Banca IFIS S.p.A. · MIL:IF
Banca IFIS — 9M 2020 Earnings Presentation
36 slides from Banca IFIS's earnings presentation, Nov 6, 2020
Slide 1: 9M 2020 results
9M 2020 results 6 November 2020
Slide 2: Index
Index 1. 3Q 20 results 2. Appendices 2.1 Segment results 2.2 Consolidated financial data 2.3 La Scogliera: implications of CRD IV 2.4 Focus on PPA 2
Slide 3: 3Q 20 results
«> Banca fis 3Q 20 results
Slide 4: Key messages
Key messages • 1 Confirmed our 2020 guidance. We expect a 2020 net income in the upper range of our €50-65mln guidance despite 2° wave of Covid-19 • 2 Resilient profitability: all 2020 quarters profitable • 3Q20 net income of €16mln • 9M20 net income of €52mln 3 • Prudent provisions for Covid-19 • 3
Slide 5: €47mln direct provisions due to Covid-19
€47mln direct provisions due to Covid-19 Prudent Covid-19 direct provisions Illustrative impact of Covid-19 47 Prudent provisions for moratoriums and sectors • In addition to €47mln provisions/write offs, 3Q20 11 there are other direct and indirect impacts most impacted by Covid-19 of Covid-19 mainl
Slide 6: Resilient NPL cash collection
Resilient NPL cash collection • +13% NPL cash collection in July-Sept. 2020 vs. July-Sept. 2019 • NPL cash collection flat in Jan-Sept. 2020 vs. Jan-Sept. 2019 • This reflects ~40% of order of assignments in the face of public employees and retirees and portfolio diversification of ~ 1.3m borrowers
Slide 7: Customer loans: Commercial & Corporate banking
Customer loans: Commercial & Corporate banking* Banca Ifis’s Commercial & Corporate banking portfolio includes €0.8bn towards PA; the remaining portfolio is well diversified in terms of sector, geography and size to face the potential impact of the current macroeconomic slowdown (€ bn) 3Q20 Descript
Slide 8: Quarterly and nine months results
Quarterly and nine months results (€ mln) 2Q 20 3Q 20 9M 19 9M 20 1 Net banking income impacted by the slowdown in Net interest income 78.3 91.1 324.6 260.8 judicial and extrajudicial Npl workout and lower Net commission income 18.7 15.7 68.7 55.5 Trading and other revenues 2 9.9 2.1 (2.1) 5.4 volum
Slide 9: 3Q 20 Results: P&L break-down by business unit
3Q 20 Results: P&L break-down by business unit* Commercial & Corporate • 1 Provisions for moratoriums and sectors banking most impacted by Covid-19 Corp. Banking Non core Data in € mln Npl Factoring Leasing & Lending & G&S Consolidated •2 Includes €4.5mln of accruals of Italian Central Fund on Depos
Slide 10: Seasonality in Npl and PPA and effect of Covid-19
Seasonality in Npl and PPA and effect of Covid-19 1Q 20 results* Source: management accounting data Net interest income in Npls* 2020 was impacted by court shutdown IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ 2018 2019 2020 Reversal of PPA ex-IB (pre-tax)* Capital gains from Npl disposal 3Q 20 pre t
Slide 11: Capital structure
Capital structure B IFIS 15.45% 15.64% scope* • CET1 of 11.69% (+0.12% QoQ and +0.73% since 31 La Dec 2019) and other capital ratios calculated 0.11% 0.05% 0.09% -0.14% 11.69% Scogliera 11.58% scope* RWA Realization Other Lower o Excluding 2019 dividends suspended in Decrease of DTAs valuation minor
Slide 12: Appendices
Bancalfis Appendices 2
Slide 13: 2.1 Segment results
> Banca Ifis 2.1. Segment results
Slide 14: Factoring
Factoring* Turnover - €bn • Factoring net loans –8.2% QoQ and –10.3% YoY due to August seasonality. Banca Ifis was disciplined to factoring clients/debtors to meet payment deadlines o Ca. 50% of Banca Ifis’s clients were open in lockdown as operating in critical sectors as defined by Law 3.4 3.5 3.4
Slide 15: Leasing
Leasing* New business - €mln • New leasing -27% YoY due to commercial activity slowdown 165 165 155 111 86 113 driven by Covid-19 outbreak 23 23 22 • In 3Q 20, customer loans amounted to € 1,394mln stable QoQ (-0.2% QoQ) 64 50 61 21 26 • The impact of Covid-19 on loan loss provisions is mitigated 25
Slide 16: Npl Business: portfolio evolution
Npl Business*: portfolio evolution Key numbers* Npl portfolio evolution • 1.9mln tickets, #1.3mln borrowers NBV** 1,305 1,324 • Extensive portfolio diversification by location, type and age of €mln borrower NPLs acquired in 3Q: €0.8bn GBV GBV €bn 18.2 + 0.8 -0.2 18.9 • In 3Q 20, Banca Ifis purchased
Slide 17: Npl Business: ERC
Npl Business*: ERC ERC assumptions ERC: €2.6bn • ERC based proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers 1.1 o Type of borrower, location, age, amount due, employment 2.6 status o Time frame of recovery 1.5 2.5 o Probability of decay
Slide 18: Npl Business: GBV and cash recovery
Npl Business*: GBV and cash recovery Judicial recovery Non judicial recovery – Voluntary plans Judicial recovery (€ mln) GBV % Ongoing GBV, data in €mln processing 380 403 413 407 398 Freezed** 2,518 39% 317 325 328 335 340 352 371 271 276 283 Court injunctions [“precetto”] and foreclosures 642 10%
Slide 19: Npl Business: cash recovery and P&L contribution
Npl Business*: cash recovery and P&L contribution P&L Contribution • Significant increase in P&L contribution despite court shut down in August as Banca Ifis was efficient in capturing the effects of the court reopening after lockdown Cash collection • In 3Q 20, cash collections revamped after court
Slide 20: Npl Business: stock by recovery phase
Npl Business*: stock by recovery phase Average GBV 3Q20 Cash Cluster % total Description time Accounting valuation €mln proceeds frame** Waiting for workout - Recently acquired, under analysis to select the Positions 1,885 10% best recovery strategy, to be assigned either to 6 months Acquisition cos
Slide 21: Npl Business: GBV and NBV evolution
Npl Business*: GBV and NBV evolution GBV - €mln 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 Waiting for workout - Positions at cost 2,298 2,014 1,840 3,472 2,864 1,598 1,783 1,794 1,440 1,709 1,885 Extrajudicial positions 8,050 8,145 9,667 8,956 9,745 9,862 9,574 10,378 10,619
Slide 22: Npl Business: P&L and cash evolution
Npl Business*: P&L and cash evolution P&L - €mln 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 Waiting for workout - Positions at cost Extrajudicial positions 21 13 13 17 19 19 19 20 17 10 11 - Ongoing attempt at recovery 2 (3) (3) (4) (3) (2) (1) 4 (4) (3) (5) - Non-judicial pay
Slide 23: Npl Business: portfolio diversification
Npl Business*: portfolio diversification Breakdown of GBV by type Breakdown of GBV by borrower age Other 18-39 2% 12% >60 Banking 32% 55% 40-49 Consumer 27% 43% 50-59 29% Breakdown of GBV by ticket size Breakdown of GBV by region 5k North 11% 32.4% > 100k 27% from 5k to Center South & Island 20k 29%
Slide 24: 2.2 Consolidated financial data
2.2 Consolidated financial data
Slide 25: Customer loans
Customer loans Customer loans (€ mln) 7,601 8,034 7,957 • In 3Q 20, customer loans were substantially flat 1,562 QoQ 1,073 1,622 • In 3Q 20, Commercial and Corporate banking 879 906 loans were down 3.0% QoQ mainly due to 987 August seasonality 1,404 1,397 1,394 • The QoQ increase in customer loans i
Slide 26: Funding
Funding Funding (€mln) 8,468 9,171 9,153 • Retail deposit base proved to be resilient. Ongoing 271 249 diversification into German deposits. Lengthened the 223 duration of Rendimax deposits 791 2,000 1,997 • Reached the target of 50% balance between retail 1,085 933 888 customer deposits vs wholesal
Slide 27: Proprietary portfolio
Proprietary portfolio* Strategy • Long term «fundamental» view with opportunistic trading approach • Efficient management of excess cash (ECB deposits) / Low Duration level • Use of enhancing and hedging strategies coupled with both risk and expected credit loss control • Low cumulative RWA level an
Slide 28: Asset quality – 3Q 20
Asset quality – 3Q 20 Asset quality (€ mln) • Npl Business not included in this analysis Commercial & Gross Coverage % Net • NPE ratios in Commercial & Corporate Banking Corporate Banking reported a slight decrease QoQ, due to the increase in Bad loans 205 80% 42 customer loans: UTPs 187 52% 90 o Gr
Slide 29: Consolidated operating costs
Consolidated operating costs Operating costs (€mln) • 3Q 20 operating costs ~ -€8mln vs. 2Q 20, mainly driven by: - ~ -8mln in other administrative expenses and other income / 81.7 82.0 74.0 73.5 73.9 expenses mainly due to: o ~-7mln of provisions to solidarity fund for voluntary exits accrued on pr
Slide 30: 2.3 La Scogliera: implications of CRD IV
2.3 La Scogliera: implications of CRD IV
Slide 31: La Scogliera: implications of CRD IV
La Scogliera: implications of CRD IV • The application of the 2013/36/EU (CRD IV) Directive and EU Regulation La Scogliera S.p.A. 575/2013 (CRR) envisages that 49.2% of the excess capital of the Banca Consolidating Group entity Ifis Group Scope is not included in the CET1 of La Scogliera Group Scope
Slide 32: La scogliera: Focus on DTA regulatory implications
La scogliera: Focus on DTA regulatory implications • DTAs related to write downs of loans convertible into tax credits (under Law 214/2011) Data in €/mln Convertible DTAs • Their recovery is certain regardless of the presence of future taxable income and is defined by fiscal law (range ca. 5%-12% pe
Slide 33: 2.4 Focus on PPA
> Banca Ifis 2.4 Focus on PPA
Slide 34: Focus on ex-Interbanca PPA
Focus on ex-Interbanca PPA* • In 2016, following the acquisition of former Net customer loans and PPA - €mln Interbanca, Banca Ifis valued the performing and non performing loans of Interbanca by Performing: 59.5 455 PDs: 0.6 applying a market discount and a liquidity UTPs: 14.3 discount to reflect
Slide 35: 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,
Slide 36: Banca Ifis
“> Banca Ifis