Banca Generali S.p.a. · MIL:BGN
Banca Generali — Q1 2018 Earnings Presentation
31 slides from Banca Generali's earnings presentation, Apr 23, 2018
Slide 1: 1Q 2018 Results
1Q 2018 RESULTS 23 APRIL 2018 SY BANCA dios. GENERALI
Slide 2: Agenda
AGENDA Preliminary remarks 1Q 2018 results Net Inflows, assets and recruiting Business update 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY NET INFLOWS Solid inflows in a more challenging financial set €1.6bn (-14% yoy) Net inflows at €1.6bn with a more defensive mix reflecting market conditions Total assets at €56.4bn (+13%YoY, +1%YTD), managed assets at 77% TOTAL ASSETS In the 12 months since inception Assets u
Slide 4: 1Q 2018 Results: Key Takeaways
1Q 2018 RESULTS: KEY TAKEAWAYS (€ m) 1Q17* 1Q18 % Chg BANKING INCOME (reported -7%, adjusted +20%) Net Interest Income 15.7 13.2 -15.9% Net income (loss) from trading activities and Dividends 3.4 15.2 352.9% Net Financial Income 19.1 28.5 49.1% Gross fees 192.4 182.4 -5.2% Net financial income (+49%
Slide 5: Net Profit
NET PROFIT POSITIVE RECURRING TREND ALMOST OFFSETTING WEAK FINANCIAL MARKETS NET PROFIT DEVELOPMENT 56.2 4.5 0.4 49.0 (3.4) (0.3) (23.3) Cost discipline No relevant write- off position Higher tax-rate 17.4 17.2 40.8 (2.5) Unfavourable YoY comparison partially Resilient business offset by higher mix
Slide 6: Adjusted Net Profit
ADJUSTED NET PROFIT STEADY INCREASE ADJUSTED NET PROFIT TREND 31.8 28.2 25.0 21.3 18.8 19.3 19.7 15.4 11.9 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q 2018 best quarter for recurring profit 6
Slide 7: Agenda
AGENDA Preliminary remarks 1Q 2018 results Net Inflows, assets and recruiting Business update 7
Slide 8: Revenues: Net Financial Income
REVENUES: NET FINANCIAL INCOME QUARTERLY RESULT DRIVEN BY DE-RISKING STRATEGY NET FINANCIAL INCOME 28.5 De-risking of the banking book driving 1Q18 net financial income upwards (+49%) on high 19.1 18.3 realised trading gains 15.2 3.4 4.0 (m/€) 15.7 14.3 13.2 Spike in liquidity (€1.1bn) linked to de-
Slide 9: Revenues: Net Fee Income
REVENUES: NET FEE INCOME FEE BREAKDOWN 135.3 158.1 +16% 14.3 16.7 42.8 7.6 Total Net Fees +17% -82% 103.4 85.6 42.8 7.6 Management fees Entry & banking fees Performance fees 78.0 60.6 +29% -23.8 -21.8 -9.9 -10.8 -55.3 -64.1 +16% -9% +10% (€ m) 1Q17 1Q18 Performance fees Net recurring fees Fee expens
Slide 10: Pay-out to FAs
PAY-OUT TO FAS BUSINESS FLEXIBILITY WORKS PAY-OUT TO FAs Flexibility of the business model -3.6 p.p. lead pay-out to FAs down to 49.2% (-3.6 p.p.) 52.8% 49.2% -3.4 p.p. Cost of growth significantly lower (€21.8m, 15.9% 12.5% -9%) as a result of lower inflows in -0.2 p.p. managed products and lower r
Slide 11: Revenues: Management Fees & Margin
REVENUES: MANAGEMENT FEES & MARGIN QUARTERLY TREND MANAGEMENT (M/€) 116.7 135.3 144.7 150.6 156.5 158.1 FEES 107.6 116.1 116.9 118.6 120.4 125.2 130.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 TOTAL AVG. MANAGED 52.9 54.8 56.3 (bn/€) 43.2 44.8 46.2 49.0 51.2 38.3 39.8 39.8 40.
Slide 12: Revenues: Other Fees
REVENUES: OTHER FEES QUARTERLY TREND 10.5 10.3 FRONT 7.6 5.5 5.8 5.0 (M/€) 3.9 4.4 4.6 4.7 FEES 3.6 3.6 3.7 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 BANKING 11.6 11.6 (M/€) 9.8 9.5 9.2 9.9 FEES 6.8 7.5 6.2 7.1 6.1 8.8 8.2 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Slide 13: Breakdown of Annualised Fee-Margin
BREAKDOWN OF ANNUALISED FEE-MARGIN GROSS MARGINS MANAGEMENT FEES ENTRY FEES 1.16 1.11 1.12 1.13 1.12 1.07 0.11 0.11 0.08 0.04 0.04 0.03 (%) (%) 2013 2014 2015 2016 2017 1Q18 2013 2014 2015 2016 2017 1Q18 BANKING FEES AND TRADING PERFORMANCE FEES 0.32 0.12 0.10 0.22 0.08 0.07 0.07 0.08 0.18 0.16 0.15
Slide 14: Operating Costs Breakdown
OPERATING COSTS BREAKDOWN COST DISCIPLINE CONFIRMED Total operating costs COST BREAKDOWN 22.5 20.7 17.7 46.9 16.5 -8% 46.5 -1% +7% -19% +32% +19% 4.3 3.4 (M/€) 2.0 2.7 1.7 2.0 Non-sales personnel Sales personnel BRRD & FITD funds Depreciation General expenses 1Q17 1Q18 costs costs (net of stamp duti
Slide 15: Cost Ratios
COST RATIOS OPERATING LEVERAGE OPERATING COSTS/TOTAL ASSETS COST-INCOME RATIO 59.0% 0.54% 0.51% 53.4% 53.9% 52.6% 52.3% 51.1% 0.45% 46.5% 0.42% 0.38% 42.5% 40.3% 41.0% 39.9% 0.34% 39.3% 0.33% 38.1% 39.0% 2012 2013 2014 2015 2016 2017 1Q18 2012 2013 2014 2015 2016 2017 1Q18 Reported Cost/Income Adjus
Slide 16: Solid Capital Position
SOLID CAPITAL POSITION CAPITAL RATIOS FURTHER IMPROVING CET1 RATIO TOTAL CAPITAL RATIO 20.3% 1.8% 22.0% 1.8% 20.2% 18.5% 6.5% 10.2% 2017 1Q18 2018 SREP 2017 1Q18 2018 SREP requirements requirements EXCESS CAPITAL LEVERAGE RATIO 43 357 0.3% 5.6% 314 5.3% (m/€) 2017 1Q18 2017 1Q18 SREP requirements: M
Slide 17: Agenda
AGENDA Preliminary remarks 1Q 2018 results Net Inflows, assets and recruiting Business update 17
Slide 18: Total Assets
TOTAL ASSETS RESILIENT TREND TOTAL ASSETS BREAKDOWN OF MANAGED SOLUTIONS 55.7 56.4 28.0 28.2 50.1 23.6 5.5 5.1 28.0 28.2 5.8 23.6 8.1 8.5 6.1 15.0 7.1 7.2 14.6 14.9 5.5 (BN/€) 6.2 7.3 7.4 11.9 12.8 13.2 1Q17 2017 1Q18 1Q17 2017 1Q18 Banking products Traditional life policies Managed solutions Insura
Slide 19: Net Inflows
NET INFLOWS MORE DEFENSIVE PRODUCT MIX TOTAL NET INFLOWS NET INFLOWS IN MANAGED SOLUTIONS 1.8 1.6 1.5 0.6 0.8 0.8 1.5 0.6 0.5 0.2 0.2 0.4 0.3 0.6 -0.1 -0.2 0.3 1Q17 1Q18 (bn/€) (bn/€) 1Q17 1Q18 Banking products Traditional life policies Managed solutions Insurance wrappers Financial wrappers Funds/S
Slide 20: Recruiting Activity
RECRUITING ACTIVITY CONTRIBUTING TO A WELL-BALANCED GROWTH No. OF NEW RECRUITS TOTAL No. OF FINANCIAL ADVISORS 8 (15) 1,974 161 153 45 126 1,936 102 81 122 94 Senior Recruit Junior Recruit 92 59 50 75 45 2017 YE IN OUT 1Q 2018 31 59 31 31 27 34 39 28 RECRUITING TREND BY QUARTER 14 2013 2014 2015 201
Slide 21: Agenda
AGENDA Preliminary remarks 1Q 2018 results Net Inflows, assets and recruiting Business update 21
Slide 22: Strategic Pillars
STRATEGIC PILLARS FOCUS ON PRODUCTS AND SERVICES AVG. FA’s AUM PER CAPITA BG Assoreti QUALITY – Profile moving private Quality of FA CLIENTS– Clear private banking upswing network 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1-17 PRODUCTIVITY – Holistic approach PRODUCTS – Ongoing evolution WE
Slide 23: New Initiatives: Rationale
NEW INITIATIVES RATIONALE ADVISORY CERTIFICATES Wealth management approach Asset diversification Increasing clients’ share of wallet Improving profitability of AUC Improving profitability of AUC/single funds Increasing revenue diversification Increasing revenue diversification Widening range and qua
Slide 24: New Initiatives: Advisory
NEW INITIATIVES Advisory Certificate s ADVISORY CONTRACT LUX IM SAXO ASSETS UNDER ADVISORY ASSETS UNDER ADVISORY (Volumes) (% of tot. assets) (BN/€) 5.0 12% 7% 1.3 1.7 2% 3% 0.3 1% 2Q 2017 2017 YE 1Q 2018 Target 2021 2Q17 2017 YE 1Q 2018 Target 2021 AIPB as of 2017 YE Strong interest in the service
Slide 25: New Initiatives: Certificates
NEW INITIATIVES Advisory Certificates STRUCTURED PRODUCTS LUX IM SAXO STRUCTURED STRUCTURED PRODUCTS ISSUED PRODUCTS ISSUED ON TOTAL ASSETS (Volumes) 0.70% 50 (M/€) 42 0.20% 0.08% 0.09% FY 2017 1Q 2018 FY 2017 1Q 2018 Target AIPB as of 2017 YE FY 2017 1Q 2018 Target AIPB as of 2017 YE Volumes of cer
Slide 26: New Initiatives: LUX IM (1/2)
NEW INITIATIVES Advisory Certificatess LUX IM (1/2) LUX IM SAXO Rationale Assets 2014 Customisation €7.4bn Launch of insurance wrapper Insurance covers BG Stile Libero Operational efficiency Estate planning 2016 Customisation Launch of financial wrapper Diversification €7.2bn BG Solutions Operationa
Slide 27: New Initiatives: LUX IM (2/2)
NEW INITIATIVES Advisory Certificates LUX IM (2/2) LUX IM SAXO First Wave – 1 April, 2018 Second Wave – 4Q 2018 Timeline • BG Sicav (SF) merged into LUX IM • 20 additional investment lines • 38 investment lines available FIXED INCOME (13) LIQUID ALT (4) MULTIASSET (6) EQUITY (15) Long-Term Short dur
Slide 28: BG Saxo - Waiting for the Authority Approval
NEW INITIATIVES Advisory Certificates BG SAXO - WAITING FOR THE AUTHORITY APPROVAL LUX IM SAXO • Strategic gap filling - BG’s current trading offer requested to evolve in line with the objectives and standing of the Bank, both in terms of negotiable instruments and user experience • Large market - M
Slide 29: Closing Remarks
CLOSING REMARKS ON TRACK TO YEAR-END TARGETS NET INFLOWS WRAPPERS & LUX IM Target 2018: Target 2018: 2.5 19 April 2018: 4.0 1.9 19 April 2018: (Bn) 0.7 (Bn) ASSETS under ADVISORY RECRUITING Target 2018: Target 2018: 2.3 120-140 19 April 2018: 19 April 2018 1.8 48 Dec. 2017: 1.3 (Bn) 29
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 a
Slide 31: 2018 Upcoming Events; Investor Relations Contacts
2018 UPCOMING EVENTS JULY Investor Relations Su Mo Tu We Th Fr Sa Contacts 1 2 3 4 5 6 7 Giuliana Pagliari 8 9 10 11 12 13 14 Investor Relations Manager Phone +39 02 6076 5548 15 16 17 18 19 20 21 1H 2018 results Mobile +39 331 65 30 620 22 23 24 25 26 27 28 Investor Conference call E-mail: giuliana