Master of Public Administration mpa EIB Capstone Project National Promotional Banks Benchmark Analysis
• This capstone project has been prepared by a pool of Bocconi University students attending the following programs: – MPA – Master in Public Administration – MCF – Master in Corporate Finance – MBA – Master in Business Administration – MSc GIO – Master of Science in Government of International Organizations • Its aim is to prepare a database with salient data about National Promotional Banks (NPBs) • This presentation is a summary of the main data collected SDA Bocconi School of Management I Master of Public Administration MPA 2
Excel Database Year of latest data VARIABLES ANALYZED - Shareholder structure - Regulated - Sectors - Instruments - Sources Variables - Financial information - Mission - Legal background - Operational model - Structure - Headquarter/branch National Promotional Banks Source (1 per worksheet) offices SDA Bocconi School of Management I Master of Public Administration MPA
National Promotional Banks Analyzed • Croatia – HBOR • Denmark – VKF • Czech Republic – CEB • Hungary – MFB • Malta – MDB • Belgium – SFPI • Portugal – IDF • Sweden – ALMI • Luxembourg – SNCI • Slovakia – SZRB • Germany – KFW • Belgium – PMV • Slovenia – SID • Austria – AWS • Belgium – SCRIB • Spain – ICO • Lithuania – VIPA • Bulgaria – BDB • France – CDC • Lithuania – INVEGA • United Kingdom - BBB • France – BPI • Latvia – ALTUM • Netherlands – BNG • Romania – Eximbank • Netherlands – NWB • Czech Republic – CMZRB • Netherlands – NIA • Estonia – KredEx • Italy – CDP • Finland – Finnvera • Poland – BGK • Ireland – SBCI SDA Bocconi School of Management I Master of Public Administration MPA
Mission Statements businesses bank better companies clients contributing competitiveness economic enterprises policy entrepreneurship support development market EU funds export finance growth loans funds guarantee institutions energy projects help innovation promote SMEs improve partner sustainable investment SDA Bocconi School of Management I Master of Public Administration MPA
Shareholders Structure • Similarities on decision making and appointed boards (state-owned) • Involvement of different public institutions CEB (national, federal, local) SCRIB • Impact driven vs. Market performance driven SDA Bocconi School of Management I Master of Public Administration MPA
Financing Activities per Sector Climate, SMEs and Infrastructure are the main financing activities of NPBs 30 26 25 24 25 19 20 16 13 15 10 9 7 10 5 0 SDA Bocconi School of Management I Master of Public Administration MPA
Level of Concentration on Financing Specialized Diversified (1-3) (6+) 15% 46% • In terms of areas of Moderate (4-5) financing, there are few 39% specialized banks • Most countries prefer to have a Promotional bank that is very diversified • Could there be inefficiencies? SDA Bocconi School of Management I Master of Public Administration MPA
Financing Instruments Loans and guarantees are the most used instruments by NPBs • Loans and guarantees are clearly the most 35 31 used instrument 27 30 • Banks are starting to 25 20 specialize on PPP 20 16 projects, building 15 necessary skills and 9 9 10 6 capabilities 5 0 SDA Bocconi School of Management I Master of Public Administration MPA
Funding Sources Most national promotional banks rely on public funding for their initiatives • Capital Markets and International Finanical Institutions (IFIs) are the 2nd most used source of financing 35 30 • EU sources also play a 30 25 significant role on financing, 19 19 17 16 20 especially in Eastern EU 15 countries 10 4 5 0 SDA Bocconi School of Management I Master of Public Administration MPA
Financial Analysis Balance Sheet compared to GDP & National Public Debt • Banks from 8 countries (as shown) out of 26 Italy - CDP 22,1% have a higher than Germany - KFW 14,5% 13,0% average ratio (3.30%), Netherlands - NWB Balance Sheet vs GDP 9,7% relating to an average France - CDC 7,8% public debt of 86.59% 6,3% Croatia - HBOR 4,0% • Highly impacted by the Slovenia - SID 3,7% country’s credit ratings 3,6% Spain - ICO 3,1% and monetary policies Hungary - MFB 3,0% Poland - BGK 2,0% 2,0% France - BPI 1,7% Luxembourg - SNCI 1,6% Bulgaria - BDB Banks below 1% excluded SDA Bocconi School of Management I Master of Public Administration MPA
Financial performance – Return On Assets • Efficiency of an institution’s management at using its assets to generate earnings, owing to the ownership • Leading to low or negative Net profits SDA Bocconi School of Management I Master of Public Administration MPA
Critical Factors found • Transparency and access to information ü Great disparities between banks in terms of information available on their websites ü Several banks (e.g. Invega in Lithuania, Alma in Sweden) do not publish their annual financial reports in English ü General lack of transparency about operational modes, funding activities, projects etc • A wide universe of national promotional banks ü Challenges encountered in assessing the items “development finance” and “regulation”: some banks, but not all, are explicitly stating which regulations they are subject to ü Other possible criteria to assess the diversity of banks: year of foundation, value for money SDA Bocconi School of Management I Master of Public Administration MPA
Lessons Learned CONTENTS ▪ Diversified business and operational models (e.g. AWS is a limited liability company, SZRB is a bank) ▪ Different historical backgrounds (e.g. CDP founded in 1850; SBCI founded in 2014) ▪ Different level of decentralization (e.g. BPI France, KfW have many subsidiaries) ▪ Not an homogeneous panorama (in terms of sectors financed, size, financial instruments) ▪ Focus on different levels (e.g. KfW: international level; VIPA: national level) SKILLS ▪ Ability to read and interpret an Annual Report ▪ Sharing of our best practices ▪ Development of critical thinking SDA Bocconi School of Management I Master of Public Administration MPA
The Team Alix Auzepy Elena Bragina Valentina Calò Elizabeth Castrillon Carlo Del Sordo LinkedIn LinkedIn LinkedIn LinkedIn LinkedIn Javier Gutierrez Pranav Kohli Emanuele Iemmolo Alexis Mergan Valentina Zambelli LinkedIn LinkedIn LinkedIn LinkedIn LinkedIn
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