September 30th marked the start of debt restructuring season after the EBA’s decision do not extend the possibility of not classifying moratorium loans as impaired. It is likely that consequences will occur gradually at the end of the ongoing benefits and after 90 days for the classification of the credit as non-performing. We believe that the main topic in restructuring is the way of managing NPE and also the role and support that all economic operators will provide. Indeed, a framework, in which some economic players are assuming the role of aggregator of NPE positions held by banks, is going outlined. Taking into account the recent operations, a concentration of the market emerges, with few operators, including Amco and Prelios, willing to deal with sizable portfolios of NPE. These operators should develop a secondary market, especially in the UTP segment, which is expected to represent 30% of NPL transactions in 2021. Disposals on the secondary market will be mainly relate to unsecured or UTP credits, whose management requires a specialized financial and management know-how. Credit transfer it’s essential for timely management of the corporate crisis.
Given the sharp decline in consumption, the current crisis appears mainly to be economic as well as financial, leading to the need of managerial support through investment for company turnaround and the resolution of financial difficulties. An important contribution could originate from the resources that will be provided by the Recovery Fund and “Patrimonio Destinato” (Assigned Assets) CDP.
In order to realize a dynamic impaired credit system, must be considered that operators such as banks, funds and servicers require an adequate return on investment which depends on the business resilience, business management and consequently from any changes in governance. Therefore, avoiding to suffer choices by other operators, entrepreneurs and management should analyze the market to evaluate the most suitable operator to achieve the turnaround of their company, also sharing the governance scheme with it.