Moody’s cuts the ratings of 26 Italian banks
CREDIT rating agency Moody’s last night downgraded its long-term debt and deposit ratings on 26 Italian financial institutions, blaming the country’s return to recession and limited funding opportunities.
Unicredit and Intesa Sanpaolo, which together account for almost a third of Italy’s banking market by assets, were among those hit by the downgrades, three months after Moody’s put more than 100 banks across the Eurozone on negative review due to their exposure to the region’s economic crisis.
“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 in a statement.
The downgrades are expected to herald the start of a fresh round of rating reassessments, with Spain’s struggling financial institutions seen as the most likely candidates to be hit next.
Unicredit’s standalone credit rating was lowered by one notch to A3, while Intesa Sanpaolo’s was downgraded from A3 to A2.
Moody’s said that in most cases, the downgrades were not based on changes to its assumptions about support available from third-parties, including the Italian government.