Unicredit secures ECB approval for the ‘Danish compromise’. What has changed and why is it important for the banking sector?
A benefit of 52 basis points. From the reporting for the third quarter of 2026 onwards, the bank explains, ‘insurance holdings may be treated by applying risk weights rather than being deducted from regulatory capital’
Unicredit has obtained authorisation from the European Central Bank to apply the Danish compromise methodology when calculating the group’s consolidated capital ratios. A decision that is worth 52 basis points of CET 1 for Piazza Gae Aulenti, but which adds a new piece to the complex mosaic of the Italian financial landscape, given the growing weight of insurance holdings in the various projects currently underway.
The news was announced by the bank led by Andrea Orcel, which adds that, as from the reporting for the third quarter of 2026, the bank explains, ‘insurance holdings may be treated by applying risk weights rather than being deducted from regulatory capital’. This will guarantee ‘an estimated benefit of around 52 basis points on the CET1 ratio, based on the situation as at the second quarter of 2026’.
Figures aside, the granting of authorisation comes as no surprise. UniCredit has, in fact, been working for some time to secure favourable prudential treatment for its insurance portfolios. As early as September 2024, when it announced the in-house integration of its life bancassurance activities in Italia, the group had factored the future recognition of its status as a financial conglomerate and the application of the Danish Compromise into its assessments. And in June 2025, once the in-house integration had been completed, the bank announced that it would formally apply for recognition under the Danish Compromise. This intention has, moreover, been reiterated over time by CEO Andrea Orcel.
However, the issue is of particular significance today, in light of UniCredit’s current and future moves regarding its stake in Generali, of which it currently holds 8.8 per cent. With the ECB’s approval of the new treatment, the stake in Trieste’s share capital becomes much less burdensome from a capital perspective, and this is happening just as the Lion finds itself increasingly at the centre of the various trajectories of the financial game.
After all, the range at Intesa Sanpaolo’s bid for MPS – which controls 13.2 per cent of Generali via Mediobanca – sees the recognition of the Danish Compromise as one of its cornerstones. Intesa has already made it clear that the stake would be held “as an equity investment, not a controlling interest, without interference in Generali’s governance” and would continue to be accounted for using the equity method. For its part, however, Intesa – unlike UniCredit – is already classified as a financial conglomerate, and therefore expects the regulatory approval process to proceed smoothly.
In the background, there remains the alternative proposal put forward by the CEO of MPS Luigi Lovaglio. In this scenario MPS-Banco BPM-Banca Generali, MPS would in turn continue to be one of Banco BPM’s major shareholders, albeit with a smaller stake than at present: its stake in Banco BPM would fall from 13.2 per cent to 8.8 per cent, assuming full acceptance of the two offers and the proposed share-for-share exchanges. The entire plan, however, will now have to be put to the test by the shareholders at the general meeting on 29 October.
