Slide 1: Investor Presentation FY 2019 Results
INVESTOR PRESENTATION FY 2019 RESULTS
Slide 2: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 2019 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix: Sector trend and business profile 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY STRONG ASSET GROWTH, ROBUST NET PROFITS, HEALTHY DIVIDENDS Total assets at a new high of €69bn (+20%) Strong asset expansion driven by healthy increase in net new money (€5.1bn, 8.9% of starting assets), strong investment performance (+7.2% on total assets, +11% on managed assets
Slide 4: 2019 Dividend Proposal to AGM
2019 DIVIDEND PROPOSAL TO AGM CONFIRMED BUT PAYMENT POSTPONED On 30 March 20202, Banca Generali decided to responsibly comply with the new recommendations issued by the Supervisory Authorities in light of the exceptional market context caused by the outbreak of COVID-19 European Central Bank iss
Slide 5: Results at a Glance
RESULTS AT A GLANCE KEY TAKEAWAYS Comments (€ mln) 2018 2019 % Chg Net Interest Income 60.0 74.0 23.4% Buoyant increase in Operating Profit (+41%) Net income (loss) from trading activities and Dividends 24.1 14.2 -41.2% NII (+23%) lifted by a sharp growth in banking Net Financial Income 84.1 88.2
Slide 6: Net Profit Trend
NET PROFIT TREND STEADY IMPROVEMENT IN THE RECURRING COMPONENT Net Profit: Recurring vs. Variable m/€ 272.1 203.6 204.1 122.1 180.1 161.0 155.9 5Y Growth Variable 47 114.1 132.9 Net Profit bn/€ 80.9 107.6 150.0 181% 133.1 Recurring 90.0 70.7 75.0 Net Profit1 bn/€ 53.3 2014 2015 2016 2017 2018 2019 A
Slide 7: Agenda
AGENDA Preliminary remarks Our Vision: To Be the No.1 Private Bank 2019 Financial Results unique by Value of Service, Innovation Net Inflows, Assets and recruiting and Sustainability Business update and closing remarks Appendix: Sector Trend and Business profile 7
Slide 8: Net Financial Income (1/2)
NET FINANCIAL INCOME (1/2) HIGHER NII LIFTED BY VOLUMES AND INVESTMENT YIELD Net financial income1 m/€ 88.2 79.5 84.1 14.2 Steady improvement in NII 18.1 24.1 driven by higher interest- bearing assets (€10.9bn, +20%) and higher 77.5 investment return on 74.0 23.5 25.0 financial assets (82 bps, 61.4
Slide 9: Net Financial Income (2/2)
NET FINANCIAL INCOME (2/2) GROWING DIVERSIFICATION OF INTEREST-BEARING ASSETS Total Assets and Interest-bearing Assets bn/€ Loans portfolio bn/€ 3.9 4.2 granted loans 11.8 2.5 1.9 2.6 2 drawn loans 9.7 collateral assets 1.2 9.0 2 1.9 2018 2019 0.8 1.5 2019 NPL/Total Loans 0.06% Other assets 1.8 1.8
Slide 10: Management Fees
MANAGEMENT FEES GROWING FEES WITH MARGINS WITHIN 2021 GUIDANCE Management Fees m/€ Quarterly trend m/€ 646.3 634.2 Steady recovery in Management 163 169 management fees 587.0 Fees 156 155 159 linked to growth in m/€ managed assets 4Q18 1Q19 2Q19 3Q19 4Q19 Time-lag between asset growth vs. manage
Slide 11: Banking and Entry Fees (1/2)
BANKING AND ENTRY FEES (1/2) NEW REVENUE STREAMS DRIVING GROWTH Banking and Entry Fees m/€ Breakdown by product mix 87.3 87.3 68.8 68.8 28.8 58.2 58.2 +68% 46.4 +85% 20.9 27.6 14.9 19.7 27.4 43.3 41.2 40.9 58.5 17.8 22.1 19.9 47.9 17.5 10.8 38.5 8.2 5.2 5.8 4.6 2017 2018 2019 11.7 13.2 13.9 14.7 16.
Slide 12: Banking and Entry Fees (2/2)
BANKING AND ENTRY FEES (2/2) NEW REVENUE STREAMS UP AND RUNNING Advanced Advisory, gross fees m/€ Structured products, gross fees m/€ Brokerage fees, gross fees m/€ 20-26 20-25 13.9 16.9 15.6 10.0 11.2 11.6 8.9 7.1 2.3 1.4 2017 2018 2019 2021E 2017 2018 2019 2021E 2017 2018 2019 2021E Quarterly AuA
Slide 13: Performance Fees
PERFORMANCE FEES BEST DELIVERY EVER Total Performance Fees m/€ Performance fees by origin Performance-bearing Lux assets bn/€ 3% LUX IM 147.4 BG Selection 45% 52% 115.1 Others (Nextam, Valeur, portfolio 16.9 management) 15.0 14.1 51.2 38.6 35.1 35.6 25.5 2017 2018 2019 2.0 2017 2018 2019 4Q18 1Q19 2
Slide 14: Fee Expenses
FEE EXPENSES WELL-BELOW TARGETS Pay-out to the network % Total Fee Expenses m/€ 53.8% 47.7% 47.8% 390 391 Pay-out ratio to FAs 376 35.0 43 41 35.7 36.1 Pay-out ratio broadly 41 0.4 stable, with a slight 83 18.8 121 84 12.0 11.3 increase in ordinary pay- 2017 2018 2019 out reflecting changing revenue
Slide 15: Operating Costs (1/2)
OPERATING COSTS (1/2) STRATEGIC PUSH AND ACCELERATION OF KEY PROJECTS Total operating costs m/€ Breakdown of core operating costs2 m/€ Reported operating costs inflated by one-off items and 221.2 M&As 9.1 191.1 189.9 196.6 181.2 Core operating costs 6.9 1.6 15.3 11.0 (+4.8%) in line with 13.8 9.
Slide 16: 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% 0.45% 46.5% 0.42% 39.9% 42.3% 0.38% 41.0% 40.3% 38.8% 0.34% 0.34% 38.1% 41.7% 0.32% 32.3% 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 1
Slide 17: Capital Position
CAPITAL POSITION SOLID CAPITAL REAFFIRMED CET1 ratio TCR ratio Solid capital ratios confirmed after including: 19.0% (2.9%) 17.5% (2.9%) 16.1% 14.6% 1. IFRS 16 application with a one-off charge of 93 bps on CET1 and 98 bps on TCR linked to recognition of the rights of use (RoU) for lease 2018 2019 c
Slide 18: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 2019 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix: Sector trend and business profile 18
Slide 19: Total Assets (1/2)
TOTAL ASSETS (1/2) ACCELERATED ASSET EXPANSION Total Assets bn/€ +11.5bn/€ Record asset expansion on a pro- forma basis 1.2 69.0 Organic growth €5.1bn 66.8 1.0 Asset performance €4.2bn 4.2 M&As: €2.2bn 57.5 5.1 5.1 5.1 Total Asset performance: +7.2% of which: +11.0% on pure managed solutions
Slide 20: Total Assets (2/2)
TOTAL ASSETS (2/2) VOLUMES AND PRODUCT MIX Total Assets bn/€ Managed Solutions bn/€ 69.0 34.0 31.8 27.3 57.5 7.2 55.7 5.5 7.2 In-House funds 9.7 47.5 34.0 9.3 7.7 Third-party funds 41.6 6.6 8.4 Financial wrappers 6.4 36.6 27.3 28.0 Insurance wrappers 7.7 8.7 8.7 21.5 18.9 2018 2019 LfL 2019 + 16.0 V
Slide 21: Assets under Advisory (AuA)
ASSETS UNDER ADVISORY (AUA) AIMING HIGH Assets under Advisory (AuA) Active FAs1 as % of total assets 69.0 +35 pts Advanced 17.0% 4.7 59% Advisory 39% 24% Base 64.3 7-8% 2017 2018 2019 Advisory 6.8% 4.3% No. of contracts (#) 2.3% +257% 7,511 2017 2018 2019 2021 Assoreti target best 4,276 Total player
Slide 22: BG Fund Management Lux (BG FML) Assets
BG FUND MANAGEMENT LUX (BG FML) ASSETS GROWTH DRIVEN BY THE SUCCESS OF LUX IM BG FML - Assets by SICAV bn/€ BG FML - Total Assets, bn/€ 69.0 16.9 16.9 15.0 14.1 15.0 0.3 Lux-based 25% 14.1 Institutional fund 9.7 assets 0.2 classes 8.8 8.6 0.2 6.0 Retail fund classes 6.2 5.5 7.2 7.5 11.1 2017 2018 20
Slide 23: Total Net Inflows
TOTAL NET INFLOWS GROWING FOCUS ON MANAGED PRODUCTS Total Net Inflows bn/€ Quarterly trend bn/€ 1.4 1.4 1.0 6.9 1.3 0.1 5.7 0.3 5.0 5.1 4.6 0.5 0.5 4.0 0.3 2.5 1.0 1.7 1.8 5.8 2.9 0.5 2.8 1.0 0.2 1.5 0.8 0.8 2.8 0.3 1.2 0.2 2.3 0.4 1.4 1.7 0.5 0.9 -0.2 -0.1 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q
Slide 24: Recruiting
RECRUITING SHARPLY HIGHER SHARE OF ORGANIC CONTRIBUTION Total net inflows by acquisition channel Recruitment trend (# of Recruits) 153 29% 53% 105 61% 94 86 76% 73 42 58% 44% 27 59 19 24 16 -5% -5% 44 10 16 -11% 32 9 7 10 14 9 11 2017 2018 2019 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 Existing network 1 F
Slide 25: January Net Inflows
JANUARY NET INFLOWS MANAGED AND INSURANCE PRODUCTS MORE THAN TRIPLED Total net inflows m/€ Assets under Advisory bn/€ Recruitment trend (# of Recruits) 430 438 4.9 4.7 69 of which: 162 LUX IM €166m 11 BG Stile Libero €78m 8 2.6 385 295 -24 -19 Jan. 19 Dec. 19 Jan. 20 Jan. 19 Jan. 20 Jan. 19 Jan. 20
Slide 26: Agenda
AGENDA Preliminary remarks Our Vision: To Be the 2019 Financial Results No.1 Private Bank unique by Value of Net Inflows, Assets and recruiting Service, Innovation and Sustainability Business update and closing remarks Appendix 26
Slide 27: 2020 Key Actions
2020 KEY ACTIONS KEY BUSINESS DRIVERS AND NEW LEVERS 2020 KEY BUSINESS DRIVERS 2020 NEW BUSINESS LEVERS 1. Exploiting growth potential of LUX IM 1. Expanding volumes in lending by SICAV broadening the product range Leveraging growth opportunities 2. Launching a new dedicated offer in 2. from BG‘s in
Slide 28: Key Business Drivers (1/3): Exploiting Growth Potential of LUX IM
KEY BUSINESS DRIVERS (1/3) EXPLOITING GROWTH POTENTIAL OF LUX IM Quarterly net inflows in retail fund classes bn/€ Saving plans I Wave (Apr.2018) net inflows, m/€ Institutional offer 75 3,352 II Wave (Oct. 2018) Retail offer 0.6 43 2,536 52 0.6 0.5 0.4 0.4 750 0.3 0.1 III wave (Feb. 2019) Retail and
Slide 29: Key Business Drivers (2/3): Distinctive ESG Commercial Approach
KEY BUSINESS DRIVERS (2/3) LEVERAGING ON A DISTINCTIVE ESG COMMERCIAL APPROACH ESG commercial approach in a nutshell Cumulated net inflows in ESG products since inception m/€ 809 539 205 50 1Q19 2Q19 3Q19 4Q19 BG/ESG for Generali BG ESG model for Generali Genera Sviluppo Sostenibile BG ESG model a
Slide 30: Key Business Drivers (3/3): Insurance Solutions
KEY BUSINESS DRIVERS (3/3) INSURANCE OFFER TO FOCUS ON NEW SOLUTIONS BG Stile Libero 50Plus combines Cumulated net inflows in segregated accounts up to 50% of total insurance wrappers bn/€ premium with exposure to funds/ETF for the remaining 50% 0.53 0.62 BG Stile Libero 50Plus gaining traction
Slide 31: 2020 New Business Levers (1/3): Lending
2020 NEW BUSINESS LEVERS (1/3) LENDING EXPANSION READY TO TAKE-OFF Enhancing loan process efficiency Loan portfolio bn/€ Process and operational re-design of loan 2.5 – 3.0 procedures leading to faster loan authorisation 1.8 1.9 New IT solutions for loan monitoring and early warning signals thro
Slide 32: 2020 New Business Levers (2/3): Private Markets
2020 NEW BUSINESS LEVERS (2/3) NEW TOOLS LINKED TO REAL ECONOMY BG’s Private Markets offer, a long journey BG’s Private Assets breakdown BG’s assets in private markets: €1.5bn (as of 31.12.2019) with dedicated vehicles: 17% BG NEXT (financial wrapper investing in real estate BG Alternative debt/
Slide 33: 2020 New Business Levers (3/3): International
2020 NEW BUSINESS LEVES (3/3) INTERNATIONALITATION TAKING SHAPE New investment advisory service for Italian clients with asset deposits in Switzerland BG International advisory fully integrated with the advisory platform (BGPA) Service available for retail, corporate and trust companies Cont
Slide 34: Closing Remarks
CLOSING REMARKS ON TRACK TO FINANCIAL TARGETS Objective KPIs 2021 Targets 2019 Results Score Cumulated Net Inflows >14.5 bn/€ 5.1 bn/€ Asset growth Total Assets 76-80 bn/€ 69.0 bn/€ Core Net Banking Income1 ≥63 bps 67 bps Sustainable profitability Core Operating Costs2: 3%- 5% CAGR 4.8% 70%-80% pay-
Slide 35: Agenda
AGENDA Preliminary remarks Our Vision: 2019 Financial Results To Be the No.1 Private Bank Net Inflows, Assets and recruiting unique by Value of Service, Innovation and Business update and closing remarks Sustainability Appendix: Sector trend and business profile 35
Slide 36: Total Italian Household Wealth (Financial + Non Financial)
TOTAL ITALIAN HOUSEHOLD WEALTH (FINANCIAL + NON FINANCIAL) A WEALTHY COUNTRY Italian Total Net Household Wealth, €/trillion Breakdown of Financial Household Assets1 9.5 9.5 9.5 9.7 9.7 9.7 9.7 9.6 9.8 9.6 9.8 9.4 Others 3% Cash & Insuranc e deposits 3.8 3.8 3.7 3.6 3.8 4.0 4.1 4.2 4.2 4.4 4.2 4.4 24
Slide 37: FA Sector Trend
FA SECTOR TREND SIZE AND MARKET SHARE MORE THAN DOUBLED IN THE LAST 10 YEARS Total FAs’ Assets bn/€ 620 New entrants 1 ISPB 519 514 32 434 471 112 101 99 93 279 315 89 220 236 231 257 417 415 476 345 378 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total FAs’ Net Inflows bn/€ 1 New Entrant
Slide 38: Private Household Wealth
PRIVATE HOUSEHOLD WEALTH PRIVATE ASSETS UP BY 30% IN THE LAST 10 YEARS Total Italian Private Assets bn/€ Change in perimeter AIPB 1,080 1,050 1,112 985 1,017 1,029 955 859 882 859 904 274 243 277 253 272 474 469 450 443 438 458 806 869 740 776 778 439 446 481 516 409 421 2009 2010 2011 2012 2013 201
Slide 39: Evolution in Market Positioning (1/2)
EVOLUTION IN MARKET POSITIONING (1/2) THE FOURTH LARGEST FA NETWORK Ranking Assoreti 2013 Assoreti 9M 2019 2013- 9M 2019 Growth #1 83.7 227.2 1 + 41%2 (117.6 ex-ISPB) #2 47.2 74.3 + 57% #3 36.2 68.2 + 88% #4 29.9 65.0 2 + 123% + 67% #5 29.1 49.9 (€bn) 39 Source: Assoreti; NOTE: 1) ISPB (€106,0mld) i
Slide 40: Evolution in Market Positioning (2/2)
EVOLUTION IN MARKET POSITIONING (2/2) THIRD LARGEST PRIVATE BANK BY ASSETS Ranking Magstat 2013 Magstat 2018 2013- 2018 Growth #1 86.2 153.2 + 28 % #2 81.3 91.3 +6% #3 38.4 40.0 + 236 % #4 33.7 33.8 + 0.3% #5 26.7 32.6 + 22 % … … (€bn) #16 11.9 40 Source: Magstat NOTE: financial assets referring to
Slide 41: Market Positioning Trend
MARKET POSITIONING TREND STILL BLUE OCEAN AHEAD Reference market Size of the market Banca Generali’s market share (%) 2008 2013 2019 Italian FAs sector (Assoreti) €620 billion 9.4% 10.4% 14.0%1 Italian Private Financial Wealth €1,112 billion 2.4% 3.0% 6.2%2 (AIPB) Total Italian financial Household €
Slide 42: Advisory Network
ADVISORY NETWORK STEADY QUALITY GROWTH FA Network, # FAs FA Network, by portfolio size and skills 2,040 Clusters (% of Assets) No. of FAs Assets per FA 1,985 1,936 1,841 1,715 1,645 Wealth 35% 3201 80.1 m/€2 Financial Advisors Managers 1,475 42 Private Bankers 50% 1,1721 29.6 m/€2 Financial 7% Plann
Slide 43: Best FA Quality in the Industry
BEST FA QUALITY IN THE INDUSTRY CONSTANT GROWTH IN FA PORTFOLIO Average FA portfolio (Asset per Financial Advisor) m/€ 1 Best Player ex BG Assoreti Banca Generali 32.8 29.0 28.8 25.8 24.3 27.8 22.2 24.3 19.7 23.2 22.0 16.6 18.0 21.5 15.9 16.1 15.9 20.7 15.6 15.8 18.3 18.5 14.5 18.4 16.0 16.8 16.4 15
Slide 44: Client Base
CLIENT BASE GROWING PRIVATE POSITIONING Clients’ breakdown by cluster1, #, bn/€ No. of Clients with assets >500 k/€1, # 26,397 232.4 66.6 21,951 22,621 11% 18,633 16,073 33% 13,939 66% 10,746 44 56% 26% 8% 2013 2014 2015 2016 2017 2018 2019 No. of clients Assets (clients (w. Assets > €10K assets) Sh
Slide 45: Wealth Management Approach
WEALTH MANAGEMENT APPROACH ADVISORY ON FINANCIAL + NON-FINANCIAL WEALTH PRODUCTS SERVICES Real Financial estate assets Corporate Inheritance Art Banking, Insurance & Asset Management Financial & Non Financial Services 45
Slide 46: Product Offer
PRODUCT OFFER WIDE RANGE OF INVESTMENT SOLUTIONS Asset mix 2019 Total Assets 69.0 bn/€ Fully open architecture (Over 5,400 Traditional Life Insurance different retail funds and 50 asset managers offering Clients a wide array of choice) In-House Funds 1 27% 13% Retail funds distribution accounts
Slide 47: Retail Fund Offer
RETAIL FUND OFFER WIDE BREADTH OF OPTIONS FOR FINANCIAL ADVISORS AND CLIENTS Third party funds - open architecture In-house funds • Over 5,400 different retail funds and 50 asset • In-house Funds of Funds and Single Funds managed managers offering Clients a wide array of choice by BG Fund Management
Slide 48: Insurance Offer
INSURANCE OFFER MODULAR TAILOR- MADE SOLUTIONS Traditional policies Insurance wrappers Traditional Generali life products based on Hybrid insurance policy combining traditional life and unit-linked component segregated accounts mainly investing in Features and rationale bonds Highly tailored t
Slide 49: Financial Wrappers
FINANCIAL WRAPPERS KEY PROJECTS Financial wrappers Portfolio management lines maximizing financial advisors’ Specialist teams allowing for maximum diversification Features and rationale freedom to customize asset allocation Relative lines (equity, bonds, balanced) Allocation component combin
Slide 50: Banking Platform
BANKING PLATFORM FACILITATING CLIENTS’ ACQUISITION AND RETENTION Current accounts Security deposits • • Clients’ entry products when moving assets from Features and rationale Full array of banking services covering Clients’ transactional needs traditional banks • Banking center dedicated to Client s
Slide 51: Wealth Management Approach
WEALTH MANAGEMENT APPROACH EXPANSION OF ADVISORY PERIMETER TO NON FINANCIAL WEALTH Advanced Advisory Model (financial + non financial) Focus on Real estate Advisory: • Strategic analysis of real Financial estate wealth Real • Valuations estate assets Agency • Disposals and purchases Focus on Cor
Slide 52: Digital Strategy (1/2)
DIGITAL STRATEGY (1/2) 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 off
Slide 53: Digital Strategy (2/2)
DIGITAL STRATEGY (2/2) 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 advis
Slide 54: Advanced Advisory Contract
ADVANCED ADVISORY CONTRACT A COMPREHENSIVE WEALTH ADVISORY CONTRACT Proprietary IT platform providing a comprehensive overview of both financial and non-financial wealth (real-estate, corporate, estate planning, family protection, art advisory) Contract on a fee-on-top basis Integrated reporting als
Slide 55: Robo-4-Advisor
ROBO-4-ADVISOR AN ADDITIONAL TOOL WITHIN ADVANCED ADVISORY FRAMEWORK Robo-4-Advisors solution to support FA’s productivity Mifid-compliant tool allowing check of client portfolios’ suitability on an ongoing basis Additional service provided within the advance advisory framework What is BGPA Objectiv
Slide 56: BG Saxo
BG SAXO AN EXCLUSIVE PARTNERSHIP FOR ADVANCED TRADING Dedicated Joint-Venture with a brokerage firm – 19.9% BG, 80.1% Saxo Bank Exclusive partnership for the Italian market Joint-Governance – with veto right for BG on selected subjects Revenue sharing agreement based on source of clients Why Saxo Ba
Slide 57: 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 58: 2020 Upcoming Events and Investor Relations Contacts
2020 UPCOMING EVENTS Investor Relations APRIL Contacts Su Mo Tu We Th Fr Sa 1 2 3 4 Giuliana Pagliari 5 6 7 8 9 10 11 Annual General Meeting Investor Relations Manager Phone +39 02 408 26548 12 13 14 15 16 17 18 1° Call Mobile +39 331 65 30 620 19 20 21 22 23 24 25 E-mail: giuliana.pagliari@bancagen