...Support Drives Ratings: Banca Nazionale del Lavoro S.P.A.'s (BNL) Issuer Default Ratings (IDRs) and Support Rating (SR) reflect institutional support from its parent, BNP Paribas S.A. (BNPP, A+/Stable), as Fitch Ratings views BNL as core to BNPP's strategy because Italy is its largest market after France. One-Notch Cap Above Sovereign: BNL's IDRs are capped at one notch above Italy's sovereign rating to reflect Fitch's view that BNL's ability to service its obligations is vulnerable to restrictions if Italy's operating environment materially worsens. The weak operating environment in Italy could negatively affect the parent group's financial profile and ultimately reduce its ability to support BNL. Progress in Reducing Impaired Loans: BNL's asset quality is gradually improving but its impaired loans ratio of 16.5% at end-2017 remains high by international standards. The bank's reduced risk appetite resulted in lower inflows of new impaired loans from 2016, and in 2017 it adopted a more...
