Credito Valtellinese Group: Consolidated financial statements and draft financial statements of the parent bank as at 31 December 2006 approved
Consolidated net profit at € 68.6 million (+23.6%)
Dividend of € 0.40
Total dividends of € 36.4 million (+15.9%)
Growth in main asset items:
Direct deposits at € 12,074 million (+15.1%)
Indirect deposits at € 12,371 million (+6.8%)
Loans to customers of € 11,367 million (+15.3%)
STOCK INCLUDED IN THE MIDEX INDEX OF BORSA ITALIANA
SHAREHOLDERS' MEETING CALLED FOR 21 APRIL 2007
| Consolidated figures (millions of euro) | 31.12.2006 | 31.12.2005 | Change |
| Net profit | 68,6 | 55,5 | + 23,6% |
| Interest margin | 347,4 | 297,2 | + 16,9% |
| Brokerage margin | 564,6 | 500,3 | + 12,9% |
| Net result of financial operations | 506,5 | 457,3 | + 10,8% |
| Operating costs | 370,3 | 341,9 | + 8,3% |
| Gross operating profit | 136,2 | 115,4 | + 18% |
| Direct deposits | 12.074 | 10.489 | + 15,1% |
| Indirect deposits | 12.371 | 11.587 | + 6,8% |
| Loans to customers | 11.367 | 9.863 | + 15,3% |
| Net equity | 882 | 756 | + 16,6% |
| Cost/income ratio (1) | 65,6% | 68,3% | |
| ROE (2) | 9,1% | 8,5% |
(1) Calculated as the ratio of operating costs to the brokerage margin
(2) Calculated a the ratio of the Parent Bank's share of net profit to shareholders' equity, excluding profit
Sondrio, 20 March 2007
The Board of Directors of Credito Valtellinese, chaired by Giovanni De Censi, met today and approved the financial statements of the Parent Bank, Credito Valtellinese S.c., and the consolidated financial statements as at 31 December 2006, which were presented by the General Manager, Miro Fiordi.At the same meeting, the Board expressed satisfaction that its stock had been admitted to trading on the Blue Chip Segment of the Mercato Telematico Azionario run by Borsa Italiana and included in the MIDEX index, which is made up of the largest companies on the exchange list in terms of capitalisation and liquidity, immediately after those included in the S&P/MIB index.
The results for the year, which outperformed the goals set in the 2006 Strategic Plan, included appreciable progress by profitability indicators and considerable growth of brokered volumes, driven by gradual, harmonious development of the operations of all Group banks. Consolidated net profit totalled € 68.6 million, up 23.6% over last year. The Parent Bank's net profit for the year totalled € 48.1 million, a 32.5% year-on-year increase.
The Board of Directors confirmed its intention of continue to deliver a high payout ratio and will propose the distribution of a dividend of € 0.40 per share to the shareholders' meeting, in line with last year's dividend, despite an increase in the number of shares making up share capital (+ 15.9%) due to the effect of the conversion in 2006 of the second tranche of the 2004/2007 2.80% Credito Valtellinese Convertible Bond Issue, which led to the issue of 12,502,809 new shares.
At the consolidated level, all earnings indicators showed improvement over the previous year.
The interest margin registered an improvement of 16.9%, rising to € 347.4 million, versus € 297.2 million, essentially due to the increase in brokered volumes. Net commissions totalled € 190.2 million, up 4% from € 182.9 million. The net result of trading activity was € 22.4 million, compared to € 16.4 million, a 37% increase year-on-year. Profits on disposal of other financial assets totalled € 3.4 million. The brokerage margin reached € 564.6 million, an improvement of 12.9% over the € 500.3 million recorded the previous year. Net value adjustments due to the impairment of financial assets, largely loans, totalled € 58 million, up 35.3% versus € 42.9 million in previous FY. In consequence, the net result of financial operations stood at € 506.5 million, a 10.8% increase year-on-year from € 457.3 million year-on-year. Operating costs stood at € 370.3 million, compared to € 341.9 million in 2006, up 8.3%. Specifically, personnel costs increased by 9.7%, reaching € 223 million compared to € 203.2 million of the previous year. Other administrative expenses, € 129.2 million, increased by 6% compared to € 121.9 million. The cost-to-income ratio stood at 65.6%, a further gradual improvement over 68.3% in 2005, due to the impact of the growth of operating income and a strict cost control policy, despite increased charges due to the expansion of the geographical network. Provisions for risks and charges, which are intended to cover the risk of negative outcomes of suits brought against the Group, totalled € 8.7 million, against € 7.6 million for the previous year. Value adjustments to tangible and intangible fixed assets came to a total of € 25.2 million, against € 21 million in 2006. Gross operating profit totalled € 136.2 million euro, marking a 18% improvement over the € 115.4 million from the previous year. Profit on shares measured at net equity, equal to € 13.3 million (+7%), taxes - estimated at € 70 million (+18%) - and profits from minority interests totalling € 12.5 million (+18.7%), generated consolidated profit for the period of € 68.6 million, up 23.6% year-on-year. ROE stood at 9.1%, up from 8.5% in 2005, despite the increase in shareholders' equity, including an additional € 87 million following the conversion of the second tranche of the 2004/2007 2.80% Credito Valtellinese Convertible Bond Issue.
The main balance sheet aggregates showed significant growth: total deposits came to € 24,445 million as at 31 December 2006, an increase of 10.7% over € 22,076 million for the previous year. Direct customer deposits performed even more positively, rising more than 15% to € 12,074 million. Indirect deposits marked an improvement of 6.8%, totalling € 12,371 million. The managed component grew at a rate of 2.2% and reached a total of € 6,043 million. The trend in loans to customers was positive and up 15.3%, amounting to € 11,367 million. Breaking the loan portfolio down by technical form shows that the medium and long-term component, which is made up of mortgages and finance leases, outperformed the other segments, registering a year-on-year increase of 16.8% to total € 4,096 million.
Non-performing loans, which amounted to € 382 million, net of value adjustments, represented 3.4% of total loans to customers (against 3.5% in 2005). In further detail, impaired loans totalled € 180.4 million and represented 1.6% of the total loan portfolio (against 1.7% in 2005), whilst other doubtful loans amounted to € 202 million, or 1.8% of total loans.
During 2006 the Credito Valtellinese Group's geographical network was further expanded by the opening of 22 new branches in line with the goals set in the Strategic Plan, bringing the total number of branches up to 368 at the end of 2006. The Group counted 3,344 employees on the same date.
No significant events occurred after the end of the year with a considerable impact on the Group's income statement, balance sheet, or cash flow statement or on the presentation thereof. It is nonetheless appropriate to report the following events, which had an affect on the Group's management in the first part of 2007:
- " In February Credito Valtellinese launched a € 350 million, 5-year senior variable-rate bond on the Euromarket. The bond will be issued within Credito Valtellinese Euro Medium Term Notes Programme and was listed on the Luxemburg Stock Exchange. The issue was distributed by 55 qualified investors from 12 different countries. Orders were received mainly from banks and investment funds, which subscribed 78.5% and 17.5% of the final total, respectively, with 54% of the total placed abroad and 46% in Italy.
- I" On March 15, 2007 Credito Valtellinese - in the process of implementing agreements signed on October 31, 2006 and once obtained the mandatory authorizations from relevant authorities - finalized the acquisition of 1,677,427 shares in Banca della Ciociaria S.p.A., which translates to approx. 27.9% of the bank's capital. This was in exchange for the payment of a first tranche totalling € 8.2 million of the overall price, which has a maximum of € 20.6 million and will be officially defined based on the bank's net equity in the financial statements from Dec. 31, 2006.
FINANCIAL HIGHLIGHTS FOR CREDITO VALTELLINESE S.C.
| Consolidated figures (millions of euro) | 31.12.2006 | 31.12.2005 | Change |
| Net profit | 48,1 | 36,3 | + 32,5% |
| Interest margin | 120,6 | 103,8 | + 16,2% |
| Brokerage margin | 204,4 | 182,4 | + 12,1% |
| Net result of financial operations | 183,4 | 163,3 | + 12,3% |
| Operating costs | 115,2 | 102,4 | + 12,5% |
| Gross operating profit | 68,2 | 60,9 | + 11,9% |
| Direct deposits | 4.799 | 4.097 | + 17,1% |
| Indirect deposits | 4.682 | 4.145 | + 12,9% |
| Loans to customers | 4.631 | 3.913 | + 18,4% |
| Net equity | 870 | 761 | + 14,4% |
The financial statements of Credito Valtellinese S.c. at 31 December 2006 show significant growth of the main balance sheet aggregates and consistent positive performance of earnings indicators.
The interest margin totalled € 120.6 million, up 16.2% year-on-year, and the brokerage margin totalled € 204.4 million, an increase of more than 12%. Write-downs of financial assets, mainly loans, totalled € 21 million, leading to a net profit on financial operations of € 183.4 million, growth of 12.3%. Operating costs stood at € 115.2 million (+12.5% year-on-year), bringing gross operating profit up to € 68.2 million, an increase of around 12%. Net profit totalled € 48.1 million, up 32.5% from € 36.3 million the previous year. As at December 31 2006 total deposits reached € 9,481 million, up from € 8,242 million the previous year, an increase of more than 15%. Direct deposits from clients stood at € 4,799 million, showing an annual increase of 17.1%. Indirect deposits marked an improvement of 12.9%, totalling € 4,682 million. The "managed" component rose from € 2,177 million to € 2,136 million, a growth rate of 4.1%. The trend in loans to customers was positive and up 18.4%, amounting to € 4,631 million.MEETING OF THE SHAREHOLDERS OF CREDITO VALTELLINESE
A meeting of the bank's shareholders has been convened, with first call on 20 April 2007, and, if necessary, with second call on the next day, 21 April 2007, at which the distribution of a dividend of € 0.40 per share will be proposed, payable on 4 May 2007 (ex-dividend date of 30 April 2007). The meeting will also review the proposal to extend the Board of Directors' authorisation to purchase, sell, place and cancel own shares in accordance with article 12 of the articles of association and applicable law. The proposal, an outline of which was approved by the Board of Directors, aims to encourage the trading of the bank's stock as part of normal brokerage activity, under the conditions and subject to the limits described below:
- " "without prejudice to the provisions of subsection 3 of article 132 of Italian Legislative Decree No. 58 of 1998, the purchase and sale of own shares -- namely ordinary shares of Credito Valtellinese stock -- must be executed on regulated markets under the operating conditions set by the regulations governing the organisation and management of said markets, which do not permit proposed purchases to be directly combined with predetermined proposed sales;
- l" the above operations, consisting of various transactions, must take place in the period spanning from the present Shareholders' Meeting to the next Shareholders' Meeting called to approve the 2007 financial statements;
- " the purchase of own shares is restricted to a maximum of 4,000,000 shares (out of the current total of 90,971,291 outstanding shares) and a maximum value of € 50,000,000.00;
- " the total number of own shares traded each month may not exceed 25% of the average monthly total number of shares traded during the previous quarter;
- " the number of own shares in portfolio may not exceed 3% (three percent) of total share capital;
- " shares must be purchased at a price no higher than the official trading price reported by Borsa Italiana for the session preceding each individual transaction, and no less than the par value of the shares;
- " own shares must be sold at a price no less than the official trading price reported by Borsa Italiana for the session preceding each individual sale;
- " when own shares are purchased, a special treasury share reserve must be established in accordance with article 2357-ter of the Italian Civil Code;
- " cancellation of own shares must comply with the provisions of the articles of association and applicable law, including the use of the treasury share reserve to compensate for any differences between par value and purchase price;
- " in addition to disclosure requirements established by applicable law, the bank shall disclose the status of the share buy-back plan to the market on a monthly basis."
- Amendment to the rules and procedures of the shareholders' meeting.
- Establishment of directors' compensation.
- Establishment of statutory auditors' compensation.
- Re-appointment of the entire Board of Directors; proposal to appoint fifteen directors for the three-year period 2007-2009.
- Appointment of the Board of Statutory Auditors for the three-year period 2007-2009.
- Appointment of the Board of Arbitrators for the three-year period 2007-2009.
For more information, please contact
Enzo Rocca
Management Administration
Telephone 0342 522647
Email: rocca.enzo@creval.it
Tiziana Camozzi
Institutional Communication Service
Telephone 0280.637.471
Email: camozzi.tiziana@creval.it
Restated Consolidated and Separate Balance Sheet and Income Statement of Credito Valtellinese S.c.
One should note that review is still underway by the external auditing firm.
