Softbank-backed doValue flags US$55 billion contract pipeline as profit stagnates

Italy's doValue said its new contracts to recoup bad loans across southern Europe this year could reach €52 billion (US$55 billion), after its loan portfolio shrank nearly by a fifth in 2022 due to the loss a key contract in Spain.

The Verona-based debt recovery firm on Thursday reported a net profit excluding non-recurring items of €50.6 million for 2022, a tad below a company-provided analyst consensus of 53 million.

Gross revenues totalled €558 million, lagging a 565 million euro average analyst forecast.

Collections on the loan portfolio stood at €5.5 billion in the full year, slightly below the 5.7 billion euros doValue managed to recoup in 2021.

The gross book value of loans under management stood at €120.5 billion at the end of December, following the end of the deal with Spain's bad loan manager Sareb, which took €20.5 billion off doValue's loan book.

The company, which was spun off from UniCredit and has Softbank Group and Bain Capital Credit as its main shareholders, targets €160 billion in loans under management by the end 2024.

"The pipeline of potential servicing mandates ... is likely to grow further in the coming quarters," doValue said, forecasting a rise in impaired bank loans on the back of higher interest rates and soaring inflation.