MILAN/LONDON (Reuters) – Italian bank and impaired loan manager Credito Fondiario is studying options to expand with the help of investment bank Goldman Sachs, sources said, as the country’s booming market in bad loans enters a consolidation phase.
Italy’s banks have sold 170 billion euros (152 billion pounds) in bad loans in recent years, attracting specialist investors and feeding a debt recovery industry which is now looking to cut costs in response to increased competition and slowing sales.
Credito Fondiario, owned 82 percent by U.S. fund Elliott Management Corp, could play an active role in an expected consolidation round in the sector, said one of two sources familiar with the matter.
Credito Fondiario General Manager Jacopo De Francisco has also spoken in the past of a stock-market listing as an option.
Leading players in the sector are expected to attempt to build up scale to better shoulder rising costs in a maturing market where the recovery process increasingly requires complex restructuring skills needed to turn businesses around.
Founded in 1898, Credito Fondiario has taken on a growing role in the Italian distressed debt market after London-based hedge fund Tages bought it from Morgan Stanley in 2013.
With Elliott as an investor since 2016, Credito Fondiario has come to manage more than 50 billion euros in impaired debt in Italy, following the purchases of the bad-loan units of Banco BPM <BAMI.MI> and Carige <CRGI.MI>.
Daily MF first reported news of Goldman’s role.
(Reporting by Valentina Za, Pamela Barbaglia and Elisa Anzolin, editing by Mark Bendeich)