March 7, 2019 / 6:40 AM / 2 months ago

Italy's Intesa in talks to sell 10 billion euros in impaired loans: source

MILAN (Reuters) - Italy’s biggest retail bank, Intesa Sanpaolo, is in talks to sell about 10 billion euros ($11 billion) in unlikely-to-pay property loans to a unit of U.S. fund Davidson Kempner, a source familiar with the matter said on Thursday.

Intesa’s 36.5 billion euros in soured debt accounted for 8.8 percent of total lending at the end of 2018, after the bank offloaded 10.8 billion euros in bad loans in a landmark deal with Swedish debt collection group Intrum Justitia.

The deal with Davidson Kempner would bring forward a goal to cut the impaired loan burden by another 10 billion euros in the next three years to reach a soured-loan ratio of 6 percent in 2021.

News of the talks with Davidson Kempner’s Italian debt recovery arm, Prelios, was first reported by Italian daily Il Messaggero. Intesa declined to comment.

Reporting by Valentina Za; Editing by Mark Bendeich

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