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Legal & Real Estate// ISSUE: TOP IBERIAN Investors
80 // iberian.propery / 2016
Ultimately, the models are not fixed and hybrid approaches can always
be implemented. The Italian approach is an example of this.
The Atlante Fund is, formally, an Italian private equity fund created in April
2016, being advertised by the Italian Minister of Finance as “an entirely
private operation”, which was specifically designed not to fall under the
state aid umbrella framework.
This SPV is, currently, a fund of around EUR 5 billion, whichwill be used to:
(i) Purchase NPL from the Italian banks – at nonmarket price, probably
somewhere between what the market is offering (around 20% of
nominal value) and the book value of these loans (around 40% of
nominal value) 11; and
(ii) Subscribe the upcoming capital increases of Italian banks seeking
recapitalizations.
3. WILL THERE BE A PORTUGUESE ASSET SUPPORT
SCHEME?
In view of the above, the Portuguese government has recently created a
working group to study the model that would better fit the specificities of
the Portuguese banking market. At this point, we do not knowwhich type
of asset support schemes (if any) would be implemented in Portugal and
to or through which the existing large stocks of impaired assets currently
tainting the Portuguese banks’ balance sheets would be transferred.
However, when asked about this matter during an interview, the Portu-
guese prime minister answered: «A bad bank will not be created». Hewent
on to suggest that «It will be neither a bank, nor bad. It will be a positive
mechanism for the economy. The issue goes beyond solving a bank’s bal-
ance, it is more than that: it is also about solving the companies’ balance».
A troubled real estate asset relief programme is on the cards in Portugal.
The policy-makers may decide to implement a scheme that contributes to
safeguarding the financial stability and containing the impact of possible
asset support measures on the national treasury and public finance.
1 EUROPEAN BANKING AUTHORITY, Report on the dynamics and drivers of non‐
performing exposures in the EU banking sector (22 July 2016):
europa.eu/documents/10180/1360107/EBA+Report+on+NPLs.pdf
2 EUROPEAN BANKING AUTHORITY, Report on the dynamics and drivers of non‐
performing exposures in the EU banking sector (22 July 2016), pp. 34.
3 EUROPEAN CENTRAL BANK, Guidance to banks on non-performing loans (March
2017), pp. 33:
on_npl.en.pdf
4 GABRIEL BRENNA / THOMAS POPPENSIEKER / SEBASTIAN SCHNEIDER,
Understanding the bad bank:
understanding_the_bad_bank.
5 MARIA MALLORY, Rich Bank, Poor Bank: Mellon's Surprise Success (9 March 1992):
mellons-surprise-success.
6 MARIADEMERTZIS /ALEXLEHMANN,Tackling Europe’s crisis legacy: a comprehensive
strategy for bad loans and debt restructuring Policy Contribution. Issue no. 11 | 2017:
7 Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014
establishing a framework for the recovery and resolution of credit institutions and
investment firms.
8 ECB, Guiding Principles for Bank Asset Support Schemes (25 February 2009): https://
pdf?af7d4a20c7e77edbf3d1c6f77c362133.
9 GABRIEL BRENNA / THOMAS POPPENSIEKER / SEBASTIAN SCHNEIDER,
Understanding the bad bank:
understanding_the_bad_bank.
10 MARIADEMERTZIS /ALEXLEHMANN,Tackling Europe’s crisis legacy: a comprehensive
strategy for bad loans and debt restructuring Policy Contribution. Issue no. 11 | 2017:
11 BOCCONI STUDENTS INVESTMENT CLUB, Atlante Fund: evolution of the Italian
Banking crisis (February 2016).