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Bond Market News
Banco BPM Upgraded to BBB by Fitch
December 8, 2025
Banco BPM was upgraded by a notch to BBB from BBB- by Fitch. The upgrade reflects improvements in the bank’s business profile, stronger diversification, ongoing de-risking, and solid funding and liquidity. The upgrade also reflects Italy’s stronger operating environment following the sovereign’s upgrade to BBB+ earlier in September. Banco BPM’s ratings continue to benefit from its strong franchise in northern Italy, diversified business model, improved profitability and asset quality. Its diversified revenue mix, particularly in wealth management and insurance, supports more resilient profitability through the cycle, Fitch added. Asset quality remains solid with impaired loans at 2.6% as of end-September 2025, and is expected to stay below 3% over the next two years as per Fitch. The bank’s operating profit is projected to remain stable as newly acquired Anima Holding’s asset management and insurance activities are rolled out across the network, helping offset pressure from lower interest rates. However, capitalisation is weaker than peers, with a CET1 ratio of 13.5% post-Anima acquisition, but remains comfortably above regulatory thresholds. BPM maintains a stable funding profile supported by granular retail deposits and diversified wholesale market access.
Its bonds traded stable with its EUR 6.25% Perp at 103.3, yielding 5.4%.
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