Banca Generali faces the next three years with the prospect of growing in three ways: in terms of size, income and shareholder remuneration. The strategy was communicated today after the meeting of the Board of Directors. Precisely starting from dividends, Banca Generali has indicated a distribution according to a cash view in constant growth over the course of the plan: based on profit forecasts, it expects to distribute 7,5-8,5 euros per share of cumulative dividends in the period 2022 -2025, of which 2,55 already announced. To try to reduce the volatility of dividends, the Bank has thought of greater flexibility in the payout, set at 70-80% on the share of recurring profits and 50-100% on the share of variable profits.
Recurring Earnings Up 10-15%, Commissions Up 7-10%
Predictions see recurring profits growing 10-15% in 2022-2024, based on recurring fees with a weighted average growth of 7-10%, driven by the greater expected weight of managed solutions, and among these come on home funds and come on insurance containers. For the interest margin the forecast is for a weighted average increase of 5-10% over the period of the 2022-2024 plan, mainly linked to the development of interest-bearing assets and the normalization of interest rates. In fact, a growth of at least €600 million is estimated at the loan portfolio level and an increase of at least €1,9 billion in financial assets. "We are preparing for a new phase of strong growth for our bank by enhancing our strengths: quality of professionals, innovation-oriented culture and commitment to sustainability" he said Gian Maria Mossa, Chief Executive Officer and General Manager of Banca Generali.
Assets under management and administration seen at 105-110 billion at the end of 2024
For the next three years, expectations are for a cumulative flow of net inflows between 18,0 and 22,0 billion, of which approximately 13-16 billion will be generated by the existing grid through an increase in share of wallet and acquisition of new clientele. Based on these growth estimates, it is expected that the assets managed and administered on behalf of customers will reach 2024-105 billion by the end of 110. In particular, the masses referred to the advanced consultancy contracts (representing 8,5% of total volumes at the end of 2021) are expected to grow in a range between 8,5%-10,5% in 2024. In terms of Costs, expectations are for a weighted average increase of 5-6%, including incisive investments in innovation and the development of activities in Switzerland.
The path towards the future Swiss bank continues, an expected asset contribution of 5-7 billion in 5 years
The dimensional growth plan also includes Switzerland, where a first safeguard has been established since 2019 with theacquisition of BG Valeur. The project was inevitably affected by delays following the outbreak of the pandemic but has now fully restarted, with the establishment of the new company BG Suisse – nucleus of the future bank in the country – after the formal requests to obtain the banking license. Activities on the Swiss market are expected to contribute 5,0-7,0 billion masses over five years.
2021 ended with record profits, with a dividend of €1,95
Banca Generali published closing data last week financial year 2021 with a net profit up by 18% equal to 323,1 million euros, the highest value ever. There was also strong growth (+15%) in recurring profit, which reached 176,6 million euro. Thanks to these results, the board of directors has proposed the payment of a total dividend of €1,95 per share, to be paid in May 2022 (€1,15) and February 2023 (€0,8) for a payout of 2021 earnings equal to 70,5%.
