Solid Start by unlimited in the first quarter of 2022, in
Operating profit at 33.5 million euros,
a 72% year-over-year increase
Net profit of 15.7 million euros (+25% Y/Y)
Strongest first quarter ever in terms of new business generation, customer loans and
Investments at more
€2.8 billion (+27% Y/Y) and total assets at €4.9 billion
Asset quality and the capital base remain at excellent levels in the banking system:
Organic NPE report1 at 0.7% and CET1 ratio at 17.7%
Successful launch of b-ilty and Quimmo,
Highly innovative digital initiatives
Strengthened leadership in managing large corporate real estate loans UTP Ticket
By buying Areca
With over €2 billion of corporate UTP under management
MILAN, Italy, May 11, 2022 (GLOBE NEWSWIRE) — Chaired by Rosalba Casiraghi, the board of illimity Bank SpA (“unlimited“or the”Bank”) yesterday approved the results of the illimity Group as of March 31, 2022.
illimity continued its growth trajectory also in the first quarter of 2022, in line with the trajectory set out in its 2021-25 strategic planpublication a net profit of 15.7 million eurosan increase of 25% compared to the first quarter of 2021 (12.6 million euros).
More specifically, the quarter was characterized by:
- the best first quarter in history in terms of new business volumes, with loans and investments of more than 330 million euros born in the first quarter of 2022, more than double the figure for the first quarter of the previous year. The Bank’s business lines all showed great vivacity, contributing to the strong momentum of the quarter;
- a strong increase in turnover to reach 78.5 million euros (+41% y/y, +1% q/q) in the first quarter of 2022, increasingly diversified and well balanced between net interest income and non-interest income. The Distressed Credit Division maintained its position as the largest contributor, generating 69% of total revenue earned in the quarter, while the Growth Credit Division recorded revenue growth of more than 50% compared to the first quarter of 2021, increasing its contribution to consolidated revenue at approximately 19%;
- continuous improvement of operating leverage: the Cost income ratio stood at 57% in the first quarter of 2022, down 8 percentage points compared to the same period of the previous year and 5 percentage points compared to the previous quarter;
- thanks to the above dynamics, a operating profit of 33.5 million euroswhich represents a significant increase both on an annual basis (+72% compared to the figure of 19.5 million euros posted in the first quarter of 2021) and on a quarterly basis (+14% compared to the figure of 29 .4 million euros in the fourth quarter of 2021);
- a pre-tax profit of 24.1 million euroswhich represents an increase of 26% on an annual basis (and 98% on a quarterly basis), despite organic credit impairments based on an approach that remained cautious also during the quarter and value adjustments on a part Distressed Credit Division’s existing portfolio, physiologically arising from the regular review of each loan’s business plans and related recovery strategies;
- the excellent quality of the organic loan book: as of March 31, 2022, the ratio between gross organic bad debts and total gross organic debts originated since the beginning of illimity’s operations amounts to 0.7%, a figure rising to 2.3% if the the loan portfolio of the former Banca Interprovinciale is included. The annualized organic cost of risk2 for the quarter was 13 basis points;
- a solid financial base with ratios positioned at the highest levels of the system – a CET1 ratio of 17.7% (18.1% pro-forma taking into account special shares), a Total Capital Ratio of 23.2% (23.6% pro-forma) – and, despite the significant deployment of funds in new loans and investments, a strong liquidity position (about 1 billion euros).
Two high-tech initiatives have been launched in the first half of 2022, in execution of the 2021-25 Strategic Plan:
- February saw the launch of b-ilty, the first digital commercial credit and financial services store developed by illimity for SMEs with a turnover of between 2 and 10 million euros. Although currently in the test phase (“beta”) to finalize the offer and the operating platform, b-ilty can already count on a hundred active relationships;
- early April saw the launch of Quimmo, an innovative proptech, a development of neprix Sales, already the leader in remarketing on the court-ordered property sale market with 564 properties sold in the first quarter; the launch of Quimmo marks the entry into the free real estate market with a new brand and an innovative platform.
The opportunities to serve large markets and to create future partnerships, as well as the typical scalability of such initiatives arising from their high technological content, are all factors that will determine a strong growth potential for the results of both initiatives and lead to a significant contribution to the results of the illimity group.
Finally, illimity entered into an agreement for the acquisitionby setting up a new company, of 100% of Aurora Recovery Capital SpA (“Arec”), a company specializing in the management of Improbable to Pay (“UTP”) loans with a focus on the commercial real estate segment. The transaction is subject to the approval of the Supervisory Authority and the General Meeting of illimity, as well as the fulfillment of the usual conditions precedent for this type of transaction. With the subsequent integration of Arec into neprix, the latter will further strengthen its positioning on the market and considerably increase the number of its third-party service mandates, asserting itself more and more as a market service and being able to count on a consolidated experience, a brand and a high level of reliability recognized by the market. This operation should generate significant synergies:
- in service activities resulting from the continued opening up of neprix to third-party asset management mandates;
- in building expertise in deal structuring – which is expected to generate additional fees from complex deals initiated by the illimity group;
- in terms of management optimization and subsequent valuation of the real estate assets under management – which will result in higher divestment values with positive effects on the performance of assets under management;
- in co-investment opportunities for illimity alongside other investors in identified UTP positions in the market, including senior funding.
Management estimates that the acquisition and the potential synergies mentioned above will have a positive effect on the illimity group’s pre-tax profit of around €8 million in 2023 and around €11 million in 2025, in plus goals included in the 2021-25 Strategic Plan. From 2025, the combined entity’s pre-tax income would therefore stand at more than 30 million euros. For more information on the transaction, please refer to the press release issued today.
Corrado Passera, CEO and Founder of unlimitedcommented : “The solid results we obtained in the first quarter allow us to look to the rest of the year with great optimism.
In this regard, a new phase of growth has opened up for an unlimited period: our reference markets – performing credit, restructuring and distressed credit – will become even more important in the current scenario, and the significant generation of new investments and loans in the first quarter, as well as the robust pipeline, indicate that this trend will continue.
We are proud to have launched over the past few months two highly technological initiatives capable of further supporting illimity’s growth path and serving huge markets with unmet needs: b-ilty, the first comprehensive digital credit platform and financial services for SMEs, and Quimmo, the extremely innovative proptech that will revolutionize the free real estate market. If we add to this HYPE, which continues to consolidate its leadership in the Italian fintech market, we can truly say that illimity further and significantly increases its technological component, engine of growth and value creation for all our stakeholders.
In addition, the purchase of Arec allows us to strengthen our positioning in UTP credit management with a particular focus on the high-ticket corporate real estate segment and positions us to seize key market opportunities. that will arise in the future.
Finally, the pipeline of new business opportunities is very rich and, as expected, 2022 will be the year when the first significant synergies with the ION group will start to materialize.
The first results for 2022 are in line with the growth and results trajectory set out in the 2021-25 Strategic Plan (net income above €240 million in 2025), confirming that our business model remains solid even in the macroeconomic situation current.
For more details, see the full announcement: https://assets.ctfassets.net/0ei02du1nnrl/23UM8ZJlWJqTTKdXhzOyzW/f3c942cb2588f3c7e93dba0f40e8e7f0/illimity_1Q22_Results.pdf
For more information:
1 Related to the activity initiated by illimity, excluding the loan portfolio of the former Banca Interprovinciale.
2 Calculated as the ratio between provisions for loan losses and net organic loans to customers as of March 31, 2022 (€1,679 million) for the Factoring, Cross-over, Acquisition Finance and Turnaround segments and for loans purchased as part of investments in troubled credit portfolios that underwent a change in accounting status after acquisition or disbursement (excluding credits purchased as bad debts), the credit portfolio of the former Banca Interprovincial and Senior Financing to non-financial distressed credit investors.