Credito Artigiano: Quarterly report as of 31.3.2006 approved. Effects of first application of IAS/IFRS accounting principles illustrated.
| (figures shown in /000) | 31.3.2006 | 31.3.2005 | Var. |
| Net profit for the period | 7,932 | 6,495 | +22.1% |
| Interest margin | 30,342 | 26,637 | +13.9% |
| Brokerage margin | 46,314 | 40,683 | +13.8% |
| Net results for financial management | 40,730 | 35,907 | +13.4% |
| Gross operating profit on activities | 12,597 | 10,233 | +23.1% |
| (figures shown in millions of euros) | 31.3.2006 | 31.12.2005 | Var. |
| Direct deposits | 4,163 | 3,922 | + 6.15% |
| Indirect deposits | 4,576 | 4,469 | +2.4% |
| Overall deposits | 8,739 | 8,391 | +4.2% |
| Loans to customers | 3,874 | 3,716 | +4.3% |
Milan, 2nd May 2006 - The Board of Directors of Credito Artigiano, convened today under Chairman Angelo Palma, examined and approved the Quarterly Report as of 31st March 2006-drawn up for the first time according the new IAS/IFRS international accounting principles-which confirms balanced growth of balance sheet aggregates and further development of income indicators in line with company objectives.
With regard to the profit and loss account, compared to the corresponding period of the previous year, the interest margin grew by 13.9% supported by progressive, balanced development of managed assets and stands at 30.3 million. Net commissions total 14.5 million, a 12.1% improvement in correlation with the very positive dynamics of commissions on loan operations and financial brokerage as well as the still significant, although less marked, development of commissions for current accounts and payment services. The brokerage margin stands at 46.3 million, an increase of 13.8% over first quarter 2005.
Net adjustments to loans and other financial activities for a total value of 5.6 million establish the net financial operating result at 40.7 million, an increase of 13.4% over first quarter 2005.
Operating costs total 28.1 million, compared with 25.7 million, an annual increase of 9.6%. The cost-income ratio-the relationship between operating costs and the brokerage margin-confirms progressive improvement and stands at 60.7% compared to 63.1% in first quarter 2005.
Gross operating results reached 12.6 million compared with 10.2 million in first quarter 2005, an annual increase of more than 23%. Profits from investments measured using the net equity method for 2 million (+24.6% over March 2005) and tax expenses-estimated at 6.7 million-bring the period net result to 7.9 million, an improvement of 22.1% over the 6.5 million from first quarter 2005.
Overall deposits at the end of March 2006 reached 8,739 million, compared to 8,391 million in December 2005, an increase of 4.2%. Direct deposits totalled 4,163 million, an increase of 6.2% over 3,922 million. A subordinated debenture loan for 60 million was entirely subscribed by retail clientele during the quarter. The objective of the issue was to guarantee maintenance and improvement of balance sheet ratios with a view towards operative growth goals.
Indirect deposits totalled 4,576 million, up 2.4% from 4,469 million in December 2005. The managed component, including the 374 million insurance sector, reached 2,124 million (+2% compared to 2,082 million).
Loans to clients stood at 3,874 million, up 4.3% over 3,716 million in December 2005. The medium/long-term component reached 1,555 million, an increase of 7.9% over 1,441 million at the end of 2005.
Overdue loans stood at 19.7 million compared to 17.4 million in December 2005. Other doubtful loans stood at 62.2 million compared to 59.3 million in December 2005. The ratio of net overdue loans to loans to clients stood at 0.51%, while the ratio between other doubtful loans and loans to client was 1.60%. Both indicators point to a contained and essentially stable credit risk profile compared with the same values from the end of 2005.
As of 31st March 2006, net assets were valued at 438.4 million.
Relevant Events After 31.3.2006 and Predicted Course of Management
The Board of Directors considers it probable that over the next few months further progress will be made in meeting operating goals with balanced, sustainable growth in the medium term.
Effects of First Application of IAS/IFRS International Accounting Principles
The 31st March 2005 quarterly report was accompanied by reconcilement statements providing a detailed explanation of the effects of the transition to the new IAS/IFRS international accounting principles on the bank's net assets as of 1st January 2005 and 31st December 2005, as well as on the 2005 profit and loss accounts. Application of international accounting principles resulted in a 29.6 million increase in net assets as of 1st January 2005, net of the consequent taxes of 17.4 million.
In detail, the main effects on net assets as of 1st January 2005 were due to:- assessment of real estate at fair value instead of the previous book value assessment in accordance with the provisions of IFRS 1, resulting in a positive change of 47.2 million
- the recovery of previous depreciation of land separately valued from buildings, which, since it has an undefined useful life, is no longer subject to depreciation, resulting in a positive change of 4.8 million
- reporting at recoverable value goodwill recognized during purchase of company divisions, which is no longer subject to amortization, resulting in a positive change of 4 million
- discounting of doubtful loans in accordance with the provisions of IAS 39, resulting in a negative change of 5.1 million
- measurement of credits in bonis to clients at amortized cost and application of fair value at the time of initial accounting of credits in bonis to banks, resulting in a total negative change of 6.6 million
- reduction of the provision for severance benefits valued based on actuarial calculations, resulting in a positive change of 2 million
- recovery of provision for risks and expenses aimed at covering generic risks, which are no longer recognized by the new accounting principles, resulting in a positive change of 1.3 million
In summary, the main variations relate to the measurement of investments according to the net equity method resulting in a positive change of 3.7 million, to the recovery of amortization of goodwill, resulting in a positive change of 4 million, and to the reporting of financial instruments at amortized cost resulting in a negative change of 1.7 million.
For further information, contact:
Tiziana Camozzi
Institutional Communication and Press Service
Telephone 02 80637471
Email: camozzi.tiziana@creval.it
Vittorio Pellegatta
Administrative Offices
Telephone 02 80637365
Email: pellegatta.vittorio@creval.it
Accounting schedules: reclassified balance sheet and income statement as of 31.03.2006
- available in italian -
