reports and accounts - Gruppo Veneto Banca

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reports and accounts - Gruppo Veneto Banca
REPORTS AND ACCOUNTS
2004
2004 CORPORATE OFFICERS
4
MESSAGE FROM THE CHAIRMAN
6
INDEX
8
CALL OF SHAREHOLDERS’ MEETING
10
DIRECTORS’ REPORT ON OPERATIONS
11
PROPOSAL FOR THE REPORTS AND ACCOUNTS
APPROVAL AND PROFIT ALLOCATION
92
CONSOLIDATED FINANCIAL STATEMENT
AS AT 31 DECEMBER 2004
93
STATUTORY AUDITOR’S REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENT
147
INDIPENDENT AUDITOR’S REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENT
151
FINANCIAL STATEMENT AS AT 31 DECEMBER 2004
153
STATUTORY AUDITOR’S REPORT ON THE
FINANCIAL STATEMENT
265
INDIPENDENT AUDITOR’S REPORT ON THE
FINANCIAL STATEMENT
269
MEETING REPORT AND RESOLUTIONS
272
THE COMMERCIAL NETWORK
273
On the cover: detail of Antonio Canova's plaster model “Amore e Psiche stanti”
Veneto Banca Management Centre - Montebelluna, Italy, via Feltrina Sud 250
REPORTS AND ACCOUNTS 2004
3 9 TH F I N A N C I A L Y E A R
ANNUAL GENERAL MEETING 30 APRIL 2005
translation from the italian original which remains the definitive version
Limited liability public cooperative company - Member of the Register of Businesses in Treviso no. 00208740266
Shareholders’ equity as at 31/12/2004 Euro 581.893.070,98 - Member of Fondo Interbancario di Tutela dei Depositi
the group structure 2
LOCATION AND COMMERCIAL
NETWORK
FRIULI VENEZIA GIULIA
7
LOMBARDIA
17
Belluno
Treviso
VENETO
92
Vicenza
Venezia
Verona
Padova
PUGLIA AND BASILICATA
30
LAZIO
1
AN ITALIAN AND INTERNATIONAL GROUP
VENETO BANCA GROUP COMMERCIAL NETWORK
AS AT 31 DECEMBER 2004
Veneto
Other northern Italian regions
Central Italy
South Italy
TOTAL NO. OF ITALIAN BRANCHES
Branches
% of total
92
24
1
30
147
63%
16%
1%
20%
100%
Branches outside Italy:
Romania
Hong Kong(1)
(1) Representation office
6
1
location and commercial network 3
Rovigo
2004 CORPORATE OFFICIERS
BOARD OF DIRECTORS
Chairman
Vice Chairman
Directors
Trinca Flavio*
Antiga Franco*
Biasia Francesco*
Caberlotto Gaetano
De Bortoli Vitale
Filippin Walter
Gallina Alessandro*
Miotto Ireneo
Munari Leone
Nardi Innocente
Perissinotto Gian Quinto*
Vardanega Giuseppe
Virago Graziano
Zago Bruno
Zoppas Gianfranco
2004 corporate officiers 4
BOARD OF STATUTORY AUDITORS
Chairman
Fanti Fanio
Auditors
Stiz Michele
Xausa Diego
Alternate Auditors
Facchinello Remo
Mazzocato Martino
BOARD OF STATUTORY ARBITRATORS
Chairman
Chiaventone Adolfo
Arbitrators
Merlo Pietro Giorgio
Schileo Giuseppe
Alternate arbitrators
Barilà Francesco
Pizzolotto Renato
GENERAL MANAGEMENT
General Manager
Consoli Vincenzo
Vice General Manager
Bressan Armando
Fagiani Mosè
Feltrin Romeo
Gallea Mauro
INDIPENDENT AUDITORS
PricewaterhouseCoopers spa
* Members of Executive Committee
chairman and general manager 5
CHAIRMAN AND GENERAL MANAGER
Chairman of Veneto Banca,
Flavio Trinca
General Manager of Veneto Banca,
Vincenzo Consoli
MESSAGE FROM THE CHAIRMAN
Dear Shareholder,
At its meeting on 29 March, the Board of Directors of Veneto Banca approved the draft of the
financial statements for the financial year 2004.
The year just ended has been a demanding, yet very satisfactory year: demanding as regards the
uncertain economic and financial scenario, on the international and domestic fronts, still
influenced by political and economic tensions that have not made the Company’s operations any
easier; satisfactory because the profits of all the subsidiaries, and therefore Group profits, were in
line with expectations.
message from the chairman 6
During 2004, the Group successfully passed the scheduled inspections by the Banca d’Italia,
affecting Veneto Banca, Banca Meridiana and Banca Italo-Romena. It was also one of the first
Italian banking institutions to obtain quality certification for six of its so-called“sites”relating to the
PattiChiari project, an initiative set up by the Italian Banking Association to promote a more
transparent approach in customer relations.
Two qualified institutions have thus certified the value and transparency of corporate data and the
quality of the Bank’s work, recognising the validity of the adopted model and the possibility of
achieving the aim of autonomy.
These recognitions are the just reward for the Board of Directors, the bank and to you, the
Shareholders, who have always supported our company.
Before analysing the figures on the reports and accounts, I would like to say a few words about the
world of the Banche Popolari Italiane, a group to which this Bank proudly belongs. This category is
now the focus of attention and debate with regard to the entire economic and financial world, as
never before. The Banche Popolari (36 still in operation) represent 23.4% of the Italian banking
market and in less than 10 years have almost doubled the number of branches, going from 4,326
in 1995 to 7,240 in 2004.
This system has represented a real economic and financial benchmark, and its operations have
supported the development of entire regions, breathing life into the network of SMEs and
households. Today, the Banche Popolari are taking on a leading role in credit strategies, becoming
protagonists even in areas which once seemed to be the exclusive domain of national or
international banks. The model has certainly been revalued, recognised and is greatly appreciated.
The above represents a confirmation of the validity of the project undertaken eight years ago, when
we decided to follow the route towards autonomy with great determination. Over a fairly short
space of time, this Bank has managed to carve out a significant space for itself, and is now one of
the leading independent banks in Veneto, close to its companies and its customers.
To compete, the Company has had to grow, focusing on areas rich in economic potential, gradually
creating a “federal” type of structure. Veneto Banca is the Parent Company around which the
subsidiary banks revolve, in turn being deeply rooted in their respective local areas, together with
the “product”or service companies that guarantee a high level of quality and complete the offer.
As is known, the project has required significant investments and the awareness that it would take
time to make it fully operational.
This strategy is now starting to bear fruit, and the 2004 figures show how all the Group companies
have grown significantly, reaching the targets of profitability, solidity and growth more quickly than
expected.
The ideal accounting tool to rely on is therefore the consolidated reports and accounts, which further
describe the activities and results of the Parent Company and the subsidiaries.
Starting with the most obvious figure: net profit has touched Euro 55.4 million, marking an
important growth of 36.2%.
Volumes are also growing significantly, well above the average for the banking system. Total
deposits reached Euro 9.3 billion (up by 14.5%). Direct deposits exceed Euro 5.2 billion, marking a
significant 18.9% rise, confirming the real appreciation shown by the market. Indirect deposits,
while facing the problems created by nervous, fragile and volatile markets, exceed Euro 4.1 billion,
registering an appreciable 9.3% increase.
With regard to the results of Veneto Banca, considered on an individual level, 2004 has been an
outstanding year. Net profit was Euro 45.7 million, with a growth of 13.9%. This is a significant
result as it is entirely attributable to traditional management. The capital gain of approximately Euro
33 million deriving from the completed sale of 80% of the insurance company Claris Vita was
allocated to the reserve for general banking risk, to mark the clear distinction between extraordinary
and ordinary events.
The trend in volumes bears witness to the positive activity in the sales network and the recognition
by the market. Total deposits reached Euro 7.6 billion (up by 13.1%). In detail, direct deposits
exceeded Euro 4 billion, up by 18.3%, marking an increase above the system average. Indirect
deposits were recorded at over Euro 3.5 billion, with an increase of more than 7.6%.
The growth in loans, up by 15.9%, was also significant. They reached Euro 4.1 billion.Veneto Banca
is continuing to provide strong support for the local area, and the production network represented
by SMEs in particular, at a time when the international agreements known as “Basel 2”concerning
banks’ capital requirements are about to be launched, and fears related to credit limitation are
becoming increasingly widespread.
Apart from the abovementioned 80% sale of the insurance company Claris Vita, the following
significant events that marked 2004 deserve a special mention:
- acquisition of the Banca del Garda from the Credem group (although this was formally
completed at the beginning of 2005). The bank has 10 branches operating in the province of
Verona, Padua and Rovigo;
- the meeting resolution that approved the early conversion of the remainder of the existing
convertible bond loans;
- the official inauguration of the new Management Centre along Via Feltrina.
The extremely high turnout at this last event, which was from many standpoints extremely exciting
in terms of its significance, confirmed that this Bank is now a well-established point of reference
for the entire local area.
Thank you for your attention, and on behalf of the Board of Directors please accept my best regards.
I hope to see you at the next Shareholders’ Meeting on 30 April 2005.
Warmest regards.
THE CHAIRMAN
(Dr. Flavio Trinca)
Montebelluna, 29 March 2005
message from the chairman 7
Loans to customers reached Euro 5.2 billion, with a percentage increase of 19.2%, confirming the
intense activities with regard to SMEs and households. The figure is particularly significant in view of
the fact that it accompanies an index of 0.7% in the net non-performing loans/loans ratio, confirming
the quality of the network in which the Group operates and the focus given to monitoring credit risk.
Shareholders’ equity, including subordinated loans, totals no less than Euro 844 million. ROE, at
9.8%, and the cost/income ratio at 61.4% confirm how the Veneto Banca Group operates efficiently
and effectively, although experiencing a constant, demanding growth phase (to date there are 153
branches and almost 1,700 employees).
INDEX
INDEX 8
DIRECTORS’ REPORT ON OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . Page 11
1. Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
13
2. World economic review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
14
2.1 Macroeconomic scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
14
2.2 The local economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
17
2.3 Financial markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
18
2.4 Banking and parabanking market . . . . . . . . . . . . . . . . . . . . . . .
”
19
3. Direction and control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
20
3.1 The three-year plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
20
3.2 Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
20
3.3 The integration process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
23
3.4 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
24
3.5 Extraordinary operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
28
4. Banking activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
29
4.1 The sales structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
29
4.2 Product areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
31
4.3 Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
35
4.4 Advertising and communication . . . . . . . . . . . . . . . . . . . . . . . .
”
35
5. Control and support activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
36
5.1 The internal control system . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
36
5.2 Risk assessment and management . . . . . . . . . . . . . . . . . . . . . .
”
37
5.3 Technological and administrative/organisational services . . .
”
40
5.4 Transparency in banking operations, complaints management,
prevention and security, personal data protection . . . . . . . . . .
”
41
5.5 Bank of Italy inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
43
6. Trend in consolidated operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
43
6.1 Operational development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
43
6.2 Equity and capital adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
52
6.3 Profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
55
7. Report on Parent Company’s operations . . . . . . . . . . . . . . . . . . . . .
”
59
7.1 The operating performance . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
60
7.2 Equity and capital adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
69
7.3 Profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
72
8. Trends in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
76
8.1 Banks and financial companies . . . . . . . . . . . . . . . . . . . . . . . . .
”
77
8.2 Product companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
86
9. Significant events occurring after year end . . . . . . . . . . . . . . . . . .
”
91
10. Business outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
91
PROPOSAL FOR THE REPORTS AND ACCOUNTS APPROVAL
AND PROFIT ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS . . .
”
98
Part a - Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
100
Part b - Balance sheet information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
107
Part c - Information on the consolidated profit and loss account . . .
”
135
Part d - Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
142
ANNEXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
143
STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
147
INDIPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
151
VENETO BANCA FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
153
NOTES TO THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . .
”
158
Part a - Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
158
Part b - Balance sheet information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
165
Part c - Information on the profit and loss account . . . . . . . . . . . . . .
”
201
Part d - Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
209
ANNEXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
211
STATUTORY AUDITORS’ REPORT
ON THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
265
INDIPENDENT AUDITORS’ REPORT
ON THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
”
269
INDEX 9
CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 93
CALL OF SHAREHORDERS’ MEETING
The Shareholders are summoned to participate to the Ordinary Shareholders’
Meeting on first call on Friday 29 April 2005 at 8.00 a.m., and on second call
on the following day
SATURDAY 30 APRIL 2005 at 9.00 a.m.
at the Veneto Banca Management Centre located in Montebelluna, Via
Feltrina Sud no. 250, for the discussion of the following
ordinary sharehorders’ meeting 10
AGENDA
Subject 1°) - Appointment of three Directors, the Board of Statutory Auditors
and their Chairman and the Board of Statutory Arbitrators;
Subject 2°) - Reports of the Board of Directors and the Board of Statutory
Auditors , presentation of the Reports and Accounts as at 31
December 2004 and related resolutions;
Subject 3°) - Calculation of attendance fees to be paid to the Directors for the
financial year 2005;
Subject 4°) - Determination of emoluments for the Statutory Auditors for the
three year period 2005/2007.
Notice published according to art. 21 of the Company By-laws in the Official Gazette no. 67
dated 22 March 2005.
DIRECTORS’ REPORT
O N O P E R AT I O N S
"Montebelluna, Via Mercato vecchio"
Massimiliano Porcelli - Branch of Sernaglia della Battaglia (TV)
INTRODUCTION
The consolidated financial statements for the Veneto Banca Group were drawn
up by the Parent Company in accordance with the accounting standards and
methods set forth in Leg. Decree 87/92. They provide a consolidated statement
of the assets, liabilities and financial results of each company in the Group.
directors’ report on operations 12
The following subsidiaries were consolidated using the integral method: Banca
di Bergamo spa, Banca Italo-Romena spa, Banca Meridiana spa, Claris Factor
spa, Claris Finance srl, Claris Leasing spa and Veneto Ireland Financial Services
Ltd (VIFS). Draft financial statements closing on 31 December 2004, already
approved by the respective Boards, will be submitted to the respective
shareholders’ meetings to be held prior to the Veneto Banca meeting.
In contrast, Claris Assicurazioni srl, Claris Broker spa, Claris Vita spa,
Immobiliare Italo Romena srl, Palladio Finanziaria spa and Sintesi 2000 srl
were valued by the equity method as although they are subsidiaries or the
Parent Company has voting rights over or equal to one fifth, they do not
conduct banking, financial or other activities pertinent to the Group or have a
different accounts structure compared to the Parent Company and therefore
the corresponding numerical comparison would not be suitably representative.
In the Parent Company’s portfolio, apart from the equity investments in
consolidated Companies, there are other equity investments. However, a
significant influence is not held in any of these, considering that the Group’s
stake is less than 20% of the share capital of each Company. These equity
investments have thus been valued at cost.
COMPOSITION OF THE
VENETO BANCA GROUP
As at 31 December 2004 the Veneto Banca Group consisted of the following
Companies:
PARENT COMPANY:
• Veneto Banca scparl
SUBSIDIARIES OF BANKING GROUP:
• Banca di Bergamo spa
• Banca Italo-Romena spa
• Banca Meridiana spa
• Claris Factor spa
• Claris Finance srl
• Claris Leasing spa
• Immobiliare Italo Romena srl
• Veneto Ireland Financial Services Itd (VIFS)
GROUP SUBSIDIARIES:
• Claris Assicurazioni srl
• Claris Broker spa
GROUP AFFILIATES:
• Claris Vita spa
• Palladio Finanziaria spa
• Servizi Internazionali e Strutture Integrate 2000 srl (Sintesi 2000)
1. HIGHLIGHTS
VENETO BANCA GROUP – PERFORMANCE HIGHLIGHTS
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
ECONOMIC VALUES (in Euro thousand)
2003
abs. var.
% var.
169,766
286,159
-164,679
74,129
55,352
152,155
263,147
-152,817
67,629
40,646
17,611
23,012
-11,862
6,500
14,706
11.6%
8.7%
7.8%
9.6%
36.2%
2004
2003
abs. var.
% var.
14,544
9,337
5,234
4,103
1,747
2,356
5,207
6,094
6,644
12,525
8,158
4,403
3,755
1,641
2,114
4,368
5,171
5,758
2,018
1,179
831
348
106
241
839
923
886
16.1%
14.5%
18.9%
9.3%
6.5%
11.4%
19.2%
17.9%
15.4%
662
559
103
18.4%
844
641
203
31.6%
2004
2003
abs. var.
78.8%
78.4%
99.5%
76.5%
75.9%
99.2%
2.3%
2.5%
0.3%
CREDIT QUALITY RATIOS (%)
2004
2003
abs. var.
Net non-performing loans/Loans to customers
Net watch-list/Loans to customers
Net non-performing loans/Shareholders’ equity
0.7%
1.2%
4.5%
0.7%
0.7%
4.7%
0.5%
-0.2%
PROFITABILITY RATIOS (%)
2004
2003
abs. var.
9.8%
2.1%
2.8%
4.7%
0.9%
59.3%
61,4%
8.8%
2.2%
2.9%
5.1%
0.8%
57.8%
61,1%
1.2%
-0.1%
-0.1%
-0.4%
0.1%
1.5%
0,3%
2004
2003
abs. var.
% var.
8,41%
10,76%
7,40%
11,40%
1,01%
-0,64%
13,6%
-5,6%
STRUCTURAL AND PRODUCTIVITY RATIOS
2004
2003
abs. var.
% var.
Average no. of employees (*)
Number of bank branches
(including virtual branch)
Customer loan per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
1,621
1,524
97
6.4%
153
3,213
5,762
8,975
177
147
2,867
5,355
8,222
173
6
346
407
753
4
4.1%
12.1%
7.6%
9.2%
2.2%
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro million)
Gross banking income
Total deposits
Direct deposits
Indirect deposits
of which: managed savings
of which: administered savings
Loans to customers
Performing assets
Total assets
Shareholders’ equity
(net of subordinated loans)
Shareholders’ equity
(including subordinated loans)
STRUCTURAL RATIOS (%)
Direct deposits/Total assets
Loans to customers/Total assets
Loans to customers/Direct deposits
R.O.E.
R.O.A.
Interest margin/Performing assets
Earning margin/Performing assets
Net profit/Performing assets
Interest margin/Earning margin
Cost/Income ratio
EQUITY RATIOS (%)
Tier I
Solvency ratio
* Average no. of employees of banks and wholly consolidated companies at year end.
directors’ report on operations 13
2004
2. WORLD ECONOMIC REVIEW
2.1. MACROECONOMIC SCENARIO
During 2004, expansion of the international economic cycle continued to be
strong, although there was a gradual slowdown after the exceptionally high levels
of last year. This trend was caused by the favourable rates that made a particular
contribution to the strong development of emerging economies, led by Asian
economies, and by the continuing growth in the US.
However, this trend was affected by the prolonged rise in the oil price. During
October this exceeded $50 per barrel on the London market, although a slight
decrease was recorded during the latter part of the year.
Inflationary pressures were limited, on the whole.
During 2004 the Dollar also gradually weakened, against the Euro in particular.
After the recovery in value of the early part of the year, the US currency gradually
continued to lose ground, hitting a low against the European currency towards
the end of the year.
MAJOR EXCHANGE RATES
1.40
145
1.35
140
directors’ report on operations 14
1.30
135
1.25
130
1.20
1.15
Dec 03
Jan 04
Euro / Dollar
Feb 04
Mar 04
Apr 04
May 04
Jun 04
Jul 04
Aug 04
Euro / Yen (scale of right)
2.1.1. USA
Growth remained dynamic in the United States, with GDP up by 4.4% on 2004.
Influences on this result included private consumption, up by 3.8% compared to
3.3% in 2003. During 2004 we also witnessed a gradual increase in employment,
with positive effects in terms of real disposable income, although in recent
months this trend has experienced a slowdown due to the persistently high level
of oil prices and the moderate growth in real salaries.
Positive effects were also seen from the increase in private investments, up by
10% as against last year’s 5.1% increase, and from the increase in public
spending, equivalent to 2 percentage points.
However, the balance of trade deficit continues to grow, amounting to almost
$ 586 billion, as against the previous 518 billion.
In terms of inflation, 2004 saw a 2.8% rise in the cost of living, up on 2003.
With regard to monetary policy, during the year, the Federal Reserve raised the
rate 5 times on federal funds by 0.25 of a point, taking it from 1% to 2.25%, while
still maintaining price stability as a priority target.
Sep 04
Oct 04
Nov 04
125
Dec 04
Source: Bloomberg
2.1.2. EUROLAND
During 2004, Euroland registered a recovery after the modest growth of last year,
with GDP up by 1.8%.
Looking at the trend in the main European economies, an acceleration can be
found in Germany. After the slight drop last year, it returned to positive growth
of 1.2%. Improvements were also seen in France, with an increase in GDP of
0.6% in 2003 to a 2.1% increase in 2004, and to a lesser extent for Italy, up by 1%,
against the 0.3% of last year.
2004 saw a recovery in both private consumption, up to 1.8% from last year’s
1.2%, and fixed investments. The latter in particular, after the dip of 0.5% of 2003,
were once again on the increase at a rate equal to 2.2%.
Greater dynamism was also seen in foreign trade, with a sustained increase of
exports, up by 6.6%, and imports, up by 6.2%.
In terms of consumer price trends, inflation was recorded at 2.1%, in line with the
2003 figure. However, unlike last year, the discrepancies between the various
member countries were reduced.
In terms of monetary policy, the Central European Bank maintained a cautious
approach, as the result of a more modest, slower cyclical recovery stage compared
to other economies. It left the key refinancing rate unchanged at 2% for all of
2004, thus reducing the differential between the discount rates in Euroland and
the USA from 100 to –25 basis points.
EUROLAND INTEREST RATES
2.25
4.5
2.2
4.3
2.15
4.1
2.1
2.05
3.9
2
3.7
1.95
1.9
Dec 03
Jan 04
6 Months Euribor
Feb 04
Mar 04
Apr 04
10 years swap rates
May 04
Jun 04
Jul 04
Aug 04
Sept 04
Oct 04
Nov 04
3.5
Dec 04
Source: Bloomberg
2.1.3. ITALY
As already mentioned, Italian GDP grew by 1%. However, this result is still lower
than that obtained by the main European countries.
The standstill in private consumption and the reduction in investments had a
negative impact on the trend in domestic demand. In particular, reduced
spending power following a more marked inflation rate compared to the
European average, and a general collapse of confidence, weighed heavily on
household expenditure. This last aspect is also related to inflation that is
perceived to be higher than official estimates.
However, fixed investments returned to positive growth levels, after the decrease
recorded during 2003.
In line with Euroland, 2004 saw, although to a lesser degree, a recovery in foreign
trade with increases in both exports and imports. Again, during the past financial
year, an improvement in the balance of payments was seen, compared to 2003.
directors’ report on operations 15
4.7
2.3
The rate of inflation, equal to 2.3%, although down on 2003, is at higher levels
than the European average.
In terms of the labour market, the decrease in the unemployment rate continues,
now at approximately 8.1%. This level is slightly lower than the prevailing value
in Euroland countries. On the whole, the employment demand remained stable,
despite the stagnation in economic activity in past years, with an annual average
growth in those in work of just under 1%.
HARMONIZED CONSUMER PRICE INDEX
GDP AT CONSTANT PRICES
3.5
5
3
4
2.5
3
2
2
1.5
1
1
0
1999
directors’ report on operations 16
Euroland
2000
2001
USA
Italy
2002
2003
2004
Source: ISTAT - BCE
1999
2000
Euroland
2.1.4. ROMANIA
The growth trend in the Romanian economy remained solid, and its GDP
increased by 8.1% during the first nine months of 2004. The greatest contribution
to this increase can be ascribed to the rise in household consumption, particularly
linked to the increase in real income and the greater ease of access to medium
and long term loans.
Public spending, influenced by the cost of preparations for local elections, also
recorded an increase compared to 2003.
Industrial production grew, led by the growth in intermediate products destined
to meet a growing demand, both internally and externally. This trend was also
accompanied by an improvement in labour productivity and by a reduction in the
rate of unemployment.
In addition, the inflation rate continued to fall, as it has been doing for several
years. The short term interest rate was also down, following the expansion
initiatives of the Central Romanian Bank, falling below 18%.
In terms of exchange rates, 2004 saw a strengthening of the ROL both against the
Dollar and the Euro, with variations of –10.8% and –3.5% respectively.
USA
2001
Italy
2002
2003
2004
Source: ISTAT - BCE
2.2 THE LOCAL ECONOMY
2.2.1. VENETO
Signs of recovery were also seen for the Veneto economy, after a less than brilliant
2003.
In terms of commercial trade, the improvement for Veneto’s manufacturing
industries continued, with a 4.6% increase in exports. The most noticeable
changes were found in the electric and electronic machinery, printed paper and
publishing industries.
Still on this front, the most active provinces were Padua,Vicenza and Belluno. The
situation was more static, however, in Verona, Venice and Treviso, while Rovigo
experienced problems.
The number of companies registered with Chambers of Commerce is still
positive, with a regional increase of 1.13%. In particular, there is a favourable
trend for all provinces, particularly in Verona, up by 1.99% and Venice, up by
1.28%.
TOTAL REGISTERED BUSINESSES (no.)
2004
2003
Change %
Belluno
Padua
Rovigo
Treviso
Venice
Verona
Vicenza
17,357
104,144
29,056
93,071
81,038
97,547
84,378
17,223
103,468
28,731
92,100
80,016
95,640
83,762
0.78%
0.65%
1.13%
1.05%
1.28%
1.99%
0.74%
Total Veneto
506,591
500,940
1.13%
Source: InfoCamere
2.2.2. PUGLIA AND BASILICATA
Conflicting signs are also emerging from the economy of Puglia and Basilicata.
After a negative 2003, 2004 recorded a significant recovery in exports for Puglia,
while foreign trade was still static in Basilicata.
In both regions, there was a recovery in fixed investments, both in construction
and in plant and machinery.
In line with the national trend, 2004 confirmed consumption as being generally
static, with disposable household income experiencing modest growth in
Basilicata, and remaining almost unchanged in Puglia.
An uncertain situation was also found in the labour market. In view of an overall
directors’ report on operations 17
Industrial production for 2004, after last year’s decrease, was up once again with
an increase of 1.4%. However, the recovery in sales was more marked, up by
4.3%.
At industry level, the best performances were seen in the food and beverage
industry, machine tools and metal production. Although still weak, the textile and
clothing industry also recovered, while the paper, printing and publishing and
wood industries experienced problems.
In terms of size, the larger companies with more than 250 employees recorded
the most growth in terms of sales, while medium sized companies took the lead
in terms of production. Greater difficulties, however, were experienced by smaller
companies.
At a provincial level, Padua and Belluno were the most dynamic areas, both in
terms of sales and production. Positive changes, but to a lesser extent, were found
in the provinces of Verona and Vicenza, while Treviso and especially Venice
experienced more problems.
employment rate that was slightly up on 2003, and a reduction in the
unemployment rate in Basilicata, this indicator actually increased in Puglia.
directors’ report on operations 18
2.2.3. Province of Bergamo
From the enquiry conducted by Unioncamere, Confindustria and the Region of
Lombardy, it emerges that despite a regional situation showing weak recovery,
industrial production in the Province of Bergamo during 2004 displayed a slightly
negative result. Overall, this indicator fell by 0.3%, although at the same time
there were large differences between industries. The difficult period for the textile
and clothing industry is continuing, which still has a significant impact on the
province’s industry, while the mechanics sector appears to be decidedly on the
way to recovery.
Going against the regional trend, sales on the internal market also fell, while
there was a positive increase in foreign demand, although less noticeable than
the average for Lombardy.
However, turning our attention towards more prospective factors, such as orders
placed with companies from both domestic and external markets, the economic
scenario looks stronger.
In terms of prices, 2004 witnessed an increase in the price of raw materials,
especially in the metalworking, transport, rubber, plastic and mechanics
industries, that has not, at least for the moment, transferred to the value of
finished products, which increased moderately.
Finally, the problems within the labour market remain, with a drop in
employment levels, associated with an overall reduction in turnover, with both
entry and exit rates falling.
2.3. FINANCIAL MARKETS
During 2004 the positive trends begun in the world’s main financial markets last
year continued, although on the whole they were less intensive.
In particular, the S&P 500 rose by 9%, Nasdaq 100 by 10.44% and the Nikkey
index on the Japanese stock exchange rose by 7.6%.
In Europe, on the other hand, the Dax index on the German stock exchange rose
by 7.3% and the DJ Euro Stoxx 50 index, incorporating Europe’s main stock, by
6.9%. The financial markets registering the greatest rise included the Milan stock
exchange, with the Mib30 index up by 16.86%.
TREND IN MAJOR STOCK MARKETS (30 DECEMBER 2003 = 100)
120
115
110
105
100
95
90
Dec 03
Jan 04
Mib 30
Feb 04
Mar 04
S&P 500
Apr 04
May 04
Nikkey 225
Jun 04
Jul 04
DJ Euro Stoxx 50
The bond markets, however, were characterised by a sustained demand and a
general reduction in the risk premium, with a marked reduction in spreads.
Aug 04
Sep 04
Oct 04
Nov 04
Dec 04
Source: Bloomberg
2.4. BANKING AND PARABANKING MARKET
2.4.1. BANKING ACTIVITIES
In terms of funding activity, 2004 ended with a growth in direct deposits of 7.16%
compared to the 6.28% increase for 2003, corresponding to a total increase in
stock equal to Euro 67.7 billion. Within the aggregate, there was a significant
increase in bonds, up by 10.09% compared with 8.65% in 2003, while customer
deposits were up by 5.43%, against 4.94% for last year.
With regard to the various technical forms, a slowdown in the deposits on current
accounts can be seen. The trend in REPOS experienced a further reduction, as for
the subscription of CDs over both the short, and medium to long term. Foreign
loans rose.
During 2004 the level of non-performing loans, net of write-downs, registered a
slight increase. In November it achieved a total value of Euro 22,236 million with
a net increase of Euro 794 million, equal to +3.7% compared to the same period
of 2003. The ratio of net non-performing loans/total loans registered at 2.01%, in
line with the 2003 figure.
The loans/deposits ratio, finally, was maintained at approximately 108%.
Again in December 2004, there was a slight increase in the banks’ securities
portfolio, registering a change of +4%, with a value of Euro 5.7 billion.
2.4.2. LEASING AND FACTORING
During 2003 the leasing market recorded a fall of 15.04%, following the reduced
investments in durable goods made during the year as a result of tax incentives
in 2002 that had led businesses to anticipate expenditure.
However, 2004 saw a good recovery in investments. According to the findings of
the professional association ASSILEA, there was an 18.6% increase for a total
volume of Euro 38,082 million. Increases by individual sector were as follows:
industrial vehicles +13.2%, capital goods +17.3%, real estate +19.3%.
In the factoring market, after a 2003 that was largely stable in terms of credits
assumed, 2004 recorded a more sustained increase equivalent to around 8
percentage points.
In terms of breakdown of loans by business sector, there was a gradual increase
in sales involving public authorities as the counterparty, reaching approximately
12% of the total.
directors’ report on operations 19
Total loans by Italian banks rose by Euro 57.5 billion during the past financial
year, corresponding to 6.03%, in line with the 2003 figure. Looking at the
breakdown, the clear prevalence of loans in Euros emerges, representing 98.3%
of the total.
In addition, the difficult trend in the short and medium-long term elements
remains, with a further reduction in the short term loans sector, down by 3.73%
after the fall of 1.75% recorded during 2003. Leading the growth in loans were
medium to long term loans, up by 13.62%.
The growth in consumer credit remains high, with a rate of growth at the end of
2004 of 15.4%, in line with the relative figure for 2003, together with the sector of
residential loans, up by nearly 20%.
3. DIRECTION AND CONTROL
3.1. THE THREE-YEAR PLAN
The Strategic Plan for the three-year period 2004-2006, approved in February
2004, defined the profitability, efficiency and value creation targets to be achieved
for the period.
The Plan reconfirmed the need to develop ordinary activities, focusing on growth
along internal lines and making the most of synergies with the acquired
companies.
The Group, focusing on its network of branches as the hub of its distribution
model, will see a clear reinforcement of its presence in the provinces where it has
most recently opened, through the Parent Company and also via subsidiary
banks.
directors’ report on operations 20
As far as customers are concerned, the decision has been made to nurture and
develop relations with traditionally served areas, increasing supervision and the
focus on the changing needs and requirements of private customers (medium to
high income) and of small businesses.
Along with the increase in size of the network, far-reaching changes have been
planned for the distribution model. Having identified the best organisational
solutions to ensure optimal supervision of segments with high added value, the
focus was on maximising the business time available to be dedicated to customer
management and to improving prompt responses in this regard, also by
streamlining branch operations.
3.2. PROJECTS
During the financial year, many initiatives aimed at putting the plans into practice
were set up, on the basis of a well-defined operational plan that gave rise to a
number of projects.
The following sections describe the main lines of intervention.
3.2.1 DEVELOPMENT OF THE SALES NETWORK
A three-year branch opening plan has been drawn up with regard to the Group’s
development programmes. This is based, apart from on the potential found in
each local area, on certain strategic guidelines that, revolving around a close-knit
system of bases in the province of Treviso, and a wider spread over the remaining
areas, involve:
- for the Parent Company, an important entry into Verona and the surrounding
province, a significant strengthening of its presence in Padua, consolidation of
coverage in the area around Vicenza, and the creation of a link between
Pordenone and Udine;
- for the Banca di Bergamo, consolidation of its presence in the same province;
- for the Banca Meridiana, strengthening of its presence in the regions where it
currently operates;
- for the Banca Italo-Romena, diffusion of its presence in those areas of Romania
with the highest potential.
During the financial year, all the internal operational processes designed to
accurately implement the opening programme referred to above were put in
place.
3.2.2. REVIEW OF CUSTOMER SEGMENTATION
The new strategic directions outlined in the three-year industrial plan mainly
focus on significantly increasing sales efficiency and improving organisational
efficiency.
With regard to this last aspect, the entire customer base has been divided into
segments in order to classify the various profiles of needs and services in a
uniform way. The various segments were then matched to dedicated managers
with a relevant professional profile. However, it should be pointed out that the
organisational model involves maintaining the branch manager as a key figure
for all segments; in other words the customers were not divided, but only
classified into segments.
A process of identifying the skills possessed by all personnel in the Parent
Company was then set up, with the aim of identifying specific training
requirements.
The training programme is underway and will ensure that this need is met. The
result will be a significant step forward in terms of the quality offered in customer
services, ensuring valid support for the achievement of planned overall
objectives. Once this new model has been fully implemented, it will be applied to
all banks in the Group accordingly.
3.2.3. OPTIMISATION OF THE NETWORK AND DEDICATED
DISTRIBUTION MODELS
Before outlining the new model described above, a procedure for analysing the
Parent Company’s branches was developed within the Company. This was aimed
at ensuring correct identification and constant monitoring of staff requirements
and operational roles throughout the entire sales network.
During this analysis, it was possible to identify the operational areas marked by
recoveries in efficiency. Each of these areas was analysed, and specific
planning, organisational and IT initiatives were outlined, that could lead to a
significant reduction in human resources to be allocated to customer contact
and relations.
Certain initiatives have already been developed, involving:
- a new procedure to support the insurance sector, enabling automated policy
management and the display of the customer’s status;
- a new automatic system that enables decentralised management of conditions,
by giving increased authority on prices to network structures, ensuring a more
timely response to the customer and a higher quality service.
The other initiatives are in progress and involve:
- the updated, punctual valuation of each security deposited by the customer at
the Group’s banks. This will enable the overall position of each securities
deposit to be obtained in real time at every branch in the network;
- a new organisational set-up for the customer mortgage loans service. The new
model will favour the prompt allocation of the financing requested, developing
new IT support to simplify the whole process and decentralising certain
obligations to peripheral structures, giving them increased loan facilities.
directors’ report on operations 21
A new organisational and sales model for the entire sales network has been
outlined to interpret these new directions. It is aimed at improving operational
performance for the entire Group. In this sense, new roles and new
organisational systems have been identified to emphasise active management of
customer relations.
directors’ report on operations 22
3.2.4. BASEL II AND MANAGEMENT OF MARKET, CREDIT AND
OPERATIONAL RISKS
The regulatory agreement known as “Basel II” establishes a more direct link
between the risks a bank assumes vis-à-vis the creditor counterparties and the
regulatory capital to be held, determined on the basis of various inputs such as
the other party’s rating, the loss rate in the event of insolvency and the exposure
to be expected in this case. A special feature of the New Agreement is the
possibility for the credit intermediaries to choose between a standardised
(simplified) approach and an internal rating based approach, split into basic and
advanced modes.
This last mode, towards which the Veneto Banca Group is directed, involves using
internally estimated data for loss rates in the event of insolvency (Loss Given
Default) and for exposure at default. The related estimating procedures must be
validated by the Supervisory Authority and must therefore respond to precise
requirements in terms of quality and quantity.
The legislation in question is particularly interesting, not only in terms of
procedure and assessment, but also in relation to the organisational components
it affects. It is fundamentally important that the new assessment and
management procedures are an integral part of the processes of assignment,
monitoring of exposure and pricing definition.
Towards the end of the financial year the Parent Company set up a new planning
work group with the aim of improving the Group’s market, credit and operational
risk management and to bring all the subsidiaries into line with the requirements
of Basel 2.
Currently, the requirements of Veneto Banca are being dealt with, and operations
will then be extended to all the subsidiaries. This project, which is obviously farreaching and liable to changes, both in terms of legislation and operational
effects which are continually being updated, is aimed at bringing the Group fully
into line with the planned requirements.
3.2.5. INTRODUCTION OF THE INTERNATIONAL
ACCOUNTING PRINCIPLES (IAS)
In a wider context, aimed at improving information to the financial markets and
harmonising the criteria for drafting financial statements at EC level, the
European Commission, through the ongoing standardisation process, has
implemented the International Accounting Principles (IAS/IFRS 1 ) issued by the
IASB as at 31 December 2004, although with certain limitations.
Following implementation of the EC Directive no. 1606/2002, Italy took
advantage of the planned option to extend application of the IAS/IFRS to the
consolidated financial statements of Italian banks pursuant to art. 1 of the
legislative decree 385/1993, starting from the financial year commencing on 1
January 2005.
From 1 January 2006, banks and financial brokers subject to supervision by the
Banca d’ Italia will therefore have to draft their financial statements for the year
in line with the IAS/IFRS.
To deal with and manage the process of transition to the new accounting
principles suitably, the Parent Company has formed an internal multidisciplinary
working group, aimed at studying and evaluating the consequences.
Adaptations to the company’s IT system, in collaboration with SEC Servizi, are
also being implemented.
1 IAS:
International Accounting Standards
IFRS: International Financial Reporting
Standards
The actions taken will enable this important change to be handled suitably and
will ensure the Bank correctly implements the new legal provisions.
3.3. THE INTEGRATION PROCESS
The following issues related to intra-Group integration are also linked to
implementation of the three-year industrial plan.
The Group’s organisational model rests on the centralising from the Group’s
banks towards the Parent Company of most of the operations that can be defined
as not directly customer-related, while all commercial relations management is
left to the subsidiaries.
The activity of operational integration for the Group’s banks also continued. This
was conducted via the specific mapping and comparison between organisational
models in the individual sectors of the subsidiaries with similar models outlined
at the Parent Company. The aim is to bring the various banks and companies fully
and coherently into line.
To this end, new regulations are being drawn up for the integrated management
of regulations within the Group, and specific internal regulations in line with the
new corporate set-ups are about to be introduced.
Particular attention has also been given to the internal organisational set-up of
the subsidiary Banca Italo-Romena, and its integration with the Parent Company.
The aim of this initiative is to define, activate and put into operation an overall
governance model, in line with the Group’s systems, the foreign bank network,
the business environment, the size of the Bank and the planned volume and
economic targets.
directors’ report on operations 23
To continue with implementing this organisational set-up in 2004, steps were
taken to extend the new model for the control of “administrative expenses”,
already in operation since 2003 with the Parent Company, via the support of the
Gesprov procedure, now in operation in the other banks.
The roles and processes for the new model have thus been outlined as a result of
the increased complexity of the Group.
The extension of this new model was also accompanied by a specific definition of
cost categories and related facilities that will, in the future, enable full surveillance
by the Parent Company and a more effective management control of monthly
final balances compared to the defined budgets.
3.4 PERSONNEL
3.4.1. STAFF STRUCTURE
One of the basic values of the Veneto Banca Group’s development, highlighted by
the strategic plan, comes from its people, who are considered to be one of the
most important elements to ensure the quality of results and who take an active
part in corporate life.
directors’ report on operations 24
The overall staff of the Veneto Banca Group as at 31 December 2004 totalled 1,671
employees, with a net increase of 72 staff on an annual basis.
Bank/Company
2004
% for '04
2003
% for '03
abs. var.
Veneto Banca
Banca Meridiana
Banca di Bergamo
Banca Italo-Romena
Italy
Romania
Tot. banks consolidated by
the integral method
Claris Factor
Claris Leasing
VIFS
Tot. subs. consolidated by
the integral method
Claris Assicurazioni
Claris Broker
Tot. subs. consolidated by
the equity method
1,169
251
103
110
6
104
70.0%
15.0%
6.2%
6.6%
0.4%
6.2%
1,105
283
85
87
7
80
69.1%
17.7%
5.3%
5.4%
0.4%
5.0%
64
-32
18
23
-1
24
1,633
7
13
4
97.7%
0.4%
0.8%
0.2%
1,560
8
12
5
97.6%
0.5%
0.8%
0.3%
73
-1
1
-1
24
9
5
1.4%
0.5%
0.3%
25
9
5
1.6%
0.6%
0.3%
-1
0
0
14
0.8%
14
0.9%
0
Group total
1,671
100%
1,599
100%
72
With regard to the Parent Company, recruitment activities were particularly
intense during the year. Almost 5,000 job applications were received and
examined, confirming the fact that the “local bank” continues to be particularly
attractive for young people with a medium to high level of education. More than
1,000 preliminary and secondary interviews were held, leading to the
employment of 94 staff, both in first time employment or coming from other
professional backgrounds.
Turnover remained within limited values.
The distribution of the workforce between central management and the
distribution network shows, on the whole, a slight increase in the weight of the
central structure, going from 34.3% to 35.9%.
Bank/Company
2004
Head Network
Office Staff
Staff
%
2003
Head Network
Office Staff
Staff
%
Veneto Banca
Banca Meridiana
Banca di Bergamo
Banca Italo-Romena
Claris Factor
Claris Leasing
VIFS
Claris Assicurazioni
Claris Broker
456
47
25
34
7
13
4
9
5
713
204
78
76
0
0
0
0
0
39.0%
18.7%
24.3%
30.9%
100.0%
100.0%
100.0%
100.0%
100.0%
423
39
20
28
8
12
5
9
5
682
244
65
59
0
0
0
0
0
38.3%
13.8%
23.5%
32.2%
100.0%
100.0%
100.0%
100.0%
100.0%
Group total
600
1,071
35.9%
549
1,050
34.3%
The increased number of staff employed in central management offices was
justified by the need to deal with the growing complexity and requirements of
controlling the Group. The increase found in the Parent Company was caused by
services carried out on behalf of the other Companies, which by contrast have a
more streamlined structure and are highly oriented towards sales activity.
In terms of breakdown, at year end the Group’s workforce numbered 38
executives, 490 managers and 1,143 office staff and general assistants, distributed
as follows:
Executives
CATEGORY
Managers Office staff Gen. assistants
Veneto Banca (*)
Banca Meridiana
Banca di Bergamo
Banca Italo-Romena
Claris Factor
Claris Leasing
VIFS
Claris Assicurazioni
Claris Broker
31
1
3
1
1
1
0
0
0
367
64
39
11
3
4
2
0
0
767
185
60
95
3
8
2
9
5
4
1
1
3
0
0
0
0
0
Group total
38
490
1,134
9
3.4.2. TRAINING
During 2004 the Veneto Banca Group confirmed its major focus on training,
considered to be an essential, fundamental tool for the professional development
of staff, for the implementation of organisational changes and to provide a
constant guarantee of quality in customer service.
Training activities are also an essential tool for the adaptation of individual skills,
the best way to develop a Group culture, and for the progressive, rapid
integration of the more recently acquired banks and companies.
The offer of courses in the “electronic catalogue” was thus extended, along the
guidelines followed in previous years. This catalogue has now become essential
for heads of departments and their workers, pursuing a growing correlation
between the skills possessed and the expertise required by their roles.
In 2004, an important structural change was made to the catalogue, allowing each
employee to have his or her own Annual Personal Training Plan, including dates,
during the first few months of the year. This certainly aided organisation of both
training and work activities, and thus enabled benefits to be obtained more
readily from training.
A further increase in training activities was recorded, totalling 6,608 days,
involving almost all employees.
Bank/Company
Training days
Veneto Banca
Banca Meridiana
Banca di Bergamo
Banca Italo-Romena
Claris Factor
Claris Leasing
VIFS
Claris Assicurazioni
Claris Broker
5,451
496
356
157
4
30
78
15
21
Group total
6,608
In particular, the Parent Company benefited from 5,451 training days in total,
amounting to 4.6 days per capita, on average, up by 0.2% compared to last year.
(*) The figure includes detached employees at
other Group companies
As regards the Banca di Bergamo, apart from the participation in courses held at
the Veneto Banca offices, specific training initiatives were organised on site,
allowing employees to benefit more readily from these activities. On average 3.5
directors’ report on operations 25
Bank/Company
training days per person were held.
For the Banca Meridiana, certain important training initiatives were held, in line
with the plans for the Group. Training activity resulted in 2 training days per
capita, on average.
directors’ report on operations 26
A specific training programme was also outlined for the Banca Italo-Romena,
aligned with the changing markets and the organisational developments in
progress. The activities resulted in 157 days, involving both management and
operational staff in the central structures and the Romanian and Italian sales
network.
Apart from the necessary training in technical and professional, management and
executive areas, “project” training initiatives were implemented. Some of these
include:
• PattiChiari
This project represented the natural development of the Group’s mission, in
other words the attainment of excellence in customer service.
The quality certification obtained for the Cantieri Risparmio e Servizi (Savings
and Services Work Groups) in September 2004 marked the end of an intensive
training programme, held between January and June, with a combination of
distance and application classroom training. For the Parent Company in
particular, this involved:
- 675 colleagues for distance training of the Savings work group;
- 362 colleagues for application training of the same Savings work group;
- 678 colleagues for the distance training of the Services work group;
- 266 colleagues for the application training of the same Services work group;
giving a total of 439 classroom training days.
Distance training on the other hand was carried out over 474 days.
The subsidiaries of the Banca di Bergamo and Banca Meridiana were also
directly involved in this project.
It involved taking part in a project that was very demanding for the bank, at a
commercial and central level. It responded immediately with significant
results, acknowledged by the certifiers, who highlighted strengths as being a
high degree of involvement and ability on the part of the staff, and a clear
orientation towards the principles of disclosure, comprehensibility and
comparability that lie behind the “PattiChiari”processes.
• Training project for the staff of “Organisational Systems”
Achievement of the efficiency and effectiveness targets indicated in the
Strategic Plan and the new organisational set-up stimulated an early,
suitable development of the professional role carried out by the
Organisational Systems department.
To this end a structured training schedule was organised, with the aim of
giving the department a more centralised role, to optimise corporate
functioning, focusing its activities on greater planning content and strategic
value.
This schedule was developed during the first few months of the year, with the
aim of better qualifying the staff of the Organisational Systems department,
dealing with issues such as: organisational development, process analysis and
improvement, dimensioning techniques, project management and others. This
was a high level training schedule that backed up the classroom sessions with
practical trials and procedural and content-related checks on the analyses
carried out.
During 2004 training activities were also important for our in-house trainers, who
have an increasingly valuable role in Veneto Banca, and in the processes of
integration with the other Group companies. The aim was to improve their
communication and classroom management skills, and therefore the level of
training initiatives they provide.
3.4.3. PROFESSIONAL DEVELOPMENT AND VOCATIONAL
TRAINING
2004 involved Human Resources in various projects related to personnel
development.
One of the highlights of these is certainly the introduction of the “skills system”.
This management approach, characterised by the focus on the professional and
managerial culture of operators on the sales network, providing a more in-depth
knowledge of people, enables the improvement of the effectiveness and
efficiency of management tools (training, professional development, career plans
etc.) in order to create relative uniformity in terms of professionalism and
managerial skills.
The survey of professional skills for workers in the Parent Company’s Network
and the Banca di Bergamo was completed during 2004, and the survey for the
Banca Meridiana was prepared in order to make available all the information on
the professional skills of Group personnel.
This was followed by an analysis and project for developing staff potential. The
directors’ report on operations 27
• Segmentation/portfolio creation and active customer management
Implementing the directives of the industrial three-year plan, the new
“distribution model” was adopted. During 2004 this included the creation of
portfolios and the segmentation of Veneto Banca’s customers. This procedure
was then made available to the other Group companies.
The primary objectives have been recognised as increasing the orientation
towards sales efficiency and service quality, by optimising work processes
between the centre and the periphery, and the specialisation of customer
advisory services.
The project’s complexity and strategic value required maximum involvement
by all areas of the company, by the network and management, and the
coherent reorientation of the structure and processes aimed at the new
distribution model.
It was therefore essential to provide the best information possible throughout
the organisation and to implement specific training initiatives aimed at
acquiring skills and achieving the behaviour required by the new model, via a
communications plan and a training schedule.
The communications activity was set up via a series of evening meetings and
mini-conventions with the entire sales network and the Heads of
Management Departments, with the aims of illustrating and discussing the
project for segmentation and portfolio creation, understanding the impact of a
system-based vision of personalised customer management for all staff and
departments involved in adapting the communications procedures between
Management departments and the Network.
This was followed by the training activity directed at Area Managers and
related staff, as the first step towards investigating and learning about the
ways of implementing the project, as well as to define the responsibilities for
its implementation in the branch structure, thus ensuring supervision during
the implementation stage.
initiative, set up in 2003, is aimed at facilitating the growth and development of
professional skills for the coverage of key corporate positions, with a view to
managing staff with potential for promotion.
A number of employees from the various Group companies took part in the
analysis and development sessions and were promoted to roles of responsibility
within their companies and other Group companies. In particular, with reference
to the Parent Company, 15 new branch managers were appointed during the
year, chosen from among internal staff.
Finally, with regard to the Banca Italo-Romena, a performance assessment
system was drawn up, in line with the tools already used by the Parent Company
and the other subsidiaries.
directors’ report on operations 28
Along with the “incentives system”, already in place for the sales network, the
new MBO (Management by Objectives) system was introduced, involving the direct
or indirect assignment of corporate, departmental and individual targets to the
majority of Central Management staff. The implementation of an incentives
system, aimed at promoting the results pursued in terms of quantity, quality and
profitability, also involved from an economic point of view, professional figures
working at various levels in the Central Management departments and staff
covering positions of responsibility in managing workers or projects.
3.4.4. EMPLOYMENT POLICIES
A careful survey was made of non-salary payments used at the various Group
companies in order to provide a single, uniform base to be adopted during 2005.
With regard to the Banca Meridiana, after complex trade union negotiations, an
agreement was reached to reduce the workforce, mainly relying on the
“Redundancy Fund” in order to reduce the economic and social impact on
employees and to lay the foundations for re-launching the company.
3.5. EXTRAORDINARY OPERATIONS
During 2004, control of the insurance company Claris Vita was transferred to the
large Austrian group Uniqa Versicherungen AG. On 30 June, an agreement was
signed between the parties for the sale of 80% of Claris Vita’s capital. The
contract, after the required authorisations from the Supervisory Authority had
been obtained, was completed on 16 December.
The sale was motivated mainly by the changes caused by the legislation issued by
the Basel Committee on Banking Supervision (known as Basel 2) that will lead to
a considerable increase in weight of the asset requirements for investments in the
insurance sector.
With this transaction, that also involved setting up an important collaboration
with the Austrian company Uniqa, the Veneto Banca Group can offer its
customers a more extended, higher quality range of insurance products.
During the financial year, an agreement was reached to acquire 51.163% of the
Banca del Garda, the sale of which was completed in January 2005. Last
November, all the necessary organisational and IT initiatives required to integrate
this new purchase into the Group were carried out. Migration to the Group’s IT
system took place in February of this year and the new Bank began operations
using the instruments and products of the Veneto Banca Group.
4. BANKING ACTIVITIES
4.1. THE SALES STRUCTURE
The Veneto Banca Group operates in the national and Romanian market using a
traditional type of distribution structure. In Italy, alongside the fixed network,
alternative sales and customer contact methods are used, aimed at strengthening
the branches’ sales activity.
4.1.1. THE BRANCH NETWORK
As at 31 December 2004 the branch network of the Veneto Banca Group was
made up of 153 units.
The openings particularly involved Veneto with the opening of the branch at S.
Biagio di Callalta, the second agency at Castelfranco Veneto and the Mestrino
branch, and Lombardy, where the Banca di Bergamo opened branches at
Clusone, Madone, Sant’Omobono Terme and Sarnico, all located in the same
province.
Finally, from March, the Banca Italo-Romena also became operational in the city
of Bacau with the opening of its sixth Romanian branch.
On the other hand, there were no changes to the number of branches of the
Banca Meridiana with the opening of the new Agency 1 at Potenza, replacing the
Grottole branch.
BRANCH TREND
(units)
1997
55
55
1998
56
56
1999
61
2000
61
79 2 81
2001
82
2002
4
12 98
94
4
12
2003
99
6
2004
100
7
0
20
Veneto Banca
40
60
80
Banca Italo-Romena
100
30 140
30 147
12
16
120
Banca di Bergamo
30
140
153
160
180
Banca Meridiana
From the end of January of this financial year, the Banca del Garda spa also
became part of the Group.
The heart of the bank’s operations are based in the province of Verona, and it has
a network of 10 branches. Its integration is fully in line with the Veneto Banca
Group’s plans for geographic expansion.
directors’ report on operations 29
Geographic expansion, aimed at strengthening the operational base in the local
area and better supervising the established areas of operation, has seen a growth
in the network, compared to the 2003 figure, of 6 branches.
Finally, with regard to the other operational outlets, as at 31 December 2004 the
Group had 160 ATM and 2,766 POS terminals at its disposal.
directors’ report on operations 30
LOCATION OF BRANCHES/ATM/POS
BRANCHES
ATM
POS
Treviso (*)
Vicenza
Venice
Padua
Belluno
Verona
Pordenone
Udine
other provinces in the Veneto area
Total for Triveneto
Milan
Rome
other provinces
Total for Veneto Banca
Bergamo
other provinces in Lombardy
Total for Banca di Bergamo
Avellino
Bari
Brindisi
Matera
Potenza
other provinces
Total for Banca Meridiana
Treviso
Romania
Total for Banca Italo-Romena
70
9
4
5
2
1
6
1
98
1
1
100
16
16
1
9
5
6
9
30
1
6
7
75
8
5
5
2
2
7
1
105
1
106
16
16
1
11
5
10
11
38
0
0
0
1,332
158
184
66
55
14
98
34
23
1,964
9
43
63
2,079
101
10
111
68
153
99
98
152
6
576
0
0
0
Group total
153
160
2,766
4.1.2. NEW CHANNELS
After a relatively static period, 2004 was marked by a clear tendency, by some of
the most important competitors in the mobile networks (banks, stockbrokers and
insurance companies) to intensify integration, restructuring and redistribution
operations between the banking, insurance and financial promotion channels.
In this regard, a considerable impulse came from the customers’ very favourable
response to Internet Banking that is at the heart of Italian banks’ multi-channel
strategy.
The internet channel is a considerable help for agents and financial promoters in
selling banking services to customers, who can benefit from all the services
without being restricted by time or space, even when away from the actual
branch.
More than 4.3 million private customers are able to access the internet services
offered by Italian banks, representing approximately 11.7% of the 37 million
banking customers.
During the year, the Group’s distribution strategy was, as mentioned, influenced
by the sale of 80% of the equity investment in Claris Vita, mainly motivated by
changes caused by the Basel 2 legislation.
This transaction led to a review of the overall distribution model, highlighting the
focus on the traditional network by limiting the operations of the network of
financial promoters to the area of Triveneto only. As at 31 December 2004 there
were 23 promoters working in this area.
(*) includes the online branch
4.2. PRODUCT AREAS
2004 saw a slight recovery in the flow of household savings destined for financial
activity.
Despite the positive trends recorded by the markets, a certain degree of caution
prevailed nevertheless, in decisions regarding savings allocation. Once again,
these involved a predominance of defensive financial instruments, with the
primary objective being to protect the value of the investment.
Against this background, the trend in current accounts was thus particularly
active.
With regard to asset management, along with a clear resizing of the weight of
mutual investment funds in the household portfolio, we witnessed a growth in
the quota of shares and equity investments, mainly thanks to the positive
performance of the stock markets and greater customer interest in stock
investments over the medium to long term.
The very positive trend in the demand for credit from households and businesses
was supported by the longer-term element, with loans being redirected towards
the medium-long term sector.
The issue and sale of structured bond loans successfully continued. As these
provide guaranteed capital on expiry, they meet the demands being expressed by
customers.
With regard to managed savings and insurance products, mutual investment
funds and insurance products with a high financial profile performed well.
Focusing on the end customer was also essential for this sector during 2004, and
took the form of maintaining high quality standards in terms of the offer, and
backing up the comprehensive product range with our consultants’ expertise.
The Group has continued to operate according to a multibrand system, using
new reporting and independent analysis tools, thanks to the agreement signed
with “Morningstar”. This decision means that it can also ensure the correct focus
on customers’ varying needs and their “risk profiles”during difficult times for the
industry, while simultaneously protecting customers from possible conflicts of
interest from financial brokers, offering them the possibility of diversifying their
financial portfolio in real terms. This set-up enables a wide variety of choices as
to geographical areas, investment currency, management style, risk type and
sectors.
The market has continued to show its approval of insurance-related investment
products, and index linked products in particular, which give greater protection
for invested capital, influenced by the volatile markets and the Cirio and Parmalat
affairs. In this regard it is interesting to note the good performance of the
placements made.
The thriving life insurance sector has also been strengthened by the significant
results both with regard to recurring and single-premium products.
Finally, the performance of non-life insurance products should also be
mentioned. A particular highlight is the results for the motor product, up by
24.5% as to the number of policies and by 12.1% for paid premiums. In this
sector, confirmed by the interest aroused by national media, the “Polizza Merlino”
directors’ report on operations 31
4.2.1. INVESTMENT PRODUCTS
Considering the scenario for 2004, the Group’s overall sales activities were
particularly focused on products with guaranteed or secured capital, or those with
a medium to low risk profile.
has attracted considerable success. As this policy offers insurance cover for
confiscation of the driver’s licence, it is certainly a novelty for the Italian market.
Also in this case, not only has the capacity to present the client with high quality
yet competitive products been important, but especially the capacity to offer
qualified assistance in post-sales operations carried out via“Claris Assicurazioni”.
4.2.2. LOAN PRODUCTS
The Veneto Banca Group has always demonstrated its strong focus on this sector,
so much so that it was one of the first Italian banks to adhere to the “European
Code of Conduct”, a specific protocol intended to define loan standards.
directors’ report on operations 32
The favourable level of interest rates also continued to produce positive effects for
the provision of residential loans during 2004.
The business conducted in this sector was considerable, especially regarding the
development of products with features that are attractive to customers, allowing
the Group’s banks to take part in a sector which is certainly extremely
competitive.
The work therefore focused on preparing a broad catalogue of products,
characterised by high levels of quality, new products, diversification and
adaptability to customers’ needs.
Among the most successful products, also in terms of their innovative value,
mention should certainly be made of the “Mutuotutto Trasgressivo”, that enables
financing up to 120% of the survey value, the “Cap&Floor” loan, specifically
designed to protect the debtor from possible interest rate variations, and finally
the “Mutuo Elastico”, designed to guarantee a constant rate over time.
Operations relating to agreements with professional associations and bodies also
proceeded with positive results. In this regard, the “Convenzione Provincia di
Treviso”, an agreement signed with the Provincial Authority to encourage firsttime buyers in the province, was particularly significant.
Consumer credit also grew at a significant pace. This activity has been developed
with the personal loans supplied directly by the Group’s banks and through
commercial agreements with specialised companies, with proven, consolidated
experience, such as Findomestic and Linea.
In this field, the leading products include “Carta Aura”, the most successful
revolving credit card in Italy. During the financial year it recorded a particularly
interesting trend in terms of the number of cards placed, with overall growth of
nearly 20%.
4.2.3. SERVICE/PAYMENT PRODUCTS
In a scenario marked by a strong preference for liquidity, the current account is
certainly a priority tool, especially in relation to developing new customers, and
is the favoured vehicle for the increase of cross selling.
During the financial year, activities in the current accounts sector, referring to
private customers, focused particularly on promoting the current account
package “Conto Libero”, with its three profiles “Bianco”, ”Arancio”and ”Blu”.
The product has been designed to align itself with a market that is ever more
aware and attentive as regards current account charges, aimed at managing
everyday needs.
As regards electronic money, the wide range of debit and credit cards, and the
offer of prepaid cards has met the numerous demands of customers and the
various targets, guaranteeing the Group’s competitiveness.
The stock of debit and credit cards continued to record a positive trend.
In terms of numbers, debit cards increased by 10.8%, being distributed among
products with differentiated limits and methods of use, while credit cards
recorded an increase of 5.1% compared to the previous financial year.
Bank
Debit
cards
2004
Credit Revolving
cards
cards
Debit
cards
2003
Credit Revolving
cards
cards
Veneto Banca
Banca Meridiana
Banca di Bergamo
40,283
15,815
2,289
44,413
6,430
2,352
6,487
769
44
35,737
15,389
1,580
42,514
6,231
1,847
6,096
-
Total
58,387
53,195
7,300
52,706
50,592
6,096
% incr. '04/'03
10.8%
5.1%
19.8%
The wide, diversified range of products available, continually being updated, has
given a targeted response to the various financial problems faced by corporate
customers.
As regards financing for SMEs, a sector in which the Group’s banks have
traditionally operated, special attention was reserved to loans for investments
and/or specific requirements, apart from requirements related to the usual
treasury flexibility.
The products made available to companies tend to allow them to choose the
term/rate combination that best meets their needs.
In addition, special emphasis was given to loans that enable access to the
incentives provided for by public regulations, and those provided by professional
bodies.
In the foreign sector, despite the problematic situation in Italian exports, where
the growing loss of competitiveness is now accompanied by the high level of the
Euro compared to the Dollar, the sales network has in any event managed to
increase its traded volumes by 9.8%.
The increase affected all banks in the Group, with significant trends even in
relation to the size of each bank. Veneto Banca, which achieved Euro 3.9 million,
closed with an increase of 9.4%, while the Banca di Bergamo and Banca
Meridiana recorded two-figure growth rates, equal to 12.1% and 26.7%
respectively.
In addition, the trend in the trading portfolio was also positive. In 2004 this
produced an overall increase of 8.4%.
Looking at the Group as a whole, the Parent Company’s result was particularly
significant, especially with regard to absolute values. Its activity increased by
10.2%. However, the growth for the Banca di Bergamo and Banca Meridiana was
also entirely satisfactory.
As regards electronic services, POS development activity was again significant.
There are now 2,766 active terminals with an increase of 8.4% compared to the
previous year. In this context, the Parent Company’s result was particularly
directors’ report on operations 33
4.2.4. OPERATIONS WITH BUSINESS CUSTOMERS
Sales activity dedicated to corporate customers was also particularly intensive
during 2004, in line with the planned strategic guidelines.
important, with a growth of 9.7% for the year, going from 1,896 to 2,079
terminals.
In the remote banking sector, operations focused on the “Web CBI”product. As at
31 December 2004 this numbered 2,636 active stations, compared with the
previous 1,897. The growth significantly affected both the Parent Company, that
recorded 2,377 units at the end of December, and the subsidiaries of the Banca di
Bergamo and Banca Meridiana that more than doubled the number of active
stations during the year.
In order to deal with companies’ requirements for exchange rate risk
management, business in OTC derivatives continued, through the activities of
the Parent Company and the Banca di Bergamo.
The Local Authority Treasury Service expanded its customer portfolio and
operations, increasing the number of managed current accounts by 11.6%,
reaching 336 at the end of 2004.
The long term vehicle leasing business continued with good results, closing the
financial year with a total of 1,040 vehicles leased by the Parent Company alone.
directors’ report on operations 34
Via the subsidiary Claris Broker, an important agreement was signed for
collaboration with a leading French company for insurance and customer credit
management. This agreement, aimed at selling credit insurance policies, meets
the needs of companies, also in view of the application of the “Basel 2”
assessment criteria.
In the context of the specific business conducted with reference to the
“corporate” segment, the participation in Sintesi 2000 must certainly be
highlighted. This company, whose business has gradually become more focused
on supporting entrepreneurs in the Far East, offers high added value activities for
those facing international competition, thanks to its direct branch office in Hong
Kong, by evaluating the level of risk in various markets. The opening of the
Shanghai office, scheduled for the second half of this year, will provide further
concrete support to Italian businesses in developing projects and initiatives in
China.
4.3. MARKETING
Marketing activities were mainly focused on continually reinforcing the brand, in
particular working on spreading its reputation and bringing the communicative
styles of the various Group companies into line, including layouts and sales
outlets.
The strategy, begun during the past financial year, aimed at supporting the
network’s sales actions continued during 2004, through the most appropriate
combinations of communications materials and methods.
In particular, with regard to sales communication, the focus was on products with
greater appeal, such as “Mutuotutto Trasgressivo”, motor insurance, current
account packages and consumer credit, using attractive high-impact graphics and
slogans to capture the public’s attention.
A variety of means were used for this activity, with great attention being given to
the costs/benefits ratio. Moving posters were used (public buses) and static ones
(street hoardings) together with a careful plan of advertising in the local and
specialised press, and also using the radio and local TV.
4.4. ADVERTISING AND COMMUNICATION
The commitment and resources invested in promoting and strengthening the
image of the Group and its subsidiaries was also important during the financial
year in question.
During 2004, events management was certainly focused in this direction,
involving top level initiatives.
Particularly significant among these was the “Meeting with Jeremy Rifkin”, the
well-known American economist, who attracted about 500 people to Veneto
Banca’s Management Centre, enhancing Veneto Banca’s role as a positive, proactive member of the economic and cultural scene.
The strong link between the bank and the production network was confirmed
with the sponsorship of the Annual Meeting of Unindustria Treviso, as well as the
20th edition of the Rapporto Osem, an in-depth analysis of the sports footwear
industry.
4.4.1. CULTURAL AND SOCIAL ACTIVITIES
The commitment of the Fondazione Veneto Banca in a social and cultural
context also continued during 2004, with particular regard to its traditionally
served areas.
The initiatives carried out were directed at maintaining the quality of life and civil
development in the branch areas, with a special emphasis on solidarity and social
unease, as well as culture and popular traditions, the recovery and conservation
of artistic and environmental assets, healthcare and education.
The total amount paid out in 2004 was Euro 590 thousand, distributed as follows:
- solidarity, 41%;
- culture and popular traditions, 37%;
- art and restoration works, 13%;
- amateur sports, 4%;
- other, 5%.
The most significant initiatives carried out in the area of social solidarity were the
payments to the Centro Sociale Parravicini di Vittorio Veneto, the Cooperativa Sociale
Sol.Co. of Treviso and finally to the Centro Educativo Occupazione Disabili (Training
centre for disabled people) “La Casa di Michela” at Quinto di Treviso.
In addition, financing continued for the three-year programme for the Fondazione
per il Sostegno delle Strutture Sanitarie Cardiovascolari (Foundation for
Cardiovascular Hospitals) at Mirano, the promoter of important research
initiatives.
Support for the provincial music institutes and the Palio del Vecchio Mercato at
Montebelluna was also reconfirmed during 2004.
With regard to initiatives aimed at promoting and restoring artistic heritage in the
region, the Foundation took an active part in the “Progetto Chiese di Venezia” and
in the important restoration works at the “Oratorio di Villa Guidini”, in the
Municipality of Zero Branco.
directors’ report on operations 35
A major event was the inauguration of the new Management Centre which has
played a very important part in strengthening the image and visibility of the
Group, even during its first year of operation.
There were also a number of important, exciting and profile-raising cultural
events that included the photography exhibition by Elio Ciol, a master of the art
of black and white photography.
Finally, the Foundation once more took an active part in the sector of youth and
amateur sports.
5. CONTROL AND SUPPORT ACTIVITIES
5.1. THE INTERNAL CONTROL SYSTEM
The internal control system is the combination of rules, procedures and
organisational structures that, in compliance with the laws, directives of the
Supervisory Authority and corporate strategies, enables proper management of
all the Bank’s activities. It involves the Board of Directors, the Statutory Board of
Auditors, Management and all personnel in various roles.
In Veneto Banca and its subsidiaries, this system is set up in accordance with the
directions of the Supervisory Authority. It includes:
directors’ report on operations 36
- line controls, aimed at ensuring that operations are conducted properly. These
are carried out by the business units themselves, incorporated into the
procedures or carried out in the back office activities of the various operational
units (branches and central operational departments);
- risk management controls, aimed at helping to define risk assessment
procedures, to check compliance with the limits assigned to the various
operational departments and to check that operations are in line with the
individual areas of production, with the set risk/return targets. These checks are
entrusted to the central departments of Planning for management control,
Loans for credit security and Risk Management for market and operational
risks;
- internal audit activities, aimed at identifying anomalous trends, breaches of
procedure and regulations, and to assess the functioning of the overall internal
audit system. These are conducted on an ongoing basis, periodically or at
random, also through on site checks, by Controls Management.
To ensure the objectives are achieved, the internal control system is continually
updated and adapted to the various activities of the Bank and its subsidiaries. The
control system envisaged for the Parent Company Veneto Banca is also fully
operational for the subsidiaries of the Banca di Bergamo and Banca Meridiana.
For the Banca Italo-Romena, which uses a Romanian information system,
different from the one used by the other banks in the Group, auditing checks
were brought into line during the financial year with the same methodology used
in Veneto Banca.
With regard to internal auditing activities, checks on the Parent Company’s
central structures were further refined, with particular reference to the financial
sector.
During the financial year 2004, 728 checking activities were completed, of which
172 were remote and 556 on site, at the Parent Company’s central and peripheral
locations and companies where the bank has a majority shareholding.
5.2. RISK ASSESSMENT AND MANAGEMENT
5.2.1.1. CREDIT ALLOCATION
During 2004 implementation of the various components of the TCQ system
(Total Credit Quality) continued to see a gradual improvement in the assessment
and management of credit risk, also in view of the important new developments
outlined by the Basel committee in the context of the new legislation regarding
changes to Banks’ assets, the definitive version of which was issued in June 2004.
The new Basel agreement (known as Basel 2), that will replace the one currently
in force with effect from 2007, introduces various new features in terms of
evaluating both credit and operational risks, changing both the procedure for
assessment and the calculation tools used for weighted assets.
With the TCQ system, the Bank has implemented an approach based on internal
ratings. This system requires continual monitoring to improve its performance
and integrate its functions. Only when a database with enough historic depth
becomes available we will be able to proceed with an estimate of the likelihood
of default and loss in the event of insolvency by using own data.
Likewise, the Risk Management department also equipped itself with a credit risk
and management analysis application during 2004. This is designed to provide,
via a learning model based on anagraphical, balance sheet, trend-related data,
and feedback from the Bank of Italy’s Risk Centre, the likelihood of default for
both retail and corporate customers. The aim is to implement the initial analyses
on the risk profile/loan return and carry out simulations concerning the absorbed
capital. This application is currently in use for the customers of Veneto Banca and
will subsequently be extended to the other companies in the Veneto Banca Group.
5.2.1.2 SYSTEMATIC SECURITY
The Credit Security Service ensures the constant remote monitoring of the credit
risk for customer relations of the Bank and Group companies, and takes the
necessary action to eliminate or mitigate the risks deriving from anomalous
relations.
It guarantees the correct classification of performing entries and those under
surveillance, and, acting on the opinion of the Legal Department, establishes if
and when to transfer them to the watch list or non-performing loans.
It also updates the credit risk monitoring and control processes, ensuring full
consistency with corporate policies and with the directives of the Supervisory
Authority.
5.2.2. TREND IN FINANCIAL RISKS AND CONTROL
PROCEDURES ADOPTED
During the financial year, the Group’s Financial Risk Regulations were updated
and brought more into line with the current operating reality. These regulations
arose from the need for a more incisive coordination and more efficient
management of risk within the Group’s Finance sector, aimed at governing the
type of risks regulated, the limits and authorities in operation relating to the
activities carried out by the Parent Company and all the subsidiaries, the duties
of the bodies and departments in charge of operating on the markets and the
internal control system.
The department in charge of the Risk Management process, whose aim is to
assess and control the Veneto Banca Group’s exposure to market, credit and
operational risks, identifies specific, specialised structures with the tasks of
directors’ report on operations 37
5.2.1. ASSESSMENT AND MANAGEMENT OF CREDIT RISKS
directors’ report on operations 38
monitoring and control.
The Board of Directors has the task of defining the overall degree of risk aversion
and therefore the operational limits.
The General Management has the task of guaranteeing compliance with risk
policies and procedures.
The Risks Committee has the task of evaluating – at an overall level and for each
Group company – the risk profiles achieved and thus the capital consumption, for
supervisory or economic purposes, together with the trend in the risk/return
ratios.
The Finance Committee has the task of examining the performances achieved by
the various business units and checking the risks taken, in relation to the limits
assigned, by studying the summary reports produced by the Risk Management.
This committee also evaluates the investment opportunities in the financial
markets with the aim of shared risk/return.
These committees were implemented in line with the activity of refining the
instruments to assess the various risk types.
5.2.2.1 MONITORING OF MARKET RISKS
The model for calculating market risks only considers the risk for the generic
portfolio and not the specific risk (of the counterparty). During the year, we
attempted, by implementing internal analysis modules, to take into account the
specific risk element, at least for the financial products in the portfolio, mainly
subject to this important peculiarity.
Currently, risk monitoring covers 100% of Veneto Banca’s trading portfolio and
the portfolio of VIFS. The credit risk relating to 15% of this portfolio is measured
using an internal calculation model, implemented according to the proposals of
the leading international financial institutions, following the requirements issued
by the Supervisory Authority.
During the year, Veneto Banca used the Murex system to calculate the daily VaR
for the portfolio, with a 99% confidence interval, on a historic basis. During the
year Murex was also extended to VIFS. Currently, our subsidiary also uses a
parametric Bloomberg VaR which appears to be more appropriate for the specific
nature of the portfolio held. For both portfolios, the findings are obtained daily.
The future developments in the system for calculating market risk are directed
towards achieving an efficient, effective and more complete system of monitoring
and managing market risk managed outside the front office Murex system, as
recommended by the Supervisory Authority. This system will be equipped with a
database, with market trends on rates and exchange rates to evaluate the
financial instruments, used to implement stress testing and back testing.
For the Group, as at 31 December 2004, the 10 day VaR with a 99% confidence
interval totalled Euro 1,054,000 2, divided into the following types of financial
instruments:
- Euro 321,730 for the share portfolio;
- Euro 884,500 for the bond portfolio;
- Euro 23,950 for the exchange rate position.
5.2.2.2. RATE AND LIQUIDITY RISK CONTROL
With effect from the first half of 2003, a process was set up designed to quantify
and manage financial flows in an integrated manner. The methods used enable
monitoring of the following risk types:
- The interest risk, determined by the time lag in due dates and the timing of
repricing of the interest rate for the bank’s assets and liabilities. Where there are
market rate fluctuations, this mismatching causes a variation in the expected
interest rate that can be quantified using the maturity gap techniques, looking
2 The amount takes into consideration the
correlation between the portfolios.
at the short term, in other words the current financial year. If on the other hand
the view taken is over the long term, adopting the market values perspective,
the sensitivity analysis technique is used, designed to quantify the impact on
capital of a variation in market rates.
- The liquidity risk, deriving from the problems the bank may experience in
dealing with the cash expenditure caused by the time lag in creating liquidity
flows, relating to both capital and interest, payable and receivable.
To monitor these risks the Veneto Banca Group relies on the advice of Prometeia
and the software they use (ALMPro). The banks currently monitored with these
techniques are only the three commercial ones (Veneto Banca, Banca di Bergamo
and Banca Meridiana), while those for Veneto Ireland Financial Services and
Claris Leasing are currently being set up.
The banking book management policy has traditionally been limited to merely
covering all the risk positions. There is a possibility that, although within the
context of the limits defined in the regulations, a more active management of
positions may be implemented in the near future, in order to seize opportunities
with regard to medium term interest rates.
5.2.2.3. OPERATIONAL RISKS
Operational risk is caused by many factors, including the lack of respect for
administrative procedures (authorisations, respect for powers, completeness of
documentation), the failure of security procedures, IT system faults, other
structural malfunctioning or staff error.
To prevent or reduce possible losses caused by operational risks,Veneto Banca has
directly dealt with the setting up and activation of a procedure aimed at
regulating access to the IT applications and access for all the Bank’s operators.
In Veneto Banca, operational risks are also governed by the internal control
system, already outlined for some of the main corporate departments, which
contains the checks that the manager of the business unit must carry out, at his
or her own responsibility.
In addition, a project aimed at systematically collecting operating losses is being
studied (setting up of an internal database) through standardised processes
involving the entire organisation, both central and peripheral. This data collection
process will form the starting point for a more in-depth qualitative evaluation of
the Bank’s exposure to operating risks, in order to increase the effectiveness and
promptness of corrective measures.
directors’ report on operations 39
As at 31 December 2004 the risk exposure for the three banks with regard to rates
and liquidity has remained within the limits established in the Group’s Financial
Risk Regulations.
5.3. TECHNOLOGICAL AND
ADMINISTRATIVE/ORGANISATIONAL
SERVICES
In terms of organisation and information technology, 2004 was marked by two
main lines of planning initiatives. The first was aimed at completing and
consolidating the Group’s organisational set-up, ensuring the full operation of
all the best solutions and their effective, efficient functioning. The second
involved the direction and creation of a series of initiatives intended to
implement the strategic guidelines laid down in the Group’s industrial threeyear plan.
directors’ report on operations 40
During 2004 all the projects aimed at centralising non-sales activities at the
Parent Company were continued, keeping all the aspects relating to customer
relations management at the peripheral structures.
The extension of the new model for governing and controlling administrative
expenses to subsidiary banks was a step in this direction. It has been in operation
at the Parent Company since 2003.
The initiative that completely redefined the regulations for business in OTC
derivatives was very important. Via an inter-functional working group, involving
various Group organisations, the following were redefined: the target customers
for this activity, the products to be offered, the operations and risk profiles to be
included, the lines of credit and absorption, and monitoring and risk control
operations.
To back up the redrafted regulations, development of the integration of IT
support tools continued, based around the front office Murex procedure.
During the year, planning initiatives imposed by the banking system’s legislative
restrictions were also carried out. The most significant of these was the
adaptation to the new IAS accounting principles in line with the legal obligations
that took effect from 1 January 2005. The activities carried out involved significant
commitment, affecting almost all the corporate structure both in terms of work
carried out and training of the personnel involved.
Equally important was the commitment made necessary by the adaptation to the
Basel 2 directives, that required a planning structure to comply with the deadline
on 1 January 2007. This will also require a significant effort in terms of
implementation for this year. Supporting this commitment will be the extension
to all banks in the Group of the tools for assigning an internal rating to all
customers. This will be guaranteed by the project, already in operation since 2002,
known as “Total Credit Quality”, which is being finalised.
5.4. TRANSPARENCY IN BANKING OPERATIONS,
COMPLAINTS MANAGEMENT, PREVENTION
AND SECURITY, PERSONAL DATA
PROTECTION
• Privacy law 196/2003
On 1 January 2004, the new Data Protection Code came into force.
The correct, full application of the legislative decree 196/2003 required a great
deal of formal and substantial obligations that have had a great impact on the
company’s organisational set-up.
The joint provisions of the law and the minimum and obligatory security
measures complementing it have led to internal regulations being analysed and
updated, not only for information and IT systems, but also for paper archives, all
work procedures and the environments where personal data is processed, those
responsible for processing and the methods they use, directly or indirectly
involving every sector, office or department in the company.
In June 2004, the update to the Security Planning Document was drafted
(“Security Measures adopted by Veneto Banca for the protection of personal
data”) following the directions contained in the technical regulations attached to
the legal text (Appendix B to the legislative decree 196/2003).
The document took steps to:
- list the processing of personal data carried out in the capacity of data holder,
the processes and technological structures used;
- analyse the risks to which data is subject;
- outline the organisational structures dealing with data processing and the
related distribution of tasks and responsibilities;
- outline the measures put in place for the physical protection of premises;
- outline the measures put in place to guarantee integrity of data;
- outline the measures put in place to guarantee confidentiality and control
access to data;
- outline the measures put in place to ensure availability of data;
- outline the criteria and procedures for restoring data availability after it has
been destroyed or damaged;
- outline the training schedule for those dealing with processing;
- outline the plan to update the internal regulations.
• Law 231/2001
The legislative decree 231/2001 introduces a form of objective responsibility into
the Italian legal system, what is known as “administrative corporate liability” for
bodies and companies deriving benefits from certain well-defined offences
committed by directors, managers and employees in the interests of the
organisation. It is a new, real, business risk.
This law, forming part of an international scenario that tends to overcome the
principle of companies not being held criminally liable, combines the essential
elements of the penal and administrative systems, subjecting the company to
criminal proceedings with financial and prohibitive penalties.
directors’ report on operations 41
• Transparency in banking operations
Veneto Banca and the other Group banks continued their work in the context of
the project PattiChiari. This is an important long-term initiative promoted by the
ABI (Italian Banking Association). The project, created with the aim of improving
relations between banks and their customers, fits in well with the Group’s values,
transparency being one of the basic elements of its business.
directors’ report on operations 42
To date, the law refers to precise types of offence, introduced in subsequent
periods: offences against public authorities, coinage offences, corporate offences,
offences relating to terrorism and offences against the individual.
This type of responsibility arises if the offence is committed in the interests of or
to the benefit of the organisation itself by:
1. individuals considered to be “executive” (those carrying out functions of
representation, administration or direction of the organisation or one of its
financially and functionally independent units, as well as by those responsible
for its management and control). In this case the organisation is responsible,
unless evidence is provided to the contrary, to be supplied by adopting a
special prevention model drawn up according to legal directives;
2. individuals subject to the direction and supervision of executives: in this case,
the organisation is only responsible if committing the offence was made
possible by the failure of the executives to carry out their obligations of
direction and supervision. The legislative decree 231/2001 also states that “in
any case the lack of observance of the direction and supervision obligations is
excluded if the organisation, prior to committing the offence, adopted and
effectively implemented a model for organisation, management and control
designed to prevent offences of the type which was committed”.
Having said that, relying on the advice of a specialist external company, a project
was set up to adopt all the procedures required by law to protect the Bank from
possible situations of administrative liability pursuant to the legislative decree
231/2001 and in particular to prepare a specific“organisational model”as required
by law, in conformity with the guidelines of the Italian Banking Association,
approved by the Ministry of Justice and, as such, designed to prevent possible
liability being attributed to the Bank pursuant to the said law.
Adoption of the abovementioned organisational model, the only way to avoid
application of penalties, is not obligatory, but is an opportunity that Veneto Banca
has taken, by setting up “Progetto 231” towards the end of 2004. This will be
concluded with the preparation and implementation of the model and the
procedures mentioned above during this financial year.
It is also planned to extend this model to the other Group companies, duly
adapted.
• Related party transactions
With regard to the companies’ adoption of rules to ensure the transparency and
substantial and procedural correctness for any transactions with related parties,
and also to provide suitable information in the directors’ report, it has been
agreed to indicate the largest amounts in infra-group transactions in the notes
to the consolidated financial statements, under the analysis of the breakdown
of balance sheet items.
For related parties other than Group companies, the supply relations for goods
and services within the Group concerning the usual type of business of the
companies involved are represented along with the customer operations as
they are always made with a purpose, amount due, procedure or timeframe
that is similar to the one normally used in customer relations.
No atypical or unusual transactions were recorded during 2004.
5.5. BANCA D’ITALIA INSPECTION
During 2004 the Banca d’Italia carried out a scheduled inspection at the Parent
Company, the Banca Italo-Romena and the Banca Meridiana.
The inspections did not highlight any significant anomalies in terms of operation
or management.
The extent of the inspections carried out by the Supervisory Authority, involving
the strategic and organisational profiles and the overall structure of the
inspections, confirmed the good quality of the companies subjected to
inspection, and certify that the Group is in a suitable position to continue its
development operations with determination.
6. TREND IN CONSOLIDATED
OPERATIONS
During 2004, the Group’s operations developed in an external scenario that was
more favourable to banking and financial brokerage, and showed a few weak
signs of recovery compared to the previous financial year.
Although we did not see a significant recovery in consumption or income, the
climate of confidence highlighted a trend reversal, and gradually built up,
especially in the second half of the year, partly recovering from the drop recorded
in 2003.
This increased confidence resulted in a gradual increase in the impact of the
medium and long term component of household savings.
The trend in the demand for loans and consumer credit was also lively during
2004.
Loans to companies also recorded sustained increases, despite the general
economic figures which recorded rather modest growth.
BREAKDOWN
OF CUSTOMERS
BY SEGMENT
14 Affluent
private
3 VIP
private
(%)
13 POE
The following sections show the main results achieved during the financial year.
4 Corporate
66 Universal Private
and residuals
3 Private customers were segmented in relation
to the estimate of the size of their assets held
throughout the entire financial system,
divided into VIP, Affluent and Universal.
Companies, divided into Corporate and
Small
Businesses
(Piccoli
Operatori
Economici - POE), were segmented on the
basis of sales, or in the absence of this, the
credit granted.
4 Not including customers of the Banca Italo-
Romena.
Against this background the Group managed to make perfectly satisfactory
progress, achieving excellent results, both with respect to the development of
traded volumes and the customer base and in terms of income.
6.1.1. CUSTOMER BASE AND SALES SEGMENTS
At the end of the year, with regard to the segments of customers served 3, the
Group relied on a structure made up of approximately 83% private customers
and other, of whom approximately 17% belonged to the high income segment.
The remaining 17% were businesses, divided into small business and corporate,
with 13% and 4% respectively.
The main component, including “universal” and residual private customers,
representing 66% of the customer base on average, is distributed differently
among the three4 different banks. For Veneto Banca this segment represents 64%
of customers. The percentage drops to 43% for the Banca Bergamo, rising to 81%
in Banca Meridiana.
The above shows that the Parent Company and Banca Meridiana are more
oriented towards retail, while the Banca di Bergamo has a customer structure
with a larger number of corporate and small business customers, representing
32% overall compared to the 16% for Veneto Banca and the 12% for Banca
Meridiana.
directors’ report on operations 43
6.1. OPERATIONAL DEVELOPMENT
CUSTOMER STRUCTURE BY SEGMENT AND BANK
(%)
90%
81
80%
60%
64
70%
43
50%
40%
30%
18
11
1
6
1
6
4
4
12
12
16
10%
20
20%
0%
VENETO BANCA
Universal and Residual private customers
BANCA DI BERGAMO
VIP private customers
BANCA MERIDIANA
Affluent private customers
directors’ report on operations 44
With regard to the breakdown of volumes, a study of the data shows a certain
balance in the weight of the various segments, in terms of deposits. Viceversa,
when looking at loans, the clear focus on the companies’ sector can be seen,
channelling 45% of the aggregate, and on small businesses, representing 27%.
The margins by segment were also largely in line with the volumes breakdown.
The absolute dominance of the corporate and small business segments can be
seen with regard to the financial spread.
On the contrary, the income contribution made by services to private customers
seems to be more significant. At the end of the financial year this represented
approximately 60% of the service margin.
6.1.2. FINANCIAL AGGREGATES
In 2004 gross banking income displayed a 16.1% increase. This rise, caused by
important growth both in administered volumes and in loans, led the total
aggregate to exceed Euro 14.5 billion.
POE
Corporate
BREAKDOWN
OF LOANS
BY SEGMENT
6 VIP private
(%)
4 Affluent private
27 POE
18 Universal
and Residual private
45 Corporate
GROSS BANKING INCOME (in Euro million)
Loans to customers
Direct deposits
Indirect deposits
GROSS BANKING INCOME
2004
2003
% var.
5,207
5,234
4,103
4,368
4,403
3,755
19.2%
18.9%
9.3%
14,544
12,525
16.1%
BREAKDOWN
OF TOTAL DEPOSITS
BY SEGMENT
21 Corporate
(%)
26 Universal
and Residual
private
This advance also had an impact on average unit productivity that increased from
Euro 8.2 to Euro 9.0 million during the year.
Traded volumes by branch also registered a clear improvement, exceeding Euro
97 million as against the previous 87 million.
20 VIP private
19 Affluent private
14 POE
4 Non sono compresi i clienti di Banca Italo-
Romena.
6.1.2.1. CUSTOMER DEPOSITS
As at 31 December 2004 administered customer volumes reached Euro 9,337
million with an increase of 14.5%.
TOTAL CUSTOMER DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
Due to customers
Securities issued
Deposits in administration
Direct customer deposits
Managed savings
Administered savings
Indirect customer deposits
3,088
2,137
10
5,234
1,747
2,356
4,103
2,482
1,908
13
4,403
1,641
2,114
3,755
24.4%
12.0%
-26.1%
18.9%
6.5%
11.4%
9.3%
56.1%
TOTAL CUSTOMER DEPOSITS
9,337
8,158
14.5%
43.9%
Both components showed a positive trend, although the greater degree of activity
in direct deposits confirmed that there is still a high degree of uncertainty among
savers.
% BREAKDOWN OF CUSTOMER DEPOSITS
2004
2003
2002
2001
2000
Direct deposits
Indirect deposits
53.97
46.03
47.71
52.29
44.81
55.19
43.22
56.78
56.06
43.94
All Companies in the Group contributed to achieving the above result, with
contributions relative to the specific nature of the activities carried out and the
extent of operations, as described in more detail below.
DIRECT DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Veneto Banca
Banca di Bergamo
Banca Italo-Romena
Banca Meridiana
Claris Factor
Claris Leasing
VIFS
Adjustments and cancellations
4,047
461
100
718
57
7
127
-283
3,422 18.3%
333 38.4%
50 101.0%
611 17.4%
127 -54.9%
7
1.3%
127
0.0%
-274
3.3%
77.3%
8.8%
1.9%
13.7%
1.1%
0.1%
2.4%
-5.4%
77.7%
7.6%
1.1%
13.9%
2.9%
0.2%
2.9%
-6.2%
TOTAL DIRECT DEPOSITS
5,234
4,403
18.9%
100.0%
100.0%
2004
2003
% var.
% for '04
% for '03
Veneto Banca
Banca di Bergamo
Banca Meridiana
Adjustments and cancellations
Total indirect deposits
3,533
292
335
-56
4,103
3,282
182
370
-79
3,755
7.6%
60.2%
-9.5%
-28.6%
9.3%
TOTAL CUSTOMER DEPOSITS
9,337
8,158
14.5%
INDIRECT DEPOSITS (in Euro million)
86.1%
7.1%
8.2%
-1.4%
100.0%
87.4%
4.8%
9.9%
-2.1%
100.0%
directors’ report on operations 45
The trends highlighted meant that the financial year closed with a breakdown
marking a further shrinkage of the indirect component, from 46% to 43.9%.
6.1.2.2. DIRECT DEPOSITS
Direct customer deposits as at 31 December 2004 totalled Euro 5,234 million,
with an increase of 18.9% compared to the 2003 result.
DIRECT DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Due to customers:
- current accounts
- savings deposits
- other accounts
- factoring transactions
- REPOS
Securities issued:
- bonds
- CDs
- discounting of commercial papers
- other securities
Deposits in administration
3,088
2,665
249
6
12
155
2,137
1,900
191
0
45
10
2,482
2,063
250
16
0
153
1,908
1,617
134
117
40
13
24.4%
29.2%
-0.4%
-60.1%
n.s.
1.6%
12.0%
17.5%
43.0%
-100.0%
13.5%
-26.1%
59.0%
50.9%
4.8%
0.1%
0.2%
3.0%
40.8%
36.3%
3.7%
0.0%
0.9%
0.2%
56.4%
46.9%
5.7%
0.4%
0.0%
3.5%
43.3%
36.7%
3.0%
2.7%
0.9%
0.3%
DIRECT CUSTOMER DEPOSITS
5,234
4,403
18.9%
100.0%
100.0%
directors’ report on operations 46
The significant progress shown by the aggregate as a whole was produced both
by current accounts, up by 29.2%, and by the securities issued, which mainly rose
due to the considerable amount of bond issues, with a net flow during the year
of over Euro 283 million.
As at 31 December 2004 the aggregate was made up of current accounts as to
50.9% and by savings deposits as to 4.8%. 36.3% and 3.7% were represented by
bonds and CDs respectively, while the remaining part included customer REPOS
of 3%.
These important results were achieved with the effective contribution of all
Group companies.
In particular, the Parent Company confirmed a very positive trend for 2004,
recording growth of 18.3%.
Similarly positive was the growth in volumes collected by the Banca di Bergamo,
which closed with a 38.6% increase, and the Banca Meridiana, with a 17.4%
increase.
Finally, the Banca Italo-Romena almost doubled its customer deposits, exceeding
Euro 100 million.
DIRECT DEPOSITS
1997
(in euro million)
1,064
1998
1,154
1999
1,249
2000
1,764
2001
2,021
2002
2,429 162
2003
519
38
3,422
2004
333
611
4,047
0
1,000
Veneto Banca
2,000
Banca di Bergamo
3,000
4,000
Banca Meridiana
NOTE: The figures are shown gross of intra-Group relations.
50
461
718
100
5,000
Banca Italo-Romena
6,000
BREAKDOWN
OF CUSTOMER DEPOSITS
AS AT 31/12/2004
2.7 Factoring
transactions
3.5 REPOS
3.0 CDs
36.7 Bonds
5.7 Savings deposits
(%)
0.4 Other accounts
0.9 Other securities
0.3 Deposits
in admin.
46.8 Current
accounts
6.1.2.3. INDIRECT DEPOSITS
As at 31 December 2004 indirect deposits, calculated on the basis of year-end
current values for the component financial activities totalled Euro 4,103 million,
with an increase of 9.3% compared to the figure for the end of 2003.
INDIRECT DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Deposits in administration
Government bonds
Bonds
Shares and other securities
Managed savings
Funds
Assets management
Life insurance
2,356
798
1,090
468
1,747
1,207
107
434
2,114
701
1,020
393
1,641
1,184
108
349
11.4%
13.9%
6.8%
18.8%
6.5%
2.0%
-1.7%
24.4%
57.4%
19.5%
26.6%
11.4%
42.6%
29.4%
2.6%
10.6%
56.3%
18.7%
27.2%
10.5%
43.7%
31.5%
2.9%
9.3%
TOTAL INDIRECT DEPOSITS
4,103
3,755
9.3%
100.0%
100.0%
Despite the abovementioned improvement in the financial and economic
scenario, the impact of the element in administration remains high. At year end
this aggregate totalled Euro 2,356 million with an increase of 11.4% compared to
December 2003 and an impact of 57.4% on the total.
INDIRECT DEPOSITS
1997
636
1998
366
547
1999
(in euro million)
766
1,343
512
1,512
824
2000
1,243
2001
1,348
2,114
2003
0
500
1,000
Administered savings
1.4 Theft/Fire/
Non-life
1.9 Unit Claris Vita
5.1 Motor/
other
27.9 Life/Pension fund
1,641
370
2,356
2004
PREMIUM COLLECTION 2004
BY PRODUCT
TYPE
(%)
1,452
2,022
2002
1.500
2,000
1,747
2,500
3,000
3,500
4,000
4,500
Managed savings
0.5 Death/LTC
0.4 Accident/Illness
0.1 Guarantee
62.7 Index Claris Vita
With regard to insurance products which, as mentioned, made a positive
contribution to development of the aggregate, ending the financial year with an
increase of over 24%, the overall collection of premiums for the year related to life
products and pension funds for about 28%, while more financial products such
as the index and unit linked products represented more than 64%.
directors’ report on operations 47
The managed savings component, on the other hand, reached Euro 1,747 million,
marking an increase of 6.5%.
In terms of individual items under managed savings, mutual investment funds
increased moderately and life insurance recorded an excellent result. However,
the assets managed as funds remained almost unchanged.
The growth in indirect deposits was caused by the positive trend in similar
aggregates relating to Veneto Banca and the Banca di Bergamo, which increased
by 7.6% and 60.3% respectively.
However there was a reduction of 9.4% for the Banca Meridiana, essentially
caused by the transformation of bonds issued by the former Banca Mediterranea
into own bonds.
BREAKDOWN OF INDIRECT DEPOSITS
1997
(in euro million)
1,002
1998
1,313
1999
1,855
2,336
2000
2,545
2001
56
360
3,051
2002
3,282
2003
150
370 182
3,533
2004
0
500
1,000
Veneto Banca
1,500
2,000
2,500
Banca Meridiana
3,000
335
3,500
292
4,000
4,500
Banca di Bergamo
directors’ report on operations 48
NOTE: The figures are shown gross of intra-Group relations.
6.1.3. CREDIT MANAGEMENT
Although the economic recovery did not give rise to a clear reversal in the local
economic and production cycle, the Group’s activities continued to thrive.
As at 31 December 2004 loans to customers totalled Euro 5,207 million,
highlighting an increase of 19.2% compared to the end of the previous financial year.
LOANS TO CUSTOMERS
1997
941
1998
1,107
1999
(in euro million)
1,383
2,001
2000
2,622
2001
3,673
2002
4,368
2003
5,207
2004
0
1,000
2,000
3,000
4,000
5,000
6,000
The contribution made by the various corporate components to overall growth
was widespread and certainly significant.
Among others, there was a particularly sparkling performance of the Banca
Meridiana and the Banca Italo-Romena with respective increases of 56.3% and
74.5%.
LOANS TO CUSTOMERS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Veneto Banca
Banca di Bergamo
Banca Italo-Romena
Banca Meridiana
Claris Factor
Claris Leasing
VIFS
Adjustments and cancellations
4,115
490
167
449
115
317
13
-458
3,551
377
96
287
114
266
13
-336
15.9%
29.9%
74.5%
56.3%
1.0%
19.1%
0.0%
36.4%
79.0%
9.4%
3.2%
8.6%
2.2%
6.1%
0.2%
-8.8%
81.3%
8.6%
2.2%
6.6%
2.6%
6.1%
0.3%
-7.7%
TOTAL LOANS TO CUSTOMERS
5,207
4,368
19.2%
100.0%
100.0%
LOANS TO CUSTOMERS (in Euro million)
2004
Current accounts
Import-export loans
Assets sold from the trading
portfolio
Mortgage loans
Unsecured loans
Non-regulated subsidies on current
account and other credits
Non-performing loans
Credits for leasing transactions
Credits for factoring transactions
Other technical forms
Provisions for adjustment
of the assets
Loans to customers, net
Credit commitments
TOTAL LOANS TO CUSTOMERS
2003
% var.
% for '04
% for '03
1,591
225
1,536
218
3.6%
3.2%
30.6%
4.3%
35.2%
5.0%
41
1,351
168
61
758
189
-33.3%
78.3%
-11.0%
0.8%
26.0%
3.2%
1.4%
17.4%
4.3%
1,392
38
317
113
5
1,229
32
261
91
18
13.3%
19.9%
21.3%
23.8%
-69.7%
26.7%
0.7%
6.1%
2.2%
0.1%
28.1%
0.7%
6.0%
2.1%
0.4%
-36
5,207
296
-24
4,368
259
38.6%
19.2%
14.2%
-0.6%
100.0%
-0.6%
100.0%
5,503
4,627
18.9%
A study of the other items shows the modest trend recorded by current accounts
and foreign loans, while there was a more marked growth in subsidies and other
credits, up by 13.3%, and in loans for leasing and factoring transactions, up by
21.3% and 23.8% respectively.
Credit commitments also recorded a positive trend, totalling 14.2%, caused
entirely by commercial commitments, which went from Euro 207.2 to 250.6
million over the twelve month period.
6.1.4. DOUBTFUL LOANS TO CUSTOMERS
In 2004, although there were no significant improvements in the operational
scenario, there was no significant deterioration of credit quality.
The Bank’s constantly high level of attention towards the supply of credit, and
the continual credit risk classification and monitoring activities regarding
relations with customers of Veneto Banca and the other Group Companies,
together with the solidity in the local economic and production system and the
quality of businesses, confirmed the excellent level of the degree of risk in the
loans portfolio achieved in recent years, one of the lowest in the Italian banking
system.
5 Source: ABI – Monthly Outlook – March
2005
As at 31 December 2004 the ratio of net non-performing loans to loans equalled
0.72%, compared with the average of 2.03% recorded by Italian banks 5.
directors’ report on operations 49
During the year, growth in the aggregate was led mainly by the medium-long
term component, within which mortgage loans played the most significant part,
recording an increase of over 78%.
Following a change to the criteria for classifying watch-list entries, on the other
hand these increased. Their impact on total loans to customers was 2%. Also in
this case, this value is still considerably below the similar figure for the banking
6
system, recorded at 6.5% .
DOUBTFUL LOANS (in Euro million)
2004
2003
% var.
Non-performing loans
of which interest on delayed payment
Watch-list
Restructured loans
Total doubtful loans
Performing loans
37.9
0.2
60.2
8.2
106.4
5,100.3
31.6
1.7
30.0
0.0
61.6
4,305.9
19.9%
-87.9%
100.9%
n.s.
72.7%
18.4%
Total loans to customers
5,206.7
4,367.5
19.2%
-1
%non-performing loans (*)/loans
0.72%
0.69%
0.04%
(*) net of interest on delayed payment
directors’ report on operations 50
6.1.5. SECURITIES PORTFOLIO AND TREASURY
During 2004, the financial markets continued, though to a lesser degree, along
the positive trend that began during the previous financial year. Simultaneously,
the international economic cycle recorded healthy growth, although it slowed
down towards the end of the year compared to growth during the first few
months of 2004, and there were different rates of growth between the main
economies.
Against this macroeconomic scenario, the Group maintained a limited risk profile
while simultaneously attempting to seize the opportunities offered by the
financial markets, especially through trading and switching on stock and bond
markets.
With regard to the Parent Company, the stock in the trading portfolio was almost
unchanged, while the assets of the Irish subsidiary, which is the financial branch
operating on the international markets, saw an increase of 42% compared to the
previous year.
This increase largely depended on the subsidiary’s need to acquire a ceiling of
variable rate securities to meet the needs of the Group banks as regards REPOS
transactions with ordinary customers. Despite the increase in stock, the market
risks of this portfolio were nevertheless kept at limited levels, far lower than the
assigned limits.
The investment portfolio, referring to both the Parent Company and Veneto
Ireland Financial Services, fell slightly compared to the previous year.
The market value of the positions recorded a considerable improvement, also due
to the shrinkage of the credit spreads and the reduction in interest rates, going
from the capital loss of 2,021,628 recorded at the end of 2003 to a capital gain of
Euro 2,936,670.
Regarding the investment portfolio of the Irish subsidiary, the improvement
compared to the end of 2003 was equally significant thanks to the generalised
shrinkage of the credit spreads. Capital losses went from Euro 3,599,475
to Euro 474,239.
6 Source: Prometeia
PORTFOLIO OF OWN SECURITIES (in Euro million)
2004
2003
% var.
% for '04
% for '03
VENETO BANCA
Investment securities
Securities
Funds
Trading securities
Securities
Equity shares
130.2
127.0
3.2
203.6
201.0
2.6
138.9
136.4
2.6
193.1
188.4
4,7
-6.3%
-6.9%
25.0%
5.4%
6.7%
-45.5%
39.0%
41.8%
61.0%
58.2%
TOTAL OWN SECURITIES
333.8
332.0
0.5%
VENETO IRELAND FINANCIAL
SERVICES
Investment securities
Securities
Funds
Trading securities
Securities
Equity shares
Funds
101.7
93.8
7.9
724.8
357.2
2.6
365.0
103.0
94.8
8.2
561.4
250.3
3.1
308.0
-1.3%
-1.1%
-3.3%
29.1%
42.7%
-15.2%
18.5%
12.3%
15.5%
87.7%
84.5%
TOTAL PORTFOLIO OF
OWN SECURITIES
826.4
664.4
24.4%
The following table shows the net year-end position for 2004 and 2003, relating
to amounts due and loans to banks.
INTERBANK RELATIONS (in Euro million)
2004
2003
% var.
VENETO BANCA
Loans to banks
Due to banks
Net liquidity position
366.9
-495.2
-128.3
279.1
-684.2
-405.1
31.5%
-27.6%
-68.3%
BANCA DI BERGAMO
Loans to banks
Due to banks
Net liquidity position
40.4
-31.5
8.9
24.5
-23.5
1.0
64.7%
34.0%
758.8%
BANCA MERIDIANA
Loans to banks
Due to banks
Net liquidity position
296.3
-16.6
279.7
350.8
-4.1
346.7
-15.5%
306.6%
-19.3%
BANCA ITALO-ROMENA
Loans to banks
Due to banks
Net liquidity position
71.1
-111.9
-40.7
29.0
-50.7
-21.6
144.9%
120.7%
88.2%
Loans to banks
Due to banks
289.2
-325.9
250.0
-444.2
15.7%
-26.6%
-36.8
-194.2
-81.1%
CONSOLIDATED NET LIQUIDITY POSITION
The year end values show the clear improvement achieved in Veneto Banca’s net
liquidity position on the interbanking market compared to the previous year.
This result was mainly achieved due to the issuing on the Euromarket of a senior
bond loan of Euro 250 million and a Lower Tier2 subordinated loan for Euro 100
million.
According to the Group’s Financial Risk Regulations, the treasury activities for all
the banks in the Group, in both Euros and in the main foreign currencies, is
carried out at Veneto Banca’s Treasury Service, in line with the principles of
centralisation.
directors’ report on operations 51
6.1.5.1. TREASURY ACTIVITIES
During 2004 activity on the interbanking market for deposits and currency swaps
was carried out by the Treasury Service to cover liquidity requirements according
to efficiency criteria.
The decision for integrated liquidity management comes from the need to limit
the interest rate risk for subsidiaries and to reduce adjustment costs.
As for the previous financial year, Banca Meridiana also maintained a positive
liquidity position for 2004, while Banca di Bergamo was a net borrower.
Finally, the growth of activities for the Banca Italo-Romena led to a further
absorption of liquidity from the Parent Company by opening credit in Euros and
Dollars, thus subject to market conditions.
• Loans/deposits ratio
The liquidity position continued to benefit from a fully balanced ratio between
customer loans and deposits, also for 2004.
As at 31 December 2004 the ratio was recorded at 99.5%, showing a slight
increase on the previous 99.2%.
GROUP TREND IN LOANS/DIRECT DEPOSITS
6,000
140%
120%
5,000
100%
directors’ report on operations 52
4,000
80%
3,000
60%
2,000
40%
1,000
20%
0
0
1997
Loans
1998
1999
2000
Direct deposits
2001
2002
Loans/Direct deposits (scale on right)
6.2. EQUITY AND CAPITAL ADEQUACY
6.2.1. SHAREHOLDERS’ EQUITY
As at 31 December 2004 consolidated shareholders’equity including profit for the
year and the reserve for general banking risk, totalled Euro 661.9 million
compared with the Euro 558.9 million for the end of 2003.
The increase was mainly caused by the allocation to the reserve for general
banking risk of the capital gain arising from the sale of 80% of the capital held in
the insurance company Claris Vita and the increased profit for the year.
During December 2004, a new subordinated loan of Euro 100 million was issued,
taking the total shareholders’ equity to Euro 844 million, with an increase of
31.6% compared to December 2003.
2003
2004
SHAREHOLDERS' EQUITY (in Euro thousand)
2004
2003
% var.
Reserve for general banking risks
Negative consolidation differences
Minority interests
Share capital
Issue premiums
Reserves
legal reserve
other reserves
Revaluation reserves
Profit/loss brought forward
Profit for the year
39,057
40
19,956
98,647
304,798
138,499
34,860
103,639
5,554
0
55,352
6,057
40
19,071
95,069
281,016
111,538
30,583
80,955
5,554
-53
40,646
544.8%
0.0%
4.6%
3.8%
8.5%
24.2%
14.0%
28.0%
0.0%
-100.0%
36.2%
Total shareholders' equity
661,903
558,938
18.4%
Subordinated liabilities
181,814
82,065
121.5%
TOTAL SHAREHOLDERS' EQUITY AND
SUBORDINATED LIABILITIES
843,717
641,003
31.6%
CONSOLIDATED SHAREHOLDERS’ EQUITY
1997
229
1998
235
1999
(in euro million)
242
108
271
2001
155
391
2002
155
428
2003
559
2004
370
82
662
0
100
200
Shareholder’s equity
300
400
500
600
182
700
800
900
Subordinated liabilities
The Parent Company’s share capital as at 31 December 2004 was made up of
32,882,038 shares with a unit face value of Euro 3.00 for a total of Euro 98,646,114,
distributed between 16,041 shareholders compared with 15,636 at the end of 2003.
6.2.2. CAPITAL FOR SUPERVISORY PURPOSES AND
MINIMUM RATIOS
As at 31 December 2004 capital for supervisory purposes amounted to Euro 674
million, with an increase of Euro 218 million compared to the previous twelve months.
Tier I capital – made up of capital, the reserve for general banking risk and
reserves, net of intangible fixed assets and goodwill – amounted to Euro 527
million, with an increase of Euro 124 million on December 2003.
Tier II capital, equal to Euro 185 million, increased as a result of the new
subordinated loan by about Euro 100 million.
CAPITAL FOR SUPERVISORY PURPOSES (in Euro million)
2004
2003
% var.
Tier I capital
Tier II capital
Items to be deducted
527
185
-38
403
86
-33
30.6%
115.9%
14.7%
CAPITAL FOR SUPERVISORY PURPOSES
674
456
47.8%
directors’ report on operations 53
2000
Compared to values for the Parent Company, the Group’s equity include entries
typical of consolidation operations, in other words positive and negative
consolidation differences, positive or negative differences from the valuation of
stakes in shareholders’ equity, and positive or negative minority interests.
TREND IN CAPITAL FOR SUPERVISORY PURPOSES
(in euro million)
700
674
650
600
550
527
500
487
456
450
414
403
400
355
350
333
300
250
200
1998
277
243
227
223
214
220
1999
Tier I capital
2000
2001
2002
2003
2004
Total capital
directors’ report on operations 54
Weighted risk assets also registered a growing trend, going from Euro 5,447 to
6,261 million, corresponding to an increase of 14.9%.
The exposure to credit and market risks also demonstrated a limited increase,
registering at Euro 501 million.
TREND IN WEIGHTED RISK ASSETS
(in euro million)
6,500
6,261
6,000
5,447
5,500
5,543
5,025
5,000
5,022
4,500
4,303
4,000
3,500
3,152
3,000
3,048
2,500
2,325
2,000
1,500
1,000
1,642
1,369
1,264
1998
Credit risks
2,245
1,542
1999
2000
2001
2002
2003
2004
Total risks
In view of the equity trends shown above and the trend in risk activities
considered as a whole, the Group’s capital position recorded a net improvement
compared to the end of 2003, showing a surplus of Euro 173 million.
SHAREHOLDERS’ EQUITY
1998
110
114
1999
116
111
2000
(in euro million)
169
186
235
252
2001
402
2002
12
436
2003
20
501
2004
0
100
200
Minimum requirements
300
400
500
173
370
600
700
800
Shareholders’ equity
The positive trend recorded by the overall Shareholders’ equity position was
reflected in the clear progress in equity increase ratios.
Tier I went from 7.40% at the end of 2003 to 8.41%, while the Total Risk Ratio
ended 2004 at 10.76%.
STANDARD & POOR’S RATING
2004
2003
Short term debt
Medium-long term debt
A-2
BBB+
A-2
BBB+
Rating stability, although against an operational background that in recent years
has certainly suffered from the effects of the economic standstill, expresses the
confidence shown in the Group’s ability to deal successfully with more
problematic situations, maintaining its solidity and profitability at entirely
satisfactory levels.
We therefore consider that taking into account the equity, profitability, credit
quality and the modest tendency to risk, as well as the results of the recent
inspection by the Supervisory Authority, there is the possibility of receiving an
even higher rating.
6.3. PROFITABILITY
The Veneto Banca Group ended the financial year with a net consolidated profit
of Euro 55.4 million, up by 36.2% compared to the 40.6 million for the previous
year.
The aggregation of the economic figures for the Group companies, the
consolidation adjustments and the cancellation of intra-Group relations gives the
following reclassified profit and loss account:
directors’ report on operations 55
6.2.3. RATING
Standard & Poor’s also confirmed the positive rating assigned to the Veneto
Banca Group for 2004.
RECLASSIFIED PROFIT AND LOSS ACCOUNT (in Euro thousand)
2004
2003
% var.
Financial spread
Dividends
Interest margin
Income from services, net
Profit on financial transactions
Other operating income, net
Earning margin
Operating expenses:
personnel costs
other administrative expenses
Gross operating profit (loss)
Amortisation and depreciation
Provisions for risks and charges
Provisions and write-backs
Write-downs of financial
fixed assets
Profit/loss eq. investments valued
by the equity method
Profit on ordinary activities
Balance of extraordinary operations
Change in reserve for general
banking risk
Income taxes for the year
Minority interests
NET PROFIT FOR THE YEAR
% for’04(*)
% for’03(*)
11.8%
6.4%
11.6%
15.7%
-6.2%
-4.1%
8.7%
7.8%
7.9%
7.6%
10.2%
11.4%
528.5%
5.6%
57.2%
2.1%
59.3%
21.6%
9.8%
9.2%
100.0%
-57.5%
-33.7%
-23.8%
42.5%
-7.8%
-1.0%
-9.7%
55.7%
2.2%
57.8%
20.3%
11.4%
10.5%
100.0%
-58.1%
-34.0%
-24.1%
41.9%
-7.6%
-0.2%
-10.0%
-2,174 -139.0%
0.3%
-0.8%
163,699 146,455
6,067
5,700
169,766 152,155
61,832
53,428
28,145
30,015
26,416
27,549
286,159 263,147
-164,679 -152,817
-96,461 -89,415
-68,218 -63,402
121,480 110,330
-22,421 -20,127
-2,960
-471
-27,776 -26,300
848
4,958
74,129
40,234
6,371
67,629
-401
-22.2%
9.6%
n.s.
1.7%
25.9%
14.1%
2.4%
25.7%
-0.2%
-33,000
-25,061
-950
0
-25,893
-689
n.s.
-3.2%
37.9%
-11.5%
-8.8%
-0.3%
0.0%
-9.8%
-0.3%
55,352
40,646
36.2%
19.3%
15.4%
directors’ report on operations 56
(*) The % impact is measured on the earning margin
All Group companies contributed to this performance, although to varying
degrees. The increase in the contribution to the overall result of the Banca ItaloRomena should be mentioned in particular, from 4% to 6%, Banca Meridiana,
from 1.3% to 3.7%, and Claris Leasing, up from 1.6% to 3.7%.
CONSOLIDATED PROFIT (in Euro thousand)
Bank / Company
2004
Veneto Banca
Banca di Bergamo
Banca Italo-Romena
Banca Meridiana
Claris Factor
Claris Leasing
VIFS
Profit/loss eq. investments valued
by the equity method
Other consolidation adjustments
and cancellations
GROUP TOTAL
2003
% var.
% for '04
% for '03
45,658
1,712
3,299
2,006
2,594
2,009
11,278
40,077
1,394
1,640
517
2,014
648
11,082
13.9%
22.8%
101.1%
287.9%
28.8%
210.1%
1.8%
82.5%
3.1%
6.0%
3.6%
4.7%
3.6%
20.4%
98.6%
3.4%
4.0%
1.3%
5.0%
1.6%
27.3%
4,958
6,371
-22.2%
9.0%
15.7%
-18,162
-23,098
-21.4%
-32.8%
-56.8%
55,352
40,646
36.2%
100.00%
100.00%
On the contrary, the consolidation adjustments went down, going from Euro 23.1
to 18.2 million. This positive result was however partially offset by the reduction
of 22.2% in the profits from companies valued by the equity method.
PROFIT/LOSS OF COMPANIES VALUED BY THE EQUITY METHOD (in Euro thousand)
2004
2003
% var.
% for '04
% for '03
Claris Assicurazioni
Claris Broker
Claris Vita
Immobiliare Italo Romena
Palladio Finanziaria
Sintesi 2000
79
-42
1,720
18
3,210
-27
21
2
4.394
5
1.977
-28
276.2%
n.s.
-60.9%
260.0%
62.4%
-3.6%
1.6%
-0.8%
34.7%
0.4%
64.7%
-0.5%
0.3%
0.0%
69.0%
0.1%
31.0%
-0.4%
TOTAL PROFIT/LOSS OF
COMPANIES VALUED BY
THE EQUITY METHOD
4,958
6,371
-22.2%
100.0%
100.0%
While the profit for Claris Vita went down from Euro 4.4 to 1.7 million, there was
an increase in the profit of Palladio Finanziaria, whose share for the Veneto Banca
Group went from 2 to Euro 3.2 million.
Adjustments to the positive consolidation differences were largely stable.
Although there were changes to the breakdown, there were no significant
changes in the overall adjustment of intra-Group dividends.
DIVIDEND ADJUSTMENTS (in Euro thousand)
2004
2003
% var.
Claris Factor
Claris Leasing
Claris Vita
Palladio Finanziaria
Veneto Ireland Financial Services
-1,900
-200
-975
-1,247
-11,782
-1,875
0
-4,029
-520
-9,599
1.3%
-75.8%
139.8%
22.7%
TOTAL DIVIDEND ADJUSTMENTS
-16,104
-16,023
0.5%
6.3.1. INTEREST MARGIN
The financial spread rose by 11.8%, going from Euro 146.5 to 163.7 million,
thanks to the growth in traded volumes that compensated well for the reduction
in the rates bracket.
The interest margin including dividends amounted to Euro 169.8 million, up by
11.6% compared to the Euro 152.2 million for the previous financial year.
The contribution of the Parent Company Veneto Banca was around 70.2%, Banca
Meridiana 15.1%, Banca di Bergamo 7.7%, Veneto Ireland Financial Services
5.7%, Banca Italo-Romena 4.7%. Finally, the contributions of Claris Factor and
Claris Leasing were respectively 2.9% and 2.7%. Adjustments and cancellations
had an impact of 8.9%.
6.3.2. EARNING MARGIN
The earning margin, increasing by around 9%, came in at Euro 286.2 million
compared to the 263.1 for 2003. The Parent Company’s contribution increased up
to 73.1%, while the contributions of the other Group companies generally
decreased.
Contributing to this result was the good performance in service margin, going
from Euro 53.4 to Euro 61.8 million.
NET COMMISSIONS AND FEES (in Euro thousand)
2004
2003
Guarantees provided
Management, brokering and
consulting services
Collection and payment services
Servicing for securitisation
activities
Other services
TOTAL SERVICE MARGIN
% var.
% for '04
% for '03
2,762
2,240
23.3%
4.5%
4.2%
26,161
9,560
21,299
9,269
22.8%
3.1%
42.3%
15.5%
39.9%
17.3%
254
23,096
72
20,548
252.8%
12.4%
0.4%
37.4%
0.1%
38.5%
61,833
53,428
15.7%
100.0%
100.0%
directors’ report on operations 57
Dividends reached Euro 6.1 million compared to the Euro 5.7 million for 2003.
Euro 899 thousand of these come from equity investments in companies outside
the Group.
On the contrary, profits on financial transactions were largely stable while
remaining at significant levels, going from Euro 30 to 28.1 million, together with
other net income, down from Euro 27.5 to 26.4 million.
6.3.3. OPERATING EXPENSES
Costs increased overall by 7.8%, going from Euro 152.8 to Euro 164.7 million,
due to the impact of increases in personnel costs, which rose from Euro 89.4
to Euro 96.5 million, and other administrative expenses, rising from Euro 63.4
o Euro 68.2 million.
OTHER ADMINISTRATIVE EXPENSES (in Euro thousand)
2004
2003
% var.
% for '04
% for '03
Real estate costs
Information technology
Security
Communications
Misc. expenses
Other costs
Indirect taxation and charges
9,955
16,929
1,638
12,579
14,462
2,469
10,186
9,977
16,075
1,585
10,529
13,033
3,128
9,075
-0.2%
5.3%
3.3%
19.5%
11.0%
-21.1%
12.2%
14.6%
24.8%
2.4%
18.4%
21.2%
3.6%
14.9%
15.7%
25.4%
2.5%
16.6%
20.6%
4.9%
14.3%
TOTAL OTHER ADMINISTRATIVE
EXPENSES
68,218
63,402
7.6%
100.0%
100.0%
directors’ report on operations 58
In terms of the contribution to the consolidated figure, Veneto Banca’s operating
expenses represented 72% of Group operating expenses. The impact for the other
main Companies was 13.5% for Banca Meridiana, 7.8% for Banca di Bergamo
and 3.7% for Banca Italo-Romena.
The cost/income ratio, which is a good indicator of the Company’s efficiency, was
61.4%, substantially in line with last year’s result. The result achieved is basically
close to the banking system average.
6.3.4. PROFIT (LOSS) ON ORDINARY ACTIVITIES
Supported by the positive income trend, which more than compensated for the
growth in costs, the gross operating profit (loss) registered at Euro 121.5 million,
up by 10.2% on the 110.3 million of the previous year.
As far as ordinary activities are concerned, related profit reached Euro 74.1
million, against the 67.6 million for 2003, after having calculated amortisations of
Euro 22.4 million, provisions for risks and charges of Euro 3 million, provisions
and net write-downs of loans of Euro 27.8 million, net write-backs of financial
fixed assets of Euro 848 thousand and finally profits attributable to equity
investments valued by the equity method of 5 million.
6.3.5. EXTRAORDINARY OPERATIONS AND NET PROFIT
Extraordinary operations recorded a positive result, following the sale of 80% of
Claris Vita, which was entirely absorbed by the provision to the reserve for
general banking risk, of Euro 33 million.
After the allocation to the provision for taxation of Euro 25.1 million and the
retrocession of minority interests of Euro 950 thousand, consolidated net
profit amounted to Euro 55.4 million, up by 36.2% compared to the 40.6
million for 2003.
CONSOLIDATED NET PROFIT
1997
(in euro million)
13.8
1998
15.8
1999
18.6
2000
30.7
41.8
2001
2002
19.6
40.6
2003
55.4
2004
0.0
10.0
20.0
30.0
40.0
50.0
60.0
7. REPORT ON PARENT COMPANY’S
OPERATIONS
VENETO BANCA – PERFORMANCE HIGHLIGHTS
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro million)
Gross banking income
Total deposits
Direct deposits
Indirect deposits
of which: managed savings
of which: administered savings
Loans to customers
Performing assets
Total assets
Shareholders’ equity
(net of subordinated loans)
Shareholders’ equity
(including subordinated loans)
2004
2003
abs. var.
% var.
119,233
210,146
-118,563
60,479
45,658
111,293
195,149
-107,847
60,145
40,077
7,940
14,997
-10,716
334
5,581
7.13%
7.68%
9.94%
0.55%
13.93%
2004
2003
abs. var.
% var.
11,695
7,580
4,047
3,533
1,541
1,992
4,115
5,226
5,527
10,255
6,704
3,422
3,282
1,464
1,818
3,551
4,615
4,899
1,440
876
625
250
76
174
564
611
628
14.03%
13.06%
18.27%
7.63%
5.22%
9.57%
15.87%
13.25%
12.82%
628
538
89
16.58%
809
620
189
30.47%
directors’ report on operations 59
The positive result achieved during the year has enabled asset profitability to
be maintained at very attractive levels, with a ROE registering at 9.8%, on the
increase compared to the 8.8% for the previous year and well positioned with
regard to the banking system average. This result is in line with the Company’s
strong desire to achieve profits enabling a balanced, and especially longlasting, relationship to be maintained with the customers and the area of
operation.
STRUCTURAL RATIOS (%)
Direct deposits/Total assets
Loans to customers/Total assets
Loans to customers/Direct deposits
2004
2003
abs. var.
% var.
73.23%
74.44%
101.66%
69.85%
72.48%
103.76%
3.37%
1.96%
-2.10%
4.83%
2.71%
-2.02%
2004
2003
abs. var.
% var.
0.69%
0.94%
0.71%
0.60%
-0.02%
0.34%
-2.92%
56.11%
3.50%
4.04%
-0.54%
-13.27%
2004
2003
abs. var.
% var.
8.45%
1.88%
2.28%
4.02%
0.87%
56.74%
61.05%
9.14%
2.19%
2.41%
4.23%
0.87%
57.03%
59.28%
-0.69%
-0.31%
-0.13%
-0.21%
0.01%
-0.29%
1.77%
-7.50%
-13.95%
-5.40%
-4.91%
0.60%
-0.51%
2.98%
2004
2003
abs. var.
% var.
10.71%
13.53%
10.26%
11.40%
0.45%
2.13%
4.39%
18.68%
2004
2003
abs. var.
% var.
1,138
100
3,616
6,661
10,276
185
1,063
99
3,340
6,307
9,647
184
75
1
275
354
629
1
7.06%
1.01%
8.24%
5.61%
6.52%
0.59%
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans
to customers
Net watch-lists/Loans to customers
Net non-performing loans/Shareholders’
equity
PROFITABILITY RATIOS (%)
R.O.E.
R.O.A.
Interest margin/Performing assets
Earning margin/Performing assets
Net profit/Performing assets
Interest margin/Earning margin
Cost/Income ratio
EQUITY RATIOS (%)
Tier I
Solvency ratio
directors’ report on operations 60
STRUCTURAL AND PRODUCTIVITY
RATIOS
Average no. of employees
Number of bank branches
Customer loan per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
7.1. THE OPERATING PERFORMANCE
7.1.1. FINANCIAL AGGREGATES
In 2004 the Bank recorded highly satisfactory profits, closing the financial year
with a gross banking income up by 14%.
The overall aggregate reached Euro 11,695 million, with significant increases in
all sectors.
GROSS BANKING INCOME (in Euro million)
2004
2003
% var.
Loans to customers
Direct deposits
Indirect deposits
4,115
4,047
3,533
3,551
3,422
3,282
15.9%
18.3%
7.6%
11,695
10,255
14.0%
GROSS BANKING INCOME
7.1.1.1. ASSET MANAGEMENT
As at 31 December 2004 the assets managed increased by 13.1%, going from
6,704 million at the end of 2003 to Euro 7,580 million.
TOTAL CUSTOMER DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
Due to customers
Securities issued
Deposits in administration
Direct customer deposits
Managed savings
Administered savings
Indirect customer deposits
2,125
1,917
5
4,047
1,541
1,992
3,533
1,729
1,691
2
3,422
1,464
1,818
3,282
22.9%
13.4%
120.7%
18.3%
5.2%
9.6%
7.6%
53.4%
TOTAL DEPOSITS
7,580
6,704
13.1%
46.6%
Although both are on the increase, also for 2004 the direct sector shows more
vitality if compared to indirect deposits, confirming that there is still a high
degree of uncertainty among savers as regards savings instruments with a higher
level of risk.
The trend analysis of the deposits structure shows a further reduction of
indirect deposits of more than 3 percentage points, also for the year in
question.
% BREAKDOWN OF CUSTOMER DEPOSITS
2004
2003
2002
2001
2000
1999
Direct deposits
Indirect deposits
44.32
55.68
44.26
55.74
43.02
56.98
40.23
59.77
53.39
46.61
51.04
48.96
7.1.1.2. DIRECT DEPOSITS
Direct customer deposits as at 31 December 2004 totalled Euro 4,047 million,
with an increase of 18.3% compared to the total recorded at the end of 2003.
DIRECT DEPOSITS
1997
(in euro million)
1,064
1998
1,154
1999
2000
1,764
2001
2,021
2002
2,429
2003
3,422
2004
4,047
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
The aggregate trend mainly depended on the increase marked by current
accounts, up by 22.2%, and the securities issued, where the increase was mainly
due to the issuing of own bonds, which were in excess of Euro 1,747 million at
the end of the financial year.
DIRECT DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Due to customers:
current accounts
savings deposits
on maturity or with notice
of which REPOS
Securities issued:
bonds
CDs
other securities
Deposits in administration
2,125
1,727
134
264
121
1,918
1,747
171
5
1,729
1,414
128
188
129
1,691
1,544
107
40
2
22.9%
22.2%
4.8%
40.5%
-5.9%
13.4%
13.1%
59.9%
-100.0%
120.7%
52.5%
42.7%
3.3%
6.5%
3.0%
47.4%
43.2%
4.2%
0.0%
0.1%
50.5%
41.3%
3.7%
5.5%
3.8%
49.4%
45.1%
3.1%
1.2%
0.1%
DIRECT CUSTOMER DEPOSITS
4,047
3,422
18.3%
directors’ report on operations 61
1,249
As at 31 December 2004 the aggregate was therefore made up as to 46% of
current accounts and savings deposits; 43.2% and 4.2% represented, respectively,
bonds and CDs, while the remaining 6.5% included customer REPOS as to
approximately 3%.
With regard to the breakdown of the previous financial year, the further
reinforcement in current accounts and securities can be seen, compared to a
reduction in the entries on maturity.
BREAKDOWN
OF CUSTOMER DEPOSITS
AS AT 31/12/2004
4 CDs
(%)
0 Deposits
in admin.
3 Savings deposits
4 Others on
maturity or with
notice
These trends therefore had an impact on the residual life of the aggregate,
causing a growing impact on the entries falling due within 18 months and a slight
shift in favour of deposits on demand. On the other hand, the long term sector
appears to be clearly falling.
% BREAKDOWN BY RESIDUAL LIFE
CUSTOMER DEPOSITS
2004
2003
2002
2001
2000
1999
1998
1997
On demand
Within 18 months
Over 18 months
52.02
16.28
31.70
47.50
22.32
30.18
45.07
14.54
40.39
50.91
17.58
31.51
48.89
26.93
24.18
46.78
27.96
25.26
46.04
25.85
28.11
45.12
22.94
31.94
3 REPOS
43 Current
accounts
43 Bonds
directors’ report on operations 62
• Breakdown by area of activity
The breakdown of deposits according to the customers’area of business confirms
the high impact of households. As at 31 December 2004 they amounted to 55.7%,
while business and non-financial companies represented 31.7%.
• Distribution by business province
The geographic distribution by customer area of residence shows, on the one
hand, the continuing strong attachment to their origins, on the other hand the
significant opening up towards the more recently settled provinces, which is
further confirmation of the positive outcome of the development plan.
CUSTOMER DEPOSITS – distribution by customer area of residence
% for 2004
% for 2003
Treviso
Vicenza
Rome
Milan
Venice
Pordenone
Padua
Other provinces
TOTAL FOR ITALY
54.6
10.1
6.3
5.5
4.8
3.5
3.3
11.9
60.4
10.5
3.5
6.0
4.8
3.1
3.1
8.6
100.0
100.0
DISTRIBUTION OF DIRECT
DEPOSITS BY SECTOR
AS AT 31/12/2004
(%)
7.2 Others
0.7 P.A. and
public
Institutions
4.7 Financial and
insurance companies
% var.
-5.8
-0.5
2.8
-0.5
0.0
0.4
0.2
3.3
7.1.1.3. INDIRECT DEPOSITS
The positive trend in indirect deposits also continued during 2004. It
demonstrated an increase of 7.6% over the previous year. As at 31 December
2004 it actually registered Euro 3,533 million, compared with 3,282 million at the
end of 2003.
This development, although less appreciable than the trend in deposits, is
important as it reaffirms the growth trend for this aggregate, which has always
been maintained in recent years, despite a market scenario which certainly does
not encourage the development of financial investments.
31.7 Businesses and non
financial companies
55.7 Households
INDIRECT DEPOSITS
636
1998
366
547
1999
766
512
2000
1,343
824
2001
1,512
1,214
2002
1,331
1,370
1,681
1,818
2003
1,464
1,992
2004
0
500
1,000
1,500
Administered savings
1,541
2,000
2,500
3,000
3,500
4,000
4,500
Managed savings
From a structural point of view, despite the mentioned improvement in the
economic and financial situation, the impact of the administered component
remains at high levels. At year end, this last aggregate amounted to 1,992 million,
with an increase of 9.6% compared to December 2003.
The increase was largely due to the positive trend in government bonds and
bonds; the shareholding component, on the other hand, recorded a decrease of
2.3%.
INDIRECT DEPOSITS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Deposits in administration
Government bonds
Bonds
Shares and others
1,992
655
1,020
316
1,818
561
933
324
9.6%
16.8%
9.3%
-2.3%
56.4%
18.6%
28.9%
9.0%
55.4%
17.1%
28.4%
9.9%
Managed savings
Funds
Assets under management
Life insurance
1,541
1,092
97
352
1,464
1,072
100
293
5.2%
1.8%
-2.3%
20.2%
43.6%
30.9%
2.8%
10.0%
44.6%
32.7%
3.0%
8.9%
TOTAL INDIRECT DEPOSITS
3,533
3,282
7.6%
100.0%
100.0%
Managed savings reached Euro 1,541 million, recording an increase of 5.2%.
PREMIUMS COLLECTED 2004
BY PRODUCT
TYPE
(%)
1.5 Theft/Fire/
Damage
2.2 Claris Vita Unit
6.3 Motor/
Other
32.8 Life/Integrated
pensions
0.6 Death/LTC
0.5 Accidents/Illness
0.1 Deposits
56.0 Claris Vita Index
In the context of managed savings, the trend of single items showed a slight
increase for mutual investment funds, while there was a limited fall for the assets
under management.
Specifically, Euro 1,092 million was reached with regard to the mutual investment
funds, that continue to represent more than 30% of indirect deposits, with an
increase of approximately 2%.
The placement of insurance products also made a positive contribution to
progress for the aggregate, closing the financial year with a highly significant
increase of 20.2%.
The breakdown of premiums collected during 2004 shows the prevailing impact
recorded by financial products, with the index linked products representing
around 56% of the premiums collected over the twelve month period.
However, activities concerning life insurance and integrated pensions were also
significant, for which premiums collected represented little less than 33% of the
total.
directors’ report on operations 63
1997
(in euro million)
With regard to the current stock, as at 31 December 2004 the unit linked stock
amounted to Euro 70.3 million and the index linked stock amounted to Euro
174.3 million.
7.1.2. CREDIT MANAGEMENT
The financial year 2004 confirmed once again the Bank’s strong propensity
towards supporting the local economy, although with the necessary level of
attention, even during a difficult general economic situation.
As at 31 December 2004 the Bank’s loans reached Euro 4,115 million, recording
an increase of just under 16% compared to the previous year.
The significance of this increase can be better understood in the light of the much
more modest increase found at banking system level, which was 6% during
7
2004 .
LOANS TO CUSTOMERS
1997
(in euro million)
920
1998
1,084
1999
1,375
2000
1,975
directors’ report on operations 64
2001
2,485
2002
3,026
2003
3,551
2004
4,115
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
The analysis of the trend of the various technical forms clearly shows the decisive
contribution of mortgage loans that recorded an annual increase of 75.3%,
representing just under 24% of total loans.
Also significant was the contribution of other subsidies, up by 9.7%, and current
accounts, whose shares of the total amounted respectively to 28% and 35%.
LOANS TO CUSTOMERS (in Euro million)
2004
2003
% var.
% for '04
% for '03
Current accounts
Mortgage loans
Unsecured loans
Other subsidies
Foreign subsidies
Trading portfolio
Other credits
Net non-performing loans
1,416
982
162
1,158
206
26
135
30
1,369
560
171
1,056
200
30
138
27
3.4%
75.3%
-5.4%
9.7%
3.1%
-13.8%
-2.2%
12.3%
34.4%
23.9%
3.9%
28.1%
5.0%
0.6%
3.3%
0.7%
38.6%
15.8%
4.8%
29.7%
5.6%
0.8%
3.9%
0.7%
Net customer loans
Credit commitments
4,115
492
3,551
523
15.9%
-5.8%
100.0%
100.0%
TOTAL LOANS TO CUSTOMERS
4,607
4,074
13.1%
7 Abi Monthly Outlook – Annual Report 2004
The trend highlighted has certainly had some effect on the distribution by
residual life, which shows a shift towards the medium/long term. The items with
a residual life of over 18 months, that at the end of 2003 represented just under
30%, reached 34% in December 2004, a percentage which has never been
achieved in recent years. The impact of loans on demand, down to 24.8%
compared to the previous 26.8% and the items with a duration of less than 18
months, were down by more than 2%, falling to 41.2%.
% DISTRIBUTION BY RESIDUAL LIFE OF LOANS TO CUSTOMERS
2004
2003
2002
2001
2000
1999
1998
1997
On demand
Up to 18 months
Over 18 months
28.96
41.04
30.00
36.24
41.34
22.42
39.51
42.11
18.38
24.82
41.24
33.95
26.81
43.36
29.83
32.17
45.61
22.22
24.63
48.89
26.48
27.82
45.54
26.64
DISTRIBUTION OF LOANS
BY SECTOR AS
AT 31/12/2004
4 Producer
households
22 Other
operators
(%)
0 States
1 Other public
bodies
% BREAKDOWN OF LOANS TO CUSTOMERS
2004
2003
2002
2001
2000
1999
Euro
Foreign currency
87.37
12.63
81.25
18.75
79.48
20.52
82.76
17.24
91.61
8.39
89.33
10.67
• Geographic distribution
As already mentioned for deposits, a notable shift in geographic distribution in
favour of the non-traditional provinces could also be seen with regard to loans to
customers at the end of 2004.
The data show a resizing of the share held by the provinces of Treviso and
Vicenza, which move from 59.1% to 58.2% and 18.8% to 15.8% respectively, in
opposition to a widespread increase among the other business areas.
LOANS TO CUSTOMERS – distribution by customers’ province of residence
% for '04
% for '03
12 Financial
institutions
61 Non financial
companies
BREAKDOWN OF LOANS
BY ECONOMIC ACTIVITY
AS AT 31/12/2004
(%)
13 Trade services, recoveries
and reparations
31 Other
branches
26 Other services
for sale
Treviso
Vicenza
Venice
Pordenone
Padua
Other provinces
58.2
15.8
5.9
4.6
4.4
11.1
59.1
18.8
5.4
4.1
3.6
9.0
% var.
-0.9
-3.0
0.5
0.5
0.8
2.1
• Distribution by activity type and economic sector
The distribution of loans by economic activity sector highlights the clear
prevalence of loans to non-financial companies, which represented 61% of the
total, and to households, which claimed a share of approximately 22%.
With regard to the distribution of loans to the production system, concerning the
various activity sectors, the year-end data reconfirmed the good level of
diversification. This characteristic puts the Company’s loans portfolio in a good
position, reiterating its strong focus on overall credit risk management.
12 Building and public
works
9 Textiles, leather & footwear,
clothing
9 Other industrial products
• Concentration of loan portfolio
During 2004 the data relating to the degree of concentration of the loan
portfolio recorded further improvements compared to the situation at the end
of 2003, quantifying the share of loans used, held by the top 50 customers at
11.8%, as against the previous 14.4%.
directors’ report on operations 65
In terms of currency structure, the trend in operations for 2004 reaffirmed the
tendency of gradual reduction of the foreign currency component, which had
already begun in the past few years, to the extent that it only has an impact of
8.4% against the previous 10.7%.
Also in this case, the reduced value is a clear indicator of the degree of
diversification of the loan portfolio, and as a result, its overall quality.
CONCENTRATION OF LOANS TO CUSTOMERS (in Euro million)
2004
2003
Top 10 customers
Top 20 customers
Top 30 customers
Top 50 customers
TOTAL LOANS TO CUSTOMERS
% for '04
% for '03
158
259
343
487
193
308
391
513
3.8%
6.3%
8.3%
11.8%
5.4%
8.7%
11.0%
14.4%
4,115
3,551
100.0%
100.0%
NOTE: values net of loans to companies of the Veneto Banca Group
7.1.3. DOUBTFUL LOANS TO CUSTOMERS
At the end of the financial year the non-performing loans, net of adjustments,
amounted to Euro 29.9 million.
The watch-list entries amounted to Euro 38.5 million.
Therefore, the total non-performing loans amounted to Euro 77 million.
directors’ report on operations 66
DOUBTFUL LOANS TO CUSTOMERS (in Euro million)
2004
2003
% var.
Non-performing loans
of which on delayed payment interest
Watch-list
Restructured loans
Total doubtful loans
Performing loans
29.9
1.5
38.5
8.2
76.7
4,037.9
26.6
1.5
21.4
0.0
48.0
3,502.8
12.3%
-0.7%
80.0%
n.s.
59.6%
15.3%
TOTAL LOANS TO CUSTOMERS
4,114.6
3,550.9
15.9%
%non-performing loans (*)/loans
0.69%
0.71%
-2.3%
(*) net of on delayed payment interest
In view of the trends described above, the net ratio of non-performing loans to
total loans closed the financial year at 0.69%, marking a further improvement
compared to the previous 0.71%, also confirming the excellent position with
regard to the banking system for 2004.
TREND FOR NON PERFORMING LOANS
(%)
4.00
3.00
2.00
1.00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
Net non-performing loans/loans to customers
The constant focus on managing credit risk which has always distinguished the
Bank’s policy, has at last led to a strengthening of the index of performing loans
hedging from 0.51% at the end of 2003 to 0.58% for the financial year in
question.
7.1.4. SECURITIES PORTFOLIO AND TREASURY
During 2004, the financial markets continued, although to a less noticeable
extent, with the positive trend that began during the previous financial year.
Simultaneously, the international economic situation recorded a strong
expansion, although there was a slowdown towards the end of the year
compared to the growth in the early part of 2004, nevertheless demonstrating
different growth speeds among the main economies.
During the financial year, the Bank maintained a limited risk profile,
simultaneously attempting to seize the opportunities that the financial markets
were able to offer, especially via trading and switching activities on stock and
bond markets.
The stock on the trading portfolio did not show significant changes.
The investment portfolio also remained almost unchanged compared to the
previous year.
PORTFOLIO OF OWN SECURITIES (in Euro million)
2004
2003
% var.
% for '04
% for '03
Investment
Securities
Funds
130.2
127.0
3.2
138.9
136.4
2.6
-6.3%
-6.9%
25.3%
39.0%
41.8%
Trading
Securities
Equity shares
203.6
201.0
2.6
193.1
188.4
4.7
5.4%
6.7%
-45.1%
61.0%
58.2%
TOTAL PORTFOLIO OF
OWN SECURITIES
333.8
332.0
0.5%
• Treasury activities
During 2004, activities on the interbanking market recorded a decrease, mainly
due to the issue on the Euromarket of a senior bond loan of Euro 250 million and
a subordinated Lower Tier II loan of Euro 100 million.
Net liquidity at year end showed a negative imbalance of Euro 128 million, a clear
improvement when compared to the situation at the end of 2003.
INTERBANKING RELATIONS (in Euro million)
2004
2003
% var.
Loans to banks
Due to banks
367
-495
279
-684
31.5%
-27.6%
NET LIQUIDITY POSITION
-128
-405
-68.3%
directors’ report on operations 67
There was a significant improvement under the risk profile position that, due to
the narrowing of the loan spreads and the reduction in interest rates, went from
a capital loss of Euro 2,021,628 at the end of 2003 to a capital gain of Euro
2,936,670.
• Loans/deposits ratio
A more even ratio between loans and deposits made a positive contribution to
the liquidity position. Thanks to the increase recorded by customer deposits, this
went from 103.8% at the end of 2003 to 101.7% recorded as at 31 December 2004.
If one considers only the Euro element, the ratio between customer loans and
deposits falls to 96.4%.
TREND OF LOANS/ DIRECT DEPOSITS
4,500
140%
4,000
120%
3,500
100%
3,000
2,500
80%
2,000
60%
1,500
40%
1,000
20%
500
directors’ report on operations 68
0
0
1997
Diret deposits
1998
1999
Loans
2000
2001
2002
Loans/Deposits ratio
7.1.5. RELATIONS WITH GROUP COMPANIES
With reference to relations held with other Group Companies, forming part of
normal interbanking activities, please refer to the table 3.2 in the notes to the
financial statements.
The prices regulating these relations are directly linked to market conditions or
on the basis of costs incurred.
The supply of services, consultancy and detached personnel distributed by the
Parent Company are, on the contrary, regulated by specific internal outsourcing
contracts, within which the related economic conditions are set out.
These agreements, based on the criteria of congruity and disclosure, are drawn
up in the Company’s interests and without conflicts of interest. The
abovementioned structure is in line with the organisational model adopted by
the Group itself, which means that business not directly related to customers is
centralised at Veneto Banca, leaving the subsidiaries to handle all the commercial
relations.
Further information is also provided in the specific sections of this report and the
notes to the financial statements dealing with infra-Group relations.
2003
2004
7.2. EQUITY AND CAPITAL ADEQUACY
7.2.1. SHAREHOLDERS’ EQUITY
In December 2003, shareholders’ equity, including profit and the reserve for
general banking risk, totalled Euro 627.6 million, compared with 538.3 million in
2003.
The growth in equity was mainly determined by:
- the allocation to the reserve for general banking risk of the capital gain on the
sale of 80% of the capital held in the insurance company Claris Vita;
- the increase in reserves, with particular reference to the item “other reserves”;
- the modest setting up of accounts carried out to meet the demands of newlyacquired customers in areas where branches have recently opened.
2004
2003
% var.
Reserve for general banking risk
Share capital
Issue premiums
Reserves
legal reserve
other reserves
Revaluation reserves
Profit for the year
Total shareholders’ equity
39,057
98,646
304,765
133,871
33,012
100,859
5,554
45,658
627,551
6,057
95,068
280,983
110,540
29,004
81,536
5,554
40,077
538,279
544.8%
3.8%
8.5%
21.1%
13.8%
23.7%
0.0%
13.9%
16.6%
Subordinated liabilities
181,814
82,065
121.5%
TOTAL SHAREHOLDERS’ EQUITY AND
SUBORDINATED LIABILITIES
809,365
620,344
30.5%
Equity exceeded Euro 809 million with the inclusion of subordinated liabilities,
quantified as at 31 December 2004 at 181.8 million due to the issuing of the new
subordinated loan “Veneto Banca subordinated 2004/2014 Step Up – Floating
rate bonds on the Euromarket (lower tier II)”, for a face value of Euro 100 million.
SHAREHOLDERS’ EQUITY
1997
228
1998
234
1999
(in euro million)
241
265
2000
108
367
2001
155
409
2002
155
538
2003
82
628
2004
0
200
Shareholders’ equity
400
600
Subordinated liabilities
182
800
1.000
directors’ report on operations 69
SHAREHOLDERS’ EQUITY (in Euro thousand)
Share capital as at 31 December 2004 was therefore made up of 32,882,038 shares
with a unit face value of Euro 3.00 for a total of Euro 98,646,114.
On the same date, the Bank numbered 16,041 Shareholders, with an increase of
405 units compared to December 2003.
7.2.2. CAPITAL FOR SUPERVISORY PURPOSES AND
MINIMUM RATIOS
As at 31 December 2004 capital for supervisory purposes amounted to Euro 737
million, up by 34.3% compared to the end of 2003.
CAPITAL FOR SUPERVISORY PURPOSES (in Euro million)
2004
2003
% var.
Tier I capital
Tier II capital
Items to be deducted
583
184
-30
494
85
-30
18.1%
116.9%
0.0%
CAPITAL FOR SUPERVISORY PURPOSES
737
548
34.3%
Tier I capital – made up of share capital, reserve for general banking risk and
reserves, net of intangible fixed assets and goodwill – reached Euro 583 million,
with an annual increase of Euro 89 million, largely caused by the positive change
in the reserve for general banking risk.
directors’ report on operations 70
The increase recorded in Tier II capital, as at 31 December 2004 totalling Euro 184
million, essentially depended on the issuing of the new 100 million subordinated
loan placed last December.
TREND IN CAPITAL FOR SUPERVISORY PURPOSES
(in euro million)
750
737
700
650
600
583
548
550
504
500
496
494
450
400
352
350
367
343
300
250
200
222
226
213
1998
Tier I capital
241
219
1999
2000
2001
2002
2003
2004
Total capital
Weighted risk assets, calculated according to the Supervision Authority
regulations, also demonstrated an upwards trend, going from Euro 4,810 million
to Euro 5,445 million, corresponding to an increase of 13.2%.
This increase was largely due to the greater credit risks that, with an annual
growth of 11.5%, came in at Euro 5,105 million.
On the other hand, exposure to market risks, even in accordance with current
strategic indications, proved to be more limited, registering at approximately Euro
258 million.
TREND IN WEIGHTED RISK ASSETS
(in euro million)
5,449
5,500
5,000
4,810
4,500
4,364
5,105
4,579
4,000
3,922
3,500
3,258
3,000
3,113
2,515
2,500
2,419
2,000
1,000
1,677
1,374
1,257
1998
1999
Credit risks
2000
2001
2002
2003
2004
Total risks
The Bank’s capital position, given the trends outlined above and the performance
of risk weighted assets considered as a whole, showed a clear improvement
compared to the end of 2003, closing the financial year with a surplus of Euro 356
million.
SHAREHOLDERS’ EQUITY
1998
96
1999
(in euro million)
126
131
2000
95
176
176
228
2001
268
305
2002
198
336
2003
212
381
2004
0
100
Minimum
200
300
370 356
400
500
600
700
800
Shareholders’ equity
The positive trend recorded by the overall shareholders’ equity was supported by
the clear improvement in the leverage ratios.
Tier I actually went from 10.26% at the end of 2003 to 10.71%, while the Total Risk
Ratio ended 2004 at 13.53% compared to the previous 11.40%.
directors’ report on operations 71
1,500
1,871
7.3. PROFITABILITY
2004 closed with an entirely satisfactory result. The Bank actually exceeded Euro
45.6 million, achieving a 14% growth in terms of net profit.
RECLASSIFIED PROFIT AND LOSS ACCOUNT (in Euro thousand)
2004
Financial spread
Dividends
Interest margin
Service margin
Profit on financial transactions
Earning margin
Operating expenses:
personnel cost
other administrative expenses
Gross operating profit (loss)
Amortisation and depreciation
Other operating charges
Provisions and write-backs
Provisions for risks and charges
Write-downs of financial fixed assets
Profit (loss) on ordinary activities
Balance of extraordinary operations
Change in reserve for general banking risk
Income taxes for financial year
NET PROFIT FOR THE YEAR
2003
% var.
97,134
22,099
119,233
70,419
20,495
210,146
-118,563
-70,447
-48,116
91,583
-9,722
-419
-21,171
-641
848
60,479
32,969
-33,000
-14,790
92,738
18,555
111,293
63,789
20,067
195,149
-107,847
-64,115
-43,732
87,302
-7,834
-156
-18,908
-84
-174
60,145
-2,384
0
-17,684
4.7%
19.1%
7.1%
10.4%
2.1%
7.7%
9.9%
9.9%
10.0%
4.9%
24.1%
168.1%
12.0%
659.5%
-587.3%
0.6%
n.s.
n.s.
-16.4%
45,658
40,077
13.9%
directors’ report on operations 72
The result achieved does not therefore take into account the Euro 33 million
increase in the reserve for general banking risk, arising from the allocation of the
capital gain realised from the sale of the 80% stake in Claris Vita.
The growth in the earning margin and the controlled increase in operating
expenses both contributed to the positive revenue trend. These phenomena laid
the foundations for the solid profit in ordinary activities.
In terms of revenue, growth was supported on the one hand by the interest
margin, pulled up by the positive trend in credit brokering and also by the good
performance of the “dividends” item, and on the other hand by the brilliant
performance of net revenue from services.
The increase in administrative expenses, slightly higher than the growth in
revenue, partially balanced out the contribution to the increase in “gross
operating profit (loss)”.
7.3.1. THE INTEREST MARGIN
As at 31 December 2004 the interest margin had exceeded Euro 119.2 million,
signalling an increase of almost Euro 8 million, equivalent to 7.1%.
Growth in the aggregate was caused both by the development of the financial
element, deriving almost exclusively from the customer deposit and loan
activities, that was recorded at 4.7% during the year, and from the increased
dividends collected, up by more than 19%.
Development of the financial spread essentially depended on the increase in
traded volumes. Interest rates, on the other hand, remained almost stable
compared to the asset element, while the cost of deposits recorded a slight
increase, consolidating a trend that had already been highlighted during 2003.
As far as the dividends from equity investments item is concerned, up by 19.1%
despite the sale of 80% of the insurance company Claris Vita, the significant
contribution of the Irish subsidiary and Palladio Finanziaria should be noted. The
results recorded for the company Claris Leasing and Claris Factor were good, also
in absolute terms.
However, the contribution of other dividends was also significant.
DIVIDENDS FROM EQUITY INVESTMENTS (in Euro thousand)
2004
2003
% var.
Banca di Bergamo
Banca Meridiana
Banca Italo-Romena
Dividends from equity investments
in other banks (*)
Veneto Ireland Financial Services
Palladio Finanziaria (ex-Atene)
Dividends from financial inv. (*)
Claris Vita
Claris Factor
Claris Leasing
Dividends from instrumental
equity investments (*)
Other sundry dividends
TOTAL DIVIDENDS FROM
EQUITY INVESTMENTS
% for '04
% for '03
0
0
0
0
0
0
0
11,782
1,247
13,029
975
1,900
200
0
9,599
333
9,932
3,975
1,200
0
22.7%
274.5%
31.2%
-75.5%
58.3%
70.2%
53.5%
3,075
5,995
5,175
3,448
-40.6%
73.9%
16.6%
32.3%
27.9%
18.6%
22,099
18,555
19.1%
(*) only the leading subsidiaries of the Veneto Banca Group have been considered
7.3.2.1. THE SERVICE MARGIN
The service margin ended the year with an increase of 10.4% on the previous
year, registering at Euro 70.4 million. This performance confirms the positive
trend for this item, that was already up by more than 20 percentage points in 2003
compared to the previous financial year.
SERVICE MARGIN (in Euro thousand)
2004
2003
% var.
% for '04
% for '03
Management of indirect deposits
Net income on sales activity
Other credits
21,633
37,496
11,290
20,028
31,701
12,060
8.0%
18.3%
-6.4%
30.7%
53.2%
16.0%
31.4%
49.7%
18.9%
TOTAL SERVICE MARGIN
70,419
63,789
10.4%
The increase recorded in 2004 is the result of the excellent performance of “net
income on sales activity”, up by more than 18%, and revenue relating to the
management of indirect deposits, up by 8%. In the first case, a special impulse
came from the commission flows related to current account management, to
which were added the considerable contributions from overseas and corporate
portfolio management activity.
With regard to management of indirect deposits, the greatest contribution came
from the managed element and from insurance products, that recorded a very
positive performance over the course of the year.
On the contrary,“other income” fell by 6.4%, however this only represents 16%
of the aggregate total.
Among the components in the last item, we would highlight the growing
contribution from the recoveries for business carried out on behalf of other
Group companies, up by 35.2%. Within this aggregate, both recoveries for
detached personnel working at the subsidiaries and the income relating to
directors’ report on operations 73
7.3.2. EARNING MARGIN
During 2004 the increased earning margin exceeded Euro 210.1 million, up by
7.7% compared to 2003. This result was caused, apart from by the positive interest
margin trend, by the excellent result achieved in the service margin. As at 31
December 2004, these last two aggregates represented 56.7% and 33.5% of the
earning margin respectively. Profits on financial transactions were also up on last
year, representing almost 10% of the earning margin.
services provided under outsourcing agreements to other Group companies
increased.
OTHER INCOME (in Euro thousand)
2004
2003
% var.
Invoicing of services to Group banks
for detached personnel
for outsourcing contracts
Other sundry income
4,090
2.194
1,896
7,200
3,025
1,699
1,326
9,035
35.2%
29.1%
43.0%
-20.3%
11,290
12,060
-6.4%
TOTAL OTHER INCOME
7.3.2.2. PROFITS ON FINANCIAL TRANSACTIONS
As at 31 December 2004 the profits and losses on financial transactions were
higher than the levels achieved in 2003, reaching Euro 20.5 million. This result is
particularly due to the good performance of securities and exchange rate
management, for which profits achieved an annual increase of 16% and 55.2%
respectively. The income contribution from exchange rate and interest risk
hedging operations with corporate customers remained stable, and represented
more than 53% of this item at year-end.
directors’ report on operations 74
7.3.3. OPERATING PROFIT (LOSS)
2004 closed with a gross operating profit (loss) of Euro 91.6 million, signalling an
improvement of 4.9% compared to 2003.
This trend is the result of the combined effect of the abovementioned trend in
income flows and the increased growth in operating expenses that partially
absorbed the positive contribution.
7.3.3.1. OPERATING EXPENSES
During the financial year, operating expenses were up by 10.2%, reaching Euro
118.6 million at the end of December.
Looking at the details, the figures have already displayed increases both in
personnel costs and for other administrative expenses, which in both cases were
quantified at 10%.
With regard to personnel costs, a Euro 6.3 million increase was recorded, taking
this item to over Euro 70.4 million. The increase was caused, apart from by the
increase in personnel, going from 1,105 to 1,169 staff, also by the increase in the
average cost per employee of 3.4 percentage points. This is largely attributable to
the recent renewal of the National Labour Agreement. As mentioned above,
other administrative expenses also showed an upward trend, rising by 10% to
reach Euro 48.1 million. The growth in this aggregate was fairly even for the
various sectors, not registering peaks except for the item other administrative
expenses, especially following the effects on the profit and loss account of the new
investments made.
OTHER ADMINISTRATIVE EXPENSES (in Euro thousand)
2004
2003
% var.
% for '04
% for '03
Real estate costs
Information technology
Security
Communications
Other administrative expenses
Indirect taxation and charges
7,359
12,439
1,673
3,611
15,766
7,268
6,965
11,877
1,542
3,604
13,196
6,548
5.7%
4.7%
8.5%
0.2%
19.5%
11.0%
15.3%
25.9%
3.5%
7.5%
32.8%
15.1%
15.9%
27.2%
3.5%
8.2%
30.2%
15.0%
TOTAL OTHER ADMINISTRATIVE
EXPENSES
48,116
43,733
10.0%
100.0%
100.0%
In view of the above, the cost/income ratio deteriorated slightly, but its value was
nevertheless a slight improvement on the 61.6%8 seen at banking system level.
8 Prometeia estimates
GROSS PROFIT / COST INCOME
87.3
GROSS
PROFIT
(in Euro
million)
91.6
59.3
COST
INCOME
(%)
61.0
0.0
20.0
40.0
2003
60.0
80.0
100.0
2004
7.3.8. EXTRAORDINARY OPERATIONS AND NET PROFIT
Profit on extraordinary operations incorporated the capital gain arising from the
abovementioned sale of 80% of the equity investment in the insurance company
Claris Vita. As at 31 December 2004, therefore, extraordinary net profit totalled
Euro 33 million, making a variation to the reserve for general banking risk of the
same amount.
Finally, the reduced impact of taxation compared to the 2003 figure enabled
closure of the financial year with a net profit of Euro 45.7 million compared with
the 40.1 for 2003, recording an increase of 13.9%. 2004 was thus in line with the
trend recorded in recent years that has led to profit levels almost being tripled
compared to 1998.
net profit
1997
(in euro million)
12.9
1998
15.5
1999
18.1
2000
28.5
2001
34.1
2002
30.4
2003
40.1
2004
0. 0
45.7
5.0
10.0
15.0
20,0
25.0
30.0
35.0
40.0
45.0
50.0
Thanks to the positive income performance, asset profitability was also
maintained at good levels, taking ROE to 8.45%. This value was entirely
satisfactory when compared with expectations for the banking system.
directors’ report on operations 75
7.3.7. PROFIT ON ORDINARY ACTIVITIES
Profit on ordinary activities at the end of 2004 was Euro 60.5 million, an increase
of 0.6% compared to the previous twelve months.
This profit was achieved after making write-downs on fixed assets of Euro 9.7
million, of which 1.5 related to real estate, net write-downs of loans for Euro 21.2
million, provisions for risks and charges of Euro 641 thousand and other
operating charges for Euro 419 thousand.
8. TRENDS IN SUBSIDIARIES
As at 31 December 2004 Veneto Banca’s equity investments totalled Euro 411.2
million, with a decrease of Euro 41.9 million compared to the previous financial
year.
EQUITY INVESTMENTS (in Euro thousand)
2004
2003
abs. var.
% var.
Equity investments in Group companies
Other equity investments
327,103
84,059
384,166
68,855
-57,063
15,204
-14.9%
22.1%
Total
411,162
453,021
-41,859
-9.24%
directors’ report on operations 76
The event responsible for the trend shown was the previously mentioned sale of
80% of the share capital of Claris Vita to Uniqa Versicherungen AG, a leading
Austrian insurance company.
This change was only partially offset by the increased value in the equity
investment in Banca Meridiana, that went from Euro 103.1 to Euro 115.5 million
as a result of the capital increase carried out during the year, and the payment to
the Banca Italo-Romena of the last tranche of the calls relating to the capital
increase subscribed on 12 April 2001.
The corporate structure at the end of 2004 thus included the following
subsidiaries:
- the three commercial banks:
• Banca di Bergamo
• Banca Meridiana
• Banca Italo-Romena
- the financial company:
• Veneto Ireland Financial Services
- the special purpose companies:
• Claris Assicurazioni
• Claris Broker
• Claris Factor
• Claris Finance
• Claris Leasing
• Immobiliare Italo Romena
The “other equity investments” item includes non-significant investments, in
other words those where Veneto Banca’s interest is less than 50% of share capital.
The subsidiaries subject to considerable control are significant here, including
Claris Vita, Sintesi 2000 and Palladio Finanziaria.
With regard to the remaining equity investments, the main changes were as
follows:
• Arca SGR spa – during August a further 452,000 shares were acquired. The
equity investment percentage exceeded 2%.
• Centrosim spa – the investment was increased following approval of the
capital increase resolved by the bank last year in January. The equity
investment percentage remains unchanged.
• Dutch Romanian Trading Group srl – during the financial year, expenses
were incurred for market research and consultancy, and payment was made
to settle the share purchase that took place in 2003.
• Sec Servizi spa – the capital increase resolved by the company in April 2004
led to expenditure relating to the subscription of 1,347,215 new shares.
• Veneto Sviluppo spa – approval of the capital increase led to a payment of
approximately Euro 6,500, for the subscription of 2,498 new shares.
• Est Capital Sgr spa – set up at the start of 2004, the company operates in
collective asset management; the Bank has a 10% stake.
The following sections give a brief summary of the report on operations for the
main Group companies.
8.1. BANKS AND FINANCIAL COMPANIES
8.1.1. BANCA DI BERGAMO
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Gross banking income
Total deposits
Direct deposits
Indirect deposits
of which: managed savings
of which: administered savings
Loans to customers
Performing assets
Total assets
Shareholders’ equity
(net of subordinated loans)
STRUCTURAL RATIOS (%)
Direct deposits/Total assets
Loans to customers/Total assets
Loans to customers/Direct deposits
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans to customers
Net watch-list/Loans to customers
Net non-performing loans/Shareholders’ equity
PROFITABILITY RATIOS (%)
R.O.E.
R.O.A.
Interest margin/Performing assets
Earning margin/Performing assets
Net profit/Performing assets
Interest margin/Earning margin
Cost/Income ratio
EQUITY RATIOS (%)
Tier I
Solvency ratio
STRUCTURAL AND PRODUCTIVITY RATIOS
Average no. of employees
Number of bank branches
Customer loans per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
2004
2003
abs. var.
% var.
12,979
20,489
-12,924
3,431
1,712
10,378
16,673
-10,365
1,932
1,394
2,602
3,816
-2,559
1,499
318
25.1%
22.9%
24.7%
77.6%
22.8%
2004
2003
abs. var.
% var.
1,242,177
752,610
460,970
291,640
71,537
220,103
489,566
535,040
555,357
891,307
514,478
332,568
181,910
56,320
125,590
376,829
401,400
413,158
350,870
238,132
128,402
109,730
15,217
94,513
112,737
133,640
142,198
39.4%
46.3%
38.6%
60.3%
27.0%
75.3%
29.9%
33.3%
34.4%
42,211
40,499
1,712
4.2%
2004
2003
abs. var.
% var.
83.00%
88.15%
106.20%
80.49%
91.21%
113.31%
2.51%
-3.06%
-7.11%
3.1%
-3.4%
-6.3%
2004
2003
abs. var.
% var.
0.14%
1.21%
1.70%
0.13%
0.74%
1.07%
0.01%
0.47%
0.63%
7.7%
63.5%
58.9%
2004
2003
abs. var.
% var.
4.30%
1.53%
2.43%
3.83%
0.32%
63.3%
70.2%
3.53%
1.67%
2.59%
4.15%
0.35%
62.2%
71.1%
0.77%
-0.14%
-0.16%
-0.32%
-0.03%
1.10%
-1.27%
21.8%
-8.4%
-6.2%
-7.7%
-8.6%
1.8%
-1.3%
2004
2003
abs. var.
% var.
8.19%
8.19%
9.56%
9.57%
-1.37%
-1.38%
-14.3%
-14.4%
2004
2003
abs. var.
% var.
97
16
5,047
7,759
12,806
211
81
12
4,652
6,352
11,004
206
16
4
395
1,407
1,802
5
19.8%
33.3%
8.5%
22.2%
16.4%
2.6%
directors’ report on operations 77
Area of activity: banking
Registered office: Via Camozzi, 10 – 24121 – Bergamo
Amount of equity investment: 60.07%
2004 concluded successfully if one considers the difficult situation for the
national and international economy and the modest growth in the banking
industry.
The increase in gross banking income was particularly significant. This went from
Euro 891.3 million in 2003 to 1.242 million at the end of 2004, recording a 39.4%
increase.
There was also an improvement in terms of productivity, with an increase in gross
banking income per employee of close to 16.4%.
directors’ report on operations 78
Financial activities managed on behalf of customers, including both direct and
indirect deposits, totalled Euro 752.6 million at the end of the year, recording a
significant increase of 46.3% compared to the end of the previous financial year.
Direct customer deposits went from 332.6 to approximately Euro 461 million,
which means an increase of 128.4 million, corresponding to 38.6%. Among the
types of account making up the aggregate, the percentage impact of current
accounts was particularly significant, equal to 58.1%, and bonds, equal to 36.1%.
The direct element, while recording a reduced impact on total deposits compared
to 2003 (-3.4%), made a 61.2% contribution.
The increase in indirect deposits was more significant. This was up by 60.3%,
reaching Euro 292 million.
Within this sector the managed element recorded a 27% increase, less than
that for administered savings which amounted to 75.3%. The percentage
breakdown between administered and managed savings was 75.5% to 24.5%
respectively.
At the end of the financial year 2004, loans to customers totalled approximately
Euro 490 million with a percentage increase of 29.9% compared to 2003.
With regard to the various items making up the aggregate, although the increase
was generalised, it particularly affected mortgage loans, corporate loans and
current accounts, increasing by 64.1%, 21.2% and 17.8% respectively.
The distribution of customer loans, divided by category and line of business,
shows an increased opening up of credit towards the corporate sector, in line
with the Bank’s strategy of establishing long-lasting relations with the many
small and medium sized enterprises that make up the local industrial and
economic fabric.
In 2004 the ratio of net non-performing loans/loans remained at outstanding
levels, registering at only 0.14%, compared with 0.13% for 2003.
Watch-list entries, although they increased to Euro 5.9 million, only represent
1.2% of loans to customers.
As at 31 December 2004 the Bank’s securities portfolio was only made up of
trading securities, of Euro 5 million.
In economic terms, the financial year 2004 ended with a net profit of Euro 1.7
million, up by 22.8% compared to that achieved in 2003.
The earning margin increased by 22.9% compared to the previous financial year,
reaching Euro 20.5 million.
The greatest contribution to this increase came from the interest margin, which
represented 63.3% of the earning margin. With a 25.1% increase, it closed 2004
with approximately Euro 13 million. The result was achieved due to the good
performance of the traded volumes, that compensated for the reduction in rates.
The service margin represented 25.4% of the earning margin. Despite the
negative trend in the financial markets, it increased by 34.5%, reaching Euro 5.2
million. Within this, profit on indirect deposits were 31.2%, while profit on
banking services represented 68.8%.
Profits on financial transactions had an impact on the earning margin of 11.3%.
This aggregate recorded a decrease of 4.9%, while highlighting significant
volumes of Euro 2.3 million, mainly due to activities in the corporate segment.
Operating expenses increased by 24.7%, less than the increase recorded at the
end of 2003, and absorbed 63.1% of the earning margin.
This increase was almost entirely due to the increase in sales activities which
generated further recruitment of staff for the four new branches, and greater
recourse to services supplied by SEC and by the Parent Company.
Personnel costs represented 51.3% of operating expenses, and were up by 25.9%,
a more sustained growth than 2003. However, administrative expenses had an
impact of 48.7% on total expenses and were up by 23.4%, also slowing down
compared to the previous year.
Finally, amortisations, write-downs of loans and other minimum provisions
amounted to Euro 4.1 million, with an impact of approximately 20.2% on the
earning margin.
As regards the operational structure, during 2004 four new branches were
opened in the province of Bergamo, which took the Bank’s distribution
network to 16 branches at the end of the financial year. As a result of this
expansion, the Bank’s workforce increased by 18 staff, reaching a total of 103 at
the end of the year.
2005 will be a year for expanding the distribution network and as a result, for
further development in terms of volumes and customers. No less important will
be the aim to increase profitability and increase market share.
directors’ report on operations 79
The Bank’s shareholders’ equity including profit totalled Euro 42.2 million for the
financial year just ended.
Capital for supervisory purposes amounted to Euro 40.4 million and was more
than adequate for the minimum threshold required.
8.1.2. BANCA MERIDIANA
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: banking
Registered office: Via Amendola, 205/3 – 70126 – Bari
Amount of equity investment: 99.39%
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
directors’ report on operations 80
Gross banking income
Total deposits
Direct deposits
Indirect deposits
of which: managed savings
of which: administered savings
Loans to customers
Performing assets
Total assets
Shareholders’ equity
(net of subordinated loans)
Shareholders’ equity
(including subordinated loans)
STRUCTURAL RATIOS (%)
2004
2003
abs. var.
% var.
25,571
38,991
-26,889
4,591
2,006
22,640
35,771
-28,480
2,193
517
2,931
3,220
1,591
2,398
1,489
13.0%
9.0%
-5.6%
109.3%
288.1%
2004
2003
abs. var.
% var.
1,500,989
1,052,467
717,530
334,937
134,718
200,219
448,522
746,902
814,160
1,268,122
980,913
611,158
369,755
120,085
249,670
287,209
640,163
691,621
232,867
71,554
106,372
-34,818
14,633
-49,451
161,313
106,738
122,539
18.4%
7.3%
17.4%
-9.4%
12.2%
-19.8%
56.2%
16.7%
17.7%
38,616
24,311
14,305
58.8%
48,741
34,311
14,430
42.1%
2004
2003
abs. var.
% var.
88.16%
55.11%
62.51%
88.37%
41.53%
46.99%
-0.21%
13.58%
15.51%
-0.2%
32.7%
33.0%
2004
2003
abs. var.
% var.
0.89%
1.98%
8.20%
0.49%
1.53%
4.12%
0.40%
0.45%
4.08%
81.1%
29.2%
99.0%
2004
2003
abs. var.
% var.
6.64%
2.69%
3.42%
5.22%
0.27%
65.58%
76.22%
2.17%
2.52%
3.54%
5.59%
0.08%
63.29%
88.37%
4.47%
0.17%
-0.11%
-0.37%
0.19%
2.29%
-12.15%
205.7%
6.6%
-3.2%
-6.6%
232.6%
3.6%
-13.8%
2004
2003
abs. var.
% var.
6.11%
8.05%
3.73%
5.59%
-2.38%
-2.46%
-63.8%
-44.0%
STRUCTURAL AND PRODUCTIVITY RATIOS
2004
2003
abs. var.
% var.
Average no. of employees
Number of bank branches
Customer loan per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
251
30
1,787
4,193
5,980
155
283
30
1,015
3,466
4,481
126
-32
0
772
727
1,499
29
-11.3%
0.0%
76.1%
21.0%
33.5%
22.9%
Direct deposits/Total assets
Loans to customers/Total assets
Loans to customers/Direct deposits
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans to customers
Net watch-list/Loans to customers
Net non-performing loans/Shareholders’ equity
PROFITABILITY RATIOS (%)
R.O.E. (*)
R.O.A.
Interest margin/Performing assets
Earning margin/Performing assets
Net profit/Performing assets
Interest margin/Earning margin
Cost/Income ratio
EQUITY RATIOS (%)
Tier I
Solvency ratio
(*) Calculated on average equity net of profit and subordinated liabilities
In 2004 Banca Meridiana recorded an improvement in both revenue and traded
volumes.
Its good performance was encouraged by the company restructuring that Banca
Meridiana has undergone in recent years and by the gradual integration into the
Veneto Banca Group.
Loans to customers at the end of December 2004 totalled Euro 448.5 million, up
by 56% compared to 2003.
This increase was made possible by the Bank’s recent reorganisation, giving a
new impulse to sales activities. The results achieved in 2004 in terms of volumes
employed confirm the satisfactory development of the Bank over the financial
year, which should help to make it a point of reference for local customers,
whether private or corporate.
Non-performing loans, while remaining at very low levels, recorded a slight
increase. The ratio of non-performing loans to loans went from 0.49% to 0.89%.
Figures relating to the quality of the loan portfolio are also satisfactory even in
terms of diversification between lines of business.
With regard to revenue, the financial year ended positively, recording a net profit
of Euro 2 million, an increase of 288% compared to the financial year 2003.
The considerable increase recorded in traded volumes supported the increase in
the interest margin, equal to Euro 25.6 million, representing more than 65% of
the earning margin at the end of the year.
The service margin closed with a total of Euro 12.8 million, made up for the most
part of net fees and commissions from services for a total of Euro 10.7 million,
profits on financial transactions of Euro 583 thousand and other operating
income of Euro 2.3 million.
The earning margin thus reached Euro 38.9 million, showing an increase of 9%.
Operating expenses were down on the year 2003, registering at just over Euro
26.9 million (-5.6% compared to 2003). Both the trend in administrative expenses
amounting to Euro 11.8 million and personnel costs of Euro 15.1 million
contributed to this fall.
The significant reduction recorded in this last item, of 5.1%, was caused by the
signing of a redundancy agreement at the beginning of 2004, which led to 33
employees being pensioned off.
The cost/income ratio, given from the comparison between operating expenses
and the earning margin improved, falling to 76% from the 88% recorded in 2003.
In terms of structure, 2004 involved considerable consolidation of the sales
network.
directors’ report on operations 81
Gross banking income increased by more than 18 percentage points.
Financial activities managed on behalf of customers, including both direct and
indirect deposits, totalled Euro 1,052 million at year end, with a 7.2% increase
compared to the end of the previous year.
In particular, direct deposits from customers went from Euro 611.1 to 717.5
million, up by 106 million (+17.4%), thus improving the already high growth rate
recorded during the last financial year. However, indirect deposits fell by
approximately 9.4%. This figure suffered from the effects of the operation to
transform bonds issued by other counter parties into own bonds: net of this
effect, even this item would have increased. Within this aggregate, the fall
recorded in deposits in administration was thus partially balanced out by the
growth in managed savings of 12.2%, caused mainly by the good performance in
insurance products.
In the context of reorganisation of the distribution network, the licence for the
Grottole branch was transferred to the new branch at Potenza, with the aim of
ensuring a stronger business base in areas with greater business potential.
The size of the Bank’s distribution network is therefore unchanged, still
numbering 30 branches. In the first few months of 2005, however, the branches
of Manfredonia and San Giovanni Rotondo were opened, with the aim of
expanding business in the Foggia region.
8.1.3. BANCA ITALO-ROMENA
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: banking
Registered office: Viale Nino Bixio, 1 – 31100 – Treviso
Amount of equity investment: 92.31%
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
directors’ report on operations 82
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Gross banking income
Direct deposits
Loans to customers
Performing assets
Total assets
Shareholders’ equity
STRUCTURAL RATIOS (%)
Direct deposits/Total assets
Loans to customers/Total assets
Loans to customers/Direct deposits
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans to customers
Net watch-list/Loans to customers
Net non-performing loans/Shareholders’ equity
PROFITABILITY RATIOS (%)
R.O.E. (*)
R.O.A.
Interest margin/Performing assets
Earning margin/Performing assets
Net profit/Performing assets
Interest margin/Earning margin
Cost/Income ratio
EQUITY RATIOS (%)
2004
2003
abs. var.
% var.
7,893
13,092
-6,195
4,806
3,299
3,154
7,447
-4,816
1,437
1,640
4,740
5,645
-1,379
3,369
1,659
150.3%
76.8%
28.6%
234.5%
101.1%
2004
2003
abs. var.
% var.
267,952
100,478
167,473
240,316
252,792
37,157
146,372
50,340
96,032
127,454
139,505
30,217
121,580
50,139
71,441
112,862
113,287
6,940
83.1%
99.6%
74.4%
88.6%
81.2%
23.0%
2004
2003
abs. var.
% var.
39.75%
66.25%
166.68%
36.08%
68.84%
190.77%
2004
2003
0.33%
4.23%
1.49%
0.18%
1.41%
0.56%
2004
2003
10.57%
3.83%
3.28%
5.45%
1.37%
60.29%
53.99%
6.24%
2.38%
2.47%
5.84%
1.29%
42.35%
74.49%
10.2%
-3.8%
-12.6%
abs. var.
% var.
86.9%
199.4%
165.0%
abs. var.
% var.
69.4%
60.7%
32.7%
-6.7%
6.7%
42.4%
-27.5%
2004
2003
18.02%
18.02%
27.31%
27.31%
STRUCTURAL AND PRODUCTIVITY RATIOS
2004
2003
abs. var.
% var.
Average no. of employees
Number of bank branches
Customer loan per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
99
7
1,692
1,015
2,707
132
82
6
1,177
617
1,794
91
17
1
515
398
913
41
21.3%
16.7%
43.7%
64.5%
50.9%
45.1%
Tier I
Solvency ratio
(*) Calculated on average equity net of profit
abs. var.
% var.
-34.0%
-34.0%
The Banca Italo-Romena closed the financial year 2004 with a very attractive
profit of Euro 3.3 million, up by 101.1% on the previous financial year (1.6
million), due to the achievement of important sales aims.
As at 31 December 2004, the Bank’s distribution network was formed of 6
agencies located throughout Romania, and a non-operational counter at the
Treviso branch. In March, the Bacau branch was opened, adding to the agencies
in Bucharest, Timisoara, Arad, Cluj-Napoca and Oradea. Four more branches are
scheduled to open during the current financial year, subject to approval by the
Banca d’Italia.
Gross banking income increased by 83.1%, going from Euro 146.4 to 268 million
thanks to the excellent growth recorded in both direct deposits, which almost
doubled compared to 2003, and loans granted to customers, up by 74.4%.
The growth in loans to customers, although less dramatic, was also significant
and took the volumes from Euro 96 million in 2003 to more than Euro 167 million
at the year-end.
The breakdown by currency confirmed the domination of loans in Euros and
other currencies, with a share of more than 95.2% of the total, remaining
substantially in line with last year’s levels. Loans in Rol continued to represent a
minimal percentage of the Bank’s own loan portfolio, remaining at around 5%.
As at 31 December 2004 doubtful loans reached Euro 7.6 million and were made
up of Euro 554 thousand of non-performing loans and Euro 7.1 million of watchlist entries. The non-performing loans/loans ratio, although slightly up, came in
at 0.33%, maintaining excellent levels.
At the end of 2004, the Bank was able to count on a client base of 6,094 units,
most of whom refer to the agencies of Bucharest and Timisoara, although the
other branches are also acquiring their own customer portfolio.
During the financial year, activities on the interbanking market were marked by
the treasury service centralised with the Parent Company. Overall, the Bank
increased its interbanking exposure, towards Veneto Banca in particular, in order
to support the sharp increase in loans. The growth in loans to the National Bank
of Romania should also be highlighted, relating to the obligatory reserve in Rol
and Dollars.
As at 31 December 2004, shareholders’ equity, including annual profit and the
reserve for general banking risk, totalled Euro 37.2 million compared to Euro 30.2
million at the end of 2003.
Capital for supervisory purposes, which was identical to Tier I capital, amounted
to Euro 34.3 million, with an increase of Euro 4.5 million compared to the
previous financial year.
directors’ report on operations 83
Direct deposits reached volumes over and above expectations, registering at
Euro 100.5 million as against the 50.3 million recorded at the end of 2003. This
was due to the trend in deposits from sales network customers, increasing from
Euro 50.3 to 75.5 million, and the issuing, on 30 December 2004, of a bond loan
of Euro 25 million, entirely subscribed by the Veneto Group’s company Ireland
Financial Services.
The breakdown of direct deposits by currency shows a strengthening of deposits
in Euros and other currencies to the detriment of deposits in Rol. The percentage
of deposits in Rol thus fell from 31.2% for 2003 to 26.9%.
directors’ report on operations 84
In terms of revenue, the interest margin, equal to Euro 7.9 million, increased by
more than 150% compared to 2003. In view of interest receivable which had more
than doubled, interest expense only increased by 62.2%. The increase compared
to the margin accounted for in the previous financial year was mainly due to the
increased traded volumes. The interest margin thus came to represent 60.3% of
the earning margin, as against 42.4% in 2003.
The service margin amounted to Euro 3.3 million, surpassing the 2003 results by
approximately Euro 1.5 million, corresponding to an increase of 84.6%. Among
the main items making up this aggregate, we should highlight the good result for
fees on collection and payment services, on credit commitments and loans. On
the other hand, services relating to credit/debit cards and safety deposit boxes are
at the introductory stage, and are expected to generate further revenue for the
next financial year.
Profits on financial transactions, that only refer to operations in exchange rates,
amounted to Euro 1.8 million.
Considering the above, during 2004 the earning margin rose to Euro 13.1 million,
with a growth of almost Euro 5.7 million, equal to 76.8%.
Overall, operating expenses came to Euro 6.2 million, recording an increase of
28.6% on an annual basis.
Personnel costs, equal to Euro 2.4 million, increased by 17.1% as a result of the
employment of new personnel to strengthen the distribution network. The Bank’s
workforce as at 31 December 2004 totalled 110, of which 104 were at the
Romanian branch and 6 at the Treviso office, compared to the 87 staff at the end
of the financial year 2003. The increase was due to 37 new employees and 14
resignations. The staff at central management increased during the year from 28
to 34, and that of the sales network from 59 to 76. A reduction of the weight of
the central structure on the total workforce can thus be seen, from 32.2% to
30.9%.
Other administrative expenses reached Euro 3.8 million, up by approximately
37%. Among others, significant growth was seen in expenses for maintenance of
furniture and fittings, insurance premiums and costs for detached personnel.
The cost/income ratio, which is good indicator of corporate efficiency, improved
compared to last year, going from 74.5% to 54%.
After write-downs of loans of Euro 885 thousand, amortisation and depreciation
of Euro 1.015 million, provisions for risks and charges of Euro 192 thousand,
extraordinary charges of Euro 49 thousand and allocations to the provision for
taxation of Euro 1.5 million, net profit, as mentioned, came in at Euro 3.3 million.
This enabled asset profitability to be maintained at very attractive levels, with a
ROE recorded at 10.6%, as against 6.2% for the previous financial year.
8.1.4 VENETO IRELAND FINANCIAL SERVICES
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: finance
Registered office: IFSC, 1 North Wall Quay – Dublin 1 (Ireland)
Amount of equity investment: 100.00%
Interest margin
Net income on services and financial transactions
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Trading portfolio
Investment portfolio
Performing assets
Total assets
Shareholders’ equity (including annual profit)
STRUCTURAL RATIOS (%)
Shareholders’ equity/Total assets
Portfolio total/Total assets
PROFITABILITY RATIOS (%)
R.O.E. (*)
Net profit/Total assets
Interest margin/Performing assets
Earning margin/Performing assets
Cost/Income ratio
2004
2003
abs. var.
% var.
9,682
3,873
13,554
-1,242
12,312
11,278
10,335
4,842
15,177
-1,495
13,682
11,082
-654
-969
-1,623
253
-1,370
195
-6.3%
-20.0%
-10.7%
-16.9%
-10.0%
1.8%
2004
2003
abs. var.
% var.
360,127
101,661
477,190
521,855
138,278
253,674
102,999
370,024
419,466
138,082
106,453
-1,338
107,166
102,389
195
42.0%
-1.3%
29.0%
24.4%
0.1%
2004
2003
abs. var.
% var.
26.5%
88.5%
32.9%
85.0%
2004
2003
8.88%
2.16%
2.03%
2.84%
9.16%
8.73%
2.64%
2.79%
4.10%
9.85%
-19.5%
4.1%
abs. var.
% var.
1.8%
-18.2%
-27.4%
-30.7%
-7.0%
(*) Calculated on average equity net of profit
Veneto Ireland Financial Services, apart from acting as a support for overall
financial strategies, manages the Group’s securities portfolio, benefiting from the
significant tax advantages in the Dublin market.
To this end the Company has received overall capital of Euro 254 million, divided
into equity of Euro 127 million and subordinated loans of the same amount.
For the other funding requirements, it relies on both the Parent Company’s
resources and loans sourced on the international market.
At the end of the financial year its securities portfolio totalled Euro 461.8 million, of
which Euro 101.7 million were invested and Euro 360.1 million available for trading.
Among the fixed assets, mention should be made of the two Junior securities relating
to the securitisation carried out in 2002 and 2003 by the Parent Company and the
subordinated bond loan issued by the Banca Meridiana, 99% owned by Veneto Banca.
The Company ended the financial year with a net profit of Euro 11.3 million, up
by 1.8% compared to the previous financial year.
The interest margin totalled Euro 9.7 million, a decrease compared to the 6.3%
for the previous financial year due to a slight dip in market rates, although it had
increased its securities portfolio by more than Euro 100 million.
Net income and profits on financial activities reached Euro 3.9 million, a decrease
of 20% compared to 2003, mainly due to more moderate trading activity in
accordance with the Group’s plans, governed by the Financial Risks Regulations,
to reduce the risk factors in the managed portfolio.
directors’ report on operations 85
ECONOMIC VALUES (in Euro thousand)
The earning margin thus came in at Euro 13.6 million, a decrease of 10.7%
compared to the previous year.
Personnel costs totalled Euro 565 thousand, a fall of 33.7% compared to the past
financial year as a result of the reorganisation carried out during the last quarter
of 2003.
Finally, other administrative expenses and amortisation and depreciation totalled
Euro 677 thousand, up by 5.3% compared to 2003.
Profit on ordinary activities was therefore Euro 12.3 million, a decrease of 10%
compared to the 2003 profits, for the reasons outlined above.
Profit on extraordinary activities, determined by gains made from the sale of fixed
securities, ended the financial year at Euro 720 thousand.
Income taxes, which totalled Euro 1.8 million, reduced the final net profit to the
Euro 11.3 million quoted above.
8.2. PRODUCT COMPANIES
directors’ report on operations 86
8.2.1. CLARIS LEASING
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: leasing
Registered office: Via Dei Prata, 14 - 31100 - Treviso
Amount of equity investment: 100.00%
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Loans to customers
Shareholders’ equity (including profit for the year)
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans to customers
Net non-performing loans/Shareholders’ equity
PROFITABILITY RATIOS (%)
R.O.E. (*)
Interest margin/Earning margin
Cost/Income ratio
STRUCTURAL AND PRODUCTIVITY RATIOS
Average no. of employees
Customer loans per employee
Earning margin per employee
2004
2003
abs. var.
% var.
4,472
5,162
-1,583
3,404
2,009
3,631
4,137
-1,241
1,227
648
841
1,025
-342
2,177
1,361
23.2%
24.8%
27.6%
177.5%
210.1%
2004
2003
abs. var.
% var.
323,472
22,404
267,378
20,595
56,094
1,809
21.0%
8.8%
2004
2003
abs. var.
% var.
0.02%
0.3%
0.07%
0.9%
-0.05%
-0.60%
-68.8%
-65.3%
2004
2003
abs. var.
% var.
9.96%
88.01%
32.32%
3.26%
89.20%
31.86%
6.70%
-1.19%
0.46%
205.5%
-1.3%
1.4%
2004
2003
abs. var.
% var.
12
26,956
430
12
22,281
345
4,675
85
0.0%
21.0%
24.8%
(*) Calculated on average equity net of profit
Sales activity was mainly directed towards the sector of Veneto Banca Group
companies, and especially towards customers of the Parent Company and the
Banca di Bergamo, while direct activities remained marginal.
During 2004, 697 contracts were taken out, for a total asset cost of Euro
135,484,871 and a contract countervalue (sum of advances, sum of rentals and
redemptions) of Euro 153,382,751. The division of asset cost by type was as
follows: motor vehicles 4.5%, industrial vehicles 2.9%, industrial assets 31.5%,
leisure yachts 1.3% and real estate 59.8%.
At the end of the financial year the loans relating to contracts receivable totalled
Euro 323 million, while the total of fixed assets relating to assets under
construction or subject to delivery and consequently awaiting activation of the
financial lease agreements was Euro 38.7 million.
Overall, the Company ended 2004 with a net profit of Euro 2 million, up by 210%
compared to 2003.
The interest margin rose by 23.2%, reaching Euro 4.5 million, while the earning
margin was recorded at Euro 5.2 million, up by 24.8%. Operating expenses went
from Euro 1.2 to 1.6 million, up by 27.6%.
8.2.2. CLARIS FACTOR
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: factoring
Registered office: Piazza G.B. Dall’Armi, 1 – 31044 – Montebelluna (TV)
Amount of equity investment: 100.00%
ECONOMIC VALUES (in Euro thousand)
Interest margin
Earning margin
Operating expenses
Profit on ordinary activities
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Turnover
Gross banking income
Direct deposits
Loans to customers
Total assets
Shareholders’ equity
STRUCTURAL RATIOS (%)
Loans to customers/Direct deposits
CREDIT QUALITY RATIOS (%)
Net non-performing loans/Loans to customers
Net non-performing loans/Shareholders’ equity
PROFITABILITY RATIOS (%)
R.O.E. (*)
Interest margin/Earning margin
Cost/Income ratio
2004
2003
abs. var.
% var.
5,004
6,345
-1,567
4,779
2,594
4,210
5,281
-1,376
3,905
2,014
794
1,065
-191
874
581
18.9%
20.2%
13.9%
22.4%
28.8%
2004
2003
abs. var.
% var.
316,655
172,248
57,161
115,088
116,702
7,369
296,795
241,420
127,071
114,349
139,352
6,674
19,860
-69,172
-69,911
739
-22,650
694
6.7%
-28.7%
-55.0%
0.6%
-16.3%
10.4%
2004
2003
abs. var.
% var.
201.34%
89.99%
111.35%
111.4%
2004
2003
abs. var.
% var.
2.34%
39.26%
2.53%
40.31%
-0.19%
-1.05%
-7.5%
-2.6%
2004
2003
abs. var.
% var.
54.99%
78.87%
24.79%
43.92%
79.73%
26.18%
11.07%
-0.86%
-1.39%
25.2%
-1.1%
-5.3%
directors’ report on operations 87
Credit quality is still excellent, with an impact on non-performing loans on the
total loans of almost nil.
Considering the solidity of loans and the appropriacy of the provisions for risks
and charges already set up compared to the volume of current loans with an
impact of little under 1%, it was considered sufficient to limit the provision for the
year to Euro 90.2 thousand, formed entirely of analytical write-downs on entries
classified as non-performing.
STRUCTURAL AND PRODUCTIVITY RATIOS
Average no. of employees
Customer loans per employee
Total deposits per employee
Gross banking income per employee
Earning margin per employee
2004
2003
abs. var.
% var.
7
16,441
8,166
24,607
906
8
14,294
15,884
30,178
660
-1
2,147
-7,718
-5,571
246
-12.5%
15.0%
-48.6%
-18.5%
37.3%
(*) Calculated on average equity net of profit
The national factoring market, after the positive results of past years and the
substantial stability of 2003, recorded signs of a slow-down in the financial year
just ended, as shown by the first findings of the professional association.
Despite everything, for Claris Factor 2004 ended with a net profit of Euro 2.6
million, up by 28.8%.
In particular, a financial spread was recorded of Euro 5 million, up by 18.9%
thanks to the favourable performance of deposits and to efficient lending policies.
The trend in the service margin was also positive, up by 25%.
directors’ report on operations 88
In terms of costs, there was a positive change of 13.9%, with an increase,
however, less than proportional to the income performance. This performance is
due to increased personnel costs, up by 6.6%, but especially to the increase in
other administrative expenses, amounting to 18.7%.
Credit quality continues to remain high, with an impact of net non-performing
loans to loans net of the position guaranteed by the Parent Company of 0.6%, a
slight drop compared to the 2003 figure.
The provisions for adjustments totalled Euro 1,573 thousand of which 323
thousand were in view of analytical write-downs on non-performing loans and
Euro 1,250 thousand for standard write-downs.
Finally total loans were consolidated at Euro 104 million, while the Company’s
shareholders’ equity including profit for the year reached Euro 7.4 million.
8.2.3. CLARIS ASSICURAZIONI
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: insurance agency
Registered office: Piazza G.B. Dall’Armi, 1 – 31044 – Montebelluna (TV)
Amount of equity investment: 100.00%
ECONOMIC VALUES (in Euro thousand)
2004
2003
abs. var.
% var.
Production value
Service costs
Personnel cost
Total cost of sales
Difference between production value
and cost of sales
Net profit
2,843
2,169
347
2,656
2,556
2,025
324
2,485
287
144
22
172
11.2%
7.1%
6.9%
6.9%
187
79
71
21
115
58
160.9%
271.6%
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
2004
2003
abs. var.
% var.
Fixed assets
Working capital
Payables
Shareholders’ equity including profit for the year
201
4,992
4,981
171
246
2,438
2,552
92
-45
2,555
2,428
79
-18.2%
104.8%
95.1%
86.3%
RATIOS
2004
2003
abs. var.
% var.
97.68%
93.44%
78.25%
32.44%
97.20%
81.70%
65.24%
-3.76%
-3.45%
201.1%
-3.9%
-4.2%
R.O.E. (*)
Cost/Income ratio (with amortisations)
Misc. expenses/Production value
(*) Calculated on average equity net of profit
The Company’s target is to distribute and manage, both via the Group
Companies and directly, insurance contracts of any kind. It is also responsible for
conducting important operational, commercial and training support, on behalf of
the banking sales network, as well as after-sales assistance.
During 2004 it achieved a net profit of Euro 79.2 thousand, up by 21.3 thousand
on the previous year.
Fees receivable came in at Euro 2.8 million with an increase of 11.2% compared
to the 2.6 million for 2003. The result can mainly be attributed to the production
of the bank distribution network.
Cost of sales, up by 6.9%, increased less than income, enabling a slight
improvement in the cost/income ratio.
The profit on traditional management was Euro 187 thousand, as against 71
thousand for 2003.
8.2.4. CLARIS BROKER
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
ECONOMIC VALUES (in Euro thousand)
2004
2003
abs. var.
% var.
Production value
Cost of sales
of which personnel cost
Financial income and charges
Net profit
839
839
168
-16
-42
859
819
160
-15
2
-20
20
8
1
-44
-2.4%
2.4%
4.7%
0.9%
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
2004
2003
abs. var.
% var.
Premiums collected
Fixed assets
Receivables
Payables
Total assets
Shareholders’ equity (including profit
for the year)
7,990
79
1,489
1,383
1,575
7.303
183
5,246
5,237
5,459
687
-104
-3,757
-3,854
-3,884
9.4%
-57.0%
-71.6%
-73.6%
-71.2%
110
153
-42
-27.6%
STRUCTURAL RATIOS
2004
2003
abs. var.
% var.
7.02%
94.5%
2.79%
96.1%
4.23%
-1.60%
151.6%
-1.7%
Shareholders’ equity/Total assets
Credits/Total assets
During 2004, Claris Broker’s activities generated commission income for a total of
Euro 838.9 thousand, a decrease of 2.4% compared to 2003. At the same time
total costs came in at Euro 838.8 thousand, up by 2.4%.
The net profit on financial operations showed a loss of Euro 15.5 thousand.
Together with the negative balance for extraordinary operations, this produced a
gross pre-tax result of Euro -19.2 thousand. As a result of taxes, net profit finally
came in at Euro -42 thousand.
directors’ report on operations 89
Area of activity: insurance brokering
Registered office: Via Serena, 63 – 31044 – Montebelluna (TV)
Amount of equity investment: 100.00%
8.2.5. PALLADIO FINANZIARIA
ECONOMIC/FINANCIAL VALUES AND KEY MANAGEMENT
FIGURES
Area of activity: financial
Registered office: Strada Statale SS Padana verso Verona, 6 - 36100 - Vicenza
Amount of equity investment: 21.21%
ECONOMIC VALUES (in Euro thousand)
Financial spread, net of dividends
Interest margin
Income on services and financial transactions
Earning margin (*)
Operating expenses
Net profit
FINANCIAL AND OPERATING
VALUES (in Euro thousand)
Loans to customers
Bonds and other fixed income securities
Shares, quotas and other variable
income securities
Equity investments
Performing assets
Total assets
Shareholders’ equity
(including profit for the year)
directors’ report on operations 90
STRUCTURAL RATIOS (%)
Shareholders’ equity/Total assets
Loans to customers/Total assets
Equity investments/Total assets
PROFITABILITY RATIOS (%)
R.O.E. (**)
Earning margin/Total assets
Cost/Income ratio
2004
2003
abs. var.
% var.
2,631
12,128
6,170
25,376
-7,593
15,063
1,007
1,937
4,899
14,950
-6,454
5,526
1,624
10,191
1,271
10,426
-1,139
9,537
161.3%
526.1%
25.9%
69.7%
17.6%
172.6%
2004
2003
abs. var.
% var.
69,063
30,262
30,090
45,502
38,973
-15,240
129.5%
-33.5%
14,172
52,114
213,857
222,951
19,433
63,859
178,169
192,336
-5,261
-11,745
35,688
30,615
-27.1%
-18.4%
20.0%
15.9%
180,303
132,131
48,172
36.5%
2004
2003
abs. var.
% var.
80.87%
30.98%
23.37%
68.70%
15.64%
33.20%
12.17%
15.34%
-9.83%
17.7%
98.0%
-29.6%
2004
2003
abs. var.
% var.
10.32%
11.38%
32.22%
4.53%
7.77%
46.63%
5.79%
3.61%
-14.41%
127.8%
46.5%
-30.9%
(*) Including profits /losses of equity investments valued at shareholders’ equity
(**) Calculated on average equity net of profit
Palladio Finanziaria, which conducts merchant banking activities, ended 2004
with a net profit of Euro 15 million, representing the best result ever obtained by
the Group.
During the financial year just ended, equity investments were disposed of,
achieving significant capital gains. In addition, significant dividends were
generated from current equity investments.
Excellent results are also being obtained from management of the “Fondo Star”.
Returns on investments are proceeding in line with forecasts, to the extent that
there is a possibility of launching a new, similar Fund so that investments can
continue to be made while awaiting sale of the portfolio.
Finally, it should be mentioned that in December 2004 the amount of accrued
taxes is not significant. This is mainly a result of the tax settlement to which the
Company has agreed. This amount is classified among other assets, as it is amply
covered by the tax credits entered in the settlement.
9. SIGNIFICANT EVENTS OCCURRING
AFTER YEAR END
Following closure of the financial year, the acquisition of Banca del Garda spa was
certainly one of the highlights.
In terms of assets, mention should also be made of the early conversion, in the
first few months of the year, of the last third of the subordinated convertible loans
“Veneto Banca 2000/2007 2%”and “Veneto Banca 2001/2007 1.5%”, as envisaged
by the integrated capitalisation plan approved during the final quarter of 2004
and in accordance with the resolution of the shareholders’ meeting on 2
December 2004.
10. BUSINESS OUTLOOK
The Group will continue with its expansion programme, both by accurately
implementing its branch programme with the opening of a significant number of
sales outlets by the Parent Company and subsidiary banks, located throughout
their respective areas of operation, and by increasing market share. This will be
pursued via a policy which is very attentive to the demands of traditional
customers, formed of both private individuals and SMEs.
In terms of income, a further improvement in the profit on ordinary activities has
been confirmed, with regards to the prospects for Veneto Banca and its main
subsidiaries, whose contribution to overall profitability can be considered as
increasingly significant.
With regard to the main income areas, the actions taken are directed towards
increasing the interest margin in proportion with the traded volumes, via a
selected pricing policy, more in line with the risks assumed and expectations in
terms of market rates.
Recovery will also be important in terms of income from services, pursued via
intensive diversification of the service products offered. Managed savings, also in
consideration of the demanding targets that the Group has set itself, should
represent an important springboard for the growth of this economic aggregate.
At the same time, careful monitoring of costs, also by activating new process
analysis procedures, should lead to increased efficiency, taking the cost/income
ratio, already positive, to outstanding levels.
directors’ report on operations 91
A positive trend is forecast for this financial year, on the basis of prospects for the
banking system and encouraging internal opportunities.
PROPOSAL FOR THE REPORTS AND
ACCOUNTS APPROVAL AND PROFIT
LOCATION
Dear Shareholders,
In compliance with legal and statutory provisions, we are submitting for your
attention the financial statements for the year 2004, made up of the balance
sheet, the profit and loss account and the notes to the financial statements,
together with the relative annexes and report on operations.
proposal for the reports and accounts approval 92
We therefore propose the following distribution of the net profit of
Euro 45,658,170.71:
• to the “legal reserve” in the amount of 10%
of the total net profit
Euro
4,565,817.07
• to the “extraordinary reserve”
Euro
21,979,923.89
• to the Shareholders for the 2004 dividend in the amount
of Euro 0.55 per share
Euro
18,085,120.90
• to the Board of Directors in the amount of 2.50% after
deducting the allocation to the legal reserve pursuant
to art. 47 of the Company By-laws
Euro
1,027,308.84
Total
Euro
45,658,170.71
Dear Shareholders,
I extend my regards and many thanks for their collaboration to the central and
peripheral offices of the Banca d’Italia, and in particular to the Governor Antonio
Fazio, the Treviso Branch Manager Corrado de Gioia-Carabellese and his deputy
Giuseppe Manitta.
Thanks are also due to the Associazione Nazionale fra le Banche Popolari (National
Association of Popular Banks) and personally to the Chairman, Carlo Fratta
Pasini and the General Manager Giorgio Carducci, and also to the Associazione
Bancaria Italiana (Italian Banking Association) and its Chairman Maurizio Sella,
as well as the Ufficio Italiano Cambi (Italian Exchange Control Office) and the
Istituto Centrale delle Banche Popolari Italiane.
Our esteem for their professionalism, commitment and sense of responsibility,
demonstrated at all times, go to the General Manager Vincenzo Consoli, to the
Deputy General Managers Armando Bressan, Mosè Fagiani, Romeo Feltrin and
Mauro Gallea and to all personnel, at all levels.
Montebelluna, 29 March 2005
on behalf of the Board of Directors
The Chairman
Dr. Flavio Trinca
C O N S O L I D AT E D F I N A N C I A L
S TAT E M E N T S
A S AT 3 1 D E C E M B E R 2 0 0 4
"Declivi" Hills and vines in Valdobbiadene
Marco Pagin - Branch of Villorba (TV)
BALANCE SHEET
ASSETS (amounts in Euro thousand)
10
Cash and balances with central banks and post offices
20
Treasury bonds and similar instruments eligible for
refinancing with central banks
30
Loans to banks:
(a) on demand
(b) other receivables
40
2004
2003
39,853
50,635
2,149
59,783
289,173
249,950
51,399
78,657
237,774
171,293
Loans to customers
5,206,675
4,367,529
of which:
- deposits in administration
50
4,744
Bonds and other debt securities:
2,109
492,905
351,324
(a) issued by government
136,516
96,919
(b) issued by banks
112,579
69,028
21,241
9,833
142,111
70,803
of which:
own securities
(c) issued by financial institutions
of which:
own securities
consolidated financial statements as at 31 december 2004 94
(d) issued by others
0
0
101,699
114,574
60
Shares, quotas and other equity securities
16,647
18,840
70
Equity investments
88,569
72,652
80
a) valued by the equity method
48,752
33,497
b) other
39,817
39,155
Equity investments in Group companies
a) valued by the equity method
b) other
378
378
51,161
51,161
0
90
Positive consolidation differences
100
Positive differences arising from shareholders’ equity
110
Intangible fixed assets
0
75,975
80,709
4,126
18,331
30,290
35,472
of which
- start-up costs
- goodwill
1
111
16,336
17,244
120
Tangible fixed assets
139,870
126,731
150
Other assets
220,385
239,746
160
Prepayments and accrued income:
37,056
35,348
a) accrued income
b) prepayments
33,535
30,890
3,521
4,458
0
0
of which:
- issue discount on securities
TOTAL ASSETS
6,644,051
VICE GENERAL MANAGER
CHIEF ACCOUNTANT
Accountant Armando Bressan
GENERAL MANAGER
Accountant Vincenzo Consoli
5,758,211
STATO Patrimoniale
(in Euro)
LIABILITIES (amounts in Euro thousand)
10
20
Due to banks:
122,834
(b) on maturity or with notice
203,103
Due to customers:
2,482,254
2,248,523
343,243
233,731
2,136,508
1,899,682
(b) certificates of deposit
(c) other securities
40
Deposits in administration
50
Other liabilities
80
351,058
2,744,590
Securities issued:
(a) bonds
70
444,172
93,114
3,087,833
(b) on maturity or with notice
60
2003
325,937
(a) on demand
(a) on demand
30
2004
191,426
133,884
45,400
156,950
Accruals and deferred income:
6,627
(b) deferred income
3,976
Employees’ severance fund
13,296
189,435
12,733
8,442
4,291
26,850
Provisions for risks and charges:
(b) provisions for taxation
9,829
158,638
10,603
(a) accrued expenses
(a) pensions and similar benefits
1,907,863
1,617,029
26,001
43,627
39,208
0
0
26,291
26,568
future risks and charges
(d) other provisions
0
0
17,336
12,640
90
Credit risk reserve
100
Reserve for general banking risk
110
Subordinated liabilities
120
Negative consolidation differences
140
Minority interests
19,956
19,071
150
Share capital
98,647
95,069
160
Issue premiums
304,798
281,016
170
Reserves:
138,499
111,538
(a) legal reserve
(b) reserve for own equity shares or quotas
(c) statutory reserves
(d) other reserves
509
2,246
39,057
6,057
181,814
82,065
40
40
34,860
30,583
0
0
0
0
103,639
80,955
180
Revaluation reserves
5,554
5,554
190
Loss brought forward
0
-53
200
Profit for the year
55,352
40,646
6,644,051
5,758,211
TOTAL LIABILITIES
CHAIRMAN
Dr. Flavio Trinca
STATUTORY AUDITORS
Dr. Fanio Fanti
Dr. Michele Stiz, Dr. Diego Xausa
consolidated financial statements as at 31 december 2004 95
(c) consolidation provision for
GUARANTEES AND COMMITMENTS
(amounts in Euro thousand)
10
Guarantees provided
2004
2003
296,040
259,279
of which:
- acceptances
- other guarantees
20
5,909
3,123
290,131
256,156
Commitments
349,440
236,836
of which:
156,484
0
consolidated financial statements as at 31 december 2004 96
- for sale with repurchase operation
VICE GENERAL MANAGER
CHIEF ACCOUNTANT
Accountant Armando Bressan
GENERAL MANAGER
Accountant Vincenzo Consoli
PROFIT AND LOSS ACCOUNT
(amounts in Euro thousand)
10
Interest income and similar items
2004
2003
265,174
247,027
of which:
- on amounts due from customers
- on debt securities
20
235,333
214,098
22,789
25,480
Interest expense and similar items
101,475
100,572
of which:
30
- on amounts due to customers
36,343
29,960
- on securities issued
51,731
44,973
Dividends and other income:
(a) from shares, quotas and other equity securities
(b) from equity investments
(c) from equity investments in Group companies
6,067
5,700
5,168
4,791
899
909
0
0
40
Fee and commission income
73,197
63,447
50
Fee and commission expenses
11,365
10,019
60
Profit (loss) on financial transactions
28,145
30,015
70
Other operating income
27,180
28,115
80
Administrative expenses:
(a) personnel costs
164,679
152,817
96,461
89,415
- wages and salaries
67,382
63,330
- social security charges
18,658
16,243
- employees’ severance
3,543
3,395
- pensions and similar benefits
(b) other administrative expenses
90
Write-downs of tangible and intangible fixed assets
100
Provisions for risks and charges
110
Other operating charges
120
Write-downs of loans and provisions
for guarantees and commitments
130
3,016
2,692
68,218
63,402
22,421
20,127
2,960
471
764
566
30,741
27,593
2,965
1,628
0
335
Write-backs of loans and provisions
for guarantees and commitments
140
Provisions to credit risk reserves
150
Write-downs of financial fixed assets
44
2,174
160
Write-backs of financial fixed assets
892
0
4,958
6,371
170
Profit (loss) attributable to equity investments
valued by the equity method
180
Profit on ordinary activities
74,129
67,629
190
Extraordinary income
49,092
5,247
200
Extraordinary charges
8,858
5,648
210
Extraordinary profit (loss)
40,234
-401
230
Change in reserve for general banking risk
240
Income taxes for the year
250
Minority interests
260
PROFIT FOR THE YEAR
CHAIRMAN
Dr. Flavio Trinca
-33,000
0
25,061
25,893
-950
-689
55,352
40,646
STATUTORY AUDITORS
Dr. Fanio Fanti
Dr. Michele Stiz, Dr. Diego Xausa
consolidated financial statements as at 31 december 2004 97
of which:
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
PRESENTATION AND CONTENTS OF THE
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements are made up of the balance sheet, the
profit and loss account and the notes to the financial statements, and they are
supplemented with the Board of Directors’ report, as established by Legislative
Decree No. 87/92, which, in pursuance of the European Community Directives
No. 86/635 and No. 89/117, regulates the annual and consolidated accounts of
banks.
notes to the consolidated financial statements 98
The notes to the financial statements explain and analyse the consolidated
financial statements, and they contain the information required by Legislative
Decree No. 87/92, the ruling of Banca d’Italia No. 14 dated 16 January 1995
and other laws. Although not specifically requested, complementary
information is also provided about all matters that are deemed necessary to
give a true and fair view. Therefore, the following documents are attached to
the notes to the financial statements:
A - Statement of changes in the consolidated shareholders’ equity;
B - Map of the Veneto Banca Group.
The consolidated financial statements are audited by PricewaterhouseCoopers
spa, which was entrusted with this task for the three-years period 2004-2006.
CONSOLIDATION AREA
The consolidation area, which is unchanged as compared to the previous
financial year, comprises the Parent Company Veneto Banca and the significant
equity investments mentioned in the special statement attached to these notes
(Annex B).
CONSOLIDATION CRITERIA
All subsidiaries performing banking, financial or other activities pertaining to
the Group are consolidated using the line-by-line consolidation method.
Subsidiaries that do not perform banking, financial or other activities
pertaining to the Group and affiliates in which the Group holds a significant
equity investment are assigned a value equal to the corresponding share of
their shareholders’ equity, including the profit and loss result for the period.
The leasing company is consolidated based on the financial statements drawn
up according to the financial method.
The draft financial statements of the consolidated companies as at 31
December 2004 have been prepared by the respective Boards of Directors prior
to approval of the Group consolidated financial statements by the Board of
Directors of Veneto Banca, and they are to be approved by the respective
Shareholders’ Meetings, which shall take place before the Parent Company
Shareholders’ Meeting is held.
The key consolidation criteria used are as follows:
This method consists in the line-by-line consolidation of the balance sheet and
profit and loss account items of the subsidiaries.
After allocating to minority interests their shares of equity and profit and loss
for the period, the book value of the equity investments consolidated using this
method is recorded as a contra-entry to the respective share of the
shareholders’ equity as at the date of first consolidation, and the surplus
resulting from this comparison is entered under the items “positive/negative
consolidation differences”.
The consolidation process generated goodwill of 75,975 thousand Euros. This
amount reflects the surplus of the acquisition cost of equity investments in
Banca Italo-Romena, Banca di Bergamo, Banca Meridiana as compared to the
corresponding equity shares resulting from the financial statements of these
companies. It is entered in the consolidated balance sheet under item 90
“positive consolidation differences”, and, for the purposes of the financial
statements, it is usually amortized over a period of 10-20 years with regard to
the expected future economic life of the investment.
Dividends distributed within the Group are adjusted and allocated to reserve,
being already included in profits (losses) for previous years.
Dividends recorded on an accrual basis are reversed, since they are already
included in the profit and loss results of the consolidated companies.
The most significant receivable/payable existing as at 31 December 2004 and
the most important revenue/cost items between the companies included in the
consolidation area have been eliminated.
The financial statements of the consolidated companies, prepared according to
patterns different from those established for banks, have been conformed to
the latter.
B) CONSOLIDATION BY THE EQUITY METHOD
Equity interests valued under the equity method are adjusted to the share of
shareholders’ equity attribuitable to the Group and resulting from the financial
statements of subsidiaries as of the date of first consolidation. The adjustment
of the value of these equity investments upon first consolidation is entered
under the items “positive/negative consolidation differences”.
Positive differences arising from shareholders’ equity are amortised over a
10-year period.
RECONCILIATION BETWEEN SHAREHOLDERS’ EQUITY AND
PROFIT FOR THE YEAR SHOWN AS PER THE FINANCIAL
STATEMENTS OF THE PARENT BANK AND THE VALUE
REPORTED IN THE CONSOLIDATED FINANCIAL
STATEMENTS AS AT 31 DECEMBER 2004
The reconciliation between the shareholders’ equity as at 31 December 2004
and the profit for the year ended on that date reported in the consolidated
financial statements, and those of the Parent Bank is as follows:
notes to the consolidated financial statements 99
A) LINE-BY-LINE CONSOLIDATION
Share capital
and equity reserves
Balances of the statutory financial statements
of the Parent Company
Elimination of the carrying amount of
consolidated equity investments
• difference between the carrying amounts
and corresponding equity shares
• Group share of results by subsidiaries
• positive consolidation differences
Elimination of the effects deriving from transactions
among consolidated companies and other adjustments
• dividends from consolidated companies
• adjustments for leasing contracts within the Group
• adjustments for application of uniform accounting
policies among consolidated companies
Effects concerning non-consolidated companies
• results concerning the valuation
of non-consolidated companies
• positive differences arising from shareholders’ equity
• sales of equity investments
• adjustments for application of uniform accounting
policies among consolidated companies
• elimination of dividends
Shareholders’ equity and profit (loss) for the year
of the Group
Minority interests in shareholders’ equity
and profit (loss) for the year
notes to the consolidated financial statements 100
CONSOLIDATED SHAREHOLDERS’ EQUITY
AND PROFIT (LOSS)
581,893
Profit (loss) Shareholders’
for the year
equity
45,658
627,551
80,709
11,947
-4,734
-82,256
11,947
75,975
3,882
31
-3,882
79
0
110
-118
-676
-794
-17,226
6,605
11,148
4,803
-2,479
6,702
-12,423
4,126
17,850
-295
2,222
156
-2,222
-139
0
586,595
55,352
641,947
19,006
950
19,956
606,601
56,302
661,903
-82,256
PART A - ACCOUNTING POLICIES
The consolidated financial statements are prepared pursuant to applicable laws,
taking into consideration the accounting principles applied in Italy to correctly
interpret such laws and in accordance with the following general valuation criteria:
• Consistency of application: the accounting policies are applied continuously over
time, except for what is expressly stated herein with reference to the securities
section.
• Substance over form: whenever possible, substance shall prevail over form, and
the time of settlement of a transaction shall prevail over the time of
negotiation so as to give a correct picture of the financial situation.
• Going concern: the valuations in the financial statements are made based on the
prospect that the business shall continue in operational existence.
• Prudence: reference is made only to the profit achieved as at the end of the
financial year, except for the provisions of specific valuation criteria. The risks
and losses pertaining to the financial year and that have become known after
the close of the financial year are also taken into account.
• Accrual principle: income and charges are recorded on an accrual basis.
• Separate valuation: on-balance sheet and off-balance sheet assets and liabilities
are valued separately, which means that no global valuations are made, except
for what is stated under valuation consistency.
• Valuation consistency: the on-balance sheet and off-balance sheet assets and
liabilities that are connected to each other are valued consistently, which
means that homogeneous criteria are used.
The principles adopted, which are listed below, have been defined in agreement
with the Board of Statutory Auditors, when provided for by relevant regulations.
SECTION 1 - EXPLANATION OF THE
VALUATION CRITERIA
QUALITATIVE INFORMATION ON CREDIT RISKS
The classification of anomalous loans (non performing loans, watch-list loans,
restructured loans, etc.) is based on recording criteria established by supervisory
regulations.
In detail:
• Loans are classified as “non performing loans” if debtors are insolvent. The
estimated recoverable amount is determined based on the valuation of the
debtor’s equity and existing personal and real securities.
• Loans are classified as “watch-list loans” when debtors are in temporary
difficulties, but they are expected to overcome them in a reasonable lapse of
time. Arrangements classified as such are managed by the Legal Department,
which monitors their continuation or the payment of the outstanding debt.
The estimated recoverable amount of watch-list loans is determined in the
same way as for non performing loans.
• Loans are classified as “loans under rescheduling”when the counterparty has
debts with several banks and it applied for consolidation.
• Loans are classified as “restructured loans” when they are issued by several
banks, which grant a debt moratorium renegotiating debts at lower rates than
market rates. The Legal Department manages also this category. These loans
are valued using the same criteria as those used for non performing loans and
watch-list loans.
• Loans to counterparties resident in countries not belonging to the OECD area
are classified as “non-guaranteed loans exposed to country risk”.
CREDIT ACCOUNTING POLICIES
The value of on-balance sheet credits, including accrued contract interest and
interest on delayed payment, is equal to their estimated recoverable amount.
This value is obtained by deducting from the total credit amount the expected
principal and interest losses, defined according to specific analyses for non
performing loans, watch-list loans, restructured loans and loans under
rescheduling, and on a lump-sum basis for the remaining items. Performing
loans to customers and watch-list loans arising from the so-called “physiological
risk” have been written down on a lump-sum basis with a percentage equal for
all items, also determined according to the historical trend of the losses incurred,
the product category to which customers belong, the geographic operational area
and any other aspect pertaining to the entries.
The original value of credits shall be reinstated in the following years if the
reasons for write-downs cease to exist.
ACCOUNTING POLICIES FOR GUARANTEES AND
COMMITMENTS
The guarantees provided are entered at the total value of the commitment
undertaken.
Any losses in these operations are reflected through accruals to provisions for
risks and charges.
Securities and foreign exchanges to be received are entered at the forward price
established by contract with the counterparty.
Commitments to allocate funds, undertaken towards counterparties and
notes to the consolidated financial statements 101
1. LOANS, GUARANTEES AND COMMITMENTS
customers, are entered at the amount to be settled. Definitely sold loans (nonrecourse loans) have been written-off from the consolidated financial statements,
and the write-downs or write-backs have been charged to the Profit and Loss
Account at an amount equal to the difference between the consideration received
and the value at which they had been entered in the consolidated financial
statements.
2. SECURITIES AND “OFF-BALANCE SHEET”
TRANSACTIONS (OTHER THAN FOREIGN
CURRENCY TRANSACTIONS)
notes to the consolidated financial statements 102
Beginning in 2004, the weighted average cost method was adopted for the
valuation of securities rather than the LIFO method on a yearly basis, which was
utilised until the financial year ending 31 December 2003. For trading securities
listed on regulated markets, market value has been used.
The change has not produced any significant results.
2.1 INVESTMENT SECURITIES
The securities classified as financial fixed assets represent a stable investment for
the Company, since they are bound to be used in the long run, and consequently
they are recorded and valued at the acquisition cost. However, the cost value is
reduced in case of losses that are deemed to be other than temporary.
The original cost shall be reinstated in the following years if the reasons for the
write-down cease to exist.
Unlisted investment securities are valued at historical cost.
Issue spreads are calculated according to the provisions of art. 8 of Legislative
Decree dated 27/12/1994, including the amount accrued in taxable income for the
year.
2.2 TRADING SECURITIES
Securities not classified as financial fixed assets are valued at market value, if
listed on regulated markets; at the lower of the cost, determined according to the
daily weighted average cost method and the market price, if not listed.
Market value is determined:
• with regard to securities traded in organized markets, by taking the reference
price on the closing date of the period;
• with regard to unlisted Italian and foreign securities, from the estimated
recoverable amount, obtained by discounting back all future financial flows at
current market rates, taking into account the spreads attributable to issuing
bodies for the risk associated thereto, and from the exact prices obtainable
from information circuits normally used all over the world and objectively
determinable.
The original cost of securities not listed on regulated markets whose value has
previously been written down shall be reinstated in the following years if the
reasons for the write-down cease to exist.
REPOS according to which the transferee shall resell the securities for forward
delivery are entered as deposit and loan financial transactions. The deposit cost
and loan income, consisting in the matured coupons of securities and the spread
between the spot price and forward price of such securities, are entered as
interest on an accrual basis.
Issue spreads have been calculated according to the provisions of art. 8 of
Legislative Decree dated 27/12/1994, including the amount accrued in the taxable
income for the year.
“OFF-BALANCE SHEET” TRANSACTIONS (OTHER THAN
FOREIGN CURRENCY TRANSACTIONS)
Derivatives are valued as follows:
b) Trading derivatives:
• listed derivatives are valued at book value, and capital losses, if any, are
entered in the profit and loss account as loss on financial transactions
with “other liabilities”as a contra-entry;
• derivatives non listed in regulated markets are valued individually by
discounting future cash flows using the market interest rate curve at 31
December 2004. Any resulting capital losses are recorded in the profit and
loss account as losses from financial transactions with counterparties
“other liabilities”;
• unlisted derivatives traded for client accounts, as for brokers, are valued
taking into account the creditworthiness of the counterparty, with the
result being provided for in the reserve for risks and charges;
• over the year, both the spreads realised and the margins paid and/or
collected upon contract signature are entered under the item“profit (loss) on
financial transactions”.
c) Spreads on unlisted non-trading derivatives coming to maturity over the year,
are recorded on an accrual basis as interest income and interest expense
according to the proceeds or costs generated by the assets/liabilities hedged,
or based on the period of validity of contracts in case of connected securities
or general hedging.
d) The premiums paid or collected for option trading are entered under “other
assets” or “other liabilities” respectively. These premiums are debited or
credited to the profit and loss account if the option is not exercised. The
premium value for exercised options on securities is added to or deducted
from the costs or proceeds relating to the purchased or sold security.
e) “Off-balance sheet” security transactions, that is, transactions having a value
date in a successive financial period are valued using the same criteria as those
established for the categories of “trading securities”. “Off-balance sheet”
transactions connected between each other or with portfolio securities are
valued consistently with each other.
f) Commissions and final up-fronts, consisting in the advance collection or
payment of an amount of money pertaining to the contract, which will no
longer be returned to (by) customers, are recorded in the financial year in
which the contracts are signed.
notes to the consolidated financial statements 103
a) Derivatives for the hedging of assets and liabilities for trading purposes or
connected to other assets and liabilities:
• listed and unlisted hedging derivatives for trading purposes available as at
close of the financial year are valued according to the assets/liabilities
hedged or connected thereto;
• over the year, spreads are recorded on an accrual basis as interest income
and interest expense according to the proceeds or costs generated by the
assets/liabilities hedged, or based on the period of validity of contracts in
case of connected securities or general hedging.
3. EQUITY INVESTMENTS
Pursuant to art. 18, par. 1, of Legislative Decree No. 87/1992, equity investments
are valued at acquisition cost, determined based on the purchase or subscription
price or the value assigned upon allotment. Equity investments are written down
in case of losses deemed to be other than temporary according to par. 2, second
sentence of the aforementioned art. 18. The original value is reinstated in the
following years if the reasons for the write-down cease to exist.
Dividends are recorded in the financial year in which they are collected.
notes to the consolidated financial statements 104
4. ASSETS AND LIABILITIES IN FOREIGN
CURRENCY (INCLUDING “OFF-BALANCE
SHEET” TRANSACTIONS)
Foreign currency transactions are recorded at the time of settlement.
Assets, liabilities and “off-balance sheet”spot transactions in foreign currency are
converted in Euro at the exchange rates ruling at year-end; the effect of such
valuation is charged to the profit and loss account.
“Off-balance sheet”forward transactions are valued:
• in case of hedging transactions, at the exchange rate ruling at year-end; the
spreads between the forward and spot exchange rate of such transactions are
entered in the profit and loss account according to a temporal distribution
consistent with the recording of interest arising from hedged assets or
liabilities;
• in case of trading transactions, at the corresponding forward exchange rates
ruling at year-end;
• unlisted trading currency options are valued individually using current market
values, and capital losses, if any, are entered in the profit and loss account as
loss on financial transactions;
• unlisted currency options for brokerage on behalf of customers are valued
taking into account the creditworthiness of the counterparties, the relevant
result is provided for in a reserve for risks and charges.
Equity investments in foreign currency are entered at the historical demand rate,
while investment and trading securities in foreign currency are written down or
up at the exchange rate ruling at year-end.
Costs and proceeds in foreign currency are entered at the exchange rate ruling at
the time of recording.
As to the conversion of the year-end balances resulting from the accounts of the
Bucharest branch, such conversion is performed according to the “temporal
method”.
Therefore:
• the conversion of monetary assets and liabilities is performed using the
exchange rate ruling at the date of the consolidated financial statements;
• non-monetary assets and liabilities, recorded at historical costs, are converted
at the exchange rates ruling at the dates when assets were purchased,
liabilities incurred and the share capital and equity reserves set up;
• the profit and loss account items are converted at the current exchange rate
ruling at year-end for practical reasons and taking into account the little
variance as compared to the average exchange rate for the period, except for the
amortisations converted at the same exchange rate as the assets they refer to.
The unbalance resulting from the adoption of difference exchange rates is
entered in the profit and loss account under exchange rate differences.
5. TANGIBLE FIXED ASSETS
They are recorded at the acquisition cost, including the accessory charges
incurred, adjusted for some goods in pursuance of specific monetary revaluation
laws; the amount entered in the financial statements is obtained by deducting the
write-downs carried out from the book value so defined.
Tangible fixed assets are depreciated in each financial year on a straight-line basis
according to economic/technical charges based on the residual life of the assets.
This principle is also in line with fiscally allowed charges.
Maintenance and repair expenses that do not imply an increase in the net worth
of assets are charged to the profit and loss account for the year, while the
expenses implying an increase are entered under the specific technical fixed
assets to which they refer.
The real properties used pursuant to financial leases are recorded under tangible
fixed assets, and they are depreciated based on the charges of the corresponding
assets.
6. INTANGIBLE FIXED ASSETS
They are entered under assets at the acquisition cost, including accessory charges,
subject to approval of the Board of Statutory Auditors if necessary, and they are
systematically amortised according to their potential use.
The paid goodwill is entered under assets and amortised over a five-year or
longer period based on its estimated useful life.
OTHER RECEIVABLES AND PAYABLES
Other receivables and payables are entered at face value. With regard to
receivables, this value is equal to the estimated recoverable amount.
ACCRUALS AND PAYABLES
These items include shares of costs and proceeds relating to several years in order
to comply with the accrual principle.
They are calculated taking into account, with regard to interest, the rates
applicable to each agreement, and, with regard to costs and proceeds, elements
that are certain and the accrual principle.
Some of them are directly added to the liability accounts to which they refer, since
this representation is more technically appropriate.
DEPOSITS IN ADMINISTRATION
They represent the debt existing at year-end towards third party assignors.
EMPLOYEES’ SEVERANCE FUND
This item reflects, net of advances, the benefits accruing to employees on payroll
as at close of the financial year, determined according to Law No. 297 dated 29
May 1982.
PROVISIONS FOR RISKS AND CHARGES
The provision for taxation includes allocations for current and deferred taxes
payable, as well as for the risk arising from fiscal disputes, if any.
The provision for current taxes is a reasonable forecast of the chargeable amount,
determined according to applicable tax regulations.
Deferred taxes have been calculated by applying the income statement liability
method established by IAS 12 according to the specific provisions of Banca
d’Italia. In particular, the provisions for taxation include liabilities for deferred
notes to the consolidated financial statements 105
7. OTHER ASPECTS
taxes arising from taxable temporary differences that are expected to be paid. No
provision for deferred taxes is made for equity reserves set up free of tax, since at
present no transactions are expected to be carried out that would determine their
taxation. Deferred tax assets, originating from deductible temporary differences
whose collection can reasonably be deemed to be certain based on future
expected taxable income are entered under other assets.
OTHER PROVISION
Other provisions are made to reflect losses of the guarantees provided and
commitments undertaken, as well as to provide for certain or probable liabilities,
whose amount or date of occurrence, however, cannot be determined at the close
of the financial year or at the date of preparation of these financial statements.
PROVISION FOR GENERAL BANKING RISK
This provision is used to hedge the general business risk and, therefore, it is
included in the shareholders’ equity.
notes to the consolidated financial statements 106
SUBORDINATED LIABILITIES
The value entered in the financial statements corresponds to the face value of the
loan.
STOCKS OF CONSUMABLES
Year-end stocks of stationery and printing supplies or promotional articles are
entered by applying to the stocks the last cost price for the goods of that kind.
These stocks are recorded under item “other assets” with “administrative
expenses”as a contra-entry.
SECTION 2 - ADJUSTMENTS AND TAX
PROVISIONS
In compliance with Article 7, comma 1 of Legislative Decree no. 37 of 6 February
2004, which rescinds articles 15, comma 3 and 39, comma 2 of Legislative Decree
no. 87/92 allowing adjustments and provisions exclusively on the basis of tax
regulations, previous tax timing differences have been duly written off.
The effects of this elimination are recorded as extraordinary income, and any tax
deferrals have been accounted for.
2.1 VALUE ADJUSTMENTS RECORDED ONLY IN
PURSUANCE OF TAX REGULATIONS
No value adjustments were carried out.
2.2 PROVISIONS MADE ONLY IN PURSUANCE OF TAX
REGULATIONS
No provisions were carried out.
PART B - BALANCE SHEET
INFORMATION
SECTION 1 - LOANS
BREAKDOWN OF ITEM 10 “CASH AND BALANCES WITH
CENTRAL BANKS AND POST OFFICES”
31/12/2004
31/12/2003
Notes and coins
Demand deposits and other available assets
Demand postal current accounts
39,257
596
0
47,860
2,743
32
TOTAL
39,853
50,635
BREAKDOWN OF ITEM 30 “LOANS TO BANKS”
31/12/2004
31/12/2003
Loans to central banks
Deposits with banks
Currents accounts for services rendered
Loans
Other technical forms
69,092
188,538
31,438
0
105
49,316
123,954
34,638
38,585
3,457
TOTAL
289,173
249,950
a)
b)
c)
d)
e)
31/12/2004
31/12/2003
72,149
0
0
0
0
49,316
0
0
0
0
loans to central banks
bills eligible for refinancing with central banks
credits for financial leases
REPOS
loan of securities
1.2 CASH LOANS TO BANKS
Value/categories
A. Doubtful loans
A.1 Non performing loans
A.2 Watch-list
A.3 Loans being restructured
A.4 Restructured loans
A.5 Non-guaranteed loans
exposed to country risk
B. Performing loans
Gross
exposure
Total
write-downs
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
289,173
Net
exposure
0
0
289,173
notes to the consolidated financial statements 107
1.1 DETAILS OF ITEM 30 “LOANS TO BANKS”
1.3 TREND OF DOUBTFUL LOANS TO BANKS
Reasons/categories
Non
performing
loans
Watch-list
Loans
being
restructured
Restructured
loans
Non-guaranteed
loans
exposed to
country risk
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
A. Starting gross exposure
as at 31/12/2003
A.1 of which for interest
on delayed payment
B. Increases
B.1 Performing loan inflows
B.2 Interest on delayed payment
B.3 Transfer from other doubtful
loan categories
B.4 Other increases
C. Decreases
C.1 Disbursements for performing
loans
C.2 Write-offs
C.3 Collections
C.4 Gains on sales
C.5 Transfer to other doubtful
loan categories
C.6 Other decreases
D. Final gross exposure
as at 31/12/2004
D.1 of which for interest
on delayed payment
notes to the consolidated financial statements 108
1.4 TREND OF TOTAL ADJUSTMENTS OF LOANS TO BANKS
Reasons/categories
Non Watch-list
Loans Restructured Non-guaranteed Performing
performing
being
loans
loans
loans
loans
restructured
exposed to
country risk
A. Starting total adjustments
as at 31/12/2003
A.1 of which for interest on
delayed payment
B. Increases
B.1 Write-downs
B.1.1 of which for interest on
delayed payment
B.2 Utilizations of the
credit risk reserve
B.3 Transfer from other
loan categories
B.4 Other increases
C. Decreases
C.1 Write-backs for valuation
C.1.1 of which for interest on
delayed payment
C.2 Write-backs for collection
C.2.1 of which for interest on
delayed payment
C.3 Write-offs
C.4 Transfer to other
loan categories
C.5 Other decreases
D. Final total adjustments
as at 31/12/2004
D.1
of which for interest on
delayed payment
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
BREAKDOWN OF ITEM 40 “LOANS TO CUSTOMERS”
31/12/2004
31/12/2003
Ordinary current accounts
Import-export loans
Assets sold from the trading portfolio
Mortgage loans
Unsecured loans
Other non-regulated subsidies on current
account and other credits
Outstanding credits
Credits for leasing
Credits for factoring
Other technical forms
Provisions for adjustment of the assets
1,591,002
224,605
40,694
1,351,238
168,485
1,535,654
217,598
61,019
757,894
189,313
1,393,162
37,922
316,765
113,292
5,428
-35,918
1,229,083
31,630
261,090
90,526
17,912
-24,190
TOTAL
5,206,675
4,367,529
1.5 DETAILS OF ITEM 40 “LOANS TO CUSTOMERS”
31/12/2004
31/12/2003
14,756
0
0
0
19,567
0
0
0
a)
bills eligible for refinancing
with central banks
b) credits for financial leases
c) REPOS
d) loan of securities
a) from mortgages
b) from pledges on:
1 - cash deposits
2 - securities
3 - other assets
c) from guarantees of:
1 - Governments
2 - other public institutions
3 - banks
4 - other operators
31/12/2004
31/12/2003
1,567,874
159,704
879,432
84,838
60,334
41,468
57,902
28,854
39,916
16,068
1,127,836
0
2,818
19,015
1,106,003
TOTAL
1,035,050
0
2,215
22,423
1,010,412
2,855,414
1,999,320
1.7 CASH LOANS TO CUSTOMERS
Value/categories
A. Doubtful loans
A.1 Non performing loans
A.2 Watch-list
A.3 Loans being
restructured
A.4 Restructured loans
A.5 Non-guaranteed loans
exposed to country risk
B. Performing loans
Gross
exposure
Total
write-downs
138,195
Net
exposure
31,837
106,358
63,207
66,739
25,285
6,552
37,922
60,187
0
8,249
0
0
0
8,249
0
0
5,129,683
0
29,366
5,100,317
notes to the consolidated financial statements 109
1.6 SECURED LOANS TO CUSTOMERS
1.8 TREND OF DOUBTFUL LOANS TO CUSTOMERS
Reasons/categories
Non
performing
loans
Watch-list
Loans
being
restructured
52,836
33,594
0
0
0
1,737
33,493
3,425
397
0
105,305
102,198
1,452
0
0
0
0
0
8,249
8,249
0
0
0
0
0
29,358
313
23,123
0
1,655
72,160
0
0
0
0
0
0
0
0
0
0
12,716
10,387
16
1,376
207
41,197
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4
29,358
22
0
0
0
0
0
0
63,207
66,739
0
8,249
0
201
0
0
0
0
A. Starting gross exposure
as at 31/12/2003
A.1 of which for interest
on delayed payment
B. Increases
B.1 Performing loan inflows
B.2 Interest on delayed payment
B.3 Transfer from other
doubtful loan categories
B.4 Other increases
C. Decreases
C.1 Disbursements for
performing loans
C.2 Write-offs
C.3 Collections
C.4 Gains on sales
C.5 Transfer to other doubtful
loan categories
C.6 Other decreases
D. Final gross exposure
as at 31/12/2004
notes to the consolidated financial statements 110
D.1 of which for interest on
delayed payment
Restructured Non-guaranteed
loans
loans
exposed to
country risk
1.9 TREND OF TOTAL WRITE-DOWNS OF LOANS TO
CUSTOMERS
Reasons/categories
A. Initial total adjustments
as at 31/12/2003
A.1 of which for interest
on delayed payment
B. Increases
B.1 Write-downs
B.1.1 of which for interest
on delayed payment
B.2 Utilization of the
credit risk reserve
B.3 Transfer from other
loan categories
B.4 Other increases
C. Decreases
C.1 Write-backs
for valuation
C.1.1 of which for interest
on delayed payment
C.2 Write-backs
for collection
C.2.1 of which for interest
on delayed payment
C.3 Write-offs
C.4 Transfers to other
loan categories
C.5 Other decreases
D. Final total adjustments
as at 31/12/2004
D.1
of which for interest
on delayed payment
Non Watch-list
Loans
performing
being
loans
restructured
Restructured Non-guaranteed
loans
loans
exposed to
country risk
Performing
loans
21,432
3,635
0
0
0
21,170
142
12,407
10,497
0
5,563
5,563
0
0
0
0
0
0
0
0
0
0
13,703
13,609
5
0
0
0
0
0
0
0
0
0
0
0
1,605
305
8,555
0
0
2,646
0
0
0
0
0
0
0
0
0
0
94
5,506
64
600
0
0
0
0
0
0
0
0
0
0
689
86
0
0
0
24
17
7,797
0
261
0
0
0
0
0
0
0
5,482
0
5
1,605
94
0
0
0
0
0
0
0
0
25,285
6,552
0
0
0
29,366
44
0
0
0
0
0
SECTION 2 - SECURITIES
BREAKDOWN OF SECURITIES BY TYPE
Debt securities
- Treasury bonds and similar
instruments eligible for refinancing
with central banks
- Bonds and other debt securities
Shares, quotas and other equity securities
31/12/2004
31/12/2003
495,054
411,107
2,149
492,905
59,783
351,324
16,647
18,840
TOTAL
511,701
429,947
of which:
- Investment securities
- Trading securities
94,853
416,848
104,918
325,029
Balance-sheet value
Market value
2.1 INVESTMENT SECURITIES
1. Debt securities
1.1 Government bonds
- listed
- unlisted
1.2 Other securities
- listed
- unlisted
2. Equity securities
- listed
- unlisted
83,760
0
0
0
83,760
0
83,760
87,011
0
0
0
87,011
0
87,011
11,093
0
11,093
TOTAL
8,333
0
8,333
94,853
95,344
2.2 ANNUAL CHANGES IN INVESTMENT SECURITIES
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Transfers from the
trading portfolio
B4. Other changes
C. Decreases
C1. Sales
C2. Redemptions
C3. Write-downs
of which:
- other than temporary write-downs
C4. Transfers to the
trading portfolio
C5. Other changes
104,918
16,983
15,435
0
0
1,548
27,048
16.125
313
0
0
9,134
1,476
D. Final stocks
94,853
2.3 TRADING SECURITIES
Items/Values
1. Debt securities
1.1 Government bonds
- listed
- unlisted
1.2 Other securities
- listed
- unlisted
2. Equity securities
- listed
- unlisted
TOTAL
Balance-sheet value
Market value
411,294
21,124
21,124
0
390,171
259,025
131,146
415,293
21,124
21,124
0
394,169
258,717
135,452
5,554
5,554
0
5,554
5,554
0
416,848
420,847
notes to the consolidated financial statements 111
Items/Values
2.4 ANNUAL CHANGES IN TRADING SECURITIES
A. Opening balance
B. Increase
B1. Purchases
- Debt securities
+ government bonds
+ other securities
- Equity securities
B2. Write-backs and revaluations
B3. Transfers from the investment portfolio
B4. Other changes
C. Decreases
C1. Sales and redemptions
- Debt securities
+ government bonds
+ other securities
- Equity securities
C2. Write-downs
C3. Transfers to the investment portfolio
C5. Other changes
325,029
1,305,273
1,266,908
1,149,264
465,021
684,243
117,644
13,374
9,134
15,857
1,213,454
1,173,719
1,050,224
491,407
558,817
123,495
1,040
0
38,695
D. Final stocks
416,848
SECTION 3 - EQUITY INVESTMENTS
3.1 SIGNIFICANT EQUITY INVESTMENTS
notes to the consolidated financial statements 112
Designation
A. Consolidated companies
A.1 integral method
1. Veneto Banca scarl
2. Claris Factor spa
3. Veneto Ireland Financial
Services ltd.
4. Banca Italo-Romena spa
5. Banca di Bergamo spa
6. Banca Meridiana spa
7. Claris Leasing spa
8. Claris Finance srl
A.2 proportional method
B. Equity investments valued by the
1. Claris Assicurazioni srl
2. Claris Broker spa
3. Claris Vita spa
4. Immobiliare Italo Romena srl
5. Sintesi 2000 srl
6. Palladio Finanziaria srl
head office
type
of
arrangement
(1)
share
holders’
equity
profit
(loss)
investment proportion
investing
%
company
% votes consolidated
available in
balancethe Ordinary
sheet
Shareholders’
values
Meeting
Montebelluna
Montebelluna
1
1
809,365
7,369
45,658
2,594
A1.1
100.000
100.000
xxx
Dublino
Treviso
Bergamo
Bari
Treviso
Roma
1
1
1
1
1
1
138,279
37,157
42,211
38,615
22,404
10
11,278
3,299
1,712
2,006
2,009
0
A1.1
A1.1
A1.1
A1.1
A1.1
A1.1
100.000
92.308
60.068
99.385
100.000
70.000
100.000
92.308
60.068
99.385
100.000
70.000
xxx
xxx
xxx
xxx
xxx
xxx
equity method
Montebelluna
Montebelluna
Milano
Bucarest
Milano
Vicenza
1
1
8
1
8
8
170
111
52,415
96
96
180,922
79
-42
1,676
18
-81
15,132
A1.1
A1.1
A1.1
A1.1
A1.1
A1.1
100.000
100.000
20.000
100.000
33.333
21.212
100.000
100.000
20.000
100.000
33.333
21.212
170
111
11,344
96
32
38,377
C. Other significant equity investments
(1) Type of arrangement:
1 = control according to Art. 2359 of Italian Civil Code, Par. 1, No. 1 (majority of voting rights in the Ordinary Shareholders’ Meeting)
2 = control according to Art. 2359 of Italian Civil Code, Par. 1, No. 2 (dominant influence in the Ordinary Shareholders’ Meeting)
3 = control according to Art. 23 of the Italian Consolidation Act (T.U.), Par. 2, No. 1 (arrangements with other Shareholders)
4 = other forms of control
5 = unitary management according to Art. 26, Par. 1, of the “decree”
6 = unitary management according to Art. 26, Par. 2, of the “decree”
7 = joint control
8 = associate company
3.2 ASSETS AND LIABILITIES INVOLVING GROUP COMPANIES
31/12/2004
31/12/2003
a) Assets
1. loans to banks
of which: subordinated
2. loans to financial institutions
of which: subordinated
3. loans to other customers
of which: subordinated
4. bonds and other debt securities
of which: subordinated
0
0
5,444
0
3,118
0
44,720
0
0
0
6,111
0
368
0
370
0
b) Liabilities
1. due to banks
2. due to financial institutions
3. due to other customers
4. securities issued
5. subordinated liabilities
10,008
751
4,670
208
0
0
2,188
5,604
0
0
8
0
49
343
c) Guarantees and commitments
1. guarantees provided
2. commitments
31/12/2004
31/12/2003
a) Assets
1. loans to banks
of which: subordinated
2. loans to financial institutions
of which: subordinated
3. loans to other customers
of which: subordinated
4. bonds and other debt securities
of which: subordinated
54,315
0
21,359
0
13,000
0
0
0
44,617
0
22,704
0
16,588
0
342
0
b) Liabilities
1. due to banks
2. due to financial institutions
3. due to other customers
4. securities issued
5. subordinated liabilities
31,014
20,968
3,836
0
0
46,799
1,785
13
0
0
c) Guarantees and commitments
1. guarantees provided
2. commitments
186
116,347
162
0
3.4 BREAKDOWN OF ITEM 70 “EQUITY INVESTMENTS”
31/12/2004
31/12/2003
a) In banks
1. listed
2. unlisted
14,777
5,591
14,105
5,756
b) In financial institutions
1. listed
2. unlisted
1,800
40.875
1,800
34.389
c) Other equity investments
1. listed
2. unlisted
0
25,526
1.972
14,630
TOTAL
88,569
72,652
notes to the consolidated financial statements 113
3.3 ASSETS AND LIABILITIES INVOLVING SUBSIDIARIES
(OTHER THAN GROUP COMPANIES)
3.5 BREAKDOWN OF ITEM 80 “EQUITY INVESTMENTS IN
GROUP COMPANIES”
31/12/2004
31/12/2003
a) In banks
1. listed
2. unlisted
0
0
0
0
b) In financial institutions
1. listed
2. unlisted
0
0
0
0
c) Other equity investments
1. listed
2. unlisted
0
378
0
51,161
TOTAL
378
51,161
3.6 ANNUAL CHANGES IN EQUITY INVESTMENTS
notes to the consolidated financial statements 114
3.6.1 EQUITY INVESTMENTS IN GROUP COMPANIES
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
C. Decreases
C1. Sales
C2. Write-downs
of which: other than temporary write-downs
C3. Other changes
51,161
59,443
15,989
0
0
43,454
110,226
95,616
0
0
14,610
D. Final stocks
E.
F.
378
Total revaluations
Total adjustments
0
0
3.6.2 OTHER EQUITY INVESTMENTS
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
C. Decrease
C1. Sales
C2. Write-downs
of which: other than temporary write-downs
C3. Other changes
D. Final stocks
E.
F.
Total revaluations
Total adjustments
72,652
48,577
32,247
892
0
15,438
32,660
32,225
44
44
390
88,569
0
44
SECTION 4 - TANGIBLE AND INTANGIBLE
FIXED ASSETS
4.1 ANNUAL CHANGES IN TANGIBLE FIXED ASSETS
Property
Furniture
Total
Opening balance
Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
Decreases
C1. Sales
C2. Write-downs:
a) depreciation
b) other than temporary
write-downs
C3. Other changes
103,070
6,393
4,920
0
0
1,473
8,298
49
23,661
30,537
21,278
0
0
9,259
15,493
242
126,731
36,930
26,198
0
0
10,732
23,791
291
1,591
15,124
16,715
0
6,658
0
127
0
6,785
D.
Final stocks
101,165
38,705
139,870
E.
F.
Total revaluations
Total adjustments:
a) depreciation
b) other than temporary write-downs
4,265
0
4,265
16,386
0
44,979
0
61,365
0
A.
B.
C.
BREAKDOWN OF ITEM 110 “INTANGIBLE FIXED ASSETS”
31/12/2004
31/12/2003
Goodwill
Software purchases
Restructuring charges for leased facilities
Other intangible fixed assets
16,336
1,517
6,266
6,171
17,244
2,325
8,543
7,360
TOTAL
30,290
35,472
4.2 ANNUAL CHANGES IN INTANGIBLE FIXED ASSETS
A.
B.
C.
Opening balance
Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
Decreases
C1. Sales
C2. Write-downs:
a) amortisation
b) other than temporary write-downs
C3. Other changes
D.
Final stocks
E.
F.
Total revaluations
Total adjustments:
a) amortisation
b) other than temporary write-downs
35,472
2,657
2,657
0
0
0
7,839
0
7,132
0
707
30,290
0
19,788
0
notes to the consolidated financial statements 115
Depreciation is calculated according to the methods described under valuation
criteria, by applying the charges defined by applicable laws.
SECTION 5 - OTHER ASSET ITEMS
5.1 BREAKDOWN OF ITEM 150 “OTHER ASSETS”
Advances on suppliers’ invoices
Portfolio operations to be settled
Interest and commissions receivable
Securities transactions
Foreign operations to be settled
Entries to be settled by “proxy” procedure
Current account cheques under negotiation
Loans due from Treasury
Deferred tax assets
Off-balance sheet operations
Premiums for options and similar instruments
Outstanding and protested bills and cheques
Balance reconciliation with subsidiaries
Other assets
Total
31/12/2004
31/12/2003
243
20,541
7,371
1,530
4,707
38,120
22,310
46,259
6,811
1,606
1,767
41
2,162
66,917
1,502
22,944
10,292
1,490
9,160
18,381
1,967
74,839
6,750
1,589
1,439
63
6,596
82,734
220,385
239,746
notes to the consolidated financial statements 116
5.2 BREAKDOWN OF ITEM 160 “PREPAYMENTS AND
ACCRUED INCOME”
31/12/2004
31/12/2003
Accrued income from
- Interest receivable on securities
- Interest on loans to customers
- Interest on loans with banks
- Spreads on off-balance sheet operations
- Other items
13,196
7,144
549
12,409
237
11,618
9,481
685
8,807
299
Total accrued income
33,535
30,890
Prepayments of
- Insurance premiums
- Other prepayments
237
3,284
1
4,457
Total prepayments
3,521
4,458
37,056
35,348
TOTAL PREPAYMENTS AND ACCRUED INCOME
5.3 ADJUSTMENTS FOR PREPAYMENTS AND ACCRUED
INCOME
The Company did not take advantage of the option to directly adjust, by either
increasing or decreasing, the asset and liability accounts to which prepayments
and accrued income refer.
5.4 DISTRIBUTION OF SUBORDINATED ASSETS
a) Loans to banks
b) Loans to customers
c) Bonds and other debt securities
31/12/2004
31/12/2003
0
13,000
30,024
0
13,000
20,302
SECTION 6 - DEBTS
BREAKDOWN OF ITEM 10 “DUE TO BANKS”
31/12/2004
31/12/2003
Current accounts for services rendered
Deposits
Loans
REPOS
29,655
118,641
122,677
54,964
62,766
247,595
100,328
33,483
TOTAL
325,937
444,172
31/12/2004
31/12/2003
54,964
0
33,483
0
6.1 DETAILS OF ITEM “DUE TO BANKS”
a) REPOS
b) loan of securities
31/12/2004
31/12/2003
Due to customers:
- current accounts
- savings deposits
- other agreements
- factoring
- REPOS
2,665,349
248,844
6,378
11,878
155,384
2,062,771
249,958
6,422
10,121
152,982
TOTAL
3,087,833
2,482,254
6.2 DETAILS OF ITEM “DUE TO CUSTOMERS”
a) REPOS
b) loan of securities
31/12/2004
31/12/2003
155,384
0
152,982
0
BREAKDOWN OF ITEM 30 “SECURITIES ISSUED”
31/12/2004
31/12/2003
Securities issued:
- bonds
- certificates of deposit
- discounting of commercial papers
- other items
1,899,682
191,426
45,400
0
1,617,030
133,883
116,950
40,000
TOTAL
2,136,508
1,907,863
BREAKDOWN OF ITEM 40 “DEPOSITS IN ADMINISTRATION”
Funds received from:
31/12/2004
31/12/2003
The Treasury
Veneto Sviluppo spa
Other public institutions
21
4,723
5,085
43
2,109
11,144
TOTAL
9,829
13,296
notes to the consolidated financial statements 117
BREAKDOWN OF ITEM 20 “DUE TO CUSTOMERS”
SECTION 7 - PROVISIONS
CHANGES OCCURRED IN ITEM 70 “EMPLOYEES’
SEVERANCE FUND”
A. Opening balance
B. Increases
B1. Allocations
B2. Other changes
C. Decreases
C1. Utilizations
C2. Other changes
26,001
3,540
3,524
6
2,691
2,255
436
D. Final stocks
26,850
7.1 BREAKDOWN OF ITEM 90 “CREDIT RISK RESERVES”
31/12/2004
31/12/2003
Credit risk reserve for interest on delayed payment
Credit risk reserve
0
509
1,596
650
TOTAL
509
2,246
notes to the consolidated financial statements 118
7.2 CHANGES IN ITEM 90 “CREDIT RISK RESERVES”
OCCURRED IN THE FINANCIAL YEAR
A. Opening balance
B. Increases
B1. Allocations
B2. Other changes
C. Decreases
C1. Utilizations
C2. Other changes
2,246
0
0
0
1,737
161
1,576
D. Final stocks
509
BREAKDOWN OF ITEM 80 “PROVISIONS FOR RISKS AND
CHARGES”
31/12/2004
31/12/2003
a) Pensions and similar provisions
b) Provision for taxation
c) Provisions for risks and charges: other provisions
0
26,291
17,336
0
26,568
12,640
TOTAL
43,627
39,208
BREAKDOWN OF ITEM 80 B) “PROVISIONS FOR TAXATION”
31/12/2004
31/12/2003
Provision for current direct taxes
Indirect taxes and dues
24,572
1,719
25,044
1,524
TOTAL
26,291
26,568
CHANGE IN ITEM 80 B) “PROVISIONS FOR RISKS AND
CHARGES: PROVISION FOR TAXATION” OCCURRED IN THE
FINANCIAL YEAR
A. Opening balance
B. Increases
B1. Allocations
B2. Other changes
C. Decreases
C1. Utilizations
C2. Other changes
26,567
26,278
26,278
0
26,554
26,554
0
D. Final stocks
26,291
7.3 BREAKDOWN OF ITEM 80 D) “PROVISIONS FOR RISKS
AND CHARGES: OTHER PROVISIONS”
31/12/2004
31/12/2003
Provisions for risks and charges
Provisions for risks and charges associated to
capital losses on credit derivatives
17,336
12,323
0
317
TOTAL
17,336
12,640
A. Opening balance
B. Increases
B1. Allocations
B2. Other changes
C. Decreases
C1. Utilizations
C2. Other changes
12,639
5,755
5,748
7
1,058
1,058
0
D. Final stocks
17,336
DEFERRED TAXES
A. Deferred tax assets
1. Initial amount
2. Increases
2.1 Prepaid taxes arising in the year
2.2 Other increases
3. Decreases
3.1 Prepaid taxes cancelled in the year
3.2 Other decreases
7,133
2,112
2,106
6
876
876
0
4. Final amount
B. Deferred tax liabilities
1. Initial amount
2. Increases
2.1 Deferred taxes arising in the year
2.2 Other increases
3. Decreases
3.1 Deferred taxes cancelled in the year
3.2 Other decreases
4. Final amount
8,369
383
633
632
1
130
130
0
886
notes to the consolidated financial statements 119
CHANGES OCCURRED IN ITEM 80 “PROVISIONS FOR
RISKS AND CHARGES”
SECTION 8 - SHARE CAPITAL, EQUITY
RESERVES, RESERVE FOR GENERAL
BANKING RISK AND SUBORDINATED
LIABILITIES
BREAKDOWN OF THE SHAREHOLDERS’ EQUITY AND
SUBORDINATED LIABILITIES
Item
Description
item 100
item 110
item 120
item 140
item 150
item 160
item 170
Reserve for general banking risk
Subordinated liabilities
Negative consolidation differences
Minority interests
Share capital
Issue premiums
Reserves:
a) legal reserve
b) reserve for own equity shares
or quotas
c) statutory reserves
d) other reserves
item 180 Revaluation reserves
item 190 Loss brought forward
item 200 Profit for the year
TOTAL SHAREHOLDERS’ EQUITY
31/12/2004
31/12/2003
39,057
181,814
40
19,956
98,647
304,798
138,499
6,057
82,065
40
19,071
95,069
281,016
111,538
34,860
30,583
0
0
103,639
0
0
80,955
5,554
0
55,352
5,554
-53
40,646
843,717
641,003
notes to the consolidated financial statements 120
The movements of the items making up the shareholders’ equity are detailed
in Annex A.
BREAKDOWN OF ITEM 100 “RESERVE FOR GENERAL
BANKING RISK”
31/12/2004
31/12/2003
39,057
6,057
Reserve for general banking risk
BREAKDOWN OF ITEM 110 “SUBORDINATED LIABILITIES”
Subordinated liabilities
31/12/2004
31/12/2003
181,814
82,065
BREAKDOWN OF ITEM 120 “NEGATIVE CONSOLIDATION
DIFFERENCES”
31/12/2004
31/12/2003
40
40
Negative consolidation differences
BREAKDOWN OF ITEM 140 “MINORITY INTERESTS”
31/12/2004
31/12/2003
19,956
19,071
31/12/2004
31/12/2003
98,647
95,069
Minority interests
BREAKDOWN OF ITEM 150 “SHARE CAPITAL”
Share capital
BREAKDOWN OF ITEM 160 “ISSUE PREMIUMS”
Issue premiums
31/12/2004
31/12/2003
304,798
281,016
BREAKDOWN OF ITEM 170 “EQUITY RESERVES”
a)
b)
c)
d)
legal reserve
reserve for own equity shares or quotas
statutory reserves
other reserves:
- extraordinary reserve
- taxed reserve
- taxed reserve Art. 4 Law No. 823/73
- capital gain reserve from facilitated
allotment Law No. 218/90
- reserve for share buyback
- special reserve Legislative
Decree No. 153/99
31/12/2004
31/12/2003
34,860
0
0
103,639
30,583
0
0
80,955
95,949
3
100
73,265
3
100
1,796
4,132
1,796
4,132
1,659
1,659
BREAKDOWN OF ITEM 180 “REVALUATION RESERVES”
31/12/2004
Revaluation reserves:
- Law No. 576/75
- Law No. 72/83
- Law No. 413/91
31/12/2003
5,554
327
3,226
2,001
5,554
327
3,226
2,001
31/12/2004
31/12/2003
0
-53
Loss brought forward
BREAKDOWN OF ITEM 200 “PROFIT FOR THE YEAR”
31/12/2004
31/12/2003
55,352
40,646
Profit for the year
8.2 CAPITAL AND MINIMUM REQUIREMENTS FOR
SUPERVISORY PURPOSES AS AT 31/12/2004
31/12/2004
A. Capital for supervisory purposes
A.1 Tier I capital
A.2 Tier II capital
A.3 Items to be deducted
A.4 Capital for supervisory purposes
B. Minimum requirements for supervisory purposes
B.1 Credit risks
B.2 Market risks
of which- risks of the trading portfolio
Exchange rate risks
B.2.1 Third-level subordinated loans
B.3 Other minimum requirements
for supervisory purposes
B.4 Total minimum requirements for supervisory purposes
C. Risk-weighted assets and adequacy ratios
C.1 Weighted risk assets
C.2 Tier I capital/weighted risk assets
C.3 Capital for supervisory purposes/weighted risk assets
526,846
185,336
38,363
673,819
443,406
45,879
44,461
1,418
0
11,594
500,879
6,260,988
8.41%
10.76%
notes to the consolidated financial statements 121
BREAKDOWN OF ITEM 190 “LOSS BROUGHT FORWARD”
SECTION 9 - OTHER LIABILITY ITEMS
9.1 BREAKDOWN OF ITEM 50 “OTHER LIABILITIES”
Various securities transactions
Interest and fees to be credited to customers
Provisions for staff expense
Various suspense entries
Currency spreads on portfolio activities
Due to suppliers
Due to Treasury
Amounts available to customers
Foreign operations to be settled
Creditors for premiums on sold call options
Creditors for payment and collection services
Off-balance sheet operations
Credit contra-entries for evaluation of
off-balance sheet operations
Portfolio operations to be settled
Other liabilities
TOTAL
31/12/2004
31/12/2003
3,248
1
9,816
1,382
33,913
18,357
14,181
24,656
1,603
1,891
626
2,696
3,003
3
10,724
56
45,209
23,900
13,335
20,630
9,077
1,447
168
40
8,644
9,062
28,562
0
7,618
54,225
158,638
189,435
notes to the consolidated financial statements 122
9.2 BREAKDOWN OF ITEM 60 “ACCRUALS AND DEFERRED
INCOME”
31/12/2004
31/12/2003
Accrued expenses for
- Interest on REPOS
- Spreads on off-balance sheet operations
- Interest on loans to customers
- Interest on credits with banks
- Other items
472
4,348
267
1,056
484
447
6,239
202
1,406
148
Total accrued expenses
6,627
8,442
Deferred income on
- Interest on discount operations
- Interest on loans to customers
- Interest on credits with banks
- Other items
1,456
1,433
621
466
1,873
873
1,008
537
Total deferred income
3,976
4,291
10,603
12,733
TOTAL ACCRUALS AND DEFERRED INCOME
9.3 ADJUSTMENTS FOR ACCRUALS AND DEFERRED
INCOME
31/12/2004
31/12/2003
a) Liability items:
1. accruals for interest payable:
- on bonds
- on certificates of deposit
b) Asset items
12,585
940
0
12,362
476
0
TOTAL
13,525
12,838
SECTION 10 - GUARANTEES AND
COMMITMENTS
10.1 BREAKDOWN OF ITEM 10 “GUARANTEES PROVIDED”
31/12/2004
31/12/2003
a) Commercial guarantees
b) Financial guarantees
c) Pledged assets
240,488
55,552
0
207,165
52,114
0
TOTAL
296,040
259,279
10.2 BREAKDOWN OF ITEM 20 “COMMITMENTS”
31/12/2004
31/12/2003
a) Commitments certain to be called on
b) Commitments uncertain to be called on
196,225
153,215
164,470
72,366
TOTAL
349,440
236,836
a) Mortgages
b) Pledges
- cash deposits
- securities
- other stocks
TOTAL
31/12/2004
31/12/2003
0
50,000
0
50,000
0
50,000
0
0
50,000
0
50,000
50,000
10.4 UNUSED LINES OF CREDIT
a) Central banks
b) Other banks
31/12/2004
31/12/2003
0
64,414
0
64,414
notes to the consolidated financial statements 123
10.3 PLEDGED ASSETS OF OWN DEBITS
10.5 FORWARD TRANSACTIONS
Transaction
categories
hedging
transactions
trading
transactions
other
transactions
Trading
Securities
- purchases
- sales
Currencies
- currency against currency
- purchases against Euros
- sales against Euros
0
0
0
0
0
0
0
0
643,072
189,200
177,750
11,450
453,872
81,700
202,032
170,140
21,265
21,265
21.265
0
0
0
0
0
2.
Deposits and loans
- to provide
- to receive
0
0
0
56,829
13,382
43,447
0
0
0
3.
3.1
Derivative contracts
With capital swaps
a) securities
- purchases
- sales
b) currencies
- currency against currency
- purchases against Euros
- sales against Euros
c) other stocks
- purchases
- sales
Without capital swaps
a) currencies
- currency against currency
- purchases against Euros
- sales against Euros
b. other stocks
- purchases
- sales
779,821
23,695
23,695
0
23,695
0
0
0
0
0
0
0
756,126
8,000
0
8,000
0
748,126
615,762
132,364
6,834,649
982,216
469,338
179,019
290,319
512,878
26,681
110,000
376,196
0
0
0
5,852,434
8,449
0
0
8,449
5,843,985
3,059,004
2,784,981
96,132
0
0
0
0
0
0
0
0
0
0
0
96,132
8,000
0
8,000
0
88,132
87,132
1,000
trading
transactions
other
transaction
15,000
12,500
2,500
0
0
0
0
0
0
0
0
0
1.
1.1
1.2
notes to the consolidated financial statements 124
3.2
10.6 CREDIT DERIVATIVE CONTRACTS
Transaction
categories
1.
1.1
1.2
2.
2.1
2.2
Protection buyers
With capital swaps
Without capital swaps
Protection sellers
With capital swaps
Without capital swaps
Credit derivative contracts are aimed at transferring the underlying credit risk
of a reference obligation from the protection buyer to the protection seller.
In these cases, the subject of the transaction is the credit risk borne by a
reference entity.
SECTION 11 - CONCENTRATION AND
DISTRIBUTION OF ASSETS AND
LIABILITIES
11.1 SIGNIFICANT EXPOSURES
31/12/2004
31/12/2003
0
0
94,789
1
a) amount
b) number
Based on the provisions of the Supervisory Authority, a loan granted to a
“customer” and weighted according to specific rules is defined as a “significant
exposure” when it is equal to or higher than 10% of the capital for supervisory
purposes held by the bank providing the loan.
“Customer” means an individual or a “group of connected customers”,
meaning two or more subjects that constitute a single unit in terms of risk,
since:
a) one of them has a power of control over the other or others (“legal”
connection);
or:
b) regardless of the existence of control agreements, there are such links
between the subjects that, in all probability, if one of them were in financial
difficulties, the other or all the others would encounter difficulties in
repaying the debt (“financial” connection).
11.2 DISTRIBUTION OF LOANS TO CUSTOMERS
ACCORDING TO THE MAIN CATEGORIES OF
BORROWERS
a)
b)
c)
d)
e)
f)
governments
other public institutions
non-financial companies
financial companies
producer households
other operators
TOTAL
31/12/2004
%
31/12/2003
%
163
45,452
3,325,373
139,754
221,861
1,474,072
0,00
0.87
63.87
2.68
4.26
28.31
184
53,727
2,835,889
142,733
191,132
1,143,864
0,00
1.23
64.93
3.27
4.38
26.19
5,206,675
100.00
4,367,529
100.00
11.3 DISTRIBUTION OF LOANS TO NON-FINANCIAL
COMPANIES AND RESIDENT PRODUCER
a) other services for sale
b) trade services, recoveries
and reparations
c) housing and public works
d) textiles, leather and footwear
products, clothing
e) other industrial products
f) other branches
TOTAL
31/12/2004
%
31/12/2003
%
847,297
26.13
697,414
23.93
440,663
390,437
13.59
12.04
406,572
337,838
13.95
11.59
295,901
285,565
982,328
9.13
8.81
30.30
305,381
245,704
921,057
10.48
8.43
31.61
3,242,191
100.00
2,913,966
100.00
notes to the consolidated financial statements 125
As at 31 December 2004 there are not “significant exposures” according to
supervisory regulations:
11.4 DISTRIBUTION OF GUARANTEES PROVIDED
ACCORDING TO THE MAIN CATEGORIES OF
COUNTERPARTIES
a)
b)
c)
d)
e)
f)
g)
31/12/2004
%
31/12/2003
%
0
1,037
11,933
238,444
4,534
5,288
34,805
0.00
0.35
4.03
80.54
1.53
1.79
11.76
0
708
8,046
212,752
6,234
4,708
26,831
0.00
0.27
3.10
82.06
2.40
1.82
10.35
296,040
100.00
259,279
100.00
governments
other public institutions
banks
non-financial companies
financial companies
producer households
other operators
TOTAL
11.5 GEOGRAPHIC DISTRIBUTION OF ASSETS AND
LIABILITIES
notes to the consolidated financial statements 126
Items/Countries
Italy
Other EU
countries
Other
countries
Total
1. Assets
1.1 Loans to banks
1.2 Loans to customers
1.3 Securities
5,537,824
250,389
4,992,492
294,943
175,484
4,608
22,361
148,515
294,241
34,176
191,822
68,243
6,007,549
289,173
5,206,675
511,701
2. Liabilities
2.1 Due to banks
2.2 Due to customers
2.3 Securities issued
2.4 Other accounts
5,409,507
282,235
2,958,738
1,976,891
191,643
7,299
881
6,343
75
0
325,115
42,821
122,752
159,542
0
5,741,921
325,937
3,087,833
2,136,508
191,643
560,610
79,539
5,331
645,480
3. Guarantees and commitments
11.6 TEMPORAL DISTRIBUTION OF ASSETS AND LIABILITIES
Items/residual maturities
1.
ASSETS
1.1 Treasury bonds
that can be refinanced
1.2 Loans to banks
1.3 Loans to customers
1.4 Bonds and other
debt securities
1.5 Off-balance sheet
operations
2.
LIABILITIES
2.1 Due to banks
2.2 Due to customers
2.3 Securities issued:
- bonds
- certificates of deposit
- other securities
2.4 Subordinated liabilities
2.5 Off-balance sheet
operations
duration set
1/5 years
fixed
floating
rate
rate
over 5 years
fixed floating
rate
rate
undetermined
maturity
on demand
up to
3 months
3/12
months
1,915,551
3,969,135
1,291,809
1,742,505
1,751,109
2
91,392
939,955
0
126,334
1,287,317
0
23,363
687,627
0
0
98,656
2,144
5,922
1,177,293
3
0
30,716
0
2,964
871,611
0
39,198
113,500
2,149
289,173
5,206,675
0
10,989
18,564
114,573
196,603
85,415
66,761
0
492,905
884,202
2,544,495
562,255
1,529,276
369,147
762,196
63,150
0
6,714,721
3,842,947
3,353,370
1,260,138
1,643,527
1,703,354
207,143
431,934
4,400 12,446,813
117,835
2,744,594
4,544
1,262
3,282
0
0
161,038
309,064
186,654
80,516
60,738
45,400
0
33,855
34,173
447,691
321,063
126,628
0
0
317
2
281,134
280,356
778
0
53,349
8,492
0
1,131,889
1,131,889
0
0
0
0
0
57,958
57,958
0
0
0
0
0
26,638
26,638
0
0
128,465
4,400
0
0
0
0
0
0
325,937
3,087,833
2,136,508
1,899,682
191,426
45,400
181,814
975,974
2,696,614
744,419
1,308,725
562,973
149,185
276,831
0
6,714,721
878,330 1,004,486
total
152,698 12,705,623
11.7 ASSETS AND LIABILITIES IN FOREIGN CURRENCY
a) ASSETS
1.
2.
3.
4.
5.
loans to banks
loans to customers
securities
equity investments
other accounts
due to banks
due to customers
securities issued
other accounts
31/12/2003
510,421
488,200
123,808
362,744
20,480
902
2,487
b) LIABILITIES
1.
2.
3.
4.
31/12/2004
70,451
395,327
20,848
166
1,408
256,916
90,825
151,409
14,683
0
248,875
140,180
108,695
0
0
Own Securitisation Activities
Securitisation in July 2002
During the course of financial year 2002 Veneto Banca completed the first
securitisation operation of a mortgage loan portfolio.
The securitisation operation involved the on-payment transfer, in accordance
with Law No. 130 dated 30 April 1999, of arrangements classified as performing
residential and commercial mortgage loans starting from 1 July 2002.
On this date Veneto Banca completed the transfer of loans to “Claris Finance srl”,
a special purpose vehicle incorporated in Italy according to Law No. 130/99 with
its head office in Rome, of which Veneto Banca holds a share equal to 70% of the
share capital. The remaining share was underwritten by Stiching Solari, a
foundation incorporated in Holland.
The subjects of the securitisation are mortgage loans resulting as at 25 June
2002 from the accounts of Veneto Banca, classified as performing loans, in
compliance with the regulations issued by Banca d’Italia, which have the
following characteristics:
- loans guaranteed by a first financial mortgage, by which it is meant:
(i) a first voluntary mortgage;
(ii) a puisne voluntary mortgage, having one of the following characteristics:
• senior mortgages are being cancelled or were granted to guarantee
expired debts;
• second voluntary mortgage, by which the initial amount of the loan
transferred together with the residual debt guaranteed by the senior
mortgage does not exceed 100% of the estimated value of the
mortgaged estate, calculated when allocating the loan;
- the ratio between the amount of the original loan and the amount of the
mortgage does not exceed 100%;
- the ratio between the amount of the original loan and the estimated value
of the mortgaged estate, calculated when allocating the loan, does not
exceed 100%;
- the ratio between the residual amount of the loan and the amount of the
mortgage does not exceed 94%;
- the ratio between the amount of the residual debt and the estimated value
of the mortgaged estate, calculated when allocating the loan, does not
exceed 95%;
- they have at least one due and paid instalment;
- they have at most three monthly instalments due and not yet paid;
- the transferred borrowers are individuals or corporate bodies resident or
domiciled in Italy;
notes to the consolidated financial statements 127
11.8 SECURITISATION ACTIVITIES
notes to the consolidated financial statements 128
- the loan date falls between 24 August 1989 [included] and 17 May 2002
[included];
- one of the following amortisation systems was adopted:
(i) “French-style” (“French-style” amortisation means the gradual
amortisation method by which each instalment is subdivided into a
share of principal increasing over time and intended to repay the loan
and a share of interest);
(ii) “straight-line” (“straight-line” amortisation means the method of
amortisation by which each instalment is subdivided into a share of
principal intended to repay the loan and a share of fixed-rate interest);
(iii) “personal” plan (“personal” amortisation means a plan agreed with the
borrower to satisfy its requirements and underwritten by the latter in the
loan document);
(iv) “declining balance” (“declining balance” amortisation means the method
of amortisation by which each instalment is subdivided into a share of
principal intended to repay the loan and a constant share of interest);
- the expiry date of the last instalment of the loans does not fall after 31 May
2027;
- they were fully allocated;
- the residual debt of each individual loan is greater than 500.00 Euros.
Furthermore, credits arising from loans resulting from the accounts of Veneto
Banca as at 30 June 2002, which present one or more of the following
characteristics, were excluded from the transfer:
a) loans for which the “American-style” amortisation system was adopted
(“American-style” amortisation means the method of amortisation by which
each instalment is made up only of the share of interest, while the last
instalment also provides for the repayment of the entire principal amount);
b) loans originally provided and/or guaranteed by Veneto Sviluppo spa;
c) loans granted to employees of Veneto Banca or other Group companies;
d) loans provided to public institutions;
e) loans provided to religious institutions;
f) loans indexed at a rate established with a ministerial decree;
g) loans guaranteed by a cooperative or by a working guarantee consortium;
h) loans granted to companies incorporated in Italy as limited liability
companies, with interest rates set at the prime rate of ABI (Italian Bankers’
Association) and expiry date falling after 30 June 2003;
i) loans granted to limited liability cooperative companies;
j) loans whose management was transferred to the management subsidiary No.
95 of Veneto Banca, located in Montebelluna;
k) loans provided to subjects who are holders of another loan not meeting the
criteria necessary for the transfer in question.
Based on these principles, 4,257 positions were identified for an overall amount
of transferred loans equal to 372,803,095.29 Euros.
Claris Finance funded the purchase of loans through issuance of four classes of
bond securities (Asset Backed Securities) in July. The amounts deriving from the
collection of transferred loans were used only to service the securities issued and
pay the costs of the operation.
The characteristics of the portfolio were illustrated to the appointed rating
agencies “Fitch IBCA”and “Standard & Poor’s”, which assigned the ratings to the
bonds issued by the special purpose vehicle.
Bonds issued (Asset Backed Securities)
Class
A
B
C
D
Rating
Amount
Yield
AAA
AA
BBB
unrated
346,700,000
11,600,000
13,200,000
1,300,000
Euribor 3m + 30 b.p.
Euribor 3m + 45 b.p.
Euribor 3m + 170 b.p.
10% +/- add. return
The three tranches of rated securities are denominated in Euros, they carry
floating-rate quarterly coupons and have a sequential repayment schedule linked
to the collections from the underlying loan portfolio.
Class A, B and C securities, listed on the Luxembourg Stock Exchange, were
firmly underwritten by Schroder Salomon Smith Barney and subsequently placed
with institutional investors.
Class D bonds are denominated in Euros, they do not have an official rating and
their yield, besides the face yield, is determined residually and paid only insofar
as the collections from the transferred portfolio exceed the amount of expenses
and disbursements related to higher class bonds.
Furthermore, a line of credit was made available by Veneto Banca to Claris
Finance, with the aim of providing liquid assets for the payment of interest on
securities and management costs.
In order to guarantee the special purpose vehicle against the risks associated to
fluctuations in rates, given the diversity between the indexing parameters applied
on individual loans and the parameter set for the securities issued, Veneto Banca
and the special purpose vehicle carried out swap operations with the support of
Citibank N.A., London Branch.
The loans transferred were removed from the financial statements.
Securitisation in October 2003
During the course of financial year 2003 Veneto Banca, in cooperation with its
subsidiary Banca Meridiana, completed another securitisation operation of a
mortgage loan portfolio.
The securitisation operation involved the on-payment transfer, in accordance
with Law No. 130 dated 30 April 1999, of arrangements classified as performing
residential and commercial mortgage loans starting from 1 October 2003.
On this date Veneto Banca completed the transfer of loans to “Claris Finance
2003 srl”, a special purpose vehicle incorporated in Italy according to Law
No. 130/99 with its head office in Rome, of which Veneto Banca holds a share
equal to 4% of the share capital; the remaining share of 96% was underwritten
by Stiching Chessington, a foundation incorporated in Holland.
The subjects of the securitisation are mortgage loans resulting as at 30 September
2003 from the accounts of Veneto Banca and Banca Meridiana, classified as
performing loans, in compliance with the regulations issued by Banca d’Italia,
which have the following characteristics:
- they are provided to corporations, partnerships or individuals, in all cases
resident or domiciled in Italy;
- they are fully allocated, in one or more solutions;
notes to the consolidated financial statements 129
On behalf of Claris Finance srl, Veneto Banca manages, administers and collects
the transferred loans. Therefore, the Bank acts as the sole counterparty of the
customer, even if in the name and on behalf of the vehicle. This so-called
servicing contract also provides for dispute management.
notes to the consolidated financial statements 130
- they are guaranteed by a first financial mortgage on real estate having
residential or commercial characteristics, by which it is meant:
(a) a first legal voluntary mortgage;
or
(b) a puisne legal voluntary mortgage, if senior mortgages were cancelled or
are granted to Veneto Banca or, as regards these senior mortgages, the
obligations guaranteed by them were fully satisfied;
- their residual debt as at 23 September 2003 (included) does not exceed 95%
of the mortgage amount;
- their residual debt as at 23 September 2003 (included) does not exceed 95%
of the estimated value of the mortgaged estate (resulting from the last
estimate made when allocating the loan);
- they have at least one instalment due and paid within 23 September 2003
(included);
- the loan date falls between 18 December 1985 (included) and 31 August
2003 (included);
- they have one of the following amortisation systems:
(i) “French-style” (“French-style” amortisation means the gradual
amortisation method by which each instalment is constant and
subdivided into a share of principal increasing over time and intended to
repay the loan and a share of interest);
(ii) “personal” plan (“personal” amortisation means the method of
amortisation agreed individually with each transferred borrower);
(iii) “Italian-style” (“Italian-style” amortisation means the method of
amortisation by which each instalment is decreasing and subdivided into
a constant share of principal intended to repay the loan and a share of
interest);
- the expiry date of the last instalment falls between 30 September 2003
(excluded) and 31 December 2028 (included);
- their residual debt as at 23 September 2003 (included) is equal to or higher
than 448.00 Euros;
- their residual debt as at 23 September 2003 (included) is lower than
2,500,000.00 Euros.
However, credits arising from loans resulting from the accounts of Veneto Banca
and Banca Meridiana as at 30 September 2003, which present one or more of the
following characteristics, were excluded from the transfer:
a) loans granted to employees of Veneto Banca scparl, Banca di Roma spa,
Banco di Sicilia spa, Claris Vita spa, Banca di Credito Cooperativo del Piave
e del Livenza scarl, Banca Popolare Asolo e Montebelluna scarl or of
companies of the Veneto Banca Group, or to individuals who were
employees of Banca di Roma spa, Banco di Sicilia spa, Claris Vita spa, Banca
di Credito Cooperativo del Piave e del Livenza scarl, Banca Popolare Asolo
e Montebelluna scarl or of companies of the Veneto Banca Group when the
loan was allocated;
b) loans provided to public institutions;
c) loans provided to religious institutions;
d) loans provided to subjects who were allocated another mortgage or landedproperty loan not meeting the criteria set forth herein;
e) loans for which the “American-style” amortisation system was adopted
(“American-style” amortisation means the method of amortisation by which
the principal amount has to be repaid upon the expiry date);
f) loans granted to real estate companies;
g) loans for which the relevant borrower required the early redemption as at
Based on these principles, 3,466 positions were identified for Veneto Banca for
an overall amount of transferred loans equal to 277,872,187.71 Euros, and 1,491
positions were identified for Banca Meridiana for an overall amount of
transferred loans equal to 68,089,825.65 Euros.
Claris Finance 2003 funded the purchase of loans through issuance of five classes
of bond securities (Asset Backed Securities) in October. The amounts deriving
from the collection of transferred loans were used only to service the securities
issued and pay the costs of the operation.
The characteristics of the portfolio were illustrated to the appointed rating
agencies “Moody’s” and “Standard & Poor’s”, which assigned the ratings to the
bonds issued by the special purpose vehicle.
Bonds issued (Asset Backed Securities)
Class
A
B
C
D1
D2
Rating
Amount
Yield
AAA
AA
BBB
unrated
unrated
315,500,000
9,000,000
20,200,000
3,950,000
2,170,000
Euribor 3m + 30 b.p.
Euribor 3m + 45 b.p.
Euribor 3m + 170 b.p.
5% +/- add. return
5% +/- add. return
The three tranches of rated securities are denominated in Euros, they carry
floating-rate quarterly coupons and have a sequential repayment schedule linked
to the collections from the underlying loan portfolio.
Class A, B and C securities, listed on the Luxembourg Stock Exchange, were
firmly underwritten by Deutsche Bank and subsequently placed with institutional
investors.
Class D1 - D2 bonds are denominated in Euros, they do not have an official rating
and their yield, besides the face yield, is determined residually and paid only
insofar as the collections from the transferred portfolio exceed the amount of
expenses and disbursements related to higher class bonds.
On behalf of Claris Finance 2003 srl, Veneto Banca manages, administers and
collects the transferred loans. Therefore, the Bank acts as the sole counterparty of
the customer, even if in the name and on behalf of the vehicle. This socalled
servicing contract also provides for dispute management.
notes to the consolidated financial statements 131
23 September 2003 (included);
h) loans allocated in accordance to any laws, regulations or agreements
providing for subsidies or benefits to principal and/or interest with regard
to third parties of which either Veneto Banca scparl or Banca di Roma spa,
Banco di Sicilia spa, Banca Popolare Asolo e Montebelluna scarl or Banca di
Credito Cooperativo del Piave e del Livenza scarl has subsequently become
creditor (so-called subsidized loans);
i) loans that, even if classified as performing as at 23 September 2003 (included),
were restructured after the relevant date of stipulation;
j) loans with monthly instalments, having more than one instalment due and
not paid as at 23 September 2003 (included), meaning an instalment that has
remained unpaid for over 5 days after the relevant expiry date;
k) loans with quarterly, half-yearly or yearly instalments, having one or more
instalments due and not paid as at 23 September 2003 (included), meaning
instalments that have remained unpaid for over 5 days after the relevant
expiry dates;
l) loans having a residual principal debt equal to 1,879,701.00 Euros or
2,000,000.00 Euros.
Furthermore, a line of credit was made available by Veneto Banca and Banca
Meridiana to Claris Finance 2003 srl, with the aim of providing liquid assets for
the payment of interest on securities and management costs.
In order to guarantee the special purpose vehicle against the risks associated to
fluctuations in rates, given the diversity between the indexing parameters applied
on individual loans and the parameter set for the securities issued, Veneto Banca
and the special purpose vehicle carried out swap operations with the support of
Deutsche Bank.
The loans transferred were removed from the financial statements: the difference
between the book value of loans and the amount collected from the transfer
generated a profit, entered in the profit and loss account, equal to 2,936,351.68
Euros for Veneto Banca and 1,921,634.96 Euros for Banca Meridiana.
The costs relating to the structuring and realisation of the securitisation operation
were borne by the Veneto Banca and Banca Meridiana originators and entered
directly into the profit and loss account.
notes to the consolidated financial statements 132
Securitisation Activities of Third Parties
At the end of financial year 2004 Veneto Banca doesn’t hold portfolio securities
coming from securitisation activities of third parties.
SECTION 12 - MANAGEMENT AND
BROKERING ON BEHALF OF THIRD
PARTIES
12.1 STOCK TRADING
31/12/2004
31/12/2003
Securities
a) Purchases:
1. settled
2. not settled
a) Sales:
1. settled
2. not settled
99,772
98,812
960
86,107
85,969
138
198,736
198,294
442
102,821
102,059
762
Listed derivatives
a) Purchases:
1. settled
2. not settled
b) Sales:
1. settled
2. not settled
1,305,232
1,303,687
1,545
1,614,247
1,612,394
1,853
1,270,751
1,270,751
0
1,575,941
1,575,941
0
31/12/2004
31/12/2003
106,636
111,534
12.2 FUNDS UNDER MANAGEMENT
Other securities
12.3 CUSTODY AND ADMINISTRATION OF SECURITIES
a) Third-party securities under custody
b) Third-party securities lodged with third parties
c) Own securities lodged with third parties
31/12/2004
31/12/2003
4,690,698
4,307,928
875,316
4,518,098
4,283,889
429,194
INFORMATION RELATED TO THE SECURITISATION
OPERATION OF 1 JULY 2002
The securitisation operation described in point 11.8 was carried out through the
special purpose vehicle “Claris Finance srl”, which is a subsidiary of the Veneto
Banca Group. Therefore, the grouping sheet of the securitized assets and the
securities issued by the aforesaid special purpose vehicle is shown hereafter, as
entered in the accounts of the company.
In particular, the valuation criteria adopted by Claris Finance for the most
important items are listed below.
1. Securitised assets - Loans
Loans were recorded at the exit value representing the face value of the loans
themselves.
2. Loans of available assets - Loans to banks
They are expressed at face value.
3. Securities issued
The securities issued are shown at their corresponding face values. The
securities belong to the “limited recourse” category and are paid exclusively
with sums deriving from the collection of the transferred loans.
4. Interest, commissions, income and charges
Costs and revenues concerning the securitised assets and the securities issued,
interest, commissions, income, other charges and revenues are recorded
according to the matching concept.
notes to the consolidated financial statements 133
• Structure, form and valuation criteria used to compile the grouping
sheet of the securitised assets and the securities issued
The structure and form of the grouping sheet are in line with those laid down
in the Ruling of Banca d’Italia dated 29 March 2000.
The principles followed in compiling the sheet are those specified by
Legislative Decree No. 87/92; all items indicated correspond to the values
obtained from the accounts and the information system of the Servicer,Veneto
Banca.
INFORMATION ON SECURITISATION ACTIVITIES
RELATING TO SPECIAL PURPOSE VEHICLES BELONGING
TO THE GROUP
Grouping sheet of the securitised assets as at 1 July 2002
(in Euro)
EEC
code Description
Situation as at
31/12/2004
Situation as at
31/12/2003
230,066,564
230,066,564
23,867,765
285,881,670
285,881,670
98,379,738
122,244
21,797,391
9,349
761,075
977,680
195,588
4,438
183,366
96,820,222
7,611
164
1,173,931
189,981
4,463
TOTAL ASSETS
253,934,329
384,261,408
C.
C1
C2
C3
C4
D.
E.
E1
E2
E3
E4
E5 1
E5 2
E5 3
242,603,109
216,503,109
11,600,000
13,200,000
1,300,000
5,964,850
5,366,370
10,805
17,759
24,893
9,349
1,318,348
3,929,710
55,506
372,800,000
346,700,000
11,600,000
13,200,000
1,300,000
5,964,850
5,496,558
10,509
367,597
10,886
0
1,857,659
2,986,459
263,448
253,934,329
384,261,408
9,794,358
5,960,279
302,945
510,000
3,021,134
117,032
71,007
12,771,725
9,887,659
346,320
564,329
1,973,417
112,560
70,989
25,000
21,025
5,713,972
61,122
56,626
550,920
5,001,437
1,213
9,349
33,305
10,815,560
4,809,802
454,855
4,156,792
192,505
5,650
25,034
16,537
10,503,355
61,122
53,130
604,770
9,767,850
0
0
16,483
13,771,355
9,616,285
1,279,721
8,231,980
104,012
572
0
0
notes to the consolidated financial statements 134
A.
A1
B.
B3
B3 1
B3 2
B3 3
B3 4
B3 5
B3 6
B3 7
Securitised assets
Loans
Loan of available assets arising from credit management
Other
Capitalised costs
Liquid assets
Withholding
Loans to Veneto Banca for collections to be paid again
Accrued income for interest rate swap
Accruals for interest receivable on securitised credits
Prepayments
Securities issued
Securities of A category
Securities of B category
Securities of C category
Securities of D category
Loans received
Other liabilities
Due to company management
Due to Veneto Banca
Due to suppliers
Other debts
Accrued expenses for interest rate swap
Accrued expenses for interest on securities issued
Accrued expenses for subordinated loan interest
TOTAL LIABILITIES
F.
F1
F2
F3
F4
G.
G1
G2
G3
H.
H1 1
H1 2
H1 3
H1 4
H1 5
H1 6
H1 7
I.
L.
L1
L2
L3
L4
Interest payable on securities issued
Securities issued Class A
Securities issued Class B
Securities issued Class C
Securities issued Class D
Commissions and fees relating to the operation
Servicing
Commissions to listing agent, trustee,
principal paying agent, operating bank
Commissions for rating
Other charges
Amortisation of capitalised costs
Recharge of company management costs
Interest expense on subordinated loan
Interest rate swap
Anticipated loss on credits
Write-downs of witholding upon interest receivable
Other costs
Interest generated by securitised assets
Other revenue
Bank interest receivable
Interest rate swap
Penalties for early redemption of loans and subsidies
Other revenue
RESULT OF THE SECURITISATION OPERATION
12.4 CREDIT COLLECTION ON BEHALF OF THIRD PARTIES:
DEBIT AND CREDIT ADJUSTMENTS
31/12/2004
a) “Debit” adjustments:
1. current accounts
2. central portfolio
3. cash
4. other accounts
b) “Credit” adjustments:
1. current accounts
2. transferors of bills and documents
3. other accounts
31/12/2003
1,423,167
194,173
960,908
12,841
255,245
988,050
209,977
554,325
5,866
217,882
1,467,158
2,819
1,463,901
438
1,033,259
211
1,032,650
398
12.5 OTHER OPERATIONS
Bills for collection “under reserve”
“Post-collection” bills
Total counter-value of third-party funds
under management
GPM (asset management) offer from 1/1 to 31/12/2004
31/12/2004
31/12/2003
1,131,795
303,409
801,759
268,232
0
0
11,544
2,204
SECTION 1 - INTEREST
1.1 BREAKDOWN OF ITEM 10 “INTEREST INCOME AND
SIMILAR ITEMS”
a) on loans to banks
of which:
- on loans to central banks
b) on loans to customers
of which:
- on loans with third-party funds
under administration
c) on debt securities
d) other interest receivable
e) positive balance of spreads of
“hedging” operations
31/12/2004
31/12/2003
7,033
6,174
963
1,176
235,333
0
TOTAL
214,098
0
22,789
19
25,480
1,275
0
0
265,174
247,027
1.2 BREAKDOWN OF ITEM 20 “INTEREST EXPENSE AND
SIMILAR ITEMS”
a) on due to banks
b) on due to customers
c) on securities issued
of which:
- on certificates of deposit
d) on third-party funds under
administration
e) on subordinated liabilities
f) negative balance of spreads
of “hedging” operations
TOTAL
31/12/2004
31/12/2003
6,977
36,343
51,731
22,196
29,960
44,973
3,459
2,820
47
1,647
40
894
4,730
2,509
101,475
100,572
notes to the consolidated financial statements 135
PART C - INFORMATION ON THE
PROFIT AND LOSS ACCOUNT
1.3 DETAILS OF ITEM 10 “INTEREST INCOME AND SIMILAR
ITEMS”
a) on currency assets
31/12/2004
31/12/2003
18,512
8,196
1.4 DETAILS OF ITEM 20 “INTEREST EXPENSE AND
SIMILAR ITEMS”
a) on currency liabilities
31/12/2004
31/12/2003
7,286
5,106
SECTION 2 - COMMISSIONS
notes to the consolidated financial statements 136
2.1 BREAKDOWN OF ITEM 40 “COMMISSIONS RECEIVABLE”
31/12/2004
31/12/2003
2,805
0
2,241
0
613
2,423
865
2,069
a) guarantees provided
b) credit derivatives
c) management, brokering and consulting services:
1. stock trading
2. currency trading
3. funds under management
3.1) individual
3.2) collective
4. safe custody and administration of securities
5. depositary Bank
6. placement of securities
7. collection of orders
8. consulting services
9. distribution of third-party services
1) funds under management:
a) individual
b) collective
2) insurance products
3) other products
d) collection and payment services
e) servicing for securitisation activities
f) rate and tax collection
g) other services
1,435
0
770
0
13,121
2,173
0
1,561
0
807
0
10,038
1,792
50
0
94
8,531
362
13,048
254
0
27,568
0
383
8,895
119
11,534
72
0
23,021
TOTAL
73,197
63,447
2.2 DETAILS OF ITEM 40 “COMMISSIONS RECEIVABLE”:
DISTRIBUTION CHANNELS FOR PRODUCTS AND
SERVICES
a) at own branches
1. funds under management
2. placement of securities
3. services and products of third parties
b) off-premises offer
1. funds under management
2. placement of securities
3. services and products of third parties
TOTAL
31/12/2004
31/12/2003
1,624
13,121
8,579
1,561
10,038
9,397
0
0
313
0
0
0
23,637
20,996
2.3 BREAKDOWN OF ITEM 50 “COMMISSIONS PAYABLE”
31/12/2004
31/12/2003
43
0
1
0
1,267
2,017
0
0
321
0
0
0
315
1,458
3,488
4,473
578
2,685
2,265
2,473
11,365
10,019
a) guarantees received
b) credit derivatives
c) management, brokering and consulting services:
1. stock trading
2. door-to-door selling of securities,
products and services
3. funds under management
1) own portfolio
2) portfolio of third parties
4. safe custody and administration of securities
5. placement of securities
6. off-premises offer of securities, products and services
d) collection and payment services
e) other services
TOTAL
SECTION 3 - PROFIT AND LOSS ON
FINANCIAL TRANSACTIONS
Items/Transactions
A1.
A2.
B.
Revaluations
Write-downs
Other profit (loss)
Transactions Transactions
on securities on currencies
Other
transactions
Total
8,980
8,282
15,794
0
0
7,717
0
0
3,936
8,980
8,282
27,447
TOTAL
16,492
7,717
3,936
28,145
1.
2.
3.
4.
241
13,422
3,379
-550
Government bonds
Other debt securities
Equity securities
Derivative contracts on securities
SECTION 4 - ADMINISTRATIVE
EXPENSES
4.1 AVERAGE NUMBER OF EMPLOYEES BY CATEGORY
31/12/2004
31/12/2003
average 2004
a) managers
b) third- and fourth-level managers
c) other staff
38
245
1,388
35
238
1,326
37
242
1,357
TOTAL
1,671
1,599
1,636
notes to the consolidated financial statements 137
3.1 BREAKDOWN OF ITEM 60 “PROFIT/LOSS ON FINANCIAL
TRANSACTIONS”
notes to the consolidated financial statements 138
BREAKDOWN OF ITEM 80 “ADMINISTRATIVE EXPENSES”
Indirect taxes and dues
Expenses for purchase of non-professional
goods and services
- office material and supply
- electricity, heating
and mains water
- transport and travel
- telephone, post, data transmission
- leasing of software and microfiches
- organization services and electronic
processing carried out by third parties
- other organization services and electronic
processing
- supervision
- cleaning
- transportation of valuables
Expenses for professional services
Rentals payable
- real estate rentals
- machine rentals
Expenses for maintenance of furniture
and plants
Insurance premiums
Other expenses
- subscriptions
- detached staff
- remunerations to Directors and
Statutory Auditors
- membership fees
- expenses for information and examination
- advertising and entertainment
- other expenses
TOTAL
31/12/2004
31/12/2003
10,186
9,075
25,044
23,694
1,544
1,671
2,101
1,884
4,850
478
1,800
1,403
4,766
450
761
80
10,389
700
1,399
938
10,595
709
1,344
876
5,296
8,354
4,883
8,803
6,455
1,899
6,833
1,970
3,402
2,185
13,751
2,980
1,895
11,462
1,197
0
895
568
1,950
753
1,537
5,845
2,469
1,440
597
1,084
4,360
3,128
68,218
63,402
SECTION 5 - WRITE-DOWNS,
WRITEBACKS AND PROVISIONS
BREAKDOWN OF ITEM 90 “WRITE-DOWNS OF TANGIBLE
AND INTANGIBLE FIXED ASSETS”
31/12/2004
31/12/2003
Intangible fixed assets:
Amortisation of restructuring charges
for leased facilities
Software amortisation
Other deferred costs
Amortisation of consolidation differences
2,554
1,467
3,046
7,213
2,609
1,410
3,320
7,374
Tangible fixed assets:
Depreciation for real estate
Depreciation for furniture
1,723
6,418
1,166
4,248
22,421
20,127
TOTAL
BREAKDOWN OF ITEM 100 “PROVISIONS FOR RISKS AND
CHARGES”
Provisions
31/12/2004
31/12/2003
2,960
471
5.1 BREAKDOWN OF ITEM 120 “WRITE-DOWNS OF LOANS
AND PROVISIONS FOR GUARANTEES AND
COMMITMENTS”
a) write-downs of loans
of which:
- lump-sum write-downs
for country risk
- other lump-sum write-downs
b) provisions for guarantees
and commitments
of which:
- lump-sum provisions
for country risk
- other lump-sum provisions
31/12/2004
31/12/2003
29,741
27,593
0
14,336
0
12,437
1,000
5
0
1,000
TOTAL
0
0
30,741
27,593
on non performing loans to customers:
loss
write-downs
on watch-list to customers:
analytical write-downs
lump-sum write-downs
on restructured loans:
loss
write-downs
on other performing loans:
lump-sum write-downs
on credit derivatives:
loss
write-downs
TOTAL
31/12/2004
31/12/2003
179
10,494
1,222
9,928
4,888
603
2,388
73
0
0
0
0
13,577
13,975
0
0
0
5
29,741
27,593
BREAKDOWN OF ITEM 130 “WRITE-BACKS OF LOANS AND
PROVISIONS FOR GUARANTEES AND COMMITMENTS”
Write-backs are made up of:
31/12/2004
31/12/2003
Recovery of credits amortised over previous years
Collection of interest on delayed payment
Write-backs of depreciations occurred in previous years
2,299
17
649
566
952
110
TOTAL
2,965
1,628
BREAKDOWN OF ITEM 140 “PROVISIONS TO CREDIT RISK
RESERVES”
31/12/2004
31/12/2003
Credit risks for interest on delayed payment
Credit risks
0
0
335
0
TOTAL
0
335
BREAKDOWN OF ITEM 150 “WRITE-DOWNS OF FINANCIAL
FIXED ASSETS”
Write-downs of investment securities
31/12/2004
31/12/2003
44
2,174
notes to the consolidated financial statements 139
Breakdown of write-downs of loans:
BREAKDOWN OF ITEM 160 “WRITE-BACKS OF FINANCIAL
FIXED ASSETS”
Write-backs of investment securities
31/12/2004
31/12/2003
892
0
BREAKDOWN OF ITEM 170 “PROFIT/LOSS ATTRIBUTABLE
TO EQUITY INVESTMENTS VALUED BY THE EQUITY
METHOD”
Profit attributable to equity investments
valued by the equity method
31/12/2004
31/12/2003
4,958
6,371
BREAKDOWN OF ITEM 230 “CHANGE IN RESERVE FOR
GENERAL BANKING RISK”
Utilization of the reserve for general banking risk
31/12/2004
31/12/2003
33,000
0
notes to the consolidated financial statements 140
BREAKDOWN OF ITEM 240 “INCOME TAXES FOR THE
YEAR”
1.
2.
3.
4.
Current taxes (-)
Change in prepaid taxes (+/-)
Change in deferred taxes (+/-)
Income taxes for the year (-1 +/-2 +/-3)
31/12/2004
31/12/2003
-24,214
1,232
-2,079
-25,061
-25,083
-971
161
-25,893
SECTION 6 - OTHER ITEMS OF THE
PROFIT AND LOSS ACCOUNT
6.1 BREAKDOWN OF ITEM 70 “OTHER OPERATING INCOME”
31/12/2004
31/12/2003
Debits to third parties on deposits and current accounts
Rentals receivable
Recovery of stamp duties and similar
Income from securitisation activities
Recovery of insurance premiums
Tax credits for revaluation of advances on severance pay
Other income
16,429
26
8,494
446
0
12
1,773
14,094
1
7,757
4,858
4
19
1,382
TOTAL
27,180
28,115
6.2 BREAKDOWN OF ITEM 110 “OTHER OPERATING
CHARGES”
31/12/2004
31/12/2003
Financial lease rentals
Other charges
313
451
228
338
TOTAL
764
566
6.3 BREAKDOWN OF ITEM 190 “EXTRAORDINARY INCOME”
Contingent assets and non-existent liabilities
Profit on sale:
- real estate
- securities
- equity investments
- other goods
Collection of interest on delayed payment
31/12/2004
31/12/2003
3,771
44,966
2,501
1,492
0
907
44,018
41
TOTAL
36
851
604
1
355
1,254
49,092
5,247
6.4 BREAKDOWN OF ITEM 200 “EXTRAORDINARY
CHARGES”
Contingent liabilities and non-existent assets
Loss on sale:
- securities
- equity investments
- other goods
Other
TOTAL
31/12/2004
31/12/2003
3,844
4,666
2,935
1,555
3,916
376
374
348
0
283
1,272
1,158
8,858
5,648
7.1 GEOGRAPHIC DISTRIBUTION OF INCOME
The geographic distribution of income is not such to require a detailed
breakdown in this section.
notes to the consolidated financial statements 141
SECTION 7 - OTHER INFORMATION ON
THE PROFIT AND LOSS ACCOUNT
PART D - OTHER INFORMATION
SECTION 1 - DIRECTORS AND
STATUTORY AUDITORS
1.1 REMUNERATIONS
a) Directors
b) Statutory Auditors
31/12/2004
31/12/2003
1,651
398
1,527
394
Granted
Used
36,478
26,167
24,931
26,106
228,422
29,091
143,986
24,332
3,234
0
1,430
0
2,704
26
1,428
0
notes to the consolidated financial statements 142
1.2 LOANS AND GUARANTEES PROVIDED
a) Directors
directly:
- cash loans
- credit commitments
indirectly:
- cash loans
- credit commitments
b) Statutory Auditors
directly:
- cash loans
- credit commitments
indirectly:
- cash loans
- credit commitments
The credit lines were determined in compliance with Art. 136 of Legislative
Decree No. 385 dated 1 September 1993.
Montebelluna, 29 march 2005
For the Board of Directors
The Chairman
Dr. Flavio Trinca
ANNEXES
A Statement of variations in the shareholders’ equity for the financial years
ended as at 31 December 2003 and 2004
ANNEXES 143
B The Veneto Banca Group structure
ANNEX A: STATEMENT OF VARIATIONS IN
THE SHAREHOLDERS’ EQUITY FOR THE FINANCIAL
YEARS ENDED AS AT 31 DECEMBER 2003 AND 2004
(amounts in Euro thousand)
ANNEXS 144
BALANCES AS AT 31 DECEMBER 2002
Share
capital
Legal
reserve and
issue
premium
Extraordinary
reserve
Taxed
reserve
Law No. 823
dated 19/12/73
Revaluation
reserve
Reserve
for
share
buyback
78,165
222,279
69,900
100
5,554
4,132
100
5,554
4,132
100
5,554
4,132
Appropriation of the profit (loss)
for 2002 according as per resolution taken
by the Shareholders at the
Annual Meeting of 26/4/2003:
* to ordinary reserve
* dividend to Shareholders
* to extraordinary reserve
* to the Board of Directors
* to reduce loss brought forward
Issue of subordinated bond
Statute barred dividend
Conversion of bond
16,649
Net increase in new share subscriptions
255
Changes in share capital deriving
from consolidation
Net profit for 2003
BALANCES AS AT 31 DECEMBER 2003
95,069
Appropriation of the profit (loss)
for 2003 according as per resolution taken
by the Shareholders at the
Annual Meeting of 24/4/2004:
* to ordinary reserve
* dividend to Shareholders
* to extraordinary reserve
* to the Board of Directors
* to reduce loss brought forward
Issue of subordinated bond
Statute barred dividends
Conversion of bond
Net increase in new share subscriptions
3,578
Changes in share capital deriving
from consolidation
Provision to reserve for general banking risk
Net profit for 2004
BALANCES AS AT 31 DECEMBER 2004
98,647
3,124
13,408
1
84,514
1,681
-10,043
311,599
73,265
4,525
19,322
1
23,781
-248
3,362
339,658
95,949
Taxed
reserve
and other
reserves
Reserve
for general
banking
risk
Special
reserve Art. 7
Law No. 218
dated 30/7/90
Special
reserve
Leg.D. No.153
dated 17/5/99
Negative
consolidation
differences
3
6,057
1,796
1,659
40
Minority Subordinated
interests
liabilities
18,475
154,956
Profit
brought
forward
-228
175
Net profit
for the year
Total
19,588 582,476
-3,124
-13,288
-13,408
-684
-175
28,272
-13,288
-684
28,272
1
1,936
596
3
6,057
1,796
1,659
40
19,071
11,091
40,646
82,065
-53
53
1,644
40,646
40,646 641,003
-4,525
-15,845
-19,322
-901
-53
100,192
-15,845
-901
100,192
1
-443
27,359
885
33,000
55,352
3
39,057
1,796
1,659
40
19,956
181,814
0
3,999
33,000
55,352
55,352 843,717
ANNEXS 145
-101,163
ANNEXS 146
ANNEX B: THE VENETO BANCA GROUP
STRUCTURE
S TAT U T O R Y AU D I T O R S ’ R E P O R T
O N T H E C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S
"Il Meschio a Serravalle"
Giuliana Furlanetto - Administrative Headquarters, Montebelluna (TV)
STATUTORY AUDITORS’ REPORT
ON THE CONSOLIDATED
FINANCIAL STATEMENTS
Dear Shareholders,
the draft of the consolidated financial statements for the year ended as at 31
December 2004, which the Directors of the Parent Company Veneto Banca have
communicated to us under the terms of the law, has been drawn up in
compliance with the requirements referred to in Legislative Decree No. 87/92 and
the operational regulations issued in these matters by Banca d’Italia according to
Art. 5 of the above-mentioned Legislative Decree.
The consolidated financial statements and profit and loss account, that are
audited by PricewaterhouseCooper spa, can be summarised as follows:
Balance sheet (in Euro thousand)
Total assets
Liabilities
Minority interests
Shareholders’ equity
6,643,817
5,800,100
19,956
768,409
6,588,465
statutory auditors’ report 148
PROFIT FOR THE YEAR
55,352
Memorandum accounts (in Euro thousand)
Guarantees provided
Commitments
296,040
349,440
645,480
Profit and loss account (in Euro thousand)
Profit on ordinary activities
Extraordinary profit
Change in reserve for general banking risk
Profit before taxes
Income taxes for the year
Profit for the year pertaining to third parties
PROFIT FOR THE YEAR
74,231
40,234
-33,000
81,465
25,163
-950
55,352
The Board of Directors’ report, which is in line with the consolidated financial
statements, describes the events involving the Group in a sufficient manner,
illustrates the performance of the companies included in the consolidation area
during the course of financial year 2004, and contains all other information
required by Art. 3 of Legislative Decree No. 87/92.
With regard to the consolidated financial statements, we consider that the
following shall be stated and confirmed:
• the area of consolidation covers all and only the equity investments defined as
significant according to Art. 25 of Legislative Decree No. 87/92. Therefore, the
following companies have been consolidated using the integral method: Claris
Leasing spa, carrying out leasing activities, Claris Factor spa, carrying out
factoring activities, Veneto Ireland Financial Services ltd, carrying out financial
activities on behalf of the Bank, Claris Finance srl special purpose vehicle for
the 1st securitisation operation, Banca Italo-Romena spa, Banca di Bergamo
spa and Banca Meridiana spa, all of them carrying out banking activities. Vice
versa, the equity investments in Claris Assicurazioni srl, Claris Broker spa,
Claris Vita spa, Immobiliare Italo Romena srl, Palladio Finanziaria spa and
Sintesi 2000 srl have been consolidated using the equity method since,
although they are subsidiaries and the Parent Company holds more than, or
equal to, one fifth of the voting rights, they do not carry out banking, financial
or other activities pertaining to the Group or have a structure of the financial
statements that differs from that of the Parent Company and, therefore, cannot
produce a corresponding, comparable numerical representation;
• the consolidation principles used conform with the requirements of the law;
• the notes to the financial statements provide detailed information on the items
of the balance sheet and profit and loss account of the Group, and are drawn
up in compliance with the regulations currently in force.
Montebelluna, 6 april 2005
Board of Statutory Auditors
Dr. Fanio Fanti
Dr. Michele Stiz
Dr. Diego Xausa
statutory auditors’ report 149
In accordance with its monitoring functions, the Board of Statutory Auditors
found that the procedures used to draw up the consolidated financial statements
were correct, and can therefore confirm that the draft of the consolidated
financial statements corresponds with the accounting records of the Parent
Company and the draft of the financial statements as at 31 December 2004,
approved by the subsidiaries’ Boards of Directors.
INDIPENDENT
AUDITORS’ REPORT
"Mestre - Nuovo polo economico"
Marco Pagin - Branch of Villorba (TV)
indipendent auditors’ report 152
F I N A N C I A L S TAT E M E N T S
A S AT 3 1 D E C E M B E R 2 0 0 4
"Castelfranco Veneto"
Massimiliano Porcelli - Branch of Sernaglia della Battaglia (TV)
BALANCE SHEET
ASSETS (amounts in Euro)
10
2003
23,987,131
33,489,787
Cash and balances with central banks
and post offices
20
2004
Treasury bonds and similar instruments
eligible for refinancing
with central banks
30
Loans to banks:
(a) on demand
(b) other receivables
40
2,149,013
59,782,889
366,914,763
279,065,227
49,999,076
77,617,435
316,915,687
201,447,792
Loans to customers
4,114,554,411
3,550,884,327
of which:
- loans with deposits in administration
50
4,744,097
Bonds and other debt securities:
(a) issued by governments
(b) issued by banks
2,152,477
325,882,574
264,952,826
136,515,977
96,918,954
23,478,111
35,211,221
21,241,392
9,832,771
162,025,792
127,370,000
of which:
- own securities
(c) issued by financial institutions
financial statements as at 31 december 2004 154
of which:
- own securities
0
0
(d) issued by others
3,862,694
5,452,651
60
Shares, quotas and other equity securities
70
Equity investments
80
Equity investments in Group companies
90
Intangible fixed assets
5,771,764
7,285,370
84,058,759
68,855,354
327,102,788
384,165,573
19,897,043
22,423,926
of which:
- start-up costs
- goodwill
0
0
16,336,309
100
Tangible fixed assets
130
Other assets
140
Accrued income and prepayments:
(a) accrued income
(b) prepayments
17,243,881
82,791,367
73,923,378
138,212,472
120,214,457
35,653,753
33,857,381
32,340,419
30,052,415
3,313,334
3,804,966
0
0
of which:
- issue discount on securities
TOTAL ASSETS
5,526,975,838
VICE GENERAL MANAGER
CHIEF ACCOUNTANT
Accountant Armando Bressan
GENERAL MANAGER
Accountant Vincenzo Consoli
4,898,900,495
STATO Patrimoniale (in Euro)
10
20
Due to banks
354,349,419
(b) on maturity or with notice
140,887,708
Due to customers:
1,728,817,786
1,541,165,617
263,665,226
187,652,169
1,917,443,133
(b) certificates of deposit
(c) other securities
40
Deposits in administration
50
Other liabilities
80
338,385,586
1,861,049,768
Securities issued:
(a) bonds
70
684,203,608
345,818,022
2,124,714,994
(b) on maturity or with notice
60
2003
495,237,127
(a) on demand
(a) on demand
30
2004
1,544,421,594
170,688,285
106,769,663
0
39,999,992
Accruals and deferred income:
4,744,097
2,152,477
116,614,899
110,452,135
9,589,132
(a) accrued expenses
6,680,530
(b) deferred income
2,908,602
Employees’ severance fund
10,910,658
7,591,577
3,319,081
18,735,744
Provisions for risks and charges:
(a) pensions and similar benefits
1,691,191,249
1,746,754,848
16,992,966
30,531,219
0
32,296,621
0
(b) provisions for taxation
17,294,016
21,189,187
(c) other provisions
13,237,203
11,107,434
90
Credit risk reserve
100
Reserve for general banking risk
110
Subordinated liabilities
120
Share capital
130
Issue premiums
304,765,227
280,983,347
140
Reserves:
133,870,876
110,540,316
(a) legal reserve
(b) reserve for own equity shares or quotas
(c) statutory reserves
(d) other reserves
150
Revaluation reserves
170
Profit for the year
TOTAL LIABILITIES
CHAIRMAN
Dr. Flavio Trinca
0
1,538,247
39,056,689
6,056,689
181,814,252
82,064,829
98,646,114
95,068,380
33,011,812
29,004,109
0
0
0
0
100,859,064
81,536,207
5,554,164
5,554,164
45,658,171
40,077,023
5,526,975,838
4,898,900,495
STATUTORY AUDITORS
Dr. Fanio Fanti
Dr. Michele Stiz, Dr. Diego Xausa
financial statements as at 31 december 2004 155
LIABILITIES (amounts in Euro)
GUARANTEES AND COMMITMENTS
(amounts in Euro)
10
Guarantees provided
2004
2003
492,447,697
522,929,785
of which:
- acceptances
- other guarantees
20
5,229,918
3,040,538
487,217,779
519,889,247
Commitments
42,605,846
63,968,160
of which
- for sale with repurchase oprations
Commitments given on credit derivatives
0
0
15,000,000
financial statements as at 31 december 2004 156
30
VICE GENERAL MANAGER
CHIEF ACCOUNTANT
Accountant Armando Bressan
GENERAL MANAGER
Accountant Vincenzo Consoli
7,500,000
PROFIT AND LOSS ACCOUNT
(amounts in Euro)
10
Interest income and similar items
2004
2003 (1)
187,409,468
180,141,160
of which:
- on loans to customers
- on debt securities
20
168,521,759
159,648,050
12,423,933
15,434,224
Interest expense and similar items
90,275,682
87,403,043
of which:
30
- on due to customers
23,597,037
21,429,700
- on securities issued
47,784,246
38,756,526
Dividends and other income:
22,098,756
18,554,782
(a) from shares, quotas
and other equity securities
(b) from equity investments
(c) from equity investments in Group companies
5,095,689
2,921,892
2,145,571
859,372
14,857,496
14,773,518
40
Fee and commission income
50
Fee and commission expenses
8,498,847
9,211,971
60
Profit on financial transactions
20,494,578
20,067,267
70
Other operating income
23,248,718
23,750,609
80
Administrative expenses:
118,562,752
107,847,147
(a) Personnel costs
55,668,936
49,250,269
70,447,109
64,114,649
- wages and salaries
48,785,749
44,921,962
- social security charges
13,559,402
11,393,751
- employees’ severance
2,473,452
2,296,656
- pensions and similar benefits
2,672,090
2,431,756
48,115,643
43,732,498
(b) other administrative expenses
90
Write-downs of tangible and
9,721,740
7,834,340
100
intangible fixed asstes
Provisions for risks and charges
641,226
84,428
110
Other operating charges
418,553
156,145
120
Write-downs of loans and provisions
23,527,320
20,004,955
2,356,336
1,405,217
0
308,395
for guarantees and commitments
130
Write-backs of loans and provisions
for guarantees and commitments
140
Provisions to credit risk reserves
150
Write-downs of financial fixed assets
44,267
173,929
160
Write-backs of financial fixed assets
892,168
0
170
Profit on ordinary activities
60,478,573
60,144,951
180
Extraordinary income
39,263,417
1,835,732
190
Extraordinary charges
6,294,225
4,219,241
200
Extraordinary profit (loss)
32,969,192
-2,383,509
210
Change in reserve for general banking risk
33,000,000
0
220
Income taxes for the year
14,789,594
17,684,419
230
PROFIT FOR THE YEAR
45,658,171
40,077,023
CHAIRMAN
Dr. Flavio Trinca
STATUTORY AUDITORS
Dr. Fanio Fanti
Dr. Michele Stiz, Dr. Diego Xausa
(1) As a result of the Legislative Decree 344/2003, which reformed the regulations on dividends and, to enable comparison between the figures from two financial
years, the profit and loss account for the period to 31 December 2003 has been restated to remove the impact of tax credits on dividends. This restatement had
a total impact of Euro 2,803,862 and specifically impacts account items “30 Dividends and other income” and “220 Income taxes for the year”.
financial statements as at 31 december 2004 157
of which:
NOTES TO THE FINANCIAL
STATEMENTS
PRESENTATION AND CONTENTS OF THE
FINANCIAL STATEMENTS
The financial statements are made up of the balance sheet, the profit and loss
account and the notes to the financial statements, and they are supplemented
with the Board of Directors’ report, as established by Legislative Decree
No. 87/92, which, in pursuance of the European Community Directives No.
86/635 and No. 89/117, regulates the annual and consolidated accounts of banks.
These notes, whose figures are in Euro thousands, shows and analyses the
financial statements, and it contains the information in accordance to the
aforementioned legislative decree, Banca d’Italia’s ruling No. 14 dated 16 January
1995 and other laws. Although not specifically requested, complementary
information is also provided about all matters that are deemed necessary to give
a true and fair view.Therefore, the following documents are attached to the notes
to the financial statements:
A - Statement of variations in the shareholders’ equity;
notes to the financial statements 158
B - Revaluations sheet (art. 10, Act 72/83);
C - List of equity investments;
D - Statement of cash flows;
E - List of bonds convertible into shares (art. 2, lett. b, Pres.Decree 137/75);
F - Financial statements of subsidiary or affiliate companies (art. 2429, par. 3 and
4, of the Italian Civil Code).
The financial statements are audited by PricewaterhouseCoopers spa, which was
entrusted with this task for the three years period 2004-2006.
PART A – ACCOUNTING POLICIES
The financial statements are prepared pursuant to applicable laws, taking into
consideration the accounting principles applied in Italy to correctly interpret such
laws and in accordance with the following general valuation criteria:
• Consistency of application: the accounting policies are constantly applied, from
year to year, except when expressely reported in the following parts of these
notes with reference to the securities section.
• Substance over form: whenever possible, substance shall prevail over form, and
the time of settlement of a transaction shall prevail over the time of negotiation
so as to give a correct picture of the financial situation.
• Going concern: the valuations in the financial statements are made based on the
prospect that the business shall continue in operational existence.
• Prudence: reference is made only to the profit achieved as at close of the
financial year, except for the provisions of specific valuation criteria. The risks
and losses pertaining to the financial year and that have become known after
the close of the financial year are also taken into account.
• Accrual principle: income and charges are recorded on an accrual basis.
• Separate valuation: on-balance sheet and off-balance sheet assets and liabilities
are valued separately, which means that no global valuations are made, except
for what is stated under valuation consistency.
• Valuation consistency: the on-balance sheet and off-balance sheet assets and
liabilities that are connected to each other are valued consistently, which means
that homogeneous criteria are used.
The principles adopted, which are listed below, have been defined in agreement
with the Board of Statutory Auditors, when provided for by relevant regulations.
SECTION 1 – EXPLANATION OF THE
VALUATION CRITERIA
QUALITATIVE INFORMATION ON CREDIT RISKS
The classification of anomalous loans (non performing loans, watch-list
loans, restructured loans, etc.) is based on recording criteria established by
supervisory regulations.
In detail:
• Loans are classified as “non performing loans” if debtors are insolvent. The
estimated recoverable amount is determined based on the valuation of the
debtor’s equity and existing personal and real securities.
• Loans are classified as “watch-list loans” when debtors are in temporary
difficulties, but they are expected to overcome them in a reasonable lapse
of time.
Arrangements classified as such are managed by the Legal Department,
which monitors their continuation or the payment of the outstanding debt.
The estimated recoverable amount of watch-list loans is determined in the
same way as for non performing loans.
• Loans are classified as “loans under rescheduling” when the counterparty
has debts with several banks and it applied for consolidation.
• Loans are classified as “restructured loans” when they are issued by several
banks, which grant a debt moratorium renegotiating debts at lower rates
than market rates. The Legal Department manages also this category. These
loans are valued using the same criteria as those used for non performing
loans and watch-list loans.
• Loans to counterparties resident in countries not belonging to the OECD
area are classified as “non-guaranteed loans exposed to country risk”.
CREDIT ACCOUNTING POLICIES
The value of on-balance sheet credits, including accrued contract interest and
interest on delayed payment, is equal to their estimated recoverable amount. This
value is obtained by deducting from the total credit amount the expected
principal and interest losses, defined according to specific analyses for non
performing loans, watch-list loans, restructured loans and loans under
rescheduling, and on a lump-sum basis for the remaining items. Performing
loans to customers and watch-list loans arising from the so-called “physiological
risk”have been written down on a lump-sum basis with a percentage equal for
all items, also determined according to the historical trend of the losses incurred,
the product category to which customers belong, the geographic operational area
and any other aspect pertaining to the entries.
The original value of credits shall be reinstated in the following years if the
reasons for write-downs cease to exist.
notes to the financial statements 159
1. LOANS, GUARANTEES AND COMMITMENTS
ACCOUNTING POLICIES FOR GUARANTEES AND COMMITMENTS
The guarantees provided are entered at the total value of the commitment
undertaken. Any losses on these operations are reflected through accruals to
provisions for risks and charges.
Securities and foreign exchanges to be received are entered at the forward price
established by contract with the counterparty.
Commitments to allocate funds, undertaken towards counterparties and
customers, are entered at the amount to be settled.
Definitely sold loans (non-recourse loans) have been written-off from the
financial statements, and the write-downs or write-backs have been charged to
the profit and loss account at an amount equal to the difference between the
consideration received and the value at which they had been entered in the
financial statements.
2. SECURITIES AND “OFF-BALANCE SHEET”
TRANSACTIONS (OTHER THAN FOREIGN
CURRENCY TRANSACTIONS)
notes to the financial statements 160
Beginning in FY 2004, the weighted average cost method was adopted for the
valuation of securities rather than the LIFO method on a yearly basis, which was
utilised until the financial year ending 31 December 2003. For trading securities
listed on regulated markets, market value has been used.
The change has not produced any significant results.
2.1 INVESTMENT SECURITIES
The securities classified as financial fixed assets represent a stable investment
for the Company, since they are bound to be used in the long run, and
consequently they are recorded and valued at the acquisition cost. However, the
cost value is reduced in case of losses that are deemed to be other than
temporary.
The original cost shall be reinstated in the following years if the reasons for the
write-down cease to exist.
Unlisted investment securities are valued at historical cost.
Issue spreads are calculated according to the provisions of art. 8 of Legislative
Decree dated 27/12/1994, including the amount accrued in taxable income for
the year.
2.2 TRADING SECURITIES
Securities not classified as financial fixed assets are valued at market value, if
listed on regulated markets; at the lower of the cost, determined according to the
daily weighted average cost method and the market price, if not listed.
Market value is determined:
• with regard to securities traded in organised markets, by taking the reference
price on the closing date of the period;
• with regard to unlisted Italian and foreign securities, from the estimated
recoverable amount, obtained by discounting back all future financial flows at
current market rates, taking into account the spreads attributable to issuing
bodies for the risk associated thereto, and from the exact prices obtainable from
information circuits normally used all over the world and objectively
determinable.
The original cost of securities not listed on regulated markets whose value has
previously been written down shall be reinstated in the following years if the
reasons for the write-down cease to exist.
REPOS according to which the transferee shall resell the securities for forward
delivery are entered as deposit and loan financial transactions. The deposit cost
and loan income, consisting in the matured coupons of securities and the spread
between the spot price and forward price of such securities, are entered as
interest on an accrual basis.
Issue spreads have been calculated according to the provisions of art. 8 of
Legislative Decree dated 27/12/1994, including the amount accrued in the taxable
income for the year.
“OFF-BALANCE SHEET” TRANSACTIONS (OTHER THAN
FOREIGN CURRENCY TRANSACTIONS)
Derivatives are valued as follows:
b) Trading derivatives:
• listed derivatives are valued at book value, and capital losses, if any, are
entered in the profit and loss account as loss on financial transactions with
“other liabilities”as a contra-entry;
• non listed derivatives in regulated markets are valued individually by
discounting future cash flows using the market interest rate curve at 31
December 2004. Any resulting capital losses are recorded in the profit and
loss account as losses from financial transactions with counterparties “other
liabilities”;
• unlisted derivatives traded for client accounts, as for brokers, are valued
taking into account the creditworthiness of the counterparty, with the result
being provided for in the reserve for risks and charges;
• over the year, both the spreads realised and the margins paid and/or
collected upon contract signature are entered under the item“profit (loss) on
financial transactions”.
c) Spreads on unlisted non-trading derivatives coming to maturity over the year,
are recorded on an accrual basis as interest income and interest expense
according to the proceeds or costs generated by the assets/liabilities hedged,
or based on the period of validity of contracts in case of connected securities
or general hedging.
d) The premiums paid or collected for option trading are entered under “other
assets” or “other liabilities” respectively. These premiums are debited or
credited to the profit and loss account if the option is not exercised. The
premium value for exercised options on securities is added to or deducted
from the costs or proceeds relating to the purchased or sold security.
e) “Off-balance sheet” security transactions, that is, transactions having a value
date in a successive financial period, are valued using the same criteria as
those established for the categories of “trading securities”.“Off-balance sheet”
transactions connected between each other or with portfolio securities are
notes to the financial statements 161
a) Derivatives for the hedging of assets and liabilities for trading purposes or
connected to other assets and liabilities:
• listed and unlisted hedging derivatives for trading purposes available as at
close of the financial year are valued according to the assets/liabilities
hedged or connected thereto;
• over the year, spreads are recorded on an accrual basis as interest income
and interest expense according to the proceeds or costs generated by the
assets/liabilities hedged, or based on the period of validity of contracts in
case of connected securities or general hedging.
valued consistently with each other.
f) Commissions and final up-fronts, consisting in the advance collection or
payment of an amount of money pertaining to the contract, which will no
longer be returned to (by) customers, are recorded in the financial year in
which the contracts are signed.
3. EQUITY INVESTMENTS
Pursuant to art. 18, par. 1, of Legislative Decree No. 87/1992, equity investments
are valued at acquisition cost, determined based on the purchase or subscription
price or the value assigned upon allotment. Equity investments are written down
in case of losses deemed to be other than temporary according to par. 2, second
sentence of the aforementioned art. 18. The original value is reinstated in the
following years if the reasons for the write-down cease to exist.
Dividends are recorded in the financial year in which they are collected.
notes to the financial statements 162
4. ASSETS AND LIABILITIES IN FOREIGN
CURRENCY (INCLUDING “OFF-BALANCE
SHEET” TRANSACTIONS)
Foreign currency transactions are recorded at the time of settlement.
Assets, liabilities and “off-balance sheet”spot transactions in foreign currency are
converted in Euro at the exchange rates ruling at year-end; the effect of such
valuation is charged to the profit and loss account.
“Off-balance sheet”forward transactions are valued:
• in case of hedging transactions, at the exchange rate ruling at year-end; the
spreads between the forward and spot exchange rate of such transactions are
entered in the profit and loss account according to a temporal distribution
consistent with the recording of interest arising from hedged assets or
liabilities;
• in case of trading transactions, at the corresponding forward exchange rates
ruling at year-end;
• unlisted trading currency options are valued individually using current market
values, and capital losses, if any, are entered in the profit and loss account as
loss on financial transactions;
• unlisted currency options for brokerage on behalf of customers are valued
taking into account the creditworthiness of the counterparties, the relevant
result is provided for in a reserve for risks and charges.
Equity investments in foreign currency are entered at the historical demand rate,
while investment and trading securities in foreign currency are written down or
up at the exchange rate ruling at year-end.
Costs and proceeds in foreign currency are entered at the exchange rate ruling at
the time of recording.
5. TANGIBLE FIXED ASSETS
They are recorded at the acquisition cost, including the accessory charges
incurred, adjusted for some goods in pursuance of specific monetary revaluation
laws; the amount entered in the financial statements is obtained by deducting the
write-downs carried out from the book value so defined.
Tangible fixed assets are depreciated in each financial year on a straight-line
basis according to economic/technical charges based on the residual life of the
assets.
This principle is also in line with fiscally allowed charges.
Maintenance and repair expenses that do not imply an increase in the net worth
of assets are charged to the profit and loss account for the year, while the
expenses implying an increase are entered under the specific technical fixed
assets to which they refer.
6. INTANGIBLE FIXED ASSETS
They are entered under assets at the acquisition cost, including accessory charges,
subject to approval of the Board of Statutory Auditors if necessary, and they are
systematically amortised according to their potential use.
The paid goodwill is entered under assets and amortised over a five-year or
longer period based on its estimated useful life.
7. OTHER ASPECTS
ACCRUALS AND PAYABLES
These items include shares of costs and proceeds relating to several years in order
to comply with the accrual principle.
They are calculated taking into account, with regard to interest, the rates
applicable to each agreement, and, with regard to costs and proceeds, elements
that are certain and the accrual principle.
Some of them are directly added to the liability accounts to which they refer, since
this representation is more technically appropriate.
DEPOSITS IN ADMINISTRATION
They represent the debt existing at year-end towards third party assignors.
EMPLOYEES’ SEVERANCE FUND
This item reflects, net of advances, the benefits accruing to employees on payroll
as at close of the financial year, determined according to Law No. 297 dated 29
May 1982.
PROVISIONS FOR RISKS AND CHARGES
The provision for taxation includes allocations for current and deferred taxes
payable, as well as for the risk arising from fiscal disputes, if any.
The provision for current taxes is a reasonable forecast of the chargeable amount,
determined according to applicable tax regulations.
Deferred taxes have been calculated by applying the income statement liability
method established by IAS 12 according to the specific provisions of Banca
d’Italia. In particular, the provisions for taxation include liabilities for deferred
taxes arising from taxable temporary differences that are expected to be paid. No
provision for deferred taxes is made for equity reserves set up free of tax, since at
present no transactions are expected to be carried out that would determine their
taxation. Deferred tax assets, originating from deductible temporary differences
whose collection can reasonably be deemed to be certain based on future
expected taxable income are entered under other assets.
notes to the financial statements 163
OTHER RECEIVABLES AND PAYABLES
Other receivables and payables are entered at face value. With regard to
receivables, this value is equal to the estimated recoverable amount.
OTHER PROVISION
Other provisions are made to reflect losses of the guarantees provided and
commitments undertaken, as well as to provide for certain or probable liabilities,
whose amount or date of occurrence, however, cannot be determined at the close
of the financial year or at the date of preparation of these financial statements.
PROVISION FOR GENERAL BANKING RISK
This provision is used to hedge the general business risk and, therefore, it is
included in the shareholders’ equity.
SUBORDINATED LIABILITIES
The value entered in the financial statements corresponds to the face value of the
loan.
STOCKS OF CONSUMABLES
Year-end stocks of stationery and printing supplies or promotional articles are
entered by applying to the stocks the last cost price for the goods of that kind.
These stocks are recorded under item “other assets” with “administrative
expenses”as a contra-entry.
notes to the financial statements 164
SECTION 2 – ADJUSTMENTS AND TAX
PROVISIONS
In compliance with Article 7, comma 1 of Legislative Decree no. 37 of 6 February
2004, which rescinds articles 15, comma 3 and 39, comma 2 of Legislative Decree
no. 87/92 allowing adjustments and provisions exclusively on the basis of tax
regulations, previous tax timing differences are provided for.
The effects of this elimination are recorded as extraordinary income, with notes
on any related tax deferrals.
2.1 VALUE ADJUSTMENTS RECORDED ONLY IN PURSUANCE
OF TAX REGULATIONS
No value adjustments were carried out.
2.2 PROVISIONS MADE ONLY IN PURSUANCE OF TAX
REGULATIONS
No provisions were carried out.
PART B – BALANCE SHEET
INFORMATION
SECTION 1 - LOANS
BREAKDOWN OF ITEM 10 “CASH AND BALANCES WITH
CENTRAL BANKS AND POST OFFICES”
31/12/2004
31/12/2003
Notes and coins
Demand postal current accounts
23,983
4
33,464
25
TOTAL
23,987
33,490
BREAKDOWN OF ITEM 30 “LOANS TO BANKS”
31/12/2004
31/12/2003
On demand
• demand deposits
• current accounts
Other receivables
Loans to central banks
Term deposits
Loans
49,999
14,372
35,627
316,916
34,858
184,969
97,089
77,617
31,735
45,883
201,448
25,746
137,159
38,544
TOTAL
366,915
279,065
a)
b)
c)
d)
loans to central banks
bills eligible for refinancing with central banks
REPOS
loan of securities
31/12/2004
31/12/2003
34,858
0
0
0
25,746
0
0
0
Loans to central banks as per item a) refer to the management account at the
Banca d’Italia.
The average rate of return on securities in FY 2004 was 2%, with an average worth
of about 36.385 million Euro.
1.2 CASH LOANS TO BANKS
Value/categories
Gross
exposure
Total
write-downs
Net
exposure
A. Doubtful loans
A.1 Non performing loans
A.2 Watch-list
A.3 Loans being restructured
A.4 Restructured loans
A.5 Non-guaranteed loans
exposed to country risk
B. Performing loans
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
366,915
0
0
0
366,915
TOTAL
366,915
0
366,915
1.3 TREND OF DOUBTFUL LOANS TO BANKS
A table with details of the situation of doubtful loans towards banks cannot be
drawn up since there are no items included in this category and all the remaining
performing loans can be realised.
notes to the financial statements 165
1.1 DETAILS OF ITEM 30 “LOANS TO BANKS”
1.4 TREND OF TOTAL ADJUSTMENTS OF LOANS TO BANKS
The statement concerning the trend of total adjustments of loans to banks is not
drawn up since no write-downs have been posted.
BREAKDOWN OF ITEM 40 “LOANS TO CUSTOMERS”
31/12/2004
31/12/2003
Ordinary current accounts
Assets sold from the trading portfolio
Carry-overs and loan REPOS
Financial pooling
Mortgage loans
Unsecured loans
Other non-regulated subsidies on
current account and other credits
Import-export loans
Deposits in administration
Outstanding credits
Other technical forms
Provisions for adjustment of the assets
1,444,020
25,532
75,002
54,957
982,000
161,892
1,388,536
29,625
79,195
56,317
560,261
171,085
1,158,088
206,277
4,744
29,913
290
-28,161
1,055,931
200,028
2,152
26,631
387
-19,265
TOTAL
4,114,554
3,550,884
The total amount of the distributed loans is expressed in the financial statements
as a forecast of the value.
notes to the financial statements 166
1.5 DETAILS OF ITEM 40 “LOANS TO CUSTOMERS”
31/12/2004
31/12/2003
13,299
75,002
0
19,567
79,195
0
a) bills eligible for refinancing with central banks
b) REPOS
c) loan of securities
1.6 SECURED LOANS TO CUSTOMERS
a) from mortgages
b) from pledges on:
1 - cash deposits
2 - securities
3 - other stocks
c) from guarantees of
1 - Governments
2 - other public institutions
3 - banks
4 - other operators
TOTAL
31/12/2004
31/12/2003
1,080,898
85,881
629,390
64,533
39,468
23,326
23,087
18,273
33,180
13,080
859,682
0
2,818
2,303
854,561
799,008
0
2,215
1,670
795,123
2,026,461
1,492,931
Loans towards customers, partly or totally secured for 2,026 million represent
49.25% of the total.
1.7 CASH LOANS TO CUSTOMERS
Value/categories
A. Doubtful loans
A.1 Non performing
A.2 Watch-list loans
A.3 Loans being
restructured
A.4 Restructured loans
A.5 Non-guaranteed loans
exposed to country risk
B. Performing loans
Gross
exposure
Total
write-downs
100,216
Net
exposure
23,514
76,702
48,927
43,040
19,014
4,500
29,913
38,540
0
8,249
0
0
0
8,249
0
TOTAL
0
0
4,061,513
23,661
4,037,852
4,161,729
47,175
4,114,554
1.8 TREND OF DOUBTFUL LOANS TO CUSTOMERS
Non-performing Watch-list
loans
loans
A. Starting gross exposure
as at 31/12/2003
A.1 of which for interest
on delayed payment
B. Increases
B.1 Performing loan inflows
B.2 Interest on delayed payment
B.3 Transfer from other
doubtful loan categories
B.4 Other increases
C. Decreases
C.1 Disbursements for
performing loans
C.2 Write-offs
C.3 Collections
C.4 Gains on sales
C.5 Transfer to other doubtful
loan categories
C.6 Other decreases
D. Final gross exposure
as at 31/12/2004
D.1 of which for interest on
delayed payment
45,297
22,768
0
0
0
1,584
25,239
728
353
0
84,526
81,700
1,452
0
0
0
0
0
8,249
8,249
0
0
0
0
0
24,158
0
21,609
0
1,374
64,254
0
0
0
0
0
0
0
0
0
0
11,829
9,764
16
1,376
0
38,720
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
24,158
0
0
0
0
0
0
0
48,927
43,040
0
8,249
0
1,557
0
0
0
0
notes to the financial statements 167
Reasons/categories
Non guaranteed
loans
Loans being Restructured
exposed to
restructured
loans
country risk
1.9 TREND OF TOTAL WRITE-DOWNS OF LOANS TO
CUSTOMERS
Reasons/categories
notes to the financial statements 168
A. Final total adjustments
as at 31/12/2003
A.1 of which for interest
on delayed payment
B. Increases
B.1 Write-downs
B.1.1 of which for interest
on delayed payment
B.2 Utilizations of credit
risk reserve
B.3 Transfers from
other loan
categories
B.4 Other increases
C. Decreases
C.1 Write-backs
for valuation
C.1.1 of which for interest
on delayed payment
C.2 Write-backs
for collection
C.2.1 of which for interest
on delayed payment
C.3 Write-offs
C.4 Transfers to other
loan categories
C.5 Other decreases
D. Final total adjustments
as at 31/12/2004
Non Watch-list
Loans Restructured Non-guaranteed Performing
performing
being
loans
loans
loans
loans
restructured
exposed to
country risk
18,666
1,354
0
0
0
17,912
46
8,045
7,735
0
3,720
3,720
0
0
0
0
0
0
0
0
0
0
11,169
11,075
3
0
0
0
0
0
0
0
0
0
0
0
310
0
7,697
0
0
574
0
0
0
0
0
0
0
0
0
0
94
5,420
64
140
0
0
0
0
0
0
0
0
0
0
641
30
0
0
0
0
14
6,992
0
0
0
0
0
0
0
0
0
5,420
0
0
310
94
0
0
0
0
0
0
0
0
19,014
4,500
0
0
0
23,661
30
0
0
0
0
0
D.1 of which for interest
on delayed payment
SECTION 2 - SECURITIES
BREAKDOWN OF SECURITIES BY TYPE
Debt securities
- Treasury bonds and similar
instruments eligible for refinancing
with central banks
- Bonds and other debt securities
Shares, quotas and other
equity securities
31/12/2004
31/12/2003
328,031
324,736
2,149
325,882
59,783
264,953
5,772
7,285
TOTAL
333,803
332,021
of which:
- Investment securities
- Trading securities
130,192
203,611
138,918
193,103
2.1 INVESTMENT SECURITIES
1. Debt securities
1.1 Government bonds
- listed
- unlisted
1.2 Other securities
- listed
- unlisted
2. Equity securities
- listed
- unlisted
TOTAL
Balance-sheet value
Market value
127,000
0
127,000
0
0
0
0
0
127,000
0
127,000
127,000
0
127,000
3,192
0
3,192
3,170
0
3,170
130,192
130,170
The portfolio consists of securities that were specifically considered as fixed
assets, according to the relevant resolutions adopted upon purchase, in order to
obtain a steady inflow of funds in the medium-to-long term.
Moreover, it was deemed important to follow the criteria for the definition of
investment securities:
• Securities that are intended to be held as an investment cannot, as a principle,
be sold before their natural maturity, except for extraordinary circumstances
and, in any case, after resolution of the relevant administration body. By way of
exception to this principle, security exchange and/or portfolio restructuring
transactions can be carried out provided that they will not significantly change
the portfolio values and that they are aimed at providing economic benefits in
terms of profitability.
• The connected rate and exchange risks can be hedged by ad-hoc hedging
transactions.
• The allocation of securities in the examined section is based on an ad-hoc
“framework resolution” of the relevant administrative body which establishes
its percentage and absolute quantitative limits.
Derivative investment securities
During the year, steps were taken to close interest rate swap contracts linked to
debt securities listed in foreign regulated markets transferred to the trading
portfolio; the transfer and the successive valuation are undertaken on the basis of
the valuation resulting from the application, at the time of the transaction, of the
valuation rules applicable to the portfolio of origin, thus at cost. Closing the
contracts created a capital loss of Euro 3,729 thousand, which was recorded in
extraordinary charges.
notes to the financial statements 169
Items/Values
2.2 ANNUAL CHANGES IN INVESTMENT SECURITIES
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Transfers from the trading portfolio
B4. Other changes
C. Decreases
C1. Sales
C2. Redemptions
C3. Write-downs
of which
- lasting write-downs
C4. Transfers to the trading portfolio
C5. Other changes
138,918
642
0
0
0
642
9,368
0
0
0
0
9,134
234
D. Final stocks
130,192
2.3 TRADING SECURITIES
Items/Values
notes to the financial statements 170
1. Debt securities
1.1 Government bonds
- listed
- unlisted
1.2 Other securities
- listed
- unlisted
2. Equity securities
- listed
- unlisted
TOTAL
Balance-sheet value
Market Value
201,031
21,124
21,124
0
179,907
120,540
59,367
204,897
21,124
21,124
0
183,773
120,173
63,600
2,580
2,580
0
2,580
2,580
0
203,611
207,477
The evaluation of the listed trading securities, resulted in a capital gain of Euro
350.7 thousand, recorded in the profit and loss account. The valuation of unlisted
securities resulted in a capital loss of Euro 33.1 thousand, recognised in the profit
and loss account, and a capital gain of Euro 1,234.4 thousand not recognised in
the profit and loss account; the valuation of securities transferred from the
investment portfolio resulted in a capital gain of Euro 2,630.9 thousand which
was not recognised in the profit and loss account.
On the other hand write backs of securities depreciated in previous financial
years and in the portfolio as well, amounted to 125.7 thousand Euro, debited, too,
to the profit and loss account.
As can be seen in the statement above, there are unrecorded increases in value in
the balance sheet amounting to 3,866 thousand Euro compared to the market
values, as defined in the previous Part A – Section 1 on evaluation criteria.
The Bank maintained in its portfolio bonds it has issued amounting to 21,241.4
thousand Euro purchased in negotiations with customers in the secondary
market.
Derivative trading securities
Evaluation of the “Portugal” asset swap resulted in gain amounting to 179.7
thousand Euro, calculated as the difference between the increase in value on
securities amounting to 8,406.4 thousand Euro, recorded in the profit and loss
account and the losses calculated on swaps amounting to 8,226.6 thousand Euro
also recorded in the profit and loss account.
2.4 ANNUAL CHANGES IN TRADING SECURITIES
A. Opening balance
B. Increases
B1. Purchases
- Debt securities
+ government bonds
+ other securities
- Equity securities
B2. Write-backs and revaluations
B3. Transfers from the investment portfolio
B4. Other changes
C. Decreases
C1. Sales and redemptions
- Debt securities
+ government bonds
+ other securities
- Equity securities
C2. Write-downs
C3. Transfers to the investment portfolio
C5. Other changes
193,103
947,797
926,488
811,332
460,135
351,197
115,156
8,705
9,134
3,470
937,289
937,254
817,477
486,493
330,984
119,777
35
0
0
D. Final stocks
203,611
SECTION 3 – EQUITY INVESTMENTS
3.1 SIGNIFICANT EQUITY INVESTMENTS
A. Subsidiary companies
1. Claris Factor spa
2. Claris Assicurazioni srl
3. Claris Broker spa
4. Claris Leasing spa
5. Claris Finance srl
6. Banca Italo-Romena spa
7. Banca di Bergamo spa
8. Banca Meridiana spa
9. Immobiliare Italo Romena srl
10. Veneto Ireland Financial
Services ltd
B. Significantly influenced companies
1. Palladio Finanziaria spa
2. Sintesi 2000 srl
3. Claris Vita spa
Head
Office
Shareholders’
equity
Profit/
loss
%
Balance
share sheet value
Montebelluna
Montebelluna
Montebelluna
Treviso
Roma
Treviso
Bergamo
Bari
Bucarest
7,369
171
110
22,404
10
37,157
42,211
38,615
96
Dublino
138,279
11,278
100
127,000
Vicenza
Milano
Milano
165,790
96
52,414
15,063 21,212
-81 33,333
1,676
20
29,696
59
14,610
2,594
100
79
100
-42
100
2,009
100
0
70
3,299 92,308
1,712 60,068
2,006 99,385
18
100
4,155
52
568
20,000
7
31,193
28,589
115,451
88
notes to the financial statements 171
Designation
notes to the financial statements 172
3.2 ASSETS AND LIABILITIES INVOLVING GROUP
COMPANIES
31/12/2004
31/12/2003
a) Assets
1. loans to banks
of which: subordinated
2. loans to financial institutions
of which: subordinated
3. loans to other customers
of which: subordinated
4. bonds and other debt securities
of which: subordinated
700,193
132,326
0
440,565
0
277
0
127,025
0
543,151
78,436
0
336,977
0
368
0
127,370
0
b) Liabilities
1. due to banks
2. due to financial institutions
3. due to other customers
4. securities issued
5. subordinated liabilities
411,187
350,125
751
4,540
55,771
0
441,746
363,601
23,968
5,203
48,974
0
c) Guarantees and commitments
1. Guarantees provided
2. Commitments
287,848
270,374
17,474
302,094
301,751
343
In detail:
item a.1 mutual accounts and demand deposits of Banca Italo-Romena spa,
Banca di Bergamo spa and Banca Meridiana spa;
item a.2 loans granted to Claris Factor spa, Veneto Ireland Financial Services
ltd, Claris Leasing spa and Claris Finance srl, and current accounts
with Claris Leasing spa, Claris Factor spa and Veneto Ireland Financial
Services ltd;
item a.3 current accounts with Claris Broker spa and Claris Vita spa;
item a.4 bonds of Veneto Ireland Financial Services ltd and Claris Finance srl;
item b.1 mutual accounts and term deposist of Banca Italo-Romena spa, and
mutual accounts and payable REPOS of Banca di Bergamo spa and
Banca Meridiana spa;
item b.2 current account deposits of Claris Finance srl;
item b.3 current account deposits of Claris Assicurazioni srl and Claris Broker
spa;
item c.1 guarantees issued on behalf of Claris Leasing spa, Claris Factor spa,
Claris Assicurazioni srl, Veneto Ireland Financial Services ltd, Banca
Italo-Romena spa, Banca di Bergamo spa and Banca Meridiana spa;
item c.2 commitments to Banca di Bergamo spa.
31/12/2004
31/12/2003
a) Assets
1. loans to banks
of which: subordinated
2. loans to financial institutions
of which: subordinated
3. loans to other customers
of which: subordinated
4. bonds and other debt securities
of which: subordinated
79,752
54,315
0
8,359
0
17,077
0
0
0
63,002
23,369
0
22,704
0
16,588
0
342
0
b) Liabilities
1. due to banks
2. due to financial institutions
3. due to other customers
4. securities issued
5. subordinated liabilities
39,859
15,055
20,968
3,836
0
0
48,597
46,799
1,785
13
0
0
186
186
0
162
162
0
c) Guarantees and commitments
1. guarantees provided
2. ommitments
In details:
item a.1 our deposits in controlled banks;
item a.2 our current account loans towards controlled financial entities;
item a.3 our loan to controlled companies;
item a.4 bonds in the portfolio of controlled Italian banks;
item b.1 deposits and current accounts payable of controlled banks;
item b.2 current accounts payable of controlled holding companies;
item b.3 current accounts payable of other controlled companies;
item c.1 guarantees issued to controlled companies.
3.4 BREAKDOWN OF ITEM 70 “EQUITY INVESTMENTS”
31/12/2004
31/12/2003
a) In banks
1. listed
2. unlisted
20,365
14,777
5,588
19,693
14,105
5,588
b) In financial institutions
1. listed
2. unlisted
33,994
1,800
32,194
32,464
1,800
30,664
c) Other
1. listed
2. unlisted
29,700
0
29,700
16,698
1,972
14,726
TOTAL
84,059
68,855
notes to the financial statements 173
3.3 ASSETS AND LIABILITIES INVOLVING SUBSIDIARIES
(OTHER THAN GROUP COMPANIES)
3.5 BREAKDOWN OF ITEM 80 “EQUITY INVESTMENTS IN
GROUP COMPANIES”
31/12/2004
31/12/2003
a) In banks
1. listed
2. unlisted
175.233
0
175.233
159.245
0
159.245
b) In financial institutions
1. listed
2. unlisted
151.162
0
151.162
151.162
0
151.162
708
0
708
73.759
0
73.759
327.103
384.166
c) Other
1. listed
2. unlisted
TOTAL
Annex “D”to the notes to the financial statements shows in details all the equity
investments of the Company.
3.6 ANNUAL CHANGES IN EQUITY INVESTMENTS
notes to the financial statements 174
3.6.1 EQUITY INVESTMENTS IN GROUP COMPANIES
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
C. Decreases
C1. Sales
C2. Write-downs
of which: oher than temporary write-downs
C3. Other changes
384,166
53,163
15,989
0
0
37,174
110,226
95,616
0
0
14,610
D. Final stocks
327,103
E. Total revaluations
F. Total adjustments
0
0
In details:
•
Item B1
For purchase of shares of the following company
shares
Banca Italo-Romena spa
Banca di Bergamo spa
Banca Meridiana spa
ordinary
ordinary
ordinary
no.
Counter-value
(*)
35,277
2,396,143
3,615
9
12,365
no.
Counter-value
(*) This is the settlement of the remaining subscribed shares.
•
Item B4
Transfer profit of the following equity investments
shares
Claris Vita spa
•
Item C1
Transfer of the following equity investments
shares
Claris Vita spa
•
ordinary
ordinary
Item C3
Transfer of shares to other equity investments
shares
Claris Vita spa
ordinary
60,000,000
no.
60,000,000
no.
15,000,000
37,174
Counter-value
95,616
Counter-value
14,610
3.6.2 OTHER EQUITY INVESTMENTS
A. Opening balance
B. Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
C. Decreases
C1. Sales
C2. Write-downs
of which: other than temporary write-downs
C3. Other changes
68,855
47,849
32,205
892
0
14,752
32,645
32,225
44
44
376
D. Final stocks
E.
F.
84,059
Total revaluations
Total adjustments
0
44
•
Item B1
For purchase of shares of the following companies
shares
Veneto Sviluppo spa
Sec Servizi spa
Arca SGR spa
Alpifin in liquidation srl
Banca Credito Valtellinese scrl
Est Capital sgr
Palladio Finanziaria spa
Treviso Glocal scarl
Dutch Romanian Trading Group
Centrosim spa
ordinary
ordinary
ordinary
ordinary
rights
ordinary
ordinary
ordinary
no.
Counter-value
2,498
1,347,215
452,000
77,469
514,000
13,500
28,223,774
(*)
(**)
1,784
6
701
589
1
221
141
29.696
16
727
107
(*) settlement for loss balance
(**) accessory charges
•
Item B2
Write backs of the following equity investments
Counter-value
Banca Popolare di Milano scarl
•
892
Item B4
Transfer profit of the following equity investments and transfer
of shares from equity investments in Group companies
Counter-value
Tim spa
Claris Vita spa
•
Item C1
Transfer of the following equity investments
shares
Banca Credito Valtellinese scrl
Banca Credito Valtellinese scrl
Tim spa
Palladio Finanziaria spa
Elsag supernet spa
•
141
14,610
ordinary
rights
savings
ordinary
ordinary
no.
514,000
479,000
20,000
1,366
Counter-value
221
182
2,113
29,696
13
Item C2
Write-down of the following equity investments
Counter-value
Sintesi 2000 srl
Treviso Glocal scarl
•
28
16
Item C3
Loss on trasfer of the following equity investments
Counter-value
Euros spa Cefor & Istinform consulting
Banca Credito Valtellinese scrl
Elsag Supernet spa
Alpifin in liquidation srl
108
38
152
77
notes to the financial statements 175
Following are the most significant transactions:
SECTION 4 – TANGIBLE AND
INTANGIBLE FIXED ASSETS
BREAKDOWN OF ITEM 100 “TANGIBLE FIXED ASSETS”
31/12/2004
31/12/2003
Property
Asset under construction
Furniture and plant
Furniture and plant – asset under construction
51,540
561
28,617
2,073
24,490
32,935
12,680
3,818
TOTAL
82,791
73,923
Fixed assets under construction refer to the advance on the new premises of the
Pederobba branch. Since they are fixed assets in progress and since the relevant
works and the subsequent recording have not been completed yet, no
amortisation or depreciation was posted for such asset in FY 2004.
4.1 ANNUAL CHANGES IN TANGIBLE FIXED ASSETS
Property
Furniture
Total
Opening balance
Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
Decreases
C1. Sales
C2. Write-downs:
a) depreciations
b) other than temporary
write-downs
C3. Other changes
57,425
2,811
2,811
0
0
0
8,135
0
1,485
1,485
16,498
19,170
12,522
0
0
6,648
4,978
103
4,761
4,761
73,923
21,981
15,333
0
0
6,648
13,113
103
6,246
6,246
0
6,650
0
114
0
6,764
D.
Final stocks
52,101
30,690
82,791
E.
F.
Total revaluations
Total adjustments:
a) depreciations
b) other than temporary
write-downs
4,265
0
4,265
16,386
41,707
58,093
0
0
0
A.
B.
notes to the financial statements 176
C.
Changes are due to:
Item B1 Property - Purchase of land near the Administrative Headquarters and
additional works on the same;
Item B1 Furniture - purchase of ordinary and business operating, machines
and sundry equipment”, completion of furnishing of the
Administrative Headquarters;
Item B4 Property and Furniture - gain on asset earnings, reclassification of the
Administrative Headquarters, breakdown of work undertaken in 2003
and reallocation of share from property;
Item C1 Furniture - sale or retirement of obsolete and no long usable assets;
Item C3 Property - reclassification of the Administrative Headquarters,
breakdown of work undertaken in 2003 and reallocation of share to
furniture;
Item C3 Furniture - losses on disposal with transfer of assets and account
transfer of item under construction.
Depreciation is calculated according to the methods described in the section
“Accounting policies”, applying the following rates:
Property
Cars
Electronic machines
Alarms
Furniture
Furniture and ordinary office machine
Equipment with unit cost amounting to less than Euro 516.45
3%
25%
20%
30%
15%
12%
100%
Half rates are applied to assets put into use during the year according to the tax
regulations.
In compliance with art. 10 of Act of 19 March 1983 No. 72 the annex B lists the
property of the Company for which monetary revaluations were posted in the
past.
31/12/2004
31/12/2003
Goodwill
Software purchases
Other intangible fixed assets
16,336
1,120
2,441
17,244
1,698
3,482
TOTAL
19,897
22,424
The item “goodwill” refers to the price paid for the purchase of the ex-Capitalia
branches, has been amortised over 20 years taking into account the assumptions
on the growth of the business and the gradual profitability of the acquired
company.
4.2 CHANGES DURING THE YEAR IN INTANGIBLE FIXED
ASSETS
A.
B.
C.
Opening balance
Increases
B1. Purchases
B2. Write-backs
B3. Revaluations
B4. Other changes
Decreases
C1. Sales
C2. Write-downs:
a) amortisation
b) other than temporary write-downs
C3. Other changes
D.
Final stocks
E.
F.
Total revaluations
Total adjustments:
a) amortisations
b) other than temporary write-downs
22,424
1,204
1,204
0
0
0
3,731
0
3,476
3,476
0
255
19,897
0
9,980
9,980
0
notes to the financial statements 177
BREAKDOWN OF ITEM 90 “INTANGIBLE FIXED ASSETS”
SECTION 5 - OTHER ASSET ITEMS
5.1 BREAKDOWN OF ITEM 130 “OTHER ASSETS”
Advances on suppliers’ invoices
Portfolio operations to be settled
Interests and commissions receivable
Securities transactions
Foreign operations to be settled
Entries to be settled by “proxy” procedure
Current account cheques under negotiation
Loans due from the Treasury
Deferred tax assets
Off-balance sheet operations
Premiums for options and similar instruments
Outstanding and protested bills and cheques
Other assets
TOTAL
31/12/2004
31/12/2003
53
10,464
3,904
1,121
4,707
32,219
19,434
28,881
4,581
688
1,701
41
30,418
17
2,874
7,267
1,489
9,160
16,848
21,237
31,875
4,555
1,589
1,361
48
21,894
138,212
120,214
31/12/2004
31/12/2003
7,744
262
187
8,819
4,911
3,315
655
2,124
43
171
650
0
18,944
334
175
2,885
5,131
0
333
544
307
171
247
2,804
28,881
31,875
notes to the financial statements 178
The item “loans due from the Treasury”includes:
Tax credit of previous FYs
Tax advance on severance indemnity
Revaluation of tax advance for severance indemnity
Irpeg/Irap advance payments
Advance payment of tax witholding
Stamp duties advance payments
Paid witholding tax
Advance substitute tax on medium-to-long term transactions
VAT advance payment
VAT on tax collector’s fee to be recovered
Other tax credits
Tax credits on dividend
TOTAL
5.2 BREAKDOWN OF ITEM 140 “PREPAYMENTS AND
ACCRUED INCOME”
31/12/2004
31/12/2003
Accrued income from
- Interest receivable on securities
- Interest receivable on REPOS
- Spreads on off-balance sheet operations
- Interest on loans to customers
- Interest on loans with banks
11,965
418
13,202
5,906
849
9,138
423
12,146
7,861
485
Total accrued income
32,340
30,052
Prepayments of
- Insurance premiums
- Other prepayments
156
3,158
142
3,663
Total prepayments
3,314
3,805
35,654
33,857
TOTAL PREPAYMENTS AND ACCRUED INCOME
Prepayments and accrued income are calculated in accordance with the accrual
principle.
5.3 ADJUSTMENTS FOR PREPAYMENTS AND ACCRUED
INCOME
The Company did not take advantage of the option to directly adjust, by either
increasing or decreasing, the asset and liability accounts to which prepayments and
accrued income refer.
5.4 DISTRIBUTION OF SUBORDINATED ASSETS
31/12/2004
31/12/2003
0
0
0
0
0
0
a) loans to banks
b) loans to customers
c) bonds and other debt securities
SECTION 6 - DEBTS
BREAKDOWN OF ITEM 10 “DUE TO BANKS”
31/12/2004
On demand
• Current accounts
• Demand deposits
On maturity or with notice
• Term deposits
• Loans
• Carry-over and REPOS
• Gold subsidies
31/12/2003
354,349
294,676
59,673
345,818
332,985
12,833
140,888
75,400
1,130
36,493
27,865
TOTAL
338,386
279,988
1,769
27,262
29,367
495,237
684,204
31/12/2004
31/12/2003
36,493
0
27,262
0
a) REPOS
b) loan of securities
BREAKDOWN OF ITEM 20 “DUE TO CUSTOMERS”
31/12/2004
On demand
• savings deposits
• current accounts
On maturity or with notice
• term savings deposits
• term current accounts
• carry-over and REPOS
• other agreements
31/12/2003
1,861,050
133,617
1,727,433
1,541,166
127,528
1,413,637
263,665
1,663
140,847
121,150
5
TOTAL
187,652
2,143
56,787
128,717
5
2,124,715
1,728,818
6.2 DETAILS OF ITEM “DUE TO CUSTOMERS”
a) REPOS
b) loan of securities
31/12/2004
31/12/2003
121,150
0
128,717
0
BREAKDOWN OF ITEM 30 “SECURITIES ISSUED”
Bonds
Certificates of deposit
• short term
• medium/long term
• matured
Other securities
TOTAL
31/12/2004
31/12/2003
1,746,755
170,688
1,544,422
106,770
167,428
1,574
1,686
105,160
1,610
0
0
40,000
1,917,443
1,691,191
notes to the financial statements 179
6.1 DETAILS OF ITEM “DUE TO BANKS”
BREAKDOWN OF ITEM 40 “DEPOSITS IN ADMINISTRATION”
31/12/2004
31/12/2003
4,744
2,152
31/12/2004
31/12/2003
The Treasury
Veneto Sviluppo spa
21
4,723
43
2,109
TOTAL
4,744
2,152
Deposits in administration
Funds received from:
The net change during the financial year is due to:
• Increase due to the management activity amounting to 3,270 thousand Euro.
• Decrease due to return of fund received of 678 thousand Euro.
The management activity resulted in the issuance of facilitated agriculture loans
to customers as per Act 88/1980 and the application of several regional laws using
funds received from Veneto Sviluppo spa.
SECTION 7 - PROVISIONS
notes to the financial statements 180
CHANGES IN ITEM 70 “EMPLOYEES’ SEVERANCE FUND”
OCCURRED IN THE FINANCIAL YEAR
A. Opening balance
B. Increases
B1. Accruals
B2. Other changes
C. Decreases
C1. Utilizations
C2. Other changes
16,993
2,473
2,473
0
680
295
435
D. Final stocks
18,736
In the loans to the Treasury the tax advance for severance payment accrued as at
31 December 1996-1997 is entered according to the Law. Such advance payment
amounts to 445.7 thousand of Euro, and, in accordance with art. 3 par. 213 of Act
662/96 it was revaluated according to the criteria in the 4th par. of art. 2120 of the
Italian Civil Code. The sum of 12.2 thousand of Euro, the result of the revaluation,
was entered in the profit and loss account.
7.1 BREAKDOWN OF ITEM 90 “CREDIT RISK RESERVES”
31/12/2004
31/12/2003
Interest on delayed payment
0
1,538
TOTAL
0
1,538
7.2 CHANGES IN “CREDIT RISK RESERVES” OCCURRED IN
THE FINANCIAL YEAR
A.
B.
C.
D.
Opening balance
Increases
B1. Provisions
B2. Other changes
Decreases
C1. Utilization
C2. Other changes
1,538
0
0
0
1,538
6
1,532
Final stocks
0
BREAKDOWN OF ITEM 80 “PROVISIONS FOR RISKS AND
CHARGES”
31/12/2004
31/12/2003
a) Pensions and similar provisions
b) Provision for taxation
c) Provisions for risks and charges: other provisions
0
17,294
13,237
0
21,189
11,107
TOTAL
30,531
32,297
31/12/2004
31/12/2003
Provision for current direct taxes
Indirect taxes and dues
16,004
1,290
19,873
1,316
TOTAL
17,294
21,189
CHANGE IN ITEM 80 B) “PROVISIONS FOR RISKS AND
CHARGES: PROVISION FOR TAXATION” OCCURRED IN
THE FINANCIAL YEAR
A.
B.
C.
D.
Opening balance
Increases
B1. Provisions
B2. Other changes
Decreases
C1. Utilizations
C2. Other changes
Final stocks
21,189
16,106
16,106
0
20,001
20,001
0
17,294
PROVISIONS FOR TAXATION (ITEM 80 B)
The current share of the provision includes the payables for Ires/Irap taxes of the
financial year.
The advance payments deposited into the Treasury for the Ires and Irap taxes are
indicated as “other assets”(item 130).
As for the tax situation, all financial years until 1995 are concluded.
As for the inspection of the tax inspectors in 2002, for the part relating to the
verification of the facilitated provisions in the balance sheet regarding the former
Banca di Credito Cooperativo del Piave e del Livenza (“Basevi”Act for FY 1996),
the provincial tax commissioner of Treviso, passing sentence on 9 February 2004
which was filed on 8 March 2004, accepted the Bank’s appeal.
On 27 December 2004 the Agenzia delle Entrate di Treviso (Inland Revenue of
Treviso) gave notification of its assessment for the years 1997/1998 regarding
provisions in the financial statements relating to the former Banca di Credito
Cooperativo del Piave e del Livenza. Being in disagreement with the assessment,
the Bank filed an appeal with the Tax Commissioner on 17 February 2005.
On 30 December 2004, the Corte dei Conti, public prosecutor for the region of
Lazio, invited several credit institutions, including the former Banca di Credito
Cooperativo del Piave e del Livenza, to deduct, in accordance with article 5 of
notes to the financial statements 181
BREAKDOWN OF ITEM 80 B) “PROVISIONS FOR TAXATION”
Legislative Decree n. 453 of 15 November 1993, which became Law no. 19 on 14
January 1994, for alleged damage caused to the Ministero delle Finanze in terms
of loss of tax receipts. The decisions were filed on 4 February 2005.
Appeal was also made under article 38 of D.P.R. no. 602 on 29 September 1973,
regarding the regional tax on production activities (Irap), for the majority of the
amount relating to banking/insurance activities for the tax years from 2000 to
2003.
The Bank appealed under the same article cited above concerning the
compatibility of the tax (Irap) with article 33 of Directive no. 77/388/CEE, for the
tax years from 2000 to 2003 and for prepaid amounts relating to 2004.
notes to the financial statements 182
7.3 BREAKDOWN OF ITEM 80 C) “PROVISIONS FOR RISKS
AND CHARGES: OTHER PROVISIONS”
31/12/2004
31/12/2003
Provision for risks and charges capital losses
on credit derivatives
Other provisions
0
13,237
317
10,790
TOTAL
13,237
11,107
The line “other provisions” is comprised of provisions of Euro 9,885 million for
potential repeals and disputes, including the ones resulting from the merger of
the former BCC del “Piave e Livenza”, of prudent provision of Euro 945 thousand
on derivative transactions with clients, of Euro 1.082 million for renewal of the
collective national labour contract, of Euro 1 million for guarantees given, of Euro
325 thousand for other matters including country risk on Brazilian securities.
CHANGE IN ITEM 80 C) “PROVISIONS FOR RISKS AND
CHARGES: OTHER PROVISIONS”
A.
B.
C.
D.
Opening balance
Increases
B1. Provisions
B2. Other changes
Decreases
C1. Utilizations
C2. Other changes
11,107
2,723
2,723
0
593
593
0
Final stocks
13,237
Balance as at
31/12/2003
(Util.)
Provisions
Balance as at
31/12/2004
c) Other provisions:
2 - provisions for risks and charges
3 - capital losses on credit derivatives
10,790
317
276
317
2,723
0
13,237
0
TOTAL OTHER PROVISIONS
11,107
593
2,723
13,237
7.4 “DEFERRED TAX ASSETS”
1.
2.
3.
4.
Initial amount
Increases
2.1 Deferred tax asset arising in the year
2.2 Other increases
Decreases
3.1 Deferred tax asset cancelled in the year
3.2 Other decreases
Final amount
4,938
937
937
0
470
470
0
5,405
7.5 “DEFERRED TAXES”
1.
2.
3.
4.
Initial amount
Increases
2.1 Deferred taxes arising in the year
2.2 Other increases
Decreases
3.1 Deferred taxes cancelled in the year
3.2 Other decreases
Final amount
383
570
570
0
130
130
0
824
The entries which genereted the deferred tax assets and liabilities set out above
refer to:
Deferred tax assets
Write-downs of loans to customers
Entertaining expenses
Provisions for risks and charges
Charges for contract renewal
Write-downs
201
87
4,305
357
455
TOTAL DEFERRED TAX ASSETS
5,405
Deferred tax liabilities
Gains on tangible asset disposal taxable in 5 years
Reversal of tax-driven adjustment
Interests on delayed payments
254
438
132
TOTAL DEFERRED TAX LIABILITIES
824
4,581
1. Deferred tax assets and liabilities related to events or transactions in
the profit & loss account
To determine the amounts to be recognised in the financial statements deductible
and taxable temporary differences were identified; their identification had effects
on the profit and loss accounts of the financial years when the entries that
originated them were recorded, in terms of increasing on reducing the amount of
taxes that were paid.
All deductible and taxable temporary differences were classified as time-defined
reversal differences, i.e. those differences where it was possible to identify the
period of reversal with certainty, in accordance with “Testo unico delle imposte
sui redditi (Tuir)”.
The differences reported originated from the provisions for risks and charges, for
write-downs on credits which exceeded fiscal limits (to be recovered with seven
years), entertaining expenses (to be recovered with five years), the capital gains
(to be taxed with five years), interest on delayed payments for non-performing
loans, and extraordinary income following the elimination of previous differences
in tax treatment.
In accordance with the principle of “reasonable certainty” that sufficient future
taxable income will be realised to allow the Company to effectively recover the
tax benefits, net temporary differences (deductible minus taxable ones) for each
financial year were compared to the taxable profits estimated for the years of the
business plan.
When the financial statements were prepared deferred tax liability, their balances
being lower, were offset against deferred tax assets. The procedure was carried
out taking into account what is provided for by the Banca d’Italia, which allows
it only when the deferred tax assets and liabilities refer to the same tax and expire
in the same period of time.
notes to the financial statements 183
TOTAL LOSS ANTICIPATED/DEFERRED TAXES
2. Deferred tax assets and liabilities related to shareholders’ equity
No deferred tax assets or liabilities have been credited or debited on items of
shareholders’equities. Therefore, the related tables are not presented; as a
consequence, they are not calculated in the relevant tables.
Amounts and variations in the financial year concerning the deferred tax
assets and liabilities related to shareholders’ equity not included in the
sub-item 80 b) “provisions for taxation”
No deferred tax liabilities have been recognised.
notes to the financial statements 184
Amounts and changes of the temporary taxable differences to which do not
meet the requirements for recognition of deferred tax liabilities
Temporary taxable differences which do not meet the requirements for
recognition of deferred tax liabilities, since they refer to matters in items whose
taxation is considered as unlikely, are the following:
• tax free revaluation reserves as per Act 576/75 amounting to 328 thousand Euro;
• tax free revaluation reserves as per Act 72/83 amounting to 3.226 million Euro;
• tax free revaluation reserves as per Act 413/91 amounting to 2.001 million Euro.
As for the mentioned reserves, the Bank did not provided for any deferred tax
liabilities since the utilisation of the aforementioned reserves is considered as
unlikely.
SECTION 8 - SHARECAPITAL, EQUITY
RESERVES, RESERVE FOR GENERAL
BANKING RISK AND SUBORDINATED
LIABILITIES
BREAKDOWN OF THE SHAREHOLDERS’ EQUITY AND
SUBORDINATED LIABILITIES
Item
Description
item 100
item 110
item 120
item 130
item 140
Reserve for general banking risk
Subordinated liabilities
Share capital
Issue premiums
Reserves
a) legal reserve
b) reserve for own equity shares
or quotas
c) statutory reserves
d) other reserves
Revaluation reserves
Profit for the year
item 150
item 170
TOTAL SHAREHOLDERS’ EQUITY
31/12/2004
31/12/2003
39,057
181,814
98,646
304,765
133,871
6,057
82,065
95,068
280,983
110,540
33,012
29,004
0
0
100,859
0
0
81,536
5,554
45,658
5,554
40,077
809,365
620,344
The movements of the items making up the shareholders’ equity are detailed in
Annex A.
BREAKDOWN OF ITEM 100 “RESERVE FOR GENERAL
BANKING RISK”
Reserve for general banking risk
31/12/2004
31/12/2003
39,057
6,057
BREAKDOWN OF ITEM 110 “SUBORDINATED LIABILITIES”
Subordinated liabilities
31/12/2004
31/12/2003
181,814
82,065
The item consists of the following bonded loans:
In FYs 2003 and 2004 the conversion of two thirds of the loan has been
anticipated; at the end of the period the value is Euro 37,010,954.05 expiring in
April 2007. The Extraordinary Shareholders’ Meeting on 2 December 2004 gave
approval for early conversion of outstanding loan beginning 1 January 2005. On
the date of approval of the financial statements by the Board of Directors, the
loan was converted for Euro 36,280,684.
“Veneto Banca convertible subordinated 2001-2007 2%”
• Issued on 30 April 2001 in 249,999 bonds with a nominal per-capita value of
Euro 186.00 for a total nominal value of Euro 46,499,814.00;
• Annual gross interest rate postponed for 2% of the nominal value;
• Expiration date 1 May 2007;
• No acceleration clauses are in place;
• Subordination clauses: in case of dissolution o liquidation of the Bank, the
bonds shall be reimbursed only after the other creditors who are not
subordinated are reimbursed;
• Every bond shall be converted into 10 Veneto Banca common shares. The
conversion can be carried out:
- in the interval between 1/1 and 28/2 2005 (one third);
- in the interval between 1/1 and 28/2 2006, (one third);
- in the interval between 1/1 and 28/2 2007, (last third).
In FYs 2003 and 2004 the conversion of two thirds of the loan has been
anticipated; at the end of the period the value is Euro 16,338,426.00 expiring on
May 2007.
The Extraordinary Shareholders’ Meeting on 2 December 2004 gave approval for
early conversion of outstanding loan beginning 1 January 2005. On the date of
approval of the financial statements by the Board of Directors, the loan was
converted for Euro 16,028,736.
notes to the financial statements 185
“Veneto Banca convertible subordinated 2000-2007 1.5%”
• Issued on 31 March 2000 in 600,000 bonds with a per-capita nominal value of
Euro 180.76 for a nominal total amount of Euro 108,455,948.81;
• Annual before tax interest rate postponed for 1.5% on the nominal value;
• Maturity: 1 April 2007;
• No acceleration clauses are in place;
• Subordination clauses; in case of dissolution or liquidation of the Bank, the
bonds shall be reimbursed only after the other creditors who are not
subordinated are reimbursed;
• Every bond shall be converted into 10 Veneto Banca common shares. The
conversion can be carried out:
- in the interval between 1/1 and 28/2 2005 (one third);
- in the interval between 1/1 and 28/2 2006, (one third);
- in the interval between 1/1 and 28/2 2007, (last third);
- or, if the bond creditor wants, all the amount at expiration of the loan.
notes to the financial statements 186
“Veneto Banca subordinated 2003/2013 Step Up (lower Tier II)”
• Issued on 30 December 2003 in 28,272 bonds for a nominal per-capita value of
Euro 1,000.00 for a total nominal value of Euro 28,272,000.00;
• Rate indexed according to the Euribor 6-month rating (basis 365) recorded on
the second working day (Target calendar) before the date of payment of the
coupon, increased:
- by 50 basis points for the first five years, until 30 December 2008;
- by 100 basis points for the following five years, until 30th December 2013.
The first coupon payable on 30 June 2004 is calculated according to the
equivalent rate of 2.733% (1st semester 1.367%). As for the following coupons,
if the day of rating of the coupon the Euribor 6-month rate (basis 365) is not
rated, the rate of the first previous working day shall be used (Target calendar)
in which such rate was officially recorded.
Every coupon will be calculated with a rate according to the following formula:
- Coupon = Euro 1,000 * (Euribor 6m basis 365 + %increase)/2, rounding up
to the closest 0.001%. Moreover, the amount of the first coupon, referring to
the minimum price of Euro 1,000.00, will be Euro 13.67 before taxes;
• Expiration date: 30th December 2013;
• Advance reimbursement shall be possible after at least eighteen months from
the issuance date and with the previous authorization of Banca d’Italia, in
accordance with the present regulation at the moment of the transaction;
• Subordination clauses: in case of dissolution, liquidation or administrative
forced liquidation of the Bank, the bonds shall be reimbursed only after all
other creditors who are not subordinated, have been reimbursed.
"Veneto Banca subordinated 2004/2014 Step Up – Floating rate notes on the
Euromarket (lower tier II)"
• issued on 12 November 2004. 100,000 notes with nominal value of Euro
1,000.00 each, for a total nominal value of Euro 100,000,000.00;
• the coupons bear gross interest payable, with delayed payment, at the Euribor
3 month rate (base 360) set on the second working day (Target calendar) prior
to the date of payment, increased:
- by 60 basis points for the first five years, until 12 November 2009;
- by 120 basis points for the successive five years, until 12 November 2014.
The first coupon payment on 12 February 2005 was calculated on the basis of a
2.14% annual rate. For successive payments, whenever the Euribor 3 month
(base 360) rate is not listed on the official calculation date, the rate of the first
bank working day immediately following that date (Target calendar) shall be
used.
Each coupon shall be calculated at a rate based upon the following formula:
- Coupon = (Euribor 3 m. + 60 b.p.) * GG/360 * 1,000, rounded to the nearest
Euro cent. Therefore, the amount of the first coupon, based on the minimum
holding of Euro 1,000.00, was Euro 7.24 gross of applicable taxes;
• maturity date: 12 November 2014;
• early redemption is permitted after at least five years have passed from the date
of issue and subject to prior approval of Banca d’Italia, where permitted under
the laws in effect at that time;
• subordination clauses: state that, in the event of dissolution, liquidation, or
forced liquidation under administration of the Bank, the bonds will be repaid
only after all other creditors not having an equal subordination have been
satisfied.
BREAKDOWN OF ITEM 120 “SHARE CAPITAL”
Ordinary shares no. 32,882,038 (*)
with a per-capita value of Euro 3,00 (**)
31/12/2004
31/12/2003
98,646
95,068
(*) distributed among no. 16,041 Shareholders
(**) during the financial year, transactions for 295.988 shares have been carried out.
BREAKDOWN OF ITEM 130 “ISSUE PREMIUMS”
Issue premiums
31/12/2004
31/12/2003
304,765
280,983
BREAKDOWN OF ITEM 140 “RESERVES”
a) legal reserve
b) reserve for own equity shares or quotas
c) statutory reserves
d) other reserves:
- taxed reserves for various risks
TOTAL
31/12/2004
31/12/2003
33,012
0
0
100,859
29,004
0
0
81,536
100,859
81,536
133,871
110,540
Extraordinary reserve
Taxed reserve
Taxed reserve art. 4 Law No. 823/73
Capital gain reserve from
facilitated allotment Law 218/90
Reserve for share buyback
Special reserve Legislative Decree No. 153/99
TOTAL
31/12/2004
31/12/2003
93,169
3
100
73,847
3
100
1,796
4,132
1,659
1,796
4,132
1,659
100,859
81,536
BREAKDOWN OF ITEM 150 “REVALUATION RESERVES”
31/12/2004
31/12/2003
Revaluation as per Act No. 576/75
Revaluation as per Act No. 72/83
Revaluation as per Act No. 413/91
328
3,226
2,001
328
3,226
2,001
TOTAL
5,554
5,554
BREAKDOWN OF ITEM 170 “PROFIT FOR THE YEAR”
Profit for the year
31/12/2004
31/12/2003
45,658
40,077
COMPOSITION OF ASSET ITEMS CONCERNING THE SHARE
CAPITAL
Item
Description
item 110
item 120
Unpaid subscribed share capital
Own equity shares or quotas
31/12/2004
31/12/2003
0
0
0
0
The Bank does not have in its portfolio any shares of property and all transactions
involving the share capital have been regulated.
notes to the financial statements 187
BREAKDOWN OF “OTHER RESERVES”
8.1 CAPITAL AND MINIMUM REQUIREMENTS FOR
SUPERVISORY PURPOSES
31/12/2004
A.
B.
C.
Capital for supervisory purposes
A.1 Tier I capital
A.2 Tier II capital
A.3 Items to be deducted
A.4 Capital for supervisory purposes
Minimum requirements for supervisory purposes
B.1 Credit risks
B.2 Market risks
of which - Risks of trading portfolio
- Exchange rate risks
B.3 Third-level subordinated loans
B.4 Other minimum requirements for
supervisory purposes
B.5 Total requirements for supervisory purposes
Risk-weighted assets and adequacy ratios
C.1 Weighted risk assets
C.2 Tier I capital/weighted risk assets
C.3 Capital for supervisory purposes/weighted
risk assets
582,988
183,414
29,696
736,706
357,009
18,074
18,074
0
0
5,695
380,778
5,445,125
10.71%
13.53%
notes to the financial statements 188
Asset ratios
The capital for supervisory purposes/weighted risk asset ratio expresses the
individual solvency ratio the banks and banking groups have to comply with.
As it is indicated in the statement above, Veneto Banca respects the percentage
parameters established by the Supervisory Authority, and reported an asset
surplus amounting to about 356 million Euro (A.4-B.5).
SECTION 9 - OTHER LIABILITY ITEMS
9.1 BREAKDOWN OF ITEM 50 “OTHER LIABILITIES”
Various securities transactions
Interest and fees to be credited to customers
Provisions for staff expenses
Currency spreads on portfolio activities
Due to suppliers
Due to Treasury
Amounts available to customers
Foreign operations to be settled
Creditors for premiums on sold call options
Creditors for payment and collection services
Off-balance sheet operations
Credit contra-entries for evaluation of
off-balance sheet operations
Portfolio operations to be settled
Other liabilities
TOTAL
31/12/2004
31/12/2003
2,355
0
3,242
28,562
5,792
10,207
21,666
1,601
1,803
268
2
2,328
1
2,447
33,786
10,045
7,568
18,887
9,077
1,447
156
40
8,644
7,903
24,570
0
7,418
17,252
116,615
110,452
Payables to the inland Revenue relate to tax withheld by the Bank acting as
withholding agent, to be paid in according to the procedures and within the dates
set forth by the Law.
9.2 BREAKDOWN OF ITEM 60 “ACCRUALS AND DEFERRED
INCOME”
31/12/2004
31/12/2003
Accrued expenses for
- Interest on REPOS
- Spreads on off-balance sheet operations
- Interest on loans to customers
- Interest on credits with banks
- Other
472
5,550
223
246
189
319
5,960
84
1,138
90
Total accrued expenses
6,680
7,592
Deferred income on
- Interest on discount operations
- Interest on loans to customers
- Interest on credits with banks
921
1,367
621
1,485
826
1,008
Total deferred income
2,909
3,319
TOTAL ACCRUALS AND DEFERRED INCOME
9,589
10,911
Prepayments and accrued income are calculated according to the economic
accrual principles.
9.3 ADJUSTMENTS FOR ACCRUALS AND DEFERRED
INCOME
a) Liability items:
1. accruals for interest payable:
- on bonds
- on certificates of deposit
b) Asset items
31/12/2004
31/12/2003
11,175
12,002
10,348
827
TOTAL
11,533
469
0
0
11,175
12,002
SECTION 10 – GUARANTEES AND
COMMITMENTS
10.1 BREAKDOWN OF ITEM 10 “GUARANTEES PROVIDED”
31/12/2004
a) Commercial guarantees
- documentary credits
- commericial acceptances
- commercial endorsements and sureties
b) Financial guarantees
- financial endorsements and sureties
c) Pledged assets
TOTAL
31/12/2003
176,524
13,649
5,230
157,645
175,636
12,059
3,041
160,536
315,924
315,924
347,294
347,294
0
0
492,448
522,930
Commercial guarantees support specific commercial transactions, while financial
guarantess are linked to the regular payments of debt by the applicant.
notes to the financial statements 189
Write-downs for accruals and deferred income are made directly in the
pertaining shareholders’ equities.
10.2 BREAKDOWN OF ITEM 20 “COMMITMENTS” AND
ITEM 30 “COMMITMENTS ON CREDIT DERIVATIVES”
31/12/2004
a) Commitments certain to be called on
- loans and financing
- stock purchase
- other commitments
b) Commitments uncertain to be called on
- margin on line of credits
- commitments on issued put options
- other commitments
31/12/2003
47,398
11,133
21,265
15,000
21,463
6,315
7,648
7,500
10,208
6,633
0
3,575
50,005
6,631
40,000
3,374
TOTAL
57,606
71,468
The risk linked to the guarantees issued and the commitments to distribute
provisions is evaluated in the same fashion for the cash due. At present, losses
resulting from such commitments are not expected.
10.3 PLEDGED ASSETS OF OWN DEBITS
a) Mortgages
b) Pledges
- cash deposits
- securities
- other values
31/12/2004
31/12/2003
0
50,000
0
50,000
0
50,000
0
TOTAL
0
50,000
0
50,000
50,000
notes to the financial statements 190
10.4 UNUSED LINES OF CREDIT
31/12/2004
31/12/2003
0
0
0
0
hedging
transactions
trading
transactions
other
transactions
0
0
0
0
0
0
0
0
0
0
0
726,409
23,695
23,695
0
23,695
0
0
0
0
0
0
0
702,714
8,000
0
8,000
0
694,714
562,350
132,364
483,134
32,715
21,265
11,450
450,419
81,700
200,241
168,478
18,903
11,133
7,770
6,057,087
624,177
111,300
0
111,300
512,877
26,681
110,000
376,196
0
0
0
5,432,910
8,449
0
0
8,449
5,424,461
2,931,965
2,492,496
0
0
0
0
0
0
0
0
0
0
0
95,132
0
0
0
0
0
0
0
0
0
0
0
95,132
8,000
0
8,000
0
87,132
87,132
0
a) central banks
b) other banks
10.5 FORWARD TRANSACTIONS
Transaction
categories
1.
1.1
1.2
2.
3.
3.1
3.2
Trading
Securities
- purchases
- sales
Currencies
- currency against currency
- purchases against Euros
- sales against Euros
Deposits and loans
- to provide
- to receive
Derivative contracts
With capital swaps
a) securities
- purchases
- sales
b) currencies
- currency against currency
- purchases against Euros
- sales against Euros
c) other stocks
- purchases
- sales
Without capital swaps
a) currencies
- currency against currency
- purchases against Euros
- sales against Euros
b) other stocks
- purchases
- sales
hedging
transactions
trading
transactions
other
transactions
23,695
111,300
0
0
0
0
0
0
17,871
8,810
107,219
50,615
328,362
0
0
0
0
0
hedging
transactions
trading
transactions
other
transactions
• Purchase
Options on currency purchases
against Euros
Basis swap
Interest rate swap
Asset swap
Interest rate floors
Cross currency swap
Interest rate cap
Options on interest rates and indexes
8,000
0
457,218
0
0
0
1,549
85,583
0
948,860
1,136,238
20,000
55,453
193,473
28,833
549,108
8,000
0
0
0
0
0
1,549
85,583
• Sale
Basis swap
Interest rate swap
Asset swap
Interest rate floors
Cross currency swap
Interest rate cap
Options on interest rates and indexes
0
32,364
100,000
0
0
0
0
948,860
643,293
20,000
55,453
238,959
28,724
557,208
0
0
0
0
0
0
0
Transaction categories
With capital swaps
• Options on securities
Sale
Forward transactions
currency against currency
Options purchased against Euro
Purchase forward contract on currencies
Purchase forward contract on currencies
Sale forward contract on currencies
Without capital swaps
The value assigned to the forward transactions indicated in the table is the
following:
• For the trading of securities and currencies and for derivative contracts which
could lead to an exchange in capitals (or other assets), the price of the contract
itself according to the regulation. The derivative contracts negotiated in
regulated markets with a daily payment of the spread of change (e.g. futures
and options) are conventionally indicated with the nominal value calculated by
multiplying the quantity by the specific ratio for a type of product and its strike
or the contract strike price.
• For deposit and loan contracts, the amount to pay and receive.
• For derivative contracts which do not require forward exchange of capitals (e.g.
contracts on interest rates or indexes), the nominal value of the reference
capital.
Iterest rate derivative contracts are classified as “purchases”or “sales “depending
upon whether the Bank purchases or sells the fixed rate.
In the column “other transactions” there are the options included in the
structured stocks issued by the Bank.
In the section 3.2 “derivative contracts without capital exchange”the basis swaps
are included (contracts providing for the exchange of two indexed rates)
amounting to a nominal value of Euro 948,860,000.00 related to the transaction.
Such amount is included both in the purchases and the sales.
The evaluation of the derivative contracts valid as at 31 December 2004, except
for the trading and investmet asset swaps already reported in Section 2,
respectively on points 2.1 and 2.3, resulted in an increase in value of Euro
7,362,076.60 not recorded in the profit and loss account in accordance with the
principle of prudence and certainty.
notes to the financial statements 191
Derivative contracts refer to the following items:
10.6 CREDIT DERIVATIVE CONTRACTS
Transaction
categories
1.
1.1
1.2
2.
2.1
2.2
Protection buyers
With capital swaps
Without capital swaps
Protection sellers
With capital swaps
Without capital swaps
Trading
transactions
Other
transactions
15,000
12,500
2,500
15,000
12,500
2,500
0
0
0
0
0
0
Credit derivative contracts are aimed at transferring the underlying credit risk
of a “reference obligation”from the “protection buyer”to the “protection seller”.
In these cases, the subject of the transaction is the credit risk borne by a
“reference entity”.
The evaluation of the credit derivative contracts valid as at 31 December 2004,
shows a neutral result.
SECTION 11 - GEOGRAPHIC
DISTRIBUTION AND CONCENTRATION OF
ASSETS AND LIABILITIES
notes to the financial statements 192
11.1 SIGNIFICANT EXPOSURES
As at 31 December 2004 there are not “significant exposures” according to
supervisory regulations:
a) amount
b) number
31/12/2004
31/12/2003
0
0
94.789
1
The Supervisory Authority defines a loan granted to a “customer”and weighted
according to specific rules as a “significant exposure”when it is equal to or higher
than 10% of the capital for supervisory purposes held by the bank providing the
loan.
“Customer”means an individual or a “group of connected customers”, meaning
two or more subjects that constitute a single unit in terms of risk, since:
a) one of them has a power of control over the other or others
(“legal”connection);
or:
b) regardless of the existence of control agreements, there are such links
between the subjects that, in all probability, if one of them were in financial
difficulties, the other or all the others would encounter difficulties in repaying
the debt (“financial”connection).
11.2 DISTRIBUTION OF LOANS TO CUSTOMERS ACCORDING
TO THE MAIN CATEGORIES OF BORROWERS
31/12/2004
%
31/12/2003
%
a) Governments
b) other public institutions
c) non-financial institutions
d) financial institutions
e) producer households
f) other operators
163
32,464
2,474,470
510,739
170,862
925,856
0.00
0.79
60.14
12.41
4.15
22.50
184
40,275
2,188,920
441,028
146,023
734,455
0.01
1.13
61.64
12.42
4.11
20.68
TOTAL
4,114,554
100.00
3.550.884
100.00
11.3 DISTRIBUTION OF LOANS TO NON-FINANCIAL
COMPANIES AND RESIDENT PRODUCER HOUSEHOLDS
a) other services for sale
b) trade services, recoveries
and reparations
c) housing and public works
d) textiles, leather and footwear
products, clothing
e) other industrial products
f) other branches
TOTAL
31/12/2004
%
31/12/2003
%
677,156
25.78
590,898
25.44
332,413
308,336
12.66
11.74
277,840
261,768
11.96
11.27
241,780
241,419
825,279
9.21
9.19
31.42
254,755
215,415
721,637
10.97
9.28
31.07
2,626,383
100.00
2,322,313
100.00
31/12/2004
%
31/12/2003
%
a) Governments
b) other public institutions
c) banks
d) non-financial instutions
e) financial institutions
f) producer households
g) other operators
0
1,037
47,070
171,447
236,220
4,240
32,434
0.00
0.21
9.56
34.82
47.97
0.86
6.59
0
326
35,000
180,126
278,916
4,223
24,339
0.00
0.06
6.69
34.45
53.34
0.81
4.65
TOTAL
492,448
100.00
522,930
100.00
11.5 GEOGRAPHIC DISTRIBUTION OF ASSETS AND
LIABILITIES
Items/Countries
Italy
Other EU
countries
Other
countries
Total
1.
1.1
1.2
1.3
Assets
Loans to banks
Loans to customers
Securities
4,266,149
250,045
3,929,816
86,288
415,069
3,472
176,190
235,407
134,054 4,815,272
113,398
366,915
8,548 4,114,554
12,108
333,803
2.
2.1
2.2
2.3
2.4
Liabilities
Due to banks
Due to customers
Securities issued
Other accounts
4,512,852
451,336
2,072,695
1,802,263
186,558
6,455
881
5,499
75
0
204,646 4,723,953
43,020
495,237
46,521 2,124,715
115,105 1,917,443
0
186,558
3.
Guarantees and commitments
506,552
41,470
2,032
550,054
notes to the financial statements 193
11.4 DISTRIBUTION OF GUARANTEES PROVIDED ACCORDING
TO THE MAIN CATEGORIES OF COUNTERPARTIES
11.6 TEMPORAL DISTRIBUTION OF ASSETS AND LIABILITIES
Items/Residual maturities
1.
Assets
1.1 Treasury bonds
that can be refinanced
1.2 Loans to banks
1.3 Loans to customers
1.4 Bonds and other
debt securities
1.5 Off-balance sheet
operations
2.
Liabilities
2.1 Due to banks
2.2 Due to customers
2.3 Securities issued:
- bonds
- certificates of deposit
- other securities
2.4 Subordinated liabilities
2.5 Off-balance sheet
operations
duration set
1/5 years
fixed
floating
rate
rate
undetermined
maturity
total
742,075
125,481
8,882,782
3
0
14,717
0
0
694,754
0
34,859
90,622
2,149
366,915
4,114,554
34,715
63,340
245
0
325,883
1,118,324
128,344
679,319
47,076
0
4,073,281
1,113,593
1,181,052
1,456,490
306,509
268,915
4,400
8,792,490
97,855
241,467
91,943
41,744
50,199
0
0
19,800
22,344
428,693
310,641
118,052
0
0
0
2
180,241
179,490
751
0
53,349
0
0
1,130,284
1,130,284
0
0
379
0
0
57,958
57,958
0
0
128,086
0
0
26,638
26,638
0
0
0
4,400
0
0
0
0
0
0
495,237
2,124,715
1,917,443
1,746,755
170,688
0
181,814
1,769,555
642,756
947,460
325,827
120,465
242,277
0
4,073,281
on demand
3/12
months
1,008,007
3,008,748
838,203
1,422,038
980,851
757,379
2
49,999
954,274
0
169,523
1,242,146
0
15,446
321,038
0
0
78,443
2,144
97088
718,560
0
626
1,686
225,271
3,732
1,596,453
500,033
2,260,711
2,200,820
373,182
1,860,902
1,686
0
1,686
0
0
24,941
notes to the financial statements 194
11.7 ASSETS AND LIABILITIES IN FOREIGN CURRENCY
a) Assets
1.
2.
3.
4.
5.
loans to banks
loans to customers
securities
equity investments
other accounts
due to banks
due to customers
securities issued
other accounts
31/12/2004
31/12/2003
480,348
461,152
130,778
345,328
2,937
892
413
b) Liabilities
1.
2.
3.
4.
over 5 years
fixed floating
rate
rate
up to
3 months
78,407
378,907
3,167
166
504
239,077
100,169
138,908
0
0
220,747
140,997
79,749
0
0
11.8 SECURITISATION ACTIVITIES
Own securitisation activities
Securitisation in July 2002
During the course of financial year 2002 Veneto Banca completed the first
securitisation operation of a mortgage loan portfolio.
The securitisation operation involved the on-payment transfer, in accordance
with Law No. 130 dated 30 April 1999, of arrangements classified as performing
residential and commercial mortgage loans starting from 1 July 2002.
On this date Veneto Banca completed the transfer of loans to “Claris Finance srl”,
a special purpose vehicle incorporated in Italy according to Law No. 130/99 with
its head office in Rome, of which Veneto Banca holds a share equal to 70% of the
share capital. The remaining share was underwritten by Stiching Solari, a
foundation incorporated in Holland.
The subjects of the securitisation are mortgage loans resulting as at 25 June 2002
from the accounts of Veneto Banca, classified as performing loans, in compliance
with the regulations issued by Banca d’Italia, which have the following
characteristics:
- loans guaranteed by a first financial mortgage, by which it is meant:
-
-
-
-
Furthermore, credits arising from loans resulting from the accounts of Veneto
Banca as at 30 June 2002, which present one or more of the following
characteristics, were excluded from the transfer:
a) loans for which the “American-style” amortisation system was adopted
(“American-style” amortisation means the method of amortisation by which
each instalment is made up only of the share of interest, while the last
instalment also provides for the repayment of the entire principal amount);
b) loans originally provided and/or guaranteed by Veneto Sviluppo spa;
c) loans granted to employees of Veneto Banca or other Group companies;
d) loans provided to public institutions;
e) loans provided to religious institutions;
notes to the financial statements 195
-
(i) a first voluntary mortgage;
(ii) a puisne voluntary mortgage, having one of the following characteristics:
• senior mortgages are being cancelled or were granted to guarantee
expired debts;
• second voluntary mortgage, by which the initial amount of the loan
transferred together with the residual debt guaranteed by the senior
mortgage does not exceed 100% of the estimated value of the mortgaged
estate, calculated when allocating the loan;
the ratio between the amount of the original loan and the amount of the
mortgage does not exceed 100%;
the ratio between the amount of the original loan and the estimated value of
the mortgaged estate, calculated when allocating the loan, does not exceed
100%;
the ratio between the residual amount of the loan and the amount of the
mortgage does not exceed 94%;
the ratio between the amount of the residual debt and the estimated value of
the mortgaged estate, calculated when allocating the loan, does not exceed
95%;
they have at least one due and paid instalment;
they have at most three monthly instalments due and not yet paid;
the transferred borrowers are individuals or corporate bodies resident or
domiciled in Italy;
the loan date falls between 24 August 1989 [included] and 17 May 2002
[included];
one of the following amortisation systems was adopted:
(i) “French-style” (“French-style” amortisation means the gradual
amortisation method by which each instalment is subdivided into a share
of principal increasing over time and intended to repay the loan and a
share of interest);
(ii) “straight-line”(“straight-line”amortisation means the method of
amortisation by which each instalment is subdivided into a share of
principal intended to repay the loan and a share of fixed-rate interest);
(iii) “personal” plan (“personal” amortisation means a plan agreed with the
borrower to satisfy its requirements and underwritten by the latter in the
loan document);
(iv) “declining balance” (“declining balance” amortisation means the method
of amortisation by which each instalment is subdivided into a share of
principal intended to repay the loan and a constant share of interest);
the expiry date of the last instalment of the loans does not fall after 31 May
2027;
they were fully allocated;
the residual debt of each individual loan is greater than Euro 500.00.
f) loans indexed at a rate established with a ministerial decree;
g) loans guaranteed by a cooperative or by a working guarantee consortium;
h) loans granted to companies incorporated in Italy as limited liability
companies, with interest rates set at the prime rate of ABI (Italian
Bankers’Association) and expiry date falling after 30 June 2003;
i) loans granted to limited liability cooperative companies;
j) loans whose management was transferred to the management subsidiary
No. 95 of Veneto Banca, located in Montebelluna;
k) loans provided to subjects who are holders of another loan not meeting the
criteria necessary for the transfer in question.
Based on these principles, 4,257 positions were identified for an overall amount
of transferred loans equal to 372,803,095.29 Euros.
Claris Finance funded the purchase of loans through issuance of four classes of
bond securities (Asset Backed Securities) in July. The amounts deriving from the
collection of transferred loans will only be to service the securities issued and pay
the costs of the operation.
The characteristics of the portfolio were illustrated to the appointed rating
agencies “Fitch IBCA”and “Standard & Poor’s”, which assigned the ratings to the
bonds issued by the special purpose vehicle.
Bonds issued (Asset Backed Securities)
notes to the financial statements 196
Class
A
B
C
D
Rating
Amount
Yield
AAA
AA
BBB
unrated
346,700,000
11,600,000
13,200,000
1,300,000
Euribor 3m + 30 b.p.
Euribor 3m + 45 b.p.
Euribor 3m + 170 b.p.
10% +/- add. return
The three tranches of rated securities are denominated in Euros, they carry
floating-rate quarterly coupons and have a sequential repayment schedule linked
to the collections from the underlying loan portfolio.
Class A, B and C securities, listed on the Luxembourg Stock Exchange, were
firmly underwritten by Schroder Salomon Smith Barney and subsequently placed
with institutional investors.
Class D bonds are denominated in Euros, they do not have an official rating and
their yield, besides the face yield, is determined residually and paid only insofar
as the collections from the transferred portfolio exceed the amount of expenses
and disbursements related to higher class bonds.
On behalf of Claris Finance srl,Veneto Banca manages, administers and collects
the transferred loans.Therefore, the Bank acts as the sole counterparty of the
customer, even if in the name and on behalf of the vehicle. This so-called
servicing contract also provides for dispute management.
Furthermore, a line of credit was made available by Veneto Banca to Claris
Finance, with the aim of providing liquid assets for the payment of interest on
securities and management costs.
In order to guarantee the special purpose vehicle against the risks associated to
fluctuations in rates, given the diversity between the indexing parameters applied
on individual loans and the parameter set for the securities issued,Veneto Banca
and the special purpose vehicle carried out swap operations with the support of
Citibank N.A., London Branch.
The loans transferred were removed from the financial statements.
However, credits arising from loans resulting from the accounts of Veneto Banca
notes to the financial statements 197
Securitisation in October 2003
During the course of financial year 2003 Veneto Banca, in cooperation with its
subsidiary Banca Meridiana, completed another securitisation operation of a
mortgage loan portfolio.
The securitisation operation involved the on-payment transfer, in accordance
with Law No. 130 dated 30 April 1999, of arrangements classified as performing
residential and commercial mortgage loans starting from 1 October 2003.
On this date Veneto Banca completed the transfer of loans to“Claris Finance 2003
srl”, a special purpose vehicle incorporated in Italy according to Law No. 130/99
with its head office in Rome, of which Veneto Banca holds a share equal to 4% of
the share capital; the remaining share of 96% was underwritten by Stiching
Chessington, a foundation incorporated in Holland.
The subjects of the securitisation are mortgage loans resulting as at 30 September
2003 from the accounts of Veneto Banca and Banca Meridiana, classified as
performing loans, in compliance with the regulations issued by Banca d’Italia,
which have the following characteristics:
- they are provided to corporations, partnerships or individuals, in all cases
resident or domiciled in Italy;
- they are fully allocated, in one or more solutions;
- they are guaranteed by a first financial mortgage on real estate having
residential or commercial characteristics, by which it is meant:
(a) a first legal voluntary mortgage;
or
(b) a puisne legal voluntary mortgage, if senior mortgages were cancelled or
are granted to Veneto Banca or, as regards these senior mortgages, the
obligations guaranteed by them were fully satisfied;
- their residual debt as at 23 September 2003 (included) does not exceed 95% of
the mortgage amount;
- their residual debt as at 23 September 2003 (included) does not exceed 95% of
the estimated value of the mortgaged estate (resulting from the last estimate
made when allocating the loan);
- they have at least one instalment due and paid within 23 September 2003
(included);
- the loan date falls between 18 December 1985 (included) and 31 August 2003
(included);
- they have one of the following amortisation systems:
(i) “French-style” (“French-style” amortisation means the gradual
amortisation method by which each instalment is constant and
subdivided into a share of principal increasing over time and intended to
repay the loan and a share of interest);
(ii) “personal” plan (“personal” amortisation means the method of
amortisation agreed individually with each transferred borrower);
(iii) “Italian-style”(“Italian-style”amortisation means the method of
amortisation by which each instalment is decreasing and subdivided into
a constant share of principal intended to repay the loan and a share of
interest);
- the expiry date of the last instalment falls between 30 September 2003
(excluded) and 31 December 2028 (included);
- their residual debt as at 23 September 2003 (included) is equal to or higher
than 448,00 Euros;
- their residual debt as at 23 September 2003 (included) is lower than
2,500,000.00 Euros.
notes to the financial statements 198
and Banca Meridiana as at 30 September 2003, which present one or more of the
following characteristics, were excluded from the transfer:
a) loans granted to employees of Veneto Banca scparl, Banca di Roma spa, Banco
di Sicilia spa, Claris Vita spa, Banca di Credito Cooperativo del Piave e del
Livenza scarl, Banca Popolare Asolo e Montebelluna scarl or of companies of
the Veneto Banca Group, or to individuals who were employees of Banca di
Roma spa, Banco di Sicilia spa, Claris Vita spa, Banca di Credito Cooperativo
del Piave e del Livenza scarl, Banca Popolare Asolo e Montebelluna scarl or of
companies of the Veneto Banca Group when the loan was allocated;
b) loans provided to public institutions;
c) loans provided to religious institutions;
d) loans provided to subjects who were allocated another mortgage or
landedproperty loan not meeting the criteria set forth herein;
e) loans for which the “American-style” amortisation system was adopted
(“American-style” amortisation means the method of amortisation by which
the principal amount has to be repaid upon the expiry date);
f) loans granted to real estate companies;
g) loans for which the relevant borrower required the early redemption as at 23
September 2003 (included);
h) loans allocated in accordance to any laws, regulations or agreements
providing for subsidies or benefits to principal and/or interest with regard to
third parties of which either Veneto Banca scparl or Banca di Roma spa, Banco
di Sicilia spa, Banca Popolare Asolo e Montebelluna scarl or Banca di Credito
Cooperativo del Piave e del Livenza scarl has subsequently become creditor
(so-called subsidized loans);
i) loans that, even if classified as performing as at 23 September 2003
(included), were restructured after the relevant date of stipulation;
j) loans with monthly instalments, having more than one instalment due and
not paid as at 23 September 2003 (included), meaning an instalment that has
remained unpaid for over 5 days after the relevant expiry date;
k) loans with quarterly, half-yearly or yearly instalments, having one or more
instalments due and not paid as at 23 September 2003 (included), meaning
instalments that have remained unpaid for over 5 days after the relevant
expiry dates;
l) loans having a residual principal debt equal to 1,879,701.00 Euros or
2,000,000.00 Euros.
Based on these principles, 3,466 positions were identified for Veneto Banca for an
overall amount of transferred loans equal to 277,872,187.71 Euros, and 1,491
positions were identified for Banca Meridiana for an overall amount of
transferred loans equal to 68,089,825.65 Euros.
Claris Finance 2003 funded the purchase of loans through issuance of five classes
of bond securities (Asset Backed Securities) in October. The amounts deriving
from the collection of transferred loans will only be to service the securities issued
and pay the costs of the operation.
The characteristics of the portfolio were illustrated to the appointed rating
agencies “Moody’s”and “Standard & Poor’s”, which assigned the ratings to the
bonds issued by the special purpose vehicle.
Bonds issued (Asset Backed Securities)
Class
A
B
C
D1
D2
Rating
Amount
Yeald
AAA
AA
BBB
unrated
unrated
315,500,000
9,000,000
20,200,000
3,950,000
2,170,000
Euribor 3m + 30 b.p.
Euribor 3m + 45 b.p.
Euribor 3m + 170 b.p.
5% +/- add. return
5% +/- add. return
The three tranches of rated securities are denominated in Euros, they carry
floating-rate quarterly coupons and have a sequential repayment schedule linked
to the collections from the underlying loan portfolio.
Class A, B and C securities, listed on the Luxembourg Stock Exchange, were
firmly underwritten by Deutsche Bank and subsequently placed with institutional
investors.
Class D1 - D2 bonds are denominated in Euros, they do not have an official rating
and their yield, besides the face yield, is determined residually and paid only
insofar as the collections from the transferred portfolio exceed the amount of
expenses and disbursements related to higher class bonds.
Furthermore, a line of credit was made available by Veneto Banca and Banca
Meridiana to Claris Finance 2003 srl, with the aim of providing liquid assets for
the payment of interest on securities and management costs.
In order to guarantee the special purpose vehicle against the risks associated to
fluctuations in rates, given the diversity between the indexing parameters
applied on individual loans and the parameter set for the securities issued,
Veneto Banca and the special purpose vehicle carried out swap operations with
the support of Deutsche Bank.
The loans transferred were removed from the financial statements: the difference
between the book value of loans and the amount collected from the transfer
generated a profit, entered in the FY 2003 profit and loss account, equal to
2,936,351.68 Euros for Veneto Banca.
The costs relating to the structuring and realisation of the securitisation operation
were borne by the Veneto Banca and Banca Meridiana originators and entered
directly into the profit and loss account.
Securitisation activities of third parties
At the end of financial year 2004 Veneto Banca doesn’t hold portfolio securities
coming from securitisation activities of third parties.
notes to the financial statements 199
On behalf of Claris Finance 2003 srl,Veneto Banca manages, administers and
collects the transferred loans.Therefore, the Bank acts as the sole counterparty of
the customer, even if in the name and on behalf of the vehicle. This so-called
servicing contract also provides for dispute management.
SECTION 12 – MANAGEMENT AND
BROKERING ON BEHALF OF THIRD
PARTIES
12.1 STOCK TRADING
Securities
a) Purchases:
1. settled
2. not settled
b) Sales:
1. settled
2. not settled
Listed derivatives
a) Purchases:
1. settled
2. not settled
b) Sales:
1. settled
2. not settled
31/12/2004
31/12/2003
98,040
97,079
960
86,074
85,936
138
198,718
198,276
442
102,606
101,844
762
1,303,304
1,302,759
1,545
1,612,330
1,611,477
1,853
1,270,475
1,270,475
0
1,573,463
1,573,463
0
31/12/2004
31/12/2003
0
106,636
0
111,534
12.2 FUNDS UNDER MANAGEMENT
notes to the financial statements 200
1. securities issued by the Bank drawing up
the financial statements
2. other securities
12.3 SAFE CUSTODY AND ADMINISTRATION OF SECURITIES
a) third-party securities under custody
1. Securities issued by the Bank drawing up
the financial statements
2. other securities
b) third-party securities lodged with third parties
c) own securities lodged with third parties
31/12/2004
31/12/2003
4,324,487
3,996,606
1,176,065
3,148,422
3,998,329
411,678
1,122,552
2,874,054
3,813,905
426,916
Securities in safe custody and administration contracts are indicated with their
face value.
12.4 CREDIT COLLECTION ON BEHALF OF THIRD PARTIES:
DEBIT AND CREDIT ADJUSTMENTS
Third-party credits that have to be collected by the Bank within the framework of
portfolio transactions are indicated in the financial statements according to the
date of settlement principle, which brought about the following adjustments to
the accounting books:
31/12/2004
a) “debit” adjustments":
1.
2.
3.
4.
current accounts
central portfolio
cash
other accounts
1,222,250
191,684
768,695
6,837
255,034
b) “credit” adjustments":
1. current accounts
2. transferors of bills and documents
3. other accounts
31/12/2003
851,208
191,112
437,688
4,923
217,485
1,250,813
0
1,250,813
0
884,994
0
884,994
0
12.5 OTHER OPERATIONS
Bills for collection “under reserve"
“Post-collection” bills
Total counter-value of third-party funds
under management
TOTAL
31/12/2004
31/12/2003
950,580
300,233
618,319
266,675
0
0
1,250,813
884,994
PART C - INFORMATION ON THE
PROFIT AND LOSS ACCOUNT
SECTION 1 - INTEREST
1.1 BREAKDOWN OF ITEM 10 “INTEREST INCOME AND
SIMILAR ITEMS”
31/12/2003
6,464
5,059
317
725
168,521
159,648
0
TOTAL
0
12,424
0
15,434
0
0
0
187,409
180,141
Interest on credits towards customers include the interests on delayed payment
amounting to 353 thousand Euro (308 thousand Euro in 2003).
1.2 BREAKDOWN OF ITEM 20 “INTEREST EXPENSE AND
SIMILAR ITEMS”
a) on due to banks
b) on due to customers
c) on securities issued
of which:
- on certificates of deposit
d) on deposits in administration
e) on subordinated liabilities
f) negative balance of spreads
of “hedging” operations
TOTAL
31/12/2004
31/12/2003
13,089
23,597
47,784
24,001
21,430
38,757
3,091
2,133
47
1,647
40
894
4,110
2,282
90,276
87,403
Interest income and similar items and interest expense and similar items, accrued
on credit and debit relations with the companies of the Group, amount to 5.37
million of Euro and 151 thousand of Euro respectively.
1.3 DETAILS OF ITEM 10 “INTEREST INCOME AND SIMILAR
ITEMS”
a) on currency assets
- loans to customers
31/12/2004
31/12/2003
8,838
8,838
7,330
7,330
notes to the financial statements 201
a) on loans to banks
of which:
- on loans to central banks
b) on loans to customers
of which:
- on loans with deposits in
administration
c) on debt securities
d) other interest receivable
e) positive balance of spreads of
of “hedging” operations
31/12/2004
1.4 DETAILS OF ITEM 20 “INTEREST EXPENSE AND SIMILAR
ITEMS”
a) on currency liabilities
- due to customers
31/12/2004
31/12/2003
3,848
3,848
4,965
4,965
BREAKDOWN OF ITEM 30 “DIVIDENDS AND OTHER INCOME”
Company
notes to the financial statements 202
Group companies:
Claris Factor spa
Claris Vita spa
Claris Leasing spa
Veneto Ireland Financial Service ltd
Other equity investments:
Alleanza Assicurazioni spa
Arca sgr
Palladio srl
Autostrada TO-MI spa
Autostrade ordinarie
Banca Centrale per il Leasing - Italease spa
Banca Antoniana Popolare Veneta scarl
Banca Piccolo Credito Valtellinese scarl
Banca Popolare di Milano scarl
Banca Montepaschi spa
Banca Popolare di Vicenza scarl
Enel spa
Eni spa
Factorit spa
Generali Assicurazioni spa
Ifil spa
Intesa spa
Istituto Centrale delle Banche Popolari Italiane spa
Italcementi spa
Italmobiliare spa
London Stock Exchange
Mediobanca Spa
Mondadori Spa
Mediocredito Trentino – Alto Adige spa
Mediocredito Friuli Venezia Giulia spa
San Paolo-Imi spa
Servizi Interbancari spa
Seat Pag Gialle spa
Singer & Friedlander Gro
Snam spa
Telecom Italia spa
Tecnica spa
T.i.m.spa
Unicredito spa
Unione Fiduciaria spa
Zignago spa
Other companies
TOTAL
31/12/2004
31/12/2003
1,900
975
200
11,782
1,200
3,975
0
9,599
31/12/2004
31/12/2003
17
55
1,247
0
0
46
0
103
231
0
2
155
112
0
19
68
45
42
0
22
2,278
32
22
2
9
12
0
130
1,688
20
161
273
185
30
3
17
19
0
333
60
12
29
6
103
231
4
2
640
1,621
12
11
0
0
84
28
5
0
0
0
1
8
0
4
0
0
0
92
280
32
28
3
52
216
81
22,099
18,555
The rules regarding dividends were reformed by Legislative Decree 344/2003,
which removed the tax credit mechanism and substituted it with the dividend
exemption method. Therefore, to allow greater comparability with the figures
from 31 December 2003, they have been restated - in both the profit and loss
account and the breakdown presented above - to adjust for tax credits on
dividends for the 2003 financial year. The total adjustment is equivalent to Euro
2.8 million.
SECTION 2 - COMMISSIONS
Fee and commission expenses and receivable concern the services offered and
received by the Bank during the course of its activity, both by customers and
related banks.
2.1 BREAKDOWN OF ITEM 40 “COMMISSIONS RECEIVABLE”
TOTAL
31/12/2003
2,181
0
1,850
0
25,523
23,906
587
2,119
1,529
1,529
0
683
1,884
1,509
1,509
0
595
0
12,113
1,457
0
7,123
0
0
0
6,762
361
603
0
9,408
1,527
0
8,292
0
0
0
8,173
119
8,763
254
0
18,948
7,901
72
0
15,521
55,669
49,250
2.2 DETAILS OF ITEM 40 “COMMISSIONS RECEIVABLE”
31/12/2004
31/12/2003
Distribution channels for products and services
a) at own branches
1. funds under management
2. placement of securities
3. services and products of third parties
b) off-premises offer
1. funds under management
2. placement of securities
3. services and products of third parties
20,452
1,529
12,113
6,810
313
0
0
313
19,209
1,509
9,408
8,292
0
0
0
0
TOTAL
20,765
19,209
notes to the financial statements 203
a) guarantees provided
b) credit derivatives
c) management, brokering and
consulting services
1. stock trading
2. currency trading
3. funds under management
3.1. individual
3.2. collective
4. safe custody and administration
of securities
5. depositary bank
6. placement of securities
7. collection of orders
8. consulting services
9. distribution of third-party services
9.1. funds under management:
9.1.1. individual
9.1.2. collective
9.2. insurance products
9.3. other products
d) collection and payment services
e) servicing for securitisation activities
f) rate and tax collection
g) other services
31/12/2004
2.3 BREAKDOWN OF ITEM 50 “COMMISSIONS PAYABLE”
a) guarantees received
b) credit derivatives
c) management, brokering and
consulting services
1. stock trading
2. currency trading
3. funds under management
3.1 own portfolio
3.2 portfolio of third parties
4. safe custody and administration
of securities
5. placement of securities
6. off-premises offer of securities
products and services
d) collection and payment services
e) other services
31/12/2004
31/12/2003
0
0
1
0
3,552
5,088
1,064
0
415
415
0
1,845
0
0
0
0
0
621
0
560
1,452
TOTAL
2,683
2,732
2,215
1,795
2,328
8,499
9,212
SECTION 3 - PROFIT AND LOSS ON
FINANCIAL TRANSACTIONS
3.1 BREAKDOWN OF ITEM 60 “PROFIT/LOSS ON FINANCIAL
TRANSACTIONS”
notes to the financial statements 204
Items/Transactions
Transactions Transactions
on securities on currencies
Other
transactions
Total
A1. Revaluations
A2. Write-downs
B. Other profit (loss)
126
-410
11,645
0
0
5,223
0
0
3,911
126
-410
20,779
TOTAL
11,361
5,223
3,911
20,495
1.
2.
3.
4.
Government bonds
Other debt securities
Equity securities
Derivative contracts on securities
227
9.081
2.470
-417
SECTION 4 - ADMINISTRATIVE
EXPENSES
4.1 AVERAGE NUMBER OF EMPLOYEES BY CATEGORY
a)
b)
c)
managers
third- and fourth-level managers
other staff
TOTAL
31/12/2004
31/12/2003
average 2004
31
175
963
26
166
913
32
169
937
1,169
1,105
1,138
BREAKDOWN OF ITEM 80 B) “ADMINISTRATIVE EXPENSES”
31/12/2003
7,268
6,548
18,065
16,909
1,045
1,651
1,274
3,372
413
1,103
1,400
1,238
3,377
450
87
79
8,091
442
1,038
653
7,268
438
990
565
3,619
4,882
3,320
1,562
3,788
5,358
3,524
1,834
2,578
1,513
10,191
2,244
1,354
7,531
1,117
400
853
74
777
624
586
548
997
4,524
1,752
765
3,398
1,307
TOTAL
48,116
43,732
SECTION 5 - WRITE-DOWNS, WRITEBACKS AND PROVISIONS
BREAKDOWN OF ITEM 90 “WRITE-DOWNS OF TANGIBLE AND
INTANGIBLE FIXED ASSETS”
31/12/2004
31/12/2003
Intangible fixed assets
Tangible fixed assets
3,476
6,246
3,610
4,225
TOTAL
9,722
7,834
31/12/2004
31/12/2003
Intangible fixed assets:
Amortisation of restructuring charges for leased facilities
Software amortisation
Other deferred costs
640
1,152
1,684
845
1,027
1,738
Tangible fixed assets:
Depreciation for real estate
Depreciation for furniture
1,485
4,761
1,108
3,116
TOTAL
9,722
7,834
notes to the financial statements 205
Indirect taxes and dues
Expenses for purchase of non-professional
goods and services
- office material and supply
- electricity, heating and mains water
- transport and travel
- telephone, post, data transmission
- leasing of software and microfiches
- other organization services and electronic
processing carried out by third parties
- other organization services and
electronic processing
- supervision
- cleaning
- transportation of valuables
Expenses for professional services
Rentals payable
- real estate rentals
- machine rentals
Expenses for maintenance of furniture
and plants
Insurance premiums
Other expenses
- subscriptions
- detached staff
- remunerations to Directors and
Statutory Auditors
- membership fees
- expenses for information
and examination
- advertising and transparency
- other expenses
31/12/2004
BREAKDOWN OF ITEM 100 “PROVISIONS FOR RISKS AND
CHARGES”
Provisions for other charges
(social security/assets))
31/12/2004
31/12/2003
641
84
5.1 BREAKDOWN OF ITEM 120 “WRITE-DOWNS OF LOANS
AND PROVISIONS FOR GUARANTEES AND
COMMITMENTS”
a) write-downs of loans
of which:
- lump-sum write-downs
for country risk
- other lump-sum write-downs
b) provisions for guarantees
and commitments
of which:
- lump-sum provisions for country risk
- other lump-sum provisions
31/12/2004
31/12/2003
22,527
20,005
0
11,500
0
10,630
1,000
0
0
0
1,000
TOTAL
0
23,527
20,005
notes to the financial statements 206
Breakdown of write-downs of loans:
on non performing loans to customers:
loss
write-downs
on watch-list loans to customers:
analytical write-downs
lump-sum write-downs
on other performing loans:
lump-sum write-downs
on credit derivatives:
loss
write-downs
TOTAL
31/12/2004
31/12/2003
0
7,732
0
8,870
3,295
425
500
0
11,075
10,630
0
0
0
5
22,527
20,005
Write-downs for 11,027 thousand of Euro are due to analytical write-downs
reported at the end of the financial year, aimed at restoring the estimated
recoverable amount in loans, write-downs for 11,500 thousand of Euro, to lumpsum write-downs distributed between watch-list and performing loans.
BREAKDOWN OF ITEM 130 “WRITE-BACKS OF LOANS AND
PROVISIONS FOR GUARANTEES AND COMMITMENTS”
31/12/2004
31/12/2003
Write-backs of loans
2,356
1,405
TOTAL
2,356
1,405
31/12/2004
31/12/2003
Recovery of credits amortised over previous years
Collection of interest on delayed payment
Write-backs on write-downs occurred in previous years
2,278
14
64
409
44
952
TOTAL
2,356
1,405
Write-backs are made up of:
BREAKDOWN OF ITEM 140 “PROVISIONS TO CREDIT RISK
RESERVES”
Credit risks for interest on delayed payment
31/12/2004
31/12/2003
0
308
BREAKDOWN OF ITEM 150 “WRITE-DOWNS OF FINANCIAL
FIXED ASSETS”
Other than temporary write-downs of equity investments
31/12/2004
31/12/2003
44
174
The aforementioned write-down refers to write-downs of equity investments
“Treviso Glocal scarl" and “Servizi Internazionali e Strutture Integrate 2000 srl”in
Milan, implemented during the financial year to take into account the longlasting value loss of the Bank.
SECTION 6 - OTHER ITEMS OF THE
PROFIT AND LOSS ACCOUNT
31/12/2004
31/12/2003
Debits to third parties on deposits and current accounts
Rentals receivables
Recovery of stamp duties and similar
Income from securitisation activities
Recovery of expenses for services within the Group
Recovery of transferred staff
Other
11,990
90
6,476
0
1,896
2,194
603
11,535
64
5,935
2,936
1,326
1,699
256
TOTAL
23,249
23,751
6.2 BREAKDOWN OF ITEM 110 “OTHER OPERATING
CHARGES”
Financial lease rentals
31/12/2004
31/12/2003
419
156
6.3 BREAKDOWN OF ITEM 180 “EXTRAORDINARY
Contingent assets and
non-existent liabilities
Profit on sale:
- real estate
- securities
- equity investments
- other goods
Collection of interest on delayed payment
TOTAL
31/12/2004
31/12/2003
1,557
37,351
293
288
0
0
37,316
35
0
0
287
1
355
1,254
39,263
1,836
The contingent assets of Euro 1,177 thousand relate to reversal of tax-driven
adjustment resulting from the credit risks reserve for interest on delayed
payments.
Gain on the sale of equity investments relates almost entirely to the sale of the
80% equity investment in Claris Vita.
nota integrativa 207
6.1 BREAKDOWN OF ITEM 70 “OTHER OPERATING INCOME”
6.4 BREAKDOWN OF ITEM 190 “EXTRAORDINARY
CHARGES”
Contingent liabilities and
non-existent assets
Loss on sale:
- securities
- equity investments
- other goods
Other
TOTAL
31/12/2004
31/12/2003
1,641
4,459
2,601
1,417
3,729
376
354
0
283
1,134
194
201
6,294
4,219
Contingent liabilities are due to:
- exemption to the charge of the Bank for suffered robberies;
- write-down of interests or commissions of the previous financial year;
- redemptions to the customers.
Losses on sale of tangible fixed assets are due to sales of assets which were not
completely depreciated and not economically viable anymore.
BREAKDOWN OF ITEM 210 “CHANGE IN RESERVE FOR
GENERAL BANKING RISK”
notes to the financial statements 208
Provision to reserve for general banking risk
31/12/2004
31/12/2003
33,000
0
6.5 BREAKDOWN OF ITEM 220 “INCOME TAXES FOR THE
YEAR”
1.
2.
3.
4.
Current taxes (-)
Change in prepaid taxes (+/-)
Change in deferred taxes (+/-)
Income taxes for the year (-1 +/-2 +/-3)
31/12/2004
31/12/2003
-14,816
467
-441
-14,790
-16,496
-1,349
161
-17,684
To enable comparison with the previous financial year, an adjustment of Euro 2.8
million for tax credits on dividends has been made to the current tax credits on
dividends, as already noted in item 40 of the profit and loss account “dividends
and other income”.
In details:
1.
2.
3.
4.
Current taxes
Change in prepaid taxes
Change in deferred taxes
Income taxes for the year
IRES
IRAP
Totale
-10,600
469
-390
-10,520
-4,216
-2
-51
-4,269
-14,816
467
-441
-14,790
SECTION 7 - OTHER INFORMATION ON
THE PROFIT AND LOSS ACCOUNT
7.1 GEOGRAPHIC DISTRIBUTION OF INCOME
The geographic distribution of income is not such to require a detailed
breakdown in this section.
PART D – OTHER INFORMATION
SECTION 1 - DIRECTORS AND
STATUTORY AUDITORS
1.1 REMUNERATIONS
a) Directors
b) Statutory Auditors
31/12/2004
31/12/2003
347
145
317
145
Remunerations were paid in accordance to the resolutions of the Shareholders’
Meeting and in compliance with the Company By-laws.
a) Directors
b) Statutory Auditors
a) Directors
directly:
- cash loans
- credit commitments
indirectly:
- cash loans
- credit commitments
b) Statutory Auditors
directly:
- cash loans
- credit commitments
indirectly:
- cash loans
- credit commitments
31/12/2004
31/12/2003
139,970
657
117,667
509
Granted
Used
30,191
12
21,223
12
102,404
7,363
53,468
5,977
657
0
502
0
0
0
0
0
The credit lines were determined in compliance with art. 136 of Legislative
Decree No. 385 dated 1 September 1993.
notes to the financial statements 209
1.2 LOANS AND GUARANTEES PROVIDED
SECTION 2 - COMMUNITY CONTROLLING
PARENT COMPANY OR BANK
2.1 DESIGNATION
VENETO BANCA limited liability public cooperative company
2.2 HEAD OFFICE
Piazza G.B. Dall’Armi, 1 - Montebelluna (TV)
Drawing up of Group consolidated financial statements
notes to the financial statements 210
In accordance with art. 24 of Leg. Decree 87/92 and taking into account the
significance of the equity investment, the Bank drew up, to supplement the
annual financial statements, the Group consolidated financial statements as of
the same date, which are presented in a separate document and which shows a
profit of the year and net assets of the Group of 55,352 thousand Euro and
641,947 thousand Euro respectively. The financial position and results of
operation of the consolidated financial statements are similar to the ones that
would have resulted in the annual financial statements if the equity investments
included in the consolidation have been valued under the equity method.
Montebelluna, 29 march 2005
For the Board of Directors
The Chairman
Dr. Flavio Trinca
ANNEXES TO THE NOTES TO THE
FINANCIAL STATEMENTS
A
Statement of variations in the shareholders’ equity for the financial years
ended as at 31 December 2003 and 2004
B
Statement of changes in shareholders’ equity
C
Statement of assets property of the Group according to Act No. 72/1983
art. 10, which have been revaluated according to specific laws
D List of equity investments
E
Statement of cash flows
F
List of bonds convertible into shares (art. 2, lett. b, Pres. Decree 137/75)
H Financial statements of affiliates (art. 2429, par. 3, of the Italian Civil Code)
annexes 211
G Financial statements of the subsidiaries (art. 2429, par. 3, of the Italian Civil
Code)
ANNEX A: STATEMENT OF VARIATIONS IN THE
SHAREHOLDERS’ EQUITY AND SUBORDINATED LIABILITIES
FOR THE FINANCIAL YEARS ENDED
AS AT 31 DECEMBER 2003 AND 2004
(amounts in Euro thousand)
Share
capital
Legal
reserve
BALANCES AS AT 31 DECEMBER 2002
78,165
25,962
annexes 212
Breakdown of the profit (loss) for 2002 according
to resolution of the Shareholders’ Meeting
held on 26/4/2003:
* to legal reserve
* dividend to Shareholders
* to extraordinary reserve
* to the Board of Directors
Issue of subordinated bond
Prescribed dividends
Conversion of bond loan
Net increase in new share subscriptions
Net profit for 2003
BALANCES AS AT 31 DECEMBER 2003
Breakdown of the profit (loss) for 2003 according
to resolution of the Shareholders’ Meeting
held on 24/4/2004:
* to legal reserve
* dividend to Shareholders
* to extraordinary reserve
* to special reserve
* to the Board of Directors
Subordinated bond loan issue
Prescribed dividends
Conversion of bond loan
Net increase in new share subscriptions
Provision to reserve for general banking risks
Net profit for 2004
BALANCES AS AT 31 DECEMBER 2004
Ordinary Extraordinary
reserve
reserve
194,788
60,439
Taxed
reserve
L. 19/12/73
No. 823
100
3,042
13,408
1
84,514
1,680
16,649
254
95,068
29,004
280,983
73,847
100
4,008
19,323
1
3,578
98,646
23,781
33,012
304,765
93,170
100
Reserve
for
share
buyback
Taxed
reserve
and other
reserves
Provision
for general
banking
risks
Special
reserve art. 7
Law 30/7/90
No. 218
5,554
4,132
3
6,056
1,796
Special Subordinated
reserve
liabilities
Leg. D.
153/99
1,659
154,956
Net profit
for the year
Total
30,422
564,032
-3,042
-13,288
-13,408
-684
40,077
0
-13,288
0
-684
28,272
1
0
1,934
40,077
40,077
620,344
-4,008
-15,845
-19,323
-901
0
-15,845
0
0
-901
100,192
1
-443
27,359
45,658
45,658
45,658
809,395
28,272
-101,163
5,554
4,132
3
6,056
1,796
1,659
82,065
100,192
-443
33,000
5,554
4,132
3
39,056
1,796
1,659
181,814
annexes 213
Revaluation
reserve
ANNEX B: STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
(amounts in Euro thousands)
Description
annexes 214
Share Capital
Amount
98,646
Capital reserves:
304,765
Share premium reserve
304,765
Profit reserves:
182,614
Legal reserve
Reserve for share buybacks
Reserve for general banking risks
Revaluation reserve
Other reserves
Profits brought forward
33,012
4,132
39,057
5,554
100,859
TOTAL
586,025
Retained amount
Amount available for distribution
Legend:
A: share capital increase
B: cover of losses
C: distribution to Shareholders
Potential utilisation
A, B, C
B
A, B, C
A, B, C
A, B, C
A, B, C
Amount available
Summary of utilisation for
prior three financial years
cover of losses
other purposes
304,765
33,012
4,132
39,057
7,090
100,859
0
481,825
annexes 215
481,825
ANNEX C: STATEMENT OF ASSETS PROPERTY OF THE GROUP
ACCORDING TO ACT NO. 72/1983, ART. 10, WHICH HAVE BEEN
REVALUATED ACCORDING TO SPECIFIC LAWS
annexes 216
Real estate
Alano di Piave
Albaredo
Altivole
Asolo
Bibano di Godega S.Urbano
Caerano S. Marco
Cassola
Cavaso del Tomba
Cimadolmo
Crespano del Grappa
Crocetta del Montello
Farra di Soligo
Fonte
Francenigo
Gorgo al Monticano
Mansuè
Maser
Milano
Mogliano Veneto
Montebelluna
Motta di Livenza
Nervesa della Battaglia
Padova
Pederobba
Ponzano Veneto
S. Lucia di Piave
Silea
Susegana
Torri di Quartesolo
Trevignano
Treviso
Vicenza
Villorba
Volpago del Montello
Zero Branco
Others (for credit collection)
TOTAL
Historical cost
Via Don Pietro Codemo, 8
Piazza XXIV Maggio, 12
Via Laguna, 28B
Via Dante, 29
Via G. Marconi, 8/A
Via Kennedy, 1
Viale Venezia, 47
Via Marconi
Via Mazzini, 8
Piazza S. Marco, 15
Via Erizzo, 4
Via S. Gallo, 7
Via Roma, 7
Via Dei Fracassi, 67
Via Postumia centro
Piazza S. Tiziano, 18
Piazza Roma, 8
Via della Posta, 8/10
Via Ronzinella, 172
Piazza G.B. Dall'Armi, 1
Vicolo Balestrieri, 2
Via Feltrina Sud, 250 (Management centre)
Via Feltrina Sud, 250 (Management centre) land
Via Feltrina Centro, 145
Via Riva al Monticano, 8
Piazzale Berti, 4
Via Lisbona, 6
Via Roma, 123
Via Barbaro, 5
Via F. Crispi, 5
Via Don Minzoni, 6/B
Via 1° Maggio, 3
Via Roma, 12
Via Puccini, 2
Via N. Bixio, 1
Viale Crispi, 95/97
Via Roma, 121
Via Schiavonesca Nuova, 101
Via Noalese, 21/I
102,878
212,870
192,743
17,495
298,148
646,652
1,624,051
464,210
490,976
159,865
539,726
220,153
182,134
339,175
342,673
1,626,161
128,514
4,475,615
520,220
4,555,884
39,703
24,556,237
3,959,206
334,835
481,258
2,796,943
1,466,207
71,723
701,433
548,774
450,335
1,325,089
124,346
486,161
6,172,043
1,953,733
315,214
77,858
406,734
153,699
63,561,674
39,315
46,405
185,177
Other causes
Act 19/12/73
No. 823
14,768
91,226
132,670
22,292
20,438
110,312
21,691
111,044
114,956
105,279
55,238
64,651
43,588
930,507
57,649
1,124,481
38,586
102,865
85,106
99,583
34,299
62,881
45,326
98,133
103,177
54,783
27,631
82,074
117,836
52,953
67,883
241,679
2,001,447
2,022,094
99,583
Total
Depreciation
fund
Balance sheet
value as at
31/12/2004
102,878
212,870
253,916
333,213
298,148
779,322
1,624,051
464,210
596,255
348,439
675,120
220,153
182,134
339,175
342,673
1,626,161
236,753
4,475,615
520,220
6,820,767
135,938
24,556,237
3,959,206
334,835
481,258
2,796,943
1,466,207
230,578
764,314
679,206
450,335
1,423,222
124,346
644,121
6,172,043
1,953,733
450,241
291,208
406,734
153,699
32,407
81,511
112,563
147,562
105,061
417,940
560,298
174,079
335,644
124,176
351,366
89,162
24,588
120,094
107,942
656,594
111,189
1,644,789
187,232
3,728,321
70,471
131,359
141,353
185,651
193,087
361,382
1,063,753
290,131
260,611
224,263
323,754
130,991
157,546
219,081
234,731
969,567
125,564
2,830,826
332,988
3,092,446
135,938
24,187,893
3,959,206
199,227
445,164
2,309,214
927,376
165,636
392,581
407,908
289,100
750,869
100,098
496,483
3,186,318
1,396,919
258,531
176,643
261,666
153,699
67,926,477
368,344
135,608
36,094
487,729
538,831
64,942
371,733
271,298
161,235
672,353
24,248
147,638
2,985,725
556,814
191,710
114,565
145,068
16,386,457
51,540,020
annexes 217
Monetary revaluation Acts
Act 2/12/75
Act 19/3/83
Act 30/12/91
No. 576
No. 72
No. 413
ANNEX D: LIST OF EQUITY INVESTMENTS
Description
annexes 218
Controlled companies:
Claris Assicurazioni srl - Montebelluna
Claris Factor spa - Montebelluna
Claris Finance srl - Roma
Claris Broker spa - Montebelluna
Claris Leasing spa - Treviso
Banca Italo-Romena spa - Treviso
Banca di Bergamo spa - Bergamo
Banca Meridiana spa - Bari
Immobiliare Italo Romena srl - Bucarest (Romania)
Veneto Ireland Financial Services ltd - Dublino (Irlanda)
Other companies:
Alpifin srl - Pordenone
Arca SGR spa - Milano
Ass.i CRA srl - Padova
Banca Centrale per il Leasing - Italease spa - Milano
Banca Piccolo Credito Valtellinese scarl - Sondrio
Banca Popolare di Milano scarl - Milano
Banca Popolare di Vicenza scarl - Vicenza
Banca Popolare Etica scarl - Padova
Ce.S.Ve spa - Padova
Centrobanca spa - Milano
Centrosim spa - Milano
Claris Finance 2003 srl - Roma
Claris Vita spa - Milano
Consorzio Triveneto spa - Padova
Cooperativa "L. Luzzati" fra le Banche Popolari - Roma
Dutch Romanian Trading Group srl - Bucarest (Romania)
Est Capital SGR spa - Padova
Factorit spa - Milano
Ifil spa - Torino
Istituto Centrale Banche Popolari Italiane spa - Roma
Istituto per l'enciclopedia della banca e della borsa spa - Roma
Mediocredito Friuli Venezia Giulia spa - Udine
Mediocredito Trentino Alto Adige spa - Trento
Palladio Finanziaria spa - Vicenza
S.I. Holding spa - Milano
S.W.I.F.T. S.c. - Bruxelles
SEC Servizi scpa - Padova
SEC Solutions spa - Padova
Servizi Internazionali e Strutture Integrate 2000 srl - Milano
Società Interbancaria per l'Automazione SIA spa - Milano
Società per i Servizi Bancari - SSB spa - Milano
Tecnica spa - Giavera del Montello (TV)
Treviso Glocal scpa - Treviso
Unione Fiduciaria spa - Milano
Veneto Sviluppo spa - Venezia
TOTAL
(*) values in foreign currency
Number
of stocks or shares
52,000
8,000
700
30,000
20,000
6,000
180,204,416
7,106,332
100
1,001
77,469
1,002,000
24,369
571,350
257,000
1,921,000
1,840
100
4,097
337,865
4,460
400
15,000,000
104,000
10
1,250
13,500
233,395
410,000
41,507
500
6,100
96,000
28,223,774
45,000
10
3,908,935
182
25,000
2,775
28,125
650,000
10,400
4,320
10,168
Balance sheet
value
%
profit sharing
52,000.00
4,000,000.00
7,000.00
150,000.00
20,000,000.00
30,000,000.00
23,426,574.08
36,668,673.12
(*)
1,001,000.00
51,645.69
4,155,122.49
7,000.00
568,107.76
20,000,000.00
31,192,900.14
28,588,939.72
115,451,198.17
87,873.99
127,000,000.00
100.000
100.000
70.000
100.000
100.000
92.308
60.068
99.385
100.000
100.000
1,549.38
1,002,000.00
24,369.00
2,948,166.00
771,000.00
5,763,000.00
5,520.00
5,164.00
211,610.05
337,865.00
267,600.00
400.00
7,800,000.00
104,000.00
5,164.60
(*)
135,000.00
233,395.00
410,000.00
124,521.00
775.00
31,476.00
49,920.00
2,822,377.40
27,000.00
1,250.00
2,032,646.20
18,200.00
25,000.00
1,443.00
3,656.25
650,000.00
10,400.00
23,760.00
26,233.44
1,471.68
948,885.02
24,369.00
3,176,612.98
2,430,177.00
12,346,610.90
47,514.03
5,164.57
213,826.07
1,181,485.43
264,540.66
400.00
14,610,300.00
103,289.68
11,554.69
804,635.14
141,095.00
272,827.09
1,800,374.02
856,163.68
2,582.28
206,871.98
114,033.68
29,696,271.68
18,149.40
4,589.26
2,292,377.32
18,200.00
58,967.00
1,591.20
4,498.27
12,300,002.00
12,705.00
39,761.50
46,862.24
12.634
2.004
2.343
1.092
0.389
0.463
0.004
0.030
1.879
0.101
1.338
4.000
20.000
7.143
3.984
10.000
10.000
0.622
0.038
0.376
0.154
0.186
0.085
21.212
0.100
0.012
14.079
7.280
33.333
0.008
0.034
9.000
10.000
0.400
0.110
411,161,547.41
annexes 219
Face value
in Euro
ANNEX E: STATEMENT OF CASH FLOWS
PRODUCED AND COLLECTED PROVISIONS
(in Euro thousand)
31/12/2004
31/12/2003
Income management-produced provisions
Net profit for the year
45,658
40,077
Intangible asset amortisation
3,458
3,610
Tangible asset depreciation
6,246
4,225
2,423
2,297
16,106
20,616
2,723
89
Provision for employees’
severance fun
Provisions for risks and charges:
- Provision for taxation
- Other provisions
- Credit risk reserve
0
308
33,000
0
Due to banks
226,252
746,750
Due to customers
395,897
245,312
Third-party funds
2,592
1,175
Other liabilities
6,163
5,333
127,109
103,098
9,503
0
- Reserve for general banking risk
annexes 220
Increase of collected provisions
Other asset increases
Decrease of invested provisions
Cash and balances with central banks
and post offices
Treasury bonds and similar instruments
eligible for refinancing
57,634
7,037
Loans to banks
41,851
215,983
Shares, quotas and other equity securities
TOTAL PRODUCED AND COLLECTED PROVISIONS
1,514
0
978,137
1,597,202
UTILIZED AND INVESTED PROVISIONS
(in Euro thousand)
31/12/2004
31/12/2003
15,845
13,288
Utilization of income management-produced provisions
Allocation of the results of FY 2003
- dividends to Shareholders
- to the Board of Directors
902
684
Subordinate employment severance indemnity
680
2,544
20,001
4,221
1,538
1,306
0
0
593
6,880
188,966
903,109
0
72,891
1,322
2,703
Utilization of the provision for risks and charges
- provision for taxation
Utilization of the credit risk reserve
Utilization of the reserve for general banking risk
Other provisions
Decrease of collected provisions
Due to banks
Subordinated liabilities
Accruals and deferred income
Shares, quotas and other equity securities
Other assets
0
4,787
17,999
10,041
Bonds and other debt securities
60,930
0
Loans to banks
87,850
0
Cash and balances with central banks and post offices
0
11,367
Loans to customers
563,670
525,096
Tangible fixed assets
15,114
18,570
931
3,091
Intangible fixed assets
Other equity investments
Prepayments and accrued income
TOTAL UTILIZED AND INVESTED PROVISIONS
0
14,308
1,796
2,316
978,137
1,597,202
annexes 221
Increase of invested provisions
ANNEX F: LIST OF BONDS CONVERTIBLE INTO SHARES
(ART. 2, LETT. B, PRES. DECREE 137/75)
annexes 222
Description
Initial stocks
Face
values
Balance sheet
values
Riello 04/07 7% convertibile
Alitalia 02/07 convertibile
Telecom Italia convertibile
Veneto Ireland 01/07 2% subord. Cv
0.00
9.25
0.00
127,000,000.00
0.00
8.24
0.00
127,000,000.00
TOTAL
127,000,009.25
127,000,008.24
Face
values
Changes
Balance sheet
values
35,000,000.00
0.00
180.00
35,000,813.40
0.00
226.63
0.00
-0.51
28.79
0.00
35,000,000.00
9.25
180.00
127,000,000.00
35,000,813.40
7.73
255.42
127,000,000.00
35,000,180.00
35,001,040.03
28.28
162,000,189.25
162,001,076.55
Final stocks
Face
values
Balance sheet
values
annexes 223
Appraisals
ANNEX G: FINANCIAL STATEMENTS OF SUBSIDIARIES
60.068%
Legal office: Via Camozzi, 10 - 24121 BERGAMO
Share Capital Euro 39,000,000.00 fully paid-up
Member of the Register of Companies in Bergamo, No. 02348370160
Member of R.E.A. in Bergamo, No. 290585
Tax code and VAT number 02348370160
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
(Importi espressi in unità di Euro)
BALANCE SHEET
ASSETS (amounts in Euro)
10
Cash and balances with central banks and post offices
30
Loans to banks:
31/12/2003
3,422,442
2,602,424
40,433,671
24,545,538
(a) on demand
10,514,851
3,269,136
(b) ) other receivables
29,918,820
21,276,402
40
Loans to customers
50
Bonds and other debt securities:
(c) issued by financial institutions
annexes 224
31/12/2004
70
Equity investments
90
Intangible fixed assets
489,566,498
376,828,632
5,000,000
0
5,000,000
100 Tangible fixed assets
130 Other assets
140 Prepayments and accrued income:
0
39,673
26,000
2,559,481
3,483,048
1,824,800
1,143,335
11,503,756
3,824,644
1,006,287
704,548
(a) accrued income
715,254
411,161
(b) prepayments
291,033
293,387
TOTAL ASSETS
555,356,608
413,158,169
10
20
Due to banks:
16,133,985
(b) on maturity or with notice
15,377,276
Due to customers:
(b) on maturity or with notice
bonds
b) certificates of deposit
50
Other liabilities
60
Accruals and deferred income:
12,455,919
168,415,898
166,291,393
(b) provisions for taxation
(c) other provisions
170 Profit for the year
TOTAL LIABILITIES
206,045
74,596
131,449
315,967
233,810
2,997,347
2,106,654
875,277
623,483
890,693
140 Reserves:
legal reserve
15,237,668
329,811
120 Share capital
d) other reserves
1,996,020
17,021,075
Credit risk reserves
a)
125,238,550
123,242,530
2,124,505
224,230
Provisions for risks and charges:
90
194,873,259
(b) deferred income
80
207,329,178
17,317,431
105,581
Employees’ severance fund
10,656,730
275,237,022
(a) accrued expenses
70
23,507,183
12,850,453
292,554,453
Securities issued:
a)
31/12/2003
31,511,261
(a) on demand
(a) on demand
30
31/12/2004
251,794
0
31,810
39,000,000
39,000,000
1,498,647
104,825
244,207
104,825
1,254,440
0
1,712,149
1,393,823
555,356,608
413,158,169
annexes 225
LIABILITIES (amounts in Euro)
GUARANTEES AND COMMITMENTS (amounts in Euro)
31/12/2004
31/12/2003
10
47,364,517
18,171,277
Guarantees provided
of which:
annexes 226
20
-
acceptances
-
other guarantees
Commitments
679,234
82,395
46,685,283
18,088,882
6,640,571
993,399
PROFIT AND LOSS ACCOUNT (amounts in Euro)
31/12/2004
31/12/2003
10
21,405,712
17,139,580
Interest income and similar items
of which:
- on amounts due from customers
- on debt securities
20
20,358,040
15,975,141
3,203
133,050
Interest expense and similar items
8,426,246
6,761,621
of which:
- on amounts due to customers
3,790,221
3,728,241
- on securities issued
4,125,673
2,107,113
40
Fee and commission income
50
Fee and commission expenses
4,534,948
3,459,383
873,458
564,709
60
70
Profit on financial transactions
2,310,432
2,429,737
Other operating income
1,537,416
970,924
80
Administrative expenses:
(a) personnel costs
12,923,820
10,365,177
6,636,330
5,271,431
- wages and salaries
4,722,920
3,795,194
- social security charges
1,304,374
1,009,760
- employees’ severance
94,464
82,126
- pensions and similar benefits
(b) other administrative expenses
90
Write-downs of tangible and intangible fixed assets
100 Provisions for risks and charges
110 Other operating charges
120 Write-downs of loans and provisions for guarantees and commitments
130 Write-backs of loans and provisions for guarantees and commitments
140 Provisions to credit risk reserves
170 Profit (loss) on ordinary activities
180 Extraordinary income
190 Extraordinary charges
316,541
240,023
6,287,490
5,093,746
1,457,680
1,491,113
475,180
0
7
16
2,622,445
2,984,859
421,313
100,492
0
1,065
3,430,985
1,931,556
56,816
66,150
84,411
205,280
200 Extraordinary profit (loss)
- 27,595
- 139,130
220 Income taxes for the year
1,691,241
398,603
230 Profit for the year
1,712,149
1,393,823
annexes 227
of which:
92.308%
Legal Office: Viale Nino Bixio, 1 - 31100 TREVISO
Share Capital Euro 32,500,000.00 fully paid-up
Member of Register of Companies in Treviso No. 97002540587
Member of R.E.A. in Treviso No. 289098
VAT Number 03673600262
Tax Code 97002540587
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
annexes 228
ASSETS (amounts in Euro)
10
Cash and balances with central banks and post offices
30
Loans to banks:
31/12/2004
31/12/2003
1,907,822
1,210,534
71,127,723
31,341,316
(a) on demand
48,164,763
15,536,313
(b) other receivables
22,962,959
15,805,003
40
Loans to customers
50
Bonds and other debt securities:
167,473,151
96,032,070
1,674,496
53,746
(b) issued by banks
37,366
53,746
(d) issued by others
1,637,130
0
70
Equity investments
90
Intangible fixed assets
100 Tangible fixed assets
110 Subscribed share capital not paid-up
130 Other assets
140 Prepayments and accrued income:
(a) accrued income
(b) prepayments
TOTAL ASSETS
41,037
27,363
730,152
493,200
7,958,841
5,323,124
0
3,615,198
1,544,762
1,302,477
334,105
106,464
305,855
42,709
28,250
63,755
252,792,089
139,505,492
10
Due to banks:
(a) on demand
(b) on maturity or with notice
20
30
31/12/2004
31/12/2003
111,866,769
1,621,008
110,245,760
Due to customers:
52,986,298
755,995
52,230,304
75,478,103
50,339,653
(a) on demand
49,341,240
35,396,859
(b) on maturity or with notice
26,136,863
14,942,794
Securities issued:
(a) bonds
50
Other liabilities
60
Accruals and deferred income:
70
Employees’ severance fund
80
Provisions for risks and charges
(a) accrued expenses
(b) provisions for taxation
(c) other provisions
25,000,000
25,000,000
1,533,669
457,587
230,213
230,213
300,881
295,405
486,397
73,234
140 Reserves
288,071
73,589
413,163
120 Share capital
(c) other reserves
2,045,668
457,587
100 Reserve for general banking risk
(a) legal reserve
0
0
214,482
392,280
392,280
32,500,000
32,500,000
1,665,263
1,639,679
1,069,698
1,069,698
595,563
569,981
160 Loss brought forward
- 699,777
- 2,339,940
170 Profit for the year
3,298,921
1,640,164
252,792,089
139,505,492
TOTAL LIABILITIES
annexes 229
LIABILITIES (amounts in Euro)
GUARANTEES AND COMMITMENTS (amounts in Euro)
31/12/2004
31/12/2003
10
14,134,044
6,794,417
Guarantees provided
of which
- other guarantees
annexes 230
20
Commitments
14,134,044
6,794,417
25,775,444
12,287,922
PROFIT AND LOSS ACCOUNT (amounts in Euro)
31/12/2004
31/12/2003
10
12,150,014
5,778,066
Interest income and similar items
of which:
- on amounts due from customers
- on debt securities
20
9,637,136
5,170,761
282,678
94,945
Interest expense and similar items
4,256,584
2,624,172
of which:
- on amounts due to customers
- on securities issued
2,624,375
1,331,706
1,867
0
40
Fee and commission income
3,616,853
2,026,360
50
Fee and commission expenses
343,090
253,372
60
Profit on financial transactions
1,740,244
2,403,172
70
Other operating income
184,962
116,935
80
Administrative expenses
(a) personnel costs
6,195,137
4,816,119
2,374,021
2,026,638
1,687,231
1,439,925
- social security charges
488,556
430,646
- employees’ severance
32,817
36,800
- wages and salaries
- pensions and similar benefits
(b) other administrative expenses
90
Write-downs of tangible and intangible fixed assets
2,121
4,543
3,821,116
2,789,481
1,014,785
731,219
100 Provisions for risks and charges
191,948
150,000
120 Write-downs of loans and provisions for guarantees and commitments
884,925
356,789
0
43,861
4,805,604
1,436,723
39,942
924,629
130 Write-backs of loans and provisions for guarantees and commitments
170 Profit on ordinary activities
180 Extraordinary income
190 Extraordinary charges
200 Extraordinary profit
211 Provision change for general banking risks
88,716
28,383
-48,774
896,246
0
-150,000
220 Income taxes for the year
1,457,909
842,805
230 Profit for the year
3,298,921
1,640,164
annexes 231
of which:
99.385%
Legal Office: Via Amendola, 205/3 - 70126 BARI
Share Capital Euro 36,895,718.28 fully paid-up
Member of the Register of Companies in Bari No. 04656500727
Member of R.E.A. in Bari No 333436
Tax Code and VAT Number 04656500727
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
10
Loans to banks
(a) on demand
(b) other receivables
40
Loans to customers
50
Bonds and other debt securities:
(c) issued by financial institutions
annexes 232
31/12/2003
10,532,087
13,328,778
Cash and balances
with central banks and post offices
30
31/12/2004
70
Equity investments
90
Intangible fixed assets
296,346,469
266,381,417
350,755,318
329,510,871
29,965,052
21,244,447
448,522,279
287,208,929
2,170,000
2,170,000
2,170,000
2,170,000
42,863
29,190
7,140,700
9,150,035
of which:
- start-up costs
100
Tangible fixed assets
130
Other assets
140
Prepayments and accrued income:
(a) accrued income
(b) prepayments
TOTAL ASSETS
0
106,167
3,198,994
2,447,617
44,223,355
25,157,908
1,983,404
1,373,650
1,883,664
1,275,984
99,740
97,666
814,160,151
691,621,425
10
Due to banks:
(a) on demand
(b) on maturity or with notice
20
(b) on maturity or with notice
b) certificates of deposit
40
Deposits in administration
50
Other liabilities
60
Accruals and deferred income:
4,091,609
1,134,716
0
2,956,893
576,118,696
501,008,385
558,247,314
488,009,632
17,871,382
12,998,753
Securities issued:
a) bonds
31/12/2003
16,638,708
16,638,708
Due to customers:
(a) on demand
30
31/12/2004
136,326,320
117,713,035
99,007,264
73,888,858
18,613,285
25,118,406
5,084,808
11,143,363
17,240,153
29,360,043
655,672
1,284,016
(a) accrued expenses
62,818
920,256
(b) deferred income
592,854
363,760
70
Employees’ severance fund
7,315,846
8,305,631
80
Provisions for risks and charges:
6,039,635
3,084,651
(b) provisions for taxation
3,244,847
2,018,495
(c) other provisions
2,794,788
1,066,156
90
Credit risk reserves
0
25,482
110
Subordinated liabilities
10,125,020
10,000,000
120
Share capital
36,895,718
24,597,147
140
Reserves:
10,625
10,625
a) legal reserve
160
Profit (loss) brought forward
170
Profit for the year
TOTAL LIABILITIES
10,625
10,625
-296,791
-813,809
2,005,741
517,018
814,160,151
691,621,425
annexes 233
LIABILITIES (amounts in Euro)
GUARANTEES AND COMMITMENTS (amounts in Euro)
31/12/2004
31/12/2003
10
12,609,755
13,085,114
Guarantees provided
of which:
- other guarantees
annexes 234
20
Commitments
12,609,755
13,085,114
3,873,791
1,674,253
PROFIT AND LOSS ACCOUNT (amounts in Euro)
31/12/2004
31/12/2003
10
34,086,986
31,248,001
Interest income and similar items
of which:
- on amounts due from customers
- on debt securities
20
25,469,098
23,390,292
119,047
18,781
Interest expense and similar items
8,515,862
8,760,500
of which:
30
- on amounts due to customers
4,479,527
4,735,571
- on securities issued
3,830,204
2,621,449
Dividends and other income
(a) from shares, quotas and other equity securities
(b) from equity investments
40
110
110
0
Fee and commission income
151,570
0
151,570
8,369,184
7,985,274
50
Fee and commission expenses
884,621
465,371
60
Profit (loss) on financial transactions
582,884
245,267
70
Other operating income
5,352,572
5,365,153
80
Administrative expenses:
26,888,791
28,479,588
(a) personnel costs
15,132,794
15,946,753
- wages and salaries
10,729,813
11,240,888
- social security charges
2,977,690
3,074,635
- employees’ severance
895,668
953,265
8,694
0
11,755,997
12,532,835
- pensions and similar benefits
(b) other administrative expenses
90
100
Write-downs of tangible
and intangible fixed assets
2,830,030
2,655,673
Provisions for risks and charges
1,652,000
236,900
241,253
197,376
2,951,078
2,001,267
110
Other operating charges
120
Write-downs of loans
and provisions for guarantees and commitments
130
annexes 235
of which:
Write-backs of loans
and provisions for guarantees and commitments
163,331
19,661
0
25,482
Profit (loss) on ordinary activities
4,591,432
2,192,769
Extraordinary income
1,954,394
1,064,213
190
Extraordinary charges
2,134,546
1,161,964
200
Extraordinary profit (loss)
- 180,152
- 97,751
220
Income taxes for the year
2,405,539
1,578,000
230
Profit for the year
2,005,741
517,018
140
Provision to credit risk reserve
170
180
100%
Legal Office: Piazza G.B. Dall’Armi, 1 - 31044 MONTEBELLUNA
Share Capital Euro 52,000.00 fully paid-up
Member of Register of Companies in Treviso No. 03360990265
Member of R.E.A. in Treviso No. 266387
Tax Code and VAT Number 03360990265
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
A)
B)
Credits towards Shareholders for deposits still due
31/12/2003
0
0
Fixed assets:
I
Intangible fixed assets:
1) intangible fixed assets
2) amortisation
I
Total intangible fixed assets
II
Tangible fixed assets:
1) tangible fixed assets
annexes 236
31/12/2004
2) depreciation
II
Total tangible fixed assets
III
Financial fixed assets
B)
Total fixed assets
C)
Working capital:
I
Stocks
II
Loans:
1) within 12 months
2) over 12 months
II
Total loans (working capital)
III
Financial assets (trading)
IV
235,031
198,227
-157,408
-111,914
77,623
86,313
265,696
262,107
-142,035
-102,327
123,661
159,780
0
0
201,284
246,093
0
0
555,131
260,970
300
300
555,431
261,270
0
0
Liquid assets
4,437,011
2,176,272
C)
Total working capital
4,992,442
2,437,542
D)
Accruals and payables
15,409
832
5,209,135
2,684,467
TOTAL ASSETS
LIABILITIES (amounts in Euro)
52,000
52,000
0
0
Shareholders’ equity:
I
- Share capital
II
- Issue premiums
III
- Revaluation reserves
IV
- Legal reserve
V
- Reserve for own equity shares in portfolio
0
0
VI
- Statutory reserves
0
0
29,363
8,042
0
0
VII - Other reserves
VIII - Profit (loss) brought forward
IX
A)
31/12/2003
- Profit (loss) for the year
Total shareholders’ equity
0
0
10,400
10,400
79,223
21,321
170,986
91,763
B)
Provisions for risks and charges
23,927
18,097
C)
Employees’ severance fund
29,987
21,792
1) payable within 12 months
4,980,561
2,552,359
D)
Total debts
4,980,561
2,552,360
E)
Accruals and payables
3,674
455
5,209,135
2,684,467
D)
Debts:
TOTAL LIABILITIES
annexes 237
A)
31/12/2004
MEMORANDUM ACCOUNTS (amounts in Euro)
31/12/2004
31/12/2003
Third-party assets owned by the Company
0
0
B)
Commitments
0
0
C)
Guarantees
0
0
D)
Risks
0
0
0
0
A)
annexes 238
TOTAL MEMORANDUM ACCOUNTS
PROFIT AND LOSS ACCOUNT (amounts in Euro)
A)
31/12/2004
31/12/2003
2,842,710
2,556,025
0
0
2,842,710
2,556,025
2,169,273
2,025,111
37,623
36,965
234,795
225,331
Production value
1)
Sale and service profits
5)
Other profits
A)
Total production value
B)
Production costs
7)
for services
8)
for payment of third-party assets
9)
for the staff
a) wages and salaries
b) social security charges
85,745
79,986
c) employees’ severance
15,665
14,104
e) other costs
10,393
4,758
346,598
324,179
a) intangible fixed asset amortisation
45,494
40,668
b) tangible fixed asset depreciation
39,733
31,335
85,227
72,003
Total for the staff
Total amortisations, depreciations and write-downs
14) other operating charges
B)
Total production costs
Difference between production value and costs (A - B)
C)
17,488
26,271
2,656,209
2,484,529
186,501
71,496
29,293
18,537
29,293
18,537
40,531
620
Financial charges and profits:
16) other financial profits
d) profits in addition to the previous ones
d4) from others
Total other financial profits
17) interests and other financial charges
d) from others
Total interests and other financial charges
C)
Total profits and financial charges
D)
Total financial asset write-downs
E)
Extraordinary income and charges:
40,531
620
-11,238
17,917
0
0
25
2,737
25
2,737
20) Income
b) other extraordinary income
Total income
21) Charges
c) other extraordinary charges
10,837
12,884
10,837
12,884
Total of extraordinary entries
-10,812
-10,147
Total profits before taxes (A-B+C+D+E)
164,451
79,266
84,374
57,068
Total charges
E)
22) Income taxes for the year
a) current taxes
b) deferred taxes (prepaid)
854
877
Total income taxes for the year
85,228
57,945
23) Profit for the year
79,223
21,321
annexes 239
10) amortisations, depreciations and write-downs
100%
Legal Office: Via Serena, 63 - 31044 MONTEBELLUNA (TV)
Share Capital Euro 150,000.00 fully paid-up
Member of Register of Companies in Treviso No. 03203820265
Member of R.E.A. in Treviso No. 227566
Tax Code and VAT Number 03203820265
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
31/12/2003
0
0
1) intangible fixed assets
113,382
113,022
2) amortisation
-76,409
-52,489
36,973
60,533
1) tangible fixed assets
134,728
130,768
2) depreciation
-93,109
-75,753
41,619
55,015
A)
Credits towards Shareholders for deposits still due
B)
Fixed assets
I
I
II
annexes 240
31/12/2004
II
Intangible fixed assets:
Total intangible fixed assets
Tangibile fixed assets:
Total tangible fixed assets
III Financial fixed assets
B)
C)
Total fixed assets
0
67,139
78,592
182,687
0
0
1,488,511
5,245,862
Working capital
I
Stocks
II
Loans:
1) within 12 months
2) over 12 months
II
Total loans
III Financial assets not considered as fixed assets
IV Liquid assets
C)
Total working capital
D)
Accruals and payables
TOTAL ASSETS
0
0
1,488,511
5,245,862
0
0
164
18,893
1,488,675
5,264,755
7,383
11,578
1,574,650
5,459,020
LIABILITIES (amounts in Euro)
150,000
150,000
Shareholders’ equity:
I
- Share capital
II
- Issue premiums
0
0
III - Revaluation reserves
0
0
16,685
16,685
0
0
IV - Legal reserve
V
- Reserve for own equity shares in portfolio
VI - Statutory reserves
VII - Other reserves
VIII - Profit (loss) brought forward
IX - Profit (loss) for the year
X
A)
31/12/2003
0
0
20,837
20,838
-34,974
-36,578
0
1,605
- Loss for the year
-42,052
0
Total shareholders’ equity
110,496
152,550
B)
Provisions for risks and charges
16,725
11,560
C)
Employees’ severance fund
56,706
49,347
1,382,722
5,236,624
D)
Debts:
1) witihn 12 months
2) over 12 months
D)
Total debts
E)
Accruals and payables
TOTAL LIABILITIES
0
0
1,382,722
5,236,624
8,001
8,939
1,574,650
5,459,020
annexes 241
A)
31/12/2004
MEMORANDUM ACCOUNTS (amounts in Euro)
31/12/2003
1)
Non-standard system of third-party assets deposited in our bank
5,165
5,165
2)
Loan non-standard system
0
0
3)
Risk non-standard system
0
0
4)
Connection between tax and civil regulations
0
0
5,165
5,165
TOTAL MEMORANDUM ACCOUNTS
annexes 242
31/12/2004
PROFIT AND LOSS ACCOUNT (amounts in Euro)
A)
31/12/2004
31/12/2003
838,741
857,708
0
0
3) change of work in progress on order
0
0
4) increase of fixed assets for internal works
0
0
Production value
1) sale and service profits
2) changes in stocks of products in process,
semi-finished and finished
5) other profits and revenues
A)
B)
Total production value
190
1,666
838,931
859,374
600,456
579,092
23,055
22,693
123,748
115,604
34,696
35,961
Production costs
7) for services
8) for payment of third-party assets
9) for the staff:
a) wages and salaries
b) social security charges
c) employees’ severance
9,509
8,867
167,953
160,432
a) intangible fixed asset amortisation
23,919
23,799
b) tangible fixed asset depreciation
17,357
18,465
41,276
42,264
Total for the staff
Total amortisations, depreciations and write-downs
14) other operating charges
B)
Total production costs
Difference between production value and costs (A - B)
C)
6,060
14,544
838,800
819,025
131
40,349
660
5,275
660
5,275
16,075
20,670
121
0
Financial charges and profits:
d) profit in addition to the previous ones
- controlling companies
Total other financial profits
17) interests an other financial charges
d) controlling companies
e) from others
Total interests and other financial charges
C)
16,196
20,670
-15,536
-15,395
0
0
401
0
Total income
401
0
21) Charges
4,237
0
Total profits and financial charges
D)
Total financial asset write-downs
E)
Extraordinary income and charges:
20) Income
b) other
E)
Total extraordinary entries
Total profits before tax (A-B+C+D+E)
3,836
0
-19,241
29,954
22,811
23,349
22,811
23,349
-42,052
1,605
22) Income taxes for the year
a) Current taxes
Total income taxes for the year
23) Profit for the year
annexes 243
10) amortisations, depreciations and write-downs
100%
Legal Office: Piazza G.B. Dall’Armi, 1 - 31044 MONTEBELLUNA
Share Capital Euro 4,000,000.00 fully paid-up
Member of the Register of Companies in Treviso No. 02128270242
Member of R.E.A. in Treviso No. 217362
VAT number 03079500264
Tax Code 02128270242
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
10
Cash and balances
20
Loans to banks
(a) on demand
(b) other receivables
31/12/2004
31/12/2003
382
302
125,920
23,280,022
22,240
23,224,822
103,680
55,200
103,680
55,200
of which:
- for factoring transactions
30
Loans to financial institutions
annexes 244
(b) other receivables
354,504
195,360
354,504
195,360
354,504
195,360
of which:
- for factoring transactions
40
Loans to customers
114,732,996
114,153,332
of which:
- for factoring transactions
90
Intangibile fixed assets
100
Tangible fixed assets
130
Other assets
140
114,732,996
Prepayments and accrued income
(a) accrued income
(b) prepayments
TOTAL ASSETS
93,222,909
0
90
14,097
4,554
1,117,086
1,189,753
356,942
528,619
0
0
356,942
528,619
116,701,927
139,352,032
LIABILITIES (amounts in Euro)
10
31/12/2004
Due to banks
(a) on demand
20
Due to financial institutions
30
Due to customers
(b) on maturity or with notice
31/12/2003
49,287,611
49,287,611
3,226,178
3,226,178
116,583
0
11,760,886
10,121,489
11,760,886
10,121,489
of which:
(b) other securities
50
60
70
80
(b) deferred income
165,530
Employees’ severance fund
Share capital
130
Issue premiums
20)
1,267,996
0
508,710
650,000
4,000,000
4,000,000
32,279
32,279
741,942
(d) other reserves
248,007
Commitments
145,315
1,267,996
52,310
493,935
GUARANTEES AND COMMITMENTS (amounts in Euro)
126,919
1,658,516
Reserves
TOTAL LIABILITIES
127,528
609
1,606,206
(a) legal reserve
Profit (loss) for the year
189,305
142,063
Provisions for risks and charges
120
116,950,000
181,657
16,127
Credit risk reserves
116,950,000
277,366
Accruals and deferred income
(c) other provisions
170
45,400,000
(a) accrued expenses
90
10,121,489
45,400,000
Other liabilities
(b) provisions for taxation
140
11,760,886
Securities issued
628,329
393,255
235,074
2,594,314
2,013,613
116,701,927
139,352,032
31/12/2004
31/12/2003
160,329
69,490
annexes 245
- for factoring transactions
40
PROFIT AND LOSS ACCOUNT
COSTS (amounts in Euro)
10
Interest expense and similar items
20
Fee and commission expenses
30
Loss on financial transactions
40
Administrative expenses:
(a) personnel costs
31/12/2004
31/12/2003
2,426,488
2,717,608
316,247
335,064
0
24,434
1,566,521
1,375,892
585,552
549,451
- wages and salaries
430,868
403,068
- social security charges
125,445
118,072
- employees’ severance
29,239
28,311
980,969
826,441
of which:
(b) other administrative expenses
50
Write-downs of tangible
and intangible fixed assets
6,233
6,607
60
Other operating charges
3,129
12
80
Provisions to credit risk reserves
0
0
90
Write-downs of loans
665,146
635,000
110
Extraordinary charges
54,643
3,583
130
Income taxes for the year
1,638,395
1,297,301
140
Profit for the year
2,594,314
2,013,613
9,271,116
8,409,114
31/12/2004
31/12/2003
7,430,887
6,895,134
annexes 246
and provisions for guarantees and commitments
TOTAL COSTS
INCOME (amounts in Euro)
10
Interest income and similar items
of which:
- for factoring transactions
20
Dividends and other income
30
Fee and commission income
40
Profit on financial transactions
50
Write-backs of loans
70
Other operating income
80
Extraordinary income
(a) from shares, quotas and other floating rate securities
TOTAL INCOME
4,879,034
3,929,224
0
0
14,813
14,813
1,657,031
1,405,457
33
42,281
23,672
40,526
6,471
8,301
153,022
2,602
9,271,116
8,409,114
CLARIS FINANCE
70%
Legal Office: Via Eleonora Duse, 53 - 00197 ROMA
Share Capital Euro 10,000.00 fully paid-up
Member of the Register of Companies in Rome No. 07092851000
Member of R.E.A. in Rome No 1009707
Tax Code and VAT Number 07092851000
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
20
Loans to banks
(a) on demand
90
31/12/2004
31/12/2003
10,035
10,035
Intangibile fixed assets
10,032
10,032
1,261
1,891
of which:
1,261
1,891
20,418
19,803
TOTAL ASSETS
31,714
31,726
31/12/2004
31/12/2003
LIABILITIES (amounts in Euro)
10
Due to banks
(a) on demand
50
Other liabilities
80
Provisions for risks and charges
(b) provisions for taxation
0
0
24
24
21,576
21,159
138
543
138
543
120 Share capital
10,000
10,000
TOTAL LIABILITIES
31,714
31,726
31/12/2004
31/12/2003
PROFIT AND LOSS ACCOUNT
COSTS (amounts in Euro)
10
Interest expense and similar items
20
Fee and commission expenses
40
Administrative expenses:
(b) other administrative expenses
50
56,203
Write-downs of tangible and intangible fixed assets
130 Income taxes for the year
TOTAL COSTS
INCOME (amounts in Euro)
10
Interest income and similar items
70
Other operating income
80
Extraordinary income
TOTAL INCOME
7
76
56,203
110 Extraordinary charges
(a) income taxes for the year
0
60
52,091
52,091
630
630
0
11
138
138
543
543
57,031
53,358
31/12/2004
31/12/2003
132
160
56,626
53,132
273
66
57,031
53,358
annexes 247
- start-up costs
130 Other assets
100%
Legal Office: Via dei Da Prata, 14 - 31100 TREVISO
Share Capital Euro 20,000,000.00 fully paid-up
Member of the Register of Companies in Treviso No. 03598000267
Member of R.E.A. in Treviso No. 283753
VAT Number 03598000267
Tax Code 03598000267
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
10
Cash and balances
20
Loans to banks
40
Loans to customers
90
Intangibile fixed assets
31/12/2004
100 Tangible fixed assets
31/12/2003
3,541
3,212
0
166,368
4,183,341
2,162,961
77,806
101,943
362,325,420
306,052,748
of which:
- leased assets
- pending leased assets
323,472,181
annexes 248
130 Other assets
334,890
459,273
(b) prepayments
370,116
196,303
Due to banks
(a) on demand
(b) on maturity or with notice
(b) on maturity or with notice
376,470,928
347,484,645
31/12/2004
31/12/2003
330,090,065
236,336,127
79,394,510
69,193,478
7,089,193
716,090
6,373,103
6,061,734
Other liabilities
8,006,054
60
Accruals and deferred income
4,493,976
(b) deferred income
416,801
Provisions for risks and charges
1,218,198
28,146
4,348,565
1,396,316
(c) other provisions
2,952,249
140 Reserves
1,283,965
39,475
(b) dues and taxes
120 Share capital
9,716,839
65,767
4,077,175
Employees’ severance fund
6,797,602
735,868
50
(a) accrued expenses
305,529,605
250,695,555
Due to customers
(a) on demand
80
655,576
(a) accrued income
LIABILITIES (amounts in Euro)
70
38,341,837
705,006
TOTAL ASSETS
30
38,566,144
9,175,814
140 Prepayments and accrued income
10
267,377,921
38,756,799
3,533,598
548,570
2,985,028
20,000,000
20,000,000
394,890
0
0
-52,768
2,008,710
647,658
376,470,928
347,484,645
GUARANTEES AND COMMITMENTS (amounts in Euro)
31/12/2004
31/12/2003
20) Commitments
42,259,549
51,744,126
160 (Loss) brought forward
170 Profit (loss) for the year
TOTAL LIABILITIES
PROFIT AND LOSS ACCOUNT
COSTS (amounts in Euro)
10
Interest expense and similar items
20
Fee and commission expenses
40
Administrative expenses:
(a) personnel costs
31/12/2004
31/12/2003
8,158,823
7,871,916
70,369
58,584
1,582,837
1,240,910
739,635
654,073
- wages and salaries
527,852
462,662
- social security charges
150,916
138,345
- employees’ severance
(b) other administrative expenses
50
17,300
15,925
843,202
586,837
Write-downs of tangible and intangible fixed assets
70,448,360
52,007,263
of which:
- on leased assets
60
Other operating charges
70
90
70,363,230
51,930,146
449,164
338,007
Provisions to credit risk reserves
40,132
1,469,561
Write-downs of loans
49,599
140,365
110 Extraordinary charges
14,143
28,780
130 Income taxes for the year
1,396,128
550,755
140 Profit for the year
2,008,710
647,658
TOTAL COSTS
84,218,265
64,353,799
INCOME (amounts in Euro)
31/12/2004
31/12/2003
10
Interest income and similar items
276,340
715,050
30
Fee and commission income
290,596
262,991
50
Write-backs of loans
70
Other operating income
0
18,000
83,636,185
63,357,130
of which:
- rentals for leased assets
- income for end of financial leasing
80
Extraordinary income
TOTAL INCOME
82,788,531
62,776,766
201,829
140,184
15,144
628
84,218,265
64,353,799
annexes 249
of which:
IMMOBILIARE ITALO ROMENA
100%
Legal Office: B.dul Dimitrie Cantemir, 1 - Bucarest (Romania)
Share Capital ROL 2.500.000.000 fully paid-up
Company number No. 14673082
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
(amounts in Euro, exchange rate 39,663 ROL / 1 Euro as at 31 December 2004) (10)
BALANCE SHEET
annexes 250
ASSETS
A) Credits towards Shareholders for deposits still due
B) Fixed assets:
I Intangible fixed assets
II Tangible fixed assets:
- Lands
- Facilities
- work in progress
- Advances on suppliers’ invoices
II Total tangible fixed assets
III Financial fixed assets
B) Total fixed assets
C) Working capital:
I Stocks
II Loans:
- input VAT
- interests receivable
II Total loans
III Liquid assets
- bank and postal deposits
(a) in Lei
(b) in currency
- Money and cash securities
(a) in Lei
III Total liquid assets
C) Total working capital
D) Accruals and payables
TOTAL ASSETS
31/12/2004
31/12/2003
0
0
0
0
34,402
2,057,075
3,935
2,067
2,097,479
0
2,097,479
32,613
0
0
0
308,549
56
308,605
6,473
0
6,473
99,304
3
99,301
25
25
99,329
407,934
7,940
42,876
2,513,353
81,987
32,613
0
32,613
42,876
25
25
42,901
49,374
0
(10) In order to allow a comparison with the figures of the previous financial year, data as at 31 December 2003 were recalculated taking into account
the exchange rate as at 31 December 2004.
31/12/2004
31/12/2003
A) Shareholders’ equity:
I
- Share capital
II - Issue premiums
III - Revaluation reserves
IV - Legal reserve
V - Reserve for own equity shares in portfolio
VI - Statutory reserves
VII - Other reserves
VIII - Profit (loss) brought forward
IX - Profit for the year
A) Total shareholders’ equity
B) Provisions for risks and charges
C) Employees’ severance fund
D) Debts:
- due to banks
- due to suppliers
- fiscal (income tax)
- other debts
(a) to Shareholders
(b) miscellany
D) Total debts
E) Accruals and payables
63,031
0
0
805
0
0
0
14,779
17,541
96,156
0
0
63,031
0
0
564
0
0
0
10,721
4,807
79,123
0
0
2,303,963
2,314
5,408
105,512
101,125
4,387
2,417,197
0
0
1,565
105
1,195
1,166
29
2,864
0
TOTAL LIABILITIES
2,513,353
81,987
31/12/2004
31/12/2003
0
0
0
8,678
1
1,437
0
3,316
3,920
4
8,678
- 8,678
0
2,398
5
0
3
144
2,246
0
2,398
- 2,398
1,346
45,704
14,091
1,276
31,683
0
23,005
5,464
898
6,654
0
233
7,318
0
4,920
113
17,541
4,807
PROFIT AND LOSS ACCOUNT
A) Production value
B) Production costs
1) Operating management costs
2) General expenses
a) bank charges and similar
b) commissions and fees
c) transportation expenses
d) other taxes and dues
e) miscell. services
f) altri oneri di gestione
B) Total production costs
Difference between production value and costs (A - B)
C) Financial charges and profits
1) interest receivable
2) profit on exchange rates
3) interest expense
4) losses on exchange rates
C) Total profits and financial charges
D) Extraordinary entries
Total profits before taxes (A-B+C+D)
E) Income taxes
PROFIT FOR THE YEAR
annexes 251
LIABILITIES
100%
Legal Office: I.F.S.C. – 1 North Wall Quay - Dublino 1 (Ireland)
Share capital Euro 1,000,000.00 fully paid-up
Company number No. 313843
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
30
Loans to banks:
annexes 252
(a) on demand
40
Loans to customers
50
Bonds and other debt securities
60
Shares, quotas and other equity securities
70
Equity investments
90
Intangibile fixed assets
100
Tangible fixed assets
130
Other assets
140
Prepayments and accrued income:
(a) accrued income
2,402,239
2,402,239
(b) prepayments
TOTAL ASSETS
LIABILITIES (amounts in Euro)
10
Due to banks
(a) on demand
(b) on maturity or with notice
30
Securities issued:
50
Other liabilities
60
Accruals and deferred income:
(a) bonds
(a) accrued expenses
(b) deferred income
80
Provisions for risks and charges:
120
Share capital
140
Reserves:
(b) provisions for taxation
31/12/2003 (11)
31/12/2004
351,585
351,585
13,000,000
13,000,000
450,913,528
346,383,390
10,875,520
11,554,362
0
0
7,014
6,057
50,502
66,362
36,345,609
44,943,684
8,260,685
4,456,102
7,997,497
3,933,043
263,188
523,059
521,855,097
420,761,542
31/12/2004
31/12/2003
236,087,108
0
133,717,073
3,540,884
236,087,108
130,176,189
127,000,000
127,000,000
127,000,000
127,000,000
22,462,199
25,678,701
7,509,773
7,209,773
4,417,022
4,067,022
300,000
350,000
517,275
517,275
885,388
885,388
1,001,000
1,001,000
126,000,000
126,000,000
(a) legal reserve
(b) reserve for own equity shares or quotas
(c) statutory reserves
(d) other reserves
170
Profit for the year
TOTAL LIABILITIES
126,000,000
126,000,000
1,277,742
2,062,358
521,855,097
420,761,542
(11) In order to allow a comparison with the figures of the previous financial year, balance sheet’s data as at 31 December 2003 were recalculated.
GUARANTEES AND COMMITMENTS (amounts in Euro)
31/12/2004
31/12/2003
10
Guarantees provided
0
0
20
Commitments
0
98,598,354
of which
- for sale with repurchase operation
0
98,598,354
PROFIT AND LOSS ACCOUNT (amounts in Euro)
31/12/2004
31/12/2003 (12)
10
17,686,385
14,642,688
Interest income and similar items
of which:
- on amounts due from customers
- on debt securities
20
436,679
498,093
16,509,490
13,604,501
Interest expense and similar items
8,076,521
4,505,314
of which:
- on amounts due to customers
30
2,540,019
Dividends and other income:
(a) from shares, quotas and other equity securities
2,540,000
71,882
71,882
198,048
198,048
(b) from equity investments
(c) from equity investments in Group companies
40
Fee and commission income
50
Fee and commission expenses
60
Profit on financial transactions
3,830,043
5,115,565
80
Administrative expenses:
1,217,972
1,474,440
(a) personnel costs
50,000
50,000
7,434
4,560
564,933
851,964
497,508
758,402
51,190
77,965
of which:
- wages and salaries
- social security charges
- employees’ severance
- pensions and similar benefits
(b) other administrative expenses
0
0
16,235
15,597
653,039
622,476
90
Write-downs of tangible and intangible fixed assets
170
Profit on ordinary activities
180
Extraordinary income
190
200
220
Income taxes for the year
1,754,892
1,668,839
230
Profit for the year
11,277,742
11,362,358
Interim dividends
10,000,000
9,300,000
Profit for the year
1,277,742
2,062,358
230
24,172
20,566
12,312,211
14,001,421
907,397
1,029,776
Extraordinary charges
186,974
2,000,000
Extraordinary profit
720,423
970,224
(12) In order to allow a comparison with the figures of the previous financial year, profit and loss account’s data as at 31 December 2003 were
recalculated.
annexes 253
- on securities issued
ANNEX H: FINANCIAL STATEMENTS OF SUBSIDIARIES
20%
Legal Office: Via Carnia, 26 - 20132 Milano
Share Capital Euro 39,000,000 fully paid-up
Member of the Register of Companies in Milan No. 08084500589
Member of R.E.A. di Milan No. 1295872
VAT Number 09493200159 - Tax Code 08084500589
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
annexes 254
BALANCE SHEET
ASSETS (amounts in Euro)
31/12/2004
A. CREDIT TOWARDS SHAREHOLDERS FOR SUBSCRIBED CAPITAL
B. INTANGIBLE ASSETS
1. Acquisition charges to depreciate
a) life business
3. Start-up and expansion costs
5. Other deferred costs
C. INVESTMENTS
I - Lands and facilities
1. Facilities used by the Company
11,436,595
II - Investments in companies of the Group and in other controlled companies
1. Shares and quotas
b) controlled
10,000
2. Bonds issued by companies
d) affiliates
55,285,112
III - Other financial investments
2. Investment trust shares
18,098,060
3. Bonds and other fixed income securities
716,259,151
a) listed
707,797,388
b) unlisted
8,461,763
4. Loans
a) loans with tangible security
7,932
b) loans on policies
5,722,735
c) other loans
71,010
7. Various financial investments
D. INVESTMENTS IN FAVOUR OF INSURED PARTIES IN THE
LIFE BUSINESS WHO ACCEPT THE RISK AND RESULTING
FROM THE PENSION FUND MANAGEMENT
I - Investments concerning services linked to
investment funds and market indexes
II - Investments resulting from pension fund management
D bis ACTUARIAL RESERVES TO THE CHARGE OF REINSURERS
I - NON-LIFE BUSINESS
1. Premium reserve
II - LIFE BUSINESS
1. Actuarial reserves
3. Reserves for amounts to pay
E. LOANS
I - Loans resulting from direct insurance transactions, to:
1. Insured parties
a) for premiums of the financial year
22,006,909
b) for premiums of previous financial years
772,434
2. Insurance brokers
II - Loans resulting from reinsurance transactions to:
1. Insurance and reinsurance companies
III - Other loans
F. OTHER ASSETS
I - Material and stock assets
1. Furniture, office machinery and internal means of transportation
2. Real estate entered in public registers
3. Fixtures and equipment
II - Liquid assets
1. Bank deposits and postal current accounts
2. Checks and cash holdings
IV - Other assets
2. Various assets
G. ACCRUALS AND PAYABLES
1. For interests
2. For rentals
3. Other accruals and payables
0
13,263,970
TOTAL ASSET
12,268,512
12,268,512
7,709
987,749
820,489,105
11,436,595
55,295,112
10,000
55,285,112
753,757,398
5,801,677
13,598,510
397,987,232
397,712,512
274,720
259,577,566
6,319
6,319
259,571,247
256,430,993
3,140,254
87,700,239
45,427,217
22,779,343
22,647,874
17,358,285
17,358,285
24,914,737
10,986,725
1,533,297
1,198,505
75,699
259,093
1,297,875
1,296,783
1,092
8,155,553
8,155,553
16,263,731
14,089,226
530
2,176,975
1,606,268,568
LIABILITIES AND SHAREHOLDERS’ EQUITY (amounts in Euro)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
GUARANTEES AND COMMITMENTS (amounts in Euro)
- Guarantees received
1. Guarantees
IV - Commitments
VII - Securities lodged with third parties
VIII - Other memorandum accounts
52,414,196
39,000,000
0
0
2,865,887
295,654
0
3,302,625
5,273,946
1,676,084
13,000,000
857,452,222
8,444
7,708
736
857,443,778
831,905,333
729,322
13,005,677
11,803,446
397,987,232
397,712,512
274,720
2,073,841
1,773,841
300,000
242,054,477
41,275,198
2,718,775
2,718,775
6,360,593
6,360,593
11,049,008
1,083,047
1,842,931
81,707
529,615
274,585
957,024
18,220,844
3,446,627
14,774,217
11,402
11,402
1,606,268,568
31/12/2004
II
77,960
803,240,833
1,291,142
annexes 255
A. SHAREHOLDERS’ EQUITY
I - Subscribed share capital or equivalent fund
II - Issue premiums
III - Revaluation reserves
IV - Legal reserve
V - Statutory reserves
VI - Reserves for own equity shares and shares of the Controlling Company
VII - Other reserves
VIII - Profit (loss) brought forward
IX - Profit (loss) for the year
B. SUBORDINATED LIABILITIES
C. ACTUARIAL RESERVES
I - NON-LIFE BUSINESS
1. Premium reserve
4. Other actual reserves
II - LIFE BUSINESS
1. Actuarial reserves
2. Complementary insurance premium reserve
3. Reserve for amounts to pay
5. Other actuarial reserves
D. ACTUARIAL RESERVES WHEN THE INVESTMENT RISK IS TAKEN
BY THE INSURED PARTIES AND RESERVES RESULTING
FROM PENSION FUND MANAGEMENT
I - Reserves concerning contracts which services are
linked to investment funds and market indexes
II - Reserves resulting from pension fund management
E. RISK AND CHARGE PROVISIONS
2. Tax provisions
3. Other provisions
F. DEPOSITS RECEIVED BY REINSURERS
G. DEBTS AND OTHER LIABILITIES
I - Debts resulting from transactions of direct insurance, to:
1. Insurance brokers
II - Debts resulting from reinsurance transactions to:
1. Insurance and reinsurance companies
VI - Various loans and other financial liabilities
VII - Employees‘ severance
VIII - Other debts
1. For taxes to the charge of the insured parties
2. For various fiscal burdens
3. To welfare and social security institutes
4. Various debts
IX - Other liabilities
2. Charges for premiums being collected
3. Various liabilities
H. ACCRUALS AND PAYABLES
1. For interests
31/12/2004
PROFIT AND LOSS ACCOUNT
I.
31/12/2004
TECHNICAL ACCOUNT OF NON-LIFE BUSINESS
1. FINANCIAL YEAR PREMIUMS, NET OF REINSURANCE TRANSFER
- 256
a) Before tax recorded premiums
10,321
b) (–) Reinsurance trasferred premiums
c) Changes in gross premium reserve
9,188
7,708
d) Changes in gross reinsurance premium reserve
6,319
3. OTHER TECHNICAL INCOME, NET OF REINSURANCE TRANSFERS
663
5. CHANGES OF OTHER WARRANTY RESERVES, NET OF
REINSURANCE TRANSFERS
-736
7. OPERATING CHARGES
65,234
a) Acquisition charges
2,140
e) Other administrative expenses
66,062
f) (-) Charges and profit sharings received from reinsurers
2,968
8. OTHER TECHNICAL CHARGES, NET OF REINSURANCE TRANSFERS
265
10. RESULT OF NON-LIFE BUSINESSES TECHNICAL ACCOUNT
- 65,828
II. TECHNICAL ACCOUNT OF LIFE BUSINESSES
annexes 256
1. FINANCIAL YEAR PREMIUMS, NET OF REINSURANCE TRANSFER
245,258,035
a) Before tax recorded premiums
281,753,074
b) (–) Reinsurance trasferred premiums
36,495,039
2. INVESTMENT INCOME
37,914,562
b) Income resulting from other investments
bb) from other investments
35,334,811
35,334,811
c) Write-backs on write-downs on investments
101,760
d) Profits on investment gains
2,477,991
3. INCOME AND CAPITAL GAINS NOT COLLECTED CONCERNING
INVESTMENTS IN FAVOUR OF INSURED PARTIES
WHO ASSUME THE RISK AND INVESTMENTS RESULTING
FROM THE PENSION FUND MANAGEMENT
21,203,327
4. OTHER TECHNICAL INCOME, NET OF REINSURANCE TRANSFERS
6,523,944
5. CHARGES CONCERNING DAMAGES, NET OF REINSURANCE TRANSFERS
112,482,226
a) Amounts paid
aa) Amount before tax
bb) (-) Amounts to be paid by reinsurers
110,520,426
134,589,680
24,069,254
b) Change of reserve for amounts to be paid
1,961,800
aa) Gross amount
1,408,096
bb) (-) Amounts to be paid by reinsurers
- 553,704
6. CHANGES OF ACTUARIAL RESERVES AND OTHER WARRANTY RESERVES
NET OF REINSURANCE TRANSFERS
151,550,533
a) Actuarial reserves
aa) Gross amount
bb) (-)Amounts to be paid by reinsurers
84,219,506
93,922,352
9,702,846
b) Complementary insurance premium reserve
aa) Gross amount
- 35,793
- 35,793
c) Other actuarial reserves
aa) Gross amount
526,998
526,998
d) Actuarial reserves when the investment risk is assumed by the insured
parties and resulting from pension fund management
aa) Gross amount
66,839,822
66,839,822
PROFIT AND LOSS ACCOUNT
31/12/2004
7. TRANSFERS AND PROFIT SHARINGS, NET OF REINSURANCE TRANSFERS
0
8. OPERATING CHARGES
a) Acquisition charges
b) Other acquisition expenses
c) Changes in charges an other acquisition expenses
d) Collection charges
e) Other administrative expenses
f) (-) Charges and profit sharings received from reinsurers
22,045,809
11,477,165
4,163,045
9,359
3,493,108
10,542,532
7,620,682
9. SHAREHOLDERS’ EQUITY AND FINANCIAL CHARGES
a) Investment and interest due management charges
b) Write-downs on investments
c) Losses on investment gains
15,808,399
14,300,542
505,330
1,002,527
10. SHAREHOLDERS’ EQUITY AND FINANCIAL CHARGES AND CAPITAL
LOSSES NOT COLLECTED CONCERNING INVESTMENTS IN FAVOUR
OF INSURED PARTIES WHO ASSUME THE RISK AND INVESTMENTS
RESULTING FROM PENSION FUND MANAGEMENT
2,643,865
11. OTHER TECHNICAL CHARGES, NET OF REINSURANCE TRANSFERS
4,135,690
NON-TECHNICAL ACCOUNT (ITEM III.4)
0
13. RESULT OF LIFE BUSINESSES TECHNICAL ACCOUNT (ITEM III.2)
2,233,346
III. NON-TECHNICAL ACCOUNT
1. Result of non life businesses technical account (item I.10)
2. Result of life businesses technical account (item II.13)
- 65,828
2,233,346
7. Other income
546,537
8. Other charges
1,631,506
9. Result from ordinary activities
1,082,549
10. Extraordinary income
10,441,687
11. Extraordinary charges
8,057,129
12. Result from extraordinary activities
2,384,558
13. Result before taxes
3,467,107
14 Taxes on the profits of the financial year
1,791,023
15. PROFIT FOR THE YEAR
1,676,084
annexes 257
12. SHARE OF INVESTMENT PROFITS TRASFERRED TO THE
PALLADIO FINANZIARIA
21,212%
Legal Office: Strada St. Padana verso Verona, 6 - 36100 VICENZA
Share Capital Euro 13,305,762.00 fully paid-up
Member of the Register of Companies in Vicenza No. 02747200240
Member of R.E.A. in Vicenza No. 272288
Tax Code and VAT Number 02747200240
CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro thousand)
10
20
Cash and balances
Loans to banks
annexes 258
a) on demand
30
Loans to financial institutions
40
Loans to customers
50
Bonds and other fixed income securities
7,750
Equity investments
a) valued by the equity method
b) other
80
Equity investments in Group companies
90
Positive consolidation differences
5
18,144
18,144
0
1,141
69,063
30,090
30,262
d) issued by others
70
1
48,246
22,512
Shares, quotas and other floating rate securities
31/12/2003
48,246
b) issued by banks
60
31/12/2004
45,502
36,536
8,966
14,172
19,433
42,371
8,646
54,314
11,985
33,725
42,329
9,772
110 Intangibile fixed assets
9,545
0
462
1,198
1,012
of which:
- start-up costs
551
- goodwill
124
120 Tangible fixed assets
150 Other assets
160 Prepayments and accrued income:
(a) accrued income
(b) prepayments
TOTAL ASSETS
115
207
417
365
6,973
12,657
512
223
417
83
95
140
222,987
192,893
10
Due to banks:
(a) on demand
(b) on maturity or with notice
50
Other liabilities
60
Accruals and deferred income:
31/12/2004
31/12/2003
36,000
53,514
36,000
24,277
0
29,237
4,005
2,298
222
409
(a) accrued expenses
43
226
(b) deferred income
179
183
70
Employees’ severance fund
80
Provisions for risks and charges:
(b) provisions for taxation
(c) other provisions
608
566
1,187
2,945
0
2,555
1,187
390
100 General financial risk provision
568
568
120 Negative differences arising from shareholders’ equity
- 18
20,833
140 Minority interests
43
33,243
150 Share capital
13,306
31
160 Issue premium
78,641
59,372
170 Reserves:
65,882
13,588
a) legal reserve
b) other reserves
190 Profit brought forward
200 Profit for the year
TOTAL LIABILITIES
6
6
65,876
13,582
7,411
0
15,132
5,526
222,987
192,893
annexes 259
LIABILITIES (amounts in Euro thousand)
annexes 260
GUARANTEES AND COMMITMENTS (amounts in Euro thousand)
10
Guarantees provided
20
Commitments
31/12/2004
31/12/2003
10,348
2,795
6,204
8,468
PROFIT AND LOSS ACCOUNT
COSTS (amounts in Euro thousand)
31/12/2004
31/12/2003
1,364
1,472
10
Interest expense and similar items
20
Fee and commission expenses
0
18
30
Loss on financial transactions
0
0
40
Administrative expenses:
(a) personnel costs
7,593
6,454
2,640
2,507
1,836
1,734
of which:
- social security charges
666
642
- employees’ severance
138
131
(b) other administrative expenses
4,953
3,947
50
Write-downs of tangible and intangible fixed assets
583
60
Other operating charges
0
33
70
Provisions for risks and charges
1,057
175
80
Provisions to credit risk reserves
75
3
100 Write-downs of financial fixed assets
1
18
110 Loss attributable to equity investments valued by the equity method
517
3,513
3,704
120 Extraordinary charges
133
620
140 Income taxes for the year
835
1,948
16
1,827
160 Profit for the year
15,132
5,526
TOTAL COSTS
30,302
22,315
31/12/2004
31/12/2003
150 Third-party profit of the year
INCOME (amounts in thousand of Euro)
10
Interest income and similar items
3,995
2,479
20
Dividends and other income
9,497
930
a)
from shares, quotas and other floating rate securities
b) from equity investments in Group companies
882
559
8,615
371
30
Fee and commission income
4,985
1,859
40
Profit on financial transactions
1,185
3,059
70
Other operating income
10,011
8,814
80
Profit attributable to equity investments valued by the equity method
609
3,037
90
Extraordinary income
20
2,131
120 Third-party operating loss
0
6
30,302
22,315
TOTAL INCOME
annexes 261
- wages and salaries
SERVIZI INTERNAZIONALI E STRUTTURE INTEGRATE 2000
33.333%
Legal Office: Via Andrea Doria, 31 - 20124 MILANO
Share Capital Euro 75.000,00 fully paid-up
Member of the Register of Companies in Milan No. 02629300365
Member of R.E.A. in Milan No 1613221
VAT Number 13291210154
Tax Code 02629300365
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2004
BALANCE SHEET
ASSETS (amounts in Euro)
31/12/2004
31/12/2003
0
0
1) Intangibile fixed assets
85,728
85,314
2) amortisation
76,123
60,154
9,605
25,161
1) Tangible fixed assets
38,027
33,646
2) depreciation
23,087
18,379
14,940
15,267
0
0
24,545
40,427
0
0
A) Credit towards Shareholders for deposits still due
B) Fixed assets
I
I
Intangible fixed assets:
Total intangible fixed assets
annexes 262
II Tangible fixed assets:
II Total tangible fixed assets
III Financial fixed assets
B) Total fixed assets
C) Working capital:
I
Stocks
II Loans:
1) within 12 months
2) over 12 months
II Total loans
III Financial assets not considered as fixed assets
48,080
12,607
9,495
11,005
57,575
23,612
0
0
IV Liquid assets
208,727
291,200
C) Total working capital
266,302
314,812
D) Accruals and payables
65,345
76,479
356,192
431,718
TOTAL ASSETS
LIABILITIES (amounts in Euro)
31/12/2004
31/12/2003
75,000
75,000
I
- Share capital
II
- Issue premiums
0
0
III - Revaluation reserves
0
0
IV - Legal reserve
0
0
V
0
0
- Reserve for own equity shares in portfolio
VI - Statutory reserves
VII - Other reserves
VIII - Profit (loss) brought forward
0
0
101,901
185,924
0
0
-81,286
-84,022
95,615
176,901
0
0
C) Employees’ severance fund
51,043
40,023
D) Debts:
38,345
54,347
IX - Profit (loss) for the year
A) Total shareholders’ equity
B) Provisions for risks and charges
1) within 12 months
38,345
54,347
38,345
54,347
E) Accruals and payables
171,189
160,447
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
356,192
431,718
31/12/2004
31/12/2003
0
0
4,390
4,390
RISKS – COMMITMENTS
4,390
4,390
TOTAL MEMORANDUM ACCOUNTS
4,390
4,390
D) Total debts
MEMORANDUM ACCOUNTS (amounts in Euro)
I)
Guarantees provided
II) Other memorandum accounts – risks – commitments
c)
Other memorandum and contra accounts
TOTAL OTHER MEMORANDUM ACCOUNTS –
annexes 263
A) Shareholders’ equity:
PROFIT AND LOSS ACCOUNT (amounts in Euro)
31/12/2004
31/12/2003
615,382
614,158
A) Production value
1) Sale and service profits
5) Other profits and earnings
22,174
0
637,555
614,158
7) for services
236,703
218,044
8) for payment of third-party assets
142,864
142,900
236,205
248,204
41,801
34,005
A) Total production value
B) Production costs
9) for the staff
a) wages and salaries
b) social security charges
c) employees’ severance
11,143
10,649
289,149
292,858
a) intangible fixed asset amortisation
10,101
10,018
b) tangible fixed asset depreciation
11,247
11,538
21,347
21,556
Total for the staff
10) amortisations, depreciations and write-downs
Total amortisations, depreciations and write-downs
14) other operating charges
annexes 264
14,284
15,098
B) Total production costs
704,348
690,456
Difference between production value and costs (A - B)
- 66,793
- 76,298
3,508
4,040
C) Financial charges and profits:
16) other financial profits
d) profits in addition to the previous ones
d4) from others
17) interests and other financial charges
d) from others
17-bis) Profit and losses on exchange rates
C) Total profits and financial charges
D) Total financial asset write-downs
E)
1,948
1,945
- 6,271
- 417
- 4,712
1,678
0
0
Extraordinary income
20) Extraordinary income
b) other Extraordinary income
E) Total extraordinary entries
Total profits before taxes (A-B+C+D+E)
22) Income taxes for the year
23) Profit (loss) for the year
0
1
0
1
- 71,504
- 74,620
9,782
9,402
- 81,286
- 84,022
S TAT U T O R Y
AUDITORS’ REPORT
"Chioggia, citta di marinanti"
Marco Pagin - Branch of Villorba (TV)
STATUTORY AUDITORS’ REPORT
Dear Shareholders,
Legislative Decree no. 6 of 17 January 2003, – revised and amended by Legislative
Decree no. 37 of 6 February 2004 and no. 310 of 28 December 2004 - pertaining
to the reform of company law and the consolidated act for banking and credit
activities (testo unico), has introduced substantial modifications regarding the
responsibilities of the Board of Statutory Auditors of unlisted corporations.
Under the new regulation, the responsibility for accounting controls and audit of the
individual and consolidated financial statements are to be entrusted - for companies
such as your company which are required to prepare consolidated financial
statements and which access the capital markets - to independent auditors.
statutory auditors’ report 266
Beginning with the 2004 financial year, the duties of the Board of Statutory
Auditors include the responsibilities previously assigned, to which are now added
those indicated in the above Legislative Decree.
As a result, our activity complies, in close collaboration with the independent
auditors, to the new laws on the subject and, in particular, to the requirements of
the revised article 2429 of the Italian civil code concerning the information that
the Statutory Board of Auditors must furnish to the Shareholders’ Meeting
regarding the financial statements and the report on operations.
For that purpose, we report that we participated in meeting no. 13 of the Board
of Directors and no. 35 of the Executive Board, during the 2004 financial year, to
ensure that transactions of major significance determined and carried out in
relation to the business, financing and assets of the Company - including those
through subsidiaries - conformed to the law and to Company By-laws. We also
confirm that these transactions could not be considered imprudent, in nonconformity to the Company purpose, causing conflicts of interest or in any way
compromising to the integrity of the Company’s assets.
With the standard periodic reviews - required under article 2404 of the Italian
civil code - carried out during meeting no. 23 of the Board of Statutory Auditors,
we reviewed - to the extent that it falls within our responsibility - the adequacy
of the Bank’s organisational structure and its principles of corporate governance.
For that purpose, information was gathered directly from both line managers and
senior management, and meetings were held with the independent auditors for
the purpose of reciprocal exchange and comparison of relevant information.
We reviewed and evaluated the adequacy of internal audit controls, of management
accounting systems, and the reliability of the latter in correctly recording and
representing operational activity by the examination of the periodic reports of
Internal Audit, procurement of information from relevant department heads and
the analysis of work undertaken periodically by the independent auditors.
The activity of inspection and verification described above revealed no significant
failings, inefficiencies or irregularities or which require specific mention at the Meeting
or notification to any supervisory body. Similarly, none of the Directors or senior
management is revealed to have committed any acts or behaviour requiring disciplinary
measures or which constitute violations of the law or the Company By-laws.
During the last financial year, we did not receive any declaration or notification
from Shareholders of acts requiring disciplinary measures under article 2408 of
the Italian civil code.
Regarding the financial period closed 31 December 2004 and the accompanying
report of the Board of Directors, we have verified and confirm correct compliance
with the law concerning the application of principles of preparation of those
documents and we further attest that the Directors have not taken recourse to the
exception provided under comma 4 of article 2423 of the Italian civil code.
The Company’s results reported in the balance sheet and profit and loss account
are shown in summary below:
Balance sheet (amounts in Euro thousand)
Total assets
Liabilities
Shareholders’ equity
Profit for the year
5,526,976
4,717,611
763,707
45,658
Profit on ordinary activity
Profit on extraordinary activity
Profit before taxes
Tax on profits
60,479
32,969
60,448
14,790
Profit for the year
45,658
For the areas under their review, the independent auditors, PricewaterhouseCoopers
spa, have not yet filed, at the moment of the writing of this letter, its report on the
financial statements, having already informed the Board of Statutory Auditors
informally that they have no issues of significance to report. It will, in any case,
be our responsibility to inform you of the contents of the report of the
independent auditors at the Shareholders’ Meeting.
We have also paid special attention to the correctness of corporate and
commercial management practices of the Parent Company in its administration
and coordination of subsidiaries, considering the potential for responsibilities
to arise on the part of Veneto Banca toward the Shareholders and creditors of
those companies due to the new regulations contained in article 2497 of the
Italian civil code.
Based on the present report, we ask you to approve the 2004 financial statements
as presented, in addition to the allocation of the profit for the year of Euro
45,658,170.71 as proposed by the Board of Directors and, in particular, to the
distribution of a dividend in the amount of Euro 18,085,120.90, equal to Euro 0.55
per share, which is in compliance with articles 2426 no. 5 and 2433 of the Italian
civil code and compatible with the financial and business condition of your
Company.
Montebelluna, 6 April 2005
Board of Statutory Auditors
Dr. Fanio Fanti
Dr. Michele Stiz
Dr. Diego Xausa
statutory auditors’ report 267
Profit and loss account (amounts in Euro thousand)
INDEPENDENT
AUDITORS’ REPORT
"Asolo"
Massimiliano Porcelli - Branch of Sernaglia della Battaglia (TV)
indipendent auditors’ report 271
MEETING REPORT
AND RESOLUTIONS
The Chairman of the Board of Directors, Dr. Flavio Trinca, chaired the meeting,
Notary Dr. Paolo Talice was appointed as secretary and Messrs Bonora Stefano,
Bresolin Maurizio, Curto Loris, Dussin Ivano, Frare Giancarlo, Miazzo Riccardo,
Michielin Lino, Monesi Davide, Pesce Angelo, Poloniato Tomaso, Pontello
Giuliano and Tesser Tiziana were appointed as tellers.
Number of Shareholders attending the meeting: 1,772; represented with power
of attorney: 749;
Total number of Shareholders: 2,521.
The meeting was opened and the following was discussed:
• approval of the reports of the Board of Directors, the Board of Statutory
Auditors and the financial statements 2004;
• calculation of attendance fees to be paid to the Directors for FY 2005;
meeting report and resolutions 272
• determination of emoluments for the Statutory Auditors for the three-year
period 2005/2007;
• re-election of three Directors for the three-year period 2005/2007;
• appointment of the Chairman of the Board of Statutory Auditors, two
Auditors and two Alternate Auditors for the three-year period 2005/2007;
• re-election of three Arbitrators and two Alternate Arbitrators for the threeyear period 2005/2007.
THE COMMERCIAL
NETWORK
"Treviso in festa"
Luca Menegoni - Branch of Riese Pio X (TV)
THE COMMERCIAL NETWORK
LEGAL HEADQUARTERS
Montebelluna (TV) – Piazza G. B. Dall’Armi, 1
HEAD OFFICES
Montebelluna (TV) – Via Feltrina Sud, 250
tel. +39 0423 283.1 - telefax +39 0423 283700
the commercial network 274
BRANCHES
Belluno (2)
Alano di Piave
Feltre
(No. 100)
Via Don Pietro Codemo, 8
Via Marconi, 1
Padova (5)
Cittadella
Mestrino
Padova
Padova (Ag. 2)
San Martino di Lupari
Borgo Bassano, 39
Via IV Novembre, 36 bis
Via Lisbona, 6
Riviera Tito Livio, 18/3
Viale Europa, 25
Pordenone (6)
Azzano Decimo
Maniago
Pordenone
Porcia
Prata di Pordenone
Sacile
Piazza Libertà, 65
Via Umberto I, 8
Via Oberdan, 22
Via Colombera, 2
Via Roma, 78
Largo San Liberale, 10
Milano (1)
Milano
Via della Posta, 8/10
Roma (1)
Roma
Largo P. Vassalletto, 4
Treviso (70)
Altivole
Arcade
Asolo
Asolo
Borso del Grappa
Breda di Piave
Caerano di San Marco
Cappella Maggiore
Casale sul Sile
Castelcucco
Castelfranco Veneto
Castelfranco V.to (Ag. 1)
Cavaso del Tomba
Chiarano
Cimadolmo
Conegliano (Ag. 1)
Conegliano
Cordignano
Cornuda
Crespano del Grappa
Crocetta del Montello
Farra di Soligo
Fonte
Gaiarine
Gaiarine
Godega S. Urbano
Gorgo al Monticano
Mansuè
Maser
Maserada
Maserada
Via Laguna, 28/b
Via Cal Longa, 1
fraz. Casella - Via Giorgione, 7/a
Via Regina Cornaro, 212
Via Piave, 2
fraz. Pero - Via G. Garibaldi, 19
Via J. Kennedy, 1
Via Fiume, 15/17
Via Vittorio Veneto, 13
Via Papa Giovanni, 20
Via S. Pio X, 49
Via Borgo Treviso, 129/b
Via Guglielmo Marconi
fraz. Fossalta Maggiore - Piazza Europa, 18/20
Via Giuseppe Mazzini, 8
Corso Mazzini, 7
Via Friuli, 8
Via Isonzo, 14
Piazza Giovanni XXIII, 40
Piazza S. Marco, 15
Via Erizzo, 4/5
fraz. Col San Martino - Borgo S. Martino, 20
fraz. Onè - Via Roma, 7
fraz. Albina - Via Roncat, 9
fraz. Francenigo - Via dei Fracassi, 67
fraz. Bibano - Via Guglielmo Marconi, 8/a
Via G. Marconi ang. Via Postumia Centro
Piazza San Tiziano, 22
Piazza Roma, 6
fraz. Candelù - Via G. Puccini, 2
fraz. Varago - Via Trevisana, 59
Via Marconi, 51
Piazza G.B. Dall’Armi, 1
fraz. Biadene - Via Feltrina Centro, 145
fraz. Guarda - Piazza Vienna, 1/13
fraz. San Gaetano - Via San Gaetano, 171
Piazza G.B. Dall’Armi, 1
Piazzale Carlo Conte, 16
Via Riva al Monticano, 8
Piazzale Berti, 4
Via Degli Alpini, 12
fraz. Postioma - Via Europa Unita, 3
Via Pravato Liberato, 4
fraz. Onigo di Piave - Viale Europa, 3
Via Roma, 90/B-C
Via Gaetano Schiratti, 131
fraz. Negrisia - Via Chiesa, 65
fraz. Paderno - Via Barbaro, 5
Piazza Vittoria, 1
Via Castellana, 4
Via Roma, 103
Via Roma, 127/A
Via Postumia Centro, 160
Viale della Repubblica, 5
Via Francesco Crispi, 5
Via Emigranti, 4
Via Don Minzoni, 6/b
fraz. Lovadina - Via Lovarini, 37
fraz. Ponte della Priula - Via 1° Maggio, 3
Via Giacomo Puccini, 2
fraz. Santa Bona - Via Santa Bona Vecchia, 34
Piazzetta dei Lombardi
Viale Nino Bixio, 1
Via Celestino Piva, 55
Piazza Vittorio Emanuele, 45/47
fraz. Albaredo - Piazza XXIV Maggio, 12
Via Roma, 123
Via Divisione Nannetti, 47
Via Schiavonesca Nuova, 101
Via Noalese, 21/i
Udine (1)
Udine
Piazza Garibaldi, 21
Venezia (4)
Mestre
San Donà di Piave
Spinea
Venezia
Via Luigi Einaudi, 56
Corso Trentin, 76
Viale Viareggio, 34
San Marco 4233 - Campo Manin
Verona (1)
Verona
Via E. Salgari, 9
Vicenza (9)
Cassola
Lonigo
Sandrigo
Schio
Thiene
Torri di Quartesolo
Trissino
Vicenza (Ag. 1)
Vicenza
Viale Venezia, 43
Via Roma, 2
P.zza SS. Filippo e Giacomo, 16
Via Marconi, 5
Viale Bassani, 7
Via Roma, 12
Via dell’Artigianato, 98
Corso SS. Felice e Fortunato, 118
Viale Crispi, 95/97 - Galleria Crispi, 4
REPRESENTATION OFFICES
(No. 1)
Hong Kong
1609 Lippo Centre Tower Two - 89 Queensway, Admiralty
the commercial network 275
Mogliano Veneto
Montebelluna (fil. Virtuale)
Montebelluna
Montebelluna
Montebelluna
Montebelluna
Moriago della Battaglia
Motta di Livenza
Nervesa della Battaglia
Oderzo
Paese
Paese
Pederobba
Pederobba
Pieve di Soligo
Ponte di Piave
Ponzano Veneto
Povegliano
Riese Pio X
Roncade
Salgareda
San Biagio di Callalta
San Polo di Piave
Santa Lucia di Piave
Sernaglia della Battaglia
Silea
Spresiano
Susegana
Trevignano
Treviso (Ag. 1)
Treviso (Ag. 2)
Treviso
Valdobbiadene
Vazzola
Vedelago
Villorba
Vittorio Veneto
Volpago del Montello
Zero Branco
LEGAL AND ADMINISTRATIVE HEADQUARTERS
Veneto Banca scparl
Legal Headquarters: Piazza G.B. Dall'Armi, 1
31044 - Montebelluna (TV) - Italy
Administrative Headquarters: Via Feltrina Sud, 250
31044 - Montebelluna (TV) - Italy
LEGAL DATA
Limited liability public cooperative company
Member of the Register of Businesses in the Treviso no. 00208740266
Shareholders’equity as at 31/12/2004 Euro 581,893,070.98
Member of Fondo Interbancario di Tutela dei Depositi
www.venetobanca.it
informations and contacts 276
e-mail: [email protected]
Consultancy and coordination
Daniela Zannoni - Milano
Graphic design
Alessandra Stocco - Solaro (MI)
Photos
Cover photo: Vito Garofalo
Inner photos: staff of Veneto Banca
Thanks to all those who have partecipated to the photographic competition
and to Mr. Elio Ciol, that has collaborated with the Bank to the selection
of the images.
Printing
Tipolitografia Faggionato - Montebelluna (TV)