FINECOBANK S.P.A. Consolidated Interim Financial Report
at September 30th, 2020 - Press Release
Results at September 30th, 2020 approved
OUTSTANDING INDUSTRIAL RESULTS
WITH REVENUES AND NET PROFIT GROWING STRONGLY
THE COMPLEX CONTEXT IS REWARDING OUR DIVERSIFIED BUSINESS MODEL
- Strong growth in net profit1 thanks to the diversified business
model: €246.3 million (+22.7% y/y)- Gross operating profits1: €397.5 million (+30.8% a/a)
- Revenues1: €594.2 million (+21.5% y/y)
- Operating costs: 196.7 million (+3.8%2 y/y)
- Cost/income ratio1 declining to 33.1% (-4.8 p.p. y/y)
- Solid capital position: CET1 at 23.28%
FIGURES AT OCTOBER 31st, 2020
Net sales in the month of October at €739 million, +91% y/y
Estimated brokerage revenues at €14 million, +12% y/y
Milan, November 9th, 2020
The Board of Directors of FinecoBank S.p.A. has approved the results at September 30th, 2020. Alessandro Foti, CEO and General Manager of FinecoBank, stated:
-
Figures net of non-recurring items recorded in the first nine months of 2020:€-1.4 million gross (€-1.0 million net) related to Voluntary Scheme fair value, of which: €-0.2 million gross (€-0.2 million net) in the third quarter of 2020; €- 1.2 million gross (-€0.8 million net) in the first quarter of 2020.
Non-recurring items recorded in the first nine months of 2019: €-4.4 million gross (€-2.9 million net) related to Voluntary
Scheme fair value, of which: €0.4 million gross (€0.3 million net) in the third quarter of 2019; €-4.3 million gross (€-2.9 million net) in the second quarter of 2019; €-0.4 million gross (€-0.3 million net) in the first quarter of 2019. Patent Box: €-0.9 million in the third quarter of 2019; €-0.9 million in the second quarter of 2019; €-0.9 million in the first quarter of 2019 - Net of marketing expenses in UK in the first 9 months of 2020
1
Consolidated Interim Financial Report
at September 30th, 2020 - Press Release
"Figures recorded in the first nine months highlight the excellent response of Fineco to an uncertain and complex phase we are facing. We are very satisfied about these results as they confirm the solidity of the bank and the strength of our diversified and sustainable business model. Our distinctive digital DNA supported us in reaching a strong growth in all business areas, confirming a great interest by many clients in interacting with markets and investing through our integrated platform.
October net sales maintained the very robust growth trend started at the beginning of the year, with clients appreciating new investment products launched by FAM in the second half of the month, which fully meet the customers' needs in a complex market phase. In addition, we confirm brokerage structural growth on a yearly basis, thanks to both the reshaping of our offer and the enlargement of the base of active clients".
9M20
HIGHLIGHTS
UPDATE ON INITIATIVES
FINECOBANK
- Revenues1 at €594.2 million, +21.5% y/y mainly led by Brokerage area (+83.8% y/y), thanks to the combined effect of the reshape of our product offer, the enlargement of the clients base, the increase of Fineco market share and the higher market volatility, and by Investing area (+5.7% a/a), thanks to the contribution of Fineco Asset Management and to the higher impact of Guided Products and Services.
- Operating costs at €196.7 million, +6.2% y/y; operating costs net of marketing expenses in UK at €192.2 million, +3.8% y/y. Cost/Income ratio1 at 33.1%, down by 4.8 percentage points y/y confirming the Bank's operational efficiency
- Gross operating profit at €397.5 million, +30.7%
- Net profit1 at €246.3 million, +22.7% y/y, despite the higher contribution related to Systemic charges3
- Fineco is keeping on developing its UK offer, with the broadening of the investing offer that will continue in the coming months. The success of the first marketing campaign confirms how the one-stop-solutionoffered by the Bank is very well welcomed.
- The process of reshape of the brokerage offer is continuing with the launch of new products and services (Asian markets, CFD, new release of the platform PowerDesk, we are in the process of vertically integrating certificates, becoming issuer, market maker and distributor through our platform)
- Activities continued to develop Fineco Asset Management which, also thanks to the recent launch of a new edition of the FAM Global Defence fund, has confirmed its increasing capacity to promptly and effectively respond to customer needs
3 Systemic charges in the first 9 months of 2020: Deposit Guarantee Scheme estimated in €28.0 million, including an estimated additional contribution of €-7.1 million to a member of Interbank Deposit Protection Fund; Single
Resolution Fund: €-0.9 million
2
Consolidated Interim Financial Report
at September 30th, 2020 - Press Release
TOTAL FINANCIAL ASSETS AND NET SALES
Total Financial Assets (TFA) at September 30th, 2020 amounted to €85.0 billion, up 8.2% compared to September 2019. Stock of Assets under Management was €41.7 billion, up 8.9% y/y, assets under custody amounted to €16.8 billion (+11.0% y/y), while the stock of direct deposits amounted to €26.4 billion (+5.3% y/y) thanks to the continuous growth in new customers and "transactional" deposits.
In particular, the TFA related to Private Banking customers4 totaled €34.4 billion, up by 8.0% y/y.
In the first nine months of 2020, inflows totalled €6.4 billion (+46.1% y/y), again proving to be solid, of high quality and gathered without short-term commercial incentives. The asset mix shifted positively towards asset under management, standing at €2.6 billion in the period (+35.6% y/y), highlighting a more cautious approach by clients who are favouring more conservative products. Inflows in asset under custody stood at €2.8 billion in the period, confirming clients' increased interest towards financial markets through Fineco brokerage platform, while direct deposits flows totalled €0.9 billion.
Since the start of the year, inflows into "Guided products & services" reached €2.6 billion (+16.3% y/y), confirming customer appreciation.
The ratio of Guided Products compared to total AuM rose to 73% compared to 70% in September 2019.
On September 30th, 2020 the network was composed of 2,577 Personal Financial Advisors operating across the country through 403 Fineco Centers. Inflows in the first nine months of the year through the PFA network were €5.5 billion.
As at September 30th, 2020, Fineco Asset Management managed €14.8 billion of assets, of which €9.5 billion were retail class (+28.4% y/y) and around €5.4 billion institutional class (+2.4% y/y).
In the first nine months of 2020, about 66,500 new customers were acquired. The total number of customers as at September 30th, 2020 was 1,362,262.
4 Private Banking clients have assets above €500,000.
3
Consolidated Interim Financial Report
at September 30th, 2020 - Press Release
MAIN INCOME STATEMENT RESULTS AT 30.09.2020
Figures and variations in this paragraph and in the next one on quarterly results are shown net of non- recurring items1
mln | 1Q19 | 2Q19 | 3Q19 | 9M19 | 1Q20 | 2Q20 | 3Q20 | ||
Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | Adj. (1) | |||
Net interest income | 70.4 | 71.4 | 69.8 | 211.6 | 68.2 | 70.1 | 68.6 | ||
Net commissions | 77.4 | 81.3 | 84.3 | 242.9 | 105.0 | 104.8 | 97.9 | ||
Trading profit | 10.3 | 12.3 | 11.2 | 33.8 | 27.6 | 30.1 | 20.4 | ||
Other expenses/income | 0.2 | 0.3 | 0.1 | 0.7 | 0.6 | 0.8 | 0.2 | ||
Total revenues | 158.2 | 165.4 | 165.4 | 489.0 | 201.3 | 205.8 | 187.1 | ||
Staff expenses | -21.7 | -22.4 | -22.5 | -66.6 | -24.0 | -24.9 | -24.6 | ||
Other admin.expenses | -38.5 | -34.4 | -29.4 | -102.3 | -36.5 | -34.6 | -33.4 | ||
Impairment/write-backs on intangible |
9M20 Adj. (1)
206.9
307.6
78.1
1.6
594.2 |
-73.5 |
-104.5 |
9M20/ | 3Q20/ | 3Q20/ |
9M19 | 3Q19 | 2Q20 |
-2.2% | -1.7% | -2.0% |
26.6% | 16.2% | -6.6% |
131.0% | 82.3% | -32.1% |
n.s. | 12.5% | -79.7% |
21.5% | 13.1% | -9.1% |
10.4% | 9.6% | -1.0% |
2.2% | 13.9% | -3.5% |
and tangible assets | -5.1 | -5.4 | -5.8 | -16.3 | -6.1 | -6.2 | -6.4 | ||
Operating expenses | -65.3 | -62.3 | -57.6 | -185.2 | -66.5 | -65.7 | -64.4 | ||
Gross operating profit | 92.9 | 103.1 | 107.8 | 303.8 | 134.8 | 140.0 | 122.7 | ||
Other charges and provisions | -1.0 | -2.9 | -19.8 | -23.6 | -1.1 | -6.5 | -32.0 | ||
LLP | -1.3 | 1.1 | -1.2 | -1.4 | -1.0 | -2.7 | 0.1 | ||
Profit from investments | -0.7 | 6.5 | 0.4 | 6.3 | -0.1 | -3.7 | -0.2 | ||
Profit before taxes | 90.0 | 107.8 | 87.2 | 285.1 | 132.6 | 127.1 | 90.7 | ||
Income taxes | -26.5 | -32.2 | -25.6 | -84.3 | -40.4 | -38.3 | -25.3 | ||
Net profit adjusted | 63.5 | 75.6 | 61.7 | 200.7 | 92.2 | 88.7 | 65.3 | ||
-18.6 | 14.4% | 10.2% | 2.6% |
-196.7 | 6.2% | 11.8% | -1.9% |
397.5 | 30.8% | 13.8% | -12.4% |
-39.6 | 67.7% | 61.6% | 390.9% |
-3.5 | 157.2% | -112.1% | -105.5% |
-4.0 | -163.9% | -140.3% | -95.1% |
350.3 | 22.9% | 3.9% | -28.7% |
-104.0 | 23.4% | -0.9% | -33.9% |
246.3 | 22.7% | 6.0% | -26.4% |
Revenues for the first nine months of 2020 totaled €594.2 million, up 21.5% compared to €489.0 million in the same period of the previous year, mainly thanks to the positive contribution of net commission and trading profit.
Net interest income stood at €206.9 million, down 2.2% from €211.6 million at September 30th, 2019, mainly due to the fall in market interest rates, partly offset by the positive contribution from volume effect, higher lending activity and a more dynamic Treasury management (revenues generated by Other Treasury activities have been recasted in the line).
The average gross margin on interest-earning assets in the first nine months of 2020 was 1.03% compared to 1.23% in the same period of 2019.
Net commissions stood at €307.6 million, up 26.6% from €242.9 million at September 30th 2020.
This increase is mainly due to the rise in net commissions in the Brokerage area (+76.4% y/y) thanks to the combined effect of the reshape of our product offer, the enlargement of the clients base, the increase of Fineco market share (Assosim market share on equity traded volumes increased by 1.4 percentage points at 28.0% as of June 30th, 2020, last available data) and the higher market volatility in the period. Investing area grew by 5.6% y/y thanks to Fineco Asset Management contribution and the higher impact of Guided Products and Services, while banking fees grew by 81.0% y/y.
Trading profit amounted to €78.1 million in the first nine monts of 2020 (+131.0% y/y), mainly thanks to the contribution from the Brokerage area (€69.3 million, +134.5% y/y). Trading profit also includes the income components from financial instruments accounted under "Other financial instruments measured at fair value" which include the Visa INC shares, convertible preferred, whose fair-value measurements led to a positive result of €0.2 million in the first nine months of 20205 (+€2.2 million in the first nine months of 2019).
5 €-1.1 million in 1Q20, €+1.2 million in 2Q20 and €+0.2 million in 3Q20
4
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Finecobank S.p.A. published this content on 09 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2020 12:07:06 UTC
