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Archive » September 2024 » Bank business models in unprecedented territories. Italian banks over the period 2014-2022

Bank business models in unprecedented territories. Italian banks over the period 2014-2022

Roberto Savona
September 2024 - n. 9
Keywords: Bank business model, Portfolio rebalancing, politica monetaria, Covid-19, conflitto Russia-Ucraina
Jel codes: G21, C33, E52, G11

This article explores the bank business models in Italy over the complex 2014-2022 period. We document a change in regime occurred in 2018, when many banks moved into traditional and complex commercial banking business models. Using data from 231 Italian banks, our main findings are as follows: (i) in periods of stress, when risk exposure (or risk perception) is higher (2014-2017 and Covid-19), the objective is to reduce capital absorption required by prudential regulation, while maintaining a minimum level of profitability; (ii) in periods of moderate risk (2018-2022) and risk weighted assets under control, the objective function is designed around the maximization of Roa, then implying increasing risk exposures, in particular loans.

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