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npl-reo Market News: Spanish Real Estate Intelligence

Mps awaiting EU decision on a possible NPL spin-off
09 October, Il Sole 24 Ore The Italian Ministry of Treasury is currently exploring the possibility of a spin-off of Mps NPLs for 10-14 billion euro. The decision from the EU is expected before the end of the year, when the Italian Government will have to communicate how it will dispose of 70% of the Mps capital by 2021. According to the EU advisor Oliver Wyman, the operation, if carried out at book values as suggested by the Italian Ministry instead of market values, will have an impact on competition. Another possibility would be the spin-off of just 70%-80% of the whole NPL and UTP stock, bringing the Mps Npe ratio at 5%. Such a reduction would make the bank more attractive for investors, facilitating the exit of the Government from the capital by 2021. Source: Il Sole 24 Ore Translator: Cristina Ambrosi
UniCredit might double the amount of UTPs to sell. DoValue and Dea Capital are the favourite candidates
08 October, Finanza Report UniCredit is close to finalizing the transfer of a UTP portfolio for the value of 1 billion euro, which might increase up to 2 billion euro. Among the bidders, there are DoValue, Credito Fondiario, Dea Capital, Prelios, Intrum, and several international investors. According to the rumours, DoValue and Dea Capital are the favourite in the competition. Source: Finanza Report Translator: Cristina Ambrosi
Banca Ifis: NPL market at risk of a bubble
07 October, Il Sole 24 Ore In the past few years, banks have sold a considerable amount of NPLs (over 100 billion), although servicers may sometimes lack the adequate means to manage these credits. As Banca Ifis reports, the seven biggest servicers in Italy saw their workload increased by 73% between 2016 and 2018, although the personnel grew only by 21%. This has lead servicers on automatizing and standardizing their processes and funds to re-sell their NPL portfolios to improve their financial results. The root cause is in the due diligence of portfolios. When a bank sells an NPL portfolio, the fund interested in buying it has a servicer assessing the portfolio. This might result in a conflict of interest, as the servicer may be tempted in granting excellent performances just to obtain the management of the portfolio. As Banca Ifis reports, many NPL transactions had been closed at uncompetitive prices, like 19% or 28% of the portfolio nominal value, and some funds might have sold some part of their NPL portfolios to improve their returns, namely trading NPLs. This resulted in the creation of a secondary market, where NPL portfolios are being sold not by banks, but by funds. Banca Ifis estimates that the NPL secondary market will grow by 39% in 2019. Source: Il Sole 24 Ore Translator: Cristina Ambrosi