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Report: UniCredit seeks buyers for €1B unlikely-to-pay corporate loans

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Report: UniCredit seeks buyers for €1B unlikely-to-pay corporate loans

UniCredit SpA is sounding out interest from potential buyers for a portfolio of up to €1 billion in unlikely-to-pay small-ticket corporate loans and is seeking nonbinding bids by September-end, Reuters reported Aug. 21, citing a source close to the matter.

The Italian lender wants to finalize the sale of the unlikely-to-pay, or UTP, loan book, dubbed "Project Dawn," by the first half of 2020, the source said, adding that UniCredit was in search of co-investors in the portfolio.

At the end of June, the bank's impaired loans, including UTPs, amounted to €34.4 billion, of which €15.7 billion were parked in a noncore unit that UniCredit seeks to run down by 2021, the newswire noted. The lender has said it aims to bring down the soured debts held by the noncore unit to nearly €10 billion in 2019, compared to a previous target of €14.9 billion.

The news comes nearly a month after Intesa Sanpaolo SpA clinched a deal with Prelios SpA for the management of €10 billion of UTPs. The agreement marks the biggest deal involving UTPs so far, Reuters noted.

Italian peers Banca Monte dei Paschi di Siena SpA and Unione di Banche Italiane SpA have also signed deals to sell bad loans in recent months.