{"clientID":"2b71d197-0c21-4234-ba98-2689b888f985","signature":"664610f33aa0503128c41216cec8b65f079ea4ee9ece982d6c7d6715d0fc4e88","encryption":"68cad83b4246825bd81d4bc1059d4620","keyID":"183b753b-7f28-af43-f453-4bd93774f44a","user":"C1AAFC8C323DFDA567B3CD7D0E48C3DD"}

INTESA SANPAOLO: CLARIFICATION OVER THE GROUP PASSING THE EU-WIDE STRESS TEST


Torino, Milano, 23 July 2010 – The Intesa Sanpaolo Group passed the stress test carried out by the CEBS on the 91 major European banking groups. Under a what-if adverse scenario with an additional sovereign shock, the Group would register a Tier 1 ratio of 8.2% at year-end 2011 compared to the 8.3% ratio of year-end 2009 and the minimum level of 6% required for the purposes of this stress test, with a buffer of approximately 8.5 billion euro of Tier 1 capital against the threshold of the minimum capital adequacy ratio required for the purposes of this exercise.

Under a what-if adverse scenario with an additional sovereign shock, the Core Tier 1 ratio would stand at 7.1% at year-end 2011, the same level as at year-end 2009.

That result does not imply any implementation of contingency actions on costs (in particular, a level of capital budget investment exceeding 1.5 billion euro is being maintained) nor does it take into account the expected benefit of more than 150 basis points from possible capital management actions on non-core assets (e.g. partial or full disposals, partnerships, listings) just reckoning the net benefit of about 40 basis points from the Group’s capital management actions and acquisitions either finalised or in their finalisation stage after 31 December 2009.

Furthermore, that result has been achieved in spite of a write-down of sovereign bonds held for trading based on assumptions (haircut provided by supervisory authorities) of losses on securities with a residual life of 5 years, whereas the Group’s portfolio of government bonds held for trading has an average residual life of just around one year, as the annex shows.

That result stems from the course of action that the Intesa Sanpaolo Group has continued to implement since its foundation aimed at achieving sustainable profitability driven by strategic decisions concerning not only revenues and costs but also liquidity, capital solidity and a low risk profile.

The what-if stress exercise (under the adverse scenario with an additional sovereign shock) showed, in fact, that the Intesa Sanpaolo Group is able to preserve its sustainable profitability generating resources of 17.8 billion euro for the 2010-2011 period thus broadly absorbing losses of overall 14.3 billion euro envisaged in the stress test due to loan adjustments, impairment on AFS equity instruments and trading losses.

Self-financing under the stress scenario (adverse scenario with an additional sovereign shock) assumes a dividend pay-out of a total amount of approximately 1.3 billion euro for the years 2010 and 2011, consistent with capital ratios exceeding 7% for the Core Tier 1 ratio and 8% for the Tier 1 ratio within a stress scenario. Under the benchmark scenario, which brings the Core Tier 1 ratio to 8.5% and the Tier 1 ratio to 9.8% at year-end 2011, self-financing assumes a dividend pay-out of a total amount of approximately 2 billion euro for the years 2010 and 2011, in line with both the approximately one billion euro pay-out in 2010 for year 2009 and the calculation of capital ratios as at 31 March 2010 which had taken into account the dividend accrued in the first quarter of the year assuming the quarterly quota of the amount paid for year 2009.

Under the what-if stress scenario (adverse scenario with an additional sovereign shock) the Core Tier 1 ratio stands at 7.1% at year-end 2011, the same level as at year-end 2009 as a result of on one hand a net negative impact of about 40 basis points following the what-if stress scenario and on the other of a net positive impact of equal size generated by the Group’s capital management actions and acquisitions either finalised or in their finalisation stage after 31 December 2009 detailed below:
- sale of the securities services business to State Street Corporation, finalised on 22 June 2010 (positive impact of 37 basis points on the Core Tier 1 ratio),
- purchase of 50 branches from Banca Monte dei Paschi di Siena, finalised on 11 June 2010 (negative impact of 9 basis points on the Core Tier 1 ratio),
- sale of Cassa di Risparmio della Spezia and 96 branches to the Crédit Agricole group, in the finalisation stage (expected positive impact of about 20 basis points on the Core Tier 1 ratio),
- purchase of 50% of Intesa Vita from the Generali group, in the finalisation stage (expected negative impact of 7 basis points on the Core Tier 1 ratio).

 

STRESS-TEST RESULTS (ADVERSE SCENARIO WITH  AN ADDITIONAL SOVEREIGN
SHOCK) FOR THE INTESA SANPAOLO GROUP

31 December 2009 

€bn

 % RWA

____________________________________________________________________

___________ 

___________ 

Core Tier 1 Capital

25.7

7.1

Tier 1 Capital

 30.2 

8.3

Total Regulatory Capital

 42.8

11.8

Risk-Weighted Assets

 361.8

 

   
Cumulated impacts from stress test on 2010-2011 P&L

€bn

 

____________________________________________________________________

___________ 

Total losses envisaged

14.3

Of which: Impairment on the banking group

11.8

              Of which: Net adjustments on loans

10.7

 

                           Impairment on AFS equity instruments

1.1

 

              Trading Losses

2.5

Loss-absorbing resources from recurring operations

17.8

Post-stress results

€bn

% RWA

____________________________________________________________________

___________ 

___________ 

Core Tier 1

26.6

7.1

Tier 1 Capital

 31.1

8.2

Total Regulatory Capital

 40.6

10.8

Risk-Weighted Assets

377.5

 

 

Investor Relations
+39.02.87943180
investor.relations@intesasanpaolo.com

Media Relations
+39.02.87963531
stampa@intesasanpaolo.com


group.intesasanpaolo.com

 

Intesa Sanpaolo Group’s portfolio of government bonds held for trading

Country


2010-2011
cumulated
haircut
provided by
supervisors
assuming a
residual life
of 5 years

Group’s
gross
exposure
   (euro m)

Actual residual 
redisual life 
for the Group
(years)

Austria

5.6%

51

6.59

Belgium

6.9%

40

6.22

Bulgaria

11.8%

 

 

Cyprus

6.7%

 

 

Czech Republic

11.4%

 

 

Denmark

5.2%

 

 

Estonia

11.8%

 

 

Finland

6.1%

 

 

France

6.0%

389

2.08

Germany

4.7%

194

3.92

Greece

23.1%

292

2.67

Hungary

11.8%

122

2.45

Iceland

11.8%

 

 

Ireland

12.8%

 

 

Italy

7.4%

22,560

1.09

Latvia

11.8%

 

 

Liechtenstein

11.8%

 

 

Lithuania

11.8%

 

 

Luxembourg

7.6%

 

 

Malta

6.4%

 

 

Netherlands

5.2%

 

 

Norway

5.7%

 

 

Poland

12.3%

 

 

Portugal

14.1%

 

 

Romania

11.8%

 

 

Slovakia

5.0%

82

3.44

Slovenia

4.2%

 

 

Spain

12.0%

10

5.75

Sweden

6.7%

 

 

United Kingdom

10.7%

1,080

0.18


 

{"toolbar":[{"label":"Refresh","url":"","key":"update-page"},{"label":"Print","url":"","key":"print-page"}]}