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Italy's AMCO ready to process Stage 2 loans

By Reuters

MILAN – Italy’s state-owned bad loan manager AMCO said on Friday it was ready to process performing loans that might turn sour, known as Stage 2 loans, opening the way to a possible involvement in the sale of troubled lender Monte dei Paschi to UniCredit.

AMCO has finalised the organisational set-up to carry out synthetic securitisation transactions on performing loans qualified as ‘Stage 2′ (sub-investment grade), thus opening up further business prospects,” the company said as it announced its first-half results.

Last week AMCO was granted access to problem loan data of Monte dei Paschi (MPS) as the process to sell the bank to biggest rival UniCredit moved ahead.

UniCredit has previously said it will not take on any impaired loans of its rival.

Sources said AMCO could take on MPS‘ 4.2 billion euros ($4.96 billion) in bad loans and a part of its 15 billion euros in Stage 2 loans, adding synthetic securitisation could be a way to manage the latter.

On Friday AMCO said first-half net profit jumped to 36.5 million euros from 7 million euros in the same period last year driven by a jump in revenue and collections.

($1 = 0.8462 euros)