How and why Banca Ifis rants against Amco del Tesoro
According to Luciano Colombini, CEO of Banca Ifis, Amco risks distorting the non-performing loan market. Here is the change in recent years of the Asset Management Company specialized in the management of non-performing loans 100% owned by the Ministry of Economy and Finance, the way it operates, the leading role it has assumed in the NPL market, advantages it brings to the system and the problems it causes to other operators active in the purchase of non-performing loans.
For the CEO of Banca Ifis, Luciano Colombini, on the one hand Amco is positive for the bailout of the banks, but on the other it risks distorting the prices of the NPL market with its offers. In recent years, the Asset Management Company specialized in the management of non-performing loans has gone from purchasing only bad loans from banks in difficulty, to acquiring bad loans even from healthy credit institutions, taking on an increasingly important role in the business of Non-performing loans. But in a market where competition increases, prices rise and consequently margins are reduced, competition from a publicly held entity (Amco is 100% controlled by the Ministry of Economy) can represent a problem for other active operators. in the purchase of Npl. Colombini then 'attacked' Amco citing its intervention in a tender for the non-performing loans of the French Crédit Agricole .
AMCO RISKS TO FAKE THE NPL MARKET
Amco risks distorting the NPL market. This is the warning that comes from the statements reported by Radiocor of Luciano Colombini, CEO of Banca Ifis, during the hearing on Tuesday 24 November before the Commission of Inquiry on Banks. “Amco is a hybrid between an intervention by the legislator and a price that is formed on the market. If from the point of view of rescuing the banks I am in favor of the fact that there is a public entity ", in the field of NPLs it risks distorting prices with its offers, says Colombini, specifying that" today we witness the fact that when Amco all the others disappear because there is an absolutely unjustified 20% more price ”.
WHO IS AMCO
Amco is the Asset Management Company specializing in the management of impaired loans 100% owned by the Ministry of Economy and Finance. In a few years from a small player it has become one of the driving forces in Italy in the NPL market, a sector characterized by 330 billion euros of impaired loans to be recovered. Amco presents 34 billion euros of pro-forma assets under management including the Mps transaction.
THE HISTORY OF AMCO AND THE DEALS OF THE LAST YEARS
Amco, which began its activity in 1996 in relation to the bailout of Banco di Napoli, in 2018 ends up in the spotlight with the acquisition of 18 billion of impaired loans from Veneto Banca and Banca Popolare di Vicenza. In 2019 it continues with the purchase of bad loans from Banca del Fucino, Credito Sportivo and Banca Carige. In 2020, the Asset Management Company takes another big step forward with the absorption of approximately 7.5 billion euros of impaired loans from Banca Monte dei Paschi di Siena. Added to this are the purchase of a portfolio with a gross book value of approximately 2 billion euros from Banca Popolare di Bari , a package of impaired loans with a gross book value of approximately 270 million euros from Credito Valtellinese (which follows 'operation involving 177 million euros of non-performing loans carried out again with Creval in 2020), and the acquisition of a portfolio with a gross book value of over 600 million euros from Banco Bpm .
THE CHANGE OF AMCO AND HOW IT WORKS TODAY
In recent years, Amco has not only grown in size, but has moved from purchasing only non-performing loans from banks in difficulty, to acquiring bad loans even from healthy credit institutions. As Reuters pointed out in a recent article, the presence of the Ministry of Economy and Finance in the capital of the Asset Management Company allows the latter to accept lower returns than private investors, in order to be able to bid higher for the purchase of bad loans. Reuters recalled the statements by Giuseppe De Martino, MeF's senior adviser on banking issues, according to which "Amco's strength is a patient shareholder who does not want double-digit returns in a short period". De Martino said that “the shareholder is willing to accept a reasonable return and this allows Amco to reconcile profit objectives, again in the context of market logic, with the public interest and we believe this is an important role. This business model, given the nature of the shareholder, must not be seen as such as to displace private operators but as complementary ".
Regarding Banco Bpm's non-performing loan disposals, Reuters reported that two 'suitors' refrained from bidding on the Bank's portfolio as they had no hope of beating Amco's proposal and did not want to spend among 2 and 4 million euros to analyze the loans. The Asset Management Company has always rejected all criticisms, recalling that a subject supervised by the Court of Auditors cannot fail to operate at market prices.
COLOMBINI CRITICAL AID TO NON-DOMESTIC BANKS
The CEO of Banca Ifis, Luciano Colombini, also during the hearing before the Commission of Inquiry on Banks, then focused on the question of possible aid to non-domestic credit institutions. The CEO cited Amco's intervention in a tender for Crédit Agricole's non-performing loans "which does not seem to me a person who needs help, he is not Italian, so an advantage in favor of a French bank ". The observation was made considering the large number of operators interested in the NPL market, the large mass of non-performing loans present in the system at a European level and the fact that the Covid pandemic could significantly increase the amount of non-performing loans to be handle. The hearing of the Chief Executive Officer of the Prelios Group, Riccardo Serrini, will be held on 1 December at the Commission of Inquiry on Banks.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/banca-ifis-sbraita-contro-amco-del-tesoro-sugli-npl/ on Mon, 30 Nov 2020 08:17:27 +0000.