npl meeting 2015 e-book
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VENICE18 SEPT
NPL MEETING2015
FOCUS ON ITALYAND SPAIN
NPLMEETING 2015
FOCUS ON ITALYAND SPAIN
VENICE 18 SEPTEMBER
TITOLO • TITOLO 54 NPL MEETING 2015
PEOPLE EVENT PERSONNEL70
9%ADVISORS35%
BUYERS
2%
6%
23
NETWORKING AREAS 14
1DEDICATED
APP
ZEROACCREDITATION FEES
INVITATION ONLY
EVENT 1ST IN ITALY ON NPL
NPLINTERNATIONAL MEETING
FOCUS ON ITALY&SPAIN
PANEL DISCUSSIONS
SPEAKERS
LAW FIRMS
SERVICERS
400PARTICIPANTS
2
CATEGORIESOF PLAYERS REPRESENTED6 EDITION4TH
37%ORIGINATORS
2015 represents a record edition with almost 400 attendees from all over the world, of which 35% buyers, 37% originators, 9% advisors, 6% law firms and 2% servicers.
76
1st Roundtable • UNSECURED assets1. Banca IFIS, Andrea Clamer2. Cerberus, John Priest3. Hoist Finance, Charles De Munter4. Intrum Justitia, Alessandro Pappalardo5. Anacap, Justin Sulger6. Unicredit, Alberto Vigorelli7. Banco Popolare, Paolo Tosi8. Deutsche Bank, Roberto Guidi9. Bankia, Iñigo VelázquezQ&A session
2nd roundtable • SECURED assets (Real Estate and Corporate) part 1 1. Capital Light Bank Intesa, Carlo Viola2. Italfondiario, Fabio Balbinot3. Algebris, Massimo Massimilla4. MPS, Massimo Giacobbo5. Haya RE, Juan Manuel Hoyos6. Cerved, Andrea Mignanelli7. Situs, Bruce Nelson8. Prelios, Riccardo Serrini9. Pillarstone, Raimondo Bonfanti
Special guest: Simone Moro
Standing-up lunch
Interview with Jaime Echegoyen, Executive Chairman of Sareb
2nd roundtable • SECURED assets (Real Estate and Corporate)part 2 and Q&A session
Conclusion and final greetings
NPL Overview on the Italian and Spanish marketsAntonella Pagano, PwC ItalyJaime Bergaz, PwC Spain
Guests registration and networking meetings
Italy & Spain through their macroeconomic framesRichard Portes, London Business SchoolQ&A session
Welcome and IntroductionGiovanni Bossi, CEO of Banca IFIS
9.15 AM
9.45 AM
7.30 AM 8.45 AM
9.15 AM
9.45 AM
10.30 AM
9.00 AM
10.30 AM 12.15 PM
2.45 PM
12.15 PM 1.00 PM
2.45 PM
3.45 PM
4.15 PM
5.15 PM
5.30 PM
1.00 PM
3.45 PM
4.15 PM
5.15 PM
AGENDAAGENDA
8 9WELCOME AND INTRODUCTIONWELCOME AND INTRODUCTION
330 billion Euro of distressed assets in the banks’ balance sheets are a disaster for the Economy. This situation doesn’t allow Italy to react with the right strength to support growth.The goal of the NPL Meeting is to share data, ideas and actions to undertake.
GIOVANNIBOSSICEO BANCA IFIS
SIMONEMORO
Impossible does not exist. Only the ALMOST impossible exists.
Photo © Cory Richards | The North Face Courtesy of Simone Moro
13
NPL OVERVIEW
THE ITALIANAND SPANISHMARKETS
NPL OVERVIEW • THE ITALIAN AND SPANISH MARKETS
JAIME BERGAZ
PwC SPAIN
ANTONELLA PAGANO
PwC ITALY
InSpainthefinancialcrisisbeganasconsequenceoftherealestatebubble:from2000to2007therewasanstaggeringgrowthofpricesintheREsector,bankshadquitealooseapproachtomortages,thinkingtheywereinsuredbythevalueofthecollateralgoodsthat,instead,droppedtheirvalue. Nowtheseassetsforatotalof425billioneuroareheldbySareb,theSpanishbadbankcreatedin2012.
IntheItalianmarketweareseeingsomethingthatalreadyhappenedinSpainin2012.Incomparisonto1yearago,inItalytherearemoretransactions,inwhichtheplayerareoftenthesamethatoperatedsomeyearsagointheSpanishNPLmarket.TodayweseemoretransactionscarriedoutinItaly,bothsecuredandunsecured.Inayear’stime,weexpecttoseeanincreaseofinvestorsintheItalianNPLmarket.
1514 NPL OVERVIEW • THE ITALIAN AND SPANISH MARKETS NPL OVERVIEW • THE ITALIAN AND SPANISH MARKETS
6280
110128
146125 119
3127
30
39
51
48 47
25
33
33 33
93107
140
192
230
206 199
5%6%
8%
10%
16%
13% 12%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
50
100
150
200
250
% D
elin
quen
cy ra
tio
€ bn
SMEs/Corporates Individuals Sareb Delinquency Ratio (%)
Non-performing loans trend in the Spanish market
Non-performing loans (NPLs(1)) evolution
Corporate/SMEs(3)
Individuals(2)
(1) When a contract is 90 days past due since the first unpayment
(2) Breakdown of doubtful loans by type of spending(3) Breakdown of doubtful loans by main activity. We have considered all activities related to Real Estate.
(4) Total NPLs transferred to Sareb by Spanish financial entities
Source: Bank of Spain as of September 2015
Creation of SAREB(4)
Non-performing loans (1Q 2015)
€119bn56%44%
Real Estate Sector Others
28%
72%
Unsecured NPLs Secured NPLs
€47bn
2009 2010 2011 2012 2013 2014 1Q 2015 32,2
14,1
14,6
19,0
19,5
26,4
40,3
88
a
a
b
c
b
a
aBad Bank(1)
Top 6Spanishbanks bytotal assets
68%
(1) SAREB’s annual statement as of December 2014. 88bn include REDs and REOs performing and non-performing
Source: Banks’ annual statements and PwC analysis
Rest ofSpanishBank
— #12 #18 na
#12 #6 #4 #2
#2 #1 #4 #3
#1 — #2 —
#2 — #2 #2
— #2 #2 #2
#3 #1 #1 #1
#13 #7 #7
#1
#2
45
64
#5
3.6
7.9
6.2
2.5
4.3
3.5
3.5
13.3
Total deals €55.7bn
2012 2013Total Face
Value (€ bn)2014 2015
NPLs as of 2Q 2015 # Deals closed
Spanish market players – Top 6 Spanish Banks + SAREB
4259
78
107125
156
184 194
3%
5%
6%
8%
10%
12%
0%
2%
4%
6%
8%
10%
12%
14%
-
50
100
150
200
2008 2009 2010 2011 2012 2013 2014 H1-2015
€ bn
Gross NPL (€ bn) Gross NPL / Loans to Customers (%)
Gross NPLs (“sofferenze”) trend in the Italian marketBanks non-performing loans (Gross NPL)
56%
NPL Coverage ratio Top 20 Banksas of 31.12.2014
Gross NPL breakdown as of 31-03-2015(1)
Gross NPL breakdown as of 31-03-2015
45%55%
Secured NPL
UnsecuredNPL
82%
16%
2%
Corporate
Retail
Other
(1) Secured by mortgage and / or pledge
Source: PwC analysis on Bank of Italy Bollettino Statistico (Bollettino II Trimestre 2015) and ABI Monthly Outlook (July 2015)
2%
13%
Gros
s N
PL /
Loan
to C
usto
mer
s
2008 2009 2010 2011 2012 2013 2014 H12015
Italian NPL market players – Top 5 Italian Banks + BCC and Others
Gross NPLs as of 2Q 2015 (1)
% overGross NPL
Total GBV ( € bn) # Deals
2012 2013 2014 2015
BCC (1)
Top 5 Italianbanks bytotal assets
Rest of ITBanks +Other Fin.Institutions
Several ConsumerCredit Companies
20%
20%
13%
4%
6%
8%
7.51.6
1.90.20.20.4
11.0
- #1 #2 #4
#1 - - -
- - #2 #1
- - - #1
- #1 #1 -
- - #1 -
#6 #7 #9 #7
Asset class
Mixed Portfolio,Leasing, Consumerand Platform
Mixed Portfolio
Mixed Portfolio,Consumer
Unsecured
Mixed Portfolio
Mainly ConsumerCredit
Mixed Portfolio
15
11
7
25
38
39
TITOLO • TITOLO 1716 NPL OVERVIEW • THE ITALIAN AND SPANISH MARKETS
Italian NPL market players – Main Special Servicers
Non Captive Servicers (Banking NPL Secured & Unsecured) Debt Collectors (Mainly Consumer & Corporate)
1
2
2
3
4
5
5
9
10
40(1)
Independent
Independent
Independent
Independent
Independent
Mainservicers AUM2014 (€ bn)Shareholders
Independent
NPL
Total servicers (AUM) €80 bn
(1) Italfondiario AUM does not include UCCMB assets
Assetsmainlyowned byinvestors
… a very fragmented market withca 1300 companies / familybusinesses among which
Asset owner
Spanish market players – Main special servicers
Main servicers (GBV 2014 € bn)
Main servicers (AuMs) € 225bn
(1) Does not include BMN portfolio
Source: PwC market information; Company memories; company website
Main servicers Ownership
(1)
Ownership Asset owner
8
25
33
33
36
45
45
a
b
c
d
e
f
g
Private shareholders
Secured servicers Unsecured servicers
Main servicers (AuMs) € 135bn
Spanish market players – Main special servicers
Main servicers (GBV 2014 € bn)
Main servicers (AuMs) € 225bn
(1) Does not include BMN portfolio
Source: PwC market information; Company memories; company website
Main servicers Ownership
(1)
Ownership Asset owner
8
25
33
33
36
45
45
a
b
c
d
e
f
g
Private shareholders
Secured servicers Unsecured servicers
Main servicers (AuMs) € 135bn
Italian NPL market players – Main Special Servicers
Non Captive Servicers (Banking NPL Secured & Unsecured) Debt Collectors (Mainly Consumer & Corporate)
1
2
2
3
4
5
5
9
10
40(1)
Independent
Independent
Independent
Independent
Independent
Mainservicers AUM2014 (€ bn)Shareholders
Independent
NPL
Total servicers (AUM) €80 bn
(1) Italfondiario AUM does not include UCCMB assets
Assetsmainlyowned byinvestors
… a very fragmented market withca 1300 companies / familybusinesses among which
Asset owner
Spanish market players – Main special servicers
Main servicers (GBV 2014 € bn)
Main servicers (AuMs) € 225bn
(1) Does not include BMN portfolio
Source: PwC market information; Company memories; company website
Main servicers Ownership
(1)
Ownership Asset owner
8
25
33
33
36
45
45
a
b
c
d
e
f
g
Private shareholders
Secured servicers Unsecured servicers
Main servicers (AuMs) € 135bn
Italian NPL market players – Main Special Servicers
Non Captive Servicers (Banking NPL Secured & Unsecured) Debt Collectors (Mainly Consumer & Corporate)
1
2
2
3
4
5
5
9
10
40(1)
Independent
Independent
Independent
Independent
Independent
Mainservicers AUM2014 (€ bn)Shareholders
Independent
NPL
Total servicers (AUM) €80 bn
(1) Italfondiario AUM does not include UCCMB assets
Assetsmainlyowned byinvestors
… a very fragmented market withca 1300 companies / familybusinesses among which
Asset owner
Spanish market players – Main special servicers
Main servicers (GBV 2014 € bn)
Main servicers (AuMs) € 225bn
(1) Does not include BMN portfolio
Source: PwC market information; Company memories; company website
Main servicers Ownership
(1)
Ownership Asset owner
8
25
33
33
36
45
45
a
b
c
d
e
f
g
Private shareholders
Secured servicers Unsecured servicers
Main servicers (AuMs) € 135bn
TITOLO • TITOLO 1918 ITALY & SPAIN THROUGH THEIR MACROECONOMIC FRAMES
ITALY & SPAIN
THROUGH THEIR MACRO-ECONOMIC FRAMES
RICHARD PORTES
LONDON BUSINESS
SCHOOL
WHAT ARE THE SPECIAL
PROBLEMS IN ITALY?
Incentives for banks to sell are weak, pressures against are strong
Many of the smaller, local banks are ‘zombies’, kept alive because of political pressures and exaggerated role of local shareholders
They can argue that NPLs will become sound as economy turns up
Problematic insolvency procedures and enforcement of collateral judgments
Waiting for a ‘bad bank’ (asset management company - AMC) solution from government
2120 ITALY & SPAIN THROUGH THEIR MACROECONOMIC FRAMESITALY & SPAIN THROUGH THEIR MACROECONOMIC FRAMES
SO THERE ARE THREE ‘SOLUTIONS’WHAT SHOULD
ITALY DO?
There is high market demand for NPL assets
An AMC – but state aids issue
Wait it out, hoping for growth that will lift SMEs – but there won’t be much growth if there is no investment, and investment will be weak if the banks continue to be burdened by NMPLs
Consolidation of the banking sector, resolution or sale of the ‘zombies’, cut costs, raise capital, and get to the point where the remaining banks can sell their NPL portfolios
But don’t expect a broad Eurozone or global expansion that will carry Italy with it and push this problem aside
Need to get them off banks’ books to free up capital and internal managerial resources (get them off NPLs, onto new loans)
If an AMC, do it now – or forget it: delay blocks market solutions
Do whatever additional is possible to accelerate judicial processes for foreclosure and contract enforcement – may need more legislation
Need more transparency for bad asset portfolios and for debtors – that may require legislation to limit privacy rights
A big push for much better IT systems and data
01
02
03
23
FIRSTROUNDTABLE
UNSECUREDASSETS
1ST ROUNDTABLE • UNSECURED ASSETS
Andrea ClamerBanca Ifis
John PriestCerberus
Charles De MunterHoist Finance Alessandro Pappalardo
Intrum Justitia
Justin SulgerAnacap
Alberto VigorelliUnicredit
Paolo TosiBanco Popolare
Roberto GuidiDeutsche Bank
Iñigo VelázquezBankia
2524
WeareverysurprisedofhowquicklypriceshaveincreasedintheItalianmarket,giventhattherehasbeenmodestrecoverysofar.Thatsaysalotabouttheinvestors’universe:there isalotmoreappetite
Thequalityofthefileandtheeasyaccesstodocumentationhaveadirectimpactontheprice
Investorsareinterestedin veryyoung portfolios
Howtosellsecuredassetsisthebigdeal,asitwouldgivemorecoverageontheremainingportfolioandCapitalrelease
Ifanassetmanagementcompanyneedstobecreatedithastobedonenowandinlineofmarketprices
Spainiscomingoutofthisphase,whereweseemoreassetsales,moredevelopedprocesseslikeforwardflows,andthesecondarytrademarketisstartingtoemerge
Marketsgothroughaseriesofevolutions:fromanemergingmarket,wherethereareverybespoketransactions,toamoreevolvingmarket,withintermediariesmakingtheprocessmorecomplete.Italyisnowbetweenthefirstandthesecondstage.
Thereisanaccelerationinthesalesprocess,and anindustrializationoftheroles
Italydoesnotneed abadbank,especiallybigbankshavealreadymanagedthisproblemindependetely.Theproblemisthatbanksdon’tselltheirassetsbecausetheyarewaitingtoseeiftheGovernmentcreatesabadbank.
InSpain,afterthecreationofSareb,asustainablemarketwascreated.
Italyhasamarketthattendstolegalizealot,whichisverycostlyandtimeconsuming.There’saneedtoimprovetheamicableresolutionsstrategies
Smallerbanksneedtounderstandthatiftheywanttoenterthismarketinasignificantway,theyhavetoworkinanetpresentvalueperspective,ofvaluecreationfortheshareholders
TRUST
GO STRAIGHT
BE POSITIVE
SHAREINFORMATIONANDTHE SUCCESS
1 /
2 /
3 /
4 /
TEAM-WORK
SIMONE MOROPhoto © Cory Richards | The North Face Courtesy of Simone Moro
292ND ROUNDTABLE • UNSECURED ASSETS
SECONDROUNDTABLE
SECUREDASSETS
Carlo ViolaCapital Light Bank Intesa
Fabio Balbinot Italfondiario
Massimo MassimillaAlgebris
Massimo Giacobbo MPS
Juan Manuel HoyosHaya RE
Andrea MignanelliCerved
Riccardo SerriniPrelios
Bruce NelsonSitus
Raimondo BonfantiPillarstone
REAL ESTATE
AND CORPORATE
3130 2ND ROUNDTABLE • UNSECURED ASSETS 2ND ROUNDTABLE • UNSECURED ASSETS
Italyneedstoconsolidateitsbankingsystem,there’snoneed tohavesomanybanks
Ofthe190billionofdeterioratedassetsinItaly,50-60%arecollateralizedwithrealguarantees:soonthecreditproblemwillbetransformedinhowtomanagetherealestateproperties
IthoughtItalyhadalreadycreatedthebadbank
Weaddnewcompetencesandnewpersonnel,specificteamsontopticketsegmenttoacceleratethecollectionprocess.Weseeagreatinterestonthebuyers’side
betweendemandandofferissmaller.Wherethecollateraliscomplicated,intheindustrialsector,thesaledon’tproceedandthestockshrinksbecauseofthepricinggap
Thesalesthatwehaveanalizedinthelast18monthsarefocusedon50billionofnon-performingloansofindividualsandenterpreneurs,wherethecollateralissimpleandthegap
Thegoalistodeleverageasegmentedportfolio:wealreadydiditwithapartofit,disposingofabout6billion
Outsourcingisthe rightdirectionforItaly,itcanfosterbanksandhavingamoreefficientservicewithoutpayingtoomuch
WehopethatinnovationwillimprovetheItalianlegalsystem. Fortoday,theincentivethatwehaveistobeproactivetowardstheopenmarket
WeneedtohaveclearinourmindthatourprofessionisbeingSERVCER,weareattheserviceofourclients.Wedon’townanyofthe45billionthatwemanage,itisinthehandsofourclients
33INTERVIEW WITH JAIME ECHEGOYEN
Differently to what happened in Spain, Italy does not needan asset management companybut something must be done to resolve this situation.Italy needs a system solution.
watch the video
JAIME ECHEGOYEN
EXECUTIVE CHAIRMAN
OF SAREB
TWEET
GALLERY
@BancaIFIS#nplmeeting
#profPortes @LBS “what should Italy do?” Among the
suggestions: “ a big push for much better IT
systems and data”
@BancaIFISJaime Bergaz
@PwC_Spain: oggi il mercato bancario spagnolo è maturo #NPL #NPLmeeting
@BancaIFIS#nplmeeting a.m.
#networking #sharing #learning
@BancaIFIS#nplmeeting
afternoon interview: Jaime Echegoyen Chairman,Sareb.
“You cannot solve megaproblems at
once. You must break them into pieces”
@damiano_sestyleSimone Moro on stage: il professionista vende un sogno #nplmeeting
@bancaifis
@Ale_Donadio#NPLmeetingincontro fra gli
operatori italiani e spagnoli su questo
tema. Un confronto per trovare modalità ed approcci comuni.
@CaffeAffariLiveBanca #Ifis,
#nplmeeting: il focus sul credito in Italia.
Live da Venezia @ceru2 intervista @GiovanniBossi
@GiovanniBossi #nplmeeting Analisi su funzionamento
mercato tra banche e investitori. Interesse
alto. @ACLAM23 #banche @BancaIFIS
@AlbertoSondriGrande partecipazione e molta attenzione.. ci sono tutti gli elementi per un grande evento
#nplmeeting
@AStaccioneOggi #nplmeeting, per
parlare di mercato #npl, opportunità e
strumento per liberare il credito e la ripresa
economica
@CreditVillageCVIl discorso di apertura
di Giovanni Bossi #NPLmeeting
@BancaIFISCountdown: -2 days
to #NPLmeeting #workinprogress.
Stay tuned! #NPLmeeting
#NPL #meeting #september18
TWEET GALLERY
NPL Meeting 2015
Class CNBC, Collegamento, Intervista a Riccardo Serrini, Prelios CreditServicing
Class CNBC, Collegamento,
Punto della situazioneCarlo Cerutti
Simone Moro’s Presentation
NPLs in Italy and Spain: Macro Context and Micro ‘Solutions’Richard Portes, London Business School
CLASS CNBC, Collegamento di lancio, Intervista a Giovanni Bossi, Banca Ifis
Class CNBC, Collegamento,
Intervista a Raimondo Bonfanti, Pillarstone
Class CNBC, Collegamento, Intervento di Jaime Echegoyen, Sareb
NPL Meeting 2015 in numbers
NPL Overview on Italian and Spanish Markets, Antonella Pagano and Jaime Bergaz, PwC
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SEE YOUIN 2016
#NPLmeeting
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