Banca Generali S.p.a. · MIL:BGN
Banca Generali — FY2021 Earnings Presentation
27 slides from Banca Generali's earnings presentation, Feb 10, 2022
Slide 1: Preliminary 2021 Results
PRELIMINARY 2021 RESULTS 10 FEBRUARY 2022
Slide 2: Agenda
AGENDA Preliminary remarks Our Vision: To Be the No.1 Private Bank 2021 Financial Results unique by Value of Service, Innovation Net Inflows, Assets and recruiting and Sustainability 2
Slide 3: 2021 Results: Executive Summary
2021 RESULTS: EXECUTIVE SUMMARY Best ever commercial results for both product mix and volumes Total assets at €85.7bn (+15%) with a strong trend for managed solutions (€44.3bn, +18%) and growing ESG component Net inflows at €7.7bn (+31%), with managed solutions accounting for 69% of total (€5.3b
Slide 4: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mil) 12M 20 12M 21 % Chg Sound Banking Income (+26%) Net Interest Income 89.6 83.3 -7.0% Net income (loss) from trading activities and Dividends 19.9 28.7 43.8% Total revenues increased double-digit driven by: Net Financial Income 109.6 112.0 2.2% High
Slide 5: Recurring Net Profit (1/2)
RECURRING NET PROFIT (1/2) EARNINGS’ QUALITY AND SUSTAINABILITY STEADILY GROWING Recurring Net Profit m/€ 176.6 Recurring net 148.6 153.8 profit increased by 3x since 2014 and 133.1 Almost 2.0x since 2017 90.0 Asset growth and 75.0 new revenue 70.7 streams more than 53.4 offset 2018-2020 product reb
Slide 6: Recurring Net Profit (2/2)
RECURRING NET PROFIT (2/2) STRONG BUSINESS MOMENTUM DRIVING RECURRING RESULTS HIGHER Build up of recurring net profit m/€ Operating items Non operating items Strong operating items reflecting +58.7 (35.9) positive business momentum for asset growth and product mix supported by a tight cost disciplin
Slide 7: Agenda
AGENDA Preliminary remarks Our Vision: To Be the No.1 Private Bank 2021 Financial Results unique by Value of Service, Innovation Net Inflows, Assets and recruiting and Sustainability 7
Slide 8: Net Financial Income (1/3)
NET FINANCIAL INCOME (1/3) VOLATILITY AT QUARTERLY LEVEL Net financial income m/€ 112.0 Trading income Net Financial Income increased 109.6 NII by +2.2% YoY. The result 19.9 benefitted from €11.0m of one-off 88.2 28.7 trading gains from the disposal of 14.2 fixed income securities related to the por
Slide 9: Net Financial Income (2/3)
NET FINANCIAL INCOME (2/3) INVESTMENT PORTFOLIO WELL-PLACED FOR AN INCREASE IN RATES Total Assets and Interest-bearing Assets bn/€ Portfolio Classification Bond Classification 16.2 4% 14% It Govt bonds 13.2 2.0 Equity & 11.8 alternative EU Govt bond 1.0 2 2.4 Investments 32% 54% 1.2 2.2 96% Corporat
Slide 10: Net Financial Income (3/3)
NET FINANCIAL INCOME (3/3) STEADILY GROWING LOAN PORTFOLIO Total Assets and Interest-bearing Assets bn/€ 2021 Credit Book bn/€ Lending Quality % 1.3 • Non performing 16.2 0.5 loans (NPL) include: bad loans, Unlikely to 13.2 2.0 0.3 pay and past due 11.8 1.6 loans 1.0 2 2.4 98.7 • 100% are 1.2 2.2 co
Slide 11: Gross Fees (1/3)
GROSS FEES (1/3) GROWING RECURRING COMPONENT DRIVEN BY BOTH MANAGED ASSETS AND OTHER FEES Gross recurring fees m/€ Variable fees m/€ 942.7 782.4 Management fees Other (banking and entry) fees 220.5 221.1 228.1 239.2 254.3 207.1 141.8 111.0 41.4 54.0 31.6 24.0 2020 2021 4Q20 1Q21 2Q21 3Q21 4Q21 2020
Slide 12: Management Fees (2/3)
MANAGEMENT FEES (2/3) SIZEABLE SPIKE IN MANAGEMENT FEE MARGIN DRIVEN BY PRODUCT MIX Management Fees m/€ Quarterly trend m/€ +19% 804.3 217.4 206.4 187.4 193.1 Management fee 178.6 acceleration driven by Management 675.4 Fees asset growth, 646.3 m/€ improvement in asset 4Q20 1Q21 2Q21 3Q21 4Q21 mix a
Slide 13: Banking and Entry Fees (3/3)
BANKING AND ENTRY FEES (3/3) NEW REVENUE STREAMS STEADILY TRENDING HIGHER Banking and Entry Fees m/€ Breakdown by product mix +29% 138.3 Entry fees Banking fees 138.3 106.9 106.9 42.7 87.3 +32% 79.4 87.3 32.4 60.1 +30% 28.8 46.3 36.8 95.6 33.7 35.0 32.8 +14% +26% 74.6 28.5 58.9 58.5 9.2 11.5 10.1 12
Slide 14: New Revenue Streams
NEW REVENUE STREAMS REVENUE DIVERSIFICATION ACCOMPLISHED Assets under advisory (AuA) bn/€ 7.3 33.1 6.0 24.9 ADVANCED ADVISORY 4.7 16.9 Combined new revenue streams at €79m (+32% YoY) were 3x higher since the start 2019 2020 2021 2019 2020 2021 of the plan Notional new issues m/€ Advanced advisory an
Slide 15: Fee Expenses
FEE EXPENSES PAY-OUT RATIO REMAINS IN A TIGHT RANGE Total Fee Expenses m/€ Pay-out to the network % 495.9 47.8% 47.4% 46.7% Pay out to the network decreased benefitting 416.1 55.6 from business scalability 391.2 36.0 36.0 35.7 Fee expenses and improved business to Third-parties 45.5 103.4 40.5 0.5 m
Slide 16: Operating Costs (1/2)
OPERATING COSTS (1/2) COST DISCIPLINE CONFIRMED EVEN INCLUDING RECENT M&A Total operating costs m/€ Breakdown of ‘Core’ operating costs m/€ +6.6% +4.9% Cost discipline 242.3 227.2 confirmed (both 212.9 7.6 214.1 4.7 20.7 204.0 headline and ‘core’) 5.1 18.6 paving the way for 34.5 16.8 32.1 strong op
Slide 17: Operating Costs (2/2)
OPERATING COSTS (2/2) COST RATIOS Operating costs/Total assets Cost/Income ratio 53.4% 53.9% 52.6% 52.3% 51.1% 0.51% 44.3% 0.45% 42.3% 38.9% 40.3% 41.0% 39.6% 40.2% 0.40% 36.2% 40.0% 35.8% 0.37% 31.5% 0.33% 0.33% 30.9% 26.5% 0.31% 0.30% 0.28% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 20
Slide 18: 2021 Dividend Proposal
2021 DIVIDEND PROPOSAL KEEPING THE BAR STEADY WITH DIVIDENDS Payout ratio and DPS (accounting view) € DPS (cash-view) € Pro-forma for the €3.30 cumulative 2019-20 DPS 2018 2019-20 2021 80.0% 70.5% 70.5% 2.70 70.5% pay-out on 2021 earnings, resulting in €1.95 DPS proposal to AGM to be paid in two tra
Slide 19: Capital Position
CAPITAL POSITION STRONG CAPITAL POSITION INCLUDING DIVIDEND DISTRIBUTION CET1 ratio TCR ratio 18.4% (1.0%) 17.1% (0.8%) 17.4% Capital ratios confirmed at 16.3% solid levels despite higher capital absorption with reference to: i) higher volumes at both financial assets (banking book) and loan portfol
Slide 20: Agenda
AGENDA Our Vision: Preliminary remarks To Be the No.1 Private Bank 2021 Financial Results unique by Value of Service, Innovation Net Inflows, Assets and recruiting and Sustainability 20
Slide 21: Total Assets
TOTAL ASSETS EXPLOITING ALL TAILWINDS FOR VOLUMES AND MIX Total Assets bn/€ Managed Solutions bn/€ +15.1% 85.7 44.3 37.4 74.5 34.0 10.4 69.0 In-House funds 7.2 8.8 Third-party funds 13.2 Managed solutions (funds 44.3 9.7 10.8 and wrapper solutions) Financial wrappers 37.4 9.4 increased to 51.6% of t
Slide 22: BG FML – Lux Assets
BG FML – LUX ASSETS STEADY GROWTH DRIVEN BY THE RETAIL COMPONENT BG FML - Assets by SICAV bn/€ WAP1 of BG FML 119.1 21.4 114.3 18.7 0.3 110.4 LUX IM stands at 77% of 107.4 total LUX based assets 16.9 4.6 0.3 101.7 (+5.9bn over last three 100 101.6 0.3 years) 5.0 6.0 97.7 2014 2015 2016 2017 2018 201
Slide 23: Strong Net Inflows
STRONG NET INFLOWS RECORD HIGH NET INFLOWS WITH HIGH QUALITY PRODUCT MIX Total Net Inflows bn/€ Managed solutions bn/€ 7.7 Managed solutions +31.0% 5.3 growing as fast as total +66.7% net inflows representing 5.9 1.5 69% of total 5.1 5.3 3.2 1.9 1.4 Wrapper solutions (€2.4bn, 1.9 3.2 +135%) emerged
Slide 24: Net Inflows Driven by Existing FAs
NET INFLOWS DRIVEN BY EXISTING FAS 2021 SPIKE IN CONTRIBUTION FROM ORGANIC GROWTH Net inflows by acquisition channel, bn/€ Recruiting trend, # of new recruits Existing network 7.7 123 generated 75% of total net inflows with an 5.9 2.3 implied volume of 5.1 €5.8bn (+27%). 86 70 1.6 72 1.4 Recruiting
Slide 25: Financial Advisor Network
FINANCIAL ADVISOR NETWORK STEADY GROWTH BY SIZE AND QUALITY Financial Advisor Network, No. of FAs FA Network, by portfolio size and skills (% of Assets) No. of FAs Assets per FA 2,162 Clusters m/€ 2 2,087 2,040 1,985 1,936 1,841 Wealth Managers 35% 3521 95.8 1,715 Financial Advisors 1,645 (PTF>€50m)
Slide 26: January 2022 Commercial Results
JANUARY 2022 COMMERCIAL RESULTS SOLID TREND DESPITE A SHARP INCREASE IN VOLATILITY OF FINANCIAL MARKETS Total net inflows m/€ Managed solutions, m/€ Assets under Advisory bn/€ Volumes bn/€ 0.5 7.1 0.2 0.2 0.2 0.03 0.4 6.2 0.1 0.1 0.2 0.01 Jan.21 Jan.22 0.4 0.2 0.1 0.1 No of clients of advanced advis
Slide 27: Disclaimer
DISCLAIMER Certain statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. The user of such information should recognize t