EXCLUSIVE-Intesa tests market with bad loan sales worth up to 5-6 bln euros-sources

MILAN, Feb 1 (Reuters) – Intesa Sanpaolo is marketing a bad loan portfolio worth up to 5-6 billion euro ($6-$7 billion), two people familiar with the matter said, as Italy’s biggest bank steps up efforts to cut bad debts after buying smaller rival UBI.

Intesa Sanpaolo, which reports full-year results on Friday, is expected to update investors on its clean-up plans, as Italian banks brace for a new wave of pandemic-driven problem debts once government-support measures are lifted.

Intesa last year shook up Italy’s banking landscape by launching an unsolicited takeover bid for UBI to cement its domestic leadership.

Italian banks’ discounted valuations enabled Intesa to make a paper profit from the UBI deal of 3.3 billion euros at the end of September.

Intesa has said it will use the funds to cover integration costs and speed up disposals of non-performing loans (NPLs), in line with guidelines from supervisors.

CEO Carlo Messina told analysts when presenting nine-month results the bank would “deliver an impressive further (NPL) de-leveraging in the coming quarters.”

The portfolio of loans being marketed comprises loans originated by both Intesa and UBI, the two people said. One of them said the portfolio, which included also some leasing contracts, was divided into many sub-portfolios. A third source confirmed various loan pools were being marketed.

Intesa in December completed a 4.3 billion euro bad loan securitisation, lowering its impaired debt burden to 24.6 billion euros gross of writedowns, or 5.9% of total lending. That is just ahead of a 6% goal the bank had set under for end-2021 under its current business plan.

When factoring in the acquisition of UBI Banca, Intesa’s impaired loans stood at around 31 billion euros at the end of last year.

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