Italy’s banks are lending more

Italian central bank in Milan

Italy has suffered a lot from the corona crisis: The country’s economic output has plummeted by almost 15 percent.

(Photo: AFP)

Milan Italian banks significantly expanded their lending to companies during the corona crisis in June. In the month they extended 3.7 percent more loans to companies than a year ago, according to data published by the Italian central bank on Monday. The increase is almost twice as strong as in May, when the increase was 1.9 percent. Italy is one of the countries in Europe that has suffered particularly badly from the corona crisis. The country’s economic output slumped by 12.4 percent in the second quarter.

According to data from the European Central Bank, financial institutions in the entire euro area granted 7.1 percent more loans to companies in June than a year earlier. In view of the stagnation in large areas of the economy, many companies stocked up on loans in order to avoid running into liquidity problems. The ECB supported lending with extensive support programs to maintain the flow of money.

Meanwhile, bad loans fell on the balance sheets of domestic financial institutions in Italy in June. At the end of June, according to data from the Banca d’Italia, they were still 68.05 billion euros after 71.21 billion euros in the previous month.

More: How the corona crisis is exacerbating the job problem in Italy

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