Italian banks may take a many years to fix problems

2017-07-17 08:56:30

(MENAFN) Morgan Stanley said on Monday, adding that setting up a ""bad bank"" could help that Italian banks could take a very long time to reduce their level of non-performing loans to the European average.

One third of Europe"s total, while a clogged judicial system and sluggish economic growth made it tough to recover non-performing debts, adding that stagnation that ended in 2014 saddled Italian banks with 349b Euros U.S 400b in impaired debts.

Adding, a lot of series of state-led steps involving capital injections and a plan to bailout Monte dei Paschi, the world"s oldest bank, have provided some relief.

""We believe progress has been made but vulnerabilities remain, with 60 billion-70 billion euros of non-performing loan disposals still in the pipeline and almost 10 years to reach European NPL levels at the current rundown rate,"" Morgan Stanley said.

Analysts at the U.S. bank said establishing a ""bad bank"" or a publicly-funded asset management company would be a key step towards resolving Italy"s NPL problem.

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