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May 9 (Reuters) - Italian asset manager Azimut Holding said on Thursday it was confident of exceeding its profit target for the year, after reporting a drop in first-quarter net profit when adjusted for one-off accounting and tax items.
The company, which is working on a project to be able to raise funds from bank deposits, said it was confident 2024 net profit would come in above its existing 500 million euro ($538 million) goal, on net inflows projected above 7 billion euros.
Azimut shares dropped as much as 4.9% after the results, but recouped losses to stand flat at 25.7 euros each by 1354 GMT.
Azimut in March said it would spin-off roughly half of its financial adviser network and find a banking partner to invest in the business. Failing that, it would buy a banking licence and list the hived-off business within six-to-nine months.
The Bank of Italy normally takes at least six months to vet any acquisition that would hand the buyer a banking licence.
Under the project, Azimut Holding will transfer part of its assets under management to the new entity and pocket royalties for 20 years on the revenue those assets generate.
Investment bankers who have sounded out potential banking partners said the structure of the deal, and the size and cost of the required investment, made it a tough sell, despite the fact that financial advisers are in demand as banks look to profit from wealth management.
Azimut has picked the financial advisers and employees to move into the new company, Chairman Pietro Giuliani said in a statement, dismissing concerns about possible execution risks.
"I thank all my 1,850 financial advisor colleagues for their maturity in prioritising the interest of shareholders, despite the clumsy and pathetic attempts by our competitors who, as outsiders, cannot understand the perspective of an Azimutian," he said. Azimut employees are shareholders in the group.
Adjusted net profit in January-March dropped 4% annually to 122.1 million euros, with revenue up 7.6%, roughly the same rise posted by operating costs, while finance income declined sharply.
Azimut said U.S. asset manager Sanctuary Wealth, of which it owns 54.4%, in May bought Oregon-based advisory services provider tru Independence.
($1 = 0.9292 euros) (Reporting by Alberto Chiumento; Additional reporting by Valentina Za; Editing by Tomasz Janowski and David Evans)