26 Jan, 2023
Big Italian banks poised for higher profits in 2023, 2024
By Adrian Jimenea and Marissa Ramos
Full-year profits are set to grow solidly at most of Italy's biggest banks in the coming years, according to analyst estimates.
Intesa Sanpaolo SpA, UniCredit SpA and Banco BPM SpA are projected to record higher net income in 2024, compared with 2021 levels, driven by higher revenues from lending, according to S&P Global Capital IQ mean consensus estimates. Intesa's net income is set to increase 18%, while those of UniCredit and Banco BPM are expected to increase 14% and 30%, respectively.
The banks will continue to benefit from aggressive central bank rate hikes, which come amid high levels of inflation. Intesa Sanpaolo, UniCredit, Banco BPM and BPER Banca SpA are all set to report progressively higher net interest income for full year 2022, 2023 and 2024, compared with 2021 levels, the estimates suggest. NII is the difference between revenues generated from loans and the costs paid on deposits.
Intesa Sanpaolo is poised to book the highest increase for 2022, with analysts expecting its NII to rise more than 14% year over year to €8.88 billion. CEO Carlo Messina grow further in November 2022 that the figure could be "well above €11 billion" in 2023.
In 2023, Italian banks are expected to see an increase in credit losses as they grapple with a recession, market volatility and the end of a cheap lending program of the European Central Bank, according to analysts at S&P Global Ratings. But thanks to cleaner balance sheets and stronger profits, they are expected to hold up well, the analysts wrote in a recent report.
Intesa Sanpaolo, Banco BPM and BPER Banca are expected to report lower loan loss provisions for 2022, according to the estimates. UniCredit, which has already had to set aside money to cover its direct exposure to Russia, is expected to report provisions of up to €2.35 billion. UniCredit's subsidiary JSC UniCredit Bank is one of the largest foreign-owned banks in Russia.
UniCredit is set to report full-year 2022 earnings on Jan. 31. Intesa Sanpaolo reports on Feb. 3, Banco BPM on Feb. 7 and BPER Banca on Feb. 8.
