Gruppo Bancario Cooperativo Iccrea

The group comprises 116 BCC, or about 52% of the entire Italian cooperative banking sector. Iccrea Banca--majority owned by the BCC--acts as the parent company, and owns 16 entities offering commercial, financial, and operational services to the group entities. Even if the BCC remain legally independent, the "cohesion contract" regulates relationships within the group and delegates the strategic direction and coordination of the various members to the parent bank. Among others, the contract gives Iccrea power to define and monitor corporate governance, internal controls, early warning systems, and cross-guarantee schemes. Our rating approach is therefore to first assign a group credit profile (GCP) to GBCI. We then use the GCP to determine the rating on Iccrea Banca, based on our

... provides buffers against a weakened economy. Driven by a historically higher interest margin, Gruppo Bancario Cooperativo Iccrea (GBCI)'s profitability will continue to support earnings and capitalization. We expect profitability will also benefit from the gradual contribution of business diversification and improving operating efficiency. We therefore expect capital will progress toward 10.5-11.0%, from 8.1% at year-end 2022, pro forma the economic risk for Italy at '5' (see "Various Rating Actions On Italian Banks On Balance Sheets' Resilience To Economic Cycles," RatingsDirect, Oct. 25, 2023). Furthermore, it will continue to enjoy extremely low dividend distributions (less than 150 million per year)....

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