INVESTOR PRESENTATION 8 APRIL 2019
AGENDA 1 BANCA GENERALI AT A GLANCE BG KEY FINANCIALS 2 3 BG STRATEGIC AMBITION CLOSING REMARKS 4 2
BANCA GENERALI: A SUCCESS STORY ONE OF THE FASTEST GROWING COMPANIES IN THE ASSET GATHERING BUSINESS PHASE 1 PHASE 2 New management team Multi-year strategic network repositioning New service model: implementation of WM approach and listing on the Italian and new digital mindset Stock Exchange 57.5 55.7 47.5 41.6 36.6 29.1 26.2 23.6 23.3 22.2 21.4 20.7 19.0 15.8 bn/ € 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 BG growth = 2.3x Assoreti growth 1 BG growth ~ Assoreti growth Market 7.7% 9.2% 9.0% 10.3% 10.1% 10.0% 10.1% 10.2% 10.4% 11.6% 12.1% 12.6% 13.3% 13.7% share 2 NOTE: 1) ex ISPB and BG; 2) Market share ex-ISPB; 3 SOURCE: Assoreti
BEST FAS QUALITY IN THE INDUSTRY CONSTANT GROWTH IN FAS PORTFOLIO Average FAs portfolio (Asset per Financial Advisor) m/ € 29.0 Best Player ex BG Assoreti (ex BG, ISPB) Banca Generali 28.8 25.8 24.3 22.2 24.3 23.2 19.7 22.0 20.7 18.0 18.7 18.3 16.6 15.8 18.5 16.1 15.9 15.9 15.6 16.8 14.5 16.0 16.4 15.7 14.9 15.1 14.2 13.9 12.6 11.9 11.6 11.5 10.0 9.7 9.9 8.9 7.9 7.4 7.8 6.7 7.1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 SOURCE: Assoreti 4
BG: THE FASTEST GROWING COMPANY AMONG TOP PLAYERS GROWING MARKET SHARE Assoreti – Financial networks in Italy bn/ € 5Y growth 1 106.4 +27% Assoreti sector is a highly concentrated industry : top 67.5 +43% 6 players in market share with over 90% 59.9 +65% Market share of Assoreti In 57.5 +98% Italian financial wealth is 12.5% . Sector grew by 49% +52% 45.3 in the last 5 years (+43% ex BG) +67% 38.4 Banca Generali is the [….] fastest growing player in the industry: + 98% vs Sector ex 414.7 2013 ISPB 12.5% Market share of Sector 513.8 +49% Assoreti In Italian financial wealth 2 NOTE: 1) ex ISPB; 2) Data as of 9M18 5 SOURCE: Internal elaboration on Assoreti data; Bank of Italy
EXTENSIVE PRODUCT OFFER GREATER DIVERSIFICATION OF ASSET MIX Asset mix 2018 Total Assets Fully open architecture (Over 5,400 57.5 bn/ € different retail funds and 50 asset managers Traditional Life Insurance offering Clients a wide array of choice) 1 In-House Funds 25% 12% Retail funds distribution accounts for 23% of which 90% managed by external AMs 27% 3rd Party Funds 13% New wrapper solutions – starting from 2013 – with an increasing level of Financial Wrappers personalization , linked to Clients assets: (Portfolio Management) NEW Insurance Wrappers : bespoke hybrid 11% Insurance Wrappers 13% insurance policy combining traditional life, unit-linked component and insurance riders Securities 24% 13% 11% 24% Financial Wrappers : portfolio Current Accounts management lines maximizing advisors’ freedom to customize asset allocation Managed Assets: 75% 6 NOTE: 1) In-house funds include: LUX IM (previously BG Sicav) and BG Selection
FULLY INTEGRATED WEALTH MANAGEMENT APPROACH EXPANSION OF ADVISORY PERIMETER TO FINANCIAL AND NON FINANCIAL WEALTH Advanced Advisory Model (financial + non financial) Focus on Real estate Advisory : • Strategic analysis of real estate wealth Financial • Valuations Real • … assets estate Agency • Disposals and purchases • … Focus on Corporate Merger & Acquisition Corporate Inheritance Dynamic hedging Easy finance (finanza agevolata) … Art Focus on Family protection, wealth planning Succession planning Legal and fiscal support PARTNER Wealth protection LAW FIRMS Trust services … 7
BEST IN CLASS PROPRIETARY DIGITAL TOOLS FOR THE FA NETWORK OPEN BANKING APPROACH BG Store Wealth Advisory Portal Digital Collaboration Simplicity and completeness of the Deep-dive analysis Paperless Approach tool for FAs’ needs The advisor digital desk with a multi-device approach A wide range of services to support the FAs : training, sales monitoring, marketing support, press release & market analysis, risk analysis and other tools A proprietary platform with different level of analysis on Clients’ total wealth and fully integrated with the best international know - how The most appreciated support service from the new colleagues 8
GROWING RECOGNITION IN THE PRIVATE BANKING SPACE KEY AWARDS CONFIRMING QUALITY AND PERSISTENCY First for FAs ’ Satisfaction 1 Second private bank in Italy by brand equity, according to PB Monitor 2 " Best Financial Advisory network in Italy five years in a row" 2013 2014 2015 2016 2017 2018 1 st in the ranking for FAs’ sense of belonging with 3.71 (maximum 4.0) And others... NOTE: 1) CF Explorer 2018 – FINER; GFK Eurisko – PF Monitor 2014, 2015, 2016, 2017; 2) PB Monitor 9
AGENDA 1 BANCA GENERALI AT A GLANCE BG KEY FINANCIALS 2 3 BG STRATEGIC AMBITION CLOSING REMARKS 4 10
NET FINANCIAL INCOME NET FINANCIAL INCOME HALVED SINCE LAST PEAK Net financial income m/ € Net Interest Income LTRO Trading gains Material headwinds to 161.9 earnings growth from net 140.8 financial margin over the 123.9 54.9 19.0 past few years 12.4 95.1 93.4 37.4 84.1 Net interest income driven 79.5 40.1 34.5 by Clients ’ deposits 28.9 34.7 24.1 18.1 expansion 3.1 84.4 72.5 71.4 2018 expected to be a 63.1 61.4 58.7 60.0 trough for net interest income 2012 2013 2014 2015 2016 2017 2018 Net financial income on interest-bearing assets 1 % o/w NII 1.99% 1.92% 1.65% 1.23% 0.88% 0.76% 0.69% 11 NOTE: 1) Interest-bearing assets including banking book, loans to Clients and loans to banks
RECURRING MANAGEMENT FEES AND BANKING AND ENTRY FEES HEALTHY GROWTH AND RESILIENT MARGINS Management Fees m/ € 634 Management fees up by 2.5x in 587 2012-18, broadly in line with 492 growth in managed assets 459 359 Slight margin erosion in 2018 296 linked to tough market conditions 251 Going forward, mild margin pressure expected due to MiFID II introduction 2012 2013 2014 2015 2016 2017 2018 Banking and Entry Fees m/ € Entry fees Banking fees Traditional banking and entry fees already discounting significant 68 69 66 63 reduction vs. past years, especially 58 54 considering strong growth in deposits and assets under 32 45 34 34 48 custody 27 38 29 New revenue streams from Assets under Custody and 36 32 29 27 Assets under Advisory expected 21 20 16 to grow Banca Generali recurrent revenue base 2012 2013 2014 2015 2016 2017 2018 12
RECURRING FEE EXPENSES DISCIPLINE ON REMUNERATION OF FAS Recurring passive fees to FAs m/ € as % of gross recurring fees 1 Passive fees to FAs - ordinary pay-out 37.1% 36.2% 35.8% 35.8% 35.7% 35.0% 35.0% The bulk of Banca Generali FAs costs is variable in nature and linked to AUM profitability 251 226 Ordinary FA remuneration has 194 remained stable as % of gross 188 recurring fees 159 126 109 2012 2013 2014 2015 2016 2017 2018 13 NOTE: 1) Recurring gross fees are net of performance fees
OPERATING COSTS DISCIPLINED GROWTH IN OPERATING COSTS Operating costs m/ € 1 Core Operating Costs Sales Personnel Expenses Cost/Income ratio 46.5% 42.5% 41.7% 41.0% 40.3% 39.9% 38.1% Growth in core-operating 197 188 costs under control despite 182 14 176 the significant commercial 17 166 14 15 expansion 149 11 142 11 Significant operating 11 leverage brought Cost- assets ratio to best-in-class levels in the industry 183 171 168 161 155 138 131 2012 2013 2014 2015 2016 2017 2018 14 NOTE: 1) Core operating costs computed as total operating costs ex-sales personnel expenses
QUALITY OF EARNINGS RECURRING NET INCOME AND ROE ON THE RISE Net income m/ € 1 Non-recurring Recurring 204 204 Growth in recurring net 180 161 156 income well into double 141 130 52 digit territory 118 137 84 112 79 81 128 86 71 62 66 49 49 2012 2013 2014 2015 2016 2017 2018 Dividend € Significant remuneration 1.25 1.25 1.20 for shareholders 1.07 0.98 0.95 2013 2014 2015 2016 2017 2018 15 NOTE: 1) Non recurring net income earned from performance fees, trading gains and (in 2012-2014) LTRO
AGENDA 1 BANCA GENERALI AT A GLANCE BG KEY FINANCIALS 2 3 BG STRATEGIC AMBITION CLOSING REMARKS 4 16
BG AMBITIONS FROM 2019-21 BUSINESS PLAN 1 To consolidate our leading position in Empowering FAs empowering the best Financial Advisors (FAs) in the Italian market To be the Clients’ first choice for quality of 2 professionals , protection and value of Clients’ first choice service as well as state-of-the-art digital presence 3 To create a new long term growth engine International aspiration by selectively expanding our geographical footprint 17
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