Italy's banks under fire over laborious rollout of state-backed loans
Reuters
Published Apr 22, 2020 16:41
By Stefano Bernabei
ROME (Reuters) - Italy's banks came under fire at a parliamentary hearing on Wednesday where they faced accusations of hampering the rollout of state-guaranteed loans to businesses hit by the coronavirus.
Two weeks after the government approved emergency liquidity measures to prop up the economy, Italian firms on Monday started requesting loans of up to 25,000 euros (21,970.68 pounds).
Under the measures, the 100% state guarantee on such loans should exempt banks from needing to assess creditworthiness. However, banking and union officials have said some lenders are carrying out more in-depth checks than required.
"There have been a number of requests, which are not envisaged by the law, from leading banks asking for financial statements, business plans and other documents," League MP Massimo Bitonci told the hearing.
Giovanni Sabatini, the director general of Italian banking lobby ABI, said that credit and anti-money laundering checks were necessary for all state-guaranteed loans other than the smaller ones worth up 25,000 euros.
"To speed up procedures the law should shield banks from legal consequences," Sabatini said.
However, he said ABI had also been informed that some banks were requesting financial or income statements from borrowers for the smaller loans.
"We worked alongside the Treasury to clarify that banks can rely on what companies declare and there is no need to go over their earnings statements," Sabatini said.
The legal dangers banks face under Italian law if borrowers default are making them tread very carefully, banking officials have told Reuters, delaying much-needed support.
"Banks are doing their best but they certainly cannot solve all the problems of the Italian economy alone," ABI said in a statement on Monday.
The rollout of the liquidity measures this week has led to tensions between bank staff and customers, according to unions, culminating in a package containing a petrol tank and a bullet being left inside a bank branch.
"Actions have been flagged on the part of banks which are not in line with the spirit and the text of the decree," Claudio Mancini, of the ruling PD party said.
Mancini said that banks had also been telling companies to use part of the money received under the scheme to pay down their existing debts.
Italian banks are bracing for a new wave of corporate defaults just as they were emerging from a painful restructuring to rid their balance sheets of the legacies of past recessions.
On Wednesday UniCredit (MI:CRDI) became the first major euro zone bank to say it would write down the value of its loans to reflect the economic hit from the new coronavirus - increasing pressure on rivals to follow suit.
Get The App
Smaller peer BPER Banca (MI:EMII) said it was considering whether to do the same.
BPER CEO Alessandro Vandelli said the bank had received 3,000 requests for loans with a 100% state guarantee in the first two days and was working to speed up procedures.
(Additional reporting and writing by Valentina Za; Editing by Kirsten Donovan)
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.