28 March, Il Secolo XIX
The Carige Board of Directors has approved the business plan for the transfer of bad loans (NPLs) and the unlikely to pay (UTPs) for the 2018-2020 period.
The bank will dispose of up to 1 billion of bad loans and over 500 million UTP in 2018, and other 200 by 2019. The objective is to drop to 2,1 billion of non-performing exposures by 2020.
The NPE strategy will determine the main actions to reduce the bad loans in the next two years. “Within the portfolio of total bad loans valued approximately 1.7 billion, we’ll select an amount equal to 1 billion to transfer with Gacs securitisation”. The start of the operations is expected by the second quarter of 2018 while the accounting and regulatory deconsolidation will be completed by the end of the year.
Regarding the whole UTP portfolio amounting to 3 billion, the bank plans to transfer holdings for 500 million in 2018 and 200 million in 2019. As a result, the bank expects to “accelerate the reduction of the total stock by 56% by the end of 2017, in addition to the 34.5% reduction accomplished in 2017”, with the objective of “achieving by 2020 an amount of impaired debt equal to 2.1 billion”. Namely, far better than the Srep target (4.6 billion by 2018 and 3.7 billion by 2019).
No conditions for bonds
While the Carige subordinate 300-million-bond won’t be issued for the moment. The board of Directors has acknowledged that “there aren’t the market conditions to issue a subordinate loan with the expected characteristics”, reads a memo from the bank.
The bond has a duration of 10 years and was announced by the Cep Paolo Fiorentino last February. The roadshow was launched in March for the presentation to the institutional investors. After having tested the ground, Carige realized that this is not the right moment and postponed the operation. The new date has not been disclosed, but the issuance should have been only postponed.
Source: Il Secolo XIX
Translator: Cristina Ambrosi