illimity Bank S p A : – 2Q22&1H22 Results – Net profit of 31.5 million euro for in the first half 2022 (+15% yoy), with strong asset quality and capital base
08/05/2022 | 12:51am EDT
SOUND RESULTS FOR ILLIMITY ALSO IN THE SECOND QUARTER OF 2022
NET PROFIT OF 15.8 MILLION EURO (+6% Y/Y), BRINGING THE NET RESULT FOR
THE FIRST HALF YEAR TO 31.5 MILLION EURO (+15% VS 1H21)
EARNINGS DRIVEN BY GROWTH IN REVENUE, WHICH ROSE TO 80.6 MILLION EURO IN 2Q22 (+13% Y/Y), ILLIMITY'S BEST QUARTERLY FIGURE, AND TO 159 MILLION
EURO IN 1H22 (+25% Y/Y)
NET CUSTOMER LOANS AT 3.2 BILLION EURO (+37% Y/Y)
EXCELLENT ASSET QUALITY AND CAPITAL BASE:
ORGANIC NPE RATIO1 OF 0.9% AND CET1 RATIO OF OVER 17%2
PURCHASE OF AREC FINALISED AT THE END OF THE QUARTER,
POSITIONING NEPRIX AS THE THIRD OPERATOR SPECIALISING IN THE MANAGEMENT
OF CORPORATE UTP LOANS3
POSITIVE EARNINGS PROSPECTS THANKS TO A VIGOROUS BUSINESS PIPELINE
FOR THE COMING MONTHS
SILVIA BENZI INDICATED AS NEW ILLIMITY'S CFO FOLLOWING THE RESIGNATION
OF FRANCESCO MELE
Milan, 5 August 2022 - Chaired by Rosalba Casiraghi, the Board of Directors of illimity Bank S.p.A. ("illimity" or the "Bank") approved yesterday the illimity Group's results at 30 June 2022.
illimity continued on its growth path driven by a further expansion in business volumes, posting a net profit of 15.8 million euro in the second quarter of 2022 (+6% y/y), to reach a total of 31.5 million euro in the first half of 2022, representing an increase of 15% over the first half of 2021 (27.4 million euro).
More specifically, the quarter was characterised by:
the best second quarter in terms of new business volumes, with around 394 million euro of originated business between loans and investments, a rise of 51% over the figure for the second quarter of the previous year. The Bank's business Divisions all displayed great vivacity and can count on a particularly significant pipeline for the next few months. Taken overall, net customer loans rose to almost 3.2 billion euro at 30 June 2022, an increase of 37%
Related to the business originated by illimity, excluding the loan portfolio of the former Banca Interprovinciale.
A pro-formaphased-in CET1 ratio to take account of the amendment to article 127 of Regulation (EU) No.575/2013 (the "CRR") on the weighting of unsecured NPEs effective from the beginning of July 2022 with an estimated impact of ca. 271 million euro on the basis of the balance at 30 June 2022.
Source: "The Italian NPE Market - Wind of Change" issued in July 2022, data referred at 31 December 2021.
over the same period of the previous year and 13% over March 2022;
steady growth in revenue to reach 80.6 million euro (+3% q/q, +13% y/y) in the second quarter of 2022, taking total revenue for the first half of 2022 to 159.0 million euro (+25% y/y), while keeping a good balance between net interest income and other revenue components. The Distressed Credit Division continued to be the leading contributor, generating 68% of total revenues for the half year, while the Growth Credit Division posted significant growth, with revenues almost double those of the first half of 2021, taking its contribution to consolidated revenues to ca. 20%, to which should be added the Investment Banking Division contributing a further 5%. Taken as a whole, the revenue generated by illimity with SME customers in the Growth Credit and Investment Banking Divisions together reached 39.5 million euro in the first half of 2022, nearly double the corresponding figure for the previous year;
a Cost income ratio standing at 60% in the second quarter of 2022, a rise of three percentage points over the previous quarter as a result of the investments made in new initiatives - including b-ilty and Quimmo - whose contribution in terms of revenue will only be seen over the coming months. The Cost income ratio stood at 59% in the first half of 2022, a decrease of approximately one percentage point over the same period of the previous year;
as a result of the above dynamics,operating profit reached 32.1 million euro in the second quarter of 2022, a rise on an annual basis (+4% over the figure of 30.7 million euro posted in the second quarter of 2021). Operating profit accordingly amounted to ca. 65.6 million euro in the first half of 2022, representing an increase of ca. 31% over the first half of 2021;
apre-taxprofit of 24.0 million euro for the second quarter of 2022, representing an increase of 7% on an annual basis and substantially in line with the figure of 24.1 million euro posted in the previous quarter; pre-taxprofit for the half year therefore amounted to 48.1 million euro, a rise of ca. 16% over the first half of the previous year;
excellent organic credit quality: on 30 June 2022 the ratio between gross doubtful organic loans and total gross organic loans originated since the start of illimity's operations remained contained at 0.9%, a figure becoming 2.2% if the loan portfolio of the former Banca Interprovinciale, which is gradually running off, is included. The annualised organic cost of risk4 for the quarter stood at 49 bps;
a robust capital base with ratios positioned at top levels of the system - a phased-in CET1 ratio of 16.1% (17.7% pro-forma taking into account the amendment to article 127 of the CRR which had effect from 11 July 2022 and the inclusion of the special shares which will be automatically converted to ordinary shares in the current quarter), a phased-in Total Capital Ratio of 21.3% (23.3% pro-forma taking into account the amendment to article 127 of the CRR and including the special shares) - and a solid liquidity position (of approximately 600 million euro), available for reinvestment in future business opportunities.
In line with the execution of 2021-25 Strategic Plan, work continued in the second quarter of
4 Calculated as the ratio between loan loss provisions and net organic loans to customers at 30 June 2022 (2,031 million euro) for the Factoring, Cross-over, Acquisition Finance, Turnaround and b-ilty segments and loans purchased as part of investments in distressed credit portfolios that have undergone a passage of accounting status subsequent to acquisition or disbursement (excluding loans purchased as bad loans), the loan portfolio of the former Banca Interprovinciale and Senior Financing to non-financial investors in distressed loans.
2022 on implementing initiatives with high technological features developed in markets synergic with or complementary to the Bank's core business. Once these activities have become fully operational and reached significant size, they will act as an important driver for the creation of shareholder value.
illimitybank.com, the retail banking platform, the first in Italy to provide Open Banking functionalities, reached around 1.5 billion euro deposits at the end of June 2022 from a loyal customer base, as confirmed by its Net Promoter Score5, one of the highest in the system;
b-ilty,the first digital business store for credit and financial services developed by illimity for Small Corporates, which is completing its test phase ("beta phase") and building up its commercial network;
HYPE, the leading fintech challenger in Italy by number of users which consolidated its leadership in the second quarter of 2022, reaching over 1.6 million customers and constantly enhancing its product offer;
Quimmo, the innovative proptech, an evolution of neprix Sales and already a remarketing leader on the judicial real estate market, has entered the open real estate market with a new platform and a new brand and sold 689 properties in the second quarter of 2022, taking the number of properties sold since the beginning of the year to over 1,250.
In addition, on 30 June illimity completed the acquisition of Aurora Recovery Capital S.p.A. ("Arec"), a company specialised in the management of Unlikely to Pay ("UTP") loans with a focus on the large-ticket corporate real estate segment, which will be merged into neprix - the illimity Group's servicing platform. This operation strengthens the market positioning of neprix, taking its managed loans to around 10.3 billion euro6, and will provide a valuable contribution to the generation of third party servicing mandates, increasingly establishing its position as a market servicer and, in particular, as the third operator specialising in the management of UTP corporate real estate loans. On 30 June 2022, all the conditions for completing the acquisition had been met and the business combination became effective as of that date. As a result, the business combination was recognised in illimity's consolidated balance sheet on 30 June 2022, while the economic results will be visible starting from the current quarter.
Lastly, as confirmation of its considerable commitment in the sustainability field, illimity has recently received an especially important uplift in its ESG ratings:
MSCI, one of the world's leading index and benchmark providers, increased its rating from "B" to "A", also as recognition of illimity's leadership in corporate governance matters;
Standard Ethics, one of the leading independent rating agencies on sustainability issues, lifted its rating from "E" to "EE-", thanks, in particular, to illimity's alignment with the United Nations,
OECD and European Union guidance, as well as to its integrated sustainability management model.
Corrado Passera,CEOandFounderofillimity, commented: "We are very satisfied with the sound results posted in the second quarter of the year, the best in terms of business generation. The robust pipeline for the next few months confirms the dynamism of all the Divisions, which are ready
Net Promoter Score ("NPS") of illimitybank.com equal to 43 in second quarter 2022 (with market average equal to 1).
Considering also deals signed on 4 August 2022, whose execution is subject to the positive conclusion of the authorisation process with the Supervisory Authority.
to grasp the opportunities arising from the constant expansion of the markets in which we operate.
The two highly technological initiatives launched over the past few months - b-ilty, the complete digital platform for credit and financial services for SMEs, and Quimmo, the innovative proptech - are proceeding as planned. If together with these new initiatives with a "tech" soul, we also consider illimitybank.com, which provides customers with top quality direct banking retail services, and HYPE, which continues to consolidate its leadership in the Italian fintech market, we can say that illimity is making significant additional strides in its ability to create technological platforms, which will be the driver of further growth and value creation for all our stakeholders.
At the same time, the acquisition of Arec is an important step in reinforcing our positioning in UTP loan management with particular focus on the large-ticket corporate real estate segment and puts us in the right position for grasping the important business opportunities arising on this market in the future.
Lastly, I am especially pleased with the new ESG ratings assigned to us by MSCI and Standard Ethics, which confirm the value of the decisions we have taken on sustainability issues from the start of the Bank's activities and represent a stimulus to do even better.
Finally, I want to thank Francesco Mele for the passionate work he has done over the years. He was among the first to join us and played a fundamental role in the construction and development of illimity. We are sorry to lose him in the team that will bring illimity to new goals in the coming years, but we are pleased to know that he is engaged in an important task. Silvia Benzi represents the best choice in the spirit of continuity and once again demonstrates the capital of skills, experience and passion that illimity has been able to accumulate over the years "
Key balance sheet figures
Figures in millions of euro
Reclassified Balance sheet
Cash and cash equivalent
Due from banks and other financial institutions
- Distressed Credit
- Distressed Credit
- Growth Credit
- Cross-over & Acq. Finance
- Investment banking
- Non-core former Banca Interprovinciale
Financial assets Held To Collect (HTC)
Financial Assets Held To Collect & Sell (HTCS)
Financial assets measured at FVTPL
Investments in associates and companies
subject to joint control
Other assets (incl. Tangible and tax assets)
Due to banks
Due to constumers
Common Equity Tier 1 Capital
Risk Weighted Assets
Distressed Credit Division, formerly the DCIS Division.
Growth Credit Division, formerly the SME Division.
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 Growth Credit Division. It also includes the corporate high-yield bonds classified as HTC.
This includes the Bank's securities portfolio classified at amortised cost
HTCS: financial assets measured at fair value through comprehensive income. This item includes also 4.5 million euro of investments in Alternative Debt carried out by Investment Banking Division and classified in HTCS strategy.
FVTPL: other financial assets at fair value through profit or loss. This item includes equity financial instruments purchased as part of Turnaround transactions, junior tranches of securitised non-performing loans acquired as part of Senior Financing Transactions and investments in distressed energy credit purchased as part of the DC Division's activities.
This includes assets of ca. 84 million euro deriving from the purchase of tax credits (the "Ecobonus" scheme) and senior notes of
ca. 38 million euro resulting from the securitisation of a portfolio of non-performing loans classified as assets held for sale. Any failure of the above figures to reconcile arises exclusively from rounding.
On 30 June 2022, the Bank's total assets stood at 5.1 billion euro, an increase of 4% over the
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illimity Bank S.p.A. published this content on 05 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2022 04:50:05 UTC.