consolidated annual report - Gruppo Banca Sella

Loan losses (excluding write-ups to loans), stand-
ing at € 43,4 million, increased by 44,2% with respect
to 2003, due to the unfavourable economic situation in
those areas where the Group is more present. On the
other hand, the quality of assets has improved, as is
shown by the ratio of net non-performing loans over
cash loans, which passed from 1,67% in 2003 to 1,39% in
2004, while the ratio between net write-downs to loans
and cash loans stands at 0,8% (0,6% in 2003).
Profit on equity investments carried at equity
increased, passing from € 0,3 million of the previous financial
year to € 0,7 million in 2004, thanks to the good
performance of the insurance company CBA Vita, which
shows a remarkable improvement with respect to 2003.
Amortization of positive goodwill arising on
consolidation, as already said, stood at € 12,1 million
(€ 23 million in 2003).
INCOME TAXES
The decrease of income taxes was due to the fact
that the income tax on companies (IRES) became effective,
involving a reduction of the nominal tax rate from
34% to 33% and the introduction of new regulations,
such as, in particular, the National Regulation of Consolidated
Tax Returns, the exclusion from taxation of
95% of the amount of dividends and the so-called “participation
exemption” (i.e. the exclusion from taxation
of capital gains deriving from the sale of equity investments
entered in financial fixed assets).
Gruppo Banca Sella, from the tax period 2004,
joined the National Regulation of Consolidated Tax
Returns. Such Regulation, involving as controlling and
consolidating company the Parent company Finanziaria
Bansel S.p.A., was joined by all companies under
Italian law of the banking Group (excluding Sella
Capital Markets SIM S.p.A., in liquidation) and also by
CBA Vita S.p.A., controlled company operating in the
insurance business that is not included in the banking
Group. Remarkable benefits for the Group came, from
the tax period 2004, from joining the Regulation, as to
reduction of the total tax load, mainly thanks to the
total exclusion from taxation of infragroup dividends,
to the prompt and total offsetting of tax profits and
losses by the companies joining the Regulation and to
the new calculation of “income pro-rata of non-deductibility
of interest payable”.
Consolidated annual report 2004 - 177