In 2013, Italian banks will continue to increase provisions for loan losses. This is foreseen by the Fitch rating agency, underlining that “the outlook for the sector remains negative, as banks find themselves having to face another difficult year dominated by economic uncertainty”.
In any case, "we believe that the strongest banks should be able to manage the increase in provisions, generating profits despite the weak economic situation for profits", the press release continues.
Fitch expects Italy's economic recovery to begin in the second half of this year and that any postponement will weaken asset quality and bank profitability. According to the agency, it will be important for Italian banks to maintain an adequate capital endowment to try to counteract the worsening of the economy. If they fail, ratings will come under pressure.
