Banca Generali S.p.a. · MIL:BGN
Banca Generali — FY2017 Earnings Presentation
38 slides from Banca Generali's earnings presentation, Mar 1, 2018
Slide 1: FY 2017 Results
FY 2017 RESULTS 1 MARZO 2018 Y= BANCA dios. GENERALI
Slide 2: Agenda
AGENDA Preliminary remarks FY 2017 results Net Inflows, assets and recruiting Business update 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY Net inflows and total clients’ assets at highest level ever TOTAL NET Net inflows at €6.9bn (+21%), with managed solutions at €5.8bn (+129%) INFLOWS Total assets at €55.7bn (+17%) driven by managed solutions at €28.0bn (+30%) €6.9bn Total professionals at 1,936 (+5%) with an
Slide 4: FY2017 Results at a Glance
FY2017 RESULTS AT A GLANCE P&L AS IS * SOLID TOTAL BANKING INCOME (€ m) 12M 16 12M 17 % Chg Net Interest Income 58.7 61.4 4.7% (+22%) Net income (loss) from trading activities and Dividends 34.7 18.1 -47.9% Net Financial Income 93.4 79.5 -14.9% Solid business trend coupled with favorable variable Gr
Slide 5: Reclassification of Fee Expenses (1/3)
RECLASSIFICATION OF FEE EXPENSES (1/3) RATIONALE: IMPROVING UNDERSTANDING OF COST BREAKDOWN Highlighting different nature of 1. Fee expenses to FAs FEE EXPENSES 2. Fee expenses to THIRD-PARTIES 1. TOTAL ORDINARY fee expenses Highlighting different nature of FA COSTS 2. COST OF GROWTH (organic + recr
Slide 6: New Reclassification (2/3)
NEW RECLASSIFICATION (2/3) RECONCILIATION WITH PREVIOUS BOOKING * (€ m) 12M 16 12M 16 12M 17 12M 17 OLD NEW delta OLD NEW delta Net Interest Income 58.7 58.7 61.4 61.4 Net Trading income 34.7 34.7 18.1 18.1 Net Financial Income 93.4 93.4 79.5 79.5 Gross Fees 604.7 604.7 760.5 760.5 Total fee expense
Slide 7: New Reclassification (3/3)
NEW RECLASSIFICATION (3/3) FOCUS ON FEE EXPENSES €m 2016 2017 YoY A Total Fee expenses OLD -295.7 -348.7 18% B + Reclassification of provisions -23.6 -41.2 74% C= A+B TOTAL FEE EXPENSES NEW -319.3 -390.0 22% C.1 o/w TOTAL fee expenses to FAs -285.4 -347.2 22% Fee expenses to FAs - ordinary -194.5 -2
Slide 8: Pay-out to FAs
PAY-OUT TO FAS LOWER ORDINARY COMPONENT, HIGHER COST OF GROWTH PAY-OUT TO FAs PAY-OUT TO FAs ORDINARY VS. EXTRAORDINARY +0.7 p.p. COMPONENT 53.1% 53.8% €m 2016 2017 delta +1.9 p.p. 16.9% 18.8% Total fee expenses to FAs 285.4 347.2 61.8 -1.2 p.p. 31.3 36.2% 35.0% o/w Fee expenses - ordinary 194.5 225
Slide 9: Agenda
AGENDA Preliminary remarks FY 2017 results Net Inflows, assets and recruiting Business update 9
Slide 10: Revenues: Net Financial Income (1/2)
REVENUES: NET FINANCIAL INCOME (1/2) GROWING BANKING ASSETS NET INTEREST INCOME + TRADING INCOME 93.4 79.5 TREND IN LINE WITH PREVIOUS 34.7 18.1 QUARTERS (m/€) Net Interest Income + 5% yoy 58.7 61.4 Proprietary trading -48% yoy 2016 2017 NII Trading income GROWING BANKING ASSETS INTEREST-BEARING ASS
Slide 11: Revenues: Net Financial Income (2/2)
REVENUES: NET FINANCIAL INCOME (2/2) NII QUARTERLY TREND 15.5 DE-RISK STRATEGY WEIGHED 14.4 14.3 ON 4Q17 NII Temporary increase of the cash position by ECB at year-end to reduce (m/€) risk exposure ahead of general 4Q16 3Q17 4Q17 election CONSERVATIVE BANKING DURATION MATURITY SECURITIES < 1YR BOOK
Slide 12: Revenues: Net Fee Income
REVENUES: NET FEE INCOME FEE BREAKDOWN 492.3 587.1 +71% GROSS +29% FEE INCOME +19% 45.3 58.3 67.1 115.1 760.5 Management fees Entry & banking fees Performance fees -33.9 -42.7 -90.9 -121.4 FEE EXPENSES -194.5 -225.8 +26% +34% 390.0 +16% Fee expenses to FAs - Fee expenses to FAs - Fee expenses to Thi
Slide 13: Revenues: Management Fees & Margin
REVENUES: MANAGEMENT FEES & MARGIN QUARTERLY TREND MANAGEMENT (M/€) 116.7 135.3 144.7 150.6 156.5 FEES 107.6 116.1 116.9 118.6 120.4 125.2 130.0 97.4 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 TOTAL AVG. MANAGED 54.8 (BN/€) 43.2 44.8 46.2 49.0 51.2 52.9 35.1 38.3 39.8 39.8 40.8
Slide 14: Revenues: Other Fees
REVENUES: OTHER FEES QUARTERLY TREND FRONT 9.5 10.5 10.3 7.6 (M/€) FEES 3.6 3.9 4.4 3.6 4.6 5.5 4.7 3.7 5.8 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 BANKING 11.6 (M/€) 9.8 9.5 9.2 9.9 FEES 8.5 6.8 7.5 6.2 7.1 6.1 8.8 8.2 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Slide 15: Breakdown of Annualised Fee-Margin
BREAKDOWN OF ANNUALISED FEE-MARGIN GROSS MARGINS MANAGEMENT FEES ENTRY FEES 1.16 1.11 1.12 1.13 1.07 0.11 0.11 0.11 1.01 0.08 0.04 0.04 (%) (%) 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 BANKING FEES AND TRADING PERFORMANCE FEES 0.32 0.11 0.12 0.10 0.22 0.08 0.20 0.18 0.07 0.07 0.16
Slide 16: Operating Costs Breakdown
OPERATING COSTS BREAKDOWN COSTS TREND WELL BELOW REVENUE GROWTH 87.4 90.3 66.2 68.0 +3% (M/€) +18% +3% -43% +37% 14.3 16.8 8.2 4.7 5.9 8.1 Non-sales personnel Sales personnel costs BRRD & FITD funds Depreciation General expenses (net costs of stamp duties) 2016 2017 TOTAL OPERATING COSTS +3.2% VS. G
Slide 17: Cost Ratios
COST RATIOS OPERATING LEVERAGE OPERATING COSTS/TOTAL ASSETS COST-INCOME RATIO 59.0% 0.54% 0.51% 53.4% 53.9% 52.6% 52.3% 51.1% 0.45% 0.42% 46.5% 0.38% 42.5% 40.3% 41.0% 0.34% 39.9% 38.1% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Reported Cost/Income Adjusted Cost/Income* Cost/Income
Slide 18: Dividend Proposal to AGM
DIVIDEND PROPOSAL TO AGM DIVIDEND PER SHARE (DPS) DIVIDEND PAY-OUT Pay-out range 79.0% 78.0% 80.0% 1.25 80% 1.20 1.07 0.95 0.98 70.0% 68.0% 71.0% 0.90 70% (€) 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 (1) AGM scheduled for 11 April 2018 DIVIDEND YIELD 7.0% 4.2% 4.3% 4.1% 3.9% 4.6%
Slide 19: Solid Capital Position
SOLID CAPITAL POSITION CAPITAL RATIOS FURTHER IMPROVING CET1 RATIO TOTAL CAPITAL RATIO 18.5% 1.8% 20.2% 1.8% 18.4% 16.7% 7.0% 10.4% 2016 2017 2017 SREP 2016 2017 2017 SREP requirements requirements EXCESS CAPITAL LEVERAGE RATIO 52 314 0.3% 5.3% 262 5.0% (m/€) 2016 2017 2016 2017 SREP requirements: M
Slide 20: Agenda
AGENDA Preliminary remarks FY 2017 results Net Inflows, assets and recruiting Business update 20
Slide 21: Record High Business Expansion (1/4)
RECORD HIGH BUSINESS EXPANSION (1/4) ASSET GROWTH DRIVEN BY MANAGED SOLUTIONS TOTAL ASSETS BY PRODUCT 55.7 YoY +17% 47.5 41.6 28.0 36.6 +30% 21.5 (50%) 29.1 18.9 (45%) 26.2 16.0 (45%) 11.6 (44%) 9.9 14.9 (40%) 14.5 +3% (38%) 12.9 (27%) 11.5 (31%) 8.5 9.7 (31%) (31%) (32%) (33%) 9.1 9.8 11.5 12.8 +11
Slide 22: Record High Business Expansion (2/4)
RECORD HIGH BUSINESS EXPANSION (2/4) MANAGED SOLUTIONS AT 50% OF TOTAL BREAKDOWN OF MANAGED SOLUTIONS 28.0 YoY +30% 21.5 5.5 -4% 19.2 15.9 5.7 8.1 +47% 6.3 9.9 11.6 5.4 5.5 4.9 7.1 +51% 4.2 5.0 4.5 4.7 (BN/€) 3.4 3.7 2.6 3.8 7.3 +30% 3.1 3.2 4.3 5.6 2.2 2012 2013 2014 2015 2016 2017 Insurance wrappe
Slide 23: Record High Business Expansion (3/4)
RECORD HIGH BUSINESS EXPANSION (3/4) 2017 NET INFLOWS AT 14% OF STARTING ASSETS Total Net Inflows 6.9 5.7 4.6 4.0 2.3 1.6 (bn/€) 2012 2013 2014 2015 2016 2017 % of STARTING 6.9% 8.6% 13.8% 12.7% 13.6% 14.4% ASSETS Banca Generali’s share of Assoreti net inflows 19.7% 21.1% 14.6% 15.5% 13.4% 13.6% 201
Slide 24: Record High Business Expansion (4/4)
RECORD HIGH BUSINESS EXPANSION (4/4) MANAGED SOLUTIONS MORE THAN DOUBLED YOY TOTAL NET INFLOWS NET INFLOWS IN MANAGED SOLUTIONS 6.9 5.8 5.7 2.5 2.5 5.8 2.5 0.5 2.3 1.5 1.0 (bn/€) (bn/€) 0.2 1.3 1.5 1.7 0.9 -0.5 -0.3 2016 2017 2016 2017 Banking products Traditional life policies Managed solutions Ins
Slide 25: BG Fund Management
BG FUND MANAGEMENT GROWTH DRIVEN BY THE INSTITUTIONAL COMPONENT LUX-BASED ASSETS SHARE OF INSTITUTIONAL FUND CLASSES 15.0 58% 11.8 12.5 51% 45% 8.8 36% 11.1 9.9 BG 22% 9.3 SELECTION 18% 7.3 (BN/€) 3.7 BG SICAV 1.5 2.5 2.6 0.2 BG ALTERNATIVE 2012 2013 2014 2015 2016 2017 2014 2015 2016 2017 Instituti
Slide 26: BG Advisory Contract
BG ADVISORY CONTRACT A STRONG START WEALTH MANAGEMENT APPROACH TAKES GROUND ASSETS UNDER ADVISORY 1.3 0.7 6% 0.2 €m 1H17 9M17 FY 2017 94% 24% of the FA network already proactive on offering advisory contracts Assets under advisory almost entirely as fee-on-top model Already 2,300 contracts wit
Slide 27: Advisory Network
ADVISORY NETWORK STEADY QUALITY GROWTH €m TOTAL No. OF FAS ASSETS/FA 28.8 1.841 1.936 25.8 1.715 24.3 1.645 22.2 1.453 1.475 19.7 18.0 +33% +60% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 27 No. OF NEW RECRUITS No. OF NEW RECRUITS BY QUARTER 161 153 59 126 49 102 42 81 122 94 34 36
Slide 28: Brand Preference (1/2)
BRAND PREFERENCE (1/2) FA AND PB NETWORKS Brand Equity synthetic index company PB Monitor 2017 - Eurisko 28
Slide 29: Brand Preference (2/2)
BRAND PREFERENCE (2/2) CLIENTS AND BUSINESS COMMUNITY Best FA network Best private bank in Italy Istituto Tedesco di Qualità e Finanza Financial Times Best FA network for the Best Private Bank in Italy for third year in a row the second year in a row 29
Slide 30: Agenda
AGENDA Preliminary remarks FY 2017 results Net Inflows, assets and recruiting Business update 30
Slide 31: Business Update
BUSINESS UPDATE 2018 KEY BUSINESS INITIATIVES Quality of FA network Wealth Management Approach Digital Mindset 31
Slide 32: Quality of the FA Network
QUALITY OF THE FA NETWORK 2018 KEY PROJECTS 2018 2019 Key business initiatives 1Q 2Q 3Q 4Q Reorganisation of the network to further FA Network enhance private and WM market reorganisation positioning and to provide bespoke support to each FA’s clusters Focus on on a well-balance growth with a Organi
Slide 33: Wealth Management Approach
WEALTH MANAGEMENT APPROACH 2018 KEY PROJECTS 2018 PIPELINE 2019 Key business initiatives 1Q 2Q 3Q 4Q Ongoing expansion of BG Advisory Advisory contract based on the strong start in 2017. Target €5bn by 2021 (€1.5bn YTD) Increased penetration of certificates Private Certificates for private clients t
Slide 34: New Lux-Based SICAV
NEW LUX-BASED SICAV PRODUCT INNOVATION Wave 1 Wave 2 Wave 3 1 Apr By 3Q 2018 By 2018 YE NEW INVESTMENT STRATEGIES 20 10 10 BG Sicav Run-off Transformation BG SELECTION 41 47 55/57 • 40 new innovative investment strategies plus 20 successful strategies of the current offer • 4 families of product: Lo
Slide 35: Digital Mindset
DIGITAL MINDSET 2018 KEY PROJECTS 2018 2019 Key business initiatives 1Q 2Q 3Q 4Q New plartform to be combined with BGPA Robo-4-Advisors and support FA daily activity and advisory services on an ongoing basis Expanding offer of Lombard lending Lending platform services through the brand new digital p
Slide 36: Closing Remarks: 2018 Key Business Objectives
CLOSING REMARKS 2018 KEY BUSINESS OBJECTIVES JANUARY 2018 NET INFLOWS > €4.0 BN (o/w > 50% from existing network) €465m WRAPPERS & NEW > €2.0 BN €301m SICAV (LUX IM) ASSETS under ADVISORY >€1.0 BN additional assets u. advisory €120m RECRUITING 120-140 professionals 20 36
Slide 37: 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 38: Contacts
CONTACTS Investor Relations Investor App Giuliana Pagliari Investor Relations Manager Phone +39 02 6076 5548 Mobile +39 331 65 30 620 E-mail: giuliana.pagliari@bancagenerali.it E-mail: investor.relations@bancagenerali.it Corporate Website www.bancagenerali.com 38