Milan, July 01, 2009 -- Moody's Investors Service today concluded its rating reviews for 22 Italian
banks. The Bank Financial Strength Rating (BFSR) or long-term
deposit ratings of 12 banks were downgraded, while the ratings of
4 banks were confirmed. Furthermore, 4 banks have only had
their short-term rating lowered from Prime-1 to Prime-2,
whereas 2 banks saw their long-term debt and deposit ratings upgraded.
The existing reviews for 8 banks continue.
The downgrades of BFSRs was limited in all cases to just one notch,
while the downgrades of long-term deposit ratings was limited to
one notch in all but one case. Detail of these is given below.
The extent of these downgrades is less severe than has been seen in some
other major European banking systems. "We had previously
stated that Moody's sees less downside for the financial fundamentals
of Italian banks, compared to some other major European banking
systems" said Henry MacNevin, a Moody's Senior Vice
President and Team Leader for Italian bank ratings, based in Milan.
"This is reflected in the more modest extent of the repositioning
of the ratings of Italian banks, compared to other European banking
systems, where the results of recent rating actions have led to
numerous multi-notch downgrades of BFSRs, although the impact
on deposit ratings throughout Europe has been less severe, due to
the significant level of systemic support being seen across the region",
added Mr. MacNevin.
These rating actions concluded the reviews initiated on May 18,
2009. Eight banks however, continue to have some or all of
their ratings under review . These are Banca CR Firenze,
Banca Italease, Cassa di Risparmio di Ferrara, Interbanca,
Santander Consumer Bank, UniCredit Family Financing Bank,
UniCredit Leasing and UniCredit. Moody's said that it expects
to conclude these reviews within a few weeks.
DOWNGRADES OF BANK FINANCIAL STRENGTH RATINGS
The BFSRs of 10 banks have been downgraded, all of them by one notch.
Moody's said that the downgrades have been driven by Moody's
assessment of the likely impact of the deterioration in the operating
environment faced by the Italian banking system. In particular,
Moody's view that asset quality and capital adequacy are likely
to be negatively impacted in the event of the banking system coming under
more severe stress, was a significant factor underlying the downgrades,
while the rating agency added that the pre-provision profitability
of Italian banks appears more resilient in such a situation, and
that shocks to the profitability of Italian banks may prove to be less
severe than has been seen in some other countries.
Italian GDP is likely to decline by more than 5% this year,
and the unemployment rate is expected to be close to 11% by the
end of 2010. In concert with these broader economic pressures,
the banks' asset quality indicators continue to point towards a further
deterioration. The system-wide problem loan rate has deteriorated
to 5.7% at end of 2008, up from 4.6%
in December 2007. While some banks have initiated capital boosting
measures, through issuance of hybrid bonds to the government,
dividend reductions, or capital raisings, Moody's said that
it is of the opinion that the overall pressure on capital may not have
been sufficiently addressed and resolved by the Italian banks.
"Unless further supportive measures are taken, some banks' capital
cushions could be weakened by asset impairments and provisioning requirements,"
Moody's MacNevin added.
DOWNGRADE OF LONG-TERM DEBT AND DEPOSIT RATINGS
Moody's said that in Italy, as in many other European and
global banking systems, any potentially more significant impact
on banks' intrinsic strength -- and therefore a more pronounced
BFSR downgrade -- would most likely have been largely offset due
to a heightened likelihood of systemic support in this crisis.
However, given the relative resilience of Italian banks (as well
as taking into consideration the low rating of many), this support
has not had a significant impact on the majority of the current rating
actions. Therefore, the lowering of the BFSR by one notch
(and the corresponding Baseline Credit Assessment by one or two notches)
has led to a subsequent impact on the debt ratings of nine of these institutions,
with eight institutions having been downgraded by one notch, and
one institution by two notches. Moody's explained that the expectation
of support from the Aa2 rated Italian government underpins the ratings
of the Italian banks, which are, in almost all cases,
investment grade. The rating agency added that in the event of
a more significant deterioration in the BFSRs of Italian banks,
an increased reliance on systemic support is likely to limit the extent
of further downgrades in senior debt and deposit ratings.
"As we have stated previously, we believe that the Italian government
is both willing and able to support its banking system if and when required,"
Moody's MacNevin said. The banking system's relatively limited
potential capital requirements are not expected to put undue pressure
on the government's financial flexibility, Moody's added.
The differentiation of senior debt and deposit ratings for banks with
the same BFSR reflects Moody's expectation that banks will continue to
receive or are likely to receive support depending on their level of systemic
importance -- even beyond the current crisis. Moody's
measures this systemic importance in terms of deposit and loan market
shares, at both a regional and a nationwide level. Such measures
of systemic importance in some instances can result in an uplift of such
an institution's rating by several notches.
RATING CONFIRMATIONS
Moody's confirmed the BFSRs of 6 banks, and the deposit rating
of five banks.
With regard to the BFSRs Moody's said that its analysis during the
review period had indicated that these institutions are capable of absorbing
a level of stress beyond Moody's expected loss assumptions,
and remain appropriately capitalised at their current rating level,
although in some cases the rating agency concluded that the bank was more
weakly positioned within the BFSR category, and lowered the bank's
Baseline Credit Assessment (BCA) further as a result.
With regard to the long-term deposit ratings Moody's said
that these were confirmed where the BFSR and baseline were confirmed,
or in cases where increased expectation of systemic support outweighed
any lowering of a BFSR or BCA.
UPGRADE OF LONG-TERM DEPOSIT RATINGS
Moody's also upgraded by one notch the long-term deposit
ratings of two banks (Credito Valtellinese and its subsidiary Bancaperta).
The rating agency said that this upgrade of the debt rating reflects the
growth of these institutions in recent years and therefore also an increased
expectation of systemic importance of these banks, which has been
aligned with those of its new peers.
DOWNGRADE OF SHORT-TERM DEPOSIT RATINGS
Moody's downgraded to Prime-2 from Prime-1 the short-term
deposit ratings only, for four banks for which all other ratings
were previously affirmed. These banks are all rated A3 for long-term
deposits. The rating agency said that these rating actions reflect
the fact that, in current market and funding conditions, a
Prime-1 short-term deposit rating is no longer compatible
with the bank's risk and funding profile, as reflected in
their A3 long-term deposit ratings.
RATING OF HYBRIDS
For those banks which saw hybrids downgraded, the number of notches
of the downgrade was in line with the downgrade of the senior debt rating.
Moody's noted that in June 2009 it published a request for comment:
Moody's proposed changes to bank subordinated capital ratings.
If implemented in its current form, the proposal could lead to multi-notch
downgrades of hybrids. Please refer to the request for comment
for further details on proposed changes.
RATING ACTIONS IN SUMMARY
A summary table of these rating actions may be found at : www.moodys.com/cust/getdocumentByNotesDocId.asp?criteria=PBC_118363
Banks with one or more ratings affected are as follows (in alphabetical
order):
1) Banca Agrileasing SpA.:
BFSR of C- confirmed, with negative outlook:
Long-term deposit and senior unsecured ratings of A3 confirmed,
with negative outlook.
2) Banca della Marca Credito Cooperativo:
Short-term deposit rating downgraded to P-2 from P-1.
3) Banca Delle Marche S.p.A.:
BFSR of C- confirmed, with negative outlook;
Long-term deposit and senior unsecured ratings downgraded to A3
from A2, with stable outlook;
Subordinate ratings downgraded to Baa1 from A3, with stable outlook;
Short-term rating downgraded to P-2 from P-1.
4) Banca Infrastrutture Innovazione e Sviluppo:
BFSR downgraded to C from C+, with stable outlook;
5) Banca Monastier e del Sile:
Short-term rating downgraded to P-2 from P-1.
6) Banca Monte dei Paschi di Siena S.p.A.:
BFSR downgraded to C- from C, with negative outlook;
Long-term deposit and senior unsecured ratings downgraded to A1
from Aa3, with stable outlook;
Subordinate ratings downgraded to A2 from A1, with stable outlook.
7) Banca Nazionale Del Lavoro S.P.A.:
BFSR downgraded to C- from C, with stable outlook;
Long-term deposit and issuer ratings downgraded to Aa3 from Aa2,
with stable outlook;
Subordinate ratings downgraded to A1 from Aa3, with stable outlook.
8) Banca Popolare dell'Alto Adige-Suedtiroler Volksbank:
BFSR downgraded to C- from C, with stable outlook;
Long-term deposit and senior unsecured ratings downgraded to A2
from A1, with stable outlook;
Subordinate ratings downgraded to A3 from A2, with stable outlook.
9) Banca Popolare di Milano S.C.a.r.l.:
BFSR downgraded to C- from C, with stable outlook;
A1 long-term deposit, senior unsecured and issuer ratings
confirmed, with stable outlook;
A2 subordinate ratings confirmed, with stable outlook;
A3 preferred stock rating confirmed, with stable outlook.
10) Banca Popolare di Spoleto:
Short-term deposit rating downgraded to P-2 from P-1.
11) Banca Sella Holding:
BFSR of C- confirmed, with negative outlook;
Long-term deposit and senior unsecured ratings of A2 confirmed,
with negative outlook;
Subordinate ratings of A3 confirmed, with negative outlook;
Short-term deposit rating of P-1 confirmed.
12) Banca Tercas:
Short-term deposit rating downgraded to P-2 from P-1.
13) Bancaperta S.P.A.:
Long-term deposit and senior unsecured ratings upgraded to A3 from
Baa1, with stable outlook;
Subordinate ratings upgraded to Baa1 from Baa2, with stable outlook.
14) BancApulia S.p.A.:
BFSR downgraded to D from D+, with negative outlook.
15) Banco Popolare Societa Cooperativa:
BFSR of C- confirmed, with negative outlook;
A2 long-term, senior unsecured and issuer ratings confirmed,
with stable outlook;
A3 subordinate ratings confirmed, with stable outlook;
Baa1 preferred stock rating confirmed, with negative outlook;
P-1 short-term deposit and commercial paper ratings confirmed.
16) Cassa di Risparmio Della Provincia di Chieti:
BFSR downgraded to D+ from C-, with stable outlook;
Long-term deposit and senior unsecured ratings downgraded to Baa2
from Baa1, with stable outlook.
17) Credito Valtellinese:
Long-term deposit and senior unsecured ratings upgraded to A3 from
Baa1, with stable outlook;
Subordinate ratings upgraded to Baa1 from Baa2, with stable outlook.
18) Efibanca S.p.A.:
BFSR downgraded to D from D+, with negative outlook;
Long-term deposit and senior unsecured ratings downgraded to Baa3
from Baa1, with negative outlook;
A3 backed subordinate ratings confirmed, with stable outlook;
Short-term deposit rating downgraded to P-3 from P-2;
P-1 backed short-term debt rating confirmed.
19) Mediocredito Trentino-Alto Adige S.p.A.:
BFSR downgraded to D+ from C- , with stable outlook;
Long-term deposit rating downgraded to A2 from A1, with stable
outlook.
20) MPS Capital Services:
BFSR of D+ confirmed, with stable outlook;
Long-term deposit rating downgraded to A2 from A1, with stable
outlook.
21) Unibanca S.p.A:
BFSR downgraded to D+ from C-, with stable outlook;
Long-term deposit and senior unsecured ratings downgraded to Baa1
from A3, with negative outlook;
22) Unione di Banche Italiane S.c.p.A.:
BFSR of C confirmed, with negative outlook.
PREVIOUS RATING ACTIONS AND METHODOLOGIES
(Please note that this press release does not deal with possible implications
for the covered bond ratings of Italian banks)
The principal methodologies used in rating the issuers mentioned in this
press release are "Bank Financial Strength Ratings: Global Methodology"
and "Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: A Refined Methodology", which can be found at www.moodys.com
in the Credit Policy & Methodologies directory, in the Ratings
Methodologies sub-directory. Other methodologies and factors
that may have been considered can also be found in the Credit Policy &
Methodologies directory.
The previous rating action on Banca Agrileasing was in June 2009,
when the bank's BFSR and LT deposit ratings were put under review
for possible downgrade. Banca Agrileasing is headquartered in Rome,
Italy. At 31 December 2008 it had total assets of EUR 9 billion.
The previous rating action on Banca della Marca Credito Cooperativo was
June 2009, when the bank's ST deposit rating was put under
review for possible downgrade. Banca della Marca Credito Cooperativo
is headquartered in Orsago, Italy. At 31 December 2008 it
had total assets of EUR 2 billion.
The previous rating action on Banca delle Marche was in June 2009,
when the bank's BFSR and LT/ST deposit ratings were put under review
for possible downgrade. Banca delle Marche is headquartered in
Jesi, Italy. At 31 December 2008 it had total assets of EUR
19 billion.
The previous rating action on Banca Infrastrutture Innovazione e Sviluppo
was in June 2009, when the bank's BFSR and LT deposit ratings
were put under review for possible downgrade. Banca Infrastrutture
Innovazione e Sviluppo is headquartered in Rome, Italy. At
31 December 2008 it had total assets of EUR 45 billion.
The previous rating action on Banca Monastier e del Sile was in June 2009,
when the bank's ST deposit ratings was put under review for possible
downgrade. Banca Monastier e del Sile is headquartered in Monastier
di Treviso, Italy. At 31 December 2008 it had total assets
of EUR 1 billion.
The previous rating action on Banca Monte dei Paschi di Siena was in June
2009, when the bank's BFSR and LT deposit ratings were put
under review for possible downgrade. Banca Monte dei Paschi di
Siena is headquartered in Siena, Italy. At 31 December 2008
it had total assets of EUR 214 billion.
The previous rating action on Banca Nazionale del Lavoro was in June 2009,
when the bank's BFSR and LT deposit ratings were put under review
for possible downgrade. Banca Nazionale del Lavoro is headquartered
in Rome, Italy. At 31 December 2008 it had total assets of
EUR 90 billion.
The previous rating action on Banca Popolare dell'Alto Adige --
Suedtiroler Volksbank was in June 2009, when the bank's BFSR
and LT deposit ratings were put under review for possible downgrade.
Banca Popolare dell'Alto Adige is headquartered in Bolzano,
Italy. At 31 December 2008 it had total assets of EUR 5 billion.
The previous rating action on Banca Popolare di Milano was in June 2009,
when the bank's BFSR and LT deposit ratings were put under review
for possible downgrade. Banca Popolare di Milano is headquartered
in Milan, Italy. At 31 December 2008 it had total assets
of EUR 45 billion.
The previous rating action on Banca Popolare di Spoleto was in June 2009,
when the bank's ST deposit rating was put under review for possible
downgrade. Banca Popolare di Spoleto is headquartered in Spoleto,
Italy. At 31 December 2008 it had total assets of EUR 3 billion.
The previous rating action on Banca Sella Holding was in June 2009,
when the bank's BFSR and LT/ST deposit ratings were put under review
for possible downgrade. Banca Sella Holding is headquartered in
Biella, Italy. At 31 December 2008 it had total assets of
EUR 14 billion.
The previous rating action on Banca Tercas was in June 2009, when
the bank's ST deposit rating was put under review for possible downgrade.
Banca Tercas is headquartered in Teramo, Italy. At 31 December
2008 it had total assets of EUR 4 billion.
The previous rating action on Bancaperta was in June 2009, when
the bank's BFSR and LT deposit ratings were put under review for
possible upgrade. Bancaperta is headquartered in Sondrio,
Italy. At 31 December 2008 it had total assets of EUR 5 billion.
The previous rating action on BancApulia was in June 2009, when
the bank's BFSR was put under review for possible downgrade.
BancApulia is headquartered in San Severo, Italy. At 31 December
2008 it had total assets of EUR 4 billion.
The previous rating action on Banco Popolare Societa Cooperativa was in
June 2009, when the bank's BFSR and LT/ST deposit ratings
were put under review for possible downgrade. Banco Popolare Societa
Cooperativa is headquartered in Verona, Italy. At 31 December
2008 it had total assets of EUR 121 billion.
The previous rating action on Cassa di Risparmio della Provincia di Chieti
was in June 2009, when the bank's BFSR and LT deposit ratings
were put under review for possible downgade. Cassa di Risparmio
della Provincia di Chieti is headquartered in Chieti, Italy.
At 31 December 2008 it had total assets of EUR 3 billion.
The previous rating action on Credito Valtellinese was in June 2009,
when the bank's BFSR and LT deposit ratings were put under review
for possible upgrade. Credito Valtellinese is headquartered in
Sondrio, Italy. At 31 December 2008 it had total assets of
EUR 24 billion.
The previous rating action on Efibanca was in March 2009, when the
bank's ratings were put under review for possible downgrade.
Efibanca is headquartered in Rome, Italy. At 31 December
2008 it had total assets of EUR 6 billion.
The previous rating action on Mediocredito Trentino-Alto Adige
was in June 2009, when the bank's BFSR and LT/ST deposit ratings
were put under review for possible downgrade. Mediocredito Trentino-Alto
Adige is headquartered in Trento, Italy. At 31 December 2008
it had total assets of EUR 2 billion.
The previous rating action on MPS Capital Services was in June 2009,
when the bank's BFSR and LT deposit ratings were put under review
for possible downgrade. MPS Capital Services is headquartered in
Florence, Italy. At 31 December 2008 it had total assets
of EUR 35 billion.
The previous rating action on Unibanca was in June 2009, when the
bank's BFSR and LT/ST deposit ratings were put under review for
possible downgrade. Unibanca is headquartered in Cesena,
Italy. At 31 December 2008 it had total assets of EUR 5 billion.
The previous rating action on Unione di Banche Italiane was in June 2009,
when the bank's BFSR was put under review for possible downgrade.
Unione di Banche Italiane is headquartered in Bergamo, Italy.
At 31 December 2008 it had total assets of EUR 122 billion.
Milan
Henry MacNevin
Senior Vice President
Financial Institutions Group
Moody's Investors Service
Telephone:+39-02-9148-1100
Milan
Carlo Gori
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service
Telephone:+39-02-9148-1100
Moody's concludes reviews on 22 Italian banks with moderate rating impact
