Banca Ifis | Relazione e bilancio consolidato 2021
1
Consolidated
reports
2021
Banca Ifis | 2021 Consolidated financial statements and report
3
Letter from the Chairman to Shareholders
Sebastien Egon Fürstenberg
Chairman of Banca Ifis S.p.A.
Dear Shareholders,
For Banca Ifis, 2021 was a very important year, which testified to our Group's financial solidity as well as its the
managerial and industrial excellence. The ability to adapt to a new scenario and the resilience shown, combined
with the dedication and sense of responsibility of our employees, under the leadership of the new CEO, Frederik
Geertman, are the most valuable achievement produced by 2021 for the entire Bank.
Several ESG initiatives were launched in 2021, confirming the Bank's commitment to sustainable development
of our company and the territories in which we operate. The initiatives launched in the field of environmental
sustainability include Banca Ifis joining the Net-Zero Banking Alliance, the United Nations initiative that aims to
accelerate the sustainable transition of the banking sector.
We have always focused on people, aware of their great value. A team of qualified, dynamic professionals with
an average age of under 40, 54% of whom are women (in the case of senior management, 40%): a record in the
banking sector, of which we are proud and which has enabled us to obtain – for the first time in Italy –
certification for gender equality from the Winning Women Institute. These are just some of the results that bear
witness to Banca Ifis' ability to integrate sustainability into its business model.
Guided by the values that inspire our long-term vision, in 2021, Mr. Geertman, our senior management and all the
Group's people worked enthusiastically to accelerate the Bank's growth and prepare the 2022-2024 business
plan, presented last 10 February.
An ambitious plan that is based on a solid development model and that envisages significant growth for the
Group over the three-year period, with the affirmation of our leadership in the Bank's core businesses. This plan
also benefits from the transfer of the registered office of the parent company La Scogliera to Switzerland,
motivated by personal reasons of my own. A transaction that – keeping the promise made to the market in 2019
– also optimised the Bank's capital structure from a regulatory perspective, in addition to confirming the
controlling shareholder's focus on the Group's long-term sustainability and growth.
The Bank's solidity has allowed us to face and manage even emergency situations such as the Covid-19
pandemic or the war in Ukraine, which we are experiencing at this historic time, and to continue to generate value
for all stakeholders.
Sebastien Egon Fürstenberg, Chairman of Banca Ifis S.p.A.
Banca Ifis | 2021 Consolidated financial statements and report
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Letter from the CEO to Shareholders
Frederik Geertman
CEO of Banca Ifis S.p.A.
Dear Shareholders,
In 2021 Banca Ifis, in response to a general improvement in the macroeconomic scenario and thanks to its ability
to seize the opportunities offered by the recovery, achieved significant financial results and laid a sound
foundation for the implementation of its 2022-24 business plan.
Net profit of 100,6 million Euro was generated during the year, up 46.2% and above the guidance given to financial
markets for 2021. Profit, net of the PPA and real estate gains, was up on 2020 and 10% higher than in 2019. An
all-time record was set during the year in terms of revenues (602,5 million Euro), cash recoveries of purchased
NPL portfolios (345 million Euro) and purchases of NPL portfolios (3,7 billion Euro).
The transfer of the registered office of the controlling shareholder La Scogliera to the Canton of Vaud – driven
by the personal motivations of the Founder – made it possible to optimise the Group's capital structure from a
regulatory point of view, with CET1 standing at 15.44% as at 31 December 2021. The transaction also confirms
the focus on long-term growth of the controlling shareholder and reinforces the stability of the dividend policy.
Thanks to its profitability and solid capital and liquidity position, in February 2022 Banca Ifis obtained an issuer
rating of Baa3 (investment grade) from Moody's with a stable outlook.
Through the acquisition of the operating branch of Aigis Banca – placed in compulsory administrative liquidation
by Italy's Ministry of Economy and Finance in May 2021 – the Bank confirmed its role in supporting the national
economy. During the year we continued to work on the integration of two companies of value, Credifarma Spa
and Farbanca Spa, which will give rise to Banca Credifarma, the first Italian centre specialising in financial
services for pharmacies: a particularly important sector given the current historical context.
In the NPL sector, where over 3,7 billion Euro of non-performing loans was purchased, the Bank confirmed its
leadership in the small ticket unsecured segment, with a market share of 46%. Period purchases will make a
solid contribution to the Bank's profitability in the coming years. In the Commercial & Corporate Banking Sector,
the process of digitalisation and development of services for SMEs from an omnichannel perspective was
accelerated and partnerships were signed with other institutions in order to increase the capacity to distribute
products and services without increasing fixed costs. In addition, projects were launched to improve the Bank's
efficiency, and a new centralised procurement function was set up to optimise purchases.
The Group's positioning and reputation also improved during the year thanks to the new projects carried out in
the field of sport, culture and sustainable mobility in support of communities and society: for the first time in its
history, Banca Ifis entered the rankings of The Banker's Top 500 Banking Brands, the list of the 500 largest banks
in the world by brand value.
Banca Ifis | 2021 Consolidated financial statements and report
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In the ESG area, in 2021 the Bank strengthened its distinctive positioning towards a more sustainable and
inclusive future, with the establishment of the Sustainability Committee and concrete initiatives in the three ESG
areas: environmental, joining the Net-Zero Banking Alliance; social, becoming the first bank in Italy to receive
gender equality certification from the Winning Women Institute; and governance, with an "A" rating awarded by
MSCI.
Finally, in 2021, a new organisational structure was set up, with the appointment of two Joint General Managers.
The positive results achieved by the Bank were the result of the passion and distinctive skills of all the people
working in the Group, as well as the constant, solid support of its controlling shareholder. Drawing on our
enthusiasm and dedication, we plan to accelerate our journey towards sustainable growth, certain that we will
achieve the goals of the new business plan.
Frederik Geertman, Chief Executive Officer of Banca Ifis S.p.A.
Banca Ifis | 2021 Consolidated financial statements and report
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Contents
1. Governance and risk management ...................................................................................................... 7
2. Directors’ Report on the Group ............................................................................................................ 9
2.1 Highlights ................................................................................................................................................. 10
2.2 Group KPIs ............................................................................................................................................... 12
2.3 Context ..................................................................................................................................................... 13
2.4 Results by business Segments ............................................................................................................... 17
2.5 Reclassified quarterly evolution .............................................................................................................. 20
2.6 Group historical data ............................................................................................................................... 21
2.7 APM - Alternative Performance Measures .............................................................................................. 22
2.8 Impact of regulatory changes .................................................................................................................. 24
2.9 Contribution of operating Segments to Group results ............................................................................ 27
2.10 Group financial and income results ....................................................................................................... 45
2.11 Main risks and uncertainties ................................................................................................................. 64
2.12 Banca Ifis shares ................................................................................................................................... 65
2.13 Significant events during the year ......................................................................................................... 68
2.14 Significant subsequent events .............................................................................................................. 71
2.15 Outlook ................................................................................................................................................... 72
2.16 Other information ................................................................................................................................... 74
3. Consolidated Financial Statements .................................................................................................. 77
3.1 Consolidated Statement of Financial Position........................................................................................ 78
3.2 Consolidated Income Statement ............................................................................................................. 80
3.3 Consolidated Statement of Comprehensive Income .............................................................................. 81
3.4 Statement of Changes in Consolidated Equity at 31 December 2021 .................................................... 82
3.5 Statement of Changes in Consolidated Equity at 31 December 2020 .................................................... 83
3.6 Consolidated Statement of Cash Flows .................................................................................................. 84
4. Notes to the Consolidated Financial Statements ............................................................................... 85
4.1 Part A - Accounting policies..................................................................................................................... 86
4.2 Part B - Consolidated statement of financial position .......................................................................... 124
4.3 Part C - Consolidated income statement ............................................................................................... 162
4.4 Part D - Comprehensive income ............................................................................................................ 179
4.5 Part E - Information on risks and related hedging policies ................................................................... 180
4.6 Part F - Consolidated equity .................................................................................................................. 250
4.7 Part G - Business combinations ............................................................................................................ 255
4.8 Part H - Related-party transactions ....................................................................................................... 259
4.9 Part I - Share-based payments .............................................................................................................. 261
4.10 Part L - Segment reporting ................................................................................................................... 263
4.11 Part M - Leasing disclosure ................................................................................................................. 267
5. Country-by-country reporting ......................................................................................................... 270
6. Certifications ................................................................................................................................. 272
6.1 Certification of Manager charged with preparing the Company's financial reports ............................ 273
6.2. Report of the Board of Statutory Auditors ........................................................................................... 274
6.3 Independent auditors' report on the consolidated financial statements ............................................. 283
1.
Governance and risk management
Banca Ifis | 2021 Consolidated financial statements and report
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Board of Directors in office at approval of the reports and consolidated financial statements
Chairman Sebastien Egon Fürstenberg
Deputy Chairman Ernesto Fürstenberg Fassio
CEO Frederik Herman Geertman
(1)
Directors Simona Arduini
Monica Billio
Beatrice Colleoni
Roberto Diacetti
Luca Lo Giudice
Antonella Malinconico
Riccardo Preve
Monica Regazzi
Daniele Umberto Santosuosso
(1)
The CEO has powers for the ordinary management of the Company.
Co-General Managers Fabio Lanza
Raffaele Zingone
Board of Statutory Auditors
Chairman Giacomo Bugna
Standing Auditors Marinella Monterumisi
Franco Olivetti
Alternate Auditors Alessandro Carducci Artenisio
Giuseppina Manzo
Independent Auditors EY S.p.A.
Manager charged Mariacristina Taormina
with preparing the company’s financial reports
Name of ultimate parent of Group- Banca Ifis S.p.A.
Fully paid-up share capital: 53.811.095 Euro
Name of reporting entity - Banca Ifis S.p.A.
Name of parent entity - La Scogliera S.p.A.
Reason for change of name - none
Reporting office - Venice
Legal form - S.p.A.
Country registration - Italy
Main place of business - Mestre Venice
Legal and administrative headquarters - Via Terraglio, 63 30174 Mestre Venice
Nature of reporting activity - Credit activity
ABI 3205.2
Tax Code and Venice Companies Register Number - 02505630109
VAT number - 04570150278
Enrolment in the Register of Banks No - 5508
Website: www.bancaifis.it
Member of FCI
2.
Directors’ Report on the Group
Banca Ifis | 2021 Consolidated financial statements and report
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2.1 Highlights
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cash and cash equivalents
355.381
291.602
63.779
21,9%
Financial assets measured at fair value through
profit or loss
153.138
157.848
(4.710)
(3,0)%
Financial assets measured at fair value through
other comprehensive income
614.013
774.555
(160.542)
(20,7)%
Receivables due from banks measured at
amortised cost
524.991
791.761
(266.770)
(33,7)%
Receivables due from customers measured at
amortised cost
10.331.804
9.135.402
1.196.402
13,1%
Total assets
12.977.891
12.026.196
951.695
7,9%
Payables due to banks measured at amortised
cost
2.597.965
2.367.082
230.883
9,8%
Payables due to customers measured at
amortised cost
5.683.745
5.471.874
211.871
3,9%
Debt securities issued
2.504.878
2.069.083
435.795
21,1%
Equity
1.623.888
1.549.962
73.926
4,8%
RECLASSIFIED CONSOLIDATED
INCOME STATEMENT HIGHLIGHTS
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net banking income
602.519
467.800
134.719
28,8%
Net credit risk losses/reversals
(77.159)
(91.359)
14.200
(15,5)%
Net profit (loss) from financial activities
525.360
376.441
148.919
39,6%
Operating costs
(375.486)
(308.025)
(67.461)
21,9%
Value adjustments of goodwill
-
(700)
700
(100,0)%
Gains (Losses) on disposal of investments
-
24.161
(24.161)
(100,0)%
Pre-tax profit from continuing operations
149.874
91.877
57.997
63,1%
Profit for the year attributable to the Parent
company
100.582
68.804
31.778
46,2%
Banca Ifis | 2021 Consolidated financial statements and report
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QUARTERLY RECLASSIFIED CONSOLIDATED
INCOME STATEMENT HIGHLIGHTS
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net banking income
153.289
146.097
7.192
4,9%
Net credit risk losses/reversals
(14.721)
(43.503)
28.782
(66,2)%
Net profit (loss) from financial activities
138.568
102.594
35.974
35,1%
Operating costs
(107.913)
(78.622)
(29.291)
37,3%
Value adjustments of goodwill
-
(700)
700
(100,0)%
Pre-tax profit from continuing operations
30.655
23.272
7.383
31,7%
Profit for the period attributable to the Parent
company
20.393
16.458
3.935
23,9%
Banca Ifis | 2021 Consolidated financial statements and report
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2.2 Group KPIs
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
GROUP EQUITY KPIs
2021
2020
CHANGE
CET1 ratio
(1)
15,44%
11,29%
4,15%
Total Capital ratio
(1)
19,63%
14,85%
4,78%
Number of company shares (in thousands)
53.811
53.811
0,0%
Number of shares outstanding at year end
(2)
(in thousands)
53.472
53.460
0,0%
Book value per share
30,37
28,99
4,7%
Dividend per share
(3)
0,95
0,47
102,1%
(1) CET1 and Total Capital include earnings generated by the Banking Group as of 31 December 2021, net of the estimated dividend.
Comparative figures refer to the scope of prudential consolidation at the reference dates. The significant increase in shareholders'
equity compared to 31 December 2020 is mainly due to the transfer of the registered office of the parent company La Scogliera to
the Canton of Vaud (Lausanne - CH). The effectiveness of the resolution passed by the extraordinary shareholders' meeting of the
parent company to transfer the registered office, as from 27 December 2021, has in fact allowed the elimination of La Scogliera from
the regulatory consolidation of the Group. The figures at 31 December 2020, restated on a like-for-like basis on a conservative basis
at 31 December 2021 would be: CET1 15,47% and Total Capital 19,87%.
(2) Outstanding shares are net of treasury shares held in the portfolio.
(3) The data for FY 2021 refers to the dividend proposed by the Board of Directors of Banca Ifis.
GROUP ECONOMIC KPIs
2021
2020
CHANGE
ROE
6,5%
4,5%
2,0%
ROA
1,2%
0,8%
0,4%
Reclassified cost/income ratio
(1)
62,3%
65,8%
(3,5)%
EPS
1,88
1,29
45,7%
Payout ratio
50,5%
36,5%
14,0%
(1) Net impairment losses/reversals on receivables of the Npl Segment were reclassified to interest receivable and similar income
to the extent to which they represent the operations of this business and are an integral part of the return on the investment. For
this reason too, apart from the specific operations, the effects of an analysis performed also in response to the Covid-19 pandemic,
have been classified amongst value adjustments.
Banca Ifis | 2021 Consolidated financial statements and report
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2.3 Context
The year 2021 was characterised by a global economic recovery, despite the resurgence of the COVID-19
pandemic recorded since November, with Italy showing higher rates of increase in production than the major
European economies (+6,5% the preliminary estimate of Italian GDP published by ISTAT on 31 January 2022).
The improvement in the scenario with respect to what was experienced in 2020 is well evidenced by the PMI
(Purchasing Managers' Index), which at the end of 2021 reached a significantly higher value (62,0 points for the
manufacturing indicator in December 2021 compared with 53 in December 2020) and still maintained at a level
above 50 corresponding to expansionary expectations.
In this context of overall recovery, the fourth quarter of 2021, while maintaining a significant increase in trend
terms, recorded an economic increase of only 0,6%, much smaller than the previous two quarters of +2,6% and
+2,7% (source: ISTAT January 2022). This slowdown is the result of the significant uncertainties in the scenario
that have been evident since the autumn and which have led the Bank of Italy, in its first Economic Bulletin for
2022, to reduce its GDP growth forecast from +4,0% to +3,8%. In actual fact, in Italy growth was high in the third
quarter of 2021, sustained by the expansion of household consumption thanks to a dynamism of the domestic
market not seen for some time, but also by the growth of exports, supported by the recovery of international
tourism. The contribution of exports was such that the current account surplus remained at a high level despite
the worsening of the energy balance. Subsequently, however, product development slowed down in the last
quarter of 2021 in both industry and the service sector. The rise in the number of infections has, consequently,
reawakened consumer caution, worsening the climate of confidence and penalising, above all, spending on
services. To this contingency linked to the pandemic, which in any case seems to be in the process of being
reabsorbed at least in its most serious aspects, risks have been added linked to the increase in energy and raw
material prices, to bottlenecks in global supply chains and geopolitical tensions, first and foremost the conflict
between Russia and the Ukraine.
As a counterbalance to these risks, however, we find the considerable support to growth that may come from
the stimulus measures financed with the national budget and European funds, in particular those outlined in the
National Recovery and Resilience Plan (PNRR). In the Bank of Italy's estimates, the set of measures introduced
in 2021 and planned for the coming years would support economic activity by a total of around 5 percentage
points in the four-year period 2021-24, just under half of which would be attributable to the PNRR interventions,
assuming they are implemented effectively and without significant delays.
Finally, as explained more extensively in the paragraph on “Outlook”, the macro forecasting scenario will certainly
be conditioned by the foreseeable downsizing of the expansive monetary policy and, above all, by the speed with
which this change of course will be implemented. At the time of writing this market environment, the major
central banks are maintaining a cautious profile despite increases in inflation not seen since the early 1980s.
Indeed, at the end of January the Federal Reserve kept rates unchanged at between 0 and 0,25%, but announced
a gradual increase starting from March 2022 with 3 or 4 planned interventions for the year, while the European
Central Bank (ECB) has not yet modified rates and has stated that it will only gradually reduce purchases while
maintaining an expansive monetary policy.
Banca Ifis | 2021 Consolidated financial statements and report
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Reference markets
Enterprises
After the 2020 lockdown, which saw factories closed and production halted in many sectors and all the
uncertainty linked to the evolution of the pandemic, gloomy forecasts were widespread on the performance of
Italian companies. On the other hand, the two-year period 2020-2021 was less negative than expected, with the
exception of economic activities linked to tourism and some service sectors: the December 2021 edition of
Banca Ifis' Market Watch SMEs observatory revealed that only slightly more than a third of Italian SMEs thought
that the two-year period 2020-2021 would be worse than the previous one, while the same percentage thought it
would be even better; the remaining 26% declared a substantial unchanged performance. This indication
provided by our entrepreneurs was reflected in the Bank of Italy's Economic Bulletin 1-2022: the expansion of
industrial production in the first 9 months of 2021 had a pace of around +1,0% per quarter and only weakened in
the last three months. The production of Italian companies was supported by the growth of domestic
consumption and the positive performance of exports, which in the first three quarters of 2021 measured an
increase of +0,5%, +3,4% and +3,4%, respectively. In FY 2021, as a whole, growth of Italian exports was higher on
EU markets than sales on non-EU markets, but it cannot be overlooked that exports to the latter grew by 16,3%,
placing them at levels higher than in 2019, demonstrating the ability of Italian entrepreneurs to enter new
markets as a solution after a period of crisis. In the last three months of 2021, exports slowed down mainly
related to difficulties in sourcing raw materials and intermediate products due to blockages and slowdowns in
international supply chains.
In the evaluations of companies, noted in the surveys that the Bank of Italy conducted between November and
December, investment growth will continue in 2022, albeit at a reduced pace compared to 2021.
Until 2019, credit disbursed to businesses was characterised by a downward trend, which then reversed from
2020 with uninterrupted growth until June 2021 linked to the support measures introduced. The conditions at
which credit was offered have been favourable thanks to the liquidity offered by the monetary policy and public
guarantees. Starting July 2021, the downward trend in the stock of business loans resumed. In assessing this
dynamic, one cannot fail to mention how much companies have strengthened their liquidity position: in
September 2021, the stock related to the accounts of companies showed 122 billion Euro more than at the end
of 2019, representing an increase of 12%.
Banks: loans to residents in Italy - non-financial companies and producer households
Despite scenario uncertainties, one in two SMEs expects the two years of 2022-2023 to be better than the
previous two years while only 12% expect a worsening (Market Watch PMI December 2021, Banca Ifis). The
survey confirms expectations of macroeconomic data: almost 70% of SMEs expect revenue growth on the
domestic market and practically the same proportion also expect an increase in exports. An increase that,
according to 20% of the companies interviewed, will be even greater than 50% for the Italian market. There are
three main levers that companies believe are necessary to achieve these targets:
• 40% will work on product quality, the true distinctive element of Italian competitiveness;
• 33% believe it is necessary to expand the range of their offerings;
• another 27% intend to use price leverage.
Among the risks reported by our SMEs that could threaten the recovery there is, first of all, the shortage of raw
materials, reported by 70% of the sample. This is followed by rising energy costs (up 45%), commitments related
to sustainability and digital transition, indicated by 23% of companies. Risks, therefore, but also stimuli that will
drive innovation and investment.
Banca Ifis | 2021 Consolidated financial statements and report
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Non-Performing Exposures
Faced with the expected increase in the riskiness of households and businesses, the estimates of the Banca Ifis
Research Department, published in the February 2022 edition of the Npl Market Watch, project an increase in the
deterioration rate on bank balance sheets, with the rate of deterioration rising from 1,0% in 2021 to 2,4% in 2022,
before falling to 1,9% in 2023 and returning to pre-Covid-19 values in 2024, subject to shocks linked to economic
and other risks described above. These increases in flows of new impaired goods are lower than what could be
hypothesised even only six months ago thanks to a further and general improvement in the economic context,
considering that in September 2021 an increase in Italian GDP of +5,1% was hypothesised. In any case, loans
expected to move from performing to non-performing will remain more contained than the peaks reached in 2009
and 2012-2014.
In this context, the Npl portfolio transactions market (non-performing and unlikely to pay) remained dynamic in
2021 (with 31 billion Euro in terms of GBV in transfers of non-performing exposures, of which 32% on the
secondary market and 2 billion Euro of transactions of unlikely to pay), with a strong speeding up of business in
December.
Npe market trend (GBV figures in billion Euro)
The market for transactions on impaired loan portfolios has, therefore, continued to play an important systemic
role in reducing the weight of non-performing loans on bank balance sheets. Indeed, the incidence of the stock
of gross impaired loans on total loans (Npe ratio) is expected to return, for the first time in 2021, below the 5%
target indicated by the ECB and is estimated at 4,7%
The dynamics seen during the year just ended are expected to continue into 2022-2024 too. In 2022, the volume
of transfers may reach 35 billion Euro for non-performing portfolios, of which 9 billion Euro have already been
announced or are in process and 12 billion Euro for unlikely to pay transactions, a value impacted by the
postponement of some deals initially envisaged for 2021. A similar amount of transactions is forecast for 2023
(37 billion Euro of non-performing loans and 10 billion Euro of probable defaults), the amount of which could
decrease in 2024 while remaining at significant levels (28 billion Euro of GBV for non-performing loans and 5
billion Euro for unlikely-to-pay positions).
% GACS
Source: Banca Ifis Market Watch Npl, February 2022 edition
Banca Ifis | 2021 Consolidated financial statements and report
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When comparing 2021 to 2020, the volume concentration of the top 5 buyers decreased from 40% to 30%
because 2020 saw the big system deals between AMCO and MPS. Among investors, only Banca Ifis continues
to be in the top 5 investors with a market share of transacted business increasing from 6% in 2020 to 11% in
2021.
Looking at the Italian system as a whole (impaired in bank balance sheets and investor portfolios), it is estimated
that the stock of Npes, the recovery of which will have to be managed, is 330 billion Euro in 2021 and may
increase in the coming years with a projection of 402 billion Euro at the end of 2024. Figures that demonstrate
the centrality of servicing impaired credit to free up value for families and businesses that can, in this way, be
put back into circulation in the Italian economy.
Banca Ifis | 2021 Consolidated financial statements and report
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2.4 Results by business Segments
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
STATEMENT OF FINANCIAL
POSITION DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNA
NCE &
SERVICES
AND
NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Other financial assets
mandatorily measured at fair
value through profit or loss
Amounts at 31.12.2021
66.564
-
-
66.564
21.021
57.075
144.660
Amounts at 31.12.2020
66.441
-
-
66.441
9.524
61.013
136.978
% Change
0,2%
-
-
0,2%
120,7%
(6,5)%
5,6%
Financial assets measured at
fair value through other
comprehensive income
Amounts at 31.12.2021
1.691
-
-
1.691
-
612.322
614.013
Amounts at 31.12.2020
2.322
-
-
2.322
-
772.233
774.555
% Change
(27,2)%
-
-
(27,2)%
-
(20,7)%
(20,7)%
Receivables due from
customers
(1)
Amounts at 31.12.2021
6.526.880
2.940.072
1.390.223
2.196.584
1.523.628
2.281.296
10.331.804
Amounts at 31.12.2020
5.992.591
2.755.488
1.414.055
1.823.048
1.405.603
1.737.208
9.135.402
% Change
8,9%
6,7%
(1,7)%
20,5%
8,4%
31,3%
13,1%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,6 million Euro (1.095,3 million Euro at 31 December 2020).
Banca Ifis | 2021 Consolidated financial statements and report
18
INCOME STATEMENT DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNA
NCE &
SERVICES
AND NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Net banking income
Amounts at 31.12.2021
283.219
144.543
55.685
82.991
257.556
61.744
602.519
Amounts at 31.12.2020
222.680
142.844
49.155
30.681
162.942
82.178
467.800
% Change
27,2%
1,2%
13,3%
170,5%
58,1%
(24,9)%
28,8%
Net profit (loss) from financial
activities
Amounts at 31.12.2021
238.224
126.670
48.747
62.807
239.560
47.576
525.360
Amounts at 31.12.2020
150.198
112.731
33.533
3.934
162.942
63.301
376.441
% Change
58,6%
12,4%
45,4%
n.s.
47,0%
(24,8)%
39,6%
Profit for the year
Amounts at 31.12.2021
57.809
26.140
14.093
17.576
50.249
(5.755)
102.303
Amounts at 31.12.2020
22.715
25.740
6.713
(9.738)
17.926
28.501
69.142
% Change
154,5%
1,6%
109,9%
(280,5)%
180,3%
(120,2)%
48,0%
QUARTERLY INCOME
STATEMENT DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNA
NCE &
SERVICES
AND NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Net banking income
Fourth quarter 2021
70.178
35.844
12.446
21.888
73.305
9.806
153.289
Fourth quarter 2020
63.136
39.936
12.695
10.505
46.219
36.742
146.097
% Change
11,2%
(10,2)%
(2,0)%
108,4%
58,6%
(73,3)%
4,9%
Net profit (loss) from financial
activities
Fourth quarter 2021
57.172
28.074
10.636
18.462
72.283
9.113
138.568
Fourth quarter 2020
20.863
17.028
12.746
(8.911)
46.219
35.512
102.594
% Change
174,0%
64,9%
(16,6)%
(307,2)%
56,4%
(74,3)%
35,1%
Profit for the period
Fourth quarter 2021
10.691
988
2.967
6.736
18.110
(8.055)
20.746
Fourth quarter 2020
(11.644)
(6.288)
5.012
(10.368)
5.142
23.182
16.680
% Change
(191,8)%
(115,7)%
(40,8)%
(165,0)%
252,2%
(134,7)%
24,4%
Banca Ifis | 2021 Consolidated financial statements and report
19
SEGMENT KPIs
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNAN
CE &
SERVICES
AND NON-
CORE
SEGMENT
(1)
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING AREA
Cost of credit
(2)
Amounts at 31.12.2021
0,73%
0,68%
0,50%
0,95%
n.a.
2,24%
Amounts at 31.12.2020
1,38%
1,09%
1,11%
2,43%
n.a.
4,72%
% Change
(0,65)%
(0,41)%
(0,62)%
(1,48)%
n.a.
(2,48)%
Net bad loans/Receivables due
from customers
Amounts at 31.12.2021
0,5%
0,8%
0,0%
0,3%
72,7%
0,6%
Amounts at 31.12.2020
0,7%
1,3%
0,2%
0,3%
74,1%
0,9%
% Change
(0,2)%
(0,5)%
(0,2)%
(0,0)%
(1,4)%
(0,3)%
Coverage ratio on gross bad
loans
Amounts at 31.12.2021
74,2%
75,2%
96,5%
40,2%
-
35,1%
Amounts at 31.12.2020
72,7%
73,7%
85,0%
26,9%
-
29,1%
% Change
1,5%
1,5%
11,5%
13,3%
-
6,0%
Net non-performing
exposures/Net receivables due
from customers
Amounts at 31.12.2021
3,6%
5,7%
1,2%
2,3%
95,4%
2,1%
Amounts at 31.12.2020
2,7%
4,2%
0,8%
1,8%
98,3%
2,9%
% Change
0,9%
1,5%
0,4%
0,5%
(2,9)%
(0,8)%
Gross non-performing
exposures/Gross receivables
due from customers
Amounts at 31.12.2021
5,9%
9,4%
2,8%
3,0%
95,4%
3,4%
Amounts at 31.12.2020
5,9%
9,3%
2,9%
3,0%
98,3%
4,3%
% Change
(0,0)%
0,1%
(0,1)%
0,0%
(2,9)%
(0,9)%
RWAs
(3)
Amounts at 31.12.2021
5.214.971
2.500.835
1.265.979
1.448.157
2.339.110
1.084.180
Amounts at 31.12.2020
5.144.914
2.361.547
1.309.416
1.473.951
2.211.695
915.705
% Change
1,4%
5,9%
(3,3)%
(1,7)%
5,8%
18,4%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,6 million Euro (1.095,3 million Euro at 31 December 2020), which for the purpose of calculating the cost of credit quality, were
not considered.
(2) This indicator is calculated comparing the value of net credit risk losses/reversals at the end of the period over the annual
average loans to customers (calculated quarterly).
(3) Risk Weighted Assets; the amount only relates to the credit risk.
Banca Ifis | 2021 Consolidated financial statements and report
20
2.5 Reclassified quarterly evolution
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
CONSOLIDATED INCOME
STATEMENT:
QUARTERLY EVOLUTION
(in thousands of Euro)
YEAR 2021
YEAR 2020
4th Q
3rd Q
2nd Q
1st Q
4th Q
3rd Q
2nd Q
1st Q
Net interest income
125.358
129.580
117.206
115.827
120.891
91.122
78.263
91.416
Net commission income
20.422
22.009
22.084
18.767
19.392
15.688
18.710
21.097
Other components of net
banking income
7.509
5.016
15.606
3.135
5.814
2.102
9.866
(6.561)
Net banking income
153.289
156.605
154.896
137.729
146.097
108.912
106.839
105.952
Net credit risk
losses/reversals
(14.721)
(19.837)
(26.499)
(16.102)
(43.503)
(14.516)
(14.828)
(18.512)
Net profit (loss) from
financial activities
138.568
136.768
128.397
121.627
102.594
94.396
92.011
87.440
Personnel expenses
(38.070)
(35.986)
(33.946)
(33.779)
(34.059)
(28.630)
(28.651)
(32.029)
Other administrative
expenses
(70.152)
(50.179)
(59.039)
(52.455)
(67.830)
(40.923)
(41.545)
(40.520)
Net allocations to
provisions for risks and
charges
(1.316)
(3.734)
1.802
(7.421)
(7.034)
(4.619)
(11.412)
(4.889)
Net impairment
losses/reversals on
property, plant and
equipment and intangible
assets
(4.464)
(5.124)
(4.732)
(4.413)
(4.730)
(4.490)
(4.558)
(4.039)
Other operating
income/expenses
6.089
5.609
9.024
6.800
35.031
4.717
4.207
7.978
Operating costs
(107.913)
(89.414)
(86.891)
(91.268)
(78.622)
(73.945)
(81.959)
(73.499)
Value adjustments of
goodwill
-
-
-
-
(700)
-
-
-
Gains (Losses) on
disposal of investments
-
-
-
-
-
-
-
24.161
Pre-tax profit from
continuing operations
30.655
47.354
41.506
30.359
23.272
20.451
10.052
38.102
Income taxes for the
period relating to
continuing operations
(9.909)
(14.960)
(13.112)
(9.590)
(6.592)
(4.811)
328
(11.660)
Profit for the period
20.746
32.394
28.394
20.769
16.680
15.640
10.380
26.442
Profit for the period
attributable to non-
controlling interests
353
536
184
648
222
50
50
16
Profit for the period
attributable to the Parent
company
20.393
31.858
28.210
20.121
16.458
15.590
10.330
26.426
Banca Ifis | 2021 Consolidated financial statements and report
21
2.6 Group historical data
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
The following table shows the main indicators and performances recorded by the Group in the comparable
periods of the last 5 years.
HISTORICAL DATA
(1)
(in thousands of Euro)
31.12.2021
31.12.2020
31.12.2019
31.12.2018
31.12.2017
Financial assets measured at fair value through other
comprehensive income (IFRS 9)
614.013
774.555
1.173.808
432.094
-
Available for sale financial assets (IAS 39)
-
-
-
-
456.549
Receivables due from customers measured at amortised
cost
10.331.804
9.135.402
7.651.226
7.313.972
6.435.806
Payables due to banks measured at amortised cost
2.597.965
2.367.082
959.477
785.393
791.977
Payables due to customers measured at amortised cost
5.683.745
5.471.874
5.286.239
4.673.299
5.293.188
Debt securities issued
2.504.878
2.069.083
2.217.529
1.979.002
1.639.994
Equity
1.623.888
1.549.962
1.538.953
1.459.000
1.368.719
Net banking income
602.519
467.800
558.333
576.503
519.643
Net profit (loss) from financial activities
525.360
376.441
471.150
476.409
504.827
Profit (loss) for the year attributable to the Parent
company
100.582
68.804
123.097
146.763
180.767
KPIs:
ROE
6,5%
4,5%
8,2%
10,5%
13,9%
ROA
1,2%
0,8%
1,7%
2,2%
2,6%
CET1 Ratio
(2)
15,44%
11,29%
10,96%
10,30%
11,66%
Total Capital Ratio
(2)
19,63%
14,85%
14,58%
14,01%
16,15%
Number of shares outstanding
(3)
(in thousands)
53.472
53.460
53.452
53.441
53.433
Book value per share
30,37
28,99
28,79
27,30
25,62
EPS
1,88
1,29
2,30
2,75
3,38
Dividend per share
(4)
0,95
0,47
1,10
1,05
1,00
Payout ratio
(4)
50,5%
36,5%
47,8%
38,2%
29,6%
(1) The data for years prior to 01.01.2018 are those originally published.
(2) CET1 and Total Capital include earnings generated by the Banking Group as of 31 December 2021, net of the estimated dividend.
Comparative figures refer to the scope of prudential consolidation at the various reference dates. The significant increase in
shareholders' equity compared to 31 December 2020 is mainly due to the transfer of the registered office of the parent company La
Scogliera to the Canton of Vaud (Lausanne - CH). The effectiveness of the resolution passed by the extraordinary shareholders'
meeting of the parent company to transfer the registered office, as from 27 December 2021, has in fact allowed the elimination of
La Scogliera from the regulatory consolidation of the Group. The figures at 31 December 2020, restated on a like-for-like basis on a
conservative basis at 31 December 2021 would be: CET1 15,47% and Total Capital 19,87%.
(3) Outstanding shares are net of treasury shares held in the portfolio.
(4) The data for FY 2021 refers to the dividend proposed by the Board of Directors of Banca Ifis S.p.A.
Banca Ifis | 2021 Consolidated financial statements and report
22
2.7 APM - Alternative Performance Measures
The Banca Ifis Group has defined a number of indicators, listed in the tables of the Group's KPIs, that provide
Alternative Performance Measures (APM) to help investors identify significant operational trends and financial
ratios. In identifying these APMs, the specific indications were taken into account on how to represent the APMs
in light of the impacts of the COVID-19 pandemic, published by ESMA on 17 April 2020 (document called
“ESMA32-51-370 Questions and answers – ESMA Guidelines on Alternative Performance Measures”).
For a proper understanding of these APMs, please consider the following:
• these measures are based exclusively on the Group's historical data and are not indicative of the Group's
future performance;
• APMs are non-IFRS measures and, although they are derived from the Group's consolidated financial
statements, they are not audited;
• APMs are not intended as a substitute for IFRS measures;
• said APMs shall be considered in conjunction with the Group's financial information derived from its
consolidated financial statements;
• since these are non-IFRS measures, the definitions of the measures used by the Group may differ from,
and therefore not be comparable to, those used by other companies/groups;
• the APMs used by the Group are consistent across all reporting periods for which the Group has
disclosed financial information in these financial statements.
In accordance with the guidelines issued by ESMA (ESMA/2015/1415), below is a detailed explanation of how
these measures were calculated in order to facilitate their understanding.
ROE - Return on equity
(in thousands of Euro)
YEAR
2021
2020
A. Net profit attributable to the Parent company
100.582
68.804
B. Average equity attributable to the Parent company
1.557.906
1.519.113
ROE (A/B)
6,5%
4,5%
Average equity attributable to the Parent company is calculated as the average for the periods presented below:
Equity attributable to the
Parent company (in thousand Euro)
31.12.2020
31.03.2021
30.06.2021
30.09.2021
31.12.2021
2021
AVERAGE
Equity attributable to the
Parent company
1.523.692
1.544.748
1.546.920
1.578.066
1.596.102
1.557.906
Equity attributable to the
Parent company (in thousand Euro)
31.12.2019
31.03.2020
30.06.2020
30.09.2020
31.12.2020
2020
AVERAGE
Equity attributable to the
Parent company
1.533.382
1.536.847
1.495.049
1.506.596
1.523.692
1.519.113
Banca Ifis | 2021 Consolidated financial statements and report
23
ROA - Return on Assets
(in thousands of Euro)
YEAR
2021
2020
A. Pre-tax profit from continuing operations
149.874
91.877
B. Total assets
12.977.891
12.026.196
ROA (A/B)
1,2%
0,8%
Reclassified cost/income ratio
(1)
(in thousands of Euro)
YEAR
2021
2020
A. Operating costs
375.486
308.025
B. Net banking income
(1)
602.519
467.800
Reclassified cost/income ratio (A/B)
(1)
62,3%
65,8%
(1) Net impairment losses/reversals on receivables of the Npl Segment were reclassified to interest receivable and similar income
to the extent to which they represent the operations of this business and are an integral part of the return on the investment. For
this reason too, apart from the specific operations, the effects of an analysis performed also in response to the Covid-19 pandemic,
have been classified amongst value adjustments.
Book value per share
(in thousands of Euro)
YEAR
2021
2020
A. Number of shares outstanding
(1)
53.472
53.460
B. Consolidated Equity
1.623.888
1.549.962
Book value per share (B/A) Euro
30,37
28,99
(1) Outstanding shares are net of treasury shares held in the portfolio
Payout ratio
(in thousands of Euro)
YEAR
2021
2020
A. Net profit attributable to the Parent company
100.582
68.804
B. Parent company dividends
(1)
50.798
25.132
Payout Ratio (B/A)
(1)
50,5%
36,5%
(1) The data for FY 2021 refers to the dividend proposed by the Board of Directors of Banca Ifis S.p.A.
The Parent company's dividends are calculated as follows:
Parent company dividends
YEAR
2021
2020
A. Unitary dividend Euro
(1)
0,95
0,47
B. Number of shares outstanding
(2)
53.472
53.460
Parent company dividends (AxB)
(1)
50.798
25.126
(1) The data for FY 2021 refers to the dividend proposed by the Board of Directors of Banca Ifis.
(2) Outstanding shares are net of treasury shares held in the portfolio.
Banca Ifis | 2021 Consolidated financial statements and report
24
2.8 Impact of regulatory changes
In 2021 the following main regulatory updates were made, impacting banking/financial, accounting and tax
regulations:
• New Definition of Default (the “New DoD”): following the issuance by the EBA of the “Guidelines on the
application of the definition of default under Article 178 of Regulation (EU) no. 575/2013”
(EBA/GL/2016/07) of the “Regulatory Technical Standards on the materiality threshold for credit
obligations in arrears” and the related Delegated Regulation (EU) no. 171/2018 of the European
Commission of 19 October 2017 (EBA/RTS/2016/06), in turn transposed at national level by the Bank of
Italy, new rules on the “Default Classification of Counterparties” were introduced with effect from 1
January 2021. These new rules require the application of more restrictive prudent criteria than those
adopted to date by Italian intermediaries, a summary of which is provided below:
New Definition of Default: summary of main changes
Key
Existing rules (until 31.12.2020)
New rules (from 01.01.2021)
Classification as
non-performing
past due
exposures
A customer is classified as having non-
performing past due exposures if they are in
arrears for more than 90 consecutive days and
the total amount of exposures past due is at
least 5% of the total exposures to the customer.
The customer is classified as an having non-performing
past due exposures if it simultaneously exceeds the
following materiality thresholds for more than 90
(1)
consecutive days:
• - absolute threshold: Euro 100 for “retail” exposures;
Euro 500 for other “non-retail” exposures;
• - relative threshold: 1% of the total amount of all
exposures accrued on the contracts that the client has
in place with the Bank.
Offsetting
The offsetting of past due amounts against
funds on other credit facilities not used or
partially used by the customer is permitted.
Offsetting is no longer permitted. Consequently, the
Bank is required to classify the customer as “Defaulting”
even if there is availability on other undrawn credit
facilities.
Stay in Default
status
Classification as a performing company occurs
when the conditions for a default classification
no longer exist.
The status of Default remains for at least 90 days from
the moment in which the client settles the payment
arrears with the Bank or remedies an overrun.
Joint obligations
There are no rules for the propagation of the
status of Default in the case of joint obligations
(e.g. “co-ownership”).
New “propagation of Default status” rules are provided:
• - if a joint obligation is classified as “at Default”, this
classification is also extended to the relationships
relating to the individual parties that are part of that
obligation (insolvent);
• - only if all the parties involved in a joint obligation
relationship are individually classified as “in default”,
this classification will also be extended to the joint
obligation relationships linked to them.
Classification at
banking group
level
The classification of a customer as having non-
performing past due exposures at one Group
company does not imply the same automatic
classification at the other Group companies.
If a counterparty is classified as “Default” by a Group
company, this classification will automatically be
propagated to all the other Group companies with which
the counterparty has dealings.
(1) The counting of days in arrears should be suspended, inter alia, in the event that the repayment of the obligation is the subject
of a dispute between the debtor and the bank on the an or quantum of the payment obligation (see para. 19 of the EBA Guidelines)
or legislation providing for this suspension or other legal restrictions (see para. 18 of the EBA Guidelines). With reference to
exposures to public administrations, the EBA Guidelines allow the application of a term of 180 days instead of 90 days if the
conditions specified therein are met.
• Judgement no. 236/2021 of the Constitutional Court which declared the constitutional illegitimacy of
art. 3, paragraph 8, of Law Decree no. 183 of 2020, limited to the extension to 31 December 2021 provided
Banca Ifis | 2021 Consolidated financial statements and report
25
by said article to the emergency regulations regarding the suspension of executions and ineffectiveness
of attachment orders against, among others, the entities of the National Health Service referred to in art.
117, paragraph 4, of Decree-Law no. 34 of 19 May 2020 (“Judgement no. 236/2021”);
• Resolutions of the Council of Ministers of 13 January 2021, 21 April 2021 and 23 July 2021 and Law
Decree no. 221/2021, which extended first until 30 April 2021, then until 31 July 2021 and until 31
December 2021 and ultimately until 31 March 2022 the state of emergency following the spread of the
Covid-19 pandemic;
• Italian Law Decree no. 73/2021 (the “Sostegni-Bis Decree”), which contains the following measures:
– With regard to guarantees on portfolios of new medium/long-term loans granted to companies
with no more than 499 employees for the implementation of research, development and
innovation projects and/or investment programmes, an increase in the investment portfolios to
500 million Euro is granted, provided that the duration is between a minimum of 6 years and a
maximum of 15 years and at least 60% of the loans are for research, development and innovation
projects and/or investment programmes;
– Extension to 31 December 2021 of temporary measures to support business liquidity and
extension to 10 years of the maximum duration of loans with public guarantee (Sace), compared
to the previous limit of 6 years;
– Extension to 31 December 2021 of the moratorium for SMEs, for revocable credit facilities and
for loans granted against advances on loans existing on 29 February 2020 or, if higher, for both
the drawn and the unused portion.
• Law no. 21 of 26 February 2021 converting Decree Law no. 183/2020 (the “Milleproroghe” Decree),
which in art. 3, paragraph 11-sexies established the obligation, for financial reports relating to
financial years beginning on or after 1 January 2021, to prepare them in XHTML format, marking
certain information in the consolidated financial statements with the Inline XBRL specification. In
this case:
– this Law has taken advantage of the faculty granted by the “Transparency Directive” (EC
Directive no. 109/2004, as amended by EU Directive no. 50/2013) to postpone until 2021 the
obligation set forth in European Commission Delegated Regulation no. 815/2019 of 17
December 2018 (“ESEF Regulation”) aimed at preparing the set of documents known as the
“annual financial report” in a single electronic reporting format, for the purpose of harmonising
disclosure obligations to the market of issuers with securities traded on a European regulated
market. In fact, the new method of publication should have applied from annual financial reports
containing financial statements for financial years beginning on or after 1 January 2020 but, in
view of the difficulties that companies have experienced as a result of the Covid-19 pandemic,
the Transparency Directive has been amended to give EU member states the power to postpone
this obligation;
– the rules of the ESEF Regulations apply in two stages:
▪ Step 1, already applicable to financial reports for financial years beginning on or after 1
January 2021: issuers must mark all information rendered in consolidated financial
statements corresponding to the mandatory elements of the basic taxonomy contained
in Table 1 of Annex II8, i.e., all numerical values of a monetary nature of the consolidated
financial statement schedules and a reduced set of information of a biographical nature
(such as, for example: the name of the reporting entity, its registered office and address,
Banca Ifis | 2021 Consolidated financial statements and report
26
legal form, country of registration and principal place of business, and a description of
the nature of the entity's business);
▪ Step 2, which will be applicable to financial reports for fiscal years commencing on or
after 1 January 2022: issuers, in addition to marking all numerical values in the
consolidated financial statement schedules, must mark all information (of a textual
and/or numerical nature) rendered in the consolidated financial statements that
corresponds to the mandatory elements of the basic taxonomy contained in Table 2 of
Annex II9 (i.e., all numerical values of a monetary nature in the consolidated financial
statement schedules and information contained in the notes to the financial statements
that corresponds to the full version of the mandatory elements of the basic taxonomy).
Banca Ifis | 2021 Consolidated financial statements and report
27
2.9 Contribution of operating Segments to Group results
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
2.9.1 The organisational structure
In accordance with standard IFRS 8, a company must provide information that allows users of the financial
statements to assess the nature and effects on such of the balance of the business it pursues and the economic
contexts in which it operates. The contribution therefore needs to be highlighted as made by the various
operating Segments to forming the Group’s economic result.
Identification of the Operating Segments is consistent with the methods adopted by the Management to take
operative decisions and is based on internal reporting, used in order to allocate the resources to the various
Segments and analyse the relevant performance.
In line with the structure used by Management to analyse the Group's results, the information by Segment is
broken down as follows:
• Commercial & Corporate Banking Segment, represents the commercial offer of the Group dedicated to
companies and consists of the Business Factoring, Leasing and Corporate Banking & Lending;
• Npl Segment, dedicated to non-recourse factoring and managing distressed loans, servicing and
managing non-performing, secured loans;
• Governance & Services and Non-Core Segment, which provides the segments operating in the Group's
core businesses with the financial resources and services necessary to perform their respective
activities. The Segment includes treasury and proprietary securities desk activities, the disbursement of
salary- or pension-backed loans and some portfolios of personal loans, as well as some corporate loans
portfolio assigned for run-off insofar as held to be non-strategic to the Group's growth.
The Segments of the economic-equity numericals are attributed on the basis of homogeneous allocation criteria
in order to take into account both the specificity of the various Segments and the need to guarantee effective
monitoring of business performance over time.
Moreover, considering the foregoing, the Segment information in relation to the items of the income statement
shows the results at the level of the net profit.
To this end, the operating costs needed to be attributed to the reference Segments and this was done as follows:
• for direct costs, allocation was as per the use of the cost centre by reference Segment;
• for indirect costs, which by nature are attributable to a specific Segment insofar as incurred to guarantee
normal operation and the correct function of the entire structure (“central services”), direction to the
individual Segments was assured using different allocation instruments for the different cost categories,
also based on internal surveys.
Farbanca S.p.A., acquired on 27 November 2020 by the Banca Ifis Group, contributes towards the profitability
generated by the Corporate Banking & Lending Area. Starting January 2021, in order to foster the centralised
management of the pharmacy support business, the income contribution made by the other subsidiary
Banca Ifis | 2021 Consolidated financial statements and report
28
Credifarma, previously included in the Factoring Area, has also been allocated to this same area; all the
information supplied below, including the comparative data, take this reallocation into account.
In May 2021, the Group proceeded with the acquisition of the business (hereinafter also former Aigis Banca
business) whose corporate finance activities were merged into the Commercial & Corporate Banking Segment
and proprietary portfolio management into the Governance & Services and Non-Core Segment. Reference should
be made to Part G “Business combinations” of the Notes.
COMMERCIAL & CORPORATE BANKING SEGMENT
The Commercial & Corporate Banking Segment includes the following business areas:
• Factoring: Area dedicated to supporting the trade credit of SMEs operating on the domestic market,
which develop towards export, or which from export, turn to Italian customers; it also includes an
organisational unit dedicated to supporting trade credit of suppliers of the local health authorities and a
business unit specialised in the acquisition of tax receivables transferred from bankruptcy proceedings,
which operates under the Fast Finance brand. This unit acquires tax receivables, accrued and accruing,
already requested for reimbursement, or future, arising from proceedings or in previous years;
• Leasing: Area that provides finance and operating leases - but not real estate leases, as the Group does
not offer them - to small economic operators and SMEs;
• Corporate Banking & Lending: Business area that aggregates multiple units: Structured Finance, the
sector that supports companies and private equity funds in arranging bilateral or syndicated loans; the
Special Situations sector, which supports the financial recovery of businesses that managed to
overcome financial distress; the Equity Investment sector, dedicated to investing in non-financial
companies and intermediaries; and the Lending sector, dedicated to the Group’s medium/long-term
operations, oriented to supporting the company's operating cycle through services ranging from funding
optimisation to working capital financing and the support for productive investments.
Below are the Segment results at 31 December 2021.
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
187.866
153.897
33.969
22,1%
Net commission income
80.954
70.804
10.150
14,3%
Other components of net banking income
14.399
(2.021)
16.420
(812,5)%
Net banking income
283.219
222.680
60.539
27,2%
Net credit risk losses/reversals
(44.995)
(72.482)
27.487
(37,9)%
Net profit (loss) from financial activities
238.224
150.198
88.026
58,6%
Operating costs
(153.720)
(120.014)
(33.706)
28,1%
Pre-tax profit from continuing operations
84.504
30.184
54.320
180,0%
Income taxes for the year relating to current
operations
(26.695)
(7.469)
(19.226)
257,4%
Profit (loss) for the year
57.809
22.715
35.094
154,5%
Banca Ifis | 2021 Consolidated financial statements and report
29
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
47.205
44.430
2.775
6,2%
Net commission income
19.198
18.910
288
1,5%
Other components of net banking income
3.775
(204)
3.979
n.s.
Net banking income
70.178
63.136
7.042
11,2%
Net credit risk losses/reversals
(13.006)
(42.273)
29.267
(69,2)%
Net profit (loss) from financial activities
57.172
20.863
36.309
174,0%
Operating costs
(41.543)
(35.610)
(5.933)
16,7%
Pre-tax profit from continuing operations
15.629
(14.747)
30.376
(206,0)%
Income taxes for the period relating to
continuing operations
(4.938)
3.103
(8.041)
(259,1)%
Profit (loss) for the period
10.691
(11.644)
22.335
(191,8)%
Net profit of the Commercial & Corporate Banking Segment comes to 57,8 million Euro, up 154,5% as compared
with last year. As commented at greater length below, this change is determined by the growth in net banking
income of 60,5 million Euro and a decrease in net value adjustments for credit risk of 27,5 million Euro, while
operating costs increased overall by 33,7 million Euro compared to 2020.
The operating performance of the business areas making up the Segment is described and analysed further on.
The following table provides a detail of the gross and net amounts as well as the relevant coverage ratios for
each supervisory risk category of receivables due from customers.
COMMERCIAL & CORPORATE
BANKING
(in thousands of Euro)
BAD LOANS
UNLIKELY TO
PAY
PAST DUE
EXPOSURES
TOTAL NON-
PERFORMING
(STAGE 3)
PERFORMING
(STAGES 1 AND
2)
TOTAL LOANS
POSITION AT 31.12.2021
Nominal amount
115.550
161.137
119.683
396.370
6.366.531
6.762.901
Impairment losses
(85.789)
(70.164)
(6.531)
(162.484)
(73.537)
(236.021)
Carrying amount
29.761
90.973
113.152
233.886
6.292.994
6.526.880
Coverage ratio
74,2%
43,5%
5,5%
41,0%
1,2%
3,5%
Gross ratio
1,7%
2,4%
1,8%
5,9%
94,1%
100,0%
Net ratio
0,5%
1,4%
1,7%
3,6%
96,4%
100,0%
POSITION AT 31.12.2020
Nominal amount
157.660
176.949
35.583
370.192
5.892.756
6.262.949
Impairment losses
(114.554)
(89.677)
(5.135)
(209.366)
(60.991)
(270.358)
Carrying amount
43.106
87.272
30.448
160.826
5.831.765
5.992.591
Coverage ratio
72,7%
50,7%
14,4%
56,6%
1,0%
4,3%
Gross ratio
2,5%
2,8%
0,6%
5,9%
94,1%
100,0%
Net ratio
0,7%
1,5%
0,5%
2,7%
97,3%
100,0%
Banca Ifis | 2021 Consolidated financial statements and report
30
Net non-performing exposures in the Commercial & Corporate Banking Segment stood at 233,9 million Euro at
31 December 2021, up 73,1 million Euro on the figure at 31 December 2020 (160,8 million Euro). This increase is
mainly attributable to the classification as past due of certain positions towards the Public Administration,
mainly within the Factoring Area, which more than offset the decrease in net non-performing receivables due to
the sale of receivables within a broader securitisation transaction with state guarantee (“GACS”). In this regard,
it should be noted that the Group, following the application of the new regulations on the “New DoD” and
judgement no. 236/2021 of the Constitutional Court of 7 December 2021 (which declared unconstitutional the
extension of the emergency legislation suspending the execution and inefficacy of the enforcement against,
among others, National Health Service bodies), revised the criteria for transferring exposures to the NHS to past
due, reclassifying 65 million Euro of such exposures as non-performing past due. For further details, reference
should be made to Part E “Information on risks and related hedging policies” of the Notes. This classification
has also led to a decrease in the average coverage of non-performing past due exposures in view of the lower
relative risk of exposures to the public administration.
Consequently, the coverage ratio of impaired assets was 41,0%, down compared to the 56,6% booked at 31
December 2020. The increase in the Segment's coverage of performing loans (concentrated on the Corporate
Banking & Lending Area) is a direct consequence of the provisions of 12,5 million Euro made in the Corporate
Banking area against the concentration risk typical of the sector, also to take account of the potential further
future effects connected with the lack of extraordinary credit support measures.
KPI
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cost of credit quality
(1)
0,73%
1,38%
n.a.
(0,65)%
Net Npe ratio
3,6%
2,7%
n.a.
0,9%
Gross Npe ratio
5,9%
5,9%
n.a.
(0,0)%
RWA
(2)
5.214.971
5.144.914
70.057
1,4%
(1) This indicator is calculated comparing the value of net credit risk losses/reversals at the end of the period over the annual
average loans to customers (calculated quarterly).
(2) Risk Weighted Assets; the amount only relates to the credit risk.
To ensure a better understanding of the results for the year, below we comment on the contribution of the
individual business areas to the Commercial & Corporate Banking Segment.
Banca Ifis | 2021 Consolidated financial statements and report
31
Factoring Area
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
87.386
90.625
(3.239)
(3,6)%
Net commission income
55.869
52.303
3.566
6,8%
Other components of net banking income
1.288
(84)
1.372
n.s.
Net banking income
144.543
142.844
1.699
1,2%
Net credit risk losses/reversals
(17.873)
(30.113)
12.240
(40,6)%
Net profit (loss) from financial activities
126.670
112.731
13.939
12,4%
Operating costs
(88.459)
(78.527)
(9.932)
12,6%
Pre-tax profit from continuing operations
38.211
34.204
4.007
11,7%
Income taxes for the year relating to current
operations
(12.071)
(8.464)
(3.607)
42,6%
Profit (loss) for the year
26.140
25.740
400
1,6%
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
21.518
26.814
(5.296)
(19,8)%
Net commission income
14.379
13.288
1.091
8,2%
Other components of net banking income
(53)
(166)
113
(68,1)%
Net banking income
35.844
39.936
(4.092)
(10,2)%
Net credit risk losses/reversals
(7.770)
(22.908)
15.138
(66,1)%
Net profit (loss) from financial activities
28.074
17.028
11.046
64,9%
Operating costs
(26.629)
(24.707)
(1.922)
7,8%
Pre-tax profit from continuing operations
1.445
(7.679)
9.124
(118,8)%
Income taxes for the period relating to
continuing operations
(457)
1.391
(1.848)
(132,9)%
Profit (loss) for the period
988
(6.288)
7.276
(115,7)%
The contribution made by the Factoring Area towards net banking income booked by the Commercial &
Corporate Banking Segment came to 144,5 million Euro in 2021, in line with last year’s figure.
Turnover in 2021 amounted to 12,0 billion Euro, up by 1,2 billion Euro compared to the previous year, while
outstanding loans amounted to 4,0 billion Euro, up on the 3,3 billion Euro booked in December 2020.
Net adjustments for credit risk amounted to 17,9 million Euro, down compared to the previous year, which
included additional provisions of 15,7 million Euro for exposures operating in sectors considered most exposed
to the pandemic context as well as to the effects connected with the lack of protection measures implemented
by the Government.
Therefore, net profit from financial activities amounted to 126,7 million Euro.
Operating costs rose by 9,9 million Euro on 31 December 2020. This effect is the combined result of higher
personnel expenses of 6,4 million Euro, mainly related to allocated variable remuneration (2020 was affected by
Banca Ifis | 2021 Consolidated financial statements and report
32
prudential policies related to the uncertainty of the pandemic) and higher other administrative expenses of 1,9
million Euro, impacted in 2021 by the marketing campaigns of the Commercial & Corporate Banking Segment
and 1,9 million Euro for provisions made for risks and charges connected with the acquisition of tax credits
linked to benefits for construction.
At 31 December 2021, the Area's total net loans amounted to 2,9 billion Euro, up 185 million Euro compared to
December 2020.
The following table shows the gross and net amounts as well as the relevant coverage ratios for each supervisory
risk category of receivables due from customers.
FACTORING AREA
(in thousands of Euro)
BAD LOANS
UNLIKELY TO
PAY
PAST DUE
EXPOSURES
TOTAL NON-
PERFORMING
(STAGE 3)
PERFORMING
(STAGES 1 AND
2)
TOTAL LOANS
POSITION AT 31.12.2021
Nominal amount
96.272
87.222
104.804
288.298
2.794.814
3.083.113
Impairment losses
(72.370)
(46.158)
(2.274)
(120.802)
(22.238)
(143.041)
Carrying amount
23.901
41.064
102.530
167.496
2.772.576
2.940.072
Coverage ratio
75,2%
52,9%
2,2%
41,9%
0,8%
4,6%
POSITION AT 31.12.2020
Nominal amount
136.063
108.726
27.976
272.765
2.664.408
2.937.173
Impairment losses
(100.263)
(55.617)
(1.103)
(156.982)
(24.702)
(181.685)
Carrying amount
35.801
53.108
26.873
115.783
2.639.706
2.755.488
Coverage ratio
73,7%
51,2%
3,9%
57,6%
0,9%
6,2%
The carrying amount of impaired receivables increased by 51,7 million Euro compared to the figure at the end of
2020; this change is due to the previously mentioned classification of receivables due from the Public
Administration as non-performing past due exposures, an effect that more than offset the decrease in net non-
performing receivables due to a sale of receivables as part of a broader securitisation transaction with state
guarantee (“GACS”).
KPI
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cost of credit quality
(1)
0,68%
1,09%
n.a.
(0,41)%
Net Npe ratio
5,7%
4,2%
n.a.
1,5%
Gross Npe ratio
9,4%
9,3%
n.a.
0,1%
RWA
(2)
2.500.835
2.361.547
139.288
5,9%
(1) This indicator is calculated comparing the value of net credit risk losses/reversals at the end of the period over the annual
average loans to customers (calculated quarterly).
(2) Risk Weighted Assets; the amount only relates to the credit risk.
Banca Ifis | 2021 Consolidated financial statements and report
33
Leasing Area
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
44.381
37.937
6.444
17,0%
Net commission income
11.304
11.218
86
0,8%
Net banking income
55.685
49.155
6.530
13,3%
Net credit risk losses/reversals
(6.938)
(15.622)
8.684
(55,6)%
Net profit (loss) from financial activities
48.747
33.533
15.214
45,4%
Operating costs
(28.146)
(24.612)
(3.534)
14,4%
Pre-tax profit from continuing operations
20.601
8.921
11.680
130,9%
Income taxes for the year relating to current
operations
(6.508)
(2.208)
(4.300)
194,7%
Profit (loss) for the year
14.093
6.713
7.380
109,9%
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
10.636
9.617
1.019
10,6%
Net commission income
1.810
3.078
(1.268)
(41,2)%
Net banking income
12.446
12.695
(249)
(2,0)%
Net credit risk losses/reversals
(1.810)
51
(1.861)
n.s.
Net profit (loss) from financial activities
10.636
12.746
(2.110)
(16,6)%
Operating costs
(6.299)
(6.050)
(249)
4,1%
Pre-tax profit from continuing operations
4.337
6.696
(2.359)
(35,2)%
Income taxes for the period relating to
continuing operations
(1.370)
(1.684)
314
(18,6)%
Profit (loss) for the period
2.967
5.012
(2.045)
(40,8)%
Net banking income of the Leasing Area is 55,7 million Euro, up 6,5 million Euro (+13,3%) on 31 December 2020;
this result is due for 7,3 million Euro to lesser interest expense following a review of internal transfer rates, partly
offset for 0,8 million Euro by lesser interest income in the operating lease sector (rental).
Net impairment losses on receivables amounted to 6,9 million Euro, down 8,7 million Euro compared to 2020.
The lower provisions in 2021 were due to improved credit quality relating to the operative rental segment and an
extension of the credit moratorium measures for finance leases. This had the effect of keeping impaired loans
at lower levels than in the previous year, particularly in the first half of 2021. It is also recalled that the 2020
figure had been impacted by the introduction of additional provisions on collective adjustments relative to
moratoriums of the transportation segment, in order to reflect the misalignment generated between the loan
amortisation plan (frozen for the moratorium period granted) and the relative value of the assets given as
guarantee (used and, therefore, subject to wear and tear for the same duration).
The increase in operating costs in the Leasing Area of approximately 3,5 million Euro is mainly due to higher ICT
expenses and outsourcing costs on business processes to support the transition of information systems, in
Banca Ifis | 2021 Consolidated financial statements and report
34
addition to higher amortisation due to the reduction in the useful life of the leasing applications being replaced.
The remaining increase was mainly due to higher variable remuneration allocated in 2021, taking into account
that 2020 was impacted by a prudent incentive policy related to the uncertainty of the pandemic.
At 31 December 2021, the Area's total net loans amounted to 1.390,2 million Euro, essentially in line with 31
December 2020.
The following table shows the gross and net amounts as well as the relevant coverage ratios of receivables due
from customers for each supervisory risk category.
LEASING AREA
(in thousands of Euro)
BAD LOANS
UNLIKELY TO
PAY
PAST DUE
EXPOSURES
TOTAL NON-
PERFORMING
(STAGE 3)
PERFORMING
(STAGES 1 AND
2)
TOTAL LOANS
POSITION AT 31.12.2021
Nominal amount
10.071
16.181
13.832
40.084
1.392.815
1.432.899
Impairment losses
(9.719)
(9.550)
(4.070)
(23.339)
(19.336)
(42.675)
Carrying amount
352
6.631
9.763
16.745
1.373.478
1.390.223
Coverage ratio
96,5%
59,0%
29,4%
58,2%
1,4%
3,0%
POSITION AT 31.12.2020
Nominal amount
14.590
19.675
7.443
41.708
1.418.450
1.460.158
Impairment losses
(12.407)
(13.909)
(4.014)
(30.330)
(15.773)
(46.103)
Carrying amount
2.183
5.766
3.429
11.378
1.402.677
1.414.055
Coverage ratio
85,0%
70,7%
53,9%
72,7%
1,1%
3,2%
Net impaired exposures at December 2021 stood at 16,7 million Euro, an increase of 47,2% compared to
December 2020, driven by non-performing past due exposures (+6,3 million Euro). Overall, the increase can be
attributed to terminating the moratorium period with suspension of the total instalment, which froze the count
of the days overdue on any outstanding amounts prior to the “Cura Italia” decree. The resumption of billing for
the fee or interest only (for customers who had adhered to the Support Decree) resulted in the resumption of
billing for the same days past due.
In terms of coverage for the past due decreases from 53,9% at the end of 2020 to 29,4% at 31 December 2021
due to a different mix between the leasing and rental sectors, characterised by different average coverage levels.
While the rental sector has remained substantially unchanged, the weight of the automotive leasing sector has
increased, which, due to the guarantee of a fungible asset, has a lower relative credit risk. The reduction in net
non-performing loans, from 14,6 million Euro at the end of 2020 to 10,1 million Euro at 31 December 2021, was
primarily attributable to the loss transfers that occurred during the year and lower new classifications recorded
in 2021, particularly in the leasing sector. A similar dynamic influenced the decrease in positions of probable
default.
Banca Ifis | 2021 Consolidated financial statements and report
35
KPI
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cost of credit quality
(1)
0,50%
1,11%
n.a.
(0,62)%
Net Npe ratio
1,2%
0,8%
n.a.
0,4%
Gross Npe ratio
2,8%
2,9%
n.a.
(0,1)%
RWA
(2)
1.265.979
1.309.416
(43.437)
(3,3)%
(1) This indicator is calculated comparing the value of net credit risk losses/reversals at the end of the period over the annual
average loans to customers (calculated quarterly).
(2) Risk Weighted Assets; the amount only relates to the credit risk.
Corporate Banking & Lending Area
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
56.099
25.335
30.764
121,4%
Net commission income
13.781
7.283
6.498
89,2%
Other components of net banking income
13.111
(1.937)
15.048
n.s.
Net banking income
82.991
30.681
52.310
170,5%
Net credit risk losses/reversals
(20.184)
(26.747)
6.563
(24,5)%
Net profit (loss) from financial activities
62.807
3.934
58.873
n.s.
Operating costs
(37.115)
(16.875)
(20.240)
119,9%
Pre-tax profit from continuing operations
25.692
(12.941)
38.633
(298,5)%
Income taxes for the year relating to current
operations
(8.116)
3.203
(11.319)
(353,4)%
Profit (loss) for the year
17.576
(9.738)
27.314
(280,5)%
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
15.051
7.999
7.052
88,2%
Net commission income
3.009
2.544
465
18,3%
Other components of net banking income
3.828
(38)
3.866
n.s.
Net banking income
21.888
10.505
11.383
108,4%
Net credit risk losses/reversals
(3.426)
(19.416)
15.990
(82,4)%
Net profit (loss) from financial activities
18.462
(8.911)
27.373
(307,2)%
Operating costs
(8.615)
(4.853)
(3.762)
77,5%
Pre-tax profit from continuing operations
9.847
(13.764)
23.611
(171,5)%
Income taxes for the period relating to
continuing operations
(3.111)
3.396
(6.507)
(191,6)%
Profit (loss) for the period
6.736
(10.368)
17.104
(165,0)%
Net banking income of the Corporate Banking & Lending Area, which came to 83,0 million Euro at 31 December
2021, rose by 52,3 million Euro on the previous year, with an increase in the interest margin of 30,8 million Euro,
Banca Ifis | 2021 Consolidated financial statements and report
36
in the commission component for 6,5 million Euro and in other components of net banking income for 15,0
million Euro.
In particular, the positive change in net interest income is due to the growth of 24,8 million Euro in the Lending
sector dedicated to financing SMEs. This result is due both to the growth in volumes compared to the previous
year, and to the contribution of Farbanca, amounting to 10,9 million Euro (while in 2020 the contribution was
essentially nil, as it only related to the month of December), and of the branch acquired from the former Aigis
Banca. The Corporate Lending sector also made a positive contribution to the result with 5,1 million Euro of
higher net interest income.
The contribution in 2021 from the PPA was 2,8 million Euro, an increase of 1,0 million Euro compared to the
previous year. This change is linked to the early repayment of a significant transaction in the Structured Finance
sector.
Net commission income is up 6,5 million Euro, thanks to the combined effect of an increase in disbursements
and to the asset the Structured Finance sector, which impacts for 4,4 million Euro, and there is an increase in
commission associated with the Farbanca business for 2,1 million Euro.
The other components of net banking income increased by 15,0 million Euro, mainly due to the improved
performance (in terms of income from valuation and transfer) of both non-controlling interests, amounting to 6,5
million Euro and UCIT funds, which resulted in a positive change in fair value of 7,7 million Euro. Finally, the
positive impact on the dividend component amounts to 0,3 million Euro and the impact on receivables measured
at fair value with an impact on the income statement amounts to 0,5 million Euro.
Net credit risk losses amounted to 20,2 million Euro, down 6,6 million Euro compared to the previous year, as
follows:
• 12,5 million Euro the Structured Finance sector and attributable to the provisions made to take into
account both the macroeconomic context resulting from the pandemic and to mitigate the typical risk
of portfolio concentration;
• 2,6 million Euro relating to Farbanca, whose contribution in 2020 was essentially nil (as it refers only to
the month of December 2020);
• 5,1 million Euro to the growth of retail exposures in the SME financing sector.
The increase in operating costs of the Corporate Banking & Lending Area for approximately 20 million Euro on
FY 2020 is mainly due to the change in the consolidation scope deriving from the entry of Farbanca into the
scope of the Banca Ifis Group starting December 2020 and the purchases BU of the former Aigis Banca since
end May 2021. The overall impact of this change is 14,6 million Euro, including direct integration costs. The
redistribution of the assets of the central services following their entry into the Group also resulted in higher
costs of 2,9 million Euro.
At 31 December 2021, total net receivables due from customers in the Area comes to 2.196,6 million Euro, with
a positive change of 373,5 million Euro (+20,5%) on the 1.823,0 million Euro of 31 December 2020. Growth is
driven by the increase in loans to SMEs for 351,3 million Euro (of which approximately 220 million Euro from the
former Aigis Banca division) and the Corporate Banking sector for 22,2 million Euro.
The following table shows the gross and net amounts as well as the relevant coverage ratios of receivables due
from customers for each supervisory risk category.
Banca Ifis | 2021 Consolidated financial statements and report
37
CORPORATE BANKING &
LENDING AREA
(in thousands of Euro)
BAD LOANS
UNLIKELY TO
PAY
PAST DUE
EXPOSURES
TOTAL NON-
PERFORMING
(STAGE 3)
PERFORMING
(STAGES 1 AND
2)
TOTAL LOANS
POSITION AT 31.12.2021
Nominal amount
9.207
57.734
1.047
67.988
2.178.902
2.246.889
Impairment losses
(3.700)
(14.455)
(188)
(18.343)
(31.962)
(50.305)
Carrying amount
5.507
43.278
859
49.645
2.146.940
2.196.584
Coverage ratio
40,2%
25,0%
17,9%
27,0%
1,5%
2,2%
POSITION AT 31.12.2020
Nominal amount
7.007
48.549
164
55.719
1.809.898
1.865.618
Impairment losses
(1.885)
(20.151)
(18)
(22.053)
(20.516)
(42.570)
Carrying amount
5.122
28.398
146
33.666
1.789.382
1.823.048
Coverage ratio
26,9%
41,5%
10,7%
39,6%
1,1%
2,3%
The 16,0 million Euro increase (+47,5%) in net non-performing exposures on 31 December 2020 is mainly due to
the inclusion in the category of unlikely to pay of an individually significant position relative to the Structured
Finance division. The division related to SME financing increased non-performing loans by 6,4 million Euro.
The average coverage of probable defaults decreased from 41,5% to 25,0%, primarily due to the restructuring of
another individually significant position through partial conversion into equity instruments.
The increase in coverage at 31 December 2021 on performing loans was determined by the assessments carried
out on risks related to concentration levels.
KPI
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cost of credit quality
(1)
0,95%
2,43%
n.a.
(1,48)%
Net Npe ratio
2,3%
1,8%
n.a.
0,5%
Gross Npe ratio
3,0%
3,0%
n.a.
0,0%
RWA
(2)
1.448.157
1.473.951
(25.794)
(1,7)%
(1) This indicator is calculated comparing the value of net credit risk losses/reversals at the end of the period over the annual
average loans to customers (calculated quarterly).
(2) Risk Weighted Assets; the amount only relates to the credit risk.
NPL SEGMENT
This is the Banca Ifis Group’s Segment dedicated to non-recourse acquisition and managing secured and
unsecured distressed retail loans, as well as third party portfolio management. The business is closely
associated with converting non-performing loans into performing assets and collecting them.
The table below shows the loans portfolio of the Npl Segment, by method of transformation and accounting
criterion; the “impact through profit or loss” refers to the components of the net banking income deriving from
the booking at amortised cost of the related loans portfolio; in particular, interest income from amortised cost is
included for 150,4 million Euro and other components of the net interest income from cash flow changes for
122,5 million Euro, as reported in the summary table of “Economic data” below in this paragraph.
Banca Ifis | 2021 Consolidated financial statements and report
38
NPL SEGMENT
PORTFOLIO
(in thousands of Euro)
OUTSTANDIN
G NOMINAL
AMOUNT
CARRYING
AMOUNT
CARRYING
AMNT / RES.
NOM. AMNT
INTEREST
ON INCOME
STATEMENT
ERC
MAIN METHOD
OF ACCOUNTING
Cost
3.409.309
135.821
4,0%
-
298.801
Acquisition cost
Non-judicial
10.803.892
424.884
3,9%
119.608
733.319
of which: Collective
(curves)
10.321.164
201.624
2,0%
7.890
333.191
Cost = NPV of flows
from model
of which: Plans
482.728
223.260
46,2%
111.718
400.128
Cost = NPV of flows
from model
Judicial
7.617.793
916.976
12,0%
153.262
1.961.161
of which: Other positions
undergoing judicial
processing
2.009.769
270.796
13,5%
-
606.508
Acquisition cost
of which: Writs, Property
Attachments, Garnishment
Orders
1.528.290
481.867
31,5%
132.110
1.140.030
Cost = NPV of flows
from model
of which: Secured and
Corporate
4.079.734
164.313
4,0%
21.152
214.623
Cost = NPV of flows
from model
Total
21.830.994
1.477.681
6,8%
272.870
2.993.281
As shown in the table, the Npl Segment sector portfolio can be divided into three macro-categories:
• Cost: post-acquisition management, when all information retrieval operations take place to help decide
the most appropriate conversion method, the receivable is classified in a so-called "staging" area and
recognised at cost (135,8 million Euro at 31 December 2021, compared to 170,4 million Euro at 31
December 2020, mainly following the progressive release of the portfolios acquired in 2020, which
reduced the positions measured at cost at end December 2021) with no contribution to profit or loss. As
a rule, 6-12 months later, the positions are directed towards the most appropriate form of management,
depending on their characteristics;
• Non-judicial: non-judicial operations, which deal with practices that can be handled through collection
by settlement. Practices awaiting information about the most appropriate collection instrument are
classified into a basin called “mass management” and on 31 December 2021 come to 201,6 million Euro,
up 16% compared with 173,8 million Euro at 31 December 2020. Practices on which a realignment plan
has been agreed and formalised record an increase (35,3%), coming in at 223,3 million Euro on 31
December 2021 (165,0 million Euro at 31 December 2020);
• Judicial: legal management, which covers all practices in the various stages of legal processing, ranging
from obtaining a court order to a garnishment order. Practices awaiting the most appropriate legal action
are included in the category of “Other positions undergoing judicial processing” and come to 270,8
million Euro at 31 December 2021 (296,3 million Euro at 31 December 2020); practices in phases of writ,
attachment order and garnishment order are allocated to a specific basin, which records an increase of
9,5%, coming in at 481,9 million Euro as compared with the 440,2 million Euro recorded in December
2020. The judicial management basin includes all “Secured and Corporate” positions of corporate
banking origin or real estate, equal to 164,3 million Euro on 31 December 2021, as compared with 158,0
million Euro on 31 December 2020.
Finally, the Group occasionally seizes market opportunities in accordance with its business model by selling
portfolios of positions yet to be processed to third parties.
Banca Ifis | 2021 Consolidated financial statements and report
39
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Interest income from amortised cost
150.368
139.115
11.253
8,1%
Interest income notes and other minority
components
1.814
925
889
96,1%
Other components of net interest income from
change in cash flow
122.097
42.487
79.610
187,4%
Funding costs
(26.674)
(29.208)
2.534
(8,7)%
Net interest income
247.605
153.319
94.286
61,5%
Net commission income
3.357
4.320
(963)
(22,3)%
Other components of net banking income
136
303
(167)
(55,1)%
Gain on sale of receivables
6.459
5.000
1.459
29,2%
Net banking income
257.556
162.942
94.614
58,1%
Net credit risk losses/reversals
(17.996)
-
(17.996)
n.a.
Net profit (loss) from financial activities
239.560
162.942
76.618
47,0%
Operating costs
(166.107)
(139.122)
(26.985)
19,4%
Pre-tax profit from continuing operations
73.453
23.820
49.633
208,4%
Income taxes for the year relating to current
operations
(23.204)
(5.894)
(17.310)
293,7%
Profit (loss) for the year
50.249
17.926
32.323
180,3%
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Interest income from amortised cost
38.802
35.348
3.454
9,8%
Interest income notes and other minority
components
603
2
601
n.s.
Other components of net interest income from
change in cash flow
34.437
14.677
19.760
134,6%
Funding costs
(6.865)
(7.974)
1.109
(13,9)%
Net interest income
66.977
42.053
24.924
59,3%
Net commission income
1.664
1.294
370
28,6%
Other components of net banking income
472
566
(94)
(16,6)%
Gain on sale of receivables
4.192
2.306
1.886
81,8%
Net banking income
73.305
46.219
27.086
58,6%
Net credit risk losses/reversals
(1.022)
-
(1.022)
n.a.
Net profit (loss) from financial activities
72.283
46.219
26.064
56,4%
Operating costs
(45.811)
(39.117)
(6.694)
17,1%
Pre-tax profit from continuing operations
26.472
7.102
19.370
272,7%
Income taxes for the period relating to
continuing operations
(8.362)
(1.960)
(6.402)
326,6%
Profit (loss) for the period
18.110
5.142
12.968
252,2%
The net profit from financial activities of the Npl Segment therefore amounted to 239,6 million Euro (162,9 million
Euro at 31 December 2020, up 47,0%). The significant increase in this result as compared with last year is due to
Banca Ifis | 2021 Consolidated financial statements and report
40
the changed economic-health situation that struck the country last year and the effects of which have today
been very much attenuated. In actual fact, in March 2020, widespread court closure was ordered by the
government, which resulted in a halt to legal collections and, consequently, a paralysis of the production of legal
deeds to recover equity from third parties.
More specifically, “Interest income from amortised cost”, referring to the interest accruing at the original
effective interest rate, rose 8,1% from 139,1 million Euro to 150,4 million Euro at 31 December 2021, largely
thanks to the increase in receivables at amortised cost.
The item “Other components of net interest income from changes in cash flow” increased from 42,5 million Euro
in 2020 to 122,5 million Euro at 31 December 2021, precisely due to the changed pandemic context. This item
includes:
• out-of-court settlements of 65,6 million Euro, consisting of 83,4 million Euro in connection with recovery
plans, and negative changes of 17,8 million Euro in connection with the valuation of statistical curves;
• legal expenses of 56,9 million Euro, almost entirely due to the contribution of actions for injunction,
attachment and garnishment orders.
The cost of funding decreased compared to the same period of the previous year due to a reduction in the internal
transfer rate.
The reduction in net commission income on the 2020 figure is due to both the increase in commission payable
on collections and payments and the reduction in commission income deriving from servicing activities on third
party portfolios.
The item “Net adjustments/reversals for credit risk” refers to the write-down of receivables following a detailed
analysis, carried out also in response to the Covid-19 pandemic, in terms of greater collection times, mainly on
higher vintage positions.
In line with debt collection activities, operating costs rise by 19,4% on the 2020 figure, going from 139,1 million
Euro at 31 December 2020, to 166,1 million Euro at 31 December 2021. This increase is essentially due to the
variable costs linked to debt collection.
Consequently, period profit of the Npl Segment is 50,2 million Euro, up 180,3% on last year thanks to the recovery
of all business activities.
Below is the breakdown of net loans by supervisory risk category.
STATEMENT OF FINANCIAL POSITION DATA
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Net bad loans
1.106.996
1.041.196
65.800
6,32%
Net unlikely to pay
343.143
339.799
3.344
0,98%
Net non-performing past due exposures
4.025
90
3.935
n.s.
Total net non-performing exposures to
customers (stage 3)
1.454.164
1.381.085
73.079
5,29%
Net performing exposures (stages 1 and 2)
69.864
24.518
45.346
184,95%
Total on-balance-sheet receivables due from
customers
(1)
1.524.028
1.405.603
118.425
8,43%
(1) Total on-balance-sheet receivables due from customers include loans connected with the servicing activity for 1,4 million Euro
and 1,9 million Euro respectively at 31 December 2021 and 31 December 2020.
Banca Ifis | 2021 Consolidated financial statements and report
41
The Npl Segment's receivables qualify as POCI - Purchased or originated credit-impaired -, the category
introduced by the accounting standard IFRS 9. These are loans that were non-performing at the date they were
acquired or originated.
KPI
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Nominal amount of receivables managed
21.830.994
19.787.379
2.043.615
10,33%
RWA
(1)
2.339.110
2.211.695
127.415
5,8%
(1) Risk Weighted Assets; the amount only relates to the credit risk.
Total Estimated Remaining Collections (ERC) amounted to approximately 2,9 billion Euro.
NPL SEGMENT NON-PERFORMING LOAN PORTFOLIO PERFORMANCE
31.12.2021
31.12.2020
Opening loan portfolio
1.403.711
1.278.220
Purchases
177.306
224.291
Sales
(18.440)
(26.095)
Gains on sales
6.461
5.000
Interest income from amortised cost
150.368
139.114
Other components of interest from change in cash flow
122.502
42.538
Adjustments to receivables
(17.997)
-
Collections
(346.230)
(259.357)
Closing loan portfolio
1.477.681
1.403.711
The total paid for purchases in 2021 amounted to 177,3 million Euro, down from 224,3 million Euro in the previous
year, essentially due to more purchases made in the secondary market. In 2021, sales were completed for a total
price of approximately 18,4 million Euro, which generated profits of about 6,5 million Euro.
The item “Collections”, equal to 346,2 million Euro at 31 December 2021, includes the instalments collected
during the year from repayment plans, from garnishment orders and transactions carried out rises by 33,5% on
the collections of 259,4 million Euro made in 2020.
Similarly, funding from settlement plans (equal to the nominal amount of all the instalments under the plans
entered into with the debtors in the year) was up, reaching 427,9 million Euro at 31 December 2021 compared to
316,9 million Euro at 31 December 2020.
At 31 December 2021, the portfolio managed by the Npl Segment included 2.100.273 positions, for a nominal
amount of 21,8 billion Euro.
GOVERNANCE & SERVICES AND NON-CORE SEGMENT
The Segment comprises, among other things, the resources required for the performance of the services of the
Planning and Management Control, Finance, Operations, Marketing Communication and External Relations and
HR, as well as the structures responsible for raising, managing and allocating financial resources to the
operating Segments. The Segment in question also includes the Proprietary Finance business (proprietary
securities desk) and the sub-fund Cap.Ital.Fin. S.p.A., a company operative in salary- or pension-backed loans.
Banca Ifis | 2021 Consolidated financial statements and report
42
The Segment also includes run-off portfolios originated from the former Interbanca as well as other personal
loan portfolios.
INCOME STATEMENT DATA
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ASSOLUTA
%
Net interest income
52.500
74.476
(21.976)
(29,5)%
Net commission income
(1.029)
(237)
(792)
334,2%
Other components of net banking income
10.273
7.939
2.334
29,4%
Net banking income
61.744
82.178
(20.434)
(24,9)%
Net credit risk losses/reversals
(14.168)
(18.877)
4.709
(24,9)%
Net profit (loss) from financial activities
47.576
63.301
(15.725)
(24,8)%
Operating costs
(55.659)
(48.889)
(6.770)
13,8%
Value adjustments of goodwill
-
(700)
700
(100,0)%
Gain on disposal of investments
-
24.161
(24.161)
(100,0)%
Pre-tax profit from continuing operations
(8.083)
37.873
(45.956)
(121,3)%
Income taxes for the year relating to current
operations
2.328
(9.372)
11.700
(124,8)%
Profit (loss) for the year
(5.755)
28.501
(34.256)
(120,2)%
INCOME STATEMENT DATA
(in thousands of Euro)
4th QUARTER
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
11.175
34.408
(23.233)
(67,5)%
Net commission income
(440)
(812)
372
(45,8)%
Other components of net banking income
(930)
3.146
(4.076)
(129,6)%
Net banking income
9.805
36.742
(26.937)
(73,3)%
Net credit risk losses/reversals
(693)
(1.230)
537
(43,7)%
Net profit (loss) from financial activities
9.112
35.512
(26.400)
(74,3)%
Operating costs
(20.560)
(3.895)
(16.665)
n.s.
Value adjustments of goodwill
0
(700)
700
(100,0)%
Pre-tax profit from continuing operations
(11.448)
30.917
(42.365)
(137,0)%
Income taxes for the period relating to
continuing operations
3.391
(7.735)
11.126
(143,8)%
Profit (loss) for the period
(8.057)
23.182
(31.239)
(134,8)%
The Segment's net banking income amounted to 61,7 million Euro, down 20,4 million Euro compared to last year:
in particular, the Segment saw an increase in the margin of the Governance & Services Area of 9,2 million Euro,
easily offset by the reduction in the contribution made by the Non-Core Area of 29,6 million Euro. This variation
can be broken down as follows:
• the interest margin has decreased overall by 22,0 million Euro as compared with 31 December 2020.
This negative change is mainly due to the reduction in the interest margin of the Non-Core portfolio in
run-off and the consequent physiological reduction of the PPA reversal, which, moreover, in 2020 had
benefited from the acceleration of release consequent to the significant sales of receivables under
Banca Ifis | 2021 Consolidated financial statements and report
43
GACS. The total effect of this reduction, equal to approximately 35 million Euro, is only partially offset
by the contribution of the Proprietary Finance division (10,0 million Euro) and the contribution of the
Treasury division (2,0 million Euro);
• net commission is down 0,8 million Euro mainly due to costs relating to the self-securitisation
transaction performed by the Banca Ifis Group in 2021 regarding Npl Segment loans (1,7 million Euro);
• other components of net banking income grew by 2,3 million Euro. This positive change is mainly due to
the Proprietary Finance business for 5,7 million Euro, thanks to higher dividends received from the
Group's securities portfolio and better results on trading and hedging, and to the higher positive
contribution of the Non-Core portfolio for 4,4 million Euro related to the sale of two operations of the
Workout & Recovery division and lower write-downs of the portfolio at fair value compared to the
previous year. These positive effects were partially offset by the impact of 7,4 million Euro in terms of
lower gains from the repurchase of bonds issued in 2020 by the Treasury area, and the negative
difference of 0,4 million Euro in terms of the exchange rate effect comparing the two periods.
In terms of funding, Rendimax continues to constitute the Group’s main source of finance, with a comprehensive
cost of approximately 56,0 million Euro, lower than last year (60,1 million Euro) due to the decrease in average
assets under management (4.293 million Euro at 31 December 2021 as compared with 4.400 million Euro at 31
December 2020, -2,4%) and average rates falling below FY 2020 (1,30% versus 1,36%). As of 31 December 2021
the carrying amount of bonds amounts to 1.056,7 million Euro, following the full repayment of 62,6 million Euro
of a bond issued by the incorporated company Interbanca, which has reached its natural maturity. In economic
terms, interest expense accrued on all issues dropped by 3,8 million Euro, coming in at a total of 31,4 million Euro
(as compared with 35,2 million Euro in 2020).
Funding raised through securitisations amounted to 1.448 million Euro at 31 December 2021, up by 329 million
Euro compared to 31 December 2020, when the figure stood at 1.119 million Euro. The increase derives mainly
from the 2021 restructuring of a securitisation arranged by the subsidiary Farbanca, with the issue of new
securities for a total of 390,2 million Euro of senior notes in issue.
Access is also noted to funding through TLTRO transactions for a carrying amount of 2.033,9 million Euro.
As regards the cost of credit, a decrease is seen to net adjustments, which come to 14,2 million Euro, as
compared with 18,9 million Euro at 31 December 2020. This change is mainly attributable to the Non-Core Area
due to the natural depletion of the run-off portfolio.
Operating costs come to 55,7 million Euro, up 6,8 million Euro on 31 December 2020. The change is mainly due
to non-recurring effects that affected the two periods under comparison. In particular, FY 2021 includes 11,5
million Euro in one-off costs linked to the transfer of the registered office of the parent company La Scogliera,
only partly offset by other income of 2,9 million Euro connected with the bargain on the purchase of the former
Aigis Banca business unit, by contrast FY 2020 included other operating income for 16,8 million Euro relating to
the bargain on Farbanca, offset by 11,3 million Euro in provisions for credit risks on commitments and
guarantees given and for probable contractual indemnities and 6,9 million Euro relative to the provision made to
the employee solidarity fund.
At 31 December 2021, total net receivables for the Segment amounted to 2.281,3 million Euro, up 31,3% on the
figure at 31 December 2020 (1.737,2 million Euro). The increase of approximately 544,1 million Euro is
substantially linked to the purchase of government securities by Proprietary Finance. At the same time, run-off
loan portfolios in the Segment decreased by about 149,2 million Euro.
Banca Ifis | 2021 Consolidated financial statements and report
44
The Segment's net impaired receivables decreased by 2,2%, to 48,8 million Euro, while performing receivables
increased by 32,3% due to the above-mentioned activities of the Proprietary Finance business in the area of
government securities. Government securities included in the Segment amount to 1.648,6 million Euro (1.095,3
million Euro at 31 December 2020). The increased weight of government bonds has also led to a reduction in
relative coverage. Therefore, without considering government securities, coverage of performing loans would be
1,0% at end 2021, substantively in line with the corresponding figure of 2020.
It should be noted that within the Governance & Services and Non-Core Segment, there are receivables belonging
to the POCI category, mainly referring to the business combination with the former GE Capital Interbanca Group:
• net non-performing loans: 19,9 million Euro at 31 December 2021, down on the 25,1 million Euro of 31
December 2020;
• net performing exposures: 18,5 million Euro at 31 December 2021, up compared to the 17,2 million Euro
at 31 December 2020.
Impaired loan coverage, impacted by these POCIs, the gross value of which is already impacted by the forecast
losses, increased from 34,9% at 31 December 2020 to 38,7% at the end of 2021.
The following table shows the gross and net amounts as well as the relevant coverage ratios of receivables due
from customers for each supervisory risk category.
GOVERNANCE & SERVICES AND
NON-CORE SEGMENT
(in thousands of Euro)
BAD LOANS
UNLIKELY TO
PAY
PAST DUE
EXPOSURES
TOTAL NON-
PERFORMING
(STAGE 3)
PERFORMING
(STAGES 1 AND
2)
TOTAL LOANS
(1)
POSITION AT 31.12.2021
Nominal amount
20.339
50.762
8.596
79.696
2.238.471
2.318.167
Impairment losses
(7.142)
(21.481)
(2.232)
(30.854)
(6.017)
(36.871)
Carrying amount
13.197
29.281
6.364
48.842
2.232.454
2.281.296
Coverage ratio
35,1%
42,3%
26,0%
38,7%
0,3%
1,6%
POSITION AT 31.12.2020
Nominal amount
22.090
51.180
3.479
76.749
1.695.232
1.771.981
Impairment losses
(6.424)
(19.612)
(769)
(26.805)
(7.968)
(34.773)
Carrying amount
15.666
31.568
2.710
49.944
1.687.264
1.737.208
Coverage ratio
29,1%
38,3%
22,1%
34,9%
0,5%
2,0%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,8 million Euro (1.095,3 million Euro at 31 December 2020).
The decrease in net non-performing loans is mainly due to a sale of loans within a broader securitisation
transaction with state guarantee (“GACS”).
Banca Ifis | 2021 Consolidated financial statements and report
45
2.10 Group financial and income results
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
2.10.1 Statement of financial position items
RECLASSIFIED STATEMENT OF FINANCIAL
POSITION HIGHLIGHTS
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Cash and cash equivalents
355.381
291.602
63.779
21,9%
Financial assets mandatorily measured at fair
value through profit or loss
144.660
136.978
7.682
5,6%
Financial assets measured at fair value through
other comprehensive income
614.013
774.555
(160.542)
(20,7)%
Receivables due from banks measured at
amortised cost
524.991
791.761
(266.770)
(33,7)%
Receivables due from customers measured at
amortised cost
10.331.804
9.135.402
1.196.402
13,1%
Property, plant and equipment and intangible
assets
181.863
176.119
5.744
3,3%
Tax assets
329.674
381.431
(51.757)
(13,6)%
Other assets
495.505
338.348
157.157
46,4%
Total assets
12.977.891
12.026.196
951.695
7,9%
Payables due to banks measured at amortised
cost
2.597.965
2.367.082
230.883
9,8%
Payables due to customers measured at
amortised cost
5.683.745
5.471.874
211.871
3,9%
Debt securities issued
2.504.878
2.069.083
435.795
21,1%
Tax liabilities
49.154
48.154
1.000
2,1%
Provisions for risks and charges
66.825
53.944
12.881
23,9%
Other liabilities
451.436
466.097
(14.661)
(3,1)%
Group equity
1.623.888
1.549.962
73.926
4,8%
Total liabilities and equity
12.977.891
12.026.196
951.695
7,9%
Cash and cash equivalents
As of 31 December 2021 this item amounts to 355,4 million Euro, and includes, in compliance with the
requirements for balance sheet items set out in the 7th October 2021 update of Bank of Italy Circular no.
262/2005, on demand receivables due from banks, which were previously reported under financial assets
measured at amortised cost (355,3 million Euro). Solely for the purpose of enabling a like-for-like comparison to
be made, the figures for the previous year have been restated on a conventional basis on the basis of these new
provisions, and therefore the related sight receivables due from banks have been transferred from the item “Due
from banks valued at amortised cost” to the item “Cash and cash equivalents” (291,5 million Euro).
Banca Ifis | 2021 Consolidated financial statements and report
46
Financial assets mandatorily measured at fair value through profit or loss
Financial assets mandatorily measured at fair value through profit or loss total 144,7 million Euro at 31 December
2021. This item consists of loans and debt securities that did not pass the SPPI test, equity securities from
minority shares and UCITS units.
The increases in debt securities relate to new subscriptions in securities of NPL loan securitisations for 12,4
million Euro.
The growing performance of equities is consistent with the Equity Investment team's expansive strategy, which
resulted in net new investments of approximately 2,3 million Euro during the year, and saw net revaluations of
3,5 million Euro in equities held.
In the area of UCITS, non-strategic securities of the Proprietary Finance function were divested for approximately
10 million Euro, and this effect was offset by the enhancement of the existing portfolio and new equity
investments.
In the case of loans measured at fair value, the trend is related to a significant early repayment.
Financial assets measured at fair value through other comprehensive income
FINANCIAL ASSETS MEASURED AT FAIR VALUE
THROUGH OTHER COMPREHENSIVE INCOME
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Debt securities
515.277
721.216
(205.939)
(28,6)%
Equity securities
98.736
53.339
45.397
85,1%
Total
614.013
774.555
(160.542)
(20,7)%
Financial assets measured at fair value through other comprehensive income totalled 614,0 million Euro at 31
December 2021, down 20,7% from December 2020, and included the debt securities that passed the SPPI test
as well as equity securities for which the Group elected the so-called OCI option pursuant to IFRS 9.
The debt securities held in the portfolio at 31 December 2021 total 515,3 million Euro, down 28,6% with respect
to the balance at 31 December 2020. Government securities held in the portfolio as of 31 December 2021 amount
to 469,6 million Euro. The net negative fair value reserve for these debt securities comes to a total of 3,7 million
Euro, down on the positive balance of 1,8 million Euro at 31 December 2020.
Here below is the breakdown by maturity of the debt securities held.
FINANCIAL ASSETS MANDATORILY MEASURED
AT FAIR VALUE THROUGH PROFIT OR LOSS
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Debt securities
15.889
3.532
12.357
349,9%
Equity securities
26.490
20.683
5.807
28,1%
UCITS units
79.052
81.479
(2.427)
(3,0)%
Loans
23.229
31.284
(8.055)
(25,7)%
Total
144.660
136.978
7.682
5,6%
Banca Ifis | 2021 Consolidated financial statements and report
47
Issuer/Maturity
1 year
2 years
3 years
5 years
Over 5 years
Total
Government bonds
276.234
-
-
29.197
164.216
469.647
% of total
53,6%
-
-
5,7%
31,9%
91,1%
Banks
-
2.079
6.252
255
-
8.586
% of total
-
0,4%
1,2%
0,0%
-
1,7%
Other issuers
-
-
-
20.845
16.199
37.044
% of total
-
-
-
4,0%
3,1%
7,2%
Total
276.234
2.079
6.252
50.297
180.415
515.277
% of total
53,6%
0,4%
1,2%
9,8%
35,0%
100,0%
Equity securities measured at fair value with an impact on comprehensive income amount to 98,7 million Euro
at 31 December 2021, up 85,1% on 31 December 2020, and are mainly attributable to shares in the Bank of Italy
(30,0 million Euro), interests in leading companies in the banking and insurance sector (24,0 million Euro), the
energy sector (21,5 million Euro) and telecommunications (8,5 million Euro). The increase of 45,4 million Euro is
consistent with the strategy of creating a proprietary portfolio that guarantees stable dividends. The associated
net fair value reserve shows a negative balance of 12,5 million Euro at the end of 2021, which is substantially in
line with the figure at 31 December 2020.
Receivables due from banks measured at amortised cost
Total receivables due from banks measured at amortised cost amounted to 525,0 million Euro at 31 December
2021.
As of 31 December 2021, the item consists of receivables from central banks in the amount of 351,1 million Euro
(693,8 million Euro as of 31 December 2020), which constitute the funding maintained in order to ensure the
orderly performance of management activities. The remaining balance relates to bank debt securities measured
at amortised cost of 140,4 million Euro, a significant increase compared to the balance of 56,7 million Euro at 31
December 2020, and various loans falling due for 33,4 million Euro (41,2 million Euro at the end of 2020).
In an overall view, cash and cash equivalents and loans to banks recorded a decrease in 2021, which, especially
in the last quarter, was driven by the distribution of 2019 dividends, the decrease in Rendimax deposits (155
million Euro), the run-off of non-resident deposits (25 million Euro), as well as new purchases of Npl portfolios
and an increase in the turnover of the Factoring Area.
Banca Ifis | 2021 Consolidated financial statements and report
48
Receivables due from customers measured at amortised cost
RECEIVABLES DUE FROM CUSTOMERS
BREAKDOWN BY SEGMENT
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Commercial & Corporate Banking Segment
6.526.880
5.992.591
534.288
8,9%
- of which non-performing
233.886
160.826
73.060
45,4%
Factoring Area
2.940.072
2.755.488
184.584
6,7%
- of which non-performing
167.496
115.783
51.714
44,7%
Leasing Area
1.390.223
1.414.055
(23.832)
(1,7)%
- of which non-performing
16.745
11.377
5.368
47,2%
Corporate Banking & Lending Area
2.196.584
1.823.048
373.536
20,5%
- of which non-performing
49.645
33.666
15.979
47,5%
Npl Segment
1.523.628
1.405.603
118.025
8,4%
- of which non-performing
1.454.164
1.381.085
73.079
5,3%
Governance & Services and Non-Core
Segment
(1)
2.281.296
1.737.208
544.088
31,3%
- of which non-performing
48.842
49.944
(1.102)
(2,2)%
Total receivables due from customers
10.331.804
9.135.402
1.196.402
13,1%
- of which non-performing
1.736.892
1.591.855
145.037
9,1%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,6 million Euro (1.095,3 million Euro at 31 December 2020).
Total receivables due from customers measured at amortised cost amounted to 10.331,8 million Euro, +13,1%
on 31 December 2020 (9.135,4 million Euro). The item includes debt securities for 2,0 billion Euro (1,3 billion at
31 December 2020), of which government securities for 1,6 billion Euro. The growth of the Commercial &
Corporate Banking Segment (+8,9%) is concentrated in the Corporate Banking & Lending Business Area (+20,5%),
followed by the Factoring Area (+6,7%), and the Npl Segment (+8,4%), while the Leasing Area is slightly bucking
the trend with a reduction of 1,7%. The Governance & Services and Non-Core Segment increased by 544,1 million
Euro, primarily due to the effect of debt securities purchases during 2021.
Total net non-performing exposures, which are significantly affected by the receivables of the Npl Segment,
amounted to 1.736,9 million Euro at 31 December 2021, compared to 1.591,9 million Euro at 31 December 2020
(+9,1%), mainly following the greater contribution made by the Npl Segment.
Net of these receivables, impaired receivables amounted to 282,7 million Euro, up from the balance of 210,8
million Euro at 31 December 2020 mainly due to the increase in non-performing exposures in the Factoring Area
due to the classification of receivables due from the Public Administration as non-performing past due
exposures.
For a detailed analysis of receivables due from customers, please see the section “Contribution of operating
Segments to Group results”.
Intangible assets and property, plant and equipment
Intangible assets came to 61,6 million Euro, basically in line with those at 31 December 2020 of 61,0 million Euro
(+1,1%).
Banca Ifis | 2021 Consolidated financial statements and report
49
The line item included 22,8 million Euro worth of software, 0,8 million Euro in goodwill arising from the
consolidation of the investment in Ifis Finance Sp. z o.o., and 38,0 million Euro for goodwill, consequent to the
acquisition of the former Fbs Group.
As regards the Group’s assessments on the impairment testing of such goodwill, please note that the results of
this test have supported the likelihood of recovery of both portions of goodwill booked. For more details, we
would refer you to the more detailed information given in Part B - Consolidated Statement of Financial Position,
Section 10 - Intangible assets - Item 100, Paragraph 10.3 Other information of these Consolidated Financial
Statements.
Property, plant and equipment amounted to 120,3 million Euro, compared with 115,1 million Euro at 31 December
2020, up 4,4% mainly due to the renovation of the building in Via Borghetto in Milan.
At the end of December 2021, the properties recognised under property, plant and equipment included the
important historical building “Villa Marocco”, located in Mestre – Venice and housing Banca Ifis's registered
office. Since Villa Marocco is a luxury property, it is not depreciated, but it is tested for impairment at least
annually. To this end, they are appraised by experts specialising in luxury properties. During the year, there were
no indications requiring to test the assets for impairment.
Tax assets and liabilities
These items include current and deferred tax assets and liabilities.
Tax assets amounted to 329,7 million Euro, down on the figure at 31 December 2020 (-13,6%).
Current tax assets amounted to 45,5 million Euro compared with 74,3 million Euro at 31 December 2020. The
decrease is driven by the use of existing receivables for offsetting purposes, including 21 million Euro deriving
from the conversion of former “Cura Italia” DTAs.
Prepaid tax assets come to 284,1 million Euro as compared with 307,2 million Euro at 31 December 2020 and
mainly comprise 205,4 million Euro (down on the balance at 31 December 2020) assets entered for impairment
of loans, potentially able to be transformed into tax credits and 39,4 million Euro assets entered on previous tax
losses and the ACE benefit (51,1 million Euro at 31 December 2020).
Tax liabilities totalled 49,2 million Euro, up 2,1% from 31 December 2020, equal to 48,1 million Euro.
Current tax liabilities, amounting to 16,7 million Euro, represent the tax burden for the year (+38,9% on the 12,0
million Euro at 31 December 2020).
Deferred tax liabilities, totalling 32,5 million Euro, are down by 3,7 million Euro on the balance of the previous
year and largely included 28,8 million Euro in receivables for interest on arrears that will be taxed upon receipt,
0,3 million Euro in the revaluation of property, and 2,8 million Euro in other mismatches of trade receivables and
0,4 million Euro relative to financial assets measured at fair value through other comprehensive income (FVOCI).
Tax assets are included in the calculation of “capital requirements for credit risk” in accordance with (EU)
Regulation no. 575/2013 (CRR) as subsequently amended, which was transposed in the Bank of Italy's Circulars
no. 285 and no. 286.
Here below is the breakdown of the different treatments by type and the relevant impact on CET1 and risk-
weighted assets at 31 December 2021:
• the “deferred tax assets that rely on future profitability and do not arise from temporary differences” are
deducted from CET1; at 31 December 2021, the 100% deduction amounted to 39,4 million Euro, offset
Banca Ifis | 2021 Consolidated financial statements and report
50
for 14 million Euro by the corresponding deferred tax liabilities and including the Holding of the Banking
Group: in this regard, please note that this deduction will be gradually absorbed by the future use of such
deferred tax assets;
• the “deferred tax assets that rely on future profitability and arise from temporary differences” are not
deducted from CET1 and receive instead a 250% risk weight: at 31 December 2021, these assets,
including those pertaining to the Holding Company of the Banking Group, amounted to 33,7 million Euro
and are offset by 18,4 million Euro from the corresponding deferred tax liabilities;
• the “deferred tax assets pursuant to Italian Law no. 214/2011”, concerning impairment losses on
receivables that can be converted into tax credits, receive a 100% risk weight; at 31 December 2021, the
corresponding weight totalled 205,3 million Euro;
• “current tax assets” receive a 0% weight as they are exposures to the Central Government.
Overall, the Tax Assets recognised at 31 December 2021 and 100% deducted from Own Funds resulted in an
expense amounting to 0,27% as a proportion of CET1, which will decline in the future as said assets are utilised
against taxable income.
Other assets and liabilities
Other assets, of 495,5 million Euro as compared to a balance of 338,3 million Euro at 31 December 2020, include:
• Financial assets held for trading for 8,5 million Euro (down 59,4% on the figure of 20,9 million Euro of 31
December 2020), referring 7,0 million Euro to derivative transactions (which decrease significantly on
the figure of 19,3 million Euro at end 2020, for the unwinding during the period of numerous positions in
derivatives following the closure of the underlying credit positions), offset by mirrored positions,
similarly reducing, entered amongst the financial liabilities held for trading and 1,5 million Euro in
securities included in the Group’s trading book;
• Other assets for 487,0 million Euro (317,5 million Euro at 31 December 2020), of which 22,9 million Euro
refer to the receivable due from the parent company La Scogliera S.p.A. by virtue of the tax consolidation
agreements (83,3 million Euro at 31 December 2020). The increase in the item is driven by the purchase
of tax credits for superbonus and other building tax bonuses for 295,7 million Euro (corresponding to a
nominal amount of 340,9 million Euro), only partially offset by the collections of the IRES tax credit for
55,2 million Euro previously transferred to La Scogliera and the credit of 14,1 million Euro due from the
General Electric Group and relating to the indemnity due to the effect of adhesion to the 2019 tax peace,
as well as lower advances to suppliers for 26,9 million Euro.
Other liabilities come to 451,4 million Euro as compared with 466,1 million Euro at 31 December 2020, and
consist of:
• trading derivatives for 6,0 million Euro, mainly referring to transactions mirrored to positions entered
amongst financial assets held for trading, which has decreased significantly on the figure of 18,6 million
Euro at 31 December 2020, as described previously;
• 9,3 million Euro liabilities for post-employment benefits (9,2 million Euro at 31 December 2020);
• 436,1 million Euro for other liabilities (438,3 million Euro at 31 December 2020), largely referred to
amounts due to customers that have not yet been credited (20,6 million Euro), as well as a 26,1 million
Euro payable to the parent company La Scogliera and operating payables for approximately 93,8 million
Euro. Operating payables include the liability connected with the estimate of costs associated with the
transfer of the registered office of the parent company La Scogliera to Switzerland for 11,5 million Euro
(for further details, please see section “2.13 Significant events occurred during the year”).
Banca Ifis | 2021 Consolidated financial statements and report
51
Funding
FUNDING
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Payables due to banks
2.597.965
2.367.082
230.883
9,8%
- Payables due to Central banks
2.236.942
2.116.961
119.981
5,7%
of which: TLTRO
2.033.870
1.994.722
39.148
2,0%
of which: Other deposits
203.073
122.239
80.834
66,1%
- Repurchase agreements
217.512
-
217.512
n.a.
- Other payables
143.511
250.121
(106.610)
(42,6)%
Payables due to customers
5.683.745
5.471.874
211.871
3,9%
- Repurchase agreements
-
-
-
n.a.
- Retail
4.517.172
4.459.954
57.218
1,3%
- Other term deposits
239.986
280.484
(40.498)
(14,4)%
- Lease payables
16.127
16.891
(764)
(4,5)%
- Other payables
910.460
714.545
195.915
27,4%
Debt securities issued
2.504.878
2.069.083
435.795
21,1%
Total funding
10.786.588
9.908.039
878.549
8,9%
Total funding as of 31 December 2021 was 10.786,6 million Euro, up 8,9% from 31 December 2020. Amounts due
to customers continue to represent the majority of funding at 52,7% (55,2% as of 31 December 2020), followed
by amounts due to banks at 24,1% (23,9% as of 31 December 2020), and securities issued at 23,2% (20,9% as of
31 December 2020).
Payables due to customers at 31 December 2021 totalled 5.683,7 million Euro. The increase is mainly driven by
growth in current accounts on demand, also thanks to the contribution of the business unit deriving from the
former Aigis Banca, offset by a contraction in time deposits.
RETAIL FUNDING
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Short-term funding (within 18 months)
3.114.532
3.196.110
(81.578)
(2,6)%
of which: DEREGULATED
785.004
723.240
61.764
8,5%
of which: LIKE/ONE
1.033.539
1.084.400
(50.861)
(4,7)%
of which: RESTRICTED
1.217.976
1.316.288
(98.312)
(7,5)%
of which: GERMAN DEPOSIT
78.013
72.182
5.831
8,1%
Long-term funding (beyond 18 months)
1.402.640
1.263.844
138.796
11,0%
Total funding
4.517.172
4.459.954
57.218
1,3%
Payables due to banks amounted to 2.598,0 million Euro, up 9,8% compared to 31 December 2020, mainly due
to new repurchase agreements (+ 217,5 million Euro) with the securitisation notes issued by the subsidiary Ifis
Npl Investing as underlying assets.
Securities issued amounted to 2.504,9 million Euro at 31 December 2021, up on the 2.069,1 million Euro of 31
December 2020. The increase is substantially due to the restructuring of the Emma securitisation for 390 million
Banca Ifis | 2021 Consolidated financial statements and report
52
Euro and the increase in securities issued by the special purpose vehicle Ifis Abcp Programme S.r.l. for 88,7
million Euro with a view to optimising the Group's funding, the positive effects of which were partially offset by
the full repayment for 62,7 million Euro of the bonds issued by the former Interbanca, which matured in March
2021. The line item also comprised 654,4 million Euro (including interest) in senior bonds issued by Banca Ifis,
as well as the 402,3 million Euro (including interest) Tier 2 bond.
Provisions for risks and charges
PROVISIONS FOR RISKS AND CHARGES
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Provisions for credit risk related to
commitments and financial guarantees
granted
11.938
10.988
950
8,6%
Legal and tax disputes
36.832
21.016
15.816
75,3%
Personnel expenses
4.319
7.148
(2.829)
(39,6)%
Other provisions
13.736
14.792
(1.056)
(7,1)%
Total provisions for risks and charges
66.825
53.944
12.881
23,9%
As of 31 December 2021, total provisions for risks and charges amounted to 66,8 million Euro, up 12,9 million
Euro on the previous year. The positive change in the balance sheet is primarily due to the contribution deriving
from the acquisition of the business unit of the former Aigis Banca for 11,4 million Euro (directly recorded as
greater liabilities, of which 1,2 million Euro already included in the book value of the business unit acquired and
10,2 million Euro as a greater liability recorded at the time of the PPA). For more details, refer to Part G “Business
combinations” of the Notes.
Below is the breakdown of the provision for risks and charges at the end of 2021 by type of dispute compared
with the amounts for the prior year.
Provisions for credit risk related to commitments and financial guarantees granted
At 31 December 2021, the balance of 11,9 million Euro, an increase of 8,6% on the figure at the previous year
(11,0 million Euro), reflects the write-down of the financial guarantees and irrevocable commitments to disburse
funds given by the Group.
Legal and tax disputes
At 31 December 2021, provisions had been made for 36,8 million Euro for legal and tax disputes. This amount
mainly breaks down as follows:
• 11,5 million Euro relating to the contribution of the business unit of the former Aigis Banca, acquired in
May 2021 and directly recorded as a greater liability, of which 1,2 million Euro was already included in
the book value of the business unit acquired and 10,2 million Euro as a greater liability recorded at the
time of the PPA;
• 11,5 million Euro for 27 disputes concerning the Trade Receivables Area (the plaintiffs seek 31,7 million
Euro in damages); these disputes are mainly connected with the request for the repetition of amounts
collected or payments under guarantee in relation to factoring positions without recourse;
• 8,3 million Euro (the plaintiffs seek 62,6 million Euro in damages) for 10 disputes concerning the
Corporate Banking & Lending Area deriving from the former Interbanca;
• 2,3 million Euro (the plaintiffs seek 2,6 million Euro in damages) for 26 disputes concerning the Leasing
Area;
Banca Ifis | 2021 Consolidated financial statements and report
53
• 1,9 million Euro (the plaintiffs seek 5,0 million Euro in damages) for 62 disputes concerning receivables
of the subsidiary Ifis Npl Investing;
• 0,7 million Euro for various disputes concerning Credifarma (the plaintiffs seek 1,5 million Euro in
damages);
• 433 thousand Euro (the plaintiffs seek 3,9 million Euro) for disputes with customers and agents relating
to Cap. Ital. Fin.;
• 138 thousand Euro for various disputes concerning Farbanca;
• 38 thousand Euro (the plaintiffs seek the same amount in damages) for disputes concerning the investee
Ifis Rental Services.
Personnel expenses
At 31 December 2021, provisions are entered for staff for 4,3 million Euro (7,1 million Euro at 31 December 2020),
of which 4,0 million Euro connected with the Employee Solidarity Fund established in 2020 to implement the
cost rationalisation programme envisaged by the Group.
Other provisions for risks and charges
At 31 December 2021, “Other provisions” were in place for 13,7 million Euro, down 7,1% on the 14,8 million Euro
recorded at 31 December 2020. The item mainly comprised 7,8 million Euro for probable contractual indemnities
for loan transfers, 4,6 million Euro for supplementary indemnities for customers connected with the operations
of the Leasing Area and 0,7 million Euro for the provision for complaints.
Consolidated equity
At 31 December 2021 Group consolidated Equity totalled 1.623,9 million Euro, an increase on the figure of 1.550,0
million Euro at 31 December 2020. The main changes in consolidated shareholders' equity are summarised in
the following tables.
EQUITY: BREAKDOWN
(in thousands of Euro)
AMOUNTS AT
CHANGE
31.12.2021
31.12.2020
ABSOLUTE
%
Share capital
53.811
53.811
-
0,0%
Share premiums
102.972
102.491
481
0,5%
Valuation reserves:
(25.435)
(19.337)
(6.098)
31,5%
- Securities
(16.233)
(10.733)
(5.500)
51,2%
- Post-employment benefits
(673)
(429)
(244)
56,9%
- Exchange differences
(8.529)
(8.175)
(354)
4,3%
Reserves
1.367.019
1.320.871
46.148
3,5%
Treasury shares
(2.847)
(2.948)
101
(3,4)%
Equity attributable to non-controlling
interests
27.786
26.270
1.516
5,8%
Net profit attributable to the Parent
company
100.582
68.804
31.778
46,2%
Consolidated equity
1.623.888
1.549.962
73.926
4,8%
Banca Ifis | 2021 Consolidated financial statements and report
54
EQUITY: CHANGES
(in thousands of Euro)
Consolidated equity at 31.12.2020
1.549.962
Increases:
103.566
Profit for the year attributable to the Parent company
100.582
Stock options
194
Changes in equity interests
71
Equity attributable to non-controlling interests
1.516
Other changes
1.202
Decreases:
29.640
Dividends distributed
25.132
Change in valuation reserve:
4.508
- Securities (net of realisations)
3.910
- Post-employment benefits
244
- Exchange differences
354
Consolidated equity at 31.12.2021
1.623.888
The change in the valuation reserve for the period was attributable to the fair value adjustment of the financial
instruments classified as “Financial assets measured at fair value through other comprehensive income”.
The item “Other changes” in the above table mainly includes changes in reserves connected with the Bank's
share-based remuneration mechanisms for senior management, other than stock options, explained separately.
Own funds and capital adequacy ratios
The Board of Directors of the Holding Company of the “La Scogliera” Banking Group, which met in an
extraordinary meeting on 27 December 2021, having acknowledged the fulfilment of the conditions precedent
attached to the resolution of the extraordinary meeting on 18 June 2021, resolved to approve the transfer of the
registered office outside the European Union (Switzerland with Lausanne office) and the related change of name
to La Scogliera SA with the secondary office remaining in Italy.
On the basis of the changes made at corporate level recorded early 2022, the consolidated capital requirements
were calculated without the inclusion of La Scogliera Holding.
Banca Ifis | 2021 Consolidated financial statements and report
55
OWN FUNDS AND CAPITAL ADEQUACY RATIOS
(in thousands of Euro)
AMOUNTS AT
31.12.2021
31.12.2020
Common Equity Tier 1 Capital (CET1)
1.486.880
1.038.715
Tier 1 Capital (TIER1)
1.488.624
1.091.858
Total Own Funds
1.891.346
1.366.421
Total RWAs
9.633.003
9.203.971
CET1 ratio
15,44%
11,29%
TIER1 ratio
15,45%
11,86%
Total Capital Ratio
19,63%
14,85%
The CET1, TIER1 and Total Capital include earnings generated by the Banking Group as of 31 December 2021, net of the estimated
dividend.
Comparative figures refer to the scope of prudential consolidation at 31 December 2020. The same figures, restated on a like-for-
like basis on a conservative basis at 31 December 2021 would be: CET1 15,47%, TIER1 15,49% and Total Capital 19,87%.
Consolidated own funds, risk-weighted assets and prudential ratios at 31 December 2021 were calculated based
on the regulatory changes introduced by Directive no. 2019/878/EU (CRD V) and Regulation (EU) no. 876/2019
(CRR2), which amended the regulatory principles set out in Directive no. 2013/36/EU (CRD IV) and Regulation
(EU) no. 575/2013 (CRR), as subsequently amended, which were transposed in the Bank of Italy's Circulars no.
285 and no. 286.
For the purposes of calculating capital requirements at 31 December 2021, in continuity with what has been
done since 30 June 2020, the Group has applied the temporary support provisions set out in EU Regulation no.
873/2020 (the “quick-fix”).
EU Regulation no. 873/2020, relative to the transitional provisions aimed at attenuating the impact of the
introduction of IFRS 9 on Own funds - defines for entities the possibility of including in their common equity tier
1 a portion of the accruals gained for expected credit losses, through different operating methods of the
transitional period of reference (1 January 2018 - 31 December 2019 and 1 January 2020 - 31 December 2024).
At the time, Banca Ifis had already informed the Bank of Italy of its decision to apply the transitional provisions
for the entire period.
Said portion will be included in CET1 gradually and by applying the following factors:
TEMPORARY TREATMENT IFRS 9 2018-2019
TEMPORARY TREATMENT IFRS 9 2020-2024
0,70 from 1 January 2020 to 31 December 2020
1,00 from 1 January 2020 to 31 December 2020
0,50 from 1 January 2021 to 31 December 2021
1,00 from 1 January 2021 to 31 December 2021
0,25 from 1 January 2022 to 31 December 2022
0,75 from 1 January 2022 to 31 December 2022
0,00 from 1 January 2023 to 31 December 2023
0,50 from 1 January 2023 to 31 December 2023
0,00 from 1 January 2024 to 31 December 2024
0,25 from 1 January 2024 to 31 December 2024
Again with reference to the new provisions introduced by EU Regulation 873/2020 with a potential impact on
CET1, please note the temporary treatment of unrealised profit and losses due to changes in the fair value of
debt instruments issued by the central, regional and local administrations; Banca Ifis has informed the Bank of
Italy of its decision to apply the new transitional provisions starting 31 December 2020.
Said portion will be included in CET1 gradually and by applying the following factors.
Banca Ifis | 2021 Consolidated financial statements and report
56
TEMPORARY TREATMENT FOR OCI RESERVE
1,00 from 1 January 2020 to 31 December 2020
0,70 from 1 January 2021 to 31 December 2021
0,40 from 1 January 2022 to 31 December 2022
At 31 December 2021, taking into account the transitional treatment adopted to mitigate the impacts of IFRS 9
on CET 1 and the prudential filter for unrealised gains and losses on financial assets at fair value, Equity
amounted to 1.891 million Euro.
The positive effect of the deconsolidation of the parent company La Scogliera resulted in an increase in Equity
of 461 million Euro and a minimal impact on RWA of 9 million Euro.
Consolidated equity includes:
• IFRS 9 transitional adjustments, pursuant to Article 473 bis of the CRR, which amount to 31,9 million
Euro;
• the positive prudential filter relating to unrealised gains and losses measured at fair value from 31
December 2019, amounts to 2,5 million Euro;
• the exemption to the deduction of intangible assets attributable to software from the elements of CET1
for the portion of prudential amortisation calculated over three years in excess of the book amortisation;
at 31 December 2021, the portion not deducted amounted to 8,2 million Euro;
• the negative impact of the application of Calendar Provisioning is 2 million Euro.
The 524,9 million Euro increase in Own Funds compared to 31 December 2020 was largely attributable to the
following components:
• the positive effect of the deconsolidation of the parent company, La Scogliera, amounting to 461 million
Euro;
• 41,8 million Euro arising from the inclusion of the profit for the year, net of the estimated dividends;
• the increase of profit reserves for 10,5 million Euro;
• the lower 100% deduction from CET1 of “deferred tax assets that rely on future profitability and do not
arise from temporary differences” totalling 25,3 million Euro - compared to 63,5 million Euro deducted at
31 December 2020; in this regard, please note that this deduction will be further absorbed by the future
use of such deferred tax assets;
• the greater deduction of other income statement items attributable to the valuation reserve for equities
designated at fair value with an impact on comprehensive income of 6 million Euro;
• the deduction of the maximum ceiling of treasury shares that may be purchased to support the LTI plan,
amounting to 20,9 million Euro.
The change in own funds due to the above-described phenomena has meant that at 31 December 2021, the Total
capital ratio is 19,63%, up from the results achieved at 31 December 2020 of 14,85%; this trend was also reported
for the CET1 ratio now 15,44%, compared to the figure at 31 December 2020, of 11,29%.
At 31 December 2021, not considering the filter related to the IFRS 9 transitional regime nor taking into account
the prudential filter for exposures to central governments classified in the FVOCI category, Fully Loaded Own
Funds amounted to 1.856,9 million Euro and consequently the RWA when fully applied, come to 9.615,5 million
Euro.
Banca Ifis | 2021 Consolidated financial statements and report
57
OWN FUNDS AND CAPITAL ADEQUACY RATIOS WITHOUT
IFRS 9 TRANSITIONAL ARRANGEMENTS
(in thousands of Euro)
AMOUNTS AT
31.12.2021
31.12.2020
Common Equity Tier 1 Capital (CET1)
1.452.393
1.014.822
Tier 1 Capital (TIER1)
1.454.137
1.067.964
Total Own Funds
1.856.859
1.342.527
Total RWAs
9.615.465
9.189.077
CET1 ratio
15,10%
11,04%
TIER1 ratio
15,12%
11,62%
Total Capital Ratio
19,31%
14,61%
Common Equity Tier 1, Tier 1 Capital, and total Own Funds included the profits generated by the Banking Group at 31 December
2021 net of the estimated dividend.
At 31 December, taking into account the transitional treatment adopted to mitigate the impact of IFRS 9, risk-
weighted assets amounted to 9.633 million Euro, arising from credit and counterparty risk of 8.638 million Euro,
operational risk of 878 million Euro, market risk of 82 million Euro and credit valuation adjustment risk of 35
million Euro.
Here below is the breakdown by Segment of risk-weighted assets.
RWA: BREAKDOWN
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL SEGMENT
GOVERNANCE
& SERVICES
AND NON-
CORE
SEGMENT
CONS.
GROUP TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING AREA
RWAs for credit risk
5.214.971
2.500.835
1.265.979
1.448.157
2.339.110
1.084.180
8.638.260
RWAs for market risk
X
X
X
X
X
X
81.587
RWAs for operational risk (basic
indicator approach)
X
X
X
X
X
X
877.884
RWAs for credit valuation
adjustment risk
X
X
X
X
X
X
35.273
Total RWAs
X
X
X
X
X
X
9.633.003
When comparing the results, please note that the Bank of Italy, following the Supervisory Review and Evaluation
Process (SREP) to review the capitalisation targets of the system's largest intermediaries, notified the Banca Ifis
Group that it needed to meet the following consolidated capital requirements, including a 2,5% capital
conservation buffer:
• Common Equity Tier 1 (CET1) capital ratio of 8,12%, with a required minimum of 5,62%;
• Tier 1 Capital Ratio of 10,0%, with a required minimum of 7,5%;
• Total Capital Ratio of 12,5%, with a required minimum of 10,0%.
At 31 December 2021, the Banca Ifis Group met the above prudential requirements.
In the third quarter of 2021, the Bank of Italy notified the Parent company Banca Ifis S.p.A. and its subsidiary
Farbanca S.p.A. of the conclusion of the process to determine the minimum requirement for eligible capital and
liabilities (MREL). The minimum requirements to be met at 1 January 2022 are as follows:
Banca Ifis | 2021 Consolidated financial statements and report
58
MREL REQUIREMENT
BANCA IFIS
FARBANCA
10% of the Total Risk Exposure Amount
8% of the Total Risk Exposure Amount
3% of Leverage Ratio Exposure
3% of Leverage Ratio Exposure
At 31 December 2021, following the monitoring process, both indicators were met above the predefined limit.
2.10.2 Income statements items
Formation of net banking income
NET BANKING INCOME
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net interest income
487.971
381.692
106.279
27,8%
Net commission income
83.282
74.887
8.395
11,2%
Other components of net banking income
31.266
11.221
20.045
178,6%
Net banking income
602.519
467.800
134.719
28,8%
Net banking income totalled 602,5 million Euro, up 28,8% from 467,8 million Euro at 31 December 2020.
The trend is influenced by the economic recovery, recorded during 2021, related to the improvement of the
pandemic trend. In particular, the Npl Segment increased by 94,6 million Euro and the Commercial and Corporate
Banking Segment by 60,5 million Euro. The latter sees its growth concentrated mainly in the Lending division,
also thanks to the contribution of Farbanca for 14,9 million Euro (which joined the Group in December 2020) and
that of the branch acquired in May 2021 relating to the former Aigis Banca unit for 4,0 million Euro.
Net interest income increased by 27,8%, from 381,7 million Euro at 31 December 2020 to 488,0 million Euro at 31
December 2021, both as a result of higher underlying volumes compared to the situation in 2020, which had been
strongly affected by the limitations related to the Covid-19 pandemic, and due to the contributions of Farbanca
S.p.A and the former Aigis Banca unit as commented in more detail in section “2.9 Contribution of operating
Segments to Group results”.
Net commissions amounted to 83,3 million Euro, up compared to the figure at the end of 2020, which stood at
74,9 million Euro (+11,2%): this performance was driven by a greater contribution from commission income,
mainly connected for 4,0 million Euro to the activities of lead arranger of the Structured Finance division and the
greater contribution of Farbanca (which in 2020 influenced only the month of December) for 2,6 million Euro.
The other components of net interest and other banking income, amounting to 31,2 million Euro as of 31
December 2021 and up by 20,0 million Euro compared to 31 December 2020, are mainly attributable to:
• 11,0 million Euro the net positive result of other financial assets and liabilities measured at fair value
through profit or loss (up 20,8 million Euro on the negative 9,7 million Euro in December 2020). This
amount breaks down as follows:
– 5,0 million Euro on UCIT fund units, primarily due to revaluations linked to the improved
performance of the underlying assets;
Banca Ifis | 2021 Consolidated financial statements and report
59
– 4,5 million Euro in equity securities, including 1,5 million Euro in realised gains on the sale of an
individually significant security and the remaining 3,0 million Euro primarily from the revaluation
of an equity security;
– 0,7 million Euro on debt securities, related to revaluations carried out in 2021 mainly on third-
party securitisation tranches
– 0,8 million Euro on loans measured at fair value;
• 7,5 million Euro for dividends generated by shares held in the Group-owned portfolio (3,0 million Euro in
2020);
• 13,9 million Euro in net income from the sale or repurchase of financial assets and liabilities (net income
of 21,4 million Euro as of 31 December 2020) linked to both the sale of NPL processing tails and
operations on the Group's proprietary portfolio;
• -1,2 million Euro due to the negative net result from trading activities, an improvement on the negative
balance of 3,5 million Euro registered in 2020.
Formation of net profit (loss) from financial activities
FORMATION OF NET PROFIT (LOSS)
FROM FINANCIAL ACTIVITIES
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net banking income
602.519
467.800
134.719
28,8%
Net credit risk losses/reversals
(77.159)
(91.359)
14.200
(15,5)%
Net profit (loss) from financial activities
525.360
376.441
148.919
39,6%
The Group's net profit from financial activities totalled 525,4 million Euro, showing clear improvement on the
376,4 million Euro at 31 December 2020 (+39,6%).
Net credit risk losses totalled 77,2 million Euro at 31 December 2021, an improvement of 14,2 million Euro on the
net adjustments of 91,4 million Euro at end 2020. The figure for 2021 includes adjustments of 18,0 million Euro
relative to the Npl Segment, following a detailed analysis, carried out also in response to the Covid-19 pandemic,
in terms of greater collection times, mainly on higher vintage positions. The item also includes:
• additional provisions of 12,5 million Euro in the Corporate Banking Area against the concentration risk
typical of the sector, also to take account of potential further future effects connected with the lack of
credit support measures.
• 12,0 million Euro linked to a revision of the assessment of the recoverability of the exposures on the
commercial portfolio with higher vintage.
Formation of net profit for the year is summarised in the table below:
Banca Ifis | 2021 Consolidated financial statements and report
60
FORMATION OF NET PROFIT
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Net profit (loss) from financial activities
525.360
376.441
148.919
39,6%
Operating costs
(375.486)
(308.025)
(67.461)
21,9%
Value adjustments of goodwill
-
(700)
700
(100,0)%
Gains (Losses) on disposal of investments
-
24.161
(24.161)
(100,0)%
Pre-tax profit (loss) from continuing operations
149.874
91.877
57.997
63,1%
Income taxes for the year relating to current
operations
(47.571)
(22.735)
(24.836)
109,2%
Profit (loss) for the year attributable to non-
controlling interests
1.721
338
1.383
409,2%
Profit (Loss) for the year attributable to the
Parent company
100.582
68.804
31.778
46,2%
Operating costs totalled 375,5 million Euro, showing an increase on 31 December 2020 (+21,9%). The reclassified
cost/income ratio at 31 December 2021 was, by contrast, 62,3%, compared to 65,8% in the prior year.
OPERATING COSTS
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Administrative expenses:
(373.606)
(314.187)
(59.419)
18,9%
a) personnel expenses
(141.781)
(123.369)
(18.412)
14,9%
b) other administrative expenses
(231.825)
(190.818)
(41.007)
21,5%
Net allocations to provisions for risks and
charges
(10.669)
(27.954)
17.285
(61,8)%
Net impairment losses/reversals on property,
plant and equipment and intangible assets
(18.733)
(17.817)
(916)
5,1%
Other operating income/expenses
27.522
51.933
(24.411)
(47,0)%
Operating costs
(375.486)
(308.025)
(67.461)
21,9%
Personnel expenses rose by 14,9% to 141,8 million Euro (123,4 million Euro for the year ended 31 December
2020). This growth is due to higher allocations for variable remuneration of approximately 7,5 million Euro
compared to 2020 - a year that was affected by prudential policies related to the uncertainty of the pandemic -
and to the entry into the Banca Ifis Group of Farbanca and the former Aigis Banca business unit for 5,2 million
Euro. The number of Group employees at 31 December 2021 was 1.849 as compared with 1.758 staff at 31
December 2020, of whom 45 coming from the acquisition of the former Aigis Banca business unit.
Other administrative expenses amounted to 231,8 million Euro as of 31 December 2021, up 21,5% from the
balance of 190,8 million Euro in the previous year. The increase is attributable to higher costs for professional
services and expenses for the purchase of goods and other services mainly related both to the resumption of
credit recovery activities in the Npl Segment and to the change in the scope of consolidation with the full
inclusion of Farbanca and the BU acquired from the former Aigis Banca and the related integration costs as well
as one-off costs connected with the transfer of the registered office of the parent company La Scogliera.
Banca Ifis | 2021 Consolidated financial statements and report
61
OTHER ADMINISTRATIVE EXPENSES
(in thousands of Euro)
YEAR
CHANGE
2021
2020
ABSOLUTE
%
Expenses for professional services
(121.507)
(79.780)
(41.727)
52,3%
Legal and consulting services
(87.639)
(58.216)
(29.423)
50,5%
Auditing
(894)
(902)
8
(0,9)%
Outsourced services
(32.974)
(20.662)
(12.312)
59,6%
Direct and indirect taxes
(39.481)
(37.056)
(2.425)
6,5%
Expenses for purchasing goods and other
services
(70.837)
(73.982)
3.145
(4,3)%
Software assistance and hire
(16.198)
(15.978)
(220)
1,4%
Customer information
(14.749)
(17.400)
2.651
(15,2)%
FITD and Resolution fund
(11.115)
(8.040)
(3.075)
38,2%
Advertising and inserts
(7.011)
(9.121)
2.110
(23,1)%
Property expenses
(5.127)
(5.761)
634
(11,0)%
Securitisation costs
(3.844)
(2.151)
(1.693)
78,7%
Postage and archiving of documents
(3.709)
(5.432)
1.724
(31,7)%
Telephone and data transmission expenses
(3.306)
(3.805)
499
(13,1)%
Car fleet management and maintenance
(1.984)
(2.103)
119
(5,6)%
Business trips and transfers
(491)
(1.194)
703
(58,9)%
Other sundry expenses
(3.303)
(2.996)
(307)
10,2%
Total other administrative expenses
(231.825)
(190.818)
(41.006)
21,5%
The sub-item “Legal and consulting services” comes to 87,6 million Euro at end 2021, up 50,5% on the 58,2 million
Euro of December 2020. The item includes 11,5 million Euro relating to the costs for the transfer of the registered
office of the parent company to Switzerland, as well as the effect of the reorganisation activities of the Group
structures (8,4 million Euro), the full entry into the Group of Farbanca (+3,9 million Euro) and the resumption of
the judicial recovery activities of the receivables belonging to the Npl Segment, which at 31 December 2021
amounted to 33,9 million Euro (compared to 26,8 million Euro at the end of 2020), following the unblocking of
the activities connected with the courts.
The sub-item “Outsourced services”, amounting to 33,0 million Euro as at December 2021, recorded an increase
of approximately 12,4 million Euro mainly due to the out-of-court recovery activities of the Npl Segment
(amounting to 30,1 million Euro, compared to 18,7 million Euro in 2020). The resumption of out-of-court recovery
activities in the Npl Segment, drove the sub-item's performance in 2021 together with new projects on Ifis Npl
Investing and integration activities in some perimeters of the Group.
The sub-item “Indirect taxes and duties” mainly comprises the registration tax incurred for the judicial recovery
activity of the Npl Segment for 25,2 million Euro at the end of December 2021. The item also includes stamp duty
on deposit accounts of 12,7 million Euro, the charge-back of which to customers is included in the item “Other
operating income”.
“Expenses for the purchase of goods and services” totalled 70,8 million Euro as of 31 December 2021, down 4,3%
from the 2020 balance, and are affected by the opposing effect of several significant items, and in particular:
Banca Ifis | 2021 Consolidated financial statements and report
62
• Customer information expenses of 14,7 million Euro at the end of 2021 compared to 17,4 million Euro in
2020 (-15,2%) related to the cyclical nature of Npl portfolio purchases;
• Contribution to the Single Resolution Fund, which increased to 11,1 million Euro, compared to 8,0 million
Euro in 2020 as a result of the increased volumes of protected deposits in the banking sector;
• Advertising and publicity expenses of 7,0 million Euro, down 23,1% on 2020, which was impacted by the
Group's rebranding initiative;
• Securitisation costs go from 2,2 million Euro to 3,8 million Euro. The increase in these costs is due to the
new self-securitisation of receivables in the Npl Segment, as well as the restructuring of the Emma
securitisation arranged by Farbanca;
• Document postage and archiving expenses, which are down 31,7% compared to 2020 as a result of the
cyclical nature of Npl portfolio purchases;
• Travel and transfers, which amounted to 0,5 million Euro at the end of 2021 and recorded a decrease of
58,9%, due to the changed working methods imposed with the start of the health emergency linked to
the Covid-19 pandemic.
Net allocations to provisions for risks and charges amounted to 10,7 million Euro, a decrease of 17,3 million Euro
compared to the 2020 balance. It should be borne in mind that this income statement item is not impacted by
the changes in provisions for risks and charges relating to the acquisition of the former Aigis division, as these
have been directly accounted for as greater liabilities recorded at the time of the PPA. Net provisions recognised
in FY 2021 primarily relate to:
• provisions made for 2,6 million Euro for commitments to disburse funds and guarantees;
• releases amounting to 0,3 million Euro relating to the Supplementary Customer Indemnity Fund;
• net provisions of 0,7 million Euro for guarantees linked to the sale of receivables under the GACS
scheme.
• other net provisions of 8,0 million Euro, of which 7,5 million Euro mainly relating to disputes payable by
Banca Ifis and 0,5 million Euro relating to disputes of the subsidiary Ifis Npl Investing.
Other net operating income amount to 27,5 million Euro at end 2021, down 47,0% compared to the previous year.
The item referred mainly to revenue from the recovery of expenses charged to third parties. The relevant cost
component is included in other administrative expenses, namely under legal expenses and indirect taxes, as well
as recoveries of expenses associated with leasing operations. The reduction on 2020 is due both to lower gain
on bargain purchase for approximately 13,9 million Euro realised on business combinations (in 2020, this was
16,8 million Euro related to the acquisition of Farbanca, against 2,9 million Euro related to the May 2021
acquisition of the former Aigis Banca business unit), and to the fact that in 2020 the Npl Segment had benefited
from 14,1 million Euro received as indemnities on portfolios acquired in previous years.
Pre-tax profit from continuing operations amounted to 149,9 million Euro at end 2021 (+63,1% compared to 31
December 2020).
Income tax at 31 December 2021 amounted to 47,6 million Euro. The 2021 tax rate is 31,74%, up from 24,75% in
2020, substantially due to the lower relative impact of tax benefits as pre-tax income increases.
Excluding 1,7 million Euro in profit attributable to non-controlling interests, the net profit for the year attributable
to the Parent company totalled 100,6 million Euro (+46,2% from the prior year).
Below is the table reconciling equity and the net result of the Parent company with the corresponding
consolidated data of the Parent company:
Banca Ifis | 2021 Consolidated financial statements and report
63
RECONCILIATION OF EQUITY AND THE NET RESULT OF THE
PARENT COMPANY WITH THE CONSOLIDATED DATA
ATTRIBUTABLE TO THE PARENT COMPANY (in thousand
Euro)
31.12.2021
EQUITY
OF WHICH: PROFIT (LOSS)
FOR THE YEAR
Parent company balance
1.364.562
22.570
Difference compared to the carrying amounts of the
companies consolidated:
232.052
115.334
Ifis Finance Sp z o.o.
11.244
1.641
Ifis Finance I.F.N. S.A.
(46)
182
Ifis Rental Services S.r.l.
53.868
11.660
Cap.Ital.Fin. S.p.A.
-
(2.321)
Credifarma S.p.A.
5.781
2.219
Farbanca S.p.A.
20.231
4.462
Ifis Npl Investing S.p.A.
135.389
120.480
Ifis Npl Servicing S.p.A.
5.585
(22.494)
Ifis Real Estate S.p.A.
-
(495)
Elimination of intra-group dividends
-
(41.736)
Other consolidation entries
(512)
4.414
Consolidated balances attributable to the Parent company
1.596.102
100.582
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64
2.11 Main risks and uncertainties
Taking into account the business carried out and the results achieved, the Group's financial position is
proportionate to its needs. Indeed, the Group's financial policy is aimed at favouring funding stability and
diversification rather than the immediate operating needs. The main risks and uncertainties deriving from the
present conditions of financial markets, including following the current situation linked to the COVID-19
pandemic and to the military conflict between Russia and Ukraine, do not represent a particular problem for the
Group's financial balance and, in any case, they are not likely to threaten business continuity.
Reference should be made to Part A of the Notes to the Consolidated Financial Statements for further
information on the risks, uncertainties and impacts of the COVID-19 epidemic and to the information given in
Part E of this same document about Banca Ifis Group's risks, typical of the banking sector, and to section
“Outlook” in the Directors’ Report on the Group.
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2.12 Banca Ifis shares
The share price
As from 29 November 2004, Banca Ifis S.p.A.'s ordinary shares have been listed on the STAR segment of Borsa
Italiana (the Italian stock exchange). The transfer to STAR occurred a year after the listing on the Mercato
Telematico Azionario (MTA, an electronic stock market) of Borsa Italiana S.p.A.. Previously, as from 1990, the
shares had been listed on the Mercato Ristretto (MR, a market for unlisted securities) of Borsa Italiana. The
following table shows the share prices at the end of the year. As from 18 June 2012, Banca Ifis joined the FTSE
Italia Mid Cap index.
Official share price
31.12.2021
31.12.2020
31.12.2019
31.12.2018
31.12.2017
Share price at year-end
17,07
9,18
14,00
15,44
40,77
Price/book value
Below is the ratio of the share price at year-end to consolidated equity per share outstanding.
Price/book value
31.12.2021
31.12.2020
31.12.2019
31.12.2018
31.12.2017
Share price at year-end
17,07
9,18
14,00
15,44
40,77
Consolidated Equity per share
30,37
28,99
28,79
27,30
25,62
Price/book value
0,56
0,32
0,49
0,57
1,59
Outstanding shares
31.12.2021
31.12.2020
31.12.2019
31.12.2018
31.12.2017
Number of shares outstanding
at year end (in thousands)
(1)
53.472
53.460
53.452
53.441
53.433
(1) Outstanding shares are net of treasury shares held in the portfolio.
Earnings per share and Price/Earnings
Here below is the ratio of the consolidated net profit for the year to the weighted average of the ordinary shares
outstanding at year-end, net of treasury shares in portfolio, as well as the ratio of the year-end price to
consolidated earnings per share.
Earnings per share (EPS) & Price/Earnings (P/E)
31.12.2021
31.12.2020
Net profit for the year attributable to the Parent company (in thousands of Euro)
100.582
68.804
Earnings per share (EPS)
1,88
1,29
Price/Earnings (P/E) Ratio
9,07
7,13
Earnings per share and diluted earnings per share
31.12.2021
31.12.2020
Net profit for the year attributable to the Parent company (in thousands of Euro)
100.582
68.804
Average number of outstanding shares
(1)
53.468.051
53.457.850
Average number of diluted shares
-
-
Earnings per share (EPS)
1,88
1,29
Diluted earnings per share (EPS)
1,88
1,29
(1) Outstanding shares are net of treasury shares held in the portfolio.
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66
Payout ratio
For 2021, the Banca Ifis Board of Directors proposed to the Shareholders' Meeting to distribute a dividend of 0,95
Euro per share.
Payout ratio (in thousands of Euro)
2021
2020
2019
2018
2017
Net profit attributable to the Parent company
100.582
68.804
123.097
146.763
180.767
Parent company dividends
(1)
50.798
25.132
58.797
56.125
53.433
Payout ratio
(1)
50,5%
36,5%
47,8%
38,2%
29,6%
(1) The 2021 data refers to the dividend proposed by the Board of Directors of Banca Ifis S.p.A.
Shareholders
The share capital of the Parent company at 31 December 2021 amounted to 53.811.095 Euro and is broken down
into 53.811.095 shares for a nominal amount of 1 Euro each.
Below are Banca Ifis's shareholders that, either directly or indirectly, own equity instruments with voting rights
representing over 3% of Banca Ifis's share capital:
Corporate governance rules
Banca Ifis has adopted the Corporate Governance Code for listed companies. The Bank's Board of Directors has
established the Control and Risk Committee, the Appointments Committee and the Remuneration Committee.
The Board of Directors has also appointed a Supervisory Body with autonomous powers of initiative and control
pursuant to Italian Legislative Decree no. 231/2001.
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Internal dealing rules
Banca Ifis regulations on internal dealing is aligned with the relevant EU legislation (EU Regulation no. 596/2014,
Market Abuse Regulation).
The Policy currently in force governs the requirements placed on the Bank concerning trading by the Relevant
Persons as well as the Closely Related People in shares or other debt instruments issued by Banca Ifis as well
as financial instruments linked to them. This is to ensure the utmost transparency in the Bank's disclosures to
the market.
Specifically, this Policy governs:
• the requirements related to identifying the Relevant Persons and Closely Related People;
• the handling of information concerning the Transactions that the Relevant Persons submitted to the
Bank;
• the handling of closed periods, i.e. those periods during which the Relevant Persons must refrain from
trading in shares or other debt instruments issued by Banca Ifis as well as financial instruments linked
to them.
This document is available on Banca Ifis's website, www.bancaifis.it, in the “Corporate Governance” Section.
Rules for the handling of inside information
Internal procedures for handling inside information and the list of individuals who have access to inside
information are aligned with the mentioned Market Abuse Regulation.
In compliance with Article 115-bis of Italian Legislative Decree no. 58/1998, Banca Ifis has created a list of
individuals who, in performing their professional and work duties or in carrying out their activity, have access to
inside information (the list of insiders). Banca Ifis constantly updates this list.
In addition, it adopted a Group policy for the handling of inside information in order to:
• prevent individuals who, based on their duties, have no reason to know such information from accessing
it;
• identify the individuals who have access to such information at all times.
This policy also describes the process of handling inside information of third-party issuers, also with reference
to the management of passive market surveys.
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2.13 Significant events during the year
The Banca Ifis Group transparently and promptly discloses information to the market, constantly publishing
information on significant events through press releases. Please visit the Investor Relations and Media Press
sections of the institutional website www.bancaifis.it to view all press releases.
Below is a summary of the most significant events that occurred during the year.
2.13.1 Corporate reorganisation of the Group’s business in the Npl Segment
On 1 January 2021, the Npl Segment underwent a corporate reorganisation with the creation of a vertical chain
aiming to guarantee the separation and independence of loan acquisitions and collections. The Group’s business
in the Non-Performing Loans has therefore been reorganised into three separate companies: Ifis Npl Investing,
Ifis Npl Servicing and Ifis Real Estate. The first acquires the portfolios, the second deals with management and
collection and Ifis Real Estate deals with the real estate business, servicing the other two companies.
2.13.2 Resignation of Director Divo Gronchi
On 14 January 2021, the Independent Director Divo Gronchi tendered his resignation, with immediate effect, from
the position of Director and, consequently, member of the Company’s Appointments Committee and Supervisory
Body. Having acknowledged the resignation tendered by Mr Gronchi, the Board of Directors resolved to replenish
the Appointments Committee members, choosing Monica Billio as new member. The Board has also resolved to
replenish the members of the Bank’s Supervisory Body, appointing Beatrice Colleoni as new member.
2.13.3 Agreement for the termination of contracts with Luciano Colombini
On 11 February 2021, Luciano Colombini tendered his resignation, as already announced in December 2020, from
the role of Chief Executive Officer and the position of director on the board of Banca Ifis, to embark on new
professional challenges. Mr Colombini ceased office upon conclusion of the Shareholders' Meeting held on 22
April 2021.
On 11 February 2021, the Bank’s Board of Directors therefore approved, with the opinion in favour given by the
Remuneration Committee and the Board of Auditors, an agreement for the termination of contracts with Luciano
Colombini. This agreement, which is in line with the Bank's approved Remuneration Policy, establishes that Mr
Colombini will be paid his remuneration for the office of Chief Executive Officer until the date on which he
effectively leaves office, as well as the deferred components of the bonus already accrued and recognised for
FY 2019, which will be paid in accordance with the terms and conditions of the Remuneration Policy. In addition,
at the date on which he leaves office, Mr Colombini will receive severance indemnity equal to the fixed and
variable remuneration envisaged for the residual term of the three-year mandate originally conferred upon him
(12 months of recurring remuneration), to be paid in accordance with the terms and conditions of the
Remuneration Policy (and, therefore, 50% in financial instruments, with a deferral period, of a portion of 40% of
the indemnity, of 3 years, without prejudice, in any case, to the application of the malus and clawback clauses).
No non-competition obligations are envisaged.
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2.13.4 Banca Ifis has developed the first securitisation in Italy of NPLs backed by
assignment orders
On 22 March 2021, Banca Ifis declared that for the purpose of a loan, through the subsidiary Ifis Npl Investing, it
had implemented the very first securitisation in Italy of a non-performing portfolio mainly comprising unsecured
loans backed by assignment orders. The transaction is an innovative solution for this type of non-performing
exposure, where the debt collection procedure through compulsory enforcement (attachment of one fifth of the
salary) is at an advanced stage. The transaction aimed to collect funding for Ifis Npl Investing of up to 350 million
Euro in liquidity on the institutional market, without deconsolidating the underlying credits. The loan portfolios
concerned by the transaction (a portfolio of secured loans and an unsecured portfolio backed by assignment
orders) owned by the subsidiary Ifis Npl Investing, was transferred to a newly-established SPV called Ifis Npl
2021-1 SPV S.r.l., which issued senior, mezzanine and junior notes.
2.13.5 The Shareholders' Meeting has approved the 2020 financial statements.
Geertman CEO
The Shareholders' Meeting of Banca Ifis, which met on 22 April 2021 chaired by Sebastien Egon Fürstenberg,
approved the 2020 annual financial statements and the distribution of a unitary gross dividend of 0,47 Euro per
share, deducted from own funds at 31 December 2020: payment date 26 May 2021, record date 25 May 2021
and ex-dividend date (no. 23) 24 May 2021. The Shareholders' Meeting confirmed Frederik Geertman as CEO,
previously coopted as director on 11 February 2021, and approved the proposal made by the majority
shareholder La Scogliera S.p.A. to appoint Monica Regazzi as new independent director, to replace the resigning
director Luciano Colombini. The Board of Directors, which met at the end of the Shareholders' Meeting, therefore
appointed Frederik Geertman as Chief Executive Officer of Banca Ifis, granting him the relevant powers.
2.13.6 Banca Ifis intervenes to guarantee depositors of Aigis Banca with the purchase
of an operative BU of the company
On 23 May 2021, Banca Ifis shared the terms and conditions of the intervention aimed at guaranteeing
depositors of the former Aigis Banca, assigned under receivership by the Ministry for the Economy and Finance,
with the Fondo Interbancario di Tutela dei Depositi (Interbanking Deposit Protection Fund). The Bank of Italy,
which appointed the Liquidators of the former Aigis Banca, has approved the sale of its assets, liabilities and
contracts to Banca Ifis. The price paid by Banca Ifis, symbolically, of one Euro, together with the intervention of
the Fondo Interbancario di Tutela dei Depositi for a total of 48,8 million Euro and the terms of the contract
guarantee no material impacts on the equity ratios (CET1), asset quality ratios and income statement of the
Group.
2.13.7 The Extraordinary Shareholders' Meeting approves the amendments to the
Articles of Association designating two Co-General Managers
The Extraordinary Shareholders' Meeting of Banca Ifis held on 28 July, in a single call, chaired by Ernesto
Fürstenberg Fassio, approved the amendments to Articles 10, 11, 13, 15, 17, 18, 20, 21 and 22 of the Articles of
Association in view of the new organisational structure, which introduces the figures of two Co-General
Managers. By provision no. 1091263 of 20 July 2021, the Bank of Italy ascertained that said amendments are
not in conflict with the criterion of health, prudent management. At the end of the authorisation process, Fabio
Lanza and Raffaele Zingone were appointed as Co-General Managers. As a result of the reorganisation, Alberto
Staccione, who no longer holds the position of General Manager, will work within the company as Chief Lending
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Officer. In line with the remuneration policy adopted by the Banca Ifis Group, termination of the office of General
Manager does not entail the payment of indemnities or other benefits.
2.13.8 Distribution of the 2019 dividend of Euro 1,10 per share
On 14 October 2021, Banca Ifis started implementing the shareholders' resolution of 23 April 2020 on the
distribution of a gross unit dividend for FY 2019 of 1,10 Euro per share. The amount was payable starting 20
October 2021 with record date on 19 October 2021 and ex-dividend date (no. 24) of 18 October 2021. Payment
was made through the authorised financial intermediaries with which the shares are registered on the Monte
Titoli System.
2.13.9 Record acquisition closed: 2,8 billion Euro of NPLs acquired from Cerberus
On 2 November, Banca Ifis completed the largest NPL acquisition ever in the Bank's history, reaching the
estimated Npl portfolio purchase target for 2021 of around 3 billion Euro ahead of schedule. The Bank has signed
an agreement with a company of the Cerberus Capital Management L.P. Group (“Cerberus”) for the acquisition
of a portfolio of bad loans worth a nominal amount of 2,8 billion Euro. The stock comprises 300.000 unsecured
loans originated by Italian banks and financial institutions. The receivables, due from retail customers, mainly
derive from consumer loan contracts (personal loans, special-purpose loans and car loans). In terms of portfolio
size, the transaction represents the most significant direct sale of NPLs in 2021 in Italy, both in the primary and
secondary markets.
2.13.10 The Shareholders' Meeting has unanimously approved the proposal to alter
the ratio of variable to fixed components of the Chief Executive Officer's Remuneration
On 21 December 2021, the Ordinary Shareholders' Meeting of Banca Ifis, which met in a single call, chaired by
Ernesto Fürstenberg Fassio, unanimously approved the proposal to change to 1,5:1 the ratio between the
variable and fixed components of the CEO's remuneration. The approved increase, which has no impact on the
Bank's capital strength and compliance with related capital requirements, will apply from FY 2022 and will be
implemented as part of the Bank's remuneration policy to be submitted to the Shareholders' Meeting for approval
of the financial statements as at and for the year ending 31 December 2021.
2.13.11 Favourable opinion for the transfer of the registered office of La Scogliera
S.p.A. to the Canton of Vaud (Lausanne - CH)
On 27 December 2021, Banca Ifis acknowledged the declarations made by the controlling shareholder La
Scogliera S.p.A., holding 50,5% of the share capital, regarding the effectiveness on that date, following the waiver
of certain suspensory conditions, of the resolution to transfer the registered office of La Scogliera to the Canton
of Vaud (Lausanne - CH), approved by the Shareholders' Meeting of the controlling shareholder last June. The
transfer is expected to be completed by the end of January 2022. Banca Ifis keeps its presence in Italy
unchanged.
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2.14 Significant subsequent events
2.14.1 Banca Ifis approves the Liquidity Funding Plan 2022
On 17 January 2022, the Board of Directors of Banca Ifis has approved the Liquidity Funding Plan 2022 for the
evolution of the Bank's liquidity funding sources, with a view to sound and prudent management and in
compliance with rules of prudence. The aim is to optimise the cost of funding, ensuring appropriate
diversification and balance between sources in a sustainable composition and adequate to the risk tolerance
thresholds. The 2022 Liquidity Funding Plan confirms the centrality and significant contribution of the Bank's
direct retail funding through deposit and current account products and provides, with similar importance and
relevance during the year, the increase of the stock of wholesale bonds issued by Banca Ifis with a market
oriented target of 1,5 billion Euro at the end of 2022 (of which 400 million Euro of Tier 2 and 1,1 billion Euro of
Senior Preferred) compared to the current value of 1,1 billion Euro.
2.14.2 Assignment by Moody's of the Baa3 rating with stable outlook
On 9 February 2022, Moody's assigned Banca Ifis a rating of Baa3 (investment grade) with a stable outlook due
to the Bank's profitability and solid capital and liquidity position. The original text of the press release issued by
Moody's is available on the rating agency's website (www.moodys.com).
2.14.3 Banca Ifis D.O.E.S.: 2022-2024 Business Plan approved
On 10 February 2022, the Board of Directors of Banca Ifis approved the 2022-2024 Business Plan, based on which
Banca Ifis will continue to focus on the business segments with the highest opportunity for growth and
profitability to strengthen market leadership: Commercial and corporate banking for SMEs and NPLs. In 2024,
164 million Euro of net profit (161 million Euro in profit pertaining to the Parent Company) and an ROE of 9% are
expected; in the three-year period 2022-2024, a cumulative net profit in excess of 400 million Euro is expected.
The Bank aims to create shareholder value with a dividend payout of approximately a cumulative 200 million
Euro over the period 2022-2024, making for a payout ratio of around 50%. CET1 is expected to be 15,1% as of
2024 and will conservatively be above 14% throughout the plan period. In order to support a profitable growth,
the Bank has defined an Industrial Plan based on four pillars, summarised in the acronym D.O.E.S, which leverage
on Digitisation, Openness (i.e. the Bank-as-a-platform model), Efficiency and Sustainability. The Plan period
envisages 200 new hires, of whom 150 young adults, and a training and reskilling program to strengthen and
expand on employees' distinctive skills.
2.14.4 Merger by incorporation of Credifarma into Farbanca authorised
On 21 February 2022, authorisation was received from the Bank of Italy for the merger by incorporation of
Credifarma S.p.A. into Farbanca S.p.A. Thanks to this operation, Banca Credifarma is born: the first specialised
pole leader in financial services to pharmacies. The integration represents the completion of the project started
with the acquisition of Farbanca in November 2020 and the starting point of a new reality equipped with the best
skills in the provision of specialised credit to pharmacies thanks to the development of integrated digital services
in a single large operator. The transaction is part of the initiatives of the 2022-2024 Business Plan aimed at
further simplifying and specialising the organisational structure of the Banca Ifis Group. Post-integration
synergies and cross selling with all the Group's financial products will allow Banca Credifarma to further develop
its commercial presence in the reference sector. The extension of the investments in digital technology
presented in the Business Plan will also speed up process innovation and the extension of the range of services
offered, also thanks to new partnerships and consulting solutions complementary to the satisfaction of the
needs of the pharmacy business.
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2.15 Outlook
The recovery of the world economy is expected to continue in 2022, albeit with less dynamism and higher
inflation than in 2021. The global scenario is still characterised by risk factors such as the persistence of
obstacles to the smooth functioning of global value chains, the effects of the normalisation of economic policies,
the energy crisis and geopolitical tensions, especially with reference to the recent military tension in the Ukraine.
In particular, recent developments related to the military conflict between Russia and Ukraine, which began on
24 February 2022, may have negative impacts that are difficult to estimate at this time. The duration of the
conflict, the sanctions imposed on Russia, the impact on the cost of raw materials as well as the slowdown in
supply, production and logistics, could generate a further increase in inflation and an economic slowdown,
especially in Europe.
As far as the Group is concerned, the analyses conducted to date have revealed a limited number of
counterparties present in the countries affected by the current conflict, corresponding to modest direct credit
exposures. Similarly, the Group maintains relations with a small number of companies that have subsidiaries
resident in the countries concerned. Moreover, these analyses, which are still in progress, have not yet revealed
any active counterparties or exposures to companies directly affected by the sanctions introduced at
international level.
Analysis of the portfolio by size, risk and sector is underway in order to identify those economic sectors which,
on the basis of experience, geography of trade flows and/or company structure, are more sensitive, directly or
indirectly, to the current crisis and related trade sanctions, including on the basis of developments in the
situation. The outcome of these analyses will allow for the prioritisation of targeted analyses for subsequent
credit and regulatory review.
Any decisions taken at an EU and international level will also be carefully monitored and any possible
repercussions on the Group's operations assessed, although it is currently not possible to make any forecasts.
Finally, the operations of subsidiaries in areas adjacent to the conflict area will continue to be carefully monitored
in relation to the evolution of the political context.
In this context, in any case, in Italy the economic recovery is expected to continue in 2022, albeit at a slower
pace. Prometeia estimates Italian GDP growth at 4,0% after 6,3% in 2021, thanks to the recovery of household
spending with the end of lockdowns and the resilience of investments in capital goods and construction,
supported by tax incentives.
However, rising energy prices and supply bottlenecks, with reduced availability of many semi-finished products,
have increased production costs. ISTAT estimates indicate inflation of 4,8% in January 2022, three quarters of
which is determined by electricity and gas, whose prices have almost doubled (+93% compared with January
2021).
In this context, central banks have announced tighter monetary policies with interest rate increases expected as
early as 2022. However, monetary policy is not particularly effective against supply-reducing shocks. Therefore,
it cannot be ruled out that inflation will be more persistent and that central banks will have to intervene more
aggressively, with restrictive effects on the economy. However, the possible economic slowdown due to the
crisis in Ukraine could lead central banks to implement less restrictive monetary policies.
In January 2022, as a result of rising inflation and manufacturing bottlenecks, the business confidence index
slowed sharply with a marked decline in confidence in the services and manufacturing segments. At an
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aggregate level, all components showed deterioration, particularly expectations for economic growth. The
number of firms reporting barriers to production also increased between October and December 2021.
It should be pointed out that tax policies remain expansionary even though most of the exceptional interventions
will be eliminated. The Italian government has given priority to supporting growth, postponing the consolidation
of accounts until after 2024. In addition, Italy is among the major beneficiaries of the PNRR (the “Italian National
Recovery and Resilience Plan”), the special European fund aimed at encouraging economic recovery, which
represents an opportunity to boost productivity and growth in Italy in a greener and more inclusive direction.
In this context, Banca Ifis is committed to the implementation of the 2022-2024 Business Plan presented in
February 2022 and focused on four pillars, summarised in the acronym D.O.E.S, which leverage on Digitisation,
Openness (i.e. the Bank-as-a-platform model), Efficiency and Sustainability. Banca Ifis will continue to focus on
business segments with the highest opportunity for growth and profitability to strengthen market leadership:
Commercial and corporate banking for SMEs and Npls.
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2.16 Other information
2.16.1 Adoption of Opt-Out Option pursuant to Consob resolution no. 18079 of 20
January 2012
On 21 January 2013, Banca Ifis's Board of Directors resolved, as per Article 3 of Consob Regulation no. 18079 of
20 January 2012, to adopt the opt-out option pursuant to Article 70, paragraph 8 and Article 71, paragraph 1-bis,
of Consob's Regulation on Issuers, thus exercising the right to depart from the obligations to publish information
documents required in connection with significant operations like mergers, spin-offs, capital increases by
contribution in kind, acquisitions and sales.
2.16.2 Report on Corporate Governance and Shareholding Structure
Pursuant to Article 123 bis, paragraph three, of Italian Legislative Decree no. 58 of 24 February 1998, a separate
report has been prepared from this Group Report on Operations, which was approved by the Board of Directors
and published together with the draft consolidated financial statements. This document is also made available
on Banca Ifis's website, www.bancaifis.com, in the “Corporate Governance” Section.
The “Report on Corporate Governance and Shareholding Structure” has been drawn up according to the format
provided by Borsa Italiana.
Together with this Report, the “2021 Report on Remuneration” prepared pursuant to Article 123-ter of the
Consolidated Law on Finance, was also made available.
2.16.3 Non-Financial Statement
Pursuant to Article 5, paragraph three of Italian Legislative Decree no. 254 of 30 December 2016, the consolidated
Non-Financial Statement (NFS) represents a report separate from this document, which is approved by the Board
of Directors and published together with the draft consolidated financial statements at 31 December 2021. This
document is also made available on the website, www.bancaifis.com, in the “About us - Sustainability” Section.
The disclosures on policies concerning the diversity of administration, management and control bodies in terms
of age, gender, and education and professional background, as well as the description of the goals,
implementation and results of said policies, as per Article 123-bis, paragraph two, letter d-bis) of the Consolidated
Law on Finance are included in the “Report on Corporate Governance and Shareholding Structure”.
2.16.4 Privacy Measures
The Banca Ifis Group has consolidated a project to comply with (EU) Regulation no. 2016/679 in order to
incorporate the relevant regulatory provisions into its internal privacy management model, planning a series of
both technological and organisational steps that will concern all the Group's companies.
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2.16.5 Parent company management and coordination
Pursuant to Articles 2497 to 2497 sexies of the Italian Civil Code, it should be noted that the parent company La
Scogliera S.p.A. does not carry out any management and coordination activities with respect to Banca Ifis,
notwithstanding Article 2497 sexies of the Italian Civil Code, since the management and coordination of investee
financial companies and banks is expressly excluded from La Scogliera's corporate purpose.
2.16.6 National consolidated tax regime
For the tax period closed at 31 December 2021, the companies Banca Ifis S.p.A., Ifis Npl Investing S.p.A., Ifis
Rental Services S.r.l., Cap.Ital.Fin. S.p.A., Ifis Npl Servicing S.p.a. and Ifis Real Estate S.p.A., together with the
parent company, La Scogliera S.p.a., opted for the application of tax consolidation in accordance with Arts. 117
et seq. of Italian Presidential Decree no. 917/86.
Transactions between these companies were regulated by means of a private written agreement between the
parties. This agreement will lapse after three years.
Adhesion to the tax consolidation allows the taxable income of the participating companies to be offset against
each other (using the losses and the ACE realised during the adhesion period).
As envisaged by applicable regulations, adhering entities have an address for the service of notices of
documents and proceedings relating to the tax periods for which this option is exercised at the office of La
Scogliera, the consolidating company.
Under this tax regime, the taxable profits and tax losses reported by each entity for the fiscal year 2021 were
transferred to the consolidating company La Scogliera.
The credit due to the tax consolidating company, La Scogliera, entered under “Other assets” on these Financial
Statements, at 31 December 2021 came to 22,9 million Euro, of which 20,6 million Euro accrued at the Parent
company Banca Ifis, while the debt, accrued mainly by Ifis Npl Investing and entered amongst “Other liabilities”,
comes to 26,1 million Euro. The net payable in regard to the consolidating company La Scogliera is therefore 3,2
million Euro.
2.16 7 Transactions on treasury shares
At 31 December 2020, Banca Ifis held 351.427 treasury shares recognised at a market value of 2,9 million Euro
and a nominal amount of 351.427 Euro.
During the year, Banca Ifis, as variable pay for the 2016 and 2017 results, awarded the Top Management 12.288
treasury shares at an average price of 33,98 Euro, for a total of 418 thousand Euro and a nominal amount of
12.288 Euro, making profits of 317 thousand Euro that, in compliance with IAS/IFRS standards, were recognised
under the premium reserve.
The remaining balance at the end of the year was 339.139 treasury shares with a market value of 2,8 million Euro
and a nominal amount of 339.139 Euro.
2.16.8 Related-party transactions
In compliance with the provisions of Consob Resolution no. 17221 of 12 March 2010 and subsequently amended,
as well as the prudential Supervisory provisions for banks in Circular no. 285 of 17 December 2013 of the Bank
of Italy, part three, chapter 11 (on “Risk activities and conflicts of interest towards related parties”), any
transactions with related parties and relevant parties are approved pursuant to the procedure approved by the
Board of Directors, last updated on 24 June 2021.
Banca Ifis | 2021 Consolidated financial statements and report
76
This document is publicly available on Banca Ifis's website, www.bancaifis.it, in the “Corporate Governance”
Section.
During 2021, no significant transactions with related parties were undertaken outside the scope of the
consolidated financial statements.
For information on individual related-party transactions, please refer to Part H of the Notes to the Consolidated
Financial Statements.
2.16.9 Atypical or unusual transactions
During 2021, the Banca Ifis Group did not carry out atypical or unusual transactions as defined by Consob
Communication no. 6064293 of 28 July 2006.
2.16.10 Research and development activities
Due to its business, the Group did not implement any research and development programmes during the year.
Venice - Mestre, 10 March 2022
For the Board of Directors
The CEO
Frederik Herman Geertman
3.
Consolidated Financial Statements
Banca Ifis | 2021 Consolidated financial statements and report
78
3.1 Consolidated Statement of Financial Position
ASSETS
(in thousands of Euro)
31.12.2021
31.12.2020
10.
Cash and cash equivalents
20.
Financial assets measured at fair value through profit or loss
a) financial assets held for trading
c) other financial assets mandatorily measured at fair value
30.
Financial assets measured at fair value through other comprehensive
income
40.
Financial assets measured at amortised cost
a) receivables due from banks
b) receivables due from customers
90.
Property, plant and equipment
100.
Intangible assets
of which:
- goodwill
110.
Tax assets:
a) current
b) deferred
130.
Other assets
Total assets
Banca Ifis | 2021 Consolidated financial statements and report
79
LIABILITIES AND EQUITY
(in thousands of Euro)
31.12.2021
31.12.2020
10.
Financial liabilities measured at amortised cost
a) payables due to banks
b) payables due to customers
c) debt securities issued
20.
Financial liabilities held for trading
60.
Tax liabilities:
a) current
b) deferred
80.
Other liabilities
90.
Post-employment benefits
100.
Provisions for risks and charges:
a) commitments and guarantees granted
c) other provisions for risks and charges
120.
Valuation reserves
(25.435 )
(19.337 )
150.
Reserves
160.
Share premiums
170.
Share capital
180.
Treasury shares (-)
(2.847 )
(2.948 )
190.
Equity attributable to non-controlling interests (+/-)
200.
Profit (loss) for the year (+/-)
Total liabilities and equity
Banca Ifis | 2021 Consolidated financial statements and report
80
3.2 Consolidated Income Statement
ITEMS
(in thousands of Euro)
31.12.2021
31.12.2020
10.
Interest receivable and similar income
of which: interest income calculated using the effective interest method
20.
Interest due and similar expenses
(114.146 )
(107.707 )
30.
Net interest income
40.
Commission income
50.
Commission expense
(15.273 )
(9.347 )
60.
Net commission income
70.
Dividends and similar income
80.
Net profit (loss) from trading
(1.221 )
(3.490 )
100.
Profit (loss) from sale or buyback of:
a) financial assets measured at amortised cost
b) financial assets at fair value through other comprehensive income
c) financial liabilities
(92 )
110.
Net result of other financial assets and liabilities measured at fair value
through profit or loss
(9.728 )
b) other financial assets mandatorily measured at fair value
(9.728 )
120.
Net banking income
130.
Net credit risk losses/reversals on:
(48.895 )
a) financial assets measured at amortised cost
(49.503 )
b) financial assets at fair value through other comprehensive income
(32 )
150.
Net profit (loss) from financial activities
190.
Administrative expenses:
(373.606 )
(314.187 )
a) personnel expenses
(141.781 )
(123.369 )
b) other administrative expenses
(231.825 )
(190.818 )
200.
Net allocations to provisions for risks and charges
(10.669 )
(27.954 )
a) commitments and guarantees granted
(2.633 )
(8.759 )
b) other net allocations
(8.036 )
(19.195 )
210.
Net impairment losses/reversals on property, plant and equipment
(10.288 )
(9.026 )
220.
Net impairment losses/reversals on intangible assets
(8.445 )
(8.791 )
230.
Other operating income/expenses
240.
Operating costs
(375.486 )
(308.025 )
270.
Value adjustments of goodwill
(700 )
280.
Gains (Losses) on disposal of investments
290.
Pre-tax profit (loss) from continuing operations
300.
Income taxes for the year relating to current operations
(47.571 )
(22.735 )
330.
Profit (loss) for the year
340.
Profit (loss) for the year attributable to non-controlling interests
350.
Profit (loss) for the year attributable to the Parent company
Banca Ifis | 2021 Consolidated financial statements and report
81
3.3 Consolidated Statement of Comprehensive Income
ITEMS
(in thousands of Euro)
31.12.2021
31.12.2020
10.
Profit (Loss) for the year
Other comprehensive income not to be reclassified to profit or loss
(19.637 )
20.
Equity securities measured at fair value through other comprehensive
income
(19.332 )
30.
Financial liabilities measured at fair value through profit or loss
(changes in own credit risk)
40.
Hedging of equity securities measured at fair value through other
comprehensive income
50.
Property, plant and equipment
60.
Intangible assets
70.
Defined benefit plans
(244 )
(305 )
80.
Non-current assets and disposal groups
90.
Share of valuation reserves of equity accounted investments
Other comprehensive income, net of taxes, to be reclassified to profit or loss
(5.878 )
(318 )
100.
Foreign investment hedges
110.
Exchange differences
(354 )
(2.525 )
120.
Cash flow hedges
130.
Hedging instruments (non-designated items)
140.
Financial assets (other than equity securities) measured at fair value
through other comprehensive income
(5.524 )
150.
Non-current assets and disposal groups
160.
Share of valuation reserves of equity accounted investments
170.
Total other comprehensive income, net of taxes
(4.508 )
(19.955 )
180.
Total comprehensive income (Item 10 + 170)
190.
Total consolidated comprehensive income attributable to non-controlling
interests
200.
Total consolidated comprehensive income attributable to the Parent
company
82
Banca Ifis | 2021 Consolidated financial statements and report
3.4 Statement of Changes in Consolidated Equity at 31 December 2021
(in thousands of Euro)
Balance at 31.12.2020
Change in opening balances
Balance at 01.01.2021
Allocation of profit
from previous year
Changes during the year
Consolidated equity
at 31.12.2021
Equity attributable to the
Group at 31.12.2021
Equity attributable to non
-
controlling interests
at 31.12.2021
Reserves
Dividends and other
allocations
Changes in reserves
Equity transactions
Comprehensive
income
for the year
Issue of new
shares
Buyback of
treasury shares
Extraordinary
distribution of
dividends
Changes in equity
instruments
Derivatives on
treasury
shares
Stock Options
Changes in equity
interests
Share capital:
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
a) ordinary shares
X
X
X
X
X
X
X
(102 )
X
b) other shares
X
X
X
X
X
X
X
X
Share premiums
X
X
X
X
X
X
X
(38 )
X
Reserves:
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
a) retained earnings
X
X
X
X
X
b) other
X
X
X
X
Valuation reserves
(19.282 )
(19.282 )
X
X
(1.592 )
X
X
X
X
X
X
(4.508 )
(25.382 )
(25.435 )
Equity instruments
X
X
X
X
X
X
X
X
X
X
Treasury shares
(2.948 )
X
(2.948 )
X
X
X
X
X
X
X
X
X
(2.847 )
(2.847 )
Profit (loss) for the year
(44.010 )
(25.132 )
X
X
X
X
X
X
X
X
Consolidated Equity
(25.132 )
(132 )
X
X
Equity attributable to the
Group
(25.132 )
X
Equity attributable to
non-controlling interests
(203 )
X
Banca Ifis | 2021 Consolidated financial statements and report
83
3.5 Statement of Changes in Consolidated Equity at 31 December 2020
(in thousands of Euro)
Balance at 31.12.20
19
Change in opening balances
Balance at 01.01.20
20
Allocation of profit
from previous year
Changes during the year
Consolidated equity
at 31.12.20
20
Equity attributable to the
Group at 31.12.20
20
Equity attributable to non
-
controlling interests
at 31.12.20
20
Reserves
Dividends and other
allocations
Changes in reserves
Equity transactions
Comprehensive
income
for the year
Issue of new
shares
Buyback of
treasury shares
Extraordinary
distribution of
dividends
Changes in equity
instruments
Derivatives on
treasury
shares
Stock Options
Changes in equity
interests
Share capital:
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
a) ordinary shares
X
X
X
X
X
X
X
X
b) other shares
X
X
X
X
X
X
X
X
Share premiums
X
X
X
X
X
X
X
X
Reserves:
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
a) retained earnings
X
(35.118 )
X
X
X
X
b) other
X
X
X
X
Valuation reserves
(2.968 )
(2.968 )
X
X
X
X
X
X
X
X
(12 )
(19.955 )
(19.282 )
(19.337 )
Equity instruments
X
X
X
X
X
X
X
X
X
X
Treasury shares
(3.012 )
X
(3.012 )
X
X
X
X
X
X
X
X
X
(2.948 )
(2.948 )
Profit (loss) for the year
(95.842 )
(27.346 )
X
X
X
X
X
X
X
X
Consolidated Equity
(27.346 )
(31.259 )
X
X
Equity attributable to the
Group
(27.346 )
(31.259 )
X
Equity attributable to
non-controlling interests
X
84
Banca Ifis | 2021 Consolidated financial statements and report
3.6 Consolidated Statement of Cash Flows
CONSOLIDATED CASH FLOW STATEMENT
Amount
Indirect method
(in thousands of Euro)
31.12.2021
31.12.2020
A. OPERATING ACTIVITIES
1. Operations
- profit (loss) for the year (+/-)
- profit/loss on financial assets held for trading and on other financial assets/liabilities
measured at fair value through profit or loss (-/+)
(9.826 )
- net credit risk losses/reversals (+/-)
(45.338 )
- net impairment losses/reversals on property, plant and equipment and intangible assets
(+/-)
- net allocations to provisions for risks and charges and other expenses/income (+/-)
- unpaid taxes, duties and tax credits (+/-)
- other adjustments (+/-)
(20.179 )
2. Cash flows generated/absorbed by financial assets
(426.220 )
(749.804 )
- financial assets held for trading
(47 )
- other assets mandatorily measured at fair value
(33.900 )
- financial assets measured at fair value through other comprehensive income
- financial assets measured at amortised cost
(597.068 )
(1.129.927 )
- other assets
(156.294 )
3. Cash flows generated/absorbed by financial liabilities
- financial liabilities measured at amortised cost
- financial liabilities held for trading
(12.559 )
(3.293 )
- other liabilities
(31.159 )
(78.720 )
Net cash flows generated/absorbed by operating activities (+/-)
B. INVESTING ACTIVITIES
1. Cash flows generated by
- sale of equity investments
- sales of property, plant and equipment
2. Cash flows absorbed by
(40.190 )
- purchases of property, plant and equipment
(11.551 )
(37.472 )
- purchases of intangible assets
(9.082 )
(9.542 )
- purchases of subsidiaries and business units
Net cash flows generated/absorbed by investing activities (+/-)
C. FINANCING ACTIVITIES
- distribution of dividends and other
(*)
(83.047 )
- sale/purchase of minority control
(132 )
(5 )
Net cash flows generated/absorbed by financing activities (+/-)
(83.179 )
(5 )
NET CASH GENERATED/USED DURING THE YEAR
RECONCILIATION
OPENING CASH AND CASH EQUIVALENTS
TOTAL NET CASH GENERATED/USED DURING THE YEAR
CLOSING CASH AND CASH EQUIVALENTS
(*) The 2021 balance represents the cash outflow for dividend payments in the year, and includes both the payment of dividends
on 2020 earnings and the payment of dividends on 2019 earnings, the distribution of which had been suspended in the previous
year following Bank of Italy recommendations.
4.
Notes to the Consolidated
Financial Statements
86
Banca Ifis | 2021 Consolidated financial statements and report
4.1 Part A - Accounting policies
A.1 - General part
Section 1 – Statement of compliance with international accounting standards
The Consolidated Financial Statements at 31 December 2021 have been drawn up in accordance with the
IAS/IFRS standards in force at said date issued by the International Accounting Standards Board (IASB),
together with the relevant interpretations (IFRICs and SICs). These standards were endorsed by the European
Commission in accordance with the provisions in Article 6 of European Union Regulation no. 1606/2002. This
regulation was implemented in Italy with Italian Legislative Decree no. 38 of 28 February 2005.
Concerning the interpretation and implementation of international accounting standards, the Banca Ifis Group
referred to the “Framework for the Preparation and Presentation and Financial Statements”, even though it has
not been endorsed by the European Commission, as well as the Implementation Guidance, Basis for Conclusions,
and any other documents prepared by the IASB or the IFRIC complementing the accounting standards issued.
The accounting standards adopted in preparing these financial statements are those in force at 31 December
2021 (including SIC and IFRIC interpretations).
The Bank also considered the communications from Supervisory Authorities (Bank of Italy, Consob, and ESMA),
which provide recommendations on the disclosures to include in the financial statements concerning the most
material aspects or the accounting treatment of specific transactions.
These Consolidated Financial Statements are subject to certification by the delegated corporate bodies and the
Corporate Accounting Reporting Officer, as per Article 154 bis paragraph 5 of Italian Legislative Decree no. 58 of
24 February 1998.
The Consolidated Financial Statements are audited by EY S.p.A..
Section 2 – Basis of preparation
The Consolidated Financial Statements consist of:
• the consolidated financial statements (statement of financial position and income statement, the
statement of comprehensive income, the statement of changes in equity and the statement of cash
flows);
• the Notes to the Consolidated Financial Statements;
in addition, they contain the Directors' Report.
The Consolidated Financial Statements have been drawn up according to the general principles of IAS 1, referring
also to IASB's “Framework for the preparation and presentation of financial statements”, with particular attention
to the fundamental principles of substance over legal form, the concepts of relevance and materiality of
information, and the accruals and going concern accounting concepts.
For the preparation of these Consolidated Financial Statements, reference was made to the format set out by
Bank of Italy's Circular no. 262 of 22 December 2005, 7th update of 29 October 2021, as supplemented by the
Bank of Italy in its “Communication of 21 December 2021 - Update of the supplements to the provisions of
Circular no. 262 “The banking balance: schemes and rules for completion” concerning the impacts of COVID-19
and the measures implemented to support the economy”. Solely for the purposes of a uniform comparison, the
Banca Ifis | 2021 Consolidated financial statements and report
87
figures for the previous year have been restated on a conventional basis on the basis of the new provisions set
out in the 7th update of Circular no. 262/2005.
The currency of account is the Euro and, if not indicated otherwise, amounts are expressed in thousands of Euro.
The tables in the Notes may include rounded amounts; any inconsistencies and/or discrepancies in the data
presented in the different tables are due to these rounding differences.
Assets and liabilities, as well as costs and revenues, have been offset only if required or permitted by an
accounting standard or the relevant interpretation.
The Notes to the Financial Statements do not show the items and tables required by Bank of Italy Circular no.
262/2005 as well as by the supplement “Communication of 21 December 2021 - Update of the supplements to
the provisions of Circular no. 262 The banking balance: schemes and rules for completion concerning the
impacts of COVID-19 and the measures implemented to support the economy” relating to items that are not
applicable for the Banca Ifis Group.
The recognition, measurement and derecognition criteria for assets and liabilities, and the procedures for
recognising revenues and costs, adopted in the Consolidated Financial Statements at 31 December 2021 have
remained substantially unchanged from those adopted for the preparation of the 2020 financial statements of
the Banca Ifis Group.
Information on the business as a going concern
The Bank of Italy, Consob and Isvap, with document no. 2 issued on 6 February 2009 (“Disclosure in financial
reports on the going concern assumption, financial risks, asset impairment tests and uncertainties in the use of
estimates”), together with the subsequent document no. 4 of 4 March 2010, require directors to assess with
particular accuracy the existence of the company as a going concern, as per IAS 1.
Unlike in the past, present conditions on financial markets and in the real economy, together with the negative
short-term forecasts, require particularly accurate assessments of the going concern assumption, as records of
the Group's profitability and easy access to financial resources may no longer be sufficient in the current context.
In this regard, having examined the risks and uncertainties connected to the present macro-economic context,
also in consideration of the current pandemic situation, the Banca Ifis Group can indeed be considered as a
going concern, in that it can be reasonably expected to continue operating in the foreseeable future. Therefore,
the Consolidated financial statements at 31 December 2021 have been prepared in accordance with this fact.
Uncertainties connected to credit and liquidity risks are considered insignificant or, at least, not significant
enough to raise doubts over the company's ability to continue as a going concern, thanks also to the good
profitability levels that the Group has consistently achieved, to the quality of its loans, and to its current access
to financial resources.
Section 3 - Consolidation scope and method
The Consolidated Financial Statements of the Banca Ifis Group have been drawn up on the basis of the accounts
at 31 December 2021 prepared by the directors of the companies included in the consolidation scope.
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88
Banca Ifis | 2021 Consolidated financial statements and report
89
On 1 January 2021, a corporate reorganisation was completed in the Npl Segment, aiming to guarantee the
separation and independence of the acquisition of credits and debt collection through three companies: Ifis Npl
Investing, Ifis Npl Servicing and Ifis Real Estate (for more details, see the specific paragraph in the “2.13
Significant events that occurred in the year” section). As regards the companies involved and their business
names, please note that as compared with the situation at 31 December 2020:
• on 1 January 2021, Ifis Npl S.p.A. was renamed Ifis Npl Investing S.p.A.;
• Ifis Npl Servicing S.p.A. (formerly Fbs S.p.A.) was merged by incorporation into Ifis Npl Investing with
effect from 1 January 2021;
• Gemini S.p.A. was renamed Ifis Npl Servicing S.p.A. starting 1 January 2021.
As these are transactions “under common control”, there have been no changes in the scope of consolidation or
impact on the Group's consolidated financial statements at 31 December 2021.
All the companies were consolidated using the line-by-line method.
The financial statements of the Polish subsidiary Ifis Finance Sp. z o. o. and of the Romanian subsidiary Ifis
Finance I.F.N. S.A., both expressed in foreign currencies are translated into Euro by applying the year-end
exchange rate to assets and liabilities. As for the income statement, the items are translated using the average
exchange rate, which is considered as a valid approximation of the spot exchange rate. Exchange differences
arising from the application of different exchange rates for the statement of financial position and the income
statement, as well as the exchange differences from the translation of each investee company's equity, are
recognised under capital reserves.
Assets and liabilities, off-balance-sheet transactions, income and expenses, as well as the profits and losses
arising from relations between the consolidated companies are all eliminated.
With reference to the inclusion in the consolidation area of companies deriving from business combinations,
such operations must be recognised by applying the principles established by IFRS 3; purchases of equity
investments in which control is obtained and counting as business combinations must be recognised by
applying the acquisition method, which requires:
• identification of the acquirer;
• determination of the acquisition date;
• recognition and measurement of the identifiable assets acquired, the liabilities assumed and any
minority interest in the acquiree;
• recognition and measurement of goodwill or a gain from a bargain purchase.
The cost of an acquisition is determined as the sum of the amount transferred, measured at fair value at the
acquisition date and the amount of the minority interest in the acquiree. For each business combination, the
Group decides whether to measure any minority interest in the acquiree at fair value or in proportion to the
minority share of the acquiree's net identifiable assets. Acquisition costs are expensed in the period and
classified as administrative expenses.
Any contingent amount is recognised at the fair value at the acquisition date.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed
by the Group. If the fair value of the net assets acquired exceeds the total amount paid, the Group again verifies
whether it correctly identified all the assets acquired and all the liabilities assumed and revises the procedures
used to determine the amounts to be recognised at the acquisition date. If the new valuation still shows a fair
Banca Ifis | 2021 Consolidated financial statements and report
90
value of the net assets acquired higher than the amount, the difference (profit) is recognised in the income
statement.
After its initial recognition, goodwill is measured at cost net of accumulated impairment. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each
of the Group's cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
If goodwill has been allocated to a CGU and the entity disposes of an operation within that unit, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining
the gain or loss of the disposal. The goodwill associated with the disposed operation is determined on the basis
of the relative values of the disposed operation and the portion of the CGU is retained.
The consolidation process of the subsidiaries resulted in the following goodwill being recognised under the item
intangible assets: 38,0 million Euro for the consolidation of the form Fbs Group, 774 thousand Euro at year end
exchange rates for the subsidiary Ifis Finance Sp. z.o.o. As of 31 December 2021, these goodwill was subjected
to the annual impairment test, from which no need for impairment emerged. For more details, we would refer you
to the more detailed information given in Part B - Consolidated Statement of Financial Position, Assets, Section
10 - Intangible assets - Item 100, Paragraph 10.3 Other information.
During the first half of 2021, Banca Ifis acquired the business unit of the former Aigis Banca, the process of
allocating the cost of the acquisition, identified a negative difference between the cost of the combination and
the fair value of the assets acquired, liabilities assumed and identifiable contingent liabilities. This difference,
which came to 2,9 million Euro, has been entered in these Consolidated financial statements under “Other
operating income”. For further details on this transaction, see Part G “Business combinations”.
Banca Ifis | 2021 Consolidated financial statements and report
91
1. Equity investments in exclusively controlled companies
COMPANY NAME
HEAD
OFFICE
REGISTERE
D OFFICE
TYPE
(1)
INVESTMENT
VOTING RIGHTS
%
(2)
PARTICIPATING
COMPANY
SHARE %
Ifis Finance Sp. z o.o.
Warsaw
Warsaw
1
Banca Ifis S.p.A.
100%
100%
Ifis Rental Services S.r.l.
Milan
Milan
1
Banca Ifis S.p.A.
100%
100%
Ifis Npl Investing S.p.A.
(formerly Ifis Npl S.p.A.)
Florence,
Milan and
Mestre (VE)
Mestre (VE)
1
Banca Ifis S.p.A.
100%
100%
Ifis Real Estate S.p.A.
Milan
Milan
1
Ifis Npl Servicing
S.p.A. (formerly
Gemini S.p.A.)
100%
100%
Cap. Ital. Fin. S.p.A.
Naples
Naples
1
Banca Ifis S.p.A.
100%
100%
Ifis Npl Servicing S.p.A.
(formerly Gemini S.p.A.)
Mestre (VE)
Mestre (VE)
1
Ifis Npl Investing
S.p.A. (formerly
Ifis Npl S.p.A.)
100%
100%
Ifis Finance I.F.N. S.A.
Bucharest
Bucharest
1
Banca Ifis S.p.A.
99,99%
99,99%
Farbanca S.p.A.
Bologna
Bologna
1
Banca Ifis S.p.A.
71,06%
71,06%
Credifarma S.p.A.
Rome
Rome
1
Banca Ifis S.p.A.
70%
70%
Ifis Npl 2021-1 SPV S.r.l.
Conegliano
(Province of
Treviso)
Conegliano
(Province of
Treviso)
1
Banca Ifis S.p.A.
51%
51%
Indigo Lease S.r.l.
Conegliano
(Province of
Treviso)
Conegliano
(Province of
Treviso)
4
Other
0%
0%
Ifis ABCP Programme S.r.l.
Conegliano
(Province of
Treviso)
Conegliano
(Province of
Treviso)
4
Other
0%
0%
Emma S.P.V. S.r.l.
Conegliano
(Province of
Treviso)
Conegliano
(Province of
Treviso)
4
Other
0%
0%
Urano Spv S.r.l.
Milan
Milan
4
Other
0%
0%
Key
(1) Type of relationship:
1 = majority of voting rights in the Annual Shareholders' Meeting
2 = dominant influence in the Annual Shareholders' Meeting
3 = agreements with other shareholders
4 = other forms of control
5 = joint management pursuant to Article 26, paragraph 1, Italian Legislative Decree no. 87/92
6 = joint management pursuant to Article 26, paragraph 2, Italian Legislative Decree no. 87/92
(2) Voting rights in the Annual Shareholders' Meeting, distinguishing between effective and potential voting rights
2. Significant judgements and assumptions in determining the scope of consolidation
In order to determine the scope of consolidation, Banca Ifis assessed whether it meets the requirements of IFRS
10 for controlling investees or other entities with which it has any sort of contractual arrangements.
An entity controls another entity when the former has all the following:
• power over the investee;
• exposure to variable returns;
• and the ability to affect the amount of its returns.
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92
Generally, there is a presumption that a majority of voting rights gives control over the investee. The Group
reconsiders whether or not it has control of an investee if the facts and circumstances indicate that there have
been changes in one or more of the three elements relevant to the definition of control. The consolidation of a
subsidiary begins when the Group obtains control and ceases when the Group loses control. The assets,
liabilities, revenues and costs of the subsidiary acquired or sold during the year are included in the Consolidated
Financial Statements from the date on which the Group obtains control until the date on which the Group no
longer exercises control over the company.
Profit or loss for the year and each component of other comprehensive income are attributed to the equity
holders of the parent company of the Group and to the non-controlling interests, even if this results in the
minority interests having a deficit balance. When necessary, appropriate adjustments are made to the financial
statements of the subsidiaries, in order to ensure compliance with the Group's accounting standards. All assets
and liabilities, equity, revenues, costs and inter-group financial flows relating to transactions between Group
entities are derecognised completely during the consolidation phase.
Changes in the investment in a subsidiary that do not involve the loss of control are recognised in equity.
If the Group loses control of a subsidiary, it must derecognise the related assets (including goodwill), liabilities,
minority interests and other components of equity, while any profit or loss is recognised in the Income
Statement. Any retained interest must be measured at fair value.
The assessment carried out led the Bank to include the subsidiaries listed in the previous paragraph, as well as
the SPVs (Special Purpose Vehicles) set up for securitisation purposes, for which control is considered to exist
in accordance with IFRS 10; in the scope of consolidation at the reporting date. These SPVs, with the exception
of the vehicle Ifis Npl 2021-1 SPV S.r.l. for which the Group holds the majority of the shares at 31 December
2021, are not companies legally belonging to the Banca Ifis Group.
3. Equity investments in exclusively controlled companies with significant minority interests
3.1 Non-controlling interests, voting rights held by non-controlling interests, and dividends distributed
to non-controlling interests
Company Name
Minority interests %
Availability of minority
votes %
(1)
Dividends distributed to
minorities
Credifarma S.p.A.
30,00%
30,00%
-
Farbanca S.p.A.
28,94%
28,94%
-
(1) Availability of voting rights in the Annual Shareholders' Meeting
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93
3.2 Equity investments with significant non-controlling interests: accounting information
Company
Name
Total
assets
Cash and
cash
equivalen
ts
Financial
assets
Property,
plant and
equipmen
t and
intangible
assets
Financial
liabilities
Equity
Net
interest
income
Net
banking
income
Operating
costs
Pre-tax
profit
(loss)
from
continuin
g
operation
s
Profit
(loss)
from
continuin
g
operation
s, net of
taxes
Profit
(loss) of
disposal
groups,
net of
taxes
Profit
(Loss)
for the
year
(1)
Other
comprehe
nsive
income,
net of
taxes
(2)
Comprehe
nsive
income
(3)
=
(1) + (2)
Credifarma S.p.A.
109.932
317
103.034
1.451
85.110
20.830
4.461
6.782
(5.055)
2.197
1.509
-
1.509
(6)
1.503
Farbanca S.p.A.
761.490
46.860
703.450
659
651.152
74.421
15.000
17.811
(8.955)
6.243
4.381
-
4.381
(1)
4.380
Banca Ifis | 2021 Consolidated financial statements and report
94
4 Significant restrictions
There were no significant restrictions as per paragraph 13 of IFRS 12, i.e. statutory, contractual and regulatory
restrictions on its ability to access or use the assets and settle the liabilities of the Group, nor protective rights
of non-controlling interests that can significantly restrict the Group's ability to access or use the assets and
settle the liabilities of the Group.
5 Other information
The reporting date of the accounts prepared by the directors of the companies included in the consolidation
scope was 31 December 2021.
Section 4 - Subsequent events
No significant events occurred between year-end and the preparation of these consolidated financial statements
other than those already included herein.
For information on such events, please refer to the Directors' Report.
Section 5 – Other aspects
Risks, uncertainties and impacts of the COVID-19 epidemic
The upsurge of the COVID-19 pandemic in December 2021 in Italy and in the rest of Europe and the consequent
legislative provisions adopted and being adopted by the various national governments, have given rise to
significant uncertainty as to the economic impacts it may have on the various Group companies.
The results for 2021 include the impacts of COVID-19 as reasonably foreseeable at 31 December 2021. The
adverse effects of COVID-19 may, however, persist beyond 2021, extending into the following months, although
the timing and amount of such effects currently cannot be foreseen.
Already in 2020, in order to incorporate the impacts of the health emergency caused by the COVID-19 pandemic
into the accounting valuation models used for non-performing loans, analyses were performed and new prudent
logics implemented, as well as the institutional measures introduced to temporarily support the national
economy.
As regards credit risk management, the Italian Government has introduced measures aimed at providing
financial support to businesses and households, through moratoriums and strengthening the public credit
guarantee system, in order to alleviate the liquidity tensions caused by the emergency and encourage new credit.
These measures also mitigate any impact on the credit quality of banks. The Group has therefore taken steps to
revise the estimate of expected losses and the valuation of the Group's portfolios, both in terms of collective
reserves and specific reserves.
Reference should be made to the details given in Part E - Information on risks and related hedging policies.
As regards the assessment of the significant increase in the credit risk, the measures implemented to support
the economy that impacted it include the concession of moratoriums, which must be mentioned. With the
suspension of payments of amortisation plans, the verification of past-due by more than 30 days in order to
allocate to Stage 2, also ceases. This has led the Group to make prudent corrections in respect of relations with
counterparties involved by these moratoriums, or which belong to certain economic segments considered to be
at higher risk of impact from COVID-19, so as to incorporate the increase in the expected risk.
The forward-looking information has seen an update to the macroeconomic scenarios following the evolution of
the economic crisis linked to the spread of COVID-19, also in view of the recommendations given by the
Supervisory Authorities.
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95
Reference should be made to the details given in Part E - Information on risks and related hedging policies.
In addition, in line with what has been done for the secured portfolio of the Npl Segment, the collection times for
receivables and portfolios of receivables secured by real estate for which bankruptcy proceedings are in progress
have been reviewed to reflect the aforementioned suspension of real estate execution, including in the
Commercial & Corporate Banking Segment.
As described in greater detail in section 1.2 “Market risks” of Part E of this document, with reference to financial
assets measured at fair value on a recurring basis, the effects of the pandemic have been characterised by
limited impacts in line with the margins and dimension of the Group’s portfolio.
As far as the Group's operating costs are concerned, just as the slowdown in court activity has limited credit
recovery activity and therefore a reduction in the Group's margins, it has also led to a reduction in legal recovery
costs and registration taxes.
As regards the impacts of the COVID-19 pandemic in IFRS 16 or IAS 19, the Group believes these not to be
significant given the business model and the dimension of the underlying assets and liabilities. Reference is
made to section 10.3 Other information of Part B of this document with reference to the Group’s valuations of
goodwill.
The Board of Directors, the auditing bodies and the Bank’s management continue to constantly monitor the
evolution of the emergency deriving from the spread of COVID-19 and to take all the decisions and implement all
the measures necessary to cope with it.
Contractual amendments deriving from COVID-19
In the Corporate area, following the Covid-19 emergency, the Banca Ifis Group has taken various actions to best
address the emergency in line with the new regulations. More specifically, it has adhered to the Cura Italia Decree,
to the ABI credit agreement and the Liquidity Decree, with the consequent concession of moratoriums and the
disbursement of new loans backed by the Central Fund.
Already starting 2020, the Banca Ifis Group, in line with the Cura Italia Decree and subsequent regulatory
interventions aimed at extending the duration of its provisions, such as the Sostegni-bis Decree (for more details,
see section 2.8 Impact of regulatory changes), implemented the following supporting measures for micro, small
and medium enterprises based in Italy, which were classified as performing and had a lack of liquidity due to the
COVID-19 epidemic:
• limitation to the revocation of overdrafts until 31 December 2021;
• extension until 31 December 2021 of non-instalment loans with earlier contractual due date;
• suspension until 31 December 2021 and breaking down into instalments of mortgages and lease
charges.
The Group also chose, for loans to private customers in the form of salary-backed loans and pension-backed
loans involved by an exceptional temporary lay-off fund, to apply a selective freezing of instalments of the
amortisation plan for the entire duration of the contribution mechanism. The positions involved by this queuing
of instalments are marginal and with irrelevant economic and financial effects.
Risks and uncertainties related to estimates
Using accounting standards often requires management to make estimates and assumptions that affect the
carrying amounts of assets and liabilities and disclosure of contingent assets and liabilities. In making the
assumptions underlying the estimates, management considers all available information at the reporting date of
Banca Ifis | 2021 Consolidated financial statements and report
96
these consolidated financial statements, as well as any other factor deemed reasonable for this purpose, also
as a consequence of the current situation connected with the COVID-19 pandemic, as explained previously.
Specifically, it made estimates on the carrying amounts of some items recognised in the consolidated financial
statements at 31 December 2021, as per the relevant accounting standards. These estimates are largely based
on the expected future recoverability of the amounts recognised and were made on a going concern basis. Such
estimates support the carrying amounts reported at 31 December 2021.
Estimates are reviewed at least annually when preparing the financial statements.
The risk of uncertainty in the estimates, considering the materiality of the reported amounts of assets and
liabilities and the judgement required of management, substantially concerns the measurement of:
• fair value of receivables and financial instruments not quoted in active markets;
• receivables of the Npl Segment;
• receivables managed by the Pharma BU, and specifically the interest on arrears considered recoverable;
• measurement of the Expected Credit Loss for receivables other than the Npl Segment;
• provisions for risks and charges;
• post-employment benefits;
• goodwill, other intangible assets and gain on bargain purchase.
Fair value of receivables and financial instruments not quoted in active markets
In the presence of receivables and financial instruments not quoted in active markets or illiquid and complex
instruments, it is necessary to activate adequate valuation processes characterised with certain judgement on
the choice of valuation models and related input parameters, which may sometimes not be observable in the
market. There is a degree of subjectivity involved in assessing whether certain inputs are observable and
categorising them within the fair value hierarchy accordingly. For qualitative and quantitative information on the
method to determine the fair value of instruments measured at fair value, reference should be made to paragraph
A.2 - Part relating to the main items of the financial statements of this document.
Npl Segment exposures
Concerning specifically the measurement of the receivables in the Npl Segment, the Risk Management, when
assessing the Bank’s capital adequacy (ICAAP), regularly assesses the so-called model risk, since the
characteristics of the business model imply a high level of variability concerning both the amount collected and
the date of actual collection.
In particular, for receivables undergoing non-judicial operations, the proprietary model estimates cash flows by
projecting the breakdown of the nominal amount of the receivable over time based on the historical recovery
profile for similar clusters. In addition, for the positions with settlement plan funding characteristics, a
deterministic model based on the measurement of the future instalments of the plan, net of the historical default
rate is used. Therefore, the timely and careful management of cash flows is particularly important. To ensure
expected cash flows are correctly assessed, also with a view to correctly pricing the transactions undertaken,
the Group carefully monitors the trend in collections compared to expected flows.
For receivables undergoing judicial operations, i.e. for positions for which the presence of a job or a pension has
been verified, a model has been developed for estimating cash flows prior to obtaining the Garnishment Order
(ODA). In particular, cash flows are estimated for all those positions that have obtained a decree not opposed by
the debtor from 1 January 2018.
Banca Ifis | 2021 Consolidated financial statements and report
97
The other positions undergoing judicial operations continue to be recognised at cost until said requirements are
met or a garnishment order is issued.
Upon garnishment order, future cash flows are analytically determined on the basis of the objective elements
known for each individual position; in this case, therefore, the estimates applied relate mainly to the identification
of the duration of the payment plan.
In order to take into account the current context, still marked by the pandemic, and incorporate the effects linked
to the temporary closure of production activities, already in the 2020 financial statements, corrections were
made to the forecasting models that entailed, with reference to amicable management, a limited decline in
collections expected for FYs 2021 and 2022, in line with the general macroeconomic forecasts.
In a similar fashion, consistently with the legislation released, certain corrections have been made to the models
that cover both the secured Npl positions, as a result of the extension of collection times due to the suspension
in proceeding with the attachment of properties received as collateral and for positions for which bankruptcy
proceedings are in progress.
Reference should be made to the details given in Part E - “Information on risks and related hedging policies” and
to the previous paragraph entitled “Risks, uncertainties and impacts of the COVID-19 epidemic”.
Receivables managed by the Pharma BU, and specifically the interest on arrears considered recoverable
As for the receivables of the Pharma BU, the Group estimates the cash flows from receivables due from Italy's
National Health Service using a proprietary model, calculating the interest on arrears considered recoverable
based on historical evidence and differentiating according to the type of collection actions taken by the Pharma
BU (settlement or judicial action). Overall, the assumptions underlying the estimate of their recoverability were
conservative. Banca Ifis estimates cash flows in accordance with the provisions of the joint Bank of
Italy/Consob/Ivass document no. 7 of 9 November 2016 Accounting of interest on arrears as per Italian
Legislative Decree no. 231/2002 on performing loans purchased outright.
Measurement of the Expected Credit Loss for receivables other than the Npl Segment
The allocation of receivables and debt securities classified as Financial assets measured at amortised cost and
Financial assets measured at fair value through other comprehensive income in the three credit risk stages set
forth in IFRS 9 and the calculation of the relative expected losses requires a detailed estimation process that
regards primarily:
• defining the parameters for a significant increase in credit risk, which are essentially based on models
for measuring the Probabilities of Default (PD) at the origination of financial assets and at the reporting
date;
• the measurement of certain elements necessary for the determination of estimated future cash flows
arising from non-performing loans: the expected debt collection times, the presumed realisable value of
any guarantees, the costs that it is deemed will be incurred to recover the credit exposure and lastly the
likelihood of sale for positions for which there is a disposal plan.
“Expected Credit Losses” (ECLs) are calculated based on whether the financial instrument's credit risk has
significantly increased since initial recognition.
As regards the assessment of the significant increase in the credit risk, the measures implemented to support
the economy that impacted it include the concession of moratoriums, which must be mentioned. With the
suspension of payments of amortisation plans, the verification of past-due by more than 30 days in order to
allocate to Stage 2, also ceases. This has led the Group, already in the 2020 financial statements, to make
Banca Ifis | 2021 Consolidated financial statements and report
98
prudent corrections in respect of relations with counterparties involved by these moratoriums, or which belong
to certain economic segments considered to be at higher risk of impact from Covid-19, so as to incorporate the
increase in the expected risk.
Similarly, the forward-looking information has seen an update to the macroeconomic scenarios following the
evolution of the economic crisis linked to the spread of Covid-19, also in view of the recommendations given by
the Supervisory Authorities.
Finally, in line with what has been done for the secured portfolio of the Npl Segment, the collection times for
receivables and portfolios of receivables secured by real estate for which bankruptcy proceedings are in progress
have been reviewed to reflect the aforementioned suspension of real estate execution, including in the
Commercial & Corporate Banking Segment.
Reference should be made to the information given in paragraph A.2 - Part relating to the main items of this
document and to the paragraph above entitled “Risks, uncertainties and impacts of the COVID-19 epidemic”.
Goodwill, other intangible assets and gain on bargain purchase.
Business combinations must be booked as per the standards established by IFRS 3, using the acquisition
method. Goodwill is initially stated at cost represented by the excess of the total amount paid and the amount
recognised for minority interests in respect of the net identifiable assets acquired and the liabilities assumed by
the Group.
As regards the purchase price allocation (“PPA”) of the aggregation to assets, liabilities and potential liabilities
of the subject acquired, as can be identified at the purchase date and measured at their respective fair values, a
preventive mapping has been carried out of all the assets and liabilities for which it was considered likely to
encounter significant differences in value between the fair value and the respective carrying amount.
In particular, the fair values are determined on the basis of the methodology considered to be most appropriate
for each class of asset and liability acquired (for example, for the loan portfolio, the discounted cash flow
method).
If the fair value of the net assets acquired exceeds the total amount paid, the Group again verifies whether it
correctly identified all the assets acquired and all the liabilities assumed and revises the procedures used to
determine the amounts to be recognised at the acquisition date. If the new valuation still shows a fair value of
the net assets acquired higher than the amount, the difference (profit) is recognised in the income statement as
“gain on bargain purchase”.
Thereafter, in accordance with IAS 36, goodwill must be impairment tested annually, to check that the value can
be recovered. The recoverable value is the greater of Value in Use and fair value, net of the costs of sale.
In order to determine the value in use of goodwill allocated to the cash generating units (“CGUs”) making it up,
the Banca Ifis Group estimates both future cash flows in the explicit forecasting period and flows used to
determine the terminal value. In a similar fashion, the Group also estimates the discounting rate of future cash
flows previously estimated. The discounting rate has been determined by the Group using the “Capital Asset
Pricing Model” (CAPM).
We would refer you to the more detailed information given in Part B - Consolidated Statement of Financial
Position, Section 10 - Intangible assets - Item 100, Paragraph 10.3 Other information.
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With regard to the difference recognised in the income statement relating to the determined fair value and the
consideration paid for the acquisition of the business unit of the former Aigis Banca, please refer to the more
detailed comments in Part G “Business combinations” of these Consolidated financial statements.
For the other cases listed, reference should be made to the valuation criteria described in paragraph A.2 - Part
relating to the main items of these consolidated financial statements at 31 December 2021.
Coming into effect of new accounting standards
Standards issued, effective and applicable to these financial statements
The Consolidated Financial Statements at 31 December 2021 have been drawn up in accordance with the
IAS/IFRS accounting standards in force at the reporting date. See the paragraph “Statement of compliance with
international accounting standards”.
The accounting standards used in preparing these consolidated financial statements, as far as the classification,
recognition, measurement, and derecognition of financial assets and liabilities as well as the methods for
recognising revenue and costs are concerned, are the same as those used in preparing the consolidated financial
statements at 31 December 2020.
The Group has also adopted for the first time some accounting standards and amendments effective for years
beginning on or after 1 January 2021. Below are the new accounting standards and the amendments to existing
accounting standards endorsed by the EU, which have not materially affected the amounts reported in the
consolidated financial statements at 31 December 2021:
• “Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase
2” (from 1 January 2021);
• “Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 19”.
Standards issued but not yet effective
The following are the new international accounting standards or amendments to them, some of which not yet
endorsed by the European Commission, which are mandatory from 1 January 2022 or later. The Group does not
consider the impact of the adoption of the following interpretations and amendments of existing international
accounting standards to be material:
• “Amendments to:
– IFRS 3 Business Combinations;
– IAS 16 Property, Plant and Equipment;
– IAS 37 Provisions, Contingent Liabilities and Contingent Assets
– Annual Improvements 2018-2020” (all from 1 January 2022);
• “Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current and Classification of Liabilities as Current or Non-current - Deferral of Effective Date (from
1 January 2023);
• “Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure
of Accounting policies” (from 1 January 2023);
• “Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (from 1 January 2023);
• “IFRS 17 Insurance Contracts, including Amendments to IFRS 17” (from 1 January 2023).
There were no other changes requiring disclosure as per IAS 8, paragraphs 28, 29, 30, 31, 39 and 40.
Banca Ifis | 2021 Consolidated financial statements and report
100
Deadlines for the approval and publication of the Financial Statements
Pursuant to Article 154-ter of Italian Legislative Decree no. 59/98 (Consolidated Law on Finance), the Parent
company must approve the separate financial statements and publish the Consolidated Annual Financial Report,
including the draft separate financial statements, the directors' report, and the declaration as per Article 154-bis,
paragraph 5, within 120 days of the end of the financial year. The Board of Directors approved the Parent
company’s draft separate financial statements and the consolidated financial statements on 10 March 2022;
the Parent company’s separate financial statements will be submitted to the Shareholders’ Meeting to be held
on 28 April 2022 at first call for approval.
A.2 - Main items of the financial statements
1 - Financial assets measured at fair value through profit or loss (“FVTPL”)
Classification criteria
This category comprises financial assets other than Financial assets measured at fair value through other
comprehensive income and Financial assets measured at amortised cost. Specifically, this line item includes:
• financial assets held for trading, essentially consisting of debt and equity securities as well as the
positive amount of derivative contracts held for trading;
• financial assets measured at fair value, i.e. non-derivative financial assets designated as such on initial
recognition if the relevant conditions are met. At initial recognition, an entity may irrevocably designate
a financial asset as measured at fair value through profit or loss if, and only if, doing so would eliminate
or significantly reduce a measurement or recognition inconsistency.
• financial assets mandatorily measured at fair value, consisting of financial assets that are not eligible
for the measurement at amortised cost or fair value through other comprehensive income based on the
relevant business model or cash flow characteristics. Specifically, this category includes:
– debt instruments, securities and loans without cash flows that are solely payments of principal
and interest consistent with a “basic lending arrangement” (so-called “SPPI test” failed);
– debt instruments, securities and loans held within a business model that is neither “Held to
collect” (whose objective is to hold the asset to collect contractual cash flows) nor “Held to
collect and sell” (whose objective is achieved by both collecting contractual cash flows and
selling financial assets);
– UCITS units;
– equity instruments for which the Group elects not to use the option under the standard to
measure them at fair value through other comprehensive income (so-called “OCI Option”).
Derivative contracts include those embedded in complex financial instruments if the host contract is not a
financial asset falling within the scope of IFRS 9, which are recognised separately if:
• the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
• a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative;
• the hybrid instrument they are part of is not measured at fair value with the relevant changes recognised
in profit or loss.
Reclassifications to other categories of financial assets are allowed only if the entity changes its business model
to manage the financial assets. In these cases, financial assets may be reclassified from the category measured
at fair value through profit or loss to one of the other two categories under IFRS 9 (Financial assets measured
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at amortised cost or Financial assets measured at fair value through other comprehensive income). The transfer
value corresponds to the fair value at the time of the reclassification, which is applied prospectively from the
reclassification date. In this case, the effective interest rate of the reclassified financial asset is calculated based
on its fair value at the reclassification date, which is considered to be the date of initial recognition for the stage
allocation for impairment purposes.
Recognition criteria
Financial assets are initially recognised at the date of settlement in the case of debt and equity securities, and
at inception in the case of derivative contracts. At initial recognition, financial assets held for trading are
measured at cost, that is the instrument's fair value, excluding the expenses and income directly attributable to
the instrument, which are recognised in profit or loss.
Measurement criteria
Even after initial recognition, financial assets are measured at fair value, and the impact of the application of this
method is recognised through profit or loss.
The fair value of the financial instruments included in this portfolio is calculated based on quoted prices in active
markets, prices provided by market participants, or internal valuation models generally used for pricing financial
instruments that take into account all relevant risk factors and are based on observable market data.
In the case of financial assets not quoted in an active market, the cost method is used as an approximation of
fair value exclusively on a residual basis and in limited circumstances, that is if all the other previously mentioned
measurement methods are not applicable.
Derecognition criteria
Financial assets are derecognised exclusively when all relevant risks and rewards have been substantially
transferred. Should the company retain part of the relevant risks and rewards, the financial assets will continue
to be recognised, even though legal ownership has been actually transferred to a third party.
Where it is not possible to ascertain the substantial transfer of the risks and rewards, financial assets are
derecognised if the company no longer has control over them. Otherwise, the financial assets are recognised
proportionally to the entity’s continuing involvement in the asset, measured according to the exposure to
changes in the transferred assets’ value and cash flows.
Lastly, as for the transfer of collection rights, transferred financial assets are derecognised even if contractual
rights to receive cash flows are maintained but an obligation to pay such flows to one or more entities is taken
on.
2 - Financial assets measured at fair value through other comprehensive income (“FVOCI”)
Classification criteria
This category comprises financial assets that meet both the following conditions:
• the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets (“Held to Collect and Sell” Business Model), and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest consistent with a “basic lending arrangement”, in which consideration
for the time value of money and credit risk are typically the most significant elements of interest (so-
called “SPPI test” passed).
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In addition, this line item includes equity instruments not held for trading for which at initial recognition the entity
used the option to measure them at fair value through other comprehensive income not to be reclassified to
profit or loss (so-called “OCI Option”).
Reclassifications to other categories of financial assets are allowed only if the entity changes its business model
to manage the financial assets. In these cases, financial assets may be reclassified from the category measured
at fair value through other comprehensive income to one of the other two categories under IFRS 9 (Financial
assets measured at amortised cost or Financial assets measured at fair value through profit or loss). The
transfer value corresponds to the fair value at the time of the reclassification, which is applied prospectively
from the reclassification date. If the asset is reclassified from the category concerned to amortised cost, the fair
value of the financial asset at the reclassification date is adjusted by the accumulated gain (loss) presented in
the valuation reserve. If the asset is reclassified to fair value through profit or loss, the accumulated gain (loss)
previously recognised within the valuation reserve is reclassified from equity to profit or loss.
Recognition criteria
Financial assets are initially recognised at the date of settlement in the case of debt and equity securities,
whereas loans are recognised at the date they were granted. These assets are initially recognised at fair value,
including transaction costs directly attributable to the instruments, if any.
Measurement criteria
After initial recognition, the assets measured at fair value through other comprehensive income that are not
equity securities are measured at fair value, recognising the impact of the application of amortised cost,
impairment, and any exchange rate changes through profit or loss. Gains and losses resulting from changes in
fair value are recognised under a dedicated equity reserve until the financial asset is transferred: then, accrued
profits and losses are reclassified to profit or loss.
The equity instruments the Group elected to classify within this category are measured at fair value, and the
amounts recognised through equity (Statement of comprehensive income) are not to be subsequently
reclassified to profit or loss - including in the event of their disposal. The relevant dividends represent the only
component of the equity securities concerned that is recognised through profit or loss.
The fair value is calculated on the basis already described for Financial assets measured at fair value through
profit or loss.
In the case of Financial assets measured at fair value through other comprehensive income that are either debt
securities or receivables, at each reporting date, including interim reporting dates, the Bank assesses whether a
significant increase in credit risk (impairment) has occurred pursuant to IFRS 9, recognising an impairment loss
to cover the expected credit losses through profit or loss.
Conversely, equity securities are not tested for impairment.
Derecognition criteria
Financial assets measured at fair value through other comprehensive income are derecognised exclusively when
all relevant risks and rewards have been substantially transferred. Should the company retain part of the relevant
risks and rewards, the financial assets will continue to be recognised, even though legal ownership has been
actually transferred to a third party.
Where it is not possible to ascertain the substantial transfer of the risks and rewards, financial assets are
derecognised if the company no longer has control over them. Otherwise, the financial assets are recognised
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proportionally to the entity’s continuing involvement in the asset, measured according to the exposure to
changes in the transferred assets’ value and cash flows.
Lastly, as for the transfer of collection rights, transferred financial assets are derecognised even if contractual
rights to receive cash flows are maintained but an obligation to pay such flows to one or more entities is taken
on.
3 - Financial assets measured at amortised cost
Classification criteria
This category includes financial assets (specifically loans and debt securities) that meet both the following
conditions:
• the financial asset is held within a business model whose objective is achieved by collecting contractual
cash flows (“Held to Collect” Business Model), and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest consistent with a “basic lending arrangement”, in which consideration
for the time value of money and credit risk are typically the most significant elements of interest (so-
called “SPPI test” passed).
Specifically, if the above technical requirements are met, this line item includes:
• amounts due from banks, with the exception of on demand receivables (which, in compliance with the
October 2021 7th update of Bank of Italy Circular no. 262/2005, are classified under “Cash and cash
equivalents”);
• receivables due from customers, largely consisting of:
– demand advances to customers as part of factoring operations vis-à-vis a receivables portfolio
factored with recourse and still recognised in the seller’s statement of financial position, or vis-
à-vis receivables factored without recourse, providing no contractual clauses that eliminate the
conditions for their recognition exist;
– loans to customers deriving from mortgages or loans extended as part of corporate banking
operations;
– distressed retail loans acquired from banks and retail lenders;
– tax receivables resulting from insolvency proceedings;
– reverse repurchase agreements;
– receivables arising from finance leases;
– salary- or pension-backed loans.
• debt securities acquired through subscription or private placement, with fixed or determinable payments,
not quoted in active markets.
Reclassifications to other categories of financial assets are allowed only if the entity changes its business model
to manage the financial assets. In these cases, which are expected to be very infrequent, the financial assets
may be reclassified from the category measured at amortised cost to one of the other two categories under IFRS
9 (Financial assets measured at fair value through other comprehensive income or Financial assets measured
at fair value through profit or loss). The transfer value corresponds to the fair value at the time of the
reclassification, which is applied prospectively from the reclassification date. Gains or losses arising from the
difference between the amortised cost of the financial asset and the relevant fair value are measured through
profit or loss if the asset is reclassified to Financial assets measured at fair value through profit or loss or, if it
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is reclassified to Financial assets measured at fair value through other comprehensive income, through equity,
within the specific valuation reserve.
Recognition criteria
These financial assets are initially recognised at the date of settlement in the case of debt and equity securities,
whereas loans are recognised at the date they were granted. At initial recognition, the assets are measured at
fair value, including transaction income or costs directly attributable to the asset. Costs meeting these
characteristics, but to be reimbursed by the debtor or falling under normal internal administrative costs, are
excluded.
Repurchase agreements or reverse repurchase agreements are recognised as funding or lending transactions.
Specifically, repurchase agreements are recognised as payables for the amount received, while reverse
repurchase agreements are recognised as receivables for the amount paid.
Measurement criteria
After initial recognition, receivables are measured at amortised cost, which is equal to the initial amount
minus/plus principal repayments, impairment losses/reversals of impairment losses, and amortisation
calculated using the effective interest method. The effective interest rate is calculated as the rate at which the
present value of expected cash flows for the principal and interest is equal to the amount of the loan granted,
including any costs/revenues directly attributable to the financial asset. This finance-based accounting method
allows to spread the economic effect of costs/revenues over the expected residual life of the receivable.
The amortised cost method usually does not apply to short-term loans, as the effect of discounting would be
immaterial. These are measured instead at their acquisition cost. A similar criterion applies to loans without a
definite payment date or revocable loans. Furthermore, newly acquired distressed retail loans are measured at
cost until the Bank has started taking action to collect the debt, as specified later on in the part concerning non-
performing exposures in the Npl Segment.
At each reporting date, including interim reporting dates, the Group estimates the impairment of these assets in
accordance with the impairment rules of IFRS 9, detailed in the paragraph Other information of this section A.2.
The impairment losses found are recognised through profit or loss under “Net credit risk losses/reversals” and
so are the reversals of part or all of the amounts previously written down.
Impairment losses are reversed if the quality of the exposure has improved to the point of reducing the previously
recognised impairment loss.
In profit or loss, under “Interest receivable and similar income”, the Group recognises the amount represented by
the gradual reversal of the discount calculated at the time the impairment loss was recognised.
In some cases, throughout the life of the financial assets concerned, and specifically of receivables, the parties
to the agreement subsequently agree to modify the original contractual terms. When, during the life of an
instrument, the contractual terms are modified, the Group shall assess whether the original asset must continue
to be recognised or, conversely, the original instrument must be derecognised and a new financial instrument
recognised in its place.
Generally, modifications of a financial asset result in its derecognition and the recognition of a new asset when
they are “substantial”. The “substantiality” of the modification shall be assessed considering both qualitative
and quantitative factors. In some cases, it will become apparent, without conducting complex analyses, that the
changes introduced substantially modify the characteristics and/or contractual cash flows of a specific asset,
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whereas in other cases, additional analyses (including quantitative analyses) will be required to appreciate their
impact and assess whether to derecognise the asset and recognise a new financial instrument.
The (quali-quantitative) analyses aimed at defining the “substantiality” of the contractual modifications made to
a financial asset shall therefore consider:
• the purposes for which the modifications were made: for instance, renegotiations for business reasons
or forbearance measures due to the counterparty's financial difficulties:
– the former, intended to “retain” the customer, involve a borrower that is not in financial distress.
This case includes all renegotiations aimed at adjusting the cost of debt to market conditions.
These transactions result in changes to the original contractual terms, usually at the request of
the borrower, that concern aspects associated with the cost of debt, giving rise to an economic
benefit for the borrower. Generally, the Group believes that, whenever it enters into a
renegotiation in order to avoid losing the client, this renegotiation shall be considered as
substantial, since, in its absence, the customer could obtain financing from another intermediary
and the Group would see estimated future revenue decline;
– the latter, offered for “credit risk reasons” (forbearance measures), are part of the Group's
attempt to maximise the recovery of the cash flows of the original receivable. Following the
modifications, usually the underlying risks and rewards have not been substantially transferred:
therefore, the accounting presentation that provides the most relevant information to users of
the financial statements (expect for the following discussion about objective factors) is the one
made through “modification accounting” - whereby the difference between the carrying amount
and the present value of modified cash flows discounted at the original interest rate is
recognised through profit or loss - rather than derecognition;
• the existence of specific objective factors affecting the substantial modifications of the characteristics
and/or contractual cash flows of the financial instrument (including, but not limited to, the modification
of the type of counterparty risk the entity is exposed to) that are believed to require derecognising the
asset because of their impact (estimated to be significant) on the original contractual cash flows.
Derecognition criteria
A receivable is derecognised when it is considered unrecoverable and the Group forfeits the legal right to collect
it. For instance, this occurs when insolvency proceedings are settled, the borrower dies without heirs, a court
issues a final ruling that the debt does not exist, etc.
As for total or partial derecognitions without a forfeiture of the right to collect the receivable, to avoid continuing
to recognise receivables that, even though they are still managed by debt collection structures, are highly unlikely
to be recovered, at least every half-year, the Bank identifies the exposures to be derecognised that have all of the
following characteristics:
• the receivable has been written off;
• the receivable has been classified as a bad loan for more than 5 years;
• the counterparty has filed for bankruptcy, been put into administrative liquidation, or is subject to any
insolvency proceedings.
Derecognitions are directly recorded under net impairment losses on receivables to the extent of the unadjusted
remaining portion, and are recognised as a reduction of the principal. Partial or complete reversals of previous
impairment losses are recognised as a reduction of “net impairment losses on receivables”.
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Sold or securitised financial assets are derecognised exclusively when all relevant risks and rewards have been
transferred. Should the company retain part of the relevant risks and rewards, the financial assets will continue
to be recognised, even though legal ownership has been actually transferred to a third party.
In such cases, a financial liability is recognised for an amount equal to the consideration received.
If some, but not all, the risks and rewards have been transferred, financial assets are derecognised only if the
company no longer has control over them. Otherwise, the financial assets are recognised proportionally to the
entity's continuing involvement in them.
Finally, as for the transfer of collection rights, transferred financial assets are derecognised even if contractual
rights to receive cash flows are maintained but an obligation to pay such flows to one or more entities is taken
on.
4 - Property, plant and equipment
Classification criteria
The item includes property, plant and equipment held for investment purpose as well as those for functional use.
All property (either fully owned or leased) held by the company for the purposes of obtaining rent and/or a capital
gain fall under investment property.
All property (either fully owned or leased) held by the company for business and expected to be used for more
than one fiscal year fall under property for functional use.
Property, plant and equipment for functional use include:
• land;
• buildings;
• furniture and accessories;
• electronic office machines;
• various machines and equipment;
• vehicles;
• leasehold improvements on third-party property.
Those are physical assets held for use in production, in providing goods and services or for administrative
purposes, and that are expected to be used for more than one fiscal year.
This item also includes the rights of use acquired through leases and relating to the use of property, plant and
equipment.
Under IFRS 16, a lease is a contract, or part of a contract, that, in exchange for a fee, transfers the right to use
an asset (the underlying asset) for a period of time.
Leasehold improvements on third-party property are improvements and expenses relating to identifiable and
separable asset. Normally, this kind of investment is sustained in order to make a property rented from third
parties suitable for use.
Recognition criteria
Property, plant and equipment are initially recognised at cost, including all directly attributable costs connected
to the acquisition or to bring the asset into use.
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Subsequently incurred expenses are added to the carrying amount of the asset, or recognised as separate
assets, if they are likely to yield future economic benefits exceeding those initially estimated and if the cost can
be measured reliably; otherwise, they are recognised in profit or loss.
According to IFRS 16, leases are accounted for on a right of use basis, with the lessee having a financial
obligation at the inception date to make payments due to the lessor to compensate for its right to use the
underlying asset during the lease term.
When the asset is made available to the lessee for use (start date), the lessee recognises both the liability and
the asset consisting of the right of use.
Measurement criteria
Property, plant and equipment and investment property are measured at cost, net of any depreciation or
impairment losses.
Property, plant and equipment with a finite useful life are systematically depreciated on a straight-line basis over
their useful life.
Property, plant and equipment with an indefinite useful life, whose residual value is equal to or higher than their
carrying amount, are not depreciated.
For accounting purposes, land and buildings are treated separately, even when acquired together. Land is not
depreciated, as it has an indefinite useful life. Where the value of land is included in the value of a building, the
former is considered separately by applying the component approach. The separate values of the land and the
building are calculated by independent experts in this field and only for entirely owned properties.
The useful life, residual amounts and depreciation methods of property, plant and equipment are reviewed at the
closure of each period and, if expectations are not in line with previous estimates, the depreciation rate for the
current year and subsequent ones is adjusted.
If there is objective evidence that an individual asset may be impaired, the asset’s carrying amount is compared
to its recoverable amount, which is the higher of an asset's fair value less costs to sell and its value in use,
intended as the present value of future cash flows expected to arise from this asset. Any impairment loss is
recognised in profit or loss.
When an impairment loss is reversed, the new carrying amount cannot exceed the net carrying amount that
would have been measured if no impairment loss had been recognised on the asset in previous years.
The usually estimated useful lives are the following:
• buildings: not exceeding 34 years;
• furniture: not exceeding 7 years;
• electronic systems: not exceeding 5 years;
• other: not exceeding 5 years;
• Improvements on third party property/leasehold improvements: not exceeding 5 years.
With reference to the asset consisting of the right of use, recorded pursuant to IFRS 16, it is measured using the
cost model in accordance with IAS 16 Property, plant and equipment; in this case, the asset is subsequently
depreciated on a straight-line basis over the term of the lease contract and subject to an impairment test if
impairment indicators emerge.
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Derecognition criteria
Property, plant and equipment are derecognised from the statement of financial position on disposal or when
they are withdrawn from use and no future economic benefits are expected from their disposal. Any profit/loss
that arises at the time the asset is derecognised (calculated as the difference between the net carrying amount
of the asset and the amount received) is recognised in the Income Statement when the item is derecognised.
The right of use deriving from lease contracts is derecognised from the statement of financial position at the
end of the lease.
5 - Intangible assets
Classification criteria
Intangible assets are non-monetary assets, identifiable even though they lack physical substance, that meet the
requirements of identifiability, control over a resource and existence of future economic benefits. Intangible
assets mainly include goodwill and software.
Recognition criteria
Intangible assets are recognised in the statement of financial position at cost, i.e. the purchase price and any
direct cost incurred in preparing the asset for use.
Goodwill is represented by the positive difference between the acquisition cost and the fair value of the
acquiree’s assets and liabilities and when such positive difference is representative of the capacity to generate
returns in the future.
Measurement criteria
Intangible assets with a finite useful life are systematically amortised according to their estimated useful life.
If there is objective evidence that a single asset may be impaired, the asset’s carrying amount is compared to its
recoverable amount, which is the higher of an asset's fair value less costs to sell and its value in use, intended
as the present value of future cash flows expected to arise from this asset. Any impairment loss is recognised
in profit or loss.
Intangible assets with an indefinite useful life are not amortised. The carrying amount is compared with the
recoverable amount at least on an annual basis. If the carrying amount is greater than the recoverable amount,
a loss equal to the difference between the two amounts is recognised in profit or loss.
Should the impairment of an intangible asset (excluding goodwill) be reversed, the increased net carrying
amount cannot exceed the net carrying amount that would have been measured if no impairment loss had been
recognised on the asset in previous years.
Goodwill is recognised in the statement of financial position at cost, net of any accrued losses, and is not subject
to amortisation. Goodwill is tested for impairment at least annually by comparing its carrying amount to its
recoverable amount. To this end, goodwill must be allocated to cash-generating units (CGUs) in compliance with
the maximum combination limit that cannot exceed the “operating Segment” identified for internal management
purposes.
The impairment loss, if any, is calculated based on the difference between the carrying amount of the CGU plus
its recoverable amount, which is the higher of the CGU’s fair value less costs to sell and its value in use.
The amount of any impairment losses is recognised in profit or loss and is not derecognised in the following
years should the reason for the impairment be no longer valid.
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Derecognition criteria
An intangible asset is derecognised from the statement of financial position on disposal or when it is withdrawn
from use and no future economic benefits are expected from its disposal. Any gain or loss arising from the
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss.
6 - Current and deferred taxes
Classification criteria
Current and deferred taxes, calculated in compliance with national tax laws, are recognised in profit or loss with
the exception of items directly credited or debited to equity.
Current tax liabilities are shown in the statement of financial position gross of the relevant tax advances paid for
the current year.
Deferred tax assets and liabilities are recognised in the statement of financial position at pre-closing balances
and without set-offs, and are included in the items “Tax assets” and “Tax liabilities”, respectively, except when
there is a legally enforceable right to set off current tax assets against current tax liabilities, and the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which deferred tax liabilities
or assets are expected to be settled or recovered.
Under the existing tax consolidation arrangements between the Group companies, the current corporate income
(IRES) tax expense for the year is included in either other assets or other liabilities as receivables due
from/payables due to the consolidating/parent company La Scogliera S.p.A.
Recognition and measurement criteria
Deferred tax assets and liabilities are calculated based on temporary differences—without time limits—between
the value attributed to the asset or liability according to statutory criteria and the corresponding tax base,
applying the tax rates expected to be applicable for the year in which the tax asset will be realised, or the tax
liability will be settled, according to theoretical tax laws in force at the realisation date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• when the deferred tax liabilities arise from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss;
• when the timing of the reversal of taxable temporary differences associated with investments in
subsidiaries, associates and interests in joint arrangements can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses to the extent that it is probable that they can be recovered, based on the ability
of the company concerned or the Parent company, as a result of the “tax consolidation” option, to continue to
generate taxable profit, except:
• when the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss;
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• in respect of deductible temporary differences associated with investments in subsidiaries, associates
and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
7 - Provisions for risks and charges
The provisions for risks and charges on commitments and guarantees granted include the provisions for credit
risk set aside for loan commitments and the other guarantees granted that fall within the scope of the
impairment rules in IFRS 9. As a general rule, in this case the Bank adopts the same methods for allocating items
to three credit risk Stages and calculating expected credit losses as the ones described for financial assets
measured at amortised cost or at fair value through other comprehensive income.
In addition, these include also the provisions for risks and charges set aside for other types of commitments and
guarantees granted that, because of their specific characteristics, they do not fall within the scope of the
impairment rules in IFRS 9. Specifically, other provisions for risks and charges consist of liabilities arising when:
• a legal or constructive obligation exists as a result of a past event;
• it is likely that it will be necessary to spend resources which could generate economic benefits to settle
the obligation;
• the amount of the obligation can be reliably estimated.
Should all these conditions not be met, no liability is recognised.
The amount recognised as a provision represents the best estimate of the expense required to meet the
obligation and reflects the risks and uncertainties regarding the facts and circumstances in question.
Where the cost deferral is significant, the amount of the provision is determined as the present value of the best
estimate of the cost to settle the obligation. In this case a discount rate is used that reflects current market
assessments.
The provisions made are periodically reviewed and, if necessary, adjusted to reflect the best current estimate.
When the review finds that the cost is unlikely to be incurred, the provision is reversed.
8 - Financial liabilities measured at amortised cost
Classification criteria
Payables due to banks and customers and debt securities issued include the various forms of interbank funding,
as well as funding from customers and through outstanding bonds, net of any buybacks.
In addition, payables incurred by the lessee as part of finance lease transactions are also included.
Recognition criteria
Payables due to banks and customers and debt securities issued are initially recognised at their fair value, which
is equal to the consideration received, net of transaction costs directly attributable to the financial liability.
Measurement criteria
After initial recognition at fair value, these instruments are later measured at amortised cost, using the effective
interest method.
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The amortised cost method does not apply to short-term liabilities, as the effect of discounting would be
insignificant.
Lease payables are revalued when there is a lease modification (e.g. a change in the perimeter of the contract),
which is not accounted for/considered as a separate contract.
Derecognition criteria
Financial liabilities are derecognised when they are annulled, expired or settled. The difference between the
carrying amount and the acquisition cost is recognised in profit or loss.
Liabilities are derecognised also when previously issued securities are bought back, even if such instruments
will be sold again in the future. Gains and losses from such derecognition are recognised in profit or loss when
the buyback price is higher or lower than the carrying amount.
Subsequent sales of the company's own bonds on the market are considered as an issuance of new debt.
9 - Financial liabilities held for trading
Classification criteria
Financial liabilities held for trading refer to derivative contracts that are not hedging instruments.
Recognition criteria
At initial recognition, financial liabilities held for trading are recognised at fair value.
Measurement criteria
Even after initial recognition, financial liabilities held for trading are measured at fair value at the reporting date,
and the impact of the application of this method is measured through profit or loss. The fair value is calculated
based on the same criteria as those used for financial assets held for trading.
Derecognition criteria
Financial liabilities are derecognised when they are settled or when the obligation is fulfilled, cancelled or
expired. The difference arising from their derecognition is recognised in profit or loss.
10 - Foreign currency transactions
Initial recognition
At initial recognition, foreign currency transactions are recognised in the money of account, applying the
exchange rate at the date of the transaction.
Subsequent recognitions
At each reporting date, including interim periods, foreign currency monetary assets and liabilities are translated
using the closing exchange rate.
Non-monetary assets and liabilities recognised at historical cost are translated at the historical exchange rate,
while those measured at fair value are translated using the year-end rate. Any exchange differences arising from
the settlement of monetary elements or their translation at exchange rates different from those used at initial
recognition or in previous financial statements are recognised in profit or loss in the period in which they arise,
excluding those relating to available for sale financial assets, as they are recognised in equity.
11 - Other information
Post-employment benefits
Pursuant to IAS 19 “Employee benefits” and up to 31 December 2006, the so-called “TFR” post-employment
benefit for employees of the Group's Italian companies was classified as a “defined benefit plan”. It therefore
had to recognise this benefit by discounting it using the projected unit credit method.
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Following the coming into force of the 2007 Budget Law, which brought the reform regarding supplementary
pension plans - as per Italian Legislative Decree no. 252 of 5 December 2005 - forward to 1 January 2007, the
employee was given a choice as to whether to allocate the post-employment benefits earned as from 1 January
2007 to supplementary pension funds or to maintain them in the company, which would then transfer it to a
dedicated fund managed by INPS (the Italian National Social Security Institute).
This reform has led to changes in the accounting of post-employment benefits as for both the benefits earned
up to 31 December 2006 and those earned from 1 January 2007.
In particular:
• post-employment benefits earned as from 1 January 2007 constitute a “defined-contribution plan”,
regardless of whether the employee has chosen to allocate them to a supplementary pension fund or to
INPS's Treasury Fund. Those benefits shall be calculated according to contributions due without
applying actuarial methods;
• post-employment benefits earned up to 31 December 2006 continue to be considered as a “defined-
benefit plan”, and as such are calculated on an actuarial basis which, however, unlike the calculation
method applied until 31 December 2006, no longer requires that the benefits be proportionally attributed
to the period of service rendered. This is because the employee’s service is considered entirely accrued
due to the change in the accounting nature of benefits earned as from 1 January 2007.
Actuarial gains/losses shall be included immediately in the calculation of the net obligations to employees
through equity, to be reported in other comprehensive income.
Share-based payments
They are payments granted to employees or similar parties as remuneration for the services received that are
settled in equity instruments.
The relevant international accounting standard is IFRS 2 – Share-based payments; specifically, since the Group
is to settle the obligation for the service received in equity instruments (shares “to the value of”, i.e. a given
amount is converted into a variable number of shares based on the fair value at grant date), those payments fall
under “equity-settled share-based payments”. The cost of equity-settled transactions is determined by the fair
value at the date when the grant is made using an appropriate valuation model.
That cost is recognised in employee benefits expense together with a corresponding increase in equity over the
period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The cost or revenue in the statement of profit or loss for the year represents
the movement in cumulative expense recognised at the beginning and end of that year.
Treasury shares
Pursuant to regulations in force in Italy, buying back treasury shares requires a specific resolution of the
shareholders' meeting and the recognition of a specific reserve in equity. Treasury shares in the portfolio are
deducted from equity and measured at cost, calculated using the “Fifo” method. Differences between the
purchase price and the selling price deriving from trading in these shares during the accounting period are
recognised under equity reserves.
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Recognition of income and costs
Income from management and guarantee services for receivables purchased through factoring activities are
recognised under commission income according to their duration. Components considered in the amortised cost
to calculate the effective interest rate are excluded and recognised instead under interest income.
Costs are recognised on an accrual basis. Concerning the costs of the Npl Segment, the costs incurred upfront
for non-judicial debt collection operations through settlement plans, as well as legal expenses and registration
fees for judicial debt collection operations, are recognised in profit or loss under “Other administrative expenses”
in the period in which the positive impact of the relevant receivables deriving from the change in the underlying
cash flows associated with the plans entered into or the court orders obtained is recognised in profit or loss.
Dividends
Dividends are recognised through profit or loss in the year in which the resolution concerning their distribution
is passed.
Repurchase and reverse repurchase agreements
Securities received as a result of transactions that contractually require they are subsequently sold, as well as
securities delivered as a result of transactions that contractually require they are subsequently repurchased, are
not recognised in and/or derecognised from the financial statements.
Consequently, in cases of securities acquired under a reverse repurchase agreement, the amount paid is
recognised as due from customers or banks, or as a financial asset held for trading; and in cases of securities
sold under a repurchase agreement, the liability is entered under payables due to banks or customers, or under
financial liabilities held for trading. Income from these commitments, made up of the coupons matured on the
securities and of the difference between their spot price and their forward price, is recognised under interest
income in profit or loss.
The two types of transactions are offset if, and only if, they have been carried out with the same counterparty
and if such offsetting is contractually envisaged.
Amortised cost
The amortised cost of a financial asset or liability is its amount upon initial recognition, net of any principal
repayments, plus or minus the overall amortisation of the difference between the initial and the maturity value
calculated using the effective interest method, and deducting any impairment losses.
The effective interest rate method is a method of spreading interest income or interest expense over the duration
of a financial asset or liability. The effective interest rate is the rate that precisely discounts expected future
payments or cash flows over the life of the financial instrument at the net carrying amount of the financial asset
or liability. It includes all the expenses and basis points paid or received between the parties to a contract that
are an integral part of such rate, as well as the transaction costs and all other premiums or discounts.
Commissions considered an integral part of the effective interest rate are the initial commissions received for
selling or buying a financial asset not classified as measured at fair value: for example, those received as
remuneration for the assessment of the debtor’s financial situation, for the assessment and the registration of
sureties and, in general, for completing the transaction.
Transaction costs, in turn, include fees and commissions paid to agents (including employees that act as sales
agents), advisors, brokers and dealers, levies charged by regulatory bodies and stock exchanges, and transfer
taxes and duties. Transaction costs do not include financing, internal administration or operating costs.
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Amortised cost applies to financial assets measured at amortised cost and at fair value through other
comprehensive income, as well as financial liabilities measured at amortised cost.
Specifically concerning financial assets that are considered to be impaired at initial recognition, be they
measured at amortised cost or fair value through other comprehensive income, and classified as “Purchased or
Originated Credit Impaired (POCI) Financial Assets”, at initial recognition, the Bank calculates a credit-adjusted
effective interest rate for which it is necessary to incorporate the initial expected credit losses into cash flow
estimates. The Bank uses said credit-adjusted effective interest rate to apply the amortised cost method and,
therefore, calculate the relevant interest.
Purchased or Originated Credit Impaired (POCI) Financial Assets
“Purchased or Originated Credit Impaired (POCI) Financial Assets” means the exposures that were impaired at
the date they were acquired or originated.
POCI financial assets include also the exposures acquired as part of sales (of either individual assets or
portfolios) and business combinations.
Based on the Business Model within which the asset is managed, POCI financial assets are classified as either
Financial assets measured at fair value through other comprehensive income or Financial assets measured at
amortised cost. As previously mentioned, interest is accounted for by applying a credit-adjusted effective
interest rate, i.e. the rate that, upon initial recognition, discounts all the asset's estimated future cash receipts at
amortised cost considering also lifetime expected credit losses.
The Bank regularly reviews said expected credit losses, recognising impairment losses or gains through profit
or loss. Favourable changes in lifetime ECLs are recognised as an impairment gain, even if said lifetime ECLs are
lower than those incorporated into cash flow estimates at initial recognition.
“Purchased or Originated Credit Impaired Financial Assets” are usually allocated to Stage 3 at initial recognition.
A subsequent improvement in the counterparty's creditworthiness, which may be reflected in the present value
of cash flows, shall cause the exposure to be classified within Stage 2.
These assets shall never be allocated to Stage 1, as the expected credit loss must always be calculated over a
time horizon equal to their remaining useful life.
The Npl Segment's receivables all qualify as POCI financial assets and are recognised and assessed through the
following steps:
• at the time of purchase, receivables are recognised by allocating the portfolio's purchase price among
the individual receivables it consists of through the following steps:
– recognition of the individual receivables at a value equal to the contract price, which is used for
the purposes of reporting to the Central Credit Register;
– after verifying the documentation, if provided in the contract, the Bank returns the positions
lacking documentation or beyond the statute of limitations to the seller, and measures the fair
value of receivables which actually exist and can be collected; finally, after sending a notice of
assignment to the debtor, the Bank can start taking action to collect the receivable;
– once the collection process begins, receivables are measured at amortised cost using the
effective interest rate method;
Banca Ifis | 2021 Consolidated financial statements and report
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– the effective interest rate is calculated on the basis of the price paid, the transaction costs, if
any, and the estimated cash flows and collection time calculated using either proprietary models
or analytical estimates made by managers;
– the effective interest rate as set out in the previous point is unchanged over time;
– at the end of each reporting period, interest income accrued on the basis of the original effective
interest rate is recognised under Interest Income. Said interest is calculated as follows:
Amortised Cost at the beginning of the period x IRR/365 x days in the period;
– in addition, at the end of each reporting period, the expected cash flows for each position are re-
estimated;
• should events occur (higher or lower revenues realised or expected compared to forecasts and/or a
change in collection times) which cause a change in the amortised cost (calculated by discounting the
new cash flows at the original effective rate compared to the amortised cost in the period), this change
is also recognised under Credit risk losses/reversals.
Impairment of financial instruments
Under IFRS 9, the relevant impairment provisions apply to financial assets measured at amortised cost, financial
assets measured at fair value through other comprehensive income that are not equity securities, and loan
commitments and guarantees granted that are not measured at fair value through profit or loss.
“Expected Credit Losses” (ECLs) are calculated based on whether the financial instrument's credit risk has
significantly increased since initial recognition.
The general impairment model requires allocating the financial instruments within the scope of IFRS 9 to three
Stages, which reflect the deterioration in credit quality:
• Stage 1: financial instruments that have not had a significant increase in credit risk since initial
recognition or that have low credit risk at the reporting date;
• Stage 2: financial instruments that have had a significant increase in credit risk since initial recognition
(unless they have low credit risk at the reporting date) but that individually do not have objective
evidence of impairment;
• Stage 3: financial assets that have had a significant increase in credit risk since initial recognition with
objective evidence of impairment at the reporting date. This coincides with non-performing exposures,
i.e. those classified as bad loans, unlikely to pay, or non-performing past due exposures according to the
rules of the Bank of Italy.
In this context, the Group has adopted a method for determining the “significant” increase in credit risk with
respect to the initial recognition date, which involves classifying the instruments in Stages 1 and 2, combining
statistical (quantitative) and performance (qualitative) elements, as part of the estimate of impairment of
performing loans.
To identify the significant increase in credit risk, the Banca Ifis Group applies the following quantitative and
qualitative transfer criteria to the loan portfolio according to the type of counterparty defined by segmenting
receivables into portfolios:
• The only quantitative transfer criterion is the Significant Deterioration for which, to identify the
“significant increase in credit risk” on exposures within rated portfolios (Italian companies), an approach
was used backed by quantitative analyses, under which the exposure is allocated to Stage 2 if the
change in the one-year PD between the origination and the measurement date exceeds a given threshold;
• Qualitative transfer criteria:
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– “Rebuttable presumption – 30 days past due”: the Standard establishes that, regardless of how
the entity assesses significant increases in credit risk, there is a rebuttable presumption that the
credit risk on a financial asset has increased significantly since initial recognition when
contractual payments are more than 30 days past due. The entity can rebut this presumption if
it has reasonable and supportable information that demonstrates that the credit risk has not
increased significant since initial recognition even though the contractual payments are more
than 30 days past due. However, the Ifis Group has not pursued this option;
– Forbearance: according to this criterion, a financial instrument is allocated to Stage 2 when the
Group classifies the exposure as forborne;
– Watchlist: this requires identifying qualitative deterioration criteria defined by the Group as part
of the process for defining especially risky positions during credit monitoring.
According to IFRS 9, an entity may assume that the credit risk on a financial instrument has not increased
significantly since initial recognition if the financial instrument is determined to have low credit risk at the
reporting date, that is:
• it has a low risk of default;
• the borrower is considered, in the short term, to have a strong capacity to meet its obligations;
• the lender expects, in the longer term, that adverse changes in economic and business conditions might
reduce the ability of the borrower to fulfil its obligations.
The measurement of expected credit losses (ECLs) accounts for cash shortfalls, the probability of default, and
the time value of money. Specifically, the Group measures the loss allowance for the financial instrument as:
• expected losses at 12 months for positions that have not suffered a significant deterioration in
creditworthiness (Stage 1); i.e. an estimate of the non-payments resulting from possible default events
in the following 12 months, weighted by the probability that such events will occur;
• expected “Lifetime” losses for positions that have suffered a significant deterioration in creditworthiness
(Stage 2); in this case, it estimates the cash shortfalls resulting from default events that are possible
over the expected life of the financial instrument, weighted by the probability of that default occurring
and discounted at the measurement date (ECL).
To ensure its collective impairment calculations are in the closest possible compliance with regulatory
requirements, the Group has defined a specific methodological framework. This involved developing quantitative
methods and analyses based on proprietary datasets as well as qualitative methods and analyses to essentially
model the following risk parameters and the methodological aspects relevant to the calculation of impairment
under IFRS 9:
• estimated Probability of Default (PD);
• estimated Loss Given Default (LGD);
• estimated Exposure at Default (EAD);
• definition of the stage allocation transfer logic;
• calculation of the expected credit losses including point-in-time factors;
• calculation of the expected credit losses including forward-looking elements.
Concerning the exposures to Banks, Central Governments, and Public-sector Entities (low default portfolios), the
Group used default rates associated with migration matrices provided by public information of Moody's ratings
or other external providers.
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On some subsidiaries, even though the generic reserves are determined using a lump sum approach, and
therefore according to the level of risk calculated (PD, LGD and EAD), on the basis of internal evidence, the
specific reserves may use different calculation methods (by way of example, adopting a judgemental approach
rather than a lump sum approach), on the basis of the legal experience accrued on forecast cash flow on default
positions. The Risk Management Department periodically compares the balance of the reserves with the
estimated losses expected, obtained using the risk levels forecast on the basis of internal evidence, which can
be traced to the same impaired positions.
As for the securities portfolio, considering the methodological complexity associated with developing a
dedicated model, the Group decided to use the calculation of impairment under IFRS 9 that the outsourcer of the
computer system provides at consortium level (i.e. estimating risk parameters, calculating the Stage allocation
and ECLs). Specifically, the formula used to calculate the impairment of the tranches allocated to Stage 1 and 2
is consistent with the approach to credit exposures. The Stage allocation of performing debt securities requires
using an external rating of the issue or, if this is not available, the issuer; in short, the securities are allocated to
the different Stages based on specific transfer criteria associated with this type of portfolio. Exposures are
allocated to Stage 3 if credit risk has deteriorated to the point that the security is considered impaired, i.e.
classified as non-performing, including in the case of financial instruments in default.
In developing the above methods, the Group has considered multiple solutions, the current and prospective
complexity of its portfolio, as well as how to maintain and update risk parameters.
A multi-period approach to risk parameters has been developed exclusively for the PD; the other credit risk
parameters (LGD and CCF) are applied on a constant basis until maturity. LGD has been estimated on the basis
of proprietary historical data with the exception of the counterparties Banks, Central Governments, and Public-
sector Entities (excluding municipalities), for which, in the absence of objective historical data, a sector LGD has
been used.
The Group has adopted econometric models (based on the stress test framework - “satellite” models), aimed at
forecasting the evolution of the institute’s risk factors (i.e. mainly PD, LGD, EAD and migrations between statuses
for credit risk) on the basis of a joint forecast of the evolution of the economic and financial indicators (see
macroeconomic scenario).
The satellite models meet the need to identify the existence of a significant relationship between the general
economic conditions (i.e. macroeconomic and financial variables) and a proxy variable of the risk factor (i.e.
target variable) e.g. the credit rating of counterparties (which represents the respectively probability of default
as a summary of the PD factor) and the recovery rates (summarising the LGD factor for bad loans).
The Risk Management Department has included the forecasts defined by its satellite models in the structures
at the end of the PD lifetime. For the purpose of applying macroeconomic shifts, the migration matrices have
been defined between the different credit statuses of each perimeter and the scaling factors derived, to be
applied to the curves as per the defined method. Starting out, therefore, from an initial transition matrix, the
approach used allows for a stressed matrix to be obtained.
The satellite models developed for the PD have also been applied to the danger rate, used in LGD.
For Stage 3 exposures that are not individually tested for impairment, the Group defines a lifetime provision in
line with the concept of expected credit loss. Specifically concerning LGD, to calculate the collective losses for
Stage 3 exposures (mainly non-performing past due and unlikely-to-pay), the Group made certain adjustments
to ensure consistency with the measures used for performing loans.
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A.3 - Disclosure of transfers of financial assets between portfolios
No financial assets were transferred between portfolios during 2021.
A.4 - Fair value disclosure
Qualitative disclosure
Fair value is the price that would be received to sell an asset or the price paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date, under current market
conditions (i.e. the exit price), regardless of the fact that said price is directly observable or that another
measurement approach is used.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
IFRS 13 establishes a fair value hierarchy based on the extent to which inputs to valuation techniques used to
measure the underlying assets/liabilities are observable. Specifically, the hierarchy consists of three levels.
• Level 1: the instrument's fair value is measured based on (unadjusted) quoted prices in active markets.
• Level 2: the instrument's fair value is measured based on valuation models using inputs observable in
active markets, such as:
– quoted prices for similar assets or liabilities;
– quoted prices for identical or similar assets or liabilities in non-active markets;
– observable inputs such as interest rates or yield curves, implied volatility, default rates and
illiquidity factors;
– inputs that are not observable but supported and confirmed by market data.
• Level 3: the instrument's fair value is measured based on valuation models using mainly inputs that are
unobservable in active markets.
Each financial asset or liability of the Group is categorised in one of the above levels, and the relevant
measurements may be recurring or non-recurring (see IFRS 13, paragraph 93, letter a). The fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input.
The choice among the valuation techniques is not optional, since these shall be applied in a hierarchical order:
indeed, the fair value hierarchy gives the highest priority to (unadjusted) quoted prices available in active markets
for identical assets or liabilities (Level 1 data) and the lowest priority to unobservable inputs (Level 3 data).
Valuation techniques used to measure fair value are applied consistently on an on-going basis.
A.4.1 Fair value levels 2 and 3: valuation techniques and inputs used
In the absence of quoted prices in an active market, the fair value measurement of a financial instrument is
performed using valuation techniques maximising the use of inputs observable on the market.
The use of a valuation technique is intended to estimate the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date, under
current market conditions. In this case, the fair value measurement may be categorised in Level 2 or Level 3,
according to what extent inputs to the pricing model are observable.
In the absence of observable prices in an active market for the financial asset or liability to be measured, the fair
value of the financial instruments is measured using the so-called comparable approach (Level 2), requiring
valuation models based on market inputs.
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In this case, the valuation is not based on the quoted prices of the financial instrument being measured (identical
asset), but on prices, credit spreads or other factors derived from the official quoted prices of instruments that
are substantially similar in terms of risk factors and duration/return, using a given calculation method (pricing
model).
In the absence of quoted prices in an active market for a similar instrument, or should the characteristics of the
instrument to be measured not allow to apply models using inputs observable in active markets, it is necessary
to use valuation models assuming the use of inputs that are not directly observable in the market and, therefore,
requiring to make estimates and assumptions (non observable input - Level 3). In these cases, the financial
instrument is measured using a given calculation method that is based on specific assumptions regarding:
• the trend in future cash flows, possibly contingent on future events whose probability of occurring can
be derived from historical experience or based on behavioural assumptions;
• the level of specific inputs not quoted on active markets: for the purposes of estimating them,
information acquired from prices and spreads observed on the market shall have a higher priority. If
these are not available, entities shall use historical data about the specific underlying risk factor or
specialist research on the matter (e.g. reports by ratings agencies or primary market players).
In the cases described above, entities may make valuation adjustments taking into account the risk premiums
considered by market participants in pricing instruments. If not explicitly considered in the valuation model,
valuation adjustments may include:
• model adjustments: adjustments that take into account any deficiencies in the valuation models
highlighted during calibration;
• liquidity adjustments: adjustments that take into account the bid-ask spread if the model calculates a
mid-price;
• credit risk adjustments: adjustments related to the counterparty or own credit risk;
• other risk adjustments: adjustments related to a risk premium “priced” in the market (e.g. relating to the
complexity of valuation of an instrument).
With regard to the valuation of financial assets and liabilities measured at fair value on a recurring basis, the
method used by the Group for receivables mandatorily measured at fair value is the Discounted Cash Flow Model,
which discounts the expected cash flows of each loan at a market rate that takes into account elements such
as the risk-free rate for equal maturities, the funding cost, the lifetime credit risk of the counterparty and the cost
of capital absorption.
In order to measure unquoted equity instruments, the Bank mainly uses income or financial models (Discounted
Cash Flow Model or market multiples for comparable entities).
With specific reference to the valuation of UCITS units, the approach used on the basis of the methods presented
above for the valuation is the Net Asset Value determined by the AMC. It must be verified whether, in determining
the NAV, the fund's assets have been measured at fair value in accordance with the IVS (International Valuation
Standards) and/or the RICS Valuation (Professional Standards Red Book). A discount is applied to the NAV
determined in this way using a structured rate as described above.
As for over-the-counter (OTC) derivatives not quoted in active markets, their fair value is calculated based on
measurement techniques that take into account all risk factors that could affect the value of the financial
instrument concerned, using observable market inputs (interest rates, exchange rates, share indices, etc.)
adjusted as appropriate to account for the creditworthiness of the specific counterparty, including the
Banca Ifis | 2021 Consolidated financial statements and report
120
counterparty's credit risk (CVA, Credit Value Adjustment) and/or the Group's own credit risk (DVA, Debt Value
Adjustment).
As for the measurement of financial assets and liabilities measured at fair value on a non-recurring basis, the
relevant portfolio consists of on-balance-sheet exposures classified as performing with a residual life exceeding
one year (medium-long term). Therefore, all exposures classified as in default, the ones with a residual life less
than one year, and unsecured loans are excluded from the measurement, as the Bank believes that their
amortised cost can be used as an approximation of fair value.
For the purposes of measuring performing loans at fair value, given the absence of prices directly observable on
active and liquid markets, entities shall use valuation techniques based on a theoretical model meeting the
requirements of IAS/IFRS standards (Level 3). The approach used to determine the fair value of receivables is
the Discounted Cash Flow Model, i.e. the discounting of expected future cash flows at a risk-free rate for the
same maturity, increased by a spread representative of the counterparty's risk of default plus a liquidity premium.
As for the receivables portfolio of the Npl Segment, which purchases and manages non-performing receivables
mainly due from individuals, the Discounted Cash Flow Model is used to calculate fair value. In this case, the
expected net cash flows are discounted at a market rate. The market rate is calculated without considering a
credit spread, since the credit risk of the individual counterparties is already incorporated in the statistical model
used to estimate future cash flows with regard to collective management (non-judicial operations). The model
projects the relevant cash flows based on historical evidence concerning the recovery of positions in the Group's
portfolio. As for individual management (judicial operations), the projections of future cash flows are based on
an internal algorithm or defined by the manager according to how the underlying receivable is being processed.
As for acquired tax receivables, the Bank believes their amortised cost can be used as an approximation of fair
value. The only element of uncertainty concerning these receivables due from tax authorities is the time required
for collecting them; currently, there are no significant differences in the time it takes for the tax authorities to
repay their debts. It should also be noted that the Banca Ifis Group is one of the leading players in this operating
Segment, which makes it a price maker in the case of sales.
In general, for the purposes of the Level 3 fair value measurement of assets and liabilities, reference is made to:
• market rates calculated, according to market practice, using either money market rates for maturities
less than one year, and swap rates for greater maturities, or the rates quoted in the market for similar
transactions;
• Banca Ifis's credit spreads;
• financial statements and information from business plans.
A.4.2 Measurement processes and sensitivity
In compliance with IFRS 13, for financial assets and liabilities measured at fair value categorised within level 3,
the Group tests their sensitivity to changes in one or more unobservable inputs used in the fair value
measurements like, by way of example and in no means exhaustive, discount rates applied to cash flows or
expected cash flows themselves.
A.4.3 Fair value hierarchy
Concerning recurring fair value measurements of financial assets and liabilities, the Banca Ifis Group transfers
them between levels of the hierarchy based on the following guidelines.
Debt securities and loans are transferred from level 3 to level 2 when the inputs to the valuation technique used
are observable at the measurement date. The transfer from level 3 to level 1 is allowed when it is confirmed that
Banca Ifis | 2021 Consolidated financial statements and report
121
there is an active market for the instrument at the measurement date. Finally, they are transferred from level 2
to level 3 when some inputs relevant in measuring fair value are not directly observable at the measurement
date.
Equity securities classified as assets measured at fair value through other comprehensive income are
transferred between levels when:
• observable inputs became available during the period (e.g. prices for identical assets and liabilities
defined in comparable transactions between independent and knowledgeable parties). In this case, they
are reclassified from level 3 to level 2;
• inputs directly or indirectly observable used in measuring them are no longer available or current (e.g.
no recent comparable transactions or no longer applicable multiples). In this case, the entity shall use
valuation techniques incorporating unobservable inputs.
Quantitative information
A.4.5 Fair value hierarchy
A.4.5.1 Assets and liabilities measured at fair value on a recurring basis: breakdown by fair value level
Financial assets/liabilities measured at fair value
(in thousands of Euro)
31.12.2021
31.12.2020
L1
L2
L3
L1
L2
L3
1. Financial assets measured at fair value through
profit or loss
1.474
7.004
144.660
11.624
19.250
126.974
a) financial assets held for trading
1.474
7.004
-
1.620
19.250
-
b) financial assets measured at fair value
-
-
-
-
-
-
c) other financial assets mandatorily measured at
fair value
-
-
144.660
10.004
-
126.974
2. Financial assets measured at fair value through
other comprehensive income
575.409
-
38.604
749.322
-
25.233
3. Hedging derivatives
-
-
-
-
-
-
4. Property, plant and equipment
-
-
-
-
-
-
5. Intangible assets
-
-
-
-
-
-
Total
576.883
7.004
183.264
760.946
19.250
152.207
1. Financial liabilities held for trading
-
5.992
-
-
18.551
-
2. Financial liabilities measured at fair value
-
-
-
-
-
-
3. Hedging derivatives
-
-
-
-
-
-
Total
-
5.992
-
-
18.551
-
Key:
L1 = Level 1: fair value of a financial instrument quoted in an active market;
L2 = Level 2 fair value measured using valuation techniques based on observable market inputs other than the financial instrument's
price;
L3 = Level 3 fair value calculated using valuation techniques based on inputs not observable in the market.
At 31 December 2021, the impact of applying the Credit Value Adjustment to the book values of the derivatives
with a positive mark-to-market amounted to 0,2 million Euro (related to derivatives held for trading); as for the
instruments with a negative mark-to-market, there was no impact resulting from the application of the Debit
Value Adjustment to the book values of the derivatives.
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With respect to financial assets that are mandatorily measured at fair value, as of December 2020, 10,0 million
Euro related to units of non-strategic UCITs in the Proprietary Finance function were classified as Level 1, which
were then divested during 2021.
A.4.5.2 Annual changes in assets measured at fair value on a recurring basis (level 3)
Financial assets measured at fair value through
profit or loss
Financial
assets
measured
at fair
value
through
other
comprehe
nsive
income
Hedging
derivative
s
Property,
plant and
equipmen
t
Intangible
assets
Total
of which:
a)
financial
assets
held for
trading
of which:
b)
financial
assets
measured
at fair
value
of which:
c) other
financial
assets
mandatori
ly
measured
at fair
value
1. Opening balance
126.975
-
-
126.975
25.233
-
-
-
2. Increases
93.769
-
-
93.769
30.124
-
-
-
2.1. Purchases
45.553
-
-
45.553
30.124
-
-
-
2.2. Profit taken to:
-
-
-
-
-
-
-
-
2.2.1. Income Statement
18.719
-
-
18.719
-
-
-
-
- of which capital gains
17.216
-
-
17.216
-
-
-
-
2.2.2. Equity
-
X
X
X
2.3. Transferred from other levels
-
-
-
-
-
-
-
-
2.4. Other increases
29.497
-
-
29.497
-
-
-
-
3. Decreases
76.084
-
-
76.084
16.754
-
-
-
3.1. Sales
22.701
-
-
22.701
15.000
-
-
-
3.2. Reimbursements
12.314
-
-
12.314
-
-
-
-
3.3. Losses taken to:
-
-
-
-
-
-
-
-
3.3.1. Income Statement
7.968
-
-
7.968
-
-
-
-
- of which capital losses
7.968
-
-
7.968
-
-
-
-
3.3.2. Equity
-
X
X
X
1.754
-
-
-
3.4. Transferred to other levels
4.502
-
-
4.502
-
-
-
-
3.5. Other
decreases
28.599
-
-
28.599
-
-
-
-
4. Closing balance
144.660
-
-
144.660
38.603
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
123
A.4.5.4 Assets and liabilities not measured at fair value or measured at fair value on a non-recurring
basis: breakdown by fair value levels
Assets and liabilities not
measured at fair value or
measured at fair value on a
non-recurring basis
(in thousands of Euro)
31.12.2021
31.12.2020
CA
L1
L2
L3
CA
L1
L2
L3
1. Financial assets measured
at amortised cost
10.856.795
2.232.706
-
8.740.920
9.927.163
1.239.323
-
8.745.547
2. Property, plant and
equipment held for
investment purpose
485
-
-
485
565
-
-
565
3. Non-current assets and
disposal groups
-
-
-
-
-
-
-
-
Total
10.857.280
2.232.706
-
8.741.405
9.927.728
1.239.323
-
8.746.112
1. Financial liabilities
measured at amortised cost
10.786.588
1.059.227
-
10.171.747
9.908.039
768.887
-
9.108.401
2. Liabilities associated with
assets held for sale
-
-
-
-
-
-
-
-
Total
10.786.588
1.059.227
-
10.171.747
9.908.039
768.887
-
9.108.401
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
A.5 - Disclosure on day one profit/loss
With reference to the provisions of IFRS 7 par. 28, a financial instrument must initially be recognised at a value
equal to its fair value which, unless there is evidence to the contrary, is equal to the price paid/collected in
trading. The above standard governs such cases by establishing that an entity may recognise a financial
instrument at a fair value other than the consideration given or received only if the fair value is evidenced:
• by comparison with other observable current market transactions in the same instrument;
• through valuation techniques using exclusively, as variables, data from observable markets.
In other words, the assumption under IFRS 9, whereby fair value is equal to the consideration given or received,
may be overcome only if there is objective evidence that the consideration given or received is not representative
of the actual market value of the financial instrument being traded.
Such evidence must be derived only from objective and non-refutable parameters, thus eliminating any
hypothesis of discretion on the part of the evaluator.
The difference between the fair value and the negotiated price, only when the above conditions are met, is
representative of the day one profit and is immediately recognised in the income statement.
No such transactions were carried out as part of the Group's operations during 2021.
124
Banca Ifis | 2021 Consolidated financial statements and report
4.2 Part B - Consolidated statement of financial position
ASSETS
Section 1 - Cash and cash equivalents - Item 10
1.1 Cash and cash equivalents: breakdown
31.12.2021
31.12.2020
a) Cash
69
82
b) Current accounts and on demand deposits at Central
banks
-
-
c) Current accounts and on demand deposits at banks
355.312
291.520
Total
355.381
291.602
As of 31 December 2021 this item amounts to 355,4 million Euro, and includes, in compliance with the
requirements for balance sheet items set out in the 7th October 2021 update of Bank of Italy Circular no.
262/2005, on demand receivables due from banks, which were previously reported under financial assets
measured at amortised cost (355,3 million Euro). Solely for the purpose of enabling a like-for-like comparison to
be made, the figures for the previous year have been restated on a conventional basis on the basis of these new
provisions, and therefore the related sight receivables due from banks have been transferred from the item “Due
from banks valued at amortised cost” to the item “Cash and cash equivalents” (291,5 million Euro).
Section 2 - Financial assets measured at fair value through profit or loss - Item 20
2.1 Financial assets held for trading: breakdown by type
Items/Amounts
31.12.2021
31.12.2020
L1
L2
L3
L1
L2
L3
A. Cash assets
1. Debt securities
713
-
-
-
-
-
1.1 Structured
-
-
-
-
-
-
1.2 Other debt securities
713
-
-
-
-
-
2. Equity securities
761
-
-
1.620
-
-
3. UCITS units
-
-
-
-
-
-
4. Loans
-
-
-
-
-
-
4.1 Reverse repurchase agreements
-
-
-
-
-
-
4.2 Other
-
-
-
-
-
-
Total (A)
1.474
-
-
1.620
-
-
B. Derivatives
1. Financial derivatives
-
7.004
-
-
19.250
-
1.1 held for trading
-
7.004
-
-
19.250
-
1.2 connected to the fair value option
-
-
-
-
-
-
1.3 other
-
-
-
-
-
-
2. Credit derivatives
-
-
-
-
-
-
2.1 for trading
-
-
-
-
-
-
2.2 connected to the fair value option
-
-
-
-
-
-
2.3 other
-
-
-
-
-
-
Total (B)
-
7.004
-
-
19.250
-
Total (A+B)
1.474
7.004
-
1.620
19.250
-
Banca Ifis | 2021 Consolidated financial statements and report
125
The financial assets held for trading outstanding at 31 December 2021 mainly referred to interest rate derivatives
that the merged entity, the former Interbanca S.p.A., negotiated with its Corporate clients up to 2009 to provide
them with instruments to hedge risks such as fluctuations in interest rates. In order to remove market risk, these
transactions are hedged with “back to back” trades, in which Interbanca assumed a position opposite to the one
sold to corporate clients with independent market counterparties. Alongside these financial assets, the trading
book also includes options and futures deriving from hedges and ancillary enhancements to the Group’s
proprietary investment strategy.
2.2 Financial assets held for trading: breakdown by debtor/issuer/counterparty
Items/Amounts
31.12.2021
31.12.2020
A. Cash assets
1. Debt securities
713
-
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
712
-
d) Other financial companies
1
-
of which: insurance companies
-
-
e) Non-financial companies
-
-
2. Equity securities
761
1.620
a) Banks
506
382
b) Other financial companies
-
-
of which: insurance companies
-
-
c) Non-financial companies
255
1.238
d) Other issuers
-
-
3. UCITS units
-
-
4. Loans
-
-
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
-
-
d) Other financial companies
-
-
of which: insurance companies
-
-
e) Non-financial companies
-
-
f) Households
-
-
Total (A)
1.474
1.620
B. Derivatives
a) Central Counterparties
-
-
b) Other
7.004
19.250
Total (B)
7.004
19.250
Total (A+B)
8.478
20.870
Banca Ifis | 2021 Consolidated financial statements and report
126
2.5 Other financial assets mandatorily measured at fair value: breakdown by type
Items/Amounts
31.12.2021
31.12.2020
L1
L2
L3
L1
L2
L3
1. Debt securities
-
-
15.889
-
-
3.532
1.1. Structured
-
-
-
-
-
-
1.2. Other debt securities
-
-
15.889
-
-
3.532
2. Equity securities
-
-
26.490
-
-
20.683
3. UCITS units
-
-
79.052
10.003
-
71.476
4. Loans
-
-
23.229
-
-
31.284
4.1 Reverse repurchase agreements
-
-
-
-
-
-
4.2. Others
-
-
23.229
-
-
31.284
Total
-
-
144.660
10.003
-
126.975
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Other debt securities consisted of junior, mezzanine and monotranche notes associated with securitisation
transactions.
Equity securities refer to transactions of the Equity Investment Department in minority shares of industrial
companies.
With regard to UCITs, it should be noted that during 2021 non-strategic securities of the Proprietary Finance
function were divested for approximately 10 million Euro, which were classified as Level 1 fair value.
Banca Ifis | 2021 Consolidated financial statements and report
127
2.6 Financial assets mandatorily measured at fair value: breakdown by debtor/issuer
31.12.2021
31.12.2020
1. Equity securities
26.490
20.683
of which: banks
-
-
of which: other financial companies
2.137
2.137
of which: non-financial companies
24.353
18.546
2. Debt securities
15.889
3.532
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
-
-
d) Other financial companies
15.889
3.532
of which: insurance companies
-
-
e) Non-financial companies
-
-
3. UCITS units
79.052
81.479
4. Loans
23.229
31.284
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
-
-
d) Other financial companies
2.642
2.525
of which: insurance companies
-
-
e) Non-financial companies
20.587
28.639
f) Households
-
120
Total
144.660
136.978
UCIT units include 39,9 million Euro in closed-end equity funds that invest in impaired loans and 39,2 million Euro
in closed-end equity funds investing in equity securities.
Banca Ifis | 2021 Consolidated financial statements and report
128
Section 3 - Financial assets measured at fair value through other comprehensive income -
Item 30
3.1 Financial assets measured at fair value through other comprehensive income: breakdown by type
Items/Amounts
31.12.2021
31.12.2020
L1
L2
L3
L1
L2
L3
1. Debt securities
515.278
-
-
721.216
-
-
1.1 Structured
-
-
-
-
-
-
1.2 Other debt securities
515.278
-
-
721.216
-
-
2. Equity securities
60.132
-
38.603
28.106
-
25.233
3. Loans
-
-
-
-
-
-
Total
575.410
-
38.603
749.322
-
25.233
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Level 1 “other debt securities” referred for 469,6 million to Italian government bonds.
Equity securities measured at fair value with an impact on comprehensive income amount to 98,7 million Euro
at 31 December 2021, up 85,1% on 31 December 2020, and are mainly attributable to shares in the Bank of Italy
(30,0 million Euro), interests in leading companies in the banking and insurance sector (24,0 million Euro), the
energy sector (21,5 million Euro) and telecommunications (8,5 million Euro). The increase of 45,4 million Euro is
consistent with the strategy of creating a proprietary portfolio that guarantees stable dividends.
Level 3 securities mainly include the specified shares of the Bank of Italy as well as minority interests deriving
from the acquisition of the former Interbanca Group.
Banca Ifis | 2021 Consolidated financial statements and report
129
3.2 Financial assets measured at fair value through other comprehensive income: breakdown by
debtor/issuer
Items/Amounts
31.12.2021
31.12.2020
1. Debt securities
515.278
721.216
a) Central Banks
-
-
b) Public Administrations
469.647
708.641
c) Banks
8.585
-
d) Other financial companies
10.889
10.480
of which: insurance companies
-
-
e) Non-financial companies
26.157
2.095
2. Equity securities
98.735
53.339
a) Banks
40.673
18.602
b) Other issuers:
58.062
34.737
- other financial companies
10.795
5.961
of which: insurance companies
10.470
4.093
- non-financial companies
47.267
28.776
- other
-
-
3. Loans
-
-
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
-
-
d) Other financial companies
-
-
of which: insurance companies
-
-
e) Non-financial companies
-
-
f) Households
-
-
Total
614.013
774.555
3.3 Financial assets measured at fair value through other comprehensive income: gross amount and
overall impairment losses/reversals
Gross amount
Overall impairment losses/reversals
Overall
partial
write-
offs
(1)
Stage 1
of which:
Low credit
risk
instrumen
ts
Stage 2
Stage
3
Purchased
or
originated
impaired
Stage
1
Stage 2
Stage
3
Purchased
or
originated
impaired
Debt
securities
515.529
515.529
-
-
-
(251)
-
-
-
-
Loans
-
-
-
-
-
-
-
-
-
-
Total
31.12.2021
515.529
515.529
-
-
-
(251)
-
-
-
-
Total
31.12.2020
721.434
721.434
-
-
-
(218)
-
-
-
-
(1) Amount to be reported for disclosure purposes.
130
Banca Ifis | 2021 Consolidated financial statements and report
Section 4 - Financial assets measured at amortised cost - Item 40
4.1 Financial assets measured at amortised cost: breakdown of receivables due from banks by type
Type of transaction/Amounts
31.12.2021
31.12.2020
Carrying amount
Fair value
Carrying amount
Fair value
Stage 1
and 2
Stage 3
Purchased
or
originated
impaired
L1
L2
L3
Stage 1
and 2
Stage 3
Purchased
or
originated
impaired
L1
L2
L3
A. Receivables due from
Central banks
351.145
-
-
-
-
348.802
693.829
-
-
-
-
690.025
1. Term deposits
-
-
-
X
X
X
-
-
-
X
X
X
2. Legal reserve
29.367
-
-
X
X
X
30.057
-
-
X
X
X
3. Reverse repurchase
agreements
-
-
-
X
X
X
-
-
-
X
X
X
4. Others
321.778
-
-
X
X
X
663.772
-
-
X
X
X
B. Receivables due from banks
173.846
-
-
140.477
-
35.667
97.932
-
-
58.785
-
41.199
1. Loans
33.415
-
-
-
-
33.415
41.199
-
-
-
-
41.199
1.1. Current accounts
-
-
-
X
X
X
511
-
-
X
X
X
1.2. Term deposits
26.665
-
-
X
X
X
37.761
-
-
X
X
X
1.3 Other loans:
6.750
-
-
X
X
X
2.927
-
-
X
X
X
- Reverse repurchase
agreements
-
-
-
X
X
X
-
-
-
X
X
X
- Financing for leasing
364
-
-
X
X
X
781
-
-
X
X
X
- Other
6.386
-
-
X
X
X
2.146
-
-
X
X
X
2. Debt securities
140.431
-
-
140.477
-
2.252
56.733
-
-
58.785
-
-
2.1 Structured
9.428
-
-
7.310
-
2.252
7.116
-
-
7.116
-
-
2.2 Other debt securities
131.003
-
-
133.167
-
-
49.617
-
-
51.669
-
-
Total
524.991
-
-
140.477
-
384.469
791.761
-
-
58.785
-
731.224
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
131
Banca Ifis | 2021 Consolidated financial statements and report
4.2 Financial assets measured at amortised cost: breakdown of receivables due from customers by type
Type of transaction/Amounts
31.12.2021
31.12.2020
Carrying amount
Fair value
Carrying amount
Fair value
Stage 1
and 2
Stage 3
Purchase
d or
originated
impaired
L1
L2
L3
Stage 1
and 2
Stage 3
Purchase
d or
originated
impaired
L1
L2
L3
1. Loans
6.541.117
250.697
1.536.960
-
-
5.922.874
6.226.620
177.287
1.465.565
-
-
7.811.765
1. Current accounts
58.211
17.903
190.926
X
X
X
60.631
29.335
198.236
X
X
X
2. Reverse repurchase agreements
-
-
-
X
X
X
-
-
1
X
X
X
3. Loans/mortgages
2.188.700
62.608
156.781
X
X
X
1.935.910
37.647
159.479
X
X
X
4. Credit cards, personal loans and
salary-backed loans
30.980
2.333
674.979
X
X
X
31.588
1.526
683.260
X
X
X
5. Financing for leasing
1.205.257
16.346
516
X
X
X
1.219.185
10.417
499
X
X
X
6. Factoring
2.459.510
143.713
1.334
X
X
X
2.306.216
75.823
1.033
X
X
X
7. Other loans
598.459
7.794
512.424
X
X
X
673.090
22.539
423.057
X
X
X
2. Debt securities
2.003.030
-
-
1.823.274
-
200.867
1.265.929
1
-
1.180.538
-
324.178
2.1. Structured
8.968
-
-
8.329
-
596
795
-
-
-
-
795
2.2. Other debt securities
1.994.062
-
-
1.814.945
-
200.271
1.265.134
1
-
1.180.538
-
323.383
Total
8.544.147
250.697
1.536.960
1.823.274
-
6.123.741
7.492.549
177.288
1.465.565
1.180.538
-
8.135.943
Banca Ifis | 2021 Consolidated financial statements and report
132
Acquired non-performing exposures mainly refer to the distressed retail loans of the Npl Segment and the non-
performing assets that arose from the business combination with the GE Capital Interbanca Group at the
acquisition date.
Finally, at 31 December 2021, other debt securities include 1.648,6 million Euro in government securities
acquired by Banca Ifis with a view to optimising Group liquidity. Level 3 securities mainly include investments in
securitisations and minibonds.
4.3 Financial assets measured at amortised cost: breakdown of receivables due from customers by
debtor/issuer
Type of
transaction/Amounts
31.12.2021
31.12.2020
Stage 1 and 2
Stage 3
Purchased or
originated
impaired
Stage 1 and 2
Stage 3
Purchased or
originated
impaired
1. Debt securities
2.003.030
-
-
1.265.929
1
-
a) Public Administrations
1.675.663
-
-
1.099.347
-
-
b) Other financial
companies
248.510
-
-
138.649
-
-
of which: insurance
companies
-
-
-
-
-
-
c) Non-financial companies
78.857
-
-
27.933
1
-
2. Loans to:
6.541.117
250.697
1.536.960
6.226.620
177.287
1.465.565
a) Public Administrations
614.690
77.345
625
633.162
14.335
5
b) Other financial
companies
136.389
7.874
1.526
173.948
3.697
6.241
of which: insurance
companies
377
-
-
315
11
-
c) Non-financial companies
5.080.049
142.237
194.066
4.718.820
140.910
212.731
d) Households
709.989
23.241
1.340.743
700.689
18.346
1.246.588
Total
8.544.147
250.697
1.536.960
7.492.549
177.288
1.465.565
Banca Ifis | 2021 Consolidated financial statements and report
133
4.4 Financial assets measured at amortised cost: gross amount and overall impairment losses/reversals
Gross amount
Overall impairment losses/reversals
Overall partial
write-offs
(1)
Stage 1
of which: Low
credit risk
instruments
Stage 2
Stage 3
Purchased or
originated
impaired
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
Debt securities
2.145.562
2.145.562
-
-
-
(2.101)
-
-
-
-
Loans
6.462.959
690.025
538.577
446.384
1.536.960
(60.025)
(18.184)
(193.337)
-
(56.639)
Total 31.12.2021
8.608.521
2.835.587
538.577
446.384
1.536.960
(62.126)
(18.184)
(193.337)
-
(56.639)
Total 31.12.2020
7.888.142
1.929.685
396.168
177.288
1.465.565
(64.683)
(5.655)
(239.285)
-
(42.511)
(1) Amount to be reported for disclosure purposes
4.4a Loans measured at amortised cost concerned by COVID-19 support measures: gross value and overall impairment losses/reversals
The table below gives details of the gross value and overall impairment losses/reversals broken down by risk stages for loans concerned by “moratoriums” or other
COVID-19 concessions, or which constitute new liquidity granted by means of public guarantee mechanisms.
Gross amount
Overall impairment losses/reversals
Overall
partial write-
offs
Stage 1
of which:
Instruments
with low credit
risk
Stage 2
Stage 3
Purchased or
originated
impaired
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
1. Loans concerned by concessions
in compliance with the GLs
88.389
-
1.742
254
-
(517)
(114)
-
-
-
2. Loans subject to outstanding
moratorium measures no longer in
compliance with GLs and not
evaluated as granted
84.551
-
10.447
3.383
1.727
(518)
(211)
(951)
-
-
3. Loans concerned by other
concessions
-
-
-
-
-
-
-
-
-
-
4. New loans
431.816
-
29.174
2.139
8.720
(745)
(306)
(335)
-
-
Total 31.12.2021
604.756
-
41.363
5.776
10.447
(1.780)
(631)
(1.286)
-
-
Total 31.12.2020
831.863
-
38.795
3.312
8.634
(9.249)
(958)
(5.000)
-
n.a.
134
Banca Ifis | 2021 Consolidated financial statements and report
Section 9 - Property, plant and equipment - Item 90
9.1 Property, plant and equipment for functional use: breakdown of assets measured at cost
Assets/Amounts
31.12.2021
31.12.2020
1. Owned
103.487
97.173
a) Land
20.297
20.297
b) Buildings
68.414
65.883
c) Furniture
3.145
1.703
d) Electronic equipment
3.656
4.085
e) Other
7.975
5.205
2. Rights of use acquired through leases
16.284
17.411
a) Land
-
-
b) Buildings
14.696
15.300
c) Furniture
-
-
d) Electronic equipment
312
506
e) Other
1.276
1.605
Total
119.771
114.584
of which: obtained by enforcing collateral
-
-
Property, plant and equipment for functional use came to 119,8 million Euro as compared with the 114,6 million
Euro at 31 December 2020, slightly up mainly due to the inclusion of Farbanca S.p.A. in the Group and certain
investments made in improvements in Group offices.
At the end of the year, the properties recognised under property, plant and equipment included the important
historical building “Villa Marocco”, located in Mestre – Venice and housing Banca Ifis's registered office. Since
Villa Marocco is a luxury property, it is not depreciated, but it is tested for impairment at least annually. To this
end, it is appraised by experts specialising in luxury properties. The impairment test did not reveal any
impairment losses to be recognised in profit or loss.
Banca Ifis | 2021 Consolidated financial statements and report
135
9.2 Property, plant and equipment held for investment purpose: breakdown of assets measured at cost
Assets/Amounts
31.12.2021
31.12.2020
Carrying
amount
Fair value
Carrying
amount
Fair value
L1
L2
L3
L1
L2
L3
1. Owned
485
-
-
485
565
-
-
565
a) Land
-
-
-
-
-
-
-
-
b) Buildings
485
-
-
485
565
-
-
565
2. Rights of use acquired through
leases
-
-
-
-
-
-
-
-
a) Land
-
-
-
-
-
-
-
-
b) Buildings
-
-
-
-
-
-
-
-
Total
485
-
-
485
565
-
-
565
of which: obtained by enforcing
collateral
-
-
-
-
-
-
-
-
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
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9.6 Property, plant and equipment for functional use: annual changes
Land
Buildings
Furnishing
s
Electronic
equipment
Other
Total
31.12.2021
A. Gross opening balance
20.297
137.185
3.256
9.264
13.727
183.729
A.1 Total net amortisation and
impairment losses
-
(56.004)
(1.552)
(4.671)
(6.918)
(69.145)
A.2 Net opening balance
20.297
81.181
1.704
4.593
6.809
114.584
B. Increases
-
16.496
3.921
2.059
4.935
27.411
B.1 Purchases
-
16.061
2.188
1.698
4.220
24.167
of which from business combinations
-
925
103
173
189
1.390
B.2 Capitalised improvement expenses
-
-
-
-
-
-
B.3 Reversals of impairment losses
-
-
-
-
-
-
B.4 Fair value gains taken to:
-
-
-
-
-
-
a) equity
-
-
-
-
-
-
b) profit or loss
-
-
-
-
-
-
B.5 Exchange gains
-
-
-
-
-
-
B.6 Transfers from investment property
-
-
X
X
X
-
B.7 Other changes
-
435
1.733
361
715
3.244
C. Decreases
-
(14.567)
(2.480)
(2.684)
(2.493)
(22.224)
C.1 Sales
-
(1.157)
(36)
(42)
(123)
(1.358)
C.2 Depreciation
-
(5.251)
(725)
(2.429)
(1.883)
(10.288)
C.3 Impairment losses taken to:
-
-
-
-
-
-
a) equity
-
-
-
-
-
-
b) profit or loss
-
-
-
-
-
-
C.4 Fair value losses taken to:
-
-
-
-
-
-
a) equity
-
-
-
-
-
-
b) profit or loss
-
-
-
-
-
-
C.5 Exchange losses
-
-
-
-
-
-
C.6 Transfers to:
-
(559)
-
-
-
(559)
a) Investment property
-
(559)
X
X
X
(559)
b) Non-current assets and disposal
groups
-
-
-
-
-
-
C.7 Other changes
-
(7.600)
(1.719)
(213)
(487)
(10.019)
D. Net closing balance
20.297
83.110
3.145
3.968
9.251
119.771
D.1 Total net amortisation and
impairment losses
-
(61.255)
(2.277)
(7.100)
(8.801)
(79.433)
D.2 Gross closing balance
20.297
144.365
5.422
11.068
18.052
199.204
E. Measurement at cost
-
-
-
-
-
-
Property, plant and equipment for functional use are measured at cost and are depreciated on a straight-line
basis over their useful life, with the exclusion of land with an indefinite useful life and the “Villa Marocco”
property, whose residual value at the end of its useful life is expected to be higher than its book value.
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Property, plant and equipment not yet brought into use at the reporting date are not depreciated.
9.7 Property, plant and equipment held for investment purpose: annual changes
31.12.2021
Land
Buildings
A. Opening balance
-
565
B. Increases
-
559
B.1 Purchases
-
-
B.2 Capitalised improvement expenses
-
-
B.3 Fair value gains
-
-
B.4 Reversals of impairment losses
-
-
B.5 Exchange gains
-
-
B.6 Transfers from property for functional use
-
559
B.7 Other changes
-
-
C. Decreases
-
(639)
C.1 Sales
-
(559)
C.2 Depreciation
-
-
C.3 Fair value losses
-
(80)
C.4 Impairment losses
-
-
C.5 Exchange losses
-
-
C.6 Transfers to:
-
-
a) property for functional use
-
-
b) Non-current assets and disposal groups
-
-
C.7 Other changes
-
-
D. Closing balance
-
485
E. Measurement at fair value
-
485
Buildings held for investment purposes are measured at cost and refer to leased property. They are not
depreciated as they are destined for sale.
9.9 Commitments to purchase property, plant and equipment
There were no commitments to purchase property, plant and equipment.
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Section 10 - Intangible assets - Item 100
10.1 Intangible assets: breakdown by asset type
Assets/Amounts
31.12.2021
31.12.2020
Finite life
Indefinite life
Finite life
Indefinite life
A.1 Goodwill
X
38.794
X
38.798
A.1.1 attributable to the Group
X
38.794
X
38.798
A.1.2 attributable to non-controlling interests
X
-
X
-
A.2 Other intangible assets
22.813
-
22.172
-
of which: software
22.813
-
22.172
-
A.2.1 Assets measured at cost:
22.813
-
22.172
-
a) Internally generated intangible assets
-
-
-
-
b) Other assets
22.813
-
22.172
-
A.2.2 Assets measured at fair value:
-
-
-
-
a) Internally generated intangible assets
-
-
-
-
b) Other assets
-
-
-
-
Total
22.813
38.794
22.172
38.798
Goodwill totalled 38,8 million Euro, with 774 thousand Euro arising from the line-by-line consolidation of the
Polish subsidiary Ifis Finance Sp. z o.o. and 38,0 million Euro from the former Fbs Group, acquired in 2019.
Other intangible assets at 31 December 2021 refer exclusively to software purchase and development, amortised
on a straight-line basis over the estimated useful life, which is five years from deployment.
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10.2 Intangible assets: annual changes
Goodwill
Other intangible
assets:
internally generated
Other intangible assets:
other
Total
FIN
INDEF
FIN
INDEF
A. Opening balance
38.798
-
-
22.172
-
60.970
A.1 Total net amortisation and
impairment losses
-
-
-
-
-
-
A.2 Net opening balance
38.798
-
-
22.172
-
60.970
B. Increases
-
-
-
9.276
-
9.276
B.1 Purchases
-
-
-
9.154
-
9.154
B.2 Increases in internally generated
intangible assets
X
-
-
-
-
-
B.3 Reversals of impairment losses
X
-
-
-
-
-
B.4 Fair value gains
-
-
-
-
-
-
- to equity
X
-
-
-
-
-
- to profit or loss
X
-
-
-
-
-
B.5 Exchange gains
-
-
-
-
-
-
B.6 Other changes
-
-
-
122
-
122
C. Decreases
(4)
-
-
(8.635)
-
(8.639)
C.1 Sales
-
-
-
-
-
-
C.2 Impairment losses/reversals
-
-
-
(8.417)
-
(8.417)
- Amortisation
X
-
-
(8.417)
-
(8.417)
- Impairment losses:
-
-
-
-
-
-
+ equity
X
-
-
-
-
-
+ profit or loss
-
-
-
-
-
-
C.3 Fair value losses:
-
-
-
-
-
-
- to equity
X
-
-
-
-
-
- to profit or loss
X
-
-
-
-
-
C.4 Transfer to non-current assets
under disposal
-
-
-
-
-
-
C.5 Exchange losses
(4)
-
-
-
-
(4)
C.6 Other changes
-
-
-
(218)
-
(218)
D. Net closing balance
38.794
-
-
22.813
-
61.607
D.1 Total net amortisation,
impairment losses and reversals of
impairment losses
-
-
-
-
-
-
E. Gross closing balance
38.794
-
-
22.813
-
61.607
F. Measurement at cost
-
-
-
-
-
-
Key:
FIN: finite useful life
INDEF: indefinite useful life
Purchases refer mainly to investments for the enhancement of IT systems.
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10.3 Other information
Information about goodwill
The application of accounting standard IFRS 3 in booking acquisitions may entail the entry of new intangible
assets and the recording of goodwill.
In the case of the Banca Ifis Group, the acquisitions made in previous years (of Ifis Finance Sp. z o. o. and the
former Fbs Group) led to the recognition of goodwill totalling 38,8 million Euro as at 31 December 2020.
On the other hand, with reference to the acquisition of the business unit of the former Aigis Banca carried out in
2021, this entailed the recognition of a gain on bargain purchase in the Income Statement, thus not generating
any goodwill. For more details on this transaction, see part G of these Notes.
The value of goodwill at 31 December 2021 was 38,8 million Euro, substantially unchanged from the figure at 31
December 2020. The prospectus below summarises the period dynamics, with goodwill values detailed by CGU
(which represent the aggregations of assets at which level impairment testing must be performed on goodwill,
to verify the recoverable value).
GOODWILL: YEAR CHANGES
(in thousands of Euro)
Goodwill at
31.12.2020
Exchange rates
update
Write-downs
Goodwill at
31.12.2021
Goodwill for the former Fbs Group (“Npl Segment” CGU)
38.020
-
-
38.020
Goodwill for Ifis Finance Sp. z o. o.
(“Commercial & Corporate Banking Segment” CGU)
778
(4)
-
774
Total goodwill
38.798
(4)
-
38.794
In accordance with IAS 36, goodwill must be impairment tested annually, to check that the value can be
recovered. The recoverable value is the greater of Value in Use and fair value, net of the costs of sale.
Finally, please note that IAS 36, in order to determine the Value in Use of the intangibles subject to impairment
testing, rules that reference must be made to the cash flows relative to the intangible in its current condition (at
the date of impairment testing), without drawing any distinction between the cash flows referring to the asset
originally noted during application of IFRS 3 and those relative to the assets in place at the time of impairment
testing; this insofar as it would be difficult, particularly in the case of extraordinary transactions between
businesses or changes to the asset following significant turnover of assets, customers, contracts, etc., to
distinguish between the flows referring to the original asset and others.
This concept can also be replicated for the determination, for the impairment testing of goodwill, of the Value in
Use of the CGU, whose cash flows must be considered with reference to all assets and liabilities included in the
CGU and not only for the assets and liabilities in regard to which goodwill was noted during application of IFRS
3.
Also, please note that the methods and assumptions underlying the goodwill impairment testing procedure and
the related results defined by the management, were approved by the Board of Directors before approval of the
draft 2021 financial statements.
Impairment testing of the CGUs and goodwill
The definition of Cash Generating Units (CGUs)
The estimate of the Value in Use, in order to perform impairment testing, in accordance with IAS 36 of intangible
assets with undefined life (including goodwill), which do not generate cash flow except jointly with other
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141
corporate assets, requires the preliminary attribution of such intangible assets to organisational units of
relatively autonomous management, able to generate flows of financial resources that are largely independent
of those produced by other business areas, but inter-dependent within the organisational unit that generates
them. These organisational units are called “Cash Generating Units” (or “CGUs”).
The text of IAS 36 reveals the need to correlate the level at which goodwill is tested with the level of internal
reporting at which the management controls the growth and reductions of said value. In these terms, the
definition of said level is closely linked to the organisational models and the attribution of the management
responsibilities in order to define operative guidelines and consequent monitoring. The organisational models
can be regardless (and indeed in the case of the Banca Ifis Group are regardless) of the structure of the legal
entities through which operations take place and, very often, are closely linked to the definition of the business
operating segments that underlie the Segment reporting envisaged by IFRS 8. These considerations with
reference to the criteria employed to determine the CGUs for impairment testing the goodwill are, moreover,
consistent with the definition of the recoverable value of an asset - the determination of which underlies the
impairment testing - according to which the amount is relevant that the company expects to recover from said
asset, considering synergies with other assets.
Therefore, consistently with the logics of price formation that gave rise to the booking of goodwill, the
recoverable value for the purpose of the impairment testing of the CGU to which goodwill is allocated, must
include the valuation of not only external (or universal) synergies, but also internal synergies, which the specific
buyer can obtain from the integration of the assets acquired in its economic combinations, evidently according
to the defined business management models.
In view of the foregoing and in line with the Group Policy, the CGUs have been identified with the operating
segments as defined in the information accompanying the consolidated financial statements (Commercial &
Corporate Banking Segment and Npl Segment).
Considering that the goodwill connected with the purchase of the equity investment in Ifis Finance Sp. z o.o. is
significant in regard to the whole of the Commercial & Corporate Banking Segment, in practical implementation,
the choice has been made to perform impairment testing at the level of the individual companies.
The carrying amount of the CGUs
The carrying amount of the CGUs must be determined consistently with the criterion whereby their recoverable
value was estimated. For a bank, it is not possible to identify the flows generated by a CGU without considering
the flows deriving from financial assets/liabilities, given that the latter represent its core business. In other
words, the recoverable value of the CGU is impacted by said flows and, accordingly, their carrying amount must
be determined consistently with the scope of estimate of the recoverable value and must, therefore, also include
the financial assets/liabilities.
Taking this approach, the carrying amount of the CGU of the Banca Ifis Group can be determined in terms of
contribution towards the consolidated equity, including any part pertaining to minorities. In any case, under the
scope of the combinations performed by Banca Ifis, resulting in the recording of goodwill, there is no share of
goodwill pertaining to minorities, because they are all transactions resulting in 100% control.
Therefore, the carrying amount of the CGUs comprising companies belonging to a single Segment has been
determined through the sum of the individual equity contributions on a consolidated level.
The table below gives the carrying amounts of the CGUs and the portions of goodwill allocated to each before
being subjected to annual impairment testing.
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142
CARRYING AMOUNTS AND GOODWILL ALLOCATED
(in thousands of Euro)
Amounts at 31.12.2021 (pre-impairment testing)
Carrying amount
of which Group
share of goodwill
of which goodwill
pertaining to
minorities
Npl Segment
534.214
38.020
-
Ifis Finance Sp. z o. o.
37.600
774
-
Total
571.814
38.794
-
Criteria for estimating the Value in Use of the CGUs
The Value in Use (or “VIU”) is the current value of estimated future cash flows deriving from the continuous use
of the assets and its disposal at the end of its useful life.
Cash flows comprise cash flows from the business in its current condition and cash flows deriving from budget
forecasts, short-term forecasts and terminal value, adjusted for the company’s specific risks.
More specifically, IAS 36 requires cash flow forecasts based on reasonable, sustainable assumptions that are
specific for CGUs, which reflect the value of the CGU in its current condition and represent the best estimate
management can make in regard to all existing economic circumstances during the rest of the useful life of the
CGU.
For the purpose of impairment testing, reference is made to the value in use estimated according to the valuation
approach that can be identified with the method known in doctrine as “discounted cash flow - DCF”. The method
estimates the value in use of an asset by discounting the forecast cash flows, determined according to
economic-financial forecasts prepared by the management in respect of the asset valued.
In the case of banks and financial institutions in general, the available cash flow is understood as the
distributable cash flow, taking into account the equity restrictions imposed by the Supervisory Authorities or
held to be appropriate to monitor the risk typical of the asset analysed. As concerns the determination of the
value in use of the CGU in question, the choice was made to apply the Excess Capital variant of the Dividend
Discount Model (“DDM”) valuation method. The method in question is one of the methods based on prospective
cash flow, in this case represented by future dividends, recognised by most doctrine and standard practice,
above all with reference to the companies or business units subject to compliance with the minimum regulatory
capital requirements.
This method makes it possible to consider the current equity of the companies/business units valued, with
respect to the supervisory requirements and their income prospects reflected in the forecasts. The flow of the
last year of the analytical forecast is forecast perpetually through an appropriate long-term growth rate (“g”), in
order to estimate the terminal value.
Future cash flows must be discounted at a rate that reflects the current valuations of the time value of money
and specific risks of the business. More specifically, the discounting rates to be used must incorporate current
market values with reference to the risk-free component and risk premium correlated with the share component
observed over a sufficiently extensive time frame to reflect market conditions and different economic cycles,
and using an appropriate beta coefficient in consideration of the risk levels of the respective operating areas.
Cash flow forecasts
Forecast cash flow is understood as the distributable cash flow, taking into account the equity restrictions
imposed by the Supervisory Authorities or held to be appropriate to monitor the risk typical of the asset analysed.
Therefore, future cash flows can be identified as the flows that may potentially be distributed after having
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143
satisfied the minimum allocated capital restrictions. In the forecasts of available cash flows, consideration was
given to maintaining a level of CET1 in line with the supervisory provisions, of 8,12% (minimum value envisaged
by the last SREP received and relative to the Banca Ifis Group). The consolidated SREP limit is considered insofar
as higher thresholds are imposed internally in respect of a control context, envisaging alert and warning
thresholds. The consolidated limit is respected as required by the Supervisory Body. Implicitly, this limit sets
limits that exceed the regulatory minimums for the subsidiaries. The internal audits, with higher thresholds in
RAF, prudently avoid any overrun.
Determination of the recoverable amount is hinged on the discounting of forecast cash flow and relates to the
2021-2024 economic and equity forecasts, consistently with the projects of the 2022-2024 Business Plan for the
CGUs in question (Npl Segment, Ifis Finance Sp. z o.o.), as approved by the Parent company’s Board of Directors
on 13 January 2022.
Under the scope of the financial matrix measurement criteria, as is that used to estimate the Value in Use, the
value of a business at the end of the analytical flow forecasting period (the “Terminal Value”) is generally
determined by capitalising infinitely at an appropriate “g” rate, the cash flow that can be achieved when “fully up
and running”.
Flow discounting rates
The Value in Use is estimated by discounting cash flows at a rate that considers the current market rates
referring to both the time value component and the country risk component, as well as specific risks of the assets
considered.
The discounting rate has been determined using the “Capital Asset Pricing Model” (CAPM). On the basis of this
model, the discounting rate is determined as the sum of the returns on risk-free investments and a risk premium,
in turn dependent on the specific risk level of the asset (thereby meaning both the risk level of the operating
segment and the geographic risk level represented by the “country risk”).
If we take a more detailed look at the various components that go towards determining the discounting rate, we
note that:
• with reference to the risk-free component and the risk premium, consideration was given to the currently,
very low values with reference to the general interest rate context. Indeed, although the interest rates
are not expected to rise significantly (at least in the short/medium-term), it is in any case appropriate to
give some thought to assessing whether or not the current situation can reasonably be expected to last
for beyond the “explicit period” of cash flow forecasting, for impairment test measurements. Indeed, it
is common knowledge that a significant component of the calculation of the CGU value consists of its
Terminal Value, calculated as the perpetual incoming cash flow that can be achieved when “fully up and
running”; in this sense, reflections should focus on the analysis of the current macroeconomic context,
to verify if the current level of interest rates may be representative of an ordinary situation and, therefore,
can be incorporated into the flow discount rate implicit in the Terminal Value, in long-term calculations,
as those required for an impairment testing process. On the basis of the situation described above,
considering the mentioned long-term prospects that must guide the impairment testing, for the 2021
financial statements, we have chosen to use:
– as risk free rate for the CGU Npl Segment, the spot gross return value of the Italian ten-year BTP,
recorded on 31 December 2021, while for the CGU Ifis Finance Sp. Z o. o., the spot gross return
figure of the Polish ten-year government bond, recorded at that same date;
Banca Ifis | 2021 Consolidated financial statements and report
144
– as risk premium, the average market return, determined on the basis of the long-term spread in
the return of equities and bonds, relative to the Italian and Polish markets;
• the beta coefficient, which measures the specific risk level of the individual company or operating
segment, has been determined as follows:
– for the CGU Npl Segment, the average was used, recorded over a 2-year discovery period and on
a weekly basis, of the betas relative to a sample of comparable listed companies;
– for the CGU Ifis Finance Sp. z o. o., the beta of Banca Ifis was adopted, determined on the basis
of 2-year weekly observations.
Results of the impairment testing
The results of the impairment testing revealed that at 31 December 2021, the Values in Use of the CGUs Npl
Segment and Finance Sp. z o.o. exceeded their respective carrying amounts. There was therefore no need to
impair the impairment-tested goodwill booked.
Sensitivity analyses
As the Value in Use is determined by using estimates and assumptions that may include elements of uncertainty,
as required by the IAS/IFRS standards, sensitivity analyses have been performed to verify the sensitivity of the
results obtained to changes in certain underlying parameters and hypotheses.
More specifically, for CGUs with residual goodwill values, the impact was verified on the Value in Use of a change
in the “g” growth rate of +/-1% and a delta of the Ke of +/-1%.
None of the CGUs tested revealed any impairment in the cases analysed.
Section 11 - Tax assets and liabilities - Item 110 of assets and Item 60 of liabilities
11.1 Deferred tax assets: breakdown
The main types of deferred tax assets are set out below.
Deferred tax assets
31.12.2021
31.12.2020
A. Gross deferred tax assets
284.126
307.176
A1. Receivables (including securitisations)
206.823
221.395
A2. Other financial instruments
2.993
714
A3. Goodwill
12.573
12.573
A4. Expenses spanning several years
-
-
A5. Property, plant and equipment
3.705
2.762
A6. Provisions for risks and charges
15.195
15.538
A7. Entertainment expenses
-
-
A8. Personnel-related expenses
135
2
A9. Tax losses
39.394
51.051
A10. Unused tax credits to be deducted
-
-
A11. Other
3.308
3.141
B. Set-off with deferred tax liabilities
-
-
C. Net deferred tax assets
284.126
307.176
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145
Deferred tax assets amounted to 284,1 million Euro, compared with 307,2 million Euro at 31 December 2020, of
which 39,4 million Euro for previous tax losses and ACE benefits (51,1 million Euro at 31 December 2020). The
Group has benefited from Art. 55, Italian Decree Law no. 18/2020 (the “Cura Italia” Decree), proceeding to transfer
the deferred tax assets on previous tax losses and ACE benefit into tax credits for 28,4 million Euro.
Tax losses carried forward and with ACE benefits realised by the subsidiaries Cap.Ital.Fin. and Ifis Real Estate
before entering the tax consolidation scheme, totalling 2,3 million Euro, have not been recorded in the financial
statements.
At present, no risks are seen on the potential failure to recover prepaid tax entered in the medium/long-term.
11.2 Deferred tax liabilities: breakdown
The main types of deferred tax liabilities are shown below.
Deferred tax liabilities
31.12.2021
31.12.2020
A. Gross deferred tax liabilities
32.455
36.136
A1. Capital gains to be spread over multiple periods
-
-
A2. Goodwill
-
-
A3. Property, plant and equipment
345
536
A4. Financial instruments
381
1.022
A5. Personnel-related expenses
12
-
A6. Other
31.717
34.578
B. Set-off with deferred tax assets
-
-
C. Net deferred tax liabilities
32.455
36.136
Deferred tax liabilities, totalling 32,5 million Euro, largely included 28,8 million Euro in receivables for interest on
arrears that will be taxed upon receipt, 0,3 million Euro in the revaluation of property, and 2,8 million Euro in other
mismatches of trade receivables and 0,4 million Euro relative to financial assets measured at fair value (FVOCI).
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146
11.3 Changes in deferred tax assets (recognised through profit or loss)
31.12.2021
31.12.2020
1. Opening balance
306.206
333.041
2. Increases
29.377
21.734
2.1 Deferred tax assets recognised in the year
28.863
19.136
a) relative to previous years
370
892
b) due to change in accounting standards
-
-
c) reversals of impairment losses
-
-
d) other
28.493
18.244
2.2 New taxes or increases in tax rates
-
-
2.3 Other increases
514
2.598
- of which from business combinations
-
2.598
3. Decreases
54.690
48.569
3.1 Deferred tax assets reversed during the year
49.624
20.108
a) reversals
38.413
17.517
b) impairment losses due to unrecoverability
2.221
51
c) change in accounting standards
-
-
d) other
8.990
2.540
3.2 Reductions in tax rates
-
-
3.3 Other decreases
5.066
28.461
a) conversion into tax credits as per Italian Law no. 214/2011
13
28.461
b) other
5.053
-
4. Closing balance
280.893
306.206
Concerning the changes in deferred tax assets (recognised through profit or losses), please note that:
• decreases included the prepaid tax transformed following the benefit granted by Art. 55 of Italian Decree
Law no. 18/2020 for 4,4 million Euro;
• the deferred tax assets related to the taxable profit for the year were not included, as they were
recognised under other assets and other liabilities as a receivable and payable due from and to the
parent/consolidating company La Scogliera under current tax consolidation arrangements.
Banca Ifis | 2021 Consolidated financial statements and report
147
11.4 Changes in deferred tax assets as per Italian Law no. 214/2011
31.12.2021
31.12.2020
1. Opening balance
219.173
218.430
2. Increases
566
2.155
3. Decreases
14.387
1.412
3.1 Reversals
14.009
1.412
3.2 Conversion in tax credits
13
-
a) deriving from losses for the year
13
-
b) deriving from tax losses
-
-
3.3 Other decreases
365
-
4. Closing balance
205.352
219.173
11.5 Changes in deferred tax assets (recognised through profit or loss)
31.12.2021
31.12.2020
1. Opening balance
35.111
39.263
2. Increases
2.569
4.943
2.1 Deferred tax assets recognised in the year
2.384
4.943
a) relative to previous years
-
7
b) due to change in accounting standards
-
-
c) other
2.384
4.936
2.2 New taxes or increases in tax rates
-
-
2.3 Other increases
185
-
3. Decreases
5.538
9.095
3.1 Deferred tax liabilities reversed during the year
5.538
9.011
a) reversals
5.538
9.011
b) due to change in accounting standards
-
-
c) other
-
-
3.2 Reductions in tax rates
-
-
3.3 Other decreases
-
84
4. Closing balance
32.142
35.111
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148
11.6 Changes in deferred tax assets (recognised through equity)
31.12.2021
31.12.2020
1. Opening balance
970
1.275
2. Increases
2.627
1.214
2.1 Deferred tax assets recognised in the year
2.554
-
a) relative to previous years
-
-
b) due to change in accounting standards
-
-
c) other
2.554
-
2.2 New taxes or increases in tax rates
-
-
2.3 Other increases
73
1.214
3. Decreases
364
1.519
3.1 Deferred tax assets reversed during the year
364
1.519
a) reversals
190
-
b) impairment losses due to unrecoverability
-
-
c) due to change in accounting standards
-
-
d) other
174
1.519
3.2 Reductions in tax rates
-
-
3.3 Other decreases
-
-
4. Closing balance
3.233
970
The change was strictly related to the tax impact of the negative change in the fair value reserve for financial
assets measured at fair value through other comprehensive income.
11.7 Changes in deferred tax liabilities (recognised through equity)
31.12.2021
31.12.2020
1. Opening balance
1.025
1.507
2. Increases
1.617
439
2.1 Deferred tax assets recognised in the year
1.617
439
a) relative to previous years
-
-
b) due to change in accounting standards
-
-
c) other
1.617
439
2.2 New taxes or increases in tax rates
-
-
2.3 Other increases
-
-
3. Decreases
2.329
921
3.1 Deferred tax liabilities reversed during the year
2.329
921
a) reversals
2.329
-
b) due to change in accounting standards
-
-
c) other
-
921
3.2 Reductions in tax rates
-
-
3.3 Other decreases
-
-
4. Closing balance
313
1.025
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149
Section 13 - Other assets - Item 130
13.1 Other assets: breakdown
31.12.2021
31.12.2020
Tax receivables
310.871
17.168
Accrued income and deferred expenses
41.199
35.022
Guarantee deposits
2.042
1.152
Debtors for invoices
32.262
57.953
Sundry receivables
53.074
165.010
Miscellaneous provisional items
14.312
19.229
Portfolio of effects subject to collection
33.267
21.944
Total
487.027
317.478
Other sundry items include 22,9 million Euro in credits due to the parent company La Scogliera under the tax
consolidation agreements (83,3 million Euro at 31 December 2020). The significant decrease is mainly
attributable to the IRES refund received by La Scogliera, relating to the 2016 tax period, and paid back to Banca
Ifis for its share.
LIABILITIES
Section 1 - Financial liabilities measured at amortised cost - Item 10
1.1 Financial liabilities at amortised cost: breakdown of payables due to banks by type
Type of transaction/Amounts
31.12.2021
31.12.2020
CA
Fair Value
CA
Fair Value
L1
L2
L3
L1
L2
L3
1. Payables due to Central
banks
2.236.942
X
X
X
2.116.961
X
X
X
2. Payables due to banks
361.024
X
X
X
250.121
X
X
X
2.1 Current accounts and on
demand deposits
6.228
X
X
X
4.994
X
X
X
2.2 Term deposits
42.824
X
X
X
132.304
X
X
X
2.3 Loans
311.972
X
X
X
112.421
X
X
X
2.3.1 Repurchase agreements
217.512
X
X
X
-
X
X
X
2.3.2 Other
94.460
X
X
X
112.421
X
X
X
2.4 Debt from buyback
commitments on treasury
equity instruments
-
X
X
X
-
X
X
X
2.5 Lease payables
-
X
X
X
-
X
X
X
2.6 Other payables
-
X
X
X
402
X
X
X
Total
2.597.966
-
-
2.597.966
2.367.082
-
-
2.367.082
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Banca Ifis | 2021 Consolidated financial statements and report
150
Payables due to banks amounted to 2.598,0 million Euro, up 9,8% compared to 31 December 2020, mainly due
to new repurchase agreements (+ 217,5 million Euro) with the securitisation notes issued by the subsidiary Ifis
Npl Investing as underlying assets.
The fair value of payables due to banks is in line with the relevant carrying amount, considering the fact that
interbank deposits are short- or very short-term.
1.2 Financial liabilities measured at amortised cost: breakdown of payables due to customers by type
Type of transaction/Amounts
31.12.2021
31.12.2020
CA
Fair Value
CA
Fair Value
L1
L2
L3
L1
L2
L3
1. Current accounts and on
demand deposits
1.655.429
X
X
X
1.256.402
X
X
X
2. Term deposits
3.972.154
X
X
X
4.017.198
X
X
X
3. Loans
-
X
X
X
-
X
X
X
3.1 Repurchase agreements
-
X
X
X
-
X
X
X
3.2 Other
-
X
X
X
-
X
X
X
4. Debt from buyback
commitments on treasury equity
instruments
-
X
X
X
-
X
X
X
5. Lease payables
16.127
X
X
X
16.891
X
X
X
6. Other payables
40.034
X
X
X
181.383
X
X
X
Total
5.683.744
-
-
5.598.990
5.471.874
-
-
5.085.441
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Payables due to customers at 31 December 2021 totalled 5.683,7 million Euro. The increase on the balance at
end 2020 is mainly driven by growth in current accounts on demand, also thanks to the contribution of the
business unit deriving from the former Aigis Banca, offset by a contraction in time deposits.
Banca Ifis | 2021 Consolidated financial statements and report
151
1.3 Financial liabilities measured at amortised cost: breakdown of debt securities issued by type
Type of securities/Amounts
31.12.2021
31.12.2020
CA
Fair Value
CA
Fair Value
L1
L2
L3
L1
L2
L3
A. Securities
1. Bonds
2.504.580
1.059.227
-
1.445.353
2.068.672
768.887
-
1.262.879
1.1 structured bonds
-
-
-
-
-
-
-
-
1.2 other bonds
2.504.580
1.059.227
-
1.445.353
2.068.672
768.887
-
1.262.879
2. Other securities
298
-
-
298
411
-
-
411
2.1 structured
-
-
-
-
-
-
-
-
2.2 other
298
-
-
298
411
-
-
411
Total
2.504.878
1.059.227
-
1.445.651
2.069.083
768.887
-
1.263.290
Key:
CA = Carrying amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
The bonds include, for principal and interest, the securities issued by the SPVs under the scope of securitisation
transactions for a total of 1,4 billion Euro, the senior bonds issued by Banca Ifis S.p.A. for a total of 654,4 million
Euro and the Tier 2 bond for 402,1 million Euro issued mid-October 2017. During 2021, the bonds issued by the
merged company former Interbanca S.p.A., amounting to 62,7 million Euro as at 31 December 2020, were repaid.
1.4 Breakdown of subordinated debts/securities
The line item “Debt securities issued” included 402,1 million Euro in subordinated notes related to Euro Tier 2
bond issued in mid-October 2017 for a nominal amount of 400 million Euro.
1.6 Lease payables
31.12.2021
31.12.2020
Lease payables
16.127
16.891
The above payable relates for 13,1 million Euro to lease contracts of properties and cars coming under the scope
of application of accounting standard IFRS 16, which came into force at 1 January 2019 and as more extensively
described in “Part M - Information on leasing” of this document.
It also includes 3,0 million Euro for the real estate lease the former company Toscana Finanza S.p.A. entered
into in 2009 for the property located in Florence, which housed the headquarters of the Npl Segment until August
2016. The term of the lease entered into with Centro Leasing S.p.A. is 18 years (from 01.03.2009 to 01.03.2027)
and provides for the payment of 216 monthly instalments of about 28 thousand Euro, including the principal,
interest and an option to buy the asset at the end of the lease for 1,9 million Euro. The property currently houses
the head office of Banca Ifis.
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152
Section 2 - Financial liabilities held for trading - item 20
2.1 Financial liabilities held for trading: breakdown by type
Type of
transaction/Amounts
31.12.2021
31.12.2020
NA
Fair value
Fair
value*
NA
Fair value
Fair
value*
L1
L2
L3
L1
L2
L3
A. On-balance-sheet
liabilities
1. Payables due to
banks
-
-
-
-
-
-
-
-
-
-
2. Payables due to
customers
-
-
-
-
-
-
-
-
-
-
3. Debt securities
-
-
-
-
-
-
-
-
-
-
3.1 Bonds
-
-
-
-
-
-
-
-
-
-
3.1.1 Structured
-
-
-
-
X
-
-
-
-
X
3.1.2 Other bonds
-
-
-
-
X
-
-
-
-
X
3.2 Other securities
-
-
-
-
-
-
-
-
-
-
3.2.1 Structured
-
-
-
-
X
-
-
-
-
X
3.2.2 Other
-
-
-
-
X
-
-
-
-
X
Total A
-
-
-
-
-
-
-
-
-
-
B. Derivatives
1. Financial derivatives
-
-
5.992
-
-
-
-
18.551
-
-
1.1 Held for trading
X
-
5.992
-
X
X
-
18.551
-
X
1.2 Connected to the
fair value option
X
-
-
-
X
X
-
-
-
X
1.3 Other
X
-
-
-
X
X
-
-
-
X
2. Credit derivatives
-
-
-
-
-
-
-
-
-
-
2.1 For trading
X
-
-
-
X
X
-
-
-
X
2.2 Connected to the
fair value option
X
-
-
-
X
X
-
-
-
X
2.3 Other
X
-
-
-
X
X
-
-
-
X
Total B
X
-
5.992
-
X
X
-
18.551
-
X
Total (A+B)
X
-
5.992
-
X
X
-
18.551
-
X
Key:
NA = Nominal or notional amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Fair Value* = Fair value calculated excluding changes in value due to changes in the issuer's creditworthiness compared to the date
of issuance
Concerning level 2 liabilities held for trading, see the comments in section 2 under assets.
Section 6 - Tax liabilities - Item 60
Current tax liabilities, amounting to 16,7 million Euro, represent the tax burden for the year (12,0 million Euro at
31 December 2020). Deferred tax liabilities, of 32,5 million Euro, are better described in section 11 of the assets,
to which reference is made.
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153
Section 8 - Other liabilities - Item 80
8.1 Other liabilities: breakdown
31.12.2021
31.12.2020
Payables due to suppliers
93.766
98.327
Payables due to personnel
20.466
14.845
Payables due to the Tax Office and Social Security agencies
13.029
8.669
Sums available to customers
20.575
50.177
Accrued liabilities and deferred income
1.397
2.600
Other payables
238.062
203.629
Miscellaneous provisional items
48.812
60.064
Total
436.107
438.311
Other payables include 26,0 million Euro for a payable due to the parent company La Scogliera deriving from the
application of the tax consolidation (17,3 million Euro at 31 December 2020).
Section 9 - Post-employment benefits - Item 90
9.1 Post-employment benefits: annual changes
31.12.2021
31.12.2020
A. Opening balance
9.235
9.977
B. Increases
1.860
1.688
B.1 Provisions for the year
174
363
B.2 Other changes
1.686
1.160
Business combinations
203
165
C. Decreases
1.758
2.430
C.1 Payments made
473
1.644
C.2 Other changes
1.285
786
D. Closing balance
9.337
9.235
The increases deriving from business combinations concern the post-employment benefit liabilities assumed by
the Group as a result of the 2021 acquisition of the former Aigis Banca business unit and, in 2020, of Farbanca
S.p.A.
Payments made represent the benefits paid to employees during the year.
Other decreases include the impact of the discounting of benefits earned up to 31 December 2006 and still held
in the company, which, based on the changes introduced by the new IAS 19, are recognised through equity.
9.2 Other information
Under IAS/IFRS standards, a company's liabilities regarding benefits that will be paid to employees at the
conclusion of the employer/employee relationship (post-employment benefits) should be recognised based on
actuarial calculations of the amount that will be paid at maturity.
Specifically, these allocations must take into account the amount already earned over the period at the reporting
date, projecting it into the future in order to calculate the amount that will be paid at the conclusion of the
Banca Ifis | 2021 Consolidated financial statements and report
154
employer/employee relationship. This amount must then be discounted to take into account the time that will
pass until payment.
Following the coming into force of the 2007 Budget Law, which brought the reform regarding supplementary
pension plans - as per Italian Legislative Decree no. 252 of 5 December 2005 - forward to 1 January 2007, the
employee was given a choice as to whether to allocate the post-employment benefits earned as from 1 January
2007 to supplementary pension funds or to maintain them in the company, which would then transfer it to a
dedicated fund managed by INPS (the Italian National Social Security Institute).
This reform has led to changes in the accounting of post-employment benefits as for both the benefits earned
up to 31 December 2006 and those earned from 1 January 2007.
In particular:
• post-employment benefits earned as from 1 January 2007 constitute a “defined-contribution plan”,
regardless of whether the employee has chosen to allocate them to a supplementary pension fund or to
INPS's Treasury Fund. Those benefits shall be calculated according to contributions due without
applying actuarial methods;
• post-employment benefits earned up to 31 December 2006 continue to be considered as a “defined-
benefit plan”, and as such are calculated on an actuarial basis which, however, unlike the calculation
method applied until 31 December 2006, no longer requires that the benefits be proportionally attributed
to the period of service rendered. This is because the employee’s service is considered entirely accrued
due to the change in the accounting nature of benefits earned as from 1 January 2007.
Section 10 - Provision for risks and charges - Item 100
10.1 Provisions for risks and charges: breakdown
Items/Components
31.12.2021
31.12.2020
1. Provisions for credit risk related to commitments and financial guarantees granted
11.938
10.988
2. Provisions on other commitments and financial guarantees granted
-
-
3. Provisions for pensions
-
-
4. Other provisions for risks and charges
54.887
42.956
4.1 legal and tax disputes
36.832
21.016
4.2 personnel expenses
4.319
7.148
4.3 other
13.736
14.792
Total
66.825
53.944
As of 31 December 2021, total provisions for risks and charges amounted to 66,8 million Euro, up 12,9 million
Euro on the previous year. The positive change in the balance sheet is primarily due to the contribution deriving
from the acquisition of the business unit of the former Aigis Banca for 11,4 million Euro (directly recorded as
greater liabilities, of which 1,2 million Euro already included in the book value of the business unit acquired and
10,2 million Euro as a greater liability recorded at the time of the PPA). For more details, refer to Part G “Business
combinations” of the Notes.
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155
10.2 Provisions for risks and charges: annual changes
Provisions on
other
commitments
and financial
guarantees
granted
Provisions for
pensions
Other
provisions for
risks and
charges
Total
31.12.2021
A. Opening balance
-
-
42.956
42.956
B. Increases
-
-
22.168
22.168
B.1 Provisions for the year
-
-
10.482
10.482
B.2 Changes due to the passage of time
-
-
-
-
B.3 Changes due to changes in the discount
rate
-
-
-
-
B.4 Other changes
-
-
11.686
11.686
Business combinations
-
-
11.037
11.037
C. Decreases
-
-
10.237
10.237
C.1 Used in the year
-
-
4.706
4.706
C.2 Changes due to changes in the discount
rate
-
-
-
-
C.3 Other changes
-
-
5.531
5.531
D. Closing balance
-
-
54.887
54.887
The change for “Business combinations” relates to the acquisition of the business unit of the former Aigis Banca.
10.3 Provisions for credit risk related to commitments and financial guarantees granted
Provisions for credit risk related to commitments and financial guarantees
granted
Stage 1
Stage 2
Stage 3
Purchased
and/or
originated
impaired
Total
Loan commitments
2.809
1.790
199
-
4.798
Guarantees granted
193
292
6.640
15
7.140
Total
3.002
2.082
6.839
15
11.938
At 31 December 2021, the balance of 11,9 million Euro, an increase of 8,6% on the figure at the previous year
(11,0 million Euro), reflects the write-down of the financial guarantees and commitments given by the Group.
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156
10.6 Provisions for risks and charges - Other provisions
Legal and tax disputes
At 31 December 2021, provisions had been made for 36,8 million Euro for legal and tax disputes. This amount
mainly breaks down as follows:
• 11,5 million Euro relating to the aforementioned contribution of the business unit of the former Aigis
Banca, acquired in May 2021 and directly recorded as a greater liability, of which 1,2 million Euro was
already included in the book value of the business unit acquired and 10,2 million as a greater liability
recorded at the time of the PPA;
• 11,5 million Euro for 27 disputes concerning the Trade Receivables Area (the plaintiffs seek 31,7 million
Euro in damages); these disputes are mainly connected with the request for the repetition of amounts
collected or payments under guarantee in relation to factoring positions without recourse;
• 8,3 million Euro (the plaintiffs seek 62,6 million Euro in damages) for 10 disputes concerning the
Corporate Banking & Lending Area deriving from the former Interbanca;
• 2,3 million Euro (the plaintiffs seek 2,6 million Euro in damages) for 26 disputes concerning the Leasing
Area;
• 1,9 million Euro (the plaintiffs seek 5,0 million Euro in damages) for 62 disputes concerning receivables
of the subsidiary Ifis Npl Investing;
• 0,7 million Euro for various disputes concerning Credifarma (the plaintiffs seek 1,5 million Euro in
damages);
• 433 thousand Euro (the plaintiffs seek 3,9 million Euro) for disputes with customers and agents relating
to Cap. Ital. Fin.;
• 138 thousand Euro for various disputes concerning Farbanca;
• 38 thousand Euro (the plaintiffs seek the same amount in damages) for disputes concerning the investee
Ifis Rental Services.
Personnel expenses
At 31 December 2021, provisions are entered for staff for 4,3 million Euro (7,1 million Euro at 31 December 2020),
of which 4,0 million Euro connected with the Solidarity Fund established in 2020 to implement the cost
rationalisation programme envisaged by the Group.
Other provisions for risks and charges
At 31 December 2021, “Other provisions” were in place for 13,7 million Euro, down 7,1% on the 14,8 million Euro
recorded at 31 December 2020. The item mainly comprised 7,8 million Euro for probable contractual indemnities
for loan transfers, 4,6 million Euro for supplementary indemnities for customers connected with the operations
of the Leasing Area and 0,7 million Euro for the provision for complaints.
Contingent liabilities
Here below are the most significant contingent liabilities outstanding at 31 December 2021. Based on the opinion
of the legal advisers assisting the subsidiaries, they are considered possible, and therefore they are only
disclosed.
Tax dispute
Dispute concerning the write-off of receivables. Company involved Ifis Leasing S.p.A. (former GE Capital Interbanca
Group)
The Italian Revenue Agency has reclassified the write-off of receivables made by the Company in 2004, 2005,
2006 and 2007 and added in the years between 2005 and 2014 to losses on receivables - without any actual
Banca Ifis | 2021 Consolidated financial statements and report
157
evidence. Overall, the Agency assessed 242,7 thousand Euro in additional taxes and administrative penalties
amounting to 100%.
Dispute concerning the assumed “permanent establishment” in Italy of the Polish company
Following the investigation carried out by the Guardia di Finanza [Financial Police Force] in regard to Direct Tax,
VAT and other tax for the tax years 2016 and 2017 and 2013/2015 limited to transactions implemented with the
Polish subsidiary Ifis Finance Sp. z o.o., Verification Notices were served in regard to the years 2013/2015. The
Guardia di Finanza claims that it has found evidence to suggest that in the foreign country (Poland), a
“permanent establishment” of Banca Ifis has been set up and not an autonomous legal subject with capacity of
self-determination. In other words, by refusing to acknowledge the autonomous legal organisation of the
Company with simultaneous tax residence of such in Poland, the costs and revenues of the Polish office would
constitute positive or negative items producing income taxable in Italy (net of the tax credit for tax ultimately
paid abroad). Overall, the Agency assessed 756 thousand Euro in additional taxes and administrative penalties
amounting to 100%. In holding the Financial Administration’s claim to be unfounded, the Group will be filing an
appeal against the Verification Notice pursuant to the law with the competent Tax Commissions, paying 1/3 of
the tax as provisional enrolment on the tax register. The hearing was discussed at the second chambers of the
Provincial Tax Commission of Venice on 12 November 2020. Judgement no. 266/2021 discussed on 12/11/2020
and deposited on 19/03/2021 fully upheld the Bank’s appeal and compensated costs. The Commission in fact
declared that it was a “legitimate right of the Italian parent company, seeking to expand its banking and factoring
services business in Poland, to determine the operative strategy of the parent company established to this end”.
On 14 October 2021, the Revenue Agency was notified of the filing of the appeal with the Veneto Regional Tax
Commission (CTR). In short, the Agency contested the judgement of the Provincial Tax Commission from both
a substantive and a formal point of view, and therefore requested its annulment on the basis of the same logical
and evidential path adopted during the inspection and assessment phase to highlight the existence of the hidden
permanent establishment. Within the terms of the law, the Bank has prepared its rebuttal arguments in defence
of its positions as confirmed by the Provincial Tax Commission.
Regarding all the above tax disputes, the Group, supported by its tax advisers, evaluated the risk of defeat
possible, but not probable and therefore, it did not allocate funds to the provision for risks and charges.
Reimbursements
In line with market practice, under the purchase agreement for the former GE Capital Interbanca Group, the seller
made a series of representations and warranties related to Interbanca and other Investees. In addition, the
agreement includes a series of special reimbursements paid by the seller related to the main legal and tax
disputes involving the former GE Capital Interbanca Group companies.
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158
Section 13 - Group Equity - Items 120, 130, 140, 150, 160, 170 and 180
13.1 Share capital and treasury shares: breakdown
Item
31.12.2021
31.12.2020
170
Share capital (in thousands of Euro)
53.811
53.811
Number of ordinary shares
53.811.095
53.811.095
Nominal amount of ordinary shares
1 euro
1 euro
180
Treasury shares (in thousands of Euro)
(2.847)
(2.948)
Number of treasury shares
339.139
351.427
13.2 Share capital - number of parent company shares: annual changes
Items/Types
Ordinary
Other
A. Shares held at the beginning of the year
53.811.095
-
- fully paid-up
53.811.095
-
- not fully paid-up
-
-
A.1 Treasury shares (-)
(351.427)
-
A.2 Outstanding shares: opening balance
53.459.668
-
B. Increases
12.288
-
B.1 New issues
-
-
- paid:
-
-
- business combinations
-
-
- conversion of bonds
-
-
- exercise of warrants
-
-
- other
-
-
- free:
-
-
- in favour of employees
-
-
- in favour of directors
-
-
- other
-
-
B.2 Sale of treasury shares
-
B.3 Other changes
12.288
C. Decreases
-
-
C.1 Annulments
-
-
C.2 Buybacks of treasury shares
-
-
C.3 Company sell-offs
-
-
C.4 Other changes
-
-
D. Outstanding shares: closing balance
53.471.956
-
D.1 Treasury shares (+)
339.139
-
D.2 Shares held at the end of the year
53.811.095
-
- fully paid-up
53.811.095
-
- not fully paid-up
-
-
Banca Ifis | 2021 Consolidated financial statements and report
159
13.3 Share capital: other information
The share capital is composed of 53.811.095 ordinary shares with a nominal value of 1 Euro each, bearing no
rights, liens and obligations, including those relating to dividend distribution and capital redemption.
13.4 Profit reserves: other information
Items/Components
31.12.2021
31.12.2020
Legal reserve
18.071
20.010
Extraordinary reserve
639.945
613.614
Other reserves
703.219
681.855
Total profit reserves
1.361.235
1.315.479
Other reserves, other than “profit reserves”
5.784
5.392
Total item 150 reserves
1.367.019
1.320.871
Total profit reserves include “Other reserves” for 633,4 million Euro as non-available reserve until approval of the
financial statements for the year ended 31 December 2021. This amount is equal to the gain on bargain purchase
from the acquisition of the former GE Capital Interbanca Group.
Pursuant to Article 1, paragraph 147 of the 2014 Stability Law (Italian Law no. 147 of 27.12.2013) and Article 1,
paragraph 704 of the 2020 Budget Law (Italian Law no. 160 of 27.12.2019), the Banca Ifis Group has realigned
the spread between the statutory value and tax value on certain properties. The amount corresponding to the
higher values following the realignment, net of the substitute tax, generated a 15,3 million Euro untaxed reserve.
In addition, following the 2017 merger of Interbanca S.p.A. into Banca Ifis S.p.A., in accordance with Article 172
paragraph 5 of the Consolidated Law on Income Tax, the surviving entity restored the merging entity's deferred
tax reserves as follows:
• 4,6 million Euro special reserve as per Article 15 paragraph 10 of Italian Law no. 516 of 07/08/1982;
• 2,3 million Euro revaluation reserve as per Italian Law no. 408/90
Finally, there were an additional 20,7 million Euro in deferred tax reserves recognised by Banca Ifis and arising
from the merger of Interbanca, in accordance with the following laws: no. 576/75, no. 83/72 and no. 408/90, that
had been previously recognised as share capital of the latter.
Section 14 - Equity attributable to non-controlling interests - Item 190
14.1 Breakdown of Item 210 “Equity attributable to non-controlling interests”
Company name
31.12.2021
31.12.2020
Equity investments in consolidated companies with significant
minority interests
27.786
26.270
1. Credifarma S.p.A.
6.249
5.795
2. Farbanca S.p.A.
21.537
20.475
Other equity investments
-
-
Total
27.786
26.270
14.2 Equity instruments: breakdown and annual changes
There are no equity instruments.
Banca Ifis | 2021 Consolidated financial statements and report
160
Other information
1. Commitments and financial guarantees granted
Nominal amount of commitments and financial
guarantees granted
Total
31.12.2021
Total
31.12.2020
Stage 1
Stage 2
Stage 3
Purchased
and/or
originated
impaired
1. Loan commitments
1.147.634
38.847
16.265
-
1.202.746
1.089.106
a) Central Banks
-
-
-
-
-
-
b) Public Administrations
2
-
-
-
2
-
c) Banks
8
-
-
-
8
-
d) Other financial companies
82.567
-
444
-
83.011
74.756
e) Non-financial companies
777.311
35.853
15.092
-
828.256
692.163
f) Households
287.746
2.994
729
-
291.469
322.187
2. Guarantees granted
329.139
3.827
48.995
198
382.159
365.109
a) Central Banks
-
-
-
-
-
-
b) Public Administrations
-
-
-
-
-
-
c) Banks
80.860
-
-
-
80.860
87.742
d) Other financial companies
20.913
-
1.145
-
22.058
8.713
e) Non-financial companies
220.854
3.765
47.497
-
272.116
251.219
f) Households
6.512
62
353
198
7.125
17.435
2. Other commitments and guarantees given
Nominal amount
31.12.2021
31.12.2020
Other guarantees granted
16.281
5.474
of which: non-performing loans
11
11
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
-
-
d) Other financial companies
-
-
e) Non-financial companies
16.281
5.474
f) Households
-
-
Other commitments
363.949
32.348
of which: non-performing loans
-
-
a) Central Banks
-
-
b) Public Administrations
-
-
c) Banks
317.716
-
d) Other financial companies
46.233
32.348
e) Non-financial companies
-
-
f) Households
-
-
Banca Ifis | 2021 Consolidated financial statements and report
161
3. Assets used as collateral for own liabilities and commitments
Portfolios
31.12.2021
31.12.2020
1. Financial assets measured at fair value through profit or loss
712
-
2. Financial assets measured at fair value through other comprehensive income
472.465
713.017
3. Financial assets measured at amortised cost
2.008.942
1.142.749
4. Property, plant and equipment
-
-
of which: property, plant and equipment qualifying as inventories
-
-
Financial assets at fair value through other comprehensive income, just like financial assets measured at
amortised cost, respectively for 469,6 million Euro and 1.648,6 million Euro, refer to government securities
guaranteeing loans on the Eurosystem.
The rest of the financial assets measured at amortised cost refer to bank deposits backing derivative
transactions.
5. Administration and mediation on behalf of third parties
Type of services
Amount
1. Execution of orders on behalf of clients
a) purchases
-
1. settled
-
2. unsettled
-
b) sales
-
1. settled
-
2. unsettled
-
2. Portfolio management
a) individual
-
b) collective
-
3. Safekeeping and administration of securities
a) third party securities in custody: associated with depositary bank services
(excluding portfolio management)
-
1. securities issued by consolidated companies
-
2. other securities
-
b) other third party securities in custody (excluding portfolio management): other
573.375
1. securities issued by consolidated companies
6.889
2. other securities
566.486
c) third party securities held with third parties
529.568
d) own securities held with third parties
4.194.244
4. Other transactions
162
Banca Ifis | 2021 Consolidated financial statements and report
4.3 Part C - Consolidated income statement
Section 1 - Interest - Items 10 and 20
1.1 Interest receivable and similar income: breakdown
Items/Technical forms
Debt
securities
Loans
Other
transactions
Total
31.12.2021
Total
31.12.2020
1. Financial assets measured at fair
value through profit or loss:
1.351
471
-
1.822
1.715
1.1. Financial assets held for trading
3
-
-
3
-
1.2. Financial assets measured at
fair value
-
-
-
-
-
1.3. Other financial assets
mandatorily measured at fair value
1.348
471
-
1.819
1.715
2. Financial assets measured at fair
value through other comprehensive
income
5.437
-
X
5.437
938
3. Financial assets measured at
amortised cost:
29.492
431.147
-
460.639
430.782
3.1. Receivables due from banks
1.727
12.704
X
14.431
8.101
3.2. Receivables due from customers
27.765
418.443
X
446.208
422.681
4. Hedging derivatives
X
X
-
-
-
5. Other assets
X
X
11.722
11.722
13.500
6. Financial liabilities
X
X
X
-
-
Total
36.280
431.618
11.722
479.620
446.935
of which: interest income on impaired
financial assets
-
173.728
-
173.728
171.833
of which: interest income on financial
leases
X
45.633
X
45.633
44.519
As for Financial assets measured at fair value through profit or loss, the amounts refer to debt securities and
loans that failed the SPPI test, whereas in the case of Financial assets measured at fair value through other
comprehensive income, the reported amounts are securities, mainly government bonds, in the portfolio.
Interest income from receivables due from customers at amortised cost referring to debt securities is associated
mainly with the senior tranche of a securitisation backed by the Italian government’s state-guarantee scheme
for NPL-backed securities (GACS) that the Group, as well as with the securities portfolio, established as a use of
liquidity.
Finally, interest income on receivables due from customers at amortised cost referring to loans, related for 151,3
million Euro to Npl Segment exposures (140,1 million Euro in 2020).
Banca Ifis | 2021 Consolidated financial statements and report
163
1.2 Interest receivable and similar income: other information
1.2.1 Interest income on foreign currency financial assets
31.12.2021
31.12.2020
Interest income on foreign currency financial assets
4.654
6.326
1.3 Interest due and similar expenses: breakdown
Items/Technical forms
Payables
Securities
Other
transactions
Total
31.12.2021
Total
31.12.2020
1. Financial liabilities measured at
amortised cost
(77.236)
(36.908)
-
(114.144)
(107.689)
1.1 Payables due to central banks
(2.901)
X
X
(2.901)
(1.459)
1.2 Payables due to banks
(1.548)
X
X
(1.548)
(1.666)
1.3 Payables due to customers
(72.787)
X
X
(72.787)
(69.355)
1.4 Debt securities issued
X
(36.908)
X
(36.908)
(35.209)
2. Financial liabilities held for trading
-
-
-
-
-
3. Financial liabilities measured at fair value
-
-
-
-
(14)
4. Other liabilities and provisions
X
X
(2)
(2)
(4)
5. Hedging derivatives
X
X
-
-
-
6. Financial assets
X
X
X
-
-
Total
(77.236)
(36.908)
(2)
(114.146)
(107.707)
of which: interest expense on lease payables
(267)
X
X
(267)
(258)
Interest expense on payables due to customers measured at amortised cost included 63,0 million Euro at 31
December 2021 (61,4 million Euro at 31 December 2020) relating to retail funding by the Parent company, Banca
Ifis, mainly through the Rendimax deposit account. In addition, the item in 2021 includes the contribution of the
funding carried out through the subsidiary Farbanca for 5,1 million Euro.
1.4 Interest due and similar expenses: other information
1.4.1 Interest expense on foreign currency liabilities
31.12.2021
31.12.2020
Interest expense on foreign currency liabilities
(656)
(1.323)
Banca Ifis | 2021 Consolidated financial statements and report
164
Section 2 - Commissions - Items 40 and 50
2.1 Commission income: breakdown
Type of services/Amounts
31.12.2021
31.12.2020
a) Financial instruments
49
5
1. Placement of securities
44
4
1.1 On a firm and/or irrevocable commitment basis
-
-
1.2 Without irrevocable commitment
44
4
2. Receipt and transmission of orders and execution of orders on
behalf of customers
5
1
2.1 Receipt and transmission of orders for one or more financial
instruments
-
-
2.2 Execution of orders on behalf of clients
5
1
3. Other commissions related to activities linked to financial
instruments
-
-
of which: trading on own account
-
-
of which: individual portfolio management
-
-
b) Corporate finance
-
-
1. Mergers and acquisitions advisory services
-
-
2. Treasury services
-
-
3. Other commissions related to corporate finance services
-
-
c) Investment advisory activities
-
-
d) Clearing and settlement
-
-
e) Collective portfolio management
-
-
f) Custody and administration
-
-
1. Depository bank
-
-
2. Other commissions related to custody and administration activities
-
-
g) Central administrative services for collective portfolio management
-
-
h) Fiduciary activities
-
-
i) Payment services
8.119
3.980
1. Current accounts
2.393
779
2. Credit cards
842
62
3. Debit cards and other payment cards
49
21
4. Bank transfers and other payment orders
213
340
5. Other fees related to payment services
4.622
2.778
j) Distribution of third-party services
5.686
5.561
1. Collective portfolio management
-
-
2. Insurance products
5.664
5.561
3. Other products
22
-
of which: individual portfolio management
-
-
k) Structured finance
441
30
l) Servicing for securitisation transactions
2.814
4.418
m) Loan commitments
-
-
n) Guarantees given
1.370
1.788
of which: credit derivatives
-
-
o) Loans
76.301
67.020
of which: for factoring transactions
53.824
49.802
p) Trading in currencies
-
-
q) Commodities
-
-
r) Other commission income
3.775
1.432
of which: for management of multi-lateral trading facilities
-
-
of which: for management of organised trading facilities
-
-
Total
98.555
84.234
Banca Ifis | 2021 Consolidated financial statements and report
165
2.2 Commission expense: breakdown
Services/Amounts
31.12.2021
31.12.2020
a) Financial instruments
(759)
(174)
of which: trading in financial instruments
(759)
(174)
of which: placement of financial instruments
-
of which: individual portfolio management
-
-
- Own
-
-
- Delegated to third parties
-
-
b) Clearing and Settlement
-
-
c) Collective portfolio management
-
-
1. Own
-
-
2. Delegated to third parties
-
-
d) Custody and administration
(91)
(43)
e) Collection and payment services
(2.551)
(1.187)
of which: credit cards, debit cards and other payment cards
-
-
f) Servicing for securitisation transactions
(1.346)
(1.431)
g) Loan commitments
-
-
h) Financial guarantees received
(1.037)
(7)
of which: credit derivatives
-
-
i) Out-of-office canvassing of financial instruments, services and
products
(2.433)
(1.164)
j) Trading in currencies
-
-
k) Other commissions payable
(7.056)
(5.341)
Total
(15.273)
(9.347)
Section 3 - Dividends and similar income - Item 70
3.1 Dividends and similar income: breakdown
Items/Income
31.12.2021
31.12.2020
Dividends
Similar
income
Dividends
Similar
income
A. Financial assets held for trading
-
-
-
-
B. Other financial assets mandatorily measured at fair value
33
25
-
-
C. Financial assets measured at fair value through other
comprehensive income
7.440
-
3.025
-
D. Equity investments
-
-
-
-
Total
7.473
25
3.025
-
Banca Ifis | 2021 Consolidated financial statements and report
166
Section 4 – Net profit (loss) from trading – Item 80
4.1 Net profit (loss) from trading: breakdown
Transactions/Income items
Capital gains
(A)
Profit from
trading (B)
Capital losses
(C)
Losses from
trading (D)
Net result
[(A+B) -
(C+D)]
1. Financial assets held for trading
1
1.072
(89)
(489)
495
1.1 Debt securities
1
33
(9)
(324)
(299)
1.2 Equity instruments
-
1.039
(80)
(165)
794
1.3 UCITS units
-
-
-
-
-
1.4 Loans
-
-
-
-
-
1.5 Other
-
-
-
-
-
2. Financial liabilities held for trading
-
7
-
-
7
2.1 Debt securities
-
-
-
-
-
2.2 Payables
-
-
-
-
-
2.3 Other
-
7
-
-
7
Financial assets and liabilities:
exchange differences
X
X
X
X
(50)
3. Derivatives
49.950
18.348
(52.871)
(17.100)
(1.673)
3.1. Financial derivatives:
49.950
18.348
(52.871)
(17.100)
(1.673)
- On debt securities and interest rates
23.870
4.696
(21.022)
(4.466)
3.078
- On equity instruments and share
indexes
26.080
13.652
(31.849)
(12.634)
(4.751)
- On currencies and gold
X
X
X
X
-
- Other
-
-
-
-
-
3.2 Derivatives on loans
-
-
-
-
-
of which: natural hedges connected to
the fair value option
X
X
X
X
-
Total
49.951
19.427
(52.960)
(17.589)
(1.221)
Banca Ifis | 2021 Consolidated financial statements and report
167
Section 6 - Profit (loss) from sale or buyback - Item 100
6.1 Profit (loss) from sale or buyback: breakdown
Items/Income items
31.12.2021
31.12.2020
Profit
Losses
Net result
Profit
Losses
Net result
Financial assets
1. Financial assets measured
at amortised cost
9.855
(759)
9.096
16.762
(9.461)
7.301
1.1 Receivables due from
banks
-
-
-
-
-
-
1.2 Receivables due from
customers
9.855
(759)
9.096
16.762
(9.461)
7.301
2. Financial assets measured
at fair value through other
comprehensive income
5.712
(774)
4.938
12.045
(5.382)
6.663
2.1 Debt securities
5.712
(774)
4.938
12.045
(5.382)
6.663
2.2 Loans
-
-
-
-
-
-
Total assets (A)
15.567
(1.533)
14.034
28.807
(14.843)
13.964
Financial liabilities measured
at amortised cost
1. Payables due to banks
-
-
-
-
-
-
2. Payables due to customers
-
-
-
-
-
-
3. Debt securities issued
10
(102)
(92)
7.450
-
7.450
Total liabilities (B)
10
(102)
(92)
7.450
-
7.450
Section 7 - Net result of other financial assets and liabilities measured at fair value through
profit or loss - Item 110
7.2 Net change in other financial assets and liabilities measured at fair value through profit or loss:
breakdown of financial assets mandatorily measured at fair value
Transactions/Income items
Capital gains
(A)
Gains on sale
(B)
Capital losses
(C)
Losses on
sale (D)
Net result
[(A+B)-(C+D)]
1. Financial assets
17.724
1.795
(8.472)
-
11.047
1.1 Debt securities
1.075
-
(359)
-
716
1.2 Equity instruments
5.000
1.499
(1.956)
-
4.543
1.3 UCITS units
6.510
296
(1.841)
-
4.965
1.4 Loans
5.139
-
(4.316)
-
823
2. Financial assets: exchange
differences
X
X
X
X
-
Total
17.724
1.795
(8.472)
-
11.047
168
Banca Ifis | 2021 Consolidated financial statements and report
Section 8 - Net credit risk losses/reversals - Item 130
8.1 Net credit risk losses related to financial assets measured at amortised cost: breakdown
Transactions/
Income items
Impairment losses
Reversals of impairment losses
Total
31.12.2021
Total
31.12.2020
Stage 1
Stage 2
Stage 3
Purchased or originated
impaired
Stage 1
Stage 2
Stage 3
Purchased
or originated
impaired
Write-offs
Other
Write-offs
Other
A. Receivables due from
banks
(707)
-
-
-
-
-
807
-
76
-
176
(181)
- Loans
(434)
-
-
-
-
-
807
-
76
-
449
(388)
- Debt securities
(273)
-
-
-
-
-
-
-
-
-
(273)
207
B. Receivables due from
customers
(10.373)
(14.589)
(24.534)
(70.882)
(207.419)
(235.746)
13.804
1.633
35.411
557.889
45.194
(49.322)
- Loans
(9.566)
(14.589)
(24.534)
(70.882)
(207.419)
(235.746)
13.804
1.633
35.411
557.889
46.001
(48.679)
- Debt securities
(807)
-
-
-
-
-
-
-
-
-
(807)
(643)
Total
(11.080)
(14.589)
(24.534)
(70.882)
(207.419)
(235.746)
14.611
1.633
35.487
557.889
45.370
(49.503)
Banca Ifis | 2021 Consolidated financial statements and report
169
Impairment losses/reversals on receivables due from customers measured at amortised cost related to
purchased or originated credit impaired (“POCI”) loans included 104,5 million Euro (42,5 million Euro at 31
December 2020) in reversals on exposures of the Npl Segment. Specifically, this line item includes the impact of
the periodic change in lifetime expected credit losses, even if those changes are favourable or lower than the
ones included in the estimates of cash flows on initial recognition. The 2021 balance of that item also includes
18,0 million Euro in the write-down of receivables following a detailed analysis, carried out also in response to
the Covid-19 pandemic, in terms of greater collection times, mainly on higher vintage positions. Net of this
pandemic-related component, the 2021 net recoveries on the Segment's receivables would amount to 122,5
million Euro.
Net of this item, credit risk losses would total 77,2 million Euro on 31 December 2021, an improvement of 14,2
million Euro on the net adjustments of 91,4 million Euro at end 2020. In addition to the above-mentioned
intervention for 18,0 million Euro on loans in the Npl Segment, the 2021 balance of the item includes:
• additional provisions of 12,5 million Euro in the Corporate Banking Area against the concentration
risk typical of the sector, also to take account of potential further future effects connected with the
lack of credit support measures.
• 12,0 million Euro linked to a revision of the assessment of the recoverability of the exposures on the
commercial portfolio with higher vintage.
8.1a Net credit risk losses related to loans measured at amortised cost concerned by COVID-19
support measures: breakdown
The table below gives details of the write-downs/write-backs of value for loans at amortised cost, concerned by
“moratoriums” or other COVID-19 concessions, or which constitute new liquidity granted by means of public
guarantee mechanisms.
Transactions/
Income items
Impairment losses
Total
31.12.2
021
Total
31.12.2
020
Stage 1
Stage 2
Stage 3
Impaired
acquired or
originated
Write-
offs
Other
Write-
offs
Other
1. Loans concerned by
concessions in compliance with
the GLs
3
-
-
(437)
-
-
(434)
(5.809)
2. Loans subject to outstanding
moratorium measures no longer
in compliance with GLs and not
evaluated as granted
(197)
(271)
-
(720)
-
-
(1.188)
-
3. Loans concerned by other
concessions
-
3
-
-
-
-
3
(2.732)
4. New loans
(501)
(289)
-
(535)
-
-
(1.325)
(248)
Total 31.12.2021
(695)
(557)
-
(1.692)
-
-
(2.944)
X
Total 31.12.2020
(3.083)
(2.467)
(38)
(3.201)
-
-
X
(8.789)
Banca Ifis | 2021 Consolidated financial statements and report
170
8.2 Net credit risk losses related to financial assets measured at fair value through other
comprehensive income: breakdown
Transactions/
Income items
Impairment losses
Reversals of impairment losses
Total
31.12.2021
Total
31.12.2020
Stage
1
Stage 2
Stage 3
Purchase
d or
originate
d
impaired
Stage 1
Stage 2
Stage
3
Purchased or
originated
impaired
Write-offs
Other
Write-offs
Other
A. Debt securities
(32)
-
-
-
-
-
-
-
-
-
(32)
608
B. Loans
-
-
-
-
-
-
-
-
-
-
-
-
- To customers
-
-
-
-
-
-
-
-
-
-
-
-
- To banks
-
-
-
-
-
-
-
-
-
-
-
-
Total
(32)
-
-
-
-
-
-
-
-
-
(32)
608
Section 12 - Administrative expenses - Item 190
12.1 Personnel expenses: breakdown
Type of expense/Sectors
31.12.2021
31.12.2020
1) Employees
(135.014)
(117.859)
a) salaries and wages
(96.717)
(82.234)
b) social security contributions
(26.806)
(23.602)
c) post-employment benefits
(5.139)
(4.633)
d) pension expense
(597)
(563)
e) allocations for post-employment benefits
(174)
(363)
f) allocations to pensions and similar provisions:
-
-
- defined contribution plans
-
-
- defined benefit plans
-
-
g) payments made to supplementary external funds:
(148)
(128)
- defined contribution plans
(148)
(108)
- defined benefit plans
-
(20)
h) costs arising from share-based payment agreements
-
-
i) other employee benefits
(5.433)
(6.336)
2) Other serving employees
(238)
(558)
3) Directors and Statutory Auditors
(6.529)
(4.952)
4) Retired personnel
-
-
Total
(141.781)
(123.369)
Personnel expenses rose by 14,9% to 141,8 million Euro (123,4 million Euro for the year ended 31 December
2020). This growth is due to higher allocations for variable remuneration of approximately 7,5 million Euro
compared to 2020 - a year that was affected by prudential policies related to the uncertainty of the pandemic -
and to the entry into the Banca Ifis Group of Farbanca and the former Aigis Banca business unit for 5,2 million
Banca Ifis | 2021 Consolidated financial statements and report
171
Euro. The number of Group employees at 31 December 2021 was 1.849 as compared with 1.758 staff at 31
December 2020, of whom 45 coming from the acquisition of the former Aigis Banca business unit.
Allocations for post-employment benefits included both contributions that employees have chosen to leave in
the company and to be paid to INPS's Treasury Fund, and contributions to be paid to supplementary pension
funds - as well as the interest expense on the defined benefit obligation.
12.2 Average number of employees by category
Employees:
31.12.2021
31.12.2020
Employees:
1.803,5
1.755,5
a) managers
83,5
76,0
b) middle managers
531,5
514,0
c) other employees
1.188,5
1.165,5
Other personnel
-
-
12.5 Other administrative expenses: breakdown
Type of expense/Amounts
31.12.2021
31.12.2020
Expenses for professional services
(121.507)
(79.780)
Legal and consulting services
(87.639)
(58.216)
Auditing
(894)
(902)
Outsourced services
(32.974)
(20.662)
Direct and indirect taxes
(39.481)
(37.056)
Expenses for purchasing goods and other services
(70.837)
(73.982)
Software assistance and hire
(16.198)
(15.978)
Customer information
(14.749)
(17.400)
FITD and Resolution fund
(11.115)
(8.040)
Advertising and inserts
(7.011)
(9.121)
Property expenses
(5.127)
(5.761)
Securitisation costs
(3.844)
(2.151)
Postage and archiving of documents
(3.709)
(5.432)
Telephone and data transmission expenses
(3.306)
(3.805)
Car fleet management and maintenance
(1.984)
(2.103)
Business trips and transfers
(491)
(1.194)
Other sundry expenses
(3.303)
(2.996)
Total other administrative expenses
(231.825)
(190.818)
Other administrative expenses amounted to 231,8 million Euro as of 31 December 2021, up 21,5% from the
balance of 190,8 million Euro in the previous year. The increase is attributable to higher costs for professional
services and expenses for the purchase of goods and other services mainly related both to the resumption of
credit recovery activities in the Npl Segment and to the change in the scope of consolidation with the full
inclusion of Farbanca and the BU acquired from the former Aigis Banca and the related integration costs as well
as one-off costs connected with the transfer of the registered office of the parent company La Scogliera.
Banca Ifis | 2021 Consolidated financial statements and report
172
The sub-item “Legal and consulting services” comes to 87,6 million Euro in 2021, up 50,5% on the 58,2 million
Euro of 2020. The item includes 11,5 million Euro relating to the costs directly related to Banca Ifis for the transfer
of the registered office of the parent company to Switzerland, as well as the effect of the reorganisation activities
of the Group structures (8,4 million Euro), the full entry into the Group of Farbanca (+3,9 million Euro) and the
resumption of the judicial recovery activities of the receivables belonging to the Npl Segment, which at 31
December 2021 amounted to 33,9 million Euro, compared to 26,8 million Euro at the end of 2020, following the
unblocking of the activities connected with the courts.
The sub-item “Outsourced services”, amounting to 33,0 million Euro as at December 2021, recorded an increase
of approximately 12,4 million Euro mainly due to the out-of-court recovery activities of the Npl Segment
(amounting to 30,1 million Euro, compared to 18,7 million Euro in 2020). The resumption of out-of-court recovery
activities in the Npl Segment, drove the sub-item's performance in 2021 together with new projects on Ifis Npl
Investing and integration activities in some perimeters of the Group.
The sub-item “Indirect taxes and duties” mainly comprises the registration tax incurred for the judicial recovery
activity of the Npl Segment for 25,2 million Euro at the end of December 2021. The item also includes stamp duty
on deposit accounts of 12,7 million Euro, the charge-back of which to customers is included in the item “Other
operating income”.
“Expenses for the purchase of goods and services” totalled 70,8 million Euro as of 31 December 2021, down 4,3%
from the 2020 balance, and are affected by the opposing effect of several significant items, and in particular:
• customer information expenses of 14,7 million Euro at the end of 2021 compared to 17,4 million Euro in
2020 (-15,2%) related to the cyclical nature of Npl portfolio purchases;
• contribution to the Single Resolution Fund, which increased to 11,1 million Euro, compared to 8,0 million
Euro in 2020 as a result of the increased volumes of protected deposits in the banking sector;
• advertising and publicity expenses of 7,0 million Euro, down 23,1% on 2020, which was impacted by the
Group's rebranding initiative;
• securitisation costs go from 2,2 million Euro to 3,8 million Euro. The increase in these costs is due to the
new self-securitisation of receivables in the Npl Segment, as well as the restructuring of the Emma
securitisation arranged by Farbanca;
• document postage and archiving expenses, which are down 31,7% compared to 2020 as a result of the
cyclical nature of Npl portfolio purchases;
• travel and transfers, which amounted to 0,5 million Euro at the end of 2021 and recorded a decrease of
58,9%, due to the changed working methods imposed with the start of the health emergency linked to
the Covid-19 pandemic.
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173
Below is a summary of the prices for auditing and non-auditing services for 2021.
Type of services
Service provider
Beneficiary
Fees
(units of Euro)
Independent auditors' fees
EY S.p.A.
Banca Ifis S.p.A.
250.916
Subsidiaries
437.812
Certification services
EY S.p.A.
Banca Ifis S.p.A.
318.660
Subsidiaries
25.000
Total
1.032.387
Section 13 - Net allocations to provisions for risks and charges - Item 200
13.1 Net provisions for credit risk related to loan commitments and financial guarantees granted:
breakdown
Net provisions for credit risk related to loan commitments and financial guarantees granted totalled 2,6 million
Euro in at 31 December 2021, reflecting the estimated risk on the commitments made.
13.3. Net allocations to other provisions for risks and charges: breakdown
For more details, see Part B, Section 10 Provisions for risks and charges in these Notes to the Consolidated
Financial Statements.
Section 14 - Net impairment losses/reversals on property, plant and equipment - Item 210
14.1. Net impairment losses on property, plant and equipment: breakdown
Assets/Income items
Depreciation (a)
Impairment
losses (b)
Reversals of
impairment
losses (c)
Net result
(a + b - c)
A. Property, plant and equipment
1. for functional use
(9.453)
(755)
-
(10.208)
- owned
(5.206)
(755)
-
(5.961)
- rights of use acquired through leases
(4.247)
-
-
(4.247)
2. Held for investment
-
(80)
-
(80)
- owned
-
(80)
-
(80)
- rights of use acquired through leases
-
-
-
-
3. Inventories
X
-
-
-
Total
(9.453)
(835)
-
(10.288)
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174
Section 15 - Net impairment losses/reversals on intangible assets - Item 220
15.1 Net impairment losses on intangible assets: breakdown
Assets/Income items
Amortisation (a)
Impairment
losses (b)
Reversals of
impairment
losses
(c)
Net result
(a + b - c)
A. Intangible assets
of which: software
(8.445)
-
-
(8.445)
A.1 Owned
(8.445)
-
-
(8.445)
- Internally generated
-
-
-
-
- Other
(8.445)
-
-
(8.445)
A.2 Rights of use acquired through leases
-
-
-
-
Total
(8.445)
-
-
(8.445)
Section 16 - Other operating income (expenses) - Item 230
16.1 Other operating expenses: breakdown
Type of expense/Amounts
31.12.2021
31.12.2020
a) Transactions with customers
(756)
(383)
b) Capital losses
(1.695)
(2.284)
c) Other expenses
(3.214)
(3.275)
Total
(5.665)
(5.942)
16.2 Other operating income: breakdown
Amounts/Income
31.12.2021
31.12.2020
a) Bargain on business combinations
2.859
16.790
a) Recovery of expenses charged to third parties
17.456
16.454
c) Rental income
89
121
d) Income from the realisation of property, plant and equipment
1.769
1.752
e) Other income
11.014
22.758
Total
33.187
57.875
Other net operating income amount to 27,5 million Euro at end 2021, down 47,0% compared to the previous year.
The item referred mainly to revenue from the recovery of expenses charged to third parties. The relevant cost
component is included in other administrative expenses, namely under legal expenses and indirect taxes, as well
as recoveries of expenses associated with leasing operations. The reduction on 2020 is due both to lower gain
on bargain purchase for approximately 13,9 million Euro realised on business combinations (in 2020, this was
16,8 million Euro related to the acquisition of Farbanca, against 2,9 million Euro related to the May 2021
acquisition of the former Aigis Banca business unit), and to the fact that in 2020 the Npl Segment had benefited
from 14,1 million Euro received as indemnities on portfolios acquired in previous years.
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175
Section 19 - Value adjustments of goodwill - Item 270
19.1 Value adjustments of goodwill: breakdown
Value adjustments of goodwill at 31 December 2021 are not measured, while they came to 700 thousand Euro
at 31 December 2020 insofar as they refer to the full write-down of the goodwill deriving from the consolidation
of the company Cap.Ital.Fin.
Section 20 - Profit (loss) from sale or buyback - item 280
20.1 Profit (Loss) from sale of investments: breakdown
Type of expense/Amounts
31.12.2021
31.12.2020
A. Property
-
24.161
- Gains on disposal
-
24.161
- Losses on disposal
-
-
B. Other assets
-
-
- Gains on disposal
-
-
- Losses on disposal
-
-
Net result
-
24.161
Gains on disposal of investments, not measured in 2021, were 24,2 million Euro in 2020 and include the effects
of the Financial assets held for trading sale of the Milan property in Corso Venezia, net of the related costs of
sale.
Section 21 - Income taxes for the year relating to current operations - Item 300
21.1 Income taxes for the year relating to current operations: breakdown
Income items/Segments
31.12.2021
31.12.2020
1.
Current taxes (-)
(43.012)
(29.691)
2.
Changes in current taxes of previous years (+/-)
672
1.197
3.
Reductions in current taxes for the year (+)
-
-
3.bis
Reductions in current taxes for the year for tax credits as per
Italian Law no. 214/2011 (+)
-
-
4.
Changes in deferred tax assets (+/-)
(8.200)
1.607
5.
Changes in deferred tax liabilities (+/-)
2.969
4.152
6.
Tax expense for the year (-) (-1+/-2+3+3 bis+/-4+/-5)
(47.571)
(22.735)
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176
21.2 Reconciliation between theoretical tax charges and effective tax charges for the year
Items/Components
31.12.2021
Pre-tax profit (loss) for the year from continuing operations
149.874
Regional tax on productive activities (IRES) - theoretical tax charges (27,5%)
(41.216)
- lower tax rate impact
404
- effect of non-taxable income and other decreases - permanent
11.301
- effect of non-deductible charges and other increases - permanent
(5.935)
- non-current regional tax on productive activities (IRES)
(519)
Regional tax on productive activities (IRES) - Effective tax charges
(35.965)
Regional tax on productive activities (IRAP) - theoretical tax charges (5,57%)
(8.349)
- lower tax rate impact
217
- effect of income/charges that are not part of the taxable base
(4.589)
- non-current regional tax on productive activities (IRAP)
1.115
Regional tax on productive activities (IRAP) - Effective tax charges
(11.606)
Other taxes
-
Effective tax charges for the year
(47.571)
The tax rate for the year 2021 was 31,74%. The effective tax rate is below the theoretical tax rate of 33,07% (27,5%
IRES + 5,57% IRAP) due to the following components:
• “Super depreciation” benefit: the residual off-accounts deduction of 30%-40% of the depreciation shares
of “new instrumental tangible assets” acquired by Ifis Rental Services in the dry lease business equates
to a reduction of the tax incidence of -1,25 percentage points;
• ACE benefit: the deduction of the “notional return of 1,30%” of the increases in Equity made in the Group
companies (capital increases and/or profits assigned to reserves net of dividends distributed) in the
period 2010-2021 equates to a reduction in the tax incidence of -3,47 percentage points;
• Dividends collected: taxation in the individual financial statements of Banca Ifis of the dividends
collected by the subsidiary Ifis Npl Investing and then eliminated in the consolidation, equates to an
increase in the tax incidence of +1,16 percentage points;
• Negative impact of non-deductible IRES/IRAP costs: the presence of non tax deductible costs equates
to an increase of the tax incidence of +0,75 percentage points;
• Impairment of deferred tax assets (DTA): the impairment of the DTAs of the subsidiary Cap.Ital.Fin.,
posted to the item “Taxes” is equivalent to an increase in the tax rate of +1,48 percentage points.
Section 23 - Profit (loss) for the year attributable to non-controlling interests - Item 340
23.1 Detail of item 340 Profit (loss) for the year attributable to non-controlling interests
Company Name
31.12.2021
31.12.2020
Consolidated equity investments with significant minority interests
1.721
338
1. Credifarma S.p.A.
453
231
2. Farbanca S.p.A.
1.268
107
Total
1.721
338
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177
Section 24 - Other information
24.1 Disclosure of government grants as per Article 1, paragraph 125 of Italian Law no. 124 of 4 August
2017 (the “Annual Law on the Market and Competition”)
Italian Law no. 124 of 4 August 2017 (Annual Market and Competition Law), under Art. 1, paragraphs 125-129,
introduced various measures aimed at increasing the transparency of contributions by administrations and
public companies, including listed, in the favour of third sector subjects and businesses in general.
Specifically, with respect to the financial reporting process, the law requires all businesses to disclose subsidies,
grants, paid positions, and economic benefits of any kind received from the following entities in the notes to the
separate and consolidated financial statements:
• public administrations and entities with equivalent status (Article 2-bis, Italian Legislative Decree no.
33/2013);
• entities owned, either de jure or de facto, directly or indirectly, by public administrations; and
• state-owned enterprises.
Said disclosures are required if the amounts received during the reporting period exceeded 10 thousand Euro.
Consistently with the clarification issued by Italy's Council of State with opinion no. 1.149 of 1 June 2018 and
the guidance provided by trade associations (Assonime), the disclosure requirements do not apply to the
following:
• prices for the business provision of professional and other services and supplies or other appointments
coming under the scope of the core business. Indeed, these amounts received do not come under the
scope of donations/public support policies;
• tax expenditures available to all businesses that meet specific conditions, based on pre-established
general requirements, which are also the subject of specific disclosures;
• extension of subsidised loans to customers, as these involve funds of third parties (e.g. interest rate
subsidies from the public administration) and not funds of the bank that acts as intermediary.
In consideration of the foregoing, below are the subsidies, grants, paid positions, and economic benefits of any
kind received by the Group's companies.
Grantor
Recipient Group Company
Amount of the
government grant
(in thousands of
Euro)
National Fund for the Support of Employment (F.O.C.)
Banca Ifis S.p.A.
290
Ifis Npl Investing S.p.A.
468
Ifis Npl Servicing S.p.A.
339
Total
1.097
Banca Ifis | 2021 Consolidated financial statements and report
178
Grantor
Reference
Recipient Group Company
Amount of the
government grant
(in thousands of
Euro)
INPS
L. 205/2017, L. 126/2020, L. 78/2020
Banca Ifis S.p.A.
258
L. 205/2017, L. 126/2020, L. 78/2020
Ifis Npl Investing S.p.A.
13
L. 205/2017, L. 126/2020, L. 78/2020
Ifis Npl Servicing S.p.A.
34
Italian Law no. 126/2020
Cap.Ital.Fin S.p.A.
97
Total
402
In addition, please refer to the “Transparency” section of Italy's National State Aid Register for a summary of the
applications for Training Aid (Article 31 Regulation no. EC 651/2014) and the relevant commitment of
expenditure by the granter.
Section 25 - Earnings per share
25.1 Average number of ordinary diluted shares
Earnings per share and diluted earnings per share
31.12.2021
31.12.2020
Net profit for the year attributable to the Parent company (in thousands of Euro)
100.582
68.804
Average number of outstanding shares
(1)
53.468.051
53.457.850
Average number of ordinary diluted shares
53.468.051
53.457.850
Consolidated earnings per share for the year (Units of Euro)
1,88
1,29
Consolidated diluted earnings per share for the year (Units of Euro)
1,88
1,29
(1) Outstanding shares are net of treasury shares held in the portfolio.
Banca Ifis | 2021 Consolidated financial statements and report
179
4.4 Part D - Comprehensive income
Consolidated statement of comprehensive income
ITEMS
(in thousands of Euro)
31.12.2021
31.12.2020
10.
Profit (Loss) for the year
102.303
69.142
Other comprehensive income not to be reclassified to profit or loss
1.370
(19.637)
20.
Equity securities measured at fair value through other comprehensive income
3.791
(21.932)
a) fair value gains (losses)
(220)
(17.166)
b) transfers to other components of equity
4.011
(4.766)
70.
Defined benefit plans
(337)
(421)
100.
Income taxes related to other comprehensive income to be reclassified to profit or loss
(2.084)
2.716
Other comprehensive income to be reclassified to profit or loss
(5.878)
(318)
120.
Exchange differences
(354)
(2.525)
a) changes in value
(354)
(2.525)
150.
Financial assets (other than equity securities)
measured at fair value through other comprehensive
income
(8.270)
3.598
a) fair value gains (losses)
(15.680)
(5.749)
b) reclassification to profit or loss
7.410
9.347
- credit risk losses
32
(608)
- gains/losses on sale
7.378
9.955
180.
Income taxes related to other comprehensive income to be reclassified to profit or loss
2.746
(1.391)
190.
Total other comprehensive income
(4.508)
(19.955)
200.
Total comprehensive income (Item 10 + 190)
97.795
49.187
210.
Total consolidated comprehensive income attributable to non-controlling interests
1.719
336
220.
Total consolidated comprehensive income attributable to the Parent company
96.076
48.851
180
Banca Ifis | 2021 Consolidated financial statements and report
4.5 Part E - Information on risks and related hedging policies
Risk governance organisation
The prudential supervisory provisions for banks continue to strengthen the system of rules and incentives that
allow to measure more accurately potential risks connected to banking and financial operations as well as
maintain internal capital levels more suited to the effective level of risk exposure of each intermediary.
Concerning risk governance, the Group regularly reviews the strategic guidelines set out in the so-called Risk
Appetite Framework. Meanwhile, the second pillar of the provisions includes the ICAAP (Internal Capital
Adequacy Assessment Process) and ILAAP (Internal Liquidity Adequacy Assessment Process) processes,
pursuant to which the Group autonomously assesses, respectively, its own current and expected capital
adequacy in relation to both so-called first-pillar risks (credit risk, counterparty risk, market risk and operational
risk) and other risks (banking book interest rate risk, concentration risk, etc.), and its adequacy as far as the
governance and management of liquidity risk and funding is concerned.
This process accompanied the preparation and sending to the Supervisory Body in May 2021 of the Annual
ICAAP and ILAAP Report with reference to the position at 31 December 2020 and the forecasts envisaged for
2021, including the estimated impact of the current health emergency.
Again with reference to 31 December 2020 and in compliance with the obligations in the Pillar 3 provisions,
Banca Ifis published, along with the 2020 consolidated financial statements, information on its capital adequacy,
its exposure to risks, and the general characteristics of the systems it has put in place to identify, measure and
manage these risks. This document has been published on the website www.bancaifis.it in the Investor
Relations section.
With reference to the above and pursuant to Circular no. 285 of 17 December 2013 as amended - Supervisory
Provisions for banks - the Banca Ifis Group has set up an Internal Control System that aims to guarantee a
reliable and sustainable generation of value in a context of sensible risk control and taking, so as to protect the
Group's capital adequacy as well as its financial position and performance.
The Banca Ifis Group's Internal Control System consists of a series of rules, functions, structures, resources,
processes, and procedures aimed at ensuring the following goals are achieved consistently with the principle of
sound and prudent management:
• executing business strategies and policies;
• containing risk within the limits set out in the Group's Risk Appetite Framework (“RAF”);
• safeguarding the value of assets and protecting the Bank from losses;
• maintaining effective and efficient business processes;
• ensuring the reliability and security of corporate information and IT procedures;
• preventing the risk that the Group might become involved, including involuntarily, in unlawful activities
(and specifically those associated with money laundering, usury, and terrorist financing);
• ensuring operations comply with the law and supervisory regulations as well as internal policies, rules
and procedures.
Audits involve all personnel to varying degrees and constitute an integral part of day-to-day operations. They can
be classified according to the relevant organisational structures. Some types of audits are highlighted below:
181
Banca Ifis | 2021 Consolidated financial statements and report
• line audits aim to ensure operations are carried out correctly. These audits are carried out by the
operational structures themselves, incorporated in procedures, or performed as part of back office
operations. The operational structures are primarily responsible for the risk management process: as
part of their day-to-day operations, they shall identify, measure or assess, monitor, mitigate, and report
the risks arising from ordinary operations in accordance with the risk management process; they shall
comply with the operational limits assigned to them in accordance with the risk objectives and the
procedures that form part of the risk management process;
• risk and compliance controls (“second line of defence”) are intended to ensure the risk management
process is correctly implemented in accordance with the operational limits assigned to the various
functions, and that business operations comply with regulations - including corporate governance rules;
• internal auditing (“third line of defence”) is aimed at identifying breaches of procedures and regulations
as well as regularly assessing the comprehensiveness, adequacy, functionality (in terms of both
efficiency and effectiveness), and reliability of the internal control and IT systems on a regular basis
based on the nature and extent of the risks.
The role of the different players involved in the Internal Control System (the Board of Directors, the Control and
Risks Committee, the Director in charge of the Internal Control and Risk Management System, the Supervisory
Body pursuant to Italian Legislative Decree no. 231/2001, Internal Audit Function, Risk Management Function,
Compliance Function, Anti-Money Laundering Function) in addition to the Corporate Accounting Reporting
Officer according to the connotation of banking reality with listed shares, are described in detail in the Report on
corporate governance and ownership structures prepared in accordance with the third paragraph of Article 123
bis of Italian Legislative Decree no. 58 of 24 February 1998 (TUF), as amended, the latest edition of which will be
approved by the Board of Directors jointly with these consolidated financial statements and subsequently
published on the Bank's website in the Corporate Governance section.
Risk culture
The Parent company facilitates the development and dissemination at all levels of an integrated risk culture in
relation to the various types of risk and extended to the entire Group. Specifically, working together with the
different corporate functions and Human Resources, it has developed and implemented training programmes to
raise awareness about risk prevention and management responsibilities among employees.
In this context, the Parent company's control functions (Risk Management, Compliance and Anti-Money
Laundering) are active parties in the training processes as far as they are concerned. A culture of widespread
responsibility is promoted, with capillary staff training, aimed both at acquiring knowledge of the risk
management framework (approaches, methodologies, operational applications, rules and limits, controls), and
at internalising the Group's value profiles (code of ethics, behaviour, rules of conduct and relations).
This Part E of the Consolidated Notes to the financial statements provides information on the following risk
profiles, the relevant management and hedging policies implemented by the Group, and trading in derivative
financial instruments:
• credit risk;
• market risks:
– interest rate risk,
– price risk,
– currency risk,
• liquidity risk;
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• operational risks.
Section 1 - Accounting consolidation risks
Quantitative information
The gross exposures reported in the following tables account for the positive impact of the breakdown of the
difference between the fair value as measured in the business combination and the carrying amount of the
receivables recognised by the subsidiaries over time.
A. Credit quality
A.1 Non-performing and performing credit exposures: amounts, impairment losses, trend, and
economic breakdown
A.1.1 Breakdown of financial assets by portfolio and credit quality (carrying amounts)
Portfolio/Quality
Bad loans
Unlikely to
pay
Non-
performing
past due
exposures
Performing
past due
exposures
Other
performing
exposures
Total
1. Financial assets
measured at amortised cost
1.149.953
463.397
123.541
342.157
8.777.747
10.856.795
2. Financial assets
measured at fair value
through other
comprehensive income
-
-
-
-
515.278
515.278
3. Financial assets
measured at fair value
-
-
-
-
-
-
4. Other financial assets
mandatorily measured at fair
value
4.942
9.756
-
-
24.420
39.118
5. Financial assets under
disposal
-
-
-
-
-
-
Total 31.12.2021
1.154.895
473.153
123.541
342.157
9.317.445
11.411.191
Total 31.12.2020
1.103.776
479.235
33.249
313.374
9.045.081
10.974.715
Demand receivables due from banks (which are classified to the item “Cash and cash equivalents” in compliance
with the instructions of the Bank of Italy), equity securities and UCITs units are not included in this table.
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A.1.2 Breakdown of financial assets by portfolio and credit quality (gross and net amounts)
Portfolio/Quality
Non-performing
Performing
Total
(net
exposure)
Gross exposure
Overall
impairment
losses/reversals
Net exposure
Overall partial
write-offs
(1)
Gross exposure
Overall
impairment
losses/reversals
Net exposure
1. Financial assets measured at
amortised cost
2.014.640
277.749
1.736.891
10.848
9.200.842
80.938
9.119.904
10.856.795
2. Financial assets measured at
fair value through other
comprehensive income
-
-
-
-
515.529
251
515.278
515.278
3. Financial assets measured at
fair value
-
-
-
-
X
X
-
-
4. Other financial assets
mandatorily measured at fair
value
14.698
-
14.698
11.944
X
X
24.420
39.118
5. Financial assets under
disposal
-
-
-
-
-
-
-
-
Total 31.12.2021
2.029.338
277.749
1.751.589
22.792
9.716.371
81.189
9.659.602
11.411.191
Total 31.12.2020
1.852.431
236.173
1.616.258
40.555
9.128.424
69.215
9.059.209
10.675.467
(1) Amount to be reported for disclosure purposes
Demand receivables due from banks (which are classified to the item “Cash and cash equivalents” in compliance
with the instructions of the Bank of Italy), equity securities and UCITs units are not included in this table.
Portfolio/Quality
Low credit
quality assets
Other assets
Accumulated
capital losses
Net exposure
Net exposure
1. Financial assets held for trading
127
27
7.690
2. Hedging derivatives
-
-
-
Total 31.12.2021
127
27
7.690
Total 31.12.2020
312
32
19.217
Equity securities are not included in this table.
B. Disclosure on structured entities (other than securitisation vehicles)
B.2 Unconsolidated structured entities
Qualitative information
There were no unconsolidated structured entities at 31 December 2021.
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Section 2 - Prudential consolidation risks
1.1 Credit risk
Qualitative information
1. General aspects
In accordance with the guidelines approved by the Parent company's Governing Body and the changes in the
supervisory regulatory framework, the Group seeks to strengthen its competitive position in the market offered
to small and medium businesses. The aim is to increase its market share in the following segments: trade
receivables, including for entities with specialist needs such as pharmacies, leasing, tax receivables, and
distressed loans, providing high-quality and highly customisable financial services while keeping credit risk
under control and profitability in line with the level of quality offered. The Private segment is also a
complementary reference market for the Banking Group’s credit business, in respect of the strategic guidelines
defined over time by the Business Plan and the related implementing initiatives. The operations referred to the
pharmaceutical sector are carried out by the subsidiaries Farbanca, a banking operator specialised in medium-
long term loans to pharmacies, and Credifarma, an intermediary specialised in the granting of advances, medium
and long term loans, instrumental leasing and financial services to pharmacies; the Group has thus strengthened
its role in support of the pharmaceutical sector, accelerating, thanks to the best skills, the development of
increasingly specialised, customised and digital services, for the first time integrated in a single large operator.
In May 2021, the Parent company acquired a business unit of the former Aigis Banca, which has been placed in
compulsory liquidation by the Ministry of Economy and Finance. The perimeter acquired by Banca Ifis included,
on the assets side, in addition to its own bond portfolio (mainly government bonds), loans to small and medium-
sized businesses mainly consisting of medium/long-term loans backed by guarantees from Mediocredito
Centrale (MCC) and factoring loans. On the liabilities side, the acquisition mainly involved deposits, including
those of retail customers. In addition, the relevant personnel at the Milan, Rome and Bari offices were transferred.
The banking Group currently operates in the following fields:
• the factoring business is characterised by the direct assumption of risks related to granting advances
and loans, as well as guarantees, if any, on trade receivables of mainly small- and medium-sized
enterprises. As part of its operations, the factoring business purchases receivables due from public
health service and local authorities outright;
• corporate lending and structured finance operations, which focus on offering medium and long-term
financing and secured and unsecured products to support companies operating in Italy in their organic
or inorganic growth through extraordinary operations to reposition or expand their business, establish
alliances or pursue integrations, promote restructuring processes, or introduce new investors and
partners into the company. The clients of this business are usually corporations;
• investments in non-financial companies and in units of intermediaries;
• medium/long-term loans to small and medium-sized enterprises (SMEs) operating in the main
production sectors, covered by the public guarantee, conceived by the Ministry of Economic
Development (MED) of the Central Guarantee Fund and extended in use following the Covid-19
emergency;
• the leasing division targets mainly small economic operators as well as small- and medium-sized
businesses (SMEs). In general, finance leases help independent contractors and businesses and takes
concrete form in the financing of company cars and commercial vehicles as well as facilitating
equipment investments for businesses and resellers. Meanwhile, long-term leases mainly focus on
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equipment finance - specifically on office and IT products and, to a lesser extent, industrial and
healthcare equipment;
• the acquisition of non-performing loans by the subsidiary Ifis Investing S.p.A. (formerly Ifis Npl S.p.A.),
mainly of retail customers;
• servicing (master and special services), management of Npl portfolios with collection both judicial and
non-judicial, consultancy in due diligence activities and authorised investors in Npl transactions,
managed by the company Ifis Npl Servicing S.p.A. (formerly Gemini S.p.A.);
• the granting of loans to retail customers, including through the definition and refinancing of transferred
non-performing loans, to be settled through salary- or pension-backed loan schemes, managed by the
subsidiary Cap.Ital.Fin. S.p.A.;
• short- and medium-term lending to pharmacies by the subsidiaries Credifarma S.p.A. and Farbanca
S.p.A., including through the disposal of receivables due from Italy's National Health Service as well as
public- and private-sector healthcare providers.
• management of the proprietary portfolio, carried out mainly via financial investments in bonds, mostly
government bonds, and listed equities;
• securitisation activities, which are aimed at sector operators, in particular originators and investors, by
offering finance through investments in asset-backed securities and other exposures to securitisation
schemes, and by taking on the roles of arranger and sponsor in the context of such transactions with a
view to cross-selling. Investments are mainly concentrated in senior and mezzanine tranches with
underlying performing assets and with a favourable trade-off in terms of expected profitability compared
to risk weighting.
Given the particular business of the Group's companies, credit risk is the most important element to consider as
far as the general risks assumed by the Group are concerned. Maintaining an effective credit risk management
is a strategic objective for the Banca Ifis Group, pursued by adopting integrated tools and processes that ensure
proper credit risk management at all stages (preparation, lending, monitoring and management, and
interventions on troubled loans).
In order to incorporate the impacts of the health emergency caused by the Covid-19 pandemic into the
accounting valuation models used for Npls, analyses were performed and new prudent logics implemented, as
well as the institutional measures introduced to temporarily support the national economy.
The Italian Government, in order to continue to support SMEs from a financial point of view by alleviating the
liquidity tensions caused by the Covid-19 emergency, has issued the Italian Decree Law 25 May 2021 no. 73 (the
“Sostegni-Bis Decree”) which contains the following measures:
• with regard to guarantees on portfolios of new medium/long-term loans intended for companies with no
more than 499 employees for the implementation of research, development and innovation projects
and/or investment programmes, an increase in the investment portfolios to 500 million Euro is granted,
provided that the duration is between a minimum of 6 years and a maximum of 15 years and at least
60% of the loans are for research, development and innovation projects and/or investment programmes;
• extension to 31 December 2021 of temporary measures to support business liquidity and extension to
10 years of the maximum duration of loans with public guarantee (Sace), compared to the previous limit
of 6 years;
• extension to 31 December 2021 of the moratorium for SMEs, for revocable credit facilities and for loans
granted against advances on loans existing on 29 February 2020 or, if higher, for both the drawn and the
unused portion.
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These measures also mitigate any negative impact on the credit quality of banks.
More specifically, for the Npl Segment, during the period of health emergency, recovery activities through
telephone collection have been strengthened as door to door activities of the agent network have been
temporarily suspended. Restrictions imposed as a result of the spread of Covid-19 have been partially overcome
in the first half of 2021, with a substantial return of court activity to pre-pandemic levels.
In order to incorporate the effects linked to the temporary closure of production activities, corrections were made
to the forecasting models that entailed, with reference to amicable management, a limited decline in collections
expected for subsequent financial years, in line with the general macroeconomic forecasts used for the medium-
term estimates.
Consistently with the legislation released, certain corrections have been made to the models that cover both the
secured Npl positions, as a result of the extension of collection times due to the suspension in proceeding with
the attachment of properties received as collateral and for positions for which bankruptcy proceedings are in
progress.
As regards loans to private customers in the form of salary- and pension-backed loans granted through the
subsidiary Cap.Ital.Fin. S.p.A., the Group suffered the effect of the closure and block to production of numerous
companies that, in many cases, applied for the social shock absorber of derogation temporary lay-off fund; this
led to the disbursement of salaries directly by INPS, often resulting in delays in the disbursement of funds and,
consequently, in the receipt of payments.
The Group chose to selectively freeze instalments of the amortisation plan for the entire duration of the
contribution mechanism. As of December 2021, there are no longer any positions affected by this suspension,
and the related overall economic and financial effects produced during the period of suspension are to be
considered immaterial.
In the Corporate area, following the Covid-19 emergency, the Banca Ifis Group has taken various actions to best
address the emergency in line with the new regulations. More specifically, it has adhered to the Cura Italia Decree,
to the ABI credit agreement and the Liquidity Decree, with the consequent concession of moratoriums and the
disbursement of new loans backed by the Central Fund.
Starting 2020, the Banca Ifis Group, in line with the Cura Italia Decree and subsequent amendments,
implemented the following supporting measures for micro, small and medium enterprises based in Italy, which
were classified as performing and had a lack of liquidity due to the Covid-19 epidemic:
• limitation to the revocation of overdrafts until 31 December 2021;
• extension to 31 December 2021 of non-instalment loans with earlier contractual due date.
• suspension until 31 December 2021 and breaking down into instalments of mortgages and lease
charges.
With reference to Credifarma, at 31 December 2021 there are 14 counterparties (for a total exposure of 1,7 million
Euro) that have benefited from the extension of the suspension of the capital share pursuant to the “Cura Italia”
decree.
With reference to Farbanca, at 31 December 2021 there are 127 counterparties that have benefited from the
extension of the suspension of the capital share pursuant to the “Cura Italia” decree, for an equivalent value of
approximately 3,0 million Euro.
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With reference to the entry into force of the new rules on the “Classification in Default of Counterparties” with
effect from 1 January 2021 (the “New DoD - Definition of Default”), with the exception of that set out below
regarding exposures towards entities of the National Health Service (NHS) it is believed that it has not had a
significant impact in terms of deterioration of the quality of the Banca Ifis Group's credit assets.
With reference to the specific sector of NHS bodies, the counting of the days of backlog in application of the
New DoD was substantially suspended as a result of the emergency legislative interventions related to the Covid-
19 pandemic and, in particular, following the introduction of art. 117, paragraph 4, of Decree Law no. 34 of 19
May 2020, which provided for the suspension of executions and the ineffectiveness of attachment orders against
NHS bodies (the so-called block on executions) until 31 December 2020, subsequently extended until 31
December 2021 by virtue of art. 3, paragraph 8, of Decree Law no. 183 of 31 December 2020.
Indeed, in the Group's view, the stay on execution orders:
• aimed to allow the NHS bodies not to pay their debts (albeit temporarily) for the purposes of the
realization of higher public interests also linked to the health emergency; and consequently
• suspended the counting of days in arrears pursuant to art. 178 CRR in relation to the local health
authorities’ exposures to the Group.
Therefore, the new methods of handling past due receivables, with reference to the specific and unique case of
trade receivables from NHS entities acquired by the Group on a non-recourse basis, would have been applied
from 1 January 2022.
It was only on 8 December 2021 that the Constitutional Court issued judgement no. 236/202, which declared the
extension of the block on executions provided for by art. 3, paragraph 8, of the above-mentioned Decree Law no.
183/2021 to be constitutionally illegitimate.
In this context, when completing and closing the financial statements as of 31 December 2021, taking into
account the “late” issuance of the judgement, the Group launched an analysis process aimed at identifying an
approach, based on responsibility and reasonableness, to represent the factual reality of the reference contexts
and provide a correct representation, also in terms of credit risk and the classification of exposures to NHS
bodies.
In the light, amongst other things, of the absence of established market practices or indications from authorities
or trade associations regarding the effects of Constitutional Court sentence 236/202 on the date from which to
start counting days overdue on exposures to NHS bodies (i.e. from 1 January 2021 or 7 December 2021, date of
publication of the Ruling), the Group, therefore, has adopted a substantive approach in classifying and
consequent measurement as of 31 December 2021, exposures related to trade receivables acquired without
recourse and on a non-recourse basis, where the debtor is an NHS entity.
The approach adopted by the Group, subject to further refinements which may also be made as a result of any
clarifications in this regard by the competent Authorities, provides that, in relation to the exposures in question
to debtor counterparties in respect of which the Group has accrued direct, independent, objective, consolidated
and solid evidence demonstrating constant payment, year by year of a substantial portion of the receivables
acquired, regardless of the relative timing, the delay in the payment of the relative receivables by a counterparty
that meets the above criteria, is objectively and clearly connected to a dispute that is relevant for the purposes
of suspending the counting of days in arrears pursuant to the New DoD, even if not yet specifically formalised
(the “implicit challenge”).
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Based on this approach, the Group has classified approximately 65 million Euro of receivables for exposures to
NHS entities as non-performing past due exposures.
2. Credit risk management policies
As part of its lending operations, the Banca Ifis Group is exposed to the risk that an unexpected change in the
creditworthiness of a counterparty may cause an unforeseen change in the relevant credit exposure, requiring
to write off all or part of the receivables. This risk is always inherent in conventional lending operations,
regardless of the form of financing.
The main reasons for non-compliance are the lack of the borrower's independent capacity to service and repay
the debt (due to lack of liquidity, insolvency, etc.) and the occurrence of circumstances that affect the borrower's
economic and financial conditions, such as the “country risk”.
2.1 Organisational aspects
The standards and guidelines that the Banca Ifis Group intends to give in respect of the concession of credit are
set out in the “Group Credit Policy” applied and given out, insofar as competent, to all the organisational units of
the Bank and Group companies involved in the assumption and management of credit.
Inside, we find:
• the roles and responsibilities of the corporate bodies and organisational structures involved in the loan
process;
• the definition of the credit strategies and rules with reference to segments of customers, counterparties
and types of comparable transactions, the limits of reliance assigned to non-banking counterparties, the
limits to exposure assigned to the various types of economic businesses, the identification of the Most
Significant Transactions (MSTs) for the preventive verification that they are indeed consistent with the
risk limits and objectives defined in the Group Risk Appetite Framework (RAF), the limits to the risk
assigned to transactions with related parties and/or company representatives, pursuant to Art. 136 of
the Consolidated Law on Banking. The monitoring, review and update of the credit rules and strategies
involve:
– the Parent company’s Monitoring and Major Risks Department, in coordinating the process of
formulating proposed reviews and updates to the credit policies to be submitted for the approval
of the Parent company's Board of Directors;
– the Parent company’s Risk Management Department in monitoring the results achieved by the
Group in terms of volumes and overall effective positioning on the credit market in line with the
defined credit strategies;
• the most qualifying elements in the credit process, with specific reference:
– to the definition of risk categories to be assigned to customers, according to the different risk
profile that can be attributed to the technical loan forms involved, closely linked to the operative
processes connected with the “Group System of delegated powers” on the assumption of the
credit risk;
– to the examination of all useful information, both internal and external, functional to the
determination of the customer's credit rating and future solvency of the debtor, measuring the
credit risk firstly using normal sources for the repayment of exposure and, thereafter,
considering the use of the accessory guarantees connected with the credit intervention;
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• the monitoring and review of the model used to define credit faculties or the matrix of faculties for
granting credit and the related limits;
• the structuring of the credit process, in its comprehensive cycle, into two macro processes of
“investigation and disbursement of credit” and “monitoring and collection of debt”.
On an operative level, the various Group companies structure the specific operating procedures for the
application of credit rules into Organised Procedures or Operative Notes.
Within the Banca Ifis Group, the Corporate Bodies of the Bank and the subsidiaries play a key role in managing
and controlling credit risk, ensuring an appropriate supervision of credit risk within the scope of their
responsibilities by identifying strategic guidelines as well as risk management and control policies, assessing
their efficiency and effectiveness over time, and defining the duties and responsibilities of the corporate
functions involved in the relevant processes.
Under the current organisational structure, specific central areas are involved in credit risk management and
governance, ensuring, with the appropriate level of segregation, the performance of management operations as
well as first and second line of defence controls by adopting adequate processes and IT applications.
Overall, despite some differences deriving from the various products/portfolios, the lending process follows a
shared organisational approach with various operational stages and roles, responsibilities, and controls at
different levels.
In 2021, Banca Ifis's organisational structure consisted of the following Business Units, dedicated to different
activities, centralised in the Co-General Manager Chief Commercial Officer:
• Commercial Italy, the organisational unit that provides both short- and medium/long-term financing
services for Italian firms;
• Pharmacies, the organisational unit that provides financing services for Italian pharmacies that are
either developed internally or referred by the sales network of the subsidiary Credifarma;
• Tax Receivables, the organisational unit dedicated to purchasing tax receivables, mainly from
companies in insolvency proceedings or liquidation;
• Corporate Finance, the organisational unit dedicated to structured finance transactions or investments
in performing non-financial companies and intermediaries;
• Leasing and Rental, the organisational unit dedicated to offering and managing leasing and renting
products;
• Insurance Development, the organisational unit dedicated to the supply of insurance products;
• Marketing and Business Strategy, organisational unit that deals with the planning and monitoring of the
commercial production and development of specific commercial campaigns, identifying the relevant
target, the contact channels and monitoring tools;
• Pharma, the organisational unit dedicated to purchasing and managing receivables due from local health
agencies and hospitals.
Finally, at the reporting date the lending process included the operations of the following subsidiaries:
• Ifis Npl Investing S.p.A. (formerly Ifis Npl S.p.A.), company dedicated to the acquisition and transfer of
non-performing loans, mainly originated by financial institutions and banks;
• Ifis Npl Servicing S.p.A. (formerly Gemini S.p.A.), company specialising in the management of NPLs and
servicing and recovery activities on behalf of third parties;
• Ifis Real Estate S.p.A., company dedicated to the real estate business at the service of the subsidiaries
Ifis Investing S.p.A. and Ifis Npl Servicing S.p.A.;
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• Cap.Ital.Fin. S.p.A., which provides salary- or pension-backed loans as well as salary or pension
deductions and distributes financial products such as mortgages and personal loans;
• Credifarma S.p.A., the reference for pharmacies when it comes to advances, medium- and long-term
loans, equipment leases, and financial services;
• Ifis Finance Sp. z o.o. and Ifis Finance I.F.N. S.A., factoring companies operating in Poland and Romania
respectively;
• Ifis Rental Services S.r.l., an unregulated entity specialising in operating leases;
• Farbanca S.p.A., banking operator mainly targeting the world of pharmacies and health.
Each organisational unit develops and manages business relationships and opportunities in its respective
segment by working together with the Branches located throughout Italy, in accordance with the strategic
guidelines and objectives set by the Board of Directors.
As for the lending process, each business unit identifies the opportunities for new transactions in accordance
with the lending policies in force and the defined risk appetite; in this context, it examines loan applications and
formalises a proposal to be submitted to the competent decision-making bodies, ensuring lending policies and
controls are implemented correctly and analysing the applicant's creditworthiness in accordance with existing
internal regulations.
The proposals to grant lines of credit and/or purchase receivables are submitted to the competent decision-
making bodies, which, based on the powers delegated to them, express their decision - which always refers to
the overall exposure towards the counterparty (or any related groups).
Banca Ifis's Branches have no independent decision-making power for the purposes of assuming credit risk;
Branches manage ordinary operations with customers under the constant monitoring of the central structures
in accordance with the limits and procedures established by the Head Office's competent bodies.
In carrying out their operations, the subsidiaries can independently take certain decisions within the operational
and organisational limits defined by the Parent company Banca Ifis.
The line of credit is then finalised: the Bank finalises the agreement, obtains guarantees, if any, and grants the
credit line. Throughout these stages, the business units are aided by specific supporting units responsible for
preparing the agreement in accordance with the terms of the approval as well ensuring all activities leading to
the granting of the credit facility are properly carried out.
The operational management of receivables, carried out for performing customers, mainly consists in the
ordinary management and monitoring conducted by dedicated structures at each of the Group's companies with
the aim of constantly and pro-actively reviewing borrowers. In addition, a specific organisational unit within the
Parent company performs monitoring activities at the Group level to identify counterparties with performance
issues, so as to anticipate problems and provide adequate reporting to the competent corporate functions.
If the credit position is in an objective situation of distress, it is transferred to specific functions specialised in
managing and recovering non-performing exposures.
The process for the acquisition of non-performing loan portfolios adopted by the structures of the Npl Segment
consists of similar stages that can be summarised as follows:
• origination: the Bank identifies the counterparties from which it plans to purchase the portfolios and
assesses the economic expediency of said transactions;
• due diligence, as part of which highly-skilled analysts assess the quality of the portfolio being transferred
and the relevant organisational impact. Once the due diligence is completed, the Group sets the terms
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and conditions for offering/acquiring the receivables portfolio and how to manage it (individual or
collective method), assessing the relevant impact on operating structures;
• approval: this stage includes the preparation of the file, the decision-making process, and the
implementation of the approval by the competent decision-making body;
• finalisation: the parties prepare and finalise the purchase agreement, and the relevant consideration is
paid.
Purchases are made directly by originators and/or SPVs (primary market) or, in some circumstances, by
operators who have purchased on the primary market and who intend to dispose of their investment for various
reasons (secondary market). Receivables - deriving from traditional consumer credit operations, credit cards and
special purpose loans - are mainly unsecured; there are also current account balances in the event of transfers
by banks.
Right after the acquisition, pending the completion of information retrieval operations to help decide the most
appropriate debt recovery method, the receivable is classified in a so-called “staging” area and measured at cost
with no contribution to profit or loss.
After this phase, which normally lasts 6-12 months, the positions are directed towards the form of management
most appropriate to their characteristics (non-judicial and judicial operations), which carries out an activity
closely related to the transformation into paying positions and the collection of receivables.
Collection operations for receivables deriving from purchases of distressed retail loans are the responsibility of
resources within the subsidiary Ifis Npl Investing S.p.A. and Ifis Npl Servicing S.p.A., as well as of a broad and
proven network of debt collection companies and financial agents operating across Italy.
The non-judicial operations consist mainly in the activation of the credit through the debtor's subscription of
bills of exchange or voluntary settlement plans; the judicial operations consist, instead, in the transformation
through legal action aimed at obtaining from the court the garnishment order of one-fifth of the pension or salary
(the existence of which is the necessary prerequisite for the start of this form of transformation) or the sale on
the market of the asset to guarantee the credit (secured management). Specific information regarding these
operations is provided below.
Finally, there is also an assessment of the expediency of selling non-performing loan portfolios, mainly
represented by processing codes, to be submitted for approval to the competent decision-making bodies,
consistently with the established profitability targets and after analysing the relevant accounting, reporting,
legal, and operational impacts. To do so, it relies on the in-depth inquiries conducted by the Parent company's
competent business functions within their area of expertise.
Non-judicial operations
As for the positions not eligible for judicial operations, after completing the groundwork for processing them,
they are classified in a “collective” portfolio pending that the recovery process through call centres or recovery
networks can culminate with a collection of settlement plans referred to above (in the form of a
proposal/acceptance from customer to bank). At this stage, the positions are measured at amortised cost,
calculated as the present value of expected cash flows determined on the basis of a proprietary statistical model
developed by the Risk Management function on the basis of historical internal data, referred to as “curve model”;
this model projects collection expectations onto clusters of homogeneous receivables based on the recovery
profile historically observed (macro region, amount of credit, seniority of the file with respect to the DBT date,
transferor), in addition to prudential adjustments, such as, by way of example, the cap of simulated cash flows
for debtors who are older than the life expectancy present in the mortality tables provided by Istat. This method
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of valuing debt collection flows means that the expected collection profile is decreasing as time passes with
respect to the date of purchase of the credit, until the asset value of the credit is reduced to zero when it reaches
the tenth year from the date of purchase.
The curve model during 2021 has been refined as the models are reviewed biennially in order to lengthen and
update the time series, verify cluster tightness and statistical robustness, take into account any new
management methods, and evaluate macroeconomic effects such as, at this time in history, Covid-19.
Expectations of collection also take into account the probability of obtaining a settlement plan net of the relative
probability of default.
There are two types of settlement (collection) plans that can be entered into:
• bills of exchange: that is, the set of credit positions for which the debtor has signed a settlement plan
supported by the issue of bills of exchange. It is specified that such plans a form of recovery now residual
and rarely used in recent years;
• Manifestations of Will (MdV): those practices for which the recovery process has led to the collection of
a voluntary formalised settlement plan by the debtor.
The moment the position obtains a paying settlement plan (“active plans”), i.e. after having observed the
payment of at least three times the value of the average instalment of the plan, the cash flows of the “curve
model” are replaced by the cash flows of the “deterministic model”, which projects the future instalments of the
settlement plan agreed with the debtor net of the historically observed default rate and taking into account also
in this case a cap to the simulated cash flows if the age of the debtor exceeds what is indicated in the mortality
tables of Istat in relation to life expectancy.
Positions that do not obtain a paying settlement plan remain valued by means of the “curve model”; this means
that as time passes, the probability of collection is reduced also by means of the plan and consequently the
expected cash flows are reduced down until zeroing.
During FY 2021, management took part in a new closure method, known as “balance and write-off of positions”,
in order to anticipate recovery while granting a reduction in the amount due (write-off) to the debtor. This method
of collection does not replace the methods described above, but involves certain campaigns on specific
positions identified by management.
Judicial operations
Positions that meet the requirements (presence of a job or a pension) for judicial processing are initiated in the
relevant operations. This also includes (minority) practices that are processed in a logic of real estate
attachment of property.
Judicial processing, understood as real estate enforcement action against third parties, is characterised by
several legal steps aimed at obtaining an enforcement title, which as a whole usually last 18-24 months (the
durations and the relative volatility depend on the court in which the case is handled) and are thus as follows:
• obtaining a court order,
• writ,
• attachment of property and
• garnishment order.
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These positions are measured at amortised cost, calculated as the present value of expected cash flows
determined on the basis of two proprietary models developed by the Risk Management function on the basis of
historical internal data, referred to as “pre-garnishment order Legal Factory model”.
The pre-garnishment order model during 2021 has been recalibrated because, just as was the case for the curve
models, the models are reviewed biennially in order to lengthen the time series, verify cluster tightness and
statistical robustness, take into account any new management methods, and evaluate macroeconomic effects
such as, at this time in history, Covid-19.
In addition to the above, judicial operations involve also collection efforts, i.e. foreclosure proceedings, which
consist of several stages and apply to portfolios originated in corporate, banking, or real estate segments.
2.2 Management, measurement and control systems
Credit risk is constantly monitored by means of procedures and instruments that can rapidly identify particular
anomalies.
Over time, the Banca Ifis Group has implemented instruments and procedures allowing to specifically evaluate
and monitor risks for each type of customer and product.
If the applicant passes the evaluation process and is granted a credit facility, the Group starts monitoring the
credit risk on an ongoing basis, ensuring repayments are made on time and the relationship remains regular,
reviewing the information that the Italian banking system reports to the Central Credit Register or select
databases as well as the reputational profile, and examining the underlying causes for each one of these aspects.
Concerning portfolio monitoring operations, as previously mentioned, receivables due from customers are
monitored by specific units within the mentioned business units that are responsible for constantly and
proactively reviewing borrowers (first line of defence); a specific organisational unit conducts additional
monitoring at a centralised level, using mainly performance analysis models - including models developed by the
Parent's Risk Management function - to identify any potential issues through specific early warning indicators.
Credit risk exposures to companies are assigned a rating based on models developed in-house. These models
were brought into production early 2021 and are differentiated by segment to ensure that appropriate models
are applied on homogeneous population from the point of view of characteristics and risk level. There are
therefore models for corporations (Corporate models), differentiated by two size clusters, and a model for
partnerships and sole proprietorships (Small Business models).
Risk Management plays a crucial role as part of the second line of defence in measuring and monitoring
operations.
Concerning credit risks, the Risk Management function:
• oversees, monitors and assesses credit risks, carrying out audits and analysis in accordance with the
relevant guidelines; specifically, it:
– assesses credit quality, ensuring compliance with credit guidelines and strategies by
continuously monitoring credit risk indicators;
– constantly monitors exposure to credit risk and compliance with the operating limits assigned
to the operating structures in relation to the assumption of credit risk;
– verifies, by means of second-level controls, the correct implementation of performance
monitoring on individual exposures, in particular on impaired exposures, and assesses the
consistency of classifications and the adequacy of provisions;
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– monitors exposure to concentration risk and the performance of exposures classified as Large
Exposures;
• performs quantitative analyses to support the business units in using risk measures;
• oversees the supervision of the value of collateral as well as personal and financial guarantees.
Within the individual Group companies, special attention is paid to the monitoring of credit risk. In 2021, on the
subsidiaries Credifarma, Cap.Ital.Fin and Farbanca:
• the attention and critical threshold of managerial indicators were estimated and, on a monthly basis, any
overshooting of such monitored;
• quarterly stress testing was carried out with a view to determining the effects on internal capital of the
credit risk and reserves (both generic and specific) of worsening, determined in a judgemental manner,
of the probability of default;
• monthly (starting in May 2021 for Farbanca) verification and proper credit monitoring activities were
carried out.
The Banca Ifis Group pays particular attention to the concentration of credit risk with reference to all the Group's
companies, both at an individual and consolidated level. Banca Ifis's Board of Directors has mandated the Top
Management to take action to contain major risks. In line with the Board of Directors' instructions, all positions
at risk which significantly expose the Group are systematically monitored.
Concerning the credit risk associated with bond and equity investments, the Group constantly monitors their
credit quality, and Parent company Banca Ifis's Board of Directors and Top Management receive regular reports
on this matter.
In the context of Basel 3 principles for calculating capital requirements against first-pillar credit risks, Banca Ifis
chose to adopt the Standardised Approach. To calculate capital requirements for single-name concentration
risk, which falls under second-pillar risks, the Group adopts the Granularity Adjustment method as per Annex B,
Title III of Circular no. 285 of 17 December 2013, with a capital add-on calculated using the ABI method to
measure geo-segmental concentration risk.
In order to assess its vulnerabilities in terms of capital and liquidity management, the Parent company Banca
Ifis has developed quantitative and qualitative techniques with which it assesses its exposure to exceptional but
plausible events. These analyses, known as stress tests, measure the impact in terms of risk deriving from a
combination of changes in economic-financial variables under adverse scenarios on the Banks and its
subsidiaries. These analyses significantly concern credit risk.
Stress analyses make it possible to verify the Group's resilience, simulating and estimating the impacts of
adverse situations, and provide important indications regarding its exposure to risks and instruments, the
adequacy of the related mitigation and control systems and its ability to cope with unexpected losses, also from
a prospective and planning perspective.
For regulatory purposes, the Parent company Banca Ifis conducts stress tests when defining the Risk Appetite
Framework and preparing the Recovery Plan as well as the ICAAP and ILAAP report at least on an annual basis,
as required by applicable prudential supervisory regulations. In this context, it assesses, among other things, the
sustainability of lending strategies under adverse market conditions.
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2.3 Measurement of expected credit losses
According to IFRS 9, all financial assets not measured at fair value through profit or loss, represented by debt
securities and loans, and off-balance sheet exposures (commitments and guarantees granted) must be subject
to the impairment model based on expected losses (ECL - Expected Credit Losses).
The most significant aspects that characterise this approach, concern:
• the classification of loans into three different levels (or “Stages”) to which different methods correspond
for calculating the losses to be recorded; Stage 1 includes performing positions that have not undergone
a significant increase in credit risk otherwise placed in Stage 2; Stage 3 includes all positions classified
as non-performing, bad loans, unlikely-to-pay, non-performing past due in accordance with the criteria
and rules specifically adopted by the Group;
• the calculation of the expected loss calculated at 12 months for Stage 1 or for the entire useful life of
the credit (lifetime) for Stages 2 and 3;
• the requirement to use a Point-in-Time, rather than a Through-the-Cycle, approach for regulatory
purposes;
• forecast information regarding the future dynamics of macroeconomic factors (forward looking)
considered to have the potential to influence the debtor's situation.
In this context, the Group has adopted a method for determining the “significant” increase in credit risk with
respect to the initial recognition date, which involves classifying the instruments in Stages 1 and 2, combining
statistical (quantitative) and performance (qualitative) elements, as part of the estimate of impairment of
performing loans.
To identify the significant increase in credit risk, the Banca Ifis Group applies the following quantitative and
qualitative transfer criteria to the loan portfolio according to the type of counterparty defined by segmenting
receivables into portfolios:
• The only quantitative transfer criterion is the Significant Deterioration for which, to identify the
“significant increase in credit risk” on exposures within rated portfolios (Italian companies), the Group
used an approach backed by quantitative analyses, under which the exposure is allocated to Stage 2 if
the change in the one-year PD between the origination and the measurement date exceeds a given
threshold.
• Qualitative transfer criteria
– “Rebuttable presumption – 30 days past due”: the Standard establishes that, regardless of how
the entity assesses significant increases in credit risk, there is a rebuttable presumption that the
credit risk on a financial asset has increased significantly since initial recognition when
contractual payments are more than 30 days past due. The entity can rebut this presumption if
it has reasonable and supportable information that demonstrates that the credit risk has not
increased significant since initial recognition even though the contractual payments are more
than 30 days past due. However, the Ifis Group has not pursued this option;
– Forbearance: according to this criterion, a financial instrument is allocated to Stage 2 when the
Group classifies the exposure as forborne;
– Watchlist: this requires identifying qualitative deterioration criteria defined by the Group as part
of the process for defining especially risky positions during credit monitoring.
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According to IFRS 9, an entity may assume that the credit risk on a financial instrument has not increased
significantly since initial recognition if the financial instrument is determined to have low credit risk at the
reporting date, that is:
• it has a low risk of default;
• the borrower is considered, in the short term, to have a strong capacity to meet its obligations;
• the lender expects, in the longer term, that adverse changes in economic and business conditions might
reduce the ability of the borrower to fulfil its obligations.
The measurement of expected credit losses (ECLs) accounts for cash shortfalls, the probability of default, and
the time value of money. Specifically, the Group measures the loss allowance for the financial instrument as:
• expected losses at 12 months for positions that have not suffered a significant deterioration in
creditworthiness (Stage 1); i.e. an estimate of the non-payments resulting from possible default events
in the following 12 months, weighted by the probability that such events will occur;
• expected “Lifetime” losses for positions that have suffered a significant deterioration in creditworthiness
(Stage 2); in this case, it estimates the cash shortfalls resulting from default events that are possible
over the expected life of the financial instrument, weighted by the probability of that default occurring
and discounted at the measurement date (ECL).
To ensure its collective impairment calculations are in the closest possible compliance with regulatory
requirements, the Group has defined a specific methodological framework. This involved developing quantitative
methods and analyses based on proprietary datasets as well as qualitative methods and analyses to essentially
model the following risk parameters and the methodological aspects relevant to the calculation of impairment
under IFRS 9:
• estimated Probability of Default (PD);
• estimated Loss Given Default (LGD);
• estimated Exposure at Default (EAD);
• definition of the stage allocation transfer logic;
• calculation of the expected credit losses including point-in-time factors;
• calculation of the expected credit losses including forward-looking elements.
Concerning the exposures to Banks, Central Governments, Public-Sector Entities (low default portfolios) and
foreign counterparties, the Group used default rates associated with migration matrices based on public
information provided by the ratings agency Moody's or external providers.
On some subsidiaries, even though the collective write-downs are determined using a lump sum approach, and
therefore according to the level of risk calculated (PD, LGD and EAD), on the basis of internal evidence, the
analytical write-downs may use different calculation methods (by way of example, adopting a judgemental
approach rather than a lump sum approach), on the basis of the legal experience accrued on forecast cash flow
on default positions. The Risk Management Department periodically compares the balance of the provisions for
impairment with the estimated losses expected, obtained using the risk levels forecast on the basis of internal
evidence, which can be traced to the same impaired positions.
As for the securities portfolio, considering the methodological complexity associated with developing a
dedicated model, the Group decided to use the calculation of impairment under IFRS 9 that Cedacri provides at
consortium level (i.e. estimating risk parameters, calculating the Stage allocation and ECLs). Specifically, the
formula used to calculate the impairment of the tranches allocated to Stage 1 and 2 is consistent with the
approach to credit exposures. The Stage allocation of performing debt securities requires using an external
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rating of the issue or, if this is not available, the issuer; in short, the securities are allocated to the different Stages
based on specific transfer criteria associated with this type of portfolio. Exposures are allocated to Stage 3 if
credit risk has deteriorated to the point that the security is considered impaired, i.e. classified as non-performing,
including in the case of financial instruments in default.
In developing the above methods, the Group has considered multiple solutions, the current and prospective
complexity of its portfolio, as well as how to maintain and update risk parameters.
A multi-period approach to risk parameters has been developed exclusively for the PD; the other credit risk
parameters (LGD and CCF) are applied on a constant basis until maturity. LGD has been estimated on the basis
of proprietary historical data with the exception of the counterparties Banks, Central Governments, and Public-
sector Entities (excluding municipalities), for which, in the absence of objective historical data, a sector LGD has
been estimated.
The Group has adopted econometric models (based on the stress test framework - “satellite” models), aimed at
forecasting the evolution of the institute’s risk factors (i.e. mainly PD, LGD, EAD and migrations between statuses
for credit risk) on the basis of a joint forecast of the evolution of the economic and financial indicators (see
macroeconomic scenario).
The satellite models meet the need to identify the existence of a significant relationship between the general
economic conditions (i.e. macroeconomic and financial variables) and a proxy variable of the risk factor (i.e.
target variable) e.g. the credit rating of counterparties (which represents the respectively probability of default
as a summary of the PD factor) and the recovery rates (summarising the LGD factor for bad loans).
The Risk Management Department has included the forecasts defined by its satellite models in the structures
at the end of the PD lifetime. For the purpose of applying macroeconomic shifts, the migration matrices have
been defined between the different credit statuses of each perimeter and the scaling factors derived, to be
applied to the curves as per the defined method. Starting out, therefore, from an initial transition matrix, the
approach used allows for a stressed matrix to be obtained.
The satellite models developed for the PD have also been applied to the danger rate, used in LGD.
For Stage 3 exposures that are not individually tested for impairment, the Group defines a lifetime provision in
line with the concept of expected credit loss. Specifically concerning LGD, to calculate the collective losses for
Stage 3 exposures (mainly non-performing past due and unlikely-to-pay), the Group made certain adjustments
to ensure consistency with the measures used for performing loans.
Valuation of the significant increase in the credit risk (SICR)
Of the various measures in support of the economy that impact the valuation of the significant increase in credit
risk, we should certainly mention the concession of moratoriums. With the suspension of payments of
amortisation plans, the verification of past-due by more than 30 days in order to allocate to Stage 2, also ceases.
This led the Group to introduce a collective prudent correction for relations with counterparties operating in
certain segments considered as being at high risk of impact by Covid-19 (transport, tourism, catering,
automotive). This prudent measure has been adopted in order to incorporate the increase in risk expected in
those economic segments most impacted by the current pandemic crisis and consequent economic crisis.
Additional lump sum corrective measures have also been implemented for exposures relative to certain types of
medium/long-term loans, to date which are regular, but which are expected to be at higher risk in respecting the
amortisation plan envisaged following the economic impacts expected post Covid-19.
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Measurement of expected losses
With reference to the forward-looking information offering the inputs to the IFRS 9 provisioning process, through
the use of the satellite models reported previously, the Risk Management Department has updated the macro
economic scenarios following the evolution of the economic crisis linked to the spread of the Covid-19, also in
consideration of the recommendations given by the Supervisory Authorities. The information used by Banca Ifis
to update the forward looking impacts in the estimates of risk parameters comes from several institutions,
including the Bank of Italy and the BCE.
The choice was also made to update the probability of occurrence of the scenarios by leaving to the baseline
scenario the higher probability of occurrence (70%), reserving for the adverse scenario a probability of 25%,
higher than that associated with the improvement scenario (5%) due to the high uncertainty and considering the
continued limitations to movement and economic businesses.
During the third quarter of 2020, an additional correction was made in calculating the expected losses deriving
from lease operations on positions concerned by moratorium. The assets concerned by these transactions are
motor vehicles, commercial and industrial vehicles characterised by a deterioration of the asset typically in line
with the financial plan. The concession of the moratorium introduces a misalignment of more than 12 months
between the two curves, thereby reducing the degree of coverage of collateral to the lease credit and introducing
a higher risk of LGD in the event of customer default. The correction made aims to adjust the calculation of
expected loss to both the impacts described above and the increase in the default risk expected on the same
counterparties.
2.4 Credit risk mitigation techniques
Credit risk mitigation techniques include instruments that contribute to reducing the loss that the Group would
incur in the event of counterparty default; specifically, they refer to guarantees received from customers, both
collateral and personal, and to any contracts that may lead to a reduction in credit risk.
In general, as part of the process of granting and managing credit, for certain types of lines, the release by
customers of suitable guarantees to reduce their risk is encouraged. They can be represented by collaterals on
assets, such as pledges on financial assets, mortgages on real estate (residential/non-residential) and/or
personal guarantees (typically sureties) on a third party where the person (natural or legal) is the guarantor of
the customer's debt position in the event of insolvency.
In particular:
• as part of factoring operations, when the type and/or quality of factored receivables do not fully satisfy
requirements or, more generally, the invoice seller is not sufficiently creditworthy, the bank's established
practice is to hedge the credit risk assumed by the Group by obtaining additional surety bonds from the
shareholders or directors of the invoice seller. As for the account debtors in factoring relationships,
wherever the Bank believes that the elements available to assess the account debtor do not allow to
properly measure/assume the related credit risk, or the proposed amount of risk exceeds the limits
identified during the debtor’s assessment, the Bank adequately hedges the risk of default of the account
debtor. Guarantees issued by correspondent factors and/or insurance policies underwritten with
specialised operators are the main hedge against non-domestic account debtors in non-recourse
operations;
• in loans to businesses, where possible, suitable guarantees are acquired from the Central Guarantee
Fund or other companies coming under the public scope, such as SACE S.p.A.;
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• in regard to Structured Finance, collateral is acquired according to the counterparty's standing as well
as the term and type of the facility. Said collateral includes mortgage guarantees, liens on plant and
equipment, pledges, surety bonds, credit insurance, and collateral deposits;
• as for finance leases, the credit risk is mitigated by the leased asset. The lessor maintains the ownership
until the purchase option is exercised, ensuring a higher recovery rate in the event the client defaults;
• as for operations concerning distressed loans and purchases of tax receivables arising from insolvency
proceedings, as well as the relevant business model, generally no action is taken to hedge credit risks;
• salary-backed loans have low risk, considering the particular characteristics of this product: it requires
having insurance against the customer's risk of death and/or loss of employment as well as imposing a
lien on the Post-employment benefits earned by the customer as additional collateral for the loan.
• lending to pharmacies involves an advance as well as a transfer or debt collection mandate, with the
possibility of deducting subsequent advances from existing credit facilities.
In line with that established by the Liquidity Decree (Italian Decree Law no. 23 of 8 April 2020), the Group has
benefited from the guarantees offered by the state Guarantee Fund for the type of customer and loans envisaged
by the Decree, with cover that can reach 100%. This guarantee enables a reduction in the RWAs relative to the
credit risk, proportionally to the share of exposure covered by the Fund.
The acquired Npl portfolios include positions secured by mortgages on properties with a lower level of risk than
the total portfolio acquired.
When calculating the overall credit limit for an individual customer and/or legal and economic group, the Bank
considers specific criteria when weighing the different categories of risks and guarantees. Specifically, when
measuring collateral, it applies prudential “spreads” differentiated by type of guarantee.
The Group continuously verifies the quality and adequacy of the guarantees acquired on the loan portfolio, with
second level monitoring carried out by the Parent company’s Risk Management Department and carried out
under the scope of the Single File Review.
3. Non-performing credit exposures
3.1 Management strategies and policies
The Group adopts a business model that has peculiar features compared to most other Italian banking
institutions, which largely operate as general banks.
This peculiarity of the business is reflected in the processes and management structures, generating flows and
stock dynamics that are reflected in assets and related indicators.
Nonetheless, the Parent believes that adopting “systemic” operational and structural ratios, and maintaining its
indicators at the highest level of excellence, is a mark of quality and a value to be pursued as a specific goal in
order to strengthen its corporate structure as well as improve its internal processes.
Among these, the quality of assets is a top priority that must be expressed both in the ability to provide credit,
minimizing the risks of deterioration of exposures, and in the ability to manage non-performing exposures,
optimising recovery performance in terms of amount and timing of recovery.
In this sense, the Group's action is oriented in two directions:
• constant efforts to improve not only the processes for selecting and granting loans, but also the
processes for managing performing loans, referring, where appropriate, to the commercial and/or
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selection policies of individual transactions, in order to contain the generation of non-performing loans
in the best possible way;
• the definition of quantitative objectives (such as maximum limits) in terms of non-performing exposures
as well as pre-established actions to be implemented according to appropriate application criteria and
priorities, in order to ensure compliance with the established limits over time.
In managing these aspects, the Group must, however, necessarily take into account the different segments of
business and related types of credit, classifying solutions and actions consistent with the specificities of the
individual segments, in order to ensure the best result in terms of value protection and speed of solution.
In view of the above, the Group has maintained the following two indicators as performance indicators and
explicit objectives to be pursued with careful and proactive management when updating its annual operating
plan for the management of short and medium/long-term Npls, presented to the Supervisory Authority in March
2021:
• “gross Npe ratio”, consisting of the ratio of “gross non-performing exposures” to “total receivables due
from customers”;
• “net Npe ratio”, consisting of the ratio of “non-performing exposures net of related adjustments” to “total
receivables due from customers”.
With reference to receivables due from customers for cash in place at 31 December 2021, excluding the positions
stemming from the acquisition and management of non-performing exposures of third party originators
managed by the subsidiaries Ifis Npl Investing S.p.A. and Ifis Npl Servicing S.p.A., as well as the portfolios of
retail loans, also in consideration of the economic impacts deriving from the COVID-19 emergency situation, the
levels of Npe ratio are in line with respect to the objectives set when defining the projections of the 2022-2024
Business Plan. Regardless of the current outlook, the pursuit of the objective of a general limitation in the stock
of non-performing loans remains and is expected to take place through a differentiated strategy in relation to
the specificity of the individual portfolios concerned (taking into account the type of counterparty and the
specificity of the individual products). In general, the action that will be taken is essentially based on the
following goals, which it has been pursuing for some time now:
• containment of the default rate in order to reduce the inflow of non-performing positions by extending
and strengthening the monitoring of lending aimed at anticipating, and possibly preventing, deterioration
of positions;
• improvement of the “performing” rates of return through a more significant use of granting measures in
relation to counterparties that show signs of financial difficulty;
• leveraging the expertise within the Banca Ifis Group and the virtuous collection processes currently in
place to maximise collection rates;
• reducing the stock of non-performing loans by considering selective sales of individual significant
positions as well as applying existing write-off policies.
The positions that have deteriorated or present significant problems are handled directly by specific
organisational units established at each company of the Group, which:
• assess the counterparty's willingness and ability to repay the debt in order to establish the most
appropriate recovery strategy;
• manage judicial and non-judicial proceedings concerning debt collection operations;
• define potential modifications to the administrative status as well as the quantification of “doubtful
individual outcomes” for the positions assigned to it, submitting them to the competent decision maker;
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• monitor the amount of exposures classified as bad loans and the relevant debt collection operations.
3.2 Write-offs
As specified by IFRS 9, write-off is an event that results in derecognition when there is no longer a reasonable
expectation that the financial asset will be recovered. It may occur before the lawsuit for recovery of the financial
asset has concluded and does not necessarily imply a waiver of the legal right of the bank to collect the debt.
A receivable is derecognised when it is considered unrecoverable and the Group forfeits the legal right to collect
it. For instance, this occurs when insolvency proceedings are settled, the borrower dies without heirs, a court
issues a final ruling that the debt does not exist, etc.
As for total or partial derecognition without a forfeiture of the right to collect the receivable, to avoid continuing
to recognise receivables that, even though they are still managed by debt collection structures, are highly unlikely
to be recovered, at least every half-year, the Bank identifies the exposures to be derecognised that have all
specific characteristics defined for each product.
The derecognition of bad debts is a good management practice. It allows structures to concentrate on
receivables that are still recoverable, guarantees an adequate representation of the ratio between anomalous
receivables and total receivables and ensures a correct representation of balance sheet assets.
At an organisational level, the operating methods used by the various Group structures to eliminate credit
exposures and to report to Top Management are described in detail in the company's credit monitoring and
recovery policies.
3.3 Purchased or originated credit impaired financial assets
Organisational aspects
“Purchased or Originated Credit Impaired (POCI) Financial Assets” means the exposures that were non-
performing at the date they were acquired or originated.
POCI financial assets include also the exposures acquired as part of sales (of either individual assets or
portfolios) and business combinations.
Based on the Business Model within which the asset is managed, POCI financial assets are classified as either
Financial assets measured at fair value through other comprehensive income or Financial assets measured at
amortised cost. As previously mentioned, interest is accounted for by applying a credit-adjusted effective
interest rate, i.e. the rate that, upon initial recognition, discounts all the asset's estimated future cash collections
considering also lifetime expected credit losses (ECL).
The Bank regularly reviews said expected credit losses, recognising impairment losses or gains through profit
or loss. Favourable changes in lifetime ECLs are recognised as an impairment gain, even if said lifetime ECLs are
lower than those incorporated into cash flow estimates at initial recognition.
“Purchased or Originated Credit Impaired Financial Assets” are usually allocated to Stage 3 at initial recognition.
If, as a result of an improvement in the counterparty's credit standing, the assets become “performing”, they are
allocated to Stage 2.
These assets shall never be allocated to Stage 1, as the expected credit loss must always be calculated over a
time horizon equal to their remaining useful life.
“Acquired impaired assets” include loans acquired by the subsidiaries Ifis Npl Investing S.p.A. and Ifis Npl
Servicing S.p.A. acquired at values significantly lower than their nominal amount, as well as impaired assets
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resulting from the various IFRS 3 business combinations carried out by the Banca Ifis Group (such as those
relating to the former GE Capital Interbanca Group, the former Fbs Group, the companies Credifarma S.p.A.,
Cap.Ital.Fin. S.p.A. and Farbanca S.p.A. as well as the former Aigis Banca business). These impaired assets are
included within the POCI perimeter on the basis of the existence, for each individual relationship, of impaired
credit quality at the time of the relative acquisition, as required by IFRS 9.
Quantitative information
The outstanding nominal amount of Ifis Npl Investing S.p.A.'s proprietary portfolio was approximately 21.831
million Euro. At the time of purchase, the nominal amount of these receivables was approximately 22.743 million
Euro, and they were acquired for approximately 1.281 million Euro, i.e. an average price equal to approximately
5,63% of the historical book value. During the first half of 2021 approximately 115 million Euro were purchased
for a consideration of approximately 15,9 million Euro, corresponding to an average price of 13,79%, whilst during
the second half of the year approximately 3.607 million Euro were purchased for a consideration of
approximately 161,4 million Euro, corresponding to an average price of 4,47%. The overall portfolio of non-
performing exposures purchased and not yet collected has an overall weighted average life of around 41 months
compared to their acquisition date.
As regards the individual phases of processing of Npl receivables, as described in paragraph “2.1 - Organisational
aspects” above in relation to credit risk, the carrying amount at 31 December 2021 of the positions in out-of-
court management comes to 435 million Euro, whilst the carrying amount of the positions under legal
management
1
comes to 909 million Euro.
Finally, Ifis Npl Investing S.p.A. seizes market opportunities in accordance with its business model by selling
portfolios of positions yet to be processed to third parties. In 2021, Ifis Npl Investing S.p.A. completed 10 sales
of portfolios to leading players whose business is purchasing NPLs. Overall, receivables were sold with an
outstanding nominal amount of approximately 639,8 million Euro, for an overall consideration of about 18,4
million Euro.
4. Financial assets subject to business renegotiations and forborne exposures
For information about the effects deriving from the measures implemented in support of the economy by the
government and adopted by the Group, please refer to the paragraphs above.
Throughout the life of the financial assets, and specifically of receivables, the parties to the agreement
subsequently agree to modify the original contractual terms. When, during the life of an instrument, the
contractual terms are modified, the Group shall assess whether the original asset must continue to be
recognised (modification without derecognition) or, conversely, the original instrument must be derecognised
and a new financial instrument recognised in its place.
Generally, modifications of a financial asset result in its derecognition and the recognition of a new asset when
they are “substantial”. The “substantiality” of the modification shall be assessed considering both qualitative
and quantitative factors. In some cases, it will become apparent, without conducting complex analyses, that the
changes introduced substantially modify the characteristics and/or contractual cash flows of a specific asset,
whereas in other cases, additional analyses (including quantitative analyses) will be required to appreciate their
impact and assess whether to derecognise the asset and recognise a new financial instrument.
1
Legal management including garnishment actions with third parties, corporate positions, MIPOs and bankruptcy procedure.
203
Banca Ifis | 2021 Consolidated financial statements and report
The (quali-quantitative) analyses aimed at defining the “substantiality” of the contractual modifications made to
a financial asset shall therefore consider:
• the purposes for which the modifications were made: for instance, renegotiations for business reasons
and forbearance measures due to the counterparty's financial difficulties:
– the former, intended to “retain” the customer, involve a borrower that is not in financial distress.
This case includes all renegotiations aimed at adjusting the cost of debt to market conditions.
These transactions result in changes to the original contractual terms, usually at the request of
the borrower, that concern aspects associated with the cost of debt, giving rise to an economic
benefit for the borrower. Generally, the Group believes that, whenever it enters into a
renegotiation in order to avoid losing the client, this renegotiation shall be considered as
substantial, since, in its absence, the customer could obtain financing from another intermediary
and the bank would see estimated future revenue decline;
– the latter, offered for “credit risk reasons” (forbearance measures), are part of the Group's
attempt to maximise the recovery of the cash flows of the original receivable. Following the
modifications, usually the underlying risks and rewards have not been substantially transferred:
therefore, the accounting presentation that provides the most relevant information to users of
the financial statements (expect for the following discussion about objective factors) is the one
made through “modification accounting” - whereby the difference between the carrying amount
and the present value of modified cash flows discounted at the original interest rate is
recognised through profit or loss - rather than derecognition;
• the existence of specific objective factors affecting the substantial modifications of the characteristics
and/or contractual cash flows of the financial instrument (including, but not limited to, the modification
of the type of counterparty risk the entity is exposed to) that are believed to require derecognising the
asset because of their impact (estimated to be significant) on the original contractual cash flows.
204
Banca Ifis | 2021 Consolidated financial statements and report
Quantitative information
A. Credit quality
A.1 Non-performing and performing credit exposures: amounts, impairment losses, trend, and
economic breakdown
A.1.1 Prudential consolidation - Breakdown of financial assets by past due buckets (carrying amounts)
Portfolios/risk
stages
Stage 1
Stage 2
Stage 3
Purchased or
originated impaired
From 1 day to 30
days
From over 30
days to 90 days
Over 90 days
From 1 day to 30
days
From over 30
days to 90 days
Over 90
days
From 1 day to 30
days
From over 30
days to 90 days
Over 90 days
From 1 day to 30
days
From over 30
days to 90 days
Over 90 days
1. Financial assets
measured at
amortised cost
92.106
1.054
6.690
8.661
52.198
157.843
6.203
6.374
135.112
15
15
6.476
2. Financial assets
measured at fair
value through other
comprehensive
income
2.339
-
-
-
-
-
-
-
-
-
-
-
3. Financial assets
under disposal
-
-
-
-
-
-
-
-
-
-
-
-
Total 31.12.2021
94.445
1.054
6.690
8.661
52.198
157.843
6.203
6.374
135.112
15
15
6.476
Total 31.12.2020
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
n.d.
205
Banca Ifis | 2021 Consolidated financial statements and report
A.1.2 Prudential consolidation - Financial assets, loan commitments and financial guarantees granted: overall impairment losses/reversals and overall provisions
Reason/Risk stage
Overall impairment losses/reversals
Total provisions on loan
commitments and financial
guarantees granted
Tot.
Stage 1 assets
Stage 2 assets
Stage 3 assets
Purchased or originated impaired
financial assets
Due from banks and
central banks on demand
Financial assets measured at amortised cost
Financial assets at fair value through other
comprehensive income
Financial assets under disposal
of which: individual impairment
of which: collective impairment
Due from banks and
central banks on demand
Financial assets measured at amortised cost
Financial assets measured at fair value through
other comprehensive income
Financial assets under disposal
of which: individual impairment
of which: collective impairment
Due from banks a
nd central banks on demand
Financial assets measured at amortised cost
Financial assets measured at fair value through
other comprehensive income
Financial assets under disposal
of which: individual impairment
of which: collective impairment
Financial
assets measured at amortised cost
Financial assets measured at fair value through other
comprehensive income
Financial assets under disposal
of which: individual impairment
of which: collective impairment
Stage 1
Stage 2
Stage 3
Commitments to
disburse funds and fin. guarantees
issued impaired acquired or originated
Opening balance of total
impairment losses/reversals of
impairment losses
936
63.072
218
-
-
64.226
-
5.635
-
-
-
5.635
-
225.814
-
-
225.814
-
-
-
-
-
-
3.235
2
7.685
48
306.645
Increases from purchased or
originated financial assets
6
2.287
-
-
-
2.293
-
226
-
-
-
226
-
15.331
-
-
15.331
-
X
X
X
X
X
-
-
110
-
17.960
Derecognitions other than write-
offs
-
(1.263)
-
-
-
(1.263)
-
(164)
-
-
-
(164)
-
(48.571)
-
-
(48.571)
-
-
-
-
-
-
1
-
(623)
-
(50.620)
Net credit risk losses/reversals
(+/-)
(445)
(7.958)
32
-
-
(8.371)
-
12.653
-
-
-
12.653
-
42.855
-
-
42.855
-
(9.253)
-
-
(9.809)
556
81
2.108
1.033
33
41.139
Contractual modifications
without derecognition
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Changes in estimation method
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Write-offs not recognised directly
through profit or loss
-
-
-
-
-
-
-
-
-
-
-
-
-
(33.901)
-
-
(33.901)
-
-
-
-
-
-
-
-
-
-
(33.901)
Other changes
469
5.297
1
-
-
5.767
-
(413)
-
-
-
(413)
-
(14.150)
-
-
(14.150)
-
9.253
-
-
9.809
(556)
(315)
(28)
(1.366)
(66)
(1.318)
Closing balance of total
impairment losses/reversals of
impairment losses
966
61.435
251
-
-
62.652
-
17.937
-
-
-
17.937
-
187.378
-
-
187.378
-
-
-
-
-
-
3.002
2.082
6.839
15
279.905
Reversals from collections on
financial
assets written off
-
-
-
-
-
-
-
-
-
-
-
-
-
(13.881)
-
-
(13.881)
-
-
-
-
-
-
-
-
-
-
(13.881)
Write-offs recognised directly
through
profit or loss
-
-
-
-
-
-
-
-
-
-
-
-
-
24.534
-
-
24.534
-
207.419
-
-
207.419
-
-
-
-
-
231.953
Banca Ifis | 2021 Consolidated financial statements and report
206
A.1.3 Prudential consolidation - Financial assets, loan commitments and financial guarantees granted:
transfers between different credit risk stages (gross and nominal amounts)
Portfolios/risk stages
Gross amounts/nominal amount
Transfers between
Stage 1 and Stage 2
Transfers between
Stage 2 and Stage 3
Transfers between
Stage 1 and Stage 3
From Stage 1
to Stage 2
From Stage 2
to Stage 1
From Stage 2
to Stage 3
From Stage 3
to Stage 2
From Stage 1
to Stage 3
From Stage 3
to Stage 1
1. Financial assets measured at amortised cost
498.563
2.723
54.275
6.929
38.687
44.984
2. Financial assets measured at fair value through other
comprehensive income
-
-
-
-
-
-
3. Financial assets under disposal
-
-
-
-
-
-
4. Loan commitments and financial guarantees granted
33.376
303
1
274
406
773
Total 31.12.2021
531.939
3.026
54.276
7.203
39.093
45.757
Total 31.12.2020
174.358
161.469
17.252
46.141
70.714
29.756
207
Banca Ifis | 2021 Consolidated financial statements and report
A.1.3a Loans concerned by COVID-19 support measures: transfers between different credit risk stages
(gross amounts)
The table below shows the gross value of the loans concerned by moratorium or other COVID-19 concessions,
or which constitute new liquid funds granted by means of public guarantee mechanisms, split by portfolio
(amortised cost and fair value through other comprehensive income), when the risk bracket into which the
exposures fall at year end differs from that in which they were included at the start of the year (or at the initial
booking date if after the start of the year).
Portfolios/risk stages
Gross amounts/nominal amount
Transfers between
Stage 1 and Stage 2
Transfers between
Stage 2 and Stage 3
Transfers between
Stage 1 and Stage 3
From Stage 1
to Stage 2
From Stage 2
to Stage 1
From Stage 2
to Stage 3
From Stage 3
to Stage 2
From Stage 1
to Stage 3
From Stage 3
to Stage 1
A. Loans measured at amortised cost
27.300
2.218
1.723
-
2.244
219
A.1 concerned by concessions in compliance with the
GLs
1.002
521
-
-
-
-
A.2 subject to existing moratorium measures
no longer compliant with GL and not assessed as
subject of concession
9.861
1.697
1.265
-
1.980
134
A.3 concerned by other concessions
-
-
-
-
-
-
A.4 new funding
16.437
-
458
-
264
85
B. Loans measured at fair value through
other comprehensive income
-
-
-
-
-
-
B.1 concerned by concessions in compliance with the GLs
-
-
-
-
-
-
B.2 subject to existing moratorium measures
no longer compliant with GL and not assessed as
subject of concession
-
-
-
-
-
-
B.3 concerned by other concessions
-
-
-
-
-
-
B.4 new funding
-
-
-
-
-
-
Total 31.12.2021
27.300
2.218
1.723
-
2.244
219
Total 31.12.2020
15.455
10.683
897
1.348
1.540
481
Banca Ifis | 2021 Consolidated financial statements and report
208
A.1.4 Prudential consolidation - On- and off-balance-sheet credit exposures to banks: gross and net amounts
Types of exposures/Amounts
Gross
exposure
Overall impairment losses/reversals and overall allocations
Net
exposure
Overall partial
write-offs
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
A. On-balance-sheet credit exposures
A.1 On demand
350.097
350.097
-
-
-
966
966
-
-
-
349.131
-
a) Non-performing
-
X
-
-
-
-
X
-
-
-
-
-
b) Performing
350.097
350.097
-
X
-
966
966
-
X
-
349.131
-
A.2 Other
534.477
534.477
-
-
-
356
356
-
-
-
534.121
-
a) Bad loans
-
X
-
-
-
-
X
-
-
-
-
-
- of which forborne exposures
-
X
-
-
-
-
X
-
-
-
-
-
b) Unlikely to pay
-
X
-
-
-
-
X
-
-
-
-
-
- of which forborne exposures
-
X
-
-
-
-
X
-
-
-
-
-
c) Non-performing past due exposures
-
X
-
-
-
-
X
-
-
-
-
-
- of which forborne exposures
-
X
-
-
-
-
X
-
-
-
-
-
d) Performing past due exposures
-
-
-
X
-
-
-
-
X
-
-
-
- of which forborne exposures
-
-
-
X
-
-
-
-
X
-
-
-
e) Other performing exposures
534.477
534.477
-
X
-
356
356
-
X
-
534.121
-
- of which forborne exposures
-
-
-
X
-
-
-
-
X
-
-
-
Total (A)
884.574
884.574
-
-
-
1.322
1.322
-
-
-
883.252
-
B. Off-balance-sheet credit exposures
a) Non-performing
-
X
-
-
-
-
X
-
-
-
-
-
b) Performing
450.520
450.520
-
X
-
-
-
-
X
-
450.520
-
Total (B)
450.520
450.520
-
-
-
-
-
-
-
-
450.520
-
Total (A+B)
1.335.094
1.335.094
-
-
-
1.322
1.322
-
-
-
1.333.772
-
On-demand” credit exposures include on-demand receivables from banks classified under “Cash and cash equivalents”, in compliance with the provisions of the October 2021
7th update of Bank of Italy Circular no. 262/2005.
On-balance-sheet exposures include all on-balance-sheet financial assets due from customers regardless of the portfolio they are included in (measured at amortised cost,
measured at fair value through other comprehensive Income, designated as measured at fair value, mandatorily measured at fair value, under disposal).
Banca Ifis | 2021 Consolidated financial statements and report
209
A.1.5 Prudential consolidation - On- and off-balance-sheet credit exposures to customers: gross and net amounts
Types of exposures/Amounts
Gross
exposure
Overall impairment losses/reversals and overall allocations
Net
exposure
Overall partial
write-offs
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
Stage 1
Stage 2
Stage 3
Purchased
or
originated
impaired
A. On-balance-sheet credit exposures
a) Bad loans
1.245.916
X
-
123.424
1.122.492
91.021
X
-
91.021
-
1.154.895
23.505
- of which forborne exposures
162.104
X
-
3.949
158.155
3.337
X
-
3.337
-
158.767
-
b) Unlikely to pay
562.918
X
-
204.968
357.950
89.782
X
-
89.782
-
473.136
1.740
- of which forborne exposures
140.918
X
-
63.542
77.376
22.719
X
-
22.719
-
118.199
1
c) Non-performing past due exposures
129.734
X
-
123.982
5.752
6.575
X
-
6.575
-
123.159
-
- of which forborne exposures
4.450
X
-
3.691
759
1.037
X
-
1.037
-
3.413
-
d) Performing past due exposures
334.778
87.242
222.278
-
25.258
5.659
1.934
3.725
X
-
329.119
137
- of which forborne exposures
4.230
-
2.373
-
1.857
143
-
143
X
-
4.087
-
e) Other performing exposures
8.709.419
8.381.927
301.984
-
25.508
73.357
59.145
14.212
X
-
8.636.062
46.416
- of which forborne exposures
95.232
135
92.466
-
2.631
6.077
5
6.072
X
-
89.155
-
Total (A)
10.982.765
8.469.169
524.262
452.374
1.536.960
266.394
61.079
17.937
187.378
-
10.716.371
71.798
B. Off-balance-sheet credit exposures
a) Non-performing
65.354
X
-
65.260
94
6.848
X
-
6.839
9
58.506
-
b) Performing
1.519.551
1.476.773
42.674
X
104
5.090
3.002
2.082
X
6
1.514.461
-
Total (B)
1.584.905
1.476.773
42.674
65.260
198
11.938
3.002
2.082
6.839
15
1.572.967
-
Total (A+B)
12.567.670
9.945.942
566.936
517.634
1.537.158
278.332
64.081
20.019
194.217
15
12.289.338
71.798
On-balance-sheet exposures include all on-balance-sheet financial assets due from customers regardless of the portfolio they are included in (measured at amortised cost,
measured at fair value through other comprehensive Income, designated as measured at fair value, mandatorily measured at fair value, under disposal).
Banca Ifis | 2021 Consolidated financial statements and report
210
A.1.5a Loans concerned by COVID-19 support measures: gross and net amounts
This table shows, with reference to the loans concerned by moratorium or other COVID-19 concessions, or which constitute new liquidity granted by means of public guarantee
mechanisms, details of the gross exposure and comprehensive value adjustments, as well as a disclosure on net exposure for the various categories of impaired/non-impaired
assets.
Types of exposures/Amounts
Gross exposure
Overall impairment losses/reversals and overall allocations
Net
exposure
Overall partial
write-offs
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
Stage 1
Stage 2
Stage 3
Purchased or
originated
impaired
A. Non-performing loans:
-
X
X
-
-
-
X
X
-
-
-
-
a) Concerned by concession in
compliance with the GLs
-
X
X
-
-
-
X
X
-
-
-
-
b) Subject to outstanding moratorium
measures no longer in compliance with
GLs and not evaluated as subject of
concession
-
X
X
-
-
-
X
X
-
-
-
-
c) Concerned by other concessions
-
X
X
-
-
-
X
X
-
-
-
-
d) New loans
-
X
X
-
-
-
X
X
-
-
-
-
B. Unlikely to pay loans:
15.597
X
X
5.416
10.181
(1.259)
X
X
(1.259)
-
14.338
-
a) Concerned by concession in
compliance with the GLs
254
X
X
254
-
-
X
X
-
-
254
-
b) Subject to outstanding moratorium
measures no longer in compliance with
GLs and not evaluated as subject of
concession
5.110
X
X
3.383
1.727
(951)
X
X
(951)
-
4.159
-
c) Concerned by other concessions
-
X
X
-
-
-
X
X
-
-
-
-
d) New loans
10.233
X
X
1.779
8.453
(308)
X
X
(308)
-
9.925
-
C. Non-performing past due loans:
626
X
X
360
266
(28)
X
X
(28)
-
598
-
a) Concerned by concession in
compliance with the GLs
-
X
X
-
-
-
X
X
-
-
-
-
b) Subject to outstanding moratorium
measures no longer in compliance with
GLs and not evaluated as subject of
concession
-
X
X
-
-
-
X
X
-
-
-
-
c) Concerned by other concessions
-
X
X
-
-
-
X
X
-
-
-
-
d) New loans
626
X
X
360
266
(28)
X
X
(28)
-
598
-
Banca Ifis | 2021 Consolidated financial statements and report
211
D. Other performing past-due exposures:
14.467
6.183
8.285
X
-
(82)
(33)
(49)
X
-
14.385
-
a) Concerned by concession in
compliance with the GLs
255
255
-
X
-
-
-
-
X
-
255
-
b) Subject to outstanding moratorium
measures no longer in compliance with
GLs and not evaluated as subject of
concession
5.949
4.851
1.098
X
-
(50)
(30)
(20)
X
-
5.899
-
c) Concerned by other concessions
-
-
-
X
-
-
-
-
X
-
-
-
d) New loans
8.263
1.077
7.187
X
-
(32)
(2)
(29)
X
-
8.232
-
E. Other performing loans:
631.654
598.575
33.080
X
-
(2.331)
(1.748)
(583)
X
-
629.323
-
a) Concerned by concession in
compliance with the GLs
89.877
88.135
1.742
X
-
(631)
(517)
(114)
X
-
89.246
-
b) Subject to outstanding moratorium
measures no longer in compliance with
GLs and not evaluated as subject of
concession
89.050
79.700
9.350
X
-
(680)
(488)
(192)
X
-
88.370
-
c) Concerned by other concessions
-
-
-
X
-
-
-
-
X
-
-
-
d) New loans
452.727
430.740
21.988
X
-
(1.020)
(743)
(277)
X
-
451.708
-
Total (A+B+C+D+E)
662.343
604.758
41.365
5.776
10.446
(3.700)
(1.780)
(632)
(1.287)
-
658.644
-
Banca Ifis | 2021 Consolidated financial statements and report
212
A.1.7 Prudential consolidation - On-balance-sheet credit exposures to customers: trends in gross non-
performing exposures
Reason/Categories
Bad loans
Unlikely to pay
Non-performing
past due
exposures
A. Opening gross exposure
1.217.316
564.046
35.449
- of which: transferred and not derecognised
1.519
4.934
1.782
B. Increases
1.021.739
631.874
312.782
B.1 income from performing exposures
6.438
40.597
231.553
B.2 income from purchased or originated impaired
financial assets
123.741
56.194
855
B.3 transfers from other non-performing exposure
categories
35.523
31.444
3.453
B.4 contractual modifications without
derecognition
-
-
-
B.5 other increases
856.037
503.639
76.921
- of which: business combinations
-
1.056
1.492
C. Decreases
993.139
633.002
218.497
C.1 outflows to performing exposures
10.685
7.100
95.907
C.2 write-offs
63.126
5.087
360
C.3 collections
264.331
163.722
3.411
C.4 proceeds from sales
37.431
21.937
199
C.5 losses on sale
60.752
360
3
C.6 transfers to other non-performing loan
categories
2.945
38.434
29.041
C.7 contractual modifications without derecognition
-
-
-
C.8 other decreases
553.869
396.362
89.576
D. Closing gross exposure
1.245.916
562.918
129.734
- of which: transferred and not derecognised
649
2.922
2.307
On-balance-sheet exposures include all on-balance-sheet financial assets due from customers regardless of the
portfolio they are included in (measured at amortised cost, measured at fair value through other comprehensive
Income, designated as measured at fair value, mandatorily measured at fair value, under disposal).
Banca Ifis | 2021 Consolidated financial statements and report
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A.1.7bis Prudential consolidation - On-balance-sheet credit exposures to customers: trends in gross
forborne exposures broken down by credit quality
Reason/Categories
Forborne exposures: non-
performing
Forborne exposures:
performing
A. Opening gross exposure
209.770
39.630
- of which: transferred and not derecognised
2.214
3.876
B. Increases
421.263
104.595
B.1 inflows from non-forborne performing exposures
863
78.960
B.2 inflows from forborne performing exposures
11.445
X
B.3 inflows from non-performing forborne exposure
X
3.092
B.4 inflows from non-forborne non-performing exposures
44.783
163
B.5 other increases
364.172
22.380
C. Decreases
323.561
44.763
C.1 outflows to non-forborne performing exposures
X
6.482
C.2 outflows to forborne performing exposures
3.092
X
C.3 outflows to non-performing forborne exposures
X
11.445
C.4 write-offs
1.011
-
C.5 collections
139.079
3.784
C.6 proceeds from sales
2.073
-
C.7 losses on sale
15
-
C.8 other decreases
178.291
23.052
D. Closing gross exposure
307.472
99.462
- of which: transferred and not derecognised
1.319
21.778
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A.1.9 Prudential consolidation - On-balance-sheet non-performing credit exposures to customers:
trends in overall impairment losses/reversals
Reason/Categories
Bad loans
Unlikely to pay
Non-performing past due
exposures
Total
of which:
forborne
exposures
Total
of which:
forborne
exposures
Total
of which:
forborne
exposures
A. Opening balance of total
impairment losses/reversals of
impairment losses
117.485
3.536
105.507
9.554
2.821
503
- of which: transferred and not
derecognised
-
-
1.876
151
261
29
B. Increases
63.691
842
53.890
17.527
12.478
982
B.1 impairment losses from
purchased or originated
impaired financial assets
-
X
-
X
-
X
B.2. other impairment losses
25.839
409
48.131
17.321
8.192
982
B.3 losses on sale
-
-
-
-
-
-
B.4 transfers from other non-
performing exposure categories
16.587
2
2.246
194
35
-
B.5 contractual modifications
without derecognition
-
-
-
-
-
-
B.6 other increases
21.265
431
3.513
12
4.251
-
C. Decreases
90.155
1.041
69.615
4.362
8.724
448
C.1 impairment reversals from
appreciation
7.762
469
11.839
2.702
5.351
238
C.2 impairment reversals from
collection
9.964
101
4.825
272
49
-
C.3 gains on disposal
1.064
1
1.247
-
-
-
C.4 write-offs
64.528
460
21.406
-
-
-
C.5 transfers to other non-
performing loan categories
-
-
16.251
16
2.616
210
C.6 contractual modifications
without derecognition
-
-
-
-
-
-
C.7 other decreases
6.837
10
14.047
1.372
708
-
D. Closing balance of total
impairment losses/reversals of
impairment losses
91.021
3.337
89.782
22.719
6.575
1.037
- of which: transferred and not
derecognised
151
-
1.019
208
318
44
A.2 Classification of exposures based on external and internal ratings
A.2.1 Prudential consolidation - Breakdown of financial assets, loan commitments and financial
guarantees granted by external rating class (gross amounts)
For the purposes of calculating capital requirements against credit risk, Banca Ifis uses the external credit
assessment institution (ECAI) Fitch Ratings exclusively for the positions recognised under “Exposures to Central
Governments and Central Banks”. Banca Ifis also uses the ECAI Cerved rating for corporate counterparties,
having certain specific characteristics of size and use, in order to calculate capital absorption for supervisory
purposes. These positions are included in the “Exposure to Companies” classes.
No external ratings are used for other asset classes.
Banca Ifis | 2021 Consolidated financial statements and report
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A.2.2 Prudential consolidation - Breakdown of financial assets, loan commitments and financial
guarantees granted by internal rating class (gross amounts)
The Banca Ifis Group does not use internal ratings for the purposes of calculating capital absorption. The Group
has implemented an internal management rating system geared towards business segments, differentiated by
legal nature and size. This has been developed on proprietary databases and has the following components:
• a “financial” module, to assess the company's operating/financial soundness;
• a “central credit register” module, presenting the evolution of counterparty risk vis-à-vis the banking
industry;
• an “internal performance” module, monitoring the performance of the relationships between the
counterparty and the Group;
• a “socio-demographic” module aimed at assessing the risk profile on the basis of biographical
information.
Banca Ifis | 2021 Consolidated financial statements and report
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A.3 Breakdown of guaranteed credit exposures by guarantee type
A.3.1 Prudential consolidation - Guaranteed on- and off-balance-sheet credit exposures to banks
Gross exposure
Net exposure
Collateral guarantees (1)
Personal guarantees (2)
Total
(1)+(2)
Credit derivatives
Unsecured loans
Property
- mortgages
Property
- lease
financing
Securities
Other collateral
guarantees
CLN
Other derivatives
Public
Administrations
Banks
Other financial
companies
Other entities
Central
counterparties
Banks
Other financial
companies
Other entities
1. Guaranteed on-balance-sheet
credit exposures:
101.205
101.204
-
-
-
100.964
-
-
-
-
-
-
-
-
100.964
201.928
1.1 totally guaranteed
101.205
101.204
-
-
-
100.964
-
-
-
-
-
-
-
-
100.964
201.928
- of which non-performing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.2 partially guaranteed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- of which non-performing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2. Guaranteed off-balance-sheet
credit exposures:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.1 totally guaranteed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- of which non-performing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.2 partially guaranteed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- of which non-performing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
217
A.3.2 Prudential consolidation - Guaranteed on- and off-balance-sheet credit exposures to customers
Gross exposure
Net exposure
Collateral guarantees (1)
Personal guarantees (2)
Total
(1)+(2)
Credit derivatives
Unsecured loans
Property
-
mortgages
Property
- lease
financing
Securities
Other collateral
guarantees
CLN
Other derivatives
Public
Administrations
Banks
Other financial
companies
Other entities
Central
counterparties
Banks
Other financial
companies
Other entities
1. Guaranteed on-
balance-sheet credit
exposures:
3.640.758
3.507.558
618.703
-
3.059
1.394.643
-
-
-
-
-
772.677
-
10.604
465.986
3.265.672
1.1 totally guaranteed
2.583.731
2.483.907
472.402
-
20
1.337.361
-
-
-
-
-
222.405
-
8.718
443.001
2.483.907
- of which non-
performing
276.773
207.642
127.890
-
-
26.397
-
-
-
-
-
5.394
-
102
47.860
207.643
1.2 partially
guaranteed
1.057.027
1.023.651
146.301
-
3.039
57.282
-
-
-
-
-
550.272
-
1.886
22.985
781.765
- of which non-
performing
72.047
53.306
19.943
-
-
85
-
-
-
-
-
12.840
-
120
2.134
35.122
2. Guaranteed off-
balance-sheet
credit exposures:
40.975
40.893
-
-
30
5.708
-
-
-
-
-
4.790
-
225
27.217
37.970
2.1 totally guaranteed
32.912
32.894
-
-
30
4.930
-
-
-
-
-
803
-
200
26.929
32.892
- of which non-
performing
1.751
1.751
-
-
-
-
-
-
-
-
-
-
-
-
1.751
1.751
2.2 partially
guaranteed
8.063
7.999
-
-
-
778
-
-
-
-
-
3.987
-
25
288
5.078
- of which non-
performing
54
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
218
B. Concentration and distribution of credit exposures
B.1 Prudential Consolidation - Breakdown of on- and off-balance-sheet credit exposures to customers
by segment
Exposures/Counterp
arties
Public
Administrations
Financial
companies
Financial
companies (of
which: insurance
companies)
Non-financial
companies
Households
Net exposure
Overall impairment
losses/reversals
Net exposure
Overall impairment
losses/reversals
Net exposure
Overall impairment
losses/reversals
Net exposure
Overall impairment
losses/reversals
Net exposure
Overall impairment
losses/reversals
A. On-balance-sheet
credit exposures
A.1 Bad loans
3.382
8.793
1.419
88
-
-
160.511
75.930
989.583
6.210
- of which forborne
exposures
-
-
21
-
-
-
6.523
2.957
152.223
380
A.2 Unlikely to pay
231
-
7.866
612
-
-
124.173
80.006
340.866
9.164
- of which forborne
exposures
-
-
39
123
-
-
40.644
19.702
77.516
2.894
A.3 Non-performing
past due exposures
73.972
195
64
11
-
-
37.118
3.495
12.005
2.874
- of which forborne
exposures
-
-
-
-
-
-
914
134
2.499
903
A.4 Performing
exposures
2.758.802
2.542
414.266
4.378
294
3
5.083.641
63.243
708.472
8.853
- of which forborne
exposures
844
4
90
5
-
-
72.899
5.137
19.409
1.074
Total (A)
2.836.387
11.530
423.615
5.089
294
3
5.405.443
222.674
2.050.926
27.101
B. Off-balance-sheet
credit exposures
B.1 Non-performing
exposures
-
-
1.361
229
-
-
55.326
6.409
1.819
210
B.2 Performing
exposures
1
-
148.870
844
-
-
1.068.341
4.207
297.249
39
Total (B)
1
-
150.231
1.073
-
-
1.123.667
10.616
299.068
249
Total (A+B)
31.12.2021
2.836.388
11.530
573.846
6.162
294
3
6.529.110
233.290
2.349.994
27.350
Total (A+B)
31.12.2020
2.454.167
10.000
468.545
6.454
326
9
5.953.581
261.614
2.311.018
27.284
Banca Ifis | 2021 Consolidated financial statements and report
219
B.2 Prudential consolidation - Geographical breakdown of on- and off-balance-sheet credit exposures
to customers
Exposures/Geogra
phic areas
Italy
Other European
countries
America
Asia
Rest of the World
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
A. On-balance-
sheet credit
exposures
A.1 Bad loans
1.154.413
89.825
457
1.195
15
-
1
1
9
-
A.2 Unlikely to pay
472.551
89.356
576
426
5
-
-
-
4
-
A.3 Non-
performing past
due exposures
107.967
5.572
14.487
946
50
4
655
53
-
-
A.4 Performing
exposures
8.510.316
68.812
321.115
9.195
80.161
919
48.602
80
4.987
10
Total (A)
10.245.247
253.565
336.635
11.762
80.231
923
49.258
134
5.000
10
B. Off-balance-
sheet credit
exposures
B.1 Non-
performing
exposures
58.118
6.848
388
-
-
-
-
-
-
-
B.2 Performing
exposures
1.417.315
4.786
95.778
304
-
-
1.132
-
236
-
Total (B)
1.475.433
11.634
96.166
304
-
-
1.132
-
236
-
Total (A+B)
31.12.2021
11.720.680
265.199
432.801
12.066
80.231
923
50.390
134
5.236
10
Total (A+B)
31.12.2020
10.734.228
293.512
330.051
10.478
81.980
1.171
37.917
177
3.135
13
Banca Ifis | 2021 Consolidated financial statements and report
220
B.3 Prudential consolidation - Geographical breakdown of on- and off-balance-sheet credit exposures
to banks
Exposures/Geograp
hic areas
Italy
Other European
countries
America
Asia
Rest of the World
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
Net exposure
Overall
impairment
losses/reversals
A. On-balance-sheet
credit exposures
A.1 Bad loans
-
-
-
-
-
-
-
-
-
-
A.2 Unlikely to pay
-
-
-
-
-
-
-
-
-
-
A.3 Non-performing
past due exposures
-
-
-
-
-
-
-
-
-
-
A.4 Performing
exposures
872.005
1.310
11.247
12
-
-
-
-
-
-
Total (A)
872.005
1.310
11.247
12
-
-
-
-
-
-
B. Off-balance-
sheet credit
exposures
B.1 Non-performing
exposures
-
-
-
-
-
-
-
-
-
-
B.2 Performing
exposures
449.258
-
1.262
-
-
-
-
-
-
-
Total (B)
449.258
-
1.262
-
-
-
-
-
-
-
Total (A+B)
31.12.2021
1.321.263
1.310
12.509
12
-
-
-
-
-
-
Total (A+B)
31.12.2020
1.131.242
1.234
16.403
40
20.690
35
-
-
-
-
B.4 Major exposures
31.12.2021
31.12.2020
a)
Carrying amount
4.575.221
3.418.576
b)
Weighted amount
799.970
425.098
c)
Number
7
4
The total amount of large exposures at weighted value as at 31 December 2021 mainly consists of 255 million
Euro in tax assets, 180 million Euro in exposures to counterparties not included in the scope of prudential
consolidation, 146 million Euro in exposures to banks and financial institutions mainly for repurchase
agreements and 188 million Euro attributable to liquidity provided to vehicle companies for existing
securitisation transactions.
Disclosure regarding Sovereign Debt
On 5 August 2011, Consob (drawing on ESMA document no. 2011/266 of 28 July 2011) issued Communication
no. DEM/11070007 on disclosures by listed companies of their exposures to sovereign debt and market
performance, the management of exposures to sovereign debt, and their operating and financial impact.
Banca Ifis | 2021 Consolidated financial statements and report
221
Pursuant to said communication, please note that at 31 December 2021 the exposures to sovereign debt entirely
consisted of Italian government bonds; their carrying amount totalled 2.145 million Euro, net of the negative 3,6
million Euro valuation reserve.
These securities, with a nominal amount of approximately 2.120 million Euro have a weighted residual average
life of approximately 44 months.
The fair values used to measure the exposures to sovereign debt securities at 31 December 2021 are considered
to be Level 1.
Pursuant to the Consob Communication, besides the exposure to sovereign debt, it is also necessary to consider
receivables disbursed to and due from the Italian National Administration. These exposures at 31 December
2021 amounted to 691 million Euro, of which 129 million Euro related to tax credits.
C. Securitisation transactions
This section does not include securitisation transactions in which the originator is a bank belonging to the same
prudential group and the total liabilities issued (e.g. ABS securities, loans during the warehousing phase, etc.)
by the vehicle companies are subscribed at the time of issue by one or more companies belonging to the same
prudential group. In other words, self-securitisations fully subscribed by companies belonging to the Banca Ifis
Group's prudential consolidation, such as those of the vehicles Indigo Lease S.r.l. and Ifis Npl 2021-1 SPV S.r.l.,
are discussed in a later section to which reference should be made.
Qualitative information
Objectives, strategies and processes
The Group has exposures to securitisations originated by third parties, acquired for investment purposes with
the aim of generating a profit margin and achieving an appreciable medium/long-term return on capital.
These transactions may be originated by the Group's Business Units, based on the characteristics of the
underlying portfolio — performing or non-performing — or as part of liquidity investments.
The acquisition activities are carried out in accordance with the policies and procedures relating to credit risk,
and in particular with the policies in force for the securitisation transactions and investment policies applicable
to the Proprietary Finance portfolio and in compliance with the propensity to risk established within the Risk
Appetite Framework. The Group invests in securitisations of which it is able to value, on the basis of its
experience, the relevant underlying assets.
In particular, after identifying the investment opportunity, the unit that proposes the transaction conducts a due
diligence review to estimate future cash flows and determine whether the price is fair, coordinating the
organisational units concerned from time to time and formalising the relevant findings to be submitted to the
competent decision-making body.
Subsequent to the purchase, the investment is constantly monitored based on the performance indicators of the
underlying exposures and whether cash flows are in line with the estimates made at the time of the acquisition.
Hedging policies adopted to mitigate the relevant risks
The Group has a “Securitisation management policy in the role of sponsor or investor” that governs the
management of securitisation transactions in which it is involved as “investor” (i.e. the buyer of the notes) or
“sponsor” (i.e. the party that establishes the transaction, as defined by Art. 2 of Regulation (EU) 2017/2402). For
each potential case, the policy sets out the responsibilities of the organisational units and corporate bodies, with
reference to both the due diligence process and the ongoing monitoring of the transaction.
Banca Ifis | 2021 Consolidated financial statements and report
222
This section describes the Group's exposures towards securitisation transactions in which it is involved as
originator, sponsor, or investor.
Ifis ABCP Programme securitisation
On 7 October 2016, Banca Ifis launched a three-year revolving securitisation of trade receivables due from
account debtors. After Banca Ifis (originator) initially reassigned the receivables for 1.254,3 million Euro, in the
second quarter of 2018, the vehicle named Ifis ABCP Programme S.r.l. issued an initial 850 million Euro,
increased to 1.000 million Euro, worth of senior notes subscribed for by the investment vehicles owned by the
banks that co-arranged the transaction, simultaneously with the two-year extension of the revolving period. An
additional tranche of senior notes, with a maximum nominal amount of 150 million Euro, initially issued for 19,2
million Euro, and that was subsequently adjusted based on the composition of the assigned portfolio, was
subscribed for by Banca Ifis. During the first half of 2019, this portion was first partially repaid by the vehicle,
then sold to a third-party bank for a total residual value of 98,9 million Euro. The difference between the value of
the receivables portfolios and the senior notes issued represents the credit granted to the notes' bearers, which
consists in a deferred purchase price.
Banca Ifis acts as servicer, performing the following tasks:
• following collection operations and monitoring cash flows on a daily basis;
• reconciling the closing balance at every cut-off date;
• verifying, completing and submitting the service report with the information on the securitised portfolio
requested by the vehicle and the banks at every cut-off date.
As part of the securitisation programme, the Bank sends the amount it collects to the vehicle on a daily basis,
while the new portfolio is assigned approximately six times each month; this ensures a short time lapse between
the outflows from the Bank and the inflows associated with the payment of the new assignments.
Only part of the securitised receivables due from account debtors are recognised as assets, especially for the
portion that the Bank has purchased outright, resulting in the transfer of all risks and rewards to the buyer.
Therefore, the tables in the quantitative disclosure show only this portion of the portfolio.
In compliance with IAS/IFRS accounting standards, currently the securitisation process does not involve the
substantial transfer of all risks and rewards, as it does not meet derecognition requirements. In addition, the
vehicles were consolidated in order to provide a comprehensive view of the transaction.
The maximum theoretical loss for Banca Ifis is represented by the losses that could potentially arise within the
portfolio of assigned receivables, and the impact would be the same as if the securitisation programme did not
exist; therefore, the securitisation has been accounted for as follows:
• the securitised receivables purchased outright were recognised under “receivables due from customers”,
subitem “factoring”;
• the funds raised from the issue of senior notes subscribed for by third parties were recognised under
“debt securities issued”;
• the interest on the receivables was recognised under “interest on receivables due from customers”;
• the interest on the notes was recognised under “interest due and similar expenses”, subitem “debt
securities issued”;
• the arrangement fees were fully recognised in profit or loss in the year in which the programme was
launched.
Banca Ifis | 2021 Consolidated financial statements and report
223
At 31 December 2021, the interest expense on the senior notes recognised in profit or loss amounted to 5,5
million Euro.
Emma securitisation
At 31 December 2021, there was a securitisation transaction in place called Emma, prepared by Farbanca and
which came under the scope of the Banca Ifis Group by virtue of the acquisition of 70,77% of said company in
2020. The other securitisation managed by Farbanca, named Ambra and having a multi-originator nature with
the involvement of two other companies belonging to the former Banca Popolare di Vicenza Group, was closed
during the first half of 2021.
In March 2018, Farbanca autonomously completed the Emma securitisation for a total nominal amount of
approximately 460 million Euro. The loan portfolio transferred regarded performing exposures relative to secured
credit, mortgage and unsecured loans, characterised by average seasoning of 7 years. The transaction,
structured by Banca IMI (Intesa Sanpaolo Group) was completed with the acquisition of loans by the SPV
pursuant to Italian Law no. 130/1999, Emma S.P.V. S.r.l. The securities were issued in three classes: a senior
class for an amount of 322 million Euro, fully subscribed by institutional investors through private placement; a
mezzanine class of 46 million Euro and a junior class of 96 million Euro, both subscribed fully by Farbanca.
This operation was restructured during June 2021. The restructuring, which provided for a size increase in the
transaction up to a total of 540 million Euro, was carried out with the involvement of the Parent company Banca
Ifis and Intesa Sanpaolo as co-arrangers. Following this restructuring, the securities were issued in three classes:
the senior class, with a nominal amount of 397,5 million Euro, was fully subscribed by Intesa Sanpaolo while the
mezzanine and junior classes, amounting to 53 million Euro and 90,1 million Euro respectively, were fully
subscribed by Farbanca.
The above securitisation transaction does not meet the requirements for derecognition in accordance with IFRS
9, not configuring a substantial transfer of all risks and related benefits. Therefore, the assets transferred and
not cancelled with reference to the loans concerned by said securitisation, not meeting the requirements
envisaged for derecognition, were “restored” to the financial statements.
Third-party securitisations
At 31 December 2021, the Group held 153,3 million Euro in notes deriving from third-party securitisation
transactions: specifically, it held 13,0 million Euro worth of single-tranche notes, senior notes for 188,2 million
Euro and 14,7 million Euro worth of mezzanine and junior notes.
Here below are the main characteristics of the third party securitisation transactions outstanding at the reporting
date:
• “Elite Basket Bond (EBB)” securitisation: the special purpose vehicle EBB S.r.l. issued Asset Backed
Securities (ABS) at a price equal to the nominal amount, amounting to 122 million Euro, in a single
tranche with maturity in December 2027 and a Basket of minibonds issued by 11 Italian listed companies
as the underlying asset. These notes are unsecured senior bonds but carry a Credit Enhancement equal
to 15% of the transaction's overall amount (24 million Euro), to be used in the event the issuers default
on interest and/or principal payments on the minibonds. The Parent company participates in this
transaction only as underwriter, subscribing for 4,8 million Euro worth of notes of the above tranche;
• “FINO 1” securitisation: this is an investment as a senior Noteholder in a securitisation transaction
whose tranches issued are supported by a state guarantee “GACS” (Guarantee on the securitisation of
bad loans) and with underlying bad loans with an original total nominal amount of about 5,4 billion Euro.
Banca Ifis | 2021 Consolidated financial statements and report
224
The tranche originally subscribed for 92,5 million Euro by Banca Ifis (out of a total nominal amount of
650 million Euro) is the Senior Note Class A, with maturity in October 2045. Net of the redemptions
occurred during the period, at 31 December 2021 the carrying amount of the portion subscribed for was
20,2 million Euro (35,7 million Euro at 31 December 2020);
• “Elipso Finance” securitisation: this is an investment as mezzanine noteholder in a securitisation and
with underlying non-performing positions worth a total original nominal amount of approximately 2,6
billion Euro. The only tranche currently held by the subsidiary Ifis Npl Investing S.p.A. is the Class B
Mezzanine Note, with a maturity date of January 2025 and a residual nominal value/principal amount
outstanding equal to 19,5 million Euro (no amortisation at 30 June 2021). As at 31 December 2021, the
subscribed tranche had a carrying amount of 2,3 million Euro (2,7 million Euro at the end of the previous
year);
• “Auxilio” securitisation: this is an investment made in October 2020 for an initial nominal amount of 1,9
million Euro, relating to the purchase by Banca Ifis of a portion of senior securities with a “partly paid”
structure for a pro-rata Bank notional value of 10 million Euro, with legal maturity in September 2035,
issued by the securitisation vehicle Auxilio SPV S.r.l., with underlying receivables deriving from loans
assisted by the guarantee of the Central Guarantee Fund. The transaction is characterised by a ramp-up
period during which the issuer can purchase additional loans against the proceeds deriving from the
payment of further tranches of the security subscription price; as a result of the payments made between
the purchase date and 31 December 2021, the residual nominal amount of the senior tranche held is 9,8
million Euro. No capital redemptions occurred during the months between the investment date and end
2021, and at 31 December 2021, the carrying amount of the portion subscribed was in line with a residual
nominal amount;
• “Dyret II” securitisation: the involvement of the Banca Ifis Group is limited to the purchase during
November 2020 by the Parent company of senior tranches of securities with a partly paid structure and
ramp-up period concluded at the date of said acquisition, issued by the securitisation SPV Dyret SPV
S.r.l. and with loans deriving from salary-backed or pension-backed loans or payment delegations as
collateral, for a nominal residual per-unit Bank amount of 14,9 million Euro at the purchase date. The
securities envisage the periodic redemption of the principal against the flows deriving from the
securitised portfolio and have legal maturity at December 2035. During 2021, the Group further invested
in this transaction by also subscribing to an upper mezzanine tranche (class B1). As at 31 December
2021 the book value of the senior tranches subscribed is equal to 10,6 million Euro, down compared to
the figure of 14,3 million Euro as of 31 December 2020 due to the redemptions occurred during the year,
while the mezzanine tranches show a net carrying amount of 4,5 million Euro;
• “Futura 2019” securitisation: In February 2020, Banca Ifis subscribed, for a nominal amount of 2,7 million
Euro, senior securities maturing in July 2044, issued by the SPV Futura 2019 S.r.l. As at 31 December
2021, these securities had a net carrying amount of 2,1 million Euro (2,7 million Euro at the end of the
previous year);
• “BCC NPLs 2020” securitisation: this transaction was carried out in November 2020 by Iccrea Banca on
an underlying of NPLs for a total of 2,4 billion Euro, divided up over more than 9.600 debtors and 17.000
positions. This transaction, carried out through the SPV BCC NPLs 2020 S.r.l., is backed by the
government GACS guarantee scheme and regarded the issue of senior, mezzanine and junior securities
with maturity at January 2045. The Parent company Banca Ifis was involved in connection with the
subscription of a portion of securities for each tranche, for a total nominal amount of 55,5 million Euro.
The carrying amount at 31 December 2021 of the tranches subscribed is 51,6 million Euro for the senior
Banca Ifis | 2021 Consolidated financial statements and report
225
(measured at amortised cost), while the value attributed to the mezzanine and junior portions (measured
at fair value through profit or loss) is effectively null;
• “Bluwater” securitisation: this is a transaction implemented in December 2020 with Banco BPM as
originator and Pillarstone Italy SPV S.r.l. as SPV and that consisted of the issue of a single tranche of
securities (referred to as “single tranche”) maturing in October 2030. Banca Ifis subscribed a portion of
said securities for 3,7 million Euro in nominal amount, which at 31 December 2021 has a carrying amount
of 0,9 million Euro (securities measured at fair value through profit or loss);
• “Gaia Spv” securitisation, “Sparta” and “Volterra” portfolios: these are two transactions for the purchase
of portfolios of non-performing loans carried out at the end of 2020 and finalised with the issue of
securities in the first half of 2021 by the vehicle company Gaia Spv S.r.l., in which Banca Ifis participated
as subscriber of a portion of the mono-tranche securities issued, with a total carrying amount of 12,1
million Euro at 31 December 2021;
• “Galadriel” securitisation, through the vehicle Galadriel SPE S.r.l.: a transaction with underlying loans
guaranteed by the Central Guarantee Fund set up at Mediocredito Centrale pursuant to Law 662 of 23
December 1996, in which the Parent Bank participated in 2021 by investing in “partly paid” securities
with a notional value pro-rata to the Bank of 20 million Euro for Class A securities, around 5 million Euro
for Class B1 securities and around 9 million Euro in Class B2 securities. At 31 December 2021, the
securities have a net carrying amount of 17,7 million Euro, 3,3 million Euro and 10 thousand Euro
respectively; it should also be noted that as part of this transaction, Banca Ifis acted as co-arranger with
Intesa Sanpaolo S.p.A.;
• “Valsabbina” securitisation, launched in November 2020 by Banca Valsabbina and with underlying loans
guaranteed by the Central Guarantee Fund set up at Mediocredito Centrale pursuant to Italian Law no.
662 of 23 December 1996, which Banca Ifis joined in 2021 as subscriber of mezzanine securities
characterised by a carrying amount at the end of 2021 of 4,1 million Euro;
• “Maior”, “Brisca” and “Aqui” securitisations, all having as underlying NPL loans and realised through the
vehicle Miami Spv, for which, in 2021, the Banca Ifis Group participated in the subscription of senior
securities with a total carrying amount of 44,6 million Euro as at 31 December 2021;
• “Iron” securitisation, as part of which the Parent company subscribed senior and junior tranches issued
by the vehicle Spv Project 1906 Srl in 2021, which at 31 December 2021 have a net carrying amount of
9,3 million Euro and 0,4 million Euro, respectively;
• “Lanterna” securitisation, carried out by the special purpose vehicle Lanterna Finance S.r.l. in June 2021
via the issue of senior securities for 320 million Euro and junior securities for 62,7 million Euro, having
as their underlying loans assisted by a 100% guarantee from the Central Guarantee Fund (FCG) set up
at Mediocredito Centrale (MCC) pursuant to Law 662 of 23 December 1996, as amended by the
provisions introduced by the Decree Law of 8 April 2020 (the “Liquidity Decree”), converted by Law no.
40 of 5 June 2020. The Banca Ifis Group took part in this transaction by subscribing to a portion of the
senior tranches, which as at 31 December 2021 had a net carrying amount of 9,8 million Euro;
• “BCC NPLs 2021” securitisation: this is a similar transaction to the above-mentioned “BCC NPLs 2020”,
and was carried out in November 2021 by Iccrea Banca on an underlying NPL, selling a credit claim of
1,3 billion Euro originating from around 7 thousand debtors. This transaction, carried out through the
SPV BCC NPLs 2021 S.r.l., is backed by the government GACS guarantee scheme and regarded the issue
of senior, mezzanine and junior securities with maturity at April 2046. Banca Ifis took part through the
sale of a portfolio of its own exposures and the subscription of a portion of securities for each tranche,
which as of 31 December 2021 showed a net carrying amount of 7,7 million Euro for the senior tranches
(valued at amortised cost) and essentially zero for the mezzanine and junior tranches (valued at fair
Banca Ifis | 2021 Consolidated financial statements and report
226
value through profit or loss). For further details on this transaction and the related accounting treatment,
reference should be made to the specific paragraph “C. Financial assets sold and fully derecognized” in
section “D. Disposal transactions” of this Part E;
• “Urano” securitisation, which entered the Banca Ifis Group perimeter as a result of the acquisition in the
first half of 2021 of the business unit of the former Aigis Banca and characterised by the full subscription
by the former Aigis Banca of the single-tranche securities issued and having as underlying loans of a
third party bank. As a result of this complete underwriting of the securities, the Urano vehicle falls within
the scope of consolidation of the Banca Ifis Group pursuant to IFRS 10 (for more details, please refer to
Section 3 “Scope and methods of consolidation” of Part A of this document), and therefore the loans
underlying this securitisation have been recognised as assets in the consolidated financial statements
at 31 December 2021.
227
Banca Ifis | 2021 Consolidated financial statements and report
Quantitative information
C.1 Prudential consolidation - Exposures from the main “own” securitisations broken down by type of securitised asset and type of exposure
Type of securitised
asset/Exposure
On-balance-sheet exposures
Guarantees granted
Credit lines
Senior
Mezzanine
Junior
Senior
Mezzanine
Junior
Senior
Mezzanine
Junior
Carrying amount
Impairment losses/
reversals
Carrying amount
Impairment losses/
reversals
Carrying amount
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment
losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
A. Fully derecognised
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B. Partly derecognised
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
C. Not derecognised
51.645
11
8
-
394.684
-
-
-
-
-
-
-
-
-
-
-
-
-
- Receivables due from
customers
51.645
11
8
-
394.684
-
-
-
-
-
-
-
-
-
-
-
-
-
228
Banca Ifis | 2021 Consolidated financial statements and report
C.2 Prudential consolidation - Exposures from the main “third-party” securitisations broken down by type of securitised asset and type of exposure
Type of securitised
asset/Exposure
On-balance-sheet exposures
Guarantees granted
Credit lines
Senior
Mezzanine
Junior
Senior
Mezzanine
Junior
Senior
Mezzanine
Junior
Carrying amount
Impairment losses/
reversals
Carrying amount
Impairment losses/
reversals
Carrying amount
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Net exposure
Impairment losses/
reversals
Loans
13.043
56
-
-
409
-
-
-
-
-
-
-
-
-
-
-
-
-
Debt securities
188.209
872
14.683
130
13.045
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
201.252
928
14.683
130
13.454
-
-
-
-
-
-
-
-
-
-
-
-
-
229
Banca Ifis | 2021 Consolidated financial statements and report
C.3 Prudential consolidation - Interests in special purpose vehicles for the securitisation
Securitisation name /
Special purpose vehicle
name
Registere
d office
Consolidati
on
(1)
Assets
(2)
Liabilities
(2)
Receivabl
es
Debt
securities
Other
Senior
Mezzanin
e
Junior
Ifis Abcp Programme S.r.l.
Conegliano
(Province
of Treviso)
100%
1.331.940
-
114.735
1.057.568
-
-
Emma S.P.V. S.r.l.
Conegliano
(Province
of Treviso)
100%
293.976
-
24.377
390.176
-
-
Urano Spv S.r.l.
Milan
100%
6.746
-
209
-
-
-
(1) Consolidation method referred to the so-called “prudential” perimeter
(2) The figures shown are gross of any intercompany transactions
C.6 Prudential consolidation - Consolidated securitisation vehicles
Please refer to the disclosures in Table C.3 and, with respect to securitisation transactions carried out during
2021, to what was previously reported with respect to the restructuring of the Emma securitisation.
D. Disposals
A. Financial assets sold and not fully derecognised
Qualitative information
Financial assets sold but not derecognised refer to securitised receivables.
Banca Ifis | 2021 Consolidated financial statements and report
230
Quantitative information
D.1. Prudential consolidation - Financial assets sold and fully recognised and associated financial liabilities: carrying
amounts
Financial assets sold and fully recognised
Associated financial liabilities
Carrying
amount
of which:
securitised
of which:
subject to
repurchase
agreements
of which
non-
performing
Carrying
amount
of which:
securitised
of which:
subject to
repurchase
agreements
A. Financial assets held for
trading
1. Debt securities
-
-
-
X
-
-
-
2. Equity securities
-
-
-
X
-
-
-
3. Loans
-
-
-
X
-
-
-
4. Derivatives
-
-
-
X
-
-
-
B. Other financial assets
mandatorily measured at fair
value
1. Debt securities
-
-
-
-
-
-
-
2. Equity securities
-
-
-
X
-
-
-
3. Loans
-
-
-
-
-
-
-
C. Financial assets measured
at fair value
1. Debt securities
-
-
-
-
-
-
-
2. Loans
-
-
-
-
-
-
-
D. Financial assets measured
at fair value through other
comprehensive income
1. Debt securities
-
-
-
-
-
-
-
2. Equity securities
-
-
-
X
-
-
-
3. Loans
-
-
-
-
-
-
-
E. Financial assets measured
at amortised cost
1. Debt securities
-
-
-
-
-
-
-
2. Loans
1.256.562
1.257.259
-
4.585
583.045
365.533
217.512
Total 31.12.2021
1.256.562
1.257.259
-
4.585
583.045
365.533
217.512
Total 31.12.2020
1.064.930
1.064.929
-
-
1.000.210
1.000.210
-
C. Financial assets sold and fully derecognised
In September 2021, the Banca Ifis Board of Directors resolved to take part in a multioriginator securitisation of
a portfolio of bad loans with the submission of an application to the Ministry for the Economy and Finance to be
admitted to the government guarantee scheme for liabilities issued (the “GACS”) in accordance with Italian
Decree Law no. 18 of 14 February 2016, converted with Italian Law no. 49 of 8 April 2016, implemented by Decree
of the Ministry for the Economy and Finance of 3 August 2016, with Decree of the Ministry for the Economy and
Finance of 21 November 2017 and with Decree of the Ministry for the Economy and Finance of 10 October 2018,
with Decree of the Ministry for the Economy and Finance of 14 October 2019, with Decree of the Ministry for the
Banca Ifis | 2021 Consolidated financial statements and report
231
Economy and Finance of 20 May 2020 and with Decree of the Ministry for the Economy and Finance of 15 July
2021.
The transaction, which involved a large scope of banks, envisaged the transfer, in accordance with Italian Law
no. 130 of 30 April 1999, of unsecured and mortgage loan portfolios, deriving from loans classified as non-
performing and receivables deriving from financial lease contracts classified as non-performing for a total credit
claim of approximately 1,3 billion Euro, in the favour of a securitisation SPV established specifically to this end
and called “BCC NPLs 2021 S.r.l.” as well as the simultaneous conferral of a management mandate (servicing)
by the latter to a third party independent servicer with respect to the originating banks. The SPV acquired the
portfolio on 16 November 2021, financing the purchase by issuing asset-backed securities, in accordance with
the combined provisions of Articles 1 and 5 of Italian Law no. 130, for a total nominal amount of approximately
336,5 million Euro, structured into the following classes:
• 284 million Euro in Senior Notes maturing in April 2046, with rating Baa2, BBB and BBB respectively
assigned by Moody’s Italia Srl, Scope Rating GmbH and ARC Ratings S.A.;
• 39,5 million Euro in Mezzanine Notes maturing in April 2046, with rating Caa2, CCC and CCC+ respectively
assigned by Moody’s Italia Srl and Scope and ARC Ratings;
• 13 million Euro in Junior Notes maturing in April 2046, unrated.
In order to fulfil the obligation to maintain the net economic interest of 5% in the transaction, as per Article 6 of
(EU) Regulation no. 2017/2402 of the European Parliament and Council of 12 December 2017, as amended by
Regulation (EU) 557/2021, the adhering banks, including Banca Ifis, have subscribed - and undertake to maintain
such for the entire duration of the transaction - a proportional share of 100% of the Senior Notes. The remaining
share of Mezzanine and Junior Notes was instead subscribed by a third party independent investor.
The transaction has been structured in such a way as to have suitable characteristics to allow the Senior Notes
to benefit from said GACS, given the expected deconsolidation by the originating banks of the receivables
concerned by the transaction, in compliance with international accounting standards IAS/IFRS. In the case in
point, paragraph 3.2.12 of IFRS 9 states that “When derecognising the financial asset as a whole, the difference
between the carrying amount (measured at the date of derecognition) and the price received (including any new
assets obtained less any new liability accepted), must be noted under profit (loss) for the year”.
Consequently, upon conclusion of the transaction, Banca Ifis Group:
• has eliminated from the assets on the balance sheet the receivables transferred in the financial position
in progress at the time the settlement as made listing the mezzanine and junior tranches on the market;
• recorded on the income statement, under “Profit (loss) from sale or buyback of financial assets
measured at amortised cost” the total capital loss/gain determined as the difference between the
aggregated gross value at the date of transfer of the loans, less the cumulative impairment losses and
including any collections made from said loans and pertaining to the SPV at the date of sale (8,3 million
Euro, of which collections of 112 thousand Euro) and the price received (8,0 million Euro); a difference
that is expressed as a total capital loss of 246 thousand Euro;
• noted on the balance sheet the Senior, Mezzanine and Junior notes subscribed at the related fair value
for a total amount of 7,9 million Euro (for more details on the units subscribed by Banca Ifis, refer to the
information given in section “Securitisation transactions” of this Part E).
Banca Ifis | 2021 Consolidated financial statements and report
232
1.2 Market risks
Impacts deriving from the Covid-19 pandemic
The effects of the Covid-19 pandemic relative to the market risk concerning the items that are part of the trading
book, were characterised by limited impacts, in line with the margins and dimension of that portfolio with respect
to the total portfolio owned by the Group, as ruled internally by the Risk Appetite Framework.
The operations in question revealed an accurate, stringent control of risk operatively laid out both through a
careful use of derivatives for hedging (economic, not accounting) and the economic enhancement of the banking
book and a marginal allocation of liquidity relative to the trading book and established in terms of potential
investment.
In line with the management strategy mentioned, despite the exceptional nature of the pandemic, during 2021,
no violations were seen to the risk thresholds assigned internally.
1.2.1 Interest rate risk and price risk - supervisory trading book
Qualitative information
A. General aspects
In 2021, the investment strategy continued, as regulated in the “Banca Ifis Proprietary Portfolio Management
Policy” is structured to coincide with the risk appetite formulated by the Board of Directors under the scope of
the Risk Appetite Framework and laid out in the “Group Market Risk Management Policy”, as well as with the
system of objectives and limits.
Within this process, the comprehensive investment strategy continued to centralise a conservative “stance”,
mainly comprising a low-risk, highly liquid portfolio and a strategy that would offer constant returns in the
medium-term.
Accordingly, the assets making up said portfolio are mainly measured at amortised cost or through the FVOCI
method; they come under the scope of the banking book and do not, therefore, constitute any market risk.
Under this scope, the component relating to the “trading book”, from whence stems the market risk in question,
is marginal, both in terms of absolute risk values recorded and with respect to the limits established. The trading
book mainly comprises options and futures deriving from hedging transactions and ancillary enhancements to
the investment strategy in assets that are part of the “banking book” and “discretionary trading” portfolio,
characterised by short-term speculation and marginal exposure.
The trading book also contains residual transactions from the Corporate Banking operations, as part of which
clients were offered derivative contracts hedging the financial risks they assumed. In order to remove market
risk, all outstanding transactions are hedged with “back to back” trades, in which the Group assumes a position
opposite to the one sold to corporate clients with independent market counterparties.
B. Management procedures and measurement methods concerning interest rate risk and price risk
The guidelines on the assumption and monitoring of market risk are laid out on a Group level in the “Group Market
Risk Management Policy”, which also indicates, for the purpose of a more rigorous and detailed representation
of the process activities, the metrics used for the measuring and monitoring of the risk in question.
More specifically, the measurement and assessment of market risks is based on the various characteristics (in
terms of time frame, investment instruments, etc.) of the investment strategies used in the Banca Ifis Proprietary
Portfolio. This is consistent with the “Banca Ifis Proprietary Portfolio Management Policy”, which defines and
details the strategies to be pursued in terms of portfolio structure, operative instruments and assets.
Banca Ifis | 2021 Consolidated financial statements and report
233
Under this scope, the monitoring of the consistency of the Group’s portfolio risk profiles in respect of the
risk/return objectives is based on a system of limits (both strategic and operational), which envisages the
combined use of various different indicators. More specifically, the following are defined:
• Maximum Acceptable Loss;
• Maximum negative gross financial impact;
• VaR limit;
• Limits of sensitivity and Greeks;
• Any limits to the type of financial instruments admitted;
• Any composition limits.
Respect for the limits assigned to each portfolio is checked daily.
The summary management indicator used to assess exposure to the risks in question is the Value at Risk (VaR),
which is a statistical measure that allows the loss that may be suffered following adverse changes to risk factors,
to be estimated.
The VaR is measured using a confidence interval of 99% and a holding period of 1 day; it expresses the
“threshold” of daily losses that, on the basis of probabilistic hypotheses may only be surpassed in 1% of cases.
The method used to calculate the VaR is historical simulation. With this approach, the portfolio is re-valued,
applying all variations to the risk factors recorded the previous year (256 observations). The values thus obtained
are compared with the current portfolio value, determining the relevant series of hypothetical gains or losses.
The VaR is the average of the second and third worst results.
The VaR is also divided, for monitoring purposes, amongst the risk factors referring to the portfolio.
In addition to the risk indications deriving from the VaR, the Expected Shortfall (ES), which expresses the daily
loss that exceeds the VaR figure, and the Stressed VaR, which represents a VaR calculated in a particularly
turbulent historical period, which in the specific case corresponds to the Italian debt crisis of 2011-2012, are also
used for monitoring purposes.
The forecasting capacity of the risk measurement model used, is verified through a daily backtesting analysis in
which the VaR for the positions in the portfolio at t-1 is compared with the profit and loss generated by such
positions at t.
Banca Ifis | 2021 Consolidated financial statements and report
234
Quantitative information
1. Supervisory trading book: breakdown by residual maturity (re-pricing date) of on-balance-sheet
financial assets and liabilities and financial derivatives - Currency: Euro
Type/Residual maturity
on
demand
up to 3
months
over 3 to
6
months
over 6
months
to 1 year
over 1 to
5 years
over 5 to
10 years
over 10
years
indefinit
e life
1. On-balance-sheet
assets
1.1 Debt securities
-
-
-
709
-
-
-
-
- with early redemption
option
-
-
-
709
-
-
-
-
- other
-
-
-
-
-
-
-
-
1.2 Other assets
-
-
-
-
-
-
-
-
2. On-balance-sheet
liabilities
2.1 Repurchase
agreements
-
-
-
-
-
-
-
-
2.2 Other liabilities
-
-
-
-
-
-
-
-
3. Financial derivatives
3.1 With underlying
security
- Options
+ long positions
-
-
-
-
-
-
4.147
-
+ short positions
-
-
-
-
-
-
-
-
- Other
+ long positions
-
445
-
2.028
-
-
442
-
+ short positions
-
442
-
-
-
-
445
-
3.2 Without underlying
security
- Options
+ long positions
-
1.138
-
5.527
177
1.426
34
-
+ short positions
-
28
-
1.362
170
6.714
29
-
- Other derivatives
+ long positions
-
-
15.518
1.678
7.293
1.263
-
-
+ short positions
-
-
15.518
1.678
7.293
1.263
-
-
3. Supervisory trading book: internal models and other methods for the sensitivity analysis
1.2.2 Interest rate risk and price risk - banking portfolio
Qualitative information
A. General aspects, management procedures and measurement methods concerning the interest rate
risk and the price risk
As a general principle, the Group does not assume significant interest rate risks. In terms of breakdown of the
balance sheet with reference to the types of risk in question, in respect of the liabilities, the main funding source
is still the on-line savings accounts and the Rendimax current account, structured into the technical forms of
fixed-rate customer deposit accounts for the restricted component and the non index-linked variable rate that
Banca Ifis | 2021 Consolidated financial statements and report
235
can be unilaterally revised by the Group in respect of the rules and contracts, for the technical forms of
unrestricted demand and on-call current accounts. The other main components of funding concern fixed-rate
bond funding, variable-rate self-securitisation operations and loans with the Eurosystem (TLTRO).
As for the assets, loans to customers still largely have floating rates as far as both trade receivables and
corporate financing are concerned.
As for the operations concerning distressed retail loans carried out by the subsidiaries Ifis Npl Investing S.p.A.
and Ifis Npl Servicing S.p.A., the first is characterised by a business model focused on acquiring receivables at
prices lower than their nominal amount, there is a potential interest rate risk associated with the uncertainty
about when the receivables will be collected.
At 31 December 2021, the comprehensive bond portfolio mainly comprises government securities for a
percentage of approximately 87%; the comprehensive average modified duration is approximately 2,5 years.
The corporate department appointed to guarantee the rate risk management is the Capital Markets Central
Department, which, in line with the risk appetite established, defines what action is necessary to pursue this. The
Risk Management Department is responsible for proposing the risk appetite, identifying the most appropriate
risk indicators and monitoring the relevant performance of the assets and liabilities in connection with the pre-
set limits. Senior Management makes annual proposals to the Bank Board as to the policies on lending, funding
and the management of interest rate risk, as well as suggesting appropriate actions by which to ensure that
operations are carried out consistently with the risk policies approved by the Bank.
The Risk Management function periodically reports to the Bank's Board of Directors on the interest rate risk
position by means of a specific monthly report prepared for the Bank's management.
The interest rate risk falls under the category of second-pillar risks. The guidelines on the assumption and
monitoring of market risk are laid out on a Group level in the “Group Banking Book Interest Rate Risk
Management Policy”, which also indicates, for the purpose of a more rigorous and detailed representation of the
process activities, the metrics used for the measuring and monitoring of the risk in question. Monitoring is
performed at the consolidated level.
Considering the extent of the risk assumed, the Banca Ifis Group does not hedge interest rate risk.
The classification of the bonds held as Financial assets measured at fair value through other comprehensive
income introduces the risk that the Group's reserves may fluctuate as a result of the change in their fair value.
There is also a residual portion in equity securities, which belong to the major European indexes and are highly
liquid, including Financial assets measured at fair value through other comprehensive income. A part share of
these assets are economically hedged through derivatives that are part of the trading book.
From a managerial viewpoint, the above assets, relating to the management of the Group's Proprietary Portfolio,
are specifically monitored as regulated in the “Group Market Risk Management Policy”.
Banca Ifis | 2021 Consolidated financial statements and report
236
Quantitative information
1. Banking book: breakdown by residual maturity (re-pricing date) of financial assets and liabilities -
Currency: Euro
Type/Residual maturity
on
demand
up to 3
months
over 3 to
6
months
over 6
months
to 1 year
over 1 to
5 years
over 5 to
10 years
over 10
years
Indefinit
e life
1. On-balance-sheet assets
3.969.502
3.643.891
1.473.814
376.975
1.445.771
762.735
93.314
-
1.1 Debt securities
136
1.084.102
768.657
42.751
260.247
471.669
47.779
-
- with early redemption option
136
354.456
14.282
42.751
59.049
47.983
30.948
-
- other
-
729.646
754.375
-
201.198
423.686
16.831
-
1.2 Loans to banks
6.274
276.535
911
100.840
-
-
-
-
1.3 Loans to customers
3.963.092
2.283.254
704.246
233.384
1.185.524
291.066
45.535
-
- current a/c
111.970
3.831
13.090
5.684
99.937
25.923
6.605
-
- other loans
3.851.122
2.279.423
691.156
227.700
1.085.587
265.143
38.930
-
- with early redemption option
480.555
1.474.412
418.353
36.630
19.230
639
2.102
-
- other
3.370.567
805.011
272.803
191.070
1.066.357
264.504
36.828
-
2. On-balance-sheet liabilities
2.234.453
2.097.312
337.835
512.328
5.255.306
415.909
367.044
-
2.1 Due to customers
2.207.070
459.650
320.179
476.243
1.861.590
5.284
365.724
-
- current a/c
1.223.376
80.715
106.871
137.201
119.111
-
-
-
- other payables
983.694
378.935
213.308
339.042
1.742.479
5.284
365.724
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
983.694
378.935
213.308
339.042
1.742.479
5.284
365.724
-
2.2 Due to banks
27.237
34.265
17.627
36.073
2.739.213
8.344
1.320
-
- current a/c
26.808
-
-
-
-
-
-
-
- other payables
429
34.265
17.627
36.073
2.739.213
8.344
1.320
-
2.3 Debt securities
146
1.603.397
29
12
654.503
402.281
-
-
- with early redemption option
-
-
-
-
-
402.281
-
-
- other
146
1.603.397
29
12
654.503
-
-
-
2.4 Other liabilities
-
-
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
-
-
-
3. Financial derivatives
3.1 With underlying security
- Options
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
- Other derivatives
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
3.2 Without underlying security
- Options
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
- Other derivatives
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
4. Other off-balance-sheet transactions
+ long positions
163.139
-
-
-
-
-
-
-
+ short positions
89.616
2.888
1.781
-
31.459
37.396
-
-
Banca Ifis | 2021 Consolidated financial statements and report
237
1. Banking book: breakdown by residual maturity (re-pricing date) of financial assets and liabilities -
Currency: Other currencies
Type/Residual maturity
on
demand
up to 3
months
over 3 to
6
months
over 6
months
to 1 year
over 1 to
5 years
over 5 to
10 years
over 10
years
Indefinit
e life
1. On-balance-sheet assets
67.697
268.508
15.524
77
2.292
-
-
-
1.1 Debt securities
-
-
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
-
-
-
1.2 Loans to banks
-
-
-
-
-
-
-
-
1.3 Loans to customers
67.697
268.508
15.524
77
2.292
-
-
-
- current a/c
-
-
-
-
-
-
-
-
- other loans
67.697
268.508
15.524
77
2.292
-
-
-
- with early redemption option
563
11.552
1.053
76
71
-
-
-
- other
67.134
256.956
14.471
1
2.221
-
-
-
2. On-balance-sheet liabilities
32.434
401.165
-
-
-
-
-
-
2.1 Due to customers
11.854
142
-
-
-
-
-
-
- current a/c
11.845
-
-
-
-
-
-
-
- other payables
9
142
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
9
142
-
-
-
-
-
-
2.2 Due to banks
20.580
245.533
-
-
-
-
-
-
- current a/c
20.580
-
-
-
-
-
-
-
- other payables
-
245.533
-
-
-
-
-
-
2.3 Debt securities
-
155.490
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
155.490
-
-
-
-
-
-
2.4 Other liabilities
-
-
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
-
-
-
3. Financial derivatives
3.1 With underlying security
- Options
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
- Other derivatives
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
3.2 Without underlying security
- Options
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
- Other derivatives
+ long positions
-
-
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
-
-
4. Other off-balance-sheet transactions
+ long positions
604
-
-
-
-
-
-
-
+ short positions
604
-
-
-
-
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
238
1.2.3 Currency risk
Qualitative information
A. General aspects, management procedures and measurement methods of the currency risk
The assumption of currency risk, intended as an operating element that could potentially improve treasury
performance, represents an operation that is not part of the Group's policies. Banca Ifis's foreign currency
operations largely involve collections and payments associated with factoring operations and in hedging assets
in foreign currencies, like units of UCITs. In this sense, the assets in question are generally hedged with deposits
and/or loans from other banks in the same currency, thus eliminating for the most part the risk of losses
associated with exchange rate fluctuations. In some cases, synthetic instruments are used as hedging
instruments.
A residual currency risk arises as a natural consequence of the mismatch between the clients' borrowings and
the Capital Markets Central Department's funding operations in foreign currency. Such mismatches are mainly
a result of the difficulty in correctly anticipating financial trends connected with factoring operations, with
particular reference to cash flows from account debtors vis-à-vis the maturities of loans granted to customers,
as well as the effect of interest on them.
However, the Capital Markets Central Department strives to minimise such mismatches every day, constantly
realigning the size and timing of foreign currency positions.
Currency risk related to the Group's business is assumed and managed according to the risk policies and limits
set by the Parent company's Board of Directors, with precise delegations of power limiting the autonomy of those
authorised to operate, as well as especially strict limits on the daily net currency position.
The business functions responsible for ensuring the currency risk is managed correctly are: the Capital Markets
Central Department, which, amongst other duties, directly manages the Group’s funding operations and currency
position; the Risk Management function, responsible for selecting the most appropriate risk indicators and
monitoring them with reference to pre-set limits; and the Top Management, which every year, based on the
Capital Markets Central Department's proposals, shall consider these suggestions and make proposals to the
Bank's Board of Directors regarding policies on funding and the management of currency risk, as well as suggest
appropriate actions during the year in order to ensure that operations are conducted consistently with the risk
policies approved by the Group.
Transactions on the Polish market, through the subsidiary Ifis Finance Sp. z o.o. and Ifis Finance I.F.N. S.A., are
no exception to the above approach: assets denominated in Zloty and in Leu are financed through funding in the
same currency.
With the acquisition of the Polish subsidiary, Banca Ifis has assumed the currency risk represented by the initial
investment in Ifis Finance Sp. z o.o.’s share capital for an amount of 21,2 million Zloty and the subsequent share
capital increase for an amount of 66 million Zloty.
As instead for the Rumanian subsidiary Ifis Finance I.F.N. S.A., Banca Ifis assumed the exchange rate risk on its
own at the time of its incorporation through the initial payment in the share capital for a total of 14,7 million
Romanian Leu.
Furthermore, Banca Ifis owns a 4,68% interest in India Factoring and Finance Solutions Private Limited, worth
20 million Indian rupees and with a market value of 3.044 thousand Euro at the historical exchange rate. In 2015
the Bank tested said interest for impairment, recognising a 2,4 million Euro charge in profit or loss. Starting from
Banca Ifis | 2021 Consolidated financial statements and report
239
2016, the fair value was adjusted through equity, bringing the value of the equity interest to 324 thousand Euro
at 31 December 2021.
B. Hedging of currency risk
Considering the size of this investment and the foregoing on the management method, the Bank did not deem it
necessary to hedge the ensuing currency risk.
Quantitative information
1. Distribution of assets, liabilities and derivatives by currency
Items
Currencies
US DOLLAR
UK
STERLING
JAPANESE
YEN
CANADIAN
DOLLAR
SWISS
FRANC
OTHER
CURRENCIES
A. Financial assets
173.156
908
-
-
-
64.992
A.1 Debt securities
-
-
-
-
-
-
A.2 Equity securities
22.951
-
-
-
-
324
A.3 Loans to banks
-
-
-
-
-
-
A.4 Loans to customers
150.205
908
-
-
-
62.228
A.5 Other financial assets
-
-
-
-
-
2.440
B. Other assets
6.674
457
-
-
-
7.391
C. Financial liabilities
222.270
1.071
-
-
-
33.695
C.1 Payables due to banks
214.570
952
-
-
-
29.657
C.2 Payables due to
customers
7.700
119
-
-
-
4.038
C.3 Debt securities
-
-
-
-
-
-
C.4 Other financial liabilities
-
-
-
-
-
-
D. Other liabilities
-
-
-
-
-
2.546
E. Financial derivatives
- Options
+ long positions
-
-
-
-
-
-
+ short positions
-
-
-
-
-
-
- Other
+ long positions
-
-
-
-
-
-
+ short positions
-
-
-
-
-
60.294
Total assets
179.830
1.365
-
-
-
72.383
Total liabilities
222.270
1.071
-
-
-
96.535
Imbalance (+/-)
(42.440)
294
-
-
-
(24.152)
Banca Ifis | 2021 Consolidated financial statements and report
240
1.3 Derivative instruments and hedging policies
1.3.1 Derivative instruments held for trading
A. Financial derivatives
Please see paragraph 1.2 Market risks.
A.1 Financial derivatives held for trading: year-end notional amounts
Underlying
assets/Types of
derivatives
31.12.2021
31.12.2020
Over the counter
Organised
markets
Over the counter
Organised
markets
Central
counterpar
ties
Without central
counterparties
Central
counterpar
ties
Without central
counterparties
With
offsetting
agreement
s
Without
offsetting
agreement
s
With
offsetting
agreement
s
Without
offsetting
agreement
s
1. Debt securities
and interest rates
-
-
747.364
-
-
-
152.435
-
a) Options
-
-
383.988
-
-
-
-
-
b) Swaps
-
-
363.376
-
-
-
152.435
-
c) Forwards
-
-
-
-
-
-
-
-
d) Futures
-
-
-
-
-
-
-
-
e) Other
-
-
-
-
-
-
-
-
2. Equity securities
and share indexes
-
-
21.250
-
-
-
20.230
-
a) Options
-
-
21.250
-
-
-
20.230
-
b) Swaps
-
-
-
-
-
-
-
-
c) Forwards
-
-
-
-
-
-
-
-
d) Futures
-
-
-
-
-
-
-
-
e) Other
-
-
-
-
-
-
-
-
3. Currencies and
gold
-
-
-
-
-
-
-
-
a) Options
-
-
-
-
-
-
-
-
b) Swaps
-
-
-
-
-
-
-
-
c) Forwards
-
-
-
-
-
-
-
-
d) Futures
-
-
-
-
-
-
-
-
e) Other
-
-
-
-
-
-
-
-
4. Commodities
-
-
-
-
-
-
-
-
5. Others
-
-
-
-
-
-
-
-
Total
-
-
768.614
-
-
-
172.665
-
Banca Ifis | 2021 Consolidated financial statements and report
241
A.2 Financial derivatives held for trading: gross positive and negative fair value - breakdown by product
Types of derivatives
31.12.2021
31.12.2020
Over the counter
Organised
markets
Over the counter
Organised
markets
Central
counterpar
ties
Without central
counterparties
Central
counterpar
ties
Without central
counterparties
With
netting
agreement
s
Without
netting
agreement
s
With
netting
agreement
s
Without
netting
agreement
s
1. Positive fair value
a) Options
-
-
1.588
-
-
-
1.056
-
b) Interest rate
swaps
-
-
5.416
-
-
-
18.193
-
c) Cross currency
swaps
-
-
-
-
-
-
-
-
d) Equity swaps
-
-
-
-
-
-
-
-
e) Forwards
-
-
-
-
-
-
-
-
f) Futures
-
-
-
-
-
-
-
-
g) Other
-
-
-
-
-
-
-
-
Total
-
-
7.004
-
-
-
19.249
-
2. Negative fair value
a) Options
-
-
4.628
-
-
-
-
-
b) Interest rate
swaps
-
-
1.363
-
-
-
18.551
-
c) Cross currency
swaps
-
-
-
-
-
-
-
-
d) Equity swaps
-
-
-
-
-
-
-
-
e) Forwards
-
-
-
-
-
-
-
-
f) Futures
-
-
-
-
-
-
-
-
g) Other
-
-
-
-
-
-
-
-
Total
-
-
5.991
-
-
-
18.551
-
Banca Ifis | 2021 Consolidated financial statements and report
242
A.3 OTC financial derivatives held for trading: notional amounts, gross positive and negative fair value
by counterparty
Underlying assets
Central
counterparties
Banks
Other financial
companies
Other entities
Contracts not included in netting agreements
1) Debt securities and interest rates
- notional amount
X
735.587
-
11.778
- positive fair value
X
4.522
-
1.199
- negative fair value
X
5.991
-
-
2) Equity securities and share indexes
- notional amount
X
21.250
-
-
- positive fair value
X
1.283
-
-
- negative fair value
X
-
-
-
3) Currencies and gold
- notional amount
X
-
-
-
- positive fair value
X
-
-
-
- negative fair value
X
-
-
-
4) Goods
- notional amount
X
-
-
-
- positive fair value
X
-
-
-
- negative fair value
X
-
-
-
5) Other
- notional amount
X
-
-
-
- positive fair value
X
-
-
-
- negative fair value
X
-
-
-
Contracts included in netting agreements
1) Debt securities and interest rates
- notional amount
-
-
-
-
- positive fair value
-
-
-
-
- negative fair value
-
-
-
-
2) Equity securities and share indexes
- notional amount
-
-
-
-
- positive fair value
-
-
-
-
- negative fair value
-
-
-
-
3) Currencies and gold
- notional amount
-
-
-
-
- positive fair value
-
-
-
-
- negative fair value
-
-
-
-
4) Goods
- notional amount
-
-
-
-
- positive fair value
-
-
-
-
- negative fair value
-
-
-
-
5) Other
- notional amount
-
-
-
-
- positive fair value
-
-
-
-
- negative fair value
-
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
243
A.4 Residual life of OTC financial derivatives: notional amounts
Underlying assets/Residual life
Up to 1 year
Over 1 to 5
years
Over 5 years
Total
A.1 Financial derivatives on debt securities and interest rates
84.280
173.285
489.800
747.365
A.2 Financial derivatives on equity securities and share indexes
21.249
-
-
21.249
A.3 Financial derivatives on exchange rates and gold
-
-
-
-
A.4 Financial derivatives on commodities
-
-
-
-
A.5 Other financial derivatives
-
-
-
-
Total 31.12.2021
105.529
173.285
489.800
768.614
Total 31.12.2020
86.499
76.877
9.289
172.665
1.4 Liquidity risk
Qualitative information
A. General aspects, management procedures and measurement methods of the liquidity risk
The liquidity risk refers to the possibility that the Group fails to service its debt obligations due to the inability to
raise funds or sell enough assets on the market to address liquidity needs. The liquidity risk also refers to the
inability to secure new adequate financial resources, in terms of amount and cost, to meet its operating needs
and opportunities, hence forcing the Group to either slow down or stop its operations, or incur excessive funding
costs in order to service its obligations, significantly affecting its profitability.
During 2021, in line with the strategy defined in the funding plan, the Group increased the securitised funding
component, both placed directly with institutional investors and used indirectly as collateral in medium-term
repo transactions with institutional investors. The other main forms of funding (funding from customers,
Eurosystem, bond issues) remained substantially stable.
At 31 December 2021, the main funding sources were equity, on-line retail funding - consisting of on-demand
and term deposits - medium/long-term bonds issued as part of the EMTN programme, funding from the
Eurosystem (TLTRO) and medium/long-term securitisation transactions from the Abaco channel at the Bank of
Italy.
The Group's operations consist in factoring operations, which focus mainly on trade receivables and receivables
due from Italy's public administration maturing within the year, and medium/long-term receivables deriving
mainly from leasing, corporate banking, structured finance, and work-out and recovery operations.
As for the Group's operations concerning the Npl Segment and the segment relative to purchases of tax
receivables arising from insolvency proceedings, the characteristics of the business model imply a high level of
variability concerning both the amount collected and the date of actual collection. Therefore, the timely and
careful management of cash flows is particularly important. To ensure expected cash flows are correctly
assessed, also with a view to correctly pricing the transactions undertaken, the Group carefully monitors the
trend in collections compared to expected flows.
The amount of high-quality liquidity reserves (mainly held by the Group in its account with the Bank of Italy and
government bonds forming part of the intra-day reserve) makes it possible to meet regulatory requirements (with
respect to the limits of LCR and NSFR) and internal requirements relating to prudent management of liquidity
risk.
Banca Ifis | 2021 Consolidated financial statements and report
244
The Group is constantly striving to improve the state of its financial resources, in terms of both size and cost, so
as to have available liquidity reserves adequate for current and future business volumes.
The corporate functions of the Parent company responsible for ensuring the correct application of the liquidity
policy are the Capital Markets function, which is responsible for the direct management of liquidity, the Risk
Management function, which is responsible for proposing the risk appetite, identifying the most appropriate risk
indicators and monitoring their performance in relation to the set limits and supporting the activities of Top
Management. The latter has the task, with the support of the Capital Markets function, of proposing funding and
liquidity risk management policies to the Board of Directors on an annual basis and suggesting during the course
of the year any appropriate measures to ensure that activities are carried out in full compliance with approved
risk policies.
As part of the continuous process to update procedures and policies concerning liquidity risk, and taking into
account the changes in the relevant prudential regulations, the Parent company uses an internal liquidity risk
governance, monitoring, and management framework at the Group level.
In compliance with supervisory provisions, the Group also has a Contingency Funding Plan aimed at protecting
it from losses or threats arising from a potential liquidity crisis and guaranteeing business continuity even in the
midst of a serious emergency arising from its own internal organisation and/or the market situation.
The liquidity risk position is periodically reported by the Risk Management function to the Bank's Board of
Directors.
With reference to the Polish and Rumanian subsidiaries, treasury operations are coordinated by the Parent
company.
Impacts deriving from the Covid-19 pandemic
In the period of greatest market turbulence, following the Covid-19 pandemic, the available, readily usable
liquidity reserves remained plentiful in respect of the Group's obligations, constantly noting, for the regulatory
indicators LCR and NSFR, values significantly higher than the thresholds required. Also in terms of survival
period, which considers the onset of a severe combined stress scenario, values were recorded that are in line
with the defined risk appetite.
With regard to the evolution of funding volumes attributable to the effects of the pandemic during 2021, available
liquidity remained at levels significantly above regulatory and internal limits and significantly higher than at the
end of 2020.
In line with the strategy described in terms of management and risk appetite, despite the exceptional nature of
the pandemic, during 2021, no violations were seen to the risk thresholds assigned internally.
Banca Ifis | 2021 Consolidated financial statements and report
245
Quantitative information
1. Breakdown by residual contractual duration of financial assets and liabilities - Currency: Euro
Items/Duration
on
demand
over 1 to
7 days
over 7 to
15 days
over 15
days to 1
month
over 1 to
3
months
over 3 to
6
months
over 6
months
to 1 year
over 1 to
5 years
Over 5
years
indefinite
life
On-balance-sheet assets
A.1 Government bonds
376
-
380
-
1.230
599.655
185.030
800.500
518.000
-
A.2 Other debt securities
1.382
92
355
330
1.111
5.890
9.068
249.473
592.021
-
A.3 UCITS units
56.101
-
-
-
-
-
-
-
-
-
A.4 Loans
1.011.234
44.894
169.240
339.807
1.370.454
472.989
740.517
3.092.213
951.493
363.550
- banks
3.945
-
-
1.890
27.925
881
100.840
-
-
348.852
- customers
1.007.289
44.894
169.240
337.917
1.342.529
472.108
639.677
3.092.213
951.493
14.698
On-balance-sheet liabilities
B.1 Deposits and current
accounts
1.715.909
28.706
42.128
87.979
1.186.566
321.261
479.539
1.834.068
-
-
- banks
69.232
-
-
-
-
-
-
-
-
-
- customers
1.646.677
28.706
42.128
87.979
1.186.566
321.261
479.539
1.834.068
-
-
B.2 Debt securities
147
-
-
1
15
12.116
18.012
648.761
400.000
-
B.3 Other liabilities
246.976
253
3.119
977.024
16.084
9.816
50.397
2.725.887
433.423
-
Off-balance-sheet
transactions
C.1 Financial derivatives with
exchange of underlying assets
- long positions
4.187
-
-
-
445
-
2.028
-
442
-
- short positions
-
-
-
-
442
-
-
-
445
-
C.2 Financial derivatives
without exchange of
underlying assets
- long positions
2.817
-
-
-
-
-
-
-
-
-
- short positions
5.992
-
-
-
-
-
-
-
-
-
C.3 Deposits and loans to be
received
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.4 Commitments to disburse
funds
- long positions
70.833
1.441
-
2.172
2.094
1.978
-
44.697
39.925
-
- short positions
89.617
-
-
1.544
1.343
1.781
-
31.459
37.396
-
C.5 Financial guarantees
granted
-
-
-
-
-
-
-
-
-
-
C.6 Financial guarantees
received
-
-
-
-
-
-
-
-
-
-
C.7 Credit derivatives with
exchange of underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.8 Credit derivatives without
exchange of underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
Banca Ifis | 2021 Consolidated financial statements and report
246
1. Breakdown by residual contractual duration of financial assets and liabilities - Currency: Other
currencies
Items/Duration
on
demand
over 1 to
7 days
over 7 to
15 days
over 15
days to 1
month
over 1 to
3
months
over 3 to
6
months
over 6
months
to 1 year
over 1 to
5 years
Over 5
years
indefinit
e life
On-balance-sheet assets
A.1 Government bonds
-
-
-
-
-
-
-
-
-
-
A.2 Other debt securities
-
-
-
-
-
-
-
-
-
-
A.3 UCITS units
229.511
-
-
-
-
-
-
-
-
-
A.4 Loans
322.818
108.323
40.176
427.112
60.841.676
216.993
19.783
21.177
-
-
- banks
-
-
-
-
-
-
-
-
-
-
- customers
322.818
108.323
40.176
427.112
60.841.676
216.993
19.783
21.177
-
-
On-balance-sheet liabilities
-
-
-
-
-
-
-
-
-
-
B.1 Deposits and current
accounts
82.938
236.297
126.388
11.828
47.747
-
-
-
-
-
- banks
-
236.297
126.388
11.828
47.745
-
-
-
-
-
- customers
82.938
-
-
-
2
-
-
-
-
-
B.2 Debt securities
-
-
-
-
-
-
-
-
-
-
B.3 Other liabilities
69
2.030.986
-
-
-
-
-
-
-
-
Off-balance-sheet
transactions
C.1 Financial derivatives with
exchange of underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.2 Financial derivatives
without exchange of
underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.3 Deposits and loans to be
received
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.4 Commitments to disburse
funds
- long positions
42
-
-
-
-
5.828
-
-
-
-
- short positions
5.336
-
-
-
-
-
-
-
-
-
C.5 Financial guarantees
granted
-
-
-
-
-
-
-
-
-
-
C.6 Financial guarantees
received
-
-
-
-
-
-
-
-
-
-
C.7 Credit derivatives with
exchange of underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
C.8 Credit derivatives without
exchange of underlying assets
- long positions
-
-
-
-
-
-
-
-
-
-
- short positions
-
-
-
-
-
-
-
-
-
-
Self-securitisation transactions
Indigo Lease
In December 2016, the Banca Ifis Group, through the merged company, the former Ifis Leasing S.p.A. (originator)
finalised a securitisation that involved selling a portfolio of performing loans totalling 489 million Euro to the
special purpose vehicle Indigo Lease S.r.l.
The transaction was rated by Moody's and DBRS. The same agencies will carry out annual monitoring throughout
the transaction.
The initial purchase price of the assigned receivables portfolio, equal to 489 million Euro, was paid by the vehicle
to the merged entity, the former Ifis Leasing S.p.A. using funds raised from the issue of senior notes for an
Banca Ifis | 2021 Consolidated financial statements and report
247
amount of 366 million Euro. These received an AA3 (sf) rating from Moody's and an AA (sf) rating from DBRS,
and their redemption is connected to the collections realised on the receivables portfolio. The vehicle also issued
junior securities purchased by the former Ifis Leasing S.p.A. (now merged into Banca Ifis S.p.A.), which has not
been assigned a rating, for a value of 138 million Euro. In addition, the latter received a specific servicing mandate
to collect and manage the receivables.
During 2017, following the transaction restructuring, a revolving system was launched involving monthly
assignments of new credit to the SPV, until July 2021. At the same time, the maximum nominal amount of the
senior and junior notes was increased respectively to 609,5 and 169,7 million Euro. In the same period, the parent
company Banca Ifis S.p.A. acquired all the senior notes issued by the vehicle. Following the May 2018 merger of
the former Ifis Leasing S.p.A., Banca Ifis also became the subscriber of the junior notes.
At 31 December 2021 the Banca Ifis Group had therefore subscribed for all the notes issued by the vehicle.
It should be noted that, pursuant to the terms and conditions of the operation, there is no substantial transfer of
all the risks and rewards relating to the transferred assets (receivables).
Ifis Npl 2021-1 Spv
In March 2021, Banca Ifis realised for financing purposes, through its subsidiary Ifis Npl Investing S.p.A.
(formerly Ifis Npl S.p.A.), it had implemented the very first securitisation in Italy of a non-performing portfolio
mainly comprising unsecured loans backed by assignment orders. The transaction is an innovative solution for
this type of non-performing exposure, where the debt collection procedure through compulsory enforcement
(attachment of one fifth of the salary) is at an advanced stage. The transaction aimed to collect funding for Ifis
Npl Investing S.p.A. of up to 350 million Euro in liquidity on the institutional market, without deconsolidating the
underlying credits. The loan portfolios concerned by the transaction (a portfolio of secured loans and an
unsecured portfolio backed by assignment orders) owned by the subsidiary Ifis Npl Investing, was transferred
to a newly-established SPV called Ifis Npl 2021-1 Spv S.r.l., which issued senior, mezzanine and junior notes.
These tranches were initially fully subscribed by Ifis Npl Investing, and subsequently the senior tranches (net of
the 5% retained by Ifis Npl Investing as originator pursuant to the retention rule) were sold to Banca Ifis.
At 31 December 2021 the Banca Ifis Group had therefore subscribed all the notes issued by the vehicle. It should
be noted that the senior tranches held by Banca Ifis were used for long term repo transactions with leading
banking counterparties.
On the basis of the contractual terms underlying the securitisation in question, there is no substantial transfer
of all the risks and rewards relating to the receivables being sold to the vehicle company.
Securitisation transactions
As for the securitisations outstanding at 31 December 2021 and their purpose, see the comments in the section
on credit risks.
1.5 Operational risks
Qualitative information
A. General aspects, management procedures and measurement methods concerning operational risk
Operational risk is the risk of losses arising from inadequate or dysfunctional processes, human resources,
internal systems or external events. This definition does not include strategic risk and reputational risk, but it
does include legal risk (i.e. the risk of losses deriving from failure to comply with laws or regulations, contractual
or extra-contractual liability, or other disputes), IT risk, risk of non-compliance, fraud risk, risk of money
laundering and terrorist financing, and the risk of financial misstatement.
Banca Ifis | 2021 Consolidated financial statements and report
248
The main sources of operational risk are operational errors, inefficient or inadequate operational processes and
controls, internal and external frauds, the lack of compliance of internal regulations to the external regulations,
the outsourcing of business functions, the quality of physical and logical security, inadequate or unavailable
hardware or software systems, the growing reliance on automation, staff below strength relative to the size of
the business, and inadequate human resources management and training policies.
The Banca Ifis Group has adopted for a while now - consistently with the relevant regulatory provisions and
industry best practices - an operational risk management framework. This consists in a set of rules, procedures,
resources (human, technological and organisational), and controls aiming to identify, assess, monitor, prevent
or mitigate all existing or potential operational risks in the various organisational units, as well as to
communicate them to the competent levels. The key processes for properly managing operational risks are the
Loss Data Collection and Risk Self-Assessment.
The Loss Data Collection process has now been consolidated, also thanks to Risk Management's constant
efforts to disseminate a culture of pro-actively managing operational risks among the various structures, and
therefore to raise awareness about the Loss Data Collection process.
In the fourth quarter of 2021, the Group launched the periodic Risk Self-Assessment campaign, which included
100% of the scope at the end of the year. The aim is to identify the main operational issues and to define specific
mitigation measures to bolster operational risk controls were subsequently defined and launched.
During the same period, Risk Management also launched the Model Risk Self Assessment campaign, which was
carried out considering the organisational units as Model Owners present at the Parent company and the
subsidiary Ifis Npl Investing S.p.A., insofar as the responsibility for the development and maintenance of the
related models is attributed to the Parent company Risk Management. Following the campaign, currently being
completed, the models most exposed to the risk will be identified and reported to the Validation department in
order to define the suitable mitigating actions.
In addition, according to its operational risk management framework, the Group defines a set of risk measures
that can promptly identify the presence of vulnerabilities in the exposure of the Bank and its subsidiaries to
operational risks. These measures are continuously monitored and disclosed in periodic reports that are shared
with the competent structures and bodies: events such as the breach of certain thresholds or the emergence of
anomalies trigger specific escalation processes aimed at defining and implementing appropriate mitigation
actions.
Moreover, in order to prevent and manage operational risk, the Parent's Risk Management, working together with
other business functions, in supervising the risks connected with the outsourcing of operational functions as
well assessing the outsourcing of operational functions and in assessing the risks associated with the
introduction of new products and services. Finally, it helps monitor IT risk as well as the effectiveness of the
measures intended to protect ICT resources.
Concerning the companies of the Banca Ifis Group, please note that currently the management of operational
risks is guaranteed by the strong involvement of the Parent company, which makes decisions in terms of
strategies, also in respect of risk management.
To calculate capital requirements against operational risks, the Group adopted the Basic Indicator Approach.
Alongside operational risk, reputational risk is also managed.
Banca Ifis | 2021 Consolidated financial statements and report
249
Reputational risk represents the current or prospective risk of a decrease in profits or capital deriving from a
negative perception of the Group's image by customers, counterparties, shareholders, investors or the
Supervisory Authorities.
Reputational risk is considered a second-level risk, as it is generated by the manifestation of other types of risk,
such as the risk of non-compliance, strategic risk and in particular operational risks.
As in the case of operational risk, the Parent's Risk Management is responsible for managing reputational risk:
it defines the Group's overall framework - in accordance with the relevant regulations as well as industry best
practices - for the management of reputational risk, with the goal of identifying, assessing, and monitoring the
reputational risks that the Group's Companies or organisational units assume or may assume. The framework
involves collecting reputational risk events as they occur, conducting a forward-looking Reputational Risk Self-
Assessment, and monitoring a set of risk measures over time.
Impacts deriving from the Covid-19 pandemic
With reference to the impacts of the Covid-19 emergency, in 2020, the operational and reputational risk
management strategies changed, both following specific requests in this respect by the regulator and in order
to recalibrate the internal control system in order to make the monitoring activities more in line with the altered
procedures for carrying out certain types of business following the restrictions imposed.
Following the easing of restrictive measures and the subsequent resumption of business activities on an
ordinary operating scale, the strategies for managing operational and reputational risks were also gradually
readjusted.
In particular, the methods of carrying out risk management activities relating to monitoring and reporting in the
various areas (e.g., disputes, NPLs, etc.), as well as the key risk indicators, which had been reshuffled with a view
to making controls more consistent with the various operating conditions and business needs, were restored to
regular levels and have not undergone any further changes.
Section 4 - Risks of the other entities
Qualitative information
There were no additional material risks for the other entities included in the scope of consolidation that are not
part of the Banking Group other than those reported in the section dedicated to the Banking Group.
250
Banca Ifis | 2021 Consolidated financial statements and report
4.6 Part F - Consolidated equity
Section 1 - Consolidated Equity
A. Qualitative information
Managing equity concerns a set of policies and decisions necessary to establish capital levels that are
consistent with the assets and risks taken by the Group. The Banca Ifis Group is subject to the capital adequacy
requirements established by the so-called Basel Committee (CRR/CRD IV).
The Board of Directors constantly monitors that the Group meets the minimum supervisory requirements, and
therefore the capital adequacy ratios, as well as complies with the capital limits set out in the Risk Appetite
Framework (RAF).
Furthermore, also in accordance with the European Central Bank's recommendation of 28 January 2015, the
Group ensures compliance with capital adequacy ratios through a pay-out policy linked to the achievement of
the above minimum capital requirements, as well as the careful assessment of the potential impact of
extraordinary financial operations (share capital increases, convertible loans, etc.).
The Group's capital adequacy is further assessed and monitored every time an extraordinary operation is
planned. In these cases, based on available information regarding said operations, the Group estimates the
impact on capital adequacy ratios as well as the RAF, and considers any measures necessary to meet the
requirements.
Transactions on treasury shares
At 31 December 2020, Banca Ifis held 351.427 treasury shares recognised at a market value of 2,9 million Euro
and a nominal amount of 351.427 Euro.
During the year, Banca Ifis, as variable pay for the 2016 and 2017 results, awarded the Top Management 12.288
treasury shares at an average price of 33,98 Euro, for a total of 418 thousand Euro and a nominal amount of
12.288 Euro, making profits of 317 thousand Euro that, in compliance with IAS/IFRS standards, were recognised
under the premium reserve.
The remaining balance at the end of the year was 339.139 treasury shares with a market value of 2,8 million Euro
and a nominal amount of 339.139 Euro.
Banca Ifis | 2021 Consolidated financial statements and report
251
B. Quantitative information
B.1 Consolidated equity: breakdown by type of entity
Equity items
Prudential
consolidati
on
Insurance
firms
Other
entities
Consolidation
eliminations &
adjustments
Total
1. Share capital
68.460
-
6.500
(6.500)
68.460
2. Share premiums
106.797
-
-
-
106.797
3. Reserves
1.382.509
-
160.697
(168.649)
1.374.557
4. Equity instruments
-
-
-
-
-
5. (Treasury shares)
(2.847)
-
-
-
(2.847)
6. Valuation reserves:
(25.357)
-
(25)
-
(25.382)
- Equity securities measured at fair value
through other comprehensive income
(12.500)
-
-
-
(12.500)
- Hedging of equity securities measured at
fair value through other comprehensive
income
-
-
-
-
-
- Financial assets (other than equity
securities) measured at fair value through
other comprehensive income
(3.733)
-
-
-
(3.733)
- Property, plant and equipment
-
-
-
-
-
- Intangible assets
-
-
-
-
-
- Foreign investment hedges
-
-
-
-
-
- Cash flow hedges
-
-
-
-
-
- Hedging instruments [non-designated
items]
-
-
-
-
-
- Exchange differences
(8.529)
-
-
-
(8.529)
- Non-current assets under disposal
-
-
-
-
-
- Financial liabilities measured at fair value
through profit or loss (changes in own
credit risk)
-
-
-
-
-
- Actuarial gains (losses) on defined benefit
pension plans
(595)
-
(25)
(620)
- Share of valuation reserves of equity
accounted investments
-
-
-
-
-
- Specific revaluation laws
-
-
-
-
-
7. Profit (loss) for the year (+/-) of the Group
and non-controlling interests
94.326
-
7.977
-
102.303
Total
1.623.888
-
175.149
(175.149)
1.623.888
The above table shows the components of equity, combining those of the Group and those of third parties,
broken down by type of businesses included in the scope of consolidation. More specifically, the column
referring to Prudential Consolidation shows the amount resulting from the consolidation of the entities that form
part of the Banking Group, excluding the effect of the prudential consolidation and including the economic
effects of transactions carried out with other entities included in the scope of consolidation. The column Other
entities shows the amounts resulting from the consolidation, including the economic effects of transactions
carried out with entities that form part of the Banking Group. The column “Consolidation eliminations and
adjustments” shows the adjustments necessary to obtain the reported amount.
Banca Ifis | 2021 Consolidated financial statements and report
252
B.2 Valuation reserves for financial assets measured at fair value through other comprehensive
income: breakdown
Assets/Amounts
Prudential
consolidation
Insurance
companies
Other entities
Consolidation
eliminations &
adjustments
Total
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
1. Debt securities
126
(3.859)
-
-
-
-
-
-
126
(3.859)
2. Equity securities
1.850
(14.350)
-
-
-
-
-
-
1.850
(14.350)
3. Loans
-
-
-
-
-
-
-
-
-
-
Total 31.12.2021
1.976
(18.209)
-
-
-
-
-
-
1.976
(18.209)
Total 31.12.2020
2.254
(12.987)
-
-
-
-
-
-
2.254
(12.987)
B.3 Valuations reserves for financial assets measured at fair value through other comprehensive
income: annual changes
Debt
securities
Equity
securities
Loans
1. Opening balance
1.791
(12.524)
-
2. Increases
5.909
6.810
-
2.1 Fair value gains
3.116
5.969
-
2.2 Credit risk losses
32
X
-
2.3 Reclassification to profit or loss of negative reserves from sale
1
X
-
2.4 Transfers to other components of equity (equity securities)
-
-
-
2.5 Other changes
2.760
841
-
3. Decreases
11.433
6.786
-
3.1 Fair value losses
6.480
4.599
-
3.2 Reversals of credit risk losses
-
X
-
3.3 Reclassification to profit or loss of positive reserves from sale
4.939
X
-
3.4 Transfers to other components of equity (equity securities)
-
1.590
-
3.5 Other changes
14
597
-
4. Closing balance
(3.733)
(12.500)
-
B.4 Valuation reserves for defined benefit plans: annual changes
Valuation reserves for defined benefit plans show a negative balance at 31 December 2020 of 609 thousand
Euro, comprising a negative balance of 648 thousand Euro pertaining to the Parent and a positive balance of 39
thousand Euro pertaining to minorities. The reduction in the item as compared with the negative value of 363
thousand Euro at the end of the previous year, derives from the net actuarial losses accrued during 2021 on the
Group companies’ severance indemnity.
Banca Ifis | 2021 Consolidated financial statements and report
253
Section 2 - Own funds and prudential ratios
In application of Circular 262/2005 of the Bank of Italy and related updates, the section on own funds and capital
ratios is replaced by a reference to the “Pillar 3” disclosures, which contain similar information.
That said, below are the highlights about own funds and capital ratios.
The Board of Directors of the Holding Company of the “La Scogliera” Banking Group, which met in an
extraordinary meeting on 27 December 2021, having acknowledged the fulfilment of the conditions precedent
attached to the resolution of the extraordinary meeting on 18 June 2021, resolved to approve the transfer of the
registered office outside the European Union (Switzerland with Lausanne office) and the related change of name
to La Scogliera SA with the secondary office remaining in Italy.
On the basis of the changes made at corporate level recorded early 2022, the consolidated capital requirements
at 31 December 2021 were calculated without the inclusion of La Scogliera Holding.
Consolidated own funds, risk-weighted assets and prudential ratios at 31 December 2021 were calculated based
on the regulatory changes introduced by Directive no. 2019/878/EU (CRD V) and Regulation (EU) no. 876/2019
(CRR2), which amended the regulatory principles set out in Directive no. 2013/36/EU (CRD IV) and Regulation
(EU) no. 575/2013 (CRR), as subsequently amended, which were transposed in the Bank of Italy's Circulars no.
285 and no. 286.
31.12.2021
31.12.2020
A. Common Equity Tier 1(1) (CET1) before application of prudential filters
1.533.725
1.175.825
of which CET1 instruments subject to transitional provisions
-
-
B. CET1 prudential filters (+/-)
(773)
(954)
C. CET1 gross of items to be deducted and the effects of the transitional regime (A+/-
B)
1.532.952
1.174.871
D. Items to be deducted from CET1
(1)
80.559
156.196
E. Transitional regime - Impact on CET1 (+/-), including minority interests subject to
transitional provisions
(1)
34.487
20.040
F. Total Common Equity Tier 1 (CET1) (C-D+/-E)
1.486.880
1.038.715
G. Additional Tier 1 Capital (AT1) gross of items to be deducted and the effects of the
transitional regime
1.744
53.142
of which AT1 instruments subject to transitional provisions
-
-
H. Items to be deducted from AT1
-
-
I. Transitional regime - Impact on AT1 (+/-), including instruments issued by
subsidiaries that are given recognition in AT1 pursuant to transitional provisions
-
-
L. Total Additional Tier 1 Capital (AT1) (G-H+/-I)
1.744
53.142
M. Tier 2 Capital (T2) gross of items to be deducted and the effects of the transitional
regime
402.722
274.563
of which T2 instruments subject to transitional provisions
-
-
N. Items to be deducted from T2
-
-
O. Transitional regime - Impact on T2 (+/-), including instruments issued by
subsidiaries that are given recognition in T2 pursuant to transitional provisions
-
-
P. Total Tier 2 Capital (T2) (M-N+/-O)
402.722
274.563
Q. Total own funds (F+L+P)
1.891.346
1.366.421
(1)
Reclassified at 31 December 2020 7,4 million Euro from item D to item E
Banca Ifis | 2021 Consolidated financial statements and report
254
Categories/Amounts
Non-weighted amounts
Weighted amounts /
requirements
31.12.2021
31.12.2020
31.12.2021
31.12.2020
A. RISK ASSETS
A.1 Credit risk and counterparty risk
13.807.148
12.636.358
8.638.260
8.272.314
1. Standardised approach
13.688.600
12.557.383
8.555.169
8.193.252
2. Approach based on internal ratings
-
-
-
-
2.1 Basic indicator approach
-
-
-
-
2.2 Advanced measurement approach
-
-
-
-
3. Securitisation programmes
118.548
78.975
83.091
79.062
B. REGULATORY CAPITAL REQUIREMENTS
B.1 Credit risk and counterparty risk
691.061
661.785
B.2 Credit and counterparty valuation adjustment risk
2.822
351
B.3 Regulatory risk
-
-
B.4 Market risks
6.527
4.606
1. Standard method
6.527
4.606
2. Internal models
-
-
3. Concentration risk
-
-
B.5 Operational risk
70.230
69.576
1. Basic indicator approach
70.230
69.576
2. Standardised approach
-
-
3. Advanced measurement approach
-
-
B.6 Other calculation factors
-
-
B.7 Total prudential requirements
770.640
736.318
C. RISK ASSETS AND CAPITAL REQUIREMENT RATIOS
C.1 Risk-weighted assets
9.633.003
9.203.971
C.2 Common Equity Tier 1 capital / Risk-weighted assets (CET1 Capital ratio)
15,44%
11,29%
C.2 Tier 1 Capital / Risk-weighted assets (Tier 1 capital ratio)
15,45%
11,86%
C.4 Total own funds / Risk-weighted assets (Total capital ratio)
19,63%
14,85%
When comparing the results, please note that the Bank of Italy, following the Supervisory Review and Evaluation
Process (SREP) to review the capitalisation targets of the system's largest intermediaries, notified the Banca Ifis
Group that it needed to meet the following consolidated capital requirements in 2021, just like in 2020, including
a 2,5% capital conservation buffer:
• Common Equity Tier 1 (CET1) capital ratio of 8,12%, with a required minimum of 5,62%;
• Tier 1 Capital Ratio of 10,0%, with a required minimum of 7,5%;
• Total Capital Ratio of 12,5%, with a required minimum of 10,0%.
At 31 December 2021, the Banca Ifis Group met the above prudential requirements.
Banca Ifis | 2021 Consolidated financial statements and report
255
4.7 Part G - Business combinations
Section 1 - Transactions carried out during the year
1.1 Business combinations
Within the framework of an intervention shared with the Interbank Deposit Protection Fund (FITD) and aimed at
guaranteeing the depositors of Aigis Banca, placed in compulsory administrative liquidation by the Ministry of
Economy and Finance, the Bank of Italy, which appointed the Liquidator Commissioner of Aigis Banca, approved
the transfer of its assets, liabilities and legal relationships to Banca Ifis. On 23 May 2021, the Liquidator of Aigis
Banca stipulated the final deed of sale with Banca Ifis. The perimeter acquired by Banca Ifis included, on the
assets side, in addition to its own bond portfolio (mainly government bonds), loans to small and medium-sized
businesses mainly consisting of medium/long-term loans backed by guarantees from Mediocredito Centrale
(MCC) and factoring loans. On the liabilities side, the acquisition mainly involved deposits, including those of
retail customers; in addition, the personnel working in the Milan, Rome and Bari offices were transferred.
Excluded are: securities related to Greensill Bank AG, in a state of insolvency, tax assets, the subordinate
debenture loan issued by Aigis Banca and some contracts considered not functional to the transaction. The
price paid by Banca Ifis, as a token, is one Euro.
Under IFRS 3, at the date of the business combination, the entity must identify the cost of the business
combination and allocate it to the acquiree's identifiable assets, liabilities, and contingent liabilities at the
acquisition date and measured at their fair values at the same date.
Declining the requirements of IFRS 3 to the transaction in question, the cost incurred for the acquisition of the
former Aigis Banca branch is defined as 1 Euro, equal to the consideration paid. The contract for the sale of the
business unit was signed on 23 May 2021 and is effective as of that date between the parties and vis-à-vis third
parties. Consequently, a specific accounting statement was prepared as of 23 May 2021, the date designated
for the purpose of recognising the business combination.
As regards the purchase price allocation (“PPA”) of the aggregation to assets, liabilities and potential liabilities
of the subject acquired, as can be identified at the purchase date and measured at their respective fair values, a
preventive mapping has been carried out of all the assets and liabilities for which it was considered likely to
encounter significant differences in value between the fair value and the respective carrying amount. With
reference to the acquisition of the former Aigis Banca business unit, the receivables portfolio, the securities
portfolio, intangible assets and potential liabilities were analysed for PPA purposes.
In particular, the fair values identified for the performing portfolio were determined on the basis of the discounted
cash flow method or by discounting the forecast cash flows from the portfolio valued. To this end, cash flows
and discounting rates to be applied to such, needed to be identified on the basis of the following assumptions.
The cash flows of the performing portfolio were determined on the basis of the gross cash flows deriving from
the contractual amortisation plan and discounted on the basis of an average market rate representative of the
return required by a potential investor as well as the riskiness of the loan being evaluated.
As regards the non-performing portfolio, the related fair values have been identified using, depending on the type
of underlying receivable, the average prices recorded on the market in sales of impaired loans or the discounted
cash flow method described previously.
For the purposes of applying the above method, amounts due from customers have been segmented into
homogeneous portfolios by type.
Banca Ifis | 2021 Consolidated financial statements and report
256
Overall, the process of valuing receivables due from customers revealed a lower portfolio value of 3.651
thousand Euro.
With regard to the securities portfolio, consisting primarily of Italian government securities, for the purposes of
restating the fair value, reference was made to the market price of each security on 23 May 2021, taking into
account the data obtained from the Telekurs infoprovider, resulting in a negative change in fair value of 942
thousand Euro.
As instead regards tax assets and liabilities and any intangible assets not booked by Aigis Banca and potentially
able to be recorded during the business combination (e.g. trademarks, customers and contracts), the analyses
carried out on such did not reveal any values that can be represented for IFRS 3 purposes. On the other hand, at
the time of the PPA, the amortisation period of the software in use at Aigis was accelerated as it was no longer
usable and could not be resold, and as the individual assets and liabilities were migrated to the Banca Ifis
systems. The impact of this adjustment on the balance as of 23 May 2021 is 491 thousand Euro.
Finally, in line with the provisions of IFRS 3, a fair value assessment of potential liabilities, including associated
legal expenses, was carried out in order to determine the value of any potential liabilities not recorded in the
financial statements of the former Aigis Banca branch. This analysis was carried out through discussion with
Company management and through analysis of documents made available on outstanding litigation liabilities
for the branch, as well as additional analysis conducted internally regarding MCC practices. The analysis
revealed the need to make the following additional provisions totalling 10.153 thousand Euro.
Banca Ifis | 2021 Consolidated financial statements and report
257
The table below gives the main equity details on the assets and liabilities acquired for the former Aigis Banca
BU at the aggregation date.
Description
(in thousands of Euro)
Assets and
liabilities acquired
at 23.05.2021
Assets and
liabilities acquired
at fair value
Fair value
adjustment
Cash and cash equivalents
(*)
94.169
94.169
-
Financial assets measured at fair value through profit
or loss
2.506
2.506
-
Debt securities at amortised cost
156.630
155.688
(942)
Loans to banks and customers
329.123
325.472
(3.651)
Property, plant and equipment
2.018
2.018
-
Intangible assets
491
-
(491)
Other assets
9.069
9.069
-
Assets acquired
594.006
588.922
(5.084)
Financial liabilities at amortised cost
(564.463)
(564.463)
-
Other liabilities
(9.879)
(9.879)
-
Post-employment benefits
(203)
(203)
-
Provisions for risks and charges
(1.365)
(11.518)
(10.153)
Liabilities assumed
(575.910)
(586.063)
(10.153)
Net assets (A)
18.096
2.859
(15.237)
Price of the acquisition, disbursed using liquid funds
(B)
X
-
X
Negative value difference (gain on bargain purchase)
from the acquisition (C = B - A)
X
(2.859)
X
(*) This item includes the payment of 38,6 million Euro made by the Interbank Deposit Protection Fund in support of the branch of
the former Aigis Banca.
Analysis of acquisition cash flow
(in thousands of Euro)
Price of the acquisition, disbursed using liquid funds
-
Costs of the purchase (included in cash flows from operations)
-
Net funds acquired with the subsidiary (included in cash flows of investments)
94.169
Net cash flow from acquisition (*)
94.169
(*) This item includes the payment of 38,6 million Euro made by the Interbank Deposit Protection Fund (FITD) as part of the operation
to support the branch of the former Aigis Banca.
The purchase price allocation process described previously, revealed a negative difference between the
aggregation price and the fair value of the identifiable assets acquired, liabilities assumed and contingent
liabilities. This difference, which came to 2,9 million Euro, has been entered in these Consolidated financial
statements of the Banca Ifis Group under “Other operating income”.
Banca Ifis | 2021 Consolidated financial statements and report
258
Section 2 - Transactions carried out after the end of the year
The Banca Ifis Group did not carry out any business combination between the end of the year and the date of
preparation of this document.
Section 3 - Retrospective adjustments
In 2021, the Group did not make any retrospective adjustment to business combinations carried out in previous
periods.
Banca Ifis | 2021 Consolidated financial statements and report
259
4.8 Part H - Related-party transactions
In compliance with the provisions of Consob resolution no. 17221 of 12 March 2010 (as subsequently amended
by means of Resolution no. 17389 of 23 June 2010) and the provisions of Circular 263/2006 (Title V, Chapter 5)
of the Bank of Italy, the related party transaction procedure was prepared. The latest version was approved by
the Board of Directors on 24 June 2021. This document is publicly available on Banca Ifis's website,
www.bancaifis.it, in the “Corporate Governance” Section.
During 2021, no significant transactions with related parties were undertaken.
At 31 December 2021, the Banca Ifis Group was owned by La Scogliera S.p.A. and consisted of the Parent
company Banca Ifis S.p.A., the wholly-owned subsidiaries Ifis Finance Sp. z o.o., Ifis Rental Services S.r.l., Ifis
Npl Investing S.p.A. (formerly Ifis Npl S.p.A.), Cap.Ital.Fin. S.p.A., Ifis Npl Servicing S.p.A. (formerly Gemini S.p.A.)
and Ifis Real Estate S.p.A., Ifis Finance I.F.N. S.A. controlled 99,99%, the 70% subsidiary Credifarma S.p.A.,
Farbanca S.p.A., acquired at the end of 2020 and controlled 71,06% and the vehicle Ifis Npl 2021-1 SPV S.r.l., of
which the majority of the shares were acquired at the end of June 2021.
The types of related parties, as defined by IAS 24, that are relevant for the Banca Ifis Group include:
• the parent company;
• key management personnel;
• close relatives of key management personnel and the companies controlled by (or associated to) them
or their close relatives.
Here below is the information on the remuneration of key management personnel as well as transactions
undertaken with the different types of related parties.
1. Information on the remuneration of key management personnel
The definition of key management personnel, as per IAS 24, includes all those persons having authority and
responsibility for planning, directing and controlling the activities of Banca Ifis, directly or indirectly, including
the Bank's directors (whether executive or otherwise).
In compliance with the provisions of the Bank of Italy's Circular no. 262 of 22 December 2005 (7th update of
October 2021), key management personnel also include the members of the Board of Statutory Auditors.
Key management personnel in office at 31 December 2021
Short-term employee
benefits
Post-employment
benefits
Other long-term
benefits
Termination benefits
Share-based
payments
10.486
-
508
212
1.136
The above information includes fees paid to Directors (4,0 million Euro, gross amount) and Statutory Auditors
(352 thousand Euro, gross amount).
Banca Ifis | 2021 Consolidated financial statements and report
260
2. Information on related-party transactions
Here below are the assets, liabilities, guarantees and commitments outstanding at 31 December 2021, broken
down by type of related party pursuant to IAS 24.
Items
Parent
company
Key
management
personnel
Other
related
parties
Total
As a % of
the
item
Financial assets measured at fair value
through profit or loss
-
-
1.109
1.109
0,8%
Financial assets measured at fair value
through other comprehensive income
-
-
347
347
0,1%
Receivables due from customers
measured at amortised cost
-
292
18.844
19.136
0,2%
Other assets
20.567
-
-
20.567
4,1%
Total assets
20.567
292
20.300
41.159
0,3%
Payables due to customers measured at
amortised cost
-
126
818
944
0,0%
Reserves
-
-
(7.220)
(7.220)
(0,6)%
Total liabilities
-
126
(6.402)
(6.276)
(0,1)%
Commitments and guarantees granted
-
423
-
423
n.a.
Items
Parent
company
Key
management
personnel
Other
related
parties
Total
As a % of
the item
Interest receivable and similar income
-
-
361
361
0,1%
Interest due and similar expenses
-
(1)
(1)
(2)
0,0%
Commission income
-
-
22
22
0,0%
It should be noted that work is underway on the renovation of certain buildings of Banca Ifis by a company
controlled by a party related to the Parent Bank, the costs of which at 31 December 2021 are entered as tangible
assets for approximately 15,6 million Euro.
The transactions with the parent company concern the application of Group taxation (tax consolidation) in
accordance with Arts. 117 et seq. of Italian Presidential Decree no. 917/86. Relations between these companies
are regulated by private agreements signed between the parties. All adhering entities have an address for the
service of notices of documents and proceedings relating to the tax periods for which this option is exercised at
the office of La Scogliera S.p.A., the consolidating company. Under this tax regime, the taxable income and tax
losses are transferred to the consolidating company La Scogliera S.p.A., which is responsible for calculating the
overall Group income. Following the exercise of the option at 31 December 2021, Banca Ifis recorded a net
receivable from the parent company of 20,6 million Euro, Ifis Rental Services of 1,2 million Euro and Cap.Ital.Fin.
of 1,1 million Euro, while Ifis Npl Investing recorded a net payable of 23,7 million Euro and Ifis Npl Servicing a net
payable of 2,4 million Euro.
Transactions with key management personnel relate almost entirely to Rendimax savings and current accounts
as well as mortgages.
Transactions with other related parties that are part of Banca Ifis's ordinary business are conducted at
contractual conditions in line with arm's length.
Banca Ifis | 2021 Consolidated financial statements and report
261
4.9 Part I - Share-based payments
Qualitative information
1. Description of share-based payment agreements
Access to the variable part for all personnel is subject to compliance with the thresholds envisaged by the
following indicators recorded at year end:
• Ratio of the final Return On Risk-Adjusted Capital (RORAC) with the Group provisional one approved by
the Board of Directors (RORAC*), no less than 80%;
• meeting the minimum Liquidity Coverage Ratio (LCR) requirement applicable from time to time to the
Group;
• meeting the minimum Net Stable Funding Ratio (NSFR) requirement applicable from time to time to the
Group;
• consolidated Total Capital Ratio exceeding the Overall Capital Requirement announced by the
Supervisory Body as part of the “Capital Decisions” following the periodic Supervisory Review and
Evaluation Process (SREP);
• gross Npe ratio and net Npe ratio at a consolidated level below the thresholds of attention set internally.
Failure to achieve more than one of the above parameters in two different areas, with the exception of capital
solvency (i.e. consolidated Total Capital Ratio) and failure to respect the regulatory minimums, which must be
respected at all times, will prevent payment of the variable component.
Without prejudice to the opening of the gates for access to the payment of variable remuneration described
above, for the Chief Executive Officer and the General Manager, the possibility of accruing, in addition to an
annual recurring fixed emolument and further benefits, an annual variable component as a short-term incentive
scheme, with a target of up to 60% of the gross annual fixed remuneration, has been envisaged subject to
verification by the Board of Directors that the RORAC/RORAC* indicator has reached a value between 80% and
100% and that the (Cost/Income ratio*)/(Cost/Income ratio) indicator, i.e. the ratio between the forecast
cost/income ratio and the actual cost/income ratio, has reached a value between 90% and 100%. The portion of
the variable remuneration referring to the Cost/Income ratio indicator is however reduced to zero if this indicator
exceeds the tolerance threshold envisaged by the RAF in force.
In this case, the variable emolument accrued will be equal to between 60% and 100% of the target variable
component, according to the indicators calculated previously.
60% of this variable component is awarded with an upfront payment, and the remaining 40% is deferred for three
years.
The deferred portion of variable remuneration (amounting to 40%) shall be paid as follows:
• 50% in the form of shares in the Parent to be awarded after the end of the three-year vesting period (the
period after which the shares may be awarded) and that may be exercised following a retention period
(during which the shares cannot be sold) of one additional year;
• the remaining 50% of deferred variable remuneration shall be paid in cash after three years and is subject
to annual revaluation at the legal interest rate applicable from time to time.
The variable component paid upfront (the remaining 60%) shall be paid as follows:
• 50% in cash;
Banca Ifis | 2021 Consolidated financial statements and report
262
• and the remaining 50% in the form of shares in the Parent that may be exercised following a three-year
retention period, in line with the strategic planning time horizon.
It is understood that the allocation of Banca Ifis shares will affect, in addition to the Chief Executive Officer and
the General Manager, the employees identified as most relevant pursuant to Circular no. 285/2013 and Delegated
Regulation no. 604/2014 where the variable component of remuneration is above the defined materiality
threshold of 70 thousand Euro.
For FY 2021, the number of shares to be awarded is calculated by relying on the average share price for the three
months before the variable pay for the year is determined - which shall occur at the date of the Meeting convened
for the approval of the Financial Statements - as the fair value of the share.
Variable pay is subject to malus/clawback mechanisms that may cause the amount to be reduced to as low as
zero if certain conditions are met.
Quantitative information
The table on annual changes is not presented here, since for the Banca Ifis Group share-based payment
agreements do not fall within the category concerned by said table.
2. Other information
If a result is achieved that equals or exceeds 100% of the annual targets assigned, the variable component of
Senior Management will be considered as accrued in the amount of 100% of its value; the number of shares to
be attributed will be in any case calculated as described above.
2021-2023 Long-Term Incentive Plan for the Chief Executive Officer
The Chief Executive Officer of Banca Ifis is also the recipient of a Long Term Incentive (LTI) Plan 2021-2023,
approved by the Board of Directors on 24 June 2021 and by the Shareholders' Meeting of the Parent company
on 28 July 2021. The Plan provides for the assignment to the CEO, free of charge, of a certain number of options
that will give the right to purchase, at a unit exercise price (the “strike price”) equal to 12,92 Euro, a corresponding
number of Banca Ifis shares.
More specifically, they will become exercisable after a three-year vesting period (2021, 2022 and 2023), subject
to the circumstance that, at that date, the relationship between the Bank and the Chief Executive Officer is still
in place, as well as to the achievement of predetermined quantitative and qualitative, financial and non-financial
targets, linked to the Bank's long-term strategies.
The Plan grants the CEO of the Parent company the right to receive up to a maximum of 696.000 options at the
end of the vesting period and on achievement of the objectives of the Plan.
At an accounting level, this stock option plan has been accounted for in accordance with the provisions of IFRS
2 for equity settled transactions. In view of the difficulty of reliably assessing the fair value of the services
received as consideration for stock options, reference is made to the initial fair value of the latter.
The fair value of the payments settled by the issuance of these options for the services covered by the LTI Plan
is recognised as an expense in the income statement under “Administrative Expenses: a) Personnel Expenses”
as an offsetting entry to “Reserves” in Equity on an accrual basis in proportion to the three-year vesting period
over which the service is provided. As at 31 December 2021 the corresponding cost recorded in the Income
Statement with a balancing entry in a specific shareholders' equity reserve amounts to 194 thousand Euro.
Banca Ifis | 2021 Consolidated financial statements and report
263
4.10 Part L - Segment reporting
In the following statements, net impairment losses/reversals on receivables of the Npl Segment were
reclassified to interest receivable and similar income to the extent to which they represent the operations of this
business and are an integral part of the return on the investment.
For this reason too, apart from the specific operations, the effects of an analysis performed also in response to
the Covid-19 pandemic, have been classified amongst value adjustments.
In line with the structure used by Management to analyse the Group's results, the information by segment is
broken down as follows:
• Commercial & Corporate Banking Segment, which represents the commercial offer of the Group
dedicated to companies and consists of the Business Factoring, Leasing and Corporate Banking &
Lending Areas;
• Npl Segment, dedicated to non-recourse factoring and managing distressed loans, servicing and
managing non-performing, secured loans;
• Governance & Services and Non-Core Segment, which provides the areas operating in the Group's core
businesses with the financial resources and services necessary to perform their respective activities.
The Segment includes treasury and proprietary securities desk activities, the disbursement of salary- or
pension-backed loans and some portfolios of personal loans, as well as some corporate loans portfolio
assigned for run-off insofar as held to be non-strategic to the Group's growth.
The Segments of the economic-equity numericals are attributed on the basis of homogeneous allocation criteria
in order to take into account both the specificity of the various Segments and the need to guarantee effective
monitoring of business performance over time.
Moreover, considering the foregoing, the Segment information in relation to the items of the income statement
shows the results at the level of the net profit.
Banca Ifis | 2021 Consolidated financial statements and report
264
STATEMENT OF FINANCIAL
POSITION DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNA
NCE &
SERVICES
AND
NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Other financial assets
mandatorily measured at fair
value through profit or loss
Amounts at 31.12.2021
66.564
-
-
66.564
21.021
57.075
144.660
Amounts at 31.12.2020
66.441
-
-
66.441
9.524
61.013
136.978
% Change
0,2%
-
-
0,2%
120,7%
(6,5)%
5,6%
Financial assets measured at
fair value through other
comprehensive income
Amounts at 31.12.2021
1.691
-
-
1.691
-
612.322
614.013
Amounts at 31.12.2020
2.322
-
-
2.322
-
772.233
774.555
% Change
(27,2)%
-
-
(27,2)%
-
(20,7)%
(20,7)%
Receivables due from
customers
(1)
Amounts at 31.12.2021
6.526.880
2.940.072
1.390.223
2.196.584
1.523.628
2.281.296
10.331.804
Amounts at 31.12.2020
5.992.591
2.755.488
1.414.055
1.823.048
1.405.603
1.737.208
9.135.402
% Change
8,9%
6,7%
(1,7)%
20,5%
8,4%
31,3%
13,1%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,6 million Euro (1.095,3 million Euro at 31 December 2020).
INCOME STATEMENT DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNA
NCE &
SERVICES
AND NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Net banking income
Amounts at 31.12.2021
283.219
144.543
55.685
82.991
257.556
61.744
602.519
Amounts at 31.12.2020
222.680
142.844
49.155
30.681
162.942
82.178
467.800
% Change
27,2%
1,2%
13,3%
170,5%
58,1%
(24,9)%
28,8%
Net profit (loss) from
financial activities
Amounts at 31.12.2021
238.224
126.670
48.747
62.807
239.560
47.576
525.360
Amounts at 31.12.2020
150.198
112.731
33.533
3.934
162.942
63.301
376.441
% Change
58,6%
12,4%
45,4%
1496,5%
47,0%
(24,8)%
39,6%
Profit for the year
Amounts at 31.12.2021
57.809
26.140
14.093
17.576
50.249
(5.755)
102.303
Amounts at 31.12.2020
22.715
25.740
6.713
(9.738)
17.926
28.501
69.142
% Change
154,5%
1,6%
109,9%
(280,5)%
180,3%
(120,2)%
48,0%
Banca Ifis | 2021 Consolidated financial statements and report
265
QUARTERLY INCOME
STATEMENT DATA
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVER-
NANCE &
SERVICES
AND NON-
CORE
SEGMENT
CONS.
GROUP
TOTAL
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING
AREA
Net banking income
Fourth quarter 2021
70.178
35.844
12.446
21.888
73.305
9.806
153.289
Fourth quarter 2020
63.136
39.936
12.695
10.505
46.219
36.742
146.097
% Change
11,2%
(10,2)%
(2,0)%
108,4%
58,6%
(73,3)%
4,9%
Net profit (loss) from financial
activities
Fourth quarter 2021
57.172
28.074
10.636
18.462
72.283
9.113
138.568
Fourth quarter 2020
20.863
17.028
12.746
(8.911)
46.219
35.512
102.594
% Change
174,0%
64,9%
(16,6)%
(307,2)%
56,4%
(74,3)%
35,1%
Profit for the period
Fourth quarter 2021
10.691
988
2.967
6.736
18.110
(8.055)
20.746
Fourth quarter 2020
(11.644)
(6.288)
5.012
(10.368)
5.142
23.182
16.680
% Change
(191,8)%
(115,7)%
(40,8)%
(165,0)%
252,2%
(134,7)%
24,4%
Banca Ifis | 2021 Consolidated financial statements and report
266
SEGMENT KPIs
(in thousands of Euro)
COMMERCIAL & CORPORATE BANKING SEGMENT
NPL
SEGMENT
GOVERNAN
CE &
SERVICES
AND NON-
CORE
SEGMENT
(1)
TOTAL
COMMERCIAL
& CORPORATE
BANKING
SEGMENT
of which:
FACTORING
AREA
of which:
LEASING
AREA
of which:
CORPORATE
BANKING &
LENDING AREA
Cost of credit quality
(2)
Amounts at 31.12.2021
0,73%
0,68%
0,50%
0,95%
n.a.
2,24%
Amounts at 31.12.2020
1,38%
1,09%
1,11%
2,43%
n.a.
4,72%
% Change
(0,65)%
(0,41)%
(0,62)%
(1,48)%
n.a.
(2,49)%
Net bad loans/Receivables due
from customers
Amounts at 31.12.2021
0,5%
0,8%
0,0%
0,3%
72,7%
0,6%
Amounts at 31.12.2020
0,7%
1,3%
0,2%
0,3%
74,1%
0,9%
% Change
(0,3)%
(0,5)%
(0,1)%
(0,0)%
(1,4)%
(0,3)%
Coverage ratio on gross bad
loans
Amounts at 31.12.2021
74,2%
75,2%
96,5%
40,2%
-
35,1%
Amounts at 31.12.2020
72,7%
73,7%
85,0%
26,9%
-
29,1%
% Change
1,6%
1,5%
11,5%
13,3%
-
6,0%
Net non-performing
exposures/Net receivables due
from customers
Amounts at 31.12.2021
3,6%
5,7%
1,2%
2,3%
95,4%
2,1%
Amounts at 31.12.2020
2,7%
4,2%
0,8%
1,8%
98,3%
2,9%
% Change
0,9%
1,5%
0,4%
0,4%
(2,8)%
(0,7)%
Gross non-performing
exposures/Gross receivables
due from customers
Amounts at 31.12.2021
5,9%
9,4%
2,8%
3,0%
95,4%
3,4%
Amounts at 31.12.2020
5,9%
9,3%
2,9%
3,0%
98,3%
4,3%
% Change
(0,0)%
0,1%
(0,1)%
0,0%
(2,8)%
(0,9)%
RWAs
(3)
Amounts at 31.12.2021
5.214.971
2.500.835
1.265.979
1.448.157
2.339.110
1.084.180
Amounts at 31.12.2020
5.144.914
2.361.547
1.309.416
1.473.951
2.211.695
915.705
% Change
1,4%
5,9%
(3,3)%
(1,8)%
5,8%
18,4%
(1) In the Governance & Services and Non-Core Segment, at 31 December 2021, there were government securities amounting to
1.648,6 million Euro (1.095,3 million Euro at 31 December 2020), which for the purpose of calculating the cost of credit quality, were
not considered.
(2) This indicator is calculated comparing the value of net write-downs/write-backs for credit risk at the end of the year over the
annual average loans to customers (calculated quarterly)
(3) Risk Weighted Assets; the amount only relates to the credit risk.
For a more detailed analysis of the results of the business Segments, please refer to the Report on Operations,
section “2.9 Contribution of operating Segments to Group results”.
Banca Ifis | 2021 Consolidated financial statements and report
267
4.11 Part M - Leasing disclosure
Section 1 - Lessee
Qualitative information
As lessee, the Group companies stipulate lease contracts on properties mainly to be used instrumentally. They
are therefore leases of properties intended to host internal offices. As the lease business is correlated to the
Group’s need to offshore its offices, particularly close attention is paid to identifying the most suitable properties
for use, designated in line with the economic criteria established by the company.
At 31 December 2021, there are 63 passive lease contracts for buildings and 14 for car parking spaces, the
related right of use booked at 31 December 2021 is 11,3 million Euro, whilst the corresponding lease liabilities
come to 11,6 million Euro. The Group also has a property in Florence, financially leased as described in Part B -
Information on the Consolidated Statement of Financial Position of this document.
As regards the contracts for cars, the Group has passive contracts for 274 cars at 31 December 2021, which are
mainly long-term hires of structure cars and fringe benefits for employees. The related rights of use at 31
December 2021 are 1,3 million Euro while the corresponding liabilities for leasing also come to 1,3 million Euro.
The Group is not exposed to outgoing cash flows, which are not already reflected in the measurement of the
leasing liabilities. In greater detail, exposure deriving from the extension options are included in lease liabilities
booked, insofar as the Group considers the first renewal as certain; the other situations recalled by the standard
(variable payments connected with leasing, guarantees of residual value, lease commitments that are not yet
operative) are not present for the contracts stipulated as lessee.
The Group books the following costs:
• short-term leases in the event of assets such as properties and technologies (in particular, the
mainframe hardware), when the related contracts have a maximum term of twelve months and have no
option for extension.
• leases of assets of modest value, i.e. characterised by a new value of less than 5 thousand Euro, mainly
for mobile telephony.
Quantitative information
The table below provides indication on the amortisation/depreciation cost for assets consisting of the right of
use, broken down by classes of underlying asset.
AMORTISATION/DEPRECIATION COSTS FOR ASSETS
COMPRISING THE RIGHT OF USE
(in thousands of Euro)
31.12.2021
31.12.2020
a) Land
-
-
b) Buildings
2.795
2.445
c) Furniture
-
-
d) Electronic equipment
309
308
e) Other
1.010
941
Total
4.113
3.695
Banca Ifis | 2021 Consolidated financial statements and report
268
Section 2 - Lessor
Qualitative information
The Group offers fixed or variable-rate financial leasing solutions for vehicles (cars, commercial and industrial
vehicles) and instrumental assets (industrial machinery, medical equipment, technological assets) to both
private customers and small and medium enterprises through an internal commercial structure and a network
of selected agents in financial assets throughout the whole of national territory. The leasing of instrumental
assets is also distributed through relations with manufacturers, distributors and retailers. With reference to the
specific financial leasing segments:
• Automotive industry: grew in all segments in 2021, returning levels to pre-pandemic. Compared to 2020,
the industrial vehicle leasing segment recorded +34,7% over the previous year (for 2,4 billion Euro),
passenger car leasing +2,7% (for 2,7 billion Euro) and finally commercial vehicle leasing -7,3% (for 1,1
billion Euro). In this segment, the Group has signed contracts for approximately 219 million Euro, or 92%
of the amount disbursed in 2020.
• Capital goods sector: the growth of this sector in 2021 in Italy was driven by financial leasing of capital
goods, where there was a 60% increase in the value of the financed assets compared to 2020, for a total
of 10,2 billion Euro. The Group recorded positive signs throughout the capital goods segment: +37% in
the industrial goods segment for a total of 140 million Euro and +33% in the technological goods
segment for a total of approximately 18 million Euro.
As lessor, the Parent company does not stipulate lease contracts for properties for commercial use or
accommodation with third parties and/or other group companies.
In referring to the greater detail given in the Report on Operations to these financial statements, section “2.9
Contribution of operating Segments to Group results”, it is there pointed out that the lease agreements stipulated
with customers enable the management of risk on the underlying assets in line with the Group’s policy, as there
is no provision for buy-back agreements, guarantees on residual value or variable payments. The Group therefore
books the financial lease in accordance with accounting standard IFRS 16 and classifies the transactions
amongst financial assets measured at amortised cost.
Quantitative information
1. Information from the statement of financial position and income statement
For information on loans connected with financial lease transactions, reference is made to the contents of
Section 4, Assets, of Part B - Consolidated Statement of Financial Position of this document. As regards interest
income on lease loans, reference is made to the contents of Section 1 of Part C - Consolidated Income Statement
of this document; for commission, refer to Section 2 of Part C and, finally, for other operating income, refer to
Section 16, against of Part C.
Banca Ifis | 2021 Consolidated financial statements and report
269
2. Finance leases
2.1. Classification by time frames of payments to be received and reconciliation with the leasing loans
entered under assets
Time frames
31.12.2021
31.12.2020
Payments to be received for
leasing
Payments to be received for
leasing
Up to 1 year
413.654
419.847
Over 1 to 2 years
347.736
354.218
Over 2 to 3 years
271.989
282.181
Over 3 to 4 years
179.624
196.623
Over 4 to 5 years
71.308
91.229
Over 5 years
7.324
11.241
Total payments to be received for leasing
1.291.635
1.355.339
RECONCILIATION WITH LOANS
Financial gains not accrued (-)
(105.446)
(104.983)
Residual value not guaranteed (-)
-
-
Financing for leasing
1.186.189
1.250.356
The table shows the classification by time frame of payments receivable for leasing and the reconciliation of
such payments and lease loans as lessor.
Venice - Mestre, 10 March 2022
For the Board of Directors
The CEO
Frederik Herman Geertman
5.
Country-by-country reporting
Banca Ifis | 2021 Consolidated financial statements and report
271
Country-by-country reporting
Here below, with reference to the position at 31 December 2021, is the information as per the Annex A of Part I,
Title III, Chapter 2 of Bank of Italy's Circular no. 285 (the “Country-by-Country” reporting).
INFORMATION/GE
OGRAPHIC AREA
ITALY
POLAND
ROMANIA
OTHER
CONSOLIDAT
ION
RECORDS
GROUP
a)
Company name
Banca Ifis S.p.A.
Cap. Ital. Fin. S.p.A.
Credifarma S.p.A.
Farbanca S.p.A.
Ifis Npl Investing S.p.A.
Ifis Npl Servicing S.p.A.
Ifis Real Estate S.p.A.
Ifis Rental Services S.r.l.
Ifis Finance
Sp. z o.o.
Ifis Finance
IFN S.A.
-
Banca Ifis Group
Nature of business
Collecting savings from the
public and lending. The Group
specialises in the segment of
trade receivables,
medium/long-term corporate
lending and structured
finance, leasing, distressed
retail loans and tax
receivables.
The company
provides
financial
support and
credit
management
services to
businesses.
The company
provides
financial
support and
credit
management
services to
businesses.
-
Collecting savings from the
public and lending. The Group
specialises in the segment of
trade receivables,
medium/long-term corporate
lending and structured finance,
leasing, distressed retail loans
and tax receivables.
b)
Turnover
(1)
(in thousands of
Euro)
517.780
3.007
1.022
(41.787)
480.022
c)
Number of full-time
equivalents
(2)
1.819
16
14
-
1.849
d)
Pre-tax profit or
loss (in thousands
of Euro)
185.743
1.538
39
(37.446)
149.874
e)
Income tax (in
thousands of Euro)
(47.346)
(289)
(16)
80
(47.571)
f)
Government grants
received
(in thousands of
Euro)
402
-
-
-
402
(1) Turnover corresponds to the Net Banking Income as per item 120 “Net banking income” of the Consolidated Income Statement
at 31 December 2021.
(2) The “Number of full-time equivalents” is calculated, in accordance with the relevant Provisions, as the ratio of total hours worked
by all employees (including overtime) and the total contract work hours per year of a full-time employee (i.e. the total available work
hours in a year excluding 20 days of annual leave).
6.
Certifications
Banca Ifis | 2021 Consolidated financial statements and report
273
6.1 Certification of Manager charged with preparing the Company's financial
reports
Certification of the consolidated financial statements pursuant to the provisions of art. 154-
bis, paragraph 5, of the legislative decree 58 of February 24, 1998 and art. 81 ter of Consob
Regulation no. 11971 of 14 May 1999 as amended
1. We, the undersigned, Frederik Herman Geertman – CEO and Mariacristina Taormina – in her capacity as
Manager charged with preparing the financial reports of Banca Ifis S.p.A., having also taken into account
the provisions of Art. 154-bis, paragraphs 3 and 4, of the Italian Legislative Decree no.58 dated 24
February 1998, hereby certify:
i. the adequacy in relation to the characteristics of the Company;
ii. the effective implementation of the administrative and accounting procedures
for the preparation of Banca Ifis’s consolidated financial statements, over the course of the period from
January 1
st
, 2021 to December 31
st
, 2021.
2. The adequacy of the administrative and accounting procedures in place for preparing the consolidated
financial statements as at December 31
st
, 2021 has been assessed through a process established by Banca
Ifis S.p.A. on the basis of the guidelines set out in the Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (CoSO), an internationally accepted
reference framework.
3. The undersigned further confirm that:
3.1 the consolidated financial statements as at December 31
st
, 2021:
a) are prepared in compliance with International Accounting Standards, endorsed by the
European Commission as for European regulation no. 1606/2002 of the European
Parliament and Council of July 19
th
, 2002;
b) correspond to the related books and accounting records;
c) provide a true and correct representation of the financial position of the issuer and the group
of companies included in the scope of consolidation.
3.2 The management report contains a reliable analysis of the business outlook and management result,
the financial position of the issuer and group of companies included in the scope of consolidation
and a description of the main risks and uncertainties they are exposed to.
Venice, March 10
th
, 2022
CEO Manager charged with preparing the
Company’s financial reports
Frederik Herman Geertman Mariacristina Taormina
This report has been translated into the English language solely for the convenience of international readers.
Banca Ifis | 2021 Consolidated financial statements and report
274
6.2. Report of the Board of Statutory Auditors
1
BOARD of STATUTORY AUDITORS' REPORT
to the FINANCIAL STATEMENTS as at 31 December 2021
(Translation from the original Italian text)
Dear Shareholders,
With this report - prepared in accordance with Article 153 of Italian Legislative Decree no. 58/1998 and Article
2429, paragraph 2 of the Italian Civil Code - the Board of Statutory Auditors of Banca IFIS S.p.a., hereby
informs you of the supervisory and control activities carried out in the performance of their duties, during the
year ended 31 December 2021.
Background
Again in FY 2021, the Board's activities were affected by the pandemic context that made it necessary, for
part of the year, to use remote connection systems to organise meetings remotely. The tasks and functions
attributed to the Control Body by the reference legislation have always been carried out in compliance with
the legal and corporate provisions issued to govern the epidemiological emergency.
1. Activity of the Board of Statutory Auditors
During the year 2021, the Board of Statutory Auditors carried out their institutional tasks in accordance with
the rules of the Italian Civil Code and with Legislative Decrees no. 385/1993 (Consolidated Banking Law), no.
58/1998 (Consolidated Law on Finance), and no. 39/2010, of the By-Laws, in addition to being in compliance
with those issued by the public authorities that exercise activities of supervision and control, also taking into
account the standards of conduct recommended by the National Council of Chartered Accountants in the
document dated April 2018.
During the year, the Board of Statutory Auditors performed its duties, holding 27 meetings, of which 5 were
held jointly with the Control and Risks Committee and 2 held jointly with the Boards of Statutory Auditors of
the Subsidiaries.
The Board also attended all 19 meetings of the Board of Directors.
The Board of Statutory Auditors or individual members of the Board also attended the meetings of the Control
and Risks Committee, of the Appointments Committee and of the Remuneration Committee.
The minutes of the Board of Statutory Auditors, which sometimes contain explicit recommendations to rapidly
resolve difficulties that have come to light, are always sent in their entirety to the CEO and to the General
Manager. The Chairman of the Risk Management and Internal Control Committee is constantly invited to
attend meetings of the Board of Statutory Auditors. It is believed that such attendance will ensure an adequate
flow of information between the committees within the Board of Directors.
The Head of Internal Auditing also attends the meetings of the Board of Statutory Auditors, as a permanent
invitee for the continuous interaction with the corporate function of third-level control.
2. Significant events and transactions
2.1 Period events and transactions
In carrying out the activities of supervision and control, the Board of Statutory Auditors obtained periodically
from the Directors, including through the participation in meetings of the Board of Directors, information on
the activities carried out and on the most important economic, financial and equity operations approved and
implemented by the Bank and by the subsidiaries, also pursuant to Article 150, paragraph 1 of the Consolidated
Law on Finance.
2
Reference should be made to the information provided in the Management Report regarding significant events
during the year and after year-end.
At 01 January 2021, the Bank had completed the corporate reorganisation of the NPL cluster, meaning that
the NPL cluster comprises:
IFIS NPL Investing Spa (100% owned by Banca Ifis Spa),
IFIS NPL Servicing (100% owned by IFIS NPL Investing Spa)
IFIS Real Estate Spa (100% owned by IFIS NPL Servicing Spa)
On 14 January 2021, the resignation of Director Divo Gronchi was received
On 11 February 2021, the Board of Directors co-opted Frederik Geertman, with the approval of the Appoint-
ments Committee and the Board of Statutory Auditors
On 11 February, Luciano Colombini, CEO and Director, tendered his resignation from both positions with effect
from 22 April 2021 (Shareholders' Meeting for the approval of the financial statements for FY 2020). On the
same date Luciano Colombini signed an agreement with the Bank concerning the conditions for his exit, with
the favourable opinion of the Remuneration Committee and the Board of Statutory Auditors.
The Board of Directors meeting held on 22 April 2021, following the Shareholders' Meeting, appointed Frederik
Geertman as Chief Executive Officer of the Banca Ifis Group.
In May 2021, the Bank acquired, in cooperation with the FITD, the business unit related to Aigis Bank in
liquidation.
On 28 July 2021, the Shareholders' Meeting approved amendments to the Company's Articles of Association
that resulted in the appointment of two Joint General Managers. Consequently, Raffaele Zingone was ap-
pointed as Joint General Managers in the role of Chief Commercial Officer (CCO) and Fabio Lanza as Chief
Operation Officer (COO). Alberto Staccione (former General Manager) has taken on the role of Chief Lending
Officer (CLO)
Finally, in December 2021, the Shareholders' Meeting held on the 21st, approved the change in the ratio
between the variable and fixed remuneration of the Managing Director, bringing it to 1,5 to 1 compared to
the original 1 to 1.
On 27 December 2021 the transfer of the registered office of the parent company La Scogliera to Switzerland
was acknowledged, thus leading to the deconsolidation, solely for regulatory purposes, of the parent company
itself.
2.2 Significant subsequent events
Significant events subsequent to the close of FY 2021 that this Board believes should be recalled include the
following.
At its meeting of 09 February 2022, the Board of Directors approved the Group's Business Plan for the period
2022-2023-2024, presented to the market on 10 February 2022.
Finally, on 21 February 2022, authorisation was received from the Bank of Italy for the merger by incorporation
of Credifarma SpA into Farbanca SpA.
On 10 March 2022, the Board of Directors initiated the share buyback programme for which authorisation was
received from the Bank of Italy on 05 November 2021 to purchase 1.044.000 treasury shares for a maximum
value of 20,9 million Euro to service the Long Term Incentive Plan approved by the Shareholders' Meeting of
28 July 2021.
3
3. Supervisory activities
3.1 - Supervisory activities on the observance of the law, the By-Laws, and the Self-Regulation
Code for listed companies
On the basis of the information obtained through its own supervisory activities, the Board of Statutory Auditors
was not made aware of any operations that had not been conducted in compliance with the principles of
correct management and that had not been approved and implemented in accordance with the law and with
the By-Laws, which were contrary to the interests of the Bank, that were in contrast with the resolutions
passed by the Shareholders' Meeting, that were imprudent or risky or were such as to compromise the integrity
of the corporate assets.
The Board of Statutory Auditors was not made aware of any operations in conflicts of interest.
The Board of Statutory Auditors monitored compliance of the Procedure for operations with subjects related
to the law in force and its correct application.
In particular, as provided for by the relevant rules, the Chairman and/or the other Statutory Auditors partici-
pated in the meetings of the Risk Management and Control Committee to discuss operations with related
parties; the Board of Statutory Auditors periodically received information relating to the progress of their
positions.
The Board of Statutory Auditors judged that the Board of Directors, in the Management Report and in the
Notes, had provided adequate information on the operations with related parties, taking into account the
provisions of the regulations in force. To the knowledge of the Board of Statutory Auditors, there are no intra-
group operations and no operations with the Related Parties being implemented in 2021 that were contrary
to the interests of the company.
In the year 2021, the Bank did not perform any atypical or unusual transactions. With regard to the operations
of particular importance, these respect the principles of prudence, do not contravene the resolutions of the
Board of Directors Meetings, and do not prejudice the company's assets.
The Board reviewed the audits conducted by Internal Audit regarding the outsourcing of Essential or Important
Operating Functions and agreed with the comments contained therein. These checks, which are also provided
for in preparation for the annual report of this control function, and the collegial examination did not reveal
any significant elements to be reported to the Shareholders.
The Board of Statutory Auditors, in acknowledging the accession of Banca IFIS S.p.A. to the Self-Regulation
Code for listed companies, verified the requirements of independence of its members, in addition to the correct
application of the criteria and procedures of verification adopted by the Board of Directors to assess the
independence of the directors.
3.2 - Supervisory activities on the adequacy of the internal audit system, of the risk management
systems and of the organisational structure
The Board of Statutory Auditors monitored the suitability of internal monitoring systems and risk management
through:
− meetings with the management of the Bank;
− regular meetings with the Audit Functions - Internal Audit, Compliance, Anti-money laundering (AML) and
Risk Management and the Financial Reporting Officer - in order to evaluate the methodology for the
planning of operations, based on the identification and evaluation of the principal risks present in the
organisational processes and units;
− examination of the periodical reports from the Audit Functions and the periodical information regarding
the results of monitoring activities;
− acquired information from the managers of corporate functions;
− discussion of the results of the work carried out by the external auditing firm;
4
− participation in the work of the Risk Management and Control Committee and, when the topics so required,
in their joint examination with the Committee.
In the execution of its monitoring duties, the Board of Statutory Auditors maintained continuous relations with
the Audit Function.
The Board of Statutory Auditors focused on the organisational structure of the control functions, aimed at
monitoring risks within the context of the changes that have affected the banking group, which currently sees
the centralisation of the second and third level control functions at the parent company.
The Board of Statutory Auditors appreciated the use by Internal Audit of the new method of carrying out
audits in line with international standards.
The Board of Statutory Auditors monitored the initiatives being implemented to strengthen the processes for
monitoring and controlling risks at Group level.
The monitoring of the potential risks identified benefited from the creation of the position of Chief Lending
Officer; the strengthening of controls by RM in the IT area; and the revision of the management and monitoring
framework for non-recourse receivables from the NHS purchased.
The Board took note of the implementation of the processes related to the new regulations concerning the
New DoD and Calendar Provisioning which, although substantially completed, require further formalisation.
With regard to liquidity-related risks (including mismatching and funding gaps), the Group acknowledged the
progress of the ALM project, which is now close to being fully implemented.
The Board has also acknowledged the update of the valuation models, in respect of the effects of the pan-
demic, recommending the assumption of all necessary and opportune initiatives - such as the completion of
the setting-up of the Validation Function - in order to guarantee the integrity and the correctness of the
application of models of evaluation, together with the results of the same, for the portfolios of non-performing
loans.
The Board of Statutory Auditors acknowledges that the annual reports from the Control Functions conclude
with a substantially favourable judgement on the internal control system.
Over the course of 2021, the Board of Statutory Auditors supervised the suitability and effects of the entire
ICAAP and ILAAP 2020 processes on the requirements set out by the regulations, underscoring the usefulness
of appropriate data aggregation, integration, and validation processes to maintain the aforementioned docu-
ments.
Intervention plans were provided with reference to the activities and areas for improvement identified, whose
timely implementation is judged by the Board of Statutory Auditors as essential and that require particular
attention by the Management Body.
Finally, the Board of Statutory Auditors has taken positive note of the initiatives put in place to strengthen
monitoring and control, in particular of credit risks, arising from the conflict in Ukraine.
On the basis of the activities carried out, the Board of Statutory Auditors - also in relation to the continuous
evolution of the Bank and the group - believes that although there are certain areas for possible further
improvement, there are no elements that are sufficiently critical as to invalidate the internal control system
and risk management.
3.3 - Supervisory activities on the administrative-accounting system and on the financial report
and non-financial disclosure processes
The Board of Statutory Auditors, in its role as Committee for internal control and auditing, monitored the
process and the efficiency of internal monitoring systems and risk management with regards to the financial
report.
5
The Board of Statutory Auditors periodically met the manager responsible for the exchange of information
regarding the administrative-accounting system and in addition discussed the reliability of the latter in order
to have an accurate representation of management-related issues.
During these meetings, no significant shortcomings were reported in the operational and auditing processes
that could invalidate the adequacy and effective application of administrative accounting procedures.
The Board of Statutory Auditors examined the Report of the Financial Reporting Officer for the 2021 consoli-
dated financial statements, which contains the results of tests on the controls carried out as well as the main
problems identified in the application of the relevant legislation and the methodologies used and identifies the
appropriate remedies. More specifically the Board has acknowledged the results of the controls performed
following the introduction of the obligation, for consolidated financial reports relating to financial years begin-
ning on or after 01 January 2021, to prepare them in XHTML format, marking certain information in the
consolidated financial statements with the Inline XBRL specification.
The Board of Statutory Auditors also took note of the certifications issued on 10 March 2022 by the CEO and
by the Financial Reporting Officer, in accordance with the provisions contained in Article 154
bis
of the Con-
solidated Law on Finance and in Article 81
ter
of the Consob Regulation 11971/1999, from which no failings
emerged that might affect the judgement of adequacy of the administrative-accounting procedures.
The Board of Statutory Auditors then acknowledged the monitoring systems developed by the Financial Re-
porting Officer regarding the relative subsidiaries in the group of consolidated companies that do not demon-
strate profiles of significant criticality.
The Independent Auditors EY S.p.A., during the periodic meetings and in the light of the Additional Report -
provided for by Article 11 of Regulation (EU) no. 537/2014 issued on 31 March 2022, did not report any critical
situations to the Board of Statutory Auditors that could affect the internal control system relating to the ad-
ministrative and accounting procedures, nor did it ever highlight facts that were deemed reprehensible or any
irregularities that would require reporting pursuant to Article 155, paragraph 2, of the Consolidated Law on
Finance.
The Board of Directors prepared, in accordance with the law, the consolidated financial statements as at 31
December 2021 of the Banca IFIS Group that were submitted for audit by the external auditing firm EY S.p.A..
As already mentioned, the consolidation scope has changed following the 2021 corporate evolution. The Board
of Statutory Auditors acknowledged the preparation of instructions provided to the subsidiaries for the process
of consolidation.
With regard to the consolidated financial statement - as required by the rules of conduct recommended by the
National Board of Certified Public Accountants in the document of April 2018 - the Board of Statutory Auditors
monitored compliance with the procedural rules concerning the formation and setting out of the same and of
the management report.
With regard to the above, no elements were revealed that would lead to the conclusion that the activity has
not been carried out in accordance with the principles of correct administration or that the organisational
structure, the system of internal audit and accounting and administrative systems were not, in their entirety,
substantially adequate to the needs and dimensions of the company.
The Bank prepared the Non-Financial Statement (hereinafter the NFS): the obligation to prepare the NFS had
been introduced by Italian Legislative Decree no. 254/2016 and the regulatory indications were then completed
by the "Regulation implementing Italian Legislative Decree no. 254 of 30 December 2016”.
The Bank has prepared the NFS, as an autonomous document, on a consolidated basis and this Board, in light
of the provisions of Article 3, paragraph 7 of Italian Legislative Decree no. 254/2016, has verified said docu-
ment - also in the light of that expressed by the external auditing firm in its report pursuant to Article 3,
paragraph 10 of Italian Legislative Decree no. 254/2016 re-issued on 31 March 2022 - with regards to its
completeness and its correspondence to that provided for by regulations and according to the criteria of
6
preparation illustrated in the Methodology Notes for the Non-Financial Statement, without identifying elements
which require mention in this report.
The NFS was also audited by the auditing firm EY, which issued its report on 31 March 2022 without finding
elements indicating that the NFS was not prepared in accordance with the regulations.
3.4 - Supervisory activities pursuant to Italian Legislative Decree no. 39/2010
The Board of Statutory Auditors, as the "Committee for internal audit and for the general auditing procedure",
carried out the task of supervision of the auditing firm's operations, as provided for by Article 19 of Italian
Legislative Decree no. 39/2010.
As already mentioned above, the Board of Statutory Auditors met several times during the year with the
Independent Auditors EY S.p.A., pursuant to Article 150 of the Consolidated Law on Finance, in order to
exchange data and information on the activities carried out in the exercise of their tasks.
The external auditing firm
issued, on 5 August 2021, the report on the limited audit of the condensed consolidated half-year financial
statements with no exceptions being highlighted;
on 31 March 2022, it issued - in accordance with Article 14 of Italian Legislative Decree no. 39/2010 and
Article 10 of the EU Regulation no. 537 of 16 April 2014 - the certification reports from which it is evident
that the financial statements and consolidated financial statements, closed on 31 December 2021, were
drawn up clearly and represent in a truthful and correct manner the financial and asset situation, the
operating result and the cash flows of Banca IFIS S.p.A. and of the Group for the year ended on that date.
In the opinion of the external Auditing Firm, the Management Report on the financial statement and
consolidated financial statement as of 31 December 2021 and the information of the "Report on corporate
governance and shareholder structure" are consistent with the annual financial statement and consolidated
financial statement as of 31 December 2021.
Again, on 31 March 2022, the external Auditing Firm presented the Board of Statutory Auditors with the
Additional Report, provided for in Article 11 of the EU Regulation no. 537/2014, which this Board of Statutory
Auditors will bring to the attention of the upcoming meeting of the Board of Directors to be held on 28 April
2022.
The Additional Report does not present any significant shortfalls in the internal auditing system with regards
to the financial reporting process which would merit being brought to the attention of those responsible for
the activity of governance.
In the Additional Report, the external Auditing Firm presented the Board of Statutory Auditors with the decla-
ration regarding independence pursuant to Article 6 of the EU Regulation no. 537/2014, from which no situa-
tions emerge that might compromise independence.
The Board of Statutory Auditors has also acknowledged the 2021 Transparency Report prepared by the exter-
nal auditing firm and published on its website pursuant to Italian Legislative Decree no. 39/2010.
Lastly, as previously mentioned, the Board of Statutory Auditors examined the content of the report by EY
S.p.A. regarding the Non-financial disclosure issued pursuant to Article 3, paragraph 10 of Italian Legislative
Decree no. 254/2016 on 31 March 2022.
The Board of Statutory Auditors reports that over the course of 2021, as well as the function of auditing of the
individual financial statement, consolidated financial statement, and the financial statements of the subsidiar-
ies, EY S.p.A., with the approval of this Board of Statutory Auditors, was entrusted with the following tasks:
Profit verification 31 December 2021 Banca Ifis individual and consolidated for 47.000 Euro
Comfort Letter on EMTN Programme renewal for 2021 - for 55.000 Euro
Agreed Upon procedures on the Servicer Report of the securitisation vehicle Indigo Lease (three years
2021-2023) for 25.500 Euro
Agreed Upon procedures on the Servicer Report of the securitisation vehicle EMMA SPV (three years
2021-2023) for 25.500 Euro
7
Agreed Upon procedures in connection with EU Regulation no. 630 of 2019 for 25.000 Euro
Agreed Upon procedures on GACS for 30.000 Euro
Agreed Upon procedures on TLTRO III for 35.000 Euro
Agreed Upon procedures on TLTRO III - Aigis - for 55.000 Euro
In brief, the tasks assigned to the Independent Auditors concerned only certification services for 298.000 Euro
The external Auditing Firm also confirmed to the Board of Statutory Auditors that, during the year and in the
absence of the conditions for their release, it did not issue opinions pursuant to the law.
Lastly, the Board of Statutory Auditors points out that the statutory audit mandate conferred on EY SpA expires
with the 2022 financial statements and, as is now established practice, the Bank has decided to proceed with
the process of renewing the statutory audit mandate in 2021. This Board of Statutory Auditors has carried out
the activities provided for by the reference legislation and has concluded its work by expressing its reasoned
opinion, which has been made available to the Shareholders for this Meeting in which you are called upon to
resolve on this matter.
3.5 - Relations with the Supervisory Body
The Board of Statutory Auditors has examined the minutes of the meetings held by the Supervisory Body and
the exchange of information was also ensured by the dialogue that took place within the Board of Statutory
Auditors with the auditor who is a member of the Supervisory Body, without receiving any reports and/or
comments worthy of note.
4. Remuneration policies
The Board of Statutory Auditors, also through its attendance of all the meetings of the Remuneration Com-
mittee, oversaw the application of the remuneration policies and the innovations, examined by the Remuner-
ation Committee on 09 March 2022, and submitted to the Shareholders' Meeting for approval.
At the above-mentioned meeting of the Remuneration Committee, the Board of Statutory Auditors acknowl-
edged the positive opinion expressed by Compliance on the compliance of the Remuneration Report with the
applicable regulatory provisions and the opinion expressed by Risk Management, sharing its conclusions and
comments. At the 30 March 2022 meeting of the Remuneration Committee, the Board also acknowledged,
and shared the comments contained, the checks conducted by the Internal Audit function and set out in the
document "Compliance of remuneration practices with Bank of Italy regulations and approved policies", checks
which led to a substantially satisfactory opinion.
The Board of Statutory Auditors acknowledged, through its participation in the Remuneration Committee meet-
ing of 09 March 2022, the allocation of the variable remuneration for the year 2021 - of which a part in the
Bank's own shares - to the Chief Executive Officer and the former General Manager, in application of the
policies approved by the Shareholders' Meeting of 22 April 2021.
In general, in the light of the provisions of the Supervisory Authorities concerning remuneration and incentive
systems, the Board of Statutory Auditors supervised, in close connection with the Remuneration Committee,
the changes introduced to the remuneration policies for 2022 examined by the Remuneration Committee on
09 March 2022, for details of which reference should be made to the Remuneration Report made available to
Shareholders,
on the correct application of the rules relating to the remuneration of the Managing Director, the heads of the
Control Functions and the Manager in charge of Preparation of the Company's Financial Reports, and on the
dissemination of the remuneration policies for 2022 to the companies belonging to the Group.
***************
8
The Board of Statutory Auditors is not aware, in addition to what has already been discussed earlier, of facts
or details that need to be communicated to the Shareholders' Meeting.
The Board of Statutory Auditors did not receive, during the year 2021, complaints from Shareholders pursuant
to Article 2408 of the Italian Civil Code.
Finally, the Board of Statutory Auditors, with reference to the epidemiological emergency from COVID-19,
recalls what has been expressed by the Board of Directors in its Reports on Operations and in the Explanatory
Notes, accompanying the 2021 financial statements.
In the course of the activity performed and on the basis of the information obtained, no omissions, reprehen-
sible facts, irregularities or in any case other significant circumstances were detected that would require re-
porting to the Supervisory Authorities or mention in this report.
In thanking the Shareholders for the trust they have placed in it, the Board would like to remind you that
with the approval of these financial statements, its mandate comes to an end.
***************
The Board considers it useful to recall that, in light of the Bank of Italy's recommendation of 27 July 2021, the
Bank proceeded on 20 October 2021, as illustrated in the Report on Operations, to pay dividends for FY 2019
In conclusion, the Board of Statutory – taking into account the specific tasks conferred to the external auditing
firm regarding auditing of the accounts and of the reliability of the financial statements - issued its opinion
without qualifications, and in light of the claims issued pursuant to Article 154 bis of Italian Legislative Decree
no. 58/1998 by the Corporate Accounting Reporting Officer and by the Chief Executive Officer - has no obser-
vations to make to the Meeting, pursuant to Article 153 of the Consolidated Law on Finance, regarding the
approval of the financial statements for the year ended 31 December 2021, accompanied by the Management
Report and the Notes to the financial statements as presented by the Board of Directors, and therefore has
no objections to the approval of the financial statements, and invites the Shareholders' Meeting to take into
due consideration the recommendation of the Bank of Italy of 27 July 2021, for the purposes of the proposal
for the allocation of the profit for the year and the distribution of dividends.
Venice - Mestre, 31 March 2022.
for the Board of Statutory Auditors
The Chairman
Giacomo Bugna
Banca Ifis | 2021 Consolidated financial statements and report
283
6.3 Independent auditors' report on the consolidated financial statements
Banca IFIS S.p.A.
Consolidated financial statements as at December 31, 2021
Independent auditor’s report pursuant to article 14 of
Legislative Decree n. 39, dated January 27, 2010, and
article 10 of EU Regulation n. 537/2014
EY S.p.A.
Sede Legale: Via Meravigli, 12 – 20123 Milano
Sede Secondaria: Via Lombardia, 31 – 00187 Roma
Capitale Sociale Euro 2.525.000,00 i.v.
Iscritta alla S.O. del Registro delle Imprese presso la CCIAA di Milano Monza Brianza Lodi
Codice fiscale e numero di iscrizione 00434000584 - numero R.E.A. di Milano 606158 - P.IVA 00891231003
Iscritta al Registro Revisori Legali al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/2/1998
Iscritta all’Albo Speciale delle società di revisione
Consob al progressivo n. 2 delibera n.10831 del 16/7/1997
A member firm of Ernst & Young Global Limited
EY S.p.A.
Via Isonzo, 11
37126 Verona
Tel: +39 045 8312511
Fax: +39 045 8312550
ey.com
Independent auditor’s report pursuant
to article 14 of Legislative Decree n. 39, dated January 27, 2010 and
article 10 of EU Regulation n. 537/2014
(Translation from the original Italian text)
To the Shareholders of
Banca IFIS S.p.A.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Banca IFIS Group (“the Group”), which
comprise the statement of financial position as at December 31, 2021, and the income statement, the
statement of comprehensive income, the statement of changes in equity and the cash flows statement
for the year then ended, and the notes to the financial statements.
In our opinion, the consolidated financial statements give a true and fair view of the financial position
of the Banca IFIS Group as at December 31, 2021, and of its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards as adopted by
the European Union and with the regulations issued for implementing article 9 of Legislative Decree n.
38/2005 and article 43 of Legislative Decree n. 136/2015.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report.
We are independent of Banca IFIS S.p.A. in accordance with the regulations and standards on ethics
and independence applicable to audits of financial statements under Italian Laws. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
2
We identified the following key audit matters:
Key Audit Matter
Audit Response
Goodwill impairment test
Goodwill
recorded in the caption
Item 100 of
the Balance Sheet of the consolidated financial
statements at December 31, 2021 amounts to
Euro 38.8 million, is mainly allocated to the
cash generating unit (CGU) of the NPL
operating segment, dedicated to the acquisition
without recourse, management and collection
of mainly unsecured loans that are difficult to
collect.
Goodwill, as required by the international
accounting standard IAS 36 "Impairment of
assets", is not subject to systematic
amortization but is subject, at least annually, to
the impairment test by comparing the carrying
values of the CGUs, inclusive of goodwill, and
the related recoverable amount.
Parent Company management identified the so-
called "Value in use", which is the recoverable
value configuration of the CGUs to be used for
the impairment test, determined through a
procedure that provides for the discounted cash
flows and assumptions which by their nature
imply the judgments of the Directors, supported
by an external consultant.
In this context, for the purpose of estimating
future cash flows, the Company management
used the data contained in the economic and
financial position projections for the period
2021-2024 approved by the Board of Directors
on January 13, 2022 and underlying the
Business Plan approved on February 10, 2022.
In consideration of the significance of the
amount of goodwill in the consolidated financial
statements as a whole, as well as the
subjectivity of the assumptions adopted by the
Directors in the process of estimating the
recoverable value of the CGUs, we considered
the impairment test of goodwill a key aspect of
the audit.
The disclosure on the impairment test is
provided in Part A - Accounting Policies and in
Part B - Information on the balance sheet of the
notes to the consolidated financial statements.
Our audit procedures in response to the key
aspect included, inter alia:
• understanding the methods for
determining the recoverable value
adopted by the Parent Company as part
of the impairment test process approved
by the Board of Directors, and the
related key controls;
• assessment of the report produced by
the third-party specialists that assisted
management in preparing the
impairment test, as well as the
assessment of their competency,
capability and objectivity;
• the comparison between the data used
for conducting the impairment test and
those presented in the economic and
financial position projections for the
three-year period 2022-2024, in order
to assess their substantial alignment;
• analysis of the reasonableness of the
economic forecasts included in the
economic and financial position
projections for the three-year period
2022-2024 and used as part of the
goodwill impairment test;
• with the support of our experts in
business valuations, the assessment of
the appropriateness of the methodology
and the reasonableness of the
assumptions used by the Directors for
the determination of the recoverable
value, as well as the verification of the
mathematical accuracy of the
calculations and sensitivity analysis on
key assumptions.
Finally, we examined the adequacy of the
disclosures provided in the notes to the
consolidated financial statements.
3
Key Audit Matter
Audit Response
Classification and Valu
a
tion
of Loans to
Custumers
Loans to customers of the Commercial e
Corporate Banking and Governance & Services
Non-Core Sectors amount respectively to Euro
6,527 million and Euro 2,281 million, net of
analytical and collective impairment provisions
for Euro 236 million and Euro 37 million
respectively, and represent 68% of total assets at
December 31, 2021.
The process of classifying and valuing loans to
customers in the various risk categories and the
calculation of the loan impairments are relevant
for the audit due to the significant value of the
loans in the financial statements as a whole and
due to the determination of loan loss provisions
which require the use of estimates that present a
high degree of complexity and subjectivity.
Further, such estimation processes have been
revised in order to reflect the context of the
current uncertainty regarding macroeconomic
development framework also resulting from the
ongoing Covid-19 pandemic, as well as
government initiatives to support the economy
amongst which, in particular, payment moratoria
and new or renegotiated loans with public state
guarantees.
In this context it is of particular importance:
• the identification and calibration of the
parameters relating to the significant
increase in credit risk for the purposes
of the stage allocation of performing
credit exposures (Stage 1 and Stage 2);
• the estimate of the values to be
attributed to the PD (Probability of
Default), LGD (Loss Given Default) and
EAD (Exposure at Default) as inputs to
the expected credit loss model
(Expected Credit Loss), on the basis of
historical observation of the data for
each risk class and forward-looking
factors, including macroeconomic
factors;
• the identification of objective evidence
of increased credit risk for the
classification of non-performing credit
exposures (Stage 3), and the
determination of the related recoverable
cash flows.
The disclosure on the evolution of the quality of
the portfolio of loans to customers, and the
Our audit procedures in response to the key
aspect, considering the revisions made to the
estimation processes regarding collective
impairment provisions to reflect the uncertainty
deriving from the ongoing Covid-19 pandemic,
included inter alia:
• understanding and analysis of the main
choices regarding policies, processes
and controls carried out by the Group
with reference to the classification and
valuation of loans to customers and
performing compliance procedures over
key controls;
• carrying out a portfolio comparative
analyses to understand, also through
discussion with Company management,
the main changes and the relative
coverage levels by risk category;
• performing substantive procedures to
verify the proper classification of credit
positions;
• verification on a sample basis of the
proper application of Company policies
for estimating expected credit losses on
exposures assessed analytically;
• understanding, also through the support
of our risk management and information
systems experts, of the methodology
used for the stage allocation and to
estimate, at the balance sheet date, the
expected credit losses on collectively
assessed exposures, as well as
performing compliance and substantive
procedures to verify the completeness
of the databases used and the related
calculations.
Finally, we examined the adequacy of the
disclosures provided in the notes to the
consolidated financial statements.
4
Key Audit Matter
Audit Response
classification an
d evaluation criteria adopted is
provided in Part A - Accounting Policies, in Part
B - Information on the balance sheet, in Part C -
Information on the income statement and in Part
E - Information on risks and related hedging
policies of the notes to the financial statements.
Valuation of NPL Sector Loans
The Group operates with an operating sector
(“NPL Sector”) dedicated to the acquisition
without recourse, management and collection of
mainly unsecured loans that are difficult to
collect (Stage 3), which contributes 43%
of the reclassified consolidated intermediation
margin equivalent to Euro257.5 million.
This activity is relevant for the audit due to the
related economic effects in the financial
statements, which are significant in amount and
due to the methods of representation and
valuation adopted by the Group, which are
characterized by complexity profiles and by the
use of assumptions and hypotheses inherent in
the specific evaluation methods and models.
These methods and models, in compliance with
IFRS 9, provide for the application of the
amortized cost criteria, which is based on
specific recovery forecasts, where available, or
on estimates of expected cash flows resulting
from the historical experience gained and
articulated by homogeneous clusters, updated
on the basis of judicial or extrajudicial recovery
activities. Further, such estimation processes in
relation to estimated cash flows have been
revised in order to reflect the context of the
current uncertainty regarding macroeconomic
development framework resulting from the
ongoing Covid-19 pandemic.
The disclosures regarding the criteria for the
recognition and valuation of NPL sector
receivables are described, as well as the risks
and uncertainties associated with the use of the
estimates underlying the valuation process are
provided in Part A - Accounting Policies and in
Part E - Information on the risks and related
hedging policies of the notes to the consolidated
financial statements.
Our audit procedures in response to the key
aspect, considering the revisions made to the
estimation processes regarding the expected
cash flows reflecting also the uncertainty
deriving from the ongoing Covid-19 pandemic
included, inter alia:
understanding of the policies, processes and
controls put in place by the Group for the
acquisition, recognition and periodic
valuation of NPL Sector credits, based on the
evolution of the recovery estimate, and the
performance of compliance procedures on
controls considered key among those
identified;
understanding, also through the support of
our risk management experts, of the
methodology used for estimating and / or
identifying the cash flows underlying the
methods and models defined by the Group, as
well as performing compliance and
substantive procedures to verify the
completeness of the databases used and,
through portfolio analysis techniques, of the
consistent application of the methods and
models themselves;
performing on a sample basis substantive
procedures to verify the correctness of the
significant valuation assumptions both as
regards expected cash flows and as regards
the estimated timing for their recovery;
performing comparative analysis procedures
of the loan portfolio of the NPL Sector
through the correlation, for each method of
recovery and valuation, of balance sheet data
with the respective economic effects and with
the related cash flows collected, as well as
analysis and discussion with the company
management on the most significant
deviations.
Finally, we examined the adequacy of the
disclosures provided in the notes to the
consolidated financial statements.
5
Responsibilities of Directors and Board of Statutory Auditors for the Consolidated
Financial Statements
The Directors are responsible for the preparation of the consolidated financial statements that give a
true and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union and with the regulations issued for implementing article 9 of Legislative Decree n.
38/2005 and article 43 of Legislative Decree n. 136/2015, and, within the terms provided by the law,
for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing Banca IFIS Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless they either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
The statutory audit committee (“Collegio Sindacale”) is responsible, within the terms provided by the
law, for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not
a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with International Standards on Auditing (ISA Italia), we have
exercised professional judgment and maintained professional skepticism throughout the audit. In
addition:
we have identified and assessed the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error; designed and performed audit procedures
responsive to those risks and obtained audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control;
we have obtained an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Banca IFIS Group’s internal control;
we have evaluated the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Directors;
we have concluded on the appropriateness of Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Banca IFIS Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Banca IFIS Group to cease to continue as a going concern;
we have evaluated the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
6
we have obtained sufficient appropriate audit evidence regarding the financial information of
the entities or the business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We have communicated with those charged with governance, identified at an appropriate level as
required by international standards on auditing (ISA Italia), regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We have provided those charged with governance with a statement that we have complied with the
ethical and independence requirements applicable in Italy, and we have communicated with them all
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we have determined those
matters that were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters. We have described these matters in our auditor’s report.
Additional information pursuant to article 10 of EU Regulation n. 537/14
The shareholders of Banca IFIS S.p.A., in the general meeting held on April 17, 2014, engaged us to
perform the audits of the separate and consolidated financial statements for each of the years ending
December 31, 2014 to December 31, 2022.
We declare that we have not provided prohibited non-audit services, referred to article 5, par. 1, of EU
Regulation n. 537/2014, and that we have remained independent of the Group in conducting the
audit.
We confirm that the opinion on the consolidated financial statements included in this report is
consistent with the content of the additional report to the audit committee (“Collegio Sindacale”) in
their capacity as audit committee, prepared in accordance with article 11 of the EU Regulation n.
537/2014.
Report on compliance with other legal and regulatory requirements
Opinion on the compliance with Delegated Regulation (EU) 2019/815
The Directors of Banca IFIS S.p.A. are responsible for applying the provisions of the European
Commission Delegated Regulations (EU) 2019/815 for the regulatory technical standards on the
specification of a single electronic reporting format (ESEF – European Single Electronic Format) (the
“Delegated Regulation”) to the consolidated financial statements, to be included in the annual financial
report.
We have performed the procedures under the auditing standard SA Italia n. 700B, in order to express
an opinion on the compliance of the consolidated financial statements with the provisions of the
Delegated Regulation.
In our opinion, the consolidated financial statements have been prepared in the XHTML format, and
have been marked-up, in all material aspects, in compliance with the provisions of the Delegated
Regulation.
7
Opinion pursuant to article 14, paragraph 2, subparagraph e), of Legislative Decree
n. 39 dated January 27, 2010 and of article 123-bis, paragraph 4, of Legislative
Decree n. 58, dated February 24, 1998
The Directors of Banca IFIS S.p.A. are responsible for the preparation of the Report on Operation and
of the Report on Corporate Governance and Ownership Structure of Banca IFIS Group as at December
31, 2021, including their consistency with the related consolidated financial statements and their
compliance with the applicable laws and regulations.
We have performed the procedures required under audit standard SA Italia n. 720B, in order to express
an opinion on the consistency of the Report on Operations and of specific information included in the
Report on Corporate Governance and Ownership Structure as provided for by article 123-bis,
paragraph 4, of Legislative Decree n. 58, dated February 24, 1998, with the consolidated financial
statements of Banca IFIS Group as at December 31, 2021 and on their compliance with the applicable
laws and regulations, and in order to assess whether they contain material misstatements.
In our opinion, the Report on Operation and the above-mentioned specific information included in the
Report on Corporate Governance and Ownership Structure are consistent with the consolidated
financial statements of Banca IFIS Group as at December 31, 2021 and comply with the applicable laws
and regulations.
With reference to the statement required by article 14, paragraph 2, subparagraph e), of Legislative
Decree n. 39, dated January 27, 2010, based on our knowledge and understanding of the entity and
its environment obtained through our audit, we have no matters to report.
Statement pursuant to article 4 of Consob Regulation implementing Legislative
Decree n. 254, dated December 30, 2016
The Directors of Banca IFIS S.p.A. are responsible for the preparation of the non-financial information
pursuant to Legislative Decree n. 254, dated December 30, 2016. We have verified that non-financial
information has been approved by the Directors.
Pursuant to article 3, paragraph 10, of Legislative Decree n. 254, dated December 30, 2016, such
non-financial information is subject to a separate compliance report signed by us.
Verona – March 31, 2022
EY S.p.A.
Signed by: Giuseppe Miele, Auditor
This independent auditor’s report has been translated into the English language solely for the
convenience of international readers. Accordingly, only the original text in Italian language is
authoritative.
