Banks' Gross Loans Listed on the Italian Stock Exchange

This study focuses on the groups of banks listed on the Italian Stock Exchange. In particular, we have chosen those listed on the sectoral index called FTSE Banks. In this group of banks, we focused on the analysis of the Gross loans and the related Reserves for impaired loans in the period between 2005 and 2013. Moreover this study can help us understand the context and the main business in which banks operate. Data were extracted from a database, called Bankscope, which is a database containing comprehensive information on financial companies (banks and insurance companies) in Italy. The aim of this study is to monitor the role of Net loans for banks in terms of impact on total assets and, consequently, the trend of the reserves for impaired loans. Then in this research we would investigate also the correlation between the credits and their related Reserves of impaired loans. The Pearson correlation ratio is used in order to find a correlation between the two quantities. Our research reveals that reserves for impaired loans will be one of the most strategic items of bank balance sheets. Under these provisions, administrators will influence the income statement of the bank. Our findings raise important issues on one hand on necessary policy supervision of the banking system and on the other a concern regarding gross loans with a steady increase in impaired loans and ultimately the possibility of mergers between banks for more efficiency policy risk.