Strategic responses to interest rate variability in the Italian banking sector: the case of Intesa Sanpaolo

In the fifteen years between 2008 and 2024, the European banking system faced several crises that triggered two distinct monetary policy regimes. At first, it went through a phase of near-zero, if not negative, interest rates, followed by a second phase characterised by a sudden normalisation of interest rates. The outcome of these changes was a profound transformation of the operating model and strategies of banks, which were forced to review their sources of profitability in favour of structures less reliant on interest margins. This scenario affected banking systems throughout the Eurozone, including the Italian banking system. This is the context in which Intesa Sanpaolo responded to the crisis by embarking on a transformation of its operating model to reduce its dependence on interest margins. This thesis aims to investigate the strategies implemented by the Italian banking group, showing how it exploited multiple levers based on the internal phases of each monetary policy regime. Four macro-strategies implemented by Intesa Sanpaolo to generate a solid and resilient operating model are identified: the transformation of deposits and assets under administration into assets under management; the strengthening of operational efficiency through internal rationalisation and digitalisation processes; the consolidation of the capital structure by improving the quality of the loan portfolio; and the growth of wealth management and bancassurance. The bank's performance is contextualised as intermediate compared to a sample of Italian and European competitors, resulting in a solid positioning of the bank at the end of the fifteen-year period and a good effectiveness of the strategic measures implemented. The transformation implemented is not the result of a transitional phase, but if consolidated over time, it can bring a competitive advantage to the long-term performance not only of Intesa Sanpaolo, but of the entire Italian banking system.