Weekly Credit Outlook - 21 November 2011
55 pages (22857 words) —
Published Nov 21, 2011
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...reported a third-quarter net loss of 10.6 billion, mainly tied to 10.2 billion of goodwill writedowns from past acquisitions and certain other assets. The acquisitions include those in Kazakhstan and Ukraine, certain brand names of its Italian and German operations, and other items. Additionally, the bank reported that quarterly operating profit declined to 1.85 billion from 2.5 billion in the previous quarter, principally reflecting trading losses. This operating profit was entirely absorbed by higher loan loss charges of 1.8 billion for the quarter. As a consequence of these credit negative results, on 16 November 2011, we placed the ratings of UniCredit and its main subsidiaries on review for downgrade. In October, we downgraded UniCredit's ratings to A2; C-/Baa1 from Aa3; C/A3 primarily reflecting our concerns about the profitability of its domestic franchise. In our view, this decline in profitability may be a consequence of Unicredit's rapid expansion over the past 10 years, particularly...
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Weekly Credit Outlook
Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.