RPT-Fitch Revises Intesa Sanpaolo Vita's Outlook To Stable; Affirms IDR at 'BBB+'

Fri May 16, 2014 7:24am EDT

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May 16 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has revised Intesa Sanpaolo Vita's (ISV) Outlook to Stable from Negative. At the same time, Fitch has affirmed ISV's Long-term Issuer Default Rating (IDR) at 'BBB+'. Fitch has also affirmed ISV's subordinated notes at 'BBB'.

KEY RATING DRIVERS

The rating action follows Fitch's recent revision of the Rating Outlook of Intesa Sanpaolo (ISP) (see "Fitch Affirms Five Large Italian Banks", dated 13 May 2014), ISV's ultimate parent.

The rating action also follows Fitch's recent revision of the Rating Outlook of Italy (see "Fitch Revises Italy's Outlook to Stable, Affirms at 'BBB+' ", dated 25 April 2014).

Fitch continues to view ISP's ownership of ISV as positive for the latter's ratings. ISV is part of ISP's wealth management offer and distributes its insurance products through the bank's branches. Its risk management is also highly integrated within ISP which manages capital at the group level. Fitch views ISV as an important contributor to ISP's financial performance and believes support would be forthcoming if needed.

ISV reported EUR570m of pre-tax income in 2013 (2012: EUR516m) out of a consolidated ISP group pre-tax loss of EUR4,816m (EUR2,967m profit). Operating income generated by the insurance business in 2013 was around EUR800m, equal to 5% of ISP's total (2012: 4.5%).

ISV's group solvency ratio (Solvency I ratio) was 189.6% at end-2013 (189.1% at end-2012). Fitch considers that ISV's capital and profitability are commensurate with the current ratings.

RATING SENSITIVITIES

ISV's rating could be downgraded if the ratings of ISP are downgraded. Conversely, the rating could be upgraded if the bank's ratings are upgraded, and if ISV continues to make a positive contribution to ISP's financial performance.

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