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Monte Paschi sells bad loans to Fortress
June 10, 2014 / 6:00 AM / 4 years ago

Monte Paschi sells bad loans to Fortress

MILAN, June 10 (Reuters) - Banca Monte dei Paschi di Siena said on Tuesday it had sold 500 million euros ($680.75 million) of bad loans to U.S. private equity firm Fortress Investment Group, the latest in a raft of disposals of sour loans by Italian banks.

In a statement, Italy’s No.3 lender said however that the economic impact of the sale would not be significant as these assets are normally sold at a deeply-discounted price.

Italy’s worst economic recession in 70 years has lifted bad loans at Italian banks to a record 166.4 billion euros in April, forcing banks to put aside more and more capital to cover for potential losses and curbing their ability to lend to companies.

Loss-making Monte dei Paschi, which started on Monday a 5-billion-euro capital increase, has the biggest portfolio of bad loans among Italy’s top banks. ($1 = 0.7345 Euros) (Reporting by Lisa Jucca; Editing by Miral Fahmy)

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