ITALY

Introduction to ITALY

Italy, the third largest economy of the Eurozone, is progressively, although very slowly, recovering from the debt and financial crisis. The pace of the recovery has gained some momentum recently (0.9% in 2016), benefiting from the growth-oriented measures adopted by the government (tax cuts, support to public investment, social contribution exemption to support employment growth etc.) and from the highly accommodating monetary policy stance followed by the ECB, which will further ease financial and monetary conditions. Modest growth should continue going forward.

However, the recovery path from the crisis is still long. Output is still 8.5% below pre-crisis levels, while the Eurozone as a whole has now closed the gap (0.8% above). The crisis is not at the root of all the problems in the Italian economy, which is widely seen as a low-potential-growth economy. Several restrictions on both labour and production and the huge level of public debt are weighing on productivity, investment and activity growth. Protracted ultra-low GDP growth has progressively increased non-performing loans which now weigh on banks’ balance sheets significantly.

The government, however, has launched several structural and institutional reforms that aim to address these various weaknesses and boost output in the medium-to-longer term. The process should however take time to bear fruit. Against this background, public finances recover slowly. The country exited the European excessive deficit procedure early in 2012, but improvement has been limited since then, with fiscal deficit still at 2.6% of GDP in 2015. With low growth and moderate improvement in public balances, the public debt ratio has not started yet to decrease but is stabilising at just over the high level of 130% of GDP.

Summary

Italy is one of BNP Paribas' 'home' markets, with comprehensive capabilities for all customer segments. BNP Paribas is a leading player in corporate banking in Italy, and employs more than 70 people specifically dedicated to cash management services as well as a complete service offering in trade finance  across 17 business centres and 5 trade centres. Corporate customers include Italian companies of all sizes, together with Italian subsidiaries of foreign companies. These organisations are attracted to the bank's strong balance sheet, depth of domestic and international products and services, including proximity services across Italy, international footprint and commitment to service quality.

Italy is one of BNP Paribas' 'home' markets, with comprehensive capabilities for all customer segments. BNP Paribas is a leading player in corporate banking in Italy, and employs more than 70 people specifically dedicated to cash management services as well as a complete service offering in trade finance across 17 business centres and 5 trade centres. Corporate customers include Italian companies of all sizes, together with Italian subsidiaries of foreign companies. These organisations are attracted to the bank's strong balance sheet, depth of domestic and international products and services, including proximity services across Italy, international footprint and commitment to service quality.

Currency

  • Italy uses the euro (EUR).

Bank accounts

  • A company is generally considered resident in Italy if its place of effective management is located there.
Inside ItalyOutside Eurozone
Local Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Foreign Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Inside ItalyOutside Eurozone
Local Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Foreign Currency

Permitted without restriction, fully convertible.

  • Account opening and management is relatively straightforward in Italy, subject to standard know your customer (KYC) and compliance requirements. Please contact your BNP Paribas relationship manager for more information.

BNP Paribas Cash Management Capabilities

Payments & Collections

  • Credit transfers are used by companies to pay salaries and suppliers, and to make tax, benefit and treasury payments.
  • Low-value SEPA credit transfers (SCTs) can be settled via BI-COMP Rete Dettaglio, STEP2 or via correspondent banking networks. Participants in BI-COMP can clear payments bilaterally with participants in clearing systems in Austria (Clearing Service International for SCTs) and the Netherlands (Equens Clearing and Settlement System for SEPA direct debits and SCTs).
  • Approximately 550 banks in Italy participate in the SEPA credit transfer scheme.
  • The niche paper-based MAV (Mediante Avviso– a paper-based giro issued by the creditor's bank) and Freccia (Bollettino Bancario – a paper-based giro issued by the creditor) remain outside of the scope of SEPA and are not affected by the SEPA end date regulation.
  • High-value and urgent domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2-BI.
  • High-value and urgent cross-border payments can also be settled via the Euro Banking Association’s EURO1 system. Thirteen banks in Italy participate directly in EURO1.
  • Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
  • In November 2017, the European Payment Council’s SCTInt scheme (a pan-European 24/7 instant payment scheme for SEPA credit transfers) will go live across all SEPA countries. The scheme will enable the transfer of funds (the maximum threshold value for SCTInsts will be EUR 15,000) to another account in less than ten seconds.
  • Direct debits are used for low-value, regular payments, such as utility bills.
  • Direct debits can be settled via BI-COMP Rete Dettaglio or, in the case of SEPA direct debits, by STEP2.
  • The RIBA (Ricevuta Bancaria), a non-preauthorised direct debit, remains outside of the scope of SEPA migration and is not affected by the SEPA end date regulation.

Electronic banking

Liquidity management

  • Domestic notional cash pooling is available in Italy but not widely practiced because of the restrictions on banks offsetting debit and credit balances.
  • Domestic cash concentration structures are widely available.
  • Resident and non-resident bank accounts can participate in the same cash concentration structure, as can different legal entities.
  • Zero balancing is the most commonly used structure.
  • Multi-bank cash concentration is offered by some Italian banks.
  • Cross-border notional cash pools are not usually based in Italy because of the restrictions on banks offsetting credit and debit balances.

  • Cross-border cash concentration structures are not normally based in Italy.

  • Residents in Italy are able to sweep cash from their resident bank accounts into non-resident accounts on a daily or weekly basis.

  • Italian resident entities are also permitted to participate in cash concentration structures where the header account is located outside Italy.

Short term investments

BNP Paribas Trade Finance Capabilities

International trade

  • As a member of the EU, Italy follows the EU customs code and applies all associated regulations and commercial policies.
  • Trade with other countries in the European Economic Area (EEA) and Switzerland is exempt from tariffs and other controls.

Imports

Engineering products

 

Chemicals

Transport equipment

Energy products

Minerals and non-ferrous metals

Textiles and clothing

Food

Beverages

Tobacco

 

Primary Import sources

Germany (15.4%)

France (8.7%)

China (7.7%)

Netherlands (5.6%)

Spain (5.0%)

Belgium (4.7%)

 

 

 

 

Exports

Engineering products

Textiles and clothing

Production machinery

Motor vehicles

Transport equipment

Chemicals

Food

Beverages

Tobacco

Minerals and non-ferrous metals

Export markets

Germany (12.3%)

France (10.3%)

USA (8.7%)

UK (5.4%)

Spain (4.8%)

Switzerland (4.7%)

 

 

 

 

 

2012

2013

2014

2015

2016

Exports

- goods USD m

485,102

503,486

517,128

449,550

454,090

- services USD m

108,392

111,988

113,987

98,205

101,403

Imports

- goods USD m

463,660

455,485

454,602

393,388

386,938

- services USD m

108,664

111,442

115,337

101,278

105,274

Current account as % GDP

– 0.4

+ 0.9

+ 1.8

+ 2.2

+ 2.6

Source: IMF, International Financial Statistics, June 2017.

Regulatory requirements

Market data updated as of 23-06-16