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Banca Progetto, a Milan lender backed by US asset manager Oaktree Capital Management, has been placed under judicial administration for allegedly providing state-guaranteed loans to businesses linked to organised crime.
The prosecutor’s office in Milan said on Thursday that investigators had found evidence the bank had given out loans to businesses with ties to the ‘Ndrangheta, the mafia-type group from Calabria, southern Italy. The loans were backed by a special public fund that supports domestic small and medium enterprises, according to the prosecutor.
Since 2020, Italy has distributed billions of euros in taxpayers’ money to mitigate the impact of the Covid pandemic and the economic fallout of Russia’s war in Ukraine on businesses. The state-backed guarantees on loans were designed to help companies stay afloat through the crises.
Milanese investigators said Banca Progetto had given the mafia-linked businesses access to such public funds “for years” through loans that also breached anti-money laundering regulations.
“Investigators found several shortfalls in the bank’s operations specifically in relation to [Banca Progetto’s] permeability to relations with individuals under investigation for serious crimes or subject to restrictive personal or financial measures,” prosecutors said.
Banca Progetto said none of its employees or management were under investigation and that its board of directors remained fully operative.
The bank was founded in 2016 when Oaktree relaunched an ailing local lender in the south of Italy it had acquired in 2015. It focuses on lending to small and medium enterprises. Its loan portfolio soared from €50mn in 2015 to €7.6bn last year.
Last month the Los Angeles-based alternative investments firm announced it had agreed to sell its controlling stake in Banca Progetto to funds managed by Centerbridge Partners. Oaktree and Centerbridge declined to comment.
The bank is run by Paolo Fiorentino, the former chief executive of Capitalia, a bank that was merged into UniCredit in 2007, and Carige, a lender rescued by Bologna-based BPER Banca in 2022. Fiorentino joined Banca Progetto after leaving Carige at the end of 2018.
A court appointed administrator will be installed, the prosecutor said.
Fiorentino said on Thursday that the bank wanted to work with prosecutors: “If we were unaware instruments of something, we feel entirely extraneous to the matter though we have unfortunately been involved.”
In 2023, a Bank of Italy inspection found inadequate control systems in place at Banca Progetto and issued the lender a €100,000 fine.
In March, the central bank also asked the lender to implement certain corrective anti-money laundering measures.
Giuliana Ricozzi in Rome and Harriet Agnew in London contributed reporting
https://www.ft.com/content/8a496b90-c0be-47bf-9664-e916bc50f9d7
