Credito Emiliano S.p.a. · MIL:CE
Credito Emiliano — Q3 2006 Earnings Presentation
30 slides from Credito Emiliano's earnings presentation, November 2006
Slide 1: 3Q06 Results
3Q06 Results 1 Investor Relations November 2006
Slide 2: Credem at a Glance; 3Q06 Results; 2006-2008 Business Plan
• Credem at a Glance • 3Q06 Results • 2006 – 2008 Business Plan • Attachments 2 Investor Relations November 2006
Slide 3: Facts
Facts Commercial Banking Wealth Management Investment Banking Other CREDEM 100% 98.5% 50% * 100% 100% Life Insurance 100% 100% 50% * 59.6% 100% FIDUCIARIA Spa General Insurance 100% * na 100% * 100% 100% 100% 100% 100% • Italy's 14th largest banking group and 12th largest asset manager among banking
Slide 4: Shareholding's Structure
Shareholding’s Structure Pact among 226 More than 2,900 other shareholders shareholders Main Shareholders Maramotti family 35.5% Pictet Cie 4.9% Eredi Savioli 2.9% Fincorrad 2.1% Allianz Subalpina 1.7% 72.9% 27.1% CREDEMHOLDING Free Float on Milano Stock Exchange 72.3% 27.7% CREDEM 4 Investor Relati
Slide 5: Stock Performance
Stock Performance 1997 1998 1999 2000 2001 2002 2003 2004 2005 ROE 11.6% 13.5% 8.5% 21.3% 14.6% 13.5% 11.1% 14.8% 23.2% EPS 0.22 0.26 0.17 0.51 0.39 0.40 0.35 0.51 0.90 Dividend per share 0.08 0.10 0.12 0.18 0.20 0.20 0.20 0.25 0.50 Payout ratio 39.2% 37.9% 68.6% 35.3% 50.8% 50.0% 57.1% 49.0% 55.8%
Slide 6: Network and HR
Network and HR Group branches as at 30 June, 2006 FY05 3Q06 Credem Branches 433 437 B.ca Euromobiliare Branches 22 21 66 2 Total Branches 455 458 16 18 Corporate centres 40 41 6 125 Credem Points 24 25 11 5 2 Banca Euro financial stores 36 37 3 18 1 1 50 43 2 FY05 3Q06 32 Banca Euromobiliare advisor
Slide 7: Main Financials and Ratios
Main Financials and Ratios FY05 3Q05 3Q06 Assets under management (AUM) 18.0 bln 17.6bln 17.1bln Assets under custody (AUC) 25.0 bln 24.5bln 25.6bln (AUM+AUC)/Total Customers Business 66.7% 67.5% 65.1% AUM/AUC 72.0% 71.8% 66.8% Direct Deposits 8.8 bln 8.3bln 9.2bln Loans to customers 12.7 bln 11.9bl
Slide 8: Credem at a Glance; 3Q06 Results; 2006-2008 Business Plan
• Credem at a Glance • 3Q06 Results • 2006 – 2008 Business Plan • Attachments 8 Investor Relations November 2006
Slide 9: Tableau de Bord
Tableau de Bord Total income Cont’d Operating costs +10.2% 500 298.0 +6.2% 800 696.8 768.0 423.5 700 400 175.7 +11.3% 600 +11.1% 157.9 446.9 300 EURm 500 402.1 EURm 400 200 +3.2% 300 +9% 265.6 274.0 200 100 294.7 321.1 100 0 0 3Q05 3Q06 3Q05 3Q06 Net interest income Non-interest income Payroll costs
Slide 10: Tableau de Bord
Tableau de Bord Total direct loans (net of repos) Funding (net of repos) 16 56.3 +3.4% 60 54.4 14 50 12 24.5 25.6 +4.8% 10 40 EURbn EURbn 8 +13.3% 30 6 13.3 11.8 17.6 17.1 -3.0% 20 4 2 10 +10.0% 12.3 13.6 0 0 3Q05 3Q06 3Q05 3Q06 Direct AUM AUC Cash Capital adequacy Distribution channels 600 9.0% 62
Slide 11: Revenues
Revenues EURm FY05 3Q05 3Q06 % yoy Net Interest Income 375.6 294.7 321.1 9.0 Net interest income has improved by 9.0% yoy. The spread Commercial spread 3.08% na 3.32% +24bps* (+24bps) improved over the last 9 months (*) as a result of the stronger focus on “core” loan sectors. Net fee and commissi
Slide 12: P&L
P&L EURm FY05 3Q05 3Q06 % yoy •EBITDA up 16.5% Net interest income 375.6 294.7 321.1 9.0 •EBIT +19.0% Non interest income 569.7 402.1 446.9 11.1 Total Income 945.3 696.8 768.0 10.2 Payroll -370.3 -265.6 -274.0 3.2 Administrative expenses -216.1 -157.9 -175.7 11.3 Operating costs -586.4 -423.5 -449.7
Slide 13: Relevance of core business
Relevance of core business Net profit breakdown The diversification of the Group’s activities and the focus on EURm FY05 3Q05 3Q06 Contribution at 3Q06 “core” businesses have helped generate significant profits. Core business companies 185.7 135.1 146.2 87.1% 87.1% of Net Profit has been generated b
Slide 14: Customers Funding
Customers Funding EURm FY05 3Q05 3Q06 % yoy Deposits 8,758 8,341 9,203 10.3 Bonds 3,738 3,992 4,365 9.3 “Managed” funding overall has improved 1.5% yoy. Total direct (net of repos) 12,496 12,333 13,568 10.0 The reduction in mutual funds that has been affecting the entire Portfolio management 5,0
Slide 15: Customers Loans
Customers Loans EURm FY03 FY04 FY05 1H06 Small Business 2,540 3,100 2,962 3,030 The increase has been sustained by all “core” segments (Retail, Retail 2,834 3,480 4,044 4,532 Small and Middle Corporate). Business Unit Retail volumes, that account for more than 60% on Large Corporate 2,574 1,865 1,59
Slide 16: Credem at a Glance; 3Q06 Results; 2006-2008 Business Plan
• Credem at a Glance • 3Q06 Results • 2006 – 2008 Business Plan • Attachments 16 Investor Relations November 2006
Slide 17: Past Strategy
Past Strategy 1990 – 1999 2000 – 2003 2004 – 2006 ACQUISITIONS ORGANIC GROWTH PROFITABILITY • Acquisition of more than 30 • Divisionalisation • Value creation from acquired small banks • 113 new branch opened potential • Acquisition in 1994 of • 38 Corporate Centres created • Central role of Credem’
Slide 18: 2005 Actual vs 2006 Targets
2005 Actual vs 2006 Targets EURm 2003* 2005 2006 CAGR CAGR ACTUAL ACTUAL PLAN 03-05 03-06 Total income in 2004-2005 period saw an average annual Net Interest Income 307 376 373 10.6% 6.7% growth rate of 9.3% versus expectations of 8.3% Non Interest Income 483 570 632 8.6% 9.3% Total Income 791 945 1
Slide 19: 2005 Actual vs 2006 Targets: Total Customers Business
2005 Actual vs 2006 Targets Total Customers Business Cont’d Total Customer Business (net of repos and bonds for institutionals) in the past two years period saw an average growth rate around 8% (lined up with the market performance). CAGR CAGR 03-06 Although market conditions weren’t very favorable,
Slide 20: New Business Plan Guidelines
New Business Plan Guidelines STRATEGY GOALS Excellence in value creation over Central role of Core Business time • Commercial Banking and Wealth Management • ROE consistently above 17% activities • Net Profit growing 11% cagr to 243 €million • Target segments of clientele are medium high standing in
Slide 21: Drivers
Drivers • 82 new branches, 2 new Corporate Centers, 9 closings. A larger, more up-to-date network. Areas to focus Selective increase for the growth: Nord East, North West, Tuscany and Marche. of the distribution network • New retail distribution model to aim at an higher effectiveness. Addition of m
Slide 22: Plan Targets
Plan Targets Total income Cont’d Operating costs CAGR CAGR 1,200 1,158 800 674 945 7.0% 700 4.7% 586 900 600 649 250 500 EURm 216 EURm 570 4.5% 5.0% 600 400 300 300 200 370 423 509 376 10.6% 4.6% 100 0 0 2005 2008E 2005 2008E Net interest income Non-interest income Payroll costs Admin. expenses Prof
Slide 23: Plan Targets: Distribution channels
Plan Targets CAGR Distribution channels Cont’d Funding (net of Repos) 600 62 +2 80 6.8% 42 67.5 60 +2 500 40 60 55.3 400 27.7 3.5% EURbn + 73 net 25.0 300 40 528 455 82 openings 22.7 8.1% 200 18.0 9 closures 20 100 3.7 8.0 29.0% 8.6 9.0 1.5% 0 0 2005 2008E 2005 2008E Branches Corporate centres Point
Slide 24: 2008 P&L
2008 P&L EURm 2003* 2004 2005 2008E CAGR Total Income CAGR will reach 7% with a strong 05-08 contribution from the interest income. Operating costs, including D&A are expected to increase by 5% reflecting increasing commercial investments estimated in the Net interest income 307 317 376 509 10.6% tr
Slide 25: Network expansion
Network expansion 2004 2005* 2008E Distribution networks will grow through: •73 new branches net increase (82 new openings and 9 Credem Branches 441 433 504 branches closings) B.ca Euromobiliare Branches 22 22 24 Total Branches 463 455 528 •2 new Corporate Centres Corporate Centres 39 40 42 •2 new F
Slide 26: Attachments
• Credem at a Glance • 3Q06 Results • 2006 – 2008 Business Plan • Attachments 26 Investor Relations November 2006
Slide 27: 2006 – 2008 Business Plan Scenario
2006 – 2008 Business Plan Scenario 2004 2005 2006E 2007E 2008E Expected growths GDP Eu 1.8% 1.4% 2.0% 1.7% 2.0% GDP Italy 1.1% 0.1% 1.3% 0.9% 1.3% Direct Deposits 7.3% 8.5% 5.7% 4.7% 4.1% AUM 6.7% 12.6% 5.3% 8.2% 7.4% AUM Banks 0.9% 9.0% 4.3% 4.4% 7.8% Bank Loans 5.5% 8.8% 8.0% 6.6% 6.2% Interest ra
Slide 28: Credit Quality
Credit Quality • Credit quality consistently high, with an NPL ratio of 0.20% • The management and collection of loans securitized in late 2000 (0.22% at September 05) continued with success. As at 30 June, 2006: - Euro 189 mln collected, vs. a maximum Euro 122 mln forecast; 5.0 - senior tranche (ex
Slide 29: Risks
Risks €million FY04 FY05 3Q06 Market Risk (99% - 10 days)* • Market risk management mostly pertains to Credem, Abaxbank and Euromobiliare SIM Credem - average 5.2 5.5 16.5 • Overall risks are modest and fairly stable over time - maximum 11.0 9.7 25.3 3.3 Abaxbank - average 3.3 3.7 3.8 - maximum 6.1
Slide 30: Ratings
Ratings Ratings Standard & Poor’s Ratings Fitch-IBCA Short Term A2 Short Term F1 Long Term A- Long Term A Outlook Positive Outlook Stable Last review: 16 January ‘06 Individual B “.. The ratings on Credem reflect its strong financial profile, based on very strong asset quality, highly satisfactory c
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