ROME, 30 May - Twice as many Italian banks were
placed under special administration last year than in 2012 amid
supervisory efforts to assess the damage caused to lenders from
a two-year economic recession, a Bank of Italy report showed on
The annual report on lender oversight by the central bank
showed that special administrators were named to run 11 banks
last year, up from five new cases in 2012. At the end of
February, a total of 13 Italian banks were being managed by
officials chosen by the central bank, it said.
The regulator said the decision to put a bank under special
administration is based on factors including low levels of
capital, serious irregularities in the way banks were run, poor
internal controls and lack of compliance with rules against
Last year the Bank of Italy carried out 1,369 supervisory
actions in the form of letters of reprimand sent to banks and
interviews with bank managers. That was a 9 percent increase on
the previous year.
Italy's longest post-war recession left its banks saddled
with 319 billion euros ($434.33 billion) in impaired loans as
scores of businesses went bankrupt during the slump.
"The outcome of assessments run in 2012-2013 mirrors the
worsening of credit quality due to the persistently negative
economic situation which has led banks to increase provisions
against impaired loans," the report said.
"The negative impact on banks' profitability was not offset
by revenues or lower operating costs."
Domestic banks must improve their governance and control
systems, the regulator warned, while it praised lenders' efforts
to raise fresh capital.
A total of nine Italian banks have plans to raise nearly 11
billion euros in cash from investors to strengthen their capital
reserves. They are part of a group of 15 Italian lenders under
scrutiny from European authorities in a health check of euro
zone banks this year.
Of the capital increases announced so far, the biggest is
planned by Banca Monte dei Paschi di Siena, which is
aiming to raise 5 billion euros in June.
($1 = 0.7328 Euros)
(Reporting by Valentina Za; Editing by David Goodman)