(Finance) – The Board of Directors of Central Bank Cashier approved at the end of June the Group Strategic Plan for the four-year period 2024-2027 and shared it with the top management of the affiliated Banks and controlled companies during the Territorial Assemblies in early July. The 2024-2027 Strategic Plan updates and develops the foundations laid by the Plan approved last year.
“In a changing and complex economic and geopolitical context, the Cassa Centrale Group confirms its distinctive identity values of cooperation, reciprocity and relationship with customers and strong proximity to the territory – states George FracalossiPresident of Cassa Centrale Banca – In line with our path, through the new Plan we have set ourselves ambitious goals to best serve the communities we represent, with ever-improving quality services and a strong focus on sustainability”.
“Our solidity and the excellent results of this first five years of operation of the Group put us in a position to make significant investments in skills and new technologies to further develop the relationship with our Members and customers – he declares Sandro BolognesiCEO of Cassa Centrale Banca – The directions of the Strategic Plan arise from constant sharing with the top management and specialist functions of the affiliated banks and companies in the industrial perimeter. We want to build the future of the Group together, enhancing all the entities that compose it to continue to create value and redistribute it on the territory in a sustainable way”.
The global macroeconomic context in which the Plan is inserted remains characterised by elements of uncertainty with risks linked to the continuation of geopolitical tensions in Russia, Ukraine and the Middle East. The levels of inflation are slowing down, due to the restrictive policy by the Central Banks. The Italian contextto which the Group is most exposed, provides for a average GDP growth of 0.7% per year in the 2024-2027 range. Over the same period, the inflation rate is expected to decline from 2.1% in 2024 to 1.9% in 2027.
Update of the strategic guidelines of Piano
The Strategic Plan 2024–2027 updates the Key areas of intervention envisaged in the 2023–2026 Plan: Business Development, Operational Efficiency, Risk Management and Enabling Factors such as IT and Human Capital.
The business development includes: it development commercial with the aim of strengthening the Group’s ability to fully express its potential by acting on three main pillars (Distribution model, Business Technology, Commercial coordination);credit offer with actions planned to increase the level of effectiveness of the integrated offer to the Group’s Corporate customers and further develop synergies with the Product Companies (specific ceilings are also planned which will reach 2.3 billion in 2027 in favor of PNRR initiatives and for the green transition); Wealth Management & Bancassurance where significant growth volumes are expected in the Asset Management, Funds and Sicav and Bancassurance sectors through projects linked to the consultancy model and commercial push on insurance and investment products; Money with objectives linked to the continuous improvement of the quality of customer services, the relaunch of the product offering and the increase in competitiveness in the current context of a growing market. The initiatives, once fully implemented, will lead to recurring benefits exceeding 50 million euros).
L’operational efficiency involves the continuation of the evolution initiatives and Expansion of the Back Office services cataloguealso through a greater centralization of activities, and the development of digital areas for the management of internal processes.
As for the risk managementcontinues the expansion of initiatives aimed at constant monitoring of risks and ensuring compliance with the growing expectations of the Supervisory Authority.
THE Enabling factors are: Technology and Human Capital. Priority to the progressive Core Banking Modernization of the Group, combining overall evolution with a propensity for product integration, in order to strengthen the ability to support digital business ambitions. Further vskills enhancement and inclusive development of the Group’s human capital, promoting the optimization of processes and staff development and training paths.
For the same time frame 2024 – 2027 the following have been defined: Digital Transformation Plan and the Sustainability Plansynergistic with the initiatives of the Strategic Plan.
The Sustainability Plan defines the Group ESG strategywhich leverages the distinctive characteristics of cooperative credit and aims to accompany customers and the communities in which it operates in the environmental and social transition. The offer of green financing to businesses and individuals and the expansion of the offer of sustainable investment products and solutions is accompanied by the commitment to mitigate the environmental and social impacts of the value chain and to reduce the carbon footprint of its activities and portfolios in line with Net-Zero scenarios.
The strategy of the Digital Transformation Plan It is part of the process of strengthening the role of the branch by enhancing the effectiveness of the relationship with the customer also through the use of digital technological tools to allow the Group to face future challenges, also through the enabling of simplified products and processes, the continuous growth of digital skills and the use of new technologies.
Main quantities and Plan targets
Gross credit exposure towards a constantly growing clientele with a Group target for 2027 equal to 53 billion of euros (+5.2% compared to the 2023 final value). The impaired component is expected to decrease from 2.1 billion to 1.8 billion euros over the plan period with a Gross core NPL ratio of 3.3% and a net Core NPL ratio of 0.9% in 2027 while maintaining the overall NPL coverage ratio at 73%.
There collection towards customers sees a significant growth in the indirect component following the strategic actions envisaged by the Plan. Indirect collection will reach a total amount of 57.1 billion of euros (+29.5% compared to the 2023 final levels); the main drivers are linked to a strong expansion in the volumes of Funds/SICAV (+42%) and of the Asset Management (+41%). The sectors Bancassurance and Managed Collection recorded increases of 28% and 20% respectively. The ratio between loans to customers and direct collections remains conservative at around 72% at the end of the Plan, in line with the values at the end of 2023.
In terms of income, compared to a reduction of the interest margin gap linked to the evolution of rates in the coming years, with a level of net interest contribution expected to be around 2 billion euros (CAGR 2023 -2027: -5%), we highlight the constant development of the contribution from net commissions related to the services offered by the Group, which will reach 921 million euros at the end of 2027 with an average annual growth of 3.7% compared to the 2023 values.
As a result of the dynamics mentioned above, the intermediation margin will settle at slightly higher levels than the current ones, reaching 2.9 billion of euros (2.8 billion in 2023), with a operating result of approximately 1 billion at the end of the Plan, which takes into account higher expenses related to IT and Security investments (164 million euros in the four-year period 2024 – 2027) and the increase in personnel costs, following the contractual renewal expected starting from 2024.
The main indicators of Plan to 2027 are as follows with regard to capital adequacy, risk management and liquidity: CET1 ratio at 29.5%, Loans/Funding at 72%, Core NPL net ratio at 0.9%, NPL Coverage ratio at 73%. With regard to profitability and operating efficiency, the following are expected: ROE at 6.6%, ROA at 0.8% and Primary Cost/income at 65%.