Finecobank Spa · MIL:FBK
Finecobank Spa — Finecobank Banca Fine — Q4 2023 Earnings Presentation
46 slides from Finecobank Spa's earnings presentation, Feb 6, 2024
Slide 1: 4Q23 Results
4Q23 Results Alessandro Foti CEO and General Manager Milan, February 6th 2024 FINECO. SIMPLIFYING BANKING.
Slide 2: Disclaimer
Disclaimer ◼ “Pursuant to the paragraph 2 of Article 154 bis of the Consolidated Law on Financial Intermediation (Legislative Decree no. 58 of February 24, 1998), Lorena Pelliciari, in her capacity as manager responsible for the preparation of FinecoBank S.p.A. (the “Company”)’s financial reports, d
Slide 3: Agenda: Fineco Financial Results
Agenda ✓Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ❑ Key messages 3
Slide 4: Executive Summary
Executive Summary 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 ◼ FY23 adj. Net Profit at 609.1mln, +42.0% y/y(1) (+54% y/y excluding FY22 Profits fro
Slide 5: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Adj. Net Profit at 609.1, +42.0% y/y boosted by strong acceleration of Investing, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed FY22 FY23 FY23/ mln Adj. (1) Adj. (1) FY22 Revenues
Slide 6: Our priority: accelerating on Investing
Our priority: accelerating on Investing Improving margins thanks to the higher control on the Investing value chain through FAM. 4Q23 management fees slightly down due to negative market effect Increasing Investing revenues thanks to FAM Investing Revenues, mln +6.8% 329.1 mln 4Q22 3Q23 4Q23 FY22 FY
Slide 7: Focus on FAM: delivering on the strategic discontinuity
Focus on FAM: delivering on the strategic discontinuity Key to sustain AUM margins thanks to its strong operating leverage and to a more efficient value chain FAM progressively taking control of the value chain… …and becoming the cornerstone of our Investing bn bn FAM AUM STOCK FAM RETAIL NET SALES
Slide 8: 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 9: Brokerage: focus on revenues generation vs peers
Brokerage: focus on revenues generation vs peers More resilient revenues generation vs peers thanks to better quality target market Brokerage revenues: FBK best performing in challenging market environment (1) Fineco (mln euro) Peer1 (mln sek) Peer2 (mln sek) Peer3 (mln euro) -2.1% -24.3% 190.4 186.
Slide 10: 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 5 bps 5 bps 4 bps -7.4% Dec.22 Sep.23 Dec.23
Slide 11: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements Current (€/bn) Dec.22 Sept.23 Dec.23 Dec.22 Sept.23 Dec.23 Requirement (2) CET1 Ratio 20.82% 24.73% 24.34% 8.23% CET1 Capital 0.99 1.11 1.15 SOLVENCY (2) Total Capital Ratio 31.37% 35.90% 34.91% 12.60% Tier1 Capital 1.49 1.61 1.65 L
Slide 12: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 823% 378% 126% 161% FBK avg EBA FBK avg EBA Fineco as of Dec.23; avg EBA as of Sept.23 Fineco Dec.23; avg EBA as of Sept.23 HQLA/Deposits 68% FBK HQLA: €19.5 bn as of Dec.23 Average 60% 38% (12 months avg) 51% 51% 45% 42% 39% 37% 39% 40% 3
Slide 13: Agenda: Fineco Commercial Results
Agenda ❑ Fineco Financial Results ✓Fineco Commercial Results ❑ Next steps ❑ Key messages 13
Slide 14: Clients' acquisition: 2023 a record year thanks to our organic growth
Clients’ acquisition: 2023 a record year thanks to our organic growth Keeping on enjoying the secular growth trends and improving the marketing efficiency thanks to Big Data Analytics Strong acceleration in our organic new clients’ acquisition metrics Thd, # New clients y/y growth Strongest month 11
Slide 15: 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 Client segmentation AuM AuC Deposits 0.5-1mln 122.6 8.7% 107.9 106.6 8.5% 1-5mln 1.0mln 91.7 35.5% 5-10mln Level of deposits is 81.4 46% getting closer to the 69.3 45% 42% >
Slide 16: 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 AUM since the end of 2014: 122.6 Jan.24 total Net Sales: 0.6bn +142.6% 107.9 106.6 8.8 34% 10.7 10.3 30% 91.7 9.3 2.
Slide 17: 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 18: Best PFAs productivity among main asset gatherers
Best PFAs productivity among main asset gatherers Fineco confirms to be the perfect partner for professionals looking to grow in a sustainable way Total Net Sales 2023 YTD, € bn AUM Net Sales per PFA, € mln 36.7 2.5 13.5 0.9 0.7 8.8 38.3 0.6 2.7 18.6 5.8 6.3 1.3 8.3 2.9 6.0 0.1 3.6 -2.1 -1.7 -0.2 -1
Slide 19: 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 77% Guaranteed deposits by DGS (<€100k)
Slide 20: Agenda: Next steps
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ✓Next steps ❑ Key messages 20
Slide 21: 2024 Guidance: outlook confirmed with better mix
2024 Guidance: outlook confirmed with better mix Our diversified business model key to successfully deal with the current volatile environment Revenues Costs and provisions ➢ OPERATING COSTS: expected growth of around 6% vs FY23, not including ➢ REVENUES expected to consolidate in FY24 around the re
Slide 22: 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 ✓New Advisory Platform: Advice+ ✓New faster onboarding to further simplify PFAs daily acti
Slide 23: Agenda: Key messages
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ✓Key messages 23
Slide 24: Long term sustainability at the heart of Fineco business model (1/2)
Long term sustainability at the heart of Fineco business model (1/2) 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: support clients in the responsible management of th
Slide 25: Long term sustainability at the heart of Fineco business model (2/2)
Long term sustainability at the heart of Fineco business model (2/2) 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 Strategy & Goals Initiatives & KPIs ✓ FOCUS on Cyber-Security and ESG risks l
Slide 26: 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 1 2 3 4 SIMPLICITY OMNICHANNEL BIG-DATA TIME TO MARKET & CUSTOMIZATION Client front-ends are built IT provides a seamless user Data manage
Slide 27: 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 1,200 461 637 + 17% Clients (thd, #) 964 1,048 1,118
Slide 28: Annex
Annex 28
Slide 29: P&L pro-forma
P&L pro-forma P&L pro-forma(1) mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 180.2 179.5 688.0 o/w Net Interest Income 59.3 67.6 84.3 131.6 342.8 157.4 170.8 180.0 179.5 687.7 o/w Profit from treasury management 48.1 1.3 0.0 0.0 49
Slide 30: P&L net of non recurring items
P&L net of non recurring items P&L pro-forma(1) net of non recurring items 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 mln (1) (1) Adj. Adj. Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 180.2 179.5 688.0 o/
Slide 31: FY23 P&L FinecoBank and Fineco Asset Management
FY23 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net financial income 1.3 686.7 688.0 Dividends 0.0 113.6 -0.1 Net commissions 155.7 334.2 489.9 Trading profit 0.1 60.3 60.4 Other expenses/income -0.8 0.5 -0.6 Total revenues 15
Slide 32: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Margins Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 40.5 27,303 4
Slide 33: Net financial income: focus on financial investments
Net financial income: focus on financial investments Transactional liquidity invested in a diversified portfolio Bond Portfolio (nominal value) € bn, eop UC bonds Italy Spain Other Govies (1) SSA (2) Covered & Corporate 21.7 0.6 Bond portfolio Nominal value: 21.7 bn: 5.2 ▪ o/w 61% at fixed rate, avg
Slide 34: Focus on Bond portfolio
Focus on Bond portfolio Bond portfolio run-offs, eop bn (1) Fixed rate bonds Floating and swapped bonds (1) Avg yield of fixed rate bonds, bps Avg spread vs EUR 3M of floating and swapped bonds, bps UC bonds UC Bonds avg spread vs Eur3M, bps 3.0 3.0 3.1 2.5 2.7 2.3 1.8 1.7 1.6 1.6 1.6 2.0 1.7 1.9 1.
Slide 35: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 4Q21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Banking 13.5 12.5 13.8 14.5 15.3 56.2 14.6 15.6 12.0 13.2 55.3 Brokerage 30.6 32.6 24.2 20.9 22.7 100.5 31.3 24.2 23.5 27.0 105.9 o/w Equity 26.2 28.1 18.3 16.1 16.5 79.0 22.8 16.1 1
Slide 36: Revenues breakdown by Product Area
Revenues breakdown by Product Area Revenues by product area mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Net financial income 104.4 66.3 81.8 129.5 382.0 154.9 167.5 176.1 175.1 673.5 o/w Net interest income 56.3 65.0 81.8 129.5 332.6 154.9 167.4 176.0 175.1 673.3 o/w Profit from Treasury M
Slide 37: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 Sep.23 Dec.23 AUM 53,651 50,789 50,708 52,073 54,132 55,803 55,400 58,016 o/w Founds and Sicav 35,985 33,182 32,806 33,827 35,962 37,373 36,807 38,839 o/w Insurance 15,354 15,421 15,643 15,595 15,052 14,708 14,359 13,760
Slide 38: 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 64% and hold 89% of TFA +12.8% +14.5% +44 +5.5% 93.2bn 100 106.7bn 100 2,918 2,962 36.0 34.1 > €35mln 31.9 +9.9% €25-35mln 31% 37% y/y 64% 19.4 €20-25m
Slide 39: Balance Sheet
Balance Sheet mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 Sep.23 Dec.23 (1) Due from Banks 2,132 1,943 2,139 1,896 1,860 1,934 2,224 2,643 Customer Loans 6,088 6,311 6,318 6,446 6,312 6,184 6,058 6,199 Financial Assets 25,389 25,315 25,091 24,651 24,366 22,630 21,648 21,417 Tangible and Intangible
Slide 40: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 33.3 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 21.4 ◼ 99.9% not
Slide 41: Leverage Ratio Sensitivity
Leverage Ratio Sensitivity Leverage Ratio comfortably under control OUR PRIORITY Retained earnings = Tier 1 Capital (mln) Focus on our Balance Sheet to keep under control the growth of deposits and improve our 70 80 90 100 110 120 130 140 150 200 250 300 350 400 450 500 quality revenues mix. Thanks
Slide 42: Fineco Asset Management in a nutshell
Fineco Asset Management in a nutshell FAM is active on 6 business lines with the following products (Core Series, FAM Evolution, FAM Series, Passive and Smart Factors funds, FAM Evolution Target family and FAM Series Global Defence / Target family), providing not only the expertise of the best Asset
Slide 43: Preserving our best price/quality ratio
Preserving our best price/quality ratio Competitive landscape(1) € Online € 100 avg € 152 avg Branch online costs branch costs Widiba (Conto Start) 20 53 Webank 24 Ing (Conto Arancio) 27 Fineco 40 Illimity (Conto Illimity Classic) 46 HelloBank! (Hello! Money) 60 Banca Sella (Conto Start) 62 161 ISYB
Slide 44: ESG Ratings and Indices
ESG Ratings and Indices ESG RATINGS ESG INDICES RECENT ESG AWARDS Evaluation scale 2022 Today (0-100) n.a. 68* New S&P Global ESG Score Data Availability: Very High Fineco included in: Top Employer Italy Most climate- 2023 conscious companies (From D- to A) B B 2023 First submission (100-0) 13.2 14.
Slide 45: 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 46: Funding
Funding Senior Preferred instrument AT1 instruments ➢ €500 mln Senior Preferred issued on October 14th, 2021 in order to be immediately compliant with the Fully Loaded MREL Requirement on Leverage Ratio Exposure (LRE), ➢ €200 mln perpetual AT1 issued on January 23rd, 2018: which is binding starting
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