Banca Ifis S.p.a. · MIL:IF
Banca Ifis — 9M 2024 Earnings Presentation
48 slides from Banca Ifis's earnings presentation, Nov 7, 2024
Slide 1: 9M24 results
% Bancalfis 9M24 results 7 November 2024
Slide 2: Index
Index 1. 3Q24 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Company overview 2
Slide 3: 3Q24 results
aA ~ <,> Banca lfis 1 3Q24 results
Slide 4: 3Q24 results
3Q24 results 1 Net income of €33mln, flat YoY. 9M24 net income of €127mln (+2% YoY) • Revenues reflected the typical summer seasonality and the expected increase in cost of funding • To mitigate sensitivity to declining interest rates, Banca Ifis has strategically extended the duration of its govern
Slide 5: Net revenues
Net revenues Quarterly Revenues • Net revenues in 3Q24 at € 157mln (-4% YoY) due to cost of -4% YoY funding increase. Net revenues in 9M24 at €531,8 (+3.8% YoY) • 3Q24 net revenues breakdown: o Commercial banking revenues at €93mln (€87mln in 2Q24, and €84mln in 3Q23) with commercial performance and
Slide 6: Mitigated net interest income sensitivity to the decrease in interest rates
Mitigated net interest income sensitivity to the decrease in interest rates* Net interest income sensitivity to Actions started since the beginning of the year -0.50% decrease in interest rate €mln 1• Increased duration of overall proprietary bond portfolio from 2.3Y in Dec 23 to 3.3Y in Sept. 24 2•
Slide 7: Commercial activity focused on profitability
Commercial activity focused on profitability Factoring turnover (€bn) New leasing equipment and New leasing automotive technology (€mln) (€mln) stable YoY -12% YoY -5% YoY Market -4% Market -1% Market -10% 78 82 87 3.3 3.5 3.3 69 64 61 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 • Factoring: factor
Slide 8: Npl portfolio exhibiting marked 3Q seasonality
Npl portfolio exhibiting marked 3Q seasonality* Quarterly cash collection (€mln) Revenues from judicial and extrajudicial recovery** (€mln) Including Revalea 100 107 97 70 89 62 • Starting early 2024, Banca Ifis Excluding 100 94 83 70 80 53 concentrated on Revalea purchase Revalea and integration (l
Slide 9: Inflation impact countered by efficiency, enabling continued investments in transformation and positioning
Inflation impact countered by efficiency, enabling continued investments in transformation and positioning Operating 91 104 94 costs ▪ Other operating costs: -€6mln QoQ due to lower IT, NPL onboarding operations and marketing expenses reflecting seasonality and project slowdown Exposed to Includes c
Slide 10: 3Q24 saw classification of specific exposures in certain sectors
3Q 24 saw classification of specific exposures in certain sectors Loan loss provisions* • Coverage ratio of Npe further improved Coverage 1Q24 2Q24 3Q24 13 Bad loans 79% 78% 73% 7 UTP 46% 45% 43% Past due 7% 7% 12% 2Q24 3Q24 Total 45% 45% 46% Gross Gross • The QoQ change in asset quality ratios is m
Slide 11: At present, no signs of widespread macro credit risks materializing in Banca Ifis's commercial business
At present, no signs of widespread macro credit risks materializing in Banca Ifis’s commercial business Payment days in factoring Stage 1 and stage 2 loans* Coverage Stage 1: 1.1% Coverage Stage 2: 4.1% 90 89 83 91% 92% 91% 91% 92% 91% 91% 91% 91% 90% 90% 78 77 75 75 75 76 76 2Q22 3Q22 4Q22 1Q23 2Q2
Slide 12: Quarterly results
Quarterly results Reclassified Consolidated Income Statement - (€ 2Q24 3Q24 9M23 9M24 mln) Net interest income 146.6 117.0 409.5 404.4 1 Throughout 2024, ca. €1bn of excess funding Net commission income 23.8 22.7 74.3 69.6 maintained to comfortably repay TLTRO in Trading and other revenues 18.8 17.6
Slide 13: Capital ratios evolution
Capital ratios evolution CET1 of 16.43% as of 30 Sep 24, calculated Total 17.59% 1.06% 18.65% including 9M net income and interim capital dividend (net of full year foreseeable dividend not paid out yet**) CET1 15.32% 1.11% 16.43% Key items of CET1 evolution in 3Q24 • +0.87% mainly due to RWA decrea
Slide 14: Confirmed guidance of €160mln net income in 2024 Key trends in 2H24
Confirmed guidance of €160mln net income in 2024 Key trends in 2H24 •1 Moderate loan demand as corporates are streamlining funding and the economy is slowing down, with growing competition in lending to high rating corporates o Banca Ifis focus on profitability and successfully increased average spr
Slide 15: Appendices
aA ~ <,> Banca lfis y ) Appendices
Slide 16: 2.1 Segment results
Index Bancalfis 2.1 Segment results 16
Slide 17: 3Q24 Results: P&L break-down by business unit
3Q24 Results: P&L break-down by business unit Commercial & Corporate banking Tot. 1 Breakdown of customer loans in Corp. Banking Commercial & Non core & Data in € mln Npl Factoring Leasing Consolidated Non Core & G&S & Lending Corporate G&S banking Net interest income 53 33 13 16 62 3 117 o G&S: inc
Slide 18: Factoring
Factoring Turnover - €bn • Banca Ifis has strong focus on profitability: in 3Q24 factoring average spread at 3.98% (on top of base rate*) 3.4 3.6 3.5 • Net revenues** / average customer loans at 3.0 3.3 3.0 3.3 7.6%, well above market average, was impacted by some non-recurring items 1Q23 2Q23 3Q23
Slide 19: Factoring – Italian business
Factoring – Italian business* Market share - 2023 Loans and revenues breakdown 23% 6% 3% 37% 43% Other Small [ < 10 mln] Medium [ < 50 mln] 23% 25% Large [ > 50 mln] 5% 33% 30% Active clients Turnover Average loans Revenues 9M24 • Banca Ifis is market leader in terms of number of • Medium/large corp
Slide 20: Leasing
Leasing New business - €mln 1 1• The tax incentives may provide some 155 164 142 211 150 169 130 acceleration for the leasing market in 4Q24 o Equipment and technology: evidence of 37 delays in SME capex decisions 28 29 27 24 87 31 o Automotive: Banca Ifis’s strategy (i) 56 54 22 50 54 38 46 premium
Slide 21: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution (excluding Revalea) Key numbers* • 1.6mln tickets, #1.1mln borrowers NBV** 1,377 1,344 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 18.4 0.0 (1.1) 17.3 No Npls acquired in 3Q24 • Following the acqu
Slide 22: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.5bn (excludes Revalea) • ERC based on proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.2 2.5 o Type of borrower, location, age, amount due, employment status 1.2 2.5 o Time frame of recovery
Slide 23: 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 525 528 522 Frozen 1,183 18% 517 510 Court injunctions [“precetto”] and foreclosures 1,277 20% 476 475 Order of assignments 862 13% Secured
Slide 24: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution 1 Cash collection • Starting early 2024, Banca Ifis concentrated on Revalea purchase and integration (limited other portfolio acquisitions). In 3Q24, Revalea contributed ca. €8mln** in revenues and ca. €14mln in cash collection, bringing total collec
Slide 25: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Waiting for workout - Positions at cost 1,096 1,149 286 155 126 254 257 Extrajudicial positions 14,196 13,510 13,558 12,850 12,838 11,561 10,575 - Ongoing attempt at recovery 13,720 13,035 13,041 12,326 12,310 11,039
Slide 26: Npl Business: P&L and cash evolution
Npl Business*: P&L and cash evolution P&L - €mln 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Waiting for workout - Positions at cost Extrajudicial positions 27 26 23 37 21 20 13 - Ongoing attempt at recovery (1) 0 0 3 (2) (2) (3) - Non-judicial payment plans 28 26 23 34 23 22 17 Judicial positions 46 43 47 5
Slide 27: Npl Business: portfolio diversification
Npl Business*: portfolio diversification Breakdown of GBV by type Breakdown of GBV by borrower age Other Consumer 18-39 1% 31% 6% 40-49 >60 21% 43% Banking 50-59 68% 30% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 9% 35.9% > 100k 25% from 5k to South & Island Center 20k 30% 2
Slide 28: 2.2 Consolidated financial data
Index 2.2 Consolidated financial data 28
Slide 29: Customer loans
Customer loans Customer loans (€ mln) – Includes Revalea 10,089 10,464 10,090 • 3Q24 customer loans at €10,090, -€374mln QoQ 2,130 mainly due to normal seasonality in factoring (- 1,948 2,166 €383mln QoQ) 2,399 2,427 2,472 • Banca Ifis maintained disciplined in pricing and underwriting 1,551 6,522 1
Slide 30: Asset quality – 3Q24
Asset quality – 3Q24 Asset quality (€ mln) • The QoQ change in asset quality ratios is mainly due to Consolidated ratios 1Q24 2Q24 3Q24 lower stocking of performing loans (factoring seasonality). Gross Npe* 5.7% 5.4% 5.7% Total Gross and Net NPEs are roughly stable QoQ Net Npe* 3.3% 3.0% 3.2% • Asse
Slide 31: Funding
Funding Funding (€mln) • TLTRO fully repaid in Sep. 2024 11,339 11,227 10,742 851 • Customer deposits flat QoQ 913 816 431 861 • Securitizations: €1,272mln of factoring and leasing; €293 1,706 1,598 1,565 mln of Banca Credifarma securitizations 1,510 1,515 1,810 • €400mln senior bond issuance in Feb
Slide 32: Interest income and cost of funding evolution
Interest income and cost of funding evolution Interest income (excluding Npl Business, Non Core and Treasury) and interest expenses FY23 YTD 2024 Delta Average interest income* 5.45% 6.19% 6.2% 6.2% 6.2% Average +0.74% Cost of funding** 5.9% Average 5.7% interest interest 5.3% income income 2.3% 2.3
Slide 33: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 112 3Q24 operating costs -€10mln QoQ 102 104 91 94 • -€2mln HR costs QoQ • -€8mln QoQ in other operating costs. Main QoQ changes: o -€4mln NPL variable and operational costs o -€2mln lower ICT expenses due to Summer project slowdown 3
Slide 34: Proprietary portfolio: resilient contribution to P&L
Proprietary portfolio: resilient contribution to P&L • Long term «fundamental» positioning strongly focused on investment grade bonds/ high dividend stocks coupled with opportunistic trading approach 3Q24 proprietary portfolio revenues • Mid duration level at €26mln** • Low volatility accounting tre
Slide 35: 2.3 Company overview
Index 2.3 Company overview 35
Slide 36: Banca Ifis: a long-term track record of sustainable growth
Banca Ifis: a long-term track record of sustainable growth Banca Ifis: a long-term track record of sustainable growth Leadership in small-ticket Acquisition in specialty finance Entry in small ticket profitable segments Specialized Npl factoring player 2022-24 2011-15 2016-21 1983-2010 Shareholder I
Slide 37: Stable shareholders and governance
Stable shareholders and governance • La Scogliera provides, as main shareholder, continuity and stability to Banca Ifis La Scogliera (Fürstenberg Family) • Strategic ESG focus both in specific positioning initiatives and in core operations (AA MSCI rating) o Long term value creation with a strategy
Slide 38: A Family Bank challenger, but with years track record
A Family Bank challenger, but with 40 years track record Commercial and Corporate Banking Npl ► Specialised player for SMEs, with a broad range of credit ► Investor and servicer specialized in small ticket NPEs, products (factoring, lending, leasing, and rental) with a distinctive vertically integra
Slide 39: 9M24 Results: P&L break-down by business unit
9M24 Results: P&L break-down by business unit Commercial & Corporate banking Tot. Data in € mln Npl Factoring Leasing Corp. Banking Commercial & Non core & Consolidated 1 Breakdown of customer loans in & Lending Corporate G&S banking Non Core & G&S Net interest income 206 90 38 55 183 15 404 Net com
Slide 40: Consistent core net income growth, driven by our core capabilities, with a low risk profile
Consistent “core net income” growth, driven by our core capabilities, with a low risk profile Net income target, €mln Actual Target Banca Ifis’ risk profile Business Plan targets Net 118 137 ~ 160 • Structurally protected liquidity income, €mln position (maturities) • Marginal contribution of 160 ~1
Slide 41: Total assets and liabilities
Total assets and liabilities Assets (€mln) Liabilities (€mln) Total Funding 13,473 13,046 13,473 13,046 510 653 524 Other liabilities 246 648 637 227 1,736 684 Other and 1,780 1,472 Tangible/Intangible assets 913 Shareholders 1,397 861 Equity 431 - Tax Assets 1,598 1,565 Other funding 1,510 1,515 TL
Slide 42: 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; client/debtor double risk € bn assessment; rapidly adapting sector exposure Secured against the pharmacies in a regulated sector, protected from competitors 2.4 80% state guaranteed >80% in rating classes 1-5 1.5 Av
Slide 43: 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 2.4 0.21* €360k* Leasing 1.3 2.1 €50k auto €65k equipment Rental 0.2 1.7 €5k Medium term lending 0.7 2.7 €210k Loans to pharmacies 0.7 7.5 €400k Structured finance 0.8 4.0 €12mln Npls 1.5 4.0 €
Slide 44: 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 6,775 6,801 Corporate 20% 1,098 1,137 Retail Other deposits** 80% 648 733 571 Corporate deposits Rendimax deposits: 84% protected by FITD 537 German retail deposits Above €100K 16% Below €10
Slide 45: Our ESG achievements
Our ESG achievements Financed Reporting Emissions and transparency Approximately 80% of exposures and financed The Group published its first Report aligned with emissions considered by Banca Ifis NZBA the recommendations of the Task force on targets, focused on Automotive sector Climate-related Fina
Slide 46: Our ESG goals
Our ESG goals Environmental Social Governance Net-Zero Banking Alliance1 Social Impact Lab Governance ESG State and deliver on carbon objectives, as Manage projects to foster diversity and Further strengthen inclusion and diversity the first Italian bank to join the Net-Zero social inclusion in a de
Slide 47: MSCI upgraded Banca Ifis's ESG rating to AA
MSCI upgraded Banca Ifis’s ESG rating to AA MSCI has upgraded Banca Ifis’s ESG rating to AA on 19 April 2024 • Banca Ifis’s Overall Industry Adjusted Score has been increased from 7.1 points to 8.2 points since the last rating action Industry Banca Ifis Dimensions Weight average Score Carbon Emissio
Slide 48: 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,