MILAN – Shares in Intesa Sanpaolo fell by 2% on Friday after Bloomberg reported Italy’s biggest bank was cutting as much as 20 billion euros ($22 billion) in risk-weighted assets to address supervisory remarks about its inadequate risk models.
Italian daily Il Sole 24 Ore reported on Thursday the European Central Bank had taken issue with the risk models of several Italian banks.
Requests to increase risk weights on loans threatened to wipe from as little as 20-30 basis points to more than half a percentage point off banks’ core capital ratios, the paper said.
Il Sole said banks had taken action to avoid the capital hit by shifting to capital-light businesses, transferring risks to investors through so-called synthetic securitisation deals or shedding assets altogether.
Intesa Sanpaolo declined to comment.
($1 = 0.9232 euros)