Banco BPM repaid 12.5 billion euros of ECB loans – source

MILAN (Reuters) – Italy’s Banco BPM has repaid on Friday around 12.5 billion euro ($13.2 billion) in loans from the European Central Bank (ECB), a source close to the bank said.

The early repayment leaves the Italian third-largest banck with around 26.7 billion euros in outstanding Targeted Longer Term Refinancing Operation (TLTRO) III funds, the source added.

The bank had not repaid any of the ECB’s funds, which could be returned during a specific November timeframe.

The ECB has given banks an incentive to get rid of those loans by taking away a rate subsidy in October. It was its first move to mop up cash from the banking system and the first step towards unwinding its massive bond purchases.

($1 = 0.9492 euros)

(Andrea Mandalà, editing Federico Maccioni)