Pressure on French banks’ core profitability from tighter credit conditions is not denting their credit profiles. The recent round of results was solid and the prospect of better macroeconomic conditions in Europe is credit positive for the rest of 2023.

Tuesday, June 13th 2023 - 3:30 PM (CEST)

Wednesday, June 7th 2023 - 3:30 PM (CEST)

Tuesday, June 20th 2023 - 3:00 PM (CEST)

March Italian NPL collections increased by 33% on the month but were 23% and 28% lower than March 2021 and 2022, respectively. Meanwhile, first quarter 2023 volumes were 16% below the average of the same period of the previous two years.

With yet another reassuring set of results behind them, Europe’s large banks look remote from resolution so now is a good time to reassess whether the existing resolution framework is still capable of delivering what it is expected of it.

The updated methodology, now final following a call-for-coment period, will apply to all covered bonds ratings.

US banking turmoil and Credit Suisse’s sale to UBS have highlighted how vulnerable banks still are to bank runs. Supervisors are increasingly focusing on banks’ liquidity risks.

Spanish banks reported a strong set of first-quarter results, driven by year-on-year growth of 40% in net interest income, which more than offset the impact of the bank levy. Scope expects NII to be the main tailwind for stronger earnings in 2023.

We expect the performance of Italian NPL securitisations to remain subdued in 2023, although stable relative to last year. A series of factors is slowing the Italian economy and weakening affordability, which could in turn compromise collections.