da Intermonte – BANCA IFIS company research report

Buon pomeriggio,

di seguito e in allegato inviamo il company research report relativo a BANCA IFIS a cura di Intermonte.

Rimaniamo a disposizione per ulteriori informazioni.

Un caro saluto,

Ludovica Bertola

M: +39 347 1667538

2Q24 beat

• Banca Ifis presented a sound set of 2Q24 results: the A/E beat is broadly based with a better top line offsetting higher OpEx. The bottom-line guidance and the payout policy were confirmed, even if we expect there may be upside potential given the strong capital position (CET1r at 15.32%). The financial position is very solid with Eu1.7bn of available cash, and the TLTRO repayment almost completed (Eu0.4bn to be done in Sept.24). We have fine-tuned our estimates and slightly revised upwards (to Eu25/s) the target price.
• 2Q24 results: this set of results came in better than expected, with the top line ~9% higher than we estimated, mainly thanks to resilient NII and trading income that came to Eu18.8mn (vs. our estimate of Eu12.8mn). OpEx was in line with estimates, and flat both QoQ and YoY. The cost of risk (CoR) was 2bp lower than our forecast, while the annual SRF contribution was entirely booked in 1H. This led to pre-tax profit of Eu71mn, and net profit of Eu46mn (+13.4% and + 6.9% A/E respectively).
• Feedback from conference call: during the call, management made it clear that guidance is confirmed for now (FY24 net profit Eu160mn) but may be revised upwards following 3Q results. The reason is that those numbers, including a Eu110mn dividend (based on net profit guidance, Eu114mn based on our estimates), were projected with some macro assumptions that have not yet come into being (3 rate cuts and higher AQ deterioration), but management still wants to remain cautious with projections, partly due to some seasonality that historically affects 3Q. On AQ, with the exception of defaults in some individual cases, there has been no sign of any deterioration, as demonstrated by the decreasing payment days. They also left no room for maxi-dividends, nor for SBB, even though the large capital position could permit it. CEO Furstenberg indicated they would prefer to invest part of the capital buffer in the company to grow the business further (i.e. what they did with Revalea, which is already bringing in some Eu5.5mn of revenues in NPL business).
• Change in estimates: we are revising our estimates slightly upwards, due to a different mix in top line revenues (flattish NII, slightly higher fees and higher trading), slightly higher OpEx, and lower provisions (due to a macro scenario that doesn’t seem to be deteriorating). Our estimates also embed a higher dividend (Eu117mn/Eu119mn/Eu124mn for FY24/25/26), and we think that the strong capital position on which they’re sitting can lead to a higher payout policy, or some selective M&A like the Revalea deal.
• OUTPERFORM confirmed, TP to Eu25 (from Eu24.10): given our higher estimates and the brighter outlook we are raising our TP, obtained through a Gordon Growth Model, as an average of the FY25/26 valuation. IFIS is in the top 3 for dividend yields in our coverage, it produces quality results through organic growth (and sometimes with high quality and accretive deals), and we think that the better-than-expected macro scenario will further support margin improvement.