PR - Results 3Q2021

Results at September 30th, 2021 approved

FINECO: SOLID GROWTH TREND CONTINUES,

INCREASING PROFITS AND REVENUES

DIGITALIZATION REWARDS THE BUSINESS MODEL

BOOST IN ASSET UNDER MANAGEMENT

• Strong growth in net profit thanks to the diversified business model:
• • 
    €257.2 million (+4.4% y/y1)
  • Revenues: €596.9 million (+4.1% y/y1)
  • • Cost/income ratio: 31.4%
  • Solid Capital Position: CET1 at 18.37%

FIGURES AT OCTOBER 31st, 2021

Net sales in the month of October at €903 million, +22.2% y/y

Asset Under Management at €501 million, more than 3x y/y

Estimated brokerage revenues in the month of October at €16 million

Milan, November 9th, 2021

The Board of Directors of FinecoBank S.p.A. has approved the results as of September 30th, 2021. Alessandro Foti, CEO and General Manager of FinecoBank, stated:

"During the first nine months of the year Fineco recorded a steady growth, confirming its solidity and once again the strength of its well diversified and sustainable business model. In a context that shows a continuous acceleration of the digitalization in all areas of society, the distinctive technological DNA of the Bank is

1 Figures net of non-recurring items recorded in the first nine months of 2021: +32.0 million net related to the fiscal realignment of the intangible asset recorded in Financial Statement as of December 31st, 2019, under the art. 110 of the Legislative Decree 104/2020.

Figures net of non-recurring items recorded in the 2020: €-1.4 million gross (€-1.0 million net) valuation related to the Voluntary Scheme fair value in the first nine months of 2020, of which €-1.2 million gross (€-0.8 million net) in the first quarter of 2020 and €-0.2 million gross (€-0.2 million net) in the third quarter.

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positioning its integrate platform in a sweet spot to offer the most efficient answers to clients, increasingly interested in investing. Finally, total net sales in October continues the robust growth trend with a boost in Assets under Management, highlighting the ability of our financial advisors to satisfy our clients' needs thanks to advanced and innovative solutions."

FINECOBANK

9M21 HIGHLIGHTS

• Revenues1 at €596.9 million, +4.1% y/y led by the Investing area (+25.1% y/y), thanks to the growing contribution of Fineco Asset Management, to the increase of Asset under Management, and to the increase in Investing net margins
• Operating costs at €187.6 million, +6.7% y/y (+5.2% y/y2). Cost/Income ratio1 at 31.4%, confirming the Bank's operational efficiency
• Net profit1 reached a new record-high at €257.2 million, up +4.4% y/y compared to the first nine months of 2020 (which was the best result ever), despite €-37.7million contribution to systemic charges (€-28.9in 9M20)
• TFA at €103.6 billion, +21.8% y/y thanks to the contribution of high quality net sales, equal to €7.9 billion (+23.8% y/y). Net sales in Asset Under Management stood at €5.4 billion compared with €2.6 billion in the same period of 2020
• Fineco Asset Management reaches €21.6 billion of TFA, of which €13.9 billion in retail classes (+47.2% y/y), and it is proceeding with the activities related to the strategic discontinuity, which will allow FAM to take more control of the value chain

• 86,938 new customers acquired, +30.7% y/y

UPDATE ON

INITIATIVES

• Activities continued to develop Fineco Asset Management. After the strong interest by clients for its FAM Target China and for the ESG Target Global Coupon, the Asset Management Company is launching the Global Inflation Responsive, a new investment solution designed to provide client with exposure to strategies focused on inflation. Furthermore, in 2021 Fineco Asset Management will widen its offer with new equity and sustainable solutions, confirming its increasing capacity to promptly and effectively respond to customer needs
• The process of reshape of the brokerage offer is continuing with the launch of the leveraged certificates, which allows the Bank to become issuer, market maker and distributor through its platform, vertically integrating the business
• Fineco keeps on developing its UK offer, with the launch of ISA products and the progressive widening of its Investing offer on the platform

2 Net of costs strictly related to the growth of the business, mainly: FAM (-2.7 mln y/y) and marketing expenses related to UK (-0.6 mln y/y).

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TOTAL FINANCIAL ASSETS AND NET SALES

Total Financial Assets (TFA) at September 30th, 2021 amounted to €103.6 billion, up 21.8% compared to September 2020. Stock of Assets under Management was €52.6 billion, up 26.1% y/y, assets under custody amounted to €22.0 billion (+31.0% y/y), while the stock of direct deposits amounted to €28.9 billion (+9.2% y/y).

In particular, the TFA related to Private Banking customers, i.e. with assets above €500,000, totalled €45.9 billion, up by 33.4% y/y.

In the first nine months of 2021, inflows totalled €7.9 billion (+23.8% y/y), again proving to be solid, of high quality, and not requiring recourse to short-term commercial policies. The asset mix shifted positively towards asset under management, standing at €5.4 billion (+107.5% y/y). Assets under custody amounted to €1.6 billion (-43.0% y/y), while direct deposits were equal to €0.9 billion (-7.7% y/y).

Since the start of the year, inflows into "Guided products & services" reached €5.0 billion, confirming customer appreciation.

The ratio of Guided Products compared to total AuM rose to 75% compared to 73% in September 2020.

On September 30th, 2021 the network was composed of 2,752 personal financial advisors operating across the country through 417 Fineco Centers. Inflows in the first nine months of the year through the PFA network were €7.4 billion.

As at September 30th, 2021, Fineco Asset Management managed €21.6 billion of assets, of which €13.9 billion were retail class (+47.2% y/y) and around €7.7 billion institutional class (+42.8% y/y).

In the first nine months of 2021, 86,938 new customers were acquired, growing by 30.7% y/y. The total number of customers as at September 30th, 2021 was 1,414,788.

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MAIN INCOME STATEMENT RESULTS AT 30.09.2021

Figures and variations in this section are shown net of non-recurring items1.

mln	1Q20	2Q20	3Q20		1Q21	2Q21	3Q21		9M19	9M20
Adj. (1)	Adj. (1)	Adj. (1)		Adj. (1)	Adj. (1)	Adj. (1)		Adj. (1)	Adj. (1)
Net financial income	72.0	75.1	68.6	75.1	72.8	69.2	215.6	217.1
o/w Net interest income	68.2	70.1	68.6	61.8	62.5	61.8	206.9	186.1
o/w Profit from treasury	3.8	5.0	-0.1	13.2	10.3	7.4	8.7	31.0
Net commissions	95.9	98.6	92.3	108.1	106.3	110.1	286.8	324.4
Trading profit	23.8	25.1	20.5	23.9	16.7	15.6	69.4	56.2
Other expenses/income	0.6	0.8	0.2	0.5	0.1	-1.5	1.6	-0.8
Total revenues	192.2	199.6	181.5		207.6	195.9	193.5		573.3	596.9
Staff expenses	-24.0	-24.9	-24.6	-26.2	-26.7	-27.4	-73.5	-80.3
Other admin.expenses	-27.4	-28.5	-27.8	-30.6	-29.9	-27.6	-83.7	-88.2
D&A	-6.1	-6.2	-6.4	-6.3	-6.4	-6.4	-18.6	-19.1
Operating expenses	-57.5	-59.6	-58.8	-63.1	-63.0	-61.5	-175.9	-187.6
Gross operating profit	134.8	140.0	122.7		144.5	132.9	132.0		397.5	409.4
Provisions	-1.1	-6.5	-32.0	-8.2	-5.8	-31.1	-39.6	-45.1
LLP	-1.0	-2.7	0.1	-0.5	-1.2	-0.4	-3.5	-2.0
Profit from investments	-0.1	-3.7	-0.2	-0.6	1.8	0.3	-4.0	1.5
Profit before taxes	132.6	127.1	90.7		135.2	127.7	100.9		350.3	363.8
Income taxes	-40.4	-38.3	-25.3	-40.4	-37.8	-28.3	-104.0	-106.5
Net profit adjusted (1)	92.2	88.7	65.3		94.7	89.9	72.6		246.3	257.2

9M21/		3Q21/	3Q21/
9M20		2Q20	2Q21
0.7%	1.0%	-4.9%
-10.0%	-10.0%	-1.1%
n.s.		n.s.	-27.8%
13.1%	19.3%	3.6%
-19.0%	-23.9%	-6.4%
n.s.		n.s.	n.s.
4.1%		6.6%	-1.2%
9.1%	11.0%	2.6%
5.4%	-0.6%	-7.7%
2.5%	1.0%	0.8%
6.7%	4.5%	-2.5%
3.0%		7.6%	-0.7%
13.8%	-2.9%	n.s.
-41.9%		n.s.	-70.2%
n.s.		n.s.	-84.6%
3.8%		11.3%	-21.0%
2.4%	11.7%	-25.2%
4.4%		11.1%	-19.3%

Revenues for the first nine months of 2021 totalled €596.9 million, up 4.1% compared to €573.3 million in the same period of the previous year.

Net Financial income stood at €217.1 million, up by 0.7% compared to €215.6 million as of September 30th 2020 thanks to the profits from Treasury Management, which more than offset the decrease in Net interest income due to the fall in market interest rates.

Net commissions at September 30th, 2021 stood at €324.4 million, up 13.1% from €286.8 million at September 30th, 2020.

This increase is mainly due to the rise in net commissions in the Investing area (+25.2% y/y) thanks to the volume effect and to the increased contribution of Fineco Asset Management. Banking fees grew at €35.6 million (+14.8% y/y), while Brokerage net commissions stood at €95.6 million, down 6.0% y/y mainly due to the lower volatility in the period compared to the peak registered in brokerage in the first nine months of 2020.

Trading profit amounted to €56.2 million, decreasing (-19.0% y/y) mainly due already mentioned lower volatility compared to the peak registered in the first nine months of 2020.

Operating costs in the first nine months of 2021 were well under control at €187.6 million, up 6.7% y/y mainly due to expenses strictly related to the growth of the business2: net of this, the growth of operating costs is equal to 5.2% y/y.

Staff expenses totalled €80.3 million, increasing by €6.7 million due to the increase in the number of employees, which rose from 1,251 as of September 30th, 2020 to 1,287 as of September 30th, 2021, due to the gradual internalisation of some services following the exit from the UniCredit Group and to our Irish company Fineco Asset Management, which will further improve the efficiency of the value chain in the Investing area.

The cost/income ratio net of non-recurring items1 was equal to 31.4%.

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Gross operating profit came to €409.4 million, up by 3.0% y/y.

Other charges and provisions in the first nine months of 2021 totalled €-45.1 million compared to €-39.6 million in the same period of 2020, mainly due to the ordinary annual contribution to the Deposit Guarantee Systems (DGS), estimated at € 30.0 million compared to € 28.0 million in the same period of the previous year), and the contribution to the Single Resolution Fund (SRF € -7.7 million in the first nine months of 2021 and -0.9 million in the same period of 2020).

Loan loss provisions amounted to €-2.0 million, also thanks to write-backs after the improvement of the update macroeconomic scenario as requested under IFRS9. The cost of risk is 7 basis points.

Profit on Investments amounted to €1.5 million, after the improvement of the updated macroeconomic scenario as required under IFRS9, which led to write-backs in the period, mainly on the Bank's government and exposures.

Profit before taxes amounted to €363.8 million, up by 3.8% compared to €350.3 million in the first nine months of 2020.

Net profit for the period was equal to €257.2 million, up by 4.4% y/y.

MAIN INCOME STATEMENT RESULTS FOR THE THIRD QUARTER 2021

Revenues are equal to €193.5 million, slightly down by 1.2% compared to the previous quarter mainly due to seasonality and increasing by 6.6% compared to the third quarter of 2020.

Net Financial income stood at €69.2 million, down by 4.9% compared to the previous quarter and increasing by 1.0% compared to the third quarter of 2020.

Net commissions stood at €110.1 million, up compared to €106.3 million in the third quarter of 2021 and increasing by 19.3% compared to the 92.3 million recorded in the third quarter of 2020, mainly thanks to the Investing commissions (€71.4 million in the quarter, +9.7% q/q and +29.9% y/y).

Trading profit amounted to €15.6 million, down compared to €16.7 million in the previous quarter and to €20.5 million in the third quarter of 2020, mainly due to the lower Brokerage revenues due to the lower market volatility.

Operating costs in the third quarter of 2021 totalled €61.5 million, down by 2.5% compared to the previous quarter, and up by 4.5% y/y mainly due to the abovementioned higher expenses strictly related to the growth of the business.

Operating profit was equal to €132.0 million, slightly down compared to €132.9 million in the second quarter of 2021 and increasing by 7.6% compared to €122.7 million in the third quarter of 2020.

Other charges and provisions in the third quarter of 2021 totalled €-31.1 million, mainly for the abovementioned ordinary annual contribution to the Deposit Guarantee Systems (DGS).

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