Italy's doValue renews new bad loan management contract with Santander

MILAN, Dec 3 (Reuters) - Italian debt recovery firm doValue Group said on Wednesday it had signed a contract with Spain's Banco Santander to manage new flows of impaired loans starting in January, replacing an agreement that is set to end in December.

The company, which last year acquired Elliott-backed rival Gardant as the industry consolidates in the face of thinning new bad loan flows from banks, said the Santander accord had an initial two-year duration but could be extended.

Manuela Franchi, doValue CEO, told Reuters the deal struck in the "competitive Spanish market" allowed the group to "focus on higher-margin asset classes."

The agreement does not require an upfront payment, the company said, without providing other financial details.

During the year, doValue has signed new contracts to manage more than 12 billion euros in loans, ahead of forecasts, Franchi said.

The group expanded its partnership with BPER, after the Italian bank acquired rival Popolare di Sondrio, giving doValue rights to manage 50% of new flows of unlikely-to-pay loans and 90% of new non-performing loan flows until 2033.

Franchi said doValue expected to close in January its 350 million euro acquisition of Coeo, a German debt recovery firm powered by artificial intelligence serving blue-chip clients across eight European markets.

"We also moved at record speed on integrating Gardant, which will soon be completed," she said.

"It's been a record year that positions us well for 2026, when we will unveil a new three-year plan reflecting our pan-European scope and diversification after recent acquisitions," she added.

(Reporting by Valentina ZaEditing by Tomasz Janowski)