Banca Ifis S.p.a. · MIL:IF
Banca Ifis — H1 2024 Earnings Presentation
46 slides from Banca Ifis's earnings presentation, Aug 2, 2024
Slide 1: 1H24 results
% Bancalfis 1H24 results 2 August 2024
Slide 2: Index
Index 1. 2Q24 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Company overview 2
Slide 3: 2Q24 results
A ~ <,> Banca lfis 1 2Q24 results
Slide 4: 2Q24 results: net income of €46mln
2Q24 results 1 Net income of €46mln (+3% YoY). 1H24 net income of €94mln (+3% YoY) • Resilient revenues in Commercial Banking, Npl and Proprietary Finance: the Bank is delivering on offsetting cost of funding increase • Reduced the sensitivity to net interest income by gradually increasing the durat
Slide 5: Net revenues
Net revenues Quarterly Revenues • Net revenues at €189mln (+9.6% YoY) +9.6% YoY • 2Q24 net revenues breakdown: o Commercial banking revenues at €87mln (€89mln in 1Q24, and €87mln in 2Q23) with commercial performance and pricing discipline offsetting cost of funding increase. Gross revenues - excludi
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 2.8Y in March 24 to
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 -4% YoY +10% YoY Market +5% Market -5% Market +3% 85 82 79 81 87 3.4 3.5 69 3.0 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 • Banca Ifis’s 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 • Npl cash collection stable YoY extrajudicial recovery** (€mln) despite significant increase in inflation and in interest rates 98 98 94 69 73 80 proves Banca Ifis’s know-how in Npl
Slide 9: Inflation impact countered by efficiency, enabling continued investments
Inflation impact countered by efficiency, enabling continued investments in transformation and positioning Operating ▪ Other operating costs - Main changes vs. 1Q24: 101 102 104 costs o +€1.4mln due to the acceleration on IT and marketing expenses o +€0.5mln software depreciation Includes ca. €8mln
Slide 10: Asset quality ratios further improving and overlay fully expresses Bank’s prudence
Asset quality ratios further improving and overlay fully expresses Bank’s prudence Loan loss provisions* • Asset quality protected by stable overlays, significantly above peers (>1% of performing loans); coverage ratio of NPEs stable Coverage 4Q23 1Q24 2Q24 9 Bad loans 78% 79% 78% UTP 44% 46% 45% 7
Slide 11: At present, no signs of macro credit risks materializing
At present, 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: 7.4% 90 89 88 83 91% 92% 91% 91% 92% 91% 91% 91% 91% 90% 78 77 75 75 75 76 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q2
Slide 12: Quarterly results
Quarterly results Reclassified Consolidated Income Statement - (€ 1Q24 2Q24 1H23 1H24 mln) Net interest income 140.8 146.6 274.7 287.4 1 Reflects higher trading gains in government and Net commission income 23.1 23.8 50.3 46.9 corporate bonds and, in 1Q24, €6mln gains Trading and other revenues 21.4
Slide 13: Capital ratios evolution
Capital ratios evolution CET1 of 15.32% as of 30 Jun 24, including Total 17.43% 0.17% 17.59% net income (after deducting the expected capital dividends accrued in 1H 2024) Key items of CET1 evolution in 2Q24 CET1 14.98% 0.34% 15.32% • +0.43% due to net income (after deducting the dividends accrued i
Slide 14: Appendices
A ~ <,> Banca lfis y ) Appendices
Slide 15: 2.1 Segment results
Index Bancalfis 2.1 Segment results 15
Slide 16: 2Q24 Results: P&L break-down by business unit
2Q24 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 80 29 12 19 61 6 147 o G&S: inc
Slide 17: Factoring
Factoring Turnover - €bn 3.1 3.5 3.3 3.6 3.0 3.5 • Banca Ifis has strong focus on profitability: in 2Q24 factoring average spread at 4.37% (on top of base rate*), +0.14% up YoY 3.4 3.3 3.6 3.5 • Net revenues** / average customer loans at 6.9% well 3.0 3.0 above market average 1Q23 2Q23 3Q23 4Q23 1Q2
Slide 18: Factoring – Italian business
Factoring – Italian business* Market share - 2023 Loans and revenues breakdown -2Q24 23% 26% 19% Other 31% 37% Small [< 10 mln] Medium [< 50 17% 20% mln] 5% Large [> 50 mln] 25% 24% Active clients Turnover Loans Revenues • Banca Ifis is market leader in terms of number of • Medium/large corporate re
Slide 19: Leasing
Leasing New business - €mln 1 1• The renewal of tax incentives just approved 155 164 142 211 150 169 by the Government may provide some acceleration for the leasing market in 2H24. Banca Ifis’s growth was above market in both 37 equipment/technology and automotive 28 29 27 24 87 31 50 56 54 38 54 o
Slide 20: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution (excluding Revalea) Key numbers* • 1.7mln tickets, #1.2mln borrowers NBV** 1,399 1,377 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 19.8 0.2 (1.6) 18.4 Npls acquired in 2Q24: €0.2bn GBV • Following
Slide 21: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.6bn (excludes Revalea) • ERC based on proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.2 2.6 o Type of borrower, location, age, amount due, employment status 1.3 2.5 o Time frame of recovery
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 525 528 522 Frozen 1,274 19% 517 Court injunctions [“precetto”] and foreclosures 1,263 19% 485 483 476 475 471 471 Order of assignments 861
Slide 23: 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 €94mln substantially stable • As planned in the 3Y Business Plan, the Bank is progressively increasing settlements (“saldi e stralci”) to reduce timeframe of collections Data in € mln (exc
Slide 24: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Waiting for workout - Positions at cost 3,850 4,193 1,571 1,284 1,096 1,149 286 155 126 254 Extrajudicial positions 11,155 11,379 13,386 14,302 14,196 13,510 13,558 12,850 12,838 11,561 - Ongoing attemp
Slide 25: 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 1Q24 2Q24 Waiting for workout - Positions at cost Extrajudicial positions 29 25 23 22 27 26 23 37 21 20 - Ongoing attempt at recovery (1) 0 4 1 (1) 0 0 3 (2) (2) - Non-judicial payment plans 30 24 18 21 28 26 23
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% 31% 6% 40-49 >60 21% 42% Banking 50-59 67% 31% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 9% 35.6% > 100k 25% from 5k to South & Island Center 20k 30% 2
Slide 27: 2.2 Consolidated financial data
Index 2.2 Consolidated financial data 27
Slide 28: Customer loans
Customer loans Customer loans (€ mln) – Includes Revalea 10,622 10,089 10,464 • 2Q24 customer loans at €10,464mln, +€375mln QoQ 2,213 2,130 1,948 mainly due to: o Normal seasonality in factoring (+€172mln QoQ) 2,366 2,399 2,427 o +€81mln QoQ Government bonds at amortized costs and +€54mln repo of Go
Slide 29: Asset quality – 2Q24
Asset quality – 2Q24 Asset quality (€ mln) • Asset quality ratios in 2Q24 Consolidated ratios 4Q23 1Q24 2Q24 o Gross Npe Ratio*: 5.4% (5.7% % in 1Q24); 4.4% excluding loans in past due vs. Italian public health Gross Npe* 5.5% 5.7% 5.4% system Net Npe* 3.2% 3.3% 3.0% o Net Npe Ratio*: 3.0% (3.3% in
Slide 30: Funding
Funding Funding (€mln) • Customer deposits (+10% QoQ, +€619mln) due to repo 11,821 11,339 11,227 with Euronext Clearing (+€461mln) 1,139 851 913 816 431 • Securitizations: €1,273mln of factoring and leasing; 1,578 €325mln of Banca Credifarma securitizations 1,706 1,598 1,853 • €400mln senior bond is
Slide 31: 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% 6.18% 6.2% 6.2% Average Average +0.73% Cost of funding** 5.9% 5.7% interest interest 5.3% income income 4.9% 2.3% 2.2
Slide 32: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 2Q24 operating costs +€2mln QoQ 112 104 • HR costs stable QoQ 101 102 91 • +€2mln QoQ in other operating costs. Main QoQ changes: o €1.4mln due to the acceleration on IT and marketing expenses o +€0.5mln software depreciation 2Q23 3Q2
Slide 33: 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 stocks coupled with opportunistic trading approach 2Q24 proprietary portfolio revenues at • Mid duration level around €30.2mln, +€1.1mln (+4%) vs.
Slide 34: 2.3 Company overview
Index 2.3 Company overview 34
Slide 35: 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 36: 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 37: 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 38: Consistent “core net income” growth, driven by our core capabilities
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 39: Total assets and liabilities
Total assets and liabilities Assets (€mln) Liabilities (€mln) Total Funding 13,654 13,473 13,654 13,473 574 510 685 653 Other liabilities 273 246 637 1,742 1,736 1,184 Other and 1,472 Tangible/Intangible assets 851 913 Shareholders 1,423 Equity 816 431 Fiscal Assets 1,598 Other funding 1,706 1,510 T
Slide 40: 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 2.7 80% state guaranteed >80% in rating classes 1-5 1.6 Av
Slide 41: 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 2.7 0.21* €360k* Leasing 1.4 2.7 €50k auto €60k equipment Rental 0.2 2.0 €5k Medium term lending 0.7 2.7 €210k Loans to pharmacies 0.8 7.5 €400k Structured finance 0.8 4.0 €12mln Npls 1.6 4.0 €
Slide 42: 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 6,156 6,775 Corporate Other deposits 18% (QoQ increase is mainly due to Cassa di Compensazione e 1,098 Retail Garanzia) 451 82% 636 648 570 571 Corporate deposits Rendimax deposits: 85% prot
Slide 43: 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 44: 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 45: 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 46: 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,