Banca Ifis S.p.a. · MIL:IF
Banca Ifis — 9M23 Earnings Presentation
44 slides from Banca Ifis's earnings presentation, Nov 9, 2023
Slide 1: 9M23 results
Z\(eBanca Ifis 1983|2023 9M23 results 9 November 2023
Slide 2: Index
Index 1. 3Q23 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 Company overview 2
Slide 3: 3Q23 results
P = «,>Bancalfis 1 3Q23 results
Slide 4: 3Q23 results summary
3Q23 results summary 1 Net income in 3Q23 of €34mln (vs. €45mln in 2Q23 and €33mln in 3Q22). 9M23 net income at €125mln (+18% YoY) 2 Loan loss provisions at €15mln, including €6mln on a structured finance position. Total management overlays stable at €65mln 3 Windfall tax to be allocated to non-dist
Slide 5: Net revenues
Net revenues Quarterly Revenues Stable • Net revenues at €164mln (-5% QoQ due to typical August seasonality and substantially stable YoY) • 3Q23 net revenues breakdown: 165 173 164 o Commercial banking revenues at €84mln (€87mln in 2Q23 and €83mln in 3Q22). Excluding capital gains on direct and indi
Slide 6: Commercial activity reflects market and 3Q typical seasonality
Commercial activity reflects market and 3Q typical seasonality Factoring turnover (€bn) New leasing equipment and New automotive (€mln) technology (€mln) +2% +3% -12% Market -4% Market -14% Market +23% 3.2 3.4 3.3 76 85 78 79 73 64 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 • After strong resilien
Slide 7: Npl portfolio performance resilient and well-positioned
Npl portfolio performance resilient and well-positioned* Quarterly cash collection (€mln) Revenues from judicial and extrajudicial recovery** (€mln) • Until 3Q23, modest impact from higher interest rates or 101 100 inflation on debtors. The bank 98 67 69 70 keeps monitoring new voluntary plans in th
Slide 8: Inflation impact countered by efficiency, enabling continued investments
Inflation impact countered by efficiency, enabling continued investments in transformation and positioning Operating 93 105 93 costs* Includes €4mln FITD&SRF ▪ Other operating costs*: costs o Impact of inflation and volume growth more than offset by 35 suppliers’ contract renegotiations Exposed to I
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* • 3Q23 LLP at €15mln includes €6mln provisions on a structured finance position (classified as UTP, under restructuring) 15 6 • Asset quality protected by stable overlays at €65mln (>1.2% of EAD) 2Q23 3Q23 Gros
Slide 10: 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: 1.8% Coverage Stage 2: 2.9% 89 89 90 89 88 88 84 83 91% 92% 91% 91% 91% 92% 92% 78 75 75 9% 8% 9% 9% 9% 8% 8% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 11: 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 €2bn TLTRO ✓ €0.4bn re-marketing of senior leasing ➢ Senior bond issues, subject to market securitization notes conditions (expiring in Sep 2024)
Slide 12: Capital ratios evolution
Capital ratios evolution Total 18.04% +0.38% 18.42% CET1 actual of 15.53% as at 30 Sep 23, capital calculated including 9M net income and interim dividend (net of full year foreseeable dividend not paid out yet**) CET1 15.01% +0.52% 15.53% Key items of CET1 evolution in 3Q23: 0.44% 0.17% (0.09%) • +
Slide 13: Banca Ifis: growing the core business, attractive dividends
Banca Ifis: growing the core business, attractive dividends Net income - €mln Executing the Business Plan: 123 69 101 141 160 8 • Marginal reliance on extraordinary revenues 8 (PPA) or non recurring items 47 17 • Capex and opex to ensure operational 133 152 excellence and make the Bank future-proof
Slide 14: Outlook
Outlook Macroeconomic scenario in Italy Banca Ifis ✓ Macroeconomic slowdown, with high ✓ Focus on running the core business well; interest rates and gradually reducing maintain investments inflation ✓ Continued emphasis on short term lending ✓ Corporates more cautious on capex with attractive risk /
Slide 15: Quarterly results
Quarterly results Reclassified Consolidated Income Statement - 2Q23 3Q23 9M22 9M23 (€ mln) 1 Includes €8mln dividends and €3mln capital gains Net interest income 135.2 134.8 392.5 409.5 Net commission income 27.0 24.0 65.2 74.3 on PE investments due to the disposals of some Trading and other revenue
Slide 16: Appendices
P = «,>Bancalfis y ) Appendices
Slide 17: 2.1 Segment results
Index Banca fis 2.1 Segment results 17
Slide 18: 3Q23 Results: P&L break-down by business unit
3Q23 Results: P&L break-down by business unit Commercial & Corporate banking Tot. 1 €6mln FITD&SRF provisions Corp. Banking Commercial & Non core & Data in € mln Npl Factoring Leasing Consolidated & Lending Corporate G&S banking 2 Breakdown of customer loans in Net interest income 62 27 13 19 60 13
Slide 19: Factoring
Factoring Turnover - €bn 3.0 3.5 3.2 3.5 3.1 3.5 3.3 1 1 3Q23 factoring turnover +2% YoY above market (- 0.3 4% YoY) while maintaining price and underwriting 0.4 discipline 2 Net revenues / average customer loans at 7.1%, 3.2 3.2 3.5 3.4 3.3 reflecting Banca Ifis discipline on margins 3.0 2.6 1Q22 2
Slide 20: Leasing
Leasing New business - €mln 1 1• New leasing -4% YoY reflecting two different 127 150 149 221 155 164 142 trends: 38 o Equipment ad technology: Banca Ifis’s growth 29 was above market. The renewal of tax 24 22 101 28 24 24 incentives (Sabatini law) may provide some 53 54 50 56 42 54 acceleration for
Slide 21: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Npl portfolio evolution Key numbers* • 2.0mln tickets, #1.4mln borrowers NBV** 1,465 1,434 €mln • Extensive portfolio diversification by location, type and age of borrower GBV €bn 22.0 0.0 (0.8) 21.2 Npls acquired in 3Q23: €0bn GBV • Acquisition of Revalea from Med
Slide 22: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.7bn • ERC based on proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.4 2.7 o Type of borrower, location, age, amount due, employment status 1.3 2.5 o Time frame of recovery o Probability of de
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 483 485 483 476 475 517 Frozen 1,572 21% 434 461 471 471 409 Court injunctions [“precetto”] and foreclosures 1,119 15% Order of assignments
Slide 24: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution 1 Cash collection • Npl cash collection at €100mln despite persistent high inflation • As planned in the 3Y Business Plan, the Bank is expecting a slight increase of settlements (“saldi e stralci”) to reduce timeframe of collections Data in € mln (ex
Slide 25: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Waiting for workout - Positions at cost 3,850 4,193 1,571 1,284 1,096 1,149 286 Extrajudicial positions 11,155 11,379 13,386 14,302 14,196 13,510 13,558 - Ongoing attempt at recovery 10,670 10,896 12,914 13,831 13,720
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 Waiting for workout - Positions at cost Extrajudicial positions 29 25 23 22 27 26 23 - Ongoing attempt at recovery (1) 0 4 1 (1) 0 0 - Non-judicial payment plans 30 24 18 21 28 26 23 Judicial positions 44 47 44 62 46
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 40% 22% Banking 66% 50-59 31% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 9% 34.9% > 100k 23% 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) 9,834 10,114 9,908 • 3Q23 customer loans at €9,908mln (-2% QoQ) driven 2,255 by factoring seasonality (-8% QoQ) 2,101 2,248 o Loan demand slightly decreased in the market as corporate are more cautious due to high interest rates 2,296 2,327 2,367 o Banca Ifis ma
Slide 30: Asset quality – 3Q23
Asset quality – 3Q23 Asset quality (€ mln) Consolidated ratios 1Q23 2Q23 3Q23 • Asset quality ratios in 3Q23 Gross Npe* 6.1% 5.9% 6.1% o Gross Npe Ratio*: 6.1% (5.9% in 2Q23); 4.6% excluding Net Npe* 4.1% 3.9% 3.9% loans in past due vs. Italian public health system Commercial & o Net Npe Ratio*: 3.9
Slide 31: Funding
Funding Funding (€mln) 11,112 11,142 11,727 • Securitizations: €957mln of factoring; €401mln of Banca Credifarma securitizations and €400mln re- 1,166 marketing Senior Notes of auto lease securitization 1,060 1,028 2,071 • New bond issue of €300mln in Sept 2023 with 5Y 2,035 2,051 maturity 1,477 1,4
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 5.7% 5.3% 2022 2023 YTD Delta Average interest income* 4.9% 3.5% 5.3% Cost of funding** 4.4% Average Average +1.8% interest interest 2.6% income income 3.5% 2.6% 3.1% 3
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 stock coupled with opportunistic trading approach • Low duration level • Use of enhancing and hedging strategies coupled with both risk and e
Slide 34: Reclassified consolidated operating costs
Reclassified consolidated operating costs* Operating costs (€mln) 3Q23 operating costs 112 105 • HR costs stable QoQ. Cost of personnel expected to increase in 93 91 93 coming quarters due to the renewal of the labour contract at national level • -€11mln QoQ in other operating costs: o -€7mln on NPL
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) o Long term value creation with a strategy focused on creating continuous adequate earnings, self funding superior growth and delivering attractiv
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: 9M23 Results: P&L break-down by business unit
9M23 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 202 130 46 82 259 51 512 % of total 39% 25% 9% 16% 51% 10% 100% Loan loss provisions 0
Slide 40: Consistent core net income growth with a low risk profile
Consistent “core net income” growth, driven by our capabilities, with a low risk profile Net income target, €mln Actual Target Banca Ifis’ risk profile Business Plan targets Net 118** 137* 161 • Structurally protected liquidity income, €mln position (maturities) • Marginal contribution of 160* 161 e
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; double risk assessment; rapidly € bn adapting sector exposure Secured against the pharmacy, regulated sector, protected from competitors 2.4 Average LLP in the last 5Y of ca. 25 bps 80% state guaranteed >80% in rati
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 2.4 0.21* €350k* Leasing 1.3 2.7 €50k auto €70k equipment Rental 0.2 2.0 €6k Medium term lending 0.7 3.0 €250k Loans to pharmacies 0.8 7.5 €400k Structured finance 0.7 4.0 €12mln NPLs 1.4 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 5,461 5,281 Corporate Other deposits** 10% QoQ decrease is due to repo Retail 699 90% 464 (€72mln in 3Q23 vs. financial 502 institutions and €306mln in 2Q23 566 215 vs Cassa and Compensazion
Slide 44: 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,