UPDATE 1-Moody's downgrades Banca Carige, outlook negative
MILAN Dec 11 (Reuters) - Credit rating agency Moody's downgraded Italy's Banca Carige on Wednesday citing falling profitability at the bank and increased uncertainty over its plan to boost its capital base.
Moody's said a statement it had reduced the mid-sized bank's long-term rating to B3 from B2, with a negative outlook.
At the same time, the bank's standalone Baseline Credit Assessment (BCA) was lowered to caa2 from b3.
"The key driver of today's rating action has been Banca Carige's continued deterioration of asset quality and profitability, which now compares more weakly than the average of the Italian banking system," the rating agency said.
The bank is one of a group of mid-sized Italian lenders that have come under the spotlight in Italy as a protracted economic crisis in Italy boosted their share of bad loans.
The Genoa-based lender, with a market capitalisation of about 981 million euros, said last month its 9-month net loss rose to 1.3 billion euros, including hefty goodwill writedowns it booked in the third quarter of this year.
It also reported that non-performing loans (NPL) had increased by 865 million euros in the third quarter after the reclassification of about 600 million euros of loans following an inspection by the Bank of Italy.
Moody's said the bank was also facing growing challenges to strengthen its capital as planned sales of non-core assets were lagging.
Banca Carige, one of the 15 Italian banks subject to an asset quality review by the European Central Bank, pledged in February to raise 800 million euros ($1.1 billion) through asset sales but it has so far raised just 100 million euros.
"Any deviation from the planned capital strengthening, or further material deterioration in Banca Carige's asset quality and profitability, would exert downward pressures on all of the bank's ratings," Moody's said. ($1 = 0.7251 euros) (Reporting by Francesca Landini. Editing by Jane Merriman)
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