The Unexpected Communication from ABI: The Risk on Mortgages for Italian Businesses

With regard to mortgages there is a big risk that concerns businesses: the ABI has made an unexpected communication.

Italian banks are under strict control by the European Central Bank and Bank of Italy. In fact, much stricter rules have recently been imposed which have also tightened up monitoring by the supervisory bodies.

Despite the crisis involving the American and Swiss banking systemFor now, the Italian banking system appears to be solid and strong. Antonio Patuelli, president of the ABI, thought of reiterating this solidity during the Festival of the Economy in Turin.

On that occasion, President Patuelli underlined how the difficult banking situation poses a big risk to the businesses they have entered into variable loan agreements. Let’s find out what the risks are and what awaits us in the future.

Mortgages at risk: there is little to be serene for Italian companies

Over the past six months, banks have recorded positive results. This data could lead to a misjudgment believing that the positive banking results are mainly or exclusively due to the increase in interest rates on mortgages.

In fact, things are not exactly like that. These positive results were already recorded in 2022, ie before the increase in interest rates by the ECB. Therefore, the positive banking results are in reality the result of a process already undertaken in previous years in which operations of capitalisation, provisions and restructuring.

The situation is different for the companies that have stipulated variable rate mortgagesfor which there is concretely the risk of facing a deterioration of credits and a new crisis of the corporate structure.

In this regard, Patuelli underlined how necessary it is prevent such upsides by setting aside profits. Most at risk are above all business loans taken out with variable rates, which currently amount to 37%. It is, therefore, a large number of companies that see the installment increase month by month, risking a crisis, especially if the rates were to remain high for a long time to come.

It’s about a real domino effect which would lead to the deterioration of bank credits. To avoid this enormous risk, banks will have to do their part, i.e. set aside more profits. This strategy must also be adopted by Italian companies which have had the habit of relying on the most convenient rates, leading to an excess of confidence and a lack of provisions.