BANCA IFIS S.P.A.
Fitch Ratings has upgraded
The agency has also removed the Rating Watch Evolving on all three ratings.
The rating actions follow Fitch's full review of Ifis's business and operations following the completed merger of Ifis (formerly FBS S.p.A.) withBanca Ifis S.p.A .'s (BB+/Stable/B) banking group. The rating upgrade follows enhancements to unsecured collections procedures since the Fitch's previous rating action inFebruary 2019 , which are now in line with Fitch's definition of 'highest level of proficiency' (i.e. '1' rating category) as per its Criteria for Rating Loan Servicers.RATING ACTIONSENTITY/DEBT RATING PRIOR IFIS NPL Servicing S.p.A.
? ABS Special Servicer
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? CMBS Special Servicer
CSS2+ Affirmed CSS2+
? RMBS Special Servicer
RSS2+ Affirmed RSS2+
VIEW ADDITIONAL RATING DETAILS
Key Rating Drivers
Ifis is a product of the merger of the former FBS S.p.A. (a servicer specialised in servicing secured assets) with
Ifis has a longstanding history in special-servicing all asset types. Its assets under management (AUM) remained broadly stable at
While Fitch's criteria do not associate AUM volumes with specific servicer rating levels, Ifis's lower exposure to secured assets implies that the company has less experience in working out secured assets than for the unsecured portion of its portfolio. This view is also reflected in the different rating assigned to the asset-backed segment of the servicer's business, compared with the commercial and residential ones.
Work-out processes and controls are commensurate with the '1' rating category and are, in Fitch's view, well-defined. Processes and controls for defining recovery strategies (both judicial and extra-judicial) for unsecured credits are highly automated, and mirror those used by
Extra-judicial workouts are carried out using a wide network of home collectors, who have access to the servicing system. The servicer has a dedicated team that monitors borrower performance against payment arrangements (e.g. salary assignments) and the team receives real-time alerts of missed payments. Residential and commercial work-out processes are less automated, with more reliance on asset managers to create business plan projections and work-out strategies.
Ifis's senior and middle management have good experience - averaging 23 and 13 years, respectively - in key sectors such as law, asset management, audit, with company tenure averaging 10 years at both levels. Turnover across both management and operational staff is low compared with that seen across the industry, at below 2% across all levels in the 12 months leading up to the cut-off date of
Risk governance is strong and commensurate with the '1' rating category. Ifis's control framework follows the three lines of defence, which Fitch deems best practice. The first line is at operational level and includes system-driven process controls performed by either a monitoring team or team managers. The second line comprises the compliance and anti-money laundering function, and the risk management team. Ifis's internal audit function - third line of defence - reports to the board; the first internal audit cycle for the merged entity is yet to be concluded and will be across a three-year time horizon.
Loan-administration processes and controls are sound and commensurate with the '1' rating category for residential and '2' for the commercial and AB assets. Loans are assigned to the work-out teams automatically through the system by a dedicated team, while reporting is automated with data sourced in formats defined in servicing agreements. The servicer reported no restated, delayed or erroneous reports in the 12 months leading to the cut-off date. Ifis's payment processes increasingly rely on semantic identification tools enriched with machine learning, as well as digital, self-service platforms for borrowers. For the secured assets, Ifis sends valuation requests to real-estate valuers through the system one month prior to the expiry of the previous evaluation. Real-estate valuers use Ifis's IT platform to upload their reports.
Ifis has an internally-developed platform for its non-performing loan (NPL) work-out management, complemented with ancillary applications used by home collectors that are linked to the main system. Artificial intelligence is used in business areas such as cash management and unsecured business plan creation. Detailed disaster-recovery and business-continuity plans are available - last updated in
During the pandemic, Ifis - in coordination with the parent - created a dedicated senior-management taskforce to enforce business-continuity protocols. In
The rating action commentary is based on information provided to Fitch as at
Additional information is available on www.fitchratings.com
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
APPLICABLE CRITERIA
Criteria for Rating Loan Servicers (pub.
ADDITIONAL DISCLOSURES
Solicitation Status
Endorsement Policy
ENDORSEMENT STATUS
IFIS NPL Servicing S.p.A . -
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