MILAN (Reuters) – Italian bad loan manager doValue has reached 80% of its targeted increase in gross loan portfolio for the current year, and it may be able to surpass it, CEO Manuela Franchi said on Tuesday.
The Milan-listed company, whose shareholders include U.S. funds Elliott Investment Management, Fortress and Bain Capital Credit, said earlier on Tuesday it had secured a new contract in Cyprus to recover impaired loans worth around 350 million euros ($378 million) secured against nearly 1,000 properties.
The deal, which follows a 700 million euro one last week with the National Bank of Greece, brings to 6.5 billion euros the new business the company has secured so far this year, helped by its expansion into other southern European markets, including Spain.
“We fully confirm our 2025 target of 8 billion euros in additional gross book value,” Franchi said in comments to Reuters. “If the current trend continues, we don’t rule out even surpassing it in the first part of the year.”
By shedding some 290 billion euros in soured loans since 2016 Italian banks turned the country into Europe’s biggest market for these assets. However, new flows have dried up in recent years as lenders completed their clean-up and tightened lending.
“We believe our geographical diversification will allow us to keep signing new contracts on a regular basis,” Franchi said.
The group has weathered the market slowdown thanks to selective acquisitions and a decision not to invest directly in loan portfolios, but to focus solely on managing them, she said.
Europe’s biggest loan collector Intrum, pushed to the brink by debt costs as interest rates spiked, last year filed for U.S. creditor protection as it sought to restructure its debt.
Unlike doValue, Intrum bought part of the loans it managed.
Seeking to buttress profits as the industry reorganises after the boom years, doValue last year struck a cash-and-share deal to buy Elliott-backed Gardant, a smaller domestic rival.
Cost savings through tie-ups and revenue diversification are seen as a way for the sector to shield profits.
“We look with interest at continental Europe, an area where we are not present but which may offer growth opportunities given the slowing economy and our strong track record,” Franchi said. ($1 = 0.9264 euros)
(Reporting by Valentina Za, editing by Gavin Jones)
