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UniCredit to Review Options for Credit Unit by October

UniCredit SpA (UCG), Italy’s biggest bank, is weighing options for its UniCredit Credit Management Bank unit and will complete a review by the end of next month, Deputy General Manager Paolo Fiorentino said.

“This is an asset which is raising a lot of interest,” Fiorentino said in an interview at a conference in Milan yesterday. “We are doing an internal review that will be completed in October, when we will bring to the board a proposal to get value from this asset,” he said without elaborating.

Several investment firms have shown interest in the company, said two people with knowledge of the matter, who asked not to be identified because the plan is still under review. UniCredit may sign a partnership or sell a stake in the credit company, Il Sole 24 Ore reported in July.

“This is a strategic asset for us,” Fiorentino said.

UniCredit Credit Management Bank, which specializes in non-performing loans servicing and management, appraisal and recovery of credits, has a “triple strong” rating by Standard and Poor’s as a servicer on residential and commercial-backed securities. The unit managed 45 billion euros ($60 billion) of non-performing loans at the end of last year.

“The most probably scenario is the disposal of a stake of below 50 percent to players within the sector,” Christan Carrese, a Milan-based analyst at Intermonte SIM, wrote in a note today. “This option would allow better management of impaired loans and accelerate credit recovery timescales.”

UniCredit rose as much as 3.2 percent, and was up 2.7 percent to 4.69 euros at 11:47 a.m. in Milan, giving the company a market value of 27.2 billion euros. The Bloomberg Banks and Financial Services Index, which was down 0.5 percent today, has risen 14 percent this year, compared with UniCredits’s 26 percent increase.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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