In This Article:
Release Date: February 11, 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) completed its strategic shift towards an SME-focused bank, enhancing its market position.
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The corporate investment banking division reported a 9% year-on-year increase in pre-tax profit, indicating strong profitability.
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Operating profitability grew by 21%, driven by organic growth and a 9% increase in fees.
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The bank maintains a solid capital position with a common equity tier one ratio of 14.3% and a liquidity buffer of 1.2 billion.
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Strategic M&A transactions, such as the partnership with Apa Partners, generated significant capital gains and strengthened the balance sheet.
Negative Points
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The bank recorded provisions and goodwill impairments totaling 118 million, impacting the net result.
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Net profit before goodwill impairments was 39 million, but goodwill write-offs brought the bottom line to just above break-even.
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The unsolicited public offer from BIS has delayed some planned M&A transactions, potentially affecting 2025 growth.
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Funding costs peaked at 4% in 2024, although they have started to decline.
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Current results for Quimmo, a property platform, are below expectations due to a slowdown in judicial cases.
Q & A Highlights
Q: Could you provide more details on the underlying assets of your securitization, and can we rule out further write-downs in the future? A: The senior notes targeted by our evaluation and provisions were portfolios of distressed credit and UTP acquired on the market. These were not organically originated loans. We regularly assess these portfolios and adjust their value based on developments. Further write-downs cannot be ruled out entirely, but we aim to manage them prudently. - Sylvia, CFO
Q: Why were personnel costs lower this quarter compared to previous quarters? A: Personnel costs were reduced due to a decrease in variable components, reflecting our results. We have worked to keep staff costs flat despite growth in certain areas. We expect personnel costs to remain around 20-22 million per quarter moving forward. - Sylvia, CFO
Q: Can you explain the 20 million provision related to potential contractual liabilities? A: The 20 million provision is for potential liabilities from past contractual commitments. We decided to fully provision them in 2024 to prevent future impacts on profitability. Depending on future developments, there might be reversals, but we are being prudent for now. - Sylvia, CFO