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IPFS News Link • Italy

114 Italian Banks (Roughly 23%) Have NPLs Exceeding Tangible Assets

• http://www.zerohedge.com, Tyler Durden

The headline image is from the from ilsole24ore.com. The article is dated March 25, 2017. The translated headline reads "Here are the 114 Italian banks at risk for suffering"

The image shows 24 banks where non-performing loans total 200% or more of tangible assets.

The image title "Texas Highest Rate" refers to a measure of banking stress called the "Texas Ratio".

The Texas Ratio was developed by Gerard Cassidy and others at RBC Capital Markets. It is calculated by dividing the value of the lender's non-performing assets (NPL + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves.

In analyzing Texas banks during the early 1980s recession, Cassidy noted that banks tended to fail when this ratio reached 1:1, or 100%. He noted a similar pattern among New England banks during the recession of the early 1990s.


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