Banca IFIS SpA – Value Analysis (MILAN:IF) : December 29, 2017

Capitalcube gives Banca IFIS SpA a score of 82.

Our analysis is based on comparing Banca IFIS SpA with the following peers – Banca Popolare di Sondrio S.c.p.A., Credito Valtellinese SCARL, Banca Monte dei Paschi di Siena S.p.A. and Unione di Banche Italiane SpA (BPSO-IT, CVAL-IT, BMPS-IT and UBI-IT).

Fundamental Overview

Banca IFIS SpA has a fundamental score of 82 and has a relative valuation of UNDERVALUED.

Fundamental Score

Company Overview

  • It currently trades at a Price/Book ratio of (1.67).
  • We classify IF-IT as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • IF-IT has a successful operating model with relatively high net profit margins and capital turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • IF-IT‘s return on equity currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • While IF-IT‘s revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
  • The company’s level of equity capital investment seems appropriate to support the company’s growth.
  • IF-IT might have enough interest coverage to take-on additional debt prudently.

Drivers of Margin

  • IF-IT‘s pre-tax margin suggests relatively low operating costs.
  • The company’s net interest income (net interest income/total revenues) of 34.17% is around peer median suggesting that IF-IT‘s lending operations does not benefit from any differentiating pricing advantage. However, IF-IT‘s pre-tax margin is more than the peer median (72.23% compared to 13.54%) suggesting relatively low operating costs.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 65.83% is around peer median. However, IF-IT‘s proportion of overhead costs (i.e. non interest expense/total revenues) is less than peer median (26.12x compared to 75.84x) — suggesting relatively low fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Banca IFIS SpA is an independent banking company, which specializes in the sector of trade receivables, distressed retail loans, tax receivables, governance and services. It operates through the following business segments: Credi Impresa Futuro; Banca IFIS International; Banca IFIS Pharma; CrediFamiglia and Non-Performing Loans; and Fast Finance. The Credi Impresa Futuro segment supports the trade receivables of small and medium-sized enterprises operating in Italy. The Banca IFIS International deals with companies developing or based abroad that works with Italian customers. The Banca IFIS Pharma specializes in the trade receivables of the suppliers of local health services. The CrediFamiglia and Non-Performing Loans segment comprises all operations active in the distressed retail loans business areas. The Fast Finance focuses on the tax receivables arising mainly from insolvency proceedings. The company was founded by Sebastien Egon von Fürstenberg on August 5, 1983 and is headquartered in Venice, Italy.