Moody’s cut ratings for 26 Italian banks

Moody’s has slashed its credit ratings by up to four notches for 26 Italian banks, including UniCredit and Intesa Sanpaolo, citing their vulnerability to Italy’s recession and more trouble in the eurozone.

'The ratings for Italian  banks are now amongst the lowest within advanced European countries, reflecting these banks’ susceptibility to the adverse operating environments in Italy and Europe,’ Moody’s said on Monday. 'Banks are vulnerable to the renewed recession in Italy, given their already elevated levels of problem loans and weakened profitability. These risks are exacerbated by investor concerns over the sustainability of the Italian government’s debt burden, which has contributed to the difficult wholesale funding conditions faced by Italian banks.’

The banks included Uni-Credit, cut to A3 from A2, and Intesa Sanpaolo, also to A3 from A2. The two account for nearly one-third of the Italian market by assets.

Banco Monte dei Paschi, the third largest, went down two levels to Baa3; Banco Popolare Societa Cooperativa, the fourth largest, fell to Baa3 from Baa2; and Unione di Banche Italiane, the fifth-largest bank, was cut two levels to Baa2 from A3. Ten banks saw their ratings newly cut from investment grade to junk grade, including two that received four-notch reductions: Banco Popolare di Cividale and Banco Popolare di Spoleto, both cut from Baa1 to Ba2.
Next Story
Share it