German lender Aareal Bank has further cut its exposure to Italian non-performing loans (NPL) by selling around €140 mln in loans and advances to investors during the month of July.
This transaction reduced the bank's Italian NPL volume to less than €500 mln, i.e. by more than half compared to mid-2019.
Aareal said that it had brought its total NPL volume down to less than €1 bn, thus reducing it by almost half within one year. The bank's NPL ratio has fallen below 4%.
This new de-risking transaction generated approximately €10 mln in expenses, which were recognised in income for the second quarter. In spite of this additional non-recurring burden on income, the group said it expected to post a slightly positive result for the second quarter. The bank will publish its quarterly results on 13 August.
CEO Hermann J. Merkens commented: 'In a time of great uncertainty on the property and capital markets, we once again managed to significantly reduce our Italian credit risk exposure, at reasonable expense.
'In the remaining course of the year, we want to continue reducing risk exposures in this manner, provided that opportunities arise which are economically viable. The successful de-risking is one of the factors that allows us to weather the current crisis.'
