June 18, 2019 / 5:35 AM / a year ago

Creval says to spin off bad loans, triple net profit by 2021

MILAN, June 18 (Reuters) - Italian mid-sized lender Creval said on Tuesday it would spin off its bad debts into a separate unit and sell half of them, in order to roughly halve its gross soured loan ratio to below 6.5% in 2023.

Presenting a five-year business plan under new CEO Luigi Lovaglio, Creval said cost cuts and additional revenues would allow it to meet a 93 million euro net profit in 2021, compared with 32 million euros last year.

The bank, which last year raised 700 million euros in capital to fund a balance-sheet clean-up, said it would keep its core capital above 14 percent of assets both in 2021 and 2023, from an end-March level of 14%.

Reporting by Valentina Za, editing by Giulio Piovaccari

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