Savings Banks

American Banker, December 6, 1985 | Go to article overview

Savings Banks


If Savings and Loan Associations in the United States are currently laboring under a cloud of uncertainty, the same cannot be said of their Italian counterparts. Consider the following statistics:

* Of the 110 banks in Italy authorized to operate throughout the country, 51 are savings banks.

* With 88 headquarters and 3,900 branches employing 70,000 people, Italian Savings and Pledge Banks (which essentially are the same thing), have no rivals when it comes to penetration of the territory.

* Thirty per cent of Italian bank deposits are in their hands, which, since the institutions generally cover the lower end of the market, means that more than one in three Italians deals with a savings bank.

* They account for 35 per cent of loans to local trade and 10 per cent of foreign activity.

* They are linked by a member-owned and controlled central credit institution and a country-wide teleprocessing network which provides automatic handling and bookkeeping of payments, data processing and message switching.

* Cariplo of Milan, with 461 branches at home and abroad managing assets in the current fiscal year of more than 30 billion dollars is not only among the top five or six banks in Italy, it is the largest savings bank in the entire world.

U.S. Example

Italian savings banks, in sum, appear to be enjoying vigorous good health. And while it may be small consolation, at least some of the credit belongs to S&L's in the United States, if only by way of example.

What has happened to the American thrifts sent a real message to use about the dangers of over-specialization, explains Claudio Scaetta, Senior Manager of the International Division of the Istituto di Credito delle Casse di Risparmio Italiane (ICCRI), the savings banks central credit institution.

"It told us that a bank cannot survive in today's markets by operating in too narrow a corridor of banking activity."

Total Banks

It is in that corridor of banking activity where the main difference between an American thrift and an Italian "Cassa di Risparmio" lies. Unlike the troubled S&L's, Italian savings banks are fully-fledged credit institutions active in all banking sectors.

They are "total banks" engaged in everything from small loans and deposits to corporate banking. Their investment portfolios consist mainly of securities, credit facilities, bills collection and discount, loans for home construction. Lending to local and provincial authorities is a long-standing tradition.

Many of the large advances are secured by mortgages, bills of exchange, government paper or public entities guarantees. Several of the larger institutions have their own autonomous special credit sections for agriculture, mortgage and building industry loans.

Like their partners in the Italian banking industry, the savings banks in recent years have also branched out into near banking activities, creating their own leasing, factoring and investment vehicles.

"We are a commercial bank, something that is not always clear to American customers who have a somewhat different view of what savings banks are all about," says Giovanni Malvezzi, Deputy Managing Director of Cariplo, the Cassa di Risparmio delle Provincie Lombarde.

Echoing the same opinion, Lucio Veneziani of the Cassa di Risparmio di Roma points out "We perform all the functions of a normal "banco d'affare", a business bank".

Origins

Formed originally to encourage individual savings and support the less wealthy, Italian Savings and Pledge Banks are rooted in the country's history.

The savings banks exist primarily in the north, outgrowths of the Austro-Hungarian Hapsburg financial system.

The Pledge Banks are further south, owing their origins to the 14 century charitable works of Franciscan Friars.

Their major distinguishing features are a legal public nature, an institutional objective to foster local economic and social development and the allocation of profits to reserves and to activities of local public utility and charity. …

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