Banca Ifis: net profit for the nine months reaches the targets envisaged

Despite the fact that the macroeconomic scenario continues to be uncertain and the general situation difficult, the Bank continues to operate efficiently and with great faith in the future and is well prepared, also in terms of its equity, to face up to the forthcoming months, aware that they are likely to be unstable

• Net profit of 52,3 million Euro in the first nine months of 2020, with all three quarters of the year showing profit
• Equity position strengthens with CET1 at 11,69%, up 73 basis points on 31 December 2019
• Total funding up 8,1%: over 9,1 billion Euro
• Provisions made for 47 million Euro in view of Covid-19, of which 11 million Euro prudently in the third quarter of 2020, in order to estimate the potential negative effects mainly linked to the moratoriums
• Npl: 1,7 billion Euro acquired in January – October 2020
• Investments confirmed to speed up digitisation

Results for the first nine months of 2020

Reclassified data – 1 January 2020 / 30 September 2020

• Net banking income at 321,7 million Euro, down compared to 391,2 million Euro at the same period 2019, due to the slowing of operations brought about by the Covid-19 health emergency in all segments
• Operating costs come to 229,4 million Euro, down 4,1% on 30. September 2019, excluding: 11,5 million Euro in net operating income deriving from a non-recurring component recorded during the first nine months of last year, 6,9 million Euro in provisions made for solidarity in 2020 and 7,2 million Euro in greater provisions made in 2020 for the credit risk on commitments and guarantees.

Capital requirements with the consolidation within La Scogliera

• CET1 up to 11,69% (10,96% at 31 December 2019) versus an SREP requirement of 8,12%; TCR: 15,45% (14,58% at 31 December 2019) versus an SREP requirement of 12,5%. The organic generation of capital will enable the complete absorption of the Farbanca acquisition. The requirements are calculated excluding the 2019 dividend, whose payment has been suspended by ruling of the Bank of Italy and excluding all profits from the first nine months of 2020.

Capital requirements without the consolidation within La Scogliera

• CET1: 15,64% (14,28% at 31 December 2019); TCR: 20,38% (18,64% at 31 December 2019).

2020 guidance

• For 2020, Banca Ifis expects to see profits in the higher part of the 2020 guidance (between 50 and 65 million Euro), disclosed last 6 August.

Mestre (Venice), 5 November 2020 – The Board of Directors of Banca Ifis met today, chaired by the Chairman Sebastien Egon Fürstenberg, and approved the results for the first nine months of 2020.

“The results of the first nine months of 2020 have confirmed the Bank’s resilience even at times of great difficulty, as is that of the Covid-19 pandemic and shown the solidity of the business model, which is well positioned in profitable market niches. Despite an unprecedented macroeconomic context and a situation of general mistrust and uncertainty, Banca Ifis closed the first nine months of 2020 posting profit of 52,3 million Euro and reaching the guidance defined for the current year. All quarters were profitable, despite adjustments and impairment applied reasonably as a result of the Covid-19 pandemic in the amount of approximately 47,9 million Euro during the first nine months of the year”, Luciano Colombini – Chief Executive Officer of Banca Ifis, explains.

“Since the start of the year, Banca Ifis has strengthened its consolidated CET1 by 73 basis points, coming in at 11,69%, calculated excluding the 2019 dividend, whose payment has been suspended in compliance with the Bank of Italy recommendations and prudently also excluding profit for the first nine months of 2020. The organic generation of capital will enable the complete absorption of the Farbanca acquisition. Quality of assets is also confirmed as holding out, which to date have shown few signs of deterioration on the loans portfolio and in any case mainly relative to positions that were already experiencing critical issues. On this front, in covering the segments potentially worst impacted by the pandemic, in the third quarter of 2020, prudent provisions were made for approximately 11 million Euro on the estimate of potential negative effects expected and mainly connected with the moratoriums. Additionally, during these months, although maintaining close attention to cost control, investments have been confirmed to speed up the digitisation of the business and the organisational processes, which remain a priority target”.

“The Corporate & Commercial Banking loans portfolio is well diversified by segment, customers and geography. In the last few months, we have adhered to the moratoriums and developed new platforms and products, also assisting businesses not included in the scope with longer repayment plans or by deferring instalments. Our commitment aims to support all businesses with a long-term growth perspective. On the Npl market, we have confirmed our leadership in unsecured small ticket assets, with the award of large and small deals that in the first 10 months of the year led us to acquire 1,7 billion Euro in non-performing loans in nominal amount and which will contribute towards the Group’s profitability for the forthcoming years. At present, we are taking part in other sales processes for a total of approximately 2,4 billion Euro in Npls. During the first nine months of the year, amidst a very difficult market context, cash recoveries are in line with 2019, an activity that also performed well in October”.

“Our retail funding is solid and customers confirm their loyalty. The type of deposit changes, depending on the investment needs and liquidity requirements and records a preference for long-term deposits, at 5 years, which have shown an annual increase of 40% thanks to more attractive returns than those offered by other forms of savings. Excellent results, of approximately 50 million Euro, were also seen in funding on the German market, thanks to the partnership announced in July with Raisin”.

“In a scenario that is as yet uncertain, where a great deal will depend on the duration and impact of this second wave of the pandemic, Banca Ifis is continuing to operate efficiently, looking positively towards the future and is prepared, including in equity terms, to face the forthcoming quarters, which are likely to still be unstable. When the macroeconomic context has stabilised, we will unveil the new Business Plan to the market, which is aimed at ensuring the Group’s sustainable growth”, Mr Colombini concludes.