Banca Ifis S.p.a. · MIL:IF
Banca Ifis — Q1 2024 Earnings Presentation
46 slides from Banca Ifis's earnings presentation, May 9, 2024
Slide 1: 1Q24 results
% Bancalfis 1Q24 results 9 May 2024
Slide 2: Index
Index 1. 1Q24 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Company overview 2
Slide 3: 1Q24 results
A ~ <,> Banca lfis 1 1Q24 results
Slide 4: 1Q24 results: Net income of €47mln
1Q24 results 1 Net income of €47mln (+33% QoQ and +3% YoY) • Resilient revenues in Commercial Banking, Npl and Proprietary Finance: the Bank is delivering on offsetting cost of funding increase • Positive impacts of non-commercial items: o €4.7mln (€7.2mln before taxes) trading income benefiting fro
Slide 5: Net revenues
Net revenues Quarterly Revenues • Net revenues at €185mln (+5% YoY) • 1Q24 net revenues breakdown: o Commercial banking revenues at €89mln (€86mln in 4Q23 +5% YoY and €88mln in 1Q23) with strong commercial performance and pricing discipline more than offsetting cost of funding increase o Npl revenue
Slide 6: 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) stable YoY -11% YoY +6% YoY Market +2% Market -34.9% Market +3.4% 3.6 125 87 3.0 3.0 77 81 78 69 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 1Q23 4Q23 1
Slide 7: 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 97 102 98 73 89 73 proves Banca Ifis’s know-how in Npl
Slide 8: Inflation impact countered by efficiency, enabling continued investments
Inflation impact countered by efficiency, enabling continued investments in transformation and positioning Operating 91 112 102 ▪ Other operating costs - Main changes vs. 4Q23: costs • -€3mln due to savings on lawyers, information providers and travelling expenses Exposed to 43 • -€3mln seasonality
Slide 9: Asset quality confirmed and overlay fully expresses Bank's prudence
Asset quality confirmed 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 further improved Coverage 4Q22 4Q23 1Q24 22 Npl 69% 78% 79% UTP 39% 44% 46% 9 Past due 7
Slide 10: No signs of macro credit risks materializing in commercial business
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: 8.1% 90 89 88 83 91% 92% 91% 91% 92% 91% 91% 91% 91% 78 77 75 75 75 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24
Slide 11: 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 12: €1.25bn TLTRO pre-payment. €0.79bn TLTRO expiring in Sept. 24
€1.25bn TLTRO pre-payment. €0.79bn TLTRO expiring in Sept. 24 Main funding Completed management actions Ongoing management actions maturities ✓ €1.25bn TLTRO pre-payment in Dec 2023 and ➢ All funding actions completed well in €0.79bn TLTRO March 24 advance and well ahead of plan (expiring in Sep 202
Slide 13: Capital ratios evolution
Capital ratios evolution CET1 of 14.98% as of 31 Mar 24, excluding Total 17.44% -0.01% 17.43% 1Q24 net income capital Key items of CET1 evolution in 1Q24 CET1 14.87% 0.11% 14.98% • 25bps due to -€169mln of RWA: o -€255mln RWA due to the decrease in 0.25% -0.14% credit risk mainly driven by seasonal
Slide 14: Quarterly and annual results
Quarterly and annual results Reclassified Consolidated Income Statement - (€ mln) 1Q23 4Q23 1Q24 Net interest income 139.4 156.7 140.8 Net commission income 23.3 23.9 23.1 1 Includes €7.2mln from the disposal of some Trading and other revenues 13.1 11.6 1 21.4 Government and Corporate bonds (benefit
Slide 15: Appendices
A ~ <,> Banca lfis y ) Appendices
Slide 16: 2.1 Segment results
Index Bancalfis 2.1 Segment results 16
Slide 17: 1Q24 Results: P&L break-down by business unit
1Q24 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 74 28 13 20 60 6 141 o G&S: inc
Slide 18: Factoring
Factoring Turnover - €bn 3.1 3.5 3.3 3.6 3.0 • Banca Ifis has strong focus on profitability: in 1Q24 factoring average spread at 4.07% (on top of base rate*), +0.14% up YoY 3.4 3.3 3.6 • Net revenues** / average customer loans at 6.6% well 3.0 3.0 above market average • Turnover is down QoQ due to u
Slide 19: Factoring – Italian business
Factoring – Italian business* Market share - 2023 Loans and revenues breakdown -1Q24 23% 13% 11% Other 34% 41% Small [< 10 mln] Medium [< 50 22% 23% mln] 5% Large [> 50 mln] 31% 25% Active clients Turnover Loans Revenues • Banca Ifis is market leader in terms of number of • Medium/large corporate re
Slide 20: Leasing
Leasing New business - €mln 1 1• The renewal of tax incentives, expected in 155 164 142 211 150 1H24, 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 31 24 87 50 56 54 38 o Equipment and technolog
Slide 21: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution (excluding Revalea) Key numbers* • 1.9mln tickets, #1.3mln borrowers NBV** 1,422 1,399 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 20.0 0 (0.2) 19.8 No Npls acquired in 1Q24 • Following the acquis
Slide 22: 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 1.4 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 Frozen 1,388 20% 517 Court injunctions [“precetto”] and foreclosures 1,236 18% 485 483 476 471 471 475 Order of assignments 832 12%
Slide 24: 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 €98mln substantially stable despite persistent high inflation • As planned in the 3Y Business Plan, the Bank is progressively increasing settlements (“saldi e stralci”) to reduce timeframe
Slide 25: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Waiting for workout - Positions at cost 3,850 4,193 1,571 1,284 1,096 1,149 286 155 126 Extrajudicial positions 11,155 11,379 13,386 14,302 14,196 13,510 13,558 12,850 12,838 - Ongoing attempt at recovery 10
Slide 26: 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 Waiting for workout - Positions at cost Extrajudicial positions 29 25 23 22 27 26 23 37 21 - Ongoing attempt at recovery (1) 0 4 1 (1) 0 0 3 (2) - Non-judicial payment plans 30 24 18 21 28 26 23 34 23 Judic
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% 33% 7% >60 40-49 41% 21% Banking 66% 50-59 31% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 9% 35.1% > 100k 24% 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 9,908 10,622 10,089 • 1Q24 customer loans at €10,089mln, -€533mln QoQ 2,213 1,948 due to: 2,248 o Normal seasonality in factoring (-€273mln QoQ) 2,366 2,399 2,367 o Disposal of some bonds booked in G&S (-€289mln QoQ) 6,221 1,552 1,551 6,763 6,
Slide 30: Asset quality – 1Q24
Asset quality – 1Q24 Asset quality (€ mln) • Asset quality ratios in 1Q24 Consolidated ratios 3Q23 4Q23 1Q24 o Gross Npe Ratio*: 5.7% (5.5% % in 4Q23); 4.7% excluding loans in past due vs. Italian public health Gross Npe* 6.1% 5.5% 5.7% system Net Npe* 3.9% 3.2% 3.3% o Net Npe Ratio*: 3.3% (3.2% in
Slide 31: Funding
Funding Funding (€mln) • Customer deposits (+6% QoQ, +€342mln) due to 11,727 11,821 11,339 marketing campaigns in Rendimax and German deposits 1,166 1,139 851 816 • Securitizations: €1,346mln of factoring and leasing; 1,578 2,071 €360mln of Banca Credifarma securitizations 1,706 1,757 1,853 • “Other
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% 6.15% Cost of funding** Average Average +0.70% 5.9% 6.2% interest interest 5.7% 5.3% income income 2.2% 2.3% 4.9% 2.4
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 equity stocks coupled with opportunistic trading approach • Mid duration level (2.8Y) • Strategic use (at around 81% of total assets* in 1Q24) of
Slide 34: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 1Q24 operating costs -€9mln QoQ 112 • HR costs stable QoQ 101 102 91 91 • -€9mln QoQ in other operating costs. Main QoQ changes: o -€3mln due to savings on lawyers, information providers and travelling expenses o -€3mln seasonality on
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 (Furstenberg 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: 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 40: Total assets and liabilities
Total assets and liabilities Assets (€mln) Liabilities (€mln) Total Funding 14,051 13,654 14,051 13,654 678 537 685 574 285 1,694 Other liabilities 858 273 1,742 1,184 Other and 1,609 1,139 851 Shareholders Tangible/Intangible assets 1,423 Equity 1,578 816 Fiscal Assets Other funding 1,706 1,853 TLT
Slide 41: 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 2.6 80% state guaranteed >80% in rating classes 1-5 1.6 Av
Slide 42: 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 2.6 0.20* €400k* Leasing 1.4 2.7 €50k auto €60k equipment Rental 0.2 2.0 €5k Medium term lending 0.7 2.8 €250k Loans to pharmacies 0.8 7.5 €400k Structured finance 0.8 4.0 €12mln Npls 1.6 4.0 €
Slide 43: 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 5,815 6,156 Corporate Other deposits 11% (QoQ decrease is mainly due to 451 €275mln repo with Euronext 768 636 Clearing (former "Cassa di Retail Compensazione e Garanzia") 89% 578 570 293 Co
Slide 44: 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 45: 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 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,