Banca Generali 1Q12 Results and business update Milan, 8 May 2012 - PowerPoint PPT Presentation

Banca Generali 1Q12 Results and business update Milan, 8 May 2012

Today’s Agenda � 1Q 2012 Results � Net I nflows, AUM and recruiting � 2012 Business Update � Closing Remarks 2 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results The best quarter ever for Banca Generali, combining organic growth and market performance A record quarter for Banca Generali Net Profit (yoy) Record net profit: profit level doubled yoy driven by top lines growth, even including a 39.2 conservative stance on costs and provisioning + 95.6% Strong net inflows: net inflows YTD (april) at €686 million, already over the average of 20.0 FY2011 and FY2010 Total assets at €24.6 billion (+ 6% YTD), driven by an excellent fund performance: WAP of 4.5% at the end of March for the in-house managed portfolio 1Q12 1Q11 AUM profitability at record level of 2.11% (vs. 1.61% in 1Q11): contribution from recurring business lines increased to 1.62% (vs. 1.54% in 1Q11) 3 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results Consolidated 1Q 2012 Profit and Loss Account: main takeaways (€ m) 3M11 3M12 % Chg 3M11 3M12 % Chg (reported) (reported) (excl. GI L) (excl. GI L) Net I nterest I ncom e 1 1 ,1 2 3 ,1 1 0 9 ,1 % 1 1 ,1 2 3 ,1 1 0 9 ,1 % � I nterest income increase � I nterest income increase Commission income 90,6 110,6 22,1% 83,0 103,7 25,0% due to LTRO, higher due to LTRO, higher Commission expense -40,1 -40,2 0,2% -34,4 -34,9 1,3% investment yield, higher investment yield, higher deposits deposits Net Com m ission 5 0 ,5 7 0 ,4 3 9 ,5 % 4 8 ,6 6 8 ,8 4 1 ,8 % Net income (loss) from trading activities 2,5 7,6 206,2% 2,5 7,6 206,6% � Net commissions (+ 42% � Net commissions (+ 42% Dividends 0,0 0,0 319,6% 0,0 0,0 319,6% yoy) driven by higher AUM yoy) driven by higher AUM and an excellent fund Net income (loss) from trading activities and Dividends 2,5 7,7 206,7% 2,5 7,7 207,1% and an excellent fund performance performance Net Banking I ncom e 6 4 ,0 1 0 1 ,2 5 8 ,0 % 6 2 ,1 9 9 ,6 6 0 ,4 % Staff expenses -16,6 -18,0 8,3% -16,2 -17,5 8,5% � Trading income (> 2x) � Trading income (> 2x) Other general and administrative expense -18,3 -23,1 25,8% -18,2 -22,9 25,7% exploited trading opportunities exploited trading opportunities on the Italian bond market on the Italian bond market Depreciation and amortisation -0,9 -1,2 25,2% -0,9 -1,2 25,6% Total costs -35,9 -42,3 17,7% -35,3 -41,6 17,8% � Operating costs are � Operating costs are Cost / Income Ratio -52,2% -37,1% 15,1 p.p. -52,9% -37,0% 15,9 p.p. incorporating one-offs and the incorporating one-offs and the increase in stamp duty (fully increase in stamp duty (fully Other net operating income (expense) 1,5 3,6 130,7% 1,5 3,6 130,5% recovered from clients) recovered from clients) Operating Profit 2 9 ,7 6 2 ,5 1 1 0 ,7 % 2 8 ,3 6 1 ,6 1 1 7 ,4 % Net adjustments for impair.loans and other assets -0,1 -3,4 n.m. -0,1 -3,4 n.m. � Increase in provisions � Increase in provisions reflecting a conservative Net provisions for liabilities and contingencies -5,3 -11,7 119,4% -5,3 -11,7 119,4% reflecting a conservative stance on the incentives to be stance on the incentives to be Profit Before Taxation 2 4 ,3 4 7 ,4 9 5 ,1 % 2 3 ,0 4 6 ,5 1 0 2 ,5 % paid to the network paid to the network Direct income taxes -3,5 -7,6 114,8% -3,4 -7,5 120,2% � Net profit almost doubled, � Net profit almost doubled, Tax rate 14,5% 16,0% 1,5 p.p. 14,8% 16,1% 1,3 p.p. even after including an higher even after including an higher I ncome/ (losses) after tax on assets held for sales 0,5 0,2 -65,5% 0,5 0,2 -65,5% tax-rate (16.1% vs. 14.8% in tax-rate (16.1% vs. 14.8% in 1Q11) 1Q11) Minorities interest -1,2 -0,8 -32,4% 0,0 0,0 0,0% Net Profit 2 0 ,0 3 9 ,2 9 5 ,6 % 2 0 ,0 3 9 ,2 9 5 ,6 % The figures reported in this document are IFRS 5 compliant. Figures “ex-GIL” do not incorporate the contribution of Generali Investment Luxembourg (“GIL”) merged with BG Investment Lux on September 9, 2009. 4 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results Strong growth in total revenues (+ 60% yoy), with all business lines delivering a buoyant contribution Net Banking I ncome (LfL) (€ m) 99.6 I nterest income doubled in the period (+ 109% yoy) + 60% 23.1 driven by LTRO, higher investment yield and (23% ) higher deposits 62.1 11.1 (18% ) Net commissions rose (+ 42% yoy), as higher AUM and the excellent fund performance drove upwards fees 68.8 (69% ) 48.6 (78% ) Trading income rose (+ 207% yoy) as a result of the exploitation of trading opportunities on the Italian bond 7.7 (8% ) 2.5 (4% ) market 1Q11 1Q12 Net Commissions Net Interest Income Trading and dividends 5 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results I nterest income doubled in the period thanks to a higher investment return and higher volumes Quarterly Net I nterest I ncome (LfL) Net I nterest I ncome split (QoQ) (€ m) (€ m) + 109.1% 23.1 23.1 LTRO* / + 47% 8 Time deposits 15.7 15.7 11.1 Ordinary 4 15 component 12 4Q11 1Q11 4Q11 1Q12 1Q12 (* ) Total LTRO assets equal to €1.6 bn, o/w €1.3bn are a 3yrs facility and €0.3bn are a 12 months facility � I nterest income doubled in the period (+ 109% yoy) driven by LTRO, higher investment return of the banking portfolio (from 1.9% in 1Q11 to 3.0% in 1Q12), higher volumes � LTRO overall contributed with €8m to the result. LTRO investments are perfectly matched in terms of durations � Defensive bias of the Banking Portfolio maintained (avg maturity at 2.5 years and an avg duration of 1.5) 6 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results Gross commission posted a nice pick up (+ 25% yoy), bearing fruits of an excellent fund performance and buoyant net inflows Management Fees (LfL, QoQ) Breakdown of Gross Commissions (LfL, YoY) (€ m) + 5% (€ m) 103.7 61.2 58.2 29.4 + 25.0% (28% ) 4Q11 1Q12 6.0 83.0 (6% ) Management fees are up by 5% qoq, as net inflows 4.1 (5% ) and fund performance boosted the underlying AUM 5.9 (7% ) 61.2 (59% ) 64.1 Average Management Fee per Quarter (LfL) (77% ) (€ m) + 47% 8.9 (11% ) 7.1 (7% ) 1Q11 1Q12 61.2 62.3 56.8 41.6 Banking Revenues Management Fees 2010 2009 2011 1Q12 Performance Fees Front Fees Contribution from management fees has become significantly more solid and sustainable since 2009 7 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results Net commissions sharply up, as higher performance fees drove reported pay-out down Pay-out (LfL) Net Commissions (LfL) (€ m) 41.5% 68.8 33.6% + 41.8% 48.6 1Q11 1Q12 Pay-out trend excl. Perf. Fees (LfL) 47.0% 1Q11 1Q12 43.7% Net commissions are 42% higher yoy, even after accounting for a more conservative pay-out (excl. 1Q11 1Q12 performance fees) 8 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results The spike in costs linked to one-off items and set to be reabsorbed by year-end Staff costs (LfL) Operating costs (LfL) 17.5 0.8 + 18% 16.2 Staff costs increase reflects a conservative 41.6 stance on variable 35.3 + 3% costs 46% 42% + 8% 1Q11 1Q12 (16.2) (17.5) One-off items (€ m) 55% 52% G&A Expenses (LfL) G&A costs are up 1% (22.9) + 26% (18.2) when adjusting for the 22.9 impact of stamp duty 4.1 (fully recovered from 18.2 2.1 clients) and by one-off + 25% 2% (0.9) 3% (1.2) 1.7 charges linked to BG + 1% 1Q11 1Q12 Sgr integration and 16,7 16,5 fund disposal 1Q11 Staff G&A Expenses 1Q12 Depreciation and amortisation (€ m) One-off items Stamp duty (entirely recovered by clients) 9 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results AUM profitability climbs to 2.11% , the record level for the group so far I nterest Margin contribution to AUM profitability AUM Profitability (LfL) 0.39% 2.11% 0.19% 0.49% 1.61% 0.07% 1.47% 1Q11 1Q12 1.62% 1.54% + 8 bps Average underlying AUM (€ m) 0.27% 24,133 1Q11 1Q12 23,674 Recurring commissions & Performance Fees interest margin 1Q11 1Q12 10 Banca Generali 1Q 2012 Results and business update

1Q 2012 Results Banca Generali has further strengthened its already solid capital base Shareholders’ equity Excess Capital Tier 1 Capital Ratio Total Capital Ratio and dividends paid €61.4m 13.4% 333.6 €49.9m 13.3% €61.3m 100.8 11.7% 12.8% 281.2 262.4 11.1% 89.6 11.0% 89.1 2011 2010 2011 1Q12 2010 2011 1Q12 2011 2010 1Q12 2010 1Q12 … Total dividends paid (€ m) (€ m) 11 Banca Generali 1Q 2012 Results and business update

Today’s Agenda � 1Q 2012 Results � Net I nflows, AUM and recruiting � Business Update � Closing Remarks 12 Banca Generali 1Q 2012 Results and business update