State effect for banks and loans. Fabi report
Only thanks to the Central Guarantee Fund and other forms of public support to protect loans has it been possible, in the last year, to increase the stock of bank loans. What emerges from the Fabi report, the banking federation led by Lando Maria Sileoni
Less and less oriented towards traditional activity, that linked to loans, and increasingly aimed at selling savings and even insurance products. This is the photograph of the Italian banks taken by Fabi.
A research by the Italian Autonomous Banking Federation reveals that, in 2020, the share linked to commissions for the sale of financial and insurance products is growing on the total turnover of the banking sector, while the share of profits deriving from loans is decreasing.
HOW BANKS MOVE
In short, banks focus on low-risk activities (the sale of financial products, in fact) and somehow overshadow loans, an area made increasingly complex also due to the stringent rules, perhaps too much, written in Europe.
THE NUMBERS ON THE COMMISSIONS
Out of 78.1 billion euros of total revenues, in fact, more than half, i.e. 39.4 billion, comes from commissions while credit guarantees revenues for 38.7 billion: the distance between the percentages, 50.5% against 49, 5%, it seems irrelevant, but in reality it is a historically important 'overtaking' that is also reflected in the clientele.
PUBLIC SUPPORT
Only thanks to the Central Guarantee Fund and other forms of public support to protect loans – activated by the government to favor a greater supply of liquidity to the real economy, weakened by the effects of the pandemic – has it been possible, in the last year, to growth in the stock of bank loans, also emerges from the Fabi report, according to which, however, there is no correspondence between the amount of loans disbursed with public guarantees and the positive balance of the stock.
BETWEEN FINANCING AND GUARANTEES
If the loans guaranteed by the State amounted to over 190 billion euros, in fact, the overall increase in the amount of bank loans to businesses and households amounted to 52 billion. If the state guarantees had been fully exploited to support new credit lines, the positive change should have been closer to 190 billion, but the distance is large.
THE ROLE OF THE STATE GUARANTEE
"The anomalous difference found can be explained by the fact that the state guarantee was used, for the greater part, to replace 'existing' credit lines (ie old loans) and not to provide additional liquidity to companies, as hoped, instead , the government in enacting that provision of decree law 23 of 8 April 2020. The banks, in essence, have exploited the measure to increase the degree of coverage of their balance sheets, reducing the degree of risk. In short, the 'parachute' of the state represented a formidable solution to reduce the risks of the banking sector ”.
THE COMMENT OF SILEONI
The reduction in loans, and therefore in the revenues deriving from these activities, is also linked to the growing attention of the European Central Bank to the quality of credit, with stringent rules that lead to a reduction in loans: however, there is room for more forward-looking banks which, for example, could finance business ideas and projects. This phase of aggregations which will produce unbridled competition in the banking sector must be kept under close observation. As for revenues, it should be remembered that foreign investment funds, among the main shareholders of Italian banks, are exclusively interested in dividends and the higher they are, the more the CEOs of the banks themselves preserve their top positions. All this scenario could cause damage to banking customers, both households and businesses, who, in any case, in the context of a free market and in full competition, will always be able to choose the most appropriate solutions for their needs ", commented the secretary general of Fabi. , Lando Maria Sileoni, researching the union's banking sector, emphasizes Fabi.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/effetto-stato-per-banche-e-prestiti-report-fabi/ on Fri, 20 Aug 2021 07:32:03 +0000.