2014-2018 Business Plan Banca Carige: Sounder and Simpler
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2014-2018 Business Plan Banca Carige: sounder and simpler Chief Executive Officer Piero Luigi Montani 28 March 2014 Disclaimer This document has been prepared by the Banca Carige S.p.A. – Cassa di Risparmio di Genova e Imperia (the “Company”) solely for information purposes and for use in the presentation of the Company’s strategies and prospective financial information. The information contained herein has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company, nor any member of the Group (the “Banca Carige Group”) nor any of its or their respective advisors, representatives, directors, officers, employees shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of, or from any reliance placed upon, this document or its contents. 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By accepting these cautionary statements you agree to be bound by the foregoing limitations. 1 Sounder and simpler Agenda ▪ The CARIGE Banking Group today ▪ The 2014-2018 Business Plan ▪ Expected results Note: This document has been prepared with data referring only to the Carige Banking Group (excluding the Insurance Group) 2 Sounder and simpler The CARIGE Banking Group today: points of strength Today’s strengths of 1 Major footprint in Italy’s richest areas the Carige Banking Group Wide customer base with high level of 2 loyalty and satisfaction 3 Pro-actively responsive branch network Opportunities for improvement 4 Gradually growing in the "digital arena" 3 Sounder and simpler 1 Major footprint in Italy’s richest areas Number of branches and market share by region Geographic distribution, key indicators #, % 1 Branches’ (1.0%) market share 25%-30% 100%= 678 ~3,400 ~1m 63.3 540.9 76 46 2%-4% (1.2%) (1.3%) 56 1%-2% (2.1%) 29 0%-1% (0.9%) 68% 254 86 North 70% 71% 5 81% 78% (27.5%) (3.6%) (0.4%) 2 9 (0.4%) (0.7%) Centre 20% 21% 17% 39 14% 15% (1.5%) South 12% 12% 11 9% 5% 7% (1.6%) Branches Network Clients Lending Operating Number employees Thousands & Income Number Funding Mln Bn 63 (3.8%) Total: 678 branches1 68% of branches are based in Northern Italy and generate 81% of volumes and 78% of Total Revenues Source: Bank of Italy, data as at 31/12/2013 Source: operational data as at 31/12/2013 1. Includes 1 branch in France (Nice) 4 4 Sounder and simpler 2 Wide customer base, with high level of loyalty and satisfaction % of satisfied or very satisfied # Customers/ bank branches Customer attrition customers Carige Group Carige Group Banking system Banking system 91% 5.6% Carige 2008 2010 1,680 Group 84% 6.7% 91% 6.3% 2010 2011 Regional 86% 6.5% peers1, 1,450 average 93% 6.1% 2012 2012 +16% 86% 6.4% ~ 1 million total customers Source: Italian Banking Association (ABI) Source: ABI – SDA Bocconi University survey on Observatory on Retail Customer Satisfaction Banks’ Customer Retention and Sales Performance – (consumers and businesses) 2013 and previous issues 1. Banco Popolare, BPER, BPM, Cariparma 5 Sounder and simpler 3 Pro-actively responsive branch network Running average Results achieved by the Network after the launch of sales campaigns Typical banking product Innovative product 2014 2014 Volumes in mln Number of contracts Launch of campaign Launch of campaign 2.500 20 19 2.3002.380 16 17 14 14 14 16 10 0 420 470 245 345 110 140 155 195 -24 Week II III IV V I II III IV I II III I II III IV V I II III IV I II III Month January February March January February March Weekly n.s. 15 19 169 421 2,393 average per month 6 Sounder and simpler 4 Gradually growing in the “digital arena” Use of Internet Banking by customers over time Carige Mobile App on App Store and Google Play March 2014 CAGR 2010- 2013: ~19% 35% 400 35 30% 350 318 30 25% 300 276 25 250 21% % customers 228 20 200 190 15 150 100 10 # users Thousands50 5 0 0 2011 2011 2012 2013 o.w. with 26% 35% 53% 64% digital correspondence Source: Operational data Source: Ranking survey of CarigeMobile on App Store (iOs) and Google Play (Android) 7 Sounder and simpler The CARIGE Banking Group today: opportunities for improvement Today’s strengths of the Carige Group Wide customer base potential not 1 properly tapped Further room for cost base 2 improvement Opportunities for Enablers in place for cost of credit improvement 3 reduction 8 Sounder and simpler 1 Wide customer base potential not properly tapped Premium (Affluent e Private) customer share of Cross Cross selling (consumer and corporate) total clients (%) selling on # products per customer Lower-than- Consumer best- customers +2% p.a. 4.40 practice Carige 17.5% improving 3.98 4.04 share of although 3.87 high-value still lower 3.77 customer than that of segments Best practice 20-25% the Italian banking 2010 2011 2012 2013 System system Carige Source: ABI Total revenues/ Volumes1 Return on customers by segment 2013 (Index 100) Carige Benchmark 1.8% Return on 116 125 Return on 1.6% 1.5% 1.4% 1.4% 1.3% 1.3% some 100 volumes 100 1.0% segments lower than lower than best Peers best Peers Family & SMEs and personal Bank Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 Carige Bank 6 Bank Bank 7 Mass Market businesses Source: Financial Statements 1. Banco Desio, Banco Popolare, BPER BPM, Credem, Creval, UBI 9 Sounder and simpler 2 Further room for cost base improvement Operating costs/ Volumes 0.9% ▪ Efficiency already 0.8% aligned with Italian best practice -40% ▪ Opportunity for 0.5% further savings by aligning Group efficiency to that of the Parent Company Peers1 Gruppo Carige Internal best Practice (Parent company) 1. Banco Desio, Banco Popolare, BPER, BPM, Credem, Creval, UBI Source: Financial Statements as at 31/12/2013 10 Sounder and simpler 3 Enablers in place for cost of credit reduction Bad loans coverage for top 10 Italian Banking Groups FY 2013 FY 2012 63.1% 2 Regional 61.0% 58.8% 58.2% 57.9% 56.3% 55.5% 55.0% 54.7% banks’ 49.8% average 41.6% 53.8% Top 3 Italian Regional Banks1 Substandard loan coverage for top 10 Italian Banking Groups 40.6% FY 2013 FY 2012 Regional 2 23.5% 22.8% banks’ 20.4% 20.3% 18.2% 18.2% 16.0% 14.6% 15.1% 13.7%2 average 17.7% Top 3 Italian Regional Banks1 1.