...IDRs Reflect Standalone Profile: Banca Popolare dell'Emilia Romagna's (BPER) IDRs are aligned to its Viability Rating (VR). The ratings reflect the bank's weak asset quality and its capital being exposed to a material stock of unreserved impaired loans. The ratings also reflect BPER's recovered profitability and its adequate funding and liquidity. Weak Asset Quality: BPER's asset quality is weak, partly as a result of its past acquisitions, mainly consisting of weak banks, and Fitch still sees it as the main risk factor for BPER's VR. The impaired loans ratio also continued to grow due to loan book deleveraging and surged to above 22% at end-3Q15. Loan loss reserves remain only just acceptable at less than 50%. However, the formation of new impaired loans is slowing. High Capital at Risk: BPER's capital strenghtend in 2014-3Q15, reflecting the successfull completion of new share issues and the return to internal capital generation. However, its capital remains vulnerable as the share of...
