REG - Banca S.P.A. - Q1 2020 CONSOLIDATED FINANCIAL RESULTS

BFF Bank SpAAnnouncement

11/05/2020 08:05

RNS Number : 3587M
  
Banca Farmafactoring S.P.A.
  
08 May 2020
  
 

PRESS RELEASE
 
BFF BANKING GROUP 1Q 2020 CONSOLIDATED FINANCIAL RESULTS
Today the Board of Directors of Banca Farmafactoring S.p.A. approved the 1Q 2020 consolidated financial accounts.
 
Highlights:
·   Confirmed the intention to distribute the €70.9m of 2019 Expected Cash Dividend (equivalent to €0.415 DPS) as soon as the regulators allow. One of the few banks that did not change its dividend policy. Additional €23m free capital generated in the quarter
·   €23.1m Reported Net Income (€20.8m of Adjusted Net Income), with 31% of Adjusted RoTE and -€3.6m of net LPIs over-recovery[1]
·   The stock of unrecognized off-balance sheet LPIs increased by €31m y/y to €408m
·   Net Customer Loans up by 8% y/y at €3.7bn, of which 37% outside Italy vs. 34% at the end of Mar-19
·   New business grew by 30% y/y at €1.2bn, with Italy and Spain up by 8% and 107% y/y
·   Available funding increased by 22% y/y at €4.0bn. Increased available undrawn credit lines to €0.7bn (+115% y/y), which provides higher flexibility to absorb a higher loan growth or longer collections times
·   Sound liquidity ratios, with LCR at 326.3% and NSFR at 110.3% at the end of Mar-20 (140.1% fully phased in)
·   Total Capital and CET1 ratios[2] at 15.3% and 11.2% - excluding both €70.9m of 2019 Expected Cash Dividend and €23.1m of Reported Net Income for 1Q20 - well above SREP requirements
·   Strong reduction in net NPLs (-45% y/y and -14% vs. YE19, excluding Italian municipalities in conservatorship), with the Net NPLs/Loans ratio down to 0.1%
·   Annualised Cost of Risk at 4bps, 2bps excluding the SME factoring business in run-off
·   COVID-19 emergency: fully operational since the beginning of the lockdown. No need to benefit from any emergency aids made available. Good client pipeline and collections volume. LPIs collection potentially effected by PA and courts lockdown
 
Milan, 8th May 2020 - Today the Board of Directors of Banca Farmafactoring S.p.A. (BFF) approved the first quarter 2020 consolidated financial accounts. All the 1Q 2020 figures (both adjusted and reported) include for the entire period IOS Finance, merged on 31/12/2019, while it is excluded from 1Q 2019 figures.
 
KEY CONSOLIDATED ACCOUNTS ITEMS[3]
 
Main Balance Sheet data
At the end of Mar-20 Net Customer Loans were up by 8% y/y (+9% at constant Euro/zloty FX rate) to €3,738m (of which €859m related to BFF Polska Group), compared to €3,461m at the end of Mar-19 (of which €767m related to BFF Polska Group). Loans in Italy grew by 3% y/y (from €2,288m to €2,346m) and the Spanish portfolio in 1Q20, including IOS Finance, was equal to €387m (+87% y/y excluding IOS Finance for 1Q19, +40% y/y including IOS Finance for 1Q19). Despite the Euro/Zloty FX depreciation in the last days of the quarter, loans in Poland were up by 12% y/y at €674m (+19% y/y at constant FX rate). International markets (Spain, Portugal, Poland, Slovakia, Czech Republic, Greece, Croatia and France) represented 37% of Net Customer Loans in 1Q20, up from 34% at the end of Mar-19. 
The Group recorded overall New Business Volume of €1,172m (of which €157m related to BFF Polska Group), +30% compared to 1Q19 (€900m, of which €89m of BFF Polska Group), mainly driven by higher volume in Spain (+107% y/y excluding IOS Finance for 1Q19 and +41% y/y including IOS Finance for 1Q19) and in Poland (+75% y/y). Resumed growth in Italy with +8% y/y and in Slovakia (€5m vs. €1m in 1Q19). Greece contributed for €17m and France for €1m. Portugal was down by 46% y/y driven by Government cash injection. Positive trend confirmed also in April, with volume up by 77% y/y (+39% y/y over the first 4 months of 2019) and with a solid pipeline across the countries for the next quarters.
The Total Available Funding[4] of the Group increased to €4,044m as of 31/03/2020 (+22% y/y). Online deposits increased by +59% y/y to €1,384m, representing 42% of drawn funds. The Group doesn't offer current accounts, but only term deposits with no or limited prepayment options. The Group has ample excess liquidity, with undrawn Funding[5] available at the end of Mar-20 equal to €0.7bn (+115% y/y), allowing for higher flexibility to absorb a higher loan growth or longer collection times. Additionally, the Group has no funding cost linked to the Italian Government's funding cost or rating, and did not recourse to ECB TLTRO or any other emergency liquidity measure. BFF can also rely on an EMTN programme for €1.0bn, established in Nov-18 and renewed in Jan-20, to promptly benefit of the potential funding opportunities in the markets.
At the end of Mar-20, Moody's confirmed Banca Farmafactoring's ratings (including the long-term Issuer rating of "Ba1") with positive outlook, while the rating agency took negative rating actions against other 14 Italian banks. Currently, BFF is the only Italian bank with positive outlook (see also the credit opinion released by Moody's on 27th April 2020).
The Government bond portfolio (HTC and HTC&S) was equal to €1,120m at the end of Mar-20. The mark-to-market as of 31/03/2020 of the HTC portfolio was positive for €2.6m after taxes (not recognised neither in the P&L nor in the balance sheet), while for the HTC&S portfolio was negative for €0.6m after taxes (already booked in the equity). At the end of Mar-20 the duration of the entire portfolio was 26.4 months (25.7 months for the HTC portfolio and 38.4 months for the HTC&S portfolio) vs. 26.7  months (25.9 months for the HTC portfolio and 35.4 months for the HTC&S portfolio) at YE19.
The Group maintained a healthy liquidity position, with a Liquidity Coverage Ratio (LCR) of 326.3% as of 31/03/2020. The net stable funding ratio (NSFR) and the leverage ratio, at the same date, were equal to 110.3% and 5.1% respectively[6]. The NSFR of the Group is expected to be positively impacted by the new regulation (in force from 2Q 2021), which establishes more favourable weighting factors for the assets and liabilities related to factoring activities (140.1% fully phased in).
 
Main Profit and Loss data[7]
The Adjusted Net Interest Income decreased by 3% y/y and the Adjusted Net Banking Income by 2% y/y, respectively to €43m and €45m, with:
-     €2.6m of lower net LPIs over-recovery in 1Q20 vs. 1Q19;
-     higher Cost of Funding (+9bps y/y), due to the significant increase in available funding (€4.0bn, +22% y/y, of which €0.7bn are undrawn credit lines, +115% y/y), which provides higher flexibility of BFF's balance sheet to absorb a higher loan growth (i.e. up to +20% of additional loans vs. 1Q20 stock) or longer collections time.
In 1Q20 annualised Net yield[8] on average Customer Loans of the period was 4.1% vs. 4.8% in 1Q19, and the annualised Gross yield on average Customer Loans of the period was 5.7% (vs. 6.2% in 1Q19). The annualised net return on RWAs (RoRWA)[9] was 7.2% in 1Q20 vs. 7.9% in 1Q19, mainly driven by the lower net LPIs over-recovery. Excluding the net LPIs over-recovery, annualised RoRWA was equal to 7.8% in 1Q20 vs. 8.1% in 1Q19 and 7.9% in 1Q18.
Recovery of credit collection costs are accounted on a cash basis in other operating income (P&L item "230"), which increased from €1.0m in 1Q19 to €1.1m in 1Q20.
Adjusted Interest Income at €57m in 1Q20 (+3% y/y), despite €2.6m of lower net LPIs over-recovery accounted in P&L vs. 1Q19. The LPIs cashed-in were €1.6m higher in 1Q20 (€8.1m vs. €6.5m 1Q19 and €15.4 in 1Q18), with lower LPI recovery rate in 1Q20 vs. a strong 1Q19. All LPIs over-recoveries are accounted when cash-in collected and there is no sale of LPIs to third parties.
The stock of unrecognized off-balance sheet LPIs (back-book income reserve), that has not gone through the P&L yet, increased by €31m (+8% y/y) and reached €408m at the end of Mar-20. The total LPIs stock amounted to €660m before taxes (+11% y/y).
The Average Cost of Funding (excluding REPO) increased from 1.57% in 1Q19 to 1.66% in 1Q20, reflecting:
-     the issuance of the €300m 3.5Y bond at a 1.75% fixed rate in Oct-19 to prefund the business growth;
-     the decrease of the amount of wholesale credit lines drawn (currently the cheapest source of funding for BFF), which was offset by higher online deposits and bonds;
-     a higher weight of the Polish Zloty exposures.
The combination of the above has resulted in higher undrawn committed lines, from €0.3bn to €0.7bn (+115% y/y), which provides more flexibility to absorb a higher loan growth (i.e. +20% additional growth in 1Q20) and longer collections time.
The interest expenses increased by 19% y/y at €14m, driven by:
i.    the increase of average drawn funding (from €3.2bn to €3.7bn) due to the growth of the business, with a different funding mix (more deposits and less other wholesale lines);
ii.   the increase in Zloty funding, which has a higher base rate (WIBOR 6M 1.19% - down from 1.79% in Jan-20 - vs. EURIBOR 6M -0.287%) and, therefore, a higher nominal cost (BFF's Zloty funding cost is 3.23%[10]);
iii.  €1.4m of interest expenses related to the €300m bond issued in Oct-19 (not present in 1Q19).
National Bank of Poland cut the reference interest rate by 50bps on 18-Mar and an additional 50bps on 9-Apr, leading to almost an equivalent reduction of the WIBOR, with essentially no impact on 1Q20 for BFF. BFF's Zloty balance sheet has a neutral interest rate sensitivity.
BFF has no funding costs linked to Government bond yields, and no ECB refinancing risk. 
The operating leverage improved, with annualised Adjusted[11] Operating Costs/Average Loans ratio decreasing from 1.87% in 1Q19 to 1.84% in 1Q20.
Operating Costs were equal to €18m, up by 10% vs. €16m in 1Q19, as a result of:
i.    18% y/y increase in personnel costs, due to higher employee base;
ii.   2% y/y increase in other operating expenses.
Adjusted Cost/Income ratio increased to 40% (36% in 1Q19), also driven by lower net over-recoveries.
The employees at Group level increased from 462 at the end of Mar-19 (of which 199 in BFF Polska Group) to 517 at the end of Mar-20 (of which 179 in BFF Polska Group); the 338 employees of BFF, excluding BFF Polska Group, include 18 employees of IOS Finance and 30 employees transferred from BFF Polska to the Polish Branch.
Loan Loss Provisions ("LLPs") were €0.3m in 1Q20 compared to €0.02m in 1Q19. The annualised Cost of Risk was 4bps in 1Q20 (2bps excluding the Polish SME factoring business in run-off and the Italian municipalities in conservatorship) vs. 0bp in 1Q19.
1Q20 Reported Net Income was €23.1m compared to €21.4m in 1Q19, +8% y/y thanks to i) the positive impact from the change in PLN/€ exchange rate (+€4.0m in 1Q20 vs. -€0.01m in 1Q19, all numbers after taxes) and offset by a negative change in equity reserve, reflecting the natural hedging approach adopted by BFF, and despite ii) €0.8m of higher net extraordinary costs in 1Q20 vs. 1Q19 (1Q20 costs include also €1.2m of taxes on 2019 dividends distributed by the subsidiaries to the parent company in 1Q20 and €0.1m of M&A costs after taxes).
Adjusted Net Income amounted to €20.8m in 1Q20, -7% y/y vs. €22.2m in 1Q19, with €2.6m of lower net LPIs over-recovery. The RoTE[12] for 1Q20 was equal to 31% vs. 36% in 1Q19 based on the Adjusted Net Income.
 
Asset quality
The Group continues to enjoy a low risk profile. The superior asset quality is confirmed by a Net NPLs/Net Customer Loans ratio of 1.7% at end of Mar-20 (vs. 1.5% for both YE19 and end of Mar-19) and an annualised Cost of Risk of 4bps (2bps excluding the Polish SME factoring business in run-off and the Italian municipalities in conservatorship). 
The increase in net NPLs from €61.9m at end of 2019 to €64.8m at end of Mar-20 is driven entirely by the growing activities towards the Italian municipalities, with the exposure to Italian municipalities in conservatorship ("Comuni in dissesto") growing from €57.7m to €61.1m (which includes €5.8m related to Italian municipalities already in conservatorship at the time of the purchase). These exposures are classified as NPLs by regulation, despite BFF is legally entitled to receive 100% of the capital and LPIs at the end of the process. Other net NPLs were down to €3.7m (-45% y/y and -14% vs. YE19), thanks to collections, and are equivalent to 0.1% of total net loans.
The NPLs Coverage ratio net of the Italian municipalities in conservatorship increased at 78% (vs. 75% at YE19), while the Coverage ratio including also the municipalities in conservatorship is stable at 17% vs. YE19.
At the end of Mar-20 net Past Due amounted to €53.4m (€34.7m and €50.5m at the end of Dec-19 and Mar-19 respectively), of which 86% was towards the public sector (87% and 77% at the end of Dec-19 and Mar-19 respectively).
Total impaired assets (non-performing, unlikely to pay and past due) - net of provisions - was €127.0m (€106.2m at YE19 and €112.2m at the end of Mar-19) and 84% was towards the public sector (vs. 83% and 74% at the end of Dec-19 and Mar-19 respectively).
At the end of Mar-20, the residual net exposure related to BFF Polska Group's SME factoring business placed in run-off at the end of 2017 (entirely classified as net impaired loans), was equal to €1.6m, with a coverage ratio of 74%.
No need to apply the extension of the transition period or any other flexibility in relation to IFRS 9 allowed by the European Commission's banking package.
 
Capital ratios
As indicated in the press release issued on 31st March 2020, the Board of Directors of BFF resolved to comply with the recommendations of the European Central Bank (ECB) and Bank of Italy (addressed to all Italian banks) to refrain from making any irrevocable commitments for dividend payments for the financial years 2019 and 2020, and, in any case, to not distribute dividends prior to 1st October 2020, after the reassessment of the COVID-19 emergency. The Board resolved to adopt Option 1 indicated by the ECB, namely confirming the dividend policy, but making the 2019 dividend distribution proposal conditional to the resolution of the COVID-19 emergency. Therefore, the €70.9m of 2019 Expected Cash Dividend have not been included in the regulatory capital calculations for both FY19 and 1Q20.
The Group maintains a solid capital position and confirms its ability to organically fund growth, with a CET1 ratio of 11.2% (vs. a SREP, including Capital Conservation Buffer, of 7.85%, which increased by 5bps vs. 2019 following the completion of the review process by the regulatory authority) and a Total Capital ratio of 15.3% (above the Company's target of 15% for the dividend policy and above a SREP, including Capital Conservation Buffer,  of 12.05%, which increased by 5bps vs. 2019), calculated on the Banking Group perimeter (pursuant to TUB - Testo Unico Bancario)[13]. Both ratios exclude the 2019 Expected Cash Dividend of €70.9m (equal to 299bps of additional capital) and €23.1m of Reported Net Income for 1Q20 (equal to 98bps of additional capital). 
The RWAs are based on the Basel Standard Model and, therefore, the risk weighting factors for the exposures towards NHS and other PA different from local and central Government depend on the Sovereign Rating of each country. Since DBRS (BFF's ECAI - External Credit Assessment Institution) rating for Italy and Portugal is "BBB (High)", the Italian and Portuguese exposure to NHS and other PA (different from local and central Government) is risk weighted at 100%. Consequently, Italy and Portugal need to be downgraded by 9 notches (i.e. 4 notches below Greece) in order to have a negative impact on the risk weighting factor for the Italian and Portuguese exposure to NHS and other PA. On the other side, one notch upgrade of Italy would move the risk weighting on the Italian exposure to the NHS and other PA (different from local and central Government) from 100% to 50%, with a 2.4% increase on CET1 ratio and 3.2% on Total Capital ratio; one notch upgrade by DBRS on Portugal rating would move the risk weighting from 100% to 50% as well, with a positive impact of 0.2% on CET1 ratio and 0.3% on Total Capital ratio. 
Two notches downgrade of Spain would have no impact on RWA, since all the exposures are classified as exposures towards central or local government, therefore not linked to the sovereign rating.
The RWAs density[14] is lower y/y, 63% at the end of Mar-20 vs. 64% at the end of Mar-19, thanks to a better loan mix (59% at the end of Dec-19).
***
COVID-19: impact on BFF business
BFF has been fully operational since the beginning of the lockdown, with no impact on the operations and commercial activity. In particular:
·    No negative impact on day-to-day operations, given that almost all BFF employees are working remotely.
·    Limited impact on the commercial activity, given the low level of physical interaction needed and the long-term relationships with clients.
·    Continued to file new legal actions, even if courts have been closed in Italy since 9-Mar. To date, no significant delay in collections from debtors, however arrangements with debtors are more difficult.
·    Guaranteed access to funding to support an acceleration in volume and loan growth, with €0.9bn of liquidity buffer between committed and undrawn credit lines (for €0.7bn), cash and unencumbered bonds.
 
COVID-19: potential impact on BFF's financial performance if the emergency persists
If this situation persists, BFF could benefit from a potential increase in client demand and longer Days of Sales Outstanding (DSOs). However, the worsening of public finances and the interruption of the court's legal processes could delay the cash collection of LPIs (i.e. lower LPIs over-recovery), which translates into higher off-balance LPIs stock and, therefore, higher net income in the future. In particular:
·   Potential increase in volume driven by (i) a public expenditure in goods and services expected to be stable or growing; (ii) a higher demand from customers given their increased focus on liquidity and expectation of a lengthening of the DSOs; and (iii) a further upside from the probable termination of the VAT Split Payment from July 2020.
·   Potential increase in customer loans driven by (i) the above trend in volume and (ii) the possible increase in PA payment times (DSOs) due to a worsening of the public finances (therefore, larger loan book for the same amount of volume).
·   No impact on capital, given the very low risk of an increase in RWAs due to a downgrade of the sovereign rating (see above paragraph on capital ratios).
·   Loans yield (excluding net LPIs over-recovery) could be positively affected by the lower price sensitivity of the customers, but negatively affected by the lower yield on BFF Polska's portfolio, due to a reduction of WIBOR - which would be more than offset by the reduction of the related cost of funding in Zloty. However, if lockdown persists, the loan yield could be negatively impacted by (i) a potential  lower cash-in of LPIs (therefore, lower LPIs over-recovery, but higher off-balance stock of LPI, i.e. future income), and (ii) lower collections (therefore, higher rescheduling impact on current outstanding).
·   Potential decrease of the Cost of funding/Loans ratio given that (i) BFF has already guaranteed access to funding in support to the potential increase in growth, and (ii) the cost of funding in Zloty would decrease as a result of the WIBOR reduction, which more than offset the impact on yield (i.e. expected overall positive impact on net result from the WIBOR reduction).
·   The operating leverage could improve, given that (i) BFF has already invested to sustain further growth and the infrastructure is not saturated yet; and (ii) costs are mostly fixed or geared to volume, therefore the loans increase due to the end of the Split Payment or longer DSOs has no impact on costs.
·   Limited/no impact on the cost of risk, given (i) BFF's exposure is essentially towards PA, and (ii) the high quality of BFF's clients (mainly international and large national companies).
·   Confirmed a RoTE target > 30%, on a solid capital base with a growing CET1 ratio and as a % of the TC ratio (i.e. lower leverage).
 
Update on the legal and regulatory environment: measures and potential impact for BFF
·   Expected no impact on operations and commercial activities, but possible delay on collection due to lockdown measures.
·   Possible slowdown in collections in case the liquidity measures to local entities are not sufficient to offset lower revenues from local taxes.
·   Limited impact from the state-guaranteed loans and other financial package made available by governments to corporates, especially for SMEs, given that BFF's clients are mostly multinational or large corporate.
·   No need for BFF to apply regulatory authorities' flexibility measures to mitigate the impact of the COVID-19 emergency, given its solid capital position and funding base.
***
Significant events after the end of the first quarter 2020 reporting period
·   On 2nd April 2020, the Shareholders' Meeting of BFF S.p.A. met in a single call and in both ordinary and extraordinary session and:
1)     confirmed the appointment as Director of Ms. Giorgia Rodigari, already co-opted on 11th December 2019;
2)     appointed KPMG S.p.A. as independent auditor for the financial years 2021-2029;
3)     approved the Annual report on remuneration policy;
4)     approved the new Stock Option Plan 2020 (SOP 2020);
5)     authorised the Board of Directors to purchase and dispose treasury shares up to 8,323,880 BFF ordinary shares;
6)     resolved to increase the share capital free of charge, to be carried out in several tranches, by the deadline of 31st December 2028, with the issue of a maximum of 6,824,108 ordinary shares, for an amount up to Euro 5,254,563.16, for needs related to the Company's remuneration and incentive policies, including the SOP 2020.
***
Statement of the Financial Reporting Officer
The Financial Reporting Officer, Carlo Zanni, declares, pursuant to paragraph 2 of article 154bis of the Consolidated Law on Finance ("Testo Unico della Finanza"), that the accounting information contained in this press release corresponds to the document results, books and accounting records of the Company.
***
Earnings Call
The 1Q 2020 results will be presented today at 12:30 CEST (11:30 WEST) during a conference call, which can be followed either by dialling the numbers or by clicking on the audio link indicated in the invitation published in the Investors > Key Figures section of the Group website (investor.bffgroup.com/en/key-figures).
***
This press release is available on-line on BFF Group's website www.bffgroup.com within the section Investors > Press Releases.
 
BFF Banking Group
BFF Banking Group, listed on the Milan Stock Exchange since 2017, is the leading player specialised in the management and non-recourse factoring of trade receivables due from the Public Administrations in Europe. The Group operates in Italy, Croatia, Czech Republic, France, Greece, Poland, Portugal, Slovakia and Spain. It is also active in Germany, The Netherlands and Ireland with on-line term deposits, by serving a total of 12 Countries across Europe. In 2019 it reported a consolidated Adjusted Net Profit of € 98.8 million, with a 11.2% Group CET1 ratio at the end of March 2020. www.bffgroup.com
 
Contacts




Investor Relations
Enrico Tadiotto, Claudia Zolin
investor.relations@bffgroup.com
+39 02 49905 458 | +39 02 49905 620
+39 338 5772272


Media Relations
Alessia Barrera, Gianluca Basciu
newsroom@bffgroup.com
+39 02 49905 616 | +39 02 49905 623
+39 340 3434065




***
 
 
Consolidated Balance Sheet (Values in €)
 




Assets


31/12/2019


31/03/2020




Cash and cash equivalents


78,305,302


65,635,120




Financial assets measured at fair value through profit or loss


 


 




a) financial assets held for trading


 


 




b) financial assets designated at fair value


 


 




c) other financial assets mandatorily measured at fair value


 


 




Financial assets measured at fair value through OCI 


82,911,963


59,476,645




Financial assets measured at amortized cost


5,250,716,578


4,932,897,418




a) Due from banks 


136,679,774


134,504,704




b) Due from customers


5,114,036,805


4,798,392,714




Hedging instruments 


 


 




Equity investments


94,437


141,740




Property, plant and equipment


17,109,160


17,346,283




Intangible assets of which:


35,268,054


34,945,676




-  goodwill


30,874,236


30,874,236




Tax assets


35,059,591


36,253,859




a)  current


23,493,938


24,791,474




b) deferred 


11,565,653


11,462,385




Other assets


11,561,531


19,095,620




Total Assets


5,511,026,616


5,165,792,361




 
 




Liabilities and Equity


31/12/2019


31/03/2020




Financial liabilities measured at amortized cost 


4,962,195,474


4,526,100,467




a) deposits from banks


1,142,840,644


906,152,143




b) deposits from customers


2,713,662,678


2,625,639,377




c) securities issued


1,105,692,152


994,308,947




Financial Liabilities Held for Trading


 


 




Financial liabilities designated at fair value


 


 




Hedging derivatives


 


 




Tax liabilities


98,999,134


107,628,034




a)  current


28,882,984


33,219,347




b)  deferred


70,116,150


74,408,687




Other liabilities


65,324,506


131,045,360




Employee severance indemnities 


843,205


714,369




Provisions for risks and charges:


6,412,030


6,012,335




a)  guarantees provided and commitments


580,428


564,774




b)  pension funds and similar obligations


4,313,009


4,176,344




c)  other provisions 


1,518,593


1,271,217




Valuation reserves 


6,569,790


345,442




Reserves


147,269,189


239,895,136




Share premium 


693,106


693,106




Share capital 


131,326,409


131,364,092




Treasury shares 


(1,762,756)


(1,130,172)




Minority interests


 


 




Profit for the year


93,156,528


23,124,190




Total Liabilities and Equity


5,511,026,616


5,165,792,361




 
 
Consolidated Income Statement (Values in €)
 




Profit & Loss items


1Q 2019


1Q 2020




Interest and similar income


55,868,129


57,413,623 




Interest and similar expenses


(11,460,701)


(14,124,347)




Net interest income


44,407,429


43,289,276 




Fee and commission income


1,708,537


1,614,062 




Fee and commission expenses


(418,858)


(457,674)




Net fees and commissions


1,289,679


1,156,388 




Dividend income and similar revenue


 


(0)




Gains (Losses) on trading


(15,114)


5,894,029 




Fair value adjustments in hedge accounting


 


 




Gains (Losses) on disposals/repurchases of:


31,109


77,390 




a) financial assets measured at amortized cost


 


56,001 




b) financial assets measured at fair value through OCI


31,109


21,389 




Net banking income


45,713,103


50,417,082




Impairment losses/reversals on:


22,913


(327,843)




a) receivables and loans


21,261


(331,819)




b) available-for-sale financial assets


1,652


3,976 




Net profit from banking activities


45,736,015


50,089,240 




Net profit from financial and insurance activities


45,736,015


50,089,240 




Administrative expenses:


(16,397,835)


(17,197,900)




a) personnel costs


(9,069,323)


(9,838,810)




b) other administrative expenses


(7,328,512)


(7,359,090)




Net provisions for risks and charges:


(391,367)


248,888 




a)  guarantees provided and commitments


(67,462)


(171,079)




b)  pension funds and similar obligations


(323,905)


419,967 




Net adjustments to/writebacks on property, plant and equipment


(691,993)


(905,133)




Net adjustments to/writebacks on intangible assets


(475,285)


(517,853)




Other operating income/expenses


997,356


1,095,912 




Operating expenses


(16,959,123)


(17,276,086)




Profit before tax from continuing operations


28,776,892


32,813,153 




Income taxes on profit from continuing operations


(7,343,530)


(9,688,963)




Profit after taxes from continuing operations


21,433,362


23,124,190 




Profit for the year


21,433,362


23,124,190 




Profit for the year attributable to owners of the Parent Company


21,433,362


23,124,190 




 
 
Consolidated Capital Adequacy - BFF Banking Group ex TUB
 




Values in €m


31/03/2019


31/12/2019
(excluding the 2019 Expected Cash Dividend)


31/03/2020




Credit and Counterparty Risk


148.7


160.6


157.1




Market Risk


0.0


0.0


0.0




Operational Risk


29.6


32.5


32.5




Total Capital Requirements


178.3


193.1


189.6




Risk Weighted Assets (RWAs)


2,229.1


2,413.6


2,369.8




 


 


 


 




CET I


248.5


263.9


265.3




Tier I


0.0


0.0


0.0




Tier II


98.2


98.2


98.2




Own Funds


346.8


362.1


363.5




 


 


 


 




CET 1 Capital ratio


11.1%


10.9%


11.2%




Tier I Capital ratio


11.1%


10.9%


11.2%




Total Capital ratio


15.6%


15.0%


15.3%




 
 
Asset quality - Reported data
 




 


31/03/2020




€ 000


Gross


Provision


Net




Non-performing loans (NPLs)


78,010


(13,219)


64,792




Unlikely to pay


10,718


(1,925)


8,793




Past due


53,600


(160)


53,440




Total impaired assets


142,328


(15,304)


127,024




 


 


 


 




 


31/12/2019




€ 000


Gross


Provision


Net




Non-performing loans (NPLs)


74,944


(13,001)


61,943




Unlikely to pay


11,836


(2,310)


9,526




Past due


34,780


(88)


34,691




Total impaired assets


121,560


(15,400)


106,160




 


 


 


 




 


31/03/2019




€ 000


Gross


Provision


Net




Non-performing loans (NPLs)


76,022


(24,741)


51,281




Unlikely to pay


13,083


(2,687)


10,396




Past due


50,949


(428)


50,521




Total impaired assets


140,054


(27,856)


112,198




 
 
 
 
This announcement has been issued through the Companies Announcement Service of Euronext Dublin.
 

 


[1] LPIs over-recovery vs. 45% minimum recovery rate assumed for accounting purpose, net of the re-scheduling impact. Re-scheduling impact: for receivables not collected within the expected maximum collection date, interest income is reduced by the amount of yield required to keep the IRR of the portfolio constant until the new expected collection date. In particular, the value of the credit on the balance sheet is re-calculated using the new expected cash-flow schedule and the negative delta in value is booked in the P&L to maintain the original IRR.


[2] Calculated on the Banking Group perimeter (pursuant to TUB - Testo Unico Bancario).


[3] 1Q20 exchange rate for Poland and Czech Republic respectively PLN/€ 4.3241 and PLN/CZK 0.169 for P&L data (1Q20 average), PLN/€ 4.5506 and PLN/CZK 0.167 for Balance Sheet data (31st March 2020).
1Q19 exchange rate for Poland and Czech Republic respectively PLN/€ 4.3016 and PLN/CZK 0.167 for P&L data (1Q19 average), PLN/€ 4.3006 and PLN/CZK 0.167 for Balance Sheet data (29th March 2019).


[4] Excluding ECB funds REPOs and not considering financing for BFF Polska Group and IOS Finance acquisitions, respectively PLN 378m and €26m.


[5] Based on utilised credit lines.


[6] Calculated on the Banking Group perimeter (pursuant to TUB - Testo Unico Bancario). 


[7] Adjusted P&L numbers exclude:
· €4.0m after taxes (€5.6m before taxes) positive impact in P&L in 1Q20 (negative impact of €0.01m after taxes and €0.02m before taxes in 1Q19) due to the change in PLN/€ exchange rate on the acquisition loan for the purchase of BFF Polska Group, which is offset by a negative change in equity reserve (included in the capital ratios), reflecting the natural hedging between these two balance sheet items;
· €1.2m of current taxation charges arising from the one-off distribution of the2019 dividends distributed by the subsidiaries to the Parent Company BFF in 1Q20;
· €0.3m after taxes (€0.4m before taxes) costs in 1Q20 (€0.8m after taxes and €1.1m before taxes in 1Q19) related to the Stock Option Plan 2016 and the Stock Grant 2019. This item generates a positive equity reserve, with therefore no impact on Group's equity;
· M&A costs of €0.1m after taxes (€0.1m before taxes) in 1Q20.


[8] Adjusted Net Interest Income excluding income on securities and on credits due from banks, and REPO activity impact.


[9] Calculated as Adjusted Net Interest Income/Average RWAs (beginning and end of the period).


[10] Excluding the financing cost for the acquisition of BFF Polska Group of PLN 378m.


[11] Adjusted to exclude extraordinary costs.


[12] RoTE is calculated on the average tangible equity, including earnings of the period net of the 2019 Expected Cash Dividend.


[13] Considering the CRR Group perimeter, including the parent company BFF Luxembourg S.à r.l., the CET1 ratio is 14.2% and the Total Capital ratio 18.3%. These ratios are subject to approval of the BFF Luxembourg accounts.


[14] Calculated as RWAs/Customer Loans.



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