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Announcement:

Moody's reviews Cassa Centrale Banca, Cassa Centrale Raiffeisen and Banca Padovana for downgrade

Global Credit Research - 03 Apr 2012

Milan, April 03, 2012 -- Moody's Investors Service has today placed on review for downgrade the standalone C/a3 bank financial strength rating (BFSR) of Cassa Centrale Banca-Credito Coop del Nord Est (Cassa Centrale Banca), and the C- /baa1 BFSR of Cassa Centrale Raiffeisen dell'Alto Adige (Cassa Centrale Raiffeisen).

At the same time the A3/Prime-2 long and short-term ratings of Cassa Centrale Banca and Cassa Centrale Raiffeisen and the Ba1 long-term deposit ratings of Banca Padovana were also placed on review for downgrade. Banca Padovana's standalone D-/ba3 BFSR with a negative outlook, is unaffected by these rating announcements.

Cassa Centrale Banca and Cassa Centrale Raiffeisen are two of the three central institutions of the Italian co-operative credit banks (or Banche di Credito Cooperativo -- BCCs). Cassa Centrale Banca and Cassa Centrale Raiffeisen are located in Northern Italy, in Trento and Bolzano and operate mainly with the BCCs based in their province. Banca Padovana is a BCC.

Moody's expects to conclude its review during the week of April 16, together with the other Italian banks currently on review for downgrade (see "Moody's reviews Ratings for European Banks" http://www.moodys.com/research/Moodys-Reviews-Ratings-for-European-Banks--PR_237914).

RATINGS RATIONALE

Moody's says that the review for downgrade of the standalone ratings of Cassa Centrale Banca and Cassa Centrale Raiffeisen primarily reflects their high levels of loan concentration (in comparison to their profitability and capital levels) as well as the pressure from the challenging operating environment which Moody's expects will impact their profitability, asset quality and funding. These rating drivers are against the backdrop that the Italian banking system as a whole faces pressures from (1) a deteriorating macroeconomic environment; (2) deteriorating asset quality; (3) more restricted and more expensive wholesale funding; (4) pressure on profits.

The review of the long and short-term ratings of Cassa Centrale Banca and Cassa Centrale Raiffeisen directly follows the review of these banks' standalone ratings. The review of the long and short-term ratings of Cassa Centrale Raiffeisen also incorporates pressure from the challenging operating environment on its support provider, the Italian BCCs, and their weaker credit quality. A weakening of the co-operative group is likely to result in a reduction of the uplift provided to the bank's long and short-term ratings. The long and short-term ratings of Cassa Centrale Banca do not incorporate ratings uplift from the support provided by the Italian BCCs.

The review of Banca Padovana's long-term rating reflects the pressure from the challenging operating environment on its support provider, the group of Italian BCCs. A weakening of the co-operative group is likely to result in a reduction of the uplift provided to the bank's long-term rating to one from two notches.

WHAT COULD MOVE THE RATINGS UP

Upward pressure on both Cassa Centrale Banca's and Cassa Centrale Raiffeisen's standalone ratings could result from a strengthening of profitability and efficiency as well as a reduction of loan concentrations. However, Moody's believes that positive momentum for these indicators is unlikely at present, for both banks. A one-notch upgrade of the banks' BFSRs could trigger an upgrade of their long-term bank deposit ratings.

A stable outlook on the BFSR of Banca Padovana could come from (i) a sustainable return to profitability; (ii) a decrease in borrower and sector concentration levels, with the top 20 borrowers representing less than 750% of pre-provision income; and (iii) reinforced risk-management practices. Given the review for downgrade, there is currently limited upwards pressure on the deposit ratings.

WHAT COULD MOVE THE RATINGS DOWN

Deteriorating asset quality primarily could exert downward pressure on Cassa Centrale Banca's BFSR. A downgrade of the BFSR, or worsening performance of the BCC group, would result in a subsequent downgrade of the bank's deposit ratings.

Deteriorating asset quality and capitalisation could exert downward pressure on Cassa Centrale Raiffeisen's BFSR. A downgrade of Cassa Centrale Raiffeisen's deposit ratings could result from a one-notch remapping of the bank's C- BFSR to a baa2 standalone credit strength (from baa1), or from any worsening in the performance of the Italian BCC network.

Downward pressure on Banca Padovana's BFSR could result from (i) failure to improve financials, particularly capitalisation and profitability; and/or (iii) pressure on liquidity, stemming from a decrease in retail confidence. The deposit rating could be downgraded if (i) BCC's credit profile weakens; (ii) support from the BCC group lessens; or (iii) Banca Padovana's BFSR is downgraded.

RATINGS AFFECTED

The following ratings of Cassa Centrale Banca were affected:

- C BFSR on review for downgrade;

- A3/P-2 long- and short-term ratings on review for downgrade;

The following ratings of Cassa Centrale Raiffeisen were affected:

- C- BFSR on review for downgrade;

- A3/P-2 long- and short-term ratings on review for downgrade;

The following ratings of Banca Padovana were affected:

- Ba1 long-term ratings on review for downgrade;

PRINCIPAL METHODOLOGIES

The methodologies used in these ratings are Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Cassa Centrale Banca is headquarted in Trento, Italy. At December 2010, it had total assets of EUR2.6 billion.

Cassa Centrale Raiffeisen is headquarted in Bolzano, Italy. At December 2010, it had total assets of EUR2.0 billion.

Banca Padovana is headquarted in Campodarsego (Padova), Italy. At December 2010, it had total assets of EUR2.3 billion.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these reviews.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Carlo Gori
Vice President - Senior Analyst
Financial Institutions Group
Moody's Italia S.r.l
Corso di Porta Romana 68
Milan 20122
Italy
Telephone:+39-02-9148-1100

Johannes Wassenberg
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Italia S.r.l
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Italy
Telephone:+39-02-9148-1100

Moody's reviews Cassa Centrale Banca, Cassa Centrale Raiffeisen and Banca Padovana for downgrade
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