Yesterday, illimity has presented its financial results for the second quarter of 2020.
I am pleased to say that our results are even better than the first quarter, which already demonstrated a strong start. This quarter has exceeded our initial expectations, proving the resilience of our business model.
Featuring a lean structure, fast decision-making processes and a fully-digital, open IT platform, we were able to react proactively to this difficult environment, a health crisis we have never seen before. illimity has proven to be resilient in all crucial areas.
We delivered good economic results, with a net profit in excess of €10mln in 2Q, double compared with 1Q. The quality of our existing business is confirmed to be sound, and the resilience of our capital and liquidity position demonstrate that we are on the right path.
The activity in our SME business has recovered since June, following a slowdown at the beginning of the quarter, due to Covid-19. July was a very encouraging month. Notably in factoring, also during the lockdown, we were able to attract and onboard new clients through our fully-digital, remote onboarding process.
The governmental support measures are proving effective as they make viable and attractive deal opportunities by reducing risks- for new and existing positions- and optimising capital use.
The Distressed Credit division has posted another strong quarter: for the third quarter in a row, gross cash flow outperformed our initial plans, despite the lockdown and Tribunal closures.
The market remains very dynamic with opportunities also in new asset classes like UTP portfolios. Our ability to combine the expertise of the SME Division and the Distressed Credit Division, represents a significant competitive advantage. Our pipeline in this new area of activity is already robust.
In our direct banking platform, illimitybank.com, we have invested heavily in generating a strong user experience. With the launch of illimityhubs we created a new frontier, opening the illimity platform also to non-financial partners. This marks a further step in our path towards being a unique open banking player.
All in all, we are very satisfied with the results achieved in the first half of 2020.
Thanks to our flexible business model, we believe we can manage the unexpected risks that have emerged during the first two years of our existence. We are adding several strategic projects, to capture all opportunities in our core markets. Most of our businesses are now even more attractive than previously expected, and new markets are emerging.