Italian banks: 60 billion Npl market, here are the upcoming deals

Mps takes the lion's share in 2017, with its 26 billion non-performing loans sold to Atlante II – But important transactions will arrive in the coming months from other institutions: from Banco Bpm to Carige, passing through the institutions put into resolution in 2015 – Meanwhile, the go-ahead for the strategy to tackle the problem of non-performing loans has arrived from Ecofin

This year the Italian Npl market could exceed 60 billion euros. A value that includes not only actual non-performing loans, but also other types of "non-performing loans", including "unlikely to pay". The English consultancy firm PwC writes it in a recent study with a rather significant title: “The Italian NPL Market, The Place To Be”.

After reaching the record value of 341 billion at the end of 2015, in 2016 the overall volume of NPLs dropped significantly (324 billion at the end of the year), but remained the highest in Europe.

To take the lion's share is of course Ps, which has already closed its deal by becoming the protagonist of one of the largest securitization operations ever carried out in Europe. Montepaschi has closed an agreement with Atlante II for a portfolio of 26,1 billion at an average price equal to 21% of the Gross Book Value.

As regards non-performing exposures of Veneto Bank and Popular Bank of Vicenza, the bailout decree passed on 25 June by the government as part of the sale of the institutions to Intesa Sanpaolo provides that 9 billion Npl will be transferred to a public bad bank.

Another significant Npl stock (10,3 billion) is that of the four banks saved in 2015 (Marche Bank, Charge yourself, CariFe and Banca Marche) sold in 2015 to Bad Bank Rev, which could find buyers this year.

Also Bpm bank is selling a Npl portfolio (2 billion), while Carige it should liquidate part of the 3,7 billion non-performing loans within this year.

Here are the main transactions expected on the market in the coming months:

Source: Reuters elaboration on the reports "Navigating the Italian credit opportunity - Non-performing loans and new credit tools" by EY and
“The Italian NPL market – The place to be” by PwC”.

Meanwhile, the green light has come from Ecofin for the strategy to tackle the problem of non-performing loans. Among the various proposed actions, which touch on bank supervision and restructuring, the Commission is asked "to develop a 'blueprint' for the potential creation of national asset management companies (AMC) by the end of the year".