The Italian banking sector

In macroeconomic terms, the importance of the banking sector in Italy is below average compared with other European countries. In 2022, the balance sheet total of all banks was approximately 1.8 times the country’s total economic output. By comparison, the European average was 2.4 times the GDP. The bank branch network in Italy is well developed with 2,722 inhabitants per branch, compared to a European average of 3,228 inhabitants per branch.

In 2022, the portfolio of loans in danger of default at Italian banks was 2.4%, higher than the average of 1.8% in other European countries. The cost-income ratio of Italian banks in 2022 was 63%, which was above the level of other European countries. Profitability, measured by return on equity, was above the average of other banks in Europe in 2022.

The Italian economy has long struggled with growth difficulties, causing banks to accumulate large amounts of non-performing loans and Italian government bonds. However, the banks are now benefiting from past restructuring measures. Bad loans have been reduced and costs have been cut. Risky transactions in investment banking have been avoided and instead the focus has been on classic banking transactions. Italy’s largest banks have the lowest non-performing loan ratios in more than a decade. Capital adequacy is above the European average and operating profitability is higher and more diversified than before the pandemic. Customer deposits are considered stable. As most Italian banks are universal banks, they benefit from rising interest rates in the lending business. Most experts believe that the current slowdown in economic growth and the associated probable increase in defaults or delinquencies on loans are manageable.

Excerpt from the German Savings Banks Association (DSGV) article by Jana Gieseler.

Cassa di Risparmio di Bolzano

The Cassa di Risparmio di Bolzano (German: Südtiroler Sparkasse) is one of the most important independent savings banks in Italy. The first bank in South Tyrol is represented in the whole Northeast of Italy as well as in Munich. A banking group with 170 branches and 1,900 employees serving 302,000 customers, it is the first independent bank headquartered in the Northeast of Italy and the largest after the four main national banking groups. Founded in 1854, the Cassa di Risparmio di Bolzano has been a joint-stock company since 1992 and now has more than 24,000 shareholders. The main shareholder is the Fondazione Cassa di Risparmio di Bolzano banking foundation.