Credito Valtellinese for farmers

Credito Valtellinese strengthens profitability. Assets administrations considerably increase

During its meeting on Friday September 26, Credito Valtellinese Board of Directors examined and approved the parent bank Credito Valtellinese's half-year report.

Direct incomes from customers increased by 14.5 per cent, totalling 3,563 billion (compared to 3,112 in the first half of 1996), while investments increased by 9.4 per cent, attaining 2,650 billion. Net unpaid bills influence was considerably below the system average. Indirect incomes increased by 8.2 per cent, attaining 4,487 billion. Savings management increased by 51.3 per cent and attained 1,854 billion. Such a positive performance considerably affected earnings. In fact, commissions and incomes from services saw a 7.1 per cent increase and, by the end of the year, they are expected to further increase. The bank capital increased by 7.2 per cent, totalling 582 billion and bearing out the successful "credito Valtellinese 7% 1995-1998 convertible" bond issue conversion into shares.

As regards economic data, in a situation characterised by a considerable interest rate fall, the increase in deposits did not succeed in increasing the interest margin, which decreased from 83.4 billion, in the first half of 1996, to 81 billion. Positive "incomes from services", however, compensated the interest margin decrease, making the gross intermediation results increase by 0.5 per cent and attain 128.1 billion.

Administrative costs, in particular "other administrative costs" (+13.7%), increased by 6.7 per cent. Staff expenses increased by 1.4 per cent only. Data include also entering 1.3 billion in the profit and loss account as a credit, consequent to obligations incurred by Fondo Interbancario di Tutela dei Depositi for the "operazione Sicilcassa".

Profit from ordinary activities exceeds 30.6 billion (unchanged in comparison with last year), while net profit for the year - resulting from extraordinary items and taxes on income positive balance - amounts to 12,043 million (unchanged in comparison with the first half of 1996).

During the meeting, Credito Valtellinese Board of Directors also examined and approved the Group's consolidated financial situation, which essentially reflects the parent bank's incomes. Credits to customers amount to 4,396 billion (+12.9%), direct incomes from customers attain 6,320 billion (+13%) while indirect incomes attain 8,090 billion (+5%), 2,890 of which (+40.3%) are savings administrations.

As regards the profit and loss account, the intermediation margin decreased by 9.4 per cent in comparison with last year and amounted to 322.9 billion on June 30. Particularly positive were net commissions, which increased by 3.5 per cent and attained 36 billion.

As regards liabilities, the staff expenses saw a limited annual increase (+0.7%) and attained 87.8 billion. Other operating expenses increased by 6.7 per cent, from 51 to 54.4 billion.

Profit from ordinary activities - after entering value adjustments in respect of fixed assets amounting to 123.1 billion and value adjustments in respect of credits and surplus reserves amounting to 29 billion - decreased by 30.3 per cent in comparison with the first half of 1996, totalling 26 billion. Taking into account the extraordinary management balance amounting to 1.4 billion and taxes on annual income amounting to 19.7 billion, net profit totalled 7.1 billion (-2.8%).

Particularly important were arrangements in the Group commercial network - Credito Valtellinese presides over the provinces of Sondrio, Lecco, Como and Varese, while Credito Artigiano over the remaining areas - and Banca Popolare di Rho transformation into a joint-stock company, as well as a capital increase aimed at its joining Credito Valtellinese banking Group.