June 25, 2018 / 1:55 PM / 9 months ago

Italian cooperative banks urge government not to delay sector reform

MILAN (Reuters) - Two associations of small cooperative banks affected by a reform that could be reviewed under Italy’s new government, called on Monday for the sector overhaul to proceed as scheduled.

The far-right League party, which is part of the ruling coalition, has asked for a moratorium of a reform that is forcing hundreds of cooperative banks (BCCs) to merge into two large groups.

The reform passed by the previous centre-left government in 2016 aims at strengthening these banks, which are often tiny and have low profitability and a higher-than-average bad loan burden.

“It’s in everybody’s interest, and especially that of the banks involved as well as shareholders, businesses and local communities, that the reform kicks off as expected with the creation of the cooperative banking groups at the latest by Jan. 1, 2019,” banking associations Confcooperative and Federcasse said in joint statement.

The statement was also signed by the holding companies of the two new groups, Iccrea and Cassa Centrale Banca, and Cassa Centrale Raiffeisen which will head a third, smaller group.

Reporting by Valentina Za; Editing by Alexander Smith

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