Earnings Release • Feb 10, 2017
Earnings Release
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| Informazione Regolamentata n. 1928-31-2017 |
Data/Ora Ricezione 10 Febbraio 2017 18:18:45 |
MTA | |
|---|---|---|---|
| Societa' | : | Banco BPM S.p.A. | |
| Identificativo Informazione Regolamentata |
: | 85007 | |
| Nome utilizzatore | : | BANCOBPMN10 - Marconi | |
| Tipologia | : | IRAG 01 | |
| Data/Ora Ricezione | : | 10 Febbraio 2017 18:18:45 | |
| Data/Ora Inizio Diffusione presunta |
: | 10 Febbraio 2017 18:33:46 | |
| Oggetto | : | Results as at 31 December 2016 | |
| Testo del comunicato |
Vedi allegato.
1 The Board of Directors of Banco BPM Group approved the annual financial statements of the parent bank and consolidated groups of Banco Popolare and Banca Popolare di Milano, respectively, as at 31 December 2016 and examined Banco BPM's aggregate accounts.
2 Banco BPM Group's aggregate figures are the sum of ex Banco Popolare Group and ex Banca Popolare di Milano Group's consolidated Financial Statements as at 31/12/2016, net of the intragroup relationship, as set forth in the "Explanatory notes and preparation criteria" herein.
3 Including capital-protected certificates (€4.6 billion as at December 2016 vs. €3.8 billion as at end 2015), direct customer funding increases to €121.3 billion
4 For details on the non-recurring items see the Explanatory Notes and preparation criteria - Banco BPM Group in this press release herein.
Milan, 10 February 2017 – In today's meeting, the Board of Directors of Banco BPM Group, chaired by Mr Carlo Fratta Pasini, Lawyer, approved the annual financial statements of the parent bank and consolidated Group of Banco Popolare and Banca Popolare di Milano, respectively, as at 31 December 2016, examined the aggregate financial statements of Banco BPM7, and examined the figures for the new group after the merger and as of the date of the financial statements s of the two merged groups.
The former Banco Popolare group and the former Banca Popolare di Milano group closed the financial year 2016 with a net result of -€1,681,7 million and +€72.7 million, respectively, which – net of nonrecurring items – totals -€1,133.7 million and €195.2 million, respectively. The result includes the former
5 Provisions following Banco Popolare's capital strengthening operation, in line with the provisions of the 2016-2019 Strategic Plan already presented to the market. This is an approximate estimate and comes from discontinuity in the NPE valuation processes brought in during 2016.
6 Includes cancellations.
7 Because the merger of Banco Popolare and Banca Popolare di Milano came into force on 1 January 2017, Banco BPM's Board of Directors approved Banco Popolare and BPM's 2016 financial statements and consolidated financial statements separately.
Banco Popolare's higher adjustments to strengthen the coverage, as provided for in the merger plan (approx. €1,600 million).
On 1 January 2017, the two former groups Banco Popolare and Banca Popolare di Milano merged to become Banco BPM Group, thus making the new group the third largest banking group in Italy with over 4 million customers, approx. 2,300 branches, a strong expansion potential, thanks to its foothold in the wealthiest and most industrialised areas of Italy, significant cost synergies and the development in revenues thanks to the actions planned in the 2016-2019 Strategic Plan.
2016 was a transition year for the new group in which it laid the groundwork for the group's future economic and capital development, as agreed with the regulatory authority and planned in the mentioned Strategic Plan. The priorities are thus the de-risking of the NPE portfolio, in which net NPEs have decreased by approx. €1.5 billion (-8.4% Y/Y). At the same time, there was a significant increase in the coverage rates8, which have increased to 47.9% for total NPEs (+410 bps vs. December 2015) and to 60% for bad loans (+280 bps). Coverage strengthening was made possible by the €1 billion capital increase the former Banco Popolare Group undertook in June 2016, as foreseen and announced to the market when the 2016-2019 Strategic Plan was unveiled.
During 2016, particular attention was placed on operating costs which, net of non-recurring items, decreased by €46 million, specifically personnel expenses, which decreased by 3.4%. The groundwork was also laid to reach the targets set in the Strategic Plan, specifically the reduction in personnel expenses thanks to the agreement with the trade unions that allows for the voluntary departure of about 2,100 staff by 2019 (vs. 1,800 initially envisaged). To this aim the group provisioned a total of approx. €367 million in 2016.
In 2016, the total number of staff decreased to 24,680, thus a decrease of approx. 400, in addition to the number of resources due to leave the bank under the early retirement plans. Still in terms of cost cutting, there were 122 branch closures: another 48 branches are due to be closed by April 2017, thereby exceeding the planned 50% closures by 2019.
As planned in the Strategic Plan, in 2016 Banco BPM Group already started some measures to prop up operating income, which - despite the lingering economic difficulties, and by reducing the burdensome funding and the reduction in the cost of funding, along with the foreseen increase in loans - will drive the net interest income.
The new Group started 2017 with significant balance-sheet items: total assets of €168 billion, customer loans of €111 billion, total funding9 of €219 billion and total net equity of €12 billion.
We also point out that the two groups' aggregate AUM was €58.6 billion, a 4.1% increase vs. December 2015.
From the income statement point of view, Banco BPM's total income was €4,705 million, net of the nonrecurring items, and adjusted operating costs totalled €3,082 million. As such, the operating profit was €1.623 million, net of the non-recurring items.
The group's net adjustments on loans totalled €3.0 billion and included the mentioned adjustments to strengthen the coverage, as provided for in the merger plan, of approx. €1.6 billion, as explained in the Merger Project and the 2016-2019 Strategic Plan.
The cost of credit10 stood at 267 bps, which, net of the foregoing discontinuity elements, falls to 123 bps. Banco BPM has a very solid liquidity profile, with a significant amount of unencumbered eligible assets of approx. €21 billion and a net spot liquidity balance of approx. 13% of total assets11.
Banco BPM's capital ratios were also solid: the Common Equity Tier 1 ratio Phase-in stood at 12.30% and the Common Equity Tier 1 Fully Loaded was 11.42%. Neither of these ratios currently benefit from the extension of Banco Popolare's AIRB models to the new Banco BPM Group.
8 Include cancellations
9 Direct funding + indirect funding
10 Net loan provisions/Total net customer loans.
11 Internal liquidity management report as at 30 January 2017.
Net interest income was €1,318,1 million as at 31 December 2016, down by 14.7% compared with €1,545.4 million as at 31 December 2015. The net interest income decreased Y/Y due to the enormous competitive pressure on pricing customer loans, and to the decrease in profitability on the securities portfolio. Despite this backdrop, however, the negative impact on net interest income was mitigated by the decrease in the cost of institutional funding and the measures to ensure that the decrease in the mark-down was slower than the fall in the foregoing market rates.
The result of subsidiaries, valued using the net asset method, was positive at €124.5 million, thus below the €141.5 million recorded in financial year 2015. The main contribution to this item came from consumer credit by way of the stake in the consumer credit firm Agos Ducato (+€90.0 million vs. €105.2 million in 2015).
Net fees and commission totalled €1,318.2 million, down by 7.5%, compared with €1,425.4 million as at 31 December 2015, which, however, benefitted from an exceptionally positive trend in AUM and which will hardly be repeated. The decrease recorded in 2016 was caused by the hard work of the distribution network regarding the many extraordinary events tied to the merger.
12 Provisions following Banco Popolare's capital strengthening operation, in line with the provisions of the 2016-2019 Strategic Plan already presented to the market. This is an approx. estimate and comes from discontinuity in the NPE valuation processes brought in during 2016.
Other net operating income totalled €102.0 million, vs. €109.6 million as at 31 December 2015. The result was lower due to the decrease in income from transactions with third parties.
The net financial result without FVO13 was positive at €197.5 million, compared with €441.8 million in FY 2015 (€13.8 million in Q4), thanks to the positive contribution of €25.3 million from the adjustment on the disposal price (earn-out) on the stake held in ICBPI S.p.A. (the disposal took place in 2015), whereas 2015 benefitted from a €241.2 million capital gain from the disposal of the stakes held in ICBPI and in Arca Sgr.
Total income (financial interest income and other operating income) thus totalled €3,060.1 million, compared with €3,663.0 million in 2015 (-16.5%).
Personnel expenses increased by 2.6%, from €1,433.6 million in 2015 to €1,470.2 million as at 31 December 2016, due only to the higher cost related to the pertinent early retirement plan agreed on 23 December 2016, for €198.6 million (vs. €94.6 million in 2015). Net of this non-recurring item, personnel expenses are down by 5% due to the decrease in the average number of resources (-350 people FTE Y/Y). As at 31 December 2016, there were 16,381 "full time equivalent" employees, compared with 16,731 as at 31 December 2015 and 16,657 as at 30 September 2016.
Thanks to the careful cost control, even other administrative costs - excluding the "systemic costs" (i.e. the contribution to the Single Resolution Fund SRF for €44.3 million, the Deposit Guarantee Scheme DGS for €22.3 million, the extraordinary contribution to the "Fondo di Risoluzione Nazionale", for a total of €88.8 million, and the fees to allow the bank to convert deferred tax assets from 2015 and 2016 into tax credits, for €54.4 million, thus a total of €209.9 million), and the cost of the merger process, which has, to date, been booked in the income statement at €31.7 million euros - decreased by 5.0% compared with the systemic cost of €162.3 million in 2015.
Net adjustments on tangible and intangible assets in 2016 totalled €165.3 million, compared with €166.4 million recorded as at 31 December 2015, and included adjustments on the €32.4 million extraordinary costs booked to adjust the book value of some real-estate assets held as investments for a value estimated using the most recent housing surveys (as at 31 December 2015, the bank booked €41.4 million in adjustments). Net of the cited non-recurring items, net adjustments on tangible and intangible assets increased due to the higher investments made in the year.
Operating costs totalled €2,487.7 million, compared with €2,404.8 million in 2015.
Net adjustments on impaired customer loans totalled €2,539.3 million, vs. €803.9 million in 2015. The cost of credit, a ratio between net adjustments on customer loans and gross loans, shows, as mentioned, that there was strong discontinuity with the past due to the decision to increase the average coverage rate on NPEs.
The 2016 income statement also shows net adjustments on other non-performing assets of €40.8 million (vs. -€54.2 million in 2015), which includes the €19.7 million write-down on the stake held in the "Atlante" fund and the €3.4 million write-down in C.R. Cesena.
Net provisions for risks and charges totalled €24.7 million, vs. €50.8 million booked in 2015, mainly for the cost of some lawsuits.
Following the result of the impairment test on 31 December 2016, adjustments on goodwill include the long-term devaluations of the higher value booked by the group on CGU Investment Banking & Asset Management (€279 million).
Profit from the disposal of equity and investments totalled €17.0 million, mainly due to the disposal of some of the bank's own real estate (in 2015 this item showed a loss of €4.4 million).
Tax credit on current operations as at 31 December 2016 was €583.1 million (€70.5 million as at 31 December 2015).
13 The effects of the variation in the creditworthiness of the financial liabilities the bank issued and which are valued at fair value (FVO) were disclosed in a separate item of the reclassified income statement after the 2016 operating results were booked. Owing to the effect of the bank's worse creditworthiness, the impact of the FVO in 2016 was positive at €5.9 million (+€4.2 million after taxes). It was positive at €4.9 million in 2015, too (+€3.2 million after taxes).
Given the positive result from assets available for sale (+€2.5 million), the negative part in the income statement owing to third party shareholders (+€22.8 million) and the impact of the FVO (+€4.2 million net of taxes), fiscal year 2016 closed with a net loss of €1,681.7 million, vs. the net profit of €430.1 million in 2015.
Direct funding as at 31 December 2016 was €80.4 billion, 2.1% lower than the €82.1 billion as at 31 December 2015. Given the very strong growth in the item, in its strictest sense, specifically in current accounts and deposit accounts held in the commercial network (+14.6% Y/Y increasing from €39.9 million to €45.8 billion), the group specifically reduced the item represented by bonds (-27.5% Y/Y, from €27.8 billion to €20.2 billion) and, when the bonds matured in 2016, did not replaced them with new issuances, in compliance with the bank's decision to reduce this form of funding since it is relatively more expensive. We point out that direct funding does not include the stable funding guaranteed by the stock of certificates issued by the group, which as at 31 December 2016 totalled €4.6 billion.
Indirect funding totalled €69.2 billion, -2.7% Y/Y. AUM, totalling €36.4 billion, performed well in 2016 (+3%) due to Aletti Gestielle Sgr's successful placing of structured funds, while AUC, totalling €32.8 billion, decreased, mainly due to an extraordinary transaction conducted in Q1 2016 with a very low margin. In Q4 2016, indirect funding increased by €0.6 billion from €68.6 billion as at 30 September 2016 to €69.2 billion in December 2016, with AUC, €32.8 billion, accounting for the lion's share (+€0.4 billion).
Net customer loans as at 31 December 2016 totalled €75.8 billion, down 3.3% over €78.4 billion booked at the beginning of the year (-3.0% in Q4). The Y/Y decrease was partly due to the disposal of NPLs and the decrease in loans in the Leasing Division14, and the adjustments to strengthen the coverage of nonperforming loans.
Net NPEs (bad loans, unlikely to pay, past-due and/or overdrafts) as at 31 December 2016 totalled €12.6 billion and marked a 10.6% decrease Y/Y. The decrease in the item was caused mainly by the adjustment on loans in the income statement in 2016. Net NPEs in the "Leasing" segment are in decline vs. year-end 2015 and totalled €2.2 billion, mainly represented by real-estate leasing contracts.
An examination of single items shows the following Q/Q trend:
The coverage rate for all the NPE categories, including bad loans written off, was 48.4% vs. 43.7% as at 31 December 2015, an increase of 4.67 percentage points.
More specifically, as at 31 December 2016 the coverage ratio was:
The coverage ratio for performing loans was 0.40% vs. 0.51% as at 31 December 2015 and 0.42% as at 30 September 2016.
14 The loans made by the Leasing Division, i.e. the total exposure of the scope of consolidation of the former Banca Italease and the subsidiaries Release and Italease Gestione Beni, totalled €5.3 billion as at 30 September 2016, a steady decrease compared with the €5.6 billion as at 30 September 2015 and the €6.0 billion as at 31 December 2015.
As at 31 December 2016, the group's Own Funds were €6,330 million.The Common Equity Tier 1 ratio (CET1 ratio) was 13.0% (14.7% as at 30 September 2016). The decrease in Q4 2016 was caused by the loss for the year, mainly due to the negative impact on profitability and the increase in the average coverage rate on NPEs, which was partly offset by a reduction on risk-weighted assets. The CET1 ratio fully phased comes in at 11.4% (13.7% as at 30 September 2016).
As at 31 December 2016, the former BPM Group's total income was €1,604.1 million, down by 3.8% Y/Y. Net interest income was €788.0 million, down by 2.3% Y/Y. Specifically, we point out the decrease in commercial net interest income (-4.1%) – due to the joint effect of the reduction in the difference between lending and deposit rates (-18 bps), which was not completely offset by the increase in volumes – and the lower contribution from BPM's securities portfolio (-€40.3 million), which was offset by the lower cost of interbank (+€10.7 million) and institutional (+€40.6 million) funding.
Net non-interest income (€816.1 million) decreased by €44.4 million Y/Y due to the reduction in net fees and commissions (-€20.7 million), in "profit/loss on investments at net equity" (-€10.1 million) and in "other operating costs/income" (-€2.8 million).
15 The details of non-recurring items are indicated in this press release in the paragraph "Explanatory notes and preparation criteria" for Banco BPM Group.
16 Non-recurring costs in 2016: extraordinary staff costs: €168.1 million for the "Fondi di Solidarietà" in 2012 and 2016 for Banca Popolare di Milano; other administration costs €52.7 million merger costs and systemic costs (extraordinary contribution to the SRF, DGS); adjustments on tangible and intangible assets: €75.6 million for impairments on real estate.
Net profit from financial activities totalled €171.0 million (-5.9%Y/Y). The Y/Y decrease was mainly due to the write-down on the stake in the "Atlante" fund (€40.1 million) and the earn-out from the disposal in 2015 of the 4% stake in ICBI (+€7.4 million) and the adjustment on the value of the intervention in the "Schema Volontario FITD" (-€1.9 million). Net of the foregoing extraordinary items, the net result from financial activities is €205.7 million (+44.4% Y/Y).
As at 31 December 2016, operating costs totalled €1,269.2 million, up 24.5% Y/Y. The item includes nonrecurring costs of €296.4 million17. Net of these non-recurring costs, the operating costs decrease to €972.8 million, basically stable Y/Y. In particular, personnel expenses totalled €775,3 million (+26.6% Y/Y), which, net of the non-recurring costs, is €607.2 million, basically stable Y/Y. Other adminstrative costs totalled €338.3 million (+1.7% Y/Y) which, net of the non-recurring operating items, decreased to €285.5 million (-2.5% Y/Y).
Net adjustments on tangible and intangible assets totalled €155.6 million (vs. €74.8 million in 2015) due to the €75,6 million impairment on software. Net of this one-off, the item decreases to €80 million.
Net adjustments on impaired customer loans and other operations as at 31 December 2016 totalled €420.3 million, up by €78.0 million vs. 31 December 2015. The cost of credit was 121 bps (vs. 100 bps as at 31 December 2015).
The cost of credit was 121 bps (vs. 100 bps as at December 2015).
Net provisions for risks and charges shows a negative balance of €30.3 million (vs. €10 million as at 31 December 2015) owing also to the €10 million provisions for merger costs.
Profit from equity and other investments totalled €141.0 million, compared with €37.4 million as at 31 December 2015, mainly due to the increase in the value of the stake in Anima Holding (€108.7 million) owing to the reclassification of the stake held by BPM under the item "investments" in the AFS portfolio.
After booking a third-party profit of €0.1 million, the parent bank's profit was €72.7 million, compared with the net profit of €288.9 million as at 31 December 2015. Net of the non-recurring items18, the parent bank's profit was €195.2 million (vs. 259.9 million as at 31 December 2015).
Direct customer funding (amounts due to customers, debt securities issued and financial liabilities at fair value) totalled €36,471 million, stable vs. 30 September 2016 (-0.2%) and down vs. 31 December 2015 (- 3.0%). The trend was basically due to the decrease in Repos on the bank's own shares it repurchased (- €1.2 billion) when the transactions expired, and the decrease in "Bonds and structured securities" (-€1.9 billion) owing to fewer funding needs, while the trend in sight deposits was still positive.
Specifically, "amounts due to customers" (€30,688 million) increased by 7.2% vs. December 2015, thanks to the increase in "current accounts and savings deposits" (+10.6%) and, in particular, to sight deposits (+11.5%) and time deposits (+3.3%). Repos decreased (-€554 million) due to the fewer transactions on the "MTS Repo" market owing to the bank fewer funding needs.
Debt securities issued totalled €5,688 million, down (-€3.2 billion) vs. the end of 2015.
Indirect customer funding as at 31 December 2016 totalled €32,626 million, slightly higher vs. September (+0.3%) but down on December 2015 (-4.2%).
Specifically, AUM totalled €22,146 million, i.e. 68% of the total indirect customer funding, and higher than both in September (+2.2%) and at the end of December 2015 (+6.0%) thanks to the net positive inflow in
17 Non-recurring costs in 2016: extraordinary staff costs: €168.1 million for the "Fondi di Solidarietà" in 2012 and 2016 for Banca Popolare di Milano; other administration costs €52.7 million merger costs and systemic costs (extraordinary contribution to the SRF, DGS); adjustments on tangible and intangible assets: €75.6 million for impairments on real estate.
18 Refer to the details of the non-recurring operations in the attachment "ex Gruppo Bipiemme – Reclassified income statement net of the non-recurring items ".
2016 of €1.055 million. In particular, we point out the good trend in fund management (+8.8% Y/Y) and the insurance reserves (+6%), which offset the decrease in individual portfolio management (-9.7%).
As at 31 Dicembre 2016, AUC totalled €10,480 million, less than as at 31 December 2015 (-20.4%) and as at September 2016 (-3.5%) due mainly to investors' preference for AUM products and to the trend in financial markets.
Customer loans as at 31 December 2016 totalled €34,771 million, up vs. both December 2015 (+1.7%) and vs. September 2016 (+1.3%). The increase in 2016 was mainly due to the increase in mid-to-long term loans, in particular in mortgages (+2.8% Y/Y) and in "other Funding" (+5.5%). The trend in customer loans was driven by the increase in new mortgages and loans (+4% vs. the end of 2015). In particular, the bank issued new mortgages in 2016 for a total of €1,873 million, down 4.8% Y/Y, though the decrease was more than offset by the increase in new loans, +10.1%, mainly thanks to the growth in the corporate sector and in Profamily.
Net NPEs as at 31 December 2016 totalled €3,636 million, a slight increase vs. both the end of 2015 (- 0.3%) and Q/Q (+0.5%). On examining each item, we notice the following:
The total coverage rate on NPEs is now 41.9% (+230 bps Y/Y), which increase to 46.1% if we include the cancellations already made on single positions.
More in detail, the coverage rate for single segments reached a significant level, and shows the following trends:
The coverage rate on performing loans is 0.49%, down compared with the 0.53% in the previous quarter.
The group's net equity as at 31 December 2016 was €4,370 million.
The Common Equity Tier 1 ratio was 11.48% and the Common Equity Tier 1 Basel 3 fully phased was 11.42%.
Risk weighted assets totalled €35.4 billion.
During financial year 2017, Banco BPM Group will be engaged with the projects in the 2016-2019 Strategic Plan, with priority being given to completing the process to merge the two group's IT systems and to completing the department to manage the non-performing loans.
The management of the non-performing loans will be honed to recovering profitability as the advantages offered by the initial effects of the synergies from the the merger start to materialise.
The trend in proceeds will benefit from a further reduction in the cost of funding, an increase in loans and an increase in fees and commission from management services, advisory and brokerage, which will offset, at least partially, the anticipated decrease in the resut from financial activities.
The focus on keeping operating costs under control, by rationalisation, improving operating efficiency and specific spending review measures, will be one of the major factors for attention, along with the steady reduction in the stock of NPEs by way of both internal workout and disposals.
Mr Gianpietro Val, as the manager responsible for preparing the bank's accounts, hereby states, pursuant to Article 154 bis, paragraph 2 of the Testo Unico della Finanza (the Consolidated Finance Act), that the accounting information contained in this press release corresponds to the documentary evidence, corporate books and accounting records.
Banco Popolare and Banca popolare di Milano's results as at 31 December 2016 as well as Banco BPM Group's pro-forma results as at 31 December 2016 will be presented to the financial community at a conference call set for today 10 February 2016 at 6:30 p.m. (C.E.T.). The instructions to connect to the event can be found under Investor Relations on the home page of the bank's website www.bancobpmspa.it.
***
Milan, 10 February 2017
The aggregate figures for Banco BPM Group were prepared by adding the figures in the consolidated financial statements as at 31/12/2016 for the former Banco Popolare Group and the former BPM Group and then by:
Banco Popolare and Bpm's reclassified accounts were prepared by aggregating items using partially different rules. The main differences are as follows:
The aggregate accounts used by Banco BPM have been prepared using Banco Popolare's reclassification criteria.
For continuity purposes with previously published notices and to be consistent with the figures in both banks' financial statements, the same accounts used by the two banks have been kept.
In compliance with Consob Ruling DEM/6064293 dated 28 July 2006, the main non-recurring items have been highlighted, namely:
the item "other administration costs" includes the merger costs of €55.6 million, the extraordinary contribution to the "Fondo di Risoluzione Nazionale" of €117.7 million, the 2015 fees to allow the bank to convert the deferred tax assets into tax credits for €27.3 million (before taxes);
the item "adjustments on tangible and intangible assets" includes the higher adjustments needed to take into consideration the shorter life of the former BPM Group's software and the higher adjustment from the reduction in the value recoverable on some of the former Banco Popolare Group's real estate, for a total of €107.8 million before taxes;
Furthermore, we point out that the 2016 income statement includes the extraordinary impact from the plan to increase the average coverage rate on NPEs. The broad estimated impact on the income statement from discontinuing the valuation processes of NPEs, brought in during 2016, totalled approx. 1.6 billion.
The valuation criteria used to prepare the balance-sheet and the income statement of Gruppo Banco Popolare were the same followed to prepare the consolidated financial statements at 31 December 2016, in compliance with IAS/IFRS international accounting standards and associated IFRIC interpretations, as adopted by the European Commission, pursuant to EC Regulation no. 1606 of 19 July 2002.
The adoption of certain accounting standards necessarily calls for the use of estimates and assumptions that have an impact on the value of assets and liabilities recognized in the accounts.
The assumptions used to calculate estimates take into account all available information at 31 December 2016.
Considering the pervasive uncertainty characterizing the reference environment, it cannot be ruled out that the estimates and assumptions, albeit reasonable, may fail to be confirmed in the future scenarios in which the Group may be operating. Therefore, future actual results may differ from the estimates generated to prepare the balance-sheet and income statement as at 31 December 2016 and adjustments may be necessary that cannot be predicted or estimated today against the carrying amount of assets and liabilities recognized in the accounts.
Please find a description of the recognition, classification, valuation, cancellation criteria for items reported in the financial statements in the Annual Report as at 31 December 2016 ("Part A – Accounting policies").
As to the bad loan and, consequently, the NPL coverage ratios, covered by this News Release, it should be pointed out that the ratio's numerator, represented by write-downs, and its denominator, represented by gross exposure, include total write-offs. This amount corresponds to the loan amount considered to be uncollectable and thus being written off the accounts; notably, these are loans to borrowers under insolvency procedures (bankruptcy, compulsory receivership, agreements with creditors, extraordinary administration for large companies in distress), for which a recovery attempt is still underway through the regular filing of a proof of claim covering the entire gross exposure, including the amounts that have been written off. At balance sheet level, please note that the use by Gruppo Banco Popolare of write-offs is considered an alternative to the accounting treatment based on the recognition of a loan loss provision, but it gives rise to an underestimation of coverage ratios as the bad loan amount that is fully written off is eliminated, while the loan amount considered to be recoverable because validly secured is recognized in the balance sheet. As a result, by including write-offs in the above described calculation it is possible to highlight the actual coverage level of exposures, as if Gruppo Banco Popolare had used the alternative accounting treatment based on the recognition of a loan loss provision.
For a better understanding of the financial information illustrated in this News Release and in the attached financial statements, please note that:
In compliance with IFRS 3, the income statement of Gruppo Banco Popolare includes the income statement effects caused by the allocation of the merger difference in the business combination with Gruppo Banca Popolare Italiana and of the price paid to acquire Banca Italease under the above standard (so called Purchase Price Allocation – PPA). To this respect please note that the income statement effects under examination have gradually tapered off and some of them are no longer significant. The only worth mentioning residual effects come from the amortization of intangible assets having a finite useful life recognized after the acquisition of Gruppo Banca Popolare Italiana that are posted under the line item "Other operating income". The income statement effect at 31 December 2016 came in at -22.0 million (-23.8 million at 31 December 2015).
The overall effect on the net consolidated income at 31 December 2016 was -17.3 million (-15.4 million at 31 December 2015).
In 2016 the only significant change has been the final exit of the subsidiary Banco Popolare Luxembourg from the consolidation scope, following the sale closed on 29 February 2016. The shareholding in Aletti Suisse, transferred to Banca Aletti S.p.A on 4 January 2016, did not fall within the scope of the sold assets, nor did the risks and benefits tied to the loan portfolio of Banco Popolare Luxembourg, which are still borne by Banco Popolare.
On 1 June, the merger of Tiepolo Finance 2 S.r.l. into the Parent Company took legal effect. The merged company has been cancelled from the Banking Group with no effects on the Group's income statement or equity accounts. Furthermore, during the year the liquidation procedures were completed regarding the associates Banca Italease Funding LLC, Banca Italease Capital Trust and Italease Finance S.p.A., as well as Borgo del Forte S.r.l., which was previously accounted for under the equity method.
In compliance with the directives set forth in Consob's Communication no. DEM/6064293 dated 28 July 2006, the effects of the main non-recurring items are highlighted in the report on operations.
Net income at 31 December 2016 was penalized by the impact from the decisions aimed at increasing the average NPL coverage required by the ECB as a pre-requisite for the authorization by the Regulator of the merger plan with Banca Popolare di Milano.
In addition to amounts that have already been shown in items that by their own nature are non-recurring (e.g., profit or loss from discontinued operations), the 2016 income statement was penalized by the impact from the decline in the book value of debt securities in issue measured at fair value driven by the downward revision of Banco Popolare's credit rating as compared with the end of the previous period (+5.9 million, gross of tax effect). For the same reason the income statement as at 31 December 2015 had reported a positive impact of 4.9 million, gross of tax effect.
The item "Net financial result" (ex-FVO) in 2016 included an earn-out payment of € 25.3 million, before taxes, related to the sale (finalised in 2015) of the stake held in Istituto Centrale delle Banche Popolari Italiane S.p.A. In 2015 there was a €241.2 million capital gain from the disposal of the stake held in ICBPI and in Arca Sgr classified as assets available for sale. "Personnel expenses" includes costs for the surplus-staff fund pursuant to the agreement of 23 December 2016 for 748 people at a cost of €198.6 million. In 2015 the cost was €80.4 million, plus €14.2 million as a redundancy fund, thus a total of €94.6 million.
The line-item "other administrative expenses" includes the annual fee to be paid to retain the right to convert "Eligible DTAs" into tax credits in case of recognition of a net loss for the year and/or tax losses. The new regulation was introduced in the current year and is better explained under bullet point 6, below. It is a retroactive measure, requiring the payment of the fee also for FY 2015. The amount of this systemic fee charged to income at 31 December 2016 but accrued in the prior year totals 27.2 million, gross of tax effect. "Other administrative expenses" also include 31.7 million of charges connected with the merger with Gruppo BPM, again gross of tax effect. Again, 88,8 million of contributions to the National Resolution Fund have been charged to the same lineitem, while in 2015 they amounted to 113.9 million.
The 2016 income statement was negatively impacted by adjustments on real-estate assets classified as tangible assets purchased as investments in order to align their book value to the estimated obtainable value, €32.2 million. In the same period of 2015, there was a gross negative impact of €45.2 million.
"Net adjustments on loans to banks and other assets" includes long-term devaluations on financial assets available for sale (€23.1 million). €19.6 million of this amount is for the "Atlante" fund and the rest for C.R. Cesena.
The 2016 income statement was also negatively impacted by non-recurring gross provisions (€10 million) for risks and costs for tax disputes and for lawsuits with a subsidiary (€4.8 million). In 2015 the bank provisioned €18.7 million for the negative outcome of some tax disputes.
23016 was also burdened by the negative impact from "adjustments on goodwill on CGU Investment Banking & Asset Management of €279 million as a consequence of the impairment test related to the situation as at 31 December 2016.
"Profit(Loss) on disposals of equity and investments" as at 31 December 2016 includes €17.0 million profit, before taxes, mainly due to the disposal of real estate held as an investment.
Finally, the 2016 income statement was affected by "costs on current operations" includes costs to settle a dispute (€10.9 million). The same item in 2015 benefitted from booking advanced tax payments related to previous tax losses by the acquired Banca Italease (€85.1 million).
On 1 January 2014, the new harmonized prudential rules for banks and investment firms contained in the Capital Requirements Regulation (EU) no. 575/2013 ("CRR") and in the Capital Requirements Directive 2013/36/EU (CRD IV") of 26 June 2013 have come into effect, transposing the banking supervisory standards defined by the Basel Committee (Basel 3 framework) in the European Union. The Regulation and its technical rules are directly applicable in national legislations and represent the so called "Single Rulebook".
Note that the new regulation defined in the "Single Rulebook" provides for a phase-in period for the gradual implementation of certain new rules. The estimated capital ratios the Group is expected to reach at the end of the "phase-in" period are called "Basel 3 Fully-Loaded".
The minimum capital requirements for 2016 based on the current regulation are as follows:
Please note that on 4 October 2016, the Bank of Italy, with Update no. 18 of Circular no. 285, brought the CCB down to 1.25% for 2017 and to 1.875% for 2018.
By way of its provision dated 24 June 2016, the Bank of Italy confirmed that the countercyclical capital buffer has been kept unchanged at zero per cent also for Q3 2016.
On 25 November, the European Central Bank (ECB) informed Banco Popolare of its final decision on minimum capital ratios to be complied with on an ongoing basis by Banco. The decision is based on art. 16 (2) (a) of EU Regulation no. 1024 of 15 October 2013 which gives the ECB the power to require institutions to hold own funds exceeding the minimum capital requirements laid down in current regulations. The minimum level required by the Regulator is a Common Equity Tier 1 ratio (CET1 ratio) of 9.55%.
With letter dated 29 April 2016, the Bank of Italy informed the banks of the Group that total contributions to be paid to the Single Resolution Fund for FY 2016 amounted at first to 44.4 million euro, then corrected to 44.3 million. The letter referred also the possibility for intermediaries to pay up to 15% of the total contributions due with irrevocable payment commitments (IPC). The Group did not exercise this option, and it charged to income for the period the entire contribution amount already paid in under the line-item "other administrative expenses".
As to the deposit guarantee scheme, the 2016 contribution, estimated at 23 million, has been fully charged to the line-item "other administrative expenses" in Q3, since, based on conducted inquiries, the 30 September has been deemed to be the binding reference date to recognize this obligation. In Q4 2016, the actual 2016 contribution, communicated by the Fondo Interbancario di Tutela dei Depositi, was set at 22.3 million, and therefore the charge to income under the specified line-item has been corrected accordingly.
On 3 May 2016 Law Decree no.59/2016 was published in the Official Gazette and came into effect on the day after its publication and transposed into law by amending art.1, paragraph 1 of Law no. 119 of 30 June 2016. Among other things, the Decree includes new provisions on "Eligible DTAs", i.e., deferred tax assets (DTAs) complying with the requirements set forth by Law no. 214 of 22 December 2011 ("Law 214/2011") to transform DTAs into tax credits. On 31 December 2015, eligible DTAs amounted to 2,445.1 million. Based on the new regulatory provisions mentioned above, companies can keep on adopting the current rules on the conversion of DTAs into tax credits, provided that they pay an annual fee for each financial year as of 2015 up until 2029, when applicable. The election into the optional regime is irrevocable, and is considered accepted by conduct through the payment of the annual fee for financial year 2015 by 31 July 2016.
As clarified by the press release of the Council of Ministers published on 29 April last, this rule should overcome the doubts raised by the European Commission on the presence of State Aid elements in the current regulatory framework on the conversion into tax credits of eligible DTAs under Law 214/2011.
More specifically, the annual fee to be paid to be authorized to convert the eligible DTAs into tax credits must be calculated every year by applying a 1.5% charge to a "base" obtained by adding together the difference between convertible DTAs recognized in the reference annual report and the corresponding DTAs recognized in the 2007 annual report, the amount of DTAs converted into tax assets from 2008 up until the reference financial year, and by subtracting the taxes specified in the Decree and paid over the same period. Fees are deductible for both IRES and IRAP purposes in the financial year they have been paid.
The Group elected into the optional regime by paying the fee for FY 2015 by 31 July 2016. The fee has been charged to income in 2016 under the line-item "Other Administrative Expenses", together with the estimated fee amount for FY 2016 (to be paid in 2017), amounting to 27,2 million, gross of tax effect.
Please note that this pro-rata temporis accrual accounting method has been applied in keeping with the prevailing opinion (as no official interpretation is available). This interpretation is based on the fact that in substance it is a cost whose amount varies depending on the evolution of the calculation base over time. As to the amount charged to income for the year, the calculation was based on the best interpretation of the text of the Decree, taking into consideration the clarifications given by the Italian Inland Revenue Authority with Circular no.32 of 22 July 2016, therefore it could change depending on all possible further indications and interpretations that might be put forward, and - with respect to the amount accrued for FY 2016 - on the actual amount of taxes paid for FY 2016.
The reclassified balance sheet and income statement reflect on a consolidated basis the financial accounts of Banco Popolare and its subsidiaries with respect to 31 December 2016, or, when not available, to the most recently approved financial reports. Similarly, the equity method-based treatment of associates was carried out based on the accounting information submitted to Banco Popolare as at 31 December 2016, or, if not available, the most recent financial reports prepared by the associates.
In compliance with Consob Ruling DEM/6064293 of 28 July 2006, the impact of the main non-recurring items has been explained in the section on the income statement Results.
The following are details about the items in the Reclassified income statement:
"Net provisions for risks and costs" includes other costs arising from the merger, €10 million;
"Profit (Loss) from equity and investments and adjustments on goodwill and intangibles" includes income from the transfer of the stake in Anima Holding from the item "Investments" to "Assets available for sale" following the decision of the Italian postal service "Poste Italiane" not to renew the shareholders' pact. In applying the Accounting Principles, the item "assets available for sale" were valued at fair value (stock-exchange price of the listed stock) which led to proceeds of €108.7 million. Furthermore, the item also includes €12.2 million income from disposals;
Please note that the original version of this press release is in Italian. In case of misunderstandings the Italian version shall prevail
For information:
Investor Relations Roberto Peronaglio +39 02.77.00.2057 [email protected] Communication Matteo Cidda +39 02.77.00.7438 [email protected] Press Office Monica Provini +39 02.77.00.3515 monica.provini@ bancobpmspa.it
| ASSETS | |||
|---|---|---|---|
| 31 December 2016 (in euro thousand) |
Banco BPM Group (*) |
BP Group | BPM Group |
| Cash and cash equivalents | 897,704 | 648,255 | 249,449 |
| Financial assets and hedging derivatives | 36,580,435 | 25,650,351 | 11,259,682 |
| Due from banks | 6,678,493 | 4,559,188 | 2,185,297 |
| Customer loans | 110,550,576 | 75,840,234 | 34,771,008 |
| Equity investments | 1,594,849 | 1,195,214 | 231,677 |
| Property and equipment | 2,695,781 | 1,977,766 | 718,015 |
| Intangible assets | 1,833,509 | 1,751,895 | 81,614 |
| Non-current assets held for sale and discontinued operations | 77,369 | 77,369 | - |
| Other assets | 7,346,204 | 5,710,731 | 1,634,297 |
| Total | 168,254,920 | 117,411,003 | 51,131,039 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | BPM Group | |||
|---|---|---|---|---|
| 31 December 2016 (in euro thousand) |
Group (*) | BP Group | ||
| Due to banks | Banco BPM 23,276,415 16,017,401 116,773,095 80,446,701 10,682,892 9,438,062 1,706,089 1,133,434 960 960 3,816,296 2,729,597 58,238 69,568 11,940,935 7,575,280 |
7,385,667 | ||
| Due to customers and debt securities | 36,471,096 | |||
| Financial liabilities and hedging derivatives | 1,248,658 | |||
| Liability provisions | 572,655 | |||
| Liabilities associated with assets held for sale | - | |||
| Other liabilities | 1,087,207 | |||
| Minority interests | 1,306 | |||
| Group shareholders' equity | 4,364,450 | |||
| Total | 168,254,920 | 117,411,003 | 51,131,039 |
(*) Data of Banco BPM Group are calculated as the sum of the figures of the consolidated financial accounts as at 31/12/2016 of former Banco Popolare Group and former BPM Group, net of intercompany relations and adjustments illustrated in the "Explanatory Notes and general preparation principles"
| FY 2016 (in euro thousand) |
Banco BPM Group (*) |
BP Group | BPM Group |
|---|---|---|---|
| Net interest income | 2,107,771 | 1,318,061 | 788,040 |
| Income (loss) from investments in associates carried at equity | 147,862 | 124,547 | 22,457 |
| Net interest, dividend and similar income | 2,255,633 | 1,442,608 | 810,497 |
| Net fee and commission income | 1,903,396 | 1,318,158 | 585,254 |
| Other net operating income | 139,215 | 101,861 | 37,354 |
| Net financial result (excluding FVO) | 440,083 | 197,517 | 241,613 |
| Other operating income | 2,482,694 | 1,617,536 | 864,221 |
| Total income | 4,738,327 | 3,060,144 | 1,674,718 |
| Personnel expenses | (2,245,469) | (1,470,173) | (775,296) |
| Other administrative expenses | (1,190,503) | (852,244) | (338,259) |
| Amortization and depreciation | (320,931) | (165,284) | (155,647) |
| Operating costs | (3,756,903) | (2,487,701) | (1,269,202) |
| Profit (loss) from operations | 981,424 | 572,443 | 405,516 |
| Net adjustments on loans to customers | (2,958,152) | (2,539,331) | (418,821) |
| Net adjustments on other assets | (112,461) | (40,799) | (72,021) |
| Net provisions for risks and charges | (55,062) | (24,737) | (30,325) |
| Impairment of goodwill and equity investments | (279,000) | (279,000) | - |
| Profit (loss) on the disposal of equity and other investments | 157,990 | 17,031 | 140,959 |
| Income (loss) before tax from continuing operations | (2,265,261) | (2,294,393) | 25,308 |
| Tax on income from continuing operations (excluding FVO) | 629,674 | 583,117 | 47,492 |
| Income (loss) after tax | |||
| from discontinued operations | 2,524 | 2,524 | - |
| Income (loss) attributable to minority interests | 19,352 | 22,848 | (76) |
| Net income (loss) for the period excluding FVO | (1,613,711) | (1,685,904) | 72,724 |
| Fair Value Option result (FVO) | 5,853 | 5,853 | - |
| Tax on FVO result | (1,609) | (1,609) | - |
| FVO Impact | 4,244 | 4,244 | - |
| Net income (loss) for the period | (1,609,467) | (1,681,660) | 72,724 |
(*) Data of Banco BPM Group are calculated as the sum of the figures of the consolidated financial accounts as at 31/12/2016 of former Banco Popolare Group and former BPM Group, net of intercompany relations and adjustments illustrated in the "Explanatory Notes and general preparation principles"
| Reclassified assets (in euro thousand) |
31/12/2016 | 31/12/2015 (*) | Chg. | |
|---|---|---|---|---|
| Cash and cash equivalents | 648,255 | 587,383 | 60,872 | 10.4% |
| Financial assets and hedging derivatives | 25,650,351 | 27,454,945 | (1,804,594) | (6.6%) |
| Due from banks | 4,559,188 | 2,817,832 | 1,741,356 | 61.8% |
| Customer loans | 75,840,234 | 78,421,634 | (2,581,400) | (3.3%) |
| Equity investments | 1,195,214 | 1,166,324 | 28,890 | 2.5% |
| Property and equipment | 1,977,766 | 2,132,633 | (154,867) | (7.3%) |
| Intangible assets | 1,751,895 | 2,042,120 | (290,225) | (14.2%) |
| Non-current assets held for sale and discontinued operations | 77,369 | 109,983 | (32,614) | (29.7%) |
| Other assets | 5,710,731 | 5,428,245 | 282,486 | 5.2% |
| Total | 117,411,003 | 120,161,099 | (2,750,096) | (2.3%) |
(*) Figures of the previous period have been adjusted to allow a homogenous comparison.
| Reclassified liabilities (in euro thousand) |
31/12/2016 | 31/12/2015 (*) | Chg. | |
|---|---|---|---|---|
| Due to banks | 16,017,401 | 16,334,739 | (317,338) | (1.9%) |
| Due to customers, debt securities issued and financial | ||||
| liabilities designated at fair value | 80,446,701 | 82,141,444 | (1,694,743) | (2.1%) |
| Financial liabilities and hedging derivatives | 9,438,062 | 8,488,476 | 949,586 | 11.2% |
| Liability provisions | 1,133,434 | 1,060,648 | 72,786 | 6.9% |
| Liabilities associated with assets held for sale | 960 | 342,265 | (341,305) | (99.7%) |
| Other liabilities | 2,729,597 | 3,246,793 | (517,196) | (15.9%) |
| Minority interests | 69,568 | 53,169 | 16,399 | 30.8% |
| Shareholders' equity | 7,575,280 | 8,493,565 | (918,285) | (10.8%) |
| - Capital and reserves | 9,256,940 | 8,063,492 | 1,193,448 | 14.8% |
| - Net income (loss) for the period | (1,681,660) | 430,073 | (2,111,733) | |
| Total | 117,411,003 | 120,161,099 | (2,750,096) | (2.3%) |
(*) Figures of the previous period have been adjusted to allow a homogenous comparison.
| (in euro thousand) | 2016 | 2015 | Chg. |
|---|---|---|---|
| Net interest income | 1,318,061 | 1,545,386 | (14.7%) |
| Income (loss) from investments in associates carried at equity | 124,547 | 141,479 | (12.0%) |
| Net interest, dividend and similar income | 1,442,608 | 1,686,865 | (14.5%) |
| Net fee and commission income | 1,318,158 | 1,425,410 | (7.5%) |
| Other net operating income | 101,861 | 109,644 | (7.1%) |
| Net financial result (excluding FVO) | 197,517 | 441,081 | (55.2%) |
| Other operating income | 1,617,536 | 1,976,135 | (18.1%) |
| Total income | 3,060,144 | 3,663,000 | (16.5%) |
| Personnel expenses | (1,470,173) | (1,433,610) | 2.6% |
| Other administrative expenses | (852,244) | (804,860) | 5.9% |
| Amortization and depreciation | (165,284) | (166,362) | (0.6%) |
| Operating costs | (2,487,701) | (2,404,832) | 3.4% |
| Profit (loss) from operations | 572,443 | 1,258,168 | (54.5%) |
| Net adjustments on loans to customers | (2,539,331) | (803,933) | 215.9% |
| Net adjustments on other assets | (40,799) | (54,181) | (24.7%) |
| Net provisions for risks and charges | (24,737) | (50,791) | (51.3%) |
| Impairment of goodwill and equity investments | (279,000) | - | |
| Profit (loss) on the disposal of equity and other investments | 17,031 | (4,400) | |
| Income (loss) before tax from continuing operations | (2,294,393) | 344,863 | |
| Tax on income from continuing operations (excluding FVO) | 583,117 | 70,518 | 726.9% |
| Income (loss) after tax | |||
| from discontinued operations | 2,524 | (7,280) | |
| Income (loss) attributable to minority interests | 22,848 | 18,684 | 22.3% |
| Net income (loss) for the period excluding FVO | (1,685,904) | 426,785 | |
| Fair Value Option result (FVO) | 5,853 | 4,912 | 19.2% |
| Tax on FVO result | (1,609) | (1,624) | (0.9%) |
| FVO Impact | 4,244 | 3,288 | 29.1% |
| Parent Company's net income (loss) | (1,681,660) | 430,073 |
Reclassified consolidated income statement: quarterly evolution
| Reclassified income statement | 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|---|
| (in euro thousand) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 (*) |
| Net interest income | 303,192 | 323,612 | 339,719 | 351,538 | 368,860 | 387,465 | 401,969 | 387,092 |
| Income (loss) from investments in associates carried at equity | 31,249 | 29,822 | 27,362 | 36,114 | 40,958 | 39,203 | 36,672 | 24,646 |
| Net interest, dividend and similar income | 334,441 | 353,434 | 367,081 | 387,652 | 409,818 | 426,668 | 438,641 | 411,738 |
| Net fee and commission income | 367,889 | 310,961 | 322,483 | 316,825 | 340,184 | 314,141 | 350,204 | 420,881 |
| Other net operating income | 30,984 | 24,298 | 22,739 | 23,840 | 37,323 | 23,497 | 20,267 | 28,557 |
| Net financial result (excluding FVO) | 13,754 | 84,991 | 40,883 | 57,889 | 267,785 | 29,967 | 50,315 | 93,014 |
| Other operating income | 412,627 | 420,250 | 386,105 | 398,554 | 645,292 | 367,605 | 420,786 | 542,452 |
| Total income | 747,068 | 773,684 | 753,186 | 786,206 | 1,055,110 | 794,273 | 859,427 | 954,190 |
| Personnel expenses | (507,149) (314,117) (323,378) (325,529) | (423,317) (327,702) (342,176) (340,415) | ||||||
| Other administrative expenses | (255,589) (192,654) (199,380) (204,621) | (316,253) (161,021) (162,573) (165,013) | ||||||
| Amortization and depreciation | (55,434) | (46,641) | (32,863) | (30,346) | (73,851) | (33,696) | (26,321) | (32,494) |
| Operating costs | (818,172) (553,412) (555,621) (560,496) | (813,421) (522,419) (531,070) (537,922) | ||||||
| Profit (loss) from operations | (71,104) | 220,272 | 197,565 | 225,710 | 241,689 | 271,854 | 328,357 | 416,268 |
| Net adjustments on loans to customers | (839,586) (719,323) (296,026) (684,396) | (229,143) (199,483) (193,920) (181,387) | ||||||
| Net adjustments on other assets | (32,767) | (658) | (9,062) | 1,688 | (23,171) | (5,150) | (22,286) | (3,574) |
| Net provisions for risks and charges | (17,253) | (5,497) | 1,389 | (3,376) | 14,603 | (15,768) | (6,428) | (43,198) |
| Impairment of goodwill and equity investments | (279,000) | - | - | - | - | - | - | - |
| Profit (loss) on the disposal of equity and other investments | 13,873 | 2,873 | 596 | (311) | (108) | (246) | (3,959) | (87) |
| Income (loss) before tax from continuing operations | (1,225,837) (502,333) (105,538) (460,685) | 3,870 | 51,207 | 101,764 | 188,022 | |||
| Tax on income from continuing operations (excluding FVO) | 251,629 | 156,603 | 39,303 | 135,582 | 72,593 | (5,285) | (23,328) | 26,538 |
| Income (loss) after tax | ||||||||
| from discontinued operations | 4,009 | - | (5) | (1,480) | 307 | 200 | (6,523) | (1,264) |
| Income (loss) attributable to minority interests | 2,551 | 14,717 | 2,639 | 2,941 | 7,684 | 5,869 | 1,199 | 3,932 |
| Net income (loss) for the period excluding FVO | (967,648) (331,013) | (63,601) (323,642) | 84,454 | 51,991 | 73,112 | 217,228 | ||
| Fair Value Option result (FVO) | - | (3,904) | (5,281) | 15,038 | (6,295) | 7,057 | 16,771 | (12,621) |
| Tax on FVO result | - | 1,074 | 2,288 | (4,971) | 2,082 | (2,334) | (5,546) | 4,174 |
| FVO Impact | - | (2,830) | (2,993) | 10,067 | (4,213) | 4,723 | 11,225 | (8,447) |
| Parent Company's net income (loss) | (967,648) (333,843) | (66,594) (313,575) | 80,241 | 56,714 | 84,337 | 208,781 |
(*) Figures of the Q1 2015 have been adjusted to allow a homogenous comparison.
| Bipiemme Group - Balance Sheet Reclassified | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (euro /000) |
|||||||||
| Assets | 31.12.2016 | 30.09.2016 | 31.12.2015 | Change A-B | Change A-C | ||||
| A | B | C | amount | % | amount | % | |||
| Cash and equivalents | 249,449 | 206,699 | 300,714 | 42,750 | 20.7 | -51,265 | -17.0 | ||
| Financial assets at fair value and hedging derivatives: | 11,270,196 | 11,185,266 | 11,416,540 | 84,930 | 0.8 | -146,344 | -1.3 | ||
| - Financial assets held for trading | 1,562,491 | 2,001,963 | 1,797,874 | -439,472 | -22.0 | -235,383 | -13.1 | ||
| - Financial assets designed at fair value | 19,240 | 23,974 | 75,543 | -4,734 | -19.7 | -56,303 | -74.5 | ||
| - Financial assets available for sale | 9,633,116 | 9,036,135 | 9,491,248 | 596,981 | 6.6 | 141,868 | 1.5 | ||
| - Hedging derivatives | 44,835 | 111,134 | 40,638 | -66,299 | -59.7 | 4,197 | 10.3 | ||
| - Changes in fair value of hedged items (+ / -) | 10,514 | 12,060 | 11,237 | -1,546 | -12.8 | -723 | -6.4 | ||
| Loans and advances to bank | 2,185,297 | 2,128,135 | 1,224,717 | 57,162 | 2.7 | 960,580 | 78.4 | ||
| Loans and advances to customers | 34,771,008 | 34,322,837 | 34,186,837 | 448,171 | 1.3 | 584,171 | 1.7 | ||
| Fixed assets | 1,031,306 | 1,212,797 | 1,199,459 | -181,491 | -15.0 | -168,153 | -14.0 | ||
| Non recurrent assets and disposal groups held for sale |
0 | 0 | 0 | 0 | n.a. | 0 | n.a | ||
| Other assets | 1,623,783 | 1,566,020 | 1,875,033 | 57,763 | 3.7 | -251,250 | -13.4 | ||
| Total assets | 51,131,039 | 50,621,754 | 50,203,300 | 509,285 | 1.0 | 927,739 | 1.8 |
| Liabilities and Shareholders Equities | 31.12.2016 | 30.09.2016 | 31.12.2015 | Change A-B | Change A-C | ||
|---|---|---|---|---|---|---|---|
| A | B | C | amount | % | amount | % | |
| Due to banks | 7,385,667 | 6,160,654 | 4,839,439 | 1,225,013 | 19.9 | 2,546,228 | 52.6 |
| Due to customers | 30,688,439 | 29,446,529 | 28,622,852 | 1,241,910 | 4.2 | 2,065,587 | 7.2 |
| Debt securities in issue | 5,687,758 | 6,985,336 | 8,849,290 | -1,297,578 | -18.6 | -3,161,532 | -35.7 |
| Financial liabilities and hedging derivatives: | 1,363,498 | 1,564,067 | 1,379,948 | -200,569 | -12.8 | -16,450 | -1.2 |
| - Financial liabilities held for trading | 1,215,764 | 1,384,979 | 1,183,557 | -169,215 | -12.2 | 32,207 | 2.7 |
| - Financial liabilities designed at fair value | 94,899 | 97,496 | 129,627 | -2,597 | -2.7 | -34,728 | -26.8 |
| - Hedging derivatives | 32,894 | 54,995 | 48,678 | -22,101 | -40.2 | -15,784 | -32.4 |
| - Changes in fair value of hedged items (+ / -) | 19,941 | 26,597 | 18,086 | -6,656 | -25.0 | 1,855 | 10.3 |
| Other liabilities | 1,067,266 | 1,411,712 | 1,429,895 | -344,446 | -24.4 | -362,629 | -25.4 |
| Provision for specific use | 572,655 | 569,986 | 434,555 | 2,669 | 0.5 | 138,100 | 31.8 |
| Share capital and reserve | 4,291,726 | 4,386,947 | 4,338,440 | -95,221 | -2.2 | -46,714 | -1.1 |
| Minority interests (+ / -) | 1,306 | 8,430 | 19,974 | -7,124 | -84.5 | -18,668 | -93.5 |
| Net profit (loss) for the period ( +/ -) | 72,724 | 88,093 | 288,907 | -15,369 | n.s. | -216,183 | -74.8 |
| Total liabilities and Shareholders Equities | 51,131,039 | 50,621,754 | 50,203,300 | 509,285 | 1.0 | 927,739 | 1.8 |
| Bipiemme Group - Consolidated Reclassified Income Statement | ||||
|---|---|---|---|---|
| (euro /000) |
||||
| Change | ||||
| 2016 | 2015 | Amount | % | |
| Net interest income | 788,040 | 806,746 | (18,706) | (2.3) |
| Non-interest income | 816,087 | 860,471 | (44,384) | (5.2) |
| - Net fees and commission income | 585,254 | 605,996 | (20,742) | (3.4) |
| - Other operating income: | 230,833 | 254,475 | (23,642) | (9.3) |
| - Share of profit (loss) on investments valued under the equity method | 22,457 | 32,577 | (10,120) | (31.1) |
| - Net income (loss) from financial activities | 171,022 | 181,724 | (10,702) | (5.9) |
| - Other operating income/expenses | 37,354 | 40,174 | (2,820) | (7.0) |
| Operating income | 1,604,127 | 1,667,217 | (63,090) | (3.8) |
| Administrative expenses: | (1,113,555) | (944,978) | (168,577) | (17.8) |
| a) personnel expenses | (775,296) | (612,382) | (162,914) | (26.6) |
| b) other administrative expense | (338,259) | (332,596) | (5,663) | (1.7) |
| Depreciation and amortisation | (155,647) | (74,773) | (80,874) | (108.2) |
| Operating costs | (1,269,202) | (1,019,751) | (249,451) | (24.5) |
| Operating profit | 334,925 | 647,466 | (312,541) | (48.3) |
| Net adjustments to loans and other operations | (420,251) | (342,236) | (78,015) | (22.8) |
| Net provisions for risk and charges | (30,325) | 10,758 | (41,083) | 381.9 |
| Profit (loss) from equity and other other investments and adjustments to goodwill and intangible assets |
140,959 | 37,433 | 103,526 | 276.6 |
| Profit (loss) before tax from continuing operations | 25,308 | 353,421 | (328,113) | (92.8) |
| Tax on income from continuing operations | 47,492 | (63,512) | 111,004 | 174.8 |
| Net profit (loss) for the period | 72,800 | 289,909 | (217,109) | (74.9) |
| Minority interests | (76) | (1,002) | 926 | 92.4 |
| Net profit | 72,724 | 288,907 | (216,183) | (74.8) |
| Bipiemme Group - Consolidated Reclassified Income Statement - quarterly evolution | ||||||||
|---|---|---|---|---|---|---|---|---|
| (euro /000) |
||||||||
| 2 | 0 16 |
2 0 |
15 | |||||
| 3 1. 12 |
3 0 9 |
3 0 6 |
3 1. 3 |
3 1. 12 |
3 0 9 |
3 0 6 |
3 1. 3 |
|
| Net interest income | 19 2 , 6 6 5 |
19 2 , 2 9 8 |
19 6 , 5 7 5 |
2 0 6 , 5 0 2 |
19 9 , 9 3 0 |
2 0 3 , 9 3 6 |
2 0 6 , 7 5 9 |
19 6 , 12 1 |
| Non-interest income | 2 0 6 , 8 2 5 |
17 3 , 2 11 |
2 5 3 , 4 5 4 |
18 2 , 5 9 7 |
2 6 8 , 3 2 1 |
17 1, 4 9 7 |
19 1, 0 0 7 |
2 2 9 , 6 4 6 |
| - Net fees and commission income | 143,583 | 138,327 | 152,049 | 151,295 | 154,357 | 144,886 | 158,461 | 148,292 |
| - Other operating income: | 63,242 | 34,884 | 101,405 | 31,302 | 113,964 | 26,611 | 32,546 | 81,354 |
| - Share of profit (loss) on investments valued under | 4,466 | 4,121 | 5,238 | 8,632 | 8,225 | 5,269 | 7,574 | 11,509 |
| the equity method | ||||||||
| - Net income (loss) from financial activities | 49,016 | 22,439 | 86,112 | 13,455 | 100,077 | 10,820 | 12,434 | 58,393 |
| - Other operating income/expenses | 9,760 | 8,324 | 10,055 | 9,215 | 5,662 | 10,522 | 12,538 | 11,452 |
| Operating income | 3 9 9 , 4 9 0 |
3 6 5 , 5 0 9 |
4 5 0 , 0 2 9 |
3 8 9 , 0 9 9 |
4 6 8 , 2 5 1 |
3 7 5 , 4 3 3 |
3 9 7 , 7 6 6 |
4 2 5 , 7 6 7 |
| Administrative expenses: | (271,078) | (382,638) | (225,954) | (233,885) | (287,722) | (209,007) | (220,251) | (227,998) |
| a) personnel expenses | (154,270) | (306,174) | (159,827) | (155,025) | (160,339) | (148,678) | (148,632) | (154,733) |
| b) other administrative expense | (116,808) | (76,464) | (66,127) | (78,860) | (127,383) | (60,329) | (71,619) | (73,265) |
| Depreciation and amortisation | (97,234) | (20,641) | (19,305) | (18,467) | (24,067) | (17,582) | (16,629) | (16,495) |
| Operating costs | (3 6 8 , 3 12 |
) (4 0 3 , 2 7 9 ) |
(2 4 5 , 2 5 9 ) |
(2 5 2 , 3 5 2 ) |
(3 11, 7 8 9 |
) (2 2 6 , 5 8 9 |
) (2 3 6 , 8 8 0 ) |
(2 4 4 , 4 9 3 ) |
| Operating profit | 3 1, 17 8 |
(3 7 , 7 7 0 ) |
2 0 4 , 7 7 0 |
13 6 , 7 4 7 |
15 6 , 4 6 2 |
14 8 , 8 4 4 |
16 0 , 8 8 6 |
18 1, 2 7 4 |
| Net adjustments to loans and other operations | (190,125) | (74,284) | (89,737) | (66,105) | (95,925) | (77,972) | (94,029) | (74,310) |
| Net provisions for risk and charges | (24,236) | (10,876) | 4,498 | 289 | 14,638 | (4,972) | 2,364 | (1,272) |
| Profit (loss) from equity and other other investments and adjustments to goodwill and intangible assets |
108,973 | (185) | 30,298 | 1,873 | (19) | (1) | 37,453 | 0 |
| Profit (loss) before tax from continuing |
(7 4 , 2 10 ) |
(12 3 , 115 ) |
14 9 , 8 2 9 |
7 2 , 8 0 4 |
7 5 , 15 6 |
6 5 , 8 9 9 |
10 6 , 6 7 4 |
10 5 , 6 9 2 |
| operations Tax on income from continuing operations |
58,665 | 52,827 | (39,778) | (24,222) | 11,938 | (17,306) | (20,339) | (37,805) |
| Net profit (loss) for the period | (15 , 5 4 5 ) |
(7 0 , 2 8 8 ) |
110 , 0 5 1 |
4 8 , 5 8 2 |
8 7 , 0 9 4 |
4 8 , 5 9 3 |
8 6 , 3 3 5 |
6 7 , 8 8 7 |
| Minority interests | 176 | 246 | (226) | (272) | (239) | (594) | 115 | (284) |
| Net profit | (15 , 3 6 9 ) |
(7 0 , 0 4 2 ) |
10 9 , 8 2 5 |
4 8 , 3 10 |
8 6 , 8 5 5 |
4 7 , 9 9 9 |
8 6 , 4 5 0 |
6 7 , 6 0 3 |
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