Italian NPL Sector Still Has Room To Grow

  • 24 Nov 2002
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Despite a drop-off in issuance volume this year, securitization analysts and bankers say there is still room for growth in the Italian non-performing loans (NPLs) market, which is good news for banks looking to clean up their balance sheets. However, because the NPL sector has gained the reputation for experiencing many downgrades and having a lack of transparency, they say the rebound will not be immediate. "It's a sector characterized by upgrades and downgrades, but the upgrades do not seem to catch the market's attention," says William Ross, head of European securitization research at ABN AMRO.

CapItalia, the reincarnation of the former Banca di Roma, has indicated its desire to securitize NPLs and a group of Italian banks is currently in the market with an E773 million NPL deal called Palazzo. However, investors will need improved deal-specific information and transparency before NPLs begin to shed any negative image, says Ross.

There is still a sizeable amount of NPLs on Italian banks' balance sheets and securitization is a good way of dealing with those assets, says Antonio Serpico, associate analyst at Moody's Investors Service in Milan. "The Italian NPL market is not going to shrivel up and die. It is too important a tool for the Italian banking system," says Ross.

  • 24 Nov 2002

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 10,542 20 17.55
2 Bank of America Merrill Lynch (BAML) 6,103 21 10.16
3 Citi 5,130 13 8.54
4 JP Morgan 4,681 6 7.79
5 Morgan Stanley 4,137 11 6.89

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 81,261.11 236 11.54%
2 Bank of America Merrill Lynch 66,433.81 187 9.43%
3 Wells Fargo Securities 57,637.40 170 8.18%
4 JPMorgan 53,570.42 158 7.61%
5 Credit Suisse 45,349.30 117 6.44%