• IMPRESE
  • DRL
  • CREDITI FISCALI
  • RACCOLTA
Clicca sul bottone della Business Unit di interesse per visualizzare i principali contenuti del Bilancio relativi e un video di presentazione. Usa le frecce per visualizzare tutti i contenuti.
  • Banca IFIS supports the short-term financial and credit management needs of small- and medium-sized enterprises. This...
  • The Banca IFIS Group is the only independent banking group in Italy that specialises in the sector of trade receivables...
  • Credi Impresa Futuro Banca IFIS developed a new project, introducing also a new brand, to foster the growth of trade...
  • STATEMENT OF FINANCIAL POSITION(in thousands of Euro) TRADE RECEIVABLES...
  • RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION: QUARTERLY...
  • The organisational structureThe model for segment reporting is in line with the organisational structure used by the...
  • MAIN STATEMENT OF FINANCIAL POSITION ITEMS(in thousands of Euro) AMOUNTS AT...
  • Formation of net banking incomeNet banking income rose 7,9% from 244,9 million Euro to 264,2 million Euro, thanks to...
  • GROUP KPIs (1) YEAR CHANGE 2013 2012(2) %...
  • The Banca IFIS Group continues to grow relentlessly, breaking new records in terms of profitability, capitalisation and...
  • The model for segment reporting is in line with the organisational structure used by the Head Office to analyse Group...
  • The Banca IFIS Group is the only independent banking group in Italy that specialises in the sector of trade receivables...
  • The Group's prospects for 2014 remain largely positive. On the economic front, the recession that has characterised...
  • STATEMENT OF FINANCIAL POSITION(in thousands of Euro) TRADE RECEIVABLES...
  • RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION: QUARTERLY...
  • The organisational structureThe model for segment reporting is in line with the organisational structure used by the...
  • MAIN STATEMENT OF FINANCIAL POSITION ITEMS(in thousands of Euro) AMOUNTS AT...
  • The market for tax receivables usually arising from insolvency proceedings has historically been valued at 40 to 50...
  • Fast FinanceFast Finance is Banca IFIS Group’s business area specialised in purchasing tax receivables arising from...
  • The Banca IFIS Group continues to grow relentlessly, breaking new records in terms of profitability, capitalisation and...
  • Formation of net banking incomeNet banking income rose 7,9% from 244,9 million Euro to 264,2 million Euro, thanks to...
  • The model for segment reporting is in line with the organisational structure used by the Head Office to analyse Group...
  • In 2013, Italian banks registered an overall reduction in funding, mainly as a result of lower refinancing operations...
  • On 7 January 2013, Banca IFIS officially launched contomax, its crowd current account born from the dialogue with the...
  • rendimax is Banca IFIS’s high-yield online savings account aimed at private investors, companies and insolvency...
  • The Banca IFIS Group is the only independent banking group in Italy that specialises in the sector of trade receivables...
  • Formation of net banking incomeNet banking income rose 7,9% from 244,9 million Euro to 264,2 million Euro, thanks to...
  • Control over the development of the Group's organisation, with reference to organisational structures, size and...
  • Key Data On The Consolidated Income Statement (2013 VS 2012)Key Data On The Consolidated Statement Of Financial...
  • The Group's prospects for 2014 remain largely positive. On the economic front, the recession that has characterised...
  • The Banca IFIS Group continues to grow relentlessly, breaking new records in terms of profitability, capitalisation and...

Statement of financial positions items

MAIN STATEMENT OF FINANCIAL POSITION ITEMS
(in thousands of Euro)
AMOUNTS AT CHANGE
2013 2012(1) ABSOLUTE %
Available for sale financial assets 2.529.179 1.974.591 554.588 28,1%
Held to maturity financial assets 5.818.019 3.120.428 2.697.591 86,4%
Due from banks 415.817 545.527 (129.710) (23,8)%
Due from customers 2.296.933 2.277.882 19.051 0,8%
Property, plant and equipment and investment property and intangible assets 47.100 45.655 1.445 3,2%
Other assets 230.749 145.615 85.134 58,5%
Total assets 11.337.797 8.109.698 3.228.099 39,8%
Due to banks 6.665.847 557.323 6.108.524 1096,0%
Due to customers 4.178.276 7.119.008 (2.940.732) (41,3)%
Financial liabilities held for trading 130 389 (259) (66,6)%
Other liabilities and equity items 113.221 123.961 (10.740) (8,7)%
Net Equity 380.323 309.017 71.306 23,1%
Total liabilities and Equity 11.337.797 8.109.698 3.228.099 39,8%
(1) Data restated after initial publication. See the Introductory notes on how to read the data.

Available for sale (AFS) financial assets

Available for sale financial assets include debt and equity securities and at the end of the year stood at 2.529,2 million Euro, up 28,1% compared to 1.974,6 million Euro in the prior year. The securities portfolio is held for the purposes described in the “Securities portfolio” section below.

Held to maturity (HTM) financial assets

The portfolio of held to maturity financial assets stood at 5.818,0 million Euro at the end of the period, +86,4% compared to the end of the previous year, and consists of Italian government bonds with residual maturity at the time of purchase of over one year, in light of the ability and willingness to hold them until maturity.

At the reporting date, the HTM portfolio showed unrecognised net capital gains amounting to 92,6 million Euro before taxes. Such net capital gains were not recognised according to the amortised cost method applicable to this portfolio. The securities portfolio is held for the purposes described in the “Securities portfolio” section below.

Receivables due from banks

At 31 December 2013, receivables due from banks totalled 415,8 million Euro, compared to 545,5 million Euro at 31 December 2012 (-23,8%).

This item includes some securities not listed on an active market with banking counterparties, totalling 24,0 million Euro (-58,7% compared to 31 December 2012), and treasury loans with other lenders, amounting to 387,7 million Euro (-19,6% compared to 31 December 2012), largely related to maintaining excess liquidity in the system. Finally, the item included also 4,1 million Euro in short-term repurchase agreements with banks (4,7 million Euro at 31 December 2012).

Securities portfolio

In order to provide a comprehensive analysis of the Group’s securities portfolio, the debt securities portfolio, represented by several asset items in the statement of financial position, and the equity portfolio are commented on below.

Debt securities portfolio

At the end of the year, securities trading reached a significant volume, that is 8.357,9 million Euro (+62,6% compared to 31 December 2012). Purchases to the tune of 4.980,5 million Euro focused on Italian government bonds, at fixed rate for very short-term bonds and at floating rate for medium-term ones. Currently the portfolio's average return is high, considering the period in which most bonds were purchased.

This significant resource allowed Banca IFIS to access funding at reasonable costs through repurchase agreements on the MTS platform or refinancing operations on the Eurosystem.

These securities have been classified as shown in the following table on the basis of their characteristics and in compliance with the provisions of IAS 39.

DEBT SECURITIES PORTFOLIO
(in thousands of Euro)
BALANCES CHANGE
31.12.2013 31.12.2012 ABSOLUTE %
DEBT SECURITIES INCLUDED UNDER:        
Available for sale financial assets 2.515.810 1.961.556 554.254 28,3%
Held to maturity financial assets 5.818.019 3.120.428 2.697.591 86,4%
Due from banks - bonds 24.048 58.159 (34.111) (58,7)%
Total securities held 8.357.877 5.140.143 3.217.734 62,6%
 

Here below is the breakdown by issuer and by maturity of the debt securities held.

Issuer up to 3 months Over 3-6 months Over 6 months to 1 year 1 to 2 years over 2 years up to 5 years Total
Government securities 988.695 1.229.615 1.286.206 1.973.423 2.830.460 8.308.399
% of total 11,8% 14,7% 15,4% 23,6% 33,9% 99,4%
Banks 9.999 3.005 24.972 6.031 5.471 49.478
% of total 0,1% 0,0% 0,3% 0,1% 0,1% 0,6%
Total 998.694 1.232.620 1.311.178 1.979.454 2.835.931 8.357.877
% of total 11,9% 14,7% 15,7% 23,7% 34,0% 100%
     

Equity portfolio

Available for sale financial assets include equity securities relating to non-controlling interests in unlisted companies, amounting to 13,4 million Euro (+2,6% compared to 31 December 2012), which are considered strategic for Banca IFIS. The increase compared to the end of 2012 refers to the subscription to further shares in a lender the Bank already had an interest in, as well as to the change in the fair value of securities held in the portfolio.

Receivables due from customers

At year-end, total receivables due from customers reached 2.296,9 million Euro, rising 0,8% or 19 million Euro compared to 2.277,9 million Euro at the end of 2012. This item increased even though since last summer the Bank registered significant cash flows, especially from receivables due from the Public Administration, and a decrease in both reverse repurchase agreements and margin lending related to repurchase agreements in government bonds on the MTS platform with Cassa di Compensazione e Garanzia (the Italian central counterparty).

The rise was attributable to trade receivables for 177 million Euro (+10%), DRL (distressed retail loans) for 23,9 million Euro (+23%), and tax receivables for 7,1 million Euro (+8,5%). On the other hand, a decrease was registered in margin lending related to repurchase agreements in government bonds on the MTS platform, dropping from 188,3 million Euro to 80,1 million Euro (-57,5%) as well as reverse repurchase agreements with Cassa di Compensazione e Garanzia outstanding at 31 December 2013, falling from 138,7 million Euro to 52,7 million Euro (-62%).

As mentioned in the paragraph Introductory notes on how to read the data, the Banca IFIS Group revised its methods of accounting for receivables purchased outright within the factoring activity (hereinafter "ATD", a titolo definitivo in Italian) in order to report them more accurately in the financial statements. Specifically, although most of these receivables are short-term, the Bank measured them at amortised cost and reported them accordingly in its accounts. To allow for like-for-like comparison, the data for the previous year were reclassified, reporting Receivables due from customers under assets net of 14,4 million Euro in relevant deferred income recognised under Other liabilities, and reclassifying the seller's consideration from Commission income to Interest income for 33,1 million Euro.

DUE FROM CUSTOMERS:BREAKDOWN BY SECTOR
(in thousands of Euro)
BALANCES CHANGE
31.12.2013 31.12.201(1) ABSOLUTE %
Trade receivables 1.938.415 1.761.432 176.983 10,0%
- of which impaired 162.609 333.565 (170.956) (51,3)%
Distressed retail loans 127.945 104.044 23.901 23,0%
- of which impaired 127.945 104.044 23.901 23,0%
Tax receivables 90.282 83.174 7.108 8,5%
- of which impaired 499 2.566 (2.067) (80,6)%
Governance and services 140.291 329.232 (188.941) (57,4)%
- of which with cassa di compensazione e garanzia 80.090 188.262 (108.172) (57,5)%
- of which receivable repurchase agreements 52.698 138.735 (86.037) (62,0)%
Total due from customers 2.296.933 2.277.882 19.051 0,8%
- of which impaired 291.053 440.175 (149.122) (33,9)%
(1) Data restated after initial publication. See the Introductory notes on how to read the data.

Receivables due from customers are composed as follows: 26,7% from the Public Administration (compared to 29,8% at 31 December 2012) and 73,3% from the private sector (compared to 70,2% at 31 December 2012).

Geographically, the item is broken down as follows: 97,9% from customers resident in Italy (98,3% at 31 December 2012) and 2,1% from customers resident abroad (1,7% at 31 December 2012).

Finally, it should be noted that the item includes 2 positions, for a total amount of 92,2 million Euro, which fall within the category of major risks.

Receivables due from customers, excluding 117,8 million Euro in non-performing loans, totalled 2.179,1 million Euro, an increase of 0,8% compared to the end of 2012.

BANKING PRODUCTS
(in thousands of Euro)
BALANCES CHANGE
31.12.2013 31.12.201(1) ABSOLUTE %
Current accounts 133.271 101.185 32.086 31,7%
Advance accounts for future receivable transfers and other financing 42.328 18.482 23.846 129,0%
Factoring advance accounts 1.717.301 1.559.175 158.126 10,1%
Non-performing loans 61.440 68.070 (6.630) (9,7)%
Tax receivables 89.783 80.608 9.175 11,4%
Mortgages 2.214 7.612 (5.398) (70,9)%
Receivable repurchase agreements 52.698 138.735 (86.037) (62,0)%
Other operations 80.090 188.764 (108.674) (57,6)%
Total net current loans (2) 2.179.125 2.162.631 16.494 0,8%
Net non-performing loans 117.808 115.251 2.557 2,2%
Total due from customers 2.296.933 2.277.882 19.051 0,8%
(1) Data restated after initial publication. See the Introductory notes on how to read the data. (2) Total net current loans include substandard, restructured and past due loans classified as impaired loans, pursuant to the Bank of Italy's provisions (see table 7.1 in the Notes to the financial statements)
 

Credit quality

Can a small/medium sized enterprise have the same creditworthiness as a large enterprise?

Credit quality

By adopting a business model suitable for transferring risk from customers to better-structured debtors, the Bank manages to mitigate its exposure to customer default risk. Even though the prolonged economic downturn has caused also receivables due from higher-quality debtor to deteriorate, during the year the Bank registered a remarkable improvement concerning the most significant impaired assets, i.e. those in the Trade Receivables sector, as shown in the table below. Specifically, said improvement was due to the following factors: a) the pace of new non-performing and substandard loans decreased during the year; b) the Group is extremely effective at promptly recognising losses on positions found to be impaired (adjusting the item impairment/losses in profit or loss accordingly); c) particular attention was paid to objective substandard loans, considerably improving their situation; finally, d) the Group registered strong cash flows from loans already classified as non-performing/substandard in the previous years.

In the absence of material amounts related to restructured positions, past due loans strongly improved as a result of specific management operations and the acceleration in payments, especially from the Public Administration.

Total net impaired assets for the year totalled 291,1 million Euro, compared to 440,2 million Euro at the end of 2012 (-33,9%). The decrease was largely due to lower substandard loans (-39,6%) and past due loans (-63,1%). In the Trade Receivables sector alone, whose performance is crucial for the purpose of assessing the Bank’s overall credit quality, total impaired assets dropped 51,3%, from 333,6 million Euro at the end of 2012 to 162,6 million Euro.

Impaired assets include receivables in the DRL sector, rising from 104,0 million Euro to 127,9 million Euro (+23%). This sector's business is closely associated with recovering impaired assets: therefore, DRL loans are recognised as non-performing or substandard loans. In particular, those loans maintain the same classification as that assigned by the invoice seller, provided the latter is subject to the same law as Banca IFIS: otherwise, if the Bank has not ascertained the debtor's state of insolvency, those loans are classified as substandard. In light of the above, the amount of DRL loans classified as non-performing or substandard is not critical: on the contrary, it is an indicator of the normal and positive performance of the sector.

CREDIT QUALITY
(in thousands of Euro)
TRADE RECEIVABLES DRLs TAX RECEIVABLES GOVERNANCE AND SERVICES CONSOLIDATED TOTAL
Non-performing loans          
Figures at 31.12.2013 50.804 66.505 499 - 117.808
Figures at 31.12.2012 76.711 35.974 2.566 - 115.251
Change % (33,8)% 84,9% - - 2,2%
Substandard loans         -
Figures at 31.12.2013 61.796 61.440 - - 123.236
Figures at 31.12.2012 136.124 68.070 - - 204.194
Change % (54,6)% (9,7)% - - (39,6)%
Restructured loans         -
Figures at 31.12.2013 8.351 - - - 8.351
Figures at 31.12.2012 7.910 - - - 7.910
Change % 5,6% - - - 5,6%
Past due loans         -
Figures at 31.12.2013 41.658 - -   41.658
Figures at 31.12.2012 112.820 - - - 112.820
Change % (63,1)% - - - (63,1)%
Total net impaired assets          
Figures at 31.12.2013 162.609 127.945 499 - 291.053
Figures at 31.12.2012 333.565 104.044 2.566 - 440.175
Change % (51,3)% 23,0% (80,6)% - (33,9)%
Net performing loans due from customers         -
Figures at 31.12.2013 1.775.806   89.783 140.291 2.005.880
Figures at 31.12.2012(1) 1.427.867 - 80.608 329.232 1.837.707
Change % 24,4% - 11,4% (57,4)% 9,2%
Total due from customers (cash)          
Figures at 31.12.2013 1.938.415 127.945 90.282 140.291 2.296.933
Figures at 31.12.2012(1) 1.761.432 104.044 83.174 329.232 2.277.882
Change % 10,0% 23,0% 8,5% (57,4)% 0,8%
(1) Data restated after initial publication. See the Introductory notes on how to read the data.

Concerning trade receivables, total non-performing loans to customers at 31 December 2013, net of impairment, were 50,8 million Euro, compared to 76,7 million Euro at 31 December 2012 (-33,2%), whereas substandard loans totalled 62,4 million Euro, compared to 136,1 million Euro in 2012 (-54,6%). These decreases are due to the slowing pace of new non-performing and substandard loans, the increase in transfers to lower risk categories, or collections, as well as the adjustments made during the period.

At 31 December 2013, net non-performing loans due from customers in the DRL sector amounted to 66,5 million Euro, compared to 36 million Euro in 2012 (+84,9%), bringing the total amount of net non-performing loans to 117,8 million Euro at 31 December 2013, +2,2% from 115,3 million Euro at the end of 2012.

At 31 December 2013, net substandard loans due from customers in the DRL sector totalled 61,4 million Euro, compared to 68,1 million Euro in 2012 (+9,7%), bringing total net substandard loans to 123,2 million Euro at 31 December 2013, -39,6% from 204,2 million Euro at the end of 2012.

The DRL sector’s receivables are, as shown in other parts of this document, all recognised under substandard or non-performing loans, right from the moment in which the relative portfolio is purchased from the originator. Changes in these amounts, therefore, do not affect the credit quality of the Bank’s assets, as they are directly and strictly connected to evolution in the DRL business.

Past due loans totalled 41,7 million Euro, compared with 112,8 million Euro for the previous financial year. It should be noted that net past due loans refer for 6 million Euro (44,5 million Euro at the end of 2012) to receivables due from the Public Administration purchased outright within the factoring activity. Given the debtors and the quality of credit, we believe these positions are not subject to analytical impairment. Furthermore, those positions, based on current regulations and contract law, bear interest on arrears. The Bank, based on historical data and available information, estimates that at least 20% of interest on arrears can be recovered starting from the estimated collection date. 

During 2013, the Bank assessed its operating instruments, currently under development and consistent with business, accounting and IT processes, intended to support the management of the ATD product and, therefore, the monitoring of the relevant interest on arrears; those will be recognised based on collection estimates starting from 2014, once the mentioned operating instruments are fully implemented. As for the financial statements at 31 December 2013, in light of the above considerations, the Bank did not recognise interest on arrears in profit or loss, but deemed it appropriate to disclose the amount likely to be collected at the reporting date, totalling at least 2,5 million Euro.

Overall, and therefore accounting for the result of the DRL sector, the ratio of net non-performing loans to loans rose from 5% to 5,1%, while that of substandard loans to loans fell from 8,9% to 5,4%. The ratio of total net impaired assets to loans dropped from 19,2% at the end of 2012 to 12,7% at 31 December 2013.

IMPAIRED ASSETS
(in thousands of Euro)
NON PERFORMING(1) SUBSTANDARD RESTRUCTURED PAST DUE TOTAL
BALANCE AT 31.12.2013  
Gross amount 301.685 133.742 9.395 42.432 487.254
Incidence on gross total receivables 12,1% 5,3% 0,4% 1,7% 19,5%
Adjustments 183.877 10.506 1.044 774 196.201
Incidence on gross value 60,9% 7,9% 11,1% 1,8% 40,3%
Net amount 117.808 123.236 8.351 41.658 291.053
Incidence on net total receivables 5,1% 5,4% 0,4% 1,8% 12,7%
BALANCE AT 31.12.2012  
Gross amount 238.071 229.814 9.048 113.249 590.182
Incidence on gross total receivables 9,7% 9,4% 0,4% 4,6% 24,1%
Adjustments 122.820 25.620 1.138 429 150.007
Incidence on gross value 51,6% 11,1% 12,6% 0,4% 25,4%
Net amount 115.251 204.194 7.910 112.820 440.175
Incidence on net total receivables 5,0% 8,9% 0,3% 4,9% 19,2%
(1) Non-performing loans are recognised in the financial statements up to the point in which all credit collection procedures have been entirely completed.

Focusing on the only significant sector, i.e. the Trade Receivables sector, the ratio of net non-performing loans to loans fell from 4.3% to 2,6%, while that of net substandard loans to loans from 7,7% to 3,2%. The ratio of total net impaired assets to loans dropped from 18,8% at the end of 2012 to 8,4% at 31 December 2013.

IMPAIRED TRADE RECEIVABLES
(in thousands of Euro)
NON PERFORMING(1) SUBSTANDARD RESTRUCTURED PAST DUE TOTAL
BALANCE AT 31.12.2013  
Gross amount 234.681 72.302 9.395 42.432 358.810
Incidence on gross total receivables 11,0% 3,4% 0,4% 2,0% 16,8%
Adjustments 183.877 10.506 1.044 774 196.201
Incidence on gross value 78,4% 14,0% 11,1% 1,8% 54,5%
Net amount 50.804 61.796 8.351 41.658 162.609
Incidence on net total receivables 2,6% 3,2% 0,4% 2,1% 8,4%
BALANCE AT 31.12.2012
Gross amount 199.531 161.744 9.048 113.249 483.572
Incidence on gross total receivables 10,3% 8,4% 0,5% 5,9% 25,0%
Adjustments 122.820 25.620 1.138 429 150.007
Incidence on gross value 61,6% 15,8% 12,6% 0,4% 31,0%
Net amount 76.711 136.124 7.910 112.820 333.565
Incidence on net total receivables 4,3% 7,7% 0,4% 6,4% 18,8%
(1) Non-performing loans are recognised in the financial statements up to the point in which all credit collection procedures have been entirely completed.

Intangible assets and property, plant and equipment and investment property

Intangible assets totalled 6,4 million Euro, against 5,7 million Euro at 31 December 2012 (+11,9%). The item refers to software (5,5 million Euro) and goodwill (0,8 million Euro) arising from the consolidation of the investment in IFIS Finance Sp. Z o.o.

Property, plant and equipment and investment property increased by 1,9% to 40,7 million Euro.

The property classified under property, plant and equipment and investment property mainly includes: the important historical building Villa Marocco, located in Mestre (Venice) and housing Banca IFIS’s registered office, and the property in Mestre (Venice), where some of the Bank’s Services were recently relocated to.

The carrying amount of the property above has been confirmed by experts specialising in the appraisal of luxury property. Villa Marocco is not depreciated as its estimated residual value at the end of its useful life is expected to be higher than its carrying amount.

The head office of the DRL business area in Florence, which was acquired under a finance lease, was recognised at 4.143 thousand Euro.

Tax assets and liabilities

These items include current and deferred tax assets and liabilities.

Deferred tax assets, amounting to 34 million Euro at 31 December 2013 (24,6 million Euro at 31 December 2012), refer for 32,4 million Euro to impairment losses on receivables which can be deducted in the following years.

Deferred tax liabilities, amounting to 16,3 million Euro at 31 December 2013, refer for 6,7 million Euro to the fair value measurement of tax receivables of the former subsidiary Fast Finance S.p.A., which was carried out at the time of the business combination, and for 7,7 million Euro to taxes on the valuation reserve for AFS securities held in the portfolio.

Funding

Funding, net of the retail component, shall be analysed in a comprehensive manner based on market trends: it consists of wholesale funding through repurchase agreements (classified under payables due to customers, as they are concluded on the MTS platform and therefore without a direct banking counterparty), refinancing transactions on the Eurosystem, and short-term treasury transactions with other lenders.

FUNDING
(in thousands of Euro)
YEAR CHANGE
2013 2012 ABSOLUTE %
Due to customers: 4.178.276 7.119.008 (2.940.732) (41,3)%
Repurchase agreements 263.670 4.039.330 (3.775.660) (93,5)%
Rendimax 3.817.745 3.046.172 771.573 25,3%
Contomax 50.342 - 50.342 n.a.
Other payables 46.519 33.506 13.013 38,8%
Due to banks: 6.665.847 557.323 6.108.524 1096,0%
Eurosystem 6.656.465 500.0000 6.156.465 1231,3%
Other payables 9.382 57.323 (47.941) (83,6)%
Total funding 10.844.123 7.676.331 3.167.792 41,3%
 

Total funding, which amounted to 10.844,1 million Euro at 31 December 2013, up 41,3% compared to 31 December 2012, is represented for 38,5% by Payables due to customers and for 61,5% by Payables due to banks.

The significant increase in Payables due to banks compared to the end of the previous year is due to the fact that the Bank entered into more repurchase agreements through Eurosystem auctions, rather than using the MTS platform and the Cassa di Compensazione e Garanzia as counterparty (classified as payables due to customers). The Bank turned to the ECB, rather than the MTS platform, exclusively because the former was more convenient. The tensions observed in the liquidity market towards the end of the year, causing interest rates on the MTS platform to rise slightly, made it more convenient to turn to the Eurosystem. In 2014, as the tensions gradually eased, the Bank returned to operate almost exclusively on the MTS platform.

Payables due to customers at 31 December 2013 totalled 4.178,3 million Euro, (-41,3% compared to 31 December 2012). The decrease from the end of the previous year was mainly due to the lower use of repurchase agreements with underlying government bonds and the Cassa di Compensazione e Garanzia as counterparty, amounting to 263,7 million Euro at the end of the period (against 4.039,3 million Euro at the end of 2012, -93,5%). Retail funding continued to grow, through both the online rendimax savings account, which reached 3.817,8 million Euro (+25,3% compared to the end of 2012) and the launch of contomax, the low-cost online current account with high returns, contributing 50,3 million Euro

Payables due to banks, which totalled 6.665,8 million Euro (compared to 557,3 million Euro at December 2012), mainly consisted of funding from refinancing operations on the Eurosystem for 6.656,5 million Euro, sharply rising from 500 million Euro at the end of 2012. These operations were carried out using the debt securities held in the portfolio. The remainder of payables due to banks consists of 9,4 million Euro in interbank deposits (-83,6% compared to the end of 2012).

Provisions for risks and charges

PROVISIONS FOR RISKS AND CHARGES
(in thousands of Euro)
YEAR CHANGE
2013 2012 ABSOLUTE %
Legal disputes 375 1.355 (980) (72,3)%
Tax litigation - 194 (194) (100,0)%
FITD provisions (Deposit Protection Fund) 158 - 158 100,0%
Total provions for risks and charges 533 1.549 (1.016) (65,6)%

Legal disputes

The provision outstanding at 31 December 2013, amounting to 375 thousand Euro, refers to two disputes. For the first, in 2012 the Bank made a provision of 330 thousand Euro for the settlement, which is considered to be likely, of a lawsuit brought by an account debtor which sued the Bank and asked for revenues amounting to 859 thousand Euro to be returned, alleging they were related to non-existing receivables; for the second, at 31 December 2013 the Bank set aside 45 thousand Euro for a lawsuit related to employees naming Banca IFIS as defendant.

At 31 December 2012, there was also a 1.025 thousand Euro provision that the Bank had previously made, supported by the legal opinion of its lawyers, for the settlement of a dispute with a former customer's receiver. The latter sued the Bank, demanding that the factoring contract be declared null and void, that sales could not be objected, and pursuant to Article 67, Para. 1 and 2 of the Bankruptcy Law and Article 2901 of the Italian Civil Code, that sales occurred during the year and in the six-month period before bankruptcy be revoked, for an amount of 4.923 thousand Euro. The lawsuit ended in the first quarter of 2013 in a settlement and with the write-off of the provision made. 

Overall, the Bank recognises contingent liabilities totalling 8,1 million Euro in claims, represented by four preference and fraudulent conveyance actions as part of bankruptcy proceedings and five lawsuits naming the Bank as defendant; supported by the legal opinion of its lawyers, the Bank made no provisions for these positions, as the risk of defeat is low.

Tax disputes

Concerning the provision for risks and charges related to the tax dispute, amounting to 194 thousand Euro at 31 December 2012, during 2013 the Bank used it to pay the temporary enrolment in the tax register, as detailed in part B, Section 12 Provisions for risks and charges in the Notes.

Provision for the share of the Interbank Deposit Protection Fund's intervention

Italy's Interbank Deposit Protection Fund (FITD, Fondo Interbancario di Tutela dei Depositi), of which Banca IFIS is a member, in 2013 approved a rescue loan to Banca Tercas, based in Ascoli Piceno.

The Fund definitely calculated only part of the rescue loan; therefore, Banca IFIS recognised the part already determined, amounting to 667 thousand Euro, under other operating expenses, and allocated 158 thousand Euro, i.e the amount it estimates it may be required to pay, to the provision for risks. Based on the outcome of the due diligence of Banca Tercas’s assets, The FITD may ask the Bank to contribute up to a further 1,2 million Euro, on top of the amount already set aside.

Capital adequacy and solvency ratios

Consolidated equity at 31 December 2013 was 380,3 million Euro, compared to 309 million Euro at 31 December 2012. The breakdown of the item and the change compared to the previous year are detailed in the tables below.

EQUITY: COMPOSITION
(in thousands of Euro)
AMOUNTS AT CHANGE
31.12.2013 31.12.2012(1) ABSOLUTE %
Capital 53.811 53.811 - 0,0%
Share premiums 75.560 73.188 2.372 3,2%
Valuation reserve: 10.959 759 10.200 1343,9%
- AFS securities 15.980 5.272 10.708 203,1%
- TFR post-employment benefit (76) (152) 76 (50,0)%
- exchange differences (4.945) (4.391) (554) 12,6%
- coverage of financial flows - 30 (30) (100,0)%
Reserves 163.055 104.371 58.684 56,2%
Treasury shares (7.903) (1.340) (6.563) 489,8%
Profit for the period 84.841 78.228 6.613 8,5%
Equity 380.323 309.017 71.306 23,1%
(1) Data restated after initial publication. See the Introductory notes on how to read the data.

EQUITY:CHANGES
(in thousands of Euro)
YEAR 2013
Equity at 31.12.2012 309.017
Increases: 100.361
Profit for the year 84.841
Sale of treasury instruments 4.736
Change in valuation reserve: 10.784
- AFS securities 10.708
- TFR post-employment benefit 76
Decreases: 29.055
Dividends distributed 19.538
Purchase of treasury instruments 8.927
Change in valuation reserve: 584
- exchange differences 554
- coverage of financial flows 30
Other variations 6
Equity al 31.12.2013 380.323
 

The change in the valuation reserve for AFS securities mainly refers to the effects of the fair value measurement of government bonds held in the portfolio.

The change in the currency translation reserve refers mainly to exchange differences deriving from the consolidation of the subsidiary IFIS Finance Sp. Z o.o.

CAPITAL ADEQUACY RATIOS
(in thousands of Euro)
YEAR
31.12.2013 31.12.2012
Regulatory capital    
Tier 1 capital 332.851 282.144
Tier 2 capital (4.720) (4.216)
Deductibles -  
Total capital 328.131 277.928
Prudential regulatory requirement    
Credit risk 160.952 149.343
Market risk 2.333 1.784
Operating risk 31.403 23.608
Total prudential requirements 194.688 174.735
Solvency ratios    
Tier 1 capital/total weighted assets 13,68% 12,92%
Total capital/Total weighted assets 13,48% 12,72%
Capital surplus in excess of minimum requirements 133.443 103.193
 

Pursuant to Bank of Italy’s Regulation dated 18 May 2010, the Banca IFIS Group calculated its regulatory capital at 31 December 2013 by adopting the so-called “symmetric filter”, which allows to neutralize both gains and losses on securities issued by the Central Administrations of EU Member States. The net amount of the item was 15,6 million Euro, included under available for sale financial assets, as if those securities were measured at cost.

RECONCILIATION OF EQUITY TO REGULATORY CAPITAL
(thousands of Euro)
31.12.2013
Equity 380.323
Adjustments: (52.192)
- sterilisation of AFS gains on debt securities from Central Administrations (15.552)
- 50% net gains on equity securities from intermediaries (224)
- dividend estimate (30.055)
- goodwill (837)
- intangible assets (5.524)
Regulatory capital 328.131
 
   

BANCA IFIS SPA P. IVA n. 02992620274