From a macroeconomic and geopolitical standpoint, 2016 was a complex year that included some significant events that I would not hesitate to characterise as historical in scope.
However, the most important event for the Bank was the untimely passing of Chief Executive Officer Piermario Motta, who since 2005 had been the driving force behind the Company’s strategic and business transformation, leading it to become one of the most prestigious and dynamic companies in the Italian financial industry.
Our first thoughts and our most heartfelt gratitude go out to him. Despite his loss, the Bank has not relented from the pursuit of excellence on which it embarked under his leadership. Indeed, thanks to the commitment and dedication shown by its management – starting with Gian Maria Mossa, who took up the challenge with a sense of responsibility and determination – employees and network personnel, this process has continued with renewed vigour, allowing the Bank to reach ambitious new milestones.
In 2016, assets grew considerably and an even stronger strategic focus on financial planning and wealth management services further strengthened the number-one private bank listed on the Italian stock exchange. The Bank’s commitment to quality and innovation put it on the front lines of the challenges posed by MiFID II and the market in which it operates.
Against the backdrop of a general decline in networks during the year, Banca Generali stood out for its dynamic performance, with a 22% increase in net inflows, which reached a new record of 5.7 billion euros. Managed assets and assets under administration and custody rose by 14% to 47.5 billion euros and the Bank outpaced all of its major competitors in terms of the increase in the number of its Financial Advisors, who continued to lead the market in terms of expertise, productivity and portfolio size.
Financial advisory plays a central role in the Bank’s strategy, in the light of the constantly changing legislative scenario, which, on paper, will result in significant changes to the approach to financial instruments in Europe.
The development of the new, broader service model is aimed at optimally – and even more thoroughly – satisfying the changed needs of Italian households in protecting and building their wealth. The commitment over the past two years to developing a cutting-edge advanced advisory platform and solutions is yielding very interesting results that bear out the validity of the Bank’s strategic decisions. Wealth management expertise is being extended to new advisory areas: real estate, generational transfer, corporate finance, art advisory, and family office, resulting in a unique range of services that increases the Bank’s potential for tomorrow.
The priority assigned to growth – fundamental in a sector in which size is important to increase the sustainability of results in the long term – has not distracted attention from earnings results and capital solidity. The profit for the year of 155.9 million euros was supported by a constant increase in recurring fees, which grew for the fifth consecutive year, bearing witness to the quality and sustainability of the business model, even when financial markets are less than favourable, constrained by fears of an economic slowdown in Asia and geopolitical uncertainties relating to elections.
Even more significant is the strengthening of the Company’s capital position, compared with a scenario of increasing weakness of the banking industry as a whole. The CET1 ratio increased by 240 basis points to 16.7% and the Total Capital Ratio by 250 points to 18.4%. Banca Generali is thus one of Italy’s most solid, well-capitalised companies.
On the basis of this result, a dividend payout of 125 million euros (1.07 euro per share), or 80% of net profit, has been proposed, continuing the Bank’s traditional emphasis on compensating its shareholders with one of the most generous dividend policies on the market.
Its strong capital solidity, combined with clear strategic decisions, the benefits of which will become increasingly evident starting this year, further supports the expectation that the Bank’s growth process will continue to gain speed in the coming years. All of this would not be possible without the commitment of the Bank’s employees, Financial Advisors and management, to whom I extend my most sincere gratitude, in the hope that I will always be able to count on their dedication and enthusiasm in growing this most extraordinary company – Banca Generali.