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Investing.com -- Fitch Ratings has upgraded Intesa Sanpaolo’s Long-Term Issuer Default Rating to ’A-’ from ’BBB’ and its Viability Rating to ’a-’ from ’bbb’, with a Stable outlook.
The upgrade follows Fitch’s recent elevation of Italy’s sovereign rating to ’BBB+’ from ’BBB’ and reflects the rating agency’s view that Intesa Sanpaolo should be rated one notch above Italy’s sovereign rating due to the bank’s exceptional strength.
Fitch also revised the Italian operating environment score to ’bbb+’ from ’bbb’, citing improved business opportunities and reduced risks in the Italian banking system over the long term.
The rating agency highlighted Intesa Sanpaolo’s dominant domestic franchise, well-diversified products and revenues, and flight-to-quality status as factors that would help mitigate pressures during a severe sovereign stress scenario.
Intesa Sanpaolo’s business model combines leading domestic retail and corporate banking with well-developed wealth-management and insurance businesses. This diversification supports the bank’s resilient performance through economic cycles.
The bank’s impaired loans ratio stood at 2.5% at the end of June 2025, which Fitch described as sound and close to the European average. Impaired loan coverage of just above 70% provides a buffer against more severe scenarios.
Profitability remains robust with an operating profit to risk-weighted assets ratio of 4.9% in the first half of 2025 (annualized), compared to 4.1% in 2024. This strength comes from net interest income, healthy growth in fee-generating and insurance activities, and trading gains.
The bank’s common equity Tier 1 ratio was 13.5% at the end of June 2025, providing sound buffers over regulatory requirements. Exposure to Italian sovereign risk has increased recently but remains lower than the domestic average at 75% of CET1 capital.
Fitch noted that upgrade potential for Intesa Sanpaolo is limited and would require a combination of an Italy sovereign rating upgrade, improved operating environment for Italian banks, and continued strong performance through credit cycles.
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