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Illimity: focus shift from NPL to performing loans

Illimity has announced a strategic decision to rebalance its core business by reducing its focus on non-performing exposures and concentrating more on loans to SMEs. According to rumours reported by Milano Finanza, the institution founded and led by Corrado Passera is considering a number of strategic options, and some of these include the divestment of a significant amount of NPEs acquired in recent years,

Projects under consideration and new strategic directions

The purchase and management of non-performing loans has been a key element for this institution from the very beginning, also by virtue of the presence as co-founder of Andrea Clamer, formerly NPL manager of Banca IFIS, and in the early years the bank was very active in this sector and participated in all major tenders for the sale of impaired loans.

More recently, however, there has been a slowdown and restructuring phase within the sector linked to the conclusion of the process of reducing impaired loans on bank balance sheets. To this should be added that for operators with a banking licence, the calendar provisioning rules introduced by the ECB make it more onerous to keep non-performing loans on the balance sheet. Both these elements constitute a valid motivation for Illimity to reconsider its business model.

Entering Italian NPE Newsletter

The New Business Plan

Although it has already started on the path towards a core business more focused on performing loans, the new strategic approach will be defined in the business plan to be presented after the half-yearly report. Investments in non-performing exposures, which have already been reduced to 7% of total assets, should decrease further, freeing up resources to be used for other types of assets such as factoring, structured finance and special situations.

Some signs of the new course embarked upon by the bank can also be deduced from the results of the latest quarterly report: in the first nine months of 2023, net interest and other banking income grew by 21% to EUR 282m and net interest income increased by 27% to EUR 147.7m.

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Blogger and Investment Management Advisor with focus on Distressed Assets & NPL. Massimo is Chief NPL & Fintech Editor at Credit Village Magazine.

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