In a still difficult economic context, in 2014 the Intesa Sanpaolo Group achieved positive economic results.
The consolidated income statement closed with a net income of 1,251 million euro, against the loss of 4,550 million euro recorded in 2013, which was due to the considerable goodwill impairment. In detail, operating income rose and improved in qualitative terms. In fact, the contribution from interest and fee and commission income increased, added to which are the positive contributions from the companies consolidated at equity and that from the insurance segment. These positive trends have completely offset the lower contribution from trading, a component structurally subject to volatility. The increase in personnel expenses, entirely attributable to the variable component, was then partly offset by lower administrative expenses. Consequently the operating margin rose by 5%. Income before tax from continuing operations benefited from the much-reduced need for adjustments to loans. Growth in income, associated with cost control and lower adjustments, allowed a pre-tax income up by approximately 37% compared to 2013, which had even included the significant positive effect of the fair value measurement of the new stake in the Bank of Italy.
The persisting headwinds in the macroeconomic environment and the financial markets’ volatility require constant control of the factors enabling the Group to pursue sustainable profitability: high liquidity, funding capacity, low leverage, adequate capital base and prudent asset valuations.
Group liquidity remained high: as at 31 December 2014 both regulatory indicators envisaged by Basel 3 (LCR and NSFR), adopted from this year also as the internal liquidity risk measurement metrics, reached a level above fully phased-in requirements. As at the end of 2014 the liquidity reserves allocatable with the various Central Banks came to 97 billion euro. In September 2014 and again in December, recourse was made to the ECB’s TLTRO programme for a total of 4 billion euro and 8.5 billion euro, respectively. With regard to funding, the extensive branch network continued to be a stable and reliable source: in fact, 75% of direct deposits from banking business came from retail operations. Furthermore, approximately 20 billion euro bonds were placed during the year.
The leverage of the Group remained among the best levels in the sector and the capital base remained high.
The total capital ratio stood at 17.2%, Tier 1 ratio at 14.2% and Common Equity Tier 1 at 13.5%.
As to balance sheet aggregates, loans to customers totalled 339 billion euro (-1.4% compared to the end of 2013). With regard to funding, direct deposits from banking business recorded a slight decrease to 360 billion euro (-3.3% compared to the end of 2013), whilst direct deposits from insurance business, which include technical reserves, increased significantly (+27% approximately to almost 119 billion euro).
Indirect deposits stood at a little under 466 billion euro, up 8.2% on the end of the previous year, and were attributable to asset management (+43 billion euro; 16.7%), which benefited from the positive net inflows and the revaluation of assets under management.

*The figures and comments refer to the reclassified consolidated income statement published in the 2014 Financial Statements of Intesa Sanpaolo; annual percent changes were calculated based on restated 2013 figures, where necessary, in order to take into account changes in the scope of consolidation. Amounts are in millions of euros. For additional details or information, see the 2014 Consolidated Financial Statements of Intesa Sanpaolo.