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Banco Bpm: seven competitors for the NPL portfolio

03 July, Il Sole 24 Ore

There are seven competitors for the Banco Bpm portfolio and platform. Banco Bpm is currently studying the transaction, of considerable dimensions, which will involve national and international investors and might go live during the summer. In fact, the offers are to be submitted by 10th July, hence next week. After that, Banco Bpm might take two-three weeks to screen and select the two final competitors.

Allegedly, Banco Bom is studying three possible options to dispose of bad loans. The solutions span from the sale of 3.5 billion, the amount that will allow the bank to meet the target set by the ECB, to the nearly total disposal of its NPL, namely 9.5 billion. There is also an intermediate solution consisting of the transfer of 8 billion.

The objective is to determine the price for each option to identify the best dimension of the NPL portfolio to sell.

The Banco Bpm strategy is aligned with those of the leading Italian banks: the Intesa Sanpaolo-Intrum Iustitia operation as well as Unicredit, which made a radical clean-up that led to a capital increase for 13 billion euro.

As already mentioned, there are seven competitors for the Banco Bpm NPL portfolios, both national and international, already operating in the Italian NPL market. The competitors feature a team composed of Tpg, Davidson Kempner Capital Management and Prelios (assisted by Mediobanca and Rothschild), another one formed by Fonspa and Elliott (with Goldman as advisor), plus DoBank-Fortress (with Citi), Varde with the servicer Guber, as well as the American giant of alternative investments Cerberus (with the consultants Lazard and Vitale), Pimco with Phoenix Asset Management, and finally a team featuring Crc and the servicer Fire. The participation of the Spac of the banker Corrado Passera in this last team is still not sure. In the meanwhile, the platform might also be sold. According to the rumours, Banco Bpm appointed Deutsche Bank and Deloitte for the evaluation of the offers.

Once the offers are received on 10th July, Banco Bpm plans to select two teams by the beginning of August for then negotiating a potential agreement after the completion of an additional evaluation phase of the dossier.

Banco Bpm has recently completed the securitisation of an NPL portfolio worth 5.1 billion euro. The Ceo Giuseppe Castagna commented that by the summer it would be clearer whether to sell or not the platform and to assess whether the set goals had been met. The first operation of the Ace Project amounting to 3.5 billion is included in the total 8.5 billion that the bank devalued according to the application of the IFRS9 accounting principle.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi