The Italian banking sector has lived through an eventful few months: the State-financed precautionary recapitalization of Monte dei Paschi, the sale of the two Veneto banks to Intesa Sanpaolo, sales of a large amount of bad loans and the start of the consolidation process among cooperative banks. All these facts contributed to bring back investor confidence into the sector and to the start of a rebound in banking stock prices. A return of optimism fostered also by positive macroeconomic surprises for the country, whose growth estimates have all been revised upwards.
What still lies ahead for the banking sector in the coming years?
The de-risking process has started, but reaching an adequate asset quality, in line with European competitors, will still take time and require further adjustment costs.
The gradual credit risk reduction will needed to be accompanied by cost-cutting measures as well as investments in technology and training in order to upgrade business models to the new operational context and improve banks’ profitability. To reach this last goal, further sector consolidation can not to be excluded. Moreover, the process of capital strengthening is not yet completed, and could be accelerated by banking supervisory authorities committed to review internal models and about to start a new stress test exercise at the beginning of next year.
In presenting our analyses on the Italian banking sector, Prometeia will deal with:
The conclusive panel will focus on the technological frontier and the tangible role of digitalization in the Italian banking panorama. Discussion will feature some of the key players of digital transformation in the country.