Sella group: positive 2022 results, growth in all business sectors

• Group overall net profit: € 91.9 million
• Roe: 8.8%
• Net Banking Income: € 857.9 million (+17.9%)
• Net inflows: € 3.75 billion
• Total Inflows: € 48.7 billion (-1.1%)
• Direct inflows: € 16.7 billion (+4.9)
• Loans: € 10.6 billion (+8.5%)
• Cet1: 13.21% (12.28% in 2021) - Total Capital Ratio: 15.12% (14.19% in 2021)
• Customers (including Hype): 2.8 million (+9%)
• Team Sella: over 5700 people, 710 new hires
• Revenues from new businesses: € 73.3 million (+3.6%)
• Fintech District: 250 fintech associates (+54)

The Sella group closed 2022 with very positive results and further growth. The good performance covered all business sectors and confirmed the effectiveness of the strategy based on a diversified business model focused on the quality of personal relationships, technological and digital innovation and the fostering of an open financial ecosystem to provide effective answers to customers' needs and have a positive impact on both the economy and the community.

In such an uncertain and complex external scenario - due to international tensions, inflationary pressure and the dynamics of interest rates - thanks to the appropriate management of risk profiles, the Group achieved its best-ever net banking income result, with growth in almost all components, while strengthening its capital soundness. Testifying to the confidence of customers, their overall number increased and market shares grew further. Below are the main results for the year.

Profit and incomes
Results as at December 31 2022, approved by the Boards of Directors of the parent company Banca Sella Holding, the company issuing financial instruments widely distributed among the public Banca Sella and the other Group companies, closed with an overall net profit of € 91.9 million. The result is up, compared to € 56 million in the same period of the previous year, net of non-recurring items. In 2021, due to the capital gain obtained from the strategic joint venture transaction in Hype with illimity bank, the net profit totalled € 108.3 million.

The net banking income increased by € 130.1 million (+17.9%) to € 857.9 million. In detail, the net interest income increased by 42.6% to € 358.6 million, resulting from both the sales component and the positive effect of inflation-indexed securities. Net income from services increased by 4.7% to € 406.7 million. The net result from financial activities increased by 5.2% to € 92.6 million, due to the positive results of proprietary trading and the sale of tax receivables.

Inflows and loans
Global inflows at market value amounted to € 48.7 billion, down 1.1% due to the market downturn, which led to a € 4.1 billion decrease in the value of securities prices. Against this backdrop, customer confidence led to an excellent net inflows result of € 3.75 billion. Direct inflows grew by 4.9% to  

€ 16.7 billion. Loans to support the activities of households and businesses grew by 8.5% to € 10.6 billion.

The improvement in credit quality ratios continued. The cost of credit risk figure decreased to 37 bps (it was 58 bps at the end of 2021). The net Npl Ratio decreased to 1.8% (it was 2.2%) and the gross Npl Ratio to 3.5% (it was 4.2%). The coverage ratio on impaired loans remained steady at 49.5%, while the coverage ratio on non-performing loans improved to 65.7% (it was 67.1%). The Texas Ratio further improved to 27.2% (it was 31.7%).

Soundness and liquidity
The Group confirmed its high capital strength, well above the required standards. The Cet1 ratio stood at 13.21% and the Total Capital Ratio at 15.12% (they were 12.28% and 14.19%). The level of capital ratios incorporates the impacts of the application of advanced internal models (AIRB) on credit, for which the Group received authorisation from the Bank of Italy in July. Liquidity indicators were also performing: the LCR ratio stands at 166.72%, while the NSFR ratio is at 132.76% (for both indicators the minimum limit is 100%).

Traditional and new business sectors
All sectors in which the Group engages and the good balance of revenue sources resulting from its growth and development strategy contributed to the good results for 2022. In particular, finance and investment banking increased their margins by 37%. Net inflows in advisory and asset management grew by € 1.6 billion with assets under management amounting to € 21.2 billion. Revenues from investment services amounted to € 180 million, slightly down (-2%), despite the strong tensions in the financial markets.

The growth in payment systems was significant: total transacted volumes related to acquiring and issuing services increased by 29%, with an 18.8% increase in the net banking income to  €120 million. These volumes are also the result of the increase in POS (+36%) and e-commerce (+11%) transactions.

Revenues from new businesses, which started in 2018 as part of the strategic plans of the Group, rose by 3.6% to € 73.3 million, mainly due to open payment and platform services, corporate and investment banking and technology solutions provided to third-party companies.

The total number of customers of the Group further increased by 7% to € 1.2 million, net of Hype, including which the increase rose by 9% to € 2.8 million.

Sustainability
The Group's growth and development strategy also found support in bolstering its commitment to sustainability. After achieving carbon neutrality in 2021, further initiatives to steadily reduce gross residual CO2 emissions and support the energy transition path of its customers through advisory activities and specific initiatives, such as financing to support green investments. In addition, the range of wealth management Esg products expanded. Support for scientific research continued through Sella Sgr's TFS iCare investment fund, backing two new projects of the Umberto Veronesi Foundation.

Employees and investments
Hand in hand with the progress of the Strategic Plan, the Sella Team, made up of employees and co-workers, also strengthened, exceeding 5,700 people thanks to 710 new hires in Italy and abroad. The Group, which obtained the Great Place to Work certification, to foster the transition to the new hybrid work model and a better work-life balance, signed a significant experimental agreement with the trade unions improving the average number of remote-working days per month between 13 and 15. The update affected supplementary contracts, to increase parental leaves and assistance to families.

Investments in support of the Strategic plan amounted to € 82 million, net of the real estate component. To support effectively the several development initiatives and the increase in staff, operating costs rose by 12.4%. Despite these major investments, the cost-to-income ratio improved dropping to 71.6 % (it was 75.2 %).

The results of Banca Sella
As part of the Group's positive results, the company issuing financial instruments widely distributed among the public Banca Sella ended the year with a net profit of € 73.3 million. The figure is growing by 77.3% up from € 41.4 million a year earlier. The Roe rose to 9.1% from 5.3% in 2021. The traditional capital soundness further bolstered, with the Cet1 ratio figure standing at 18.63% and the Total Capital Ratio at 21.16% (they were 15.88% and 19.95%). The liquidity indicators were also performing: the LCR index stood at 179.8% and the NSFR ratio was 145.7% (the minimum limit for both figures is 100%).

As part of its growth strategy, Banca Sella further intensified its advisory-based service model and continued to provide complete and effective responses to the needs of households and businesses through the development of innovative products and services with high technological content. Consistent with its sustainability goals, Banca Sella expanded its range of financial solutions to back the energy transition of businesses and their projects, supporting the economy of the territories in which it operates.

Loans to support household and corporate activities increased by 7.7% to € 9.1 billion. Credit quality ratios improved. The cost of credit risk was 22 bps (it was 36 bps). The net Npl Ratio decreased to 1.7% (it was 2%) and the gross Npl Ratio to 3.1% (it was 3.8%). The Texas Ratio improved to 30.8% (it was 36.2%).

Global net inflows were positive at 1.4 billion, thanks to direct inflows of € 0.3 billion and indirect inflows of € 1.1 billion. Global inflows at market value amounted to € 31.5 billion, down 5.7% due to the € 2.7 billion decrease in the price value of securities as a result of the market downturn.

The development of net banking income (+21.9% to € 494.7 million) was particularly positive due to the growth in net interest income (+47.8% to € 233.1 million), the increase in net service income (+5.4% to € 242.7 million) and the increase in net income from financial activities (+5.9% to € 18.9 million). In detail, net interest income shows significant growth in the commercial component with interest from loans € 18.7 million higher than in 2021. The good performance was also affected by the result of the proprietary securities portfolio, which increased by € 28.3 million due to higher volumes, higher yields and coupons on inflation-indexed securities.

Growth in service revenues was driven by income from payment systems, at € 96.4 million (+17.3%). Revenues from electronic payment systems reached € 69.3 million (+19%), driven by higher transaction volumes of € 28.6 billion (+29.1%). Income from traditional payment systems (+13.6%) and from foreign payment systems (+10.5%) also increased. Banking also had a positive impact, generating revenues of € 28.3 million (+6.3%). As a result of the excellent performance of net interest and other banking income, the Cost to Income ratio improved significantly to 67.6% (was 73.4%), despite operating costs up 12.9%.

Banca Patrimoni Sella & C.
Banca Patrimoni Sella & C., the bank specialising in the administration and management of the assets of private and institutional customers, closed 2022 with a net profit of € 14.1 million, up 25% from  € 11.3 million the previous year. Assets under management stood at € 18.3 billion, up 2.4% from the previous year.

Despite the negative performance of the financial markets, net inflows were very positive and amounted to € 2.2 billion. The good performance of commission income following the further growth in the size of Banca Patrimoni Sella & C. also affected the results. The contribution paid by the net interest income and profits from trading in the proprietary securities portfolio was also outstanding.

The bank's Cet1 and Total Capital Ratio figures were both standing at 11.88% (they were 12.54%).

Fabrick and the fintech ecosystem
Sella Group's development and growth in open finance continues, through the activities of the specialized company Fabrick and its subsidiaries (Axerve, dpixel, Codd&Date) and the management of the Fintech District community, which closed 2022 with total net revenues of € 50 million, up 14% from the previous year. The number of clients also increased: there were more than 400 connected counterparties at the end of 2022, generating a significant increase in API calls on the platform to 330 million per month. During the year, other entities adopted Fabrick's payment hub solution to optimize the management of collections and payments. Work continued on implementing new business models based on account-to-account payment made possible by Fabrick's Aisp and Pisp licenses.

Axerve, the company specialising in the acceptance of payments on all physical and digital channels with more than 100,000 active customers nationally and internationally, recorded sales worth € 31.2 million (+26.6%) and a net income worth € 24.8 million (+20%) in 2022. Also important was the growth in POS and e-commerce transactions to € 21.2 billion (+30.7%). In 2022, the acquisition of the multi-channel e-commerce platform Vidra was announced.

The Fintech District community, within which open innovation projects are developed, is confirmed as a reference point for the sector in Italy and abroad, surpassing 250 fintech members with the entry of 54 new companies. On the other hand, partnerships with 30 corporate companies started over the years. The Fintech District has promoted important initiatives such as the international event Milan Fintech Summit and the Fin+Tech acceleration program dedicated to startups in the fintech and insurtech fields.

Click here to view the Consolidated Accounting Data of Sella Group and the Accounting Statements of Banca Sella as at 31 December 2022