The golden year of Italian banks, with profits nearly tripling on the already impressive results of 2022, did not translate into an equally generous year on the lending front to businesses and consumers. A paradox: banks have never been healthier in the last decade, both in terms of profitability and capital strength, but lending levels have stalled. In fact, the credit restriction tightened throughout 2023 and remains to this day. According to the most recent report from ABI, the Italian banking organization, loans to firms and families fell 2.7% year on year in February 2024. With a disparity between firms and consumers, as the former had a 4% reduction in loan volumes in January while families saw only a 1.3% decrease. Thus, in quantitative terms, loans to households and businesses a totalling of EUR 44 billion were lacking in one year. It is the most unexpected credit crunch, considering that banks are in excellent shape, having thoroughly cleared their balance sheets of the dross of bad loans that have weighted down the books for years. The banks' argument, as given by the ABI, is that there has been a shortage of demand from enterprises, owing primarily to the weakening of the macroeconomic context. Probably, but perhaps supply has also played a role, given the high interest rate environment.
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