Funding

The measures taken by the ECB's Executive Board since the end of 2011 allowed Italian banks to cope with the fall in foreign interbank funding seen from the second half of 2011. The market remained relatively liquid given high quality collateral (typically sovereign bonds); as for unsecured funding needs, all banks struggled to meet them. Smaller banks could not access the unsecured interbank market except for short maturities, essentially useless for the purposes of financial planning.

In 2012 wholesale funding decreased by 76 billion Euro, whereas retail deposits and debentures increased by 58 billion Euro.

In 2012 Banca IFIS continued to access secured lines for the entire year, relying on a significant and growing number of Italian government bonds, accepted as collateral by other international banks, or, as a last resort, on the Eurosystem, thanks to the loans always granted by the ECB.

In January 2012 the Bank increased its portfolio of assets eligible for refinancing operations with the Eurosystem by issuing and repurchasing 138 million Euro of bonds that the Italian Government had guaranteed for a three-year period and 69 million Euro of bonds the Government had guaranteed for a five-year period, paying 1,03% in fees.

In February 2012 the Bank participated in the second three-year LTRO, borrowing 500 million Euro at a 0,75% rate (ECB rate) repayable from March 2013.

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

 

Gruppo Banca IFIS
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