BANCA GENERALI S.P.A. PRESS
RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 408 26683
Michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 408 26548
giuliana.pagliari@bancagenerali.it
Results at 31 March 2023
Banca Generali accelerates growth in Q1 2023
- Net profit: €83.1 million (+22%)
- Recurring net profit1: €77.0 million (+45%)
- Net interest income: €71.0 million (+215%)
- Net recurring fees: €113.3 million (-6%)
- 'Core' operating costs: €57.4 million (+6%)
Total assets hit a new all-time high
- Total assets: €85.9 billion (+2%)
- Assets under Advisory: €7.8 billion (+10%)
- Q1 2023 net inflows: €1.5 billion (+4%)
- YTD net inflows: €2.0 billion2 (+4%)
Top solidity and liquidity in the industry
- CET1 ratio at 16.0% and TCR at 17.1%
- LCR at 326% and NSFR at 224%
Milan, 11 May 2023 - The Board of Directors of Banca Generali approved the consolidated results at 31 March 2023.
Chief Executive Officer and General Manager Gian Maria Mossa stated: "We are very satisfied with the result, which further confirms our ability to grow in any context. We have achieved a historic high in terms of client portfolios, with over 70% of them generating recurring fees. The demand for higher value-addedinvestment services hit new record levels, with fee-basedfinancial wrappers and advisory services exceeding €17 billion overall. Net inflows also rose in the first quarter, with a significant contribution by the Bank's existing network, confirming our Financial Advisors' quality and the growing advisory needs of high-standingclients. In a period marked by ongoing volatility
1 Profit net of performance fees, non-recurring trading income and other one-off items.
2 Cumulative data at 30 April 2023. | 1 / 9 |
CONTACTS:
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Media Relations
Michele Seghizzi
Tel. +39 02 408 26683
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Tel: +39 02 408 26548
giuliana.pagliari@bancagenerali.it
and a complex interest rate scenario, we recorded the best quarter ever in terms of recurring net profit. Recurring fees proved rather resilient, also thanks to the value generated by AUC solutions, which reached a historic high in line with the monetary policy cycle. We look to the market economic and financial challenges for the coming months with caution, but we are confident we can continue to grow in line with the Plan's targets on the strength of our unique positioning and of a service level that is increasingly recognised and appreciated by our clients."
P&L RESULTS AT 31 MARCH 2023
Q1 2023 closed with consolidated net profit at €83.1 million, up 22% compared to €68.3 million for the same period of the previous year. This result was achieved in a context marked by gradually recovering stock markets compared to the lows of the previous year, albeit still impacted by strong volatility and macroeconomic and geopolitical uncertainties. Leveraging its diversified products and services and the quality of its professional network, Banca Generali best seized market opportunities, accelerating its path towards its business and profitability growth targets.
In the reporting period, net profit quality further improved, testifying to the Bank's constant steps forwards towards sustainable financial growth. Recurring net profit rose by 45% to €77.0 million, reaching a new all-timequarterly high. This result was achieved thanks to the numerous initiatives aimed at fostering revenue sustainability and diversification, as well as to the favourable interest rate normalisation and the Bank's customary cost discipline. Overall, the recurring component
accounted for 93% of net profit for the period, compared to 78% for the same period of the previous year.
In further detail:
Net banking income totalled €193.2 million compared to €160.8 million for Q1 2022. The significant increase was driven by the net financial income acceleration (€74.9 million; +175.8%), offset by net recurring fees amounting to €113.3 million (-5.6%) and the lower contribution of variable fees (€5.0 million; -63.3%) due to market volatility.
In particular, net interest income (€71.0 million; +214.9% YoY; +24.2 % QoQ) benefited from the increase in assets' yields, in line with the rise in market interest rates. Margins were mainly driven by a bond portfolio characterised by a short duration (1.2 years) and a high percentage of variable- rate securities (53% of the total). Interest-bearing assets amounted to €15.5 billion at period-end, slightly down on the end of the year (-1.8%).
Gross recurring fees amounted to €238.1 million (-2.7% compared to the same period of the previous year). In detail, gross management fees totalled €199.8 million compared to €209.9 million for the previous year as a result of lower average total assets managed in highly complex market conditions characterised by severe pressures. By contrast, banking and entry fees rose to €38.3 million (+10.2%), with a robust growth supported by the Bank's revenue diversification initiatives and the clients' interest in AUC solutions.
Despite the inflationary pressures, operating costs amounted to €63.7 million (+6.2% on an annual basis), including €1.1 million one-off charges, thus confirming the Bank's operational efficiency.
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'Core' operating costs amounted to €57.4 million (+6.0% YoY), of which €1.5 million generated by the launch of BG Suisse, in line with the Plan's projections.
The ratio of operating costs to total assets improved to 30 bps (31 bps at the end of 2022), whereas the cost/income ratio, adjusted for non-recurring items, such as variable fees, declined markedly to 33.2% (40.8% at 2022 year-end and 40.4% in Q1 2022), further confirming the Bank's operating efficiency.
Provisions, contributions to banking funds and net adjustments totalled €15.0 million compared to €13.0 million for the previous year (+16.4%). The change was chiefly attributable to the higher prudential provision for liabilities and contingencies (€10.2 million compared to €5.0 million for the previous year).
The tax rate for the period was 27.4%, up compared to 22.7% for the same period of the previous year, mainly due to the lower contribution of the foreign entities to the Group's result, due to the lower variable fee component.
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 408 26683
Michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 408 26548
giuliana.pagliari@bancagenerali.it
CAPITAL RATIOS AT 31 MARCH 2023
With reference to capital requirements, Banca Generali confirmed the soundness of its regulatory ratios: CET1 ratio was 16.0% and Total Capital Ratio was 17.1%. These capital ratios far exceeded the minimum requirements set by SREP - Supervisory Review and Evaluation Process (i.e., CET1 ratio at 8.0% and TCR at 12.3%). The Bank's leverage ratio stood at 4.5%, well above the minimum requirement.
The Bank's liquidity ratios remained high: LCR (Liquidity Coverage Ratio) was 326% (338% in 2022) and NSFR (Net Stable Funding Ratio) was 224% (203% in 2022). In addition, the Bank's level of liquidity proved solid, as confirmed by the amount of eligible assets for ECB refinancing operations, which reached €10.9 billion, accounting for 96% of the Bank's total securities portfolio.
COMMERCIAL RESULTS
At the end of March, Banca Generali's total assets grew to €85.9 billion, marking a new all-timehigh in the Bank's business expansion process (+2.3% YoY; +3.5% YTD). The result was fostered by solid net inflow volumes and the recovery of financial markets compared to year-start, following the sharp correction of the previous year's trend, with regard to both equity and bond markets.
Managed solutions (funds/Sicavs and financial and insurance wrappers) rose by 2.7% to €41.2 billion YTD as a result of the market recovery, driven in particular by the excellent results (in terms of net inflows and performance) of financial wrappers, whose range continued to be expanded with the addition of new solutions. Among them, assets invested in ESG products continued to grow, reaching €13.7 billion at the end of the quarter, compared to €12.9 billion at the end of 2022 and accounting for 33.2% of the total.
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Market and interest rate dynamics led to an increase in Assets under Custody (€18.9 billion; +44.0% YoY; +21.5% YTD), as in these conditions attention was drawn to liquidity reinvestment opportunities.
Within this context, the Bank enhanced its advisory services on bonds and bond portfolios through its Advanced Advisory solutions. The latter reached €7.8 billion assets at the end of March (+10.2% YoY; +6.2% YTD), increasing by over €450 million in the quarter and accounting for 9.1% of total assets. In April, Assets under Advisory further grew to €8.0 billion (+8.3% YTD).
In the first months of the year, traditional life insurance products were penalised by the performance of other investment instruments linked to the rise in bond rates and stood at €14.7 billion (-4.0% YTD; -8.6% YoY). However, the Bank's subsequent initiatives brought the attention back to the demand side, as confirmed by the April figures.
With reference to the management company, BGFML's assets grew by 3% to €19.1 billion YTD (- 4.9% YoY).
In the January-March period, net inflows proved very solid in terms of volumes, totalling €1.5 billion (+4.4% compared to the previous year). 86% of net inflows was gathered by the Bank's existing network3, further confirming the quality and close attention offered by Banca Generali's Financial Advisors.
In April, the net inflows trend continued to remain robust, further increasing to €476 million, bringing the YTD total to €2.0 billion (+4.4% compared to the previous year).
In terms of products, AUC solutions remained high in demand (€572 million in April; €3.3 billion YTD), in addition to an increasing interest for financial managed solutions (€95 million) and the stabilisation of demand for insurance products (-€71 million in April compared to -€220 million in March). Net inflows from Assets under Advisory continued to grow reaching €170 million, with a fourfold increase compared to the previous year (€505 million YTD).
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 408 26683
Michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 408 26548
giuliana.pagliari@bancagenerali.it
BUSINESS OUTLOOK
The financial and economic context shows numerous contrasting elements. On the one hand, global economic growth shows solid trends, with positive indicators regarding the job markets, energy cost reduction, consumption, and the positive effect of the reopening of the Chinese economy. Since year-start, all the main asset classes have recorded positive results, except for some significant cases. On the other hand, the persistence of geopolitical tensions, the need for combating the still- too-high inflation and the ongoing turbulences within the US banking sector call for prudent expectations.
Within this context, Banca Generali confirms its 2023 targets, with net inflows in the range of €5.7- €6.7 billion and recurring net profit growing by 15%-20% for the current year.
These objectives are in line with the financial targets defined in the 2022-2024three-year Plan, disclosed to the market at the Investor Day 2022:
3 Banca Generali's Financial Advisors, excluding new recruits for the year and the previous year.
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- Consistent Growth: cumulated net inflows estimated in the range between €18.0 billion and €22.0 billion for the 2022-2024three-year period;
- Profitable Growth: generating a compound annual growth rate (CAGR) of recurring profit equal to 10-15% over the 2022-2024three-year period;
- Remunerative Growth: distributing cumulated DPS of €7.5-€8.5 in the 2022-2025 period (cash view).
* * *
PRESENTATION TO THE FINANCIAL COMMUNITY
The quarterly results will be presented to the financial community during a conference call scheduled today, 11 May 2023 at 14:00 CET.
It will be possible to follow the event by dialling the following telephone numbers:
from Italy and other non-specified countries: | +39 02 3621 3011; |
from the United Kingdom | +44 121 281 8003; |
from the USA | +1 718 705 8794 (toll-free +1 855 265 6959) |
* * * | |
Annexes: |
- Banca Generali - Consolidated Profit and Loss Statement at 31 March 2023
- Banca Generali - Reclassified Consolidated Balance Sheet at 31 March 2023
- Total Assets at 31 March 2023
- Net Inflows at 30 April 2023
* * *
The Manager responsible for preparing the company's financial reports (Tommaso Di Russo) declares, pursuant to Paragraph 2 of Art. 154-bis of the Italian Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the documentary results, books and accounting records. Tommaso Di Russo (CFO of Banca Generali)
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 408 26683
Michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 408 26548
giuliana.pagliari@bancagenerali.it
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Banca Generali S.p.A. published this content on 11 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2023 19:36:06 UTC.
