Finecobank Spa · MIL:FBK
Finecobank Spa — Finecobank Banca Fine — Q1 2024 Earnings Presentation
44 slides from Finecobank Spa's earnings presentation, May 7, 2024
Slide 1: 1Q24 Results
1Q24 Results Alessandro Foti CEO and General Manager Milan, May 7th 2024 FINECO. SIMPLIFYING BANKING.
Slide 2: Disclaimer
Disclaimer ◼ “Pursuant to the paragraph 2 of Article 154 bis of the Consolidated Law on Financial Intermediation (Legislative Decree no. 58 of February 24, 1998), Lorena Pelliciari, in her capacity as manager responsible for the preparation of FinecoBank S.p.A. (the “Company”)’s financial reports, d
Slide 3: Agenda: Fineco Financial Results
Agenda ✓Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ❑ Key messages 3
Slide 4: Executive Summary
Executive Summary Successful growth story: our diversified business model allows us to deliver strong results in every market condition Strong net profit and operating leverage Solid capital and liquidity position ◼ 1Q24 Net Profit is 147 mln, +12.4% y/y excluding systemic charges (due to different
Slide 5: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Net Profit at 147.0 mln, +12.4% y/y excluding systemic charges. Results supported by strong acceleration of Investing and Brokerage, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed 1
Slide 6: Our priority: accelerating on Investing
Our priority: accelerating on Investing Improving margins thanks to the higher control on the Investing value chain through FAM. Quarterly comparison characterized by usual seasonality on PFA and FAM Increasing Investing revenues thanks to FAM Investing Revenues, mln Investing fees q/q decline linke
Slide 7: Focus on FAM: delivering on the strategic discontinuity
Focus on FAM: delivering on the strategic discontinuity Key to sustain AUM margins thanks to its strong operating leverage and to a more efficient value chain FAM progressively taking control of the value chain… bn FAM RETAIL NET SALES 1.4 133% 0.6 0.5 0.4 126% 94% 98% 1Q23 4Q23 1Q24 Apr.24 YTD FAM
Slide 8: Brokerage: higher floor as the structure of the market is changing
Brokerage: higher floor as the structure of the market is changing Increased interest in financial markets by clients and big jump into a more digitalized society Structural growth in revenues: the floor has gone up in a clear way in any market environment Avg monthly revenues 2017-2019 FTSE MIB mon
Slide 9: Brokerage: new initiatives building a potential to be unlocked
Brokerage: new initiatives building a potential to be unlocked Superior price/quality offer, new initiatives and new market trends are the key drivers of our strong brokerage performance A relentless growth of our brokerage active client base Base of active clients (on monthly basis) Equity +~40% Dr
Slide 10: High quality lending
High quality lending Offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics Commercial Loans Portfolio, eop mln Cost of Risk on commercial loans (2) Current accounts/Overdraft (1) Cards Personal loans Mortgages 5 bps 5 bps 4 bps -9.0% Mar.23 Dec.23 Mar.24
Slide 11: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements Current Mar.23 Dec.23 Mar.24 (€/bn) Mar.23 Dec.23 Mar.24 Requirements CET1 Ratio 21.80% 24.34% 25.29% 8.24% CET1 Capital 1.03 1.15 1.19 SOLVENCY Total Capital Ratio 32.41% 34.91% 35.94% 12.61% Tier1 Capital 1.53 1.65 1.69 Leverage R
Slide 12: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 864% 369% 127% 167% FBK avg EBA FBK avg EBA Fineco as of Mar.24; avg EBA as of Dec.23 Fineco Mar.24; avg EBA as of Dec.23 HQLA/Deposits 71% FBK HQLA: €19.8 bn as of Mar.24 Average 68% 39% (12 months avg) 53% 52% 45% 43% 38% 39% 40% 35% 33%
Slide 13: Agenda: Fineco Commercial Results
Agenda ❑ Fineco Financial Results ✓Fineco Commercial Results ❑ Next steps ❑ Key messages 13
Slide 14: Clients' acquisition: a strong start of 2024 thanks to our organic growth
Clients’ acquisition: a strong start of 2024 thanks to our organic growth Keeping on enjoying the secular growth trends and improving the marketing efficiency thanks to Big Data Analytics Strong acceleration in our organic new clients’ acquisition metrics Thd, # New clients y/y growth 51.1 Very prom
Slide 15: Clients' profile and focus on Private Banking
Clients’ profile and focus on Private Banking Improving the quality of our client base Avg TFA per Private client(1) € bn, TFA 0.5-1mln 5-10mln Client segmentation AuM AuC Deposits 1-5mln >10mln 122.6 128.2 107.9 106.6 8.7% 1.0mln 91.7 47% 8.6% Level of deposits is 81.4 46% 35.0% 69.3 45% 42% gettin
Slide 16: TFA and Net Sales evolution
TFA and Net Sales evolution Successful shift towards high added value products thanks to strong productivity of the network Breakdown of total TFA, bn Breakdown of total Net Sales, bn AUM since the end of 2014: Apr.24 total Net Sales: 844 mln +152.7% 128.2 122.6 35% 10.7 8.8 107.9 106.6 34% 10.3 9.3
Slide 17: Net sales organically driven key in our strategy of growth
Net sales organically driven key in our strategy of growth The structure of recruiting is changing: more interest in the quality of the business model by PFAs Total Net Sales, bn – Organic / Recruit, % Total recruits Organic Total recruits Organic New PFAs recruited in the year PFAs recruited over t
Slide 18: Deep dive on our transactional liquidity
Deep dive on our transactional liquidity Our business model has fully fledged banking platform used by all our clients for their daily activities Granular and retail deposit base, very sticky thanks to the quality of our customer experience 98% Retail clients 78% Guaranteed deposits by DGS (<€100k)
Slide 19: Agenda: Next steps
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ✓Next steps ❑ Key messages 19
Slide 20: 2024 Guidance
2024 Guidance Our diversified business model key to successfully deal with the current volatile environment Revenues Costs and provisions ➢ OPERATING COSTS: expected growth of around 6% vs FY23, not including ➢ REVENUES expected in FY24 at a record level, with an additional costs for: FAM and market
Slide 21: Innovation and Simplification Project
Innovation and Simplification Project Further simplifying clients’ user experience thank to easy-to-use new tools and a more efficient marketing engine BROKERAGE INVESTING BANKING ✓New Trading Pages on our App ✓Investment Certificates ✓New faster onboarding ✓Further evolution of FinecoX ✓New Advisor
Slide 22: Agenda: Key messages
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ✓Key messages 22
Slide 23: Long term sustainability at the heart of Fineco business model
Long term sustainability at the heart of Fineco business model We are a looking-forward organization playing for the long-run and able to generate a positive impact for all our stakeholders and the society as a whole Fineco corporate purpose: “to support customers in taking a responsible approach to
Slide 24: Fineco as a profitable FinTech Bank: ICT a key business driver
Fineco as a profitable FinTech Bank: ICT a key business driver Leveraging on a deep-rooted internal know-how to expand platform scalability and operating gearing HYPERAUTOMATION COST EFFICIENCY DATA DRIVEN OMNICHANNEL Our strong emphasis on Ensuring our vast data Through comprehensive Blending RPA,
Slide 25: Healthy and sustainable growth with a long term horizon
Healthy and sustainable growth with a long term horizon Highly scalable operating platform… 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CAGR (2014-2023) + 11% 108 107 123 92 69 81 + 6% 67 1,487 1,563 TFA (bn) 49 55 60 1,370 1,428 1,278 1,358 1,200 461 637 + 17% Clients (thd, #) 964 1,048 1,118
Slide 26: ESG Multi-Year Plan 2024-2026 fully integrated within Banks' strategy
ESG Multi-Year Plan 2024-2026 fully integrated within Banks’ strategy Combining business growth and financial strength with the principles of social and environmental sustainability, in order to create long-term value for all Stakeholders ❑ New strategy focuses on challenging ESG objectives(1) withi
Slide 27: Annex
Annex 27
Slide 28: P&L pro-forma
P&L pro-forma P&L pro-forma(1) mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 Net financial income 157.4 170.8 180.2 179.5 688.0 180.8 o/w Net Interest Income 157.4 170.8 180.0 179.5 687.7 179.0 o/w Profit from treasury management 0.0 0.1 0.1 0.0 0.2 1.8 Dividends 0.0 0.0 0.0 0.0 -0.1 0.0 Net commissions 120.9 1
Slide 29: 1Q24 P&L FinecoBank and Fineco Asset Management
1Q24 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net financial income 0.2 180.5 180.8 Dividends 0.0 0.0 0.0 Net commissions 40.3 88.2 128.6 Trading profit 0.0 17.5 17.5 Other expenses/income -0.3 0.5 0.2 Total revenues 40.3 286
Slide 30: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 Margins Margins Margins Margins Margins Margins Financial Investments 108.7 27,846 111.0 26,545 113.2 25,610 110.0 24,526 442.9 26,132 110.8 24,695 Net Margin 1.58% 1.68% 1.75
Slide 31: Focus on Bond portfolio
Focus on Bond portfolio Bond Portfolio (nominal value) € bn, eop 20.8 bn Bond portfolio Nominal value: 20.8 bn: 0.9 5.4 Italy 4.7 ▪ o/w 62% at fixed rate, avg yield: 107 bps Spain Other Govies (1) ▪ o/w 38% at floating rate (swapped), avg spread: 33 bps on 3m Eur (2) SSA Residual maturity total port
Slide 32: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 4Q22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 Banking 15.3 14.6 15.6 12.0 13.2 55.3 12.0 Brokerage 22.7 31.3 24.2 23.5 27.0 105.9 33.0 o/w Equity 16.5 22.8 16.1 17.6 17.3 73.8 23.2 Bond 2.7 3.9 5.1 2.1 5.6 16.7 6.2 Derivatives 2.9 3.2 2.4 2.6 2.5 1
Slide 33: Revenues breakdown by Product Area
Revenues breakdown by Product Area Revenues by product area mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 Net financial income 154.9 167.5 176.1 175.1 673.5 173.8 o/w Net interest income 154.9 167.4 176.0 175.1 673.3 172.0 o/w Profit from Treasury Management 0.0 0.1 0.1 0.0 0.2 1.8 Net commissions 14.6 15.6 12.
Slide 34: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 AUM 54,132 55,803 55,400 58,016 60,425 o/w Funds and Sicav 35,962 37,373 36,807 38,839 40,708 o/w Insurance 15,052 14,708 14,359 13,760 13,579 o/w GPM 331 346 341 365 383 o/w AUC under advisory 2,787 3,377 3,893 5,052 5,756 AUC
Slide 35: Increasing quality and productivity of the Network
Increasing quality and productivity of the Network Total Assets per PFA TFA concentration per PFA Eop, mln AUM AUC Deposits PFAs with TFA >20mln are 65% and hold 90% of TFA +12.7% +14.0% +34 +4.2% 97.8bn 100 111.5bn 100 2,934 2,935 2,969 37.5 36.0 > €35mln 33.3 +10.4% €25-35mln 34% 40% 65% y/y 20.2
Slide 36: Balance Sheet
Balance Sheet mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 (1) Due from Banks 1,860 1,934 2,224 2,643 3,808 Customer Loans 6,312 6,184 6,058 6,199 6,098 Financial Assets 24,366 22,630 21,648 21,417 20,426 Tangible and Intangible Assets 268 269 266 271 266 Derivatives 1,300 1,029 1,028 707 705 Tax credit a
Slide 37: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 33.3 bn (1) Financial Assets Customer deposits ◼ Investment strategy based on a diversified blend of EU government bonds, Customer loans Other liabilities supranational and agencies Due from Banks (2) 20.4 Equity ◼ 99.9% not
Slide 38: Leverage Ratio Sensitivity
Leverage Ratio Sensitivity Leverage Ratio comfortably under control OUR PRIORITY Retained earnings = Tier 1 Capital (mln) Focus on our Balance Sheet to keep under control 150 160 170 180 190 200 250 300 350 400 450 500 the growth of deposits and improve our quality -5,000 6.59% 6.62% 6.66% 6.69% 6.7
Slide 39: Fineco Asset Management in a nutshell
Fineco Asset Management in a nutshell FAM is active on 6 business lines (Core Series, FAM Evolution, FAM Series, Passive and Smart Factors funds, FAM Evolution Target family and FAM Series Global Defence / Target family), providing not only the expertise of the best Asset Managers but also solutions
Slide 40: Preserving our best price/quality ratio
Preserving our best price/quality ratio Competitive landscape(1) € Online € 100 avg € 152 avg Branch online costs branch costs Widiba (Conto Start) 20 53 Webank 24 Ing (Conto Arancio) 27 Fineco 40 Illimity (Conto Illimity Classic) 46 HelloBank! (Hello! Money) 60 Banca Sella (Conto Start) 62 161 ISYB
Slide 41: ESG HIGHLIGHTS
ESG HIGHLIGHTS ESG OFFER & BANK’s PORTFOLIO 88% of funds distributed (# ISIN) with an ESG Rating (1) 57% of new funds launched in 1Q24 with ESG rating ≥ 6 Lending: • Green Mortgages for the purchase of properties with energy class A or B Funds SFDR classification: • New Green Loan launched at the en
Slide 42: Our ESG ratings and Indexes
Our ESG ratings and Indexes RATING AGENCY EVALUATION SCALE 1Q24 ESG INDEXES (0-100) 68 New S&P Global ESG Score Data Availability: Very High (From D- to A) C Awareness band: Knowledge of impacts on, Fineco included in: and of, climate issues (100-0) 14.3 Among the best international banks with low E
Slide 43: Commitment towards Net-Zero emissions by 2050
Commitment towards Net-Zero emissions by 2050 RESPONSIBLE FINANCE - Scope 3 emissions from internal investment portfolio 2021 2026 2030 2050 Exposure in countries, institutions and banks: > 70% of 2021 Total Consolidated Assets % exposure in debt securities of sovereign and bank issuers with a Net-Z
Slide 44: Funding
Funding Senior Preferred instrument AT1 instruments ➢ €300 mln Senior Preferred (6NC5) issued on February 16th, 2023 in order to have an ➢ €500 mln perpetual AT1 issued on March 11th, 2024 in order to maintain the Leverage additional buffer above the Fully Loaded MREL Requirement on LRE. Ratio above
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