#SavetheDate NPL Meeting 2019

Savethedate on September 26th I am going to present a workshop at Banca IFIS‘ NPL Meeting

The NPL Meeting workshops represent a unique opportunity to analyze the dynamics of the NPL world and to discuss what the future of deteriorated credit will hold for us.

Workshops will take place in two highly prestigious locations on Venice Lido: the Excelsior Hotel and the Palazzo del Cinema. A clear and well-defined format: September 26 will be entirely dedicated to workshops, moments of reflection lasting an hour and distributed across three time slots. Between one time slot and another, participants will have 15 minutes to move between the two hosting structures, which are adjacent to one other.

The topic I am going to cover is

The workshop will take place in 2 time slots 2:30 PM – 3:30 PM and 5:00 PM – 6:00

In order to attend the workshop you need to register to the main event at this link 

Then you will be allowed to access the workshop page where you can book by clicking on the appropriate button as showed below.



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Posted in Events, Italian Banks, NPL e Distressed Assets | Tagged , , , | Leave a comment

A Short reminder for next Government

Italian Politics these days looks quite difficult to understand (but I tried to offer a naïve model to read it in this post) and it is hard to say even why the crisis has started and which colors will have the next Government.

A very short and useful explanation has been provided by a friend of mine, professor Sandro Brusco of Stony Brook University :

(…) The bottom line: Italy had a long period of government instability mainly because of its proportional system. The system was (partially) changed in 1994 but it never was entirely majoritarian. After a number of reforms and pronouncement from the Supreme Court the system went back to being essentially proportional in the last election. Thus, in terms of government duration, we are back to the period 1948-1994, the proportional period, in which governments lasted between 12 and 18 months. This government was installed in June 2018, so it basically reached maturity. From that point of view, things are actually quite boring. (…)

Read the full post

Rather than looking pointless explanation of present, it is much easier to foresee behavior of upcoming government: it will make a deal with EU trading 1) additional budget flexibility for 2) commitment to make future reforms.

Why such a deal? Because it will lower present burden on taxpayers, it will reduce the bad taste of poisoned pill budget law and given the potential risks arising from US-China trade war and global recession, EU will be happy to pretend to believe that someday reforms will come.

If near future is written and present politics conundrum is pointless to explain what else can be said?

Below 3 short reminders for government to come:

  1. Italy’s problem 1 is demography and current pension system is unsustainable – excess burden on young people provides an incentive for those with best education and the strongest risk appetite to leave the country worsening the situation       
  2. Italy’s problem 2 is competitiveness – open new business and keep existing ones alive is more difficult days after day and so many actual and potential entrepreneurs start thinking tha change country is easier than wait that this country changes   
  3. Italy’s problem 3 is growth – the more the country grows old and becomes less competitive the less likely it will show a significant economic growth – a wide interference of state in economy and a dysfunctional welfare system are additional ingredients for long lasting stagnation

Has anyone heard about these problems in politicians’ words or on main Italian newspapers? Not really, with some remarkable exceptions.

Bottom line 3 short suggestions for next government could be

  1. Try to shift part of current burden from young ones to old ones
  2. Try support policies that enhances competitiveness of the country (es Shift burden from less risk adverse people to those who are more risk adverse)
  3. Try to focus more on how to enlarge the pie of potential wealth rather than how to divide the existing one

Post Scriptum

Why send a letter in English to Italian Government? Maybe the true recipient of the letter is not the Government.

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Posted in Italian Politics, Unconvenient Ideas | Tagged , , , , , | Leave a comment

Is servicing still the main Challenge of NPE Market?

Unlikely To Pay (UTP) exposures seem to be the hotspot of italian NPE market with upcoming deals worth more than 20Bn of Gross Book Value

Intesa Sanpaolo has recently reached a binding agreement with Prelios to form a strategic partnership in respect of loans classified as unlikely to pay (UTP).

The agreement consists of a 10-year contract for the servicing of UTP Corporate and SME loans of the Intesa Sanpaolo Group to be provided by Prelios initially covering a portfolio worth around €6.7 billion of gross book value, and the disposal and securitisation of a portfolio of UTP Corporate and SME loans of the Intesa Sanpaolo Group worth around €3 billion of gross book value, at a price of around €2 billion which is in line with the carrying value.

SGA, the credit management firm fully owned by Italian Ministry of Economics and Finance, is about to launch the Covee project an investment fund focused on real estate backed UTPs that will involve banks like BancoBpm, Mps, Ubi Banca, and Carige and will be run in partnership with Prelios.

As far as we know, the banks will basically trade the ownership of UTPs with shares of the fund and, since none of them will have the majority of the shares, they will be able to offload the NPEs from balance sheets.

New GACs scheme as explained by KPMG and PWC recent reports, is likely to be a relevant driver for a new wave of NPL deals in future months as the tack record of this tool points out. After GACS introduction, 21 transactions were completed between 2016 and 2019 for a total GBV of € 62.1 bn; 9 deals on total number of transactions had a deal size ranging from € 1 to 5bn. Around 60% of securitized loans are backed by mortgages on real estates properties.

Source: GACS tool in the Italian Non-Performing Loans space

Main differences between “old” and “new” Gacs scheme have been summarized in PWC report

Finally we can consider that securitization schemes with the support of GACs for NPL and a large use of outsourcing for UTPs (with some “share the risk to derecognize” framework to come) are quite addressing the NPE reduction problem of Italian banks.

Once claims have been transferred to SPV the challenge remains to properly manage them in order to collect money in line with committed business plan and this will be the focus of following posts (hopefully after August).

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Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

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GLG – Gerson Lehrman Group – Council Member



Posted in Entering Italian NPL Market, Italian Banks, NPL e Distressed Assets | Tagged , , , , | Leave a comment

NPL in the EU are declining (but Watch out for GACS)

According to the latest press release, efforts to reduce risks in the EU banking sector are bearing fruit, as in its fourth progress report on the reduction of non-performing loans (NPLs), the Commission confirms that NPL levels are continuing their downward trajectory towards pre-crisis levels.

The ratio of NPLs in EU banks has come down by more than half since 2014, declining to 3.3% in the third quarter of 2018 and down by 1.1 percentage points year-on-year.

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Unionsaid: “Working out the remaining stocks of non-performing loans is part of our ongoing efforts to make the banking sector even stronger. Our banks are now better capitalised and better prepared to withstand economic shocks. We’ve recently agreed on more robust framework to regulate and supervise banks. Given this progress in reducing risks, I call on EU Finance Ministers to move forward with other measures to complete the Banking Union.”

As I happend to discuss at the recent Global ABS 2019 a substantial part of NPL transactions have been disposed using securitization schemes and expecially for the Italian ones involving GACS senior tranches are still on banks’ balance sheets.

This may mean that even though the general picture can look positive, some critical issues are still pending as I pointed out in this article in italian.

Do you like these updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

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Posted in Entering Italian NPL Market, NPL e Distressed Assets | Tagged , , , , | 1 Comment

#SaveTheDate IMN Global ABS 2019

The 23rd Annual Global ABS, will take place 11-13 June 2019, in Barcelona, Spain.

It will host to over 3,000 attendees, and a facilitator of thousands of 1:1 private investor and issuer meetings, making Global ABS a major catalyst for structured product deal flow in Europe.
 
A must- attend event, Global ABS is a platform that informs, engages and delivers a competitive edge for the entire European structured finance community.

Keynote Speakers will include CORNELIA HOLTHAUSEN Deputy Director General Market Operations – European Central Bank, EDWIN SCHOOLING LATTER Director of Markets & Wholesale Policy, Financial Conduct Authority VERENA ROSS Executive Director European Securities and Markets Authority and many others qualified experts

I am proud to be speaking in the panel on “Spotlight on Italian NPLs: GACS Review and NPL Progress to Date”

  • Impact of new GACS on Italian NPL market
  • UTP Multi-originator deal as alternative approach for deconsolidation
  • How Calendar provisioning and new regulatory changes may affect NPL market
  • How lack of economic growth may affect NPL market in Italy
  • Is political uncertainty scaring foreign investors?

Do you like these updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

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Posted in Events | 2 Comments

UTPs are the hotspot of Italian NPE Market


According Milano Finanza, some 18 Bn Unlikely To Pay exposures are going to be offloaded from banks’ balance sheets or assigned to outsourcers for credit management.

Monte dei Paschi di Siena, is said to be ready to sell 8Bn of UTPs to SGA, the bad bank owned by Italian Ministry of Economy and Finance. The deal is expected to be settled with a transfer price close to Net Book Value and is a relevant step in the broad restructuring process of what many say to be the World’s Oldest Bank. A successful turnaround process is essential for the sale of Italian Government share in the bank.

Source FY2018 and 4Q18 BMPS Preliminary Results

After a 2 months due diligence performed by Prelios on a 10 Bn UTP portfolio,
Intesa Sanpaolo is said to be negotiating an agreement for the sale of 4Bn pool with a transfer price of 50-55% and outsourcing assignment for the remaining 6 Bn.

I am going to talk about new model of Credit Management to deal with UTP exposures in my next seminar.

Do you like these updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

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GLG – Gerson Lehrman Group – Council Member

Posted in Entering Italian NPL Market, Italian Banks | Tagged , , , , | 1 Comment

Unsecured Debt Purchasing & Servicing – IDF, Milan 22nd May

Proud to be moderating the panel on Unsecured Debt Purchasing & Servicing at the next Italian Debt Forum NPL & Restructuring in Milan on May 22.

The event will take place at Four Points Sheraton Hotel Milano

Confirmed speakers include

Download the brochure

Register to the Event

Do you like these updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

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GLG – Gerson Lehrman Group – Council Member

Posted in Entering Italian NPL Market, Events | Tagged , , , , | Leave a comment