13 February, Milano Finanza
Unicredit is ready to get rid of a significant NPL portfolio. According to Milano Finanza, the bank led by Jean Pierre Mustier is about to put on the market three portfolios for a total nominal amount of about 2.5 billion euro. The operation concerns secured and unsecured holdings, following the model of the past transactions, with the aim to unburden the bank’s financial accounts. After all, de-risking is one of the key points of the 2019 Transform plan, and the results achieved so far are aligned with the target. At the end of 2018, for instance, the ratio between impaired loans and the total assets had fallen by 265 base points, set at 7.7% and with a coverage rate of 61%. In the fourth quarter alone, the gross impaired loans had reduced by 10.2 billion per annum and by 2.6 billion from the previous quarter, setting at 38.2 billion.
For what concerns the operations, in 2017 Unicredit completed the Fino project regarding the transfer of a 17-billion portfolio to Fortress and Pimco, which was then securitised through Gacs, the state guarantee. Moreover, the bank has continued to consistently transfer smaller portfolios: from the Firenze, Milano, Amalfi and Torino projects, characterised by a significant unsecured component, while UTPs have been mostly sold through single name operations.
The bank raised the bar concerning transfer targets, reducing impaired loans by other 4 billion gross in order to lower the total stock to 40.3 billion. The impact on the total assets is expected to set at 7.8% from the 8.4% announced last year. This acceleration implicitly addresses the pressures by the ECB. Due to the addendum approved last spring by the Surveillance Authority in Frankfurt, banks have two and seven years to devalue their unsecured and secured credits respectively.
In addition to the three future operations, there are also other projects in the pipeline. In the next few weeks, in fact, the first portfolio named Sandokan 2 for 800 million is meant to be launched, while the remaining tranche will be transferred in the following months. The operation has been assisted by the legal firm Lombardi Segni e Associati, and it’s similar to another operation for a smaller amount that Unicredit launched at the end of 2015. After all, the portfolio targets the same players, namely the investors Pimco and Gwm, and the sole servicer Aurora Recovery Capital-Arec. The players are currently at the final stage of the due diligence, and they will deal with the first portfolio for 800 million, which is mainly composed of unlikely-to-pay backed by real estate, while NPLs constitute a minority component.
Source: Milano Finanza
Translator: Cristina Ambrosi