• Net Profit: EUR490 million, up 7.9% year-on-year for the first nine months of 2024.

• Revenue: EUR984.1 million, increasing by 7.3% year-on-year.

• Net Financial Income: Increased by 6.4% year-on-year.

• Investing Revenue: Up 11.7% year-on-year.

• Brokerage Revenue: Increased by 11.4% year-on-year.

• Operating Costs: EUR239.1 million, up 6.7% year-on-year.

• Cost-Income Ratio: 24.3%.

• Net Sales: EUR6.9 billion inflows in the first nine months of 2024.

• Common Equity Tier 1 Ratio: 27.3%.

• Leverage Ratio: 5.25%.

• Liquidity Coverage Ratio: 897%.

• Net Stable Funding Ratio: 369%.

• Investing Revenues: EUR268.6 million in the first nine months, up 11% year-on-year.

• Brokerage Revenues: EUR160.5 million in the first nine months.

• Risk-Weighted Assets: EUR4.69 billion.

• Cost of Risk: 7 basis points.

• Warning! GuruFocus has detected 4 Warning Signs with NEO.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• FinecoBank SpA (STU:ZS3) reported a net profit of EUR490 million for the first nine months of 2024, marking a 7.9% increase year-on-year.

• Revenues increased by 7.3% year-on-year to EUR984.1 million, supported by growth across all product areas.

• The bank's cost-income ratio was maintained at a low 24.3%, highlighting strong operating leverage.

• FinecoBank SpA (STU:ZS3) achieved a significant increase in new client acquisition, up by 26.5% compared to 2023, with October marking the best month since the bank's inception.

• The bank's capital position remains robust with a common equity Tier 1 ratio of 27.3% and a leverage ratio of 5.25%.

Negative Points

• Operating costs increased by 6.7% year-on-year, driven by expenses related to business growth, including Fineco Asset Management and marketing.

• Banking fees are expected to remain stable in 2024 but may see a slight decrease in 2025 due to new regulations on instant payments.

• The bank is delaying decisions on excess capital distribution due to anticipated higher-than-expected deposit growth.

• Investment margins are under pressure due to a shift in client interest towards short-term fixed income solutions.

• The bank faces a competitive environment with aggressive recruitment strategies from other players, potentially impacting its financial planner base.

Q & A Highlights

Q: Can you provide more details on the dynamics of new customer growth and their interaction with the platform? How quickly do they become active and profitable for the group? A: The client acquisition is highly efficient, with costs per client structurally below EUR100. Even clients with median deposits of EUR4,500 become profitable within a year. We are also seeing significant growth in private banking clients, up 40% year-on-year, who become profitable within three to six months. The strong client acquisition is also boosting interaction with our brokerage platform, contributing to robust brokerage results. Overall, the more clients we onboard, the higher the expected profitability of the bank.