Italy’s Banca Progetto accused of lending to mafia

A court found that companies linked to the ‘ndrangheta mafia were able to access state-backed loans.

The Italian lender Banca Progetto has been placed under court administration for allegedly giving state-backed loans to companies linked to the mafia.

According to prosecutors in Milan, firms managed by people associated with Italy’s notorious ‘ndrangheta group were able to secure more than €10m in credit.

By granting these loans, officials argued that Banca Progetto violated anti-money laundering policies. These require certain checks to be made on borrowers.

The loans were guaranteed by state-owned bank Mediocredito Centrale through a fund for small and medium enterprises.

This state aid was designed to support businesses through the pandemic, as well as through Europe’s energy crisis following the invasion of Ukraine.

In a statement released on Thursday, Banca Progetto sought to clarify misconceptions that it has been placed under total administrative control.

The lender is under court administration, meaning that a court-appointed external administrator, Donato Maria Pezzuto, will oversee certain parts of its operations.

This is a safety measure to ensure official procedures are being properly followed.

“Banca Progetto Spa therefore intends to reassure its customers and stakeholders that it will continue to operate in a completely ordinary manner through its internal bodies and structures,” the lender explained.

It added that alleged shortcomings related to 10 loans out of a portfolio of 40,000.

The news comes after Oaktree Capital Management struck a deal in early September to sell Banca Progetto to funds managed by private equity firm Centerbridge Partners.

Oaktree originally bought the lender in 2015, under the name Banca Popolare Lecchese. A year later, it was relaunched as Banca Progetto.