Supporting families in times of crisis

Mortgages and consumer lending:  new solutions to help families

In this unfavourable macroeconomic environment context, the Bank is committed to providing innovative financial solutions and make the repayment conditions for holders of mortgages and personal loans less difficult. In addition to innovating and simplify our products, particular attention has been placed on supporting families, both with the aim of financial inclusion and supporting the sustainability of debt for customers who might be most vulnerable to income reduction or the loss of employment. Attention to sustainable debt is also supported by the in-branch consultancy model which aims to provide financial solutions that better meet our customers’ needs.

During the year, our mortgage portfolio saw the introduction of MRO1 indexed floating-rate mortgages, offering customers an alternative to the traditional Euribor option, mortgages enabling their existing financial commitments to be streamlined, obtain new liquidity and make repayment instalments more sustainable, as well as variable mortgages which offer protection against excessive rate increases with a maximum interest rate (cap) set by contract. Moreover, in addition to the possibility of activating the flexibility options on the main types of mortgages available contractually (instalment suspension), customers holding floating-rate mortgages could switch to a fixed rate or extend the original financing terms (as of 31 December 2009 some 25,000 mortgages have been renegotiated). During the year, the capped rate (Italian Legislative Decree 185/2008) was applied to some 200,000 mortgages, with contributions by the State on the 2009 instalments of non floating-rate mortgage loans on the primary residence.

Among the various local initiatives undertaken, worthy of merit is the collaboration with the Municipality of Turin in support of 100 young couples, including temporary workers, who were granted a subsidised mortgage of up to 100% of the price of the house with a guaranteed buyback by the municipality in the event of insolvency by the mortgage holder. Given the favourable reception of the initiative, it is going to be activated in other Italian towns.

Abroad, CIB Bank launched “Solution Loan” to support families having problems in paying their mortgage instalments, which allows mortgage holders to pay their instalments at a reduced amount for a certain period and spread the outstanding debt over a longer period of time.

The Solution Loan product won first prize as “Retail Loan Product of the Year” at the MasterCard “Bank of the Year” awards.

CIB Bank also launched other initiatives for customers in difficulty. Over 10,000 customers were contacted by the Bank to review and facilitate their payment terms - not only for mortgages but for other forms of loans as well, including credit cards. A new credit protection service, which was subscribed to by more than 13,000 customers, was launched under which, in the event of unforeseen accidents, insurance will cover the repayment of the loan (even in full).Social attention
VUB Bank also offered its customers subsidised forms of mortgage payments, with the option of starting with lower repayments which then increase over time. In particular, young people who have less spending power were favoured. Customers can also skip the payment of an instalment should they be in difficulty. For the unemployed VUB Banka offers the option of not paying up to a maximum of six months, at no extra charge for the service.
Among the new opportunities regarding personal loans, Anticipazione Sociale makes credit available in monthly instalments proportionate to the amount of compensation due to workers who have been laid off and who are in financial difficulties due to the delay of payment by the INPS (Italy’s social security agency). This project, initially experimented in the Lombardy Region, in 2009 became available throughout the Intesa Sanpaolo network. 2,400 households  received approximately 10.5 million euro in financial support.


In collaboration with the Italian Banking Association (ABI) and with the support of the Italian Episcopal Conference (CEI), personal financing called Prestito della Speranza was made available to support families in specific socio-economic situations who have lost every source of income due to the current crisis and who have a plan for returning to work or engaging in an entrepreneurial activity. The loan is a model of income support for families through which the Bank is implementing new solutions:

  • it entrusts the analysis of the need and financial sustainability of the family budget to VOBIS - a voluntary association made up of former bank employees;
  • it entrusts the provision of the loan to a select number of specialised counters to serve customers better and build specific expertise in the area of micro-financing.

Also active are numerous agreements with anti-usury foundations (Italian Law 108/96) for the granting of loans to customers who are victims of usury – an activity that is continually being expanded through the establishment of new agreements (Microcredito Pistoiese , Fondazione Toscana Prevenzione Usura and Fondazione Beato Fondini, etc.).

Still with a view to sustainable debt, Intesa Sanpaolo continues to promote the Servizio Monorata as a tool for managing the growing, and often unknown, debt exposure into one single loan, encouraging greater awareness on the part of the customers and easing the impact of the monthly instalments.

Additionally, the financing option best suited to the customer can be determined through the Check-up finanziario per il bilancio familiare (Financial check-up for household budget), which consists of a short interview to understand the customer’s needs and profile. The selected profile and solution are illustrated in a simple and transparent document that is delivered to the customer and can be used for planning the household budget in an informed and sustainable manner.

CommunityFurthermore, the work of the PAN consortium (Crèche Project) is on-going, established by the Bank in collaboration with the three largest networks of social entrepreneurship with the aim of developing and promoting high quality services for children. The new Prestito Asili Nido PAN (PAN Crèche loan) allows our customers to spread over time the annual instalments due to nursery schools.

In the area of cooperation with Local Authorities, emphasis was placed on measures to support housing, fine-tuning agreements on a regional level for granting subsidised loans (Veneto, Campania, Sardinia, Lazio). As well as facilitating access to credit by low and middle income customers, such agreements also improve the sustainability of instalments to holders of existing mortgages by renegotiating previous funding.

As for consumer lending, agreements were signed at the local level for granting concessional loans for people who have suffered a significant reduction in income due to being laid-off and to temporary workers.

Intesa Sanpaolo also launched initiatives in support of the Abruzzo earthquake victims, including a suspension of up to 12 months on payment of medium-long term loan instalments; “Prestito Abruzzo” for purchasing a wooden house, the replacement of damaged cars and/or small renovation works; adhering to the ABI Agreement signed with Cassa Depositi e Prestiti - CDP for providing funding for the reconstruction/restoration of buildings located in the areas affected by the earthquake. The Bank anticipates the payment of instalments to CDP and recovers the amounts through tax credit compensation.

1 MRO - Main Refinancing Operations. A rate established by the European Central Bank on refinancing operations.

Helping young people in building their future and facilitating their right to study

For young people, including temporary workers, a wide range of products and services have been created in support of their distinctive financial needs. For young people between 18 and 35 who face difficulties in accessing credit due to the obvious problems they have in being integrated into the Helping young peoplework force, solutions for financing up to 100% of their investment for a duration up to 40 years are available. In 2009, nearly 6,300 mortgages were granted for a total of almost 650 million euro and about 1,200 personal loans for a total of some 14 million euro.

Bridge is a bridge loan which brings together the university and the working environment. Launched in 2003 with the Polytechnics of Milan, Turin and Bari, the project was subsequently extended to more than 40 Italian universities and university secondary schools and has also been adopted by the Group’s banks in Croatia and Slovenia. Bridge is a fixed-rate loan, granted on scholastic merit, which does not require a guarantee from the student or the student’s family. Intesa Sanpaolo provides an amount of 5,000 euro or more per year for three years (larger amounts are offered for attendance of Master’s degree or specialisation programmes) and, after obtaining their degree, students repay the sum effectively used in equal monthly instalments over a period of eight years. The Bank assumes the risk, which is partly shared by the participating universities, each with a different quota according to the occupational potential of its graduates. The regions of Piedmont and Veneto have chosen Bridge to sustain the “loan of honour” for their students, with a guarantee of Ministry funds. Some 4,000 students have chosen Bridge for a total distribution of approximately 37 million euro.

Bridge is made available by the Croatian Privredna Banka Zagreb to Electronic Engineering students at the University of Zagreb and, through an agreement with Milan Polytechnic, some of these students attend specialisation courses in Milan to obtain a second degree.
Intesa Sanpaolo has also joined the Diamogli Credito loan program set up by the Youth Department of the Prime Minister’s Office in order to allow students easy access to loans without requiring collateral. Those benefiting from the loan were around 200 for a total disbursement of approximately 500,000 euro.
An additional subsidy aimed at supporting the right to study for disadvantaged groups is the conversion of the university fees for which students are liable to an instalment plan, debited to a current account or paid using deposit slips, without resulting in any costs for the universities or students who have SuperFlash accounts. The service is also available to students who hold accounts with another bank and students without a bank account, in return for a small fee. The loan is available to students of the University of Teramo and, from the second instalment due for the 2009/2010 academic year, also to students from the University of Milan.
To support families and the birth rate, Intesa Sanpaolo has adhered to the agreement with the Department for Family Policies for the provision of funding (maximum 5,000 euro) to families with newborns or adopted children in 2009, 2010 and 2011.

Support for female entrepreneurship

The initiative begun in 2008 with the establishment of 19 advisory points in Piedmont - the Corner Rosa – specialised in assisting female entrepreneurs, continues. 188 loans were disbursed on the basis of a special Regional Law for a total of approximately 5.6 million euro.

New financial services accessing systems

SuperFlash, launched in May 2009, is the first personal rechargeable prepaid card that combines the functions of payment cards (withdrawals at authorised ATMs, mobile phone top-ups and MasterCard purchases from participating shops) to typical current account services (bank transfers, salary credited to account), as well as allowing users to safely make purchases and payments over the Internet.
SuperFlash is designed especially for young people, students, workers or anyone wanting easy access to the Bank, even when away from home and even if they do not have a current account. These customers can make use of the site Web site which is a dedicated channel for interacting with the Bank and easily finding all the information and promotions that are associated with the card. Since its launch in December 2009, about 55% of SuperFlash cards have been purchased by young people under 35 years (more than 66,000 cards) and about 18% by immigrant customers (22,000 cards).

Progetto risparmio (the savings project)

The singular economic situation of 2009 brought about the need to re-evaluate the entire products offer to define a new savings paradigm. The way customers’ financial assets were managed according to their needs, behaviours and life cycles started to undergo a gradual but radical change. The project, which was born to strengthen the current consulting and service model, took as its point of departure the need to gain an in-depth understanding of the customers’ investment requirements and purchasing behaviours. The project is based on adopting a new consulting model structured according to needs as the enabling factor for re-qualifying the financial assets of customers and with an integrated management of both stocks and financial flows. The aim is to take into account the investment needs that have been identified and direct the new financial flows towards long-term accumulation, disseminating a culture of saving and providing comprehensive advice that takes into account the need to protect assets as well as the family unit and social security.
EmployeesThis entailed considerable investment in training for managers to improve their skills and approach on how to provide investment advisory services within a defined business process for a more effective post-sale management.

From the outset the initiative involved many departments both inside and outside the Bank with the common goal of providing major infrastructural innovations, developing tools to support consulting and business activities enabling those in contact with customers to maximise the effectiveness and efficiency of their relationship and improve the level of service perceived by customers. The end of the first phase was marked by the availability of the “Recommended Business Portfolios” report for managers as an aid to their drawing up suitable business proposals and which required an intense training effort for managers about business methods, business plans and tools to support investment advice. The second phase has just got underway and will see the completion of some major infrastructural projects including an enhancement of the entire system of profiling and assessing the adequacy of investment operations, of strengthening training activities on the Internet, making available innovative tools for providing advice, including flanking portfolios risk analysis alongside the expected returns.  The development of products offered has also been consistent with this logic of needs.
For young people in particular, Intesa Sanpaolo focused on innovative products that are distinguished by their simplicity and affordability and that concretely meet their needs. Furthermore, by making use of specific instruments, attempts have been made to re-focus attention on “how to save”, trying to steer the flow of general and short-term savings through gradual market investments.

Meta giovani is a new service that allows customers to identify a medium to long-term objective Code of Ethicsand set up a multi-year funds investment plan with a dynamic financial mechanism (Life cycle style management), which enables market growth participation, reducing the investment risk as its maturity approaches. Once the duration of the plan has been defined - 5 to 30 years, the Life cycle style service automatically suggests the best allocation of the investment over time: riskier and potentially more profitable funds in the first years to funds with risk profiles that gradually decrease as the target date chosen by the customer approaches.

The Eurizon Meta management engine, already used for Eurizon Meta Giovani, recently won the “Golden Circle for Financial Innovation 2009” Award that promotes innovation in banking sector and rewards the ability to anticipate and drive market change.

Insieme per domani is a new targeted savings service for customers who would like to set up a savings plan for a loved one. The service is targeted at young people with earning power, who have their own family and who would like to save - for example for a newborn child -, and at adults/seniors wishing to help a loved one (a minor at the time of underwriting) to initiate a plan or encourage the culture of savings. The amount saved will be available to the beneficiary on a date chosen by the person who subscribed to the plan.
With regards to the insurance sector, workers compensation policies have been developed that guarantee a minimum return, to which should be added the possibility of liquidating one’s assets in the event of unforeseen events, recouping at least one’s own capital, after only 18 months.
Specifically as regards pension benefits, pension funds include certain forms of social and welfare services (income and medical support) and keep pension savings and managed savings clearly separated. When specific work-related events occur, the customer may request to cash in his/her individual insurance position (partially or in full) before acquiring the pension entitlement under the public system to which he/she belongs. Specifically, the participant is entitled to: 50% redemption of the individual position in the event of being unemployed for a minimum of 12 months or in the event of mobility or unemployment benefits (ordinary and extraordinary); total redemption in the event of more than 48 months of unemployment; receive pension benefits with a 5 year advance in cases where the state of prolonged unemployment takes place during the five years preceding the right to a state pension. The customer also has the right to full redemption in the event of permanent disability, and a 75% advance for medical expenses should critical situations relating to themselves, their spouse or children arise.
The global crisis has taken its toll on the sustainability of companies, including banks, creating deep uncertainty among customers about the safety of their deposits and the solvency of banks. To help customers regain their peace of mind, Intesa Sanpaolo has offered the Group’s International Subsidiary Banks a new product called “guaranteed deposit”. The initiative was especially welcomed by the Eastern European banks where the memory of the failure of local banks is still very much alive among customers. Consisting of time deposits with a 12 month maturity period issued by every local bank, its distinguishing feature is that the payment of the principal amount and the interest is secured by means of a guarantee issued by the Parent Company. The guarantee agreement is delivered to the customer, as a sign of the product’s security.