illimity Bank (ILTY) Q4 2024 earnings summary

Executive summary

• 2024 marked a pivotal year with a completed strategic shift to an SME-focused bank, a leaner organization, and a new structure with two Deputy CEOs.

• Operating profitability grew 21% year-over-year, despite a move away from direct NPE investments and significant extraordinary items.

• Extraordinary and non-recurring items, including a EUR 53 million capital gain from a tech JV and EUR 118 million in provisions and goodwill impairments, impacted results.

• Net result before goodwill impairments was EUR 39 million; after EUR 39 million in impairments, the bottom line was just above breakeven.

• An unsolicited public offer from Banca Ifis is under review, delaying some planned M&A and strategic projects.

Financial highlights

• Net customer loans grew 17% year-over-year to EUR 4.8 billion, led by SME origination.

• Operating income (excluding non-recurring items) was EUR 294 million, slightly down year-over-year; total operating income reached EUR 335 million.

• Operating profit (excluding non-recurring items) rose 21% to EUR 94 million.

• Net profit, excluding non-recurring items, reached EUR 40 million for 2024; reported net profit was EUR 0.4 million after impairments.

• Cost income ratio improved to 18% in corporate investment banking; group-wide cost income at 60%, with a target below 50%.

Outlook and guidance

• NII expected to remain under pressure in 2025 due to lower market rates and declining lending margins, partially offset by lower funding costs.

• Calendar provisioning for 2025 expected at EUR 15 million, similar to 2024.

• Cost of funding peaked at 4% in 2024, declining to 3.5% in early 2025; further downward trend expected.

• Credit quality to remain high with a large share of loans backed by public guarantees; capital position expected to stay strong.

• No dividend proposed for 2024.