Slide 1: Fineco: 4Q16 Results
Fineco: 4Q16 Results Alessandro Foti, CEO and General Manager Milan, February 7th 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 2016 net profit at 211.8mln (+10.9% y/y), 200.7mln (+3.7% y/y) excluding non-recurring items(1) despite -10.6mln gross related to Deposit Guarantee Scheme (-4.7mln DGS in 2015). On a comparable basis, 2016 net profit at 207.8mln (+5.7% y/y), confirming the effectiveness of a uniq
Slide 4: Agenda
Agenda Fineco Results Focus on product areas Key messages and further opportunities 4
Slide 5: Results 2016
Results 2016 Net Profit adjusted(1) grew +3.7% y/y despite increased systemic charges, +5.7% y/y net of Deposit Guarantee Scheme. Cost/Income adjusted(1) down 1p.p. at 42% Net Profit, mln Net Profit adj.(1) net DGS, mln excluding non recurring items(1) +5.7% +3.7% 211.8 207.8 191.1 196.6 +17.2% +23.
Slide 6: Revenues by P&L Items
Revenues by P&L Items Resilient y/y revenue generation, despite the complex environment, mainly supported by net interest and investing fees (up to 162.7mln in 2016, +3.9% y/y) Net interest, mln Fees and Commissions, mln +3.6% -3.9% +2.0% Brokerage Investing 252.6 +1.4% 240.8 249.4 242.9 Banking 62.
Slide 7: Net interest
Net interest Sustainable and high quality volume dynamics more than offset lower margins y/y and declining interest rates. Resilient margins in 4Q compared to 3Q Sight Deposits (mln) and net margins (bps) Term Deposits (mln) and net margins (bps) +18.3% -57.8% +3.2% -31.3% 673 628 15,328 16,105 16,6
Slide 8: Net interest: focus on UniCredit bonds portfolio
Net interest: focus on UniCredit bonds portfolio Sustainability analysis: 2.3% sight deposits growth to offset lower rates and bond portfolio run off UC Bonds run-offs (mln) and spread (bps) 1,727 1,577 Stress test assumptions 1,345 Forward Euribor curve (-0.33% in 2017, -0.19% in 2018, +0.02% in
Slide 9: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA. Development costs down y/y mainly due to lower marketing and PFAs related costs Staff expenses, mln and FTE, # Stock granting post IPO 1019 1033 1052 Staff expenses, related to top managers and key employees -1.8% Other administrativ
Slide 10: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet and 28 cents dividend distribution (+9.8% y/y) RWA, mln CET1 Ratio transitional, % Credit Market Operational +1.6p.p. -0.2p.p. +4.5% 22.68% 23.14% 22.94% 21.39% 21.31% +6.2% 1,859 1,910 1,828 1,826 1,799 Dec.15 Mar.16 Jun.16 Se
Slide 11: 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 Net Sales +22.1 bn Market Effect +2.9 bn 60.2 -0.2 55.3 5.0 0.5 49.3 5.5 43.6 4.0 1.7 2.5 2.8 2.5 39.8 1.3 35.2
Slide 12: TFA and Net sales - breakdown
TFA and Net sales - breakdown Successful shift towards high added value products reaching record high 3.9bn net sales in Guided products (+14% y/y) Breakdown of total net sales, bn Breakdown of total TFA, bn Guided Guided products as % of AuM 3.9bn 60.2 60.2 5.5 57.6 55.3 55.6 5.0 49.3 2.7 1.8 48% 4
Slide 13: 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 4.9 3.9bn Net Sales (New Recruit
Slide 14: Agenda
Agenda Fineco Results Focus on product areas Key messages and further opportunities 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 46% +3.9% +3.7% 239.7 249.1 +3.9% 62.6 62.5 64.9 4Q15 3Q16 4Q16 2015 2016 Brokerage, mln 24% Investing, mln 30% Core revenues (NI excluded) +3.9% +7.7% 162.7 -10.1%
Slide 16: Banking
Banking Outstanding y/y results driven by strong volume growth and new clients. 2016 fees affected by new regulation on interchange fees(1) Revenues, mln Direct deposits eop (mln) Net interest +3.9% Sight Deposits Term Deposits Fees and commissions Trading income 249.1 +18.4% Other 239.7 18,509 15,6
Slide 17: Brokerage
Brokerage Executed orders in line with 2015 record levels confirming an unmatched leading position in this segment. 4Q revamped on the wave of rebound in volatility Revenues, mln Volatility Index - Ftse Mib Net interest Net fees Trading profit Core revenues (NI excluded) -10.1% 149.7 17.5 130.1 11.2
Slide 18: Investing
Investing Investing fees up mainly thanks to a successful strategy on cyborg advisory approach Revenues (Net Commissions), mln AuM eop (bn) Upfront fees Management fees Others +8.9% +3.9% +3.9% 26.3 25.6 25.9 27.5 28.6 156.5 162.7 9.7 9.9 Dec.15 Mar.16 Jun.16 Sept.16 Dec.16 +7.7% Guided products on
Slide 19: Agenda
Agenda Fineco Results Focus on product areas Key messages and further opportunities 19
Slide 20: 2016 key messages
2016 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 (89%(1) out of total inflows) Selected recruits to improve the quality an
Slide 21: Further opportunities: Banking Area
Further opportunities: BANKING AREA High quality deposits growth as main pillar in our banking business KEY STRENGTH 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 LE
Slide 22: Further opportunities: Banking Area – More focus on lending
Further opportunities: BANKING AREA More focus on lending MORTGAGES 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 c
Slide 23: Further opportunities: Investing Area
Further opportunities: INVESTING AREA Successful growing strategy based on sustainability and recurrent revenues KEY STRENGTH Organic inflows as main driver of growth and limited SUSTAINABILITY recruits to improve the quality of the network FURTHER OPPORTUNITIES Strategy of increasing PFAs produ
Slide 24: Further opportunities: Brokerage Area
Further opportunities: BROKERAGE AREA Continuous healthy client base enlargement and best-in-class offer lead to unrivalled leading position KEY STRENGTH COUNTERCYCLICAL Countercyclical contributor in revenue generation BUSINESS benefitting from spikes in markets’ volatility Daily trades in medium
Slide 25: Highly scalable operating platform
Highly scalable operating platform Platform excellence and cost discipline providing strong operating leverage Costs vs Growth 2013 2014 2015 2016 2013-2016 CAGR 60 +11% 55 49 TFA (€ bn) 44 1118 +8% 1048 964 Clients (thd) 898 559 +14% 544 451 Revenues (€ mn) 373 233 226 +6% Operating costs (€ mn) 21
Slide 26: Annex
Annex 26
Slide 27: P&L
P&L mln 1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 Net interest income 56.5 59.3 62.9 62.1 240.8 62.2 61.2 62.5 63.4 249.4 Net commissions 62.8 64.2 62.0 63.6 252.6 58.2 59.7 59.3 65.8 242.9 Trading profit 17.1 11.0 13.2 12.6 53.9 19.6 27.3 10.8 11.3 69.1 Other expenses/income 0.4 -3.4 1.6 -1
Slide 28: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 Margins Margins Margins Margins Margins Margins Margins Margins Margins Margins Sight Deposits 51.6 12,729 52.2 13,
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 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 FY15 FY16 Brokerage 25.0 20.8 20.3 19.2 20.3 18.5 16.6 19.5 85.3 74.9 o/w Equity 19.9 17.3 16.4 15.1 16.5 15.2 12.9 16.0 68.7 60.6 Bond 2.5 1.2 1.1 1.3 1.1 1.1 0.9 1.2 6.0 4.4 Derivatives 2.5 2.3 2.6 2.4 3.2 2.6 2.4 2.4 9.9 10.6
Slide 31: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 FY15 FY16 Net interest income 52.8 54.8 58.0 58.1 59.7 58.9 59.9 61.3 223.7 239.8 Net commissions 1.5 2.8 3.2 3.3 0.3 0.8 1.6 2.0 10.9 4.7 Trading profit 1.9 1.3 1.1 1.2 0.9 1.1 0.9 1.5 5.4 4.4 Other -0.1 -0.1 -0.1 -0.1 0.
Slide 32: Non operating items and Net Profit Adjusted
Non operating items and Net Profit Adjusted Non operating items, mln 332.7 -10.0 -4.2 -5.5 -6.7 -94.5 211.8 Releases of funds: - Tercas: +1.4mln - Solidarity: +2.3mln 2Q16 Tax release: DGS: -10.6mln +6.5mln Gross Provisions LLP Integration POI Taxes Net profit Operating costs FY16 Profit 2016 Net Pr
Slide 33: Breakdown TFA
Breakdown TFA mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 Dec. 16 AUM 26,121 26,169 24,825 26,277 25,565 25,911 27,522 28,608 o/w Funds and Sicav 23,313 23,221 21,949 23,100 22,332 22,395 23,645 24,258 o/w Insurance 2,793 2,933 2,862 3,163 3,219 3,505 3,865 4,339 o/w GPM 15 15 14
Slide 34: Balance Sheet
Balance Sheet mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 Dec. 16 Due from Banks 14,070 14,583 13,966 14,649 15,404 15,299 14,442 15,736 Customer Loans 797 836 885 923 827 880 972 1,017 Financial Assets 2,270 2,244 2,241 2,250 2,629 2,933 3,592 3,764 Tangible and Intangible Assets
Slide 35: Main Financial Ratios
Main Financial Ratios March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Sept 16 Dec. 16 PFA TFA/ PFA (mln) (1) 17.6 17.6 17.0 17.9 17.8 17.9 18.8 19.6 Guided Products / TFA (2) 19% 20% 20% 21% 22% 24% 26% 27% Cost / income Ratio (3) 43.8% 44.6% 42.6% 42.7% 43.0% 43.0% 42.2% 41.6% CET 1 Ratio 19.4%