Group ambition
On the strength of the excellent results achieved in the 2016-2019 three-year period, we have set challenging financial targets in the 2019-2023 strategic plan
2023 Objectives
Over the next four years, we intend to achieve growth:
- in assets and revenues, especially those with low capital intensity;
- in revenues in all divisions, by mitigating the execution risk through diversification;
- in profits and profitability;
by maintaining high and continuous generation of capital.
More specifically:
- growth in income-generating assets: we forecast total financial assets (“TFA”) of €83 billion (+8%) in 2023, AUM/AUA at €59 billion (+11%), customer loans of €51 billion (+4%) also thanks to significant investments in all business segments' distribution channels;
- growth in revenues to €3 billion (+4%), with a solid contribution from all business segments. In particular, Wealth Management will grow by 8%, confirming the position of the leading contributor to group commissions, complementing Corporate & Investment Banking, whose revenue growth is expected to hit 6%. Consumer Banking will continue to be the driving force for growth in the group’s interest margin (around two thirds of the total, with an overall increase in revenues of 3%); Principal Investing will confirm its positive contribution to the group, with revenue growth of 3%;
- growth in profits: we forecast earnings per share to rise by 4% to €1.10 from €0.93, considering the cancellation of shares deriving from the buyback plan. We expect a growing contribution from Wealth Management and Corporate & Investment Banking, associated with Consumer consolidation on the current high levels of profitability;
- increase in profitability at group (ROTE at 11% from 10%) and division level: we expect Wealth Management to register the biggest increase in return on allocated capital (“ROAC”), going from 16% to 25%; Corporate & Investment Banking is expected to improve to 16% (from 15%) and Consumer to strengthen the high levels of 28%-30%, as with Principal Investing (11%);
- growth in the generation of capital deriving from high profitability and the absence of significant negative regulatory impacts over the next few years. Greater resources will make it possible to finance organic and inorganic growth and remunerate shareholders
| Group Target | June19 | June23 | 4Y CAGR | Divisional Target | June19 | June23 | 4Y CAGR |
|---|---|---|---|---|---|---|---|
| Revenues (€bn) | 2.5 | 3.0 | +4% | Revenues (€bn) | |||
| EPS (€) | 0.93 | 1.10 | +4% | Wealth Management | 0.5 | 0.7 | +8% |
| ROTE adj. | 10% | 11% | +1pp | Consumer Banking | 1 | >1.1 | +3% |
| CET1 phase-in | 14% | 13.5% | Corporate & Inv. Banking | 0.6 | 0.8 | +6% | |
| TFAs (€bn) | 61 | 83 | +8% | ROAC (%) | |||
| Loans (€bn) | 44 | 51 | 4% | Wealth Management | 16% | 25% | +9pp |
| Funding (€bn) | 51 | 56 | +2% | Consumer Banking | 30% | 28-30% | - |
| Corporate & Inv. Banking | 15% | 16% | +1pp |
Achievement of the 2016/2019 plan targets
Over the course of the previous plan (2016/2019), we have expanded and redesigned the group’s profile, bolstering our strategic position also through investments in people and in distribution and M&A transactions.
In CAGR 2016-2019:
- Growth in interest-bearing assets:
- TFA: +25%
- AUM: +31%
- Loans: +9%
- Funding: +3%
- Growth in group and banking profitability: ROTE at 10% (+3% in 3 years)
- Optimised cost base and asset quality:
- cost/revenue ratio of 46%
- gross impaired assets/gross loans under 4%
- Revenue growth: + 7%
- Increase in profits: EPS adjusted +13%
- Dividend growth: DPS + 20%
- Significant capital creation, with €1.1 billion in dividends distributed, double the previous three-year period.
The objectives of the 2016/2019 three-year plan were therefore met and exceeded.
