ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for discussion Register to chat with like-minded investors on our interactive forums.

NWG Natwest Group Plc

265.10
2.30 (0.88%)
Last Updated: 13:10:43
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Natwest Group Plc LSE:NWG London Ordinary Share GB00BM8PJY71 ORD 107.69P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  2.30 0.88% 265.10 265.10 265.20 266.60 263.70 265.00 6,559,478 13:10:43
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 14.77B 4.64B 0.5271 5.02 23.26B

Italian Non-Performing Loan Portfolios Attract At Least 7 Bidders -- Update

30/09/2015 12:12pm

Dow Jones News


Natwest (LSE:NWG)
Historical Stock Chart


From Mar 2019 to Mar 2024

Click Here for more Natwest Charts.
By Giovanni Legorano 

MILAN--Piles of bad loans accumulated over years of recession in Italy are starting to find buyers.

At least seven investors have submitted offers for Italian bad loan portfolios worth EUR4.2 billion ($4.7 billion) that are being sold by General Electric Co. and three other firms, according to people familiar with the matter.

It signals a distressed debt market that is gathering steam as investors look for higher yielding, higher risk investments in a low rate environment. And it comes after the Italian government said recently that a broader economic recovery is taking hold.

GE is selling the portfolios together with Royal Bank of Scotland PLC, Prelios SpA and Crédit Agricole SA. Offers are likely to value them between EUR150 million and EUR200 million, one person said.

Fortress Investment Group LLC, D.E. Shaw Group, Anacap Financial partners LLP, Ares Management LLC, Deutsche Bank AG, Lone Star Funds and CarVal Investors LLC, have bid for the four different portfolios of soured loans, which include corporate and individual loans, the people said.

The transaction would be the largest of this kind in Italy since the financial crisis began. Local lenders relentlessly accumulated piles of bad loans during Italy's longest recession since World War II, but refrained from selling them to investors. This was because increasingly stringent capital requirements, the protracted economic downturn and a negative outlook for the real-estate market led banks to worry about low levels of provisions translating into large losses when bad loans were sold.

More recently, Italian lenders went through painful recapitalizations that strengthened their ability to cover losses on loans.

In addition, the Italian government introduced new laws that give banks immediate tax breaks on losses on loans and make it easier for creditors to repossess assets pledged as guarantees on loans.

Investors now expect the combination of those factors to reduce the gap between the price at which banks are willing to sell these assets and the amount buyers will pay, paving the way for more deals.

According to the Bank of Italy, bad loans totaled more than EUR330 billion at the end of the first quarter, or 17% of total lending. Data by Pricewaterhouse Coopers show that Italian banks sold only EUR6.7 billion worth of bad loans last year, still up 40% from 2012. So far this year, deals have already reached a total of EUR9.6 billion.

"Market conditions for NPL [non-performing loans] deals in Italy have been improving a lot in these last two years," said Giovanni Bossi, chief executive officer of Banca Ifis SpA. "In wider terms we are experiencing the best market in a decade."

GE co-owns three of the four portfolios with each of the other firms, while RBS is the sole owner of the fourth one.

Some of the bidders may be asked to present binding offers as early as this week, the people said.

GE's asset sale follows a decision by the conglomerate in April to part ways with the bulk of its financing business, which long accounted for half of the company's profit but whose risks have rattled investors and weighed on its stock.

Away from the GE deal, Italian bank UniCredit said Monday that it has agreed to sell about EUR1.2 billion worth of bad loans to Anacap, bringing the nominal value of loans shed in the last two years to over EUR10.5 billion.

Banca Monte dei Paschi di Siena, which in June sold EUR1.3 billion of distressed loans to Banca Ifis and Cerberus Capital Management LP, is in talks with potential buyers of more bad loans worth EUR1.8 billion. Bidders for the portfolio--which is almost entirely made of unsecured credits--include Fortress, one of the people said.

Other banks hoping to sell include Veneto Banca ScpA, which has put up around EUR1 billion of loans, more than half of which are secured.

"There are several options and the bank is studying market conditions for various amounts," a Veneto Banca spokesman said.

RBS, Prelios, Monte dei Paschi, Deutsche Bank, Lone Star declined to comment. GE, Crédit Agricole, Fortress, D.E. Shaw and Anacap didn't reply to requests for comment. CarVal couldn't be reached for comment.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

September 30, 2015 06:57 ET (10:57 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.

1 Year Natwest Chart

1 Year Natwest Chart

1 Month Natwest Chart

1 Month Natwest Chart

Your Recent History

Delayed Upgrade Clock