FY 2015 Results and Business Outlook 10 February 2016
Best results ever BOOMING BUSINESS VOLUMES Best net profit ever • Record net inflows at € 4.6bn (+37% on a LfL basis) 203.6 • Highest assets ever at € 41.6bn (+14% yoy) • Size of the network at 1,715 (+4% yoy, +18% 3yrs) 160.9 141.3 RECORD FINANCIAL RESULTS 129.8 +27% • Solid revenue growth at € 465.9m (+11%) • Strong management fees at € 459.1m (+28%) 73.4 • Cost/income ratio at 36.5% (34.7% ex one-off costs for regional banks rescue) STRONG CAPITAL POSITION ( € m ) • Outstanding asset quality (0.16% NPL/total loans) 2011 2012 2013 2014 2015 • Capital ratios well above SREP requirements • Excess Capital at € 213m (+35%) 2 Banca Generali – FY 2015 Results and Business Outlook
2015 results: key takeaways (€ m) 12M14 12M15 % Chg * Total Banking income up by 11% driven by: • Solid trend in management fees ( € 459.1m, +28%) Net Interest Income 107.0 66.2 -38.1% * reflecting higher asset base and the improvement Gross fees 484.6 652.0 34.5% in product mix occurred in the period Fee expenses -227.4 -281.2 23.7% • NII and trading activity in line with guidance Net Fees 257.3 370.8 44.1% Net income (loss) from trading activities 52.4 25.8 -50.8% Effective cost management (+0.7%, net of Dividends 2.6 3.1 21.4% one-off contribution to bank rescue funds) Net income (loss) from trading activities and Dividends 54.9 28.9 -47.4% Total Banking Income 419.2 465.9 11.1% • € 8.7m one-off payment to resolution fund Staff expenses -74.2 -80.9 9.1% (BRRD) and deposit guarantee scheme Other general and administrative expense -128.5 -134.0 4.3% (DGS/FITD) included within G&A costs • G&A costs fell in absolute value (ex-one off) due Depreciation and amortisation -4.4 -5.3 20.1% to operating leverage Other net operating income (expense) 41.3 44.7 8.4% • Overall costs increased significantly less than Total costs -165.8 -175.6 5.9% revenues even accounting for higher staff costs Cost /Income Ratio 38.5% 36.5% -2 p.p. Operating Profit 253.4 290.3 14.6% Slight increase in provisions, lower write-offs Net adjustments for impair.loans and other assets -11.0 -6.5 -41.1% Net provisions for liabilities and contingencies -40.3 -45.6 13.2% • Trend in provisioning reflects higher business Profit Before Taxation 202.1 238.3 17.9% * volumes and solid recruiting trend of top Direct income taxes -44.3 -34.7 -21.7% professionals Tax rate 21.9% 14.6% -7.3 p.p. Income/(losses) after tax on assets held for sales 3.1 0.0 n.m. Net profit at € 203.6m, (+27%), best ever Net Profit 160.9 203.6 26.5% 3 Banca Generali – FY 2015 Results and Business Outlook
Today’s Agenda 2015 financial results Dividend and capital position Net inflows, assets, recruitment 2016: more to come 4 Banca Generali – FY 2015 Results and Business Outlook
Solid revenue growth Recurring fees sharply up 524.8 465.9 427.7 419.2 +23% +11% 127.2 107.0 66.2 56.9 55.0 28.9 -227.4 -281.2 ( € m) Recurring Performance Fee expenses Net interest Trading & Total fees fees margin dividend revenues 2014 (lhs) – 2015 (rhs ) • Strong fee-income trend reflecting the significant asset expansion and the improving product mix occurred in the period 5 Banca Generali – FY 2015 Results and Business Outlook
Growing recurring fees … Recurring fees (management, entry, banking) Total recurring fees up by 23% yoy in +72% 524.8 2015 driven by: +23% 32.0 • Management fees (88% of total) 427.7 increased by 28% driven by higher 359.1 36.3 assets and better product mix 29.1 305.3 27.1 • Banking fees (6% of total) were up 459.1 359.3 by 5% driven by higher advisory fees 296.0 251.2 • Entry fees (6% of total) changed for the strategic decision to slowdown 27.0 34.0 32.1 33.7 offer of structured products 2012 2013 2014 2015 Banking Fees Management Fees Front Fees ( € m) 6 Banca Generali – FY 2015 Results and Business Outlook
… driven by management fees 118.6 116.9 Quarterly management fees 116.1 107.6 ( € m) 97.4 93.9 86.2 +22% 75.5 78.9 81.8 58.2 61.2 61.5 62.8 65.8 68.8 72.8 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Avg. managed 22.8 24.1 24.5 25.1 25.8 26.6 27.4 27.8 28.7 29.7 30.9 32.3 35.1 38.3 39.8 40.8 39.8 Assets ( € bn) • Strong management fees (+22% YoY on a quarterly basis), even accounting for the sharp deterioration in the financial market trend over 2H 2015 7 Banca Generali – FY 2015 Results and Business Outlook
Lean and sound NII Reported NII 107.0 2015 NII trend in line with guidance 52.6 66.2 Sound and growing lending activity : 39.9 • 19.9 Total revenues at € 23.2million (+17%); • Secured loans at € 1.8bn with collateral assets 34.5 23.2 ( € m) 3.1 worth € 3.1bn and an outstanding asset quality with NPL at 0.16% of total loans to customers 2014 2015 LTRO Lombard lending Financial Conservative investment and funding profile • Business-led growth in volumes ( € 5.6bn, +15% Net NPL ratio ex LTRO), lower funding costs (-10 bps) 5.3% • Conservative investment profile for the banking book, 99% invested in bonds with a 1.8 yrs duration • No subordinated bonds at all held in the 0.16% banking book (nor sold to customers!) Banca Generali Italian Banking sector 8 Banca Generali – FY 2015 Results and Business Outlook
Cost discipline at its best Operating expenses 1 Staff costs (Staff costs, G&A ex-stamp duty, depreciation) 80.9 74.2 165.8 166.9 +9.0% ( € m) 2014 2015 +0.7% • Increase driven by the strengthening of relationship managers and support staff to FAs G&A costs ex-stamp duty ( € m) 87.2 80.7 2014 2015 -7.5% ( € m) (1) - Operating costs are net of the € 8.7m one-off payment to the resolution fund (BRRD) and to the 2014 2015 deposit guarantee scheme (DGS/FITD) occurred in • Tight cost control and operating leverage drove December 2015 to support the rescue of four G&A sharply lower than in 2014, that included regional banks one-off M&A costs 9 Banca Generali – FY 2015 Results and Business Outlook
Excellent profitability ratios Cost/Income Fee-based margin 55.8% 1.63 1.50 1.46 1.43 41.5% 39.1% 38.5% 34.7% 0.32 0.18 0.16 0.20 0.10 0.08 0.12 0.08 0.11 0.11 2011 2012 2013 2014 2015 0.11 0.11 Recurring Operating costs/Total assets profitability 1.15 1.11 1.07 1.01 (%) 0.59% 0.54% 0.51% 2012 2013 2014 2015 0.45% 0.40% Management fees Front fees Banking fees Performance fees 2011 2012 2013 2014 2015 (excluding payment to the resolution fund (BRRD)) 10 Banca Generali – FY 2015 Results and Business Outlook
Today’s Agenda 2015 financial results Dividend and capital position Net inflows, assets, recruitment 2016: more to come 11 Banca Generali – FY 2015 Results and Business Outlook
Dividend return well above risk-free rate Dividend per Share (DPS) 5.8% 1.20 0.98 4.0% +22% 1.8% 1.7% 2014 2015 2014 2015 BoD's proposal to AGM 1 Dividend yield Risk-free rate (10Y IT Govt) 2006-2015 1.0% 2.6% 2.2% 5.3% 6.1% 7.6% 7.0% 4.2% 4.0% 5.8% 2 Div. Yield ( 1 ) AGM scheduled for 21/22 April 2016 - (2) Based on closing price of € 20.53 of 9 Feb. 2016 12 Banca Generali – FY 2015 Results and Business Outlook
Solid and sharply growing capital ratios Total Capital ratio CET1 1.7% 15.9% 2.1% 14.3% 14.2% 12.2% 2014 2015 2014 2015 Leverage ratio Excess Capital 213 1.3% 55 6.3% 158 5.0% ( € m) 2014 2015 2014 2015 Capital ratios compliant with B3 requirements (transitional) 13 Banca Generali – FY 2015 Results and Business Outlook
Capital Ratios well above SREP requirements CET1 1 ratio Total Capital ratio 15.9% 14.2% 14.8% 14.3% 14.2% 13.0% 12.2% 11.8% 10.6% 7.0% 2012 2013 2014 2015 SREP 2012 2013 2014 2015 SREP requirements requirements as of 31 Dec. as of 31 Dec. 2015 (1) 2015 (1) (1) Minimum capital requirements specified for Banca Generali by the Bank of Italy as a result of the Supervisory Review and Evaluation Process (SREP). 14 Banca Generali – FY 2015 Results and Business Outlook €
Today’s Agenda 2015 financial results Dividend and capital position Net inflows, assets, recruitment 2016: more to come 15 Banca Generali – FY 2015 Results and Business Outlook
2015 Net inflows at record level Total Net Inflows Accelerating net inflows 687 € 9.8bn € 4.6bn 530 522 437 435 +30% 415 4,640 406 1,900 354 341 305 299 217 222 2,260 1,602 4,024 ( € m) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2012 2013 2014 2015 2015 2016 Organic net inflows Acquisitions 16 Banca Generali – FY 2015 Results and Business Outlook
Well-balanced and pro-active mix Total Net Inflows mix Net Inflows mix by quarter 4,640 +37% 3,376 127 701 78 343 Managing customer 124 2,210 expectation while 2,185 337 anticipating higher 113 930 market volatility 749 686 432 1,184 1,378 57 120 224 € m 545 77 164 115 (265) 42 1Q 2Q 3Q 4Q 2014 2015 SICAV & PM Multi-line & Unit-linked Banking products Traditional life policies Traditional life policies Banking products Multi-line & Unit-linked SICAVs & PM (excluding the jumbo recruitment from former-Simgenia) 17 Banca Generali – FY 2015 Results and Business Outlook
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