BANCA GENERALI S.P.A.
PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
- Revenues rose to €419 million (+14%)
- Management fees at €359 million (+21%)
- Cost/income ratio decreased to 38.5%
TOTAL AUM AT €36.6 BILLION (+26%)- January net inflows: €406 million (+80%)
OUTSTANDING CAPITAL SOLIDITY- Excess capital at €158 million (+9%)
- Tier 1 ratio at 12.2% and total capital ratio at
14.2%
Milan, 11 February 2015 - The Board of Directors of Banca Generali, chaired by Paolo Vagnone, analyzed the preliminary results at 31 December 2014.
The CEO of Banca Generali, Piermario Motta, commented: "We are highly satisfied with the Bank's excellent results for the third consecutive year. In 2014, we not only improved all of the key financial indicators, but also created the conditions for future growth. To meet the rising demand for financial planning, we have also strengthened our team of professionals by completing extraordinary operations and recruiting experienced financial advisors. We have also expanded our range of innovative financial advisory solutions through strategic partnerships and completed the development of our new advisory platform. In the current environment of record-low rates and persistent market volatility, we expect our quality-oriented products and advisory services to prove highly effective in the investment advisory arena. We are thus looking towards our 2015 prospects with great enthusiasm and confidence."
1 The approval of Banca Generali's Draft Financial Statements is scheduled on 10 March
2015.
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
Consolidated P&L results at 31 December 2014 2
The preliminary consolidated results for 2014 showed all-time record performance in all of the main line items, as well as in net inflows and total AUM. This is even more significant in light of the significant internal and external investments made during the year to lay the foundations for significant future growth. In fact, the Bank boosted the development of digital tools for advisors and customers and launched an innovative wealth management advisory platform. Moreover, 170 high-profile, portfolio management professionals joined the Bank.
Consolidated net profit grew by 14% to €161.0 million3, driven by the outstanding growth in the size of assets. This result also takes into account significant one-off investments. At the end of December 2014, total AUM reached €36.6 billion, sharply increasing by €7.5 billion (+26%) compared to the previous year, with managed products accounting for 75% of the total.
The sharp increase in business operations also positively impacted the revenue performance. Net banking income grew by 14% to €419.2 million mainly driven by the growth in recurring fees, which reflected the AUM increase. Variable revenues linked to performance fees and trading also performed well, as a result of the favourable market opportunities seized.
In detail, gross fees rose by 20% to €484.6 million. In particular, management fees grew sharply to €359.3 million (+21%), reaching new highs for the third consecutive year, as a result of the improved product and service mix and AUM growth. Net fees rose 14% to €257.3 million, even taking into account the strong boost to net inflows and the recruitment of high-standing professionals.
Net interest income reached €107 million (from €121.8 million), reflecting lower interest rates and a gradual volume decrease in ECB LTROs. In Q4 2014, further €300 million LTRO assets were returned earlier than scheduled. Moreover, the contribution from lombard loans also grew (€19.9 million, +34%), mirroring the increase in volumes and spreads.
In 2014, the Bank's bond portfolio reported an average coupon profitability of 2.05% (2.6% in
2013), with maturity of 2.4 (2.8 at year-end 2013) and duration of 1.6 (in line with 2013), and included senior bonds exclusively.
Operating expenses amounted to €165.8 million, with a 12% increase due to non-recurring items (€9.2 million) for the acceleration of IT projects and the implementation of the external growth strategy. Moreover, in 2014 the sales structure was strengthened in light of the past two years' expansion (+€10.4 billion increase in assets).
Excluding non-recurring items, expenses increased by only 5%, thus much less than revenues (+14%). Overall, the cost/total assets ratio further decreased (0.45% ratio compared to
0.51% for the previous year), as did the cost/income ratio (38.5% compared to 39.1% for the previous year).
2 Following the partial de-merger by the Luxembourg-based company GFM SA of its funds/SICAV
management operations relating to the insurance operations of the Generali group - which was finalised on
1 July 2014, with retroactive effect for accounting purposes from 1 January 2014 - the business line's result
for the period under comparison has been restated pursuant to IFRS5
3 2013 net profit incorporated the IRES surtax of 8.5% for a total of €6.6 million
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
The operating result grew by 15.9% to €253.4 million, once again showing an excellent
operating margin (60%).
At 31 December 2014, Banca Generali Group's total balance sheet assets amounted to €6,142
million, with a 7% reduction reflecting the gradual decrease in ECB LTROs.
At year-end 2014, consolidated net equity increased to €536.4 million (+14.3% compared to
€469.1 million at year-end 2013).
The solidity of capital ratios was again excellent, with excess capital at €157.6 million, or 46% of total Basel 3-compliant own funds. Capital ratios assume a 70% payout on realized net profits,4 resulting in a dividend of €0.98 per share, up from €0.95 in 2013. 2014 capital ratios have been calculated based on the new Basel 3 regulatory framework and therefore are not fully comparable with the previous year's ratios. In detail, Tier 1 Capital ratio was 12.2% (14.2% in
2013) and Total Capital ratio was 14.2% (14.8% in 2013). The decrease in Total Capital ratio was chiefly attributable to the strong boost provided to both internal and external growth, particularly through lombard loans.
Consolidated P&L Results for Q4 2014
Gross fees sharply increased in Q4 to €131.1 million, up 19.7% compared to the previous year. This performance was also largely attributable to the 23% rise in management fees to €97.4 million. The increase was driven by AUM growth, which benefitted from Q4 2014 record net inflows of €940 million, the completion of the extraordinary operation, and the customers' interest in asset management solutions.
The Bank's net profit for Q4 2014 (€28.6 million) reflected the performance of non-recurring items associated with the sharp increase in net inflows and the acceleration of IT investments aimed at achieving even sounder and more sustainable future growth.
Net Inflows and Assets under Management (AUM)
At year-end 2014, AUM grew by 26% compared to 2013, reaching €36.6 billion. The increase amounted to €7.5 billion over the past 12 months and €13.2 billion in the past three-year period, with a CAGR of 16% in 2011-2014.
In detail, managed assets grew by 29% to €27.5 billion and accounted for 75% of total AUM, increasing by 2pps compared to 2013 and 5pps compared to 2012. Multi-line policies greatly contributed to the result gathering €3 billion, compared to €0.7 billion at year-end 2013 (+329%). Investors particularly appreciated BG Stile Libero, launched in March 2014, thanks to its combination of insurance segregated accounts, flexibility to invest in multi-manager funds and exclusive insurance coverage.
Similarly, traditional insurance products grew 19% to €10.7 billion for the period.
4 The figure also includes retained earnings for Q4 2014, as yet unaudited.
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PRESS RELEASE
Administered assets continued to increase (€9.1 billion in 2014) reflecting the constant acquisition of new customers requiring specific investment advisory services.
In 2014, net inflows recorded a new all-time high with €5.9 billion overall, of which €4.0 billion gathered through the network, including new recruits. €1.9 billion were instead generated by external growth. Taking into account only 2014 internal growth, net inflows grew by 78% compared to 2013 and 150% compared to the past two years. It should be recalled that Banca Generali's net inflows are generated exclusively through its financial advisors' services to Italian retail customers only.
FY 2015 started strong, with an 80% increase to €406 million compared to January 2014. Managed products continued to generate great interest, particularly the multi-line policy BG Stile Libero (€108 million), mutual funds and managed portfolio products (€67 million). However, in January current accounts increased significantly (€254 million in the month) compared to the previous months. In addition to gains on securities, this increase is instrumental to the year-start investment planning and portfolio diversification process.
Presentation to the Financial Community
The preliminary financial results at 31 December 2014 will be presented to the financial community during a conference call scheduled today at 2:00 PM CET.
It will be possible to follow the event by dialling the following numbers:
from Italy and other non-specified countries: +39 02 805 88 11;
from the United Kingdom +44 121 281 8003;
from the USA +1 718 705 8794 (toll-free: +1 855 265 6959)
* * *
The Manager responsible for preparing the company's financial reports (Stefano Grassi) 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.
Stefano Grassi (CFO of Banca Generali)
Annexes:
* * *
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
1) Banca Generali - Consolidated Profit and Loss Statement at 31 December 2014
2) Banca Generali - Consolidated Profit and Loss Statement for the 4th Quarter 2014
3) Banca Generali - Reclassified Consolidated Balance Sheet at 31 December 2014
4) Total AUM at 31 December 2014
Approval of Banca Generali's draft Financial Statements is scheduled on 10
March 2015.
The data presented herein are still being audited by the appointed Audit Company.
* * *
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel: +39 02 6076 5548
giuliana.pagliari@bancagenerali.it
(€ millions)
Assets Dec 31, 2014 Dec 31, 2013 Change % Change
Fi na nci a l a s s ets hel d for tra di ng 32.8 229.9 -197.1 -85.7% Fi na nci a l a s s ets a va i l a bl e for s a l e 2,237.1 1,626.1 611.0 37.6% Fi na nci a l a s s ets hel d to ma turi ty 1,403.1 2,652.7 -1,249.6 -47.1% Loa ns to ba nks 285.6 291.4 -5.8 -2.0% Loa ns to cus tomers 1,795.0 1,499.8 295.2 19.7% Property equi pment a nd i nta ngi bl e a s s ets 93.8 50.1 43.7 87.3% Ta x recei va bl es 40.9 38.3 2.6 6.9% Other a s s ets 253.7 140.2 113.5 80.9% As s ets hel d for s a l es 0.0 74.2 -74.2 -100.0% Total Assets 6,142.0 6,602.7 -460.6 -7.0%
Liabilities and Shareholders' Equity Dec 31, 2014 Dec 31, 2013 Change % Change
Due to ba nks 1,038.9 2,230.9 -1,192.0 -53.4% Di rect i nfl ows 4,285.4 3,588.7 696.7 19.4% Fi na nci a l l i a bi l i ti es hel d for tra di ng 2.7 0.6 2.1 344.7% Ta x pa ya bl es 27.7 27.8 0.0 -0.1%
Li a bi l i ti es l i nked to a s s ets hel d for s a l es 0.0 66.3 -66.3 -100.0% Other l i a bi l i ti es 149.8 142.6 7.2 5.0%
Speci a l purpos e provi s i ons 101.2 76.7 24.5 31.9% Va l ua ti on res erves 18.0 5.5 12.5 229.4% Res erves 196.2 164.2 32.0 19.5% Addi ti ona l pa i d-i n ca pi ta l 45.6 37.3 8.3 22.2% Sha re ca pi ta l 115.7 114.9 0.8 0.7% Sha rehol ders ' equi ty a ttri buta bl e to mi nori ty i nter 0.0 6.0 -6.0 -100.0% Net i ncome (l os s ) for the peri od (+/-) 161.0 141.3 19.7 14.0% Total Liabilities and Shareholders' Equity 6,142.0 6,602.7 -460.6 -7.0%
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PRESS RELEASE
CONTACTS:
www.bancagenerali.com
Media Relations
Michele Seghizzi
Tel. +39 02 6076 5683 michele.seghizzi@bancagenerali.it
Investor Relations
Giuliana Pagliari
Tel. +39 02 6076 5548 giuliana.pagliari@bancagenerali.it
4) TOTAL AUM AT 31 DECEMBER 2014Billion of Euros Dec 2014 Sep 2014 Abs. Chg
Mutual Funds 9,96 9,50 0,46
Portfolio Management 3,82 3,56 0,26
Managed Assets 13,78 13,06 0,72
Life Insurance 13,69 11,99 1,70
of which m ultiline & unit-link ed policies 3,00 1,96 1,04
Non Managed Assets 9,09 8,54 0,55
of which: Securities 6,37 5,96 0,41
Total 36,56 33,59 2,97
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