Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Banca Generali (WBO:BGN, Financial) achieved a record-breaking net profit of EUR 338 million for the first nine months of 2024.
- The company exceeded EUR 100 billion in total assets for the first time, with assets under management in Luxembourg surpassing EUR 22 billion.
- Net interest income reached a new record, contributing significantly to the company's financial performance.
- The financial advisory network expanded by 4%, with continued acceleration in recruitment activities.
- The strategic acquisition of Intermonte is expected to be a game changer, enhancing capabilities in brokerage, structured products, and investment banking.
Negative Points
- The company faced increased net provisions for liabilities and contingencies, including EUR 12 million for actuarial provisions.
- Operating costs were impacted by non-core items, including costs for early retirement incentives.
- The cost of funding remained stable, but there was an increase in client deposits and exposure to bank deposits.
- The tax rate slightly increased to above 25%, influenced by the strong contribution of performance fees.
- Despite strong results, the company anticipates a reduction in net interest income margins in the coming quarters.
Q & A Highlights
Q: Can you provide guidance on net interest income (NII) for the fourth quarter and next year?
A: We expect to deliver EUR75-77 million in net financial income for the fourth quarter, slightly lower than the third quarter. For next year, we maintain our previous guidance, projecting a margin on net interest income to decrease from 230 basis points at the end of September to around 180 basis points by the end of next year. We anticipate a slight increase in volumes, with a gradual reduction in yield margins starting this quarter.
Q: What is your tax rate guidance for this year and next year?
A: For this year, we expect the tax rate to be between 25% and 26%, slightly lower than our previous guidance due to a higher contribution from performance fees. For next year, we maintain our guidance in the range of 26% to 27%.
Q: Can you provide insights on the EPS accretion expected from the Intermonte deal and any cost synergies?
A: The Intermonte deal will be accretive, with a return higher than the cost of equity. Revenue synergies are extensive across three business areas, making it easier to internalize part of the value chain. While there are some cost synergies, the focus is on transformative revenue synergies, which we will detail further at our next market capital day.
Q: What are your thoughts on the recent tender offer from Banco BPM on Anima, and do you see any implications for the asset gathering sector?
A: The deal is of good quality and makes sense both financially and from a capital perspective. Our industry is gaining momentum, and I believe it is the place to be, given the steady growth and potential for further expansion. We might see interest from large groups, especially considering the potential decline in net interest income, making the asset gathering sector attractive.
Q: How do you view the strategic importance of the Intermonte acquisition for Banca Generali?
A: The acquisition of Intermonte is a game changer for Banca Generali, allowing us to insource strategic skills in brokerage, structured products, and investment banking. This will generate significant revenue on existing business lines and open new business opportunities, enhancing client and banker loyalty without impacting our expected dividend policy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
