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Bond Market News
UniCredit and Intesa Sanpaolo Upgraded to BBB+ by S&P
April 21, 2025
Italian banks, including the likes of UniCredit and Intesa Sanpaolo were upgraded by a notch to BBB+ from BBB by S&P. The rating agency also took a similar rating action on other 13 Italian banks. The upgrade follows the sovereign’s upgrade to BBB+ last week by S&P. According to S&P, the improvement of Italy’s sovereign creditworthiness positively impacts the ratings of Italian banks, which have been previously constrained by the country’s weaker credit profile. Italian banks are now better prepared to handle the new phase of macroeconomic volatility due to significant deleveraging in the corporate sector and reduced exposure to riskier enterprises. Additionally, Italy’s effective framework for managing non performing exposures (NPEs) will assist banks in handling future challenges, with a projected slight increase in credit losses over the next two years. The profitability prospects for Italian banks have improved with most banks reporting strong results in 2024 and a return on equity above 15%, S&P added. Furthermore, most banks have provisions to cover potential increases in the cost of risk over the next couple of years.
Bonds of both these banks were up by 0.1-0.5 points across the curve with UniCredit’s EUR 5.625% Perp at 92.8, yielding 6.86%
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