Home Consumer debt UniCredit offers $8 billion relief package for Italian customers hit by price spike

UniCredit offers $8 billion relief package for Italian customers hit by price spike


The headquarters of UniCredit in downtown Milan, Italy, February 4, 2016. Picture taken February 4, 2016. REUTERS/Stefano Rellandini

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  • UniCredit CEO reassures on the quality of the loan portfolio
  • Intesa is also extending its existing aid measures
  • New loans, debt holidays offered

MILAN, Sept 5 (Reuters) – Italy’s second-largest bank, UniCredit (CRDI.MI), on Monday unveiled a package of measures worth up to 8 billion euros ($8 billion) to ease the pain businesses and households hit by record energy costs and a broader price spike.

Chief executive Andrea Orcel said on a press call that UniCredit, which also operates in Germany, Austria and Eastern Europe, was working on similar measures for its other markets, and reassured the quality of the bank’s loan portfolio.

Although UniCredit is aware that many of its customers, particularly in energy-intensive sectors such as steel or ceramics, are struggling, Orcel said loan repayments continued the benign trends seen in the second trimester.

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“Our approach is preventive,” said Remo Taricani, deputy director of the bank in Italy. “We asked ourselves, what can a bank do to help with the structural reduction in household disposable income and business cash flow that we’re going to see in the next two to three months?”

Separately, on Monday, Italy’s biggest bank, Intesa Sanpaolo (ISP.MI), announced that it would provide an additional €2 billion in financing to small businesses to cover energy costs and offer a payment suspension of up to 24 months on existing loans.

UniCredit will offer businesses €5 billion in new loans for up to three years to help them pay their energy bills.

A further €3 billion will be made available through payment suspensions and other measures for credit card and mortgage holders.

Businesses that have not taken advantage of bank debt guarantees made available by the government can apply until December 31 for a 12-month moratorium on their mortgages, UniCredit said.

A suspension of up to 12 months for principal repayment and the possibility of modifying the repayment plan will be granted on 400,000 home loans.

Some 1.4 million credit card holders will have the option to defer their payments for up to six months without rates or fees from October 1 to the end of the year.

($1 = 1.0075 euros)

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Reporting by Valentina Za; editing by Federico Maccioni, Louise Heavens and Leslie Adler

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