Reclassified data[2] – 1 January 2024/30 June 2024
- The Group’s net consolidated profit amounts to 93,6 million Euro, up 2,8% from 91,0 million Euro in the first half of 2023. The results for the first half of 2024 were positively influenced by the performance of the commercial and Npl business as well as the proprietary finance business.
- Net banking income, up 7,5% to 374,5 million Euro compared to 348,5 million Euro in the first half of 2023, benefited from the growth of the Commercial & Corporate Banking Segment (+0,9%, or approximately 1,6 million Euro, compared to the first half of 2023), the positive contribution of the Npl Segment (+17,4%, or approximately 23,8 million Euro, compared to the first half of 2023), as well as the increase in results from the financial instruments of the Proprietary Finance business unit (+61%, or approximately 12,5 million Euro, compared to the first half of 2023).
- Operating costs of 206,1 million Euro (+7,5% compared to 191,7 million Euro in the first half of 2023) increase due to higher personnel expenses (86,6 million Euro compared to 80,4 million Euro in H1 2023), mainly due to the growth in the number of employees and the renewed NCBA, in addition to higher other administrative expenses (124,2 million Euro compared to 115,2 million Euro in the same period of 2023).
- The credit cost decreased to 15,8 million Euro from 16,3 million Euro in the first half of 2023, confirming the positive dynamics of asset quality in recent quarters.
- Liquidity position, at 30 June 2024, is equal to approximately 1,7 billion Euro in reserves and free assets that can be financed by the ECB (LCR of approximately 1.300%).
Capital requirements
- CET1 comes to 15,32% (14,87% at 31 December 2023) and TCR to 17,59% (17,44% at 31 December 2023), calculated including the profit generated during the first half of 2024, net of the dividend accrued.
***
Rome, 2 August 2024 – The Board of Directors of Banca Ifis met today under the Chairmanship of Ernesto Fürstenberg Fassio and approved the H1 2024 results.
‘The results for the first half of 2024, with growing revenues and net profit up to 94 million Euro, allow us to confirm the profit guidance for FY 2024 of 160 million Euro. Based on the positive performance of the period, we look forward to the last six months of this Business Plan with confidence, continuing to support small and medium-sized Italian companies on the path of sustainable development and transition, with our products and services and the distinctive competence of our people. In the first half of 2024, the factoring and leasing business, thanks to the effective work of our network, achieved growth rates above the reference markets, offsetting the increased cost of funding. The Npl business also remained strong and benefited from the contribution of the Revalea acquisition. Since the start of the year, the Bank has also initiated a series of actions to reduce the impact of a possible reduction in interest rates: the duration of the proprietary securities portfolio has been increased and the percentage of new fixed-rate leasing disbursements has been almost doubled to about 80% compared to the last half of 2023”, says Frederik Geertman, CEO of Banca Ifis.
***
The revenues of the Commercial & Corporate Banking Segment, which in H1 2024 grew by +0,9% compared with the same period of 2023, reflect the dynamism of the commercial network has allowed business to grow despite lower demand for credit due to higher interest rates and has allowed the Group to offset the increased cost of finance. Commercial development drove the growth of the Commercial & Corporate Banking Segment: during the period, the Bank developed new synergies with leading international partners, such as Yamaha Motors in the leasing and rental of electric bicycles for the tourism sector. In addition, the Bank has signed two SACE guarantees – Futuro and Green – to broaden the spectrum of credit coverage to support SMEs aiming at international growth and reducing their environmental impact.
In the Npl Segment, cash recoveries on acquired portfolios amounted to 192 million Euro, essentially unchanged compared with the first half of 2023. In addition to these, 28 million Euro were generated from collections on portfolios originated by Revalea S.p.A. in H1 2024. To date, judicial and extrajudicial recovery activities do not show any significant negative impact from rising inflation and interest rates.
At 3,94%, the average cost of funding in the second quarter of 2024 is slightly up from the 3,86% recorded in the first quarter of 2024. In the coming months, considering that Q2 2024 already includes the cost of new retail deposits and the senior bond issue in February, a stabilisation of the cost of funding is expected. With regard to the average cost of funding in 2024, the Bank confirms its target of staying below 4%.
At end of June, ahead of the September 2024 maturity date, Banca Ifis has repaid 1.625 million Euro of TLTRO III and has already completed well in advance all actions to repay the remaining 411,5 million Euro.
The Proprietary Finance business unit securities portfolio decreased from 3 billion Euro in December 2023 to 2,6 billion Euro in June 2024, while its duration was extended from 2,3 years in December 2023 to 3,1 years in June 2024, confirming an active and opportunistic management while maintaining a limited risk profile.
Asset quality ratios, the Gross Npe Ratio and the Net Npe Ratio stand respectively at 5,4% and 3,0%. These figures would come in respectively at 4,4% and 2,1% excluding reclassifications resulting from the application of the New Definition of Default regulations to receivables from the National Health System (NHS), which are characterised by limited credit risk and long payment terms. The average coverage of non-performing loans was continuously strengthened from 35% in 2022 to 45% in H1 2024.
Capital ratios confirm the Group’s great solidity. Both the main indicators remain well above the minimum required levels, with a consolidated CET1 Ratio of 15,32% (14,87% as at 31 December 2023) and a consolidated Total Capital Ratio of 17,59% (17,44% as at 31 December 2023), calculated including H1 2024 profits, net of the dividend accrued.
***
Banca Ifis and its commitment to sustainability
During the period, Banca Ifis continued to pursue initiatives in the field of sustainability through an integrated and concrete approach aimed at creating positive social impact for businesses, territories and people. The Bank’s commitment continued along three main lines: governance, environment and social.
On the first front, the initiatives introduced over the past three years have been positively assessed by the international rating agency MSCI, which, in April 2024, raised Banca Ifis’s rating from A to AA, to the highest level in the Italian financial sector. The sustainable innovation of Banca Ifis’s business model continued with the integration of new partnerships with leading international operators in the field of green products such as e-bike leasing, photovoltaics and electric car charging stations.
On the social front, the Bank continued the community support initiatives of Kaleidos, the Social Impact Lab inspired by Ernesto Fürstenberg Fassio. The project, which is linked to a 7 million Euro investment plan over the three-year period 2022-24, has enabled as many as thirty-five projects to be implemented throughout the country. To twelve of these, Banca Ifis applied its proprietary model for measuring the social impact generated. The result of the analysis showed an average multiplier of 5,6: translated into practical terms, for 1,7 million Euro invested in the measured activities, 9,4 million Euro of value was created. Developed with the support of Triadi, a spin-off of the Polytechnic University of Milan led by Prof. Mario Calderini, Banca Ifis’s impact measurement model certifies its willingness to translate the “S” dimension of the acronym ESG into a concrete value, making actions measurable and overcoming any risk of greenwashing.
Lastly, on the social initiatives front, April 2024 saw the launch of ‘Ifis art’, the project desired and devised by Chairman Ernesto Fürstenberg Fassio that brings together all the projects carried out by the Bank to promote art, culture, contemporary creativity and their values. In June, the Bank enriched the collection of the Villa Fürstenberg International Sculpture Park – open to the public free of charge every Sunday – with nine works from the solo exhibition ‘Horse Power’ by Italian artist Nico Vascellari. The second half of this year will see the start of the rescue and securing of Banksy’s work ‘The Migrant Child’ in Venice and restoration work to make the palace that houses it, Palazzo San Pantalon, once again accessible to the community.
[1] In January 2024, the Banca Ifis Group was notified of the new SREP requirements by the Bank of Italy. The new requirements provide for a CET1 of 9,0%, a Tier 1 Ratio of 10,90% and a Total Capital Ratio of 13,30% (including 1,0% P2G) and apply starting 31 March 2024. As at 31 December 2023, the SREP requirements were: CET1 8,65%, a Tier 1 Ratio of 10,50% and Total Capital Ratio 12,9% (including 0,75% P2G).
[2] Reclassifications and aggregations of the consolidated income statement concern the following:
- net credit risk losses/reversals of the Npl Segment are reclassified to interest receivable and similar income (and therefore to “Net interest income”) to the extent to which they represent the operations of this business and are an integral part of the return on the investment;
- net allocations to provisions for risks and charges are excluded from the calculation of “Operating costs”;
- cost and revenue items deemed as “non-recurring” (e.g. because they are directly or indirectly related to business combination transactions, such as the “gain on a bargain purchase” in accordance with IFRS 3), are excluded from the calculation of “Operating costs”, and are therefore reversed from the respective items as per Circular 262 (e.g. “Other administrative expenses”, “Other operating income/costs”) and included in a specific item “Non-recurring expenses and income”;
- the ordinary and extraordinary charges introduced against the Group’s banks (Banca Ifis and Banca Credifarma) under the Single and National Resolution Mechanisms (FRU and FRN) and the Deposit Protection Mechanism (DGS or FITD) are shown under a separate item called “Charges related to the banking system” (which is excluded from the calculation of “Operating costs”), instead of being shown under “Other administrative expenses” or “Net allocations to provisions for risks and charges”;
- the following is included under the single item “Net credit risk losses/reversals”:
- net credit risk losses/reversals relating to financial assets measured at amortised cost (with the exception of those relating to the Npl Segment mentioned above) and to financial assets measured at fair value through other comprehensive income;
- net allocations to provisions for risks and charges for credit risk relating to commitments and guarantees granted;
- profits (losses) from the sale/repurchase of loans at amortised cost other than those of the Npl Segment.
