Illimity Bank SpA (LTS:0A3J) Q3 2024 Earnings Call Highlights: Strong Liquidity and Growth ...

GuruFocus News
4 min read

In This Article:

  • Liquidity Buffer: Nearly EUR900 million in cash and government bonds.

  • Core Tier One Ratio: 15.6%, exceeding targets by 650 basis points.

  • Total Capital Ratio: 20.3%.

  • Net Profit Q1 2023: EUR7.8 million.

  • Net Interest Income Growth: Over 30% year-on-year.

  • Net Customer Loans: Increased by 49% year-on-year to EUR2.3 billion.

  • Investment Banking New Investments Q1 2023: EUR90 million.

  • Combined Pre-tax Profit (SME Business): Increased by 74% year-on-year.

  • Retail Deposits Growth: More than EUR200 million during the quarter.

  • Distressed Credit Revenue Q1 2023: EUR42 million, down 22% year-on-year.

  • Asset Management Revenue Q1 2023: EUR8.4 million.

  • EBITDA Margin (Asset Management): 23%.

  • Pre-tax Profit (Asset Management): EUR1.7 million.

  • Customer Base Growth (Retail Fintech): 11% year-on-year.

  • Transaction Growth (Retail Fintech): 36% year-on-year to 29 million transactions.

  • Projected Net Profit 2023: Over EUR100 million.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Illimity Bank SpA (LTS:0A3J) reported a robust liquidity position with a liquidity buffer of nearly EUR900 million in cash and government bonds.

  • The bank's core Tier 1 ratio is strong at 15.6%, exceeding targets by 650 basis points, and the total capital ratio stands at 20.3%.

  • Net interest income and net commissions experienced a double-digit growth in Q1 2023 compared to the same period last year, with a combined growth of over 30%.

  • The strategic partnership with Engineering Group for the IT platform is expected to drive substantial profitability in 2023 and beyond.

  • The SME business showed impressive performance with net customer loans surging by 49% year on year to reach EUR2.3 billion.

Negative Points

  • The distressed credit market remained soft in the first quarter, affecting both investments and disposals, leading to a lower pre-tax profit.

  • The cost of funding increased to 2.7% in Q1, which was higher than initially expected for the full year.

  • The organic NPL ratio increased to 3.7%, mainly due to some exposures moving to the non-performing category.

  • Other income comparability with the first quarter last year was affected by the termination of the previous IT platform license agreement.

  • The revenue from closed positions was lower compared to the first quarter of the previous year, influenced by a very important disposal in Q1 2022.

Q & A Highlights

Q: Can you clarify the guidance for net income over EUR100 million, considering the impact of the new IT partnership? A: We have adjusted our guidance to indicate that we will exceed EUR100 million, but we are not providing more detailed figures at this time. The partnership with Engineering will positively impact our results, and we will provide further guidance in the upcoming quarters.

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