Credito Emiliano S.p.a. · MIL:CE
Credito Emiliano — Credem — Investor Presentation (January 2010)
26 slides from Credito Emiliano's investor presentation, Jan 11, 2010
Slide 1: Business Plan 2010-2012 Conference Call
Business Plan 2010-2012 Conference Call Adolfo Bizzocchi 1/11/2010
Slide 2: Agenda
Agenda • Current Scenario • Credem’s Positioning CRESCERE PER • 2010-2012 Business Plan CONTINUARE AD ECCELLERE Business Plan 2010-2012 January, 11th 2010 2
Slide 3: Recent Past
Recent Past GDP Euribor 1 Month (deseasonalized data) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 07 08 09 7 7 8 8 9 se 9 m 7 m 8 m 9 07 08 09 7 8 9 -0 -0 -0 l- 0 l- 0 l- 0 0 0 0 -0 -0 -0 v- v- v- n- n- n- p- p- p- ay ay ay ar ar ar ju ju ju no no no ja ja ja se se m m m Mutual Funds and Sicav’s Net Inflows
Slide 4: Current Scenario
Current Scenario Industrial Output Index Unemployment Rate (deseasonalized data) (deseasonalized data) GDP Grocery and non-grocery sales index in (deseasonalized data) large and small retailers DESEASONALIZED DATA NON DESEASONALIZED DATA SALES SALES INDEX SALES SALES INDEX INDEX EVOLUTION INDEX EVOL
Slide 5: Current Scenario
Current Scenario THE EXPECTATION OF A SLOW RECOVERY, WITH A FURTHER ASSETS DETERIORATION, ESPECIALLY AFFECTING SMALL-MEDIUM SIZED BANKS, IS SHARED BY THE MAJORITY OF ITALIAN BANKS CEOs Slow recovery Which are, for 32 Italian banks Assets deterioration CEOs, the main risks for banks during next 3 yea
Slide 6: Current Scenario
Current Scenario The uncertain scenario is furtherly fostered by a strong activity conducted by regulatory bodies and affecting (at local and international level) every business area Banking Fees: • Maximum Overdraft Fee Cancellation • New European payment services regulation (SEPA) Asset Management
Slide 7: Agenda
Agenda • Current Scenario • Credem’s Positioning CRESCERE PER • 2010-2012 Business Plan CONTINUARE AD ECCELLERE Business Plan 2010-2012 January, 11th 2010 7
Slide 8: Credem strengths – “hard” features (1/3)
Credem strengths – “hard” features (1/3) Core Tier 1 9.0% 8.5% 7.3% 7.0% • Solid capital ratios: Core Tier 1 ratio 6.0% among the highest in the industry, no 3.0% hybrids in TIER I capital 0.0% Credem Average Italian Average Italian quoted banks quoted banks (ex T- Bond) Cost of credit 1.0% 0.9% 0.8
Slide 9: Credem strengths – “hard” features (2/3)
Credem strengths – “hard” features (2/3) Abaxbank Financial Assets Held for 4000 3,201 Trading (EURm) 3000 • The now completed reorganization of 2,142 Investment Banking e Wealth 2000 1,683 1,214 Management business areas 1000 (Abaxbank and Euromobiliare 0 Alternative Investments restructuring, 2008
Slide 10: Credem strengths – “hard” features (3/3)
Credem strengths – “hard” features (3/3) 700 621 • Strong increase of 600 25 the distribution 509 network in the 500 21 recent past (branches average 400 growth rate during the 552 300 last 3 years: +22%; 447 employees average 200 growth rate during the last 3 years : +15%) 100 throughout a mix of 0
Slide 11: Credem strengths – “soft” features (1/3)
Credem strengths – “soft” features (1/3) • Strong focus on customer relationship, offering high quality service and adopting a distinctive approach that proves to be effective all over the territory: Credem is first among retail banks in the country, (and second, overall, after Banco Posta) in terms
Slide 12: Credem strengths – “soft” features (2/3)
Credem strengths – “soft” features (2/3) Customers’ good knowledge generates results: the most remarkable evidence is represented by the shift from AuM into deposits experienced in 2008 and the reversal, that took place in 2009. Both movements were supported and driven by Credem’s network, no signif
Slide 13: Credem strengths – “soft” features (3/3)
Credem strenghts – “soft” features (3/3) average ABI Credem Growth rate* 2008 High quality in service and customers relationship results also in a remarkable customers’ base increase in the recent average ABI past as highlighted by Osservatorio ABI on retail customers Growth rate* 2007 (*) New custo
Slide 14: Agenda
Agenda • Current Scenario • Credem’s Positioning CRESCERE PER • 2010-2012 Business Plan CONTINUARE AD ECCELLERE Business Plan 2010-2012 January, 11th 2010 14
Slide 15: Expected scenario
Expected scenario Assumptions 2008 2009 2010E 2011E 2012E MSCI Europe (y/y growth) -45.5% 25%* FTSE Italy all-share index (y/y -48.8% 19.7%* growth) GDP UEM 0.6% -4.0% 0.7% 1.2% 1.6% GDP Italy -1.0% -4.9% 0.5% 1.2% 1.5% Deposits from customers and 13.8% 11.0% 4.2% 4.1% 4.1% bonds (y/y growth) Asset
Slide 16: Strategic focus
Strategic focus In the short term the main focus will be on extracting value from the existing distribution network. Current though environment could offer to best equipped players the opportunity to gain momentum in the competitive scenario In the mid/long term, a further expansion is confirmed as
Slide 17: Value generation by growing more than the industry
Guidelines MARKET SHARES INCREASE BY ANTICIPATING INDUSTRY TRENDS HIGHER COST EFFICIENCY EXCELLENCE IN RISK CONTROL AND CAPITAL ADEQUACY Value generation by growing more than the industry, while maintaining a strong cost control Business Plan 2010-2012 January, 11th 2010 17
Slide 18: Market shares increase by anticipating industry trends
Market shares increase by anticipating industry trends AuM AuM evolution: 100 = AuM at 31/12/2008 180 From 11.5 EURbn (at the end of 2008) to 19.9 EURbn (at the end of 2012E): 160 • Credem Plan CAGR 2010-2012: 10.4% 140 120 • Industry CAGR 2010-2011: 6.6% 100 2008 2009 2010 2011 2012E Credem Italian
Slide 19: Total Income
Total Income Net Interest Income Non Interest Income 1,200 1,170 916 557 800 353 EURm 400 563 613 0 2008 2012E Net Interest Income 61% 52% on Total Income Non Interest Income 39% 48% on Total Income Business Plan 2010-2012 January, 11th 2010 19
Slide 20: Higher cost efficiency
Higher cost efficiency Employees 5,977 6,000 5,809 5,750 5,600 5,500 5,250 5,000 2008 2009 2012E Target is to recover efficiency from headquarters structures and optimize recent investments, to strengthen distribution capacity Employees from 5,809 (at the end of 2009 after Abaxbank restructuring) to
Slide 21: A more efficient structure
A more efficient structure IT Investments breakdown 100% 7% 11% Other 15% 18% Compliance 75% 50% 58% 40% Business 25% 31% Efficiency 21% 0% 2008-2009 2010-2012E Yearly avg. 15.1 18.6 investments (EURm) Total investments in 30.2 55.8 the period (EURm) IT investments, during next 3 years, will signifi
Slide 22: Operating Costs and D&A
Operating Costs and D&A 750 708 Expected Inflation rate 2010-2012: 1.84% 671 36 CAGR 2010-2012: 6.6% 35 600 244 CAGR 2010-2012: 0% 244 450 EURm 300 392 428 CAGR 2010-2012: 0.8% 150 0 2008 2012E Payroll costs Other Op. expenses D&A Cost Income ratio (including D&A) 73.2% 60.5% Cost Income ratio 69.4%
Slide 23: Excellence in risk control and capital adequacy
Excellence in risk control and capital adequacy 0.60% 0.6% Gradual decrease of cost of credit, 0.44% in line with historical trends, 0.4% 0.34% while increasing customers’ loans, as 2012 figure is 28% higher than 0.2% 2008 0.0% 2008 Ob. 2009 2012E Loans 17.6 EURbn 22.6 EURbn Business Plan 2010-2012
Slide 24: Excellence in risk control and capital adequacy
Excellence in risk control and capital adequacy 12% 11.0% 11.2% Stable capital ratios, 9.6% despite higher requirements (loans 9% 8.0% 7.9% CAGR 2010-2012: 7.2% 8.5%) 6% Very solid capital base, only sustained 3% by profits generated by the business 0% 2008 Ob. 2009 2012E Tier 1 Tier Total Business
Slide 25: Value generation
Value generation Net Operating Profit Net Profit EURm EURm 500 462 250 206 200 157 150 245 250 100 50 0 0 2008 2012E 2008 2012E Net Operating Profit increasing substantially during the 2010-2012 triennium 2012E Net Profit target at 206 EURm compared to 157 EURm in 2008, despite the expectation of 20
Slide 26: 2012 Income Statement
2012 Income Statement EURm 2008 2012E CAGR 09-12 Total Income is expected to grow 6.3% CAGR over the period, mostly dragged by Net Interest Income 563 613 2.1% Net Fees (CAGR 10.8%) Net Fees 295 445 10.8% Trading -6 57 n.a. Costs will remain almost stable. CAGR is Other 64 55 -3.7% 1.4% despite 2008