Credito Emiliano S.p.a. · MIL:CE
Credito Emiliano — Credem — Q1 2006 Earnings Presentation
26 slides from Credito Emiliano's earnings presentation, May 2006
Slide 1: Credem 1Q2006
CREDEM CREDEM 1Q2006 1 May’06
Slide 2: Group Profile, Results, History & Planning
CREDEM • Group Profile • Results • History & Planning 2 May’06
Slide 3: Credem at a glance
CREDEM Credem at a glance • Based in Emilia Romagna, one of Italian richest regions • Italy's 14th largest banking group • Italy's 12th largest asset manager • Listed on Milan Stock Exchange since 1997 and market cap around 3 billions • 456 branches in Italy • 700,000 customers and over Eur 70 bln i
Slide 4: S&P: outlook upgraded
CREDEM S&P: outlook upgraded 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,
Slide 5: Key financials data
CREDEM Key financials data FY05 1Q05 1Q06 Assets under management (AUM) 18.0 bln 16.1 bln 17.9bln Assets under custody (AUC) 24.9 bln 23.8 bln 25.6 bln (AUM+AUC) / Total Business 63.2% 62.8% 62.9% AUM/AUC 72.0% 67.7% 69.9% Direct Deposits 8.6 bln 8.0 bln 8.7 bln Loans to customers 12.6 bln 11.5 bln
Slide 6: Shareholding structure
CREDEM Shareholding 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% 72.6% 27.4% CREDEMHOLDING Free Float on Milano Stock Exchange 72.2% 27.8% CREDEM 6 May’06
Slide 7: Credem stock
CREDEM Credem stock 1997 1998 1999 2000 2001 2002 2003 2004 2005 No. shares (/000) 225,839 253,408 265,464 270,679 272,537 273,309 274,350 275,417 278,605 Net equity per share 2.07 2.34 2.27 2.55 2.86 3.08 3.23 3.64 4.00 Earnings per share 0.22 0.26 0.17 0.51 0.39 0.40 0.35 0.52 0.90 ROE 11.6% 13.5%
Slide 8: Business areas
CREDEM Business areas Commercial Banking Wealth Management Investment Banking Other CREDEM 100% 98.5% 50% 100% 100% * Life insurance 100% 100% 50% 59.5% 100% * FIDUCIARIA Spa Insurance 100% * na 100% 100% * 100% 100% 100% 100% * Not consolidated 8 May’06
Slide 9: Network, market shares and staff
CREDEM Network, market shares and staff No. of CREDEM Group branches as at March 31° 2006 1 65 Network FY05 1Q06 15 17 Credem and others 433 435 B.ca Euromobiliare 22 21 6 127 Branches 455 456 10 5 Business centres 40 40 3 Credem Points 24 24 3 18 1 Banca Euro financial stores 36 39 1 50 42 2 Staff
Slide 10: Group Profile, Results, History & Planning
CREDEM • Group Profile • Results • History & Planning 10 May’06
Slide 11: 1Q06 Results
CREDEM 1Q06 Results Total income Cont’d Operating costs 350 300 258.2 +16.0% +4.9% 250 222.6 200 149.6 EURm 142.6 +1.6% EURm 153.4 +17.6% 150 130.4 57.2 58.1 100 50 92.2 104.8 +7.1% +13.7% 85.4 91.5 0 -50 1Q05 1Q06 1Q05 1Q06 Net interest income Non-interest income Payroll costs Admin. expenses Profi
Slide 12: 1Q06 Results (cont'd)
CREDEM 1Q06 Results Total direct loans (net of repos) Cont’d Deposits & funding (net of repos) 16 14 80 12 70 11.4% 52.1 56.4 +8.4% 60 Euro bln 10 50 EURbn 8 25.6 12.8 40 23.8 +7.7% 6 11.5 30 4 17.9 20 16.1 +11.0% 2 10 12.1 12.9 +6.2% 0 0 1Q05 1Q06 1Q05 1Q06 Cash Direct AUM AUC Capital adequacy Dist
Slide 13: Revenues growing
CREDEM Revenues growing EURm FY05 1Q05 1Q06 % yoy Net Interest Income 375.6 92.2 104.8 13.7% Commercial spread 3.18% 3.19% 3.38% +19bps 414. Net fee and commission income 414.7 94.5 110.3 16.7% - of which: management and brokerage 302.5 65.7 80.0 21.8% - of which: banking services 112.5 28.8 30.3 5.
Slide 14: P&L
CREDEM P&L EURm FY05 1Q05 1Q06 % yoy Net interest income 375.6 92.2 104.8 13.7% Non interest income 569.7 130.4 153.4 17.6% Total Income 945.3 222.6 258.2 16% •€ 3.6 million from the sale of a minority stake in MTS in 1Q06; •€14 million from the sale of Banca del Garda IN 1Q05. Payroll -370.3 -85.4
Slide 15: Importance of core business
CREDEM Importance of core business %Contribution to EBITDA March 31st 2006 The diversification of the Group’s activities and the focus on “core” EURm Core business Other companies businesses have helped generate significant profits. companies Total income 85.8 14.2 84.8% of Net Profit has been gener
Slide 16: AUM doing well
CREDEM AUM doing well Customers funding EURm FY05 1Q05 1Q06 % yoy Deposits 8,622 8,050 8,736 8.5 Bonds 3,738 4,061 4,131 1.7 Total direct (net of repos) 12,360 12,111 12,867 6.2 Portfolio management 5,046 3,562 5,317 49.3 Mutual funds and SICAVs 10,705 10,448 10,365 -0.8 “Managed” funding overall
Slide 17: Home mortgage loans heading up
CREDEM Home mortgage loans heading up Customers loans EURm FY05 1Q05 1Q06 %yoy Short Term Loans 6,441 6,068 6,419 5.8 The increase has been sustained by all “core” segments (Private, Long Term Loans 4,441 3,667 4,703 28.2 Small and Middle Corporate). Leasing 1,719 1,667 1,723 3,3 Repos 117 35 192 n.
Slide 18: Excellent loan quality
CREDEM Excellent loan quality • Credit quality consistently high, with an NPL ratio of 0.16% • The management and collection of loans securitized in late 2000 (0.20% at March 05) continued with success. - Euro 182 mln collected, vs. a maximum Euro 115 mln forecast; 5.0 - senior tranche (ex Euro 100
Slide 19: Risks under control
CREDEM Risks under control Market risk (EUR/m) FY04 FY05 1Q06 • Market risk management mostly pertains to Credem, Abaxbank Credem and Euromobiliare SIM - average 5.2 5.5 12.1 - maximum 11.0 9.7 14.1 • Overall risks are modest and fairly stable over time.. 3. 3 Abaxbank - average 3.3 4.5 3.0 - maximu
Slide 20: Results by business line
Total income EBIT Net profit BUSINESS LINE (€ min) 2005 I1Q05| I1Q06) %yoy: 2005 I1Q05| IQ06) % yoy: 2005 IQ05} IQ06) % yoy Retail 561.9 133.0) 152.2) 14.4%:158.8 41.4) 52.8) 27.5%: 104.6 27.0) S4.7] 28.5% Corporate 126.4 30.1) 34.3] 14.0%: 71.0 17.0) 20.2) 18.8%: 50.8 9.9) 12.4) 25.3% Wealth Manage
Slide 21: Group Profile, Results, History & Planning
CREDEM • Group Profile • Results • History & Planning 21 May’06
Slide 22: History
CREDEM History • 1910 The bank was established as Banca Agricola Commerciale di Reggio Emilia (Emilia Romagna) • 1983 The bank acquired the current denomination of Credito Emiliano S.p.A. (Credem) and acquired Banca Belinzaghi di Milano, the first significant step taken towards the expansion at a na
Slide 23: 2004-2006 business plan: Strategy
CREDEM 2004-2006 business plan Strategy Central role of the core business • Commercial banking with strong wealth management • Focus on RETAIL customers of medium-high standing, small business and SMEs • To extract VALUE from acquired potential • After few years of sustained growth, the Group intend
Slide 24: 2004-2006 business plan: Drivers and Actions
CREDEM 2004-2006 business plan Drivers Actions • Rationalisation of the branches network with stronger focus on efficiency Target development with focus on profit • Improvement of customers potential and retention through CRM and cross selling • Strengthening of wealth management as flagship busines
Slide 25: 2006 targets
CREDEM 2006 targets Total income Cont’d Operating costs 1,200 CAGR 800 CAGR 1,005 7.1% 700 606 5.1% 900 819 600 522 500 237 EURm EURm 633 600 7.4% 208 4.3% 511 400 300 300 200 369 372 314 308 6.5% 100 5.6% 0 0 FY03 FY06E FY03 FY06E Net interest income Non-interest income Payroll costs Admin. expense
Slide 26: 2006 targets (cont'd)
CREDEM 2006 targets Distribution channels Cont’d Deposits & collections CAGR Market 600 80 8.6% 57 +3 68 54 500 38 43 +5 60 53 400 28.2 5.8% EURbn 300 40 23.8 462 473 +11 22.2 200 14.8 14.4% 9.8% 20 100 17.6 14.5 6.7% 4.5% 0 0 FY03 FY06E FY03 FY06E Branches Corporate centres Points & shops Direct AU