Banca Generali — Investor Presentation 2017

Nov 8, 2017

Informazione Regolamentata n. 0856-65-2017		Data/Ora Ricezione 08 Novembre 2017 13:13:13	MTA
Societa'	:	BANCA GENERALI
Identificativo Informazione Regolamentata	:	95598
Nome utilizzatore	:	BCAGENERALIN02 - Seghizzi
Tipologia	:	1.2
Data/Ora Ricezione	:	08 Novembre 2017 13:13:13
Data/Ora Inizio Diffusione presunta	:	08 Novembre 2017 13:13:13
Oggetto	:	Nine months Presentation
Testo del comunicato

Vedi allegato.

9M 2017 RESULTS

8 NOVEMBER 2017

Preliminary remarks

9M 2017 results

Net Inflows, assets and recruiting

Business update

EXECUTIVE SUMMARY

High-quality results, also including extraordinary one-off charges

Growing recurring revenues (+20%) boosted by business expansions New stream of revenues (advisory, trading) delivering on expectations (+38%) Flat operating costs providing evidence of operating leverage potential

Record-high business expansion, 2017 net inflows target raised to €6.5bn

• Net inflows in managed products tripled yoy (€4.4bn, +188%)
• Total assets at €53.8bn, well on track to €70bn target for 2021
• FA network growing both by number (1,922, +7%) and quality (avg. portfolio per FA at €28m,+11%)

TOTAL NET INFLOWS €5.2bn (+26%)

9M 2017 RESULTS: KEY TAKEAWAYS

(€ m)	9M 16 *	9M 17	% Chg
Net Interest Income	44.3	47.1	6.4%
Net income (loss) from trading activities and Dividends	30.6	14.1	-54.1%
Net Financial Income	74.9	61.2	-18.3%
Gross fees	446.4	554.2	24.2%
Fee expenses	-198.7	-231.1	16.3%
Net Fees	247.7	323.2	30.5%
Total Banking Income	322.6	384.3	19.1%
Staff expenses	-64.7	-63.3	-2.1%
Other general and administrative expense	-98.3	-106.5	8.3%
Other net operating income (expense)	28.0	36.5	30.5%
Depreciation and amortisation	-3.5	-5.8	64.5%
Total operating costs	-138.6	-139.2	0.4%
Cost /Income Ratio	41.9%	34.7%	-7.2 p.p.
Operating Profit	184.0	245.2	33.3%
Net adjustments for impair.loans and other assets	-0.8	-6.0	666.5%
Net provisions for liabilities and contingencies	-41.7	-64.0	53.5%
Profit Before Taxation	141.5	175.0	23.7%
Direct income taxes	-22.8	-27.7	21.2%
Tax rate	16.1%	15.8%	-0.3 p.p.
Net Profit	118.6	147.4	24.2%

STRONG TOTAL BANKING INCOME (+19%)

Healthy business trend reflected in sharply higher recurring fees and solid margin trend

OPERATING COSTS +0.4%

highlighting tight cost discipline and operating leverage potential

ONE-OFF CHARGE OF €3.7M FOR BANK RESCUE FUNDS

accounted as write-offs

HIGHER PROVISIONS LINKED TO RECORD-HIGH INFLOWS

Preliminary remarks

9M 2017 results

Net Inflows, assets and recruiting

Business update

REVENUES: NET FINANCIAL INCOME

NET INTEREST INCOME + TRADING INCOME

INTEREST-BEARING ASSETS

DIVERGING TREND

Net Interest Income + 6% yoy Proprietary trading -54% yoy

BANKING BOOK at €5.8bn (+18%)

93% government, 56% floating rate, 1.7 yrs duration, 3.9 yrs maturity

GROWING LENDING ACTIVITY

Volumes up (€1.8bn, +4%) and spread broadly stable

REVENUES: NET FEE INCOME (1/2) GROWING RECURRING FEES

FEE INCOME BREAKDOWN

PAY-OUT RATIO STABLE AT 49.0% (vs. 50.5% in 9M16)

REVENUES: MANAGEMENT FEES & MARGIN QUARTERLY TREND

REVENUES: BANKING FEES QUARTERLY TREND

BREAKDOWN OF ANNUALISED FEE-MARGIN GROSS MARGINS

MANAGEMENT FEE ENTRY FEES

BANKING FEE AND TRADING PERFORMANCE FEES

OPERATING COSTS BREAKDOWN FLAT COSTS PROVING MUCH BETTER THAN GUIDANCE

TOTAL OPERATING COSTS +0.4% VS. GUIDANCE OF >+2%< +4%

COST RATIOS OPERATING LEVERAGE

REPORTED COST-INCOME RATIO AT 34.7% (VS. 41.9% in 9M16)

(1) Based on pro-forma year-end revenues excluding performance fees and including expenses for organic growth currently accounted within provisions

PROVISIONS DIFFERENT RECRUITING PATTERNS

INCREASE IN PROVISIONS LINKED TO A SPIKE IN RECRUITING ACTIVITY

RECRUITING ACTIVITY EXPECTED TO REVERT TO MEAN OVER NEXT FEW QUARTERS

MOST OF THE PROVISIONS FOR ORGANIC GROWTH WILL MOVE TO COMMISSION EXPENSES BY YEAR-END

SOLID CAPITAL POSITION CAPITAL RATIOS FURTHER IMPROVING

CET1 RATIO TOTAL CAPITAL RATIO

SREP requirements: Minimum capital requirements specified for Banca Generali by the Bank of Italy as a result of the Supervisory Review and Evaluation Process (SREP). Capital ratios are compliant with B3 requirements (phased-in basis). On a fully-phased basis: CET 1 ratio at 18.2%, TCR at 19.9%

Preliminary remarks

9M 2017 results

Net Inflows, assets and recruiting

Business update

COMMERCIAL RESULTS (1/3) NET INFLOWS AT 10.8% OF STARTING ASSETS

Banca Generali's share of Assoreti net inflows

COMMERCIAL RESULTS (2/3) UPGRADE IN YEAR-END NET INFLOWS TARGET

COMMERCIAL RESULTS (3/3) MANAGED SOLUTIONS TRIPLED YOY

Banking products Traditional life policies Managed solutions

(*) including discretionary mandates

Insurance wrappers Financial wrappers*

Funds/SICAVs FoFs

1.9

WRAPPER SOLUTIONS FASTER TOWARDS TARGETS

ASSETS IN WRAPPERS AND DISCRETIONARY MANDATES AT 25% OF TOTAL ASSETS

Traditional discretionary mandates to be transformed into wrappers by year-end on MIFID II

TOTAL ASSETS BY PRODUCT CATEGORY RECORD GROWTH OF MANAGED SOLUTIONS

Strong growth of FINANCIAL WRAPPERS (+73%) and FUNDS/SICAVS (+45%)

DECREASING EXPOSURE TO FOF (BG SELECTION)

(*) including discretionary mandates

(BN/€)

BG FUND MANAGEMENT GROWTH DRIVEN BY THE INSTITUTIONAL COMPONENT

ASSETS REBALANCING in favour of institutional fund classes (57% of total vs. 19% in 2012)

No. OF NEW RECRUITS

No. OF NEW RECRUITS BY QUARTER

Cost of recruitment at 2.35% (ex ante), 60% of which charged in the first 12 months rolling Pay back period: 3Y 3M and IRR (net of tax) at 30% well above cost of capital

Preliminary remarks

9M 2017 results

Net Inflows, assets and recruiting

Business update

BUSINESS MODEL STRATEGIC PILLARS

QUALITY OF THE NETWORK - PROFILE MOVING PRIVATE FAS GROWING BY QUALITY

QUALITY OF THE NETWORK - PROFILE MOVING PRIVATE CUSTOMER BASE FOLLOWING

No. of clients (>€10K) and related assets

clients <€100K clients <€500K clients > €500k

Data as of 30.09.2017

WM APPROACH – PRODUCTS - ONGOING INNOVATION DISTINCTIVE PRODUCT OFFER FOR HNW CLIENTS

DEDICATED INVESTMENT VEHICLES FOR INSTITUTIONAL/PROFESSIONAL CLIENTS

BG NEXT (AUM €255m)

ASSET CLASSES Private debt - Loans - NPL - CMBS CONTRACT Multiline discretionary mandates

RATIONALE RATIONALE

PRODUCT OFFER REVIEW - new macro themes/client needs

NEW LUX-BASED SICAV

PRODUCT SUSTAINABILITY - MIFID II

PRICING SUSTAINABILITY - cap on ongoing charges (OCG)

LAUNCH DATE - 1Q 2018

BG ALTERNATIVE SICAV (AUM €140m)

ASSET CLASSES Bank loans - CMBS Real-estate (Debt & Equity)

CONTRACT Advanced advisory

ROADMAP

1st wave – 1Q18 - 10/20 new strategies 2nd wave - 2Q18 – 10/15 new strategies 3rd wave – 2H18 – 15/20 new strategies

Focus of next confcall

PARTNERSHIP WITH SAXO (1/3) THE REASON WHY

A. PRESENCE IN 180 COUNTRIES, USD12.0BN DAILY TRADED VOLUMES

• B. STATE OF THE ART MULTI-ASSET TRADING PLATFORM WITH ONGOING INVESTMENTS IN IT INFRASTRUCTURE
• C. WELL-KNOWN BRAND WORLDWIDE BOTH IN THE B2C AND B2B2C (WHITE LABEL BUSINESS)

PARTNERSHIP WITH SAXO (2/3) NEW PARTNERSHIP SAXO-BANCA GENERALI

• A. EXCLUSIVE AGREEMENT FOR THE ITALIAN MARKET Banca Generali as reference bank
• B. SET-UP OF NEW BROKERAGE FIRM 80.1% controlled by Saxo and 19.9% by Banca Generali
• C. SHARED GOVERNANCE veto rights in favour of Banca Generali on selected relevant subjects
• D. REVENUE SHARING AGREEMENT based on customer ownership and customer origination

PARTNERSHIP WITH SAXO (3/3) LONG-TERM TARGET

AS IS

BG customers (B2B) with a security account

• 25K (10% of total customer base)
• Total security rotation: 90% (vs. peers 142% to 572%)
• Online rotation at 31% (vs. peers 100% to 536%)

4Y TARGET

Est. customers of the Newco

• 40K (+15K in four years)
• Launch of hedging strategies for SMEs
• • Additional trading fees in 4 years at €10-15m

NEW PARTNERSHIP TO START IN 2H 2018

BUSINESS RECOGNITION QUALITY REWARDED

Banca Generali was also ranked No. 2 by brand equity in private banking (vs. No. 4 in 2016 and No. 5 in 2015) - in the 'Private Banker Monitor' of GfK Eurisko in association with AIPB

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 accounting records. T. Di Russo, CFO

Certain statements contained herein are statements of future expectations and other forward-looking statements.

These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties.

The user of such information should recognize that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions.

Neither Banca Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document.

Investor Relations

Giuliana Pagliari Investor Relations Manager Phone +39 02 6076 5548 Mobile +39 331 65 30 620

E-mail: giuliana.pagliari@bancagenerali.it E-mail: investor.relations@bancagenerali.it

Corporate Website www.bancagenerali.com

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