Banca Ifis exceeds targets and closes 2020 with profit of 68,8 million Euro. Geertman joins the Board of Directors
Banca Ifis exceeds targets and closes 2020 with profit of 68,8 million Euro. Geertman joins the Board of DirectorsIn a year that has been profoundly marked by the COVID-19 pandemic, the Group has exceeded expectations, confirming resilient profitability and taking decisive action to derisk the businessOn the strength of the strategic initiatives and investments made during the year, including the rebranding and the portal dedicated to Ifis4Business companies, the Bank can speed up the route pursued based on the digitisation of the business model, attention to the customer and the valuation of peopleNet profits of 68,8 million Euro, higher than the guidance (between 50 and 65 million Euro) despite the second wave of COVID-19 and the lock-down that involved the country starting OctoberEquity position strengthens with CET1 at 11,29%, (+0,33% on 31 December 2019)Improvement in credit quality: Gross NPE ratio: 6,4% at 31.12.2020 (vs 9,8% at 31.12.2019); Net NPE ratio1: 3,2% at 31.12.2020 (vs 5,4% at 31.12.2019)Additional provisions and adjustments due to COVID-19 for 76 million Euro to cope with the expected deterioration of the quality of the assets in the commercial business and the slower recovery in the NPL business as a result of the pandemicFurther strengthening of the solid liquidity position: approximately 1 billion at 31.12.2020 in reserves and free assets that can be financed by the ECB (LCR above 900%)Purchases of NPLs exceed forecasts, coming to 2,7 billion Euro as compared with the 2,4 billion Euro forecast at the start of the yearRecoveries of NPL cash in the amount of 259 million Euro, in line with 2019 despite COVID-19 and the lock-downGood performance seen in the commercial business in Q4 (factoring turnover of +8,6% on the Q3 and +26% in new leases disbursed in respect of 30 September 2020), showing the Bank’s capacity to make the most of opportunities for a gradual improvement in the macroeconomic context Preliminary period resultsReclassified data2 – 1 January 2020 / 31 December 2020
Net banking income of 468 million Euro (-16,2% on 31.12.2019), negatively impacted by the effects of the pandemic crisis.Operating costs of 308 million Euro (+4,4% on 31.12.2019), mainly due to the incurring of non-recurring costs.Improved asset quality with the disposal of 120 million Euro (GBV) in non-performing credits (mainly ex-Interbanca) in the Q4 2020.Capital requirements with the consolidation within La Scogliera·CET1 up to 11,29% (10,96% at 31 December 2019) versus an SREP requirement of 8,12%; TCR: 14,85% (14,58% at 31 December 2019) versus an SREP requirement of 12,5%. Requirements are calculated net of the 2019 dividend (Euro 1,1 per share), payment of which is suspended as a result of the recommendations of the Bank of Italy and the 2020 dividend (Euro 0,47 per share), which will be proposed for approval by the Shareholders’ Meeting in April 2021.Capital requirements without the consolidation within La Scogliera3
·CET1: 15,47% (14,28% at 31 December 2019); TCR: 19,87% (18,64% at 31 December 2019). Requirements are calculated net of the 2019 dividend (Euro 1,1 per share), payment of which is suspended as a result of the recommendations of the Bank of Italy and the 2020 dividend (Euro 0,47 per share), which will be proposed for approval by the Shareholders’ Meeting in April 2021.
Mestre (Venice), 11 February 2021 – The Board of Directors of Banca Ifis, chaired by the Chairman, Sebastien Egon Fürstenberg, today approved the preliminary results for the year 2020. The draft 2020 financial statements will be approved on 11 March 2021.
Today, moreover, the Board of Directors coopted Frederik Geertman, in lieu of the director Divo Gronchi, who had stood down on 14 January 2021, as member of the board of directors. The BoD has ascertained that requirements of integrity, eligibility and professionalism are met by Mr Geertman.
Mr Geertman’s joining of the Board makes it possible to start a collaboration and coordination with the current Chief Executive Officer to facilitate the succession process and guarantee managerial continuity. As already disclosed to the market, Frederik Geertman will take on the role of Chief Executive Officer of Banca Ifis, subject to the decision of the Board of Directors and his confirmation in the shareholders’ meeting, with effect from the Shareholders’ Meeting called to resolve on the draft 2020 financial statements this coming April.
The terms and conditions of the appointment conferred upon Geertman will be regulated by an agreement to be signed by the Bank upon conferral of the office.“The Bank has efficiently addressed and handled the situation deriving from an unprecedented macroeconomic context and is today well positioned to face up to the coming months and make the most of the growth opportunities offered up by the economic recovery expected starting from next year” – explains Chief Executive Officer Luciano Colombini -. “In 2020, the profitability and collection of non-performing loans have proven to be very resilient indeed and, at the same time, the quality of the assets and the equity requirements have both improved.
Despite the second wave of COVID-19 that also involved our country as from October, Banca Ifis closed 2020 with period profits of 68,8 million Euro, a result that exceeds the guidance given in August 2020, which had estimated between 50 and 65 million Euro. All quarters of 2020 showed profit, although adjustments and additional provisions for a total of 76 million Euro to cope with the expected worsening in the quality of assets in the commercial business and/or lengthier collection times and collections falling slightly in the NPL Segment as a result of the pandemic were made.We have speeded up on the reduction of non-performing loans, mainly originated by the ex Interbanca Group acquired in 2016, reaching our target sales of NPL set in the 2020-22 Business Plan early. In the fourth quarter alone of 2020, we in fact sold approximately 120 million Euro in gross bad loans (GBVs), characterised by a high level of provisioning and seniority, and already processed by Banca Ifis. Following these disposals, at 31 December 2020, the gross non-performing loans index came to 6,4% (as compared with 9,8% at 31 December 2019) and the net non-performing loans index4 came to 3,2% at 31 December 2020 (as compared with 5,4% at 31 December 2019). Quality of assets is also confirmed as holding out, which to date have shown few signs of deterioration on the loans portfolio and in any case mainly relative to positions that were already experiencing critical issues.Good performance seen in the commercial business in Q4 (factoring turnover of +8,6% on the Q3 and new leases disbursed were +26% in respect of 30.09.2020), showing the Bank’s capacity to make the most of opportunities for a gradual improvement in the macroeconomic context.
On the NPL market, we have confirmed our leadership in unsecured small ticket segment, surpassing the forecasts given at the start of the year with the acquisition of a total of 2,7 billion Euro in non-performing loans in nominal amount, which will contribute towards the Group’s profitability for the forthcoming years. The NPL business has proven to be solid, with cash collected in the amount of 259 million Euro despite the effects of COVID-19 and the lock-down, which brought about court closures.In 2020, Banca Ifis strengthened the CET1, which came to 11,29% (+0,33% from 31 December the previous year), net of 2019 dividends (of 59 million Euro), payment of which is suspended in compliance with the recommendations given by the Bank of Italy, and 2020 dividends (25 million Euro), which will be proposed for approval at the forthcoming Shareholders’ Meeting scheduled for 22 April 2021.Despite the fact that 2020 was a year profoundly marked by the pandemic and by an adverse economic scenario, the Bank is profitable with improving equity ratios and quality of assets.
This coming 22 April, with the Shareholders’ Meeting called to resolve on the draft 2020 financial statements, I will leave the office of Chief Executive Officer of Banca Ifis. I would like to thank all the Bank’s employees, customers, shareholders and bondholders. A Group that, on the strength of the strategic initiatives and investments made during the year, including the rebranding and the Ifis4Business portal (on-line banking for our companies), is today able to speed up the route pursued on the basis of digitisation of the business, attention to the customer and the valuation of people”, Luciano Colombini concludes.
HighlightsRECLASSIFIED DATA5 In order to fully implement the Group’s business model, as envisaged by the 2020-2022 Business Plan, changes have been made to the operating Segments previously stated: the Enterprises Segment, renamed Commercial & Corporate Banking groups together the commercial activities intended for enterprises and excludes the portfolios of loans disbursed by Interbanca before the acquisition and set to run-off (previously aggregated into the Enterprises Segment); the Npl Segment has been kept in line with the past, while the Segment, now called Governance & Services and Non-Core, has been integrated into the non-core section, which includes the portfolios excluded from Commercial & Corporate Banking.In addition, Segment reporting relating to income statement components has been expanded to include a view of results at the level of net profit.The comparative information has been restated in line with the new Segment reporting.Highlights from the Banca Ifis Group’s income statements for FY 2020 are set out below.Net banking income1Net banking income totalled 467,8 million Euro, down 16,2% from last year (558,3 million Euro).The COVID-19 health emergency resulted in a reduction in margins in all segments and in particular in those where operations are linked to the legal system. The activities, whose operations are connected with the courts, were first blocked during lock-down and then slowed severely, generating difficulties in proceeding with the legal collection of amounts owed, difficulties that are also reflected in additional adjustments for 22,8 million Euro. In addition to this, a lesser contribution is envisaged of the release of the PPA3 (57,5 million Euro as compared with 69,8 million Euro last year), despite some significant accelerations during the last quarter.The net banking income of the Commercial & Corporate Banking Segment amounted to 222,7 million Euro, down 8,6% on 31 December 2019. The Factoring Area (-9,3%), Leasing Area (-7,3%) and Corporate Banking & Lending Area are down, recording a reduction of 6,2%, mainly due to the lesser contribution of the “reversal PPA”6 as compared with 2019.Net impairment losses1Net credit risk losses totalled 91,4 million Euro at 31 December 2020, compared to net losses of 87,2 million Euro at 31 December 2019 (+4,8%). The Group recorded less in the way of analytical provisions in the Factoring Area, which in 2019 had been negatively impacted by adjustments on certain individually significant counterparties in the constructors and retail segment, juxtaposed by the greater adjustments made in the Corporate Banking & Lending area. Finally, taking into account the current pandemic context and correlated government interventions in support of the economy (i.e. moratoriums), which do not presently make it possible to precisely assess the various risk aspects and the transfer between statuses of the credit risk, the Group has made additional provisions on performing exposures in the segments most greatly exposed to the effects of the pandemic crisis for 31,5 million Euro.Operating costsOperating costs totalled 308,0 million Euro, showing an increase on 31 December 2019 (+4,4%). Below is the breakdown of the item.Personnel expenses, equal to 123,4 million Euro, are down by 5,1% (130,0 million Euro at 31 December 2019) as a result of a prudent incentive policy and greater control over current expenses in light of the current context. The number of Group employees at 31 December 2020 was 1.758 as compared with 1.753 resources at 31 December 2019.Other administrative expenses at 31 December 2019 included 30,9 million Euro in expenses relating to the settlement of certain tax disputes regarding the former subsidiary Interbanca, the economic impact of which is more than offset in the item “other net operating income” for 46,2 million Euro (including the related tax effect) against the activation of outstanding guarantees. Net of this effect, the other administrative expenses at 31 December 2020, which come to 190,8 million Euro rise by 4,1% on 31 December 2019. The increase is mainly due to higher non-recurring costs for professional services and marketing and advertising expenses.Net allocations to provisions for risks and charges amounted to 28,0 million Euro compared with 12,4 million Euro at 31 December 2019. The net change of 15,6 million Euro is mainly due to provisions made for the credit risk on commitments and guarantees for approximately 8,8 million Euro and for 6,9 million Euro to the Solidarity Fund.Other net operating income comes to 51,9 million Euro (77,5 million Euro at 31 December 2019). The item does, however, include some non-recurring items both during this year and last. More specifically, in 2020, the “gains on bargain purchases” are included in relation to the purchase of 70,77% of Farbanca for 16,8 million Euro and the proceeds for contractual indemnity on portfolios acquired in past years for 12,8 million Euro; 2019, on the other hand, contained the proceed linked to the indemnity relative to the definition of the tax dispute of 46,2 million Euro. Net of these items, the item would come to 20,6 million Euro as compared with the 31,3 million Euro as at 31 December 2019, down mainly following the lesser revenues deriving from the recovery of expenses assigned to third parties and recoveries of leasing expenses.Gains on disposal of investments of 24,2 million Euro include the effects of the sale of the Milan property in Corso Venezia, net of the related costs of sale.The value adjustments of goodwill are 0,7 million Euro and refer to the complete impairment of goodwill relative to the subsidiary Cap.Ital.Fin.Pre-tax profit from continuing operations amounted to 91,9 million Euro (-47,7% compared to 31 December 2019). Income taxes amounted to 22,7 million Euro (-56,8% compared to 2019). The tax rate at December 2020 was 24,75%, compared to 29,94% in the prior year. Net profit attributable to the Parent companyThe net profit for the period ended 31 December 2020 attributable to the Parent amounted to 68,8 million Euro, compared to 123,1 million Euro at 31 December 2019 (-44,1% compared to the previous year).
Net banking income of 468 million Euro (-16,2% on 31.12.2019), negatively impacted by the effects of the pandemic crisis.Operating costs of 308 million Euro (+4,4% on 31.12.2019), mainly due to the incurring of non-recurring costs.Improved asset quality with the disposal of 120 million Euro (GBV) in non-performing credits (mainly ex-Interbanca) in the Q4 2020.Capital requirements with the consolidation within La Scogliera·CET1 up to 11,29% (10,96% at 31 December 2019) versus an SREP requirement of 8,12%; TCR: 14,85% (14,58% at 31 December 2019) versus an SREP requirement of 12,5%. Requirements are calculated net of the 2019 dividend (Euro 1,1 per share), payment of which is suspended as a result of the recommendations of the Bank of Italy and the 2020 dividend (Euro 0,47 per share), which will be proposed for approval by the Shareholders’ Meeting in April 2021.Capital requirements without the consolidation within La Scogliera3·CET1: 15,47% (14,28% at 31 December 2019); TCR: 19,87% (18,64% at 31 December 2019). Requirements are calculated net of the 2019 dividend (Euro 1,1 per share), payment of which is suspended as a result of the recommendations of the Bank of Italy and the 2020 dividend (Euro 0,47 per share), which will be proposed for approval by the Shareholders’ Meeting in April 2021.
Mestre (Venice), 11 February 2021 – The Board of Directors of Banca Ifis, chaired by the Chairman, Sebastien Egon Fürstenberg, today approved the preliminary results for the year 2020. The draft 2020 financial statements will be approved on 11 March 2021.
Today, moreover, the Board of Directors coopted Frederik Geertman, in lieu of the director Divo Gronchi, who had stood down on 14 January 2021, as member of the board of directors. The BoD has ascertained that requirements of integrity, eligibility and professionalism are met by Mr Geertman.
Mr Geertman’s joining of the Board makes it possible to start a collaboration and coordination with the current Chief Executive Officer to facilitate the succession process and guarantee managerial continuity. As already disclosed to the market, Frederik Geertman will take on the role of Chief Executive Officer of Banca Ifis, subject to the decision of the Board of Directors and his confirmation in the shareholders’ meeting, with effect from the Shareholders’ Meeting called to resolve on the draft 2020 financial statements this coming April.
The terms and conditions of the appointment conferred upon Geertman will be regulated by an agreement to be signed by the Bank upon conferral of the office.“The Bank has efficiently addressed and handled the situation deriving from an unprecedented macroeconomic context and is today well positioned to face up to the coming months and make the most of the growth opportunities offered up by the economic recovery expected starting from next year” – explains Chief Executive Officer Luciano Colombini -. “In 2020, the profitability and collection of non-performing loans have proven to be very resilient indeed and, at the same time, the quality of the assets and the equity requirements have both improved.
Despite the second wave of COVID-19 that also involved our country as from October, Banca Ifis closed 2020 with period profits of 68,8 million Euro, a result that exceeds the guidance given in August 2020, which had estimated between 50 and 65 million Euro. All quarters of 2020 showed profit, although adjustments and additional provisions for a total of 76 million Euro to cope with the expected worsening in the quality of assets in the commercial business and/or lengthier collection times and collections falling slightly in the NPL Segment as a result of the pandemic were made.We have speeded up on the reduction of non-performing loans, mainly originated by the ex Interbanca Group acquired in 2016, reaching our target sales of NPL set in the 2020-22 Business Plan early. In the fourth quarter alone of 2020, we in fact sold approximately 120 million Euro in gross bad loans (GBVs), characterised by a high level of provisioning and seniority, and already processed by Banca Ifis. Following these disposals, at 31 December 2020, the gross non-performing loans index came to 6,4% (as compared with 9,8% at 31 December 2019) and the net non-performing loans index4 came to 3,2% at 31 December 2020 (as compared with 5,4% at 31 December 2019). Quality of assets is also confirmed as holding out, which to date have shown few signs of deterioration on the loans portfolio and in any case mainly relative to positions that were already experiencing critical issues.Good performance seen in the commercial business in Q4 (factoring turnover of +8,6% on the Q3 and new leases disbursed were +26% in respect of 30.09.2020), showing the Bank’s capacity to make the most of opportunities for a gradual improvement in the macroeconomic context.
On the NPL market, we have confirmed our leadership in unsecured small ticket segment, surpassing the forecasts given at the start of the year with the acquisition of a total of 2,7 billion Euro in non-performing loans in nominal amount, which will contribute towards the Group’s profitability for the forthcoming years. The NPL business has proven to be solid, with cash collected in the amount of 259 million Euro despite the effects of COVID-19 and the lock-down, which brought about court closures.In 2020, Banca Ifis strengthened the CET1, which came to 11,29% (+0,33% from 31 December the previous year), net of 2019 dividends (of 59 million Euro), payment of which is suspended in compliance with the recommendations given by the Bank of Italy, and 2020 dividends (25 million Euro), which will be proposed for approval at the forthcoming Shareholders’ Meeting scheduled for 22 April 2021.Despite the fact that 2020 was a year profoundly marked by the pandemic and by an adverse economic scenario, the Bank is profitable with improving equity ratios and quality of assets.
This coming 22 April, with the Shareholders’ Meeting called to resolve on the draft 2020 financial statements, I will leave the office of Chief Executive Officer of Banca Ifis. I would like to thank all the Bank’s employees, customers, shareholders and bondholders. A Group that, on the strength of the strategic initiatives and investments made during the year, including the rebranding and the Ifis4Business portal (on-line banking for our companies), is today able to speed up the route pursued on the basis of digitisation of the business, attention to the customer and the valuation of people”, Luciano Colombini concludes.
HighlightsRECLASSIFIED DATA5 In order to fully implement the Group’s business model, as envisaged by the 2020-2022 Business Plan, changes have been made to the operating Segments previously stated: the Enterprises Segment, renamed Commercial & Corporate Banking groups together the commercial activities intended for enterprises and excludes the portfolios of loans disbursed by Interbanca before the acquisition and set to run-off (previously aggregated into the Enterprises Segment); the Npl Segment has been kept in line with the past, while the Segment, now called Governance & Services and Non-Core, has been integrated into the non-core section, which includes the portfolios excluded from Commercial & Corporate Banking.In addition, Segment reporting relating to income statement components has been expanded to include a view of results at the level of net profit.The comparative information has been restated in line with the new Segment reporting.Highlights from the Banca Ifis Group’s income statements for FY 2020 are set out below.Net banking income1Net banking income totalled 467,8 million Euro, down 16,2% from last year (558,3 million Euro).The COVID-19 health emergency resulted in a reduction in margins in all segments and in particular in those where operations are linked to the legal system. The activities, whose operations are connected with the courts, were first blocked during lock-down and then slowed severely, generating difficulties in proceeding with the legal collection of amounts owed, difficulties that are also reflected in additional adjustments for 22,8 million Euro. In addition to this, a lesser contribution is envisaged of the release of the PPA3 (57,5 million Euro as compared with 69,8 million Euro last year), despite some significant accelerations during the last quarter.The net banking income of the Commercial & Corporate Banking Segment amounted to 222,7 million Euro, down 8,6% on 31 December 2019. The Factoring Area (-9,3%), Leasing Area (-7,3%) and Corporate Banking & Lending Area are down, recording a reduction of 6,2%, mainly due to the lesser contribution of the “reversal PPA”6 as compared with 2019.Net impairment losses1Net credit risk losses totalled 91,4 million Euro at 31 December 2020, compared to net losses of 87,2 million Euro at 31 December 2019 (+4,8%). The Group recorded less in the way of analytical provisions in the Factoring Area, which in 2019 had been negatively impacted by adjustments on certain individually significant counterparties in the constructors and retail segment, juxtaposed by the greater adjustments made in the Corporate Banking & Lending area. Finally, taking into account the current pandemic context and correlated government interventions in support of the economy (i.e. moratoriums), which do not presently make it possible to precisely assess the various risk aspects and the transfer between statuses of the credit risk, the Group has made additional provisions on performing exposures in the segments most greatly exposed to the effects of the pandemic crisis for 31,5 million Euro.Operating costsOperating costs totalled 308,0 million Euro, showing an increase on 31 December 2019 (+4,4%). Below is the breakdown of the item.Personnel expenses, equal to 123,4 million Euro, are down by 5,1% (130,0 million Euro at 31 December 2019) as a result of a prudent incentive policy and greater control over current expenses in light of the current context. The number of Group employees at 31 December 2020 was 1.758 as compared with 1.753 resources at 31 December 2019.Other administrative expenses at 31 December 2019 included 30,9 million Euro in expenses relating to the settlement of certain tax disputes regarding the former subsidiary Interbanca, the economic impact of which is more than offset in the item “other net operating income” for 46,2 million Euro (including the related tax effect) against the activation of outstanding guarantees. Net of this effect, the other administrative expenses at 31 December 2020, which come to 190,8 million Euro rise by 4,1% on 31 December 2019. The increase is mainly due to higher non-recurring costs for professional services and marketing and advertising expenses.Net allocations to provisions for risks and charges amounted to 28,0 million Euro compared with 12,4 million Euro at 31 December 2019. The net change of 15,6 million Euro is mainly due to provisions made for the credit risk on commitments and guarantees for approximately 8,8 million Euro and for 6,9 million Euro to the Solidarity Fund.Other net operating income comes to 51,9 million Euro (77,5 million Euro at 31 December 2019). The item does, however, include some non-recurring items both during this year and last. More specifically, in 2020, the “gains on bargain purchases” are included in relation to the purchase of 70,77% of Farbanca for 16,8 million Euro and the proceeds for contractual indemnity on portfolios acquired in past years for 12,8 million Euro; 2019, on the other hand, contained the proceed linked to the indemnity relative to the definition of the tax dispute of 46,2 million Euro. Net of these items, the item would come to 20,6 million Euro as compared with the 31,3 million Euro as at 31 December 2019, down mainly following the lesser revenues deriving from the recovery of expenses assigned to third parties and recoveries of leasing expenses.Gains on disposal of investments of 24,2 million Euro include the effects of the sale of the Milan property in Corso Venezia, net of the related costs of sale.The value adjustments of goodwill are 0,7 million Euro and refer to the complete impairment of goodwill relative to the subsidiary Cap.Ital.Fin.Pre-tax profit from continuing operations amounted to 91,9 million Euro (-47,7% compared to 31 December 2019). Income taxes amounted to 22,7 million Euro (-56,8% compared to 2019). The tax rate at December 2020 was 24,75%, compared to 29,94% in the prior year. Net profit attributable to the Parent companyThe net profit for the period ended 31 December 2020 attributable to the Parent amounted to 68,8 million Euro, compared to 123,1 million Euro at 31 December 2019 (-44,1% compared to the previous year).
