Milano, 11 May 2004

 

• Consolidated Net Income closed at 418 million euro, up 34% on 313 million of the 2003 first quarter

 

• Ordinary Income to 690 million euro, up 36% on 508 million of the 2003 first quarter

 

• Cost/income ratio improved significantly: down to 59.5% from 63.4% of the 2003 first quarter 

 

• Capital ratios strengthened further: Tier 1 ratio at 8.1%

 

 

Banca Intesa’s Board of Directors, which met today under the chairmanship of Giovanni Bazoli, examined and approved the consolidated quarterly report as at 31^st March 2004.

 

Results highlighted a further improvement in both revenue generation and cost reduction, in line with the 2003-2005 Business Plan targets. 

 

The 2004 first-quarter consolidated income statement registered a net interest income   of  1,247 million euro, up 2.9% compared to the previous quarter. A 1.7% decrease was registered with respect to the 1,268 million of the 2003 first quarter due to both the decision to structurally reduce loans to large corporates mainly international (which were curtailed by nearly 10 billion euro over the last twelve months) and the decline in market interest rates.

 

Net commissions totalled 825 million euro with a 6.4% decline with respect to the previous quarter due to a seasonal decrease in revenues, mainly from tax collection; a 5.5% increase was registered on the 2003 first quarter largely attributable to the sustained trend recorded by  bancassurance (+33%), dealing and placement of securities (+33%) and debit and credit cards (+13%).

 

Profits on financial transactions went up to 220 million euro with a 63% increase on the previous quarter, which had been negatively affected by the marking to market of approximately 70 million; a 14% increase was registered compared to last year’s first quarter also determined by the sustained trend of revenues from the sale of structured bonds.

 

On the whole, net interest and other banking income amounted to 2,422 million euro, up 2.2% with respect to the previous quarter and up 2.8% to the first quarter of 2003.

 

Total operating costs reached 1,440 million euro with a 9.7% decrease compared to the previous quarter partially due to the seasonal decrease of expenses other than personnel costs; a 3.6% decrease was recorded with respect to the 2003 first quarter due to a reduction in personnel costs (-4.5%) and in depreciation and amortisation (-13%) while an increase was registered in other administrative costs (+0.8%) manly attributable to advertising and training expenses.

 

As a result, operating margin increased to 982 million euro, up 27% compared to the previous quarter and up 14% to the first quarter of 2003.

 

Total provisions and net value adjustments (excluding goodwill amortisation) amounted to 260 million euro, down 63% on the previous quarter (when provisions had been accounted for related to Parmalat exposure for 288 million and to the BCP stake write-down for 152 million) and down 20% on the 2003 first quarter (this reduction was mainly due to the lower provisions required by the Latin America exposure).

 

Therefore, ordinary income increased to 690 million euro from the 33 million of the previous quarter and from 508 million recorded in the 2003 first quarter (+36%).   

 

Extraordinary items resulted in an income of only one million euro, compared to 100 million of the previous quarter and 46 million of the corresponding quarter for 2003.

 

Therefore the quarter closed with a consolidated net income of 418 million euro, compared to 176 million of the previous quarter and 313 million of the first quarter of 2003 (+34%), with the Parent Company’s net income at 311 million euro with respect to 371 million of the previous quarter (when substantial extraordinary income had been registered) and to 253 million of the corresponding period for 2003.

 

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With regard to consolidated balance sheet figures as at 31^st March 2004, loans to customers amounted to 153 billion euro, substantially unchanged with respect to 31^st December 2003 and with a 4.8% decrease compared to 31^st March 2003 determined by cuts in the exposure to Large Corporates, mainly international ones with no business links with Italy. Doubtful loans net of adjustment decreased to 4.5 billion euro, diminishing 1.7% with respect to 31^st December 2003 and 10.2% to 31^st March 2003 with an incidence of 2.9% on total loans and a 66% degree of coverage.

  

Customer deposits under administration amounted to 462 billion euro, unchanged with respect to both 31^st December 2003 and 31^st March 2003. As part of it, direct customer deposits reached 172 billion, unchanged with respect to 31^st December 2003 and down 2.3% compared to 31^st March 2003, while assets under management amounted to 121 billion, in line with figures as at 31^st December 2003 and up 1.4% compared to 31^st March 2003.

 

As concerns capital ratios, at 31^st March 2004 the Core Tier 1 ratio reached 7.1% (6.9% at year-end 2003), the Tier 1 ratio was at 8.1% (7.8% at year-end 2003) and the total capital ratio equalled 11.7% (unchanged with respect to year-end 2003).

 

At the end of the first quarter of  2004, Gruppo Intesa’s operating structure was made up of 3,730 branches - of which 3,096 in Italy and 634 abroad - and 59,910 employees, 28 more than at 31^st December 2003.

 

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In the framework of the more than 100 projects on which the Bank’s platform for growth is being built, new products have been offered in the first months of this year and greatly welcomed by customers, particularly:

1. with the opening of over 2,500 new current accounts on a daily average since the launch of the advertising campaign (19^th April), a figure which more than doubles the daily average of the current year’s  first quarter;
2. the debit card with online checking of payments, with 2,500 cards sold on a daily average;
3. Intesa Bouquet, a fund of funds, with subscriptions for 2 billion euro in the 2004 first quarter;
4. PrestIntesa, the personal loan for a maximum of 30,000 euro available within 48 hours, which led to a 75% increase in the amount of personal loans granted in the current year’s first four months compared to the corresponding period for 2003;
5. Mutuo Protetto, the new “capped” floating rate mortgage, which led to a 25% increase in the amount of mortgages granted in the current year’s first four months compared to the corresponding period for 2003;
6. life insurance policies, via Intesa Vita (the new insurance company set up as a joint-venture between Gruppo Intesa and the Generali group fully operational as of  1^st January 2004) which recorded new premiums for a total of 1.6 billion euro in the first four months of the current year, nearly doubled with respect to the corresponding period for 2003.

 

* * *

 

As regards this year’s outlook, also in the light of the results achieved so far, Banca Intesa confirms its Business Plan targets aimed at further improving profitability.

 

* * *

 

Moreover, the Board of Directors gave mandate to the Chairman and the Managing Director and CEO to summon an Extraordinary Shareholders’ Meeting to be held by the end of this June with some changes in the Company’s Articles of Association on the agenda concerning:

1. the compliance with the new regulations introduced into the Italian Civil Code by the recent corporate law reform;
2. the reduction from a minimum of 2% to at least 1% of ordinary share capital necessary to submit a list of candidates for the appointment of the Board of Statutory Auditors in order to better safeguard minority shareholders’ representation. 

 

* * *

 

In order to present more complete information regarding the quarterly results, the consolidated statement of income and balance sheet are attached (reclassified and in a summarised format). The latter are included in the report on operations approved by the Board of Directors. It must be pointed out that this quarterly report has not been subject to control by the auditing firm.

 

Banca Intesa notifies that - pursuant to provisions set forth in Art. 82, par.2  of Consob resolution 11971 of 14th May 1999 as amended - the Half-Year Report as at 30th June 2004 will be available for shareholders and the market within the maximum term of  75 days, instead of the 2004 second-quarter report.

>>Financial Statements as at 31st March 2004