Earnings Release • Feb 7, 2017
Earnings Release
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| Informazione Regolamentata n. 1615-6-2017 |
Data/Ora Ricezione 07 Febbraio 2017 12:39:20 |
MTA | |
|---|---|---|---|
| Societa' | : | FINECOBANK | |
| Identificativo Informazione Regolamentata |
: | 84837 | |
| Nome utilizzatore | : | FINECOBANKN05 - Spolini | |
| Tipologia | : | IRAG 01 | |
| Data/Ora Ricezione | : | 07 Febbraio 2017 12:39:20 | |
| Data/Ora Inizio Diffusione presunta |
: | 07 Febbraio 2017 12:54:21 | |
| Oggetto | : | PR 2016 Results | |
| Testo del comunicato |
Vedi allegato.
1 Non-recurring items: sale of the equity investment in Visa Europe Limited for €15.3 million gross (€10.3 million net), positive change in current taxes following the settlement of several tax disputes for €6.5 million, release of €2.3 million gross (€1.5 million net) of the provisions to the Solidarity Fund established for the loss incurred by the subordinated bondholders of the four banks subject of the resolution, the closure for €1.4 million gross (€1.0 million net) of the remaining commitment related to the action in favour of Banca Tercas, the reduction of €6.7 million gross (€4.5 million net) in the amount allocated to the exposure in equity instruments recognised as a result of the contribution paid to the Interbank Deposit Guarantee Fund - Voluntary Scheme for the subscription of the share capital increase of Cassa di Risparmio di Cesena, and €5.5 million gross (€3.7 million net) of integration costs for the Business Plan of the UniCredit group.
The Board of Directors of FinecoBank S.p.A. has approved the results at December 31st, 2016. Alessandro Foti, CEO and General Manager of FinecoBank, stated:
"We are very satisfied with our results for 2016, our best year ever, and the second record result after 2015. These figures confirm the quality and sustainability of our business model, able to successfully face very difficult market conditions. A year that has reflected the two values that have always driven us in our growth path: transparency and respect for customers.
2017 has opened with solid figures also on the net sales front, particularly in terms of the quality of new flows in our advanced advisory services, confirming their key role in the management of our clients' assets and the appreciation of our cyborg advisory model."
Total Financial Assets at December 31st, 2016 came to €60,195 million (+9% on December 2015) mainly due to net sales for the year of €5 billion and despite the market effect of -€0.2 billion, of which -€0.7 billion attributable to assets under custody and +€0.5 billion attributable to assets under management.
Direct deposits increased to €18,509 million, up 18% y/y, thanks to the steady growth in new clients and "transactional" deposits. Assets under management also rose by 9% compared to the end of 2015, up to €28,608 million at December 31st, 2016. Assets under custody fell slightly to €13,078 billion (-3% on the end of 2015).
The continued improvement in the quality of sales was reflected in the growth of "Guided products & services" which increased as a percentage of TFA, from 21% as of December 31st, 2015, to 27% as of December 31st, 2016, and as a percentage on Assets under Management, up from 45% of TFA at December 31st, 2015 to 56% at December 31st, 2016.
The TFA related to Private Banking clients, i.e. with assets above €500,000, totalled €22,245 billion, up 10% y/y.
As at December 31st, 2016, the network was made up of 2,628 Personal Financial Advisors (2,622 at the end of 2015) operating countrywide through 358 Fineco Centers.
In 2016 around 110,000 new customers were acquired, bringing the total number of customers to 1,117,876, up 7% compared to December 2015.
Net interest income came to €249.4 million, up 3.6% on 2015, due to the increase in deposit volumes and the reduction in the cost of sales, which more than offset the fall in interest income linked to the decline in market interest rates.
Net fee and commission income came to €242.9 million and was down 3.9% on 2015, mainly due to lower securities trading and order collection commissions, as a result of the progressive shift by customers towards over-the-counter products and the lower market volatility compared to 2015, as well as the lower commissions for collection and payment services mainly relating to credit and debit card transactions. In this regard, it is worth reminding that Regulation (EU) 2015/751 of the European Parliament and of the
Council, which came into force from December 9th, 2015, set a cap on interbank commissions for transactions via debit and credit cards.
Net trading, hedging and fair value income amounted to €69 million, up 28.2% y/y on 2015, mainly due to the profit of €15.3 million on the sale of the equity investment in Visa Europe Limited.
Operating income increased to €559.1 million, a rise of 2.7% on €544.3 million reported in 2015. Revenues were well distributed across all the Bank's business areas: investing contributed 30% with €162.7 million (+3.9% y/y), brokerage 24% with €130.1 million (-10.1% y/y compared to core revenues excluding the net interest margin), and banking 46% with €249.1 million (+3.9% y).
Total operating costs came to €226.4 million, down 2.6% on €232.5 million at December 31st, 2015, mainly due to lower costs from the incentive plans for the PFA Network and lower expenditure for marketing and promotional costs. The cost/income ratio fell from 43% at December 31st, 2015 to 40% at December 31st, 2016.
Payroll costs came to €73.7 million, down 1.8% y/y.
Operating profit came to €332.7 million, up 6.7% on 2015.
Profit before tax came to €306.3 million, up 6.3% on 2015.
Net profit for the period amounted to €211.8 million, an increase of 10.9% compared to €191.1 million at December 31st, 2015, thanks mainly to an increase in net interest income and net trading, hedging and fair value income, and the reduction in costs.
Adjusted net profit came to €200.7 million, up 3.7% on the 2015 profit (adjusted for the Solidarity Fund and integration costs), despite including the contribution to the Deposit Guarantee Scheme (€10.6 million gross and €7.1 million net at December 31st, 2016 compared to €4.7 million gross and €3.1 million net at December 31st, 2015).
During 2016, Fineco maintained its solid capital position with a CET1 ratio (transitional) of 22.9% at December 31, 2016.
In the same period, shareholders' equity amounted to €681.3 million, up 7.7% compared to €632.8 million at December 31, 2015.
Net interest income for the fourth quarter came to €63.4 million, up 1.4% on the third quarter 2016 and 2% on the fourth quarter 2015, driven by rising volumes and a lower cost of funding.
Net fee and commission income for the fourth quarter amounted to €65.8 million, up 11% on the third quarter of 2016 and 3.5% on the third quarter of 2015, mainly due to the increase in recurring net fee and commission income from assets under management.
Net trading, hedging and fair value income came to €11.3 million, up 5.2% on the previous quarter, driven by a recovery in market volatility, and down 9.9% on the same period of 2015.
Operating income rose to €138.4 million, up 5% on the third quarter with a positive contribution from all the business areas. It was also up compared to the fourth quarter of 2015 (+1.1%), thanks of the positive contribution from the Investing and Banking areas.
Total operating costs in the fourth quarter came to €55.3 million, up 3.7% compared to €53.4 million in the third quarter 2016 and down 6.2% compared to €58.9 million for the fourth quarter 2015 (-6.2%). Operating profit for the quarter was €83.1 million, up 5.9% on the third quarter of 2016 and 6.6% compared to the fourth quarter of 2015.
Profit before tax came to €74.1 million, up 11.6% on 2016, mainly due to the increase in operating income and the effect of the contribution to the Deposit Guarantee Scheme recorded in the third quarter. The figure was up 16.5% on the fourth quarter of 2015, which also included the contribution to the Deposit Guarantee Scheme, driven by an increase in operating income and a reduction in operating costs.
Net profit for the fourth quarter came to €49.5 million, up 10.9% on €44.6 million posted in the third quarter of 2016 and 17.2% on the fourth quarter 2015. Adjusted net profit2 came to €55.1 million, up 23.5% on both the third quarter 2016 and the fourth quarter 2015.
The year started with net sales amounting to €265 million, decreasing compared to January 2016 (-47% y/y), which was still influenced by uncertainty linked to the four Italian banks rescued. Definitely improvement in the mix is highlighted: AuM net sales amounted to €134 million, +€305 million compared to the negative figure of January 2016; AuC net sales amounted to €285 million (-31% y/y) and direct deposits equalled to -€154 million.
Guided products and services continuously growing: in January net sales were €186 million, +€226 million compared to January 2016, leading penetration rate on total AuM to 57% from 45% of January 2016 and 56% of December 2016.
Net sales through the network of Personal Financial Advisors totalled €275 million (-36% y/y).
Increasing clients' acquisition: in January 2017 more than 11,800 new clients were acquired, +13% on January 2016, bringing the total number of clients at January 31st, 2017 to over 1,127,000, up 7% compared to January 31st, 2016.
Total Financial Assets were at € 60,162 million, quite aligned with December 2016 and +12% compared to January 2016.
Tables showing the figures for January 2017 are provided below.
2 Non-recurring items: release of €2.3 million gross (€1.5 million net) of provisions to the Solidarity Fund established for the loss incurred by the subordinated bondholders of the four banks subject of the resolution, the closure for €1.4 million gross (€1.0 million net) of the remaining commitment related to the action in favour of Banca Tercas, the reduction of €6.7 million gross (€4.5 million net) in the amount allocated to the exposure in equity instruments recognised as a result of the contribution paid to the Interbank Deposit Guarantee Fund - Voluntary Scheme for the subscription of the share capital increase of Cassa di Risparmio di Cesena, and €5.5 million gross (€3.7 million net) of integration costs for the Business Plan of the UniCredit group.
figures in € million
| TOTAL NET SALES | January 2017 | January 2016 |
|---|---|---|
| Assets under management | 134.12 | -171.37 |
| Assets under custody | 284.77 | 414.03 |
| Direct deposits | -153.52 | 258.52 |
| TOTAL NET SALES | 265.36 | 501.19 |
figures in € million
| PFA NETWORK NET SALES | January 2017 | January 2016 |
|---|---|---|
| Assets under management | 130.40 | -160.04 |
| Assets under custody | 191.94 | 300.04 |
| Direct deposits | -47.40 | 288.88 |
| TOTAL NET SALES PFA NETWORK | 274.94 | 428.88 |
figures in € million
| TOTAL FINANCIAL ASSETS | January 2017 | December 2016 | January 2016 |
|---|---|---|---|
| Assets under management | 28,600.33 | 28,607.92 | 25,085.14 |
| Assets under custody | 13,219.27 | 13,077.69 | 12,763.14 |
| Direct deposits | 18,342.49 | 18,509.50 | 15,889.54 |
| TOTAL FINANCIAL ASSETS | 60,162.08 | 60,195.11 | 53,737.81 |
figures in € million
| PFA NETWORK TFA | January 2017 | December 2016 | January 2016 |
|---|---|---|---|
| Assets under management | 28,097.29 | 28,105.21 | 24,598.71 |
| Assets under custody | 9,828.83 | 9,736.10 | 9,408.18 |
| Direct deposits | 13,532.21 | 13,593.01 | 11,627.11 |
| PFA NETWORK TFA | 51,458.33 | 51,434.32 | 45,634.00 |
Attached are the Balance Sheet, Income Statement and the quarterly changes in the Income Statement and Balance Sheet.
| Year | Changes | |||
|---|---|---|---|---|
| 2015 | 2016 | amount | % | |
| Net interest | 240,762 | 249,388 | 8,626 | 3.6% |
| Dividends and other income from equity investments | - | 6 | 6 | n.c. |
| Net fee and commission income | 252,610 | 242,881 | (9,729) | -3.9% |
| Net trading, hedging and fair value income | 53,867 | 69,054 | 15,187 | 28.2% |
| Net other expenses/income | (2,974) | (2,211) | 763 | -25.7% |
| OPERATING INCOME | 544,265 | 559,118 | 14,853 | 2.7% |
| Payroll costs | (75,049) | (73,698) | 1,351 | -1.8% |
| Other administrative expenses | (232,870) | (228,119) | 4,751 | -2.0% |
| Recovery of expenses | 84,347 | 85,395 | 1,048 | 1.2% |
| Value adjustments to property, plant and equipment and intangible assets | (8,951) | (9,952) | (1,001) | 11.2% |
| Operating costs | (232,523) | (226,374) | 6,149 | -2.6% |
| OPERATING PROFIT (LOSS) | 311,742 | 332,744 | 21,002 | 6.7% |
| Net impairment losses on | ||||
| loans and provisions for guarantees and commitments | (6,706) | (4,199) | 2,507 | -37.4% |
| NET OPERATING PROFIT (LOSS) | 305,036 | 328,545 | 23,509 | 7.7% |
| Provisions for risks and charges | (15,714) | (9,981) | 5,733 | -36.5% |
| Integration costs | (1,246) | (5,503) | (4,257) | 341.7% |
| Net income from investment | (1) | (6,724) | (6,723) | 672300.0% |
| PROFIT (LOSS) BEFORE TAX | ||||
| FROM CONTINUING OPERATIONS | 288,075 | 306,337 | 18,262 | 6.3% |
| Income tax for the period | (97,022) | (94,493) | 2,529 | -2.6% |
| PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS | 191,053 | 211,844 | 20,791 | 10.9% |
| PROFIT (LOSS) FOR THE PERIOD | 191,053 | 211,844 | 20,791 | 10.9% |
(Amounts in € thousand)
As of January 1, 2016, net fee and commission income includes the income component connected to the service provided/received for the provision of securities relative to securities lending transactions collateralised by cash, previously recorded in interest expense/income. As a consequence, the corresponding figures for the previous year have been restated to enable like-for-like comparison, by an amount of €4.4 million (of which €1.1 million in 1Q15, €1.2 million in 2Q15, €1 million in 3Q15 and €1.1 million in 4Q15).
| 2015 | 2016 | % Change | |||
|---|---|---|---|---|---|
| 4th Quarter | 3rd Quarter | 4th Quarter | Y/Y | Q/Q | |
| Net interest | 62,142 | 62,527 | 63,412 | 2.0% | 1.4% |
| Dividends and other income from equity investments | - | - | 6 | n.c. | n.c. |
| Net fee and commission income | 63,591 | 59,274 | 65,786 | 3.5% | 11.0% |
| Net trading, hedging and fair value income | 12,587 | 10,785 | 11,343 | -9.9% | 5.2% |
| Net other expenses/income | (1,486) | (793) | (2,176) | 46.4% | 174.4% |
| OPERATING INCOME | 136,834 | 131,793 | 138,371 | 1.1% | 5.0% |
| Payroll costs | (18,883) | (19,349) | (16,633) | -11.9% | -14.0% |
| Other administrative expenses | (59,238) | (53,141) | (57,254) | -3.3% | 7.7% |
| Recovery of expenses | 21,728 | 21,747 | 21,311 | -1.9% | -2.0% |
| Impairment/write-backs on intangible | |||||
| and intangible assets | (2,550) | (2,610) | (2,733) | 7.2% | 4.7% |
| Operating costs | (58,943) | (53,353) | (55,309) | -6.2% | 3.7% |
| OPERATING PROFIT (LOSS) | 77,891 | 78,440 | 83,062 | 6.6% | 5.9% |
| Net impairment losses on | |||||
| loans and provisions for guarantees and commitments | (2,576) | (720) | (678) | -73.7% | -5.8% |
| NET OPERATING PROFIT (LOSS) | 75,315 | 77,720 | 82,384 | 9.4% | 6.0% |
| Provisions for risks and charges | (10,474) | (11,342) | 3,914 | n.c. | n.c. |
| Integration costs | (1,246) | (3) | (5,493) | 340.9% 183000.0% | |
| Net income from investment | (1) | - | (6,724) | 672300.0% | n.c. |
| PROFIT (LOSS) BEFORE TAX | |||||
| FROM CONTINUING OPERATIONS | 63,594 | 66,375 | 74,081 | 16.5% | 11.6% |
| Income tax for the period | (21,373) | (21,784) | (24,610) | 15.1% | 13.0% |
| PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS |
42,221 | 44,591 | 49,471 | 17.2% | 10.9% |
| PROFIT (LOSS) FOR THE PERIOD | 42,221 | 44,591 | 49,471 | 17.2% | 10.9% |
As of January 1, 2016, net fee and commission income includes the income component connected to the service provided/received for the provision of securities relative to securities lending transactions collateralised by cash, previously recorded in interest expense/income. As a consequence, the corresponding figures for the previous year have been restated to enable like-for-like comparison, by an amount of €4.4 million (of which €1.1 million in 1Q15, €1.2 million in 2Q15, €1 million in 3Q15 and €1.1 million in 4Q15).
| Amounts as at | Changes | |||
|---|---|---|---|---|
| ASSETS | 31-dic-15 | 31-dic-16 | amount | % |
| Cash and cash balances | 6 | 5 | (1) | -16.7% |
| Financial assets held for trading | 3,983 | 6,044 | 2,061 | 51.7% |
| Loans and receivables with banks | 14,648,904 | 15,735,540 | 1,086,636 | 7.4% |
| Loans and receivables with customers | 922,774 | 1,016,798 | 94,024 | 10.2% |
| Financial investments flow | 2,245,982 | 3,757,529 | 1,511,547 | 67.3% |
| Hedging instruments | 10,573 | 9,211 | (1,362) | -12.9% |
| Property, plant and equipment | 12,419 | 14,451 | 2,032 | 16.4% |
| Goodwill | 89,602 | 89,602 | - | - |
| Other intangible assets | 8,212 | 7,731 | (481) | -5.9% |
| Tax assets | 15,424 | 13,165 | (2,259) | -14.6% |
| Other assets | 370,070 | 336,300 | (33,770) | -9.1% |
| Total assets | 18,327,949 | 20,986,376 | 2,658,427 | 14.5% |
(Amounts in € thousand)
| Amounts as at | Changes | |||
|---|---|---|---|---|
| LIABILITIES AND SHAREHOLDERS' EQUITY | 31-dic-15 | 31-dic-16 | amount | % |
| Deposits from banks | 1,423,459 | 1,111,106 | (312,353) | -21.9% |
| Deposits from customers | 15,822,459 | 18,801,073 | 2,978,614 | 18.8% |
| Financial liabilities held for trading | 4,100 | 2,626 | (1,474) | -36.0% |
| Hedging instruments | 31,319 | 11,371 | (19,948) | -63.7% |
| Provisions for risks and charges | 120,534 | 111,756 | (8,778) | -7.3% |
| Tax liabilities | 37,445 | 10,048 | (27,397) | -73.2% |
| Other liabilities | 255,835 | 257,097 | 1,262 | 0.5% |
| Shareholders' Equity | 632,798 | 681,299 | 48,501 | 7.7% |
| - capital and reserves - revaluation reserves (available-for-sale financial assets - |
430,119 | 476,249 | 46,130 | 10.7% |
| actuarial gains (losses) for defined benefits plans) | 11,626 | (6,794) | (18,420) | -158.4% |
| - net profit | 191,053 | 211,844 | 20,791 | 10.9% |
| Total liabilities and Shareholders' equity | 18,327,949 | 20,986,376 | 2,658,427 | 14.5% |
(Amounts in € thousand)
It is reported below a description of Alternative Performance Measures (APM) used in the present Press Release:
The undersigned, Lorena Pelliciari, in her capacity as the Manager charged with preparing FinecoBank S.p.A.'s financial reports
That, pursuant to Article 154 bis, paragraph 2, of the "Consolidated Law on Financial Intermediation" the information disclosed in this document corresponds to the accounting documents, books and records.
Manager charged with preparing the financial reports
3 Bank's products and/or services developed by investing in UCITs selected from among those distributed for each asset class taking into account customers' different risk profiles and offered to the Bank's customers under the guided open architecture model. At the date of this report, the guided products category included the "Core Series" umbrella fund of funds and the "Core Unit", "Advice Unit" and "Core Multiramo" and "Advice Top Valor" unit-linked policies, while the "Fineco Advice" and "Fineco Stars" advanced advisory services (for investment) fall under the guided service category.
FinecoBank is UniCredit Group's direct multichannel bank. It has one of the largest financial advisors' network in Italy*, and is the number one broker in Italy for equity trades in terms of volume of orders**. FinecoBank offers an integrated business model combining direct banking and financial advice, with a single free-of-charge account including banking, credit, trading and investment services, also available through applications for smartphone and tablet. With its fully integrated platform, FinecoBank is the benchmark for modern investors.
*Source: Assoreti **Source: Assosim
Contact info: Fineco - Media Relations Fineco - Investor Relations Tel.: +39 02 2887 2256 Tel. +39 335 580 5703 [email protected]om [email protected]
Barabino & Partners Tel. +39 02 72023535 Emma Ascani [email protected] +39 335 390 334
Tommaso Filippi [email protected] +39 366 644 4093
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