According to Italy’s central bank, in March of this year, non-performing loans (NPLs) rose to a record EUR189.5bn. This is a 15% increase over March of the last year and although it marks a slowdown in the pace of NPL growth compared to 2014 it still is an unwelcome addition to the heap of problematic loans in Italy.
Bad loans have been rising at breakneck speed since 2009 in Italy, quadrupling in volume by March of 2015. A research paper by Nadege Jassaud and Kenneth Kang from the International Monetary Fund points out that this growth has not been matched by a proportional rise in provisions - in June of 2014 provisioning coverage was 42%, six percentage points lower than in 2007.
