Board Meeting of 29 January 2013: preliminary results for 2012

Rome, 29 January 2013 - Cassa depositi e prestiti Spa (CDP) announces that the Board of Directors, meeting today under the chairmanship of Franco Bassanini, has approved the forecasted budget for 2013 and examined the preliminary results for 2012, which are expected to be stronger than expected.

Mobilized resources in 2012 and the 3-year period

In 2012 CDP registered new lending and investments of more than 20 billion euros, up from the 16.5 billion euros posted in 2011. With this performance, CDP has almost achieved the objective set out in its three-year Business Plan a year in advance of projections. In view of these results, the plan, which had set a goal for new lending of more than 40 billion euros between 2011 and 2013, has been revised to raise the target to over 50 billion euros, more than 3% of GDP in three years, confirming the counter-cyclical role of CDP’s operations.

In an environment that has been characterised by the market crisis and public finance constraints, CDP supported the growth of the country by focusing its lending on measures to support the economy (the SME loan mechanism, export finance, etc.) and increasing its investments in equity, alongside its traditional credit business, with a view to expanding and reinforcing its activity in support of public entities and the development of infrastructure and businesses.

 Public entities

• Mortgagers and real estate asset leveraging During 2012 financing activities for public entities was reduced: On one hand, in 2011 particularly large loans were granted because of exceptional operations. On the other hand there was a continuation of the reduction of demand due to financing constraints. CDP has kept a elevated share of the market and adopted in favour of public real estate asset leveraging the allocation of 1 billion euros (250 million euros has already been underwritten) dedicated to Fondi Valorizzazioni Immobiliari (FIV).
• Earthquake resources Following the 2-billion-euro fund for the reconstruction of the areas of Abruzzo hit by the earthquake of 2009 that was completely used, at the end of 2012 C made 12 billion euros available to respond to the earthquake in Emilia,  of which 800 million euros comes from the Moratoria Fund (Plafond Moratoria).

Infrastructure

• Financing Infrastructure investments have mainly pertained to the gas, multi-utility and highway sectors. Among those who benefitted the most were Autovie Venete, Concessioni Autostradali Venete, BreBeMI, Austostrade Spa, the Frejus tunnel, Florence trams, gas pipelines, Roma and Milano subways.
• Equity Funds CDP operated in support of infrastructure development also through equity funds in which it has a stake: F2i, Marguerite and InfraMed.

Businesses

• SME loan mechanism. Some 60 thousand SMEs have received support through the SME loan mechanism, which was expanded to 18 billion euros in 2012 following the depletion of the first tranche of 8 billion euros in resources. Of the new total, 2 billion euros have been allocated to help counter the adverse impact of public-administration payment delays.
• Export finance. The total resources available for the “Export Bank” product, with which CDP supports the exports and international expansion of Italian companies, were expanded in 2012 from 2 billion euros to 4 billion euros. 
• Acquisitions. In addition to the acquisition of 30% of Snam from Eni, underscoring CDP’s role as a strategic industrial investor, in 2012 CDP carried out three acquisitions related to its own operations: 100% of Sace, 76% of Simest and 100% of Fintecna. CDP, along with Sace and Simest, aims to create a large export and infrastructure hub. Fintecna expands CDP’s skills in supporting the development of the real estate assets of public entities.
• FSI. Fondo Strategico Italiano, which is controlled by CDP, approved investments of about €800 million, and joined forces with Qatar Holding in a joint venture worth €2 billion to support Made in Italy. Furthermore, in 2012 the Bank of Italy acquired an equity stake in FSI.

Preliminary figures for performance and financial position in 2012

The expansion of CDP’s activity to support the economy, comprising both lending and equity investments, is reflected in the preliminary financial statements for 2012. Compared with 2011, customer and bank loans grew by almost 2%,  amid a larger market in stagnation. Investments in equity (shares and equity investments) will reach about 30 billion euros. Total assets exceed 300 billion euros. On the liability side, the stock of postal funding rose to more than 230 billion euros, thanks to positive net funding for CDP of a little less than 10 billion euros. The cost/income ratio continues to be contained at below 4%.

Performance figures for 2012 will vastly exceed the 1.6 billion euros in net income posted in 2011, and the 2 billion euros forecast in the business plan, without taking into consideration the capital gains from the sale of 3.3% of Eni, equal to around 500 million euros.

Budget 2013

The volume of CDP financing is forecast to increase over that of 2012. Overall new lending during the 2011-2013 industrial plan will thus exceed of 50 billion euros: contributing to the GDP by more than 1% per year.

Attention will continue to be focused on three targeted activities: public entities, infrastructure, and businesses. The major part of the financing will continue to be dedicated in the support of the economy and businesses.  In particular, the total 4 billion euros for the “Export Bank” is expected to be utilized.

As a consequence, the stock of loans for customers and banks should continue to increase at a level higher than the market. Regarding the funding targets set by the agreement with the Poste Italiane, there is expected to be a net funding increase for CDP and a positive trend for the postal savings stock.

Comments by Bassanini and Gorno Tempini

CDP Chairman Franco Bassanini says: “The data shows how, in a very difficult year for the Italian economy and for public finances, thus for public administration investments, the Cassa has increased its efforts and bolstered its work in support of the economy and infrastructure of the country. Furthermore, the Cassa is the most important financer for public investments and the biggest long-term investor in the country.  Thanks to prudent management, it will continue to guarantee 25 million Italians a safe investment, and all the while using it to support the recovery of the economy and future growth.  Only 3 or 4 years ago we considered Germany’s KfW and France’s Caisse des Depots as unattainable models. Today our results are comparable with theirs.

CDP CEO Giovanni Gorno Tempini says: “During 2012, the transformation of Cassa Depositi e Prestiti into a large financial institution was completed for the purpose of the country’s growth. Along with the traditional activities for public entities, CDP created new vehicles such as the Fondo di Investimento per la Valorizzazione.  CPD has rapidly and significantly increased its work in favor of infrastructure and businesses, guaranteeing strong credit support and stressing efforts to boost exports.  The financial results are evidence of this balanced mix of activities and show the Cassa’s ability to respond to change brought on by a difficult economic environment.’’