- The EIB Group (EIB and EIF) has signed a €91 million guarantee in support of Banco BPM, enabling the Italian bank to channel €1 billion into the real economy.
- The operation facilitates access to credit for Italian small and medium-sized enterprises (SMEs) by providing finance in the medium and long term.
- The guarantee covers any first loss of a synthetic securitisation structure via the European Guarantee Fund.
The EIB Group (comprising the European Investment Bank and the European Investment Fund) and Banco BPM join forces once again to support the working capital requirements and investments of Italian SMEs hit by the economic crisis caused by the pandemic. This is the first operation of this type in Italy and one of the first in Europe.
To this end, the European Investment Bank (EIB) and the European Investment Fund (EIF) will provide a guarantee of €91 million on a junior tranche of a synthetic securitisation operation of a portfolio of SME loans originated by Banco BPM. The Italian bank will thus be able to provide finance and liquidity to SMEs via subsidised loans totalling around €1 billion.
The operation covers the first loss of a synthetic securitisation structure via the European Guarantee Fund (EGF), an integral part of the €540 billion package of measures approved by the European Union in 2020 specifically dedicated to countering the economic difficulties and productive slowdowns caused by the pandemic.
This is the third synthetic securitisation operation between the EIB Group and Banco BPM backing Italian SMEs and mid-caps, the first of which was signed in June 2019 (€55 million) and the second in December 2020 (€76.6 million) to support SMEs affected by COVID-19.
EIB Vice President Gelsomina Vigliotti said: “The EIB confirms its commitment to supporting Italian companies hit by the pandemic. The operation with Banco BPM facilitates access to credit and frees up medium and long-term financing resources for SMEs.”
EIF Chief Executive Alain Godard said: “The European Guarantee Fund was created to support SMEs in Europe in the wake of the pandemic, and this transaction is proof of that. This is the first securitisation transaction in Italy under the EGF thanks to which the EIB Group and BBPM together will provide additional financing to Italian SMEs, supporting their needs to maintain and develop their business as well as safeguarding jobs.”
CEO of Banco BPM, Giuseppe Castagna, stated: “We are very proud of the agreement signed with the EIB, which is the result of excellent cooperation between the worlds of finance, marketing and commerce. We are a bank of national size but with a strong local presence, so it is of fundamental importance for us to support SMEs, which are the foundation of the country’s economic and business fabric. For our bank, helping to back these companies through increasingly substantial operations also represents a form of social and cultural support for the regions in which we operate”.
Background information
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It provides long-term financing for sound investments that contribute to EU policy. The Bank finances projects in four priority areas: infrastructure, innovation, climate and environment, and small and medium-sized enterprises (SMEs). Between 2019 and 2020, the EIB Group provided €23 billion in financing for projects in Italy.
The European Investment Fund is part of the European Investment Bank Group. The EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. The EIF is also active in supporting Climate and Infrastructure fund investments with a strong focus on climate action & environmental sustainability. Through its activities, the EIF fosters EU objectives in support of countering climate change as well as fostering innovation, research and development, entrepreneurship, growth and employment.
The European Guarantee Fund (EGF) was created by the EIB Group (EIB and EIF) with contributions from Italy and other EU Member States to protect businesses that are struggling in the crisis caused by COVID-19. With almost €25 billion in guarantees, the EGF allows the EIB and EIF to swiftly offer companies, mostly SMEs and mid-caps, access to loans, guarantees, asset-backed securities, capital and other financial instruments. The EGF forms part of the package of recovery measures put in place by the European Union, with the objective of providing a total of €540 billion to support the hardest hit sectors of the EU economy.
The Banco BPM Group was founded on 1 January 2017 through the merger of Banco Popolare and Banca Popolare di Milano. The deep-rooted tradition of the original banks has inspired the bank to carry on its mission to create stable value over time for shareholders through sustainable profitability and development. It serves 4 million customers via an extensive distribution model that includes innovation and sustainability among its core founding principles.