2008 First Quarter Results 2008 First Quarter Results and and Banca Banca del del Gottardo Gottardo I talia Acquisition I talia Acquisition Giorgio Girelli, CEO Milan, May 06, 2008
Today’ Today ’s Agenda s Agenda 1Q-08 Results 1Q08 Results key messages in a nutshell � We are delivering in line with our strategy to cope with a tough 2008: Net I nflows were positive by €171 million in 1Q08 and gross inflows in new strategic products is proceeding ahead of targets (€760 million in life products, €920 million in BG-Lux products and €300 m in BG Target YTD) � Positive industrial results even within an horrible market landscape: growth in industrial net income and continuous reduction in operative costs � An impressive spread widening in corporate bond (I traxx from 40 bp at 2007YE to 91 bp at March 31) reflected on our 1Q08 reported net profit � No benefits on the tax-side accounted, yet � We fully confirm our 2009 net profit target in a €70-€80 million range (before accounting the positive impact expected from the Banca del Gottardo I talia acquisition) Banca del Gottardo I talia Acquisition 2 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
1Q-08 Results Delivering on 1Q08 Net I nflows target even with Delivering on 1Q08 Net I nflows target even with unfavourable unfavourable market conditions market conditions 1Q08 Net I nflows Ranking by Groups 1Q08 Net I nflows Ranking by Groups (€ m) 36% 36% 34% 34% 555 530 14% 14% 13% 13% 11% 11% 223 10% 10% 199 171 7% 7% 159 6% 6% 107 2% 73 2% 2% 2% 1% 1% 1% 1% 33 F&F Investitori Gruppo 23 Banca Credit 13 11 3 Banca SGR AXA Credem Sara Suisse Fineco Banca Allianz Gruppo Gruppo Banca Gruppo MPS Gruppo Unicredit Banca Gruppo (3) Others (12) Bank Mediolanum Bank Banca Network UBI Azimut CR Firenze Fideuram Banca Xelion Veneto (40) Generali Investimenti (43) Personale Banca Banca -1% -1% -3% -3% -3% -3% (134) Source: Assoreti -9% -9% (327) Data at March 31, 2008 -21% -21% Net I nflows by Company Net I nflows by Asset Class Net I nflows (€ m) (€ m) 171 Strong results in Lux-Based Products in private banking 327 171 (€ m cumulative) and BG counterbalancing 111 1,035 500 poor 105 600 Simgenia (45) (656) contribution 1Q08 March April 08 08 1Q08 BG BSI Italia Simgenia Managed Asset Life Insurance Administered Asset 3 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
1Q-08 Results 1Q08 Results: Key Remarks 1Q08 Results: Key Remarks � The company operated in one of the worst business environment of the last � The company operated in one of the worst business environment of the last Unfavourable Unfavourable decades, due to a combination of poor equity markets (equity stock indexes -16% decades, due to a combination of poor equity markets (equity stock indexes -16% Financial markets Financial markets on average in the quarter) and poor credit markets (ITraxx + 51 bp in the period). on average in the quarter) and poor credit markets (ITraxx + 51 bp in the period). � Despite poor 1Q08 financial markets, industrial results on an adjusted basis posted: � Despite poor 1Q08 financial markets, industrial results on an adjusted basis posted: � + 2% net banking income � + 2% net banking income � -0.7% staff and administrative expenses despite the launch of the � -0.7% staff and administrative expenses despite the launch of the Good industrial Good industrial new Lux-based unit and the new labour contract signed with Banking Trade new Lux-based unit and the new labour contract signed with Banking Trade Performance Performance Unions Unions � + 48% Adjusted Pre-Tax Profit � + 48% Adjusted Pre-Tax Profit � + 84% Adjusted Net Profit � + 84% Adjusted Net Profit � � As corporate bond spreads reached new peaks in 1Q08, Banca Generali posted As corporate bond spreads reached new peaks in 1Q08, Banca Generali posted Corporate Spread Corporate Spread €13.6 million of unrealised capital losses on its HFT investment portfolio. About €13.6 million of unrealised capital losses on its HFT investment portfolio. About Widening Widening 80% of these losses are related to corporate bonds of European banks 80% of these losses are related to corporate bonds of European banks 4 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
1Q-08 Results Consolidated Profit and Loss 1Q08 Results: Key Comments Consolidated Profit and Loss 1Q08 Results: Key Comments (€ m) 1Q 07 1Q 08 % Chg 1Q 08 (Adj) % Chg (1) (1) Net I nterest I ncom e 9 .8 1 4 .0 4 2 .9 % 1 4 .0 4 2 .9 % Strong increase in Net Interest Income Commission income 74.4 66.6 -10.6% 66.6 -10.6% Commission expense -34.2 -29.5 -13.8% -29.5 -13.8% (2) Net commissions fell only by 8% despite (2) Net Com m ission 4 0 .2 3 7 .0 -7 .9 % 3 7 .0 -7 .9 % 1Q07 benefited from €6 million of Net income (loss) from trading activities 1.6 1.8 9.5% 1.8 9.5% non-recurring fees and despite AUM Unrealized gain (loss) at fair value 0.1 -13.6 n.m. 0.0 n.m. decrease due to market trend Dividends 0.0 0.1 n.m. 0.1 n.m. (3) (3) Net Banking I ncom e 5 1 .6 3 9 .2 -2 4 .0 % 5 2 .8 2 .2 % Net banking income up 2.2% excluding Staff expenses -14.1 -14.2 0.8% -14.2 0.8% unrealised losses on HFT portfolio Other general and administrative expense -16.8 -16.4 -1.9% -16.4 -1.9% -30.8 -30.6 (4) -0.7% -30.6 -0.7% (4) Operating costs constantly decreasing Depreciation and amortisation -1.6 -1.3 -18.7% -1.3 -18.7% Other net operating income (expense) 2.4 1.2 -50.3% 1.2 -50.3% Net Operating Expenses -3 0 .0 -3 0 .7 2 .3 % -3 0 .7 2 .3 % Operating Profit 2 1 .6 8 .5 -6 0 .6 % 2 2 .1 2 .1 % Net adjustments for impair.loans and other assets 0.0 0.1 n.m. 0.1 n.m. (5) (5) 1Q08 provisions representing about Net provisions for liabilities and contingencies -12.0 -7.9 -34.1% -7.9 -34.1% 50% of the year-end target Gain (loss) from disposal of equity investments 0.0 0.0 0.0% 0.0 0.0% Profit Before Taxation 9 .6 0 .7 -9 3 .2 % 1 4 .2 4 7 .9 % (6) (6) Direct income taxes -4.9 -1.3 -73.2% -5.6 13.5% Impact of IRAP payment to be reabsorbed (7) Net Profit 4 .7 -0 .7 -1 1 4 .2 % 8 .6 8 3 .9 % in the next quarter Cost / I ncom e Ratio 5 5 .1 % 7 5 .0 % 1 9 .9 p.p. 5 5 .8 % 0 .7 p.p. (7) Adjusted net profit nearly doubled EBI TDA 2 3 .2 9 .8 -5 7 .8 % 2 3 .4 0 .7 % Note: 1Q08 Net Profit Adjusted for € 13.6 m of unrealised capital losses at fair value on the trading investment portfolio (HFT) 5 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
1Q-08 Results 1Q08 up 80% , when adjusting for the I mpact of Corporate Credit S 1Q08 up 80% , when adjusting for the I mpact of Corporate Credit Spreads Movement preads Movement I traxx Europe Senior Financials Net Profit I traxx Europe Senior Financials Net Profit (€ m) + 84% 160 March 17, 2008 152 bps 140 120 8.6 March 31, 2007 91.33 bps 100 4.7 December 31, 2007 80 40 bps July 16, 2007 60 10.65 bps 40 (0.7) 20 0 Jan-07 Mar-07 Jun-07 Sep-07 Dec-07 Feb-08 1Q08 1Q07 1Q08 Adj (* ) Source: Bloomberg � I traxx + 51bp in 1Q08 (to 91 bp at March, 31) � Reported Net Profit penalised by €13.6 million of � Reported Net Profit penalised by €13.6 million of � I traxx + 81 bp from mid July 2007 to March, 31 2008 unrealised Capital Losses on our trading portfolio unrealised Capital Losses on our trading portfolio (* ) 1Q08 Net Profit Adjusted for € 13.6 m of unrealised capital losses at fair value on the trading investment portfolio (HFT) 6 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
1Q-08 Results I nvestment Portfolio Portfolio – – Unrealised Unrealised Capital Capital Losses Losses mostly mostly coming coming from from Corporate Corporate bonds bonds on on European European banks banks I nvestment I nvestment Portfolio HFT Unrealised Losses Breakdown I nvestment Portfolio HFT Unrealised Losses Breakdown 1% Equities (0.04) 8% Credits (0.3) 20% Equities (2.7) 24% I nterbanking (0.9) HFT (1.8) 67% Bonds (2.6) AFS (0.8) 80% Bonds (10.9) Total €3.8 bn Total €13.6 m HFT Bond Portfolio Details HFT Bond Portfolio Details Rating I nterest Rate Maturities BB+ / BB- 0.3% BBB+ / BBB- 3.1% 14% Fixed > 5Y 12% 86% Floating 3-5Y 26% AAA 29.9% A+ / A- 40.5% AA+ / AA- 26.2% < 3Y 62% 7 Banca Generali 2008 First Quarter Results and Banca del Gottardo Italia Acquisition
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