Banca Generali 1H 2025 presentation: Record recurring profit amid strategic expansion

Introduction & Market Context

Banca Generali (BIT:BGN) presented its first half 2025 financial results on July 29, showcasing record recurring net profit despite a challenging market environment. The Italian private bank, with a market capitalization of $6.4 billion, continues to strengthen its position through strategic partnerships and product innovations while maintaining robust capital ratios.

The stock showed minimal movement following the announcement, with shares edging up just 0.04% to €48.38, reflecting a neutral market reaction to results that largely met expectations. The bank’s shares have traded between €40.32 and €57.65 over the past 52 weeks.

Executive Summary

Banca Generali reported a recurring net profit of €176.3 million for the first half of 2025, representing a 3% year-over-year increase and reaching what the company described as its "best level ever." However, reported net profit declined 16% year-over-year to €200.2 million, primarily due to a significant reduction in variable fees.

As shown in the following executive summary slide, the bank achieved several key milestones in 1H 2025:

Total client assets reached €106.5 billion, up 8% year-over-year, setting a new record high. Net inflows totaled €3.0 billion, in line with the company’s targets, while the bank maintained robust capital and liquidity positions with a CET1 ratio of 17.6% and a liquidity coverage ratio of 329%.

The company also highlighted its strengthening business collaboration with parent company Assicurazioni Generali, including an insurebanking agreement with Alleanza signed in mid-July and plans to distribute selected banking products through Alleanza’s network starting in November 2025.

Detailed Financial Analysis

Banca Generali’s net profit performance shows a divergence between recurring and variable components. While overall net profit declined 16% year-over-year to €200.2 million, the recurring portion grew by 3% to reach €176.3 million. This divergence is clearly illustrated in the following breakdown:

The bank’s net financial income showed positive momentum, increasing 6% year-over-year to €177.0 million. Net interest income grew 3% to €161.7 million, while trading gains and other income contributed €15.3 million to the total.

Fee income presented a mixed picture. Total gross fees declined 3% year-over-year to €592.7 million, primarily due to a 55% drop in variable fees to €42.5 million. However, gross recurring fees increased 7% to €550.2 million, demonstrating the resilience of the bank’s core business model.

Operating costs increased 20.4% year-over-year to €164.4 million, with Intermonte’s integration contributing significantly to this growth. Excluding this contribution, core operating costs grew by 8.4% to €133.8 million. Despite the cost increase, the bank’s operating profit excluding performance fees showed a slight improvement of 0.8% to €265.9 million.

The comprehensive income statement provides a clear picture of the bank’s overall performance:

Balance Sheet Strength

Banca Generali maintained a strong balance sheet position, with total assets reaching €17.6 billion by the end of 1H 2025. The bank’s capital and liquidity ratios remain well above regulatory requirements, providing a solid foundation for future growth.

As illustrated in the following capital and liquidity ratios slide, the bank’s Total Capital Ratio stood at 19.7%, with CET1 contributing 17.6% and AT1 adding 2.0%:

The Liquidity Coverage Ratio remained robust at 329%, while the Net Stable Funding Ratio improved to 234%, demonstrating the bank’s strong liquidity position.

Strategic Initiatives

A key focus of Banca Generali’s strategy is strengthening its collaboration with parent company Assicurazioni Generali. The bank is accelerating its Financial Protection Advisory (FPA) model, with assets growing to €2.3 billion, representing a 7% increase year-to-date and 15% year-over-year.

The recently signed insurebanking agreement with Alleanza represents a significant strategic initiative. According to CEO Gianmaria Mossa, "Insure banking is an engine of future growth for the bank." The national rollout is scheduled for November 2025, with first results expected by the first half of 2026.

The integration with Intermonte, described by Mossa as a "game changer," is another strategic move that is expected to enhance the bank’s product offerings and market position.

Forward-Looking Statements

Looking ahead, Banca Generali aims to achieve €310 million in net interest income and maintain an asset management product range of 140-142 basis points. The bank expects operating costs to normalize to 6-7% growth in the next 2-3 years as the impact of the Intermonte integration is absorbed.

The bank is also planning to launch a new asset management product in October 2025, further expanding its product offerings. The strategic plan for 2026-2028 will focus on strengthening the partnership with Generali and capitalizing on the insurebanking initiative.

Despite economic uncertainties that could impact net inflows and asset growth, CEO Mossa expressed confidence in meeting targets, stating, "We are very confident to deliver on target." The bank’s strong capital position and strategic initiatives provide a solid foundation for navigating potential challenges in the financial services industry.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.