These include banks being helped by Atlante. That price - little more than a tenth of the loans’ gross nominal value - sets a tough market precedent for other banks looking to offload their own piles of non-performing loans without incurring losses that could dangerously deplete their capital. UniCredit has separately sold 18 billion euros of its bad loans at an average price of just 13 cents to the euro, said the first two sources, who declined to be named because the investment writedown and loan pricing are confidential. The fund writedowns are not the only new problem facing the banking sector. Economy Minister Pier Carlo Padoan has also said the money is sufficient to address the needs of weaker lenders, adding the overall banking system is solid. The finance ministry declined to comment on the Atlante writedowns or whether the government was under more pressure as a result.īank of Italy Governor Ignazio Visco said on Saturday the 20 billion euros were enough to recapitalize other banks after Monte dei Paschi. “The 20 billion euros the government has set aside is starting to look like small beer,” said Milan-based banking analyst Vincenzo Longo of brokerage IG. It has already earmarked about a third of that to rescue just one lender, Monte dei Paschi di Siena. That in turn could put more pressure on Rome, increasing doubts over whether 20 billion euros set aside by the government to stabilize the euro zone’s fourth-biggest banking system will be enough, say analysts. UniCredit’s move is also likely to discourage the private sector from pumping any more money into Atlante to bail out weaker banks. The losses, just 10 months into a government-orchestrated campaign to shore up the industry, suggest that mending the sector has become a far more painful task than expected by many industry and government officials.
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They are also likely to write down their investments by 30 percent, according to the source, who did not name the lenders.Ītlante executives have acknowledged that the value of investments has fallen but have said the fund created last April has an investment horizon of five years and aims to create value for its backers over that period.
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#BANK WRITEDOWN SERIES#
A group of about half a dozen other banks that have invested in Atlante have held a series of meetings in recent days to discuss the scale of their own possible writedowns, said another source with direct knowledge of the talks.