Npl and factoring: on these two businesses, which have been its strength in recent years, IFIS Bank it will also insist on the industrial plan to 2022, presented in Milan by the managing director Luciano Colombini. The declared objective for the three-year period is to achieve a net profit of 147 million euros (from 123 in 2019), with growth in the core businesses, investments of 60 million euros and 190 new hires. THEThe Npl portfolio will be expanded with the purchase of a further 8,5 billion (nominal value) of non-performing loans, and also the commercial banking business will be driven by an increase in loans to customers of at least one billion.
“This plan – said Colombini, who took office less than a year ago at the head of the Veneto institute – stems from a concerted effort. Banca IFIS has the good fortune and merit of overseeing particularly profitable business segments, in which it is highly specialized and in which it has accumulated a great competitive advantage over the years. This position must be maintained: with specialization, flexibility, speed of response and innovation. As is known, there are two driving businesses: Npl and factoring. We were pioneers on impaired loans, the first in Italy to treat them with an industrial logic since 2011. Today we are the undisputed leader in the unsecured sector deriving from consumer credit, with a 51% share, 24 billion managed, 450 employees who work there, 1 billion of liquidity recovered. In factoring we are the fourth player with a 6% market share”.
The plan will also have two great ambitions, as specified by Colombini during the works: “Transparency and sustainability. Someone told me that we are giving too much data to the markets, in my opinion this is right. As far as costs are concerned, we will keep them absolutely under control, starting with personnel costs, which will increase due to the new bank contract that has just been renewed". In any case, administrative costs are expected to be stable, while there will be significant savings following the optimization of the real estate assets: the new headquarters in Mestre and the sale of the building in Corso Venezia in Milan will result in a pre-tax capital gain of 25 million. The cost/income ratio is expected to drop from the current 55,9% to 52%.
How to grow in the Npl business, Banca IFIS explained to the press and investors by presenting a new structure. In the meantime, the aim will also be to grow on the secured ones, then the structure will be made up of two companies: IFIS Npl will buy the portfolios, while the 100% subsidiary FBS will take care of debt collection. “The corporate redesign will allow us a much more effective presence on the market,” said Colombini. The goal is to significantly reduce the percentage of gross non-performing exposure (Gross NPE ratio) from the current 10% to 6%, and the net one from 5,7% to 2,4%.
As regards the other financial targets, the CET 1 ratio is expected to increase from 11% in 2019 to 12% in 2022, well above the current Srep threshold of 8,12%, thanks to the forecast growth of the operating profit. The payout ratio is expected to be around 40-45% over the period of the plan, i.e. between now and the end of 2022: at the current share price levels (above 15 euro, with the share rising by 2,5% during the presentation of the plan), the percentage ensures a return of over 7%. The funding strategy envisages 10,5 billion euro in funding, of which 5,5 from retail customers, 1,4 billion in Tltro, 3,3 billion in debt securities and 0,3 billion in other debt. The plan envisages greater diversification and the issue of 1,7 billion bonds over three years.
