BFF Banking Group (AO) | Hold | BFF approves July AT1 coupon payment

Research evidence excerpt

BFF Banking Group (AO) | Hold | BFF approves July AT1 coupon payment

BFF Banking Group Hold | Target Price: EUR2.30

Company description Management

BFF is a leading player in specialty finance in Europe active in non-recourse Ranieri de Marchis (Chairman)

factoring, credit collection management of receivables towards the public Giuseppe Sica (CEO)

administration in Italy, Spain, Portugal, Greece, Croatia and France (as well as Giuseppe Sica (CFO)

Poland, the Czech Republic and Slovakia, with the acquisition of Magellan in Key shareholders

2016) and in the payment and custodian bank business (with the acquisition of Free float 94.00%

DepoBank in 2021). Management 6.00%

Investment case Valuation methodology

Following the Bank of Italy’s approval, which had closed the Our TP is based on an EVA-based model (COE of 16.1% and g of

supervisory proceedings and lifted the restrictions on dividend 1%).

distributions, BFF has now found itself back in a new regulatory We believe the uncertainty is very high at this stage, as the bank

setback, which could materially affect both past results and is still assessing the full impact of the regulator’s findings and

future profitability. key questions remain unresolved. Until there is clearer visibility

The model’s defensive nature provides a natural hedge in on these points, we think the stock is likely to remain driven by

downturns: longer payment terms from public administrations headline risk rather than fundamentals.

tend to increase LPI accruals, supporting profitability even as Risks to our rating

economic conditions deteriorate. A slowdown in new business volumes, particularly across BFF’s

BFF operates with near-zero credit risk, as its exposures are to core geographies (Italy, Poland, and Spain).

public sector counterparties.