The Italian economy managed to bounce back with a faster-than-expected growth rate of 6.6% in 2021, after suffering more than most of its European peers during the Covid-19 pandemic when it contracted by 8.9% in 2020. However, the European Central Bank’s Pandemic Emergency Purchase Programme, along with abundant liquidity provided to Italian banks, has eased their refinancing risks.
Banca Mediolanum is this year’s best-performing Italian bank put of the country’s 10 largest lenders, moving up from fifth spot last year. It achieved an overall score of 5.87, driven by its strength in operational efficiency and return on risk, where it came first among its peers. The bank also scores well for growth, profitability and liquidity.
Mediobanca comes second with an overall score of 4.87, up from third place last year, with the bank being ranked first for soundness and leverage. Credit Emuliano and Banca Popolare di Sondrio are ranked joint third with a score of 4.79, followed by UniCredit, Italy’s largest bank by Tier 1 capital, in fifth spot with a score of 4.67. UniCredit has made big strides, having been ranked ninth last year, helped by a particularly strong performance in soundness and leverage, where it is ranked second in both categories.
After being ranked 10th last year, Banca Monte dei Paschi di Siena (MPS), comes in this year in sixth place, with a top ranking in profitability. MPS moved from loss to profit in 2021 and posted a profit of €310m, its best result since 2015, showing the improved outlook of Italian lenders.
Banco Popolare di Milano follows in seventh, with BPER Banca in eighth. Intesa Sanpaolo, last year’s fourth-ranked bank, sits in ninth spot, while BancoPosta rounds off the ranking in 10th, having made a dramatic fall from being the best-performing Italian bank in 2021. While BancoPosta is ranked first for asset quality and liquidity, it does not do so well in most other categories.
Italy’s banks are facing higher economic risks than many of its peers, with a rise in non-performing exposures following the lifting of support measures in relation to the Covid-19 pandemic. Along with French banks, Italian lenders also face risks from high exposures to Russia, but these should be manageable given that the exposures are concentrated in the largest and most well-capitalised banks. However, the secondary effects of the war in Ukraine, such as inflationary pressures and rising energy prices, are much harder to assess.
