It is counting on Prelios technology to develop business on the UTP front. On the one hand, therefore, it is thinking of targeted m&a among data providers and, on the other, it has expanded the operations of the fintech platform BlinkS, hitherto a marketplace for NPLs, to include receivables from companies in difficulty and factoring for companies in special situations. The invoice trading business was launched under the radar last November 2022, but Gabriella Breno, CEO of Blinks, believes it has great potential for development:
"During the course of 2023 we assume that we will be managing between 350 and 400 million euro of commercial invoices on the Blinks Invoice Trading platform. In particular, the non-recourse assignment of performing trade receivables with Blinks Invoice Trading will then be flanked by the non-recourse assignment of outstanding trade receivables with Blinks Commercial Credit'.
The Prelios group is thus entering specialty financing with the aim of supporting the many companies whose receivables are currently classified by banks as Stage 2, i.e. performing receivables that show signs of increased risk. Breno continues: 'Based on our experience and continuous contacts with banks and companies, risk situations often arise from financial tensions that are sometimes absolutely temporary or from companies' difficulties in collecting their receivables. This is why we have extended the operations of BlinkS'.
"It is necessary to intervene as soon as possible on potential impaired positions, such as Stage 2s, before they turn into situations that are difficult to manage," Riccardo Serrini, ceo of the Prelios group, Italy's leading manager of real estate contribution funds through its sgr, but also servicer of real estate-guaranteed impaired loans through Prelios Credit Servicing, which boasted a portfolio under management of €30.5 billion in mid-2022, confirms to BeBeez Magazine. Of this total, no less than 9.5 are UTPs, making Prelios a leader in the sector, which is therefore at the forefront in absorbing all the new loans expected to come onto the market: 'We expect the flow of new impaired positions, especially UTPs, to increase greatly over the next few years, reaching around EUR 90 billion. The effects of the economic situation on credit are being felt with a delay of about 24 months. Those of the pandemic are beginning to be seen now, with Stage 2 loans amounting to some EUR 220 billion in December 2022, or 13-14% of total loans,' says Serrini and adds: 'In large corporations, the default rate is traditionally low. The bulk of impaired loans are expected from small companies. This means granular portfolios, on which Prelios is well positioned thanks to its partnerships with Unicredit and Intesa Sanpaolo on NPL and UTP servicing. However, managing so many small positions on so many still-living companies is not easy. It requires heavy investment in technology. That is why the targets of our next acquisitions will be data providers'.
Words that make the possible purchase of Prelios, now controlled by Davidson Kempner, by ION Investments, Andrea Pignataro's group specialising in financial and credit data management, which among other things owns Cedacri and Cerved, which in addition to being a data provider is also a credit servicer almost identical in size to Prelios, very interesting. ION is currently conducting exclusive due diligence on Prelios and the deal is expected to be signed in mid-March.
