Banca IFIS (IF) H1 2024 earnings summary

Executive summary

• Net income for Q2 2024 reached €46 million, up 3% year-on-year; H1 net income totaled €94 million, marking the best ordinary result ever and reflecting resilient revenues across all divisions.

• Revenues remained resilient across Commercial Banking, NPL, and Proprietary Finance, offsetting increased funding costs.

• Asset quality remains strong with no signs of widespread deterioration, limited mainly to specific exposures; overlays on performing loans remain unused.

• 2024 net income guidance of €160 million is confirmed, factoring in typical Q3 seasonality.

• Solid liquidity position with €1.7 billion available cash and CET1 ratio at 15.32% as of June 30, 2024.

Financial highlights

• Revenues in Q2 2024 were €189 million, up 9.6% year-on-year; H1 net banking income grew 7.5% to €374.5 million.

• Commercial banking contributed €87 million (up 13% year-on-year), NPL revenues €86 million, and non-core/G&S €60 million.

• Quarterly cash collection from NPLs (excluding Revalea) was €94 million, showing healthy portfolio performance.

• Loan loss provisions in Q2 were €7 million, mainly from new flows to default, with overall provisions for H1 at €15 million.

• CET1 ratio increased to 15.32% after deducting accrued dividends; available cash and counterbalancing capacity stood at €1.7 billion.

Outlook and guidance

• 2024 net income guidance of €160 million is reiterated, with interim dividend payment planned for November 2024.

• Dividend policy remains unchanged, targeting €110 million payout if guidance is met.

• New three-year business plan to be presented in H1 2025.

• Sensitivity to a 50bps rate cut reduced to €9–11 million, with further actions planned to lower it to €5–8 million.

• Tax incentives approved in Q2 2024 expected to accelerate leasing market in 2H24.