On 31st October 2023, Banca Ifis finalised the acquisition of Revalea, a Mediobanca Group company. The transaction aims to consolidate the Bank’s position as a key player in the market of non-performing loans in the small tickets unsecured segment.
- The favourable revenue trend, up 4.8% compared to the first nine months of 2022, is supported by the positive performance of the business, with growth in Factoring of 5.9% and in Leasing of 8.8%, as well as the positive correlation of trade receivables to rising interest rates.
- The option to allocate to a non-distributable equity reserve upon approval of the financial statement for FY 2023 as an alternative to the payment of the “windfall tax”.
- Cash recoveries on Npl portfolios rise to 295 million Euro, up 4.0% compared to the first nine months of 2022, despite inflationary tensions.
- The CET1 ratio stands at 15.53%, including the profits generated by the Banking Group during the first nine months of 2023, net of the interim dividends, thereby easily exceeding capital requirements (8.65%).
- The solid capital position allows for the distribution of 63 million Euro (1.2 Euro per outstanding share, gross of any withholding taxes) of a 2023 interim dividend, which will be paid with ex-dividend date 20 November 2023, record date of 21 November 2023 and payment date of 22 November 2023.
Results for the first nine months of 2023
Reclassified data – 1 January 2023/30 September 2023
- The Group’s net profit amounted to 124.7 million Euro, up 18.2% from 105.5 million Euro in the first nine months of 2022.
- Net banking income, up 4.8% to 512.4 million Euro from 488.7 million Euro in the same period of 2022, benefits from the positive correlation of Commercial & Corporate Banking Segment to rising interest rates. Revenues in the Npl Segment are broadly stable compared to the first nine months of 2022, highlighting the resilience of collections despite the rise of inflation.
- Operating costs, at 288.5 million Euro (+3.6% compared to 278.5 million Euro in the first nine months of 2022), increase due to higher personnel expenses (120.5 million Euro compared to 111.2 million Euro in the first nine months of 2022), mainly due to the increase in variable remuneration and provisions for the renewal of the collective agreement for bank employees, and higher other administrative expenses (172.4 million Euro compared to 171.5 million Euro in the first nine months of 2022). The focus on operational efficiency and cost control offsets the effect of rising prices.
- The credit cost is 30.9 million Euro, down by more than 35% compared with the first nine months of 2022, and includes 14 million Euro of provisions on the performing exposures portfolio to cover potential macroeconomic risks. The total provision on performing exposures for macroeconomic risks thus totalling approximately 65 million Euro.
- The liquidity ratio, as of 30 September 2023, is equal to approximately 1.7 billion Euro in reserves and free assets that can be financed by the ECB (LCR above 1,200%).
Capital requirements
- CET1 comes to 15.53% (15.01% at 31 December 2022) and TCR to 18.42% (18.82% at 31 December 2022), calculated including the profits generated by the Banking Group in the first nine months of 2023, net of the interim dividend.
Rome, 09 November 2023 – The Board of Directors of Banca Ifis met today under the chairmanship of Ernesto Fürstenberg Fassio and approved the results for the first nine months of 2023.
“The results for the first nine months of 2023 confirm the robustness of our business model and our ability to seize opportunities in a hitherto favourable macroeconomic environment resulting from a period of economic growth and the concomitant rise in interest rates. It is a context that, however, is now showing the first signs of deterioration. In the last quarter, the Bank successfully offset the drop in demand for credit with lively commercial activity that saw, among other things, the development of products and solutions aimed at supporting the sustainable transition and digitisation of Italian small and medium-sized enterprises. With this in mind, the commercial offer was expanded with new leasing solutions in the car, alternative green mobility and sustainable energy segments, and a new tech rental product dedicated to private customers. All this by accelerating the digitisation path envisaged in the D.O.E.S. Business Plan. for 2022-24 with the evolution of the Ifis4Business platform into myIfis, maintaining a careful credit policy in terms of pricing and risk containment. The total provision on performing exposures for macroeconomic risks thus totals approximately 65 million Euro and confirms the prudent approach to the changing macroeconomic scenario. Also in the Npl business, the improved efficiency of the recovery strategies was reflected in the growth in collections compared to the same period in 2022, despite a much higher interest rate and inflation environment. In line with the expected timing, last 31 October, having obtained the necessary regulatory approvals, we perfected the long-term partnership for the management of non-performing loans, signed back in May 2023 with the Mediobanca Group and aimed at consolidating Banca Ifis’s position as a key player in the market for non-performing loans in the small-ticket unsecured segment”, declares Frederik Geertman, Chief Executive Officer of Banca Ifis.
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The Commercial & Corporate Banking Segment’s revenues, up 15.1% compared to the first nine months of 2022, reflect the Group’s positive correlation to rising interest rates (85% of the commercial loan portfolio is at floating rates). The dynamism of the Group’s commercial network has allowed business to grow despite lower demand for credit due to higher interest rates: in the first nine months of 2023, Factoring turnover grew by 1.2% and Leasing disbursements by 8.2%. During the period, the digitalisation path was accelerated with the evolution of “Ifis4Business” into the new multi-product platform “myIfis”, to make the relationship between the sales network and end customers more effective and fluid.
In the Npl Segment, cash recoveries on acquired portfolios amounted to 295 million Euro, up 4.0% on the first nine months of 2022. To date, judicial and extrajudicial recovery activities do not show any significant negative impact from rising inflation and interest rates.
At 3.1%, the average cost of funding in the third quarter of 2023 is up from 2.2% in the first quarter of 2023 and 2.8% in the second quarter of 2023. The liquidity position as of 30 September 2023 was approximately 1.7 billion Euro, benefiting from the senior bond issue of 300 million Euro completed in September 2023.
Asset quality ratios, the Gross Npe Ratio and the Net Npe Ratio stand respectively at 6.1% and 3.9%. These figures would come in respectively at 4.6% and 2.5% 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.
Capital ratios confirm the strong solidity of both the Bank and the Group. Both the main indicators remain well above the minimum required levels, with a consolidated CET1 Ratio of 15.53% (15.01% at 31 December 2022) and a consolidated Total Capital Ratio of 18.42% (18,82% at 31 December 2022), calculated including profits for the first nine months of 2023, net of the interim dividend.
The Bank has already completed many of the actions to repay the 2 billion Euro TLTRO well in advance, including the remarketing of the senior notes of the leasing securitisation for approximately 400 million Euro, the ramp-up of the Npl securitisation for a further 400 million Euro and the issuance of a senior bond for 300 million Euro. In addition to these transactions, there is the approximately 700 million Euro of the proprietary portfolio maturing naturally by September 2024. Repurchase and reverse repurchase transactions on the proprietary portfolio, the increase of retail funding with a multi-channel strategy and, in the event of favourable financial markets, senior bond issues are also planned for the coming quarters.
Supplementing the previous press release, please note that the Board of Directors’ report and the financial statements as at 30 September 2023 pursuant to Article 2433-bis of the Italian Civil Code. – on the basis of which the Board of Directors of Banca Ifis resolved to distribute the interim dividend and included in the Interim Report as at 30 September 2023 – are made available to the public at the Bank’s registered office, as well as on the authorised storage mechanism and on the Bank’s institutional website, www.bancaifis.it, in the “Investor Relations” section. Lastly, for the purposes of the distribution of the interim dividend, the independent auditing firm PricewaterhouseCoopers S.p.A. today issued the opinion required by Article 2433-bis of the Italian Civil Code, which has been made available to shareholders at the Bank’s registered office.
