Last close As at 05/08/2026
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Market capitalisation
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Research: Financials
Banca Systema (BST) is an Italian speciality finance provider with factoring as its main activity. The long payment times that characterise public administrations (PAs) in Italy, together with EU-mandated late payment interest, create an attractive opportunity with low credit risk for a specialist lender such as BST. In consumer finance, BST has established a strong position in salary and pension-backed lending and has a small but growing pawnbroking business, providing alternative sources of growth and diversification.
Written by
Banca Sistema |
A specialist lender growing in niche segments
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Financial services |
Deutsches Eigenkapitalforum 2021
18 October 2021 |
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Business description
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Banca Sistema (BST) is an Italian speciality finance provider with factoring as its main activity. The long payment times that characterise public administrations (PAs) in Italy, together with EU-mandated late payment interest, create an attractive opportunity with low credit risk for a specialist lender such as BST. In consumer finance, BST has established a strong position in salary and pension-backed lending and has a small but growing pawnbroking business, providing alternative sources of growth and diversification.
Proven know-how and resilience
BST’s factoring business (60% of customer loans, 69% of total income in H121) focuses on purchasing trade receivables owed by Italian PAs or the tax authority, mainly to leading multinationals and corporates. Established in 2011, BST has strong analytical capabilities and knowledge of the PA obligors and their suppliers, which supports pricing, new business wins and the yield achieved. Pension and salary loans (37% of loans, 19% of total income) are mainly purchased but are increasingly originated directly. More than 80% are backed by PA salaries or pensions. Pawn lending has grown from a small base aided by an acquisition from Intesa Sanpaolo in 2020 and a portfolio purchase this year: loans reached €83m at end H121. This was only 3% of the group total but the share of total income was 11%. The group proved resilient during the onset of the pandemic and, on a longer view, between 2012 and 2020 its customer loans, total income and net income grew at compound annual rates of 23%, 20% and 37% respectively.
Three-year plan 2021–23: Developing core areas
In its three-year plan, BST looks to consolidate its position in factoring in Italy, while looking to develop internationally (it has a Spanish partnership). For pension and salary loans, the aim is to originate more loans directly and digitise a relatively traditional business. The pawnbroking business is seen as having good growth potential with new branches to be opened and an IPO for the unit a possibility. The target is to increase group net customer loans from €2.6bn in FY20 to €4.2bn in FY23 (compound growth of 17%), with the total income margin stable at 4.5%.
Valuation
Using an ROE/COE model (assumed long-term growth 2% and 10% cost of equity), the current share price implies an assumed ROE of c 8%, which is cautious compared with an FY21e consensus of 10.5% and potentially over 14% in FY23 if three-year plan targets are met (explicit three-year plan ROTE target >16%).
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Consensus estimates
Source: Refinitiv |
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Research: TMT
discoverIE’s trading update confirmed that performance in H122 was ahead of board expectations, with organic revenue growth of 15% y-o-y and 8% versus the pre-COVID H120. Despite supply chain challenges, the company maintained gross margins. Q222 order intake continued in the same strong vein as H221 and Q122, resulting in a record order book entering H222 and driving a small upgrade to our FY22 and FY23 forecasts.