Milan, July 31st, 2017

FinecoBank, results at June 30th, 2017 approved Best semester ever Net profit:€104.3 million, +3.2% y/y1(+6.8% y/y excluding the sale of government securities2in Q1 2016) Operating income:€282.7 million, +3.3% y/y1(+5.2% y/y excluding the sale of government securities2in Q1 2016)

Operating costs: €121.2 million, +2.9% y/y

CET1 ratio: 22.14% (transitional)

Total net sales: €2.9 billion (+9% y/y) of which Guided Products & Services €2.0 billion (+17% y/y)

FINECOBANK

1H17 HIGHLIGHTS

  • Revenues €282.7 million, +3.3% y/y1(+5.2% y/y excluding the sale of government securities2in Q1 2016) driven by the Investing area (+13.7% y/y), with management fees up 15.3% y/y sustained by the the continuous improvement in the asset mix and by the network's productivity,and by the Banking area (+6.9% y/y), thanks to the increase in transactional liquidity and lending.Solid performance for the Brokerage area despite volatility at the bottom since 2013

  • Operating costs well under control at €121.2 million, +2.9% y/y. Cost/Income ratio stable at 43%

  • Net profit €104.3 million, +3.2% y/y1(+6.8% y/y excluding the sale of government securities2), the best half year ever

  • Total financial assets: €63.6 billion (+15% y/y)

  • Total net sales: €2.9 billion (+9% y/y) of which guided products & services

€2.0 billion (+17% y/y)

UPDATE ON

  • The boost in lending offer continues, with a strong focus on credit quality.

1 Change adjusted for non-recurring items recorded in the first half of 2016: sale of the stake in Visa Europe Limited for a profit net of tax of €10.3 million and tax release of €6.5 million following a positive settlement a tax disputes.

2 €3.4 million net (€5 million gross) from the sale of government securities recorded in the "Available-for-sale financial

assets" portfolio. This sale (€704 million nominal value, at floating rate, with average remaining maturity of less than 3 years) was made to mitigate the exposure to interest rate risk and lengthen the duration of the investment. A corresponding amount of government securities was purchased in the same quarter (€706 million nominal value with maturity between three and six years).

INITIATIVES

Mortgages up +248% q/q, personal loans +69.6% y/y, +9.8% q/q. The new Credit Lombard started with granted loans at € 129 million (as at July, 27th, 2017), up 131% in just one month

  • Strong focus on the cyborg-advisory approach reflected in the increasing personal financial advisors' productivity and in the continuous improvement of the asset mix: 61% of 1H17 net sales represented by assets under management

  • Strong positioning in the Private segment continues, with TFA growing to

  • The project aimed at the constitution of an Irish Asset Management Company fully owned by FinecoBank was launched. The goal of the project is to further increase the Bank's competitiveness through a vertically integrated business model and to diversify and improve the offer

€24.0 billion (+22% y/y)

The Board of Directors of FinecoBank S.p.A. has approved the results at June 30th, 2017.

Alessandro Foti, CEO and General Manager of FinecoBank, stated:

"We are particularly satisfied about the 2017 first half results, the best ever. These figures testify once again the efficiency of a diversified and sustainable business model, able to both obtain solid results in every market conditions and to answer to our customers' financial needs. These results confirm the first positive signals coming from the implementation of the new initiatives put in place in order to accelerate the organic growth of Fineco, among which the strengthening of the lending business and the strong effort toward a better quality in the inflows' asset mix. At this regard, it is worth mentioning the project for the constitution of an Asset Management Company, aiming at further strengthen the competitiveness of the Bank".

TOTAL FINANCIAL ASSETS AND NET SALES

Total Financial Assets at June 30th, 2017 amounted to €63.6 billion, up 15% on June 2016 with a continuous improvement in the quality of total net sales. The penetration of "Guided Products & Services" on total AuM is constantly increasing, reaching 60% compared to 51% in June 2016 and 56% in December 2016. The stock of Assets under Management was €30.6 billion at June 30th, 2017, up 18.2% compared to the end of June 2016. Assets under Custody totalled €13.9 billion (+9.3% y/y) and direct deposits came to €19.1 billion (+12.8% thanks to the continuous growth in new customers and "transactional" deposits).

Total Financial Assets related to Private Banking segment, i.e. with assets above € 500,000, totaled €24.0 billion, up 22% y/y.

Total net sales amounted to €2.9 billion, of which €1.8 billion Assets under Management (+€1.5 billion y/y) and €0.5 billion of Assets under Custody, while direct deposits came to €0.7 billion. "Guided Products & Services" net sales amounted to €2.0 billion (+17% y/y).

At June 30th, 2017, the network is composed by 2,642 Personal Financial Advisors (2,628 at the end of 2016) with 370 Fineco Centers. Total net sales through the PFA network in the first six months of the year totalled €2.6 billion, up 16.4% on the same period of 2016.

In terms of customers' acquisition, since the beginning of the year 61,756 new clients have been acquired (+4% y/y), of which 9,378 in June. Total number of customers was close to 1,162,000 as of June 30th 2017, up 7% compared to June 2016.

1Q17

2Q17

1H17

62.9

64.7

13.7

0.5

141.8

-19.2

-39.2

-2.3

-60.7

81.1

-2.4

-0.5

0.0

0.0

78.2

-26.5

64.3

65.0

12.3

-0.8

140.8

-19.7

-38.2

-2.5

-60.4

80.4

-0.8

-1.0

0.0

-0.4

78.3

-25.7

127.2

129.7

26.0

-0.2

282.7

-38.9

-77.4

-4.8

-121.2

161.5

-3.1

-1.5

0.0

-0.4

156.5

-52.2

51.7

52.6

104.3

INCOME STATEMENT RESULTS AT JUNE 30TH, 2017

mln

1Q16 2

Q16 Adj

1H16 Adj

1H17/

1H16

2Q17/

2Q16

2Q17/

1Q17

Net interest income

62.2

61.2

123.4

3.0%

5.0%

2.2%

Net commissions

58.2

59.7

117.8

10.1%

9.0%

0.5%

Trading profit

19.6

11.9

31.6

-17.7%

2.9%

-10.4%

Other expenses/income

0.1

0.7

0.8

n.m.

n.m.

n.m.

Total revenues

140.1

133.5

273.6

3.3%

5.5%

-0.7%

Staff expenses

-18.7

-19.0

-37.7

3.2%

3.7%

2.6%

Other admin.expenses

-39.3

-36.1

-75.4

2.7%

6.0%

-2.4%

D&A

-2.2

-2.4

-4.6

4.8%

2.7%

7.4%

Operating expenses

-60.2

-57.5

-117.7

2.9%

5.1%

-0.4%

Gross operating profit

79.9

76.0

155.9

3.6%

5.8%

-0.9%

Provisions

-1.4

-1.1

-2.6

23.4%

-30.6%

-67.5%

LLP

-1.4

-1.4

-2.8

-45.0%

-26.5%

85.5%

Integration costs

0.0

0.0

0.0

Profit from investments

0.0

0.0

0.0

n.m.

n.m.

n.m.

Profit before taxes

77.1

73.5

150.5

3.9%

6.5%

0.1%

Income taxes

-25.8

-23.7

-49.5

5.3%

8.3%

-3.1%

Net profit adjusted 1

51.2

49.8

101.0

3.2%

5.6%

1.7%

Revenues in the first six months of 2017 amounted to €282.7 million, up 3.3% y/y compared to the first half of 2016, net of the gain on the sale Visa Europe Limited stake.Excluding the profit from the sale of government securities equal to €5 million in Q1 2016, revenues were up 5.2% y/y.

Net interest came to €127.2 million, up 3.0% y/y compared to €123.4 million for the first half of 2016. Lower interest income linked to the decline in market interest rates was more offset by the increase of transactional liquidity, the reduction of the cost of term deposits and higher lending volumes. The average gross margin related to financial investment amounted to 1.22% in the half 2017 compared to 1.38% in the same period of 2016. Net fees and commissions in first half 2017 totaled €129.7 million, up €11.9 million compared to the first six months of 2016 (+10.1% y/y). The increase was mainly driven by the growth in net fees coming from asset management products (+€6.9 million y/y) and investment advisory services (+€6.6 million y/y) thanks to the continuous growth of assets under management and of "Guided Products & Services" as a percentage of total AuM. Trading profit amounted to €26 million (-17.7% y/y net of non-recurring items related to the above- mentioned Visa sale). With regard to this reduction, we must note that in the first quarter of 2016, €5 million of revenues coming from the sale of government securities were recorded under the "Available-for- sale financial assets" portfolio. This transaction was carried out in order to mitigate exposure to interest

1 Net profit adjusted for non-recurring items recorded in the second quarter of 2016: sale of the stake in Visa Europe Limited for a profit net of tax of €10.3 million and tax release of €6.5 million following a positive settlement of tax disputes.

rate risk and to lengthen the duration of the investment. Excluding those revenues, there were no significant changes in trading profit line compared to the first half of 2016.

Operating costs well under control at €121.2 million (+2.9% y/y) despite the continuous expansion of the business, assets and customers thanks to the strong operational efficiency of the Bank. Staff expenses amounted to €38.9 million (+3.2% y/y), mainly for the increase in the number of employees up to 1,114 at June 30th, 2017 from 1,071 at June 30th, 2016. Other administrative expenses amounted to €77.4 million (+€2 million y/y).

Gross Operating profit totalled €161.5 million, up 3.6% y/y, net of the profit realized from the sale of the stake in Visa Europe Limited.Excluding the gain from the sale of government securities of €5 million in Q1 2016, operating profit was up 7.1% y/y.

Loan loss provisions were at €1.5 million, down €1.3 million on the same period of the previous year. The cost of risk was 24 bps (62 bps for the first half of 2016 and 43 bps for the FY 2016). The decrease was due to several factors: the increase in outstandings also with secured and low-risk products, as well as write- backs recorded in the first quarter of 2017 to reflect the costant improvement in the quality of the portfolio. Provisions for risks and charges for the first half of 2017 amounted to €3.1 million, up 23.4% on the €2.6 million recorded at June 30th, 2016.

Profit before taxes amounted at €156.5 million, up 3.9% y/y, net of the profit realized on the sale of the stake in Visa Europe Limited.Excluding the revenue from the sale of government securities of €5 million in Q1 2016, net profit before tax from continuing operations was up 7.5% y/y.

Net profit totalled €104.3 million, up 3.2% net of non-recurring items1compared to the first half of 2016. Net of the profits from the sale of government securities of €5 million in Q1 2016, the profit for the period was up 6.8% y/y.

Fineco maintained its solid capital position with a CET1 ratio (transitional) at 22.14% on June 30th, 2017.

MAIN INCOME STATEMENT RESULTS FOR THE SECOND QUARTER 2017

Net interest income for the second quarter came to €64.3 million, up 2.2% on the previous quarter and 5.0% on the second quarter of 2016, mainly driven by increasing deposits and and lending volumes.

Net fees and commissions amounted to €65.0 million, up 0.5% q/q mainly due to the increase in recurring fee and commission income from assets under management, partly offset by lower brokerage commissions due to lower volatility in the period. Compared to the second quarter of 2016 this item increased by 9.0% y/y mainly driven by management fees.

Trading profit at €12.3 million, up 2.9% on the previous year, net of the profit realized on the sale of the equity investment in Visa Europe Limited, and down by €1.4 million on the first quarter of 2017.

Revenues amounted to €140.8 million, up 5.5% y/y, net of the non-recurring item relating to Visa, driven by the Investing and the Banking area. The q/q decrease (-0.7%) was mainly due to Other expenses/income.

Finecobank S.p.A. published this content on 31 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 31 July 2017 11:04:15 UTC.

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