Loans least likely to be repaid, or "sofferenze", were up 15.3 percent in February at 187.3 billion euros.

In a separate report published earlier, the central bank said that lending by Italian lenders to non-financial companies, which has been falling since May 2012, dropped 2.2 percent in March.

(Reporting by Francesca Landini and Giulio Piovaccari; editing by Agnieszka Flak)