... medium-sized banks represent 8% of the Italian banking system's assets. Outlooks are mostly Stable, reflecting the prospects for these banks' standalone viability and the improving operating environment in Italy after years of economic recession. In 2015, Fitch affirmed most ratings and revised some Outlooks to Stable from Negative; we downgraded the ratings of two banks on sovereign support revision and placed one bank on Rating Watch Negative (RWN). Recession Ended; Recovery Weak: In 1Q15 Italy's GDP grew by 0.3% versus 4Q14 and by 0.1% yoy. Fitch forecasts 0.6% GDP growth in 2015 and 1.0% in 2016. Notwithstanding recent positive macroeconomic data, the recovery of the Italian economy will be weaker than in most large eurozone members. Traditional Business Models: Italian medium-sized banks are all regional, most of them cooperatives, with business tilted towards SMEs and households. This exposes them to domestic and local macroeconomic...
