Finance and enterprise: Italy still bank-centric, big gap with Europe on bond recourse
Equita-Luiss Business School study: However, there is optimism about 2025 for the growth of alternative forms of financing
3' min read
3' min read
The Italian economy remains bank-centric and with a significant size gap compared to the rest of Europe in bond issues by companies. While it is true that, on the one hand, savers' interest in corporate bonds has also increased, alongside that for government bonds, on the other, alternative forms of financing are struggling, starting with private debt.
Financing: the bank is the prevalent channel
According to data compiled in an Equita-Luiss Business School paper, Italian companies are more dependent on bank credit than the rest of Europe, so much so that in the first half of 2024 it accounted for 82% of the total obtained by non-financial companies, compared to 78% for the EU average, and in the last five years it has accounted for an average of 89% compared to 82% at continental level. This is the highest figure among major European economies, on a par with Germany.
Italy only fourth EU market for corporate bonds
But Italy, unlike German companies, accuses a significant gap in companies' recourse to the bond market: 31 billion euro issues in 2023 (already 28 in the first half of 2024) against Germany's 92 billion, the UK's 81 billion and France's 78 billion. Italy is the fourth largest European country in terms of bond issues and accounts for 8% of the entire EU market," the study indicates, "while Germany accounts for 25%, the UK and France around 20% each, thus showing a clear gap to be made up by Italy.
'The credit market,' observed Raffaele Oriani, Dean Luiss Business School and Professor of Corporate Finance, 'continues to be predominantly bank-based in Italy and to a greater extent than in other countries. We do not expect any changes in the short term, but on the other hand the corporate bond market and alternative forms are growing and could reduce this dependence of companies on the banking channel'.
Favourable moment for liquidity and retail interest
Liquidity and interest in our country, however, notes the Equita-Luiss Business School analysis, is not lacking even from savers who are beginning to become significant investors not only in BTp but also in business loans. Both in 2023 and in the first half of 2024, the incidence of retail investors on Treasury issues has risen into double figures (16% in 2023 with 44 billion subscribed and 17% in the first half of 2024 with 30 billion) and in the last eighteen months, several corporate bond placements (starting with that of Eni in February 2023 and of Cdp in November 2023) have been dedicated to retail or have reserved a significant share for this type of investor.
