FinecoBank S p A : Presentazione risultati 3Q23

3Q23 Results

Alessandro Foti

CEO and General Manager

Milan, November 7th 2023

FINECO. SIMPLIFYING BANKING.

Disclaimer

• "Pursuant to the paragraph 2 of Article 154 bis of the Consolidated Law on Financial Intermediation (Legislative Decree no. 58 of February 24, 1998), Lorena Pelliciari, in her capacity as manager responsible for the preparation of FinecoBank S.p.A. (the "Company")'s financial reports, declares that accounting information contained in this Presentation reflects the Company's documented results, books and accounting records".
• This Presentation may contain written and oral "forward-looking statements", which include all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, objectives, estimates, forecasts, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of the Company. There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Information, opinions, valuations and forecasts contained in this Presentation have not been audited by any independent body. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
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• This Presentation has been prepared on a voluntary basis and, therefore, FinecoBank the Company is not bound to prepare similar presentations in the future, unless where provided by law. No guarantee, express or implicit, is given by the Company with reference to the reliability, accuracy or completeness of information or opinions contained in this Presentation. Neither the Company nor any of its representatives, directors or employees shall be liable at any time in connection with this Presentation or any of its contents for any indirect or incidental damages including, but not limited to, loss of profits or loss of opportunity, or any other liability whatsoever which may arise in connection of any use and/or reliance placed on it.
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2

Agenda

✓Fineco Financial Results

• Fineco Commercial Results
• Next steps
• Key messages

3

Executive Summary

Successful growth story: our diversified business model allows us to deliver strong results in every market condition

Strong net profit and operating leverage

• 9M23 adj. Net Profit at 454.2mln, +50.1% y/y(1) (+68.4% y/y excluding 9M22 Profits from Treasury management)
• 9M23 adj. Revenues at 916.7mln, +34.0% y/y(1) mainly supported by Net Financial Income (+95.1% y/y, o/w NII +140.6%) and Investing (+5.6% y/y). Brokerage confirmed a structurally higher floor vs pre-pandemic levels
• Operating Costs well under control at -215.8mln, +5.9% y/y (+4.8% y/y excluding costs related to the acceleration of the growth of the business(2)). Strong operating leverage confirmed a key strength of the Bank. Adj. C/I ratio at 23.5%

Outstanding commercial dynamics driven by organic growth

		◼	Strong acceleration in new clients' acquisition (+22% y/y in 9M23), with no change in
				our marketing strategy nor short term aggressive commercial offer. New clients in
				October (close to 12,000) at the highest monthly level since March 2021
		◼	Net sales in 9M23 at 6.8 bn, o/w AUM at 2.3 bn. TFA at 116.3 bn with AuM at 55.4 bn.
				October: Strong net sales at 0.5 bn, o/w Deposits at ~-0.9 bn influenced by one-off
				(BTP Valore equal to €620 mln) and liquidity temporarily used by short-term traders
				buying equity and bonds on the dips, resulting in a very strong Brokerage: 2nd best
				month this year, with revenuesE. at ~17 mln (>50% vs avg revenues in 2017/19, >25%
				vs Oct.22). AUM at ~10 mln due to insurance outflows (~-220 mln), AUC at ~1.4 bn
		◼ Leading PFA productivity vs peers thanks to organic growth
4	(1)	2022 non recurring items: 3Q22 -0.2 mln gross (-0.1 mln net) and 1Q22 -0.3 mln gross (-0.2 mln net) due to Voluntary Scheme
(2)	Excluding costs strictly related to the growth of the business, mainly FAM (-0.8 mln y/y) and marketing (-1.1 mln y/y)
		(3)	Avg 12 months
		(4)	Assumptions based on forward rate curve as of November 2nd, 2023

Solid capital and liquidity position

• CET1 ratio at 24.7%,TCR at 35.9%, Leverage ratio at 4.96%
• LCR at 808.0%(3), NSFR at 389.0%

Guidance 2023-2024: strong growth confirmed

• Expected Net Financial Income growth by at least +70% y/y in FY23. For FY24: NFI in potential slight decline(4) with a progressive stabilization of deposits
• Expected Investing revenues in FY23 confirmed to increase high single digit vs FY22 with higher after-tax margins. For FY24: expected revenues increase high single digit y/y
• Brokerage guidance confirmed: revenues expected strong with a floor higher vs pre-Covid period
• Operating costs expected in FY23 at +6% vs FY22, not including additional costs for: FAM strategic discontinuity (~2 mln) and additional marketing expenses (at least ~3 mln). In FY24 growth of around 6% y/y, not including additional costs for: FAM and marketing expenses
• Cost of Risk: in a range 5/9 bps in 2023
• In FY23 growing CET1 ratio and Leverage ratio y/y

Delivering strong Net Profit in every market condition

Adj. Net Profit at 454.2, +50.1% y/y boosted by strong acceleration of Investing, confirming the effectiveness of our initiatives, and Net Financial Income. Strong operating leverage confirmed

mln			9M22	9M23	9M23/
		Adj.	(1)	Adj.	(1)	9M22
Net financial income	260.6	508.5	95.1%
o/w Net interest income	211.2	508.2	140.6%
o/w Profit from treasury	49.4	0.2	-99.6%
Net commissions	346.6	362.2	4.5%
Trading profit		76.5	46.3	-39.5%
Other expenses/income	0.6	-0.3	-147.1%
Total revenues	684.1	916.7	34.0%
Staff expenses	-86.5	-91.5	5.8%
Other admin.expenses	-97.5	-104.1	6.8%
D&A			-19.8	-20.1	1.5%
Operating expenses	-203.9	-215.8	5.9%
Gross operating profit	480.3	700.9	45.9%
Provisions		-54.1	-52.0	-3.9%
LLP			-1.5	-2.0	31.9%
Profit from investments	-1.1	0.1	-110.4%
Profit before taxes	423.6	647.0	52.8%
Income taxes		-120.9	-192.8	59.5%
Net profit		302.7	454.2	50.1%
ROE	(2)		23%	31%
Cost/Income	(2)	30%	24%

Revenues

• Strong growth in Net Financial Income (+95.1% y/y, with NII at +140.6% y/y) mainly thanks to our capital light NII (72% ex. lending) driven by our clients' valuable transactional liquidity and not by lending (not affected by additional costs and provisions due to NPL)
• Net commissions growing by +4.5% y/y driven by Investing (+5.7% y/y) and Banking (+3.2% y/y)
• Trading profit excluding the effects from ineffectiveness of the hedging derivatives(3): -17.3% y/y mainly due to lower brokerage activity

Costs

The yearly increase is mainly linked to costs related to the growth of the business, related to:

• FAM as it is increasing the efficiency of the value chain
• Marketing expenses

Net of these items, 9M23(4): +4.8% y/y

Net profit

+68.4% y/y excluding 9M22 Profits from Treasury management

	(1)	2022 non recurring items: 9M22 -0.5 mln gross (-0.3 mln net) due to Voluntary Scheme
	(2)	Adj. Cost/Income and Adj. RoE calculated net of non recurring items. ROE is calculated as annualised adj.net profit divided by average book equity for the period (excl. valuation reserves)
	(3)	The ineffectiveness of the hedging derivatives was equal to +14.6 mln in 9M22 and -4.8 mln in 9M23. The value depends on the application of accounting standards IFRS9, and is influenced both by the spread between the ESTR and the Euribor and by the
5	amount of the fair value of the derivatives
(4)	Excluding costs strictly related to the growth of the business, mainly FAM (-0.8mln y/y) and marketing (-1.1mln y/y)

Our priority: accelerating on Investing

Improving margins thanks to the higher control on the Investing value chain through FAM

Investing revenues increasing thanks to volume effect and FAM

Investing Revenues, mln

				+5.6%	mln	3Q22	2Q23	3Q23	9M22	9M23
	+7.3%		227.7	240.6
	+3.6%				Investing	78.6	81.4	84.4	227.7	240.6
78.6	81.4	84.4			o/w
		Placement fees	1.2	0.8	0.8	4.2	2.5
					Management fees	94.6	98.1	100.8	279.6	293.7
3Q22	2Q23	3Q23	9M22	9M23	to PFA's: incentives	-9.3	-8.6	-9.3	-25.9	-26.0
to PFA's: LTI	-0.1	-0.7	-0.5	-1.9	-2.1
71.6	71.9	71.6	70.9	71.6	Other PFA costs	-7.7	-8.0	-7.1	-28.0	-27.0
					Other commissions	0.0	0.0	0.0	0.0	0.0
53.3	53.8	53.7	52.7	53.6	Other income	-0.1	-0.1	-0.3	-0.3	-0.5
52.4	54.7	55.8

29.1%	33.4%	33.5%
ManFee margins pre-tax (bps)	ManFee margins after-tax (bps)
Avg AuM (on daily basis, bn)	FAM retail as % of Fineco total AUM

• LOW PLACEMENT FEES (only ~1% of Investing fees)
• NO PERFORMANCE FEES

6

Focus on FAM: delivering on the strategic discontinuity

Key to sustain AUM margins thanks to its strong operating leverage and to a more efficient value chain

FAM progressively taking control of the value chain…

…and becoming the cornerstone of our Investing

bn

• Strong commercial traction in any market environment
• Increasing contribution to Fineco's AUM net sales

FAM RETAIL NET SALES

	2.6
1.9	117%
75%

9M229M23

bn	FAM AUM STOCK
			24.5	29.2	29.1
		Retail class	14.8	18.6	18.6
		FAM funds underlying	9.7	10.6	10.6
			Sept.22	Jun.23	Sept.23
		FAM retail / Fineco total AUM	29.1%	33.4%	33.5%
		FAM retail / Fineco AUM (only	45.0%	49.9%	50.4%

FAM retail as % of Fineco AUM net sales

funds)

FAM retail net sales: outstanding results both in absolute and relative terms

bn	3.6	2.6			RETAIL NET SALES as of September, 2023(1)
		2.0
			1.1	0.8
				0.3	0.1
								-0.4	-0.6	-0.7	-1.4	-1.4
													-10.0
	Peer1	FAM	Peer2	Peer4	Peer3	Peer5	Peer7	Peer6	Peer8	Peer9	Peer10	Peer11	Peer12

(1) Source for peers: Assogestioni figures as of September 2023 (reported figures are the ones comparable vs FAM retail net sales: opened funds and retail discretionary portfolio management). Peers are:

7 Allianz, Amundi, Anima, BNPP Group, Credem, Deutsche Bank Group, Generali Group, Intesa SanPaolo Group, Mediobanca Group, Mediolanum Group, Poste Italiane, UBS

Brokerage: higher floor as the structure of the market is changing

Increased interest in financial markets by clients and big jump into a more digitalized society

Structural growth in revenues: the floor has gone up in a clear way in any market environment

Avg monthly revenues 2017-2019

FTSE MIB monthly volumes

Average

'17-19

The floor of revenues has confirmed to be structurally higher

• 3Q23 Revenues: 43.7 mln
• October est.: 17 mln (>50% higher vs 2017/19 avg; >25% vs Oct 22)

Client base growth mainly driven by "Active investors"

trader active investors avg '18-19 active investors

Active investors
>35% higher						91%	93%	92%
vs avg 2018/2019 after			86%	87%	90%
recent events	88%	89%
created a bridge between
brokerage and investing
FY18	FY19 FY20	FY21	FY22 Mar.23	Jun.23	Sep.23

Well-diversified brokerage offer

among products…	…and geographies
	Funds			Other markets
Forex / CFD	10%		Italy
		8%				36%
	27%		53%	43%
Derivatives
			3%	Equity		20%
	Bonds			US

8	Active investors: less than 20 trades per month; Traders: more than 20 trades per month

Brokerage: focus on revenues generation vs peers

More resilient revenues generation vs peers thanks to better quality target market

Brokerage revenues: FBK best performing in challenging market environment

	Fineco (mln euro)			Peer1 (mln sek)
-11.0%		-6.1%	-27.1%
			-16.5%
213.9	190.4
149.1	140.1	2,220.5	1,619.2	1,276.1
		1,065.3
2021	2022	9M22	9M23	2021	2022	9M22	9M23

Peer2 (mln sek)

-34.3%	-26.0%
1,456.0
955.9	760.1
	562.5

Peer3 (mln euro) (1)

-19.9%	-18.1%
339.7	272.2	219.2	179.5

2021

2022

9M22

9M23

2021

2022

9M22

9M23

(1) Commission income

1

MORE SOLID RESULTS THANKS TO:

2

Wide product range and strong attention to platforms and tools' development. Most recent initiatives:

• Innovation web pages with a better usability
• Dedicated offer for young clients with better pricing and zero fee on ETF accumulation plans

Positioning, brand and marketing always targeting a wide investor base and not small traders' niche. Result: a better quality and stickier client base using the whole one-stop-solution

Active Investors' Profile

9

➢ Zero fee on >1,600 ETFs by the main issuers	➢ 4 avg executed orders per month ➢ Mostly linked to a PFA to manage their
➢ FinecoX: new generation trading platform	➢	Avg age: 50 years old	savings, and with Avg TFA > €200k

Peers: Avanza, Flatex, Nordnet

High quality lending

Offered exclusively to the existing base of clients, leveraging on our internal Big Data analytics

Commercial Loans Portfolio, eop mln

Current accounts/Overdraft (1)	Cards
Personal loans	Mortgages

			-4.6%
5,821			-2.7%
5,711	5,554
2,350	2,238	2,157
		543			552		533
	302	335
		317
2,626	2,587	2,547
	Sep.22	Jun.23	Sep.23

Cost of Risk on commercial loans (2)

5 bps

5 bps

2 bps

Sep.22 Jun.23 Sep.23

NPE ratio

0.41%

0.43%

0.42%

• Cost of Risk well under control thanks to the constant improvement in the quality of the credit which is mainly secured and low risk
• We confirm our strategy aims to build a safe lending portfolio, offering these products exclusively to our very well known base of clients, leveraging on a deep internal IT culture, powerful data warehouse system and Big Data analytics
• NPE at 25 mln with a coverage ratio at 83%, NPE ratio at 0.42%
• LLP equal to 2.0 mln in 9M23

(1) Current accounts/overdraft Include Lombard loans

10	(2) Cost of Risk: commercial LLP of the last 12 months on average last 12 months commercial Loans