Finecobank Spa · MIL:FBK
Finecobank Spa — Finecobank Banca Fine — Q2 2023 Earnings Presentation
50 slides from Finecobank Spa's earnings presentation, Aug 1, 2023
Slide 1: 2Q23 Results
2Q23 Results Alessandro Foti CEO and General Manager Milan, August 1st 2023 FINECO. SIMPLIFYING BANKING.
Slide 2: Disclaimer
Disclaimer ◼ “Pursuant to the paragraph 2 of Article 154 bis of the Consolidated Law on Financial Intermediation (Legislative Decree no. 58 of February 24, 1998), Lorena Pelliciari, in her capacity as manager responsible for the preparation of FinecoBank S.p.A. (the “Company”)’s financial reports, d
Slide 3: Agenda: Fineco Financial Results
Agenda ✓Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ❑ Fineco international business ❑ Key messages 3
Slide 4: Executive Summary
Executive Summary Successful growth story: becoming more a Platform than a Bank. Our diversified business model allows us to deliver strong results in every market condition Strong net profit and operating leverage Solid capital and liquidity position ◼ CET1 ratio at 23.20%,TCR at 34.04%, Leverage r
Slide 5: Delivering strong Net Profit in every market condition
Delivering strong Net Profit in every market condition Adj. Net Profit at 308.9mln, +38.8% y/y boosted by strong acceleration of Investing, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed 1H22 1H23 1H23/ mln Revenues Adj. (1) Adj. (1) 1H
Slide 6: Our priority: accelerating on Investing
Our priority: accelerating on Investing Improving margins thanks to the higher control on the Investing value chain through FAM Investing revenues increasing thanks to volume effect and FAM Investing Revenues, mln +7.6% +4.8% 156.2 mln 2Q22 1Q23 2Q23 1H22 1H23 149.1 +8.9% Investing 75.7 74.8 81.4 14
Slide 7: Focus on FAM: delivering on the strategic discontinuity
Focus on FAM: delivering on the strategic discontinuity Key to sustain AUM margins thanks to its strong operating leverage and to a more efficient value chain FAM progressively taking control of the value chain… …and becoming the cornerstone of our Investing bn bn FAM RETAIL NET SALES FAM AUM STOCK
Slide 8: Brokerage: higher floor as the structure of the market is changing
Brokerage: higher floor as the structure of the market is changing Increased interest in financial markets by clients and big jump into a more digitalized society Structural growth in revenues: the floor has gone up in a clear way in any market environment Avg monthly revenues 2017-2019 FTSE MIB mon
Slide 9: Brokerage: focus on revenues generation vs peers
Brokerage: focus on revenues generation vs peers More resilient revenues generation vs peers thanks to better quality target market Brokerage revenues: FBK best performing in challenging market environment Fineco (mln euro) Peer1 (mln sek) -11.0% -27.1% -10.0% -18.3% 213.9 190.4 2,220.5 1,619.2 107.
Slide 10: High quality lending
High quality lending Offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics Commercial Loans Portfolio, eop mln Cost of Risk on commercial loans (2) Current accounts/Overdraft (1) Cards 5 bps Personal loans Mortgages 4 bps 2 bps -0.3% Jun.22 Mar.23 Jun.23
Slide 11: Solvency, liquidity ratios
Solvency, liquidity ratios Capital position well above requirements and expected to grow Current Jun.22 Mar.23 Jun.23 (€/bn) Jun.22 Mar.23 Jun.23 Requirement CET1 Ratio 19.14% 21.80% 23.20% 8.04% CET1 Capital 0.93 1.03 1.07 SOLVENCY Total Capital Ratio 29.45% 32.41% 34.04% 12.31% Tier1 Capital 1.43
Slide 12: Very strong liquidity ratios
Very strong liquidity ratios LCR NSFR LCR – 12months average 785% 384% 126% 164% FBK avg EBA FBK avg EBA Fineco as of Jun.23; avg EBA as of Mar.23 Fineco Jun.23; avg EBA as of Mar.23 HQLA/Deposits 64% FBK HQLA: €19.4 bn as of June 2023 Average (12 months avg) 38% 48% 50% 50% 45% 42% 40% 40% 38% 40%
Slide 13: Agenda: Fineco Commercial Results
Agenda ❑ Fineco Financial Results ✓Fineco Commercial Results ❑ Next steps ❑ Fineco international business ❑ Key messages 13
Slide 14: Clients' acquisition: strong acceleration in our organic growth
Clients’ acquisition: strong acceleration in our organic growth Keeping on enjoying the secular growth trends and improving the marketing efficiency thanks to Big Data Analytics Strong acceleration in our organic new clients’ acquisition metrics Thd, # New clients y/y growth 60.1 Strong new clients
Slide 15: Clients' profile and focus on Private Banking
Clients’ profile and focus on Private Banking Improving the quality of our client base Avg TFA per Private client(1) € bn, TFA Client segmentation AuM AuC Deposits 0.5-1mln 115.9 8.8% 107.9 106.6 1-5mln 8.4% 1.0mln 91.7 35.7% 5-10mln 81.4 45% Level of deposits is 69.3 45% 42% 42% 47.1% >10mln gettin
Slide 16: TFA and Net Sales evolution
TFA and Net Sales evolution Successful shift towards high added value products thanks to strong productivity of the network Breakdown of total TFA, bn Breakdown of total Net Sales, bn AUM since the end of 2014: 115.9 Jul.23 (est.) total Net Sales: 0.5bn +133.3% 107.9 106.6 33% 30% 10.7 10.3 91.7 27%
Slide 17: Net sales organically driven key in our strategy of growth
Net sales organically driven key in our strategy of growth The structure of recruiting is changing: more interest in the quality of the business model by PFAs Total Net Sales, bn – Organic / Recruit, % Total recruits Organic Total recruits Organic New PFAs recruited in the year PFAs recruited over t
Slide 18: Best PFAs productivity among main asset gatherers
Best PFAs productivity among main asset gatherers Fineco confirms to be the perfect partner for professionals looking to grow in a sustainable way AUM Net Sales June 2023 YTD, € bn AUM Net Sales per PFA, € mln 1.9 0.7 1.5 0.3 0.3 0.6 0.3 0.01 -0.3 Fineco Peer1 Peer2 Peer3 Assoreti -1.8 ex. Fineco Fi
Slide 19: Deep dive on our transactional liquidity
Deep dive on our transactional liquidity Our business model has fully fledged banking platform used by all our clients for their daily activities Granular and retail deposit base, very sticky thanks to the quality of our customer experience 98% Retail clients 50% Salary credited in current accounts
Slide 20: Focus on net inflows and stickiness of deposits
Focus on net inflows and stickiness of deposits Deep diving on liquidity transformation Balance of bank transfers firmly positive Breakdown of Total Net Sales, € bn 1H23: AuM AuC Deposits 5.2 +6.0bn net 1.9 1.1 0.9 0.2 0.8 0.7 0.8 0.9 5.3 0.2 0.2 0.5 1.6 0.3 0.7 1.0 0.8 0.9 0.8 0.3 -0.3 -0.4 -0.6 -0
Slide 21: Agenda: Next steps
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ✓Next steps ❑ Fineco international business ❑ Key messages 21
Slide 22: 2023 Guidance and outlook going forward
2023 Guidance and outlook going forward Our diversified business model key to successfully deal with the current volatile environment ◼ BANKING REVENUES: ➢ Net financial income (NFI: net interest income + Profit from Treasury management) ◼ OPERATING COSTS expectations: expectations(1): For FY23: gro
Slide 23: Innovation and Simplification Project
Innovation and Simplification Project Further simplifying clients’ user experience thank to easy-to-use new tools and a more efficient marketing engine. The renewed platform will be the cornerstone of our International offer BROKERAGE INVESTING BANKING ✓New Trading Pages. Coming soon: new order entr
Slide 24: Agenda: Fineco international business
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ✓Fineco international business ❑ Key messages 24
Slide 25: Fineco international business
Fineco international business Focusing our offer on a simplified digital model through a brand new, highly scalable and multilanguage platform for investments UK: business growing with marketing expenses on hold Next steps Marketing expenses on hold as we are dialoguing with the ➢ Once discussions w
Slide 26: Agenda: Key messages
Agenda ❑ Fineco Financial Results ❑ Fineco Commercial Results ❑ Next steps ❑ Fineco international business ✓Key messages 26
Slide 27: Long term sustainability at the heart of Fineco business model (1/2)
Long term sustainability at the heart of Fineco business model (1/2) We are a looking-forward organization playing for the long-run and able to generate a positive impact for all our stakeholders and the society as a whole Fineco corporate purpose: support clients in the responsible management of th
Slide 28: Long term sustainability at the heart of Fineco business model (2/2)
Long term sustainability at the heart of Fineco business model (2/2) We are a looking-forward organization playing for the long-run and able to generate a positive impact for all our stakeholders and the society as a whole Strategy & Goals Initiatives & KPIs ✓ FOCUS on Cyber-Security and ESG risks l
Slide 29: Fineco as a profitable FinTech Bank: ICT a key business driver
Fineco as a profitable FinTech Bank: ICT a key business driver Leveraging on a deep-rooted internal know-how to expand platform scalability and operating gearing 1 2 3 4 SIMPLICITY OMNICHANNEL BIG-DATA TIME TO MARKET & CUSTOMIZATION Client front-ends are built IT provides a seamless user Data manage
Slide 30: Healthy and sustainable growth with a long term horizon
Healthy and sustainable growth with a long term horizon Highly scalable operating platform… 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGR (2014-2022) + 10% 108 107 92 69 81 60 67 1,428 1,487 + 6% TFA (bn) 49 55 1,358 1,370 1,278 1,200 461 Clients (thd, #) 964 1,048 1,118 376 + 15% 284 342 226 25
Slide 31: Annex
Annex 31
Slide 32: P&L pro-forma
P&L pro-forma P&L pro-forma(1) mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 1H22 1H23 Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 176.4 328.3 o/w Net Interest Income 59.3 67.6 84.3 131.6 342.8 157.4 170.8 127.0 328.2 o/w Profit from treasury management 48.1 1.3 0.0 0.0 49.4 0.0 0.1 49.4 0
Slide 33: P&L net of non recurring items
P&L net of non recurring items P&L pro-forma(1) net of non recurring items 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 1H22 1H23 mln Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) Net financial income 107.5 68.9 84.2 131.6 392.2 157.4 170.8 176.4 328.3 o/w Net interest incom
Slide 34: 1H23 P&L FinecoBank and Fineco Asset Management
1H23 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net financial income 0.3 328.0 328.3 Dividends 0.0 29.6 0.0 Net commissions 73.5 168.6 242.1 Trading profit 0.0 30.1 30.1 Other expenses/income -0.3 0.7 0.2 Total revenues 73.5 5
Slide 35: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 1H22 1H23 Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 40.5 27,303 47.2 28,790 60.5 28,604
Slide 36: Net financial income: focus on financial investments
Net financial income: focus on financial investments Transactional liquidity invested in a diversified portfolio Bond Portfolio (nominal value) (1) (2) € bn, eop UC bonds Italy Spain Other Govies SSA Covered & Corporate 23.2 1.0 Bond portfolio Nominal value: 23.2 bn: 6.2 ▪ o/w 60% at fixed rate, avg
Slide 37: Focus on Bond portfolio
Focus on Bond portfolio Bond portfolio run-offs, eop bn (1) Fixed rate bonds Floating and swapped bonds (1) Avg yield of fixed rate bonds, bps Avg spread vs EUR 3M of floating and swapped bonds, bps UC bonds UC Bonds avg spread vs Eur3M, bps 3.0 3.1 3.1 2.8 2.8 2.3 1.8 1.6 1.6 1.6 1.6 1.7 2.0 1.9 1.
Slide 38: New interest rates environment
New interest rates environment ➢ Below a comparison of the forward rate curve behind the guidance to the market during the 1Q23 and 2Q23 conference calls 2023 2024 as of as of as of as of 08/05/23 28/07/23 08/05/23 28/07/23 Euribor 1M AVG 3.20% 3.31% 3.07% 3.65% Euribor 3M AVG 3.35% 3.46% 3.06% 3.68
Slide 39: Details on Net Commissions
Details on Net Commissions Net commissions by product area mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 1H22 1H23 Banking 12.5 13.8 14.5 15.3 56.2 14.6 15.6 26.3 30.2 Brokerage 32.6 24.2 20.9 22.7 100.5 31.3 24.2 56.9 55.5 o/w Equity 28.1 18.3 16.1 16.5 79.0 22.8 16.1 46.5 38.9 Bond 0.6 3.0 0.9 2.7 7.2 3.
Slide 40: Revenues breakdown by Product Area
Revenues breakdown by Product Area Revenues by product area mln 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 1H22 1H23 Net financial income 104.4 66.3 81.8 129.5 382.0 154.9 167.5 170.7 322.3 o/w Net interest income 56.3 65.0 81.8 129.5 332.6 154.9 167.4 121.2 322.2 o/w Profit from Treasury Management 48.1 1.
Slide 41: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 AUM 53,651 50,789 50,708 52,073 54,132 55,803 o/w Funds and Sicav 35,985 33,182 32,806 33,827 35,962 37,373 o/w Insurance 15,354 15,421 15,643 15,595 15,052 14,708 o/w GPM 326 308 303 318 331 346 o/w AuC + deposits under
Slide 42: Increasing quality and productivity of the Network
Increasing quality and productivity of the Network Total Assets per PFA TFA concentration per PFA Eop, mln AUM AUC Deposits PFAs with TFA >20mln are 62% and hold 88% of TFA +9.7% +12.2% +65 +2.8% 90.1bn 100 101.1bn 100 2,887 2,951 2,952 33.3 34.2 31.2 > €35mln +7.5% 30% 34% €25-35mln y/y 62% 18.7 €2
Slide 43: Balance Sheet
Balance Sheet mln Mar.22 Jun.22 Sep.22 Dec.22 Mar.23 Jun.23 Due from Banks (1) 2,132 1,943 2,139 1,896 1,860 1,934 Customer Loans 6,088 6,311 6,318 6,446 6,312 6,184 Financial Assets 25,389 25,315 25,091 24,651 24,366 22,630 Tangible and Intangible Assets 276 274 270 273 268 269 Derivatives 466 949
Slide 44: Safe Balance Sheet: simple, highly liquid
Safe Balance Sheet: simple, highly liquid Diversified investment portfolio 33.8 bn (1) Financial Assets Customer deposits ◼ Investment strategy based on a diversified blend of EU government bonds, Customer loans Other liabilities supranational and agencies Due from Banks (2) Equity 22.6 ◼ 99.9% not
Slide 45: Leverage Ratio Sensitivity
Leverage Ratio Sensitivity Focus on our Balance Sheet to keep under control the growth of deposits and improve our quality revenues mix. Thanks to our new initiatives at the same time we can: OUR PRIORITY 1) sustain our growth 2) distribute a growing dividend per share 3) keep our Leverage Ratio com
Slide 46: Fineco Asset Management in a nutshell
Fineco Asset Management in a nutshell FAM is active on 6 business lines with the following products (Core Series, FAM Evolution, FAM Series, Passive and Smart Factors funds, FAM Evolution Target family and FAM Series Global Defence / Target family), providing not only the expertise of the best Asset
Slide 47: Preserving our best price/quality ratio
Preserving our best price/quality ratio Competitive landscape(1) € Online € 96d avg € 144 avg Branch online costs branch costs Widiba (Conto Start) 20 53 Webank 24 Ing (Conto Arancio) 27 Fineco 40 Illimity (Conto Illimity Classic) 46 HelloBank! (Hello! Money) 60 Banca Sella (Conto Start) 62 161 ISYB
Slide 48: ESG Ratings and Indices
ESG Ratings and Indices ESG RATINGS ESG INDICES RECENT ESG AWARDS Evaluation scale 2021 Today (0-100) 65 69* 4pt improvement on previous year Fineco included in: (From D- to A) -** B Most climate- First submission Top Employer Italy conscious companies 2023 2023 (100-0) 16.0 13.2 Among the best inte
Slide 49: Commitment to Net Zero emissions by 2050
Commitment to Net Zero emissions by 2050 Aware of the importance of environmental and climate matters, in 2022 the BoD approved the Net-Zero emissions plan to 2050 regarding both operational and financed emissions RESPONSIBLE FINANCE - Scope 3 emissions from internal investment portfolio 2021 2030 2
Slide 50: Funding
Funding Senior Preferred instrument AT1 instruments ➢ €500 mln Senior Preferred issued on October 14th, 2021 in order to be immediately compliant with the Fully Loaded MREL Requirement on Leverage Ratio Exposure (LRE), ➢ €200 mln perpetual AT1 issued on January 23rd, 2018: which will be binding star
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