PRESS RELEASE

BANCA CARIGE'S BOARD OF DIRECTORS APPROVES

PRELIMINARY CONSOLIDATED RESULTS AS AT

31 DECEMBER 20201

Trend of strong recovery in net operating income consolidates on the back of momentum in sales and real economy support activities

2020 targets achieved in net interest & other banking income and administrative expenses

High asset quality and low risk profile confirmed

Additional improvement in capital ratios

  • REVENUES ACCELERATED IN Q4, WITH NET INTEREST INCOME AND FEE & COMMISSION INCOME CONFIRMING THE GROWTH TREND REGISTERED IN Q3 (+28.1% AND +11.5% ON Q2)

  • NET INTEREST AND OTHER BANKING INCOME UP 31.6% Q/Q, FULLY IN LINE WITH PLAN FORECASTS. ADMINISTRATIVE EXPENSES LIKEWISE ALIGNED

  • AS A CONSEQUENCE OF ~EUR 38 MLN HIGHER LOAN LOSS PROVISIONS AGAINST THE PANDEMIC CRISIS AND OTHER PRUDENTIAL PROVISIONING, THE REPORTING PERIOD CLOSES WITH A NET LOSS OF EUR 185.3 MLN (EUR 161.1 MLN BEFORE TAX), HIGHER THAN PROJECTED IN THE STRATEGIC PLAN (EUR 78.0 MLN)

  • DELIVERY OF P&L TARGETS DEFERRED BY ONE YEAR WITH RESPECT TO STRATEGIC PLAN FORECASTS

  • COST OF CREDIT OF 80 BPS (11-MONTH ANNUALISED) IN LINE WITH BANKING SYSTEM AVERAGE; 46 BPS WITH ANNUALISATION EXCLUDING PROVISIONING AGAINST THE PANDEMIC CRISIS

  • ACCELERATED COMMERCIAL MOMENTUM REVEALS GROWTH RATES ABOVE THE AVERAGE OF ITALY'S BANKING SYSTEM

    • o BRANCH NETWORK FUNDING (EUR 26.9 BN) UP 5.2% (5.1% NET OF

1 Preliminary results as at 31 December 2020 refer to the period from 1 February 2020 to 31 December 2020, coinciding with the Bank's return to ordinary administration

MARKET EFFECT)

  • o 12-MONTH PERFORMANCE IN PLACEMENT OF ASSET MANAGEMENT PRODUCTS (+8.4%) CLOSE TO 5 TIMES THE AVERAGE OF THE BANKING SYSTEM (+1.8%2)

  • o INDIRECT FUNDING +2.8%3 VS. 1.6% FOR THE ITALIAN BANKING SYSTEM4 AND NET LOANS TO CUSTOMERS NET OF REPOS +2.2%3 VS. - 0.5% FOR THE ITALIAN BANKING SYSTEM4

  • o EUR 2.4 BN IN NEW LOANS GRANTED TO 34,000 BUSINESSES FOR THE

    PANDEMIC TO DATE, ROUGHLY 3 TIMES THE GROUP'S THEORETICAL

    MARKET SHARE AT NATIONAL LEVEL AND ACCOUNTING FOR 32% OF TOTAL LOANS GRANTED BY LIGURIA'S BANKING SYSTEM

  • o APPLICATIONS FOR EUR 2.2 BN WORTH OF PAYMENT MORATORIA, OF WHICH EUR 1.7 BN OUTSTANDING AS AT 31 DECEMBER 2020

  • RISK PROFILE DOWN FURTHER TO BEST MARKET LEVELS

    • o NPE RATIO: 5.1% GROSS, 2.5%NET (VS. BANKING SYSTEM AVERAGE4 OF 5.8% AND 2.9% RESPECTIVELY)

    • o NON-PERFORMING LOAN PORTFOLIO: EUR 632 MLN GROSS, EUR 301

      MLN NET

    • o PERFORMING LOAN PORTFOLIO: 80.3% SECURED, INCLUSIVE OF STATE-GUARANTEED LOANS; 88.0% OF THE PORTFOLIO BALANCE IS RATED MEDIUM-HIGH

    • o DISPOSAL OF LEASING EXPOSURES FOR A GBV OF ~EUR 100 MLN CLOSE TO FINALISATION

    • o 52.3% AVERAGE COVERAGE OF LOANS-TO-CUSTOMERS PORTFOLIO (53.8% INCLUDING WRITEOFFs) VS. BANKING SYSTEM AVERAGE OF 51.5%

  • RWAs DECLINING FURTHER TO EUR 9.4 BN

  • CAPITAL RATIOS ON THE RISE, IN EXCESS OF REGULATORY REQUIREMENTS INCLUDING GUIDANCE: PHASED-IN CET1r OF 12.8% AND PHASED-IN TCr OF 15.1% (VS. RESPECTIVELY 12.0% AND 13.9% AS AT 31

    JANUARY 2020)

  • GIUSEPPE BOCCUZZI APPOINTED MEMBER OF THE NOMINATION, GOVERNANCE AND SUSTAINABILITY COMMITTEE, NOW MADE UP OF: LUCIA CALVOSA (CHAIR), GIUSEPPE BOCCUZZI AND SABRINA BRUNO.

Genoa, 23 February 2021- At its meeting today, the Board of Directors of Banca Carige has

approved the Group's consolidated preliminary results as at 31 December 2020, referring to

  • 2 Source: Processing of data from Assogestioni

  • 3 Change for Carige refers to the period from 01/02/2020 to 31/12/2020

  • 4 Peers' average (Intesa, Unicredit, Banco BPM, MPS, BPER, Credem, BP Sondrio, Creval). Processing of data from press releases and presentations published for the period ended 31 December 2020

the 11-month ordinary administration period starting on 1 February 2020, after the end of the 13-month period of Temporary Administration. Against the background of a severe pandemic-induced economic cycle, reverberating negatively on the profit and loss accounts of the entire banking system, the Group closed its preliminary accounts with a net loss of

EUR 185.3 mln (EUR 161.1 mln before tax), higher than the 2020 full-year loss of EUR 78.0

mln projected in the Strategic Plan by the Temporary Administrators in July 2019.

Evidence of accelerated revenue growth solidified in the last quarter of 2020, with net interest income and fee & commission income confirming the growth trend registered in Q3

(respectively +28.1% and +11.5% on Q2). Net interest and other banking income (EUR 378.0

mln), including as a result of net profit from trading and disposal of assets, is in line with the forecasts of the 2019-23 Strategic Plan5, drafted before the pandemic set in (the 11-month-extrapolated forecast for 2020 was EUR 371.2 mln) and was up 31.6% in Q4 over Q3. The structural reduction obtained in costs (CAGR of core operating expenses -7% since 2017) is confirmed by the trend in personnel and other administrative expenses (totalling EUR 416.7

mln in the 11-month period), that fully mirror the Plan forecasts (EUR 417.0 mln on an 11-month-extrapolated basis). The necessary recognition of non-recurring items and exceptional factors, primarily in connection with legacy risks from prior periods and the incorporation of the pandemic scenario, had an impact in terms of ~EUR 40.0 mln higher loan losses (EUR 91.8 mln vs. an 11-month-extrapolated Plan projection of EUR 52.0 mln) and additional prudential provisioning for an aggregate amount of EUR 47.0 mln, not foreseeable in the Plan.

5 Strategic Plan Targets for 2020 were redetermined on an 11-month basis to make them comparable with the 2020 11-month results

In general, the growth in volumes stabilised during the last quarter after the trend reversal in funding and lending observed in the third quarter, which was reflected in higher than market average results in indirect funding (+2.8%6 vs. an average +1.6% for the banking system7),

net loans to customers, excluding repos (+2.2%6 vs. -0.5% for the banking system7) and the consequent increase in net interest income8 (+14.9% vs. -3.4% for the banking system9) and net fee and commission income (+0.4% vs. -3.4% for the banking system10), with operating expenses11 continuing to decrease (-3.7% vs. -2.4% for the banking system10) .

In particular, the Bank has achieved excellent results in State-guaranteed lending, with EUR 2.4 bn worth of loans granted (almost 3 times the Group's lending market share and accounting for 32% of total loans granted by Liguria's banking system) and in the placement of Asset Management products (+8.4% vs +1.8% for the banking system, close to 5 times the competitors' performance).

Banca Carige has faced the pandemic crisis by maintaining an extremely low risk profile including on account of the non-performing loan disposals completed in the 11-month period, with average loan portfolio coverage settling at 52.3% (53.8% including write-offs), and a gross and net NPE ratio down further to 5.1% and 2.5%, respectively; credit risk control is set to improve further thanks to the planned disposal of part of the leasing portfolio, which is close to finalisation. This comes in addition to the upside arising from the new State-

  • 6 Changes for Carige refer to the period from 01/02/2020 to 31/12/2020

  • 7 Peers' average (Intesa, Unicredit, Banco BPM, MPS, BPER, Credem, BP Sondrio, Creval). Processing of data from press releases and presentations published for the period ended 31 December 2020

  • 8 Determined for Carige by annualising the 11 months of 2020 and the 13 months of the Temporary Administration period

  • 9 Peers' average (Intesa, Unicredit, Banco MPS, Credem, BP Sondrio, Creval). Processing of data from press releases and presentations published for the period ended 31 December 2020

10 Peers' average (Intesa, Unicredit, Banco MPS, Credem, BP Sondrio, Creval). Processing of data from press releases and presentations published for the period ended 31 December 2020

11 Determined for Carige by annualising the 11 months of 2020 and the 13 months of the Temporary Administration period

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Banca Carige S.p.A. published this content on 23 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2021 00:51:02 UTC.