Banca IFIS Appoints New CEO After Central Bank Flags Risk, Shares Dive 14.5%
Central Bank Inspection Prompts Leadership Change and Governance Overhaul
MILAN, Sept 25 (Reuters) - Specialist Italian lender Banca IFIS said on Friday it had appointed a new chief executive and was strengthening its governance structure after an extensive on-site inspection by the country's banking supervisor raised a number of issues.
Shares in IFIS fell 14.5%, triggering an automatic trading suspension, while Italy's banking share index rose 1.4%.
Details of the Central Bank's Report
IFIS said it had received on Wednesday a report from the Bank of Italy which conducted a supervisory audit between January and June.
Key Risks Identified
The central bank flagged anti-money laundering, digital technology and operational risks and questioned the adequacy of the internal control system and the governance structure.
Loan Assessment and Capital Requirements
IFIS said it would continue the assessment of loans on its books to ensure they are properly classified.
The Bank of Italy has 90 days to decide the size of additional capital requirements for IFIS, the lender said, adding it would have 45 days to present its own observations.
IFIS said two penalty proceedings against the bank had been initiated, without providing further details.
Actions Taken by IFIS
Governance and Risk Management Improvements
To align with the central bank's indications, IFIS is reviewing its credit procedures, hiring new professionals, strengthening the internal risk and control functions and drawing up a new business plan.
Leadership Transition
The lender's board named Raffaele Zingone as the new chief executive with immediate effect, replacing Frederik Geertman. Zingone has been with IFIS for two decades, becoming chief commercial officer in 2021 and leading digital lender illimity since last year.
Strategic Moves and Ownership Structure
Acquisition and Integration of illimity
IFIS, which is 45% owned by the Fuerstenberg family through Luxemobourg-based vehicle Fuerstenberg Scogliera Holding, bought illimity last year in the consolidation wave sweeping Italian banking.
IFIS said the Bank of Italy had authorised it to incorporate illimity, which specialised in bad loans, a market that has dried up in Italy. IFIS is now selling its own bad loan operations. It said it had just received non binding bids for the business and aimed to conclude the sale this year.
(Reporting by Valentina Za; Editing by Emelia Sithole-Matarise)
