CRP Credit Suisse Ag

By Christopher Emsden

ROME--UniCredit SpA (UCG.MI) said Tuesday it has reached an agreement to sell almost 1 billion euros ($1.37 billion) in non-performing loans to Cerberus European Investment LLC.

The Italian bank said the sale was part of its ongoing effort to bolster its credit profile by disposing of non-core assets and that it expected to close the deal by Feb. 28.

The sale relates to consumer and personal loans with a total gross value of EUR950 million. The Italian bank said it had a coverage ratio for eventual potential losses on the loans of more than 90 percent.

Italian banks have hefty loads of non-performing loans on their books. Disposing of them crystallizes losses, some of which are already registered, but allows lenders to focus on making new loans.

Bank credit flows to Italian companies have been contracting for more than a year and the Confindustria business lobby last week expressed concern they will continue to do so in 2014.

Write to Christopher Emsden at chris.emsden@wsj.com