BFF Bank has entered into a binding agreement with a leading investment fund for the sale of receivables due from Public Administrations in Italy and Spain, with a carrying value of approximately €127 million as of 30 June 2026.
The transaction marks a further step in the bank’s derisking strategy and also includes a forward flow agreement covering the potential sale of late-payment interest and other ancillary claims that may accrue in the future on existing or new exposures to Spanish public-sector debtors.
The Italian portfolio mainly consists of receivables classified as non-performing loans, as well as past-due exposures to public entities in financial distress. These positions are backed by final court rulings in BFF’s favour.
The Spanish portfolio has a different composition, covering ancillary claims, primarily late-payment interest and recovery costs, related to positions for which the principal amount has already been fully recovered.
The transaction is among the measures included in BFF’s Capital Conservation Plan, although, on a conservative basis, its expected effects were not included in the bank’s projections.
The expected impact on BFF’s risk profile and capital absorption is particularly significant.
According to preliminary estimates, against a loss of approximately €5 million to be recognised in the income statement at closing, the transaction will result in a reduction in risk-weighted assets (RWA) of approximately €110 million as of 30 September 2026.
Over a longer time horizon, the transaction is expected to generate €260 million in lower RWA by 31 December 2028, as well as a reduction of more than €30 million in expected calendar provisioning for 2028.
In terms of asset quality, the bank also expects a reduction of approximately 35% in consolidated net non-performing loans compared with the levels recorded as of 30 June 2026.
These figures highlight how the transaction goes beyond simply cleaning up the bank’s portfolio, also providing a means of reducing future capital absorption associated with the management of non-performing exposures.
Another important element of the agreement concerns Spain. The forward flow agreement will allow BFF to transfer late-payment interest and other ancillary claims that may accrue in the future, contributing to the development of a more structured approach to managing these exposures.
The objective is also to bring past-due exposures in the Spanish market back towards levels close to those recorded before the latest reclassification of receivables.
Overall, the transaction will contribute to reducing the capital shortfalls projected for 2028, while simultaneously addressing asset quality, RWA and calendar provisioning.
Completion of the transaction, subject to the fulfilment of the conditions set out in the agreement, is expected by the end of October 2026.
