MILAN, Dec 10 (Reuters) - Italian bank Credito Fondiario with U.S fund Elliott are close to securing up to 7.8 billion euros ($8.9 bln) in bad loans being sold by Banco BPM together with a stake in its debt recovery unit, three sources familiar with the matter said.
The board of Italy's third-largest bank will meet later on Monday to pick the winner of a hard-fought race which pitted the Credito Fondiario-Elliott duo against Italy's top bad loan specialist doBank, backed by U.S. private equity firm Fortress, and a third group comprising U.S. funds TPG, Christofferson, Robb & Company and Davidson Kempner.
The sale will allow Banco BPM to cut its problem loan ratio to as low as 10.6 percent of total lending from 16 percent at the end of September, putting to rest concerns it may need to raise capital to clean up its balance sheet.
All interested parties declined to comment.
Banco BPM earlier this month struck a consumer credit deal with Credit Agricole which helped it to boost its capital buffers, paving the way for the bad loan sale. (Reporting by Massimo Gaia, Cristina Carlevaro and Valentina Za, editing by Stephen Jewkes)