The weighted average return on average common equity (ROACE) for rated Italian banks is expected to hit roughly 14% for the year, versus about 12% for UK rivals and 11% for Spanish lenders, according to Mirko Sanna, lead analyst for financial institutions at S&P Global Ratings.
Banks in Italy are likely to surpass their European peers in terms of profitability in 2024.
The estimates are around 7% for banks in France and 6% for those in Germany.
Italy's top two banks, Intesa Sanpaolo SpA and UniCredit SpA, are projected to register a return on equity (ROE) of 13.07% and 12.64%, respectively, for 2023, according to current S&P Capital IQ consensus estimates — far higher than the 2022 figures. Intesa's will tick down to 12.97% in 2024 and 12.76% in 2025; UniCredit's will decline to 12.00% in 2024 and 11.60% in 2025.
Italian banks' performance was boosted by significantly higher lending income, with resilience forecast for the coming years.
Intesa, UniCredit and midsized lenders Banco BPM SpA, BPER Banca SpA and Banca Monte dei Paschi di Siena SpA are expected to record an aggregate net interest income (NII) — the difference between interest earned on loans and that paid to depositors — of nearly €37 billion for 2023, S&P Capital IQ consensus estimates show. The figure is almost 43% higher than in 2022 and a 69.5% jump from 2021's total.
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