illimity Bank SpA (ILTY) AI Stock Analysis

• Market Cap: €341.76M
• Dividend Yield: 6.76%
• Average Volume (3M): 262.35K
• Price to Earnings (P/E): 4.9
• Beta (1Y): 0.87
• Revenue Growth: -5.68%
• EPS Growth: -338.10%
• Country: IT
• Employees: 766
• Sector: Financial
• Sector Strength: 71
• Industry: Banks - Regional
• EPS (TTM): -1.40
• Shares Outstanding: 84,067,810
• 10 Day Avg. Volume: 123,800
• 30 Day Avg. Volume: 262,347
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €3.70
• Price Target Upside: -9.09% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 59 Neutral
• Price Target: ―

illimity Bank SpA presents a mixed outlook with significant challenges in financial performance, particularly due to declining revenue and negative cash flows. Strong balance sheet fundamentals provide some stability, but technical analysis indicates potential short-term gains with caution for overbought conditions. The company's valuation is a concern with a negative P/E ratio, although the high dividend yield offers some appeal. Overall, the stock score reflects the need for improved profitability and cash flow management.

Positive Factors

Non-core Asset Disposals

Illimity expects to generate over 200bps of capital from the disposals of non-core assets that will be crucial to feed the planned 20% CAGR of loans in the core segments.

Strategic Initiatives

Illimity disclosed its strategic guidelines that foresee a backend-loaded profitability recovery, based on the refocus on its core activity towards SME lending and Investment Banking, cost reduction and non-core asset disposals.

Negative Factors

Earnings Guidance

The strategic guidelines project the profitability and the shareholders’ remuneration to remain subdued for the next two years: in FY25, the profitability is expected to decline, and, in FY26, the net income guidance is significantly below current consensus.

Profitability and Shareholders' Remuneration

Profitability and shareholders' remuneration is expected to remain subdued in the short-medium term and to recover after the completion of the strategic initiatives.

Shareholder Opposition

The opposition of a group of shareholders owning 27.2% of illimity could put the success of Banca IFIS's offer at stake, making the merger more difficult.

illimity Bank SpA Business Overview & Revenue Model

Company Description

illimity Bank SpA (ILTY) is an Italian financial institution that focuses on providing innovative banking solutions to underserved markets. The bank operates primarily in the digital banking sector, offering a range of services including lending to small and medium-sized enterprises (SMEs), purchasing and managing corporate non-performing loans (NPLs), and offering digital direct banking services to retail customers. It leverages advanced technology and data analytics to deliver tailored financial solutions.

How the Company Makes Money

illimity Bank SpA generates revenue through multiple channels. A significant portion of its income comes from interest earned on loans provided to SMEs, which is facilitated through its advanced data-driven lending platform. Additionally, the bank earns money by acquiring and managing corporate NPLs, where it seeks to maximize recovery through restructuring or sale of these assets. The digital direct banking services, which include deposit accounts and other retail banking products, also contribute to the bank's income through interest margins and transaction fees. Strategic partnerships and investments in fintech and similar sectors further enhance its revenue streams.

illimity Bank SpA Financial Statement Overview

Summary

Overall, illimity Bank SpA presents a mixed financial picture. The income statement shows a troubling decline in revenue and profitability with a score of 62. The balance sheet remains a strong point with no debt and adequate equity ratios, scoring 79, offering some stability. However, persistent negative cash flows, scoring 55, raise concerns about operational efficiency and liquidity management. The company needs to address profitability and cash flow challenges to improve its financial health.

Income Statement

The company's income statement shows significant revenue fluctuations, with a recent revenue decline of 67.14% from 2023 to 2024. Gross profit margins are consistently high, reflecting effective cost management, but net profit margins have been negative in 2024 due to the losses reported. Historical EBIT and EBITDA margins were strong but recently unavailable, raising concerns about profitability trends.

Balance Sheet

The balance sheet is relatively strong with a high equity ratio of 10.64% for 2024, indicating a solid capital base. The absence of debt in 2024 further strengthens the financial position. However, the declining trend in stockholders' equity could pose a risk if not reversed. Historically, the company has maintained a conservative debt profile, which is a positive indicator of stability.

Cash Flow

Cash flow analysis highlights challenges, with negative operating cash flow in recent years indicating underlying operational issues. Free cash flow growth has been negative, pointing to pressures on liquidity. The free cash flow to net income ratio is concerning due to losses, suggesting the company is struggling to convert earnings into cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	455.34M	543.84M	261.62M	207.52M	133.62M
Gross Profit	133.45M	336.07M	261.62M	207.52M	133.62M
EBITDA	-32.20M	176.32M	125.77M	98.66M	47.31M
Net Income	-38.40M	104.40M	75.33M	65.59M	31.09M
Balance Sheet
Total Assets	8.40B	7.26B	6.36B	4.66B	4.13B
Cash, Cash Equivalents and Short-Term Investments	414.10M	431.70M	703.66M	577.57M	1.06B
Total Debt	0.00	611.74M	686.91M	530.56M	333.95M
Total Liabilities	7.50B	6.30B	5.51B	3.89B	3.54B
Stockholders Equity	894.20M	950.49M	841.32M	772.82M	583.12M
Cash Flow
Free Cash Flow	-26.99M	-232.15M	173.16M	-494.79M	173.44M
Operating Cash Flow	-7.63M	-199.81M	200.55M	-473.22M	216.34M
Investing Cash Flow	-11.00M	-34.22M	-27.45M	-46.48M	-42.90M
Financing Cash Flow	-25.81M	-15.05M	-100.00K	73.87M	-736.00K

illimity Bank SpA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:ILTY, the sentiment is Positive. The current price of 4.07 is below the 20-day moving average (MA) of 4.08, above the 50-day MA of 3.87, and above the 200-day MA of 3.60, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 60.10 is Neutral, neither overbought nor oversold. The STOCH value of 15.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:ILTY.

illimity Bank SpA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BPSO	80 Outperform	€5.68B	9.39	14.61%	6.33%	3.04%	18.18%
BMPS	70 Outperform	€10.32B	6.13	15.12%	10.50%	-21.18%	―
Sector *	69 Neutral	€17.26B	12.49	15.03%	5.53%	-2.95%	-8.40%
ISP	61 Neutral	€97.85B	10.82	13.04%	6.19%	-15.02%	15.16%
ILTY	59 Neutral	€341.76M	4.92	-22.88%	6.76%	-5.68%	-338.10%

illimity Bank SpA Corporate Events

illimity Bank Approves Financial Statements and Appoints New Board

The annual shareholders’ meeting of illimity Bank S.p.A. approved the 2024 financial statements, which reported a significant loss. The meeting also confirmed the composition of the Board of Directors and Management Control Committee for the 2025-2027 period, ensuring continuity in governance. The approval of the remuneration policy and incentive system reflects the bank’s commitment to aligning its compensation structures with strategic goals. These decisions are crucial for stabilizing the bank’s financial position and maintaining stakeholder confidence amid challenging financial results.

Fitch Confirms Ratings, Places illimity on Positive Watch

Fitch Ratings has confirmed all ratings for illimity Bank S.p.A., maintaining its Long-Term Issuer Default Rating at ‘BB-‘ while revising the outlook to Rating Watch Positive. This change follows Banca Ifis’s announcement of a voluntary Public Tender and Exchange Offer for all illimity shares, potentially impacting the bank’s future operations and market positioning.

Fitch Confirms illimity Bank Ratings, Outlook Upgraded to Positive

Fitch Ratings has confirmed all ratings for illimity Bank S.p.A., maintaining the long-term issuer rating at ‘BB-‘ while revising the outlook to Rating Watch Positive. This change follows Banca Ifis’s announcement of a voluntary Public Offer of Purchase and Exchange for all shares of illimity, indicating potential future developments in the company’s market position and shareholder structure.

illimity Bank Prepares for Corporate Body Renewal at Upcoming Annual Meeting

illimity Bank S.p.A. has announced the submission of a list of candidates for the renewal of its corporate bodies ahead of its Annual Shareholders’ Meeting on April 29, 2025. This development is part of the agenda for the meeting, and additional candidate lists can be submitted by entitled shareholders by April 7, 2025. The publication of these lists is scheduled for April 8, 2025. This announcement is significant as it reflects the bank’s ongoing governance processes and may impact its strategic direction and stakeholder engagement.

illimity Bank Prepares for Annual Shareholders’ Meeting with New Candidate List

illimity Bank S.p.A. has announced the submission of a list of candidates for the renewal of its Corporate Bodies ahead of the Annual Shareholders’ Meeting on April 29, 2025. This development is part of the bank’s ongoing governance processes, and the lists will be publicly available by April 8, 2025, potentially impacting the bank’s strategic direction and stakeholder engagement.

illimity Bank Sets Strategic Guidelines for 2026-2028

illimity Bank has approved its Strategic Guidelines for 2026-2028, focusing on credit and investment banking services for SMEs, reducing operating costs, and enhancing non-strategic assets. The bank aims to maintain a solid capital position and achieve significant growth in total assets and net profit by 2028, despite challenges from external economic factors and market shifts. The strategic shift reflects a response to the unpredictable economic environment, including rising interest rates and a decline in the NPE market, prompting illimity to concentrate on areas with greater market potential.

illimity Bank Releases Key Documents Ahead of April Meeting

illimity Bank S.p.A. has announced the availability of key documents for its upcoming ordinary meeting scheduled for April 29, 2025. These documents include the 2024 financial report, corporate governance report, and remuneration policy, which are crucial for stakeholders to review the bank’s performance and strategic direction.

illimity Bank Reports 2024 Financial Results Amid Strategic Repositioning

illimity Bank S.p.A. reported a negative net result of 38.4 million euros for the 2024 financial year, impacted by significant extraordinary adjustments and goodwill impairments. Despite these challenges, the bank demonstrated strong operating profitability, driven by a 21% increase in net operating results and a 9% growth in the Corporate & Investment Banking sector. The bank’s strategic move to partner with APAX Partners in creating altermAInd S.r.l., a new technological player in the AI sector, resulted in a net capital gain and strengthened its technological capabilities. The bank maintains a solid capital and liquidity position, with a CET1 ratio of 13.9% and a liquidity buffer of 1.2 billion euros.

illimity Bank Reports Strong 2024 Growth Amid Strategic Repositioning

illimity Bank S.p.A. reported strong growth in its 2024 financial results, with a 21% year-over-year increase in operating results and a solid capital position. The bank has undergone strategic repositioning to enhance its focus on credit services for SMEs, while also investing in new initiatives with future growth potential. The recent takeover offer by Banca Ifis has impacted some of illimity’s operations, delaying certain projects and necessitating a thorough evaluation of strategic options with shareholder interests in mind.