ANNUAL REPORT 2000
BANCA CARIGE GROUP
1 DIRECTORS, STATUTORY AUDITORS, MANAGEMENT AND AUDIT FIRM
BOARD OF BOARD OF GENERAL MANAGEMENT AUDIT DIRECTORS STATUTORY AUDITORS MANAGEMENT FIRM
CHAIRMAN CHAIRMAN GENERAL Net KPMG SpA MANAGER
Fausto Cuocolo * Fulvio Rosina Giovanni Berneschi Luciano Casapietra
DEPUTY CHAIRMAN AUDITORS DEPUTY GENERAL Commercial planning MANAGER and innovative channel
Giorgio Giorgetti * Giacomo Catalfamo Renzo Oldrati Luigi Gardelli Angelo Costigliolo
MANAGING DIRECTOR DEPUTY GENERAL Loans Department Giovanni Berneschi* MANAGER Achille Tori
DIRECTORS DEPUTY AUDITORS Alfredo Sanguinetto Finance and Funding Mario Venturino Adalberto Alberici * Maurizio Civardi Piergiorgio Alberti Angelo Lucio Viotti Information- Piero Guido Alpa Communication Jean-Jacques Bonnaud Technology Giorgio Buglioni * Giorgio Seronello Giovanni Battista Canevello Ferdinando Menconi Public Relations Giovanni Merella * Emilio Pietro Molinari Dominique Monneron Romeo Panizzi (1) Vincenzo Roppo Resources Giorgio Savinelli ** Carlo Arzani Alessandro Scajola * Oliviero Tarolli Giuliano Valle * Support Giovanni Poggio
* Member of Executive Committe ** Senior Director Directors were appointed for the years 1998-2000 by the shareholders’ meeting on 26/4/98. Jean-Jacques Bonnaud was appointed by the shareholders’ meeting on 28/10/99, Giovanni Berneschi was appointed by the shareholders’ meeting on 21/12/99 and their terms of office will end at the shareholders’meeting of adoption of the bilance sheet for 2000. Dominique Monneron was appointed (ex art. 2386 civil code) by the shareholders’meeting on 23/5/2000 and his term of office will end at the shareholders’ meeting of 27/4/2001. The Board of Statutory Auditors was appointed by the shareholders’ meeting on 29/4/99 for the years 1999-2000- 2001. (1) Pietro Isnardi was appointed (ex art. 2386 civil code) by the shareholders’ meeting on 29/1/2001 and his term of office will end at the shareholders’meeting of 27/4/2001.
2 POWERS OF THE ADMINISTRATIVE BODIES AND THEIR DELEGATED AUTHORITY
As required by directive no. 97001574 of CONSOB dated 20th February 1997 there are shown below the powers and delegated authority belonging to the Directors and Management.
Chairman of the Board of Directors According to article 24 of the By-laws the Chairman of the Board of Directors is the legal representative of the Bank vis-à-vis third parties and in court proceedings. He presides at shareholders' meetings, convenes and presides at meetings of the Board of Directors of which he is an ex officio member. In a case of compelling urgency not admitting of delay, the Chairman may, on a proposal of the Managing Director or General Manager, himself take decisions falling within the competence of the Board of Directors or the Executive Committee where it is impossible for their members to meet. Decisions so made are to be brought to the notice of the relevant body at its next meeting.
Executive Committee Article 25 of the By-laws provides for the appointment of the Executive Committee by the members of the Board of Directors which is to fix the number of members, their term of office and their functions. The Executive Committee is made up by the Chairman and vice Chairman and the Managing Director, if appointed, who are ex officio members, and between three and five other members. The five members of the executive committee now in office were re-appointed on 12st June 2000 and will hold office until the Shareholders’ meeting of adoption of the balance sheet for the year 2000. The Board of Directors in conformity with article 21 of the By-laws has delegated to the Executive Committee within defined limits its powers in regard to: a) the grant, renewal, increase, reduction, confirmation, cancellation and suspension of advances and facilities and general credit operations of every description in all branches as well as the treasury and tax-collection payment functions; b) general decision making powers in matters relating to expenditure; c) power to determine a range of matters including the management of human resources, management of the treasury and of the Bank's investment portfolio, the use of derivatives and foreign exchange operations as well as in matters of day-to-day management not involving strategic issues.
Managing Director - General Manager In accordance with article 27 of the By-laws, a Managing Director or General Manager is appointed by the Board of Directors. The former, if appointed, will also perform the duties of General Manager. Either will exercise those powers belonging to him within the scope of the By-laws and the powers granted to him by the Board of Directors. The General Manager is the head of the Bank's executive staff. The Managing Director in office was appointed on 21st February 2000, he performs the duties of General Manager and has the following decision-making powers delegated to him: a) with respect to the grant, renewal, increase, reduction, confirmation, cancellation and suspension of advances and facilities and general credit operations of every description in all branches as well as treasury and tax-collection, and payment functions; b) generally with respect to matters relating to expenditure; c) in regard to a range of matters including treasury and collection, and payment functions, the management of the Bank's financial policy, the management of human resources, as well as matters of day-to-day management not involving strategic issues; d) with the Chairman's consent, he has the right to represent the Bank at general meetings of subsidiary and associated companies and to cast the Bank's votes as he may think fit.
3 BANCA CARIGE SPA BALANCE SHEET AT 31st December 2000
CONTENTS
BANCA CARIGE Banca Carige ownership structure at 31/12/2000 8 OWNERSHIP STRUCTURE AT 31/12/2000
FINANCIAL HIGHLIGHTS Financial highlights 10
NOTICE OF MEETING Notice of meeting 11
BOARD OF DIRECTORS’ An overview of the year 13 REPORT Strategy 15 Borrowing and lending activities 18 Services, marketing and customer protection 36 Public relations and the promotion of cultural, scientific and social activities 38 Resource management 39 The year 2000 and the euro 41 Investments 41 Share ownership structure and the relation with the Cassa di Risparmio di Genova e Imperia Foundation 43 Carige shares 43 Income statement, net income, capital & reserves 45 Risk profiles 50 Credit risk assessment 51 Significant events after 31st December 2000 52
FINANCIAL STATEMENTS Balance sheet 55 Assets 55 Liabilities and Stockholders’ Equity 56 Income statement 57 Financial statements comparison with 1999 58 Financial statements in euro 62 Explanatory notes 66 Introduction 66 Part A – Accounting principles 71 Part B – Balance sheet 77 Part C – Income statement 131 Part D –Other information
PROPOSED RESOLUTION Adoption of annual report and allocation of net profit 149
REPORT OF THE BOARD Report of Statutory Auditors 150 OF STATUTORY AUDITORS
REPORT OF THE Report of the Independent Auditors 154 INDEPENDENT AUDITORS
4 BANCA CARIGE SPA BALANCE SHEET AT 31st December 2000
ATTACHMENTS Statement of changes in stockholders’ equity 158 Statement of cash flow 160 Statement in accordance with art.7, c.2 of Law 218/90 (abstract) 161 Form of total tax credits attributable to shareholders, related to dividend pay out (art.105 c.1/A and c.1/B Decree 17/86) 162 Properties (excluding leased fixed assets) 163 Leased fixed assets revalued in accordance with Law 413/91 169 Convertible bonds 170 List of non significant investments 172 Information on subsidiaries and other significant company interests 174 Information on open pension fund “Fondo Pensione Aperto Carige” 176 Proforma balance sheet 177 Proforma income statement 179 List of exchange rates used in converting currency into Lire 180
5 BANCA CARIGE SPA BALANCE SHEET AT 31st December 2000
CONTENTS
CONSOLIDATED Consolidated financial highlights 182 FINANCIAL HIGHLIGHTS
BASIS OF Basis of consolidation 183 CONSOLIDATION
CONSOLIDATED Introduction 185 BOARD OF DIRECTORS’ Intermediation activities 186 REPORT Personnel and operating structure 196 Income statement 198 Changes in net equity 201 Subsidiaries and other equity investments 202 The year 2000 and the euro 205 Significant events after 31st December 2000 205
CONSOLIDATED Consolidated Balance sheet 207 FINANCIAL STATEMENTS Assets 207 Liabilities and Stockholders’Equity 208 Consolidated Income statement 209 Consolidated financial statements in euro 210 Consolidated Explanatory notes 213 Introduction 213 Part A – Accounting principles 217 Part B – Consolidated Balance sheet 220 Part C – Consolidated Income statement 264 Part D – Other information 273
REPORT OF THE BOARD Report of the Board of Statutory Auditors 274 OF STATUTORY AUDITORS
REPORT OF THE Report of the Independent Auditors 277 INDEPENDENT AUDITORS
6 BALANCE SHEET 2000
BANCA CARIGE Cassa di Risparmio di Genova e Imperia
BANCA CARIGE SpA - Cassa di Risparmio di Genova e Imperia Head Office in Genoa, Via Cassa di Risparmio, 15
7 BANCA CARIGE OWNERSHIP STRUCTURE AT 31/12/2000
Fondazione Cassa di Caisse Nationale des La Basilese Other Westdeutsche Caisse des Dépots et Risparmio di Genova Caisse d’Epargne et Insurance Shareholders e Imperia de Prévoyance Group LandesBank AG Consignations (CDC) (CNCEP) (WestLB)
58.71% 5.70% 5.09% 4.96% 3.80% 21.74%
Banca Carige SpA
Banking Insurance Trustee Instrumental Financial activities activities activities activities activities
47.50% 95.90% 51.00% 92.81% 87.01% 66.28% 100.00% 99.98% 90.00% 20.24%
Cassa di Banca del Carige Vita Levante Centro Galeazzo Columbus Immobiliare Eptaconsors Frankfurter Risparmio Monte di Nuova SpA Norditalia Fiduciario Srl (2) Carige Ettore SpA Bankgesellschaft di Savona Lucca SpA Assic. e Riass. SpA Immobilare Vernazza AG (1) SpA SpA SpA SpA (3)
20.00%
100.00% 100.00% BANCA CARIGE GROUP
Ligure Immobiliare Carisa Srl Leasing SpA
(1) Bankenunion AG adopted a new name according to the Extraordinary Shareholders’ meeting resolution of 29/6/2000 taking effect on 28/7/2000. (2) Galeazzo Srl has a holding of 0.02% in Columbus Carige Immobiliare SpA. (3) Immobiliare Ettore Vernazza SpA holds 10.00% of its own shares.
8 FINANCIAL HIGHLIGHTS 2000
9 FINANCIAL HIGHLIGHTS
2000 Change % 31/12/00 30/09/00 31/12/99 31/12/98 2000 2000 1999 pro forma (9) p.f. BALANCE SHEET (1) Total assets 22.530,3 22.134,4 20.580,2 19.802,5 19.235,6 13,8 11,8 2,9
Funding 17.913,6 17.531,4 16.244,5 15.324,5 15.302,8 16,9 14,4 0,1 – Customer Deposits 13.391,2 13.009,1 12.332,5 12.325,7 11.789,9 8,6 5,5 4,5 – Amounts owed to customers 7.919,0 7.586,2 6.911,7 7.381,6 7.225,4 7,3 2,8 2,2 – Debts evidenced by certificates 5.472,2 5.422,9 5.420,8 4.944,1 4.564,5 10,7 9,7 8,3 – Deposits from Banks 4.522,0 4.521,9 3.911,5 2.998,4 3.506,6 50,8 50,8 - 14,5 – Funds managed on behalf of third parties 0,4 0,4 0,5 0,4 6,3 - - - 93,7
Other Financial Intermediation Activities (OFIA) 20.675,2 20.271,5 20.715,6 19.462,7 18.168,1 6,2 4,2 7,1 – Assets Under Management 10.294,7 10.177,4 10.429,1 11.039,0 9.629,0 - 6,7 - 7,8 14,6 – Assets in Custody 10.380,5 10.094,1 10.286,5 8.423,7 8.539,1 23,2 19,8 - 1,4 Total Financial Intermediation Activities (TFIA) 34.066,4 33.280,6 33.048,1 31.788,4 29.958,0 7,2 4,7 6,1
Lending (2) (3) 19.762,7 19.377,7 18.497,5 17.503,3 17.385,1 12,9 10,7 0,7 – Loans to Customers (2) (3) 12.905,1 12.792,5 12.229,7 11.350,4 10.078,7 13,7 12,7 12,6 – Loans to Banks (2) 1.876,5 1.604,1 1.042,4 1.219,0 1.661,1 53,9 31,6 - 26,6 – Securities 4.981,1 4.981,1 5.225,4 4.933,9 5.645,3 1,0 1,0 - 12,6
Shareholders’ Equity (4) 2.519,1 2.519,1 2.576,9 2.532,3 2.046,0 - 0,5 - 0,5 23,8 INCOME STATEMENT (1) Operating Income 416,7 416,7 302,5 360,3 346,5 15,7 15,7 4,0 Income from Ordinary Activities 326,3 326,3 258,1 301,9 279,4 8,1 8,1 8,1 Income before Taxation 343,0 343,0 260,9 335,9 291,1 2,1 2,1 15,4 Net Income 190,2 190,2 143,1 181,6 147,0 4,7 4,7 23,6 RESOURCES (5) Number of branches 283 262 258 254 244 11,4 3,1 4,1 Number of employees (6) 3.080 3.080 3.085 3.092 3.050 - 0,4 - 0,4 1,4 FINANCIAL RATIOS Non interest income / Gross operating income 46,87% 46,87% 48,63% 51,37% 44,36% Operating costs / Gross operating income 60,77% 60,77% 60,90% 64,00% 64,32% Income before Taxation / Shareholders’ Equity 13,62% 13,62% 10,12% 13,26% 14,23%
ROE 7,55% 7,55% 5,55% 7,17% 7,18%
ROAE (7) 7,53% 7,53% 5,60% 7,94% 7,66% SOLVENCY RATIOS (8) Risk-Weighted Assets (RWA) (1) 12.488,7 12.293,8 11.654,7 11.206,0 10.060,2 11,2 9,7 11,4 Tier 1% of RWA 18,83% 20,08% 21,53% 22,25% 19,60% Total Capital % of RWA 18,49% 19,73% 21,09% 18,19% 17,89% (1) Billions of Italian Lire. (2) Gross of allowance for credit risks. (3) Including leased fixed assets. (4) Including reserves for general banking risks. (5) Statistics at the end of period. (6) Figures at 31/12/2000 do not include the 84 employees of the 21 branches bought from Banco di Sicilia, who became to all effects Carige employees on 1/1/2001. (7) Net income on average shareholders’ equity (Return On Average Equity). (8) Ratios communicated to the Bank of Italy. They differ from those indicated in the Explanatory Notes (section 8. part B) as a result of a different method of calculation. (9) Figures net of the 21 branches in Sicily bought by Banca Carige from Banco di Sicilia on 31/12/2000.
10 NOTICE OF MEETING
The shareholders of Banca Carige SpA are called to an ordinary general meeting to be held at the Bank’s headquarters in Genoa (Via David Chiossone, 3) on 27th April 2001 at 10.30 am and if necessary by adjournment at the same place on 30th April 2001 at 10.30 am for the purpose of transacting the following business:
1. To consider the balance sheet at 31st December 2000, and the reports of the Board of Directors and Statutory Auditors;
2. To receive the consolidated balance sheet of the Banca Carige Group at 31st December 2000;
3. To determine the number of members of the Board of Directors; to appoint the Chairman, Vice Chairman and other members of the same Board:
4. To determine the emoluments destined to the Board of Directors;
5. To transact any other business consistently with articles 2357ff of the Civil Code.
Shareholders will be entitled to attend the meeting on production of the appropriate certificates prescribed by article 34 of the CONSOB ruling no. 11768 of 23rd December 1998 relating to shares held centrally at Monte Titoli SpA and not represented by share certificates. Shareholders are reminded that, in the light of article 51 of the CONSOB ruling, after 1st January 1999 the rights attaching to securities that are not held at Monte Titoli SpA can only be exercised after the securities have been delivered to an intermediary with a view to their introduction into the system of centralised registration involved in the regime for the abolition of share certificates.
Documentation relating to points 1 to 5 of the above agenda, as required by current legislation, will be deposited not less than 15 days before the date of the meeting at the Bank’s head office (in Genoa at 15 Via Cassa di Risparmio, Investor relations Office) and, but limited to point 5 only, at Borsa Italiana SpA in Milan (6 Piazza degli Affari), for inspection by shareholders who will have an opportunity to make copies for their own use.
The Board of Directors of Banca Carige SpA - Cassa di Risparmio di Genova e Imperia in their meeting of 12th February 2001 deliberated the acceptance on the part of the Bank of the Code of Self-Regulation of Listed Companies, written communication of which will be deposited at Borsa Italiana SpA.
On the basis of the Code of Self-Regulation for Listed Companies, with reference to point 3 of the above agenda, the names of the candidates for appointment to the Board, accompanied by full documentation containing personal and professional details of each candidate, as foreseen by article 7.1 of the above- mentioned Code, will be deposited at the Bank’s head office no later than ten days before the date fixed for the Meeting.
Genoa 12th March 2001 For the Board of Directors Prof. Fausto Cuocolo The Chairman
Notice of meeting published in the Official Gazette of the Italian republic - sheet number 66 of 20th March 2000
11 BOARD OF DIRECTORS’ REPORT
12 2000: AN OVERVIEW OF THE YEAR
The world’s economy during 2000 was marked by In Germany, in particular, GDP recorded an the highest level of growth in more than 25 years: average rise of 3% spurred principally by a 2% rise 4.8%. Most of this growth was concentrated in the in internal demand. Inflation for the year was below first half of the year whilst in the last quarter there the European average at 2.1%. Unemployment for was a generalised slowing down, in part awaiting the first 11 months of the year was in line with EMU the much discussed “soft landing” of the US average, at 9.6%. economy. In France too, GDP recorded an average rise of 3% The three-fold increase in crude oil prices since spurred principally by a 3,1% rise in internal January 1999 meant there was a shift in purchasing demand. Inflation for the year was below the power during the year from those consuming oil to European average at 1.8%. Unemployment for the those producing it. Amongst the OPEC countries, first 11 months of the year dropped from 11.3% in Middle Eastern countries recorded around 7% 1999 to 9.4%. increases in GDP, more than 7% in the case of There was an upturn in the United Kingdom’s Russia. economy. GDP rose 3% in average terms boosted The United States’ economy continued its 10 by brisk internal demand (+3.7%). A strong pound year upward cycle until the second half of the year. dampened exports, which fell 0.9%. Inflation was In the first six months, the economy grew by 5.9%, up slightly over 1999 from 2.1% to 2.3%. higher than the previous figure for the second half Unemployment remained at European best levels: of 1999 (+5.5%). This growth was powered by 3.6% in November. investments in new technologies, which rose 30% In Japan, massive public investments which began over the same period in 1999. During the second in 1999 allied to an expansionary fiscal policy half of the year the principal economic indicators brought little relief to an embattled economy. GDP all recorded negative variations: growth in rose by 0.2% in the third quarter which probably consumption slipped from 6% at the end of June to means an annual rise of 1.9%. Unemployment 3.7% in the second half of the year; fixed ended the year at historically high levels of 4.8%, investments dropped from 12.7% to 3.9% and confirming the country’s difficult moment. industrial production also lost ground during the Asian countries recorded strong growth with same period. The annual average of GDP fell to GDP forecasted at around 6.8%. The economies 5%, still higher than the 4.2% recorded in 1999. benefited from the capacity of the US to absorb Inflation rose from 2.7% in January to 3.4% in exports. This was particularly the case of South December, the average for the year rising from Korea which continued its important role as 2.2% in 1999 to 3.4%. producer of new technology-related products. Within the member countries of the European However, these countries, with the exception of Monetary Union , the increases in production Indonesia, have limited energy resources and are, recorded in the first six months of the year were therefore, susceptible to external price shocks, followed by reduced growth rates in the second stemming from oil prices in particular. half, stemming from a slowdown in family Eastern Europe also recorded an upturn in consumption. The continual increases in petrol 2000. Average GDP levels forecasted are around prices did nothing to boost consumer confidence. 4.2%. Inflationary pressure, worsened by rising The average GDP for the area was 3.4% with a petrol prices was contrasted by restrictive monetary 2.8% rise in internal demand. The part played by policies. external demand on total GDP was minimal (0.6%) Italy’s GDP almost doubled over 2000 moving as strong demand for exports (+11.7) riding on the from 1.6% in 1999 to 2.9%. The result stems from back of a weak euro, was tracked by similar increases in family consumption (+2.9%) and, expansion in imports (+10.4%). Inflation rose from above all, in durables (+9.7), There was a 6.1% 1.1% to 2.3% as a result of petrol price rises. rise in gross fixed investments, particularly dynamic Unemployment was down from 10% to 9.2%. in the field of transport (+9.9%), machinery and equipment(+7.3%) and in the construction industry
13 (+3.6%). The weakness of the euro aided exports goods, and 36% in food. There were, however, falls considerably (+10.2%) and produced a positive in industrial bulk goods (-12%) and liquid bulks (- balance of trade for the first time in several years. 4%). Container traffic rose from 25,000 TEUs to Consumer price rises in the last months of the year 37,000 TEUs. due to the rise in petrol prices, raised inflation from With regards to passenger traffic, there was 1.7% in 1999 to 2.6%, in line with the European considerable expansion in the cruise segment, average. which saw more than 120,000 passengers. The Employment grew by 1.6% in average terms as a number of ferry passengers handled by the port of result of increased flexibility on the labour market Savona dropped by 6%. and expansion in the use of part-time contracts Tourism in the region was characterised by, on one (10% of the total). There was overall stability in the hand, an increase in arrivals (+1,9%) and fall in service sector whilst increased work opportunities the length of stays, on the other (-3,5%). The were created in industry. Unemployment nationally province of Genoa recorded increases both in dropped from 11.5% to 10.6% although the arrivals and stays (5.9% and 1.5%, respectively), significant differences between unemployment whilst in the provinces of La Spezia and Imperia levels in the north and south of the country remain. there were increases of 1.7% and 1% in arrivals but Significantly, 80% of new jobs was created in the the length of stays fell, respectively, 0.4% and centre and north. 2.1%. There were falls in both arrivals and stays in Unexpected increases in the state’s revenues the province of Savona of 1.2% and 7.6%. derived from expansion in taxable incomes, which There were generally satisfactory results for the led to improvements in the state’s finances and region’s agriculture. Grape harvests destined for added support for redistribution and demand. Net Ligurian wine rose 3.3% in comparison to 1999 (- public sector deficit was 0.3% of GDP - 1.5% when 6.5% nationally). Wine production increased by excluding UMTS telephone licence revenues. Even 7%. Although olive harvests were down in the so, a fall of 1.8% over 1999. The public sector season 1999/2000, the production of origin debt/GDP ratio dropped from 114.5% in 1999 to certified olive oil rose. First statistics relating to the 110.2%. Public sector borrowing requirement flower growing industry reveal a downturn in (PSBR), including telephone licence revenues, make traditional production in the face of international up 2.2% of GDP, an increase of 0.8% in competition. There was, however, an increase in comparison to 1999. demand for pot plants. Overall, the Ligurian economy in 2000 had a The industrial sector ended the year with rises both good year characterised by new jobs, reductions in in production (+5.2%) and turnover (+6.4%) in unemployment benefit covered redundancies comparison to the third quarter of 1999. (“cassa integrazione”), falls in unemployment, and The average inflation rate was 2.1%, lower than the expansion in innovative labour solutions. national figure. The region’s best economic performer was the port Monetary policy consolidated its unitary sector. approach resulting from the launch of the euro. The The port of Genoa recorded an annual increase in EMU’s currency had a difficult year, losing ground goods traffic (nearly 52 million tonnes) due to against all major currencies. In particular, the strong rises in packaged goods, bulk and other euro/dollar rate touched in November its lowest conventional goods. Container traffic measured in level since the launch of the euro (-42%). Overall, TEUs (twenty extension units) recorded an annual during the year the exchange rate fell 7.4%. rise of 21.6%. There were also satisfactory results in Against this backdrop, the European Central Bank passenger traffic with more than 2,700,000 followed a substantially neutral policy. Monetary passengers in transit either by ferries or cruises. policy is aimed at guaranteeing price stability and There was a rise in the number of goods and low inflation whilst not impeding economic growth. containers handled by the port of La Spezia, However, during the year it was restrictive with rate totalling more than 16 million tonnes (+8%). There hikes which took the discount rate from 3% at the was a similar increase in the number of containers end of 1999 to 4.75%. On money markets, handled: more than 900,000 TEUs. interbank rates rose steadily until November, falling The port of Savona ended the year with 13.2 from December onwards. Interbank automated million of goods handled, 8% up on 1999. This quotation markets also saw constant increases in growth was due to a 39% increase in conventional rates, an average of 1.50 points over the year.
14 Consequently, Italian government bond rates rose subsidiaries and partners). The achievement of until September, falling to previous year levels in these strategic goals will create the best conditions the last quarter. in which the Bank’s majority shareholder, the Cassa Headline results for the Italian banking industry di Risparmio di Genova e Imperia Foundation, can include a 5.6% rise in funds to total Lit. 1,613 release its holding in the Bank in the manner thousand billion. In particular, bonds rose 7.3% as foreseen by Law 461/98 (‘the Ciampi Act’). did customer deposits (+0.2%). Internal growth aims at putting in place an As a result of considerable volatility on financial integrated multi-channel distribution model which is markets, assets under management suffered high able to satisfy the banking, finance and insurance redemption levels in mutual funds specialising in needs of our customers. This entails the following: bonds and Italian issuers. This was, in part, offset the development of our traditional branch network; by money flows towards share, balanced and the overhaul of the distribution system in terms of global mutuals. customer segmentation; focus on the opportunities Lending to residents was vibrant, reaching Lit. offered by e-banking; a network of registered 1,528 thousand bn by the end of the year. This was financial promoters and advisers in co-operation a 13.4% rise in comparison to the previous year’s with our insurance subsidiaries; the development of figure of 9%. Lending in lira and euro rose by our finance area. 13.3% and by 16% in currency. The increase was In this context, expansion into new operating areas principally in the short-term segment, above all to and increased synergies with branches and businesses, whilst the medium/long-term segment insurance offices are essential. recorded a slowing down mainly as a result of a External growth is based on the following: drop in demand for mortgages. integration with our banking subsidiaries (Cassa di The quality of credit system-wide continued to Risparmio di Savona and Banca del Monte di improve. Gross bad loans dropped 13.8% and the Lucca); increased synergies with the Bank’s foreign bad loans/lending ratio fell from 7.4% to 5.7%. partners (the French Caisse Nationale des Caisses Recourse to securitisation during the year played its d’Epargne et de Prévoyance - CNCEP and Caisse part. des Dépôts et Consignations -CDC, the German Average borrowing rates progressively increased Westdeutsche Landesbank Girozentrale -WestLB), during the year, reaching a peak in December at and with the Spanish shareholder Caja de Ahorros 2.20%. Current account rates, in particular, rose El Monte de Sevilla; the acquisition of banks or from 1.22% to 2.08%. Average short-term lending finance companies or segments of businesses rates fell from the 6.90% in November to 6.88% in compatible with the expansion of our customer December. The average spread in the first 11 base. months of the year widened from 4.01% to 4.76%, The strategies outlined produced concrete results narrowing in December (4.68%). during 2000. In particular,10 new branches were opened, three in Liguria, one in Piedmont, two in Lombardy, one in Emilia Romagna and three in Sardinia. The re-organisation of distribution STRATEGY channels took the form of segmentation by customer type, geographical area and sales channel. In this way, organisation is inspired by the Banca Carige (also referred to in this report as logic of ‘by customer’ rather than ‘by product’. This ‘Carige’ or ‘the Bank’) continued to consolidate its policy involves every aspect of the Bank’s activities strategies aimed at creating long-term shareholder at both private and corporate level. During the value. These strategies follow three lines of year, a network of private consultants became development: expansion in operational capacities, operational which aims at offering personalised increased profitability, and heightened efficiencies. financial solutions to high net worth clients. A Expansion in operational capacities is aimed at corporate module was also finalised which breaks reaching the optimal critical mass necessary for down medium to large companies on the basis of economies of scale. It is achieved both internally turnover and so provides the Bank with the (expansion of the Banca Carige branch network) information platform required to identify and satisfy and externally (acquisition of suitable businesses to needs. extend customer base, and co-operation with
15 Innovations in distribution include the area of e- its Group insurance subsidiaries. This is particularly banking. The potential offered by internet banking the case as a result of opportunities offered by Bank is enormous and the Bank has already started to of Italy and ISVAP rulings which allow for the cross- develop a structure which enables customer access selling of insurance and standardised banking not only to the fullest range of Carige services and products. The objective in the area of products but which also provides access to non- Bancassurance is to increase the volume of Carige solutions. insurance premiums sold taking advantage of the Heightened synergies with our insurance distribution of opportunities offered by the sales subsidiaries took the form during the year of network of the parent company and subsidiaries. In expansion in the network of those insurance agents terms of insurance-bank products, the Bank is who act as registered financial advisers in addition strengthening its network of financial advisers to the distribution of standardised banking products amongst insurance agents thereby expanding sales by insurance agents who are not registered channels for a wide range of banking products financial advisers. (customer deposits, lending, assets under External growth received significant impetus with the management and under custody, payment services acquisition of 21 branches from the Banco di such as POS terminals, credit and debit cards). The Sicilia, 15 in the province of Palermo, 6 in the sale of Carige’s standardised banking products is province of Enna. The purchase, which becomes also carried out by insurance agents who are not effective on 31 December 2000, is part of a financial advisers. strategy aimed at increasing synergies with our This product diversification is able to satisfy the insurance subsidiaries which already operate in requirements of specific customer product Sardinia and Sicily. segments, such as pension solutions. In this area, Integration with Banca Carige’s banking Carige offers its own Carige open pension fund, subsidiaries continued in 2000. Both Cassa di open to the self-employed and employees whose Risparmio di Savona and Banca Monte di Lucca national contract foresees such funds. now use Carige’s EDP facilities in addition to With regards to credit policy, the Bank has distributing asset management and banking- developed specific and innovative models of insurance products. corporate finance thanks also to co-operation with Collaboration with our foreign partners is based on its European partners. Organisationally, an internal the development of a common strategy which credit rating model has been introduced in order to invests in and safeguards the institutional maximise the added value intrinsic in the characteristics typical of the ex-savings banks and information flows which the Bank has available. In at same time exploits the extensive retail network in this way, Carige will obtain a competitive an efficient and integrated way. Agreements were advantage whilst at the same time putting in place signed during the year concerning a wide range of a pricing methodology coherent with risk profiles areas: the supply of reciprocal finance and other (expected and unexpected losses) present amongst services to customers of the institutions involved; different customer segments. The model aims at payment services; improvements in channelling minimising unexpected losses through portfolio payment flows to and from Italy; asset diversification in order to increase shareholder management; bancassurance; corporate finance; value. capital and derivatives markets activities; increased Risk management plays a crucial role in the Bank’s product diversification generated by greater operational strategy. The quality of our credit operating capacities. portfolio and the effective covering of risk positions Increased profitability is crucially linked to bring benefits to the image of the Bank and the diversification of income sources and a responsible improved rating means cheaper access to funding credit policy. With reference to the first, income on financial markets. The operation of securitisation sources include traditional intermediation, payment during the month of December described elsewhere systems and assets under management, the latter in this report enabled the Bank to convert illiquid by means of personalised products tailored to suit non-performing balance sheet positions into items the needs of the customer. Particular attention was with market rate returns. given to the development of bank-insurance and Heightened efficiency stems from strict cost controls insurance-bank projects. Banca Carige is especially in the area of human resources and IC&T committed to exploiting all possible synergies with
16 allied to a careful evaluation of all aspects staff in favour of younger personnel at reduced personnel management (productivity, mobility, etc.). costs to the Bank continued during the year with Budget controls on general costs continue to keep incentives to retirement for those entitled. spending levels substantially stable. Re-organisation The Bank’s solidity both in its asset and financial of the Bank’s I&CT arm was aimed at putting in structure, its strong ties to its operating area, and its place automated distribution channels for the long-sighted strategic plans were all appreciated by supply of products and services linked to remote international rating agencies, such as Fitch IBCA, banking (home banking, phone banking, corporate Standard & Poor’s, and Moody’s, which all banking) and e-banking. Personnel policy was maintained the ratings assigned to the Bank in based on two main pillars: investment in learning previous years. and training, leaner organisation with more staff directly involved in market activities. The turnover of
BANCA CARIGE RATINGS
short-term long-term BFSR (1) Individual (1) Legal (2) Fitch IBCA F1 A - C 4 Moody's P1 A2 C - - Standard & Poor's A2 A- - - -
(1) Rating of financial solidity on a scale from A to E. (2) Rating of likelihood of state intervention in case of crisis on a scale from 1 to 5.
17 5
BORROWING AND LENDING ACTIVITIES
At the end of 2000, total balance sheet been prepared excluding the effects of the ex- aggregates (direct and indirect deposits, Banco di Sicilia branches. As the purchase of customer and inter-bank lending) included those the branches had operational effect from related to business handled by the 21 branches midnight 31/12/00, income statement items of the Banco di Sicilia acquired in December. In remain unchanged. order to aid comparison with 1999, pro forma balance sheet aggregates at 31/12/00 have
TOTAL FINANCIAL INTERMEDIATION ACTIVITIES (billions of Italian Lire)
Change % 31/12/00 30/9/00 31/12/99 31/12/98 2000 2000 1999 pro forma p.f. Total (A+B) 34,066.4 33,280.6 33,048.1 31,788.4 29,958.8 7.2 4.7 6.1
Direct deposits (A) 13,391.2 13,009.1 12,332.5 12,325.7 11,789.9 8.6 5.5 4.5 % Total 39.3% 39.1% 37.3% 38.8% 39.4% Indirect deposits (B) 20,675.2 20,271.5 20,715.6 19,462.7 18,168.1 6.2 4.2 7.1 % Total 60.7% 60.9% 62.7% 61.2% 60.6% - Assets under management 10,294.7 10,177.4 10,429.1 11,039.0 9,629.0 - 6.7 - 7.8 14.6 % Total 30.2% 30.6% 31.6% 34.7% 32.1% % OFIA 49.8% 50.2% 50.3% 56.7% 53.0% - Assets in custody 10,380.5 10,094.1 10,286.5 8,423.7 8,539.1 23.2 19.8 - 1.4 % Total 30.5% 30.3% 31.1% 26.5% 28.5% % OFIA 50.2% 49.8% 49.7% 43.3% 40.7%
Total Financial Intermediation rose 6.2% (up 4.2% excluding the new branch Activities (TFIA) - Direct and Indirect deposits acquisitions in Sicily). The previous year’s - totalled Lit. 34,066.4 bn at year end, a rise of increase was 7.1%. 7.2% over the previous year’s result (Lit. Indirect deposits now account for 60.7% of 31,788.4 bn at 31/12/99). Excluding the TFIA, evenly distributed between assets under deposits related to the 21 branches purchased management (49.8% of indirect deposits) and from Banco di Sicilia, the annual rise was of assets in custody products. The ratio to direct 4.7%. Direct deposits (customer deposits) deposits dropped from 1.58 at 31/12/99 to recorded an 8.6% rise (+5.5% excluding the 1.54 at 31/12/00. Sicilian branches) to Lit. 13,391.2 bn. Indirect deposits (other financial intermediation activities)
18 Total financial intermediation activities (billions of Italian Lire)
31,788 34,066 40,000 29,958
30,000
20,000
10,000 Direct deposits 0 Assets in custody 1998 1999 2000 Assets under management
At 31/12/00, total funds, which include 16.9% in comparison to Lit. 15,324.5 bn customer deposits (Lit. 13,391.2 bn), interbank recorded at 31/12/99. The increase for the deposits (Lit. 4,522 bn) and funds managed on year excluding the funds generated by the new behalf of third parties (Lit. 450 million), branches in Sicily is 14.4%. amounted to Lit. 17,913.6 bn, an increase of
FUNDING (billions of Italian Lire) Change % 31/12/00 30/9/00 31/12/99 31/12/98 2000 2000 1999 pro-forma p.f. Total (a+b+c) 17,913.6 17,531.4 16,244.5 15,324.5 15,302.8 16.9 14.4 0.1
Direct deposits (a) 13,391.2 13,009.1 12,332.5 12,325.7 11,789.9 8.6 5.5 4.5 Amounts owed to customers 7,919.0 7,586.2 6,911.7 7,381.6 7,225.4 7.3 2.8 2.2 current accounts 6,601.3 6,417.7 5,795.4 6,284.2 5,883.8 5.0 2.1 6.8 repurchase agreements 646.8 646.8 583.7 520.4 732.8 24.3 24.3 - 29.0 saving deposits 649.4 500.2 505.5 543.7 562.2 19.4 - 8.0 - 3.3 loans from international organizations 18.1 18.1 22.9 31.1 43.6 - 41.8 - 41.8 - 28.7 other borrowings 3.4 3.4 4.2 2.2 3.0 54.5 54.5 - 26.7 Debts evidenced by certificates 5,472.2 5,422.9 5,420.8 4,944.1 4,564.5 10.7 9.7 8.3 bond certificates 4,385.8 4,385.8 4,404.8 3,745.9 2,902.2 17.1 17.1 29.1 certificates of deposits 922.3 894.7 938.6 1,086.8 1,515.6 - 15.1 - 17.7 - 28.3 outstanding cheques 139.5 139.5 72.5 96.0 129.0 45.3 45.3 - 25.6 cash bonds 24.6 2.9 4.9 15.4 17.7 59.7 - 81.2 - 13.0
short term deposits 8,706.2 8,360.3 7,597.9 8,100.9 7,923.2 7.5 3.2 2.2 % Total 65.0 64.3 61.6 65.7 67.2 long term deposits 4,685.0 4,648.8 4,734.6 4,224.8 3,866.7 10.9 10.0 9.3 % Total 35.0 35.7 38.4 34.3 32.8
Amounts owed to credit institutions (b) 4,522.0 4,521.9 3,911.5 2,998.4 3,506.6 50.8 50.8 - 14.5 Deposits 3,217.1 3,217.0 2,881.0 1,928.6 2,970.3 66.8 66.8 - 35.1 Financing 567.7 567.7 541.1 453.1 497.6 25.3 25.3 - 8.9 Current accounts 75.2 75.2 26.2 41.8 38.7 79.9 79.9 8.0 Repurchase agreements 662.0 662.0 463.2 574.9 - 15.2 15.2 … Due to central banks - - - - - … … …
Funds managed on behalf of third parties (c) 0.4 0.4 0.5 0.4 6.3 - - -93.65
Direct deposits (Lit. 13,391.2 bn) were up Term Note Programme, which offers the Bank 8.6% over 1999 (+5.5% excluding the Sicilian access to new medium/long - term funding to branches). This growth was aided by the second complement its traditional sources necessary for tranche (Lit. 581 bn) in the Bank’s Euro Medium the realisation of future growth strategies. An analysis by product reveals a 5% increase in Bank continued its traditional bond issues for current accounts, which rose from Lit. 6,284.2 retail customers which covered the full range of bn to Lit. 6,601.3 bn (+2.1% excluding Sicily). investment needs: 13 issues in total of which 4 Bonds totalled Lit. 4,385.8 bn (+17.1%). In were fixed rate, 3 floating , 1 mixed, 2 index addition to the EMTN referred to above, the
19 linked and 3 zero coupon. Bonded funding, as a including the branch acquisitions in Sicily, 3.2% result, rose 1.9%. without. Other direct customer products include The item ‘Amounts owed to credit repurchase agreements which, for the first time institutions’ recorded a 50.8% increase over in two years, recorded an increase (+24.3%) to 31/12/99 from Lit. 2,998.4 bn to Lit. 4,522 reach Lit. 646.8 bn. This rise appears to be bn.
DEPOSITS (billions of italian Lire)
13,391 12,326 14,000 11,790 12,000 10,000
8,000 6,000 4,000 Repurchase agreements 2,000 Certificates of deposits 0 Bond certificates 1998 1999 2000 Other borrowings linked to a need for more liquid investment In particular, deposits reached Lit. 3,217.1 bn, solutions in the face of the turbulence recorded an increase of 66.8%, whilst repurchase during 2000 on financial markets. Certificates agreements amounted to Lit. 662 bn (+15.2%), of deposit dropped overall by 15.1%: a slight financing rose to Lit. 567.7 bn (+25.3%) and increase in the short-term segment current accounts recorded the highest increase accompanied by more substantial reductions in of 79.9% to total Lit. 75.2 bn.At December CDs with maturities over 18 months. 2000, 73.3% of total amounts owed to banks Medium/long-term deposits rose by 10.9% was in euro or EU area currencies (Lit. 3,316 (1999: +9.3%) and now account for 35% of bn). total customer deposits. Short-term deposits Funds managed on behalf of third (65% of the aggregate total) rose 7.5% parties were the same as 31/12/99.
20 DIRECT DEPOSITS (1) - DISTRIBUTION BY SECTOR
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Amounts owed to customers 7,919.0 7,381.6 7,225.4 Public Administration 182.7 2.3% 145.1 2.0% 154.0 2.1% Financial institutions 343.6 4.3% 543.0 7.3% 494.6 6.9% Non-financial institutions and personal businesses 1,413.7 17.9% 1,299.5 17.6% 1,202.4 16.6% Private social bodies 362.0 4.6% 278.6 3.8% 303.1 4.2% Families 5,538.0 69.9% 5,034.9 68.2% 4,986.4 69.0% Total residents 7,840.0 99.0% 7,301.1 98.9% 7,140.5 98.8% Rest of the world 79.0 1.0% 80.5 1.1% 84.9 1.2% Total 7,919.0 100.0% 7,381.6 100.0% 7,225.4 100.0%
Debts evidenced by certificates 5,472.2 4,944.1 4,564.5
TOTAL DIRECT DEPOSITS 13,391.2 12,325.7 11,789.9 (1) Balance Sheet (Liabilities) captions 20 and 30.
An analysis by sector shows the concentration of The second most important source of funding is direct deposits amongst families, which account non-financial institutions and personal for 69.9% of the aggregate total (Lit. 5,538 bn), businesses, which total Lit. 1,413.7 bn, 17.9% slightly up over 68.2% of the total recorded in of the total (1999: 17.6%). 1999. DIRECT DEPOSITS (1) - GEOGRAPHICAL DISTRIBUTION
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Liguria 12,213.6 91.2% 11,619.1 94.3% 11,172.4 94.8% Sicily 382.1 2.9% - - - - Lombardy 269.9 2.0% 209.6 1.7% 202.8 1.7% Piedmont 243.2 1.8% 224.9 1.8% 207.8 1.8% Emilia Romagna 203.6 1.5% 182.0 1.5% 160.5 1.3% Sardinia 16.1 0.1% 0.1 - - - Tuscany 15.6 0.1% 22.5 0.2% 13.0 0.1% Veneto 13.2 0.1% 5.5 - 1.6 - Total Italy 13,357.3 99.7% 12,263.7 99.5% 11,758.1 99.7% Abroad 33.9 0.3% 62.0 0.5% 31.8 0.3% Total direct deposits 13,391.2 100.0% 12,325.7 100.0% 11,789.9 100.0% (1) Balance Sheet (Liabilities) captions 20 and 30.
Geographical distribution of customer deposits region now represents 3% of the total, remains concentrated in the Bank’s traditional overtaking Piedmont, Lombardy and Emilia operating area of Liguria: 91.2% of direct Romagna at 2% each. Tuscany, Veneto and deposits. Further proof of Liguria’s dominance is Sardinia continue to represent marginal shares shown by the fact that funding deriving from the (0.1%). Further information is given at sections EMTN programme is exclusively from the region. 6 and 11, part B of the explanatory notes. The Bank’s recent arrival in Sicily means that this
21 INDIRECT DEPOSITS (billions of Italian Lire ) Change % 31/12/00 31/12/00 31/12/99 31/12/98 2000 2000 1999 pro forma p.f. Total (A+B) 20,675.2 20,271.5 19,462.7 18,168.1 6.2 4.2 7.1
Assets under management (A) 10,294.7 10,177.4 11,039.0 9,629.0 - 6.7 - 7.8 14.6 Mutual funds and unit trusts 5,064.5 4,984.5 5,881.7 4,897.6 - 13.9 - 15.3 20.1 Private banking 4,438.3 4,413.9 4,648.5 4,361.8 - 4.5 - 5.0 6.6 including: Security management 1,799.3 1,799.3 1,915.3 1,848.7 - 6.1 - 6.1 3.6 Mutual funds management 2,639.0 2,614.6 2,733.2 2,513.1 - 3.4 - 4.3 8.8 Bancassurance products 791.9 779.0 508.8 369.6 55.6 53.1 37.7
Assets in custody (B) 10,380.5 10,094.1 8,423.7 8,539.1 23.2 19.8 - 1.4 Government securities 6,102.4 5,969.4 5,256.5 6,168.4 16.1 13.6 - 14.8 Others 4,278.1 4,124.7 3,167.2 2,370.7 35.1 30.2 33.6
Indirect deposits totalled Lit. 20,675.2 bn at upturn during the last part of the year: after a the end of the year, an increase of 6.2% fall of Lit. 1,312 bn in the first nine months of (+4.2% excluding Sicily). During the year, assets the year, reaching Lit. 2,965.3 bn in September, under management recorded falls whilst assets there was an influx of more Lit. 100 bn in the in custody rose. last quarter, as a result also of the launch of the In particular, assets under management, Eptafund funds product. By December, this had after three years of intense growth which saw total funds of Lit. 278.6 bn. The fall in the bond the aggregate rise by more than Lit. 5,500 bn, component was only partially offset by better slipped 6.7% (down 7.8% excluding Sicily) to performances by share funds, which rose by reach Lit. 10,294.7 bn. This fall, though more more than Lit. 300 bn during the year. Share marked during the first quarter of the year, funds inverted the performance recorded by typified the whole year. bond funds: growth in the first eight months of In detail, private banking slipped 4.5% (1999: the year ( +Lit. 553.6 bn) and a fall in the last +6.6%), whilst mutual funds were down 13.9% part as share markets slipped (Lit. -246.8 bn). (1999: +20.1%) as a result of fund The year-end result was Lit. 1,612.9 bn withdrawals particularly from bond segments. (+23.5%). Balanced funds rose by 12.2 to Lit. Bank-insurance products saw a rise of 55.6% 267.2 bn whilst other product lines (flexible (+53.1% excluding Sicily) in comparison to the funds, closed funds and unit trusts) continue to previous year’s figure of 37.7%. play a marginal role in terms of funds collected. Security management recorded a fall of 6.1% Assets in custody (Lit. 10,380.5 bn; (1999: +3.6%). +23.2%) reflected more speculative trends than Mutual funds management ended the year with asset management. There was strong growth in a 3.4% decrease in funds managed to total Lit. the first half of the year and more moderate 2,639 bn at 31/12/00 (1999: +8.8%). The increases in the second. The increase in volumes two balanced funds along with the share fund was shared evenly between government grew whilst the more risk-adverse funds fell as a securities (+Lit. 845.9 bn) and other securities result of a poor first half of the year for bond (+Lit. 1,110.9 bn). markets. The dominant share of indirect deposits - Lit. Mutual funds bore the brunt of the market 16,953.6 bn, 82.1% of the total - is volatility which characterised 2000. Considering concentrated amongst families, despite a slight the performance of funds prior to the purchase fall in comparison to 1999 (82.9%). Non- of the Sicilian branches, the bond component financial institutions and family businesses had a particularly poor year, down Lit. 1,211.7 increased their share from 5.2% in 1999 to bn (-28.3%) over 1999. There was, however, an 7.1% at 31/12/00 (Lit. 1,467.9 bn).
22 INDIRECT DEPOSITS - DISTRIBUTION BY SECTOR
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Public Administration 765.0 3.6% 395.8 2.0% 362.6 2.0% Financial institutions 1,199.2 5.8% 1,621.0 8.4% 1,330.5 7.3% Non-financial and personal businesses 1,467.9 7.1% 1,017.9 5.2% 948.3 5.3% Private social bodies 103.4 0.5% 93.0 0.5% 94.7 0.5% Families 16,953.6 82.1% 16,144.1 82.9% 15,400.2 84.7% Total residents 20,489.1 99.1% 19,271.8 99.0% 18,136.3 99.8% Rest of the world 186.1 0.9% 190.9 1.0% 31.8 0.2% Total 20,675.2 100.0% 19,462.7 100.0% 18,168.1 100.0%
Liguria clearly maintains its geographical substantial positions to Liguria. The share of the primacy (89.4%), whilst Lombardy drops from Bank’s other operating areas remained 6.6% to 4.5% as a result of the transfer of some unchanged.
INDIRECT DEPOSITS - GEOGRAPHICAL DISTRIBUTION
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Liguria 18,479.8 89.4% 17,338.9 89.2% 16,546.8 91.1% Lombardy 937.2 4.5% 1,292.1 6.6% 885.8 4.9% Piedmont 500.5 2.4% 505.1 2.6% 469.2 2.6% Sicily 403.7 2.0% - - - - Emilia Romagna 283.7 1.4% 278.2 1.4% 235.9 1.3% Tuscany 24.9 0.1% 21.8 0.1% 19.0 0.1% Veneto 15.2 0.1% 8.7 - 1.0 - Sardinia 6.1 - 0.4 - - - Total Italy 20,651.1 99.9% 19,445.2 99.9% 18,157.7 100.0% Abroad 24.1 0.1% 17.5 0.1% 10.4 - Total indirect deposits 20,675.2 100.0% 19,462.7 100.0% 18,168.1 100.0%
The Bank’s total lending at the end of 2000 this amount, the rise in lending drops to 13.3% amounted to Lit. 19,552.1 bn, up 14.1% over for the year. The medium/long-term aggregate the previous year. The figure excluding lending increased by 17.5% to Lit. 7,414.1 bn. related to the Sicilian branches is 11.8%. Lending in euro rose 12.9% to Lit. 12,247.4 bn. Lending to customers totalled Lit. This figure accounts for 94.9% of total customer 12,905.1, an annual rise of 13.7% (+12.7% lending, excluding bad loans. Lending in excluding Sicily) and similar to previous year’s currency recorded substantial growth in the levels: 12.6%. Short-term lending rose 20.8% to twelve months from December 1999 to total Lit. Lit. 5,190.4 bn, in part the result of lending 657.7 bn (+31.1%). exposures with regards to a special purpose vehicle formed for the securitisation of bad loans (around Lit. 320 bn to be securitised). Excluding
23 LENDING (billions of Italian Lire)
Change % 31/12/00 30/9/00 31/12/99 31/12/98 2000 2000 1999 pro forma p.f. Total (a+b+c) 19,552.1 19,167.1 18,153.7 17,141.5 17,037.3 14.1 11.8 0.6
Loans to customers (a) 12,707.6 12,595.0 11,898.4 11,009.3 9,745.7 15.4 14.4 13.0 -Gross value (1) 12,905.1 12,792.5 12,229.7 11,350.4 10,078.7 13.7 12.7 12.6 . Commercial Credit 5,849.2 5,789.8 5,388.0 5,174.6 4,630.7 13.0 11.9 11.7 . Real estate and Public Works mortgages 3,760.1 3,714.5 3,697.2 3,335.4 2,836.8 12.7 11.4 17.6 . Industrial and Agricultural credit 1,843.4 1,843.4 1,615.2 1,363.7 1,261.2 35.2 35.2 8.1 . Parabanking (2) 796.8 796.8 746.8 655.9 543.8 21.5 21.5 20.6 . Others 355.0 354.3 23.5 74.5 42.3 376.5 375.6 76.1
-short term loans 5,190.4 5,131.4 4,678.4 4,296.9 3,824.1 20.8 19.4 12.4 % Gross value 40.2 40.1 38.3 37.9 37.9 -long term loans 7,414.1 7,367.4 6,792.4 6,307.2 5,490.7 17.5 16.8 14.9 % Gross value 57.5 57.6 55.5 55.6 54.5
. Bad loans 300.6 293.7 759.0 746.3 763.9 - 59.7 - 60.6 - 2.3 % Gross value 2.3 2.3 6.2 6.6 7.6
-Specific allowances for loan losses (-) 197.5 197.5 331.3 341.1 333.0 - 42.1 - 42.1 2.4
Loans to banks (b) 1,863.4 1,591.0 1,029.9 1,198.3 1,646.3 55.5 32.8 - 27.2 -Gross value 1,876.5 1,604.1 1,042.4 1,219.0 1,666.1 53.9 31.6 - 26.8 . Compulsory reserves 115.2 115.2 75.4 74.1 16.9 55.5 55.5 338.5 . Deposits 1,259.7 992.6 724.9 798.9 1,475.7 57.7 24.2 - 45.9 . Overdraft facilities 342.0 342.0 84.2 104.4 45.8 227.6 227.6 127.9 . Repurchase agreements - - - - - … … … . Other loans 159.6 154.3 157.9 241.6 127.7 - 33.9 - 36.1 89.2
-Specific allowances for loan losses (-) 13.1 13.1 12.5 20.7 19.8 - 36.7 - 36.7 4.5
Securities (c) 4,981.1 4,981.1 5,225.4 4,933.9 5,645.3 1.0 1.0 - 12.6 -Government securities 2,706.6 2,706.6 3,443.6 3,403.0 5,066.9 - 20.5 - 20.5 - 32.8 -Other securities 2,001.1 2,001.1 1,454.7 1,254.3 416.4 59.5 59.5 201.2 -Shares and equity securities 273.4 273.4 327.1 276.6 162.0 - 1.2 - 1.2 70.7
(1) Including bad loans (2) Including leased fixed-assets.
The Bank’s lending activities are divided into Total credits allocated in the forms of mortgages product bases. The Commercial Credit and loans to public bodies by the Real Estate Division handles short-term lending also in and Public Works Mortgage Division currency. Total lending for the division at the reached Lit. 3,760.1 bn, an increase of 12.7%. end of 2000 amounted to Lit. 5,849.2 bn, The aggregate represents 29.1% of the total. 45.3% of total lending. This figure represents a The Industrial and Agricultural Credit 13% rise over 1999 (+11.9% excluding the Division supplies medium/long-term financing branches in Sicily). This trend was positively to businesses and these rose by 35.2% to Lit. influenced by certain products such as current 1,843.4 bn, 14.3% of total lending. account lending, advances with recourse, The Parabanking Division offers leasing medium/long-term syndicated loans, special and factoring products in addition to consumer personal loans, salary-backed loans, and credit. During the year the division recorded an foreign lending whilst shorter-term syndicated increase of 21.5% to total Lit. 796.8 bn, 6.2% loans, discounting of notes and lending against of total lending. There was substantial growth pledged goods recorded decreases for the particularly in the leasing area which amounted period. to Lit. 568.4 bn, an increase of 30.7%. Less significant were the rises recorded by factoring
24 (+3.2%; Lit. 217.2 bn) and consumer credit related leasing, whilst both instrumental and (+7%; Lit. 11.2 bn). property leasing recorded falls of 1.1% and The Bank’s leasing activities have grown 2.8%, respectively. The related amounts saw considerably over the last three years, at levels good results in car-related leasing (+16.8%) considerably higher than those recorded in the and in instrumental leasing (+45%). The system. This is due to increased operational property segment dropped 9.6%. efficiencies and decision-making at branch level The Division’s factoring activity recorded a which has led to greater professional skills reduction in the number of contracts stipulated amongst staff and the inevitable benefit this has (-21.1%) and a rise in the related amounts for customer satisfaction. The number of (+54.2% to Lit. 126 bn). Total outstandings at contracts stipulated rose 0.7% in number and 31/12/00 amounted to Lit. 696.6 bn and 4.4% in amounts handled. The limited growth turnover ended the year at Lit. 764.9 bn rate in contracts is due a 4.2% rise in car- (+5.9%).
LOANS TO CUSTOMERS (1) - DISTRIBUTION BY SECTOR
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Public Administration 1,707.7 13.2% 1,192.1 10.5% 1,029.9 10.2% Financial institutions 968.8 7.5% 663.9 5.8% 550.5 5.5% Non-financial and personal businesses 7,597.6 59.0% 7,025.0 62.0% 6,475.7 64.3% Agriculture, farming and fishing 125.0 1.0% 123.1 1.1% 115.3 1.1% Energy products 285.4 2.2% 132.1 1.2% 178.3 1.8% Mineral and ferrous metals and non ferrous 139.4 1.1% 133.9 1.2% 66.2 0.7% Mineral and non metallic products 163.6 1.3% 179.7 1.6% 181.7 1.8% Chemical products 91.6 0.7% 94.3 0.8% 94.5 0.9% Metal products 203.4 1.6% 211.1 1.9% 187.6 1.9% Agricultural and industrial machinery 238.7 1.8% 301.7 2.7% 323.3 3.2% Office equipment 52.2 0.4% 83.6 0.7% 52.8 0.5% Electrical supplies 151.4 1.2% 119.3 1.1% 115.3 1.1% Means of transport 116.2 0.9% 113.5 1.0% 65.1 0.6% Food, drink, tobacco 240.6 1.9% 246.5 2.2% 218.3 2.2% Textiles, leather goods, clothing 90.5 0.7% 92.7 0.9% 74.5 0.7% Paper, printing and publishing 102.1 0.8% 93.3 0.8% 86.8 0.9% Rubber and plastic goods 97.9 0.8% 83.6 0.7% 78.7 0.8% Other industrial products 135.8 1.1% 107.4 0.9% 103.3 1.0% Building and public works 1,249.0 9.7% 1,225.7 10.8% 1,205.5 12.0% Wholesale & retail trade, salvage and repairs 1,612.8 12.5% 1,510.2 13.3% 1,420.3 14.1% Hotel and catering services 339.7 2.6% 345.3 3.0% 339.5 3.4% Transport services 171.2 1.3% 147.6 1.3% 160.2 1.6% Air and sea transport-related services 517.9 4.0% 366.8 3.2% 304.2 3.0% Transport-related services 395.8 3.1% 340.1 3.0% 307.5 3.1% Communications-related services 12.9 0.1% 8.4 0.1% 7.2 0.1% Sales-related services 1,064.5 8.2% 965.1 8.5% 789.6 7.8% Private social bodies 31.4 0.2% 27.1 0.2% 25.7 0.3% Families 2,316.8 18.0% 2,149.6 18.9% 1,845.9 18.3% Total residents 12,622.3 97.9% 11,057.7 97.4% 9,927.7 98.5% Rest of the world 282.8 2.1% 292.7 2.6% 151.0 1.5% Total 12,905.1 100.0% 11,350.4 100.0% 10,078.7 100.0%
(1) Balance Sheet (Assets) caption 30 inclusive of expected losses and leasing. (2) At 31/12/00 this includes Lit. 320 bn in the form of securitised bad loans managed by a company, the special purpose vehicle.
25 Consumer credit, in line with system-wide (12.5% of the total; Lit. 1,612.8 bn), albeit trends, expanded: new financing totalled 2,737 down on 13.3% recorded in 1999. The branch in number for a total of Lit. 7.7 bn, a rise of which recorded the highest level of growth, in 9.1% over 1999. There was considerable absolute terms, was air and sea-related services expansion in credits for production and which reached Lit. Lit. 517.9 bn (+ Lit. 151.1 manufacturing (non-financial institutions and bn; +41.2%). This branch of the economy now family businesses) for a total of Lit. 7,597.6 bn accounts for 4% of total lending, 3.2% at the (+8.2%). There has been, however, a end of 1999. Agricultural and industrial contraction in the share represented by machinery dropped 20.9% (-Lit. 63 bn) to Lit. consumer credits of total lending, which has 238.7 bn. Lending to the building trade now fallen from 64.3% in 1998 to 59% in 2000. accounts for less than 10% of the aggregate The next sector for consumer credit is families. total. The share represented by the first 5 Here too, the share of total lending has branches of non-financial and family businesses decreased, to 18% (Lit. 2,316.8 bn) at (wholesale and retail trade, salvage and repairs; 31/12/00. sales-related services; sea and air transport The Public Administration recorded an increase services; transport -related services) remained in its share which moved from 10.5% to 13.2% substantially unchanged at 31/12/00 and of total credits (Lit. 1,707.7 bn). There was little account for 37.5% of the total. Lending is change in the shares represented by other concentrated in Liguria: 75.9% of total lending. sectors (private social bodies and credits to the The figure is down on the 77.7% recorded for rest of the world). Securitised credits referred to 1999. This is a result of increased activity above relate to financial institutions which, as a outside the Bank’s traditional operating area in result rose from 5.8% to 7.5%. regions such as Lombardy (2000: 9.6%; 1999: With regards to other branches of activity within 8.1%), Emilia Romagna (2000: 6.7%; 1999: non-financial and personal businesses, 6.5%), and Piedmont (2000: 5%; 1999: wholesale and retail trade services, salvage and 5.9%). Credits related to the Bank’s branches in repairs accounts for the largest share of lending Sicily represent 0.9% of the total.
LOANS TO CUSTOMERS (1) - GEOGRAPHIC DISTRIBUTION
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Liguria 9,808.4 75.9% 8,826.7 77.7% 8,219.4 81.6% Lombardy 1,240.1 9.6% 923.2 8.1% 517.3 5.1% Emilia Romagna 865.1 6.7% 740.1 6.5% 629.0 6.2% Piedmont 649.7 5.0% 664.0 5.9% 583.7 5.8% Sicily 112.6 0.9% - - - - Tuscany 60.5 0.5% 65.5 0.6% 51.0 0.5% Veneto 62.1 0.5% 33.5 0.3% 0.8 - Sardinia 8.6 0.1% - - - - Total Italy 12,807.1 99.2% 11,253.0 99.1% 10,001.2 99.2% Abroad 98.0 0.8% 97.4 0.9% 77.5 0.8% Total loans to customers12,905.1 100.0% 11,350.4 100.0% 10,078.7 100.0% (1) Balance Sheet (Assets) caption 40 inclusive of expected losses and leasing.
26 At 31/12/00, the Bank had no major credit The trading securities portfolio (Lit. 4,236.3 bn) lines. The proportion of loans concentrated is covered by various derivatives for Lit. 951.8 amongst the first 50 lending exposures rose by bn. nearly 3% when considered singly (26.5%) and Losses recorded on the securities portfolio when group connections are taken into account amounted to Lit. 78.6 bn, of which Lit. 25.6 bn (31%). relate to debt securities and Lit. 53 bn to equity At the end of the year, Lit. 422 bn in customer securities. This represented an increase in loans was covered by options and swap comparison to 1999 as a result of the contracts. unfavourable conditions on share markets Lending to banks, including provisions for during 2000. These losses are recorded at loan losses, totalled Lit. 1,876.5 bn, an increase caption 60 of the Income Statement ‘Gains and of 53.9% over Lit. 1,219 bn recorded at losses from financial transactions’. Writebacks 31/12/99. Expected country-risk associated on securities totalling Lit. 5.9 bn (1999: Lit. losses dropped to Lit. 13.1 bn. Excluding 14.9 bn) were also recorded. lending related to the branches in Sicily, the The portfolio also presents potential gains and aggregate totals Lit. 1,604.1 bn (+31.6 %). losses relating to investment securities of Lit. This rise stems from a three-fold increase in 80.1 bn and Lit. 34.5 bn, respectively. Capital deposits (Lit. 1,259.7 bn; 57.7%) over 1999, gains from the trading securities portfolio are, and an increase in the lending destined for however, offset by losses on derivatives hedging minimum reserve requirements of 55.5% (Lit. contacts totalling Lit. 76.9 bn. Hedging 115.2 bn). Other financing fell 33.9% to Lit. contracts also generated gains totalling Lit. 18.9 159.6 bn. bn. Similarly to amounts owed to banks, there was At 31/12/00, the notional value of an increase in euro and EU-area currencies, derivatives contracts totalled Lit. 6,740.9 which account for 88.4% of the total. bn, 5% down on 1999. Of this total, Lit. At 31/12/00, swaps cover Lit. 77.5 bn in 1,079.9 refers to contracts with capital interbank deposits. exchange and Lit. 5,661 bn without, for the The interbank result (the difference between most part balanced. interbank borrowing and lending) at 31/12/00 The Bank’s prudent use of derivatives is is Lit. 2,658.6 bn in Banca Carige’s favour. demonstrated by the predominance of the For further details, see sections 1 and 11, part B balanced contracts referred to above (Lit. of the explanatory notes. 3,256.3 bn; 48.3% of the total) and hedging The Bank’s securities portfolio recorded a contracts (Lit. 2,843 bn; 42.2% of the total). modest increase (1%) in 2000 to end the year Contracts which expose the Bank to exchange at Lit. 4,981.1 bn. and interest rate risk have a notional amount In particular, the debt securities portfolio totalling Lit. 641.6 bn, 9.5% of the total. underwent changes in composition: reductions Swap contracts represent 73.3% of the total in government securities (-20.5%; Lit. 2,706.6 used (Lit. 4,943.9 bn; +19.7%), followed by bn) and increases in other bonds of other currency options (Lit. 700.9 bn), 10.4% of the issuers (+59.5%; Lit. 2,001.1 bn). total. FRAs amounted to Lit. 58.1 bn at the end Shares, mutual funds and unit trusts decreased of the year and are considerably down on 1999 by 1.2% over 1999 to Lit. 273.4 bn; their share (-97.7%) as the Bank prefers other derivatives of the total portfolio remained basically instruments. unchanged at 5.5%. Derivatives-related losses of Lit. 7.3 bn and The Bank’s investment portfolio, set up in gains of Lit. 4.7 bn were recorded. Gains of Lit. accordance with Consob’s communication of 65.4 bn and losses of Lit. 135.2 bn were not 15/2/95, the Bank of Italy’s letter of 1/3/95, recorded, the latter of which Lit. 20.2 bn relate and the Board of Directors’ deliberation of to hedging contracts on bonds issued and Lit. 27/3/95 and subsequent modifications dated 76.9 bn on cover for the trading portfolio. 6/12/99, recorded little change over 1999 Derivatives contracts are stipulated exclusively (2000: Lit. 744.8 bn; 1999: Lit. 747 bn) with with major banks or securities firms so making no movement from the trading securities to the provisions for counterparty risk unnecessary. investment securities portfolio or viceversa, or Further details are given in sections 2 and 10, releases. part B and section 3, part C of the explanatory notes.
27 DERIVATIVES CONTRACTS (billions of Italian Lire)
Change % Principal (1) 31/12/00 30/9/00 31/12/99 31/12/98 2000 1999
- Forwards (2) 58.1 89.1 2,480.6 4,265.7 - 97.7 - 41.8 - Swaps (3) 4,943.9 4,872.0 4,130.0 2,820.5 19.7 46.4 - Futures 139.5 366.3 126.0 - 10.7 … - Securities options (4) 85.1 278.9 167.1 - - 49.1 … - Interest-rate options 597.6 24.8 21.4 - … … - Exchange rate options 700.9 1,076.5 172.2 41.3 307.0 316.9 - Credit default product 215.8 217.6 - - … … Total 6,740.9 6,925.2 7,097.3 7,127.5 - 5.0 - 0.4 - with exchange of principal 1,079.9 1,537.2 361.6 41.3 198.6 775.5 - without exchange of principal 5,661.0 5,388.0 6,735.7 7,086.2 - 16.0 - 4.9
- hedging 2,843.0 2,413.5 1,440.8 1,012.4 97.3 42.3 - trading 3,897.9 4,511.7 5,656.5 6,115.1 - 31.1 - 7.5 * balanced contracts (5) 3,256.3 3,472.4 5,142.6 5,360.6 - 36.7 - 4.1 * open-ended contracts (6) 641.6 1,039.3 513.9 754.5 24.8 - 31.9 (1) Principal relative to basis swaps is stated once. (2) Includes forward rate agreements. (3) Includes basis swaps, interest rate swaps, overnight indexed swaps and cross currency swaps. (4) Includes interest rate caps. (5) Contracts matched by contracts of same characteristics so giving the Bank full cover against interest and exchange-rate risk. (6) Contracts entailing exposure to interest and exchange-rate risk.
DERIVATIVES CONTRACTS AT 31/12/2000 ( billions of Italian Lire )
Hedging Trading Total "balanced "open-ended Total Principal (1) contracts" (5) contracts" (6)
- Forwards (2) - 38.7 19.4 58.1 58.1 - Swaps (3) 2,100.1 2,510.1 333.7 2,843.8 4,943.9 - Futures - - 139.5 139.5 139.5 - Securities options (4) 85.1 - - - 85.1 - Index options 538.8 35.6 23.2 58.8 597.6 - Exchange-rate options - 671.9 29.0 700.9 700.9 - Credit default product 119.0 - 96.8 96.8 215.8 Total 2,843.0 3,256.3 641.6 3,897.9 6,740.9 - with exchange of principal 222.1 671.9 185.9 857.8 1,079.9 - without exchange of principal 2,620.9 2,584.4 455.7 3,040.1 5,661.0
(1) Principal relative to basis swaps is stated once. (2) Includes forward rate agreements. (3) Includes basis swaps, interest rate swaps, overnight indexed swaps and cross currency swaps. (4) Includes interest rate caps. (5) Contracts matched by contracts of same characteristics so giving the Bank full cover against interest and exchange-rate risk. (6) Contracts entailing exposure to interest and exchange-rate risk.
28 DERIVATIVES CONTRACTS: WRITEDOWNS AND REVALUATIONS (billions of Italian Lire)
Writedowns Revaluations
1. Trading contracts 2.6 2.9 1.1 Non-quoted trading contracts 2.3 2.9 Forwards - 0.8 Swaps 1.2 2.1 Options 1.0 - Derivatives on credits 0.1 - 1.2 Quoted trading contracts 0.3 - Futures 0.3 - 2. Non-quoted hedging contracts 4.7 1.8 Forwards - - Swaps 4.0 1.0 Options 0.7 0.2 Derivatives on credits - 1 Total 7.3 4.7
As part of the Bank’s continuing efforts to - phase Two: within 31/3/2001, the improve its credit risk levels, Lit. 566.4 bn following steps will have been completed: in the form of bad loans was securitised in assessment and underwriting of credit risk accordance with Law 130/99. The operation present in the pool of loans; guaranteeing was deliberated by the Bank’s Board of Directors credit risk; rating assignment for various meeting of 11th September 2000 and is carried tranches in bond issue; characteristics of out in two phases: each tranche defined; fixing of interest - phase One: in December 2000 a contract payable on bond; IPO of bond; payment of for the ceding of a pre-determined bundle of price. credits at a pre-determined price was signed The credits originated by the Bank are valued as in addition to agreement regarding the follows: servicing contract between the Bank, which originates, cedes and provides collateral for the loans, and the special purpose vehicle; total amount loans to be ceded (inclusive of amounts previously written off) Lit.782,536,464,353 gross amount at December 2000 Lit.566,380,005,126 total revaluations at 31/12/99 Lit.125,794,682,787 net amount at December 2000 Lit.440,585,322,339 price for ceding the loan Lit.320,000,000,000 loss to be amortised in 5 years (pursuant to article 6, Law 130/99) Lit.120,585,322,339 calculated so bringing the net decrease in the The effects of this structured securitised credit reserve to Lit. 57.9 bn. operation on the balance sheet have been Securitisation in this case has reduced gross bad calculated at a loss of Lit. 120.6 bn, the loans by Lit. 566.4 bn (Lit. 440.6 bn net). This difference between the net value of credits at has brought about an improvement in the bad December 2000 (Lit. 440.6 bn) and the price loans/total lending ratio from 4.5% prior to the paid for the ceding (Lit. 320 bn). The loss operation to 1.1% after. benefits from amortisation over five years. Awaiting the securities issue, the corresponding The loss stemming from the operation was amount - Lit. 320 bn - is recorded at caption accounted for in the following way: one fifth (Lit. 40 ‘Loans to customers’ in the form of a credit 24.1 bn) recorded at caption 120 ‘Specific extended to Argo Finance One Srl. allowances for guarantees and commitments’; As a result of this operation total risk four fifths (Lit. 96.5 bn) covered by reserves as aggregates at the end of 2000 amounted to foreseen by the law; in the case in point, the Lit. 679.1 bn, a 43.9% reduction over 1999. share premium fund. With reference to the latter During the year, Lit. 252.4 bn was written off, amount, advanced taxation of Lit. 38.6 bn was Lit. 120.6 bn of which relates to the securitised credit described above.
29 CREDITS AT RISK AND TOTAL ALLOWANCES ( millions of Italian Lire )
31/12/00 30/9/00 Cash Guarantees and Leased Total Cash Guarantees and Leased Total credits commitments assets credits commitments assets
Bad loans 300,610 12,815 - 313,425 759,002 12,919 - 771,921 Watchlists 296,598 2,747 - 299,345 367,310 5,758 - 373,068 Country risk 44,288 2,175 - 46,463 42,122 2,059 - 44,181 Rescheduled loans 15,969 - - 15,969 15,846 - - 15,846 Bad leased assets - - 3,931 3,931 - - 4,012 4,012 Total credits at risk 657,465 17,737 3,931 679,133 1,184,280 20,736 4,012 1,209,028 - Specific allowances 210,586 5,658 907 217,151 343,756 5,578 1,204 217,151
Total allowances 220,586 5,658 907 227,151 348,756 5,578 1,204 355,538 - Specific allowances for loan losses 210,586 - - 210,586 343,756 - - 343,756 - Specific allowances for guarantees - - and commitments - 5,658 - 5,658 - 5,578 - 5,578 - Specific allowances for leased assets - - 907 907 - - 1,204 1,204 - General allowances for loan losses 10,000 - - 10,000 5,000 - - 5,000
31/12/99 31/12/98 Cash Guarantees and Leased Total Cash Guarantees and Leased Total credits commitments assets credits commitments assets
Bad loans 746,272 13,557 - 759,829 763,866 14,967 - 778,833 Watchlists 359,963 3,814 - 363,777 433,637 9,522 - 443,159 Country risk 56,418 3,235 - 59,653 55,129 2,868 - 57,997 Rescheduled loans 22,491 - - 22,491 19,521 - - 19,521 Bad leased assets - - 4,686 4,686 - - 5,562 5,562 Total credits at risk 1,185,144 20,606 4,686 1,210,436 1,272,153 27,357 5,562 1,305,072
Specific allowances 361,715 5,927 934 368,576 352,765 6,921 1,460 361,146
Total allowances 366,715 5,927 934 373,576 358,765 6,921 1,460 367,146 - Specific allowances for loan losses 361,715 - - 361,715 352,765 - - 352,765 - Specific allowances for guarantees - and commitments - 5,927 - 5,927 - 6,921 - 6,921 - Specific allowances for leased assets - - 934 934 - - 1,460 1,460 - General allowances for loan losses 5,000 - - 5,000 6,000 - - 6,000
Cash credits at risk amounted to Lit. 657.5 bn Bad lease assets totalled Lit. 3.9 bn, here too at 31/12/00, a fall of 44.5% in comparison to down on 31/12/99 (-16.1%). Lit. 1,185.1 bn recorded twelve months Related total expected losses fell 41.1% and previously. ended the year at Lit. 217.2 bn. The total Credit commitments were down 13.9% over represents 32% of the risk aggregate. 1999 to Lit. 17.7 bn (1999: Lit. 20.6 bn). Expected losses were calculated according to a Bad lease assets totalled Lit. 3.9 bn, here too specific analysis of bad loans, rescheduled down on 31/12/99 (-16.1%). loans, implicit credits in bad lease positions, and Related total expected losses fell 41.1% and significant watchlist positions. The remaining ended the year at Lit. 217.2 bn. The total watchlists and country risk positions were represents 32% of the risk aggregate. evaluated according to a presumptive analysis. Cash credits at risk amounted to Lit. 657.5 bn During the period, total allowances and write at 31/12/00, a fall of 44.5% in comparison to offs for lending risks, net of related revaluations, Lit. 1,185.1 bn recorded twelve months amounted to Lit. 101 bn. previously. Credit commitments were down 13.9% over 1999 to Lit. 17.7 bn (1999: Lit. 20.6 bn).
30 CASH CREDITS AT RISK ( millions of Italian Lire )
31/12/00 30/9/00 Gross Specific Net book % Gross Specific Net book % value allowances value value allowances value (a) (b) (b/a) (a) (b) (b/a)
Bad loans - customers 300.610 155.325 145.285 51,7 759.002 285.743 473.259 37,6 Watchlists - customers 296.598 38.857 257.741 13,1 367.310 42.459 324.851 11,6 Country risk - customers 1.554 466 1.088 30,0 1.610 483 1.127 30,0 - banks 42.734 13.129 29.605 30,7 40.512 12.442 28.070 30,7 Rescheduled loans - customers 15.969 2.809 13.160 17,6 15.846 2.629 13.217 16,6 Total cash credits at risk 657.465 210.586 446.879 32,0 1.184.280 343.756 840.524 29,0 - customers 614.731 197.457 417.274 32,1 1.143.768 331.314 812.454 29,0 - banks 42.734 13.129 29.605 30,7 40.512 12.442 28.070 30,7 Performing loans 14.124.154 - 14.124.154 - 12.087.815 - 12.087.815 - - customers 12.290.351 - 12.290.351 - 11.085.964 - 11.085.964 - - banks 1.833.803 - 1.833.803 - 1.001.851 - 1.001.851 - Total loans 14.781.619 210.586 14.571.033 1,4 13.272.095 343.756 12.928.339 2,6 - customers 12.905.082 197.457 12.707.625 1,5 12.229.732 331.314 11.898.418 2,7 - banks 1.876.537 13.129 1.863.408 0,7 1.042.363 12.442 1.029.921 1,2
31/12/99 31/12/98 Gross Specific Net book % Gross Specific Net book % value allowances value value allowances value (a) (b) (b/a) (a) (b) (b/a)
Bad loans - customers 746.272 290.411 455.861 38,9 763.866 280.607 483.259 36,7 Watchlists - customers 359.963 43.105 316.858 12,0 433.637 47.930 385.707 11,1 Country risk - customers 1.349 405 944 30,0 1.079 324 755 30,0 - banks 55.069 20.660 34.409 37,5 54.050 19.810 34.240 36,7 Rescheduled loans - customers 22.491 7.134 15.357 31,7 19.521 4.094 15.427 21,0 Total cash credits at risk 1.185.144 361.715 823.429 30,5 1.272.153 352.765 919.388 27,7 - customers 1.130.075 341.055 789.020 30,2 1.218.103 332.955 885.148 27,3 - banks 55.069 20.660 34.409 37,5 54.050 19.810 34.240 36,7 Performing loans 11.384.249 - 11.384.249 - 10.472.663 - 10.472.663 - - customers 10.220.323 - 10.220.323 - 8.860.587 - 8.860.587 - - banks 1.163.926 - 1.163.926 - 1.612.076 - 1.612.076 - Total loans 12.569.393 361.715 12.207.678 2,9 11.744.816 352.765 11.392.051 3,0 - customers 11.350.398 341.055 11.009.343 3,0 10.078.690 332.955 9.745.735 3,3 - banks 1.218.995 20.660 1.198.335 1,7 1.666.126 19.810 1.646.316 1,2
Single risk aggregates at 31/12/00 were as aggregate was reduced by almost 60%. follows: Cash credits are covered in the following – bad loans at the end of the year totalled ways: writedowns for 51.7% and provisions Lit. 313.4 bn, of which Lit. 300.6 bn was in equivalent to 39.1% of the value of credit the form of cash credits and Lit. 12.8 bn in commitments. Overall, the bad loans /gross commitments. The securitisation of Lit. cash credits ratio referring to customers 566.4 bn of bad loans meant that this dropped from 6.6% to 2.3%;
31 – watchlists recorded a 17.7% fall to Lit. of an improvement in the exposure to 299.3 bn, of which Lit. 44.4 bn relates to Russia, which dropped from Lit. 13.8 bn to cash credits (17.4% down over 1999). around Lit. 1 bn. This category has been Related writedowns (13.1% of the total) written down by 30% (credits destined to amount to Lit. 38.9 bn; Russia: 60%) according to the presumptive – country related risk at 31/12/00 analysis referred to above. totalled Lit. 46.5 bn, down 22.1% in – rescheduled loans also fell during 2000 comparison to the previous year. Cash to Lit. 16 bn (-29%). credits fell 21.5% to Lit. 44.3 bn as a result
CREDIT COMMITMENTS ( millions of Italian Lire )
31/12/00 30/9/00 Nominal Specific % Nominal Specific % value allowances value allowances (a) (b) (b/a) (a) (b) (b/a)
Bad loans 12,815 5,006 39.1 12,919 4,960 38.4 Watchlists 2,747 - … 5,758 - … Country risk 2,175 652 30.0 2,059 618 30.0 Total guarantees and commitments at risk 17,737 5,658 31.9 20,736 5,578 26.9 Performing guarantees and commitments 2,134,361 - … 1,923,064 - … Total guarantees and commitments 2,152,098 5,658 0.3 1,943,800 5,578 0.3
31/12/99 31/12/98 Nominal Specific % Nominal Specific % value allowances value allowances (a) (b) (b/a) (a) (b) (b/a)
Bad loans 13,557 4,957 36.6 14,967 6,061 40.5 Watchlists 3,814 - … 9,522 - … Country risk 3,235 970 30.0 2,868 860 30.0 Total guarantees and commitments at risk 20,606 5,927 28.8 27,357 6,921 25.3 Performing guarantees and commitments 1,807,004 - … 1,878,058 - … Total guarantees and commitments 1,827,610 5,927 0.3 1,905,415 6,921 0.4
Overall, the level of risk in the lending portfolio statement), of which Lit. 24.1 bn is related was calculated at Lit. 101 bn (1999: Lit. 103.2 to the securitisation operation referred to bn), of which Lit. 15.5 bn relates to written previously in this report, down late-payment interest. The remaining – Lit. 5 bn utilised from reserves for credit risk amount, Lit. 85.5 bn, was managed as follows: reserves (caption 90 of the balance sheet). – Lit. 80.5 bn in net provisions (caption 120 minus caption 130 of the income
32 ALLOWANCES AND WRITE OFFS AGAINST LENDING RISKS (millions of Italian Lire) 31/12/00 31/12/99 31/12/98 PATRIMONIAL AND ECONOMIC ASSETS Total credits at risk Closing balances 679,133 1,210,436 1,305,072 Year's net change - 531,303 - 94,636 52,154 Write offs 252,420 95,809 114,093 Year's gross change - 278,883 1,173 166,247 Reserves for loan losses - Caption 90 Opening balances 5,000 6,000 - - provisions (+) 10,000 5,000 6,000 - utilizations (-) 5,000 6,000 - - other changes (-) - - - Closing balances 10,000 5,000 6,000 Allowances and write offs Allowances (a) 217,151 368,576 361,146 Write offs 252,420 95,809 114,093 Total allowances and write offs (b) 469,571 464,385 475,239 Allowances and write offs of the year 100,995 103,239 113,945 ((b) - (a) of the previous year) COVERING OF ALLOWANCES AND WRITE OFFS OF THE YEAR Income statement 80,497 57,769 64,509 Caption 100 - Provision for risk and charges (leasing) (+) - - - Caption 120 - Provisions (+) (1) 91,652 74,293 89,311 Caption 130 - Recoveries (-) (2) 11,155 16,524 24,802 Withdrawal from income statement 15,525 39,996 49,496 Irrecoverable interest on overdue loans (+) 15,525 39,996 49,496 Income statement of the previous years 4,973 5,474 - 60 Utilization of general allowances for loan losses - caption 90 (+) 5,000 6,000 - Other changes (-) 27 526 60 Total 100,995 103,239 113,945 (1) Caption 120 for 31/12/00, 31/12/99 and 31/12/98 includes exchange-translation differences, respectively, of Lit.43 million, Lit. 58 million and Lit.31 million stemming from write-downs relative to Nice branch. (2) Caption 130 excludes, respectively, Lit. 6,819 million, Lit. 7,984 million and Lit. 6,109 million related to the ex-Tax Collection Service and to written off credit collection for 31/12/00, 31/12/99 and 31/12/98.
Bad loans are concentrated amongst non- securitisation effected towards the end of the financial and personal businesses (Lit. 236.2 year. bn; 78.6% of the total). Families account for The sector most at risk for the Bank according 15% of the aggregate at risk (Lit. 45.1 bn), to the bad loans/lending ratio is non-financial whilst the other sectors present limited levels of and family businesses (3.1%). The next category risk. The branches of non-financial and family is families with a risk index of 1.9%. Other businesses which are most at risk continue to be sectors do not present significant levels of risk. the building sector, and retail and wholesale The branch of the economy in which credit risk trade/salvage and repairs, both of which is highest for the Bank continues to be the account for Lit.54.6 bn, 18.2% of the total. In building trade and public works (4.4%), followed comparison to 1999, there was a 5% reduction by services to wholesale and retail trade, salvage in the share represented by families and a 1% and repairs (3.4%), and other sales-related increase in the share of manufacturing and services (1.7%). production. This change was principally due to
33 BAD LOANS (1) - DISTRIBUTION BY SECTOR
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Public Administration ------Financial institutions 8,883 3.0% 7,236 1.0% 10,119 1.3% Non-financial and personal businesses 236,218 78.6% 578,275 77.5% 593,847 77.8% Agriculture, farming and fishing 5,938 2.0% 17,859 2.3% 15,917 2.1% Energy products 318 0.1% 2,926 0.4% 617 0.1% Mineral and ferrous metals and non ferrous 534 0.2% 3,446 0.5% 3,899 0.5% Mineral and non metallic products 3,790 1.3% 16,088 2.2% 21,308 2.8% Chemical products 652 0.2% 2,754 0.4% 2,663 0.3% Metal products 14,240 4.7% 13,981 1.9% 19,675 2.6% Agricultural and industrial machinery 30,554 10.2% 35,831 4.7% 55,191 7.2% Office equipment 367 0.1% 1,860 0.2% 1,802 0.2% Electrical supplies 5,898 2.0% 15,339 2.1% 13,855 1.8% Means of transport 2,067 0.7% 14,000 1.9% 15,330 2.0% Food, drink, tobacco 10,854 3.6% 16,394 2.2% 17,500 2.3% Textiles, leather goods, clothing 9,762 3.2% 9,646 1.3% 8,765 1.1% Paper, printing and publishing 1,969 0.7% 4,582 0.6% 6,551 0.9% Rubber and plastic goods 2,856 1.0% 4,405 0.6% 4,632 0.6% Other industrial products 3,997 1.3% 9,627 1.3% 11,424 1.5% Building and public works 54,586 18.2% 151,309 20.3% 134,083 17.6% Wholesale & retail trade, salvage and repairs 54,610 18.2% 151,965 20.4% 155,711 20.4% Hotel and catering services 8,250 2.7% 32,509 4.4% 29,753 3.9% Transport services 4,460 1.5% 9,953 1.3% 8,853 1.2% Air and sea transport-related services 124 0.0% 306 0.0% 503 0.1% Transport-related services 1,769 0.6% 2,074 0.3% 2,792 0.4% Communications-related services 391 0.1% 3,199 0.4% 3,092 0.4% Sales-related services 18,232 6.0% 58,222 7.8% 59,931 7.8% Private social bodies 248 0.1% 173 0.0% 177 0.0% Families 45,114 15.0% 152,349 20.4% 153,044 20.0% Total residents 290,463 96.7% 738,033 98.9% 757,187 99.1% Rest of the world 10,147 3.3% 8,239 1.1% 6,679 0.9% Total 300,610 100.0% 746,272 100.0% 763,866 100.0%
(1) Inclusive of expected losses.
31/12/99 31/12/99 31/12/98
Public Administration - - - Financial institutions 0.9% 1.1% 1.8% Non-financial and personal businesses 3.1% 8.2% 9.2% - including (2): Wholesale & retail trade, salvage and repairs 3.4% 10.1% 11.0% Building and public works 4.4% 12.3% 11.1% Sales-related services 1.7% 6.0% 7.6% Air and sea transport-related services - 0.1% 0.2% Transport-related services 0.5% 9.4% 0.9% Private social bodies 0.6% 0.6% 0.7% Families 1.9% 7.1% 8.3% Total residents 2.3% 6.7% 7.6% Rest of the world 3.6% 2.8% 4.4% Total 2.3% 6.6% 7.6%
(1) Inclusive of expected losses. (2) Principal branches of the economy in terms of overall credit exposure.
34 BAD LOANS (1) - GEOGRAPHIC DISTRIBUTION
31/12/00 31/12/99 31/12/98 billions % billions % billions %
Liguria 167,333 55.7% 596,908 80.0% 639,715 83.7% Piedmont 50,664 16.9% 48,706 6.5% 44,606 5.8% Emilia Romagna 37,494 12.5% 58,269 7.8% 40,263 5.3% Lombardy 23,234 7.7% 25,148 3.4% 26,473 3.5% Sicily 6,859 2.3% - - - - Tuscany 5,514 1.8% 8,926 1.2% 6,084 0.8% Veneto 728 0.2% - - - - Sardinia ------Total Italy 291,826 97.1% 737,957 98.9% 757,141 99.1% Abroad 8,784 2.9% 8,315 1.1% 6,725 0.9% Total 300,610 100.0% 746,272 100.0% 763,866 100.0% (1) Inclusive of expected losses.
The securitisation of some bad loans has also Liguria, Piedmont accounts for 16.9%, Emilia had a significant effect on their geographic Romagna 12.5%, distribution. In particular, Liguria continues to and Lombardy 7.7%. dominate but the figure for 2000 is considerably lower than the previous year’s (2000: 55.7% of total; 1999: 80%). Outside
BAD LOANS / LENDING RATIO (1) - GEOGRAPHIC DISTRIBUTION
31/12/00 31/12/99 31/12/98
Liguria 1.7% 6.8% 7.8% Piedmont 7.8% 7.3% 7.6% Emilia Romagna 4.3% 7.9% 6.4% Lombardy 1.9% 2.7% 5.1% Sicily 6.1% - - Tuscany 9.1% 13.6% 11.9% Veneto 1.2% - - Sardinia - - - Total Italy 2.3% 6.6% 7.6% Abroad 9.0% 8.5% 8.7% Total 2.3% 6.6% 7.6% (1) Inclusive of expected losses.
35 SERVICES, MARKETING AND CUSTOMER PROTECTION
During the year, Banca Carige continued to push The encouraging results obtained during the year in forward its strategic aims of developing activities the life segment (50.5% increase in premiums in from the traditional universal banking model to that comparison to 1999) derived from awareness at of a net bank. The internet banking service ‘Carige the point of sale of increased demand for life on line’ was launched in September and gives products also as a result of changes in the taxation customers access to a full range of current account of life policies, and the success of the unit linked (statements, deposits, payments) and securities ‘Gestilink’ product, which has almost completely trading activities around the clock from any web- replaced other traditional policies to become the access point. product leader in this field (75.2% of total In the last few years the number of customers and premiums). ‘Gestilink’ was launched in October transactions have both continuously increased: in 1999 and since then has generated total premiums December the average number of customers of Lit. 235.8 bn. A further Lit. 120 bn of premiums utilising the Bank’s services totalled 1,101; in the transferred to ‘Gestilink’ from insured savings same month there were 13,254 accounting policies ‘Risparmio Assicurato’ brings total funds transactions corresponding to around Lit. 100 bn; under management to Lit. 355.8 bn. still in December, the number of Accident insurance continues a marginal role albeit management/information transactions totalled recording an increase for the year of 9.6% to bring more than 200,000. At 31/12/00, 11,679 total premiums to Lit. 5.4 bn. contracts between customers and the Bank had The Carige Open Pension Fund, set up in been stipulated. accordance with the provisions of Legislative decree In the field of assets under management 124/93 and successive modifications and (mutual funds, securities and fund management, additions, closed the year with 2,933 fund bancassurance products), the ties between Banca members (1999: 886) and total funds of Lit. 5.6 bn Carige and Eptafund were strengthened in the form (1999: Lit. 0.8 bn). of the distribution of 8 new funds and 3 fund funds. The Bank’s payment systems - ‘Bancomat’ cash The Bank now offers its customers 27 products of cards, POS terminals, credit and debit cards, home the Epta line. In particular, there are three funds and phone banking developed considerably during created exclusively for Banca Carige, for which the the year. Bank is also depositary: Epta Carige Equity, Epta The number of ‘Bancomat’ cash points rose from Carige Bond and Epta Carige Cash. 284 to 314; the number of transactions carried out During the second half of the year the Epta increased from 6.6 million to 7 million (+7%) Multifondo - a fund fund - was distributed. The fund handling Lit. 2,317 bn (+14.9%). The average is designed to meet differing risk appetites and is number of transactions per ATM was around available in three forms. It also offers the possibility 23,000. There were more than 190,000 of investing in other funds or unit trusts. ‘Bancomat’ cards in circulation, almost all of which The offer of funds managed by Intesa Asset belonging to international payments circuits. The Management also increased bringing the total of number was 4.6% up on the previous year and funds and unit trusts sold by the Bank up to 32. each card was used for an average of 35 Within savings under management, withdrawals. bancassurance continued to grow strongly, The POS terminal network grew significantly in confirming the strategic importance of co-operation 2000: from 5,827 to 6,801 (+16.7%) with a with our insurance subsidiaries, Carige Vita Nuova subsequent rise in the number of transactions and Levante Norditalia. The total of premiums (2,008,957; +18.6%), and underlying amounts collected in 2000 was 49.5% up over the previous (Lit. 277.5 bn; +12.3%). There was an year. In order to satisfy increasingly sophisticated encouraging increase in the use of Carige cards on customer needs whilst at the same strengthening POS terminals of other banks, both in terms of fidelity, particular attention was given to life transactions (2,165,348; +35.7%) and amounts assurance business. (Lit. 290.4 bn; +28.8%).
36 BANCASSURANCE (1) (millions of Italian Lire)
Change % 31/12/00 31/12/99 31/12/98 2000 1999
Total 313,757 209,805 152,049 49.5 38.0
Life 308,333 204,858 147,900 50.5 38.5 - Gestilink 235,807 18,751 (2) … … - Risparmio assicurato 66,211 178,357 139,848 -62.9 27.5 - Vita assicurata 3,771 4,758 4,753 -20.7 0.1 - Previdenza attiva 2,021 2,481 2,810 -18.5 -11.7 - Mutuo assicurato 523 511 489 2.3 4.5
Accident 5,424 4,947 4,149 9.6 19.2 - Correntista sicuro 2,100 2,144 2,162 -2.1 -0.8 - Auto assicurata 1,762 1,365 745 29.1 83.2 - Casa assicurata 1,154 995 763 16.0 30.4 - C/c assicurato 408 443 479 -7.9 -7.5
(1) Premiums received (2) Not available to customers The number of credit cards in circulation rose by To help customers come into contact with new 9.7% to 88,921. Cards belonging to the ‘CartaSì’ technology and the internet in particular, a series of circuit increased in number by 9.2% (65,637), and initiatives was launched during the year which the number of motorway toll cards - ‘Viacard’ - was included the installation of internet corners offering up by 10.8% to 23,284. personalised assistance to customers, a free guide The Bank’s marketing activities focused on to surfing the net for Carige Online subscribers, an each segment of the customer portfolio, with interest-free loan of Lit. 3 million for the purchase particular attention given to private customers. of a personal computer, and several co-marketing Customer profiles were prepared on the basis of an agreements with computer companies offering analysis of behaviour and product segments in particularly attractive savings for Carige customers. order to assign the right products to the right Support for the branch network took the form of customers. marketing initiatives tailored for specific customer This includes the re-styling of the current account and market segments. Particular attention was destined to young customers, linked to the offer of given to customers outside the Bank’s traditional zero interest financing for the purchase of personal operating area in the form of direct marketing both computers. The product also includes competition for existing and potential customers. with prizes. The opening of new branches was complemented A series of marketing campaigns under the by research in order to understand the local market ‘CarigePiù’ brand were launched targeting and identify and satisfy the needs of potential customers outside Liguria. The aim here is, through customers. the cross selling of various products, to satisfy In order to extend and co-ordinate the activities of existing customers and attract new income sources. our bank subsidiaries, integration of product, In order to widen the distribution of Carige’s business policy and pricing was carried out along services and products, the Bank signed co- with the strengthening and extension of alternative operation agreements with 315 estate agents in channels of distribution. order to provide their clients with a full and The Bank never loses sight of the crucial role professionally qualified service which encourages customer satisfaction plays for its success and we the use of Carige mortgage and finance solutions are always striving to improve dialogue and speed for the purchase of a house. up response times to problem areas. Incentives for using the Carige ‘pagobancomat’ Carige’s foreign business (correspondent card in purchases continued to receive banking, etc.) grew significantly in 2000 with a considerable support from customers during the 33.6% increase in activity and a 37.4% rise in year. payment orders also as a result of the closer working ties with our strategic partner, WestLB.
37 There was a fall both in the number and volume of The headline events during the year include financing granted against pledged goods. Carige’s presence in publishing with the two The total number ended the year at 30,767 in volumes dedicated to art in Liguria, ‘Painting and comparison with 34,887 at 31/12/99; total funds Decoration in Genoa and Liguria in the 18th distributed amounted to Lit. 19.9 bn against Lit. Century’ and ‘Liguria, a world in a region’. These 21.9 bn at the end of 1999 (-13.9%). These superior quality publications complement the negative variations regard the principal item Bank’s well-established quarterly magazine, ‘La pledged, jewellery. Casana’, which included a special edition Treasury services managed by the Bank totalled dedicated to Archbishop Tommaso Reggio in the 591 in December 2000. Total funds handled year of his beatification. slipped 8% to Lit. 21,617 bn, average exposures The well-established literary prize for women writers rose 31.8% to Lit. 58 bn, and average cash ‘Rapallo-Carige’ obtained widespread attention in resources were up 24.6% to Lit. 263 bn. its 16th edition. The number of customer contracts amounted to The list of other cultural events promoted by Carige around 510,000, of which 87% (443,000 include the theatre, exhibitions, music and local contracts) relates to deposits (current accounts, culture in general. savings and deposit accounts, certificates of To promote and consolidate the reputation of the deposit) and 13% to lending (67,000 contracts). Bank outside Liguria various activities were The Bank continues its commitment to the organised often in parallel with the opening of new protection of customer-related information branches. Banca Carige’s increased presence in as foreseen by current legislation, in particular Law Sardinia was marked by a special edition of “La 675/96 (‘Privacy Law’). Casana” dedicated to the island, its economic, During 2000, the Bank modified its accounting social and cultural life. practices for the calculation of lending and Other activities included the collaboration of borrowing interest in the light of the deliberation of various trade associations and the sponsoring of the Inter-ministerial Committee for Credit and sporting events aimed at young people. Savings of 22nd April 2000. The Committee The promotion of Banca Carige’s products and decision requires banks to apply the same period of services included innovative marketing campaigns interest capitalisation for both lending and and competitions. borrowing interest. Subsequently, Banca Carige The Bank’s commitment to research in economics adopted quarterly capitalisation for all categories of and finance continued with several conferences current accounts from the third quarter onwards. organised by the Finance Area and Research and Planning office. Well-established specialist publications in collaboration with the University of Genoa include ‘Economia e Diritto del Terziario’ PUBLIC RELATIONS AND THE and ‘Prospettive dell’Economia’. PROMOTION OF CULTURAL, SCIENTIFIC The Carige website was regularly updated during AND SOCIAL ACTIVITIES the year and offers visitors interactive opportunities to find out more about all aspects of the Bank: its Throughout the year, the Bank increased its history, its ambitions, strategy, services and commitment to activities which bring a wide range products. of benefits to the communities in which it operates, Communication is essential also inside the activities which at the same time help to extend and organisation and the twice-monthly staff newspaper consolidate its reputation. ‘Carige Notizie’ was upgraded both in terms of The promotion of the arts in the widest sense has content and design. Press releases concerning the always been of special importance to Banca Carige Bank are now also available electronically. both as a regional bank with historically strong ties to its operating area, and in its presence in new markets.
38 RESOURCE MANAGEMENT branches after the opening of 10 and the closure of 2. The number of fully automated ‘Bancacontinua’ outlets remained unchanged at 13. The Bank also The Banca Carige branch network is made up by has a branch in Nice, in the south of France, and 8 283 branches, of which 202 (71.4%) in Liguria, 19 representative offices abroad. in Piedmont, 16 in Emilia, 15 in Lombardy, 5 in The number of ATM -‘Bancomat’ service tills Sardinia, 2 in Tuscany, 2 in Veneto, and 21 in increased by 30, bringing the total at the end of the Sicily. The presence in Sicily is the result of the year to 314; POS terminals recorded strong levels acquisition in December 2000 of a part of Banco of growth from 5,827 at the end of 1999 to 6,801. di Sicilia’s retail network on the island. Consequently, the network increased by 29 outlets in 2000. Excluding Sicily, the network size rose by 8 BRANCH NETWORK 31/12/00 30/9/00 31/12/99 31/12/98 A) BRANCHES number Q% number Q% number Q% number Q% NORTH-WEST ITALY 236 83,4 234 90,7 232 91,3 227 93,0 Liguria 202 71,4 201 77,9 201 79,1 202 82,8 - Genoa 134 47,3 133 51,6 132 52,0 133 54,5 - Imperia 27 9,5 27 10,5 28 11,0 28 11,5 - La Spezia 19 6,7 19 7,4 19 7,5 19 7,8 - Savona 22 7,8 22 8,5 22 8,7 22 9,0 Piedmont 19 6,7 19 7,4 18 7,1 17 7,0 Lombardy 15 5,3 14 5,4 13 5,1 8 3,3 NORTH-EAST ITALY 18 6,4 18 7,0 17 6,7 14 5,7 Veneto 2 0,7 2 0,8 2 0,8 1 0,4 Emilia Romagna 16 5,7 16 6,2 15 5,9 13 5,3 CENTRAL ITALY 2 0,7 2 0,8 2 0,8 2 0,8 Tuscany 2 0,7 2 0,8 2 0,8 2 0,8 SOUTH ITALY AND ISLANDS 26 9,1 3 1,2 2 0,8 0 0,0 Sicily 21 7,4 0 0,0 0 0,0 0 0,0 Sardinia 5 1,8 3 1,2 2 0,8 0 0,0 BRANCHES ABROAD: Nice (France) 1 0,4 1 0,4 1 0,4 1 0,4 TOTAL 283 100,0 258 100,0 254 100,0 244 100,0
B) OTHER CHANNELS 31/12/00 30/9/00 31/12/99 31/12/98 ATM - Bancomat 314 302 284 272 Bancacontinua (self service) 13 13 13 13 POS 6.801 6.370 5.827 4.739 Home banking (contracts) 6.170 5.317 5.317 3.055 Phone banking (clients) 11.569 11.387 10.758 10.284 E-banking 11.679 - - -
The development of electronic channels for the and subsequent differentiation of customer targets. carrying out of high frequency and low added value From the organisational perspective, the model transactions is part of the Bank’s commitment of a stimulates co-operation and not competition multi-channel distribution system. One such between channels with the Bank keeping possession channel is in the form of personal financial advisers of the customer relationship by way of clear assigned to high net worth customers. During the leadership and an integrated information system. year the segmentation of corporate clients began The aim is to highlight the centrality of the customer and here too specialised advisers will follow the whilst co-ordinating and reconciling, at the same requirements of large and medium-sized time, the different economic interests of all channels businesses. involved. E-banking continued its advances with the launch Through multi-channel distribution, synergies are of Carige On Line. obtained and more detailed knowledge concerning The balance between innovative and traditional the customer is gathered, which can be used within channels of supply depends on the identification the framework of advanced customer relationship
39 management, so creating fidelity and satisfying The majority of cash movement transactions relate needs. to on line trading (accounting for more than 90% With these points in mind, the substitution of of transactions throughout the period), which channels aims at the transferring of low added increased the number of transactions from 1,436 in value transactions, whilst the complementary July to 13,525 in January 2001 (Lit. 128 bn). potential of multi-channel distribution seeks to At 31/12/00, the number of Banca Carige expand cross selling opportunities. employees totalled 3,080, down on 1999’s total Integration between channels means that the of 3,092. In detail, the total is made up by 21 relationship between channels needs to be senior executives, 241 managers, and 2,818 managed, particularly in the field of pricing where clerical and ancillary staff. Women account for a review of pricing policy is essential. 1,435 of the total. Remote channels open up considerable This total does not include 84 employees of the opportunities to access an increasing number of branches in Sicily, who became to all effects Banca new customers. To take advantage of this, existing Carige employees on 1/1/01. trading on line channels will be supported by SMS During the year, 87 new members of staff were and WAP access technologies. taken on whilst at the same time incentives The Bank foresees changes in its remote banking continued for those members of staff eligible for channels: phone banking, home banking and retirement. Vacancies in new operating areas were corporate banking. The first is destined to be filled both in terms of younger staff and personnel replaced by a call centre platform offering greater with branch management experience. operational possibilities; home banking will At the end of the year, 67.5% of staff was allocated continue within the confines of the internet; to market activities, the average age was around corporate banking will gradually be replaced in the 42 with 17 years of service. light of its distinct nature which is not fully Training focused on providing staff with compatible with web banking (data entry and off professional knowledge especially in the field of line trading). information technology, with the launch during the Banca Carige’s e-banking activities grew during the year of new procedures relating to customer year both in terms of customers and transactions records and mutual funds. (cash movements and information). Courses were also organised for Bank employees Since its launch in July, the number of Carige On and agents of the insurance subsidiaries in order to Line customers has continually increased moving prepare them to qualify for the financial advisers from a daily average of 163 transactions to 1,358 certificate as well as widening their knowledge of in January 2001. the Bank’s services and products. The number of transactions has also risen both in The Bank’s employees received 19,002 days of number and underlying amounts. Monthly training distributed amongst 10,984 participants. information transactions moved from 22,894 in The Bank wishes to express its condolences to the July to 349,663 in January; cash movements rose families and friends of those members of staff in in number in the same period from 1,782 to service or in retirement who passed away during the 18,257, with an underlying amount of Lit. 136 bn year. being handled in January.
40 PERSONNEL
31/12/2000(1) 30/09/00 31/12/99 31/12/98 N. % N. % N. % N. %
Grade Managers 21 0.7 21.0 0.7 26 0.8 26 0.9 Officials 241 7.8 240.0 7.8 235 7.6 255 8.3 Other employees 2,818 91.5 2,824.0 91.5 2,831 91.6 2,769 90.8 TOTAL 3,080 100.0 3,085 100.0 3,092 100.0 3,050 100.0 Activities Head-offices 1,001 32.5 1,014.0 32.9 1,002 32.4 1,087 35.6 Branches 2,079 67.5 2,071.0 67.1 2,090 67.6 1,963 64.4
THE YEAR 2000 AND THE EURO INVESTMENTS
The introduction on 1/1/99 of the single European Tangible assets at 31/12/00 totalled Lit. currency, albeit as a virtual currency until the 1,014.3 bn, an increase of 12.5% in comparison elimination of single members’ currencies in 2002 to Lit. 901.5 bn recorded at the end of 1999. This was a watershed in European banking. Thanks to total is net of depreciation amounting to Lit. 516.8 the nature of banking activity and the direct bn and includes revaluations carried out in involvement with other financial operators and accordance with Laws 576/75, 72/83, 218/90 customers, retail, private and corporate, banks are and 413/91, which refer exclusively to property and critically affected by the euro. total Lit. 367 bn. Remaining sums include advances In preparation for the new currency, Carige’s ITC for investments in progress of Lit. 73.8 bn, of which systems were fully reviewed and modified over a Lit. 0.5 bn refers to premises, Lit. 1.4 bn to furniture period of several years. and fittings, and Lit. 71.9 bn to leased assets. This meant that the changeover to the year 2000 The rise in this aggregate is due exclusively to was substantially problem free, with the increased leasing activity, which were up from Lit. considerable cost savings this achieved. 425.8 bn in 1999 to Lit. 541.6 bn (+27.2 %) as a The introduction of the euro has been addressed by result of purchases totalling Lit. 224.4 bn, releases the Bank by means of a two-phase action plan. of Lit. 32 bn, and amortisation for Lit. 76.6 bn. Phase one (1/1/99 - 31/12/01) handles the Other forms of tangible assets all recorded falls transition period leading up to the launch of the during the year: premises dropped from Lit. 443.2 new currency by means of a review of the Bank’s bn to Lit. 439.3 bn (-0.9%) as a result of sales information technology system and replacement of totalling Lit. 2.8 bn (1999: Lit. 3.7 bn), and software where necessary. The second phase will amortisation of Lit. 8 bn (the same amount in the handle the introduction of the euro as legal tender previous year). Furniture and fittings increased from when it replaces in practical terms local currencies Lit. 32.5 bn to Lit. 33.4 bn, due to purchases of on 1st January 2002. Lit. 11.9 bn (1999: Lit. 10.1 bn) and sales of Lit. The investments made to complete the transition 561 million. were estimated in the order of Lit. 21.5 bn for the Further details are given in section 4.1, part B of period 1998-2002, of which Lit. 11.3 bn was spent the explanatory notes. in 1998 and Lit. 4 bn in 1999. During 2000, Intangible assets recorded a strong increase further investments of Lit. 0.5 bn were made for over 1999 to move from Lit. 57.1 bn to Lit. 165.1 software; staff-related costs amounted to Lit. 0.5 bn. This total is after depreciation charges of Lit. bn.The transition to 2000 was achieved without 109.9 bn. Goodwill is the dominant item (Lit. procedural problems or damage to data-banks. 123.2 bn) and rose by almost Lit. 110 bn as a During the year, Lit. 0.8 bn in costs was recorded. result of the acquisition of 21 branches from the
41 Banco di Sicilia. Installation charges dropped - Centro Fiduciario SpA is a trust company; 32.2% from Lit. 13 bn to 8.8 bn whilst software - Galeazzo Srl, Columbus Carige Immobiliare expenditure increased from Lit. 15.8 bn to Lit. 20.5 SpA and Ettore Vernazza SpA offer property- bn. Remaining items fell from Lit. 14.8 bn to Lit. related services. 12.6 bn (-14.7%) as a result of purchases (Lit. 5.7 Ligure Leasing SpA, a finance company, and Carisa bn) and amortisation (Lit. 7.8 bn). Immobiliare Srl, operating in real estate, are Further details are given in section 4.2, part B of members of the Banca Carige Group but are not the explanatory notes. included under Group holdings as they are The total of the Bank’s equity investments controlled by the subsidiary, Cassa di Risparmio di amounted to Lit. 1,191 bn (excluding investment Savona SpA. securities), a rise of 12.4% in comparison to 1999. Rationalisation of the Group’s insurance activities Significant holdings reached Lit. 1,129.1 bn (1999: continued during the year with the aim of Lit. 1,002 bn) whilst other holdings rose from Lit. increasing synergies between Banca Carige and its 57.2 bn to Lit. 61.9 bn. These amounts include insurance subsidiaries. The acquisition of a further tax-deferred revaluations (Law 218/90) of Lit. 10.6 40% by the Bank in Carige Vita Nuova SpA brings bn, of which Lit. 7.3 bn refers to significant the total holding to 92.8%. The purchase, carried holdings, and net of tax-deferred capital losses out at a price in line with current market value, (Law 218/90) of Lit. 1.3 bn, referring entirely to allows for the development of the Group’s strategic significant holdings. objectives in the field of bancassurance. Increases for the year, totalling Lit. 131.7 bn, refer The value of holdings within the Group include tax- almost exclusively to the acquisition of a further deferred capital gains (Law 218/90) of Lit. 6.3 bn. 40% holding in Carige Vita Nuova SpA for an The book value of holdings outside the Group investment of Lit. 117 bn. Subscription to the share dropped from Lit. 531.5 bn in 1999 to Lit. 104.6 capital increase of the subsidiary Columbus Carige bn (-80.3%), mainly as a result of the incorporation Immobiliare SpA amounted to an outlay of Lit. 10 of Cassa di Risparmio di Savona SpA into the bn. Banca Carige Group. Incorporation became Sales for the period totalled Lit. 17.8 bn and refer effective on receiving Consob approval during the to holdings outside the Group. The principal year. release was in the Bank’s holding in ICCRI Banca In line with Consob recommendation no. Federale Europea SpA (Lit. 8.9 bn) and 97001574 of 20/2/97, all intra-subsidiary and Finmeccanica SpA (Lit. 7.9 bn). associated company relations are regulated by Writedowns recorded for 2000 amounted to Lit. market conditions. 1.7 bn and refer almost completely to IMMOCRI In particular, credit and debit positions with those SpA. Recoveries were not recorded. companies in which Banca Carige has a holding Equity investments within the Group totalled Lit. 533.3 bn and Lit. 995.4 bn, increased from Lit. 527.7 bn to Lit. 1,086.3 bn. respectively. Guarantees and commitments The following companies belong to the Banca amounted to Lit. 427 bn. Carige Group: Details of Banca Carige’s holdings in subsidiaries - Levante Norditalia Assicurazioni e and associated companies are given in the table Riassicurazioni SpA and Carige Vita Nuova SpA below. Further information regarding the are insurance companies; composition of these holdings and changes made - Banca del Monte di Lucca SpA and Cassa di during the year can be found in section 3, part B of Risparmio di Savona SpA are banks, the latter the explanatory notes. was officially incorporated during the year;
42 EQUITY INVESTMENTS (millions of Italian Lire)
31/12/00 Assets Liabilities Guarantees & Revenue Expenses Commitments SUBSIDIARIES 87,227 493,600 11,060 14,432 18,632 Galeazzo Srl - 5,693 - 14 189 Columbus Carige Immobiliare SpA 24,719 - - 1,579 2,391 Immobiliare Ettore Vernazza SpA - 2,691 - 1,225 51 Centro Fiduciario SpA 596 1,571 - 648 765 Banca del Monte di Lucca SpA 47,885 1,131 3,000 2,154 1,091 Carige Vita Nuova SpA - 38,656 - 2,423 361 Levante Norditalia Assicurazioni SpA - 150,417 8,060 1,983 997 Cassa di Risparmio di Savona SpA 14,027 293,441 - 4,406 12,787 SIGNIFICANT HOLDINGS 145,311 283 7,448 12,139 35 Frankfurter Bankgesellschaft AG 145,311 282 7,448 6,307 35 Eptaconsors SpA - 1 - 5,832 - TOTAL 232,538 493,883 18,508 26,571 18,667
SHARE OWNERSHIP STRUCTURE AND CARIGE SHARES THE RELATION WITH THE CASSA DI RISPARMIO DI GENOVA E IMPERIA FOUNDATION The Italian share market was marked by significant volatility during the year. After a good start in the The Bank’s wholly paid-up share capital at first quarter, the automated MIBtel index dropped 31/12/00 was Lit. 1,970.2 bn composed by during the course of the year . However, it ended 197,017,340 shares with a nominal value of Lit. the year 4.65% up over the end of the previous 10,000 each. There were no changes in share year at 30,323 points. capital during the year. Carige’s share price, in its sixth year of listing on The share ownership structure was also unchanged the official Milan share market, started the year during 2000: the Foundation’s holding stayed at well moving from its lowest point in January at Lit. 58.7%. Other significant holdings include: CNCEP 16,485 (6/1/00) to its highest level several weeks (Caisse Nationale des Caisses d’Epargne et de later (24/1/00) of Lit. 19,746 . For most of the Prévoyance) at 5.7%; La Basilese insurance group year it remained stable between Lit. 18,000 and Lit. at 5.1%; WestLB at 5%; CDC (Caisse des Dépôts et 19,000, slipping to Lit. 17,719 on the last trading Consignations) at 3.8%; Caja de Ahorros de Sevilla day of the year. The official average price for the y Huelva at 1.5%. year was Lit. 18,312. Borrowing activities with the Foundation totalled Lit. The share’s rise in value for the year was 4.7%, in 101.5 bn with related interest expenses of Lit. 5.2 line with shares overall (Milan index averaging at bn. Revenues from the Foundation amounted to Lit. 4.6%) and the previous year’s performance (1999: 1.7 bn and refer principally to Carige staff +4.6%). transferred to the Foundation and service charges The number of shares bought and sold by the Bank relating to administrative, accounting and tax duties was, respectively, 2,044,750 (for a nominal value performed during the year. of Lit. 20.4 bn) and 731,500 (for a nominal value Further details are given at section 8, part B of the of Lit. 7.3 bn). The total number of shares bought explanatory notes. and sold was equivalent to 1.4% of the Bank’s share capital.
43 At the end of the year, Banca Carige held Further details are given at section 8, part B of the 1,915,750 of its own shares at a value of Lit. 34.1 explanatory notes. bn (1999: 602,500 shares for Lit. 9.8 bn). CARIGE SHARE PERFORMANCE OVER TWELVE MONTHS
Change %
31/12/00 30/9/00 30/6/00 30/12/99 year 1st half 2nd half
CARIGE 17,719 18,120 18,356 16,921 4.72 8.48 -3.47 Milan general share index 30,323 31,323 31,704 28,976 4.65 9.41 -4.36 Milan banking index 3,444 3,560 3,328 3,024 13.89 10.05 3.49
The table below provides information as required members, statutory auditors, general managers) or by Consob (article 79, ruling 11971 of 14/5/99 their relatives (spouses and/or children under the enacting Legislative decree 58/98) concerning the age of 18) or held indirectly through fiduciaries or shareholdings in a company and/or its subsidiaries intermediaries. on the part of the company’s officers (board
SHAREHOLDINGS OF BOARD MEMBERS, STATUTORY AUDITORS AND GENERAL MANAGER (1)
Name and Surname Company Number of Number of Number of Number of represented shares in shares shares sold shares in possession bought possession 31/12/99 31/12/00
Fausto CUOCOLO Banca Carige S.p.A. 16,500 _ _ 16,500 Adalberto ALBERICI Banca Carige S.p.A. 4,000 _ 4,000 _ Piero Guido ALPA Banca Carige S.p.A. 1,000 _ _ 1,000 Giovanni BERNESCHI Banca Carige S.p.A. 18,000 _ _ 18,000 Giorgio BUGLIONI Banca Carige S.p.A. 500 _ _ 500 Angelo COSTIGLIOLO Banca Carige S.p.A. _ _ _ _ Paola SCHIAVINA in COSTIGLIOLO Banca Carige S.p.A. 9,500 1,000 _ 10,500 Giovanni MERELLA Banca Carige S.p.A. 7,500 _ _ 7,500 Romeo PANIZZI Banca Carige S.p.A. 5,000 _ _ 5,000 Fulvio ROSINA Banca Carige S.p.A. _ _ _ _ Maria Franca GUALCO in ROSINA (*) Banca Carige S.p.A. 24,500 19,750 _ 44,250 Giorgio SAVINELLI Banca Carige S.p.A. 1,000 _ _ 1,000 Ida KIEREK in SAVINELLI Banca Carige S.p.A. 1,000 _ _ 1,000 (1) Share ownership is direct, unless otherwise stated. (*) Indirect ownership.
44 77
INCOME STATEMENT, NET INCOME, CAPITAL & RESERVES
Net profit for the year amounted to Lit. 190.2 from financial transactions, which felt the effects bn, a rise of 4.7% in comparison to Lit. 181.6 of increased losses recorded in the securities bn for 1999. portfolio. A key feature of the year was the rise in net Commission income reached Lit. 279.3 bn, an interest income to levels even greater than those increase of 6% over 1999 (Lit. 263.5 bn). In recorded in 1998: 2000: Lit. 564.4 bn; 1998: particular, revenues from the placement of Lit. 540.3 bn. securities (Lit. 84,7 bn) were down 1.5% as a Non-interest income slipped as a result of losses result of the slow down in savings under on securities for Lit. 79 bn. Other features for management already under way in the second the year include: continued containment of half of 1999. This fall meant reduced fees and administrative costs, increased leasing-related commissions from mutual funds (entry fees, amortisation stemming from expansion in management and handling charges, depositary leasing activities, increased provisions for loan commissions) of Lit. 87 bn (1999: - Lit. 700 losses connected to the effects on amortisation million). Asset management commission deriving from the structured securitised credit dropped over the year by 8.7% to Lit. 14.2 bn. operation and reduced tax liabilities stemming Commission income related to savings from the introduction of dual income tax. management amounted to Lit. 107.2 bn, down Extraordinary income was nearly half 1999’s 1.2%. There was a 47.5% increase in the result: Lit. 16.7 bn (1999: Lit. 34 bn). number of orders for purchase as a result of The 16% increase in net interest income to increased stock market trading activity on behalf Lit. 564.4 bn from Lit. 486.7 bn at 31/12/99 of customers. represents an inversion in the trend which over Insurance-related services recorded a 24.4% recent years had seen service-generated increase in 2000 (Lit. 6.4 bn) and there was income’s overtaking interest income as the also a rise in commissions on guarantees (Lit. Bank’s main source of revenue. This return of 9.2 bn; +7.8%). traditional revenue sources was due not only to Commission expenses were up 32.7% to Lit. rising interest rates but also due to increases in 21.5 bn (1999: Lit. 16.2 bn), of which Lit. 11.9 both total amounts handled and lending to bn relate to collection and payment services. customers. Gains from financial transactions fell 68.8% In greater detail, lending interest income rose from Lit. 80.8 bn to Lit. 25.2 bn. The aggregate 21.9% to Lit. 1,046.9 bn (1999: Lit. 858.6 bn), particularly felt the effects of losses on securities of which income from customer lending rose of Lit. 78.6 bn; most of these were in the from Lit. 606.2 bn to Lit. 762.9 bn (+25.8%) equities portfolio which, despite accounting for and interest on securities increased from Lit. Lit. 273.4 bn out of a total of Lit. 4,981.1 bn, 206.6 bn to Lit. 231.9 bn (+14.5%). suffered the volatility of share markets Interest expenses - Lit. 482.5 bn - increased by throughout the year, which was particularly 29.8% in comparison to 1999 (1999: Lit. intense from October onwards. 371.9 bn), of which interest payable on Excluding these losses, the aggregate total at customers deposits rose by 24.7% from Lit. 31/12/00 was Lit. 103.8 bn (-19.7%). 77.6 bn to Lit. 96.7 bn. Interest payable on Dividends, thanks to the Bank’s equity bonded loans increased, from Lit. 167.3 bn to investment policy over recent years, helped to Lit. 213 bn (+27.3%). Interbank interest boost service - generated income by Lit. 57.6 bn expenses also recorded a rise during 2000 to (1999: +9.3%). move from Lit. 106.8 bn at 31/12/99 to Lit. New accounting criteria for the handling of 165.4 bn (+54.9%). dividends on equity investments were introduced Non-interest income amounted to Lit. during the year. In particular, dividends of 497.9 bn, a drop of 3.2% over 1999’s Lit. subsidiaries were recorded for the first time, in 514.2 bn. This result stems from, on one hand, the period in which the subsidiaries ‘ profit growth in commission income, dividends and matured, in line with accounting principles other revenues and, on the other, falls in profits adopted by the National Council of Italian
45 Chartered Accountants and CONSOB instructions. INCOME STATEMENT (millions of Italian Lire)
31/12/00 31/12/99 31/12/98 Change % 2000 1999
10 Interest income and similar revenues 1,046,941 858,555 1,131,139 21.9 -24.1 20 Interest expense and similar charges -482,527 -371,873 -590,803 29.8 -37.1 NET INTEREST INCOME 564,414 486,682 540,336 16.0 -9.9 40 Commission income 279,306 263,514 223,689 6.0 17.8 50 Commission expenses -21,504 -16,211 -18,318 32.7 -11.5 60 Gains (losses) from financial transactions 25,229 80,788 93,088 -68.8 -13.2 30 Dividends and other revenues 57,617 52,702 10,262 9.3 413.6 70 Other operating income 169,192 144,722 129,636 16.9 11.6 110 Other operating expenses -11,976 -11,330 -7,602 5.7 49.0 NON INTEREST INCOME 497,864 514,185 430,755 -3.2 19.4 GROSS OPERATING INCOME 1,062,278 1,000,867 971,091 6.1 3.1 80 Administrative costs -524,027 -526,484 -524,845 -0.5 0.3 – Personnel -334,173 -340,692 -343,836 -1.9 -0.9 – Other administrative costs -189,854 -185,792 -181,009 2.2 2.6 90 Depreciation and amortization of intangible and tangible fixed assets -121,537 -114,068 -99,758 6.5 14.3 OPERATING COSTS -645,564 -640,552 -624,603 0.8 2.6 OPERATING INCOME 416,714 360,315 346,488 15.7 4.0 100 Provisions for risks and charges -5,062 -2,751 -1,400 84.0 96.5 120 Provisions for loan losses and for guarantees and commitments -91,609 -74,235 -89,280 23.4 -16.9 130 Recoveries of loans and reversals of provisions for guarantees and commitments 17,974 24,508 30,911 -26.7 -20.7 140 Additional provisions for loan losses -10,000 -5,000 -6,000 100 … 150 Write-downs to financial fixed assets -1,708 -2,842 -1,328 -39.9 114.0 160 Recoveries of financial fixed assets - 1,953 - … … PROVISIONS AND WRITE-DOWNS -90,405 -58,367 -67,097 54.9 -13.0 170 INCOME FROM ORDINARY ACTIVITIES 326,309 301,948 279,391 8.1 8.1 180 Extraordinary income 24,866 44,109 15,987 -43.6 175.9 190 Extraordinary expenses -8,154 -10,112 -4,271 -19.4 136.8 200 EXTRAORDINARY INCOME, NET 16,712 33,997 11,716 -50.8 190.2 INCOME BEFORE TAXATION 343,021 335,945 291,107 2.1 15.4 215 Provisions for merger reserve - - -6,424 … -100.0 220 Income taxes -152,800 -154,300 -137,700 -1.0 12.1 230 NET INCOME 190,221 181,645 146,983 4.7 23.6
With the application of this principle, Lit. 33.6 12.1 bn, recorded at income statement caption bn was recorded at ‘dividends and other 220 ‘income taxes’. revenues’ accrued during the accounting period Other operating income rose 16.9% to Lit. 2000, inclusive of tax credits on the part of the 169.2 bn (1999: lit. 144.7 bn) as a result of subsidiaries; Lit. 8.8 bn in dividends accrued increased revenues generated by leasing which during the business year 1999 and received rose 20.7% (Lit. 20.1 bn) from Lit 97 bn to Lit. during 2000 inclusive also here of tax credits 117.1 bn. Depreciation and amortisation and referring to the subsidiaries was recorded related to leasing are entered at caption 90 under extraordinary income. ‘Depreciation and amortisation of intangible The recording of dividends on equity investments and tangible fixed assets’ under the item ‘Leased in the Group subsidiaries accrued during 2000 assets’. generated increased deferred taxation for Lit.
46 INCOME STATEMENT (millions of Italian Lire)
2000 1999
4th quarter 3rd quarter 2nd quarter 1st quarter 4th quarter 3rd quarter 2nd quarter 1st quarter
10 Interest income and similar revenues 310,289 270,348 234,357 231,947 212,849 198,914 212,536 234,256 20 Interest expense and similar charges -143,331 -129,785 -113,838 -95,573 -90,243 -81,201 -92,562 -107,867 NET INTEREST INCOME 166,958 140,563 120,519 136,374 122,606 117,713 119,974 126,389 40 Commission income 73,657 68,684 64,121 72,844 69,833 68,205 68,027 57,449 50 Commission expenses -6,751 -5,685 -4,416 -4,652 -5,268 -3,981 -5,095 -1,867 60 Gains (losses) -20264 from financial transactions -20,264 1,548 3,408 40,537 28,832 7,974 21,442 22,540 30 Dividends and other revenues 27,284 3,594 26,256 483 36,452 3,453 12,611 186 70 Other operating income 52,564 40,078 39,810 36,741 38,870 36,515 35,944 33,393 110 Other operating expenses -4,829 -4,254 -1,315 -1,578 -3,534 -3,353 -1,897 -2,546 NON INTEREST INCOME 121,660 103,965 127,864 144,375 165,185 108,813 131,032 109,155 GROSS OPERATING INCOME 288,619 244,528 248,383 280,749 287,791 226,526 251,006 235,544 80 Administrative costs -144,152 -126,572 -122,144 -131,159 -143,609 -123,053 -139,562 -120,260 – Personnel -84,843 -82,305 -83,854 -83,171 -84,225 -85,317 -86,324 -84,826 – Other administrative costs -59,309 -44,267 -38,290 -47,988 -59,384 -37,736 -53,238 -35,434 90 Depreciation and amortization of intangible and tangible fixed assets -30,230 -30,253 -30,913 -30,141 -30,517 -28,661 -27,634 -27,256 OPERATING COSTS -174,382 -156,825 -153,057 -161,300 -174,126 -151,714 -167,196 -147,516 OPERATING INCOME 114,236 87,703 95,326 119,449 113,665 74,812 83,810 88,028 100 Provisions for risks -3,908 and charges -33,967 -2 -584 -568 -1,655 -152 -719 -225 120 Provisions for loan losses and for guarantees and commitments -33,967 -15,556 -21,345 -20,741 -13,506 -19,781 -20,385 -20,563 130 Recoveries of loans and reversals of provisions for guarantees and commitments 3,557 6,428 3,401 4,588 7,403 4,249 8,310 4,546 140 Additional provisions for loan losses -10,000 - - - -5,000 - - - 150 Write-downs to financial fixed assets -1,673 - -35 - -2,307 - -535 - 160 Recoveries of financial fixed assets - - - - 1,953 - - - PROVISIONS AND WRITE-DOWNS -45,991 -9,130 -18,563 -16,721 -13,112 -15,684 -13,329 -16,242 170 INCOME FROM ORDINARY ACTIVITIES 68,245 78,573 76,763 102,728 100,553 59,128 70,481 71,786 180 Extraordinary income 15,054 2,996 3,718 3,098 23,719 2,651 12,339 5,400 190 Extraordinary expenses -1,181 -2,345 -1,834 -2,794 -3,966 -1,127 -1,877 -3,142 200 EXTRAORDINARY INCOME, NET 13,873 651 1,884 304 19,753 1,524 10,462 2,258 INCOME BEFORE TAXATION 82,118 79,824 78,647 103,032 120,306 60,652 80,943 74,044 215 Provisions for merger reserve ------220 Income taxes -35,000 -36,000 -35,700 -46,100 -55,100 -25,500 -38,400 -35,300 230 NET INCOME 47,118 43,224 42,947 56,932 65,206 35,152 42,543 38,744
Other operating expenses amounted to around The aggregate of administrative costs (Lit. 524 Lit. 12 bn, slightly up over 1999 (+5.7%). As bn) includes personnel expenses, which fell with other operating revenues, here too, 1.9% from Lit. 340.7 bn to Lit. 334.2 bn. This expenses are connected with leasing activity fall is due to the continuing positive effects of (leasing charges, leasing division overheads, retirement incentives for those members of staff losses on alienation of lease assets). eligible for retirement in addition to the Gross operating income passed the Lit. completion in 1999 of compulsory 1,000 bn mark again, ending the year at Lit. extraordinary contributions over three years to 1,062.3 bn (1999: Lit. 1,000.9 bn; +6.1%). the Italian National Insurance and Pensions Operating costs were stable over the Institute, INPS. previous year’s total (+0.8%) and totalled Lit. Other operating expenses amounted to around 645.6 bn at 31/12/00. Within the aggregate, Lit. 12 bn, slightly up over 1999 (+5.7%). As the most significant increase in write-downs on with other operating revenues, here too, financial fixed assets related to the positive expenses are connected with leasing activity performance of leasing.
46 (leasing charges, leasing division overheads, 24.1 bn, the equivalent of one fifth of total losses on alienation of lease assets). securitisation-related losses. Gross operating income passed the Lit. 1,000 Further provisions were made during the year to bn mark again, ending the year at Lit. 1,062.3 the reserves for loan losses: Lit. 10 bn in bn (1999: Lit. 1,000.9 bn; +6.1%). comparison to a total utilisation of Lit. 5 bn. The The item ‘wages and salaries’ was down 7% year-end total for the fund reached Lit. 10 bn. from Lit. 223.1 bn to Lit. 207.6 bn as were Net write-downs on financial fixed assets were social security charges (-13.6%) from Lit. 65.1 almost halved to a new total of Lit. 1.7 bn. bn to Lit. 56.2 bn; provisions for severance pay Income from ordinary activities rose requirements rose 2.6%. Provisions destined for 8.1% from Lit. 301.9 bn at 31/12/99 to Lit. the supplementary pension fund rose by 6.3% to 326.3 bn. Lit. 23.3 bn (1999: Lit. 21.9bn) bringing the Extraordinary income was significantly fund’s total to Lit. 575.9 bn (1999: Lit. 574.4 down on 1999, slipping from Lit. 34 bn to Lit. bn). 16.7 bn. This can be put down to the following Cover capital for the staff supplementary extraordinary items recorded during 1999 (Lit. pension fund is calculated by actuaries on the 33.2 bn): the application of a new accounting basis of the fund’s regulations, current relevant principle for the handling of deferred tax legislation and consistently prudential generated Lit. 21.4 bn, the recording of credit management. for tax rebates of Lit. 6.9 bn; the recording of Other administrative costs rose from Lit. 185.8 gains stemming from the release of the Bank’s bn to Lit. 189.9 bn (+2.2%) in line with inflation holding in I.C.C.R.I. Banca Federale Europea (2.6% on average terms for 2000). SpA. Extraordinary items for 2000 include the Operating income totalled Lit. 416.7 bn in dividends generated by subsidiaries during comparison to Lit. 360.3 bn at 31/12/99 1999 but collected in 2000 totalling Lit. 8.8 bn, (+15.7%). as described previously. Provisions and writedowns rose 54.9% Pre-tax income for 2000 rose 2.1% from Lit. over 1999 to Lit. 90.4 bn but were affected by 335.9 bn to Lit. 343 bn. the securitisation of bad loans described After tax (Lit. 152.8 bn; -1%) net income for elsewhere in this report. the year increased from Lit. 181.6 bn at Credit risk measured in terms of the difference 31/12/99 to Lit. 190.2 bn, up 4.7%. Return on between write-downs on loans and recoveries Equity was 7.6% (1999: 7.2%) and Return on ended the year at Lit. 73.6 bn. This was an average equity 7.5% (1999:7.9%). increase of 48.1% over 1999 (Lit. 49.7 bn) as a The proposed distribution of net income (Lit. result of the assignment to caption 120 of Lit. 190.2 bn) is as follows:
NET INCOME (Billions of italian Lire)
200 190.2 9.00% 181.6 180
160 147.0 8.00% 140
120 7.55% 100 7.00% 7.17% 7.18% 80
60 6.00% 40
20
0 5.00% 1998 1999 2000
NET INCOME ROE
48 DISTRIBUTION OF NET INCOME
31/12/00
Net income 190,221,275,910 Reserve for dividends on own shares 899,850,000 Total 191,121,125,910 Legal reserve 19,022,127,591 reserve Decree 153/99 10,382,788,681 Taxed extraordinary reserve 18,878,638,138 Shareholder's dividend 142,837,571,500
If approved, the dividend payable per share transferred to a specific reserve for returned would be Lit. 725, 3.6% higher than last year, earnings. assigned to the same number of shares as in Shareholders’ Equity after the proposed
SHAREHOLDERS' EQUITY (Billions of Italian Lire)
3,000
2,500
2,000
1,500 2,576 2,566 2,075 1,000
500
0 1998 1999 2000
1999 (197,017,340). allocations to be presented for the AGM’s Dividends on own shares, subject to the approval would total Lit. 2,566 bn. Details are approval of the Shareholders’ Meeting, will be given below:
SHAREHOLDERS' EQUITY (milions of Italian Lire)
31/12/00 31/12/99 31/12/98
Capital Stock 1,970,173 1,970,173 1,685,173 Additional paid-in capital 241,368 299,189 128,189 Reserves 297,428 249,144 204,113 - legal 90,065 71,043 52,878 - taxed extraordinary 135,907 117,028 92,087 - decree 153/99 12,308 1,925 - - incorporation 23,895 23,895 23,895 - own shares 34,130 9,788 29,161 - purchase of treasury stock 870 25,212 5,839 - art. 55, decree 917/86 253 253 253 Revaluation reserves 15,405 15,405 15,405 Merger reserve 32,120 32,120 32,120 Total 2,556,494 2,566,031 2,065,000 Reserve for general banking risks 10,000 10,000 10,000 Total 2,566,494 2,576,031 2,075,000 49 accounting of securities. Front office rather than RISK PROFILES back office data sources are now used to provide back up to the Finance Area front office platform. The result is a database relative to products traded by the market room At 31/12/00, Banca Carige continued to be (government securities, shares, currency fully in line with all the risk profiles prepared by exchanges, derivatives contracts and money the Bank of Italy and the Interbank Deposit deposits). Protection Fund (FITD). This database is, in turn, the information source Core capital totalled Lit. 2,313.2 bn, a rise of for all the Bank’s Finance Area management 13.5% over year-end 1999’s Lit. 2,038.7. This processes (ALM, VAR, desk and market rise stems from the inclusion within the Carige evaluations, limitation and stop loss systems, Banking Group of the subsidiary Cassa di operations, etc.). Risparmio di Savona SpA, authorised by The use of front office data allows the Bank to regulatory authorities at the beginning of 2000. operate in terms of a multi-product desk, giving Core capital covering credit and market risk the opportunity to evaluate operations at single- amounted to Lit. 990.2 bn (1999: Lit. 851.4 desk level for income, risk and operational bn), Lit. 1,323 bn in excess to minimum results. The platform, reporting, and VAR and requirements (1999: Lit. 1,128 bn). ALM inputting, were put in place at the Banca Carige remains comfortably placed with beginning of 2000. In this phase completion of regards to solvency ratios fixed by both the Bank the testing of the model takes the form of of Italy and the FITD. Carige’s solvency ratio is evaluation of data and information levels. 18.56%, slightly up on 1999’s 18.19% and During 2000, a new internal auditing office more than double the required (8%). became operational in the light of changes in The Bank meets indicators fixed by the Bank of the Bank’s organisational structure as a result of Italy and the FITD to evaluate liquidity required the adoption of a new internal control system to cover maturities. Overall, Carige is placed in (ICS). The internal auditing office’s task includes the FITD’s top class. defining a company control model and Credit risk levels of the Bank continued to evaluating the effectiveness of the ICS as well as improve during the year thanks to a reduction in offering support to the Bank’s statutory auditors the bad loans aggregate as a result of the and co-ordinating the internal auditing of our securitisation of a part of bad loans present in subsidiaries. The Internal auditing office, in the credit portfolio. collaboration with a firm of financial advisers, The FIDT credit quality indicator moved from was particularly involved during the first months 4.31% at 31/12/99 to 1.16% at the end of of the year in identifying operating risks 2000; the minimum threshold is 6%. Connected to the management of the Bank’s The Bank’s small and medium-sized business share portfolio. customers continued to be sub-divided into risk The analysis and evaluation was extended to classes. Each class is assigned an internal rating operating risks connected with and specific to which enables risk to be quantified, with the other areas of activity. These analyses will be benefits this generates for the management of applied to further areas of activity in the near credit risk and the credit portfolio itself. The future. project envisages three stages: firstly, the design The internal auditing office also was actively of a theoretical model and data collection; involved during the year with the Italian Banking secondly, the identification and construction of Association (ABI) in its work defining operating discriminatory variables and the choice of risks databases, the creation and algorithms used for segmentation; thirdly, the implementation of which is a condition in order assignment of insolvency risk to each segment . to benefit from the reduced capital adequacy The results of this credit risk management provisions identified by the new Basle agreement project are being evaluated so as to understand for those banks which adopt advanced risk whether the customer segments identified have evaluation models. also operational value for the Bank in strategic terms. The monitoring of market risk changed during the year as a result of new procedures in the
50 Directors have drawn up a series of delegated responsibilities and powers relating to the granting and extension of overdraft facilities which vary according to staff position and risk CREDIT RISK ASSESSMENT level. The system of controls was put in place so as to guarantee the necessary separation between risk management and control. Within Guidelines on credit are established by the the confines of the Credit Management Division, Bank’s a specific credit recovery unit manages bad loan administrative bodies and on the basis of these, positions along business lines. Credit Management decides on and co- Credit risk is controlled at three levels: the first ordinates policy measures. groups together controls carried out by The various aspects of the Bank’s credit activities branches, local and centralised offices (granting, management and control) are specialising in the granting of credit, and the regulated by a specific unitary policy document, Risk Control and Management Office. These which was updated during the year in order to controls aim at guaranteeing respect for meet several innovations decided on to increase procedures and limits on delegated powers. efficiency and bring it in line with regulatory Second level controls include management changes. controls of credit risks and concentration. These Carige’s credit policy during 2000 continued to controls are carried out by the Risk underline the retail vocation of the Bank. In Management unit operating within the particular, lending was directed at our core Research, Planning and Management Control customer segments such as families, artisans, Office. Solvency ratios and capital adequacy are and small/medium-sized businesses. Clearly, referred to in order to respect regulatory our corporate clients also play an important parameters and portfolio composition ratios. role. A key element in the Bank’s evolving credit The third level is represented by the Internal strategy is to use corporate finance as a means Auditing Office which oversees at network level of promoting a wide range of innovative services the purpose of the credit granted, the existence designed for businesses. and suitability of guarantees and supporting Geographically, Banca Carige continued its documentation, and the correct use of policy of developing lending in areas outside delegated authorities amongst staff. The office is Liguria, which are economically dynamic and also responsible for the centralised control of have low levels of credit risk. This being said, non - authorised overdrafts. Liguria continues to receive 75% of total lending Policies aimed at limiting credit risk range from - -proof of Carige’s strong ties to its traditional those traditionally used, such as guarantees, to operating area. innovative instruments such as securitisation On the product front, Banca Carige as a (December 2000) and, albeit to a limited extent, universal bank offers a wide range of both short credit default swaps. and long-term lending products, in addition to In order to favour pricing efficiencies in the its parabanking line. granting and management of credit, so Long-term lending for families is particularly incorporating credit risk more effectively, an focused on mortgage for house purchases or internal credit rating project was launched, loans for the renovation of the home. which aims at the classification of customers Support for business in our operating areas into homogeneous groups; this segmentation takes into account differing levels of credit will be defined in 2001. worthiness from one sector to another and Credits at risk and related writedowns are therefore a careful pricing policy is in place so classified in a scale of increasing risk exposure as to reconcile the needs of local economies and are as follows: a position subject to with the financial concerns for stability and particular attention; watchlist positions with income of the Bank. related writedowns calculated analytically for The granting of overdrafts is based on a exposures greater than Lit. 1 bn, and a flat rate computerised process of integrated measures 8% for other positions; rescheduled positions which are provided information by various are written down analytically; country-related operating units and connected to information risks are written down by 30%, Russia by 60%; providers. Organisationally, credit is headed by bad loans are written down analytically on a the Credit Management Division. The Board of case by-case basis.
51 act’), an agreement is being finalised for the release of three Banca Carige branches in the province of Savona, and one branch of the SIGNIFICANT EVENTS AFTER Carige Group banking subsidiary, Cassa di 31ST DECEMBER Risparmio di Savona SpA, in the same province. PROSPECTS AND On 1st February 2001, Banca Carige brought CONCLUSIONS its interest rates into line with the fall in rates recorded since the beginning of the year. During the Board of Directors’ meeting of 29th January, Pietro Isnardi was appointed to the In an increasingly competitive and global Board to replace the outgoing Romeo Panizzi. market, an increase in shareholder value is Mr. Isnardi’s appointment as board member is achieved solely by efficiency, operational effective until the next shareholders’ meeting. flexibility and quick response times. Banca The Board deliberated on 12th February the full Carige has demonstrated that it possesses these acceptance of the Code of Self-Regulation for attributes and it faces 2001 keenly aware of the Listed Companies (‘the Preda Code’) prepared strategic importance of increased value for by the Corporate Governance Committee of shareholders and other stakeholders in the Borsa Italiana SpA. Bank. Value creation can only come from cash In March, a new mortgage package was flow improvements and increased profitability. launched - ‘Mutuo Carige Top’ - aimed at first- However, short-term operational results must be time home buyers. In collaboration with a major weighed up against the need for those furniture producer, the package includes, for investments in the medium/long-term which will mortgages stipulated before the end of the year, guarantee future revenue sources. the offer of a voucher worth Lit. 10 million (euro In particular, the Bank’s strategic projects aim at 5,165) for the purchase of a kitchen. establishing our role as a banking, finance and The second phase of the securitisation operation insurance provider which is focused on certain, described in this report was completed in key business areas. It is essential, therefore, that March. This phase included the rating of the we consolidate the positions we have obtained different tranches, the definition of the bond type across all aspects of traditional activity. The and related guarantees, the offer and development of service-generated income is subscription of the issues, and payment of the fundamental and the Bank intends to address related price. the needs of retail customers (families, The review of the Bank’s distribution structure craftsmen, small and medium-sized businesses) aiming at creating specific business and especially in the fields of savings management organisational modules for varying segments of and insurance and pension solutions, and in e- private and corporate clients is being banking. implemented. One of the results of this review Cost containment remains crucial in any will be a Corporate Finance Management organisation inspired by a profit preference. service which will offer diversified, efficient and Savings continue to be made on personnel- tailored services to medium and large-sized related expenses (incentives for retirement, businesses, whilst at the same time closely reduction of average employee age) whilst monitoring the quality of credit. operating costs will be critically analysed in the Banca Carige’s staff numbers rose by 82 units, light of future investments foreseen in IC&T and bringing the total to 3,162 employees. This human resources development. significant increase is the result of the purchase The full integration of our banking subsidiaries of 21 branches in Sicily; the 84 employees of Cassa di Risparmio di Savona SpA and Banca these branches officially passed to the Bank on del Monte di Lucca SpA will generate synergies 1st January. deriving from harmonisation of business On 26th March, Carige opened a new outlet in strategies. Palermo (branch no. 10), the Bank’s twenty- The objectives outlined will be co-ordinated and second branch on the island. integrated, and their implementation will In relation to the Bank of Italy’s ruling of March depend on a careful evaluation of time scales, 2000 in response to Law 287/90 (‘antitrust
52 means of realisation, and adequacy of human resources.
53
To the Shareholders of Banca Carige, integration with subsidiaries in order to increase income in the medium term; Last year was an important year for Banca - continue the expansion and re-structuring of Carige in terms of both policy objectives distribution channels to realise an integrated reached and those underway, both of which multi-channel network able to respond more represent the foundations for the future of the effectively to customer needs. Bank. The Board of Directors would like to thank all In line with the strategic objectives adopted by those who have contributed to the development the Bank in recent years, the following areas of the Bank and to its further growth. have been identified in order to achieve the Particular thanks go to our shareholders, whose results desired: role in the future of the Bank is so important, - support deposit taking both in the and to our customers, who we are privileged to medium/long and short term so as to serve. provide resources for forecasted expansion The Board would also like to express its gratitude in lending; to General Management and staff, whose role - focus on savings management and increase in reaching future objectives is crucial. Best its role in indirect deposits with particular wishes go to all members of staff who left the emphasis on pension-related products; Bank during 2000. - support the present growth in the local The Board wishes to thank the following for the economy through lending while at the same collaboration and courtesy offered at all times time critically evaluating credit risk profiles. during the last year: CONSOB (Commissione Medium/long-term lending will continue to Nazionale per le Società e la Borsa), Borsa grow, especially in mortgages destined for Italiana SpA and the Bank of Italy. the family; Finally, the Bank is indebted to the Board of - achieve operational synergies and Statutory Auditors for its constant monitoring of economies of scale by means of increased the Bank’s activities.
Genoa, 28th March 2001 The Board of Directors
54 FINANCIAL STATEMENTS 2000
54 BALANCE SHEET
ASSETS (Italian Lire) 31/12/00 31/12/99 10 -CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 216,844,574,960 157,431,957,853 20 -TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 838,801,970,668 1,856,584,748,936 30 -LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 1,863,407,576,889 1,198,335,373,757 (a) repayable on demand 981,533,236,143 237,933,408,126 (b) other loans and advances 881,874,340,746 960,401,965,631 40 -ACCRUED INCOME AND PREPAID EXPENSES: 12,166,038,029,927 10,583,570,055,334 including: – loans using funds managed on behalf of third parties 308,089,913 185,877,390 50 -BONDS AND OTHER FIXED–INCOME SECURITIES: 3,868,864,507,492 2,800,718,117,958 (a) issued by public bodies 2,261,355,024,803 1,600,555,395,210 (b) issued by banks 944,851,770,335 641,743,852,943 including: – own securities 109,018,511,127 99,189,275,390 (c) issued by financial institutions 491,575,444,897 275,201,028,849 including: – own securities - - (d) issued by others 171,082,267,457 283,217,840,956 60 -SHARES, QUOTAS AND OTHER EQUITY SECURITIES 273,446,568,659 276,590,191,090 70 -EQUITY INVESTMENTS 104,641,460,523 531,505,150,860 80 -INVESTMENTS IN GROUP COMPANIES 1,086,327,957,960 527,724,329,080 90 -INTANGIBLE FIXED ASSETS 165,123,874,560 57,102,529,047 including: – start-up costs 8,817,283,553 13,012,171,200 – goodwill 123,215,712,159 13,431,424,315 100 -TANGIBLE FIXED ASSETS 1,014,300,212,273 901,509,364,077 including: – leasing 541,586,956,765 425,772,751,028 120 -OWN SHARES 34,130,274,532 9,787,768,889 (nominal value: Lit. 19,157,500,000) 130 -OTHER ASSETS 722,700,022,546 762,783,423,460 140 -ACCRUED INCOME AND PREPAID EXPENSES: 175,674,627,395 138,898,290,820 (a) accrued income 164,078,863,460 132,338,512,084 (b) prepaid expenses 11,595,763,935 6,559,778,736 including: – discount on bonds issued 2,398,112,768 1,454,516,111 TOTAL ASSETS 22,530,301,658,384 19,802,541,301,161
LIABILITIES AND STOCKHOLDERS’ EQUITY (millions of Italian Lire) 31/12/00 31/12/99 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,521,973,342,024 2,998,448,272,500 (a) repayable on demand 264,970,679,162 52,027,225,925 (b) with agreed maturity dates or periods of notice 4,257,002,662,862 2,946,421,046,575 20 -AMOUNTS OWED TO CUSTOMERS: 7,918,981,894,239 7,381,577,714,483 (a) repayable on demand 7,232,507,364,269 6,809,280,404,363 (b) with agreed maturity dates or periods of notice 686,474,529,970 572,297,310,120 30 -DEBTS EVIDENCED BY CERTIFICATES: 5,472,208,349,225 4,944,113,978,501 (a) bonds 4,385,761,115,364 3,745,855,180,544 (b) certificates of deposits 946,889,510,262 1,102,221,309,419 (c) other 139,557,723,599 96,037,488,538 40 -FUNDS MANAGED ON BEHALF OF THIRD PARTIES 449,725,236 444,815,682 50 -OTHER LIABILITIES 705,166,764,412 683,685,123,137 60 -ACCRUED EXPENSES AND DEFERRED INCOME: 285,291,691,518 201,801,966,605
55 LIABILITIES AND STOCKHOLDERS’ EQUITY (Italian Lire) 31/12/00 31/12/99 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,521,973,342,024 2,998,448,272,500 (a) repayable on demand 264,970,679,162 52,027,225,925 (b) with agreed maturity dates or periods of notice 4,257,002,662,862 2,946,421,046,575 20 -AMOUNTS OWED TO CUSTOMERS: 7,918,981,894,239 7,381,577,714,483 (a) repayable on demand 7,232,507,364,269 6,809,280,404,363 (b) with agreed maturity dates or periods of notice 686,474,529,970 572,297,310,120 30 -DEBTS EVIDENCED BY CERTIFICATES: 5,472,208,349,225 4,944,113,978,501 (a) bonds 4,385,761,115,364 3,745,855,180,544 (b) certificates of deposits 946,889,510,262 1,102,221,309,419 (c) other 139,557,723,599 96,037,488,538 40 -FUNDS MANAGED ON BEHALF OF THIRD PARTIES 449,725,236 444,815,682 50 -OTHER LIABILITIES 705,166,764,412 683,685,123,137 60 -ACCRUED EXPENSES AND DEFERRED INCOME: 285,291,691,518 201,801,966,605 (a) accrued expenses 217,978,430,294 154,483,100,908 (b) deferred income 67,313,261,224 47,318,865,697 70 -RESERVE FOR TERMINATION INDEMNITIES 119,793,794,561 112,785,632,356 80 -RESERVES FOR RISKS AND CHARGES 787,104,518,993 760,740,545,569
(a) reserves for pensions and similar commitments 575,943,254,000 574,352,331,000 (b) reserves for taxation 166,875,204,810 163,092,203,326 (c) other reserves 44,286,060,183 23,296,011,243 90 -RESERVES FOR LOAN LOSSES 10,000,000,000 5,000,000,000 100 -RESERVES FOR GENERAL BANKING RISKS 10,000,000,000 10,000,000,000 120 -CAPITAL STOCK 1,970,173,400,000 1,970,173,400,000 130 -ADDITIONAL PAID-IN CAPITAL 241,367,837,938 299,188,500,000 140 -RESERVES 282,163,988,562 237,531,432,762 (a) legal reserve 71,042,959,488 52,878,475,108 (b) reserve for purchase of treasury stock 34,130,274,532 9,787,768,889 (c) statutory reserves - - (d) other reserves 176,990,754,542 174,865,188,765 150 -REVALUATION RESERVES 15,405,075,766 15,405,075,766 170 -NET INCOME 190,221,275,910 181,644,843,800
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 22,530,301,658,384 19,802,541,301,161
GUARANTEES AND COMMITMENTS 10 -GUARANTEES GIVEN 2,152,098,439,659 1,828,213,163,561 including: – acceptances 8,544,123,723 15,572,359,201 – other guarantees 2,143,554,315,936 1,812,640,804,360 20 -COMMITMENTS 1,407,035,767,637 820,521,062,595 including: – repurchase agreements - -
56 INCOME STATEMENT
( Italian Lire) 2000 1999 10 - INTEREST INCOME AND SIMILAR REVENUES 1,046,940,950,136 858,555,306,989 including: – loans and advances to customers 762,911,669,399 606,566,523,261 – fixed-income securities 231,933,586,520 202,549,697,371 20 - INTEREST EXPENSE AND SIMILAR CHARGES - 482,526,830,251 - 371,872,882,865 including: – amounts owed to customers - 96,714,542,540 - 77,634,984,505 – securities issued - 212,990,881,114 - 167,314,671,052 30 - DIVIDENDS AND OTHER REVENUES: 57,617,269,797 52,702,108,647 (a) from shares, quotas and other equity securities 3,905,220,520 5,768,353,723 (b) from equity investments 20,140,176,182 45,157,185,272 (c) from equity investments in group companies 33,571,873,095 1,776,569,652 40 - COMMISSION INCOME 279,306,473,017 263,514,406,669 50 - COMMISSION EXPENSES - 21,504,305,604 - 16,210,797,678 60 - GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 25,228,817,836 80,787,971,597 70 - OTHER OPERATING INCOME 169,192,556,828 144,721,878,767 80 - ADMINISTRATIVE COSTS: - 524,026,876,951 - 526,484,822,516 (a) personnel - 334,173,003,716 - 340,692,339,942 including: – wages and salaries - 207,552,968,951 - 223,135,039,644 – social security costs - 56,223,880,807 - 65,103,359,890 – termination indemnities - 16,810,957,823 - 16,379,959,759 – pensions and similar commitments - 23,281,069,728 - 21,906,163,669 (b) other administrative costs - 189,853,873,235 - 185,792,482,574 90 - DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS - 121,537,271,390 - 114,068,392,780 100 - PROVISIONS FOR RISKS AND CHARGES - 5,062,258,793 - 2,750,700,000 110 - OTHER OPERATING EXPENSES - 11,976,030,408 - 11,330,174,212 120 - PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS - 91,608,749,278 - 74,235,063,556 130 - RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 17,973,972,661 24,507,985,342 140 - ADDITIONAL PROVISIONS FOR LOAN LOSSES - 10,000,000,000 - 5,000,000,000 150 - WRITE-DOWNS TO FINANCIAL FIXED ASSETS - 1,708,263,149 - 2,842,142,728 160 - RECOVERIES OF FINANCIAL FIXED ASSETS - 1,952,940,311 170 - INCOME FROM ORDINARY ACTIVITIES 326,309,454,451 301,947,621,987 180 - EXTRAORDINARY INCOME 24,866,125,330 44,109,493,024 190 - EXTRAORDINARY EXPENSES - 8,154,303,871 - 10,112,271,211 200 - EXTRAORDINARY INCOME, NET 16,711,821,459 33,997,221,813 220 - INCOME TAXES - - 220 - INCOME TAXES - 152,800,000,000 - 154,300,000,000 230 - NET INCOME 190,221,275,910 181,644,843,800
57 FINANCIAL STATEMENTS: COMPARISON WITH 1999
58 BALANCE SHEET COMPARISON WITH 1999
ASSETS Variazioni % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 -CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 216,844 157,432 37.7 4.3 20 - TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 838,802 1,856,585 - 54.8 - 54.1 30 -LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 1,863,408 1,198,335 55.5 - 27.2 (a) repayable on demand 981,533 237,933 ... 35.0 (b) other loans and advances 881,875 960,402 - 8.2 - 34.7 40 -ACCRUED INCOME AND PREPAID EXPENSES: 12,166,038 10,583,570 15.0 11.9 including: – loans using funds managed on behalf of third parties 308 186 65.6 - 96.9 50 -BONDS AND OTHER FIXED–INCOME SECURITIES: 3,868,865 2,800,718 38.1 95.2 (a) issued by public bodies 2,261,355 1,600,555 41.3 52.6 (b) issued by banks 944,852 641,744 47.2 ... including: – own securities 109,019 99,189 9.9 - 18.9 (c) issued by financial institutions 491,576 275,201 78.6 ... including: – own securities - - - - (d) issued by others 171,082 283,218 - 39.6 ... 60 -SHARES, QUOTAS AND OTHER EQUITY SECURITIES 273,447 276,590 - 1.1 70.7 70 -EQUITY INVESTMENTS 104,641 531,505 - 80.3 90.6 80 -INVESTMENTS IN GROUP COMPANIES 1,086,328 527,724 ... 86.6 90 -INTANGIBLE FIXED ASSETS 165,124 57,103 ... - 2.2 including: – start-up costs 8,817 13,012 - 32.2 - 6.5 – goodwill 123,215 13,431 ... - 33.3 100 -TANGIBLE FIXED ASSETS 1,014,300 901,509 12.5 16.4 including: – leasing 541,587 425,773 27.2 45.9 120 -OWN SHARES 34,130 9,788 ... - 66.4 (nominal value: Lit. 19,933) 130 -OTHER ASSETS 722,700 762,783 - 5.3 - 0.4 140 -ACCRUED INCOME AND PREPAID EXPENSES: 175,675 138,899 26.5 - 7.3 (a) accrued income 164,079 132,339 24.0 - 8.3 (b) prepaid expenses 11,596 6,560 76.8 17.1 including: – discount on bonds issued 2,398 1,455 64.8 44.5 TOTAL ASSETS 22,530,302 19,802,541 13.8 2.9
59 LIABILITIES AND STOCKHOLDERS’ EQUITY Variazioni % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,521,974 2,998,448 50.8 - 14.5 (a) repayable on demand 264,971 52,027 ... - 69.9 (b) with agreed maturity dates or periods of notice 4,257,003 2,946,421 44.5 - 11.6 20 -AMOUNTS OWED TO CUSTOMERS: 7,918,982 7,381,578 7.3 2.2 (a) repayable on demand 7,232,507 6,809,281 6.2 6.0 (b) with agreed maturity dates or periods of notice 686,475 572,297 20.0 - 28.6 30 -DEBTS EVIDENCED BY CERTIFICATES: 5,472,208 4,944,114 10.7 8.3 (a) bonds 4,385,761 3,745,855 17.1 29.1 (b) certificates of deposits 946,889 1,102,221 - 14.1 - 28.1 (c) other 139,558 96,038 45.3 - 25.6 40 -FUNDS MANAGED ON BEHALF OF THIRD PARTIES 450 445 1.1 - 93.0 50 - OTHER LIABILITIES 705,167 683,685 3.1 3.3 60 -ACCRUED EXPENSES AND DEFERRED INCOME: 285,292 201,802 41.4 - 9.3 (a) accrued expenses 217,979 154,483 41.1 - 14.5 (b) deferred income 67,313 47,319 42.3 12.7 70 -RESERVE FOR TERMINATION INDEMNITIES 119,794 112,786 6.2 3.3 80 -RESERVES FOR RISKS AND CHARGES 787,104 760,740 3.5 2.8 (a) reserves for pensions and similar commitments 575,943 574,352 0.3 0.1 (b) reserves for taxation 166,875 163,092 2.3 11.3 (c) other reserves 44,286 23,296 90.1 16.7 90 -RESERVES FOR LOAN LOSSES 10,000 5,000 ... - 16.7 100 -RESERVES FOR GENERAL BANKING RISKS 10,000 10,000 - - 120 -CAPITAL STOCK 1,970,173 1,970,173 - 16.9 130 -ADDITIONAL PAID-IN CAPITAL 241,368 299,189 - 19.3 ... 140 -RESERVES 282,164 237,531 18.8 14.6 (a) legal reserve 71,043 52,878 34.4 38.5 (b) reserve for purchase of treasury stock 34,130 9,788 ... - 66.4 (c) statutory reserves - - - - (d) other reserves 176,991 174,865 1.2 25.0 150 -REVALUATION RESERVES 15,405 15,405 - - 170 -NET INCOME 190,221 181,645 4.7 23.6
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 22,530,302 19,802,541 13.8 2.9
- GUARANTEES AND COMMITMENTS 10 -GUARANTEES GIVEN 2,152,098 1,828,213 17.7 - 4.1 including: – acceptances 8,544 15,572 - 45.1 43.3 – other guarantees 2,143,554 1,812,641 18.3 - 4.4 20 -COMMITMENTS 1,407,036 820,521 71.5 34.7 including: – repurchase agreements - - - -
60 INCOME STATEMENT COMPARISON WITH 1999
Variazioni % (millions of Italian Lire) 2000 1999 2000 1999 10 - INTEREST INCOME AND SIMILAR REVENUES 1,046,941 858,555 21.9 - 24.1 including: – loans and advances to customers 762,912 606,567 25.8 - 15.2 – fixed-income securities 231,934 202,550 14.5 - 32.4 20 - INTEREST EXPENSE AND SIMILAR CHARGES - 482,527 - 371,873 29.8 - 37.1 including: – amounts owed to customers - 96,715 - 77,635 24.6 - 51.4 – securities issued - 212,991 - 167,315 27.3 - 32.2 30 - DIVIDENDS AND OTHER REVENUES: 57,617 52,702 9.3 ... (a) from shares, quotas and other equity securities 3,905 5,768 - 32.3 ... (b) from equity investments 20,140 45,157 - 55.4 ... (c) from equity investments in group companies 33,572 1,777 ... - 37.7 40 - COMMISSION INCOME 279,306 263,514 6.0 17.8 50 - COMMISSION EXPENSES - 21,504 - 16,211 32.7 - 11.5 60 - GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 25,229 80,788 - 68.8 - 13.2 70 - OTHER OPERATING INCOME 169,192 144,722 16.9 11.6 80 - ADMINISTRATIVE COSTS: - 524,027 - 526,484 - 0.5 0.3 (a) personnel - 334,173 - 340,692 - 1.9 - 0.9 including: – wages and salaries - 207,553 - 223,135 - 7.0 - 0.2 – social security costs - 56,224 - 65,103 - 13.6 - 2.2 – termination indemnities - 16,811 - 16,380 2.6 3.3 – pensions and similar commitments - 23,281 - 21,906 6.3 - 8.2 (b) other administrative costs - 189,854 - 185,792 2.2 2.6 90 - DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS - 121,537 - 114,068 6.5 14.3 100 - PROVISIONS FOR RISKS AND CHARGES - 5,062 - 2,751 84.0 96.5 110 - OTHER OPERATING EXPENSES - 11,976 - 11,330 5.7 49.0 120 - PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS - 91,609 - 74,235 23.4 - 16.9 130 - RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 17,974 24,508 - 26.7 - 20.7 140 - ADDITIONAL PROVISIONS FOR LOAN LOSSES - 10,000 - 5,000 ... - 16.7 150 - WRITE-DOWNS TO FINANCIAL FIXED ASSETS - 1,708 - 2,842 - 39.9 ... 160 - RECOVERIES OF FINANCIAL FIXED ASSETS - 1,953 - 100.0 ... 170 - INCOME FROM ORDINARY ACTIVITIES 326,309 301,948 8.1 8.1 180 - EXTRAORDINARY INCOME 24,866 44,109 - 43.6 ... 190 - EXTRAORDINARY EXPENSES - 8,154 - 10,112 - 19.4 ... 200 - EXTRAORDINARY INCOME, NET 16,712 33,997 - 50.8 ... 220 - INCOME TAXES - 152,800 - 154,300 - 1.0 12.1 230 - NET INCOME 190,221 181,645 4.7 23.6
61 FINANCIAL STATEMENTS IN EURO
The accounts for the year are expressed in euro with translation rates being those in effect from 1/1/99, in line with CONSOB Recommendation no. 98083971 of 26/10/98. The Bank’s share capital has yet to be converted into euro.
62 BALANCE SHEET
ASSETS Change % (EURO)(EURO) 31/12/00 31/12/99 2000 1999 10 CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 111.990.877 81.306.821 37,7 4,3 20 - TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 433.205.065 958.846.002 - 54,8 - 54,1 30 -LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 962.369.698 618.888.571 55,5 - 27,2 (a) repayable on demand 506.919.611 122.882.350 ... 35,0 (b) other loans and advances 455.450.087 496.006.221 - 8,2 - 34,7 40 -ACCRUED INCOME AND PREPAID EXPENSES: 6.283.234.275 5.465.957.772 15,0 11,9 including: – loans using funds managed on behalf of third parties 159.115 95.998 65,7 - 96,9 50 -BONDS AND OTHER FIXED–INCOME SECURITIES: 1.998.101.766 1.446.450.194 38,1 95,2 (a) issued by public bodies 1.167.892.404 826.617.876 41,3 52,6 (b) issued by banks 487.975.215 331.433.040 47,2 ... including: – own securities 56.303.362 51.226.986 9,9 - 18,9 (c) issued by financial institutions 253.877.530 142.129.470 78,6 ... including: – own securities - - - - (d) issued by others 88.356.617 146.269.808 - 39,6 ... 60 -SHARES, QUOTAS AND OTHER EQUITY SECURITIES 141.223.367 142.846.912 - 1,1 70,7 70 -EQUITY INVESTMENTS 54.042.804 274.499.502 - 80,3 90,6 80 -INVESTMENTS IN GROUP COMPANIES 561.041.569 272.546.871 ... 86,6 90 -INTANGIBLE FIXED ASSETS 85.279.364 29.490.995 ... - 2,2 including: – start-up costs 4.553.747 6.720.226 - 32,2 - 6,5 – goodwill 63.635.605 6.936.752 ... - 33,3 100 -TANGIBLE FIXED ASSETS 523.842.342 465.590.731 12,5 16,4 including: – leasing 279.706.320 219.893.275 27,2 45,9 120 -OWN SHARES 17.626.816 5.054.961 ... - 66,4 (nominal value: 9,894,023) 130 -OTHER ASSETS 373.243.413 393.944.762 - 5,3 - 0,4 140 -ACCRUED INCOME AND PREPAID EXPENSES: 90.728.373 71.734.981 26,5 - 7,3 (a) accrued income 84.739.661 68.347.138 24,0 - 8,3 (b) prepaid expenses 5.988.712 3.387.843 76,8 17,1 including: – discount on bonds issued 1.238.522 751.195 64,9 44,4 TOTAL ASSETS 11.635.929.729 10.227.159.075 13,8 2,9
63 LIABILITIES AND STOCKHOLDERS’ EQUITY Variazione % (EURO)(EURO) 31/12/00 31/12/99 2000 1999 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 2,335,404,330 1,548,569,297 50.8 - 14.5 (a) repayable on demand 136,845,935 26,869,820 ... - 69.9 (b) with agreed maturity dates or periods of notice 2,198,558,395 1,521,699,477 44.5 - 11.6 20 - AMOUNTS OWED TO CUSTOMERS: 4,089,812,833 3,812,266,737 7.3 2.2 (a) repayable on demand 3,735,278,326 3,516,699,843 6.2 6.0 (b) with agreed maturity dates or periods of notice 354,534,507 295,566,894 20.0 - 28.6 30 - DEBTS EVIDENCED BY CERTIFICATES: 2,826,159,755 2,553,421,775 10.7 8.3 (a) bonds 2,265,056,586 1,934,572,751 17.1 29.1 (b) certificates of deposits 489,027,620 569,249,800 - 14.1 - 28.1 (c) other 72,075,549 49,599,224 45.3 - 25.6 40 - FUNDS MANAGED ON BEHALF OF THIRD PARTIES 232,264 229,728 1.1 - 93.0 50 - OTHER LIABILITIES 364,188,240 353,093,897 3.1 3.3 60 - ACCRUED EXPENSES AND DEFERRED INCOME: 147,340,862 104,222,018 41.4 - 9.3 (a) accrued expenses 112,576,464 79,783,863 41.1 - 14.5 (b) deferred income 34,764,398 24,438,155 42.3 12.7 70 - RESERVE FOR TERMINATION INDEMNITIES 61,868,332 58,248,918 6.2 3.3 80 - RESERVES FOR RISKS AND CHARGES 406,505,559 392,889,704 3.5 2.8 (a) reserves for pensions and similar commitments 297,449,867 296,628,224 0.3 0.1 (b) reserves for taxation 86,183,851 84,230,094 2.3 11.3 (c) other reserves 22,871,841 12,031,386 90.1 16.7 90 - RESERVES FOR LOAN LOSSES 5,164,569 2,582,284 ... - 16.7 100 - RESERVES FOR GENERAL BANKING RISKS 5,164,569 5,164,569 - - 120 - CAPITAL STOCK 1,017,509,645 1,017,509,645 - 16.9 130 - ADDITIONAL PAID-IN CAPITAL 124,656,085 154,517,965 - 19.3 ... 140 - RESERVES 145,725,538 122,674,747 18.8 14.6 (a) legal reserve 36,690,626 27,309,453 34.4 38.5 (b) reserve for purchase of treasury stock 17,626,816 5,054,961 ... - 66.4 (c) statutory reserves - - - - (d) other reserves 91,408,096 90,310,333 1.2 25.0 150 - REVALUATION RESERVES 7,956,058 7,956,058 - - 170 - NET INCOME 98,241,090 93,811,733 4.7 23.6
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 11,635,929,729 10,227,159,075 13.8 2.9
- GUARANTEES AND COMMITMENTS 10 - GUARANTEES GIVEN 1,111,466,087 944,193,301 17.7 - 4.1 including: – acceptances 4,412,672 8,042,452 - 45.1 43.3 – other guarantees 1,107,053,415 936,150,849 18.3 - 4.4 20 - COMMITMENTS 726,673,329 423,763,764 71.5 34.7 including: – repurchase agreements - - - -
64 INCOME STATEMENT
(Euro) 2000 1999 10 - INTEREST INCOME AND SIMILAR REVENUES 540,699,877 443,406,812 including: – loans and advances to customers 394,010,995 313,265,466 – fixed-income securities 119,783,701 104,608,189 20 - INTEREST EXPENSE AND SIMILAR CHARGES - 249,204,310 - 192,056,316 including: – amounts owed to customers - 49,948,893 - 40,095,123 – securities issued - 110,000,610 - 86,410,816 30 - DIVIDENDS AND OTHER REVENUES: 29,756,836 27,218,368 (a) from shares, quotas and other equity securities 2,016,878 2,979,106 (b) from equity investments 10,401,533 23,321,740 (c) from equity investments in group companies 17,338,425 917,522 40 - COMMISSION INCOME 144,249,755 136,093,833 50 - COMMISSION EXPENSES - 11,106,047 - 8,372,178 60 - GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 13,029,597 41,723,505 70 - OTHER OPERATING INCOME 87,380,663 74,742,613 80 - ADMINISTRATIVE COSTS: - 270,637,296 - 271,906,719 (a) personnel - 172,585,953 - 175,952,909 including: – wages and salaries - 107,192,163 - 115,239,631 – social security costs - 29,037,211 - 33,623,079 – termination indemnities - 8,682,135 - 8,459,543 – pensions and similar commitments - 12,023,669 - 11,313,589 (b) other administrative costs - 98,051,343 - 95,953,809 90 - DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS - 62,768,762 - 58,911,408 100 - PROVISIONS FOR RISKS AND CHARGES - 2,614,438 - 1,420,618 110 - OTHER OPERATING EXPENSES - 6,185,104 - 5,851,547 120 - PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS - 47,311,971 - 38,339,211 130 - RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 9,282,782 12,657,318 140 - ADDITIONAL PROVISIONS FOR LOAN LOSSES - 5,164,569 - 2,582,284 150 - WRITE-DOWNS TO FINANCIAL FIXED ASSETS - 882,244 - 1,467,844 160 - RECOVERIES OF FINANCIAL FIXED ASSETS - 1,008,609 170 - INCOME FROM ORDINARY ACTIVITIES 168,524,769 155,942,933 180 - EXTRAORDINARY INCOME 12,842,282 22,780,652 190 - EXTRAORDINARY EXPENSES - 4,211,347 - 5,222,552 200 - EXTRAORDINARY INCOME, NET 8,630,935 17,558,100 220 - INCOME TAXES - 78,914,614 - 79,689,300 230 - NET INCOME 98,241,090 93,811,733
65 EXPLANATORY NOTES
INTRODUCTION - list of non-significant investments; - information on subsidiaries and other These financial statements have been significant company interests; prepared in compliance with Legislative - key data relating to Carige Open decree 87/92 and the Bank of Italy provision Pension Fund; dated 30/7/92 and subsequent - Pro-forma balance sheet 2000 and modifications. comparison with pro-forma statement The Balance Sheet and Income Statement for 1999 in the light of new accounting show amounts in Italian lire. Comparison is principle for handling of dividends made to the business year ending stemming from equity investments; 31/12/99. Captions which show no - list of exchange rates used in converting amounts in the balance sheets of the periods currency into lire. under examination have not been entered. With regards to balance sheet caption 50 “ Purchase of 21 branches from Banco bonds and other fixed-income securities”, di Sicilia data given at items “issued by banks” and At the end of the year, the Bank acquired 21 “issued by others” have been reclassified in branches from the Banco di Sicilia situated in order to aid comparison between the the provinces of Enna and Palermo. The statements effects of the acquisition for 2000 were For the reader’s benefit, amounts are also exclusively on the balance sheet as the expressed in euro applying the lira/euro agreement came into force 1/1/2001. translation rate in force from 1/1/99 as The value of assets purchased are as follows: requested by Consob recommendation no. 98083971 of 26/10/98. - customers loans Lit. 113.0 bn In the explanatory notes, amounts are - amounts owed by banks and Lit. 272.4 bn expressed in millions of Italian lire, unless other credit institutions otherwise stated. Captions which show no (corresponding to imbalance of amounts for the periods under examination credit values granted) have been omitted. Further information not - customer deposits Lit. 332.9 bn foreseen by the above-mentioned regulations - securities issued Lit. 49.2 bn and provisions has been supplied where - indirect deposits Lit. 390.8 bn judged appropriate. The report is completed by the following New criterion for the accounting of attached statements: dividends on equity investments - statement of changes in stockholders’ During 2000, a new criterion for the handling of equity; dividends on equity investments was - statement of cash flow; introduced. - statement in accordance with article 7, In particular, the accounting of dividends Law 218/90 (abstract); payable by subsidiaries to the parent - form of total tax credits attributable to company is to be on an accruals basis. shareholders related to dividends at the This criterion is in line with the accounting moment of their distribution (article 105, principles foreseen by the Council of Italian Presidential decree 917/86). Chartered Accountants and Consob - properties; provisions nos. SOC/RM/94004765 of - leased fixed assets revalued in 11/5/94 and DAC/RM/95002194 of accordance with Law 413/91; 16/3/95. The extension of the principle of - convertible bonds; substance over form allows for dividends to
66 be accounted for in the period to which they Positive and negative exchange translation relate. differentials are recorded at caption 60 “ This treatment had the following effects on Gains (losses) from financial transactions”. the balance sheet and income statement for At 31st December 2000, equity investments 2000: in currencies of EMU-member countries or 1. Captions 30b ‘Dividends and other indexed to the same continued to be revenues from equity investments’ and evaluated in accordance with the relevant 130 ‘other activities’: the charging of Lit. areas of article 21, Legislative decree 33,572 million corresponding to 213/98, applying the rate in force at the dividends accrued during 2000 (Lit. time of purchase. 21,150 million) and related tax credits Positive exchange translation differentials (Lit. 12,422 million); relating to equity investments not recorded at 2. Captions 220 ‘Income tax’ and 80b caption 60 amount to Lit. 6,349 million. ‘Reserves for risks and charges - tax reserves’: the recording of related differed Costs stemming from information tax of Lit. 12,086 million; technology problems relating to the 3. Caption 180 ‘Extraordinary income’: the year 2000 and the transition to the recording of Lit. 8,775 million in euro dividends accrued during 1999 and For the calculation of these costs, the Bank received during 2000, inclusive of tax utilised the same criteria applied to the credits totalling Lit. 3,247 million. replacement, maintenance, and updating of information systems. Net income and shareholder’s equity for the Costs connected to “millennium bug” year subsequently rose by Lit. 21,486 problems were recorded in the income million. statement for the period for a total of around The adoption of the new criterion had no Lit. 0.48bn; whilst at income statement effects on the Bank’s tax position, nor on the caption 90 “ Intangible fixed assets” Lit. 2.1 consolidated accounts. bn remains to be amortised. As foreseen by regulations the attachments Euro-transition costs totalling around Lit. 1.6 include pro-forma statements for 2000 and bn are recorded in the income statement; Lit. 1999 in order to aid comparison between 2.8 bn remains to be amortised. the two accounting periods in the light of the Further details are given in the Report. new criterion adopted. Consob request for information Valuation of assets and liabilities (Consob communication no. 1011405 expressed in other EMU countries’ dated 15/2/2001) currencies Below is presented the information Italian At 31st December 1998, assets, excluding banks are required to supply to Consob equity investments, liabilities and off-balance pursuant to article 114, legislative decree sheet transactions are expressed in the 58/98. currencies of the EMU-member countries or indexed to the same in accordance with the a) Tax relief foreseen by articles 22 relevant areas of article 21, Legislative and 23 of Legislative decree decree 213/98, applying the exchange 153/99.. In these financial statements, translation rates fixed at 31/12/98 and as in previous years, income tax for the pursuant to articles 4 and 5 of Community year was calculated also on the basis of regulation no. 1103/97. 67 relief for non structural mergers as foreseen by the above-stated legislation. As a result, for 1999 and 2000 there d) Capitalisation of interest due were reduced tax liabilities of, respectively, (Constitutional Court Sentence 425 Lit. 472 million and Lit. 2,544 million. In of 9/10/00). The Constitutional Court’s relation to this legislation, the Treasury ruling number 425 of 9/10/00 declared and Finance Ministries in their press illegitimate the contents of article 25, statement of 3/4/00 made it known that Legislative decree 344/99. The article the tax relief foreseen by Law 461/98 excluded from liability to legal action and Legislative decree 153/99 was those clauses between banks and suspended in the light of a European customers relating to capitalisation of Commission inquiry into the question of interest due signed after the coming into such relief being in the form of State aid effect of the Inter-ministerial Committee as proscribed by article 88, paragraph 2 for Credit and Saving’s deliberation of of the European Community treaty. 22/4/00, enacting Legislative decree 344/99. The Constitutional Court b) Special rate mortgages (Law confined its judgement exclusively to a 133/99 and article 145 of Law criticism of the government in its accompanying 2001 Budget). enactment of the above-mentioned law. Article 29 of Law 133/99 foresees the re- In the light of the above and the negotiation of mortgage interest rates at inevitability of further legislation on the a reference rate equal to the system-wide matter Banca Carige has declined the few average (as defined by article 145 of the requests it has received from customers Budget Law), with the subsequent for the return of interest paid over ten charges, all or in part, to be covered by years as a result of the quarterly the State or public bodies. At 31/12/00 capitalisation of bank interest income. the interest rate relative to these The Bank does not view the Constitutional mortgages had yet to be re-negotiated Court’s sentence as an acceptance of the and the system-wide average rate of intrinsic reasonableness of article 25, interest had still to be calculated (the Legislative decree 344/99 but merely as provisions of the Law came into effect on a criticism of the government’s enactment 1/7/99). In the light of this, provisions to of amnesty-type legislation which goes a specific reserve were made of Lit. 2,728 beyond the confines of its powers as million corresponding to estimated stated by Law 128/98. The sentence charges for the period 1/7/99 to appears, rather than a declaration of the 31/12/00. Estimated charges for 2001 illegitimacy of the procedure of are around Lit. 1.5 bn. capitalisation of interest, proof of the need for new legislation to resolve the c) Fixed rate mortgages (Law question. decree 394/00). Law decree 394 of 29/12/2000 foresees the re-negotiation SECURITISATION OF CREDIT of specific categories of fixed-rate loans At the end of the year, in line with the with the stipulation of a new rate of provisions of Law 130/1999, the Bank interest. The re-negotiation, to be applied securitised without recourse a part of its bad to mortgage instalments after 2nd January loans portfolio. 2001, will generate reduced interest The gross balance sheet total of customer income of around Lit. 2 bn. loans was Lit. 566.4 bn, classified as bad
68 loans at 30/11/00 and backed either fully The senior and mezzanine securities were or in part by voluntary or legally-enforced placed with institutional investors and were guarantees. assigned the following rating: The ownership of the loans was transferred on 21/12/00 (with effect from 23/12/00) to ARGO Finance One Srl of Milan, a Moody’s Fitch IBCA special purpose vehicle established pursuant to Law 130/99 and enrolled in the general Class A Aaa AA list of companies held by the Italian Exchange Office as foreseen by article 106, Class B Aa1 AA Legislative decree 385/93; the vehicle will be used for one or more securitisation Both tranches are listed on the Luxembourg transactions as foreseen by article 3 of the stock market. above-mentioned Law 130/99. The lowest ranking class C bonds are fully The ownership of ARGO Finance One at subscribed by Banca Carige. present is as follows: 95% holding on the The class A and B bond issues are further part of a Dutch-registered foundation; 5% backed by a credit line granted by Banca holding on the part of Columbus Carige Carige to the special purpose vehicle of euro Immobiliare, a subsidiary of the Banca 15 million in case of temporary liquidity Carige Group. difficulties arising from late payment, in ARGO Finance One acquired the credits by addition to a limited recourse bond issue of an asset backed bond issue in three classes euro 84 million. (A, B and C) for Lit. 165.3 million. ARGO Finance One has also purchased an The company also proposed the further issue interest rate cap from Banca Carige with of C class bonds totalling euro 165.3 million premium paid at the moment of the issuing to cover issuance-related costs. of the bonds. The recovery of the securitised credit will be With regards to the accounting of this carried out on the part of ARGO by Banca securitised credit operation, at 31/12/2000 Carige according to the terms present in a a credit of Lit. 320 bn was granted to ARGO specific service contract between the parties. Finance One which is recorded at caption The funds recovered will be destined 40, ‘Loans and advances to customers’ exclusively for the securities issued and under item ‘ other non current account related costs. loans’. The bonds issued by ARGO Finance One After the subscription of class A and B bonds are as follows: on the part of institutional investors, and Class A ‘Senior’ bonds amounting to euro Class C on the part of Banca Carige on 40 million, floating rate indexed to Euribor at 27/3/2001 the credit was re-paid. 6 months + 0.60%, twice-yearly coupon; The reduction in the value of the loans ceded Class B ‘Mezzanine’ bonds amounting to (Lit. 120.6 bn) was recorded at caption 130 euro 70 million, floating rate indexed to ‘Reserves and issue premium’ in line with Euribor at 6 months + 0.45%, twice-yearly article 6, Law 130/99. The amount is coupon; entered in the income statement over five Class C ‘Junior’ bonds amounting to euro years in equal instalments starting from 56.5 million, fixed rate 4% plus variable 2000, the year in which the loans were remuneration, twice-yearly coupon. ceded. Potential risks for the Bank as a result of the operation are represented by the class C 69 bonds, the line of credit, the interest rate These financial statements were cap, and guarantees granted to the holders audited by KPMG SpA. The selection of the of class B bonds. These risks will be Bank’s auditors for the period 2000-2002 evaluated by constant monitoring of the was approved by the Shareholders’ Meeting actual results of recovery in comparison to of 27/4/00 pursuant to Legislative decree those scheduled. 58/90. The duties of the auditors for the The class C bonds fully subscribed by Banca period are the auditing of the Bank’s Carige have been included in the Bank’s financial statements, the consolidated investment securities portfolio. financial statements, and a limited review of the half yearly report at 30 June. Consolidated Financial Statements for the Banca Carige Group have been prepared.
70 PART A ACCOUNTING PRINCIPLES
SECTION 1 – trading securities quoted on organised markets are valued either at purchase The Accounting Policies are in compliance price or the average market price for the with law decree 87/92 and the Bank of last month, whichever is lower; Italy’s provisions of 30/7/92 and – trading securities not quoted on subsequent modifications and are the same organised markets are valued at as those used in the previous year, with the purchase price adjusted for market exception of the adoption of the new trends and issuer solvency. criterion for the handling of dividends on equity investments. The purchase price, determined according to the principle of daily weighted average, LOANS, GUARANTEES AND includes adjustments for the relevant quota COMMITMENTS of issue premium or discount accumulated Loans are stated at their estimated realizable during the period the securities are held. value and are determined according to Securities held at 1/12/91 and still in debtors’ solvency and the debt-paying portfolio at 30/6/2000 are valued at cost difficulty of the debtors’ home country. defined as the value of transfer to Banca The valuation of loans is made under the Carige at 1/12/91 and adjusted for issue application of either an analytic or lump-sum premium or discount pursuant to Legislative method. decree 719/94 and subsequent changes. The interest on overdue loans is adjusted by The original value of the securities is re- the portion of loans considered to be instated when the reasons for writing down irrecoverable. cease to apply. Reserves for loan losses, recorded under The possible transfer of securities from the “Liabilities”, have been created only to offset investment to trading securities portfolio is contingent credit risks. accounted for at book price on the Reserves for guarantees and commitments, transaction date calculated according to the recorded under “Liabilities” have been evaluation criteria applied to the portfolio of created to offset this particular kind of risk. origin. Securities transferred and still present in the portfolio at the balance sheet date are SECURITIES PORTFOLIO AND OFF- valued according to the evaluation criteria BALANCE SHEET TRANSACTIONS applied to the portfolio to which they are EXCLUDING THOSE IN CURRENCY destined. Investment securities Investment securities are valued at cost, Off balance sheet operations, adjusted on an accruals basis for the excluding those in currency difference between cost and their redemption at maturity and includes unamortized issue Unsettled securities transactions are premiums or discounts. evaluated according to the criteria of the In the event of long-term deterioration of the portfolio to which they are destined. issuers’ solvency, the securities are written Unsettled trading securities transactions are down. evaluated accordingly: The original value of investment securities is reinstated when the reasons for writing down a) with regards to commitments to cease to apply. purchase and commitments to sell which have the same underlying securities with Trading securities. the same nominal value, any positive 71 difference between the settlement price EQUITY INVESTMENTS of the commitment to purchase and the The Bank’s stock rights in relation to its settlement price of the commitment to subsidiaries are included under holdings. sell is recorded in the income statement; These rights, in the form of securities or not, b) the residual commitments to purchase are held for investment. are evaluated at either settlement price Holdings, both substantial and those in or market price whichever is lower; Group subsidiaries, are valued at purchase c) the residual commitments to sell are cost or subscription. With regard to evaluated at either settlement price or investments resulting from the transfer of book value, whichever is lower. assets on 1/12/91, the cost was estimated by a group of experts. Derivative contracts on securities, interest The cost is written down to reflect any rate etc., are evaluated accordingly: permanent loss in value. The original value is reinstated when the reasons for writing down a) contracts related to underlying equity ceased to apply. investments are evaluated at cost and The dividends of the subsidiaries are written down in the event of long-term recorded in the same accounting period in deterioration of the issuer's solvency; which the related profit accrued. b) trading derivatives contracts are The dividends on other equity investments evaluated at either cost or market value, are recorded in the accounting period in whichever is lower. Market value of which they were deliberated, usually contracts is that quoted at the last day of coinciding with the period of collection. the business year. Those contracts which are not quoted on organised markets but which can be evaluated according to FOREIGN CURRENCY ASSETS AND official parameters, are evaluated at LIABILITIES INCLUDING OFF- replacement cost at the last day of the BALANCE SHEET TRANSACTIONS period; Assets, excluding equity investments, and c) economically-linked trading contracts, liabilities expressed in foreign currencies are which are closely correlated both valued applying the spot rate at 31/12/000. technically and financially, are evaluated Equity investments expressed in foreign in the same way. The losses which currencies are valued according to the rate exceed connected gains are recorded in in force at the time of purchase. the income statement; Off-balance sheet transactions expressed in d) hedging contracts on trading securities foreign currencies are valued: are evaluated in the same way as the underlying; market value is the average – at the spot rate as of the last business of prices and parameters recorded in the day of the period in the case of unsettled last month of the period. Losses which spot contracts; exceed gains on securities or gains which – at the forward exchange rate as of the correspond to losses on securities are last business day of the period for recorded in the income statement; maturities corresponding to those of the e) hedging contracts on assets and contracts being valued, in the case of liabilities which are evaluated at cost are forward transactions. in turn evaluated at cost. In the case of on-balance sheet assets and liabilities linked to off-balance sheet assets
72 and liabilities, off-balance sheet items are Tangible fixed assets, including assets leased accounted for in a manner similar to the or to be leased, are depreciated on a accounting of on-balance sheet items. straight-line basis.
TANGIBLE FIXED ASSETS INTANGIBLE FIXED ASSETS Tangible assets are recorded at purchase Intangible fixed assets are, in those cases price plus related charges, and include foreseen by relevant legislation, recorded leased assets and those assets that are to be with the consent of the Board of Statutory leased. Auditors and are amortized on a straight-line The value of those assets transferred from basis. Start-up and improvement costs in Cassa di Risparmio di Genova e Imperia to addition to research and development costs Banca Carige on 1/12/91 was estimated by are amortised over a period not exceeding a group of experts. five years. The value of tangible fixed assets includes Intangible fixed assets are amortised revaluation in accordance with Laws according to the straight-line method in 575/75, 72/83, 413/91 (only for some constant annual charges over projected assets transferred by merged companies) useful life. and with reference to capital gains, Law Goodwill arising from the merger into Banca 218/90. Carige of Istituto di Credito Fondiario della Advances to supplies for the purpose of Liguria SpA, Mediocredito Ligure SpA, tangible fixed assets are included under Columbus Leasing Spa and Columbus tangible fixed assets. Domestic SpA is amortized, with the Statutory Depreciation is determined by using the Auditors’ consent, over eight years starting straight-line method over the useful life of from 1/7/94. The period was calculated on each category. the basis of residual goodwill stemming from Objects of art, being assets which conserve if the merger. not increase their value, are not amortized. Goodwill paid for the purchase of part of the Banco di Sicilia’s branch network (contract Included in this category are leased assets, in stipulated on 28/12/00 with effect 1/1/01) line with the equity method, and are will be amortised over 20 years from 2001, amortized as follows: corresponding to the average period of goodwill calculated for the branch network – assets leased from 1986 to 1987 are acquired. depreciated to the maximum extent foreseen for each type of user as PAYABLES permitted by tax law; Payables are recorded at face value with the – assets leased from 1988 to 1994 are exception of zero coupon and one coupon depreciated on a fixed percentage basis debt securities, which are recorded at a in compliance with Presidential decree value corresponding to net proceeds plus 917/86; accrued interest. – assets leased from 1995 onwards are depreciated as established in the relevant TERMINATION INDEMNITY financial amortization plan; Termination indemnity is in accordance with – assets to be leased and assets stolen or current legislation. destroyed are not amortized.
73 RESERVES FOR RISKS AND CHARGES – RESERVES FOR TAXATION Tax reserves stem from provisions for direct taxation, deferred tax liabilities, indirect taxation and other unforeseen events such as risk to liabilities after litigation.
OTHER TAX ASPECTS – DEFERRED TAX: POSITIVE AND NEGATIVE EFFECTS The calculation of deferred tax is made on the basis of the equity method with reference to the timing differences existing between the value attributed to an asset or liability under accounting criteria and the value attributed to the same for the calculation of tax. Tax advanced is recorded under assets subject to the condition that, for prudential reasons, there is a reasonable expectation of realising, over a period of five years, taxable income sufficient for its recovery. The recording of liabilities for taxes payable in the future is subject to the condition that there is a possibility of the liability to tax occurring. The treatment of deferred tax in these financial statements is in accordance with the Bank of Italy's instructions dated 3/8/99.
SUPPLEMENTARY PENSION FUND Provisions have been made to guarantee sufficient funds as stipulated by both the Supplementary Pension Agreement, according to established prudential criteria.
ACCRUALS AND DEFERRALS Accruals and deferrals are calculated in accordance with the matching principle.
74 SECTION 2
TAX-RELATED ADJUSTMENTS AND PROVISIONS
2.1 Tax Adjustments
2.1.1 During 1993, Banca Carige’s holding in the subsidiary Columbus Carige Immobiliare SpA was written down by Lit. 466 million, a loss not regarded as permanent. During 1996 and 1997, write backs on the holding totalled Lit. 259 million.
2.1.2 Depreciation allowances on leased assets at 31/12/94 led to an increased depreciation fund at 31/12/00 of Lit. 1,053 mllion and reduced allocation for the six months of Lit. 795 million. Consequently there was a decrease in net assets of Lit. 607 million and an improved trading result of Lit. 458 million (before tax). Details are given at part B, section 4 of the explanatory notes.
2.2 Tax provisions
No tax provisions were made during the year.
75 PART B BALANCE SHEET
LOANS
The Bank’s loans portfolio, summarized in this section, amounts to Lit. 14,246,290 million and is analysed below: 31/12/00 31/12/99 million % million % – Cash in hand, balances with central banks and post offices (caption 10) 216,844 1.5 157,432 1.3 – Loans and advances to credit institutions (caption 30) 1,863,408 13.1 1,198,335 10.0 – Loans and advances to customers (voce 40) 12,166,038 85.4 10,583,570 88.7 Total 14,246,290 100.0 11,939,337 100.0
Change 31/12/00 31/12/99 absolute % CAPTION 10 “CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES” 216,844 157,432 59,412 37.7
Caption 10 detailed by technical form: 31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Currency Currency Cash 210,028 4,511 214,539 150,997 3,961 154,958 Promissory notes of Bank of Italy and postal orders and cheques 2,044 - 2,044 2,124 - 2,124 Deposits with - central banks ------post offices 249 12 261 350 - 350 Total 212,321 4,523 216,844 153,471 3,961 157,432
77 Change 31/12/00 31/12/99 absolute % 1.1 CAPTION 30 "LOANS AND ADVANCES TO CREDIT INSTITUTIONS" 1,863,408 1,198,335 665,073 55.5 (a) deposits with central banks 115,166 74,141 41,025 55.3 (b) bills elegible for refinancing by central banks - - - - (c) repurchase agreements - - - - (d) loan of securities - - - -
Caption 30 detailed by technical form and currency is the following:
31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Nominal value Currency Currency Deposits with central banks 115,166 - 115,166 74,141 - 74,141 – Compulsory reserves 115,166 - 115,166 74,141 - 74,141 Deposits with banks 1,543,188 218,183 1,761,371 992,530 152,324 1,144,854 – Deposits 1,120,150 139,515 1,259,665 676,859 122,004 798,863 – Repurchase agreements ------– Discounted notes - - - 39,367 - 39,367 – Overdraft facilities 265,606 76,454 342,060 84,831 19,548 104,379 – Loans (Financial backing) 133,374 1,431 134,805 166,686 10,160 176,846 – Long term loans 429 - 429 439 - 439 – Other 23,629 783 24,412 24,348 612 24,960 1,658,354 218,183 1,876,537 1,066,671 152,324 1,218,995 (–) Total specific allowances 11,816 1,313 13,129 14,512 6,148 20,660 Total 1,646,538 216,870 1,863,408 1,052,159 146,176 1,198,335 of which: – resident 1,181,661 95,240 1,276,901 552,878 49,080 601,958 – non-resident 464,877 121,630 586,507 499,281 97,096 596,377
The caption includes Lit. 272,423 million related to the branches purchased by Banca Carige from Banco di Sicilia
Compulsory reserves in currency refer to those provisions made to the Bank of France in accordance to the regulations affecting Carige as a result of its branch in Nice. Caption 30 is net of lump-sum allowances related to loans exposed to country risks for Lit. 13,129 million; allowances amount to 30% of nominal value of non guaranteed loans issued to banks residing in non-OECD countries; unsecured loans issued to Russian banks were written by 60%.
Change 31/12/00 31/12/99 absolute % 1.2 CAPTION 40 “LOANS AND ADVANCES TO CUSTOMERS” 12,166,038 10,583,570 1,582,468 15.0 (a) bills eligible for refinancing by central banks - - - - (b) repurchase agreements - - - - (c) loan of securities - - - -
Caption 40 detailed by technical form is the following:
78 31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Nominal value Currency Currency Discounted notes 80,014 - 80,014 71,185 - 71,185 Advances with recourse 412,317 - 412,317 343,357 - 343,357 Overdrafts 1,961,436 33,166 1,994,602 1,617,533 13,273 1,630,806 Other non-overdrafts loans 2,971,652 406,638 3,378,290 2,492,245 337,549 2,829,794 Loans backed by pledge assets 18,904 - 18,904 21,949 - 21,949 Loans 5,608,236 216,651 5,824,887 4,774,399 149,687 4,924,086 Salary backed loans 15,120 - 15,120 10,107 - 10,107 Consumer credit loans 10,961 - 10,961 10,240 - 10,240 Factoring 217,241 - 217,241 210,485 - 210,485 Loans for leased assets 26,315 - 26,315 8,633 - 8,633 Bad loans 299,560 1,050 300,610 745,364 908 746,272 Repurchase agreements ------Other 84,079 155 84,234 117,483 228 117,711 11,705,835 657,660 12,363,495 10,422,980 501,645 10,924,625 (–) Total specific allowances 196,201 1,256 197,457 340,142 913 341,055 - Bad loans 154,529 796 155,325 289,893 518 290,411 - Other 41,672 460 42,132 50,249 395 50,644 Total 11,509,634 656,404 12,166,038 10,082,838 500,732 10,583,570 of which: – resident 11,266,199 627,721 11,893,920 9,843,495 456,101 10,299,596 – non-resident 243,435 28,683 272,118 239,343 44,631 283,974
The caption includes Lit. 112,961 million related to the branches purchased by Banca Carige from Banco di Sicilia. Sub- caption “Other non-current account loans” includes the credit extended to Argo Finance One (Lit. 320 bn) during the course of the securitisation operation carried out by Banca Carige. . Allowances were deducted from gross value of loans as shown:
31/12/00 31/12/99 – analytic allowances 188,955 331,510 – lump-sum allowances 8,502 9,545 country risks 466 405 other 8,036 9,140 Total 197,457 341,055
Analytic allowances were made for bad loans, rescheduled loans and for the main watchlist positions. Rescheduled loans were evaluated analytically calculating future flows on the basis of the difference between renegotiated interest rates and the annual average yield for interbank company loans for 2000. Lump-sum allowances were made for country risks (with the same criteria indicated on page 83 for loans and advances to credit institutions) and for the remaining part of watchlists. In the light of the Bank’s prudential valuation of its complete loan portfolio, provisions calculated by a lump-sum method concerning other “in bonis” loans were deemed unnecessary.
79 Change 31/12/00 31/12/99 absolute % 1.3 SECURED LOANS TO CUSTOMERS 6,929,658 6,867,695 61,963 0.9 (a) by mortgages 4,082,124 4,181,536 -99,412 -2.4 (b) by pledges on: 276,848 295,746 -18,898 -6.4 1. Cash deposits 4,568 13,476 -8,908 -66.1 2. Securities 245,019 253,257 -8,238 -3.3 3. Other valuables 27,261 29,013 -1,752 -6.0 (c) by guarantees from: 2,570,686 2,390,413 180,273 7.5 1. Governments 157 244 -87 -35.7 2. Other public entities 16,435 16,650 -215 -1.3 3. Banks 28,345 40,034 -11,689 -29.2 4. Other operators 2,525,749 2,333,485 192,264 8.2
This detail does not include loans to government and public bodies.
Change 31/12/00 31/12/99 absolute % 1.4 BAD LOANS (including interest on overdue loans) 145,285 455,861 -310,576 -68.1
This amount represents the total exposure to customers in a state of insolvency or similar, with the following detail:
31/12/00 31/12/99 specific specific gross value net value gross value net value allowances allowances - principal 234,328 89,043 145,285 548,912 93,051 455,861 of which bad leasing loans 1,866 748 1,118 2,116 589 1,527 - interest 66,282 66,282 - 197,360 197,360 - of which bad leasing loans 519 519 - 842 842 - Total 300,610 155,325 145,285 746,272 290,411 455,861
The total of Lit. 234,328 million is inclusive of Lit. 6,860 million related to the purchase of branches from Banco di Sicilia. Reduction in bad loans totals is as result of the ceding of Lit. 566,380 million in bad loans effected by securitisation. Interest on overdue bad loans was completely written down, in line with prudential criteria. Bad leasing loans include rental expiries and subsequent interest on delayed payment both for contracts resolved by or awaiting legal proceedings and those concerning counterparty insolvency. Assets related to bad leasing loans are included in caption 100, “Tangible fixed assets” and amount to Lit. 3,931 million (gross value of underlying assets of Lit. 6,233 million, write-downs for Lit. 2,302 million) of which Lit. 3,888 million is represented by latent bad loans. The valuation of this exposure takes into account value on realisation along with existing guarantees. The credit exposure therefore totalled Lit. 907 million, prudentially covered by “Reserves for risks and charges - other reserves” at Caption 80 c). Change 31/12/00 31/12/99 absolute % 1.5 INTEREST ON OVERDUE LOANS 19,288 19,108 180 0.9 (a) bad loans - - - - (b) other loans 19,288 19,108 180 0.9
Caption (a) “bad loans” is net of interest on overdue loans for Lit. 66,282 million and completely written down. Caption (b) “other loans” includes interest on overdue performing loans. This caption is net of Lit. 2,559 million in interest on non-performing loans recorded and written down and Lit. 99,046 million in credits attributable to tax-payers defaulting on interest arrears relative to the ex-Tax Collection Service, which has been written off.
80 The following table illustrates the situation of credits at risk and related provisions as required by the Bank of Italy in its letter dated 14/12/98 concerning increased transparency in bank balance sheets.
Cash credits at 31/12/2000
Banks
Gross Specific CATEGORIES/BALANCES Net value value allowances A. Credits at risks 42,734 13,129 29,605 A.1 Bad loans - - - A.2 Watchlists - - - A.3 Credits undergoing restructuring - - - A.4 Restructured loans - - - A.5 Non-guaranteed credits towards countries at risk 42,734 13,129 29,605 B. Performing credits 1,833,803 - 1,833,803
The credits presented in the table refer to balance sheet asset caption 40 "Loans and advances to customers" and to credits related to leasing transactions which totalled Lit. 502,680 million at 31/12/00. In particular, Lit. 3,888 million is in the form of bad loans and is covered for Lit. 907 million by liabilities caption 80c "Reserves for loan losses - other reserves". Leasing transactions are included at assets caption 100 " Tangible assets" for a total of Lit. 541,587 million.
Customers
Gross Specific CATEGORIES/BALANCES Net value value allowances A. Credits at risks 618,619 197,457 421,162 A.1 Bad loans 304,498 155,325 149,173 A.2 Watchlists 296,598 38,857 257,741 A.3 Credits undergoing restructuring 242 - 242 A.4 Restructured loans 15,727 2,809 12,918 A.5 Non-guaranteed credits towards countries at risk 1,554 466 1,088 B. Performing credits 12,247,556 - 12,247,556
81 Doubtful loans Customers Country Loans subject Rescheduled risk non- CATEGORIES/BALANCES Bad loans Watchlists to rescheduling loans guaranteed loans A. Total opening exposure at 31/12/99 751,090 359,963 1,228 21,263 1,349 A.1 of which: interest on overdue loans 197,360 13,245 - - - B. Increases 288,286 124,716 242 63 216 B.1 ex-performing loans 101,058 95,510 242 - 2 B.2 interest on overdue loans 34,854 3,025 - - - B.3 transfer from other doubtful loan categories 122,744 - - - - B.4 other increases 29,630 26,181 - 63 214 C. Decreases 734,878 188,081 1,228 5,599 11 C.1 re-performing credits 3,859 40,120 1,228 386 - C.2 write offs 339,143 3,363 - 61 - C.3 payments received 68,360 6,320 - - - C.4 gains from ceding 320,000 - - - - C.5 transfer to other doubtful loan categories - 118,372 - 4,372 - C.6 other decreases 3,516 19,906 - 780 11 D. Total closing exposure at 31/12/2000 304,498 296,598 242 15,727 1,554 D.1 of which: interest on overdue loans 66,282 11,067 - - -
Sub-caption C4 “Decreases - gains from ceding” includes Lit. 320 bn relating to the securitisation of bad loans carried out by Banca Carige; sub-caption c2 “Decreases - write offs” includes the difference between the book value of credits and the amount received from their ceding (Lit. 120, 585 million).
Banks Country Loans subject Rescheduled risk non- CATEGORIES/BALANCES Bad loans Watchlists to loans guaranteed rescheduling loans A. Total opening exposure at 31/12/99 - - - - 55,069 A.1 of which: interest on overdue loans - - - - - B. Increases - - - - 1,608 B.1 ex-performing loans - - - - 677 B.2 interest on overdue loans - - - - - B.3 transfer from other doubtful loan categories - - - - - B.4 other increases - - - - 931 C. Decreases - - - - 13,942 C.1 re-performing credits - - - - - C.2 write offs - - - - 4,489 C.3 payments received - - - - 8,373 C.4 gains from ceding - - - - - C.5 transfer to other doubtful loan categories - - - - - C.6 other decreases - - - - 1,080 D. Total closing exposure at 31/12/2000 - - - - 42,735 D.1 of which: interest on overdue loans - - - - -
82 Total value adjustments Customers Country Loans subject Rescheduled risk non- Performing CATEGORIES/BALANCES Bad loans Watchlists to loans guaranteed loans rescheduling loans A. Total opening adjustments at 31/12/99 290,411 43,105 - 7,134 405 - A.1 of which: interest on overdue loans 197,360 2,876 - - - - B. Increases 210,680 16,720 - 180 61 1,831 B.1 adjustments 87,773 16,719 - 180 61 1,831 B.1.1 of which: interest on overdue loans 14,609 916 - - - - B.2 amounts from credit risk fund 5,000 - - - - - B.3 transfer from other loan categories 21,396 1 - - - - B.4 other increases 96,511 - - - - - C. Decreases 345,766 20,968 - 4,505 - 1,831 C.1 recoveries stemming from evaluation 208 - - 71 - - C.1.1 of which: interest on overdue loans ------C.2 recoveries stemming from payments received 6,415 581 - - - - C.2.1 of which: interest on overdue loans 4,940 - - - - - C.3 write offs 339,143 3,363 - 61 - 1,831 C.4 transfer from other loan categories - 17,024 - 4,373 - - C.5 other decreases ------D. Total closing adjustments at 31/12/2000 155,325 38,857 - 2,809 466 - D.1 of which: interest on overdue loans 66,282 2,559 - - - - Sub-caption B1 “Increases - adjustments” includes Lit. 24,117 million corresponding to 1/5th of the securitisation-related loss.
The remaining 4/5ths (Lit. 96,468 million) is stated at sub-caption B4 “Increases - other increases” includes amounts stemming from the first full consolidation of the companies belonging to the former Cassa di Risparmio di Savona Group Banks
Country Loans subject Rescheduled risk non- Performing CATEGORIES/BALANCES Bad loans Watchlists to loans guaranteed loans rescheduling loans A. Total opening adjustments at 31/12/99 - - - - 20,660 - A.1 of which: interest on overdue loans ------B. Increases - - - - 569 - B.1 adjustments - - - - 569 - B.1.1 of which: interest on overdue loans ------B.2 amounts from credit risk fund ------B.3 transfer from other loan categories ------B.4 other increases ------C. Decreases - - - - 8,100 - C.1 recoveries stemming from evaluation - - - - 149 - C.1.1 of which: interest on overdue loans ------C.2 recoveries stemming from payments received - - - - 3,462 - C.2.1 of which: interest on overdue loans ------C.3 write offs - - - - 4,489 - C.4 transfer from other loan categories ------C.5 other decreases ------D. Total closing adjustments at 31/12/2000 - - - - 13,129 - D.1 of which: interest on overdue loans ------
83 SECTION 2
SECURITIES
The securities held by the Bank amount to Lit. 4,981,114 million and are analysed below:
31/12/00 31/12/99 million % million % – Treasury certificates and other bills eligible for refinancing with central banks (caption 20) 838,802 16.8 1,856,585 37.6 – Bonds and other fixed-income securities (caption 50) 3,868,865 77.7 2,800,718 56.8 – Shares, quotas and other equity securities (caption 60) 273,447 5.5 276,590 5.6 Total 4,981,114 100.0 4,933,893 100.0 of which: – Investment securities 744,820 15.0 746,987 15.1 – Trading securities 4,236,293 85.0 4,186,906 84.9
Investment securities portfolio was constituted in accordance with Board of Directors resolution of 27/3/95 afterwards modified on 6/12/99, CONSOB resolution of 15/2/95 and Bank of Italy resolution of 1/3/95.
Change 31/12/00 31/12/99 absolute % 2.1 INVESTMENT SECURITIES 744,820 746,987 -2,167 -0.3
31/12/00 31/12/99 Book Market Book Market value value value value 1. Certificates of indebtedness 744,820 710,288 746,987 721,813 1.1 Government securities 682,431 653,344 681,231 659,055 – listed 682,431 653,344 681,231 659,055 – unlisted - - - - 1.2 Other securities 62,389 56,944 65,756 62,758 – listed 54,958 50,042 7,639 6,724 – unlisted 7,431 6,902 58,117 56,034 2. Shares and equity securities - - - - – listed - - - - – unlisted - - - - Total 744,820 710,288 746,987 721,813
Book value of investment securities comprises the difference, on the basis of “pro rata temporis” criteria, between cost and redemption value, including issue premium or discount. Market value is the average price recorded during the first six months of the year. The difference between market and book value (Lit. 34,532 million) represents the potential losses for the portfolio. The positive and negative differences between book value and re-payment value at maturity total Lit. 3,530 million and Lit. 3,708 million, respectively. These differences were calculated separately for each category.
84 Book Redemption Positive Negative value value differences differences 1. Listed certificates of indebtedness 737,388 737,655 3,440 3,707 Public bodies 682,431 682,535 3,439 3,543 Banks 48,720 48,877 1 158 Other 6,237 6,243 - 6 2. Unlisted certificates of indebtedness 7,432 7,343 90 1 Public bodies - - - - Banks 2,809 2,719 90 - Other 4,623 4,624 - 1 Total 744,820 744,998 3,530 3,708
2.2 CHANGES IN INVESTMENT SECURITIES
31/12/00 31/12/99 A. Opening balances 746,987 552,803 B. Increases 2,171 741,720 B1. Purchases - - B2. Writebacks - - B3. Transfers from trading portfolio - 739,541 B4. Other changes 2,171 2,179 C. Decreases 4,338 547,536 C1. Sales - - C2. Redemptions 3,786 73,439 C3. Adjustments including - - - permanent writedowns - - C4. Transfers to trading portfolio - 472,845 C5. Other changes 552 1,252 D. Closing balances 744,820 746,987
Activity in the investment securities portfolio was carried out in accordance with CONSOB communication no. 95001286 of 15/2/95
As shown in the previous table, no transfers from or to the investment securities portfolio were made during 2000.
Captions “Other changes” are analysed below:
1. Increases 2,171 Exchange-rate gains 460 Gains on securities 16 Intrinsic interest (1) 1,695 2. Decreases 552 Exchange-rate losses - Losses on securities 37 Intrinsic interest (2) 515
(1) Includes the share for the period of interest referring to discount bonds and of issuing and negotiation spreads. (2) Includes the share for the period of negotiation spreads.
85 Change 31/12/00 31/12/99 absolute % 2.3 TRADING SECURITIES 4,236,293 4,186,906 49,387 1.2
31/12/00 31/12/99 Book Market Book Market value value value value 1. Certificates of indebtedness 3,962,846 4,037,537 3,910,316 4,002,807 1.1 Government securities 2,024,145 2,039,959 2,721,802 2,742,817 – listed 2,019,456 2,035,270 2,721,802 2,742,817 – unlisted 4,689 4,689 - - 1.2 Other securities 1,938,701 1,997,578 1,188,514 1,259,990 – listed 1,539,632 1,593,335 144,443 200,555 – unlisted 399,069 404,243 1,044,071 1,059,435 2. Shares and equity securities 273,447 278,835 276,590 291,285 – listed 216,358 217,888 173,238 178,411 – unlisted 57,089 60,947 103,352 112,874 Total 4,236,293 4,316,372 4,186,906 4,294,092
The difference between market value and book value represents potential non-recorded capital gains for the period and amounts to Lit. 80,079 million, of which Lit. 66,305 million related to hedging forward transactions (section 10.5).
2.4 CHANGES IN TRADING SECURITIES
31/12/00 31/12/99 A. Opening balances 4,186,906 5,092,452 B. Increases 16,306,995 15,516,427 B1. Purchases 16,125,162 14,876,362 - Certificates of indebtedness 15,185,057 14,492,789 . Government securities 9,672,981 11,667,763 . other securities 5,512,076 2,825,026 - Shares and other equity securities 940,105 383,573 B2. Writebacks 5,114 14,856 B3. Transfers from investment portfolio - 472,845 B4. Other changes 176,719 152,364 C. Decreases 16,257,608 16,421,973 C1. Sales 16,137,324 15,636,698 - Certificates of indebtedness 15,191,683 15,321,411 . Government securities 10,402,367 13,295,536 . other securities 4,789,316 2,025,875 - Shares and other equity securities 945,641 315,287 C2. Adjustments 77,396 45,734 C3. Transfers to investment portfolio - 739,541 C4. Other changes 42,888 - D. Closing balances 4,236,293 4,186,906
86 Details of recognized losses are as follows:
31/12/00 31/12/99 1. Certificates of indebtedness 25,393 23,390 1.1Government securities 5,789 11,525 1.2Other securities 19,604 11,865 2. Shares and equity securities 52,003 22,344 Total 77,396 45,734
Captions “Other changes” are analysed below:
1. Increases 176,719 Exchange-rate gains 28,298 Gains on securities 120,762 Intrinsic interest (1) 27,659 2. Decreases 42,888 Exchange-rate losses 12,804 Losses on securities 30,084
(1) Includes the share for the period of interest referring to discount bonds and of issuing spreads.
87 SECTION 3
EQUITY INVESTMENTS
Equity investments amount to Lit. 1,190,969 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Equity investments (caption 70) 104,641 8.8 531,505 50.2 – Investments in Group companies (caption 80) 1,086,328 91.2 527,724 49.8 Total 1,190,969 100.0 1,059,229 100.0 including: . significant investments 1,129,111 94.8 1,002,045 94.6 . other investments 61,858 5.2 57,184 5.4
Change 31/12/00 31/12/99 absolute % 3.1 SIGNIFICANT INVESTMENTS 1,129,111 1,002,045 127,066 12.7
Name Location of Stockholders' Net income % Book registered office equity (loss) ownership value A.Subsidiary companies (1) (caption 80) 1. Galeazzo Srl (2) Genoa 8,696 241 100.00 7,428 2. Columbus Carige Immobiliare SpA Genoa 39,178 -509 99.98 39,783 3. Cassa di Risparmio di Savona SpA Savona 328,640 16,601 95.90 431,538 4. Carige Vita Nuova SpA Genoa 94,815 5,510 92.81 249,450 5. Immobiliare Ettore Vernazza SpA (3) Genoa 9,636 1,768 90.00 60,341 6. Levante Norditalia Assicurazioni SpA Milan 193,688 607 87.01 182,171 7. Centro Fiduciario SpA (4) Genoa 1,611 306 66.28 612 8. Banca del Monte di Lucca SpA Lucca 49,199 1,416 51.00 115,005 Total 1,086,328 B. Companies subject to significant influence (included in caption 70) 1. Frankfurter Bankgesellschaft AG (5) Frankfurt 43,911 43 47.50 18,775 2. Eptaconsors SpA (6) Milan 309,195 194,687 20.24 24,008 Total 42,783
(1) Captions are taken from the Board of Directors’ Report at 31/12/2000. (2) The company holds 0.02% of capital stock of Columbus Carige Immobiliare SpA. (3) The company holds 10% of its own shares. (4) Cassa di Risparmio di Savona SpA also holds 20% of capital stock. (5) Previously “Bankenunion AG”. The change of name was approved by the Extraordinary Shareholders’ meeting of 29/6/2000 and took effect on 28/7/2000. Captions are taken from financial statement approved at 30/9/2000. (6) Captions are taken from the Board of Directors’ Report at 31/12/2000.
88 The evaluation of those companies subject to significant influence by the equity method determines a value of Lit. 737,837 million, Lit. 391,274 million lower than book value.
Name Book Share of Difference value stockholders'equity (a) (b) (b-a) Cassa di Risparmio di Savona SpA 431,538 315,169 -116,369 Banca del Monte di Lucca SpA 115,005 25,092 -89,913 Carige Vita Nuova SpA 249,450 87,997 -161,453 Immobiliare Ettore Vernazza SpA 60,341 8,673 -51,668 Levante Norditalia Assicurazioni SpA 182,171 168,536 -13,635 Columbus Carige Immobiliare SpA 39,783 39,168 -615 Centro Fiduciario SpA 612 1,068 456 Galeazzo Srl 7,428 8,696 1,268 Frankfurter Bankgesellschaft AG 18,775 20,858 2,083 Eptaconsors SpA 24,008 62,580 38,572 1,129,111 737,837 -391,274-391,274
The most significant negative differences between net assets for the year and balance sheet value stem from goodwill regarding holdings in Cassa di Risparmio di Savona SpA, in Banca del Monte di Lucca SpA and in the insurance companies Levante Norditalia Assicurazioni SpA and Carige Vita Nuova SpA as well as greater real estate values than those recorded in the subsidiary, Ettore Vernazza’s balance sheet. Valuation of the Bank’s total holdings applying the equity method rather than cost, would generate capital losses of Lit. 434,110 million and capital gains of Lit. 862,879 million, including valuation of Carige’s holding in the Bank of Italy, of Lit. 801,585 million.
Change 31/12/00 31/12/99 absolute % 3.2 AMOUNTS DUE TO AND FROM GROUP COMPANIES (a) Assets 86,176 39,676 46,500 … 1. Amounts due from banks including: 51,220 - 51,220 … – subordinated - - - - 2. Amounts due from financial institutions - - - - including: – subordinated - - - - 3. Amounts due from other customers 24,719 29,676 -4,957 -16.7 including: – subordinated - - - - 4. Bonds and other fixed-income securities 10,237 10,000 237 2.4 including: – subordinated 9,939 10,000 -61 -0.6 (b) Liabilities 521,949 90,312 431,637 … 1. Amounts due to banks 291,084 10,761 280,323 … 2. Amounts due to financial institutions 1,213 858 355 41.4 3. Amounts due to other customers 195,546 72,833 122,713 … 4. Securities issued 34,106 5,860 28,246 … 5. Subordinated liabilities - - - - (c) Guarantees and Commitments 11,060 6,300 4,760 75.6 1. Guarantees 11,060 6,300 4,760 75.6 2. Commitments - - - -
89 Change 31/12/00 31/12/99 absolute % 3.3 AMOUNTS DUE TO AND FROM OTHER COMPANIES (a) Assets 447,132 529,751 -82,619 -15.6 1. Amounts due from banks including: 297,555 274,464 23,091 8.4 – subordinated - - - - 2. Amounts due from financial institutions 34,753 92,255 -57,502 -62.3 including: – subordinated - - - - 3. Amounts due from other customers 114,824 150,428 -35,604 -23.7 including: – subordinated - - - - 4. Bonds and other fixed-income securities - 12,604 -12,604 … including: – subordinated - - - - (b) Liabilities 473,477 1,192,834 -719,357 -60.3 1. Amounts due to banks 282,991 622,446 -339,455 -54.5 2. Amounts due to financial institutions 178,319 486,385 -308,066 -63.3 3. Amounts due to other customers 11,892 48,517 -36,625 -75.5 4. Securities issued 275 35,486 -35,211 -99.2 5. Subordinated liabilities - - - - (c) Guarantees and Commitments 415,903 245,889 170,014 69.1 1. Guarantees 411,062 245,889 165,173 67.2 2. Commitments 4,841 - 4,841 …
Amounts due from banks include Lit. 114,370 million related to Compulsory Reserve with the Bank of Italy. Amounts due to banks include Lit. 282,709 million related to repurchase agreements with the Bank of Italy.
Change 31/12/00 31/12/99 absolute % 3.4 CAPTION 70 "EQUITY INVESTMENTS" 104,641 531,505 -426,864 -80.3-80.3 (a) in banks 39,168 479,473 -440,305 -91.8 1. listed 9,432 - 9,432 … 2. unlisted 29,736 479,473 -449,737 -93.8 (b) in financial institutions 34,973 35,692 -719 -2.0 1. listed - - - - 2. unlisted 34,973 35,692 -719 -2.0 (c) others 30,500 16,340 14,160 86.7 1. listed 1,401 5,778 -4,377 -75.8 2. unlisted 29,099 10,562 18,537 …
Caption includes significant investments outside the Group as listed at 3.1/B and other equity investments. The decrease in the item is a result of the incorporation into the Banca Carige Group of Cassa di Risparmio di Savona, authorised by the Bank of Italy on 17/4/00. The caption includes tax-deferred capital losses and gains pursuant to Law 218/90 of, respectively, Lit. 1,335 million and Lit. 4,287 million.
Write-downs law 218/90 Significant investments 1,335 - Eptaconsors SpA 1,335 Other participating interests -- - Istituto per l’Enciclopedia della Banca e della Borsa SpA - Total 1,335
90 Revaluations Law 218/90 Significant investments 1,012 - Frankfurter Bankgesellschaft AG 1,012 Other participating interests 3,275 - Intesa Asset Management SpA 1,999 - Banca d’Italia 937 - Servizi Interbancari SpA 194 - Monte Titoli SpA 108 - Swift 20 - Centrale dei bilanci Srl 12 - Ligurcapital SpA 2 - Sia SpA 2 - Bic Liguria SpA 1 Total 4,287
Change 31/12/00 31/12/99 absolute % 3.5 CAPTION 80 "INVESTMENTS IN GROUP COMPANIES" 1,086,328 527,724 558,604 … (a) in banks 546,543 115,005 431,538 … 1. listed - - - - 2. unlisted 546,543 115,005 431,538 … (b) in financial institutions 613 547 66 12.1 1. listed - - - - 2. unlisted 613 547 66 12.1 (c) others 539,172 412,172 127,000 30.8 1. listed - - - - 2. unlisted 539,172 412,172 127,000 30.8
The increase over the previous year is principally a result of the incorporation into the Banca Carige Group of Cassa di Risparmio di Savona, authorised by the Bank of Italy on 17/4/00. The book value includes recoveries of revaluations in accordance with Law 218/90 for Lit. 6,279 million, detailed as follows:
Recoveries revaluations L. 218/90 - Galeazzo Srl 6,208 - Centro Fiduciario SpA 71 Total 6,279
91 3.6 CHANGES IN PARTICIPATING INTERESTS 3.6.1 INVESTMENTS IN GROUP COMPANIES 31/12/00 31/12/99 A. Opening balances 527,724 282,877 B. Increases 558,604 245,227 B1. Purchases 127,066 245,227 B2. Recoveries - - B3. Revaluations - - B4. Other changes 431,538 - C. Decreases - 380 C1. Sales - 380 C2. Write-downs - - including: - permanent write-downs - - C3. Other changes - - D. Closing balances 1,086,328 527,724 E. Total revaluations - - F. Total write-downs 207 207
Details of purchases and all variations are given below:
PURCHASES CENTRO FIDUCIARIO C.F. SPA Purchase of 25,000 ordinary shares, nominal unit value Lit. 1,000, unit price Lit. 2,610. (Variation in our shareholding from 61.280% to 66.280%) 66
COLUMBUS CARIGE IMMOBILIARE SPA Subscription of 10,000 new shares, nominal unit value Lit. 1,000 each. (Variation in our shareholding from 99,967% to 99,975%) 10,000
CARIGE VITA NUOVA SPA Purchase of 35,600,000 ordinary shares, nominal unit value Lit. 1,000 each, for a total price of Lit. 117 bn. (Variation in our shareholding from 52.809% to 92,809% 117,000. Total purchases 127,066
OTHER CHANGES
CASSA DI RISPARMIO DI SAVONA SPA Inclusion of our holding within the Group. (Our shareholding: 95.901%) 431,538
Total other changes 431,538
92 3.6.2 OTHER PARTICIPATING INTERESTS 31/12/00 31/12/99 A. Opening balances 531.505 278.874 B. Increases 24.532 289.509 B1. Purchases 20.448 282.634 B2. Recoveries - 1.953 B3. Revaluations - - B4. Other changes 4.084 4.922 C. Decreases 451.396 36.878 C1. Sales 17.798 29.888 C2. Write-downs 1.708 2.842 including: - permanent write-downs 1.708 2.842 C3. Other changes 431.890 4.148 D. Closing balances 104.641 531.505 E. Total revaluations - - F. Total write-downs 20.236 20.398
Detail of purchases and all variations are given below:
PURCHASES FINCANTIERI CANTIERI NAVALI ITALIANI SPA Subscription of 14,999,994 ordinary shares, nominal unit value Lit. 1,000, for an overall price of Lit. 14,999,994,000. (Our shareholding: 2.308%) 15,000
IMMOCRI SPA Purchase of 4,152,773 ordinary share, nominal unit value Lit. 1,000, for an overall price of Lit. 5,447,845,170. (Our shareholding: 3,525%) 5448
Total purchases 20,448
OTHER CHANGES
FINMECCANICA SPA Profit from sale of 2,439,948 shares 3,537
ANTOLA E PENNA LEADER SRL Contribution to cover costs borne by the company during 1998 and 1999 26
SOCIETA’ CONSORTILE PER IL DIPLOMA DI GIURISTA DI IMPRESA Amount recognised as our quota in contribution for covering losses related to 1998 and 1999 20
93 I.C.C.R.I. BANCA FEDERALE EUROPEA SPA Profit from sale of 28,929 shares 122
SOFIPA SPA Profit from sale of 57,348 shares 311
SOCIETA’ PER I SERVIZI BANCARI SPA Increased shareholding resulting from the sale of this area of activity by Servizi Interbancari SpA 68
Total other changes 4,084
SALES
SAT – SOCIETA’ AUTOSTRADA TIRRENICA SPA Sale of 141,800 shares, nominal unit value Lit. 300 for overall price of Lit. 37,577,000. (total release of our holding) 38
FINMECCANICA SPA Sale of 2,439,948 shares, nominal unit value Lit. 1,000 for overall price of Lit. 7,913,812,278. (total release of our holding) 7,914
I.C.C.R.I. BANCA FEDERALE EUROPEA SPA Sale of 28,929 shares, nominal unit value Lit. 200,000 for overall price of Lit. 8,888,236,057. (total release of our holding) 8,888
SOFIPA SPA Sale of 57,348 shares, nominal value Lit. 10,000 each, total price Lit. 957,539,556 (Total sale) 958
Total sales 17,798
WRITE-DOWNS
ME.T.IM. NORD-OVEST SPA in liquidation 21
C.I.V. SPA 29
SOCIETA’ ZONA FRANCA GENOVA SRL 1
ISTITUTO ENCICLOPEDIA BANCA E BORSA. SPA 2
G.A.L. AREE RURALI LA SPEZIA SCRL 10
SOCIETA’ CONSORTILE PER IL DIPLOMA DI GIURISTA DI IMPRESA 12
SO.GE.MER. SPA 3
IMMOCRI SPA 1,627
SVILUPPO VALLI DELLA PROVINCIA DI IMPERIA SRL 3
94 Total write-downs 1,708
OTHER CHANGES
CASSA DI RISPARMIO DI SAVONA SPA Transfer to caption 80 “Investments in Group companies” 431,538
SAT – SOCIETA’ AUTOSTRADA TIRRENICA SPA Loss on sale of 141,800 ordinary shares 4
ME.T.IM. NORD-OVEST SPA in liquidation Amount received as an advance on liquidation 279
SINT SPA Cancellation of holding as a result of the winding up of the company 1
SERVIZI INTERBANCARI SPA Decreased shareholding resulting from the sale of this area of activity by Servizi Interbancari SpA 68
Total other changes 431,890
95 SECTION 4
TANGIBLE AND INTANGIBLE FIXED ASSETS
Tangible and intangible fixed assets (caption 100 and 90) amount to Lit. 1,179,424 million and are analysed as follows:
Gross Total Net Share value depreciations value % - Tangible fixed assets (caption 100) 1,531,080 516,780 1,014,300 86.0 - Intangible fixed assets (caption 90) 274,986 109,862 165,124 14.0 Total 1,806,066 626,642 1,179,424 100.0
4.1 CHANGES IN TANGIBLE FIXED ASSETS
31/12/00 Properties Furniture Leased Total and fittings assets A. Opening balances 443,225 32,511 425,773 901,509 B. Increases 6,978 11,894 224,439 243,311 B1. Purchases 6,978 11,894 224,439 243,311 B2. Recoveries - - - - B3. Revaluations - - - - B4. Other changes - - - - C. Decreases 10,875 11,020 108,625 130,520 C1. Sales 2,832 561 31,988 35,381 C2. Depreciation and amortization 8,043 10,459 76,637 95,139 (a) amortization 8,043 10,459 76,637 95,139 (b) permanent write-downs - - - - C3. Other changes - - - - D. Closing balances 439,328 33,385 541,587 1,014,300 E. Total revaluations - - - - F. Total depreciation and amortization 159,653 161,338 195,789 516,780 (a) amortization 159,653 161,338 195,789 516,780 (b) permanent write-downs - - - -
Opening balances include advances for investments in course relating to property, furniture and equipment, and leased assets of Lit. 1,381 million, Lit. 361 million and Lit. 39,060 million, respectively. Closing balances include Lit. 3,931 million relating to bad leased assets. Closing balances include advances for investments in course relating to property, furniture and equipment, and leased assets for Lit. 1 million, Lit. 1,349 million and Lit. 71,955 million, respectively.
96 31/12/99 Properties Furniture Leased Total and fittings assets A. Opening balances 449,312 33,344 291,781 774,437 B. Increases 5,541 10,111 224,455 240,107 B1. Purchases 5,541 10,111 224,455 240,107 B2. Recoveries - - - - B3. Revaluations - - - - B4. Other changes - - - - C. Decreases 11,628 10,944 90,463 113,035 C1. Sales 3,665 459 22,966 27,090 C2. Depreciation and amortization 7,963 10,485 67,497 85,945 (a) amortization 7,963 10,485 67,497 85,945 (b) permanent write-downs - - - - C3. Other changes - - - - D. Closing balances 443,225 32,511 425,773 901,509 E. Total revaluations - - - - F. Total depreciation and amortization 151,613 156,268 192,016 499,897 (a) amortization 151,613 156,268 192,016 499,897 (b) permanent write-downs - - - -
Assets leased from 1/1/95 are written down in line with relevant financial amortization plan in accordance with legislation (article 67, item 8, Presidential Decree 917/86 modified by the law accompanying the 1996 Budget). Depreciation was effected to the full extent foreseen by legislation up to 1987; straight-line depreciation was applied to assets leased by Columbus Leasing SpA from 1988 to 1993 and Banca Carige SpA in 1994. The effects that the financial amortization plan would have had on net equity and profit for the year had it been applied, are detailed below:
31/12/00 31/12/99 1) Calculation of increased depreciation
Capital account balance: performing items 13,821 27,004 Capital account balance: items in litigation 1,722 3,657 Total (a) 15,543 30,661 Book value of assets net of depreciation fund 15,246 30,147 Deferred income advanced rentals -756 -1,334 Total (b) 14,490 28,813 Increased depreciation (a-b) 1,053 1,848
97 31/12/00 31/12/99 Net Profit for Net Profit for equity the year equity the year 2) Changes to balance sheet
Surplus depreciation funds 1,848 5,271 Movement for the period -795 -795 -3,423 -3,423 Surplus depreciation funds (c) 1,053 -795 1,848 -3,423 Tax assumed (d) 446 -337 784 -1,451 Net surplus (c-d) 607 -458 1,064 -1,972
“Tax assumed” is calculated at current rates.
Tangible fixed assets are detailed as follows:
31/12/00 31/12/99 Gross Total Book Gross Total Book value depreciations value value depreciations value Properties 598,980 159,653 439,327 593,457 151,613 441,844 Furniture and fittings 32,202 24,524 7,678 30,666 23,280 7,386 Machinery and equipment 159,348 136,814 22,534 155,928 132,988 22,940 Objects of art 1,824 - 1,824 1,824 - 1,824 Advances for future investments 1,350 - 1,350 1,742 - 1,742 – Properties 1 - 1 1,381 - 1,381 – Furniture and fittings 1,349 - 1,349 361 - 361 Total 793,704 320,991 472,713 783,617 307,881 475,736 Leased assets 737,376 195,789 541,587 617,789 192,016 425,773 Total 1,531,080 516,780 1,014,300 1,401,406 499,897 901,509
Properties owned by the Bank were revalued in previous years, in accordance with specific laws, and are analysed below:
31/12/00 31/12/99 Monetary revaluations laws 576/75, 72/83 and 413/91 56,534 56,728 Revaluations law 218/90 310,452 313,029 Total 366,986 369,757
98 Pursuant to article 10 Law 72/83, details of properties owned by the Bank and revalued are given below:
Revaluations L. 576/75 L. 72/83 L. 413/91 Total Building in Genoa Via Cassa di Risparmio 15 3,624 25,000 - 28,624 Building in Genoa Via Pelio 6 - 1,794 - 1,794 Buildings in Genoa Via D’Annunzio, 25-29c-39-41-63-73-81 - 8,000 - 8,000 Via D’Annunzio, 83-89-93-103 - 3,347 3,493 6,840 Via D’Annunzio, 23 - - 7,505 7,505 Via D’Annunzio, 79 - 2,192 1,165 3,357 Via D’Annunzio, garage E1 - - 39 39 Via D’Annunzio, car parking areas n, 1B2 and n. 2B2 99 - - 99 Via D’Annunzio, car parkings 7E1, 8E1, 9E1, - 10E1 and cellar - - 29 29 Leased assets - - 247 247 Total 3,723 40,333 12,478 56,534
Property owned and used by the Bank for its business and activities is classified below:
Gross Total Net Share value depreciations value % Property utilised in business activities: – productive 501,136 132,898 368,238 83.8 – staff accommodation 5,320 15 5,305 1.2 – other property - . supplementary pension fund 74,390 23,719 50,671 11.5 . reserve for termination indemnity 17,742 3,021 14,721 3.4 . others 392 - 392 0.1 Total real estate 598,980 159,653 439,327 100.0
99 4.2 CHANGES IN INTANGIBLE FIXED ASSETS
31/12/00 Software Start-up Goodwill Other intangible Total charges fixed assets A. Opening balances 15,846 13,012 13,431 14,814 57,103 B. Increases 12,282 - 116,500 5,690 134,472 B1. Purchases 12,282 - 116,500 5,690 134,472 B2. Recoveries - - - - - B3. Revaluations - - - - - B4. Other changes - - - - - C. Decreases 7,678 4,195 6,716 7,862 26,451 C1. Sales - - - - - C2. Depreciation and amortization 7,678 4,195 6,716 7,809 26,398 (a) amortization 7,678 4,195 6,716 7,809 26,398 (b) permanent write-downs - - - - - C3. Other changes - - - 53 53 D. Closing balances 20,450 8,817 123,215 12,642 165,124 E. Total revaluations - - - - - F. Total depreciation and amortization 19,314 12,157 43,428 34,963 109,862 (a) amortization 19,314 12,157 43,428 34,963 109,862 (b) permanent write-downs - - - - -
The following costs were included under intangible fixed assets during the period (millions of Italian Lire): – software products 12,282 – research and development costs 628 – maintenance of premises not owned by the Bank 2,292 – funding for Treasury Service purchases with value attributable to more than one year 2,742 – INVIM (tax on increased value of immovable property) 28
Other negative variations (Lit. 53 million) are related to the INVIM for the year.
Closing balances of intangible fixed assets amount to Lit. 165,124 million and are as follow:
– goodwill 116,500 – software products 20,450 – start-up charges 8.817 – goodwill 6,715 – maintenance of premises not owned by the Bank 6,291 – funding for Treasury service purchases with value attributable to more than one year 5,568 – INVIM (tax on increased value of immovable property) 155 – research and development costs 628
100 31/12/99 Software Start-up Goodwill Other intangible Total charges fixed assets A. Opening balances 11,358 13,922 20,147 12,941 58,368 B. Increases 11,457 4,850 - 15,111 31,418 B1. Purchases 11,457 4,850 - 15,111 31,418 B2. Recoveries - - - - - B3. Revaluations - - - - - B4. Other changes - - - - - C. Decreases 6,969 5,760 6,716 13,238 32,683 C1. Sales - - - - - C2. Depreciation and amortization 6,967 4,601 6,716 9,839 28,123 (a) amortization 6,967 4,601 6,716 9,839 28,123 (b) permanent write-downs - - - - - C3. Other changes 2 1,159 - 3,399 4,560 D. Closing balances 15,846 13,012 13,431 14,814 57,103 E. Total revaluations - - - - - F. Total depreciation and amortization 20,438 9,993 36,713 54,241 121,385 (a) amortization 20,438 9,993 36,713 54,241 121,385 (b) permanent write-downs - - - - -
101 SECTION 5
OTHER ASSETS
Other assets amount to Lit. 898,375 million and are analysed below:
31/12/00 31/12/99 million % million % – Other assets (caption 130) 722,700 80.4 762,783 84.6 – Accrued income and prepaid expenses (caption 140) 175,675 19.6 138,899 15.4 Total 898,375 100.0 901,682 100.0
Change 31/12/00 31/12/99 absolute % 5.1 CAPTION 130 "OTHER ASSETS" 722,700 762,783 -40,083 -5.3 – miscellaneous accounts receivable from branches 253,520 166,073 87,447 52.7 – current account cheques drawn on other banks 58,930 69,210 -10,280 -14.9 – amounts to be collected from customers 57,466 38,743 18,723 48.3 – post-collection notes and other values 20,616 159,841 -139,225 -87.1 – premiums related to option transactions 18,478 6,431 12,047 … – current account cheques drawn on the Bank 14,898 14,335 563 3.9 – amounts in transit between branches 13,086 4,383 8,703 … – accounts relating to tax collection services 6,278 6,522 -244 -3.7 – off balance sheet revaluations 4,359 2,770 1,589 57.4 – Bank guarantee deposits 391 259 132 51.0 – amounts relating to participation purchase - - - … – fiscal items: 262,797 244,913 17,884 7.3 tax advances 117,771 129,550 -11,779 -9.1 taxes paid in advance 75,149 22,782 52,367 … accounts receivable from the tax authorities 58,456 80,541 -22,085 -27.4 tax advance on provisions to reserve for termination indemnity (Law 140/97) 10,855 11,646 -791 -6.8 with-holding taxes 566 394 172 43.7 – others 11,881 49,303 -37,422 -75.9
102 Change 31/12/00 31/12/99 absolute % 5.2 CAPTION 140 “ACCRUED INCOME AND PREPAID EXPENSES” 175,675 138,899 36,776 26.5 Accrued income: 164,079 132,339 31,740 24.0 – interest income on loans and advances to credit institutions 5,841 8,064 -2,223 -27.6 – interest income on loans to customers 24,443 22,810 1,633 7.2 – interest income on securities in portfolio 58,156 47,318 10,838 22.9 – differentials stemming from derivatives contracts 75,508 54,146 21,362 39.5 – others 131 1 130 … Prepaid expenses: 11,596 6,560 5,036 76.8 – premiums related to currency forward transactions 3,497 1,342 2,155 … – differentials stemming from derivatives contracts 1,537 777 760 97.8 – discounts on issuing of securities 2,398 1,455 943 64.8 – administrative charges 2,468 2,156 312 14.5 – other transactions 1,696 830 866 …
Accrued income and prepaid expenses are not applied directly to the balance sheet accounts, in accordance with article 12, item 2 of Law 87/92.
Change 31/12/00 31/12/99 absolute % 5.4 DISTRIBUTION OF SUBORDINATED ASSETS 71,345 55,683 15,662 28.1 a) Loans and advances to credit institutions - - - - b) Loans and advances to customers - - - - c) Bonds and other fixed-income securities 71,345 55,683 15,662 28.1
103 SECTION 6
PAYABLES
Payables amount to Lit. 17,913,614 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Amounts owed to credit institutions (caption 10) 4,521,974 25.2 2,998,448 19.5 – Amounts owed to customers (caption 20) 7,918,982 44.2 7,381,578 48.2 – Debts evidenced by certificates (caption 30) 5,472,208 30.6 4,944,114 32.3 – Funds managed on behalf of third parties (caption 40) 450 0.0 445 0.0 Total 17,913,614 100.0 15,324,585 100.0
Change 31/12/00 31/12/99 absolute % 6.1 CAPTION 10 “AMOUNTS OWED TO CREDIT INSTITUTIONS” 4,521,974 2,998,448 1,523,526 50.8 (a) repurchase agreements 662,028 574,876 87,152 15.2 (b) loans of securities - - - -
Caption 10 “amounts owed to credit institutions” detail by technical form and currency is the following:
31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Currency Currency Deposits 2,087,188 1,129,818 3,217,006 1,194,503 734,142 1,928,645 Current accounts 30,479 44,752 75,231 33,589 8,167 41,756 Financing 279,767 31,413 311,180 155,079 32,641 187,720 Long term loans 256,459 - 256,459 265,415 - 265,415 Repurchase agreements with banks 662,028 - 662,028 574,876 - 574,876 Other 69 1 70 36 - 36 Total 3,315,990 1,205,984 4,521,974 2,223,498 774,950 2,998,448 of which: – resident 1,803,127 471,918 2,275,045 1,578,159 213,391 1,791,550 – non-resident 1,512,863 734,066 2,246,929 645,339 561,559 1,206,898
104 Change 31/12/00 31/12/99 absolute % 6.2 CAPTION 20 “AMOUNTS OWED TO CUSTOMERS” 7,918,982 7,381,578 537,404 7.3 (a) repurchase agreements 646,737 520,357 126,380 24.3 (b) loans of securities - - - -
Funds obtained from customers refer to balance sheet captions 20, 30 and 40 and amount to Lit.13,391,640 million, Lit. 12,326,137 million at 31/12/1999 (+1,065,503 million, +8,6%).
Caption 20 “Amounts owed to customers” includes Lit. 332,863 million specific to the branch acquisitions in Sicily; detail by technical form and currency is the following: 31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Currency Currency Savings deposits 649,410 - 649,410 543,724 - 543,724 Current accounts 6,464,076 137,251 6,601,327 6,209,721 74,482 6,284,203 Funding from international organisations 18,127 - 18,127 31,063 - 31,063 Repurchase agreements 646,737 - 646,737 520,357 - 520,357 Other 3,381 - 3,381 2,231 - 2,231 Total 7,781,731 137,251 7,918,982 7,307,096 74,482 7,381,578 of which: – resident 7,723,042 129,879 7,852,921 7,232,962 68,081 7,301,043 – non-resident 58,689 7,372 66,061 74,134 6,401 80,535
Caption 30 “Debts evidenced by certificates” includes Lit. 49,224 million specific to the branch acquisitions in Sicily; detail by technical form and currency is the following:
31/12/00 31/12/99 Foreign Foreign Euro Total Euro Total Currency Currency Certificates of deposits 945.009 1.880 946.889 1.100.056 2.165 1.102.221 Bonds certificates 4.385.761 - 4.385.761 3.745.855 - 3.745.855 Own cheques in circulation 139.558 - 139.558 96.038 - 96.038 Total 5.470.328 1.880 5.472.208 4.941.949 2.165 4.944.114 of which: – resident 5.470.078 1.807 5.471.885 4.941.359 2.117 4.943.476 – non-resident 250 48 298 590 48 638
Caption 40, “Funds managed on behalf of third parties” (Lit. 450 million) includes interest-bearing funds supplied by the State and other public bodies for the financing of specific projects foreseen by law;the lending transactions carried out on behalf of public bodies, exclusively at fixed remuneration, are stated at section 12.
105 SECTION 7
RESERVES
Reserves, summarised in this section, amount to Lit. 916,898 million and are represented in the balance sheet as follows:
31/12/00 31/12/99 million % million % – Reserves for loan losses (caption 90) 10,000 1.1 5,000 0.6 – Reserves for risks and charges (caption 80) 787,104 85.8 760,740 86.6 – Reserve for termination indemnities (caption 70) 119,794 13.1 112,786 12.8 Total 916,898 100.0 878,526 100.0
Change 31/12/00 31/12/99 absolute % 7.1 CAPTION 90 “RESERVES FOR LOAN LOSSES” 10,000 5,000 5,000 100.0
7.2 CHANGES IN THE "RESERVES FOR LOAN LOSSES" (CAPTION 90) 31/12/00 31/12/99 A. Opening balances 5,000 6,000 B. Increases 10,000 5,000 B1. Provisions 10,000 5,000 B2. Other changes - - C. Decreases 5,000 6,000 C1. Utilizations 5,000 6,000 C2. Other changes - - D. Closing balances 10,000 5,000
During the year tax deductible provisions totalling Lit. 10 bn for possible credit risks were made.
CHANGES IN THE “RESERVES FOR PENSIONS AND SIMILAR COMMITMENTS” (CAPTION 80A)
31/12/00 31/12/99 A. Opening balances 574,352 573,657 B. Changes, net 1,591 695 C. Closing balances 575,943 574,352
Details regarding the Supplementary pension Fund are given in part D - Other Information.
106 CHANGES IN THE “RESERVES FOR TAXATION” (CAPTION 80 B)
Risks for 2000 Income Indirect legal taxes taxes proceedings Total
Opening balances 158,482 809 3,801 163,092 Increases 154,112 1,037 - 155,149 Decreases 150,249 * 809 307 151,365 Closing balances 162,345 1,037 3,494 166,876
* of which Lit. 1,347 million surplus to reserve requirements and subsequently destined to the income statement (see note at section 6, Income Statement.
Income Tax advances paid are given at caption 130 “Other assets” and total as follows: Regional tax (IRAP): Lit. 29,691 million; Corporate Income Tax (IRPEG): Lit. 87,164 million.
Risks for 1999 Income Indirect legal taxes taxes proceedings Total Opening balances 140,471 2,578 3,509 146,558 Increases 155,729 809 292 156,830 Decreases 137,718 * 2,578 - 140,296 Closing balances 158,482 809 3,801 163,092
* of which Lit. 2,872 million surplus to reserve requirements and subsequently destined to the income statement (see note at section 6, Income Statement).
With regards to litigation in progress, the Bank continued not to make provisions of any form during 2000. This was a result of the successful outcome of previous litigation between the Bank and the tax authorities in which the Bank contested the application of withholding tax on dividends paid to the Foundation for the years 1993, 1994 and 1995.
Deferred tax: positive and negative effects The calculation of tax advanced and liabilities to deferred taxation was made according to tax rates which will be in force when timing differences reverse, pursuant to tax regulations at 31/12/2000. The law accompanying the Italian Government’s 2001 Budget (Law 388/2000) introduced changes to corporation tax (IRPEG) rates from 2001 onwards. Subsequently, the Bank’s deferred tax charges for the previous year were re-calculated along with those matured during 2000 by applying the new rates as presented below:
2001: IRPEG at 36% and IRAP at 5%; 2002: IRPEG at 36% and IRAP at 4.75%; 2003, 2004 and 2005: IRPEG at 35% and IRAP at 4.25%.
107 Standard tax rates are applied and according to tax regulations at 31/12/2000 are those which will be in force during the five years in which timing differences reverse.
At 31/12/99, assets representing advance payment of taxation totalled Lit. 22.8 bn were recorded; to this figure Lit. 20.2 bn was added in the form of advanced tax relative to the first six months of 2000. In more detail, this consists of: – the amortisation of goodwill valued at greater than a tenth is deductible in the year in which the amount accepted for tax purposes originates; – costs related to hospitality and entertaining related to 2000 are deductible for a third of the total over five years in five equal instalments; – provisions for personnel charges will be tax deductible in the next business year; – Provisions for future charges resulting from the re-negotiation of interest rates foreseen by Law 133/1999 and Law 388/2000 applied to special rate mortgages; – Tax credit relating to dividends of subsidiaries accrued and relevant for tax purposes in 2000(around Lit 6 bn); – Adjustments to tax advanced relative to previous accounting periods as a result of changes in tax rates in force (around Lit 0,5 bn).
In accordance with Bank of Italy instructions of 3/8/99, assets representing advanced payment of taxation relative to the timing differences originating in the first six months of 2000 which will be reversed in forthcoming years were recorded at caption 220, "Income tax for the year". The same caption, however, rose as a result of assets representing advanced payment of taxation recorded in previous years and reversed during the first six months of 2000.
A Assets in the form of advanced payment of taxation 1. Opening balances 22,782 2. Increases 20,231 2.1 Advanced taxation arising during the year 20,231 2.2 Other increases - 3. Decreases 6,512 3.1 Advanced taxation written off during the year 6,512 3.2 Other decreases - 4. Closing balances 36,501
Tax advanced totalling around Lit. 9.4 bn was not recorded against provisions to various reserves liable to taxation for which the period of tax relief is uncertain. In comparison to the previous year, these reserves increased in provisions subject to tax by Lit. 5.7 bn; utilisation of the same reserves totalled Lit. 2.8 bn. With regards to timing differences liable to tax, deferred tax liabilities amounting to around Lit. 16.6 bn were recorded relating to. - gains stemming from the release of investments, and capital and non-capital property subject to tax relief in the form of instalments foreseen by article 54 of the Consolidated tax Law (Lit. 4.6 bn); - dividends of subsidiaries recorded during the same accounting period as related profits (Lit. 12 bn). Deferred tax liabilities which became relevant for tax purposes in 2000 amounted to Lit. 2.5 bn whilst adjustments resulting from changes in tax rates totalled Lit. 0.2 bn. The counterpart for these increases and decreases in the deferred tax reserve is caption 220 “Income tax” , in line with tax regulations. With regards to timing differences liable to taxation, provisions for deferred tax liability amounting to around Lit. 3.9 bn related to gains realised in the first half of 2000 stemming from the release of strategic and non-strategic holdings and premises were recorded. The payment of this amount is subject to the relief offered by article 54 of the Consolidated Tax Law in the form of instalments.
108 B Liabilities for taxes payable (a) 1. Opening balances 9,157 2. Increases 16,553 2.1 Deferred taxation originating in the year 16,553 2.2 Other increases - 3. Decreases 3,634 3.1 Deferred taxation written off in the year 2,710 3.2 Other decreases 924 4. Closing balances 22,076
(a) Recorded in the income statement with counter entry
Deferred tax with counterpart recorded in net assets
Reduced deferred tax liabilities relative to net assets stem from the utilisation of Lit. 96.5 bn of provisions to the share premium reserve to cover 4/5ths of the negative variation deriving from the securitisation of bad loans.
As a result, Lit. 38.6 bn in tax advanced relating to net assets (IRPEG: Lit. 34.2 bn; IRAP: Lit. 4.4 bn) was recorded as counterpart to the share premium reserve. The balance of the reserve prior to this utilisation will be restored over the next four years.
A Assets in the form of advanced payment of taxation (b) 1. Opening balances - 2. Increases 38,648 2.1 Advanced taxation arising during the year 38,648 2.2 Other increases - 3. Decreases - 3.1 Advanced taxation written off during the year - 3.2 Other decreases 4. Closing balances 38,648
(b) Recorded in the net value with counter entry
B Liabilities for taxes payable (b) 1. Opening balances 2. Increases - 2.1 Deferred taxation originating in the year 2.2 Other increases 3. Decreases - 3.1 Deferred taxation written off in the year 3.2 Other decreases 4. Closing balances -
No provisions were made with regard to deferred tax liabilities on reserves benefiting from tax relief totalling Lit. 80.5 bn as distribution is not foreseen and there is little likelihood of the conditions requiring payment arising.
109 With regards to the above-stated, tax deferrals were recorded exclusively in the income statement in order to correlate with related timing differences.
Change 31/12/00 31/12/99 absolute % 7.3 COMPOSITION OF CAPTION 80 (C) "OTHER RESERVES" 44,286 23,296 20,990 90.1 Reserves for personnel charges 26,371 9,068 17,303 … Reserves for future charges 29 51 -22 -43.1 Reserves for guarantees and commitments 5,658 5,927 -269 -4.5 Reserves for in-house insurance scheme 3,064 3,041 23 0.8 Reserves for leasing transactions 907 934 -27 -2.9 Reserves for legal proceedings 5,529 4,275 1,254 29.3 Reserves for re-negotiated mortgages Law 133/99 2,728 - 2,728 …
A breakdown of the reserves which make up the caption reveals the following changes:
Reserves for personnel charges include provisions made for extraordinary charges subject to uncertainty regarding time, amount and occurence. Closing balance includes total insurance charges relative to staff employed after 1/12/91 for Lit. 6,320 million. Provisions for the year are stated in the Income Statement at caption 80a “Administrative costs - personnel”.
31/12/00 31/12/99 A. Opening balance 9,068 6,534 B. Increases 19,356 3,039 – provisions for insurance charges related to staff employed after 1/12/91 1,208 1,400 – other provisions 18,148 1,639 C. Decreases due to utilisation 2,053 505 D. Closing balance 26,371 9,068
Reserves for future charges.. These reserves are almost exclusively destined to meet Deposit Protection Fund charges (FITD).
31/12/00 31/12/99 A. Opening balance 51 51 B. Increases due to provisions - - C. Decreases due to utilisation 22 - D. Closing balance 29 51
110 Reserves for guarantees and commitments. The reserve for guarantees and commitments was created in accordance with the provisions of Legislative Decree 87/92 and is equal to expected losses on credit commitments.
31/12/00 31/12/99 A. Opening balance 5,927 6,922 B. Increases due to provisions - - C. Decreases due to utilisation 269 995 D. Closing balance 5,658 5,927
Reserves for in-house insurance scheme.. Reserves for in-house insurance schemes were set up to limit exposure to risks not covered by existing insurance policies.
31/12/00 31/12/99 A. Opening balance 3,041 3,040 B. Increases due to provisions 600 437 C. Decreases due to utilisation 577 436 D. Closing balance 3,064 3,041
Reserves for leasing transactions.. Provisions to this reserve are connected to the valuation of latent credit risks present in bad leased assets.
31/12/00 31/12/99 A. Opening balance 934 1,460 B. Increases due to provisions - - C. Decreases due to utilisation 27 526 D. Closing balance 907 934
Reserves for legal proceedings.. Reserves for legal proceedings limit exposure to potential loss resulting from unsettled litigation.
31/12/00 31/12/99 A. Opening balance 4,275 1,961 B. Increases due to provisions 1,729 2,314 C. Decreases due to utilisation 475 - D. Closing balance 5,529 4,275
A specific reserve was created to face possible charges stemming from the re-negotiation of interest rates foreseen by article 29, Law 133/1999 applied to special rate mortgages.
111 31/12/00 31/12/99 A. Opening balance - - B. Increases due to provisions 2,728 - C. Decreases due to utilisation - - D. Closing balance 2,728 -
CHANGES IN CAPTION 70 “RESERVE FOR TERMINATION INDEMNITIES” 31/12/00 31/12/99 A. Opening balance 112,786 109,132 B. Increases 21,944 16,376 B.1 Provisions and other changes 21,944 16,376 C. Decreases 14,936 12,722 C.1 Termination employment 7,234 6,060 C.2 Advances (law 297/82) 7,702 6,662 D. Closing balance 119,794 112,786
Increases include Lit. 4,543 million related to personnel of the branches purchased from Banco di Sicilia.
112 SECTION 8
SUBSCRIBED CAPITAL, EQUITY RESERVES, RESERVES FOR GENERAL BANKING RISKS AND SUBORDINATED LIABILITIES
This section presents liabilities captions 100, 120, 130, 140, 150 and 170 and assets caption 120.
31/12/00 31/12/99 million % million % – Capital stock (caption 120) 1,970,173 72.7 1,970,173 72.6 – Additional paid-in capital (caption 130) 241,368 8.9 299,189 11.0 – Reserves (caption 140) 282,164 10.4 237,531 8.7 – Revaluation reserves (caption 150) 15,405 0.6 15,405 0.6 – Reserves for general banking risks (caption 100) 10,000 0.4 10,000 0.4 – Net income (caption 170) 190,221 7.0 181,645 6.7 Shareholders’ equity 2,709,331 100.0 2,713,943 100.0 – Own shares (caption 120) 34,130 9,788
Change 31/12/00 31/12/99 absolute % CAPTION 120 1,970,173 1,970,173 - - “CAPITAL STOCK”
Capital stock is represented by 197,017,340 ordinary shares, par value Lit. 10,000 each and recorded no changes during the six months.
Change 31/12/00 31/12/99 absolute % CAPTION 130 241,368 299,189 -57,821 -19.3 “ADDITIONAL PAID-IN CAPITAL”
The caption is related to the issue-premium for Lit. 1,000 connected to 29,188,500 shares for Lit. 2,000 connected to 7,500,000 shares, and Lit. 6,000 connected to 42,500,000 shares and recorded no changes during the six months. The variation of Lit. 57,821 million corresponds to the amount utilised from the reserve as a result of the securitisation of bad loans foreseen by article 6, Law 130/1999. In particular, the variation corresponds to 4/5ths of the reduced recorded value of the loans ceded (Lit. 96, 468 million) and related tax advanced (Lit. 38,647 million).
113 Change 31/12/00 31/12/99 absolute % CAPTION 140 "RESERVES" 282,164 237,531 44,633 18.8 a) legal reserve 71,043 52,878 18,165 34.4 b) reserve for purchase of treasury stock 34,130 9,788 24,342 … c) other reserves 176,991 174,865 2,126 1.2 - taxed extraordinary reserve 117,028 92,086 24,942 27.1 - reserve for purchase of treasury stock disposable amount 870 25,212 -24,342 -96.5 - reserve for incorporation 32,120 32,120 - - - reserve (legislative decree 17/5/99 n. 153) 1,925 - 1,925 … - merger reserve 23,895 23,895 - - - reserve for dividends on own shares 900 1,299 -399 -30.7 - reserve (art. 55 Decree 917/86) 253 253 - -
Legal reserve increased from Lit. 52,878 to Lit. 71,043 million by the distribution of the 1999 net profit, as decided by stockholders’ resolutions of 27/4/2000.
Reserve for purchase of treasury stock increased by Lit. 24,342 million in accordance with art. 2357 ter of the Civil Law and is related in its total to assets caption 120 ”own shares”.
Taxed extraordinary reserve increased from Lit. 92,086 to Lit. 117,028 million. Changes are related to the distribution of the 1999 net profit as decided by stockholders’ resolution of 27/4/2000.
Reserve for purchase of treasury stock-disposable amount. From an initial provision of Lit. 35 bn the reserve dropped during the year from Lit. 25,212 million to Lit. 870 million. Utilization is in accordance with the amount of own shares in portfolio (Lit. 34,130 million).
Merger reserve was formed in 1994 in accordance with art. 7 c. 3 of Law 218/90 and with art. 1 of Law 489/93 and recorded no change.
The reserve foreseen by Legislative decree 153/99 was constituted during the year following the distribution of profits for 1999 deliberated by the Shareholders’ Meeting of 27/4/2000 in order to benefit from the tax benefits contained in the same decree relating to merger operations.
Reserve for incorporation and the reserve foreseen by art. 55, Presidential Decree 917/86 recorded no changes during the year.
Reserve for dividends on own shares amounts to Lit. 900 million and is related to dividends of 1,285,500 own shares in portfolio and was formed in accordance with the stockholders’ resolution of 27/4/2000. As decided by the same resolution, the reserve created in 1999 for Lit. 1,299 million was used for the distribution of the 1999 net profit.
114 Change 31/12/00 31/12/99 absolute % CAPTION 150 "REVALUATION RESERVES" 15,405 15,405 - - Revaluation reserves (law 72/83) 3,737 3,737 - - Revaluation reserves (law 413/91) 11,668 11,668 - -
Revaluation reserves, which show the same amount as at 31/12/99, benefited from the tax-break opportunities offered by article 123, item 4, Presidential Decree 917/86, as present in the balance sheets of the incorporated companies. During 1995 Carige released the revaluation reserves connected to Law 413/91, by the payment of taxes in accordance with article 22 of Law 85/95.
Change 31/12/00 31/12/99 absolute % CAPTION 100 “RESERVES 10,000 10,000 - - FOR GENERAL BANKING RISKS”
No change was recorded during the year.
Changes in assets caption 120 “Own shares” are described below:
31/12/00 31/12/99 Nominal Nominal Quantity Amount /1000 Quantity Amount /1000 value/1000 value/1000 A. Opening balances 602,500 6,025,000 9,787,769 1,911,797 19,117,970 29,161,013 B. Increases 2,044,750 20,447,500 39,264,185 875,500 8,755,000 18,626,067 - Purchases 2,044,750 20,447,500 37,593,660 875,500 8,755,000 14,191,969 - Writebacks ------Other changes - - 1,670,525 - - 4,434,098 C. Decreases 731,500 7,315,000 14,921,679 2,184,797 21,847,970 37,999,311 - Sales 731,500 7,315,000 13,953,980 2,184,797 21,847,970 37,999,311 - Adjustments - - 967,699 - - - - Other changes ------D. Closing balances 1,915,750 19,157,500 34,130,275 602,500 6,025,000 9,787,769
Relative to article 16, Legislative decree 87/92, available reserves recorded at 30/6/2000 offer sufficient cover for those costs not amortised as by article 10 (comma 2a) and d) )of the same decree. Legislative decree 467/97 (modifying article 105, Presidential decree 917/86) introduced changes concerning the method of assessing tax credits relative to dividends on the basis of taxes paid fully or in part. Tax credits on dividends to be distributed in 2001 are to be considered "full" in the light of taxes accumulated and paid ("basket A") amounting to Lit. 277,347 million; significantly higher than the figure represented by 58.73% of profits to be distributed. The annual distribution of dividends for the next seven years will benefit from a full tax credit as a result of the provisions of Legislative decree 467/97. Additional benefits will derive from the regime of dual income tax which has come into effect in 2000. As a result of capital increases carried out from 1/1/97, a lower rate of income tax will be applied starting from the current year. Share capital and reserves includes Lit. 80,5 bn which, if distributed, would be included in the Bank's taxable income.
115 The table below provides the details of the Bank's total capital and prudential management requirements as requested by the Bank of Italy in its letter of 14/12/98 relating to increased transparency in bank balance sheets.
Total capital and prudential requirements
CATEGORIES/VALUES 31/12/00 31/12/99 A. Total capital A.1 Tier 1 2,351,835 2,493,763 A.2 Tier 2 930 20,427 A.3 Deductions 43,968 475,507 A.4 Total capital 2,308,797 2,038,683 B. Prudential requirements B.1 Credit risks 874,209 784,419 B.2 Trading risks 142,004 66,954 including: – trading securities risks 136,393 65,155 – exchange rate risks 5,611 1,799 B.3 Other prudential requirements - - B.4 Total prudential requirements 1,016,213 851,373 C. Capital adequacy ratios C.1 Risk-Weighted Assets (*) 14,517,329 12,172,300 C.2 Tier 1% of RWA 16.20% 20.49% C.3 Total capital % of RWA 15.90% 16.75%
(*) Total prudential requirements multiplied by the reciprocal minimum obligatory credit risk coefficient.
116 SECTION 9
OTHER LIABILITIES
Other liabilities amount to Lit. 990,459 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Other liabilities (caption 50) 705,167 71.2 683,685 77.2 – Accrued expenses and deferred income (caption 60) 285,292 28.8 201,802 22.8 Total 990,459 100.0 885,487 100.0
Change 31/12/00 31/12/99 absolute % 9.1 CAPTION 50 "OTHER LIABILITIES" 705,167 683,685 21,482 3.1 – miscellaneous accounts payable to branches 177,343 295,030 -117,687 -39.9 – amounts due to customers 170,040 38,261 131,779 … – amounts in transit with branches 68,245 8,368 59,877 … – beneficiaries of outstanding invoices 49,049 43,625 5,424 12.4 – amounts relating to securities transactions 34,907 7,297 27,610 … – amounts due to tax authorities on behalf of third parties 22,924 26,481 -3,557 -13.4 – staff charges 22,087 48,827 -26,740 -54.8 – premiums related to option transactions 13,092 1,152 11,940 … – amounts related to writedowns on off-balance sheet transactions 10,617 7,479 3,138 42.0 – excess of adjustment on discounted notes 10,225 173,897 -163,672 -94.1 – accrued costs to be recognized 5,932 767 5,165 … – guaranteed deposits from third parties 3,699 2,126 1,573 74.0 – amounts relating to tax collection service 1,330 1,369 -39 -2.8 – other 115,677 29,006 86,671 …
117 Change 31/12/00 31/12/99 absolute % 9.2 CAPTION 60 "ACCRUED EXPENSES AND DEFERRED INCOME" 285,292 201,802 83,490 41.4 Accrued expenses: 217,979 154,483 63,496 41.1 – interest expenses due to banks 42,168 18,126 24,042 … – interest expenses due to customers 3,546 2,467 1,079 43.7 – interest payable on debt securities 102,961 81,153 21,808 26.9 – differentials stemming from derivatives contracts 69,213 52,700 16,513 31.3 – others 91 37 54 … Deferred income: 67,313 47,319 19,994 42.3 – premiums related to currency forward transactions 1,632 943 689 73.1 – differentials stemming from derivatives contracts 1,508 705 803 … – discounted notes 4,990 7,474 -2,484 -33.2 – leasing rents 57,612 35,835 21,777 60.8 – others 1,571 2,362 -791 -33.5
Accrued expenses and deferred income are not applied directly to the balance sheet accounts in accordance with article 12, Legislative Decree 87/92.
118 SECTION 10
GUARANTEES AND COMMITMENTS
Guarantees and commitments amount to Lit. 3,559,134 million and are analysed below:
31/12/00 31/12/99 million % million % – Guarantees given (caption 10) 2,152,098 60.5 1,828,213 69.0 – Commitments (caption 20) 1,407,036 39.5 820,521 31.0 Total 3,559,134 100.0 2,648,734 100.0
Change 31/12/00 31/12/99 absolute % 10.1 CAPTION 10 "GUARANTEES GIVEN" 2,152,098 1,828,213 323,885 17.7 (a) commercial guarantees 1,970,495 1,690,030 280,465 16.6 (b) financial guarantees 181,000 137,580 43,420 31.6 (c) assets held in guarantee 603 603 - - Total 2,152,098 1,828,213 323,885 17.7 Caption 10 is analysed below: – sureties 2,046,645 1,665,186 381,459 22.9 – documentary and non documentary credits 90,933 134,998 -44,065 -32.6 – acceptances on behalf of third parties 8,544 15,572 -7,028 -45.1 – joint securities 5,373 8,728 -3,355 -38.4 – re-financing mortgages with Artigiancassa - 3,126 -3,126 -100.0 – other sureties on behalf of third parties 551 551 - - – bond sureties on behalf of third parties 52 52 - -
Credit commitments related to non-performing loans amount to Lit. 17,802 million. Reserve for guarantees and commitments, which amount to Lit. 5,658 million, cover all relevant risks.
119 Change 31/12/00 31/12/99 absolute % 10.2 CAPTION 20 "COMMITMENTS" 1,407,036 820,521 586,515 71.5 (a) Commitments to extend credit (certain to be called on) 638,025 226,841 411,184 … (b) Commitments to extend credit (not certain to be called on) 769,011 593,680 175,331 29.5 Commitments are analysed as follows: – stipulated mortgages to be granted 437,133 452,879 -15,746 -3.5 – purchases of securities to be settled 351,718 106,057 245,661 … – deposits to be made with banks 24,203 2,184 22,019 … – unused irrevocable lines of credit 380,955 193,375 187,580 97.0 – commitments with Deposit Protection Fund Liabilities (FITD) 20,298 20,240 58 0.3 – amounts to be granted to customers 1,890 7,025 -5,135 -73.1 – derivatives credits on credits 96,814 - 96,814 - – option on securities 24,175 19,623 4,552 23.2 – stipulated leasing transactions to be granted 69,850 19,138 50,712 … Total 1,407,036 820,521 586,515 71.5
Change 31/12/00 31/12/99 absolute % 10.3 ASSETS HELD TO GUARANTEE THE BANK’S LIABILITIES 1,330,263 1,135,394 194,869 17.2 Securities held to guarantee: – bank drafts issued by Carige 23,366 34,568 -11,202 -32.4 – repurchase agreements 1,306,897 1,100,826 206,071 18.7 Total 1,330,263 1,135,394 194,869 17.2
Change 31/12/00 31/12/99 absolute % 10.4 UNUSED LINES OF CREDIT BY THE BANK 428,783 104,141 324,642 … (a) central banks 115,166 74,141 41,025 55.3 (b) other banks 313,617 30,000 283,617 …
120 10.5 FORWARD TRANSACTIONS 31/12/00 31/12/99 Hedging Trading Other Hedging Trading Other 1. Purchase/sale of: 148,902 613,851 - 204,664 295,526 - 1.1 Securities - 387,260 - - 54,352 - – purchases - 305,247 - - 54,317 - – sales - 82,013 - - 35 - 1.2 Currency 148,902 226,591 - 204,664 241,174 - – currency against currency 20,809 - - - 6,005 - – purchases against euro 105,575 117,019 - - 177,026 - – sales against euro 22,518 109,572 - 204,664 58,143 - 2. Deposits and loans - - 99,958 - - 48,200 – to be made - - 26,093 - - 9,208 – to be received - - 73,865 - - 38,992 3. Derivatives contracts 3,052,864 3,777,815 23,215 2,112,153 5,705,460 - 3.1 With exchange of principal 103,100 760,947 - 139,200 222,311 - (a) securities 85,100 60,024 - 112,891 50,149 - – purchases 48,350 46,470 - 39,246 50,149 - – sales 36,750 13,554 - 73,645 - - (b) currency 18,000 700,923 - 26,309 172,162 - – currency against currency 18,000 82,006 - 26,309 75,482 - – purchases against euro - 304,618 - - 35,754 - – sales against euro - 314,299 - - 60,926 - (c) other instruments ------– purchases ------– sales ------3.2 Without exchange of principal 2,949,764 3,016,868 23,215 1,972,953 5,483,149 - (a) currency ------– currency against currency ------– purchases against euro ------– sales against euro ------(b) other instruments 2,949,764 3,016,868 23,215 1,972,953 5,483,149 - – purchases 1,054,068 1,476,479 - 793,071 2,786,982 - – sales 1,895,696 1,540,389 23,215 1,179,882 2,696,167 - Total 3,201,766 4,391,666 123,173 2,316,817 6,000,986 48,200
Deposits and funding to be paid or received include exclusively spot and short-term transactions. Currency-related spot transactions amount to Lit. 26,7 bn. With regards to derivatives contracts, the column ‘other transactions’ includes the notional value of options stated separately from the related underlying structured bond issue of the Bank. The notional value of options incorporated in assets or liabilities which allow either the Bank or the counterparty to transform, after a certain period of time, the interest rate stipulated in the contract from fixed to floating, or vice versa, was recorded at section 11.6 ‘Maturities of assets and liabilities’.
121 10.6 DERIVATIVES CONTRACTS ON LENDING 31/12/00 31/12/99 Trading Banking Trading Banking book book book book 1. Hedging purchases 118,965 - - - 1.1 With exchange of principal 118,965 - - - - credit default product 118,965 - - - - banks 33,166 - - - - financial bodies 85,799 - - - 2. Hedging sales 96,814 - - - 1.1 With exchange of principal 96,814 - - - - credit default product 96,814 - - - - banks 96,814 - - - - financial bodies - - - - Total 215,779 - - -
Total principal of derivatives contracts amounts to Lit.7,069.7 bn (inclusive of basis swaps contracts for Lit. 328,86 bn, the notional value of which is stated twice).
PRINCIPAL (1) Interest Exchange Share Other Total rate rate rates 1. Trading contracts 3,016,867 700,923 23,215 156,839 3,897,844 1.1 Non-quoted trading contracts 2,937,435 700,923 23,215 96,814 3,758,387 Forwards (2) 58,088 - - - 58,088 Swaps (3) 2,843,743 - - - 2,843,743 Options bought 17,802 344,030 - - 361,832 Options sold 17,802 356,893 23,215 - 397,910 Derivatives on credits - - - 96,814 96,814 1.2 Quoted trading contracts 79,432 - - 60,025 139,457 Futures bought 15,513 - - 46,471 61,984 Futures sold 63,919 - - 13,554 77,473 2. Non-quoted hedging contracts 2,594,306 18,000 111,783 118,965 2,843,054 Swaps (3) 2,082,195 18,000 - - 2,100,195 Options bought 95,813 - 50,858 - 146,671 Options sold 416,298 - 60,925 - 477,223 Derivatives on credits - - - 118,965 118,965 Total 5,611,173 718,923 134,998 275,804 6,740,898
(1) Principal in basis swaps is stated once (2) Caption includes forward rate agreements (3) Caption includes basis swaps, cross currency swaps, interest rate swaps and overnight indexed swaps.
122 PRINCIPAL IN HEDGING CONTRACTS (1) Swaps Options Options Derivatives Total bought sold on credits 1. Assets 1,417,580 119,988 60,925 118,965 1,717,458 Loans to customers 326,188 95,813 - - 422,001 Trading securities 796,111 - 36,750 118,965 951,826 Investment securities 217,830 - - - 217,830 Deposits with banks 77,451 - - - 77,451 Equity investments - 24,175 24,175 - 48,350 2. Liabilities 527,402 26,683 416,298 - 970,383 Bonds 527,402 26,683 416,298 - 970,383 3. Other (2) 155,213 - - - 155,213 Total 2,100,195 146,671 477,223 118,965 2,843,054
(1) Principal in basis swaps is stated once. (2) Non-specific hedging contracts on interest-rate risk related to customer borrowing and lending.
PRINCIPAL IN CONTRACTS CLASSIFIED BY REMAINING CONTRACT LIFE(1) Up to 12 From 1 to 5 More than Total months years 5 years 1. Trading contracts 1,685,909 2,181,069 30,866 3,897,844 1.1 Non-quoted trading contracts 1,561,965 2,165,556 30,866 3,758,387 Forwards 58,088 - - 58,088 Swaps 822,548 1,990,329 30,866 2,843,743 Options bought 334,348 27,484 - 361,832 Options sold 346,981 50,929 - 397,910 Derivatives on credits - 96,814 - 96,814 1.2 Quoted trading contracts 123,944 15,513 - 139,457 Futures bought 46,471 15,513 - 61,984 Futures sold 77,473 - - 77,473 2. Non-quoted hedging contracts 155,817 1,076,008 1,611,229 2,843,054 Swaps 142,901 963,271 994,023 2,100,195 Options bought 9,450 41,408 95,813 146,671 Options sold - 60,925 416,298 477,223 Derivatives on credits 3,466 10,404 105,095 118,965 Total 1,841,726 3,257,077 1,642,095 6,740,898
(1) Principal in basis swaps is stated once.
During the period no losses on loans-related derivatives contracts were recorded. Derivatives business is carried out exclusively with primary banking and financial institutions and for this reason provisions for counterparty risk have not been made. At 31/12/00, there were no unsettled contracts. Non quoted derivatives contracts accounted for 98% of all derivatives contracts at 31/12/00 .
123 NON-QUOTED INTEREST-RATE DERIVATIVES CONTRACTS (1) Banks Financial Other Total bodies 1. Principal 6,131,391 383,317 86,733 6,601,441 2. Trading contracts Positive market value 23,715 994 - 24,709 Negative market value 22,305 1,123 1,000 24,428 Potential credit equivalent 25,791 583 1,803 28,177 3. Hedging contracts Positive market value 27,935 2,060 - 29,995 Negative market value 100,134 5,873 - 106,007 Potential credit equivalent 33,152 10,408 - 43,560
(1) Principal in basis swaps is stated once.
Derivatives-related capital losses of Lit.135,200 million and capital gains of Lit. 65,377 million were not recorded in the income statement. In particular, capital losses and gains stemming from hedging contracts related to the investment and trading securities portfolios of Lit. 76,933 million and Lit. 18,937 million respectively, were not recorded (see Section 2.3); and capital losses stemming from hedging contracts related to bonds issued of Lit. 20,185 million and capital gains of Lit. 8,357 million were also not recorded.
DEFERRED GAINS AND LOSSES Losses Gains 1. Trading contracts 31,404 37,889 1.1 Non-quoted trading contracts 31,404 37,669 Forwards 56 58 Swaps 18,644 24,441 Options 12,704 13,170 1.2 Quoted trading contracts - 220 Futures - 220 2 Non-quoted hedging contracts 103,796 27,488 Swaps 88,458 19,582 Options 1,599 6,429 Derivatives on credits 13,739 1,477 Total 135,200 65,377
124 SECTION 11
CONCENTRATION AND DISTRIBUTION OF ASSETS AND LIABILITIES
Breakdowns of loans related to lists 11.2, 11.3, 11.5, 11.6 and 11.7 of this section include leased assets, which amount to Lit. 541,587 million and are exclusively connected to transactions with customers in lira. On this basis, loans to customers amount to Lit. 12,707,625 and not to Lit. 12,166,038 million (as caption 40 of assets).
11.1 SIGNIFICANT EXPOSURES 31/12/00 31/12/99 (a) amount - 244,683 (b) number - 1 Significant exposures are those identified on the basis of “major lines of credit” as defined by the Bank of Italy.
11.2 DISTRIBUTION OF LOANS AND ADVANCES TO CUSTOMERS, BY CATEGORY 31/12/00 31/12/99 (a) Governments 568,967 228,946 (b) Other public entities 1,138,675 963,104 (c) Non-financial businesses 6,916,759 6,259,072 (d) Financial institutions 1,083,424 778,232 (e) Personal businesses 678,766 684,379 (f) Other operators 2,321,034 2,095,610 Total 12,707,625 11,009,343
11.3 DISTRIBUTION OF LOANS TO RESIDENT NON-FINANCIAL BUSINESSES AND PERSONAL BUSINESSES 31/12/00 31/12/99 (a) 1st branch of economic activity Wholesale and retail trade, salvage and repairs 1,577,863 1,438,435 (b) 2nd branch of economic activity Building and construction 1,212,497 1,171,530 (c) 3rd branch of economic activity Other market services 1,048,692 933,173 (d) 4th branch of economic activity Air and sea transport 517,906 366,801 Hotel and catering services (e) 5th branch of economic activity Hotel and catering services Transportation services 394,942 339,564 (f) Other branches 2,696,344 2,560,597 Total 7,448,244 6,810,100
125 11.4 DISTRIBUTION OF GUARANTEES GIVEN, BY CATEGORY OF COUNTERPART 31/12/00 31/12/99 (a) Governments - - (b) Other public entities 17,787 9,016 (c) Banks 622,416 620,889 (d) Non-financial businesses 1,362,753 1,101,863 (e) Financial institutions 81,880 33,062 (f) Personal businesses 21,504 20,534 (g) Other operators 45,758 42,849 Total 2,152,098 1,828,213
11.5 GEOGRAPHIC DISTRIBUTION OF ASSETS AND LIABILITIES
31/12/00 Caption/countries Italy Other EU Other Total countries countries 1. Assets 17,537,520 1,393,557 621,070 19,552,147 1.1 Due from banks 1,276,901 408,447 178,060 1,863,408 1.2 Loans to customers 12,435,507 267,993 4,125 12,707,625 1.3 Securities 3,825,112 717,117 438,885 4,981,114 2. Liabilities 15,600,301 2,072,045 241,268 17,913,614 2.1 Due to banks 2,275,045 2,022,596 224,333 4,521,974 2.2 Deposits from customers 7,852,921 49,359 16,702 7,918,982 2.3 Securities issued 5,471,885 90 233 5,472,208 2.4 Others 450 - - 450 3. Guarantees and Commitments 3,323,786 186,414 48,934 3,559,134
31/12/99 Caption/countries Italy Other EU Other Total countries countries 1. Assets 15,448,831 1,261,801 430,939 17,141,571 1.1 Due from banks 601,958 500,284 96,093 1,198,335 1.2 Loans to customers 10,725,369 235,245 48,729 11,009,343 1.3 Securities 4,121,504 526,272 286,117 4,933,893 2. Liabilities 14,036,514 1,159,484 128,587 15,324,585 2.1 Due to banks 1,791,550 1,096,198 110,700 2,998,448 2.2 Deposits from customers 7,301,043 62,921 17,614 7,381,578 2.3 Securities issued 4,943,476 365 273 4,944,114 2.4 Others 445 - - 445 3. Guarantees and Commitments 2,588,535 8,910 51,289 2,648,734
Geographic distribution is analysed with reference to the counterparts’ residence.
126 11.6 MATURITIES OF ASSETS AND LIABILITIES
31/12/00 Repayable Up to Between 3 Between 1 and 5 Beyond 5 Captions/Residual life on demand 3 months and 12 years years months fixed rate indexed rate fixed rate indexed rate 1. Assets 4,706,236 4,454,258 3,937,848 3,073,239 4,218,315 2,066,331 1.1 Treasury bonds eligible for refinancing 2,454 50,439 97,093 160,497 359,738 90,172 1.2 Due from banks 981,533 711,879 10 482 - 19,656 1.3 Loans to customers 3,401,727 1,800,049 1,207,807 549,370 2,354,594 567,453 1.4 Bonds and other fixed income securities 5,579 156,080 654,554 925,099 1,349,499 375,270 1.5 Off-balance sheet transactions 314,943 1,735,811 1,978,384 1,437,791 154,484 1,013,780 2. Liabilities 8,233,136 5,863,005 3,519,726 2,000,049 2,957,379 1,113,614 2.1 Due to banks 264,971 2,986,309 782,347 55,441 96,280 163,934 2.2 Deposits from customers 7,232,507 644,804 35,103 360 6,181 - 2.3 Securities issued 556,684 472,482 936,552 301,039 2,623,407 7,554 – bonds 377,619 34,405 558,646 238,865 2,594,182 7,554 – certificates of deposits 39,507 438077 377,906 62,174 29,225 - – other securities 139,558 - - - - - 2.4 Subordinated liabilities ------2.5 Off-balance sheet transactions 178,974 1,759,410 1,765,724 1,643,209 231,511 942,126
Caption repayable on demand includes assets and liabilities with residual life of not more than 24 hours, or a business day. Unspecified duration includes compulsory reserve, overdue loans and bad loans. Sub-captions 1.5 and 2.6 include the notional value (Lit. 482,016 million) of options incorporated in structured mortgaged loans and bond issues which allow either the Bank or the counterparty, after a certain period of time, to transform the interest rate stipulated in the contract from fixed to floating, or vice versa.
127 31/12/99 Repayable Up to Between 3 Between 1 and 5 Beyond 5 Unspecified Captions/Residual life on demand 3 months and 12 years years duration Total months fixed rate indexed rate fixed rate indexed rate 1. Assets 3,282,890 4,286,563 4,252,153 3,528,693 4,251,840 803,672 2,777,354 568,258 23,751,423 1.1 Treasury bonds eligible for refinancing - 189,843 292,909 486,972 630,163 135,460 121,238 - 1,856,585 1.2 Due from banks 237,933 615,348 151,965 19,264 99,363 321 - 74,141 1,198,335 1.3 Loans to customers 2,801,330 1,342,609 1,171,305 466,369 2,142,722 225,511 2,365,380 494,117 11,009,343 1.4 Bonds and other fixed income securities - 105,266 173,956 635,775 1,360,171 281,555 243,995 - 2,800,718 1.5 Off-balance sheet transactions 243,627 2,033,497 2,462,018 1,920,313 19,421 160,825 46,741 - 6,886,442 2. Liabilities 7,082,611 5,545,498 3,344,628 2,372,157 3,079,615 328,175 457,898 - 22,210,582 2.1 Due to banks 52,027 2,405,187 145,070 68,238 270,117 18,520 39,289 - 2,998,448 2.2 Deposits from customers 6,809,281 520,975 32,811 - 18,161 350 - - 7,381,578 2.3 Securities issued 125,553 564,013 732,488 356,594 2,705,894 40,963 418,609 - 4,944,114 – bonds 188 120,492 267,798 241,552 2,656,253 40,963 418,609 - 3,745,855 – certificates of deposits 29,327 443,521 464,690 115,042 49,641 - - - 1,102,221 – other securities 96,038 ------96,038 2.4 Subordinated liabilities ------2.5 Off-balance sheet - transactions 95,750 2,055,323 2,434,259 1,947,325 85,443 268,342 - - 6,886,442
Change 31/12/00 31/12/99 absolute % 11.7 ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY a) Assets 1,257,001 965,375 291,626 30.2 1. Due from banks 216,870 146,176 70,694 48.4 2. Loans to customers 656,404 500,732 155,672 31.1 3. Securities 378,501 313,791 64,710 20.6 4. Participating interests 715 715 - - 5. Other 4,511 3,961 550 13.9 (b) Liabilities 1,345,115 851,597 493,518 58.0 1. Due to banks 1,205,984 774,950 431,034 55.6 2. Deposits from customers 137,251 74,482 62,769 84.3 3. Securities issued 1,880 2,165 -285 -13.2 4. Other - - - -
128 SECTION 12
ADMINISTRATION AND DEALING ON BEHALF OF THIRD PARTIES
Change 31/12/00 31/12/99 absolute % 12.1 DEALING OF SECURITIES a) Purchases 216,358 - 216,358 … 1. Settled 215,608 - 215,608 … 2. Unsettled 750 - 750 … (b) Sales 220,560 - 220,560 … 1. Settled 219,771 - 219,771 … 2. Unsettled 789 - 789 …
During the first six months of 2000, the Bank began trading on behalf of third parties.
Change 31/12/00 31/12/99 absolute % 12.2 PRIVATE BANKING 3,881,345 4,636,122 -754,777 -16.3-16.3 1. Securities issued by the Bank 3,175 6,083 -2,908 -47.8 2. Other securities 3,878,170 4,630,039 -751,869 -16.2
The figures shown correspond to total market values of property included within administration and trading on behalf of third parties. The caption includes wealth accumulation services on behalf of third parties pursuant to article 24, Legislative decree 58/98 amounting to Lit. 4,574 million; a sum managed by the Carige Open Pension Fund launched in 1999 in compliance with article 9, Legislative decree 124/93.
Change 31/12/00 31/12/99 absolute % 12.3 CUSTODY AND ADMINISTRATION OF SECURITIES (a) third-party securities held in deposit 22,409,681 21,876,725 532,956 2.4 (private banking not included) 1. Securities issued by the Bank 4,535,027 4,465,058 69,969 1.6 2. Other securities 17,874,654 17,411,667 462,987 2.7 (b) third-party securities deposited with third-parties 21,727,333 21,324,779 402,554 1.9 (c) portfolio securities deposited with third parties 2,988,312 3,352,603 -364,291 -10.9
129 In accordance with the Bank of Italy’s guidelines, the item “third-party securities held in deposit” includes the value of those securities deposited as a guarantee for lending transactions; the Bank carries out custody and management services for the same securities. The value at 31/12/99 rose by Lit. 307,205 million. Depositary bank-related securities in custody amounted to Lit. 5,015,111 million.
12.4 COLLECTION OF THIRD PARTY RECEIVABLES: DEBIT AND CREDIT ADJUSTMENTS 31/12/00 31/12/99 (a) debit adjustments 1,313,006 979,999 1. current accounts 18,316 7,714 2. bills portfolio 774,341 675,723 3. cash 221,963 34,125 4. other 298,386 262,437 (b) credit adjustments 1,323,231 1,153,896 1. current accounts 6,915 2,658 2. bills and other items for collection 1,316,236 1,151,156 3. other 80 82
Change 31/12/00 31/12/99 absolute % 12.5 OTHER TRANSACTIONS 2,895,192 3,089,093 -193,901 -6.3 – Other banks’ share of pool operations 2,496,572 2,687,263 -190,691 -7.1 – Total bills related to factoring transactions (“pro solvendo”) 351,227 350,283 944 0.3 47,393 51,547 -4,154 -8.1
130 PART C INCOME STATEMENT
SECTION 1
INTEREST
Change 2000 1999 absolute % 1.1 CAPTION 10 "INTEREST INCOME AND SIMILAR REVENUES” 1,046,941 858,555 188,386 21.9 (a) on deposits with banks 51,419 48,658 2,761 5.7 including: – deposits with central banks 6,391 4,341 2,050 47.2 (b) on loans and advances to customers 762,912 606,567 156,345 25.8 including: – loans using funds managed on behalf of third parties 6 3 3 … (c) on certificates of indebtedness 231,934 202,550 29,384 14.5 (d) other interest income 676 780 -104 -13.3 (e) positive differentials on hedging transactions - - - -
Change 2000 1999 absolute % 1.2 CAPTION 20 “INTEREST EXPENSE AND SIMILAR CHARGES” 482,527 371,873 110,654 29.8 (a) on deposits from banks 165,384 106,796 58,588 54.9 (b) on deposits from customers 96,710 77,584 19,126 24.7 (c) on securities issued 212,991 167,315 45,676 27.3 including: – certificates of deposits 33,248 45,263 -12,015 -26.5 (d) on funds managed on behalf of third parties 5 51 -46 -90.2 (e) on subordinated liabilities - - - - (f) negative differentials on hedging transactions 7,437 20,127 -12,690 -63.0
Change 2000 1999 absolute % 1.3 CAPTION 10 "INTEREST INCOME AND SIMILAR REVENUES” a) on foreign currency assets 65,331 70,739 -5,408 -7.6
Change 2000 1999 absolute % 1.4 CAPTION 20 “INTEREST EXPENSE AND SIMILAR CHARGES” a) on foreign currency liabilities 74,346 43,559 30,787 70.7
131 SECTION 2
COMMISSION
Change 2000 1999 absolute % 2.1 CAPTION 40 “COMMISSION INCOME” 279,306 263,514 15,792 6.0 (a) guarantees given 9,224 8,556 668 7.8 (b) collection and payment services 49,916 45,736 4,180 9.1 (c) management, dealing and consultancy services: 127,200 122,168 5,032 4.1 1. securities dealing 2,039 540 1,499 … 2. foreign currency dealing 6,239 6,135 104 1.7 3. private banking 14,173 15,517 -1,344 -8.7 4. custody and administration of securities 2,793 2,321 472 20.3 5. placement of securities 84,678 86,019 -1,341 -1.6 5.1 placement of quotas in mutual funds 82,309 81,924 385 0.5 5.2 placement of other securities 2,369 4,095 -1,726 -42.1 6. Consultancy - - - - 7. door-to-door sales of securities, products and services 119 - 119 … 8. acceptance of orders 17,159 11,636 5,523 47.5 (e) other services 92,967 87,054 5,913 6.8
The caption “other services” in more detail is as follows:
Change 2000 1999 absolute % – Deposits and current accounts 34,309 33,924 385 1.1 – Overdraft facilities 19,673 18,301 1,372 7.5 – Financing 10,487 12,166 -1,679 -13.8 – Distribution of third party services 10,827 9,249 1,578 17.1 – Safe deposit rentals 2,019 2,277 -258 -11.3 – Fees for Bank as depositary for mutual funds 4,139 5,809 -1,670 -28.7 – Others 11,513 5,328 6,185 … Total 92,967 87,054 5,913 6.8
132 Change 2000 1999 absolute % 2.2 CAPTION 50 “COMMISSION EXPENSES” 21,504 16,211 5,293 32.7 (a) collection and payment services 11,878 9,837 2,041 20.7 (b) management and dealing services: 5,510 3,382 2,128 62.9 1. securities dealing 2,255 1,278 977 76.4 2. foreign currency dealing - - - - 3. private banking 983 588 395 67.2 4. custody and administration of securities 2,097 1,386 711 51.3 5. placement of securities 83 130 -47 -36.2 6. door-to-door sales of securities, products and services 92 - 92 … (c) other services 4,116 2,992 1,124 37.6
The caption "other services" in more detail is as follows:
Change 2000 1999 absolute % – Guarantees and commitments 1,765 851 914 … – Relations with banks 718 664 54 8.1 – Financing 131 178 -47 -26.4 – Intermediation 338 171 167 97.7 – Others 1,164 1,128 36 3.2 Total 4,116 2,992 1,124 37.6
133 SECTION 3
GAINS FROM FINANCIAL TRANSACTIONS, NET
Change 2000 1999 absolute % 3.1 CAPTION 60 “GAINS FROM FINANCIAL TRANSACTIONS, NET” 25,229 80,788 -55,559 -68.8
2000 Transactions securities currency other A.1 Revaluations 5,948 3,890 A.2 Write-downs 78,597 5,664 B. Other gains and losses 94,583 5,899 -830 Total 21,934 5,899 -2,604 1. Government securities 9,702 2. Certificates of indebtedness 9,161 3. Shares and other equity securities 2,089 4. Derivatives on securities as underlying 982
1999 Transactions securities currency other A.1 Revaluations 14,856 8,297 A.2 Write-downs 48,497 6,780 B. Other gains and losses 104,729 4,819 3,364 Total 71,088 4,819 4,881 1. Government securities 13,056 2. Certificates of indebtedness 7,160 3. Shares and other equity securities 48,846 4. Derivatives on securities as underlying 2026
Negative variations are attributable to securities transactions for Lit. 49,154 million (increased write-downs of Lit. 30,100 million, reduced revaluations of Lit. 8,908 million and increased gains of Lit. 10,146); a positive variation was recorded in the item relating to other transactions and currency transactions of Lit. 7,485 million (increased revaluations of Lit. 4,407 million, reduced write-downs of Lit. 4,194 million and increased gains of Lit. 1,116 million). Currency transactions recorded a positive variation of Lit. 1,080 million.
134 Other gains Revaluations Write-downs Total and losses 1. Securities transactions 5,948 78,597 94,583 21,934 Government securities 694 5,789 14,799 9,704 Certificates of indebtedness 1,940 19,604 26,830 9,166 Shares and other equity securities 2,480 52,971 52,580 2,089 Securities purchases and sales to be settled - 7 - -7 Derivatives on securities as underlying 834 226 374 982 2. Currency transactions - 1,396 7,295 5,899 Exchange-rate gains - - 3,758 3,758 Currency derivatives - 1,396 1,640 244 Forward currency transactions - - 1,897 1,897 3. Other transactions 3,890 5,664 -830 -2,604 Interest rates derivatives 3,890 5,664 -830 -2,604 Total 9,838 85,657 101,048 25,229
Gains and write-downs on securities refer to own shares for Lit. 1,671 million and Lit. 968 million. Further details of gains and losses stemming from derivatives contracts recorded or not in the income statement are given in the Board of Directors' Report and at section 10.5 of the explanatory notes.
135 SECTION 4
ADMINISTRATIVE COSTS
Change 2000 1999 absolute % 4.1 AVERAGE NUMBER OF EMPLOYEES, BY GRADE 3,083 3,070 13 0.4 (a) managers 23 26 -3 -11.5 (b) officials 238 245 -7 -2.9 (c) other employees 2,822 2,799 23 0.8
These average figures do not include the 84 employees transferred to Banca Carige as a result of the acquisition of 21 branches from Banco di Sicilia.
Change 2000 1999 absolute % NUMBER OF OPERATING BRANCHES 283 254 29 11.4
The figure includes the 21 branches acquired from Banco di Sicilia.
Change 2000 1999 absolute % CAPTION 80 A "PERSONNEL" 334,173 340,692 -6,519 -1.9 – wages and salaries 207,553 223,135 -15,582 -7.0 – social security costs 56,224 65,103 -8,879 -13.6 – termination indemnities 16,811 16,380 431 2.6 – pensions and similar commitments 23,281 21,906 1,375 6.3 – others 30,304 14,168 16,136 …
For the years 1997, 1998 and 1999, the Bank made the payments foreseen by Law 662/96 despite formally contesting the constitutional validity of the charge and reserving the right to demand reimbursement of the amounts paid. The Constitutional Court in its sentence dated 8/6/2000 no. 178 upheld the constitutionality of Law 662/96 and therefore the validity of the payments effected.
136 Change 2000 1999 absolute % CAPTION 80 B "OTHER ADMINISTRATIVE COSTS" 189,854 185,792 4,062 2.2 Postage and telephone 18,105 17,172 933 5.4 Maintenance of tangible and intangible fixed-assets 18,137 17,517 620 3.5 Advertising, promotion and publishing 11,903 11,637 266 2.3 Professional fees 19,774 13,945 5,829 41.8 Lighting and heating 6,865 6,809 56 0.8 Rental expenses 8,191 7,840 351 4.5 Donations 7,503 7,488 15 0.2 Travelling and transport 5,664 6,783 -1,119 -16.5 Other banking services 5,172 4,497 675 15.0 Printing and stationery 4,949 4,560 389 8.5 Software maintenance 4,338 5,504 -1,166 -21.2 Banking premises security services 3,682 3,893 -211 -5.4 Hardware leasing charges 2,924 3,517 -593 -16.9 Insurance premiums 3,328 3,495 -167 -4.8 Office cleaning 7,201 7,275 -74 -1.0 EDP processing with third parties 6,871 4,740 2,131 45.0 Association fees 1,340 1,039 301 29.0 Indirect taxes 39,146 43,487 -4,341 -10.0 – stamp duty and stock exchange contracts 30,046 30,774 -728 -2.4 – ”imposta sostitutiva” Presidential Decree 601/73 4,106 3,805 301 7.9 – ICI (Municipal real estate tax) 2,482 3,072 -590 -19.2 – local council taxes 1,899 1,880 19 1.0 – taxes paid abroad 332 436 -104 -23.9 – INVIM (tax on increased value on properties) 63 110 -47 -42.7 – ”Imposte sostitutive” (laws 85/95 and 124/93) 15 3,333 -3,318 -99.5 – penalties for late tax rolls 51 14 37 … – other indirect taxes 152 63 89 … Others 14,761 14,594 167 1.1
Item “other” includes the cost of assets of a unit value not exceeding Lit. 1,000,000 purchased during the year for a total price of Lit. 1,346 million and fully paid for during the period (1999: Lit. 1,054 million).
137 SECTION 5
DEPRECIATION AND AMORTIZATION, PROVISIONS AND RECOVERIES
Change 2000 1999 absolute % CAPTION 90 "DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS” 121,537 114,068 7,469 6.5
Depreciation and amortization comprise the following:
Change 2000 1999 absolute % Tangible fixed assets – Properties 8,043 7,963 80 1.0 – Furniture and fittings 1,425 1,379 46 3.3 – Machinery and equipment 9,034 9,106 -72 -0.8 – Leased assets 76,637 67,497 9,140 13.5 Total (a) 95,139 85,945 9,194 10.7 Intangible fixed assets (1) – Software 7,678 6,967 711 10.2 – Installation costs 4,195 4,601 -406 -8.8 – Goodwill 6,716 6,716 - - – Others 7,809 9,839 -2,030 -20.6 Total (b) 26,398 28,123 -1,725 -6.1 Total (a+b) 121,537 114,068 7,469 6.5
(1) Amounts relating to the ten-year tax on Increased Value of Immovable Property (INVIM), for Lit. 53 million, which are included under intangible fixed assets (Section 4, table 4.2 - Other decreases), are recorded at Caption 80b “Other administrative expenses”
Depreciation and amortization relative to the Bank’s tangible fixed assets portfolio take into consideration the useful life of each asset and correspond to the maximum valuations permitted by tax law.
Change 2000 1999 absolute % CAPTION 100 "PROVISIONS FOR RISKS AND CHARGES” 5,062 2,751 2,311 84.0 Provisions: – for bad leasing loans 600 437 163 37.3 – for in-house insurance scheme 2,728 - 2,728 … – for legal proceedings 1,734 2,314 -580 -25.1
138 Change 2000 1999 absolute % 5.1 CAPTION 120 "PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS" 91,609 74,235 17,374 23.4 (a) provisions for loan losses 91,609 74,235 17,374 23.4 including: – lump-sum allowances for country risks 631 1,427 -796 -55.8 – other lump-sum allowances 8,579 9,140 -561 -6.1 (b) provisions for guarantees and commitments - - - - including: – lump-sum allowances for country risks - - - - – other lump-sum allowances - - - -
Item (a) “Allowances for loan losses” includes Lit. 24,117 million which corresponds to a fifth of the losses stemming from the operation of securitisation.
Other provisions for Lit. 15,525 million (of which Lit. 14,609 million related to bad loans), which are related to interest on overdue loans realised during the period but retained to be not recoverable, are not recorded in the Income Statement.
Change 2000 1999 absolute % CAPTION 130 "RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS" 17,974 24,508 -6,534 -26.7 – bad loans -principal 1,683 2,337 -654 -28.0 – watchlists - principal 652 1,078 -426 -39.5 – interest - others - 2,825 -2,825 … – interest arrears on loans 4,940 8,794 -3,854 -43.8 – credits written-off 6,739 7,852 -1,113 -14.2 – interest credits related to tax collection services 80 132 -52 -39.4 – country risks 3,611 496 3,115 … – provision for guarantees and commitments 269 994 -725 -72.9
These recoveries are related to previously written down credits for which the reason for writing down ceases, fully or in part, to apply.
139 Change 2000 1999 absolute % CAPTION 140 “ADDITIONAL PROVISIONS FOR LOAN LOSSES” 10,000 5,000 5,000 …
Change 2000 1999 absolute % CAPTION 150 “WRITE-DOWNS TO FINANCIAL FIXED ASSETS” 1,708 2,842 -1,134 -39.9
Change 2000 1999 absolute % CAPTION 160 “RECOVERIES OF FINANCIAL FIXED ASSETS” - 1,953 -1,953 …
140 SECTION 6
OTHER INCOME STATEMENT CAPTIONS
Change 2000 1999 absolute % 6.1 CAPTION 70 “OTHER OPERATING INCOME” 169,192 144,722 24,470 16.9 Leasing rents 110,989 93,950 17,039 18.1 Amounts recovered from third parties 48,713 42,286 6,427 15.2 including: stamp duty recovered 28,076 27,440 636 2.3 Rental income 4,137 3,893 244 6.3 Repayments from leased assets 890 715 175 24.5 Gains from transfer and revaluation of leased assets 1,364 1,349 15 1.1 Others 3,099 2,529 570 22.5
Change 2000 1999 absolute % 6.2 CAPTION 110 “OTHER OPERATING EXPENSES” 11,976 11,330 646 5.7 Recognised losses on leased assets sold 9,596 8,642 954 11.0 Leasing charges 2,377 2,688 -311 -11.6 Others 3 - 3 …
Change 2000 1999 absolute % 6.3 CAPTION 180 “EXTRAORDINARY INCOME” 24,866 44,109 -19,243 -43.6 Tax credits following requests for refund - 5,624 -5,624 … Interest on tax credits following requests for refund - 1,245 -1,245 … Surplus in reserves for taxation 1,374 2,872 -1,498 -52.2 Gains from releases: furniture and premises 3,396 2,711 685 25.3 Gains from releases: holdings 3,970 4,933 -963 -19.5 Dividends paid by subsidiaries and collected during the year 8,775 - 8,775 … Taxes in advance of past periods - 21,368 - … Other 7,351 5,356 1,995 37.2
Dividends collected during 2000 on holdings in subsidiaries are stated at “Dividends paid by subsidiaries and collected during the year” according to the new accounting criterion applied from 31/12/00 onwards.
141 Change 2000 1999 absolute % 6.4 CAPTION 190 “EXTRAORDINARY EXPENSES” 8,154 10,112 -1,958 -19.4 Retirement incentives 4,196 4,581 -385 -8.4 Losses from releases: holdings 4 3,189 -3,185 -99.9 Losses from releases: furniture 512 367 145 39.5 Other 3,442 1,975 1,467 74.3
Change 2000 1999 absolute % CAPTION 220 “INCOME TAXES” 152,800 154,300 -1,500 -1.0 Income taxes of the period 140,254 149,309 -9,055 -6.1 Variation of taxes paid in advance -1,297 -1,414 117 -8.3 Variations of deferred taxes 13,843 6,405 7,438 … Income taxes 152,800 154,300 -1,500 -1.0
142 SECTION 7
OTHER INFORMATION REGARDING THE INCOME STATEMENT
7.1 GEOGRAPHIC DISTRIBUTION OF REVENUES
Banca Carige prevalently works in Italy; the first branch outside Italy was opened in Nice (France) on 9/7/94.
31/12/00 Other Italy Total Captions countries 10 Interest income and similar revenue 1,039,527 7,414 1,046,941 30 Dividends and other revenues 57,617 - 57,617 40 Commission income 278,482 824 279,306 60 Gains from financial transactions, net 25,208 21 25,229 70 Other operating income 169,146 46 169,192 Total 1,569,980 8,305 1,578,285
31/12/99 Other Italy Total Captions countries 10 Interest income and similar revenue 852,795 5,760 858,555 30 Dividends and other revenues 52,702 - 52,702 40 Commission income 262,733 781 263,514 60 Gains from financial transactions, net 80,769 19 80,788 70 Other operating income 144,636 86 144,722 Total 1,393,635 6,646 1,400,281
143 PART D OTHER INFORMATION SECTION 1 DIRECTORS AND STATUTORY AUDITORS
31/12/00 31/12/99 1.1 EMOLUMENTS (a) directors 2.171 1.866 (b) Statutory auditors 325 325
The amounts given refer to emoluments paid to directors and statutory auditors in the carrying out of those duties related specifically to Banca Carige, as required by article 78 of CONSOB Regulation n. 11971.
31/12/00 31/12/99 1.2 CREDITS AND GUARANTEES GIVEN (a) directors - clean credits 223 298 - guarantees given - - (b) Statutory auditors - clean credits 215 199 - guarantees given - -
The following table provides information relating to remuneration and benefits paid to Directors, Statutory Auditors and General Managers as required by article 78 of CONSOB Regulation (Deliberation n. 11971 of 14/5/99) enacting Legislative Decree 58/98. The Bank did not allocate any option shares to its Directors or General Manager during the year. GROSS SALARIES PAID TO DIRECTORS, STATUTORY AUDITORS AND GENERAL MANAGER
(article 78, CONSOB n. 11971)
NAME POSITION SALARY (before tax and social securities payments) Name / Surname Position held Length of office Emoluments Benefits Bonuses Others (1) in kind
(1) including attendance allowances and expenses
Fausto CUOCOLO CARIGE S.p.A. - 1/1/2000 - 31/12/2000 446,600,000 (*) 12,000,000 Chairman
C.R. Savona S.p.A. - 1/1/2000 - 31/12/2000 53,750,000 Deputy Chairman Director
Levante Norditalia S.p.A. -Chairman 1/1/2000 - 31/12/2000 150,000,000
Carige Vita Nuova S.p.A. - Chairman 1/1/2000 - 31/12/2000 100,000,000
(*) for services rendered as member of Editorial Board of review published by Banca Carige
143 Giorgio GIORGETTI CARIGE S.p.A.- 1/1/2000 - 31/12/2000 208,800,000 Deputy Chairman C.R. Savona S.p.A. - 1/1/2000 - 31/12/2000 33,750,000 Director
Giovanni BERNESCHI CARIGE S.p.A. - Director 217,737,635 (*) 626,792,370 Managing Diretor 1/1/2000 - 31/12/2000 General Manager 21/2/2000 - 31/12/2000 1/1/2000 - 31/12/2000 C.R. Savona S.p.A. - 1/1/2000 - 31/12/2000 37,750,000 Director and Executive Commitee Member Levante Norditalia S.p.A. - Director 1/1/2000 - 31/12/2000 30,000,000
Carige Vita Nuova S.p.A. -Director 1/1/2000 - 31/12/2000 20,000,000
Centro Fiduciario S.p.A. - Deputy 1/1/2000 - 31/12/2000 800,000 Chairman
(*) for services rendered as General Manager
Adalberto ALBERICI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 111,800,000 Director and Executive Commitee Member
Piergiorgio ALBERTI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 72,000,000 (*) 12,000,000 Director (**) 20,000,000 (*) for services rendered as member of Editorial Board of review published by Banca Carige (**) emolument for professional services related to consultancy given to a client-user of Bank’s leased asset
Piero Guido ALPA CARIGE S.p.A. - 1/1/2000 - 31/12/2000 71,600,000 (*) 12,000,000 Director (*) for services rendered as member of Editorial Board of review published by Banca Carige
Maurice BENUSILHO CARIGE S.p.A. - 1/1/2000 - 2/5/2000 28,703,226 Director
Jean Jacques BONNAUD CARIGE S.p.A. - 1/1/2000 - 31/12/2000 69,764,490 Director
Giorgio BUGLIONI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 114,200,000 Director and Executive Commitee Member
G.B. CANEVELLO CARIGE S.p.A. - 1/1/2000 - 31/12/2000 74,800,000 Director
Ferdinando MENCONI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 72,800,000 Director Levante Norditalia S.p.A. - Managing 1/1/2000 - 31/12/2000 465,187,000 (*) 64,845,000 Director Carige Vita Nuova S.p.A. - Managing 1/1/2000 - 31/12/2000 366,153,800 Director (*) for services rendered as General Managers from'1/1/2000 to 31/3/2000
Giovanni MERELLA CARIGE S.p.A. -Director and 1/1/2000 - 31/12/2000 110,600,000 Executive Commitee Member
144 Dominique MONNERON CARIGE S.p.A. - 23/5/2000 - 31/12/2000 48,603,226 Director
Romeo PANIZZI CARIGE S.p.A. - Director 1/1/2000 - 31/12/2000 80,000,000
C.R. Savona S.p.A. - 1/1/2000 - 31/12/2000 37,750,000 Director and Executive Commitee 18/4/2000 - 31/12/2000 Member
Vincenzo ROPPO CARIGE S.p.A. - 1/1/2000 - 31/12/2000 74,000,000 (*) 12,000,000 Director (*) for services rendered as member of Editorial Board of review published by Banca Carige
Giorgio SAVINELLI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 84,200,000 Director
Alessandro SCAJOLA CARIGE S.p.A. - 1/1/2000 - 31/12/2000 117,800,000 Director and Executive Commitee Member
Oliviero TAROLLI CARIGE S.p.A. - 1/1/2000 - 31/12/2000 67,600,000 Director Levante Norditalia S.p.A. - Deputy 1/1/2000 - 31/12/2000 60,000,000 Chairman
Carige Vita Nuova S.p.A. - Deputy 1/1/2000 - 31/12/2000 50,000,000 Chairman
Giuliano VALLE CARIGE S.p.A. - 1/1/2000 - 31/12/2000 99,400,000 Director and Executive Commitee Member
Fulvio ROSINA CARIGE S.p.A. - 1/1/2000 - 31/12/2000 135,000,000 Chairman of Board of Statutory Auditors Galeazzo S.r.l. - 1/1/2000 - 31/12/2000 5,000,000 Chairman of Board of Statutory Auditors Columbus Carige Imm.re S.p.A. - 1/1/2000 - 31/12/2000 8,400,000 Chairman of Board of Statutory Auditors
Giacomo CATALFAMO CARIGE S.p.A. - 1/1/2000 - 31/12/2000 95,000,000 Auditor
Galeazzo S.r.l. - 1/1/2000 - 31/12/2000 3,400,000 Auditor Levante Norditalia S.p.A. - Auditor 1/1/2000 - 31/12/2000 44,900,000
Angelo COSTIGLIOLO CARIGE S.p.A. - 1/1/2000 - 31/12/2000 95,000,000 Auditor Imm.re Ettore Vernazza S.p.A. - 1/1/2000 - 31/12/2000 3,400,000 Auditor Centro Fiduciario S.p.A. - Auditor 1/1/2000 - 31/12/2000 4,950,000
Carige Vita Nuova S.p.A. - 1/1/2000 - 31/12/2000 35,000,000 Auditor The remuneration and benefits include also those paid by Cassa di Risparmio di Savona SpA.
145 SITUATION OF PENSION FUND
CHANGES IN SUPPLEMENTARY PENSION FUND
Pursuant to art. 9 of the fund regulation, approved on 23rd January 1992, the following are beneficiaries of the Supplementary Pension Fund: - all staff employed by Cassa di Risparmio di Genova ed Imperia (including those employed by the Tax Collection Service on duty on 1st January 1973 or employed subsequently) in service at 30th November 1991 and transferred to Banca Carige SpA on 1st December 1991, excluding temporarily employed staff. Staff taken on from 1st December 1991 onwards are beneficiaries of a timed fixed-payment cover; - the staff of Istituto di Credito Fondiario della Liguria SpA who were on duty on 31st December 1991; - the staff of Mediocredito Ligure SpA who were on duty on 31st December 1991. 31/12/00 31/12/99 Opening balances 574,352 573,657 Closing balances 575,943 574,352 Net changes of the year 1,591 695
Incomes related to assets captions 22,073 20,506 Employees’ contributions 1,499 1,488 Pension paid 21,926 21,167 Voluntary state pension fund payments 55 132
The Supplementary Pension Fund is an in-house reserve without corporate identity recorded in the Directory of Pension Funds, 3rd special section, no. 9,004 since 14/10/99.
The closing balance of the fund - Lit 575,943 million – corresponds to actuarial calculations on the basis of cover capital criteria for amounts sufficient to guarantee requiriments as foreseen by the Pension Fund regulations for those eligible.
The actuary’s evaluation is made annually and for future requirements an interest rate of 3% was applied.
The Fund, in line with the provisions of the provisions of the Pension Fund regulations, was created by regular provisions and presents the following composition: 31/12/00 31/12/99 - Bonds 415,253 427,593 - Shares and quotes 67,769 67,769 - tangible fixed assets assets (1) 50,671 44,682 - Cash to allocate 42,250 34,308 Total 575,943 574,352
(1) Balance sheet value
146 SECTION 2 PARENT COMPANY OR EU LENDING INSTITUTION AS HOLDING
2.1 NAME BANCA CARIGE SpA - Cassa di Risparmio di Genova e Imperia
2.2 LOCATION AND REGISTRED OFFICES Genova, Via Cassa di Risparmio n. 15.
Law Court of Genoa registration no. 55882. Chamber of Commerce (C.C.I.A.) of Genoa registration no. 331717.
Banca Carige is recorded in the register of banks (no. 6175/4) and it belongs, as parent company, to Banca Carige Group, recorded in the special register pursuant to Decree no. 356/90.
The Board of Directors
Genoa, 28 March 2001
147 PROPOSED RESOLUTION
148 ADOPTION OF ANNUAL REPORT AND ALLOCATION OF NET PROFIT
Shareholders of Banca Carige, We present for your approval the Annual Report for 2000 made up by balance sheet and income statement, explanatory notes and attachments supplemented by the Board of Directors’ report in addition to those prepared by the Board of Statutory Auditors and the Board of Independent Auditors.
We propose the following distribution of net profit of Lit. 190,221,275,910 and of Lit. 899,850,000 in the form of dividends for the year 1999 relative to Banca Carige’s own share portfolio and allocated on distribution to a specific reserve (for a total amount of Lit. 191,121,125,910):
- Legal reserve Lit. 19.022.127.591 - Reserve D. Lgs. 17/5/99 n. 153 Lit. 10.382.788.681 - Taxed extraordinary reserve Lit. 18.878.638.138 - Shareholders' dividends per share: Lit 725 for total dividends distributed of Lit. 142.837.571.500
We also propose that dividends be payable from 7th May 2001 after distribution on 10th May 2001 in accordance with Borsa Italiana regulation of 20/12/99, and relevant legislation.
If approved, the Bank’s net equity, after allocation of net profit, which includes provisions to the general banking risk fund, would rise to Lit. 2,566,494 million.
We also propose that dividends on the Bank’s own shares be destined to the reserve for dividends on own shares .
Genoa, 28 March 2001 The Board of Directors
149 REPORT OF THE BOARD OF STATUTORY AUDITORS
150 STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING, in accordance with article 153 of Legislative Decree 58/98 and article 2429 section 3 of the Italian civil code
To the shareholders of Banca Carige SpA,
During the business year ending 31/12/2000 we carried out those supervisory duties foreseen by law in accordance with the Code of Best Practice recommended by the Italian Council of Chartered Accountants.
In particular: n we took part both in the meetings of the parent company’s Board of Directors and Executive Committee and received on a quarterly basis (in accordance with article 150 of Legislative Decree 55/98 and article 20 of the Bank’s By-Laws) information concerning the activities of the Bank in addition to significant economic, financial and asset-related transactions carried out by the Bank and/or its subsidiaries. n All such transactions were carried out in accordance with the Bank’s By-Laws. Furthermore, we were aware of no actions which could be deemed imprudent, irresponsible or representing a conflict of interest or in contrast with the decisions taken by the Shareholders’ Meeting. n Pursuant with CONSOB communication no DAC/RM/97001574 dated 20/2/97, during the course of the year the Board of Directors of Banca Carige met 23 times, its Executive Committee 81 times and the Board of Statutory Auditors 21 times. n During the year we had regular meetings with the external auditors, KPMG SpA, in which there were reciprocal exchanges of information. n The Boards of Statutory Auditors of the Bank’s subsidiaries were asked to inform us promptly of their observations, findings or proposals regarding any actions or events affecting the companies’ assets and finances, the economic results of the Group as a whole and an evaluation of the reliability and adequacy of the Group’s financial statements. n The parent company, Banca Carige SpA, communicated adequate and complete instructions to its subsidiaries pursuant to article 114, section 2, Legislative decree 58/98. n Banca Carige SpA, the parent company of the Banca Carige Group communicated adequate and complete instructions to its subsidiaries as foreseen by the Consolidated banking Law and the regulatory indications issued by the Bank of Italy; n within the scope of this Board’s competence, we monitored the adequacy of the Bank’s organisational structure, and the respect of the codes of best practice concerning its administration by means of relevant documentation provided by the Bank’s senior offices in addition to meetings with the external auditors; n We evaluated and monitored the adequacy of the Bank’s systems of internal control and administration/accounting. With regards to the latter, information was collected from senior officers in the form of company documents and audit analyses in order to verify that such a system was suitably equipped to give a true and fair picture of the Bank’s affairs. n In particular, throughout the year we controlled the Bank’s internal monitoring of all its risk profiles (liquidity, solvency, interest-rate, credit, market and exchange rate) and can confirm the Bank’s position throughout the year within the limits of all indicators fixed by the Bank of Italy and the Interbank Deposit Protection Fund - FITD. n We confirmed that the senior officer responsible for internal control has no powers connected to the offering of investment services, which fall under the same system of control.
During the year no irregularities warranting censure or report to regulatory bodies came to light.
151 Pursuant to Legislative decree no. 58 of 24/2/98, KPMG SpA audited the financial statements of Banca Carige SpA as at and for the year ended 31/12/00 and reviewed the contents of the directors’ report for consistency with the financial statements.
We examined the external auditors’ report issued pursuant to article 156 of Legislative decree 58/98 which expressed the view that the financial statements are clearly stated and give a true and fair picture of the financial position and results of the Bank at 31/12/2000.
By means of direct supervision or through information provided by the external auditors, we can confirm that the structure of the financial statements and the directors’ report is in accordance with relevant legislation.
In particular, we can report that: n the accounting principles are in compliance with legislation and are suitable for the Bank’s activities; n balance sheet and income statement figures are expressed in Lira and Euro; the latter derives from the application of the exchange translation rate required by CONSOB recommendation no. 98083971 dated 26th October 1998; n the present financial statements correspond to the events and information which came to our attention during the various meetings of the Bank’s Board of Directors and in the course of our supervisory activity; n the explanatory notes contain information which the banking industry is required to provide to Consob (communication no. 1011405 of 15th February 2001 adopted pursuant to article 114, Legislative decree 58/98) relating to certain significant events which occurred during 2000; n in the explanatory notes, the Directors illustrate the ceding without recourse of a portion of the bad loan portfolio of Banca Carige within the confines of Law 130/99 relative to the securitisation of credit. The transaction, performed on 21/12/2000, was effective from 31/12/00 and related to a gross balance sheet value of customer loans amounting to Lit. 566.4 bn classified as bad loans at 30/11/2000 and backed at the same date either fully or in part by voluntary or legally imposed guarantees. Securitisation determined a reduction in the value of the loans ceded amounting to Lit. 120.6 bn, which was recorded at caption 130 ‘Share premium reserve’ as foreseen by article 6, Law 130/99. The total will be written down on a straight- line basis from the income statement over five years starting from the year in which the reduction in value of the loans ceded occurred (2000). n details are supplied in the explanatory notes of changes made during 2000 to the accounting criterion applied to dividends on direct holdings: unlike previous years, these dividends will be recorded in the same accounting period as related profits, as foreseen by the accounting principles of Italian Chartered Accountants and Bookkeepers, and Consob.
The changes both on the balance sheet and income statement produced by applying the criterion referred to above are outlined in the explanatory notes along with pro-forma data for 2000 and 1999 illustrating the effects of the new criterion as requested by Consob in its communication no. 99059009 dated 30/7/99 confirmed by communication DEM/81948 of 3/11/2000; n the Directors’ Report was prepared in accordance with, and contains information required by, relevant legislation and is consistent with the balance sheet data and results provided.
With reference to CONSOB communications no. DAC/98079574 dated 9/19/98 and no. 99066608 dated 10/9/99, the Directors in their report illustrate the adequacy and effectiveness of the steps taken to avoid year 2000-related problems.
The Board of Directors Report illustrates the action plan to handle year-2000 related problems and the transition to the euro; the accounting of the costs related to both is outlined in the explanatory notes.
Pursuant to CONSOB communication no. DAC/RM/97001574 dated 20/2/97 we inform you that: n The Board of Directors’ Report states that dealings with its subsidiaries and associated undertakings are these connected to the normal activity of the Bank and are regulated by market conditions;
152 n during the year Banca Carige acquired from its subsidiary Levante Norditalia SpA the remaining 40% of the share capital of CARIGE Vita Nuova SpA. As a result of this acquisition, Banca Carige’s holding rose to 92.8%. The purchase price was based on an independent assessment carried out by experts of the economic value of CARIGE Vita Nuova; n during the year we received no reports from shareholders as foreseen by article 2408; n the external auditors were encharged by the Bank to report on the offering circular accompanying its Euro Medium Term Note programme; they were also encharged on 27th April 2000 with the auditing of the annual statements for the Bank and the Group for the period 2000/2002 as well as the limited review of half-yearly statements for the Bank and the Group at 30 June 2000, 2001 and 2002; n during the course of the year there were no transfers of securities from the investment and trading securities portfolio or vice versa; n during its meeting of 12th February 2001, the Board of Directors of Banca Carige deliberated the adherence of the Bank to the Code of Self-Regulation for Listed Companies prepared by the Committee for Corporate Governance.
In the light of the above and on the basis of information provided by the external auditors both in their periodic review of the Bank’s affairs and in their auditing of these financial statements, no events came to our attention which could inhibit the approval of the Bank’s balance sheet as at and for the year ended 31/12/2000 and the proposed distribution of net profit.
Genoa, 10th April 2001,
The Board of Statutory Auditors
153 REPORT OF THE INDEPENDENT AUDITORS
154
ATTACHMENTS
157 STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(millions of Italian Lire)
Capital Additional Legal Reserve Taxed Revaluation Reserve for stock paid-in capital reserve (art. 55 extraordinary reserve incorporation decree 917/86) reserve
Shareholders' equity at 31/12/99 1,970,173 299,189 53,191 253 92,086 15,405 23,895 Allocation of 1999 net income - reserves 18,257 24,942 - dividends paid
Allocation to reserve for dividends on own shares Capital increase - 57,821
Reserve for the purchase of treasury stock
Provision to merger reserve 2000 net income
Stockholders' equity at 31/12/00 1,970,173 241,368 71,448 253 117,028 15,405 23,895
158 Reserve for the purchase of Reserve for the Merger Reserve ex Reserves for Reserves for dividends Net income Total treasury stock disposable amount purchase of treasury reserve D.Lgs general banking on own share stock 17/5/99 n. risk 153
25,212 9,788 32,120 0 10,000 1,299 181,645 2,713,943
1,925 - 45,124 900 - 136,613 - 135,713
- 1,299 - 1,299 - 57,821
- 24,342 - 24,342
24,342 24,342 190,221 190,221
870 34,130 32,120 1,925 10,000 900 190,129 2,709,331
159 STATEMENT OF CASH FLOW
1999 2000
FUNDS GENERATED BY OPERATIONS (A) 625,380 723,781
Distributable net income for the year 181,645 190,221
Adjustment to: 237,744 298,482 - tangible fixed assets 85,945 95,139 - intangible fixed assets 28,123 26,398 - financial fixed assets 889 1,708 - trading securities 48,497 78,597 - loan and advances to credit institutions 696 569 - loan and advances to customers 73,594 96,071
Provisions for: 205,991 235,078 - reserves for loan losses and leasing transactions 5,000 10,000 - termination indemnities 16,376 21,944 - pensions and similar commitments 21,994 23,572 - taxation 156,831 155,149 - other assets 5,790 24,413
Provisions to concentration reserve - -
USE OF FUNDS GENERATED BY OPERATIONS (B) 360,672 450,090
Use for: - taxation 140,296 151,365 - termination indemnities 12,722 14,936 - pensions and similar commitments 21,299 21,981 - loan losses 61,230 116,373 - reserves for loan losses 6,000 5,000 - other assets 2,461 3,423 - dividends paid 116,664 137,012
CASH FLOW (A-B) 264,708 273,691
INCREASE IN FUNDS TAKEN AND DECREASE IN FUNDS APPLIED (C) 2,156,661 2,734,083
Increase in: 1,013,496 2,694,000 - amount owed to credit institutions - 1,523,526 - amount owed to customers 156,193 537,404 - debts evidenced by certificates 379,652 528,094 - funds managed on behalf of third parties - 5 - other liabilities 21,651 21,481 - accrued expenses and deferred income - 83,490 - capital stock 285,000 - - additional paid-in capital 171,000 -
Decrease in: 1,143,165 40,083 - cash in hand, balances with central banks and post offices - - - securities 662,865 - - loans and advances to credit institutions 447,131 - - loans and advances to customers - - - financial fixed assets - - - tangible fixed assets - - - intangible fixed assets - - - own shares 19,373 - - other assets 2,810 40,083 - accrued income and prepaid expenses 10,986 -
INCREASE IN FUNDS APPLIED AND DECREASE IN FUNDS TAKEN (D) 2,421,369 3,007,774
- Increase in: 1,886,604 2,949,953 - cash in hand, balances with central banks and post offices 6,534 59,412 - securities - 125,818 - loans and advances to credit institutions - 657,542 - loans and advances to customers 1,141,827 1,570,266 - financial fixed assets 498,368 133,448 - tangible fixed assets 213,017 207,930 - intangible fixed assets 26,858 134,419 - own shares - 24,342 - other assets - - - accrued income and prepaid expenses - 36,776
Decrease in: 534,765 57,821 - amount owed to credit institutions 508,120 - - amount owed to customers - - - debts evidenced by certificates - - - funds managed on behalf of third parties 5,880 - - other liabilities - - - accrued expenses and deferred income 20,765 - - capital stock - - - additional paid-in capital - 57,821
TOTAL OF FUNDS GENERATED AND TAKEN (A+C) 2,782,041 3,457,864
TOTAL OF FUNDS APPLIED (B+D) 2,782,041 3,457,864
Millions of Italian Lire
160 STATEMENT IN ACCORDANCE WITH161 ART. 7, C. 2 OF LAW 218/90 (ABSTRACT)
(millions of Italian Lire)
Goods value Opening balance Increases Decreases Closing balances Market value Property Book value 41,344 - 8,769 32,575 8,888 Fiscal value 26,239 - 2,895 23,344 8,888 Securities Book value 38,246 253 12,668 25,831 11,725 Fiscal value 34,527 253 10,550 24,230 11,725 Holdings Book value 489,429 - 2,803 486,626 6,054 Fiscal value 176,400 - 226 176,174 6,054 Total Book value 569,019 253 24,240 545,032 26,667 Fiscal value 237,166 253 13,671 223,748 26,667
161 FORM OF TOTAL TAX CREDITS ATTRIBUTABLE TO SHAREHOLDERS, RELATED TO DIVIDEND PAYOUT (art. 105 c. 1/A AND C. 1/B DECREE 917/86)
(Italian Lire)
Tax pursuant Tax pursuant to article 105 (c.1/a) to article 105 (c.1/b)
A) Opening balance at 1/1/2000 227,852,198,000 920,215,000 B) Increases in the form of: B1) Taxes paid in tax returns for 1999 110,643,527,000 6,963,261,000 B2) Revenues benefiting from form of tax 2,014,203,000 relief in 1999 for the calculation of tax credits to be destined to shareholders C) Amounts attributable to dividends 338,495,725,000 9,897,679,000 distribuited in 2000 D) Decreases in the form of: D1) Dividends distribuited in 2000 80,467,317,000 E) Increases in the form of: E1) A tenth of 56,25% of exemption 19,318,278,000 "not utilised at 31/12/1997 F) Closing balance at 1/1/2001 277,346,686,000 * 9,897,679,000
*This amount, necessary for the calculation of dividends to be distributed in 2001, will increase as a result of corporation tax (IRPEG) related to tax returns for 2000.
162 PROPERTIES (excluding leased fixed assets)
(Italian Lire) Location cost price Revaluation Revaluated Depreciation Balance presunto (1) cost fund at 31/12/00 sheet value realizzo al 31/12/00
ProductiveProductive
Head office Via Cassa di Risparmio 15 Genoa 13,781,228,099 85,397,786,186 99,179,014,285 23,719,900,804 75,459,113,481 85,200,000 UpgradingUpgrading " " 682,580,952 682,580,952 20,477,429 662,103,523 Banca continua Via XXV Aprile 10/12 r. Genoa 93,956,171 1,314,264,994 1,408,221,165 26,307,731 1,381,913,434 1,400,000 Other head office Vico Monte di Pietà 4 Genoa 50,000,000 5,792,625,000 5,842,625,000 50,000,000 5,792,625,000 5,800,000 buildings Piazza dei Garibaldi 29 r. Genoa 6,000,000 115,115,000 121,115,000 6,000,000 115,115,000 116,000 Via D. Chiossone 7 - fondi Genoa 5,000,000 439,262,500 444,262,500 5,000,000 439,262,500 440,000 Via D. Chiossone 12 Genoa 326,500,000 8,606,131,250 8,932,631,250 321,602,500 8,611,028,750 8,700,000 Vico Monte di Pietà 6/8 r. Genoa 133,000,000 188,407,500 321,407,500 133,000,000 188,407,500 218,000 Vico Monte di Pietà 10 r. Genoa 1 115,999,999 116,000,000 116,000,000 116,000 Vico dei Garibaldi 47 r. Genoa 1 57,999,999 58,000,000 58,000,000 58,000 Vico Monte di Pietà 10 Genoa 1 533,999,999 534,000,000 534,000,000 534,000 Via D. Chiossone 7/6 Genoa 1 74,999,999 75,000,000 75,000,000 75,000 Via D. Chiossone 10 Genoa 96,381,500 525,425,506 621,807,006 96,381,500 525,425,506 534,000 Piazza dei Garibaldi 33 r. Genoa 14,000,000 113,725,000 127,725,000 14,000,000 113,725,000 116,000 Piazza dei Garibaldi 31 r. Genoa 77,090,550 94,221,926 171,312,476 76,319,655 94,992,821 116,000 Via G. D'Annunzio Torri E e F Genoa 30,285,632,807 20,335,364,472 50,620,997,279 25,655,387,709 24,965,609,570 36,000,000 LayoutLayout 156,564,250 156,564,250 4,696,928 151,867,322 Via G. D'Annunzio Torri E e F 2° p. Genoa 1,551,960,000 1,123,642,732 2,675,602,732 896,256,900 1,779,345,832 Warehouse Via Emilia 48 C E r. Genoa 1,077,098,340 1,893,658,217 2,970,756,557 1,034,014,403 1,936,742,154 3,230,000 Via Emilia 48 D r. Genoa 469,230,960 824,960,016 1,294,190,976 422,307,864 871,883,112 Via G. D'Annunzio "A" (q.9,40) Genoa 35,483,000 46,782,583 82,265,583 31,934,701 50,330,882 60,000 Via G. D'Annunzio "B" (q.10,75) Genoa 52,865,000 80,307,788 133,172,788 47,578,501 85,594,287 100,000 Via G. D'Annunzio "B" (q.10,75) Genoa 93,040,000 125,342,600 218,382,600 83,736,000 134,646,600 160,000 Via G. D'Annunzio "C" (q.14,95) Genoa 312,467,000 413,606,043 726,073,043 281,220,301 444,852,742 530,000 Car parking Corso Sardegna Genoa 14,500,000 67,643,750 82,143,750 14,500,000 67,643,750 70,000 Warehouse Via Arrivabene 39 r. Genoa 125,581,510 1,570,709,252 1,696,290,762 110,511,721 1,585,779,041 1,620,000 Car parking areas Via G. D'Annunzio - 66 posti auto Genoa 1,496,100,240 1,451,004,618 2,947,104,858 1,374,792,172 1,572,312,686 1,980,000 Archivie Via Pelio 6 Genoa 1,477,875,708 4,955,087,127 6,432,962,835 2,633,833,026 3,799,129,809 5,400,000 Archivie Via Pelio 6 Genoa 208,500,000 212,524,959 421,024,959 75,060,000 345,964,959 Archivie Via Pelio 6 Genoa 231,833,971 288,451,501 520,285,472 83,460,228 436,825,244 Archivie Via Monticelli 13/2 Genoa 20,029,000 99,971,000 120,000,000 20,029,000 99,971,000 120,000 Employess club Via Pisa 58 Genoa 1 3,049,999,999 3,050,000,000 3,050,000,000 3,050,000 Genoa branch no. 41 Via G. D'Annunzio 25-29c-39-41-63-73-81Genoa 2,272,746,177 7,310,807,554 9,583,553,731 4,310,108,182 5,273,445,549 17,600,000 EDP Centre Via Isonzo 21 Genoa 3,040,300,000 24,701,115,250 27,741,415,250 3,009,897,000 24,731,518,250 25,560,000 LayoutLayout Genoa 100,116,004 100,116,004 3,003,480 97,112,524 Genoa branch no. 39 Piazza delle Americhe 1 Genoa 10,026,767,202 3,346,114,042 13,372,881,244 4,186,175,306 9,186,705,938 11,919,000 LayoutLayout 327,662,786 327,662,786 9,829,884 317,832,902 Main office Milan Piazza Pattari 5-7 Milan 4,177,600,000 10,310,139,017 14,487,739,017 4,010,496,000 10,477,243,017 20,000,000 Main office Milan Piazza Pattari 5-7 2° p. Milan 1,593,600,000 3,932,936,983 5,526,536,983 1,386,432,000 4,140,104,983 Main office Milan Piazza Pattari 5-7 3° p. Milan 2,737,241,782 945,840,000 3,683,081,782 704,824,071 2,978,257,711 LayoutLayout 40,821,551 40,821,551 1,224,647 39,596,904 Main office Turin Corso Matteotti 13 Turin 1,300,000,000 2,822,500,000 4,122,500,000 516,750,000 3,605,750,000 3,960,000 Genoa branch no. 1 Via Cesarea 60 r. Genoa 139,108,000 2,609,744,010 2,748,852,010 139,108,000 2,609,744,010 2,640,000 Genoa branch no. 2 Via B. Buozzi 57- 58 rr. Genoa 118,000,000 637,285,000 755,285,000 118,000,000 637,285,000 660,000 Genoa branch no. 2 Piazza Dinegro 2-3-4 rr. Genoa 225,000,000 225,000,000 47,250,000 177,750,000 225,000 Genoa branch no. 3 Via G. Torti 80 r. Genoa 4,195,000 21,186,803 25,381,803 4,195,000 21,186,803 1,980,000 Genoa branch no. 3 Via G. Torti 24 Genoa 363,100,000 1,833,832,685 2,196,932,685 337,683,000 1,859,249,685 Genoa branch no. 4 Via Lagustena 40/48 Genoa 1,650,000,000 1,108,951,145 2,758,951,145 917,439,233 1,841,511,912 2,178,000 Genoa branch no. 5 Via Monticelli 70 r. Genoa 92,159,200 147,926,836 240,086,036 92,159,200 147,926,836 2,640,000 Genoa branch no. 5 Via Monticelli Genoa 1,250,000,000 2,006,403,538 3,256,403,538 1,125,000,000 2,131,403,538 Genoa branch no. 6 Piazza Dante 30 r. Genoa 104,605,600 1,623,172,337 1,727,777,937 104,605,600 1,623,172,337 2,640,000 Genoa branch no. 6 Via Fieschi 47 r. Genoa 63,643,200 987,555,941 1,051,199,141 63,643,200 987,555,941 Genoa branch no. 7 Via della Liberta' 68-70-72-74-74A-78 rr. Genoa 32,616,080 338,461,529 371,077,609 29,843,703 341,233,906 990,000 Genoa branch no. 7 Via L. Pareto 6/8 Genoa 60,000,000 622,628,216 682,628,216 59,100,000 623,528,216 Genoa branch no. 8 Piazza S. Sabina 6 Genoa 729,000,000 2,390,317,500 3,119,317,500 677,970,000 2,441,347,500 2,640,000 Genoa branch no. 9 Corso Sardegna 94 r. Genoa 5,300,000 26,903,307 32,203,307 5,300,000 26,903,307 1,584,000 Genoa branch no. 9 Corso Sardegna 90 r. Genoa 1,250,000 6,345,120 7,595,120 1,250,000 6,345,120 Genoa branch no. 9 Corso Sardegna 96 r. p.t. Genoa 55,000,000 279,185,264 334,185,264 55,000,000 279,185,264 Genoa branch no. 9 Corso Sardegna 44/1 Genoa 234,135,710 1,188,495,271 1,422,630,981 224,770,275 1,197,860,706 Genoa branch no. 9 Corso Sardegna 98 r. Genoa 247,409,700 247,409,700 18,555,728 228,853,972 250,000 Genoa branch no. 10 Via S. Vincenzo 26 Genoa 646,479,648 1,712,016,926 2,358,496,574 646,479,648 1,712,016,926 1,980,000 Genoa branch no. 10 Via Galata 51 A r. Genoa 50,000,000 132,410,736 182,410,736 50,000,000 132,410,736 Genoa branch no. 11 Via Piacenza 94 E Genoa 743,785,000 900,074,558 1,643,859,558 691,720,051 952,139,507 1,188,000 Genoa branch no. 11 Via Piacenza 179 G Genoa 16,567,775 20,049,117 36,616,892 7,952,528 28,664,364 Genoa branch no. 13 Via XII Ottobre 7 r. Genoa 82,500,000 3,155,831,250 3,238,331,250 82,500,000 3,155,831,250 3,168,000 Genoa branch no. 14 Piazza Manin 2/1 Genoa 11,359,260 574,471,765 585,831,025 11,359,260 574,471,765 924,000 Genoa branch no. 14 Piazza Manin 2/1 Genoa 6,815,900 344,700,456 351,516,356 6,713,664 344,802,692 Genoa branch no. 15 Via Napoli 40 r. Genoa 27,763,000 457,904,958 485,667,958 27,763,000 457,904,958 462,000 Genoa branch no. 16 Viale des Geneys 2/1 - 2/A/B/C/D/E Genoa 750,000,000 908,625,000 1,658,625,000 675,000,000 983,625,000 1,188,000 Genoa branch no. 17 Via Posalunga 11 r. Genoa 7,473,312 68,336,756 75,810,068 2,241,990 73,568,078 430,000 Genoa branch no. 17 Via Timavo 96 - 104 r. Genoa 35,031,062 320,327,740 355,358,802 10,509,320 344,849,482 Genoa branch no. 17 Via Posalunga 5 r. Genoa 13,874,000 195,669,163 209,543,163 13,874,000 195,669,163 Genoa branch no. 17 Via Timavo 86-94 Genoa 41,703,650 588,159,023 629,862,673 36,699,212 593,163,461 Genoa branch no. 17 Via Posalunga 7-9 r. Genoa 17,463,370 246,291,119 263,754,489 14,756,545 248,997,944 1,100,000 Genoa branch no. 18 Via Corsica 13-19 r. Genoa 126,184,259 1,293,840,552 1,420,024,811 126,184,259 1,293,840,552 1,320,000 Genoa branch no. 19 Via Quinto 38 r. Genoa 85,000,000 524,387,500 609,387,500 85,000,000 524,387,500 528,000 Genoa branch no. 20 Via Avio 2 r. Genoa 410,018,000 2,200,717,305 2,610,735,305 346,465,210 2,264,270,095 2,376,000 Genoa branch no. 20 Via Pesce - Via Mamiani 3 Genoa 178,460,000 631,000,250 809,460,250 178,460,000 631,000,250 660,000 Genoa branch no. 21 Via Sestri 114 r. Genoa 204,269 3,139,010 3,343,279 204,269 3,139,010 4,630,000 Genoa branch no. 21 Via Sestri 24/1 r. Genoa 36,600 562,434 599,034 11,530 587,504 Genoa branch no. 21 Via Donizetti 46/46A/46B/48 Genoa 150,000,000 2,305,055,953 2,455,055,953 142,500,000 2,312,555,953 Genoa branch no. 21 Via Donizetti 8 A/3 - 8 A/4 Genoa 19,900,000 305,804,090 325,704,090 19,900,000 305,804,090 Genoa branch no. 21 Via Donizetti 8 A/1 - 8 A/2 Genoa 19,900,000 305,804,090 325,704,090 19,900,000 305,804,090 Genoa branch no. 21 Via Donizetti 8 A - 46 - 48 Genoa 50,000,000 768,351,984 818,351,984 50,000,000 768,351,984 Genoa branch no. 21 Via Donizetti 50 r. Genoa 12,600,000 193,624,700 206,224,700 5,008,500 201,216,200 Genoa branch no. 21 Via Donizetti 52 r. Genoa 12,600,000 138,502,500 151,102,500 4,536,000 146,566,500 Genoa branch no. 21 Piazza Rosolino Pilo 1 Genoa 81,900,450 8,099,550 90,000,000 24,570,098 65,429,902 90,000 LayoutLayout Genoa 436,959,570 436,959,570 13,108,787 423,850,783 Genoa branch no. 22 Piazza Sebastiano Gaggero 9 r. Genoa 440,000,000 1,791,549,261 2,231,549,261 382,800,000 1,848,749,261 1,980,000 Genoa branch no. 22 Via Don G. Verità 28 r. Genoa 2,100,000 8,550,576 10,650,576 2,100,000 8,550,576 Genoa branch no. 22 Via Don G. Verità 6/2 Genoa 505,750 2,059,264 2,565,014 212,422 2,352,592
163 Estimated Location cost price Revaluation Revaluated Depreciation Balance Break-up (1) cost fund at 31/12/00 sheet value value at 31/12/00
LayoutLayout Genoa 73,734,837 73,734,837 2,212,045 71,522,792 Genoa branch no. 23 Via Pastorino 26 - Via Custo 22 r. Genoa 1,195,596,410 1,760,468,601 2,956,065,011 1,195,596,410 1,760,468,601 2,376,000 Genoa branch no. 23 Via G.B. Custo 18 - 20 r. Genoa 170,000,000 250,318,301 420,318,301 153,000,000 267,318,301 Genoa branch no. 24 Via F. del Canto 4 A Genoa 10,345,000 790,474,113 800,819,113 10,345,000 790,474,113 792,000 Genoa branch no. 25 Via G. Jori 22 A - B Genoa 22,423,230 575,803,137 598,226,367 18,947,632 579,278,735 792,000 Genoa branch no. 25 Via G. Jori 22/1 Genoa 8,000,000 205,430,934 213,430,934 8,000,000 205,430,934 Genoa branch no. 26 Via Martiri della Libertà 3 A Genoa 72,436,885 374,365,309 446,802,194 72,436,885 374,365,309 1,056,000 Genoa branch no. 26 Via Garelli 11 r. Genoa 119,988,500 620,119,597 740,108,097 104,389,995 635,718,102 Genoa branch no. 26 Via Garelli 5 - 7 - 9 r. Genoa 531,035,450 531,035,450 159,310,641 371,724,809 550,000 Genoa branch no. 26 Via Martiri della Libertà 7-9 Genoa 486,200,000 13,800,000 500,000,000 102,102,000 397,898,000 500,000 Genoa branch no. 27 Via Oberdan 120 A Genoa 6,000,000 1,055,115,000 1,061,115,000 6,000,000 1,055,115,000 1,056,000 Genoa branch no. 28 Via Molassana 70 r. - Via S. D'Acquisto Genoa 12,000,000 790,230,000 802,230,000 12,000,000 790,230,000 792,000 Genoa branch no. 29 Via C. Rolando 56 E r. Genoa 70,746,600 278,137,423 348,884,023 70,746,600 278,137,423 792,000 Genoa branch no. 29 Via C. Abba 43 - 45 r. Genoa 120,000,000 471,775,192 591,775,192 120,000,000 471,775,192 Genoa branch no. 30 Via S. G. D'Acri 6 r. Genoa 1,725,000 44,316,108 46,041,108 1,725,000 44,316,108 1,500,000 Genoa branch no. 30 Via S. G. D'Acri 4 r. Genoa 5,653,000 145,228,380 150,881,380 4,974,641 145,906,739 Genoa branch no. 30 Via S. G. D'Acri 12 r. Genoa 17,918,000 460,322,328 478,240,328 15,140,710 463,099,618 Genoa branch no. 30 Via S. G. D'Acri 4-1 Genoa 740,442,699 740,442,699 69,222,451 671,220,248 Genoa branch no. 31 Via Pra 140 A/R Genoa 14,000,000 228,550,740 242,550,740 14,000,000 228,550,740 594,000 Genoa branch no. 31 Via Venezian 1 Genoa 21,960,000 358,498,160 380,458,160 21,960,000 358,498,160 Genoa branch no. 32 Piazza Banchi 2 r Genoa 15,000,000 285,051,389 300,051,389 14,250,000 285,801,389 600,000 Genoa branch no. 32 Via S. Luca 2 Genoa 10,000,000 190,034,259 200,034,259 3,300,000 196,734,259 Genoa branch no. 34 Via Struppa 146 C e via Buscaglia 18 r Genoa 426,573,400 552,290,241 978,863,641 426,573,400 552,290,241 600,000 Genoa branch no. 47 Via di Francia 3 r. Genoa 4,500,000,000 4,500,000,000 1,615,849,996 2,884,150,004 4,500,000 Genoa branch no. 55 Via del Capriolo 1 - 3 rr. Genoa 412,500,000 412,500,000 123,750,000 288,750,000 420,000 Genoa branch no. 60 Piazza Leopardi 2 Genoa 1,865,000,000 1,865,000,000 559,500,000 1,305,500,000 1,900,000 Branch Recco Via IV Novembre 2r - P.za N.da Recco27/2 Recco 4,000,000 106,716,250 110,716,250 4,000,000 106,716,250 1,716,000 Branch Recco P.za N. da Recco 24 Recco 60,000,000 1,600,743,750 1,660,743,750 60,000,000 1,600,743,750 Branch S.Margherita L. Via XXV Aprile 6/1 S.Margherita L. 2,800,000 19,535,115 22,335,115 2,800,000 19,535,115 264,000 Branch S.Margherita L. Largo Giusti 17 S.Margherita L. 344,878,656 1,534,901,885 1,879,780,541 244,439,080 1,635,341,461 1,800,000 Branch Chiavari Piazza Roma 34 r. - Piazza Roma 10/1 Chiavari 23,650,000 146,868,225 170,518,225 23,650,000 146,868,225 4,500,000 Branch Chiavari Corso Dante p.t. Chiavari 798,721,411 1,890,166,114 2,688,887,525 407,632,824 2,281,254,701 Branch Chiavari Corso Dante 16/4 Chiavari 264,000,000 1,639,459,259 1,903,459,259 87,120,000 1,816,339,259 LayoutLayout 99,033,504 99,033,504 2,971,005 96,062,499 Branch Sestri L. Corso Colombo 19 r. Sestri Levante 110,339,320 1,299,863,080 1,410,202,400 110,339,320 1,299,863,080 1,320,000 Branch Rapallo Via Giustiniani 9 Rapallo 36,750,000 501,068,795 537,818,795 36,750,000 501,068,795 2,640,000 Branch Rapallo Galleria Raggio 2D e 3D Rapallo 7,900,000 107,712,748 115,612,748 7,900,000 107,712,748 Branch Rapallo Via Matteotti 7/3 Rapallo 11,880,500 161,984,975 173,865,475 11,880,500 161,984,975 Branch Rapallo Via Giustiniani 7 Rapallo 105,000,000 1,431,625,128 1,536,625,128 105,000,000 1,431,625,128 Branch Rapallo Galleria Raggio 4/D Rapallo 29,914,500 407,869,999 437,784,499 29,914,500 407,869,999 Rapallo branch no. 1 Via del Pozzo 24 Rapallo 374,000,000 465,905,000 839,905,000 347,820,000 492,085,000 594,000 Branch Lavagna Piazza della Libertà 40/2 Lavagna 396,000,000 148,770,000 544,770,000 130,680,000 414,090,000 522,000 Branch La Spezia Corso Nazionale 252 La Spezia 8,400,000,000 4,242,000,000 12,642,000,000 3,843,000,000 8,799,000,000 11,088,000 LayoutLayout 80,128,955 80,128,955 2,403,869 77,725,086 La Spezia branch no. 2 Corso Cavour 154 La Spezia 967,930,000 967,930,000 261,175,801 706,754,199 850,000 La Spezia branch no. 2 Via Monale 76 La Spezia 209,000,000 209,000,000 43,890,000 165,110,000 210,000 Branch Rezzoaglio Via Roma 12 Rezzoaglio 452,828,000 805,506,410 1,258,334,410 452,828,000 805,506,410 858,000 Branch Montoggio Via Roma 89 Montoggio 4,000,000 329,410,000 333,410,000 4,000,000 329,410,000 330,000 Branch Torriglia Via Matteotti 48 r. Torriglia 2,100,000 35,360,067 37,460,067 2,100,000 35,360,067 Branch Torriglia Loc.piano fondi con acc.Via Molinetto 7 Torriglia 13,478,260 226,948,659 240,426,919 13,478,260 226,948,659 264,000 Branch Campoligure P.za Martiri della Benedicta 2 Campoligure 3,700,000 12,673,270 16,373,270 3,700,000 12,673,270 462,000 Branch Campoligure Via Trento 2 Campoligure 121,040,000 414,587,180 535,627,180 119,829,600 415,797,580 Branch Campoligure Via Trento 6 Campoligure 73,700,000 75,335,750 149,035,750 64,119,000 84,916,750 105,000 Branch Arenzano Via Pallavicini 25 Arenzano 4,093,939 92,226,763 96,320,702 4,093,939 92,226,763 1,310,000 Branch Arenzano Via Pallavicini 29 Arenzano 53,354,710 1,201,955,299 1,255,310,009 45,084,722 1,210,225,287 Branch Ronco Scrivia Corso Italia 29 Ronco Scrivia 570,000,000 596,775,000 1,166,775,000 530,100,000 636,675,000 792,000 Branch Cogoleto Piazza Giusti 1 Cogoleto 613,000,000 853,385,497 1,466,385,497 613,000,000 853,385,497 1,056,000 Branch Cogoleto Piazza Giusti 1 Cogoleto 65,000,000 90,489,490 155,489,490 65,000,000 90,489,490 LayoutLayout 76,339,033 76,339,033 2,290,171 74,048,862 Branch Isola Cantone Via Roma 118 r. Isola Cantone 2,400,000 21,959,208 24,359,208 2,400,000 21,959,208 396,000 Branch Isola Cantone Via Roma 182 1^ p. Isola Cantone 40,000,000 365,986,792 405,986,792 40,000,000 365,986,792 Branch Camogli Piazza Schiaffino 9 Camogli 3,477,273 659,487,101 662,964,374 3,477,273 659,487,101 800,000 LayoutLayout 57,681,601 57,681,601 1,730,448 55,951,153 Branch Rossiglione Via Roma 10 Rossiglione 1,500,000 329,778,750 331,278,750 1,500,000 329,778,750 330,000 Branch Masone Via Veneto 6 Masone 8,427,000 80,400,252 88,827,252 8,427,000 80,400,252 462,000 Branch Masone Via Roma 27 Masone 38,602,000 368,293,641 406,895,641 37,057,920 369,837,721 Branch Casella Viale Mandelli Casella 18,827,250 454,581,786 473,409,036 16,539,466 456,869,570 462,000 Branch Savignone Via Giovanni XXIII 1 Savignone 161,000,000 116,685,000 277,685,000 62,790,000 214,895,000 264,000 Branch Sori Via Garibaldi 6 B - C Sori 30,279,500 425,220,097 455,499,597 28,765,523 426,734,074 528,000 Branch Sori Via Garibaldi 6 D Sori 6,506,500 91,371,871 97,878,371 6,506,500 91,371,871 Branch Moconesi Viale De Gasperi 19 Moconesi 32,375,000 370,242,850 402,617,850 27,356,876 375,260,974 396,000 Branch Moconesi Viale De Gasperi 19 Moconesi 1,001,535 11,453,627 12,455,162 811,242 11,643,920 Branch Pedemonte Via Medicina p.t. 104 Serra Ricco' 48,000,000 460,837,377 508,837,377 48,000,000 460,837,377 594,000 Branch Pedemonte Via Medicina p.fondi 104 Serra Ricco' 13,000,000 124,810,123 137,810,123 13,000,000 124,810,123 Branch Olcese Via Poire'43 S.Olcese di M. 36,619,045 362,109,899 398,728,944 30,943,083 367,785,861 594,000 Branch Olcese Via Poire'69 S.Olcese di M. 20,890,160 206,573,757 227,463,917 16,921,035 210,542,882 Branch Casarza L. Via IV Novembre 28 B Casarza L. 69,962,688 522,927,710 592,890,398 69,962,688 522,927,710 528,000 Branch S.Colombano C. Via D.Cuneo 163/C - D - E S.Colombano C. 85,351,200 315,802,024 401,153,224 85,351,200 315,802,024 396,000 Branch S.Colombano C. Via D.Cuneo 163/C - D - E S.Colombano C. 17,835,183 65,990,717 83,825,900 17,835,183 65,990,717 Branch Campomorone Via De Gasperi 60 - 62 - 64 - 70 Campomorone 550,150,000 752,078,125 1,302,228,125 528,144,000 774,084,125 924,000 Branch Alassio Via Mazzini 2 Alassio 310,466,500 2,487,824,139 2,798,290,639 262,344,192 2,535,946,447 2,640,000 Branch Alassio Via Mazzini 2 Alassio 258,150 2,068,603 2,326,753 209,100 2,117,653 Branch Alassio Via Dante 114/1 Alassio 2,100,000 16,827,679 18,927,679 2,100,000 16,827,679 Branch Leca d'Albenga Piazza del Popolo 13 Leca d'Albenga 412,000,000 412,000,000 123,600,000 288,400,000 412,000 Branch Toirano Via Braida 21 - 23 - 27 Toirano 58,000,000 198,844,676 256,844,676 58,000,000 198,844,676 264,000 Branch Toirano Via Braida 21 - 23 - 27 Toirano 15,265,000 52,333,862 67,598,862 15,265,000 52,333,862 Branch Finale Ligure Via Garibaldi 1 - Via Roma 12/1 Finale L. 1,000,000 1,121,852,500 1,122,852,500 1,000,000 1,121,852,500 1,122,000 Branch Varazze Piazza Dante 6 Varazze 6,000,000 923,115,000 929,115,000 6,000,000 923,115,000 924,000 Branch Cairo M. Via F.lli Francia 3 Cairo M. 255,000,000 105,994,966 360,994,966 87,482,466 273,512,500 343,000 Branch Loano Corso Roma 198 Loano 3,900,000 329,424,750 333,324,750 3,900,000 329,424,750 330,000 Branch Loano-Main Office Via Stella (Pal. Sirena) Loano 348,403,115 1,037,892,690 1,386,295,805 122,776,966 1,263,518,839 1,300,000 Branch Pietra L. P.zza Martiri Libertà 10 ) Pietra L. 1,980,000
164 Estimated Location cost price Revaluation Revaluated Depreciation Balance Break-up (1) cost fund at 31/12/00 sheet value value at 31/12/00
Branch Pietra L. Via Vinzone 1/1^-2^p. ) Pietra L. 7,500,000 1,767,816,304 1,775,316,304 7,500,000 1,767,816,304 Branch Pietra L. Via Vinzone 1/3^p. Pietra L. 892,500 210,370,140 211,262,640 428,400 210,834,240 Branch Pietra L.Lev Corso Italia 15 Pietra L. 20,516,000 324,819,710 345,335,710 20,516,000 324,819,710 330,000 Main Office Imperia Via Berio 14 r. Imperia 28,300,000 244,626,082 272,926,082 28,300,000 244,626,082 4,620,000 Main Office Imperia Via Berio 4/1 e 4/2 Imperia 17,325,000 149,757,840 167,082,840 17,325,000 149,757,840 Main Office Imperia Via Berio 4 Imperia 26,815,870 231,797,216 258,613,086 23,597,962 235,015,124 Main Office Imperia Via Berio 10/5 Imperia 6,762,480 58,455,088 65,217,568 5,950,972 59,266,596 Main Office Imperia Via Berio 10/8 Imperia 194,801,000 1,683,865,918 1,878,666,918 181,164,931 1,697,501,987 Main Office Imperia Via Berio 6 Imperia 69,000,000 596,438,151 665,438,151 69,000,000 596,438,151 Main Office Imperia Via Berio 10/6 Imperia 174,205,000 1,505,833,451 1,680,038,451 162,010,651 1,518,027,800 Branch Sanremo Corso Mombello 25,25 A,27,29 Sanremo 2,200,000,000 4,724,500,000 6,924,500,000 1,980,000,000 4,944,500,000 5,544,000 LayoutLayout 8,886,741 8,886,741 266,602 8,620,139 Branch Bordighera Corso V.Emanuele 153/155 r. Bordighera 689,629,367 1,748,307,000 2,437,936,367 238,132,643 2,199,803,724 1,848,000 Branch Pieve di Teco Via Eula 33 Pieve di Teco 16,770,830 388,830,472 405,601,302 14,171,354 391,429,948 396,000 Branch Arma di Taggia Via Blengino 19 Arma di Taggia 123,068,203 1,267,388,342 1,390,456,545 103,992,630 1,286,463,915 1,320,000 Branch P.Maurizio P.zza F.lli Serra 10 Imperia 20,250,000 660,267,717 680,517,717 20,250,000 660,267,717 1,320,000 Branch P.Maurizio P.zza F.lli Serra 9 Imperia 19,968,960 651,104,179 671,073,139 19,769,274 651,303,865 Branch Andora P.zza S.Maria 42 Andora 450,000,000 450,000,000 163,125,000 286,875,000 450,000 Branch S.Bartolomeo M. Nuova P.zza Comunale 49/51 r. S.Bartolomeo M. 50,397,610 448,594,124 498,991,734 44,349,888 454,641,846 528,000 Branch S.Bartolomeo M. Piazza Magnolia 32 S.Bartolomeo M. 6,048,000 53,833,848 59,881,848 1,905,120 57,976,728 Branch S.Stefano Mare Piazza A. Saffi 4 S.Stefano M. 58,000,000 203,963,174 261,963,174 58,000,000 203,963,174 792,000 Branch S.Stefano Mare Piazza A. Saffi 5 S.Stefano M. 72,198,053 253,892,139 326,090,192 67,144,196 258,945,996 Branch S.Stefano Mare Piazza A. Saffi 6 S.Stefano M. 76,383,447 268,610,523 344,993,970 71,036,599 273,957,371 Branch Ventimiglia Condominio Le Palme Ventimiglia 328,187,000 1,093,229,782 1,421,416,782 223,675,416 1,197,741,366 1,700,000 Branch Ventimiglia Condominio Le Palme Ventimiglia 27,745,895 118,627,277 146,373,172 22,474,179 123,898,993 Branch Ventimiglia Via Roma (fondi) Ventimiglia 30,204,750 236,030,312 266,235,062 24,465,861 241,769,201 Branch Ventimiglia Via Matteotti 1 Ventimiglia 610,331,308 610,331,308 45,774,848 564,556,460 Branch Diano Marina Piazza Maglione 1 Diano Marina 180,000,000 570,150,000 750,150,000 180,000,000 570,150,000 594,000 Branch Vallecrosia Via Giovanni XXIII 27 - 29 - 31 Vallecrosia 512,030,000 503,629,725 1,015,659,725 476,187,900 539,471,825 679,000 Branch Ovada Via Torino 10 Ovada 1,315,000,000 1,021,718,133 2,336,718,133 779,865,598 1,556,852,535 1,736,000 Branch Alessandria Centro Agorà - Corso Borsalino 46 Alessandria 3,175,000,000 3,175,000,000 1,150,937,500 2,024,062,500 3,175,000 Branch Bologna Via Riva del Reno 67 Bologna 3,330,000,000 3,330,000,000 1,207,125,000 2,122,875,000 3,330,000 Rappres. Londra Hornton Street 12 London 758,175,900 776,461,893 1,534,637,793 681,240,726 853,397,067 1,060,000 Office. Roma Via Piemonte 39/8 Rome 907,650,000 911,900,375 1,819,550,375 816,885,000 1,002,665,375 1,250,000 Branch Reggio Emilia P.zza del Tricolore 2c e 2d Reggio Emilia 830,300,000 830,300,000 226,256,750 604,043,250 1,150,000 Branch Reggio Emilia Piazza del Tricolore 4 r. Reggio Emilia 381,235,548 381,235,548 47,688,731 333,546,817 Genoa branch no. 63 Via Donghi n. 20/22/24/26/28 r. Genoa 335,250,000 335,250,000 91,355,626 243,894,374 340,000 Branch Carrara Viale XX Settembre 209/211 Carrara 1,765,000,000 1,765,000,000 586,862,500 1,178,137,500 1,765,000 Branch Brugnato Via Briniati 3 Brugnato 440,000,000 440,000,000 146,300,000 293,700,000 440,000 Branch Acqui Terme Via Mazzini 43/45 Acqui Terme 396,000,000 396,000,000 131,670,000 264,330,000 400,000 Branch Acqui Terme Via Mazzini 47 Acqui Terme 401,145,193 401,145,193 78,268,068 322,877,125 285,000 Branch Lavagna P. la Scafa 16 Lavagna 500,625,000 73,842,000 574,467,000 210,262,000 364,205,000 580,000 Genoa branch no. 65 Via Marchini 39 r Genoa 147,900,000 147,900,000 35,496,000 112,404,000 150,000 Branch no. 3 - Sanremo Corso Cavallotti 232 Sanremo 636,500,000 636,500,000 152,760,000 483,740,000 640,000 Branch Sarzana Via Brigate Partigiane Muccini 65 Sarzana 2,200,000,000 2,200,000,000 594,000,000 1,606,000,000 2,200,000 Genoa branch no. 66 Via Merano 99 Genoa 319,600,000 319,600,000 76,704,000 242,896,000 320,000 Branch no. 3 - Ventimiglia Corso Genova 82 Ventimiglia 616,100,000 616,100,000 147,864,000 468,236,000 620,000 Branch no. 1 - Chiavari Via S. Rufino 18 Chiavari 450,000,000 450,000,000 108,000,000 342,000,000 450,000 Genoa branch no. 69 Via Paleocapa 135/137 Genoa 161,000,000 161,000,000 38,640,000 122,360,000 165,000 Branch no. 3 - La Spezia Via Genova 103 La Spezia 752,562,500 752,562,500 158,038,126 594,524,374 760,000 Branch Ameglia Via XXV Aprile 51 Ameglia 419,475,000 419,475,000 88,089,750 331,385,250 420,000 Genoa branch no. 71 Via dei Mille 57/59 Genoa 1,067,150,000 1,067,150,000 224,101,500 843,048,500 1,070,000 Branch Lerici Via Gerini 10 Lerici 1,120,000,000 1,120,000,000 235,200,000 884,800,000 1,120,000 Branch Sassuolo Via Circonvallazione Sud/Est 221-223-225 Sassuolo 1,250,000,000 1,250,000,000 262,500,000 987,500,000 1,250,000 Branch Parma Via Emilia 65 Parma 874,747,984 874,747,984 180,004,980 694,743,004 830,000 Branch Parma Via Emilia 65 Parma 30,000,000 30,000,000 4,950,000 25,050,000 30,000 Branch Savona Piazza Dallara 42 Savona 319,000,000 319,000,000 66,990,000 252,010,000 320,000 Genoa branch no. 75 Via Gramsci 135/137/139 Genoa 78,057,339 496,300,190 574,357,529 10,482,243 563,875,286 650,000 Milan branch no 1 Via Morosini 7 Milan 1,540,000,000 1,540,000,000 254,100,000 1,285,900,000 1,540,000 Branch Valenza Via Canonico Zuffi 3 Valenza 1,595,000,000 1,595,000,000 263,175,000 1,331,825,000 1,595,000 Branch Albissola Corso Mazzini 189 Albissola Sup. 979,000,000 979,000,000 161,535,000 817,465,000 979,000 Genoa branch no. 76 Via Bobbio 62/64/66 r. Genoa 395,419,804 395,419,804 63,941,673 331,478,131 352,000 Branch Monterosso Via Vittorio Emanuele 69 Monterosso 605,000,000 605,000,000 99,825,000 505,175,000 605,000 Milan branch no 5 Via Bertini 1 Milan 958,200,000 958,200,000 129,357,000 828,843,000 958,200 Milan branch no 5 Via Bertini 1 Milan 222,000,000 222,000,000 23,310,000 198,690,000 Ventimiglia branch no. 2 Corso Nizza Ventimiglia 277,500,000 277,500,000 37,462,500 240,037,500 277,500 Genoa branch no. 81 Via Torti 236/238 rr. Genoa 366,300,000 366,300,000 49,450,500 316,849,500 630,000 Genoa branch no. 78 Via Murcarolo 4 r. Genoa 1,164,330,417 1,164,330,417 157,184,608 1,007,145,809 999,000 Branch Tortona Piazza Roma 34 Tortona 1,041,239,748 1,041,239,748 140,567,364 900,672,384 777,000 Branch Rho Via Lainate 60 Rho 999,500,000 999,500,000 104,947,500 894,552,500 1,000,000 Branch Riva Ligure Corso Villaregia 54 Riva Ligure 612,692,435 612,692,435 64,332,706 548,359,729 620,000 Genoa branch no. 83 Via Lido di Pegli 2/3 rr. Genoa 414,600,000 414,600,000 42,858,000 371,742,000 1,100,000 Genoa branch no. 83 Via Lido di Pegli 2/3 rr. Genoa 728,614,575 728,614,575 75,698,022 652,916,553 Bologna branch no. 1 Via Emilia Levante 61/63 Bologna 1,160,549,892 1,160,549,892 81,265,494 1,079,284,398 1,200,000 Turin branch no. 2 Via Borgaro 119 Turin 1,386,376,894 1,386,376,894 62,386,960 1,323,989,934 1,400,000 Via Mazzini 32 A Fidenza 1,060,112,156 1,060,112,156 47,705,047 1,012,407,109 1,100,000 Turin branch no. 3 Via Viberti 1 Turin 608,846,170 608,846,170 27,398,078 581,448,092 900,000 LayoutLayout " " 80,128,955 80,128,955 2,403,869 77,725,086 Agenzia 85 Via Teglia 23/25/27 rr Genoa 330,000,000 330,000,000 4,950,000 325,050,000 680,000 LayoutLayout " " 340,362,175 340,362,175 5,105,433 335,256,742 Milan branch no. 7 Via Rembrandt Milan 1,633,545,590 1,633,545,590 24,503,184 1,609,042,406 2,000,000 LayoutLayout " " 250,908,658 250,908,658 3,763,630 247,145,028 Other head office Genoa 3,402,405,719 1,570,459,153 4,972,864,872 1,209,534,532 3,763,330,340 5,080,000 buildings Via G. D'Annunzio - Lotto "E" Genoa 3,170,618,000 1,496,811,075 4,667,429,075 1,141,422,480 3,526,006,595 4,390,000 Via G. D'Annunzio - Lotto "F" Genoa 413,558,000 192,628,325 606,186,325 148,880,880 457,305,445 570,000 Via G. D'Annunzio - Lotto "G" Genoa 2,067,794,000 973,137,975 3,040,931,975 744,405,840 2,296,526,135 2,860,000 Via F. Crispi 146 Palermo 1,000,000,000 1,000,000,000 1,000,000,000 1,300,000 Via Castelforte 5 Palermo 500,000,000 500,000,000 500,000,000 750,000 Via V.Emanuele 30 Lercara friddi 300,000,000 300,000,000 300,000,000 550,000 C.so Umberto e Margherita 85-87-89-91 Termini Imerese 1,000,000,000 1,000,000,000 1,000,000,000 1,300,000 C.so Umberto I 168 Leonforte 400,000,000 400,000,000 400,000,000 650,000 Via F.lli Testa 38-40-42 Nicosia 300,000,000 300,000,000 300,000,000 550,000
165 Estimated Location cost price Revaluation Revaluated Depreciation Balance Break-up (1) cost fund at 31/12/00 sheet value value at 31/12/00
Other head office Genoa 3,402,405,719 1,570,459,153 4,972,864,872 1,209,534,532 3,763,330,340 5,080,000 buildings Via G. D'Annunzio - Lotto "E" Genoa 3,170,618,000 1,496,811,075 4,667,429,075 1,141,422,480 3,526,006,595 4,390,000 Via G. D'Annunzio - Lotto "F" Genoa 413,558,000 192,628,325 606,186,325 148,880,880 457,305,445 570,000 Via G. D'Annunzio - Lotto "G" Genoa 2,067,794,000 973,137,975 3,040,931,975 744,405,840 2,296,526,135 2,860,000 Car parking 1-2 B2 Via D'Annunzio 31 Genoa 28,000,000 97,372,191 125,372,191 87,422,154 37,950,037 70,000 Via D'Annunzio 31 Genoa 412,300 1,433,806 1,846,106 1,274,928 571,178 Via D'Annunzio 23 Genoa 7,787,140,000 4,026,829,182 11,813,969,182 8,796,512,896 3,017,456,286 11,000,000 Via D'Annunzio 23 Genoa 7,160,334,261 3,455,840,671 10,616,174,932 8,060,804,135 2,555,370,797 Via D'Annunzio 23 Genoa 35,777,600 15,504,402 51,282,002 38,532,684 12,749,318 Via D'Annunzio 23 Genoa 885,000 299,725 1,184,725 877,428 307,297 Garage Via D'Annunzio 23 Genoa 125,271,000 37,853,604 163,124,604 130,480,632 32,643,972 120,000 N. 4 car parking Via D'Annunzio 23 (+ cantina) Genoa 157,977,025 28,535,235 186,512,260 164,101,767 22,410,493 120,000 Garage Via D'Annunzio 23 Genoa 4,146,930 1,367,435 5,514,365 4,101,444 1,412,921 35,000 Via D'Annunzio 23 Genoa 17,819,180 6,878,447 24,697,627 18,429,017 6,268,610 N. 2 car parking Via D'Annunzio Genoa 27,200,000 47,663,356 74,863,356 53,943,188 20,920,168 75,000 N. 4 car parking Via D'Annunzio Genoa 117,867,953 23,227,201 141,095,154 126,496,664 14,598,490 150,000 Total 194,429,599,534 306,706,531,829 501,136,131,363 132,897,572,372 368,238,558,991 435,632,700
Staff accomodation
Flat Via XX Settembre 20/131 Genoa 102,486,000 70,332,366 172,818,366 2,818,366 170,000,000 170,000 Flat Via XX Settembre 20/132 Genoa 105,501,000 67,400,278 172,901,278 2,901,278 170,000,000 170,000 Flat Via XX Settembre 20/133 Genoa 115,014,000 58,148,886 173,162,886 3,162,886 170,000,000 170,000 Flat Via XX Settembre 20/134 Genoa 115,014,000 58,148,886 173,162,886 3,162,886 170,000,000 170,000 Flat Via XX Settembre 20/136 Genoa 121,985,000 51,369,588 173,354,588 3,354,588 170,000,000 170,000 Flat Via Orsini 1/15 Genoa 312,400,000 87,600,000 400,000,000 400,000,000 400,000 Flat Via Ceresio 3 int.4/1 Milan 121,500,000 48,500,000 170,000,000 170,000,000 170,000 Flat Via Ceresio 3 int.5/1 Milan 138,500,000 61,500,000 200,000,000 200,000,000 200,000 Flat Via Ceresio 3 int.6/1 Milan 121,500,000 48,500,000 170,000,000 170,000,000 170,000 Flat Via Ceresio 3 int.9/1 Milan 87,700,000 62,300,000 150,000,000 150,000,000 150,000 Flat Via Ceresio 3 int.9/2 Milan 87,700,000 62,300,000 150,000,000 150,000,000 150,000 Flat Via Ceresio 3 int.8/3 Milan 87,700,000 62,300,000 150,000,000 150,000,000 150,000 Flat Via Ceresio 3 int.8/5 Milan 87,700,000 62,300,000 150,000,000 150,000,000 150,000 Flat Via Ceresio 3 int.9/5 Milan 87,700,000 62,300,000 150,000,000 150,000,000 150,000 Flat Corso Mombello 25 p.attico/1 S.Remo 65,000,000 105,000,000 170,000,000 170,000,000 170,000 Flat Corso Mombello 25 p.attico/2 S.Remo 65,000,000 105,000,000 170,000,000 170,000,000 170,000 Flat Corso Mombello 25 p.attico/3 S.Remo 70,000,000 100,000,000 170,000,000 170,000,000 170,000 Flat Via Roma 12 a/1 Rezzoaglio 70,000,000 10,000,000 80,000,000 80,000,000 80,000 Flat Via Roma 12 a/2 Rezzoaglio 110,000,000 10,000,000 120,000,000 120,000,000 120,000 Flat Via Perletti 9 - 2^ p. Piacenza 203,500,000 36,500,000 240,000,000 240,000,000 240,000 Flat Via Mezzacosta 1 Bologna 1,166,400,000 1,166,400,000 1,166,400,000 1,166,400 Flat Corso Matteotti 13 Turin 110,000,000 190,000,000 300,000,000 300,000,000 300,000 Flat Via XX Settembre 20 139/154 Genoa 348,000,000 348,000,000 348,000,000 348,000 TotalTotal 3,900,300,000 1,419,500,004 5,319,800,004 15,400,004 5,304,400,000 5,304,400
Other properties a)a) SupplementarySupplementary pensionpension fundfund
Shop Via Luccoli 19-21 r. Genoa 135,000,000 476,812,500 611,812,500 48,600,000 563,212,500 800,000 Shop Via XXV Aprile 14-16 r. Genoa 158,897,737 855,005,815 1,013,903,552 57,203,184 956,700,368 1,000,000 Flat Via Cassa di Risparmio 4/1 Genoa 1 109,999,999 110,000,000 110,000,000 150,000 Flat Via Cassa di Risparmio 4/3 Genoa 44,767,585 229,149,580 273,917,165 16,116,336 257,800,829 300,000 Flat Via Cassa di Risparmio 4/6 Genoa 1 239,999,999 240,000,000 240,000,000 300,000 Flat Via Cassa di Risparmio 4/13 Genoa 1 109,999,999 110,000,000 110,000,000 150,000 Flat Via Cassa di Risparmio 4/14 Genoa 50,000,000 304,375,000 354,375,000 18,000,000 336,375,000 350,000 Flat Via F. Turati 2/2 Genoa 2,385,422 37,823,303 40,208,725 453,221 39,755,504 55,000 Flat Via F. Turati 2/3 Genoa 9,295,049 221,518,266 230,813,315 1,766,072 229,047,243 260,000 Flat Via F. Turati 2/4-5 Genoa 8,580,895 141,419,105 150,000,000 150,000,000 250,000 Flat Via F. Turati 2/6 e 2/6 A Genoa 6,583,840 63,992,245 70,576,085 1,250,935 69,325,150 100,000 Flat Via F. Turati 2/6 B Genoa 6,004,049 43,995,951 50,000,000 50,000,000 80,000 Flat Via F. Turati 2/7-8 Genoa 10,550,340 119,449,660 130,000,000 130,000,000 270,000 Flat Via F. Turati 2/9 D Genoa 4,214,983 75,785,017 80,000,000 80,000,000 180,000 Flat Via F. Turati 2/10 Genoa 6,743,972 153,256,028 160,000,000 160,000,000 300,000 Flat Via F. Turati 2/10 A - 2/10 B Genoa 5,057,979 114,942,021 120,000,000 120,000,000 240,000 Flat Via F. Turati 2/11 Genoa 5,845,758 124,154,242 130,000,000 130,000,000 270,000 Flat Via F. Turati 2/12 Genoa 7,165,470 112,834,530 120,000,000 120,000,000 300,000 Shop Via F. Turati 2 - 4 - 6 rr. Genoa 34,840,788 318,207,782 353,048,570 6,619,740 346,428,830 350,000 Shop Via F. Turati 8/10 rr. Genoa 18,348,978 103,256,557 121,605,535 3,486,315 118,119,220 120,000 Flat Via S. Martino 65 B/1 Genoa 12,479,585 137,520,415 150,000,000 150,000,000 240,000 Flat Via S. Martino 65 B/2 Genoa 16,223,460 163,776,540 180,000,000 180,000,000 270,000 Flat Via S. Martino 65 B/4 Genoa 16,223,460 163,776,540 180,000,000 180,000,000 270,000 Flat Via S. Martino 65 B/5 Genoa 12,479,585 137,520,415 150,000,000 150,000,000 250,000 Flat Via S. Martino 65 B/7 Genoa 12,479,585 137,520,415 150,000,000 150,000,000 260,000 Flat Via S. Martino 65 B/8 Genoa 16,223,460 163,776,540 180,000,000 180,000,000 290,000 Flat Via S. Martino 65 C/2 Genoa 13,727,543 136,272,457 150,000,000 150,000,000 290,000 Flat Via S. Martino 65 C/3 Genoa 10,421,433 109,578,567 120,000,000 120,000,000 240,000 Flat Via S. Martino 65 C/4 Genoa 21,012,746 198,987,254 220,000,000 220,000,000 400,000 Flat Via S. Martino 65 C/5 Genoa 13,727,543 146,272,457 160,000,000 160,000,000 290,000 Flat Via S. Martino 65 C/6 Genoa 10,421,433 119,578,567 130,000,000 130,000,000 240,000 Flat Via S. Martino 65 C/8 Genoa 13,727,543 146,272,457 160,000,000 160,000,000 315,000 Flat Via S. Martino 65 C/9 Genoa 13,727,543 146,272,457 160,000,000 160,000,000 270,000 Flat Via S. Martino 65 C/12 Genoa 13,727,543 146,272,457 160,000,000 160,000,000 290,000 Flat Via S. Martino 65 C/14 Genoa 17,471,419 182,528,581 200,000,000 200,000,000 370,000 Shops Via S. Martino 65 B - C (piani terra e fondi) Genoa 147,108,826 1,365,763,197 1,512,872,023 50,016,996 1,462,855,027 1,500,000 Shop Via S. Martino 152 - 154 - 156 rr. Genoa 3,950,000 496,050,000 500,000,000 500,000,000 500,000 Flat Via Divisione Acqui 92/2 Genoa 13,590,630 140,159,370 153,750,000 153,750,000 330,000 Flat Via Divisione Acqui 92/14 Genoa 11,655,424 118,344,576 130,000,000 130,000,000 305,000 Flat Via Divisione Acqui 94/2 Genoa 13,081,046 136,918,954 150,000,000 150,000,000 375,000 Offices Via XX Settembre 41 - 5° piano Genoa 159,122,926 1,493,087,365 1,652,210,291 54,101,790 1,598,108,501 1,650,000
166 Estimated Location cost price Revaluation Revaluated Depreciation Balance Break-up (1) cost fund at 31/12/00 sheet value value at 31/12/00
Offices Via XX Settembre 41 - 6° piano Genoa 59,668,904 540,331,096 600,000,000 20,287,430 579,712,570 600,000 Offices Via XX Settembre 41 - 6° piano Genoa 238,675,615 1,961,324,385 2,200,000,000 81,149,719 2,118,850,281 2,200,000 Offices Via XX Settembre 41 - 7° piano Genoa 139,221,592 1,460,778,408 1,600,000,000 47,335,336 1,552,664,664 1,600,000 Shop Vico Casana 74-76 rr. Genoa 48,272,411 605,951,424 654,223,835 16,412,626 637,811,209 650,000 Shop Vico Casana 38 r. Genoa 1 179,999,999 180,000,000 180,000,000 200,000 Shop Vico Casana 40 r. Genoa 1 119,999,999 120,000,000 120,000,000 150,000 Shop Vico Casana 42 r. Genoa 1 119,999,999 120,000,000 120,000,000 150,000 Shop Vico Casana 44/46 r. Genoa 1 239,999,999 240,000,000 240,000,000 300,000 Shop Vico Casana 48 r. Genoa 1 119,999,999 120,000,000 120,000,000 150,000 Shop Vico Casana 50 r. Genoa 1 119,999,999 120,000,000 120,000,000 150,000 Warehouse Via G. D'Annunzio p. A/3 (lotto B q. 10,75) Genoa 93,040,000 81,848,200 174,888,200 50,241,600 124,646,600 150,000 Offices Piazza Dante 8/2 Genoa 25,160,320 377,041,209 402,201,529 5,535,260 396,666,269 400,000 Shop Via Fiasella 36 - 38 - 40 rr. Genoa 22,375,000 779,191,250 801,566,250 1,566,250 800,000,000 800,000 Shop Via Cesarea 66 r. Genoa 23,959,382 278,137,063 302,096,445 7,427,419 294,669,026 300,000 Shop Via Cesarea 68 r. Genoa 22,507,298 579,462,091 601,969,389 6,977,261 594,992,128 600,000 Car parkings Via G. D'Annunzio - 14 posti auto Genoa 325,945,760 219,914,967 545,860,727 234,680,948 311,179,779 400,000 Shop V.le Des Geneys 14 r. Genoa 11,400,000 460,318,500 471,718,500 11,400,000 460,318,500 480,000 Shop Via de Nicolay 44 r. Genoa 81,924 399,918,076 400,000,000 400,000,000 400,000 Flat Via Bobbio 1/4 scala C Genoa 860,000 79,140,000 80,000,000 80,000,000 120,000 Shop Via Monticelli 35 Genoa 109,971,000 548,904,000 658,875,000 109,971,000 548,904,000 660,000 Offices Via Monticelli 11/1 Genoa 50,000,000 291,875,000 341,875,000 50,000,000 291,875,000 300,000 Shop Via Colombo 49 r. Genoa 8,900,000 791,189,000 800,089,000 89,000 800,000,000 800,000 Shop Via G.B. Custo 11 r. Genoa 2,670,000 397,356,700 400,026,700 26,700 400,000,000 400,000 Offices Via di Francia 5 A r. Genoa 550,000,000 550,000,000 199,375,000 350,625,000 550,000 Flat Piazzetta dei Garibaldi 27 r. Genoa 88,000,000 11,420,000 99,420,000 26,400,000 73,020,000 100,000 Shop Via Lungomare S.Maria 9/11/13 Cogoleto 4,545,000 195,852,688 200,397,688 727,200 199,670,488 250,000 Shop Via Dante 225 B Alassio 1,890,000 148,147,800 150,037,800 18,900 150,018,900 200,000 Shop Via Dante 229 Alassio 1,638,000 158,394,760 160,032,760 16,380 160,016,380 200,000 Shop Via della Concezione 60 Finale Ligure 363,042,000 397,440,635 760,482,635 359,411,580 401,071,055 800,000 Shop Via S. Maurizio 25 Imperia 828,265 89,171,735 90,000,000 90,000,000 120,000 Shop Via S. Maurizio 27 Imperia 1,593,148 118,406,852 120,000,000 120,000,000 150,000 Shop Via S. Maurizio 27 A Imperia 1,178,587 108,821,413 110,000,000 110,000,000 150,000 Flat C.so Mombello 25 piano 3 int. 3 Sanremo 180,000,000 60,000,000 240,000,000 240,000,000 380,000 Flat C.so Mombello 25 piano 3 int. 4 Sanremo 220,000,000 80,000,000 300,000,000 300,000,000 550,000 Shop Corso Mombello 46/48/50 rr. Sanremo 138,355 599,861,645 600,000,000 600,000,000 600,000 Shop Via Boselli 21 r. Arma di Taggia 1,190,000 298,810,000 300,000,000 300,000,000 300,000 Shop Via Vittorio Emanuele 176 Bordighera 14,496,000 336,772,400 351,268,400 2,319,360 348,949,040 350,000 Shop Via Parini 13 piano terra e 1° piano interratoTorino 214,500,000 133,950,000 348,450,000 104,040,000 244,410,000 300,000 Offices Via D'Annunzio 79 Genoa 630,335,161 3,357,317,876 3,987,653,037 2,300,876,548 1,686,776,489 3,100,000 Offices Via Sestri 128/130/132 rr. Genoa 4,103,099,550 407,987,950 4,511,087,500 1,230,929,909 3,280,157,591 4,400,000 Offices Via Sestri 128/130/132 rr. Genoa 2,065,000,000 149,000,000 2,214,000,000 2,214,000,000 2,300,000 Offices Via D'Annunzio 83-89-93-103 Genoa 3,352,237,757 1,665,847,871 5,018,085,628 3,869,061,440 1,149,024,188 2,600,000 Offices Via Ceccardi 4/16 Genoa 2,622,345,416 2,622,345,416 708,033,258 1,914,312,158 2,650,000 Offices Via D'Annunzio 83-89-93-103 Genoa 61,698,116 27,911,062 89,609,178 68,617,113 20,992,065 40,000 Offices Via D'Annunzio 83-89-93-103 Genoa 1,370,813,962 5,074,692,015 6,445,505,977 3,752,204,562 2,693,301,415 3,700,000 Offices Piazza Faralli 36/38 rr. Genoa 3,316,300,678 2,664,167,016 5,980,467,694 3,084,159,626 2,896,308,068 3,800,000 Car parkings Via San Martino 65B ( 1 ) Genoa 10,317,583 10,317,583 1,392,872 8,924,711 450,000 Car parkings Via San Martino 65B ( 2 ) Genoa 10,747,482 10,747,482 1,450,908 9,296,574 Car parkings Via San Martino 65B ( 3 ) Genoa 10,747,483 10,747,483 1,450,908 9,296,575 Car parkings Via San Martino 65B ( 4 ) Genoa 10,747,483 10,747,483 1,450,908 9,296,575 Car parkings Via San Martino 65B ( 5 ) Genoa 10,747,483 10,747,483 1,450,908 9,296,575 Car parkings Via San Martino 65B ( 6 ) Genoa 10,962,432 10,962,432 1,479,929 9,482,503 Car parkings Via San Martino 65B ( 10 ) Genoa 10,747,483 10,747,483 1,450,908 9,296,575 Car parkings Via San Martino 65B ( 11 ) Genoa 10,962,432 10,962,432 1,479,928 9,482,504 Car parkings Via San Martino 65B ( 12 ) Genoa 10,962,432 10,962,432 1,479,928 9,482,504 Car parkings Via San Martino 65B ( 13 ) Genoa 10,962,432 10,962,432 1,479,928 9,482,504 Car parkings Via San Martino 65B ( 14 ) Genoa 11,177,382 11,177,382 1,508,945 9,668,437 Car parkings Via San Martino 65B ( 15 ) Genoa 11,177,382 11,177,382 1,508,945 9,668,437 Car parkings Via San Martino 65B ( 16 ) Genoa 11,177,382 11,177,382 1,508,945 9,668,437 Car parkings Via San Martino 65B ( 20 ) Genoa 11,392,331 11,392,331 1,537,965 9,854,366 Car parkings Via San Martino 65B ( 22 ) Genoa 11,607,281 11,607,281 1,566,981 10,040,300 Car parkings Via San Martino 65B ( 23 ) Genoa 11,607,281 11,607,281 1,566,981 10,040,300 Cellar Via Corsica 3 Genoa 300,000 3,076,074 3,376,074 300,000 3,076,074 Offices Via D'Annunzio Lotto D Genoa 336,065,383 155,118,760 491,184,143 119,469,198 371,714,945 Offices Via D'Annunzio 41 Genoa 3,674,499,806 11,819,868,494 15,494,368,300 6,968,438,375 8,525,929,925 Offices Via D'Annunzio 27 (81) Genoa 21,600,000 21,600,000 324,000 21,276,000 TotaleTotale (a)(a) 25,632,953,741 48,756,945,589 74,389,899,330 23,719,203,474 50,670,695,856 54,770,000
b)b) SupplementarySupplementary pensionpension fundfund
Flat Via XXV Aprile 4/7 Genoa 40,976,219 282,609,201 323,585,420 14,751,444 308,833,976 350,000 Flat Via XXV Aprile 4/8 Genoa 30,245,829 102,400,681 132,646,510 10,888,500 121,758,010 150,000 Flat Via XXV Aprile 4/9 Genoa 44,128,236 189,732,984 233,861,220 15,886,164 217,975,056 300,000 Flat Via XXV Aprile 4/12 Genoa 45,832,500 208,177,844 254,010,344 16,499,700 237,510,644 300,000 Flat Via XXV Aprile 6/6 amm.to Genoa 495,986 49,504,014 50,000,000 50,000,000 50,000 Warehouse Vico Monte di Pietà 3/5/7 rr. Genoa 23,501,979 228,554,443 252,056,422 8,460,708 243,595,714 250,000 Shop Sottopassaggio Via XXV Aprile 2 Genoa 1 39,999,999 40,000,000 40,000,000 40,000 Shop Via Antica Accademia 1 r. Genoa 1 69,999,999 70,000,000 70,000,000 80,000 Shop Via Antica Accademia 3 r. Genoa 1 79,999,999 80,000,000 80,000,000 80,000 Shop Via Antica Accademia 5 r. Genoa 1 99,999,999 100,000,000 100,000,000 100,000 Shop Piazza S. Matteo 6 A - 6 B (piani terreno e Genoaamm.to) 40,809,728 562,761,124 603,570,852 14,691,504 588,879,348 600,000 Offices Piazza S. Matteo 15/3 - 4 Genoa 39,478,772 563,975,620 603,454,392 14,212,356 589,242,036 700,000 Shop Vico S. Matteo 13 r. - Piazzetta Tavarone 15Genoa r. 13,220,514 137,936,280 151,156,794 4,759,380 146,397,414 200,000 Shop Vico dell'Isola 4 r. Genoa 13,361,109 77,807,987 91,169,096 4,809,996 86,359,100 90,000 Shop Vico dell'Isola 6 r. Genoa 11,017,877 19,946,186 30,964,063 3,966,432 26,997,631 30,000 Flat Via Luccoli 17/3 Genoa 8,342,173 92,387,767 100,729,940 3,003,180 97,726,760 100,000 Flat Via Luccoli 17/6 Genoa 55,100,000 49,721,250 104,821,250 19,836,000 84,985,250 100,000 Flat Via Luccoli 17/9 Genoa 11,161,677 48,838,323 60,000,000 4,018,200 55,981,800 60,000 Flat Via Luccoli 17/9 A Genoa 13,389,221 46,610,779 60,000,000 4,820,124 55,179,876 60,000 Flat Via Luccoli 17/10 A-B-C Genoa 27,106,929 77,413,132 104,520,061 9,758,496 94,761,565 100,000 Flat Via Luccoli 17/11 A Genoa 7,196,322 33,433,357 40,629,679 2,590,680 38,038,999 40,000
167 Estimated Location cost price Revaluation Revaluated Depreciation Balance Break-up (1) cost fund at 31/12/00 sheet value value at 31/12/00
Flat Via Luccoli 17/12 Genoa 16,004,414 105,395,971 121,400,385 5,761,584 115,638,801 120,000 Flat Via Luccoli 17/13 Genoa 4,799,264 35,620,672 40,419,936 1,727,736 38,692,200 40,000 Flat Via Luccoli 17/14 A Genoa 55,042,000 9,774,175 64,816,175 19,815,120 45,001,055 60,000 Shop Via Cassa di Risparmio 14 Genoa 10,232,415 70,662,920 80,895,335 3,683,664 77,211,671 80,000 Flat Via Davide Chiossone 7/2 Genoa 24,000,000 78,100,000 102,100,000 8,640,000 93,460,000 170,000 Flat Via Davide Chiossone 8/1 Genoa 2,941,752 57,058,248 60,000,000 1,059,027 58,940,973 60,000 Flat Via Davide Chiossone 8/2 Genoa 3,669,693 36,651,406 40,321,099 1,321,092 39,000,007 40,000 Shop Via Davide Chiossone 26 r. Genoa 11,888,191 159,409,428 171,297,619 4,279,749 167,017,870 200,000 Offices Via G. D'Annunzio Lotto "I" (quota 24,50) Genoa 827,118,000 75,254,825 902,372,825 297,762,480 604,610,345 830,000 Flat Sal. Montagnola della Marina 3 - 1° piano sot.Genoa 171,411,019 33,587,446 204,998,465 61,707,972 143,290,493 350,000 Flat Sal. Montagnola della Marina 3 - 2° piano sot.Genoa 171,411,019 33,587,446 204,998,465 61,707,972 143,290,493 350,000 Flat Sal. Montagnola della Marina 3 - piano terrenoGenoa 224,547,120 45,100,754 269,647,874 80,836,968 188,810,906 400,000 Flat Sal. Montagnola della Marina 3 - 1° piano Genoa 224,547,120 45,100,754 269,647,874 80,836,968 188,810,906 400,000 Flat Sal. Montagnola della Marina 3 - 2° piano Genoa 244,960,494 46,473,550 291,434,044 88,185,780 203,248,264 400,000 Flat Sal. Montagnola della Marina 3 - 3° piano Genoa 224,547,120 45,100,754 269,647,874 80,836,968 188,810,906 400,000 Flat Sal. Montagnola della Marina 3 - 4° piano Genoa 244,960,494 46,473,550 291,434,044 88,185,780 203,248,264 400,000 Flat Sal. Montagnola della Marina 3 - 5° piano Genoa 224,547,120 45,100,754 269,647,874 80,836,968 188,810,906 400,000 Flat Sal. Montagnola della Marina 3 - 6° piano Genoa 244,960,494 46,473,550 291,434,044 88,185,780 203,248,264 400,000 Flat Via Posalunga 9 A/1 Genoa 2,136,050 147,863,950 150,000,000 150,000,000 240,000 Flat Via G. Jori 22/2 Genoa 1,309,000 98,691,000 100,000,000 100,000,000 190,000 Flat Via S. D'Acquisto 1/1 Genoa 2,156,875 117,843,125 120,000,000 120,000,000 190,000 Shop Via XXV Aprile 2 B S. Margherita L. 1,844,500 448,155,500 450,000,000 450,000,000 450,000 Shop Via Roma 1 Busalla 5,891,000 234,624,463 240,515,463 1,119,290 239,396,173 350,000 Flat Via Matteotti 46/1 Torriglia 833,000 79,167,000 80,000,000 80,000,000 160,000 Car parking Via Molinetto 7 (parte - mq. 15) Torriglia 748,040 29,317,413 30,065,453 269,292 29,796,161 30,000 Flat Via Sauli Pallavicini 27/4 Arenzano 1,041,250 318,958,750 320,000,000 320,000,000 430,000 Cellar Via Sauli Pallavicini 25 Arenzano 106,061 2,389,294 2,495,355 106,061 2,389,294 10,000 Shop Piazza Camillo Golgi 19 D Arenzano 255,000,000 102,675,000 357,675,000 99,450,000 258,225,000 336,000 Flat Piazza Schiaffino 11 Camogli 148,750 119,851,250 120,000,000 120,000,000 180,000 Warehouse Piazza Schiaffino 6 - 2° piano interrato Camogli 297,500 99,702,500 100,000,000 100,000,000 100,000 Flat Via Mandelli 29/1 Casella 7,976,134 77,023,866 85,000,000 85,000,000 170,000 Flat Via Mandelli 29/2 Casella 9,176,928 90,823,072 100,000,000 100,000,000 200,000 Shop Via Medicina 102 Serra Riccò 4,626,769 125,778,073 130,404,842 1,017,891 129,386,951 150,000 Shop Piazza La Scafa - Residence al Porto Lavagna 1,749,375,000 258,033,000 2,007,408,000 734,738,000 1,272,670,000 1,750,000 Flat Via Adige 28/11 Albenga 22,752,520 157,247,480 180,000,000 180,000,000 400,000 Flat Via Ghilini 25/2 - 1° piano Loano 1,606,500 148,393,500 150,000,000 150,000,000 300,000 Flat Via Ghilini 25/2 - 2° piano Loano 1,718,062 148,281,938 150,000,000 150,000,000 220,000 Flat Via Ghilini 25/2 - 3° piano Loano 1,718,063 148,281,937 150,000,000 150,000,000 300,000 Flat Via Ghilini 25/2 - 4° piano Loano 1,071,000 168,929,000 170,000,000 170,000,000 270,000 Flat Piazza Unità Nazionale 19/9 sc. A Imperia 20,000,000 200,000,000 220,000,000 220,000,000 450,000 Cellar Via Berio 10 Imperia 2,000,000 4,315,000 6,315,000 1,860,000 4,455,000 5,000 Flat Via Eula 31/1 Pieve di Teco 4,496,011 60,503,989 65,000,000 65,000,000 150,000 Flat Via Eula 31/2 Pieve di Teco 4,496,011 60,503,989 65,000,000 65,000,000 150,000 Shop Via Eula 31 A/29 Pieve di Teco 14,487,148 126,780,476 141,267,624 5,215,368 136,052,256 160,000 Flat Via Blengino 12/1 Arma di Taggia 7,441,333 132,558,667 140,000,000 140,000,000 350,000 Flat Piazzetta Pattari 5/7 4° piano Milan 1,593,600,000 945,840,000 2,539,440,000 573,696,000 1,965,744,000 2,400,000 Flat Piazzetta Pattari 5/7 5° piano Milan 1,041,600,000 549,540,000 1,591,140,000 374,976,000 1,216,164,000 1,500,000 Shop Corso Italia 55 F. Ronco Scrivia 19,852,000 327,071,830 346,923,830 19,852,000 327,071,830 330,000 TotalTotal (b)(b) 8,136,458,309 9,605,882,233 17,742,340,542 3,020,624,374 14,721,716,168 20,801,000 c)c) OthersOthers
Via Blengino 12/2 Arma di Taggia 9,921,778 120,078,222 130,000,000 130,000,000 130,000 Flat Corso Gastaldi 9/12 Genoa 70,000,000 130,000,000 200,000,000 200,000,000 200,000 Rue Emma Tiranty 14 Nizza 61,962,636 0 61,962,636 61,962,636 62,000 TotalTotal (c)(c) 141,884,414 250,078,222 391,962,636 391,962,636 392,000
TotalTotal (a+b+c)(a+b+c) 33,911,296,464 58,612,906,044 92,524,202,508 26,739,827,848 65,784,374,660 75,963,000
TOTALTOTAL REALREAL ESTATEESTATE 232,241,195,998 366,738,937,877 598,980,133,875 159,652,800,224 439,327,333,652 516,900,100
(1) Revaluation Laws 576/75, 72/83,.218/90 and 413/91
168 LEASED FIXED ASSETS REVALUED IN ACCORDANCE WITH LAW 413/91
(Millions of Italian Lire) REVALUATION LAW 413/91
Via Puggia 43,45,47 r. Genova 43,259,987 Piazzetta Tavarone 5 Genova 2,132,284 Via Macaggi 23/3 Genova 10,270,220 Via Gramsci 14/b - Manesseno S.Olcese 19,741,698 Via delle Fabbriche 8 f/r Ge-Voltri 13,841,927 Via Gramsci 14 - Manesseno S. Olcese 11,260,281 Corso Buenos Ayres 73/b r Genova 41,481,876 Via B. Parodi 186/A Loc. Ponte Ceranesi 7,350,078 Via Ponte Polcevera 8 Ge-Rivarolo 17,825,188 Via Ponte Polcevera 8 Ge-Rivarolo 32,240,228 Loc. Anderlino fraz. Avenza Carrara 47,141,889 Total 246,545,656
169 CONVERTIBLE BONDS
(millions of italian Lire) Balance at 31/12/1999
Code Description Nominal Cost Book Value price value
134735 CBANCA CV MPS 2,112,470,570 90.350 1,908,617,160 135364 MLOMBARDO ACEA 1,345,712,490 98.700 1,328,218,233 146963 FINMECCANICA 2% - - -
Total 3,458,183,060 3,236,835,393
170 Changes Balance at 31/12/2000
Nominal Countervalue Depreciation Writebacacks Nominal Cost Book Value Value Price value
- 2,112,470,570 - 1,713,189,448 - 195,427,712 - - - - - 1,345,712,490 - 1,345,712,491 17,494,258 - - - - 2,420,349,602 2,420,349,602 - 103,590,968 2,420,349,602 95.720 2,316,758,634
- 1,037,833,458 - 638,552,337 - 177,933,454 - 103,590,968 2,420,349,602 2,316,758,634
171 LIST OF NON SIGNIFICANT INVESTMENTS
Denomination Head Office Capital stock Number of our Number of our % our Nominal value of Book value at quotas or shares quotas or shares sharehol our quotas or 31/12/00 in which Capital ding shares (Lire) stock is divided (Lire) (Lire)
AUTOSTRADA DEI FIORI SpA Savona 36,000,000,000 4,000,000 664,800 16.620 5,983,200,000 5,991,605,410 CONSORZIO PER IL GIURISTA D'IMPRESA Scrl Genoa 114,000,000 114,000 20,000 17.544 20,000,000 32,442,803 W.T.C. GENOVA SpA Genoa 7,089,970,650 101,213 15,453 15.268 1,082,482,650 963,097,218 SVILUPPO GENOVA SpA Genoa 10,000,000,000 10,000 1,500 15.000 1,500,000,000 1,500,000,000 SVIL. VALLI DELLA PROV. IMPERIA Srl Taggia (IM) 80,000,000 80,000 12,000 15.000 12,000,000 3,752,623 ANTOLA E PENNA LEADER Srl Borzonasca (GE) 44,000,000 44,000 6,000 13.636 6,000,000 31,668,470
GAL AREE RURALI DELLA PROVINCIA DELLA SPEZIA Scrl Beverino (SP) 160,500,000 1,605 200 12.461 20,000,000 10,044,000 SOC. ZONA FRANCA GENOVA Srl Genoa 175,200,000 175,200 19,200 10.959 19,200,000 17,719,775 LIGURCAPITAL SpA Genoa 11,000,000,000 11,000 1,182 10.745 1,182,000,000 1,184,358,744 C.I.V. SpA Milan 10,000,000,000 100,000 10,000 10.000 1,000,000,000 882,593,121 F.I.L.S.E. SpA Genoa 31,588,991,000 31,588,991 2,783,084 8.810 2,783,084,000 2,741,150,788 METIM NORD-OVEST S.p.A. in liquidazione Torino 3,660,000,000 3,660,000 300,000 8.197 300,000,000 1 FINLIGURE SpA Genoa 8,553,342,765 2,728,339 153,600 5.630 481,536,000 1 Agenzia Regionale per il Recupero Edilizio SpA Genoa 1,000,000,000 1,000,000 51,276 5.128 51,276,000 51,276,000 IAM PIAGGIO SpA Genoa 200,533,520 911,516 43,034 4.721 9,467,480 1 COOP. ART. PROV. GE Scrl Genoa 1,247,850,580 6,239 250 4.007 50,000,000 50,000,000 BIC LIGURIA SpA Genoa 8,000,000,000 8,000 320 4.000 320,000,000 319,046,288 BANCA D'ITALIA Rome 300,000,000 300,000 11,869 3.956 11,869,000 949,520,000 SOC. COOP. AGRICOLA SpA Sanremo 2,044,000,000 3,500,000 131,250 3.750 76,650,000 1 IMMOCRI SpA Rome 117,814,233,000 117,814,233 4,152,773 3.525 4,152,773,000 3,820,859,170 BUSINESS DATENBANKEN DM Frankfurt DM 50.000 50,000 1,666 3.332 1,666 26,159,116
172 Denomination Head Office Capital stock Number of our Number of % our Nominal Book value at quotas or our quotas sharehold value of our 31/12/00 shares or shares ing quotas or (Lire) in which shares (Lire) Capital stock (Lire) is divided
IMPIANTI Srl in liquidazione Vimadrone (MI) 180,000,000 180,000 5,191 2.884 5,191,000 7,498,654 INTESA ASSET MANAGEMENT SpA Milan EURO 46.668.752 897,476 25,000 2.786 1,300,000 2,199,191,166 CENTRO FACTORING SpA Florence 43,785,000,000 6,300,000 175,000 2.778 1,216,250,000 1,158,045,521 FINCANTIERI SpA Trieste EURO 331.500.000 650,000,000 14,999,994 2.308 7,649,997 14,999,994,000 SERVIZI INTERBANCARI SpA Milano 45,000,000,000 45,000,000 945,496 2.101 945,496,000 935,967,507 SCI SpA Genova 84,879,715,908 6,529,208,916 119,708,400 1.833 1,556,209,200 1 BANCA MEDIOCREDITO SpA Turin 500,000,000,000 50,000,000 877,499 1.755 8,774,990,000 10,011,045,409 CENTRO LEASING SpA Florence 174,381,891,225 31,279,263 502,359 1.606 2,800,651,425 2,446,555,671 SO.GE.MER. SpA in liquidazione Reggio Emilia 2,119,266,000 2,119,266 24,000 1.132 24,000,000 16,841,742 Società per i Servizi Bancari SpA Milan 20,699,969,750 82,799,879 835,379 1.009 208,844,750 118,430,957 CENTRALE DEI BILANCI Srl Turin 9,000,000,000 1,800 15 0.833 75,000,000 87,169,311 Cassa di Risparmio di Firenze SpA Florence 1,063,831,673,000 1,063,831,673 8,766,953 0.824 8,766,953,000 9,432,038,606 SITEBA - Sistema Telematici Bancari SpA Rome 5,000,000,000 5,000,000 33,091 0.662 33,091,000 33,091,000 MONTE TITOLI SpA Milan EURO 16.000.000 16,000,000 105,078 0.657 105,078 232,837,873 EUROSIM Società di Intermediazione Mobiliare SpA Rome 4,300,000,000 1,000,000 3,210 0.321 13,803,000 1
Istituto per l'Enciclopedia della Banca e della Borsa SpA Rome 3,239,460,000 323,946 756 0.233 7,560,000 4,807,323 TM.E. Tecnomeccanica Ecologica SpA La Spezia 49,972,000,000 499,720 708 0.142 70,800,000 140,562,289 S.I.A. - Cedborsa SpA Milan EURO 18.123.684 34,853,238 18,167 0.052 9,447 19,944,428 EUROTUNNEL Paris/Folkestone FF 8.136.727.000 1,688,784,219 734,290 0.043 3,537,881 1,400,515,066 S.W.I.F.T. Bruxelles EURO 10.844.500 86,756 21 0.024 2,625 27,711,081 ELSAG BANKLAB SpA Genoa 13,800,000,000 13,800,000 62 0.000 62,000 10,035,891 ASSOCAAF SpA Milan 300,000,000 300,000 1 0.000 1,000 1,000
173 INFORMATION ON SUBSIDIARIES AND OTHER SIGNIFICANT COMPANY INTERESTS
Galeazzo Srl Columbus Carige Immobiliare Ettore Centro Immobiliare SpA Vernazza SpA Fiduciario SpA (millions of Italian Lire) BALANCE SHEET (1) (1) (1) (1) ASSETS Loans to banks 5,693 - 2,691 1,571 Other loans (4) 105 2,239 8 299 Securities - - 4,500 (6) 952 Equity investments 10 1 - - Tangible and intangible fixed assets 3,419 63,963 5,891 66 Other assets 1 9 6 14 Total assets 9,228 66,212 13,096 2,902 LIABILITIES AND STOCKHOLDERS' EQUITY Amounts owed to banks - 3,884 - 598 Other payables (5) 92 23,150 636 425 Other liabilities 440 - 1,144 268 Stockholders' equity 8,696 39,178 11,316 1,611 Total liabilities and stockholders' equity9,228 66,212 13,096 2,902 INCOME STATEMENT Profit (loss) on ordinary activities 386 - 466 3,207 556 Extraordinary profit (loss) - - 2 13 Changes of reserves for general banking risks - - - - Taxation 145 43 1,441 263 Profit (loss) for the financial year 241 - 509 1,768 - 306
(1) Financial statements as of 31/12/00 prepared by directors. (2) Thousands of DM. (3) Financial statements as of 30/9/00 (4) With reference to insurance companies, item is related to reserves of reinsurers and retrocessionaries. (4) With reference to insurance companies, item includes actuarial, premium and damage reserves. (6) Own shares.
174 Levante Norditalia Carige Banca del Monte Bankenunion Cassa di Risparmio Eptaconsors SpA. Assicurazioni Vita Nuova SpA di Lucca SpA Frankfurt Am Main di SpA Aktiengesellschaft Savona (1) (1) (1) (2) (3) (1) (1)
43,323 38,990 23,348 333,360 375,736 3,277 1,097,906 693,362 402,473 394,767 1,172,049 1,417 528,597 831,694 75,034 416,327 773,315 72,670 1,898 1,019 1,679 100 57,527 85,411 390,534 123,757 26,252 2,087 30,373 799 13,859 12,592 32,250 1,479 145,179 286,822 2,076,117 1,701,414 561,036 1,148,120 2,554,179 450,396
95 - 47,785 845,084 58,315 8 1,853,891 1,597,179 434,486 257,551 2,006,663 509 28,443 4,258 31,915 1,130 156,016 125,997 193,688 99,977 46,850 44,355 333,185 323,882 2,076,117 1,701,414 561,036 1,148,120 2,554,179 450,396
- 68,651 12,153 3,762 33 28,128 252,246 69,300 - 694 21 12 2,723 282 ------42 5,950 2,367 2 14,250 91,174 607 5,509 1,416 43 16,601 161,354
175 INFORMATION ON OPEN PENSION FUND
“FONDO PENSIONE APERTO CARIGE”
"Asset defence" investment "Contribution paid development" "Long term asset revaluation" investment investment
BALANCE SHEET - ACCUMULATION OF CAPITAL 31/12/00 31/12/99 31/12/00 31/12/99 31/12/00 31/12/99 10 - Investments 212,186,283 37,678,846 878,492,224 188,464,614 3,482,884,831 531,691,764 10 a) - Investments - banking deposits 3,183,460 276,499 3,180,343 5,284,836 15,034,420 3,549,976 10 h) - Investments - mutual funds and unit trusts 209,002,823 37,402,347 875,311,881 183,179,778 3,467,850,411 528,141,788 10 l) - Investments - accrued income and prepaid expenses 225,788 42,695 1,189,838 249,895 5,243,497 884,082 30 - Financial management liabiities -125,586 - -772,359 - -4,127,276 - 30 c) - Accruals and payables liabilities -125,586 - -772,359 - -4,127,276 - 100 - Net asset for benefits 212,060,697 37,678,846 877,719,865 188,464,614 3,478,757,555 531,691,764 Credit account 31,600,294 - 266,730,312 - 795,831,406 - INCOME STATEMENT - ACCUMULATION OF CAPITAL 10 - Settlement of social security management 169,480,145 37,814,153 693,636,237 182,284,098 3,158,703,607 494,344,698 10 a) - Social security contributions 171,955,182 37,814,153 701,361,180 182,284,098 3,187,806,616 494,344,698 10 f) - Other contributions -2,475,037 - -7,724,943 - -29,103,009 - 20 - Settlement of financial management 6,137,434 73,888 2,632,301 6,610,329 -178,886,216 38,411,066 20 a) - Dividends and interests 1,292,267 155,560 8,540,868 667,529 38,748,054 1,885,404 20 b) - Profits (losses) from financial transactions, net 4,845,167 -81,672 -5,908,567 5,942,800 -217,634,270 36,525,662 30 - Operating expenses -1,052,634 -166,500 -6,073,343 -179,918 -28,392,186 -179,918 30 a) - Management trust -836,546 - -5,857,255 - -28,176,098 - 30 c) - Other expenses -216,088 -166,500 -216,088 -179,918 -216,088 -179,918 Changes on net asset for benefits (10)+(20)+(30) 174,564,945 37,721,541 690,195,195 188,714,509 2,951,425,205 532,575,846
176 PROFORMA BALANCE SHEET
ASSETS change (millions of Italian Lire) 31/12/00 31/12/99 absolute % 10 - CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 216,844 157,432 59,412 37.7 20 - TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 838,802 1,856,585 - 1,017,783 -54.8 30 - LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 1,863,408 1,198,335 665,073 55.5 (a) repayable on demand 981,533 237,933 1,487,200 … (b) other loans and advances 881,875 960,402 - 157,054 -8.2 40 - ACCRUED INCOME AND PREPAID EXPENSES: 12,166,038 10,583,570 1,582,468 15.0 including: – loans using funds managed on behalf of third parties 308 186 244 65.6 50 - BONDS AND OTHER FIXED–INCOME SECURITIES: 3,868,865 2,800,718 1,068,147 38.1 (a) issued by public bodies 2,261,355 1,600,555 1,321,600 41.3 (b) issued by banks 944,852 641,744 606,216 47.2 including: – own securities 109,019 99,189 19,660 9.9 (c) issued by financial institutions 491,576 275,201 432,750 78.6 including: – own securities - (d) issued by others 171,082 283,218 - 224,272 -39.6 60 - SHARES, QUOTAS AND OTHER EQUITY SECURITIES 273,447 276,590 - 3,143 -1.1 70 - EQUITY INVESTMENTS 104,641 99,967 4,674 4.7 80 - INVESTMENTS IN GROUP COMPANIES 1,086,328 959,262 127,066 13.2 90 - INTANGIBLE FIXED ASSETS 165,124 57,103 108,021 … including: – start-up costs 8,817 13,012 - 8,390 -32.2 – goodwill 123,216 13,431 219,570 … 100 - TANGIBLE FIXED ASSETS 1,014,300 901,509 112,791 12.5 including: – leasing 541,587 425,773 115,814 27.2 120 - OWN SHARES 34,130 9,788 24,342 … (nominal value: Lit. 19,157) - - - 130 - OTHER ASSETS 722,700 771,558 - 48,858 -6.3 140 - ACCRUED INCOME AND PREPAID EXPENSES: 175,675 138,899 36,776 26.5 (a) accrued income 164,079 132,339 63,480 24.0 (b) prepaid expenses 11,596 6,560 10,072 76.8 including: – discount on bonds issued 2,398 1,455 1,886 64.8 TOTAL ASSETS 22,530,302 19,811,316 2,718,986 13.7
177 LIABILITIES AND STOCKHOLDERS’ EQUITY change (millions of Italian Lire) 31/12/00 31/12/99 absolute % 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,521,974 2,998,448 1,523,526 50.8 (a) repayable on demand 264,971 52,027 212,944 … (b) with agreed maturity dates or periods of notice 4,257,003 2,946,421 1,310,582 44.5 20 - AMOUNTS OWED TO CUSTOMERS: 7,918,982 7,381,578 537,404 7.3 (a) repayable on demand 7,232,507 6,809,281 423,226 6.2 (b) with agreed maturity dates or periods of notice 686,475 572,297 114,178 20.0 30 - DEBTS EVIDENCED BY CERTIFICATES: 5,472,208 4,944,114 528,094 10.7 (a) bonds 4,385,761 3,745,855 639,906 17.1 (b) certificates of deposits 946,889 1,102,221 - 155,332 - 14.1 (c) other 139,558 96,038 43,520 45.3 40 - FUNDS MANAGED ON BEHALF OF THIRD PARTIES 450 445 5 1.1 50 - OTHER LIABILITIES 705,167 683,685 21,482 3.1 60 - ACCRUED EXPENSES AND DEFERRED INCOME: 285,292 201,802 83,490 41.4 (a) accrued expenses 217,979 154,483 63,496 41.1 (b) deferred income 67,313 47,319 19,994 42.3 70 - RESERVE FOR TERMINATION INDEMNITIES 119,794 112,786 7,008 6.2 80 - RESERVES FOR RISKS AND CHARGES 787,104 763,987 23,117 3.0
(a) reserves for pensions and similar commitments 575,943 574,352 1,591 0.3 (b) reserves for taxation 166,875 166,339 536 0.3 (c) other reserves 44,286 23,296 20,990 90.1 90 - RESERVES FOR LOAN LOSSES 10,000 5,000 5,000 … 100 - RESERVES FOR GENERAL BANKING RISKS 10,000 10,000 - - 120 - CAPITAL STOCK 1,970,173 1,970,173 - - 130 - ADDITIONAL PAID-IN CAPITAL 241,368 299,189 - 57,821 - 19.3 140 - RESERVES 282,164 237,531 44,633 18.8 (a) legal reserve 71,043 52,878 18,165 34.4 (b) reserve for purchase of treasury stock 34,130 9,788 24,342 … (c) statutory reserves - - - - (d) other reserves 176,991 174,865 2,126 1.2 150 - REVALUATION RESERVES 15,405 15,405 - - 160 - DEFERRED INCOME 5,528 2,945 2,583 87.7 170 - NET INCOME 184,693 184,228 465 0.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 22,530,302 19,811,316 2,718,986 13.7
GUARANTEES AND COMMITMENTS 10 - GUARANTEES GIVEN 2,152,098 1,828,213 323,885 17.7 including: – acceptances 8,544 15,572 - 7,028 - 45.1 – other guarantees 2,143,554 1,812,641 330,913 18.3 20 - COMMITMENTS 1,407,036 820,521 586,515 71.5 including: – repurchase agreements - - - -
179 PROFORMA INCOME STATEMENT
Variazioni % (millions of Italian Lire) 2000 1999 2000 1999 10 - INTEREST INCOME AND SIMILAR REVENUES 1,046,941 858,555 21.9 - 24.1 including: – loans and advances to customers 762,912 606,567 25.8 - 15.2 – fixed-income securities 231,934 202,550 14.5 - 32.4 20 - INTEREST EXPENSE AND SIMILAR CHARGES - 482,527 - 371,873 29.8 - 37.1 including: – amounts owed to customers - 96,715 - 77,635 24.6 - 51.4 – securities issued - 212,991 - 167,315 27.3 - 32.2 30 - DIVIDENDS AND OTHER REVENUES: 57,617 52,702 9.3 ... (a) from shares, quotas and other equity securities 3,905 5,768 - 32.3 ... (b) from equity investments 20,140 45,157 - 55.4 ... (c) from equity investments in group companies 33,572 1,777 ... - 37.7 40 - COMMISSION INCOME 279,306 263,514 6.0 17.8 50 - COMMISSION EXPENSES - 21,504 - 16,211 32.7 - 11.5 60 - GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 25,229 80,788 - 68.8 - 13.2 70 - OTHER OPERATING INCOME 169,192 144,722 16.9 11.6 80 - ADMINISTRATIVE COSTS: - 524,027 - 526,484 - 0.5 0.3 (a) personnel - 334,173 - 340,692 - 1.9 - 0.9 including: – wages and salaries - 207,553 - 223,135 - 7.0 - 0.2 – social security costs - 56,224 - 65,103 - 13.6 - 2.2 – termination indemnities - 16,811 - 16,380 2.6 3.3 – pensions and similar commitments - 23,281 - 21,906 6.3 - 8.2 (b) other administrative costs - 189,854 - 185,792 2.2 2.6 90 - DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS - 121,537 - 114,068 6.5 14.3 100 - PROVISIONS FOR RISKS AND CHARGES - 5,062 - 2,751 84.0 96.5 110 - OTHER OPERATING EXPENSES - 11,976 - 11,330 5.7 49.0 120 - PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS - 91,609 - 74,235 23.4 - 16.9 130 - RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 17,974 24,508 - 26.7 - 20.7 140 - ADDITIONAL PROVISIONS FOR LOAN LOSSES - 10,000 - 5,000 ... - 16.7 150 - WRITE-DOWNS TO FINANCIAL FIXED ASSETS - 1,708 - 2,842 - 39.9 ... 160 - RECOVERIES OF FINANCIAL FIXED ASSETS - 1,953 - 100.0 ... 170 - INCOME FROM ORDINARY ACTIVITIES 326,309 301,948 8.1 8.1 180 - EXTRAORDINARY INCOME 24,866 44,109 - 43.6 ... 190 - EXTRAORDINARY EXPENSES - 8,154 - 10,112 - 19.4 ... 200 - EXTRAORDINARY INCOME, NET 16,712 33,997 - 50.8 ... 220 - INCOME TAXES - 152,800 - 154,300 - 1.0 12.1 230 - NET INCOME 190,221 181,645 4.7 23.6
179 LIST OF EXCHANGE RATES USED IN CONVERTING CURRENCY INTO LIRE
CURRENCY 2000 1999 US dollar USD 2,080.891 1,927.404 British pound LGS 3,102.499 3,114.476 Danish krone DKR 259.445 260.136 Greek drachma DRA 5.682 5.862 Canadian dollar CAN 1,386.516 1,325.486 Japponese yen YEN 18.109 18.848 Swiss franc FS 1,271.185 1,206.324 Norwegian krone NKR 235.169 239.741 Swedish krona SKR 219.250 226.134 Australian dollar AUD 1,154.603 1,255.525 South African rand RND 275.069 313.110 Hong Kong dollar HKD 266.784 248.176 Indian rupee RPS 44.614 44.215 Tunisian dinar TND 1,502.148 1,528.232 Malaysian ringgit MYR 548.363 506.082 Moroccan dirham MAD 196.097 191.048 Singapore dollar SGD 1,200.713 1,157.364 United Arab Emirates dirham AED 566.906 524.592 Czech koruna CZK 55.247 53.632 Argentine peso ARS 2,082.010 1,920.903 Mexican peso MXN 217.705 206.346 Brazilian real BRL 1,069.171 1,066.580 Indonesian rupee IDR 0.217 0.272 Philippines peso PHP 41.685 47.493 Thaylandian bath THB 48.255 50.825 Hungaryan forint HUF 7.306 7.602 Polish zloty PLZ 502.953 465.595 Venezuelan bolivar VEB 2.980 2.996 Israeli shekel ILS 515.170 462.316 Peruvian sol PEN 590.146 554.869 South korean won KRW 1.644 1.697 New Zeland dollar NZD 916.794 1,000.294 Algerian dinar DNA 29.401 29.319 Sri Lanka rupee LKR 25.195 26.812 Qatar riyal QAR 572.692 527.450 Libyian dinar LYD 4,634.220 4,264.912 Honduras lempira HNL 137.493 131.115 Saudi Arabian riyal SAR 556.843 511.786 Chinese renbimby RBY 251.915 231.795 Uruguayan peso UYP 162.729 165.092 C.F.A. franc XAF 2.952 2.952 Mauritanian anguiya MRO 8.198 8.934 Yemeni riyal YER 12.686 12.033 Jordanian dinar JOD 2,941.319 2,706.896 Bahrain dinar BHD 5,529.040 5,083.408 Iranian riyal IRR 1.100 1.095 Egyptian pound EGP 535.621 564.461 Kuwait dinar KWD 6,803.718 6,313.238 Iraqi dinar IQD 1.546 1.537 Pakistan rupee PKR 36.003 36.992
180 CONSOLIDATED ACCOUNTS 2000
BANCA CARIGE GROUP
181 CONSOLIDATED FINANCIAL HIGHLIGHTS
Consolidated Consolidated Pro forma (1) 31/12/00 30/9/00 31/12/99 Change % 31/12/99 31/12/98 Change % 00/99 00/99 99/98 BALANCE SHEET (2) Total assets 24,787.2 22,918.8 20,274.8 22.3 22,133.0 21,880.9 12.0 1.2 Funding 20,030.4 18,425.2 15,809.5 26.7 17,485.4 17,483.1 14.6 0.0 – Customer Deposits 15,744.2 14,755.5 12,783.4 23.2 14,719.3 13,869.0 7.0 6.1 – Amounts owed to customers 9,702.3 8,759.0 7,729.2 25.5 9,171.6 8,734.1 5.8 5.0 – Debts evidenced by certificates 6,041.9 5,996.5 5,054.2 19.5 5,547.7 5,134.9 8.9 8.0 – Deposits from Banks 4,285.8 3,669.2 3,025.7 41.6 2,765.7 3,607.8 55.0 -23.3 – Funds managed on behalf of third parties 0.4 0.5 0.4 - 0.4 6.3 0.0 -93.7 Other Financial Intermediation Activities (OFIA)23,807.5 23,845.4 20,010.0 19.0 22,456.7 20,938.5 6.0 7.3 – Assets Under Management 11,790.9 11,940.4 11,177.6 5.5 12,569.4 10,938.2 -6.2 14.9 – Assets in Custody 12,016.6 11,905.0 8,832.4 36.1 9,887.3 10,000.3 21.5 -1.1 Total Financial Intermediation Activities (TFIA)39,551.7 38,600.9 32,793.4 20.6 37,176.0 34,807.5 6.4 6.8
Lending (3) (4) 22,320.4 21,114.7 18,002.1 24.0 20,044.3 20,009.2 11.4 0.2 – Loans to Customers (3) (4) 14,597.6 13,864.1 11,689.1 24.9 12,908.5 11,578.8 13.1 11.5 – Loans to Banks (3) 1,933.3 1,173.4 1,283.9 50.6 1,402.2 1,810.5 37.9 -22.6 – Securities 5,789.5 6,077.2 5,029.1 15.1 5,733.6 6,619.9 1.0 -13.4
Shareholders’ Equity (4) 2,439.7 2,498.2 2,505.9 - 2.6 2,505.9 2,009.1 -2.6 24.7 GROUP INSURANCE COMPANIES (2) Total premiums 1,507.8 1,084.2 1,396.9 7.9 1,396.9 1,244.9 7.9 12.2 Damages paid-out 1,024.0 693.5 918.6 11.5 918.6 762.0 11.5 20.6 INCOME STATEMENT (2) Operating Income 406.9 328.9 299.7 35.8 332.5 404.4 22.4 -17.8 Income from Ordinary Activities 301.5 280.2 237.9 26.7 246.2 309.1 22.5 -20.3 Income before Taxation 316.7 284.7 284.4 11.4 309.3 325.0 2.4 -4.8 Net Income 155.4 150.0 127.6 21.8 127.6 153.9 21.8 -17.1 RESOURCES (6) Number of branches 342 316 265 29.1 311 301 10.0 3.3 Number of employees (7) 3,701 3,707 3,230 14.6 3,689 3,641 0.3 1.3 Insurance companies: - number of branches 558 568 646 -13.6 646 750 -13.6 -13.9 - number of employees 405 410 413 - 1.9 413 418 -1.9 -1.2 FINANCIAL RATIOS Non interest income / Gross operating income 46,56% 50.19% 48.38% 49.88% 45.10% Operating costs / Gross operating income 66,87% 64.80% 69.32% 70.96% 66.60% Income before Taxation / Shareholders’ Equity (5) 12.98% 11.40% 11.35% 12.34% 16.18% ROE 6,37% 6.00% 5.09% 5.09% 7.66%
ROAE (8) 6,28% 6.00% 5.65% 5.65% 8.16% SOLVENCY RATIOS (9) Risk-Weighted Assets (RWA) (2) 13,387.4 12,599.5 11351.8 18.0 12,758.6 11,655.1 5.0 9.5 Tier 1% of RWA 15.08% 17.60% 19.35% 17.11% 18.21% Total Capital % of RWA 14.29% 17.04% 16.23% 16.86% 18.04% (1) Pro forma consolidated includes Group Cassa di Risparmio di Savona SpA and Banca del Monte di Lucca. (2) Billions of Italian Lire. (3) Gross of allowance for credit risks. (4) Including leased fixed assets. (5) Including reserves for general banking risks. (6) Statistics at year end. (7) Figures at 31/12/2000 do not include the 84 employees of the 21 branches bought from Banco di Sicilia, who became to all effects Carige employees on 1/1/2001. (8) Net income on average shareholders’ equity (Return On Average Equity). (9) Ratios communicated to the Bank of Ialy. They differ from those indicated in the Explanatory Notes (section 8 part B) as a result of a different method of calculation 182 BASIS OF CONSOLIDATION
Fondazione Cassa di Basilese Risparmio di CNCEP (1) Insurance WestLB (3) CDC (4) Others Genova e Group (2) Imperia
58.71% 5.70% 5.09% 4.96% 3.80% 21.74%
BANCA CARIGE SpA
SUBSIDIARIES ASSOCIATED COMPANIES
BANKING ACTIVITIES BANKING ACTIVITIES
Banca del Monte di Lucca SpA (51.00%) Frankfurterter Bankgelleschaft AG (7) (47.50%)
Cassa di Risparmio di Savona SpA (95.90%)
FINANCIAL ACTIVITIES FINANCIAL ACTIVITIES
Ligure Leasing SpA 100.00% Eptaconsors SpA (20.24%)
INSTRUMENTAL ACTIVITIES INSURANCE ACTIVITIES
Galeazzo Srl (5) (100.00%) Levante Norditalia Columbus Carige Immobiliare SpA (99.97%) Assicurazioni e Carige Vita Nuova Immobiliare Ettore Vernazza SpA (6) (90.00%) Riassicurazioni SpA SpA (92.81%) (87.01%)
100.00% Immobiliare Carisa Srl
TRUSTEE ACTIVITIES FINANCIAL ACTIVITIES
20.00% Centro Fiduciario SpA (66.28%) 4.00% Autostrada dei Fiori SpA (16.62%)
(1) Caisse Nationale des Caisses d'Epargne et de Prévoyance. (2) Basilese Insurance Group has a 5.09% holding in the Bank through its subsidiary La Basilese Compagnia di Assicurazioni sulla Vita. (3) Westdeutsche Landesbank Girozentrale. (4) Caisse des Dépôts et Consignations. (5) The Company has a 0.02% holding in Columbus Carige Immobiliare SpA. (6) The Company holds 10.00% of its own shares. (7) Bankenunion AG adopted a new name according to the Extraordinary Shareholders’ meeting resolution of 29/6/2000 taking effect on 28/7/2000.
183 CONSOLIDATED BOARD OF DIRECTORS’ REPORT
184 During the year, the Bank increased its shareholdings in two of its subsidiaries: in May 2000 it acquired a INTRODUCTION further 5% holding in Centro Fiduciario SpA from Cariverona Banca SpA, bringing Carige’s total holding to 66.28%; in December, the Bank purchased from Levante Norditalia SpA a further 40% in Carige Vita Nuova SpA, so bringing its To the Shareholders of Banca Carige Group, holding to 92.8%. Further details of these operations can be found in the Banca Carige report. This report has been prepared in accordance with With regards to principal events concerning other Legislative decree 87/92 and subsequent companies belonging to the Group, on 12th January modifications, in addition to Bank of Italy regulations 2000 Bank of Italy authorisation was received for the concerning the preparations of consolidated financial incorporation of Banca del Monte di Lucca into the statements dated 30/7/92 and subsequent Carige Group. modifications. The Ordinary and Extraordinary Shareholders’ The Bank, pursuant to article 872 of Consob ruling meeting of Banca del Monte di Lucca was held on no. 11971, availed itself of the possibility of 19th April during which the 1999 balance sheet of the exemption from publishing a quarterly statement for bank was approved along with the appointments of the fourth quarter 2000 whilst guaranteeing the Banca Carige’s deputy general manger, Alfredo release of the present statements no later than 90 Sanguinetto, to the board and Angelo Lucio Viotti to days after the end of the business year ending 31st the board of statutory auditors. December 2001. With reference to the inclusion of Cassa di Risparmio This report contains the financial statements of the di Savona SpA and its subsidiaries, Ligure Leasing Banca Carige Group (referred to in this report also SpA and Immobiliare Carisa SpA within the Carige as ‘the Carige Group’ or ‘the Group’) at Group, in March 2000 the Bank of Italy’s 31/12/2000, 30/9/2000 and 31/12/99. investigation into possible competition aspects of the Comparison, however, between figures relating to takeover (foreseen by Law 287/90) was completed accounting periods ending at 31/12/00 and with authorisation for the incorporation granted 30/9/00 is conditioned by changes in the subject to minor revisions in the Group’s branch composition of the Group. In the statements relative network in the province of Savona. On 17/4/00, to the accounting periods ending at 31/12/00 and formal authorisation for the inclusion of the Savona 30/9/00, Banca del Monte di Lucca SpA and the bank and its subsidiaries was received with effect on companies belonging to the Cassa di Risparmio di 21/1/2000. Savona Group have been fully consolidated. In the On 28th January, the Ordinary and Extraordinary statements at 31/12/99, these companies were Shareholders’ Meeting of Cassa di Risparmio di accounted for under the equity method as the Savona approved projected reforms of its by-laws. procedure for inclusion within the Banca Carige These regard, in particular, creating the position of Group had not been completed. managing director, and increasing the number of In order to aid comparison with the past, the present board members to 11. statements include pro-forma data for the periods A new agreement between Banca Carige and the ending 31/12/99 and 31/12/98. This was done in Cassa di Risparmio di Savona Foundation was order to identify major balance sheet and income signed in February 2000. The new agreement statement changes more effectively while, at the same foresees the increase in the number of directors from time, not affecting net equity and net income. In both 9 to 11, six nominated by Carige and 5 by the pro-forma statements, Banca del Monte di Lucca SpA Savona Foundation. and the companies of the Cassa di Risparmio di On 18th April the shareholders’ meeting of Cassa di Savona Group were fully consolidated eliminating Risparmio di Savona approved the 1999 balance significant infra-group amounts. sheet and elected its board of directors for the The parent company, Banca Carige SpA, was following three years. Franco Bartolini and Pier involved in two particularly important operations Giuseppe Cermelli were appointed, respectively, during December. In the first, the Bank completed the Chairman and Managing Director. securitisation of a part of its bad loans portfolio (Law In July, a new organisational structure for Cassa di 130/99) equivalent to an underlying value of Lit. Risparmio di Savona came into force. The new model 566.4 bn, inclusive of expected losses. In the second, focuses on more efficient and effective approaches to Banca Carige formalised the acquisition of 21 the market which are in line with the overall strategy branches from Banco di Sicilia, with effect from of the Group. 1/1/01.
185 As a result of the incorporation of Banca del Monte profit for the year was negatively affected by the di Lucca and Cassa di Risparmio di Savona into the elision of infra-group gains (Lit. 66 bn) stemming Group, the parent company established guidelines from the purchase on the part of Banca Carige of a for both banks in the area of credit risk management. further 40% holding in Carige Vita Nuova SpA from During the year, three-year strategy documents for Levante Norditalia SpA. Although the elision was in both banks were approved by Banca Carige in line with the indications supplied by the competent addition to measures to be adopted immediately for authorities, a different interpretation of the law, in the economic and organisational overhaul of Ligure particular concerning articles 2 and 34 of Legislative Leasing SpA. decree 87/92, would have resulted in the gains Amongst the property-sector companies of the being recorded. Group, the by-laws of Columbus Immobiliare SpA Positive effects on income came from the associated were modified to enable it to offer services to the company Eptaconsors, which brought in Lit. 42 bn, companies of the Carige Group. Its share capital was thanks principally to the excellent results achieved by raised in 2000 from Lit. 30 bn to Lit. 40 bn, fully Eptafund SpA. subscribed by Banca Carige. Columbus Immobiliare was also involved in the securitisation transaction deliberated by the Board of INTERMEDIATION ACTIVITIES Banca Carige on 11/9/00, purchasing a 5% share in the special purpose vehicle, Argo Finance One Srl. The associated company Bankenunion AG changed its trading name to Frankfurter Bankgesellschaft as of th 28 July. These consolidated financial statements for 2000 The Italian economy recorded a 2 .9% rise in make reference to pro forma reports for the years 2000, almost twice the previous year’s figure yet still 1999 and 1998; the banks Banca del Monte di slightly under the EU average (+3.4%). In particular, Lucca Spa and Cassa di Risparmio di Savona SpA there were rises in investments and family are fully consolidated. consumption (2.9%) and fixed gross investments Net assets for the Banca Carige Group rose 12% (6.1%). The weakness of the euro favoured exports over 1999 to Lit. 24,787.2 bn. The Group’s Total bringing in a favourable balance of trade for the first Financial Intermediation Activities amounted time in several years. to Lit. 39,551.7 bn (+6.4%). Employment rose 1.6% and the unemployment rate Total deposits recorded an annual rise of 14.6% dropped from 11.5% to 10.6%. Average inflation for to reach Lit. 20,030.4 bn (1999: Lit. 17,485.4 bn). the year was 2.6%, in line with the European average Direct deposits amounted to Lit. 15,744.2, an and up on 1999 as energy prices continued to rise. increase of 7% in comparison to 1999’s result. In The Group principal operating area, Liguria, particular, there were rises in repurchase agreements consolidated the recovery started in the last few and bonds, and falls in certificates of deposit. years. The port was particularly vibrant with handling Short-term deposits increased by 5.8% to Lit. increases in both goods and container traffic. The 10,574.1 bn. The most significant funding instrument tourist industry also recorded positive results. is current accounts, which grew 4.1% to Lit. 7,778 Highlights of the Group’s performance during bn. Medium/long-term deposits rose by 9.4% to the year was an increase in total assets to Lit. reach Lit. 5,170.1 bn. Within this aggregate, bonds 24,787.2 bn; a 12 % increase on the pro-forma rose 15.7% to Lit. 4,837 bn, offsetting the fall in result recorded for 1999. Investments rose by 11.4% certificates of deposit. and deposits by 14.6%. From the income statement, net profit for the Group was up 21.8% to Lit. 155.4 bn. Similar to 1999,
186 TOTAL FINANCIAL INTERMEDIATION ACTIVITIES (billions of Italian Lire) Pro forma 31/12/00 30/9/00 31/12/99 Change % 31/12/99 31/12/98 Change % 00/99 00/99 99/98 Total (a+b) 39,551.7 38,600.9 32,793.4 20.6 37,176.0 34,807.5 6.4 6.8
Direct deposits (a) 15,744.2 14,755.5 12,783.4 23.2 14,719.3 13,869.0 7.0 6.1 % Total 39.8% 38.2% 39.0% 2.1 39.6% 39.8% 0.5 -0.6 Indirect deposits (OFIA) (b)23,807.5 23,845.4 20,010.0 19.0 22,456.7 20,938.5 6.0 7.2 % Total 60.2% 61.8% 61.0% - 1.4 60.4% 60.2% - Assets under management 11,790.9 11,940.4 11,177.6 5.5 12,569.4 10,938.2 -6.2 14.9 % Total 29.8% 30.9% 34.1% - 12.5 33.8% 31.4% % OFIA 49.5% 50.1% 55.9% - 11.3 56.0% 52.2% - Assets in custody 12,016.6 11,905.0 8,832.4 36.1 9,887.3 10,000.3 21.5 -1.1 % Total 30.4% 30.8% 26.9% 12.8 26.6% 28.7%
There was considerable growth in assets in
FUNDING (billions of Italian Lire)
Consolidated Consolidated Pro forma 31/12/00 30/9/00 31/12/99 Change % 31/12/99 31/12/98 Change % 00/99 00/99 99/98 Total (a+b+c) 20,030.4 18,425.2 15,809.5 26.7 17,485.4 17,483.1 14.6 0.0
Direct deposits (a) 15,744.2 14,755.5 12,783.4 23.2 14,719.3 13,869.0 7.0 6.1 -Amounts owed to customers 9,702.3 8,759.0 7,729.2 25.5 9,171.6 8,734.1 5.8 5.0 current accounts 7,778.0 7,018.1 6,549.3 18.8 7,468.4 7,003.0 4.1 6.6 repurchase agreements 1,114.0 1,065.1 560.6 98.7 974.1 960.9 14.4 1.4 saving deposits 786.0 646.3 586.0 34.1 693.1 721.7 13.4 -4.0 loans 18.9 22.9 31.1 - 39.2 31.1 43.6 -39.2 -28.7 other borrowings 5.4 6.6 2.2 145.5 4.9 4.9 10.2 0.0 -Debts evidenced by certificates 6,041.9 5,996.5 5,054.2 19.5 5,547.7 5,134.9 8.9 8.0 bond certificates 4,837.0 4,858.3 3,847.0 25.7 4,181.2 3,257.0 15.7 28.4 certificates of deposits 1,022.7 1,053.8 1,095.8 - 6.7 1,240.8 1,717.7 -17.6 -27.8 outstanding cheques 157.6 79.5 96.0 64.2 110.3 142.5 42.9 -22.6 cash bonds 24.6 4.9 15.4 59.7 15.4 17.7 59.7 -13.0
-short term deposits 10,574.1 9,522.0 8,456.1 25.0 9,991.7 9,585.9 5.8 4.2 -long term deposits 5,170.1 5,233.5 4,327.3 19.5 4,727.6 4,283.1 9.4 10.4
Amounts owed to credit institutions (b) 4,285.8 3,669.2 3,025.7 41.6 2,765.7 3,607.8 55.0 -23.3 Deposits 3,249.5 2,890.1 1,951.7 66.5 1,951.0 3,043.7 66.6 -35.9 Financing 571.1 545.0 457.4 24.9 458.3 502.6 24.6 -8.8 Current accounts 93.1 61.9 42.5 119.1 63.3 61.5 47.1 2.9 Repurchase agreements 372.1 172.2 574.1 - 35.2 293.1 - 27.0 -
Funds managed on behalf of third parties (c) 0.4 0.5 0.4 - 0.4 6.3 0.0 - 93.7
Distribution by sector illustrates the continued and There was considerable growth in assets in growing importance of families with 68.4% of the custody products (+21.5%) which generated a 6% total (Lit. 6,632.3 bn), up from 67.3% (Lit. 6,170 bn) increase in indirect deposits. This aggregate ended in 1999. Non-financial and family businesses follow the year at Lit. 23,807.5 bn. Within this, savings with 17.2% of the aggregate at Lit. 1,512.2 bn under management amounted to Lit. 11,790.9 bn, (1999: 16.5%; Lit. 1,512.2 bn). down 6.2% over 1999. This fall was offset by the The item ‘Amounts owed to credit institutions increase in savings in custody mentioned, which recorded a 55% increase over 31/12/99 from Lit. ended the year at Lit. 12,016.6 bn. 2,765.7 bn to Lit. 4,285.8 bn.
187 Indirect deposits are concentrated principally total (Lit. 19,908.8 bn). amongst families, which account for 83.5% of the
DIRECT DEPOSITS (1) - DISTRIBUTION BY SECTOR
Consolidated Consolidated Pro forma 31/12/00 31/12/99 31/12/99 31/12/98 billions % billions % billions % billions % Amounts owed to customers 9,702.3 7,729.2 9,171.6 8,734.1 Public Administration 224.0 2.3% 173.3 2.2% 185.5 2.0% 199.1 2.3% Financial institutions 645.4 6.7% 562.8 7.2% 857.8 9.3% 517.3 5.9% Non-financial institutions and personal businesses 1,673.0 17.2% 1,411.7 18.3% 1,512.2 16.5% 1,357.5 15.6% Private social bodies 438.2 4.5% 308.7 4.0% 353.9 3.9% 359.3 4.1% Families 6,632.3 68.4% 5,183.2 67.1% 6,170.0 67.3% 6,204.6 71.0% Total residents 9,612.9 99.1% 7,639.7 98.8% 9,079.4 99.0% 8,637.8 98.9% Rest of the world 89.4 0.9% 89.5 1.2% 92.2 1.0% 96.3 1.1% Total 9,702.3 100.0% 7,729.2 100.0% 9,171.6 100.0% 8,734.1 100.0%
Debts evidenced by certificates 6,041.9 5,054.2 5,547.7 5,134.9
TOTAL DIRECT DEPOSITS 15,744.2 12,783.4 14,719.3 13,869.0 (1) Captions 20 and 30 of Liabilities and Stockholders' equity.
INDIRECT DEPOSITS (billions of Italian Lire) Consolidated Consolidated Pro forma 31/12/00 30/9/00 31/12/99 Change %31/12/99 31/12/98 Change % 00/99 00/99 99/98 Total (a+b) 23,807.5 23,845.4 20,010.0 19.0 22,456.7 20,938.5 6.0 7.3
Assets under management (a) 11,790.9 11,940.4 11,177.6 5.5 12,569.4 10,938.2 -6.2 14.9 - Mutual funds and unit trusts 5,980.6 6,031.1 6,012.8 - 0.5 6,782.6 5,551.3 -11.8 22.2 - Private banking 4,993.9 5,186.8 4,656.0 7.3 5,262.2 5,017.3 -5.1 4.9 - Bancassurance products 816.4 722.5 508.8 60.5 524.6 369.6 55.6 41.9
Assets in custody (b) 12,016.6 11,905.0 8,832.4 36.1 9,887.3 10,000.3 21.5 -1.1 - Government securities 7,118.3 7,015.0 5,506.6 29.3 6,216.8 7,254.3 14.5 -14.3 - Others 4,898.3 4,890.0 3,325.8 47.3 3,670.5 2,746.0 33.5 33.7
188 INDIRECT DEPOSITS - DISTRIBUTION BY SECTOR
Consolidated Consolidated Pro forma 31/12/00 31/12/99 31/12/99 31/12/98 billions % billions % billions % billions %
Public Administration 773.0 3.2% 398.6 2.0% 403.0 1.8% 369.4 1.8% Financial institutions 1,258.1 5.3% 1,708.9 8.5% 1,721.3 7.7% 1,346.4 6.4% Non-financial institutions and personal businesses 1,542.6 6.5% 1,049.0 5.2% 1,095.7 4.9% 1,020.0 4.9% Private social bodies 135.4 0.6% 96.6 0.5% 132.3 0.6% 131.4 0.6% Families 19,908.8 83.5% 16,562.4 82.7% 18,909.7 84.1% 18,036.1 86.1% Total residents 23,617.9 99.1% 19,815.5 98.9% 22,262.0 99.1% 20,903.3 99.8% Rest of the world 189.6 0.9% 194.5 1.0% 194.7 0.9% 35.2 0.2% Total 23,807.5 100.0% 20,010.0 99.9% 22,456.7 100.0% 20,938.5 100.0%
The Group’s lending rose 12.3% to Lit. 21,985.6 bn. interbank lending (+39%; Lit. 1,920.2 bn), whilst Lending to customers amounted to Lit. 14,275.9 bn, bonds remained stable (+1%; Lit. 5,789.5 bn). a rise of 14.6%. There were increases also in LENDING (billions of Italian Lire) Consolidated Consolidated Pro forma 31/12/00 30/9/00 31/12/99 Change % 31/12/99 31/12/98 Change % 00/99 00/99 99/98 Total (a+b+c) 21,985.6 20,654.9 17,632.1 24.7 19,572.0 19,554.0 12.3 0.1
Loans to customers (a) 14,275.9 13,416.8 11,339.8 25.9 12,456.9 11,143.4 14.6 11.8 -Gross value (1) 14,597.6 13,864.1 11,689.1 24.9 12,908.5 11,578.8 13.1 11.5 . Current accounts 6,003.8 5,183.1 4,608.1 30.3 5,021.8 4,445.1 19.6 13.0 . Discounted notes 569.8 520.8 476.3 19.6 497.6 531.7 14.5 -6.4 . Mortgages 6,465.3 6,195.1 5,022.1 28.7 5,500.3 4,729.8 17.5 16.3 . Parabanking (2) 940.6 885.6 656.9 43.2 787.5 674.0 19.4 16.8 - leasing 712.4 668.6 436.2 63.3 566.8 430.2 25.7 31.8 - factoring 217.2 207.1 210.5 3.2 210.5 234.4 3.2 -10.2 - consumer credit loans 11.0 9.9 10.2 7.8 10.2 9.4 7.8 8.5 . Loans backed by pledged assets 27.3 29.0 28.8 - 5.2 30.7 33.7 -11.1 -8.9 . Others 103.4 117.8 129.6 - 20.2 161.9 233.3 -36.1 -30.6
-short term loans 5,870.7 5,371.6 4,514.8 30.0 4,984.0 5,478.2 17.8 -9.0 -long term loans 8,239.5 7,559.8 6,407.0 28.6 7,015.8 5,169.4 17.4 35.7
. Bad loans 487.4 932.7 767.3 - 36.5 908.7 931.2 -46.4 -2.4
-Specific allowances for loan losses (-) 321.7 447.3 349.3 - 7.9 451.6 435.4 -28.8 3.7
Loans to banks (b) 1,920.2 1,160.9 1,263.2 52.0 1,381.5 1,790.7 39.0 -22.9 -Gross value 1,933.3 1,173.4 1,283.9 50.6 1,402.2 1,810.5 37.9 -22.6 . Compulsory reserves 145.8 106.6 80.3 81.6 87.0 41.3 67.6 110.7 . Deposits 1,240.8 775.9 845.6 46.7 924.8 1,575.4 34.2 -41.3 . Current accounts 353.8 99.9 116.4 204.0 123.8 65.8 185.8 88.1 . Repurchase agreements ------. Other loans 192.9 191.0 241.6 - 20.2 266.6 128.0 -27.6 108.3
-Specific allowances for loan losses (-) 13.1 12.5 20.7 - 36.7 20.7 19.8 -36.7 4.5
Securities (c) 5,789.5 6,077.2 5,029.1 15.1 5,733.6 6,619.9 1.0 -13.4 -Government securities 3,319.9 3,904.1 3,459.1 - 4.0 4,029.2 5,883.3 -17.6 -31.5 -Other securities 2,184.6 1,834.0 1,293.2 68.9 1,451.2 573.7 50.5 153.0 -Shares and equity securities 285.0 339.1 276.8 3.0 253.2 162.9 12.6 55.4
(1) Including bad loans. (2) Including leased fixed-assets.
189 Bad loans totalled Lit. 487.4 bn, inclusive of securitisation of a part of Banca Carige’s bad loans revaluations. This figure was considerably lower than portfolio. that recorded in the previous year as a result of the
LOANS TO CUSTOMERS (1) - DISTRIBUTION BY SECTOR Consolidated Consolidated Pro forma 31/12/00 31/12/99 31/12/99 31/12/98 billions % billions % billions % billions %
Public Administration 1,726.5 11.8% 1,192.1 10.2% 1,212.6 9.4% 1,051.4 9.1% Financial institutions 1,050.7 7.2% 692.5 6.0% 720.2 5.6% 648.2 5.6% Non-financial and personal businesses 8,716.8 59.7% 7,222.6 61.8% 8,073.3 62.4% 7,503.7 64.7% Agriculture, farming and fishing 141.5 1.0% 125.1 1.1% 142.4 1.1% 131.0 1.1% Energy products 299.0 2.0% 136.7 1.2% 144.0 1.1% 189.1 1.6% Mineral and ferrous metals and non ferrous 140.5 1.0% 134.2 1.1% 134.6 1.0% 66.9 0.6% Mineral and non metallic products 200.3 1.4% 185.4 1.6% 211.3 1.6% 218.1 1.9% Chemical products 114.8 0.8% 98.1 0.8% 107.3 0.8% 108.4 0.9% Metal products 240.3 1.6% 214.4 1.8% 256.9 2.0% 229.9 2.0% Agricultural and industrial machinery 258.4 1.8% 303.9 2.7% 316.8 2.5% 338.4 2.9% Office equipment 57.3 0.4% 84.9 0.7% 86.5 0.7% 56.7 0.5% Electrical supplies 158.7 1.1% 121.1 1.0% 126.2 1.0% 124.4 1.1% Means of transport 125.9 0.9% 116.4 1.0% 121.7 0.9% 72.6 0.6% Food, drink, tobacco 280.1 1.9% 256.9 2.3% 286.6 2.2% 246.8 2.1% Textiles, leather goods, clothing 105.7 0.7% 105.7 0.9% 107.7 0.8% 89.5 0.8% Paper, printing and publishing 132.5 0.9% 100.7 0.9% 112.3 0.9% 104.0 0.9% Rubber and plastic goods 116.5 0.8% 91.7 0.8% 99.8 0.8% 93.5 0.8% Other industrial products 161.6 1.1% 110.8 0.9% 129.6 1.0% 126.1 1.1% Building and public works 1,455.9 10.0% 1,252.6 10.7% 1,434.2 11.1% 1,413.7 12.2% Wholesale & retail trade, salvage and repairs 1,888.2 12.9% 1,568.0 13.4% 1,761.2 13.6% 1,669.8 14.4% Hotel and catering services 434.9 3.0% 354.4 3.0% 444.9 3.4% 428.8 3.7% Transport services 211.1 1.4% 151.1 1.3% 186.8 1.4% 198.8 1.7% Air and sea transport-related services 537.8 3.7% 366.8 3.1% 384.6 3.0% 320.3 2.8% Transport-related services 412.8 2.8% 341.2 2.9% 352.5 2.7% 317.1 2.7% Communications-related services 13.2 0.1% 8.7 0.1% 8.9 0.1% 7.3 0.1% Sales-related services 1,229.8 8.4% 993.8 8.5% 1,116.5 8.7% 952.5 8.2% Private social bodies 44.4 0.3% 27.1 0.2% 32.7 0.3% 30.9 0.3% Families 2,774.5 19.1% 2,261.7 19.3% 2,575.8 20.0% 2,192.8 19.0% Total residents 14,312.9 98.1% 11,396.0 97.5% 12,614.6 97.7% 11,427.0 98.7% Rest of the world 284.7 1.9% 293.1 2.5% 293.9 2.3% 151.8 1.3% Total 14,597.6 100.0% 11,689.1 100.0% 12,908.5 100.0% 11,578.8 100.0%
(1) Balance Sheet (Assets) caption 40 inclusive of expected losses and leasing. Banca del Monte di Lucca does not utilise derivative Non-financial and family businesses account for contracts. The Group continued to use derivatives 59.7% of lending (Lit. 8,716.8 bn), followed by prudently as shown by the fact that hedging and/or families (19.1% of total; Lit. 2,774.5 bn), and the balanced contracts account for more than 90% of the public sector (11.8%; Lit. 1,726.5 bn). total.
At the end of the year, the notional value of derivatives contracts amounted to Lit. 7,156.6 bn, the majority of which were contracts with no exchange of capital. These contracts refer exclusively to Banca Carige and Cassa di Risparmio di Savona;
190 DERIVATIVES CONTRACTS AT 31/12/2000 - CONSOLIDATED (billions of Italian Lire)
Principal (1) Hedging Trading Total balanced open-ended Total contracts (5) contracts (6)
- Forwards (2) - 38.7 19.4 58.1 58.1 - Swaps (3) 2,144.7 2,481.0 333.7 2,814.7 4,959.4 - Futures - 5.3 139.5 144.8 144.8 - Securities options (4) 85.1 2.9 - 2.9 88.0 - Interest rate options 563.3 403.2 23.2 426.4 989.7 - Exchange-rate options - 671.9 29.0 700.9 700.9 - Credit default product 119.0 - 96.8 96.8 215.8 Total 2,912.1 3,603.0 641.6 4,244.6 7,156.7 - with exchange of principal 222.1 674.8 185.9 860.7 1,082.8 - without exchange of principal 2,690.0 2,928.2 455.7 3,383.9 6,073.9
(1) Principal relative to basis swaps is stated once. (2) Includes forward rate agreements. (3) Includes basis swaps, interest rate swaps, overnight indexed swaps and cross currency swaps. (4) Includes interest rate caps. (5) Contracts matched by contracts of same characteristics so giving the Group full cover against interest and exchange-rate risk. (6) Contracts entailing exposure to interest and exchange-rate risk.
The Group’s totaltotal cash credits and guarantees and The improvement in this aggregate stems from the commitments at risk dropped 33.4% to Lit. 975 bn. securitisation of a part of the Group leader’s bad Cash credits at risk decreased 34.5% to Lit. 931.3 loans portfolio. bn; guarantees and commitments in the same Expected losses amounted to Lit. 346.5 bn, down on category rose by 18.7% to Lit. 32.1 bn. Lit. 482.4 bn recorded at 31/12/99.
191 CREDITS AT RISK AND TOTAL ALLOWANCES (millions of Italian Lire) Consolidated
31/12/00 31/12/99 Cash Guarantees and Leased Total Cash Guarantees and Leased Total credits commitments assets credits commitments assets
Bad loans 487,359 24,962 - 512,321 767,284 13,560 - 780,844 Watchlists 383,444 4,933 - 388,377 372,245 4,308 - 376,553 Country risk 44,564 2,175 - 46,739 56,443 3,235 - 59,678 Rescheduled loans 15,969 - - 15,969 22,491 - - 22,491 Bad leased assets - 11,601 11,601 - - 4,686 4,686 Total credits at risks 931,336 32,070 11,601 975,007 1,218,463 21,103 4,686 1,244,252
Specific allowances 334,779 9,339 2,357 346,475 369,983 5,927 934 376,844
Total allowances 342,720 9,339 2,357 354,416 374,983 5,927 934 381,844 - Specific allowances for loan losses 334,779 - - 334,779 369,983 - - 369,983 - Specific allowances for guarantees 9,339 - 9,339 and commitments - 5,927 - 5,927 - Specific allowances for leased assets - - 2,357 2,357 - - 934 934 - General allowances for loan losses 7,941 - - 7,941 5,000 - - 5,000
Consolidated Proforma 31/12/99 31/12/98 Cash Guarantees and Leased Total Cash Guarantees and Leased Total credits commitments assets credits commitments assets
Bad loans 908,697 18,869 - 927,566 931,129 20,120 - 951,249 Watchlists 434,731 4,923 - 439,654 513,933 11,229 - 525,162 Country risk 56,751 3,235 - 59,986 55,597 2,868 - 58,465 Rescheduled loans 22,491 - - 22,491 19,521 19,521 Bad leased assets - - 13,182 13,182 - 13,799 13,799 Total credits at risks 1,422,670 27,027 13,182 1,462,879 1,520,180 34,217 13,799 1,568,196
Specific allowances 472,268 8,071 2,094 482,433 455,193 9,065 1,460 465,718
Total allowances 477,268 8,071 2,094 487,433 461,193 9,065 1,460 471,718 - Specific allowances for loan losses 472,268 - - 472,268 455,193 - - 455,193 - Specific allowances for guarantees and commitments - 8,071 - 8,071 - 9,065 - 9,065 - Specific allowances for leased assets - - 2,094 2,094 - - 1,460 1,460 - General allowances for loan losses 5,000 - - 5,000 6,000 - - 6,000
Bad loansloans dropped 44.8% to Lit. 512.3 bn, of which Watchlists positions fell from Lit. 439.7 bn to Lit. Lit. 487.4 bn in the form of cash credits and Lit. 25 388.4 bn (-11.7%). bn in guarantees. As stated, improvements in the Credit risksrisks associated toto foreignforeign lendinglending (‘country quality of the aggregate were due to securitisation risk’) amounted to Lit. 46.7 bn (-22.1%); rescheduled described in detail elsewhere in this report. loans were down 29% to Lit. 16 bn. Leasing-related risksrisks remainedremained stablestable at Lit. 11.6 bn, The bad loans/cash credits ratio dropped from 7% in of which Lit. 2.4 bn in the form of expected losses. 1999 to 3.3%.
192 CASH CREDITS AT RISK (millions of Italian Lire) Consolidated 31/12/00 31/12/99 Gross Specific Net book % Gross Specific Net book % value allowances value value allowances value (a) (b) (b/a) (a) (b) (b/a)
Bad loans - customers 487,359 259,930 227,429 53.3 767,284 297,864 469,420 38.8 - banks ------Watchlists - customers 383,444 53,357 330,087 13.9 372,245 43,920 328,325 11.8 Country risk - customers 1,830 466 1,364 25.5 1,374 405 969 29.5 - banks 42,734 13,129 29,605 30.7 55,069 20,660 34,409 37.5 Rescheduled loans - customers 15,969 2,809 13,160 17.6 22,491 7,134 15,357 31.7 Total cash credits at risk 931,336 329,691 601,645 35.4 1,218,463 369,983 848,480 30.4 - customers 888,602 316,562 572,040 35.6 1,163,394 349,323 814,071 30.0 - banks 42,734 13,129 29,605 30.7 55,069 20,660 34,409 37.5 Performing loans 15,599,519 5,088 15,594,431 - 11,754,500 - 11,754,500 - - customers 13,708,934 5,088 13,703,846 - 10,525,730 - 10,525,730 - - banks 1,890,585 - 1,890,585 - 1,228,770 - 1,228,770 - Total loans 16,530,855 334,779 16,196,076 2.0 12,972,963 369,983 12,602,980 2.9 - customers 14,597,536 321,650 14,275,886 2.2 11,689,124 349,323 11,339,801 3.0 - banks 1,933,319 13,129 1,920,190 0.7 1,283,839 20,660 1,263,179 1.6
Pro-forma consolidated 31/12/99 31/12/98 Gross Specific Net book % Gross Specific Net book % value allowances value value allowances value (a) (b) (b/a) (a) (b) (b/a)
Bad loans - customers 908,697 376,342 532,355 41.4 931,127 363,734 567,393 39.1 - banks - - - - 2 2 - - 100.0 Watchlists - customers 434,731 57,646 377,085 13.3 513,933 60,021 453,912 11.7 Country risk - customers 1,682 405 1,277 24.1 1,547 324 1,223 20.9 - banks 55,069 20,660 34,409 37.5 54,050 19,810 34,240 36.7 Rescheduled loans - customers 22,491 7,134 15,357 31.7 19,521 4,094 15,427 21.0 Total cash credits at risk 1,422,670 462,187 960,483 32.5 1,520,180 447,985 1,072,195 29.5 - customers 1,367,601 441,527 926,074 32.3 1,466,128 428,173 1,037,955 29.2 - banks 55,069 20,660 34,409 37.5 54,052 19,812 34,240 36.7 Performing loans 12,888,005 10,081 12,877,924 0.1 11,869,017 7,208 11,861,809 0.1 - customers 11,540,931 10,081 11,530,850 0.1 10,112,654 7,208 10,105,446 0.1 - banks 1,347,074 - 1,347,074 - 1,756,363 - 1,756,363 - Total loans 14,310,675 472,268 13,838,407 3.3 13,389,197 455,193 12,934,004 3.4 - customers 12,908,532 451,608 12,456,924 3.5 11,578,782 435,381 11,143,401 3.8 - banks 1,402,143 20,660 1,381,483 1.5 1,810,415 19,812 1,790,603 1.1
The distribution of risk by sector shows logically the highest concentration amongst the sector which The activity with the highest bad loans/lending ratio is absorbs most of the Group’s lending: non-financial non-financial and family businesses (4.2%). Within and family businesses, with 75.7% of the risk this, industrial and agricultural machinery (13.5%) portfolio (Lit. 369 bn), followed by families (Lit. 95.2 and building and public works (6.6%) present bn; 19.5%). Within non-financial and family particularly high ratios. businesses, the areas most at risk remain building and public works (Lit. 95.6 bn; 19.6% of the total), and wholesale & retail trade, salvage & repairs (Lit. 89.6 bn; 18.4%).
193 CREDIT COMMITMENTS ( millions of Italian Lire )
31/12/00 31/12/99 Nominal Specific % Nominal Specific % value allowances value allowances (a) (b) (b/a) (a) (b) (b/a)
Bad loans 24,962 8,687 34.8 13,560 4,957 36.6 Watchlists 4,933 0 - 4,308 - - Country risk 2,175 652 30.0 3,235 970 30.0 Total guarantees and commitments at risk 32,070 9,339 29.1 21,103 5,927 28.1 Performing guarantees and commitments 2,251,714 - - 1,814,644 - - Total guarantees and commitments 2,283,784 9,339 0.4 1,835,747 5,927 0.3
Pro-forma consolidated 31/12/99 31/12/98 Nominal Specific % Nominal Specific % value allowances value allowances (a) (b) (b/a) (a) (b) (b/a)
Bad loans 18,869 7,101 37.6 20,120 8,205 40.8 Watchlists 4,923 - - 11,229 - - Country risk 3,235 970 30.0 2,868 860 30.0 Total guarantees and commitments at risk 27,027 8,071 29.9 34,217 9,065 26.5 Performing guarantees and commitments 1,939,732 - - 1,998,427 - - Total guarantees and commitments 1,966,759 8,071 0.4 2,032,644 9,065 0.4
194 BAD LOANS (1) - DISTRIBUTION BY SECTOR Consolidated Consolidated Pro forma 31/12/00 31/12/99 31/12/99 31/12/98 millions % millions % millions % millions %
Public Administration ------Financial institutions 12,105 2.5% 7,236 0.9% 12,826 1.4% 13,573 1.5% Non-financial and personal businesses 369,026 75.7% 588,715 76.7% 693,061 76.3% 719,021 77.2% Agriculture, farming and fishing 7,754 1.6% 17,882 2.3% 20,197 2.2% 18,338 2.0% Energy products 325 0.1% 2,926 0.4% 2,930 0.3% 621 0.1% Mineral and ferrous metals and non ferrous 602 0.1% 3,446 0.4% 3,526 0.4% 3,978 0.4% Mineral and non metallic products 5,239 1.1% 16,233 2.1% 17,420 1.9% 22,759 2.4% Chemical products 1,235 0.3% 2,754 0.4% 3,757 0.4% 4,043 0.4% Metal products 17,647 3.6% 14,314 1.9% 17,338 1.9% 22,558 2.4% Agricultural and industrial machinery 34,788 7.1% 35,895 4.7% 39,867 4.4% 58,343 6.4% Office equipment 613 0.1% 1,860 0.2% 2,026 0.2% 1,965 0.2% Electrical supplies 6,801 1.4% 15,481 2.0% 16,162 1.8% 14,644 1.6% Means of transport 3,066 0.6% 14,029 1.8% 14,723 1.6% 15,933 1.7% Food, drink, tobacco 13,255 2.7% 17,496 2.3% 19,044 2.1% 18,816 2.0% Textiles, leather goods, clothing 13,354 2.7% 11,019 1.4% 11,650 1.3% 11,259 1.2% Paper, printing and publishing 2,914 0.6% 4,586 0.6% 5,595 0.6% 7,792 0.8% Rubber and plastic goods 4,853 1.0% 4,845 0.6% 5,436 0.6% 5,613 0.6% Other industrial products 4,997 1.0% 9,875 1.3% 11,679 1.3% 13,239 1.4% Building and public works 95,639 19.6% 152,408 19.9% 182,870 20.2% 164,925 17.7% Wholesale & retail trade, salvage and repairs 89,648 18.4% 155,258 20.3% 185,555 20.4% 186,529 20.0% Hotel and catering services 15,904 3.3% 32,939 4.3% 37,683 4.1% 33,921 3.6% Transport services 11,364 2.3% 10,162 1.3% 17,622 1.9% 18,634 2.0% Air and sea transport-related services 124 … 306 … 306 … 503 0.1% Transport-related services 2,036 0.4% 2,150 0.3% 3,567 0.4% 4,383 0.5% Communications-related services 391 0.1% 3,199 0.4% 3,199 0.4% 3,092 0.3% Sales-related services 36,477 7.6% 59,652 7.8% 70,909 7.8% 87,133 9.4% Private social bodies 531 0.1% 173 … 182 … 185 … Families 95,180 19.5% 162,921 21.3% 194,040 21.4% 191,343 20.5% Total residents 476,842 97.8% 759,045 98.9% 900,109 99.1% 924,122 99.2% Rest of the world 10,517 2.2% 8,239 1.1% 8,588 0.9% 7,007 0.8% Total 487,359 100.0% 767,284 100.0% 908,697 100.0% 931,129 100.0%
(1) Inclusive of expected losses.
BAD LOANS/LENDING RATIO(1) - DISTRIBUTION BY SECTOR
Consolidated Consolidated Pro forma 31/12/00 31/12/99 31/12/99 31/12/98
Public Administration - - - - Financial institutions 1.2% 1.0% 1.8% 2.1% Non-financial and personal businesses 4.2% 8.2% 8.6% 9.6% - including (2): Wholesale & retail trade, salvage and repairs 4.7% 9.9% 10.5% 11.2% Building and public works 6.6% 12.2% 12.8% 11.7% Sales-related services 3.0% 6.0% 6.4% 9.1% Air and sea transport-related services … 0.1% 0.1% 0.2% Hotel and catering services 3.7% 9.3% 8.5% 7.9% Private social bodies 1.2% 0.6% 0.6% 0.6% Families 3.4% 7.2% 7.5% 8.7% Total residents 3.3% 6.7% 7.1% 8.1% Rest of the world 3.7% 2.8% 2.9% 4.6% Total 3.3% 6.6% 7.0% 8.0%
(1) Inclusive of expected losses. (2) Principal branches of the economy interms of overall credit exposure.
195 PERSONNEL AND OPERATING Group’s traditional operating area of Liguria with 247 outlets. This is followed by 21 branches in Sicily, 20 in STRUCTURE Piedmont, 16 in Emilia Romagna, 15 in Lombardy and Tuscany, 5 in Sardinia and 2 in Veneto.
The Group’s banking branch network numbered 342 The distribution network of the Group is complemented outlets distributed in eight Italian regions in addition to by 558 insurance offices present throughout the country one branch in Nice in the south of France and and 395 ATM/self-service tills. The Group leader representative offices abroad. continued its commitment to the model of net bank by During the year, the network rose by 31 branches: 21 extending its e-banking services both for current stemming from Banca Carige’s purchase in Sicily as accounts and on line trading. At the end of 2000, well as 12 new branch openings and two closures. In there were 11,679 e-banking customer contracts. particular 72.2% of branches, is concentrated in the
Total staff levels for the Group amounted to 3,701, BRANCH NETWORK Consolidated Consolidated pro forma 31/12/00 30/9/00 31/12/99 31/12/99 31/12/98 A) BRANCHES NORTH-WEST ITALY 282 280 232 278 273 Liguria 247 246 201 246 247 - Genoa 134 133 132 132 133 - Imperia 28 28 28 29 29 - La Spezia 19 19 19 19 19 - Savona 66 66 22 66 66 Piedmont 20 20 18 19 18 Lombardy 15 14 13 13 8 NORTH-EAST ITALY 18 18 17 17 14 Veneto 2 2 2 2 1 Emilia Romagna 16 16 15 15 13 CENTRAL ITALY 15 14 13 13 13 Tuscany 15 14 13 13 13 SOUTH ITALY AND ISLANDS 26 3 2 2 - Sicily 21 - - -- - Sardinia 5 3 2 2 - BRANCHES ABROAD: Nice (France) 1 1 1 1 1 TOTAL 342 316 265 311 301
B) OTHER CHANNELS Insurance offices 558 568 646 646 750 ATM - Bancomat 380 374 293 352 334 "Bancacontinua" (self service) 15 15 13 15 15 POS 8,000 7,850 5,827 7,087 5,760 Home banking (n. of contracts) 6,354 5,503 5,317 5,461 3,178 Phone banking (clients) 14,474 12,520 10,758 13,285 10,817 E-banking (n. of contracts) 11,679 - - -- - rising to 4,106 when including the insurance subsidiaries. The percentage of banking personnel engaged in market activities continues to grow (66.3%), the remaining 33.7% is involved in administrative duties.
196 PERSONNEL Consolidated Consolidated Pro forma 31/12/00 (1) 30/9/00 31/12/99 31/12/99 31/12/98 N. % N. % N. % N. % N. %
Grade Managers 27 0.7 26 0.7 29 0.9 32 0.9 32 0.9 Officials 300 8.1 302 8.1 274 7.6 299 8.0 316 8.7 Other employees 3,374 91.2 3,379 91.2 2,954 91.5 3,388 91.1 3,293 90.4 TOTAL 3,701 100.0 3,707 100.0 3,230 100.0 3,719 100.0 3,641 100.0 Activities Head-offices 1,248 33.7 1,262 34.0 1,063 32.9 1,256 33.8 1,322 36.3 Branches 2,453 66.3 2,445 66.0 2,167 67.1 2,463 66.2 2,319 63.7
(1) Exclusive of 84 members of staff of the 21 branches acquired by Banca Carige in Sicily employed by the Bank with effect 1/1/01. In October 2000 the sales of certain standardised insurance agents who are also qualified financial Carige banking products at the offices of our insurance advisers operating mainly outside Liguria. In 2001 the subsidiaries got under way. Distribution will be carried Group expects to expand both channels of distribution. out by insurance agents. This lends support to the 29
197 The Group’s operating costs remained stable INCOME STATEMENT during the year recording a limited 1.1% increase over the previous twelve-month period. The total at 31st December 2000 was Lit. 821.2 bn (31/12/99: Lit. 812.6 bn). Administrative costs were down slightly (- The Banca Carige Group closed the year with net 0.8%) to Lit. 632 bn as a result of reduced personnel income of Lit. 155.4 bn, an increase of 21.8% over the charges (-1.9%; Lit. 398.1 bn at 31/12/00) and rises previous year. in administrative costs to Lit. 233.9 bn (+1%). Net interest income rose 14.4% to Lit. 656.3 bn. Writedowns to financial fixed assets almost exclusively Interest income totalled Lit. 1,189.2 bn (+19.6%) and relating to lease assets totalled Lit. 189.2 bn, an interest expenses rose 26.8% to Lit. 533 bn. increase of 7.9% in comparison to Lit. 175.4 bn Non interest income remained substantially recorded at year end 1999. unchanged in comparison to 1999, recording a slight Operating income ended the period 22.4% higher increase of 0.1% to reach Lit. 571.9 bn. than in 1999 at Lit. 406.9 bn (1999: Lit. 332.5 bn). This result stems from growth in commission income Provisions and writedowns relating to loan losses and other operating income, in addition to a reduction amounted to Lit. 105.5 bn, 22.2% higher than 1999. in losses on investments carried at equity (caption Provisions for risks and charges totalled Lit. 6.1 bn in 170). In greater detail, commission income amounted comparison to Lit. 7.4 bn at 31/12/99 (-18.2%). to Lit. 329.5 bn, up 7.4% over 1999’s Lit. 306.8 bn. Credit risk measured in terms of the difference between Commission expenses (Lit. 22.1 bn) increased by writedowns and recoveries rose 33.5% from Lit. 65.2 24.8% (1999: Lit. 17.7 bn). Gains from financial bn in 1999 to Lit. 87.1 bn. Provisions for loan losses transactions were down from Lit. 81.6 bn in 1999 to Lit. were down 14.3% from Lit. 12.4 bn to Lit. 10.6 bn). 22.2 bn. Other operating income for the period rose Net writedowns to financial fixed assets totalled Lit. 1.7 8.1%, moving up from Lit. 226.8 bn to Lit. 245.2 bn. bn (-37.9%) after writedowns of Lit. 1.8 bn (1999: Lit. Other operating expenses were slightly lower (-0.9%) to 3.2 bn) and recoveries of Lit. 54 million (1999: Lit. 2 reach Lit. 20.5 bn. bn). Dividends fell 64.8% to Lit. 18.8 bn (1999: Lit. 53.2 Income from ordinary activities ended the year bn). The negative value recorded at caption 170 at Lit. 301.5 bn, an increase of 22.4% in comparison ‘Profits (losses) on investments carried at equity’ (-Lit. to 1999. 1.2 bn) is due to the writing off of the infra-group profit The Group’s extraordinary income dropped realised by Levante Norditalia SpA on the sale of a 75.8% from Lit. 63.1 bn to Lit. 15.2 bn. The figure for 40% holding in Carige Vita Nuova SpA to Banca 1999 included the benefits of the application of new Carige. A positive contribution to this caption was in accounting principles for the handling of deffered tax. the form of Carige’s return of Lit. 43 bn on in its After tax (-4.4%), the Group’s net income rose investment in Eptaconsors SpA. 21.8% to Lit. 155.4 bn (1999: Lit. 127.6 bn). Gross operating income increased by 7.3% to Lit. 1,228.2 bn at 31/12/00.
198 CONSOLIDATED INCOME STATEMENT (millions of Italian Lire)
Consolidated Consolidated Pro forma 31/12/00 31/12/99 Change % 31/12/99 31/12/98 Change % Change % 00/99 00/99 99/98
10 Interest income and similar revenues 1,189,242 887,740 34.0 994,124 1,310,012 19.6 -24.1 20 Interest expense and similar charges -532,970 -383,472 39.0 -420,239 -664,576 26.8 -36.8 NET INTEREST INCOME 656,272 504,268 30.1 573,885 645,436 14.4 -11.1 40 Commission income 329,471 273,736 20.4 306,817 262,187 7.4 17.0 50 Commission expenses -22,110 -16,176 36.7 -17,713 -19,931 24.8 -11.1 60 Gains (losses) from financial transactions 22,233 80,797 -72.5 81,565 98,909 -72.7 -17.5 30 Dividends and other revenues 18,750 49,461 -62.1 53,245 8,246 -64.8 … 170 Profits (losses) on investments carried at equity -1,244 -53,984 -97.7 -58,908 4,845 -97.9 … 70 Other operating income 245,249 150,237 63.2 226,840 213,256 8.1 6.4 110 Other operating expenses -20,454 -11,521 77.5 -20,632 -17,436 -0.9 18.3 NON INTEREST INCOME 571,895 472,550 21.0 571,214 550,076 0.1 3.8 GROSS OPERATING INCOME 1,228,167 976,818 25.7 1,145,099 1,195,512 7.3 -4.2 80 Administrative costs -632,032 -549,655 15.0 -637,243 -634,836 -0.8 0.4 – Personnel -398,143 -355,581 12.0 -405,754 -408,794 -1.9 -0.7 – Other administrative costs -233,889 -194,074 20.5 -231,489 -226,042 1.0 2.4 90 Depreciation and amortization of intangible and tangible fixed assets -189,209 -127,439 48.5 -175,358 -156,321 7.9 12.2 OPERATING COSTS -821,241 -677,094 21.3 -812,601 -791,157 1.1 2.7 OPERATING INCOME 406,926 299,724 35.8 332,498 404,355 22.4 -17.8 100 Provisions for risks and charges -6,086 -2,751 121.2 -7,436 -1,880 -18.2 295.5 120 Provisions for loan losses and for guarantees and commitments -109,142 -75,404 44.7 -96,031 -110,354 13.7 -13.0 130 Recoveries of loans and reversals of provisions for guarantees and commitments 22,081 24,994 -11.7 30,816 37,590 -28.3 -18.0 140 Additional provisions for loan losses - 10,613 - 7,816 35.8 -12,385 -18,730 -14.3 150 Write-downs to financial fixed assets -1,756 -2,842 -38.2 -3,211 -1,907 -45.3 160 Recoveries of financial fixed assets 54 1,977 -97.3 1,977 37 -97.3 PROVISIONS AND WRITE-DOWNS -105,462 -61,842 70.5 -86,270 -95,244 22.2 -9.4 180 INCOME FROM ORDINARY ACTIVITIES 301,464 237,882 26.7 246,228 309,111 22.4 -20.3 190 Extraordinary income 24,076 61,893 -61.1 79,191 24,318 -69.6 225.6 200 Extraordinary expenses -8,838 -15,401 -42.6 -16,095 -8,432 -45.1 90.9 210 EXTRAORDINARY INCOME, NET 15,238 46,492 -67.2 63,096 15,886 -75.8 297.2 INCOME BEFORE TAXATION 316,702 284,374 11.4 309,324 324,997 2.4 -4.8 230 Changes in reserves for general banking risks - - - - 8,200 -6,750 -100.0 21.5 240 Income taxes -159,877 -156,645 2.1 -167,311 -157,892 -4.4 250 Minority interests -1,419 -126 … -6,210 -6,489 -77.1 -4.3 260 NET INCOME 155,406 127,603 21.8 127,603 153,866 21.8 -17.1
:
CHANGES IN NE
199 CONSOLIDATED INCOME STATEMENT(millions of Italian Lire)
2000 31/12/99 4th quarter 3rd quarter 2nd quarter 1st quarter pro forma
10 Interest income and similar revenues 348,179 307,369 268,443 265,251 887,740 994,124 20 Interest expense and similar charges -157,320 -142,911 -125,668 -107,071 -383,472 -420,239 NET INTEREST INCOME 190,859 164,458 142,775 158,180 504,268 573,885 40 Commission income 86,147 80,601 76,606 86,117 273,736 306,817 50 Commission expenses -6,857 -5,729 -4,431 -5,093 -16,176 -17,713 60 Gains (losses) from financial -20,490 1,896 509 40,318 80,797 81,565 30 Dividendstransactions and other -902 3,042 15,893 717 49,461 53,245 170 Profitsrevenues (losses) on investmentscarried at equity -17,939 1,802 14,303 590 -53,984 -58,908 70 Other operating income 71,531 59,226 57,603 56,889 150,237 226,840 110 Other operating -8,501 -6,434 -3,188 -2,331 -11,521 -20,632 NONexpenses INTEREST INCOME 102,989 134,404 157,295 177,207 472,550 571,214 GROSS OPERATING INCOME 293,848 298,862 300,070 335,387 976,818 1,145,099 80 Administrative costs -170,115 -154,882 -148,734 -158,301 -549,655 -637,243 – Personnel -100,128 -98,920 -100,086 -99,009 -355,581 -405,754 – Other administrative costs -69,987 -55,962 -48,648 -59,292 -194,074 -231,489 90 Depreciation and amortization of intangible and tangible fixed assets -45,689 -46,980 -48,516 -48,024 -127,439 -175,358 OPERATING COSTS -215,804 -201,862 -197,250 -206,325 -677,094 -812,601 OPERATING INCOME 78,044 97,000 102,820 129,062 299,724 332,498 100 Provisions for risks and charges -3,952 -632 -384 -1,118 -2,751 -7,436 120 Provisions for loan losses and for guarantees and commitments -45,614 -16,424 -22,942 -24,162 -75,404 -96,031 130 Recoveries of loans and reversals of provisionsfor guarantees and 5,074 7,053 4,031 5,923 24,994 30,816 140 Additionalcommitments provisions for loan -10,613 - - - -7,816 -12,385 150 lossesWrite-downs to financial fixed -1,719 - -37 - -2,842 -3,211 160 Recoveriesassets of financial fixed 46 3 5 - 1,977 1,977 PROVISIONSassets AND WRITE-DOWNS -56,778 -10,000 -19,327 -19,357 -61,842 -86,270 180 INCOME FROM ORDINARY ACTIVITIES 21,266 87,000 83,493 109,705 237,882 246,228 190 Extraordinary income 12,006 3,168 5,071 3,831 61,893 79,191 200 Extraordinary expenses -1,248 -2,429 -2,122 -3,039 -15,401 -16,095 210 EXTRAORDINARY INCOME, 10,758 739 2,949 792 46,492 63,096 INCOMENET BEFORE TAXATION 32,024 87,739 86,442 110,497 284,374 309,324 230 Changes in reserves for general banking ------8,200 240 Incomerisks taxes -26,437 -42,718 -38,673 -52,049 -156,645 -167,311 250 Minority interests -170 -520 -403 -326 -126 -6,210 260 NET INCOME 5,417 44,501 47,366 58,122 127,603 127,603
200 CHANGES IN NET EQUITY
Consolidated net equity, provisions for risks and charges, and net income derive from those of the parent company, Banca Carige in the following way:
Net equityProfit for the year Banca Carige Balance Sheet at 31/12/2000 2,719,332 190,221 Surpluses to balance sheet value 35,641 18,408 Adjustments to allocated gains -1,624 -1,624 Adjustments on positive differences: consolidation, net equity -13,332 -13,332 Effects stemming from items recorded in previous business years -97,289 - Profit (loss) from undertakings valued by the equity method -1,630 -1,244 Writedowns of adjustments and provisions for tax 230 230 Writedowns of dividends paid by subsidiaries -33,680 -36,674 Others -812 -579 Consolidated Balance Sheet at 31/12/2000 2,606,836 155,406
Changes in consolidated net equity from 31/12/99 to 31/12/2000 are a result of the following variations:
Balance at 31/12/99 2,641,163 Additional paid in capital used for securitisation transaction -57,821 Dividends paid for the year -135,262 Changes in reserves for loan losses not pertaining to third parties 2,941 Changes in reserves from undertakings valued by equity method -386 Changes in negative difference: net equity, consolidation 1,168 Others -373 Consolidated net income 155,406 Balance at 31/12/2000 2,606,836
201 income: +3.1%; Lit. 124,591 million. Reduced provisions and writedowns (-43.6%; Lit. 11,558 million) in addition to a 1.7% decrease in operating SUBSIDIARES AND OTHER costs (Lit. 84,905 million at 31/12/00) were responsible EQUITY INVESTMENTS for a pre-tax profit of Lit. 30,851 million (+7.5%) and net income at 31/12/00 of Lit. 16,601 million (+49.5%)
Banca del Monte di Lucca Cassa di Risparmio di Savona The Lucca bank recorded a 6% drop in total financial The bank was fully consolidated into the Banca Carige intermediation activities (Lit. 951.8 bn). In particular, Group during the year (Banca Carige’s holding: customer deposits fell 10.5 % in the period to Lit. 416.2 95.9%). Total financial intermediation activities bn, and indirect deposits dropped by 2.2% to Lit. 535.5 amounted to Lit.4,572.8 bn, an increase of 3.6% over bn. Lending to customers rose 12.5% in the year to Lit. 31/12/99. In particular, direct deposits rose 0.4% to 412.1 bn. Operating income totalled Lit. 5,384 million, Lit. 1,976 bn and indirect deposits increased 6.1% to an increase of 34.7% over 1999. Provisions and Lit. 2,596.7 bn. Customer loans increased by 6.1% in writedowns amounted to Lit. 1,622 million, 53.2% lower the period to Lit. 1,172 bn. Net interest income than in the previous year. Extraordinary income fell from recorded an upturn of 8.2% to reach Lit. 78,643 Lit. 2,718 million in 1999 to Lit. 22 million as a result of million. Commission income also rose (+3.2% to Lit. the absence for 2000 of the benefits of deferred tax 34,147 million), as did gains (losses) on financial recorded in 1999. transactions (+19.6%; Lit. 12,059 million). Operating income increased at a lower rate than net interest CONTROLLED BANKING COMPANIES (billions of Italian Lire)
Change % 31/12/00 30/9/00 31/12/99 31/12/98 2000 1999
Cassa di Risparmio di Savona SpA Total assets 2,554.2 2,537.0 2,498.8 2,266.5 2.2 10.3 Direct deposits (a) 1,976.0 2,004.5 1,969.1 1,695.3 0.4 16.2 Indirect deposits (b) 2,596.7 2,583.7 2,446.7 2,345.5 6.1 4.3 Total Financial Intermediation Activities (TFIA) (a+b) 4,572.7 4,588.2 4,415.8 4,040.8 3.6 9.3 Loans to customers (1) 1,267.9 1,221.7 1,188.3 1,137.1 6.7 4.5 Shareholders' equity (2) 318.5 316.6 310.0 303.0 2.7 2.3 Net income 16.6 14.2 11.1 8.1 49.5 37.1 Banca del Monte di Lucca SpA Total assets 561.0 603.7 598.8 534.5 -6.3 12.0 Direct deposits (a) 416.2 458.7 465.3 423.6 -10.6 9.8 Indirect deposits (b) 535.5 546.2 547.3 426.7 -2.2 28.3 Total Financial Intermediation Activities (TFIA) (a+b) 951.7 1,004.9 1,012.6 850.3 -6.0 19.1 Loans to customers (1) 412.1 399.0 366.3 329.5 12.5 11.2 Shareholders' equity (2) 45.4 45.4 44.9 44.5 1.1 0.9 Net income 1.4 1.3 1.2 1.4 16.7 -14.3 (1) Gross of allowance for credit risks. (2) Including reserves for general banking risks and excluding profits and losses carried forward.
Ligure leasing, fully owned by Cassa di Risparmio funding of core business activities. Capital gains from di Savona, recorded a lower net income result than in these sales will take advantage of the opportunities 1999, here too affected by deferred tax. Net leased offered by Presidential decree 917/86 (article 54) which assets amounted to Lit. 129.5 bn, an increase over allows the liability to tax to be distributed over the new 1999’s Lit. 125 bn. four years. These benefits have no effect on the company’s income statement which includes both the Galeazzo increased its net income from Lit. 241 capital gains and provisions for deferred taxation. million at 31/12/99 to Lit. 412 million. The result was due to the release of low performing property in income Columbus Carige Immobiliare SpA closed the terms, a policy which the company intends to continue year with losses totalling Lit. 509 million in comparison in the future and which is line with overall Group to a profit of Lit. 8 million for the corresponding period strategy aimed at maximising income sources for the in 1999. This result stems from increased interest
202 expenses on loans from the Group leader (Lit. 575 In October the sale of Banca Carige banking products million) and a rise in costs. Leasing-generated began in the offices of the Group’s insurance revenues rose 12% to Lit. 306 million. During 2000, subsidiaries. the company raised its share capital from Lit. 30 bn to Lit. 40 bn, the increase being fully subscribed by Banca There was considerable operational growth recorded by Carige. the Group’s insurance companies.. In particular, premium income rose 7.9% to Lit. 1,507.8 bn. Total Immobiliare Ettore Vernazza SpA achieved damages paid out amounted to Lit. 1,024 bn, a rise of satisfactory results in 2000: net profit rose 38% in 11.5%. Staff levels dropped by 8 units to 405 and re- comparison with December 1999 to Lit. 1,768 million. organisation of the insurance offices network continued Operating income totalled Lit. 3,208 million and with the closure of some offices bringing the total at provisions for deferred taxation amounted to Lit. 1,440 December to 558. million. The company distributed during 2000 dividends relating to the previous year of Lit.1,211 Levante Norditalia Assicurazioni e million. Riassicurazioni SpA, a non-life insurer, felt the negative effects of the statutory freeze in insurance Immobiliare Carisa, fully owned by Cassa di prices in force from 28th March 2000. The freeze Risparmio di Savona, recorded a loss of Lit. 101.8 heightened the already difficult situation nationally for million for the greater part due to interest expenses car accident insurers. The subsidiary attempted to limit (more than Lit. 330 million) related to a mortgage as much as possible the effects by re-organising its car signed with Cassa di Risparmio di Savona for the insurance portfolio. Subsequently, premium income purchase of commercially-destined property at the end dropped slightly (-1%; -Lit.11 bn) as a result of the of 1999. losses recorded in car accident insurance (-Lit. 41 bn) and an increase in other branches of accident Centro Fiduciario SpA ended the year with growth insurance of Lit. 30 bn. Damages paid out rose by 6% in terms of income and market share. Net income rose to Lit. 900.6 bn. The number of accidents reported, 20% in comparison to June 1999 to reach Lit. 144.7 however, fell by 8.8% to 280,630 in number. This bn. Net income totalled Lit. 306 million (1999:+54.2 represented a sharp drop especially in the branch of %). Operating income rose 39.1% to Lit. 446 million. car accident insurance (-14%) due to a rigorous Another encouraging aspect for the company was the pricing policy allied to careful evaluation of client increase in both the number of trust agreements profiles in certain areas of the country. stipulated and the underlying volume (Lit. 340 million Operating costs rose 3.2% to Lit. 226.3 bn as a result at 31/12/00). of increases in commissions and purchases. During the period the company carried out several Rationalisation of the Carige Group’s insurance organisational changes which included: technical companies continued during the year in the form of upgrading at head office level; the setting up of a new Banca Carige’s purchase of a further 40% in Carige unit for the management of tenders, major agreements, Vita Nuova SpA from Levante Norditalia Spa. The and brokers; the re-organisation of the human Group leader now has a 92.8% holding in the resources office. Other areas included the company’s subsidiary. The remaining share is held by the Basilese IT systems in the light also of the replacement of the lira insurance group and other minority shareholders. The by the euro. acquisition generated an infra-group gain of Lit. 66 bn The company was unaffected by fines decided by the which, in line with current norms, was cancelled from Italian antitrust authority (communication dated the consolidated statements. 31/7/00) against some insurance companies for competition-related abuses foreseen by article 2, Law 287/90.
203 CARIGE INSURANCE GROUP
Change % 31/12/00 30/9/00 31/12/99 31/12/98 2000 1999
Levante Norditalia SpA Total premiums (millions of Italian Lire) 1,089,695 824,130 1,101,031 1,017,316 -1.0 8.2 Damages paid out (millions of Italian Lire) (1) 900,623 621,326 848,517 691,195 6.1 22.8 Personnel 359 366 374 381 -4.0 -1.8 Outlets 558 568 646 750 -13.6 -13.9
Carige Vita Nuova SpA Total premiums (millions of Italian Lire) 418,069 260,094 295,900 227,620 41.3 30.0 Damages paid out (millions of Italian Lire) (1) 123,382 72,195 70,101 70,757 76.0 -0.9 Personnel 46 44 39 37 17.9 5.4 Outlets 418 427 482 609 -13.3 -20.9
Total Carige Group Total premiums (millions of Italian Lire) 1,507,764 1,084,224 1,396,931 1,244,936 7.9 12.2 Damages paid out (millions of Italian Lire) (1) 1,024,005 693,521 918,618 761,952 11.5 20.6 Personnel 405 410 413 418 -1.9 -1.2 Outlets 558 568 646 750 -13.6 -13.9 (1) Caption is related to damages paid out during the year.
Carige Vita Nuova, a life insurance provider, The encouraging results for the year stemmed from closed the year with net income (Lit. 5.5 bn) almost good performances in every branch of the company four times higher than in 1999. In particular, there was and close ties with other Group companies. In substantial growth in premium income for the period: particular, the conversion of the policy portfolio into +41.3% over December 1999 to Lit. 418.1 bn. This unit linked products which started in 1999 with the increase was the result of distribution opportunities launch of the three Gestilink lines, met consensus offered both by the company’s offices (a quarter of amongst customers and staff both at branch level and premiums issued; +10.4% higher than in 1999) and in insurance offices. the branch network of Banca Carige (three quarters of The number of the company’s offices dropped from premiums issued; +55.3% than in 1999). Damages 482 to 418. Staff levels rose: the company had 46 paid amounted to Lit.123.4 bn, an increase of 76% in employees at the end of the year in comparison to 39 comparison to the previous year. at 31/12/99.
204 THE YEAR 2000 AND THE EURO SIGNIFICANT EVENTS AFTER 31ST DECEMBER 2000
th The changeover to the euro, to be completed in 2002, On 5 February 2001, the Extraordinary Shareholders’ requires considerably complex organisational Meeting of Cassa di Risparmio di Savona SpA preparations as well as substantial investments. The first deliberated changes to its by-laws made necessary by step in the changeover to the euro was problem free for its inclusion within the Banca Carige Group. the Group but several hurdles lie ahead. The Banca Carige acquired a further 5% holding in Centro th introduction of the euro has been addressed by means Fiduciario SpA on 20 February, increasing its direct of a two-phase action plan. Phase one (1/1/99 - holding to 71.28%. The Bank’s total holding inclusive 31/12/01) handles the transition period leading up to of its subsidiary, Cassa di Risparmio di Savona’s 20% the launch of the new currency by means of a review of interest, rose to 91.28% at 31/12/00. the information technology system and replacement of From February 2001, as part of integration and software where necessary. The second phase will rationalisation with subsidiaries, information flows handle the introduction of the euro as legal tender within Banca del Monte di Lucca’s IC&T platforms will when it replaces in practical terms local currencies on be handled directly by the Bank’s own structure in 1st January 2002. addition to the transfer to the parent company of a The investments made to complete the transition were range of administrative and accounting activities. estimated by the Group in the order of Lit. 22 bn for The second phase of the securitisation operation the period 1998-2002. During 2000, further related to a portion of Banca Carige’s bad loans investments of Lit. 1.1 bn were made for software and portfolio was completed in March. This phase included staff-related costs. the rating of the different tranches, the definition of the The transition to 2000 was achieved without procedural bond type and related guarantees, the offer and problems or damage to the Group’s data-banks. subscription of the issues, and payment of the related During the period related costs amounted to Lit. 0.8 price. bn. In relation to the Bank of Italy’s ruling of March 2000 in response to Law 287/90 (‘antitrust act’), an agreement is being finalised for the release of three Banca Carige branches in the province of Savona, and one branch of Cassa di Risparmio di Savona SpA, in the same province.
The Board of Directors Genoa 28th March 2001
205 CONSOLIDATED FINANCIAL STATEMENTS AT 31/12/2000
206 CONSOLIDATED BALANCE SHEET
ASSETS Change % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 - CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 251,475 161,411 55.8 7.0 20 - TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 1,248,717 1,882,268 - 33.7 - 53.5 30 - LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 1,920,190 1,263,179 52.0 - 23.3 (a) repayable on demand 1,025,870 284,498 ... 61.4 (b) other loans and advances 894,320 978,681 - 8.6 - 33.4 40 - LOANS AND ADVANCES TO CUSTOMERS 13,599,435 10,912,180 24.6 15.5 including: – loans using funds managed on behalf of third parties 308 186 65.6 - 96.9 50 - BONDS AND OTHER FIXED–INCOME SECURITIES: 4,255,826 2,870,151 48.3 … (a) issued by public bodies 2,477,541 1,637,262 51.3 56.1 (b) issued by banks 1,094,490 668,535 63.7 … including: – own securities 136,854 104,038 31.5 - 14.9 (c) issued by financial institutions 493,935 281,136 75.7 … including: – own securities - - - - (d) issued by others 189,860 283,218 - 33.0 … 60 - SHARES, QUOTAS AND OTHER EQUITY SECURITIES 284,992 276,806 3.0 70.9 70 - EQUITY INVESTMENTS 178,891 431,852 - 58.6 75.8 a) carried at equity 111,073 373,024 - 70.2 … b) others 67,818 58,828 15.3 - 31.3 80 - INVESTMENTS IN GROUP COMPANIES 253,678 199,021 27.5 41.4 a) carried at equity 253,678 199,021 27.5 41.4 b) others - - - - 90 - POSITIVE DIFFERENCE ARISING FROM CONSOLIDATION 192,922 89,317 ... … 100 - POSITIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 32,549 148,499 - 78.1 … 110 - INTANGIBLE FIXED ASSETS 166,405 58,536 ... - 0.3 including: – start-up costs 8,871 13,066 - 32.1 - 6.4 – goodwill 123,216 13,431 ... - 33.3 120 - TANGIBLE FIXED ASSETS 1,330,363 1,040,004 27.9 19.9 140 - OWN SHARES 61,227 9,788 ... - 66.4 (nominal value: Lit.44,157) 150 - OTHER ASSETS 807,827 789,753 2.3 2.6 160 - ACCRUED INCOME AND PREPAID EXPENSES: 202,658 142,071 42.6 - 5.2 (a) accrued income 189,950 135,312 40.4 - 6.2 (b) prepaid expenses 12,708 6,759 88.0 20.4 including: – discount on bonds issued 2,398 1,455 64.8 44.5 TOTAL ASSETS 24,787,155 20,274,836 22.3 5.5
206 LIABILITIES AND STOCKHOLDERS’ EQUITY Change % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,285,770 3,025,664 41.6 - 13.7 (a) repayable on demand 302,136 43,715 ... - 74.8 (b) with agreed maturity dates or periods of notice 3,983,634 2,981,949 33.6 - 10.5 20 - AMOUNTS OWED TO CUSTOMERS: 9,702,318 7,729,178 25.5 7.1 (a) repayable on demand 8,544,390 7,115,963 20.1 10.9 (b) with agreed maturity dates or periods of notice 1,157,928 613,215 88.8 - 23.5 30 - DEBTS EVIDENCED BY CERTIFICATES: 6,041,858 5,054,162 19.5 10.7 (a) bonds 4,836,933 3,846,985 25.7 32.6 (b) certificates of deposits 1,047,302 1,111,140 - 5.7 - 27.5 (c) other 157,623 96,037 64.1 - 25.6 40 - FUNDS MANAGED ON BEHALF OF THIRD PARTIES 450 445 1.1 - 93.0 50 - OTHER LIABILITIES 827,962 705,607 17.3 6.1 60 - ACCRUED EXPENSES AND DEFERRED INCOME: 301,683 205,375 46.9 - 8.2 (a) accrued expenses 227,987 156,413 45.8 - 13.4 (b) deferred income 73,696 48,962 50.5 13.2 70 - RESERVE FOR TERMINATION INDEMNITIES 160,063 120,676 32.6 10.4 80 - RESERVES FOR RISKS AND CHARGES 824,581 767,691 7.4 3.1 (a) reserves for pensions and similar commitments 588,343 574,899 2.3 0.2 (b) reserves for taxation 179,101 169,477 5.7 12.2 (c) consolidation reserves for future risks and charges - - - - (d) other reserves 57,137 23,315 ... 16.8 90 - RESERVES FOR LOAN LOSSES 7,941 5,000 58.8 - 16.7 100 - RESERVES FOR GENERAL BANKING RISKS 10,000 10,000 - - 130 - NEGATIVE DIFFERENCE ARISING FROM - ...... APPLICATION OF THE EQUITY METHOD 3,834 2,666 43.8 5.9 140 - MINORITY INTERESTS 35,634 24,875 43.3 ... 150 - CAPITAL STOCK 1,970,173 1,970,173 - 16.9 160 - ADDITIONAL PAID-IN CAPITAL 241,368 299,189 - 19.3 ... 170 - RESERVES 202,527 210,945 - 4.0 24.0 (a) legal reserve 71,448 53,191 34.3 38.5 (b) reserve for purchase of treasury stock 61,227 9,788 ... - 66.4 (c) statutory reserves - - - - (d) other reserves 69,852 147,966 - 52.8 44.3 180 - REVALUATION RESERVES 15,587 15,587 - - 200 - NET INCOME 155,406 127,603 21.8 - 17.1
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 24,787,155 20,274,836 22.3 5.5
GUARANTEES AND COMMITMENTS 10 - GUARANTEES GIVEN 2,283,784 1,836,351 24.4 - 3.7 including: – acceptances 8,544 15,572 - 45.1 43.3 – other guarantees 2,275,240 1,820,778 25.0 - 4.0 20 - COMMITMENTS 1,610,573 831,815 93.6 36.5 including: – repurchase agreements - - - -
207 CONSOLIDATED INCOME STATEMENT
Change % (millions of Italian Lire) 2000 1999 2000 1999 10 -INTEREST INCOME AND SIMILAR REVENUES 1,189,242 887,740 34.0 - 21.5 including: – loans and advances to customers 861,797 627,796 37.3 - 12.2 – fixed-income securities 270,917 209,026 29.6 - 30.2 20 -INTEREST EXPENSE AND SIMILAR CHARGES -- 532,970532,970 - 383,472 39.0 - 35.1 including: ... – amounts owed to customers -- 138,141138,141 - 83,284 65.9 - 47.8 – securities issued -- 233,939233,939 - 171,488 36.4 - 30.5 30 -DIVIDENDS AND OTHER REVENUES: 18,750 49,461 - 62.1 ... (a) from shares, quotas and other equity securities 3,998 5,786 - 30.9 ... (b) from equity investments 13,724 43,018 - 68.1 ... (c) from equity investments in group companies 1,028 657 56.5 - 37.8 40 -COMMISSION INCOME 329,471 273,736 20.4 22.0 50 -COMMISSION EXPENSES -- 22,11022,110 - 16,176 36.7 - 9.2 60 -GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 22,233 80,797 - 72.5 - 13.2 70 -OTHER OPERATING INCOME 245,249 150,237 63.2 13.2 80 -ADMINISTRATIVE COSTS: -- 632,032632,032 - 549,655 15.0 4.7 (a) personnel -- 398,143398,143 - 355,581 12.0 3.3 including: ... – wages and salaries -- 250,859250,859 - 233,844 7.3 4.5 – social security costs -- 67,78067,780 - 68,210 - 0.6 2.4 – termination indemnities -- 21,30421,304 - 17,306 23.1 9.1 – pensions and similar commitments -- 23,41723,417 - 21,906 6.9 - 8.2 (b) other administrative costs -- 233,889233,889 - 194,074 20.5 7.3 90 -DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS -- 189,209189,209 - 127,439 48.5 19.2 100 -PROVISIONS FOR RISKS AND CHARGES -- 6,0866,086 - 2,751 ... 96.5 110 -OTHER OPERATING EXPENSES -- 20,45420,454 - 11,521 77.5 51.6 120 -PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS -- 109,142109,142 - 75,404 44.7 - 15.5 130 -RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 22,081 24,994 - 11.7 - 19.1 140 -ADDITIONAL PROVISIONS FOR LOAN LOSSES -- 10,61310,613 - 7,816 35.8 30.3 150 -WRITE-DOWNS TO FINANCIAL FIXED ASSETS -- 1,7561,756 - 2,842 - 38.2 … 160 -RECOVERIES OF FINANCIAL FIXED ASSETS 54 1,977 - 97.3 ... 170- PROFIT (LOSSES) ON INVESTMENTS CARRIED AT EQUITY -- 1,2441,244 - 53,984 - 97.7 … 180 -INCOME FROM ORDINARY ACTIVITIES 301,464 237,882 26.7 - 14.4 190 -EXTRAORDINARY INCOME 24,076 61,893 - 61.1 ... 200 -EXTRAORDINARY EXPENSES -- 8,8388,838 - 15,401 - 42.6 … 210 -EXTRAORDINARY INCOME, NET 15,238 46,492 - 67.2 ... 240 -INCOME TAXES -- 159,877159,877 - 156,645 2.1 12.9 250 -MINORITY INTERESTS -- 1,4191,419 - 126 ... … 260 -NET INCOME 155,406 127,603 21.8 - 17.1
208 CONSOLIDATED FINANCIAL STATEMENTS AT 31/12/00 IN EURO
The accounts for the year are expressed in euro with translation rates being those in effect from 1/1/99, in line with CONSOB Reccommendation no. 98083971. The Bank’s share capital has yet to be converted into euro.
209 CONSOLIDATED BALANCE SHEET
ASSETS Change % (millions of Euro) 31/12/00 31/12/99 2000 10 -CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 129,876 83,362 55.8 20 -TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 644,909 972,110 - 33.7 30 -LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 991,694 652,378 52.0 (a) repayable on demand 529,817 146,931 … (b) other loans and advances 461,877 505,447 - 8.6 40 -LOANS AND ADVANCES TO CUSTOMERS 7,023,522 5,635,671 24.6 including: – loans using funds managed on behalf of third parties 159 96 65.6 50 -BONDS AND OTHER FIXED–INCOME SECURITIES: 2,197,951 1,482,310 48.3 (a) issued by public bodies 1,279,543 845,575 51.3 (b) issued by banks 565,257 345,270 63.7 including: – own securities 70,679 53,731 31.5 (c) issued by financial institutions 255,096 145,195 75.7 including: – own securities - - - ... (d) issued by others 98,055 146,270 - 33.0 60 -SHARES, QUOTAS AND OTHER EQUITY SECURITIES 147,186 142,958 3.0 70 -EQUITY INVESTMENTS 92,389 223,033 - 58.6 a) carried at equity 57,364 192,651 - 70.2 b) others 35,025 30,382 15.3 80 -INVESTMENTS IN GROUP COMPANIES 131,014 102,786 27.5 a) carried at equity 131,014 102,786 27.5 b) others - - - ... 90 -POSITIVE DIFFERENCE ARISING FROM CONSOLIDATION 99,636 46,129 … 100 -POSITIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 16,810 76,693 - 78.1 110 - INTANGIBLEINTANGIBLE FIXEDFIXED ASSETSASSETS 85,941 30,231 … including: – start-up costs 4,581 6,748 - 32.1 – goodwill 63,636 6,937 … 120 - TANGIBLE FIXED ASSETS 687,075 537,117 27.9 140 - OWN SHARES 31,621 5,055 … (nominal value: 22,805) 150 - OTHER ASSETS 417,209 407,872 2.3 160 - ACCRUED INCOME AND PREPAID EXPENSES: 104,664 73,374 42.6 (a) accrued income 98,101 69,883 40.4 (b) prepaid expenses 6,563 3,491 88.0 including: – discount on bonds issued 1,239 751 65.0 TOTAL ASSETS 12,801,497 10,471,079 22.3
210 LIABILITIES AND STOCKHOLDERS’ EQUITY Change % (millions of Euro) 31/12/00 31/12/99 2000 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 2,213,415 1,562,625 41.6 (a) repayable on demand 156,040 22,577 … (b) with agreed maturity dates or periods of notice 2,057,375 1,540,048 33.6 2020 --AMOUNTS OWED TO CUSTOMERS: 5,010,829 3,991,787 25.5 (a) repayable on demand 4,412,809 3,675,088 20.1 (b) with agreed maturity dates or periods of notice 598,020 316,699 88.8 3030 --DEBTS EVIDENCED BY CERTIFICATES: 3,120,359 2,610,257 19.5 (a) bonds 2,498,067 1,986,802 25.7 (b) certificates of deposits 540,886 573,856 - 5.7 (c) other 81,406 49,599 64.1 4040 --FUNDS MANAGED ON BEHALF OF THIRD PARTIES 232 230 0.9 5050 -- OTHER LIABILITIES 427,606 364,415 17.3 6060 --ACCRUED EXPENSES AND DEFERRED INCOME: 155,807 106,067 46.9 (a) accrued expenses 117,746 80,780 45.8 (b) deferred income 38,061 25,287 50.5 7070 --RESERVE FOR TERMINATION INDEMNITIES 82,665 62,324 32.6 8080 --RESERVES FOR RISKS AND CHARGES 425,861 396,479 7.4 (a) reserves for pensions and similar commitments 303,854 296,910 2.3 (b) reserves for taxation 92,498 87,528 5.7 (c) consolidation reserves for future risks and charges - - - ... (d) other reserves 29,509 12,041 … 9090 --RESERVES FOR LOAN LOSSES 4,101 2,582 58.8 100 - RESERVES FOR GENERAL BANKING RISKS 5,165 5,165 - 130 - NEGATIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 1,980 1,377 43.8 140 - MINORITY INTERESTS 18,404 12,847 43.3 150 - CAPITAL STOCK 1,017,510 1,017,510 - 160 - ADDITIONAL PAID-IN CAPITAL 124,656 154,518 - 19.3 170 - RESERVES 104,596 108,944 - 4.0 (a) legal reserve 36,900 27,471 34.3 (b) reserve for purchase of treasury stock 31,621 5,055 … (c) statutory reserves - - - ... (d) other reserves 36,075 76,418 - 52.8 180 - REVALUATION RESERVES 8,050 8,050 - 200 - NET INCOME 80,261 65,902 21.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 12,801,497 10,471,079 22.3
GUARANTEES AND COMMITMENTS
10 -GUARANTEES GIVEN 1,179,476 948,396 24.4 including: – acceptances 4,413 8,042 - 45.1 – other guarantees 1,175,063 940,354 25.0 20 -COMMITMENTS 831,791 429,596 93.6 including: – repurchase agreements - - - ...
211 Purchase of 21 branches from Banco di Sicilia CONSOLIDATE EXPLANATORY At the end of the year, the Bank acquired 21 branches NOTES from the Banco di Sicilia situated in the provinces of Enna and Palermo. The effects of the acquisition for 2000 were exclusively on the balance sheet as the agreement came into force 1/1/2001. INTRODUCTION The value of assets purchased are as follows: The accounting principles adopted in these consolidated statements are those foreseen by customers loans 113.0 bn Legislative decree 87/92 and relevant Bank of Italy amounts owed by banks and circulars (ruling of 30/7/92 and subsequent other credit institutions 272.4 bn amendments). (corresponding to imbalance of credit values granted) The Balance Sheet and Income Statement show customer deposits 332.9 bn amounts in millions of Italian lire. Comparison is made securities issued 49.2 bn to the periods ending 30/6/99 and 31/12/99. indirect deposits (OFIA) 390.8 bn Captions which show no amounts for the periods have been omitted. With regards to balance sheet caption 50 “ bonds and other fixed-income securities”, data given at items Valuation of assets and liabilities expressed “issued by banks” and “issued by others” have been in other EMU countries’ currencies reclassified in order to aid comparison between the statements for 2000 and those at 30/6/99 and At 31st December 1998, assets, excluding equity 31/12/99. investments, liabilities and off-balance sheet Amounts are also expressed in euro applying the transactions are expressed in the currencies of the lira/euro translation rate in force from 1/1/99, as EMU-member countries or indexed to the same in requested by CONSOB recommendation no. accordance with the relevant areas of article 21, 98083971 of 26/10/98. Legislative decree 213/98, applying the exchange Amounts given in the balance sheet and income translation rates fixed at 31/12/98 and pursuant to statement tables are also expressed in millions of Italian articles 4 and 5 of Community regulation no. 1103/97. lire unless otherwise stated. Captions which show no Positive and negative exchange translation differentials amounts for the periods under examination have been were recorded at caption 60 “ Gains (losses) from omitted. Further information has been provided where financial transactions” in the case of non substantial judged appropriate. amounts. Accounting principles for the period are aligned to Equity investments in currencies of EMU-member those used for the preparation of the 1999 Annual countries or indexed to the same were evaluated in Report. accordance with the relevant areas of article 21, The data present in this consolidated report at Legislative decree 213/98, applying the rate in force at 31/12/00 are not fully aligned with those of previous the time of purchase. The holding in Frankfurter accounting periods (periods ending 30/6/99 and Bankgesellschaft AG (previously Bankenunion AG), 31/12/99) as at 31/12/99 only Banca del Monte di however, was evaluated according to the equity Lucca was fully consolidated whilst Cassa di Risparmio method with the exchange-rate conversion being that di Savona and its subsidiaries were accounted for foreseen by the above-mentioned Legislative decree under the equity method. With Bank of Italy 213/98. authorisation received on 17/4/00, the Savona bank At 30/6/00, positive exchange translation differentials and its subsidiaries are fully consolidated in the present relating to equity investments not recorded at caption accounting period. 60 amounted to Lit. 20 million. These equity Full consolidation of Cassa di Risparmio di Savona investments (excluding Frankfurter Bankgesellschaft and subsidiaries entailed the transfer from caption 100 AG) are expressed in the currencies of the EMU- “Positive differences arising from the application of the member countries or indexed to the same in equity method” to caption 90 “Positive differences accordance with the relevant areas of article 21, arising from consolidation” of Lit. 113,140 million, Legislative decree 213/98, applying the rate in force at which will continue to be amortised over 20 years. A the time of purchase. specific liabilities caption relating to third party assets amounts to Lit. 13, 163 million. The Board of Directors’ report compares the results at 31/12/00 with pro-forma data for 31/12/99 and 30/6/99. Basis of consolidation
212 The Consolidated Financial Statements contains Statements in foreign currency are those pertaining financial data relative to Banca Carige and all its exclusively to companies evaluated according to the subsidiaries operating directly or indirectly in banking, equity method. Exchange-rate translation differences at financial and non-financial services. the end of the first six months appear in the At 30/6/00, Cassa di Risparmio di Savona and its consolidated reserves. subsidiaries, Ligure Leasing and Carisa Immobiliare, were fully consolidated for the first time. At 31/12/99 Reference date the financial statements of the same were accounted for under the equity method. Financial data from those statements used for The following companies were fully consolidated: consolidation are as at 31/12/00. The accounting of the associated companies under the equity method Company Activity Equity ratio makes reference to the most recently approved balance % sheet. Galeazzo Srl real estate 100.000 Columbus Carige SpA real estate 100.000 Consolidation principles Immobiliare E. Vernazza real estate 100.000 SpA Subsidiaries, excluding those operating in insurance, Ligure Leasing SpA finance 95.901 are fully consolidated. Therefore, assets, liabilities, off- Cassa di Risparmio di bank 95.901 balance sheet items as well as receivables and Savona SpA payables are included. The insurance companies were accounted for under the equity method. Immobiliare Carisa SrL Real estate 95.901 Consolidated holdings in subsidiaries are offset by the corresponding proportion of the subsidiaries’ carrying Centro fiduciario SpA Trust company 85.460 value of net assets recorded in the consolidated Banca del Monte di Lucca bank 51.000 statement for the first time. In the event of differences SpA emerging, these are put down to the subsidiaries’ assets and liabilities. Differences for the year resulting from consolidation pertaining to third parties are recorded at a specific caption. In accordance with the The following companies were accounted for by the Bank of Italy’s instructions regarding consolidated equity method: statements, positive differences arising from consolidation are partially offset by the relative Company Activity Equity revaluation and credit risk reserve provisions of those ratio % subsidiaries to which they refer. In addition, these are Carige Vita Nuova SpA insurance 92.809 written down against negative differences stemming Levante Norditalia Assicurazioni insurance 87.014 from consolidation until the two amounts match. SpA The remaining amount is considered goodwill and is Frankfurter Bankgesellschaft AG banking 47.500 charged to assets at “Positive differences arising from Autostrada dei Fiori SpA other 20.456 consolidation”. Subsequent to the year in which Eptaconsors SpA finance 20.240 consolidation diferences were calculated, changes pertaining to the Group in subsidiaries’ net assets are recorded in the consolidated statements at the relevant During 2000, Banca Carige increased its holding in caption under liabilities; changes relative to third Carige Vita Nuova to 92.80% as a result of the parties are recorded at caption 140 “Minority purchase of a further 40% from Levante Norditalia interests”. SpA. Value adjustments and provisions to reserves carried The consolidation of Levante Norditalia Assicurazioni out in accordance with tax regulations were written and Carige Vita Nuova was carried out by applying the down; relevant deferred tax was covered by provisions. equity method in the light of the nature of insurance Significant intra-subsidiary relations have been companies’ activities and, subsequently, their financial eliminated. statements. The accounting principles applied in the preparation of financial statements of those companies consolidated Statements referred to were brought into line in the case of significant differences being present at consolidation. The consolidated balance sheet was prepared by using In particular, the securities portfolio of Banca del the financial statements of the consolidated companies Monte di Lucca, in which Banca Carige has a 51 % st at 31 December 2000 reclassified and adjusted to holding acquired on 17th November 1999, is evaluated conform to regulations in force and the Group’s according to the LIFO method. However, this does not accounting principles. affect the asset base or economic structure of the Statements in foreign currency Group. The value of insurance companies and those in which Banca Carige has a significant holding was calculated
213 by applying the equity method. In the case of a Budget Law), with the subsequent charges, all or in company in which Banca Carige has a significant part, to be covered by the State or public bodies. interest having itself to prepare a consolidated At 31/12/00 the interest rate relative to these statement, consolidated net assets were used as the mortgages had yet to be re-negotiated and the system- basis for calculation. wide average rate of interest had still to calculated (the Positive differences arising from the increase in value of provisions of the Law came into effect on 1/7/99). In the investment are recorded under net equity as “equity the light of this, provisions to a specific reserve were investments” for the share that refers to fixed assets, made of Lit. 2,728 million corresponding to estimated and at “Positive differences arising from application of charges for the period 1/7/99 to 31/12/00. the equity method” for the part related to goodwill. Estimated charges for 2001 are around Lit. 1.5 bn. Negative differences are classified under “Negative differences arising from application of the equity c) Fixed rate mortgages (Law decree method”. 394/00) Positive or negative changes in the value of the equity investment arising in the first six months of the year are Law decree 394 of 29/12/2000 foresees the re- accounted for. This change is recorded at caption 170 negotiation of specific categories of fixed-rate loans of the consolidated income statement “Profit (loss) on with the stipulation of a new rate of interest. The re- investments carried at equity”. negotiation, to be applied to mortgage instalments after 2nd January 2001, will generate reduced interest Balance sheet effects of Banca Carige’s income of around Lit. 2 bn. increased shareholding in Carige Vita Nuova SpA d) Capitalisation of interest due (Constitutional Court Sentence 425 of During 2000, Banca Carige increased its holding in 9/10/00) Carige Vita Nuova to 92.80% as a result of the purchase of a further 40% from Levante Norditalia The Constitutional Court’s ruling number 425 of SpA. 9/10/00 declared illegitimate the contents of article 25, Legislative decree 344/99. The article excluded from Consob request for information (Consob liability to legal action those clauses between banks communication no. 1011405 dated and customers relating to capitalisation of interest due 15/2/2001) signed after the coming into effect of the Inter- ministerial Committee for Credit and Saving’s Below is presented the information Italian banks are deliberation of 22/4/00, enacting Legislative decree required to supply to Consob pursuant to article 114, 344/99. legislative decree 58/98.. The Constitutional Court confined its judgement exclusively to a criticism of the Government in its a) Tax relief foreseen by articles 22 and 23 enactment of the above-mentioned law. of Legislative decree 153/99 In the light of the above and the inevitability of further legislation on the matter the Group’s banks have In these financial statements, as in previous years, declined the few requests they have received from income tax for the year was calculated also on the customers for the return of interest paid over ten years basis of relief for non structural mergers as foreseen by as a result of the quarterly capitalisation of bank the above-stated legislation. interest income. As a result, for 1999 and 2000 there were reduced tax The Group’s banks do not view the Constitutional liabilities of, respectively, Lit. 472 million and Lit. 2,544 Court’s sentence as an acceptance of the intrinsic million. reasonableness of article 25, Legislative decree 344/99 In relation to this legislation, the Treasury and Finance but merely as a criticism of the Government’s Ministries in their press statement of 3/4/00 made it enactment of amnesty-type legislation which goes known that the tax relief foreseen by Law 461/98 and beyond the confines of its powers as stated by Law Legislative decree 153/99 was suspended in the light of 128/98. a European Commission inquiry into the question of The sentence appears, rather than a declaration of the such relief being in the form of State aid as proscribed illegitimacy of the procedure of capitalisation of by article 88, paragraph 2 of the European Community interest, proof of the need for new legislation to resolve treaty. the question. b) Special rate mortgages (Law 133/99 and SECURITISATION OF CREDIT article 145 of Law accompanying 2001 Budget) At the end of the year, in line with the provisions of Law 130/1999, Banca Carige securitised without recourse a Article 29 of Law 133/99 foresees the re-negotiation of part of its bad loans portfolio. mortgage interest rates at a reference rate equal to the The gross balance sheet total of customer loans was Lit. system-wide average (as defined by article 145 of the 566.4 bn, classified as bad loans at 30/11/00 and
214 backed either fully or in part by voluntary or legally- granted to ARGO Finance One which is recorded at enforced guarantees. caption 40, ‘Loans and advances to customers’ under The ownership of the loans was transferred on item ‘ other non current account loans’. 21/12/00 (with effect from 23/12/00) to ARGO After the subscription of class A and B bonds on the Finance One Srl of Milan, a special purpose vehicle part of institutional investors, and Class C on the part established pursuant to Law 130/99 and enrolled in the of Banca Carige on 27/3/2001 the credit was re-paid. general list of companies held by the Italian Exchange The reduction in the value of the loans ceded (Lit. Office as foreseen by article 106, Legislative decree 120.6 bn) was recorded at caption 130 ‘Reserves and 385/93; the vehicle will be used for one or more issue premium’ in line with article 6, Law 130/99. The securitisation transactions as foreseen by article 3 of the amount is entered in the income statement over five above-mentioned Law 130/99. years in equal instalments starting from 2000, the year The ownership of ARGO Finance One at present is as in which the loans were ceded. follows: 95% holding on the part of a Dutch-registered Potential risks for Banca Carige as a result of the foundation; 5% holding on the part of Columbus operation are represented by the class C bonds, the Carige Immobiliare, a subsidiary of the Banca Carige line of credit, the interest rate cap, and guarantees Group. granted to the holders of class B bonds. These risks will ARGO Finance One acquired the credits by a bond be evaluated by constant monitoring of the actual issue in three classes (A, B and C) for Lit. 165.3 results of recovery in comparison to those scheduled. million. The class C bonds fully subscribed by Banca Carige The company also proposed the further issue of C class have been included in the Bank’s investment securities (asset backed) bonds totalling euro 165.3 million to portfolio. cover issuance-related costs. The recovery of the securitised credit will be carried out These financialfinancial statementsstatements were audited by on the part of ARGO by Banca Carige according to KPMG SpA. The selection of the Bank’s auditors for the the terms present in a specific service contract between period 2000-2002 was approved by the Shareholders’ the parties. Meeting of 27/4/00 pursuant to Legislative decree The funds recovered will be destined exclusively for the 58/90. The duties of the auditors for the period are the securities issued and related costs. auditing of the Bank’s financial statements, the The bonds issued by ARGO Finance One are as consolidated financial statements, and a limited review follows: of the half yearly report at 30 June. Class A ‘Senior’ bonds amounting to euro 40 million, floating rate indexed to Euribor at 6 months + 0.60%, twice-yearly coupon; Class B ‘Mezzanine’ bonds amounting to euro 70 million, floating rate indexed to Euribor at 6 months + 0.45%, twice-yearly coupon; Class C ‘Junior’ bonds amounting to euro 56.5 million, fixed rate 4% plus variable remuneration, twice-yearly coupon. The senior and mezzanine securities were placed with institutional investors and were assigned the following rating:
Moody’s Fitch IBCA Class A Aaa AA Class B Aa1 AA
Both tranches are listed on the Luxembourg stock market The lowest ranking class C bonds are fully subscribed by Banca Carige. The class A and B bond issues are further backed by credit line granted by Banca Carige to the special purpose vehicle of euro 15 million in case of temporary liquidity difficulties arising from late payment, in addition to a limited recourse bond issue of euro 84 million. ARGO Finance One has also purchased an interest rate cap from Banca Carige with premium paid at the moment of the issuing of the bonds. With regards to the accounting of this securitised credit operation, at 31/12/2000 a credit of Lit. 320 bn was
215 The original value of the securities is reinstated when PART A the reasons for writing down cease to apply. ACCOUNTING PRINCIPLES The possible transfer of securities from the investment to trading securities portfolio is accounted for at book price on the transaction date calculated according to the evaluation criteria applied to the portfolio of origin. SECTION 1 Securities transferred and still present in the portfolio at The Accounting Policies are in compliance with law the balance sheet date are valued according to the decree 87/92 and the Bank of Italy’s provisions of evaluation criteria applied to the portfolio to which they 30/7/92 and subsequent modifications and are the are destined. same as those used in 1999, with the exception of the Off balance sheet operations, excluding handling of deferred taxation, in accordance with the those in currency. Unsettled securities transactions Bank of Italy’s ruling of 3/8/99. are evaluated according to the criteria of the portfolio Where foreseen by legislation, the policies have been to which they are destined. Unsettled trading securities agreed on by the Board of Statutory Auditors. transactions are evaluated accordingly: LOANS, GUARANTEES AND COMMITMENTS a) with regards to commitments to purchase and Loans are stated at their estimated realizable value and commitments to sell which have the same underlying are determined according to debtors’ solvency and the securities with the same nominal value, any positive debt-paying difficulty of the debtor’s home country. difference between the settlement price of the The valuation of loans is made under the application commitment to purchase and the settlement price of the of either an analytic or lump-sum method. commitment to sell is recorded in the income statement; The interest on overdue loans is adjusted by the portion of loans considered to be irrecoverable. b) the residual commitments to purchase are evaluated Reserves for loan losses, recorded under “Liabilities”, at either settlement price or market price, have been created exclusively to offset contingent credit whichever is lower; risks. c) the residual commitments to sell are evaluated at Reserves for guarantees and commitments, recorded either settlement price or book value, whichever is under “Liabilities” have been created to offset this lower. particular kind of risk. Derivative contracts on securities, interest rate etc., are evaluated accordingly: SECURITIES PORTFOLIO AND OFF-BALANCE a) contracts related to underlying equity invest- SHEET TRANSACTIONS EXCLUDING THOSE IN ments are evaluated at cost and written down in the CURRENCY event of long-term deterioration of the is-suer's InvestmentInvestment securities.securities. Investment securities are solvency; valued at cost, adjusted on an accruals basis for the b) trading derivatives contracts are evaluated at difference between cost and their redemption at either cost or market value, whichever is lower. Market maturity and includes unamortized issue premiums or value of contracts is that quoted at the last day of the discounts. business year. Those contracts which are not quoted on In the event of long-term deterioration of the issuers’ organised markets but which can be evaluated solvency, the securities are written down. according to official parameters, are evaluated at The original value of investment securities is reinstated replacement cost at the last day of the business year; when the reasons for writing down cease to apply. c) economically-linked trading contracts, which Trading securities. are closely correlated both technically and financially, – trading securities quoted on organised markets are are evaluated in the same way. The losses which valued either at purchase price or the average exceed connected gains are recorded in the income market price for the last month of the year, statement; whichever is lower; d) hedging contracts on trading securities are – trading securities not quoted on organised markets evaluated in the same way as the underlying: market are valued at purchase price adjusted for market value is the average of prices and parameters recorded trends and issuer solvency. in the last month of the business year. Losses which The purchase price, determined according to the exceed gains on securities or gains which correspond to principle of daily weighted average, includes losses on securities are recorded in the income adjustments for the relevant annual quota of issue statement; premium or discount accumulated during the period e) hedging contracts on assets and liabilities the securities are held. which are evaluated at cost are in turn evaluated at cost. Securities held at 1/12/91 and still in portfolio at year end 1999 are valued at cost defined as the value of EQUITY INVESTMENTS transfer to Banca Carige at 1/12/91 and adjusted for The Bank’s stock rights in relation to its subsidiaries are issue premium or discount pursuant to included under holdings. These rights, in the form of securities or not, are held for investment. Legislative decree 719/94 and subsequent changes. Holdings, both substantial and those in Group subsidiaries, are valued at purchase cost or sub- scription as according to Law 218/90. The cost is
216 written down to reflect any permanent loss in value. The straight-line basis. Start-up and improvement costs in original value is reinstated when the reasons for writing addition to research and development costs are down ceased to apply. amortised over a period not exceeding five years. Goodwill arising from the merger into Banca Carige of FOREIGN CURRENCY ASSETS AND LIABILITIES Istituto di Credito Fondiario della Liguria SpA, INCLUDING OFF-BALANCE SHEET Mediocredito Ligure SpA, Columbus Leasing Spa and TRANSACTIONS Columbus Domestic SpA is amortized, with the Statutory Auditors’ consent, over eight years starting Assets, excluding equity investments, liabilities and off- from 1/7/94. The period was calculated on the basis of balance sheet transactions expressed in the currencies residual goodwill stemming from the merger. of the EMU-member countries or indexed to the same Goodwill paid related to the branches acquired from are valued in accordance with the relevant areas of Banco di Sicilia (contract stipulated on 28/12/00 with article 21, Legislative decree 213/98, applying the effect 1/1/01) will be amortised over twenty years from exchange translation rates fixed at 31/12/98 and 2001, a period corresponding to the average period of pursuant to articles 4 and 5 of Community regulation goodwill calculated for the network acquired. no. 1103/97. Equity investments in currencies of EMU-member PAYABLES countries or indexed to the same are valued in Payables are recorded at face value. accordance with the relevant areas of article 21, Legislative decree 213/98, applying the rate in force at TERMINATION INDEMNITY the time of purchase, excluding Frankfurter Termination indemnity is in accordance with current Bankgesellschaft AG (previously Bankenunion AG). legislation. Assets, excluding equity investments, and liabilities expressed in currencies other than those of EMU- SUPPLEMENTARY PENSION FUND member countries or indexed to the same are valued The subsidiaries’ supplementary pension funds are applying the spot rate at 30/6/2000. managed according to regulations specific to each Equity investments expressed in currencies other than company. those of EMU-member countries are valued according to the rate in force at the time of purchase. ACCRUALS AND DEFERRALS Off-balance sheet transactions expressed in currencies Accruals and deferrals are calculated in accordance other than those of EMU-member countries are valued: with the matching principle. – at the spot rate as of the last business day of the year in the case of unsettled spot contracts; – at the forward exchange rate as of the last RESERVES FOR RISKS AND CHARGES - RE- business day of the year for maturities corresponding to SERVES FOR TAXATION those of the contracts being valued, in the case of Tax reserves stem from provisions for direct taxation, forward transactions. deferred tax liabilities, indirect taxation and other In the case of on-balance sheet assets and liabili-ties unforeseen events such as risk to liabilities after linked to off-balance sheet assets and liabilities, off- litigation. balance sheet items are accounted for in a manner similar to the accounting of on-balance sheet items. OTHER TAX ASPECTS - DEFERRED TAX: TANGIBLE FIXED ASSETS POSITIVE AND NEGATIVE EFFECTS Tangible assets are recorded at purchase price plus The calculation of deferred tax is made on the basis of related charges, and include leased assets and those the equity method with reference to the timing assets that are to be leased. differences existing between the value attributed to an The value of tangible fixed assets includes revaluation asset or liability under accounting criteria and the in accordance with Laws 575/75, 72/83, 413/91 (only value attributed to the same for the calculation of tax. for some assets transferred by merged companies) and Tax advanced is recorded under assets subject to the with reference to capital gains, Law 218/90. condition that, for prudential reasons, there is a Advances to supplies for the purpose of tangible fixed reasonable expectation of realising, over a period of assets are included under tangible fixed assets. five years, taxable income sufficient for its recovery. Depreciation is determined by using the straight-line The recording of liabilities for taxes payable in the method over the useful life of each category. future is subject to the condition that there is a Objects of art, being assets which conserve if not possibility of the liability to tax occurring. increase their value, are not amortized. The treatment of deferred tax in these financial Included in this category are leased assets, in line with statements is in accordance with the Bank of Italy's the equity method. instructions dated 3/8/99. INTANGIBLE FIXED ASSETS POSITIVE CONSOLIDATION AND NET EQUITY Intangible fixed assets are, in those cases foreseen by DIFFERENCES relevant legislation, recorded with the consent of the Board of Statutory Auditors and are amortized on a
217 Positive consolidation and net equity differences are amortised over five years. Positive net equity differences relative to majority holdings in insurance subsidiaries are amortised with the consent of the Board of Statutory Auditors over a longer period of time in the light of the nature of insurance companies' activities and the reasonable expectation of slower depreciation. Consequently, positive net equity differences stemming from the consolidation of the insurance subsidiaries Levante Norditalia Assicurazioni and Carige Vita Nuova are amortised over fifteen years. Differences respectively of net equity and consolidation relative to Cassa di Risparmio di Savona and Banca del Monte di Lucca are amortised over twenty years.
SECTION 2
TAX-RELATED ADJUSTMENTS AND PROVISIONS
2.1 Tax Adjustments Not carried out.
2.2 Tax Provisions Not carried out.
218 CONSOLIDATED FINANCIAL STATEMENTS AT 31/12/2000
206 CONSOLIDATED BALANCE SHEET
ASSETS Change % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 - CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 251,475 161,411 55.8 7.0 20 - TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 1,248,717 1,882,268 - 33.7 - 53.5 30 - LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 1,920,190 1,263,179 52.0 - 23.3 (a) repayable on demand 1,025,870 284,498 ... 61.4 (b) other loans and advances 894,320 978,681 - 8.6 - 33.4 40 - LOANS AND ADVANCES TO CUSTOMERS 13,599,435 10,912,180 24.6 15.5 including: – loans using funds managed on behalf of third parties 308 186 65.6 - 96.9 50 - BONDS AND OTHER FIXED–INCOME SECURITIES: 4,255,826 2,870,151 48.3 … (a) issued by public bodies 2,477,541 1,637,262 51.3 56.1 (b) issued by banks 1,094,490 668,535 63.7 … including: – own securities 136,854 104,038 31.5 - 14.9 (c) issued by financial institutions 493,935 281,136 75.7 … including: – own securities - - - - (d) issued by others 189,860 283,218 - 33.0 … 60 - SHARES, QUOTAS AND OTHER EQUITY SECURITIES 284,992 276,806 3.0 70.9 70 - EQUITY INVESTMENTS 178,891 431,852 - 58.6 75.8 a) carried at equity 111,073 373,024 - 70.2 … b) others 67,818 58,828 15.3 - 31.3 80 - INVESTMENTS IN GROUP COMPANIES 253,678 199,021 27.5 41.4 a) carried at equity 253,678 199,021 27.5 41.4 b) others - - - - 90 - POSITIVE DIFFERENCE ARISING FROM CONSOLIDATION 192,922 89,317 ... … 100 - POSITIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 32,549 148,499 - 78.1 … 110 - INTANGIBLE FIXED ASSETS 166,405 58,536 ... - 0.3 including: – start-up costs 8,871 13,066 - 32.1 - 6.4 – goodwill 123,216 13,431 ... - 33.3 120 - TANGIBLE FIXED ASSETS 1,330,363 1,040,004 27.9 19.9 140 - OWN SHARES 61,227 9,788 ... - 66.4 (nominal value: Lit.44,157) 150 - OTHER ASSETS 807,827 789,753 2.3 2.6 160 - ACCRUED INCOME AND PREPAID EXPENSES: 202,658 142,071 42.6 - 5.2 (a) accrued income 189,950 135,312 40.4 - 6.2 (b) prepaid expenses 12,708 6,759 88.0 20.4 including: – discount on bonds issued 2,398 1,455 64.8 44.5 TOTAL ASSETS 24,787,155 20,274,836 22.3 5.5 LIABILITIES AND STOCKHOLDERS’ EQUITY Change % (millions of Italian Lire) 31/12/00 31/12/99 2000 1999 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 4,285,770 3,025,664 41.6 - 13.7 (a) repayable on demand 302,136 43,715 ... - 74.8 (b) with agreed maturity dates or periods of notice 3,983,634 2,981,949 33.6 - 10.5 20 - AMOUNTS OWED TO CUSTOMERS: 9,702,318 7,729,178 25.5 7.1 (a) repayable on demand 8,544,390 7,115,963 20.1 10.9 (b) with agreed maturity dates or periods of notice 1,157,928 613,215 88.8 - 23.5 30 - DEBTS EVIDENCED BY CERTIFICATES: 6,041,858 5,054,162 19.5 10.7 (a) bonds 4,836,933 3,846,985 25.7 32.6 (b) certificates of deposits 1,047,302 1,111,140 - 5.7 - 27.5 (c) other 157,623 96,037 64.1 - 25.6 40 - FUNDS MANAGED ON BEHALF OF THIRD PARTIES 450 445 1.1 - 93.0 50 - OTHER LIABILITIES 827,962 705,607 17.3 6.1 60 - ACCRUED EXPENSES AND DEFERRED INCOME: 301,683 205,375 46.9 - 8.2 (a) accrued expenses 227,987 156,413 45.8 - 13.4 (b) deferred income 73,696 48,962 50.5 13.2 70 - RESERVE FOR TERMINATION INDEMNITIES 160,063 120,676 32.6 10.4 80 - RESERVES FOR RISKS AND CHARGES 824,581 767,691 7.4 3.1 (a) reserves for pensions and similar commitments 588,343 574,899 2.3 0.2
(b) reserves for taxation 179,101 169,477 5.7 12.2 (c) consolidation reserves for future risks and charges - - - - (d) other reserves 57,137 23,315 ... 16.8 90 - RESERVES FOR LOAN LOSSES 7,941 5,000 58.8 - 16.7 100 - RESERVES FOR GENERAL BANKING RISKS 10,000 10,000 - - 130 - NEGATIVE DIFFERENCE ARISING FROM - ...... APPLICATION OF THE EQUITY METHOD 3,834 2,666 43.8 5.9 140 - MINORITY INTERESTS 35,634 24,875 43.3 ... 150 - CAPITAL STOCK 1,970,173 1,970,173 - 16.9 160 - ADDITIONAL PAID-IN CAPITAL 241,368 299,189 - 19.3 ... 170 - RESERVES 202,527 210,945 - 4.0 24.0 (a) legal reserve 71,448 53,191 34.3 38.5 (b) reserve for purchase of treasury stock 61,227 9,788 ... - 66.4 (c) statutory reserves - - - - (d) other reserves 69,852 147,966 - 52.8 44.3 180 - REVALUATION RESERVES 15,587 15,587 - - 200 - NET INCOME 155,406 127,603 21.8 - 17.1
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 24,787,155 20,274,836 22.3 5.5
GUARANTEES AND COMMITMENTS 10 - GUARANTEES GIVEN 2,283,784 1,836,351 24.4 - 3.7 including: – acceptances 8,544 15,572 - 45.1 43.3 – other guarantees 2,275,240 1,820,778 25.0 - 4.0 20 - COMMITMENTS 1,610,573 831,815 93.6 36.5 including: – repurchase agreements - - - - CONSOLIDATED INCOME STATEMENT
Change % (millions of Italian Lire) 2000 1999 2000 1999 10 -INTEREST INCOME AND SIMILAR REVENUES 1,189,242 887,740 34.0 - 21.5 including: – loans and advances to customers 861,797 627,796 37.3 - 12.2 – fixed-income securities 270,917 209,026 29.6 - 30.2 20 -INTEREST EXPENSE AND SIMILAR CHARGES -- 532,970532,970 - 383,472 39.0 - 35.1 including: ... – amounts owed to customers -- 138,141138,141 - 83,284 65.9 - 47.8 – securities issued -- 233,939233,939 - 171,488 36.4 - 30.5 30 -DIVIDENDS AND OTHER REVENUES: 18,750 49,461 - 62.1 ... (a) from shares, quotas and other equity securities 3,998 5,786 - 30.9 ... (b) from equity investments 13,724 43,018 - 68.1 ... (c) from equity investments in group companies 1,028 657 56.5 - 37.8 40 -COMMISSION INCOME 329,471 273,736 20.4 22.0 50 -COMMISSION EXPENSES -- 22,11022,110 - 16,176 36.7 - 9.2 60 -GAINS (LOSSES) FROM FINANCIAL TRANSACTIONS, NET 22,233 80,797 - 72.5 - 13.2 70 -OTHER OPERATING INCOME 245,249 150,237 63.2 13.2 80 -ADMINISTRATIVE COSTS: -- 632,032632,032 - 549,655 15.0 4.7 (a) personnel -- 398,143398,143 - 355,581 12.0 3.3 including: ... – wages and salaries -- 250,859250,859 - 233,844 7.3 4.5 – social security costs -- 67,78067,780 - 68,210 - 0.6 2.4 – termination indemnities -- 21,30421,304 - 17,306 23.1 9.1 – pensions and similar commitments -- 23,41723,417 - 21,906 6.9 - 8.2 (b) other administrative costs -- 233,889233,889 - 194,074 20.5 7.3 90 -DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS -- 189,209189,209 - 127,439 48.5 19.2 100 -PROVISIONS FOR RISKS AND CHARGES -- 6,0866,086 - 2,751 ... 96.5 110 -OTHER OPERATING EXPENSES -- 20,45420,454 - 11,521 77.5 51.6 120 -PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS -- 109,142109,142 - 75,404 44.7 - 15.5 130 -RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS 22,081 24,994 - 11.7 - 19.1 140 -ADDITIONAL PROVISIONS FOR LOAN LOSSES -- 10,61310,613 - 7,816 35.8 30.3 150 -WRITE-DOWNS TO FINANCIAL FIXED ASSETS -- 1,7561,756 - 2,842 - 38.2 … 160 -RECOVERIES OF FINANCIAL FIXED ASSETS 54 1,977 - 97.3 ... 170- PROFIT (LOSSES) ON INVESTMENTS CARRIED AT EQUITY -- 1,2441,244 - 53,984 - 97.7 … 180 -INCOME FROM ORDINARY ACTIVITIES 301,464 237,882 26.7 - 14.4 190 -EXTRAORDINARY INCOME 24,076 61,893 - 61.1 ... 200 -EXTRAORDINARY EXPENSES -- 8,8388,838 - 15,401 - 42.6 … 210 -EXTRAORDINARY INCOME, NET 15,238 46,492 - 67.2 ... 240 -INCOME TAXES -- 159,877159,877 - 156,645 2.1 12.9 250 -MINORITY INTERESTS -- 1,4191,419 - 126 ... … 260 -NET INCOME 155,406 127,603 21.8 - 17.1
208 CONSOLIDATED FINANCIAL STATEMENTS AT 31/12/00 IN EURO
The accounts for the year are expressed in euro with translation rates being those in effect from 1/1/99, in line with CONSOB Reccommendation no. 98083971. The Bank’s share capital has yet to be converted into euro.
209 CONSOLIDATED BALANCE SHEET
ASSETS Change % (millions of Euro) 31/12/00 31/12/99 2000 10 -CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES 129,876 83,362 55.8 20 -TREASURY CERTIFICATES AND OTHER BILLS ELIGIBLE FOR REFINANCING WITH CENTRAL BANKS 644,909 972,110 - 33.7 30 -LOANS AND ADVANCES TO CREDIT INSTITUTIONS: 991,694 652,378 52.0 (a) repayable on demand 529,817 146,931 … (b) other loans and advances 461,877 505,447 - 8.6 40 -LOANS AND ADVANCES TO CUSTOMERS 7,023,522 5,635,671 24.6 including: – loans using funds managed on behalf of third parties 159 96 65.6 50 -BONDS AND OTHER FIXED–INCOME SECURITIES: 2,197,951 1,482,310 48.3 (a) issued by public bodies 1,279,543 845,575 51.3 (b) issued by banks 565,257 345,270 63.7 including: – own securities 70,679 53,731 31.5 (c) issued by financial institutions 255,096 145,195 75.7 including: – own securities - - - ... (d) issued by others 98,055 146,270 - 33.0 60 -SHARES, QUOTAS AND OTHER EQUITY SECURITIES 147,186 142,958 3.0 70 -EQUITY INVESTMENTS 92,389 223,033 - 58.6 a) carried at equity 57,364 192,651 - 70.2 b) others 35,025 30,382 15.3 80 -INVESTMENTS IN GROUP COMPANIES 131,014 102,786 27.5 a) carried at equity 131,014 102,786 27.5 b) others - - - ... 90 -POSITIVE DIFFERENCE ARISING FROM CONSOLIDATION 99,636 46,129 … 100 -POSITIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 16,810 76,693 - 78.1 110 - INTANGIBLEINTANGIBLE FIXEDFIXED ASSETSASSETS 85,941 30,231 … including: – start-up costs 4,581 6,748 - 32.1 – goodwill 63,636 6,937 … 120 - TANGIBLE FIXED ASSETS 687,075 537,117 27.9 140 - OWN SHARES 31,621 5,055 … (nominal value: 22,805) 150 - OTHER ASSETS 417,209 407,872 2.3 160 - ACCRUED INCOME AND PREPAID EXPENSES: 104,664 73,374 42.6 (a) accrued income 98,101 69,883 40.4 (b) prepaid expenses 6,563 3,491 88.0 including: – discount on bonds issued 1,239 751 65.0 TOTAL ASSETS 12,801,497 10,471,079 22.3
210 LIABILITIES AND STOCKHOLDERS’ EQUITY Change % (millions of Euro) 31/12/00 31/12/99 2000 10 - AMOUNTS OWED TO CREDIT INSTITUTIONS: 2,213,415 1,562,625 41.6 (a) repayable on demand 156,040 22,577 … (b) with agreed maturity dates or periods of notice 2,057,375 1,540,048 33.6 2020 --AMOUNTS OWED TO CUSTOMERS: 5,010,829 3,991,787 25.5 (a) repayable on demand 4,412,809 3,675,088 20.1 (b) with agreed maturity dates or periods of notice 598,020 316,699 88.8 3030 --DEBTS EVIDENCED BY CERTIFICATES: 3,120,359 2,610,257 19.5 (a) bonds 2,498,067 1,986,802 25.7 (b) certificates of deposits 540,886 573,856 - 5.7 (c) other 81,406 49,599 64.1 4040 --FUNDS MANAGED ON BEHALF OF THIRD PARTIES 232 230 0.9 5050 -- OTHER LIABILITIES 427,606 364,415 17.3 6060 --ACCRUED EXPENSES AND DEFERRED INCOME: 155,807 106,067 46.9 (a) accrued expenses 117,746 80,780 45.8 (b) deferred income 38,061 25,287 50.5 7070 --RESERVE FOR TERMINATION INDEMNITIES 82,665 62,324 32.6 8080 --RESERVES FOR RISKS AND CHARGES 425,861 396,479 7.4 (a) reserves for pensions and similar commitments 303,854 296,910 2.3 (b) reserves for taxation 92,498 87,528 5.7 (c) consolidation reserves for future risks and charges - - - ... (d) other reserves 29,509 12,041 … 9090 --RESERVES FOR LOAN LOSSES 4,101 2,582 58.8 100 - RESERVES FOR GENERAL BANKING RISKS 5,165 5,165 - 130 - NEGATIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD 1,980 1,377 43.8 140 - MINORITY INTERESTS 18,404 12,847 43.3 150 - CAPITAL STOCK 1,017,510 1,017,510 - 160 - ADDITIONAL PAID-IN CAPITAL 124,656 154,518 - 19.3 170 - RESERVES 104,596 108,944 - 4.0 (a) legal reserve 36,900 27,471 34.3 (b) reserve for purchase of treasury stock 31,621 5,055 … (c) statutory reserves - - - ... (d) other reserves 36,075 76,418 - 52.8 180 - REVALUATION RESERVES 8,050 8,050 - 200 - NET INCOME 80,261 65,902 21.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 12,801,497 10,471,079 22.3
GUARANTEES AND COMMITMENTS
10 -GUARANTEES GIVEN 1,179,476 948,396 24.4 including: – acceptances 4,413 8,042 - 45.1 – other guarantees 1,175,063 940,354 25.0 20 -COMMITMENTS 831,791 429,596 93.6 including: – repurchase agreements - - - ...
211 Purchase of 21 branches from Banco di Sicilia CONSOLIDATE EXPLANATORY At the end of the year, the Bank acquired 21 branches NOTES from the Banco di Sicilia situated in the provinces of Enna and Palermo. The effects of the acquisition for 2000 were exclusively on the balance sheet as the agreement came into force 1/1/2001. INTRODUCTION The value of assets purchased are as follows: The accounting principles adopted in these consolidated statements are those foreseen by customers loans 113.0 bn Legislative decree 87/92 and relevant Bank of Italy amounts owed by banks and circulars (ruling of 30/7/92 and subsequent other credit institutions 272.4 bn amendments). (corresponding to imbalance of credit values granted) The Balance Sheet and Income Statement show customer deposits 332.9 bn amounts in millions of Italian lire. Comparison is made securities issued 49.2 bn to the periods ending 30/6/99 and 31/12/99. indirect deposits (OFIA) 390.8 bn Captions which show no amounts for the periods have been omitted. With regards to balance sheet caption 50 “ bonds and other fixed-income securities”, data given at items Valuation of assets and liabilities expressed “issued by banks” and “issued by others” have been in other EMU countries’ currencies reclassified in order to aid comparison between the statements for 2000 and those at 30/6/99 and At 31st December 1998, assets, excluding equity 31/12/99. investments, liabilities and off-balance sheet Amounts are also expressed in euro applying the transactions are expressed in the currencies of the lira/euro translation rate in force from 1/1/99, as EMU-member countries or indexed to the same in requested by CONSOB recommendation no. accordance with the relevant areas of article 21, 98083971 of 26/10/98. Legislative decree 213/98, applying the exchange Amounts given in the balance sheet and income translation rates fixed at 31/12/98 and pursuant to statement tables are also expressed in millions of Italian articles 4 and 5 of Community regulation no. 1103/97. lire unless otherwise stated. Captions which show no Positive and negative exchange translation differentials amounts for the periods under examination have been were recorded at caption 60 “ Gains (losses) from omitted. Further information has been provided where financial transactions” in the case of non substantial judged appropriate. amounts. Accounting principles for the period are aligned to Equity investments in currencies of EMU-member those used for the preparation of the 1999 Annual countries or indexed to the same were evaluated in Report. accordance with the relevant areas of article 21, The data present in this consolidated report at Legislative decree 213/98, applying the rate in force at 31/12/00 are not fully aligned with those of previous the time of purchase. The holding in Frankfurter accounting periods (periods ending 30/6/99 and Bankgesellschaft AG (previously Bankenunion AG), 31/12/99) as at 31/12/99 only Banca del Monte di however, was evaluated according to the equity Lucca was fully consolidated whilst Cassa di Risparmio method with the exchange-rate conversion being that di Savona and its subsidiaries were accounted for foreseen by the above-mentioned Legislative decree under the equity method. With Bank of Italy 213/98. authorisation received on 17/4/00, the Savona bank At 30/6/00, positive exchange translation differentials and its subsidiaries are fully consolidated in the present relating to equity investments not recorded at caption accounting period. 60 amounted to Lit. 20 million. These equity Full consolidation of Cassa di Risparmio di Savona investments (excluding Frankfurter Bankgesellschaft and subsidiaries entailed the transfer from caption 100 AG) are expressed in the currencies of the EMU- “Positive differences arising from the application of the member countries or indexed to the same in equity method” to caption 90 “Positive differences accordance with the relevant areas of article 21, arising from consolidation” of Lit. 113,140 million, Legislative decree 213/98, applying the rate in force at which will continue to be amortised over 20 years. A the time of purchase. specific liabilities caption relating to third party assets amounts to Lit. 13, 163 million. The Board of Directors’ report compares the results at 31/12/00 with pro-forma data for 31/12/99 and 30/6/99. Basis of consolidation
212 The Consolidated Financial Statements contains Statements in foreign currency are those pertaining financial data relative to Banca Carige and all its exclusively to companies evaluated according to the subsidiaries operating directly or indirectly in banking, equity method. Exchange-rate translation differences at financial and non-financial services. the end of the first six months appear in the At 30/6/00, Cassa di Risparmio di Savona and its consolidated reserves. subsidiaries, Ligure Leasing and Carisa Immobiliare, were fully consolidated for the first time. At 31/12/99 Reference date the financial statements of the same were accounted for under the equity method. Financial data from those statements used for The following companies were fully consolidated: consolidation are as at 31/12/00. The accounting of the associated companies under the equity method Company Activity Equity ratio makes reference to the most recently approved balance % sheet. Galeazzo Srl real estate 100.000 Columbus Carige SpA real estate 100.000 Consolidation principles Immobiliare E. Vernazza real estate 100.000 SpA Subsidiaries, excluding those operating in insurance, Ligure Leasing SpA finance 95.901 are fully consolidated. Therefore, assets, liabilities, off- Cassa di Risparmio di bank 95.901 balance sheet items as well as receivables and Savona SpA payables are included. The insurance companies were accounted for under the equity method. Immobiliare Carisa SrL Real estate 95.901 Consolidated holdings in subsidiaries are offset by the corresponding proportion of the subsidiaries’ carrying Centro fiduciario SpA Trust company 85.460 value of net assets recorded in the consolidated Banca del Monte di Lucca bank 51.000 statement for the first time. In the event of differences SpA emerging, these are put down to the subsidiaries’ assets and liabilities. Differences for the year resulting from consolidation pertaining to third parties are recorded at a specific caption. In accordance with the The following companies were accounted for by the Bank of Italy’s instructions regarding consolidated equity method: statements, positive differences arising from consolidation are partially offset by the relative Company Activity Equity revaluation and credit risk reserve provisions of those ratio % subsidiaries to which they refer. In addition, these are Carige Vita Nuova SpA insurance 92.809 written down against negative differences stemming Levante Norditalia Assicurazioni insurance 87.014 from consolidation until the two amounts match. SpA The remaining amount is considered goodwill and is Frankfurter Bankgesellschaft AG banking 47.500 charged to assets at “Positive differences arising from Autostrada dei Fiori SpA other 20.456 consolidation”. Subsequent to the year in which Eptaconsors SpA finance 20.240 consolidation diferences were calculated, changes pertaining to the Group in subsidiaries’ net assets are recorded in the consolidated statements at the relevant During 2000, Banca Carige increased its holding in caption under liabilities; changes relative to third Carige Vita Nuova to 92.80% as a result of the parties are recorded at caption 140 “Minority purchase of a further 40% from Levante Norditalia interests”. SpA. Value adjustments and provisions to reserves carried The consolidation of Levante Norditalia Assicurazioni out in accordance with tax regulations were written and Carige Vita Nuova was carried out by applying the down; relevant deferred tax was covered by provisions. equity method in the light of the nature of insurance Significant intra-subsidiary relations have been companies’ activities and, subsequently, their financial eliminated. statements. The accounting principles applied in the preparation of financial statements of those companies consolidated Statements referred to were brought into line in the case of significant differences being present at consolidation. The consolidated balance sheet was prepared by using In particular, the securities portfolio of Banca del the financial statements of the consolidated companies Monte di Lucca, in which Banca Carige has a 51 % st at 31 December 2000 reclassified and adjusted to holding acquired on 17th November 1999, is evaluated conform to regulations in force and the Group’s according to the LIFO method. However, this does not accounting principles. affect the asset base or economic structure of the Statements in foreign currency Group. The value of insurance companies and those in which Banca Carige has a significant holding was calculated
213 by applying the equity method. In the case of a Budget Law), with the subsequent charges, all or in company in which Banca Carige has a significant part, to be covered by the State or public bodies. interest having itself to prepare a consolidated At 31/12/00 the interest rate relative to these statement, consolidated net assets were used as the mortgages had yet to be re-negotiated and the system- basis for calculation. wide average rate of interest had still to calculated (the Positive differences arising from the increase in value of provisions of the Law came into effect on 1/7/99). In the investment are recorded under net equity as “equity the light of this, provisions to a specific reserve were investments” for the share that refers to fixed assets, made of Lit. 2,728 million corresponding to estimated and at “Positive differences arising from application of charges for the period 1/7/99 to 31/12/00. the equity method” for the part related to goodwill. Estimated charges for 2001 are around Lit. 1.5 bn. Negative differences are classified under “Negative differences arising from application of the equity c) Fixed rate mortgages (Law decree method”. 394/00) Positive or negative changes in the value of the equity investment arising in the first six months of the year are Law decree 394 of 29/12/2000 foresees the re- accounted for. This change is recorded at caption 170 negotiation of specific categories of fixed-rate loans of the consolidated income statement “Profit (loss) on with the stipulation of a new rate of interest. The re- investments carried at equity”. negotiation, to be applied to mortgage instalments after 2nd January 2001, will generate reduced interest Balance sheet effects of Banca Carige’s income of around Lit. 2 bn. increased shareholding in Carige Vita Nuova SpA d) Capitalisation of interest due (Constitutional Court Sentence 425 of During 2000, Banca Carige increased its holding in 9/10/00) Carige Vita Nuova to 92.80% as a result of the purchase of a further 40% from Levante Norditalia The Constitutional Court’s ruling number 425 of SpA. 9/10/00 declared illegitimate the contents of article 25, Legislative decree 344/99. The article excluded from Consob request for information (Consob liability to legal action those clauses between banks communication no. 1011405 dated and customers relating to capitalisation of interest due 15/2/2001) signed after the coming into effect of the Inter- ministerial Committee for Credit and Saving’s Below is presented the information Italian banks are deliberation of 22/4/00, enacting Legislative decree required to supply to Consob pursuant to article 114, 344/99. legislative decree 58/98.. The Constitutional Court confined its judgement exclusively to a criticism of the Government in its a) Tax relief foreseen by articles 22 and 23 enactment of the above-mentioned law. of Legislative decree 153/99 In the light of the above and the inevitability of further legislation on the matter the Group’s banks have In these financial statements, as in previous years, declined the few requests they have received from income tax for the year was calculated also on the customers for the return of interest paid over ten years basis of relief for non structural mergers as foreseen by as a result of the quarterly capitalisation of bank the above-stated legislation. interest income. As a result, for 1999 and 2000 there were reduced tax The Group’s banks do not view the Constitutional liabilities of, respectively, Lit. 472 million and Lit. 2,544 Court’s sentence as an acceptance of the intrinsic million. reasonableness of article 25, Legislative decree 344/99 In relation to this legislation, the Treasury and Finance but merely as a criticism of the Government’s Ministries in their press statement of 3/4/00 made it enactment of amnesty-type legislation which goes known that the tax relief foreseen by Law 461/98 and beyond the confines of its powers as stated by Law Legislative decree 153/99 was suspended in the light of 128/98. a European Commission inquiry into the question of The sentence appears, rather than a declaration of the such relief being in the form of State aid as proscribed illegitimacy of the procedure of capitalisation of by article 88, paragraph 2 of the European Community interest, proof of the need for new legislation to resolve treaty. the question. b) Special rate mortgages (Law 133/99 and SECURITISATION OF CREDIT article 145 of Law accompanying 2001 Budget) At the end of the year, in line with the provisions of Law 130/1999, Banca Carige securitised without recourse a Article 29 of Law 133/99 foresees the re-negotiation of part of its bad loans portfolio. mortgage interest rates at a reference rate equal to the The gross balance sheet total of customer loans was Lit. system-wide average (as defined by article 145 of the 566.4 bn, classified as bad loans at 30/11/00 and
214 backed either fully or in part by voluntary or legally- granted to ARGO Finance One which is recorded at enforced guarantees. caption 40, ‘Loans and advances to customers’ under The ownership of the loans was transferred on item ‘ other non current account loans’. 21/12/00 (with effect from 23/12/00) to ARGO After the subscription of class A and B bonds on the Finance One Srl of Milan, a special purpose vehicle part of institutional investors, and Class C on the part established pursuant to Law 130/99 and enrolled in the of Banca Carige on 27/3/2001 the credit was re-paid. general list of companies held by the Italian Exchange The reduction in the value of the loans ceded (Lit. Office as foreseen by article 106, Legislative decree 120.6 bn) was recorded at caption 130 ‘Reserves and 385/93; the vehicle will be used for one or more issue premium’ in line with article 6, Law 130/99. The securitisation transactions as foreseen by article 3 of the amount is entered in the income statement over five above-mentioned Law 130/99. years in equal instalments starting from 2000, the year The ownership of ARGO Finance One at present is as in which the loans were ceded. follows: 95% holding on the part of a Dutch-registered Potential risks for Banca Carige as a result of the foundation; 5% holding on the part of Columbus operation are represented by the class C bonds, the Carige Immobiliare, a subsidiary of the Banca Carige line of credit, the interest rate cap, and guarantees Group. granted to the holders of class B bonds. These risks will ARGO Finance One acquired the credits by a bond be evaluated by constant monitoring of the actual issue in three classes (A, B and C) for Lit. 165.3 results of recovery in comparison to those scheduled. million. The class C bonds fully subscribed by Banca Carige The company also proposed the further issue of C class have been included in the Bank’s investment securities (asset backed) bonds totalling euro 165.3 million to portfolio. cover issuance-related costs. The recovery of the securitised credit will be carried out These financialfinancial statementsstatements were audited by on the part of ARGO by Banca Carige according to KPMG SpA. The selection of the Bank’s auditors for the the terms present in a specific service contract between period 2000-2002 was approved by the Shareholders’ the parties. Meeting of 27/4/00 pursuant to Legislative decree The funds recovered will be destined exclusively for the 58/90. The duties of the auditors for the period are the securities issued and related costs. auditing of the Bank’s financial statements, the The bonds issued by ARGO Finance One are as consolidated financial statements, and a limited review follows: of the half yearly report at 30 June. Class A ‘Senior’ bonds amounting to euro 40 million, floating rate indexed to Euribor at 6 months + 0.60%, twice-yearly coupon; Class B ‘Mezzanine’ bonds amounting to euro 70 million, floating rate indexed to Euribor at 6 months + 0.45%, twice-yearly coupon; Class C ‘Junior’ bonds amounting to euro 56.5 million, fixed rate 4% plus variable remuneration, twice-yearly coupon. The senior and mezzanine securities were placed with institutional investors and were assigned the following rating:
Moody’s Fitch IBCA Class A Aaa AA Class B Aa1 AA
Both tranches are listed on the Luxembourg stock market The lowest ranking class C bonds are fully subscribed by Banca Carige. The class A and B bond issues are further backed by credit line granted by Banca Carige to the special purpose vehicle of euro 15 million in case of temporary liquidity difficulties arising from late payment, in addition to a limited recourse bond issue of euro 84 million. ARGO Finance One has also purchased an interest rate cap from Banca Carige with premium paid at the moment of the issuing of the bonds. With regards to the accounting of this securitised credit operation, at 31/12/2000 a credit of Lit. 320 bn was
215 The original value of the securities is reinstated when PART A the reasons for writing down cease to apply. ACCOUNTING PRINCIPLES The possible transfer of securities from the investment to trading securities portfolio is accounted for at book price on the transaction date calculated according to the evaluation criteria applied to the portfolio of origin. SECTION 1 Securities transferred and still present in the portfolio at The Accounting Policies are in compliance with law the balance sheet date are valued according to the decree 87/92 and the Bank of Italy’s provisions of evaluation criteria applied to the portfolio to which they 30/7/92 and subsequent modifications and are the are destined. same as those used in 1999, with the exception of the Off balance sheet operations, excluding handling of deferred taxation, in accordance with the those in currency. Unsettled securities transactions Bank of Italy’s ruling of 3/8/99. are evaluated according to the criteria of the portfolio Where foreseen by legislation, the policies have been to which they are destined. Unsettled trading securities agreed on by the Board of Statutory Auditors. transactions are evaluated accordingly: LOANS, GUARANTEES AND COMMITMENTS a) with regards to commitments to purchase and Loans are stated at their estimated realizable value and commitments to sell which have the same underlying are determined according to debtors’ solvency and the securities with the same nominal value, any positive debt-paying difficulty of the debtor’s home country. difference between the settlement price of the The valuation of loans is made under the application commitment to purchase and the settlement price of the of either an analytic or lump-sum method. commitment to sell is recorded in the income statement; The interest on overdue loans is adjusted by the portion of loans considered to be irrecoverable. b) the residual commitments to purchase are evaluated Reserves for loan losses, recorded under “Liabilities”, at either settlement price or market price, have been created exclusively to offset contingent credit whichever is lower; risks. c) the residual commitments to sell are evaluated at Reserves for guarantees and commitments, recorded either settlement price or book value, whichever is under “Liabilities” have been created to offset this lower. particular kind of risk. Derivative contracts on securities, interest rate etc., are evaluated accordingly: SECURITIES PORTFOLIO AND OFF-BALANCE a) contracts related to underlying equity invest- SHEET TRANSACTIONS EXCLUDING THOSE IN ments are evaluated at cost and written down in the CURRENCY event of long-term deterioration of the is-suer's InvestmentInvestment securities.securities. Investment securities are solvency; valued at cost, adjusted on an accruals basis for the b) trading derivatives contracts are evaluated at difference between cost and their redemption at either cost or market value, whichever is lower. Market maturity and includes unamortized issue premiums or value of contracts is that quoted at the last day of the discounts. business year. Those contracts which are not quoted on In the event of long-term deterioration of the issuers’ organised markets but which can be evaluated solvency, the securities are written down. according to official parameters, are evaluated at The original value of investment securities is reinstated replacement cost at the last day of the business year; when the reasons for writing down cease to apply. c) economically-linked trading contracts, which Trading securities. are closely correlated both technically and financially, – trading securities quoted on organised markets are are evaluated in the same way. The losses which valued either at purchase price or the average exceed connected gains are recorded in the income market price for the last month of the year, statement; whichever is lower; d) hedging contracts on trading securities are – trading securities not quoted on organised markets evaluated in the same way as the underlying: market are valued at purchase price adjusted for market value is the average of prices and parameters recorded trends and issuer solvency. in the last month of the business year. Losses which The purchase price, determined according to the exceed gains on securities or gains which correspond to principle of daily weighted average, includes losses on securities are recorded in the income adjustments for the relevant annual quota of issue statement; premium or discount accumulated during the period e) hedging contracts on assets and liabilities the securities are held. which are evaluated at cost are in turn evaluated at cost. Securities held at 1/12/91 and still in portfolio at year end 1999 are valued at cost defined as the value of EQUITY INVESTMENTS transfer to Banca Carige at 1/12/91 and adjusted for The Bank’s stock rights in relation to its subsidiaries are issue premium or discount pursuant to included under holdings. These rights, in the form of securities or not, are held for investment. Legislative decree 719/94 and subsequent changes. Holdings, both substantial and those in Group subsidiaries, are valued at purchase cost or sub- scription as according to Law 218/90. The cost is
216 written down to reflect any permanent loss in value. The straight-line basis. Start-up and improvement costs in original value is reinstated when the reasons for writing addition to research and development costs are down ceased to apply. amortised over a period not exceeding five years. Goodwill arising from the merger into Banca Carige of FOREIGN CURRENCY ASSETS AND LIABILITIES Istituto di Credito Fondiario della Liguria SpA, INCLUDING OFF-BALANCE SHEET Mediocredito Ligure SpA, Columbus Leasing Spa and TRANSACTIONS Columbus Domestic SpA is amortized, with the Statutory Auditors’ consent, over eight years starting Assets, excluding equity investments, liabilities and off- from 1/7/94. The period was calculated on the basis of balance sheet transactions expressed in the currencies residual goodwill stemming from the merger. of the EMU-member countries or indexed to the same Goodwill paid related to the branches acquired from are valued in accordance with the relevant areas of Banco di Sicilia (contract stipulated on 28/12/00 with article 21, Legislative decree 213/98, applying the effect 1/1/01) will be amortised over twenty years from exchange translation rates fixed at 31/12/98 and 2001, a period corresponding to the average period of pursuant to articles 4 and 5 of Community regulation goodwill calculated for the network acquired. no. 1103/97. Equity investments in currencies of EMU-member PAYABLES countries or indexed to the same are valued in Payables are recorded at face value. accordance with the relevant areas of article 21, Legislative decree 213/98, applying the rate in force at TERMINATION INDEMNITY the time of purchase, excluding Frankfurter Termination indemnity is in accordance with current Bankgesellschaft AG (previously Bankenunion AG). legislation. Assets, excluding equity investments, and liabilities expressed in currencies other than those of EMU- SUPPLEMENTARY PENSION FUND member countries or indexed to the same are valued The subsidiaries’ supplementary pension funds are applying the spot rate at 30/6/2000. managed according to regulations specific to each Equity investments expressed in currencies other than company. those of EMU-member countries are valued according to the rate in force at the time of purchase. ACCRUALS AND DEFERRALS Off-balance sheet transactions expressed in currencies Accruals and deferrals are calculated in accordance other than those of EMU-member countries are valued: with the matching principle. – at the spot rate as of the last business day of the year in the case of unsettled spot contracts; – at the forward exchange rate as of the last RESERVES FOR RISKS AND CHARGES - RE- business day of the year for maturities corresponding to SERVES FOR TAXATION those of the contracts being valued, in the case of Tax reserves stem from provisions for direct taxation, forward transactions. deferred tax liabilities, indirect taxation and other In the case of on-balance sheet assets and liabili-ties unforeseen events such as risk to liabilities after linked to off-balance sheet assets and liabilities, off- litigation. balance sheet items are accounted for in a manner similar to the accounting of on-balance sheet items. OTHER TAX ASPECTS - DEFERRED TAX: TANGIBLE FIXED ASSETS POSITIVE AND NEGATIVE EFFECTS Tangible assets are recorded at purchase price plus The calculation of deferred tax is made on the basis of related charges, and include leased assets and those the equity method with reference to the timing assets that are to be leased. differences existing between the value attributed to an The value of tangible fixed assets includes revaluation asset or liability under accounting criteria and the in accordance with Laws 575/75, 72/83, 413/91 (only value attributed to the same for the calculation of tax. for some assets transferred by merged companies) and Tax advanced is recorded under assets subject to the with reference to capital gains, Law 218/90. condition that, for prudential reasons, there is a Advances to supplies for the purpose of tangible fixed reasonable expectation of realising, over a period of assets are included under tangible fixed assets. five years, taxable income sufficient for its recovery. Depreciation is determined by using the straight-line The recording of liabilities for taxes payable in the method over the useful life of each category. future is subject to the condition that there is a Objects of art, being assets which conserve if not possibility of the liability to tax occurring. increase their value, are not amortized. The treatment of deferred tax in these financial Included in this category are leased assets, in line with statements is in accordance with the Bank of Italy's the equity method. instructions dated 3/8/99. INTANGIBLE FIXED ASSETS POSITIVE CONSOLIDATION AND NET EQUITY Intangible fixed assets are, in those cases foreseen by DIFFERENCES relevant legislation, recorded with the consent of the Board of Statutory Auditors and are amortized on a
217 Positive consolidation and net equity differences are amortised over five years. Positive net equity differences relative to majority holdings in insurance subsidiaries are amortised with the consent of the Board of Statutory Auditors over a longer period of time in the light of the nature of insurance companies' activities and the reasonable expectation of slower depreciation. Consequently, positive net equity differences stemming from the consolidation of the insurance subsidiaries Levante Norditalia Assicurazioni and Carige Vita Nuova are amortised over fifteen years. Differences respectively of net equity and consolidation relative to Cassa di Risparmio di Savona and Banca del Monte di Lucca are amortised over twenty years.
SECTION 2
TAX-RELATED ADJUSTMENTS AND PROVISIONS
2.1 Tax Adjustments Not carried out.
2.2 Tax Provisions Not carried out.
218 PART B CONSOLIDATED BALANCE SHEET
SECTION 1
LOANS
The consolidated loans portfolio, summarized in this section, amounts to Lit. 15,771,100 million and is analysed below:
31/12/00 31/12/99 million % million % – Cash in hand, balances with central banks and post offices (caption 10) 251.475 1,6 161.411 1,3 – Loans and advances to credit institutions (caption 30) 1.920.190 12,2 1.263.179 10,2 – Loans and advances to customers (voce 40) 13.599.435 86,2 10.912.180 88,5 Total 15.771.100 100,0 12.336.770 100,0
Change 31/12/00 31/12/99 absolute % CAPTION 10 "CASH IN HAND, BALANCES WITH CENTRAL BANKS AND POST OFFICES” 251,475 161,411 90,064 55.8 Cash 249,164 158,865 90,299 56.8 Promissory notes of Bank of Italy and postal orders and cheques 2,044 2,124 -80 -3.8 Deposits with – central banks - - - - – post offices 267 422 -155 -36.7 Total 251,475 161,411 90,064 55.8 Change 31/12/00 31/12/99 absolute % 1.1 CAPTION 30 "LOANS AND ADVANCES TO CREDIT INSTITUTIONS" 1,920,190 1,263,179 657,011 52.0 (a) deposits with central banks 145,831 80,307 65,524 81.6 (b) bills eligible for refinancing by central banks - - - - (c) loans for leased assests - - - - (d) repurchase agreements - - - - (e) loans of securities - - - -
220 Caption 30 detail by technical form is the following:
Change 31/12/00 31/12/99 absolute % Nominal value Deposits with central banks 145,831 80,307 65,524 81.6 – Compulsory reserves 145,831 80,307 65,524 81.6 Deposits with banks 1,787,488 1,203,532 583,956 48.5 – Deposits 1,240,823 845,538 395,285 46.7 – Discounted notes 0 39,367 -39,367 … – Overdraft facilities 353,781 116,382 237,399 … – Loans (Financial backing) 167,805 176,846 -9,041 -5.1 – Long term loans 429 439 -10 -2.3 – Other 24,650 24,960 -310 -1.2 1,933,319 1,283,839 649,480 50.6 (–) Total specific allowances 13,129 20,660 -7,531 -36.5 Total 1,920,190 1,263,179 657,011 52.0
Change 31/12/00 31/12/99 absolute % 1.2 CAPTION 40 “LOANS AND ADVANCES TO CUSTOMERS” 13,599,435 10,912,180 2,687,255 24.6 (a) bills eligible for refinancing by central banks - - - … (b) loans for leased assets 36,080 8,633 27,447 … (c) repurchase agreements - - - - (d) loans of securities - - - -
The caption includes Lit. 112,961 million related to the branches purchased by Banca Carige from Banco di Sicilia. Sub-caption “Other non-current account loans” includes the credit extended to Argo Finance One (Lit. 320 bn) during the course of the securitisation operation carried out by Banca Carige. Caption 40 detail by technical form is the following:
Change 31/12/00 31/12/99 absolute % Nominal value Discounted notes 82,594 72,959 9,635 13.2 Advances with recourse 487,203 403,341 83,862 20.8 Current accounts 2,468,886 1,740,001 728,885 41.9 Other non-current account loans 3,534,880 2,867,988 666,892 23.3 Loans backed by pledged assets 27,286 28,792 -1,506 -5.2 Mortgage loans 6,465,192 5,022,125 1,443,067 28.7 Salary backed loans 15,488 10,107 5,381 53.2 Consumer credit loans 10,961 10,240 721 7.0 Factoring 217,241 210,485 6,756 3.2 Loans for leased assets 36,080 8,633 27,447 … Bad loans 487,359 767,284 -279,925 -36.5 Repurchase agreements - - - - Other 87,915 119,548 -31,633 -26.5 13,921,085 11,261,503 2,659,582 23.6 (–) Total specific allowances 321,650 349,323 -27,673 -7.9 – Bad loans 259,930 297,864 -37,934 -12.7 – Other 61,720 51,459 10,261 19.9 Total 13,599,435 10,912,180 2,687,255 24.6
Allowances were deducted from gross value of loans as shown:
221 31/12/00 31/12/99 – analytic allowances 302,534 339,763 – lump-sum allowances 19,116 9,560 - country risks 466 405 - other 18,650 9,155 Total 321,650 349,323
Change 31/12/00 31/12/99 absolute % 1.3 SECURED LOANS TO CUSTOMERS 7,976,192 7,037,744 938,448 13.3 (a) by mortgages 4,650,040 4,268,450 381,590 8.9 (b) by pledges on: 315,839 338,714 -22,875 -6.8 1. Cash deposits 9,210 24,488 -15,278 -62.4 2. Securities 270,282 278,370 -8,088 -2.9 3. Other valuables 36,347 35,856 491 1.4 (c) by guarantees from: 3,010,313 2,430,580 579,733 23.9 1. Governments 157 244 -87 -35.7 2. Other public entities 17,232 16,650 582 3.5 3. Banks 35,612 40,034 -4,422 -11.0 4. Other operators 2,957,312 2,373,652 583,660 24.6
This detail does not include loans to government and public bodies.
Change 31/12/00 31/12/99 absolute % 1.4 BAD LOANS(including interest on overdue loans) 227,429 469,420 -241991 -51,6
The amount represents the total exposure to customers in a state of insolvency or similar, with the following detail:
31/12/00 31/12/99 Specific Net Gross Specific Net Gross value allowances value value allowances value 365,903 138,474 227,429 565,774 96,354 469,420 - Principal 14,604 9,576 5,028 2,116 589 1,527 - of which bad leasing loans 121,456 121,456 - 201,510 201,510 - - Interest 6,067 6,067 - 842 842 - - of which bad leasing loans ------Total 487,359 259,930 227,429 767,284 297,864 469,420
Interest on overdue bad loans was fully written down, in line with prudential criteria.
Change 31/12/00 31/12/99 absolute % 1.5 INTEREST ON OVERDUE LOANS 19,898 19,113 785 4.1 (a) bad loans - - - - (b) other loans 19,898 19,113 785 4.1
Caption (a) "bad loans" is net of interest on overdue loans for Lit. 121,456 million which is completely written down. Caption (b) “Other loans” includes: interest on overdue This caption is net of Lit. 2,559 million in interest on non- performing loans recorded and written down in 2000 and Lit 99,046 million in credits attributable to tax-payers defaulting on interest arrears relative to the ex-Tax Collection Service, which have been written off.
222 The following tables illustrate the situation of credits at risk and related provisions as required by the Bank of Italy in its letter dated 14/12/98 with regards to the need for increased transparency in bank balance sheets.
Cash credits at 31/12/2000
Customers
Specific CATEGORIES/BALANCES Gross value Net value allowances A. Credits at risks 900,160 316,561 583,599 A.1 Bad loans 494,504 259,930 234,574 A.2 Watchlists 387,857 53,356 334,501 A.3 Credits undergoing restructuring 242 - 242 A.4 Restructured loans 15,727 2,809 12,918 A.5 Non-guaranteed credits towards countries at risk 1,830 466 1,364 B. Performing credits 13,653,951 5,088 13,648,863
The credits presented in the table refer to balance sheet asset caption 40 "Loans and advances to customers" and to credits related to leasing transactions which totalled Lit. 633,027 million at 31/12/00. In particular, Lit. 7,145 million is in the form of bad loans and is covered for Lit. 2,357 million by liabilities caption 80c "Reserves for loan losses - other reserves". Leasing transactions are included at assets caption 120 " Tangible assets" for a total of Lit. 676,451 million. Banks
Specific CATEGORIES/BALANCES Gross value Net value allowances A. Credits at risks 42,734 13,129 29,605 A.1 Bad loans - - - A.2 Watchlists - - - A.3 Credits undergoing restructuring - - - A.4 Restructured loans - - - A.5 Non-guaranteed credits towards countries at risk 42,734 13,129 29,605 B. Performing credits 1,890,585 - 1,890,585
Doubtful loans
Customers
Loans subject to Rescheduled Country risk non- CATEGORIES/BALANCES Bad loans Watchlists rescheduling loans guaranteed loans A. Total opening exposure at 31/12/99 772,102 372,245 1,228 21,263 1,375 A.1 of which: interest on overdue loans 201,510 13,247 - - - B. Increases 483,740 268,784 242 63 528 B.1 ex-performing loans 106,816 158,764 242 - 2 B.2 interest on overdue loans 46,228 3,455 - - - B.3 transfer from other doubtful loan categories 156,398 365 - - - B.4 other increases 174,298 106,200 - 63 526 C. Decreases 761,338 253,172 1,228 5,599 73 C.1 re-performing credits - 46,024 1,228 386 - C.2 write offs 352,599 4,062 - 61 - C.3 payments received 79,970 29,036 - - 25 C.4 gains from ceding 320,599 285 - - 37 C.5 transfer to other doubtful loan categories 365 152,026 - 4,372 - C.6 other decreases 3,946 21,739 - 780 11 D. Total closing exposure at 31/12/2000 494,504 387,857 242 15,727 1,830 D.1 of which: interest on overdue loans 121,456 12,034 - - -
I Sub-caption B4 “Increases - other increases” includes the amounts stemming from the first full consolidation of the companies belonging to the former Cassa di Risparmio di Savona Group (total opening exposure) and, in
223 particular, bad loans totalling Lit. 144,117 million, watchlist positions of Lit. 68,278 million and non-guaranteed country risk loans amounting to Lit. 308 million. Sub-caption C4 “Decreases - gains from ceding” includes Lit. 320 bn relating to the securitisation of bad loans carried out by Banca Carige; sub-captionc2 “Decreases - write offs” includes the difference between the book value of credits and the amount received from their ceding (Lit. 120, 585 million).
Banks
Country risk Loans subject to Rescheduled non- CATEGORIES/BALANCES Bad loans Watchlists rescheduling loans guaranteed loans A. Total opening exposure at 31/12/99 - - - - 55,069 A.1 of which: interest on overdue loans - - - - - B. Increases - - - - 1,608 B.1 ex-performing loans - - - - 677 B.2 interest on overdue loans - - - - - B.3 transfer from other doubtful loan categories - - - - - B.4 other increases - - - - 931 C. Decreases - - - - 13,942 C.1 re-performing credits - - - - - C.2 write offs - - - - 4,489 C.3 payments received - - - - 8,373 C.4 gains from ceding - - - - - C.5 transfer to other doubtful loan categories - - - - - C.6 other decreases - - - - 1,080 D. Total closing exposure at 31/12/2000 - - - - 42,735 D.1 of which: interest on overdue loans - - - - -
Total value adjustments
Customers Country risk non- Loans subject to Rescheduled Performing CATEGORIES/BALANCES Bad loans Watchlists guaranteed rescheduling loans loans loans A. Total opening adjustments at 31/12/99 297,864 43,920 - 7,134 405 - A.1 of which: interest on overdue loans 201,510 2,876 - - - - B. Increases 321,209 38,157 - 180 61 12,050 B.1 adjustments 107,284 24,187 - 180 61 1,918 B.1.1 of which: interest on overdue loans25,644 1,203 - - - 10 B.2 amounts from credit risk fund 5,589 - - - - 25 B.3 transfer from other loan categories 32,300 243 - - - 22 B.4 other increases 176,036 13,727 - - - 10,085 C. Decreases 359,143 28,721 - 4,505 - 6,962 C.1 recoveries stemming from evaluation 396 298 - 71 - - C.1.1 of which: interest on overdue loans ------C.2 recoveries stemming from payments received9,187 799 - - - 16 C.2.1 of which: interest on overdue loans 6,855 74 - - - 16 C.3 write offs 349,295 4,719 - 61 - 1,877 C.4 transfer to other loan categories 239 22,889 - 4,373 - 5,064 C.5 other decreases 26 16 - - - 5 D. Total closing adjustments at 31/12/2000 259,930 53,356 - 2,809 466 5,088 D.1 of which: interest on overdue loans 121,456 784 - - - 15
Sub-caption B1 “Increases - adjustments” includes Lit. 24,117 million corresponding to 1/5th of the securitisation- related loss.
The remaining 4/5ths (Lit. 96,468 million) is stated at sub-caption B4 “Increases - other increases” includes amounts stemming from the first full consolidation of the companies belonging to the former Cassa di Risparmio di Savona Group (total opening adjustments) and, in particular, adjustments relating to bad loans amounting to Lit. 78,478 million (of which Lit. 45,655 million in the form of interest on overdue loans), adjustments to watchlist positions of lit. 13,726 million (of which Lit. 510 million in the form of interest on overdue loans) and adjustments
224 relating to performing credits of Lit. 10,081 million (of which Lit. 21 million in the form of interest on overdue loans).
Banks
Country risk non- Loans subject to Rescheduled Performing CATEGORIES/BALANCES Bad loans Watchlists guaranteed rescheduling loans loans loans A. Total opening adjustments at 31/12/99 - - - - 20,660 - A.1 of which: interest on overdue loans ------B. Increases - - - - 569 - B.1 adjustments - - - - 569 - B.1.1 of which: interest on overdue loans ------B.2 amounts from credit risk fund ------B.3 transfer from other loan categories ------B.4 other increases ------C. Decreases - - - - 8,100 - C.1 recoveries stemming from evaluation - - - - 149 - C.1.1 of which: interest on overdue loans ------C.2 recoveries stemming from payments received - - - - 3,462 - C.2.1 of which: interest on overdue loans ------C.3 write offs - - - - 4,489 - C.4 transfer to other loan categories ------C.5 other decreases ------D. Total closing adjustments at 31/12/2000 - - - - 13,129 - D.1 of which: interest on overdue loans ------
225 SECTION 2
SECURITIES
The securities held by the Bank amount to Lit. 5,789,535 million and are analysed below:
31/12/00 31/12/99 million % million % – Treasury certificates and other bills eligible for refinancing with central banks (caption 20) 1,248,717 21.6 1,882,268 37.4 – Bonds and other fixed-income securities (caption 50) 4,255,826 73.5 2,870,151 57.1 – Shares, quotas and other equity securities (caption 60) 284,992 4.9 276,806 5.5 Total 5,789,535 100.0 5,029,225 100.0 of which: – Investment securities 785,297 13.6 747,934 14.9 – Trading securities 5,004,238 86.4 4,281,291 85.1
Change 31/12/00 31/12/99 absolute % 2.1 INVESTMENT SECURITIES 785,297 747,934 37,363 5.0
31/12/00 31/12/99 Book Market Book Market value value value value 1. Certificates of indebtedness 785,297 749,517 747,934 722,780 1.1 Government securities 703,884 673,499 682,178 660,022 – listed 703,884 673,499 682,178 660,022 – unlisted - - - - 1.2 Other securities 81,413 76,018 65,756 62,758 – listed 54,958 50,042 7,639 6,724 – unlisted 26,455 25,976 58,117 56,034 2. Shares and equity securities - - - - – listed - - - - – unlisted - - - - Total 785,297 749,517 747,934 722,780
Book value of investment securities comprises the difference, on the basis of “pro rata temporis” criteria, between cost and redemption value, including issue premium or discount. The difference between book and market value (Lit. 35,780 million) represents the potential losses for the portfolio; market value is the average price recorded during the first six months of the year. The positive and negative differences between book value and re-payment value at maturity total Lit. 3,531 million and Lit. 3,836 million, respectively. These differences were calculated separately for each category.
Book Redemption Positive Negative value value differences differences 1. Listed certificates of indebtedness 758,841 758,976 3,441 3,838 Public bodies 703,884 703,856 3,440 3,674 Banks 48,720 48,877 1 158 Other 6,237 6,243 - 6 2. Unlisted certificates of indebtedness 26,456 26,343 90 25 Public bodies - - - - Banks 2,809 2,719 90 - Other 23,647 23,624 - 25 Total 785,297 785,319 3,531 3,863
226 2.2 CHANGES IN INVESTMENT SECURITIES 31/12/00 31/12/99 A. Opening balances 747,934 553,754 B. Increases 42,218 741,723 B1. Purchases 505 - B2. Writebacks - - B3. Transfers from trading portfolio - 739,541 B4. Other changes 41,713 2,182 C. Decreases 4,855 547,543 C1. Sales - - C2. Redemptions 4,284 73,439 C3. Adjustments including - - - permanent writedowns - - C4. Transfers to trading portfolio - 472,845 C5. Other changes 571 1,259 D. Closing balances 785,297 747,934
Activity in the trading securities portfolio was carried out in accordance with CONSOB communication no. 95001286 of 15/2/95. Other increases recorded at B4 (Lit. 39.5 bn) relate to the first full consolidation of Cassa di Risparmio di Savona SpA (opening balances).
Change 31/12/00 31/12/99 absolute % 2.3 TRADING SECURITIES 5,004,238 4,281,291 722,947 16,9
31/12/00 31/12/99 Book Market Book Market value value value value 1. Certificates of indebtedness 4,719,245 4,796,611 4,004,485 4,097,249 1.1 Government securities 2,616,056 2,633,798 2,776,967 2,797,953 – listed 2,601,578 2,619,431 2,774,537 2,795,523 – unlisted 14,478 14,367 2,430 2,430 1.2 Other securities 2,103,190 2,162,813 1,227,518 1,299,296 – listed 1,588,871 1,642,099 167,637 223,982 – unlisted 514,319 520,714 1,059,881 1,075,314 2. Shares and equity securities 284,992 290,561 276,806 291,506 – listed 226,995 228,589 173,454 178,632 – unlisted 57,997 61,972 103,352 112,874 Total 5,004,238 5,087,172 4,281,291 4,388,755
The difference between market value and book value represents potential non-recorded capital gains for the period and amounts to Lit. 83,934 million, of which Lit. 66,305 million related to hedging forward transactions.
227 2.4 CHANGES IN TRADING SECURITIES 31/12/00 31/12/99 A. Opening balances 4,281,291 5,092,452 B. Increases 18,003,125 15,833,121 B1. Purchases 17,119,243 15,062,406 - Certificates of indebtedness 16,150,617 14,675,259 . Government securities 10,458,021 11,772,269 . other securities 5,692,596 2,902,990 - Shares and other equity securities 968,626 387,147 B2. Writebacks and revaluations 6,155 14,864 B3. Transfers from investment portfolio - 472,845 B4. Other changes 877,727 283,006 C. Decreases 17,280,178 16,644,282 C1. Sales and redemptions 17,150,974 15,855,293 - Certificates of indebtedness 16,186,151 15,535,823 . Government securities 11,203,206 13,424,431 . other securities 4,982,945 2,111,392 - Shares and other equity securities 964,823 319,470 C2. Adjustments 85,928 49,203 C3. Transfers to investment portfolio - 739,541 C4. Other changes 43,276 245 D. Closing balances 5,004,238 4,281,291
Other increases recorded at B4 (Lit. 727,6 bn) relate to the first full consolidation of Cassa di Risparmio di Savona SpA (opening balances
228 SECTION 3
EQUITY INVESTMENTS
Equity investments amount to Lit. 432,569 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Equity investments (caption 70) (a) - carried at equity 111,073 25.6 373,024 59.1 (b) - others 67,818 15.7 58,828 9.3 – Investments in Group companies (caption 80) (a) - carried at equity 253,678 58.6 199,021 31.6 (b) - others - - - - Total 432,569 100.0 630,873 100.0
3.1 SIGNIFICANT INVESTMENTS Name (1) (2) (3) (4) '(5) (6) (7) (5.1) (5.2) A. Companies included in the basis of consolidation A.1 Fully consolidated (a) 1. Banca CARIGE SpA Genoa 1 - - - - - XXX 2. Galeazzo Srl Genoa 1 8,696 241 A1.1 100.00 100.00 XXX 3. Columbus Carige Imm. SpA Genoa 1 39,178 -509 A1.1 99.97 99.97 XXX A1.2 0.03 0.03 XXX 4. Cassa di Risparmio di Savona SpA Savona 1 328,640 16,601 A1.1 95.90 95.90 XXX 5. Ligure leasing SpA Savona 15,306 105 A1.4 100.00 100.00 XXX 6. Immobiliare CARISA Srl Savona 3,670 -102 A1.4 100.00 100.00 XXX 7. Imm. Ettore Vernazza SpA (b) Genoa 1 9,636 1,768 A1.1 90.00 90.00 XXX 8. Centro Fiduciario SpA Genoa 1 1,611 306 A1.1 66.28 66.28 XXX A1.4 20.00 20.00 XXX 9. Banca del Monte di Lucca SpA Lucca 1 49,199 1,416 A1.1 51.00 51.00 XXX A.2 Proportional consolidation B. Companies accounted for under the equity method 1. Levante Norditalia Assicuraz. SpA ( c ) Milan 1 193,688 607 A1.1 87.01 87.01 160,891 2. Carige Vita Nuova SpA (a) Genoa 1 99,977 5,510 A1.1 92.81 92,81 92,788 4. Frankfurter Bankgesellschaft AG (d) Frankfurt 8 43,911 43 A1.1 47.50 47.50 20,858 5. Eptaconsors SpA (e) Milan 8 396,663 209,850 A1.1 20.24 20.24 80,284 6. Autostrada dei Fiori SpA Savona 8 48,553 14,505 A1.1 16.62 16.62 9,932 A1.4 4.00 4.00 C. Other substantial participating interest ------
(a) Captions are taken from the 31/12/2000 financial statements. (b) The company holds 10% of its own shares. (c) Data taken from consolidated accounts at 30/09/2000. Data present in the most recently approved balance sheet at 30/09/2000. The Extraordinary Shareholders’ meeting of 29/6/2000 approved the change of the company’s name from “Bankenunion AG” to Frankfurter Bankgesellschaft AG, effective from 28/7/2000. (d) Captions are taken from the 31/12/2000 financial statements (e) Captions are taken from consolidated accounts at 31/12/00. Key (1) Head office (2) Type of participating interest (3) Net Assets 1 = controlling interest pursuant to art. 2359 c.c. (4) Gains/Losses par. 1 no. 1 (majority vote at Shareholders’ Annual General (5) Type of participating interest Meeting) 2 = controlling interest pursuant to art. 2359 c.c. (5.1) Holding par 1 no. 2 (major influence at Shareholders’ Annual General (5.2) Participating interest expressed as a percentage Meeting) 3 = controlling interest pursuant to art. 23 T.U. par. (6) Votes available at Shareholders’ Annual General Meeting 2 no. 1 4 = other forms of controlling interest (7) Consolidated balance sheet value 5 = joint management pursuant to art. 26 par 1 of the “decreto” 6 = joint management pursuant to art. 26 par 2 of the “decreto” 7 = joint control 8 = associated undertaking
229 Change 31/12/00 31/12/99 absolute % 3.2 AMOUNTS DUE TO AND FROM GROUP COMPANIES (a) Assets 174 - 174 - 1. Amounts due from banks including: - - - - – subordinated - - - - 2. Amounts due from financial institutions - - - - including: – subordinated - - - - 3. Amounts due from other customers 174 - 174 - including: – subordinated - - - - 4. Bonds and other fixed-income securities - - - - including: – subordinated - - - - (b) Liabilities 190,659 71,873 118,786 … 1. Amounts due to banks - - - - 2. Amounts due to financial institutions - - - - 3. Amounts due to other customers 187,621 66,013 121,608 … 4. Securities issued 3,038 5,860 -2,822 -48.2 5. Subordinated liabilities - - - - (c) Guarantees and Commitments 8,060 5,300 2,760 52.1 1. Guarantees 8,060 5,300 2,760 52.1 2. Commitments - - - -
230 Change 31/12/00 31/12/99 absolute % 3.3 AMOUNTS DUE TO AND FROM OTHER NON-GROUP COMPANIES (a) Assets 504,709 551,992 -47,283 -8.6 1. Amounts due from banks including: 329,470 285,072 44,398 15.6 – subordinated - - - - 2. Amounts due from financial institutions 48,857 100,677 -51,820 -51.5 including: – subordinated - - - - 3. Amounts due from other customers 115,207 150,428 -35,221 -23.4 including: – subordinated - - - - 4. Bonds and other fixed-income securities 11,175 15,815 -4,640 -29.3 including: – subordinated - - - - (b) Liabilities 494,678 1,202,180 -707,502 -58.9 1. Amounts due to banks 302,174 631,341 -329,167 -52.1 2. Amounts due to financial institutions 178,818 486,496 -307,678 -63.2 3. Amounts due to other customers 13,411 48,857 -35,446 -72.6 4. Securities issued 275 35,486 -35,211 -99.2 5. Subordinated liabilities - - - - (c) Guarantees and Commitments 423,262 246,054 177,208 72.0 1. Guarantees 416,825 245,931 170,894 69.5 2. Commitments 6,437 123 6,314 …
Amounts owed to credit institutions include Lit. 145,831 million related to repurchase agreements with the Bank of Italy. Amounts owed to credit institutions include Lit. 282,709 million related to repurchase agreements with the Bank of Italy.
Change 31/12/00 31/12/99 absolute % 3.4 CAPTION 70 "EQUITY INVESTMENTS" 178,891 431,852 -252,961 -58.6 (a) in banks 47,936 374,004 -326,068 -87.2 1. listed 9,432 - 9,432 - 2. unlisted 38,504 374,004 -335,500 -89.7 (b) in financial institutions 93,321 41,107 52,214 127.0 1. listed - - - - 2. unlisted 93,321 41,107 52,214 127.0 (c) others 37,634 16,741 20,893 124.8 1. listed 1,401 5,778 -4,377 -75.8 2. unlisted 36,233 10,963 25,270 …
231 Change 31/12/00 31/12/99 absolute % 3.5 CAPTION 80 "INVESTMENTS IN GROUP COMPANIES" 253,678 199,021 54,657 27.5 (a) in banks - - - - 1. listed - - - - 2. unlisted - - - - (b) in financial institutions - - - - 1. listed - - - - 2. unlisted - - - - (c) others 253,678 199,021 54,657 27.5 1. listed - - - - 2. unlisted 253,678 199,021 54,657 27.5
3.6 CHANGES IN PARTICIPATING INTERESTS
3.6.1 INVESTMENTS IN GROUP COMPANIES 31/12/00 31/12/99 A. Opening balances 199,021 140,717 B. Increases 134,399 138,791 B1. Purchases 117,000 125,222 B2. Recoveries - - B3. Revaluations 16,762 12,783 B4. Other changes 637 786 C. Decreases 79,742 80,487 C1. Sales - 380 C2. Write-downs - - including: - permanent write-downs - - C3. Other changes 79,742 80,107 D. Closing balances 253,678 199,021 E. Total revaluations 33,510 17,277 F. Total write-downs - -
Detail of purchases and all variations are given below:
PURCHASES
CARIGE VITA NUOVA SPA Purchase of 35,600,000 shares, nominal value Lit. 1,000 each, for a total price of Lit. 117 bn (Variation in our shareholding from 52,809 to 92,809) 117,000 Total purchases 117,000
REVALUATIONS
INCREASES RELATED TO COMPANIES ACCOUNTED UNDER THE EQUITY METHOD
LEVANTE NORDITALIA ASSICURAZIONI SPA 11,649
CARIGE VITA NUOVA SPA 5,113
Total revaluations 16,762
232 OTHER INCREASES
LEVANTE NORDITALIA ASSICURAZIONI SPA Interim quota related to the recovery of the reduced value of the holding following the purchase of Levante Assicurazioni by Banca Carige. 637
Total other increases 637
OTHER DECREASES
CARIGE VITA NUOVA SPA 529 Dividend distributed to the parent company during the first six months of 2000 was written off
Writing off of dividend distributed to the Parent Company during the year.
Writing off of infra-Group profit released by Levante Norditalia SpA on the sale of its holding of 40% in Carige Vita Nuova to Banca Carige.
Writing off of reserves firstly recorded in Levante Norditalia’s consolidated statements related to the company’s release of its holding in Carige Vita Nuova.
Writing off of dividend distributed by Carige Vita Nuova to Levante Norditalia during the year.
Total other decreases 79,742
3.6.2 OTHER PARTICIPATING INTERESTS 31/12/00 31/12/99 A. Opening balances 431,852 245,646 B. Increases 97,730 320,287 B1. Purchases 20,491 283,183 B2. Recoveries 54 1,978 B3. Revaluations 60,183 25,689 B4. Other changes 17,002 9,437 C. Decreases 350,691 134,081 C1. Sales 17,802 33,331 C2. Write-downs 1,802 2,842 including: - permanent write-downs 1,802 2,842 C3. Other changes 331,087 97,908 D. Closing balances 178,891 431,852 E. Total revaluations 56,547 19,806 F. Total write-downs 3,475 22,234
Detail of purchases and all variations are given below:
PURCHASES
FINCANTIERI CANTIERI NAVALI ITALIANI SPA Subscription of 14,999,994 new shares, nominal unit value Lit. 1,000 each. (Our shareholding expressed as a percentage: 2.308%) 15,000
IMMOCRI SPA Purchase of 4,152,773 quotas, nominal unit value Lit. 1,000, total price Lit. 5,447,845,170. (Our shareholding expressed as a percentage: 3,525%) 5,448
233 ARGO FINANCE ONE SRL Subscription of 5% sharecapital 1
AGENZIA LUCCHESE PER L’ENERGIA E IL RECUPERO DELLE RISORSE SRL Payment to capital account 31
CABEL SRL Purchase of 3,000 quotas, nominal unit value Lit. 1,000, total price Lit. 3,000,000. (Our shareholding expressed as a percentage: 0.006%) 3
AEROPORTO VILLANOVA D’ALBENGA SPA Subscription of 1,201 new shares, nominal unit value Lit. 6,300 each. (Our shareholding expressed as a percentage: 0.76%) 8
Total purchases 20,491
REVALUATIONS
CENTRO FACTORING SPA 4
CENTRO LEASING SPA 39
CREDITO FONDIARIO TOSCANO SPA 9
S.I.T.A.F. SOCIETA’ ITALIANA PER IL TRAFORO DEL FREJUS SPA 2
Total revaluations 54
REVALUATIONS
INCREASES RELATED TO COMPANIES ACCOUNTED UNDER THE EQUITY METHOD
FRANKFURTER BANKGESELLSCHAFT AG 20
AUTOSTRADA DEI FIORI SPA 2,967
EPTACONSORS SPA 57,196
Total revaluations 60,183
OTHER INCREASES
EQUITY INVESTMENTS OF CASSA DI RISPARMIO DI SAVONA SPA AT 1/1/2000 (net of equity investments in Banca Carige SpA and in Centro Fiduciario SpA) 11,751
FINMECCANICA SPA Profit from sale of 2,439,948 shares 3,537
ANTOLA E PENNA LEADER SRL Contribution to cover costs borne by the company during 1998 and 1999 26
CONSORZIO PER IL GIURISTA DI IMPRESA S.C.R.L. I Amount recognised as our quota in contribution for covering losses related to 1998 and 1999 20
234 I.C.C.R.I. BANCA FEDERALE EUROPEA SPA Profit from sale of 28,929 shares 122
SOFIPA SPA Profit from sale of 57,348 shares 311
SOCIETA’ PER I SERVIZI BANCARI SPAI Increased shareholding resulting from the sale of this area of activity by Servizi Interbancari SpA 68
AUTOSTRADA DEI FIORI SPA Negative change stemming from the first full consolidation 1,167
Total other increases 17,002
SALES
SAT – SOCIETA’ AUTOSTRADA TIRRENICA SPA Sale of 159,244 shares, nominal value Lit. 300 each , total price Lit. 42,199,660 (Total sale) 42
FINMECCANICA SPA Sale of 2,439,948 shares, nominal value Lit. 1,000 each, total price Lit. 7,913,812,278 (Total sale) 7,914
I.C.C.R.I. BANCA FEDERALE EUROPEA SPA Sale of 28,929 shares, nominal value Lit. 200,000 each, total price Lit. 8,888,236,057 (Total sale) 8,888
SOFIPA SPA Sale of 42 shares, nominal value Lit. 1,000 each, total price Lit. 1 (Total sale) 958
Total sales 17,802
WRITE-DOWNS
AGENZIA LUCCHESE PER L’ENERGIA E PER IL RECUPERO DELLE RISORSE 6
INFORMATICA CASSE TOSCANA SPA 3
TIRRENA PROFESSIONAL FACTOR SPA 37
ME.T.IM. NORD-OVEST SPA in liquidation 67
C.I.V. SPA 29
SOCIETA’ ZONA FRANCA GENOVA SRL 1
ISTITUTO ENCICLOPEDIA BANCA E BORSA. SPA 2
G.A.L. AREE RURALI LA SPEZIA SCRL 10
SOCIETA’ CONSORTILE PER IL DIPLOMA DI GIURISTA DI IMPRESA 12
SO.GE.MER. SPA 3
235 IMMOCRI SPA 1,627
SVILUPPO VALLI DELLA PROVINCIA DI IMPERIA SRL 3
AEROPORTO VILLANOVA D’ALBENGA SPA 1
INSEDIAMENTI PRODUTTIVI SAVONESI SPA 1
Total write-downs 1,802
OTHER CHANGES
CASSA DI RISPARMIO DI SAVONA SPA Transfer to caption 80 “Investments in Group companies” 322,827
FRANKFURTER BANKGESELLSCHAFT AG 441 (Dividend distribuited to the parent company during the year was written off)
EPTACONSORS SPA 5,831 (Dividend distribuited to the parent company during the year was written off)
AUTOSTRADA DEI FIORI SPA 1,636 (Dividend distribuited to the parent company during the year was written off)
SAT – SOCIETA’ AUTOSTRADA TIRRENICA SPA 4 (Loss regarding the sale of 141,800 shares)
ME.T.IM. NORD-OVEST SPA Cancellation of holding as a result of the winding up of the company 279
SINT SPA Cancellation of holding as a result of the winding up of the company 1
SERVIZI INTERBANCARI SPA Reduced holding resulting from the sale of this area of activity to Società per i Servizi Bancari SpA 68 Total other changes 331,087
236 SECTION 4
TANGIBLE AND INTANGIBLE FIXED ASSETS
Tangible and intangible fixed assets amount to Lit. 1,098,540 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Tangible fixed assets (caption 120) 1,330,363 88.9 1,040,004 94.7 – Intangible fixed assets (caption 110) 166,405 11.1 58,536 5.3 Total 1,496,768 100.0 1,098,540 100.0
4.1 CHANGES IN TANGIBLE FIXED ASSETS 31/12/00 Properties Furniture Leased Total and fittings assets A. Opening balances 577,379 35,004 427,621 1,040,004 B. Increases 52,470 19,373 419,753 491,596 B1. Purchases 14,439 14,426 288,471 317,336 B2. Recoveries - - - - B3. Revaluations - - - - B4. Other changes 38,031 4,947 131,282 174,260 C. Decreases 17,511 12,802 170,923 201,236 C1. Sales 4,541 564 42,445 47,550 C2. Depreciation and amortization 12,964 12,235 123,203 148,402 (a) amortization 12,964 12,235 123,203 148,402 (b) permanent write-downs - - - - C3. Other changes 6 3 5,275 5,284 D. Closing balances 612,338 41,575 676,451 1,330,363 E. Total revaluations 29,220 - - 29,220 F. Total depreciation and amortization 218,146 203,525 322,834 744,505 (a) amortization 214,156 203,525 322,834 740,515 (b) permanent write-downs 3,990 - - 3,990
Item A includes Lit. 42,769 million resulting from positive difference arising from consolidation allocated to tangible fixed assets. Item C2 includes depreciation related to the same allocated difference for Lit. 1,624 million. In caption D the increase of Lit. 1,306 million related to financial leased assets stems from the application of the "financial method" also for those contracts stipulated before 1/1/95. Sub -caption B4 includes amounts stemming from the first full consolidation of Cassa di Risparmio di Savona SpA, Immobiliare CARISA SpA and Ligure Leasing SpA (closing balances). The figure, in particular, reflects Lit. 36,732 million in real estate, Lit. 5,219 million in plant and equipment costs, and Lit. 125,483 million in financial leasing.
31/12/99 Properties Furniture Leased Total and fittings assets A. Opening balances 537,123 33,371 297,052 867,546 B. Increases 57,998 13,070 224,455 295,523 B1. Purchases 31,521 10,763 224,455 266,739 B2. Recoveries - - - - B3. Revaluations - - - - B4. Other changes 26,477 2,307 - 28,784 C. Decreases 17,742 11,437 93,886 123,065 C1. Sales 5,807 459 22,966 29,232 C2. Depreciation and amortization 11,935 10,978 70,920 93,833 (a) amortization 11,935 10,978 70,920 93,833 (b) permanent write-downs - - - - C3. Other changes - - - - D. Closing balances 577,379 35,004 427,621 1,040,004 E. Total revaluations 23,628 - - 23,628 F. Total depreciation and amortization 180,547 163,966 190,168 534,681 (a) amortization 180,547 163,966 190,168 534,681 (b) permanent write-downs - - - -
237 4.2 CHANGES IN INTANGIBLE FIXED ASSETS 31/12/00 Software Start-up Goodwill Other intangible Total charges fixed assets A. Opening balances 16.955 13.065 13.431 15.085 58.536 B. Increases 12.863 48 116.501 6.039 135.451 B1. Purchases 12.396 9 116.501 5.812 134.718 B2. Recoveries - - - - - B3. Revaluations - - - - - B4. Other changes 467 39 - 227 733 C. Decreases 8.450 4.242 6.716 8.174 27.582 C1. Sales - - - - - C2. Depreciation and amortization 8.396 4.242 6.716 8.121 27.475 (a) amortization 8.396 4.242 6.716 8.121 27.475 (b) permanent write-downs - - - - - C3. Other changes 54 - - 53 107 D. Closing balances 21.368 8.871 123.216 12.950 166.405 E. Total revaluations - - - - - F. Total depreciation and amortization 20.655 12.409 43.428 35.523 112.015 (a) amortization 20.655 12.409 43.428 35.523 112.015 (b) permanent write-downs - - - - -
Sub -caption B4 includes amounts stemming from the first full consolidation of Cassa di Risparmio di Savona SpA, Immobiliare CARISA SpA and Ligure Leasing SpA (closing balances). The figure, in particular, reflects Lit. 467 million in software products, Lit. 3.7 million in plant and equipment costs, and Lit. 227 million in other tangible fixed assets.
31/12/99 Software Start-up Goodwill Other intangible Total charges fixed assets A. Opening balances 11,374 13,965 20,147 13,224 58,710 B. Increases 12,913 4,903 - 15,550 33,366 B1. Purchases 12,645 4,903 - 15,111 32,659 B2. Recoveries - - - - - B3. Revaluations - - - - - B4. Other changes 268 - - 439 707 C.Decreases 7,332 5,803 6,716 13,689 33,540 C1. Sales - - - - - C2. Depreciation and amortization 7,330 4,644 6,716 10,009 28,699 (a) amortization 7,330 4,644 6,716 10,009 28,699 (b) permanent write-downs - - - - - C3. Other changes 2 1,159 - 3,680 4,841 D. Closing balances 16,955 13,065 13,431 15,085 58,536 E. Total revaluations - - - - - F. Total depreciation and amortization 20,970 10,153 36,713 54,681 122,517 (a) amortization 20,970 10,153 36,713 54,681 122,517 (b) permanent write-downs - - - - -
238 SECTION 5
OTHER ASSETS
Other assets amount to Lit. 1,010,485 million and are analysed below:
31/12/00 31/12/99 million % million % – Other assets (caption 150) 807,827 79.9 789,753 84.8 – Accrued income and prepaid expenses (caption 160) 202,658 20.1 142,071 15.2 Total 1,010,485 100.0 931,824 100.0
Change 31/12/00 31/12/99 absolute % 5.1 CAPTION 150 "OTHER ASSETS" 807,827 789,753 18,074 2.3 – post-collection notes and other values 300,166 174,243 125,923 72.3 – miscellaneous accounts receivable from branches 69,163 69,609 -446 -0.6 – amounts in transit between branches 40,990 43,003 -2,013 -4.7 – current account cheques drawn on other banks 20,616 159,841 -139,225 -87.1 – amounts to be collected from customers 18,478 6,431 12,047 … – premiums related to option transactions 14,898 14,335 563 3.9 – current account cheques drawn on the Bank 14,619 4,585 10,034 … – off balance sheet revaluations 6,351 6,522 -171 -2.6 – accounts relating to tax collection services 4,359 2,904 1,455 50.1 – Bank guarantee deposits 2,620 285 2,335 … – amounts relating to participation purchase - - - - – fiscal items: 288,819 257,657 31,162 12.1 tax advances 133,478 137,886 -4,408 -3.2 accounts receivable from the tax authorities 77,438 24,150 53,288 … with-holding taxes 65,630 82,780 -17,150 -20.7 tax advance on provisions to reserve for termination indemnity (Law 140/97) 11,612 12,328 -716 -5.8 taxes paid in advance 661 513 148 28.8 – others 26,748 50,338 -23,590 -46.9
239 Change 31/12/00 31/12/99 absolute % 5.2 CAPTION 160 “ACCRUED INCOME AND PREPAID EXPENSES” 202,658 142,071 60,587 42.6 Accrued income: 189,950 135,312 54,638 40.4 – interest income on loans and advances to credit institutions 6,036 8,225 -2,189 -26.6 – interest income on loans to customers 37,984 23,394 14,590 62.4 – interest income on securities 69,064 49,516 19,548 39.5 – differentials stemming from derivatives contracts 75,251 54,146 21,105 39.0 – others 1,615 31 1,584 … Prepaid expenses: 12,708 6,759 5,949 88.0 – premiums related to currency forward transactions 3,497 1,367 2,130 … – differentials stemming from derivatives contracts 1,537 777 760 97.8 – discounts on issuing of securities 2,398 1,455 943 64.8 – administrative charges 3,212 2,323 889 38.3 – other transactions 2,064 837 1,227 …
Change 31/12/00 31/12/99 absolute % 5.4 DISTRIBUTION OF SUBORDINATED ASSETS 61,406 45,683 15,723 34.4 a) Loans and advances to credit institutions - - - - b) Loans and advances to customers - - - - c) Bonds and other fixed-income securities 61,406 45,683 15,723 34.4
240 SECTION 6
PAYABLES
Payables amount to Lit. 20,030,396 million and are analysed as follows:
31/12/00 31/12/99 million % million % – Amounts owed to credit institutions (caption 10) 4,285,770 21.4 3,025,664 19.1 – Amounts owed to customers (caption 20) 9,702,318 48.5 7,729,178 48.9 – Debts evidenced by certificates (caption 30) 6,041,858 30.2 5,054,162 32.0 – Funds managed on behalf of third parties (caption 40) 450 - 445 - Total 20,030,396 100.0 15,809,449 100.0
Change 31/12/00 31/12/99 absolute % 6.1 CAPTION 10 “AMOUNTS OWED TO CREDIT INSTITUTIONS” 4,285,770 3,025,664 1,260,106 41.6 (a) repurchase agreements 372,029 574,115 -202,086 -35.2 (b) loans of securities - - - -
Caption 10 ”Amounts owed to credit institutions” detail by technical form is the following:
Change 31/12/00 31/12/99 absolute % Deposits 3,249,546 1,951,716 1,297,830 66.5 Current accounts 93,034 42,509 50,525 … Financing 311,387 187,720 123,667 65.9 Long-term loans 259,704 269,568 -9,864 -3.7 Repurchase agreements 372,029 574,115 -202,086 -35.2 Other 70 36 34 94.4 Total 4,285,770 3,025,664 1,260,106 41.6
Change 31/12/00 31/12/99 absolute % 6.2 CAPTION 20 “AMOUNTS OWED TO CUSTOMERS” 9,702,318 7,729,178 1,973,140 25.5 (a) repurchase agreements 1,113,945 560,592 553,353 98.7 (b) loans of securities - - - -
Balance Sheet liabilities captions 20, 30, and 40 amount to Lit. 15,744,626 million in comparison to Lit. 12,783.785 million recorded in 1999 (+Lit. 2,960.841 million; +23.2%). Caption 20 “Amounts owed to customers” includes Lit. 332,863 million relating to the business activities of the former branches of Banco di Sicilia. Detail by technical form is as follows:
Change 31/12/00 31/12/99 absolute % Savings deposits 785,994 585,979 200,015 34.1 Current accounts 7,778,054 6,549,313 1,228,741 18.8 Funding from international organisations 18,127 31,063 -12,936 -41.6 Repurchase agreements 1,113,946 560,592 553,354 98.7 Other 6,197 2,231 3,966 … Total 9,702,318 7,729,178 1,973,140 25.5
241 Caption 30 “Debts evidenced by certificates” includes Lit. 49,224 million relating to the business activities of the former branches of Banco di Sicilia.
Change 31/12/00 31/12/99 absolute % Certificates of deposits 1,047,302 1,111,140 -63,838 -5.7 Bonds certificates 4,836,932 3,846,985 989,947 25.7 Own cheques in circulation 157,624 96,037 61,587 64.1 Total 6,041,858 5,054,162 987,696 19.5
Caption 40 “Funds managed on behalf of third parties” (Lit. 450 million) includes interest-bearing funds supplied by the State and other public bodies for the financing of specific projects foreseen by relevant legislation; the lending transactions carried out on behalf of public bodies, exclusively at fixed remuneration, are stated at section 12.
PART B CONSOLIDATED BALANCE SHEET
242 SECTION 7
RESERVES Reserves, summarized in this section, amount to Lit. 992,585 million and are represented in the balance sheet as follows:
31/12/00 31/12/99 million % million % – Reserves for loan losses (caption 90) 7,941 0.8 5,000 0.6 – Reserves for risks and charges (caption 80) 824,581 83.1 767,691 85.9 – Reserve for termination indemnities (caption 70) 160,063 16.1 120,676 13.5 Total 992,585 100.0 893,367 100.0
Change 31/12/00 31/12/99 absolute % CAPTION 90 "RESERVE FOR LOAN LOSSES" 7,941 5,000 2,941 58.8
This caption includes Lit. 2,609 million relating to third parties. In the consolidated statements at 31/12/99, the reserve for loan losses attributable to Banca del Monte di Lucca (Lit. 1,764 million) was recorded at liabilities caption 140 “Assets belonging to third parties”.
7.2 CHANGES IN THE "RESERVES FOR LOAN LOSSES" (CAPTION 90) 31/12/00 31/12/99 A. Opening balances 5,000 6,000 B. Increases 13,419 11,333 B1. Provisions 10,613 7,816 B2. Other changes 2,806 3,517 C.Decreases 10,478 12,333 C1. Utilizations 8,607 8,416 C2. Other changes 1,871 3,917 D. Closing balances 7,941 5,000
CAPTION 80 (A) “RESERVES FOR PENSIONS AND SIMILAR COMMITMENTS”
31/12/00 31/12/99 A. Opening balances 574,899 573,657 B. Net change 13,444 1,242 C. Closing balances 588,343 574,899
The closing balance represents the situation of the in-house funds of the Group’s banks, which are not legal entities
243 CHANGES IN THE “RESERVES FOR TAXATION” (CAPTION 80 B) 31/12/00 31/12/99 A. Opening balances 169,477 151,049 B. Increases 179,982 166,830 C. Decreases 170,358 148,402 D. Closing balances 179,101 169,477
Reserves for Taxation include provisions for Lit. 554 million covering deferred taxes stemming from the effect of the financial amortization plan on consolidated balance sheet, with reference to leased assets up to 1/1/95.
Deffered tax: positive and negative effects
In previous accounting periods up to and at 31/12/00, the Banca Carige Group made provisions solely for defered tax liability relative to those gains which benefit from tax relief in the form of distribution over five years as foreseen by article 54, Consolidated Tax Law Assets representing advance payment of taxation totalled Lit. 24,2 bn at 31/12/99; these increased by Lit. 27,4 bn aa a result of the following: - advanced tax arising during 2000 (10,8 bn); - other increases in the form of advanced tax at 31/12/99 relative to Cassa di Risparmio di Savona SpA and Ligure Leasing SpA, Banca Carige group subsidiaries fully consolidated for the first time in the accounting period ending 31/12/2000. The principal forms of advanced taxation arisen during 2000 are: - write-downs of cash credits, for that part which exceeds the 0,5% limit of credits recorded in the balance sheet, are deductible over the following seven years in seven equal instalments; - the amortisation of goodwill valued at greater than a tenth is deductible in the year in which the amount accepted for tax purposes originates; - costs related to hospitality and entertaining related to 2000 are deductible for a third of the total over five years in five equal instalments; - provisions for personnel charges will be tax deductible in the next business year – Adjustments to tax advanced relative to previous accounting periods as a result of changes in tax rates in force – provisions for charges due in the time period defined or already incurred during the opening months of 2001.
Negative variations (Lit. 12.8 bn) relate to:
- cancellation of assets in the form of advanced tax arisen in previous accounting periods and now relevant for tax purposes:inserire In accordance with Bank of Italy instructions of 3/8/99, assets in the form of tax advanced relative to timing differences arising in 2000, which will be reversed in following years, were recorded at caption 240, “Income tax for the year”; this caption was increased by the reversal during the first six months of the year of assets in the form of advanced taxation recorded in previous years.
A Assets representing for advanced payment of taxation (a) 1. Opening balances 24,151 2. Increases 27,397 2.1 Deferred taxation originating in the year 10,784 2.2 Other increases 16,613 3. Decreases 12,758 3.1 Deferred taxation written off in the year 12,758 3.2 Other decreases - 4. Closing balances 38,790 (a) Recorded in the income statement with counter entry
With regards to timing differences liable to taxation, provisions for differed tax liability amounting to around Lit. 4,6 bn related to gains stemming from the release of strategic and non-strategic holdings and premises were recorded
244 as in the past. The payment of this amount is subject to the relief offered by article 54 of the Consolidated Tax Law in the form of instalments. Other increases amounting to around Lit. 2 bn related to deffered tax liability at 31/12/99 of Cassa di Risparmio Savona SpA and Ligure Leasing SpA were recorded.
B Liabilities for taxes payable (a) 1. Opening balances 10,000 2. Increases 7,736 2.1 Deferred taxation originating in the year 4,592 2.2 Other increases 3,144 3. Decreases 5,188 3.1 Deferred taxation written off in the year 4,264 3.2 Other decreases 924 4. Closing balances 12,548 (a) Recorded in the income statement with counter entry
Deferred taxation with counter part stated in net assets Deferred taxation liabilities written off in the year amount to Lit. 3,7 bn. Reduced deferred tax liabilities relative to net assets stem from the utilisation of Lit. 96 bn of provisions to the share premium reserve to cover 4/5ths of the negative variation deriving from the securitisation of bad loans. As a result, Lit. 38.6 bn in advanced tax on net assets was recorded as counterpart to the share premium reserve. The balance of the reserve prior to utilisation will be restored over the next four years
A Assets in the form of advanced payment of taxation 1. Opening balances - 2. Increases 38,648 2.1 Advanced taxation arising during the year 38,648 2.2 Other increases 3. Decreases - 3.1 Advanced taxation written off during the year - 3.2 Other decreases - 4. Closing balances 38,648
B Liabilities for taxes payable (a) 1. Opening balances - 2. Increases - 2.1 Deferred taxation originating in the year - 2.2 Other increases - 3. Decreases - - 3.1 Deferred taxation written off in the year - 3.2 Other decreases - 4. Closing balances -
No provisions were made with regard to deferred tax liabilities on reserves benefiting from tax relief totalling Lit. 80.5 bn as distribution is not foreseen and there is little likelihood of the conditions requiring payment arising. With regards to the above-stated, tax deferrals were recorded exclusively in the income statement in order to correlate with related timing differences. Change 31/12/00 31/12/99 absolute % 7.3 COMPOSITION OF CAPTION 80 (D) "OTHER RESERVES" 57,137 23,315 33,822 … Reserves for personnel charges 29,691 9,068 20,623 … Reserves for future charges 29 51 -22 -43.1 Reserves for guarantees and commitments 9,339 5,928 3,411 57.5 Reserves for in-house insurance scheme 3,064 3,041 23 0.8 Reserves for leasing transactions 2,357 934 1,423 … Reserves for legal proceedings 9,605 4,275 5,330 … Reserves for renegotiation mortgage loans ex L. 113/99 2,728 Other 245 324 18 306 … CHANGES IN CAPTION 70 "RESERVE FOR TERMINATION INDEMNITIES" 31/12/00 31/12/99 A. Opening balances 120,676 109,289 B. Increases 57,742 24,554 C. Decreases 18,355 13,167 D. Closing balances 160,063 120,676
246 SECTION 8
SUBSCRIBED CAPITAL, EQUITY RESERVES, RESERVES FOR GENERAL BANKING RISKS AND SUBORDINATED LIABILITIES
This section presents liabilities captions 100, 130, 140, 150, 160, 170, 180, and 200 and assets captions 90, 100 and 140.
31/12/00 31/12/99 million % million % – Capital stock (caption 150) 1,970,173 74.8 1,970,173 74.0 – Additional paid-in capital (caption 160) 241,368 9.1 299,189 11.3 – Reserves (caption 170) 202,527 7.7 210,945 7.9 – Revaluation reserves (caption 180) 15,587 0.6 15,587 0.6 – Reserves for general banking risks (caption 100) 10,000 0.4 10,000 0.4 – Negative difference arising from application of the equity method (caption 130) 3,834 0.1 2,666 0.1 – Minority interests (caption 140) 35,634 1.4 24,875 0.9 – Net income (caption 200) 155,406 5.9 127,603 4.8 Total 2,634,529 100.0 2,661,038 100.0 – Positive difference arising from consolidation (caption 90) 192,922 89,317 – Positive difference arising from application af the equity method (caption 100) 32,549 148,499 – Own shares (caption 140) 61,227 9,788
Change 31/12/00 31/12/99 absolute % CAPTION 150 "CAPITAL STOCK" 1,970,173 1,970,173 - -
Capital is made up by 197,017,340 ordinary shares each with a face value of Lit. 10,000.
Change 31/12/00 31/12/99 absolute % CAPTION 160 "ADDIONAL PAID-IN CAPITAL" 241,368 299,189 -57,821 -19.3
The caption is related to the issue-premium for Lit. 1,000 connected to 29,188,500 shares, for Lit. 2,000 connected to 7,500,000 shares and for Lit 6,000 connected to 42,500,000 shares. The change of Lit. 57,821 million stems from the utilisation of the reserve during the course of the operation of securitisation (article 6, Law 130/99); the change in particular corresponds to the difference between the following two amounts: four fifths of the total reduction in the book value of the assets ceded (Lit. 96,468 million); related tax advanced (Lit. 38,647 million).
247 Change 31/12/00 31/12/99 absolute % CAPTION 170 "RESERVES" 202,527 210,945 -8,418 -4.0 a) legal reserve 71,448 53,191 18,257 34.3 b) reserve for purchase of treasury stock 61,227 9,788 51,439 … d) other reserves 69,852 147,966 -78,114 -52.8
Change 31/12/00 31/12/99 absolute % CAPTION 180 "REVALUATION RESERVES" 15,587 15,587 - - Revaluation reserves pertaining to the Group 15,587 15,587 – –15,587 15,587 - -
Change 31/12/00 31/12/99 absolute % CAPTION 100 "RESERVES FOR GENERAL BANKING RISKS" 10,000 10,000 - -
No change was recorded during 2000 Change 31/12/00 31/12/99 absolute % CAPTION 130 "NEGATIVE DIFFERENCE ARISING FROM APPLICATION OF THE EQUITY METHOD" 3,834 2,666 1,168 43.8
Negative differences increased by Lit. 1,168 million as a result of the first application of the equity method following the consolidation of Autostrada dei Fiori SpA.
Change 31/12/00 31/12/99 absolute % CAPTION 140 "MINORITY INTEREST" 35,634 24,875 10,759 43.3
Change 31/12/00 31/12/99 absolute % CAPTION 200 "NET INCOME" 155,406 127,603 27,803 21.8 The caption reflects gains generated by the fully consolidated subsidiares of Lit. 19,827 million. Profit destined to third parties for the year amounted to Lit. 1,419 milion. No losses attributable to third parties were recorded.
248 Change 31/12/00 31/12/99 absolute % CAPTION 90 AND 100 "POSITIVE DIFFERENCE ARISING FROM CONSOLIDATION AND FROM APPLICATION OF THE EQUITY METHOD" 225,471 237,816 -12,345 -5.2 Positive difference arising from consolidation 192,922 89,317 103,605 … Positive difference arising from the application of the equity method 32,549 148,499 -115,950 -78.1 Increases resulting from fully consolidated subsidiaries amounted to Lit. 19 million.
31/12/00 31/12/99 Opening balance 89,317 - Decreases 10,528 374 – Amortization for the period 10,522 374 – Cover for negative change resulting from indirect shareholding in Centro Fiduciario SpA 6 - Increases 114,133 89,691 - Transfer and subsequent adjustment after first full consolidation of positive difference arising from the application of the equity method relating to Cassa di Risparmio di Savona SpA 114,124 - - Positive change resulting from consolidation stemming from the purchase of 51% of Banca del Monte di Lucca SpA 9 89,691 Closing balance 192,922 89,317 Increases resulting from fully consolidated subsidiaries are as follows:
Positive difference arising from the application of the equity method
31/12/00 31/12/99 Opening balance 148,499 62,689 Decreases 115,950 8,539 - Transfer of item "positive difference arising from the application of the equity method" relating to Cassa di Risparmio di Savona SpA to item "positive difference arising from full consolidation" 113,140 - – Amortization for the period 2,810 4,533 – Previous periods extraordinary amortization relative to Cassa di Risparmio di Savona SpA - 4,006 – Total sale Levante Assicurazioni SpA - - Increases - 94,349 – Increased holding Cassa di Risparmio di Savona SpA - 93,054 – Increased holding Levante Norditalia SpA - 1,295 Closing balance 32,549 148,499
249 Change 31/12/00 31/12/99 absolute % CAPTION 140 "OWN SHARES" 61,227 9,788 51,439 …
The amount recorded represents the nominal value of 44,157 million shares (19,157 issued and retained by Banca Carige SpA and 25,000 retained by Cassa di Risparmio di Savona SpA, present in the Banca Carige share portfolio prior to the inclusion into the Group). The corresponding “Reserves for own shares”, formed by Banca Carige SpA in accordance with article 2357 of the Civil Code, was integrated for the consolidation by an amount equal to the book value of the shares of Banca Carige SpA in portfolio of Cassa di Risparmio di Savona SpA.
The table below provides the details of the Bank’s total capital and prudential management requirements as requested by the Bank of Italy in its letter of 14/12/98 relating to increased transparency of bank balance sheets.
CATEGORIES/VALUES 31/12/00 31/12/99 A. Total capital A.1 Tier 1 2,018,502 2,196,900 A.2 Tier 2 -2,176 19,912 A.3 Deductions 102,841 374,208 A.4 Total capital 1,913,485 1,842,604 B. Prudential requirements B.1 Credit risks 1,070,994 908,148 B.2 Trading risks 164,654 81,061 including: – trading securities risks 159,043 79,262 – exchange rate risks 5,611 1,799 B.3 Other prudential requirements - - B.4 Total prudential requirements 1,235,648 989,209 C. Capital adequacy ratios C.1 Risk-Weighted Assets (*) 15,445,600 12,365,113 C.2 Tier 1% of RWA 13.07% 17.77% C.3 Total capital % of RWA 12.39% 14.90%
(*) Total prudential requiriments multiplied by the reciprocal minimum obligatory credit risk coefficent.
250 SECTION 9
OTHER LIABILITIES
Other liabilities amount to Lit. 1,129,645 million and are analysed as follow:
31/12/00 31/12/99 million % million % – Other liabilities (caption 50) 827,962 73.3 705,607 77.5 – Accrued expenses and deferred income (caption 60) 301,683 26.7 205,375 22.5 Total 1,129,645 100.0 910,982 100.0
Change 31/12/00 31/12/99 absolute % 9.1 CAPTION 50 "OTHER LIABILITIES" 827,962 705,607 122,355 17.3 – adjustment differential on discounted notes 17,927 173,897 -155,970 -89.7 – miscellaneous accounts payable to branches 183,752 298,438 -114,686 -38.4 – amounts due to customers 219,092 40,634 178,458 … – amounts in transit with branches 77,943 8,835 69,108 28.8 – amounts due to tax authorities on behalf of third parties 29,145 28,720 425 1.5 – beneficiaries of outstanding invoices 58,092 45,095 12,997 28.8 – staff charges 27,451 50,988 -23,537 -46.2 – amounts relating to securities transactions 34,907 7,298 27,609 … – premiums related to option transactions 13,092 1,152 11,940 … – amounts related to writedown on off-balance sheet transactions 10,627 7,483 3,144 42.0 – accrued costs to be recognised 6,068 3,333 2,735 82.1 – guarantee deposits from third parties 4,211 2,126 2,085 98.1 – amounts relating to tax collection service 1,330 1,369 -39 -2.8 – counter entry to write down on dividends distributed by Cassa di Risparmio di Savona SpA in 1997 and 1998 - - - - – other 144,325 36,239 108,086 …
251 Change 31/12/00 31/12/99 absolute % 9.2 CAPTION 60 "ACCRUED EXPENSES AND DEFERRED INCOME" 301,683 205,375 96,308 46.9 Accrued expenses: 227,987 156,413 71,574 45.8 – interest expenses due to banks 39,194 18,434 20,760 112.6 – interest expenses due to customers 8,160 2,915 5,245 … – interest payable on debt securities 109,958 82,225 27,733 33.7 – differentials stemming from derivatives contracts 68,968 52,700 16,268 30.9 – others 1,707 139 1,568 … Deferred income: 73,696 48,962 24,734 50.5 – premiums related to currency forward transactions 1,666 1,019 647 63.5 – differentials stemming from derivatives contracts 1,508 705 803 … – discounted notes 5,040 7,517 -2,477 -33.0 – advanced rents and others related to leasing 61,642 35,835 25,807 72.0 – others 3,840 3,886 -46 -1.2
252 SECTION 10
GUARANTEES AND COMMITMENTS
Guarantees and commitments amount to Lit. 3,894,357 million and are analysed below:
31/12/00 31/12/99 million % million % – Guarantees given (caption 10) 2,283,784 58.6 1,836,351 68.8 – Commitments (caption 20) 1,610,573 41.4 831,815 31.2 Total 3,894,357 100.0 2,668,166 100.0
Change 31/12/00 31/12/99 absolute % 10.1 CAPTION 10 "GUARANTEES GIVEN" 2,283,784 1,836,351 447,433 24.4 (a) commercial guarantees 2,091,398 1,691,763 399,635 23.6 (b) financial guarantees 191,783 143,985 47,798 33.2 (c) assets held in guarantee 603 603 - - Total 2,283,784 1,836,351 447,433 24.4 Caption 10 is analysed below: – joint securities 5,373 8,728 -3,355 -38.4 – sureties 2,177,967 1,672,383 505,584 30.2 – documentary and non documentary credits 91,297 135,939 -44,642 -32.8 – re-financing mortgages with Artigiancassa - 3,126 -3,126 -100.0 – acceptances on behalf of third parties 8,544 15,572 -7,028 -45.1 – bond sureties on behalf of third parties 52 52 - - – other sureties on behalf of third parties 551 551 - - Credit commitments related to non-performing loans amount to Lit. 29,226 million. Reserve for guarantees and commitments, which amount to Lit. 9,339 million, cover all relevant risks.
Change 31/12/00 31/12/99 absolute % 10.2 CAPTION 20 "COMMITMENTS" 1,610,573 831,815 778,758 93.6 (a) Commitments to extend credit (certain to be called on) 654,339 227,141 427,198 … (b) Commitments to extend credit (not certain to be called on) 956,234 604,674 351,560 58.1 Commitments are analysed as follows: – stipulated mortgages to be granted 450,714 452,879 -2,165 -0.5 – purchases of securities to be settled 366,403 106,300 260,103 … – deposits to be made with banks 24,203 2,184 22,019 … – unused irrevocable lines of credit 547,560 203,560 344,000 … – commitments with Deposit Protection Fund Liabilities (FITD) 24,906 21,049 3,857 18.3 – amounts to be granted to customers 2,003 7,025 -5,022 -71.5 – derivatives contracts on credits 96,814 - 96,814 … – option on securities 24,175 19,623 4,552 23.2 – stipulated leasing transactions to be granted 72,279 19,138 53,141 … – investment shares and quotas to be received 1,516 57 1,459 - Total 1,610,573 831,815 778,758 93.6
253 Change 31/12/00 31/12/99 absolute % 10.3 ASSETS HELD TO GUARANTEE THE BANK’S LIABILITIES 1,797,619 1,182,266 615,353 52.0 Securities held to guarantee: – advance from Bank of Italy - 1,400 -1,400 … – bank drafts issued by Carige 29,543 40,501 -10,958 -27.1 – repurchase agreements 1,768,076 1,140,365 627,711 55.0 Total 1,797,619 1,182,266 615,353 52.0
Change 31/12/00 31/12/99 absolute % 10.4 UNUSED LINES OF CREDIT BY THE BANK 461,737 110,307 351,430 … (a) central banks 148,120 80,307 67,813 84.4 (b) other banks 313,617 30,000 283,617 …
10.5 FORWARD TRANSACTIONS 31/12/00 31/12/99 Hedging Trading Other Hedging Trading Other 1. Purchase/sale of: 152,053 644,404 - 210,632 296,369 - 1.1 Securities - 410,565 - - 54,911 - – purchases - 319,932 - - 54,560 - – sales - 90,633 - - 351 - 1.2 Currency 152,053 233,839 - 210,632 241,458 - – currency against currency 20,809 - - - 6,005 - – purchases against euro 108,726 121,302 - 4,090 177,026 - – sales against euro 22,518 112,537 - 206,542 58,427 - 2. Deposits and loans - 113 99,958 - - 48,200 – to be made - 113 26,093 - - 9,208 – to be received - - 73,865 - - 38,992 3. Derivatives contracts 3,131,908 4,114,591 33,215 2,112,153 5,705,460 - 3.1 With exchange of principal 103,100 763,837 - 139,200 222,311 - (a) securities 85,100 62,914 - 112,891 50,149 - – purchases 48,350 47,915 - 39,246 50,149 - – sales 36,750 14,999 - 73,645 - - (b) currency 18,000 700,923 - 26,309 172,162 - – currency against currency 18,000 82,006 - 26,309 75,482 - – purchases against euro - 304,618 - - 35,754 - – sales against euro - 314,299 - - 60,926 - (c) other instruments ------– purchases ------– sales ------3.2 Without exchange of principal 3,028,808 3,350,754 33,215 1,972,953 5,483,149 - (a) currency ------– currency against currency ------– purchases against euro ------– sales against euro ------(b) other instruments 3,028,808 3,350,754 33,215 1,972,953 5,483,149 - – purchases 1,108,590 1,643,422 - 793,071 2,786,982 - – sales 1,920,218 1,707,332 33,215 1,179,882 2,696,167 - Total 3,283,961 4,759,108 133,173 2,322,785 6,001,829 48,200
Deposits and funding to be paid or received include exclusively spot and short transactions. Currency related spot transactions amount to Lit 33,9 bn. With regards to derivatives contracts, the column ‘other transactions’ includes the notional value of options stated separately from the related underlying structured bond issue of the Bank. The notional value of options incorporated in assets or liabilities which allow either the Bank or the counterparty to transform, after a certain period of time, the
254 interest rate stipulated in the contract from fixed to floating, or vice versa, was recorded at section 11.6 ‘Maturities of assets and liabilities’.
10.6 DERIVATIVES CONTRACTS ON CREDITS 31/12/00 31/12/99 Trading Banking Trading Banking book book book book 1. Purchases 118,965 - - - 1.1 With exchange of principal 118,965 - - - - Credit default product 118,965 - - - - Banks 33,166 - - - - Financial bodies 85,799 - - - 2. Sales 96,814 - - - 1.1 With exchange of principal 96,814 - - - - Credit default product 96,814 - - - - Banks 96,814 - - - - Financial bodies - - - - Total 215,779 - - -
Principal amounts to Lit. 7,495.5 billion and comprises basis swap transactions for 338,8 billion, stated twice.
PRINCIPAL (1) Interest Exchange Share Other Total rate rate rates 1. Trading contracts 2,958,779 700,923 428,079 156,839 4,244,620 1.1 Non-quoted trading contracts 2,879,347 700,923 33,215 96,814 3,710,299 Forwards (2) 58,088 - - - 58,088 Swaps (3) 2,814,699 - - - 2,814,699 Options bought 3,280 344,030 - - 347,310 Options sold 3,280 356,893 33,215 - 393,388 Derivatives on credits - - - 96,814 96,814 1.2 Quoted trading contracts 79,432 - 394,864 60,025 534,321 Futures bought 15,513 - 2,670 46,471 64,654 Futures sold 63,919 - 2,670 13,554 80,143 Options bought - - 194,762 - 194,762 Options sold 194,762 194,762 2. Non-quoted hedging contracts 2,653,350 18,000 121,783 118,965 2,912,098 Swaps (3) 2,126,717 18,000 - - 2,144,717 Options bought 95,813 - 60,858 - 156,671 Options sold 430,820 - 60,925 - 491,745 Derivatives on credits - - - 118,965 118,965 Total 5,612,129 718,923 549,862 275,804 7,156,718 (1) Principal in basis swaps is stated once. (2) Caption includes forward rate agreements. (3) Caption includes basis swaps, cross currency swaps, interest rate swaps and overnight indexed swaps.
255 PRINCIPAL IN HEDGING CONTRACTS (1) Swaps Options Options Derivatives Total forwards bought sold on credits 1. Assets 1,417,580 119,988 60,925 118,965 1,717,458 Loans to customers 326,188 95,813 - - 422,001 Trading securities 796,111 - 36,750 118,965 951,826 Investment securities 217,830 - - - 217,830 Interbank deposits 77,451 77,451 Equity investments - 24,175 24,175 - 48,350 2. Liabilities 571,924 36,683 430,820 - 1,039,427 Bonds 571,924 36,683 430,820 - 1,039,427 3. Other (2) 155,213 - - - 155,213 Total 2,144,717 156,671 491,745 118,965 2,912,098
(1) Principal in basis swaps is stated once. (2) Non-specific hedging contracts on interest-rate risk related to customer borrowing and lending.
PRINCIPAL IN CONTRACTS CLASSIFIED BY REMAINING CONTRACT LIFE(1) Up to 12 From 1 to 5 More than Total months years 5 years 1. Trading contracts 2,090,773 2,122,981 30,866 4,244,620 1.1 Non-quoted trading contracts 1,571,965 2,107,468 30,866 3,710,299 Forwards 58,088 - - 58,088 Swaps 822,548 1,961,285 30,866 2,814,699 Options bought 334,348 12,962 - 347,310 Options sold 356,981 36,407 - 393,388 Derivatives on credits - 96,814 - 96,814 1.2 Quoted trading contracts 518,808 15,513 - 534,321 Futures bought 49,141 15,513 - 64,654 Futures sold 80,143 - - 80,143 Options bought 194,762 - - 194,762 Options sold 194,762 - - 194,762 2. Non-quoted hedging contracts 175,817 1,125,052 1,611,229 2,912,098 Swaps 152,901 997,793 994,023 2,144,717 Options bought 19,450 41,408 95,813 156,671 Options sold - 75,447 416,298 491,745 Derivatives on credits 3,466 10,404 105,095 118,965 Total 2,266,590 3,248,033 1,642,095 7,156,718
(1) Principal in basis swaps is stated once.
During the year no losses on loans-related derivatives contracts were recorded. Derivatives business is carried out exclusively with primary banking and financial institutions and for this reason provisions for counterparty risk have not been made. At 31/12/2000, there were no unsettled contracts. Non-quoted contracts accounted for 93% of all derivatives contracts at 30/6/2000.
256 NON-QUOTED DERIVATIVES CONTRACTS (1) Banks Financial Others Total bodies 1. Principal 6,122,347 403,317 96,733 6,622,397 2. Trading contracts Positive market value 23,453 994 - 24,447 Negative market value 22,048 1,123 1,000 24,171 Potential credit equivalent 23,321 583 2,403 26,307 3. Hedging contracts Positive market value 28,132 2,060 - 30,192 Negative market value 100,194 5,873 - 106,067 Potential credit equivalent 35,086 10,508 - 45,594 (1)Principal relative to basis swaps is stated once.
Derivatives-related capital losses of Lit. 135,003 million and capital gains of Lit. 65,312 million were not recorded in the income statement. In particular, capital losses and gains stemming from hedging contracts related to the trading securities portfolio of Lit. 76,933 million and Lit. 18,937 million respectively, were not recorded (see section 2.3); capital losses and gains stemming from hedging contracts related to bonds issued of Lit. 20,245 million and Lit. 8,357 respectively were also not recorded.
DEFERRED GAINS AND LOSSES Losses Gains 1. Trading contracts 31,147 37,627 1.1 Non-quoted trading contracts 31,147 37,407 Forwards 56 58 Swaps 18,584 24,376 Options 12,507 12,973 1.2 Quoted trading contracts - 220 Futures - 220 2 Non-quoted hedging contracts 103,856 27,685 Swaps 88,518 19,582 Options 1,599 6,626 Derivatives on credits 13,739 1,477 Total 135,003 65,312
257 SECTION 11
CONCENTRATION AND DISTRIBUTION OF ASSETS AND LIABILITIES
Breakdowns of loans related to lists 11.2, 11.3, 11.5, 11.6 and 11.7 of this section include leased assets, which amount to Lit. 676,451 million and are exclusively connected to transactions with customers in lira. On this basis, loans to customers amount to Lit.13,216,214 million and not to Lit. 12,601,619 million (as caption 40 of assets).
11.1 SIGNIFICANT EXPOSURES 31/12/00 31/12/99 (a) amount 238,468 244,683 (b) number 1 1 1
11.2 DISTRIBUTION OF LOANS AND ADVANCES TO CUSTOMERS, BY CATEGORY 31/12/00 31/12/99 (a) Governments 571,196 228,948 (b) Other public entities 1,155,301 963,122 (c) Non-financial businesses 7,758,340 6,419,345 (d) Financial institutions 1,163,785 806,807 (e) Personal businesses 862,743 716,816 (f) Other operators 2,764,521 2,204,763 Total 14,275,886 11,339,801 Significant exposures are those identified on the basis of “major lines of credit” as defined by the Bank of Italy.
11.3 DISTRIBUTION OF LOANS TO RESIDENT NON-FINANCIAL BUSINESSES AND PERSONAL BUSINESSES 31/12/00 31/12/99 (a) 1st branch of economic activity Wholesale and retail trade, salvage and repairs 1,832,549 1,495,506 (b) 2nd branch of economic activity Building and construction 1,389,708 1,198,271 (c) 3rd branch of economic activity Other market services 1,196,319 958,762 (d) 4th branch of economic activity Air and sea transport 537,257 366,858 Hotel and catering services (e) 5th branch of economic activity Hotel and catering services 422,211 Transportation services 340,937 (f) Other branches 3,095,424 2,642,475 Total 8,473,468 7,002,809
258 11.4 DISTRIBUTION OF GUARANTEES GIVEN, BY CATEGORY OF COUNTERPART 31/12/00 31/12/99 (a) Governments 2 - (b) Other public entities 21,560 9,016 (c) Banks 619,416 620,889 (d) Non-financial businesses 1,473,294 1,107,747 (e) Financial institutions 81,935 33,062 (f) Personal businesses 29,084 21,246 (g) Other operators 58,493 44,391 Total 2,283,784 1,836,351
31/12/00 Caption/countries Italy Other EU Other Total countries countries 1. Assets 19,907,941 1,431,090 646,580 21,985,611 1.1 Due from banks 1,328,446 410,777 180,967 1,920,190 1.2 Loans to customers 14,001,992 268,683 5,211 14,275,886 1.3 Securities 4,577,503 751,630 460,402 5,789,535 2. Liabilities 17,706,706 2,073,933 249,757 20,030,396 2.1 Due to banks 2,038,841 2,022,596 224,333 4,285,770 2.2 Deposits from customers 9,625,880 51,247 25,191 9,702,318 2.3 Securities issued 6,041,535 90 233 6,041,858 2.4 Others 450 - - 450 3. Guarantees and Commitments 3,658,804 186,619 48,934 3,894,357
31/12/99 Caption/countries Italy Other EU Other Total countries countries 1. Assets 15,905,191 1,268,004 459,010 17,632,205 1.1 Due from banks 666,179 500,874 96,126 1,263,179 1.2 Loans to customers 11,055,431 235,295 49,075 11,339,801 1.3 Securities 4,183,581 531,835 313,809 5,029,225 2. Liabilities 14,512,186 1,161,009 136,254 15,809,449 2.1 Due to banks 1,818,766 1,096,198 110,700 3,025,664 2.2 Deposits from customers 7,639,631 64,446 25,101 7,729,178 2.3 Securities issued 5,053,344 365 453 5,054,162 2.4 Others 445 - - 445
Geographic distribution is analysed by reference to the counterparts’ country of residence.
259 11.6 MATURITIES OF ASSETS AND LIABILITIES
31/12/00 Repayable Up to Between 3 Between 1 and 5 Beyond 5 Unspecified Captions/Residual life on demand 3 months and 12 years years duration Total months fixed rate indexed rate fixed rate indexed rate 1. Assets 5,278,281 4,714,591 4,367,025 3,265,337 4,905,850 2,147,713 3,425,043 458,267 28,562,107 1.1 Treasury bonds eligible for refinancing 22,045 56,736 233,894 236,943 491,691 107,134 100,274 - 1,248,717 1.2 Due from banks 1,025,867 678,010 15,662 482 - 19,656 - 180,513 1,920,190 1.3 Loans to customers 3,901,653 1,954,931 1,343,362 646,529 2,651,827 616,529 2,883,301 277,754 14,275,886 1.4 Bonds and other fixed income securities 13,635 166,915 703,816 971,644 1,573,326 390,205 436,285 - 4,255,826 1.5 Off-balance sheet transactions 315,081 1,857,999 2,070,291 1,409,739 189,006 1,014,189 5,183 - 6,861,488 2. Liabilities 9,663,242 6,247,317 3,751,875 2,036,174 3,159,490 1,137,561 895,775 - 26,891,434 2.1 Due to banks 309,882 2,701,286 783,639 57,742 96,325 164,204 172,692 - 4,285,770 2.2 Deposits from customers 8,544,390 1,113,360 36,152 703 6,763 343 607 - 9,702,318 2.3 Securities issued 609,986 544,925 1,081,641 347,752 2,822,965 30,841 603,748 - 6,041,858 – bonds 407,619 62,360 665,578 283,887 2,782,900 30,841 603,748 - 4,836,933 – certificates of deposits 44,744 482,565 416,063 63,865 40,065 - - - 1,047,302 – other securities 157,623 ------157,623 2.4 Subordinated liabilities ------2.5 Off-balance sheet - transactions 198,984 1,887,746 1,850,443 1,629,977 233,437 942,173 118,728 - 6,861,488
Caption repayable on demand includes assets and liabilities with residual life of not more than 24 hours. Unspecified duration includes compulsory reserve, overdue loans and bad loans. Sub-captions 1.5 and 2.5 include the notional value (Lit. 496,538 million) of options incorporated in structured mortgaged loans and bond issues which allow either the Bank or the counterparty, after a certain period of time, to transform the interest rate stipulated in the contract from fixed to floating, or vice versa.
260 31/12/99 Repayable Up to Between 3 Between 1 and 5 Beyond 5 Unspecified Captions/Residual life on demand 3 months and 12 years years duration Total months fixed rate indexed rate fixed rate indexed rate 1. Assets 3,467,163 4,376,336 4,296,687 3,562,541 4,305,172 836,307 2,809,452 588,390 24,242,048 1.1 Treasury bonds eligible for refinancing 13,398 190,620 297,248 488,211 635,892 135,626 121,273 - 1,882,268 1.2 Due from banks 284,498 627,461 151,965 19,264 99,363 321 - 80,307 1,263,179 1.3 Loans to customers 2,921,170 1,412,929 1,200,795 486,338 2,177,034 243,374 2,390,078 508,083 11,339,801 1.4 Bonds and other fixed income securities 4,470 111,688 184,595 648,415 1,373,462 296,161 251,360 - 2,870,151 1.5 Off-balance sheet transactions 243,627 2,033,638 2,462,084 1,920,313 19,421 160,825 46,741 - 6,886,649 2. Liabilities 7,388,091 5,629,153 3,366,774 2,427,504 3,097,659 328,570 457,902 - 22,695,653 2.1 Due to banks 43,715 2,436,480 145,870 71,215 270,176 18,915 39,293 - 3,025,664 2.2 Deposits from customers 7,115,963 560,746 33,958 - 18,161 350 - - 7,729,178 2.3 Securities issued 132,663 576,397 752,687 408,964 2,723,879 40,963 418,609 - 5,054,162 – bonds 6,688 129,162 284,113 293,242 2,674,208 40,963 418,609 - 3,846,985 – certificates of deposits 29,938 447,235 468,574 115,722 49,671 - - - 1,111,140 – other securities 96,037 ------96,037 2.4 Subordinated liabilities ------2.5 Off-balance sheet - transactions 95,750 2,055,530 2,434,259 1,947,325 85,443 268,342 - - 6,886,649
Change 31/12/00 31/12/99 absolute % 11.7 ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY a) Assets 1,269,599 1,001,843 267,756 26.7 1. Due from banks 176,922 148,813 28,109 18.9 2. Loans to customers 695,214 520,557 174,657 33.6 3. Securities 391,494 327,607 63,887 19.5 4. Participating interests 715 715 - - 5. Other 5,254 4,151 1,103 26.6 (b) Liabilities 1,358,940 891,263 467,677 52.5 1. Due to banks 1,209,349 807,090 402,259 49.8 2. Deposits from customers 147,711 82,008 65,703 80.1 3. Securities issued 1,880 2,165 -285 -13.2 4. Other - - - -
261 SECTION 12
ADMINISTRATION AND DEALING ON BEHALF OF THIRD PARTIES
Change 31/12/00 31/12/99 absolute % 12.1 DEALING OF SECURITIES a) Purchases 216,358 - 216,358 … 1. Settled 215,608 - 215,608 … 2. Unsettled 750 - 750 … (b) Sales 220,560 - 220,560 … 1. Settled 219,771 - 219,771 … 2. Unsettled 789 - 789 …
During the first six months, the Bank began trading on behalf of third parties.
Change 31/12/00 31/12/99 absolute % 12.2 PRIVATE BANKING 4,429,280 4,636,122 -206,842 -4.5 1. Securities issued by the Bank 3,175 6,083 -2,908 -47.8 2. Other securities 4,426,105 4,630,039 -203,934 -4.4
The figures shown correspond to total market values of property included within administration and dealing on behalf of third parties. The caption includes wealth accumulation service on behalf of third parties pursuant to article 24, Legislative decree 58/98 amounting to Lit. 2,321 million; a sum managed by the Carige Open Pension Fund launched in compliance with article 9, Legislative decree 124/93.
Change 31/12/00 31/12/99 absolute % 12.3 CUSTODY AND ADMINISTRATION OF SECURITIES (a) third-party securities held in deposit 25,163,456 22,410,802 2,752,654 12.3 (private banking not included) 1. Securities issued by Group companies 5,037,906 4,578,484 459,422 9.9 2. Other securities 20,125,550 17,832,318 2,293,232 12.9 (b) third-party securities deposited with third-parties 24,308,616 21,744,676 2,563,940 11.8 (c) portfolio securities deposited with third parties 3,763,754 3,455,043 308,711 8.9
In accordance with the Bank of Italy’s guidelines, the item “third-party securities held in deposit” includes the value of those securities deposited as a guarantee for lending transactions; the Bank carries out custody and management services for the same securities. The value at 31/12/99 rose by Lit. 307,205 million. Depositary bank-related securities in custody amounted to Lit. 5,015,111 million.
262 12.4 COLLECTION OF THIRD PARTY RECEIVABLES: DEBIT AND CREDIT ADJUSTMENTS 31/12/00 31/12/99 (a) debit adjustments 1,485,488 1,009,169 1. current accounts 52,851 7,714 2. bills portfolio 909,020 676,481 3. cash 224,161 35,477 4. other 299,456 289,497 (b) credit adjustments 1,503,414 1,176,062 1. current accounts 86,014 2,658 2. bills and other items for collection 1,417,320 1,151,156 3. other 80 22,248
Change 31/12/00 31/12/99 absolute % 12.5 OTHER TRANSACTIONS 2,877,236 3,089,093 -211,857 -6.9 – Other banks’ share of pool operations 2,478,616 2,687,263 -208,647 -7.8 – Total bills related to factoring transactions (“pro solvendo”) 351,227 350,283 944 0.3 – Amounts managed on behalf of public bodies 47,393 51,547 -4,154 -8.1
263 PART C CONSOLIDATED INCOME ART C STATEMENT CONSOLIDATED INCOME STATEMENT SECTION 1
INTEREST
Change 2000 1999 absolute % 1.1 CAPTION 10 "INTEREST INCOME AND SIMILAR REVENUES” 1,189,242 887,740 301,502 34.0 (a) on deposits with banks 55,559 50,051 5,508 11.0 including: – deposits with central banks 7,558 4,498 3,060 68.0 (b) on loans and advances to customers 861,797 627,796 234,001 37.3 including: – loans using funds managed on behalf of third parties 6 3 3 … (c) on certificates of indebtedness 270,917 209,026 61,891 29.6 (d) other interest income 969 867 102 11.8 (e) positive differentials on hedging transactions - - - -
Change 2000 1999 absolute % 1.2 CAPTION 20 “INTEREST EXPENSE AND SIMILAR CHARGES” 532,970 383,472 149,498 39.0 (a) on deposits from banks 153,960 108,286 45,674 42.2 (b) on deposits from customers 138,136 83,233 54,903 66.0 (c) on securities issued 233,939 171,488 62,451 36.4 including: – certificates of deposits 37,678 45,644 -7,966 -17.5 (d) on funds managed on behalf of third parties 5 51 -46 -90.2 (e) on subordinated liabilities - 322 -322 -100.0 (f) negative differentials on hedging transactions 6,930 20,092 -13,162 -65.5
Change 2000 1999 absolute % 1.3 CAPTION 10 "INTEREST INCOME AND SIMILAR REVENUES” a) on foreign currency assets 66,879 70,739 -3,860 -5.5
Change 2000 1999 absolute % 1.4 CAPTION 20 “INTEREST EXPENSE AND SIMILAR CHARGES” a) on foreign currency liabilities 75,478 43,559 31,919 73.3
264 SECTION 2
COMMISSION
Change 2000 1999 absolute % 2.1 CAPTION 40 “COMMISSION INCOME” 329,471 273,736 55,735 20.4 (a) guarantees given 10,443 8,658 1,785 20.6 (b) collection and payment services 57,192 47,177 10,015 21.2 (c) management, dealing and consultancy services: 151,172 125,599 25,573 20.4 1. securities dealing 2,062 563 1,499 … 2. foreign currency dealing 6,694 6,305 389 6.2 3. private banking 18,298 15,539 2,759 17.8 4. custody and administration of securities 3,779 2,589 1,190 46.0 5. placement of securities 97,288 88,029 9,259 10.5 5.1 placement of quotas in mutual funds 94,398 83,800 10,598 12.6 5.2 placement of other securities 2,890 4,229 -1,339 -31.7 6. Consultancy - - - - 7. door-to-door sales of securities, products and services - - - … 8. acceptance of orders 23,051 12,574 10,477 83.3 (e) other services 110,664 92,302 18,362 19.9
Change 2000 1999 absolute % 2.2 CAPTION 50 “COMMISSION EXPENSES” 22,110 16,176 5,934 36.7 (a) collection and payment services 13,506 10,406 3,100 29.8 (b) management and dealing services: 4,737 3,417 1,320 38.6 1. securities dealing 1,507 1,288 219 17.0 2. foreign currency dealing 36 3 - … 3. private banking 983 588 395 67.2 4. custody and administration of securities 2,119 1,408 711 50.5 5. placement of securities 0 130 -130 … 6. door-to-door sales of securities, products and services 92 - 92 - 7. Management of mutual funds - - - … (c) other services 3,867 2,353 1,514 64.3
265 SECTION 3
GAINS FROM FINANCIAL TRANSACTIONS, NET
Change 2000 1999 absolute % 3.1 CAPTION 60 “GAINS FROM FINANCIAL TRANSACTIONS, NET” 22,233 80,797 -58,564 -72.5
2000 Transactions securities currency other A.1 Revaluations 6,989 - 3,890 A.2 Write-downs 87,129 - 5,667 B. Other gains and losses 99,492 5,488 -830 Total 19,352 5,488 -2,607 1. Government securities 9,053 2. Certificates of indebtedness 8,448 3. Shares and other equity securities 867 4. Derivatives on securities as underlying 983
1999 Transactions securities currency other A.1 Revaluations 14,864 8,297 A.2 Write-downs 51,970 6,780 B. Other gains and losses 110,074 2,948 3,364 Total 72,968 2,948 4,881 1. Government securities 14,484 2. Certificates of indebtedness 7,314 3. Shares and other equity securities 49,144 4. Derivatives on securities as underlying 2026
266 SECTION 4
ADMINISTRATIVE COSTS
Change 2000 1999 absolute % 4.1 AVERAGE NUMBER OF EMPLOYEES, BY GRADE 3,696 3,207 489 15.2 (a) managers 29 29 - - (b) officials 299 258 41 15.9 (c) other employees 3,368 2,920 448 15.3 Change 2000 1999 absolute % CAPTION 80 A "PERSONNEL" 398,143 355,581 42,562 12.0 – wages and salaries 250,859 233,844 17,015 7.3 – social security costs 67,780 68,210 -430 -0.6 – termination indemnities 21,304 17,306 3,998 23.1 – pensions and similar commitments 23,417 21,906 1,511 6.9 – others 34,783 14,315 20,468 …
Change 2000 1999 absolute % CAPTION 80 B "OTHER ADMINISTRATIVE COSTS" 233,889 194,074 39,815 20.5 Postage and telephone 20,688 17,943 2,745 15.3 Maintenance of tangible and intangible fixed-assets 20,916 18,579 2,337 12.6 Advertising, promotion and publishing 13,984 12,196 1,788 14.7 Professional fees 23,728 15,121 8,607 56.9 Lighting and heating 8,216 7,087 1,129 15.9 Rental expenses 8,511 5,974 2,537 42.5 Donations 7,518 7,574 -56 -0.7 Travelling and transport 6,326 6,945 -619 -8.9 Other banking services 6,088 5,240 848 16.2 Printing and stationery 6,023 4,841 1,182 24.4 Software maintenance 4,849 5,651 -802 -14.2 Banking premises security services 5,483 4,024 1,459 36.3 Hardware leasing charges 3,472 3,791 -319 -8.4 Insurance premiums 4,640 3,895 745 19.1 Office cleaning 8,414 7,615 799 10.5 EDP processing with third parties 16,068 5,360 10,708 … Association fees 1,567 1,101 466 42.3 Indirect taxes 47,686 46,021 1,665 3.6 – stamp duty and stock exchange contracts 36,766 31,828 4,938 15.5 – ”imposta sostitutiva” Presidential Decree 601/73 4,537 3,998 539 13.5 – ICI (Municipal real estate tax) 3,463 3,911 -448 -11.5 – local council taxes 1,960 1,977 -17 -0.9 – taxes paid abroad 336 440 -104 -23.6 – INVIM (tax on increased value on properties) 63 391 -328 -83.9 – ”Imposte sostitutive” (laws 85/95 and 124/93) 15 3,333 -3,318 -99.5 – penalties for late tax rolls 51 14 37 … – other indirect taxes 495 129 366 … Others 19,712 15,116 4,596 30.4
267 SECTION 5
DEPRECIATION AND AMORTIZATION, PROVISIONS AND RECOVERIES
Change 2000 1999 absolute % CAPTION 90 "DEPRECIATION AND AMORTIZATION OF INTANGIBLE AND TANGIBLE FIXED ASSETS” 189,209 127,439 61,770 48.5 Tangible fixed assets – Properties 12,964 11,935 1,029 8.6 – Furniture and fittings 1,768 1,515 253 16.7 – Machinery and equipment 10,467 9,463 1,004 10.6 – Leased assets 123,203 70,920 52,283 73.7 Total (a) 148,402 93,833 54,569 58.2 Intangible fixed assets (1) – Software 8,396 7,330 1,066 14.5 – Installation costs 4,242 4,644 -402 -8.7 – Merger cost - - - - – Goodwill 6,716 6,716 - - – Goodwill arising from consolidation 10,522 374 10,148 … – Goodwill arising from application of equity method 2,810 4,533 -1,723 -38 – Others 8,121 10,009 -1,888 -18.9 Total (b) 40,807 33,606 7,201 21.4 Total (a+b) 189,209 127,439 61,770 48.5
Change 2000 1999 absolute % CAPTION 100 "PROVISIONS FOR RISKS AND CHARGES” 6,086 2,751 3,335 … Provisions: – for bad leasing loans 290 - 290 … – for in-house insurance scheme 600 437 163 37.3 – for rinegotiation building loans Law 133/99 2,728 - 2,728 … – for legal proceedings 500 2,314 -1,814 -78.4 –others 1,968 - 1,968 …
Change 2000 1999 absolute % 5.1 CAPTION 120 "PROVISIONS FOR LOAN LOSSES AND FOR GUARANTEES AND COMMITMENTS" 109,142 75,404 33,738 44.7 (a) provisions for loan losses 107,342 75,404 31,938 42.4 including: – lump-sum allowances for country risks 631 1,427 -796 -55.8 – other lump-sum allowances 12,444 9,150 3,294 36.0 (b) provisions for guarantees and commitments 1,800 - 1800 - including: – lump-sum allowances for country risks - - - - – other lump-sum allowances - - - -
268 Change 2000 1999 absolute % CAPTION 130 "RECOVERIES OF LOANS AND REVERSALS OF PROVISIONS FOR GUARANTEES AND COMMITMENTS" 22,08 24,99 2,913 11.7 1 4 – bad loans -principal 2,488 2,549 -61 -2.4 – watchlists - principal 1,093 1,158 -65 -5.6 – interest - others - 2,825 -2,825 … – interest arrears on loans 6,724 8,812 -2,088 -23.7 – credits written-off 7,816 8,028 -212 -2.6 – interest credits related to tax collection services 80 132 -52 -39.4 – country risks 3,611 496 3,115 … – provision for guarantees and commitments 269 994 -725 -72.9
(1) Recoveries for which the reasons for previous provisions cease, either fully or in part, to apply.
Change 2000 1999 absolute % CAPTION 140 “ADDITIONAL PROVISIONS FOR LOAN LOSSES” 10,613 7,816 2,797 35.8
Change 2000 1999 absolute % CAPTION 150 “WRITE-DOWNS TO FINANCIAL FIXED ASSETS” 1,756 2,842 -1,086 -38.2
Change 2000 1999 absolute % CAPTION 160 “RECOVERIES OF FINANCIAL FIXED ASSETS” 54 1,977 -1,923 -97.3
269 SECTION 6
OTHER INCOME STATEMENT CAPTIONS
Change 2000 1999 absolute % 6.1 CAPTION 70 “OTHER OPERATING INCOME” 245,249 150,237 95,012 63.2 Leasing rents 174,158 93,950 80,208 85.4 Amounts recovered from third parties 55,995 43,454 12,541 28.9 including: stamp duty recovered 34,238 28,416 5,822 20.5 Rental income 8,518 7,601 917 12.1 Repayments from leased assets 890 715 175 24.5 Gains from transfer and revaluation of leased assets 1,532 1,349 183 13.6 Others 4,156 3,168 988 31.2
Change 2000 1999 absolute % 6.2 CAPTION 110 “OTHER OPERATING EXPENSES” 20,454 11,521 8,933 77.5 Recognised losses on leased assets sold 16,552 8,642 7,910 91.5 Leasing charges 3,160 2,813 347 12.3 Other 742 66 676 …
Change 2000 1999 absolute % CAPTION 170 "PROFIT (LOSSES) ON INVESTMENTS CARRIED AT EQUITY" -1,244 -53,984 52,740 -97.7-97.7 Eptaconsors SpA 55,922 4,407 51,515 … Levante Norditalia Assicurazioni SpA -65,266 -64,074 -1,192 1.9 Carige Vita Nuova Assicurazioni SpA 5,113 175 4,938 … Bankenunion AG 20 437 -417 -95.4 Autostrada dei Fiori SpA 2,967 5,071 -2,104 -41.5
The negative value of this item for 2000 stems from the writing down of the infra-group gain of Lit. 66,032 million realised by Levante Norditalia Assicurazioni through the sale of 40% of its holding in Carige Vita Nuova to Banca Carige. Eptaconsors SpA’s share of the Group’s net profit for 1999 and 2000 is Lit. 13,449 million and Lit. 42,473 million, respectively.
270 Change 2000 1999 absolute % 6.3 CAPTION 190 “EXTRAORDINARY INCOME" 24,076 61,893 -37,817 -61.1 Tax credits following requests for refund - 5,624 -5,624 …. Interest on tax credits following requests for refund - 1,245 -1,245 … Surplus in reserves for taxation 1,408 2,881 -1,473 -51.1 Gains from releases: holdings 3,970 6,321 -2,351 -37.2 Gains from releases: furniture and premises 3,768 3,394 374 11.0 Advanced taxation originating in previous years 7,371 22,722 -15,351 -67.6 Adjustments stemming from consolidation 3,246 - 3,246 … Valuation recoveries to net equity of - - - … Cassa di Risparmio di Savona SpA - 14,217 -14,217 … Other 4,313 5,489 -1,176 -21.4
Change 2000 1999 absolute % 6.4 CAPTION 200 “EXTRAORDINARY EXPENSES” 8,838 15,401 -6,563 -42.6 Retirement incentives 4,221 4,581 -360 -7.9 Losses from releases: furniture and premises 521 378 143 37.8 Amortisation on previous years relative to Cassa di Risparmio di Savona - 4,006 -4,006 … Write down on pre-consolidation profit realised by Banca del Monte di Lucca - 1,096 -1,096 … Losses from releases: holdings 4 3,189 -3,185 -99.9 Other 4,092 2,151 1,941 90.2
Change 2000 1999 absolute % CAPTION 240 “INCOME TAXES” 159,877 156,645 3,232 2.1 Current tax expense 157,297 152,508 4,789 3.1 Changes in taxes paid 1,919 -2,878 4,797 … Changes in deferred tax 661 7,015 -6,354 -90.6 Income tax for the year 159,877 156,645 3,232 2.1
271 SECTION 7
OTHER INFORMATION REGARDING THE INCOME STATEMENT
7.1 GEOGRAPHIC DISTRIBUTION OF REVENUES
Banca Carige prevalently works in Italy; the first branch outside Italy was opened in Nice (France) on 9/7/94.
31/12/00 Other Italy Total Captions countries 10 Interest income and similar revenue 1,181,828 7,414 1,189,242 30 Dividends and other revenues 18,750 - 18,750 40 Commission income 328,647 824 329,471 60 Gains from financial transactions, net 22,212 21 22,233 70 Other operating income 245,203 46 245,249 Total 1,796,640 8,305 1,804,945
31/12/99 Other Italy Total Captions countries 10 Interest income and similar revenue 881,980 5,760 887,740 30 Dividends and other revenues 49,461 - 49,461 40 Commission income 272,955 781 273,736 60 Gains from financial transactions, net 80,778 19 80,797 70 Other operating income 150,151 86 150,237 Total 1,435,325 6,646 1,441,971
272 PART D OTHER INFORMATION
SECTION 1
DIRECTORS AND STATUTORY AUDITORS
31/12/00 31/12/99 1.1 EMOLUMENTS (a) directors 2,335 2,901 (b) statutory auditors 459 449
The amounts refer to emoluments paid to directors and statutory auditors in the carrying out of those duties related specifically to Banca Carige. The emoluments for 1999 include also those paid by Cassa di Risparmio di Savona.
1.2 CREDITS AND GUARANTEES GIVEN (a) directors – clean credits 223 298 – guarantees given - - (b) statutory auditors – clean credits 215 199 – guarantees given - -
273 REPORT OF THE BOARD OF STATUTORY AUDITORS
274 REPORT OF THE BOARD OF STATUTORY AUDITORS ON THE BANCA CARIGE GROUP CONSOLIDATED FINANCIAL STATEMENT AT 31/12/99
To the shareholders of Banca Carige SpA,
The Directors of Banca Carige SpA have prepared the Consolidated Financial Statements at 31/12/00 in accordance with relevant legislation.
We carried out our supervisory duties according to the codes of best practice for statutory auditors of listed companies recommended by the Italian Council of Chartered Accountants.
Pursuant to Legislative decree no. 58 of 24/2/98, KPMG SpA audited the consolidated financial statements of the Banca Carige Group as at and for the year ended 31/12/00 and reviewed the contents of the directors’ report for consistency with the financial statements. The auditors expressed the view that the consolidated financial statements are clearly stated and give a true and fair picture of the financial position and results of the Banca Carige Group.
We confirm the existence of effective co-ordination in activities and information flows between the parent company and its subsidiaries and associated companies.
In particular: n balance sheet and income statement figures are expressed in Lira and Euro; the latter derives from the application of the exchange translation rate required by CONSOB recommendation no. 98083971 dated 26th October 1998; n the accounting principles are in compliance with legislation and are suitable for the Bank’s activities; n the area of consolidation conforms to the provisions of Legislative decree 87/92; n the methods of consolidation adopted are those foreseen by relevant legislation.
With reference to the methods of consolidation we can report that: n the subsidiaries operating in banking and finance-related activities have been fully consolidated.
The following companies were fully consolidated: Galeazzo Srl; Columbus Carige Immobiliare SpA; Immobiliare Ettore Vernazza SpA; Cassa di Risparmio di Savona SpA; Ligure Leasing SpA; Immobiliare Carisa S.r.l.; Centro Fiduciario CF SpA; Banca del Monte di Lucca SpA.
To aid comparison between these financial statements and those relative to the period ending 31/12/99, it should be noted that during 1999 Banca Carige SpA acquired a 51% holding in Banca del Monte di Lucca SpA, which was fully consolidated. Awaiting Bank of Italy approval, the subsidiaries belonging to the Cassa di Risparmio di Savona Group were accounted for in the statements at 31/12/99 according to the equity method. The companies were fully consolidated in the first half of 2000 following Bank of Italy approval of consolidation into the Banca Carige Group received on 17th April 2000. Details of the accounting effects of the consolidation of the Savona Group subsidiaries are given in the explanatory notes whilst the Directors’ Report makes a detailed comparison of major financial and economic aggregates between the situation at 31/12/00 and the pro-forma position at 31/12/99.
The following companies were accounted for under the equity method: CARIGE Vita Nuova SpA; Levante Norditalia SpA; Frankfurter Bankgesellchaft AG; Autostrada dei Fiori SpA; Bankenunion AG and Eptaconsors SpA.
275 The insurance companies, Levante Norditalia and CARIGE Vita Nuova, albeit subsidiaries, were accounted for under the equity method in the light of the nature of insurance-related activities and the characteristics of insurance companies’ balance sheets. n - the consolidation-related transactions described in the Board of Directors’ Report conform to relevant legislation. In particular, we confirm that the intercompany capital gain resulting from the sale of the subsidiary Levante Norditalia’s 40% holding in CARIGE Vita Nuova SpA to Banca Carige SpA was written off. n The evaluation criteria used for the preparation of the financial statements of those companies consolidated were made compatible by adjusting significant differences. In particular, the securities portfolio of Banca del Monte di Lucca is evaluated according to the LIFO method. However, this does not affect the asset-base or economic structure of the Group. n the explanatory notes contain information which the banking industry is required to provide to Consob (communication no. 1011405 of 15th February 2001 adopted pursuant to article 114, Legislative decree 58/98) relating to certain significant events which occurred during 2000. n in the explanatory notes, the Directors illustrate the ceding without recourse of a portion of the bad loan portfolio of Banca Carige within the confines of Law 130/99 relative to the securitisation of credit. The transaction, performed on 21/12/2000, was effective from 31/12/00 and related to a gross balance sheet value of customer loans amounting to Lit. 566.4 bn classified as bad loans at 30/11/2000 and backed at the same date either fully or in part by voluntary or legally imposed guarantees. Securitisation determined a reduction in the value of the loans ceded amounting to Lit. 120.6 bn, which was recorded at caption 130 ‘Share premium reserve’ as foreseen by article 6, Law 130/99. The total will be written down on a straight-line basis from the income statement over five years starting from the year in which the reduction in value of the loans ceded occurred (2000).
We confirm that the Directors’ report for the year, which accompanies these consolidated statements, is in accordance with the contents required by article 3, Legislative decree 87/92.
In the light of above and on the basis of information provided by the external auditors both in their periodic review of the Bank’s affairs and in their auditing of these financial statements, no events came to our attention which could inhibit the approval of these Consolidated Financial Statements as at and for the year ended 31/12/2000.
Genoa, 10th April 2001,
276 REPORT OF THE INDEPENDENT AUDITORS
277
ATTACHMENTS
280 STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY
(millions of Italian Lire)
Capital Additional Legal Other stock paid-in reserve Reserves capital
Shareholders' equity at 31/12/99 1,970,173 299,189 53,191 147,966 Allocation of 1999 et income - reserves 18,257 - dividends paid - 24,618 Allocation to reserve for dividends on own shares - 1,298
Utilisation of share premium reserve related to securitisation - 57,821 Changes reserve for the purchase of treasury stock - 51,439 Reserve for the purchase of treasury stock Changes in the riserves for loan losses Changes in decreases in net equity Reduced value stemming from application of equity method and various consolidation-related entries - 759 2000 net income Stockholders' equity at 31/12/00 1,970,173 241,368 71,448 69,852
281 Reserve for the Negative difference Reserve for Revaluation Net income Reserves Total purchase of arising from the general reserve for loan treasury stock application of the banking risks losses equity method
9,788 2,666 10,000 15,587 127,603 5,000 2,641,163
- 18,257 - - 109,346 133,964
- 1,298
- 57,821
- 51,439
51,439 - 24,342 - 51,439
2,941 2,941
1,168 1,168
- 759 155,406 155,406
61,227 3,834 10,000 15,587 155,406 7,941 2,606,836
282