Fortress Investment Group has agreed to acquire a significant portion of a €17.7bn portfolio of non-performing Italian loans (NPL) portfolio from Italian banking group UniCredit.

The transaction, at closing, will represent the largest NPL deal in Europe.

Excluding the latest UniCredit deal, Fortress and its affiliates have overall purchased about €22bn of NPLs in Italy since 2000.

The firm’s other key acquisitions include purchase of €13bn in NPLs from Intesa banking group in 2005, and the acquisition of specialised servicer UniCredit Credit Management Bank (rebranded as doBank) last year.

Plans to offload the NPL portfolio were announced by UniCredit last week as part of a major overhaul to boost the company’s balance sheet.

Under this move, UniCredit plans to launch a €13bn rights issue and axe a further 6,500 jobs. The bank said that the rights issue will be used to shed €17.7bn worth of gross bad loans from the bank’s books.