Upgrades Capitalia to Aa2 and will withdraw ratings; Capitalia's former subsidiaries' ratings also affected
London, 02 October 2007 -- Moody's Investors Service today carried out various rating actions
following the completion of the merger between the UniCredito Italiano
("UniCredito") and Capitalia banking groups. Moody's
confirmed the Aa2 long-term deposit and debt ratings, and
the B- bank financial strength rating ("BFSR") of UniCredito.
It also upgraded the long-term deposit and debt ratings and BFSR
of Capitalia to Aa2/B- from A1/C-. Capitalia's
ratings will be withdrawn.
As regards Capitalia's rated subsidiaries, Moody's upgraded
the long-term deposit and debt ratings of Banca di Roma ("BdR")
and Bipop Carire ("Bipop") to Aa3 from A1, confirmed
the A1 long-term deposit and debt ratings of Banco di Sicilia ("BdS")
and will withdraw them, while the A2 debt and deposit ratings of
MCC remain on review for possible upgrade. The Aa3 long-term
deposit rating of Locat, UniCredito's leasing subsidiary,
whose ratings reflect support from its parent, was also confirmed.
The deposit and debt ratings of numerous other subsidiaries of the UniCredito
group in Germany, Austria and across Central and Eastern Europe
benefit from the expectation of support from UniCredito, and these
are unaffected by this rating action.
These rating actions conclude the reviews initiated in May 2007 --
for possible downgrade in the case of UniCredito and Locat and for possible
upgrade in the case of Capitalia, BdR, BdS and Bipop --
following the announcement of the proposed integration between the two
banking groups. The outlook on all the ratings of UniCredito and
Locat is now stable. The outlook on the long-term debt and
deposit ratings and BFSRs of BdR, BdS and Bipop was changed to positive
from stable.
Moody's said that its decision to confirm the ratings of UniCredito
reflects: (i) the fact that the acquisition of Capitalia significantly
strengthens UniCredito's position in the Italian domestic banking
market, and offers considerable potential synergies, (ii)
UniCredito's strong track record in implementing acquisitions,
including that of HVB, in recent years, (iii) the equity-funded
nature of the transaction, which preserves the group's capital
ratios, (iv) the limited impact on financial fundamentals,
including profitability and efficiency, also due to Capitalia's
limited size relative to UniCredito and (v) the good progress made in
integrating HVB since its acquisition in 2005, which ensures that
management will have capacity to focus on integrating Capitalia.
However, the rating agency also noted that UniCredito's asset
quality and capital adequacy indicators are somewhat weaker than those
of similarly rated peers, and commented that the confirmation of
the ratings reflects the expectation that these indicators will see improvement
in the coming 12 to 18 months.
Capitalia's ratings are upgraded to the same level as UniCredito's
and will be withdrawn as a result of its incorporation into UniCredito
immediately upon consummation of the acquisition.
The upgrade of the long-term debt and deposit ratings of BdR and
Bipop (the latter to be merged into UniCredit Banca) and the confirmation
of BdS's long-term debt and deposit ratings are supported
(i) by the anticipation of these banks' strategic positioning as
the only retail banking arms of the UniCredito group in their respective
geographical areas following the group's divisional model,
and (ii) by Moody's expectation of very high dependence and probability
of parental support. Consequently, these ratings benefit
from a three-notch uplift, to Aa3 from their A3 Baseline
Credit Assessment (BCA) for BdR and Bipop and to A1 from a BCA of Baa1
for BdS. Moody's added that there are no rated BdS bonds
outstanding and all of BdS's ratings are withdrawn for business
reasons, while Bipop's ratings will be withdrawn upon its
incorporation into UniCredit Banca, which is planned sometime before
the end of 2008. Please refer to Moody's Withdrawal Policy
on moodys.com.
The positive outlook on these three banks' BFSRs and their long-term
deposit and debt ratings is underpinned by Moody's expectation of
high levels of integration -- with key functions centralised at the
holding level, as well as of improvements in these banks'
standalone financial profiles following their new retail-only focus,
the adoption of the new group's policies and procedures, and
the benefits of potential synergies -- an expectation which is supported
by UniCredito's strong track record in integrating acquisitions.
Under UniCredito's business plan, MCC will become the group's
reference company for public sector lending -- a sector in which,
Moody's noted, the UniCredito group has not traditionally
been particularly active. The ongoing review for possible upgrade
of MCC's ratings will therefore consider how strategic this activity
-- and therefore MCC -- will be in the enlarged group.
The expectation of high integration within its new group and improvements
in its financial profile deriving both from its new focus on a generally
low-risk business as well as from the implementation of UniCredito's
policies and procedures and the benefits of potential synergies underpin
the positive outlook on the bank's BFSR.
The following ratings were confirmed with a stable outlook:
UniCredito Italiano SpA: long-term debt and deposits at Aa2;
subordinated debt at Aa3; junior subordinated debt at Aa3,
Tier 3 debt at Aa3; bank financial strength at B-
UniCredito Italiano Capital Trust I: preferred stock at A1
UniCredito Italiano Capital Trust II: preferred stock at A1
UniCredito Italiano Capital Trust III: preferred stock at A1
UniCredito Italiano Capital Trust IV: preferred stock at A1
UniCredito Italiano Bank (Ireland) plc: backed long-term
senior debt at Aa2
UniCredito Italiano SpA (Paris Branch): long-term deposits
at Aa2
UniCredito Italiano SpA (New York Branch): long-term deposits
at Aa2
UniCredit Luxembourg Finance SA: backed long-term senior
debt at Aa2; backed subordinated debt at Aa3; backed Tier III
debt at Aa3
Locat SpA: long-term issuer rating at Aa3
The following ratings were upgraded and will be withdrawn:
Capitalia: long-term deposit and debt ratings to Aa2 from
A1, BFSR to B- from C-, subordinated to Aa3
from A2, junior subordinated to Aa3 from A2, Tier 3 at Aa3
from A2
The following ratings were upgraded:
Banca di Roma SpA: long-term debt and deposits to Aa3 from
A1
Bipop-Carire SpA: long-term debt and deposits at Aa3
from A1
The following ratings remains on review for possible upgrade:
MCC SpA: long-term debt and deposits at A2
Zivnostenska Banka: financial strength rating at D
The outlook on the following ratings was changed to positive from stable:
Banca di Roma SpA: long-term debt deposits at Aa3,
BFSR at C
Bipop-Carire SpA: long-term debt and deposits at Aa3,
BFSR at C
MCC: BFSR at C
The outlook on the following ratings was changed to positive from stable
and will be withdrawn:
Banco di Sicilia SpA: long-term debt and deposits at A1,
BFSR at C-
The following ratings were confirmed and will be withdrawn:
Banco di Sicilia SpA: long-term debt and deposits at A1
The following ratings were affirmed:
Bank Austria Creditanstalt: long-term debt and deposits at
Aa2; bank financial strength at C+
Bayerische Hypo- und Vereinsbank: long-term debt and
deposits at A1; bank financial strength at C-
Zagrebacka Banka: long-term deposits at A2; financial
strength rating at D+
Zivnostenska Banka: long-term deposits at A2;
Bank Polska Kasa Opieki SA: long-term deposits at Aa3;
financial strength rating at C
Yapi ve Kredi Bankasi AS: long-term deposits at A3;
financial strength rating at D+
Headquartered in Milan, Italy, UniCredito Italiano had total
assets of EUR823 billion as at 31 December 2006.
Headquartered in Rome, Italy, Capitalia had total assets of
EUR137 billion as at 31 December 2006.
Milan
Henry MacNevin
General Manager
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
London
Antonio Carballo
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's confirms UniCredito Italiano's Aa2/B- ratings; Stable outlook