February 2022
Solution closes 2021 with a solid performance, recording a pre-tax profit of €9.5 million, a Cost/Income of 65.6% and a cost of credit risk below 50 basis points.
This achievement is the result of the intensive business turnaround activities successfully carried out by the Bank over the last three years, since the entry of the controlling shareholder SC Lowy.
In 2021, the Bank’s assets grew by 50%, exceeding €1 billion for the first time, thanks to both the development of the loans portfolio, which had a net book value of €689 million at the end of 2021 (+51% compared to 2020), and the liquidity generated by funding activities (+53% compared to 2020). The growth in bank volumes was achieved mainly through the development of a Specialized Lending platform, with a focus on performing corporate credit investments (Italian and foreign Bonds and Syndicated Loans, Leverage and Acquisition Finance, Corporate Lending also making use of special guarantees from Mediocredito Centrale, SACE and the European Investment Fund (EIF)), Non Performing and Special Situations, including securitization and portfolio financing.
During the last two years, the Bank has carried out a significant activity to improve the risk profile of the credit portfolio, reducing by approximately 70% the stock of NPEs, which currently represent 4.7% of total net value (net NPE ratio) and approximately 50% of shareholders’ equity (Texas Ratio), and increasing the share of performing loans backed by special MCC/SACE guarantees, equal to approximately 50% of performing loans.
On the funding side, the Bank strengthened its partnership with Raisin DS for the collection of online time deposits in Germany (around €100 million of deposits at the end of 2021) and participated in the ECB’s TLTRO auctions by raising €145 million, pledging performing loans as collateral. In addition, the collection of deposits from branches continued, growing by 22% in 2021.
All this while maintaining a solid capital and liquidity position, as evidenced by a CET1 ratio of 13.6% and an LCR of 221%.
Frank Fogiel, Managing Director of Solution Bank, commented:
“We are proud to have achieved excellent results in 2021 with the contribution of all Solution Bank employees. The Bank has significantly strengthened its positioning in the corporate and distressed credit market, providing its clients with high levels of expertise in credit structuring and analysis. The Bank’s teams are already working on the pursuit of the 2022 objectives, mainly focused on the growth of the Specialized Lending platform at the service of businesses and investors, the development of partnerships with fintech operators also in the digital lending segment and the strengthening of operational structures to support business growth.”