Banca Generali's first nine months of 2020 closed with a profit of 195,8 million, in line with what was achieved in the same period last year (196 million), which was particularly positive. The result showed a strong improvement in recurring items thanks to the expansion of the diversification and sustainability of revenues. However, this increase was, explains a note, partially absorbed by an increase in non-operating components - partly of an extraordinary nature - linked to contributions to bank funds (+53%), provisions (+45%) and taxation (+34%).
The financial results were driven by commercial performance, which a note defines as "brilliant" and which exceeded last year's levels despite the critical issues related to the Covid-19 pandemic. In fact, net inflows amounted to 9 billion in 4,1 months, up by 8% on an annual basis, while assets under management more than doubled to 1,8 billion (+111%), in the wake of growing demand for liquidity optimization consultancy. The positive dynamics of inflows and the careful and diversified management of assets contributed to the increase in managed and administered assets which reached a new high of 70,4 billion (+2% from the beginning of the year, +7% y/y).
Banca Generali's commercial and operational growth did not affect the traditional capital solidity which, on the contrary, improved further reaching a CET 1 ratio of 20,4% and the Total Capital Ratio of 21,7%, well above the levels specific requirements established for the company by the Bank of Italy, as part of the periodic supervisory review and evaluation process (SREP). Operating income rose to 447,4 million (+10%). The increase was driven by all the lines of contribution and in particular by the growth in the financial margin (77,1 million, +22%) and in net recurring commissions (269,8 million, +8%). The contribution of variable commissions was also positive (100,4 million, +4%) linked to the dynamics of the financial markets.
“Growth and quality are the synthesis of a result of which we are very proud – he commented the managing director Gian Maria Mossa – , which saw significant growth in total assets, investments in asset management and insurance solutions and assets under advanced advisory services also thanks to an acceleration in inflows compared to last year. All the main revenue components are clearly improving and costs are under control. Never before have the strong commitment and great quality of our bankers and the important work of all our colleagues in the office strengthened our image with customers, transmitting closeness and professionalism. Concerns about the evolution of the pandemic fill the prospects for the next few months with uncertainties, but the great efficiency in operational management, the innovation in managed solutions, and the positive responses that continue to arrive from families, make us confident for the last part of the year where we count on continuing to grow sustainably, at a faster rate than our reference market”.
Banca Generali also has received positive reviews from analysts. In fact, the growth in revenues, profits and assets benefited the private bank confirmation of the "Buy" judgment by Goldman Sachs. The American bank's Equity Search team also revised the target price of the stock upwards, bringing it to 31 euros per share. Above all, the generous dividend policy for 2021, a key argument for investors in this market phase, prompted the positive assessment. During the conference call, the CEO Gian Maria Mossa in fact confirmed his intention to disburse both the entire 2019 dividend (currently frozen by the recommendations of the ECB and Bank of Italy) and the minimum one linked to the 2020 financial year for a total and at current volumes it should be around 11% of the capitalisation.
Goldman Sachs analysts also welcomed the recovery in recruiting activity and the confirmation of guidance for 2021 announced at the last Investor Day. Positive judgments also from Mediobanca, which raises the target price to 28 euro from the previous 26.5 euro, and from Equita which brings it instead to 29.3 euro per share.
Meanwhile, still in the Generali world, Generali Italia has launched the Attiva Welfare solution, to reaffirm its support for entrepreneurs, helping them to protect the health of workers and the business of the company. Attiva Welfare is a modular, simple, economic and immediate solution: provides simple but content-rich offers at a reduced and predefined cost, dedicated to all employees, without any exclusion, and with the possibility of extending coverage to the family unit. "It is a tool - explains a note - to protect the health and well-being of company workers and to support the construction and design of a complete corporate welfare plan, through the offer of services and benefits".
As demonstrated by the Welfare Index PMI 2020 Report, in fact, welfare makes the company grow in terms of productivity and employment; companies with a more mature welfare system have had a greater ability to react to the emergency and have been a point of reference for the community. “We are convinced – he commented Marco Sesana, Country Manager & CEO of Generali Italia and Global Business Lines – that welfare is strategic for the growth of businesses and the country. This is even more true today, in light of the new context we are facing. Protecting the health and well-being of workers is one of the keys to guaranteeing business continuity. Today we want to provide concrete support to entrepreneurs by providing them with a simple and inexpensive solution, dedicated to all workers and their families, also with a view to supporting the community. This is being a Life Partner: today it means acting because Together We Generate Trust”.
