“Concerns about the quality of the assets of Italian banks must be taken seriously, but did not overestimate the scale of the problem.” In the final considerations, the governor of the Bank of Italy, Ignazio Visco, points out that the high level of impaired loans was an important place, but points out that “in large part it is covered by collateral whose value has been thoroughly examined in the course the exercise of in-depth assessment of the financial statements of the largest banks in the euro area conducted in 2014; to these are added the personal guarantees. “
According to the Bank of Italy, net of write-downs already made by banks , “the value of impaired loans was slightly below 200 billion. More than half refers to situations in which the difficulty of debtors is temporary. If you focus on the suffering sun, the net value amounts to less than 90 billion” . And there’s more: “The moderate economic recovery underway since last year is being reflected in a significant drop in the flow of new impaired loans; in 2015 they amounted to 3.7% of total loans, compared with 4 , 9% in 2014; for the household sector the flow fell back to pre-crisis levels. the trend toward normalization is continuing. “
in short, the governor holds in high regard the problem of npl, but sees a breakthrough because “even with relatively limited resources at the time, Atlas can show that it is possible to achieve attractive returns by purchasing non-performing loans at higher prices than those now offered by specialized investors.” And, he added, “we believe that the fund has the determination, independence and professionalism to face this challenge successfully; the more we succeed, the more you can collect new investments, fueling a virtuous circle.”
Then a jab to the bail-in and rules on bank bailouts. According Visco the state must be able to intervene to prevent banking crises. “If the banking system has practically eliminated the possibility of using public resources, national or municipalities, as a prevention tool and crisis management. The international experience shows that, in the face of a market failure, timely government intervention can avoid a destruction of wealth, without necessarily generating losses to the state, and often producing gains “, as often happened in the past with the creation of bad banks. According to the governor, “should be recovered wider margins for interventions of this type, as outstanding.”
But in nature Visco considerations do not save a boost to the banking sector. “For many Italian banks it remains a strong need to also cut costs, including those for personnel, acting on the quality and quantity of staff in a manner consistent with market developments and technology. The business model, based on a widespread local presence, is still adequate, continuing the reduction of branches, the number of which fell last year to about 30,000, 11% less than in 2008 “. In 2015, he continued Visco, “the operating costs of banks net -this extraordinary contributions paid into the National Fund risoluzione- remained stable. Their weight on revenues of 64%, just higher than that observed for an average of European groups and lower than that of the main German and French banks. “
in addition” for banks smaller problems stemming from the amount of impaired loans, the lack of diversification of revenue sources and the need to adapt to developments in technology may be acute. In most cases will be dealt with by setting time for business combinations that take advantage of economies of scale and scope, the extent of which may be relevant. ” Why “we must push ahead in this direction, overcoming old logic of mere local coverage that often have contributed to exacerbate, rather than alleviate, the problems of the real economy and the banks themselves.”
As concerns the good bank saved, the divestment procedure “is well advanced and follows strict standards of transparency, fairness and competition is expected to be closed during the summer. the assignee of non-performing loans is preparing the necessary information to their sale on a competitive basis; the operation will contribute to the development of a market for non-performing loans in our country. “
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