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UPDATE 1-UniCredit could use 14-15 bln euros of ECB's long-term funds-CEO
July 10, 2014 / 7:51 AM / 3 years ago

UPDATE 1-UniCredit could use 14-15 bln euros of ECB's long-term funds-CEO

(Adds other CEO comments, background)

MILAN, July 10 (Reuters) - Unicredit, Italy’s biggest bank, could draw on 14-15 billion euros of the European Central Bank’s new long-term refinancing operations, the bank’s CEO said on Thursday.

“These are numbers we’re still trying to determine fully but I think that at the group level we could reach 14-15 billion euros, about half of which in Italy,” Federico Ghizzoni told La Stampa newspaper.

A spokesman for the bank confirmed his comments.

In June, the ECB said it would give European banks fresh access to long-term loans with the aim of improving lending to euro zone companies.

Italian companies have been hard hit by the economic crisis as banks cut back lending to put a lid on the growth of non-performing loans.

Ghizzoni said the bank would use the ECB funding to help provide businesses with loans for investments in their production activity.

“If, for example, the ECB cash costs us 50 basis points less (than on the market) we would be ready to pass on most of this ”discount“ to businessmen,” Ghizzoni said.

UniCredit, like other Italian lenders, has been selling portfolios of bad loans to try and strengthen its balance sheet.

Ghizzoni told La Stampa in the first quarter of the year, for the first time in seven years, problematic loans had stopped growing. “The trend in the second quarter also seems to be good and in line with the first,” Ghizzoni said.

He said the bank was always on the market for the sale of loan portfolios.

”We did a billion and a half in the first quarter and we should soon be doing other operations for a similar amount, Ghizzoni said. (Reporting by Stephen Jewkes; editing by Oleg Vukmanovic and Jane Merriman)

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