Banca Generali S.p.a. · MIL:BGN
Banca Generali — Q1 2020 Earnings Presentation
36 slides from Banca Generali's earnings presentation, May 14, 2020
Slide 1: 1Q 2020 Results
1Q 2020 RESULTS 14 MAY 2020 Y= BANCA dios. GENERALI
Slide 2: Agenda
AGENDA Preliminary remarks 1Q 2020 results Net Inflows, assets and recruiting Business Update Appendix 2
Slide 3: Banca Generali & Covid-19: Three Main Lines of Action
BANCA GENERALI & COVID-19 THREE MAIN LINES OF ACTION Health and safety of all our Employees, Financial Advisors, Clients and their families >90% of employees working from home and ensuring 100% of business continuity Ongoing health information delivered with Covid-19 newsletter and video message
Slide 4: 1Q 2020 Results: Executive Summary
1Q 2020 RESULTS: EXECUTIVE SUMMARY SOLID TREND IN SPITE OF COVID-19 Total assets at €65.2bn Total assets on a rollercoaster in 1Q20: from multi-year financial markets’ highs at mid-February to a multi-year lows in March. Back on a recovery path in April (€67.0bn). Overall, sound reaction from clie
Slide 5: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mil) 3M 19 3M 20 % Chg Sound increase in total banking income (+26%) Net Interest Income 15.9 20.2 27.5% Net Financial Income (+22%) lifted by higher banking Net income (loss) from trading activities and Dividends 4.0 4.0 -0.4% assets and more efficien
Slide 6: Net Profit Breakdown
NET PROFIT BREAKDOWN RECURRING NET PROFIT DRIVEN BY A SOLID OPERATING TREND Net profit breakdown m/€ Build-up of recurring net profit m/€ 79.1 +11.4 (11.3) 66.6 (5.9) (5.9) 12.6 45.7 33.3 33.3 (5.4) 33.4 4.7 Operating items Non-operating items 33.3 33.4 1Q19 1Q20 1Q19 NII Net fees Opex Net Tax 1Q20
Slide 7: Agenda
AGENDA Preliminary remarks 1Q 2020 results Net Inflows, assets and recruiting Business update Appendix 7
Slide 8: Net Financial Income
NET FINANCIAL INCOME SOLID NII TREND Net financial income m/€ Total Assets and Interest-bearing Assets bn/€ 11.8 12.5 25.0 24.2 10.0 1.0 1.2 19.9 1.9 4.9 0.9 1.9 2 4.0 1.8 4.0 Other assets Trading gains Loans to Banks 7.8 8.6 Loans to Clients Net interest income 20.1 20.2 6.5 15.9 Financial assets I
Slide 9: Gross Fees
GROSS FEES POSITIVE TREND AND RESILIENCE CONFIRMED Gross recurring fees m/€ Variable fees m/€ 196.8 195.5 172.8 10.8 11.2 4.6 16.6 18.5 13.2 51.1 53.4 Entry fees Banking fees 169.4 165.8 35.2 Management fees 155.0 1Q19 4Q19 1Q20 1Q19 4Q19 1Q20 On On 0.24% 0.30% 0.31% Total Assets 1.16% 1.16% 1.15% T
Slide 10: Management Fees
MANAGEMENT FEES SOLID MANAGEMENT FEE DESPITE THE HIT Quarterly trend m/€ 1Q20 management fees higher than last year (+7% YoY) thanks to asset expansion 169.4 165.8 163.2 Management 155.0 158.8 and limited quarterly erosion (-2% QoQ ) Fees after financial markets’ collapse in March 1Q19 2Q19 3Q19 4Q1
Slide 11: Banking and Entry Fees
BANKING AND ENTRY FEES GROWING FEE DIVERSIFICATION Banking and Entry Fees m/€ Breakdown by product/service mix m/€ 29.7 29.7 27.4 27.4 11.2 10.8 17.8 17.8 14.4 18.9 New revenue Entry fees 4.6 streams Banking fees 8.7 Transactional 18.5 banking, front fees 16.6 13.2 13.0 9.1 10.8 1Q19 4Q19 1Q20 1Q19
Slide 12: Fee Expenses
FEE EXPENSES PAY-OUT RATIO MOVING DOWN Total Fee Expenses m/€ Pay-out to the network % 49.0% 47.5% Ordinary pay-out: 104.4 37.1 94.3 36.5 decrease reflecting the 11.5 9.6 0.5 different asset mix in 21.5 11.4 11.0 Fee expenses to Third 19.7 the period and lower 1Q19 1Q20 parties recruiting activity F
Slide 13: Operating Costs (1/2)
OPERATING COSTS (1/2) OPERATING COSTS DRIVEN BY ASSET EXPANSION AND PERIMETER INCLUSIONS Total operating costs m/€ Breakdown of core operating costs m/€ 1Q20 operating costs included first- time consolidation of Nextam & Valeur, 57.1 including €1.2m one-offs costs for the 50.0 5.1 48.3 ongoing int
Slide 14: Operating Costs (2/2)
OPERATING COSTS (2/2) EFFICIENCY CONFIRMED DESPITE TEMPORARY SPIKE Operating costs/Total assets Cost/Income ratio 0.51% 53.4% 53.9% 52.6% 52.3% 51.1% 46.5% 0.45% 0.42% 39.9% 42.3% 40.3% 41.0% 0.38% 38.1% 38.8% 41.7% 37.1% 0.35% 0.34% 0.34% 32.3% 0.32% 29.3% 2013 2014 2015 2016 2017 2018 2019 1Q20 20
Slide 15: Capital Position
CAPITAL POSITION SOLID CAPITAL REAFFIRMED WITH FULL CAPITAL RETENTION FOR DIVIDENDS CET1 ratio TCR ratio 1Q 2020 net profit was fully retained in compliance with the (0.6%) 16.1% (0.6%) dividend policy approved by the 14.7% 15.5% 14.1% 2019-21 Business Plan The 2019 dividends fully reduced own f
Slide 16: Agenda
AGENDA Preliminary remarks 1Q 2020 results Net Inflows, assets and recruiting Business update Appendix 16
Slide 17: Total Assets
TOTAL ASSETS VOLUMES AND PRODUCT MIX Total Assets bn/€ Managed Solutions bn/€ 69.0 34.0 29.0 30.2 65.2 7.2 61.1 6.5 In-House funds 6.0 9.7 8.4 8.3 Third-party funds 34.0 6.5 8.4 7.4 30.2 Financial wrappers 29.0 8.1 8.7 8.0 Managed solutions Insurance wrappers 1Q19 2019 1Q20 Traditional life policies
Slide 18: Total Net Inflows
TOTAL NET INFLOWS SOLID TREND AMID LOCKDOWN MEASURES Total Net Inflows bn/€ Focus on managed solutions m/€ Solid net inflows driven by 253 flight to quality and search for 1.5 1.4 1.4 asset protection 1.3 0.3 212 0.1 70 0.3 1.0 28 Positive product mix within 0.5 0.3 1.0 managed assets as LUX IM
Slide 19: Total Net Inflows: Record High Contribution from Existing FAs
TOTAL NET INFLOWS RECORD HIGH CONTRIBUTION FROM EXISTING FAS Net inflows by acquisition channel % Recruitment trend (# of Recruits) 1.6 1.5 1.4 45 31% 45% 29% New recruits From retail and Private Banks 31 FA Out 19 21 From other FA Existing network network 75% 79% 64% 9 15 14 10 6 -9% -4% -10% 1Q18
Slide 20: April 2020 Commercial Update
APRIL 2020 COMMERCIAL UPDATE SOLID NET INFLOWS, REBOUND IN ASSETS AND MIX Total net inflows bn/€ Total Assets bn/€ Assets under Advisory bn/€ 1.9 ~ 67.0 65.2 0.6 4.8 4.6 1.4 0.4 0.4 -0.1 0.0 1Q20 April 2020 0.0 preliminary 1Q20 April 2020 estimate Jan-April.20 April 20 Managed solutions Traditional
Slide 21: Agenda
AGENDA Preliminary remarks 1Q 2020 results Net Inflows, assets and recruiting Business update Appendix 21
Slide 22: 2020 Key Business Initiatives
2020 KEY BUSINESS INITIATIVES KEY BUSINESS DRIVERS AND NEW LEVERS 3 Key business drivers: well on track with timely new issues to reflect investment needs 3 New Business levers: ready but on hold amid Covid- 19 with selected new initiatives linked to ‘State guarantee schemes’ linked to Covid-19
Slide 23: 2020 Key Business Drivers: LUX IM
2020 KEY BUSINESS DRIVERS EXPLOITING GROWTH POTENTIAL OF LUX IM Quarterly net inflows in LUX IM LUX IM is strengthening its success within managed products thanks to its wide retail fund classes, bn/€ range of investment lines and ongoing launch of innovative strategies 0.6 0.6 Growth is also su
Slide 24: 2020 Key Business Drivers: ESG
2020 KEY BUSINESS DRIVERS LEVERAGING ON DISTINCTIVE COMMERCIAL APPROACH FOR ESG Strong boost to ESG assets provided by the launch of a tailor-made digital platform and dedicated ESG commercial approach linked to UN’s SDG in 1Q 2019 Ongoing product innovation dedicated to ESG investment strategie
Slide 25: 2020 Key Business Drivers: Insurance Solutions
2020 KEY BUSINESS DRIVERS WRAPPER SOLUTIONS AND PRIVATE INSURANCE Steady growth in insurance solutions with a bias towards insurance wrappers (BG Stile Libero 50 Plus) and the newly launched private insurance (LUX Protection Life) Launch of a limited campaign of traditional life product (BG Cust
Slide 26: 2020 New Business Levers
2020 NEW BUSINESS LEVERS LAUNCH OF NEW BUSINESS LEVERS POSTPONED TO GIVE WAY TO INITIATIVES FOR COVID-19 New dedicated initiatives within business levers are ready but their launch is on hold amid the outbreak of the pandemic Covid-19 Priority to lending initiatives with the State guarantee Fund
Slide 27: 2020 New Revenue Streams
2020 NEW REVENUE STREAMS MATERIAL CONTRIBUTION TO BUSINESS Material contribution to business diversification and financial results from all initiatives Advanced advisory and structured products have already achieved their 2021 goals while BG SAXO is rapidly accelerating Advanced Advisory, Struct
Slide 28: Focus on Operations During Lockdown
FOCUS ON OPERATIONS DURING LOCKDOWN MARCH AND APRIL BUSINESS ACTIVITY FAs Operations 9 out of 10 FAs completed operations digitally Assets transferred (# operations) 10 out of 10 FAs completed their training programs IN 5,977 (same as in Mar./Apr. 2019) digitally OUT 860 (-11% vs. Mar./Apr. 2019
Slide 29: Agenda
AGENDA Preliminary remarks 1Q 2020 results Net Inflows, assets and recruiting Business update Appendix 29
Slide 30: Net Financial Income (2/2)
NET FINANCIAL INCOME (2/2) FOCUS ON FINANCIAL ASSETS Financial Assets by IFRS classification bn/€ Maturity (Bond) Duration (Bond) 3.5 3.5 1.6 1.5 8.6 1.3 0.8 7.8 1.0 0.6 6.5 0.1 Total HTCS Total HTCS 3.1 Total HTCS Total HTCS 0.1 2.8 2019 1Q20 2019 1Q20 2.2 Bond breakdown by Bond Classification matu
Slide 31: Assets Under Advisory (AuA)
ASSETS UNDER ADVISORY (AUA) AIMING HIGH Assets under Advanced Advisory (AuA) Active FAs1 as % of total assets 65.2 +37 pts 17.0% Advanced 4.6 59% 61% Advisory (AuA) 39% 24% Base 60.6 7.3% 2017 2018 2019 1Q20 Advisory 7.1% 4.1% No. of contracts (#) 2.4% +288% 8,147 2017 2018 2019 1Q20 Assoreti 7,511
Slide 32: BG Fund Management Lux (BG FML) Assets
BG FUND MANAGEMENT LUX (BG FML) ASSETS POSITIVE ASSET REBOUND IN APRIL BG FML - Assets by SICAV bn/€ BG FML - Total Assets, bn/€ 65.2 16.9 16.9 16.2 16.1 15.1 14.7 15.1 0.3 14.7 Lux-based 0.2 Institutional fund 9.7 23% 0.3 9.0 assets 0.3 classes 9.2 8.2 (BG FML) 6.0 5.1 4.7 Retail fund 7.2 classes 5
Slide 33: Advisory Network (1/2)
ADVISORY NETWORK (1/2) STEADY QUALITY GROWTH FA Network, # FAs FA Network, by portfolio size and skills 2,040 2,058 1,985 Clusters (% of Assets) No. of FAs Assets per FA 1,936 1,841 1,715 1,645 Wealth 1,475 35% 3191 76.4 m/€2 Financial Advisors Managers 33 Private Bankers 52% 1,2311 27.2 m/€2 Financ
Slide 34: Advisory Network (2/2)
ADVISORY NETWORK (2/2) BEST-IN-CLASS PORTFOLIO AND STILL GROWING Average FA portfolio (Assets/Financial Advisor) m/€ 1 Best Player ex BG1 Assoreti Banca Generali 32.8 29.0 28.8 25.8 24.3 27.8 22.2 24.3 19.7 23.2 22.0 16.6 18.0 21.5 15.9 16.1 15.9 20.7 15.6 15.8 18.3 18.5 14.5 18.4 16.0 16.8 16.4 15.
Slide 35: Disclaimer
DISCLAIMER The manager responsible for preparing the company’s financial reports (Tommaso Di Russo) declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law of Finance, that the accounting information contained in this presentation corresponds to the document results, books and a
Slide 36: 2020 Upcoming Events
2020 UPCOMING EVENTS Investor Relations Contacts JULY Su Mo Tu We Th Fr Sa Giuliana Pagliari 1 2 3 4 1H 2020 Results Investor Relations Manager Conference Call Phone +39 02 408 26548 5 6 7 8 9 10 11 Mobile +39 331 65 30 620 12 13 14 15 16 17 18 E-mail: giuliana.pagliari@bancagenerali.it 19 20 21 22