MILAN, June 20 Planned sales of bad debt by
UniCredit and Banco Popolare, Italy's No.2
and No.4 lenders by branches, are taking longer than expected,
and talks are likely to drag on for weeks, sources familiar with
the deals said.
Italian banks' non-performing loans (NPLs), those classified
as least likely to be repaid after months of being in default,
have risen to 166 billion euros ($226.3 billion) in April, more
than double the level in 2010.
The Bank of Italy has repeatedly urged lenders to shed these
assets, which force banks to set aside precious cash to cover
possible losses, so that they can increase lending to companies.
Analysts say the prices that investors are willing to pay
for the loans are in many cases below the values accounted for
on bank books, which means lenders would be forced to take more
writedowns. Deals are taking a long time as the two sides try to
find a compromise on price.
A source familiar with the matter said UniCredit, which is
in negotiations with a handful of potential buyers, had extended
the deadline for binding offers to mid-July from end-June.
The bank aims to sell a portfolio of bad loans together with
a majority stake in its debt collection unit, UniCredit Credit
Management Bank (UCCMB), to make bad loan management more
UCCMB manages soured loans with a gross value of more than
40 billion euros owned by UniCredit and third parties.
"The lender has prolonged negotiations by a few days to give
the opportunity to all interested parties to submit their
proposals," one of the sources said. "The bank is in any case
aiming to close the transaction by July."
UniCredit declined to comment.
The sale of Banco Popolare's bad bank is also dragging on.
Chief Executive Pier Francesco Saviotti said last month that
four potential buyers had asked for more time to carry out due
diligence and he expected to have more information for the
market in the first 10 days of June.
No details have emerged so far, however. On Thursday, the
chief executive of one of the potential bidders, real estate
group Prelios, said Banco Popolare was expected to
take a decision on the sale "by the end of summer".
Banco Popolare declined to comment.
The co-operative lender has put on the block a majority
stake in Release, which owns and manages soured loans and real
estate assets with a gross value of 3.2 billion euros.
Release had a book value of around 260 million euros as of
Italy's banking association said on Tuesday the net value pf
total non-performing loans rose to 76.7 billion euros in April
from 75.7 billion in March after three months of decline as
sales of bad debts by Italian lenders stalled.
($1 = 0.7336 Euros)
(Reporting by Paola Arosio, Elisa Anzolin and Francesca
Landini; editing by Jane Baird)