The supervisory review and evaluation process (SREP) for 2015 highlighted the persistence of several weaknesses, most importantly the share of non-performing loans. This was partly due to the highly expansionary lending strategy pursued before the crisis, which the bank is now actively addressing. Structural solutions have also been called for, such as mergers with other credit institutions.
In the case of Carige, in recent years the Bank of Italy’s supervisory activity focused on the group’s weak capital position, which failed to meet the highest standards of Basel III that were about to be introduced, the progressive deterioration in the quality of its loan portfolio, and malfunctions in corporate governance arrangements and controls.