Banca Ifis S.p.a. · MIL:IF
Banca Ifis — Q1 2023 Earnings Presentation
39 slides from Banca Ifis's earnings presentation, May 11, 2023
Slide 1: 1Q23 results
1983|2023 1Q23 results 11 May 2023
Slide 2: Index
Index 1. 1Q23 preliminary results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Focus on DTA regulatory implications 2.4 Focus on PPA 2
Slide 3: 1Q23 results
P = «,>Bancalfis 1 1Q23 results
Slide 4: 1Q23 results summary
1Q23 results summary 1 Net income in 1Q23 of €46mln (+29% QoQ and +31% YoY), confirming Banca Ifis’s acceleration 2 Net revenues at €176mln (-8% QoQ and +8% YoY), driven by performance in Commercial Banking 3 Factoring turnover +17% YoY (excluding factoring vs. PA), new business in leasing +22% YoY.
Slide 5: Net revenues accelerating
Net revenues accelerating Quarterly Revenues • Net revenues at €176mln (-8% QoQ and +8% YoY) +8% • 1Q23 net revenues breakdown: o Commercial banking revenues at €88mln (€93mln in 4Q22 163 192 176 and €74mln in 1Q22) reflecting the Bank’s positive interest rates correlation and ongoing loan repricing
Slide 6: Very robust commercial activity
Very robust commercial activity Factoring turnover (€bn) New leasing business (€mln) Of which: automotive (€mln) +17%* +22% +26% Market +5% Market +20% Market +45% * excluding factoring vs PA 0.4 3.5 221 82 3.0 77 2.6 155 61 127 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 * Factoring turnover +17%
Slide 7: Npl portfolio performance resilient and well-positioned
Npl portfolio performance resilient and well-positioned* Track record in quarterly cash Revenues (€mln) collection (€mln) • Extrajudicial collections remain solid, therefore negligible 1 impact from interest rate or 91 100 97 73 84 73 inflation increase on collections 22 • Area of focus: monitoring
Slide 8: Inflation impact countered by efficiency, translating into solid cost control
Inflation impact countered by efficiency, translating into solid cost control Operating 88 112 91 costs ▪ FITD&SRF €6mln provisions in 1Q23 (€7mln were booked as costs in 4Q22) 7 ▪ Other operating costs*: potential impact of inflation and volume growth 33 more than offset by contract renegotiation.
Slide 9: Very resilient loan book confirms asset quality
Very resilient loan book confirms asset quality Loan loss provisions* • 1Q23 LLP of €10mln, including €5mln add-on provisions against 22 potential macroeconomic risks. In 1Q23 no visible sign of asset quality deterioration 5 7 5 • Total management overlay against performing loans reached ca. 4Q22 1Q
Slide 10: Banca Ifis's superior risk-return trade-off (1/3)
Banca Ifis’s superior risk-return trade-off (1/3) Data in Turnover 4 times per year; double risk assessment; rapidly € bn adapting sector exposure Secured against the pharmacy, regulated sector, protected from competitors 2.5 Average LLP in the last 5Y of ca. 25 bps 80% state guaranteed >80% in rati
Slide 11: Banca Ifis's superior risk-return trade-off (2/3)
Banca Ifis’s superior risk-return trade-off (2/3) € bn Average Duration in Y Average ticket size Factoring 2.5 0.22* €300k* Leasing 1.3 2.7 €40k auto €60k equipment Rental 0.2 2.0 €7k Medium term lending 0.7 3.0 €300k Loans to pharmacies 0.8 7.5 €400k Structured finance 0.7 5.0 €12mln NPLs 1.5 4.0 €
Slide 12: Banca Ifis's superior risk-return trade-off (3/3)
Banca Ifis’s superior risk-return trade-off (3/3)* Customer deposit breakdown Very limited corporate deposits 5,103 5,091 Corporate 7% 588 564 Retail 93% 449 356 28 136 Other deposits, mainly retail ** Corporate deposits Rendimax deposits: 83% protected by FITD German retail deposits Above €100K 17%
Slide 13: Banca Ifis Group – Capital ratios evolution
Banca Ifis Group – Capital ratios evolution Total 18.82% -0.37% 18.45% CET1 actual of 15.21% at 31 Mar 23, capital excluding 1Q23 net income Key items of CET1 evolution in 1Q23 CET1 15.01% +0.20% 15.21% • +0.09% mainly due to a combination of decrease in FVOCI reserve (+0.06%) +0.09% -0.23% +0.34% a
Slide 14: Quarterly results
Quarterly results Reclassified Consolidated Income 1Q22 4Q22 1Q23 Statement - (€ mln) 1 Includes €8mln capital gains on PE investments Net interest income 131.1 155.7 139.4 Net commission income 20.7 28.3 23.3 (€1mln in 1Q22) due to the disposals of some Trading and other revenues 11.5 7.8 13.1 1 eq
Slide 15: Appendices
P = «,>Bancalfis y ) Appendices
Slide 16: 2.1 Segment results
Index Banca fis 2.1 Segment results 16
Slide 17: 1Q23 Results: P&L break-down by business unit
1Q23 Results: P&L break-down by business unit Commercial & Corporate banking Tot. 1 €8mln capital gains on PE Corp. Banking Commercial & Non core & investments (€1mln in 1Q22) due Data in € mln Npl Factoring Leasing Consolidated to the disposals of some equity & Lending Corporate G&S banking stakes
Slide 18: Factoring
Factoring Turnover - €bn 1 3.0 3.5 3.2 3.5 3.1 1 1Q23 factoring turnover at €3.1bn, +17% YoY excluding 0.3 factoring vs. PA, for which Banca Ifis is reviewing its 0.4 business model; 4Q22 is impacted by usual seasonality 2 The reduction of the factoring loans YoY (-9%) is due 3.2 3.2 3.5 the revisio
Slide 19: Leasing
Leasing New business - €mln 1 1• Newleasing +22% YoY due to revamping 127 150 149 221 155 commercial activity 38 2• Net revenues / average customer loans at 4.2% in 1Q23 24 22 101 28 24 50 3• Asset quality risk is mitigated by strong sector and 53 54 42 borrower diversification and by the remarketin
Slide 20: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution Key numbers* • 2.2mln tickets, #1.5mln borrowers NBV** 1,505 1,483 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 23.1 0.0 (0.3) 22.8 No Npls acquired in 1Q23 • Very limited NPL transactions in 1Q23
Slide 21: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.9bn • ERC based on proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.4 2.9 o Type of borrower, location, age, amount due, employment status 1.5 2.5 o Time frame of recovery o Probability of de
Slide 22: Npl Business: GBV and cash recovery
Npl Business*: GBV and cash recovery Judicial recovery Non judicial recovery – Voluntary plans Judicial recovery (€ mln) GBV % GBV, data in €mln To be processed 483 485 483 471 471 476 Frozen 1,708 23% 461 434 Court injunctions [“precetto”] and foreclosures 1,018 14% 409 Order of assignments 838 11%
Slide 23: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution Cash collection 1 Npl cash collection at €97mln, driven by judicial recovery. As planned in the 3Y Business Plan, the Bank is expecting a moderate increase of settlements (“saldi e stralci”) to reduce timeframe of collections Data in € mln (excluding
Slide 24: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Waiting for workout - Positions at cost 1,147 107 1 203 3,409 2 3,850 4,193 1,571 1,284 1,096 Extrajudicial positions 10,987 11,280 11,657 10,804 11,155 11,379 13,386 14,302 14,196 - Ongoing attempt at recov
Slide 25: Npl Business: P&L and cash evolution
Npl Business*: P&L and cash evolution P&L - €mln 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Waiting for workout - Positions at cost Extrajudicial positions 22 29 30 38 29 25 23 22 27 - Ongoing attempt at recovery (2) 6 (2) 6 (1) 0 4 1 (1) - Non-judicial payment plans 24 23 32 33 30 24 18 21 28 Jud
Slide 26: Npl Business: portfolio diversification
Npl Business*: portfolio diversification Breakdown of GBV by type Breakdown of GBV by borrower age Other Consumer 18-39 1% 34% 8% >60 40-49 40% 22% Banking 65% 50-59 30% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 10% 34.9% > 100k 22% South & Island from 5k to Center 20k 31%
Slide 27: 2.2 Consolidated financial data
Index 2.2 Consolidated financial data 27
Slide 28: Customer loans
Customer loans Customer loans (€ mln) 9,664 10,187 9,834 • 1Q23 customer loans at €9,834mln (-3% QoQ) driven by: 2,152 2,023 2,101 o Normal seasonality in factoring (-10% QoQ) 2,287 o Some disposals of long term Government bonds in 2,291 2,296 G&S (-1% QoQ) 6,155 1,472 6,515 6,238 1,396 1,475 2,468
Slide 29: Asset quality – 1Q23
Asset quality – 1Q23 Asset quality (€ mln) • The QoQ change in asset quality ratios is due to lower performing loans (factoring seasonality) Consolidated ratios 3Q22 4Q22 1Q23 • Asset quality ratios in 1Q23: Gross Npe* 7.4% 5.9% 6.1% Net Npe* 4.8% 4.0% 4.1% o Gross Npe Ratio*: 6.1% (5.9% in 4Q22); 4
Slide 30: Strong sector and borrower diversification
Strong sector and borrower diversification* Max Max Industry €mln % of total concentra- Industry €mln % of total concentra- tion tion General and other manufacturing 923 15% 20% Plastic and gum/tyre industry 98 2% 5% Pharmacy lending 818 13% 20% Metallurgic industry 84 1% 5% Wholesale and commercial
Slide 31: Funding
Funding Funding (€mln) • Customer deposits stabe QoQ 10,208 11,131 11,112 999 1,060 • Securitizations include €1,106mln of factoring 516 securitization and €371mln of Banca Credifarma 2,424 2,035 securitization 2,019 1,477 • Banca Ifis has €2.0bn TLTRO expiring in September 1,379 1,496 2024 1,053 1,
Slide 32: Proprietary portfolio: resiliency and positive contribution to P&L
Proprietary portfolio: resiliency and positive contribution to P&L • Long term «fundamental» positioning strongly focused on investment grade bond area/high dividend equity stock coupled with opportunistic trading approach Expected 2023 further upside • Low Duration level revenues’ pillars: • Use of
Slide 33: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 1Q23 operating costs at €91mln 112 • HR costs stable vs 4Q22 98 93 91 88 • -€21mln QoQ in other operating costs. Main items: o Costs directly linked to Npl recovery decrease of €12mln QoQ partially linked to seasonality o -€7mln of FI
Slide 34: Seasonality in Npl and PPA and effect of Covid-19
Seasonality in Npl and PPA and effect of Covid-19 Net interest income in Npls IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ 2021 2022 2023 Reversal of PPA ex-IB (pre-tax) Capital gains from Npl disposal 1Q23 pre tax 4Q21 gains reversal PPA at €4mln 12 at €3mln 4 5 5 4 4 3 3 3 4 4 3 2 1 1 1 1 - IQ IIQ IIIQ IVQ
Slide 35: 2.3 Focus on DTA regulatory implications
Index 2.3 Focus on DTA regulatory implications 35
Slide 36: Focus on DTA regulatory implications
Focus on DTA regulatory implications • DTAs related to write downs of loans convertible into tax credits (under Law 214/2011) Data in €/mln Convertible DTAs • Their recovery is certain regardless of the presence of future taxable income and is defined by fiscal law (full release by 2026) 172.2 • No
Slide 37: 2.4 Focus on PPA
Index Banca fis 2.4 Focus on PPA 37
Slide 38: Focus on ex-Interbanca PPA
Focus on ex-Interbanca PPA • In 2016, following the acquisition of former Net customer loans and PPA - €mln Interbanca, Banca Ifis valued the performing and non performing loans of Interbanca by Performing: 14.3 455 PDs: 0.6 applying a market discount and a liquidity UTPs: 2.5 discount to reflect pu
Slide 39: Disclaimer
Disclaimer • This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations,