Cernobbio (Como), 24 September 2021 – The anti-crisis measures have limited the impact of non-performing loans on Italian bank financial statements: an impact that will be manageable thanks to the greater efficiency of the Italian banking system and the development of the NPL market and servicing industry. This is what is seen from the Banca Ifis Market Watch NPL disclosed this morning during the “Recovery Builders”, the tenth edition of the NPL Meeting held in Villa Erba, Cernobbio. The report forecasts that in 2021, Italy will achieve an NPE ratio (ratio of non-performing loans to total loans) of just under 5% and this will rise slightly to 5,9% in 2023.
These numbers just go to show the resilience of the Italian financial sector: according to the Market Watch NPL, the new flows of NPLs – 41 billion Euro in 2022 and 32 billion Euro in 2023 – will be far below the 71 billion Euro recorded in 2013 alone, both in absolute and percentage terms. The main difference, as compared with the previous crises, are the expansive monetary policies of the central banks and the joint government interventions. In Italy, the current moratoriums on loans, the block to dismissals and the guaranteed loans have avoided a possible credit crunch (loans, particularly to businesses, have been showing a recovery since the early months of 2020) and have delayed the emerging of NPLs, which should grow as the incentives cease.
In 2022, with the end of the moratoriums, the default rate, i.e. the ratio of new non-performing positions and the stock of loans granted, should come to 3%, up on the 1,4% of 2021 but in any case a far cry from the 4,5% booked in 2013. In 2022, it is forecast that the stock of UtPs will exceed that of NPLs. In addition, according to the forecasts of the Market Watch NPL, in 2023, 75% of the stock of Italian NPEs (317 billion Euro out of a total of 430 billion Euro) will have left the banks’ financial statements and transferred to those of investors.
“What we are disclosing today is the 14th Market Watch NPL, a key document that clarifies how, in this sector, in the last ten years, volumes, dynamics and protagonists have changed drastically” – said the Deputy Chairman of Banca Ifis, Ernesto Fürstenberg Fassio in his opening address -. Ethics, sustainability and transparency underlie our work and it is important to continue to pursue this activity, which generates economy and new employment in the country and can contribute towards the recovery”.
“The government and institutions have adopted extraordinarily effective measures in leading the country out of the economic crisis. “The Market Watch NPL data confirms this, reporting a flow of non-performing loans that is not only below the volumes of the previous crises, but also less than the 2020 forecasts” – clarified Frederik Geertman, Chief Executive Officer of Banca Ifis. “The impact on the banks’ financial statements will be manageable thanks to the derisking applied by the institutes and the presence of the NPL investment and servicing industry, which has specialised through the investment in competences and technologies. Today, these players can absorb non-performing loans effectively and efficiently and lead the way in the recovery. There are also few industries that can boast a growth in profitability and employment as the NPL Industry. The challenge is to equip ourselves with increasingly effective tools aimed at assuring the active, sustainable and professional management of non-performing loans”.
The tenth edition of the Banca Ifis NPL Meeting was attended by approximately 300 guests in person and a thousand in a streamed connection. From 2012 to date, the NPL Meeting has grown constantly: over the ten years, from the very first edition held in Villa Fürstenberg, Mestre, there have been more than 6.000 attendees in person and streamed, more than 150 Italian and international speakers and an extremely high satisfaction level.
During the morning, after the opening address by the Deputy Chairman of Banca Ifis, Ernesto Fürstenberg Fassio and an address by the Bank’s Chief Executive Officer, Frederik Geertman, economist and professor emeritus of the Paris Institut d’Etudes Politiques, Jean Paul Fitoussi laid out the guidelines to the international recovery, particularly discussing the effectiveness of the relaunch plan and investments for enterprises and families. Thereafter, the addresses by the Chairman of the Finance Commission at the Chamber, Luigi Marattin on the Italian national recovery and resilience plan (PNRR), amidst reactions, critical issues and decisive action for the country’s competitiveness, by Ida Mercanti, Head of the Banking Supervision Service 1 of the Bank of Italy with a system view on the increased credit risk, its measurement and evaluation liaising with the ECB for supervisory activities and by Massimo Fabiani, Full Professor at the University of Molise, focussing on the topic of the timing of justice and the impact on collecting non-performing loans.
There are two round tables scheduled. The first, entitled Government guarantees and loans: banks put to the post-Covid test brought Bernardo Mattarella, CEO of Mediocredito Centrale to the stage, along with two representatives of some of the most important Italian banks: Raffaello Ruggieri CLO of Intesa Sanpaolo and Aurelio Maccario Head of Group Credit Risk of UniCredit. Marina Natale, CEO of AMCO, Anders Engdahl, CEO of Intrum Group, and Francesco Buffi, Director of CarVal, took part in the discussion Investing in non-performing loans in Italy, what to expect in the new scenario.