Banca Ifis S.p.a. · MIL:IF
Banca Ifis — FY2023 Earnings Presentation
48 slides from Banca Ifis's earnings presentation, Feb 8, 2024
Slide 1: 2023 results
% Bancalfis 2023 results 8 February 2024
Slide 2: Index
Index 1. 2023 and 4Q23 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Company overview 2
Slide 3: 2023 and 4Q23 results
A ~ <,> Banca lfis 1 2023 and 4Q23 results
Slide 4: 2023 core net income at record high
2023 core net income at record high • Net income 2023 of €160mln at record high* Banca Ifis net income - €mln • Exceeded 2023 Business Plan net income target by 17% +17% o Significant outperformance vs. Business Plan, net income target in both 2022 and 2023 met one year in advance o Management overl
Slide 5: 4Q23 results
4Q23 results 1 Net income of €35mln (vs. €34mln in 3Q23 and €36mln in 4Q22). FY23 net income at €160mln (+13% YoY) 2 Revenues at €192mln (+17% QoQ, +€28mln QoQ) with Commercial Banking confirming the solid performance of the previous quarters and NPL business picking up driven by NPL workout, the co
Slide 6: Net revenues
Net revenues Quarterly Revenues stable YoY • Net revenues at €192mln (17% QoQ and stable YoY) • 4Q23 net revenues breakdown: 192 192 o Commercial banking revenues at €86mln (€84mln in 3Q23 164 and €93mln in 4Q22) with strong commercial performance and pricing discipline more than offsetting cost of
Slide 7: Commercial activity reflects market and 4Q typical seasonality
Commercial activity reflects market and 4Q typical seasonality Factoring turnover (€bn) New leasing equipment and New leasing automotive technology (€mln) (€mln) +2% -10% +5% Market +3% Market -25% Market +22% 3.6 139 125 87 3.5 3.3 82 64 78 4Q22 3Q23 4Q23 4Q22 3Q23 4Q23 4Q22 3Q23 4Q23 • After stron
Slide 8: Npl portfolio performance resilient and well-positioned
Npl portfolio performance resilient and well-positioned* Quarterly cash collection (€mln) Revenues from judicial and • In 2023, we registered a modest extrajudicial recovery** (€mln) impact from higher interest rates and inflation on debtors. The bank 101 98 102 84 70 89 keeps closely monitoring new
Slide 9: Inflation impact countered by efficiency, enabling continued investments
Inflation impact countered by efficiency, enabling continued investments in transformation and positioning Operating 112 91 119 ▪ Other operating costs - Main changes: costs 4Q23 and 4Q22 include €7mln FITD&SRF costs • +€7mln on FITD contribution • +€4mln recurring costs of Revalea Exposed to Inflat
Slide 10: Asset quality confirmed and overlay fully expresses Bank's prudence
Asset quality confirmed and overlay fully expresses Bank’s prudence Loan loss provisions* • 4Q23 LLP at €22mln includes €10mln Increase in coverage provisions on specific structured finance Coverage 2022 2023 positions mainly classified as UTP, under NPL 69% 78% 22 restructuring. Asset quality prote
Slide 11: No signs of macro credit risks materializing in commercial business
No signs of macro credit risks materializing in Banca Ifis’s commercial business Payment days in factoring Stage 1 and stage 2 loans* Coverage Stage 1: 1.2% Coverage Stage 2: 7.6% 89 89 90 89 88 88 84 83 91% 92% 91% 91% 92% 91% 91% 91% 78 75 75 75 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q
Slide 12: Funding plan to reimburse TLTRO ahead of schedule
Funding plan to reimburse TLTRO (expiring in Sept 2024) ahead of schedule Main funding Completed management actions Ongoing management actions maturities €1.5bn TLTRO ✓ €0.5bn TLTRO repaid in Dec 2023 ➢ Additional pre-payment of TLTRO (expiring in Sep ✓ €0.4bn re-marketing of senior leasing prepayme
Slide 13: Capital ratios evolution
Capital ratios evolution CET1 actual of 14.87% as of 31 Dec 23, Total 18.42% -0.98% 17.44% calculated including FY net income and dividend capital Key items of CET1 evolution in 4Q23 CET1 15.53% -0.67% 14.87% • +8bps due to the increase in OCI reserves (+17bps) partially offset by intangible assets
Slide 14: 2024 net income target of ca. €160mln confirmed
2024 net income target of ca. €160mln confirmed The macroeconomic environment in Italy is expected to be more challenging than in 2023. What we see: • Macroeconomic slowdown, but no recession • Disinflation trend in progress • No sign of widespread asset quality deterioration, with first anecdotal i
Slide 15: On track to outperform 2022-24 Business Plan cumulated targets
On track to significantly outperform the 2022-24 Business Plan’s cumulated targets 2022-24 cumulated net income - €mln 2022-24 cumulated dividends - €mln ~ +10%vs. ~ +45% vs. B. Plan B. plan ~ 160* ~460* ~ 110* ~ 290 92% of ~415 301 Business ~200 183 Plan target distributed in first 2 years 2022-24
Slide 16: Quarterly and annual results
Quarterly and annual results Reclassified Consolidated Income Statement - (€ mln) 3Q23 4Q23 FY22 FY23 Net interest income 134.8 156.7 548.2 566.2 Net commission income 24.0 23.9 93.5 98.2 Trading and other revenues 5.0 11.6 38.8 40.2 1 Includes €6mln provision on a structured Total Revenues 163.9 19
Slide 17: Appendices
A ~ <,> Banca lfis y ) Appendices
Slide 18: 2.1 Segment results
Index Bancalfis 2.1 Segment results 18
Slide 19: 4Q23 Results: P&L break-down by business unit
4Q23 Results: P&L break-down by business unit Commercial & Corporate banking Tot. 1 Breakdown of customer loans in Corp. Banking Commercial & Non core & Non Core & G&S Data in € mln Npl Factoring Leasing Consolidated & Lending Corporate G&S banking Net interest income 87 26 13 18 57 12 157 o G&S: in
Slide 20: Factoring
Factoring Turnover - €bn 3.0 3.5 3.2 3.5 3.1 3.5 3.3 3.6 1 1 4Q23 factoring turnover +2% YoY and 0.3 +9% QoQ, leveraging on Banca Ifis 0.4 commercial know how 2 Net revenues / average customer 3.2 3.2 3.5 3.4 3.3 3.6 loans at 6.5%, reflecting Banca Ifis 3.0 2.6 discipline on margins. In December the
Slide 21: Leasing
Leasing New business - €mln 1 1• New leasing -4% YoY reflecting two different 127 150 149 221 155 164 142 211 trends: 38 37 o Equipment and technology: Banca Ifis’s 29 growth was above market. The renewal 24 22 101 28 24 87 24 of tax incentives (Sabatini law) provided 53 54 50 56 42 54 some accelera
Slide 22: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution (excluding Revalea) Key numbers* • 1.9mln tickets, #1.3mln borrowers NBV** 1,434 1,422 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 21.2 0.1 (1.2) 20.0 Npls acquired in 4Q23: €0.1bn GBV* • Followin
Slide 23: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.7bn (excludes Revalea) • ERC based on proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.2 2.7 o Type of borrower, location, age, amount due, employment status 1.5 2.5 o Time frame of recovery
Slide 24: 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 483 485 483 471 471 476 475 517 525 Frozen 1,526 22% 409 434 461 Court injunctions [“precetto”] and foreclosures 1,188 17% Order of assignm
Slide 25: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution 1 Cash collection - Excludes Revalea • Npl cash collection at €102mln despite persistent high inflation • As planned in the 3Y Business Plan, the Bank is increasing settlements (“saldi e stralci”) to reduce timeframe of collections Data in € mln (exc
Slide 26: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Waiting for workout - Positions at cost 3,850 4,193 1,571 1,284 1,096 1,149 286 155 Extrajudicial positions 11,155 11,379 13,386 14,302 14,196 13,510 13,558 12,850 - Ongoing attempt at recovery 10,670 10,896 12,9
Slide 27: Npl Business: P&L and cash evolution
Npl Business*: P&L and cash evolution P&L - €mln 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Waiting for workout - Positions at cost Extrajudicial positions 29 25 23 22 27 26 23 37 - Ongoing attempt at recovery (1) 0 4 1 (1) 0 0 3 - Non-judicial payment plans 30 24 18 21 28 26 23 34 Judicial positions 4
Slide 28: Npl Business: portfolio diversification
Npl Business*: portfolio diversification Breakdown of GBV by type Breakdown of GBV by borrower age Other Consumer 18-39 1% 33% 7% >60 40-49 40% 22% Banking 66% 50-59 31% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 9% 35.2% > 100k 24% from 5k to South & Island Center 20k 30% 2
Slide 29: 2.2 Consolidated financial data
Index 2.2 Consolidated financial data 29
Slide 30: Customer loans
Customer loans Customer loans (€ mln) – Includes Revalea 10,114 9,908 10,622 • 4Q23 customer loans at €10,622mln due to: 2,213 2,255 2,248 o Factoring +21% QoQ and leasing +4% QoQ driven by commercial revamping and seasonality 2,366 2,327 2,367 o NPL Business +14% QoQ due to the acquisition and cons
Slide 31: Asset quality – 4Q23
Asset quality – 4Q23 Asset quality (€ mln) Consolidated ratios 2Q23 3Q23 4Q23 • Asset quality ratios in 4Q23 Gross Npe* 5.9% 6.1% 5.5% o Gross Npe Ratio*: 5.5% (6.1% in 3Q23); 4.5% excluding Net Npe* 3.9% 3.9% 3.2% loans in past due vs. Italian public health system Commercial & o Net Npe Ratio*: 3.2
Slide 32: Funding
Funding Funding (€mln) • Customer deposits (+10.1% QoQ, +€534mln) due to target 11,142 11,727 11,821 marketing campaigns in Rendimax and German deposits 1,166 1,139 as well repo with Cassa Compensazione and Garanzia 1,028 +€275mln) 1,578 2,071 2,051 • Securitizations: €1,052mln of factoring; €401mln
Slide 33: 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 5.9% FY22 5.7% FY23 Delta 5.3% 3.5% 5.45% Average interest income* 4.9% Average Average +1.95% Cost of funding** 4.4% 2.5% interest interest 2.6% income income 2.6% 3.1
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 bond area/high dividend equity stock coupled with opportunistic trading approach €0.63bn by Sept. 24, consistent • Low duration level with TLTRO repayment • Strategical use
Slide 35: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 4Q23 operating costs +€27mln QoQ 112 105 119 • +€3mln HR costs QoQ mainly due to contract renegotiaion 91 91 • +€24mln QoQ in other operating costs. Main QoQ changes: o €7mln on FITD contribution o €4mln recurring costs of Revalea o €
Slide 36: 2.3 Company overview
Index 2.3 Company overview 36
Slide 37: 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 38: Stable shareholders and governance
Stable shareholders and governance • La Scogliera provides, as main shareholder, continuity and stability to Banca Ifis La Scogliera (Furstenberg Family) o Long term value creation with a strategy focused on creating continuous adequate earnings, self funding superior growth and delivering attractiv
Slide 39: 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 40: FY23 Results: P&L break-down by business unit
FY23 Results: P&L break-down by business unit Commercial & Corporate banking Corp. Banking Tot. Commercial & Data in € mln Npl Factoring Leasing Non core & G&S Consolidated & Lending Corporate banking Net revenues 295 173 62 705 110 345 65 % of total 42% 25% 9% 16% 49% 9% 100% Loan loss provisions (
Slide 41: Consistent core net income growth 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 42: Total assets and liabilities
Total assets and liabilities Assets (€mln) Liabilities (€mln) Total Funding 13,262 14,051 13,262 14,051 537 678 689 285 534 1,694 Other liabilities 325 858 603 1,598 Other and 1,609 Tangible/Intangible assets 1,139 Shareholders 1,459 999 Equity 1,578 Fiscal Assets 2,424 Other funding 1,853 TLTRO & L
Slide 43: 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 2.8 Average LLP in the last 5Y of ca. 25 bps 80% state guaranteed >80% in rati
Slide 44: 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 2.8 0.21* €350k* Leasing 1.4 2.7 €50k auto €70k equipment Rental 0.2 1.7 €6k Medium term lending 0.8 3.0 €250k Loans to pharmacies 0.8 7.5 €400k Structured finance 0.7 4.0 €12mln NPLs 1.6 4.0 €
Slide 45: 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 5,281 5,815 Corporate Other deposits** 15% (QoQ increase is mainly due to €275mln repo with Cassa and 768 Retail Compensazione and Garanzia) 464 85% 578 502 215 293 Corporate deposits Rendim
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: 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 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,