Investors snap up €250m of Italian bad debt

LCM Partners has acquired a portfolio of bad Italian consumer debt with a nominal value of €98m from Banca IFIS, while another firm acquired a €151m portfolio.

Italian bank Banca IFIS has unloaded two portfolios of non-performing loans (NPL) valued at €250 million.

Credit investment specialist LCM Partners acquired a €98.4 million portfolio, which comprises of bad consumer debt. The total number of loans in the portfolio is 15,000.

Link Finanziaria will service the portfolio.

Andrea Clamer, head of Banca IFIS’s NPL division, said: “We are able to create value from selling a part of the purchased portfolios, which are still perfect in processing terms, to reliable players who work with us, applying the logic of mutual enhancement of assets.”

A separate €151.6 million portfolio was sold to an unnamed investor. The portfolio covers 12,000 loans made up of personal loans, targeted loans, and revolving credit card loans.

A representative for the bank declined to reveal how much the portfolios were sold for, but noted that factors affecting the sale price included quality and the age of assets, as well as the amount of information available on the debtors.

The bank said it plans further sales of NPLs, where it can “impact positively on profits”, but stressed that the mission of the bank is to acquire new loans and has set a target of buying portfolios valued at a total of between €10 – 15 billion by the end of 2019.

LCM declined to provide further information on how much it paid to acquire the portfolio.

The investment is the fifth Italian transaction under LCM’s third credit opportunities fund and the region is a “strategically important growth market” for the firm, Paul Burdell, chief executive of LCM said. The firm’s strategy targets both performing and non-performing consumer debt across Europe.

Opportunities in the Italian market are heating up as banks continue to clean up balance sheets of under performing loans. Recently, UniCredit sold a €300 million NPL portfolio and a €500 million portfolio of unsecured contracts from the leasing business to investment firm MBCredit.