## Republic of San Marino: Selected Issues

_IMF Staff Country Reports, December 10, 2024_

## Source details

**Canonical URL:** [Republic of San Marino: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/12/09/republic-of-san-marino-selected-issues-559293)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/12/09/republic-of-san-marino-selected-issues-559293/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/12/09/republic-of-san-marino-selected-issues-559293/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/12/09/republic-of-san-marino-selected-issues-559293/bundle-manifest.json)

## Bibliographic details
- Published: December 10, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400294761.002

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### Summary findings
- Compares Sammarinese banks with nearby Italian banks with similar business models, highlighting gaps in asset quality, capital adequacy, and cost efficiency.
- Most San Marino banks need to catch up in terms of asset quality, capital adequacy and cost efficiency.
- The banking sector remains oversized.
- The number of bank branches needs to be reduced by more than two thirds to reach the EU level.
- The share of income-generating assets should be increased.
- It is key to improve the competitiveness of the banking sector well-ahead of the 15-year time frame granted by the EU association agreement.

### Detailed diagnostic of the banking sector
- Asset quality: San Marino banks show gaps relative to comparable Italian peers (no specific percentages provided on the page).
- Capital adequacy: Shortfalls vis-à-vis similar Italian banks are identified (no specific ratios provided on the page).
- Cost efficiency: High operating costs reduce profitability; reducing operating costs would boost profits.
- Business model: Increasing the share of income-generating assets is recommended to enhance returns.
- Structure: The sector is oversized; system-level consolidation can be considered if within-bank consolidation is insufficient to restore competitiveness and achieve economies of scale.

### Policy recommendations and scenarios
- Bank-level actions:
  - Reduce high operating costs to boost profits.
  - Increase the share of income-generating assets.
  - Pursue within-bank consolidation where feasible to restore competitiveness.
- System-level options:
  - Consider system-wide consolidation to achieve economies of scale if within-bank measures are insufficient.
  - Reduce the number of bank branches by more than two thirds to align with EU branch density.
- Timing:
  - Improve competitiveness well-ahead of the 15-year time frame granted by the EU association agreement.

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## Content in this bundle

- **Republic of San Marino: Selected Issues; IMF Country Report No. 24/331; November 15, 2024**
  - [Republic of San Marino: Selected Issues; IMF Country Report No. 24/331; November 15, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1smrea2024002-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Republic of San Marino: Selected Issues; IMF Country Report No. 24/331; November 15, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1smrea2024002-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/12/09/republic-of-san-marino-selected-issues-559293_