Sella Group: positive results at 30 June 2024. Growth in revenues, deposits, lending and customers
In the first half of 2024, the Sella Group effectively continued to pursue its path of growth and development, achieving positive results in all business sectors (read the full Press Release).
The start of the year was characterized by the launch of the new "Make an Impact" Strategic Plan that, in addition to reaching sustainable economic and business objectives oriented toward customer satisfaction, aims to achieve measurable impact targets so that the Group can be acknowledged for its ability to generate a positive impact. The plan follows on from the previous "OneSella 2021-2023" Plan that guided the Group through a transformation path of size, capital and economic growth.
Consistent with the good results posted in the previous year, in the first half of 2024 the Group recorded a positive net profit result (€81.4 million with a 11.3% ROE). Steady growth in lending (+4.4% compared to June 2023), attesting to its ability to lend effectively while maintaining a cautious approach, even in a tight market environment in which interest rate levels are curbing demand. Also increasing are deposits mainly thanks to the substantial net inflows of global deposits (+€3.7 billion since the start of the year). Intermediation margin is improving (+5.4% compared to June 2023) at €527 million and is well distributed across each revenue line and the various business sectors.
Especially noteworthy is the result in terms of growth of the customer base, +115,000 compared to June 2023 (187,000 including Hype, held in a 50-50 joint venture with illimity) attesting to the effectiveness of the industrial strategy adopted based on customer centricity, and the breadth, quality and innovative nature of the offering. The total number of customers is 1.4 million (3.1 million taking Hype into account).
As part of the development strategy, the Group is closely monitoring the evolution of the macroeconomic environment, which is still characterized by the tight monetary policy and risks to the sector from international unrest, inflationary pressure and possible emerging risks related to climate change. To address these uncertainties and the reduction in systemic liquidity, the Group has also taken steps to increase liquidity reserves gradually, as evidenced by very robust LCR and NSFR indicators. In response to risks that may affect the quality of the lending portfolio, the Group constantly monitors and revises the risk models to better detect signs of worsening in the general economic environment. In addition to that, the traditional capital solidity continues to be the main pillar of the strategy, and this is also reflected in the ratios that are significantly higher than the minimum regulatory requirements.
The Group is therefore moving forward on its path of cautious evolution, directing its investments to support growth in size terms (+394 new hires in Team Sella in the last 12 months), especially focusing on strengthening local presence and diversification, also from a geographical perspective, of revenue sources. Also continuing is the internationalization effort in the highly innovative Open Finance sector with the aim of exploiting the competitive advantage gained and generating new forms of revenue and major synergies for traditional ones.
This context includes the deals, both of which are subject to approval by the relevant Supervisory Authorities and take effect in January 2025, carried out by Fabrick for the acquisition of finAPI, among the leading German operators in Open Finance solutions, and by Banca Patrimoni Sella & C. with the agreement for the merger by acquisition of Banca Galileo, a bank that offers Private and Corporate customers traditional banking services and specialized consulting.
The performance of the Group's main companies
Banca Sella's results
Banca Sella closed the first half of 2024 reporting positive results, with ROE at 17.6% (it was 20.9% in June 2023) and a net profit of €84.8 million. The net profit was 4.7% lower than the €89.0 million in June 2023, but the comparison would be positive (+3.8%) if the effects of the bringing forward of the contribution to the resolution funds deriving from the different accrual bases of the quotas paid in compared to the previous year were excluded (€3 million to SRF accounted for in the first half of 2023, a contribution not due in the current financial year, compared to €14.2 million to DGS in 2024, a quota required in June instead of December by the Interbank Deposit Protection Fund). The traditional solidity of capital was further strengthened, with CET1 at 19.31% and Total Capital Ratio at 22.17% (they were 19.12% and 21.49% respectively in June 2023).
Liquidity ratios were also very positive, standing well above the required thresholds: the LCR was 255.84%, while the NSFR was 154.16% (they were 225.0% and 146.20% in June 2023. For both, the minimum required thresholds are 100%). Lending quality ratios remained at excellent levels and the cost of credit risk stood at 16 bps (it was 29 bps at June 2023 and 26 bps at the end of 2023). The net NPL Ratio is down to 1.4% (it was 1.8% in June 2023 and 1.5% at the end of 2023) and the gross NPL Ratio to 2.6% (it was 2.9% in June 2023 and 2.7% at the end of 2023). The Texas Ratio improved to 22.2% (it was 27.1% in June 2023 and 23.7% at the end of 2023).
Global deposits at market value stood at €37.3 billion, up 11.7% compared to June 2023 and 5.5% compared to the end of last year. Global net deposits in the semester were positive at €1.5 billion, driven by the growth of indirect deposits. Lending to support household and corporate activities reached €9.6 billion in the first half of the year, up 3.2% compared to June 2023 and 2.1% since the start of the year. In the first semester the number of customers increased by 2.8%.
Growth in intermediation margin (+5.8% compared to June 2023 to €338.6 million) thanks to an increase in interest margin (+11.5% to €212.3 million), while net service revenues were slightly down (-2.4% to €121.5 million) due to the refunds paid by the Bank to customers following the IT disruption which occurred in April.
Operating costs are up 14.8% compared to June 2023, mainly due to the increase in the workforce and in investments carried out by the Bank, as well as the effects of the renewal of the National Collective Bargaining Agreement for the Banking Sector and the different contribution to the resolution funds.
Cost to Income stood at 59.9% (it was 55.3 % in June 2023). The indicator would come in at 56.6% excluding the effects of the higher contribution to the resolution funds due to the different accrual bases between the two financial years of the quotas paid in.
Banca Patrimoni Sella & C.
Banca Patrimoni Sella & C., specializing in the management and administration of assets of private and institutional clients, closed the first half of 2024 with a net profit of €13.4 million, slightly down from the €14.7 million of June 2023. Assets under management stood at €25.1 billion, up 23.9% compared to June 2023 and 12.8% compared to the end of last year. Total net deposits amounted to €2.2 billion, while the progressive qualified net funding share reached €1.1 billion, benefiting from customers' interest in asset management formats. The results were affected both by the good performance of commission fees, as a result of the bank's further growth in size, and by the contribution of net interest income and profits from operations on the proprietary trading portfolio. The CET1 and Total Capital Ratio were both 15.25 % (they were both 13.06% in June 2023).
Among Banca Patrimoni Sella & C.'s subsidiaries, Sella SGR, the Group's asset management company, closed the first half of 2024 with net profit of €1.3 million, up 17% from the same period last year, and assets under management totaling €4.7 billion (up 16% from 30 June 2023). Sella Fiduciaria, a company that provides trust and family office services, closed the first semester of 2024 with assets under management amounting to €1.8 billion, representing an increase of 9.5% compared to June 2023. A total of 687 fiduciary mandates were managed and 18 trusts administered.
Fabrick and the fintech ecosystem
Sella Group's development and growth in Open Finance continues through the activity of the specialist company Fabrick and its subsidiaries (Codd&Date, dpixel, Fabrick Solutions Spain, and Judopay), which closed the first half of 2024 with total net revenues of €30.1 million, up 18.8% from the previous year. The number of customers also increased - the connected counterparties in the first semester of 2023 totaled 538 (+48% compared to June 2023), generating a significant increase in API calls to over 961 million per month.
At the start of the year, Fabrick announced the merger by incorporation with Axerve, a company specializing in the acceptance of payments across physical and digital channels, which became effective on 1st April 2024. By 30 June, the payment business had reached 119,000 customers (up 11% from the same period of the previous year) and had generated a POS and e-commerce transaction value of €13.2 billion (up 11%).
The Fintech District community, within the scope of which open innovation projects are developed, counted 295 fintech associates at the end of June. In addition, there are 31 corporates with whom collaborations have been established over the years.