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MarketScreener Homepage  >  Equities  >  Italian Stock Exchange  >  Illimity Bank S.p.A.    ILTY   IT0005359192

ILLIMITY BANK S.P.A.

(ILTY)
  Report
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SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

illimity Bank S p A : 3Q20 Results presentation

11/11/2020 | 05:03am EST

3Q20 results

11 November 2020

Key highlights

Corrado Passera, CEO

1

-

qoq

to €13.2mln in 3Q20, at

and >20% pro-forma; at

3Q19

4Q19

1Q20

2Q20

3Q20

Data in €mln

13.2

10.3 10.0

9.5

7.2

4.5

2.1 1.4

Legend

(6.8)

Net result

(9.4)

Pre-tax result

2

-

A

B

C

A+B+C

Originated Business(1)

Terms

Advanced

BP 2018-23

inception to date

agreed(2) to

Total

Target 2020

pipeline(3)

Data in €mln

(10 November 2020)

be signed

Customer loans where not otherwise stated

Non accounting figures

~2,441

~201

~474

~3,116 ~3,000-3,500

Cross-over

475(4)

~83

~48

~606

~300

& Acq. Finance

SME

Turnaround

243(5)

~29

~87

~359

600-700

Division

Factoring

T/O 586(7)

~300

128(6)

~79

~107(8)

~314

Distressed Credit

1,154(5)

~10

~185

~1,349

1,700-2,000

Investments

Distressed

Senior Financing

441

-

~47

~488

100-200

Credit I&S

Servicing(9)

~9,400

~60

~1,800

~11,300

5,100-6,300

Division

AUM (GBV/Managed assets)

Notes: Non accounting figures; (1) This aggregate includes the SME loans granted/purchased, distressed credit investments booked, senior financing loans granted in the period and the value of the deals signed but yet

to be booked, owing to a settlement structure based on multiple tranches or to a time lag between the signing of the master agreement and the date of loan disbursement/onboarding. This aggregate additionally

includes part of the net loans to existing customers of BIP, due to their features considered consistent with illimity's SME segment for about €60mln. It includes also the portfolio sold; (2) Deals in final stage of the

formalization of the agreement/contractual terms; (3) Specific business opportunities for which the bank envisages there is a reasonable expectation to close the transactions in the forthcoming months; (4) Including BIP

3

core SME for about €60mln and high yield bond for €27mln; (5) It includes financial instruments, accounted for in the balance sheet item "20. c) Other financial assets mandatorily at fair value" for accounting purposes;

(6) Gross Book Value at 31 October 2020; (7) Turnover related to Factoring only for the year 2020; (8) Credit line to be granted; (9) The AUM of the servicing unit includes the gross book value of distressed credit and

the value of property and capital goods managed by IT Auction, net of cash flows and portfolio disposals

-

Resilient and

Selective business origination

Dynamic portfolio

dynamic core

with focus on guarantees

management consistently

businesses

produces sizable profits

No loan book deterioration,

moratorium unchanged

Continued performance in

gross cash flow

Investing to

play new

Unique value proposition

market

in UTP portfolio opportunities based on cross-competencies

opportunities

illimitybank.com keeps delivering according to plan

JV with Fabrick in , the

leading Italian fintech platform in digital financial services

Strong impulse to digitalisation paves the way to success of

Open banking platforms

4

-

HOME

PRODUCTS

  • CURRENT ACCOUNTS
  • DEPOSITS
  • PSD2

BANK PLATFORM

illimitybank.com

FINTECH PLATFORM

WHITE LABEL PLATFORM

(coming soon)

STRONG TECH &

COST SYNERGY

3rd PARTY

PRODUCTS

  • CONSUMER CREDIT
  • PAYMENTS
  • UTILITIES

5

-

TRADITIONAL RETAIL

OPEN BANKING

BANKING

for most players

Branches + Home

Mostly machine-based

banking

relationship

Presence in many

Home product factoriescountries without any local leadership

High costs

Mostly commodity products

OPEN BANKING at illimity

  • approach
  • Multiple choice of
  • in selected countries
  • of valuable third-party products

DECREASING VOLUMES

INCREASING VOLUMES

NEGATIVE P&L

NEGATIVE P&L

6

Direct Banking

Carlo Panella

7

  • The JV: a unique way to address the retail banking arena

HOME

PRODUCTS

  • CURRENT ACCOUNTS
  • DEPOSITS
  • PSD2

BANK PLATFORM

illimitybank.com

FINTECH PLATFORM

WHITE LABEL PLATFORM

(coming soon)

STRONG TECH &

COST SYNERGY

3rd PARTY

PRODUCTS

  • CONSUMER CREDIT
  • PAYMENTS
  • UTILITIES

Coherent with illimity's strategy

Accelerates illimity's growth

ambition in retail and open banking arena

Reduces execution risk of our retail and open banking strategy

Generates value via synergy and by positioning illimity at the frontier of innovation in retail banking

8

  • illimitybank.com continues to record impressive results in customer engagement

Data as of 31 October 2020

  • Funding goals over-achieved thanks to €1bn funding

with a decreasing cost of funding

(-30bps cost of funding on illimitybank.com Oct. vs Jan. 2020)

Focus on Digital

Platform enhancement and improvement to increase stickiness and customer engagement

~39k

85%

+85%

+152%

30%

51

Total Customers

at 31 October 2020

Active Customers

o/w 28% already chosen illimity as primary bank

Conveyed payrolls

October vs January

SDD(1)

October vs January

Brand Awareness

Net Promoter Score

September (vs 9 fmarket average)

Notes: (1) Sepa Direct Debit.

9

  • HYPE: by far the leading fintech challenger in Italy per number of users
    • HYPE is the first Fintech challenger in Italy per number of users
  • 1
    Fintech

challenger

Number of users - in thousands

(Italian Market - Sept 2020)

~1,300

~700

~500

<100

Challenger 1

Challenger 2

Challenger 3

Distinctive

Simple and straightforward user experience

features

Wide product offering (proprietary products and third-party offering)

Main KPIs

77%

~20%

1-2k

~4mln

users with a

Subscriber

new customers

Number of

positive

users

acquired daily

transactions

balance

per month

Source: HYPE.

10

  • HYPE: becoming one of the challengers with the most complete proposition

# of users

Challenger 1

Challenger 2

Challenger 3

Italian Market only

1.3mln

~0.7mln

~0.5mln

<0.1mln

BANKING

Payment Account

Debit Card

SEPA Transfer

International Transfer

PSD2

Account Aggregation (AISP)

Move Money (PISP)

Spending Categories

Budgets

PFM

Saving tool

Expense forecast

Saving goals / projects

Peer Comparison

  • HYPE already has a comprehensive offer, in line with main competitors…
  • …and thanks to

illimity synergy in

PSD2 and PFM services, HYPE offer

will became one of the most complete and appealing in the market

Contribution from illimity

3PP

Marketplace

11

  • Strong benefits from integration of technology and expertise

HYPE strong customer

Technology

acquisition capacity

Strengthen market positioning and enriching HYPE

1-2k customers acquired per day

product offering thanks to technology integration, coupled

with important cost benefits

illimity engagement engine

85% of active clients

28% of clients where illimity is the primary bank

Resources

Creation of a highly qualified team, thanks to the integration

of illimity and HYPE expertise

12

- HYPE key targets fuelled by Joint Venture

3 million customers

Net profit

by 2025

€3.5mln by 2023

€17mln by 2025

13

HYPE transaction 3Q20 Financial review

Francesco Mele, CFO & Head of Central Functions

14

- HYPE partnership transaction structure

illimitywill acquire 50% of HYPE's share capital

through the following corporate transactions:

DEAL STRUCTURE

10%

(Controlled by Group)

50%50%

€30mln

€45mln

HYPE cash capital increase reserved to illimity

Newly issued illimity shares for 7.5% of its share capital reserved to Fabrick at an issue price of €8.337 per share

Selected illimity technology asset contributed to HYPE

At the closing date, the Sella Group will underwrite an additional share capital increase regulated in cash equal to 2.5% of illimity's share capital, thus bringing its total shareholding in illimity to 10%. illimity issue price for the entire 10% stake set at €8.337 per share

Earnout for an additional stake in illimity linked to HYPE results in 2023 and 2024 bringing Sella total stake up to a maximum of 12.5%

15

  • HYPE will create substantial value for

illimity

Cost synergies

Revenue synergies

Pro-rata HYPE profit

Immediate lower

Placement of

€3.5mln in 2023

costs in illimity Direct

illimity's products

€17mln in 2025

Banking Division

Funding

diversification with

lower cost of funding

Positive contribution

to illimity's net results already in the first year and due to grow to:

€10mln

in 2023

€20mln

in 2025

EPS including synergy

substantially neutral

~20bps positive impact on

CET1 ratio at closing and increasing in following years

16

- 3Q20: another resilient quarter

Steady revenue progression with further growth in net interest income and resumed commissions

SME Division: resilient performance with robust new business origination in lending with public guarantees

Low level of provisions in 3Q20 reflecting strong asset quality and

new origination backed by public guarantees

DCIS Division: strong performance in gross cash flow and steady profits from closed positions

CET1 ratio increased to over 19% despite loan book growth

17

- Solid balance sheet

Data in €mln

Reclassified Balance sheet

30.09

31.12

30.03

30.06

30.09

Δ30.09.20/

30.09.20/

2019

2019

2020

2020

2020

30.06.20%

30.09.19%

1

Cash and cash equivalent

110

772

219

311

543

74%

391%

Due from banks and other financial institutions

271

345

657

643

645

0%

138%

2

Customer loans

1,255

1,638

1,662

1,766

1,831

4%

46%

- DCIS1 investments

488

667

674

724

733

1%

50%

- DCIS1 senior financing

334

341

334

337

331

(2%)

(1%)

- SME2

320

527

556

613

685

12%

114%

- Cross-over & Acq. Finance2

219

261

278

315

366

16%

67%

- High yield bond

-

-

-

13

23

80%

n.s.

- Turnaround

61

131

154

156

173

11%

184%

- Factoring

40

135

123

129

123

(5%)

207%

- Non-core former Banca Interprovinciale

113

103

99

92

83

(10%)

(27%)

Financial assets Held To Collect (HTC)

103

-

-

-

-

n.s

n.s

3

Financial assets Held To Collect & Sell (HTCS)3

92

126

335

286

137

(52%)

49%

Financial assets measured at FVTPL4

10

9

8

12

17

41%

76%

Goodwill

22

22

36

36

36

0%

67%

Intangible assets

15

19

22

26

29

13%

92%

Other assets (Incl. Tangible and tax assets)

78

95

114

158

154

(2%)

97%

Total assets

1,956

3,025

3,052

3,238

3,392

5%

73%

Due to banks

397

377

468

583

541

(7%)

36%

4

Due to customers

906

1,979

1,911

1,915

2,125

11%

135%

Shareholders' Equity

543

544

537

563

575

2%

6%

Other liabilities

110

125

135

176

151

(14%)

38%

Total liabilities

1,956

3,025

3,052

3,238

3,392

5%

73%

5

Common Equity Tier 1 Capital

466

462

439

466

478

3%

3%

6

Risk Weighted Assets

1,613

2,162

2,347

2,548

2,497

(2%)

55%

Robust liquidity profile: €700mln between

  1. cash, net adjusted interbank position and liquidity buffers owing to strong deposits gathering and Treasury portfolio divestment
    Net customer loans up 4% qoq mostly on
  2. growth in SME lending with a strong contribution from loans with public guarantees
    Securities portfolio reduced to €137mln -
  3. negative mark-to-market(M-t-M) to equity down to €1.7mln after tax
    Retail & corporate funding up 7% to €1.9bn on
  4. further growth in deposits at illimitybank.com

CET1 capital up to €478mln mainly

  1. underpinned by profit generated in the quarter and the lower M-t-M of the securities portfolio
    RWA slightly down notwithstanding growth in
  2. business thanks to early benefits of RWA optimization initiatives

Notes: Rounded figures; IT Auction consolidated for the first time in 1Q20; (1) DCIS: Distressed Credit Investment & Servicing Division (previously named NPL I&S); (2) This figure includes part of the net loans to

existing customers of Banca Interprovinciale, which due to their features are considered consistent with illimity's SME segment; (3) HTCS: Financial assets measured at fair value through comprehensive income; (4)18

FVTPL: other financial assets at fair value through profit or loss. This item includes equity financial instruments purchased as part of a Turnaround transaction, junior tranches acquired as part of senior financing transactions and investments in distressed credits in the energy sector purchased via a joint venture, as part of the DCIS division's activities.

  • Solid revenue progression drives resilient economic performance

Data in €mln

Reclassified Profit & Loss

4Q19

1Q20

2Q20

3Q20

3Q20/

9M20

2Q20 %

Interest income

27.5

32.1

33.2

37.7

13%

102.9

Interest expenses1

(9.0)

(10.2)

(8.9)

(10.0)

12%

(29.2)

1

Net interest income

18.5

21.8

24.3

27.6

14%

73.8

2

Net fees and commissions

1.5

2.5

2.1

2.9

38%

7.6

Net result from trading

8.9

3.7

(0.0)

2.1

n.s.

5.7

Net other income/expenses

1.6

0.0

0.2

0.5

n.s.

0.7

3

Gains from closed purchased distressed

9.1

9.1

7.9

11.6

46%

28.6

credit positions2

Operating income

39.7

37.2

34.5

44.7

29%

116.4

Staff costs

(9.1)

(11.3)

(13.2)

(11.5)

(13%)

(36.0)

Other operating expenses

(19.0)

(16.3)

(12.9)

(17.0)

32%

(46.2)

Depreciation & Amortisation

(1.1)

(1.8)

(2.0)

(2.3)

13%

(6.2)

4

Operating costs

(29.2)

(29.4)

(28.2)

(30.8)

9%

(88.4)

Operating profit

10.4

7.8

6.4

13.9

118%

28.0

5

Loan loss provision charges

(1.0)

(2.7)

(1.2)

(0.3)

n.s.

(4.3)

Value adjustments on purchased

(8.2)

2.8

4.6

(0.4)

n.s.

6.9

distressed credit

Value adjustments on HTC securities

0.0

(0.3)

0.2

(0.1)

n.s.

(0.1)

and loans to banks

Other net provisions

0.1

(0.5)

0.2

0.4

n.s.

-

Provisions for risks and charges

0.1

0.1

(0.1)

(0.2)

138%

(0.2)

6 Profit (loss) before tax

1.4

7.2

10.0

13.2

31%

30.4

Income tax

0.6

(2.7)

0.3

(3.7)

n.s.

(6.0)

Net result

2.1

4.5

10.3

9.5

(8%)

24.3

Growth in net interest income benefiting from the

  1. onboarding of the business originated at the end of the previous quarter and by new business growth. It includes €0.4mln credit revaluation event in Turnaround
  2. Pick up in net fees supported mainly by resumed IT Auction's activity and factoring business
    Steady stream of gains from closed distressed credit
  3. positions either sold to third parties or agreed with debtors (DPO(3))
    Operating costs increasing vs 2Q20 mainly on higher
  4. collections and onboarding costs and despite normalisation of staff costs
    Low level of provisions in 3Q20 on stable asset
  5. quality and new origination backed by public guarantees
  6. Pre-taxprofit increasing 31% qoq

Notes: Rounded figures; IT Auction consolidated for the first time in 1Q20; (1) Interest expenses restated to exclude costs related to Debt for leasing, now reclassified as administrative costs; (2) Gains from definitive

19

closure of non-performing exposures either through disposal to third parties or through discounted payoff agreed with the debtor; (3) Discounted pay off recovery strategy (the so-called "saldo e stralcio").

  • KPIs confirming strong asset quality and robust capital and liquidity

4Q19

1Q20

2Q20

3Q20

9M20

Cost-Income

73%

79%

82%

69%

76%

Organic Cost of Risk

46bps

124bps

52bps

13bps

58bps

(bps) annualised(1)

Gross Organic NPE

4.2%

4.2%

4.2%

3.8%

3.8%

ratio(2)

LCR

>1,000%

>1,000%

>1,000%

~700%

~700%

CET1 ratio

21.4%

18.7%

18.3%

19.2%

19.2%

  • Improving operating leverage with Cost-Incomeratio down to 69% in 3Q20
  • Stable asset quality and new origination mostly in loans with public guarantees driving Cost of Risk annualised to 13bps in 3Q20 - 58bps for the 9M20
  • Organic NPE ratio further down to 3.8%
  • Ample liquidity buffer
  • NSFR comfortably above minimum requirements
  • CET1 ratio increasing to 19.2%

Notes: (1) Ratio of loan loss provisions to net loans to customers end of period (€975.2mln as of 3Q20) from Factoring, Cross-over, Acquisition Finance, High-yield bond, BIP legacy book and Senior Financing - thus excluding UTP loans purchased or originated as part of the Turnaround business and the investments in Distressed Credit portfolios; (2) Ratio of gross NPE to total gross loans to customers from Factoring, Cross-over, Acquisition Finance, High-yield bond, BIP legacy book and Senior Financing to non-bank Distressed Credit investors - thus excluding UTP loans purchased or originated as part of the Turnaround and the investments in20 Distressed Credit portfolios. Any failure to reconcile the stated figures arise exclusively from rounding.

- CET1 Ratio above 19%

18.3%

CET1 ratio

19.2%

2.3

2.9

0.2

0.6

(3.4)

478.3

9.5

466.2

2Q20

3Q20

M-t-M

DTA

IFRS9

Other

Increase in

3Q20

CET1

net profit

securities

decrease

prudential

impacts

intangible

CET1

portfolio

filter

assets

3Q20/2Q20 €mln

2,548

RWA

2,497

  • CET1 Capital increasing by 3% qoq mostly on positive net profit contribution and reduction in negative M-t-M of securities
  • Decline in RWA in spite of volume growth in the quarter driven by capital optimisation initiatives - more to come in forthcoming quarters
  • Including special shares(1) and estimated benefit from the EU banking package, CET1 ratio would reach around 20.4% on a pro-formabasis

Notes: Rounded figures; (1) Subject to regulatory approval.

21

- Dynamic securities portfolio

Securities portfolio

286

137

Jun-20Sept-20

HTCS

Portfolio composition

30 September 2020

18.4%

33.0%

€137mln

48.6%

Senior corporate

Subordinated

bonds

bonds

Italian Govt. bonds

  • Dynamic treasury portfolio management to reduce exposure to market volatility, mostly through tactical
    divestment of Italian Government bonds
  • Negative M-t-M(1) at approx. €1.7mln after tax on 30 September
  • Duration 2.3 years
  • Average yield approx. 1.2%

Notes: Rounded figures; (1) Valuation reserves on financial assets (other than equity instruments) at fair value through other comprehensive income.

22

- Balanced and inexpensive funding

Maturity mix

illimity offline(1)

Raisin

illimitybank.com Wholesale

~€0.8bn

~€0.8bn

~€1bn

~€2.6bn

10%

33%

27%

15%

45%

10%

13%

75%

18%

36%

56%

33%

24%

4%

1%

Sight

Short Term

Medium-Long

Total

Term

30%

32%

38%

100%

Medium-Long Term funding maturity 3.2 years

~1.4% blended average cost of funding

€185mln TLTRO-III

Notes: Rounded figures; Non accounting figures; short term maturity includes funding with residual maturity below 18 months; (1) illimity offline channels, mostly corporate deposits.

23

SME Division

Enrico Fagioli

24

- Specialist partner of Italian SME

Cross-over and Acquisition Finance

SME with industrial potential and support to external growth strategies

Turnaround finance

Unlikely-to-pay corporate exposures with potential to return to a performing status

Factoring

Support to industrial districts value chain

  • Cross-over
  • Acquisition Financing
  • Investment in high yield corporate bonds in industries in which we are specialists
  • Refinancing
  • Restructuring
  • New finance
  • UTP portfolios
  • Short-termfinancing through factoring

25

  • Public guarantees supporting robust new business origination

Strong acceleration in business origination across all sectors with a robust pipeline

Good share of new business in loans with public guarantees, a profitable segment in great demand

Pick-up in new business origination in Turnaround and additional credit revaluation booked for the second quarter in a row

26

  • Strong and very selective business
    origination

Selective approach

446 deals analysed since

inception worth ~€4.5bn in

nominal value

292 deals declined worth

~€3.2bn

19 deals with terms

agreed and to be signed

shortly worth ~€112mln

13 deals currently under

evaluation in advanced

status worth ~€135mln

Other opportunities

identified for additional

Data in €mln

Customer loans unless otherwise stated Non accounting figures

Cross-over

& Acq. Finance

Turnaround

Factoring

A

Originated

B

C

A+B+C

business(1)

Inception to date

Terms

Advanced

BP 2018-23

agreed(2) to

Total

(10 November 2020)

pipeline(3)

Target 2020

be signed

475(4)

~83

~48

~606

~300

243(5)

~29

~87

~359

600 - 700

T/O(7) 586

~107(8)

128(6)

~79

~314

~300

~€398mln

66 deals signed since

inception

Total SME

846

~191

~242 ~1,279 ~1,200-1,300

Originated business

Notes: Non accounting figures; (1) This aggregate includes the loans originated/purchased in the period, thus already income-producing, and the deals signed but yet to be booked, due to a settlement structure in multiple tranches or to a time lag between the signing and the date of loan disbursement; (2) Deals in final stage of the formalization of the agreement/contractual terms; (3) Specific business opportunities for which

the bank envisages there is a reasonable expectation to close the transactions in the forthcoming months; (4) Including BIP core SME for about €60mln and high yield bond for €27mln; (5) It also includes financial 27 instruments, such as quasi-equity instruments, which are accounted for in the balance sheet item: "20. c) Other financial assets mandatorily at fair value" for accounting purposes; (6) Gross Book Value at 31 October 2020; (7) Turnover related to Factoring only for the year 2020; (8) Credit line to be granted.

  • Cross-over& Acq. Finance: robust origination continued into 3Q20

A

Originated business

B

C

A+B+C

Target

Terms agreed to

Advanced

Total

2020

be signed

pipeline

Data in €mln

Total 475

~83

~48

~606

~300

BIP Core 60

415

27 34

381

More than half of business origination

in 3Q20 is in lending with public support

measures

Confirmed selective approach to pipeline in a dynamic market

Booked(1) Signed but not booked(2)

Notes: Rounded figures; (1) Income-producing loans; (2) Deals signed but not yet booked, due to a time lag between the signing of the master agreement and the date of loan disbursement.

28

  • Turnaround: taking opportunities from public measures

A

B

C

A+B+C

Target

Originated business

Terms agreed to

Advanced

Total

2020

be signed

pipeline

Data in €mln

Total

243

~29

~87

~359

600 - 700

17 23

220

Pick-up in business origination in deals with the support of public measures

Over €20mln potential revenue upside(3) from credit revaluation events

- additional €0.4mln booked in 3Q

Booked(1) Signed but not booked(2)

Notes: Rounded figures; (1) Income-producing gross loans origination, including new finance, acquired credit and related instruments. It includes financial instruments, such as quasi-equity instruments, which are

accounted for in the balance sheet item: "20. c) Other financial assets mandatorily at fair value" for accounting purposes; (2) deals signed but not yet booked, due to a time lag between the signing of the master 29 agreement and the date of loan disbursement; (3) Additional potential revenue related to revaluation of equity, quasi-equity instruments and credit revaluation.

- Factoring: back to pre-Covid level

A

Originated business

B

C

A+B+C

Target

Terms agreed to

Advanced

Total

2020

be signed

pipeline

Data in €mln

Total 128

~79

~107

~314

~300

Outstanding(1)

26

135

135

123

129

124

128

Turnover(2)

240

66

586

241

298

161

119

57

1H19 (3)

2H19

FY19

1Q20

2Q20

3Q20

Oct-20

Year to

date

Strong pick up in factoring in 3Q20

with turnover monthly average back to pre-Covid level

Outstanding nearly ready for SRT(4) initiatives which will free-upcapital

Signed agreement for €73mln credit

lines, to produce revenue from 4Q20

Notes: Rounded figures; Non accounting figures; (1) Outstanding: in a factoring transaction, the outstanding amount is the amount of receivables transferred and not yet collected at a certain date; (2) Turnover: in a

30

factoring transaction, the total amount of receivables transferred over a defined period of time; (3) Start-up phase; (4) Significant Risk Transfer, a capital management initiative that reduces capital absorption.

- Effective use of public measures

REGULATORY FRAMEWORK

'Cura Italia'

l. 27/2020

'Liquidità'

l. 40/2020

~€70-100mln~€240-270mln

~€79mln

PUBLIC~€89mln

GUARANTEES(1)

  • Fondo Centrale Garanzia
  • SACE

Requests for moratorium unchanged at ~€86mln

4%

MORATORIUM

o/w 35% with an already

44%

52%

defined refinancing operation

with public guarantee

Art. 56 DL 18/2020

ABI Moratorium

Ex lege (corporates)

Bilateral agreements Other

Bilateral agreements

Notes: As of today; (1) Refers to Cross-over and Turnaround.

31

Distressed Credit I&S Division

Andrea Clamer

32

  • Building the Italian Corporate Distressed
    Credit champion

Investment

Senior Financing

Servicing

Acquisition of secured and unsecured Corporate Distressed

Credit

Financing solutions for Distressed Credit non-bank investors

Workout services and remarketing for captive and 3rd parties' corporate Distressed Credit

Investment

Servicing

Remarketing

Origination

Due

Pricing

Bidding

Onboarding

Workout &

Remarketing of

Diligence

Recovery

Distressed Credit collaterals

33

  • Strong performance and dynamic portfolio management continued in 3Q20

Gross cash flow in 3Q: robust and ahead of initial plans

Additional €11.6mln profit from our dynamic approach to portfolio management

and workout strategy led by out-of-courtsettlement

Landmark transaction in UTP portfolios confirms the strength of illimity's

business model based on integrated competencies of DCIS, SME and neprix

Distressed credit market remains dynamic and with diminishing competition -

strong pipeline ahead

34

- Building the Italian Servicing Champion

From January 2021xxxxxxxxx will be fully merged in xxxxxxxxx creating the first fully integrated servicer

Enhances neprix's market positioning by

broadening its range of services

Data as of October 2020

9.4bn

~220

Cross-fertilization of competencies across

the entire credit management value chain

GBV AUM

Total FTE

>700k

~22mln

Full integration will maximise costs and

revenue synergy

Registered users

Yearly online portals

35

online portals

webpage views

  • Outperformance of cash flow continued

into 3Q20

Cash Flow view(1)

3Q20 Economic view

Data in €mln

Data in €mln

Cumulativecash flow: actual vs. planned

Interest

Fee income Adjustments(3)

Gross

income(2)

Revenues(4)

176.9

99.4

Actual

Planned

Actual

Expected

Delta

Cash Flow

Cash Flow

Cash Flow

Q3 20

38.0

20.6

+17.4

Cumulative 176.9 99.4 +77.4

Investment

Senior

Financing

Total

Interest(2)

Q3

Adjustments

Q3

10.7

Adjustments 9M 34.8

24.1

-

10.7

34.8

3.8

0.5

-

4.3

27.9

0.5

10.7

39.1

NBV

Gross IRR

Period from

onboarding

Delta

ERC(5)

Cash Flow

Update

+17.4

-6.7

Delta

ERC(5)

Cash Flow

Update

+56.7-21.9

Notes: Rounded figures; (1) Cash flow from receivables; (2) Measured based on amortized cost; (3) Outcome of the Distressed Credit business plan periodic review; it includes €11.6mln reclassified in operating income 36 (gains from closed purchased distressed credit positions) and -€0.9mln accounted for in value adjustments on purchased distressed credit; (4) Revenues before any cost of funding; (5) Estimated Remaining Collection.

- Landmark transaction in UTP portfolios

SME Division: Turnaround

Restructuring competencies

DCI Division

Distressed credit workout competencies

Management of granular positions,

both going and gone concern

€600mln transaction in UTP

portfolio via competitive bid

illimity features a unique business model that combines cross-

divisional competencies

illimity positions as a leading player in this attractive market segment

37

- A disciplined business origination

Strong discipline drives selective approach

~€54bn of GBV

analysed since

inception

~€42bn of GBV

declined/lost since

inception

~€8bn of GBV signed

Data in €mln

Customer loans unless otherwise stated Non accounting figures

Distressed Credit

Investment

Senior

Financing

A

Originated

B

C

A+B+C

business(1)

Inception to date

Terms

Advanced

BP 2018-23

agreed(2) to

Total

(10 November 2020)

pipeline(3)

Target 2020

be signed

1,154(4)

~10

~185

~1,349 1,700-2,000

441

-

~47

~488

100-200

since inception

~€4bn of GBV

currently under

evaluation

Total Originated

1,595

~10

~232

~1,837

1,800-2,200

Business

Servicing(5)

~9,400

~60

~1,800

~11,300

5,100-6,300

AUM (GBV/Managed assets)

Notes: Non accounting figures; (1) This aggregate includes Distressed Credit investments booked, Senior Financing loans granted in the period, and deals signed but yet to be booked, owing to a settlement structure in multiple tranches or to a time lag between the signing of the master agreement and the date of loan disbursement/onboarding. It includes also the portfolio sold; (2) Deals in final stage of the formalisation of the agreement/contractual terms; (3) Specific business opportunities for which the bank envisages there is a reasonable expectation to close the transactions in the forthcoming months; (4) It also includes financial instruments, such as quasi-equity instruments which are accounted for in the balance sheet item "20. c) Other financial assets mandatorily at fair value" for accounting purposes corresponding to the investments in 38 energy distressed credit; (5) The AUM of the servicing unit includes the gross book value of distressed credit and the value of property and capital goods managed by IT Auction, net of cash flows and portfolio disposals.

  • Entering the most dynamic season of

the year

Originated business

Data in €mln

Distressed

Credit

Investment

Senior Financing

Total 1,154

158

996

(1)

Total 441

13 27

441

(1)

Booked(2) Signed but not booked(3)

Business origination affected by seasonality

and small delay of some closing after the end of the quarter

Senior financing focused on

high yield investments

Notes: Rounded figures; (1) Including September 2018; (2) Distressed credit investments booked, and senior financing loans granted in the period; (3) Deals signed but not yet booked, owing to a settlement

39

structure in multiple tranches or to a time lag between the signing of the master agreement and the date of loan disbursement/purchase.

- High quality portfolio in line with targets

Data as of 30 September 2020

NBV breakdown by type of guarantee

Secured

KPIs

~€737 Carrying

Type of borrower

Retail

8%

(GBV breakdown)

92%

Corporate

59%

~€737

mln

41%

Unsecured

mln value(1)

1.4x

Cash on Cash multiple

~€998

ERC(1) (2)

mln

Vintage(3)

(GBV breakdown)

Actual workout strategy

(Cash flow breakdown(4))

Pre-2010

13%

50% 2015-2019

37%

2010-2014

Out-of-court

75% settlement

24%

Judicial 1%

Other(5)

Notes: Rounded figures; (1) This includes distressed credits purchased by the Energy desk, which for accounting purposes are recognised at Fair Value (item 120 c); (2) Estimated Remaining Collections on booked

40

investments; (3) Only considering bad loans; (4) It does not include assets repossession (through ReoCo and datio in solutum); (5) Mainly refers to positions for which data remediation is ongoing.

Concluding remarks

Corrado Passera, CEO

41

Silvia Benzi

Head of Investor Relations & Strategic Planning

Mobile: +39 349 7846537 - +44 7741 464948

Email: silvia.benzi@illimity.com

42

Disclaimer (1/2)

This document (the "Document") has been prepared by and is the sole responsibility of illimity Bank S.p.A. (the "Company") solely for information purposes. In accessing the Document you agree to be bound by the following terms and conditions. A limited number of copies have been made or may be made and these are strictly reserved for the person to whom they are or will be addressed: for this reason the information contained in the Document is confidential and must not be used, in whole or in part, or disclosed to third parties or copied, distributed, transmitted or reproduced.

The Document is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Document is not for publication, release or distribution in the United States, Australia, Canada or Japan or in any jurisdiction where it is unlawful to do so. The release or distribution of the Document or access to this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions (when applicable) may constitute a violation of the laws of any such other jurisdiction.

The information and data contained in the Document are not intended and do not constitute in any way investment advice or a solicitation to purchase securities, nor is it an offer or invitation or promotional message for the purchase, sale or underwriting by any person in any jurisdiction or country where such activity is contrary to law or regulation, except where there are exemptions that apply under related law.

The terms, data and information contained in the Document are subject to revision and update; the Company and its consultants assume no responsibility to communicate, in advance or subsequently, should such revisions and updates become necessary or opportune nor for any damages that may result from improper use of the information (including communications of revisions and updates) included in the Document. Within the limits of law, the Company, its corporate executives, managers, employees, and consultants make no statement, give no guarantee or assume any responsibility, express or implied, regarding the accuracy, the adequacy, completeness and up to date nature of the information contained in the Document nor regarding any eventual errors, omissions, inaccuracies or oversights contained herein. The Document does not attempt to describe all terms and conditions that will pertain to the proposed transaction nor does it set forth the specific phrasing to be used in the documentation.

The securities referred to herein (the "Securities") have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States or any other jurisdiction and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This Document does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase the Securities, and nothing contained therein shall form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto whatsoever, nor does it constitute a prospectus relating to the Securities or a recommendation by the Company or any of the Company's advisers and/or agents regarding the Securities.

It is recommended that any eventual investment decision regarding an investment be based on the formal documents prepared by the Company as part of the transaction which may contain information different from those included in the Document and on audit from the investors own independent, professional financial and tax advisers.

No representation, warranty or undertaking, express or implied, is made or given by the Company or any of its affiliates, parent or subsidiary undertakings, directors, officers, advisers, agents or employees or any other person as to, and no reliance should be placed on, the fairness, adequacy, accuracy, truthfulness, reasonableness, completeness or correctness of the Document or the opinions contained therein. The Document has not been independently verified and will not be updated. No responsibility or liability whatsoever (whether arising in tort, contract or otherwise) is accepted by the Company or any of its affiliates, parent or subsidiary undertakings, directors, officers advisers, agents or employees, or any other person for any loss howsoever arising, directly or indirectly, from any use of the Document or opinions contained therein or otherwise arising in connection therewith. The Document, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Document, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Document that may result from any change in the Company's expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document. Market data used in the Document not attributed to a specific source are estimates of the Company and have not been independently verified.

Any expected return is not guaranteed and is based on data shown in Euro. The Document contains "forward-looking" and targets information which are based upon certain assumptions about future and/or ongoing events or conditions and may also be based on Company's expectations on ongoing and/or potential new initiatives and is exclusively intended to illustrate hypothetical target results under those assumptions (not all of which are specified herein). Such forward looking statements include all matters that are not historical facts. Forward-looking statements give the Company's intentions, beliefs or current expectations concerning, amongst other things, the Company's financial condition, liquidity, prospects, growth, potential deals, strategies and the industry in which it operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur, in whole or in part, in the future. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "outcome," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "insight," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements take into account the Company's current expectations on the possible achievement of already disclosed or new targets or estimates, which are in no way guaranteed and may be reviewed in light of up to date market and business conditions. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it operates and will operate in the future.

Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary, and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. Any data on past performance, modeling, scenario analysis or back-testing contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modeling, scenario analysis or back-

testing; for investors resident in EC countries that are not part of the Eurozone these returns can increase or decrease due to exchange rate movements.

43

Disclaimer (2/2)

  • The tax consequences of an investment depend on the individual circumstances of each investor and may be subject to change in the future; therefore, the present document may not be considered to have been prepared in order to offer an opinion, legal advice or tax opinion regarding the possible tax consequences of the transaction. Every prospective investor is advised to evaluate any potential investment in the transaction on the basis of independent accounting, fiscal ad legal advice and should also obtain from their own financial advisors analyses of the adequacy of the transaction, the risks, the protection and the cash flows associated with the transaction, insofar as such analyses are appropriate for ascertaining the risks and merits of the transaction.
  • Prospective investors must rely on their own evaluation that a potential investment in the transaction described herein does not contravene the laws and regulations of the country of residence of the investor and must also be responsible for obtaining any necessary prior authorization required to make the investment.
  • Certain industry and market data contained in this Document has come from third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, neither the Company nor its respective affiliates has independently verified the data contained therein. In addition, certain of the industry and market data contained in this document comes from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, no reliance should be placed on any of the industry or market data contained in the information. By receiving this document and attending the presentation, you are certifying that (a) if you are in the European Economic Area, you are a "Qualified Investor"; (b) if you are in the United Kingdom, you are a "Relevant Person"; (c) you are not located in a jurisdiction where it is unlawful to do so and (d) you acknowledge and agree to the limitations and conditions set forth herein.
  • Acceptance of delivery of the Document by the recipient constitutes acceptance of the terms and conditions set out in this Disclaimer.
  • Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the ordinary shares and other instruments of illimity Bank S.p.A. (the "Securities") have been subject to a product approval process, which has determined that such Securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").
  • Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Securities may decline and investors could lose all or part of their investment; the Securities offer no guaranteed income and no capital protection and an investment in the Securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Manufacturers will only procure investors who meet the criteria of professional clients and eligible counterparties.
  • For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Securities.
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  • This document includes industry and market data pertaining to Company's business and markets. Such information is based on the Company's analysis of multiple sources such as industry publications and surveys, industry reports prepared by consultants, internal surveys and customer feedback. The market, economic and industry data have primarily been derived and extrapolated from reports provided by third parties. In addition, certain statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to Company's business and markets in this document are not based on published data obtained from independent third parties or extrapolations therefrom, but rather are based upon analysis, which are in turn based upon multiple third party sources.
  • All figures and numbers included in this document are rounded.
  • Pursuant to Article 154-bis, paragraph 2, of the Legislative Decree no. 58/1998 (Unified Financial Act), the Financial Reporting Officer, Mr. Sergio Fagioli, declares that the accounting information contained in this Document corresponds to the document results, books and accounting records.

44

Disclaimer

illimity Bank S.p.A. published this content on 11 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2020 10:02:01 UTC


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Financials
Sales 2020 162 M 197 M 197 M
Net income 2020 30,6 M 37,1 M 37,1 M
Net Debt 2020 - - -
P/E ratio 2020 21,7x
Yield 2020 -
Capitalization 654 M 796 M 794 M
Capi. / Sales 2020 4,03x
Capi. / Sales 2021 2,66x
Nbr of Employees 546
Free-Float 76,0%
Chart ILLIMITY BANK S.P.A.
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Technical analysis trends ILLIMITY BANK S.P.A.
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 2
Average target price 10,45 €
Last Close Price 8,91 €
Spread / Highest target 17,8%
Spread / Average Target 17,3%
Spread / Lowest Target 16,7%
EPS Revisions
Managers and Directors
NameTitle
Corrado Passera Chief Executive Officer & Director
Rosalba Casiraghi Chairman
Francesco Renato Mele Chief Financial Officer
Massimo Brambilla Director
Maurizia Squinzi Independent Director
Sector and Competitors