Chairman and CEO’s Letters

Chairman and CEO

CHAIRMAN

Dear Shareholders,
2015 will take its place in Banca IFIS’s history as a year in which many records were reached. Out of all of these, I prefer to remember the one where the Bank achieved a highly important level of net profit, one we could not even have imagined only a few years ago.

Let it be remembered that the long path we have followed so far has been marked over time, and even more so in 2015, by the extreme focus we have paid to the Bank’s solidity; to the profitability of its activity and to the quality of our own investments, both in the interest of our clients and in the interest of our financial statements. I don't think it is possible to imagine a bank being on the market in a sustainable manner, without thinking of a bank that produces wealth both for itself and the economy with which it interacts. Our efforts have always been aimed in this direction and so they will continue.

We live and create in difficult times. Italian and European small medium enterprises, families in financial difficulty and the real economy need efficient banks geared to clients’ needs, but also banks that are able to manage risks over time, that can ensure correct management of their actions and that can guarantee that they are able to produce revenue. In these trying times, Banca IFIS has shown, year after year, that it is able to continually choose the right actions to take.

The Chief Executive Officer will now outline the strategies followed that led to the results, together with how the Bank has planned its way forward in order to reinforce Banca IFIS’s actions and render it even more sustainable.


CHIEF EXECUTIVE OFFICER

The growth of Banca IFIS started many years ago in a completely different economic environment. Twelve years after its founding, in 1995, the offices in Genoa at that time were used by around twenty people, total assets were less than 40 million euro, the activity was focused on a hundred customers in factoring, margins were tight and asset quality uncertain. The stock market (at the time the shares were listed on the OTC market) had reached a minimum of approximately 300 lire, against a nominal value of 1,000 lire, for a total capitalisation of around 9 billion lire, equivalent to roughly 4.5 million euro. Since then the growth of the stock market value of the Bank has grown over 300 times, total assets have grown by more than 200 times, personnel by 40 times, not to mention the profitability and strategic perspectives.

2015 was a very good year, in some ways extraordinary. Profits, as pointed out by the President, reached a level of excellence; growth was strong, in line or better than expected, in all sectors; credit quality continues to be one of the strengths of the Bank, together with the financial robustness and good liquidity.

These results, this growth and this robustness do not come about by chance. They are the result of a vision that started many years ago and which has seen the Bank develop its activity in a way that is far different from the habits of the banking system.

Giovanni Bossi - Chief Executive Officer

Over time, Banca IFIS has sought with increasing insistence direct contact with the customer, whether corporate or an individual, "skipping" beforehand the intermediation of many independent actors present in the market which was incorrectly defined "near-banking", and then reducing the distance between assessment, risk management, customer care, and the client, allowing the latter more and more direct access to the decisional functions of the Bank. The consequence has been a move away from the "strong" territorial presence represented by the traditional bank counter (whose brokerage for the customer is not consistent with the development model of Banca IFIS) and replacing it with a relationship that is as direct and as modern as possible, ready for digital evolution and not held back by the need to dilute inefficiencies and adversity to change, making customers pay the consequent cost.

The Bank believes in technological evolution and reduction of the costs of services down to zero, if possible. It believes that the wind of the digital evolution will swell the sails of operators who will know how to transfer to the market the cost savings from technology, without using them to cover their own inefficiencies. It believes that the customer has the right to pay only for the services they require and feel they need, on the best terms possible, and that it is less and less reasonable to think of a model of a futuristic bank that relies on margins of transactions or brokering on third-party products applied to customers who are not always fully aware of what they are purchasing.

The Bank plays its role as a provider of credit and risk-taker in the forms which it has chosen. This is not all the forms that the market requires because it is not possible for a bank the size of Banca IFIS to offer the full range of credit products. But, with its daily action, it engages to be a benchmark for its customers, whether they are small businesses, families or firms in difficulty or healthcare providers, with the awareness of providing them with solutions to real problems, offering products and services that are at the same time an occasion for fair profit for the Bank and welcome opportunities or solutions to real problems for customers. It is only in this manner that a bank can carry out its role with dignity: to serve the economies of businesses and families with whom it comes into contact with popular services that, improving the quality of life of its customers, are also able to strengthen the Bank, enabling it to grow, with the right income, both healthy and balanced, and with the legitimate ambition of serving an even greater number of customers with an increasing range of products bringing, with its action, greater prosperity for everyone involved.

This vision includes the interventions developed over the years by the Bank. It is a natural explanation for the historic role in the support of small and medium-sized enterprises, in Italy and in Europe, origin of the Bank and still a primary element of its credit investments and profitability, as well as the more recent interventions in the sector of suppliers of Healthcare Organisations and Pharmacies. But natural development is also in the strong growth in the field of "non-performing" assets, which sees the Bank as buyer and manager of portfolios of deteriorated loans that over a million Italian families have not been able to pay back, with the aim also of restoring to those families over time financial conditions of normalcy; or the presence in the sector of tax receivables as accelerator of settlement processes that are still too long. And again in this framework, of relevance are the liquidity collection instruments, which can transfer to almost 100 thousand customers a very attractive return on their savings due to the complete absence both of brokering and of costs; or intervention on government bonds, lending opportunities for public debt collected because of the difficulties in refinancing at times, which made it possible, with income taxes paid, to strengthen the Bank's capital.

This is the framework in which the Bank makes and acts on its choices. It has been this way up to 2015 and will continue this way in the future. Banca IFIS’s actions will expand still further and the Bank will continue to seek internal growth with determination, whilst safeguarding Shareholders’ equity against risks and evaluating market opportunities attentively.

We have started 2016 with an excellent capital base, a quality of assets that is unique in the Italian market and abundant liquidity. These elements represent the foundation of the Bank’s commitment to the system. We are highly aware that we have a very important role and we carry that role out responsibly and to the best of our ability in the interests of our clients, our Shareholders, our personnel and all those who work alongside us.

CHAIRMAN

I would like to point out that the appreciation by the Stock Market of the Banca IFIS share has been significant and that the Market capitalisation has more than doubled in the 12 months of 2015. The Board of Directors and the entire Bank feel the responsibility for the values achieved and aim to further improve them in a context of sound and prudent management.

Thanks from myself personally and from the entire Board go to all those who have contributed to the achievement of this result. We are aware of the centrality of the support of all the men and women who have shared this journey and who will continue to build together with the Bank.

The results obtained will allow us to continue a policy of distributing a high dividend, which I consider acceptable to all Shareholders, with the hope that 2016 will confirm another excellent year.

Chairman
SEBASTIEN EGON
FÜRSTENBERG

Chief Executive Officer
GIOVANNI BOSSI