Gross bad loans at Italian banks 200 bln euros in May - BoI

MILAN, July 12 (Reuters) - Italian banks in May held 200 billion euros ($222 billion) in loans to borrowers deemed insolvent, slightly up from the previous month, data showed on Monday, as lenders continue to suffer from the fallout of a deep three-year recession.

Bad debts have become the focus of concerns over Italian banks because they tie up precious capital and curb already weak profitability.

The Bank of Italy said in a monthly report that “sofferenze”, the worst kind of bad loans, rose to 199.99 billion euros in gross terms in May from 198.35 billion euros in April. Net of writedowns, their value stood at 84.95 billion euros in May from 83.96 billion euros a month earlier.

Reporting by Valentina Za, editing by Isla Binnie