illimity Bank S.p.A. the italian challenger bank specialized also speicalized in debt buying and NPE management has announced that the Fitch Ratings has confirmed all the ratings assigned to the Bank. In particular, the Long-Term Issuer Default Rating (IDR) has been maintained at “BB-” with a Stable Outlook and the Long-Term deposits Rating at “BB”.
The rating agency highlights the high specialization of the Bank’s business model focused on the SME world, with a competitive advantage given by the presence of both cyclical and countercyclical businesses that can support structural profitability.
The credit quality benefits from a high presence of public guarantees, with a gross non-performing loan (NPL) incidence, net of these guarantees, at 1.3%.
The performance of the collections activity remains regular thanks to a very prudent NPL pricing model.
The operating profitability is considered satisfactory and expected to increase in 2024 and 2025, benefiting from the anticipated increase in lending volumes and related economies of scale.
The liquidity profile is considered adequate in light of the diversification of funding sources between wholesale and retail, and with domestic funding primarily based on retail term deposits, the remuneration of which remains linked to market interest rate trends.
With regard to the capital position, the latter is considered adequate given the wide buffer compared to the minimum regulatory requirements.
Here the complete list of Fitch’s ratings assigned to illimity :
• LT IDR: BB- • ST IDR: B • Viability: bb- • Long-Term deposits: BB • Short-Term deposits: B •
Senior preferred LT: BB- • Subordinated LT: B
Managing Director of Credit Village, Roberto Sergio has more than 20 years of experience in NPL and distressed debt in the Italian and International market. He is the editor of the NPL column in Credit Village Magazine and the director of Credit Village's National NPL Market Observatory.