January 25, 2018 / 6:02 PM / 6 months ago

UBI CEO says ECB wants to see 'single digit' soured loan burden soon

MILAN, Jan 25 (Reuters) - European Central Bank supervisors want lenders to reduce the weight of their soured loans to a single digit percentage of total debts fairly quickly, the head of Italy’s fifth-largest bank said.

Italian banks are under pressure to cut loans that turned sour due to an economic slump and still account for 16 percent of total lending three years after the recession ended.

Italy’s slow-moving judicial system and the sheer size of the problem means that a speedy reduction can only be achieved through sales which are normally carried out at a loss. UBI CEO Victor Massiah told reporters on the sidelines of an event that UBI was not obligated to sell.

He declined to give a target for UBI’s soured loan ratio but said it was “very clear that regulators wish to see a single-digit, and not a double-digit ratio, over a relatively short timeframe.” (Reporting by Andrea Mandala, writing by Valentina Za, Editing by Crispian Balmer)

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