...Diversified and Stable Business Model: Credito Emiliano S.p.A.'s (Credem) ratings reflect its diversified (albeit geographically concentrated in Italy) and stable business model, which has resulted in more resilient profitability and healthier asset quality than its Italian peers. Stable Profitability, Diversified Revenue: The fees and commissions generated by Credem's wealth management and insurance activities have helped stabilise the bank's profitability in the low-interest environment. Modest Cost-Efficiency: The bank's cost base is high because of continued investments in IT systems, controls and compliance structures, while loan impairment charges (LICs) are low and stable as a result of strong underwriting standards and a strategy of targeting lower-risk customers. Satisfactory Capital Buffers: Credem's capitalisation is maintained satisfactory and includes a 626bp buffers over regulatory minimums. Unreserved impaired loans weigh moderately on capitalisation; in 1Q18 their encumbrance...
