Finance

Bob Diamond Gets Behind the Humble Bank Loan—in Risky Italy

The American banker ousted from Barclays after the rate-rigging scandal is betting on the revival of a country burdened by bad debt.

Bob Diamond, chief executive officer of Atlas Merchant Capital.
Photographer: Stefan Wermuth/Bloomberg

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By Edward Robinson, Sonia Sirletti, and Elisa Martinuzzi

February 13, 2018 at 5:01 AM UTC

This article is for subscribers only.

This article is part of the February 19, 2018 issue of businessweek.

To most people, lending money to small Italian businesses looks perilous. In the past decade, Italy became a byword for financial dysfunction as hundreds of billions of euros in bad loans piled up, its third-biggest bank cratered, and a moribund economy triggered a wave of political populism. Who wants to provide credit in such a stormy market? Bob Diamond, the former chief executive officer of Barclays Plc, for one.

This month, Diamond’s private equity firm, Atlas Merchant Capital, stepped up as the top investor in a €600 million ($736 million) investment vehicle led by Corrado Passera, the former head of Intesa Sanpaolo SpA, Italy’s second-biggest lender by assets. Called Spaxs, the venture plans to buy an Italian bank and originate loans for small and midsize companies.