Italy has asked the European Commission to approve an extenson of the state-guarantee program for banks' nonperforming loans by six months into 2019, new Finance Minister Giovanni Tria said in an interview with Bloomberg News.

Tria said the GACS scheme was "working well." The treasury had already indicated under Tria's predecessor, prior to the March election, that it was seeking to extend the scheme.

The program lets banks securitize their bad loans and put the weakest tranches up for sale, with a government guarantee making them more lucrative for potential buyers. It is currently due to expire Sept. 6.

Bank of Italy data for the first quarter of 2018 indicated banks were still dealing with €258 billion in bad loans, Bloomberg noted.