Intesa Sanpaolo Is Said to Be Readying Non-Performing Loan Sale

(Bloomberg) -- Intesa Sanpaolo SpA is preparing a sale of non-performing loans from a 15.6 billion-euro ($17.8 billion) pool of debt on its books categorized as “unlikely-to-pay,” according to four people familiar with the discussions.

The loans are backed by real-estate and corporate assets, said the people, asking not to be identified because the information isn’t public. The Italian lender has yet to decide how much of the debt it will sell and is still consulting investors to gauge demand, the people said. The sale may include a single package with a face value of around 2 billion euros, two of the people said.

A spokesman at Intesa Sanpaolo in Milan declined to comment on the sale.

Unlikely-to-pay exposure is a sub-category of NPLs, defined by regulators as relating to borrowers that continue to operate as going concerns, as opposed to “bad loans” which refers to insolvent debtors.

Intesa is seeking to clean up its balance sheet by reducing its stock of NPLs to 6 percent of the total on its books in 2021, from 9.2 percent reported in the third quarter of last year. It held 15.6 billion euros of gross unlikely-to-pay exposures as of the end of September, according to an earnings presentation.

Read More: Intesa Sanpaolo Makes One of Italy’s Biggest Loan Disposals

Chief Executive Officer Carlo Messina said he wants to speed up the process.

“On the occasion of the next quarter’s results, we will make some announcement on the acceleration of our plan,” he said in an interview with Bloomberg Television at the World Economic Forum in Davos on Wednesday.

To contact the reporters on this story: Antonio Vanuzzo in London at avanuzzo@bloomberg.net;Sonia Sirletti in Milan at ssirletti@bloomberg.net;Luca Casiraghi in London at lcasiraghi@bloomberg.net

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Chris Vellacott, Abigail Moses

©2019 Bloomberg L.P.