Banca Ifis S.p.a. · MIL:IF
Banca Ifis — Q3 2008 Earnings Presentation
42 slides from Banca Ifis's earnings presentation, 2008
Slide 1: 3rd Q. 2008
@ bancalFis 3rd Q. 2008
Slide 2: Highlights
Highlights The factoring market and group positioning Strategies Consolidated financial and economic data Attachments
Slide 3: The Credit Crunch: impact on Banca IFIS's activity
The “Credit Crunch”: impact on Banca IFIS’s activity The consequences for SMEs … the impact on Banca IFIS are … Significant increase in the Significant increase in credit risk connected to all spread (the higher cost of BANCA IFIS’s BUSINESS counterparties funding is more than MODEL compensated
Slide 4: The Credit Crunch: impact on Banca IFIS's liquidity
The “Credit Crunch”: impact on Banca IFIS’s liquidity Particular characteristics of Banca IFIS ¼ Banca IFIS maintains higher levels of funding and deposits than the interbanking market ¼ Total absence of securities portfolio: no derivatives, no mortgages, no long terms, no toxic assets ¼ Correspon
Slide 5: Business model and growth opportunities
Business model and growth opportunities A business model that guarantees high … with high growth opportunities performance for a bank … based on Focused on enterprises Strong request for services from enterprises Excellent credit quality Low competition levels Short term lending Excellen
Slide 6: Large reference market
Large reference market Turnover in Italian factoring market 2007 equal to about 109.1 billion Euro Italian factoring market (source - Assifact); Loan commitments equal to 24 billion Euro (Banca IFIS estimation). + Italian short term commercial finance Italian short term market 2007 equal to 360 bill
Slide 7: The factoring market and group positioning
The factoring market and group positioning 2007 figures (source:Assifact) Siderfactor 57 Banco di Desio e della Brianza 74 Tex Factor 82 General Finance 103 Riesfactoring 108 Banca Carige 411 Aosta Factor 511 BCC Factoring 543 Coface Factoring Italia 614 ABF Factoring 814 Turnover represents the ove
Slide 8: Group position in terms of net banking income on Turnover
Group position in terms of net banking income on Turnover Net banking income/Turnover ( f i g ur e s f r o m 2 0 0 7 ) 3.00% 2.77% 2.00% 1.85% * 1.70% 1.00% 0.89% 0.64% 0.75% 0.46% 0.54% 0.33% 0.00% UCF Facto rit M edio Ifitalia Centro C.B .I. B anca M PS Farma IFIS L&F * These figures include the b
Slide 9: Higher growth than market
Higher growth than market 100.0 90.0 Domestic factoring market 80.0 Market Banca IFIS turnover 70.0 CAGR + 8.0% 60.0 2000-2007 50.0 40.0 30.0 Banca IFIS 20.0 CAGR + 35.3% 2000-2007 10.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 Note: Figures for 2000 equal to 10 Turnover: Amount of receivables pur
Slide 10: High profitability and limited credit risk
High profitability and limited credit risk Net profit Non performing loans/Total loans % 30 5 Millions of Euro 4.3 25 43% + 4 3.7 07= 19.5 20 0-20 3.1 0 20 3 AGR 15.0 15.0 15 C 2.0 1.9 2 8.7 10 6.2 5.4 0.9 1 0.8 0.8 5 1.6 2.4 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005
Slide 11: The factoring market and group positioning
Highlights The factoring market and group positioning Strategies Consolidated financial and economic data Attachments
Slide 12: The factoring market and group positioning
The factoring market and group positioning The Italian factoring market of today is characterised by three types of operators: Factoring companies Captive factoring Independent operators belonging to banks companies or specialists - Intesa Mediofactoring - Serfactoring – ENI Group - Ifitalia - BNL G
Slide 13: The factoring market and group positioning (continued)
The factoring market and group positioning (continued) Dimensional approach Profitability approach (Group logic) (Independent) - The assigning enterprises are usually of a - The assigning enterprises are generally significant size and good credit standing small or medium enterprises - The assigned d
Slide 14: Clients and debtors
Clients and debtors Loan commitments broken down by clients (Turnover in millions of Euro) from 1 to 5 From 5 to 15 From 15 to 50 From 50 to 100 Over 100 Unclassifiable 19.5% 16.5% 4.4% 15.2% 26.3% 18.1% Total Outstanding for Standing Debtors as at 31/12/2007 Public Administration Large Groups Excel
Slide 15: Turnover, outstanding and loan commitments 2000 - 2007
Turnover, outstanding and loan commitments 2000 - 2007 € Millions Turnover Outstanding Loans 3,500 3,164 3,000 2,500 2,464 2,190 2,000 1,552 1,500 1,387 1,219 1,163 1,023 1,000 923 802 783 731 722 628 534 470 500 351 371 344 271 244 217130 194 0 2000 2001 2002 2003 2004 2005 2006 2007 15
Slide 16: The sales structure
The sales structure 77 sales staff work in the 17 territorial offices, which together constitute the largest specialised network in Italy. Staff remuneration is, on average, 35% linked to the achievement of the objectives predetermined by the budget. In 1st H 2008, agreements with brokers and lo
Slide 17: Strategies
Highlights The factoring market and group positioning Strategies Consolidated financial and economic data Attachments
Slide 18: The guidelines
The guidelines “From a specialized bank to a relationship-based bank for SMEs” capitalising on market trends 1. Internal growth in core business 2. Internationalisation of core business 3. Extending the range of products offered 4. Expansion in funding sources 18
Slide 19: The new model
The new model From specialised bank to a relationship-based bank Perceived as a factoring Perceived as the answer to specialist for SMEs SMEs every financing and service need Relationships with the client are necessary to conclude Relationship with the client is factoring operations and, as
Slide 20: 1. Internal growth of core business
1. Internal growth of core business Reach potential clients through the reinforcement of the bank’s own network New territorial offices: from 14 at the beginning of 2008 to 28 at the end of 2010 In-house recruitment and selection Agreements with banks (cooperative banks and local banks) spre
Slide 21: 2. Internationalisation of core business
2. Internationalisation of core business Lines of development: next steps Opening of a factor in Romania, within the next few months of 2008, replicating the model applied in Poland (110 M. turnover in start-up year, with forecasts of double that for 2008) Kick off of Paris branch operations wit
Slide 22: 3. Extending the range of products offered
3. Extending the range of products offered Products/services for the new policy of cross-selling and customer retention: Distribution of leasing (agreement already signed and actuated with Centro Leasing Banca throughout Italy) Insurance (already initiated as a corollary to leasing) Medium/lon
Slide 23: 4. Expansion in funding sources
4. Expansion in funding sources Banca IFIS’s financial need is very short-term: Average duration of loans to clients is 110 days Loans to banks are at sight A further diversification of funding will bring about: Reinforcement of bilateral relationships with Italian and European banks Direct
Slide 24: Targets for 2010
Targets for 2010 2007 Target 2010 Turnover 3.2 billion Euro + 100% No. of Clients approx. 1,900 + 100% Net banking income/Turnover Between 1.70% 1.60% - 1.70% At least in line with Cost/Income ratio period 42% 2003-2006 Net profit 19.5 million Euro + 100% Targets do not include the effects of extend
Slide 25: Consolidated financial and economic data
Highlights The factoring market and group positioning Strategies Consolidated financial and economic data Attachments 25
Slide 26: Consolidated income statement: 3rd Quarter 2007/3rd Quarter 2008
Consolidated income statement: 3rd Quarter 2007/3rd Quarter 2008 Consolidated income statement 3rd QUARTER VARIATION € thousands 2008 2007 ABSOLUTE % Net banking income 17,895 15,008 2,887 19.2% Net impairment losses on loans and receivables (1,912) (1,290) (622) 48.2% Net profit from financial acti
Slide 27: Consolidated income statement 2004 - 2007
Consolidated income statement 2004 - 2007 Consolidated income statement YEAR CAGR € thousands 2007 2006 2005 2004 2004/2007 Net banking income 53,718 41,211 38,182 27,958 24.3% Net impairment losses on loans and (2,470) (1,788) (3,976) (4,054) -15.2% receivables Net profit from financial activities
Slide 28: Financial figures: Analysis by Quarter
Financial figures: Analysis by Quarter In 1H 2008, risk repricing continued to show its positive effects: client profitability increases further Profitability: Quarterly evolution 2008 2007 € thousands 3rd Q. 2nd Q. 1st Q. 4th Q. 3rd Q. 2nd Q. 1st Q. Net banking income 17,895 17,375 14,926 15,836 15
Slide 29: Consolidated balance sheet 2004 – 3 Q. 2008
Consolidated balance sheet 2004 – 3 Q. 2008 Consolidated balance sheet PERIOD € millions 30/09/08 31/12/07 31/12/06 31/12/05 31/12/04 Due from banks 211.2 312.1 267.3 128.8 13.90 Due from clients 940 923.1 783.0 710.9 468.20 Fixed assets 36.5 34.7 31.0 24.3 18.80 Other assets items 8.3 5.5 11.3 12.7
Slide 30: Consolidated financial figures: Funding
Consolidated financial figures: Funding Æ Substantial stability in availability (from 1,242 to 1,168 million Euro, a slight decrease in availability following merger processes in the banking market) Æ Committed medium term lines equal 211 million Euro Æ Weighted average duration (on an annual basis)
Slide 31: Consolidated financial figures: Net equity
Consolidated financial figures: Net equity Number of shares No. of shares at Post warrants Post convertible Net Equity as at 31 30/06/2008 exercise * bond loan ** December 2009 is estimated between 31.5 million 34.3 million 38.8 million 220/240 million Euro (*) The exercise period for the Warrants e
Slide 32: ROE % 2000 - 2007
ROE % 2000 - 2007 The reduction in ROE between 2005 and 2006 is due to the increase in Net Equity resulting from the capital increase, carried out in December 2005. ROE* (%) 30 27.7 25 19.1 19.0 20 16.6 13.4 14.4 15 10 8.4 6.0 5 0 2000 2001 2002 2003 2004 2005 2006 2007 * The ROE 2005 and 2006 is
Slide 33: Attachments
Highlights The factoring market and group positioning Strategies Consolidated financial and economic data Attachments
Slide 34: Banca IFIS milestones
Banca IFIS milestones 1983 The company, I.Fi.S. - Instituto di Finanziamento e Sconto S.p.A. -, was incorporated. 1989 IFIS shares received listing admission on the over-the-counter market of Milan. 1997 Registration in the list of financial intermediaries ex art 107 of the TULB (Consolidation Act f
Slide 35: What is factoring?
What is factoring? Supply of good/services ENTERPRISE’S ENTERPRISE (assigning supplier) CUSTOMER Debt (assigned debtor) Assignment of Payment of account Financing debt receivables Banca IFIS The assigning enterprise can gain quick access to credit for its liquidity needs A flexible tool that “te
Slide 36: What is factoring for Banca IFIS?
What is factoring for Banca IFIS? Supply of good/services ENTERPRISE ENTERPRISE’S CUSTOMER The assigning supplier is a SME Has a better credit standing Debt Assignment of Payment of account Financing debt receivables Banca IFIS The current economic scenario, with a higher sensitivity to credit ris
Slide 37: Services offered
Services offered Granting of advances Guarantee service Management service (financing) The client can obtain a Allows the client to obtain a Administration, management total or partial advance total or partial guarantee and collection of the on the receivables against the risk of debtor enterp
Slide 38: Profit per product
Profit per product Management from 0.10% to 1% Æ Recourse factoring commission (flat, monthly) service on total receivables from 0.10% to 1.50% Guarantee Æ Non recourse factoring commission on total receivables guaranteed from 50 bps to 350 bps Advances Æ Interest margin, spread on 3 month Euribor o
Slide 39: Risk assessment in factoring: The different approaches
Risk assessment in factoring: The different approaches Traditional risk Banca IFIS risk assessment assessment The 3 pillars of risk assessment Assessment of NO Operation Assessment NO Operation assignor rejected of debtor rejected YES YES Assessment of Assessment of NO Operation NO Operation receiva
Slide 40: The internal rating system
The internal rating system Banca IFIS has set up its own system of internal rating (SIR) The SIR allows: z Immediate rating of the debtor, the assigning supplier and the operation z Definition of pricing in relation to the risk involved z Monitoring of the counterparty’s rating 40
Slide 41: The factoring market and group positioning
The factoring market and group positioning Net banking income ( i n mi l io ns o f Eur o ) 150 140 110 96 100 83 64 50 54 44 50 25 0 Turnover ( in mi llio ns o f Eur o ) Centro C.B .I. UCF B anca Farma Facto rit M PS Ifitalia M edio IFIS L&F 30,000 25,695 20,000 18,142 17,133 15,443 10,000 3,164 3,3
Slide 42: Stable shareholders
Stable shareholders La Scogliera S.p.A. is controlled by Banca IFIS’s President - Sebastien Egon Fürstenberg. Giovanni Bossi, the C.E.O., has been the bank’s third largest shareholder since 1995. Shareholders Stock option plans 5 stock option plans – two of which have already been activated – for