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Bank of Italy reports bad loans at 3 year lows

Bank of Italy reports bad loans at 3 year lows

(13 September 2017 – Italy) Newly released data shows bad loans held by Italian banks fell to a three-year low in July. The Bank of Italy said i Italian banks held €173.6 billion (A$208 billion) in insolvent loans in July, down from €192 billion a month earlier. It was the lowest level since July 2014.

The drop reflects a €16 billion euro sale that Italy’s biggest bank UniCredit struck in July with investment funds Pimco and Fortress.

Italian and European regulators are pressuring banks into releasing these impaired assets, however loss-making sales are proving to be the most efficient avenue for the lenders, despite recovery efforts.

UniCredit raised €13 billion in capital this year to offset the hit from writedowns of bad loans that paved the way for the July sale.

Italian banks’ bad debts stood at €65.8 billion (net of writedowns) at the end of July compared to €71.2 billion a month prior, the central bank said.

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