Chairman of the Board doBank
by Giovanni Castellaneta, Chairman of the Board at doBank
Over the last year, in the Non-Performing Loans market, there has been a strong reduction in the volumes of deteriorated loans in the balance sheets of the banks. This follows the boost from the Regulators and the consequent acceleration in the sale of invoices (factoring).
Today, non-performing loans account for €200Bn, a level that is in any case very high compared with the €80Bn of 2008.
Around 70% of these loans relate to non-performing loans to Italian businesses. Therefore, the rapid disposal of these loans – which is fundamental to support the economy, due to their size and characteristics – has long been the subject of debates and projects from economic and political institutions both national and international.
We are thus witnessing a particular dynamism in the NPL market, with the presence of specialized operators and an ever-increasing number of international investors with strong liquidity who are interested in seizing new opportunities.
The intervention of international investment funds has mitigated the effects of the exposure of the banks. Indeed, if on the one hand, this resolves the problem that companies have in terms of the restructuring of debt, on the other hand, it definitely represents an instrument to resolve problems with NPE. In fact, by divesting their deteriorated loans, the banks do not incur losses and in some cases achieve a recovery in value without needing to agree on new financing as a protection instrument for the existing exposure.
Foreign investments in Italy are valuable, and in addition to representing a great opportunity, they are also a powerful growth factor above all at this moment in history.
Today doBank, which I am Chairman of, is a listed Group that manages over €82Bn of loans on behalf of banks and investors.
Fortress, the major shareholder of the doBank group, with its acquisition of Italfondiario in 2000 and UniCredit Credit Management Bank in 2015, represented the ideal partner as it is a prime example of success in the Italian economy,
Fortress’s investment in Italy has proved to be a case where a “system approach” has generated both exponential growths for the doBank Group, which has become a point of reference throughout Europe, as well as a valid opportunity for the fund.
For over 20 years Fortress has been present in the Italian economy with long-term investments that imply close cooperation with our country: this demonstrates that it is possible to seize opportunities for mutual development.
In this more competitive scenario, it is nevertheless important that companies evaluate the best options for the evolution of their own business model based on their own specificities. The data is, in any case, comforting in that respect: Italian small and medium-sized enterprises (SMEs) are among the most innovative in Europe, and the percentage of SMEs that have introduced innovations in product and processes, both strategic and organizational, is above the European Union average.
In addition, investing in Italy means having access to a huge heritage of intellectual and specialist know-how that is unique in the world in all areas, and an extraordinary level of know-how in strategic sectors.
The management of deteriorated loans represents a market in which professional specializations come together that are able to deal with the complex cases in the life of a bank and its clients. This is an activity that simultaneously requires not only industrial and professional characteristics and a personalized approach, but also standardized instruments and processes. It is necessary to seek out the expertise that can be put in place and doBank, in its own area, has managed to combine these characteristics, which are recognized not only by the market but also by the international rating agencies.
Over the course of my career, as Vice President of Finmeccanica followed by Sace, I have contributed to facilitating collaboration between companies and I have noticed how the importance of constant dialogue between countries can foster economic development as well as business and investment relationships.
Trade among nations favors the export of goods and the internationalization of companies, which are essential elements towards increasing competitiveness. Furthermore, our companies are under-insured compared with those of other European countries, and with the collaboration of international investors they can cover themselves more easily against the risks associated with facing new markets, thus seizing development opportunities in the best possible conditions.
Italy represents one of the main gateways to a huge consumer market in the EU, North Africa and the Middle East.
Our country has up to now delivered favorable results that bear testimony to the close attention with which international investors observe us and which give hope for a renewal of interest.