...Negative Outlooks Dominant: The large number of Negative rating Outlooks is the result of the diminishing probability of support from the authorities (see Outlook Sensitivities below) together with the weakening of individual bank credit profiles, measured by their Viability Rating (VR). Continued asset quality deterioration and structurally weak profitability in banks' commercial businesses are major drivers of the Negative Outlooks on standalone-driven Long- Term IDRs. Downside Sector Risk Reduced: The sector outlook remains negative, but Fitch Ratings believes that further material downside risk is contained for 2015, after significant deterioration experienced since 2011. It is however possible for sector fundamentals, asset quality in particular, to continue to decline somewhat until the economy recovers. Unsupportive Economy/Stagnant Lending: We forecast Italy's GDP to expand only modestly in 2015 (0.6%). Hence the domestic economy is unlikely to support transaction volumes and banks'...
