MILAN, May 15 (Reuters) - Italy’s Banca IFIS has agreed to buy rival FBS as it expands its collection business beyond a traditional focus on unsecured loans to include corporate and property-backed debt.
IFIS said on Tuesday it would pay 58.5 million euros ($69.3 million) for 90 percent of FBS, acquiring also 1.3 billion euros of soured loans as part of the deal.
Italy became Europe’s biggest market for soured bank loans after a deep recession saddled its lenders with 360 billion euros in impaired debt, a burden which has now fallen to 285 billion euros thanks to costly disposals.
As a consequence, the country’s debt servicing industry has seen a flurry of deals culminating last month in Europe’s top debt collector Intrum Justitia buying 51 percent of Intesa Sanpaolo’s loan recovery unit.
Both the 3.6 billion euro Intrum deal and the much smaller acquisition by Banca IFIS highlight a shift in market focus from unsecured debt to more complex corporate and secured loans.
Both Intrum and IFIS originally specialised in recovering unsecured loans, such as consumer debt, which Italian banks have found easier to dispose of and whose prices have been rising steadily in recent years amid strong demand, hurting returns for buyers.
The deal brings total loans under management at IFIS to more than 20 billion euros, of which 14 billion euros belong to the Veneto-based bank.
$1 = 0.8441 euros Reporting by Valentina Za; Editing by Mark Potter