Business loans: Italia split in two. Why the North is no longer the driving force

An Italia split in two, with the South showing signs of growth and the North – particularly the North-East – experiencing a slowdown in economic activity and no longer appearing to be the country’s driving force. This is the picture that emerges from the trend in bank lending region by region, as captured in the ABI report updated at the end of June. However, the current trend of contracting economic activity is also confirmed by data from the ABI-Cerved Outlook on the rate of loan deterioration – that is, loans turning into non-performing loans – published on 2 October. Loans to businesses are growing much more rapidly, on a year-on-year basis, in Central and Southern Italy, whilst in the North they are increasing only slightly, or even declining sharply. Such a marked disparity had never been seen in previous updates, even though the trend of rising loans in the South has been underway for several months now.

The figures that immediately stand out relate to the Aosta Valley, which recorded a fall of 15.5 per cent, and Lazio, where funding, by contrast, rose by 12.3 per cent, although the presence of the public administration may have had a driving effect in this region. The most significant increases after that of Lazio were recorded in Calabria and Sicily, where the growth stood at 4.6 per cent. In central Italy, Umbria follows with a +4.2 per cent increase, and then, back in the south, Puglia (+3.7 per cent) and Basilicata (+3.1 per cent). Turning our attention to the North, the best figure is in Lombardy, at +2.7 per cent; this is followed by Emilia-Romagna (+2.3 per cent), Trentino-Alto Adige (+1.6 per cent) and Piedmont (1 per cent). Then comes a string of negative figures: Liguria -3.7 per cent, Friuli-Venezia Giulia -4.3 per cent, Tuscany -1.3 per cent and Veneto -0.5 per cent. The average trend for business loans across the country shows an increase of 2.6 per cent, lower than that for loans to households, which rose by 3.2 per cent. In this case, the trend across the various regions is more consistent: the most significant increases were seen in Emilia-Romagna (+3.9 per cent) and Campania (+3.8 per cent). Performance was also strong in Sicily (+3.7 per cent), Veneto (+3.7 per cent), Calabria (+3.5 per cent), Tuscany (+3.4 per cent) and Abruzzo (+3.1 per cent). In the other regions, the trend was positive, with increases of around or above 2 per cent.

ABI-Cerved’s estimates point to a rise in non-performing loan rates in 2026 across all enterprise size categories, with increases ranging from 0.1 to 0.2 percentage points: micro-enterprises will rise from 2.8 per cent in 2025 to 3.0 per cent in 2026, large enterprises from 1.7 per cent to 1.9 per cent, and small and medium-sized enterprises from 2.0 per cent to 2.2 per cent and from 1.8 per cent to 2.0 per cent respectively. The flow of new loans in default affects all the sectors under consideration: whilst the construction sector, as has been the case for several years now, records the most significant increase, from 2.9 per cent in 2025 to 3.3 per cent, the most striking figure is that manufacturing has risen from 2.5 per cent to 2.7 per cent – the only sector to exceed the pre-Covid level of 2.3 per cent – due to a significant contraction in production. Services rose from 2.6 per cent to 2.7 per cent. More specifically, within the manufacturing sector, it is small businesses – the driving force behind the country’s economy – that are recording the highest increases (from 1.8 per cent in 2025 to 2.3 per cent), whilst those for micro-enterprises are more modest (from 3.0 per cent to 3.2 per cent). In terms of geographical trends, estimates for 2026 indicate rising deterioration rates across the country, with the gap between the highest-risk and lowest-risk areas narrowing slightly. And here too, there is another significant finding: the largest increases are recorded in the North-East, where risk rises by 0.3 percentage points (although this is the region with the lowest risk). This is followed by the South and the Islands (+0.2 percentage points) and the North-West and the Centre (+0.1 percentage points). The South remains the area with the highest rate of deterioration, at 3.7 per cent, with a gap of 1.7 percentage points compared with the North-East, which has the lowest rate (2.0 per cent). The North-West and Centre stand at 2.5 per cent and 3.2 per cent respectively.

“A distinctly varied range of factors is emerging, indicating that lending to businesses is growing significantly faster in Central and Southern Italia than in the North, which is also the result of substantial investments under the NRRP and the SEZ, whilst loans to households are growing at a more uniform rate across Italy, although the percentage increase is highest in the South,” Antonio Patuelli, president of the ABI, explained to *Il Sole 24 Ore*. The slowdown in the German economy is also having an impact on trends in Northern Italy. According to Patuelli, looking at the regions in detail, ‘for businesses, the strong growth in Lazio, up 12.3 per cent, stands out first and foremost, as does that of various regions in the South, such as Sicily, Calabria, Puglia and Basilicata, whilst the declines in Val d’Aosta, Liguria, Friuli-Venezia Giulia and even Veneto in the North, and in Tuscany in Central Italia. Attention must be paid to the risks facing businesses in northern Italia.”