Good morning. This is the Chorus Call conference operator. Welcome and thank you for joining the FinecoBank third quarter 2026 results conference call. As a reminder, all participants are in listen-only mode, and after the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Alessandro Foti, CEO and General Manager of FinecoBank. Please go ahead, sir.
Good morning, everyone, and thank you for joining our results conference call. First nine months, adjusted net profit up by 10.6% year-on-year at around EUR 531 million. The third quarter shows a clear acceleration in our EPS momentum, with net profit up by 15.6% year-on-year. Nine-month revenues up by 12% year-on-year, while on a quarterly basis, the increase is more than 14% year-on-year. Nine-month adjusted operating costs well under control at around EUR 283 million, increasing by around 5% year-on-year, excluding the additional cost related to the growth of the business. Operating jaws back in action with a cost-income ratio at 26%, down 0.8 percentage points year-on-year. Moving to our commercial performance, our growth is clearly at an inflection point. Net sales up 39% year-on-year in the nine months, and new clients up by 26.3%.
In October, we recorded around EUR 1.7 billion net sales, up 28%, with around EUR 1.9 billion assets under custody, EUR 0.4 billion assets under management, and around EUR -650 million deposits. Brokerage clients were very active buying the dips, leading to very solid brokerage revenues estimated at EUR 26 million. New clients reached a new record high in October at around 26,000, up 34% year-on-year. Capital position confirmed to be strong and safe with a common equity tier 1 ratio at 23.39% and the leverage ratio at 5.19%. Let's now move on slide five for a focus on our guidance. For 2026, we are seeing a faster-than-expected efficiency, leading to better cost dynamics. On revenues, net financial income, solid growth thanks to the combination of positive deposits, net sales, and rates. Investing, a solid growth of revenues thanks to the combination of net sales and mix improvement.
Brokerage, another record year thanks to the higher asset under custody and the enlargement of our active investors. Banking fees growing year-on-year. On operating costs, we expect an improvement thanks to our internal IT know-how and first AI investments, enabling to achieve greater efficiency and faster execution. We now expect to grow around 5% year-on-year instead of the previous 6%, not including around EUR 15 million of additional costs for growth initiatives and around EUR 1 million for the pan-European platform setup cost. Cost-income is expected in a range between 26% and 27% thanks to the scalability of our platform and strong operating gearing. The cost of risk is expected in a range between 5 and 10 basis points. Payout ratio is expected in a range between 70% and 80%. On leverage ratio, our goal is to remain above 4.5%.
Finally, our commercial growth is clearly entering in a new dimension, with net sales and new client acquisition set for a record year. Moving now to slide six. For 2027, we expect a further improvement in our growth and operating leverage. On revenues, net financial income, solid growth thanks to the positive trade-off from the combination of better reinvestment yield of our bonds running off and our level of stable deposits, which is the highest in Europe, and higher rates. Investing, solid growth of revenues thanks to the combination of net sales and mix improvement. Brokerage, continuation of the strong momentum thanks to the higher assets under custody and the enlargement of our active investors. Banking fees increasing year-on-year. We expect operating cost trajectory to materially improve year-on-year thanks to our internal control of data and processes.
We are rapidly translating our IT internal know-how and 2026 technology investments into tangible benefits with very low incremental cost. This is delivering stronger-than-expected operating leverage, and for 2027, we expect the cost-income to decrease year-on-year. Payout ratio is expected in a range between 70% and 80%. On leverage ratio, our goal is to remain above 4.5%. Finally, we expect the strong momentum of our net sales and client acquisition to continue throughout 2027. Moving to slide seven. On February 10th, we will update our 2029 multi-year plan. The key drivers are, first, our growth has reached an inflection point with better-than-expected net sales and new clients. Second, further steps to monetize our growth and progressively aligning our EPS trajectory to our commercial growth.
All the mix of our net sales is contributing positively to our revenues, and we see an acceleration to our initiatives monetizing assets under custody and an improvement in our assets under management mix. Third, Fineco enjoys stable deposits with a zero beta, leading to a better net interest income , thanks to, number one, a cost of funding close to zero, driven by the highest level of stable deposits in Europe, and number two, deposit trade-off from the combination of better investments yield of our bonds running off, deposit net sales, and higher rates. Fourth, we expect AI-led operating jaws with a further slowing down of cost growth as we are redesigning the backbone of the bank. Also, we are deploying AI to our network and clients, driving for a better mix and higher engagement. I'll now hand to our CFO, Lorena Pelliciari, to dive in on results and numbers.
Thank you, Alessandro, and good morning, everybody. Let me start with slide nine with our P&L. Our diversified growth continues to translate into earnings increase, demonstrating the operating leverage and scalability of our platform. We recorded a broad-based growth across all three business areas, all increasing double- digit. Banking revenues up by 11%, investing by 12%, and brokerage by 13%, resulting in overall revenue growth of 12%. At the same time, we maintained strong cost discipline. Moving on slide 10 on net financial income, the 10% year-on-year increase in the first nine months reflects the structural quality of our banking business. In the third quarter, net financial income was 15.5% higher year-on-year and continued to increase sequentially. A key driver remains our highly valuable transactional deposit base with a cost of deposit close to zero.
This means that deposit growth translates very efficiently into revenues, allowing us to generate profitability across our entire client base, including small banking-only clients. At the same time, the short duration of our bond portfolio provides additional visibility. Around 70% of the portfolio will mature by 2029, giving us a significant opportunity to reinvest at higher yields. Overall, net financial income continues to benefit from higher rates environment, volume growth, and by the progressively repricing of the securities portfolio while maintaining a very conservative risk profile. On the right, you can see the solid dynamics of our deposits, despite the significant level of clients' investment during the period. Let's now move on to slide 11. Here, we provide a deeper view of the nature of our deposit base. The value of our deposits comes from their deep connection with the daily use of our banking platform.
This translates into a very low cost of deposits, together with the high stability and granularity. We have around EUR 32 billion of predominantly retail deposits, with a median balance of approximately EUR 4,000 and an average balance of around EUR 16,000. On the right, we provide a benchmarking based on Pillar 3 disclosure and EBA risk dashboard. Fineco is clearly an outlier, enjoying the highest level of stable deposits, 73%, of net stable funding ratio, and of liquidity coverage ratio across European banks. Our loans to deposit ratio is only 17% compared with an EBA average above 100%. This is an important feature of our business model. Our deposit base is not used to support large illiquid lending book. As a result, our deposits underpin a highly liquid and low-risk balance sheet while preserving a valuable source of recurring revenues. Let's now move on slide 12, investing.
Investing revenues increased by around 12% year-on-year, driven by increasing volumes. The growth of asset under management remains consistent with the structural demand by clients for more transparent and explicit fee solution, which now represent 55% of our asset under management. Going forward, the bank will focus on further improving the asset under management mix through wrappers with significant potential from both insurance and Fineco Asset Management solutions. On insurance wrappers, the partnership with CNP enhances the quality of our proposition, supporting higher marginality. Fineco remains relatively under-penetrated versus the industry in the segment, the segment in insurance segment, leaving meaningful room for further development. At the same time, we are expanding our Fineco Asset Management wrapper proposition. Let's now move on slide 13 for a focus on brokerage.
Brokerage continues to deliver strong growth, with revenues up 13% year-on-year and average monthly revenues reaching EUR 23.5 million compared with EUR 16 million in 2023. What is particularly important is the expansion of the underlying asset base. Asset under custody reached EUR 66 billion, almost doubling from EUR 6 billion in 2023 and growing at a compound annual growth rate of more than 23%. This growing asset base represent a significant embedded opportunity. It expand the pool of assets available for monetization, while several initiatives are progressively increasing our ability to capture value across the brokerage value chain. Going forward, we see the opportunity to continue growing the asset base while progressively increasing the value we generate from it. Let's move on slide 15 related to capital ratio.
Fineco once again confirms a solid capital position well above requirements, reflecting the strength of our safe balance sheet and the capital-light nature of our business model. Liquidity is also extremely solid, with both liquidity coverage ratio and net stable funding ratio well above regulatory requirements and among the highest levels in Europe. Overall, we continue to combine growth, profitability, and a very conservative risk profile while maintaining one of the strongest capital and liquidity position in the sector. This gives us significant strategic flexibility. We can finance growth initiatives, maintain a generous and sustainable ordinary dividend policy, and continue to assess the most efficient usage of capital over time. Thank you for your attention. Now I will hand back to Alessandro.
Thank you, Lorena. Let us move to slide 17. Fineco benefits from a unique market positioning, fully capturing its long-term growth opportunities. On the left, we show our market share on the addressable financial wealth, which is still very small. On the right, we summarize the key structural trends that are reshaping the industry and reinforcing our strategic positioning. First, AI disruption, which is driving for higher transparency, financial services, and higher productivity. Second, the massive generational wealth transfer with new generations looking for efficiency, transparency, and convenience. Third, the consolidation in the banking industry with traditional banks not really focused on customer experience. Fineco sits exactly at the crossroads of the structural trends. On slide 18, we show a clear example of our distinctive positioning compared to the industry, focusing on investing. Fineco is a clear outlier in the Italian market.
This is reflected in the great quality of our investing revenues that are driven by recurring management fees based on a fair pricing with no performance fees and negligible upfront fees. This is marking a clear difference in the long-term sustainability of our investing revenues compared to the system. As you can see on the right, other players are not just applying performance fees on top of highly expensive investment solutions, but they are also pushing strong on upfront fees. Fineco's position on the other side, and moving to slide 19, you can see that this is leading to an inflection point in our net sales and new clients. Total net sales remain the most important KPI for evaluating our growth.
Fineco is a unique platform and answers a broad range of clients' financial needs, which results in a very solid profitability across all our product areas, regardless of the asset mix. Transactional liquidity contributes to our capital light and industrially driven net interest income. Asset under management leads to higher investing growth, and asset under custody net sales are a key driver for our brokerage revenues. Finally, down in the slide, we show very remarkable results. We coupled the strong acceleration in new clients acquisition with a better quality on per capita net sales. I will now hand over to our General Manager, Paolo Di Grazia.
Thank you, Alessandro, and good morning, everybody. On slide 24, we focus on the initiatives to fully unlock the value of our asset under custody and increase our brokerage revenues. First, our activity in extracting value from our clients' flows. Here, we are recording higher internalized volumes thanks to the wider clients base and to more sophisticated internal models. Second, the Auto-FX, where we are seeing better-than-expected increase in volumes. And third, the securities lending platform, which has been just launched, and we are now ramping up the relationship with the institutional player, and volume are progressively on the rise. Also, we are finalizing talks with regulators for our crypto offer.
On the right, we show the strong upside potential for these three initiatives to our brokerage revenues, and their contribution today is progressively building up, and we are very confident that they will become increasingly important going forward. Let's now move on slide 25 to dive on ETFs. Fineco is uniquely positioned to capture the strong client-driven shift toward ETFs. For a player like Fineco, this business represent a strong growth opportunity and a new revenues engine for brokerage and investing, thanks to, first, our efficient trading platform that is building up strong volume. Second, our distribution model based on advanced advisory solution with an explicit fee, where ETFs are synergetic with no significant harm to our margin and profitability. On the left, you can see the strong acceleration in revenues from ETFs, with nine months already ahead of full year 2025.
The stock on our platform is quickly on the rise and now is close to EUR 24 billion, gaining strong traction both among clients supported by our personal financial advisor and among direct clients. To further monetize ETFs, we are acting on several levers that you can see listed below in the slide. Let me just only point that the data platform fee is now live and running. Let's quickly move to slide 26. The plan for the deployment of our pan-European platform is progressing according to the plans, and we expect to launch the pan-European platform in early 2027. Moving on slide 27, we summarize the deployment of AI on our platform. Let me now briefly summarize the most recent artificial intelligence initiatives. The first, we're continuously updating our AI assistant for our personal financial advisor, and recently we introduced the wrappers into our Portfolio Builder.
Second, we are live with the Brokerage Copilot that will improve the awareness and engagement of our direct clients. We're already starting to see the first evidence that this tool is leading clients to the order execution. Moving on slide 28, phase one is already consolidated. AI is live for our advisor and our clients. Phase two is where we are now with the launch of the project BOOST, our bank operational optimization and simplification track. We are reviewing all processes to make them faster, more scalable, and more cost-efficient, and we are doing it AI native. We are not just automating what already exists. We are redesigning it. The initial focus is on these main areas. So the first, operations, of course. The back office of securities brokerage and banking and CRM are redesigned from scratch.
Second, control functions, audit, compliance, AML will move from periodic checks to continuous predictive monitoring. Third, cross-functional processes where AI agents work by task rather than by department. This basically will deliver, first, operating leverage with volumes growing faster than costs, structural efficiency with processes built to scale, stronger risk control because we will move from an ex-post to early controls, and eventually better service for our clients as all the efficiency we are going to gain internally will result, for sure, in better customer experience. In short, more scale, more operating leverage, and better client engagement. Thank you for your time, and Alessandro, please.
Thank you, Paolo, and thank you all for your attention. Now we can open the Q&A session.
Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. First question is from Andrew Lowe, Citi.
Hi. Thanks for the helpful presentation. I had some questions in two areas. The first is on deposit levels, and the second is on securities lending. Could you just talk a little bit about how the level of client cash deposits has evolved this year, particularly among your larger clients? It looks like your average deposit size has come down very modestly from EUR 17,000 to EUR 16,000 this year, while the median has remained flat. You have obviously seen net buying all year accelerating in October, which is in line with peers. How do you expect the deposit balances to evolve in the future as rates rise? Then with your 50% figure of clients that have salary and pensions paid into your platform, how does that compare to history, and what are your expectations here for the future?
On the securities lending, could you maybe just give a little bit more color on this rollout? What are the average yields so far captured by you and your clients? Is it a 50/50 revenue split? If you could give us an idea of the utilization now and in the future, that would be really helpful. Then, sort of follow up on that point, just in Germany, do you expect to be able to offer securities lending in Germany next year when you launch, or will you be bound by German regulation that prevents that from happening due to requirements about each transaction being approved rather than a single approval per client as required by Italian regulation? Thanks.
Let me start by answering your questions on deposits. What is extremely important to underline is that what we expect in terms of impact caused by rising rates, clearly rising rates are making the clients more efficient in better deploying their liquidity. What is key to look at is the percentage of the stable deposits you have in the bank, because the stable deposits are clearly attached to the are, in the bank for technical reasons. Clearly they are sticky, and they are completely not driven by rates. The higher is the percentage of the stable deposit that the bank has, and the more positive is the trade-off between the rising net interest income that is driven by the stock of deposits and the possible negative impact caused by a slowing down of the process of accumulating additional deposits.
This is exactly very clearly demonstrated by the evolution of our net interest income that has kept on increasing year on year faster than on the average experienced by the most part of the other banks. We expect that this situation continuing going forward. Clearly, if we have rates keeping on going up, clearly, what you can expect is an additional acceleration in terms of contribution of net interest income coming from the component that is stable in the bank, a possible additional slowing down of the progression of deposits. But overall, the trade-off is going to remain massively positive, and this is the reason why we are guiding for a solid increase of the net interest income going throughout next year.
The rich clients that usually are the most active in capturing the opportunities offered by the market, clearly they have experienced over the last few years, an experience and significant decrease of the percentage of the liquidity on respect the overall financial assets. Because during the period of 2022, at the peak level, they had 23% of liquidity as a percentage of the overall assets. Now they are in the region of 8%. This means that clearly the room for them for keeping on investing even more is clearly narrowing. In fact, the most large part of the new investments made by the clients are also sustained by additional liquidity that the clients are bringing into the bank. But this is quite evident if you look to the evolution of our net sales.
Clearly, during, for example, October, that has been an October that, as expected, has been a month characterized by the placement of the BTP Valore that, by the way, our clients, they bought EUR 750 million of BTP Valore. Then we had also the impact caused by the rising rates that has made the clients more active. Overall, nearly EUR 1.9 billion of assets in the custody bought by the clients, but just with a negative impact of EUR 650 million. That means that clearly the rich clients are not just investing the liquidity they have, but they are bringing more liquidity. This clearly is going to become even more evident going forward. On the securities lending, I don't know, Paolo, if you want to give a little bit more of color on what's going on.
Yes. Basically, now we are live with the platform. We just started, so we have just one counterparty inside onboarded. We plan on onboarding several more counterparties. Only a small part of the available stocks to lend is used because we have just one counterparty. We plan on onboarding new player basically in the next months. For now, we are very happy with the functionality of the platform, and we just focus 100% on onboarding more counterparty, institutional counterparties. You will start seeing better numbers in the next months.
On Germany, we are not planning to leverage on securities lending exactly for the reasons you were raising, that it's in the German market, the processes are much more complex.
Thank you very much. That's really helpful.
Next question is from Enrico Bolzoni, JP Morgan.
Hi. Good morning. Thank you for the presentation and for taking my questions. I wanted to start with a question on cost, please. You upgraded your guidance for this year, which is clearly good to know, and you hint that basically there is going to be an upgrade in a way to the guidance for 2027 because things are progressing better than expected. Can you please help me to unpack a bit the cost growth for 2027 in light of what you announced? You are guiding now for 5% instead of 6% of, let's call it, underlying cost growth, and you now say that for next year it's going to be better. Then on top, we add the expenses for growth initiatives that I believe you guided that the CMD should be in the range of EUR 5 million beyond 2026.
On top of that, there is the expenses for the expansion in Germany that should be between EUR 5 million and EUR 10 million. I am just curious to understand about these two other components. I know that for the underlying cost growth, I should expect less than 5%, but what about these other two, especially with respect to Germany, because you downgraded also. You upgraded, so you reduced your cost for the German expansion in 2026 to just EUR 1 million. So how much should we expect in 2027? I hope my question is clear. Then I wanted to ask you about the saving and investment accounts, because I think it was quite very good news for Italian savers that the government with the budget a couple of weeks ago basically said that they expect to launch this product already in 2027.
This would be a bit equivalent to the ISA in the U.K. or the ISK in the Nordic region, which are tremendously popular. I just wanted to hear from you in terms of what sort of impact you expect from the launch of this product. Is it something that you would be able to offer easily on your platform? Do you think it will accelerate further your growth, or perhaps are you a bit concerned that maybe traditional banks will use this as a way to slow down the bleeding of customers to you and to the other asset gatherers? Finally, I just wanted to ask you about the. I see you have this ETF accumulation plan that you have been mentioning for a few results now. Can you give us some numbers around it?
I suspect it can be quite popular, but how much money you see flowing into these, and what is the current level of, let's call it, annualized flows that you expect from these accounts? Thank you.
Let me start by the cost upgraded guidance. What is very important to underline that Fineco is in a quite unique position for leveraging on the huge dividend that is emerging by the evolution of technology, mostly artificial intelligence, but not just like that. The dividend is huge because in terms of improvement of the services you are providing to your financial planners and clients, and clearly it can be also extremely relevant in terms of recovering of the cost efficiency. Fineco is in a unique position because for capturing this dividend, what is really key is not the amount that you are spending. But what is key is to be able to get easily high-quality data, to have access easily to a very high-quality base of data. Second, you have to be in control of your processes.
Clearly, this is possible just if you are really in control of your technological infrastructure. This is our case. This, for example, is not the case for the most part of the industry. This is the reason why everything is happening faster and in bigger dimension than we were expecting. We probably, everything is moving extremely rapidly, and we are really, very positive there. Clearly, we are going to give an even more precise quantitative indication during the presentation of the revision of the plan. But clearly, what is emerging is really amazing. We think that this is giving to us the opportunity to put in place an absolutely gigantic operational gearing. This clearly is also reflected in our plans in terms of cost for setting up and maintaining the pan-European platform.
Clearly, we had the possibility to reduce our expectation in terms of cost there, because the improvement that we are putting in place in term of, thanks to the technology, is clearly playing a role as well there. I don't know, Paolo, if you want to spend also a few words.
Yeah. We already started optimizing processes and tasks also related to the new project abroad. Some of the savings are because this, and some other we will spend it maybe later in the next year. The big part is the fact that we saved just because we optimized the processes. This is what we are doing also for the Italian business, not just the pan-European business. The pan-European business is what you see is due to the fact that we already started optimizing it.
What probably the market is still, generally speaking, underestimating is the potential represented by the dividend that these new technologies are bringing to you. Clearly, what is key is to be in the right position for capturing the dividend. Regarding the expected launch of the product for the newborn, this is going to be completely immaterial in terms of impact of the industry, considering that if you make a very rough calculation, EUR 100 multiplied for more or less 350,000 newborn in a year is, we are talking about an absolutely negligible number. Clearly, it's an extremely positive initiative because it's giving much more in terms of the kind of message that it's transferring to the Italian families, that there is an idea to support who is the newborn, and second, that how is important to plan on the long-term investments.
In terms of potential impact, in terms of revenues and so on, we are talking about something that it's absolutely negligible. Paolo, I don't know if you want to spend a few words on the ETFs accumulation plan.
Yeah. The accumulation plan, they are doing, of course, great, especially among the younger clients. The lion's share of the flows are made by financial planner. They are using ETFs as a basic pillar for the asset allocation of their clients, and also direct clients, they are using ETF to modify the allocation of their existing portfolio or new portfolio. Of course, on the side of the financial planner, self-directed client, the flows are coming, so they are coming in very nicely, but also the younger generation is bringing flows. Of course, they are not that big like the other part that we were talking about, but we see, of course, a strong growth on both sides.
Can I sorry ask, thank you for these answers. Can I just follow up on my previous question on the saving and investment? Because I appreciate that there is this proposal of the EUR 100 per newborn from 2027, but I also saw that there is this proposal of a way more comprehensive type of account where Italian investors will be able to put up to EUR 20,000-EUR 30,000 per year and de facto have an account which is completely free from taxation on capital gain and income tax. And I saw that the government is considering various proposals from various associations, including ABI, Assogestioni, Assoreti, with a launch targeted for 2027. So I was more referring to this account, which I suspect could be more impactful than the EUR 100 per newborn.
No, this is a good point. The characteristics of this solution is still under discussion, as you are correctly underlying. And so the success or the failure of this solution depends on the solution that is going to be chose. What is important that just purely leveraging on the fiscal incentive is not enough. Clearly, if you look to the past experience represented by PIR, clearly the point of weakness, clearly there have been, number one, the short-term horizon. Because a five-year horizon for this kind of investment is too short. But I understand that the more you extend the time horizon, the more expensive it's becoming for the state. Second is the broadness and the availability.
So, for example, if you look to the Swedish scheme, the Swedish scheme is extremely broad, making no distinction, leaving people to invest where they want, and at the same time, they have on real-time accessibility to their account. So they're not forced to stay there for a very long period of time. It's leaving plenty of freedom. And so clearly, it depends by the kind of solutions that are going to be picked up. So it's too early to say if this is going to represent something really important or not, in terms of impact on the industry.
Thank you.
Next question is from Christiane Holstein, Bank of America.
Good morning. Thank you for taking my questions. I have three of them. Firstly, I understand you are going to quantify 2027 guidance and also your guidance upgraded outlook statements at the 2026 results. I was just wondering if you could give us any indication on how you are thinking about the type of guidance you will give. For example, will you be giving a bridge for the different growth drivers across the business to achieve the low double-digit EPS guidance? My second question is on customer growth, which has again stepped up. I was just wondering how much of this was a one-off BOOST from the BTP Valore versus continued growing momentum, or is this trend just still continuing to build? My third question, sorry, is on the German budget.
I know you lowered it to EUR 1 million, and you mentioned before partly because of technology and AI, but the budget of EUR 5 million was already quite low, so EUR 1 million is very minimal. I was just wondering how you are thinking about marketing now and new product launches specifically for Germany, and just how you are going to build market share there. Thank you.
Regarding the precise quantification of the 2027 guidance. At the moment, we are giving more qualitative guidance on 2027. Just as summarizing, we expect a material improvement in the cost trajectory, and we expect a solid growth of the net interest income, and then solid growth as well by the asset under management , and brokerage keeping on doing extremely well. For example, on the cost side, this is an evolving story, as we were saying. It's the opportunity that is emerging, it's really huge, and clearly, it' s progressively going to become more evident the dimension of this opportunity. Our goal is to have the possibility to give even more precise numbers at the beginning of February. Overall, what is clearly evident that the cost trajectory is expected to keep on going down quite significantly.
The strong momentum of growth is going to stay, this is going to keep on sustaining solid growth on all the three components. Regarding the net interest income, as I was discussing with your colleague, clearly Fineco is enjoying an absolutely unique gearing because such a high percentage of stable deposits means that we are completely immune by possible competition on deposits. We are also enjoying a very positive trade-off in the case of rates rising, the trade-off between the positive impact on the stock of deposits and the negative one caused by a slowing down deposits. Everything is playing absolutely very well. For giving you a more precise from a quantitative guidance, you have to be a little bit patient, waiting for the beginning of February.
The customer growth, this is not absolutely a one-off. We are not surprised by this because this is current with the unique positioning of the bank. I would like to just remind Fineco is characterized by being the only large established and trusted bank in Italy that is offering at the same time efficiency, transparency, and convenience. It' s a blend of an established bank together with a neobank. Nobody else is competing with us with this positioning. On the sustainability of the customer growth, I don't know, Paolo, if you make some comments also on the further improvements on the onboarding process of clients, for example.
We don't use promotion, we don't use interest rates to attract clients. This is the third year in a row that we do great on customer acquisition. We plan on going in that direction very strong also in the next years. It's just the right moment for us. It's where people are just looking for offers like Fineco offers, banking that works, that really works. At the same time, having a possibility to invest by themselves directly, but also having a possibility to have a financial planner. It's definitely a unique combination, we are just alone in Europe having this proposition. I personally see an acceleration, so the growth is absolutely sustainable.
Paolo, if you had to add something more on the budget.
Yeah, we can
set up cost for Germany.
We can give a bit more color on that. The big savings that we did is basically, just to be very honest, we used massively AI to code. So basically, coding is much, much cheaper than a year or two years ago. We used to code to, w e still code to build our applications, to build the application for the final client, for the customer care. And right now, the coding is really much, much easier and much cheaper and faster, most of all, than before. So we had a huge improvement there, and we will have a huge improvement also in the Italian business. But the spending in Germany, we will focus, as you said, we will focus on marketing. That's the place we were going to spend money, but we will give more focus on the Capital Markets Day in February for that.
Great. Thank you.
Next question is from Giovanni Razzoli, Deutsche Bank.
Good morning, good afternoon, sorry, to everybody. Three questions on my side. The first one is clearly we have to ask the impact of the Budget Law in Italy, or the draft Budget Law in Italy. No one bank has so far provided the kind of guidance whether it's going to be a low impact, low single- digit, mid- single- digit, or high single- digit impact, nor indication on the tax rate. I wonder if you want to be so brave to be the first one to provide an indication of what could be the impact if the draft Budget Law is confirmed as it is. The second and the third questions are more company-specific. The second one is on the financial wrappers that you have mentioned.
I wonder whether this is a new, as a part of your improving AUM mix, I wonder whether this is a new initiative or whether you plan to increase the penetration of some existing products, like the passive underlyings, because you mentioned also these top 20 wrappers. I was wondering what is the combination between new initiatives and increased penetration of existing products or solutions. If you can please clarify what is the fee structure of any new initiative and how it does compare, for example, with a plain vanilla fund product, and what kind of value is those financial wrappers adding, I guess, apart from the possibility to compensate losses and capital gains on ETFs.
The third and last question is a more broader comment on the evolution on the average deposit per account. You have already mentioned about the stickiness of your stable deposits in both absolute and relative terms. If I look at the trend over the last six or 12 quarters, there has been a steadily decrease in the average deposit account to below EUR 60,000, which continues to go down. Clearly, the average deposit account reflects a combination of many factors, the cash shortage. You mentioned the private clients moving cash or reducing the cash balances to investment products. I also think that there is a component of relatively small add-ons in terms of new assets per client. I would like to know if you can please elaborate on the profile of the new clients that you are adding and whether my understanding is correct, so that you are adding relatively small and younger clients.
It makes it for you more difficult to monetize those clients other than the NII in the medium- term. Thank you.
Oh, thank you. Let me start by the impact of the budget. We share the same position of the other banks because clearly it's considering that everything is still a moving picture. It's really, we think that would not be serious to try to calculate exactly the potential impact because the story is not finished yet. We have to wait. We don't have enough fixed elements for making an evaluation like that. On the financial wrappers, and clearly these are- Just as the financial wrappers are represented, there is on one end what you are correctly mentioning, the passive underlying provided by FAM, top 20, but also we have the insurance wrappers. The insurance wrappers are great products for clients because they are incredibly efficient from a fiscal point of view.
The real point of weakness of these products that usually they are provided by the industry with an absolutely out of the roof fees that at the end of the process is making the product not so great for clients. Clearly, Fineco is approaching this currently with our positioning, so with a fair and transparent pricing for our clients. What we are doing, we are just investing and pushing for educating the network regarding the much bigger efficiency represented by the financial wrappers, because as you were correctly underlying, financial wrappers are incredibly efficient from a fiscal point of view. They are incredibly efficient in terms of capability of keeping on balance the portfolio of clients.
At the end of the story, they are offering a better fiscal efficiency and better quality of the portfolio, and is helping financial planners in not wasting time in activities that technology can do much better than them. Clearly, we expect that this is going to represent an interesting evolution supporting our fees, and in the guidance, we are mentioning this as an important pillar. We expect a continuous improvement of the mix of what we are. Yes, you have to expect less traditional plain vanilla solutions offered by Fineco Asset Management and more financial wrappers, because clearly it's much better for the clients. In terms of the fee structures, clearly these products are much more interesting for the bank than the so-called traditional plain vanilla solutions.
On the evolution of deposits, yes, there has been a steady decrease of the average deposits of the latest quarters, mostly driven by the upper end of the market, the rich clients. This clearly is perfectly current with what is going on, because what is important to remember, if you look to our base of deposits, we have a percentage that is represented by clear, stable deposits, and these clearly are completely rock solid, very sticky. The beta is zero there. Fineco has the largest percentage of stable deposits among the European banks, and this is what is making us extremely relaxed and confident regarding the evolution of the net interest income , whatever is the evolution of rates.
There is a remaining part that is represented by liquidity that is just there because it is waiting for better opportunities, and progressively, the better opportunities are represented by higher yields and correction in the markets. Clearly, over the last few months, the clients, they have taken these opportunities. Overall, the trade-off between the positive impact that is generated on the stable base of deposits and the negative impact caused by possible reduction and slowing down of the remaining base of deposits is massively on the positive side. This clearly is very clearly demonstrated by the evolution of our net interest income . Clearly, we expect that this situation is going to stay that way. There is another very important point that also the existing clients, clearly, they are contributing with additional liquidity in the bank.
The net sales of the bank are supported both by the new clients, but both as well by the continuous increase of the share of wallet of the existing clients. This clearly is perfectly current with the positioning of the bank, because more and more clients we have, particularly the rich clients, are clients that we are sharing with other banks. These clients are progressively realizing that Fineco is offering a combination of efficiency, transparency, and convenience that is not available in the other banks. On the new clients, the clustering of new clients we are acquiring is, there is on one end, the two classes that are growing the most are the young clients, that clearly are represented by having smaller account, but also them are contributing to the transactional liquidity because these clients are using in a big way the transactional banking.
The other cluster is represented by the rich clients. If you go throughout the presentation we are giving to the market, Fineco is outpacing the private banking industry in terms of growth by more than 3x . Fineco is growing 3x faster than the industry in the private banking. We are getting on board in a significant amount of new private banking clients. Clearly, they are small in terms of number of clients, but they are big in terms of assets. This is mostly driven by the Fineco is in the front row in capturing the generational transfer. The new rich clients are looking more and more at Fineco.
Next question is from Gianluca Ferrari, Mediobanca.
Yes, good morning, everyone. Three questions for me, please. The first one is on the AUC monetization initiatives. Analyzing the performance in the nine months, you are still growing 20% per year, so I was wondering if the 23% CAGR, or let's say the 20% embedded in 2026, is a run rate we can expect over the next three years. The second is on Lombard lending overdrafts. There is a nice re-leverage, thanks, I guess, to the steepening in the yield curve. I was wondering if the EUR 2.8 billion overdraft is expected to grow further next year, and if you can remind us the margins you are having on those Lombard loans. And the third and final one is on cyber risk. We are seeing more and more frequent attacks, even one in Europe yesterday.
I was wondering what are the managerial actions we are putting in place to manage this risk. Thank you.
On the AUC monetization, clearly we have plenty of activities underway, so our goal is to accelerate even more what can be brought by these initiatives. Clearly we. I don't know, Paolo, what do you think about that?
Yeah. I think the more the flows we will attract, the more the clients we have, and the more the monetization will come easier for us.
We are positive on the future evolution of the CAGR of the new initiatives. On the Lombard loans, we expect that the growth is going to keep on being very strong, because clearly what we are offering is extremely compelling, both in terms of functionality and in terms of conditions we are offering to the clients. It's an absolutely very interesting product, also by the margin point of view, and because it is incredibly efficient in terms of cost of risk that is practically close to zero. Also, it is significantly lighter in terms of capital consumption business respect other lending business.
The margins, overall, they are not too. If we consider the overall, because we are measuring the margins, considering the opportunity cost represented by the. Because respect our investments on the three years maturity govvies, and then adjusting this for the usage of capital, overall, it's competitive with these kind of margins we can get by investing on the three years maturity govvies adjusted for the consumption of capital. Cyber risk, it's a big topic. Probably is the most important point of attention of the ECB right now, and all the banks are exposed to that. Nobody is immune, so everybody can be a victim of this cyber risk. Clearly, you can be more vulnerable, less vulnerable.
It's by definition, the more you are in direct control of your IT infrastructures, and the higher is the probability that you can manage more effectively, more rapidly, and the cyber risk. The more you are relying on outsourced services or you have external providers of services, clearly, all the infrastructures becomes weaker. Recently, all the most important and relevant cyber incident has been caused by failure by external provider to services to bank. As I was saying, nobody can claim to be 100% immune, but clearly, the more you are in control of your IT and technology infrastructures, and the higher is the probability you can properly manage this kind of risk.
Thank you, Alessandro.
Next question is from Elena Perini, Intesa Sanpaolo.
Yes. Good afternoon, and thank you for taking my questions. I have two left. The first one, you mentioned before the comparison between you and the neobanks. Now we are seen several press articles about the impressive growth made by Revolut, and there are also other players in this space. How do you manage the competition with them? In which client segments do you perceive it more, and so on? If you can elaborate a bit on this. My second question is on your NII slide in the back pages, basically slide number 37. You still have some contribution to the NII from the tax credit. Now it' s reducing, and I was wondering if you can provide us with a runoff timing, will be 2027, or we will see it for additional quarters? Thank you very much.
Regarding our, let me say, interaction with the neobanks and neobrokers, clearly, as we were several times describing to the market, is that we are not in real competition with them. We can say that we are complementary to them because the neobanks are clearly characterized by offering to clients usually great services, efficient, very aggressively priced. At the same time, they have a couple of points to fix. Number one, they have to keep on broadening their offer because in the most part of the cases, it is extremely vertical, so they have to keep on broadening, and this clearly it is a journey that they have to make. Second, and this is definitely the most important, they have to keep on making their journey for becoming eligible for attracting the decent, large, and good money.
This is a process that usually. It is a process we know very well because also at the beginning of our story, people there, the typical talk about us was good services, good guys, but I am not sure that they can trust them for putting their big money. We are not competing. I mean, when I say that we are complementary because we are on the same line, because we are pushing exactly in the same direction, in trying to convince the Italian families that there is an alternative to traditional banks, an alternative represented by efficiency, transparency, and convenience. The more these guys are pushing, the more they are helping in making the pie bigger.
The opportunity is so huge, so large, that for us, the priority, clearly the concern is not if these guys are doing a good job or not. The priority is to make the pie become the biggest possible and the fastest possible. The presence of these players is helping in making the pie much bigger. Also, if you look to the kind of services that are used by the clients, you were mentioning Revolut, there is completely no overlap with the services we are offering to our clients. For us, it's first, number one, is a great ally in changing the system, so very well welcome, and it's a great opportunity of having some really powerful benchmark for improving our operations, for example. I don't know, Paolo, if you want to spend also, there are some words there.
As Alessandro said, for us, Revolut is a model that is pushing our model. We are acquiring a lot of clients from Revolut. They just start on Revolut using as a payment gateway, payment platform, and then they also switch to Fineco to invest their money, if they have more money, and they leave to Revolut maybe a few hundred euros to use it as a payment gateway. Also, we have a Fineco client, they are using Revolut as a payment gateway. Maybe when they travel abroad and they put maybe, again, a few hundred euros in Revolut to use it with a digital virtual card. For now, it's like a symbiotic relationship, where we gain from the relationship. We extract value from the relationship, and we will see in the future, but for now, we are very happy with that.
On the tax credit contribution net interest income, in the guidance we are giving to the market of a solid growth of the net interest income is embedded the progressive runoff of the tax credit, clearly.
Next question is from Alberto Villa, Intermonte.
Thank you for taking my question. Just two very quick one. One is back on the BOOST project and all the AI initiatives that could really help you have efficiencies on the cost side. I was wondering, can you give us some more color on that, especially in terms of cost-income ratio that could be achieved by an organization like yours in the long run, given that you are already much more efficient than the rest of the traditional banks? Maybe paradoxically, it seems that they have more opportunities to get advantage from the new technology compared to you, but probably you, as you mentioned, controlling the platform, the technology, you may have some more levels to have a bigger benefit. The second one is a quick one back on the budget law. It also include an increase of the financial transaction tax proposal.
I was wondering if you think it could have any impact on your brokerage in the past, how it has been taken by clients and so on. Thank you very much.
On a few comments on the BOOST project, it's clear that, as we were saying, if you are in the right position, again, and a great base of high-quality data, easily accessible, full control of your processes, the dividend that is emerging is absolutely gigantic and huge. Clearly, this can change completely the structure of the cost of all the players able to capture this dividend. Fineco is clearly there. We are not meaning that we pretend to be the only one being there, but at the moment, we are there. Clearly, this is opening the room for bringing even further down the cost-income ratio. Not because you are under-investing, or just because you are taking the dividend that you have on the table.
This is the very simple point, because then we can spend a lot of time in describing what can be done or not, but clearly, this is evident. Sometimes when we are looking to the potential, we are really impressed. This is going to change completely the way the operational activity of a bank are run. But what clearly is key that you are not just If you are just automatizing a process, this is just a small piece. The real difference when you are rewriting completely the way your bank is working. And clearly, this is possible only if you have these two prerequisites in place: control of data and control of your processes. Otherwise, there is no way that you can fully capture the dividend. The budget law is including the increase of the financial transaction tax.
What is going to happen is exactly the same that has happened in the past years with the introduction of the tax. This is going to just keeping in accelerating the move of the clients in direction of the other markets. The real damage is going to be represented by the even increasing, excuse me, the further decrease of the liquidity of the Italian markets. The clients are just becoming, are progressing, are accelerating in using the other markets. So investing in the other markets, particularly the U.S. markets, that is, at the end of the story, is not such a bad news because it is even more profitable, but this is exactly the same. The only real sizable outcome of this is going to make the Italian capital market even less efficient, but completely no impact on the potential revenues generations of our clients.
Thank you.
Next question is from Ian White, Autonomous Research.
Hi there. Thanks for the presentation. Just two short follow-ups from me, please. Appreciate you are not yet in a position to do a full quantification of what is going on with the budget proposals, but at this stage, should we be thinking about a tax rate of 36% for next year, i.e., another 3 percentage points versus where we are kind of running in 2026? That's question one. And just in terms of your points around the cost income improvement for 2027, what are you embedding there in terms of three-month Euribor expectations? Are you still haircutting market implied rates there when you are getting to that conclusion, please? Thanks very much.
Yeah, on the tax rate, again, we stick.
According to the 2026 Italian.
Please, Lorena. Please, Lorena.
For 2027, we can confirm a tax rate at 35% according to the Italian Budget Law 2026. We have to wait and to apply the 2027 Italian Budget Law.
On the cost-income improvement for 2027, then of three-month Euribor, what we are using is a curve.
We are using the curve provided by Moody's, which is slightly below the forward rate curve.
Yeah, it's more conservative.
It's more conservative.
Usually, we are using Moody's. It tends to be more conservative than the forward rate curve. So, what our expectations is for is lower respect to what is you can find in the forward rate curve.
Okay, thanks.
Next question is from Marco Nicolai, Jefferies.
Hello. I have a question on the securities lending front. I appreciate your comments that you already gave. If I look at slide 24, securities lending EUR 4.7 million in 2026, basically you are trending in line with 2025 and below where you were in 2023, 2024. I am just trying to understand from this front what we can expect for 2027. Are you going to see, are you going to post increasing revenues compared to 2025, material one or not material? Can you give us a little bit more on this front?
Yeah. First of all, I don't know, Paolo, if you agree, what is important is when you are talking about the initiatives that we are developing for increasing the monetization of the asset under custody, probably it's also important to make the right ranking in terms of relevance. Because we have the initiatives are not all the same. Some initiatives are expected to have a significant impact in terms of increase of revenues by the asset under custody, something a little bit less, and some. I don't know, Paolo, if you want to give the precise rank.
Yeah. The precise ranking is very simple. The first place you see the monetization from the flows. This is probably where we are going to expect a big contribution improvement. The second is the Auto-FX that is already doing very, very well, and we have a huge space there. The third is securities lending, and then the rest of the optimization that you have in the presentation. Going to your question, basically, it all depends on how fast we will be in onboarding new counterparties and also the market condition, because securities lending is depending on these two basically point.
We can say that on securities lending, we are not really started yet, because as Paolo has described, at the moment, now we have the platform that from an operational point of view is perfectly up and running. Now we have to just keeping on feeding the platform with a decently broad number of counterparties. Clearly, the number that you are seeing right now are clearly number that they are reflecting a situation which practically the activity has not really started yet. The real new push, there is just the inertial activity that has been done by the bank in the past, not using a powerful platform.
Just a small percentage of what we can lend is used right now. We have 40% of our AUC clients opted in, so we can lend these securities. But for now, again, we need to put inside the platform to onboard several new counterparties to exploit the full potential of the big amount of stocks that we can lend.
The most part of the potential has not been exploited yet.
Yeah, exactly.
Thank you.
Sorry, can I answer again to Autonomous Ian White? The correct answer is that the tax rate that we expect in 2027, according to the current Italian Budget Law 2026, is 30%, 33%. Additional impacts are expected from the new provision for the Italian 2027 Budget Law, but we prefer to wait until the budget law is finalized by the Italian Parliament to provide a guidance.
Without the impact of the new law-
It remains 33%.
33%.
Not 35% as you-
No. In fact, I was a little bit-
33%. That is the current-
A little bit concerned, so because-
That is the current tax rate.
Yeah. 33%.
Sorry.
The-
33%, not 35%.
On this 33%, we have to calculate.
The additional impact coming from the.
There is an additional impact coming from the new budget law.
The new budget law, 2027 Budget Law.
For any further questions, please press star and one on your telephone. Mr. Foti, gentlemen, there are no more questions registered at this time. The floor is back to you for any closing remarks.
Thank you very much for attending our conference. Thank you for the extremely interesting questions you raised. As usually, we are available anytime for a follow-up on numbers, topics, and of the bank. Thank you again, and talk to you soon.
Thank you.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.