Banca Generali closed the first quarter of 2016 with net inflows up by 34% and management fees up by 8,5%. However, profits declined significantly due to the loss of the contribution of trading and performance fee revenues in a complex market scenario.
In the note on the first quarter results, the company indicates that "the results of the first quarter of 2016 were achieved in a significantly different context compared to that of the corresponding period of last year but, despite this, they showed a continuous growth of the "core" activities of the bank, such as management fees". In particular, net inflows amounted to 1,5 billion at the end of March, +34% compared to a year earlier, rising to around 2 billion with the April data. Management fees rose to 116,7 million (+8,5%) thanks to the increase in managed assets.
However, the profit stood at 29,4 million against 93,1 of the previous year. “In terms of net results, the complexities of the markets, exogenous to the bank, have called for caution - explains Banca Generali in the note on the accounts - leaving little room for variable trading items and revenues from performance fees which instead benefited last year of the exceptional confidence generated by the extraordinary stimuli of central banks (72 million euros in the first quarter of 2015)". Last year the company had also benefited from revenues linked to financing transactions with the ECB. Factors which also had an impact on the drop in the intermediation margin which fell to 94,9 million euro from 180,5 million last year. The change is linked to the change in performance commissions, the normalization of trading activity and precisely the definitive end of the refinancing operations promoted by the ECB (Ltro). Net of the influencing factors (change in performance fees, normalization of trading activity and definitive Ltro), net recurring revenues remained stable at 79,5 million euro (80,7 million in the corresponding period of the last year).
Loans rose by 28% to 6,5 billion thanks to the "intense acquisition of new customers" and net operating costs rose by 4,4% to 43,3 million, an increase which is reduced to 2,2% at the net of the allocation of 0,9 million for the Single Resolution Fund commensurate with the contribution commitment of Banca Generali for 2016.
“Market conditions antithetical to last year, but growth in fundamentals accelerating thanks to a positioning of excellence with a unique service model available to highly experienced professionals – commented the General Manager of Banca Generali, Gian Maria Mossa – The extraordinary volatility in the first weeks of 2016 prompted caution, limiting the opportunities for variable items linked to price lists and their impact on the net result, but from the point of view of the "core" activity of our business it brought our consultants even closer to thousands of new savers who are responding positively to the bank's many innovative proposals. The signals from inflows are higher than our forecasts, also thanks to the appeal in the entries, and at this rate we believe there is room for a development of the same beyond the initial forecasts; with these premises we look with great enthusiasm and optimism to the prospects for the coming months”.
The total assets of the Banca Generali group as at 31 March 2016 rose by 13,3% to 6.930 million euro thanks to the strong development of deposits from retail customers during the period. The bank's capitalization remained at the levels of the end of 2015, reaching 14,1% in terms of Tier 1 Capital ratio and 15,7% in terms of Total Capital ratio.
