10 May 2018
Net banking income up +35%, net profit up +16%. The Group continues hiring, over 70 new hires in the first 3 months of the year.
Highlights– Results of the first quarter of 2018
RECLASSIFIED DATA: 1 January – 31 March
– Net banking income: 139,4 million Euro (+34,6%);
– Net profit from financial activities: 128,4 million Euro (+26,7%);
– Operating costs: 73,4 million Euro (+31,9%);
– Net profit for the period: 37,9 million Euro (+15,8%);
– Credit risk cost of the Enterprises segment: 73 bps;
– Enterprises segment’s net -bad loan ratio:1,2%;
– Enterprises segment’s gross bad-loan coverage ratio: 91,7%;
– Total Group employees: 1.541 people (1.361 at 31 March 2017);
– Common Equity Tier 1 (CET1) Ratio: 15,49% (15,64% at 31 December 2017);
– Tier1 (T1) Capital Ratio: 15,49% (15,64% at 31 December 2017);
– Total Own Funds Capital Ratio: 20,91% (21,07% at 31 December 2017).
“In the first three months of 2018, the Banca IFIS Group delivered positive financial results, confirming the soundness of the model and the effectiveness of the individual business units. The constant improvement in the Bank’s liquidity and capital position allows it to continue growing in the reference markets,” said Giovanni Bossi, Banca IFIS CEO.
“The Group continues lending to enterprises as well as acquiring and servicing the non-performing loans originated by Italian financial institutions. During the quarter, we have been pursuing a “new normal” in the markets where we operate against the backdrop of ever-changing conditions.
As for non-performing loans, the Italian market is increasingly dominated by the so-called jumbo deals as well as the preparations by banks for “GACS-compliant” transactions for certain asset classes, which would allow to dispose of greater amounts of non-performing exposures, before the scheme expires in September 2018. In addition, the market in which we operate as industry leader is considerably affected by recent European regulations—specifically the ECB’s addendum and guidance. Several players are currently wrestling with the uncertainty as to the potential impact and repercussions of the “new regulatory normal” on their business model.
As for small and micro enterprises, conventional bank lending has contracted further even though confidence among consumers and enterprises improved during the quarter. This decline is pushing entrepreneurs to look for alternative forms of financing, including fresh capital. Among the businesses we serve, the reduction in conventional bank lending and the inability to raise capital on the stock market due to their limited size is driving demand for credit from the healthy companies that managed to survive the crisis with overhauled and/or new business models. “
Against this macro-economic backdrop, the focus of Banca IFIS’s NPL segment remains on accelerating loan processing operations. This is made possible by the increase in the number of employees dedicated to the NPL business as well as the additional efficiency gains in the relevant channels. The speed of conversion of the asset classes is the key driver we are rapidly improving upon.
As for the enterprises segment, the Bank continues strengthening its relationship with customers, including by adopting technological platforms and new business intelligence models that allow to directly support the entities looking for credit. In addition, we successfully launched a process to cross-sell products and services across the business areas that lend to enterprises—especially in the case of medium/long-term financing: this has now become part of the day-to-day operations of the sales network, which previously focused exclusively on short-term lending. Finally, within this segment the Bank is constantly pursuing and experimenting with new internal organisational forms and partnerships to effectively support the companies looking for credit, so as to offer a comprehensive range of solutions tailored to the customer’s needs.
To conclude, the ideas we expressed at the beginning of the year—promoting synergies, streamlining processes, developing human capital, and innovating not just in technology, but across the board—characterised the first quarter of 2018 and will remain a focus in the upcoming quarters.
We are aware that, since our inception, we have always maintained a unique business model within the Italian financial industry—and this is what increasingly differentiates us from the other players, quarter after quarter. This uniqueness enables us to identify and seize outside-the-box opportunities, also thanks to our strong capital position and liquidity. This is our greatest innovation: we see ourselves as an Enterprise, rather than a Bank, that relentlessly pursues improvements by adapting to the changes required by the market as well as customers.
In the not so distant future – adds Bossi – the Bank is expected to play a major role in the consolidation of small first-rate financial institutions that operate in our local community, which need advanced business models to realise their full potential”.