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TABLE-Italian banks take a breather ahead of year-end clean-up

    MILAN, Nov 13 (Reuters) - Lower-than-expected provisions against loan losses supported
Italian banks' earnings in the third quarter, which saw the economy rebound strongly after
restrictions to fight COVID-19 were lifted.
    The top two lenders Intesa Sanpaolo and UniCredit have already said they 
will significantly increase provisions in the fourth quarter as the sector braces for potential
losses once the government starts unwinding measures deployed to help businesses through the
pandemic.
    Economic activity has been hit by fresh restrictions to stem contagion as Italy battles a
second virus wave.
    "Italian banks' third-quarter earnings were positive on average. But the length of the
current crisis is the big question mark hanging over the banking sector," Marco Giorgino, 
professor of Financial Markets and Institutions at Milan's Politecnico University, said.
    "The cost of risk at Italian banks has doubled on average due to COVID and further
writedowns are likely in the fourth quarter."
    Banks have frozen payments on 301 billion euros ($355 billion) in loans to businesses and
households and extended 103 billion euros in state-guaranteed loans to small- and medium-sized
enterprises. 
    Following is a summary of provisions booked by banks in the January-September period, the
latest figure on loans under moratorium and the outlook for loan losses in 2020-2021.
    All figures in euros.    
             COVID-related  Total loan   Guidance    Guidance     Loans       Gross
              provisions       loss     on cost of  on cost of    under      impaired
             against loan   provisions   risk (*)    risk for   moratorium  loans/tota
               losses in        in       for 2020      2021                  l loans
               Jan-Sept      Jan-Sept                                       
   Intesa      1.3 bln       2.7 bln     Up to 90    Up to 70     48 bln       6.9%
  Sanpaolo                                 bps         bps      (including  
                                        (excluding  (excluding  UBI Banca)  
                                        UBI Banca)  UBI Banca)              
 UniCredit     1.7 bln       2.9 bln     100-120    Lower end    29 bln        4.7%
                                           bps       of 70-90               
                                                    bps range               
 Banco BPM     140 mln       801 mln     100 bps        --      15.6 bln     8.6%   
                                                                               (**)
 BPER Banca     91 mln       406 mln     100-110        --       11.5  bln     8.8%
                                           bps                              
 Monte dei     300 mln       621 mln        --          --      15.4 bln      11.1%
   Paschi                                                                     (***)
 (*) Cost of risk measures loan loss provisions against average loan volume in a given period. 
(**) Pro-forma 7.7% including a planned 1.2 billion euro disposal.
(***) Pro-forma 4% including a planned 7.5 billion euro spin-off.
   
    ($1 = 0.8473 euros)

 (Reporting by Valentina Za and Andrea Mandala;Editing by Elaine Hardcastle)
  
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