| Notes |
18th December 2013
UBI Banca – Retail Area
Guido Cisternino
Non Profit Resp.
UBI Community Social Bonds, financial
instruments to support important initiatives of
social value
2
Contents
The UBI Banca Group
The importance of the non profit sector and the UBI Banca Group
approach
UBI Community Social Bonds: new instruments to support NPOs
3
The UBI><Banca Group (*):
(*) Data as at the 30th June 2013; figures for branches as at the 31st March 2013
A broad regional presence
The largest Italian co-operative
banking group by stock market
capitalisation
Approximately 3.8m customers: a
broad retail base and a significant
presence in the private banking
and SME segments
Loans of €91.3bn
Direct funding of €96.3bn
Sound capital ratios (Core tier 1
ratio: 12.1%, EBA Core tier 1 ratio:
10.8%; Tier 1 ratio 12.7%, Total
capital ratio: 18.7%; Common
Equity Tier 1 ratio > 10%)
1,726 branches in Italy + 8
branches abroad
National market share of 5.3%;
market share higher than 10% in
15 Italian provinces
Strong competitive positioning
Molise (6)
Basilicata (31)
Market share >= 15%
5% <= Market share < 15%
2% <= Market share < 5%
Market share < 2%
1,726 branches in Italy + 8 branches abroad
Lombardy (810)
Trentino Alto Adige (1)
Valle d’Aosta
(1)
Friuli Venezia Giulia (10)
Veneto (36)
Emilia Romagna (44)
Marches (85)
Umbria (19)
Abruzzo (17)
Campania (85)
Latium (114)
Tuscany (8)
Liguria (50)
Sardinia (1)
Calabria (98)
Apulia (104)
Piedmont (206)
4
8 OPERATIONAL NETWORK BANKS ON THE NATIONAL
MARKET
ASSET MANAGEMENT UBI Pramerica
(partnership with Prudential US)
THE PRINCIPAL PRODUCT COMPANIES
322 branches
219 branches
66 branches
25 branches
661 financial
advisers
FACTORING UBI Factor
LEASING UBI Leasing
BANCASSURANCE NON-LIFE UBI Assicurazioni
(partnership with BNP Paribas/Ageas)
BANCASSURANCE LIFE Aviva Vita (partnership with Aviva)
Aviva Assic. Vita (partnership with Aviva)
Lombarda Vita (partnership with Cattolica)
ON LINE TRADING IW Bank
UBI BANCA
performs the functions of strategic policy making, co-ordination, oversight and the centralised supply of
services to the network banks (a single IT system, centralised risk management, centralised finance and
treasury management, commercial and credit co-ordination, logistics, purchases, online banking, etc.)
Northern
Italy
Southern
Italy
220 branches
255 branches
Central Italy
357 branches
256+3 branches*
Data as at the 30th June 2013; (*) foreign branches
Group structure is based on a federal and integrated model: UBI
Banca is a “popular” bank. It is a joint stock co-operative share company, the parent of a federal
alliance of primarily retail local banks, with a strong vocation for being close (both physically and
in terms of ideals) to families, to SMEs and to local communities
5
Contents
The UBI Banca Group
The importance of the non profit sector and the UBI Banca Group
approach
UBI Community Social Bonds: new instruments to support NPOs
6
The non profit sector has become a
fundamental player in the Italian economy. In
part this is due to the transfer of parts of welfare
services away from government management and
a consequent growing need for finance on the part
of Nonprofit Organisations (NPOs), even though at
the same time we are seeing a reduction in
government funding destined for NPOs and a
contraction in the support provided by individuals
as a consequence of the economic crisis.
It is becoming essential for NPOs to develop
relations with the banking sector, which is
called upon to provide dedicated services and
products. For banks relationships with NPOs:
• offer an important return in terms of ties with
local communities, because of the key
function that they perform as social multipliers
and aggregators;
• have become strategic from a commercial
viewpoint, in consideration of the substantial
growth they have undergone in recent years
and developments currently in progress
Nonprofit organisations
Individuals connected with the
nonprofit world
(volunteers, employees, others)
The economic and social importance of the Italian nonprofit sector
+ 28%
+ 46%
Source: Istat –2011 Census of Industry and services
The Non Profit Sector
,
,
235,000
301,000
3,900,000
5,700,000
+ 28%
7
Nonprofit organisations nationally – trends
+ 28,0 %
(1) Of the 269,353 associations, 68.349 are recognised and 201,004 are not recognised (2) committees,mutual societies and others
Source: Istat –2011 Census of Industry and services
The Istat’s (Italian national office for statistics) 9th census of industry, services and the nonprofit sector published in July
confirmed the substantial growth of the nonprofit sector in Italy, the only sector which displayed “+” signs for its trends.
Two segments in particular show dynamic performance: that with an entrepreneurial orientation (cf. social co-operatives, +98%)
and the philanthropy segment (the foundations, +102%), which are becoming increasingly more production oriented.
257,579
+28.0%
235,232
301,191
Associations (1)
+ 23.4 %
218,364
269,353
Foundations
+ 102.1 %
3,077
6,220
Social cooperatives
+ 98.5 %
5,674
11,264
Other types of
organisation (2)
+ 76.8 %
8,117
14,354
8
Historically the UBI Group maintains a greater share of its deposits from and loans to the non
profit sector than that for the banking sector nationally, thanks to a firm market presence in
regions where NPOs are more numerous and to strong ties developed over the years.
UBI Community: the service model (1 of 2)
Source: Studies Area processing of Bank of Italy Account Matrix data (December 2012) – SAE 500 (Church and religious organisations) and 501 (non-commercial
organisations)
lancio
The challenge that has been grasped is to create social value through the provision of high quality banking
products and services and to create a dedicated “UBI Community” model of service, which goes beyond a
“general” approach in order to fully respond to the specific needs of this strongly developing segment.
lancio
For a retail bank with a community vocation like the UBI Group, relations with the non profit world are strategic
from two viewpoints:
in terms of development and commercial potential, in consideration of the sector’s huge growth in
recent years
because it represents an important interpretation of the more general strategy “fare banca per bene”
(to be a good banker), through its ability to provide finance at the service of people, in virtue of its ties
with local communities and its function as a multiplier and social aggregator
9
In order to fully respond to the specific needs of the non profit strongly developing
segment, in the last quarter of 2011, UBI Banca embarked on a policy to support the non
profit sector by developing a distinctive, specialist commercial approach, which
involves the creation of a platform of services and tools named UBI Community
dedicated to non profit organisations and church-related institutions.
UBI Community: the service model (2 of 2)
UBI Comunità
High-quality
dedicated
solutions and
specialist staff
Evolved service
model
Added services
Tools to support customer
relationships and to assess NPO
credit ratings
Detailed database classification
for the registration of NPOs
Finance and non profit sector
Research
A dedicated brand
Special services and
products for NPOs and
stakeholders
Specialist training for
central and branch staff
Services to support NPOs with
fundraising ( e.g. solidarity credit
transfers)
Development of schemes to
involve employees
10
Contents
The UBI Banca Group
The importance of the non profit sector and the UBI Banca Group
approach
UBI Community Social Bonds: new instruments to support NPOs
11
UBI Community Social bonds: what are they?
They are bonds designed to support initiatives of high social value for the community, issued by UBI
Banca or by another Group bank (the former are also listed on the MOT (electronic bond market))
They guarantee subscribers a return on their investment (comparable to that offered by ordinary
investments) and they allow the bank to use part of the funds obtained to support socially worthy
initiatives (more specifically the bank donates a set proportion of the funding acquired to support those
initiatives, or – a solution adopted for the first time in Italy – it is used to grant loans for non profit sector
development initiatives)
They involve and reward significant non profit organisations in their local communities, that have good
capabilities to mobilise stakeholders in local communities and have projects with a high social impact.
Subscription may be open to all current and potential Group customers or limited to set categories of
investors (e.g., registered shareholders, employees, volunteers, users and other stakeholders of beneficiary
organisations) or to set geographical areas.
Last March UBI Community Social Bonds won the 2013 edition of the Italian Banking Association prize
for innovation in banking services (the “Social Bank” category). In June the President of the Italian
Republic awarded Bank the prestigious 2013 National Prize for Innovation (known as the “Prize of
Prizes”) in the category “Services – Innovation in Banking Services”.
Total issues: €362 million
Charitable donations: €1.82 million
Launched in April 2012, they were very positively received by customers, which bears witness to the
extent to which the bank, with its values and objectives is in tune with local communities: today the
UBI Banca Group has placed 40 social bonds, the large majority of which were fully subscribed well before
the issue period came to an end. Total issues: € 422 million
Charitable donations: €2.11 million
12
UBI Community Social Bonds support the local communities of
Group Banks
Banca Popolare
Commercio e
Industria
Banca
Regionale
Europea
Banco di
Brescia
Banca
Popolare di
Bergamo
Banca Popolare
di Ancona
Banca Carime
Banca di
Valle
Camonica
Banca Private
Investment
* Branch network data for January 2013. It includes ordinary branches, mini-branches and company branches
13
UBI Community Social Bonds (2 of 3)
Public
authorities
Churchrelated
institutions
Foundations
Other NPOs
Social
advocacy
associations
Voluntary
organisations
1 Donations
The bank uses social bonds, which allow the donation to charity of a set proportion of the funding
obtained from these bonds, to support initiatives with a high social impact organised by public and
private sector entities in local communities.
This type of social bond is particularly useful for supporting the projects of associations, foundations
and church-related institutions, that is distribution and advocacy nonprofit organisations.
The beneficiaries must have good capabilities to enlist stakeholders in local communities and efficient
management and they must operate preferably in the areas of health, disabilities, new poverty, infancy,
education, the elderly and the environment.
Social
value
14
UBI Community Social Bonds (3 of 3)
2 Financing
The bank uses social bonds which allow the use of the funding placed to grant loans at competitive
terms and conditions to non profit sector organisations and/or those associated with them to help
develop social forms of enterprise in local communities that are able to provide social innovation
(i.e. efficient answers to new social needs in a context of the severe crisis of current economic and
welfare systems).
The beneficiaries must have a strong capacity to enlist stakeholders in local communities, efficient
management, adequate cash flow and good credit rating assessments (carried out following specific
criteria for the non profit sector).
Network of
Co-operatives
and social
enterprises
Single Co-operatives
and social
enterprises
15
The strengths of Social Bonds
In line with the expectations of a growing number of investors to combine individual and
general interest objectives in their investment decisions, social bonds provide adequate
remuneration and at that time help – by acting as “social financiers/bankers” – to
implement projects which create value for society and favour the development of an
“economy of the common good”.
They represent an extra investment opportunity for investors/savers in addition to
conventional instruments on the market (like ordinary bond, ethical funds).
FOR
CUSTOMERS
FOR NPOs
FOR THE BANK
They are consistent with the mission of the UBI Group, a federal alliance of retail banks
who base their common identity on the values of co-operation and local communities,
interpreted as a desire to be close, both physically and in terms of values, to stakeholders
(particularly those who create value for society and favour the development of an
economy for the common good).
They are consistent with the commercial strategy of the UBI Group – firmly based on the
UBI Community service model – to accompany nonprofit organisations on a path to
growth and innovation and also to support projects with a high social impact organised
by public and private sector organisations in local communities.
They represent an alternative fundraising/financing instrument, which increases the
autonomy that is indispensable to this sector, which is an increasingly more important
player in the satisfaction of emerging social needs.
They are in synergy with the action plan drawn up by the European Commission to
support social enterprises as fundamental players for sustainable growth.
16
UBI Community Social Bonds won the 2013 Italian Banking Association
prize for Innovation…
The "UBI Community Social Bond" project won the 2013 edition of the Italian Banking
Association prize for innovation in banking services in the “Social Bank” category.
The award was made following a selection from projects on social, humanitarian and
environmental initiatives submitted by the banks participating .
The “Italian Banking Association for Innovation” jury awarded the prize to the UBI Banca
project for “its concreteness and effectiveness in generating immediate positive impacts on
the social and environmental context, contributing directly to support development of the
welfare economy, by increasing social cohesion”.
17
…and the 2013 – 5th Edition of the National Prize for Innovation
Last June the “UBI Community Social Bond” project won the prestigious 2013 National
Prize for Innovation (known as the “Prize of Prizes”) in the category “Services –
Innovation in Banking Services”.
The “Prize of Prizes” is awarded by the President of the Republic of Italy to winners of
awards for innovation made periodically in the following sectors: industry and services,
university and public research, public administration and advanced services. The objective
is to underline the importance attributed to companies, public and private sector authorities
and individual innovators as protagonists of innovation, by supporting their role in the
social, economic and scientific development of the country.
18
Some of the UBI Community Social Bonds placed since April 2012
Most of the social bonds
were subscribed before the
end of the offer period,
which demonstrates the
alignment of the Group’s
values and objectives with
those of the community.
19
Focus: UBI Community Social Bonds for Comunità di Sant’Egidio
€100,000 for
Comunità di
Sant’Egidio
A project designed to prevent social isolation and support the living
conditions of the elderly, an important resource for our society.
20
Focus: UBI Community Social Bonds for Fondazione Cesvi Onlus
€100,000 for
Cesvi
A project designed to allow local populations to restart their farming activities
in Central Uganda, where many years of war have interrupted agricultural
production and subsistence farming by families.
21
Focus: UBI Community Social Bonds for social enterprises in the
CGM system
Deadline for
grant of loans: 30/04/2014
Amount of the loans: €15,000 – €500,000
beneficiaries: CGM social consortia,
enterprises and co-ops
Duration: up to 60 months
Rate: Euribor 3 m + spread
(from 330 bps to 500 bps)
Support for social enterprise and co-operative members of the CGM system (the most important
network of social enterprises in Italy) in making investments in social aggregation and
innovation projects, in development programmes with knock-on effects in terms of new jobs and
in meeting needs to increase working capital and balance the capital and financial
structure of social enterprises themselves.
22
Retention
Obiettivi
Social consortia, enterprises and co-operatives that are CGM consortium
members, with a UBI internal rating (if available) classified as maximum “mediumhigh risk” (max rating 7), unless particular factors result from the UBI credit rating
assessment model.
Period for granting the loans: from 19/11/2012 until 31/3/2014
From € 15,000 to € 500,000 (the Bank may consider exceptions to these amounts)
Up to 60 months, inclusive of an optional maximum grace period of 6 months; constant
monthly repayments (at the end of each month)
Average Euribor over the 3 preceding months plus a spread based on the purpose of
the loan, the rating and the possible presence of consortium guarantees (see details
on the following slide)
At the discretion of the Bank (inclusive of any guarantees issued by guarantee bodies
and funds)
To support investments connected with products and services of public utility and
social interest, by granting loans to support the following: tangible and intangible
investments in production (relating also to projects for groups or networks of
enterprises and for “social product” innovation, in areas such as social housing, health
and the environment), in development projects with knock-on effects in terms of
new jobs and in vocational retraining programmes for worker members and/or
employees.
To meet needs to increase working capital, resulting, amongst other things, from the
implementation of projects, and to balance capital and financial structure.
Characteristics
of the loans
BENEFICIARIES
OBJECTIVES
INTEREST
RATE
GUARANTEES
AMOUNT /
DURATION
Focus: UBI Community Social Bonds for social enterprises in the
CGM system
23
(*) with Guarantee Body/Fund guarantees
Reduced to 0.50%, a minimum of €100.00 (0.30%, a minimum of € 100.00 with
guarantees from guarantee bodies or funds which have agreements with the bank,
e.g. Cooperfidi Italia)
Loan applications must be submitted to the bank subject to prior verification of the
subjective requirements of the beneficiaries and the purposes of the loan by CGM or
CGM Finance, which will also assist the beneficiaries in filling in the “nonprofit
organisation – social enterprises and co-operatives particulars form”.
OPERATIONAL
AND
ASSESSMENT
PROCEDURES
INTEREST
RATE
PROCESSING
FEES
Average Euribor over the 3 preceding months plus a spread based on the purpose of
the loan, the rating and the possible presence of consortium guarantees as follows:
Characteristics
of the loans
Focus: UBI Community Social Bonds for social enterprises in the
CGM system
pricing range
spread for working
capital/balancing
financial structure
spread for development
investment
spread for creating
new jobs
A 380(360*) 360 (340*) 350 (330*)
B 420(400*) 400 (380*) 390 (370*)
C 500(450*) 480(430*) 470(420*)
24
Focus: the UBI Community Banca Valle Camonica Social Bond for
Fondazione Opera Caritas San Martino
Max nominal amount
of bond: €10 million
Type: Mixed Rate
Duration: 36 months
Offer period: from 7/11/2013 until 07/12/2013
Coupon payments: half yearly
Annual interest rate: 1st and 2nd year: 2.00%; 3rd year:
Euribor 6m + 0.50%
Donation: 0.40% (of €8 million)
Amount of loan pool: up to €2,000,000
Deadline for
grant of loans: 30/11/2013
Amount of loans: €30,000 – €50,000
Beneficiaries: firms
located in Valle
Camonica
Duration: up to 24 months
Interest rate: Eur 3m + 0.50%
Banca di Valle Camonica has supported a project run by Caritas, called “Valle
Camonica – Brotherly hand – Support for employment” ,designed to assist young
jobseekers, vulnerable people and those at risk of social exclusion to find a
first job or those who have lost work because of the economic and financial crisis
to find new jobs. |