Italian bank watchers may not be surprised to find Monte dei Paschi di Siena topping the country’s best-performing banks ranking. After previous losses, its near-collapse and nationalisation in 2017, and painful efforts to turn the bank’s fate around, MPS closed 2023 with a $1.9bn pre-tax profit. Coupled with solid scores across most other indicators, the world’s oldest bank places ahead of its peers in the performance table.
MPS may be grabbing headlines again soon. The Italian government seems keen to capitalise on the bank’s turnaround and move along its re-privatisation plan, after selling MPS shares as recently as March and bringing its ownership below 27 per cent — a percentage analysts feel makes it a more palatable acquisition target.
Talks of consolidation in the Italian banking industry have indeed continued in recent months.
Analysts continue to see UniCredit, the country’s largest bank by Tier 1 capital and second largest by assets, as a potential MPS buyer, even after the Milan-headquartered group walked away from official negotiations in 2021. UniCredit is now the fourth-best-performing bank in the ranking.
But rather than within its national border, UniCredit has more recently invested abroad, in Greece’s Alpha Bank, where it bought a 9 per cent stake from national bailout fund the Hellenic Financial Stability Fund in November. Some are speculating about further deals across other parts of Europe.
According to The Banker’s analysis, UniCredit performs relatively well in terms of asset quality, profitability and return on risk, but has been overtaken in the overall performance ranking. As a result, it has slipped from the second position it held last year.
Mediolanum and Credito Emiliano are in second and third place, respectively. Both lenders are a small fraction of the size of UniCredit and have performed better in terms of growth and efficiency. Mediolanum, which is also based in Milan, displays a good profitability score and leads in terms of the return on risk and the liquidity scores. It should also be noted, however, that its soundness and leverage scores are at the bottom of the list.
Intesa Sanpaolo, Italy’s other big banking group, is in seventh place in the overall performance ranking. Like many other Italian lenders, Intesa displayed an exceptionally high increase in pre-tax profits (of nearly 90 per cent) last year. Higher net interest income boosted most Italian banks’ profitability, as did strong net fees and cost controls.
As the environment changes this year, The Banker’s 2025 ranking may reflect a less bright picture.
Last year’s best-performing Italian bank Iccrea Banca, the group comprising credit unions and savings banks, which is now the third largest in the country, was among the few that enjoyed only a low double-digit growth in pre-tax profits (at just over 15 per cent).
It now sits in eighth place in the overall performance ranking.
