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Non-Performing Loans in Italy—An Update

Years have gone by, and no answer has been posed the NPL questions in Italy.  Lots of talk and discussion about what to do about the question has gone on, but there has yet to be any actions pursuing an end to the problem. 

Fortunately, over the course of the last year, some changes have been underway.  So far this year, Debtwire has monitored 23 closed deals in Italy involving NPLs for a gross book value (GBV) of €19.7bn – including Cerved’s acquisition of BMPS’s NPL management platform Project Juliet, which on its own manages NPLs with a combined GBV of €9bn. Debtwire is also monitoring 14 ongoing deals for €64.6bn – these figures do not include rumoured deals or transactions with undisclosed counterparts. The pipeline suggests that in 2016 the Italian market is on track to exceed, by a wide margin, 2015 NPL sales, which, according to PwC, totaled €19bn.

However, in an increasingly regulated environment, and with Italian lenders still saddled with €360bn of NPLs, the journey towards solving this prolonged issue has just begun.  Regulations are proving to be the next barrier.  Following the introduction of the European banking recovery and resolution directive (BRRD) in 2014, governments can no longer directly recapitalise their banking sector without facing potential censure for state aid. However, without a state-sponsored systemic solution, cleaning up NPLs will remain piecemeal and slow-going.

Sign in or sign up to My Debtwire Events to download the full Italian NPL Brief.

This year's Italian Restructuring Forum, taking place on 18 May 2017, will cover latest trends in the NPL market as well as restructuring opportunities in major industry sectors such as transportation. Our panelists will also review High Yield opportunities and discuss the impact of recent changes in bond issuance. Visit the event website to find more information about speakers, topics and booking options.

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