Finecobank Spa · MIL:FBK
Finecobank Spa — Finecobank Banca Fine — Q3 2023 Earnings Presentation
48 slides from Finecobank Spa's earnings presentation, Nov 7, 2023
Slide 1: 3Q23 Results
3Q23 Results Alessandro Foti CEO and General Manager Milan, November 7th 2023 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 ◼ 9M23 adj. Net Profit at 454.2mln, +50.1% y/y(1) (+68.4% y/y excluding 9M22 Profits f
Slide 5: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Adj. Net Profit at 454.2, +50.1% y/y boosted by strong acceleration of Investing, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed 9M22 9M23 9M23/ mln Revenues Adj. (1) Adj. (1) 9M22
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 Investing revenues increasing thanks to volume effect and FAM Investing Revenues, mln +5.6% +7.3% mln 3Q22 2Q23 3Q23 9M22 9M23 227.7 240.6 +3.6% Investing 78.6 81.4 84.4 22
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 Fineco (mln euro) Peer1 (mln sek) -11.0% -6.1% -27.1% -16.5% 213.9 190.4 149.1 140.1 2,220.5 1
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 2 bps -4.6% Sep.22 Jun.23 Sep.23
Slide 11: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements Current Sept.22 Jun.23 Sept.23 (€/bn) Sept.22 Jun.23 Sept.23 Requirements CET1 Ratio 20.39% 23.20% 24.73% 8.05% CET1 Capital 0.95 1.07 1.11 SOLVENCY Total Capital Ratio 31.11% 34.04% 35.90% 12.32% Tier1 Capital 1.45 1.57 1.61 Levera
Slide 12: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 808% 389% 127% 160% FBK avg EBA FBK avg EBA Fineco as of Sept.23; avg EBA as of Jun.23 Fineco Sept.23; avg EBA as of Jun.23 HQLA/Deposits 66% FBK HQLA: €19.4 bn as of Sept.23 Average 38% (12 months avg) 52% 50% 50% 45% 42% 40% 39% 38% 41%
Slide 13: Agenda: Fineco Commercial Results
Agenda ❑ Fineco Financial Results ✓Fineco Commercial Results ❑ Next steps ❑ Key messages 13
Slide 14: Clients' acquisition: strong acceleration in our organic growth
Clients’ acquisition: strong acceleration in 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 98.1 sin
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 116.3 8.8% 107.9 106.6 1-5mln 8.4% 1.0mln 91.7 35.9% 5-10mln 81.4 44% Level of deposits is 69.3 45% 42% 42% 46.9% >10mln gettin
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: 116.3 Oct.23 total Net Sales: 0.5bn +131.6% 107.9 106.6 34% 30% 10.7 10.3 91.7 27% 6.8 9.
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 September 2023 YTD, € bn AUM Net Sales per PFA, € mln 27.7 0.6 9.0 0.7 6.4 31.7 0.5 2.3 14.8 0.4 5.0 3.6 0.9 6.6 2.0 2.7 4.4 0.03 0.3 -2.
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 78% Guaranteed deposits by DGS (<€100k)
Slide 20: Fineco overperforming banking system on sight deposits trend
Fineco overperforming banking system on sight deposits trend Transactional liquidity driving for Fineco’s better performance on sight deposits vs system € bn Fineco: stock of deposits trend Italian banking system: (1) stock of sight deposits trend -10.7% -8.4% -7.8% -9.7% 1,485.4 1,468.3 1,325.9 30.
Slide 21: Agenda: Next steps
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ✓Next steps ❑ Key messages 21
Slide 22: 2023 Guidance and 2024 outlook
2023 Guidance and 2024 outlook Our diversified business model key to successfully deal with the current volatile environment ◼ BANKING REVENUES: ◼ OPERATING COSTS expectations: ➢ Net financial income (NFI: net interest income + Profit from Treasury management) For FY23: growth of around 6% y/y, not
Slide 23: 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. The renewed platform will be the cornerstone of our International offer BROKERAGE INVESTING BANKING ✓New Trading Pages. Coming soon: new order entr
Slide 24: Agenda: Key messages
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ✓Key messages 24
Slide 25: 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 26: 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 27: 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 28: 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 CAGR (2014-2022) + 10% 108 107 92 69 81 60 67 1,428 1,487 + 6% TFA (bn) 49 55 1,358 1,370 1,278 1,200 461 Clients (thd, #) 964 1,048 1,118 376 + 15% 284 342 226 25
Slide 29: Annex
Annex 29
Slide 30: P&L pro-forma
P&L pro-forma P&L pro-forma(1) mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 9M22 9M23 Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 180.2 260.6 508.5 o/w Net Interest Income 59.3 67.6 84.3 131.6 342.8 157.4 170.8 180.0 211.2 508.2 o/w Profit from treasury management 48.1 1.3 0.0 0.0 49
Slide 31: 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 9M22 9M23 mln (1) (1) (1) Adj. Adj. Adj. Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 180.2 260.6 508.5 o/
Slide 32: 9M23 P&L FinecoBank and Fineco Asset Management
9M23 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net financial income 0.7 507.8 508.5 Dividends 0.0 29.5 0.0 Net commissions 112.6 249.6 362.2 Trading profit 0.0 46.3 46.3 Other expenses/income -0.5 0.5 -0.3 Total revenues 112.
Slide 33: 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 9M22 9M23 Margins Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 40.5 27,303 4
Slide 34: 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) (1) (2) € bn, eop UC bonds Italy Spain Other Govies SSA Covered & Corporate 22.3 1.0 Bond portfolio Nominal value: 22.3 bn: 5.4 ▪ o/w 61% at fixed rate, avg
Slide 35: 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 1.7 1.6 1.6 1.5 1.6 2.0 1.7 1.9 1.
Slide 36: Interest rates
Interest rates Below a comparison of the forward rate curve behind the guidance to the market during the 2Q23 and 3Q23 conference calls 2023 2024 as of as of as of as of 28/07/23 02/11/23 28/07/23 02/11/23 Euribor 1M AVG 3.31% 3.28% 3.65% 3.56% Euribor 3M AVG 3.46% 3.44% 3.68% 3.56% EURIRS 5Y AVG 3.
Slide 37: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 9M22 9M23 Banking 12.5 13.8 14.5 15.3 56.2 14.6 15.6 12.0 40.8 42.1 Brokerage 32.6 24.2 20.9 22.7 100.5 31.3 24.2 23.5 77.8 79.0 o/w Equity 28.1 18.3 16.1 16.5 79.0 22.8 16.1 17.6 62.5 56.5 Bond 0.
Slide 38: Revenues breakdown by Product Area
Revenues breakdown by Product Area Revenues by product area mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 9M22 9M23 Net financial income 104.4 66.3 81.8 129.5 382.0 154.9 167.5 176.1 252.4 498.5 o/w Net interest income 56.3 65.0 81.8 129.5 332.6 154.9 167.4 176.0 203.0 498.2 o/w Profit from Treasury M
Slide 39: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 Sep.23 AUM 53,651 50,789 50,708 52,073 54,132 55,803 55,400 o/w Founds and Sicav 35,985 33,182 32,806 33,827 35,962 37,373 36,807 o/w Insurance 15,354 15,421 15,643 15,595 15,052 14,708 14,359 o/w GPM 326 308 303 318 331
Slide 40: 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 62% and hold 88% of TFA +9.8% +12.4% +68 -0.3% 90.1bn 100 101.3bn 100 2,900 2,968 34.2 34.1 31.1 > €35mln +6.8% 30% 34% €25-35mln y/y 62% 18.7 18.5 €20
Slide 41: Balance Sheet
Balance Sheet mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 Sep.23 (1) Due from Banks 2,132 1,943 2,139 1,896 1,860 1,934 2,224 Customer Loans 6,088 6,311 6,318 6,446 6,312 6,184 6,058 Financial Assets 25,389 25,315 25,091 24,651 24,366 22,630 21,648 Tangible and Intangible Assets 276 274 270 273 26
Slide 42: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 33.1 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 21.6 ◼ 99.9% not
Slide 43: Leverage Ratio Sensitivity
Leverage Ratio Sensitivity Leverage Ratio comfortably under control Retained earnings = Tier 1 Capital (mln) OUR PRIORITY 70 80 90 100 110 120 130 140 150 200 250 300 350 400 450 500 Focus on our Balance Sheet to keep under -5,000 6.10% 6.13% 6.17% 6.20% 6.24% 6.27% 6.30% 6.34% 6.37% 6.54% 6.71% 6.8
Slide 44: 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 45: Preserving our best price/quality ratio
Preserving our best price/quality ratio Competitive landscape(1) € Online € 96 avg € 144 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 ISYBA
Slide 46: ESG Ratings and Indices
ESG Ratings and Indices ESG RATINGS ESG INDICES RECENT ESG AWARDS Evaluation scale 2021 Today (0-100) n.a. 68* New S&P Global ESG Score Data Availability: Very High Fineco included in: (From D- to A) -** B Most climate- First submission Top Employer Italy conscious companies 2023 2023 (100-0) 16.0 1
Slide 47: Commitment to Net Zero emissions by 2050
Commitment to Net Zero emissions by 2050 Aware of the importance of environmental and climate matters, in 2022 the BoD approved the Net-Zero emissions plan to 2050 regarding both operational and financed emissions RESPONSIBLE FINANCE - Scope 3 emissions from internal investment portfolio 2021 2030 2
Slide 48: 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 will be binding star
Finecobank Banca Fine — Q3 2023 Earnings Presentation on 6ix