Italy

German airlines group Lufthansa has held talks to take a majority stake in ailing Italian carrier Alitalia and would be interested in a full takeover in the long run, Lufthansa board member Harry Hohmeister said on Monday, Reuters reported. Alitalia, which was put under special administration in 2017, would remain operationally independent within the Lufthansa group, with its own brand, he said. Lufthansa has been a key player in hectic M&A activity in the industry, snapping up Brussels Airlines and parts of insolvent Air Berlin in 2017 to expand in the budget market.

Intesa Sanpaolo SpA is preparing a sale of non-performing loans from a 15.6 billion-euro ($17.8 billion) pool of debt on its books categorized as “unlikely-to-pay,” according to four people familiar with the discussions, Bloomberg News reported. The loans are backed by real-estate and corporate assets, said the people, asking not to be identified because the information isn’t public. The Italian lender has yet to decide how much of the debt it will sell and is still consulting investors to gauge demand, the people said.

Italy’s Carige said on Friday it had issued 2 billion euros ($2.3 billion) in state-guaranteed debt after the Rome government approved the emergency liquidity measure earlier this month to prop up the ailing bank, Reuters. Italy rushed to set up a 1.3 billion euro fund to support Carige after the European Central Bank put the bank under temporary administration on Jan. 2 following a failed attempt to raise new capital from investors. Carige said it had issued two bonds worth 1 billion euros each.

Italian banks became more cautious about lending in the last quarter of 2018, tightening credit standards as well as terms and conditions on their loans, according to the European Central Bank’s latest bank lending survey. This is the second successive quarter of tightening in the Italian banking sector, “partly because they are charging higher interest margins on riskier loans”, said Jack Allen, an economist at Capital Economics, the Financial Times reported.

Banca Monte dei Paschi di Siena SpA just can’t seem to put its troubles behind it. After more than a year of digging itself out from a collapse that ended in a state takeover, the Tuscan lender faces renewed concerns about its capital and profitability, Bloomberg News reported. Along with Banca Carige SpA’s struggles, that’s adding to the perception that Italian banking at large is still far from fixed. Shares of the world’s oldest bank dropped in Milan trading after the European Central Bank highlighted weaknesses in the Italian lender’s capital and profitability.

Banca Monte dei Paschi di Siena SpA is preparing to sell covered bonds and will contact possible investors as soon as next week, a person with knowledge of the matter said. Monte Paschi is attempting to issue the debt after it was unable to complete the second tranche of a bond sale last year amid market turmoil, Bloomberg News reported. The lender said in a statement late Friday that the European Central Bank warned in a letter that its capital position was weaker after abandoning last year’s sale.

Italy’s populist leaders just blinked again. Faced with a potential bank failure that could wipe out thousands of depositors in deputy prime minister Matteo Salvini’s northern base, the cabinet approved state guarantees for any future bond issues by cash-strapped Banca Carige and signalled its support for a possible recapitalisation, The Irish Times reported.

Eurozone supervisors have appointed temporary administrators to troubled Italian lender Banca Carige after a majority of its board members resigned on Wednesday. The European Central Bank announced the decision to appoint three temporary administrators and a surveillance committee to replace Banca Carige’s board of directors and “take charge” of the lender, after executives quit and the mid-sized bank missed a deadline to shore up its financial health, the Financial Times reported.

Italy’s deal with the European Union to defuse its simmering budget dispute is adding to concerns about the country’s real economic problem: a lack of growth, the Wall Street Journal reported. By reining in its spending plans under pressure from financial markets and the EU’s Brussels-based executive, the European Commission, Rome has avoided EU disciplinary proceedings for now. But Italy’s antiestablishment government is also left with few policy plans for boosting growth in a stagnant economy.

Italy’s finance ministry said that it has agreed on a compromise with European Union authorities over the country’s budget deficit, resolving a dispute between Rome’s populist government and EU fiscal enforcers that has vexed financial markets for months, the Wall Street Journal reported. The agreement, which wasn’t confirmed yesterday night by the EU executive, the European Commission, would allow Italy to avoid an EU disciplinary procedure for now.