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Debtwire NPL Chart of the Week: Italian banks continue deleveraging

NPL Chart of the Week: 13 May 2019

The four largest Italian banks have continued reducing their NPEs in the first months of 2019 and have plans for further disposals according to their quarterly reports, which were released last week.

So far this year, Italy's largest bank, UniCredit Group, has reduced its NPE volume by EUR 600m to EUR 37.6bn, with EUR 4.45bn of live deals tracked by the Debtwire NPL Database. The group is gearing up to completely run down its non-core portfolio, which currently contains EUR 17.7bn of NPEs, by 2021.

This should give the bank license to refocus on acquisitions. UniCredit is reportedly among the potential suitors for Commerzbank after the German bank’s merger talks with Deutsche Bank folded last month, according to press rumours.

Intesa Sanpaolo had a reduction in NPL volume of EUR 1bn to EUR 35.5bn and should be a big player in the year to come, as it currently has the highest total volume of live deals. The EUR 11bn in the pipeline is made up of a single transaction, however — an unlikely to pay (UTP) loan disposal with Prelios in exclusive talks.

Banca Monte dei Paschi di Siena, the fourth largest bank in Italy, recorded a EUR 600m decline in NPE volume to EUR 16.2bn remaining.

The bank, which has seen a sizeable reduction in its NPL ratio from 43.5% as at the end of 2015 to 16.3% at the end of 2018, also has the highest number of deals in the pipeline — five — according to the Debtwire NPL Database. The largest is a rumoured sale of a UTP loan portfolio up to EUR 8bn. If the transactions are all completed as expected, the bank will more-than-halve its remaining NPE volume.

Banco BPM registered an almost imperceptible decrease in NPE volume – with a EUR 132m decrease to circa EUR 11.7bn. However, when adjusted for the 2Q19 sale to Illimity of EUR 650m Project Ace Leasing, the new total will be 11.1bn, according to the bank’s 1Q19 report.

Amy Finch Data Journalist Debtwire
Amy Finch Data Journalist Debtwire

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