How To Profit From A Bank In Italy

Transcription

1 May 2012 BANCA POPOLARE DI VICENZA GROUP Liability Management Opera>on Andrea Piazzetta Vice Direttore Generale Gruppo Banca Popolare di Vicenza

2 Disclaimer This presentation does not constitute an offer or invitation to subscribe for or purchase or any solicitation of any offer to purchase or subscribe for, any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. This presentation is being communicated only to persons who have professional experience in matters relating to investments and to persons to whom it may be lawful to communicate it to (all such persons being referred to as relevant persons). This presentation is only directed at relevant persons. Other persons should not rely or act upon this presentation or any of its contents. This presentation is strictly confidential and is being furnished to you solely for your information and may not be reproduced or redistributed to any other person or published in whole or in part for any purpose. In particular, this presentation may not be taken or transmitted into the United States, Canada or Japan or distributed, directly or indirectly, in the United States, Canada or Japan or to any U.S. person. This document is not an offer to sell or the solicitation of an offer to purchase or subscribe for securities in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the Securities Act ). Distribution of this presentation and any information contained in it in any other jurisdictions may be restricted by law. Persons into whose possession this information comes should inform themselves about and observe any such restrictions. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities. No reliance may be placed for any purposes whatsoever on the information contained in this document, or any material discussed in the context of the presentation of such material, or on its completeness, accuracy and fairness. Although care has been taken to ensure that the presentation is materially accurate, and that the opinions expressed are reasonable, the contents of this material has not been verified by Banca Popolare di Vicenza, its shareholders, consultants and advisors. Accordingly, no representation or warranty, express or implied, is made or given on behalf of Banca Popolare di Vicenza, its shareholders, consultants and advisors, or any of their respective members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document or any other material discussed in the context of the presentation of this document. None of the company, its shareholders, consultants and advisors, or any of their respective members, directors, officers or employees or any other person accepts any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on third party sources and involve known and unknown risks and uncertainties. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. Any decision to purchase securities in the context of an offering of securities, if any, should be made solely on the basis of information contained in an offering circular or prospectus published in relation to such an offering. Although Banca Popolare di Vicenza has obtained the information provided from sources that should be considered reliable, it cannot guarantee its accuracy or completeness. The information provided is purely of an indicative nature and is subject to change without notice at any time. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations. 2!

3 BPVi Group History

4 BPVi: History q Banca Popolare di Vicenza, incorporated in 1866, headquartered in Vicenza, is the oldest bank of Vicenza and the first banca popolare of the Veneto region q The addition of new branches has gradually extended the branch network from Vicenza to the entire North-East region of Italy. Acquisitions of small banche popolari played a crucial role in strengthening our presence within the territory q Progetto Centro Sud was started in 2000 by the creation of Banca Nuova and the acquisition of Banca del Popolo di Trapani in 2001: the latter had more than forty branches in western Sicily, the former, headquartered in Palermo, operates in the main areas of Sicily and Calabria. In mid-2002, these two banks operating with approx. 70 branches overall, merged to form a new institution: Banca Nuova q At the end of 2002, Cassa di Risparmio di Prato, operating with 54 branches in Tuscany, became part of BPVi 4!

5 BPVi: Recent years q The process of expansion continued in 2004 with the acquisition, effective, 1st January 2005, of thirty branches located in Sicily from Antonveneta. Through this acquisition, Banca Nuova reached one hundred branches q At the end of 2007, BPVi concluded the acquisition of 61 branches of UBI Banca, located in the provinces of Bergamo and Brescia q In the same year, BPVi stipulated an agreement and partial cross shareholding with Cattolica Assicurazioni, an alliance that plays a crucial role both from a strategic and industrial perspective q During 2007, BPVi acquired a 38,8% stake in Farbanca from Intesa San Paolo. Farbanca was a small telematic credit institute which specialised in offering banking services to pharmacies q On 16 September 2011, BPVi acquired 75.21% of Banca di Credito dei Farmacisti (BCF), a small entity specialised in the pharmaceutical field with two branches in the Marche and Abruzzo. 5!

6 BPVi Group Capital Ra>os Principal Financial Data

7 Capital ra5os Tier 1 and Total Capital Ra>o Core Tier 1 Regulatory Capital and RWA (EURmm) Total Capital Ra5o Tier 1 Capital Other RWA ,70% 11,43% 11,50% % ,16% 8,05% 7,41% Source: Consolidated Financial Statements and H1 Consolidated Financial Report, as of June 30th 2011 q In 2010, capital ra5os improved through the issuance 5 mln shares (share capital increased by EUR307.5mln) and the conversion of the majority of the conver5ble bonds (share capital increased by EUR221mln) q As of year end 2011, the values for Core Tier 1 and Total capital ra5os were in line with 2010 and above the budget guidelines (Tier 1 value above 7.5% (minimum limit: stable and above 7%). The management confirmed the target for core Tier 1 at 8%) q Coopera5ve status enables a flexible approach to capital raising (currently BoD can increase by EUR1bn) 7!

8 BPVi Group: Income statements mln 31 Dec Dec 2011 YoY Change Net Interest Income % Net Fee and Commissions Income % Net Financial Income % Net interest and other banking income % Operating Costs % - of which: payroll % - of which: other administrative costs % Current Gross Profit %` Current Taxes % Net Income for the period pertaining to the Parent Bank % Source: Consolidated income statement q Current taxes include the net benefit of Euro 67.8 million related to franking for tax purposes of the value of goodwill recorded in the Group's consolidated financial statements as at 31 December 2010, related to consolida5on differences of certain subsidiaries, and the value of goodwill recorded in the financial statements of the subsidiary Banca Nuova Spa which emerged following the Parent Bank's contribu5on of the Banca del Territorio" business unit to the aforemen5oned Banca Nuova (formerly Nuova Banca Nuova Spa). Please note that this item also benefifed from Euro 34 million in 2010 due to the franking for tax purposes of the value of goodwill recorded in the financial statements, which emerged following the merger by incorpora5on of Cariprato into the Parent Bank Banca Popolare di Vicenza. 8!

9 BPVi: Balance Sheet Balance Sheet 2009 vs mln 31 Dec Dec Dec 2011 YoY CAGR Banking Business 64,239 72,037 75, % Direct Deposits 23,056 26,347 28, % Indirect Deposits 16,653 17,353 16, % - of which: asset management 3,218 3,026 2, % - of which: retirement savings 2,195 2,301 2, % - of which: assets under administration 11,240 12,026 12, % Customers loans 24,530 28,337 29, % Total Assets 30,964 35,533 41, % Equity (incl. net income for the period) 2,817 3,278 2, % Net Interbank Position - 1,579-3,283-4, % Regulatory capital 2,522 3,135 3, % Risk Weighted Assets 22,065 26,799 28, % 31 Dec Dec Dec ,465 5,427 5, mln additional info Number of employees (average) Number of branches Source: Consolidated statement of financial posi5on 9!

10 BPVi Group Funding overview of 2011 and planned 2012

11 Ratings q The following table shows the current ratings assigned to Banca Popolare di Vicenza by Standard & Poor s and Fitch Rating Agency Long Term Short Term Outlook Date Standard & Poor s BBB- A-3 Negative 10-Feb-2012 Fitch Ratings BBB F3 Negative 25-Nov-2011 q On 10 February 2012 Standard & Poor s downgraded the bank s long term rating to BBBwith negative outlook q On 25 November 2011 Fitch downgraded the bank s long term rating to BBB with negative outlook 11!

12 Summary of 2011 funding (both secured and unsecured) 2011 funding plan overview Wholesale funding Ø EMTN Bonds new issues amounted to around EUR 1.2 bln. Redemptions of EMTN and institutional bonds amounted to EUR1.4 bln Ø Berica 9 RMBS for EUR bln Ø Berica 10 RMBS for EUR 950 mln Retail funding Ø Retail bonds new issues outnumbered redemptions and buybacks by 600 mm euro Government Guaranteed Bonds In Dec 2011 BPVi issued EUR 1.5 bln of 3 year government guaranteed bonds 12!

13 2012 Funding plan BPVi 2012 funding plan Wholesale funding Ø In 2012 about EUR 1.5 bln of EMTN bonds will mature. Ø New MBS - Berica ABS EUR 1.3 bln of portfolio completed in February Ø New SME CLO Berica SME the debut transaction in the SME space with a portfolio of around EUR 3bn. Closing expected by end of 1H2012. Ø New RMBS Berica 11 EUR 1bln portfolio of RMBS (closing expected by end of October 2012) Retail funding Ø In 2012, around EUR 1.4 bln retail bonds will mature. Strong emphasis is being placed on new funding outstripping redemptions as well as extending maturities. Ø The surplus/excess funding target for 2012 is 700 mln euro. Ø The year started well with a net inflow of 200 mln euro just in January. Ø In order to stabilize retail funding BPVi has launched an aggressive campaign based on time deposits to switch outstanding balance of current accounts and promote new deposits. Target is net inflows of around 600 mln euro. 13!

14 Ra>onale of Liability Management opera>on

15 Liability Management transaction rationale 3 year LTRO Funding cost Berica ABS News Term Loans to SMEs Liability Mgmf Average yield ~ Euribor 3m % Average spread ~ % ~ Euribor 3m 0.15% New 3 year EMTN Funding cost ~ Euribor 3m % Blended cost ~ Euribor 3m % 15!

16 Liability Management transaction rationale The Liability Management operation was undertaken for a number of related reasons: 1. The LTROs added a positive market sentiment which allowed BPVI to undertake the first sole senior for senior exchange of Notes. Other exchanges had taken place such sub ordinated debt along with in some cases, covered bonds. 2. The LTROs clearly helped bank liquidity, however, it was/is intended as a temporary measure, therefore, it was imperative to act when we did in case the positive sentiment in the fixed income markets collapsed again. 3. In terms of ALM, the objective was also to extend and vary our maturity profile in order to reduce redemption peaks. 4. The operation was also seen as being more economical and had a higher chance of success than a straight senior issue. After the exchange new investors were given the opportunity to buy one or both of the two new Notes. 16!

17 Timetable and Deal Summaryof Liability Management opera>on

18 Banca Popolare di Vicenza Deal Process EUR 586,891,000 7 Senior Notes Due Oct Jun 2017 EUR 109m exchanged into 2014 Notes EUR 477m exchanged into 2015 Notes Lead Dealer Manager February 2012 Italy Banca Popolare di Vicenza EUR 135,000, % Senior Fixed Rate Note Due Feb 2014 Joint Bookrunner February 2012 Italy Banca Popolare di Vicenza EUR 550,000, % Senior Fixed Rate Note Due Feb 2015 Joint Bookrunner On February 13th, 2012 Banca Popolare di Vicenza ( BPVi ) announced an Any and All Exchange Offer across several of its Senior Unsecured notes, due in 2012, 2013 and 2017 into new 2014 and 2015 notes to extend their average debt maturity profile At the time of the offer there was EUR2.5bn in total principal outstanding across the targeted 7 Senior Unsecured bonds (EUR2.4bn of which was due between representing c.45% of their Senior Unsecured debt due in this period) Holders of the 2012 bonds had the option to exchange their holding into either new 2014 or 2015 bonds, whereas all other holders could only exchange in to 2015 bonds. The weighted average price premia was a modest c.0.6% The new issue pricing was defined by a a maximum new issue price of par and fixed coupon of 5.75% on the new 2014 notes and a fixed coupon of 6.75% on the new 2015 notes (so investors knew their minimum yield on the new notes at the outset of the offer) The Exchange offer was launched on 13 February, followed by a luncheon presentation in Milan on 16 February and a 2-day UK Roadshow on February. The Final Expiration of the offer was after 7 business days on 21 February with Settlement following on 27 February. This allowed time for investors to submit their new notes into the LTRO programme before the 1 March deadline The bookbuilding for the new notes began on Wednesday 22 February just after 9 am CET. The books closed at 2pm CET, with the issuer finally printing a new EUR135m 2014 Senior Unsecured and EUR550m 2015 Senior Unsecured benchmark trade, both priced at par RBS was mandated as Lead Dealer Manager for the Exchange Offer and structured the deal for BPVi at the outset, then coordinated the transaction with four other Joint-Lead Managers February 2012 Italy 18!

19 Strategic Rationale Deal Outcomes The transaction yielded very positive results: ca.eur2.5bn bonds targeted; EUR586.7m exchanged (23.6%) The deal attracted EUR 106m of new money (EUR 98.2 allocated), in addition to the EUR 586.7m accepted via the Exchange Offer of the Existing Notes 33 new accounts participated with a number of large orders anchoring the trade, with domestic Italian accounts taking the lion s share of the new money component (98% for 2014 and 70% for 2015) The deal successfully extended BPVi s weighted average Senior funding term in a challenging market backdrop including a one notch downgrade of the Issuer s senior ratings by S&P, which was managed carefully by delaying the deal until the market stabilised Beside extending maturities BPVi has targeted new money The percentage of international demand on new money was high considering the participation of International accounts on the previous deals done by BPVi 5% International demand for the 2.5-year EUR 500m Senior unsecured Fixed Rate Notes launched in 2011 compared to 23% and 27% International demand for 2014 and 2015 notes respectively BPVi managed to increase its investor universe by careful investor targeting and a 2 day UK roadshow. The transaction was successfully put on the radar of large global accounts which contributed to the success of the overall New Money in 2014 Notes New Money in 2014 Notes New Money in 2015 Notes New Money in 2015 Notes transaction Geographical breakdown Geographical breakdown Investor type breakdown Investor type breakdown 4% 4% 1% 14% 4% 4% 2% 4% 2% 8% 14% 18% 9% 4% 1% 13% 7% 46% 36% 55% 77% ITA IRL CHE FRA GBR AGENCY BANK FM ICMA INV AGENCY FM Others 73% BANK HF RETAIL CB ICMA INV ITA GBR CHE LUX FRA 19!

20 ACTIVITY FEBRUARY RESPONSIBILITY W Th F Appointments Get quotes & appoint Counsels Get quotes & appoint Tender Agent Approvals Board Preparation All-Parties kick-off call Agree Transaction Timetable Obtain Geosurvey from Exchange Agent Engagement with Rating Agencies Draft EoM Draft DMA Initiate Documentation of New Issue Prepare DDQ Prepare IIIa Prepare Q&A Brief Investor Relations Execute Exchange Agency Agreement Prepare Launch announcements Prepare Sales Note & Bloomberg message EoM to CS to prepare DACE notices Press Release Procedure Confirmed Prepare Pricing & Settlement Announcements Launch Finalise all documentation Finalise pricing Exchange DMA Signatures DD Call Go / No-Go Call Exchange Execution Launch Expiration (5pm CET) Pricing of New Issues Results Announcement Settlement Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W RBS / BPV RBS / BPV BPV All Parties RBS / BPV RBS / BPV / EA BPV BPV's Counsel RBS's Counsel BPV / BPV's counsel RBS RBS RBS BPV EA / BPV / BPV's Counsel BPV's Counsel RBS EA / BPV's Counsel BPV BPV's Counsel All Parties RBS / BPV RBS / BPV RBS / BPV All Parties Day Offer Period BPV's Counsel 20!

21 ISIN Amount accepted for Exchange Amount of New Notes to be issued Amount Outstanding Exchange Ratio XS EUR 30,418,000 EUR 16,572,000 New 2014 Note EUR 219,582,000 12% Security EUR 250m FRN due Oct 2012 EUR 13,612,000 New 2015 Note EUR 500m FRN due Oct 2012 XS EUR 124,231,000 EUR 74,373,000 New 2014 Note 12% EUR 375,769,000 25% EUR 49,858,000 New 2015 Note EUR 500m 5.25 %. Note due Oct 2012 XS EUR 62,800,000 EUR 18,885,000 New 2014 Note 25% EUR 437,200,000 EUR 44,537,000 New 2015 Note 12.5% 12.5% EUR 500m FRN due Mar 2013 XS EUR 104,778,000 EUR 104,240,000 New 2015 Note EUR 395,222,000 21% EUR 500m 4.75 %. Note due Sep 2013 XS EUR 256,664,000 EUR 257,849,000 New 2015 Note EUR 243,336,000 52% EUR 75m FRN due May 2017 XS EUR 0 EUR 0 New 2015 Note EUR 75,000,000 0% EUR 35m Fixed Rate Note due Jun 2017 XS EUR 8,000,000 EUR 6,800,000 New 2015 Note EUR 27,000,000 30% New Notes Issued ISIN Currency Expected Ratings Coupon Issue Spread vs. m/s (bps) Maturity New 2014 Note XS EUR NR/BBB-/BBB 5.750% /02/2014 New 2015 Note XS EUR NR/BBB-/BBB 6.750% /02/2015 Security 21!