Non Performing Loans

Portfolio Origination

  • Sourcing of Non Performing Loans portfolios from Italian Financial Institutions focusing on portfolios not in auction;
  • Focus on sourcing from small-medium size Banks.

Portfolio Acquisition Advisory

  • Database analysis to give to the Investor an indicative valuation of the portfolio and to asses the feasibility of a portfolio sale with the seller;
  • Selection of a sub portfolio according to the Inverstor prefernces and the seller requirements to minimize
    the losses;
  • Advise and support the Investors in the the Due Diligence;
  • Advise and assist the Investors in the selection of the real estate assets valuations sample, and the RE valuation company to carry out Drive-by and/or Desk Top valuations;
  • Advise and support the Investor in the modelling, pricing and analysis of the portfolio;
  • Advise and support the Investor in the negotiation with the seller;
  • Support and assist the Investor in the negotiation of the Sale and Purchase Agreement.

Portfolio
Management

  • Advise and support the Investor in the selection of the Special Servicer;
  • Advise and assist the Investor in the Special Servicer due diligence;
  • Work with the Investor and the Servicer to implement the business plan and recovery strategies to maximise
    recoveries and minimise expenses;
  • Monitoring the performance of the portfolio.

NPL: Portfolio Sale

⇒ Origination

  • Portfolio sourcing
  • Small-medium Banks coverage
  • Partnership with professionals in local
    markets
  • Not in auctions transactions
  • Multioriginators

⇒ Portfolio Analysis

  • Database set-up
  • Portfolio assessment
  • Sub portfolio selection
  • Income statement impact analysis
  • Cover ratio impact analysis
  • Feasibility analysis

⇒ Due diligence

  • Credit samples selection
  • Asset samples selection
  • Data room management
  • Data check
  • Desk-Top Drive-by
  • Analysis of credits with bankrupt proceedings

⇒ Sale

  • Binding offer;
  • Sale and Purchase Agreement executon;
  • Servicing contract execution;

⇒ Management and Monitoring

  • Implementation of the recovery strategies;
  • Recovery monitoring;
  • Proposal of transaction analysis;
  • Monitoring of the management costs;

NPL Market

The volume of Non Performing Loans (in Italian: sofferenze) in the Italian banking system continues to grow: on December 2015 it has reached a gross amount of € 202 bln, equal to 10.5% of loans to customers, the highest percentage recorded since 1998, while the amount net of provisions decreased to 4.4% of loans to clients (PWC Report – June 2015).

The decline rate, which is the annual flow of new NPLs compared to the amount of the existing loans, has exceeded in 2014 of 4.3%, which is very high if compared to 1% in the 2008 financial crisis although slightly down compared to 2013 (source: Cerved).

The cover ratio of the Italian Non Performing Loans, which is the amount of the provisions on the gross value, even if it has increased compared with the past, at 2014 FYE is 58,6%, with significant differences between Banks.

Until the end of 2013 the sale transactions of NPLs in Italy were few for different reasons, mainly due to the gap between the bid price required by the Banks and the price offered by the Investors.


However in the past 18 months, the bid-offer spread begun to curb due to:

  • More prudent valuation policies of the assets under specific request from the Supervisory Authority.
  • Lowering of the yield curve applied by the Investors in the discount of the expected cash flows.
  • More focus and appetite of foreign specialized Investors for the assets located in Italy.

The market for the sale of Non Performing Loans portfolios demonstrated a clear increase.

Therefore in 2014 and in the 2015, various sale transactions of NPL portfolios were carried out for a total of 13,3 Bln (PWC Source).

This material has been prepared by the ARAM Capital Ltd (“ARAM”) for information purposes only. The information contained herein is confidential and is intended for use only by the intended recipient (each a “Recipient”). The material remains the property of ARAM and must be returned on request and any copies thereof destroyed.
It should not be reproduced or disclosed to any other person, without the consent of ARAM.
By reviewing this material each Recipient represents that it is a person into whose possession the material can be lawfully delivered in accordance with the laws of the jurisdiction in which the Recipient is located.
This material should not be construed as an offer or solicitation to buy or sell of Securities or any other securities, or any interest in any securities, and nothing herein should be construed as a recommendation or advice to invest in any Securities.
ARAM acts neither as an adviser to, nor owes any fiduciary duty to any Recipient. This material does not purport to identify all of the risks associated with the Transaction(s). Neither ARAM nor any of its affiliates, agents or representatives makes any representation regarding the provision of advice to any Recipient concerning the appropriate legal treatment, regulatory treatment, accounting treatment or possible tax consequences of an investment. Each Recipient of the material should make its own independent evaluation of the Transaction(s) and the risks thereof, and of the relevance and adequacy of the information in the material and should make other investigations as it deems necessary, and consult its own legal, tax, and other advisers, in order to determine whether to participate in the Transaction(s).
The material is presented on the express understanding that although the information herein is believed to be reliable, it has not been independently verified ARAM.
ARAM makes no representation or warranty (express or implied) of any nature, nor does it accept any responsibility or liability of any kind, with respect to the accuracy or completeness of any of the information or opinions in the material. However this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not lawfully be disclaimed.
This material contains certain tables and other statistical analyses (the “Statistical Information”) which have been prepared in reliance on information provided by third parties. Numerous assumptions have been used in preparing the Statistical Information, which may or may not be reflected in the material. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in any particular context, or as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. The Statistical Information should not be construed as either projections or predictions or as legal, tax, financial or accounting advice.
Any views or opinions expressed herein (including statements or forecasts) constitute the judgement of ARAM as of the date indicated. Recipients of the material should not rely on any representation or undertaking inconsistent with the above paragraphs.

ARAM CAPITAL LIMITED – GDPR COMPLIANCE STATEMENT
Who we are
We are: Aram Capital Limited. Companies House No.0826 5469. Registered Office – 1 Penywern Road, London, SW5 9TT
What we do
We assist investors derive the benefits of accessing/owning Non-Performing Loans (‘NPLs’). NPLs originate with banks. We operate as advisors and gain access to/details of NPLs from banks – and investors. We facilitate investors to access these NPLs. We also evaluate/value these NPLs for both banks and investors
What information do we gain access to?
The banks or investors will pass us information relating to NPLs in order for us to perform our task. This comprises customers’ basic details (categories available on request), and sufficient only for the purposes of executing our task, with no superfluous details included
In what capacity are we handling this data?
Under the GDPR – we are a Data Processor. This reflects our advisory/non- owner status in the business model. In this scenario – the bank or the investor is the Data Controller, as they are the ones who first receive the customers’personal data in the normal course of their business. The banks or the investors pass us the customers’ details in our specific capacity as a Data Processor. We process (use) this data under the aegis of the Controller-Processor relationship – which is defined contractually between ourselves and the banks or the investors we work with
What do we need the data for?
We need the data in order to identify and keep a track of the NPLs in question, and to reference them when communicating about them with either the banks or investors
Whom do we share the data with?
We only share this data either back with the bank from whom it originated, or the investors in the equation. The investors are in turn bound by our Terms of Business to have due regard to GDPR rules, when accessing and handling this data. The only purpose of sharing the data with the investor is for identification purposes
Rights maintained by proxy
Although we are a data Processor – we will always fully comply with any requests the Data Controller may make of us, in the course of their complying with their obligations as a Data Controller. Further – we will never take an action, nor fail to take an action, which runs against the protections afforded individuals under the GDPR