To our almost 159,000 shareholders

 

As always the Bank has maintained its traditional policy of support for local communities in its operational areas offering loans and mortgages at preferential rates to families and businesses in difficulty due to (but not exclusively) the pandemic crisis. Worthy of mention are the measures put in place to comply with government legislation and to implement the policies proposed by the ABI- The Italian Banking Association. All in all, with moratoria, ongoing loans, and government backed financing the total amount of support provided since the beginning of the Covid emergency amounts to over 7 billion euro.

Dear Shareholder, Dear Friend,

As tradition becomes, we would like to share with you one or two thoughts and considerations on events that occurred during the first semester of this year and their impact on our day-to-day business activities.

The Anti-Covid 19 Vaccination Programme has upstaged all others.  In Italy too, despite a slightly subdued initial launch, vaccination has been intensified and is now in full swing. Thanks to scientific research, a possible gradual return to normality is now on the horizon, though caution must be our watchword.             

China, the first nation to enter and exit the Covid era, had already shown signs of growth from mid- 2020 and now continues along the road to economic recovery.

In the United States of America, the economy has enjoyed a positive leap forward

In the first few months of the year the Eurozone had to come to terms with a dramatic increase in the number of cases forcing governments to take action and re-introduce restrictions of varying rigidity. Later, the state of emergency eased with resulting beneficial effects on the economy. The European Central Bank continued with its expansion policy with monthly acquisitions of significant amounts of both private and public bonds. In Italy the first three months of the year were characterized by signs of recession, albeit of modest proportions. Following this however, the trend clearly reversed. Industry began to shows signs of recovery as too did the small business sector, although not right across the board. The Food sector has essentially come through the crisis unscathed. Not so bars, restaurants, hotels, travel agents, tour operators, the service sector in general, commerce and the clothing sector; all hit hard by the emergency having been totally or partially closed for business for long periods of time.  The Tourist Season opened with great hopes of progress in the number of vaccinations. Reservations and bookings, mainly, but not exclusively, from the domestic market were encouraging. The building sector is booming thanks also to the fiscal benefits from the so-called ‘Superbonus 110%’ –incentives introduced with Decree 34/2020 supporting economic recovery.

Certainly worthy of note is the EU Next Generation (Recovery Fund) which, in tandem with the PNRR (National Recovery and Resilience Strategy) will give a real boost to our economy. Italy will receive substantial sums of capital, partially non-repayable, which will put the economy right on track to consolidate growth.

Turning to our bank, first and foremost we remember the AGM held at our head offices in Sondrio on the 11th May. As in the previous year, the meeting was held online without the physical presence of our shareholders. An AGM in relative terms if we compare it to the crowded auditorium and high turnout numbers of the past. The approximately 2,650 voters approved the Yearly Accounts by a large majority and, subsequently, the gross dividend payment of €0.06 in accordance with the limits imposed by ECB Supervision.

The financial year 2020 closed with a net profit of 75 million euro compared to the 100.7 million euro of 2019; a satisfactory result, bearing in mind the extremely difficult context in which we have had to operate. The Group net profit totaled 106.6 million euro compared to the 137.4 million of the previous year. The subsidiaries Banca Popolare di Sondrio (SUISSE) SA, Factorit Spa and Banca della Nuova Terra Spa all contributed to this result.

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    The current financial year began with encouraging results, in fact the Group closed the first quarter with a consolidated net profit of 59.6 million euro.  The (phased-in) Capital Ratios are classified among the highest in the banking system with a CET 1 Ratio standing at 16.57% and a Total Capital Ratio of 18.7% Following this result, the work done in the successive months has been intense and hence positive results are expected too for the end of the semester  As always the Bank has maintained its traditional policy of support for local communities in its operational areas offering loans and mortgages at preferential rates to families and businesses in difficulty due to (but not exclusively) the pandemic crisis. Worthy of mention are the measures put in place to comply with government legislation and to implement the policies proposed by the ABI- The Italian Banking Association. All in all, with moratoria, ongoing loans, and government backed financing the total amount of support provided since the beginning of the Covid emergency amounts to over 7 billion euro.

    Our clients have reacted positively and in a well-disciplined manner to the measures put in place to guarantee social distancing while carrying out transactions on the bank premises. Our staff have gone to great lengths to give assistance and support encouraging, where appropriate, the facilities offered by our digital banking system SCRIGNOInternet Banking as well as other online solutions. The use of the Web has also encouraged participation in the seminars organized by the International Service department

    The Bank attaches great importance to developing local interpersonal relationships, hence from June 7th the territorial network has been reinforced with the opening of a second branch in Mandello del Lario, a small industrious town on Lake Como where the bank has been operating since 1996.

    Constant communication with our clientele has confirmed the increasing awareness of sustainability issues or ESG (Environmental, Social and Governance) as it is now known, issues that figure prominently in our Company’s system of values. Indeed, since 2004 the Bank has embraced the Global Compact programme of the United Nations

    The creation of shared values, a springboard to sustainable social and economic development, is a constant feature in European recovery strategy in an effort to combat global emergencies such as climate change and environmental pollution.

    The awareness and attention given to these issues, also via our newly designed Notiziario publication, have been recognized by the independent London-based agency Standard Ethics which, in March of this year, awarded us the prestigious rating of EE placing the BPS amongst the best-positioned banks in Italy.

    Loans and sustainable investments form part of our objectives and are achieved through business best practices which bear witness to our primary aim of pursuing common well-being.  

    Also in March of this year, Scope Ratings, a German creditworthiness assessment company, confirmed the issuer rating of the Banca Popolare di Sondrio at investment grade level ‘BBB’ and the outlook remained unchanged at ‘stable’. Analysts commented positively on the Bank as a model of resilience and constant profitability.  This gives us great satisfaction at a turning point in our 150 year history and constitutes an appropriate viaticum for the future; a truly ‘popolare’, co-operative bank in name and deed, whatever the legal status, given that the Bank is obliged to convert to a joint stock company by the end of the year.

    As regards the Bank’s cultural activities- its ‘Luigi Credaro’ library featuring prominently- and in the absence of restrictions linked to the pandemic, it is hoped to recommence the traditional programme of conferences begun in 1971. The 700th anniversary of the death of Dante Alghieri together with, if we may, the 150th anniversary of our Bank’s foundation will be, (Covid permitting) an occasion to organize a conference to be held in Sondrio with the collaboration of expert partners and the participation of some of the most prominent scholars both of the Poet and our language.

    Dear Shareholder, Dear Friend

    at the beginning of the long-awaited summer holidays, even more so this year, our new-found freedom of movement will encourage exploration of Italy, both the well-known resorts as well as lesser- known corners of Dante’s beautiful country.

    With renewed vigour we wish to be at the fore of the recovery process. Sharing the fate of the community to which we belong is what we are, it is in our DNA, a model based on both sustainability and ethics which focuses primarily on people for a civil, cultural, spiritual and economic rebirth rich in values and creators of values.  

    Our hope lies in a new humanism which we entrust to the hands of the younger generations, a bridge to the future transforming change into improvement. We are aware that, as Georges Bernanos wrote, ‘It is the fever of the young that keeps the temperature of the rest of the world normal. When the young cool down, the rest of the world shivers’.        

    Our corporate solidity is excellent yet we will strive to further improve it, certain that the way forward is the right road. Good ideas need time and the right conditions to grow. They must be cultivated responsibly, building relationships based on reciprocal trust and respecting the dignity of everyone.

    Summarize. Be prudent yet bold, note the detail but also see the big picture - this is the goal we aim for.

    Thanking you for your attention and in the hope of being able to shake your hand before long, we wish you all a pleasant holiday period.

    With best wishes,