(Adds details)
MILAN, Feb 9 (Reuters) - Italian banks' lending to
businesses came to a standstill in December, in the weakest
performance for three years, 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 first month to show no growth 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.
Extraordinary government support measures during the
pandemic and the energy crisis fuelled strong growth in
corporate bank lending, but the trend has weakened as support
measures have been gradually unwound.
Italy's biggest bank Intesa Sanpaolo sharply cut
its stock of existing loans at the end of last year, a drop
which likely contributed to a reduction in the overall stock of
banks' corporate loans.
Banks can cut their stock of loans by selling them to
investors or paying investors to take on the risk they carry.
Banks' corporate loans totalled 649.2 billion euros at
the end of December, down from 666.3 billion euros a month
earlier.
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 fell to 2.71 trillion euros ($2.92 trillion)
compared with 2.74 trillion euros the previous month.
Gross unpaid loans declined 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)
(Reporting by Alessia Pé and Valentina Za, editing by Alvise
Armellini and Gavin Jones)
