Slide 1: Investor Presentation 9M 2019 Results
INVESTOR PRESENTATION 9M 2019 RESULTS
Slide 2: Agenda
AGENDA 9M 2019 Results Our Vision: Commercial Results To Be the No.1 Private Strategy & Business update Bank unique by Value of Appendix: Financials Service, Innovation and Sustainability Appendix: Market Positioning Appendix: Sector Trend
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: 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 7: 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 8: 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 9: 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 10: 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 11: 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 12: 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 13: 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 14: Agenda
AGENDA 9M 2019 Results Our Vision: Commercial Results To Be the No.1 Private Strategy & Business update Bank unique by Value of Appendix: Financials Service, Innovation and Sustainability Appendix: Market Positioning Appendix: Sector Trend
Slide 15: Total Assets (1/3): Expansion Close to €10bn YTD
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 16: Total Assets (2/3): Product Mix
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 17: Total Assets (3/3): Lux-based Assets and Advisory
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 18: 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 19: 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 20: Agenda
AGENDA 9M 2019 Results Our Vision: Commercial Results To Be the No.1 Private Bank unique Strategy & Business update by Value of Service, Appendix: Financials Innovation and Sustainability Appendix: Market positioning Appendix: Sector trend
Slide 21: BG Ambitions: 2019-21 Business Plan
BG AMBITIONS 2019-21 BUSINESS PLAN I To consolidate our leading position in empowering the best Financial Advisors Empowering FAs (FAs) in the Italian market To be the Clients’ first choice for quality of II professionals, protection and value of service as well as state-of-the-art digital Clients’
Slide 22: Empowering FAs
EMPOWERING FAS KEY PROJECTS 1 I Ongoing innovation in AM solutions (AUM) LUX IM Multi Discretionary Mandate Illiquid Solutions 2 Implementing Advisory Fee Approach (AUA) Empowering FAs Robot for Advisory solutions WM Approach Vehicle for illiquid assets To consolidate our leading positio
Slide 23: 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 24: Growing in Core New Products (AUM)
GROWING IN CORE NEW PRODUCTS (AUM) 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) Reta
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: Clients' First Choice
CLIENTS’ FIRST CHOICE KEY PROJECTS II 1 Value of service Comprehensive wealth management approach (financial + non-financial assets) Innovative approach to ESG Clients’ first choice 2 Digital Onboarding Digital touchpoints To be the Clients’ first choice for Strengthen open banking approach
Slide 27: 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 28: Innovation in AM Solutions
INNOVATION IN AM SOLUTIONS SUSTAINABILITY AS AN ALTERNATIVE APPROACH TO CLIENTS New proposition for Clients UN sustainable development goals (SDGs) New commercial approach starting from Clients’ need ESG Fund Selection Wide and growing offer: 161 ESG funds with 25 AMs Wide range of investmen
Slide 29: Digital Strategy I
DIGITAL STRATEGY I ENHANCE DIRECT CONNECTION WITH CLIENTS Digital touchpoints & Digital Onboarding & Trading platform: Mobile Banking App Digital payments BG SAXO New Mobile Banking App - innovative Trading Platform: BG SAXO with a customer experience and new features, segmented platform offer w
Slide 30: Digital Strategy II
DIGITAL STRATEGY II INNOVATION TO SUPPORT THE FINANCIAL ADVISOR Wealth Advisory Portal Robo 4 Advisor BG Store Digital Collaboration Deep-dive Analysis: Support FA Daily Activity: Simplicity and Completeness: Paperless Approach: BGPA takes an integrated Technology solution to Complement The advisor
Slide 31: International Aspiration
INTERNATIONAL ASPIRATION KEY PROJECTS III 1 Clients managed from Italy Agreement with custodian banks Advice from current network International aspiration 2 Clients managed from Switzerland Acquisition of Valeur Fiduciaria To create a new long term growth Selective recruiting engine by selec
Slide 32: Growing International
GROWING INTERNATIONAL SWITZERLAND NEW GROWTH ENGINE 1 Clients managed from Italy Advisory- Ready to grow • BG Clients seeking for diversification of booking centers • Agreement with depositary bank expanded • BG Clients with Swiss AUM held with 3rd parties • Tailor-made investment advisory on assets
Slide 33: 2019-21 Business Plan Guidelines: Financial Targets
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 34: Agenda
AGENDA 9M 2019 results Our Vision: Being the Commercial trend No.1 Private Bank Strategy and business update by Value of Service, Appendix: Financials Innovation and Sustainability Appendix: Market positioning Appendix: Sector Trend
Slide 35: 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 36: Net Financial Income: Focus on Financial Assets
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 37: Net Inflows Projections
NET INFLOWS PROJECTIONS EXPECTED CURRENT PERIMETER NET INFLOWS 3.0 3.0 2.9 2.6 2.2 2.2 – 2.4 Organic net 4.2 – 4.8 3.7 - 4.3 BG inflows Saxo bn/€ 2014 2015 2016 2017 2018 2019-21 avg Recruitment (24 months) Out 3.9 Net inflows 2.7 2.1 bn/€ 1.9 2.1 1.5 – 1.9 from FA 4.2 2019-21 avg 2019-21 avg 3.0 2.
Slide 38: Asset Projections
ASSET PROJECTIONS GROWTH TARGETS 2019 - 2021 3.1 - 4.4 1-3 76.0 – 80.0 13.9 - 15.7 12.6 - 14.4 57.5 Total Assets Net Inflows bn/€ Valeur1 Nextam1 2018 Current perimeter Swiss initiative Market 2021E 2019E – 2021E 38 NOTE: Not including potential M&A; 1) Consolidation of acquired Assets
Slide 39: Agenda
AGENDA 9M 2019 results Our Vision: Being the Commercial trend No.1 Private Bank Strategy and business update by Value of Service, Appendix: Financials Innovation and Sustainability Appendix: Market Positioning Appendix: Sector Trend
Slide 40: Banca Generali: A Growth Story
BANCA GENERALI: A GROWTH STORY ONE OF THE FASTEST GROWING COMPANIES IN THE ASSET GATHERING BUSINESS PHASE 1 PHASE 2 New management team Multi-year strategic network repositioning New service model: implementation of and listing on the Italian WM approach and new digital mindset Stock Exchange 66.1 5
Slide 41: Best FAs Quality in the Industry
BEST FAS QUALITY IN THE INDUSTRY CONSTANT GROWTH IN FAS PORTFOLIO Average FAs portfolio (Asset per Financial Advisor) m/€ Best Player ex BG Assoreti (ex BG, ISPB) Banca Generali 32.0 29.0 28.8 25.8 24.3 22.2 25.6 24.3 19.7 23.2 22.0 16.6 18.0 15.9 16.1 15.9 20.7 20.2 15.6 15.8 18.3 18.5 14.5 18.4 16
Slide 42: Market Positioning
MARKET POSITIONING GROWING MARKET SHARE Reference market Size of the market1 Banca Generali’s market share (%) 2008 2013 2018 Italian FAs sector (Assoreti) €584 million1 9.4% 10.4% 13.9% Italian Private Financial Wealth3 €1.079 million2 2.4% 3.0% 5.3% (AIPB) Total Italian Household financial €4.374
Slide 43: Evolution in Market Positioning (1/3)
EVOLUTION IN MARKET POSITIONING (1/3) THE FOURTH LARGEST FA NETWORK Ranking Assoreti 2013 Assoreti 1H 2019 2013- 1H2019 Growth #1 €83.7mld €221.1mld1 + 38%2 (€115.1mld ex-ISPB) #2 €47.2mld €72.9mld + 54 % #3 €36.2mld €65.8mld + 82 % #4 €29.9mld €62.9mld + 116 % + 64 % #5 €29.1mld €48.9mld 43 Source:
Slide 44: Evolution in Market Positioning (2/3)
EVOLUTION IN MARKET POSITIONING (2/3) THIRD LARGEST PRIVATE BANK BY ASSETS Ranking Magstat 2013 Magstat 2018 2013- 2018 Growth #1 €86.2mld €153.2mld + 28 % #2 €81.3mld €91.3mld +6% #3 €38.4mld €40.0mld + 236 % #4 €33.7mld €33.8mld + 0,3% #5 €26.7mld €32.6mld + 22 % … … #16 €11.9mld 44 Source: Magsta
Slide 45: Evolution in Market Positioning (3/3)
EVOLUTION IN MARKET POSITIONING (3/3) SECOND BY BRAND PERCEPTION Ranking Finer 2013 Finer 2019 #1 Peer 1 Peer A #2 Peer 2 #3 Peer 3 Peer B #4 Peer 4 Peer C #5 Peer D … … 45 Source: Finer Survey: Annual market research based on interviews to a nationally representative sample of Finance Advisors of t
Slide 46: Agenda
AGENDA 9M 2019 results Commercial trend Our Vision: Being the No.1 Private Strategy and business update Bank by Value of Appendix: Financials Service, Innovation and Sustainability Appendix: Market Positioning Appendix: Sector Trend
Slide 47: Snapshot on Italian Household Wealth
SNAPSHOT ON ITALIAN HOUSEHOLD WEALTH A WEALTHY COUNTRY Italian Household Wealth Italian Total Net Household Wealth (€ trillion, 2008-18E) 12.0 Total Italian household wealth at €9.8 trillion1 9.4 9.5 9.5 9.5 9.7 9.7 9.7 9.7 9.6 9.8 with real-estate assets representing 59% of 10.0 total and financi
Slide 48: Snapshot on Italian Household Wealth: Financial Assets
SNAPSHOT ON ITALIAN HOUSEHOLD WEALTH HOUSEHOLD FINANCIAL ASSETS Italian Household Wealth Financial Assets: Managed vs. Non-managed (2008-2017, €tr) 4.0 4.4 2008-17 Managed asset 3.8 CAGR (Mutual funds + 0.9 1.1 1.5 +1.7% Steady growth of managed assets (mutual Life Reserves) +5.8% funds and insura
Slide 49: Snapshot on Italian Total Wealth
SNAPSHOT ON ITALIAN TOTAL WEALTH FINANCIAL WEALTH PROJECTIONS Italian Household Wealth Italian Household: disposable income & Household Italian Household Financial Assets (€bn, 2016-21E) consumption (YoY change,%) and saving rate on disposable income (%) 4,218 4,374 4,210 4,528 8.3 8.2 7.6 7.3 1.1%
Slide 50: FA Sector
FA SECTOR SIZE AND MARKET SHARE MORE THAN DOUBLED FA SECTOR (ASSORETI) Total Assets (€bn) 584 519 514 12.2% of Italian Household financial wealth 471 434 106 managed by the FA sector 101 99 93 89 Market share doubled in the last 10 years 418 478 378 415 203 220 236 231 257 279 315 345 Business
Slide 51: FA Sector: Transition Towards Greater Quality
FA SECTOR TRANSITION TOWARDS GREATER QUALITY ACCOMPLISHED FA SECTOR (ASSORETI) 23.1 23.0 20.6 AVERAGE INDUSTRY PORTFOLIO 19.2 3.7 3.6 In the aftermath of the Global 3.4 Financial Crisis, the Italian 3.4 3x Financial Advisory industry 15.8 17.2 19.4 19.4 entered a restructuring phase 14.5 with the
Slide 52: Italian Private Banking
ITALIAN PRIVATE BANKING SIZE AND CLUSTER OF CLIENTS Private household financial wealth - AIPB (clients with assets >€500k) (€bn) Private Banking assets on total Household financial assets1 1,080 1,079 25% 985 1,017 1,029 955 882 904 859 859 75% Clients with assets > €500K Clients with assets < €500K
Slide 53: Disclaimer & Contacts
DISCLAIMER & CONTACTS 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,