The issuer rating of BBB- reflects BPS’ established retail and commercial banking franchise, with solid market shares in the wealthy Italian region of Lombardy, producing a moderately stable and predictable stream of revenues and earnings.

It also reflects the bank’s low but stable profitability in the past decade, and the recent derisking of the balance sheet in 2020 although uncertainty around the ultimate losses from the Covid-19 crisis remains.

The healthy buffers to capital requirements, alongside comfortable liquidity and funding regulatory ratios, are a key support to the rating. BPS is primarily funded by deposits, though it also uses the ECB’s TLTRO lines.

The Outlook is Stable, reflecting Scope’s expectation that the bank’s credit profile will remain stable over the next 12-18 months.  

This monitoring note does not constitute a rating action nor indicates the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

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