Sica: ‘The sale of receivables is just a small step; assets and coupons lie at the heart of BFF’s future’

(Il Sole 24 Ore Radiocor) – “This is another small step in the tactical measures to be taken. Now the more strategic ones remain”, because the way forward is to “ensure business continuity” and “paying dividends”, backed by capital levels that will need to rise “well above” the regulatory minimums. According to Giuseppe Sica, at the helm of Bff Bank for just over half a year, the hard work has only just begun, as he explains in this interview with Radiocor. The list is long, whilst the board continues to analyse the proposals from the various suitors. Rumours suggest Amco and Bper, as well as CF+, Cerberus – for whom there may be some preference – Sella and perhaps Banco Bpm (some of whom are only targeting a stake in BFF), whilst among the minority shareholders there are those who have knocked on his door, asking him not to sell off the non-performing loans in the portfolio at a discount. Nothing has been decided, Sica points out: ‘The bank has received several non-binding offers, and the board of directors is continuing to examine them. It is important to emphasise the word “non-binding”, because it means they are subject to conditions and analysis, and we are assessing those conditions.’

Meanwhile, BFF’s board of directors has just approved the agreement to sell the overdue receivables owed by the public sector in Italia and Spain to an investment fund. This portfolio alone is valued at around 127 million euros on the balance sheet: ‘This is a very significant transaction, both because we are selling a crucial portion of the loans we hold against insolvent Italian institutions, and because we are selling the default interest we hold in Spain at values slightly higher than their book values. We have already reached an agreement with the fund, which has committed to purchasing them in the future as well. The reclassification that the Bank of Italia imposed on us in March this year had created a level of past-due loans in Spain that was 10 times higher than the historical average. With this transaction, we are returning to pre-Bank of Italia levels.”

According to rumours, the manager has just returned from a recent meeting requested by shareholders who sent a letter to the board of directors regarding the ‘new direction’ of the former Farmafactoring: ‘I have held dozens of meetings with institutional investors who are asking me to speed up the derisking operations as much as possible, because that would make it easier to access the debt market. Between now and April next year, we need to refinance 450 million in debt.” He therefore sums up: “We are listening to everyone and discussing matters with all investors, but our duty as managers is to ensure business continuity.”

The key issue remains capital levels, with calendar provisioning taking its toll: with the transaction between Spain and Italia, ‘we are freeing up a total of over 60 million in capital looking ahead, demonstrating that our business model works and that management is capable of implementing the initiatives the market expects of us. Between the BTP transaction in July and today’s deal, we have generated over 100 million euros in capital”. But that is not enough; it is almost as if this initial move were merely a first step: “The hurdles of 2027 and 2028 remain, as does that of business continuity. So, whilst we look to the future with a little more peace of mind, we are aware that we must do more, because our objective cannot simply be to meet the regulatory ratios for the next six years. We are a bank; we must maintain levels well above the regulatory minimums and pay dividends. The business model, as has already happened in Spain, must become sustainable everywhere.”

Looking ahead, one of the potential major transactions remains “the securitisation worth 1.2 billion euros, as a guide. If there is interest from counterparties, we are here to create value for shareholders. The aim is to dispel any doubts regarding the bank’s going concern, which still persist’. And it is precisely this first move, in Sica’s view, that shows we are heading in the right direction: ‘Some shareholders have asked us to sell off parts of the business. We’ve done better because, without selling anything, we’ve raised capital whilst maintaining the profitability of that business”, so much so that “we’ve sold 127 million in loans with minimal impact”.