An introduction to the UBI Banca Group June 2015
Disclaimer This document has been prepared by Unione di Banche Italiane Scpa ( UBI ) for informational purposes only. It is not permitted to publish, transmit or otherwise reproduce this document, in whole or in part, in any format, to any third party without the express written consent of UBI and it is not permitted to alter, manipulate, obscure or take out of context any information set out in the document. The information, opinions, estimates and forecasts contained herein have not been independently verified and are subject to change without notice. They have been obtained from, or are based upon, sources we believe to be reliable but UBI makes no representation (either expressed or implied) or warranty on their completeness, timeliness or accuracy. Nothing contained in this document or expressed during the presentation constitutes financial, legal, tax or other advice, nor should any investment or any other decision be solely based on this document. This document does not constitute a solicitation, offer, invitation or recommendation to purchase, subscribe or sell for any investment instruments, to effect any transaction, or to conclude any legal act of any kind whatsoever. This document may contain statements that are forward-looking: such statements are based upon the current beliefs and expectations of UBI and are subject to significant risks and uncertainties. These risks and uncertainties, many of which are outside the control of UBI, could cause the results of UBI to differ materially from those set forth in such forward looking statements. Under no circumstances will UBI or its affiliates, representatives, directors, officers and employees have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection with the document or the above mentioned presentation. For further information about the UBI Group, please refer to publicly available information, including Annual, Quarterly and Interim Reports. By receiving this document you agree to be bound by the foregoing limitations. Please be informed that some of the managers of UBI involved in the drawing up and in the presentation of data contained in this document either participated in a stock option plan and were therefore assigned stock of the company or possess stock of the bank otherwise acquired. The disclosure relating to shareholdings of top management is available in the half year and the annual reports. Methodology All data are as at 31 st March 2015 unless otherwise stated. Page 1
Agenda The UBI Banca Group Background UBI Banca and its Peers UBI Banca s profile in a snapshot The Group Structure Presence in Italy The UBI Banca International Network Contacts Annexes Page 2
Background Unione di Banche Italiane Scpa ( UBI Banca ) was formed following the merger of the BPU Banca and Banca Lombarda e Piemontese Groups (1 st April 2007) The history of UBI Banca is marked by a succession of mergers which have led banks with strong roots in local communities to become the significant reality that exists today and employs approximately 18,000 people. Birth of the Banca Mutua Popolare della Città e Provincia di Bergamo, subsequently renamed Banca Popolare di Bergamo (BPB) 1869 1883 Birth of the Credito Agrario Bresciano (CAB) Birth of the Società per la Stagionatura e l Assaggio delle Sete ed Affini subsequently renamed Banca Popolare Commercio e Industria (BPCI) 1888 1888 Birth of the Banca San Paolo di Brescia (BSPB) Merger of BPB and Credito Varesino (BPB-CV) 1992 1963 BSPB acquires Banca di Valle Camonica (BVC) Acquisition of Banca Popolare di Ancona (BPA) by BPB-CV. Birth of the BPB-CV Group 1996 1998 Merger of CAB and BSPB with the creation of Banca Lombarda as parent company and contribution of branch network of CAB and BSPB to Banco di Brescia 0 Acquisition of Banca Carime by BPCI 2001 Birth of the BPU Banca Group from the integration of BPB-CV and BPCI 2003 2000 Acquisition of Banca Regionale Europea * by Banca Lombarda. The Group takes the name of Banca Lombarda e Piemontese Group 1 st April 2007 Birth of UBI Banca following the merger of the BPU Banca Group and the Banca Lombarda e Piemontese Group Page 3 * Banca Regionale Europea was created in 1994 following the merger between Cassa di Risparmio di Cuneo and Banca del Monte di Lombardia
Background UBI Banca is a cooperative bank ( società cooperativa ). Its capital is represented by ordinary shares. Shareholders are divided between unregistered shareholders (who have a right to share in dividends, options, etc. but have no voting rights) and registered shareholders (who have both the right (i) to share in dividends, options, etc., and (ii) to vote at general meetings). To become a registered shareholder, one must own and hold at least 250 shares and apply to the management board. Each registered shareholder has only one vote. No one may hold shares amounting to more than 1% of the share capital (with the exception of collective investment companies). As at March 2015, voting shareholders number nearly 81,000*. A recent Law (March 2015) has established that cooperative banks with total assets above 8 bln must transform into Joint Stock Companies. Bank of Italy has recently issued instructions (11 June) and the Popolari involved have 18 months to transform into Joint Stock Companies. UBI Banca, which totals 120 bln of total assets, is one of the Banks involved in this process. UBI Banca is listed on the Milan Stock Exchange and included in the FTSE/MIB index. UBI Banca s governance model is based on a dualistic system. Under this dualistic governance system, the registered shareholders appoints a Supervisory Board (strategy and supervision); the Supervisory Board, in turn, appoints a Management Board (day-by-day management of the bank) Market Capitalisation** as at 12 th June 2015 (EUR bln) Source: Il Sole 24ore Italian Financial Newspaper Dated 13 th June 2015 54.2 37.7 # 3 6.7 5.5 4.1 3.7 Page 4 * Total shareholders (voting and non voting) number around 150,000 ** MPS quotations not reported as the Bank is under capital increase
UBI Banca and its Peers No. of branches as at 31 st March 2015 Total assets as at 31 st March 2015 ( bln) 7,361 5,779 840 2,225 1,852 # 5 1,560 1,273 702 682 188 126 # 5 120 61 49 483 Customer loans as at 31 st March 2015 ( bln) 573 Total direct funding as at 31 st March 2015 ( bln) 346 123 # 4 85 81 370 132 # 4 91 86 44 33 44 37 Page 5 Source: Press releases.
UBI Banca s profile in a snapshot: predominant retail business, solid capital base and low risk profile Strong competitive positioning 1 st Italian cooperative banking Group by market capitalization EUR 84.6 bn customer lending and EUR 91.1 bn direct funding (loan/deposit ratio: 92.9%) As at 31 December 2014, 81.5% of loans to customers were granted in Northern Italy, 10.2% in Central Italy and 8.3% in Southern Italy, while 72.5% of customer deposits came from Northern Italy, 12.6% from Central Italy and 14.9% from Southern Italy Solid Capital and Balance Sheet Position Capital ratios as at 31 Mach 2015: CET 1 ratio phased in: 12.45% vs. 9.5% SREP requirement CET 1 ratio fully loaded under Basel 3 rules: 12.20% Leverage ratio under Basel 3 (tier one capital / (on- and off-balance-sheet assets)) is at 5.82% phased in, 5.73% fully loaded Sound Liquidity position: the Group already complies with the Net stable Funding Ratio and Liquidity Coverage Ratio as per Basel 3 requirements (also net of TLTRO) Good Asset Quality Good asset quality compared to the Italian banking system Annualised cost of credit of 90 bps of total loans Low Risk Profile Focus on traditional banking activities: Customer loans/total assets at 70.6% Funding mainly from own customer base (over 80%); limited recourse to institutional markets Financial assets/total assets: 19.4%. Italian Govies represent approx.18% of total assets Page 6 Figures as at 31 March 2015 unless otherwise stated * Data referred to banking perimeter only.
The Group Structure Northern Italy UBI BANCA provides management, co-ordination, control and supply of centralized services to the network banks (single IT System, centralised risk management, centralised finance and treasury, commercial coordination, credit coordination, logistics, purchasing, on line banking, etc...) NETWORK BANKS 351 branches 288 branches 196 branches 208+3* branches 66 branches 100.00% 100.00% 83.76% (1) 74.76% (2) 84.13% (3) MAIN PRODUCT COMPANIES ASSET MANAGEMENT UBI Pramerica (partnership with Prudential US) FACTORING LEASING UBI Factor UBI Leasing LIFE BANCASSURANCE Lombarda Vita (partnership with Cattolica) Aviva Vita Spa Aviva Assicurazioni Vita Spa Central Italy Southern Italy 208 branches 216 branches 99.54% 99.99% ** 23 branches, ~ 750 financial advisors 100.00% Information updated as at 31 March 2015, unless otherwise stated * indicates branches outside Italy **Merger between IW Bank and UBI Private Investment completed on 25 May 2015 Page 7 1) moreover, 16.24% of capital held by Fondazione Banca del Monte di Lombardia 2) further 24.90% of Banca Regionale Europea capital held by Fondazione Cassa di Risparmio di Cuneo and the rest by minority shareholders 3) moreover, 5.50% of capital held by Cattolica Assicurazioni and the rest by minority shareholders 8
Presence in Italy Introduction to the UBI Banca Group: Predominant Retail Business and Strong Northern Italian Franchise 1 169 38 762 1 43 27 9 Approx. 3.7 million clients, mainly retail 1,560 branches, of which 762 in Lombardy (which generates over 20% of Italian GDP) 1 7 80 18 17 106 6 78 94 19 84 Market share in terms of branches above 20% in some of the richest Provinces such as Bergamo, Brescia and Varese Market Shares* % Branches Current accounts & deposits Loans Bergamo 22.3 28.7 40.2 Brescia 22.5 27.1 35.0 Varese 23.7 27.8 21.0 Cuneo 23.4 18.4 16.0 National market share of 5.4% in terms of branches 1,560 branches in Italy + 6 branches abroad As at 31 st March 2015 * Market shares calculated as at 30th June 2014. Page 8
Agenda UBI Banca International Network International Network Presence in the world Page 9
International Network COMMERCIAL BANKS FOREIGN BRANCHES SUBSIDIARIES FOREIGN BRANCHES REPRESENTATIVE OFFICES MENTON, NICE AND ANTIBES (Banca Regionale Europea) KRAKOW (UBI Factor) MOSCOW SAO PAULO SHANGHAI (Zhong Ou Asset Management Company) MUMBAI SHANGHAI HONG KONG VIENNA (Business Consultant) Head office in Luxembourg FOREIGN BANKS NEW YORK (Opening 2015) DUBAI (Opening 2015) SUBSIDIARIES BRANCHES UBI TRUSTEE SA (Luxembourg) LUXEMBOURG MADRID MUNICH Page 10
Presence in the world Munich UBI Banca International Branch Krakow UBI Factor Branch 2015 opening of Representative Offices in New York and Dubai Vienna Business Consultant Luxembourg UBI Banca International UBI Trustee SA UBI Management Co SA Antibes, Menton, Nice Banca Regionale Europea Branches Moscow Representative Office Shanghai Representative Office Shanghai Zhong Ou Asset Management Company Co. Ltd* Madrid UBI Banca International Branch São Paulo Representative Office Mumbai Representative Office Hong Kong Representative Office Page 11 * Joint-venture in which UBI Banca holds 35% of the total share.
Agenda Contacts UBI Banca Correspondent Banking Representative Offices Contacts Page 12
UBI Banca Sergio Passoni Head of Global Transaction and Operations Isabella Moavero - Head of Correspondent Banking and Representative Offices Correspondent Banking - correspondent.banking@ubibanca.it Alistair Newell Relationship Manager alistair.robert.newell@ubibanca.it Indian Subcontinent, China & Far East, Oceania Ernst Rolf Hartmann Relationship Manager ernst.rolf.hartmann@ubibanca.it North America, Central America, South America, Caribbean, Israel Lorenzo Tassini Relationship Manager lorenzo.tassini@ubibanca.it Turkey, Middle East, Africa Marco Camozzi Relationship Manager marco.camozzi@ubibanca.it Global Players Responsible for relationships with multiregional banking groups & Special Projects Riccardo Rossi van Lamsweerde Relationship Manager riccardo.rossi.van.lamsweerde@ubibanca.it Europe & CIS Countries Page 13
Representative Offices Contacts HONG KONG MUMBAI SHANGHAI Mr Andrea Croci hongkong@ubihk.com Suite 2911, Tower Two, Times Square 1, Matheson St. - Causeway Bay Hong Kong - S.A.R. Tel. +852 2878 7393 Fax +852 2878 7932 Ms Rajeshree Balsari mumbai@ubibanca.com 92 Mittal Chambers, 9 th Floor, Nariman Point, 400 021 Mumbai - India Tel. +91 22 22023601 Fax +91 22 22023603 Ms Lu Bo office@ubibanca.sh.cn The Center Suite 3304 989, Changle Road 200031 Shanghai China Tel +86 21 61675333 Fax +86 21 61675582 MOSCOW Mr Ferdinando Pelazzo moscow@ubibanca.com 10, Nikolskaya str., 4 th floor, Business Centre Nikolskaya Plaza 109012 Moscow - Russia Tel. +7 495 725 4466 Fax +7 495 725 4465 SAO PAULO Mr Isidoro Guerrerio saopaulo@ubibanca.com Al. Ministro Rocha Azevedo, 456 Ed. Jaù - 4 And.Cj.402 CEP 01410-000 São Paulo - Brazil Tel. +55 11 3063 0454 Fax +55 11 3063 3785 VIENNA (Business Consultant) Ms Annick Stockert annick.stockert@esterni.ubibanca.it Seilerstätte 16/11 1010 Vienna Austria Tel. +43 1 514 37 26 Fax +43 1 514 37 60 Page 14
Agenda Annex Foreign Banks Product Companies Group Results Group BIC codes Page 15
Foreign Banks Qualified and specific services offered to Corporate customers: establishment of international companies trustee operations and corporate financing payment services corporate and syndicated loans issuance of bonds and international guarantees cash pooling factoring Services offered to Private customers: wealth management and investment advisory; heritage and personal wealth planning with tailor made financial engineering solutions; investment Funds and Sicav; financial and asset planning with tailored engineering solutions; term deposits in all major currencies,; trading and safekeeping of securities on all the major stock and bond markets; spot and forward foreign exchange transactions; services for the establishment of Trust Companies through UBI Trustee SA based in Luxembourg. Leasing UBI Leasing offers its clients financing for asset acquisition such as: instrumental leasing, real estate leasing, car leasing, aero naval leasing as well as specific insurance and accessory services. 6.8 bln EUR in net Loans to Customers Page 16 Data as at 31.03.2015
Product Companies Factoring UBI Factor offers highly specialized factoring services to companies and public administrations. The company is based in Milan with a capillary structure across the national territory and is present also in Poland with its Krakow subsidiary. Since 1984 UBI Factor is part of the Factors Chain International network which allows it to retain a presence in more than 75 countries and with more than 270 foreign partners. 1.9 bln EUR Turnover; 2 bln EUR net Loans to Customers Asset Management Joint Venture with Prudential US UBI Pramerica develops, manages, markets and distributes a wide range of financial products and services dedicated to private customers and institutions. It has been awarded various international prizes. 39.6 bln EUR in Assets Under Management Recent merger between IW Bank (market leader in online trading in Italy with a strategy based on three fundamental objectives: continuous product/service innovation, constant development of technological platforms, professional support for the customer) and UBI Private Investment, the network of financial agents of the UBI Group Page 17 Data as at 31.03.2015 unless otherwise stated
The UBI Banca Group: consolidated results as at 31 st March 2015 Strength of balance sheet ratios confirmed CET 1 PHASED IN CET 1 FULLY LOADED 12.33% 12.45% 12.20% 11.50% Dec '14 Mar '15 Dec '14 Mar '15 LEVERAGE RATIO TOTAL CAPITAL PHASED IN 15.29% 15.34% Phased in 5.82% 5.78% Fully loaded 5.73% 5.42% Dec '14 Mar '15 Dec 14 Mar 15 Dec 14 Mar 15 Page 18
The UBI Banca Group: consolidated results as at 31 st March 2015 Income statement Mln ; LLPs in % of net loans Operating income 853.4 882.5 +1.6% 821.7 852.0 866.0 COST/INCOME down to 59.4% excluding PPA in 1Q15 Stated net profit (excluding impairment in 4Q2014) 58.1 48.1 43.6 75.9 1Q14 2Q14 3Q14 4Q14 1Q15 Loan Loss provisions / Net loans 1Q14 2Q14 7.1 3Q14 4Q14 1Q15 +1.5% 0.91% 1.06% 0.93% 1.41% 0.90% +30.6% Operating costs -4.4% 1Q14 2Q14 3Q14 4Q14 1Q15 Net profit excluding non recurring items 521.2 523.1 518.3 545.6 521.4 59.0 71.8 44.6 81.7 (28.9) 1Q14 2Q14 3Q14 4Q14 1Q15 +0.0% 1Q14 2Q14 3Q14 4Q14 1Q15 +38.4% Page 19 Page 20
Group BIC codes BEPOIT21 BCABIT21 BREUITM1 BLOPIT22 POCIITM1 BPAMIT31 CARMIT31 BVCAIT21 BLPIIT21 CABILULL UBIBESMM BEPODEMM Madrid Branch Munich Branch BIC ACTIVE BIC NON ACTIVE Page 21