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Debtwire NPL Chart of the Week: M&A activity in the NPL market reached EUR 2bn in 1H19

NPL Chart of the Week: 15 July 2019

In the first half of the year, Greece, Italy, and Spain have seen M&A activity in the NPL servicing market for a total disclosed value of almost EUR 2bn, according to data from Debtwire and Mergermarket. With three major deals already agreed and more in the making in each of the three countries, the appetite for NPL platforms and servicers has been consistent and there is still some room for consolidation in the market.

The latest example is a potential deal involving Italy's Credito Fondiario, controlled by Elliott Management, which according to a report by Bloomberg yesterday has hired Deutsche Bank and Goldman Sachs to explore possible combinations.

Rome-based Credito Fondiario currently has more than EUR 50bn of assets under management, according to a spokesperson, making it the second largest servicer in Italy. It has been expanding, most recently with the acquisition of Banco BPM’s NPL platform, re-named First Servicing, and in 2018 with Carige’s NPL platform.

All major players have been active in a market that is increasingly international.

The largest acquisition closed so far this year was doValue (formerly doBank) taking a majority stake in Altamira from Apollo, ADIA and CPPIB for EUR 360m. The deal, closed in June, made doValue, already Italy's largest servicer, also the owner of the largest servicer in Spain.

As at the end of 2018, doValue had EUR 83.2bn in assets under management, of which EUR 81.4bn in Italy and the remainder in Greece. When the acquisition was agreed in December 2018, Altamira had approximately EUR 55bn of assets under management in Spain, Portugal, Cyprus and Greece.

Spain has seen consistent sales of NPL and real estate management platforms from banks to investors. In 1H19, it was again the largest market for M&A activity, which could reach EUR 1.5bn when the announced sale of Banco Sabadell’s Solvia Desarrollos Inmobiliarios (SDIN) to Oaktree Capital closes. The expected price has been estimated to be EUR 800m–EUR 900m, the Spanish press reported.

Sabadell has already concluded the sale of its other real estate management platform, Solvia Servicios Inmobiliarios (Solvia), to Intrum.

The Swedish credit management company has been pursuing an aggressive acquisition strategy across Europe. After a JV with Intesa Sanpaolo last year, it is now the third largest servicer in Italy, after doValue and Credito Fondiario, with circa EUR 43bn of assets under management, according to a spokesperson.

Intrum has also made its mark in Greece, acquiring an 80% stake in Piraeus Bank’s Recovery Banking Unit, which manages an NPL and REO portfolio with a total GBV of EUR 28bn, for EUR 328m.

The second half of the year will remain equally active in Greece, with the closing of the announced sale of Eurobank Ergasias’s FPS to PIMCO.

More activity will come from Cerberus Capital Management, which has been marketing both its main servicers in Spain, Haya Real Estate (EUR 39.6bn AUM) and Gescobro (EUR 12.5bn). While so far offers have not met expectations, market participants expect further efforts.

by Alessia Pirolo and Amy Finch

Alessia Pirolo Head of NPL Coverage Debtwire

Alessia Pirolo is Head of NPL Coverage at Debtwire ABS. From a previous focus on Southern European Commercial Real Estate, she is now in charge to expand Debtwire's NPL coverage areas around the world. Before joining Debtwire, she covered U.S. and European commercial real estate for The Wall Street Journal, and the Commercial Observer. She holds a master’s degree from the Columbia University Graduate School of Journalism.

Alessia Pirolo Head of NPL Coverage Debtwire

Alessia Pirolo is Head of NPL Coverage at Debtwire ABS. From a previous focus on Southern European Commercial Real Estate, she is now in charge to expand Debtwire's NPL coverage areas around the world. Before joining Debtwire, she covered U.S. and European commercial real estate for The Wall Street Journal, and the Commercial Observer. She holds a master’s degree from the Columbia University Graduate School of Journalism.

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