Cerved, Cedacri, Illimity. This is where the Ion di Pignataro fund sneaks into
Illimity led by Passera presented the new 2021-2025 plan. Here are forecasts, strategies and agreements (the Ion di Pignataro fund enters the capital of Illimity)
Illimity presented the new strategic plan for the period 2021-2025 this morning: it aims to reach, by the end of this period, a profit of over 240 million, increasing the shareholders' equity up to 1.4 billion (in 2023 it plans to reach 1 billion).
Here are all the details
WHAT IS ILLIMITY
Illimity presents itself as “a bank with a new paradigm specialized in corporate credit, purchase and servicing of distressed loans and direct banking services”. The latter term indicates those banks that offer all or a large part of their financial services without the help of branches.
Illimity's president is Rosalba Casiraghi; the managing director, on the other hand, is Corrado Passera, former number one of Intesa Sanpaolo and Poste Italiane, former Minister of Economic Development and Transport in the Monti government.
Illimity is listed on the Italian stock exchange and has a share capital of € 50,366,953.62. Its main shareholders – those with a stake of at least 5 per cent of the share capital – are Gruppo Sella (10.0%), LR Trust – FIDIM (8.7%), Tensile – Metis Holdings Sarl (7.5%) ) and AMC Metis Sarl (7.0%).
THE OBJECTIVES OF ILLIMITY ON PROFIT AND EQUITY
According to the forecasts contained in the plan, in 2021 Illimity will record a net profit of 60-70 million, which will rise to approximately 140 million in 2023 to exceed 240 million in 2025; the Roe will be 10, 15 and 20 per cent respectively.
The increase in shareholders' equity – 1 billion in 2023 and 1.4 in 2025 – will maintain a Cet1 coefficient always above 15 per cent, despite the distribution of cumulative dividends over the plan period of approximately 180 million starting from financial year 2022. In case, however, of the green light of the European Central Bank.
DIVIDENDS
On dividends, Illimity said that "a flexible dividend policy is envisaged to maximize the creation of value for shareholders, with the determination of a pay-out ratio between 20% and 30% over the Plan period and which will be calibrated from time to time according to the concrete availability of investments with a high return on capital ". However, specifying that this policy "remains subject to the removal of the limits currently envisaged by the Regulator until 30 September 2021".
The bank explained that the first dividend will be on the net profit of 2022, with a payout of 20 percent.
PROGRESSION ON PROFIT
The strategic plan to 2025 starts from the return on capital of 8 percent achieved in the first quarter of 2021. Illimity estimates an average annual progression of 51 percent, with an average increase in revenues of 30 percent: they should exceed 450 million in the 2023 and reach around 660 million in 2025.
THE ILLIMITY STRATEGY
Illimity claims that the results achieved are the result of "some strategic choices that have proved correct". Among these, the bank claims its focus on credit to small and medium-sized enterprises, and in particular in performing credit: "a market worth 700 billion euros where, in two years of activity", Illlimity has provided loans to businesses for about 1 billion euros.
Illimity has also concentrated in the sectors of unlikely to pay corporate credit ("a rapidly growing market in which transactions of over 35 billion5 euros are expected between 2021 and 2025") and in that of corporate NPL loans ("a market in which transactions of over 140 billion euros are expected between 2021 and 2025 ").
THE “STRATEGIC” ALLIANCE WITH ION
Illimity also announced that it has reached a “strategic alliance” with the Ion group which will consist of “long-term collaboration agreements in crucial sectors and services such as, among others, data analytics, credit scoring, market intelligence”.
A license agreement was also signed with Ion for the use of the information systems developed by Illimity, which will allow the bank to generate 90 million euros of cumulative revenues in the period 2021-2025.
Ion in recent months in Italy has marked the acquisitions of Cedacri (with Fsi) and Cerved .
ION WILL ENTER THE SHARE CAPITAL OF ILLIMITY
The collaboration – defined as "broad spectrum" – also provides for Ion di Andrea Pignataro to enter the share capital of Illimity with a stake of up to 9.9 percent, which will be obtained through a reserved capital increase for 5.75 million shares ordinary, plus a warrant for another 2.4 million shares.
The capital increase will be discussed during the extraordinary shareholders' meeting on 29 July.
THE COMMENT OF CORRADO PASSERA
Corrado Passera, managing director of Illimity, said in this regard that "I am extremely pleased to welcome the Ion group among our long-term shareholders, and in particular Andrea Pignataro, with whom I share a vision of very strong innovation in front of us" .
Andrea Pignataro is the CEO of ION Trading; founded ION Investment Group 22 years ago; previously he was a bond trader at the Solomon Brothers investment bank.
“From our partnership”, added Passera, “we expect very significant technological and commercial synergies that will further strengthen our business plan”.
THE B-ILTY PROJECT
The Illimity plan envisages "a gradual rebalancing of the contribution of the interest margin from 59% in 2020 to 55% in 2025, following the progressive increase in the component of commission and other revenues".
This will be helped by the development of new initiatives such as B-ILTY, presented as "the first complete direct bank for small businesses", equipped with a completely digital transactional platform and designed to respond "to the specific needs of small businesses", with products of factoring and short and medium term financing and value added services (insurance, digital CFO).
B-ILTY aims to serve over 30,000 customers when fully operational in 2025 and generate new volumes of cumulative loans disbursed over the Plan period of approximately € 3.7 billion.
The launch is expected by the fourth quarter of 2021.
HOW WILL HYPE GO
In the Illimity plan, it is proposed to consolidate HYPE, the joint venture with the Sella Group active in the sector of digital financial services platforms in the retail world. HYPE has 1.4 million customers which, according to Illimity estimates, will reach 3 million over the course of the plan.
Within the third quarter of the year, the New HYPE will be presented, which will evolve – explains the bank – into a "money management hub to cover the customer's needs at 360 degrees through the extension of the PSD2 functionality and the completion of the offer with products third parties "(deposits, investments).
NET RECEIVABLES, ASSETS AND SOURCES OF FINANCING
Illimity announces that net loans to customers are expected to reach over 5 billion in 2023 and over 7 billion by 2025, equal to an average annual growth of over 25 percent between 2020 and 2025.
Total assets will rise to over 7 billion in 2023 and around 10 billion in 2025.
Risk-weighted assets will be € 5.4 billion in 2023 and € 7 billion in 2025.
The sources of financing, on the other hand, will rise from 3.4 billion in 2020 to over 6 billion in 2023, up to 8 billion in 2025, with a rebalancing over the Plan horizon towards the wholesale component, expected to represent approximately 40% of the total. in 2025 ″.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/illimity-piano-strategico-2021-2025/ on Tue, 22 Jun 2021 13:56:51 +0000.