Italian Banks’ Situation ‘Difficult But Manageable’: Minister

Italian banks can deal over the next two to three years with a pile of bad loans that grew during a deep recession, the country’s economy minister said, adding the situation of their balance sheets was “difficult but manageable.”

“A two-, three-year horizon is a reasonable time frame,” Economy Minister Pier Carlo Padoan told a business conference Saturday. “Following the crisis, banks’ balance sheets are in a difficult situation — some more than others — but it’s a manageable situation.”

Italian banking stocks have lost 40 percent this year as investors fret about a large number of bad loans amid negative interest rates that are hurting profits.