Finecobank Spa · MIL:FBK
Finecobank Spa — J.P. Morgan Italian Conference (September 2016)
40 slides from Finecobank Spa's conference presentation, September 2016
Slide 1: 2Q16 Results – Company overview, September 2016
2Q16 Results Company overview – September 2016
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, p
Slide 3: Agenda
Agenda Highlights 2Q16 Results Next steps 3
Slide 4: Introducing Fineco
Introducing Fineco Leading multichannel direct bank in Italy, pioneer in anticipating sector trends since 1999 57.7bn 3.4bn TFA net sales One single account with multiple service access Aug 2016 Jan-Aug 2016 Online traditional banking services 289mln +7.6% Trading platforms 1H16 revenues revenues y/
Slide 5: Growth and Innovation History
Growth and Innovation History The bank for the future … dating back to 1999 Part of Pioneer in Capitalia online Business Group, Merger of Fineco trading innovation FinecoGroup and Xelion Banca Birth of st 1 bank S.p.A. listed Capitalia Most relevant A leading Banca combining PFA on Borsa merged into
Slide 6: Fineco Highlights
Fineco Highlights Unique business model, leading position in core segments, recurring profitability and attractive growth In the "sweet spot" to capture healthy long term sector dynamics Attractive market Leading position in core markets, difficult to replicate Unique, fully integrated business mode
Slide 7: Integrated Business Model
Integrated Business Model Fully integrated offer of banking, investing and brokerage services via a truly direct multi-channel approach, already at the forefront of banking distribution evolution Online banking 99% of total number of executed orders initiated online1 ASSET ASSET GATHERING ASSET ANDG
Slide 8: Focus on trading platforms
Focus on trading platforms Key figures as of June 2016 Well diversified platform By product1 14.8m Executed orders Multichannel integrated Funds 7% platform with ease of access Market share in equity Forex and CFD 19.63% trading in Italy 19% Fully integrated services, with C. 127k Active clients acc
Slide 9: PFA network distribution – as of June 2016
PFA network distribution – as of June 2016 Capillary network, well spread across Italian regions, with lean structure €46.6 bn Distribution network PFA network structure Total Financial Assets related to PFAs 2,642 PFAs North-west Centre 33% 27% Area managers 30 North-east South and 14% Islands 26%
Slide 10: Limited TFA concentration per Personal Financial Advisor
Limited TFA concentration per Personal Financial Advisor PFA network with limited TFA concentration, hence minimizing "key man" risk Breakdown of PFAs by per capita TFA1 Average seniority Almost 853PFAs with TFA TFA (€m) # of PFAs % on total PFA % total TFA at Fineco in excess of €20m … 0-5 399 15.1
Slide 11: Latest Awards
Latest Awards World Finance 100 The most recommended bank The international magazine World Fineco is the most Finance 100 positioned Fineco among recommended bank in the world the 100 top corporations of 2015, from by word of mouth from a selection of 17 banks at a global level customers, non-custom
Slide 12: Agenda
Agenda Highlights 2Q16 Results Next steps 12
Slide 13: Executive Summary
Executive Summary 1H16 net profit at 117.8mln, 101mln net of positive non recurring items1 (+7.8% y/y) the best semester ever, confirming the effectiveness of a unique business model able to generate strong performance in every market condition 2Q16 net profit at 66.6mln, 49.8mln net of positive non
Slide 14: Results
Results Best semester ever: 101mln excluding positive non recurring items(1) (+7.8% y/y), boosted by higher revenues coupled with lower operating costs Net Profit, mln Revenues, mln excluding positive non recurring items(1) excluding positive non recurring items(1) +13.6% +2.2% +7.9% +1.9% +25.7% +7
Slide 15: Revenues by P&L Items
Revenues by P&L Items Growing y/y revenue generation, despite the challenging environment, mainly supported by net interest and trading income. Investing fees up at 77.6mln in 1H16 Net interest, mln Fees and Commissions, mln +3.3% +6.7% Brokerage -7.2% Investing -1.7% 127.0 115.7 123.4 Banking Other
Slide 16: Net interest
Net interest Sustainable and high quality volume dynamics more than offset lower margins and declining interest rates Sight Deposits (mln) and net margins (bps) Term Deposits (mln) and net margins (bps) +19.1% +5.1% -46.7% 14,537 15,328 16,105 1,358 -13.9% 12,729 13,522 14,084 1,014 793 673 628 540
Slide 17: Net interest: focus on UniCredit bonds portfolio
Net interest: focus on UniCredit bonds portfolio 9.5% sight deposits growth to offset lower rates and bond portfolio run off Run-off UniCredit bonds portfolio (mln) and spread (bps) 2,225 1,805 1,925 1,725 1,725 1,575 700 350 2016 2017 2018 2019 2020 2021 2022 2023 Average spread 53 178 202 202 235
Slide 18: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA Staff expenses, mln and FTE, # Stock granting post IPO 992 1021 1025 Staff expenses, related to top managers and key employees Other administrative expenses, related to PFAs +1.1% +1.4% 8.0 +1.6% 1.7 5.4 4.1 37.2 37.7 2.7 2.7 1.4 0.8
Slide 19: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet RWA, mln CET1 Ratio transitional, % Credit Market Operational +1.9p.p. +1.4p.p. 0.0% 20.79% 20.43% 21.39% 21.31% 22.68% -1.8% 1,826 1,804 1,828 1,859 1,826 Jun.15 Sept.15 Dec.15 Mar.16 Jun.16 1,061 1,044 1,066 1,071 1,090 CET1
Slide 20: TFA
TFA 19.7 bn net sales gathered in 5 years and a half. Guided products and services increased at 51% of total AuM TFA evolution (Dec.10-Jun.16), bn Cumulated performance, bn Net Sales +19.7 bn 55.3 2.6 -2.4 55.6 0.5 Market Effect +0.6 bn 5.5 49.3 1.7 43.6 4.0 1.3 39.8 2.5 2.5 35.2 2.8 -3.0 35.0 2.3 T
Slide 21: TFA and Net sales - breakdown
TFA and Net sales - breakdown Shift towards high added value products resulting in 2.5bn net sales in Guided products out of 0.8bn net sales in AuM in 2016 Breakdown of total net sales, bn Breakdown of total TFA, bn Guided products as % of AuM 5.5 2.5 bn Guided 57.7 53.7 53.8 55.3 55.0 4.0 -2% y/y 4
Slide 22: Personal Financial Advisors (PFA) network – Total Net sales
Personal Financial Advisors (PFA) network – Total Net sales Organic expansion continue to deliver solid results through a network of 2,642 PFAs PFA Network – total net sales, bn Net sales, bn - Organic/New Recruit of the year AuM AuC Deposits Net Sales (Organic) Net Sales (New Recruit) 4.9 2.5 bn Gu
Slide 23: Revenues by Product Area
Revenues by Product Area Well diversified stream of revenues allowing the bank to successfully face any market environment Banking, mln 45% +3.5% +6.0% -0.3% 114.9 121.7 58.8 61.0 60.8 2Q15 1Q16 2Q16 1H15 1H16 Brokerage, mln 26% Investing, mln 29% Core revenues (NI excluded) -1.0% +0.8% -7.4% -2.9%
Slide 24: Banking
Banking Outstanding y/y results notwithstanding declining interest rates thanks to strong volume growth. 1H16 fees affected by new regulation on interchange fees(1) Revenues, mln Direct deposits eop (mln) Net interest Sight Deposits Term Deposits +6.0% Net fees +13.0% Net trading 121.7 Other 114.9 +
Slide 25: Brokerage
Brokerage Growing y/y executed orders more skewed towards OTC products. Trading profit affected by lower traded volumes linked to market drop Revenues, mln Volatility Index - Ftse Mib Net interest Net fees Net trading Core revenues (NI excluded) -9.9% -11.7% 78.0 8.0 68.9 5.8 -2.9% -7.43% -11.9% -11
Slide 26: Investing
Investing Resilient fees and margins thanks to a continuous shift towards Guided products and services Revenues (Net Commissions), mln AuM eop (bn) Upfront fees Management fees Others -1.0% +1.4% +0.8% 26.1 26.2 26.3 25.9 24.8 25.6 77.0 77.6 5.5 4.6 -1.0% Mar.15 Jun.15 Sep.15 Dec.15 Mar.16 Jun.16 +7
Slide 27: Agenda
Agenda Highlights 2Q16 Results Next steps 27
Slide 28: A great potential to fully exploit
A great potential to fully exploit 1 INCREASE PRODUCTIVITY Cyborg advisory & X-Net Mortgages 2 MORE FOCUS ON LENDING Personal loans 3 EXPANSION ABROAD UK project 28
Slide 29: Underlying rationale and potential (1/3): Increase productivity
Underlying rationale and potential (1/3) 1 INCREASE PRODUCTIVITY Cyborg-advisory and X-Net To remain on the market successfully, the increase of PFAs network productivity is mandatory for the industry to cope with expected pressure on margins Fineco can leverage on the concept of Cyborg-advisory tha
Slide 30: Underlying rationale and potential (2/3): Lending
Underlying rationale and potential (2/3) 2 LENDING Mortgages Mortgages owned by clients outside Fineco New law 119/2016 for repossession of new residential mortgage collateral (Decreto banche/ 8.4bn Patto Marciano)1 makes mortgages business more appealing reducing CoR The current interest rate envir
Slide 31: Underlying rationale and potential (3/3): Expansion abroad
Underlying rationale and potential (3/3) 3 EXPANSION ABROAD UK project UK: large but inefficient market in terms of value proposition Focus on retail UK residents One stop shop (banking/ brokerage/ investing) leveraging on Fineco's existing platform Light cost approach and strong operational efficie
Slide 32: Annex
Annex 32 BA N K
Slide 33: P&L
P&L mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Net interest income 56.5 59.3 115.7 62.9 62.1 240.8 62.2 61.2 123.4 Net commissions 62.8 64.2 127.0 62.0 63.6 252.6 58.2 59.7 117.8 Trading profit 17.1 11.0 28.1 13.2 12.6 53.9 19.6 27.3 46.9 Other expenses/income 0.4 -3.4 -3.1 1.6 -1.5 -3.0 0.1 0
Slide 34: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Margins Margins Margins Margins Margins Margins Margins Margins Margins Sight Deposits 51.6 12,729 52.2 13,522 103.8 13,125 54.5 1
Slide 35: UniCredit bonds underwritten
UniCredit bonds underwritten ISIN Currency Amount (€ m) Maturity Indexation Spread 1 IT0004307861 Amortizing Euro 150.0 30-Sep-16 30-Sep-16 0.51% IT0004307861 Amortizing Euro 150.0 2-Oct-17 2-Oct-17 0.51% IT0004307861 Amortizing Euro 150.0 2-Jan-18 2-Jan-18 0.51% 2 IT0005010233 Euro 382.5 30-Jan-17
Slide 36: Details on Net Commissions
Details on Net Commissions mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Brokerage 25.0 20.8 45.8 20.3 19.2 85.3 20.3 18.5 38.8 o/w Equity 19.9 17.3 37.2 16.4 15.1 68.7 16.5 15.2 31.7 Bond 2.5 1.2 3.7 1.1 1.3 6.0 1.1 1.1 2.3 Derivatives 2.5 2.3 4.9 2.6 2.4 9.9 3.2 2.6 5.8 (1) Other commissions 0.
Slide 37: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Net interest income 52.8 54.8 107.6 58.0 58.1 223.7 59.7 58.9 118.6 Net commissions 1.5 2.8 4.3 3.2 3.3 10.9 0.3 0.8 1.1 Trading profit 1.9 1.3 3.2 1.1 1.2 5.4 0.9 1.1 2.0 Other -0.1 -0.1 -0.2 -0.1 -0.1 -0.3 0.0 0.1 0
Slide 38: Breakdown TFA
Breakdown TFA mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 AUM 26,121 26,169 24,825 26,277 25,565 25,911 o/w Funds and Sicav 23,313 23,221 21,949 23,100 22,332 22,395 o/w Insurance 2,793 2,933 2,862 3,163 3,219 3,505 o/w GPM 15 15 14 14 14 12 AUC 13,219 12,613 12,868 13,419 12,889 12,688 o
Slide 39: Balance Sheet
Balance Sheet mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Due from Banks 14,070 14,583 13,966 14,649 15,404 15,299 Customer Loans 797 836 885 923 827 880 Financial Assets 2,270 2,244 2,241 2,250 2,629 2,933 Tangible and Intangible Assets 109 109 109 110 111 111 Derivatives 25 40 7 11 7 9
Slide 40: Main Financial Ratios
Main Financial Ratios March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 PFA TFA/ PFA (mln) 17.6 17.6 17.0 17.9 17.8 17.9 Guided Products / TFA 19% 20% 20% 21% 22% 24% Revenues per TFA (bps) 106.1 103.8 106.7 104.0 101.6 104.2 Cost / income Ratio(1) 43.8% 44.6% 42.6% 42.7% 43.0% 43.0% CET 1 Ratio 19
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