The chief executive of Italian bank UniCredit, Federico Ghizzoni, confirmed on Tuesday that his bank and Intesa Sanpaolo were in talks with KKR over a vehicle to house restructured loans from both lenders. “It’s a project concerning [loans to] restructured companies, so it’s not a bad bank,” he told reporters.
“There is also the possibility of injecting equity into these companies,” he added.
As of 31 September, UniCredit had a total of €8.1 billion in gross restructured loans on its books, while Intesa had €2.5 billion.
Italian daily La Repubblica first reported the talks last week, suggesting that KKR would invest in the vehicle with the two banks holding a minority stake that would allow them to remove the loans from their balance sheets.
Ghizzoni added that a systemic ‘bad bank’ of the kind set up in Ireland and Spain had not been discussed with Italian prime minister Enrico Letta. Ignazio Visco, governor of the Bank of Italy, encouraged Italian banks at the weekend to clean up their balance sheets by offloading bad loans before European regulators conduct a health check of the country’s banking sector.