(Finance) – 2023 was a very favorable year for Italian banks. This is what was stated by Fabio Panetta, Governor of the Bank of Italy in his final considerations on the occasion of the presentation of the report on 2023.
The return on capital exceeded 12 percent. – he recalled – Profitability benefited from an exceptional market situation, in which the abundant liquidity in circulation slowed down the increase in the cost of funding, while the increase in official rates was rapidly transmitted to those on loans, fueling the interest margin. Capital rose to 15.6 percent of assets at risk.
The latest data confirms the continuation of this favorable phase. – he stated – Within the credit system, significant banks show profitability and equity values higher than the European average.
For the banking system as a whole, the progress in income and capital reflects a multi-year process of recovering efficiency and strengthening balance sheets. The solid condition in which intermediaries find themselves today represents a strong point for the entire Italian economy – stated the Governor – but we must not lower our guard.
In April we asked banks to establish a macroprudential capital buffer equal to 1 percent of domestic exposures by mid-2025. The increase in requirements will have a negligible impact on the supply of loans and will allow to limit the negative effects of adverse systemic events.
As for the risks associated with the macroeconomic framework, Panetta highlights two aspects: credit quality and liquidity.