In a new report published today, Scope comments on Intesa’s business plan, presented on Tuesday.

According to Scope, Intesa’s fundamentals have materially improved over the past four years, which was reflected by the issuer rating moving from BBB+ to A since Scope first rated the Italian bank in 2014.

One critical area which still clouds Intesa’s credit is its high level of non-performing loans, although Scope thinks these are conservatively provisioned and already declining. The 2017-2021 plan includes objectives to reduce NPLs further, with a 2021 net NPL target of 2.9%.

“We think Intesa will deliver the targets on the asset quality front, probably before 2021. The macro outlook is supportive and Intesa’s portfolio is well collateralised and provisioned for” said Marco Troiano, lead analyst for Italian banks at Scope.

Among other key business-plan objectives, Scope notes the ambitious revenue and cost efficiency targets. Branch network rationalisation, workforce reductions, optimisation of the real estate portfolio, process digitalisation and the simplification of the group’s legal structure will be key levers to keep costs in check while growing revenues.

The report can be downloaded HERE.