The Npl market is not affected much by the coronavirus crisis. This emerged from the four days of streaming events of the Credit Village Italian Digital Week, the conference dedicated to the world of non-performing loans. Interesting and perhaps surprising data came from it: in the first quarter of 2020 the Npl market in Italy recorded 73 transactions, corresponding to an estimate of around 1,9 billion euros (there were 76 in the first quarter of 2019, corresponding to an estimate of around 3,4 billion euros): of these 73, 26 were on the secondary market and 22 related to single portfolios name with fewer than 10 positions each.
It is therefore perceived by the operators uncertainty for the future but also proactive ideas to overcome this crisis and place itself at the service of the country's real economy. Particularly dynamic was the debate on the Real Estate market held on Wednesday, which touched on one of the most heartfelt problems at the moment, ie the closure of the Courts and the further extension of the Justice times. Right away the main findings that emerged from the four discussion panels:
– the need to include factoring in the forms of financing envisaged by the Cura Italia and Liquidity Decrees;
– the decrees place on the banks the problem of assessing whether or not to grant liquidity to companies;
– Utp credits are strongly affected by the crisis;
– the price of NPL sales is already falling, foreign investors are taking advantage of this moment of crisis, others distance themselves from Italy and choose more liquid asset classes;
– the volumes of transacted NPLs could still be high and settle at 30/32 billion euro in the year;
– Italian investors in the sector continue to invest in strategic asset classes for them
– it is important for investors to share the value of the underlying and the servicing fees with the sellers
– research aimed at buying a house has not decreased
– some banks will use Covid as a justification to lead to deteriorated corporate positions that were already so before or that they don't know how to manage;
– banks must adopt early warning mechanisms for UTP credits to return the positions that deserve a second chance to the bonus;
– justice must now improve the legal sales processes, adopt shared guidelines between courts and elevate judicial sales also to the free market. Proposal to open the courts in the summer;
– the credit market needs patient investors and capital;
– for servicers, business plans and cash flows need to be reviewed, adapting the structure of variable costs and investing in technology to improve process efficiency. Password: flexibility;
– 70% of securitisations in Italy are not underperforming;
– to limit the impact on the servicing sector it is necessary to unblock the cash in court, where possible find agreements with the debtor especially for corporate assets and focus on transfers on the secondary market of single name positions or small portfolios.
