MILAN (Reuters) - Italian bad loan investor Fire is looking to add 1 billion euros ($1.1 billion) in assets under management this year as it works towards an eventual stock market listing, its chief executive said.
Italian banks’ efforts to cut a bad loan pile that peaked at 360 billion euros after a recession turned Italy into Europe’s biggest market for soured bank debt, with sales totaling some 150 billion euros in the past two years.
“(In 2019) we want to approach the 10 billion euro psychological threshold (of assets under management) which separates big players from small- and medium-sized ones,” CEO Claudio Manetti told Reuters.
Manetti said the group, which currently manages 9 billion euros and is awaiting a regulatory green light to start operating in Greece, would aim for a stock market listing at some stage following bigger rival doBank and Cerved.
Fire had in the past discussed a possible investment by private equity firm TPG as part of a joint acquisition of rival debt collector CAF, two sources familiar with the matter told Reuters. The deal fell through when CAF was bought by Sweden’s Intrum Justitia.
TPG declined to comment.
Fire, based Messina in Sicily, is fully owned by Italy’s Bommarito family.
Manetti said Fire was in talks to buy the debt collection business of a small Italian bank. He declined to name the bank but said the deal was expected to come through by the third quarter.
“The deal would have the usual shape, a sale of the unit together with a 10-year debt servicing accord,” he said.
Italian banks Intesa Sanpaolo and Banco BPM last year sold a majority stake in their debt recovery units together with a chunk of bad loans.
The sale of a loan servicing business helps banks to cushion any hit from a bad loan sale, normally carried out at a loss. The value of the business is closely linked to the fees that the spun-off business will then charge the bank over an agreed number of years to recover its impaired loans.
($1 = 0.8839 euros)
Additional reporting and writing by Valentina Za; editing by Jane Merriman