Intesa Sanpaolo S.p.A. · MIL:ISP
Intesa Sanpaolo — Investor Presentation (April 2011)
130 slides from Intesa Sanpaolo's investor presentation, Apr 6, 2011
Slide 1: 2011-2013/2015 Business Plan: Solid Value Creation for all Stakeholders
2011-2013/2015 Business Plan Solid Value Creation for all Stakeholders Basel 3: immediate competitive advantage for Intesa Sanpaolo Milan, 6 April 2011
Slide 2: Disclaimer
Disclaimer This document has been prepared by and is the sole responsibility of Intesa Sanpaolo S.p.A. (the “Company”, and together with its subsidiaries, the “Group”) for the sole purpose described herein. This document and the information contained herein does not contain or constitute an offer of
Slide 3: Disclaimer
Disclaimer This presentation includes certain forward looking statements, projections, objectives and estimates reflecting the current views of the management of the Company with respect to future events. Forward looking statements, projections, objectives, estimates and forecasts are generally iden
Slide 4: Preliminary remarks
Preliminary remarks The Business Plan sets out 2013 targets which are based on moderate macro-economic growth assumptions and include well-defined management actions (150 projects) 2015 projections which assume a gradually normalising macro- economic scenario for 2014-2015 and show the full re
Slide 5: Solid value creation
Solid value creation As a result of the €5bn capital increase, Intesa Sanpaolo is immediately fully compliant with what we believe will become the “new normal” for Basel 3, both in terms of liquidity and capital base (~10% Common Equity ratio(1)) Going forward, distribution in dividends of earni
Slide 6: The formula of our Business Plan
The formula of our Business Plan Highly sustainable revenues Solid value creation for Low risk Stronger + + profile + High liquidity + capital base = all stake- holders Productivity growth and strong cost discipline 5
Slide 7: Our Business Plan
Our Business Plan 1 Targets 22 Strategies 33 Action plans 6
Slide 8: Our 2011-2013/2015 Business Plan Main indicators
Our 2011-2013/2015 Business Plan Main indicators 1 2010-2013 CAGR/Δpp/Δbps Operating income 2010-2015 CAGR/Δpp/Δbps (€ bn) 6.1% 5.7% 19.6 21.7 16.4 3 4 5 Net adjustments Direct Customer Common equity ratio to loans/Loans deposits/Customer loans 2010 2013 2015 (bps) (%) (%) pro- -21bps -26bps ~10 10
Slide 9: Solid value creation for all stakeholders
Solid Solid value value creation creation for for all all stakeholders stakeholders (the (the Plan Plan doesn’t doesn’t include include extraordinary extraordinary transactions) transactions) (€ bn) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Net income 2.7 4.2 5.6
Slide 10: Strong increase in return on assets and further leverage reduction
Strong increase in return on assets and further leverage reduction 2010-2013 Δpp/Δbps 2010-2015 Δpp/Δbps 2013 Targets 2015 Projections Adjusted ROTE(1) ROTE rettificato Adjusted ROTE(1)(1) (%) +0.4pp (%) +2,5pp +2.5pp 12.2 12.6 14.7 12.2 2010 2013 2010 2015 pro-forma(4) pro-forma(4) x x Adjusted ROT
Slide 11: Substantial improvement in profitability without increasing the risk profile
Substantial Substantial improvement improvement in in profitability profitability without without increasing increasing the the risk risk profile profile Risk-return matrix Main competitors(1) High Global Commercial banks with investment banks significant geographical diversification Value creation
Slide 12: Sustainable revenue growth targets
1 Sustainable revenue growth targets …which may be exceeded 2010-2013 CAGR Net interest income 2010-2015 CAGR (€ bn) 5.0% 5.3% ~€1.5bndi €1,5mld 11.2 12.5 9.7 investments investimenti 2010 2013 2015 pro-forma(2) Operating income Increase in Net fee and (€ bn) growth- commission income 6.1% 5.7% (€ b
Slide 13: Sustainable revenue growth targets: conservative scenario
1 Sustainable revenue growth targets 2010-2013 CAGR …which may be exceeded 2010-2015 CAGR We have assumed a conservative economic scenario Operating income 2011-2013 2011-2015 (€ bn) Average yearly Average yearly 6.1% 5.7% growth growth 19.6 21.7 Euro area GDP 1.3% 1.6% 16.4 Italy GDP 0.8% 0.9% CPI
Slide 14: Productivity growth
2 Productivity growth …with some reserves available Personnel expenses 2010-2013 CAGR/Δpp 2010-2015 CAGR/Δpp (€ bn) 1.1% 1.1% ~€800m 5.5 5.7 5.8 investments 2010 2013 2015 pro-forma (2) Cost/Income Other (%) administrative expenses ~55 productivity -9.4pp -13.1pp Branch network (€ bn) and HR -2.9% -
Slide 15: Productivity growth: cost savings
2 Productivity growth …with some reserves available 2010-2013 CAGR 2010-2015 CAGR Cost savings of ~€770m after accounting for a cost increase of more than €500m due to the renewal of National Labour Contract and inflation -0.2% +0.2% +~€720m 2013 2015 2010 Total Total Total 2011-2013 Operating Opera
Slide 16: Low risk profile
3 Low risk profile …with some room to be more aggressive 2010-2013 CAGR/Δpp/Δbps Net adjustments to loans/Loans 2010-2015 CAGR/Δpp/Δbps (bps) -21bps -26bps 82 61 56 2010 2013 2015 pro-forma(2) VaR (€ m) 13% 8% ~20 projects(1) 54 55 to control/ 38 optimise risks 2010 2013 2015 pro-forma(2) Net Non-pe
Slide 17: High liquidity
4 High liquidity Minimum …with some room to be more aggressive requirement fully phased-in(4) Basel 3 Net interbank position (€ bn) 2010 pro-forma(1) 2013 2015 Customer deposits/ Customer loans BP (%) management threshold 106 104 103 (10) Short-term liquidity 2010 2013 2015 Short-term gap 6 projects
Slide 18: Further strengthening of the capital base
5 Further strengthening of the capital base …immediate full compliance with Basel 3 “new normal” Minimum requirement fully phased-in(5) Basel 3 Common equity ratio Tier 1 ratio (%) ~10 10.0 10.0 (%) 11.1 11.0 11.0 €5bn 7.1 8.5 7.0% 8.5% capital increase 2010 2011 2013 2015 2010 2011 2013 2015 pro- p
Slide 19: €5bn capital increase fully underwritten
€5bn capital increase fully underwritten Intesa Sanpaolo is already compliant with current Basel 3 regulations (a 7% Common Equity ratio) Intesa Sanpaolo could reach a Common Equity ratio of 10% (“new normal”) by 2015 using its own resources and by adopting a very conservative dividend policy an
Slide 20: Competitive advantages deriving from the capital increase
Competitive advantages deriving from the capital increase Becoming one of the most solid and liquid European banks gives Intesa Sanpaolo the following very important benefits SUBSTANTIAL ECONOMIC AND FINANCIAL ADVANTAGES Lower funding costs Fewer medium-long term bond issues Strengthening/supp
Slide 21: Rights issue overview
Rights issue overview €5bn Issuance of new ordinary shares with pre-emptive rights to all Amount current Intesa Sanpaolo shareholders Saving shareholders will also be entitled to subscribe for new ordinary shares Underwriting Full amount of the offering underwritten by leading international
Slide 22: Our Business Plan
Our Business Plan 11 Targets 2 Strategies 33 Action plans 21
Slide 23: Strategies evolve in the new Plan in keeping with our identity
Strategies successfully followed throughout the merger and the crisis evolve in the new Plan in keeping with the identity of our Bank By comparison with the past 4 years the emphasis now shifts: from MANAGING THE MERGER to DRIVING GROWTH Strategic choices are confirmed while continuing to evolve A
Slide 24: A real-economy Bank
A real-economy Bank (percentage of proprietary trading revenues below 1% of total) Investment banking revenues(1) Commercial banking revenues – Product companies(2) Commercial banking revenues – Distribution network(3) Revenue mix by business 2007 2010 2013 (%) (%) (%) 4 8 9 12 14 13 Retail & SMEs:
Slide 25: Sustainable profitability
Sustainable Sustainable profitability Operational performance Liquidity Risk Profile Sound Leverage Capital base 24
Slide 26: Geographical focus: Italy remains our main market
Geographical focus: international operations will grow but Italy will remain our main market The Italian market remains highly relevant given its great potential and the strong competitive advantages Intesa Sanpaolo is building 9 Italian regions represent one of the wealthiest European macro-regio
Slide 27: Italian regions among the wealthiest in Europe
Geographical focus 9 Italian regions represent today one of the wealthiest European macro-regions with great potential Export GDP per Industrial propensity Geographical areas capita(2) vocation(3) index(4) (Index numbers: Italy =100) 1 Top 9 Italian 119 124 134 regions(1) 2 Germany 112 118 179 3 Uni
Slide 28: Mezzogiorno regions also offer opportunities
Geographical focus Mezzogiorno regions also offer opportunities to exploit Mezzogiorno(1) regions a successful story In terms of tourism potential, Campania Δ 2003- 2003 2010 (ranked 3rd in tourism potential attraction 2010 Tourism index(2)) and Sicily (ranked 8th) are well positioned Branches 745
Slide 29: Globalisation offers Italy a great opportunity for growth
Geographical Geographical focus focus Globalisation Globalisation offers offers Italy Italy aa great great opportunity opportunity for for growth growth Italy has significant untapped growth potential driven by exports and globalisation The 4 strongest sectors of Italian Good defence of export marke
Slide 30: Italy to invest over €100bn in infrastructure
Geographical focus Italy is to invest more than €100bn in the coming years in infrastructure which will provide an opportunity for growth An aggressive program of investment in infrastructure could increase GDP by 2-3pp without jeopardising public accounts Private funds needed to finance infrastruct
Slide 31: Italian SMEs a major source of growth
Geographical Geographical focus focus Italian Italian SMEs SMEs represent represent aa major major source source of of growth growth and and cooperation cooperation for for those those banks banks able able to to meet meet entrepreneurs’ entrepreneurs’ needs needs Domestic SMEs: a valuable resource
Slide 32: Italian market has room for growth in banking products
Geographical focus The Italian market has ample room for growth in many banking products Compared to main European countries, the Italian banking system has extensive room for growth Main Products Indicators Italy European Δ countries(1) Current accounts Accounts / inhabitants 0.7 1.2 (76)% Credit c
Slide 33: Country's overall debt level not exceptional
Geographical focus The Country’s overall debt level is not exceptional compared with other countries Overall debt on 2009 GDP (%) Household debt/GDP Non-financial company debt/GDP Italian household assets: Government Debt/GDP 622% of GDP 88 340 335 330 320 310 306 288 87 273 258 106 158 99 130 104 9
Slide 34: Expansion plans outside of Italy
Geographical Geographical focus focus Expansion Expansion plans plans outside outside of of Italy Italy Organic strengthening in countries where the Group has a presence External growth focused either on countries where the Group already has a presence or on highly International Non-Italian attr
Slide 35: Strategic presence in Central-Eastern Europe and MENA
Geographical focus Strategic presence in Central-Eastern Europe and in MENA(1) area (n°) Ranking(2) Expected ISP ~8.4 million Customers growth market rate (3) share(4) ~1,750 branches INTESA SANPAOLO BANK ALBANIA Albania (3) 3.8% 13.0% PRIVREDNA BANKA ZAGREB Croatia (2) 2.4% 17.9% Russian BANCA
Slide 36: Organisational model confirmed
Organisational Organisational model model confirmed, confirmed, to to be be made made more more efficient efficient and and effective effective Non-matrix divisional model Banca dei Territori model Banca dei Territori Division CEO Product Divisional companies staff Chief Chief Chief Human Chief Risk
Slide 37: A Bank which embraces innovation at every level
A Bank which promotes and embraces innovation at every level Innovation will be a key element of success and development in years to come Competition is increasing in every industry and transformation is accelerating everywhere Globalisation places every competitive factor under pressure Some
Slide 38: Innovation initiatives: Nova+ and Start Up Initiative
A Bank which promotes innovation at every level There are multiple and comprehensive initiatives – 2 examples Nova + Intesa Sanpaolo Start Up Initiative Long-term financing of companies’ ideas and Transforming technological ideas in business projects through a dedicated credit product plans offe
Slide 39: What is needed to promote innovation
A Bank which embraces innovation at every level What is needed to promote INNOVATION Example: Innovation Unit 30 employees reporting to Chief Operating Officer and Divisions tasked with Assigning Assigning full-time full-time monitoring innovation trends, suggesting ideas and innovative solution
Slide 40: A Bank with a distinctive character
Bank Bank with with aa distinctive distinctive character character An An identity identity that that we we are are proud proud of of The character of the Bank, committed to growth and the development of both the economy and society while respecting its business targets, remains unchanged Strong co
Slide 41: Our Business Plan
Our Business Plan 11 Targets 22 Strategies 3 Action plans 40
Slide 42: Projects and investments of last 4 years starting to deliver
Many projects and investments implemented over the last 4 years are starting to deliver their full potential ~€1bn for ~€400m for the development branch upgrading of direct channels and new products 2007-2010 investments for more than €4bn More than €1.3bn for IT More than €500m for risk systems and
Slide 43: Large investment plan 2011-2013
Large investment plan to promote growth and productivity in the three-year period 2011-2013 ~€1.1bn for the upgrading of ~€400m for development of more than 1,000 branches “integrated multichannel and for the new Executive system” and new products Centre 2011-2013 investments of ~€4bn More than €1.2
Slide 44: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 43
Slide 45: Deep structural measures to increase productivity
Examples of projects for productivity Deep and structural measures to increase productivity Efficient management of turnover Resource re-deployment ~€770m Branch network rationalisation cost savings in 2011-2013 and channel optimisation three-year period The Banca Semplice project Completi
Slide 46: Project 8,000
Examples of productivity projects Project “8,000” AVA(1) on all central Total Group personnel structures and corporate (FTE staff) structure simplification Other Relationship (Governance Functions of HQ and Divisions) managers and Customer assistants ~101,000 ~98,000 -3,000 ~23,000 ~19,000 -4,000 42
Slide 47: Increase channel efficiency and effectiveness
BANCA DEI TERRITORI EXAMPLE Examples of productivity projects Increase channel efficiency and effectiveness 2010-2013 CAGR Ability to leverage an unrivalled distribution Evolution of number of branches network in Italy (~5,500(1) branches with over 16% market share) (Number of branches) 100-150 40
Slide 48: Banca Semplice project results
Examples of productivity projects Banca Semplice project has already delivered significant results in recent months Simplification of Increase in attribution of product offering responsibilities Example: from 6 current Increased credit granting account products to a single authority to the netwo
Slide 49: Banca Semplice project is accelerating
Examples of productivity projects Banca Semplice project is accelerating New modular products ABC Single Platform for the branch From 19 mortgage products to A single platform tailored by 2 which are tailored according Customer segment which allows to Customer needs Integrated commercial and ope
Slide 50: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 49
Slide 51: Sustainable revenue growth across all business areas
Sustainable revenue growth across all business areas 2013 vs 2010 Operating income growth 2010-2013 CAGR Extracting the Extracting the potential potential of of Banca Corporate & Investment dei Territori(1) Banking +5.7% Group revenues +5.2% (€ bn) +6.1% 19.6 16.4 Extracting the potential Extracting
Slide 52: Sustainable revenue growth
Sustainable revenue growth (€ bn) 2010 2010-2013 2013 pro-forma(1) CAGR Operating income 16.4 19.6 6.1% of which Net interest income 9.7 11.2 5.0% Net fee and 5.6 6.9 7.4% commission income Other revenues 1.2 1.5 9.2% (1) Pro-forma data consistent with the 2011-2013/2015 Business Plan scope Fi
Slide 53: Volume growth in Loans and Direct Customer Deposits
Volume Volume growth growth both both in in Loans Loans to to Customers Customers and and Direct Direct Customer Customer Deposits Deposits 2010-2013 CAGR 2010-2013 CAGR average average Direct Customer Loans to Customers Deposits (%) (%) Banca dei Territori 5.1 4.5 of which Retail Italy 5.4 4.2
Slide 54: ~€1.5bn of investments to foster growth
~€1.5bn of investments to foster growth 2011-2013 investments for growth (€ bn) ~0.5 ~1.5 ~1.0 Sustainable Innovation Total growth across all business areas 53
Slide 55: ~€720m of additional costs to foster growth
~€720m of additional costs to foster growth 2011-2013 costs for growth (€ m) ~480 ~720 ~240 Costs related Commercial Total to new development plan investments(1) of Business Units ~€450m for ~5,000 more personnel in commercial roles ~€100m to strengthen the presence of the Group abroad, investin
Slide 56: Extracting the potential throughout Banca dei Territori
Examples of projects for growth Extracting the potential throughout Banca dei Territori 2010-2013 CAGR 2013 vs 2010 Examples of implementation projects Operating Income growth(1) (€ bn) Increase in personnel dedicated to Customers 5.7% New service models 11.9 New Customer segmentation 10.1 S
Slide 57: Increase in personnel dedicated to Customers
Examples of projects for growth – Banca dei Territori Increase in personnel dedicated to Customers Total Banca dei Territori relationship managers ~34,000 +~4,000 FTE staff ~30,000 2010 2013 pro-forma(1) % of Banca dei Territori ~60% ~70% total personnel (1) Pro-forma data consistent with the 2011-2
Slide 58: New service models
Examples of projects for growth – Banca dei Territori New service models 2010-2013 CAGR “Individual Customer loans” project: increasing loan volumes Individual Customer loans – yearly volumes creation of simple “basic” products with the option for (€ bn) 8.3% Customers to purchase “accessories”
Slide 59: New Customer segmentation: Small Business example
Examples of projects for growth – Banca dei Territori New Customer segmentation – Small Business example Main goals Example of Small Business Customer segmentation Satisfy Customer needs optimising cost-to- Customer profiling into “Core”, “Micro Business” and serve for the following segments “Pr
Slide 60: Sales management optimisation
Examples of projects for growth – Banca dei Territori Sales management optimisation 2010-2013 CAGR/Δpp “CRM and commercial planning” project to increase Yearly average number of cross-selling according to Customer needs proactive commercial contacts adoption of a modern method of marketing (m) 2
Slide 61: Optimising pricing management
Examples of projects for growth – Banca dei Territori Optimising pricing management 2010-2013 Δpp Review of pricing approaches according to Customer sensitivity to the different features of products From July 2011 onwards, a new model for pricing management granularity of prices (reference pri
Slide 62: EVA approaches in pricing management
Examples of projects for growth EVA® approaches in pricing management SMEs EXAMPLE High risk SME and Corporate Customer Medium risk segmentation according to the following criteria Low risk value created/absorbed (EVA®) risk share of wallet EAD(1): 27 EAD(1): 45 High Use of EVA® approach t
Slide 63: Consolidating leadership in Asset Management: potential
Examples of projects for growth Consolidating leadership in Asset Management: great potential to exploit 2010-2013 CAGR/∆pp Eurizon Capital is already the leader in Italy, with Mutual funds penetration of Intesa relevant market shares expected to increase Sanpaolo Customers in Italy further (%) 26
Slide 64: Asset Management: actions to exploit the potential
Examples of projects for growth Consolidating leadership in Asset Management: actions to exploit the potential 2010-2013 CAGR/∆pp “Savings” project of Banca dei Territori advanced advisory model based on Customer needs Assets under Management(2) throughout the entire lifecycle and optimisation o
Slide 65: Creation of a nationwide player in Bancassurance
Examples of projects for growth – Banca dei Territori Creation of a nationwide player in Bancassurance 2010-2013 CAGR Technical reserves Technical reserves Technical reserves (€ bn) 28 (€ bn) (€ bn) 3 8.5% 2010 2010 85 67 2010 2013 pro-forma(1) Technical reserves Technical reserves Riserve tecniche
Slide 66: Reinforcing leadership in Bancassurance
Examples of projects for growth – Banca dei Territori Reinforcing leadership in Bancassurance 2010-2013 ∆pp Significant contribution to Group results (revenues from product companies and distribution network ~€1.1bn in 2013) Cross-selling push on ~11m Customers, frequently interacting with more
Slide 67: Enhancing leadership in card sector
Examples of projects for growth – Banca dei Territori Enhancing leadership of in card sector 2010-2013 CAGR/∆pp Already the market leader (more than 23% market Operating income share(1)) (€ m) 8.9% 190 246 Full exploitation of synergies with Banca dei Territori through completion of the migration
Slide 68: Leadership in Private Banking
Examples of projects for growth – Banca dei Territori Leadership in Private Banking 2010-2013 CAGR Market leader with ~€70bn of total Customer financial assets Operating income New service model segmentation according to (€ m) Customer assets and socio-demographic features 14.7% 536 Improvemen
Slide 69: Developing medium-long term financing
Examples of projects for growth – Banca dei Territori Developing medium-long term financing 2010-2013 CAGR Mediocredito Italiano is a centre of expertise for medium-long term financing Loans to Customers(2) subsidised financing (€ bn) corporate finance for SMEs 8.0% 15.2 Further developmen
Slide 70: Leadership in Non-profit
Examples of projects for growth – Banca dei Territori Leadership in Non-profit 2010-2013 CAGR The non-profit market has great economic and social importance Banca Prossima Customers ~250,000 non-profit organisations, ~€45bn revenues, (number of Customers) ~€10.7bn loans, ~700,000 employees, ~3.3
Slide 71: Extracting the potential of Corporate & Investment Banking
Examples of projects for growth Extracting the potential of Corporate & Investment Banking 2010-2013 CAGR 2013 vs 2010 Examples of implementation projects Operating income growth (€ bn) Fine-tuning service models 5.2% Further strengthening of Banca IMI 4.1 leadership 3.5 Innovative transaction
Slide 72: Fine-tuning service models
Examples of projects for growth – Corporate & Investment Banking Fine-tuning service models 2010-2013 CAGR Large & Mid Corporate Italy revenues Maintain leadership in Large and Mid (€ m) Corporate segments 3.3% 725 799 further strengthening of sector-specific service model 2010 2013 drive cros
Slide 73: Further strengthening of leadership: Banca IMI
Examples of projects for growth – Corporate & Investment Banking Further strengthening of leadership In recent years, Banca IMI has become the Italian market leader more than €1bn revenues (equal to 7% of the Group total in 2010) more than €500m Net income (equal to 20% of the Group’s Net inco
Slide 74: Banca IMI contribution to operating income growth
Examples of projects for growth – Corporate & Investment Banking Further strengthening of leadership 2013 vs 2010 Banca IMI contribution 2010-2013 CAGR to Operating income growth Capital Markets revenues (€ m) (€ m) 6.9% 7.2% 920 54 1,337 753 31 167 2010 2013 pro-forma(1) 1,085 Investment Banking re
Slide 75: Innovative Transaction Banking offering
Examples of projects for growth – Corporate & Investment Banking Innovative Transaction Banking offering 2010-2013 CAGR Creation of a “Transaction Hub” integration of more than 150 features/products in cash & Transaction banking liquidity management(2), trade services(3), factoring and revenues
Slide 76: Selectively expanding the business outside of Italy
Examples of projects for growth – Corporate & Investment Banking Selectively expanding the business outside of Italy 2010-2013 CAGR/∆pp Consolidation of the global coverage model with local presence significant strengthening of current foreign branches in terms of relationships and products Inte
Slide 77: Leadership in factoring and leasing
Examples of projects for growth – Corporate & Investment Banking Leadership in factoring and leasing 2010-2013 CAGR Development of Mediofactoring activities Mediofactoring revenues undisputed market leader with more than 27% (€ m) market share in Italy 7.6% strengthening of cooperation with Ba
Slide 78: Extracting the potential of all business units
Examples Examples of of projects projects for for growth growth Extracting Extracting the the potential potential of of all all business business units units 2013 vs 2010 Operating income growth International Subsidiary Banks Public Finance Banca Fideuram (€ m) (€ m) (€ m) 2010-2013 CAGR 6.0% 5.4% 2
Slide 79: Strengthening the Centres of excellence model
Examples of projects for growth – International Subsidiary Bank Strengthening the “Centres of excellence” model Joint creation with Eurizon Capital, starting from the 2010-2013 CAGR centres of excellence in Croatia, Hungary, Slovakia International Subsidiary Banks Asset Management and Serbia, of a
Slide 80: Refining service models in distribution networks
Examples of projects for growth – International Subsidiary Banks Refining service models and increasing effectiveness and efficiency in distribution networks 2010-2013 CAGR/∆pp Implementation of service models specialised in Affluent, Small Business and SME segments Operating income Internationa
Slide 81: Innovative product offering
Examples of projects for growth – International Subsidiary Banks Innovative product offering 2010-2013 ∆ Development of innovative retail products and services, both country-specific and transferrable to different subsidiaries investment products in conjunction with the Cross-selling to the cons
Slide 82: From Customer satisfaction to Customer experience
Examples of projects for growth – International Subsidiary Banks Evolving from Customer satisfaction to Customer experience 2010-2013 ∆pp Customer satisfaction Building upon Customer satisfaction, a Group index strength in most foreign countries to improve (score 1-100) commercial performance +0.8
Slide 83: Solid ongoing domestic leadership: Public Finance
Examples of projects for growth – Public Finance Solid ongoing domestic leadership New push from BIIS towards the execution of big infrastructure projects in Italy (program of more than €350bn, of which only Additional funds needed to €30bn is completed) finance infrastructure leading role in ma
Slide 84: Selective growth outside of Italy
Examples of projects for growth – Public Finance Selective growth outside of Italy 2010-2013 CAGR Selective international development building on the expertise of BIIS in structuring Public Private Revenues abroad Partnerships (PPP) operations (€ m) EU – Eastern Europe: TEN-T projects, €200bn by
Slide 85: Consolidation of leadership through Private Banking and advisory
Examples of projects for growth – Banca Fideuram(1) Consolidation of leadership in Italy through development of Private Banking and advanced advisory service extension Focus on the development of private banking by 2010-2013 CAGR/∆pp leveraging a service line (products, services, Customer Financia
Slide 86: Consolidation of other Italian financial advisor networks
Examples of projects for growth – Banca Fideuram(1) Consolidation of other Italian financial advisor networks Undisputed market leader in Banca Fideuram positioning financial advisory with more vs main Italian competitors(2) than 30% market share and Customer Financial Assets Main competitors over
Slide 87: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 86
Slide 88: Managing and empowering our employees
Managing and empowering our employees The quality of our people and their capacity to share and achieve with conviction in building the vision of the Bank as a common interest to sustain and develop will be essential to realising the success of the Business Plan The targets that we plan to achie
Slide 89: Union relationships
Union relationships Relationships with Unions will remain inspired by values of reciprocal respect and loyalty, complying with and enforcing rules with the objective of realising new combined efforts towards growth, competitiveness and sustainable employment levels. The model of union relationship
Slide 90: Personnel skills development
Examples of projects for human resource development Personnel skills development Planned actions Revision of management skills model to orientate personnel style and behaviour, to promote the achievement of the Plan’s targets Management and development policies focused on Top Executive Group in
Slide 91: Empowering female talent
Examples of projects for human resource development Empowering female talent 2010-2013 ∆pp Planned actions Sustainable career paths for women in order to Women in key roles significantly increase female presence in the Group’s (%) key positions. Targeting 30% females in roles of +4pp responsibilit
Slide 92: Company Welfare: concrete value for people
Examples of projects for human resource development Company Welfare: concrete value for Intesa Sanpaolo people Planned actions Development of new healthcare Fund (over 200,000 members among current and retired employees linked New by values of mutual aid and solidarity) Healthcare Fund Enrichmen
Slide 93: Investment in training
Examples of projects for human resource development Investment in training Yearly average number of Planned actions training days (thousand working days) More than 1 million yearly working days in the 1,170 Business Plan period 950 Extension of the corporate population involved in training activ
Slide 94: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 93
Slide 95: Credit risk profile optimisation
Examples of projects for risk control/optimisation Credit risk profile optimisation Planned actions 2010-2013 CAGR/∆pp /∆pb Extension of credit strategies to all segments and products Loans explicit strategic guidelines for capital allocation to cover credit risk (€ bn) in better risk/return pro
Slide 96: Evolution of Non-performing loans and Doubtful loans coverage
Evolution of Non-performing loans and Doubtful loans coverage 2010-2013 CAGR/Δpp Stock of net Non-performing loans(1) Doubtful loans coverage(2) (€ bn) (%) -1.5% 17.9 17.1 Past due 1.5 >123 1.7 123 Coverage Substandard loans 9.0 from 7.7 guarantees and collateral +2pp Specific Doubtful loans 7.4 7.7
Slide 97: Optimisation of market and operational/compliance risk
Examples of projects to control/optimise risks Optimisation of the management of market and operational/compliance risk Planned actions Evolution of tools to measure and control risks (counterparty risk, portfolio replication) deriving from Investment Banking and Capital Markets activity, focused
Slide 98: Initiatives covering different types of risk
Examples of projects to control/optimise risks Initiatives covering different types of risk Planned actions Definition of the Group’s maximum acceptable level of risk (risk appetite) using both quantitative (stress testing) and qualitative (compliance and reputational risk) techniques creating
Slide 99: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 98
Slide 100: Liquidity position optimisation
Examples Examples of of projects projects for for liquidity liquidity optimisation optimisation Liquidity Liquidity position position optimisation optimisation Planned actions Evolution of main liquidity indicators Extension of Customer behavioural models for 2010 2013 sight deposit management pro
Slide 101: Liquidity and medium-long term maturities
Liquidity Liquidity and and medium-long medium-long term term maturities maturities Liquidity Medium-long term maturities(1) Direct Customer Deposits > (€ bn) Loans to Customers as of 2013 As of today, already Direct ~50% of 2011 maturities already Customer placed Deposits Wholesale ~€445bn 42 40 Re
Slide 102: A concrete action plan designed for minimal execution risk
A concrete action plan designed for minimal execution risk Projects Projects for Projects for for human productivity growth resource development Projects for Projects for Projects for a risk control/ liquidity stronger optimisation optimisation capital base 101
Slide 103: Optimisation of capital allocation and deployment
Examples Examples of of projects projects for for aa stronger stronger capital capital base base Optimisation Optimisation of of capital capital allocation allocation and and deployment deployment Planned actions Strategic planning and budgeting processes with a focus on capital allocation to Busi
Slide 104: 10% Common Equity ratio with headroom for dividends
10% 10% Common Common Equity Equity ratio ratio with with headroom headroom for for dividends dividends Common Equity ratio evolution in the Business Plan period Basel 2 Basel 3 (%) (%) Minimum requirement Business Plan’s capital of which fully phased-in(4) Basel 3 sources and uses optimisation ~0.4
Slide 105: Key success factor: Management Team
Key success factor: Management Team Passionate Cohesive Experienced Fully committed to the delivery of the Plan 104
Slide 106: Conclusions: Solid value creation for all stakeholders
Conclusions Solid value creation for all stakeholders Basel 3: immediate competitive advantage for Intesa Sanpaolo Solid value creation for all stakeholders Sustainable growth, profitability and payout Potential upside deriving from conservative scenario, non-recurring items and underestimat
Slide 107: Appendix
Appendix Targets for business units Intesa Sanpaolo over the last 4 years Economic scenario Other exhibits 106
Slide 108: Intesa Sanpaolo Group: main targets
Intesa Sanpaolo Group: main targets (€ bn) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Operating income 16.4 19.6 21.7 6.1% 5.7% Operating costs 9.2 9.2 9.3 (0.2)% 0.2% Cost/Income 56.1% 46.7% 43.0% (9.4)pp (13.1)pp Net adjustments to loans/Loans (bps) 82 61 56 (21)
Slide 109: Business unit contributions to 2013 targets
Targets for business units Each business unit will contribute significantly to the Group’s 2013 targets (€ bn) 2013 Corporate International Corporate Banca dei and Public Banca Subsidiary Centre/ Total Territori(1) Investment Finance Fideuram Banks Other Banking Operating income 11.9 4.1 2.7 0.4 0.9
Slide 110: Business unit contributions to 2015 targets
Targets for business units Each business unit will contribute significantly to the Group’s 2015 targets (€ bn) 2015 Corporate International Corporate Banca dei and Public Banca Subsidiary Centre/ Total Territori(1) Investment Finance Fideuram Banks Other Banking Operating income 13.5 4.4 3.0 0.5 1.0
Slide 111: Banca dei Territori overview
Targets for business units Banca dei Territori Customers Product Companies Retail Retail and and Small Small SMEs(2) SMEs (2) Asset management Business(1) Business (1) (~116,000 (~116,000 Customers) Customers) (~10,8m (~10,8m Customers) Customers) Non-profit Loans to ~11m Customers Customers
Slide 112: Banca dei Territori: main targets
Targets for business units Banca dei Territori: main targets (€ bn) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Operating Income 10.1 11.9 13.5 5.7% 5.9% Operating costs 6.0 5.8 5.9 (0.8)% (0.2)% Cost/Income 58.9% 48.7% 43.8% (10.2)pp (15.1)pp Net adjustments to loa
Slide 113: Corporate & Investment Banking overview
Targets for business units Corporate & Investment Banking Customers Product Companies Capital Markets & Large(1) Large (1) & & Investment Banking International Mid(2) Mid (2) International Corporate Corporate Corporate Corporate Factoring Leasing ~19,000 Customers Main highlights Loans to Cu
Slide 114: Corporate & Investment Banking: main targets
Targets for business units Corporate & Investment Banking: main targets (€ bn) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Operating income 3.5 4.1 4.4 5.2% 4.5% Operating costs 0.9 1.0 1.0 3.2% 2.0% Cost/Income 25.3% 23.9% 22.4% (1.5)pp (2.9)pp Net adjustments to l
Slide 115: International Subsidiary Banks overview
Targets for business units International Subsidiary Banks Customers Distribution structure Central-Eastern Central-Eastern Europe Europe South-Eastern South-Eastern Europe Europe Country Bank Banks Banks Banks Banks Albania Presence in 13 countries Croatia ~8.4m Customers ~1,750 branches S
Slide 116: International Subsidiary Banks: main targets
Targets for business units International Subsidiary Banks: main targets (€ bn) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Operating income 2.3 2.7 3.0 6.0% 5.7% Operating costs 1.2 1.3 1.4 3.8% 3.9% Cost/Income 50.8% 47.7% 46.5% (3.1)pp (4.3)pp Net adjustments to l
Slide 117: Public Finance overview
Targets for business units Public Finance Customers Products Central Central Public Public Project finance for infrastructure Administration Administration Long-term financing Public Public entities entities and and Local Local Authorities Authorities Debt restructuring Securitisation Priv
Slide 118: Public Finance: main targets
Targets for business units Public Finance: main targets (€ m) 2010 2013 2015 2010-2013 2010-2015 pro-forma(1) Targets Projections CAGR CAGR Operating income 342 437 472 8.5% 6.7% Operating costs 83 100 103 6.4% 4.5% Cost/Income 24.2% 22.8% 21.9% (1.4)pp (2.4)pp Net adjustments to loans/Loans (bps) 1
Slide 119: Banca Fideuram overview
Targets for business units Banca Fideuram ~4,350 private bankers Over 600,000 Customers 97 domestic branches 2 branches abroad(1) Products Main highlights Investments ~€72bn Customer Financial Assets Insurance of which ~€54bn Assets under Management Private pensions Personal and
Slide 120: Banca Fideuram: main targets
Targets for business units Banca Fideuram(1): main targets (€ m) 2010 2013 2015 2010-2013 2010-2015 pro-forma(2) Targets Projections CAGR CAGR Operating income 755 884 957 5.4% 4.8% Operating costs 348 363 373 1.4% 1.4% Cost/Income 46.1% 41.0% 39.0% (5.1)pp (7.1)pp Adjusted Net income(3) 240 350 396
Slide 121: Intesa Sanpaolo over the last 4 years
Intesa Sanpaolo over the last 4 years A successful merger Solid results even during the global economic crisis A Bank with a distinctive identity and reputation Many projects and investments which are starting to bear fruit 120
Slide 122: A successful merger
Intesa Sanpaolo over the last 4 years A successful merger Solid, ongoing leadership in Italy with critical mass reached across all core-business areas with over 11 million Customers and a branch market share of around 17% Completed integration of Banca Intesa and Sanpaolo IMI maintaining a stead
Slide 123: Solid ongoing domestic leadership
Intesa Sanpaolo over the last 4 years Solid ongoing domestic leadership Ranking Market share (data as at 31.12.10) 1 Assets under Administration 23.6%(1) 1 Direct Customer deposits 17.1% 1 Pension funds 25.0%(1) Italy 1 Loans to Customers 15.8% Branches 16.6%(1) 1 1 Mutual Funds 25.3% Asset AuM - Fi
Slide 124: Unique Customer reach in Italy
Intesa Sanpaolo over the last 4 years Unique Customer reach in Italy Number of branches and market share per region Branch market share and ranking Ranking 96 1° 2° 1° 1° 1° 161 and 9.0% 30 17.2% Mkt. share 29.6% 1,186 649 17.9 17.6 17.2 16.6 17.5% 509 17.3% 14.0 17.9% 417 11.2% 198 19.4% 531 160 No
Slide 125: Cost synergies greater than forecasted
Intesa Sanpaolo over the last 4 years Cost synergies greater than forecasted Cumulative cost synergies realised Reduction in Operating costs (before taxes) (%) (€ m) 2007-2009 Business ~ 1,770 Plan target ~ 1,410 (~€1,245m) 2007(1) 2008 2009 2010 ~ 860 vs. 2006 vs. 2007(1) vs. 2008 vs. 2009 ~ 290 -1
Slide 126: Sound results even during the global economic crisis
Intesa Sanpaolo over the last 4 years Sound results even during the global economic crisis due to our discipline of sustainable profitability Sustainable Net income with good returns to Shareholders A low risk profile Very prudent levels of liquidity and leverage A consistently adequate capi
Slide 127: Sound results even during the global economic crisis
Intesa Sanpaolo over the last 4 years Sound results even during the global economic crisis due to our discipline of sustainable profitability Sound capital base Low leverage(4) Core Tier 1 ratio (Basel 2) 8.1%(1) 7.1% 5.9% 6.3% 4.5% 4.3% 3.9% 4.4% Net income (€ bn) Gain on sale of 2007 2008 2009 201
Slide 128: Economic scenario
Economic scenario The Business Plan is based on a conservative scenario: a more positive evolution of the scenario would deliver upside on the Group results Reference economic scenario 2011-2013 Average yearly 2011-2015 Average 2010 growth yearly growth Real GDP growth Euro area 1.7% 1.3% 1.6% Macro
Slide 129: Contribution to 2013 vs 2010 Group Net income growth
Other Other exhibits exhibits Contribution Contribution to to 2013 2013 vs vs 2010 2010 Group Group Net Net income income growth growth (€ bn) 0.6 0.1 (1.3) (1.0) 4.2 +57% 3.2 Cost/Income 2.7 decreasing by ~9pp 2010 Δ Δ Δ Δ Δ 2013 Net Operating Operating Provisions Taxes, Extra- Net Income income co
Slide 130: Main drivers of net commissions growth
Other exhibits Main drivers of net commissions growth Main growth drivers (€ m) Δ 2013 vs 2010 CAGR 2010-2013 Assets under ~410 9.1% Growth in Assets under Management also due to Management the conversion of ~€30bn of volumes from Assets under Administration Bancassurance ~ 130 6.8% Developm