SP Downgrades 15 Italian Financial Institutions

Standard & Poor’s Ratings Services today said it has taken rating actions on 32 Italian financial institutions.

These include affirming our counterparty credit ratings on 15 entities, lowering our ratings on 15, removing the ratings on four from CreditWatch negative, and revising the outlook on one.

The rating actions reflect our view of increased credit risk for the Italian economy and its banks. They follow our revision of our economic risk score for Italy, one of the main components of our Banking Industry Country Risk Assessment (BICRA), to ‘5’ from ‘4’. We have maintained our BICRA for Italy at group ‘4’ and our industry risk score at ‘4’ (see “BICRA On Italy Maintained At Group ‘4’, Economic Risk Score Revised To ‘5’ On Increased Credit Risk For Italian Banks,” published Aug. 3, 2012, on RatingsDirect on the Global Credit Portal).

With Italy facing a potentially deeper and more prolonged recession than we had originally anticipated, we think Italian banks’ vulnerability to credit risk in the economy is rising. In this context, the combined effect of mounting problem assets and reduced coverage of loan loss reserves makes banks more vulnerable to the impact of higher credit losses particularly in the event of deterioration in the collateral values of assets.

In our opinion, a more severe recession will likely push up the stock of Italian banks’ problem assets in 2012 and 2013 to levels higher than we previously expected and high relative to the stocks in other banking systems in Europe. At the same time, the banks’ coverage of problem assets through provisioning, which was already low by international standards because of the banks’ extensive use of tangible collateral in their assessment of provisioning needs, has fallen further over the past few years.

We will publish individual research updates on the banks identified below, including a list of ratings on affiliated entities, as well as the ratings by debt type senior, subordinated, junior subordinated, and preferred stock.

See the list below for the rating actions on the financial institutions and their relevant subsidiaries.

Ratings Affirmed

Banca Fideuram BBB+/Negative/A-2

Banca Mediocredito del Friuli-Venezia Giulia SpA
BBB/Negative/A-3

Banco Popolare Societa Cooperativa SCRL
Credito Bergamasco BBB-/Negative/A-3
Banca Aletti & C. SpA

Credito Emiliano SpA BBB/Negative/A-2

Intesa Sanpaolo SpA BBB+/Negative/A-2
Banca IMI SpA

Istituto Centrale delle Banche Popolari Italiane SpA
CartaSi SpA BBB-/Negative/A-3

Istituto per il Credito Sportivo BBB+/Negative/A-2

Mediobanca SpA BBB+/Negative/A-2

MedioCredito Centrale SpA BBB-/Negative/A-3

UniCredit SpA BBB+/Negative/A-2
UniCredit Leasing SpA

Downgraded
To From

Banca Carige SpA
BB+/Negative/B BBB-/Negative/A-3

Banca di Credito Cooperativo di Conversano S.c.r.l
BB+/Negative/B BBB-/Negative/A-3

Banca Popolare dell’Alto Adige
BBB-/Negative/A-3 BBB/Negative/A-2

Banca Popolare dell’Emilia Romagna S.C.
BB+/Negative/B BBB/Negative/A-2

Banca Popolare di Vicenza ScpA
BB+/Negative/B BBB-/Negative/A-3

Dexia Crediop SpA
B+/Negative/B BB-/Negative/B

Eurofidi Scpa
BB+/Negative/B BBB-/Negative/A-3

Iccrea Holding SpA
Iccrea Banca SpA
Iccrea BancaImpresa SpA
BBB-/Negative/A-3 BBB/Negative/A-2

Unione di Banche Italiane Scpa
BBB/Negative/A-2 BBB+/Negative/A-2

Downgraded; CreditWatch Action

Agos-Ducato SpA BBB-/Negative/A-3 BBB/Watch Neg/A-2

Banca Monte dei Paschi di Siena SpA
BBB-/Negative/A-3 BBB/Watch Neg/A-2

Banca Popolare di Milano SCRL
Banca Akros SpA
BB+/Negative/B BBB-/Watch Neg/A-3

Outlook Action

FGA Capital SpA BBB-/Negative/A-3 BBB-/Stable/A-3

CreditWatch Action; Ratings Withdrawn

Withdrawn To From
Cassa di Risparmio della Provincia di Teramo SpA
N.R. B/Negative/B B/Watch Neg/B

NB. This list does not include all ratings affected.

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