For loans to firms, the ratio rose from 3 to 13 per cent. The requisite provisions for the deterioration in loan quality dent banks’ profitability; in the first nine months of 2013 they absorbed three quarters of operating profit. The return on equity was particularly low. In Italy, the private market in impaired assets is underdeveloped.
Some recent transactions signal interest on the part of specialized investors in managing these assets. The actions under way at a number of banks to rationalize the management of non-performing loans by creating dedicated structures able to enhance the efficiency of the procedures and the transparency of these assets go in the right direction.