August 2, 2018 / 7:04 AM / 17 days ago

UBI securitises 2.75 bln euros of bad loans, planning to sell others

MILAN, Aug 2 (Reuters) - Italy’s UBI Banca has securitised a portfolio of bad loans with a gross book value of 2.75 billion euros ($3.20 billion)avnd is preparing a second batch for sale.

In a statement late on Wednesday UBI said it would be applying for government-backed guarantees (GACS) for the senior tranche of the securitised portfolio.

The move is part of the lender’s plans to bring the ratio of gross non-performing loans (NPL) to total gross loans to below 10 percent by the end of 2019 or beginning of 2020.

Following deconsolidation of the portfolio, and based on March 2018 figures, the proforma NPL ratio should fall to about 11.3 percent from 12.74 percent.

The bank, one of Italy’s top five lenders, said it did not expect any negative impact on its capital ratios.

The second NPL portfolio, which will be smaller than the first, will be sold by end-2018 or early-2019 and will not be securitised. ($1 = 0.8598 euros) (Reporting by Stephen Jewkes; editing by Agnieszka Flak)

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