Rome, Dec. 14 (Xinhua) -- The stock of non-performing loans (NPLs) in the books of Italian banks decreased sharply in 2018 and for the second consecutive year, the Italian Banking Association (ABI) said on Friday.

In its second Outlook 2018 -- issued twice a year with data provider and debt collector Cerved Group -- ABI said gross NPLs stood at about 120 billion euros (135.6 billion U.S. dollars), considering data up to September (the latest available).

It showed a 30.7 percent drop compared to the same month of 2017, with a relevant 31.1 percent decline for what concerned credit to businesses.

"Net non-performing loans... which represents the real residual risk in banks' balance sheets, actually stand below 40 billion euros," ABI wrote.

This figure marked "a 39.4 percent drop compared to 66 billion euros registered in Sept. 2017, and a 55 percent drop against the peak in Nov. 2015."

During Italy's double-dip recession between 2008 and 2013, in fact, the country's banking sector saw NPLs reaching a peak of 360 billion euros gross in 2015, according to the Bank of Italy.

In its report, the ABI said the recent improvements resulted from the lenders' disposal of their NPLs on the one hand, and by a confirmed reduction in new bad loans on the other.

The rate of bad loans to non-financial firms followed a positive path, falling in terms of amount from 3.4 percent in the Q3 of 2017 to 2.8 percent in the same quarter of 2018, and in terms of number from 3.3 percent to 2.6 percent, respectively.

The volume of new impaired loans arising from companies was estimated to reach a total of 14 billion euros overall in 2018, with a 25.8 percent decrease against 19 billions registered in 2017, according to the report.

The overall number of non-performing loans in 2018 was expected to stand at about 15,000, declining by some 18 percent against 2017, and by some 45 percent against 2014.

Taking into account a macro-economic scenario in which the Italian economy would grow by just over 1 percent, "the forecasts made on the basis of the ABI-Cerved models show this downward trend will continue throughout the next two years, although at slower pace than forecast in our previous report," ABI said.

The ratio of new NPLs was projected to fall from 2.4 percent in 2018 to 2.3 in 2019, and 2.1 percent in 2020.

Considering the companies' size, the report forecast the decline of new NPLs would continue at a higher rate among micro and small enterprises, while stabilizing at the minimum levels registered in the last decade among all other companies.

Italian lenders overall showed a stock of 167 billion euros in gross bad loans (of which 117 billions to non-financial companies), and 64 billion euros in net bad loans in 2017, the ABI-Cerved previous Outlook showed in February. (1 euro = 1.13 U.S. dollars) Enditem

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