The grip on credit is getting tighter according to data from the Bank of Italy. In June, loans to the private sector recorded an annual contraction of 3,0%, which accentuates the contraction of 2,4% recorded in May. In particular, loans to households fell by 1,0% over twelve months as in the previous month, while those to non-financial companies decreased by 4,1% after the -3,6% recorded in May.
The greater selectivity in the disbursement of credit has allowed for a slight drop in the rates applied. The interest rate on new loans to non-financial companies of less than one million euro decreased to 4,30% (4,36% in the previous month), while the interest rate on loans above this threshold decreased to 2,77% (2,93% in May).
With reference to loans granted to households for the purchase of homes, the rates fell to 3,90% (3,94% in May). Instead, those on new consumer credit disbursements remained substantially stable at 9,55%.
Bad loans also fell, according to the data contained in the Supplement to the Statistical Bulletin "Money and Banks" prepared by Bank of Italy. The 12-month growth rate of bad loans was 22% in June, a slight slowdown from 22,4% (revised) in May – the highest since the start of the series in 1998.
Lastly, the raising of capital by Italian banks is continuing well. Private sector bank deposits once again showed an increase - by 6% in June - albeit slowing down from the 7,1% per annum in May.
