Italian Banks Really May Be Essentially Immune To COVID-19

Before the buffoonery and suicidal stupidity that allowed the U.S. to become the country hardest-hit by COVID-19, that dubious honor belonged to the Italians. And while that country may have passed the baton across the Atlantic, it’s still not doing great, coronavirus-wise. And given the highly immunocompromised nature and advanced age of Italy’s banks, it would be fair to assume that the pandemic might be an extinction-level event for the sector.

As it happens, however, the banks seem to be holding up better than the rest of Italy. Take UniCredit, a bank so Italian that to foreigners it looks fraudulent. It’s just announced plans to set aside €900 million to cover loan losses in the first quarter. This is, objectively speaking, a lot of euros. But for UniCredit, a bank that in an otherwise unremarkable quarter in 2017 wrote off €9.6 billion in bad loans, it’s basically a rounding error. And the improbable good news keeps coming.