(Alliance News) - The Bank of Italy has further tightened its oversight of BFF Bank. An ongoing inspection has uncovered weaknesses in internal controls and accounting irregularities within its factoring operations.
As reported by Milano Finanza, the Supervisory Authority has appointed two commissioners, Raffaele Lener and Francesco Fioretto, to work alongside the board of directors. The move aims to bolster governance and oversight without resorting to full receivership.
The critical issues span three main areas. The primary concern involves credit classification, which could lead to non-performing exposures of up to EUR1.3 billion. However, as these are largely claims against the public administration, expected losses remain limited. Despite this, the bank continues to meet its capital requirements.
The second area concerns previously identified accounting errors: approximately EUR54 million was incorrectly recorded between 2019 and 2023, resulting in a EUR15.1 million hit to equity. Further audits estimate an additional impact of roughly EUR3.4 million.
The third front involves litigation with the public administration totaling approximately EUR400 million gross, against which EUR70 million has been provisioned.
Against this backdrop, the Bank of Italy has requested a postponement of the 2025 financial statements to incorporate the inspection's findings. The situation remains challenging for investors: dividends are frozen, and the stock has plummeted by approximately 60%. Market capitalization has shrunk to EUR600 million and remains under pressure following the latest regulatory intervention.
By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter
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