1. Vienna, June 2-3, 2015
Workout & Restructuring 2015
Restructuring an Adriatic bank:
Lessons learned at PROBANKA
2. - Short overview of the NPL situation in a Slovenian
banking system
- Restructuring plan for a mid-size bank / State and
EU support
- Strategic options to create additional value
Contents
2
4. - The proportion of non-performing claims accounted
for by SMEs was up in year 2014 to stand at 39%
of total non-performing claims against corporates.
- Activity in corporate restructuring and the adoption
of measures to further reduce non-performing
claims at the banks could significantly contribute to
the management of credit risk and an improvement
in the quality of bank investments.
- Can Probanka with its service and work-out
experience speed up the process of NPL
resolution? What do investors need?
Non-performing loans in Slovenia
4
5. - Net book value - market value gap
- Additional embedded losses? Really?
- Sale or?
- Innovative approach / deleverage techniques
- Spread losses / profits over years
- Independent servicing / asset management
platform?
- Private vs. government backed solution: state aid
rules
Distressed debt investor perspective
4
6. - Special administration on September 6th 2013
- To ensure financial stability of banking sector
- Operating with full banking license
- Recapitalization by Rep. of Slovenia in Dec. 2013
- Orderly wind down till end of 2016 under EC
supervision according to the approved plan
Special measures in Probanka
5
7. - Restructuring (business) plan: commitments,
restrictions
- EC and DG Comp compliant
- Liquidity and solvency, capital buffer
- Pricing policy
- Credit portfolio: restructuring principles, burden
sharing
Role of EC and Republic of Slovenia
6
8. - Assets (PL & NPL) run down: 50% reduction, no
time pressure, price maximization
- Redundancy plan: 50% reduction, no litigations
- Income generating operations
- Ensure positive cash flow and operating profit
- Corporate restructuring – London approach,
additional capital needed
- Portfolio deterioration, capital requirements
- Service excellence, professional and dedicated staff
Lessons learned
7
9. - Continue with the wind down plan
- Operating with full banking license, meeting milestones and
commitments, further assets sales and layoffs, operating loss due
to reduction in income generating assets and high interest
liabilities, work-out and restructuring, enforcement procedures
- Create additional value for taxpayers
- Experience in work-out and restructuring, service provider to BAMC
portfolio (IT, back-office, accounting, reporting)
- Split-up to servicing / asset management co. and legacy bank
- Revoking license earlier, sell new co. and create income for the
State, merge legacy bank with BAMC or another state institution
- Establish restructuring fund/platform financed by private capital
Strategic options
7
10. - Create an entry point for foreign / private capital
- Fragmented loan market - aggregation on corporate
level
- Economy of scale / NPL consolidation / to attract
investors
- Efficient financial and operational restructuring
- Fresh capital to corporates
- Employment stability improvement
Strategic options
8
