Banca Generali — Investor Presentation 2021

May 12, 2021

Informazione Regolamentata n. 0856-34-2021		Data/Ora Ricezione 12 Maggio 2021 10:25:02	MTA
Societa'	:	BANCA GENERALI
Identificativo Informazione Regolamentata	:	146962
Nome utilizzatore	:	BCAGENERALIN03 - Pastore
Tipologia	:	1.2
Data/Ora Ricezione	:	12 Maggio 2021 10:25:02
Data/Ora Inizio Diffusione presunta	:	12 Maggio 2021 10:25:03
Oggetto	:	Banca Generali: 1Q 21 Investor Presentation
Testo del comunicato

Vedi allegato.

1Q 2021 RESULTS AND BUSINESS REVIEW

11 MAY 2021

Our Vision: To Be the No.1 Private Bank unique by Value of Service, Innovation and Sustainability

Preliminary remarks

1Q 2021 Financial Results

Net Inflows, Assets and recruiting

Business update and closing remarks

Appendix

1Q 2021 RESULTS: EXECUTIVE SUMMARY STRONG START TO THE FINAL YEAR OF THE 2019-21 BUSINESS PLAN

Total Assets at €77.5bn (+19% YoY, +4% YTD)

• Improved Asset Mix driven by Managed Solutions (+30%) and Asset under Custody (+33%). Managed solutions reached 50.7% of total assets from 46.3% a year ago. Steady growth also in Assets under Advisory to €6.5bn (+40% YoY) as investment and holistic advisory catch on amongst clients and FAs
• Net inflows growing by volumes (€1.7bn, +11%) and quality with managed solutions representing 77% of total (vs. 17% in 1Q20). Positive contribution from existing FAs coupled with stronger push of new recruits after subdued trend last year due to the pandemic

Net profit at €135.4m (+71%),

• Strong operating trend coupled with financial markets' tailwinds. Sound management fee margin benefitting from the initiatives driving growth in managed solutions. 2021 guidance extended to perimeter including new acquisitions
• Recurring net profit at €37.2m (+13%) thanks to the strong trend in recurring fees coupled with sound cost control reflecting operating leverage drive results, which also incorporate higher provisions due to the sustained business expansion

3

Capital strength even after 1Q21 earnings' allocation to dividend¹

• Sound capital ratios (CET1 at 16.2% and TCR at 17.5%) with seasonal 1Q21 slowdown linked to 100% destination of 1Q profit to cover 2021 dividend payment in line with the Dividend Policy¹ in force (3.6% minimum dividend yield YTD² )
• 1Q 2021 Capital ratios also incorporate also the distribution of €3.3/share dividends with reference to 2019/20 earnings as approved by Banca Generali's AGM on 22 April. The €3.3/share distribution is embedded in 1Q 2021 capital ratios and it amounts to 10.5 pps on capital ratios

RESULTS AT A GLANCE KEY TAKEAWAYS

(€ mil)	1Q 20	1Q 21	% Chg
Net Interest Income	20.2	21.7	7.4%
income (loss) from trading activities and Dividends Net	4.0	2.9	-25.9%
Financial Net Income	24.2	24.7	1.9%
fees Gross recurring	195.5	221.2	13.1%
Fee expenses	-104.4	-117.0	12.1%
fees Net recurring	91.1	104.1	14.3%
Variable fees	53.4	111.0	107.9%
Total Net Fees	144.5	215.2	48.9%
Total Banking Income	168.8	239.9	42.1%
Staff expenses	-25.7	-26.4	3.0%
Other general and administrative expense	-21.4	-22.3	4.1%
and Depreciation amortisation	-7.7	-8.2	6.1%
(expense) Other operating income net	0.8	0.9	21.5%
Total operating costs	-54.1	-56.0	3.6%
/Income Cost Ratio	27.5%	19.9%	-7.6 p.p.
Profit Operating	114.7	183.8	60.3%
adjustments for impair.loans and other Net assets	-1.1	-1.4	30.8%
for liabilities and Net provisions contingencies	-8.2	-11.3	37.4%
Contributions banking funds to	-3.1	-4.6	51.6%
(loss) from disposal of Gain equity investments	0.0	-0.1	59.5%
Profit Before Taxation	102.3	166.4	62.7%
Direct income taxes	-23.2	-31.0	33.5%
Tax rate	22.7%	18.6%	-4.1 p.p.
Profit Net	79 1	135 4	3% 71

Comments

Booming revenues driven by asset growth and performance (+42%)

• Net Financial Income (+1.9%) slightly higher driven by Net Interest Income more than offsetting lower trading income
• Net Recurring Fees (+14%) benefitted from asset expansion and higher-quality product mix. Total pay-out ratio also declined
• Record contribution from variable fees thanks to positive financial markets

Operating profit (+60%) lifted by operating leverage

• Total operating costs (+3.6%) well within guidance amid tight staff cost control
• Costs/total assets falling to new low of 0.29% (-1bps ytd) and Cost/Income (ex performance fees) at 36.6%, both suggesting operating leverage at full swing

Higher non-operating charges (+40%)

• Spike in provisions primarily linked to FA loyalty plan and other FA provisions with a seasonal trend
• Higher contribution to banking funds (+52%)

Net profit at €135.4m (+71.3%)

Tax-rate temporarily below guidance on record variable fees

NET PROFIT BREAKDOWN RECURRING NET PROFIT DRIVEN BY A SOLID OPERATING TREND

5

NOTE: 1) Data fully reclassified on a reported basis (i.e. including Nextam and Valeur). Recurring net profit is also net of one-off M&A costs (€0.8m), change in assumptions on actuarial funds (+€1.6m). The 1Q20 reclassified accordingly.

AGENDA

Our Vision: To Be the

No.1 Private Bank unique by Value of Service, Innovation and Sustainability

1Q 2021 Financial Results

Net Inflows, Assets and recruiting

Business update and closing remarks

Appendix

NET FINANCIAL INCOME INTEREST RATE HEADWINDS OFFSET BY HIGHER VOLUMES AND TLTRO

Net Financial Income m/€

Total Assets and Interest-bearing Assets bn/€

Net Interest Income (NII) posted a 7.4% increase YoY, yet -3.6% QoQ amid volumes/rate trend

Cost of funding turned from 1 bps to -5bps providing support to NII yield

TLTRO contribution boosted by €200m at the end of March to total €700m

2021 year-end NII guidance of -2%/-3% YoY confirmed

GROSS FEES POSITIVELY GEARED TO MANAGED SOLUTIONS AND NEW REVENUE STREAMS

MANAGEMENT FEES EXTENDING 2021 MARGIN GUIDANCE TO FULL PERIMETER IN LIGHT OF BUOYANT ASSET TREND

Quarterly trend m/€

Management fees (+13% YoY, +5% QoQ) benefitted from the higher exposure to equity and in-house products coupled with overall higher margin from insurance products

Management fee margin reclassified to include recent acquisitions (Nextam and Valeur)

2021 management fee margin guidance of 1.38%-1.42% extended to enlarged perimeter (i.e. including M&As)

BANKING AND ENTRY FEES BANKING FEES STRONGER, ENTRY FEES IN LINE WITH GUIDANCE

On

Breakdown by Mix m/€

New revenue streams Transactional banking, front fees

New Revenue streams on tot. recurring revenues

Banking fees posted a strong increase (+32% YoY, +26% QoQ) driven by Advanced Advisory and Brokerage services

Front fees were in line with guidance after 1Q20 spike in certificates

Other transactional banking and front fees benefitted from higher activity on primary markets and other brokerage

NEW REVENUE STREAMS SOLID DELIVERY IN LINE WITH GUIDANCE

Retail Brokerage revenues (+20%) thanks to growing average turnover (1.09x vs. 1.05x at 2020YE and 0.96x at 2019YE) and more profitable mix (more derivatives, equities and foreign markets)

Certificates performing in line with long-term guidance, yet with unfavorable YoY comparison on exceptional 1Q20 activity

ADVANCED ADVISORY

RETAIL BROKERAGE

Retail brokerage volumes bn/€

'21

Notional new issues m/€

5.9 5.7 7.1

5.7 6.7 7.4

1Q20 4Q20 1Q21 2021E

≥ 30

≥ 25

1Q20 4Q20 1Q21 2021E

STRUCTURED PRODUCTS

FEE EXPENSES PAY-OUT RATIO DECREASING ON LOWER COST OF GROWTH

Lower pay-out to the network benefitting from lower cost of growth reflecting reduced recruitment activity over past two years

parties slightly increasing due to higher activity on Ro4AD and trading platforms

OPERATING COSTS (1/2) ONGOING COST DISCIPLINE DESPITE BUSINESS EXPANSION

Sales personnel Core operating costs

Total operating costs1,2 m/€ Breakdown of core operating costs1,2 m/€

19.0 19.7 20.7

Colonna1 1Q 20

Restated (incl. Netam & Valeur)

18.9 21.0 21.7

7.5 8.0

48.2 50.4

+4.6%

1Q 21

Total and 'Core' operating costs reclassified to incorporate recent acquisitions line-by-line.

Total operating costs (+3.6%) posted a limited increase on lower one-offs and stable sales personnel costs

'Core' operating costs (+4.6%) increased within guidance even after ongoing push on growth, launch of new IT projects and other costs for logistics for the FA network

2021 'Core' operating cost guidance of +3-5% extended to enlarged perimeter (i.e. including M&A)

7.3

45.2

OPERATING COSTS (2/2) OPERATING LEVERAGE AT ITS BEST IN THE QUARTER

Operating costs/Total assets¹ Cost/Income ratio¹ 0.51% 0.45% 0.40% 0.37% 0.33% 0.33% 0.31% 0.30% 0.29% 2013 2014 2015 2016 2017 2018 2019 2020 1Q 21 40.3% 41.0% 36.2% 44.3% 38.9% 40.0% 30.9% 31.5% 52.6% 53.4% 51.1% 53.9% 52.3% 42.3% 39.6% 40.2% 36.6% 2013 2014 2015 2016 2017 2018 2019 2020 1Q 21

Reported Cost/Income Adjusted Cost/Income ²

19.9%

CAPITAL RATIOS SOUND CAPITAL POSITION REAFFIRMED AMID COMMITMENT TO DIVIDEND DISTRIBUTION

Capital strength confirmed after seasonality linked to destination of full 1Q21 earnings to cover 2021 dividend policy

Capital absorption in the quarter driven by banking book diversification and higher lending activity

2020 Reported capital ratios are calculated net of the 2019-2020 cumulative dividend per share of €3.3 (€386 million) approved by last AGM on 22 April 2021

15 NOTE: 1) 2019-21 dividend policy is based on a 70-80% earnings' pay-out ratio with a yearly DPS floor at €1.25. The dividend floor distribution is subject to the level of TCR within the RAF and it must not exceed a 100% earnings' pay-out

AGENDA

Our Vision: To Be the No.1 Private Bank unique by Value of Service, Innovation and Sustainability

1Q 2021 Financial Results

Net Inflows, Assets and recruiting

Business update and closing remarks

Appendix

TOTAL ASSETS NEW HIGHS WITH IMPROVING MIX

Banking products Traditional life policies Managed solutions

Managed Solutions bn/€

Managed solutions (+30% YoY, +5% YTD) driven mostly by funds/SICAVs and insurance wrappers.

Traditional life assets (-1% YoY and YTD) structurally lower in light of ultra-low interest rate environment

Assets under Custody (+33% YoY, +8% YTD) benefitting from the upgrading offer in advanced advisory, structured products and brokerage platform

NET INFLOWS HIGH-QUALITY MIX FOCUSSED ON MANAGED SOLUTIONS

Total net inflows m/€ Managed solutions, m/€

Sound growth in volumes (+11%) with significantly better product mix

Booming managed solutions (4x higher than 1Q20) with positive trend in all product lines

Positive net inflows in AuC products bearing fruits of enhanced focus on products and services through advanced advisory/Ro4AD, brokerage and structured products

TOTAL NET INFLOWS RECOVERY IN RECRUITING ACTIVITY AFTER LOCKDOWN LIMITS

Recruitment trend (# of Recruits)

From Retail and Private Banks From other FA Networks

Recruiting activity resumed after the slowdown linked to pandemic

Growth remains well balanced with organic contribution sticky in absolute value at €1.1bn

Recruiting target for the year confirmed at 80-100 professionals by year-end

APRIL 2021 COMMERCIAL UPDATE ROBUST NET INFLOWS DRIVEN BY MANAGED SOLUTIONS

Managed solutions, bn/€

Funds/Sicavs

• Financial wrappers
• Insurance wrappers

Assets under Advisory bn/€

AGENDA

Our Vision: To Be the No.1 Private Bank unique by Value of Service, Innovation and Sustainability

1Q 2021 Financial Results

Net Inflows, Assets and recruiting

Appendix

GROWTH (1/2) - 3 YEAR BUSINESS PLAN TARGET ALREADY ACHIEVED FOCUS ON QUALITY OF CLIENTS NOT NUMBER

Assets and No. of Clients, bn/€, '000

GROWTH (2/2) – 3 YEAR BUSINESS PLAN TARGET ALREADY ACHIEVED DELIVERING ON PRIVATE CLIENTS AS STATED IN THE 3Y PLAN

VALUE (1/3) – IMPROVED ASSET QUALITY MANAGED SOLUTIONS REPRESENTING THE BULK OF ASSET GROWTH

Equity exposure/Total Assets %

44% of 2019-21 assets growth YTD in managed solutions (+€12bn YTD)

Equity exposure currently at 5 years high at 26.4% of total assets (c. 47% of managed solutions YTD)

VALUE (2/3) – IMPROVED ASSET QUALITY LUX IM EXPECTED TO LEAD GROWTH THANKS TO ONGOING INNOVATION

WAP¹ In-house assets (BG FML) of BG FML

Sound asset growth supported by positive performance delivery to clients net of any fees

Overall growth expected to continue with fourth wave of new fund launching (authorization expected by June/July 2021)

VALUE (3/3) – IMPROVED ASSET MIX ESG PROVING AS A KEY GROWTH DRIVER FOR MANAGED SOLUTIONS

26

Unique ESG commercial approach based on a dedicated IT proprietary platform, in-depth analysis of ESG features and link to each individual SDG for 230 funds/SICAVs, performance

ESG strategies representing 13.6% of total managed solutions as of 1Q21. LUX IM represents 52% of total ESG assets.

CLOSING REMARKS SOLID FOUNDATIONS ON WHICH TO BUILD THE NEW BUSINESS PLAN

Objective	KPIs	2021 Targets	2019-1Q21 Results	Score
Asset growth	Cumulative Net Inflows Total Assets	>14.5 bn/€ 76-80 bn/€	12.7 bn/€ 77.5 bn/€
Sustainable profitability	Core Net Banking Income1 'Core' Operating Costs1 :	≥63 bps 3%- 5% CAGR	67 bps 4.6%2
Shareholders' remuneration	Dividend pay-out Dividend per share	70%-80% pay-out ratio DPS (1.25€) set as a floor	2019/20 avg. 70.5% 2019/20 cumulative €3.3 p.s.

AGENDA

Our Vision: To Be the No.1 Private Bank unique by Value of Service, Innovation and Sustainability

1Q 2021 Financial Results

Net Inflows, Assets and recruiting

Business update and closing remarks

Appendix

2021 BUSINESS INITIATIVES

KEY BUSINESS DRIVERS - LUX IM NEW TOOLS SUPPORTING LUX IM GROWTH

Savings Plans: Net inflows in LUX IM m/€

A

Switch Plans: Net Inflows in Funds m/€

Strong delivery of new tools linked to LUX IM:

PAC (Savings plans):

almost doubled by number since the start of the year. Decent size (€40K) and length (five years) on average

TWIN MIX (Switch plans): solid growth of assets invested in low volatility funds to be switched into higher volatility sub-funds within LUX IM offer

KEY BUSINESS DRIVERS - ESG DISTINCTIVE APPROACH TO ESG DELIVERING ABOVE EXPECTATION

ESG assets split by managed solutions

Financial wrappers

ESG Funds/SICAVs:

244 ESG funds (+21 strategies YTD, +52 YoY)

New products

LUX IM expected to double offer (from 14 to 28 ESG lines) with focus on current and new ESG investment approaches, new generation sustainable themes, health-related strategies

KEY BUSINESS DRIVERS - INSURANCE INSURANCE OFFER TURNING TOWARDS WRAPPER SOLUTIONS C

Insurance wrappers

Traditional life policies (LOB1)

Total Insurance assets

Insurance products

• Hybrid solution combining on average 30-40% of LOB1 with single funds/securities and ETF

• Private insurance with flexible booking and AM centers and dedicated lines for HNWI

• New saving plans with insurance waivers linked to tailor-made clients' objectives

Growing focus on wrapper solutions in light of current ultra-low rate environment

Diversified insurance solutions for different client needs, all combining high level of personalization

• BG Stile Libero bespoke insurance wrappers with distinctive waivers leveraging on Assicurazioni Generali's expertise
• LUX Protection Life insurance solutions for HNWI for wealth and succession planning
• BG Progetti di Vita Savings plas with insurance covers linked to life

NEW REVENUE STREAMS GROWING BUSINESS DIVERSIFICATION IN FULL SWINGS D-E-F

Three advisory levels: investment advisory, holistic advisory, illiquid products

Growing dissemination amongst FAs (64% of total FAs vs. from 59% in 2019)

Success amongst private clients (€600K/avg. contract)

BG Certificate hub - A fully-fledged platform to approach structured products as a tool for yield enhancement and an instrument for tactical asset allocation

Better trading mix with growing equity and international exposure. Positive start to CFDs

Large investable space with 19,000 equity instruments on 36 markets, 5,000 corporate and govt. bonds, 3,000 ETFs on 30 exchanges, 9,000 CFDs

Others GBP USD EUR

9.4 9.4

BG SAXO

Generali

NEW BUSINESS LEVERS - LOMBARD LENDING STEADY GROWTH IN SECURED LOANS

Steady growth in new loans 1Q21 new drawn loans at €62 vs. €10m in 1Q21 (€264m in 2020)

Well diversified and secured lending

Lending policy focused on the existing Client base, well diversified and with State Guarantees on corporate loans

Collateral assets

Lombard loans are backed by financial assets, whose market value is significantly higher than book value

G

NEW BUSINESS LEVERS - PRIVATE MARKETS GROWING SUBSCRIPTION

Client target

Clients' AUM thresholds for access to the product:

• FIA for Clients with AUM> €500K
• ELTIF for Clients with AUM > €250K

Minimum investment size requested:

• FIA €100K
• ELTIF €10K

Subscriptions in progress

Net inflows growing steadily (~€90m YTD) amid strict thresholds and enhanced controls for retail Clients due long holding period (above 6 years) and illiquidity

BG's ecosystem

Exclusive partnership with International VC and research centers to select coinvestment opportunities

H

NEW BUSINESS LEVERS - INTERNATIONAL EXPANSION TEMPORARY SLOWDOWN DUE TO THE PANDEMIC AND LOWER RISK PERCEPTION

Three drivers

I

made investment lines

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.