- CREDITI FISCALI
Credi Impresa Futuro
Banca IFIS developed a new project, introducing also a new brand, to foster the growth of trade finance loans to Italian SMEs: Credi Impresa Futuro. The multi-channel service and real-time continuous support are the strengths of this initiative. The web is the preferred contact method, allowing to easily assess the possibility of providing a loan to those requiring one.
The advanced use of CRM and social media platforms are the ingredients of a formula which is further proof of the Bank’s pioneering spirit.
In the last 3 months of 2013 alone, 3.800 companies received financing and custom-tailored solutions aimed at resolving specific working capital financing problems through the factoring of trade receivables. In particular, Banca IFIS managed to address the needs of companies that boast supply relationships with customers of good credit standing. Banca IFIS was the first in providing factoring, a service usually required by large businesses, to SMEs: this allowed the Bank to finance companies by transferring the credit risk to their customers, i.e. to the account debtors. The assessment and authorisation criteria used by the Bank and related to this financial instrument focus on the credit quality and the productive capacity of the company, rather than exclusively on its equity, allowing Banca IFIS to lend on the basis of its customers' ability to perform well. At the end of the year, the Bank introduced another solution allowing to considerably streamline operations and processes. This is reserved to customers with a higher credit rating than the Bank's traditional target.
The Bank’s intervention is based on a key and constant element, i.e. factoring the customer's trade receivables and financing them in a very short time. For Banca IFIS financing a customer means providing companies with the resources to run and expand their business. However, the lending business alone is not representative of the Bank’s whole product range. Leveraging trade receivables to provide companies with the necessary support to develop involves new factors, whose mix generates intrinsically better results compared to traditional bank lending. Indeed, non-specialist banks base their credit risk analysis and their assessment of whether or not to intervene almost exclusively on the company-customer and its creditworthiness. In Banca IFIS’s approach, the focus is on the trade receivables the company-customer manages to generate and the quality of customers: this has resulted in a new way of providing credit that is more effective than the traditional approach.
For the company-customer, therefore, the relationship with Banca IFIS is not just about credit. Of course, this remains crucial, as especially small and medium-sized enterprises often need resources urgently to finance their working capital; but it is also about outsourcing accounts receivable management. Smaller companies find it cost-effective and efficient to let a specialist player such as Banca IFIS manage their accounts receivable; at the same time, larger companies consider the outsourcing of such a delicate process as managing their accounts receivable as a way to generate value.
It is also a question of monitoring the risk related to the final debtor. Banca IFIS assesses the creditworthiness of the account debtors, i.e. those that in the end must repay their trade receivables. For the Bank, this is crucial: it may decide not to act if the account debtor (i.e. the “customer” of the Bank's customer) does not meet the necessary credit requirements.
Therefore, Banca IFIS’s intervention is not exclusively about trade finance. Besides credit, we provide a service to manage accounts receivable and to assess customers' creditworthiness which makes it extremely effective for the company-customer to work with the Bank.
Banca IFIS has a widespread presence throughout Italy, with 28 branches employing over 170 professional staff responsible for managing trade relations and customer-related activities, ensuring an on-going relationship between the Bank and companies. For Banca IFIS, meeting customers at the latter’s premises is the norm, as are high in-house standards concerning the speed, effectiveness, transparency and directness of the relationship between the Bank and the customer.
Furthermore, in order to engage with its customers, the Bank maintains relations with selected, qualified institutional counterparties, such as local banks and industry trade groups. In this way, it aims to provide customers/associates with a service that is as effective as possible. The knowledge of the local area and customers, together with the business model based on factoring and mitigating the relevant credit risk, allow the Bank to maintain a relatively limited risk profile for its assets. In particular, the assets’ quality is generally better than that normally resulting from banking operations involving small and medium-sized enterprises, especially in the current economic scenario, affected by a severe recession and five years characterised by financial distress and the credit crunch. This means that the Bank – in a year in which it continued to support Italian SMEs, increasing the number of loans granted – incurred losses on receivables, but those were nonetheless lower than before and did not prevent Banca IFIS from creating value in this specific and challenging sector. Indeed, the Bank's business model and its different approach to credit risk allowed it to continue operating in favour of companies, even in the face of market conditions causing non-specialist banks to struggle in efficiently taking risks on small and medium-sized enterprises.
Banca IFIS International
Banca IFIS is one of the most active players in international factoring and stands out from the competition due to its direct presence in foreign markets, such as Poland, Romania, Hungary and, through an investee company, India, with around 30 professional staff dedicated to the Group's international business.
Banca IFIS's strength lies in its ability to act not only as a supplier of factoring services, but also as a consultant to those customers who intend to move to new markets or are looking for new operating solutions to propose to their counterparties. Thanks to its knowledge of the markets and of the various industrial sectors, the Bank can validly support the exporter in defining some contractual operational aspects.
In 2013, several countries registered increased demand for indirect factoring integrated with maturity factoring. This allows the buyer to provide its foreign suppliers with the necessary financial support and to benefit from the extension of payments terms granted by the factor, which pays the supplier at maturity. Also Banca IFIS observed an increase in demand for this service, especially in Poland.
Export Factoring is the product dedicated to Italian exporting companies and includes both recourse and non-recourse factoring. To offer the service most suited to the customer’s needs, the Bank, de
pending on the type of operation proposed and the countries involved, can intervene directly or use the services of its correspondents.
Import Factoring is the service offered to foreign companies exporting to Italy. Also in the case of import, services can be offered directly to foreign companies or to FCI correspondents. In the first case, the three services – management, guarantee against the risk of default, and financing of receivables – are almost always present, while in the case of operations notified by correspondents, the focus is usually on management and guarantee against the risk of default. It is important to stress that the Bank has been structured in such a way as to be able to enter into a direct relationship with any foreign company, except for those operating in markets with impediments to the transfer of credit.
In the business segment of non-domestic operations, two foreign counterparties are involved: the invoice seller and the account debtor. Generally, non-recourse factoring is preferred for this kind of service. Offering non-domestic operations requires a strong knowledge of the law of the countries involved, with particular reference to the conditions required to guarantee that the transfer of the receivable is valid, both for directly managed dealings and for those notified by FCI correspondents.
Banca IFIS Pharma
Over the years, Banca IFIS developed a new line of business dedicated to creating integrated management solutions for pharmaceutical companies wishing to transfer non-recourse receivables due from the National Health Service, thus allowing those customers to hedge late payment risk. Purchasing these receivables, as they are due from the Health Service, implies less exposure to the downgrade risk and returns in line with the Bank's standards.
In 2013 the Pharma business area consolidated the excellent relations established in previous years, continuing to expand its customer base and addressing the trade finance needs of large pharmaceutical companies. In 2013, the payment of the national health service’s outstanding debts to companies accelerated; however, in spite of the measures taken by the Italian government, late payments from the Public Administration continue to severely affect industry players.