UniCredit CEO says credit crunch fears "excessive"

MILAN, July 17 (Reuters) - UniCredit's (CRDI.MI) chief executive dismissed on Thursday as "excessive" fears of a credit crunch in Italy, saying companies had been borrowing money at a rate that was greater than 10 percent just a two months ago.

Alessandro Profumo, who has led the Italian bank to become Europe's fourth biggest through a series of acquisitions, said loans to non-financial companies in May had grown 12.6 percent in May, an albeit slower rate than previous months.

"This trend is coherent with what is happening in the euro zone where loans to companies in May continued to show annual growth rates of more than 14 percent," he said in a letter published in Italian business daily Il Sole 24 Ore.

"The fear ... that there could be a serious reduction in available credit, in our country in particular, seems to me to be excessive," he said.

But Profumo said the reason behind this rate was the fact that companies were not making enough money to finance themselves. This trend resembled the one seen in 2003, when loans grew by an annual rate of 7 percent, he said. The latest batch of figures have reinforced the view that Italy -- as well as the euro zone -- is heading for a recession.

Last week, ISTAT, the country's national statistics bureau, came out with numbers showing industrial output fell 1.4 percent in May. The rate was not only below expectations but also the biggest drop since September last year. (Reporting by Gilles Castonguay; Editing by Ben Tan)