This article first appeared on GuruFocus .
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Net Profit:EUR179 million, highest level ever.
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Total Assets:EUR121 billion, highest level ever.
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Net Inflows:EUR4.4 billion, highest level ever for the first half.
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Recurring Net Profit:EUR180 million.
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Variable Net Profit:EUR43.6 million, including a EUR20 million tax charge.
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Net Financial Income:EUR97 million.
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Net Interest Margin:1.96%.
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Total Gross Fees:EUR741 million for the first half.
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Gross Recurring Fees Margin:1.07%.
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Investment Fees:Strong growth, with Q2 at EUR258 million.
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Other Fees:EUR90 million for the first half.
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Payout Ratio:35.5%, slightly lower than the 36% target.
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Operating Costs:Slightly higher than guidance at 8%.
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Operating Leverage:Best result at 0.27% on total assets.
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Capital Ratio:19%.
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Leverage Ratio:5.7%.
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Total Net Interest:EUR4.4 billion.
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Advanced Advisory Fees Business:Exceeded EUR13 billion.
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In-House Products:Over EUR30 billion, 53.2% of total managed solutions.
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Net Inflows Target:Increased to EUR7.5 billion for the year.
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Tax Rate Guidance:27-28% for the midterm.
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Release Date: July 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Banca Generali ( WBO:BGN ) reported its best-ever first-half results with a net profit of EUR179 million.
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Total assets reached a record high of EUR121 billion, with net inflows also at a record EUR4.4 billion.
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The company saw double-digit growth in all revenue components, including net financial income and gross fees.
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Strong performance in asset management, with in-house products accounting for over EUR30 billion, or 53.2% of total managed solutions.
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The company increased its target for total net inflows from EUR6.5 billion to EUR7.5 billion, indicating confidence in continued growth.
Negative Points
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A one-off EUR20 million tax charge impacted variable net profit due to standard corporate taxation in Luxembourg.
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Operating costs were slightly higher than guidance, driven by major project accelerations, including investments in AI and the Allianza project.
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The payout ratio was slightly lower than targets, with ordinary payout at 35.5% against a guidance of 36%.
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Deposit costs saw a pickup in the second quarter, with expectations of further increases due to rising interest rates.
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The tax rate spiked to 30.5% for the first half, with expectations of a gradual reduction only starting from 2027.
Q & A Highlights
Q: Can you explain what gives you confidence in maintaining margins at 1.4-1.42% over the medium term, despite potential competitive pressures? A: Gian Maria Mossa, CEO, explained that Banca Generali has several levers to mitigate margin pressure, such as exposure to traditional life insurance products and third-party funds, and partnerships with investment banking and Intermonte. These factors contribute to maintaining the target margin of 1.42%, including the insured banking business activity.
Q: What is the current status and future expectation for deposit costs, given the recent pickup in the second quarter? A: Tommaso Di Russo, CFO, noted that the increase in deposit costs is linked to the beta of deposits and market interest rate trends. They expect a further increase in interest rates in the fourth quarter, which will impact funding costs. However, the bank's sensitivity to interest rate changes is lower, focusing more on balance sheet dimensions.
Q: Could you provide more details on the expected tax rate for the second half and 2027, given the anticipated return to a 27-28% range by 2028? A: Tommaso Di Russo, CFO, mentioned that they expect a gradual reduction in Luxembourg's tax rate starting in 2027, with a positive impact from discussions with Luxembourg authorities and potential contributions from strengthening their presence in Ireland.
Q: Can you provide guidance on performance fees, particularly how many assets under management (AUMs) are close to their high watermark? A: Gian Maria Mossa, CEO, stated that approximately EUR5 billion of assets are close to their high watermark, indicating potential for performance fees assuming stable market conditions.
Q: What is the outlook for net inflows, particularly for July, and why was the target for product mix not raised? A: Gian Maria Mossa, CEO, expressed confidence in exceeding EUR0.5 billion in net inflows for July, with strong asset under investment quality. The conservative view on market trends led to maintaining the product mix target, despite strong recruitment and sales force performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
