Today is a very special day, as we present our 2021-2025 business plan.
illimity is a new paradigm bank combining the very best of traditional banking with the most advanced technologies, and designed to cater to the needs of Italian SMEs, the lifeblood of our economy. The Bank has been built on 5 strong pillars: market focus, people, IT strategy & architecture, ESG values and a 10% ROE to be reached in FY21.
The 3 segments of the market on which the banking activity is focusing are enormous, with some of them growing even further as a result of the pandemic - we are talking about the world of Performing Loans, UTP and NPL.
illimity has already built a prominent market positioning across all the service lines and can count on effective and sustainable competitive advantages, such as:
· A very competitive cost of funding and a deep customer knowledge
· A network of experts across every industry in which the Bank operates, adding expertise to our internal skills
· An outstanding and singular IT architecture
· A unique end-to-end business model in the distressed credit division that is not being offered by any other market participant.
Alongside the activity of SME credits, we also decided to capitalize on Open Banking and partnered with HYPE to create a new generation of white label platforms. The opportunities in the new retail banking world are huge and we have entrusted this mission mainly to the New HYPE venture, the ownership of which we share with the Sella Group.
The illimity team is our principal force and our management team is marked by its competence, passion and cohesion. There is a huge range of professional experience and every team member has been handpicked, bringing together unconventional, innovative minds with different backgrounds and skills.
Technology is the main driver of change and also the main driver to compete. This is why we created a complete and unique IT architecture, fully digital, modular and in-cloud.
Sustainability is integrated in every aspect of illimity’s activity, and is an essential part of our Bank’s identity:
· ESG-based metrics are used in underwriting practice
· ESG values are integrated in the long-term incentive scheme
· We work with rating agencies to raise the ESG profile of the Bank.
Recently, three other initiatives have also been launched to strengthen the market position of two of our larger divisions:
· We built a dedicated unit for the UTP portfolio market, and we won one of the biggest transactions in the segment
· In illimity SGR, we closed our first fund
· We set-up a Capital Markets desk to enrich our offer to SME clients.
But now let’s look ahead to the future plans that we have in illimity, our strategic ambitions:
· We expect to exceed 20% ROE by the end of the Plan in 2025. All divisions will contribute to these solid results
· Net profit will evolve to more than €240mln in 2025
· There will be a sustainable and increasing flow of dividends starting from 2022
· The CET 1 ratio will be stable above 15% and the total capital ratio around 18%
· There are several initiatives, contributing to the delivery of the Plan, that are about to start or have already begun, to strengthen our strategic portfolio of activities
· We will continue to reinforce the technological leadership - in fact we are happy to announce a strong partnership with the ION Group.
From now on we will have 4 divisions:
· The SME division, that is our Growth Credit Division, has a very strong set-up and will leverage our powerful organisation in the years to come
· The DCIS division, that is the Transformation Credit Division, will continue to show a robust growth trajectory with high profitability
· The Direct Banking Division, that will be called “B-ILTY” from now on, is ready to generate significant results, unlike the many new direct banks being born in Europe recently
· The SGR will allow illimity to grow without limits.
Furthermore, we will strengthen our portfolio of activities. First, the Direct Bank (B-ILTY) for small business will be used to serve the small corporates segment, and secondly, the New HYPE will accelerate the development of a sustainable revenue flow, driving profitability.
We must also recognise that new business models and disruptive products will have to be continuously developed, and for this, the right partnerships will be crucial. This is why we are proud to announce a significant partnership with the ION Group, that shares our innovation trend vision. To make the most of our partnership, illimity has:
· Signed a license agreement on the information systems developed by illimity, which will lead to an accelerated diffusion of our new architecture
· Identified a number of long-term collaboration areas in crucial sectors such as data analytics, credit scoring, market intelligence, SW developments and many others, in order to keep the two Groups’ interests aligned.
We believe we have presented a solid plan with important strategic and financial objectives. We are also convinced that we will be able to go above and beyond the initiatives that we are announcing, to grow further still and to prove ourselves useful as we make profits of sure interest.