Slide 1: FY18 Results
FY18 Results Alessandro Foti, CEO and General Manager April 2019
Slide 2: Disclaimer
Disclaimer This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations,
Slide 3: Agenda
Agenda Fineco Results Focus on product areas Key messages Further opportunities and other 3
Slide 4: Executive Summary
Executive Summary FY18 adjusted net profit(1) at 244.4mln, strongly up y/y (+11.8% y/y(2)) confirming the sustainability of a business model able to delivery consistent results in every market condition FY18 growing adjusted revenues(1) (+7.1% y/y) supported by Investing area (+13.5% y/y) with m
Slide 5: Results
Results Double digit growth in net profit in a more complex environment. Well diversified revenues up +7.1% y/y and C/I ratio down ~0.9 p.p. y/y at 39% Net Profit Revenues mln mln excluding non recurring items(1) +7.1% +11.8% Deposit Guarantee Scheme: +4.9% 586.9 625.3 241.2 FY18: -14.3mln (gross),
Slide 6: Net interest income (1/2)
Net interest income (1/2) Strong performance (+5.2% y/y) thanks to valuable and sticky sight deposits coupled with high-quality lending portfolio. Increasing diversification in financial investments Net Interest Income Interest-earning assets mln Avg, bn Financial Investments (1) Financial Investmen
Slide 7: Net interest income (2/2)
Net interest income (2/2) Further improvements for a diversified asset side. Sensitivity analysis +100bps parallel shift: +109 mln Focus on Government Bonds UC bonds and Govies run-offs Avg, bn Eop, bn UC Bonds Govies (1) Italy Spain Other UC Bond avg spread (bps) 100% at fixed rate Residual maturit
Slide 8: Commissions and Trading Income
Commissions and Trading Income Fees and commissions grew +11.2% y/y with management fees up 12.5% y/y. 4Q18 Trading Income affected by non-client driven effects Fees and Commissions Trading Income mln Brokerage Investing Banking Other mln Trading Income VISA valuation in 2018 (IFRS9) excluding non r
Slide 9: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA Staff expenses and FTE Long Term Incentive Plans mln mln Staff expenses, related to top managers and key employees excluding non recurring items(1) FTE # Other administrative expenses, related to PFAs o/w FAM o/w 1.8mln +6.3% new 2018
Slide 10: Boost in high quality lending volume
Boost in high quality lending volume offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics Overall Lending portfolio Cost of Risk on commercial loans (3) Eop, mln Current accounts/Overdraft (1) Cards Reverse repos Personal loans Mortgages Other (2) 45 bps
Slide 11: Lending
Lending Boost in high quality lending volume through mortgages, personal loans and lombard loans Eop, mln 2019 Guidance +66.0% yearly new production: Mortgages 8,533 mortgages granted since December 2016 ~350mln +8.1% Average customer rate: 185bps. FY18 Yield(1) at 81bps current market 795 8
Slide 12: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet. Look-through implementation drove +259bps YTD benefit on CET1 ratio RWA CET1 Ratio transitional mln % CET1 capital, mln Credit Market Operational +0.39p.p. y/y +0.70p.p. q/q +1.8% +0.1% 21.16 +0.31 -0.06 2,400 2,374 2,376 20.7
Slide 13: TFA
TFA Relentless TFA growth thanks to a healthy expansion in net sales. Guided products & Services increased at 67% of total AuM TFA evolution (Dec.12 – Dec.18) bn Cumulated performance -4.1 69.3 67.2 6.2 (1) Net Sales +29.2 bn 1.0 Market Effect +0.3 bn 60.2 6.0 -0.2 55.3 5.0 0.5 49.3 5.5 1.7 43.6 4.0
Slide 14: TFA breakdown
TFA breakdown Successful shift towards high added value products thanks to strong productivity of the network Breakdown of total TFA Focus on AUM bn bn +9.6 bn AUM since the end of 2014, o/w: Guided products as % of AuM Guided Products & Services +13.9 bn +3.2% AuM à la carte -4.3bn 69.3 67.2 60.2 -
Slide 15: Net sales breakdown
Net sales breakdown Solid 2018 net sales growth on the wave of structural trends in place despite a complex environment Breakdown of total Net Sales PFA Network – total Net Sales bn bn +4.4% 6.2 +0.9% 6.0 5.5 5.4 5.5 5.0 4.9 2.3 4.0 4.3 3.6 2.3 2.7 1.9 4.0 2.6 1.9 4.0 0.3 1.8 3.1 1.3 0.9 3.0 0.2 0.7
Slide 16: Organic growth
Organic growth Net sales organically generated confirmed as key in our strategy of growth Net Sales – Organic / Recruit (%) bn bn New recruits of the year Organic Total recruits(1) Organic 4.0 5.5 5.0 6.0 6.2 4.0 5.5 5.0 6.0 6.2 Recruitment costs 11% 11% 10% 7% (to be amortized) 18% 19% 19% 14% 15%
Slide 17: Agenda
Agenda Fineco Results Focus on product areas Key messages Further opportunities and other 17
Slide 18: Revenues by Product Area
Revenues by Product Area Well diversified stream of revenues allow the bank to successfully face any market environment Banking 48% mln +6.5% +8.2% +3.3% 277.0 299.6 72.9 75.1 77.6 4Q17 3Q18 4Q18 FY17 FY18 Brokerage 20% Investing 33% mln mln FY18 -1.0% Management fees -1.5% 126.8 125.6 +12.5% y/y +1
Slide 19: Banking
Banking Sound performance driven by strong volume growth and relentless clients’ acquisition, thanks to high quality services and best-in-class customer satisfaction Revenues Direct deposits mln Eop, mln Net Interest Trading income Sight Deposits eop Term Deposits eop +8.2% Fees and commissions Othe
Slide 20: Brokerage
Brokerage Rebound 4Q18 Brokerage performance following increased volatility in the period and enlargement of product offer Revenues Executed orders mln Net Interest Trading profit mln Fees and commissions -1.0% -1.5% 126.8 125.6 +0.4% 13.1 13.4 -2.7% +18.6% 25.8 25.9 73.3 74.7 +17.3% 30.4 25.3 30.0
Slide 21: Investing
Investing Successful strategy based on our cyborg advisory approach drove a better asset mix and increasing fees y/y Revenues (Net fees) Assets under Management mln eop, bn Upfront fees Management fees Other(1) -0.2% +12.6% FY18 -4.1% Management 206.8 33.6 33.5 34.5 34.9 33.5 fees 7.8 +12.5% y/y 183
Slide 22: Agenda
Agenda Fineco Results Focus on product areas Key messages Further opportunities and other 22
Slide 23: 3 Pillars: Efficiency, Innovation and Transparency
3 Pillars: Efficiency, Innovation and Transparency The keys of our strategy, still leading our sustainable growth EFFICIENCY INNOVATION TRANSPARENCY Strong focus on IT & Operations, Anticipate new needs Fairness and Respect more flexibility, less costs simplifying customers’ life for all our stakeho
Slide 24: Healthy growth and sustainability at the heart of Fineco's business model
Healthy growth and sustainability at the heart of Fineco’s business model.. A coherent approach in the whole strategy of growth INVESTING Recurring revenues. Fairness and transparency core BANKING BROKERAGE Safe Balance Sheet: The perfect diversified and low-risk countercyclical assets, valuable dep
Slide 25: Safe Balance Sheet
Safe Balance Sheet: simple, highly liquid and low risk asset side, valuable and sticky deposits Diversified investment portfolio 24.7 bn High-value deposit base Investment strategy announced during Sticky deposits: mostly ‘transactional FY17 results: UC bonds run-offs, blend of liquidity’ gather
Slide 26: Fairness and transparency core in our strategy
Fairness and transparency core in our strategy. Sustainable and highly recurring Investing revenues Structural trends to support growth Organic growth key in our strategy Total net sales: 6.2 bn Total Recruits Organic At sweet spot to capture two structural 15% trends in place in Italy: - digitaliza
Slide 27: Brokerage: the perfect countercyclical business
Brokerage: the perfect countercyclical business Leading position in Brokerage Operating Platform Excellence: multichannel and fully integrated Well advanced in-house know-how, optimizing time-to-market and cost efficiency In-house back-office and customer care. Business continuity always guara
Slide 28: Operating Leverage
Operating Leverage A distinctive competitive advantage of Fineco IT and back office internally managed, deep internal know-how 18% FTEs in IT department, 24% in Back-Office Platform scalability Core system internally managed Internal DWH to fully leverage on Big Data Analytics and Very low C
Slide 29: Dealing with pressure on margins in a pro-active way
Dealing with pressure on margins in a pro-active way Improve Continuous innovation leveraging on our best-in-class internal IT culture and 1 QUALITY OF Big Data analytics to be recognized by clients as a premium brand. SERVICES (Cyborg-advisory approach, X-Net platform, Plus advisory etc). Strong op
Slide 30: Improve quality of services
Improve Continuous innovation on usability and front-end efficiency 1 QUALITY OF to deliver distinctive products and services SERVICES INVESTING BANKING Advanced reporting to improve Instant payments through web and usability (X-Net evolution, full mobile access to Advice and Plus also from mobile w
Slide 31: Increase PFAs productivity
Increase Continuously increase of quality and productivity of the 2 PFAs network PRODUCTIVITY Total Assets per PFA TFA concentration per PFA Eop, mln +4.7% PFAs with TFA >20mln are 44% (+4%y/y) and hold 73% of TFA (+1% y/y) 23.2 22.2 +3.5% -29 2,607 2,610 2,578 57.9bn 1 59.9bn 1 12.8 12.7 > €35mln 1
Slide 32: Cross selling and clients' profile
Increase Cross selling and clients’ profile 2 PFAs PRODUCTIVITY Net sales: new vs existing clients Total Financial Assets per client bn Net sales from existing clients Net sales from new clients >500k 100-500k 50-100k <50k 6.0 6.2 Total TFA: 69.3bn 5.0 Total clients: 69% 63% 12.5% Net sales from Avg
Slide 33: Fineco Asset Management in a nutshell
Increase Fineco Asset Management in a nutshell 3 OPERATIONAL EFFICIENCY STRATEGY 2018 ACHIEVEMENTS 2019 FOCUS Innovative and modern approach to build Product efficiency portfolios, thus improving the relationship with clients. Maximum level of Rationalization Further improvements in strategies
Slide 34: Agenda
Agenda Fineco Results Focus on product areas Key messages Further opportunities and other 34
Slide 35: Further opportunities
Further opportunities Clients: geographical split Over 3,000 clients (1) New clients acquired (2) Fineco UK 15% 16% 40% 55% 65% non-Italian 49% non-Italian 45% 35% UK Italian Other UK Italian Other Unique positioning in a highly fragmented market, leveraging on our one-stop solution. Among the mos
Slide 36: Headquarters acquisition - details
Headquarters acquisition - details Deal January 31st 2019: completed the headquarters acquisition in Milan from Immobiliare Stampa S.C.p.A. (controlled by Banca Popolare di Vincenza S.p.A. in compulsory winding up) Price of the deal: €62mln Rationales: favourable conditions of the deal, expect
Slide 37: Annex
Annex 37
Slide 38: P&L
P&L mln 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 FY17 FY18 Net interest income 63.0 64.3 67.4 70.1 68.9 68.7 69.9 71.1 264.8 278.7 Net commissions 64.7 65.0 69.7 70.7 71.5 74.5 72.7 81.8 270.1 300.4 Trading profit 13.7 12.3 11.1 11.1 14.5 13.1 10.7 5.9 48.2 44.2 Other expenses/income 0.5 -0.8 0.1 3.9
Slide 39: P&L net of non recurring items
P&L net of non recurring items 4Q17 FY17 3Q18 4Q18 FY18 FY18/ 4Q18/ 4Q18/ mln Adj. (1) Adj. (1) Adj. (1) Adj. (1) Adj. (1) FY17 4Q17 3Q18 Net interest income 70.1 264.8 69.9 71.1 278.7 5.2% 1.4% 1.6% Net commissions 70.7 270.1 72.7 81.8 300.4 11.2% 15.7% 12.5% Trading profit 11.1 48.2 10.7 8.9 47.3
Slide 40: FY18 P&L FinecoBank and Fineco Asset Management
FY18 P&L FinecoBank and Fineco Asset Management Fineco Asset FinecoBank FinecoBank mln Management Individual Consolidated Net interest income 0.0 278.7 278.7 Dividends 0.0 8.0 0.0 Net commissions 26.6 273.8 300.4 Trading profit 0.0 44.2 44.2 Other expenses/income 1.7 0.3 1.9 Total revenues 28.3 605.
Slide 41: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 FY17 FY18 Margins Margins Margins Margins Margins Margins Margins Margins Margins Margins Financial Investments 55.4 17,530 5
Slide 42: UniCredit bonds underwritten
UniCredit bonds underwritten ISIN Currency Amount (€ m) Maturity Indexation Spread 1 IT0005010373 Euro 382.5 18-Jan-19 Euribor 1m 2.29% 2 IT0005010613 Euro 382.5 1-Apr-19 Euribor 1m 0.38% 3 IT0005010282 Euro 382.5 15-Jul-19 Euribor 1m 2.37% 4 IT0005010399 Euro 382.5 14-Oct-19 Euribor 1m 2.40% 5 IT00
Slide 43: Details on Net Commissions
Details on Net Commissions mln 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 FY17 FY18 Brokerage 20.3 18.3 16.8 18.0 20.6 20.1 15.8 18.2 73.3 74.7 o/w Equity 16.7 15.2 13.5 15.2 17.5 16.4 13.1 14.9 60.6 61.8 Bond 1.0 0.9 0.7 0.9 0.8 1.2 0.6 0.9 3.6 3.6 Derivatives 2.4 2.0 1.9 1.9 2.5 2.7 2.2 2.9 8.2 10.2
Slide 44: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 FY17 FY18 Net interest income 62.0 63.1 65.5 67.3 67.3 68.4 68.5 69.7 258.0 273.8 Net commissions 0.6 1.9 5.7 4.2 3.4 4.7 4.5 5.5 12.4 18.1 Trading profit 1.9 1.7 1.2 1.3 1.4 1.5 2.1 2.4 6.2 7.3 Other 0.1 0.1 0.1 0.0 0.1 0
Slide 45: Breakdown Total Financial Assets
Breakdown Total Financial Assets mln Mar.17 Jun.17 Sep.17 Dec.17 Mar.18 Jun.18 Sep.18 Dec.18 AUM 30,182 31,059 31,797 33,563 33,536 34,496 34,930 33,485 o/w Funds and Sicav 24,984 25,461 25,901 26,999 26,666 26,809 26,795 24,853 o/w Insurance 4,749 5,145 5,431 6,075 6,395 7,043 7,355 7,618 o/w GPM 9
Slide 46: Balance Sheet
Balance Sheet mln Mar.17 Jun.17 Sep.17 Dec.17 1st Jan.18 Mar.18 Jun.18 Sep.18 Dec.18 Due from Banks 15,462 14,827 14,293 13,878 3,036 3,488 3,224 3,398 3,059 Customer Loans 1,166 1,504 1,716 2,129 2,129 2,318 2,633 2,736 2,955 Financial Assets 3,912 4,770 5,429 5,885 16,733 17,106 17,199 17,678 18,2
Slide 47: IFRS 9 P&L impacts
IFRS 9 P&L impacts mln 1Q18 2Q18 3Q18 4Q18 FY18 Trading Profit 0.6 0.9 0.9 -3.8 -1.4 Visa 0.6 0.9 0.9 -0.7 1.6 Voluntary Scheme 0.0 0.0 0.0 -3.0 -3.0 Loan Loss Provisions -0.4 2.4 -0.4 -0.6 1.0 Profit on Investments 0.0 5.3 -0.9 -3.1 1.3 Govies -0.2 -0.2 -0.1 -0.8 -1.3 UC Bonds 0.2 5.5 -0.8 -2.3 2.6
Slide 48: Total assets: 96% not exposed to volatility
Total assets: 96% not exposed to volatility Out of 24.7bn, only 1.0bn of Assets valuated at fair value with limited impacts on Equity reserve Total Assets o/w Government bonds by geography Eop, bn Eop, bn 24.7 Financial investments 1.0 Gov. Bonds Total Gov. Bonds: 9.0bn at fair value (HTCS) 7.6 Gov.
Slide 49: High-value deposit base confirms strong resilience over time
High-value deposit base confirms strong resilience over time Sight deposits growth Eop, bn 25 +11% 23 y/y 20 18 Financial last 10 years 15 Sovereign crisis 13 debt crisis CAGR: 10% 10 8 5 Worst liquidity outflow 3 Double-digit deposit growth throughout the last 10 years (+10% CAGR), with no impact
Slide 50: Additional Tier 1
Additional Tier 1 Details Benefits Given current favorable market conditions and spread levels, on 23rd January, 2018 the Bank issued a €200mln perpetual Sustain a more diversified investment strategy through AT1 the non-renewal of UC Bonds run-offs and the progressive increase of European Govie
Slide 51: Cooperative Compliance Scheme
Cooperative Compliance Scheme: FinecoBank admitted in the Cooperative Compliance Scheme with the Revenue Agency In July 2017, FinecoBank has been admitted to the Cooperative Compliance Scheme(1), which allows the Bank to take part to a register of taxpayers (published on the Revenue Agency’s officia
Slide 52: Main Financial Ratios
Main Financial Ratios Mar.17 Jun.17 Sep.17 Dec.17 Mar.18 Jun.18 Sep.18 Dec.18 PFA TFA/ PFA (mln) (1) 20.2 20.7 21.4 22.2 22.5 23.0 23.4 23.2 Guided Products / TFA (2) 28% 29% 29% 32% 31% 32% 32% 32% Cost / income Ratio (3) 42.8% 42.8% 40.5% 39.7% 41.0% 40.0% 39.3% 38.9% CET 1 Ratio 22.2% 22.1% 20.7%