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Italian bad loan manager doValue has achieved 80% of its targeted increase in gross loan portfolio for the current year, and it may surpass this goal, according to CEO Manuela Franchi.

The Milan-listed company, which counts U.S. funds Elliott Investment Management, Fortress, and Bain Capital Credit among its shareholders, announced it has secured a new contract in Cyprus for the recovery of impaired loans valued at approximately 350 million euros, backed by nearly 1,000 properties. This deal follows a previous contract last week with the National Bank of Greece worth 700 million euros, bringing the company’s new business secured this year to a total of 6.5 billion euros, supported by its expansion into other southern European markets, including Spain.

Franchi confirmed the company's target of reaching 8 billion euros in additional gross book value by 2025, stating that if the current trend continues, exceeding this target in the first part of the year remains a possibility.

Since 2016, Italian banks have reduced approximately 290 billion euros in bad loans, making the country Europe's largest market for such assets. However, lending remains tight.

Franchi noted that geographical diversification will enable the company to continue securing new contracts regularly. The group has managed to navigate market slowdowns through selective acquisitions and a focus on managing loan portfolios rather than directly investing in them.

In contrast, Europe's largest loan collector, Intrum, has been struggling with rising debt costs amid increased interest rates and filed for U.S. bankruptcy last year as it sought to restructure its debt. Unlike doValue, Intrum purchased some of the loans it managed.

To bolster profits as the industry reorganizes after a period of growth, doValue completed a cash-and-share deal last year to acquire Gardant, a smaller domestic rival backed by Elliott. The company believes that cost efficiencies through mergers and revenue diversification are key to maintaining profitability in the sector.

"We are actively considering opportunities in continental Europe, an area where we currently have no presence but which may offer growth potential amid a slowing economy and our strong track record," Franchi added.