...Weak Capital, Profitability, Asset Quality: Banca Popolare di Vicenza's (BPV) ratings reflect its very weak credit profile, burdened by high unreserved impaired loans in relation to capital, high reported losses and weak asset quality. The ratings also reflect heightened reputational and litigation risks following recent regulatory issues. Capital Under Pressure: BPV's capitalisation weakened after large losses in 1H15 and the prudential filters applied by the regulator in relation to the capital raised by the bank in 2013 and 2014. BPV reported a common equity Tier 1 (CET1) ratio of 6.8% at end-1H15, which is weak by national and international standards. The bank has announced a capital plan that includes a EUR1.5bn capital increase to be completed in 2Q16 and the disposal of non-core assets, with the aim of bringing the CET1 ratio above 12%. Weak Asset Quality: Impaired loans surged to EUR7.5bn at end-1H15, accounting for a high 25% of gross loans, following regulatory inspections and...
