...Prudently Managed Dom estic Bank: Credito Emiliano S.p.A's (Credem) ratings reflect its more stringent risk appetite than that of domestic peers and prudent management stance as a second-tier Italian bank. The ratings also reflect a diversified and stable business model, w hich provides it w ith some earnings stability. Better Asset Quality than Peers ': Credem's gross impaired loans ratio of about 4.4% at end- June 2019 is w ell below the domestic average of about 9% at end-March 2019. This reflects the bank's strategy of targeting low er-risk clients, robust underw riting standards through the cycle and highly granular loan portfolio. We expect asset quality to marginally improve over the next few quarters due to a continued focus on recoveries and disposals of small portfolios. Adequate Capitalisation: Credem's Fitch Core Capital (FCC) ratio of 14.9% at end-June 2019 is adequate. FCC encumbrance by unreserved impaired loans of around 23% is one of the low est among domestic banks rated...
