consolidated annual report - Gruppo Banca Sella

- accomplishment of the project for the merge of
Gestnord Intermediazione S.I.M. into Sella In-
vestimenti Banca, which, starting from 1 Janu-
ary 2005, changed its company name into Banca
Patrimoni e Investimenti, specialized in private
banking;
- change of company name of IBL Investment Bank
Luxembourg, which in December deliberated on
the variation to Sella Bank Luxembourg SA and,
at the same time, on an increase in capital of the
company;
3. all Group companies were supplied with a special
telematic procedure to automatically assess line
controls, allowing for the centralized monitoring of
their execution. Moreover, a Group Activities and
Subsidiaries Control Department was set up, in order
to improve policies on subsidiaries’ activities,
in particular as to corporate governance. Also, during
the year a workgroup was set up, which, after
evaluating the main impact deriving from the introduction
of IAS accounting principles (which will
be adopted in the drawing up of the Consolidated
Financial Statements for 2005), started a project
for the planning of interventions needed to make
Group companies compliant with the new international
standards;
4, the articles of association of Group companies were
conformed to the reform of company laws in force
and corporate governance rules included in the
“Gruppo Banca Sella Equity Investments Regulations”
were updated, according to the evolution of
rules and to the transfer of the same into Group
corporate governance regulations. The appointment
of independent Directors in the Boards of Directors
of an increasing number of subsidiaries is also to be
pointed out.
GROWTH IN SIZE
As it was deemed of remarkable importance to continue
to aim at a larger size, both to face the challenge of
the market and to gain higher profits from its structure,
the Group pursued this objective through:
• the development of new customers and of the offer
to existing customers, also by way of an increase of
cross-selling;
• the growth and evolution of the distribution network;
• a strong attention paid to the quality of service and
the improvement of service levels;
• a high business diversification, favouring the development
of areas of business having higher growth rates.
During the year 8 new branches were opened, further
improving geographical diversification; moreover,
the number of customers increased and the range of
products and services was enlarged.
Also in 2004 the careful evaluation of results from
investments made during the previous years went on,
in order to strengthen those able to create higher profits
and to put in place the necessary corrective interventions
for lesser profitable ones. All this, together
with those actions aimed at the recovery of productivity
and costs reduction, was not enough to reduce the
cost to income ratio (calculated as the ratio between
administrative expenses, excluding recovery of stamp
duty and other taxes and write-downs to tangible and
intangible fixed assets, excluding accelerated depreciations,
over net interest and other banking income
excluding other operating expenses), which stands at
72,6% (71,8% in 2003), due to an increase of costs related
to the strengthening of control and compliance
structures, and to due diligence costs relevant to Sella
Bank Luxembourg SA.
RATING
As every year, towards the end of 2004, the usual
meeting with the rating agency took place. The ratings
assigned by Moody’s to the Group were unvaried and
are the following:
Long term A3
Short term Prime –1
Financial strength C
Outlook stable
Consolidated annual report 2004 - 171