Banca Generali (BGN) H1 2024 earnings summary

Executive summary

• Net profit for 1H 2024 reached €239.6 million, up 37% year-over-year, driven by strong recurring profits, robust commercial activity, and favorable market conditions.

• Recurring net profit was €170.4 million, with variable net profit surging to €69.1 million from €9.0 million in 1H 2023, supported by asset performance and positive financial markets.

• Client assets rose to €99.0 billion (+12% YoY), with net inflows of €3.6 billion (+11% YoY), and 70% from private clients.

• Entering the final phase of the three-year business plan, with positive fine-tuning of targets and increased confidence in exceeding inflow and profitability goals.

• 94 new recruits (+57% YoY), with a focus on younger talent, supporting business quality improvement.

Financial highlights

• Net banking income rose to €494.3 million (+26% YoY), with net financial income of €166.7 million (+3.3% YoY) and recurring net fees of €233.7 million (+4.6% YoY).

• Gross recurring fees increased 7.5% YoY to €514.5 million, with variable fees at €94 million and steady growth in management and advisory fees.

• Operating costs were €136.6 million (+7.3% YoY), with core costs at €121.8 million (+6.4% YoY), mainly due to BG Suisse setup and contract renewals.

• Cost/income ratio improved to 27.6% from 32.5% a year earlier, with adjusted ratio at 33.3.

• Total capital ratio closed at 23.7%, CET1 at 22.3%, leverage ratio at 5.9%, and strong liquidity metrics (LCR 333%, NSFR 216%).

Outlook and guidance

• Guidance for 2024 net inflows raised to over €6.5 billion, with 40–60% in assets under investment.

• Net interest income guidance for FY 2024 raised to €300 million, with stable net interest margin and client deposits.

• Management fee margin guidance increased to at least 1.42%.

• Cumulative dividend target for 2022–2025 increased to €8.0–€8.5 per share.

• Projected reduction in net interest income by 5%-10% in 2025 if Euribor drops by 100 basis points.