Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Illimity Bank SpA (FRA:53D, Financial) has consistently grown its total assets, surpassing 8 billion at the end of 2024 and aiming for approximately 11 billion by 2028.
- The bank maintains a solid capital position with a Q1 ratio of 14.7%, providing a substantial buffer above regulatory requirements.
- The core business, focused on SMEs, shows resilience with a Q1 pre-tax profit of 31 million and a cost-to-income ratio of 21%.
- The bank's liquidity position remains robust, with a buffer of 1.3 billion euros and regulatory ratios exceeding minimum requirements.
- Illimity Bank SpA (FRA:53D) is actively unlocking value from ventures and joint ventures, with plans to generate at least 200 basis points of additional capital by 2026.
Negative Points
- The bank experienced a negative impact on net interest income due to reduced volumes and margins, particularly from the NP business.
- Extraordinary write-downs and impairments related to the NP portfolios affected the 2024 results.
- Revenue was affected by cuts in market interest rates and a substantial reduction in NP business contribution.
- The bank recorded additional adjustments on portfolios, reflecting a prudent approach to non-guaranteed portions.
- Profitability in Q1 2025 was subdued, impacted by interest rate dynamics and non-core business performance.
Q & A Highlights
Q: Could you guide us on the capital impact you expect in the coming quarters, and what are your expectations in terms of capital evolution in 2026 and 2027?
A: Sylvia, the CFO, explained that the bank has already implemented optimization measures, particularly in market risk, which have been successful. The outlook is to maintain a robust CET1 ratio, likely between 13% and 14%, while continuing to invest and grow the business.
Q: In the quarter, you recorded additional adjustments on BLT. Could you comment on the reasons behind these adjustments?
A: CEO Corrado Passura noted that while most positions are backed by state guarantees, there is a portion that is not. The bank decided to take a prudent approach by covering the non-guaranteed portion, given the higher expectations in terms of profitability and risk profile.
Q: What dynamics are you seeing in terms of credit demand from corporates, and what gives you confidence in the strong core loan growth outlined in your strategic guidelines?
A: CEO Corrado Passura stated that demand for their services, such as factoring and structured finance, remains high. The bank has been growing in lending to SMEs, a crucial component of the Italian economy, and expects this trend to continue.
Q: Can you remind us of the timing regarding the public offer from Bank A?
A: Joan Lombardi, General Counsel, mentioned that they are awaiting the publication of the offer document by Vafis, expected soon. The board will then evaluate the offer, with a resolution expected by the end of next week.
Q: What are your expectations for net interest income (NII) stabilization?
A: Sylvia, the CFO, indicated that NII is expected to stabilize in the coming quarters, supported by improvements in funding costs and volume growth, despite the challenges posed by declining market rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
