The role of Consumer Finance

We have always worked alongside Italian families to meet their financial needs. Our group has been active in consumer credit for more than 70 years through Compass Banca. With a 10% market share, it has been one of the top five consumer credit players in the Italian market for over a decade.

With an in-depth understanding of the market, gained through years of operating and gathering statistics, Compass Banca can identify, evaluate and best serve its customers. New available and widely used technologies have enabled Compass Banca to complete its offer with innovative products to benefit from new market growth trends.  

Consumer Finance is fundamental to the balance and diversification of our businesses. Its distinct anti-cyclical performance compared to the other divisions, which are more vulnerable to economic trends, has enabled Consumer Finance,  as well as the Mediobanca group, to grow even in times of economic crisis. Thanks to Compass Banca’s record-breaking results, Consumer Finance is now our largest and most profitable division and the top contributor to the group’s revenue, interest income and profitability.

Highlights (annual consolidated results at 30 June 2022)

Compass combines solidity and reliability with a strong penchant and talent for innovation. The long-term ramifications of every strategic choice are assessed considering the sustainability of results over time, profitability and the creation of value for the Mediobanca group.
Compass is known for its:

• leadership (thard-largest market player with a share of roughly 10%);
• consolidated customer base;
• broad, diversified distribution platform that increasingly prioritizes direct distribution channels;
• management approach focused exclusively on value;
• high scoring and pricing capabilities;
• excellent asset quality (net non-performing loans and net bad exposures respectively account for 1.3% and 0.1% of lending at 30 June 2022) thanks to the complete coverage of non-performing loans within 12 months;
• effective recovery processes that actively contain the cost of risk.

Compass reported record-breaking results from 2016 to 2019. Revenue exceeded €1 billion and the ROAC rose from 17% to 30% between 2016 and 2019.

In FY20/21, in a difficult market scenario, in which the consumer credit sector has been strongly impacted by the pandemic emergency, with volumes and revenues dropping as a result of the repeated lockdowns, Compass has confirmed its position as a primary operator, with a top line in excess of €1bn and excellent profitability (ROAC 27%), on the back of its extensive franchise and established capabilities in risk assessment.

In FY22 Compass has achieved record results with a net profit of €370mln and a profitability (ROAC) of 33%, driven by a strong commercial activity (new loans up to €7,7bn, the highest level ever reached by Compass).