Banca Progetto is an entity of Italian origin that was founded in 1994 but has gained popularity in Spain in the last two years thanks to your deposits with returns of up to 4.40%which far surpassed their local competitors. In fact, it became the first financial institution in Europe to pay 4% for a one-year deposit. However, its popularity across Europe during the period of high interest rates appears to have come to an end: this morning the bank was placed under receivership for alleged loans to the Italian mafia.
An Italian court made public this Thursday that several companies indirectly managed by the ‘Ndrangheta—Italy’s most prominent mafia organization— received loans of up to 10 million euros backed by the State through this entity, according to the news agency Bloomberg.
These operations would have taken place after the 2020 health crisis and guaranteed by the support program for small and medium-sized businesses promoted by the Italian Executive after the pandemic. The local press also highlights that the benefits continued even beyond 2022, and criminals also benefited from the fiscal stimuli implemented after the Russian invasion of Ukraine. The police investigation discovered that Banca Progetto, which does not have a record in Spain nor is it covered by the Spanish Deposit Guarantee Fund, evaded anti-money laundering regulations to provide funds to key companies within the criminal organization.
The “modus operandi” of Banca Progetto spa is “opaque and questionable,” notes the Court of Milan, and highlights that the entity “transferred to the State the risk of insolvency that actually occurred.” The bank has, according to its website, more than 147,000 clients and still maintains deposits above 4% for new accounts, something unusual in European banking after the new ECB rate cut from last week. Regarding its deposits, the entity only points out that in 2023 it raised a total of 5.3 billion euros in Italy, Germany, Spain and the Netherlands, 20% more than in 2022.
This decision also puts the American fund Oaktree in trouble, which has controlled the entity since 2015 and relaunched it the following year. This caused its lending activity to grow dramatically during the pandemic, as the Italian government rushed to support domestic businesses through the country’s commercial banks. Banca Progetto’s total loans increased from €50 million at the time of the acquisition to €7.6 billion at the end of 2023.
