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Economy and Banking Sector of Italy

Italy
Location
Southcentral Europe
Population  (2017)
60 589 445  (0.00%)
EU Status
member since 1952
Currency
EUR (Euro)
Nominal GDP (2016)
1 672.4 bln EUR  (+0.02%)
Credit Ratings (as of Sep 2016)
BBB+/Baa2
Consolidated Banking Assets (2016)
2 700.37 bln EUR  (-0.84%)
Deposit Guarantee
100 000 EUR
Number of Banks
562

Italy is a parliamentary republic in Southern Europe and a founding member of the European Union.

After World War II, Italy rapidly transformed from an agriculture based economy into one of the world's most industrialised nations. Machinery, textiles (including closing), industrial design, furniture production, agri-alimentary are important sectors of Italian economy that contribute significantly to the country’s export. Tourism is also one of Italy's most significant economic sectors accounting for about 4% of Italy’s GDP. However, Italy has several problems which slow down the economic growth, including organized crime, corruption, and economic disbalance between southern and northern Italy.

A business model of Italian banking is focused on loans intermediation and other retail services and very limited exposure to market risk. This traditional banking approach has helped the Italian banks in supporting domestic activities.

List of Banks in Italy

National Currency

Euro (EUR)

Italy joined the Euro Area on 1 January 1999.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
1 672.4 bln EUR  (+0.02%)27 600 EUR  (+0.03%)0.9 %  (2015: 0.8 %)

According to Eurostat, nominal GDP of Italy in 2016 was 1 672.4 bln EUR.

Italy underperforms the European Union in terms of real GDP growth with the average annual differential coming to -1.0% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 0.9% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in Italy.

Chart 1. Real GDP Growth in Italy. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in Italy was 27 600 EUR.

Italy has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -6.0% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Italy; European Union = 100.

Chart 2. GDP Per Capita at Purchasing Power Parity in Italy; European Union = 100.

Inflation Rate

CPI, MoM (Sep 2017)CPI, YoY (Sep 2017)CPI, Year Average (2016)
1.8 %  (Aug 2017: 0.1 %)1.3 %  (Aug 2017: 1.4 %)-0.1 %  (2015: 0.1 %)

According to Eurostat, inflation rate in Italy in 2016 expressed as annual percentages of average consumer prices was -0.1% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Italy.

Chart 3. Inflation Rate in Italy. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
11.7 %  (2015: 11.9 %)

Government Bond Yield

Government Bond Yield (Sep 2017)
2.11 % (unchanged)
According to Eurostat, government bond yield in Italy in Sep 2017 was 2.11%, compared to 2.11% in Aug 2017.
Government bond yield of Italy.

Chart 4. Government bond yield of Italy. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
BBB+ (good credit quality), outlook stable Baa2 (lower medium grade), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Italy: 0.0 - 20.0%

Withholding tax rates applied on payments of interest and dividends in Italy are shown in Table 1.

Dividends Interest
Natural person, resident 20.0 %20.0 %
Natural person, non-resident 20.0 %0.0 %
Table 1. Withholding tax rates in Italy.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Italy: 103 Signed Agreements

Italy signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania
 Algeria
 Argentina
 Armenia
 Australia
 Austria
 Azerbaijan
 Bangladesh
 Belarus
 Belgium
 Bosnia and Herzegovina
 Brazil
 Bulgaria
 Canada
 China
 Cote D'Ivoire
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Ecuador
 Egypt
 Estonia
 Ethiopia
 Finland
 France
 Georgia
 Germany
 Ghana
 Greece
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Israel
 Japan
 Jordan
 Kazakhstan
 Korea, Republic of
 Kuwait
 Kyrgyzstan
 Latvia
 Lebanon
 Lithuania
 Luxembourg
 Macedonia
 Malaysia
 Malta
 Mauritius
 Mexico
 Moldova, Republic of
 Montenegro
 Morocco
 Mozambique
 Netherlands
 New Zealand
 Norway
 Oman
 Pakistan
 Philippines
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 San Marino (Oct 2013)
 Saudi Arabia
 Senegal
 Serbia
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sri Lanka
 Sweden
 Switzerland
 Syrian Arab Republic
 Tajikistan
 Tanzania, United Republic of
 Thailand
 Trinidad and Tobago
 Tunisia
 Turkey
 Turkmenistan
 Uganda
 Ukraine
 United Arab Emirates
 United Kingdom
 United States
 Uzbekistan
 Venezuela
 Vietnam
 Zambia

There are also several agreements between Italy and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Cuba
 Gabon
 Hong Kong (Jan 2013)
 Iran, Islamic Republic of
 Kenya
 Libya
 Mongolia
 Panama

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 7 Signed Agreements

There are also several agreements between Italy and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Bermuda
 Cayman Islands
 Cook Islands
 Gibraltar
 Guernsey
 Isle of Man (Sep 2013)
 Jersey

Automatic Exchange: Starts in September 2017

Italy signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 58 Bilateral Agreements to Receive Information

Italy has signed bilateral agreements with 58 jurisdictions to automatically receive information:

 Andorra
 Argentina
 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Brazil
 Bulgaria
 Canada
 China
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 United Kingdom
 Uruguay

Automatic Excnange: 70 Bilateral Agreements to Send Information

Italy has signed bilateral agreements with 70 jurisdictions to automatically send information:

 Andorra
 Anguilla
 Argentina
 Australia
 Austria
 Belgium
 Belize
 Bermuda
 Bonaire, Saint Eustatius and Saba
 Brazil
 British Virgin Islands
 Bulgaria
 Canada
 Cayman Islands
 China
 Colombia
 Costa Rica
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Montserrat
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turks and Caicos Islands
 United Kingdom
 Uruguay

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Italy
IGA in effect since 10 January 2014, Model 1

Italy has FATCA agreement with the U.S. in effect since 10 January 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Italy are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Italian financial accounts hold in U.S. financial institutions will be reported to Italian authorities.

Further Information

Financial Market Development

Financial Market Development
3.1 (max 7.0), 126th out of 138 countries
Banks' Soundness
3.7 (max 7.0), 116th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Italy is scored 3.1 out of maximum 7.0 and ranked 126th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 3.0 (127th place).

Financial Market Development in Italy.

Chart 5. Financial Market Development in Italy. Source: WEF.


Soundness of banks is scored 3.7 bringing Italy into the 116th place.

Soundness of Banks in Italy.

Chart 6. Soundness of Banks in Italy. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Italy are summarised in Table 2.

Scheme Participantsall credit institutions operating in Italy, branches of non-EU banks, branches of Italian banks abroad
Scheme Exemptionsbranches of EU-banks (covered by their home countries)
Covered Accountsrepayable funds acquired by banks in the form of deposits or other forms and to bankers' drafts or other similar credit instruments shall be eligible for payment
Maximum Protected Amount100 000 EUR
Paid In CurrencyEUR

Table 2. Deposit guarantee scheme in Italy.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Euro) Foreign Currency
Aa2 (high grade) Aa2 (high grade)

Local currency (Euro) deposit ceiling for Italy is set to Aa2 (high grade), foreign currency deposit ceiling is Aa2 (high grade).

Deposit Rates

Average Deposit Rate (Aug 2017, EUR)
0.91 %  (Jul 2017: 0.96 %)
In Aug 2017, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.91% which was above the Euro Area average (0.36%).
Deposit Rates in Italy.

Chart 7. Deposit Rates in Italy. Source: ECB.

Further Information

Banking Sector Structure

Number of Banks
562
Consolidated Assets (2016)
2 700.37 bln EUR  (-0.84%)
Recent Changes (2016)
new banks: 14, closed banks: 57

Currently there are 562 credit institutions operating in Italy.

In 2016 consolidated banking assets in Italy were 2 700.37 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.

Consolidated banking assets in Italy.

Chart 8. Consolidated banking assets in Italy.

Recent structural changes (2013 - 2016) of the banking sector of Italy are summarised in Table 3.

2013201420152016
Number of Opened Banks581814
Number of Closed Banks19293257

Table 3. Recent structural changes in the banking sector of Italy.

The list of the most recently opened banks in Italy is provided in Table 4.

All the credit institutions operating in Italy can be classified into several categories. Table 5 summarises the number of banks in each category.

CategoryNumber of Banks
Banks130
Branches of foreign banks87
Central banks1
Cooperative banks319
Savings banks25

Table 5. Number of banks by category in Italy.

There are 87 branches of foreign banks from 18 different countries in Italy. Table 6 shows 10 countries having the biggest number of branches in Italy.

Country of OriginNumber of Branches
 France20
 United Kingdom17
 Germany13
 Luxembourg9
 Netherlands5
 Spain4
 Austria4
 Japan2
 Ireland2
 Belgium2

Table 6. Number of branches of foreign banks in Italy grouped by country of origin.

Major Banks of Italy

RankName
1 INTESA SANPAOLO S.P.A.
2 UniCredit SpA
3 BANCA MONTE DEI PASCHI DI SIENA S.P.A.
4 Banco Popolare - Societa Cooperativa (closed)
5 UNIONE DI BANCHE ITALIANE SOCIETA' PER AZIONI (IN FORMA ABBREVIATA UBI BANCA)
6 MEDIOBANCA - BANCA DI CREDITO FINANZIARIO S.P.A.
7 BANCA NAZIONALE DEL LAVORO S.P.A. (IN FORMA CONTRATTA BNL S.P.A.)
 

Intesa Sanpaolo SpA

Intesa Sanpaolo is a banking group founded in 2007 as a result of the merger of two major Italian banks: Banca Intesa and Sanpaolo IMI. Intesa Sanpaolo SpA, the head of Intesa Sanpaolo banking group, operates in Italy as a universal bank in all business areas: retail banking, corporate and investment banking and wealth management.

Services
Retail Banking
Private Banking
Corporate Banking
Investment Banking

Retail Banking Products

UniCredit SpA

UniCredit SpA is the head bank of UniCredit Group, one of the largest European banking group with a strong presence in Central and Eastern Europe. UniCredit SpA operates as a universal bank: it offers a broad range of products and services in retail, corporate and investment banking and asset management. UniCredit SpA adopts a fully integrated multi-channel banking model, combining traditional channels with digital ones.

Services
Retail Banking
Corporate Banking
Investment Banking

Retail Banking Products

Banca Monte dei Paschi di Siena SpA

Established in 1472 Banca Monte dei Paschi di Siena is the oldest bank in the world. Banca Monte dei Paschi di Siena operates all over Italy and has presence in major international financial centres. Banca Monte dei Paschi di Siena is a universal bank offering products and services ranging from traditional retail banking (current and deposits accounts, payment cards, loans) to private banking (mutual funds, wealth management, pension funds, and life insurance policies), corporate banking (project finance, merchant banking, and financial advisory), Banca Monte dei Paschi di Siena is focused on households and small- and medium- enterprises.

Banco Popolare SC

Banco Popolare SC is a cooperative bank providing full range of banking and insurance products to its members. Being a cooperative bank, Banco Popolare SC is a local, mutual, not-for-profit organization. Located in Verona, it serves the local residents (natural and legal persons).

Services
Retail And Corporate Banking
Asset Management
Investment Banking
Insurance

Unione di Banche Italiane SCpA (UBI Banca)

UBI Banca (Unione di Banche Italiane) was established in 2007. UBI Banca is primarily focused on providing retail banking products and services to domestic small- and medium-sized enterprises and private customers.

Services
Retail Banking

Retail Banking Products

Mediobanca SpA

Established in 1946, Mediobanca is focused on providing its clients with highly specialised, innovative services in financial advice, private banking, asset management, wealth management and investment banking solutions.

Banca Nazionale del Lavoro SpA

Banca Nazionale del Lavoro (BNL) was founded in 1913 and is now one of the major banks in Italy. Since 2006 BNL is a member of BNP Paribas, one of the leading European groups in global banking and financial services. BNL offers a wide range of banking products and services, financial and insurance services from traditional to more innovative, dedicated to different market segments: retail and private, corporate and public administration.

Services
Retail Banking
Private Banking
Corporate Banking
Insurance

Retail Banking Products

Current Accounts: 16 Offers from 13 Banks

Interest Rates: 0.00 - 1.00 % p.a.
Overdraft Rates: 0.00 - 16.99 % p.a.
Annual Costs: 0.00 - 69.60 EUR

16 current accounts offers from 13 banks operating in Italy are currently available. The interest rates (per annum) are within the range 0.00 - 1.00 %,the overdraft rates (per annum) - 0.00 - 16.99 %, the annual costs - 0.00 - 69.60 EUR.

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Lowest Annual Costs Offer: HYPE (BANCA SELLA - S.P.A.)
Interest Rate: 0.00 % p.a.
Overdraft Rate: 0.00 % p.a.
Annual Costs: 0.00 EUR

Banca Sella SpA is a subsidiary ofBanca Sella Holding SpA, providingretail banking products to private individuals and SMEs online. Banca Sella SpA alsooffers securities trading solutions.

Savings Accounts: 80 Offers from 14 Banks

Interest Rates: 0.04 - 2.00 % p.a.
Account Terms: 1 - 12 months

80 savings accounts offers from 14 banks operating in Italy are currently available. The savings accounts terms vary from 1 month to 1 years (12 months). The interest rates are within the range 0.04 - 2.00 %.

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Highest Interest Rate Offer: Conto Widiba (WISE DIALOG BANK S.P.A.)
Interest Rate: 2.00 % p.a.
Account Term: 1 months

Incorporated in 2014, Wise Dialog Bank (formerly Banca Widiba) is a direct bank offering retail banking products and services via direct channels, for example Internet. Being a direct bank, Wise Dialog Bank doesn't have to support an expensive branch network and hence can offer its products and services at fair prices. Wise Dialog Bank is owned by Banca Monte dei Paschi di Siena and is a member of Montepaschi Group.

Time Deposit Accounts: 30 Offers from 8 Banks

Interest Rates: 0.25 - 2.40 % p.a.
Deposit Terms: 3 - 120 months

30 time deposit accounts offers from 8 banks operating in Italy are currently available. The time deposit accounts terms vary from 3 month to 10 years (120 months).The interest rates are within the range 0.25 - 2.40 %.

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Highest Interest Rate Offer: Festgeld (BANCA SISTEMA S.P.A.)
Interest Rate: 2.40 % p.a.
Deposit Term: 120 months

Founded in 2011, Banca Sistema is focused on providing factoring, debt management and collection services. Banca Sistema also offers retail and corporate banking products and services.

Credit Cards: 6 Offers from 3 Banks

Annual Costs: 24.00 - 100.00 EUR

6 credit cards offers from 3 banks operating in Italy are currently available. The annual costs of the credit cards are within the range of 24.00 - 100.00 EUR.

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Lowest Annual Costs Offer: Carta di Credito CheBanca (CHEBANCA! S.P.A.)
Annual Costs: 24.00 EUR

CheBanca! was established in May 2008 as a retail bankof Mediobanca Group and provides retail bankingand insurance products and services. CheBanca! operates mainlyonline as a direct bank but also has a branch network.

Consumer Loans: 2 Offers from 2 Banks

Borrowing Rates: 8.48 - 9.11 %
Loan Terms: 48 - 48 months

2 consumer loans offers from 2 banks operating in Italy are currently available. The consumer loans terms vary from 48 month to 4 years (48 months).The effective borrowing rates are within the range 8.48 - 9.11 %.

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Lowest Borrowing Rate Offer: BNL In Novo il Prestito (BANCA NAZIONALE DEL LAVORO S.P.A. (IN FORMA CONTRATTA BNL S.P.A.))
Borrowing Rate: 8.48 %
Loan Term: 48 months

Banca Nazionale del Lavoro (BNL) was founded in 1913 and is now one of the major banks in Italy. Since 2006 BNL is a member of BNP Paribas, one of the leading European groups in global banking and financial services. BNL offers a wide range of banking products and services, financial and insurance services from traditional to more innovative, dedicated to different market segments: retail and private, corporate and public administration.

Car Loans: 1 Offer from 1 Bank

Borrowing Rates: 9.11 - 9.11 %
Loan Terms: 48 - 48 months

1 car loans offer from 1 bank operating in Italy are currently available. The car loans terms vary from 48 month to 4 years (48 months).The effective borrowing rates are within the range 9.11 - 9.11 %.

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Lowest Borrowing Rate Offer: Prestiti Personali (FINDOMESTIC BANCA SPA)
Borrowing Rate: 9.11 %
Loan Term: 48 months

Established in 1984, Findomestic Banca specializes in providing loans to individuals for purchase of goods and services for private use. Findomestic Banca is a member of BNP Paribas group.