Italy: Rise in bad loans imminent

Milan, Frankfurt When Riccardo Serrini looks out of his office, he sees the Milan skyline: the green residential towers next to the Unicredit bank tower, one of his biggest customers. But as glamorous as the view is, Serrini prefers to compare the business of his company Prelios with a hospital. “We are the ER, the companies are our patients. Some come to the intensive care unit, with the others we only talk about the pathology.”

Prelios buys non-performing loans from banks. It’s a service that has grown tremendously in Italy after the financial crisis. Today, Prelios manages more than 41 billion euros in assets. Eleven billion of these can be attributed to the “Unlikely to Pay” (UTP) area, i.e. the “intensive care unit” Serrini is talking about. 22 billion euros are “non-performing loans” (NPL), interest and/or repayment are no longer serviced, the “pathology”.