Slide 1: 9M 2019 Results
9M 2019 RESULTS 31 OCTOBER 2019
Slide 2: Agenda
AGENDA Preliminary remarks Our Mission: To be the 9M 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 BEST 9M NET PROFIT EVER Strong net profit led by asset growth, diversification and investment performance Strong growth both in reported net profit (€196m, +44%) and core net profit (€103m, +18%) leveraging on favorable financial markets, asset expansion and supported by a solid
Slide 4: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mln) 9M 18 9M 19 % Chg 9M 19 % Chg m/€ LfL Reported1 Strong increase in Operating Profit 1 (+34%) Net Interest Income 44.2 56.5 27.8% 53.9 21.8% Higher NII (+21.8%) on higher volumes Net income (loss) from trading activities and Dividends 22.1 9.3 -57.
Slide 5: Net Profit Build-Up
NET PROFIT BUILD-UP STRONG IMPROVEMENT IN BOTH REPORTED AND RECURRING PROFITS Net Profit build-up m/€ (12.4) (2.6) (9.4) 20.0 5.4 0.5 (9.8) 196.0 (9.4) 9.6 (0.3) (9.9) 47.0 5.7 186.6 Acceleration of Lower Higher Asset tax on key projects write-down IFRS 15 135.8 Stronger NII expansion, and some one-
Slide 6: Agenda
AGENDA Preliminary remarks Our Mission: To Be the 9M 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 LIFTED BY HIGHER VOLUMES AND INVESTMENT YIELD Net financial income m/€ Interest-bearing Assets bn/€ 66.3 63.2 9.3 11.8 22.1 9.2 2 1.2 Other assets 1.9 0.9 Trading income 56.5 23.5 1.8 19.7 Loans to Banks 17.7 19.9 IFRS 16 44.2 53.9 3.3 Loans to Clients 4.0 2.0 7.9 NII pre IFRS16
Slide 8: Gross Fees (1/3): Management Fees
GROSS FEES (1/3): MANAGEMENT FEES MANAGEMENT FEES STEADILY RECOVERING Management Fees m/€ Management fees steadily 478.7 476.9 recovering in absolute terms (+5.3% from 1Q19 low) and margins (+1bps QoQ) on a like-for-like basis, thanks to the improved product mix in the 163.2 quarter. 160.8 155.0 158
Slide 9: Gross Fees (2/3): Other Fees
GROSS FEES (2/3): OTHER FEES NEW FEES SHARPLY HIGHER Banking and Entry Fees m/€ Entry fees strongly up – 59.8 +31% despite 3Q seasonality - 51.4 driven by the new offer of 18.0 certificates, whose volumes Entry fees 15.2 issued doubled YoY Banking fees 22.1 19.9 17.8 41.8 15.2 36.2 4.6 8.2 5.2 3.6 1
Slide 10: Gross Fees (3/3): Performance Fees
GROSS FEES (3/3): PERFORMANCE FEES POSITIVE FINANCIAL PERFORMANCE Performance Fees m/€ 96.3 36.6 35.2 35.6 Performance fees at 22 bps of managed assets in the quarter 25.5 14.0 New performance fees 9M 18 9M 19 3Q 18 1Q 19 2Q 19 3Q 19 calculation mechanism applying to 59% of total Lux- based assets O
Slide 11: Fee Expenses
FEE EXPENSES TOTAL PAY-OUT MOVING DOWN FURTHER Total Fee Expenses m/€ Pay-out to the network % 50.9% 48.2% Pay-out to the network benefits from lower cost 301.1 287.9 35.6 of growth (higher 36.2 31.3 organic inflows and 29.2 IFRS15 accounting). 0.5 15.3 11.5 80.9 61.9 Ordinary pay-out slightly Fee e
Slide 12: Operating Costs (1/2)
OPERATING COSTS (1/2) STRATEGIC PUSH AND ACCELERATION OF KEY PROJECTS Total operating costs m/€ Breakdown of core operating costs1 m/€ 155.7 143.3 3.8 140.3 1.1 1.2 132.1 10.4 10.2 6.3 21.0 Reported operating costs 7.2 inflated by one-off items 7.3 and consolidation of Nextam 52.6 56.5 132.1 140.3 A
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% 39.0% 0.38% 38.1% 41.7% 0.34% 0.34% 32.9% 0.31% 2013 2014 2015 2016 2017 2018 9M19 2013 2014 2015 2016 2017 2018 9M19 1
Slide 14: Capital Position
CAPITAL POSITION SOLID CAPITAL REAFFIRMED CET1 ratio TCR ratio Solid capital ratios confirmed after 19.0% (1.2%) including 17.5% (1.0%) 17.8% 16.5% 1. IFRS 16 FTA application with a one-off charge of 86bps on CET1 and 93bps on TCR linked to recognition of the rights of use (RoU) for lease contracts
Slide 15: Agenda
AGENDA Preliminary remarks Our Mission: To Be the 9M 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 (1/3)
TOTAL ASSETS (1/3) TOTAL ASSETS EXPANSION CLOSE TO €10 BN YTD Total Assets bn/€ +9.7bn/€ Record asset expansion on a pro- forma basis: almost €10bn YTD 67.2 driven by 1.1 66.1 1.1 Organic growth €3.8bn 3.7 Asset performance €3.7bn 57.5 M&A: €2.2bn 3.8 3.8 3.8 3.8 Asset performance YTD at + 6.4
Slide 17: Total Assets (2/3)
TOTAL ASSETS (2/3) PRODUCT MIX STILL AFFECTED BY RISK AVERSION Total Assets bn/€ Managed Solutions bn/€ 28.9 27.3 31.4 66.1 5.9 7.1 58.5 5.5 57.5 8.2 8.8 7.7 6.9 6.4 7.2 31.4 7.9 7.7 8.3 28.9 27.3 9M18 2018 9M19 (incl. Nextam) 16.4 Insurance wrappers Financial wrappers 15.3 15.4 Third-party funds In
Slide 18: Total Assets (3/3)
TOTAL ASSETS (3/3) FOCUS ON LUX-BASED ASSETS AND ASSETS UNDER ADVISORY LUX-based assets bn/€ Assets under Advisory bn/€ BG Fund Management Luxembourg Total assets by fund class 16.0 4.4 15.0 14.1 0.6 11.8 12.4 9.3 2.3 8.8 1.8 5.2 6.1 8.6 0.4 1.3 0.5 0.4 2.0 6.6 6.3 6.2 5.5 6.7 1.4 0.9 2015 2016 2017
Slide 19: Net Inflows
NET INFLOWS TWO GROWTH DRIVERS AT FULL SPEED Total Net inflows (LfL) bn/€ AuA contracts (#; 000/€) Strong net inflows 56% at 6.6% of starting 4.1 3.8 6,653 assets 0.9 Product mix 1.6 4,276 reflecting ongoing clients’ high risk 0.4 1.0 aversion 1.0 0.4 1.5 Strong growth 1.1 momentum for AuA confirmin
Slide 20: Net Inflows by Channel
NET INFLOWS BY CHANNEL ORGANIC GROWTH REPRESENTING 74% OF TOTAL NET INFLOWS Recruitment trend (# of Recruits) Total net inflows by acquisition channel 161 153 126 105 29% 102 94 53% 53% 122 84 61% 81 92 73 59 75 New recruits 50 59 26 Existing network 74% 58% 57% 59 FA Out 44% 31 34 39 32 33 27 25 -5
Slide 21: Agenda
AGENDA Preliminary remarks Our Mission: 9M 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 22: Growing Fast
GROWING FAST DRIVEN BY SUPERIOR FA NETWORK Net inflows: Actual vs. Target bn/€ A network of top-tier FAs Move into private accomplished Target excl. New 2019 Clusters (% of Assets new initiatives1 Target of FAs2 Assets) per FA m/€ Actual 4.5-5.0 3.7-4.3 Wealth 35% c. 803 3.8 Managers 29% 57% Private
Slide 23: Growing Private and More
GROWING PRIVATE AND MORE FOCUS ON EXPANDING GROWTH IN EVERY CLUSTER Family office approach on an industrialized basis Clients growing in every cluster of assets Compelling offer increasingly differentiated in since the launch of new offering order to meet any client need Holistic advisory approach I
Slide 24: Growing in Core New Products
GROWING IN CORE NEW PRODUCTS STRONG ACCELERATION OF LUX IM LUX commercial offer LUX IM total assets 62 +48% YTD sub-funds 9.5 8.7 7.6 6.4 4.9 6.5 6.3 5.8 5.0 Retail 3.9 volumes x2 YTD 2.4 3.0 Fixed income 1.4 1.8 23% 1.0 Equity (DM+EM) 1H18 2018 1Q19 1H19 9M19 43% Equity (Global+Thematic) Retail fun
Slide 25: Growing New Revenue Streams
GROWING NEW REVENUE STREAMS GROWTH TREND ABOVE PLAN New revenue streams m/€ Estimates vs. Target m/€ 8.9 10.0 7.1 50-60 5.1 9M18 2018 9M19 2021E Notional new issues m/€ 159 219 317 300 31.9 27.6 20-25 11.8 14.9 6.7 8.9 9M18 2018 9M19 2021E Assets under advisory bn/€ 2.3 2.3 4.4 5.5-6.0 2017 2018 9M1
Slide 26: 2019-21 Business Plan Guidelines
2019-21 BUSINESS PLAN GUIDELINES FINANCIAL TARGETS 2019-21 Targets I Empowering FAs Cumulated Net Inflows >14.5 bn/€ Total Assets 76-80 bn/€ II Core Net Banking Income1 ≥63 bps Clients’ first choice Core Operating Costs: 3%- 5% CAGR2 III Dividend: 70%-80% pay-out ratio International aspira
Slide 27: Agenda
AGENDA Preliminary remarks Our Mission: 9M 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 28: New Accounting Principles
NEW ACCOUNTING PRINCIPLES DETAILS ON RECONCILIATION * (€ mln) 9M 18 9M 19 % Chg 9M 19 % Chg 9M 19 % Chg 9M 19 % Chg LfL IFRS 15 IFRS 15 / IFRS 16 Reported Net Interest Income 44.2 56.5 27.8% 56.5 27.8% 53.9 21.8% 53.9 21.8% Net income (loss) from trading activities and Dividends 22.1 9.3 -57.8% 9.3
Slide 29: Net Financial Income
NET FINANCIAL INCOME FOCUS ON FINANCIAL ASSETS Banking book and liquidity, bn/€ Maturity (Bond) Duration (Bond) 9.1 1 3.5 1.2 3.2 7.2 Loans to banks & 6.8 2.0 1.7 1.6 other liquidity 1 1.5 1.2 0.9 1.1 0.7 Financial assets 7.9 Total HTCS Total HTCS Total HTCS Total HTCS 5.9 5.7 2018 9M19 2018 9M19 Cl
Slide 30: 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