In This Article:
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Illimity Bank SpA (FRA:53D) has consistently grown its total assets, surpassing 8 billion at the end of 2024 and aiming for approximately 11 billion by 2028.
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The bank maintains a solid capital position with a Q1 ratio of 14.7%, providing a substantial buffer above regulatory requirements.
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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%.
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The bank's liquidity position remains robust, with a buffer of 1.3 billion euros and regulatory ratios exceeding minimum requirements.
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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
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The bank experienced a negative impact on net interest income due to reduced volumes and margins, particularly from the NP business.
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Extraordinary write-downs and impairments related to the NP portfolios affected the 2024 results.
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Revenue was affected by cuts in market interest rates and a substantial reduction in NP business contribution.
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The bank recorded additional adjustments on portfolios, reflecting a prudent approach to non-guaranteed portions.
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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.