BPPB and EIF agree to new support for Southern Italy

• The European Investment Fund (EIF) and the Banca Popolare di Puglia e Basilicata (BPPB) have signed a new agreement in support of SMEs in Southern Italy.
• Through an EIF guarantee, backed by own resources, EIB funds, ESIF and COSME funds, BPPB will award EUR 120m in new loans to SMEs in Italy’s southern regions.
• This operation is the third agreement between BPPB and the EIF in 2019, following on the “InnovFin” and “Agri Italy” (for agricultural investments in Apulia) initatives.

The Banca Popolare di Puglia e Basilicata has signed an agreement with the EIF under the umbrella of the European “SME Initiative” programme. Implemented through an EIF guarantee, the initiative will also be supported by the European Investment Bank (EIB), COSME funds and by the Italian Ministry for economic development (MISE), which has made available European ESIF Funds for this purpose. The projects represents an innovative financial ‘risk transfer’ instrument, as foreseen by the new rules on ESIF funds, which allows funds managed on a national (or regional) level to be combined with the resources from the European programme.

Technically speaking, the “SME Initiative” deal comes in the form of a synthetic securitisation on a portfolio of existing financing. The Bank commits itself to extending new, advantageously priced financing to SMEs in Southern Italy for around EUR 120 million over the course of 36 months. It uses EUR 11 million of ESIF funds made available by the managing authority (MISE) to cover first and second loss pieces.

This will be the first SME Initiative operation that reaches the objective of freeing up the confidi regional guarantee consortia. In fact, the securitised portfolio is currently guaranteed by various confidi from the Region of Apulia itself. Thanks to the signature with the EIF, BPPB has been able to free the confidi, so that their resources can be used for new operations.

“Being a local bank – states BPPB President Leonardo Patroni Griffi – means that, every day, we have to create possibilities for growth and development for our reference market. Through new financing that will support the typical local economy, made up of small and medium sized companies in all productive sectors, BPPB confirms its commitment to the SME sector in the Regions where we are most present.”

“The EIF believes strongly in the possibilities and the potential of Southern Italy. – adds EIF Chief Executive, Pier Luigi Gilibert - “Therefore, it is no coincidence that this is the third operation with BPPB this year; an operation that has the precise aim of giving concrete support to southern Italian entrepreneurs to support the local economy.”

Through this operation, BPPB effectively shores up the confidi, offering them the possibility to support emit new guarantees in support of the banking system, thus continuing to support the growth in Italy and specifically in the South.

BPPB has been assisted by Banca Akros (Banco BPM Group) as financial advisor.

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Banca Popolare di Puglia e Basilicata S.C.p.A. is an Italian credit institution, founded in 1995 by the merger of the Murgia and Taranto banks. With its headquarters in Altamura, in the province of Bari, the bank has 137 branches in 12 Italian regions.

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of EUR 2.3 billion, including the support provided by the European Fund of Strategic Investments.

Press Contacts:

EIF:
Tim Smit
Tel: +352 691 28 64 23
t.smit@eib.org
Follow us on Twitter @eif

Banca Popolare di Puglia e Basilicata:
Rossella Dituri
+39 080 87 107 86
r.dituri@bppb.it