Banks Make a Good Bet on Bad Debt

Published on:
12 September 2006 at 10:19 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00006610-banks-make-a-good-bet-on-bad-debt/

Most of Europe’s banks do their best to keep bad loans to a minimum. But investment banks cannot seem to get enough of them.

In the past few years, some of the world’s largest investment banks and private equity groups have snapped up portfolios of non-performing loans in Germany and Italy. In doing so, they are hoping to profit from financial distress by applying lessons learnt in the aftermath of the US savings and loans crisis of the early 1990s and the collapse of Japan’s real estate bubble.

On Monday, Merrill Lynch and Fortress Investment Group, the private equity group, teamed up to buy a portfolio of non-performing loans from Intesa, the Italian bank. The loans, which originally had a face value of more than ?9bn ($11bn), were sold for just over ?2bn.

For this complete story, please visit Banks make a good bet on bad debt.

Banks Make a Good Bet on Bad Debt

Unknown Author

Featured Resources

Webinars

RA Compliance Corner: Managing Your Service Providers- Do you really have it all in order?

About