MILAN (Reuters) – UniCredit, Italy’s biggest bank, is set to announce a 5 billion euro ($5.5 billion) sale of non-performing home mortgages next month, two sources familiar with the matter said.
UniCredit (MI:) has sped up clean-up efforts ahead of the presentation of a new business plan on Dec. 3.
It said in August it had lowered an end-2019 target for gross problem loans at its non-core division to around 10 billion euros, from 14.9 billion previously.
The bank’s head of non-core management last week confirmed UniCredit was on track to hit its year-end goal.
The bank held 15.7 billion euros in impaired debt at its non-core division at the end of June, but it has since agreed a number of disposals, including three sales of bad corporate loans worth 2.3 billion euros in total.
The latest transaction concerns home mortgages, a type of asset Italian banks so far have been reluctant to part with for fear of attracting bad publicity as loan collectors foreclose on properties to seek to recoup the money.
However, unrelenting regulatory and market pressure to clean up balance sheets has left lenders little alternative.
Italy’s biggest loan recovery specialist doValue (MI:), born out of UniCredit’s spun-off debt collection unit, is set to manage the portfolio the bank is offloading, one of the sources said.
Following massive disposals since 2017 under Chief Executive Jean Pierre Mustier, UniCredit has cut its soured loan burden to just below 7% of total lending, one of the lowest in Italy but well above a European average of 3%.
UniCredit’s disposal plan was first reported by Italian daily Il Sole 24 Ore at the weekend.
UniCredit has also invited bids for a 1 billion euro portfolio of “unlikely-to-pay” corporate loans, which are not in default yet but are unlikely to be recovered in full.
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