The government-backed securitisation scheme has helped turn Italian banks’ balance sheets around. But as Covid-19 support measures ease, NPLs are expected to rise again.

In April 2021, Italy’s NPLs totalled €52.1bn — the lowest level for more than a decade. GACS-backed disposals amount to €87bn and in June this year, the scheme was extended for another year until 2022. Further portfolio sales that did not make use of the GACS guarantee have also contributed to the drop on NPLs.