X-S&PGR Afrms DoValue SpA STRONG Primary And Spcl Servicing Rnks
OVERVIEW
-- doValue SpA is the largest Italian servicer based on assets under management and is the listed parent company of the doValue Group that provides loan management services in Southern European countries through several subsidiaries.
-- We affirmed our STRONG rankings on doValue SpA as a primary and special servicer of residential and commercial mortgage loans and as a special servicer of consumer finance loans and credits and commercial finance loans and credits in Italy.
-- The ranking outlook is stable for each ranking.
MILAN (S&P Global Ratings) April 4, 2024--S&P Global Ratings today affirmed its STRONG rankings on doValue SpA as a primary and special servicer of residential and commercial mortgage loans and as a special servicer of consumer finance loans and credits and commercial finance loans and credits in Italy. The ranking outlook is stable for each ranking.
doValue, registered under article 115 of the Italian public security law, specializes in special servicing for non-performing loans (NPLs) in Italy. Since our last review, it signed unlikely-to-pay (UTP) loan servicing mandates. The company strategically outsourced the servicing of both UTP and performing loans to doNext SpA, the doValue Group's (the Group's) subsidiary, which can provide refinancing opportunities as a licensed financial intermediary under article 106 of Italian banking law. doNext also offers master servicing in Italy, which is beyond the scope of our review. Therefore, our rankings apply to the primary and special servicing operations of doValue and doNext (collectively, the servicer).
doValue is also the major shareholder of other servicers in Spain, Portugal, Cyprus, and Greece and owns doData SpA, which provides data mining and skip tracing in Italy. Unless otherwise stated, all non-Italian legal entities and doData are outside of the scope of our doValue rankings review.
Our rankings reflect:
-- The servicer's leadership position as the largest Italian servicer by assets under management (AUM), with experience across a variety of asset classes and a diversified client base;
-- The servicer's ability to leverage synergies and foster operational improvements through continuous cooperation and sharing of best practices with the non-Italian subsidiaries of the Group;
-- doValue's competent senior leadership team with extensive experience in other financial services, such as investment banking and mergers and acquisitions;
-- Its adequate training regimen and consolidation of all training courses into a single dedicated training platform available to all employees across jurisdictions;
-- doValue's Well-maintained IT infrastructure and Group cybersecurity policies managed by the Group's newly established information security office;
-- The company's IT systems that effectively support the servicing activities and were recently enhanced by the implementation of a dedicated UTP servicing system;
-- doValue's effective internal controls framework;
-- Its continuous monitoring of its external contractors' performance and provision of training on par with its employee training to these external contractors;
-- The company's sound reporting ability for internal and external purposes, which allows effective control over the servicer's ongoing activity; and
-- doValue's solid servicing model and positive track record of servicing various types of loans and credits.
Since our previous review (see "doValue SpA STRONG Rankings Affirmed And STRONG Ranking Assigned As Servicer In Italy" published Feb. 3, 2022), the following changes and developments have occurred:
-- Several new senior manager appointments took place, including a new Group CEO (formerly the chief financial officer), Italian country manager, Italian chief operating officer, and head of the Italian NPL management, all of which happened through internal promotion.
-- doValue transferred non-UniCredit NPLs from the IFAMS, the original servicing system used for those cases, to the Ex-Parte Creditoris (EPC) servicing platform, which was used for all other cases.
-- doValue upgraded the EPC interface with doVams to improve user experience.
-- doNext transitioned all granular UTP loans to Qualco, an internally developed web-based platform that was enhanced to include servicing of Italian UTP loans.
-- doNext manages bigger UTP loans on Microsoft Excel spreadsheets.
-- The Group created an information security team responsible for IT security matters for all Group companies.
-- Likewise, the Group created an overarching enterprise risk management function to ensure an integrated management of risks across the whole Group.
-- doValue strengthened its second line of defense by separating the risk management function from the compliance function.
-- The servicer hired an external consulting firm to improve the servicing processes in place and enhance the controls to review the asset managers' (AMs') work, resulting in better performance metrics.
-- Additionally, the servicer introduced a new bonus scheme for AMs to reward out-of-court resolutions, which are typically less expensive and quicker to resolve.
-- The servicer consolidated the Italian offices, reducing them to seven from 19.
The ranking outlook is stable on all rankings. The servicer has adequate systems, long-tested policies and procedures, knowledgeable staff, an experienced leadership team, and high-quality standards of service across asset classes in Italy. While the AUM continued to decrease, the servicer remains a leader within the Italian market by AUM and benefits from the synergies it shares with the other subsidiaries of the Group.
The financial position is SUFFICIENT.
doValue has engaged S&P Global Ratings to provide a hybrid ranking. A hybrid ranking involves a public release of a ranking via this press release along with a confidential report that is only available to doValue and its professional advisors. Therefore, we will not be publishing a report in conjunction with this ranking because the report is confidential and only available to doValue and its professional advisors.
