Slide 1: Fineco: 2Q16 Results
Fineco: 2Q16 Results Alessandro Foti, CEO and General Manager Milan, August 1st 2016
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: Executive Summary
Executive Summary 1H16 net profit at 117.8mln, 101mln net of positive non recurring items1 (+7.8% y/y) the best semester ever, confirming the effectiveness of a unique business model able to generate strong performance in every market condition 2Q16 net profit at 66.6mln, 49.8mln net of positive
Slide 4: Agenda
Agenda Fineco Results Focus on product areas Next steps 4
Slide 5: Results
Results Best semester ever: 101mln excluding positive non recurring items(1) (+7.8% y/y), boosted by higher revenues coupled with lower operating costs Net Profit, mln Revenues, mln excluding positive non recurring items(1) excluding positive non recurring items(1) +13.6% +2.2% +7.9% +1.9% +25.7% +7
Slide 6: Revenues by P&L Items
Revenues by P&L Items Growing y/y revenue generation, despite the challenging environment, mainly supported by net interest and trading income. Investing fees up at 77.6mln in 1H16 Net interest, mln Fees and Commissions, mln +3.3% +6.7% Brokerage -7.2% Investing -1.7% 127.0 115.7 123.4 Banking Other
Slide 7: Net interest
Net interest Sustainable and high quality volume dynamics more than offset lower margins and declining interest rates Sight Deposits (mln) and net margins (bps) Term Deposits (mln) and net margins (bps) +19.1% +5.1% -46.7% 14,537 15,328 16,105 1,358 -13.9% 12,729 13,522 14,084 1,014 793 673 628 540
Slide 8: Net interest: focus on UniCredit bonds portfolio
Net interest: focus on UniCredit bonds portfolio 9.5% sight deposits growth to offset lower rates and bond portfolio run off Run-off UniCredit bonds portfolio (mln) and spread (bps) 2,225 1,805 1,925 1,725 1,725 1,575 700 350 2016 2017 2018 2019 2020 2021 2022 2023 Average spread 53 178 202 202 235
Slide 9: Costs
Costs Cost efficiency and operating leverage confirmed in our DNA Staff expenses, mln and FTE, # Stock granting post IPO 992 1021 1025 Staff expenses, related to top managers and key employees Other administrative expenses, related to PFAs +1.1% +1.4% 8.0 +1.6% 1.7 5.4 4.1 37.2 37.7 2.7 2.7 1.4 0.8
Slide 10: Capital Ratios
Capital Ratios Best in class capital position and low risk balance sheet RWA, mln CET1 Ratio transitional, % Credit Market Operational +1.9p.p. +1.4p.p. 0.0% 20.79% 20.43% 21.39% 21.31% 22.68% -1.8% 1,826 1,828 1,859 1,826 1,804 Jun.15 Sept.15 Dec.15 Mar.16 Jun.16 1,061 1,044 1,066 1,071 1,090 CET1
Slide 11: TFA
TFA 19.7 bn net sales gathered in 5 years and a half. Guided products and services increased at 51% of total AuM TFA evolution (Dec.10-Jun.16), bn Cumulated performance, bn Net Sales +19.7 bn 55.3 2.6 -2.4 55.6 0.5 Market Effect +0.6 bn 5.5 49.3 1.7 43.6 4.0 1.3 39.8 2.5 2.5 35.2 2.8 -3.0 35.0 2.3 T
Slide 12: TFA and Net sales - breakdown
TFA and Net sales - breakdown Shift towards high added value products resulting in 1.7bn net sales in Guided products out of 0.3bn net sales in AuM in 1H16 Breakdown of total net sales, bn Breakdown of total TFA, bn Guided products as % of AuM 5.5 55.3 55.0 55.6 53.7 53.8 4.0 49.3 2.7 1.7 bn 43.6 Gu
Slide 13: Personal Financial Advisors (PFA) network – Total Net sales
Personal Financial Advisors (PFA) network – Total Net sales Organic expansion continue to deliver solid results through a network of 2,642 PFAs PFA Network – total net sales, bn Net sales, bn - Organic/New Recruit of the year AuM AuC Deposits Net Sales (Organic) Net Sales (New Recruit) 4.9 4.9 3.6 2
Slide 14: Agenda
Agenda Fineco Results Focus on product areas Next steps 14
Slide 15: Revenues by Product Area
Revenues by Product Area Well diversified stream of revenues allowing the bank to successfully face any market environment Banking, mln 45% +3.5% +6.0% -0.3% 114.9 121.7 58.8 61.0 60.8 2Q15 1Q16 2Q16 1H15 1H16 Brokerage, mln 26% Investing, mln 29% Core revenues (NI excluded) -1.0% +0.8% -7.4% -2.9%
Slide 16: Banking
Banking Outstanding y/y results notwithstanding declining interest rates thanks to strong volume growth. 1H16 fees affected by new regulation on interchange fees(1) Revenues, mln Direct deposits eop (mln) Net interest Sight Deposits Term Deposits +6.0% Net fees +13.0% Net trading 121.7 Other 114.9 +
Slide 17: Brokerage
Brokerage Growing y/y executed orders more skewed towards OTC products. Trading profit affected by lower traded volumes linked to market drop Revenues, mln Volatility Index - Ftse Mib Net interest Net fees Net trading Core revenues (NI excluded) -9.9% -11.7% 78.0 8.0 68.9 5.8 -2.9% -7.43% -11.9% -11
Slide 18: Investing
Investing Resilient fees and margins thanks to a continuous shift towards Guided products and services Revenues (Net Commissions), mln AuM eop (bn) Upfront fees Management fees Others -1.0% +1.4% +0.8% 26.1 26.2 26.3 25.9 24.8 25.6 77.0 77.6 5.5 4.6 -1.0% Mar.15 Jun.15 Sep.15 Dec.15 Mar.16 Jun.16 +7
Slide 19: Agenda
Agenda Fineco Results Focus on product areas Next steps 19
Slide 20: A great potential to fully exploit
A great potential to fully exploit 1 INCREASE PRODUCTIVITY Cyborg advisory & X-Net Mortgages 2 MORE FOCUS ON LENDING Personal loans 3 EXPANSION ABROAD UK project 20
Slide 21: Underlying rationale and potential (1/3): Increase productivity
Underlying rationale and potential (1/3) 1 INCREASE PRODUCTIVITY Cyborg-advisory and X-Net To remain on the market successfully, the increase of PFAs network productivity is mandatory for the industry to cope with expected pressure on margins Fineco can leverage on the concept of Cyborg-advisory
Slide 22: Underlying rationale and potential (2/3): Lending
Underlying rationale and potential (2/3) 2 LENDING Mortgages Mortgages owned by clients outside Fineco New law 119/2016 for repossession of new residential mortgage collateral (Decreto banche/ 8.4bn Patto Marciano)1 makes mortgages business more appealing reducing CoR The current interest rate e
Slide 23: Underlying rationale and potential (3/3): Expansion abroad
Underlying rationale and potential (3/3) 3 EXPANSION ABROAD UK project UK: large but inefficient market in terms of value proposition Focus on retail UK residents One stop shop (banking/ brokerage/ investing) leveraging on Fineco's existing platform Light cost approach and strong operational
Slide 24: Annex
Annex 24
Slide 25: P&L
P&L mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Net interest income 56.5 59.3 115.7 62.9 62.1 240.8 62.2 61.2 123.4 Net commissions 62.8 64.2 127.0 62.0 63.6 252.6 58.2 59.7 117.8 Trading profit 17.1 11.0 28.1 13.2 12.6 53.9 19.6 27.3 46.9 Other expenses/income 0.4 -3.4 -3.1 1.6 -1.5 -3.0 0.1 0
Slide 26: Details on Net Interest Income
Details on Net Interest Income Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & Volumes & mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Margins Margins Margins Margins Margins Margins Margins Margins Margins Sight Deposits 51.6 12,729 52.2 13,522 103.8 13,125 54.5 1
Slide 27: UniCredit bonds underwritten 1H16
UniCredit bonds underwritten ISIN Currency Amount (€ m) Maturity Indexation Spread 1 IT0004307861 Amortizing Euro 150.0 30-Sep-16 30-Sep-16 0.51% IT0004307861 Amortizing Euro 150.0 2-Oct-17 2-Oct-17 0.51% IT0004307861 Amortizing Euro 150.0 2-Jan-18 2-Jan-18 0.51% 2 IT0005010233 Euro 382.5 30-Jan-17
Slide 28: Details on Net Commissions
Details on Net Commissions mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Brokerage 25.0 20.8 45.8 20.3 19.2 85.3 20.3 18.5 38.8 o/w Equity 19.9 17.3 37.2 16.4 15.1 68.7 16.5 15.2 31.7 Bond 2.5 1.2 3.7 1.1 1.3 6.0 1.1 1.1 2.3 Derivatives 2.5 2.3 4.9 2.6 2.4 9.9 3.2 2.6 5.8 (1) Other commissions 0.
Slide 29: Revenue breakdown by Product Area
Revenue breakdown by Product Area mln 1Q15 2Q15 1H15 3Q15 4Q15 FY15 1Q16 2Q16 1H16 Net interest income 52.8 54.8 107.6 58.0 58.1 223.7 59.7 58.9 118.6 Net commissions 1.5 2.8 4.3 3.2 3.3 10.9 0.3 0.8 1.1 Trading profit 1.9 1.3 3.2 1.1 1.2 5.4 0.9 1.1 2.0 Other -0.1 -0.1 -0.2 -0.1 -0.1 -0.3 0.0 0.1 0
Slide 30: Breakdown TFA
Breakdown TFA mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 AUM 26,121 26,169 24,825 26,277 25,565 25,911 o/w Funds and Sicav 23,313 23,221 21,949 23,100 22,332 22,395 o/w Insurance 2,793 2,933 2,862 3,163 3,219 3,505 o/w GPM 15 15 14 14 14 12 AUC 13,219 12,613 12,868 13,419 12,889 12,688 o
Slide 31: Balance Sheet
Balance Sheet mln March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 Due from Banks 14,070 14,583 13,966 14,649 15,404 15,299 Customer Loans 797 836 885 923 827 880 Financial Assets 2,270 2,244 2,241 2,250 2,629 2,933 Tangible and Intangible Assets 109 109 109 110 111 111 Derivatives 25 40 7 11 7 9
Slide 32: Main Financial Ratios
Main Financial Ratios March 15 June 15 Sept. 15 Dec. 15 March 16 June 16 PFA TFA/ PFA (mln) 17.6 17.6 17.0 17.9 17.8 17.9 Guided Products / TFA 19% 20% 20% 21% 22% 24% Revenues per TFA (bps) 106.1 103.8 106.7 104.0 101.6 104.2 Cost / income Ratio(1) 43.8% 44.6% 42.6% 42.7% 43.0% 43.0% CET 1 Ratio 19