Italian banks are penultimate in Europe for profitability. This was supported by the EBA, the European Banking Authority, adding that the non-performing loans of our country's institutions are, in percentage terms, three times the EU average.
In fact, for Italy, non-performing loans represent 16,7% of loans granted and 17,1% of GDP, well above the EU average which is 5,6% and 7,3% respectively. Worse than Italy are countries such as Ireland (21,4% of total credits and 23,4% of GDP), Slovenia (28,3% and 9,4%), Hungary (18,8% and 5%) and Cyprus (49,6% and 136,7%).
Lastly, another particularly delicate issue is that of profitability where Italian institutions are at the bottom of the rankings, ahead only of Cyprus. The return on regulatory capital, in fact, is just 5,1% compared to an EU average of 9,1%, based on data at the end of June.
At the European level, according to the EBA, the banks' resilience to shocks has improved: the sector has continued to strengthen its capital (CET1 was 12,8% in June) and this puts it in a position to increase loans to the real economy as shown by the modest increase in exposures in 2015.
However, the level of non-performing loans is worrying, having reached close to 6% of total loans and advances and 10% when only exposures to non-financial companies are considered. The report published yesterday by the European Banking Authority refers to 105 banks from 21 EU countries (14 of which are Italian). For the EBA "the quality of bank assets remains the greatest concern".
