01_Editorial: Sustainable Recovery by Andrea Clamer 02_Direct link to results. Bloomberg: bonds under the lens 03_Banca IFIS registers positive 1st quarter results 04_Market. Banca IFIS stocks flying high on the Stock Exchange 05_30th Anniversary. Happy Birthday Banca IFIS: join the celebrations on Facebook! 06_MondoPMI: supporting Small and Medium Enterprises for over a year 07_IFIS Finance: Banca IFIS supporting the growth of Polish enterprises 08_Recruitment: positions available 09_Events Calendar 10_Contacts follow us on: 02 2013 Newsletter 6 31 June 2013_Quarterly newsletter
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01_Editorial: Sustainable Recovery
by Andrea Clamer
02_Direct link to results. Bloomberg:
bonds under the lens
03_Banca IFIS registers positive
1st quarter results
04_Market. Banca IFIS stocks
flying high on the Stock Exchange
05_30th Anniversary. Happy Birthday Banca
IFIS: join the celebrations on Facebook!
06_MondoPMI: supporting Small and
Medium Enterprises for over a year
07_IFIS Finance: Banca IFIS supporting
the growth of Polish enterprises
08_Recruitment:
positions available
09_Events Calendar
10_Contacts
follow us on:
02 2
013Newsletter 6 31 June 2013_Quarterly newsletter
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01 Editorial: Sustainable Recoveryby Andrea Clamer
Andrea Clamer,
Head of Banca IFIS’s
NPL Division.
«With 130 billion distressed loans the theme of
sustainable recovery has become a key issue to ensure
the system as a whole correctly manages the financially
“weak” part of the country. It is no longer simply an
economic issue, linked to the return on investment
(where investment can be considered as the choice of
delivering a certain credit or to buy that same credit), but
also a social and development issue: either we are able
to give those millions of people a real second chance,
or the entire system is likely to disintegrate, leading to
negative consequences also for the performing part of
the banking world, with obvious consequences in terms
of the cost of credit (raising interest rates) and of supply
logic (contraction). Behind the slogan of “sustainable
recovery” what really gets portrayed? How does this
world impact and pervade our efficiency as professionals
of “non-performing” credit that has, in its DNA, the
purchase of unsecured portfolios and their management
in order to achieve - from the difference between the
purchase price and the amount recovered - that result
called economic return?
The answer, very briefly, I think is “segmentation”,
accomplished through careful analysis of the data. This
segmentation involves dividing our pool of debtors, which
now has almost 500,000 subjects, into four categories.
The first category: people who are willing and able to
pay; the second consists of those who do not want to
and cannot pay; the third made up of people who want
to but cannot pay; finally, those who are able but not
willing to pay.
It is clear that adopting a fair and sustainable approach
also means creating, for those who are “able but not
willing”, a management structure that will not accept
the “unwillingness” of having to deal with their debts
and forcing this category of debtor to pay what they owe
through focused, economic, legal action. This is mainly
out of respect for those debtors who, although they
cannot, wish to pay their debts, those who decide to give
up something in their lives and repay because, for these
individuals, repaying a debt is a matter of honor.
These initial considerations bring more food for thought:
how can the banking system achieve these aims? How
can the different market players create appropriate
economies of scale that enable them to implement
processes and controls in line with the “principles” set
out above? How and how much do they have to invest
in order to obtain useful information to segment the
portfolio as described above?
Most likely a single operator, even the largest on
the market, does not possess adequate background
information on non-performing debtors to allow them
to model appropriate portfolio segmentation. There is,
therefore, a strong need to create a pool of debtors and
therefore, of information, that could bring potential
economies of scale: we need a “big data repository” or
a player who decides to play that role, specializing in
this type of market to create the specific economies of
scale, non-reproducible with a low number of debtors
in the portfolio. This player would ensure, through its
operational efficiency, a fair degree of segmentation
of practices and therefore sustainability. It would also
achieve, through its own economies of scale, greater
efficiency in its recovery action, efficiency that could be
partly redistributed to other markets, less focused on
credit management in litigation.
Finally, referring to the distressed loans sales market,
one method of wealth redistribution might be to increase
the acquisition price of portfolios put on sale».
03
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02 Direct link to resultsBloomberg: bonds under the lens
Giovanni Bossi,
C.E.O. of Banca IFIS.
In an interview with Sonia Sirletti of Bloomberg realized
on June 21st Giovanni Bossi, CEO of Banca IFIS,
commented on the trends of the Bank and its future
outlook, expecting an annual earnings growth over the
next three years thanks to the reduction of funding costs
and increased margins in the sector of distressed loans.
“We raised our targets on ROE and see our net income
growing in each year of the three-year business plan
ending in 2015” Bossi said. “We will cut the cost of
funding by 1 percent next year and 0.5 percent in
2015, to offset lower income from our government
bond portfolio.”
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In summary, figures for the period January 1 - March 31:
• Net banking income increased by 27,5% to 66,9 million Euros
• Net profit from financial activities increased by 14% to 53,1 million Euros
• Cost/income ratio further improving, down to 26,5%
• Profit for the period increased by 13,9% to over 22 million Euros
• Non-performing loans/total loans in the trade receivables sector: 3,5% compared to 4,3%
• Solvency: 12,9%
• Core Tier 1: 13,1 %
The expectations for the remainder of the 2013 financial year remains positive for the group, in an evolving
market marked by an economic recession and conditioned by the climate of distrust and also the result of the
limited effectiveness of actions taken by institutions.
In particular, Banca IFIS expects:
• “High single-digit” total rev. growth in 2013, 2014, 2015
• Target annual rev. growth from NPL loans recovery, trade receivables between 15% and 20% over next 3
years;
• Raised 2013 ROE forecast to 25% from 20%; expects ROE above 20% in 2014, 2015;
• Plans to cut cost of debt collection by 1 percent next year and 0.5 percent in 2015 generating savings of
up to 40 million euros;
• Retail funds totaled 3.9 billion euros as of June 19, up from 3.6 billion euros at the end of the first quarter
• Focus on core business boosting margins from recovery of distressed loans, trade receivables and
reducing volatile rev. from sovereign bond portfolio;
• Plans to reduce Italy govt. bond holdings to 3.3 billion euros by end 2014, to 2.2 billion euros by end 2015
from current 7.8 billion euros, not reinvesting in sov. maturing securities;
• Target: bad-loan ratio at 3% by year-end from 3.5% in 1Q;
• Banca IFIS 1Q profits rose 14% to 22.5 million euros;
• Shares: +50% YTD vs FTSE Italia All-Share Financial Services Index +3%.