illimity Bank (ILTY) Q1 2025 earnings summary

Executive summary

• Q1 2025 was a transition period, with profitability impacted by lower market rates, higher loan loss provisions, and non-recurring costs, but core business remained resilient and well-positioned for future growth.

• Strategic repositioning completed, focusing on SME lending, Corporate & Investment Banking, and Turnaround, with exit from direct NPE investments.

• Non-core assets are being separated and run off, freeing capital for core business expansion.

• Total assets surpassed €8 billion at end-2024, with a target of €11 billion by 2028, driven by SME lending growth.

• Capital position strengthened, CET1 ratio at 14.7% (+78 bps quarter-on-quarter), and robust liquidity with €1.3 billion buffer.

Financial highlights

• Q1 2025 operating income was €68.2 million, down 8% year-over-year; net interest income fell 19% to €32.1 million.

• Net profit for Q1 was €0.3 million, down from €10.8 million in Q1 2024, mainly due to lower market rates and higher provisions.

• Core business pre-tax profit was €31 million, stable year-on-year, with a cost/income ratio of 21%.

• Retail deposits rose to €4 billion, up 6% quarter-on-quarter; total funding at €7 billion (+11% year-over-year).

• Recurring costs down 3% year-on-year; total costs expected to reduce by €50 million over the plan period.

Outlook and guidance

• 2025 is a pivotal transition year, with profitability affected by extraordinary items, but future growth expected from cost reductions, asset disposals, and core business expansion.

• Strategic guidance targets net income of €80 million and cost/income ratio of 54% by 2028.

• CET1 ratio expected to remain robust, projected between 13%-14% going forward.

• High potential value generation expected from shareholdings, JVs, and partnerships.

• Credit quality will benefit from a high share of loans backed by public guarantees and prudent provisioning.