February 7, 2018 / 5:40 PM / 3 months ago

Banco BPM raises bad loan reduction targets

MILAN, Feb 7 (Reuters) - Italy’s third-largest bank Banco BPM said on Wednesday it was stepping up goals to shed bad debts in order to cut their weight over total lending to around 11.5 percent by the end of 2020.

The European Central Bank has stepped up pressure on Italian banks to offload debts that turned sour during a harsh recession ended in 2014. On Tuesday, Italy’s biggest retail bank Intesa Sanpaolo said it would halve its impaired loan burden under a new four-year plan.

Banco BPM, which was born last year from the merger of Banco Popolare with Banca Popolare di Milano, had agreed with the ECB to shed 8 billion euros in problematic debts by the end of 2019 to gain a green light to the deal.

The bank, which has sold 4.5 billion euros in bad debts so far, said it now targeted a 13 billion euro reduction by the end of 2020.

$1 = 0.8148 euros Reporting by Valentina Za; editing by Agnieszka Flak

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