In 2020, the ICF Group provided 3,781 freelancers, businesses and organisations with €1.33 billion in funding. In a year shaped by the crisis triggered by the Covid-19 pandemic, the ICF confirmed its key role as a public bank by diversifying and adding to other financing sources while driving new lending facilities to support the business community. €1.05 billion of this funding was arranged through the Institut Català de Finances (ICF) and €282.9 million via Avalis de Catalunya.
The financing awarded by the ICF Group in 2020 helped to maintain and/or create close to 123,500 jobs. As in previous years, 97% of the loans went to the self-employed and SMEs.
The public financial institution’s CEO, Víctor Guardiola, said at an online press conference that “the 2020 balance sheet can only be grasped if you bear in mind the background of the global economic crisis brought about by Covid-19, which has shown the countercyclical role of public banking and its ability to cater for the business community’s direct liquidity needs.”
“In 2020, we targeted two strategic objectives: meeting the liquidity needs of businesses and safeguarding jobs,” he added. “To do this, we doubled the number of businesses funded and also the total volume of financing awarded, and this has helped to safeguard 61% more jobs.”
Almost 70% of the funding was allocated to addressing the economic impact of Covid-19
Ever since the onset of the recession, with the backing of the Catalan Government the ICF and Avalis de Catalunya have set up numerous funding solutions for businesses battered by the health crisis. Indeed, most operations in 2020 were designed to support businesses disrupted by Covid-19. Out of the total volume of funding, €909.2 million was earmarked to address the Covid-19 crisis, accounting for 68.4% of the total. As for the number of businesses, 3,013 or almost 80% were financed via Covid-19 solutions. These operations involved awarding new credit facilities and guarantees and restructuring transactions to make the repayment schedule of existing loans more flexible.
By sectors, one third of the ICF Group’s financing went to trade, tourism and transport (32%), three of the industries hardest hit by the crisis. Manufacturing (28%), service companies and organisations (13%), the cultural sector (7%) and the construction industry and public works (6%) were some of the other main funding beneficiaries. In terms of regional distribution, it was ensured that funding solutions reached the entire Catalan production system by stepping up the number of transactions and also the total amount of loans arranged in all geographical areas.
Fifty venture capital funds
Notwithstanding the pandemic, the ICF has maintained a robust volume of investment in venture capital funds from other fund managers and additionally in direct investment through the ICF Capital and IFEM Innovació funds.
Specifically, in 2020 it committed €33.5 million in venture capital funds, mainly in the health sciences and the digital, technology and innovation industries. In terms of segments, development stage venture capital fund commitments stand out at €25.2 million, accounting for more than 75% of the total committed.
The ICF currently has a stake in 50 venture capital funds and investment commitments coming to €329.5 million. “We are an investment driver in venture capital,” said Guardiola. “For every euro we invest, other investors chip in €11.20.” This means that besides the funding committed by the ICF, there is another €3.37 billion from other investors, bringing total investment capacity to €3.7 billion.
As for direct investment, €5.3 million was invested through the funds managed by ICF Capital. €4.9 million of this went to new transactions undertaken with five Catalan businesses with high growth potential.
The ICF’s CEO pointed out that the Covid-19 crisis has had “a major impact” on the entrepreneurial ecosystem. “At the outbreak of the pandemic, the ICF put in place a number of support measures to shore up the businesses and start-ups we have invested in. They include, for example, deferring payments and restructuring over twenty transactions to tailor repayment schedules to the current circumstances.”
In addition to this assistance, in 2020 IFEM Innovació’s co-investment facility funnelled almost €2 million to 10 new start-ups, mainly in the ICT/Ecommerce industry. Together with the €5.2 million from other investors, this adds up to an investment capacity standing at over €7 million.
Financial indicators: Balance sheet and results
The ICF closed the 2020 financial year with net income of €5.4 million, after following a prudent risk classification policy in view of the uncertainty of the current economic climate and allocating €10.4 million to extraordinary provisions to deal with the impact of Covid-19 on the worst hit sectors. The profit, which will be wholly allocated to reserves, consolidates a 10-year cycle of positive results.
In terms of the other financial indicators, the ICF has a solvency ratio of 43.8% and an NPL coverage ratio of 130.9%, both well above the minimum required by credit institution regulations and the industry average. The NPL ratio was 6.2%, in line with last year’s closing figure.
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