Banca Ifis slips following Bank of Italy’s findings and uncertainty over capital requirements

(Il Sole 24 Ore Radiocor) - Banca Ifis slips on the Milan Stock Exchange (Banca Ifis), bucking the trend compared to FTSE MIB. The share price is being weighed down by the Bank of Italy’s inspection report, which concluded with a ‘partially unfavourable’ assessment, and the initiation of proceedings to determine additional capital requirements, despite the ‘full and unconditional’ green light given to merger with illimity and the confirmation of €75 million in annual synergies from 2027.

Intermonte maintains a ‘Neutral’ rating on the share, with a target price of 15.9 euros, and identifies the regulatory front as the main area of concern. “The Bank of Italia’s inspection report highlighted critical issues in several areas”, including anti-money laundering (AML), cyber risk (ICT – Information and Communication Technology), as well as “the credit process, governance and internal controls”, leading to the launch of specific remedial plans and a process to determine any additional capital requirements”, the analysts explain.

According to experts, ‘the market’s attention will now focus on the potential financial and accounting implications arising from the measures required by the regulator and on the outcome of the process to divest the NPL business’. Intermonte points out, however, that the bank had “recognised precautionary provisions in this regard, alongside its second-quarter results”.

But there are also some positive developments: ‘a number of significant strategic advances’ have been confirmed, including authorisation for the merger with illimity, new synergies from 2027 and the aforementioned progress on the disposal of NPLs (non-performing loans). The group has in fact received “non-binding” offers for the entire business and aims to conclude the second phase by the end of the year with a binding offer .

“The interest shown by industry players and specialist investors suggests that competition is focused primarily on the value of the servicing platform and its ability to generate future fees, as well as on the assets held,” explains Intermonte. The key point, they add, will be “understanding the final valuation of the assets, not least to assess any potential discounts” on the net book value (NBV). From an equity perspective, the share price has fallen by around 47 per cent since the start of the year.