Monte dei Paschi ends debt collection deal to sell 3 billion euros in bad loans
MILAN (Reuters) - Monte dei Paschi di Siena (BMPS.MI) said on Sunday it had been forced to end early a 10-year bad loan management contract so that it could have more freedom in selling off bad debts in a worsening economic environment.
Monte dei Paschi had closed a year ago the sale of its bad loan management unit, dubbed Juliet, to asset manager Quaestio Holding and credit manager Cerved (CERV.MI), signing a 10-year contract under which it paid fees for debt collection services.
The bank said in a statement on Sunday it would pay 40 million euros as an early-termination penalty for ending the contract and then work with Juliet to pick loans to sell for up to 3 billion euros.
“The revision of the accords is aimed at the reduction of risk parameters in the context of a significant worsening of economic conditions in recent months,” it said.
Monte dei Paschi said the penalty was fully offset by lower debt servicing fees in the years ahead.
https://www.reuters.com/article/us-eurozone-banks-monte-dei-paschi/monte-dei-paschi-ends-debt-collection-deal-to-sell-3-billion-euros-in-bad-loans-idUSKCN1TV0UU?
see here
Banca Monte dei Paschi to Sell $1.3 Billion of Bad Loans
Banca Monte dei Paschi di Siena SpA is close to selling bad loans with a face value of more than 1.1 billion euros ($1.3 billion) to Cerberus Capital Management, Bank of America Corp. and Illimity Bank SpA, people familiar with the matter said.
The Italian bank is in final talks with Cerberus to sell a package of non-performing loans backed by real estate with a gross book value of about 500 million euros, the people said, asking not to be identified because the process is private. Bank of America is wrapping up talks to buy about 130 million euros of secured bad loans and Illimity is discussing the purchase of more than 500 million euros of unsecured corporate loans, the people said.
Italian banks have cut non-performing loans to about 189 billion euros at the end of last year from a peak of more than 360 million euros in 2016. That’s still the biggest debt pile among European Union countries and means the ECB will continue to push banks including Paschi to accelerate their cleanups and increase coverage levels against loan losses.
Last year, Paschi closed a 24.1 billion-euro securitization of NPLs, the biggest disposal of European sourced debt to date.
https://finance.yahoo.com/news/banca-monte-dei-paschi-sell-082723723.html