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Moody's places Italy's UBI and Cariparma on review for downgrade
September 20, 2013 / 6:01 PM / 4 years ago

Moody's places Italy's UBI and Cariparma on review for downgrade

MILAN, Sept 20 (Reuters) - Moody’s has placed mid-sized Italian lenders UBI Banca and Cariparma on review for a ratings downgrade, citing weakening profitability and deteriorating asset quality.

The ratings agency, which has a long-term rating of “Baa2” for both, said an ongoing recession in Italy will keep the two banks under pressure throughout 2013 and into 2014.

Moody’s will assess UBI’s strategy to strengthen profitability and stabilise asset quality, as well as its plans to repay 12 billion euros ($16 billion) due under ECB’s Long-Term Refinancing Operation (LTRO), it said.

Moody’s added it might confirm UBI’s ratings if its problem loan levels stabilise and its net income strengthens.

On Cariparma, which is controlled by French lender Credit Agricole, the ratings agency said it would also consider “parental and systemic support”. ($1 = 0.7402 euros) (Reporting by Danilo Masoni; editing by David Evans)

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