Banca Ifis S.p.a. · MIL:IF
Banca Ifis — FY2020 Earnings Presentation
39 slides from Banca Ifis's earnings presentation, Feb 11, 2021
Slide 1: 2020 Preliminary results
2020 Preliminary results 11 February 2021
Slide 2: Index
Index 1. 2020 and 4Q 20 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 La Scogliera: implications of CRD IV 2.4 Focus on PPA 2.5 Farbanca key figures 2
Slide 3: 2020 and 4Q 20 results
«> Banca fis 2020 and 4Q 20 results
Slide 4: Key messages
Key messages 1• 2020 net income of €69mln above our €50-65mln guidance despite 2° wave of Covid-19 2• Resilient profitability: all 2020 quarters profitable despite provisions and adjustments for Covid-19 • 2020 Covid-19 total direct provisions and adjustments of €76mln* (€29mln* in 4Q 20) 3• Signifi
Slide 5: €76mln further provisions and adjustments due to Covid-19
€76mln further provisions and adjustments due to Covid-19* Covid-19 further provisions and adjustments - €mln 76 Description • Additional provisions for loan losses in factoring, leasing and structured finance on sectors 31 most impacted by Covid-19 and moratoriums 5 • Funds with negative fair value
Slide 6: Resilient Npl cash collection
Resilient Npl cash collection* Npl cash collection - €mln • €259mln Npl cash collection in 2020, stable vs. 2019 despite Covid-19 and lockdown, mainly due to the strengthening of phone collection 258 259 • This reflects ~40% of order of assignments in the face of public employees and retirees and po
Slide 7: Improving asset quality ratios
Improving asset quality ratios Decrease in Gross and Net Npe ratios* 1 • Discipline in payments: in 2020, Banca Ifis was disciplined to factoring clients/debtors to meet payment deadlines. The technical past due in factoring decreased from €90mln in 4Q 19 10.0% 9.8% to €10mln in 4Q 20 2 • Npl dispos
Slide 8: Quarterly and year results
Quarterly and year results (€ mln) 3Q 20 4Q 20 FY 19 FY 20 1 Net banking income impacted by the slowdown in Net interest income 91.1 120.9 458.9 381.7 judicial and extrajudicial Npl workout and lower Net commission income 15.7 19.4 94.1 74.9 Trading and other revenues 2.1 5.8 5.4 11.2 volumes/net ba
Slide 9: 4Q 20 Results: P&L break-down by business unit
4Q 20 Results: P&L break-down by business unit* Commercial & Corporate banking 1 Including €14mln additional provisions on potential loan losses due to Covid-19 Tot. Corp. Banking Commercial & Non core Data in € mln Npl Factoring Leasing 2 Including €6mln additional provisions on & Lending Corporate
Slide 10: 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* 2020 was impacted by court shutdown IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ 2018 2019 2020 Reversal of PPA ex-IB (pre-tax)* Capital gains from Npl disposal 4Q 20 pre tax 4Q 20 gains 31 30 reversal PPA at €2mln 10
Slide 11: Capital structure
Capital structure B Ifis 15.64% 15.47% scope* • CET1 of 11.29% (-0.41% QoQ and +0.33% since 31 La Dec 2019) and TCR calculated net of dividends 11.69% 0.23% 0.15% 0.11% -0.91% 11.29% Scogliera scope* Other • 2019 dividends of €59mln were booked as debt to Transforma 2020 net RWA tion of profit net v
Slide 12: Appendices
Bancalfis Appendices 2
Slide 13: 2.1 Segment results
> Banca Ifis 2.1. Segment results
Slide 14: Customer loans: Commercial & Corporate banking
Customer loans: Commercial & Corporate banking* Banca Ifis’s Commercial & Corporate banking portfolio includes €0.6bn towards PA; the remaining portfolio is well diversified in terms of sector, geography and size to face the potential impact of the current macroeconomic slowdown (€ bn) 4Q20 Descript
Slide 15: Factoring
Factoring* • Factoring net loans +8.6% QoQ due to Turnover - €bn seasonality and –11.6% YoY due to Covid-19 • Factoring loans of €2.9bn included €0.6bn exposure to the Public Administration • The short term nature of the factoring (average 3.4 3.5 3.4 3.6 3.4 maturity 3-6 months) coupled with the kn
Slide 16: Leasing
Leasing* New business - €mln • New leasing -23% YoY due to commercial activity 165 165 155 184 111 86 113 142 slowdown driven by Covid-19 outbreak 30 23 23 22 • In 4Q 20, customer loans amounted to 63 26 €1,414mln, +1.5%QoQ 64 50 61 21 26 44 • The impact of Covid-19 on loan loss provisions is 25 15
Slide 17: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Key numbers* Npl portfolio evolution • 2.0mln tickets, #1.4mln borrowers NBV** 1,324 1,404 • Extensive portfolio diversification by location, type and age of borrower €mln Npls acquired in 4Q: €1.3bn GBV GBV €bn 18.9 +1.3 -0.4 19.8 • In 4Q 20, Banca Ifis purchased
Slide 18: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.8bn • ERC based proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.3 o Type of borrower, location, age, amount due, employment 2.8 status o Time frame of recovery 1.5 2.5 o Probability of decay
Slide 19: Npl Business: GBV and cash recovery
Npl Business*: GBV and cash recovery Judicial recovery Non judicial recovery – Voluntary plans Judicial recovery (€ mln) GBV % Ongoing GBV, data in €mln 403 413 407 ** Freezed** 3,299 45% processing 352 371 380 398 378 325 328 335 340 Court injunctions [“precetto”] and foreclosures 713 10% Towards O
Slide 20: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution P&L Contribution • In 4Q 20, P&L contribution included €11mln additional provisions to reflect longer timeframes/slightly lower cash recoveries in the Npl portfolio due to Covid-19 consequences Cash collection • In 4Q 20, Npl cash collections were +€
Slide 21: Npl Business: stock by recovery phase
Npl Business*: stock by recovery phase Average GBV 4Q20 Cash Cluster % total Description time Accounting valuation €mln proceeds frame** Waiting for workout - Recently acquired, under analysis to select the Positions 2,140 11% best recovery strategy, to be assigned either to 6 months Acquisition cos
Slide 22: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Waiting for workout - Positions at 2,298 2,014 1,840 3,472 2,864 1,598 1,783 1,794 1,440 1,709 1,885 2,140 cost Extrajudicial positions 8,050 8,145 9,667 8,956 9,745 9,862 9,574 10
Slide 23: Npl Business: P&L and cash evolution
Npl Business*: P&L and cash evolution P&L - €mln 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Waiting for workout - Positions at cost Extrajudicial positions 21 13 13 17 19 19 19 20 17 10 11 7 - Ongoing attempt at recovery 2 (3) (3) (4) (3) (2) (1) 4 (4) (3) (5) (5) - Non-
Slide 24: Npl Business: portfolio diversification
Npl Business*: portfolio diversification Breakdown of GBV by type Breakdown of GBV by borrower age Other 18-39 2% 13% >60 Banking 32% 56% 40-49 Consumer 26% 42% 50-59 29% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 11% 32.6% > 100k 26% from 5k to South & Island Center 20k 29%
Slide 25: 2.2 Consolidated financial data
2.2 Consolidated financial data
Slide 26: Customer loans
Customer loans Customer loans (€ mln) 8,034 7,957 9,135 • In 4Q 20, customer loans amounted to 1,737 €9,135mln (+€1,178mln or +14.8% vs 3Q 20): 1,562 1,622 o +€737mln in Corporate Banking & Lending mainly due to the acquisition of Farbanca 1,724 906 (+€614mln) 987 1,397 1,414 o +€104mln lending in c
Slide 27: Funding
Funding Funding (€mln) 9,171 9,153 9,908 • The increase in customer deposits is driven by the 372 271 249 acquisition of Farbanca (~+€365mln), corporate 1,995 deposits (~+€110mln) and German retail deposits 2,000 1,997 (~+€50mln), pursuing funding diversification 969 933 888 1,100 • The factoring se
Slide 28: Proprietary portfolio
Proprietary portfolio* Strategy • Long term «fundamental» view coupled with opportunistic trading approach • Efficient management of excess cash (ECB deposits) / Low Duration level • Use of enhancing and hedging strategies coupled with both risk and expected credit loss control • Low cumulative RWA
Slide 29: Asset quality – 4Q 20
Asset quality* – 4Q 20 Asset quality (€ mln) • Npl Business not included in this analysis Consolidated ratios 4Q19 3Q20 4Q20 • Npe ratios (excluding Npl Segment and Italian Gross Npe** 9.8% 10.0% 6.4% Government Bonds at amortized costs included in Net Npe** 5.4% 5.0% 3.2% customer loans) reported:
Slide 30: Consolidated operating costs
Consolidated operating costs Operating costs (€mln) • 4Q 20 operating costs ~ +€ 4.7mln vs. 3Q 20: o ~ +€5.4mln QoQ in personnel expenses 81.7 82.0 78.6 73.5 73.9 o ~ -€0.8mln QoQ in administrative expenses and other income/expenses: ▪ -€30.3mln of “other operating income”: €16.8mln of Farbanca barg
Slide 31: 2.3 La Scogliera: implications of CRD IV
2.3 La Scogliera: implications of CRD IV
Slide 32: La Scogliera: implications of CRD IV
La Scogliera: implications of CRD IV • The application of the 2013/36/EU (CRD IV) Directive and EU Regulation La Scogliera S.p.A. 575/2013 (CRR) envisages that 49.2% of the excess capital of the Banca Consolidating Group entity Ifis Group Scope is not included in the CET1 of La Scogliera Group Scope
Slide 33: La Scogliera: Focus on DTA regulatory implications
La Scogliera: 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 (range ca. 5%-12% pe
Slide 34: 2.4 Focus on PPA
> Banca Ifis 2.4 Focus on PPA
Slide 35: 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: 48.9 455 PDs: 0.6 applying a market discount and a liquidity UTPs: 4.6 discount to reflect p
Slide 36: 2.5 Farbanca Key Figures
> Banca Ifis 2.5 Farbanca Key Figures
Slide 37: Farbanca - 2020 Preliminary Key Figures
Farbanca - 2020 Preliminary Key Figures P&L €/mln December 2020 2020 FY (1 month only) Net interest income 1.2 14.5 • On November 27th, Banca Ifis completed the acquisition of Net commission income 0.2 2.7 Farbanca, which became part of the Group Trading and other revenues - (0.1) Total Revenues 1.4
Slide 38: 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,
Slide 39: Banca Ifis
“> Banca Ifis