The Interest Margin of Italian Banks in 2021 and 2022

Abstract

This study focuses on the analysis of the interest margin (MI) of Italian banks listed on the MTA (Mercato Telematico Azionario) of the Italian Stock Exchange, for the years 2021 and 2022. The net interest margin is represented by the difference between interest income on uses and interest expense on collection operations. This indicator is widely recognized as a measure of operational efficiency within credit broking. In the context of this analysis, the trend of the inflation rate in the euro area and of the ECB reference rates will also be examined, for the period from 2013 to 2022. The restrictive monetary policy of the ECB, which began during of 2022 and continued with a certain intensity, was in our opinion one of the main causes of the increase in the interest margin. The scientific literature on the subject of interest margin and negative nominal interest rates will be examined. Finally, we will explore the evolution of the composition of financial instruments held by retail customers at Italian banks over this period.