August it has always been an atypical month for the economy, characterized by a great seasonalitydue to the closure of commercial activities in large cities for the summer holidays. It is also for the Non-Performing Loans market o bad debtswho recorded a massive reduction in the summer period due to seasonality, i.e. the closure of the Courts for holidays and commercial activities. This is what emerges from a report by Scope Ratings the European rating agency, entitled “Italian NPL collection: seasonality drives August volumes”.
August numbers
The NPL collections I’m in August decreased by 54% compared to July, marking the level lowest since 2020. A similar trend was observed in previous years, but to a lesser extent (-35% in 2023 and -38% in 2022). The August collection was also down by 45% compared to the average for the same month in b.
THE proceeds from judicial proceedings they have in fact led themselves to 41 million euros from the previous 64 million, due to the limited activity of the courts. Also the proceeds from out-of-court agreements (DPO) and sales of credit notes I am decreased of 13 million and 8 million euros respectively compared to the previous month.
The factors that influence the trend
The factors that contribute to the decline include a strong reduction in receipts resulting from judicial strategies. August – explain Scope Ratings analysts – is the peak summer holiday period in Italy. Commercial activities see a substantial slowdown and i courts deal only with urgent cases.
The first half of the year was also negative
Him too collections from NPLs for the first half of 2024 they were results down 20% compared to at the same periods of 2022 and 2023. The decline was driven by out-of-court proceedings (-90 million euros, or 28%) and sales of notes (-66 million euros, 62%). Judicial proceedings, however, remained essentially almost stable (-17 million euros, 3%).
As of June 2024, the receipts are increased by 23% on a monthly basis reaching i 255 million euros, but this value was 31% lower than the June average of the last two years.
NPLs in Italy lower than in the EU
From the 2024 edition of NPL Meeting of Banca Ifis a emerges increase in the stock of NPEs (NPL exposures) at European levelin contrast to what happens on the Italian marketwhere instead decreases. At a European level, the overall stock of problem loans grows by 16 billion, a modest but nevertheless appreciable increase. Italy going against the trend drops by another 5 billion.
A trend that is attributed to two drivers: the lower unemployment of expectations in Italy; The cost of money dropped more than expected which helps businesses repay debts. Hence a forecast for the next few years characterized by a risk of a minor increase in problem loans.
