Funding

In 2014, the Italian banking industry's retail funding, mainly consisting of domestic deposits and bonds, fell overall, especially as a result of the negative trend in medium- and long-term funding. In November 2014, total funding amounted to 1.709 billion Euro, down 1,46% from November 2013 and 1,2% from the end of last year.

In 2014, Banca IFIS continued to access collateralised interbank loans through repurchase agreements, relying on a significant pool of Italian government bonds accepted as collateral by other lenders or, as a last resort, on the Eurosystem, thanks to the liquidity provided by the ECB.

During the year, the Bank disposed of a portfolio of assets previously used for refinancing operations with the Eurosystem by issuing and repurchasing 138 million Euro in bonds that the Italian Government had guaranteed for a three-year period and 69 million Euro in bonds the Government had guaranteed for a five-year period, paying 1,03% in fees. The reason was that the bond issuances could no longer be used for refinancing purposes; furthermore, their cost was relatively high.

In February 2012, Banca IFIS received a three-year 500 million Euro loan at a 0,25% rate (ECB's key interest rate) as part of the second tranche of the LTRO programme, which is yet to be reimbursed. The Bank participated in the ECB's second TLTRO (Targeted Long Term Refinancing Operation) auction, borrowing 119 million Euro in December for 4 years at a fixed 0,15% rate.

Funding never showed signs of stress and securities trading generated positive results in terms of profitability, helping to ease retail funding costs. These are traditionally higher on the online market, where the volatility of deposits not sufficiently remunerative for customers may represent a risk.

 

Last updated on 2015-01-19