MILAN (Reuters) - Cassa Centrale Banca (CCB) aims to sell 2.5 billion euros ($3 billion) in bad loans by the end of 2019, a source familiar with the matter said, as the Italian banking group prepares to move under European Central Bank’s oversight.
Following a government reform of the sector, hundreds of small cooperative lenders in Italy are set to merge and create three larger group.
Two of them, CCB and Iccrea Banca, will undergo an asset check-up later this year as supervision switches from the domestic to the European regulator.
The Bank of Italy, or central bank, has urged them to clean up their balance sheets and prepare to boost capital if necessary.
Italian banks hold about 300 billion euros in debts that turned sour during a deep recession that ended in 2014.
CCB plans to shed the bad debts in three tranches, through outright sales and securitization deals, the source said, confirming a press report.
The first tranche is expected to hit the market this year, followed by a second one in early 2019. A remaining portion worth between 500 million and 700 million euros is expected in the final part of next year.
CCB sold soured loans worth 885 million euros last year.
Reporting by Giulio Piovaccari