Italy

Italian banks are being backed by some investors to withstand tougher European Central Bank rules on bad-loan provisioning that sent their shares tumbling, Bloomberg News reported. A 6.9 percent drop in a gauge of the nation’s lenders in the six days through Tuesday was blown out of proportion, according to Ronald Petitjean, a Paris-based fund manager at LA Francaise Inflection Point. With the International Monetary Fund increasing its growth forecasts for Italy on Tuesday, a resilient economy will disprove any concerns about the health of the country’s banks, he says.

After tackling billions of dollars in bad loans, Italian banks are moving on to a somewhat less risky but possibly trickier category of distressed debt as they seek to clean up their balance sheets, Bloomberg News reported. “Unlikely-to-pay loans are the next challenge for banks,” said Riccardo Serrini, chief executive officer of the asset manager Prelios Credit Servicing.

The stock of bad debts held by Italian banks fell by a record amount in July, in a sign that Italy’s struggling financial sector is starting to benefit from stronger economic growth and greater investor interest, the Financial Times reported. The total volume of bad debts shrank by €18bn, or nearly 10 per cent compared with the previous month, to €173bn — the largest decrease since the Bank of Italy started to record data in 1998. The stock of bad loans is now at its lowest level since 2014.

A group of Alitalia employees is preparing to join up with a non-European carrier and two Italian financial partners to bid for the insolvent airline, Italian weekly Panorama reported on Wednesday. Rome is looking for a buyer for all of Alitalia, which is under special administration for the second time in a decade, Reuters reported. Around 10 bidders, including Ryanair, have expressed an interest in acquiring all of the carrier or part of its assets.

Rome’s mayor on Friday launched an attempt to save the city’s ailing public transport company from bankruptcy, asking creditors to support a restructuring of its 1.3 billion euros ($1.54 billion) of debt, Reuters reported. Virginia Raggi, a prominent face of Italy’s anti-establishment 5-Star Movement, said she would ask magistrates to approve the plan for a “total renewal” of the company to keep it operating as a public body. Atac’s workforce, of around 12,000 people, has been criticized as bloated and its fleet of buses, trams and metros as old and badly maintained.

Ryanair will bid to operate 90 planes under the Alitalia brand and using existing staff as part of the Italian airline’s restructuring, Chief Executive Michael O’Leary said on Thursday. Ryanair has until Oct. 2 to make a binding bid for all or part of the Italian carrier, which has been put under special administration for the second time in less than a decade, Reuters reported. “We will be submitting an offer for the 90 jet aircraft, with their pilots, cabin crew, routes etc,” O’Leary told journalists at a press briefing in London.

The number of employed Italians has risen above 23m for the first time since 2008, boosting hopes that the recovery in the eurozone’s third-largest economy is gathering pace, the Financial Times reported. Istat, Italy’s statistical agency, said on Thursday that employment had increased in July by 59,000 compared with the previous month. Combined with upward revisions to June data, this lifted employment to the same level it was at in the early stages of the financial crisis. The data add to evidence that Italy is latching on to the eurozone recovery.

The Italian government faces a paper loss of more than 30 percent on its 3.85 billion euros ($4.54 billion) rescue of troubled lender Monte dei Paschi di Siena, according to grey-market trading in the bank's new shares. The world's oldest lender has not formally traded on the Milan bourse since December when the bank failed to raise enough capital to remove the threat of collapse, the International New York Times reported on a Reuters story. In July, Rome bailed it out, paying 6.49 euros per share for a controlling stake.

Most experts debating bail-in and bail-out strategies agree that banks should build capital and shrink balance sheets as the best way to avoid a collapse and rebuild after one. But researchers are suggesting a more personalized version of that recipe that makes the difference between life and death for struggling firms, a Bloomberg View reported.

The Italian government is hoping to avoid the break-up of Alitalia by insisting it will give preference to bids for the entire company at the launch of the final stage of its sale out of bankruptcy, the Financial Times reported. On Tuesday, the state-appointed commissioners running the airline since it collapsed into administration in May set out the key conditions for tabling bids in the upcoming public tender. They specify offers for all of Alitalia, or separate bids for the airline operations, which includes maintenance, and for the group’s airport ground handling activities.