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SCI NPL Securitisation Awards: Issuer of the Year

Category: ABS NPLs

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Winner: Intesa Sanpaolo

Intesa Sanpaolo has won the Issuer of the Year category in SCI’s NPL Securitisation Awards. Intesa has confirmed its leadership in the non-performing loan space through pioneering execution and innovative solutions over the awards period.

De-risking was the first pillar of the Italian lender’s business plan, through which the Group aimed to reduce the level of gross non-performing loans as a proportion of total loans and develop and implement specific credit strategies, capable of directing the development and composition of the loan portfolio towards a risk-return profile that is recognised as optimal over the medium to long term.

At the end of the financial year 2021, Intesa Sanpaolo recorded the lowest NPL stock levels since 2007 and exceeded the reduction target of the 2018-2021 business plan in 2020. Since 2016, it has totalled over 30 deals, achieving an NPL stock reduction of approximately €43bn and a gross NPL ratio of 3.2%.

Innovative solutions include the servicing bank for short-term and revolving exposures on unlikely-to-pay securitisations, but what stood out in 2021 was Project M2. The latter was a strategic initiative for 2021 and aimed at the disposal of a UTP portfolio consisting of ex-UBI, UBI Leasing and Intesa exposures.

The gross book value, as of 30 April 2020, was approximately €2bn pertaining to Intesa and €0.04bn to UBI Leasing. The portfolio consisted of around 7,500 debtors, mainly secured - 64% secured, 32% unsecured and 4% leasing - with an average vintage of around 3.7 years.

Approximately 35% of the portfolio, or €0.7bn in gross book value terms, was made up of Intesa positions and Intesa-UBI common positions. The latter was managed by Prelios, while the remaining portion was managed internally. The structure of the deal included the transfer of medium- to long-term, short-term withdrawn banking receivables and of leasing receivables to an SPV.

Another milestone for the bank was Project Skywalker. Following the execution of the recent business combination between Intesa Sanpaolo and UBI Banca in February 2021, Intesa sold a business unit to BPER comprising a portfolio of non-performing loans equal to €0.7bn, as of February 2021. In this context, Intesa and BPER developed a strategic initiative called ‘Project Skywalker’.

The project allowed for the deconsolidation of a portfolio of bad loans through a multi-originator and multi-servicer securitisation backed by the GACS guarantee. The gross book value of the loan pool was approximately €3.1bn - €2.2bn pertaining to Intesa and €0.9bn to BPER - as of 31 May 2021. The portfolio consisted of around 9,700 debtors.

In terms of real estate value, assets linked to the loans in the portfolio represented: 44.5% residential properties, 23.9% industrial assets, 11.6% commercial assets and 7.3% hotels. The remaining 12.6% comprised a mix of office, land, ancillary units, agricultural and other assets.