Intesa Sanpaolo, Unicredit, Mps and more. What happens on Npls
Npl Dossier: the European band bank project, system numbers, analysts' comments and the moves of Intesa Sanpaolo, Unicredit, Mps and more. The article by Emanuela Rossi
Intesa Sanpaolo, Unicredit, Mps and more. What happens on NPLs? Here are numbers, comments, analyzes and scenarios.
Non-performing loans continue to decline but the serious economic problems linked to the Covid-19 pandemic certainly do not bode well for the future. According to the latest ABI monthly Bulletin, in particular, in August non-performing loans fell to 24.45 billion (over 64 billion less from the peak of November 2015), touching the lowest level since September 2009. Just one year earlier , as of August 2019, they stood at 32.3 billion. These numbers, among other things, do not take into consideration the sale of 8.1 billion of impaired loans from Montepaschi (MPS) to Amco, which became official only a few days ago.
THE EUROPEAN BAD BANK
The hypothesis formulated by the European Central Bank of creating an EU bad bank hovers over everything in order to bring together the Npls of the euro area institutions. According to the indiscretions reported by the Financial Times , the concerns of Frankfurt concern precisely the toxic assets created with the various lockdowns decided by national governments in the Old Continent. However, non-performing loans linked to previous crises would also flow into the European bad bank.
THE LATEST MOVES OF UNICREDIT
According to MF-Milano Finanza, between the end of the year and the beginning of 2021, the rating agencies should express their opinion on a securitization of impaired loans. The package would have a value of approximately 1.8-1.9 billion – the amount initially assumed was 2.5 billion – and would concern leased loans, not involved in securitization transactions until now. Piazza Gae Aulenti would thus continue its derisking action and would be assisted in the securitization by the servicer DoValue. It should be remembered that in 2017 it had sold a stock of over 17 billion to Fortress and Pimco through a securitization with a public guarantee.
More recently, the institute led by Jean Pierre Mustier sold to Illimity a portfolio of non-performing loans deriving from mortgage credit agreements with customers of the Italian small and medium-sized business segment. As explained in a note from Unicredit, the portfolio “includes exclusively loans deriving from loan agreements governed by Italian law with a total credit line gross of value adjustments of approximately 692 million”. The impact of the sale was recognized in the third quarter 2020 financial statements.
THE LOSS OF MONTEPASCHI
The signing of the provision dates back to just over a week ago, which according to Il Sole 24 Ore was already ready at the beginning of September and which in recent days had completed the technical steps to the Ministry of Economic Development, with which Palazzo Chigi authorized the split of the 8.1 billion of impaired loans from Montepaschi to Amco , the former sga, and paved the way for the Treasury to exit the shareholder structure which must take place by mid-2022. The financial transaction had already been defined by Rocca Salimbeni and had received the go-ahead with an almost unanimous vote (99.97% of the share capital) from the last meeting.
At the end of this operation, the Radiocor agency notes, Montepaschi will reduce its share capital by over 1.3 billion but will increase its efficiency by reducing NPEs and improving capital ratios, such as the fully loaded Cet1, under which the ECB measures the soundness of credit institutions.
INTESA SANPAOLO'S SECURITY OPERATIONS
On the NPL side, Intesa Sanpaolo has given a lot to do, which as of June 30 last year could boast a stock of gross impaired loans which fell to 29.9 billion from 30.2 billion at the end of March, with an NPE ratio of 7.1%, in in line with that of three months earlier. So, counting in hand, at the end of June 2020 Intesa Sanpaolo has already achieved 90% of the reduction target set out in the Business Plan valid for the four-year period 2018-2021.
THE GENERAL SCENARIO IN ITALY
The future scenario on the subject as regards the Italian banking system was discussed during the Npl Meeting of Banca Ifis which took place in Cernobbio on 30 September last . The forecast is that the credit deterioration rate will rise from 1.3% in 2020 to 2.8% in 2021 due to the current year's economic contraction. According to the report produced by the Banca Ifis Research Department, NPL transactions (unsecured portfolios) will constitute the largest share of sales, reaching 31% of the total. In the two-year period 2020-2021, the UTP transactions market will also be consolidated, i.e. the Unlikely to Pay transactions, with total disposals of 27 billion.
On the side, and not too much, there is the growth of the servicing sector with + 23% of revenues since 2013. It should be noted that 44% of the total stock of NPLs in our country is managed by only six servicers: DoValue (13%), Amco (9%), Prelios (7%), Cerved (7%), Banca Ifis (5%) and Credito Fondiario (3%).
Enrica Landolfi, for HSBC responsible in Europe for the origination of Abs – structured bonds often the result of securitisations linked to Npls – also expressed herself on the subject, in an interview on Affari & Finanza di Repubblica , which presents a very clear account: " I believe that the flow of new NPLs will vary between countries between 30 billion "of nominal value" of Greece and 100 billion of France "with the latter which, according to him, will be the" trailblazer ".
Therefore, if at the beginning of the year the stock of NPL was around 600 billion in the next 18-24 months, Landolfi believes that “another 300 will be added”. Estimates, however, that “start from some assumptions, in terms of unemployment and loss of gross domestic product, which could be largely mitigated by external interventions, starting with the Recovery fund”.
With regard to the hypothesis of a European bad bank, the HSBC analyst points out that "it is not yet fully understood what the plan they have in mind and the monetary authorities or what model will impose itself, if they operate like any other market player or if instead they will intervene with public money only for banks in crisis, as in other countries ”. As regards Italy, however, he stresses that "the banking system has made many steps forward, with a rather accentuated process of disposing of bad debts". If anything, he notes, “in our case it plays against the slowness of the administrative machinery with a slower justice in the recovery of guarantees. On the other aspects, however, the mixed public-private model can be a good example, even at the European level ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/numeri-e-business-degli-npl/ on Tue, 27 Oct 2020 06:15:43 +0000.