ING to sell Italian real estate lease portfolio to Goldman, says document: Reuters

Dutch bank ING Groep NV (INGA.AS) plans to sell its remaining Italian real estate leasing portfolio to Goldman Sachs (GS.N) as it continues to cut leasing activities outside its home markets, a document reviewed by Reuters showed.

A letter ING sent to unions in Italy said the group expected to sign the deal by early December and close it in the first quarter of next year.

The portfolio comprises both performing and non-performing real estate leasing contracts, ING said, adding that the disposal would make 31 people in Italy redundant and inviting unions to discuss possible measures to reduce staff.

ING said it had picked Goldman, which is partnering with Italy’s Finanziaria Internazionale (FinInt), after evaluating a number of offers by various credit management specialists.

Also in tandem with FinInt, Goldman in November last year bought an Italian performing lease portfolio worth 483 million euros ($548.83 million), the first such deal in Italy following changes to the law that have made it possible to transfer lease contracts as part of securitization deals.

ING, Goldman and FinInt all declined to comment.

“The long maturity of real estate leasing contracts … means their financial risk is particularly high and makes it difficult to take actions to lower it, creating uncertainty over future results at ING Bank NV,” the letter said.
In 2006, ING said its Italian leasing operations had a portfolio of 2.5 billion euros and were the best-performing among ING’s lease subsidiaries, with high margins and low risk.

By 2013 the bank had sold several lease portfolios and put the remainder, including the Italian business, in run-off so they could be “wound down in a controlled manner.”

ING said in its 2017 financial report that rising risk costs related to the Italian lease run-off portfolio had contributed to a sharp drop in its underlying pre-tax result at its “bank treasury and other” division.