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Ratings agency downgrades Italian banks.
Fitch Ratings has downgraded Banca Popolare di Sondrio’s (BPS) Long-term Issuer Default Ratings (IDR) to ‘BBB’ from ‘BBB+’, Banca Popolare dell’Emilia Romagna’s (BPER) to ‘BB+’ from ‘BBB and Banca Carige’s (Carige) to ‘BB’ from ‘BB+’. The agency has also placed Banca Popolare di Milano’s (BPM) ‘BBB-‘ Long-term IDR on Rating Watch Negative (RWN).
Simultaneously, Fitch has affirmed Banco di Desio e della Brianza’s (BDB) and Credito Emiliano’s (Credem) Long-term IDRs at ‘BBB+’ and Banca Popolare di Vicenza’s (BPV) and Credito Valtellinese’s (Creval) Long-term IDRs at ‘BB+’.
The Outlooks on the banks’ Long-term IDRs are Negative, with the exception of BPM, whose Long-term IDR is on RWN. The Negative Outlooks on BDB, Credem, BPS, Creval and BPV’s Long-term IDRs reflect these banks’ vulnerability to the recessionary domestic environment.
Fitch argues there is a downside risk to its forecast for Italy’s GDP growth, and a further weakening of individual banks’ fundamentals could result in a downgrade of their IDRs. The Negative Outlooks on BPER and Carige’s Long-term IDRs, which are at their respective Support Rating Floors (SRFs), relate to the Negative Outlook on Italy’s Long-term IDR and reflect Fitch’s view that a downgrade of Italy’s sovereign rating could change the agency’s view on the availability of support for Italian banks.
