CONSOLIDATED BALANCE SHEET OF THE CREDITO VALTELLINESE BANKING GROUP
Sondrio, September 9, 2003 - In a meeting held today in Sondrio, the Board of Directors of Credito Valtellinese has examined and unanimously approved the Group's consolidated results for the period ended June 30, 2003.
Consolidated profit & loss account figures are as follows: interest margin at € 122 million (-2.1% compared with the same period of 2002), intermediation margin at € 220.9 million (+ 5.9% compared with € 208.7 million for the first half of 2002). The increase in the intermediation margin was mainly due to positive performances recorded in banking commissions and profit on financial operations. In particular, net commission were up 12.3%, from € 57.6 million end of June, 2002 to € 64.6 million for the same period of the current year. Profit on financial operations recorded a significant increase, which resulted in an amount of € 9.3 million as at June 30, 2003, compared with € 1.4 million for the period ended June 30, 2002.
BALANCE SHEET OF THE PARENT BANK CREDITO VALTELLINESE S.C. A R.L.
The first half of 2003 saw significant increases in all balance-sheet aggregates, as well as in the main economic indicators, also for the parent bank Credito Valtellinese. As regards assets under management, as of June 30, 2003, the customers' direct deposits amounted to € 3,213 million compared with € 3,051.2 million end of 2002 (+ 5.3%). Indirect deposits were up 5.7% at € 3,487.7 million, compared with € 3,299.1 million at December 31, 2002. In particular, assets held for administration stood at € 1,755.3 million (+5% over December 31, 2002), assets administrations and funds at € 1,400.4 million, representing 40.2% of total amount of indirect deposits (+5.5% over December 31, 2002) and insurance deposits at € 332 million (+ 10.6%). The period ended June 30, 2003, recorded a total amount of assets under management at the parent bank Credito Valtellinese of € 6,700.7 million (+ 5.5% over December 31, 2002). Sums receivable from customers were up 2% at € 2,430.5 million.
As of June 30, 2003, profit & loss account figures were as follows: with an amount of € 35.5 million, the interest margin was down 5.1% with respect to the first half of 2002. Proceeds from services - consisting of net commissions and other proceeds - stood at € 72.9 million (+11.9%). In particular, net commissions were up 2.1% at € 16.4 million while other net proceeds stood at € 56.5 million (+15% compared with € 49.1 million for the first half of 2002) thanks to proceeds from activities in the leasing market for € 44.9 million.
As a result, the intermediation margin recorded € 143.3 million (+ 13.4% compared with € 126.4 million recorded for the same period of 2002).
After taking account of extraordinary profits for € 1.7 million and taxes on income for € 17.1 million, net profit for the period recorded € 26.4 million (+44%).
During the first half of the current year, new branches have been opened in the cities of Mozzate and Appiano Gentile. As a result, end of June, 2003, the banking network of the parent bank included 85 branch offices.
During the first half of 2003, the bank has been assessed by the competent authority.
CREDITO VALTELLINESE APPROVES CAPITAL INCREASE PLAN
The Board of Directors of Credito Valtellinese has resolved on a capital increase plan to be submitted to the extraordinary meeting of the shareholders, which will be held in November, 2003.
Issue price and return on bonds subscribed are to be fixed shortly before bond issue.
NON-PERFORMING LOAN SELLING
The Board of Directors of Credito Valtellinese has also resolved on non-performing loan selling to Cassa San Giacomo, which is the Group member company responsible for the management of credit facilities, leasing contracts and legal advice. Upon authorization by the competent Authority, a non-performing loan selling for a total amount of about 41.7 million euros is to take place from the parent bank to Cassa San Giacomo. A similar non-performing loan transaction for an amount of about 44.3 million euros is to be submitted to the Board of Directors of Credito Artigiano. Both operations are being co-ordinated by external advisors.
Group consolidated results:
Results of parent bank Credito Valtellinese S.c. a r.l.:
During the first half of the current year, the Group has been committed to fulfilling its business plan by transferring a number of branches from the banking network of Banca Popolare di Rho to Credito Artigiano and changing the mission of the former into one mainly oriented to private banking. The new company specialized in private banking has taken the name of Julius Baer Creval Private Banking.
Consolidated balance-sheet figures show significant increases in the main aggregates. In particular, as of June 30, 2003, the customers' direct deposits stood at € 8,349.6 million (+ 6.2% if compared with an amount of 7,860.1 million euros at December 31, 2002) The Group's indirect deposits amounted in all to € 9,057.2 million (+ 6.6%), of which assets held for administration were up 1.9% at € 4,486.2 million, funds 10.5% at € 3,798.7 million, insurance deposits 18.7% at € 772.3 million.
Total assets under management, consisting of both direct and indirect deposits from the Group's clientele, stood at € 17,406.8 million, compared with € 16,356.6 million end of December, 2002 (+6.4%).
Sums receivable from customers amounted to € 6,872.3 million, with an increase by 3.1% over December 31, 2002.
Net unpaid bills amounted to € 253.3 million compared with € 251.1 million end of December 2002 (+0.8%). During the first half of the year, the Group has also been assessing and monitoring the reliability of its counterparts. As a result, the unpaid bills-investments ratio was 3.7%, substantially unchanged with respect to end of December, 2002.
Personnel expenses were up 7.6%, from 81.9 million to 88.1 million euros. Other administrative expenses amounted in all to € 66.2 million (+ 8.2%).
Value adjustments in respect of both tangible and intangible fixed assets recorded + 3.8%, from 21.9 million to 22.7 million euros. As a consequence, the heading 'operating income for the period' recorded € 43.8 million, basically unchanged with respect to the first half of 2002.
After entering provisions for covering risks associated with the disbursement of credit facilities, other risks and charges and value adjustments in respect of financial fixed assets for an overall amount of € 16.8 million, consolidated ordinary profits resulted in € 27 million (- 6.4% if compared with € 28.9 million for the same period of the previous year).
After taking account of extraordinary profits for € 1.7 million, taxes on income for € 18.7 million, a variation in the provision for covering general banking risks for 2.3 million euros and profits due to third parties for € 1.4 million, as at June 30, 2003, the Group's consolidated profit stood at € 6.3 million, compared with € 5.9 million for the same period of 2002 (+ 5.3%).
The first half of 2003 has also seen a further development of the Group's banking network, which currently includes about 305 branch offices. The increase in the number of branches has led to hire additional staff (2,981 employees were working with the Credito Valtellinese Group end of June, 2003). As at June 30, 2003, the number of banc@perta users was over 136,000 customers.
During the period between February 26 and June 6, 2003, the parent bank Credito Valtellinese, as well as Credito Artigiano, Bancaperta and Cassa San Giacomo have been assessed by the competent authority from the Italian Central Bank.
Net unpaid bills amounted to € 47.8 million recording only a slight increase compared with € 45.1 million at end December, 2002. The unpaid bills-investments ratio was 1.7%, unchanged over December 31, 2002.
Profit and loss on financial operations stood at € 4.1 million, of which profits for € 2.1 million on stockbroking transactions and for € 2 million on foreign exchange operations.
Operating costs for the first half of 2003, consisting of administrative expenses and value adjustments in respect of tangible and intangible fixed assets, recorded € 95.8 million (+11.8%). In particular, staff expenses were up 7.7% while other administrative expenses and value adjustments 13.8% and 13.4%, respectively. Value adjustments in respect of tangible and intangible fixed assets amounted in all to € 41.4 million, of which 37.8 million associated with value adjustments linked to amortization expenses associated with leasing.
The operating income for the period stood at € 47.5 million compared with € 40.7 million for the same period of 2002 (+16.7%).
Ordinary profits stood at € 41.8 million recording an increase by 21% compared with € 34.5 million for the first half of 2002.
Capital increase is expected through sale of new ordinary shares and a convertible bond issue.
A new ordinary share is being offered to holders of Credito Valtellinese shares for every 8 shares held. Issue price is € 6.900, of which € 3.000 nominal value and € 3.900 as paid-in surplus. Total amount of the increase is around € 50.7 million.
As regards the convertible bond issue to be submitted, along with the capital increase, to the extraordinary meeting of the shareholders for approval, below are the main characteristics of bonds:
- 30% of authorized issue will be repaid throughout 2005
- 30% of authorized issue will be repaid throughout 2006
- 40% of authorized issue will be repaid throughout 2007
years
tranche on maturity date
newly issued shares
2005
€ 300.00
43
2006
€ 300.00
43
2007
€ 400.00
55
€ 1,000.00
141
Basically, the capital increase plan is aimed at implementing the business growth strategy of Credito Valtellinese (increases in the main balance-sheet aggregates, further development of banking network), as well as of the whole Group, by raising the necessary finance in the years to come .
