Banca Generali S.p.a. · MIL:BGN
Banca Generali — H1 2019 Earnings Presentation
30 slides from Banca Generali's earnings presentation, Jul 30, 2019
Slide 1: 1H 2019 Results
1H 2019 RESULTS 30 JULY 2019 SY BANCA dios. GENERALI
Slide 2: Agenda
AGENDA Preliminary remarks Our Mission: To be the 1H 2019 Results No.1 Private Bank unique Net Inflows, Assets and Recruitment by Value of Service, Business update Innovation and Sustainability Appendix
Slide 3: Executive Summary
EXECUTIVE SUMMARY Record assets expansion Total assets reached new highs at €62.9bn (+€4.8bn YoY, +€5.4bn YTD) with Lux-based assets TOTAL ASSETS (BG FML) hitting €15.6bn (+11% YTD). On a pro-forma basis1, total assets reached €65bn. Assets under advisory (AuA) almost doubled to €4.0bn (+75% YoY,
Slide 4: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mln) 1H 18 1H 19 % Chg 1H 19 % Chg Solid increase in Total Banking Income (22%) LfL IFRS 15 / IFRS 16 Net Financial Income supported by higher NII (+20% reported, Net Interest Income 28.1 35.3 25.8% 33.6 19.7% +26% on a like-for-like basis) almost offs
Slide 5: Net Profit Build-Up
NET PROFIT BUILD-UP BEST OF BOTH WORLDS Net Profit build-up m/€ 10.1 (7.2) 3.8 (5.6) 5.5 (1.1) 0.7 132.8 (6.5) 33.7 (6.1) (6.3) 123.3 Lower Higher Asset Acceleration of IFRS 15 and Enhanced write-down tax on expansion, IFRS 16 92.6 return on key projects and growing banking book delivery on and some
Slide 6: Agenda
AGENDA Preliminary remarks Our Mission: To Be the 1H 2019 Results No.1 Private Bank unique Net inflows, Assets and Recruitment by Value of Service, Business update Innovation and Sustainability Appendix
Slide 7: Net Financial Income
NET FINANCIAL INCOME UPWARDS TREND CONFIRMED Net financial income m/€ Interest-bearing Assets bn/€ 48.6 10.9 39.6 9.5 2 1.3 20.6 6.0 1.1 28.5 1.8 Other assets 1.8 Trading income 19.9 19.7 20.2 Loans to Banks IFRS 16 15.2 4.0 2.0 Loans to Clients 35.3 5.4 6.9 NII pre IFRS16 28.1 33.6 6.0 Financial as
Slide 8: Gross Fees (1/3): Management Fees
GROSS FEES (1/3): MANAGEMENT FEES MANAGEMENT FEES STEADILY RECOVERING Management Fees m/€ Management fees steadily 317.9 313.8 recovering in values as margin trend reflects a more defensive product mix on clients’ higher risk aversion 158.1 159.8 155.0 158.8 Results are in line management fee margin
Slide 9: Gross Fees (2/3): Other Fees
GROSS FEES (2/3): OTHER FEES GROWING CONTRIBUTION, GROWING DIVERSIFICATION Banking and Entry Fees m/€ Entry fees growing fast 39.9 (+11% YoY, +77% QoQ) on 36.1 higher placement of structured products and 12.8 certificates 11.5 Entry fees 22.1 16.6 19.5 17.8 Banking fees 8.2 6.5 4.6 Banking fees also
Slide 10: Gross Fees (3/3): Performance Fees
GROSS FEES (3/3): PERFORMANCE FEES POSITIVE FINANCIAL PERFORMANCE Performance Fees m/€ 70.8 Performance fee in the semester at 16bps of managed 35.2 35.6 assets (31 bps on an 22.6 annualised basis) 14.9 7.6 New performance fees 1H 18 1H 19 1Q18 2Q18 1Q 19 2Q 19 calculation mechanism applying to 56%
Slide 11: Fee Expenses
FEE EXPENSES TOTAL PAY-OUT MOVING FURTHER DOWN Total Fee Expenses m/€ Pay-out to the network % 51.0% 48.8% Pay-out to the network 201.9 36.0 36.4 down 2.3 ppts on lower 191.4 cost of growth thanks to 21.3 0.6 19.0 15.0 higher organic 11.8 53.2 41.6 contribution and positive Fee expenses to 1H18 1H19
Slide 12: Operating Costs (1/2)
OPERATING COSTS (1/2) GROWTH, STRATEGIC PUSH AND ACCELERATION OF KEY PROJECTS Total operating costs m/€ Breakdown of core operating costs m/€ Operating costs inflated by €1.9m one-off items (office 86.6 93.8 moving, M&As, IFRS16). 100.9 13.8 Net of one-offs, costs would 93.6 4.2 7.1 3.8 3.6 have bee
Slide 13: Operating Costs (2/2)
OPERATING COSTS (2/2) HIGH EFFICIENCY LEVELS CONFIRMED Operating costs/Total assets Cost/Income ratio 53.4% 0.51% 53.9% 52.6% 52.3% 51.1% 46.5% 0.45% 0.42% 39.9% 42.3% 40.3% 41.0% 40.1% 0.38% 38.1% 41.7% 0.34% 0.34% 0.32% 32.0% 2013 2014 2015 2016 2017 2018 1H19 2013 2014 2015 2016 2017 2018 1H19 1
Slide 14: Capital Position
CAPITAL POSITION SOLID CAPITAL REAFFIRMED ALSO ON CONSERVATIVE BASIS CET1 ratio TCR ratio 17.5% (1.8%) Solid capital ratios confirmed on 16.5% 19.0% (1.9%) 17.9% more conservative assumptions, i.e. 15.7% 17.1% 100% of interim profit set aside for dividend policy (€1.25 per share1 floor) Capital rati
Slide 15: Agenda
AGENDA Preliminary remarks Our Mission: To Be the 1H 2019 Results No.1 Private Bank unique Net Inflows, Assets and Recruitment by Value of Service, Business update Innovation and Sustainability Appendix
Slide 16: Total Assets
TOTAL ASSETS HIGHER VOLUMES AND PRODUCT MIX Total Assets bn/€ Managed Solutions bn/€ 62.9 28.8 27.3 29.6 58.1 57.5 5.9 5.5 6.3 8.0 7.7 8.5 7.1 6.4 6.5 29.6 28.8 27.3 7.8 7.7 8.3 Managed solutions 1H18 2018 1H19 Traditional life policies Insurance wrappers Financial wrappers 16.2 Third-party funds In
Slide 17: Net Inflows
NET INFLOWS ONGOING STRONG VOLUMES, PRODUCT MIX TRENDING BETTER Total Net inflows bn/€ LUX IM (in-house retail offer, net Net inflows in AuC solutions inflows) bn/€ bn/€ 3.1 2.8 1.0 0.7 0.7 0.4 1.4 0.2 0.8 0.3 0.2 0.7 0.3 0.7 0.3 0.2 0.8 0.9 0.2 0.1 1H18 1H19 1H18 1H19 1H18 1H19 Managed solutions Tr
Slide 18: Recruiting
RECRUITING SOFTER RECRUITING OFFSET BY HIGHER ORGANIC GROWTH Recruitment trend (# of Recruits) Total net inflows by acquisition channel m/€ 161 153 126 105 27% 102 94 53% 53% 122 61% 81 92 65 75 73 New recruits 50 18 43 Existing network 75% 19 58% 58% 59 FA Out 44% 39 47 31 27 34 32 24 -5% -2% 2013
Slide 19: FA Network
FA NETWORK SUPERIOR FA QUALITY FURTHER ENHANCED FA Network breakdown by cluster of portfolio FA Network (# of FAs) (as of 30.06.2019) 1,936 1,985 2,022 1,841 2,022 62.9 1,645 1,715 1,475 15% 44% 19 53% 2013 2014 2015 2016 2017 2018 1H19 47% FA Portfolio vs. sector (Average Assets/FA) 32% 28.8 29.0 3
Slide 20: Agenda
AGENDA Preliminary remarks Our Mission: 1H 2019 Results To Be the No.1 Private Bank unique Net inflows, Assets and Recruitment by Value of Service, Business update Innovation and Sustainability Appendix
Slide 21: Assets Under Advisory (AuA)
ASSETS UNDER ADVISORY (AUA) GROWTH AHEAD OF PLAN Assets under Advisory (AuA) breakdown by cluster of service bn/€ PURE FINANCIAL traditional financial advisory approach on fund/securities supported by new tools: 5.5-6.0 • robo-4-advisory platform through an exclusive partnership with UBS • market st
Slide 22: Assets Under Custody (AuC)
ASSETS UNDER CUSTODY (AUC) NEW TOOLS TO SPEED UP GROWTH Gross Inflows from existing FAs of stocks and bonds from other banks1 bn/€ BG CERTIFICATES hub 0.5 • €205m new issues in 1H19, of which €139m public offering and + 55% €61m private certificates • New initiatives to be launched soon 0.3 BGPA&RO4
Slide 23: Assets Under Management (AuM)
ASSETS UNDER MANAGEMENT (AUM) INNOVATION AND PROFITABILITY Assets under Management1 (AuM) bn/€ IN-HOUSE FUNDS • I wave (March 2018) & II wave (October 2018) BGFML BGFML • III wave due September 2019 Total assets by by investment • Recurring plans fund classes strategies 2% NEW PORTFOLIO MANAGEMENT L
Slide 24: Agenda
AGENDA Preliminary remarks Our Mission: 1H 2019 Results To Be the No.1 Private Bank Net inflows, Assets and Recruitment by Value of Service, Business update Innovation and Sustainability Appendix
Slide 25: New Accounting Principles IFRS 16
NEW ACCOUNTING PRINCIPLES IFRS 16 DETAILS ON RECONCILIATION * Comments (€ mln) 1H 18 1H 19 % Chg 1H 19 % Chg 1H 19 % Chg First Time Adoption of IFRS 16 LfL IFRS 15 IFRS 15 / IFRS 16 Banca Generali has stated its Right of Use Net Interest Income 28.1 35.3 25.8% 35.3 25.8% 33.6 19.7% (RoU) of total le
Slide 26: Net Financial Income (2/2)
NET FINANCIAL INCOME (2/2) IMPROVING RETURN ON FINANCIAL ASSETS Banking book and liquidity, bn/€ Maturity (Bond) Duration (Bond) 8.2 7.4 1 7.1 7.2 3.5 3.4 1.3 0.9 2.0 Loans to banks & 1.1 1.5 1.7 other liquidity 1.7 1.2 1.3 0.8 Financial assets Total HTCS Total HTCS Total HTCS Total HTCS 6.5 6.9 6.0
Slide 27: New Revenue Streams: Assets Under Advisory
NEW REVENUE STREAMS ASSETS UNDER ADVISORY: ADVANCED ADVISORY CONTRACTS BG - % AUA Benchmark Guidance: Advisory Fees2 on Total Assets % AUA on Total Assets1 m/€ 18% 12% 20-25 7-8% 6.5% 4.0% 8.9 2.5% 7.3 4.2 2017 2018 1H19 2021E 1H18 1H19 2018 2021E Italian Private Italian Assoreti best market average
Slide 28: New Revenue Streams: Assets Under Custody
NEW REVENUE STREAMS ASSETS UNDER CUSTODY: CERTIFICATES AND PRIVATE PLACEMENTS BG - % Certificates & private Benchmark - % Certificates Guidance: Entry fees on certificates placements stock on AUC stock on AUC & private placements m/€ ~5% 10.0 ~3.0% 3.5% 7.1 5.9 2.2% 2.5% 3.7 0.5% 2017 2018 1H19 2021
Slide 29: 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 30: Upcoming Events and Investor Relations
UPCOMING EVENTS Investor Relations OCTOBER Su Mo Tu We Th Fr Sa Giuliana Pagliari 1 2 3 4 5 Investor Relations Manager Phone +39 02 408 26548 6 7 8 9 10 11 12 Mobile +39 331 65 30 620 9M 2019 results 13 14 15 16 17 18 19 & Investor Conference Call E-mail: giuliana.pagliari@bancagenerali.it 20 21 22