Banca IFIS (IF) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was EUR 33 million, flat year-on-year; nine-month net income reached up to EUR 127 million, up as much as 2% year-on-year.

• Revenues for Q3 were EUR 157 million, down 4% year-on-year due to higher funding costs; nine-month revenues were EUR 531.8 million, up 3.8% year-on-year.

• Guidance for 2024 net income/profit confirmed at EUR 160 million.

• Financial position remains robust with EUR 2.1 billion in cash and a CET1 ratio of 16.43% as of September 30, 2024.

• Interim dividend of EUR 1.2 per share (EUR 63 million total) to be paid in November 2024.

Financial highlights

• Commercial banking revenues in Q3 were EUR 93 million, up from EUR 84 million in Q3 2023.

• NPL revenues in Q3 were EUR 55 million, down from EUR 66 million in Q3 2023, reflecting seasonality and Revalea integration.

• Proprietary portfolio contributed EUR 28 million, with capital gains from government bond sales and private equity investments.

• Operating costs in Q3 were EUR 94 million, with a decrease in other operating costs by up to EUR 10 million quarter-on-quarter.

• Loan loss provisions for Q3 were EUR 13 million; coverage ratio increased from 45% to 46%.

Outlook and guidance

• 2024 net income/profit guidance confirmed at EUR 160 million.

• Moderate loan demand expected, with corporates streamlining funding amid economic slowdown and increased competition.

• Cost of funding has peaked and is expected to decrease, with a target below 4.0% for 2024 and below 3.5% in 2025 if market conditions allow.

• Asset quality outlook remains benign, though normalization of cost of risk is expected over the next couple of years.

• NPL business to pursue selective acquisitions and co-investor partnerships for risk sharing.