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Mps accelerates on the NPL disposal and awaits the response from the Ministry of Treasury
04 June, Finanza Report
Mps tries to further speed up the clean-up process of the accounts, after that the figures referred to the first quarter were better than expected.
The bank controlled by the Ministry of Treasury is working on the transfer of unsecured bad loans for a value of around 2 billion. Such credits are hard to collect, and they generally have lower prices.
In the meanwhile, Mps continues its work on reducing of UTP (unlikely to pay, which usually have above average quotations), confirming the objective of disposing of other 1.5 billion in 2018 according to the business plan (after having transferred 1.5 billion in 2017 and 4.5 billion throughout the plan).
In the first quarter, Mps had already reduced its gross bad loans exposure by 1.5 billion, reaching 42.6 billion, while the net exposure had decreased by 6.9 billion from last year when it was 13.3 billion. The NPL coverage percentage has increased from 54.3% to 68.8%.
In the Milan stock exchange, the Mps stocks went up. At 11.30, they gained +1.1%, being traded at 2.7 euro, aligned with the positive market trend.
In any case, the operation on NPL was expected. What is new is that it may have already been started in the last weeks and it may conclude by the summer (in September).
Moreover, the Mps stocks continue to be impacted by the political uncertainty since the Government holds a 70% stake of the bank.
At this stage, it will be up to the new Minister of Economy, Giovanni Tria, to decide how to implement the strategy announced by Lega and M5s. The government contract, in fact, implies the transformation of Mps into a “service bank” and it will likely require the resuming of the negotiations with the European Union concerning the business plan.
The new government will also have to decide on the new Mps management, currently led by Marco Morelli. Despite having reported a positive acceleration of the strategies agreed with Brussels, the management received mixed feedbacks, especially from small shareholders.
Source: Finanza Report
Translator: Cristina Ambrosi