SC Lowy makes bet on Italy’s banking system
Firm buys Credito di Romagna stake; European banking licence adds to appeal.
A quiz question: which European country had the largest pool of non-performing loans in the third quarter of 2017, the last time the European Central Bank released overall data?
Greece would be an obvious guess, but its banking system is too small. Minus points for Portugal, Ireland and Cyprus, which are even smaller. The correct answer is Italy, which had €195.97 billion of non-performing loans outstanding, around 11.85% of total loans in the country.
This depressing data point might make Italy’s banking system seem like the last place a foreign investor would want to park their cash. But SC Lowy, a Hong Kong-based boutique investment bank founded by Deutsche Bank alumni Michel Löwy and Soo Cheon Lee, has done just that. The firm bought a controlling stake in Credito di Romagna (CDR) for €50 million in April, bailing out a firm that had been running at a loss for several years.
CDR is a minnow, with just 125 staff spread across 12 branches. Nor does it punch above its weight in profit terms: it lost €7.33