2013 draft financial statements approved by the BoD

• • Net income from banking activities of €81 million (€79.3 million in 2012); Net profit of €9.8 million (€9.5 million in 2012)
  • Core Tier1 ratio at year-end of 25.8% (21% as at 31/12/2012)
  • After consolidating its top position in market making and bond brokerage (ranking 2nd on behalf of third parties on DomesticMOT, EuroMOT and EuroTLX, ranking 1st on Hi-MTF) and on the Electronic Stock Exchange (MTA) of Borsa Italiana (ranking 4th),
  • the Bank participated in the main capital market operations carried out in Italy in 2013. This included its role as Co-Dealer and market maker on behalf of the Ministry of Economy and Finance, and placement on the Electronic Bond Exchange (MOT) of two issues of BTP-Italia for over €17 billion in April, followed by over €22 billion in November, which was the largest direct issue to the retail public ever carried out in Europe.

  Milan, 27 February 2014 – The Board of Directors of Banca Akros, investment bank and private banking of the Banca Popolare di Milano Group – chaired by Graziano Tarantini and led by Chief Executive Officer Marco Turrina – has approved the 2013 financial statements.

  “The 2013 financial year saw positive performance of the main financial markets, despite phases of high volatility and continuation of a difficult economic phase. Through its well-established presence and specialisation in its chosen areas of focus, the Bank has assured its control of its main markets of operation, with positive repercussions for the relative market shares. It has also constantly adapted its range of services and products to meet the evolving requirements of its customers,” commented Chief Executive Officer Marco Turrina.

  During the year, the Bank’s net income from banking activities amounted to approximately €81 million (+2.1% compared to 2012); net profit stood at approximately €9.8 million (+3.0%).

  As at 31 December 2013, the Core Tier 1 ratio was 25.8% and the Total Capital ratio was 27.1%. Taking into account the elimination of the 25% reduction in capital requirements for banks belonging to banking groups as from 1 January 2014, these ratios would be 19.3% and 20.3%, respectively. Shareholder equity amounts to €185.7 million; no goodwill or other intangible assets with an indefinite life are included on the balance sheet.

  With regard to market making activities:

  • The contribution of government bond, domestic bond and Eurobond activity remained significant; our participation was notable as Co-Dealer and market maker on behalf of the Ministry of Economy and Finance, placing the two issues of inflation-linked BTP-Italia on the Electronic Bond Exchange (MOT), amounting to over €17 billion in April and over €22 billion in November – the largest direct issue to the retail public ever made in Europe. The correct positioning of the proprietary bond portfolio also enabled the Group to seize the opportunities offered, particularly through stabilisation of the Italian public debt market.
  • During the year, the joint project with Parent Company Bipiemme in the Corporate & Investment Banking business with corporate customers was extended to the national level. In this context, operations in interest rate, exchange rate and commodity risk hedging instruments for companies and institutional counterparties remained central.
  • In derivative trading on Italian equities and indices, the Bank confirmed its position as a leading operator in regulated markets, where it acts as a market maker on stock options and stock futures, and OTC.

  In brokerage on behalf of third parties on regulated markets (Source: Assosim), Banca Akros:

  • Consolidated its leading presence in the bond markets, ranking 2nd among the operators active in the DomesticMOT and EuroMOT segments of the Borsa Italiana (with a market share of 15.5% and 17.6% respectively), 2nd in the EuroTLX market (with a market share of 19.1%) and 1st in the Hi-MFT market (with a market share of 28.1%).
  • Ranked 4th on the Electronic Stock Exchange (MTA) of the Borsa Italiana (5th in 2012), recording a significant increase in market share to 8.2%, and on the ETFPlus market for the trading of ETFs – Exchange Traded Funds (with a market share of 5.7%).
  • On the derivatives markets of the Borsa Italiana, the bank consolidated its 5th place on FTSEMIB stock index futures (with a market share of 3.4%) , and 1st place on the IDEX energy derivatives market (with a market share of 34.1%).

  Equity brokerage on foreign markets also relies on the activities of ESN – European Securities Network, the equity research and trading partnership set up by Banca Akros with eight other independent European investment banks active in their respective domestic equity markets, which ensures investors zero conflicts of interest, independence, and broad corporate access, thanks to its coverage of 700 listed European companies by 100 analysts.

   

  The activity carried out at the service of the retail customers of the network of the Parent Bank BPM and WeBank remained significant, guaranteeing access to the main domestic and international financial markets, automatic search for dynamic best execution on fixed-income securities through the proprietary SABE system, and the liquidity of the Group’s bond issues through the management of the Systematic Internaliser.

   

  In the Equity Capital Market business, the Bank participated in the public offer for the listing of Moleskine S.p.A. and Moncler S.p.A., as well as in the placement and underwriting syndicate for the RCS Mediagroup S.p.A. share capital increase.

   

  As part of its Advisory activities, the Bank participated, as financial advisor as well as broker in charge of coordinating the collection of subscriptions, in the takeover bid promoted by Meridiana S.p.A. on Meridiana Fly S.p.A. With a view to developing alternative channels for financing the needs of SMEs, we wish to highlight the coordination activity carried out, as arranger, in relation to the establishment of the fund specialised in “mini-bonds”, managed by the company Anthilia S.G.R. and subscribed for €100 million by the Parent Company BPM together with six other banks. In the credit advisory sector, two transactions were structured in the Gas & Power sector, one involving SACE, and the first financing operation with a guarantee on the assets of a leading Italian wine producer.

   

  In its Debt Capital Market activities, Banca Akros participated, as Lead Manager and Bookrunner, in the issue to institutional investors of a three-year fixed-rate senior bond of the Parent Company Bipiemme, placed in January 2013 for an amount of €750 million, as well as the related reopening in October for the amount of €150 million, and more than fifteen issues, mainly by leading European financial issuers, including five by the European Investment Bank, in one of which it acted as Joint Lead Manager and Bookrunner. In the corporate sector, the Bank participated, as Co-Lead Manager, in the placement of the institutional bond issued by EI Towers S.p.A. and, as placing bank, in the public subscription offer of bonds made by Mittel S.p.A. It should also be noted that Mittel S.p.A. took part, as broker in charge of collecting subscriptions, in the public exchange offer promoted by Mittel S.p.A. on its own bonds.

   

  In Private Banking, the strategy of focusing on the selected customer target in the affluent and high net worth segments continued, with a specialised offer in administration, order collection and personalised wealth management. Membership of the Allfunds Bank S.A. platform, which provides access to a wide selection of investment funds managed by many international asset management operators, was completed. Total assets were valued at around €2 billion at the end of the year, with a positive rebalancing of assets in favour of those under management; average assets per customer amounted to more than €1 million.

   

  Following authorisation from the Bank of Italy, the merger of the subsidiary Akros Alternative Investments SGR S.p.A. into the Bank was finalised effective as from 1 May 2013 and the related accounting and tax effects as from 1 January 2013.

  The first months of 2014 show a positive business trend.

   

  Banca Akros S.p.A.

   

  Reclassified income statement	2013	2012	Changes
  (€/million)			in value	in %
  Net income from banking activities	81.0	79.3	1.7	+2.1%
  Profit before tax	24.7	18.1	6.6	+36.1%
  Net profit	9.8	9.5	0.3	+3.0%

   

  The Manager in charge of financial reporting declares that the accounting information contained in this press release corresponds to the records, books and accounting entries.

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