Half yearly report 2012 - Gruppo Banca Carige

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BANCA CARIGE RATINGSdate of the last rating short-term long-term BFSR (1) (2) Individual (2) Support (3)Fitch November 2011 (4) F3 BBB - C 3Moody's July 2012 (4) P-3 Baa3 D+ - -Standard & Poor's February 2012 (5) A-3 BBB- - - -(1) Bank Financial Strength Ratings.(2) BFS ratings express the intrinsic strength and solidity of a bank, as well as its financial reliability given the bank's assets. Ratings range from A to E.(3) Support ratings indicate the likelihood of the Government or other public entity, or shareholders, stepping in to support the bank in the event of crisis.Ratings range from 1 to 5.(4) Date relative to the last press release issued by the rating agency.(5) Date relative to the last press release issued by the rating agency.BUSINESS PERFORMANCEDespite the difficult and complex macroeconomicscenario, the Carige Group essentially kept thetrend in equity and income statement results inline with the expectations.Intermediation activities with customers in the firstfew months of the year, in confirming the signs ofa slowdown in growth already recorded in 2011,registered results slightly below the expectations,both in terms of deposits and loans but, in anycase, essentially in line with the results recordedby the banking system.In terms of funding, the Group availed itself ofrefinancing at the European Central Bank, participatingin two extraordinary three-year auctionsin December and February, also taking advantageof the possibility offered to Italian banks ofdiscounting issued bank covered bonds at theECB. As regards the total amount financed of € 7billion, € 2 billion was new funding and the remainderwas used to replace loans with a closermaturity. This allowed a big improvement in theshort-term net financial position and strengthenedthe Group’s structural equilibrium, allowingthe Group to continue with the envisaged creditdevelopment policies.Bond placements with customers also continued:against roughly € 298 million in maturities and €437 million in repurchases, placements stood at€ 974 million at the end of June.As at 30 June 2012, the Group’s Financial IntermediationActivities (FIA) fell by 4% over thesame period in the previous year and 2.9% sincethe start of the year, partly due to the conversionof the “Banca Carige 4.75% 2010-2015 convertiblebond with the option of redemption inshares” (“Banca Carige 4,75% 2010-2015 convertibilecon facoltà di rimborso in azioni") andthe application of the new legislation which requiresthe transfer of the treasury current accountsof Public Authorities to the State Treasury(variation of -2.8% and -1.7% net of said effectsrecorded in the twelve and six-month periods).Loans to customers increased by 3.3% in thetwelve months and were essentially stable fromthe start of the year.Consolidated net profit in the first six monthscame to € 90.2 million, up 20.1% on the figurerecorded in the same period in 2011. In particular,an increase was registered in the interestmargin and net service revenues when comparedto June 2011. Value adjustments increasedon both loans and available-for-sale financialassets, while operating costs were keptunder control.HIGHLIGHTS FOR FIRST HALF-YEAR2012On 14 February, Carige’s Executive Committeeresolved to approve the Group’s adoption of thenew Agreement signed on 31 January 2012 betweenABI (Italian Banking Association) and theconsumer associations for the extension to 31July 2012 of the deadlines for submitting applicationsfor the suspension of mortgage instalments,pursuant to the Agreement of 18 December2009. On 6 March, said Committee resolvedCarige’s adoption of the agreement“New measures for credit for small and mediumsized enterprises” signed on 28 February 2012by the Ministry of Economic Development, Infrastructureand Transport, the Ministry of Economyand Finance, the Italian Banking Associationand other associations representing businesses.10
On 20 February, the Parent Company's Boardof Directors resolved the full early redemption ofthe entire bond loan called "Banca Carige4.75% 2010-2015, convertible with the optionof redemption in shares" (“Banca Carige 4,75%2010-2015 convertibile con facoltà di rimborsoin azioni"), which is represented by more than €163 million in outstanding bonds, with a nominalvalue of € 2.40 each, for a total amount of€ 391.3 million. The early redemption was concludedon 23 March, with € 386.8 million innew shares issued.On 29 February, by taking advantage of thepossibility offered to Italian banks of discountingissued bank covered bonds at the ECB, BancaCarige adhered to a long term refinancing operation(Long-Term Refinancing Operation -LTRO), which involved the acquisition of newmeans of funding, for the total amount of € 0.7billion, at a rate of 1%.On 27 April, the Ordinary Shareholders’ Meetingof the Parent Company appointed the Boardof Directors for the 2012-2014 three-year periodwhich, on 2 May, elected:– the members of the Executive Committee,setting their term of office at 31 December2012, and– the members of the Internal Committees(Control and Risks, Remuneration and Appointments),as well as members of the SupervisoryAuthority established in accordancewith Legislative Decree 231/2001.On 14 May, the Board of Directors – in relationto two programs in place for the issuing of securedbank bonds and in accordance with therespective Framework Transfer Contracts relatingto the two programs in question – inter alia,resolved the transfer, within the current year, ofadditional eligible assets totalling roughly € 1.4billion, in the form of residential and commercialmortgages originated or renegotiated byCarige and its subsidiaries by 31 December2011, to be split between the two programs onthe basis of the Group’s liquidity requirementsand potential market developments.On 21 May, the Board of Directors approvedthe aforementioned Group Restructuring Project,targeted at developing the potential of BancaCarige’s network outside Liguria, which will bethe object of a transfer – effective as of 31 December2012 and open to the public from 1January 2013 – to a bank known as “BancaCarige Italia SpA”, incorporated on 23 May2012, with the simultaneous full payment bysole shareholder Banca Carige of the sharecapital of € 7 million. On 29 May, BancaCarige Italia SpA submitted its request to theBank of Italy for the authorisation to carry outbanking activities.On 28 May, the Boards of Directors of the InsuranceCompanies resolved to hire RobertoLaganà as General Manager, effective as of 1July 2012, replacing the outgoing Managing DirectorDiego Fumagalli.The ratings assigned to the Parent Companywere revised downward as a result of the worseningof the credit rating of the Italian government:on 10 February Standard & Poor’s loweredCarige’s long-term rating from “BBB/A-2“to “BBB- /A-3” (with a negative outlook) and on15 May, Moody’s lowered this from “Baa1” to“Baa2” (with a negative outlook) and then to“Baa3” in July, as shown in the section “Eventsafter the close of the half-year period”.The Carige Group has the following pending taxdisputes:- alleged “abuses of right” in the use of the taxcredit for taxes paid abroad for the years from2004 to 2006 (Banca Carige and Cassa di Risparmiodi Carrara) and for financial transactionswith Italian shares as underlying for the 2005-2006 years (Banca Carige).As regards the dispute involving Banca Carige, itshould be noted that, in respect of the judgmentfiled on 6 February 2012 with which the ProvincialTax Commission of Genoa rejectedCarige’s appeal, which Carige will appeal beforethe Supreme Court, on 14 February and 25May 2012, tax bills, penalties and Ires interestrelating to 2004 were paid totalling € 10.5 million.With reference to the 2005 tax year, Carige filedan appeal and obtained the suspension of therelative tax collection notice; discussions havebeen set for next 3 October. In the meantime,on 22 February the Tax Authorities notifiedCarige of the imposition of penalties which weredisputed before the competent Tax Commission.In relation to the 2006 tax year, Carige submittedtax settlement proposals and, on 21 June2012, filed the associated appeals at the ProvincialTax Commission of Liguria.By contrast, as regards similar transactions carriedout by Cassa di Risparmio di Carrara in theyears 2004 and 2005, appeals were upheld bythe Provincial Tax Commission of Florence forthe year 2004 (ruling filed on 12 December2011) and by the Provincial Tax Commission ofMassa Carrara for the year 2005 (ruling filed on21 February 2012) respectively. Appeals were11
Page 4 and 5: CONSOLIDATED FINANCIAL HIGHLIGHTSBA
Page 6 and 7: INTERIM REPORT ON OPERATIONS6
Page 8 and 9: 7.1%). Industrial turnover recorded
Page 12 and 13: submitted by the Tax Authorities ag
Page 14 and 15: HALF-YEARLY CONDENSED CONSOLIDATED
Page 16 and 17: CONSOLIDATED BALANCE SHEETASSETS (t
Page 18 and 19: STATEMENT OF CONSOLIDATED COMPREHEN
Page 20 and 21: CHANGES IN CONSOLIDATED SHAREHOLDER
Page 22 and 23: EXPLANATORY NOTESACCOUNTING POLICIE
Page 24 and 25: SCOPE OF CONSOLIDATION ANDCONSOLIDA
Page 26 and 27: With regard to the four companies e
Page 28 and 29: TRADING ACTIVITIESAs at June 2012,
Page 30 and 31: DIRECT DEPOSITS (1) - GEOGRAPHICAL
Page 32 and 33: Premiums collected on bankassurance
Page 34 and 35: agreement assets and liabilities) s
Page 36 and 37: TOTAL LOANS TO CUSTOMERS (1) - DIST
Page 38 and 39: BAD LOANS TO CUSTOMERS AS AT 30/06/
Page 40 and 41: 1.2%, marking an increase of 75.5%
Page 42 and 43: CDO PORTFOLIO (1) (thousands of eur
Page 44 and 45: NOTIONAL VALUES OF DERIVATIVE CONTR
Page 46 and 47: ECONOMIC RESULTSThe first six month
Page 48 and 49: The management of financial items p
Page 50 and 51: OPERATING EXPENSES (thousands of eu
Page 52 and 53: INSURANCE BUSINESSThe IAS income of
Page 54 and 55: As at 30 June 2012, asset and liabi
Page 56 and 57: impairment indicators, identifying
Page 58 and 59: Also in each of these more unfavour
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BRANCH NETWORKA) TRADITIONAL CHANNE
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egulatory capital and prudential co
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B. RisksCredit and counterparty ris
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Three sub-categories may be identif
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contribute to a profit from ordinar
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Business geographic areas(% on the
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Customer segments( thousands of eur
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THE PARENT COMPANY AND SUBSIDIARIES
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1. Financial statements as at 30 Ju
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STATEMENT OF COMPREHENSIVE INCOME(t
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The short-term component, accountin
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December. A total of 99.4% of these
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3. Income statement resultsAs at 30
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NET LOSSES/RECOVERIES ON IMPAIRMENT
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4. Relations with related partiesAs
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SUBSIDIARY BANKSIt should be noted
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BANCA DEL MONTE DI LUCCA ( thousand
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BANCA CESARE PONTI ( thousands of e
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CARIGE VITA NUOVA SPA ( thousands o
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CREDITIS SERVIZI FINANZIARI (thousa
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THE OTHER MAIN SUBSIDIARIESColumbus
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GLOSSARY OF TECHNICAL TERMS AND ACR
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• Mezzanine Tranche: the intermed
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Exotics (derivatives)Non-standard d
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Lower Tier IISubordinated liabiliti
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Acquisition, measurement, assessmen
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eceiver that pays the related amoun
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IAS 34IAS 36IAS 37IAS 38Interim Fin
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CERTIFICATION OF THE HALF-YEARLY CO
Page 118 and 119:
INDEPENDENT AUDITOR’S REPORT ON T
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Half yearly report 2012 - Gruppo Banca Carige

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