ANNAUAL
INTEGRATED
REPORT
2019

Financial Highlights

0M
NET AUM AND INSURANCE INFLOWS +25.6%
0M
NET INFLOWS +2,2%
0M
NET PROFIT +51,1%
0B
AUM +20%
0M
COMMISSIONI NETTE +34,1%
0M
NET EQUITY +24,9%
0M
OPERATING RESULT +41,1%
0%
TIER 1
0
EMPLOYEES OF WHOM 49% WOMEN
0%
SMART WORKING
0%
CO2 EMISSIONS (SCOPE 1: 276t / SCOPE 2: 935t)-16% VS. 2013
0M
GROSS GLOBAL ADDED VALUE DISTRIBUTED

Letter to Stakeholders

Dear Stakeholders,

2019 was an exciting year for the Bank, in terms of the numerous initiatives launched, as well as the
growth and the results achieved. During the year, the first steps were taken under the 2019-2021
Strategic Plan, with faster progress in many key areas and confirmation of the main objectives.

Despite a very positive overall performance, the market scenario was not entirely linear throughout the year: in fact, in early January and February 2019, it was extremely volatile, in continuity with the end of the previous year.

Read more

Giancarlo Fancel
CHAIRMAN

Performances

The Group closed 2019 with consolidated net profit of 272.1 million euros (+51.1%, the best result in the Bank’s history) and total assets reaching a new all-time high at 69.0 billion euros, thanks to the contribution of robust net inflows (5.1 billion euros), the positive effect of market performance (+4.2 billion euros) and the assets under management (2.2 billion euros) resulting from the acquisition of the Nextam Partners Group and the Swiss company BG Valeur S.A.

Among managed products, in particular, mention should be made of the excellent results achieved by the new sub-funds of the Luxembourg-based Sicav Lux IM, launched in April 2018, which reached an AUM volume of 10.7 billion euros (including data referring to institutional investors), marking an increase of nearly 67% on the end of the 2018.

With reference to capital, Banca Generali confirmed the soundness of its regulatory aggregates. CET1 ratio stood at 14.7% and Total Capital ratio was 16.1%.

(MILLION €) 31.12.2019 31.12.2018 CHANGE %
Net interest income 74,0 60,0 23,4
Net income (loss) from trading activities and dividends 14,2 24,1 -41,2
Net fees (c) 489,8 365,3 34,1
Net banking income 578,0 449,4 28,6
Staff expenses -97,2 -84,2 15,4
Other net general and administrative expenses -162,7 -162,5 0,1
Amortisation and depreciation -30,0 -9,3 222,1
Other operating income and expenses 68,7 59,4 15,6
Net operating expenses -221,1 -196,6 12,5
Operating result 356,8 252,8 41,1
Provisions -24,3 -25,4 -4,2
Adjustments -5,4 -7,3 -26,1
Profit before taxation 325,3 219,8 48,0
Net profit 272,1 180,1 51,1
Net interest Net income Net banking income
TOTALS 74,015 489,810 577,998
CORPORATE CENTER 58,577 78,525 151,295
CGU PRIVATE BANKING 10,247 287,395 297,642
CGU WEALTH MANAGEMENT 5,192 123,890 129,061
Current accounts and demand deposits 9,982,548 (thousand €)
Financing 116,218 (thousand €)
BG GROUP Y/Y CHANGES VS 31.12.2018
(€ MILLION) 31.12.2019 31.12.2018 AMOUNT %
BG Group Funds and Sicavs 1,059 -130 1,189 +915%
Funds and Sicavs 583 916 -333 -36%
Financial wrappers -322 -78 -244 -313%
Insurance wrappers 544 1,040 -496 -48%
Total assets under management 1,864 1,748 116 +7%
Total traditional life insurance policy 935 480 455 +95%
Total assets under administration and custody 2,331 2,792 -461 -17%
Total assets placed by the network 5,130 5,020 110 +2%

Financial statements

(€ THOUSAND) 31.12.2019 31.12.2018
10. Cash and deposits 525,400 1,012,891
20. Financial assets at fair value through profit or loss: 64,998 90,640
a) HFT financial assets 18,298 33,887
c) other financial assets mandatorily measured at fair value 46,700 56,753
30. Financial assets at fair value through other comprehensive income 2,778,836 1,987,315
40. Financial assets at amortised cost: 7,703,082 6,174,298
a) loans to banks 627,247 442,659
b) loans to customers 7,075,835 5,731,639
50. Hedging derivatives 4,727 -
70. Equity investments 2,061 1,661
90. Property and equipment 164,219 6,724
100. Intangible assets 134,135 95,110
of which:
- goodwill 86,919 66,065
110. Tax receivables: 51,168 52,799
a) current 3,673 81
b) prepaid 47,495 52,718
130. Other assets 336,950 314,456
Total assets 11,765,576 9,735,894
(€ THOUSAND) 31.12.2019 31.12.2018
10. Financial liabilities at amortised cost: 10,503,986 8,675,596
a) due to banks 94,807 128,725
b) due to customers 10,409,179 8,546,871
20. HFT financial liabilities 1,204 384
40. Hedging derivatives 7,481 -
60. Tax liabilities: 13,618 18,018
a) current 1,690 11,734
b) deferred 11,928 6,284
80. Other liabilities 147,097 142,176
90. Employee termination indemnities 5,153 4,831
100. Provisions for liabilities and contingencies: 169,369 160,014
a) commitments and guarantees issued 108 86
b) pensions and similar obligations 3,854 -
c) other provisions 165.407 159.928
120. Valuation reserves 3,813 -11,636
140. Equity instruments 50,000 -
150. Reserves 454,465 414,368
160. Share premium reserve 57,729 57,889
170. Share capital 116,852 116,852
180. Treasury shares (-) -37,356 -22,724
190. Net equity attributable to minority interests (+/-) 26 -
200. Net profit (loss) for the year (+/-) 272,139 180,126
Total net equity and liabilities 11,765,576 9,735,894
(€ THOUSAND) 2019 2018
10. Interest income and similar revenues 82,861 66,419
20. Interest expense and similar charges -8,846 -6,447
30. Net interest income 74,015 59,972
40. Fee income 881,014 741,666
50. Fee expense -377,875 -353,616
60. Net fees 503,139 388,050
70. Dividends and similar income 2,891 2,308
80. Net income (loss) from trading activities 5,606 5,291
90. Net income (loss) from hedging 18 -
100. Gain (loss) on disposal or repurchase of: 5,839 16,042
a) financial assets at amortised cost 315 2,606
b) financial assets at fair value through other comprehensive income 5,524 13,436
110. Net income (loss) from financial assets and liabilities at fair value through profit and loss: -181 478
b) other financial assets mandatorily measured at fair value -181 478
120. Net banking income 591,327 472,141
130. Net adjustments/reversals due to credit risk relating to: -5,387 -7,286
a) financial assets at amortised cost -5,591 -5,001
b) financial assets at fair value through other comprehensive income 204 -2,285
150. Net income (loss) from trading activities 585,940 464,855
190. General and administrative expenses: -259,900 -246,721
a) staff expenses -97,219 -84,227
b) other general and administrative expense -162,681 -162,494
200. Net provisions for liabilities and contingencies: -37,610 -48,079
a) commitments and guarantees issued -22 118
b) other net provisions -37,588 -48,197
210. Net adjustments/reversals of property and equipment -20,145 -1,559
220. Net adjustments/reversals of intangible assets -9,810 -7,742
230. Other operating expenses/income 68,706 59,437
240. Operating expenses -258,759 -244,664
250. Gains (losses) from equity investments -1,605 -149
280. Gains (losses) on disposal of investments -262 -282
290. Profit from operating activities before income taxes 325,314 219,760
300. Income taxes for the year on operating activities -53,192 -39,634
310. Net profit from operating activities after income taxes 272,122 180,126
330. Net profit for the year 272,122 180,126
340. Net profit (loss) for the year attributable to minority interests -17 -
350. Net profit (loss) for the year attributable to the Parent Company 272.139 180.126
(€ THOUSAND) 2019 2018
10. Net profit for the year 272,122 180,126
Other income net of income taxes, without transfer to Profit and Loss Account
20. Equity securities at fair value through other comprehensive income -300 -
70. Defined benefit plans 82 -52
Other income net of income taxes, with transfer to Profit and Loss Account
110. Exchange differences 3 -18
140. Financial assets (other than equity securities) at fair value through other comprehensive income 15,826 -25,617
170. Total other income net of income taxes 15,611 -25,687
180. Comprehensive income 287,733 154,439
190. Consolidated comprehensive income attributable to minority interests -8 -
200. Consolidated comprehensive income attributable to the Parent Company 287,741 154,439
SHARE CAPITAL RESERVES
(€ THOUSAND) A) ORDINARY SHARES B)OTHER SHARE PREMIUM RESERVE A) RETAINED EARNINGS B)OTHER VALUATION RESERVES EQUITY INSTRUMENTS INTERIM DIVIDENDS TREASURY SHARES NET PROFITY (LOSS) FOR THE YEAR NET EQUITY GROUP NET EQUITY NET EQUITY ATTRIBU- TABLE TO
MINORITY INTERESTS
Net equity at 31.12.2018 116,852 - 57,889 395,222 19,146 -11,636 - - -22,724 180,126 734,875 734,875 -
Change in opening balances - - - -9 - - - - - - -9 -9 -
Amount at 01.01.2019 116,852 - 57,889 395,213 19,146 -11,636 - - -22,724 180,126 734,875 734,875 -
Allocation of net profit for the previous year: - - - 35,226 - - - - - -180,216 -144,900 -144,900 -
- Reserves - - - 35,226 - - - - - -35,226 - - -
- Dividends and other allocations - - - - - - - - - -144,900 -144,900 -144,900 -
Change in reserves 27 - - 20 653 -153 - - 1 - 548 514 34
Transactions on net equity: - - -160 - 4,214 - 50,000 - -14,633 - 39,421 39,421 -
- Issue of new shares - - -160 - -2,993 - - - 3,153 - - -
- Purchase of treasury shares - - - - - - - - -17,786 - -17,786 -17,786 -
- Interim dividends - - - - - - - - - - - - -
- Extraordinary dividends - - - - - - - - - - - - -
- Change in equity instruments - - - - - - 50,000 - - - 50,000 50,000 -
- Derivatives on treasury shares - - - - - - - - - - - - -
- Stock options - - - - 7,207 - - - - - 7,207 7,207 -
- Change in ownership interests - - - - - - - - - - - - -
- Comprehensive income - - - - - 15,611 - - - 272,122 287,733 287,741 -8
Net equity at 31.12.2019 116,879 - 57,729 430,459 24,013 3,822 50,000 - -37,356 272,122 917,668 917,642 26
Group net equity 116,852 - 57,729 430,452 24,013 3,813 50,000 - -37,356 272,139 917,642 - -
Net equity attributable to minority interests 27 - - 7 - 9 - - - -17 26 - -
(€ THOUSAND) 2019 2018
A. OPERATING ACTIVITIES
Operations 234,634 157,258
Net profit (loss) for the year 272,122 180,126
Gain/loss on HFT financial assets and other assets and liabilities at fair value through profit or loss 402 -1,300
Gain/loss on hedging assets -18 -
Net adjustments/reversals due to credit risk 5,387 7,286
Net adjustments/reversals of property, equipment and intangible assets 29,955 9,301
Net provisions for liabilities and contingencies and other costs/revenues 5,539 9,568
Taxes, duties and tax credits not paid -12,997 -10,026
Adjustments/Reversals of discontinued operations - -
Other adjustments -65,756 -37,697
2. Liquidity generated by/used for financial assets (+/-) -2,220,111 -295,791
HFT financial assets 17,686 5,790
Financial assets at fair value - -
Other financial assets mandatorily measured at fair value 8,774 23,986
Financial assets at fair value through other comprehensive income -756,231 947,451
Financial assets at amortised cost: -1,480,277 -1,327,680
Loans to banks -181,070 -65,877
Loans to customers -1,299,208 -1,261,803
Other assets 10,063 54,661
3. Liquidity generated by/used for financial liabilities (+/-) 1,656,845 759,278
Financial liabilities at amortised cost: 1,651,567 808,485
Due to banks -34,278 -551,413
Due to customers 1,685,845 1,359,898
Securities issued - -
HFT financial liabilities -384 -206
Financial liabilities at fair value - -
Other liabilities 5,662 -49,001
Net liquidity generated by/used for operating activities -328,632 620,745
B. INVESTING ACTIVITIES
1. Liquidity generated by - -
Disposal of equity investments - -
Dividends received - -
Disposal of property and equipment - -
Disposal of intangible assets - -
Disposal of business units - -
2. Liquidity used for -46,174 -13,036
Purchase of equity investments -2,002 -
Purchase of property and equipment -3,175 -1,995
Purchase of intangible assets -14,290 -11,041
Purchase of business units and equity investments in subsidiaries -26,707 -
Net liquidity generated by/used for investing activities -46,174 -13,036
C. FUNDING ACTIVITIES
Issue/purchase of treasury shares -17,785 -12,841
Issue/purchase of equity instruments 50,000 -
Distribution of dividends and other -144,900 -145,474
Net liquidity generated by/used for funding activities -112,685 -158,315
NET LIQUIDITY GENERATED/USED IN THE YEAR -487,491 449,394
Reconciliation
Cash and cash equivalents at year-start 1,012,891 563,497
Total liquidity generated/used in the year -487,491 449,394
Cash and cash equivalents – effects of exchange rate fluctuations - -
Cash and cash equivalents at year-end 525,400 1,012,891

Sustainability

For the eleventh consecutive year, Banca Generali has decided to report its performances relating to topics of a strictly non-financial nature, in further confirmation of the fact that, for Banca Generali, sustainability is an important strategic lever capable of creating value over time.

The Bank believes that adopting this reporting approach will allow it to further consolidate the process of creating internal awareness of sustainability topics and communicating its strategy for creating value in the short, medium and long term, for the benefit of the Bank’s internal and external shareholders, in an increasingly effective and transparent manner.

Banca Generali and the environmental issues

Direct (scope 1) 276 tCO2eq
Indirct (scope 2 e 3) 1.127 tCO2eq

100% eletctricity
from renewable sources

90% white paper
green and certified

+4% unsorted waste collected
vs 2018 (in weight)

Banca Generali and its People

49% women | 51% men
950 employees

48.021 total
training hours

4.715 days
of smart working

Average
employee age

Banca Generali Banca Generali and its suppliers

1.767
suppliers

32 suppliers
vs 2018

102 million euros
in purchases

93% of the procurement value towards Italian suppliers

Banca Generali and its customers

299.090
customers

€ 66,8
billion euros

20% of customers
with at least 4 products

Over 500
events organized

Banca Generali and the Distribution Network

2.040 financial advisors
18% women | 82% men

32,8 million euros
managed on average by each Financial Advisor

122.696 total
training hours

2,5 millions euro
per-capita net inflows

2020 TARGET

-25%

PER CAPITA ELECTRICAL POWER
consumption

-25%

NATURAL GAS AND DIESEL OIL
consumption

-15%

PAPER consumption

(95% of ecological paper )

-15%

WATER
consumption

2018-2019 GHG EMISSON BREAKDOWN (%)

2018

2019

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