Banco Popolare Said Seeking to Sell $1 Billion in Bad Loans

Banco Popolare SC is seeking offers for about 900 million euros ($1 billion) of unsecured non-performing loans as part of the bank’s plan to strengthen capital, said a person with knowledge of the matter.

The loans, which are less than 250,000 euros apiece, are attracting several potential bidders, said the person, who asked not to be identified because the discussions are private. The bank expects to close the sale by October, the person said.

A spokesman for the bank declined to comment.

Chief Executive Officer Pier Francesco Saviotti is disposing of bad loans as part of an effort to curb risks and improve finances. Italian banks are carrying a record 192 billion euros in bad loans, curtailing their ability to lend as the country is emerging from its longest recession on record.

The lender last month sold 210 million euros of unsecured bad loans to Stockholm-based Hoist Finance AB.