Bank of Italy
Bank of Italy
News Article | May 11, 2017
Q1-2017: Net income up sharply for both Crédit Agricole Group and Crédit Agricole S.A., strong commercial momentum in all business lines This press release comments on the results of Crédit Agricole S.A. and those of Crédit Agricole Group, which comprises the Crédit Agricole S.A. entities and the Crédit Agricole Regional Banks, which own 56.6% of Crédit Agricole S.A. In line with previous quarters, the Group's results for the first quarter of 2017 reflect strong business momentum in all components of Crédit Agricole Group, including the retail banks, specialised business lines and Large customers. Operating expenses remain well controlled, despite investment in business development, and the cost of credit risk remains low. The Group's profitability was therefore excellent, with stated net income Group share of 1,600 million euros and underlying net income Group share of 1,654 million euros, excluding this quarter's specific items. The fully-loaded Common Equity Tier 1 ratio at end-March 2017 was stable compared with end-2016 at 14.5%, among the best in the sector and well above the regulatory requirements. In line with its "Strategic Ambition 2020" medium-term plan (MTP), the Group is capitalising on its stable, diversified and profitable business model to support organic growth in all its business lines, largely through synergies between the specialised business lines and the retail networks, and to maintain a high level of operating efficiency while generating capacity to invest in business development. As announced at the end of 2016 at the time of Amundi's proposed acquisition of Pioneer Investments, the Group's asset management company completed its 1.4 billion euros rights issue at the end of March 2017. Crédit Agricole Group sold some of its subscription rights to reduce its percentage interest in Amundi from 75.7% to 70%, including 68.5% held by Crédit Agricole S.A. (74.1% previously). However, Amundi's first quarter results were consolidated at the old percentage interest, as the rights were not sold until the very end of the quarter. Liquidity in Amundi shares has improved significantly as a result of the rights issue and the broader free float arising from the reduction in Crédit Agricole Group's percentage interest. It should be noted that the value of the Group's holding in Amundi has increased significantly since the rights issue, despite the dilution of its percentage interest, and is well above the amount invested by the Group in this transaction. The closing of the acquisition of Pioneer Investments should occur late in the first half of 2017, or perhaps early in the second, and is expected to have a impact of -35 basis points on Crédit Agricole Group's fully-loaded CET1 ratio (-60 basis points for Crédit Agricole S.A.). The Group also announced in a press release issued on 24 April 2017 that it is in preliminary discussions with the Bank of Italy and the Italian Interbank Deposit Protection Fund with a view to the acquisition of three Italian savings banks. Their integration by Crédit Agricole Cariparma SpA would increase its customer base by about 20% and contribute to its expansion in some attractive regions of Italy without changing its geographical positioning, as these banks operate in neighbouring areas. All of the doubtful loans carried on their balance sheets would be derecognised prior to the integration. This transaction forms part of the Group's aim of strengthening its position in Italy, in line with Strategic Ambition 2020 and with the Group's strict rules as regards return on investment and risk profile of new acquisitions. It is subject to a positive outcome of the due diligence process, which is due to begin soon. Based on information available to date, the acquisition would have a negative impact of less than 10 basis points on the fully-loaded CET1 ratio for both Crédit Agricole Group and Crédit Agricole S.A. In the first quarter of 2017, Crédit Agricole Group's stated net income Group share came to 1,600 million euros versus 818 million euros in the first quarter of 2016. Excluding specific items of -54 million euros in the first quarter of 2017 versus -423 million euros in the first quarter of 2016, underlying net income Group share6 came to 1,654 million euros, compared with 1,241 million euros in the first quarter of 2016, a year-on-year increase of +33.3%. Specific items6 this quarter included only the usual volatile accounting items: revaluation of own debt in line with changes in issuer spread (-7 million euros in net income Group share compared with +16 million euros in the first quarter of 2016), DVA (Debt Valuation Adjustment, -31 million euros versus +9 million euros) and loan portfolio hedges in Large customers (-16 million euros versus 0). In the first quarter of 2016, specific items6 also included the balance of the liability management operation completed ahead of the operation to simplify the Group's structure ("Eureka") for an amount of -448 million euros in net income Group share. Specific items therefore totalled -54 million euros in the first quarter of 2017 versus -423 million euros in the first quarter of 2016. In the first quarter, underlying revenues6 were up +6.7% year on year 8,334 million euros, thanks to a positive contribution to growth from all business lines. The Regional Banks' revenues were up excluding the impacts of the Group's transaction to simplify its structure last year (negative impact of -174 million euros before tax). Despite an increase in eurozone long rates since the fourth quarter of 2016, bringing them up to their highest level since the first quarter of 2016, they nonetheless remain low and the short end of the curve is still in negative territory. These low interest rates continued to put pressure on the interest margin on intermediation activities, particularly in Retail banking in France and Italy. This triggered a wave of home loan renegotiations in France, which even escalated with the increase in rates as of November, culminating in a record level of monthly renegotiations in January 2017 (2.1 billion euros for LCL that month for example). These renegotiations were accompanied by high volumes of loan restructuring fees or early repayment penalties, which had a temporary positive effect on retail banking revenues in France, but the impact of the renegotiations will continue to depress interest interest over the coming quarters. Alongside this increase in revenues, operating expenses remained well controlled at 5,480 million euros, a year-on-year increase of +2.2% and +1.6% excluding the contribution to the Single Resolution Fund (SRF), which increased by +14.8% to 274 million euros. It should be noted that in 2016, an additional SRF contribution was recognised in the second quarter. Operating expenses did not include any specific items in the first quarter either of 2017 or 2016 This led to a highly positive jaws effect between underlying7 revenues and operating expenses and the underlying7 cost/income ratio excluding SRF therefore improved by more than 3 percentage points (3.1) to 62.5% versus 65.6% in the first quarter of 2016. Underlying gross operating income7 also increased significantly, by +16.5% year-on-year to 2,855 million euros. Cost of credit risk decreased by 13.7% at 478 million euros versus 554 million euros in the first quarter of 2016. As in previous quarters, cost of risk relative to outstandings remained low at 26 basis points. In addition to cost of credit risk, a non-specific provision for legal risk of 40 million euros was recognised this quarter in the financial statements of CACIB (Large customers). The sharp increase in the contribution from equity-accounted entities (+72.5% to 218 million euros) offset the absence of gains on other assets this quarter, compared with a gain of 25 million euros in the first quarter of 2016. Underlying7 pre-tax income increased by +24.8% year-on-year. Underlying7 net income Group share increased even more, by +33.3% to 1,654 million euros, due to the gain on disposal of Credicom in Greece (15 million euros after tax), a decrease in the underlying7 effective tax rate from 37.2% in the first quarter of 2016 to 35.2% this quarter, and stable non-controlling interests. The Regional Banks continued to enjoy buoyant business momentum both in lending (+5.3% at end-March 2017 versus end-March 2016) and deposits (+4.6%). Growth in home loans (+7.6%) accelerated further compared with the growth rate at end-December 2016, as did growth in demand deposits (+17.6%), while consumer finance outstandings were up sharply (+9.1% year-on-year). Lastly, the strong momentum in personal and property insurance continued apace. This commercial performance of the Regional Banks made a significant contribution to growth in Crédit Agricole S.A.'s business lines, many of whose products they distribute as the Group's leading distribution channel. The year-on-year comparison of the Regional Banks' first quarter revenues were affected by the transaction to simplify the Group's structure ("Eureka"), which took place last year. Stated revenues were down -0.9% year-on-year to 3,529 million euros. Excluding these effects (-174 million euros) and in the absence of any movement in home purchase savings provisions in the first quarter of either 2017 or 2016, underlying7 revenues increased by +3.9%, thanks to growth in both interest income (+1.5%) and fee and commission income (+3.2%) compared with the first quarter of 2016. Operating expenses increased by +3.5% to 2,178 million euros and by +3.4% excluding SRF, giving a cost/income ratio excluding SRF of 61.7%. Cost of risk decreased by -21.4% year-on-year to 116 million euros. In all, the Regional Banks' contribution to Crédit Agricole Group's underlying7 net income Group share was 755 million euros in the first quarter 2017, a year-on-year decrease of -8.6%. Excluding the impacts of the transaction to simplify the Group's structure, net income Group share was up +5.1%. The performance of the other Crédit Agricole Group business lines is described in detail in the section of this press release on Crédit Agricole S.A. During the quarter, Crédit Agricole Group's financial solidity remained strong, with a fully-loaded Common Equity Tier 1 (CET1) ratio of 14.5%, stable compared with end-December 2016. This ratio provides a substantial buffer above the distribution restriction trigger applicable to Crédit Agricole Group as of 1 January 2019, set at 9.5% by the ECB. The impact of the consolidation of Pioneer Investments is estimated at -35 basis points, as of mid-2017. The TLAC ratio was 20.5% at 31 March 2017, excluding eligible senior preferred debt, versus 20.3% at end-December 2016. This level already exceeds the 2019 minimum requirement of 19.5%, whereas the regulatory calculation of this ratio allows for the inclusion of eligible senior preferred debt (up to 2.5%). After the successful inaugural issue of senior non-preferred debt at the very end of 2016, just after the enactment of the law authorising such issues, the Group further strengthened its TLAC ratio by issuing 3.4 billion euros equivalent of senior non-preferred debt in the first four months of the year. The phased-in leverage ratio stood at 5.7%, stable compared with end-December 2016. Credit Agricole Group's liquidity position is robust. Its banking cash balance sheet, at 1,116 billion euros at 31 March 2017, showed a surplus of stable funding over LT applications of funds of 116 billion euros, up by +5 billion euros compared with end-December 2016 and by +2 billion euros compared with the first quarter of 2016. It exceeded the Medium Term Plan target (of over 100 billion euros). The surplus of stable funds financed the HQLA securities portfolio generated by the LCR requirement of customer and customer-related activities. Liquidity reserves including valuation gains and haircuts related to the securities portfolio amounted to 255 billion euros, covering gross short-term debt almost three times over. Crédit Agricole Group issuers raised 14.1 billion euros equivalent of debt on the market in the first quarter of 2017, of which 52% was raised by Crédit Agricole S.A. (7.3 billion euros), versus just over 33 billion euros for the whole year 2016. Credit Agricole Group also placed 1.3 billion euros of bonds in its retail networks (Regional Banks, LCL and Cariparma). After a particularly active month of April, Crédit Agricole S.A. had issued a total of 11.3 billion euros since the beginning of the year, completing 70% of its 2017 market funding programme. Dominique Lefebvre, Chairman of SAS Rue La Boétie and Chairman of Crédit Agricole S.A.'s Board of Directors, commented the Group's results and activities for the first quarter of 2017: "In the first quarter of 2017, Crédit Agricole Group once again demonstrated the robustness of its Universal customer-focused banking business model and the synergies that could be generated by a customer approach common to the various business lines. This was reflected in strong business momentum and results, which bodes well for the success of our Strategic Ambition 2020 plan." Crédit Agricole S.A.'s Board of Directors, chaired by Dominique Lefebvre, met on 10 May 2017 to examine the financial statements for the first quarter of 2017. In the first quarter of 2017, stated net income Group share came to 845 million euros. Specific items10 for the quarter were limited to an impact of -50 million euros on net income Group share (-81 million euros before tax and non-controlling interests), exclusively due to recurring volatile accounting items (issuer spread, DVA and loan portfolio hedges in Large customers). In the first quarter of 2016, specific items10 had an impact on net income Group share of -167 million euros (-395 million euros before tax and non-controlling interests), mainly reflecting transactions in preparation for the transaction to simplify the Group's structure (non-taxable dividends received from the Regional Banks for +256 million euros and upfront payment of the liability management operation for -683 million euros before tax)10. Excluding specific items10, underlying10 net income Group share for the first quarter of 2017 was 895 million euros, 2.3 times higher than in the first quarter of 2016, which was a low base for comparison, even on an underlying basis10. Underlying10 earnings per share came to 0.27 euros per share, 2.8 times higher than in the first quarter of 2016. It should be noted that, as is the case for each first quarter of the year, net income Group share includes a high level of charges arising from IFRIC 21, which requires annual charges to be recognised in the quarter in which they are due, and not spread across the year. In first quarter of 2017, these charges totalled about 338 million euros before tax, or 317 million euros in net income Group share, including 224 million euros in SRF (228 million euros in 2016 and 192 million euros in the first quarter of 2016). As in previous quarters, these excellent underlying13 results were driven mainly by strong growth in revenues coupled with good cost control and low cost of risk, including a decrease in cost of credit risk, i.e. excluding the non-specific provision for legal risk (40 million euros). Revenue growth was driven by strong business momentum in all Crédit Agricole S.A. Group's business lines and distribution networks, as well as the Regional Banks which distribute their products. This momentum reflects an improvement in economic activity in the Group's core European markets, but above all, the robustness of the Universal customer-focused banking model, which encourages cross-selling between the specialised business lines and the retail banks and between the specialised business lines themselves. Cross-selling is a core component of the "Strategic Ambition 2020" plan and drives the Group's revenue growth. Activity was buoyant in all business lines: Driven by this strong momentum in all business lines, underlying revenues were up +14.0% compared with the first quarter of 2016. Underlying revenues of the business lines (excluding Corporate centre) increased by +10.0%. Good control over operating expenses, which increased by +1.6% or +0.7% excluding SRF, generated a strong jaws effect, thereby improving the underlying13 cost/income ratio excluding SRF by more than 8 percentage points (8.3) year-on-year to 62.7%. Cost of credit risk was stable at 399 million euros (versus 402 million euros in the first quarter of 2016), but this quarter it included a non-specific provision for legal risk of 40 million euros. Cost of credit risk therefore decreased by -10.6% to 359 million euros, representing 37 basis points of consolidated outstandings versus 39 basis points in the first quarter of 2016, still below the 50 basis points assumption in the Medium-Term Plan. Thanks to these items and a good contribution from equity-accounted entities, which increased by +75.1% or +92 million euros mainly due to a very high contribution from Eurazeo recognised in Corporate centre and an increase in the contribution from the consumer finance joint ventures, underlying pre-tax income before operations sold and non-controlling interests increased by +85.1% to 1,368 million euros. As a result of more modest growth in underlying tax (effective tax rate of 32.4% versus 38.6% at first quarter 2016) and non-controlling interests, coupled with a 15 million euros gain on the disposal of Credicom in Greece, underlying net income Group share increased by +126% or 2.3 times compared with the first quarter of 2016. By business line, more than half of the growth in underlying16 revenues (+587 million euros or +14.0%) came from Large customers (+286 million euros or +23.7% and +13.7% excluding xVA), driven by a good commercial performance and a weak base for comparison in the first quarter of 2016. The second largest contributor was Corporate centre (+140 million euros) thanks to the full impact of Eureka (+222 million euros including liability management) compared with the first quarter of 2016, followed by Asset gathering (+72 million euros or +6.1%), Retail banking (+51 million euros or +3.5%) and Specialised financial services (+38 million euros or +5.9%), thanks to their strong business momentum. It should be noted that the increase in LCL's revenues (+69 million euros or +8.2%) benefited from the positive cumulative impacts of home loan renegotiation fees and early repayment penalties (+32 million euros compared with the first quarter of 2016) and the funding cost adjustment (+18 million euros), coupled with strong business momentum (commissions up +3,7% versus first quarter 2016) more than offsetting the persistent negative effects of low interest rates on margins. The weak growth in underlying16 operating expenses (+21 million euros or +0.7% year-on-year excluding SRF) reflects strong cost control in all business lines, the increase being mainly due to sustained business activity in Large customers (+27 million euros or +3.4%) and investment in business development in Asset gathering (+35 million euros or +5.9%) and Specialised financial services (+3 million euros or +1.0%). Operating expenses continued to decline in Retail banking (-31 million euros or -3,0%), particularly at LCL (-26 million euros or -4.1%). Cost of credit risk remained low, down -43 million euros or -10.6% year-on-year, excluding the legal risk provision recognised in Large customers. The main contributors to this decrease were Specialised financial services (-27 million euros or -22.5% year-on-year), International retail banking (-22 million euros or -17.5%) and Large customers (-16 million euros or -12.8%). The cost of risk on outstandings is down for the retail banking in Italy for the nine last quarters, to 87 basis points, and that of Consumer finance (CACF) stands at 134 basis points versus 140 in the first quarter of 2016 and also in the fourth quarter 2016, which was marked by a tightening of the provisioning parameters in support of the restart of the activity in spite of a strengthening of the provisions parameters on Agos. By contrast, cost of risk for LCL has more than doubled to 48 million euros (+26 million euros or +118%), but relative to a very low baseline in the first quarter of 2016 (22 million euros). Compared with the quarterly average in 2016 (46 million euros), cost of risk in the first quarter of 2017 increased by just +6.2%, representing 19 basis points of outstandings17. At end-March 2017, Crédit Agricole S.A.'s capital ratios remained high, with a ratio Common Equity Tier 1 (CET1) ratio of 11.9%, a decrease of -15 basis points compared with end-December 2016. The change over the quarter stemmed from stated net income Group share for the period (+27 basis points), offset by the provision for dividends and the AT1 coupon (-19 basis points), a decrease in unrealised gains on available-for-sale securities (-12 basis points) and other changes (-11 basis points). Risk-weighted assets were down slightly over the quarter to 300 billion euros versus 301 billion euros at 31 December 2016. The phased-in leverage ratio stood at 4.7% at end-March 2017 as defined in the Delegated Act adopted by the European Commission, a decrease of -30 basis points compared with end-December 2016. The LCR ratio for both Credit Agricole S.A. and the Group remained in excess of 110% at end-March 2017. At end-April 2017, Credit Agricole S.A. had completed 70% of its annual medium- to long-term market funding programme of 16 billion euros. It raised 7.9 billion euros equivalent of senior preferred debt and 3.4 billion euros equivalent of senior non-preferred debt. Philippe Brassac, Chief Executive Officer, commented: "The first quarter was in line with 2016 as regards implementation of the "Strategic Ambition 2020" medium-term plan. All Crédit Agricole S.A. group entities enjoyed strong growth in business momentum, which was reflected in a high level of revenues and earnings. This quarter was a successful new milestone in the achievement of our Plan targets." Crédit Agricole Group was the first French bank to obtain certification for its anti-corruption and bribery system. Issued by SGS, this BS 10500 certification is recognition of the Group's determination and the quality of its anti-corruption and bribery programme. It confirms that corruption and bribery risks are properly identified and analysed and that the programme applied by Crédit Agricole is designed to mitigate these various risks by drawing on best international practices. The certification covers all of the Crédit Agricole Group's business lines. It bears witness to the Group's commitment to put compliance and ethics at the heart of its business development. Table 3. Crédit Agricole Group - Reconciliation between the stated and the underlying results Table 5. Crédit Agricole S.A. - Reconciliation between the stated and the underlying results The financial information for the first quarter of 2017 for Crédit Agricole S.A. and the Crédit Agricole Group comprises this press release and the attached quarterly financial report and presentation, available at https://www.credit-agricole.com/en/finance/finance/financial-publications. This press release may include prospective information on the Group, supplied as information on trends. This data does not represent forecasts within the meaning of European Regulation 809/2004 of 29 April 2004 (chapter 1, article 2, §10). This information was compiled from scenarios based on a number of economic assumptions for a given competitive and regulatory environment. Therefore, these assumptions are by nature subject to random factors that could cause actual results to differ from projections. Likewise, the financial statements are based on estimates, particularly for the calculation of market values and asset impairments. Readers must take all of these risk factors and uncertainties into consideration before making their own judgement. The figures presented for the three-month period ended 31 March 2017 have been prepared in accordance with IFRS as adopted in the European Union and applicable at that date, and with prudential regulations currently in force. This financial information does not constitute a set of financial statements for an interim period as defined by IAS 34 "Interim Financial Reporting" and has not been audited. N.B. The scope of consolidation of Crédit Agricole S.A. group and Crédit Agricole Group has not changed materially since the filing with the AMF of Crédit Agricole S.A.'s 2016 Registration Document on 21 March 2017 under number D.17-0197 and update A.01 of the 2016 Registration Document containing the regulated information for Crédit Agricole Group. The sum of the values contained in the tables and analyses may differ slightly from the totals due to rounding effects. Unlike publications for previous quarters, the income statements contained in this press release show non-controlling interests with a minus sign such that the line item "net income Group share" is the mathematical addition of the line item "net income" and the line item "non-controlling interests". On 1 January 2017, Calit was transferred from Specialised financial services (Crédit Agricole Leasing & Factoring) to Retail banking in Italy. Historical data have not been restated on a pro forma basis. All our press releases are available at: - www.creditagricole.info  Pro forma P2R for 2019 as notified by the ECB  See p. 11 for further details on specific items  Calculated on an average annualised basis over four rolling quarters  See p. 11 for further details on specific items  Pro forma P2R for 2019 as notified by the ECB: 9.50% as of 1 January 2019  See p. 11 for further details on Crédit Agricole Group's specific items  See p. 11 for further details on Crédit Agricole Group's specific items  Impact of operation to simplify the Group's structure (Q1-17 impact unwinding of Switch guarantee - €115m and loan -€59m, making a total of -€174 million euros before tax, deductible at the standard rate in France)  See p. 11 for further details on Crédit Agricole S.A.'s specific items  See p. 11 for further details on Crédit Agricole S.A.'s specific items  Calculated on an average annualised basis over four rolling quarters  See p. 11 for further details on Crédit Agricole S.A.'s specific items  Calculated on an average annualised basis over four rolling quarters
News Article | April 24, 2017
Crédit Agricole S.A. has begun preliminary discussions via Crédit Agricole Cariparma SpA, its retail banking subsidiary in Italy, with the Bank of Italy and the Interbank Deposit Protection Fund (the "FITD") with a view to acquiring the Cesena ("Cassa di Risparmio di Cesena" or "Caricesena"), Rimini ("Cassa di Risparmio di Rimini" or "Carim") and San Miniato ("Cassa di Risparmio di San Miniato" or "Carismi") Savings Banks. These discussions fit with Crédit Agricole's strategic goals in Italy as presented when the Medium-Term Plan "Ambition 2020" was published and confirmed again recently. Organic growth is the priority avenue of development for its retail banking business in Italy. However, the Group reserves the right to consider in a prudent manner any opportunities arising that meet specific criteria related, among others, to size, balance sheet quality, attractiveness of the business franchise, geographical positioning and potential synergies. The deal currently being weighed up meets these stringent strategic guidelines. The addition of the three savings banks to Crédit Agricole Cariparma SpA would increase the size of its customer base by around 20%. It would also help it to expand into attractive regions of Italy, without altering its geographical positioning since the savings banks operate in neighbouring areas to its own territories. The deal would not adversely affect Crédit Agricole Cariparma SpA's finances either, since all three targets' bad debts ("sofferenze") would be deconsolidated prior to a possible sale, while they have a significant surplus of customer deposits. The project is still in its very early stages. Its completion is contingent upon a positive outcome to the due diligence process, which is set to begin shortly and, at the appropriate juncture, approval from the relevant authorities. Based on the information currently available, its negative impact on Crédit Agricole S.A.'s and the Crédit Agricole Group's CET1 ratios would be less than 10bp. Crédit Agricole press contacts Charlotte de Chavagnac 01 57 72 11 17 - email@example.com Alexandre Barat 01 43 23 07 31 - firstname.lastname@example.org All our press releases are available at https://twitter.com/Credit_Agricole
News Article | November 10, 2016
The Bank is waiting for the authorisation from the Supervisory Authority to acquire GE Capital Interbanca -Net banking income: 237,7 million Euro (-27,6%) -Net profit from financial activities: 218,2 million Euro (-28,5%) -Operating costs: 118,7 million Euro (+46,9%) -Profit for the period: 66,3 million Euro (-55,5%) -Cost of credit quality for trade receivables: 86 bps -Bad loans ratio in the trade receivables segment: 1,2%; -Hiring up: 157 new staff added in the first 9 months of 2016 (+12,1%); -Common Equity Tier 1 (CET1): 15,8% (15,8% at 31 December 2015)  ; -Total Own Funds Capital Ratio: 15,8% (15,8% at 31 December 2015) . -Net banking income: 86,8 million Euro (+38,4%) -Net profit from financial activities: 83,0 million Euro (+45,1%) -Profit for the period: 27,1 million Euro (+50,6%). Mestre (Venice), 10 November 2016 - The Board of Directors of Banca IFIS met today under the chairmanship of Sebastien Egon Fürstenberg and approved the interim financial report for the first nine months of 2016. "We are very satisfied with the Non-Performing Loans segment - said Giovanni Bossi, Banca IFIS CEO - It is proving to be capable of seizing opportunities in a constantly evolving market. In this sector, it is crucial to swiftly adopt innovative solutions, ensuring the entire process is always efficient. In the trade receivables sector, which is the Bank's core business, we continue the strategy of refocusing on smaller-sized but more profitable market segments. The number of corporate customers is rising sharply. We are waiting - added the CEO - for the authorisation from the Supervisory Authority to complete the acquisition of GE Capital Interbanca. We have made significant progress on the analyses required to achieve a smooth integration: we believe we will be efficient starting from the closing date". Highlights for the first nine months (reclassified data ) Here below are the main factors that contributed to the result for the nine months of 2016: -Net banking income3 totalled 237,7 million Euro, -27,6% from 328,1 million Euro in the first nine months of 2015. Excluding the gain made in April 2015 as part of the rebalancing of the government bond portfolio (124,5 million Euro), at 30 September 2016 net banking income was up 16,7%. There was a significant increase in the DRL segment (112,0 million Euro, +262,7%). Also the trade receivables segment was positive (121,3 million Euro, +2,0%), while Tax Receivables (10,9 million Euro, -5,6%) and Governance & Services were down. The latter posted a negative 6,4 million Euro margin, compared to a positive 166,9 million Euro at 30 September 2015. The reason for this decrease is twofold: the Group recognised in 2015 the gain on the sale conducted as part of the rebalancing of the AFS securities portfolio, reducing interest income in the following periods; and funding costs increased as a result of rising volumes as well as the introduction of 2-, 3-, and 5-year maturities starting in September 2015. -Net value adjustments  totalled 19,5 million Euro. They referred for 15,5 million Euro to loans to customers (compared to 14,9 million Euro at 30 September 2015, +4,1%), and for 4,0 million Euro to impairment losses on unlisted equity securities -Operating costs totalled 118,7 million Euro, up 46,9% from 80,8 million Euro in September 2015; this was largely attributable to the DRL segment-especially as far as pre-collection and collection costs are concerned. As for personnel expenses, amounting to 41,9 million Euro (36,1 million Euro in September 2015, +16,2%), the increase was the result of new hiring in the first nine months of 2016 (157 staff, +12,1%), consistently with the goal to strengthen some areas and services supporting the business, and especially the DRL segment. At 30 September 2016, the Group's employees numbered 823. The cost/income ratio stood at 49,9% at 30 September 2016, compared to 24,6% at 30 September 2015. Profit for the period totalled 66,3 million Euro, compared to 148,8 million Euro in September 2015 (down 55,5%). For a better understanding of the result for the period and the relevant comparative data, the following should be noted: -Interest receivable and similar income: the item included 9,0 million Euro arising from the reclassification to amortised cost of a sizeable portion of the DRL portfolio following the end of the documentary verification process and the ensuing collection of bills of exchange and settlement plans. -Gain on the sale of receivables: the item largely consisted of 26,8 million euro in gains on the sale of portfolios of DRL receivables (of which 21,0 million Euro made in the third quarter). -Gain on the sale of available for sale financial assets, totalling 5,5 million Euro in the first nine months of 2016 as a result of the sale of part of the bond portfolio, compared to 124,5 million Euro in the prior-year period arising from the rebalancing of the bond portfolio. -Other administrative expenses included the 2,1 million Euro contribution for the whole of 2016 to the Resolution Fund. -Net allocations to provisions for risks and charges included 2,0 million Euro in the estimated annual ex ante contribution for the FITD ("Fondo Interbancario per la Tutela dei Depositi", Interbank Deposit Protection Fund) on the basis of by the Directive 2014/49/UE (Deposit Guarantee Schemes Directive - DGS). As for the contribution of individual segments to the result for the first nine months of 2016, here below is a description of how the sectors that made a significant or greater-than-expected contribution performed: -Trade Receivables: the net banking income of the trade receivables segment amounted to 121,3 million Euro (+2,0% compared to 118,9 million Euro in the first nine months of 2015). The segment generated 7,5 billion Euro in turnover (+3,2% from 30 September 2015), with 4.930 financed SMEs (up 14,8% compared to the prior-year period) and 2,6 billion Euro in outstanding loans (-7,0% from December 2015). As for net value adjustments on receivables, they totalled 15,2 million Euro (14,8 million Euro at 30 September 2015, +3,2%). The ratio of credit risk cost concerning trade receivables to the relevant average loan balance over the last 12 months was down to 86 bps from 79 bps at 30 September 2015 and 90 bps at 31 December 2015. -DRL (Distressed Retail Loans): net banking income amounted to 112,0 million Euro, compared to 30,9 million Euro in the prior-year period (+262,7%). The results for the first nine months of 2016 were positively influenced by the continuing debt collection operations-through bills of exchange and expressions of willingness-as well as the reclassification to amortised cost of a sizeable portion of the portfolio following the end of the documentary verification process and the ensuing collection of bills of exchange and settlement plans, adding nearly 9,0 million Euro to net banking income. Another boost came from the closing of sales that generated 26,8 million Euro in gains, as well as the acceleration in the activation of the plans collected, ensuring a timelier contribution to net banking income. In the period, the Bank revised the compensation policy for debt collection networks, aligning the payment of the commission with the accounting activation of the relevant plan. -G&S (Governance and Services): net banking income was down 103,9%, from a positive 166,8 million Euro to a negative 6,4 million Euro. This was largely the result of the rebalancing of the securities portfolio completed in April 2015, reducing interest income in the following periods, as well as of the increase in funding costs because of rising volumes as well as the introduction of 2-, 3-, and 5-year rendimax maturities. This was partly offset by the sale of 2,1 billion Euro worth of government bonds in the first half of 2016, resulting in a 5,5 million Euro gain. As for retail funding, it was slightly above 4,0 billion Euro (3,1 billion Euro at the end of 2015). The relevant cost amounted to 1,42%, compared to 1,22% in September 2015, and is expected to rise marginally as a result of the new rendimax maturities. Concerning the statement of financial position, here below is the breakdown of net non-performing exposures in the trade receivables segment alone: -Net bad loans amounted to 31,9 million Euro, +3,2% from the end of 2015; the segment's net bad-loan ratio was 1,2%, compared to 1,1% at 31 December 2015. Net bad loans were unchanged from 31 December 2015, amounting to 5,4% as a proportion of equity. The coverage ratio stood at 88,1% (87,9% at 31 December 2015); -The balance of net unlikely to pay was 49,6 million Euro, +25,4% from 39,6 at the end of 2015. The increase was largely attributable to a number of individually significant positions previously classified under net non-performing and performing past due exposures. The coverage ratio stood at 32,6% (32,1% at 31 December 2015) -Net non-performing past due exposures totalled 130,0 million Euro, compared with 58,2 million Euro in December 2015 (+123,4%). The increase was attributable to past due loans due from the Public Administration that were purchased outright, rising from 1,2 million Euro at the end of 2015 to 48,4 million Euro at 30 September 2016 (with 47,5 million Euro referring to the multi-utility segment). The coverage ratio stood at 1,7% (2,6% at 31 December 2015) At 30 September 2016, consolidated Equity was 586,6 million Euro, compared to 573,5 million Euro at 31 December 2015 (+2,3%). The change was largely attributable to the 66,3 million Euro profit for the period and the 40,3 million Euro dividend payout for 2015. As for capital adequacy ratios, the Total Own Funds Capital Ratio was 14,5% (14,9% at 31 December 2015) and the Common Equity Tier 1 (CET1) 13,5% (14,2% at 31 December 2015). Consolidated own funds, risk-weighted assets and solvency ratios at 30 September 2016 were determined based on the regulatory principles set out in Directive 2013/36/EU (CRD IV) and Regulation (EU) 575/2013 (CRR) dated 26 September 2013, which were transposed in the Bank of Italy's Circulars no. 285 and 286 of 17 December 2013. Article 19 of the CRR requires to include the unconsolidated holding of the banking group in prudential consolidation. The capital adequacy ratios of the Banca IFIS Group alone, presented exclusively for information purposes, would be as showed in table in the attached press release. The supervisory authorities have informed the Bank of its new minimum capital requirements, which are the following: Common Equity Tier 1 (CET1) 7%; Tier 1 Ratio 8,5%; Own Funds Capital Ratio 10,5%. In light of the Bank's capital adequacy ratios at 30 September 2016, its position is especially robust. For more details, please refer to the Consolidated Interim Financial Report at 30 September 2016, available under the "Corporate governance" Section of the website www.bancaifis.com Pursuant to Article 154 bis, Paragraph 2 of the Consolidated Law on Finance, the Corporate Accounting Reporting Officer, Mariacristina Taormina, declares that the accounting information contained in this press release corresponds to the company's accounting records, books and entries.  Net value adjustments on DRL receivables, totalling 23,6 million Euro at 30 September 2016 compared to 3,0 million Euro at 30 September 2015, were reclassified to Interest receivable and similar income to present more fairly this particular business, for which net value adjustments represent an integral part of the return on the margin.  The reported total Own Funds refers only to the scope of the Banca IFIS Group, thus excluding the effects of the prudential consolidation in the parent company La Scogliera S.p.A. Common Equity Tier 1 capital includes the profit for the period net of estimated dividends. The financial statements attached to this press release show also total Own Funds including said effects.  Net value adjustments on DRL receivables, totalling 23,6 million Euro at 30 September 2016 compared to 3,0 million Euro at 30 September 2015, were reclassified to Interest receivable and similar income to present more fairly this particular business, for which net value adjustments represent an integral part of the return on the investment.
News Article | February 20, 2017
Reform of the regulatory framework and banking supervision in Angola A delegation of the National Bank of Angola (BNA) headed by Governor Valter Duarte da Silva was in Paris for meetings with the Bank of France and other French banking system institutions, to strength institutional relations and raise awareness in the French financial sector for the reform of the regulatory and banking supervision framework in Angola. Through the BNA, Angola has developed a very strong effort to quickly adapt its financial system to international prudential standards and good practices with the objective of restoring international credibility and confidence in the Angolan financial system, aiming its recognition abroad by their counterparts. BNA has been imposing on Angolan commercial banks the adoption of best practices in financial regulation and supervision, and as a result of this effort seven of the largest banks operating in Angola have already adopted International Accounting and Reporting Financial Statements Standards. "Our expectation is that the European Central Bank and the United States Federal Reserve will recognize the National Bank of Angola as an entity of equivalence in banking regulation and supervision in the first half of this year," said Valter Duarte Silva. The Angolan visit to the French capital is part of a program of contacts and visits of the BNA to the world's financial centers. The BNA has developed several contacts with international institutions and counterparts such as the World Bank and the International Monetary Fund, the Federal Reserve of the United States, the Bank of England, the Bank of France, the Bank of Italy, the Bank of Portugal And the Reserve Bank of South Africa in order to adapt to good banking supervision practices in Europe and the United States, and to show what has already been done in Angola, as well as to train its technicians and senior management. "Our work has been developed in partnership with the International Monetary Fund and the World Bank and in close collaboration with the central banks of Portugal, South Africa, Italy, the United Kingdom, France and the United States of America, with which we have already established protocols for training human resources and for technical assistance," said the governor of the BNA. The Angolan delegation has held meetings at the highest level with the Governor of the Bank of France, Mr. François Villeroy Galhau, and with representatives of French banks such as BNP Paribas, Crédit Agricole and Natixis, as well as institutions such as the French Banking Federation, MEDEF International, The International Financial Action Task Force (FATF) and the Paris Club.
News Article | March 16, 2016
The happiest country in the world is famous for its butter cookies, Lego bricks and fairy-tale writer Hans Christian Andersen — it's Denmark, according to the 2016 World Happiness Report. Denmark's top spot isn't exactly a surprise. The country ranked first in the 2013 World Happiness Report and third in the 2015 report. In fact, most of the top 10 happiest countries have retained their spots from last year, "although there has been some swapping of places," the new report said. The new report comes out just before World Happiness Day on March 20, and was released at the Bank of Italy during a conference on happiness and subjective well-being today (March 16). [See the Top 20 and Bottom 20 Happiest Countries of 2016] Denmark scored a happiness rating of 7.526 out of a possible 10 points, with Switzerland (7.509), Iceland (7.501) and Norway (7.498) close on its heels. The United States (7.104) placed 13th — up two spots from last year, when it ranked 15th out of 158 countries. In an effort to foster sustainable development, U.N. Secretary-General Ban Ki-moon commissioned the Sustainable Development Solutions Network (SDSN) in 2012, with goals such as ending world hunger and poverty, ensuring healthy lives, and promoting well-being. The network of leaders from academia, governments and the private sector published their first happiness report in 2012 and every year after that except for 2014 because at first the report was published with18-month intervals. The 2016 Happiness Report includes the rankings of 157 countries based on survey data from 2013 to 2015. Each country had an average sample size of 3,000 people who answered questions pertaining to six variables: gross domestic product (GDP) per capita, healthy life expectancy, social support, freedom, generosity and absence of corruption. The top 10 countries are "all small or medium-sized Western industrial countries, of which seven are in Western Europe," according to the report. Surprisingly, the top 10 countries averaged a happiness score of 7.4 — more than double the 3.4 average of the bottom 10 countries, according to the report. The rankings are telling, as they account for more than just the economics of a country, said Jeffrey Sachs, director of The Earth Institute at Columbia University and co-editor of the report. [5 Weird Ways to Measure Happiness] "Measuring self-reported happiness and achieving well-being should be on every nation's agenda as they begin to pursue the Sustainable Development Goals," Sachs said in a statement. "Indeed, the goals themselves embody the very idea that human well-being should be nurtured through a holistic approach that combines economic, social and environmental objectives." In fact, five governments (Bhutan, Ecuador, Scotland, the United Arab Emirates and Venezuela) have appointed "ministers of happiness," according to the report. However, it's unclear how much these ministers have helped to boost happiness. Though Venezuela created the position in 2013, the country dropped from the 20th- to 23rd-happiest country between 2013 and 2015, according to CNN. Venezuela isn't the only country to move up or down the blissful ladder. The authors of the report compared data from 2005-2007 with that from 2013-2015, and found that out of 126 countries, 55 showed significant increases in happiness while 45 showed significant decreases. The remaining 26 countries had no significant change, the researchers found. "The rankings show both consistency and change," said study co-editor John Helliwell, a professor emeritus of economics at the University of British Columbia. "The consistency at the top reflects mainly that life evaluations are based on life circumstances that usually evolve slowly, and that are all at high levels in the top countries. "The year-to-year changes are also moderated by the averaging of data from three years of surveys in order to provide large sample sizes," he added. "However, when there have been long-lasting changes in the quality of life, they have led to large changes in life-evaluation levels and rankings, as shown by the many countries with large gains or losses from 2005-2007 to 2013-2015." Overall, average happiness worldwide is 5.1, the researchers found. They added that people tend to be happier in societies that have more equal levels of happiness among its people. Copyright 2016 LiveScience, a Purch company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
News Article | December 10, 2016
Marketforce to Host The Future of Clearing & Settlement on 7th March in London The Future of Clearing and Settlement brings together key players from Europes leading CCPs, CSDs, exchanges and user community to explore the strategies being employed to harness the opportunities of this developing era. London, United Kingdom, December 10, 2016 --( As the leading strategic event in the sector, The Future of Clearing & Settlement is your chance to hear from the leaders at the forefront of the industry. Hear from clearing houses, CSDs, custodian banks and more on the most pressing topics in post-trade. Join over 120 senior executives as they discuss Brexit, blockchain, value-adding services and more. Companies that attended in 2016: Athens Exchange, Bank National Clearing Centre, Bank of Italy, BATS Chi-X Europe, Baymarkets, BNP Paribas Securities Services, BNY Mellon, CACEIS, Citigroup, Clearstream, CME Clearing Europe, Credits, Deutsche Bank, Deutsche Börse Group, Deutsche Bundesbank, Digital Asset Holdings, Eurex, Euroclear, Euronext, European Central Bank, European Central Counterparty, Hellenic Exchanges Group, Irish Stock Exchange, Istanbul Stock Exchange, Japan Exchange Group, Keler, KPMG, LCH.Clearnet, Lhotse Summit AG, London Metal Exchange, London Stock Exchange Group, Monte Titoli, Morgan Stanley, Nasdaq, National Bank of Poland, National Settlement Depository, Newedge Group, Optiver, Pershing, Royal Bank of Canada, SETL, SIX SIS, The Depository Trust & Clearing Corporation, VP Securities. "Very good – worthwhile. Stimulating content and dialogue" - Head of UK Settlements, Custody, HSBC Securities Services, HSBC "Very good. High level speakers & delegates" - Head of Operations, Tullett Prebon Please visit the website at http://www.marketforce.eu.com/clearing16 for more information on the programme and speakers. For any queries call +44 (0)207 760 8699 or send an email at email@example.com. London, United Kingdom, December 10, 2016 --( PR.com )-- The industry faces significant change as the implications of Brexit become clear and the implementation of blockchain begins to live up to its revolutionary potential. Attend this conference to discuss the implications of this rapid change, interrogate the realities of new post-trade landscape, and network with over 120 industry peers at this strategic one-day event.As the leading strategic event in the sector, The Future of Clearing & Settlement is your chance to hear from the leaders at the forefront of the industry.Hear from clearing houses, CSDs, custodian banks and more on the most pressing topics in post-trade. Join over 120 senior executives as they discuss Brexit, blockchain, value-adding services and more.Companies that attended in 2016:Athens Exchange, Bank National Clearing Centre, Bank of Italy, BATS Chi-X Europe, Baymarkets, BNP Paribas Securities Services, BNY Mellon, CACEIS, Citigroup, Clearstream, CME Clearing Europe, Credits, Deutsche Bank, Deutsche Börse Group, Deutsche Bundesbank, Digital Asset Holdings, Eurex, Euroclear, Euronext, European Central Bank, European Central Counterparty, Hellenic Exchanges Group, Irish Stock Exchange, Istanbul Stock Exchange, Japan Exchange Group, Keler, KPMG, LCH.Clearnet, Lhotse Summit AG, London Metal Exchange, London Stock Exchange Group, Monte Titoli, Morgan Stanley, Nasdaq, National Bank of Poland, National Settlement Depository, Newedge Group, Optiver, Pershing, Royal Bank of Canada, SETL, SIX SIS, The Depository Trust & Clearing Corporation, VP Securities."Very good – worthwhile. Stimulating content and dialogue"- Head of UK Settlements, Custody, HSBC Securities Services, HSBC"Very good. High level speakers & delegates"- Head of Operations, Tullett PrebonPlease visit the website at http://www.marketforce.eu.com/clearing16 for more information on the programme and speakers. For any queries call +44 (0)207 760 8699 or send an email at firstname.lastname@example.org.
News Article | September 20, 2016
There's absolutely nothing remarkable about the AT&T store near my office in San Francicso. Once you're inside, it could be any neighborhood AT&T shop, anywhere in the country. On September 28, however, it's being replaced by a 24,000-square-foot West Coast flagship store that will be the largest AT&T retail establishment in the country—and, I imagine, the most spectacular. I recently got a sneak peek inside as the company raced to put the finishing touches on the place. The new space at One Powell Street used to be a sprawling Forever 21 store, but more importantly, it's a historic 1921 building that was originally the headquarters of the Bank of Italy, which later became Bank of America. Designed by a noted San Francisco architecture firm, Bliss and Faville, who also did the iconic St. Francis Hotel, One Powell is strikingly evocative of its era and located right next to a cable-car turnaround generally teeming with tourists. Inside, the building has an amazingly ornate ceiling, faux marble walls, and other touches that AT&T is showing off and restoring where necessary. But the company is also packing the place with technology, including a 48-foot-wide curved video screen that will show a rotating sequence of images intended to reinforce the idea that AT&T is an integrated provider of products and services designed to connect, entertain, and inspire. The main floor will be devoted to phones and other gadgets, plus an assortment of accessories that will include some posher-than-usual items from brands such as Kate Spade. (Besides the splashy front entrance, there's a low-key back door that AT&T expects locals might use if they're doing something mundane like coming in to pay a bill.) Take the escalator up to the mezzanine, and you'll find a series of experiences—they vaguely reminded me of Disney World's Epcot—such as a kitchen equipped with a smart refrigerator; a smart bike you can pedal while watching scenes of San Francisco; a living room-like area equipped with AT&T's TV service, DirecTV; and many screens showing promotional videos. The goal, obviously, is to get consumers thinking about the company as something bigger than a provider of wireless services for smartphones. With the notable exception of the Apple Store's fanciest branches, the tech industry doesn't have a great track record of building over-the-top flagship stores that actually do well enough to stay around for the long haul. (Some of us remember the long-gone massive storefronts that Microsoft and Sony opened in 1999 at the Metreon, a few blocks from One Powell.) AT&T obviously built this new flagship to make a statement, not just move product. In the end, though, it will only flourish if the selection of items is appealing and the customer service is up to snuff. And even then, it seems like a pricey undertaking. But if you happen to find yourself near the corners of Powell and Market Streets in San Francisco anytime soon, it's well worth stepping inside and taking it all in. Did I mention that the ceiling is incredible?
News Article | November 30, 2016
Chairman Fürstenberg: "Historical milestone in our journey to become the go-to solutions provider for SME financing". Milan, November 30, 2016 - In reference to the acquisition of GE Capital Interbanca S.p.A. announced on July 28, 2016 and following the authorization granted by the Supervisory Authorities (Bank of Italy and the European Central Bank) on November 29, 2016, Banca IFIS announces that the purchase of GE Capital Interbanca S.p.A. was concluded today. The details of the agreement are as follows: - The transaction involves the acquisition of a 99.99% interest in GE Capital Interbanca S.p.A. including its related companies involved in factoring, leasing (financial and operational) and lending; - Price paid: 160 million euro, subject to an adjustment mechanism to be calculated on the basis of the financial situation at the execution date; - Full repayment of GE Capital Interbanca and its subsidiaries' debt to GE Capital, which amounts to approximately 2.1 billion euro; "By uniting the relative strengths of two highly capitalized Groups and through their respective competences, we identified the right platform to become the go-to provider for financing solutions to small Italian enterprises" stated Giovanni Bossi, CEO of the Banca IFIS Group. Sebastien Egon Fürstenberg, Chairman of Banca IFIS stated today that "this is another stage for our common path - an important step, not the finish line - which now allows us to forge ahead with new skills, new people, new challenges in a single direction". For further details about the transaction and its strategy, please refer to the July 28, 2016 announcement: http://www.bancaifis.it/en/press-releases/banca-ifis-and-ge-capital-agreement-reached-for-the-acquisition-of-ge-capital-interbanca/ For this acquisition Banca IFIS relied on Banca IMI and KPMG Advisory Corporate Finance as financial advisors and on Clifford Chance as legal advisors; KPMG Deal Advisory carried out the due diligence process.
Bartocci A.,Bank of Italy |
Pisani M.,Bank of Italy
Energy Economics | Year: 2013
This paper evaluates the environmental and macroeconomic implications for France, Germany, Italy and Spain of taxing motor vehicle fuels for private transportation, a sector not subject to the Emissions Trading System, so as to reduce taxes on electricity consumption and increase subsidies to renewable sources of electricity generation. The assessment is based on a dynamic general equilibrium model calibrated for each of the four countries. The results suggest that the measures posited will reduce carbon dioxide emissions in the transportation sector and favor the development of electricity generation from renewable sources, thus limiting the growth of emissions from electricity generation. The measures do not jeopardize economic activity. The results are robust whether implementation is unilateral in one country or simultaneous throughout the EU. © 2013 Elsevier B.V.
Dalmazzo A.,University of Siena |
De Blasio G.,Bank of Italy
Papers in Regional Science | Year: 2011
By exploiting the Roback model, we analyze the impact of agglomeration on both production and consumption. We postulate that the evaluation of urban amenities may vary across skill-groups. Empirically, we use the Bank of Italy's survey of household income and wealth (SHIW) dataset, and find evidence of a substantial urban rent premium, while we do not find support for an urban wage premium. We conclude that urban agglomeration is predominantly a source of positive amenities for residents and, in particular, highly-educated individuals seem to care about the welfare effects of agglomeration more than their less-educated counterparts. Survey results also suggest that urban skilled workers benefit from jobs of higher quality, and from shopping possibilities and cultural consumption opportunities, such as cinemas, theatres, and museums. Resumen: Aprovechándonos del modelo de Roback, analizamos el impacto de la aglomeración tanto en la producción como en el consumo. Postulamos que la valoración de la oferta de servicios urbanos puede variar entre grupos con un grado diferente de cualificación. Empíricamente, utilizamos los datos de la encuesta del Banco de Italia sobre ingresos familiares y patrimonio (SHIW, siglas en inglés), y mientras que encontramos pruebas de una prima de renta urbana sustancial no las encontramos para una prima salarial urbana. Concluimos que la aglomeración urbana es predominantemente una fuente de ventajas positivas para los residentes y, en particular, parece que a las personas con un alto nivel educativo les importa más los efectos de bienestar de la aglomeración que a quienes poseen un nivel educativo más bajo. Los resultados de la encuesta sugieren también que la mano de obra urbana cualificada disfruta tanto de mejores puestos de trabajo como de una mayor oferta al ir de compras y oferta cultural en cuanto a cines, teatros y museos. © 2010 the author(s). Papers in Regional Science © 2010 RSAI.