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Banca IFIS: margins and customers up for the 9 months. Rising profits and strong cash flow generation in the NPL segment

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Highlights– Results for the first nine months of 20181
RECLASSIFIED DATA2 First nine months 1 January-30 September

o Net banking income: 403,6 million Euro (+7,5%);
o Net profit from financial activities: 334,6 million Euro (-13,4%);
o Operating costs: 208,9 million Euro (+15,6%);
o Group net profit for the period: 89,0 million Euro (-40,3%);
o Credit risk cost of the Enterprises segment: 160 bps;
o Enterprises segment’s net-bad loan ratio: 1,3% (+0,1%);
o Enterprises segment’s Gross NPE Ratio: 10,7% (9,9% at 1 January 2018);
o Enterprises segment’s Net NPE Ratio: 6,4% (6,2% at 1 January 2018)
o Total Group employees: 1.622 people (1.470 at 31 December 2017);
o Common Equity Tier 1 Capital (CET1): 14,63% (15,64% at 31 December 2017);
o Total Own Funds: 19,60% (21,07% at 31 December 2017);3
o CET1 including the effect of the prudential consolidation in La Scogliera: 10,67% (11,66% at 31 December 2017);
o Total own funds including the effect of the prudential consolidation in La Scogliera: 14,74% (16,15% at 31 December 2017).

Highlights – 3rd Quarter 2018 Results
RECLASSIFIED DATA third quarter 1 July – 30 September

• Net banking income: 125,4 million Euro (+2,7%);
• Net profit from financial activities: 96,6 million Euro (-20,2%);
• Operating costs: 64,7 million Euro (+5,6%);
• Group net profit for the period: 22,8 million Euro (-49,8%);

Mestre (Venice), 8 November 2018 – The Board of Directors of Banca IFIS met today under the chairmanship of Sebastien Egon Fürstenberg and approved the financial results for the first nine months of 2018.

«Over the past nine months, Banca IFIS has continued growing and supporting Italy’s economy, even against a gradually deteriorating macroeconomic backdrop» says Giovanni Bossi, Banca IFIS CEO. «We present ourselves to investors with a robust financial position and performance. The Bank has one of the smallest holdings of Italian government bonds among financial institutions in Italy, totalling approximately 29% as a proportion of equity. In addition, it can rely on liquidity in excess of its needs, resulting in a liquidity coverage ratio (LCR) of over 2.000%, compared to a minimum regulatory requirement of 100%. We are able to offer products designed for and tailored to struggling small businesses and households, demonstrating a continuing ability to innovate and promptly meet needs as they arise. The lack of strategic legacy burdens and the positioning in markets largely overlooked by the conventional business models of other lenders help strengthen our role in Italy».

«The Bank has been very active in each segment, growing the individual businesses and supporting companies. Special emphasis was placed on supporting the working capital of SMEs, expanding volumes as well as the number of customers served.

As for the NPL area, as expected the Italian market is undergoing structural changes that Banca IFIS duly takes into consideration. The pressure on portfolio prices seen in early 2018 is abating, giving rise to a more interesting competitive landscape characterised by falling prices. This is why we resumed buying portfolios in the third quarter, with prices hovering around 5% for unsecured receivables with a gross book value of approximately 1,8 billion Euro. We remain firmly focused on making delinquent borrowers reperforming; the steady increase in profits as well as overall and expected cash flows as a result of these conversions is evidence of our success in this area. The determination to consciously play an increasingly crucial role in supporting Italy’s economy, in the interest of both market participants and the Bank’s growth, continues to guide our day-to-day operations».

Read the complete press release.
Read the 3Q 2018 Presentation.

Consolidated Interim Report at 30 Septmeber 2018