2 Italian Banks May Work With K.K.R. and Restructuring Firm on Distressed Loans

Two of Italy’s largest banks are exploring joining forces with the private equity firm Kohlberg Kravis Roberts and the restructuring firm Alvarez & Marsal to potentially create a pool of “bad loans” and provide additional capital to help turn around those businesses.

The banks, UniCredit and Intesa Sanpaolo, have signed a memorandum of understanding with K.K.R. and Alvarez & Marsal “to optimize the performance and maximize the value” of a portfolio of corporate loans facing restructuring. The potential arrangement could involve having the outside firms provide management advice to the distressed borrowers as well as additional capital to those companies.

“Discussions related to the formation and operations of the partnership are ongoing,” the companies said in a statement on Tuesday. “Further details will be disclosed as progress is made.”

The companies did not say how large the potential loan pool could be or how much money could go to the distressed companies.

UniCredit, Italy’s largest bank, and Intesa, the second largest, have both announced plans to create internal “bad banks” to house and dispose of soured and nonperforming assets.

The banks posted large losses in the fourth quarter as they took billions of euros in charges for nonperforming loans as part of efforts to clean up their balance sheets ahead of a regulatory review of the euro zone’s largest banks later this year.

The European Central Bank is expected in October to release the results of its review of how European banks are valuing assets like real estate holdings and whether they are setting aside enough money to cover potential losses in the future.

Mario Draghi, the central bank’s president, has warned that some banks may be found to be insolvent and forced out of business after the review.

In March, UniCredit, based in Milan, disclosed a loss of 15 billion euros, or about $20.7 billion, for the fourth quarter. It said that its holdings in Eastern Europe and Italy had lost value, and that many of the loans it had issued would never be repaid.

Intesa reported a fourth-quarter loss of €5.19 billion, reflecting an accounting write-down on the good will of some of its businesses and billions of euros in charges to cover nonperforming loans.

Shares of UniCredit rose 1.8 percent, to €6.61, while shares of Intesa Sanpaolo were up 1.5 percent, at €2.46, in midday trading in Milan on Tuesday.