The ratings of IBL reflect the bank prime positioning in the Italian payroll and pension-deductible loans (PDLs) sector and the low-risk business model.

IBL is cautiously pursuing diversification outside its core business by investing in secured and unsecured non-performing exposures (NPEs) through its subsidiary Banca Capasso.

Against the backdrop of declining margins from the PDL business, income from NPE investing and the bank’s participations is supporting the bank’s profitability. Moreover, asset quality indicators have proved resilient and impairments are low, further supporting the bottom line.

The bank’s capital position is adequate and despite the low diversification of funding sources, reliance on customer deposits has been increasing.

This monitoring note does not constitute a rating action, nor does it indicate 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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