Banca Sistema's (MI:BSTA) first half figures showed strong growth in customer loans against a stable market background for public authority receivables financing in Italy. The proposed reduction in risk weighting for salary and pension-backed lending bodes well for the bank’s other core activity. On maintained forecasts, the shares remain conservatively valued both on absolute and relative measures.
H118/Q218 results indicate on track
In its first half, Banca Sistema’s factoring turnover and receivables outstanding increased by 29% and 33% respectively compared with the prior year period and overall customer loans were 45% ahead. A change in mix within factoring towards lower-risk, lower-yield assets including tax receivables and the expansion of salary and pension-backed lending has been the main factor behind a reduction in adjusted interest margin. Including fee income on factoring receivables, this was 5.2% compared with 6.1% for H117 and is in line with the group’s three-year plan. The mix change also reduces the credit risk and capital absorption and increases the duration of the loan book. Compared with prior year periods, net income was 12.4% ahead for the first half and 16.5% for the second quarter.
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