Deutsche Bank adjusted its stance on BPER Banca S.p.A., moving the rating from buy to hold while retaining an unchanged price target of 13.40. The revision followed a first-quarter 2026 reporting period in which Italian banks and asset gatherers broadly exceeded expectations.
Giovanni Razzoli, Deutsche Bank's analyst covering the sector, summarized the period as "another good set of results in the 1Q with beats across the board." At the consolidated level, banks outpaced Deutsche Bank's bottom-line projections by 16%, with asset gatherers topping forecasts by 7%.
Despite the stronger-than-expected results, Deutsche Bank did not make significant adjustments to its overarching earnings outlook. Bottom-line forecasts for banks across 2026 through 2028 remained largely unchanged. For asset gatherers, the bank raised its profit projections by an average of 2% over the same period.
In a separate move, Deutsche Bank increased its price target on Banca Monte dei Paschi di Siena to 12 from 11 and maintained a buy rating on that name.
Key performance indicators across the sector showed a mixed but generally constructive picture. Net interest income declined 1% both sequentially and year-on-year, a change Deutsche Bank attributed to calendar effects, although the actual NII figure came in ahead of the bank's estimates. Lending momentum improved, with growth accelerating to 3.1% year-on-year in the first quarter compared with 2.7% in the fourth quarter of 2025, narrowing the gap versus trends reported in Spain and Greece.
Fee income also surprised to the upside, coming in 5% above expectations and rising 4% versus the same quarter a year earlier. Cost control remained a positive feature: operating expenses fell 1% year-on-year and were 3% below Deutsche Bank's forecasts, producing a cost-to-income ratio of 38% for the sector.
Risk metrics improved in the quarter as well. The cost of risk declined to 21 basis points in the first quarter, down markedly from 54 basis points in the fourth quarter of 2025 and broadly aligned with the 20 basis points recorded in the first quarter of 2025.
On individual banks, Razzoli described BFF Bank's performance as a "relief achievement" given prevailing operating conditions. Mediobanca stood out as the exception in the reporting cycle, with the analyst noting the bank was "still navigating its transition."
Overall, Deutsche Bank's review of first-quarter results led to selective rating and target adjustments while leaving the firm's broader earnings forecasts largely intact. The changes reflect a sector that delivered better-than-expected profitability and cost discipline, coupled with improving lending trends and a lower reported cost of risk in the quarter.