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Credit quality of Italian Mgcis: an empirical comparison with mutual banks

Enrica Bolognesi, Alberto Dreassi
December 2014 - n. 1
Jel codes: G01, G21, G23

This paper investigates the portfolio quality of Italian supervised Mutual guarantee credit institutions in 2011-2012 by analysing the relationship between non-performing ratios, size, performance, regulatory capital and efficiency of intermediaries. We apply the same methodology to mutual banks to check for similarities. Our findings show a low risk-sensitivity in pricing guarantees and a positive relationship between economic unbalances and credit quality of Mgcis. Geographically, the non-performing credit is lower in the North-East for Mgcis while it is higher for banks in Southern Italy. Finally, Mgcis experience a lower non-performing credit than banks, except in North-West Italy, evidencing the potential delay in recognition of non-performing exposures

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