Presentation of BAMC: Operations and Plans

Transcription

1 Presentation of : Operations and Plans Tuesday, May 13, 2014

2 Meet the chief executive officer of Previous CEO in Reverta, a Latvian company and one of the leading management companies of non-performing assets on the Baltic market Diploma in Banking from Institute of Financial Studies (IFS) (formerly The Chartered Institute of Bankers), London (CIOB) Over 40 years of experience in financial services, out of which over 10 years in the region of Central and Eastern Europe (Hungary, Croatia, Serbia, Macedonia and Romania) Wide consulting experience in recovery, reconstruction and privatization of banks, company privatization and development of small and medium sized companies on expanding markets 2

3 is backed by government mandate was established as an instrument of Slovenian Government to regain: confidence and stability in the Slovenian financial system, trust in the country's most important banks, as much of the taxpayers' money as possible The legal foundation of is to be found in: Measures of the Republic of Slovenia to Strengthen the Stability of Banks Act* (ZUKSB), issued at the end of 2012 Regulation on the implementation of measures to strengthen bank stability, issued in March 2013 and amended in December * Official Gazette Republic of Slovenia, Nos. 105/12

4 The role of Restore systemic banks to ensure lending to good businesses and projects will resume to fuel real growth again Clean balance sheet by buying NPLs at transfer prices Manage and exit the NPLs better than banks to optimize value returned to tax payers No fire sales, value creation, not provisioning or risk minimization, more strategic freedom Independent unwilling investor, capacity to take tough decision Restore credibility in an international perspective Attract needed capital 4

5 organization Structure of CEO Legal Finance & Support** PR & Commun. Internal Audit Transactions* Credit Management & Work-out Asset Management Legal Support Credit Support Legal Support Valuation Restructuring Recovery Real Estate Non-Real Estate Equity 5 * Project-based unit set up for each transaction project ** Includes Finance & Controlling, Accounting & Admin, IT and HR

6 Transfer price of assets acquired from NLB and NKBM Transfer price by bank and asset type EUR millions Equity stakes Non-performing loans , * NLB NKBM Total 6 Note: Three 'dead cases' with no exposure have been excluded. All figures are after deduction of haircut. * EUR 2.4 m of working capital has been deducted Source: Ministry of Finance (December 2013); List of schedule I + III

7 NLB NPLs by exposure sizes and industry EXPOSURE ACROSS INDUSTRIES Industry Gross exposure EUR millions Construction & real estate 838 Financial holdings 507 Manufacturing 258 Services 176 Consumer goods 127 Telecommunications and media 118 Transport & logistics 104 Leisure & hotel 81 Food & beverage 28 Energy 27 Financial services 16 Total 2,278 7 * Average transfer price is shown as estimated transfer price relative to gross exposure ** EUR 2.4 m of working capital has been deducted Note: All figures are after deduction of haircut. Source: Ministry of Finance (December 2013); List of schedule I + III

8 NKBM NPLs by exposure sizes and industry EXPOSURE ACROSS INDUSTRIES Industry Gross exposure EUR millions Construction & real estate 272 Manufacturing 220 Financial holdings 136 Services 103 Leisure & hotel 79 Consumer goods 73 Telecommunications and media 39 Food & beverage Financial services Energy 30 Transport & logistics 6 Other 2 Total 1,023 8 * Average transfer price is shown as estimated transfer price relative to gross exposure Note: All figures are after deduction of haircut. Source: Ministry of Finance (December 2013);

9 Strategy of 2 s given starting point and mandate 3 Credit & Workout 5 Sound Credit and Asset 4 Management Asset Committee Management & Strategies Decisions Exit Strategies 1 Objective: Recover as much as possible of the losses, effectively 9

10 strategy supported by 13 principles (1/2) Objective: Recover as Much as Possible, Effectively Recovery: value creation is overriding best value creation route assessed by looking at facts and well analysed options using a discounted cash flow perspective Effective means the appropriate resources put against value creation potential (organisation, investments into each case, appropriate use of s life time) A dashboard to be created covering Return on equity and return on assets (by asset class) People development Credibility s given starting point and mandate Case-by-case approach as exposures differ broadly and situations are unique Use full tool box which is different than that of the banks, but adhere to fact is not a bank and cannot lend money Act as good, informed and independent economist role as major player in some assets markets taken into account decisions never taken based on inappropriate influences Comply with regulations including European Competition Law 10

11 strategy supported by 13 principles (2/2) Credit & Workout Management Strategies Initial perspective always developed from that of a CR operation e.g. reprogramming, restructuring Internal, fact-based debate with asset management function Asset Management & Exit Strategies AM function looks at each case from perspective of what value can be created by taking over asset e.g. collateral transfer and sales, company ownership through debt-to-equity swaps Exit strategies are critical and being developed and constantly refined based on perspectives by asset classes when timing is right exits always a Board level decision, transparent and effective sales processes critical full case documentation be made public (if appropriate) to demonstrate good use of funds and mandate Sound Credit and Asset Committee Decisions Fact based decisions on what option is most valuable decided in appropriate committee and always with contingencies expected (Plan A, B and C) Valuation methodologies grounded in DCF model 11

12 Thank you for your time 12