MILAN, Sept 9 Italian bank loans to borrowers
deemed insolvent rose in July to 198.3 billion euros ($223
billion), central bank data showed on Friday, highlighting the
strain on the banking system left behind by a long recession.
Bank of Italy said on Friday bad loans, or 'sofferenze',
were up from 197.9 billion euros in June, when they had marked a
Bad loans are the major focus of concerns over Italian banks
as they tie up capital and sap profitability at a time when
profits are already suffering due to a stagnant economy and
negative interest rates.
With insolvent loans curbing fresh credit, lending to
non-financial firms in Italy fell 0.5 percent in July after a
0.1 percent dip in June, the Bank of Italy said in its monthly
bulleting on the banking sector.
(Reporting by Valentina Za)