Earnings call transcript: FinecoBank Q2 2025 misses EPS forecast, stock dips

FinecoBank reported its second-quarter 2025 earnings with a slight miss on earnings per share (EPS) but a minor revenue beat. The company posted an EPS of €0.2434, falling short of the forecasted €0.2557, marking a 4.81% negative surprise. Revenue, however, came in at €313 million, slightly exceeding expectations. Following the earnings release, FinecoBank’s stock price decreased by 1.02%, reflecting investor concerns over the earnings miss. According to InvestingPro data, the company maintains a market capitalization of $2.27 billion and trades at a P/E ratio of 25.6x, suggesting premium valuation metrics relative to peers.

Key Takeaways

• EPS fell short of expectations by 4.81%, while revenue surpassed forecasts.
• Stock price declined by 1.02% post-earnings announcement.
• FinecoBank maintains strong capital and leverage ratios.
• AI initiatives and new product launches are set to drive future growth.
• Continued strong client acquisition and net sales growth.

Company Performance

FinecoBank’s performance in Q2 2025 was marked by steady revenues and a flat net profit of €317.8 million year-on-year. Despite the earnings miss, the bank’s strategic focus on digital innovation and customer acquisition has positioned it well within the financial sector. The addition of 100,000 new clients and net sales growth of 32% year-on-year underscore its competitive edge. InvestingPro analysis indicates the company is currently trading near its 52-week high, with analysts maintaining a positive outlook. For deeper insights into FinecoBank’s valuation and growth metrics, subscribers can access the comprehensive Pro Research Report, which covers over 1,400 US equities.

Financial Highlights

• Revenue: €644.4 million, slight year-on-year increase.
• Net profit: €317.8 million, flat year-on-year.
• Operating costs: €173.1 million, up 5.9%.
• Common Equity Tier One ratio: 23.5%.
• Leverage ratio: 5.2%.

Earnings vs. Forecast

FinecoBank’s EPS of €0.2434 missed the forecast of €0.2557, a 4.81% negative surprise. This miss contrasts with the revenue performance, which exceeded expectations at €313 million compared to the forecasted €310.67 million, resulting in a 0.75% positive surprise.

Market Reaction

Following the earnings release, FinecoBank’s stock price fell by 1.02%, closing at €18.88. This decline reflects investor sentiment reacting to the EPS miss, despite the revenue beat. The stock’s performance remains within its 52-week range, with a high of €19.67 and a low of €13.755. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. The company has demonstrated strong financial health, earning a "FAIR" overall rating from InvestingPro’s comprehensive scoring system.

Outlook & Guidance

FinecoBank anticipates record revenues for 2025, with operating costs expected to rise by approximately 6%. The bank projects a payout ratio between 70-80% and foresees net interest income growth starting next year. Upcoming initiatives include the launch of an AI-powered financial adviser network and expansion in ETF offerings.

Executive Commentary

CEO Alessandro Forte emphasized the bank’s growth dynamics and technological advancements: "FINECO is recording a sizable acceleration of its growth dynamics." Furthermore, Forte highlighted the role of AI in enhancing efficiency: "AI is going to contribute in increasing what is usually called by the market the jaws."

Risks and Challenges

• Potential market volatility affecting client investments.
• Rising operating costs impacting profit margins.
• Regulatory changes in fintech and digital banking.
• Competition in the financial advisory and ETF markets.
• Dependence on macroeconomic conditions and interest rate trends.

Q&A

During the Q&A session, analysts inquired about FinecoBank’s approach to crypto offerings and the potential for a recurring revenue model for ETFs. The bank expressed a cautious stance on crypto and highlighted its focus on recruiting young financial planners to drive future growth.

Full transcript - FinecoBank Banca Fineco SpA (FBK) Q2 2025:

Conference Operator: Good afternoon. This is the Kafka conference operator. Welcome and thank you for joining the Finiko Bank Second Quarter twenty twenty five Results Conference Call. As a reminder, all participants are in a listen only mode. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Mr. Alessandro Forte, CEO and General Manager of Finneco Bank. Please go ahead, sir.

Alessandro Forte, CEO and General Manager, Fineco Bank: Good morning, everyone, and thank you for joining our second quarter twenty twenty five results call. Before moving in the details of the presentation, let me stress that FINECO is recording a sizable acceleration of its growth dynamics, supported by very healthy underlying quality. Our growth is leveraging on our superior customer experience and on our fair and transparent positioning, not on short term aggressive offer. This approach is mirrored in the quality of our revenues mix, which is entirely recurring with a very low percentage of upfront fees and no performance fees at all. Later in the presentation, we will also share our industrial action to further accelerate our net sales and improve our mix through an AI powered network of financial advisers.

Let’s now move to the second quarter results. Net profit in the 2025 is €317,800,000 helmet flat year on year revenues at €644,400,000 supported by our non financial income investing up by 9.8 year on year, thanks to the volume effect and the higher control of the value chain by Finneco Asset Management And brokerage is up by 15% year on year, thanks to the enlargement of our active investors and higher market volumes. Operating costs well under control at €173,100,000 increasing by 5.9% year on year by excluding costs related to the growth of the business. Costincome ratio was equal to 26.9%, comparing operating leverage as a key strength of the bank. Moving to our commercial results.

The underlying step up in our growth dynamics gets crystal clear month by month. And for 2025, we expect a higher asset under management and deposit net sales compared to 2024. This is underpinned by the positive tailwinds from the structural trends, and we are leveraging on this solid momentum through more efficient marketing activity. The result of this acceleration has been clearly visible in the first six months of twenty twenty five. First of all, we had around 100,000 new clients, up by 36% year on year.

In July, new clients had around 50,000, up more than 20% year on year. Second, our net sales were €6,600,000,000 in the first half, up by a strong 32% year on year. In July, we are estimating total net sales for a further acceleration at around €1,100,000,000 up by 45% year on year. The mix was very positive with assets under management at around €400,000,000 net sales, up by around 35% year on year. Deposits were at around 300,000,000 and assets under custody at around €400,000,000 Brokerage recorded €19,000,000 estimated revenues.

Our capital position confirmed to be strong and safe with a common equity Tier one ratio at 23.5% and the leverage ratio at 5.2 On the right hand side of the slide, you can find the summary of our 2025 guidance more in detail. On investing revenues, every €1,000,000,000 change of assets under management on August 1 generates around €2,900,000 of management fees from August 1 until year end. Banking fees are expected in a slight increase versus 2024 due to new regulation on instant payments. On brokerage, we confirm 2025 expected revenue stronger with a continuously growing floor, thanks to the enlargement of our active investors. For 2025, we expect a record year for revenues.

For 2025, we expect operating costs to grow around 6% year on year, not including a few millions of additional costs for growth initiatives, in a range between 5,000,000 and €10,000,000 mainly for marketing, Finneco Asset Management and AI. Finally, in 2025, we expect a payout ratio in a range between 7080%. Let’s now move to the Slide five. As you can see in the P and L in the slide, we are now sharing a new P and L representation with the nonfinancial income being the sum of net commissions line and the trading profit line. This is aimed to better show the industrial nature of our trading profit, almost entirely represented by client driven brokerage revenues.

As announced, net profit in the first half of the year stood at €316,800,000 almost flat year on year revenues at 6 and €44,400,000 supported by 12% acceleration of the nonfinancial income, led by the solid contribution of the investing and brokerage business. This has almost offset the decline in interest rates. Operating costs at €173,100,000 well under control and increasing by 5.9% year on year, excluding costs strictly related to the growth of the business, mainly additional costs for Finneco Asset Management to further expand its business and have a higher control of the value chain additional marketing costs to further improve our growth and catch the strong momentum of the business. Artificial Intelligence has we are launching a project to further boost our network productivity. Let’s now move on the Slide six.

Investing revenues reached €191,900,000 in the 2025, increasing by solid 9.8% year on year on the back both of growing volumes, thanks to our best in class market positioning and of the higher efficiency of the value chain through Finneco asset management. Let me please remind you that the great quality of our investing revenues, mirroring our transparent and fair approach towards clients. Our revenues are mostly driven by recurring management fees with a very low upfront and no performance fees at all. Quarterly management fees dynamics are temporarily affected by lower average assets under management due to the negative market performance in MarchApril twenty twenty five. So this set of results is particularly remarkable given the more challenging market environment for the asset management industry.

Let’s move on to Slide seven. In this slide, we are representing the two main sources of growth for our investing business going forward. On one hand, Finneco asset management is progressively increasing the control of the investing value chain. Its contribution to the group net sales has been consistent over the cycle, thanks to its incredible time to market in delivering new investment solutions aligned with clients’ needs. The contribution of Phoenix asset under management, half of the total stock of assets under management, has been steadily growing and is now equal to 38.7%.

On the other hand, being a platform, FINEQ is the best place to catch the latest trends in terms of client investment behaviors. There is a clear change underway in the structure of the market with clients increasingly looking for quality, efficient and fair solutions. All of this is channeling strong demand towards advanced advisory services with no explicit fee with an explicit fee, where Fineco is by far the best positioned in Italy, as you can see down in the slide. Let’s now move on to Slide eight for a focus on brokerage. Brokerage registered a very strong first half with €128,400,000 of revenues, driven by our larger active investor base.

July was another solid month with €19,000,000 estimated revenues. Average revenues so far in 2025 are around 10.5% higher versus 2020, with much more healthier underlying dynamics. This is driven by the structure increasing clients’ interest to be more active in the financial markets and building up a clear bridge between the brokerage and investing world. The brokerage business represents the best sign of how fast the structural financial market is evolving, as technology is driving a swift change in client behaviors, thanks to higher transparency. For this reason, we consider the brokerage Italian market still very underpenetrated, and we are and we see a strong opportunity to grow despite already being the market leader.

Let’s now move to the Slide 10 for a focus on our capital ratios. Fineco confirmed once again a capital position available on the requirements on the wave of a safe balance sheet. Common equity Tier one ratio at 23.5% and leverage ratio is at a very sound 5.2%, while risk weighted assets were equal to €5,810,000,000 total capital ratio at 32.07%. As for the liquidity ratios, liquidity coverage ratio is over 900% and net stable funding ratio is over 400%, while the ratio high quality liquid assets on deposits is at 79%, well above the average of the industry. Going forward, we confirm that we will continue to generate capital structurally and organically, thanks to our capital light business model.

Given the strong acceleration in our growth, we are taking more time to have a clear view on deposit net sales going forward, as the underlying dynamics are strongly improving. If despite the strongest generation in our growth, there will remain excess capital, we will decide on the best way to return it back to the market. Let’s now move to Slide 16. Let’s now focus on our 2025 guidance. On investing revenues, every €1,000,000,000 change of assets under management on August 1 generates around €2,900,000 of management fees from August 1 until year end.

Banking fees are expected with a slight decrease compared to 2024 due to new regulation on instant payments. Brokerage revenues are expected to remain strong with a continuously growing floor, thanks to the enlargement of our active investors. For 2025, we expect record revenues. Operating costs are expected to grow at around 6% year on year, not including a few millions of additional costs for growth initiatives in a range between 5,000,000 and 10,000,000 mainly for marketing, Finneco Asset Management and AI. Cost income, we expect, hit comfortably below 30%, thanks to the scalability of our platform and to the strong operating gearing we have.

On the payout ratio, we expect a hit for 2025 in a range between 1780%. On leverage ratio, our goal is to stay above 4.5% level. Cost of risk was equal to six basis points, thanks to the quality of our lending portfolio, and we expect it in a range between five and ten basis points. Finally, we expect robust and high quality net sales with increasing assets under management and deposits close and the continued strong growth expected for our client acquisition, as we are in the sweet spot to keep on adding new market share. Let’s now move to Slide 17 for a deep dive on our growth opportunities.

Onico enjoys a unique market positioning to catch the long term growth opportunity resulting by the huge households’ wealth and the fast changing clients’ behaviors. In the graph, you can see the strong potential for our growth given the stock of financial wealth of the Italian families. Our market share is still small and the room to grow is huge. We are very positive on our future outlook as we have no competition on our market position. As a matter of fact, Finneco is the only big player with a service model truly based on transparency, efficiency and fair pricing.

Moving on Slide 18. The step up of our growth trajectory is clearly materializing, as you can easily see in our recent clients acquisition. On top of the slide, you can see the impressive acceleration of new clients, which is further building up in the 2025. This acceleration is very healthy because it’s based on the quality of our offer and not on an aggressive marketing campaign with a short term rates remuneration. As a result, all our new clients are improving the metrics of the bank by bringing more deposits or more business for our brokerage and investment solution.

This value is recognized by our clients, as shown by our customer satisfaction of 94% on our Net Promoter Score, way above the industry average, as you can see down in the slide. Let’s now move on to Slide 19. The cumulated growth of high quality new clients is translating into better net sales dynamics, shown by the 32% increase of our total net sales year on year. The same applies to our deposit growth, which before the investment is up 34 year on year. Let me remind that we see a sizable mix shift opportunity coming from the huge stock of Gonvys our clients bought over the last couple of years, given that a large percentage of this has a short term maturity.

This will give our financial planners an unprecedented opportunity to improve client mix into asset under management. In this regard, the bank has continued to enlarge the offer of investment solution. As an example, in September, a new and innovative private market solution by Finico Asset Management will be launched. Let me now hand to Paolo DiGrazia, Deputy General Manager and Head of Gothic Global Business to comment on Slide 20. Please, Paolo.

Thank you, Alessandro, and good morning, everybody. As you know, the financial industry is quickly heading into an inflection point and is going to be heavily reshaped by technology. Thanks to our deep internal know how and data control, Fineco is the only real player to be able to take massive advantage from it and to further accelerate our growth journey. This will be reached with our usual cost effective approach. Of course, we are planning to launch the launch of an efficient and pervasive AI implementation in two directions.

First, focusing on the productivity of our network of personal financial adviser and second, paying attention to the cost efficiency of the bank by reshaping completely the internal processes. While on the latter, we will update the market in the next months, we have already started to reengineer our financial adviser platform with the integration of an AI assistant. We will be it will be key enabler to boost our network productivity and deliver a better quality service to clients and ultimately improving our revenues growth via stronger net sales and asset under management. Let me stress that this is not a book of dream, but already it’s already a reality. Our very first initiatives are already live, used by more than 2,500 Personal Financial Advisor with more than 1,000 unique weekly log in.

And by the way, we have never seen in the past an adoption like this for a new application like this. Our financial planners have now in their hands a powerful AI assistant, which is going to be a game changer for wealth management. Below in the slide, you can see the main features of the AI assistant, among which is worth underlying the Portfolio Builder, which is a powerful tool to immediately create quality portfolio fed with Fineco financial logic and optimized on clients’ goals. The Portfolio Builder is also a content creator and a communication tool able to create professional and customizable reports, proposals, portfolio reviews, brochure automatically generating narratives and to support the financial planner. It’s also a powerful marketing tool allowing for comparison of existing portfolio of prospect clients.

It’s also a search tool, a faster info search process for internal memo and communication. So the next wave of artificial intelligence implementation will focus on CRM for our financial advisor and will be fully integrated with client data. It will empower our financial advisor to manage their agenda more efficiently, enabling a structured approach to client engagement and cross selling. By streamlining customer management and unlocking new commercial opportunity, this will represent a further step in enhancing productivity across our network and driving for an even stronger growth. And I will hand it back to Alessandro to move on Slide 21.

Thank you, Paolo. Let’s now focus on assets under custody. Let a component of our business that is sometimes undervalued by the market, but is the real cornerstone of our fee driven growth. This is true for investing as assets under custody remains the main source fueling our assets under management mix is. As you know, around 90% of our growth is organically driven.

As a consequence, new clients tend to show an asset allocation more oriented towards assets under custody, and the job of our financial advisers to improve their mix into assets under management. For brokerage, expansion of assets under custody and the growing base of active investors are key factors leading to a structurally higher flow in our revenues. Finally, in the fast growing ETF space, we are actively exploring new revenues opportunities, which we expand moving to Slide 22. Unique is uniquely positioned to capture the strong time driven shift towards more efficient investment solutions such as ETFs. As you can see, the stock of ETFs is now in excess of €13,000,000,000 ETFs now accounting for almost half of the asset under custody net sales.

Thanks to our focus on transparency, efficiency and fair pricing, we are the only player capable of fully recognizing and monetizing the structural trend. We’ve done no harm on our profitability. Furthermore, the growing interest in ATS is generating a positive volume effect for our investing business. Thanks to our advanced advisory WAPPAS, media ETFs, we can move in the investing world clients that are not interested in traditional mutual funds, thus with no cannibalization risk on the existing fund business. At the same time, our leadership in ETF retail flows make us the main gateway for issues into the Italian retail market.

While we currently manage all costs to enter clients without recurring revenues from ETFs, talks are underway with our partners to find a fair balance. Finally, Fini Cost Management is going to play a big role in the ATS world. Our Harish firm already launched its very first active ATS, and more are going to be introduced. Thank you for your time. We can now open the call to questions.

Conference Operator: This is the Chorus Call conference operator. We will now begin the question and answer session. Session. The first question is from Ruigi de Beulhos of Equita. Please go ahead, sir.

Ruigi de Beulhos, Analyst, Equita: Hi, good morning. I have three questions. The first one is on the EPS. So can you provide us an update on your strategy? In particular, where do you stand in terms of ongoing negotiation with ETF issuers?

How has the client appetite evolved in the recent months? And what is the current pipeline of FAM in terms of new active ETFs? The second question is on the NII and margins on management fees. So what we can expect for the coming quarters, in particular, on margins, considering the pipeline of new products, in private market and ETFs? And the last question on the crypto tokenization.

So can you give us an update also on your crypto strategy? We have seen some U. S. Players recently announced new product launches for European investors, including also U. S.

Stock and ETF tokens in Europe. So how is FINECO positioned in this space? And what opportunities and risks do you see from this trend? Thank you.

Alessandro Forte, CEO and General Manager, Fineco Bank: Thank you. So first of all, let me start by the update on the strategy in ATS. As we explained during the presentation, we are advancing in the process of making the ATS world a world characterized by recurring revenues. And we expect this is going to be finalized by the year end, beginning of next year. And so again, so ATS is going to become progressively more and more a business that is generating recurring fees.

So much more similar to the in terms of concept to the assets under management. The client appetite by the client is remaining robust and strong as is demonstrated by the fact that half of the net sales on the asset under custody is represented by TTS. This for sure, is absolutely a gigantic trend. And what is making the position of Fineco unique that considering the combination of an extremely very powerful, very well working platform together with the extremely advanced positioning we have in the advisory solutions in which clients are paying in advisory fees is making Ofineco the perfect place, the natural landing spot for everybody that is interested in being engaged with the ATS world. The pipeline of FAM on ATS is keeping on building up.

And so we expect that progressively, Finneo cost management going to start on playing an important role in this space. And but again, this is not I’m going back to looking to the example of what has been the journey of, for example, charge for in U. S. That they’ve started now offering ETFs to their clients and progressing their behavior to propose to their clients, not just the ETFs provided by the someone else, but the external counterparty, but also the ETFs. Regarding the on the NII, we expect NII bottoming and reaching the bottom within the year end.

And starting by next year, the NII is expected to keep on growing again. And this is going to be extremely healthy in terms of direction. It’s not going to be driven by, for example, hedging activities on the portfolio. So the bank is not taking any risk and view. We are going to keep on maintaining an extremely conservative approach with continuously lowering the duration and decreasing the interest rate sensitivity.

The growth of net interest income is going to be driven by clearly, there is a continuous process of building up of in terms of growth net sales. So in case, net interest income is expected to keep on growing again starting by the end of the year. And trends on margin, consumer ATS and private markets. At the moment, we are not factoring yet in the margins what we can expect to get by the private market because clearly we prefer to remain cautious. But we are quite optimistic on the evolution on this side.

The product is going to be launched at the beginning of the fall. And we think that considering the way it’s been structured, the extremely modern and innovative solution we’re bringing to clients, we expect a positive welcome positive acceptance by the clients. And so this clearly is going to be a quite and progressively an interesting contribution to the markets. ETFs, as we were we discussed several times in the past, are not really a trend on the margins because the ETFs are mostly used by the financial planners into the advisory wrappers and on which the clients are paying an explicit fees. And overall, the margins are not significantly different by the overall margins we have on the asset under management business.

So the ETFs are playing a role of being accretive in terms of revenues because they are helping in building up volumes, helping us in making our way in gaining market shares. And it is not a point of attention on the possible pressure on margins. Considering that Finneco as a starting point, the industry that is much more sustainable because Finneco has been only characterized by not overcharging clients and so on. But overall, at the moment, we’re remaining conservative. Our margins are expected to remain stable.

On the crypto and tokenization and the strategy and so on, I give the floor to Paolo in order to give a little bit more color on what’s going on there, our plans, what we can expect to happen. Yes. Basically, crypto, we are currently discussing with the regulators to have the permission to start offering cryptos on our platform. We see a lot of interest among our clients, but in general in the country with raising interest in cryptos. And so it’s a piece of the offering that we’re trying to put in the platform, but we don’t know yet when exactly because before we had to clear everything with the regulators.

And again, in talks in these days with the Italian regulators. We know very well that there are other banks that for example, from Germany that are offering cryptos also in Italy. And we know and we see our clients also using this platform to use to basically trade or have exposure mainly in Bitcoin and Ethereum in platform. Have that’s why we see this as a great opportunity for us. The moment we are going to be able to offer the service to our clients.

On the tokenization topic, it’s a huge topic. We know for sure that this is the future. So tokenization, in our view, every asset is going to be tokenized. The fact the important point is that to get a real advantage for the client to have tokenized assets, we need to have tokenization very spread around in the system. So not only Finneco offering tokenization assets, but also other counterparties and maybe the financial market.

And so for sure, one of the first big advantage that we can have even before the spreading of the tokenization technology is the fact that we can be much more effective in managing costs related to, for example, post trades activity, custody and so on. So it’s one main project that we have in our R and D projects. And we don’t see the tokenization far away here far away. It’s pretty much close. And so while we are also positive on the opportunities that we can extract from the tokenization of the assets, not all ETFs, of course.

Ruigi de Beulhos, Analyst, Equita: Thank you very much.

Conference Operator: The next question is from Alberto Villa of Intramond. Please go ahead, sir.

Alberto Villa, Analyst, Intramond: Good morning and thanks for taking my questions. I was wondering if you can provide us with the figure for the advanced advisory revenues for the 2025. And I’ve seen advisory fee assets sales grow still quite positive, but declining year over year. I was wondering if that’s due to the fact that the penetration is starting to increase. So how is the outlook in your view for the net sales and the advisory fee going forward?

And the second question is on the scenario for recruitment. Maybe if you can provide us with an update on the outlook for the industry and for Fineco in terms of how it’s going and if there is any pressure you see on the market on that point on that side? Thank you very much.

Alessandro Forte, CEO and General Manager, Fineco Bank: On the Advanced Battery revenues in the first half, the growth is clearly continuing. It’s so and we expect that this is going to be the case. So the main driver on the asset under management is going to remain driven by the advanced advisory platforms and also the building up of the usage of ATS inside that. And together with the extremely successful solutions provided by Finneco Asset Management that is incredibly consistent in capturing the emerging needs for the clients and transforming these in net solutions that are not available yet on the market. So the outlook for the net sales is remaining extremely strong.

We see the outlook keeping on accelerating going forward, thanks to the positioning and the positive macro environment characterized by short term rates at the low and the yield curve that is positively shaped. On the recruitment, there is no change, particularly significant change on the horizon. The situation is remaining pretty much unchanged. We have a part of the industry that is characterized by an approach in which very aggressive, in which they are clearly, the model is based on overpaying financial planners for convincing them in joining fees. And clearly, this is translated in then overcharging clients or going throughout, let me say, a little bit questionable market practices in order to maintain a decent payout a decent payback period for the market.

Clearly, this is not our model, never has been our model because always we consider this approach in which the growth is mostly driven by aggressive recruiting as not sustainable. And now considering what’s going on in terms of change of behaviors by clients, changing the structure of the market, this is even less sustainable. So our recruiting is continuously focused on taking onboard people that they are really convinced that the future of this industry is going to be a future which you have to go hand to hand with the evolution of the market, which fairness, transparency and convenience are going be key in the client choice. And so we absolutely progressing very well. Clearly, we are not interested in chasing at any cost the recruiting of our shop planners.

We are clearly extremely interested in keeping on hiring and preparing young financial planners for the future job because one of the main challenge for the industry is the hedging of the financial planners. And clearly, the market, it’s extremely easy to understand which kind of strategy is managed by the different companies because the higher is the average hedge of your financial planners and the more means that you are relying on aggressive hiring and of hold financial planners and the younger is the average age of your financial planners, it means that clearly you are looking to the future. So this more or less is the rationale.

Alberto Villa, Analyst, Intramond: Okay. Thanks. Sorry if I come back on the advanced advisory fees you cashed in the first half. Do you have any euro million number that to share with us on that?

Alessandro Forte, CEO and General Manager, Fineco Bank: No, we are not sharing these numbers.

Alberto Villa, Analyst, Intramond: Okay. Thank you.

Conference Operator: The next question is from Cristiana Holzdin from Bank of America. Please go ahead.

Cristiana Holzdin, Analyst, Bank of America: Good morning. Thank you for taking my questions. I have three of them. So firstly, on the opportunity within AI. So I know you flagged that it will improve revenue growth through productivity benefits.

Conference Operator: I was just wondering how

Cristiana Holzdin, Analyst, Bank of America: we should think about these revenue and cost benefits going forward? And then also, will there be further investment required in the near term as it seems as though only $600,000 of the 5,000,000 to $10,000,000 growth guidance has been spent on it so far? My second question was on the launch of the private market solution. Was just wondering if you could provide a bit more detail in terms of expectations here in terms of revenue opportunity, margin, client uptake. Do you think this will also make a material difference in the acceleration of the uptake in PAM products as well?

And then just any further comment on acceleration in new clients. It seems like this growth has been extremely strong and continues to be very strong. But yes, how much do you think this is driven by the heightened marketing spend? And how sustainable is this? Thank you.

Alessandro Forte, CEO and General Manager, Fineco Bank: Thank you for your questions. First of all, thank you for raising the point on the opportunity represented by the AI. So clearly, this as we started on sharing with the market, are preparing a plan, a new plan that is going to be presented to the market by the beginning of next year throughout an Investor Day, extremely very well structured. And clearly, in this new plan, clearly, have some cornerstones that they are going to be on which we are building the plan. So the first one clearly is represented by giving a sizable evidence of the incredible gigantic macro opportunity that is building up in our favor as a tailwind.

Because clearly, as we during the presentation, we explained that how still small is our market share. And so during in this presentation, we are going to give some more evident numbers represented by this quite significant macro opportunity we have. Another cornerstone is going to be represented exactly by the evolution of the way the bank is working driven by technology, AI. So in this regarding AI, we have two different directions. One is what has been mentioned and described by Paulo is related to increase progressively increasing the productivity of the network.

So increasing the productivity of the network in very simple words means increasing the amount of net sales, net sales of assets under management. And we think that there is an absolutely incredible opportunity because clearly, the way for making this business growing is not keeping on pushing and pushing in direction of recruiting and overpaying financial planners, but is to start on putting technology at work. The room for improving the productivity of financial planners is really huge. Also a few tens percentage points of increase of the productivity can represent an absolutely incredible numbers, without mentioning the incredible improvement of the quality of what the financial planners are going to do. So practically, more and more of our financial planners are going to have more and more time to spend in cultivating their relationship with their clients and putting even more focus on the marketing activity.

And clearly, this is going to be quite significantly positive for the evolution of our revenues, particularly on the investing side. Then there is another cornerstone related to AI. Clearly, this is going to be on, let me say, is internal, the efficiency, so cost. So the Finneco is in a unique position because when we are talking about AI, the real point is theoretically, AI is a commodity. Everybody can get access to AI.

The real point is but then you are really able to use AI successful. This depends on your capability on getting access to high quality and easily manageable base of data. And clearly, this is strictly related to the technological infrastructure you have. FINECO is among the financial institutions in Europe, probably one of the best positioned for really picking it with AI. So this means that we are going to go throughout an incredibly detailed and quite significant reshaping of all the processes internal processes of the bank.

And this is going to generate progressively more efficiency, but also to restart progressively the journey in keeping the costincome ratio moving down. So what is happening in terms of opportunity, AI for companies able to use that efficiently, it’s absolutely incredible. And so we expect and this is going to be embedded in the plan in which we are going to give to the market extremely detailed and precise indications. So we expect that AI is going to contribute in increasing what is usually called by the market at the jaws. So the progressive divergence between the revenues and cost, that this is very important in order to predict also the the expected return on equity of the bank.

And then there is another cornerstone that is not related to AI. All the initiatives that we are putting in place that are progressively are going to start on generating additional revenues on the for example, on the asset under custody side. As we explained, asset between custody is a gigantic opportunity for all the reasons we described, but there are some quite evident immediate evident ratios behind. There is everything related to the ATS world. ATS world, I want to repeat, are going to become more and more progressively a business generating recurring revenues.

And thanks to the combination of the better arrangements with the issues and the progressive better control of the value chain throughout Finneco Asset Management. And then rather, there are other evolution, like for example, just as an example, we are just at the beginning of the process of bidding at work our potential on the stock lending side that is gaining considering the significant dimension of the asset under custody. It’s very important. Paolo was describing what we the crypto world. So we are absolutely confident that at the end of the conversation, we are going to find the right way for offering to clients the crypto and there is a demand for sure by the clients, and there is a clear preference by clients in having this throughout and a trustful and established bank instead of using external platform.

So again, and so these are the and so just making so we expect a result of an accelerating generation of revenues and even better controlled cost and possibly driving the cost down going forward. And at the same time, significant improvements in terms of the contribution of components of the business like asset and the cash that, again, is wrongly not is wrongly considered as of with lack of values by the most part of the market. On the private market, think that Progressive is going to become an interesting source of additional revenues with absolutely very interesting margins and is going to become something that’s decently material going forward, particularly throughout next years. On the acceleration of new clients, yes, we think that the acceleration is driven by the as we said, by the perfect positioning of Fineco. The clients’ behaviors are clearly changing.

Clients are more and more looking for efficiency, transparency and convenience. This is driven by the combination of an evolving technological landscape, the generational change in which FINECO is the perfect landing spot for the new generation inheriting the wealth. And the higher marketing spending clearly is absolutely the right decision because when everything is favorable, this is the right moment in which you have to spend. So if you are a bank that is not correctly positioned, you have not exactly the right offer for what the clients are looking for and you are accelerating the marketing expenditure, this is just a pure waste of money. It’s exactly the opposite situation we have.

FINECO is exactly at the crossroad of the fastest emerging trends. And so this is the right moment for spending more. And so we remain absolutely confident of the continuation and further acceleration of that in terms of client acquisition.

Cristiana Holzdin, Analyst, Bank of America: Thank you.

Conference Operator: The next question is from Angeliki Vairachattari from JPMorgan. Please go ahead.

Angeliki Vairachattari, Analyst, JPMorgan: Good morning and thank you for taking my questions. Just two from me please. First of all, just a clarification with regards to the investing guidance that you gave. You do mention in the slide that for every EUR 1,000,000,000 change of AUM, you expect to generate around EUR 2,900,000.0 of management fees from August 1 until year end. And I think in the first quarter, you had for every €1,000,000,000 of change in AUM, you expect around €4,500,000 from May 1.

So I just wanted to understand, is it just a prorate calculate has your guidance changed at all in terms of the investing revenues? Or you have prorated for fewer months?

Alessandro Forte, CEO and General Manager, Fineco Bank: No. You are absolutely right. It’s just a matter of the prorata. So clearly, the guidance has not been changed at all. So it’s the change is clearly the more we approach the year end and the lower is the impact generated by an additional €1,000,000,000 by a move of €1,000,000,000 of asset under management less more or less.

So it’s just a recasting of the pro rata impact caused by the time passing.

Angeliki Vairachattari, Analyst, JPMorgan: Thank you very much for this. And then on the private markets product that you intend to launch through FAM, have you identified already some private markets asset managers that you intend to partner with to source those co investment and GP secondaries opportunities?

Alessandro Forte, CEO and General Manager, Fineco Bank: Yes. So the name is not is the Neuberberbank. Yes, this is the partner we choose.

Angeliki Vairachattari, Analyst, JPMorgan: Thank you very much.

Conference Operator: The next question is from Hugo Kruse from KBW. Please go ahead.

Hugo Kruse, Analyst, KBW: Hi, thank you for the time. Just wanted to ask on ETFs, Slide 22, very interesting. So I was wondering what percentage of ETFs in both the AUC net sales and AUM are from Fineco Asset Management? And now there’s the profitability of your internal ETFs compared to the other ETFs that you offer? And finally, on the Investor Day, will it also address the potential market entry into Germany and potentially other countries as well?

Thank you.

Alessandro Forte, CEO and General Manager, Fineco Bank: Yes, the percentage represented by the Financial Management product is still pretty small because we are it’s just at the beginning. Clearly, the more we are going to be able to make to have our clients buying the Finificos Managed ETFs, clearly, the more that we clearly we are going to take advantage by the control of the value chain because in the ETFs we own, clearly, is the profitability is not such as that. So it’s and clearly, by definition so we are what we you have you can expect on the TS world is, on one hand, the traditional ATS progression are going be characterized by generating recurring revenues throughout the arrangements that are underway with the big issues. And as we said, are confident that by year end, we’re going to start on enjoying the first positive outcome driven by these arrangements. And on the other side, clearly, the more we are going to be able to put in the portfolio of our clients, if Ineka has made it, yes, clearly, by definition, clearly, profitability is going to be at least double because we have not to share anything with someone else.

So it’s and yes, the Investor Day is going to be and is going to treat as well our plans for moving abroad. Yes, we are going to give more flavor, more color on that.

Hugo Kruse, Analyst, KBW: Thank you very much.

Conference Operator: Questions. Mr. Potti, there are no more questions registered at this time.

Alessandro Forte, CEO and General Manager, Fineco Bank: Thank you very much for attending our conference. Thank you for your extremely important interesting questions. As usual, if you need to make some more deep dive in our numbers, concepts and sound, please feel free to make us a call anytime. So thank you again, and talk to you soon.

Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

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