Finecobank Spa · MIL:FBK
Finecobank Spa — Debt Investor Presentation (November 2024)
49 slides from Finecobank Spa's debt investor presentation, November 2024
Slide 1: 3Q24 Results
3Q24 Results Lorena Pelliciari CFO Milan, November 2024 FINECO. SIMPLIFYING BANKING.
Slide 2: Agenda
Agenda ✓Fineco overview ❑ Fineco 9M24 Results ❑ Solvency, liquidity, MREL and risks ❑ Next steps ❑ Annex 2
Slide 3: Fineco, a leading FinTech Bank in Europe
Fineco, a leading FinTech Bank in Europe Integrated offer of Banking, Brokerage and Investing via multi-channel approach, for sustainable growth Corporate purpose: support clients in the responsible management of their savings in order to create the conditions for a more prosperous and fairer societ
Slide 4: Fineco, Megatrends the roots of future growth
Fineco, Megatrends the roots of future growth Current environment is intensifying the structural trends that are reshaping our society Structural trends deeply reshaping our society… DEMAND FOR RESTRUCTURING OF 1 2 DIGITALISATION 3 ADVANCED ADVISORY TRADITIONAL BANKS The growing participation of Ita
Slide 5: A unique positioning for a long-term growth story
A unique positioning for a long-term growth story Huge potential to gain additional market share of Italian households’ wealth Fineco, a long term growth journey just at the beginning €, bn Italian households TFA (Bankit) other Equity 5,692 5,725 GROWING STRUCTURAL TAILWINDS Insurance and pension 21
Slide 6: 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 7: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 33.4 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) Equity 21.5 ◼ 99% not ex
Slide 8: Focus on Bond portfolio
Focus on Bond portfolio Bond Portfolio (nominal value) € bn, eop 21.8 bn Bond portfolio Nominal value: 21.8 bn: 0.9 5.3 Italy 5.6 ▪ o/w 64% at fixed rate, avg yield: 122 bps Spain Other Govies (1) ▪ o/w 36% at floating rate (swapped), avg spread: 33 bps on 3m Eur (2) 4.2 SSA Residual maturity total
Slide 9: Agenda
Agenda ❑ Fineco overview ✓Fineco 9M24 Results ❑ Solvency, liquidity, MREL and risks ❑ Next steps ❑ Annex 9
Slide 10: Executive Summary: further acceleration in our expected growth
Executive Summary: further acceleration in our expected growth 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 27.3%,TCR at 38.0%, Lever
Slide 11: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Net Profit at 490.0 mln. Results supported by sound acceleration of Investing and Brokerage, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed 9M23 9M24 9M24/ mln Revenues 9M23 Net fin
Slide 12: 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 +11.7% 268.6 240.6 +11.3% mln 3Q23 2Q24 3Q24 9M23 9M24 +4.5% Investing
Slide 13: 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 14: 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 15: 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 16: 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 7 bps 5 bps 5 bps -8.0% Sep.23 Jun.24 Sep.24
Slide 17: Looking back 2023/2024: the roots of the step-up in our current growth
Looking back 2023/2024: the roots of the step-up in our current growth Solid improvement in the quality our new clients, coupled with a sizable opportunity for our Investing Strong acceleration in our organic new clients’ acquisition metrics: on track for 2nd record year in a row Thd, # New clients
Slide 18: 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 135.3 122.6 8.5% Deposits 10% 107.9 106.6 91.7 48% 8.8% 81.4 46% 34.6% 49% 69.3 45% 42% 41% 42% 41% 37% 48.
Slide 19: 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 11.2% AUM since the end of 2014: +168.4% 135.3 136.3 +8.9% 122.6 8.8 7.3 37% 10.7 10.3 107.9 106.6 37% 9.3 2.7 2.3 3
Slide 20: 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 21: 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 22: Agenda
Agenda ❑ Fineco overview ❑ Fineco 9M24 results ✓Solvency, liquidity, MREL and risks ❑ Next steps ❑ Annex 22
Slide 23: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements Current Sept.23 Jun.24 Sept.24 (€/bn) Sept.23 Jun.24 Sept.24 Requirements CET1 Ratio 24.73% 25.78% 27.29% 8.27% CET1 Capital 1.11 1.23 1.28 SOLVENCY Total Capital Ratio 35.90% 36.24% 37.96% 12.64% Tier1 Capital 1.61 1.73 1.78 Levera
Slide 24: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 897% 369% 128% 163% FBK avg EBA FBK avg EBA Fineco as of Sept.24; avg EBA as of Jun.24 Fineco as of Sept.24; avg EBA as of Jun.24 HQLA/Deposits 75% FBK HQLA: €20.8 bn as of Sept. 24 Average 38% (12 months avg) 62% 55% 52% 44% 43% 42% 37% 4
Slide 25: Solid risk management framework, embedded in Fineco's DNA
Solid risk management framework, embedded in Fineco's DNA Sustainability and prudent risk-taking remain at the heart of Fineco's model. The institution’s strategic approach is oriented towards a robust business model characterized by a low-risk appetite to create sustainable profits and returns on t
Slide 26: Funding
Funding Senior Preferred instrument AT1 instruments ➢ €300 mln Senior Preferred (6NC5) issued on February 16th, 2023 in order to ➢ €500 mln perpetual AT1 issued on March 11th, 2024 in order to maintain the have an additional buffer above the Fully Loaded MREL Requirement on LRE. Leverage Ratio above
Slide 27: AT1 Coupon payments underpin by solid profitability
AT1 Coupon payments underpin by solid profitability New dimension of growth reinforcing our solid profitability € mln ➢ Discretionary coupon payments on AT1 capital are subject to sufficient 2023 distributable items 609.1 ➢ As of 31st December 2023, Fineco distributable reserves (ADI) amounted to €7
Slide 28: Excellent capitalization
Excellent capitalization Strong capital ratios, leading to a high distance to the loss absorption trigger and to CET1 Capital Requirements Distance from CET1 to AT1 trigger Distance to Capital Requirements (1) % Distance to trigger AT1 trigger % 38.0 38.0 27.3 27.29 24.34 1,187 mln 25.3 20.82 1,304
Slide 29: Rating
Rating BBB rating by S&P with Neutral outlook S&P Outlook Neutral Long-term Issuer Rating BBB Long-term Bank Local Issuer Rating BBB Short-term Foreign Issuer Rating A-2 Short-term Local Issuer Credit A-2 S&P Global Ratings, 24 June 2024 29
Slide 30: Agenda
Agenda ❑ Fineco overview ❑ Fineco 9M24 results ❑ Solvency, liquidity, MREL and risks ✓Next steps ❑ Annex 30
Slide 31: 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% in FY24 vs FY23, not including ➢ REVENUES expected in FY24 at a reco
Slide 32: 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 33: Annex
Annex 33
Slide 34: P&L condensed
P&L condensed P&L condensed(1) mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 9M23 9M24 Net financial income 157.4 170.8 180.2 179.5 688.0 180.8 182.5 177.6 508.5 540.8 o/w Net Interest Income 157.4 170.8 180.0 179.5 687.7 179.0 182.5 178.5 508.2 540.0 o/w Profit from treasury management 0.0 0.1 0.1 0.
Slide 35: 9M24 P&L FinecoBank and Fineco Asset Management
9M24 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net financial income 1.1 539.8 540.8 Dividends 0.0 32.6 0.0 Net commissions 123.7 263.5 387.2 Trading profit 0.1 56.0 56.1 Other expenses/income -0.9 1.1 0.0 Total revenues 123.9
Slide 36: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 9M23 9M24 Margins Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 108.1 27,846
Slide 37: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 9M23 9M24 Banking 14.6 15.6 12.0 13.2 55.3 12.0 12.0 13.5 42.1 37.5 Brokerage 31.3 24.2 23.5 27.0 105.9 33.0 28.9 24.7 79.0 86.5 o/w Equity 22.8 16.1 17.6 17.3 73.8 23.2 20.8 18.5 56.5 62.5 Bond 3.
Slide 38: Revenues breakdown by Product Area
Revenues breakdown by Product Area mln 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 9M23 9M24 Net financial income 153.8 166.1 174.6 173.3 667.8 171.5 172.2 167.6 494.5 511.3 o/w Net interest income 153.8 166.0 174.5 173.3 667.6 169.8 172.2 168.6 494.3 510.5 o/w Profit from Treasury Management 0.0 0.1 0.
Slide 39: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 Jun.24 Sep.24 AUM 54,132 55,803 55,400 58,016 60,425 61,645 63,808 Funds and Sicav 35,962 37,373 36,807 38,839 40,708 41,557 43,557 Insurance 15,052 14,708 14,359 13,760 13,579 13,242 12,982 AUC under advisory 2,787 3,377 3,893
Slide 40: 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 67% and hold 91% of TFA +14.2% +15.8% +41 +2.1% 101.3bn 117.3bn 2,968 3,007 3,009 100 100 38.2 39.0 > €35mln 34.1 +13.7% €25-35mln 34% 41% y/y 67% 21.1
Slide 41: Balance Sheet
Balance Sheet mln Mar.23 Jun.23 Sep.23 Dec.23 Mar.24 Jun.24 Sep.24 (1) Due from Banks 1,860 1,934 2,224 2,643 3,808 3,222 3,293 Customer Loans 6,312 6,184 6,058 6,199 6,098 6,116 6,051 Financial Assets 24,366 22,630 21,648 21,417 20,426 20,750 21,532 Tangible and Intangible Assets 268 269 266 271 26
Slide 42: Leverage Ratio comfortably under control
Leverage Ratio comfortably under control Leverage Ratio Sensitivity: multi-year view Delta Retained earnings = Tier 1 Capital (mln) 0 150 300 400 450 500 550 600 650 -2,000 5.72% 6.16% 6.46% 6.61% 6.75% 6.90% 7.05% 7.19% OUR PRIORITIES -1,500 5.63% 6.07% 6.36% 6.50% 6.65% 6.79% 6.94% 7.08% Thanks to
Slide 43: 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 44: 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 Widiba (Conto Start) 0 Webank 20 33 Ing (Conto Arancio Più) 24 Fineco 40 Illimity (Conto Illimity Classic) 46 HelloBank! (Hello! Money) 60 Banca Sella (Conto Start) 62 161 I
Slide 45: 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 46: Our ESG ratings and Indices
Our ESG ratings and Indices RATING AGENCY EVALUATION SCALE AS TODAY ESG INDICES (0-100) 68 S&P Global ESG Score Data Availability: Very High Fineco included in: (100-0) 12.1 Among the best international banks with low ESG risk (0-100) 82(1) Among the best banking services companies (CCC-AAA) AA Lead
Slide 47: 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 48: 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 49: 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,
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