Understanding Credito Fondiario (Fonspa) and Its Impact

Credito Fondiario, also known as Fonspa, is a leading microfinance institution in Peru. It was founded in 1993 by a group of entrepreneurs who wanted to provide financial services to low-income individuals and small businesses.

Fonspa's mission is to promote economic development and social inclusion through financial inclusion. This is achieved by offering a range of financial products and services that cater to the needs of its clients.

Fonspa has a strong presence in rural areas, where it provides access to financial services for people who may not have had access to them before. Its branches are often located in local communities, making it easier for clients to access its services.

Fonspa's success can be attributed to its commitment to financial inclusion and its ability to adapt to the changing needs of its clients.

Credito Fondiario was founded in 1898 as Credito Fondiario Sardo, a Sardinian Land Credit institution.

The bank initially specialized in providing mortgages in Sardinia and Rome, but its scope expanded to the entire Italy in 1920.

However, the bank's focus narrowed down to Sardinia and Rome again in 1939 due to a law.

In 1959, the bank resumed financing public works and utilities across Italy.

Credito Fondiario entered the IRI – Istituto per la Ricostruzione Industriale – in 1960 and changed its name to Credito Fondiario Spa in 1965.

The bank was owned by Banco di Roma, Banca Commerciale Italiana, and Credito Italiano at that time.

Credito Fondiario entered the financial market in 1985, with its shares listed on the Milan Stock Exchange.

In the 1990s, the bank expanded its services to medium- and long-term industrial financing.

The bank was sold to Morgan Stanley Real Estate Funds in 2000 and later to Tages Holding in 2013.

Tages Holding acquired 46% of the bank's shares, while Tiber Investments held 28% and other shareholders held 26% as of 2016.

In 2015, Credito Fondiario acquired €302 million in bad debts from Banca Popolare dell'Etruria e del Lazio.

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The bank had planned to take over Banca delle Marche in 2014 but was instead bailed out by the Italian National Resolution Fund in 2015.

Credito Fondiario sold the collateral of Banca delle Marche to recover a €1.8 billion loan in May 2015.

The bank changed its name to Credito Fondiario after being sold to Tages Holding in 2013.

In 2022, Credito Fondiario completed a merger with Fifty S.r.l. and acquired Fivesixty S.r.l., a financial advisory company.

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Credito Fondiario is set to acquire a 70% stake in Banco BPM's Npl servicing platform, with Banco BPM retaining a 30% share.

This partnership marks a significant step in Credito Fondiario's strategy to become a leading debt purchaser and servicer in Italy, as stated by Iacopo De Francisco, the bank's Director General.

Credito Fondiario aims to leverage this partnership to improve its service standards and performance, with a focus on investing in training and updating tools and systems for the servicing platform.

The bank has already received support from its partner Elliott, as well as other shareholders and top management, to strengthen its financial position.

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Credito Fondiario's leadership position in the sector was reinforced in 2013 when it was acquired by Tages Holding and a group of Italian entrepreneurs.

Iacopo De Francisco, Director General of Credito Fondiario, stated that this partnership aligns with the company's strategy to position itself alongside major Italian banks as a debt purchaser and debt servicer of reference.

The servicing business is Credito Fondiario's primary line of business, and they have committed to improving their service standards and performance.

In 2020, Credito Fondiario exceeded EUR 1 billion in cumulative investments in the Italian impaired and illiquid loans sector, positioning itself as one of the largest investors in this market.

The company's growth in this sector was driven by a generous pricing strategy, with a floor price of 21% of the nominal value and a maximum price close to 25%.

In 2017 and 2018, Credito Fondiario made significant strides in the special servicing sector. Credito Fondiario successfully concluded two long-term partnership agreements with leading Italian banks.

One of these agreements was with Banca Carige S.p.A., which was finalized in December 2017. The partnership marked a major milestone for Credito Fondiario's growth and expansion.

The other agreement was with Banco BPM S.p.A., which was also finalized in December 2018. As part of this agreement, a joint venture called Gardant Liberty Servicing S.p.A. was established.

Banco BPM's preference for Elliott and Credito Fondiario can be attributed to the strength of their bid, which ultimately surclassed the other two competitors, DoBank-Fortress-Illimity and Christofferson Robb & Company-Davidson Kempner-Prelios.

The partnership between Credito Fondiario and Banco BPM on Npl is expected to bring significant financial benefits to Credito Fondiario, with the support of Elliott and the other shareholders.

Credito Fondiario's acquisition of a 70% stake in the Npl servicing platform is a key aspect of the partnership, with Banco BPM maintaining a 30% stake.

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Credito Fondiario was founded in 1898 as Credito Fondiario Sardo.

The bank initially specialized in providing mortgage loans in Sardinia and Rome.

In 1965, the bank became Credito Fondiario Spa, owned by Banco di Roma, Banca Commerciale Italiana, and Credito Italiano.

The bank's operations were initially limited to Sardinia and Rome, but it was later authorized to operate in all of Italy in 1920.

However, with the 1939 Law n. 1797, the bank's operations were restricted again to Sardinia and Rome.

In 1959, the bank resumed financing public works and public utility projects across Italy.

In 1960, the bank entered the IRI – Istituto per la Ricostruzione Industriale – and in 1965, it took the name Credito Fondiario Spa.

The bank's shares were listed on the Milan Stock Exchange in 1985, allowing it to enter the financial market.

In the 1990s, the bank expanded its operations to medium- and long-term industrial financing, leveraging its expertise in corporate credit.

In 2000, the bank was sold to Morgan Stanley Real Estate Funds, and in 2006, Morgan Stanley acquired the bank through its subsidiaries, renaming it to Fonspa Bank.

Expand your knowledge: List of Banks in Italy

The bank was later sold to Tages Holding in 2013 and reverted to its original name, Credito Fondiario.

In 2015, the bank acquired €302 million in gross book value of bad debts from Banca Popolare dell'Etruria e del Lazio.

The bank had planned to take over Banca delle Marche in 2014, but the takeover was called off due to the European Commission's investigation into possible state aid.

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