March 6, 2019 / 8:57 AM / 3 months ago

New Italian lender Illimity trims 2023 profit forecast

MILAN, March 6 (Reuters) - Italian challenger bank Illimity trimmed its 2023 profit forecast on Wednesday to take into account regulatory changes which will force it to increase provisions against loan losses.

The bank cited increased volatility on Italian government bonds since a Eurosceptic coalition came to power in June.

Illimity said it expects net profit of 280 million euros ($316.60 million) in 2023 compared with a 300 million euro target under a business plan announced in July.

However, it aims to reach a profit of 55-70 million euros in 2020, up from a previous target of 40-45 million euros. It will start paying a dividend from 2022.

Illimity specialises in managing bad loans and lending to small businesses, targeting higher-margin borrowers who are considered too risky by traditional banks. It was founded last year by veteran banker Corrado Passera and had former Barclays Chief Executive Bob Diamond as its main sponsor.

Illimity reported on Wednesday a net loss of 23.5 million euros for 2018 hit by extraordinary start-up costs as well as a decision to cut its government bond portfolio.

The bank confirmed its capital targets with a CET1 ratio of more than 15 percent throughout the plan period.

Shares in Illimity started trading on Monday on the Milan stock exchange. They rose 1 percent by 0815 GMT against a 0.1 percent increase in Italy’s banking index. ($1 = 0.8844 euros) (Reporting by Andrea Mandala, editing by Louise Heavens)

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