Press Release

DBRS Morningstar Confirms Istituto per il Credito Sportivo’s Issuer Ratings at BBB/R-2 (high); Stable Trend

Banking Organizations
July 10, 2023

DBRS Ratings GmbH (DBRS Morningstar) confirmed the ratings of Istituto per il Credito Sportivo (ICS or the Bank), including the Long-Term Issuer Rating of BBB and the Short-Term Issuer Rating of R-2 (high). At the same time, DBRS Morningstar confirmed the Bank’s Long-Term Deposit Rating at BBB (high), one notch above the Long-Term Issuer Rating, reflecting the legal framework in place in Italy which has full depositor preference in bank insolvency and resolution proceedings. The trend on all ratings is Stable. The Bank’s Support Assessment is SA1. A full list of rating actions is included at the end of this press release.


ICS’s ratings reflect a Support Assessment of SA1, which implies the expectation of predictable support from its main shareholder, the Italian government. DBRS Morningstar currently rates the Republic of Italy’s Long-Term Foreign and Local Currency – Issuer Ratings at BBB (high) with a Stable trend (for more details on the rationale for the Sovereign rating action, please refer to the press release “DBRS Morningstar Confirms Republic of Italy at BBB (high), Stable Trend” -

The Long-Term Issuer Rating of ICS is one notch below the Long-Term Issuer Rating of Italy, reflecting that, despite the expectation of predictable support, there is not a government guarantee or explicit commitment from the government to maintain the capitalisation of the Bank. Nevertheless, DBRS Morningstar expects support to ICS from the Italian State to be forthcoming in case of need, as a result of the Bank’s ownership and its strategic public mission. The Stable trend mirrors the trend on the Republic of Italy’s ratings.


An upgrade of the Republic of Italy’s ratings would likely lead to an upgrade of ICS’s ratings. An upgrade of ICS’s Long-Term Issuer Rating could also be driven by an explicit guarantee and commitment of support to ICS from the Italian government.

A downgrade of ICS’s ratings could result from a downgrade of Italy’s Sovereign rating. In addition, any indication of a weakening of the commitment from the Italian government and/or a change of control in the Bank’s ownership structure could also lead to a downgrade.


ICS is a small public bank and independently managed public body, with total assets of around EUR 3.6 billion at end-2022, responsible for ensuring sustainable support to sport and culture in Italy. ICS is a leader in the niche sector of financing Italian sporting facilities. DBRS Morningstar expects support to ICS from the Italian State to be forthcoming in case of need, as a result of the Bank’s ownership and its strategic public mission which we deem to be the key pillars underpinning ICS’s ratings. Since 2014, ICS has been ultimately 89.4% owned by the Italian State, with 80.4% direct ownership through the Italian Ministry of Economy and Finance (MEF) and around 9% indirect ownership. This ownership structure is the result of material corporate governance issues which forced ICS under extraordinary administration for over six years until February 2018. As the main reference shareholder, the Italian State is represented on the board of directors, with members appointed by the government, other public shareholders or by the MEF. At this stage, DBRS Morningstar does not anticipate any material change in the Bank’s ownership, scope and mission resulting from its transformation into a joint stock company which is expected to be completed by end-2023.

In DBRS Morningstar’s view, the Bank’s modest earnings power reflects limited revenue diversification, low interest margins and high cost of risk. ICS has also shown significant reliance on volatile sources of profit in recent years, mainly related to its Italian sovereign bond portfolio. ICS reported a net profit of around EUR 18 million in 2022, up 18% Year-On-Year (YOY), mainly driven by non-recurring gains from financial operations and lower operating expenses. Total revenues were up 2% YOY in 2022, with higher trading income more than offsetting the pressure on net interest income (NII), affected by lower TLTRO contribution as well as higher funding costs and a lag in repricing of ICS's assets which are mostly fixed-rate with long-term duration. DBRS Morningstar expects ICS to benefit less from higher interest rates relative to domestic banks, given its public role to disburse loans at preferential conditions. The Bank's operating efficiency compares well with the Italian average, with a cost-to-income ratio of 50% in 2022. ICS’s cost of risk was 51 bps in 2022, up from 44 bps in 2021, but down from around 70 bps in 2019 and 160 bps in 2020, reflecting an improvement in risk profile as well as higher concerns around future credit risk due to weaker economic prospects.

DBRS Morningstar sees ICS’s risk profile as still relatively weak although improved due to loan workouts, improved lending standards and disposals. The Bank’s gross and net non-performing exposure (NPE) ratios were 9.5% and 4.3% respectively at end-2022, down from 9.7% and 4.4% at end-2021, but still comparing unfavourably with the Italian average. NPEs mainly arise from ICS’s exposure to the private sector, however this accounts for a lower proportion of the Bank’s loan book than that to the public sector. In addition, DBRS Morningstar notes that most of ICS’s loan portfolio benefits from public and bank guarantees. However, single-name concentration in ICS’s loan book does remain relatively high in our view. Gross Stage 2 loans (loans where credit risk has increased since origination) were 19% of ICS's gross loans at end-2022, significantly down from 30% at end-2021, albeit remaining above 5% at end-2019. We see higher risks for asset quality going forward due to higher interest rates, high inflation, and sluggish economic growth. However, most of ICS's customers benefit from loans at preferential rates. In addition, good loan workout ability coupled with good quality and more diversified new loan originations, and higher co-financing opportunities connected with the European Recovery and Resilience Facility (RRF) funds, should help mitigate the impact on ICS's asset quality.

ICS maintains a large exposure to Italian sovereign bonds which were up 20% YOY at end-2022 to benefit from higher interest rates, and equivalent to around 27% of its total assets and 1.2 times its Common Equity Tier 1 (CET1) capital. 20% of the total portfolio is classified at Held to Collect (HTC) and due to the increase in interest rates, debt securities classified as HTC, including sovereign and non-sovereign, were carrying unrealised losses of around EUR 37 million at end-2022 or 307 bps in terms of capital.

DBRS Morningstar views ICS’s funding and liquidity profile as sound, benefiting from the significant, albeit reduced, recourse to its shareholders’ funds, and access to multilateral institutions which have ensured growing and low cost funding. In addition, in October 2022 ICS tapped the capital markets for the first time by issuing a social senior preferred bond of EUR 300 million, with three-year maturity and a coupon of 5.25%. The Bank’s exposure to the ECB was down 7% YOY in 2022 and has progressively reduced over the years in favour of bank repo transactions to improve funding diversification, optimise funding costs and to better manage the securities portfolio. The remaining funding with the ECB will mature by end-2024 with the bulk having fallen due in June 2023. ICS’s Liquidity Coverage Ratio (LCR) was 3,636% at end-2022 whereas its Net Stable Funding Ratio (NSFR) was 120%.

ICS maintains a robust capital position, in light of its high capital base and moderate capital absorbing business model, driven by the concentration of its assets to public clients, which receive low risk weights, as well as the use of public guarantees. However, the Bank’s internal capital generation remains modest. ICS’s regulatory own funds consist of CET1 capital only, with the CET1, Tier 1 and Total Capital ratios all standing at 71.4% as of end-2022, down from 79.4% at end-2021. The reduction was due to a combination of a negative impact in the valuation reserve connected with the sovereign bond portfolio and an increase in Risk-Weighted Assets (RWAs) driven by higher capital absorbing lending solutions. The current level of capital ratios provides sizeable cushions over the Bank’s 2023 SREP requirements of 9.65% for CET1 ratio, and 14.25% for Total Capital ratio.


Credit rating actions on the Republic of Italy are likely to have an impact on this credit rating. ESG factors that have a significant or relevant effect on the credit analysis of the Republic of Italy are discussed separately at

There were no Environmental factors 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 (4 July 2023).

All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (22 June 2023). In addition DBRS Morningstar uses the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at:

The sources of information used for this rating include Company Documents, ICS 2018-2022 Reports, ICS 2022 Pillar 3, and ICS Bylaws (24 January 2014). 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: For further information on DBRS Morningstar historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see

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: Andrea Costanzo, Vice President – Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director – Head of Global FIG
Initial Rating Date: August 2, 2021
Last Rating Date: July 12, 2022

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