World Economy

Italian Banks Return to Profits

Italian Banks Return to ProfitsItalian Banks Return to Profits

Italian banks are looking healthier now than they have for the past few years and will continue to heal in 2018, Standard & Poor’s Global Ratings said in a report on Tuesday evening, Xinhua reported. The ratings agency said improved private-sector creditworthiness, coupled with banks’ efforts to repair their balance sheets, have paved the way for “a return to some moderate profitability” in the current year. Lenders strengthened their capital, bolstered loan-loss reserves, reduced their stocks of nonperforming loans, and cut costs, according to S&P analysts. On the downside, S&P estimated that at year-end 2017, banks still held toxic loans worth €275 billion ($336.4 billion) on their books.

This was down from €349 billion worth of gross NPLs held by Italy’s banks at the end of 2016, according to the finance ministry’s 2017 economic and financial document.

Italy is slowly pulling out of two economic recessions that were sparked by the global financial crisis of 2008 and by the sovereign debt crisis of 2010.

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