Good morning. This is the Chorus Call conference operator. Welcome and thank you for joining the Banta Generali First Quarter 2021 Results Conference Call. As a reminder, all participants are in a listen only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over to Mr. Gianmariamosa, CEO and General Manager of Bancad Generali. Please go ahead, sir.
Thank you and good morning. Thank you for attending our Q1 results conference call. Let's start by saying that the Q1 was probably the best quarter ever for the bank. Of course, for the numbers, but even more for the quality of the underlying. We achieved more than 70 €7,000,000,000 of total assets and working personally more apart for the impression acceleration, 19% to the increase year on year, It's about the quality because greatest part of this acceleration comes from asset measuring products.
The increase is a consequence of, of course, positive market, but of course, a very sound And here, great quality activity of our financial advisers with net inflows up To EUR 1,700,000,000 in the Q1, you already seen capital very strong and also may It started very well. Of course, the quality of the underlying had a positive impact Also on the financials, so net profit jumped at €135,000,000 of course, Driven by an acceleration of the market, so the most valuable components of our P and L, but also very sound and solid Recording net profit, regarding net profit closed the Q1 above €37,000,000 In terms of capital ratios, also once allocated all the net profit over the Q1 For the dividend policies of 2021, the capital ratio are well above the SREP requirement And almost in line with the numbers of last year, we see CET1 at 16.2 percent and PCR 17.5 percent. Of course, these numbers include also the distribution of €3.3 as approved by the AGM in April. Moving on Page 4. This is, as usual, our short representation of our P and L.
As you can see, net financial income was pretty stable on year over year. The net recurring fees increased by 14.3%. And as we will see, Great results of the gross fees and the payout ratio of funding control. The overall total banking income jumped To 239,000,000 and the total operating costs are in line with our guidance with an increase of 3 point If we consider the items below operating profits, you can see an acceleration in the contribution to banking funds from 3.1 to 4.6. And despite in the provision Frankly linked to the great results of our financial advisers, so we increased the provision for The loyalty program, it's really important, as you know, also in terms of retention.
And as already we said, net Profit to 135.4 percent, also thanks to a temporary reduction in tax rate For the higher contribution of our Luxembourg platform results. Page 5, you can see the breakdown of net profit in the two Major components, the variable net profit and the recurring net profit. The build up on the right show you the Great job in terms of net fees with an increase of €30,000,000 And on the negative side, you see an increase of 6 €6,000,000 of net adjustment and provisions. So the recurring net profit Increased in terms of numbers, but also in terms of volumes. Now on Page number 7, as usual, We go through line by line, starting from net financial income.
As already said, net financial income closed at 24.7 percent with a net interest margin at 21.7 percent almost in line with the 4th quarter And slightly above the Q1 of last year, basically here you have to effect A slight reduction of the total net interest income yield at 0.71 And in asset expiring from €12,500,000,000 to €14,000,000 The results of the total net interest income yield comes from 2 different trends. On one side, we have the reduction On the yield on interest bearing assets at 0.66. On the other side, Reduction of the cost of funding also thanks to the Altiero contribution. So the overall cost of funding declined at Minus 0.05. I can confirm, as already said in the previous conference call, Our guidance for the full year of the contribution of net financial over net interest income of minus in the range minus 3 On a year on year basis.
And I can say that we continue to maintain a very conservative approach. The overall duration of the portfolio is around 1.4 maturity and around 3.4 and this is because we are ready Page 8, gross fees. Here, the results are pretty impressive. Overall, gross recurring fees exceeded EUR 221,000,000 With both management fees and other recurring fees with a significant increase on year on year basis. The result is an increase also of the profitability with margins at 1.17.
On the right, you can see also the contribution of the variable fees at €111,000,000 a very strong Quarter due to the fact that almost all the products are closed or at their highest level ever. Page 9, a deep dive on management fees. Again, a strong acceleration, EUR 180 €7,400,000 Here you can see 2 different representation of margins. The black bar is about the like for like numbers, so excluding next time endeavors. And you can see the steady growth in the last four quarters.
And the orange bar instead is once include the 2 legal entities. And from this quarter, we then include All the perimeter in these analysis, we are at 1.38, and we are confident to confirm our guidance Of margins in the range of 1.38%, 1.42%, also ones included in Exane and WER. So very, very solid growth with an underlying of higher quality than in the past. Page 10, other significant positive news comes from the banking and the entities. You can see on the left the representation in the two block, banking fees and entry fees.
Banking fees jumped 24.5 percent while entry fees were in line with the last quarter of last year. In terms of margins, you can see also in this case an increased contribution of total margin with The profitability at EUR0.18. On the right, on the graph on the right, you can see The representation of the 2 major contributor of other recurring fees, the new revenue streams And the transaction of the Antiman from fee. On the side of the new revenue streams, the contribution is pretty significant, 18,100,000 and is definitely above if you Project this number for the full year to be a target, a new target that we gave of €70,000,000 And you can see also an acceleration in production on banking from fees. This is basically driven by 2 effect A sound primary market activity and increasing activity also in brokerage under GetRaptor Solutions in France.
Page 11, the deep dive on the 3 new revenue streams, advanced advisory, retail brokerage, so SACCO Welcome to Platform and Structural Products. Starting from Advanced Advisory, we here, it's pretty impressive with the steady growth of the Under advisory, we achieved EUR 6,500,000,000 in March. And you can see the revenue contribution 7.4 percent in line with the new target of achieving at least €30,000,000 retail brokerage, Total volumes almost in line with the spike of the Q1 of last year, but with an higher profitability, Total contribution of revenues of Multisaxos amount to EUR 7,100,000. This is basically driven by the diversification of the asset traded and the contribution of currency and derivatives, While structured products, of course, on year on year basis, the comparison is negative, but just because, As you remember, the Q1 last year was the best ever, but in absolute terms, EUR 175,000,000 It's well above our forecast and projection for the year. Also April and May are very solid.
And just considering the revenues of the Q1 of EUR 3.6 million multiplying by 4, you can see that we should exceed The target of €15,000,000 So overall, on the revenue side, I do see only positive news with solid contribution from all the different lines of the P and On the cost side, also from here, you can see positive trends. First of all, total fee expenses. The total payout ratio is at 52.9%. So below our projection, thanks to a slight reduction of the payout to the network. In particular, if you look at the ordinary payout, it's below our target of 37%, It's around 36.6 percent.
And also the cost of growth is lower than our target, is at 10.3 percent and this is basically due to the fact that in the last 3 years, the recurring activity disreversed. Payout to 3rd parties instead is almost stable. On Page 13, you can see the operating cost. As we already said, total operating cost increased by 3.6%. And also in this case, you see the 2 different presentations.
The first 1, the like for like, so excluding Nexcam and Valere and the second one instead restating it With the inclusion of the 2 legal entities, so let's focus on the restated one. As you can see, the perimeter includes on one off are slightly lower. The cost of sales Personnel cost is flat and there is an increase of the core operating cost by 4.6% due to the positive scenario we We have been accelerating the investment for new projects and IT transformation. And going through the breakdown of the core operating costs, you see that the increase is widespread Among all the different components, with, in particular, G and A up 1,000,000 Again, also in this case, we are confident to confirm our guidance, 35% of the core components. Page 14, you can see how it's working the operating leverage.
Very proud to see the operating cost on total assets below 0.3%. It was considered a sort of floor. And cost income ratio declined over time with the adjusted cost income at 36.6. On the capital ratio side, Page 15, as you already said, really important, We estimate all the net profit of the Q1 to pay dividend also in 2021. Consider that this allocation implies already a dividend payout Around 3.6%, a yield of 3.6% on the current pricing of the title.
And it includes already, as we already mentioned, the distribution of €3,300,000 for 2019 2020. And in terms of liquidity ratio and leverage, we are well above our requirements. So also on this side, I do see positive confirmation of The sound capital ratios, the slight reduction of these indicators It's due to an increase in diversification in the banking book and a higher lending activity. So just to sum up the financial results, I'm, let's say, more bullish Then ever, in terms of the sustainability of our margins and on the revenue diversification and contribution, At this current market condition, I do see this trend continuing also in the second quarter. And I do see a strong contribution from all the financial advisers.
So the quality matters and As you can see at Page 17, in this case, probably this quarter, we achieved the best results. First of all, in terms of total assets. Total assets, as we said, jumped to 77.5, But what's interesting more is the greatest part of the increase comes from Managed Solutions, €9,000,000,000 of growth On year on year basis, you can see how we are managing very well The stabilization is like reduction over the traditional life policies in favor of an acceleration of insurance wrappers And the total banking product increased by €3,500,000,000 very driven by Advanced Advisory Services. Focusing on the right, you can see the confirmation of these Trends, starting from managed solutions. All the components of our managed solutions were in house funds, 3rd party funds, financial wrappers and insurance wrappers increased significantly.
In particular, if you focus on insurance wrappers, you can see An acceleration of €2,000,000,000 and this explains the goal to rebalance In the medium term, the overall allocation in insurance products. If you look at the banking products, you see that the growth The current accounts is just €500,000,000 So €500,000,000 out of €12,000,000,000 It means less than 5% of the acceleration of asset is invested in cash. And this, again, is about quality. So we are advising our clients to invest In asset management products, we are increasing the role of the wrapper solutions and the needs is well diversified. Page 18, there is a EBITDA of net inflows.
And just to follow you on the red bar, you see the greater results in the last two quarters and again, the greatest contribution of Funds and Insurance Factors. Page 19, important to emphasize The normalization of recruitment activity, as already announced in the Q1, we achieved the same results in the Q1 of 20 So we resumed activity of recruitment is more balanced because 50% comes from F and A portion, 50% from, say, traditional retail and tariff banks. And in terms of acquisition channels, in a nutshell The contribution of the existing sales force is in line with the last year. The percentage that you see is like the reduction For the acceleration also recruitment activity. Page 20, you can see the focus on platform numbers And again, it's a confirmation of the positive trends in the Q1.
And as I said, also may It's confirming this positive trend with almost all the managed solution contributing positively to the net inflows. So the commercial activity is very sound and the acceleration of managed solution is pretty impressive. Now the last section is about numbers of our 3 year business plan. We want to share numbers achieved, but also consideration on the priorities over the last 7 years and what we are planning for the future. So Page 22, first of all, you can see a broader picture Of the asset expansion during the current 3 year business plan And also considering the previous full year, so starting from the end of 2015, where the acceleration of total assets It was very, very impressive, from 41% to 77%.
And 77% is already In the range of the target we announced for our 3 year business plan. And just to remind you, it was in the range of €76,000,000 €80,000,000 So considering the current condition of the markets at the current level, We have the opportunity also to exceed the upper range of the target. This growth of total assets has been driven by an increasing number of clients, Where the percentage of the increase is lower than the percentage of the total asset because the focus was on quality. And the way to see the quality of our clients is at Page 23, Well, as you can remember, the main driver of the business plan of the 3 year business plan has been to accelerate our competitive positioning in the private banking sector And the acceleration of clients with more than €500,000 With the bank, it's been really impressive. With an increase of 86% And a total contribution on total assets of almost 2 thirds, 6%, 7%.
While at the same time, you can see that the acceleration in the clients, in the same, in the affluent Segment of our clients has been definitely lower. So for the next 3 year business plan, We're going to confirm the strong positioning on the private clients, but at the same And thanks to the great investment in our digital platform. You will see we're going to launch Several initiatives also to expand in the affluent segment. Page 24, It's not just about, as we said, asset expansion, so absolute numbers, but it's also about quality. And if you focus on the managed solution on total assets, bottom left of the page, You can see that managed solutions now exceeded 51 percentage.
At the end of 2015, it was at around 45%. And what inflation is more that it's well diversified Among in house funds, 3rd party funds, financial wrappers and insurance loans. And another important target achieved is the overall equity exposure, Now above 25% at 26.4 percent and all the initiatives Automated switch and selling plans will increase even further this percentage. I do estimate at least 1%, 1.5% as of an increase and again considering the current market level. So the overall equity exposure on Total Managed Solutions is still below 50% And below the average for the market.
I don't want to close the gap with other players, but I do see Some room to optimization. Page 25 is just to focus also on our The G and A Management platform, because as we already said, managed solutions increased And with the managed solutions also our in house platform expanded and expanded in a very sustainable way With a growing contribution of BG system and Luxim, now it accounts for €14,100,000,000 out of €19,400,000,000 And there is also A representation of the performance of our in house Products, as you can see, with low volatility, we delivered on promises.
So in overall
performance above 17% in the last, let's say, 4 years 1 quarter. So Also in this case, we can say that quality matters and in the context of In controlled volatility portfolios, the performance was relevant. Why we have been Seeing such acceleration in asset management products, I do see A positive contribution to the introduction also of a new methodology, a new commercial approach For our time, in this case, sustainability matters. And in this case, I do see A significant competitive advantage compared to other players in the market because we were first mover Introducing a proprietary digital platform in which we can bring our clients closer to the ADGs Concept to give also a different reason to invest in the long run. We targeted 10% of total assets in EAG products by the end of this year, And we have already achieved our optimistic approach and target because now Total assets in ESG products account for more than 13%.
Great part of this comes from new net inflows With the lapse team accounting for more than 50% of the overall net interest. So just to sum up, the next 6 months will We will be focused on delivering and completing the journey Of the initiatives launched in the last 3 years. And as we already seen together, All the initiatives are going in the right direction and we still have room to improve. And we started thinking also to the next 3 year business trends, where on one We will continue the great job on product line and on the diversification of assets. On the other side, we will expand and accelerate our business also on new targets of clients.
So very confident, very confident to exceed the expectation of the target announced during our Investor Day in 2018, very confident of the quality of our financial advisers End of the results we have been delivering over time. And I do see also the opportunity To expand our client base in the next 3 years, thanks to several initiatives we have been working In the last few months, in which we can leverage our partnership with Saks, our partnership with KONIO, Our expansion in Switzerland and the opportunity to develop dedicated products and digital platforms and tools for affluent clients. Thank you, and I'm more than glad to take any questions.
Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Please pick up the receiver when asking questions. The first question is from Luigi Develis with Equitasim. Please go ahead.
Yes, good morning. I have four questions. The first one is on Digisaxo. Could you provide an update on the trading platform of potential impact, new products Expected to be launched, the feeling of your clients on the platform, if you think you can gain market share and if this is the driver To expand business with the new target of clients, namely, affluent. The second question is on the dividend.
Could you provide an update On the dividend policy and if you have had any interaction with the regulator on the possibility to return to pay dividends after the end The first question is on the recruiting. How do you see the market for recruitment now compared to the pandemic? Do you think the market is more or less competitive than before the COVID? I mean, it's easier or more difficult to recruit new financial advisers? And the last question on the alternative PIR.
Do you have target in terms of net interest for
Thank you, Luigi. So starting from the first question, the platform is almost Full integrated for the full range of products, we have an important release in the end of the first So between June July of the derivatives of future and option. And we're going to complete the journey with the extension also to And we open up the platform to the clients, so we are in the rollout phase. You have, let's say, that some clients are very active with this technology, and it's impressive to See the acceleration in the number of the clients who decided to join the platform. So The evidence is pretty strong.
We do not want to accelerate and to push. I do see the opportunity to accelerate in the DG Saxo platform in the next 3 year business plan. You are right. The technology is cutting edge and the feedback of clients are pretty positive. So I do expect a significant contribution to the new business plan from these initiatives.
Yes, it's a culture change. So we want to continue to maintain a great focus on asset management products. So it will take time To expand this business, but it's very solid on the right direction. Given policy, My feeling is that we're going to pay because I don't see any reason not to pay. And depending on your view on the pandemic, let me say that in the interaction, there is the With strong conviction to normalize the role of the regulators.
So and to reduce Any distortion in the market. So my strong feeling is that in October, we're going to pay the 1st tranche of the dividend. In January 2022, we're going to pay the 2nd tranche. And I'm very, very Also on paying a significant dividend for the last year of our 3 year business plan. Recruitment, Recruitment, yes, I'm pretty impressed by the interest.
I do see We need to consolidate the banking system, further consolidation. Now you can you read every day Some potential merge, and this is positive for the whole industry. So there is a greater interest coming from Additional banks and private banks. And in case of financial advisers, we have a greater interest In more diversification in products and services. So I do perceive the bank is the right place to be.
So we haven't accelerated in terms of focus or incentive, but it's just back to normal Activity, so we could accelerate. I confirm the target of almost 100 new colleagues Because the focus must be well balanced and to provide all the support of existing sales force and continue to increase the sales force network, We are very focused on new and younger financial advisers. So there is a dedicated project also to We recruit younger colleagues and the number of the younger colleagues is not included in the target of 100. In terms of cost, we are slightly below the historical cost for improvement. In terms of At PIR, we don't give a specific target to the financial value network.
You said that in the alternative space of PIIR Like funds, you are around €70,000,000 and I don't think you see significant numbers for the full year. So I do expect something in the range of €150,000,000 to €200,000,000 So It's a positive trend, but it takes time. And I think that it's So important to sell in the right way this kind of initiatives. Here, the real risk is the new selling proposition. So we priced these products in line with the traditional estimation products.
We haven't launched a specific incentive for this product. And we see this as another way to diversify more The portfolio of our clients are in new source of revenues. Just to be sure I was clear in the dividend policy, I will say that I'm very confident to pay the €3,300,000 and I'm very focused to pay an important dividend For 2022.
The next question is from Gianluca Ferrari with Mediobanca. Please go ahead.
Yes. Good morning, Gianluca and Maria. The first question is on Page 12, the cost of growth. I think in that specific line, you are booking both the recruitment cost, but also the accrual of the bonuses, If I'm not mistaken. So I was wondering, how would it be possible that cost of growth went down when you made EUR 1,000,000,000 more inflows into Asset Management Products and you doubled the number of the phase.
So probably I'm missing something on the mechanic of how you account for that. The second question is on Page 24, I think you gave for the first time a striking number that you have 47% of your AUM In equities and achieving AUM, they're also including insurance wrappers. So my question is, are insurance wrappers Also including multi class insurance, I. E. Also a component of Ramo Primo in there.
So the 47 net of the Rama prima could be even higher than that or again, I am mistaken in reading this. The last question is on the repricing. What is state of the art here? And I was curious to hear if you are also So thinking about the repricing, there's something outside management fees. So any Different pricing on credit accounts or banking services or stuff like that.
Thank you.
Thank you, Gianluca. So starting from the cost of growth here, you have 2 different effects, and then I will hand over to Tommaso 4 specificities. The first one is that you amortize the cost of growth over the last 5 years. So you have a spike Your recruitment activity 20162016, so you have a sort of positive effect because you are discussing the Strongest market years. The second more important is that, of course, the total commission increased significantly.
So in the ratio, the base accelerates significantly. But for other details, I will hand over to Tomas. Yes. I think It was meaning the effect by the for the recruitment of 2015 2016. But if you compare this amount Can we also have the stock of stock to
be amortized relative to past recruitment?
I have to check the numbers, so we'll give you the details. Yes. While we check the numbers, I answer To the second and third question, the second question is about the net exposure, equity exposure, Excluding, say, traditional life insurance, you are right. In the insurance wrappers, You have almost 30% of traditional life insurance. So, normally for this 1st percent, you would obtain a higher number.
So you're right. It's about €3,000,000 out of €10,000,000 So you can work out the right percentage. It was excluded, let's say, The traditional components of the insurance wrappers. And in terms of repricing, we are in line with our Projection, in July, we are confident to launch The new wave of vaccine is the repricing. The authorization Should arrive at the beginning of June for the institutional share classes and then you have 30 days for the retail authorization.
And in terms of price optimization, I don't see We need to optimize further the many solutions. We have already introduced Some optimization in the current accounts and the effect will be visible in January And then Tommaso is Shaking the numbers, we can keep going with the Q and A session. Then when we find the number, we will give you the disclosure. Thank you. Welcome, Jorg.
The next question is from Elena Perini with Intesa Sanpaolo. Please go ahead.
Yes. Good morning. I've got 2 questions. The first one is about your Performance fees in the month of April. If you can update us about them.
And then the second question is about your banking fees. You were very good in Could we consider it as a quarterly run rate For here or do you see, I don't know, some potential slowdown in the coming quarters? Thank you.
Thank you, Elena. So performance fee in April were pretty solid In the range of €15,000,000 €20,000,000 while the projection for the current quarter It's negligible, negligible. So we already had other, let's say, between 1520. In terms of banking fees, you have 2 different components. One is about the primary market activity and it depends also on the Opportunity in the market, so it's a variable component.
While the second one is about the trending, the brokerage Activity of the buffers and of the funds. And in this case, of course, the expansion, the asset expansion led to Increasing volumes and so increasing revenues. So half and half, but I'm pretty confident that the overall contribution will be significantly positive. I don't know whether you can just multiply by 4 in the Q1. It probably would be a little bit too high.
Thank you.
Okay. Thank you. The next question is from Ageliki Baraktari with Autonomous Research. Please go ahead.
Good morning. Thanks for taking my questions. Just three questions on my side, please. First of all, could you give us some color on what drove the margin improvement quarter on quarter? You have now sort of Repeated your target of 1.38 percent to 1.42 percent, but including Nexon and Valere.
Can you give us some color on why you are more confident to achieve this target now including the new businesses that you have acquired? And would it be feasible to expect you to reach the upper end of that guidance, I. Around 142 basis points. And second question, we have seen significant inflows into managed assets across the industry year to date, including for Banco Generali. What is driving this in your view?
And is it sustainable? And the 3rd question, if I may, can you give us a little bit more color on your plans with regards to the affluent segment? Thank you.
Thank you. Let's start from margins and margin improvements. I confirm the range of 1.38, 1.42 once included Nexstar and Galore Basically for 3 main reasons. The first one is the asset allocation. The second is the product allocation and the third one is about the repricing.
Equity allocate let's say, asset allocation and the equity exposure depends also on the markets. Product allocation, it's So a long lasting trend, in particular, in the insurance space. So this rebalancing process We last at least next 3, 5 years, and this is a positive contributor to the overall margins. The equity exposure is, of course, influenced by market. And then there is a positive, let's say, contribution coming from New initiatives, for example, selling plans or automatic switch.
And in terms of Repricing, as you already know, it should imply 5 basis points of an increase and growing pace in the BG Financial Platform. So let's say that if you think of stable markets for the next 12 18 months, probably we could be closer to the After band when we enter the lower band, because there are several initiatives that are working very well. I'm more conservative because I'm more conservative on the market trend for the next 6, 9 months. So The overall effect is that I'm confident to confirm the guidance. I cannot confirm 100% of the upper band.
And in terms of managed assets, let's say you have several factors contributing to this Great interest in Managed Solutions. The first one, of course, is poor yields. It's difficult to invest in the bond market, so you invest in the asset management solutions Trying to increase the diversification and try to invest also in alternative asset class. So it's sort of a substitute effect from traditional bonds market to asset management or cash. And I think that now the weight of After number, cash in particular to bonds is pretty low.
So I don't see significant room to increase To decrease, sorry, this percentage, while I do see still some optimization in the cash exposure. The second reason is about, as we already said, the traditional life insurance solutions Because as Banca Generali already communicate, The focus is more on asset management and hybrid solution Then traditional life insurance. And this is a positive element to think of An acceleration of managed distribution as a rule. So my view Is that we're going to see deceleration, in my view, more in the, You say bond sector because you still see a significant concentration of asset management products In the bond market, less in alternative flexible solution and equity because it's a way to try to
The next question is from Domenico Santoro with HSBC. Please go ahead.
Hi, good morning. Hi, thanks for the presentation. I don't have specific questions on the numbers. You guys You're doing pretty well. I mean, there is so much liquidity in the market.
Rates are low, and this is, of course, Pretty much terrible context for you. I'd just like you to expand a little bit more on what you were just saying. That was my question. I mean, the market is clearly worried about inflation risk because of the steepening of the curve. You mentioned before that you've changed a little bit maturity, probably reducing of the bond portfolio because you're preparing for higher Great.
So that's my question. How this do context in my you already touched base updates on this. It might change the activity. Some investors are getting more worried that clients might be hurt on their bond positions. Is there any sensitivity of the in terms of long term rates that you can give us that it might affect more significantly Your business, I mean, any comment qualitative, quantitative, it's very useful at this point.
And also Coming back on the much of the flows. Again, I mean, Really amazing in the sector. But I just wonder how much there is also a
little bit
of a tailwind given that there is usual A sort of correlation between peak of the markets and inflows in equity And whether we how should we look at the second part of the year, when you actually specifically said that you are a bit More worried about the market performance. It's a bit of a question forward looking rather than your business, which is great. Thank you, Rodrigo. And I understand the question. You are right.
There is an excess of liquidity. There is some risk linked to inflation, to Normalization of praise. And I think that all these factors are really positive for our industry because At the end of the day, as you know very well, the quality of the professionals matters. And in this case, we have the products and the competence To expand alternative investments, where alternative is a broad concept in which We have to sell also dynamic strategies with hedging strategies and so forth. So I think that this market condition, The inflation risk, the excess liquidity with the risk of any significant correction That implies a better diversified portfolio.
And in this case, I do see a competitive advantage. The second even stronger competitive advantage, and this is just more about Banca Generali than others, is that if you Workout the net inflows and the relative net inflows of Banca Generali compared to the market, We perform better when you have higher volatility. First of all, because we are less exposed overall to equity. 2nd, because we are definitely less exposed to duration risk. And 3rd, because this is probably the most important, we have On average, the best professionals.
So I'm not worried of significant deceleration of inflows. I don't think we can grow every quarter 10% because it would be a little bit Not too much, but I do see a structural rebalancing between the traditional distribution channels And the Financial Advisory business. I think NISFIC now saw the introduction The recognition of the financial advisers is important and was important for the acceleration of this Now is it positive is it sort of the full circle in which the detractor So to the financial advisors, it's getting lower and lower and the word-of-mouth is working even better. So the momentum Counts and accounts are locked and the financial advisers are working very well. And I think that in this case, It's important to be sure to check non selling approach.
So this is Spain, so conservative on alternative asset class and so conservative in any acceleration in the risk profile of the clients and so forth. In terms of bond exposure, We did our banking book to be ready to catch any opportunities coming from Stepping into the quarter and actually in the normalization release. So in the banking book, I do not see significant risk. On the clients' Portfolio, the list is even lower because as you know, we have more or less EUR 18,000,000,000, EUR 20,000,000,000 invested in traditional life insurance policies. It's no volatility.
And so we covered the bond duration portfolio through this sort of established or this is the traditional life insurer. So We are less exposed to any volatility increase of the bonds, and we normally deliver better results And due to more compared to the B2B market. So I'm pretty positive at the meeting for these reasons. The last reason of, let's say, of this is such a new issue I do see an acceleration in consolidation process in the banking system. It is necessary.
Now the banking system is being frozen, no? You don't know what I mean. And sooner or later, we must normalize the situation And valuation implies consolidation. And during consolidation, financial advisor Accelerate. So there are several positive factors for the industry and less downside for Banca Because in my opinion, we are a little bit more conservative than others and the corporate position is a little bit higher than others.
All right. Very useful. Thank you. And now, sorry, I will hand over to Mario for the previous Question over to Luc. Yes.
So the amount that we have come up time is in the range of €150,000,000 €50,000,000 which is including both recruitment and organic strategic. So
Mr. Massa, there are no more questions registered at this time.
Okay. Thank you. Thank you all for the participation and see you soon. Thanks. Bye.