MILAN, Feb 9 (Reuters) - Italian banks' lending to businesses came to a standstill in December, in the weakest performance since the COVID-19 outbreak in the country, Bank of Italy data showed on Thursday.
A monthly report on the balance sheets of domestic banks showed loans to non-financial companies were flat year-on-year in December compared with a 2.7% expansion the previous month.
It was the worst data since February 2020, when corporate lending fell 1.2% annually as the COVID-19 pandemic broke out in Italy.
The central bank did not provide any details on the reasons behind the flat corporate loans, and did not immediately respond to a request for comment from Reuters.
Extraordinary government support measures during the pandemic and the energy crisis have fuelled strong growth in corporate bank lending, but the trend has weakened as support measures got gradually unwound.
Italy's biggest bank Intesa Sanpaolo (ISP.MI) sharply cut its stock of existing loans at the end of last year, possibly contributing to offset any rise in lending.
Intesa shed 29 billion euros ($31 billion) in risk weighted assets to boost its capital reserves ahead of planned regulatory changes to its risk models that are set to eat into its buffers.
Thursday's data also showed Italian residents' deposits with domestic banks were down to 2.71 trillion euros ($2.92 trillion) compared with 2.74 trillion euros the previous month.
Gross unpaid loans fell to 30.15 billion euros at the end of December from 34.01 billion euros a month earlier.($1 = 0.9293 euros).
($1 = 0.9283 euros)
