Hold Rating for Banca Sistema S.p.A. Amid Regulatory Uncertainties and Dividend Ban

Banca Sistema S.p.A. (0R9H – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Davide Rimini from Intesa Sanpaolo maintained a Hold rating on the stock and has a €2.20 price target.

Davide Rimini’s rating is based on several factors that contribute to a balanced outlook for Banca Sistema S.p.A. The bank has shown strong growth in net interest income, driven by wider asset spreads and reduced funding costs. This positive performance was further supported by the accrual of late payment interest on receivables, following a favorable ruling by the European Court of Human Rights. However, this growth was partially offset by a year-over-year decline in net commissions, primarily due to challenging comparisons.
Despite the positive revenue growth and an upward revision of the 2025 earnings per share estimate, Rimini maintains a Hold rating due to ongoing regulatory uncertainties and a temporary dividend ban imposed by the Bank of Italy. The management’s efforts to reduce reclassified past due loans are crucial, but the outcome remains uncertain. Consequently, while the target price has been raised to EUR 2.20, the overall valuation is contingent on the bank’s ability to navigate these regulatory challenges effectively.