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Banca Ifis: first quarter net profit, up 31,4% to 45,9 million Euro, confirms strong acceleration in profitability

Inside information
  • The increase in profitability confirms the strength and validity of the business model even in the current macroeconomic environment.
  • The favourable revenue performance, up 8% compared to the first quarter of 2022, is driven by the positive correlation of trade receivables to rising interest rates, recoveries in the Npl Segment and the acceleration of business following the digitisation process undertaken by the Bank.
  • The credit cost, at an all-time low, includes an additional 5 million Euro of prudential provisions on performing exposures in view of the current scenario still characterised by uncertainty.
  • Customer deposits are stable thanks to the strong retail component of more than 90%.
  • The CET1 Ratio grows to 15,21%, excluding the profit for the first quarter of 2023, thereby exceeding capital requirements (8,65%).
  • The Shareholders’ Meeting approved the balance of the dividend for FY 2022 in the amount of 0,40 Euro, with ex-dividend date set for 22 May 2023.

Q1 2023 results
Reclassified data – 1 January 2023/31 March 2023

  • The Group’s net profit amounts to 45,9 million Euro, up 31,4% from 34,9 million Euro in the first quarter of 2022.
  • Net banking income, up 7,7% to 175,8 million Euro from 163,3 million Euro in the first quarter of 2022, benefits from the positive correlation of Commercial & Corporate Banking Segment to rising interest rates. Revenues in the Npl Segment are broadly stable compared to the first quarter of 2022, highlighting the solidity of out-of-court funding despite rising inflation.
  • Operating costs of 91,1 million Euro (+3,7% compared to 87,8 million Euro in the first quarter of 2022) increase due to higher personnel expenses (39,7 million Euro compared to 36,6 million Euro in Q1 2022) and higher other administrative expenses (53,8 million Euro compared to 53,6 million Euro in Q1 2022). The moderate growth reflects the offsetting of inflation by careful cost control and continuous efficiency improvements.
  • The credit cost is 10 million Euro and includes a further 5 million Euro of prudential provisions made on performing exposures to cover potential risks related to the macroeconomic context.
  • Liquidity position, at 31 March 2023, is equal to over 1,4 billion Euro in reserves and free assets that can be financed by the ECB (LCR above 800%).

Capital requirements

  • CET1 comes to 15,21% (15,01% at 31 December 2022) and TCR to 18,45% (18,82% at 31 December 2022), calculated excluding the first quarter 2023 profit.


Rome, 11 May 2023 – The Board of Directors of Banca Ifis met today and approved the financial results for the first quarter of 2023.

“The first quarter of 2023 confirmed the further acceleration of Banca Ifis’s profitability, driven by favourable revenue and low credit cost trends. The strategy identified in the 2022-2024 Business Plan and focused on enhancing our business model has led us to further strengthen the risk/return ratio also in relation to the current uncertain global macroeconomic context. Our portfolio mainly consists of short-term assets, quality loans, to a large extent secured, and deposits diversified both by maturity and by funding channel: this is why we look positively at the continuation of the current year in which we are resolutely aiming to achieve the profit targets already revised upwards with respect to the targets announced in the Business Plan. We want to position ourselves increasingly as the point of reference for small and medium-sized Italian companies, assisting them through the challenges that the market places before them. All this will further strengthen our already high capacity to remunerate shareholders, which already in 2022 made us the first bank in Italy by dividend-yield” says Frederik Geertman, CEO of Banca Ifis.

In the first quarter of 2023, the Banca Ifis Group net profit amounted to 45,9 million Euro, up 31,4% from the 34,9 million Euro posted in the same period last year.

The Commercial & Corporate Banking Segment’s revenues, up 19,0% compared to the first quarter of 2022, reflect the Bank’s positive correlation to rising interest rates (85% of the commercial loan portfolio is at floating rates). Factoring and Leasing volumes, which are closely linked to invoice amounts and the price of the underlying assets, showed a favourable dynamic, directly reflecting the increase in inflation and the new commercial initiatives. The focus on short-term assets allows the Bank to quickly adjust its liquidity profile and commercial strategy: factoring to SMEs, amounting to approximately 2 billion Euro, has an average maturity of 3 months, 70% of receivables due from customers have a maturity of less than 3 years and 90% have a maturity of less than 5 years. Receivables due from customers are almost all secured, thus mitigating the credit risk: factoring has the dual guarantee of the assigned debtor and the assignor, leasing has the guarantee of ownership of the underlying asset, medium-term loans are 80% backed by the state, and receivables from pharmacies usually have the pharmacy itself as collateral. The structured finance portfolio, which represents only 7% of receivables due from customers and is currently all classified as performing, has low leverage (NFP/EBITDA of 2,7x) and prudential provisions against potential macroeconomic risks.

In the Npl Segment, cash recoveries on acquired portfolios amounted to 97,5 million Euro, up 7,0% on the first quarter of 2022. Out-of-court collection activities and new voluntary payment plans, which are being closely monitored by the Bank, do not show any significant impact to date from rising inflation and interest rates. In the period, the Npl portfolio acquired has approximately two-thirds of its value secured by the borrower’s labour or other real assets.

The portfolio owned in the Governance & Services and Non-Core Segment benefited from the purchase during the fourth quarter of 2022 of a portfolio of debt securities issued by leading European financial and corporate institutions with a particularly attractive risk-return ratio. Some long-dated government bonds were sold in the first quarter, benefiting from a particularly favourable market momentum.

The prudent credit policy led to a further 5 million Euro increase in the reserves set aside for potential macroeconomic risks. The Gross Npe Ratio and the Net Npe Ratio stand respectively at 6,1% and 4,1%. These figures would come in respectively at 4,5% and 2,5% excluding reclassifications resulting from the application of the New Definition of Default regulations to receivables from the National Health System (NHS), which are characterised by limited credit risk and long payment terms.

Deposits from customers, which are unchanged in the first three months of the year, consist of more than 90% of the retail component and are diversified in terms of maturity and funding and channel. Deposits in the Rendimax account are approximately two-thirds term and 83% guaranteed by the Interbank Fund, being less than 100.000 Euro. The cost of deposits, up from the previous quarter, is nevertheless in line with our forecasts.

The capital ratios of both the Bank and the Group are well above the minimum required levels, with a consolidated CET1 Ratio of 15,21% (15,01% at 31 December 2022) and a consolidated Total Capital Ratio of 18,45% (18,82% at 31 December 2022).

On 20 April 2023, the Shareholders’ Meeting approved the distribution of a balance on the dividend for FY 2022 of 0,40 Euro (gross of withholding taxes) for each of the Banca Ifis shares issued and outstanding (and therefore excluding treasury shares held by the Bank). The total 2022 dividend (interim payment and balance) thus amounts to 1,40 Euro per share. The balance on the 2022 dividend will be paid with ex-dividend date 22 May 2023, record date of 23 May 2023 and payment date of 24 May 2023.