 79 73 UNICR ISP MPS BP UBI * Excluding Private, Enterprise and Corporate Centers BPER BNL Gruppo * GCRP CARIGE BPM BPV CREDEM UNICR * ISP MPS UBI BP BNL ** Gruppo GCRP BPER BPM CREDEM BPV CARIGE *Unicredit: direct collection as at December 2013 (source: Il Sole 24 Ore) ** BNL Group: estimated total volumes. Indirect funding from customers is not provided in the Financial Statements COST/INCOME (%) NET DOUBTFUL LOANS*/NET LOANS (%) 72.9 7.1 7.2 55.5 56.5 57.0 58.7 60.2 61.7 61.7 63.5 64.3 64.7 2.7 3.8 4.0 4.0 4.0 4.3 5.1 5.7 5.8 50.3 1.6 ISP BPER GCRP BPM BPV UBI BNL Gruppo BP UNICR MPS CREDEM CARIGE CREDEM GCRP * Sofferenze BPM BNL Gruppo ISP UNICR UBI CARIGE BPV BPER BP MPS Source: First 12 Italian banking groups press realeases 13

3 Cariparma Crédit Agricole Group Financial Highlights Key Indicators at H1-14 ( m, %) LOANS ( m) FUNDING ( m) CAPITAL RATIOS ( m) Loans 36,567 o/w Crédit Agricole S.A. companies 2,800 o/w Individual Customers loans 14,259 o/w SME & Small businesses 12,934 o/w Corporates 3,896 Loans to banks 3,204 o/w to Crédit Agricole S.A. 2,869 On-balance sheet customer assets 35,970 From banks 5,648 o/w Crédit Agricole S.A. Group 4,708 o/w Crédit Agricole S.A. Group sub 770 o/w Crédit Agricole S.A. Group other 3,938 From ECB 800 30.09.2014 CET1* 2,550 2,595 Tier Total 3,095 3,159 RWA 23,782 23,030 CET1 ratio* 10.7% 11.3% Total reserves*** 9,279 o/w RMBS 3,466 o/w Covered Bond 2,314 o/w sovereign (BTP) portfolio 3,223 Total Capital ratio 13.0% 13.7% Off-balance sheet customer assets 54,242 RATIOS Cost/Income 56.5% S&P RATINGS** BBB * Phased-in ** Long-term ratings assigned to Cariparma S.p.A. capped at Italian Sovereign ratings *** Cash equivalent Source: Consolidated half-year Financial report as at 30th June 2014 Cost of Credit 115 b.p. Moody's Baa2 Coverage of NPL 38.3% Coverage NPL (including collective reserves) 44.9% Covered Bond provisional rating from Moody s A2 14

4 Italian Housing Market Volume adjustment completed / Price adjustment still under way Volumes reached a low point in 2013 1200000 1000000 Number of residential transactions 800000 Since the 2006 peak the number of residential transactions has halved Transactions forecast (source: Nomisma) shows a slow and progressive recovery starting from 2014 (+7.9% in 2014, +12.0% in 2015 and +5.6% in 2016) Transaction volumes in Q1-14 and Q3-14 increased by 4.1% vs. Q1-13 and Q3-13 (source: Agenzia delle Entrate); As a consequence, mortgage loan volumes increased by 8% in Q2-14 vs. Q2-13, the first increase since 2011 The fall in prices is expected to slow down The market is not characterised by excess supply. Public housing is limited Price adjustment has been slower than adjustment in volumes, but has accelerated in 2013, with a 19% fall from the 2008 peak The fall in prices (source: Nomisma) is expected to continue in 2014 (-4.6%) and 2015 (-1.2%); a turnaround is expected in 2016 (+1.4%) 600000 400000 200000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Ireland Spain France Italy Sources : HMRC, INE, Notaires, Nomisma, Crédit Agricole S.A. number of transactions 900 000 850 000 800 000 750 000 700 000 650 000 600 000 550 000 500 000 450 000 400 000 2 000 2 001 2 002 2 003 2 004 Source : Nomisma, Crédit Agricole S.A. Index 1996=100 300 250 200 150 100 Italy : residential transactions 2 005 2 006 869308 2 007-53,6% 2 008 2 009 2 010 Residential housing price 403124 2 011 2 012 2 013 estimations 2 014 516149 50 0 1995 1998 2001 2004 2006 2009 2012 2014 Germany Italy Spain France The Netherlands United Kingdom Portugal Ireland (rhs) Source : Oxford Economics, Ministerio de Fomento, INSEE, Halifax, Statistics Netherlands, Nomisma, Crédit Agricole SA 2 015 2 016 600 500 400 300 200 100 16

90 80 70 60 50 40 30 20 10 0 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 80% 70% 60% 50% 40% 30% 20% 10% 0% 4 Italian Housing Market A sound mortgage loan market: not oversized and low sustainable indebtedness The Italian mortgage loan market is small compared to that of other European countries Italian residential mortgages loans / GDP ratio = 23.1% vs. 40.2% for Euro area Italy is the third economy in the Euro area but only the fifth mortgage loan market 23% 361 43% 882 Mortgages loans (31 December 2013) 37% 1.018 59% 604 64% 387 3.858 40% The Italian household indebtedness rate is lower than that of international peers In addition, the high ownership rate (73%) limits both volatility and growth prospects of the mortgage loan market Supporting factors The Italian market is sustained by tax incentives regarding: Property restructuring (tax-deductibility) Buy to let (tax-deductibility from decree-law Sblocca Italia ) ECB monetary easing measures 200 180 160 140 120 100 80 60 40 20 % of disposable income Households residential indebtedness rate 0 03 04 05 06 07 08 09 10 11 12 13 Portugal Spain France Italy Germany The Netherlands United Kingdom Ireland Sources : Eurostat, Crédit Agricole S.A. 53.4% Italy France Germany Spain Netherlands Euro Aera Stock ( bn) Sources : ECB, Crédit Agricole S.A. Ownership rate Outstandings / GDP 63.1% 67.0% 67.1% 67.9% 70.2% 72.9% 75.0% 82.7% However, the weakness of demand should limit lending recovery Germany France Euro area Netherlands UK Ireland Italy Portugal Spain Sources : Eurostat, Crédit Agricole S.A.. Date: 2011 17

4 Italian Housing Market A sound mortgage loan market: cautious origination process Fitch, Mortgage and Housing Market Outlook, January 2014 A cautious origination process In Italy, the granting of a mortgage loan is based on the borrower s ability to repay and not on the value and quality of the housing asset. As a general rule, the ratio of repayments to income must not significantly exceed one third of the borrower s net income after tax Low risk characteristics of the loans Loans are almost always amortising, with constant repayments Although most housing loans have a floating rate, the share of floating rate with cap and fixed rate is increasing The average mortgage maturity has been fairly stable Loan-to-value (LTV) ratios are quite low and their increase has been limited with the crisis (from 65% in 2007 to 67% in 2013, source CA Eco) Non-standard and subprime lending is marginal Mortgage arrears are still increasing, though to a lesser extent: arrears increased by 8% YOY in 2013 compared to 9% YOY in 2012. This confirms the persistent constraints on borrowers income created by the general macroeconomic and unemployment challenges, although some sign of recovery is likely in early 2014. Performance deterioration should be moderate, also thanks to the average original LTV, lower than in many other European countries, but any clear reversal in performance trends will take time to become visible. Fitch expects the benefit of continued low rates to not fully offset the lagging effects of high unemployment, economic deterioration and of a slow recovery, putting some additional pressure on borrowers. 18

Contents 1 2 3 4 5 6 7 8 Executive summary Cariparma Crédit Agricole Group Cariparma Crédit Agricole Group Financial Highlights Italian Housing Market Cariparma Crédit Agricole Group Residential Mortgage Business Cariparma OBG Programme Appendix Contact list 19

5 Cariparma Crédit Agricole Group Residential Mortgage loan Business Highlights Cariparma Crédit Agricole Group: a significant player in Italian residential financing: About 12bn of mortgage loans at June 2014, about 1.4bn of annual production (2013) 2014 mortgage loans production: 1.2bn from January to September 2014 Market share of about 6% in Italy in 2014 (source: ABI) Cariparma Crédit Agricole Group mortgage loans risk level: Mortgage deed registration: 1st level mortgage deed registered is 150% of the loan amount At 30 June, 2014, 2.7% of NPL loans of which 1.3% of Sofferenze (doubtful loans). Provisioning policy: loan loss reserves 15% of NPL loans (doubtful + substandard loans) New mortgage loans (volumes in million) 165.4 149.6 137.7 146.9 147.6 121.9 98.0 102.2 103.5 83.4 83.2 101.2 91.8 1,489 1,377 1,374 1,273 1,333 1,092 890 991 968 891 843 735 735 50.0% 0.9% 1.6% 202.2 1,840 47.5% 55.6 43.7 545 403 164.2 131.7 153.3 132.8 1,545 1,368 1,168 1,242 Fixed rate Mix rate Floating rate with cap Floating rate without cap 187.7 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec New mortgage loans (number) 1,743 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 new mortgage loans interest rate type 2013 2014 2013 2014 20

5 Cariparma Crédit Agricole Group Residential Mortgage loan Business Well-established selection and risk management processes Origination process relies on the borrower s repayment capacity, which is assessed through a comprehensive risk analysis Direct / indirect financial promoters: 60% of the mortgage loans are originated directly by Cariparma s branches, while in 40% of cases, customers come from Indirect promoters. Both mortgage loans originated by direct and indirect promoters are analysed and monitored under the same policies / limits. At branch level: the manager of the branch prepares the mortgage application and enters the information into PEF (Pratica elettronica di Fido). Through PEF Cariparma (i) performs analysis on databases (CRIF, CERVED, DATABANK), (ii) checks compliance with credit policy, (iii) carries out the calculation of an acceptance rating, and (iv) defines the levels of decision-making autonomy for the approval of the file. Loan application goes through a fully standardised process Underwriting At the end of the process, PEF assigns to customers a synthetic assessment summarised by three categories ((i) positive, (ii) to be reviewed and (iii) refused, which determines the different procedures and the decision makers. Approval process: crossing (i) the outputs of the PEF system with (ii) the amount to be approved, the approval can be assigned at branch level or at central department level. On average, no more than 30% of the requests are approved at branch level. Property valuation: the asset to be financed is always subject of a technical report. Real estate appraisals: Cariparma uses only independent appraisers for its real estate appraisals. Borrower s age and type: maximum borrower s age at maturity < 80 years. Loan Term: maximum tenor of 30 years. Debt to net income ratio (DTI): installment / net income ratio can not exceed 30%, this limit can be waived only in exceptional cases on the basis of documented verification. Mortgage deed registration: 1st level mortgage deed registered is 150% of the loan amount (110% for employees). LTV: 80% of the value of the mortgaged property for the first home / 70% in the case of home loans brokered by brokerage company / up to 60% in case of restructuring, holiday home and properties located abroad (with mortgage collateral in Italy). The mortgaged property from the mortgage collateral must be insured against the risks of fire, lightning, explosion. Cariparma Crédit Agricole Group offers customers Crédit Agricole Home Protection Insurance, characterised by an annual premium with automatic renewal. The holders of the mortgage have the option to subscribe to further creditor protections. The value of the property is verified at least once a year, with possibility to use statistical methods to monitor the value and identify properties requiring a check. If statistical method shows a significant depreciation, a new appraisal is made. Lending Criteria Property risk Surveillance 21

6 Cariparma OBG Programme Italian Covered Bond legal framework Name of the instrument Legislation Asset Ring-fencing Integration Assets Main eligibility criteria for assignement Inclusion of hedge positions Mandatory Tests 1st claim on the cover pool in the event of insolvency of the Issuer Bankruptcy remoteness Dual Recourse Over-collateralisation Controls Compliant with UCITS 52 (4) Obbligazioni Bancarie Garantite (OBG) Law 80 14/5/2005 amending art 7-bis of Law 130/1999; Ministry Finance & Economy regulation 310 dated 14/12/2006 and Bank of Italy instructions issued 17/5/2006 Cover assets are segregated by law after the transfer to a separate entity Bank deposit <1yr up to 15% of cover assets EEA and Switzerland, LTV 80% for residential mortgage loans (60% for commercial mortgage loans) Hedge positions are part of structural enhancements intended to protect bondholders The Nominal Value (NV) of the Cover Pool must be at least equal to the NV of the outstanding OBG. The NPV of the cover pool must be at least equal to the NPV of the outstanding OBG. Interest deriving from the Cover Pool must be sufficient to cover interest due under the OBG. Any loans in arrears or delinquent must be excluded for the check of the mandatory tests. In case of issuer s default, OBG holders benefit from a priority claim on the assets included in the cover pool for all payments due under the covered bond. In case of issuer s insolvency, the OBG are not accelerated. Dual recourse both on the issuer and on the cover pool. In case of issuer s default and if the cover pool is insufficient for all payments due under OBG, OBG bondholders have a claim against the issuer ranking pari passu with the issuer s unsecured creditors Minimum over-collateralisation required to comply with the mandatory coverage tests. Voluntary over-collateralisation above the minimum OC protected. Supervision by Bank of Italy Ongoing controls by the asset monitor (including controls of mandatory tests) Yes 23

6 Cariparma OBG Programme Structural features and structure overview The Programme 8bn Covered Bond Programme: first issue in July 2013, with a 2.7bn retained issue (ECB purpose) November 2014: 2.7bn retained issue partially cancelled ( 1.5bn) Cover pool Currently outstanding : 1.2bn retained OBG Provisional rating: A2 from Moody s Mortgage loans transferred to Cariparma OBG srl Self-originated mortgage loans by Cariparma, BP FriulAdria and Carispezia; there are also loans originated by banks/branches purchased from Intesa SanPaolo Property located in Italy Covered bond Guarantee Transfers of Assets Repayment of Subordinated loan SELLERS CARIPARMA ORIGINATOR OBG SRL and SERVICER GUARANTOR SELLERS Purchase price Subordinated Loan BANK OF ITALY Supervision Covered bond Guarantee No arrears on the transfer date Current cover pool : 100% residential mortgage loans ASSET MONITOR ISSUER Over-collateralisation 7.5% committed over-collateralisation (OC) OBG Proceeds OBG Proceeds Current OC of about 40% Monitoring Mazars: Asset Monitor reporting to Bank of Italy MARKET INVESTORS AS INVESTOR 24

6 Cariparma OBG Programme Market risk monitoring Interest rate exposure Cover pool is mostly floating rate Floating rate for 1.2bn retained OBG Interest rate breakdown ( bn) 1,6 1,2 0,8 0,8 Asset and liabilities matching controls Semi annual regulatory stress tests Nominal Value Test Net Present Value Test Interest Coverage Test Amortisation Test* Fixed Floating with option Cover Pool Covered Bond retained Additional internal controls Regular monitoring based on cash flow model to check timely payment of OBG with cash from cover pool including overcollateralisation *To be performed only post OBG Guarantor event of default 25

6 Cariparma OBG Programme Cover Pool at end-september 2014 (1/3) Total mortgage outstanding cover pool 2,753,351,634 Substitute Assets 401,004,966 Number of loans 33,087 Average loan balance 83,216 WA Seasoning (month) 59 Remaining term (month) 222 WA cltv (Current Loan to Value) 49.42% 25.04% fixed Interest rates of the credit pool 24.78% with option 50.18% floating 100% Cariparma Crédit Agricole Origination Group (details below) By banks/branches as of May 2013 (transfer date) 5.5% 7.0% 7.3% ORIGINATION ( % of outstanding amount) By banks/branches as of September 2014 5.4% 7.0% 7.2% Breakdown by current LTV as % of outstanding amount 33.1% 16.6% 17.6% 17.1% 12.5% 2.5% 0.5% 0% - 40% 40% - 50% 50% - 60% 60% - 70% 70% - 80% 80% - 100% >100% Breakdown by outstanding amount (all loans) as % of outstanding amount 34.3% 31.2% 12.1% 11.3% 68.2% 69.1% 10.2% 12.7% 8.0% 3.5% Originated directly by Cariparma, FriulAdria and Carispezia under Cariparma Crédit Agricole Group Policies Originated by 173 Intesa SanPaolo branches before the acquisition in 2007 Originated by 96 Intesa SanPaolo branches before the acquisition in 2011 Originated by Cariparma and FriulAdria before 2007 (creation of the Group) 0-50,000 50,000-100,000 100,000-150,000 150,000-200,000 200,000-300,000 300,000 - over Originated by Carispezia before entry in the Cariparma Crédit Agricole Group (2011) 26

6 Cariparma OBG Programme Cover Pool at end-september 2014 (2/3) Breakdown by region as % of outstanding amount 19.0% 20.2% 7.87% 13.95% North 12.2% 7.7% 10.0% 6.8% 6.8% 9.9% 6.6% Centre 78.18% South 0.8% CAMPANIA EMILIA ROMAGNA FRIULI VENEZIA GIULIA LAZIO LIGURIA LOMBARDIA PIEMONTE TOSCANA VENETO ALTRO Breakdown by seasoning (months) as % of outstanding amount Breakdown by remaining (months) as % of outstanding amount 38% 29% 31% 24% 13% 14% 16% 18% 10% 7% 0% 12-24 24-36 36-60 60 0-120 120-160 160-240 240-280 280-320 320-360 > 360 27

6 Cariparma OBG Programme Cover Pool at end-september 2014 (3/3) Interest type as % of outstanding amount Breakdown by fixed Interest as % of fixed rate outstanding amount Breakdown with option, margin on Euribor 3M as % of with option outstanding amount Breakdown floating rate margin on Euribor 3M as % of floating rate outstanding amount 45.1% 42.7% 27.9% 23.5% 43.8% 25% 19.5% 25% 50% 4.6% 3.7% 3.8% 0.1% 15.4% 13.4% 0.2% 21.3% 10.4% 6.8% 16.0% 1.7% 0%-3% 3%-4% 4%-5% 5%-6% 6%-7% over 7% 0.0%-1.5% 1.5%-2% 2%-2.5% 2.5%-3.0% 3.0%-4.0% over 4.0% 0.0%-1.5% 1.5%-2% 2%-2.5% 2.5%-3.0% 3.0%-4.0% over 4.0% Fixed rate With Otpion Floating rate Payment type as % of outstanding amount Cover pool mortgage loan performance At end-september 2014: 0.5% Delinquent* loans: 4.8% of total cover pool (from which the installments in arrears represent just 0.04% of total Cover Pool) 4.8% Direct Debit Standing Order (RID) Cumulated Defaulted** loans: 0.6% of total Cover Pool No Doubtful loans in the Cover Pool as they are transferred out monthly Cash 94.7% * Delinquent loan means any Mortgage Loan in respect of which there is one or more installments due and not paid by the relevant Debtor and which has not been classified as Defaulted Loan. ** Defaulted Loan" means any Mortgage Loan which has been classified as "crediti deteriorati" pursuant to the Bank of Italy's supervisory regulations (Istruzioni di Vigilanza della Banca d'italia) and Cariparma s credit and collection policy. 28

6 Cariparma OBG Programme Summary Issuer Originator Guarantor Arranger Representative of CB holders Asset Monitor Rating Listing Programme Amount Cover Pool* Governing Law Maturity Compliant with UCITS 52 (4) CRR Covered Bond Label Cariparma Cariparma / BP Friuladria / Carispezia Cariparma OBG S.r.l. CA-CIB Zenith Mazars Provisional A2 from Moody s Luxembourg Stock Exchange 8bn Italian residential mortgages only Italian Law Soft bullet: 1 year extended maturity Eur 1 m + spread Yes Yes Membership expected Risk Weighting (Standard Approach) 20% Outstanding OBG* 1 series 1.2bn *As at 25 November 2014 29

7 Appendix Mortgage Loan Eligibility Criteria Receivables deriving from contracts Mortgage loans: 1) which are Residential Mortgage Loans having a weighted-risk below35% (standard approach) and the LTV at the time of transfer was below 80%; 2) governed by Italian law; 3) in relation to which there is no installment due and unpaid for more than 30 days; 4) in relation to which the borrower has paid at least one (1) installment in respect of the Loan; 5) which do not allow limitations on transfer; 6) in respect of which is fully elapsed the pre- amortisation period; 7) denominated in Euro; 8) in relation to which there is no installment due and unpaid; 9) whose debtor is a person resident in Italy and belongs to the economic category of consumer families; 10) secured by first level mortgage deed registration; 11) in relation to which the current principal balance exceeds 2,000; 12) in relation to which the underlying property is located in Italy; 13) excluding mortgage loans in relation to which the payment of the installments (including the principal component and the interest component) (i) shall be subject to suspension still in progress, or (ii) has been subject to suspension and, despite the suspension being over, accrued interest during the period of suspension has not yet been fully paid; 14) excluding mortgage loans to debtors classified as doubtful. 31

8 Contact List Pierre Debourdeaux +390521912048 Chief Financial Officer pierredebourdeaux@cariparma.it Stefano Marlat +390521913306 Head of Financial Management stefanomarlat@cariparma.it Arturo Cerbone +390521913179 Head of Capital Management arturocerbone@cariparma.it Cristian Segnani +390521913165 Capital Management cristiansegnani@cariparma.it Website: www.gruppocariparma.it CA-CIB Fabio Reali +390272303283 Head of Structuring Italy fabio.reali@ca-cib.com 33

Cariparma 2014 Inaugural Covered Bond Market Issue. November 2014