Banca Generali S.p.a. · MIL:BGN
Banca Generali — Q1 2021 Earnings Presentation
37 slides from Banca Generali's earnings presentation, May 11, 2021
Slide 1: 1Q 2021 Results and Business Review
1Q 2021 RESULTS AND BUSINESS REVIEW 11 MAY 2021
Slide 2: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 1Q 2021 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix 2
Slide 3: 1Q 2021 Results: Executive Summary
1Q 2021 RESULTS: EXECUTIVE SUMMARY STRONG START TO THE FINAL YEAR OF THE 2019-21 BUSINESS PLAN Total Assets at €77.5bn (+19% YoY, +4% YTD) Improved Asset Mix driven by Managed Solutions (+30%) and Asset under Custody (+33%). Managed solutions reached 50.7% of total assets from 46.3% a year ago. St
Slide 4: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mil) 1Q 20 1Q 21 % Chg Booming revenues driven by asset growth and performance (+42%) Net Interest Income 20.2 21.7 7.4% Net Financial Income (+1.9%) slightly higher driven by Net Interest Net income (loss) from trading activities and Dividends 4.0 2.9
Slide 5: Net Profit Breakdown
NET PROFIT BREAKDOWN RECURRING NET PROFIT DRIVEN BY A SOLID OPERATING TREND Net profit breakdown1 m/€ Build-up of recurring net profit m/€ +10.2 (5.9) 135.4 0.7 37.2 (3.5) (6.6) (5.4) 13.0 79.1 98.2 32.9 0.7 46.2 Operating items Non-operating items 32.9 37.2 1Q20 1Q21 Variable net profit 1Q20 NII Ne
Slide 6: Agenda
AGENDA Preliminary remarks Our Vision: To Be the No.1 Private Bank 1Q 2021 Financial Results unique by Value of Service, Innovation Net Inflows, Assets and recruiting and Sustainability Business update and closing remarks Appendix 6
Slide 7: Net Financial Income
NET FINANCIAL INCOME INTEREST RATE HEADWINDS OFFSET BY HIGHER VOLUMES AND TLTRO Net Financial Income m/€ Total Assets and Interest-bearing Assets bn/€ Net Interest Income 14.0 (NII) posted a 7.4% 13.2 32.4 12.5 increase YoY, yet -3.6% 1.0 QoQ amid volumes/rate 2 1.0 24.2 9.9 24.7 1.0 2.3 trend Other
Slide 8: Gross Fees
GROSS FEES POSITIVELY GEARED TO MANAGED SOLUTIONS AND NEW REVENUE STREAMS Gross recurring fees m/€ Variable fees m/€ 221.2 111.0 207.1 195.5 33.7 28.5 Growing recurring fees 29.7 (+13% YoY, +7% YTD) driven by higher 86.2 volumes, better mix and 53.4 diversification (new LUX IM revenue streams) Other
Slide 9: Management Fees
MANAGEMENT FEES EXTENDING 2021 MARGIN GUIDANCE TO FULL PERIMETER IN LIGHT OF BUOYANT ASSET TREND Quarterly trend m/€ Management fees (+13% YoY, +5% 178.6 187.4 QoQ) benefitted from the higher 170.5 exposure to equity and in-house 165.8 160.6 products coupled with overall higher Management Fees margi
Slide 10: Banking and Entry Fees
BANKING AND ENTRY FEES BANKING FEES STRONGER, ENTRY FEES IN LINE WITH GUIDANCE Banking and Entry Fees m/€ Breakdown by Mix m/€ 33.7 Banking fees posted a 29.7 33.7 strong increase (+32% 28.5 YoY, +26% QoQ) driven by 9.2 29.7 28.5 Advanced Advisory and 11.2 9.2 Brokerage services 18.1 18.9 14.5 Front
Slide 11: New Revenue Streams
NEW REVENUE STREAMS SOLID DELIVERY IN LINE WITH GUIDANCE Assets under advisory (AuA) bn/€ ≥ 30 Advanced Advisory fees 6.0 6.5 (+30%): steady growth in fees ADVANCED ADVISORY 5.1 5.4 4.1 4.4 4.7 4.6 driven by volumes (6.5bn, 3.0 6.7 7.4 1.6 2.3 2.3 2.3 5.7 +40%) with growing share of clients and FAs
Slide 12: Fee Expenses
FEE EXPENSES PAY-OUT RATIO DECREASING ON LOWER COST OF GROWTH Total Fee Expenses m/€ Pay-out to the network % 47.5% 46.9% 117.0 Lower pay-out to the network benefitting from 104.4 13.2 36.5% 36.6% lower cost of growth 11.5 reflecting reduced 22.8 recruitment activity over 21.5 11.0% 10.3% past two y
Slide 13: Operating Costs (1/2)
OPERATING COSTS (1/2) ONGOING COST DISCIPLINE DESPITE BUSINESS EXPANSION Total operating costs1,2 m/€ Breakdown of core operating costs1,2 m/€ +3.6% 56.0 +4.6% Total and ‘Core’ operating 54.1 54.1 50.4 costs reclassified to incorporate 0.9 1.2 45.2 48.2 recent acquisitions line-by-line. 5.1 4.7 8.0
Slide 14: Operating Costs (2/2)
OPERATING COSTS (2/2) OPERATING LEVERAGE AT ITS BEST IN THE QUARTER Operating costs/Total assets1 Cost/Income ratio1 0.51% 52.6% 53.4% 51.1% 53.9% 52.3% 0.45% 44.3% 42.3% 0.40% 40.3% 41.0% 38.9% 39.6% 40.2% 36.2% 36.6% 40.0% 0.37% 30.9% 31.5% 0.33% 0.33% 0.31% 0.30% 19.9% 0.29% 2013 2014 2015 2016 2
Slide 15: Capital Ratios
CAPITAL RATIOS SOUND CAPITAL POSITION REAFFIRMED AMID COMMITMENT TO DIVIDEND DISTRIBUTION CET1 ratio TCR ratio Capital strength confirmed after (0.9%) 18.4% (0.9%) seasonality linked to destination 17.1% 17.5% 16.2% of full 1Q21 earnings to cover 2021 dividend policy Capital absorption in the quarte
Slide 16: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 1Q 2021 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix 16
Slide 17: Total Assets
TOTAL ASSETS NEW HIGHS WITH IMPROVING MIX Total Assets bn/€ Managed Solutions bn/€ Managed solutions (+30% YoY, +5% YTD) 37.4 39.3 77.5 driven mostly by 74.5 In-House funds 30.2 8.8 9.2 funds/SICAVs and 65.2 6.5 insurance wrappers. Third-party funds 10.8 11.6 8.3 37.4 39.3 Financial wrappers 8.2 8.4
Slide 18: Net Inflows
NET INFLOWS HIGH-QUALITY MIX FOCUSSED ON MANAGED SOLUTIONS Total net inflows m/€ Managed solutions, m/€ 1.7 Sound growth in volumes 1.8 1.4 (+11%) with significantly better 1.5 1.3 product mix 0.3 Booming managed solutions 1.3 (4x higher than 1Q20) with 1.4 0.9 0.7 0.5 positive trend in all product
Slide 19: Total Net Inflows
TOTAL NET INFLOWS RECOVERY IN RECRUITING ACTIVITY AFTER LOCKDOWN LIMITS Net inflows by acquisition channel % Recruitment trend (# of Recruits) 1.7 Recruiting activity 1.5 1.8 resumed after the 45 45 slowdown linked to 29% 28% 39% pandemic 22 Growth remains well 31 balanced with organic 21 contributi
Slide 20: April 2021 Commercial Update
APRIL 2021 COMMERCIAL UPDATE ROBUST NET INFLOWS DRIVEN BY MANAGED SOLUTIONS Total net inflows bn/€ Managed solutions, bn/€ Assets under Advisory bn/€ 2.4 1.6 6.6 1.9 1.6 0.9 6.0 0.6 0.6 0.7 0.8 0.5 0.4 0.2 0.3 0.5 0.4 0.3 0.4 4.8 0.6 0.6 0.3 0.5 0.05 0.4 0.2 0.2 0.2 0.0 0.2 0.0 -0.1 -0.05 -0.3 -0.2
Slide 21: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 1Q 2021 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix 21
Slide 22: Growth (1/2) - 3 Year Business Plan Target Already Achieved
GROWTH (1/2) - 3 YEAR BUSINESS PLAN TARGET ALREADY ACHIEVED FOCUS ON QUALITY OF CLIENTS NOT NUMBER Assets and No. of Clients, bn/€, ‘000 +35% +38% 74.5 77.5 76-80 Strong asset growth Total 69.0 55.7 57.5 +€20bn since the Assets 41.6 47.5 (bn/€) start of 3Y Plan 2015 2016 2017 2018 2019 2020 1Q21 202
Slide 23: Growth (2/2) - 3 Year Business Plan Target Already Achieved
GROWTH (2/2) – 3 YEAR BUSINESS PLAN TARGET ALREADY ACHIEVED DELIVERING ON PRIVATE CLIENTS AS STATED IN THE 3Y PLAN % Asset Breakdown of Clients by cluster, bn/€, # No. of Clients, # Data as of 31.03.2021 Clients >€ 500K 77.5 316 +86% 29 30 9% 26 22 23 19 16 68% 2015 2016 2017 2018 2019 2020 1Q21 23
Slide 24: Value (1/3) - Improved Asset Quality
VALUE (1/3) – IMPROVED ASSET QUALITY MANAGED SOLUTIONS REPRESENTING THE BULK OF ASSET GROWTH Managed solutions m/€ Equity exposure/Total Assets % Insurance wrappers Financial wrappers +€12.0bn Third-party funds In-House funds 39.3 37.4 26.4% 34.0 44% of 2019-21 +€8.4bn 9.2 25.1% 8.8 assets growth YT
Slide 25: Value (2/3) - Improved Asset Quality
VALUE (2/3) – IMPROVED ASSET QUALITY LUX IM EXPECTED TO LEAD GROWTH THANKS TO ONGOING INNOVATION In-house assets (BG FML) WAP1 of BG FML BG SICAV / LUX IM BG Selection +€5.3bn BG Alternative 120.0 Sound asset 19.4 growth supported 18.7 by positive +€2.3bn 0.3 0.3 115.0 performance 16.9 0.3 5.0 deliv
Slide 26: Value (3/3) - Improved Asset Mix
VALUE (3/3) – IMPROVED ASSET MIX ESG PROVING AS A KEY GROWTH DRIVER FOR MANAGED SOLUTIONS Cumulative Net inflows in ESG1 products since inception, bn/€ Assets in ESG1 products, bn/€ 13.6% 2.5 13.0% Unique ESG commercial approach based on a dedicated IT proprietary platform, in-depth 2.0 11.0% analys
Slide 27: Closing Remarks
CLOSING REMARKS SOLID FOUNDATIONS ON WHICH TO BUILD THE NEW BUSINESS PLAN Objective KPIs 2021 Targets 2019-1Q21 Results Score Cumulative Net Inflows >14.5 bn/€ 12.7 bn/€ Asset growth Total Assets 76-80 bn/€ 77.5 bn/€ Core Net Banking Income1 ≥63 bps 67 bps Sustainable profitability ‘Core’ Operating
Slide 28: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 1Q 2021 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix 28
Slide 29: 2021 Business Initiatives
2021 BUSINESS INITIATIVES Details in the next slides KEY BUSINESS DRIVERS NEW REVENUE STREAMS NEW BUSINESS LEVERS BG FUND A D ADVANCED ADVISORY G LOMBARD LENDING MANAGEMENT LUX B ESG E BROKERAGE H PRIVATE MARKETS STRUCTURED PRODUCTS INTERNATIONAL C INSURANCE F I EXPANSION & PRIMARY MARKET 29
Slide 30: Key Business Drivers - LUX IM
A KEY BUSINESS DRIVERS - LUX IM NEW TOOLS SUPPORTING LUX IM GROWTH Savings Plans: Net inflows in LUX IM m/€ Switch Plans: Net Inflows in Funds m/€ 900 Strong delivery of new tools 799 24000 linked to LUX IM: 900 18000 800 21000 782 800 16000 700 PAC (Savings plans): 18000 700 651 14000 600 almost do
Slide 31: Key Business Drivers - ESG
B KEY BUSINESS DRIVERS - ESG DISTINCTIVE APPROACH TO ESG DELIVERING ABOVE EXPECTATION Distinctive commercial approach ESG assets split by managed solutions UN SDGs Fund selection and ranking ESG Funds/SICAVs: 10% 244 ESG funds (+21 strategies YTD, +52 YoY) 28% New products 62% LUX IM expected to dou
Slide 32: Key Business Drivers - Insurance
C KEY BUSINESS DRIVERS - INSURANCE INSURANCE OFFER TURNING TOWARDS WRAPPER SOLUTIONS Insurance assets bn/€ Insurance products Growing focus on wrapper solutions in light of current ultra-low rate 24.4 26.0 26.3 environment • Hybrid solution combining on average 30-40% of LOB1 with single funds/secur
Slide 33: New Revenue Streams
D-E-F NEW REVENUE STREAMS GROWING BUSINESS DIVERSIFICATION IN FULL SWINGS Advanced advisory (AuA) by mix, bn/€ Structured products Turnover ratio1 6.5 9.4 9.4 6.0 0.7 Group 0.7 4.7 BG SAXO 0.96 1.05 1.09 0.6 2.5 2.3 Best private bank for 2019 2020 1Q21 1.9 structured products Trading Mix (1Q-21) 2.9
Slide 34: New Business Levers - Lombard Lending
G NEW BUSINESS LEVERS - LOMBARD LENDING STEADY GROWTH IN SECURED LOANS Drawn loans, bn/€ Loans trend, bn/€ 2.3 2.2 4.8 Steady growth in new loans 4.6 1Q21 new drawn loans at €62 vs. 2.1 €10m in 1Q21 (€264m in 2020) 2.0 3.2 1.9 3.1 1.9 Well diversified and secured lending Lending policy focused on th
Slide 35: New Business Levers - Private Markets
H NEW BUSINESS LEVERS - PRIVATE MARKETS GROWING SUBSCRIPTION BG’s way to Private markets Client target Subscriptions in progress Clients’ AUM thresholds for access to Net inflows growing steadily the product: (~€90m YTD) amid strict • FIA – for Clients with AUM> €500K thresholds and enhanced • ELTIF
Slide 36: New Business Levers - International Expansion
I NEW BUSINESS LEVERS - INTERNATIONAL EXPANSION TEMPORARY SLOWDOWN DUE TO THE PANDEMIC AND LOWER RISK PERCEPTION Three drivers Assets, bn/€ Increased need to obtain a Swiss 1.3 1.3 banking licence in order to capitalise 1.2 on the opportunities offered by the context BGIA is the key tool to better s
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