Intesa Sanpaolo – growth in the foreground
The leading Italian banking group, Intesa Sanpaolo, at the press conference held in the head office of the Bank in Milan, presented for the first time after merger its business plans for the period of next three years (2007-2009).
The most important elements of the plan are maintenance of the leading position through a sustainable organic growth, which implies profit growth at the average rate of 7 percent annually and consolidation of the positions in the countries of Middle and Eastern Europe and of the Mediterranean. Under the slogan “Together is better” Corrado Passera, President of the Board of Directors of Intesa Sanpaolo, announced that for the next three years the Bank has in plan investments in the amount of 12 billion euros, as well as 100 billion euros of new loans intended for economy.
Consolidation of positions in Middle and Eastern Europe
Presence in the region of Middle and Eastern Europe was significantly improved through the merger of two banks, which is evidenced through the number of 7 million clients and 1.650 branches in 10 countries.
Considering that the Group already has a leading position in Serbia, as well as in Hungary, Slovakia, Croatia and Albania, the plan for the next three years is to strengthen, respectively, consolidate existing market positions.
Serbia is extremely important point on the map of future development of Intesa Sanpaolo Group, first of all because it has excellent growth perspectives. In the following period we will concentrate on the consolidation of existing market positions, whereby a closer integration and cooperation between Banca Intesa Beograd and Panonska Banka will contribute to this consolidation, pointed out Corrado Passera, President of the Board of Directors of Intesa Sanpaolo.
Announced consolidation of positions in the region implies also possible intended acquisitions which are estimated to have good perspectives in creating a higher value, i.e. that according to the price they fit into the aimed profitability of the Group. In praxis, it would primarily include countries in which the Group intends to continue market penetration, like Romania, Russia, Slovenia, Bosnia and Herzegovina and Egypt.
The banks which operate out of Italy currently participate with about 20 percent in the total assets of the Group. According to the plan, this share should be preserved through the set organic growth.
A growth of the operative profit of 13,7 percent annually was planned for the division of international banks by the end of 2009, with a bit slower growth of operative costs of 10,5 percent. The growth of placements was envisaged at the level of 18,8 percent annually.
Maintenance of the leading position in Italy
Intesa Sanpaolo is an unquestioned leader in the Italian market, with a market share of 20 percent in all segments of business activities.
Although, according to the strategic options, for the next three years no significant merger is envisaged out of Italian borders, there is a great possibility regarding new acquisitions of local Italian banks, with the purpose of improving the presence also in several Italian regions in which the Group currently has smaller share.
Market capitalization of Intesa Sanpaolo amounts approximately 75 billion euros, which ranks it on the fourth position in eurozone, meanwhile with 327 billion euros of placements it is sixth in eurozone. Out of the total number of 18 million clients, about seven million is out of Italy.
At the level of the Group the business plan set an average annual growth of operative profit at the rate of 7 percent. Net profit of Intesa Sanpaolo for the previous year amounted 4,4 billion euros, and the plan is that in 2009 amounts 7 billion euros.
Process of integration
The first phase of the process of integration was carried out successfully and at the same time brought a rapid growth of clients’ base of 43.000 of new clients for the period of only three months. Proportions of this process can be evidenced through the data proving that just the expenses of IT-system integration are estimated on 430 million euros, meanwhile it is estimated that the entire process of integration will cost 1,5 billion euros. In the course of 2007 the process of treasury integration and merger of the companies within the Group will be completed, so that by the end of 2008, through the unification of IT system, the process of integration would be completely finished.
Business plan 2007 – 2009 in numbers:
- 100 million for new loans intended for economy
- 600 new branches
- 12 billion euro of new investments
- 500 thousand days of education for employees annually
- Profit growth of 7 percent annually