Italian bank loans to business fall further in August

MILAN, Oct 8 (Reuters) - Italian bank loans to non-financialcompanies fell for a fourth month running in August, data fromthe Bank of Italy showed on Monday, signalling no let-up in thecredit crunch that is crippling the euro zone's third largesteconomy.

The data showed that loans to non-financial firms hadcontracted by 1.9 percent in August from a year earlier, thesharpest contraction rate in four months of declines.

Overall loans to the private sector, which includesfinancial companies, were also down, by 0.2 percent, the firstcontraction in more than a year.

With Italy firmly into a recession, bad loans at its lendersgrew by 15.6 percent in August, compared with 15.4 percent amonth earlier.

On a brighter note, private sector deposits held at Italianbanks rose 3.5 percent, the data showed.

(Reporting By Silvia Aloisi)

(([e-mail])([phone]))

Keywords: ITALY BANKS/