Citi orders an Italian

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Italian bank Fineco has been making quite a splash in the UK and European margin trading markets of late. 

Not only have the Italian bank caught the eye of Good Money Guide subscribers in the 2020 broker awards and voters they have also captured the attention of US investment bank Citigroup, who have written on the stock today.

Citigroup analysts named Fineco as their top pick among Italian diversified financials noting its many attractive characteristics and highlighting the fact that the company was growing, with strong leverage running through to the bottom line – in other words growing turnover, without increasing cost at the same rate.  

Citi also notes that the bank has a transparent (uncomplicated) business model that is profitable and digitally focused. The analysts believe that the markets are picking up on Fineco’s DRUM  strategy which stands for Dividend, Resilient revenues, UK opportunities, and a Multi-channel product offer.

In plain English Fineco’s strategy is to build on its number one position in Italian broking where according to Citi it has a 27% market share and to leverage that success in the UK and other European markets.

Fineco offers its clients a full suite of banking products alongside OTC margin trading in FX and CFDs, on-exchange futures and options as well as investing and fund management services, all of which are available from one account.

Fineco will report interim numbers to the end of September 2020 on November 9th. 

Citigroup suggests that Fineco’s brokerage revenues are up +110% on a year over year basis thanks to market volatility seen in H1 2020 and though the bank is embargoed from paying dividends at the moment it is Fineco’s stated intention to return to the dividend list as soon as it can.

Fineco is quoted in Milan under the Ticker FBK its shares have traded as high as a €13.43  in Mid August and as low as €6.66 in March. At the time of writing, they are trading at €11.70 giving them a market cap of €7.14 billion. It will be interesting to see how the shares fare ahead of the upcoming results.

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