FAQs

The Plan concentrates on consolidation of the growth in size achieved in the last few years, in a perspective of building our development potential. The objective is to maximise the Group’s productivity and profitability as key prerequisites for self-financing of development and for maintaining the current good levels of capitalisation.

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Consolidated targets at year-end 2011 are:

• Total customer funding: € 12.2 bn (9.6% CAGR)
• Loans: € 8.4 bn (5.2% CAGR)
• Total banking income: € 406 mn (9.4% CAGR)
• Net profit: € 56 mn (42.4% CAGR)
• ROE: 6.9% (+4.2%)

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These strategic guidelines of the Plan will guide the Banca Etruria Group’s actions in the next three years:

• Boosting productivity of the commercial network, via policies to increase customer funding and service margins with special attention to restoring the balance between productivity and risk – while achieving substantial stability of the network size
• Tight control of credit quality, with special attention to maintaining the present distribution of loans and streamlining the authorisation procedures in order to achieve increasingly efficient market response times.
• Focused development of subsidiaries, designed to maximise profitability and improve competitive positioning while dedicating attention to growth opportunities and to control of capital absorption.
• A streamlined, customer-oriented organisation, focused on rebalancing the resources dedicated to commercial activities, with a view to maintaining overall employee headcount and accelerating generation changeover.
• Operating efficiency, in re-design of sourcing policies to maintain the present quantitative standards while taking action to rein in administrative costs.
• Evolution of governance systems, designed to improve control of subsidiaries, develop human resources, and improve planning and control, finance and risk management activities.

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At March 2009 there are over 268,000 active Customers. In particular there are:

• 266,520 Private Clients;
• 41,929 Small Businesses.

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In the last few years, Banca Etruria achieved a widespread penetration in certain specific market areas. The current Banca Etruria offerings take advantage of several distribution channels, such as:

• 186 branches;
• Remote Banking;
• Internet Banking: Virty

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The main consolidated results achieved at 31 December 2007 are the following: at the income level:

at the income level:

• year-to-date net profit amounts to €50.3m (€43.5m at 31st December 2006)
• intermediation margin is €319.8m (up 10.1% compared to 31st December 2006)
• interest margin is €221.1m (up 15.4% compared to 31st December 2006)

• direct deposits are €6,148.1m (up 15.2% compared to 31st December 2006)
• lending to customers reaches €6,258.4m (up 13.4% compared to 31st December 2006)

• cost/income ratio decreased to 58.9% compared to 62.1% at 31st December 2006.

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Banca Etruria applied IAS/IFRS starting from the balance sheet closed on December 31st 2006 according to what foreseen by Legislative Decree no. 38/2005 art. 4 paragraph 1. IAS/IFRS application for the first time in 2005 fiscal year determined a result of 23.24 million Euro. The different economic result obtained compared to that relative to the balance sheet drawn up according to previous accounting principles is mainly due to the various classification and evaluation methods of some types of financial assets and liabilities.

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Solvency Rate at December 31st 2007:

• Individual 12.5%

• Individual 7.4%

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The main strengths of Banca Etruria are certainly:

• territorial settlement and customised products and services;
• customer and management approach, focused on individual customer needs;
• simple organisational structure, unencumbered by excessive fragmentation. This allows for a more fruitful relationship with small- and medium-sized enterprises, a market niche that Banca Etruria regards as quite appealing.

Other strengths of Banca Etruria are:

• solidity
• the management, independent and capable, which head to a sustainable growth of the Bank allowing to maintain its autonomy;
• strengthening of media and investor relations through the reorganisation of communication activities;
• a complete products and services range.

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Rather than weaknesses, we should better speak of improvements that Banca Etruria is now working on, among which, for example, an insufficiently aggressive (so far) territorial approach. To handle this criticality, the Bank implemented the following measures:

• the creation of 12 Territorial Poles, structures created to bring the Institute closer to serviced territories;
• a more active presence in the various banking segments (Private, Corporate, Retail), thanks to a new internal organisational model and to the consequent expansion of the sales force through the creation of specific professional profiles, in order to offer a more effective advisory service;
• a new branch opening plan, including the strengthening of the Bank’s distribution network in its traditional footprint areas and in regions with an economic fabric very much like the communities where Banca Etruria is long since operating;
• the transfer to Banca Lombarda Private Investment of the company’s branch represented by the Financial Promoters Network. The agreement, signed at the beginning of March 2006, came into effect at the beginning of July; at the moment of transfer, the branch object of the transaction included direct collection towards clients for about 80 million Euro, investments as residential loans for 66 million Euro, and indirect collection for about 307.7 million Euro (55 million of which related to insurance collection).

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Banca Etruria is not interested in joining the merger process between Credit Societes and is going to remain independent, maintaining its traditional autonomy.

In the evolving background of Credit Societies, it is Banca Etruria's intention to strengthen its operational synergies with other institutions by way of federation agreements that do not limit any party's autonomy. Banca Etruria intends to create a business model to combine the stakeholders' advantage with the development of local communities.

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Some aspects of the regulations on Italian cooperative societies could be improved to spur further synchronization of Italian legislation with the European legal environment. Any reform of corporate laws, however, should not push so far as to determine the loss of the peculiar nature of Credit Societies, but should rather preserve their core features, such as they are provided for in the current legislation. We are referring in particular to the “one vote per shareholder” principle, which is regarded as an essential tool to safeguard each Shareholder’s opportunity to enjoy an active participation in the company’s life. It is important, in fact, not to warp the Credit Society system and its cooperative nature; indeed, its principles should be preserved, as they are the very pillars on which the success of each single institution is based, thanks the Credit Societies’ millions of client-shareholders.

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In many years of activity, Banca Etruria was able to consolidate its skill to combine dimensional growth to value creation, sustainable development and an entrepreneurial culture oriented towards social responsibility.

Since 1998 the Bank publishes the Corporate Balance Sheet, in witness of all actions carried out in favour of those stakeholders (interlocutors) who participated to the Company’s life at various title. In 2005 Banca Etruria went in with the project Let's give value to our values (Diamo valore ai nostri valori), which involved all interlocutors in showing Banca Etruria's typical values through a multi-stakeholder survey. The project in 2006 brought to the publication of the Fiduciary Document and Ethic Code.

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