Barclays sees resilient Q3 for Italian lenders, sees Bper as best positioned

Investing.com -- Italian banks are likely to show some pressure on net interest income (NII) in the third quarter but broadly in line with guidance, Barclays analysts say, with limited room for major forecast changes.

The bank reiterates that fundamentals remain solid and sees valuation and dividend yield as supportive into year-end, particularly for its top pick Bper Banca.

Analysts have reinstated an Overweight rating on Bper with a €12.5 price target, citing integration benefits following its acquisition of BP Sondrio. They describe the investment case as “simple and compelling” and highlight that its 2026 cost-income is seen at 46%, trending towards 43% the following year.

BPER has a CET1 ratio of around 14.5% this year, which analysts expect to move above 15% from next year, assuming a 75% payout.

The team also flags potential further upside if the group proceeds with a sale of Alba leasing, which could free up 40-45 basis points of capital with only a minor earnings impact.

Ahead of Q3 earnings, Barclays says BPER could see a supportive share-price reaction thanks to solid standalone figures and potential updates on BP Sondrio integration.

For Monte dei Paschi, they note the quarter may be operationally sound, but expect investor attention to focus more on any signals around the combined entity’s industrial plan. 

Barclays reiterated an Equal Weight stance on the stock and sees capital and dividend capacity as the key strengths, with CET1 at 16.2% and a projected 11% yield for 2026 based on full payout.

However, analysts seek more clarity on the integration of Mediobanca and the industrial plan before taking a more constructive view.

“The share price reaction might be more linked to any colour on the combined entity industrial plan, which possibly will be disclosed only later, within the full-year release,” analysts wrote.

For UniCredit, capital and distribution remain the main focal points after summer announcements on CET1 heading toward 14%, while Intesa is expected to deliver a steady quarter with more meaningful guidance likely deferred to its February business plan presentation.

Sector-wide, Barclays projects average NII down 2.5% quarter-on-quarter and fees down 4.6% due to summer seasonality. Cost of risk is expected at 33 basis points on average, with no signs of asset-quality deterioration.

Intesa and UniCredit are expected to deliver solid capital trends, with calls likely focused on distribution and CET1 updates.

Barclays sees room for earnings resilience even in a declining rate environment, noting that Italian banks under coverage are trading on 9.3x 2026 earnings with an average 2025 dividend yield of 7.9%.

A potential bank tax remains a risk to sentiment. The government is considering a levy linked to earlier non-distributable reserves, with Barclays estimating a 15 basis point hit to sector CET1 if implemented.

Analysts say this uncertainty “negatively affects sentiment,” given investors had expected a more constructive stance from policymakers.