...Recent tax changes on loan provisions will not be sufficient to materially lower banks' impaired loan burden. We do not expect large asset sales that could significantly improve individual banks' credit profiles any time soon despite ongoing negotiations for the sale of Banco Popolare and Unicredit's bad debt units. Although this sale would involve large NPL disposals, media sources are reporting delays to the process for Banco Popolare, citing pricing as the issue. Any NPL sale by Banco Popolare and Unicredit also may not trigger a wave of disposals partially because banks are reluctant to post further credit losses on loans already significantly provisioned for, especially at a time when profitability is under pressure and they are working to strengthen capital....
