Slide 1: Fineco: 1Q17 Results
Fineco: 1Q17 Results Madrid, 8th-9th June 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,
Slide 3: Executive Summary
Executive Summary 1Q17 net profit at 51.7mln (+8.0% y/y net of profits from Govies sale in 1Q16, -6.1% q/q(1)) Growing revenues (+5% y/y net of profits from Govies sale in 1Q16, +2.5% q/q) boosted by Investing area (+16.5% y/y with management fees up +13.4% y/y) and Banking area (+5.0% y/y thank
Slide 4: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 4
Slide 5: Results
Results Increasing Net Profit (+8.0% y/y net of profits from Govies sale in 1Q16) boosted by strong revenue growth and operating costs substantially flat Net Profit, mln Revenues, mln excluding non recurring items(1) +1.2% +5.0% y/y net of Govies +2.5% sale(2) +0.9% 140.1 138.4 141.8 +8.0% y/y net o
Slide 6: Revenues by P&L Items
Revenues by P&L Items Well diversified stream of revenues able to deliver sustainable growth in any market condition. Management fees up +13.4% y/y, strong brokerage despite lowest volatility Net interest, mln Fees and Commissions, mln 1M Eur -0.26% -0.37% -0.37% Brokerage +1.1% Investing +11.2% Ban
Slide 7: Net interest
Net interest Sustainable net interest income dynamics despite lower y/y rates supported by double digit growth in volumes, both sticky sight deposits and high quality lending Sight Deposits (mln) and net margins (bps) Lending(1) (mln) and net margins (bps) +18.7% +55.5% +5.8% +9.9% 15,328 16,105 16,
Slide 8: Net interest: focus on UniCredit bonds portfolio
Net interest: focus on UniCredit bonds portfolio Sustainability analysis: sight deposits growth to offset lower rates and bond portfolio run off UC Bonds run-offs (mln) and spread (bps) 7Y Spread UniCredit vs Govies, bps 1,727 1,577 1,344 2017 2018 2019 Average spread 178 202 202 235 Minimum sight d
Slide 9: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA. Quarterly comparison affected by seasonality (mainly PFAs related costs) Staff expenses, mln and FTE, # Stock granting post IPO 1,021 1,052 1,044 Staff expenses, related to top managers and key employees Other administrative expenses
Slide 10: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet RWA, mln CET1 Ratio transitional, % Credit Market Operational +0.9p.p. -0.7p.p. +5.3% +2.5% 22.68% 23.14% 22.94% 22.24% 21.31% 1,910 1,958 1,859 1,826 1,799 Mar.16 Jun.16 Sept.16 Dec.16 Mar.17 1,071 1,136 1,186 1,090 1,075 CET1
Slide 11: TFA
TFA Relentless TFA growth thanks to a healthy expansion in net sales Guided products and services increased at 59% of total AuM TFA evolution (Dec.11-Mar.17), bn Cumulated performance, bn 1.4 62.2 60.2 0.6 Net Sales +20.7 bn -0.2 Market Effect +6.5 bn 55.3 5.0 0.5 49.3 5.5 1.7 43.6 4.0 1.3 39.8 2.5
Slide 12: TFA and Net sales - breakdown
TFA and Net sales - breakdown Strong improvement in asset mix with 1.2bn AuM net sales reached in four months. Successful shift towards high added value products resulting in 1.4bn, +72% y/y Breakdown of total net sales, bn Breakdown of total TFA, bn 5.5 Guided products as % of AuM 62.2 63.0 5.0 60.
Slide 13: Personal Financial Advisors (PFA) network
Personal Financial Advisors (PFA) network Net sales / Organic growth 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 Organic Recruit past years New recruit of the year
Slide 14: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 14
Slide 15: 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% +5.0% -1.3% 61.0 64.9 64.0 1Q16 4Q16 1Q17 Brokerage, mln 24% Investing, mln 31% Core revenues (NI excluded) +16.5% -5.5% +6.8% -1.0% 36.6 34.6 32.5 44.1 43.7 37
Slide 16: Banking
Banking Sound performance driven by strong volume growth and customer acquisition thanks to high quality services and customer satisfaction Revenues, mln Direct deposits eop, mln Net interest Sight Deposits Term Deposits Fees and commissions Trading income +12.3% Other +0.3% +5.0% 16,527 18,509 18,5
Slide 17: Brokerage
Brokerage Outstanding brokerage results despite the lowest volatility since 2013 confirming the strong potential of this business Revenues, mln Revenues vs volatility(1) Net interest Net Commissions Trading profit Core revenues (NI excluded) -5.5% +6.8% 36.6 34.6 32.5 3.0 2.8 2.8 20.3 20.3 19.5 13.3
Slide 18: Investing
Investing Successful strategy on cyborg advisory approach drove a better asset mix and increasing fees Revenues (Net Fees), mln AuM eop, bn Upfront fees Management fees Others(1) +16.3% +16.5% +4.0% 27.5 28.6 29.7 -1.0% 25.6 25.9 43.7 44.1 3.1 37.5 2.9 1.8 Management Mar.16 Jun.16 Sept.16 Dec.16 Mar
Slide 19: Agenda
Agenda Fineco Results Focus on product areas Key messages and Initiatives monitoring 19
Slide 20: 1Q17 key messages
1Q17 key messages Healthy growth and sustainability at the heart of Fineco’s business model Cost of funding close to zero Clients’ acquisition leveraging on high quality services Organic growth as main engine of growth Selected recruits to improve the quality and related costs well under con
Slide 21: Initiatives monitoring
Initiatives monitoring Strong commitment in preparing the Bank for a big step forward in our sustainable process of growth Implementation Mortgages 1 BANKING AREA Personal loans Rolling Lombard Increase productivity 2 INVESTING AREA Private Banking Fineco Asset Management 3 EXPANSION UK project ABRO
Slide 22: Banking Area: Revamp lending offer
Banking Area 1 Revamp lending offer Mortgages Personal loans Eop, mln Eop, mln Start date: end of Nov 2016 Interest income (mln) +67.3% Very much appreciated by +75.0% clients, strong demand for +14.8% 121.4 mortgages raises guidance on yearly new production: 72.6 ~700mln 246 282 161 183 205 E
Slide 23: Investing Area (1/2)
Investing Area (1/2) 2 Increase network’s productivity and Fineco Asset Management Guided Products Average PFAs’ portfolio Net Sales Mix Eop, bn Eop, mln AUM AuC+ Deposits +13.6% +3.1% +44.6% +8.3% 17.8 17.9 18.8 19.6 20.2 47% 52% 61% 14.9 16.1 17.5 17.9 104% 12.1 13.3 53% 39% 48% -4% 1Q16 2Q16 3Q16
Slide 24: Investing Area (2/2): Private Banking
Investing Area (2/2) 2 Private Banking Total Financial Assets Eop, bn Private Banking area is experiencing a huge TFA Private Banking / TFA growth both in terms of assets and clients. Through Private Banking we want to create a deeper relationship with the client, combining advanced +18.7% technol
Slide 25: Expansion abroad: UK project
Expansion abroad 3 UK project Start date: May 2017 https://finecobank.co.uk/uk/joinus/ Attractive and innovative value proposition based on one-stop solution approach Light cost approach, very low Capex leveraging on existing platform post "Brexit": Brexit will not affect the current operati
Slide 26: Annex
Annex 26
Slide 27: P&L
P&L mln 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 Net interest income 62.2 61.2 62.5 63.4 249.4 62.9 Net commissions 58.2 59.7 59.3 65.8 242.9 64.7 Trading profit 19.6 27.3 10.8 11.3 69.1 13.7 Other expenses/income 0.1 0.7 -0.8 -2.2 -2.2 0.5 Total revenues 140.1 148.8 131.8 138.4 559.1 141.8 Staff expenses -18.
Slide 28: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 Margins Margins Margins Margins Margins Margins Sight Deposits 55.4 15,328 54.2 16,105 54.6 16,663 55.7 17,193 219.9 16,322 55.4 18,193 Net Margin 1.45% 1.35% 1.30% 1.29% 1.35
Slide 29: 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 IT0005010241 Euro 382.5 28-Apr-17 Euribor 1m 1.87% 3 IT0005010258 Euro 382.5 27-Jul-17 Euri
Slide 30: Details on Net Commissions
Details on Net Commissions mln 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 Brokerage 20.3 18.5 16.6 19.5 74.9 20.3 o/w Equity 16.5 15.2 12.9 16.0 60.6 16.7 Bond 1.1 1.1 0.9 1.2 4.4 1.0 Derivatives 3.2 2.6 2.4 2.4 10.6 2.4 (1) Other commissions -0.5 -0.5 0.4 -0.1 -0.7 0.1 Investing 37.5 40.2 41.0 44.1 162.7 43.7 o
Slide 31: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 Net interest income 59.7 58.9 59.9 61.3 239.8 61.9 Net commissions 0.3 0.8 1.6 2.0 4.7 0.6 Trading profit 0.9 1.1 0.9 1.5 4.4 1.3 Other 0.0 0.1 0.1 0.1 0.2 0.1 Total Banking 61.0 60.8 62.5 64.9 249.1 64.0 Net interest income 0.0 0.0
Slide 32: Breakdown TFA
Breakdown TFA mln March 16 June 16 Sept 16 Dec. 16 March 17 AUM 25,565 25,911 27,522 28,608 29,742 o/w Funds and Sicav 22,332 22,395 23,645 24,258 24,984 o/w Insurance 3,219 3,505 3,865 4,339 4,749 o/w GPM 14 12 12 11 9 AUC 12,889 12,688 13,051 13,078 13,895 o/w Equity 6,718 6,526 6,877 7,135 7,969
Slide 33: Balance Sheet
Balance Sheet mln March 16 June 16 Sept 16 Dec. 16 March 17 Due from Banks 15,404 15,299 14,442 15,736 15,462 Customer Loans 827 880 972 1,017 1,166 Financial Assets 2,629 2,933 3,592 3,764 3,912 Tangible and Intangible Assets 111 111 112 112 112 Derivatives 7 9 8 9 12 Other Assets 286 328 327 349 2
Slide 34: Main Financial Ratios
Main Financial Ratios March 16 June 16 Sept 16 Dec. 16 March 17 PFA TFA/ PFA (mln) (1) 17.8 17.9 18.8 19.6 20.2 Guided Products / TFA (2) 22% 24% 26% 27% 28% Cost / income Ratio (3) 43.0% 43.0% 42.2% 41.6% 42.8% CET 1 Ratio 21.3% 22.7% 23.1% 22.9% 22.2% Adjusted RoE (4) 43.4% 42.1% 40.0% 40.8% 39.5%