Finecobank Spa · MIL:FBK
Finecobank Spa — Finecobank Banca Fine — Q2 2024 Earnings Presentation
44 slides from Finecobank Spa's earnings presentation, Jul 30, 2024
Slide 1: 2Q24 Results
2Q24 Results Alessandro Foti CEO and General Manager Milan, July 30th 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 ◼ CET1 ratio at 25.8%,TCR at 36.2%, Leverage ratio at 5.35% ◼ 1H24 Net Profit is 320.3
Slide 5: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Net Profit at 320.3 mln, +9.8% y/y excluding systemic charges. Results supported by sound acceleration of Investing and Brokerage, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed 1H2
Slide 6: Our priority: accelerating on Investing
Our priority: accelerating on Investing Growing AUM thanks to our best-in-class market positioning, coupled with higher efficiency on the value chain through FAM Increasing Investing revenues thanks to FAM Investing Revenues, mln +11.9% 174.7 +10.3% 156.2 mln 2Q23 1Q24 2Q24 1H23 1H24 +5.9% Investing
Slide 7: Combining growth potential from FAM and emerging advisory trend
Combining growth potential from FAM and emerging advisory trend FAM key to sustain AUM margins thanks to more efficient value chain, Fineco best placed to catch clients demand for efficient and fair solutions FAM consistently contributing to FBK net sales, with strong room to grow as a % of our Inve
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 5 bps -9.2% Jun.23 Mar.24 Jun.24
Slide 11: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements Current (€/bn) Jun.23 Mar.24 Jun.24 Jun.23 Mar.24 Jun.24 Requirement CET1 Ratio 23.20% 25.29% 25.78% 8.24% CET1 Capital 1.07 1.19 1.23 SOLVENCY Total Capital Ratio 34.04% 35.94% 36.24% 12.61% Tier1 Capital 1.57 1.69 1.73 Leverage Ra
Slide 12: Agenda: Fineco Commercial Results
Agenda ❑ Fineco Financial Results ✓Fineco Commercial Results ❑ Next steps ❑ Key messages 12
Slide 13: Clients' acquisition: a strong 1H24 thanks to our organic growth
Clients’ acquisition: a strong 1H24 thanks to our organic growth Keeping on enjoying the secular growth trends and improving the marketing efficiency thanks to AI Strong acceleration in our organic new clients’ acquisition metrics Thd, # New clients y/y growth 73.6 Very strong 1H24, growing 14.2 +22
Slide 14: 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 AuM Client segmentation 1.0mln 1-5mln >10mln AuC 131.3 122.6 Deposits 10% 107.9 106.6 8.4% 91.7 47% 8.7% 81.4 46% 34.9% 69.3 45% 42% 49% 41% 42% 41% 37% 48.
Slide 15: 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: +157.7% 131.3 122.6 10.7 8.8 107.9 106.6 35% 10.3 34% 9.3 2.7 47% 91.7 27% 30% 47% 3.6 81
Slide 16: 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 17: 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 18: Agenda: Next steps
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ✓Next steps ❑ Key messages 18
Slide 19: 2024 Guidance: improved outlook, record Net Profit expected
2024 Guidance: improved outlook, record Net Profit expected 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
Slide 20: 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 21: Agenda: Key messages
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ✓Key messages 21
Slide 22: 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 23: 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 24: 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 1,118 1,200 461 637 + 17% Clients (thd, #) 964 1,048
Slide 25: 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 26: Annex
Annex 26
Slide 27: P&L pro-forma
P&L pro-forma P&L pro-forma(1) mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 1H23 1H24 Net financial income 157.4 170.8 180.2 179.5 688.0 180.8 182.5 328.3 363.3 o/w Net Interest Income 157.4 170.8 180.0 179.5 687.7 179.0 182.5 328.2 361.5 o/w Profit from treasury management 0.0 0.1 0.1 0.0 0.2 1.8 0.0 0.1
Slide 28: 1H24 P&L FinecoBank and Fineco Asset Management
1H24 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Individual Consolidated Management Net financial income 0.6 362.7 363.3 Dividends 0.0 32.6 0.0 Net commissions 81.5 175.7 257.2 Trading profit 0.0 37.7 37.7 Other expenses/income -0.5 0.8 0.1 Total revenues 81.6 6
Slide 29: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 1H23 1H24 Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 108.1 27,846 110.3 26,545 112.5 25,6
Slide 30: Focus on Bond portfolio
Focus on Bond portfolio Bond Portfolio (nominal value) € bn, eop 21.2 bn Bond portfolio Nominal value: 21.2 bn: 0.9 5.4 Italy 5.0 ▪ o/w 63% at fixed rate, avg yield: 113 bps Spain Other Govies (1) ▪ o/w 37% at floating rate (swapped), avg spread: 33 bps on 3m Eur (2) SSA Residual maturity total port
Slide 31: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 1H23 1H24 Banking 14.6 15.6 12.0 13.2 55.3 12.0 12.0 30.2 24.0 Brokerage 31.3 24.2 23.5 27.0 105.9 33.0 28.9 55.5 61.8 o/w Equity 22.8 16.1 17.6 17.3 73.8 23.2 20.8 38.9 43.9 Bond 3.9 5.1 2.1 5.6 16.7 6
Slide 32: Revenues breakdown by Product Area
Revenues breakdown by Product Area mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 1H23 1H24 Net financial income 153.8 166.1 174.6 173.3 667.8 171.5 172.2 319.9 343.7 o/w Net interest income 153.8 166.0 174.5 173.3 667.6 169.8 172.2 319.8 341.9 o/w Profit from Treasury Management 0.0 0.1 0.1 0.0 0.2 1.8 0.0
Slide 33: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 Jun.24 AUM 54,132 55,803 55,400 58,016 60,425 61,645 Funds and Sicav 35,962 37,373 36,807 38,839 40,708 41,557 Insurance 15,052 14,708 14,359 13,760 13,579 13,242 AUC under advisory 2,787 3,377 3,893 5,052 5,756 6,423 Other 331
Slide 34: 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 66% and hold 90% of TFA +11.6% +12.7% +30 +1.8% 101.1bn 113.9bn 2,951 2,952 2,983 2,982 100 100 37.5 38.2 > €35mln 34.2 +9.5% €25-35mln 34% 40% 66% y/y
Slide 35: Balance Sheet
Balance Sheet mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 Jun.24 (1) Due from Banks 1,860 1,934 2,224 2,643 3,808 3,222 Customer Loans 6,312 6,184 6,058 6,199 6,098 6,116 Financial Assets 24,366 22,630 21,648 21,417 20,426 20,750 Tangible and Intangible Assets 268 269 266 271 266 266 Derivatives 1,300 1,
Slide 36: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 32.8 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) 20.8 Equity ◼ 99.9% not
Slide 37: 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 the growth of deposits and improve our quality 150 160 170 180 190 200 250 300 350 400 450 500 -5,000 6.84% 6.87% 6.90% 6.94% 6.9
Slide 38: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 882% 369% 127% 161% FBK avg EBA FBK avg EBA Fineco as of Jun.24; avg EBA as of Mar.24 Fineco as of Jun.24; avg EBA as of Mar.24 HQLA/Deposits 73% FBK HQLA: €20.2 bn as of June 24 Average 68% 38% (12 months avg) 54% 52% 45% 43% 39% 41% 37%
Slide 39: Fineco Asset Management in a nutshell
Fineco Asset Management in a nutshell FAM is active on 7 business lines, providing not only the expertise of the best Asset Managers but also solutions managed internally by FAM to deepen further the range of strategies and the flexibility of FAM catalogue of products. 1 GLOBAL DEFENCE 2 PROFILE FUN
Slide 40: Preserving our best price/quality ratio
Preserving our best price/quality ratio Competitive landscape(1) € Online € 101 avg € 150 avg Branch online costs branch costs Ing (Conto Arancio Più) 0 Widiba (Conto Start) 20 53 Webank 24 Fineco 40 Illimity (Conto Illimity Classic) 46 HelloBank! (Hello! Money) 60 Banca Sella (Conto Start) 62 161 I
Slide 41: ESG HIGHLIGHTS
ESG HIGHLIGHTS ESG OFFER & BANK’s PORTFOLIO 88% of funds distributed (# ISIN) with an ESG Rating (1) 62% of new funds launched in 2Q24 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 Indices
Our ESG ratings and Indices RATING AGENCY EVALUATION SCALE 2Q24 ESG INDICES (0-100) 68 New S&P Global ESG Score Data Availability: Very High Fineco included in: (From D- to A) C Awareness band: Knowledge of impacts on, and of, climate issues (100-0) 12.1 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
Finecobank Banca Fine — Q2 2024 Earnings Presentation on 6ix