Foreign commercial banks active in Italy as of March 2013

Background information

The integration of financial markets and the opening of the Italian banking market have increased the direct presence of foreign intermediaries and – most recently – the acquisition of Italian lenders by big banks from major countries. The share of foreign banks in Italy has more than doubled since the mid Nineties of last century,  though the growth hasn’t been uniform in the different areas of the country:  the positioning of foreign commercial banks is extremely different across Italy  but generally they mostly target retail household clients rather than corporate customers: Italian families’ debt exposure is still limited when compared to other developed countries, even if it grew significantly in recent years. In addition, most of households’ debt is made up of mortgage loans for the purchase of the first home while there is a lot of room left for consumer credit to grow. On the corporate side the growth of lenders from abroad was limited indeed, perhaps because of the particular Italian productive structure which consists mostly of small and medium enterprises, which resort to bank credit as the unique source of external funding and normally go to the local lender, while larger listed companies that have access to the international capital markets are scarce. The other reason for foreign commercial banks to be so active in Italy towards families is the size of their savings, still good despite an ongoing decrease due to the enduring economic crisis. In the background, we must bear in mind that foreign banks also play a relevant role with respect to Italy’s huge state debt, even if such investment decisions are taken in their headquarters abroad and not locally. According to figures from Aibe, the Association of foreign banks in Italy, nowadays nearly 40% of Italian public debt is held by foreign banks and investors, while the market share of international banks in terms of loans to households is around 20% of the market and lending to enterprises is less than 13%. Foreign commercial banks active in Italy with branches (often under a local brand name) or consumer credit facilities or other products are currently 42, including most of global big names like Barclays, BNP Paribas (with BNL – Banca Nazionale del Lavoro),  Santander, Deutsche Bank,  Credit Agricole (with Cariparma).  Each of them along with their association Aibe are eager to prove their commitment to support the growth of Italy’s economy, especially after the debt crisis which hit the country since mid 2011 raised suspicion that big global lenders where among the bad guys who speculated against local banks and Treasury’s bonds. But they also complain that Italy’s regulatory, judicial and fiscal system poses serious constraints to the banking industry development.

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