...Support-Driven IDRs: Banca Cariges IDRs are based on the moderate probability of support available from the Italian authorities as reflected in its ,,BB Support Rating Floor (SRF). The Viability Rating (VR) reflects the banks high level of impaired loans, weak capitalisation, reported losses and remaining corporate governance issues despite recent improvements. Weak Capitalisation Despite Increase: Following the completion of a EUR800m capital increase in July 2014, capitalisation remains weak with a Fitch core capital (FCC) ratio below 8% and unreserved impaired loans still accounting for over 180% of FCC. The banks inability to generate meaningful returns further penalises capitalisation. In Fitchs opinion a turnaround in profitability is necessary for the bank to maintain adequate capital. High Recent Losses: Carige has reported operating losses since 2012 of over EUR1.5bn, mostly driven by high loan impairment charges (LICs), the poor performance of its commercial activities, and the...
