The need to roll over and increase wholesale funding will tend to reduce net interest income. Market access remains difficult for smaller banks; creating institutional demand for their bonds could bring significant benefits. With the establishment of two cooperative banking groups this year, the reform launched in 2016 to strengthen the overall solidity of this category, while preserving its mutualistic nature, has been enacted.
The new groups must combine the benefits of the individual banks’ proximity to and knowledge of local firms with an effective exploitation of cost synergies, in order to increase profitability and the capacity to turn to the market when necessary; maximum effort is vital on these fronts.