kpmg global - in the market · 2020-06-22 · highlights (cont.) global banking m&a trends 2018 the...

In the Market May 2018

Introduction

Welcome to May’s In the Market, which can be found online alongside previous editions here.

This month we analyze the top M&A trends across the global banking industry and review the acquisition of Virgin Money by CYBG which will create the largest British challenger bank. Also in the UK, an investor group led by Barclays acquired a £5.3bn portfolio from UKAR, consisting of loans originated by the now defunct Bradford & Bingley.

May continues to be a busy month for banking M&A activity in Italy, as Banca IFIS acquired servicer FBS and Spaxs announced a deal to acquire Banca Interprovinciale. Italian banks continue their deleveraging operations with Creval’s NPL ratio falling below 20% for the first time since 2013, UniCredit’s large UTP portfolio in the pipeline, and Banca Popolare di Bari securitizing its NPL portfolio via GACS.

Elsewhere, NPL sales continue at pace on the Iberian Peninsula with Sareb launching a €30 billion property-backed NPL portfolio and LX Partners acquiring a €500 million Portuguese portfolio. The Irish loan sale market also saw the successful sale of Project Redwood by AIB to Everyday DAC and Lloyds confirmed the sale of a performing residential loan portfolio in Ireland with an unpaid balance in excess of €4 billion.

Our European Banking Transaction Tracker has been updated and can be found here.

As always our previous editions can be found here.

Best regards,

Andrew and Nick

Andrew Jenke T: +44 (0)20 7311 8151 E: [email protected]

Nick Colman T: +44 (0)20 7311 8150 E: [email protected]

Highlights

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Accelerated growth expected in the UK equity release mortgage market

The equity release mortgage market has seen substantial growth with further growth expected. KPMG analyses how the recent changes in the regulation of Retirement Interest-Only mortgages by the FCA will affect the market, and other regulation prospects for equity release products.

Please click here to find out more.

For more information, please contact Alexandra Skeggs

https://home.kpmg.com/uk/en/home/insights/2017/01/banking-deal-advisory-newsletter.htmlhttps://www.kpmg.com/uk/bankingtrackerhttp://www.kpmg.com/uk/banking-deal-advisory-newslettermailto:[email protected]:[email protected]?subject=In%20the%20Market%20|%20August%202017https://home.kpmg.com/uk/en/home/insights/2018/05/accelerated-growth-expected-in-the-uk-equity-release-mortgage-market.htmlmailto:[email protected]?subject=In%20the%20Markethttp://www.kpmg.com/uk/bankingtrackerhttp://www.kpmg.com/uk/bankingtrackerhttp://www.kpmg.com/uk/banking-deal-advisory-newsletterhttp://www.kpmg.com/uk/banking-deal-advisory-newslettermailto:[email protected]:[email protected]

Highlights (cont.)

Global banking M&A trends 2018

The global banking M&A market demonstrated continued resilience in 2017, with deal volume remaining relatively stable compared to 2016. KPMG has recently released

Continuing to climb – an annual analysis of top 10 M&A trends in the industry in 2018.


For more information, please contact Stuart Robertson.

2018 Global CEO Outlook Survey 2018: UK

KPMG has launched the fourth annual Global CEO Outlook report. The study canvasses the views of 1,300 CEOs globally, including 150 from the UK

and their opinions on the most pressing challenges they face in today’s macro environment and the main opportunities centered around Growth headwinds and Digital transformation.


For more information, please contact Sanjay Thakkar.

Staying ahead of cyber crime

In the UK financial sector, cyber security is now only second to political risk as one of the key challenges facing the industry. As crime, extortion, blackmail and fraud move online, cybercrime has become

big business, with its global impact exceeding $450 billion a year. KPMG launched a joint report with UK Finance to explore how greater cooperation both within businesses and between firms, law enforcement and government is central to tackling the growing threat of cybercrime.


For more information, please contact David Ferbrache.

EBA publishes Draft Guidelines on Disclosure of Non-Performing and Forborne Exposures

On 27 April 2018, the European Banking Authority (EBA) published a Consultation Paper on Guidelines on Disclosure of Non-Performing and

Forborne Exposures (Consultation paper can be found here). The draft guidelines seek to reduce information asymmetry and promote comparability of credit institutions’ risk profile and market discipline, via the specification of a uniform disclosure formats for banks on information about NPEs, forborne exposures and foreclosed assets.

For more information, please contact Eric Cloutier

Key banking M&A activity

CYBG makes preliminary offer to acquire Virgin Money

Virgin Money has received an all-share takeover proposal from CYBG for a consideration of £1.6 billion. CYBG proposed to swap 1.1297 new CYBG shares for each Virgin Money share.

The merger would create the UK’s largest challenger bank with six million personal and business customers.

For more information, please contact Andrew Jenke and Arun Sharma

FBS acquired by Banca IFIS

Banca IFIS has acquired 90% of shares of FBS, the fourth largest servicer in Italy, for €58.5 million. The deal enables Banca IFIS to provide comprehensive range of solutions for

all asset classes in the NPL market. As part of the deal, Banca IFIS will also take over a portfolio of NPLs with balance over €1.28 billion.

For more information, please contact Domenico Torini and Carlo Savani

Spaxs announces plan to acquire Banca Interprovinciale

Spaxs, the Italian special purpose acquisition company, has agreed to purchase a 98.3% stake of Banca Interprovinciale. Banca Interprovinciale, founded in 2009,

has total assets of €1 billion and targets SMEs. Spaxs will pay a total consideration of €55 million for the transaction, €44.2 million through cash and the remaining €10.8 million through share issuance.

For more information, please contact Domenico Torini and Carlo Savani

. Ringkjobing Landbobank to merge with Nordjyske Bank

Ringkjobing Landbobank and Nordjyske Bank, two listed lenders in Denmark, have announced a merger agreement. The former bank will be the surviving company. Shareholders

of Nordjyske Bank will receive one Ringkjobing Landbobank share for every two shares plus DKK 18 in cash. The merger will create a stronger bank in the North Jutland region.

For more information, please contact Andrew Jenke


mailto:[email protected]://home.kpmg.com/xx/en/home/insights/2018/04/2018-global-banking-m-and-a-trends.htmlmailto:[email protected]?subject=In%20the%20Markethttps://assets.kpmg.com/content/dam/kpmg/uk/pdf/2018/05/KPMG-CEO-Outlook-2018-UK.pdf?gclid=CjwKCAjwxZnYBRAVEiwANMTRX8PC0mO7HHigWgVwzxdNiT-boO5QYyBFyc2ko_jfN0OBSJV7XG3qaRoC6OUQAvD_BwEmailto:[email protected]://home.kpmg.com/uk/en/home/insights/2018/04/staying-ahead-of-cyber-crime.htmlmailto:[email protected]?subject=In%20the%20Markethttp://www.eba.europa.eu/documents/10180/2200407/Consultation+Paper+on+Guidelines+on+disclosure+of+non-performing+and+forborne+exposures+(EBA-CP-2018-06).pdfmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]:[email protected]:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Market

Key securitization activity

Banco BPM to sell a €5 billion NPL portfolio via securitization

Banco BPM has confirmed that it is planning to dispose a €5 billion NPL portfolio via securitization by June this year. It is reported that there are

10-15 investors interested in acquiring the mezzanine and junior tranches. The sale is named as Project Exodus.

For more information, please contact Fabrizio Sicilia and Alexandra Skeggs.

Banca Popolare di Bari leads cooperative banks in GACS securitization

A group of 11 cooperative banks led by Banca Popolare di Bari is undertaking the securitization of a €1.5 billion

NPL portfolio via GACS, the Italian state’s guarantee scheme. A large part of the portfolio is secured against residential property.


Funding Circle’s ABS transaction oversubscribed

Funding Circle’s second ABS transaction, SBOLT 2018-1, was oversubscribed for all tranches. Deutsche Bank priced the A notes at

1ML + 75bps. The notes are backed by over 4,000 loans with an average seasoning of 8.6 months and an average remaining term of 44.7 months. Average interest rate of these loans is just over 10%.


Portfolio activity

AIB Group Plc confirms successful sale of Project Redwood loan portfolio

AIB has confirmed the sale of non-performing loan portfolio to a consortium including Everday Finance

DAC and Cerberus Capital Management. The portfolio consisted of loans secured by both residential buy-to-let and commercial real estate assets with the majority based in Ireland. The portfolio contained over 800 customer connections and 3,700 assets and follows on from the successful sale of Project Pine in December 2017.

For more information, please contact Andrew Jenke and Michael O’Sullivan.

Portfolio activity (cont.)

Sareb to launch the sale of a €30 billion NPL portfolio

Sareb, the Spanish bad bank, has appointed a financial advisor to sell a property-backed NPL portfolio worth €30 billion. The portfolio is currently

managed by Haya Real Estate, whose contract will expire in June 2019. With other major sales in the pipeline, Sareb is accelerating its de-risking process.

For more information, please contact Carlos Rubi and Andrew Jenke.

UK Asset Resolution sells mortgage portfolios

An investor group led by Barclays has acquired approximately 45,000 mortgages from Bradford & Bingley, part of UK Asset Resolution, for

£5.3 billion. The purchase is composed of two separate portfolios of buy-to-let and residential owner-occupied mortgages. Following the completion of the deal, the £15.65 billion loan from Financial Services Compensation Scheme to Bradford & Bingley at the height of the financial crisis have been fully repaid.

For more information, please contact Andrew Jenke and Arun Sharma.

Lloyds announces the sale of residential mortgage portfolio to Barclays

Lloyds have agreed to sell its Irish residential mortgage portfolio (Gross balance: £4.3 million) to Barclays for

cash consideration of approximately £4 billion. The portfolio is substantially performing, with just €0.3 billion impaired. The portfolio is well seasoned, but low-yielding ECB trackers, consisting of both home-owner and buy-to-let mortgages. The transaction further demonstrates the international appetite for performing Irish residential mortgage debt, following Danske Bank’s Proteus portfolio sale in December 2017.

Once the deal is completed, it is expected that Barclays will securitize the portfolio to allow for onward sell to investors.

For more information, please contact Andrew Jenke and Michael O’Sullivan.

UniCredit preparing the sale of an UTP portfolio

UniCredit is to launch the sale of a €3 billion real-estate UTP portfolio. This disposal is similar to Project Sandokan, which UniCredit completed in 2016.

The Italian bank would prefer to engage with a small number of interested bidders rather than to launch a full-scale auction process.

For more information, please contact Domenico Torini and Carlo Savani.


mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]?subject=In%20the%20Marketmailto:Michael.O'[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:Michael.O'[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Marketmailto:[email protected]?subject=In%20the%20Market

Portfolio activity (cont.)

Ulster Bank launches auction of a NPL mortgage portfolio

Ulster Bank, a subsidiary of Royal Bank of Scotland, has put a €1.6 billion mortgage portfolio to the market. Dubbed as Project Scariff,

the portfolio is split between €900 million worth of residential mortgage loans and €700 million worth of buy-to-let mortgages. The portfolio makes up about one third of Ulster Bank’s NPLs. As reported, the sale is expected to complete within next six months.

For more information, please contact Andrew Jenke and Brian Shefflin.

Permanent TSB plans to refinance €900 million of split mortgages

Permanent TSB has decided to withdraw €900 million of split mortgages from the Project Glas, a large NPL portfolio sale launched in

February. As reported, the bank prefers to deal with these mortgages via off-balance sheet residential mortgage-based securitization. Following the withdrawal, Project Glas now consists of €2.2 billion loans representing around 11,200 properties.

For more information, please contact Andrew Jenke and Brian Shefflin.

LX Partners wins Project Crown

LX Partners acquires a €500 million secured NPL portfolio from Millennium bcp. Known as Project Crown, the deal is one of the largest sales of secured NPL portfolios in

Portugal. Millennium bcp plans to reduce non-performing exposures by €1 billion each year.

For more information, please contact Rodrigo Lourenco and Arun Sharma.

Credito Fondiario acquires secured NPL portfolio from Creval

Creval reached an agreement with Credito Fondiario for the sale of a secured NPL portfolio with a gross

balance of €222 million. The portfolio consists of credit exposures, mostly to real estate companies. In Q1 2018, Creval’s NPL ratio decreased to 19.3%, the lowest percentage since December 2013.

For more information, please contact Domenico Torini and Carlo Savani.

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kpmg global - in the market · 2020-06-22 · highlights (cont.) global banking m&a trends 2018 the...

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