9m11 results presentation 3 · market-related items 51.2 9m11 higher recurring items as a result of...

Banca Generali9 Months 2011 results and business update

Milan, November 7, 2011

2Banca Generali 2011 Nine Months Results

Today’s Agenda

Net Inflows, AUM and recruiting

9M 2011 Results

Closing Remarks

Business Update


Once again Banca Generali is proving its resilience in any market condition

9M 2011 Results

(€ m)

Net Profit broadly stable excluding tax one-offs…

(€ m)

9M10 9M11

… even if with much lower market-related items

36.2

Performance fees

Trading

25.5

10.7

10.9

5.35.6

9M 2011 results in one word:SOLIDITY

60.0

51.2

9M10 9M11

6 mln

one - off tax gain

54.051.2

-15%

-

--5%

Net profit quality continuously improving:recurring revenues (+8.5%) and tough costmanagement (flat yoy) counterbalanced thedecrease in market-related items (-70% yoy)and the one-offs tax gains of last year

results’ sustainability further strengthened

Proven ability to grow in any market condition:YTD net inflows at €917 million, o/w €531min managed productsStrong speed-up in the pace of growth ofnet inflows in October (€162m)

Solidity of Balance Sheet: Tier 1 Capital ratio at 12.5% (from 11% at 2010YE) and excess capital at €111 million (+24% YTD)

-70%


Market related items

9M10 Net recurring Commissions (2)

60.0

12.5

0.6

NII

(5.4)

Analysis of variation in net profit(€ m)

6.0

∆ inprovisions/

Impairments (1)

(19.9) Performancefees

Tradingincome

(2.6)

Taxes

As in previous quarters, recurring and steady business is offsetting the unfavourable market situation

9M 2011 Results

Sharp fall in the contribution from

market-related items

51.2

9M11

Higher recurring itemsas a result of strong

organic growth

(1) o/w €5.2m related to lower provisions for incentives to the network and costs for recruiting, €1.5m of lower one-off items linked to restructuring charges, -€0.7m of higher write-offsand provisions for other risk; (2) management, front e banking fees


Consolidated 9M11 Profit and Loss Account: main takeaways

9M 2011 Results

Interest margin slightly improving, reflecting the increase in interest rates

Positive management fees (+15% yoy) counterbalancing poor performance fees

Trading income down 50%, due to unfavorable market conditions

Total costs well under control, as tough G&A control counterbalanced the increase in labour costs mainly due to the national labour contract

Decrease in provisions mostly due to lower incentives to the network to be paid in the 4Q 2011

Net profit broadly stable, after stripping out the one-off tax gain reported in 1H10

Interest margin slightly improving, reflecting the increase in interest rates

Positive management fees (+15% yoy) counterbalancing poor performance fees

Trading income down 50%, due to unfavorable market conditions

Total costs well under control, as tough G&A control counterbalanced the increase in labour costs mainly due to the national labour contract

Decrease in provisions mostly due to lower incentives to the network to be paid in the 4Q 2011

Net profit broadly stable, after stripping out the one-off tax gain reported in 1H10

Figures “ex-GIL” do not incorporate the contribution of Generali Investment Luxembourg (“GIL”), the management co. of Assicurazioni Generali merged with BG Investment Lux on September 9, 2009

(€ mln) 9M10 9M11 % Chg 9M10 9M11 Var.%

(reported) (reported) (excl. GIL) (excl. GIL)

Net Interest Income 32,7 33,3 1,8% 32,7 33,3 1,8%

Commission income 268,0 262,1 -2,2% 248,4 243,7 -1,9%

Commission expense -117,0 -118,6 1,4% -102,5 -105,1 2,6%

Net Commission 151,0 143,5 -5,0% 145,9 138,5 -5,1%

Net income (loss) from trading activities -45,7 -75,2 64,4% -45,8 -75,2 64,3%

Dividends 56,4 80,5 42,6% 56,4 80,5 42,6%

Net income (loss) from trading activities and Dividends 10,7 5,3 -50,6% 10,7 5,3 -50,3%

Net Banking Income 194,4 182,1 -6,3% 189,3 177,1 -6,4%

Staff expenses -49,3 -51,2 3,8% -47,8 -49,7 3,9%

Other general and administrative expense -63,2 -61,4 -2,8% -62,8 -61,1 -2,8%

Depreciation and amortisation -3,0 -3,1 2,8% -3,0 -3,1 2,9%

Total costs -115,5 -115,6 0,1% -113,6 -113,8 0,2%

Cost /Income Ratio -53,9% -57,5% -3,6 p.p. -54,3% -58,1% -3,8 p.p.

Other net operating income (expense) 7,7 7,9 1,8% 7,7 7,9 1,8%

Operating Profit 86,7 74,3 -14,2% 83,5 71,2 -14,7%

Net adjustments for impair.loans and other assets -1,9 -2,3 24,7% -1,9 -2,3 24,7%

Net provisions for liabilities and contingencies -18,4 -11,8 -35,9% -18,4 -11,9 -35,2%

Profit Before Taxation 66,4 60,2 -9,3% 63,2 56,9 -10,0%

Direct income taxes -3,5 -6,1 74,1% -3,2 -5,8 80,7%

Tax rate 5,3% 10,1% 4,8 p.p. 5,0% 10,1% 5,1 p.p.

Minorities interest -2,9 -3,0 4,0% 0,0 0,0 0,0%

Net Profit 60,0 51,2 -14,8% 60,0 51,2 -14,8%


Higher interest margin and higher management fees counterbalanced the decrease in market-related items

Net CommissionsNet Interest Income

Trading and dividends

Breakdown of Net Banking Income (LfL) Recurring income1

9M10

153.2

9M11

166.2

(1) management, front and banking fees + interest margin

Recurring Income/Total income

9M10

80.9%

9M11

93.8%

9M 2011 Results

+8.5%

+12.9 p.p.

(€ m)

(€ m)

189.3

145.9(77%)

177.1

33.3(19%)

138.5(78%)

9M119M10

5.3 (3%)10.7 (6%)

32.7(17%)

-5.1%

-6.4%

o/w €25.5

o/w €5.6-50.3%

+1.8%

o/w performance fees


(€ m)

Breakdown of Gross Commissions (LfL)

9M10 9M11

-1.9%

Recurring commissions make up for 98% of total gross fees

9M 2011 Results

Non-recurring revenues*

Trend in Recurring Commissions (LfL)

9M11(€ m)

9M10

10%

Recurring gross commissions

90%

98%

244248

2%-78%Non-Recurring

gross commissions

Management FeesFront Fees

Banking Revenues

Performance Fees

+7%

25.5(10%)

169.5(68%)

28.9 (12%)

248.4

24.5(10%)

5.6 (2%)

194.2(80%)

23.3 (10%)

243.7

20.6 (8%)

+15%

(€ m)Management fees (LfL)

194.2

9M11

169.5

9M103Q113Q10

62.660.1

+4%

+15%

-20%

-78%

-16%


Net commissions (excluding performance fees) posted a 10% increase

9M10 9M11

(€ m)

120.4

Net Commissions* (LfL)

9M10

46.0%

Pay-out trend* (LfL)

132.9

FY10

50.8%

(*) excluding performance fees

9M 2011 Results

9M11

44.2%

+10%

(*) excluding performance fees


Slight increase in interest margin even with a very prudent Banking Book

The investment portfolio remains highly defensive with an average maturity of <3.0 yrs and a duration of ≈1.0 yrsThe investment portfolio remains highly defensive with an average maturity of <3.0 yrs and a duration of ≈1.0 yrs

Rising interest rates (Euribor 3M)

(€ m)

9M10 9M11

32.7

33.3

+1.8%

… and yoy

(€ m)

9M 2011 Results

3Q10 3Q11

10.4

11.8

+14.0%

Slightly falling volumes

Interest margin increases qoq…

9M10 9M11

1.71.6

FY10

1.7

= -7.0%

(€ bn)

0,8

1

1,2

1,4

1,6

1,8

Aug

-10

Sep-

10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-

11

Aug

-11

Sep-

11

Oct

-11

0.886%

1.58%


Tough cost control is definitely continuing

113.6

42%(47.8)

55%(62.8)

G&A ExpensesStaff

9M10

Depreciation and amortisation

3% (3.0)

Operating Costs Breakdown (LfL)

9M11

113.8

43%(49.7)

54%(61.1)

G&A Expenses

3% (3.1)

9M10

(€ m)62.8

9M11

61.1

Staff costs

47.8

9M10

(€ m)

49.7

9M11

+3.9%

9M 2011 Results

(€ m)

The increase in staff costis mainly related to

the National Labour contract

The headcount remained stable

G&A continue to decreasethanks to the ongoing cost

rationalisation process

When stripping out €2.1m relatedto the stamp duty on security deposits,

(recovered in “other revenues”)the decrease is even more pronounced (-6.2% yoy)

+3%

-3%

+4%

+0%

2.1

-2.8%

-6.2%


Recurring Profitability further improving compared to the same period of last year

AUM Profitability (LfL)

Recurring commissionsPerformance Fees Interest margin

1.57%

9M11

1.47%

0.27%

1.35%

0.19%

0.03%

1.65%

1.31%

9M10

0.19%

0.15%

+4 bps

9M10

Management fees contributionto AUM profitability

FY10 9M11

1.00%

1.02%1.10%

1.54%1.50%

… Recurring profitability

9M 2011 Results

9M10 FY10 9M11

22,723

23,529

Average underlying AUM

22,878

(€ m)

+10 bps


Solid capital base, as shown by the increase in both Tier 1 and Total Capital Ratios

Excess Capital increased by 24% YTD to €111 million

Solid capital base, as shown by the increase in both Tier 1 and Total Capital Ratios

Excess Capital increased by 24% YTD to €111 million

Shareholders’ equityand dividends paid

Excess Capital Tier 1 Capital Ratio

2009 2010

281.2

268.5

2009 2010

69.5

89.6

(€ m) (€ m)

9.8%

2009

11.0%

2010

+29%

+4.7%

+24%

Total Capital Ratio

12.1%

2009

13.3%

2010

9M2011 Results

Banca Generali has further strengthened its already solid capital base

12.5%

9M11

14.9%

9M11

111.3

9M119M11

248.7

-12%

… Total dividends paid

€6.6m

€49.9m€61.3m


Today’s Agenda


9M 2011 Results

Closing Remarks

Business Update


Banca Generali is continuing to grow and even accelerating in one of the worst periods for financial markets

Net Inflows Asset Mix in 2011

Administered Assets

Managed Assets

-39

145

Jan2011 Feb2011 Apr2011Mar2011 May2011

-52

197

53

55

-10

79

26

56

(€ m)

Jun2011

-3

72


Total Monthly Net Inflows in 2011

24

Jan2011 Feb2011 Apr2011Mar2011 May2011

106

145

108

6982

Jun2011

69

(€ m)

Jul2011

75

Jul2011

60

15

Aug2011

59

Aug2011

68

-9

Sep2011

42

Sep2011

89

-47

Oct2011 2011 YTD

917

Oct2011

194

-32

2011 YTD

386

531

917

162

Nearly €1bnraised up to

October


Total assets proving resilient, despite a hit from financial markets

5.0 (22%)

2.9 (13%)

7.2 (32%)

1.6 (7%)

22.6

Mutual Funds/SICAV Life Insurance

Current Accounts Securities

9M11

Banca Generali Asset Breakdown

9M10

(€ bn)

5.9 (26%)

23.1

5.1 (22%)

3.4 (15%)

6.6 (29%)

1.7 (7%)

Portfolio Management

6.2 (27%)

-2.0%


-1.3%

-7%

+9.0%

-15.5%

-5.4%

Total assets were hit by the bad

performance of both equity and bond markets

in 2011 (particularly in 3Q11)

In addition to have been affected by the

market, Portfolio Management assets

suffered a switch towards life

insurance and Sicav

The level of managed Assets is stable at 71%

of total assets


Total BG Group

AUM already brought in Potential AUM AUM

Banca Generali hired 34

professionals since the start

of 2011

The average size of the advisors

portfolios decreased by 4% ytd

to €15.1 m due to the market hit

The company confirms a target of

recruiting for 2011 in line with

2010 levels (50 top professionals)

Banca Generali hired 34

professionals since the start

of 2011

The average size of the advisors

portfolios decreased by 4% ytd

to €15.1 m due to the market hit

The company confirms a target of

recruiting for 2011 in line with

2010 levels (50 top professionals)

N. FAs AUM (€m)

149

319

468

9M11 Recruiting Results

9

25

34

N° of FA

11.4 11.3-1%

9M11

32.229.7

-8%

9M11

9M11

15.715.1

-4%

9M11 AUM/FA

FY10

11.0

31.9

15.2

9M10

FY109M10

FY109M10

-7%

+3%

-1%

€m

Avg. AUM/FA€16.5 m

Avg. AUM/FA€13 m

Avg. AUM/FA€14 m


Recruiting – 9M11 results in line with year-end targets

€m


Today’s Agenda


9M 2011 Results

Closing Remarks

Business Update


Fonte:Assoreti, Bloomberg

-244

453

970773

1,360

1,743

1,246

686

2,076

1,270

917

207

242

949

509

316

-177

435

-400

-

400

800

1.200

1.600

2.000

2.400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(Oct)

Simgenia net inflows

Banca Generali net inflows

-8%MSCI World

Index*

*MSCI World index (MSERWI) annual performance in Euro

-13% -33% +9% +5% +24% +5% -3% -39% +23% +17% -9%

Banca Generali: a proven history of growth in any market conditions…

Business Update

(€ m)


1,246

686

1,270

2007 2008 2009 2010

ManagedAssets +Life

AdministeredAssets

o/w €1.5bnTax Shield

-25444

1,352

1,9361,500

642724

-666

TotalNet inflows

2,076

Business Update

…combined with the capability to switch assets at the right time …

917

531

386

Oct. 2011

BG has a proven track record in:

1. Raising new money in any market condition2. Switching assets into managed products once

markets stabilise

(€ m)


Business update

… through a consolidated strategy that does not need to be changed

GROWTH LONG TERMINVESTMENTS

QUALITY OF THE NETWORKS

1. Exploiting the increasing demand for financial advisory

2. Leveraging on the widest product offer

3. “Never going against the market” when advising

clients

BG Selection and Life Policies to combine

safety and growth of clients’ investments

The first requirement for advising clients well: high quality

people

The pillars of Banca Generali business strategy


Business update

The new deposit account offering4% gross on assets held for 1 year

A repo paying 3.30% net on new deposits held for 1 year

Stamp duty rebate for new securities transfer, 50% paid by BG

and 50% by financial advisors

An auto-callable struct. bond,yielding 7.3% for 2 years, thenlinked to a basket of Blue-Chips

Banca Generali has recently launched a series of new offers to meet

clients’ demand

Banca Generali strategy to face ongoing market volatility: Growth (1/2)

on New Money only

on New Money only

on New Money only

Structuredbonds

New products launched on Sept.19, 2011

Securities accounttransfer








Business update

The rationale behind the launch of BG Champion, the new deposit account of Banca Generali

Changes to the taxation of the financial

products in Italy

Tax rate from 27% to 20% for deposit

accounts

Launch of the new deposit account

Yield offered on new money:

6 months:

12 months:

Gross Net

3.0% 2.4%

4.0% 3.2%

Increase in the investors’ risk aversion and

demand for solutions from reliable companies

Generali’s rating (Aa-) is higher than Italy (A)

Proven capability to switch money from

liquidity to managed assets when

the outlook of financial markets improves

Banca Generali strategy to face ongoing market volatility: Growth (2/2)


Business update

A traditional life policy with capitalguarantee and assets invested in a segregated fund; yield at 3.8%

Management Fee of 100 bps in the 1st yr for new money only

A individual portfolio management line combining capital protection

with the exposure to emerging markets

Banca Generali strategy to face ongoing market volatility: Managed Products

Managed products remain core for theallocation of clients’ investments, and

Banca Generali is able to offer innovativesolutions combining market exposure

with capital protection






The pillars of Banca Generali business strategy40 multibrand sub-funds, o/w 22 are managed

by the best international asset managers

The offer is getting wider: 3 new sub-funds just launched in September


Business update

AUM/FA on June 30, 2011

Tools and services to support daily operations

Banca Generali strategy to face ongoing market volatility: Quality of the distribution networks

Banca Generali dedicates a great effortin selecting, training and supporting its

financial advisors withthe most advanced tools

Latest technology

tools

Advanced advisory tools

BG Private Banking

Gruppo BG

BancaGenerali

GruppoAzimut

AllianzBank

32.2

15.911.7 11.7 10.3

12.6

(€ m)







Source: Assoreti data, June 2011

Fideuram

16.4

Mediolanum

8.0

Average

11.0

FinecoBank


Business update

On-line presence makes significant steps ahead enhancing both service for the clients and financial advisors’ everyday operations

My BG is an ongoing process developed to offer clients a full range of banking, investment and trading services via web, smartphone and tablets

My BG is also developing new applications for the Financial Advisors to better serve their clients

Internet banking & trading online

“Online-only” option for all documentation

Mobile banking on smartphone

FEP on Tablet

applications to support FA’s activity with their clients

New

New

Widget fordesktop

New


Today’s Agenda


9M 2011 Results

Closing Remarks

Business Update


Closing Remarks

Results of Eurisko annual survey on Financial Advisors satisfaction of the 11 major networks

2,8

2,9

3

3,1

3,2

3,3

3,4

3,5

3,6

3,7

3,8

3,9

4

2003 2004 2005 2006 2007 2008 2009 2010 2011

at the top2°5°

3°

BG ranking bysatisfaction levelof the networks

1°

5°

1 year

1° 1°5°

3 years

1° 1°4°

5 years

1° 1°6°

Would you recommend your network to a friend?

1°

Do you plan to stay with Banca Generali for the next…

Ranking of Banca Generali by overall satisfaction

The FAs satisfaction is one of the key strengths to effectively

face market conditions

Ranking of Banca Generali by fidelization level

2009 2010 2011

2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011


Banca Generali is weathering the storm remaining anchored to 3 strong principles:

A thorough management of the operating costs

The ability to grow through a wider product mix

and through the attraction of new clients

and the capability to switch the assets at the right time

Closing Remarks

A clear focus on preserving a solid capital position

and a safe balance sheet

We don’t know how long the storm will last, but one thing is sure:

Banca Generali is a very safe harbour


Disclaimer

The manager responsible for preparing the company’s financial reports (Giancarlo Fancel) declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law of Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

G. Fancel, CFO

Certain statements contained herein are statements of future expectations and other forward-looking statements.

These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties.

The user of such information should recognize that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions.

Neither Banca Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document.

Investor Relations Contacts

Giuliana PagliariHead of Investor RelationsTel +39 02 6076 5548E-mail:[email protected]

Stefania GiordanoInvestor Relations TeamTel +39 02 6076 5534E-mail:[email protected]

Corporate Website

www.bancagenerali.comE-mail: [email protected]

9m11 results presentation 3 · market-related items 51.2 9m11 higher recurring items as a result of...

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