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ABI says Italy's credit squeeze to continue

Bank group sees lower profits, higher non-performing loans

20 December, 12:28
ABI says Italy's credit squeeze to continue (ANSA) - Rome, December 20 - The Italian Banking Association (ABI) on Friday said Italy's credit squeeze will continue to get tighter next year, after bank loans shrank nearly 3% in value in 2013. ABI also said bank profits would be lower and non-performing loans higher in 2014 than previously forecast.

Banks are expected to see net profits of 3.6 billion euros over the three-year 2013-2015 period, down from an estimate of 5.5 billion, ABI said.

Non-performing loans are expected to grow 13.2% in 2014, compared to the 20% increase that hit banks in 2013. Growth in bad credit will slow by 2015 to a little over nine per cent, but not reverse the trend.

ABI also said Italy's record unemployment levels will not improve significantly until 2015, when the number of jobs are expected to increase by 1.2%. ABI said public administration jobs will stabilize overall employment levels next year, adding that those are set to edge upward 0.1% over current figures. Excluding public payrolls, however, ABI reckons employment in Italy will worsen in 2014.