"There will be other quarters (of difficult figures on bad loans) because the recovery is very slow," Bank of Italy Governor Ignazio Visco told journalists after attending a meeting of the Italian banking association ABI in Milan.

Visco said it was "comforting" to see a slowdown in the rate tracking the share of loans which turn sour.

"But before seeing a fall in bad loans we still need to witness the impact of the crisis on businesses."

Italian banks stepped up loan loss provisions in the last quarter of 2013 in an effort to clean-up their balance sheets ahead of a review of banking assets by European authorities this year.

Asked about Italian banks' recapitalisation efforts, Visco said this was what the central bank had requested.

"What we're seeing now is that if a bank has (good)prospects, a (business) plan and so forth, there are capitals (that can be invested in a share sale) both in Italy and from other countries."

(Reporting by Giulio Piovaccari, writing by Valentina Za, editing by Francesca Landini)

Stocks treated in this article : Intesa Sanpaolo SpA, UniCredit SpA