BANCABANCA CARIGECARIGE Cassa di Risparmio di Genova e Imperia
Italian Large and Mid Cap Conference 2007 Paris, 24 May 2007
Giacomo Burro, CFO
-1- BANCA CARIGE Agenda
Carige Group Overview
Strategic Plan 2006-2008
2006 & 1Q07 Results Conference 2007 Conference Italian Large and Mid Cap
Annexes
-2- BANCA CARIGE Banca Carige Group today
~52.000 small shareholders
Fondazione CR Assicurazioni Genova e CNCE WestLB Generali Market Imperia
41.15% 14.56% 5.05% 2.10% 37.14%
Banca Carige SpA Cassa di Risparmio di Genova e Imperia
Banking Insurance Finance Trustee Real Estate •Centro • Columbus • Banca Carige • Carige Vita Nuova (life) •Carige AM SGR Fiduciario Imm.re •Cr Savona • Carige Ass.ni (non life) • Creditis (consumer credit) • Cr Carrara •BM Lucca •B. CesarePonti
Main Companies only
-3- BANCA CARIGE A medium-sized Group
MARKET CAP €b, data at 17.05.07
CARIGE MARKET CAP RATING
• Ordinary shares 4.6 €b • Fitch A 99,4 • Saving shares 0.7 €b • Moody’s A2 • S&P’s A- 77,3
17,5 14,3 12,7 10,2 5,3 3,4 1,4
e S l talia i MP Banca Carige Creva Credem Ubi BPM+BPER redit+Cap c Banco Popolar Uni IntesaSanPaolo+CrFi
Banco Popolare= BPVN+BPI ; UBI Banca: BPU+B.Lombarda
-4- BANCA CARIGE A long term stable growth...
Annual average yield per ordinary share since IPO 2003 Capital increase and 2006 Capital increase (€ 215M) Capital gain (a) 12.4% acq.of CR Carrara
Dividend Yield (b) 3.6% 2004 Carige AM SGR and acq.of Banca Ponti Total Return (a+b) 16.0%
Price at 15.05.07 (3.81 €) Price Vol. € #m 2000-02 124 branches from BdS. Intesa and Capitalia 4.0 1997 Acq. of Insurance Companies 1483 Monte di Pietà di Genova 1998 Capital increase underwritten by 15 institutional investors 1846 Cassa Risparmio Genova 3.0 1999 partnership agreements 1929 Merger Monte + CR (CNCE. WestLB and El Monte) and Genova acq. of BML and CR Savona 10 1991 Banca Carige Spa - Foundation 2.0 5
1.0
1483 1846 1929 1991 1995 2007 IPO
-5- BANCA CARIGE ... through a long season of acquisitions
Year CAPITAL COLLECTED €m Year ACQUISITIONS €m
1994-95 IPO 105 1993 - 99 Cassa di Risparmio di Savona 227
1996-97 Bond conversion into new shares 61 1991-06 Insurance companies 317
1997 Capital increase underwritten 46 1999-02-06 Banca del Monte di Lucca 70 by La Basilese
2000 21 branches from Banco di Sicilia 60 Capital increase underwritten 1998 by institutional investors 116 2001 61 branches from Intesa 277
Capital increase underwritten 1999 by CNCEP. CDC. WestLB 236 2002 42 branches from Capitalia 127
2001 Issue of a subordinated loan 400 2003 Cassa di Risparmio di Carrara 174
Capital increases and issue of 2003-06 subordinated convertible bonds 521 2004-06 Banca Cesare Ponti 50
Total 1.485 Total 1.302
More than 85% of capital collected already invested in acquisition
-6- BANCA CARIGE A franchise with its heart in Liguria
1989 2006
131 (96%) 250 (49%) branches branches 4 7 in Liguria; in Liguria for a 1 1 94 (69%) in the 43/60 12/30 30% market 39/24 3 area of Genoa South share 2 20/18 France 131 1 250/15 56/24 4/11 1/5 13 33/35 2 9/34 7 3 7/24 25
37/53
Banking branches Insurance outlets Branches/ Branches Employees Regions outlets Employees Regions
Bank 137 2.962 4 Banks 512 4.671 12/20 Insurances 395 361 20/20 Group 907 5.032 20/20
-7- BANCA CARIGE Long term growth of volumes and results
LENDING AND DEPOSITS NET PROFIT (€b) (€m)
52.4 138 6x 7X
8.4 20
1989 2006 1989 2006
SHAREHOLDERS’ EQUITY (1) EMPLOYEES (€b) (#)
1.7 5.029 9x 2.962 1.7x 0.2
1989 2006 1989 2006
(1) Bank of Italy partecipation not included (656 €m)
-8- BANCA CARIGE Focus on retail
by segment by area L Large Corporate Small Business South + Isles 11% O 8% 4% Individuals Centre Other 8% A 31% 16% Public N Entities 6% North Liguria S SME’s 36% 29% 51%
LOANS TO CUSTOMERS AT 31.12.2006: 16.1€b
D by segment by area E Other Private Centre South + Isles P 6% 13% 15% 18% O North S Corporate 12% 24% I Liguria T Affluent & Mass 48% 64% S TOTAL DEPOSITS AT 31.12.2006: 35.8 €b
CORPORATE: Small business = turnover<1m ; SMEs= <100m€; Large Corporate= >100m€ INDIVIDUALS: Retail or Mass Market= deposits<50k€; Affluent >50k€; Private= >250k€ outside Liguria, >350k€ Liguria
-9- BANCA CARIGE Agenda
Carige Group Overview
Strategic Plan 2006-2008
2006 & 1Q07 Results Conference 2007 Conference Italian Large and Mid Cap
Annexes
-10- BANCA CARIGE Our strategy
Independence through growth
1990 - 1998 1999 - 2004 2005 - 2008
Capital base Expansion and Rationalization strengthening and diversification and opening to new and shareholders profitability enhancement
-11- BANCA CARIGE Our mission
A national financial conglomerate equipped to provide banking. financial. insurance and pension solutions establishing strong ties with local markets, able to differentiate in the quality of service through an integrated multi-channel distribution system and the quality of resources and structures
Quality of resources Conglomerate National Multi-channel and structures
• Complete offer of • Stronghold in Liguria • Distribution • Specialization of banking. financial and •Out of Liguriait system based on distribution and production insurance products and distinguishes itself branches. mobile structures services and remote for the attention to • Unitary management of the channel • Aggregation point for the relationship with Group’s key-expertises smaller banks local communities • Focus on retail • Professional development • Widespread and of human resources intensive use of technology
-12- BANCA CARIGE The Strategic Plan 2006-2008
CORE PRIORITIES 2008 TARGET
• Profitability enhancement of 20052005 2008e2008e CHANGECHANGE 08/05 08/05 Strengthening of subsidiaries (banks and operating insurances) and of each business area (lending, wealth 220 Cagr +18.9% efficiency and management, payment system) profitability NET PROFIT •Cost Management €m 131 enhancement
• Increase of volumes per employee: Growth ¾ cross-selling, up-selling and VOLUMES 47 57 Cagr +6.7% , +10€b €b through retention in Liguria productivity ¾ rising of market share outside Liguria, also in synergy with COST improvement INCOME 66.4 54.7 -11.7pp insurance agents % • Re-engineering of business processes ROE adj. 6.2 8.2 % . (*) +2.0pp
Risk • Control of the economic impact of all kind of risks TIER I 5.4 8.2 +2.8pp management %
(*) Equity net of revaluation of the participation in Bank of Italy
-13- BANCA CARIGE Organizational structure
GENERALGENERAL MANAGERMANAGER
MANAGEMENTMANAGEMENT & & ADMINISTRATION CONTROLCONTROL ADMINISTRATION
PRODUCTIONPRODUCTION DISTRIBUTIONDISTRIBUTION
Marketing & Branch Other Consumer Corporate Wealth Payment Marketing & Branch Other LendingConsumer LendingCorporate ManagementWealth SystemsPayment Commercial Network Sales Lending Lending Management Systems CommercialPlanning Network ChannelsSales Planning Channels
-14- BANCA CARIGE The Strategic Projects
PRODUCTION DISTRIBUTION SUPPORT
JV-CONSUMER CREDIT LIGURIA PROJECT NEW FRONT OFFICE (CUSTOMER SEGMENTATION) COMMERCIAL PFP STRENGTHENING PROGRAM REVENUES SIDE COLLABORATION BRANCHES- INSURANCE AGENTS
NEW BRANCHES PLAN
MICROCHIP REMOTE BANKING (ATM) COST MANAGEMENT COST SIDE BACK OFFICE CENTRALISATION
RISK BASEL II SIDE
Details in annexes
About 60 €m of investments in 2007…
€m €m 2121€m for NEW BRANCHES 3939€m for INNOVATION & IT
-15- BANCA CARIGE Agenda
Carige Group Overview
Strategic Plan 2006-2008
2006 & 1Q07 Results Conference 2007 Conference Italian Large and Mid Cap
Annexes
-16- BANCA CARIGE 2006 Results
CARIGE GROUP 2005 2006 2008 VAR.VAR. CAGRCAGR CARIGE GROUP 2005 2006 2008 06-0506-05 08E-0508E-05
Total Deposits (€b) 33.6 35.8 39.96.6% 5.9% Loans to customers (€b) 14.0 16.1 17.014.7% 6.6% (*) (*) 160 +22% Net Profit (€m) 131 138 220 4.9% 18.9% Shareholders’ Equity (€b) 2.1 2.6 2.7 19.5% 7.9%
Cost Income 66.4% 56.6% 54.7% -9.8 pp -11.7 pp ROE 6.2% 5.4% 8.2% -0.8 pp +2.0 pp ROE adj (**) 8.3% 7.1% 10.3% -1.2 pp +2.0 pp
Tier 1 5.4% 8.4% 8.2% +3.0 pp +2.8 pp Total capital ratio 8.4% 10.7% 11.8% +2.3 pp +3.4 pp
(*) Carige Assicurazioni extraordinary gross provisions to reserves: 48€m (**) Equity net of revaluation of the participation in Bank of Italy
-17- BANCA CARIGE 2006 Results
2006 key-points: • Cost Income reduced by 10 points • Good performance in revenues • Costs under control
NET INTEREST INCOME REVENUES €m
(*) 1.011 558 604 COST INCOME +17.4% % 874 475 CAGR +12.3% CAGR 8.3% 779 9.1% 66.4 2005 2006 2008e BP 56.6 54.7 2005 2006 2008e OTHER REVENUES BP 407 2005 2006 2008e OPERATING COSTS 316 304 CAGR BP €m +3.9% 10.2%
560 2005 2006 2008e 524 503 BP -4.2% CAGR 2.2%
(*) Cost Income: provisions to reserves for risks and charges not included 2005 2006 2008e BP
-18- BANCA CARIGE 2006 Results
CARIGE VS COMPETITORS
COST INCOME______COST INCOME______2005, % 2006, %
Av. 62.8% Av. 57.3%
66.9 66.4 66.0 66.0 64.7 62.6 61.7 61.1 59.1 53.7 60.9 60.6 60.5 58.4 56.6 56.5 56.4 56.2 53.7 52.7
it it d d dem BPM MPS dem olare MPS BPM e olare Carige e p Carige p o Cr o Cr P Unicre Capitalia Capitalia Unicre P CRFirenze UBI Banca CRFirenzeUBI Banca
Banco IntesaSanPaolo Banco IntesaSanPaolo
Banco Popolare= BPVN+BPI ; UBI Banca: BPU+B.Lombarda (1) Carige Cost Income : provisions to reserves for risks and charges not included \ KBW - 12.04.07 report
-19- BANCA CARIGE 2006 Results
High performance of loans to customers, already higher than 2008 targets and driven by mortgages (both to families and SME); Carige outperformed : +14.7% vs 11.9%
of which: PRIVATE SME-CORPORATE LOANS TO 6.9 CUSTOMERS 4.2 €b 6.1 +14.5% 3.3 +27.1%
17.0 2005 2006 2005 2006 16.1 +14.7% of which: 14.0 CAGR ML TERM 6.6% SHORT TERM
11.1 10.0 +11.4% 2005 2006 2008e 4.4 BP 3.5 +23.5%
2005 2006 2005 2006
-20- BANCA CARIGE 2006 Results
Total Deposits up 6.6% to 35.8€b; Asset in custody better than Asset under Management
DIRECT + DEPOSITS
TOTAL DEPOSITS 16.3 15.5 +5.3% €b ASSET + UNDER MANAG +5.1% net of 2005 2006 10.2 EMTN Program 39.9 9.7 +5.1% 35.8 +6.6% CAGR INDIRECT 33.6 5.9% 2005 2006 + DEPOSITS ASSET 19.5 + IN CUSTODY 18.1 +7.7% 9.2 8.4 +10.6% 2005 2006 2008e BP
2005 2006 2005 2006
-21- BANCA CARIGE 1Q07 Results
1Q07 TOTAL DEPOSITS (€b) LOANS TO CUSTOMERS (€b)
• Results in line and 39.9 38.7 even better than 35.8 36.8 33.8 18.0 17.0 2008 targets 16.1 16.4 14.3 • Double digit growth of net profit (+27.3% 1Q062006 1Q07 07e 08e 1Q062006 1Q07 07e 08e y/y) and of total Ch. 1Q07/2006 +2.8% Ch. 1Q07/2006 +2.3% revenues (+16.4% Ch. 1Q06/2005 +0.5% Ch. 1Q06/2005 +1.7% y/y) Ch. 07e/06 +8.2% Ch. 07e/06 +11.9% CAGR 08e/05 +6.4% CAGR 08e/05 +7.3% • Costs under control (+2.4% y/y) COST INCOME (%) NET PROFIT (€b)
• Better efficiency, 160pf 220 57.5 57.6 202 C/I ratio at 50.7% 54.6 54.7 138 50.7 42.5 54.1 • Up both total deposits (+2.8% on 1Q062006 1Q07 07e 08e 1Q062006 1Q07 07e 08e a quarterly base) and Ch. 1Q07/1Q06 -6.8 pp Ch.1Q07/1Q06: +27.3% loans to customers Ch. 06/05 -9.8 pp Ch. 06/05: +4.9% (+22%pf) Ch. 07e/06 -3.0 pp Ch. 07e/06: +49.2% (+2.3%) Ch. 08e/05 -11.7 pp CAGR 08e/05: +18.9%
-22- BANCA CARIGE Agenda
Carige Group Overview
Strategic Plan 2006-2008
2006 & 1Q07 Results Conference 2007 Conference Italian Large and Mid Cap
Annexes : details on strategic projects
-23- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE TheThe planplan ofof internalinternal growthgrowth
The Group has drawn up a plan to increase the number of its branches between 2006 and 2009. The new branches will be principally opened in the regions next to Liguria (Lombardy, Piedmont, Emilia-Romagna, Tuscany, South France), in order to enforce the brand where it already exists. The Plan foresees 98 openings (75 under Carige brand and 23 under the brands of the other banks of the Group).
CARIGE GROUP BRANCHES NEW BRANCHES BY BANK The localization of the new branches responds to two main principles: +98 branches from 2005 to 2009 75 595 - market attractiveness 512 534 4 (potential customers, 497 competition) +22 9 +15 -achievement of a market CR 10 Carrara share in a range of 3-5% 2005 ‘06 ‘07 2009 TOTAL 98
-24- BANCA CARIGE The Strategic Projects
COSTCOST SIDE SIDE Back-officeBack-office centralisationcentralisation
What is it? A Process Reengineering project aimed to re-focus branches on their core sales activities
• Transfer of 35-40% of the back-office activities from the branches to two Scope of the new central structures project • Conversion of more than 100 employees from back office activities to sales
• Creation of two new central structures Project • All branches of the Group involved highlights • Two migration phases: #1:Liguria branches ; #2:outside Liguria branches
• The two new central structures are operating in Genoa and Savona (178 State employees) of the art • 402 branches implemented (out of 512) • End of project: 20 Feb. ’07
-25- BANCA CARIGE The Strategic Projects
COSTCOST SIDE SIDE NewNew FrontFront OfficeOffice
What is it? An integrated and marketing oriented new sales system: a new IT platform & a new branch layout
Scope of the • From a “traditional branch” to a new “financial shop” project • A customer oriented approach • A paper less model
• A unique access point (single sign on) for an integrated platform of Project relationship management with a stronger commercial approach highlights • Three new desks: teller, commercial and branch manager
State • First tests: end of February 2007 of the art • Teller component: end of July 2008 (roll out) • Commercial and branch manager components: end of 2008
-26- BANCA CARIGE The Strategic Projects
COSTCOST SIDE SIDE CostCost ManagementManagement
What is it? A rationalization of the cost structure
Scope of the • A stable reduction of the cost structure project • Reengineering of the purchasing process Two new functions at a Group level: • Purchasing Office at a Group level (Management of deals and purchases, Project Benchmarking -prices and services, Price/volume analysis, Zero based costing highlights method) •Cost Management office (Control of expense levels, Support to short and medium term planning, Process Reengineering)
€m ANNUAL 13.0 SAVINGS State ACHIEVED 10.0 of the art 13 €m
2.71
5.0
Results 0 INFO SECURITY TLC1 IT ENERGY HR POS Global Fleet M. PROVIDER service TOTAL IMPACT MAIL MARKETING TLC2 IT E-PROCUREMENT (Maintenance) Communications (Stationary) expenses ON OPERATING COSTS
-27- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE CommercialCommercial strengtheningstrengthening programprogram
A structural reengineering of the branches’ selling process (branches outside What is it? Liguria)
• Improvement of the branch cost/income ratio outside Liguria: target Scope of the cost/income <50% • Creation of the organizational conditions (structure, skills and systems) to project permanently support the network in further commercial development of the Group (“selling more and selling better”)
• 250 branches involved • 7 phases of the project (first phase started in November 2004, the last one in October 2005) Project • A customer analysis system highlights • Identification of commercial initiatives / alliances on the target customers • A dedicated sale channel (developers and call center) • A dedicated monitoring system
-28- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE CommercialCommercial strengtheningstrengthening programprogram
Number of Branches branches Cost Income
State of the art 2004 Branches 50% Involved in 242 -9pp-9pp the project 2006 41%
Branches 2004 32% Not 236 -2pp-2pp Involved 2006 30%
-29- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE CollaborationCollaboration branchesbranches -- insurance insurance agentsagents
What is it? A definition of a set of rules and methods in the relationship between branches and insurance agents (Project name: “Insieme di più”)
Scope of the Increasing the cross-selling ratio between banks’ customers and insurances’ project customers through the respective customer base
• Monitoring and coordination system at a central level Project • A system based on customers’ lists and referrals highlights • Exploitation of natural skills: banks’ employees sell banking products to insurance customers and insurance agents sell insurance products to bank customers
• 179 insurance agents and 240 branches involved at 2006 Year-end • Assurbanca (Banking services sold by bank branches to insurance customers): State 9 75.000 potential customers of the art 9 19.766 contacts 9 2.839 contracts signed 9 HIT RATE: 14% of contacts (2006 Year-end) • Bancassurance (insurance products sold by agents to bank customers): 9 41.000 potential customers 9 31.484 contacts 9 6.342 contracts signed 9 HIT RATE: 20% of contacts (2006 Year-end)
-30- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE CollaborationCollaboration branchesbranches -- insurance insurance agentsagents
CustomersCustomers ofof thethe GroupGroup SharedShared customerscustomers
1.700 1.700 ..a high n. of Extra Liguria 1.750 Extra Liguria customers Liguria Liguria potential [‘000] 1.500 still to exploit, 1.000 1.250 mainly 1.000 20 1.000 outside 400 700 30 Liguria 750
500 630 700 n. of 600 250 customers 50 [‘000] 70 0 TOTAL FROM FROM Shared BANKS INSURANCES customers
-31- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE LiguriaLiguria Project Project (customer (customer segmentation)segmentation)
Reorganization of the Liguria distribution channels through a customer What is it? segmentation
Scope of the • Increasing the “revenues per customer” ratio project • Up-selling and cross selling on existing customers
• Introduction of new distribution channels: affluent and small business Project consultants in addition to Large Corporate, SME and Private consultants highlights • A big potential to exploit: Carige has the leadership in Liguria (market share 30%) but more than 200,000 customers (about 33%) have only a product and in average each customer has 2.6 products (current account included)
At 2006 Year-end: State • 200 branches involved in the project of the art • 136 new affluent consultants • 100 new small business consultants
-32- BANCA CARIGE The Strategic Projects
REVENUEREVENUE SIDE SIDE JVJV -- Consumer Consumer CreditCredit
A newco (Creditis Servizi Finanziari SpA) in the sector of the consumer What is it? credit between Carige (51%) and its French shareholder CNCE (49%)
• Growth in the penetration of the consumer credit products both on the Scope of the Carige client base and on the open market project • Exploitation of skills and technologies of Natixis Consumer Finance
• Headquarter in Genoa Project • Business Model - products: personal loans, revolving cards, salary backed loans highlights - commercial focus: Carige customers base for first 2 years, then open market • Business plan targets (Y5 after start): - net profit : 13 €m - volumes: more than 1 €b - employees: 100
State • Constitution of the newco at 2006 Year-end of the art • Start of the commercial activities: 2H07
-33- BANCA CARIGE Disclaimer
This document has been prepared by Banca Carige Spa solely for information purposes and for use in presentation of the Group’s strategies and financials. The information contained herein has not been independently verified. No representation or warranty. express or implied.. is made as to. and no reliance should be placed on. the fairness. accuracy. completeness or correctness of the information or opinions contained herein. Neither the company. its advisors or representatives shall have any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and. accordingly. actual results may vary.
This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
The distribution of this presentation in certain jurisdictions may be restricted by law. Recipients of this presentation should inform themselves about and observe such restrictions.
The information herein may not be reproduced or published in whole or in part. for any purpose. or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations.
-34- BANCA CARIGE