Banca Generali S.p.a. · MIL:BGN
Banca Generali — 1H 2022 Earnings Presentation
40 slides from Banca Generali's earnings presentation, Jul 28, 2022
Slide 1: Investor Presentation 1H22 Results
Investor 1H22 RESULTS Presentation 28 July 2022
Slide 2: 1H 2022 Financial Results
To be the No. 1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 Balance Sheet & Capital ratios private bank, unique Net Inflows, Assets and recruiting by value of Business update and closing remarks service, innovation Appendix and su
Slide 3: 1H 2022 Results: Executive Summary
1H 2022 RESULTS: EXECUTIVE SUMMARY The Bank posted sound recurring results amid one of the worst starts to the year ever for both equity and bond investments coupled with unique geopolitical and macro headwinds Positive gearing to interest rate hike, flexible business model and resilient margins rep
Slide 4: Recurring Net Profit
RECURRING NET PROFIT STEADY GROWTH CONTINUES DESPITE TOUGH MARKET CONDITIONS +19% Recurring net profit1 107.9 +30% 1H 2022 recurring €\m 83.3 +3% net profit keeps growing supported 53.2 54.7 46.1 by positive tilt to 37.2 interest rates hike, flexible business 1H21 1H22 1Q21 2Q21 1Q22 2Q22 model and
Slide 5: Net Financial Income
NET FINANCIAL INCOME SIZEABLE INCREASE TAKING ADVANTAGE OF THE INTEREST RATE HIKE IN THE PERIOD Net Financial Income €\m 1H 2022 Net Financial Income +22% +32% (NFI) posted a double digit 67.5 increase (+22% YoY) with a 55.3 structural acceleration in the last 15.7 two quarters +49% 11.4 40.3 2Q 202
Slide 6: Total Gross Fees
TOTAL GROSS FEES SOLID FIGURES DESPITE EXTRAORDINARY BOND AND EQUITY VOLATILITY Total gross fees €\m +6.5% 1H 2022 gross +2.6% recurring fees increased by 6.5% 449.2 478.6 -4.3% YoY, though declining Gross recurring fees slightly at quarterly 221.1 228.1 244.6 234.0 level, posted a small decline (-4
Slide 7: Management Fees
MANAGEMENT FEES TRACKING FINANCIAL MARKETS VOLATILITY, BUT MARGINS REMAIN AT PRE CRISIS LEVELS +8.6% +5.4% Management fees 380.5 413.3 -3.1% €\m 187.4 193.1 209.9 203.4 1H 2022 Management fees (+8.6 YoY) proved solid despite some slowdown at 1H21 1H22 1Q21 2Q21 1Q22 2Q22 quarterly level due to bonds
Slide 8: Banking and Entry Gross Fees
BANKING AND ENTRY GROSS FEES TREND LINKED TO REDUCED CLIENTS’ ACTIVITY AMID DIFFICULT MARKET ENVIRONMENT Banking and entry gross fees €\m -4.9% 68.7 1H 2022 entry fees 65.3 shrank on lower underwriting of 20.7 16.3 -12.6% funds/Sicavs. This -12.0% was partially offset by 19.7 33.7 35.0 34.8 higher p
Slide 9: Total Pay-out Ratio
TOTAL PAY-OUT RATIO TREND IN LINE WITH GUIDANCE HIGHLIGHTING BUSINESS MODEL’S FLEXIBILITY Total Pay-out ratio and fee expenses €\m 1H 2022 Fee Total fee expenses 236.8 247.2 117.0 119.8 124.6 122.6 expenses (+4.4%) vs. gross recurring fees (+6.5%) prove 46.8% 45.8% 46.9% 46.7% 45.0% 46.6% business f
Slide 10: Operating Costs (1/2)
OPERATING COSTS (1/2) COST EVOLUTION IN LINE WITH GUIDANCE Total operating costs1 €\m Breakdown of core operating costs1 €\m +6.7% 119.9 1H 2022 total operating +5.9% 112.3 1.5 costs increased by 0.4 10.4 +6.7% (+5.8% ex- one-off 9.9 items). Costs were 108.1 102.0 2.8 +5.9% reclassified in order to
Slide 11: Operating Costs (2/2)
OPERATING COSTS (2/2) DOWNWARD TREND CONFIRMED Operating costs / Total Assets Cost / Income Ratio 0.45% 0.40% 0.37% 0.33% 0.33% 0.31% 0.30% 0.30% 0.28% 2014 2015 2016 2017 2018 2019 2020 2021 1H22 1 11 NOTE: 1) Excluding performance fees and one-off items
Slide 12: Summing Up
SUMMING UP (€ m) 1H 21 1H 22 % Chg Comments Operating result ex. performance fees (+15%) posted a solid Net Financial Income 55.3 67.5 22.1% increase amid tough market Net recurring fees 212.4 231.4 8.9% conditions leveraging on higher Variable fees 165.0 15.6 -90.6% interest rates, resilient net fe
Slide 13: Balance Sheet & Capital ratios
To be the No.1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 private bank, unique Balance Sheet & Capital ratios by value of Net Inflows, Assets and recruiting service, innovation Business update and closing remarks and sustainabili
Slide 14: Balance Sheet (1/2)
BALANCE SHEET (1/2) HIGH ASSET QUALITY AND GEARING TO VARIABLE RATES 1H 2022 Balance Sheet - Assets and Liabilities € 17.7bn (+1.5bn YTD) Total assets posted a sizeable 1.2 0.8 increase (€17.7bn, +9% YTD) driven by 2.2 clients’ deposits (+9% YTD) Other assets 2.5 Deposits from Banks Total Interest-b
Slide 15: Balance Sheet (2/2)
BALANCE SHEET (2/2) FINANCIAL ASSETS EXPLOITING HIGHER INTEREST RATES Total Assets and Interest-bearing Assets €\bn Focus on Financial Assets (banking book) €\bn 17.7 Total PTF Classification Bond PTF Classification 15.7 16.2 2.2 Other assets 2.0 4% 1.6 2.5 Equity & 19% Loans to Banks & 2.3 2.4 alte
Slide 16: Capital and Liquidity Ratios
CAPITAL AND LIQUIDITY RATIOS SOLID CAPITAL POSITION OVER PLAN HORIZON SEEN AS A PRIORITY Total Capital Ratio % Leverage Ratio % CET1 AT1 18.4% 17.4% 5.1% 1H 2022 capital ratios’ 16.1% 16.3% 4.8% 4.6% variation reflect: i) some 1.3% 1.1% 4.1% 1.5% 1.1% seasonality for the purchase of treasury shares
Slide 17: Net Inflows, Assets and Recruiting
To be the No.1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 Balance Sheet & Capital ratios private bank, unique by value of Net Inflows, Assets and recruiting service, innovation Business update and closing remarks and sustainabili
Slide 18: Total Assets
TOTAL ASSETS TESTED BY ONE OF THE WORST STARTS TO THE YEAR EVER FOR FINANCIAL MARKETS Total Assets €\bn AUM €\bn 80.4 80.9 Challenging financial 68.9 10.9 57.2 55.7 12.6 markets hit hard both 50.0 bond and equity 9.0 12.3 12.5 15.9 15.9 investments in 1H 2022 9.9 16.6 (Euro govt bond -13.1%, Euro St
Slide 19: AUM Breakdown
AUM BREAKDOWN IN HOUSE SOLUTIONS PROVED RESILIENT AMID MARKETS TURMOIL AM products €\bn Insurance products €\bn Financial wrappers 30.6 29.5 emerged as the best in class product for Financial 24.7 26.5 26.2 8.7 25.3 their tailor-made wrappers 8.9 Traditional life approach and Third-party policies di
Slide 20: Net Inflows
NET INFLOWS SOLID COMMERCIAL RESULTS CONFIRMING STRUCTURAL GROWTH TREND Total Net Inflows €\bn AUM Net Inflows €\bn 3.8 2.0 Solid trend in volumes 1.1 3.0 both in absolute and relative 2.8 terms 1.1 0.2 1.4 0.9 Net inflows in wrapper 0.7 solutions proved extremely 0.2 0.9 1.2 0.3 solid during 1H 22
Slide 21: Net Inflows: Retail Funds/SICAV
NET INFLOWS RETAIL NET INFLOWS REPRESENTED BY EQUITY FUNDS Focus on Net inflows in retail funds/SICAV €\bn Net inflows in Focus on 1H22 retail Funds/Sicavs (€/bn) LUX IM 1.4 Retail net inflows by LUX IM net inflows investment category (bn/€) at interim level focused on equity 0.7 funds and other lon
Slide 22: Net Inflows by Acquisition Channel
NET INFLOWS BY ACQUISITION CHANNEL ABOVE AVERAGE CONTRIBUTION FROM EXISTING FAs Net inflows by acquisition channel €\bn Recruitment trend # of new recruits 3.8 Net inflows driven by existing FAs (81% of 123 3.0 total net inflows, a level 1.2 105 above previous quarters) 2.8 0.9 86 0.7 70 75 Recruiti
Slide 23: Business Update and Closing Remarks
To be the No.1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 Balance Sheet & Capital ratios private bank, unique Net Inflows, Assets and recruiting by value of service, innovation Business update and closing remarks and sustainabili
Slide 24: 2022-2024 Strategic Guidelines Confirmed
2022-2024 STRATEGIC GUIDELINES CONFIRMED WITH SELECTED ADJUSTMENTS FOR THE NEW MACRO ENVIRONMENT Pillars Guidelines 2H 2022 Priorities Push on diversified client segments 1. Targeted offer and service model Value of service 2. Multi-service model In depth rethinking of the product Bring the Bank eve
Slide 25: New Commercial Initiatives for 2H 2022
NEW COMMERCIAL INITIATIVES FOR 2H 2022 RENEWED FOCUS ON MANAGED SOLUTIONS Clients New commercial initiatives Key features HNW Launch of private market solutions in PRIVATE INSURANCE partnership with Generali and top-tier Private + players From 4Q22 Extension of Private Insurance solution Affluent PR
Slide 26: In-House Products - LUX IM
IN-HOUSE PRODUCTS - LUX IM LAUNCH OF NEW SUBFUNDS TO EXPLOIT CURRENT MARKET CONDITIONS New LUX IM strategies Description Launched 18 July 2022 Cash parking CASH PARKING - A starting point to build the investment portfolio LUX IM Nordea European Covered Bond (art. 8 SFDR) LUX IM Pictet Conservative A
Slide 27: Innovation
INNOVATION FOCUS ON DATA FRAMEWORK, DIGITALIZATION AND CYBERSECURITY 2 nd P i l l a r Innovation Continue to build a data-driven, digital and open bank New initiatives Description Main facts/achievements Construction of the Bank’s new data Datalake uploaded to cloud architecture with Data-driven ban
Slide 28: Sustainability
SUSTAINABILITY PROGRESS ON ESG COMMERCIAL OFFER AND ENVIRONMENTAL ENGAGEMENT 3 rd P i l l a r Sustainability Be the ESG reference point for all our Stakeholders New initiatives Description Main Actions/Achievements Assets ESG as % in ESG products €\bn of Managed Solutions Increase of ESG AUM on mana
Slide 29: Appendix
To be the No.1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 Balance Sheet & Capital ratios private bank, unique Net Inflows, Assets and recruiting by value of service, innovation Business update and closing remarks and sustainabili
Slide 30: Recurring Net Profit
RECURRING NET PROFIT INCREASE IN RECURRING NET PROFIT ABOVE 2022-2024 TARGET Build up of recurring net profit €\m Operating items Non operating items Higher 1H 2022 recurring net profit (+ 30% YoY) amid +17.9 +6.7 tough market conditions 1.5 107.9 Higher recurring operating 5.2 (5.4) result1 (+15%)
Slide 31: Investment Yields
INVESTMENT YIELDS TOTAL NII YIELD TRACKING INVESTMENT YIELD ON FINANCIAL ASSETS Total NII yield: quarterly trend Financial assets yield: quarterly trend 0.87% 0.87% 0.86% 0.81% 0.82% 0.79% 0.77% 0.75% 0.78% 0.78% 0.75% 0.80% 0.74% 0.74% 0.79% 0.75% 0.71% 0.74% 0.71% 0.66% 0.66% 0.63% 0.60% 0.60% 0.5
Slide 32: Banking Book - Maturities
BANKING BOOK - MATURITIES €5BN OF ASSETS EXPIRING OVER THE NEXT THREE YEARS Banking book maturities by year €\bn Banking book maturities – Split by accounting treatment €\bn HTC HTCS 2.4 1.9 2.0 1.2 1.0 1.0 1.6 2.4 0.1 0.7 0.7 0.6 0.5 0.9 1.0 0.1 0.2 0.2 0.7 0.6 0.7 0.7 0.4 0.5 0.1 0.2 0.2 2022 2023
Slide 33: Banking Book - Loan Book
BANKING BOOK – LOAN BOOK HIGH QUALITY LOAN BOOK Total Assets and Interest-bearing Assets €\bn Focus on Loan Book (banking book) €\bn 17.7 15.7 16.2 1Q22 Credit Book bn/€ Lending Quality % 2.2 Other assets 1.2 1.6 2.0 2.5 0.8 Loans to Banks & 2.3 2.4 other liabilities 1.7 Loans to Clients 98.8 Financ
Slide 34: Management Company (BG FML)
MANAGEMENT COMPANY (BG FML) FINANCIAL MARKETS VOLATILITY TAKING ITS TOLL ON LUX BASED ASSETS BG FML - Assets by SICAV €\bn BG FML - Total Assets €\bn 20.1 18.6 Institutional fund 16.7 classes 20.1 Retail fund classes 10.5 9.5 18.6 9.1 0.3 16.7 0.3 4.8 7.6 9.6 9.1 LUX IM growth 0.3 3.7 continues repr
Slide 35: Appendix: Strategy
To be the No.1 private bank, unique by value of service, innovation and sustainability 1H 2022 Financial Results To be the No. 1 Balance Sheet & Capital ratios private bank, unique Net Inflows, Assets and recruiting by value of service, innovation Business update and closing remarks and sustainabili
Slide 36: Private Markets
PRIVATE MARKETS LEVERAGING OUR PARTNERSHIP WITH GENERALI GROUP GENERALI GROUP • Entity of Generali Group specialized in private equity LION • €11 bn Assets Under Management RIVER • Track record of over 15 years • Net IRR above 16% • Among the top 10 real estate asset managers in the world • €36.6 bn
Slide 37: Ongoing Sustainable Growth
ONGOING SUSTAINABLE GROWTH ESG PRODUCTS AT 15.0% OF MANAGED SOLUTIONS Assets in ESG products €\bn ESG as % of Managed Solutions Net inflows in ESG products €\bn 0.8 14.9%15.0% 14.6% 14.3% 5.9 6.0 13.6% 0.4 3.1 0.3 9.2% 7.7% 1H20 1H21 1H22 1Q20 1H20 1Q21 1H21 2021 1Q22 1H22 1H20 1H21 1H22 37
Slide 38: Financial Advisory Network
FINANCIAL ADVISORY NETWORK STEADY GROWTH BY SIZE AND QUALITY Breakdown by cluster of FAs1 Total No. of FAs # 2,162 2,206 2,139 17% 2,040 2,087 1,936 1,985 35% 1,841 1,715 1,645 66% 54% 14% 5% 3% 6% No.of FA AUM (bn/€) Wealth Managers 2014 2015 2016 2017 2018 2019 2020 2021 1H21 1H22 Private Bankers
Slide 39: 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 40: 2022 Upcoming Events
2022 UPCOMING EVENTS NOVEMBER Su Mo Tu We Th Fr Sa 9M 2022 Results Investor Relations Contacts 1 2 3 4 5 6 7 8 9 10 11 12 Conference Call Giuliana Pagliari Investor Relations Manager 13 14 15 16 17 18 19 Phone +39 02 408 26548 20 21 22 23 24 25 26 Mobile +39 331 65 30 620 27 28 29 30 E-mail: giulian