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04/11/2021
13:13

Banca Ifis: net profit of 80,2 million Euro in the first 9 months Bank revises year-end guidance upwards

SDIR: REGEM 2.2
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In the first nine months of the year, the Bank’s revenues recorded double digit growth, reaching 449.2 million Euro: an all-time high, net of the PPA, as a result of strong growth in business in the commercial portfolio and excellent performances in the Npl Segment. Profits up significantly, despite further prudent provisions to absorb the expiry of government support measures at the end of the year.
In the quarter, year-on-year record of cash recoveries of Npl portfolios purchased, which almost eliminates the less favourable seasonality of the third quarter. Annual target of purchasing 3 billion Euro of Npl portfolios achieved.
The digitisation programme continues and, by joining the Net-Zero Banking Alliance, the Bank further reinforces its commitment to contribute concretely to a more sustainable and inclusive future.

2021 guidance

For 2021, Banca Ifis raises estimates and expects to achieve a net profit between 90 and 100 million Euro (the target communicated on 5 August 2021 was between 80 and 90 million Euro) and revenues between 570 and 590 million Euro (the guidance communicated on 5 August 2021 was between 540 and 560 million Euro).
The guidance was prepared on the assumption of gradual improvement in the scenario, no macroeconomic or pandemicrelated shocks and continued support from Governments and central banks for the economic recovery.

Results for the first nine months of 2021
Reclassified data1 – 1 January 2021/30 September 2021
  • Net interest and other banking income rose to 449,2 million Euro (+39,6% compared to 321,7 million Euro at 30.09.2020), benefiting from both the improved performance of the Npl Segment and the dynamism of the Commercial and Corporate Banking Segment.
  • Operating costs come to 267,6 million Euro (+16.6% on 30.09.2020) due to higher variable costs linked to the legal business of the Npl Segment, the entrance of Farbanca and the former Aigis Banca business unit into the scope of consolidation and ICT projects.
  • The net profit attributable to the Parent Company of 80,2 million Euro recorded double-digit growth (+53,2%) compared to 52,3 million Euro in the same period of 2020. Excluding the PPA and the extraordinary gain of 24,2 million Euro from the sale of the property in Corso Venezia in Milan in 2020, the result was five times that of 2020.
  • The Cost of credit of 62,4 million Euro, of which 19,8 million Euro in the third quarter alone. The figure for the last quarter includes additional provisions of a further 8,1 million Euro in the Npl portfolio due to the long-term effects of Covid-19 and 5 million Euro for concentration risk on positions in the Corporate Banking & Lending Area.
  • Solid liquidity position: approximately 1,8 billion Euro at 30 September 2021 in reserves and free assets that can be financed by the ECB (LCR above 1.500%)

Capital requirements with the consolidation within La Scogliera

CET1 up to 11,68% (11,29% at 31 December 2020) with respect to an SREP requirement of 8,12%; TCR: 15,35% (14,85% at 31 December 2020) with respect to an SREP requirement of 12,5%. These results are calculated without including the profits generated by the Banking Group during the first nine months of 2021.

Capital requirements without the consolidation within La Scogliera2
CET1: 16,24% (15,47% at 31 December, 2020); TCR: 20,77% (19,87% at 31 December 2020). These results are calculated without including the profits generated by the Banking Group during the first nine months of 2021.

Mestre (Venice), 4 November 2021 – The Board of Directors of Banca Ifis, chaired by the Deputy Chairman, Ernesto Fürstenberg Fassio, today approved the results for the first nine months of 2021.

“The results of the first nine months confirm the Bank’s ability to effectively cover specific businesses and to seize the opportunities offered by the greatly recovered market – explains Frederik Geertman, CEO of Banca Ifis -. The net profit for the period attributable to the Parent Company of 80,2 million Euro exceeded our expectations; the result, calculated net of the PPA and extraordinary gains related to the sale of the Milan property, is 25% higher than in the same period of 2019 and approximately 5 times higher than in 2020.
Industrial revenues for the period recorded double-digit growth, up to 449,2 million Euro, supported by the new mix of the commercial portfolio and the excellent performance of the Npl Segment. Revenues, net of the PPA (amounting to 21,5 million Euro), reached an all-time high.

The positive trend in these results has prompted us to revise the guidance for 2021 upwards and to estimate net banking income between 570 and 590 million Euro and an operating profit between 90 and 100 million Euro. All this was done in the assumption of gradual improvement in the scenario, no macroeconomic or pandemic-related shocks and continued support from Governments and central banks for the economic recovery.

More specifically, the Commercial & Corporate Banking Segment demonstrated its ability to rapidly adapt its offering to market needs, thanks to a combination of the commercial strategy and operational and technological efficiency.
Although in 2020 we were able to seize the commercial opportunities linked to the strong demand for state-guaranteed mortgages, in 2021 we quickly identified and satisfied the growing demand for factoring linked to ecobonuses and commercial recovery, through the provision of dedicated products and services.
During the period, the process of digitalising and developing business services from an omni-channel perspective continued: the “Ifis4business” platform for factoring customers is nearing completion and will be extended to all products in the portfolio by the first half of 2022. The migration of the former Aigis Banca business unit is scheduled for completion in November, and in the Leasing Area, the launch of a new digital sales portal for suppliers, sales people and customers that will make it possible to optimise the management of the commercial chain.

Positive signs are also recorded by loans in moratorium where 74% of our customers have resumed regular payments. The remaining receivables in arrears, amounting to 211 million Euro, consist mainly of lease receivables, with underlying vehicles and capital goods, and loans, mainly Government-backed.

During the first nine months of the year, cash recoveries on Npl portfolios acquired reached an all-time high and amounted to 252 million Euro, +38% compared to 183 million Euro in the first nine months of 2020, confirming the portfolio’s resilience in the face of the crisis. On 2 November we finalised our largest Npl acquisition, taking over 2,8 billion Euro of impaired loans from Cerberus. The transaction enabled the Bank to meet its estimated 2021 Npl portfolio purchase target of around 3 billion Euro ahead of schedule and will provide a solid contribution to the Bank’s profitability in the coming years.

CET1, calculated excluding the profit for the first nine months, stood at 11,68%, up from 11,29% at 31 December, 2020, confirming Banca Ifis’ ability to finance business growth.
Our Bank’s recent membership of the Net-Zero Banking Alliance further reinforces our commitment to building a more sustainable and inclusive future and will allow us to contribute actively to achieving the common goal of zero net emissions by 2050,” concludes Geertman.

 

1 In the following statements, net impairment losses/reversals on receivables of the Npl Segment were reclassified to interest receivable and similar income to the extent to which they represent the operations of this business and are an integral part of the return on the investment. For this reason too, apart from the specific operations, the effects of an analysis performed also in response to the Covid-19 pandemic, have been classified amongst value adjustments.
2 Consolidated own funds, risk-weighted assets and solvency ratios at 30 September 2021 were calculated based on the regulatory principles set out in Directive no. 2013/36/EU (CRD IV) and Regulation (EU) no. 575/2013 (CRR) of 26 June 2013, as updated and amended over time and transposed, where applicable, in the Bank of Italy’s Circulars no. 285 and no. 286 of 17 December 2013. In particular, the CRR provides for the prudential consolidation of Banca Ifis in the holding La Scogliera. For the sake of disclosure, we calculated the same indicators without including the effects of the consolidation within La Scogliera. Therefore, the reported total own funds refer only to the scope of the Banca Ifis Banking Group, as defined in accordance with Italian Legislative Decree no. 385/93, thus excluding the effects of the prudential consolidation within the parent company La Scogliera S.p.A.