Press Release

DBRS Morningstar Confirms Intesa Sanpaolo’s Issuer Ratings at BBB (high)/R-1 (low); Stable Trend

Banking Organizations
June 01, 2022

DBRS Ratings GmbH (DBRS Morningstar) confirmed the ratings of Intesa Sanpaolo SpA (ISP or the Bank), including the Long-Term Issuer Rating of BBB (high) and the Short-Term Issuer Rating of R-1 (low). The trend on all ratings is Stable. The Intrinsic Assessment (IA) of the Bank is maintained at BBB (high) and the Support Assessment at SA3. Concurrently, the Preference Shares rating has been discontinued as the bank no longer has any outstanding preference shares. A full list of rating actions is included at the end of this press release.


The confirmation of ISP’s ratings and the Stable trend takes into account the Bank’s leading retail and commercial banking franchise in Italy which was further expanded with the acquisition of UBI Banca (UBI), its diversified business model and resilient earnings. Furthermore, DBRS Morningstar considers the Bank’s robust funding profile, its solid capital position, as well as the considerable improvement that ISP has continued to achieve with its risk profile despite the challenges posed by the pandemic.

We expect the Bank to withstand the negative impact from its exposure to Russia. We note that the Bank has already absorbed some impact in Q1 2022 and the Bank has reduced its exposure through active de-risking measures. However DBRS Morningstar notes that the implications from Russia's invasion of Ukraine remain still uncertain at this stage. Some pressure on the Bank’s financials might arise in the medium to long term in our view, given the uncertainty in the economic environment mainly resulting from high and persistent inflationary pressure, rising energy price and disruptions in supply chains.

ISP’s Long-Term Senior Debt rating and its Deposit ratings are both positioned in line with the sovereign rating of Italy. While we continue to recognise the strengths of ISP’s business model, its leading market positions and solid capital levels, ISP’s ratings are highly correlated with any changes made to the sovereign rating, given its high exposure to Italian sovereign bonds and concentration in the domestic banking market. The Stable trend is also in line with the trend on DBRS Morningstar’s sovereign rating on the Republic of Italy.


An upgrade would likely be driven by an upgrade of Italy’s sovereign rating, assuming the Bank maintains its current fundamentals, including adequate profitability, its improved asset quality and solid capital position.

A downgrade would result from a downgrade of Italy’s sovereign rating or a material deterioration in the Bank’s risk profile and capital position.


Franchise Combined Building Block (BB) Assessment: Strong/Good

As Italy’s largest provider of financial services to businesses and individuals, Intesa maintains a solid competitive position underpinned by its large domestic franchise, well diversified business model and solid reputation. Revenue diversification towards fee-driven activities, such as asset management, private banking and insurance, as well as strong cost discipline have been key drivers of the Bank’s resilient pre-provision income, particularly during this period of very low interest rates. ISP has continued to navigate the current challenging operating environment affected by COVID-19 and the more recent geopolitical tensions due to Russia’s invasion of Ukraine. Under the new business plan 2022-2025, the Bank remains focused on further de-risking, cost control and digitisation, as well as greater diversification from commission driven by wealth management, protection and advisory, and stronger commitment on sustainability and ESG.

Earnings Combined Building Block (BB) Assessment: Good/Moderate

In Q1 2022, the Bank posted net income of around EUR 1 billion, down 32.5% Year-on-Year (YoY) or up 10% YoY excluding the EUR 821 million in loan loss provisions (LLPs) booked against exposures to Russia and Ukraine. The results for Q1 2022 showed slightly lower revenue generation compared to Q1 2021, mainly due to lower result from financial operations. Core revenues were flat YoY in Q1 2022, with the higher contribution from TLTRO 3, hedging strategy and fees from lending and payment services, offset by forgone net interest income due to de-risking, and lower fees from asset management and advisory due to heightened volatility attributable to the current geopolitical tensions. Cost control remained strong with a cost-to-income ratio of 46.3% in Q1 2022, reflecting the impact from synergies driven by the combination with UBI. The Bank's annualised cost of risk was 60 bps in Q1 2022 (or 18 bps excluding adjustments for Russia-Ukraine and the partial release of pandemic-related generic LLPs), stable compared to 59 bps in FY 2021 (or 25 bps excluding LLPs due to accelerated de-risking).

Risk Combined Building Block (BB) Assessment: Good/Moderate

ISP continued to make progress in reducing its stock of gross NPLs which were down 30.7% YoY to EUR 14.4 billion as of end-March 2022. As a result, the gross and net NPL ratios stood at 3% and 1.4% respectively at end-Q1 2022, down from 4.4% and 2.3% one year earlier. Pro-forma for NPL disposals finalised in April 2022, and additional sales in the process of being executed in the next quarters, the gross and net NPL ratios would reduce further to 2% and 1.2% respectively. Deterioration in asset quality from the expiry of around EUR 48 billion of debt moratoriums granted during the pandemic has proved lower than initial expectations to date, with a manageable default rate of 2.9% on the Italian perimeter. As of end-March 2022, ISP's outstanding loans subject to moratoria represented just 0.1% of its total net customer loans whereas State-Guaranteed loans accounted for 7% of total net customer loans. We expect ISP’s efforts in de-risking to continue although at a slower pace.

ISP’s total direct exposure to Russia, including cross border and mainly consisting of customer loans, receivables due from Russian banks and bonds issued by Russian counterparties, was approximately EUR 8.9 billion in terms of Risk-Weighted Assets (RWAs), or 2.7% of the Bank’s total RWAs. Additionally, ISP has local operations in Ukraine through Pravex Bank which accounted for 0.1% of total RWAs. Stage 2 loans, i.e. loans whose credit risk has increased since origination, represented around 11% of ISP’s total net customer loans as of end-March 2022, down from around 12% at end-2021, reflecting the migration of certain exposures back to Stage 1 consistently with the reversal of some overlay provisions previously booked on moratoria, partly offset by the reclassification as Stage 2 of exposures to Russian counterparties.

Funding and Liquidity Combined Building Block (BB) Assessment: Good

The Bank maintains a robust funding profile underpinned by a large retail deposit base. Concurrently, ISP’s access to the international funding market has remained stronger than Italian peers, even during periods of stress. While the Bank’s recourse to ECB sources increased further to EUR 132 billion as of end-Q1 2022, out of a maximum allowance of EUR 133 billion, ISP continued to tap wholesale markets through diversified issuances, including senior non-preferred and green bonds, and Additional Tier 1 instruments. The Bank’s liquidity position remained solid as of end-March 2022, with a stock of liquid assets of EUR 360 billion, and a stock of unencumbered eligible assets with central banks, net of haircuts, of EUR 189 billion.

Capitalisation Combined Building Block (BB) Assessment: Good/Moderate

ISP maintains a solid capital position while distributing a large proportion of earnings. At end-Q1 2022, the Bank reported a phased-in CET1 ratio of 13.8% (13.6% fully loaded), and a phased-in Total Capital ratio of 18.6% (18.5% fully loaded), down from 14.5% and 19.1% respectively at end-2021. The reduction in capital ratios in Q1 2022 was largely driven by the lower phased-in positive impact as IFRS 9 continues to unfold, as well as an increase in RWAs mainly due to higher risks connected with Russia’s invasion of Ukraine, and regulatory headwinds. ISP’s capital ratios remain well above the SREP minimum requirements applicable for 2022.

Further details on the Scorecard Indicators and Building Block Assessments can be found at


There were no Environmental/ Social/ Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (19 July 2021) and the DBRS Morningstar Criteria: Guarantees and Other Forms of Support (4 April 2022)
Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (17 May 2022)

The sources of information used for this rating include Morningstar Inc. and Company Documents, Intesa Sanpaolo Q1 2022 Results Press Release, Intesa Sanpaolo Q1 2022 Results Presentation, Intesa Sanpaolo Q1 2022 Report, Intesa Sanpaolo Annual Reports 2017-2021, Intesa Sanpaolo 2021 Non-Financial Statement. DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

DBRS Morningstar does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar's outlooks and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage:

The sensitivity analysis of the relevant key rating assumptions can be found at:

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Nicola De Caro, Senior Vice President – Global FIG
Rating Committee Chair: Ross Abercromby, Managing Director - Global FIG
Initial Rating Date: September 19, 2013
Last Rating Date: November 5, 2021

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