Valentina Za and Pamela Barbaglia by Elisa Anzolin

MILAN (Reuters). Oaktree hired Morgan Stanley Sources told Reuters that Banca Progetto will be selling a stake to NYSE in a transaction which could bring the bank to up to $565million. This deal is one of the largest in the digital banking industry in Italy.

Banca Progetto was launched by the U.S. Investment firm in 2015. It purchased 54.2% of Nuova Banca Etruria’s local bank Banca Popolare Lecchese in order to create a new U.S.-based investment group.

Oaktree entered the Italian bank market as Etruria was being saved by the government. This deal ushered in a lengthy phase of restructuring, which saw several bank failures.

Oaktree worked since to relaunch Progetto through turning its lending businesses digital. Now, Oaktree is seeking bids to value the bank at 10 to 12 times the 2021 profit (41 million euros), according to sources.

Oaktree wanted to set a price of 400 million Euros for the asset. Two sources claimed Oaktree also had a target for 500 million Euros. A third source stated that Oaktree’s Californian fund was looking for an additional valuation.

According to a separate source, there have been contact with Prelios, an Italian bad loan specialist. U.S. fund Davidson Kempner Capital Management also wants to buy the company, but no progress has been made.

Morgan Stanley and Banca Progetto declined to comment.

Progetto nearly doubled its profits in 2021 under the direction of Paolo Fiorentino (ex-UniCredit Manager)

The strong demand for loans that were guaranteed by the state during the pandemic helped to increase its lending to companies to 2.25 billion euro.

Progetto offers personal loans that are backed up by your paycheck. This is similar to rival IBL which withdrew its 2015 listing plans.

Established banks are often challenged by neobanks or challenger banks that specialize in niche markets. They were developed in Italy late in comparison to more dynamic markets like Britain.

Progetto, the first Italian bank, obtained central bank clearance in 2020 to export its whole IT system. It also signed a contract with Amazon Web Services (NASDAQ:) for cloud infrastructure.

($1 = 0.8827 euros)