Bad loans in Italy hit 14-year high
Bad loans at Italian banks climbed to the highest in almost 14 years as the nation's economy endured its longest recession since World War II and sovereign-debt risks drove up funding costs for companies.
Gross non-performing loans as a proportion of lending increased to 7.5pc in September from 5.9pc a year earlier, according to data published by the Italian Banking Association yesterday. That's the highest since November 1999 and up from 3pc in June 2008, prior to the financial crisis, said the Rome-based association, known as ABI.
"Because of the prolonged economic recession, the credit risk in Italy is further increased," said Gianfranco Torriero, head of strategies and financial markets at ABI.
Italian firms and families are struggling to repay their debts as unemployment rises, forcing banks to set aside more money for soured loans.