Finecobank Spa · MIL:FBK
Finecobank Spa — Non-Deal Roadshow (January 2017)
42 slides from Finecobank Spa's roadshow presentation, January 2017
Slide 1: 3Q16 Results – Company overview – January 2017
3Q16 Results Company overview – January 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, p
Slide 3: Agenda
Agenda Highlights 3Q16 Results Further opportunities 3
Slide 4: Introducing Fineco
Introducing Fineco Leading multichannel direct bank in Italy, pioneer in anticipating sector trends since 1999 60.2bn 5.0bn TFA net sales One single account with multiple service access 2016 Jan-Dec 2016 Online traditional banking services 421mln +3.3% Trading platforms 9M16 revenues revenues y/y In
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 GATH
Slide 8: Focus on trading platforms
Focus on trading platforms Key figures as of Sept 2016 Well diversified platform By product1 20.9m Executed orders Multichannel integrated Funds 8% platform with ease of access Market share in equity Forex and CFD 19.63% trading in Italy as of June’16 18% Fully integrated services, with C. 140k Acti
Slide 9: PFA network distribution – as of September 2016
PFA network distribution – as of September 2016 Capillary network, well spread across Italian regions, with lean structure €49.2 bn Distribution network PFA network structure Total Financial Assets related to PFAs 2,626 PFAs South and Centre Islands 27% 26% Area managers 29 North-east North-west 15%
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 Almost 898 PFAs with TFA Average seniority TFA (€m) # of PFAs % on total PFA % total TFA in excess of €20m … at Fineco 0-5 368 17.
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 3Q16 Results Further opportunities 12
Slide 13: 3Q key messages
3Q key messages Delivery of consistent results in every market condition Growing revenues thanks to a very well diversified business model with smooth quarterly path Cost reduction on the way of a strong operating leverage and best-in-class IT platform Increased Net Profit confirming the effectivene
Slide 14: Executive Summary
Executive Summary 3Q16 net profit at 44.6mln including -11mln gross related to Deposit Guarantee Scheme (DGS). Net of this, net profit at 52.0mln (+4.4% q/q), the best quarter of the year, confirming the effectiveness of a unique business model able to generate strong performance in every market con
Slide 15: Results
Results 3Q impacted by systemic charges, net of this net profit at 52mln, best quarter of the year. 9M16 +2.8% y/y on a comparable basis, boosted by strong operating leverage Net Profit, mln excluding positive non recurring items(1) Net Profit excl. DGS -2.2% (11mln, gross(2)) -19.1% 148.8 162.4 152
Slide 16: Revenues by P&L Items
Revenues by P&L Items Resilient y/y revenue generation, despite the complex environment, mainly supported by net interest, trading income and investing fees (up to 118.6mln in 9M16) Net interest, mln Fees and Commissions, mln -0.6% +4.1% Brokerage -6.3% Investing +2.2% 189.0 178.6 186.0 Banking 177.
Slide 17: 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) +18.3% -47.9% +3.5% 1,014 -23.5% 793 16,663 673 628 14,084 14,537 15,328 16,105 540 413 13,522 2Q
Slide 18: Net interest: focus on UniCredit bonds portfolio
Net interest: focus on UniCredit bonds portfolio New sensitivity analysis: 4.6% sight deposits growth to offset lower rates and bond portfolio run off UC Bonds run-offs (mln) and spread (bps) 1,725 1,725 New stress test assumptions 1,575 Forward Euribor curve (-0.33% in 2017, - 0.22% in 2018, -0.06%
Slide 19: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA. Development costs down q/q mainly due to lower marketing and PFAs related costs Staff expenses, mln and FTE, # Stock granting post IPO 1013 1025 1033 Staff expenses, related to top managers and key employees +1.6% Other administrativ
Slide 20: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet RWA, mln CET1 Ratio transitional, % Credit Market Operational +2.7p.p. +0.5p.p. -0.3% 21.39% 21.31% 22.68% 23.14% 20.43% -1.5% 1,804 1,828 1,859 1,826 1,799 Sept.15 Dec.15 Mar.16 Jun.16 Sept.16 1,044 1,066 1,071 1,090 CET1 Capi
Slide 21: TFA
TFA Relentless TFA growth thanks to a healthy expansion in net sales Guided products and services increased at 56% of total AuM TFA evolution (Dec.10-Dec.16), bn Cumulated performance, bn 60.2 Net Sales +22.1 bn -0.2 55.3 5.0 Market Effect +2.9 bn 0.5 49.3 5.5 1.7 43.6 4.0 39.8 2.5 1.3 2.5 35.2 2.8
Slide 22: TFA and Net sales - breakdown
TFA and Net sales - breakdown Successful shift towards high added value products reaching 3.9bn net sales in Guided products (+14% y/y) Breakdown of total net sales, bn Breakdown of total TFA, bn Guided products as % of AuM Guided 60.2 3.9bn 57.6 5.5 55.3 55.6 53.8 52.5 5.0 49.3 48% 4.0 48% 2.7 1.8
Slide 23: Personal Financial Advisors (PFA) network – Total Net sales
Personal Financial Advisors (PFA) network – Total Net sales Net sales organically generated confirmed as a key pillar in our growing strategy PFA Network – total net sales, bn Net sales, bn - Organic/New Recruit of the year AuM AuC Deposits Net Sales (Organic) Guided Net Sales (New Recruit) 4.9 3.9b
Slide 24: 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% +4.0% +0.4% +2.8% 177.1 184.2 62.2 60.8 62.5 3Q15 2Q16 3Q16 9M15 9M16 Brokerage, mln 24% Investing, mln 30% Core revenues (NI excluded) -12.4% 114.7 +2.6% 97.6
Slide 25: Banking
Banking Outstanding y/y results driven by strong volume growth and new clients. 9M16 fees affected by new regulation on interchange fees(1) Revenues, mln Direct deposits eop (mln) Net interest Sight Deposits Term Deposits +4.0% Fees and commissions Trading income 184.2 Other 177.1 +14.6% 14,828 16,9
Slide 26: Brokerage
Brokerage 3Q characterized by lower volatility compared to previous quarters Revenues, mln Volatility Index - Ftse Mib Net interest Net fees Net trading Core revenues (NI excluded) -12.4% 114.7 12.8 97.6 8.4 66.1 55.3 Executed orders, mln -18.0% -11.5% 36.6 32.3 4.8 28.7 -0.2% 2.8 -9.5% 2.6 20.3 18.
Slide 27: Investing
Investing 3Q management fees strongly up on the wave of a successful strategy based on cyborg advisory approach Revenues (Net Commissions), mln AuM eop (bn) Upfront fees Management fees Others +2.6% +10.9% +6.2% 115.6 118.6 26.3 25.6 25.9 27.5 28.6 6.9 7.0 24.8 +6.3% Sep.15 Dec.15 Mar.16 Jun.16 Sept
Slide 28: Agenda
Agenda Highlights 3Q16 Results Further opportunities 28
Slide 29: Banking Area
BANKING AREA High quality deposits growth as main pillar in our banking business KEY STRENGHT Sustainable clients’ acquisition with cost of COST OF FUNDING funding close to zero leveraging to best in class services delivered FURTHER OPPORTUNITIES MORE FOCUS ON Mortgages LENDING Rolling Lombard (see
Slide 30: Banking Area: More focus on lending
BANKING AREA More focus on lending MORTAGES ROLLING LOMBARD New law 119/2016 for repossession of new residential Revised Lombard loan with floating pledge allowing clients mortgage collateral (Decreto banche/ Patto Marciano)1 to change pledged assets without closing the credit line makes mortgages b
Slide 31: Guided Products – Investing Area
INVESTING AREA Successful growing strategy based on sustainability and recurrent revenues KEY STRENGHT Organic inflows as main driver of growth and limited SUSTAINABILITY recruits to improve the quality of the network FURTHER OPPORTUNITIES Strategy of increasing PFAs productivity to cope with expect
Slide 32: Brokerage Area
BROKERAGE AREA Continuous healthy client base enlargement and best-in-class offer lead to unrivalled leading position KEY STRENGHT COUNTERCYCLICAL Countercyclical contributor in revenue generation BUSINESS benefitting from spikes in markets’ volatility Daily trades in medium volatility weeks (VIX 14
Slide 33: Highly scalable operating platform
Highly scalable operating platform Platform excellence and cost discipline providing strong operating leverage Costs vs Growth 2013 2014 2015 2013-2015 CAGR 5000 500 55 +13% 4500 450 49 4000 400 1048 +8% TFA (€ bn) 44 3500 350 964 3000 898 300 Clients (thd) 544 +21% 2500 250 451 Revenues (€ mn) 373
Slide 34: Annex
Annex 34 BA N K
Slide 35: P&L
P&L mln 1Q15 2Q15 3Q15 9M15 4Q15 FY15 1Q16 2Q16 3Q16 9M16 Net interest income 56.5 59.3 62.9 178.6 62.1 240.8 62.2 61.2 62.5 186.0 Net commissions 62.8 64.2 62.0 189.0 63.6 252.6 58.2 59.7 59.3 177.1 Trading profit 17.1 11.0 13.2 41.3 12.6 53.9 19.6 27.3 10.8 57.7 Other expenses/income 0.4 -3.4 1.6
Slide 36: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 9M15 9M16 Margins Margins Margins Margins Margins Margins Margins Margins Sight Deposits 51.6 12,729 52.2 13,522 54.5 14,084 55.4 15,328 54.2 16,105 54.6 1
Slide 37: 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 IT0005010233 Euro 382.5 30-Jan-17 Euribor 1m 1.78% 3 IT0005010241 Euro 382.5 28-Apr-17 Euri
Slide 38: Details on Net Commissions
Details on Net Commissions mln 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 9M15 9M16 Brokerage 25.0 20.8 20.3 20.3 18.5 16.6 66.1 55.3 o/w Equity 19.9 17.3 16.4 16.5 15.2 12.9 53.6 44.6 Bond 2.5 1.2 1.1 1.1 1.1 0.9 4.7 3.2 Derivatives 2.5 2.3 2.6 3.2 2.6 2.4 7.5 8.1 (1) Other commissions 0.1 0.0 0.2 -0.5 -0.5 0.4
Slide 39: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 9M15 9M16 Net interest income 52.8 54.8 58.0 59.7 58.9 59.9 165.6 178.5 Net commissions 1.5 2.8 3.2 0.3 0.8 1.6 7.5 2.7 Trading profit 1.9 1.3 1.1 0.9 1.1 0.9 4.2 2.9 Other -0.1 -0.1 -0.1 0.0 0.1 0.1 -0.3 0.1 Total Banking 56.1 58.8
Slide 40: Breakdown TFA
Breakdown TFA mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 AUM 26,121 26,169 24,825 26,277 25,565 25,911 27,522 o/w Funds and Sicav 23,313 23,221 21,949 23,100 22,332 22,395 23,645 o/w Insurance 2,793 2,933 2,862 3,163 3,219 3,505 3,865 o/w GPM 15 15 14 14 14 12 12 AUC 13,219 12,61
Slide 41: Balance Sheet
Balance Sheet mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 Due from Banks 14,070 14,583 13,966 14,649 15,404 15,299 14,442 Customer Loans 797 836 885 923 827 880 972 Financial Assets 2,270 2,244 2,241 2,250 2,629 2,933 3,592 Tangible and Intangible Assets 109 109 109 110 111 111 11
Slide 42: Main Financial Ratios
Main Financial Ratios March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 PFA TFA/ PFA (mln) (1) 17.6 17.6 17.0 17.9 17.8 17.9 18.8 Guided Products / TFA (2) 19% 20% 20% 21% 22% 24% 26% Cost / income Ratio (3) 43.8% 44.6% 42.6% 42.7% 43.0% 43.0% 42.2% CET 1 Ratio 19.4% 20.8% 20.4% 21.4% 21.3%