Annual Integrated Report 2023

The Bank’s ability to grow did not impact its traditional capital solidity, which in fact continued to strengthen. Total Capital Ratio was 19.0%, or 6.7 pps above the specific capital requirement. In light of these results, the Board of Directors proposed to dis- tribute a 251 million euro dividend — the highest ever in the Bank’s history — totally paid in cash.

Last year’s good figures appear even more significant when considering that they were achieved in a challenging context. Central Banks’ restrictive monetary policies and the ensuing sharp yield increase, the US banks’ liquidity crisis, the Credit Suisse bankruptcy and growing geopolitical tensions were complex challenges for the entire asset management sector. This was in addition to the impact of a particularly difficult 2022 — one of the worst years for financial markets in more than half a century, with investors squeezed between double-digit negative returns of both shares and bonds and significant inflationary pressures.

Banca Generali succeeded in coping with this difficult scenario thanks to its flexible business model and its service model diversification strategy, including in particular the decision to focus on comprehensive advanced advisory to manage its Costumers’ overall wealth (both financial and non-financial). Once again, the quality of our Fi- nancial Advisors made the difference: the existing network’s productivity — which was already a distinctive feature of the Bank — further grew, generating more than 85% of the overall net inflows. This value reflects the excellence of our professionals and confirms the Bank’s competitiveness in a context where households increasingly demand specialised advisory services.

In addition to the results achieved, the year 2023 will also be remembered for the strategic shift towards international expansion. In fact, the Company received the banking licence to operate in Switzerland, which will make it possible to grow on both the Italian and Swiss markets, optimising its position in the private banking and wealth management sectors.

The significant growth achieved by the Bank also extended to its commitment to sus- tainability objectives. These efforts culminated in various recognitions, including the overall improvement of the ESG ratings assigned by the main international agencies and Sustainalytics’ confirmation of Banca Generali’s top position in the “Diversified Financial” segment.

Our approach to offering sustainable solutions remained one of our distinctive ele- ments and continued to meet with great attention amongst customers. Total ESG assets under Articles 8 and 9 of Regulation (EU) No. 2019/2088 both as direct invest- ment and as underlying of financial and insurance investment solutions exceeded 16 billion euros, equal to 37.6% of total managed solutions. The Bank offers sustainable strategies that range from trends such as the circular economy and sustainable and medical technology to new methods of digital communication and social impact ap- proaches. 

Banca Generali also formalised its participation in the UN Global Compact, with whose princi- ples it was already aligned. In accordance with the commitments made by signing the PRI and in compliance with leading market practices, the sustainable investment framework was further strengthened in 2023 through the adoption of the Active Ownership Policy, which defines the en- gagement and voting procedures with regard to the main issuers or funds under management in the portfolios of Banca Generali Group companies.

In addition, at the end of November 2023, the new Sustainable Advisor role was presented. This role is filled by selected, highly specialised Financial Advisors dedicated to supporting and re- inforcing the ESG commercial proposition and focused mainly on sustainable solutions. The in- itiative complements the path organised exclusively with MIP (Graduate School of Business of Politecnico di Milano), aimed at EFPA ESG Advisor certification, which involved 279 Financial Advisors in the past three years.

In 2023, particular attention was also paid to the Environment and Climate — a topic that was central to ESG training courses for Board members, Employees and Financial Advisors. Banca Generali’s commitment involves constant monitoring of the carbon footprint of direct investments and the relative emissions associated with the Bank’s operations. In confirmation of this, the pro- ject involving sustainable renovation of several branches and offices continued, with the goal of reaching a recycling rate (IRA) of > 95%.

With regard to sustainable commitments, the Company also implemented specific ESG due dil- igence relating to lending to companies engaged in high climate impact and high transition risk industries, as well as to all companies that have caused proved damage to the environment. As a re- sult, the approach already adopted with regard to investments was also applied to lending policies.

People and their development are a priority in the Bank’s policies. Over the years, the Company has developed a solid programme of training and activity measurement, which involves transparent revision of the remuneration, incentive, and performance management models, also linked to ESG objectives. Last year, particular attention was devoted to initiatives focusing on gender and on the development of young people. In 2023, under-35 new recruits accounted for over 70% of new hires.

Moreover, last October the Global Pulse Survey was conducted on all Banca Generali Group Em- ployees. The survey recorded a response rate of 94% and an engagement rate of 87%. Both rates grew compared to the previous edition, once more sending a positive, proactive message that con- firms the strong sharing of the Bank’s overall goals and values. A sense of belonging and a strong company culture focused on shared goals and values are certainly highly distinctive factors of our Bank.

I would also like to underline that internal control adequacy and reliability were further strength- ened, thanks to the implementation of various projects designed to guarantee that the Board of Directors has an increasingly complete vision of the Bank’s operations, fostering constant, con- structive dialogue among all the Bank’s corporate officers and ensuring that company decisions are strongly supported by all.

To conclude, I would like to thank all the Financial Advisors, Employees, the Chief Executive Of- ficer and his management team, whose work and dedication succeeded in turning a complex year into yet another year of extraordinary successes, growth, and value creation for all the Bank’s Stakeholders. I would also like to sincerely thank my colleagues, members of the Board of Direc- tors, and the members of the Board of Statutory Auditors for their constant commitment and for ensuring the expertise and vision that succeed, year after year, to bring Banca Generali towards increasingly ambitious objectives.