BANCA MONTE DEI PASCHI (BANCA MPS) : les r?sultats des neuf premiers mois 2005 conformes aux nouveaux principes comptables IAS/IFRS

Bénéfice net de 573,7 millions d'euros (+ 65,8 %) et ROE à 12,5 %
Le résultat d'exploitation net connaît à nouveau une augmentation significative (+ 73 %) alors que la politique de diminution des charges d'exploitation est toujours en œuvre

- Revenu de la gestion financière et d'assurance + 7,6 %

- La croissance des volumes d'affaires se poursuit

- Actifs gérés + 11,2 %

- Part de marché du crédit à la consommation + 30 % au cours des neuf premiers mois

- Diminution supplémentaire des principaux composants de coût

- Charges d'exploitation moins 1,8 %

- Diminution du ratio coût/revenu d'environ 6 points (63,2 %)

- Rectifications nettes pour détérioration de la qualité des créances et actifs financiers en diminution de plus de 100 millions d'euros.

- Bénéfice net consolidé de 573,7 millions d'euros, en augmentation de 65,8 % par rapport à la donnée retraitée de la même période pour l'exercice 2004 et ROE à 12,5 %.

***

Siena, November 14th 2005. At its meeting today, the Board of Directors of Banca Monte dei Paschi di Siena SpA, chaired by Professor Pier Luigi Fabrizi, approved the quarterly interim report for the Group MPS as at September 30th 2005, prepared in compliance with IAS/IFRS.

Main consolidated results[1]

In a basic scenario that, in the third quarter (3Q05), featured emergence of the first signs of economic acceleration, the MPS Group has continued implementation of the strategic projects outlined in its 2003-2006 Business Plan, further consolidating the development of its operating and revenue base initiated in the second part of 2004.

From the operating standpoint, we achieved growing results as regards both (a) development of asset and commercial performance – with improved standing in the main businesses – and (b) profit performance, as demonstrated by the progress achieved in net operating profit (+73% vs. the first nine months of 2004 (9M04) – restated including an IAS 32 and 39 estimate) and net profit (+65.8%), which rose to E 573.7 million (mn).

In terms of income, the Group's total revenues (consisting of total net banking and insurance income) grew by 7.6% YoY in the 9-month period (9M05) driven by:

- net interest income, which grew to E 2,205 mn (+4.3% vs. 9M04 restated), thanks to the commercial segment's contribution (+2.9% fuelled both by buoyant growth of consumer credit and retail mortgages and by tight management of spread). In terms of quarterly performance, the YoY trend in 3Q05 was substantially stable.

- Net fees and commissions progressed by +10.9% vs. 9M04 restated, rising to E1,282.8 mn. Here income from conventional banking services and asset management grew by 3.2%, with asset management fees underpinned by growth of assets under management, which accelerated in 3Q05. As regards the quarterly trend thus far, income grew more in 3Q05 than the average reported for the two previous quarters.

- Net gain from realisation/valuation of financial assets of E 225 mn (vs. E 252.2 mn in 9M04), which was also positively driven by gains on sale of assets available for sale.

Among the other items forming total income inclusive of finance and insurance, there were also dividends, similar income and profits/losses of equity investments, totalling E 82 mn.

Overall, total consolidated banking and insurance income amounted to E 3,562.3 mn (+7.6% YoY) with "primary" banking income (net interest income and fees & commissions) growing by +6.6% YoY.

The 3Q05 trend was particularly significant. Notwithstanding seasonality, 3Q05 was steady compared with the average of the two previous quarters and progressed by over 15% vs. 3Q04 restated.

Net impairment losses on loans amounted to E 365.5 mn (vs. E471.1 mn in 9M04) and benefited from the decrease in flows of impaired loans and of the continuously substantial level of recoveries.

Moving on to analyse the trend of operating costs (E 2,249.9 mn), in 9M05 they confirmed their downward trend (decreasing by -1.8% YoY), in the presence of a return to investments in advertising, territorial expansion, and in development of businesses with high growth potential (headed by consumer credit). More specifically, administrative expenses (E 2,126.3.5 mn) were stable (+0.2%) with personnel costs decreasing to E1,379.7 mn (down by -1.4% YoY) (inclusive of E 43 mn for demanning incentives and E 17 mn relating to stock granting) and other expense items increasing moderately (to E 746.6 mn). The trend of these latter items stemmed from the initiatives mentioned above, which were set against the expense-control actions initiated some time ago in the main departments. Lastly, net write-downs of tangible and intangible assets amounted to E 123.5 mn, with a tangibly downward trend (-27% vs. 9M04).

As a result of the trends highlighted above, Net Operating Profit rose to E 945.5 mn, growing by +73% vs. the 9M04 restated figure, confirming the significant improvement in operating results already emerging in the second half of 2004, underpinned by growth in all segments of the MPS Group's business.

The cost/income ratio, inclusive of depreciation & amortisation, thus decreased to 63.2% (with improvement of some 6% points vs. 2004 year-end) and, net of extraordinary demanning costs, was 61.9%.

As regards the breakdown by business segment, we highlight the growing contribution of the Commercial Area, which – benefiting from the enhanced effectiveness of platforms specialised by customer segment and from a well-conceived relational policy, delivered, in total, year-over-year growth of +41% in terms of Net Operating Profit. More specifically:

- retail Banking: total net banking and insurance income amounted to E 1,390 mn (+4.9%). Net operating profit amounted to E 375 mn (+24%)

- Private Banking: total net banking and insurance income amounted to E 89 mn (+12.5%). Net operating profit amounted to E 36 mn (+43%)

- Corporate Banking: total net banking and insurance income amounted to E 1,465 mn (+1.7%). Net operating profit amounted to E 417 mn (+56%)

- Investment Banking: total net banking and insurance income amounted to E 300 mn (+32%). Net operating profit amounted to E 226 mn (+48%).

Pre-tax profit from continuing operations totalled E 929 mn, growing by +57.7% vs. 9M04 restated. This figure included net provisions for risks and liabilities and other operating income/expenses resulting in a positive balance of E 13.2 mn.

Completing the income and profit picture there were total taxes of E 341.3 mn (vs. E 233 mn in 2004) with a tax rate of approximately 36.7%. Net profit for the period after minorities thus amounted to E 573.7 mn, progressing by +65.8% vs. September 30th 2004 restated. ROE was 12.5% (whilst Return on Average Equity was 11.7%).

Balance sheet highlights

In 9M05 the MPS Group achieved major growth in all the main asset categories, further increasing its market share in the main businesses. Specifically, direct funding (totalling some E 81.8 billion (bn)) grew by +4.9% YoY[2] assuming linear growth, with a 6.5% share of the domestic market (in line with December 2004). Indirect funding totalled E 109.9 bn. In this latter category managed assets increased by 11.2% YoY on an annualised basis as above, thanks to ongoing robust growth of technical underwriting reserves in the bancassurance and acceleration in 3Q05 of individual and UCITS asset management business. As regards this, we note flows of sales of savings products of some E 8.9 bn (+44%% vs. 9M04. In this respect, major new business was achieved in 3Q05 (E 3.3 bn), 20% higher than the average in the first two quarters of the year – and also featuring refocusing towards AM products (mutual investment funds and managed discretionary fund and asset accounts).

More specifically, insurance premiums collected amounted to E 4.1 bn (10.9% market share of the bancassurance/post-office system vs. 10.1% at the beginning of the year); structured/linear bonds totalled E 3.4 bn; and there was a net inflow of E 440 mn for discretionary managed accounts and UCITS, as compared with a net outflow of E 632 mn in 9M04.

Customer loans grew by 7.8% YoY. As regards the domestic segment (market share of cash loans stable at 2004 year-end share of 6.2%), we note an increase in short-term loans (+4.2%) and significant growth of medium-/long-term loans (+12.2%). This result was achieved thanks above all to the issue of retail mortgages (+12.4% vs. 9M04 and with market share growing to over 7% vs. 6.7% at 2004 year-end) – and of consumer credit products by Consum.it (+53% vs. 9M04 and with a market share of 4.7% vs. 3.6% at 2004 year-end).

There was a decrease vs. 9M04 of the flows of disputed/watchlist loans (respectively down by –2% and –16%). These benefited both from the previous year's intensive monitoring of credit quality and from full application of first-time loan models. As regards monitoring of loan risk, the incidence of doubtful outcomes on gross non-performing loans grew to 56.6% vs. 49.2% at the end of the previous year. The incidence of net impaired loans stood at 3.4% of loans (vs. 3.8% as at December 2004) whilst that of non-performing loans was 1.8% (vs. 2.1% as at December 2004).

Lastly, as regards capital ratios[3], the Tier 1 ratio was 6.5% and the overall solvency ratio 9.9%. The same ratios, calculated according current regulatory supervisory requirements, were 6.9% and 10.2% respectively.

This press release will be available on the Web site at the address: www.mps.it

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[1] Operating and balance-sheet results as at September 30th 2005 are later on compared with those of the same period in 2004 restated in accordance with IAS/IFRS and also including an estimate of the effects of IAS 32 and 39.

[2] Changes in asset stocks as at September 30th 2005 are calculated vs. figures for the same period in 2004 restated and including an estimate of the effects of application of IAS 32 and 39.

[3] Calculated according to the "prudential filters" indicated by the Basle Committee and the Bank of Italy's draft prudential regulations.

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