January 14, 2020 / 2:02 PM / 14 days ago

Italian banks net NPL ratio fell to 1.70% in Nov, lowest since July 2010-banking assn

ROME, Jan 14 (Reuters) - The ratio of non performing loans (NPLs) to total outstanding loans for Italian banks fell in November to 1.70% from 1.78% in October, the lowest level since July 2010, Italian banking association ABI said on Tuesday.

Italian banks are expected to continue to reduce their impaired loans by a net 15 billion euros ($17 billion) a year in the next few years, ABI said last November.

ABI forecast Italian banks would lower their aggregate soured loan burden to just above 5% of total lending in 2022, approaching a threshold which has become a new benchmark for lenders based on guidelines by the European Banking Authority.

The average rate that banks charged on new loans to firms decreased to 1.27% in December 2019 from 1.29% the previous month, while rates on new home mortgages slightly increased to 1.47% from 1.43%.

Despite low rates, loans to non-financial companies dropped 1.9% year-on-year in November, to reach their lowest level since May 2015, due to weak demand for investment financing, ABI said. (Reporting by Stefano Bernabei; editing by James Mackenzie)

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