How to Profit from Italian Government Inefficiency: A Cheap Sleeper Bank With Lots of Upside

This isn’t just a cheap stock. It’s a compounding machine built on bureaucracy, now trading at 7x with €560M in shareholder returns on deck. And few are paying attention.

Back in my European Bank Momo Report, I laid out the case that Euro banks had finally broken out. Cheap. Hated. But inflecting. I highlighted the improving fundamentals, rising rate sensitivity, and emerging earnings power across the continent. Big big winners for everyone.

But I didn’t say buy everything. In fact, I tweeted shortly after about the pullback coming.

And the pullback did come. Everyone got hit with some tariff induced sell offs. And with uncertainty around the economy, rates, and everything else people are worried about banks. Because afterall banks are levered beta. As cyclical as it comes.

If the tide goes out, you don’t want to own banks. If the tide rises, then you want to own them all.

But this piece is different.

This is not a momo name. Not a cyclical pop play. This one is about a bank that’s a niche machine built for slow markets, not fast ones. It doesn’t need a bull market. It needs bureaucracy. And it's quietly setting up for a monster rerate if it executes.

What follows is a deep dive on the one European financial that wins when everything else slows down. Trading at 7x earnings with a dividend ban that could lift soon, sovereign legal tailwinds, and management laser-focused on delivery, this is one you don’t rush into.

You wait. You study. And when the moment feels right, you lean in.

I am kicking myself for not buying more when it dropped down into the high 6s and 7s. But the long term set up is there and I like this one a lot.

Let’s take a trip to Italy to find our next potential source of alpha in bank land …