* TLTRO programme could raise Italy GDP 0.5 pct by 2016
* ECB ready to consider acquisition of assets after TLTRO
* State intervention could help banks offload NPLs
(Adds details from statement, data, comments from UniCredit)
By Giuseppe Fonte
ROME, July 10 Italian banks could draw more than
200 billion euros ($272.81 billion) of funds the European
Central Bank is due to offer as part of a new long-term loan
programme worth up to 1 trillion euros, Bank of Italy Governor
Ignazio Visco said.
Speaking to an audience of Italian bankers on Thursday,
Visco also said the ECB loan programme could raise Italy's
anaemic gross domestic product by between 0.5 percent and 1
percent by 2016, when the offer is due to end.
"The amount potentially available to Italian banks is
considerable, it could exceed 200 billion euros over the entire
time-span of the programme," Visco said.
Announced in June, and intended to boost lending to euro
zone companies and thus spur economic growth in the bloc, the
new targeted long-term refinancing operations (TLTROs) are due
to start later this year.
Federico Ghizzoni, Chief Executive of Italy's biggest bank
UniCredit, said in an interview earlier on Thursday
his bank could take 14-15 billion euros of TLTRO loans and would
pass on the cheap financing rates when lending to businesses.
Visco said the full impact of the programme on the Italian
economy would depend on how Italian banks use the new loans.
Recent data are casting doubt on Italy's ability to emerge
decisively from its longest recession in 70 years.
The country's GDP fell by 0.1 percent quarter on quarter in
the first three months of this year, and figures on Thursday
showed industrial output fell 1.2 percent in May from the
previous month, the steepest drop since November 2012.
Economic recovery in Italy "is struggling to take hold",
He reiterated that the ECB is ready to consider new measures
if needed to lift euro zone inflation towards its 2 percent
target, including large scale asset purchases, something ECB
chief Mario Draghi also restated on Wednesday.
Turning to Italy's banking sector, saddled with around 165
billion euros of bad debt, Visco said state intervention could
help banks offload their capital-consuming non-performing loans
(NPLs). But any action should be in line with EU rules.
Banks have started to dispose of chunks of their bad-quality
loans to specialised investors, but sales have been slow.
Transactions in the first months of 2014 are expected to cut the
overall stock of NPLs by a meagre 5 billion euros, Visco said in
Investors say uncertainties over loan valuations and the
lack of a state guarantee on the worst-quality loans are a
hurdle to these sort of deals.
Visco also said the euro zone crisis and the thorough review
of banks' balance sheets that followed has exposed "inadequate,
imprudent and incorrect" behaviour at some Italian banks.
($1 = 0.7331 Euros)
(Reporting by Giuseppe Fonte and Francesca Piscioneri; Writing
by Lisa Jucca; Editing by Catherine Evans)