We are present in Italy in 11 regions with 355 branches, over 3,500 collaborators and are listed on the MTA of Borsa Italiana.We dedicate ourselves every day to the development of deep relationships with our stakeholders and to the enhancement of the territories in which we operate for sustainable growth and profitability.
Dear Shareholders,2019 was the year of concreteness for Creval. We have succeeded in significantly strengthening the Bank and turning it into a more resilient and agile organisation. We have made our objectives and ambitions clear and transparent, defining them in the 2019- 2023 Business Plan presented last June.
The Plan laid the foundations for the sustainable growth of our business, putting households and small and medium-sized enterprises at the centre of the strategy and organisation, relaunching business on the one hand and optimising and simplifying our way of banking on the other. The pervasive quest for efficiency and the highest standards in lending will enable us to improve our ability to generate income and create value in a sustainable way over the long term.
The first results are already visible and we can see that we are going in the right direction. Net profit for 2019 reached EUR 56 million, up 77% on the previous year. Operating costs were reduced by 15.6%, the incidence of non-performing loans decreased from 11% to 9.4%. The default rate improved from 2.1% to 1.7%, confirming the progress made in credit disbursement and monitoring processes.We have already concluded sales of bad loans that have allowed us to reduce the stock by more than 50% since the announcement of the Business Plan and to further strengthen the Bank's solidity, increasing the regulatory ratio (CET 1 fully loaded) from 13.5% to 15.5%. This ratio places Creval among the leading banks in Europe by level of capitalisation.The growth in deposits was very important (+12%) and the first positive signs can also be seen in loans and receivables with retail customers (+1.8%), thanks to the focus on households and small and medium-sized enterprises in support of our reference territories.
2019 marked the beginning of a profound transformation for Creval, as demonstrated by the improvement in the indicators mentioned above. This has been achieved thanks to the commitment of our Employees who demonstrated great flexibility and adaptability, redesigning organisational models and business processes to respond promptly to new strategic and business guidelines.At this moment in history, we are all facing the great challenge of the coronavirus pandemic. The tragic loss of thousands of lives, the lockdown to prevent the further spread of the virus that is paralysing at the same time the global economy, and above all the enormous uncertainty that we are facing, are forcing us to make choices and decisions even faster.
The banking sector and Creval have an important role to play alongside Customers to manage the emergency phase and support the restart, ensuring that our economies continue to operate despite the enormous difficulties. It is still too early to accurately assess the economic and social impacts of what is happening but there is no doubt that the consequences will be felt. The only thing we can be sure of is that Creval will play its part.
The path of change initiated last year made our organisation more flexible and agile, and this allows us to feel better prepared to face this challenge as well. Creval enjoys a very solid asset base, has a low risk profile and is focused on traditional business. We can also count on the important skills of our Employees and our values, which allow us to remain well anchored on the ground even in high winds. 12 We would like to thank our Customers for their trust, which is reflected in their daily work with us and in entrusting us with their savings.
We will do our best to continue to deserve it. We would like to thank all Colleagues, in particular, for their enormous commitment to achieving the important results of last year.
It is an extraordinary privilege to work for this company with such talented people. Finally, we would like to address our investors, who have continued to show us their trust and support for our business and our strategy.
We can assure you that, together with all colleagues, we will continue to implement the Plan with determination and discipline, anchored in our values.
Alessandro Trotter - The Chairman of the Board of DirectorsLuigi Lovaglio - Managing Director
The document is taken from the 2019 Annual Report. To download the Letter in pdf format click HERE.