Italian banks have just completed an unprecedented three-year period. According to data released by FABI (Federazione autonoma bancari italiani), from 2022 to 2024, credit institutions have collected over 112 billion euros in pre-tax profits, mainly thanks to the increase in interest rates decided by the European Central Bank.

2024 marks the new record

In the last year alone, the banking system achieved 46.5 billion euros in profits, an increase of 14% compared to 2023. This result consolidates an explosive trend that began with the rate hike in 2022 and has inflated the margins on interest income, i.e., the earnings on loans granted to families and businesses.

A change of pace after uncertain years

The real turning point? 2022, when profits reached 25.5 billion, interrupting a flat phase that began in 2018. Between 2018 and 2021, profits remained between 15 and 16 billion per year, with a drop to just 2 billion in 2020, during the pandemic. From there, the recovery has been steady and rapid.

Never this good, not even before 2008

Not even in the "good times" before the 2008 crisis had banks ever recorded such high results. The surge in rates, which began in mid-2022, has revived the profitability of credit intermediation, the activity that generates profits by lending money.

But now rates are falling: and after the gold?

With the ECB already starting to reduce rates – now at 2% – a new phase opens for banks, where profitability might cool down again. With the era of easy margins over, institutions will need to rethink business models and commercial strategies to keep up.