Slide 1: Fineco: 2Q17 Results
Fineco: 2Q17 Results Alessandro Foti, CEO and General Manager Milan, July 31st 2017
Slide 2: Disclaimer
Disclaimer This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations,
Slide 3: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 3
Slide 4: Executive Summary
Executive Summary 1H17 net profit at 104.3mln (+3.2% y/y net of non recurring items(1), +6.8% y/y net of profits from Govies sale in 1Q16(2)) the best semester ever 2Q17 net profit at 52.6mln (+5.6% y/y net of non recurring items(1), +1.7% q/q) 1H17 growing revenues (+5.2% y/y net of profits f
Slide 5: Results
Results 1H17 Net Profit at 104.3mln, the best semester ever, boosted by high quality revenue growth and operating costs under control Net Profit, mln excluding non recurring items(1) +5.6% +6.8% y/y +3.2% net of Govies +1.7% sale (2) 117.8 104.3 66.6 51.7 52.6 49.8 101.0 2Q16 1Q17 2Q17 1H16 1H17 Adj
Slide 6: Revenues by P&L Items
Revenues by P&L Items Sound and diversified stream of revenues. Net interest income +3% y/y despite interest rate environment. Management fees strongly up +15.3% y/y Net interest, mln Fees and Commissions, mln 1M Eur -0.35% -0.37% -0.37% -0.30% -0.37% Brokerage Investing Banking Other +5.0% +10.1% +
Slide 7: Net interest
Net interest Sustainable net interest income dynamics despite lower y/y rates supported by double digit growth in volumes, both sticky sight deposits and high quality lending Sight Deposits (mln) and net margins (bps) Lending(1) (mln) and net margins (bps) +16.9% +82.0% +3.5% +27.2% 16,105 16,663 17
Slide 8: Net interest sustainability analysis and potential future upside
Net interest sustainability analysis and potential future upside Sustainability analysis: sight deposits growth to offset lower rates and bond portfolio run-off. Sensitivity analysis +100bps parallel shift: +79 mln UC Bonds run-offs (mln) and spread (bps) 7Y Spread UniCredit vs Govies, bps 1,724 1,5
Slide 9: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA Staff expenses, mln and FTE, # Stock granting post IPO 1,025 1,044 1,067 Staff expenses, related to top managers and key employees Other administrative expenses, related to PFAs +3.7% +3.2% 5.4 +2.6% 1.4 3.6 37.7 38.9 2.7 1.7 1.8 0.7
Slide 10: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet RWA, mln CET1 Ratio transitional, % Credit Market Operational -0.5p.p. -0.1p.p. +14.3% +6.6% 22.68% 23.14% 22.94% 22.24% 22.14% 2,087 1,910 1,958 1,826 1,799 Jun.16 Sept.16 Dec.16 Mar.17 Jun.17 1,309 1,136 1,186 CET1 Capital, m
Slide 11: TFA
TFA Relentless TFA growth thanks to a healthy expansion in net sales Guided products & Services increased at 60% of total AuM TFA evolution (Dec.11-Jun.17), bn 63.6 Cumulated performance, bn 0.5 60.2 2.9 Net Sales +22.2 bn -0.2 Market Effect +6.4 bn 55.3 5.0 0.5 49.3 5.5 1.7 43.6 4.0 1.3 39.8 2.5 2.
Slide 12: TFA breakdown
TFA breakdown Successful shift towards high added value products Breakdown of total TFA, bn Focus on AUM, bn Guided products as % of AuM +7.0 bn AUM in 2.5 years, o/w: 63.6 Guided Products & Services +9.9 bn 62.2 60.2 AuM à la carte -2.9 bn 55.3 55.0 55.6 +7.0 bn 49.3 48% 48% +2.0 bn 48% 47% 46% 47%
Slide 13: Net sales breakdown
Net sales breakdown Net sales highlights the continuous improvement in the asset mix thanks to the increasing productivity of the network Breakdown of total net sales, bn PFA Network – total net sales, bn 5.5 Guided 5.0 4.9 2.0bn (+17% y/y) 4.3 4.0 2.7 1.8 3.6 +9.2% 2.6 1.8 +16.4% 0.3 2.9 +24.3% 2.6
Slide 14: Organic growth
Organic growth Net sales organically generated confirmed as key in our strategy of growth Net sales, bn – Organic / Recruit New recruits of the year Organic Total recruits Organic 4.0 5.5 5.0 2.6 2.9 4.0 5.5 5.0 2.6 2.9 Recruitment costs 5% (to be amortized) 11% 11% 8% 12% 18% 19% 19% 19% stock 23ml
Slide 15: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 15
Slide 16: Revenues by Product Area
Revenues by Product Area Well diversified stream of revenues allowing the bank to successfully face any market environment Banking, mln 46% +8.8% +6.9% +3.3% 121.7 130.1 60.8 64.0 66.1 2Q16 1Q17 2Q17 1H16 1H17 Brokerage, mln 24% Investing, mln 31% Core revenues (NI excluded) 1H17 Management -4.3% +1
Slide 17: Banking
Banking Sound performance driven by strong volume growth and customer acquisition thanks to high quality services and customer satisfaction Revenues, mln Direct deposits eop, mln Net Interest Sight Deposits eop Term Deposits eop Fees and commissions Trading income +12.8% +6.9% Other 130.1 +3.1% 121.
Slide 18: Brokerage
Brokerage Outstanding brokerage results despite the lowest volatility since 2013 confirming the strong potential of this business Revenues, mln Revenues vs volatility(1) Net Interest Trading profit Fees and commissions Core revenues (NI excluded) -3.6% -4.3% -2.9% -1.3% 68.9 66.4 -9.6% 5.8 6.0 32.3
Slide 19: Investing
Investing Successful strategy on cyborg advisory approach drove a better asset mix and increasing fees Revenues (Net Fees), mln AuM eop, bn Upfront fees Management fees Others(1) +18.2% +2.9% 1H17 Management +13.7% 30.6 27.5 28.6 29.7 fees 25.9 +15.3% y/y 88.3 6.0 77.6 +11.1% 4.6 Jun.16 Sep.16 Dec.1
Slide 20: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 20
Slide 21: 3 Pillars: Efficiency, Innovation and Transparency
3 Pillars: Efficiency, Innovation and Transparency The keys of our strategy, still leading our sustainable growth EFFICIENCY INNOVATION TRANSPARENCY Strong focus on IT & Operations, Anticipate new needs Fairness and Respect more flexibility, less costs simplifying customers’ life for all our stakeho
Slide 22: 1H17 key messages
1H17 key messages Healthy growth and sustainability at the heart of Fineco’s business model Clients’ acquisition leveraging on high quality services. Cost of funding close to zero Organic growth as main engine of growth. Selected recruits to improve the quality and related costs well under contr
Slide 23: Boost in high quality lending volume offered exclusively to existing clients
Boost in high quality lending volume offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics Overall Lending portfolio Cost of Risk (2) Eop, mln Current accounts/Overdraft Cards Reverse repos -38 bps Personal loans Mortgages Other (1) -19 bps 62 bps +70.8%
Slide 24: Initiatives monitoring - Banking Area, focus on Credit
Initiatives monitoring - Banking Area, focus on Credit 1 Boost in high quality lending volume offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics Mortgages Personal loans Credit Lombard Eop, mln Eop, mln Granted credit line Eop, mln Quarterly Interest I
Slide 25: Initiatives monitoring - Investing Area (1/2)
Initiatives monitoring - Investing Area (1/2) 2 Increase network’s productivity and Private Banking Guided Products Average PFAs’ portfolio Net Sales Mix Eop, bn Eop, mln AUM AuC+ Deposits +38.4% +15.2% +5.3% +2.5% 12% 30% 17.5 18.4 61% 60% 61% 14.9 16.1 19.6 20.2 20.7 13.3 17.9 18.8 88% 70% 39% 40%
Slide 26: Initiatives monitoring - Investing Area (2/2)
Initiatives monitoring - Investing Area (2/2) 3 New Management Company Scope and benefits of the project As announced, we are working to set up our own Management Company in Ireland, one of the main financial hubs for asset management industry. It will be 100% owned by FinecoBank The aim is to i
Slide 27: Annex
Annex 27
Slide 28: P&L
P&L mln 1Q16 2Q16 1H16 3Q16 4Q16 FY16 1Q17 2Q17 1H17 Net interest income 62.2 61.2 123.4 62.5 63.4 249.4 62.9 64.3 127.2 Net commissions 58.2 59.7 117.8 59.3 65.8 242.9 64.7 65.0 129.7 Trading profit 19.6 27.3 46.9 10.8 11.3 69.1 13.7 12.3 26.0 Other expenses/income 0.1 0.7 0.8 -0.8 -2.2 -2.2 0.5 -0
Slide 29: P&L net of non recurring items
P&L net of non recurring items 1H17/ 2Q17/ 2Q17/ mln 1Q16 2Q16 Adj 1H16 Adj 1Q17 2Q17 1H17 1H16 2Q16 1Q17 Net interest income 62.2 61.2 123.4 62.9 64.3 127.2 3.0% 5.0% 2.2% Net commissions 58.2 59.7 117.8 64.7 65.0 129.7 10.1% 9.0% 0.5% Trading profit 19.6 11.9 31.6 13.7 12.3 26.0 -17.7% 2.9% -10.4%
Slide 30: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q16 2Q16 1H16 3Q16 4Q16 FY16 1Q17 2Q17 1H17 Margins Margins Margins Margins Margins Margins Margins Margins Margins Sight Deposits 55.4 15,328 54.2 16,105 109.6 15,716 54.6 1
Slide 31: UniCredit bonds underwritten
UniCredit bonds underwritten ISIN Currency Amount (€ m) Maturity Indexation Spread 1 IT0004307861 Amortizing Euro 150.0 2-Oct-17 Euribor 1m 0.51% IT0004307861 Amortizing Euro 150.0 2-Jan-18 Euribor 1m 0.51% 2 IT0005010258 Euro 382.5 27-Jul-17 Euribor 1m 1.94% 3 IT0005010738 Euro 382.5 25-Oct-17 Euri
Slide 32: Details on Net Commissions
Details on Net Commissions mln 1Q16 2Q16 1H16 3Q16 4Q16 FY16 1Q17 2Q17 1H17 Brokerage 20.3 18.5 38.8 16.6 19.5 74.9 20.3 18.3 38.5 o/w Equity 16.5 15.2 31.7 12.9 16.0 60.6 16.7 15.2 31.9 Bond 1.1 1.1 2.3 0.9 1.2 4.4 1.0 0.9 1.9 Derivatives 3.2 2.6 5.8 2.4 2.4 10.6 2.4 2.0 4.4 (1) Other commissions -
Slide 33: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q16 2Q16 1H16 3Q16 4Q16 FY16 1Q17 2Q17 1H17 Net interest income 59.7 58.9 118.6 59.9 61.3 239.8 61.9 63.0 125.0 Net commissions 0.3 0.8 1.1 1.6 2.0 4.7 0.6 1.9 2.6 Trading profit 0.9 1.1 2.0 0.9 1.5 4.4 1.3 1.0 2.3 Other 0.0 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.2 Tota
Slide 34: Breakdown TFA
Breakdown TFA mln March 16 June 16 Sept 16 Dec. 16 March 17 June 17 AUM 25,565 25,911 27,522 28,608 29,742 30,614 o/w Funds and Sicav 22,332 22,395 23,645 24,258 24,984 25,461 o/w Insurance 3,219 3,505 3,865 4,339 4,749 5,145 o/w GPM 14 12 12 11 9 9 AUC 12,889 12,688 13,051 13,078 13,895 13,870 o/w
Slide 35: Balance Sheet
Balance Sheet mln March 16 June 16 Sept 16 Dec. 16 March 17 June 17 Due from Banks 15,404 15,299 14,442 15,736 15,462 14,827 Customer Loans 827 880 972 1,017 1,166 1,504 Financial Assets 2,629 2,933 3,592 3,764 3,912 4,770 Tangible and Intangible Assets 111 111 112 112 112 113 Derivatives 7 9 8 9 12
Slide 36: Main Financial Ratios
Main Financial Ratios March 16 June 16 Sept 16 Dec. 16 March 17 June 17 PFA TFA/ PFA (mln) (1) 17.8 17.9 18.8 19.6 20.2 20.7 Guided Products / TFA (2) 22% 24% 26% 27% 28% 29% Cost / income Ratio (3) 43.0% 43.0% 42.2% 41.6% 42.8% 42.9% CET 1 Ratio 21.3% 22.7% 23.1% 22.9% 22.2% 22.1% Adjusted RoE (4)
Slide 37: Highly scalable operating platform
Highly scalable operating platform Platform excellence and cost discipline providing strong operating leverage Costs vs Growth 2013 2014 2015 2016 2013-2016 CAGR 60 +11% 55 49 TFA (€ bn) 44 1118 +8% 1048 964 Clients (thd) 898 559 +14% 544 451 Revenues (€ mn) 373 233 226 +6% Operating costs (€ mn) 21