Group Results - 2012 Conference Call Adolfo Bizzocchi March, 18 th , 2013
FY 2012 and 4Q12 Highlights • Net Interest Income net of non recurrent items, was up 0.8% QoQ thank to growing loans to customers (+3.6% QoQ) and despite interest rates still under pressure. The FY2012 result presents a similar trend by showing a grow in excess of 1% despite a deteriorated macroeconomic scenario • Non Interest Income was €144 million in the quarter (+14.4% QoQ), dragged up by high performance fees. Anyway, even not considering the most volatile components such as performance fees and trading, the aggregate grew more than 6% QoQ. As for the Y0Y comparison, Non Interest Income was up 8.7% with a stable trading performance and net commissions that grew by 7.5% • Operating Costs were up 5.2% QoQ, mainly because of higher provisions on incentives that weighted on Payroll Costs (+ 5.5% QoQ), but stable (-0.1%) YoY • Net Adjustments to Loans grew by 71% YoY as a result of the aggravation of the current economic recession. Cost of Risk topped 44 bps, much higher than the historical average of 34 bps, but however far from the peak (62 bps) reached in 2009 • Net profit was remarkably up in the quarter (€31 million; +29.7% QoQ) and in the year (€121.2 million; +25.5%). Dividend to be proposed to the GSM is €12 cent per share, 20% higher if compared to the one deliberated last year • Tier 1 was 9.4%, 70 bps higher in comparison with 2011 figure 2
Income Statement 2Q12 3Q12 4Q12 % vs. 3Q12 2011 2012 % a/a € Million 1Q12 Operating Income 238.7 227.3 244.1 261.1 7.0 925.9 971.2 4.9 Operating Income (net of trading 219.5 223.6 225.5 231.1 2.5 881.3 897.6 1.8 and performance fees) Operating Costs -154.1 -148.7 -147.0 -154.7 5.2 -605.2 -604.5 -0.1 Gross Operating Profit 84.6 78.6 97.1 106.4 9.6 320.7 366.7 14.3 Depreciation and Amortization -7.7 -8.0 -8.2 -8.8 7.3 -30.5 -32.7 7.2 Operating Profit 76.9 70.6 88.9 97.6 9.8 290.2 334.0 15.1 Net Adjustments to Loans -22.5 -13.9 -16.4 -36.3 121.3 -52.0 -89.1 71.3 Provisions for Risks and Charges -5.7 -9.3 -41.5 -6.6 n.a. -15.4 -63.1 n.a. Extraordinary Income/ Charges 16.1 0.5 35.8 -6.0 n.a. -7.0 46.4 n.a. Profit before Tax 64.8 47.9 66.8 48.7 -27.1 215.8 228.2 5.8 Income Taxes/ Minority Interest -23.2 -23.2 -42.9 -17.7 -58.7 -119.2 -107.0 -10.2 Profit for the Period 41.6 24.7 23.9 31.0 29.7 96.6 121.2 25.5 Net profit (net of assets disposal. significant provisions and fiscal 29.7 31.5 42.5 38.7 -8.9 137.0 142.5 4.0 allowances*) Net Interest Income improvement in the quarter (+7.0% QoQ) enhanced the preservation of the Net Profit level, despite 20 million higher provisions on loan losses, and also considering the non recurrent items related to the Inland Revenues claims as well as non core assets disposals * IRAP deduction against IRES charge 3
Non recurring items impact on Income Statement Non recurring items related to assets Non recurring items related to assets € Million 4Q12 disposal. significant provisions and fiscal 2012 disposal. significant provisions and allowances * fiscal allowances * -2.6 (-1.7 net of taxes): interest charge -3.1 (-2.2 net of taxes): interest charge • • Net Interest related to a settlement signed in 4Q12 with 468.3 related to settlements signed in 2012 116.6 Income Inland Revenues with Inland Revenues -1.2 (-0.3 net of taxes) as provisions for -60.7 (-59.8 net of taxes) as provisions • • Provision for potential future fiscal claims for potential future fiscal claims -6.6 -63.1 Risks and -6.1 (-4.1 net of taxes) for hedge funds -6.1 (-4.1 net of taxes) for hedge funds • • Charges unwinding unwinding +37.6 (27.3 net of taxes) from • custodian business disposal +25.9 (25.1 net of taxes) from 50% • disposal of Credemassicurazioni (agreement signed in 2008)** Extraordinary -3.3: sanctions related to a settlement • +5.8 (5.6 net of taxes) from Banca Incomes/ -6.0 46.4 • signed in 4Q12 with Inland Revenues Euromobiliare (Suisse) disposal Charges -3.3: sanctions related to settlements • signed in 2012 with Inland Revenues -8.0 (-5.8 net of taxes) for the • settlement of relevant claim -19.2: related to a settlement signed in -24.9: related to settlements signed in • • Income Taxes/ 4Q12 with Inland Revenues 2012 with Inland Revenues -17.7 -107.0 Minority Interest +20.9: IRAP deductibility +20.9: IRAP deductibility • • Net Profit 31.0 -7.7: total impact on 4Q12 Net profit 121.2 -21.3 total impact on 2012 Net profit * Inland Revenues fiscal claims and IRAP deduction against IRES charge ** 24.6 from 50% disposal and revaluation of the retained stake and 1.3 from past provisions recovery related to the deal 4
Net Interest Income (1/2) � Net Interest Income, especially if considered net of Net Interest Income (€ Million) non recurrent components, was in line with the (net of 115.8 115.1 118.8 118.3 119.2 amounts of previous two quarters, also thank to extraord.) the significant loan growth occurred in the last 120 0.5 2.6 months of the year and despite the further 1.2 reduction of interest rates 110 � With reference to 4Q11 levels, the steep interest 118.8 117.8 116.6 115.1 114.6 100 rates descent (-116 bps) caused a progressive reduction in customers’ spread (-52 bps) along with an high BTP/ Bund spread, that improved only 90 in 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 NIM (accounting data) Fiscal settlements impact Euribor and BTP/Bund spread evolution Customers’ Spread (Credem SpA management accounting) 1.4% 500 441 bps 427 415 3.74 3.76 380 1.2% 4.0 3.55 3.43 400 1.27% 335 3.31 1.0% 3.0 300 0.8% 1.25 2.54 1.33 0.6% 1.28 1.29 2.43 1.20 200 2.0 2.27 % 2.19 0.67% 2.02 0.4% 0.17% 0.11% 100 0.40% 1.0 0.2% 0.0% - 0.0 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 spread average loan rate average deposit rate Euribor 1 month BTP vs. Bund 10yrs 5
Net Interest Income (2/2) Corporate short term loans re-pricing*.. ..while preserving a benefit in cost of funding (Credem SpA management accounting) (Credem SpA management accounting) 2.50 5.50 4.99 5.1 5.0 5.1 5.0 5.0 4.9 4.8 4.8 4.8 4.9 4.8 4.84 2.10 2.10 2.09 2.08 2.09 5.00 2.00 1.77 80 bps 100 bps 66 bps 81 bps 4.50 1.33 1.29 1.50 1.28 1.29 1.25 4.5 4.5 4.4 4.3 4.3 4.4 3.66 4.4 4.3 4.2 4.3 4.00 0.96 4.2 4.18 3.99 1.00 3.50 3.20 0.50 3.00 2 2 2 0 1 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - - - - - - - - - - - n n - v c c b r r y l g p t c u a p a e a u c o e e u e e J M A O N D D J F M J D A S 2011 1Q12 2Q12 3Q12 4Q12 2012 Credem: Avg. loan rate on corp. (non-financials) short-term loans Credem: Average deposit rate Industry: Average deposit rate Industry: Avg. loan rate on corp. (non-financials) short-term loans BTP portfolio (Banking Group) � Interest rates decrease was partially counterbalanced by significant re-pricing actions 5,000 4,391 4,391 -39% on short term loans. As a result of such activity, 4,000 the difference between interest rates charged by 3,373 2,895 Credem and by industry passed, on average, 2,660 3,000 from 100bps to 66bps in twelve months. On the 2,000 other hand, the cost of funding advantage seen in 2011 was confirmed also in 2012. 1,000 � The exposure to Italian Government Bonds went - down by almost 40% YoY 2010 2011 1H12 9M12 2012 Source: ABI Duration: 4 years * Short term loans (overdrafts and loans up to 1 year) to non financial corporate customers 6
Non Interest Income Non Interest Income: quarterly evolution Non Interest Income: yearly evolution 123.6 +9.5% 150 250.0 230.3 101.4 135 122.4 28.2 +4.9% 210.3 120 124.4 18.6 114.4 1.8 200.0 19.2 170.6 Performance Fees 162.6 3.7 13.4 3.3 0.7 105 3.3 6.1 10.3 Trading 150.0 90 € Million 42.3 Other 42.2 44.1 42 +2.1% +37.6% 75 +10.6% 100.0 44.2 Banking Fees 43.3 60 42.3 11.4 32.6 7.2 6.1 7.9 50.0 23.8 26.1 23.6 Insurance Fees 2.9 45 Asset Management Fees 0.0 30 51.7 50.6 50.7 49.1 47.7 Banking Trading Insurance Other Management 15 Fees Fees Asset Fees 0 4Q11 1Q12 2Q12 3Q12 4Q12 NII net of trading and 2011 2012 105.1 104.4 104.8 107.7 114.5 performance fees � Non Interest Income performed well in the € Million 2010 9M11 2011 9M12 2012 quarter thank both to good banking fees (+4.3% QoQ; +4.9% YoY) and asset Insurance Reserves 2,448 2,466 2,506 2,597 2,617 management fees (+9.5% YoY) 4,978 4,348 3,859 3,802 3,747 Portfolio Management � In particular, asset management 3,998 3,216 3,062 2,965 2,944 Mutual Funds commissions were extremely satisfactory in 4,898 4,515 4,454 4,967 5,047 SICAVs the quarter, also net of performance fees. This permitted to almost completely offset Other & Third Parties’ 3,015 3,385 3,415 3,993 4,478 Products the negative impact (about €2 million per quarter) due to custodian business disposal AUM 16,889 15,464 14,790 15,727 16,215 7
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