Here are the events that should be considered when comparing the results to previous periods:
- Acquisition of the former GE Capital Interbanca Group: on 30 November 2016, after obtaining the authorisations of the competent Supervisory Authorities, Banca IFIS acquired 99,99% of the former GE Capital Interbanca S.p.A. Following the acquisition, in accordance with IASs/IFRSs, Banca IFIS conducted a Purchase Price Allocation, which consists in allocating the cost of the business combination, recognising the assets acquired, liabilities assumed, and contingent liabilities at their fair values at the acquisition date. This process resulted in a 623,6 million Euro gain on bargain purchase, which was recognised in profit or loss under other operating income. The details of the transaction are presented in part G of the Notes to the Consolidated Financial Statements.
Following the acquisition of the former GE Capital Interbanca Group, Banca IFIS has identified the new Corporate Banking and Leasing sectors. For more details, see Contribution of business segments in this Directors’ Report.
- Rebalancing of the government bond portfolio: in April 2015, the Bank rebalanced part of the Italian government bond portfolio, which resulted in a 124,5 million Euro gain on the sale of available for sale financial assets in the first half of 2015.
- Presentation of the data in the Directors’ Report: in light of the mentioned significant events, and to make the 2016 and 2015 results more comparable, the Group financial and income results include a comparison of 2016 with the prior year excluding all effects attributable to the acquisition of the former GE Capital Interbanca Group (the data are presented in a column named “normalised”), as if the business combination never took place. In addition, the section “Normalised Highlights” shows the 2016 highlights normalised for the mentioned acquisition, comparing them with the results for the year 2015 excluding the effect of the gain on the sale of government bonds.
- New model to estimate the cash flows of the acquired receivables due from Italy's NHS: during 2016, the Bank implemented a new model to estimate the cash flows of the acquired receivables due from Italy's National Health Service. Specifically, the Bank estimates the interest on arrears considered recoverable from the acquisition date based on historical evidence. Banca IFIS estimates cash flows in accordance with the provisions of the joint Bank of Italy/Consob/Ivass document no.7 of 09 November 2016 “Accounting of interest on arrears as per Italian Legislative Decree 231/2002 on performing loans purchased outright”. The change in estimated cash flows, discounted using the original IRR of the positions, resulted in a 15,8 million Euro change in amortised cost recognised in profit or loss under interest income.