Italian Banks Most Exposed to Virus-Hit Sectors, Risking Capital

Italian banks have the highest portion of loans to industries suffering the most from the coronavirus pandemic, making their capital buffers more vulnerable to any deterioration in asset quality, Bloomberg News reported. Credito Emiliano SpA, Banco BPM SpA, BPER Banca SpA and Unione di Banche Italiane SpA top the list of more than 100 European banks exposed to industries badly hurt by the crisis, according to a research conducted by Eric Dor, director of economic studies at the IESEG School of Management in Lille, France. “Loans to depressed sectors by several Italian banks are more than four times larger than their CET1 equity, so their capital would be wiped out if 25% of their loans default,” Dor said in a phone interview. Read more