Portugal 
Spain 
Greece 
doBank challenges Intrum
26 May, Milano Finanza
The final touches will come in the next few days. Then the doBank business plan will be ready to be presented on the market. One year from the listing on the stock exchange, the leading company of the bad loans sector guided by Andrea Mangoni is at the centre of a very dynamic market, which might register transactions for 70 billion for 2018. In fact, the banking system has radically changed a paradigm that was valid since a few months ago. Nowadays, rather than managing internally their portfolios, banks prefer to transfer them to solve their problems for good and to comply with the ECB’s firm moral suasion. From this point of view, the recent agreement between Intesa Sanpaolo and Intrum Iustitia has been an example of this trend. In fact, the bank guided by Carlo Messina preferred to outsource the management of the stocks, even though the bank is still keeping a minority quota of the platform to benefit from the future cash flows. The operation has quickly become a reference for the whole market, and many other banks are evaluating to do the same. For instance, Banco Bpm is studying a similar solution as one of the options for the completion of the Ace project, while Bper Banca might do the same. Regardless the results of the internal collections and the capitals, the reason for this trend is that the market’s attention has shifted towards the quality of the assets, plus an NPL ratio over 10% could be penalising. doBank intends taking advantage of this new trend proposing itself as a strategic partner. Mainly because the group has already carried out similar operations: for example, in 2005 Intalfondiario concluded the first deal of this type with Intesa Sanpaolo, which terminated a couple of years ago. Ten years after, there was the agreement with Uccmb, which was acquired by Unicredit in 2015 for about 550 million and then became doBank. That deal was the demonstration of the skill with which the group could move in the sector. In fact, last year the allocation of 44% of doBank earned to Fortress an amount very close to the one paid to Unicredit.
As a consequence, the acquisition of another banking platform (or more than one) will allow the group to make a further leap concerning dimensions compared to the current asset under management for 90 billion. Today, doBank is placed at the top of the Italian chart for servicers, distancing all the other players. This gap shows the fragmentation of the sector that might go towards a significant consolidation in the next years. In fact, aggregation is the only option for the smaller players considering the increasing costs and the shrinking margins. International investors might play a crucial role for this purpose. It’s not by chance that the significant funds started hunting for servicers at the first signs of a bubble of the NPL asset class. It began in 2015 with the private equity fund Lone Star that acquired the Rome-based Caf (the company was then sold to Intrum a couple of months ago), then in 2016 Elliott entered Panfilo Tarantelli’s Credito Fondiario, in 2017 Varde took over 33% of the Brescia-based Guber for 47 million, Arrow Global Group got Zenith Service and Burlington took control of Prelios. Today, among the very few independent servicers that are left, there is Fire from Messina, founded by Sergio Bommarito and guided by Claudio Manetti. In conclusion, international investors will rely more and more on Italian servicers for their investment strategies. Furthermore, it’s not to exclude that operators will unite, even though doBank is not interested in this sort of operations. In fact, the group aims at growing internally, even though new strategies are not to exclude in the future. The business plan that will be presented in London in June will detail such strategy.
According to the rumours, the core business will remain bad loans, but the horizon might widen. More in detail, doBank might focus on unlikely to pay (UTP) which represent an attractive area for the banking system. After having disposed of bad loans, in fact, Italian banks have started carrying out the first operations on UTP, a business that might grow in the next months. Also because, the recent ECB addendum substantially evened out the timing for the collection of the two credit categories, cancelling the distinction.
The second area of focus will be foreign countries. Since the beginning of the year, doBank has been negotiating with the main Greek banks, namely Eurobank, National bank of Greece, Piraeus Bank and Alpha Bank. The banks intend to create a common platform to manage the credits of SMEs with the possibility to expand also in other segments. The agreement is supposed to come shortly to a conclusion and might be only one of the initiatives that the group will undertake on the international markets.
The third focus might be the strengthening of its auxiliary services offered to banks to diversify the origin of the returns, considering the physiological reduction of the new bad loans streams.
Source: Milano Finanza
Translator: Cristina Ambrosi