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4-Traders Homepage  >  Equities  >  Italian Stock Exchange  >  Intesa Sanpaolo    ISP   IT0000072618

INTESA SANPAOLO (ISP)
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Italy Payment Woes Fuel Factoring Boom For Intesa Sanpaolo, Other Banks

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04/26/2012 | 05:51pm CEST

Lengthy payment delays across the Italian economy have turned some of the country's banks into global factoring powerhouses willing to finance companies' receivables.

Intesa Sanpaolo SpA's (>> Intesa Sanpaolo SpA) Mediofactoring division is the biggest business in its sector in Europe, and the fourth largest in the world with a 2.5% share of the global market, according to 2011 rankings published Thursday by Factors Chain International, a trade body.

Chinese giants such as Industrial & Commercial Bank of China Ltd. (1398.HK) and Bank of China Ltd. (3988.HK) are the world leaders, with a combined 7.8% market share.

Unicredit SpA's (>> UniCredit SpA) factoring unit is in the top league with a 1.2% market share, while Ifitalia, a longtime division of Banca Nazionale del Lavoro SpA, which is now owned by BNP Paribas SA (>> BNP PARIBAS), has a 1.3% market share, according to the ranking.

Factoring is a financial transaction in which a business can sell its unpaid invoices--known in accounting jargon as receivables--to a third party at a discount.

The use of such an industry is larger where payment is slower. Italy's payment times are notoriously slow, with even the public administration behind on as much as EUR100 billion in commercial debt to suppliers. Large companies in the country are also among the slowest payers in Europe, a situation that has been exacerbated by tight credit conditions in the euro zone's third-largest economy.

Multinationals are big users of factoring in Italy, where many can't wait the 180 days it takes on average to be paid for a public-sector commission, compared with 30 in Germany. Average time of payment by local health authorities in Italy rose to 262 days last year, according to Prometeia, an economics research institute.

Under U.S. GAAP rules, companies must discount on their balance sheet any credit that hasn't been paid within 30 days. Companies may raise their prices in countries if they know they'll have to sell their invoices at a discount in order to be paid in a timely manner.

Factoring is also a useful service for all companies working across international borders, as smaller Italian firms are increasingly driven to do.

Intesa Sanpaolo's Mediofactoring has boosted its market share in Italy to 30% in 2011 from 22% in 2007. Its volume of deals grew 47% last year to EUR49.6 billion, the bank said. The division's profit rose 18.5% to EUR68 million in 2011.

It plans to open a branch in New York this year after opening branches in Spain and Germany last year, its managing director, Rony Hamaui, said.

-By Christopher Emsden, Dow Jones Newswires; +39 06 6976 6921; [email protected]

Stocks mentioned in the article : Intesa Sanpaolo SpA, BNP PARIBAS, UniCredit SpA
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF CHINA LTD -0.77% 3.88 End-of-day quote.-3.02%
BNP PARIBAS 1.74% 62.7 Real-time Quote.-1.00%
INDUSTRIAL AND COMMERCIAL BANK OF CHINA -1.00% 5.97 End-of-day quote.-2.42%
INTESA SANPAOLO 0.68% 2.799 End-of-day quote.11.91%
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Financials (€)
Sales 2018 18 388 M
EBIT 2018 8 485 M
Net income 2018 4 135 M
Debt 2018 -
Yield 2018 7,43%
P/E ratio 2018 11,58
P/E ratio 2019 10,30
Capi. / Sales 2018 2,56x
Capi. / Sales 2019 2,49x
Capitalization 47 116 M
Chart INTESA SANPAOLO
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Intesa Sanpaolo Technical Analysis Chart | ISP | IT0000072618 | 4-Traders
Technical analysis trends INTESA SANPAOLO
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TrendsBearishNeutralNeutral
Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 3,52 €
Spread / Average Target 26%
EPS Revisions
Managers
NameTitle
Carlo Messina MD, Chief Executive Officer & Director
Gian Maria Gros-Pietro Chairman
Rosario Giacomo Strano Chief Operating Officer
Stefano del Punta Chief Financial Officer
Massimo Proverbio Chief Information Technology & Digital Officer
Sector and Competitors
1st jan.Capitalization (M$)
INTESA SANPAOLO11.91%59 507
JP MORGAN CHASE & COMPANY4.87%378 373
INDUSTRIAL AND COMMERCIAL BANK OF CHINA-2.42%329 553
BANK OF AMERICA3.49%306 817
CHINA CONSTRUCTION BANK CORPORATION-0.39%277 275
WELLS FARGO-10.10%261 673