Fitch Ratings (Fitch) has affirmed Credito Emiliano S.p.A.'s (Credem) Long-Term Issuer Default Rating (IDR) at ‘BBB’ and Viability Rating (VR) at ‘bbb’ (on 31.05.2019). The Outlook is ‘Negative’, in line with Italy’s sovereign rating.
Fitch pointed out that, although Credem's activities are mainly domestic, its business model has enabled the Group to achieve a more resilient level of profitability and a better asset quality compared to other Italian banks.
Credem's profitability was in fact mainly supported by:
- strong diversification of revenues thanks to the greater focus on wealth management and insurance businesses;
- funding costs and gross impaired loans ratio being well below the domestic average.
At the same time, after placing 31 Short-Term Issuer Default Ratings of EMEA-based banks “Under Criteria Observation” following the publication of its cross-sector criteria for Short-Term Ratings on 2 May 2019, Fitch has downgraded the Group’s ST debt level ratings to ‘F3’ from ‘F2’. It follows, then, that the downgrade is simply a consequence of the Agency’s new ST rating criteria.
The rating actions are as follows:
- Long-Term IDR: affirmed at 'BBB'; Outlook Negative
- Short-Term IDR: downgraded to 'F3' from 'F2'
- Viability Rating: affirmed at 'bbb'
- Support Rating: affirmed at '5'
- Support Rating Floor: affirmed at 'No Floor'
- Long-Term Deposit Rating: affirmed at 'BBB'
- Derivative Counterparty Rating: affirmed at 'BBB(dcr)'
- Subordinated debt: affirmed at 'BBB-'
See the complete report at www.credem.it