4Q20 Results
Alessandro Foti, CEO and General Manager
Milan, February 9th 2021
Disclaimer
- This Presentation may contain written and oral "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of FinecoBank S.p.A. (the "Company"). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
- The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.
- Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Lorena Pelliciari, in her capacity as manager responsible for the preparation of the Company's financial reports declares that the accounting information contained in this Presentation reflects FinecoBank's documented results, financial accounts and accounting records.
- Neither the Company nor any of its representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.
2
Agenda
Fineco Results
Next steps
Fineco UK
Key messages
Focus on product areas
3
Executive Summary
Outstanding net profit in challenging market scenario
- 2020 Net profit(1) at 325mln, +19% y/y, confirming the soundness and sustainability of a business model able to deliver consistent results in every market condition and to accelerate growth in the current situation
- 2020 Revenues(1) at 776mln, +18% y/y mainly supported by Brokerage (+73% y/y) showing a structural growth thanks to the in-depth review of our product offer, the enlargement of both our clients' base and market share, and finally to higher volatility compared to 2019, and by Investing (+7% y/y) thanks to volume effect and strong AUM flows
- Operating Costs well under control at -270mln, +8.0% (+4.4% y/y(2) excluding marketing costs in UK and costs related to additional marketing expenses in Italy in 4Q20 to catch growth momentum and HR costs related to annual leaves due to the lock-down in December)
- C/I ratio at 34.7%, confirming operating leverage as a key strength of the Bank
Strong and safe capital position
- 2020 CET1 ratio at 28.56%(3) and TCR at 41.68%(3)
Accelerating commercial activity
- Net sales in 2020 at 9.3bn (+59% y/y), TFA at 91.7bn with Asset under Management at 45.4bn (+12% y/y) and the penetration of Guided products on Asset under Management at 74%.
- Fineco Asset Management retail net sales at 2.1bn in 2020 and TFA at 16.3bn
- Strong January net sales at 891mln (+175% y/y), o/w 470mln in AUM (116% y/y). Solid Brokerage revenues, estimated at around 19 mln (+30% y/y)
(1) | FY20 non recurring items: Voluntary Scheme: FY20 -1.4mln gross, -1.0mln net (3Q20: -0.2mln gross, -0.2mln net). FY19 non recurring items: Voluntary Scheme: FY19: | |
-3.0mln gross, -2.0mln net (4Q19: 1.4mln gross, 0.9mln net; 3Q19: 0.4mln gross, 0.3mln net); Patent Box FY19: 18.1mln (20.7mln in 4Q19; -0.9mln in 3Q19). | ||
(2) | Excluding FY20 marketing costs in UK (-7.2mln in NHR costs), additional marketing costs in Italy in 4Q20 to catch the positive momentum for growth (-1.3mln in NHR | |
4 | costs) and additional 4Q20 HR costs related to annual leaves cancelled during the December lock-down(-0.5mln in Staff expenses) | |
(3) | Fineco decided to stick to the recommendations of ECB of December 15th, 2020 and to the press release of Bank of Italy of December 16th, 2020, proposing to the |
Shareholders' Meeting to resolve upon the allocation of 100% of 2020 profits to reserves
Results
Adj. Net Profit at 325mln, +19% y/y boosted by diversified revenues growth. C/I ratio at 35%, down -3.2 p.p. y/y confirming our strong operating leverage
Net Profit, mln | Revenues, mln |
excluding non recurring items (1)
Adj. Cost/Income (2) Adj. RoE (2)
Systemic charges: | +19.2% | |||
FY20: -26.8mln (gross) | ||||
323.6 | ||||
FY19: -18.1mln (gross) | ||||
288.4 | 324.5 | |||
272.3 | ||||
+9.3% | ||||
93.2 | +19.7% | |||
78.2 | ||||
65.2 | ||||
71.6 | 65.3 | |||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
38% | 34% | 40% | 38% | 35% |
23% | 18% | 20% | 25% | 21% |
excluding non recurring items (1)
4Q20: | +17.9% | ||||
+1.7% q/q | 774.4 | ||||
+7.6% | excluding | 654.8 | |||
banking fees | |||||
from smart | 775.8 | ||||
-2.9% | repricing | ||||
170.2 | 186.9 | 181.6 | 657.8 | ||
168.8 | 187.1 | ||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
Operating Costs, mln
FY20(4): -260.6mln
(+4.4% y/y)
+13.2% | +8.0% | |||||||||||||
+13.1% | 269.6 | |||||||||||||
249.6 | ||||||||||||||
72.9 | ||||||||||||||
64.4 | 64.4 | |||||||||||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
(1) | FY20 non recurring items: Voluntary Scheme: FY20 -1.4mln gross, -1.0mln net (3Q20: -0.2mln gross, -0.2mln net). FY19 non recurring items: Voluntary Scheme: | |
FY19: -3.0mln gross, -2.0mln net (4Q19: 1.4mln gross, 0.9mln net; 3Q19: 0.4mln gross, 0.3mln net); Patent Box FY19: 18.1mln (20.7mln in 4Q19; -0.9mln in 3Q19). | ||
(2) | Adj. Cost/Income and Adj. RoE calculated net of non recurring items. ROE calculated as: annualized adj.net profit divided by average book equity for the period (excl. | |
dividends for which distribution is expected and valuation reserves) | ||
5 | (3) FY20 includes: -25.9mln contribution to DGS (including the additional contribution to a member of Interbank Deposit Protection Fund), -0.9mln SRF/FNR | |
(4) | Excluding FY20 marketing costs in UK (-7.2mln in NHR costs), additional marketing costs in Italy in 4Q20 to catch the positive momentum for growth (-1.3mln in NHR | |
costs) and additional 4Q20 HR costs related to annual leaves cancelled during the December lock-down(-0.5mln in Staff expenses) |
Net interest income
NII resilient thanks to a more dynamic treasury activity combined with high-quality lending. Impact from lower interest rate environment offset by the contribution from the initiative on smart repricing on current accounts. Sensitivity analysis +100bps / -100bps parallel shift: +128mln NII / -113mln NII
Net Interest Income, mln | Interest-earning assets, avg bn | ||||||||||||||||||||||||||||||||||||
Other Treasury activities(1) | Other (3) | Cost of funding | (1) | (3) | |||||||||||||||||||||||||||||||||
Financial Investments (2) | Lending(4) | Other Treasury activities | Other | 1M Euribor | |||||||||||||||||||||||||||||||||
Financial Investments | (2) | Lending(4) | Eurirs 5y | ||||||||||||||||||||||||||||||||||
Cost of deposits | Gross margins(5) | ||||||||||||||||||||||||||||||||||||
-3.8% | +14.9% | ||||||||||||||||||||||||||||||||||||
281.3 | |||||||||||||||||||||||||||||||||||||
-8.4% | 43.3 | 270.7 | +3.2% | +15.7% | |||||||||||||||||||||||||||||||||
45.0 | 28.5 | 29.4 | 28.2 | ||||||||||||||||||||||||||||||||||
9.6 | 25.6 | 3.9 | |||||||||||||||||||||||||||||||||||
3.8 | 24.4 | 3.6 | |||||||||||||||||||||||||||||||||||
-7.0% | 5.2 | 3.1 | 0.1 | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||
0.2 | 2.8 | ||||||||||||||||||||||||||||||||||||
69.7 | 0.1 | ||||||||||||||||||||||||||||||||||||
68.6 | 63.9 | ||||||||||||||||||||||||||||||||||||
10.9 | |||||||||||||||||||||||||||||||||||||
11.6 | |||||||||||||||||||||||||||||||||||||
2.4 | |||||||||||||||||||||||||||||||||||||
1.8 | 11.1 | 236.3 | 23.3 | ||||||||||||||||||||||||||||||||||
1.5 | 216.1 | 22.1 | 22.5 | 21.0 | 22.8 | ||||||||||||||||||||||||||||||||
57.7 | 53.1 | 49.1 |
-1.70.3 | -0.12.3 | -0.12.3 | -9.3 | 1.4 | -3.07.4 | 0.3 | 2.1 | 2.1 | 0.4 | 1.7 |
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | 4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | |
1.11% | 0.98% | 0.88% | 1.20% | 0.99% | -0.45% | -0.52% | -0.55% | -0.40% | -0.50% |
-0.03% | 0.00% | 0.00% | -0.04% | -0.01% | -0.24% | -0.39% | -0.46% | -0.14% | -0.34% |
- Other treasury activities include Security Lending (from Tiering) and yield enhancement strategies (unsecured lending and collateral switch)
- Financial investments include interest income coming from the reinvestments of deposits in: Government bonds, UC bonds, Covered bonds, Supranational and Agencies and other financial investments (repos and immediate available liquidity)
- Other net interest income includes Leverage and other (mainly marketing costs). Other interest-earning assets include Leverage. See page 49 for details
6 | (4) | Lending: only interest income |
(5) | Gross margins: interest income related to financial investments, lending, leverage, security lending, other trading activities on interest-earning assets |
Non Interest Income
Fees and commissions +24% y/y thanks to the positive contribution by all business areas and Trading Income +104% y/y thanks to structurally higher Brokerage
Fees and Commissions, mln
Brokerage Investing Banking Other
+24.3%
404.3
Trading Income, mln
mln | excluding non recurring items (1) |
+103.7%
+37.4%
95.8
-6.5% | 44.8 | 97.2 |
20.2 | 19.1 | |
4Q20: +8.0% q/q
+17.5% | excluding |
banking fees | |
from smart
-1.2% repricing
97.9 96.7
82.3
20.8 26.5 30.7
56.1 61.8 64.0
0.1 5.3 -0.29.7 -0.22.2
4Q19 3Q20 4Q20
325.2 | 130.4 |
77.3 | |
226.2 | 243.7 |
0.421.3 | 31.0 |
-0.8 | |
FY19 | FY20 |
15.3 | 47.7 | |||
13.9 | 20.4 | |||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
o/w Trading Income from Brokerage
+53.8% | +111.5% | |||||||
-10.2% | ||||||||
87.4 | ||||||||
41.3 | ||||||||
11.7 | 20.1 | 18.0 | ||||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
7
- Adj. Trading Income excluding non recurring items: Voluntary Scheme (1Q20: -1.2mln gross; 3Q20: -0.2mln gross; 1Q19: -0.4mln gross; 2Q19: -4.3mln gross; 3Q19: 0.4mln gross; 4Q19: 1.4 mln gross)
Please note that 4Q20 is impacted by the refund of banking fees (already provisioned in the previous quarters) to a cluster of clients, following the request by A.G.C.M to delay to the end of the year the application of the repricing for 2020 to a cluster of clients acquired in the past through an online commercial initiative.
Focus on Investing
2020 increasing y/y thanks to volume effect and strong AUM net sales. Margins stable, thanks to the operational efficiency given by Fineco Asset Management
Investing Revenues, mln | Average AuM on daily basis, bn | |
Upfront fees | PFA incentives | Management Fee Margins, bps | ||||||
Management fees | Other income (1) | +7.1% | ||||||
228.9 | 245.3 | 41.4 | 43.4 | 40.7 | ||||
6.3 | ||||||||
5.4 | ||||||||
+11.3% | 3Q20 | 4Q20 | FY20 | |||||
+5.6% | 241.3 | 252.5 | 62 | 62 | 62 | |||
58.8 | 62.0 | 65.4 | ||||||
1.8 | 1.5 | 1.8 | Management fees: | |||||
63.0 | 67.5 | |||||||
64.2 | FY20: +4.6% y/y | |||||||
2.7 | 0.2 | 1.4 | 2.7 | 1.6 | 4Q20: +5.2% q/q, +7.3% y/y | |||
-8.7 | -20.5 | |||||||
-3.9 | -5.3 | -15.1 | mainly driven by higher volumes | |||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | ||||
(1) Other Income includes revenues coming from FAM costs efficiencies achieved during the year related to fund restructuring |
8
Cost efficiency and operating leverage confirmed in our DNA.
Non HR costs flattish, excluding marketing expenses to catch the positive momentum for growth. 4Q20 characterized by usual seasonality
Operating Costs, mln | Staff expenses and FTE, mln | |
The higher concentration of costs in 4Q20 is related to the usual seasonality
Note:
- Considering the positive momentum for growth, we decided to spend additional marketing expenses in Italy for -1.3mln in 4Q20
- Given the December lock-down, we faced additional one-off staff expenses for -0.5mln in 4Q20 due to cancelled annual leaves
• | FY20 UK marketing costs: -7.2mln | ||||
Net of this items, FY20(1): 260.6mln, +4.4% y/y | |||||
+8.0% | |||||
249.6 | 269.6 | ||||
+13.2% | |||||
+13.1% | |||||
64.4 | 64.4 | 72.9 | |||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
FTE # | FY20(1): 99.0 mln |
+9.9% y/y |
+10.4%
+10.4%
+5.5%
90.2 99.5
23.6 24.6 26.0
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
1,187 1,214 1,224
Non HR Costs, mln
OAE | FY20(1): 161.5 mln | |||
Write-downs/backs & depreciation | +1.3% y/y | |||
+14.8% | +6.7% | |||
+17.9% | 159.4 | 170.0 | ||
40.9 | 39.8 | 46.9 | 136.6 | 144.6 |
6.634.3 | 6.433.4 | 6.840.1 | 22.9 | 25.4 |
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
- Excluding FY20 marketing costs in UK (-7.2mln in NHR costs), additional marketing costs in Italy in 4Q20 to catch the positive momentum for growth (-1.3mln in NHR costs) and additional 4Q20 HR costs related to annual leaves cancelled during the December lock-down(-0.5mln in Staff expenses)
9
Focus on 4Q20 bottom line
mln | Provisions for risks and charges |
108.7 | 2.1 | 6.3 | -2.9 | 0.2 | -2.3 | 112.2 | |
78.2 | |||||||
GOP | Systemic | Release of | Other R&C | LLP | Profit on | PBT | Net Profit |
4Q20 | Charges | provisions | Investments | ||||
on repricing |
- Systemic charges:
- Provisions on repricing:
- Profit on Investments:
Release of +2.1mln related to the contribution to DGS: final contribution was lower than estimated one thanks to a lower than expected growth of deposits compared to the system, given the effectiveness of our initiatives to absorb clients' liquidity
In 2Q20 we were suggested by the A.G.C.M(1) to delay to the end of the year the application of the repricing for 2020 to a cluster of clients acquired in the past through an online commercial initiative.
Although we are fully convinced that our decisions were correct, we maintained a prudential
approach under which we do not challenge regulators, therefore in 9M20 we accounted -6.3mln provisions related to banking fees paid by that cluster of clients from February until September 2020. In December 2020 we received the final communication by the Authority and we refunded the clients for the banking fees they paid in 2020 and released +6.3 mln provisions.
The full effect of the repricing is now in place starting from Jan. 2021 on our whole customer base.
-2.3mln due to the update of the macroeconomic scenario post-Covid19 under IFRS9 (forward looking
information)
(1) Guarantor for Competition and Market Authority
10
High quality lending volume, offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics
Commercial Loans portfolio, eop mln
Eop, mln | Current accounts/Overdraft (1) | Cards | |
Personal loans | Mortgages |
+22.8%
+3.9%
3,853 | 4,003 | |||
3,259 | 1,591 | |||
1,483 | ||||
1,281 | ||||
435 | 444 | |||
297 | ||||
463 | 269 | |||
356 | ||||
1,159 | 1,666 | 1,671 | ||
Dec.19 | Sep.20 | Dec.20 |
Cost of Risk on commercial loans (2)
12 bps | 11 bps | 10 bps | |
Dec.19 Sep.20 Dec.20
- Cost of Risk well under control thanks to the constant improvement in the quality of the credit which is mainly secured and low risk
- We confirm our strategy aims to build a safe lending portfolio, offering these products exclusively to our very well known base of clients, leveraging on a deep internal IT culture, powerful data warehouse system and Big Data analytics
- No change in our FY21 CoR expectations (10-15bps) thanks to the high quality of our portfolio, even in a difficult context following Covid-19 outbreak
- Less than 300 mortgages moratories have been granted until now. More details on the quality of our portfolio in the following slide, with a deep dive on the main products offered
- Current accounts/overdraft Include Lombard loans
- Cost of Risk: commercial LLP of the last 12 months on average last 12 months commercial Loans; CoR as of Sept.20 and Dec.20 are pro-forma figures excluding a non recurring write-back
11
Lending: solid growth for all our lending products thanks to the quality of our portfolio and to our cautious approach
2021 Guidance
Mortgages
Eop, mln | +44.2% |
+0.3%
1,159 1,666 1,671
Dec.19 Sep.20 Dec.20
- 17,860 mortgages granted since December 2016
- Average customer rate: 153bps. FY20 Yield(1) at 57 bps
- Average Loan to Value ~49%, average maturity 18 yrs
- Low expected credit loss (~19 bps). Only 3 clients accounted in NPL after 48 months from the launch
- yearly new production:
- 700-800mln
- Expected yield:(3)
- 45-55bps
Personal Loans
Eop, mln | -4.0% |
+2.0% |
463 435 444
Dec.19 Sep.20 Dec.20
- Average ticket €9,300 and average maturity 4.7 years
- FY20 Yield at 388bps
- Efficient and real time process, instant approval platform for eligible clients' requests thanks to a deep knowledge of clients.
- Low expected credit loss (~62 bps)
- yearly new production:
- 250-300mln
- (45-65mln net)
- Expected yield:(3)
~ 370-390 bps
Lombard Loans
Other lombard Credit lombard
Eop, bn | +24.4% | |||||||||
+7.2% | ||||||||||
1.6 | ||||||||||
1.3 | 1.5 | |||||||||
0.2 | 0.2 | 0.1 | ||||||||
1.1 | 1.3 | 1.4 | ||||||||
Dec.19 | Sep.20 | Dec.20 |
o/w Credit Lombard(2):
- Attractive pricing: retail clients 100bps and private clients 50/65/75bps (on 3M Eur)
- Differentiated margins according to the riskiness of the pledged assets
- Very low expected loss (~10 bps)
o/w Credit Lombard:(2)
- Expected growth:
- 350-400mln per year
- Expected yield:(3)
- 70-80bps
(1) | Yield on mortgages net of amortized and hedging costs | |
(2) | Credit Lombard allows to change pledged assets without closing and re-opening the credit line, allowing more flexibility and efficiency | |
12 | with floor at zero | |
(3) | Expected yield are referred to the stock |
Capital Ratios:
Best in class capital position and low risk balance sheet
RWA,1 mln | CET1 Ratio, % | |||
Credit Market Operational | CET1 capital, mln | |||
+18.5%
+437bps
+7.7%
+528bps
3,217 | 3,541 | 3,812 | 24.19 | 23.28 | 28.56 | ||||||||||||||||
2,406 | 2,573 | ||||||||||||||||||||
2,074 | |||||||||||||||||||||
Dec.19 | Sep.20 | Dec.20 | |||||||||||||||||||
45 | |||||||||||||||||||||
40 | 31 | restated | |||||||||||||||||||
1,103 | 1,103 | 1,195 | |||||||||||||||||||
778 | 824 | 1089 | |||||||||||||||||||
Dec.19 | Sep.20 | Dec.20 | |||||||||||||||||||
Leverage Ratio, % | Total Capital Ratio, % | ||||||||||||||||||||
4.54 4.35 4.85
Dec.19 Sept.20 Dec.20 restated
+195bps
+427bps
39.73 37.41 41.68
Dec.19 Sep.20 Dec.20 restated
(1) Starting from 31 December 2019, FinecoBank applied the Standardised Method for determining the regulatory requirement related to operational risk, replacing the | |
Advanced Measurement Method ("AMA") adopted previously. | |
Dec.19 restated does not include 2019 dividend payment of 32.0 €/cents | |
13 | Fineco decided to stick to the recommendations of ECB of December 15th, 2020 and to the press release of Bank of Italy of December 16th, 2020, proposing to the |
Shareholders' Meeting to resolve upon the allocation of 100% of 2020 profits to reserves |
TFA breakdown
Successful shift towards high added value products thanks to strong productivity of the network
Breakdown of total TFA, bn | Focus on AUM, bn |
91.7 | 93.0 | ||||||||
81.4 | |||||||||
67.2 | 69.3 | 49% | 50% | ||||||
60.2 | 50% | ||||||||
55.3 | |||||||||
49.3 | 50% | 48% | |||||||
48% | 48% | ||||||||
48% | 19% | 20% | 20% | ||||||
20% | |||||||||
21% | 20% | ||||||||
24% | |||||||||
24% | |||||||||
30% | 32% | 31% | 31% | 30% | |||||
31% | |||||||||
28% | 28% | ||||||||
Dec.14 Dec.15 Dec.16 Dec.17 Dec.18 Dic.19 Dec.20 Jan.21 | |||||||||
AuM | AuC | Deposits | |||||||
+21.5bn AUM since the end of 2014, o/w:
Guided Products & Services +24.9bn
AuM à la carte -3.4bn
+12.0% | 46.1 | |||||
45.4 | ||||||
40.5 | ||||||
33.6 | 33.5 | |||||
26.6 | 29.0 | 33.4 | 33.8 | |||
23.9 | 21.2 | 28.8 | ||||
8.5 | 11.8 | 16.1 | 22.4 | |||
15.4 | 14.8 | 12.9 | 12.3 | 11.1 | 11.7 | 12.0 | 12.3 |
Dec.14 Dec.15 Dec.16 Dec.17 Dec.18 Dic.19 Dec.20 Jan.21
Guided Products AuM à la carte
AuC and Deposits under advisory have been reclassified within AuM in order to have a better representation of the advisory nature of Advice and Plus services
14
Net sales breakdown
Solid high quality net sales growth on the wave of structural trends thanks to our diversified business model and with an improving mix
Breakdown of total Net Sales, bn | PFA Network - total Net Sales, bn | ||||||||||||||
+58.9% | +55.9% | ||||||||||||||
9.3 | 8.0 | ||||||||||||||
6.2 | 5.8 | 4.3 | 5.1 | 4.3 | |||||||||||
6.0 | 5.4 | 5.5 | |||||||||||||
5.5 | 4.9 | ||||||||||||||
5.0 | |||||||||||||||
2.3 | 3.3 | 4.3 | |||||||||||||
4.0 | 3.6 | 2.3 | 3.3 | ||||||||||||
2.7 | 1.9 | ||||||||||||||
4.0 | 2.5 | 2.6 | 1.9 | 4.0 | |||||||||||
3.1 | 0.3 | 1.8 | +175% | 3.0 | 1.3 | 1.7 | +107% | ||||||||
0.2 | |||||||||||||||
0.9 | y/y | 0.7 | y/y | ||||||||||||
0.5 | 3.5 | ||||||||||||||
2.9 | 2.5 | 0.9 | 2.2 | 0.3 | 2.6 | 0.8 | |||||||||
1.9 | 1.5 | 2.1 | 1.6 | 1.9 | 2.0 | ||||||||||
1.2 | 0.5 | 0.9 | 1.1 | 0.5 | |||||||||||
-0.2 | -1.0 | 0.10.4 | -0.3 | -0.8 | 0.10.3 | ||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Jan.21 | 2014 2015 2016 2017 2018 2019 2020 Jan.21 | ||||||||
2,533 | 2,622 2,628 | 2,607 | 2,578 | 2,541 | 2,606 |
AuM | AuC | Deposits | PFA Network - headcount |
15 AuC and Deposits under advisory have been reclassified within AuM in order to have a better representation of the advisory nature of Advice and Plus services
Organic growth
Net sales organically generated confirmed as key in our strategy of growth
Net Sales, bn - Organic / Recruit, %
Total recruits | Organic | Total recruits | Organic | |||||||||||||||||
PFAs recruited over the | PFAs recruited over the | |||||||||||||||||||
last 12 months (avg) | last 24 months (avg) | Recruitment costs | ||||||||||||||||||
4.0 | 5.5 | 5.0 | 6.0 | 6.2 | 5.8 | 9.3 | 4.0 | 5.5 | 5.0 | 6.0 | 6.2 | 5.8 | 9.3 | (to be amortized) | ||||||
stock 27.6mln | ||||||||||||||||||||
11% | 11% | 10% | 7% | 5% | 4% | 14% | 15% | 9% | 7% | |||||||||||
18% | 26% | 19% | 19% | as of Dec. '20 | ||||||||||||||||
82% | 89% | 89% | 90% | 93% | 95% | 96% | 81% | 81% | 86% | 85% | 91% | 93% | |
74% | |||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
125 | 118 | 85 | 98 | 70 | 58 | 74 |
# of PFAs recruited in the period |
16
Continuously increase of quality and productivity of the network
Total Assets per PFA
TFA concentration per PFA
Eop, mln
+9.9%
+6.6%
30.6
27.8 28.7
17.2 | +9.4% | ||
15.7 | 16.0 | y/y | |
4.5 4.9 5.2
7.6 7.8 8.1
Dec.19 Sept.20 Dec.20
11.3 | 11.8 | 12.8 | +13.2% |
y/y | |||
AUM Deposits
AUC Guided Products
> €35mln
€25-35mln
€20-25mln
€10-20mln
< €10mln
PFAs with TFA >20mln are 58% (+7% y/y)
and hold 84% of TFA (+4% y/y)
+65 | +12.7% | ||||||||||||||||||||||
2,606, 1 | |||||||||||||||||||||||
2,541 | 70.7bn | 79.6bn | |||||||||||||||||||||
100 | 100 | ||||||||||||||||||||||
25% | 29% | ||||||||||||||||||||||
58% | 52% | ||||||||||||||||||||||
17% | 57% | 84% | |||||||||||||||||||||
17% | |||||||||||||||||||||||
13% | 11% | ||||||||||||||||||||||
18% | 18% | ||||||||||||||||||||||
27% | |||||||||||||||||||||||
25% | |||||||||||||||||||||||
11% | |||||||||||||||||||||||
9% | |||||||||||||||||||||||
19% | 15% | ||||||||||||||||||||||
17% | 13% | ||||||||||||||||||||||
4% | 3% | ||||||||||||||||||||||
Dec.19 | Dec.20 | ||||||||||||||||||||||
Dec.19 | Dec.20 | ||||||||||||||||||||||
PFAs | TFA | ||||||||||||||||||||||
17
Clients' profile and focus on Private Banking
Total Financial Assets per client | Avg TFA per Private client (1) |
>500k 100-500k
50-100k <50k
Total TFA: 91.7bn | o/w Private Banking(1): 38.6bn | AuM | AuC | Deposits | |||||||||||||
0.9mln | |||||||||||||||||
8.2% | |||||||||||||||||
10.5% | 0.5-1mln | ||||||||||||||||
8.3% | |||||||||||||||||
10.4% | |||||||||||||||||
42.1% | 1-5mln | 17% | |||||||||||||||
36.5% | |||||||||||||||||
47.0% | 5-10mln | ||||||||||||||||
37.0% | >10mln | 27% | 57% | ||||||||||||||
Average age:
Total clients: 50
Private clients: 62
Outperforming the system in Private Banking growth
€ bn, TFA | (2) | AIPB | ||||||||||||||
FinecoBank | AIPB | (3) | ||||||||||||||
"Modelli Misti" | ||||||||||||||||
+54.8% | +73.6% | +13.3% | +27.6% | |||||||||||||
since 2016 | ||||||||||||||||
33.4 | 34.4 | 38.6 | 776 | 806 | 778 | 884 | 879 | 441 | 448 | |||||||
25.9 | 25.8 | 351 | 384 | 380 | ||||||||||||
22.2 | ||||||||||||||||
2016 | 2017 | 2018 | 2019 Sept.20 2020 | 2016 | 2017 | 2018 | 2019 Sept.20 | 2016 | 2017 | 2018 | 2019 Sept.20 |
- Private Banking clients are clients with more than € 0.5mln TFA with the Bank
- AIPB (Associazione Italiana Private Banking) figures as of 9M20
- "Modelli Misti" include the following players: Allianz Financial Advisors, Banca Euromobiliare, Banca Generali PB, Banca Mediolanum, Banca Patrimoni Sella,
18 | Widiba, CheBanca!, Deutsche Bank, Fideuram ISPB, Fineco |
Agenda
Fineco Results
Next steps
Fineco UK
Key messages
Focus on product areas
19
Current environment is creating the conditions to further enlarge our growth opportunities
Current situation is accelerating the structural trends reshaping our society…
DEMAND FOR ADVICE
Increasing participation in
financial markets by Italians is building up a bridge among investing and brokerage
DIGITALIZATION
Society structurally moving
towards a more digitalized world:
a way of non-return
DISRUPTION IN
TRADITIONAL BANKS
Traditional banks not ready
for the new paradigma:
flight-to-qualityis gaining
momentum
…and strengthening our long term growth opportunities
Strengths of our business model: | |
Fintech DNA: | quality, efficiency, innovation |
we were born already digital | Cyborg advisory: |
our PFAs already used to assist
clients in a digital world
- Robust Net sales with good asset mix
- Structurally higher Brokerage
- Acceleration in high-endclients' acquisition
- Decreasing Cost/Income
20
2021 Guidance
Given current outlook(1), our assumptions for 2021 are:
- Net interest income: confirmed resilient and low risk. We are containing the effect of the worsening interest rates environment thanks to the smooth run-off of our bond portfolio, and lending book, benefit from ECB's tiering and TLTRO, enlargement of the scope of our investments to non-EU govies with no change in our investment policy nor increase in our risk profile, benefit from yield enhancement strategies and from our new activity on Tax Credit towards the State. We are also expecting an additional contribution from the new initiatives we are undertaking (see slide 22)
- Investing: we expect revenues increasing high-teens vs 2020 with resilient margins
- Brokerage: countercyclical business, it is expected to remain strong with a floor definitely higher than in the past
- Banking: banking fees from 2020 related to smart repricing expected to be ~20-22mln in 2021; we are also expecting additional fees from the new pricing on new current accounts (see slide 22)
- Operating Costs: expected to grow in a range between 4.5%-5% mainly due to the increase in the workforce given the acceleration in our growth we are experiencing in the latest months
- CET1: floor at 17%
- Leverage Ratio: very well under control and above 3.5%
- Cost of Risk: confirmed in the range between 10 and 15 basis points thanks to the quality of our portfolio
- Net sales: robust, high quality net sales with a lower deposits component thanks to the new initiatives we are undertaking (see slide 22)
- Forward rate curve as of February 4th, 2021
21
Our main priority: focus on quality growth, more selective on clients' liquidity
New initiatives to take advantage from the acceleration of flight-to-quality
1
2
STRONG COMMERCIAL FOCUS ON AUM:
targeting only AUM net sales and solutions with a strong RISK MANAGEMENT. FAM already best-positioned thanks to the high-transparency and daily look-through on its solutions
ROBUST ACCELERATION IN PFAs PRODUCTIVITY through:
New software developments to improve PFAs productivity in transforming deposits in AUM leveraging on Big Data Analytics capabilities. Coming soon: sophisticated marketing campaigning tool
3 IMPROVE THE QUALITY OF OUR CLIENT BASE:
- More selective client acquisition through a new pricing on new current accounts that are priced € 6.95 per month(1) with the possibility of a full bonus on the fee according to their activity with the Bank. New termination clause on new current accounts that are used only to park liquidity
- Actions to transform current accounts "full-liquidity" that have been inactive for an extended period of time: we will increase our efforts to reduce liquidity also leveraging on our Big Data Analytics
4 LAUNCH OF 2 NEW PLATFORMS leveraging on our Fintech DNA:
-
Multi-brandplatform to distribute third-parties savings accounts, matching the demand and the supply available on the market to lower the amount of clients' liquidity with us and generate revenues without increasing the
Balance Sheet - Platform to manage tax credits (Ecobonus / Superbonus): we are using our liquidity position to buy tax credit towards the State. This way, we are sustaining the NII with an interesting yield and with no use of capital (Ecobonus / Superbonus)
This will result in a lower Balance Sheet growth and better quality revenues mix
22 | (1) | Starting from February 8th, 2021 |
Banking: actively managing liquidity thanks to our FinTech DNA
Further combining Treasury and Business to boost our growth
BANKING
FEATURES
High quality balance sheet
- SAFE, ROBUST, LOW RISK AND HIGHLY LIQUID
No change in our low-risk strategy
- DIVERSIFIED AND LOW RISK INVESTMENT PORTFOLIO: run-offof UniCredit bonds invested in a blend of diversified govies, covered bonds, supranational and agencies
- AVG MATURITY UNCHANGED at ~5 years
- EXPOSURE TO ITALY UNCHANGED at ~ 5-5.5bn (1)
- ~100% OF OUR FINANCIAL INVESTMENTS IN HTC: no impact in our P&L and BS by the widening of spreads
- LOW COST OF RISK ON COMMERICAL LOANS thanks to the quality of our portfolio: 10bps as of Dec. 2020 (guidance for 2021: 10-15bps). Avg LTV on mortgages: ~49%.
FinTech DNA
- OWNERSHIP AND CONTROL of critical infrastructure
- INNOVATION fully IN-HOUSE
- INTERNAL IT CULTURE resulting in unmatched user experience
- HIGH CUSTOMER SATISFACTION
INDUSTRIAL ACTIONS
MORE DYNAMIC TREASURY MANAGEMENT:
- yield enhancement strategies (unsecured lending, collateral switch)
- full ADVANTAGE OF ECB's TIERING AND TLTRO
- ENLARGING THE SCOPE OF OUR INVESTMENTS to investment grade non-EUgovies and financial corp. senior bonds
INCREASING LENDING without changing our cautious and conservative approach, as low interest rate environment increases the appetite for lending products
NEW PLATFORM FOR TAX CREDIT (Ecobonus and Superbonus): we are very active within the framework of the Law Decree no.34/2020, allowing homeowners to have a tax credit up to 110% for a list of intervention on their houses (i.e. increasing energy efficiency of buildings, reducing seismic risk, etc.)
NEW PLATFORM TO DISTRIBUTE THIRD PARTIES SAVINGS ACCOUNTS leveraging on our FinTech DNA
BANKING FEES: SMART REPRICING ON CURRENT ACCOUNTS AND NEW PRICING ON NEW CURRENT ACCOUNTS: given the acceleration of flight to quality towards our Bank, we can afford to be more selective in our base of clients
Actions to TRANSFORM inactive CURRENT ACCOUNTS "FULL LIQUIDITY"
23 | (1) | Nominal value |
Investing going forward | INVESTING |
Investing revenues expected to keep on growing mainly driven by volumes effect and resilient margins, sustained by further boost in FAM operational efficiency
We expect increasing revenues with resilient margins,
despite clients remaining cautious and conservative, thanks to:
STRONG VOLUME EFFECT | FAM OPERATIONAL EFFICIENCY | |
- Robust AUM net sales as we are in the sweet spot to capture the acceleration of structural trends already in place
- NEW PFA INCENTIVE SCHEME based on inflows in:
- Asset Under Management
-
quality solutions with a strong focus on RISK
MANAGEMENT
- Increasing PFAs productivity thanks to our cyborg- advisory approach
- FAM is core for extracting additional operational efficiency (on fund administration costs, custodian, etc)
- FAM margins contribution expected to grow in a geometrical way with the increase of FAM volumes as institutional products can be used as underlying of Investing solutions
- New FAM product range based on advisory service by third parties: this will give FAM even more flexibility and will make the value chain even more efficient
24
Investing: FAM growth potential | INVESTING |
Key to sustain AUM margins thanks to its strong operating leverage
FAM growth potential and new opportunities
- Strong room to increase FAM's penetration on Fineco's funds stock:
- FAM strongly positioned in terms of RISK MANAGEMENT thanks to the daily look-through: we expect a solid acceleration towards FAM products under the 2021 PFAs incentive scheme
FAM retail class penetration on:
Fineco AUM funds, bnFineco total AUM, bn28.8 | 31.6 | 40.5 | 45.4 | ||
29% | 33% | 21% | 23% | ||
Dec.19 | Dec.20 | Dec.19 | Dec.20 | ||
FAM retail class penetration |
FAM contribution to Fineco AUM net sales
- FAM is strongly and consistently contributing to Fineco's AuM net sales in every market conditions thanks to its ability to create modern and innovative multimanager solutions
bn | 4.3 | ||
3.3 | |||
Other Fineco AUM net sales | |||
FAM retail class net sales | 1.7 | 2.1 | |
FY19 | FY20 |
FAM 2021 priorities
- In 2021 FAM will focus on further widening its product offer by adding new solutions focused on equity and sustainability
- FAM is adding a new product range based on an advisory service by third parties. FAM will be even more flexible, with a more efficient value chain and a further alignment with clients and investors' interests
25
Brokerage proved itself as a perfect counter-cyclical business | BROKERAGE |
The structure of the market is changing: increased interest in financial markets by clients and big jump into a more digitalized society
Structural growth in brokerage revenues: the floor has gone up in a clear way
mln € | |||||||||||||||||||||||||||||||||||
30 | 2020 Brokerage Revenues: | ||||||||||||||||||||||||||||||||||
25 | |||||||||||||||||||||||||||||||||||
229 mln, +73% y/y (1) | |||||||||||||||||||||||||||||||||||
20 | |||||||||||||||||||||||||||||||||||
Average | 15 | ||||||||||||||||||||||||||||||||||
'14-19 | 10 | ||||||||||||||||||||||||||||||||||
5 | |||||||||||||||||||||||||||||||||||
0 | 03-14 | 09-14 | 11-15 | 01-17 | 07-17 | 03-1805-1807-1809-1811-1801-1903-1905-1907-19 | 11-19 | 01-21 | |||||||||||||||||||||||||||
01-14 | 05-14 | 07-14 | 11-14 | 01-15 | 03-15 | 05-15 | 07-15 | 09-15 | 01-16 | 03-16 | 05-16 | 07-16 | 09-16 | 11-16 | 03-17 | 05-17 | 09-17 | 11-17 | 01-18 | 09-19 | 01-20 | 03-20 | 05-20 | 07-20 | 09-20 | 11-20 |
Continuous reshape of brokerage offer. Next step: certificates
-
Thanks to our multicurrency platform, foreign markets overcame the Italian one in terms of executed orders: to fully catch the
opportunities from this trend, we are now live with a new US options platform. Other recent releases: optimization of our systematic internalizer, Multicurrency available 24/7, wider currencies basket, repricing of futures, wider OTC product offer
COMING SOON:
- Leveraged certificates (see slide 27 for more details)
- Continuous revamp of our option offer (repricing of derivatives offer), Asian markets, CFD on cryptocurrencies, new release and re-design of active traders' platform (PowerDesk)
Enlargement of client base and increasing market share
- >85% of new active clients investing on plain vanilla instruments (i.e. listed equity, ETFs) and not leveraged products
- Avg client profile: avg age 51 year old, avg TFA > € 200k, mostly linked to a PFA who manages his wealth
- Increasing market share in Italy on equity traded volumes at 27.8% in 2020 (+0.8 p.p. y/y) (Assosim)
- See slide 28 for more details
- Estimated Brokerage revenues in January 2021 are equal to 19mln (+30% y/y)
26
BROKERAGE
Brokerage: extracting value from the vertical integration
After the successful integration of our asset management business through FAM, we are now applying the same strategy with the launch of Leveraged Certificates thanks to our strong operating leverage and to the consistently increasing volumes
Leveraged Certificates
Hi-MTF
In 1H21 we will launch our offer and become issuer, market maker and distributor.
Thanks to the vertical integration of the business and the full control in the relationship with clients, over time we are going to convert low-value flows on other issuers' certificates into our own.
Market size in Italy: 13 bn(1) volumes and 100 mln revenues(2). We are also targeting flows on leveraged ETFs and covered warrants
Step 1: launch of first certificates on FTSE MIB, DAX and US indexes
The Board of Directors approved the binding offer for the acquisition of a 20% stake
(cost around 1.25mln).
Rationale: to increase our ability to extract value from the vertical integration of the business thanks to our clients' strong volumes
27
(1) ACEPI (Italian Association of Certificates and Investment Products)
(2) Internal estimates
Brokerage: enlargement of client base and increased market share BROKERAGE
Client base growth mainly driven by "Active investors" starting to use brokerage platform and "sleeping" clients back on the market. New clients are coming from traditional banks
Brokerage clients evolution
trader | active investors | avg '18-19 active investors |
87% 88% 89% 89% 88% 90% 89% 89% 84% 85% 87% 87%
Mar.18 | Jun.18 | Sep.18 | Dec.18 | Mar.19 | Jun.19 | Sep.19 | Dec.19 | Mar.20 | Jun.20 | Sep.20 | Dec.20 |
ACTIVE INVESTORS PROFILE:
- Avg executed orders per month: 4
- Avg age: 51 years old
- Mostly linked to a PFA to manage their savings
- Avg TFA: > €200k
New brokerage clients
from Top 10 banks of origin
New clients 2020 New clients 2019
UniCredit
Intesa SanPaolo
Ing Bank
Banco BPM
Poste Italiane
UBI
BNL
MPS
CheBanca!
Banca Mediolanum
Active investors: less than 20 trades per month.
28 Traders: more than 20 trades per month
Agenda
Fineco Results
Next steps
Fineco UK
Key messages
Focus on product areas
29
Fineco UK: our quality one-stop-solution proves to work
More effective in our customer acquisition, focusing on the quality of our UK clients
Total current accounts keep strong pace of growth
10.1k | 10.9k | STICKINESS RATE | |||
on active clients in 2020 | |||||
6.0k | |||||
2.9k | ~90% | ||||
Dec.18 Dec.19 Dec.20 Jan.21
Targeting quality clients with the right offer…
63% | ||||
21% | 15% | Boost in active current | ||
accounts(1) on Brokerage | ||||
FY18 | FY19 | FY20 |
active on brokerage / active current accounts
…and accelerating new current accounts
3.6k | 4.8k | First target: | ||
1.8k | 0.9k | 30-35k good clients | ||
critical number for a | ||||
FY18 FY19 | FY20 Jan.21 | "word of mouth strategy" | ||
Improved revenues mix:
Operating breakeven(2) within 1Q21
OTC | |||||||||||
Listed | 40% | ||||||||||
Multicurrency | |||||||||||
31% | |||||||||||
31% | |||||||||||
23% | 29% | ||||||||||
41% | 71% | 35% | |||||||||
36% | 46% | ||||||||||
-2% | 19% | ||||||||||
FY18 | FY19 | FY20 | Jan.21 |
Strong improvement in the underlying dynamics of our customer acquistion thanks to:
- Smarter onboarding process now integrated in the APP with a dedicated CRM chat
- Improved brand perception after first marketing campaign at the end of 1Q20
- Active current accounts have done at least one operation among Listed or OTC services.
- Profitable excluding marketing expenses
30 Source: internal elaboration GB Department
Fineco UK: next steps
Getting closer to launch the Investing offer
- Further enlargement of our fund offer
- ISA are now live in "Family&Friends" with >200 early access requests in a two weeks time of coming soon campaign
- New section for funds in our APP
2020 | 1Q21 | 2021 |
ISA Account
APP: new section for funds
coming soon
AND MORE COMING
31
Agenda
Fineco Results
Next steps
Fineco UK
Key messages
Focus on product areas
32
Long term sustainability at the heart of Fineco's business model (1/3)
We are a looking-forward organization playing for the long-run and able to generate a positive impact for all our stakeholders and the society as a whole
Our corporate purpose: to offer clients a quality and multichannel one-stop-solution
with a fair pricing leveraging on our 3 pillars
TRANSPARENCY | FAM as a champion of ESG: PERFORMANCE FEES FREE trademark |
Fairness and respect | FAIR PRICING |
for all our stakeholders | LOW UPFRONT FEES (only ~3% of Investing fees) |
EFFICIENCY
Fintech DNA: strong focus on IT & Operations, more flexibility, less costs
INNOVATION
Quality offer for highly
SATISFIED CLIENTS
- Delivering BEST-IN-CLASS CUSTOMER EXPERIENCE
- SHARING FAM BENEFITS WITH CLIENTS:
better quality and timely products with lower TER - NO short-term AGGRESSIVE COMMERCIAL OFFERS and ZERO REMUNERATION on current accounts
- Focus on ORGANIC GROWTH
33
Long term sustainability at the heart of Fineco's business model (2/3)
We are a looking-forward organization playing for the long-run and able to generate a positive impact for all our stakeholders and the overall society
We have an ESG-friendly model by being sustainable since inception
- MARKET FRIENDLY CORPORATE GOVERANCE:
- Up to 3 lists for Board renewal
- 10 independent Board members out of 11
- Ramping up the GOVERNANCE OF SUSTAINABILITY:
2020 AGM, % of represented shares in favour:
- 86.2% for outgoing Board list proposal
- 97.5% for 2020 remuneration policy
- Sustainability Committee at Board and Managerial level
- Sustainability Team within CFO Department
- FOCUS on Cyber-Security and ESG risks leveraging on FINTECH DNA
- Broad ESG product offer: both on Investing (i.e. ~57% of funds have ESG rating Morningstar) and Lending ("Green mortgages")
- FinecoBank is signatory of UN Global Compact and UN PRB (UN Principles for Responsible Banking)
- Fineco AM is signatory of UN PRI (UN Principles for Responsible Investing)
34
Long term sustainability at the heart of Fineco's business model (3/3)
We are a forward-looking organization playing for the long-run and able to generate a positive impact for all our stakeholders and the overall society
ESG RATING
"A" confirmed in 2020: | ESG Risk Rating at 18.7 |
Fineco "leads peers in | (Low Risk) far better than |
customer protection and | industry avg (30.3) |
governance efforts" | |
ESG INDEX |
Fineco is a constituent company in the FTSE4Good
Index, measuring the performance of companies with strong ESG practices
Upgraded to "EE+"
(very strong) in 2020
In 2021 Fineco has been included in the index, which tracks the performance of public companies
committed to transparency in gender-data reporting
35
Fineco as a profitable Fintech Bank
Leveraging on a deep-rooted internal know-how to expand platform scalability and operating gearing
- PROPRIETARY, INTEGRATED BACK-END
Senior management experienced in IT
No external consultants nor system integrator
18% FTEs in IT Department
24% FTEs in Back-Office
OUR INTERNAL IT KNOW-HOW
FOCUS ON IT OPERATIONS
- Extreme process automation
- Critical processes always in-house
- Time to market and cost reduction
- Continuous innovation fully in-housedeveloped
FULLY INTEGRATED BUSINESS STRUCTURE
- Core system internally managed
- Internal DWH to exploit our Big Data Analytics
- CRM dedicated team for all clients needs
IT SECURITY
A S T R A T E G I C C H O I C E
r e s u l t i n g i n u n m a t c h e d
u s e r e x p e r i e n c e f o r b o t h o u r c l i e n t s a n d P F A s
- SINGLE DATABASE POWERING
A STRONG DATA MANAGEMENT
- Governance, implementation and operations for cybersecurity & anti-fraud internally managed
- Ownership and control of critical infrastructure, relying on cloud for massive, scale-out workload needs only
36
Healthy and sustainable growth with a long term horizon
Highly scalable operating platform…
2014 2015 2016 2017 2018 2019 2020 CAGR (2014-2020)
81 | 92 | + 11% | ||||||
69 | ||||||||
67 | 1,370 | + 6% | ||||||
60 | 1,358 | |||||||
55 | 1,278 | |||||||
TFA (bn) | 49 | 1,200 | 342 | +14% | ||||
1,118 | 284 | |||||||
1,048 | 254 | |||||||
Clients (thd, #) | 964 | 226 | 776 | |||||
197 | 208 | 658 | + 9% | |||||
628 | ||||||||
Net profit (1) (mln) | 155 | |||||||
587 | ||||||||
544 | ||||||||
544 | ||||||||
Revenues (1) (mln) | 451 | 270 | + 4% | |||||
233 | 244 | 250 | ||||||
226 | ||||||||
Costs (1) (mln) | 212 | 233 | ||||||
Cost/ Income (1) (%) | 47 | 43 | 42 | |||||
40 | -12 p.p. | |||||||
39 | 38 | 35 | ||||||
…with a diversified revenues mix leading consistent results in every market conditions
Net Profit adjusted (net of systemic charges) (1), mln
CAGR | +11.3% |
37.3 | 40.1 | 36.4 | 40.8 | 47.8 | 45.9 | 55.1 | 47.7 | 51.2 | 49.8 | 52.0 | 54.8 | 51.7 | 52.6 | 61.0 | 60.4 | 59.0 | 66.2 | 63.2 | 65.6 | 63.5 | 75.6 | 73.4 | 72.0 | 92.4 | 89.2 | 84.1 | 76.8 |
1Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q194Q191Q202Q203Q204Q20 |
- Figures adjusted by non recurring items and Net Profit adjusted net of systemic charges: (FY15: -3.1mln net, FY16: -7.1mln net, FY17: -7.1mln net, FY18: -9.6mln net, FY19: -12.1 mln net, 1Q20: -0.3mln gross, -0.2mln net, 2Q20: -0.7mln gross, -0.4mln net; 3Q20: -28.0mln gross, -18.7mln net; 4Q20: +2.1mln gross, +1.4mln net)
37
Safe Balance Sheet: simple, highly liquid
Diversified investment portfolio
- Investment strategy announced during FY17 results unchanged: UC bonds run-offs, blend of government bonds diversified across countries, covered bonds, supranational and agencies
- 99.6% not exposed to volatility: HTC classification since November 2016
High-quality lending growth
- Lending offered exclusively to our well-knownbase of clients
- Low-risk: CoR at 10bps, cautious approach on mortgages (LTV ~49%, avg maturity 18 yrs)
- Strong competitive advantage leveraging on Big Data Analytics and continuous innovation (i.e. look-through implementation with significant benefits on CET1 ratio)
Rock - solid capital position
CET1 | 28.6% | LCR >900% | NSFR 308.5% |
TCR | 41.7% | LEVERAGE RATIO 4.85% | |
(1) Due from banks includes 1.8bn cash deposited at Bank of Italy as of Dec. 2020
31.8 bn
24.0 | |
28.4 | |
4.5 | |
2.5 | 1.7 |
1.7 | |
0.7 | |
Assets | Liabilities |
Financial Assets | Customer deposits | ||
Customer loans | (1) | Other liabilities | |
Due from Banks | Equity | ||
Other
38
Total assets: 99.6% not exposed to volatility in the Balance Sheet
Out of 31.8bn, only 0.14bn of Assets valuated at fair value with very limited impacts on Equity reserve
Total Assets, eop bn
Gov. Bonds at fair value | UC Bonds | Other (2) | |
Other Bonds at amortized costs | Due from banks(1) |
Covered bonds and financial corporate | Customers loans | |||||
31.8 | o/w Total non UCG Bonds: | |||||
0.1 | 17.9 bn (3) | |||||
SSA | ||||||
Spain | 2.0 | Ireland | ||||
4.1 | ||||||
16.8 | 0.9 | |||||
France | ||||||
1.2 | ||||||
Financial investments | 1.0 Covered & Financial | |||||
at amortized costs (HTC) | ||||||
1.0 | ||||||
5.7 | 5.8 | 2.9 | (4) | |||
Other | ||||||
Italy | ||||||
2.5 | ||||||
4.5 | Massive de-risking of the Balance Sheet | |||||
1.0 | thanks to the full collateralization of UC bonds (May 10th, 2019) | |||||
Dec.20 |
- Due from banks includes 1.8bn cash deposited at Bank of Italy as of Dec.20
- Other refers to tangible and intangible assets, derivatives and other assets
- 17.9bn equal to 17.0bn nominal value, o/w Italy 5.4bn nominal value
- Other : US, Austria, Belgium, Germany, Poland, Portugal, United Kingdom, Switzerland, Chile, Israel, Saudi Arabia, China
39
Agenda
Fineco Results
Next steps
Fineco UK
Key messages
Focus on product areas
40
Revenues by Product Area
Well diversified stream of revenues allow the bank to successfully face any market
environment | ||||||||||||
Banking, mln | 37% | |||||||||||
-0.8% | ||||||||||||
-13.6% | 291.7 | 289.5 | ||||||||||
-15.2% | ||||||||||||
72.5 | 73.9 | 62.7 | ||||||||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | ||||||||
Brokerage, mln | 30% | Investing, mln | 32% | |||||||||
FY20 | ||||||||||||
+72.9% | Management | |||||||||||
+43.7% | fees | +7.1% | ||||||||||
+11.3% | +4.6% y/y | |||||||||||
+3.8% | 229.2 | +5.6% | ||||||||||
132.6 | 228.9 | 245.3 | ||||||||||
35.9 | 49.7 | 51.6 | 58.8 | 62.0 | 65.4 | |||||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | 4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | |||
FY20 weight on total revenues for each product area |
Managerial Data. Revenues attributable to single each product area, generated by products / services offered to customers according to the link between
41 products and product area. Banking includes revenues generated by direct deposits and credit products. Investing includes revenues generated by asset under management products; Brokerage includes revenues from trading activity.
Banking
Sound performance driven by strong volume growth and relentless clients' acquisition, thanks to high quality services and best-in-class customer satisfaction
Revenues
mln | Net Interest | Trading income |
Fees and commissions | Other |
-13.6% | 4Q20: | -0.8% | |||||
-3.8% q/q | |||||||
excluding | 291.7 | ||||||
-15.2% | banking fees | 289.5 | |||||
from smart | |||||||
73.9 | |||||||
72.6 | repricing | ||||||
258.1
62.7270.3
66.9 64.5
60.1 | 31.0 | ||||
9.7 | 21.3 | ||||
5.3 | 0.1 | ||||
2.2 | -0.10.6 | ||||
0.1 0.2 | -0.30.0 | 0.4 | |||
-0.20.4 | |||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
Deposits
Eop, bn
+9.5%
+6.0%
25.6 26.4 28.0
Dec.19 Sep.20 Dec.20
Clients and new clients
thd, # # of new clients
+0.9%
+0.6%
1,358 1,362 1,370 1,374
Dec.19 | Sep.20 | Dec.20 | Jan.21 |
118 | 67 | 94 | 12 |
Managerial Data
42
Brokerage
Revamped Brokerage thanks to skyrocketing volatility combined with the review of the offer. Growing market share in Italy and continuous enlargement of product offer
Revenues | |||||
mln | Net Interest | Trading profit | |||
Fees and commissions | +72.9% | ||||
229.2 | |||||
+43.7% | 11.5 | ||||
+3.8% | 132.6 | 130.4 | |||
14.0 | |||||
35.9 | 49.7 | 51.6 | 77.3 | ||
3.1 | 2.9 | 87.4 | |||
3.420.8 | |||||
26.5 | 30.7 | 41.3 | |||
11.7 | 20.1 | 18.0 | |||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
Executed orders
Well-diversified brokerage offer
among products… | …and geographies |
Funds | Other markets |
Forex / CFD | |
Italy |
7% | |||||
8% | 46% | 35% | |||
Derivatives 21% | |||||
62% | |||||
1% | 19% | ||||
Bonds | Equity | ||||
US | |||||
Volatility (1)
mln | ||||
+67.4% | +84.6% | |||
+14.3% | ||||
25.3 | 46.8 | |||
6.8 | 10.0 | 11.4 | ||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 |
Managerial Data
43 | (1) Volatility calculated as avg weekly volatility of BUND, BTP, SP, EUROSTOXX, MINIDAX, DAX, FIB, MINIFIB, NASDAQ, DOW weighted on volumes related to futures |
traded by our clients |
Investing
Increasing revenues y/y thanks to a successful strategy based on our cyborg advisory approach. Very limited upfront fees, representing only ~3% of investing fees
Revenues | Assets under Management | |||||||||||
mln | Upfront fees | PFA incentives(1) | eop, bn | Guided Products / AUM | ||||||||
Management fees | Other income | +7.1% | +12.0% | |||||||||
245.3 | +8.7% | |||||||||||
FY20 Management fees | 228.9 | |||||||||||
6.3 | 40.5 | 41.7 | 45.4 | |||||||||
+4.6 y/y | 5.4 | |||||||||||
71% | 73% | 74% | ||||||||||
Dec.19 | Sep.20 | Dec.20 | ||||||||||
+11.3% | ||||||||||||
+5.6% | 241.3 | 252.5 | Average Asset under Management | |||||||||
daily avg, bn | ||||||||||||
58.8 | 62.0 | 65.4 | +10.3% | |||||||||
1.8 | 1.5 | 1.8 | +4.7% | |||||||||
63.0 | 67.5 | +9.5% | ||||||||||
64.2 | ||||||||||||
-8.72.7 | -3.90.2 | -5.31.4 | -20.52.7 | -15.11.6 | 39.3 | 41.4 | 43.4 | 37.2 | 40.7 | |||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | ||||||||
4Q19 | 3Q20 | 4Q20 | 2019 | 2020 | ||||||||
Managerial Data | ||||||||||||
Investing Revenues also include extraordinary revenues coming from Fineco Asset Management costs efficiencies on Core Series achieved during the year |
44
Annex
45
P&L
mln | 1Q19 | 2Q19 | 3Q19 | 4Q19 | FY19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY20 | |||
Net interest income | 70.4 | 71.4 | 69.8 | 69.7 | 281.3 | 68.2 | 70.1 | 68.6 | 63.9 | 270.7 | |||
Net commissions | 77.4 | 81.3 | 84.3 | 82.3 | 325.2 | 105.0 | 104.8 | 97.9 | 96.7 | 404.3 | |||
Trading profit | 9.8 | 8.0 | 11.6 | 15.3 | 44.8 | 26.4 | 30.1 | 20.2 | 19.1 | 95.8 | |||
Other expenses/income | 0.2 | 0.3 | 0.1 | 2.9 | 3.6 | 0.6 | 0.8 | 0.2 | 2.0 | 3.6 | |||
Total revenues | 157.7 | 161.1 | 165.8 | 170.2 | 654.8 | 200.1 | 205.8 | 186.9 | 181.6 | 774.4 | |||
Staff expenses | -21.7 | -22.4 | -22.5 | -23.6 | -90.2 | -24.0 | -24.9 | -24.6 | -26.0 | -99.5 | |||
Other admin.exp. net of recoveries | -38.5 | -34.4 | -29.4 | -34.3 | -136.6 | -36.5 | -34.6 | -33.4 | -40.1 | -144.6 | |||
D&A | -5.1 | -5.4 | -5.8 | -6.6 | -22.9 | -6.1 | -6.2 | -6.4 | -6.8 | -25.4 | |||
Operating expenses | -65.3 | -62.3 | -57.6 | -64.4 | -249.6 | -66.5 | -65.7 | -64.4 | -72.9 | -269.6 | |||
Gross operating profit | 92.5 | 98.8 | 108.2 | 105.8 | 405.2 | 133.6 | 140.0 | 122.4 | 108.7 | 504.8 | |||
Provisions | -1.0 | -2.9 | -19.8 | -3.5 | -27.2 | -1.1 | -6.5 | -32.0 | 5.5 | -34.1 | |||
LLP | -1.3 | 1.1 | -1.2 | -0.6 | -2.0 | -1.0 | -2.7 | 0.1 | 0.2 | -3.3 | |||
Profit from investments | -0.7 | 6.5 | 0.4 | 1.1 | 7.4 | -0.1 | -3.7 | -0.2 | -2.3 | -6.3 | |||
Profit before taxes | 89.5 | 103.5 | 87.6 | 102.8 | 383.5 | 131.4 | 127.1 | 90.4 | 112.2 | 461.1 | |||
Income taxes | -27.3 | -31.7 | -26.6 | -9.6 | -95.1 | -40.0 | -38.3 | -25.3 | -34.0 | -137.5 | |||
Net profit for the period | 62.3 | 71.8 | 61.0 | 93.2 | 288.4 | 91.4 | 88.7 | 65.2 | 78.2 | 323.6 | |||
Net profit adjusted (1) | 63.5 | 75.6 | 61.7 | 71.6 | 272.3 | 92.2 | 88.7 | 65.3 | 78.2 | 324.5 | |||
Non recurring items (mln, gross) | 1Q19 | 2Q19 | 3Q19 | 4Q19 | FY19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY20 | |||
Extraord systemic charges (Trading Profit) (2) | -0.4 | -4.3 | 0.4 | 1.4 | -3.0 | -1.2 | 0.0 | -0.2 | 0.0 | -1.4 | |||
Patent Box | -0.9 | -0.9 | -0.9 | 20.7 | 18.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
Total | -1.3 | -5.2 | -0.5 | 22.1 | 15.1 | -1.2 | 0.0 | -0.2 | 0.0 | -1.4 | |||
(1) Net of non recurring items | ||
46 | (2) | Voluntary Scheme valuation |
P&L net of non recurring items
mln | 1Q19 | 2Q19 | 3Q19 | 4Q19 | FY19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY20 | |||
Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | ||||
Net interest income | 70.4 | 71.4 | 69.8 | 69.7 | 281.3 | 68.2 | 70.1 | 68.6 | 63.9 | 270.7 | |||
Net commissions | 77.4 | 81.3 | 84.3 | 82.3 | 325.2 | 105.0 | 104.8 | 97.9 | 96.7 | 404.3 | |||
Trading profit | 10.3 | 12.3 | 11.2 | 13.9 | 47.7 | 27.6 | 30.1 | 20.4 | 19.1 | 97.2 | |||
Other expenses/income | 0.2 | 0.3 | 0.1 | 2.9 | 3.6 | 0.6 | 0.8 | 0.2 | 2.0 | 3.6 | |||
Total revenues | 158.2 | 165.4 | 165.4 | 168.8 | 657.8 | 201.3 | 205.8 | 187.1 | 181.6 | 775.8 | |||
Staff expenses | -21.7 | -22.4 | -22.5 | -23.6 | -90.2 | -24.0 | -24.9 | -24.6 | -26.0 | -99.5 | |||
Other admin.expenses | -38.5 | -34.4 | -29.4 | -34.3 | -136.6 | -36.5 | -34.6 | -33.4 | -40.1 | -144.6 | |||
D&A | -5.1 | -5.4 | -5.8 | -6.6 | -22.9 | -6.1 | -6.2 | -6.4 | -6.8 | -25.4 | |||
Operating expenses | -65.3 | -62.3 | -57.6 | -64.4 | -249.6 | -66.5 | -65.7 | -64.4 | -72.9 | -269.6 | |||
Gross operating profit | 92.9 | 103.1 | 107.8 | 104.4 | 408.2 | 134.8 | 140.0 | 122.7 | 108.7 | 506.2 | |||
Provisions | -1.0 | -2.9 | -19.8 | -3.5 | -27.2 | -1.1 | -6.5 | -32.0 | 5.5 | -34.1 | |||
LLP | -1.3 | 1.1 | -1.2 | -0.6 | -2.0 | -1.0 | -2.7 | 0.1 | 0.2 | -3.3 | |||
Profit from investments | -0.7 | 6.5 | 0.4 | 1.1 | 7.4 | -0.1 | -3.7 | -0.2 | -2.3 | -6.3 | |||
Profit before taxes | 90.0 | 107.8 | 87.2 | 101.4 | 386.4 | 132.6 | 127.1 | 90.7 | 112.2 | 462.5 | |||
Income taxes | -26.5 | -32.2 | -25.6 | -29.8 | -114.2 | -40.4 | -38.3 | -25.3 | -34.0 | -138.0 | |||
Net profit adjusted (1) | 63.5 | 75.6 | 61.7 | 71.6 | 272.3 | 92.2 | 88.7 | 65.3 | 78.2 | 324.5 |
(1) Net of non recurring items (see page 46 for details)
47
2020 P&L FinecoBank and Fineco Asset Management
mln | Fineco Asset | FinecoBank | FinecoBank | |||||||
Management | Individual | Consolidated | ||||||||
Net interest income | -0.2 | 271.0 | 270.7 | |||||||
Dividends | 0.0 | 52.1 | 0.0 | |||||||
Net commissions | 67.7 | 336.5 | 404.3 | |||||||
Trading profit | 0.1 | 95.7 | 95.8 | |||||||
Other expenses/income | 1.6 | 2.1 | 3.6 | |||||||
69.1 | 757.4 | 774.4 | ||||||||
Total revenues | ||||||||||
Staff expenses | -4.5 | -95.0 | -99.5 | |||||||
Other admin.exp. net of recoveries | -4.3 | -140.4 | -144.6 | |||||||
D&A | -0.2 | -25.2 | -25.4 | |||||||
Operating expenses | -9.1 | -260.6 | -269.6 | |||||||
Gross operating profit | 60.1 | 496.8 | 504.8 | |||||||
Provisions | 0.0 | -34.1 | -34.1 | |||||||
LLP | 0.0 | -3.3 | -3.3 | |||||||
Profit on Investments | 0.0 | -6.3 | -6.3 | |||||||
Profit before taxes | 60.1 | 453.1 | 461.1 | |||||||
Income taxes | -7.6 | -130.0 | -137.5 | |||||||
Net profit for the period | 52.5 | 323.1 | 323.6 | |||||||
48
Details on Net Interest Income
mln | 1Q19 | Volumes & | 2Q19 | Volumes & | 3Q19 | Volumes & | 4Q19 | Volumes & | 1Q20 | Volumes & | 2Q20 | Volumes & | 3Q20 | Volumes & | 4Q20 | Volumes & | FY19 | Volumes & | FY20 | Volumes & | ||
Margins | Margins | Margins | Margins | Margins | Margins | Margins | Margins | Margins | Margins | |||||||||||||
Financial Investments | 57.1 | 19,748 | 58.0 | 20,582 | 55.9 | 21,714 | 56.0 | 22,114 | 54.8 | 22,543 | 56.3 | 22,676 | 53.0 | 22,491 | 49.0 | 23,334 | 227.0 | 21,040 | 213.1 | 22,761 | ||
Net Margin | 1.17% | 1.13% | 1.02% | 1.01% | 0.98% | 1.00% | 0.94% | 0.84% | 1.08% | 0.94% | ||||||||||||
Gross margin | 59.7 | 1.23% | 60.4 | 1.18% | 58.5 | 1.07% | 57.7 | 1.04% | 56.8 | 1.01% | 57.1 | 1.01% | 53.1 | 0.94% | 49.1 | 0.84% | 236.3 | 1.12% | 216.1 | 0.95% | ||
Other Treasury activities | ||||||||||||||||||||||
(unsecured lending and | 0.0 | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | 0 | 0.1 | 69 | 0.8 | 784 | 1.0 | 1,101 | 1.2 | 1,517 | 0.0 | 0 | 3.1 | 868 | ||
collateral switch) | ||||||||||||||||||||||
Net Margin | 0.00% | 0.00% | 0.00% | 0.00% | 0.44% | 0.39% | 0.36% | 0.33% | 0.00% | 0.35% | ||||||||||||
Security Lending ( Tiering ) | 0.6 | 836 | 0.4 | 386 | 0.0 | 0 | 0.3 | 307 | 0.7 | 634 | 1.3 | 1,132 | 1.3 | 1,013 | 1.0 | 587 | 1.4 | 382 | 4.4 | 841 | ||
Net Margin | 0.32% | 0.44% | 0.00% | 0.44% | 0.44% | 0.46% | 0.52% | 0.71% | 0.37% | 0.52% | ||||||||||||
Leverage - Long | 2.7 | 129 | 3.2 | 153 | 3.3 | 157 | 3.3 | 154 | 2.9 | 137 | 2.4 | 117 | 3.1 | 150 | 2.8 | 138 | 12.4 | 148 | 11.1 | 136 | ||
Net Margin | 8.45% | 8.35% | 8.38% | 8.38% | 8.42% | 8.13% | 8.13% | 8.10% | 8.39% | 8.20% | ||||||||||||
Lending | 10.5 | 2,410 | 10.8 | 2,544 | 11.1 | 2,674 | 10.9 | 2,828 | 11.0 | 3,094 | 11.4 | 3,393 | 11.6 | 3,582 | 11.1 | 3,670 | 43.3 | 2,614 | 45.0 | 3,435 | ||
Net Margin | 1.76% | 1.71% | 1.64% | 1.53% | 1.42% | 1.35% | 1.28% | 1.20% | 1.66% | 1.31% | ||||||||||||
o/w Current accounts | 2.9 | 1,040 | 3.2 | 1,112 | 3.2 | 1,169 | 3.4 | 1,241 | 3.4 | 1,316 | 3.6 | 1,375 | 3.6 | 1,453 | 3.7 | 1,527 | 12.7 | 1,141 | 14.3 | 1,418 | ||
Net Margin | 1.14% | 1.14% | 1.10% | 1.07% | 1.05% | 1.04% | 0.99% | 0.97% | 1.11% | 1.01% | ||||||||||||
o/w Cards | 1.2 | 43 | 1.2 | 42 | 1.2 | 43 | 1.2 | 43 | 1.2 | 43 | 1.1 | 40 | 1.1 | 39 | 1.1 | 38 | 4.9 | 43 | 4.5 | 40 | ||
Net Margin(1) | 11.43% | 11.42% | 11.40% | 11.40% | 11.41% | 11.40% | 11.43% | 11.45% | 11.41% | 11.42% | ||||||||||||
o/w Personal loans | 4.6 | 441 | 4.6 | 448 | 4.6 | 457 | 4.5 | 459 | 4.5 | 462 | 4.4 | 448 | 4.2 | 437 | 4.2 | 439 | 18.3 | 451 | 17.4 | 447 | ||
Net Margin | 4.20% | 4.09% | 3.98% | 3.92% | 3.93% | 3.93% | 3.86% | 3.82% | 4.05% | 3.88% | ||||||||||||
o/w Mortgages | 1.8 | 886 | 1.9 | 942 | 2.0 | 1,005 | 1.8 | 1,084 | 1.8 | 1,273 | 2.3 | 1,530 | 2.6 | 1,653 | 2.1 | 1,666 | 7.4 | 979 | 8.8 | 1,530 | ||
Net Margin | 0.80% | 0.82% | 0.79% | 0.64% | 0.57% | 0.61% | 0.63% | 0.49% | 0.76% | 0.57% | ||||||||||||
Other (2) | -0.5 | -1.0 | -0.4 | -0.8 | -1.3 | -2.1 | -1.3 | -1.3 | -2.8 | -5.9 | ||||||||||||
Total | 70.4 | 71.4 | 69.8 | 69.7 | 68.2 | 70.1 | 68.6 | 63.9 | 281.3 | 270.7 | ||||||||||||
Gross Margin | 1.26% | 1.25% | 1.17% | 1.11% | 1.08% | 1.04% | 0.98% | 0.88% | 1.20% | 0.99% | ||||||||||||
Cost of Deposits | -0.05% | -0.04% | -0.04% | -0.03% | -0.03% | -0.01% | 0.00% | 0.00% | -0.04% | -0.01% | ||||||||||||
Volumes and margins: average of the period
Net margin calculated on real interest income and expenses
2019 quarterly figures have been reclassified due to a managerial recast
- Net margins and volumes on cards recasted for the previous quarters: now they include only revolving cards, while they were previously calculated on total cards, both spending and revolving.
- Other includes mainly marketing costs
49
UniCredit bonds underwritten
ISIN | Currency | Amount (€ m) | Maturity | Indexation | Spread | |
1 | IT0005010332 | Euro | 382.5 | 6-Jan-21 | Euribor 1m | 2.54% |
2 | IT0005010316 | Euro | 382.5 | 6-Apr-21 | Euribor 1m | 2.56% |
3 | IT0005010340 | Euro | 382.5 | 5-Jul-21 | Euribor 1m | 2.58% |
4 | IT0005010225 | Euro | 382.5 | 18-Oct-21 | Euribor 1m | 2.60% |
5 | IT0005040099 | Euro | 100.0 | 24-Jan-22 | Euribor 1m | 1.46% |
6 | IT0005057994 | Euro | 200.0 | 11-Apr-22 | Euribor 1m | 1.43% |
7 | IT0005083743 | Euro | 300.0 | 28-Jan-22 | Euribor 1m | 1.25% |
8 | IT0005114688 | Euro | 180.0 | 19-May-22 | Euribor 1m | 1.19% |
9 | IT0005120347 | Euro | 700.0 | 27-Jun-22 | Euribor 1m | 1.58% |
10 | IT0005144065 | Euro | 450.0 | 14-Nov-22 | Euribor 3m | 1.40% |
11 | IT0005144073 | Euro | 350.0 | 15-Nov-21 | Euribor 3m | 1.29% |
12 | IT0005158412 | Euro | 250.0 | 23-Dec-22 | Euribor 3m | 1.47% |
13 | IT0005163180 | Euro | 600.0 | 11-Feb-23 | Euribor 3m | 1.97% |
14 | IT0005175135 | Euro | 100.0 | 24-Mar-23 | Euribor 3m | 1.58% |
15 | IT0005217606 | Euro | 350.0 | 11-Oct-23 | Euribor 3m | 1.65% |
16 | IT0005241317 | Euro | 622.5 | 2-Feb-24 | Euribor 3m | 1.52% |
Total | Euro | 5,732.5 | Euribor 1m | 1.82% | ||
In order to calculate an average spread on Eur1m, an average basis swap of 0.02% is considered
50
Financial Investments
Further improvements for a diversified asset side.
Bond Portfolio, avg bn | Bond portfolio run-offs,eop bn | ||||||||
UC bonds Spain | SSA (1) | UC Bonds | Govies & SSA | Covered & Corporate | |||||
Italy | Other Govies(2) | Covered & Corporate | 3.2 | 3.1 | ||||||||||||
+5.8% | 2.8 | |||||||||||||||
2.5 | 2.5 | |||||||||||||||
+1.1% | +13.8% | 1.9 | 2.2 | 2.0 | 1.7 | |||||||||||
1.5 | 1.6 | 1.5 | ||||||||||||||
22.6 | 22.8 | 22.7 | 2.6 | |||||||||||||
21.6 | 0.6 | 2.3 | 2.3 | |||||||||||||
19.9 | ||||||||||||||||
1.8 | ||||||||||||||||
6.1 | 5.8 | 6.4 | 1.1 | |||||||||||||
1.7 | ||||||||||||||||
7.5 | 1.3 | 1.4 | ||||||||||||||
1.0 | 0.0 | |||||||||||||||
8.1 | 0.9 | |||||||||||||||
0.3 | ||||||||||||||||
5.5 | 5.6 | 5.5 | 0.5 | 0.3 | 0.0 | |||||||||||
0.0 | 0.0 | 0.1 | 0.2 | 0.1 | 0.2 | 0.2 | 0.0 | 0.0 | 0.3 | |||||||
5.0 | 0.0 | |||||||||||||||
3.9 | 4.3 | 0.0 | ||||||||||||||
3.8 | 3.9 | |||||||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2044 | |||||
3.8 | 3.5 | |||||||||||||||
4.8 | ||||||||||||||||
3.4 | 4.2 | 4.1 | ||||||||||||||
0.9 2.0 | 1.0 1.8 | 2.6 | 0.9 1.8 | |||||||||||||
0.6 1.2 | 234 | 144 | 184 | 154 | UC Bonds avg spread vs Eur1M, bps | |||||||||||
0.3 1.0 | ||||||||||||||||
4Q19 | 3Q20 | 4Q20 | FY19 | FY20 | ||||||||||||
Avg Bond portfolio FY20 (excl. UC Bonds): | Residual maturity total portfolio: 5.0 yrs | |||||||||||||||
16.3bn, +38% y/y | o/w UC Bonds: 1.5 yrs | |||||||||||||||
67% at fixed rate, avg yield: 60bps (3) | o/w bonds (excl. UC bonds): 6.2 yrs |
- Sovereign Supranational and Agencies
- Avg 4Q20 "Other" includes: 1.1bn France, 0.9bn Ireland, 0.8bn USA, 0.6bn Belgium, 0.5bn Austria, 0.4bn Portugal, 0.1bn Germany, 0.1bn Israel, 0.3bn other (UK, Poland, Switzerland, Saudi Arabia, Chile, China)
51 | (3) Calculated on nominal value as of Dec 31st 2020 |
Details on Net Commissions
mln | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY19 | FY20 | ||
Banking | 4.5 | 5.6 | 5.9 | 5.3 | 8.8 | 10.3 | 9.7 | 2.2 | 21.3 | 31.0 | ||
Brokerage | 18.5 | 18.0 | 20.0 | 20.8 | 35.6 | 37.6 | 26.5 | 30.7 | 77.3 | 130.4 | ||
o/w | ||||||||||||
Equity | 15.6 | 14.7 | 15.9 | 17.0 | 30.0 | 31.0 | 21.7 | 26.5 | 63.2 | 109.2 | ||
Bond | 0.9 | 0.9 | 1.4 | 0.7 | 1.0 | 3.8 | 2.2 | 1.9 | 3.9 | 9.0 | ||
Derivatives | 2.3 | 2.2 | 2.7 | 2.6 | 4.5 | 3.7 | 2.6 | 2.7 | 9.7 | 13.5 | ||
Other commissions(1) | -0.2 | 0.2 | 0.0 | 0.6 | 0.0 | -0.9 | 0.1 | -0.4 | 0.5 | -1.3 | ||
Investing | 54.2 | 57.6 | 58.3 | 56.1 | 60.8 | 57.1 | 61.8 | 64.0 | 226.2 | 243.7 | ||
o/w | ||||||||||||
Placement fees | 1.1 | 1.3 | 1.1 | 1.8 | 1.7 | 1.4 | 1.5 | 1.8 | 5.4 | 6.3 | ||
Management fees | 57.1 | 59.7 | 61.5 | 63.0 | 61.9 | 58.9 | 64.2 | 67.5 | 241.3 | 252.5 | ||
to PFA's: incentives | -3.0 | -4.3 | -3.6 | -8.0 | -2.5 | -2.6 | -3.1 | -4.7 | -18.9 | -12.9 | ||
to PFA's: LTI | -1.0 | 0.8 | -0.7 | -0.7 | -0.2 | -0.7 | -0.7 | -0.6 | -1.6 | -2.2 | ||
Other | 0.1 | 0.1 | 0.1 | 0.1 | -0.2 | -0.2 | -0.2 | -0.2 | 0.4 | -0.8 | ||
Total | 77.4 | 81.3 | 84.3 | 82.3 | 105.0 | 104.8 | 97.9 | 96.7 | 325.2 | 404.3 |
- Other commissions include security lending and other PFA commissions related to AuC
52
Revenues breakdown by Product Area
mln | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY19 | FY20 | ||
Net interest income | 67.6 | 68.8 | 67.0 | 66.9 | 65.8 | 67.7 | 64.5 | 60.1 | 270.3 | 258.1 | ||
Net commissions | 4.5 | 5.6 | 5.9 | 5.3 | 8.8 | 10.3 | 9.7 | 2.2 | 21.3 | 31.0 | ||
Trading profit | -0.1 | -0.1 | -0.2 | 0.2 | -0.1 | -0.1 | 0.0 | 0.1 | -0.2 | -0.1 | ||
Other | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | -0.3 | 0.4 | 0.4 | 0.6 | ||
Total Banking | 72.1 | 74.3 | 72.7 | 72.5 | 74.6 | 78.3 | 73.9 | 62.7 | 291.7 | 289.5 | ||
Net interest income | 3.4 | 3.7 | 3.4 | 3.4 | 3.0 | 2.5 | 3.1 | 2.9 | 14.0 | 11.5 | ||
Net commissions | 18.5 | 18.0 | 20.0 | 20.8 | 35.6 | 37.6 | 26.5 | 30.7 | 77.3 | 130.4 | ||
Trading profit | 8.2 | 9.9 | 11.5 | 11.7 | 25.1 | 24.2 | 20.1 | 18.0 | 41.3 | 87.4 | ||
Other | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
Total Brokerage | 30.2 | 31.6 | 34.9 | 35.9 | 63.6 | 64.2 | 49.7 | 51.6 | 132.6 | 229.2 | ||
Net interest income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
Net commissions | 54.2 | 57.6 | 58.3 | 56.1 | 60.8 | 57.1 | 61.8 | 64.0 | 226.2 | 243.7 | ||
Trading profit | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
Other | 0.0 | 0.0 | 0.0 | 2.7 | 0.1 | -0.2 | 0.2 | 1.4 | 2.7 | 1.6 | ||
Total Investing | 54.2 | 57.6 | 58.3 | 58.8 | 60.9 | 56.9 | 62.0 | 65.4 | 228.9 | 245.3 |
Managerial Data
Please note that, starting from December 31st, 2019, "Trading profit" also includes dividends and similar revenues on equity investments held at fair value in the item "Dividend income and similar revenue", previously included in the item "Dividends and other income from equity investments" in the reclassified income statement.
53
Breakdown Total Financial Assets
mln | Mar.19 | Jun.19 | Sep.19 | Dec.19 | Mar.20 | Jun.20 | Sep.20 | Dec.20 |
AUM | 35,988 | 36,819 | 38,325 | 40,505 | 35,516 | 40,083 | 41,744 | 45,381 |
o/w Funds and Sicav | 26,361 | 26,426 | 27,477 | 28,786 | 24,122 | 27,657 | 28,929 | 31,578 |
o/w Insurance | 8,401 | 9,002 | 9,369 | 10,115 | 9,961 | 10,676 | 11,020 | 11,819 |
o/w GPM | 1 | 26 | 55 | 93 | 127 | 169 | 185 | 209 |
o/w AuC + deposits under adviso | 1,225 | 1,365 | 1,425 | 1,512 | 1,307 | 1,580 | 1,610 | 1,776 |
o/w in Advice | 572 | 600 | 603 | 598 | 516 | 550 | 554 | 561 |
o/w in Plus | 653 | 765 | 822 | 914 | 792 | 1,030 | 1,056 | 1,215 |
AUC | 15,187 | 15,229 | 15,158 | 15,324 | 13,485 | 16,486 | 16,821 | 18,314 |
o/w Equity | 9,137 | 9,207 | 9,573 | 9,841 | 8,308 | 10,565 | 11,006 | 12,614 |
o/w Bond | 6,037 | 6,011 | 5,575 | 5,448 | 5,147 | 5,878 | 5,766 | 5,637 |
o/w Other | 13 | 12 | 11 | 35 | 30 | 43 | 49 | 63 |
Direct Deposits | 22,941 | 23,844 | 25,099 | 25,590 | 26,925 | 26,077 | 26,432 | 28,014 |
o/w Sight | 22,938 | 23,842 | 25,098 | 25,588 | 26,924 | 26,077 | 26,432 | 28,014 |
o/w Term | 2 | 2 | 2 | 1 | 1 | 1 | 0 | 0 |
Total | 74,116 | 75,892 | 78,583 | 81,419 | 75,927 | 82,646 | 84,997 | 91,709 |
o/w Guided Products & Services | 24,301 | 25,354 | 26,697 | 28,788 | 25,486 | 28,984 | 30,331 | 33,420 |
o/w TFA Private Banking | 29,041 | 29,970 | 31,891 | 33,437 | 28,844 | 33,024 | 34,438 | 38,614 |
AuC and Deposits under advisory have been reclassified within AuM in order to have a better representation of the advisory nature of Advice and Plus services
54
Balance Sheet
mln | Mar.19 | Jun.19 | Sep.19 | Dec.19 | Mar.20 | Jun.20 | Sep.20 | Dec.20 | |
Due from Banks(1) | 3,807 | 1,941 | 2,033 | 1,320 | 1,801 | 1,633 | 1,761 | 2,541 | |
Customer Loans | 3,029 | 3,409 | 3,568 | 3,680 | 3,741 | 4,204 | 4,320 | 4,528 | |
Financial Assets | 19,012 | 19,920 | 21,532 | 22,313 | 23,414 | 22,961 | 22,988 | 23,957 | |
Tangible and Intangible Assets | 243 | 242 | 247 | 279 | 280 | 280 | 278 | 281 | |
Derivatives | 29 | 49 | 72 | 65 | 76 | 76 | 76 | 74 | |
Other Assets | 259 | 274 | 308 | 366 | 207 | 259 | 298 | 374 | |
Total Assets | 26,380 | 25,835 | 27,760 | 28,023 | 29,519 | 29,412 | 29,721 | 31,755 | |
Customer Deposits | 23,311 | 24,140 | 25,429 | 25,920 | 27,202 | 27,021 | 27,297 | 28,360 | |
Due to Banks | 1,605 | 207 | 188 | 155 | 331 | 113 | 105 | 1,065 | |
Derivatives | 32 | 84 | 156 | 95 | 144 | 207 | 212 | 232 | |
Funds and other Liabilities | 393 | 477 | 698 | 471 | 365 | 515 | 487 | 411 | |
Equity | 1,040 | 928 | 1,289 | 1,382 | 1,477 | 1,556 | 1,620 | 1,687 | |
Total Liabilities and Equity | 26,380 | 25,835 | 27,760 | 28,023 | 29,519 | 29,412 | 29,721 | 31,755 | |
- Due from banks includes cash deposited at Bank of Italy: 1.8 bn as of Dec.20, 1.0 bn as of Sep.2020, 0.9bn as of June 2020, 1.2bn as of Mar.2020, 1.2bn as of June 2019, 1.2bn as of Sept. 2019, and 0.8bn as of Dec. 2019
55
Main Financial Ratios
Mar.19 | Jun.19 | Sep.19 | Dec.19 | Mar.20 | Jun.20 | Sep.20 | Dec.20 | ||
PFA TFA/ PFA (mln) (1) | 25.0 | 25.6 | 26.6 | 27.8 | 25.7 | 27.9 | 28.7 | 30.6 | |
Guided Products / TFA (2) | 33% | 33% | 34% | 35% | 34% | 35% | 36% | 36% | |
Cost / income Ratio (3) | 41.3% | 39.4% | 37.9% | 37.9% | 33.0% | 32.5% | 33.1% | 34.7% | |
restated | |||||||||
CET 1 Ratio (4) | 21.0% | 17.8% | 17.4% | 24.2% | 25.4% | 24.1% | 23.3% | 28.6% | |
restated | |||||||||
Adjusted RoE (5) | 31.2% | 34.0% | 27.3% | 25.1% | 26.5% | 26.0% | 23.4% | 21.2% | |
restated | |||||||||
Leverage Ratio (6) | 5.11% | 2.89% | 3.85% | 4.54% | 4.39% | 4.41% | 4.35% | 4.85% | |
56
(1) | PFA TFA/PFA: calculated as end of period Total Financial Assets related to the network divided by number of PFAs eop |
(2) | Calcuated as Guided Products eop divided by Total Financial Assets eop |
(3) | C/I ratio net of non recurring items (see page 46 for details) calculated as Operating Costs divided by Revenues net of non recurring items |
(4) | Dec.19 CET1 ratio restated |
(5) | RoE: Net Profit, net of non recurring items (see page 46 for details) divided by the average book shareholders' equity for the period (excluding dividends expected to be |
distributed and the revaluation reserves) . Dec.19 ROE is restated | |
(6) | Leverage ratios until Mar.19 are calculated on Individual basis, according to the EC Delegated Act 2015/62 regarding the exclusion of intra-group exposure. Dec.19 |
Leverage ratio restated
Fineco - a fully independent public company starting from May 2019
Strategy and Business model
Fineco exit from the UniCredit Group has no implications on its strategy and business model: Fineco enjoyed limited synergies with UniCredit and, as a fully independent company, continues to focus on maximizing shareholders' value via healthy, sustainable and organic growth
Transitional Arrangements with UniCredit Group
Fineco and UniCredit have agreed to enter into certain transitional arrangements to ensure full continuity and an orderly and smooth transition from a regulatory, liquidity and operational standpoint
INVESTMENT
STRATEGY
- No change in the investment policy envisaging an increasing diversification of financial investments as the existing stock of UniCredit bonds progressively runs off by 2024
- UniCredit has granted a financial collateral in favor of Fineco to secure the credit risk exposures towards UniCredit and neutralize the capital impacts and risk concentration limits
INFRAGROUP
SERVICES
TRADEMARK
- UniCredit will continue to provide, on an interim basis, certain services in order to allow Fineco to act in full operational continuity. The contract for customers' access to banking services through smart ATMs and physical branches has been extended for 20 years
- Fineco has exercised at the end of 2019 the option for the purchase of its brand at the price of €22.5mln plus VAT
57
Fineco Asset Management in a nutshell
AUM at €16.5bn, of which €10.8bn retail classes(1)
FUNDS OF
FUNDS
FAM SERIES
(sub-adviced
funds)
INSTITUTIONAL
BUSINESS
FAM EVOLUTION(30 strategies)
FAM Target: decumulation product to progressively invest in multi-thematic/profile funds
FAM Megatrend: multi-thematic fund investing in secular trends New building blocks both vertical and based on risk profile
FAM Target: decumulation products for customers who want to take advantage of bear market phases
CORE SERIES(30 strategies)
Release of Premium Share Classes
Additional sub-advisory mandates in pipeline to further enlarge the offer through quality and exclusivity agreements for Fineco clients only
FAM Global Defence: new capital preservation solution 34 strategies
Underlying funds for advisory solutions (both funds of funds and Insurance wrappers) allowing a better control of the value chain to retain more margins and lower customers' TER
42 strategies, including also Passive and new Smart Beta funds
BENEFITS
Quality improvement and time to market for customers and distribution needs
Several efficiencies leveraging on a vertically integrated business model combined with the strong operating efficiency which is in Fineco's DNA
Better risk management thanks to the look-through on daily basis on funds' underlying assets Win-winsolution: lower price for clients, higher margins
58
(1) Figures as of January 31st, 2021
Fineco UK vs Competitors
Products and services
Platform features
Usability, reliability and advanced tools
Coming Soon
59
Fineco UK: Premium service without premium price
Disruptive pricing 100% sustainable thanks to our strong operating leverage
OTC: zero commission, no added spreads | Platform fees: the most competitive |
Stock broking: flat fees
Multicurrency: best spreads, no commissions
(1) (1)
(1) (1)
(1) Plus Custody fees
Transaction fees
Equivalent for each transaction - Exchage rate GBP/EUR: 1,1217
60
Preserving our best price/quality ratio
An update on the main outcomes from our Smart Repricing
Competitive landscape (1)
€ | Online | € 88 avg | € 133 avg | ||||||||||||||||||||||||||||||||||||||||||||||||||
Branch | online costs | branch costs | |||||||||||||||||||||||||||||||||||||||||||||||||||
IWBank (IWConto) | 4 | 89 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Widiba (Conto Flat) | 20 | 49 | |||||||||||||||||||||||||||||||||||||||||||||||||||
ING (Conto Arancio) | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Webank | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fineco | 25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
HelloBank! (Hello! Money) | 58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Banca Sella (Websella) | 62 | 161 | |||||||||||||||||||||||||||||||||||||||||||||||||||
CreditAgricole (Easy) | 62 | 108 | |||||||||||||||||||||||||||||||||||||||||||||||||||
CheBanca! (Premier) | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
B.Generali (BG Deluxe) | 72 | 84 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Banco BPM (YouWelcome NEW) | 74 | 98 | |||||||||||||||||||||||||||||||||||||||||||||||||||
B.Mps (Mio Plus) | 81 | 93 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Poste Italiane (BancoPosta Medium) | 115 | 129 | |||||||||||||||||||||||||||||||||||||||||||||||||||
BNL (X-Smart) | 122 | 184 | |||||||||||||||||||||||||||||||||||||||||||||||||||
UBI Banca (Ubi Conto) | 127 | 170 | |||||||||||||||||||||||||||||||||||||||||||||||||||
BPER (Ondemand) | 137 | 166 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Deutsche Bank (Smart New) | 137 | 181 | |||||||||||||||||||||||||||||||||||||||||||||||||||
B.Mediolanum | 146 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
UniCredit (MyGenius Silver) | 185 | 295 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Intesa SanPaolo (Xme) | 204 | 219 | |||||||||||||||||||||||||||||||||||||||||||||||||||
- Most convenient current accounts. Source: Figures based on publicly available costs for families with average online operations of the main Italian banks (ICC - Indicatore Complessivo dei Costi). The figures relates to the costs of current accounts reported in brackets, and are not taking into account promotions on the fee for
61 the first year.
Additional Tier 1
First public placement successfully issued with strong demand (9x the offer)
€200 mln AT1 issued in January 2018 | €300 mln AT1 issued in July 2019 | |
- On January 23rd, 2018 the Bank issued a €200mln perpetual AT1
- Coupon fixed at 4.82% for the initial 5.5 years
- Private placement, fully subscribed by UniCredit SpA
- Semi-annualcoupon
- Coupon (net of taxes) will impact directly Equity reserves
- On July 11th, 2019 Fineco issued a €300mln perpetual AT1 in order to maintain the Leverage Ratio above 3.5% after the exit from the UniCredit Group
- Coupon fixed at 5.875% (initial guidance at 6.5%) for the initial
5.5 years - Public placement, with strong demand (9x, €2.7bn), listed in Euronext Dublin
- Semi-annualcoupon
- Coupon (net of taxes) will impact directly Equity reserves
- The instrument was assigned a BB- rating by S&P
Italian AT1 yield at first call date
On Oct. 29th, 2020
S&P Global Ratings
upgraded Fineco's outlook
to Stable and affirmed
ratings at BBB/A-2
62
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Disclaimer
Finecobank S.p.A. published this content on 09 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 February 2021 16:04:05 UTC.