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Popolare Vicenza, Veneto Banca readying 8 bln euro bad loan sale
December 15, 2016 / 5:36 PM / 8 months ago

Popolare Vicenza, Veneto Banca readying 8 bln euro bad loan sale

MILAN, Dec 15 (Reuters) - Popolare di Vicenza and Veneto Banca are preparing to sell 8 billion euros ($8.3 billion) in bad loans, the head of credit manager Credito Fondiario said on Thursday, as the two Italian regional banks study a possible merger.

Popolare Vicenza and Veneto Banca are in merger talks after being rescued by banking industry bailout fund Atlante earlier this year.

Atlante took them over when they failed to find buyers for initial share issues needed to keep them afloat after loan losses and impairment charges burnt through their capital.

The two lenders held 8.5 billion euros in bad debts at the end of June, out of a total of 17 billion euros in doubtful loans - which represent 38 percent of their overall client loans.

Credito Fondiario CEO Panfilo Tarantelli told a press briefing the loans could be sold in the course of next year in a securitisation deal.

"On behalf of Atlante, Credito Fondiario has completed the due diligence on the loan portfolio worth around 8 billion euros," he said.

Credito Fondiario also carried out due diligence on the 28 billion euro bad loan portfolio that Monte dei Paschi di Siena is trying to offload with the help of Atlante as part of a rescue plan to avoid being wound down.

Popolare Vicenza and Veneto Banca must submit their merger plan to the European Central Bank in coming weeks outlining proposed bad loan disposals and the ensuing capital shortfall. Atlante has already pumped 2.5 billion euros into the two lenders.

Newly appointed Popolare Vicenza CEO Fabrizio Viola told reporters on the sideline of a separate event on Thursday he aimed to have the plan ready by the end of January.

Also on Thursday, consultancy PwC forecast transactions on Italian problem loans next year could total 50 billion euros in terms of gross book value as lenders in the country strive to shed problem assets that grew during a harsh recession.

Credit Fondiario, which belonged to Morgan Stanley until 2014, is a credit manager which currently services 4.7 billion euros in loans. It also has a banking licence and on Thursday launched its first savings account to broaden its funding tools.

$1 = 0.9605 euros Reporting by Valentina Za and Elisa Anzolin; Editing by Mark Potter

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