SMEs: SMEs are adequately diversified by size and geography, with a +0,4% increase in 2015. The creditworthiness of this type of businesses is related to their revenues (+3% compared to 2014) and, despite the modest economic recovery, over 50% of SMEs are considered creditworthy, showing also shorter payment times.
BREAKDOWN OF SMEs BY CREDITWORTHINESS
GEOGRAPHICAL DISTRIBUTION OF SMEs
Factoring: Factoring turnover accounts for over 11% of GDP; in 2016, the product's growth rate has gradually increased compared to 2015, as volumes continued rising in the fourth quarter of last year—and the trend is expected to continue into 2017.
2016 COMPETITOR SCENARIO - Billions of €
Leasing: In 2016, there was an acceleration in the growth trend that began in 2014, especially concerning light commercial vehicles and industrial ones. Leasing is forecast to continue growing in 2017, as businesses must keep on upgrading their equipment—and also because of government-backed incentive schemes for SMEs, which account for 75% of leasing volumes.
TRANSPORTATION LEASING (Volumes Dec. YTD)
EQUIPMENT LEASING (Volumes Dec. YTD)
Structured Finance: Activity in the Italian M&A market remained brisk also in 2016, with 1.204 deals totalling 80 billion Euro. This trend was especially apparent in the Mid Size segment, where volumes were up +29,5% compared to the prior year. The financial sector saw the most number of deals, followed by construction. As for leveraged finance, in 2016 private equity funds made at least 125 investments in either Italian companies, directly or through firms in their portfolio, or businesses based abroad through Italian firms. All this resulted in an expenditure of more than 7 billion Euro. Most deals referred to SMEs. Approximately thirty of them involved companies with more than 100 million Euro in sales, and just ten concerned firms with more than 500 million Euro in revenues.
Short-term financing: short-term lending to businesses and professionals fell 5% from the end of 2014 in terms of loans approved and nearly 10% in terms of drawdowns. The decline in short-term loans was concentrated in current account overdraft facilities. The breakdown by amount shows a positive trend only in minor loans.
Pharma and Pharmacies: In the pharmaceutical industry, the payment of arrears owed by the Italian National Health Service to its suppliers is still a critical issue for Italy's public finances. At December 2016, there was more than 2,5 billion Euro in outstanding debt, concentrated mainly in Tuscany, Piedmont, Calabria, and Apulia. As for pharmacies, their number (currently 18.200) is expected to rise by approximately 2.500 as a result of the “Grow-Italy” decree. Prescription drugs account for 60% of pharmacies’ turnover, while the remaining 40% is represented by over-the-counter products; parapharmaceuticals; cosmetics and personal care products; and dietary supplements.
HOUSEHOLD PHARMACEUTICAL AND PRIVATE HEALTHCARE SPENDING*
TURNOVER OF PHARMACIES
Non-Performing Loans: NPLs referring to non-financial corporations remain steadily above 140 billion Euro, and also NPLs to producer households are stable at slightly below 16 billion Euro. NPLs have been rising as a proportion of loans, and are especially prevalent in the retail segment. As for the legal framework, the Italian government introduced a guarantee scheme for bad loan securitisations and reformed the NPL resolution process.
GROSS NON-PERFORMING LOANS
Tax receivables: In the first nine months of 2016, 10 thousand companies filed for bankruptcy. Insolvency proceedings are still at historically high levels, but were down 6% from the prior-year period—when they had declined 3,8% compared to the first nine months of 2014. Non-bankruptcy workouts continued falling: they numbered 1,3 thousand between January and September 2016, down 32% year-over-year.
Funding: the trend in household and corporate deposits remains positive. Households are especially interested in time deposits, while businesses are increasingly setting aside funds for investments.