The Slovenia Times

"Our expectations are in line with profit"



In 2017, what were the most profitable projects in terms of non-performing loans?

I cannot comment on the profitability of individual projects. In the context of performance, however, earnings are not the only benchmark, although our primary goal is to repay as much money to taxpayers as possible. In 2017, we generated more than EUR 400m cashflow in three areas: the sale of real estate, the sale of equity interests and and cash flow from loan repayments, including the sale of receivables. The success was that restructured companies in Slovenia, with gross loans more than EUR 100m, fully refinanced their loans with commercial banks. The second success was the reimbursements by restructured companies of which there are currently 58 representing about half of value of receivables management. The third success, where we also generated a considerable cashflow in the past year, was the sale of real estate of companies that are undergoing insolvency proceedings.

On assets sold, what was the achieved return in 2017 compared to planned?

Our expectations were in line with profit, especially for businesses being refinanced as the banks returned to normal lending practices. Given that economic growth is good, the required returns by investors are also lower. It is important for us to create a relatively constant and good cashflow. Looking back, our assets under management were the highest at the end of 2014, EUR 1.5bn - measured at fair value, which should reflect the market value of those assets. Similarly, after the merger of two smaller banks in 2016. Today we manage just under a EUR 1bn, from EUR 1.2bn in assets at the beginning of 2017, at net value, and we created more than EUR 400m of cashflow, which is in my opinion a good result.

What is the number of debtors in the DUTB Management Portfolio and can you highlight some of their characteristics?

We have examples from a few thousand euros all the way to larger companies, with a higher exposure and gross value of more than EUR 100m. At the end of 2017, there were 748 debtors with a low exposure of less than EUR 300,000, mostly from two merged banks, including some sole proprietors and micro companies. 672 debtors are larger, of which 58 are in restructuring, while all others are in insolvency proceedings. However, with regard to purchases, larger investors are buying preferred items with higher exposure, as large companies are more resilient and more probable to restore normal business.

In 2017, DUTB purchased claims from six existing debtors of EUR 3.8m (gross value: EUR 22.2m) and with short-term loans funded five companies for a total of EUR 4.7m. What is the basis to buy receivables and what can you share about the debtors?

The foundation is always economic, however there are always stakeholders with different interests involved in the process. The interest is not always the same among creditors and debt consolidation mitigates this. For some, it is important to be repaid as soon as possible, for others, to sell at the highest possible price. In Slovenia we were not established to become a bank, but in the case of companies that have liquidity problems or need an investment, we are practically the only option, and when justifiable we support companies where we are also owners.


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