MILAN (Reuters) - Italian banks stepped up writedowns of bad debts in February pushing them to their lowest net level since June 2012, data showed on Wednesday.
The Bank of Italy said that bad debts held by lenders, net of writedowns, fell to 54.5 billion euros in February, from 59.5 billion euros the month before and 64.1 billion euros in December.
Italian banks, which piled up bad debts during the country’s worst post-war recession that ended in 2014, are under strong regulatory pressure to quickly reduce them.
Writedowns ease disposals as they help to close the gap between book values and market prices.
All of the main Italian banks have said in publishing full-year results they would book fresh writedowns in the first quarter as a new accounting principle came into force requiring lenders to book expected, and no longer actual, losses.
When first adopting the new rule, banks are allowed to forego booking ensuing losses in their earnings, though it would still impact their capital.
Before writedowns, bad bank loans in Italy stood at 163.6 billion euros in February, down from 166.7 billion euros in January. They were 203.1 billion euros a year earlier.
Reporting by Luca Trogni, writing by Valentina Za, editing by Susan Fenton