Ratings On Italian Banks Lowered On Rising Economic Risk And Sovereign Downgrade

On Dec. 5, 2014, Standard&Poor's lowered its long- and short-term unsolicited sovereign credit ratings on Italy to 'BBB-/A-3' from 'BBB/A-2'. In our view, economic prospects in Italy are likely to be weaker than we had previously anticipated and weak overall in the next couple of years. We believe this will likely continue to dampen Italian banks' asset quality and profitability, and, specifically, may lead to high credit losses in the Italian banking system over the next two years significantly exceeding our previous expectations. In this context, we now believe that the likely impact of the ongoing economic correction on the Italian banking system will be more severe than we had previously anticipated, in our view reflecting higher economic

...+ On Dec. 5, 2014, Standard & Poor's lowered its long- and short-term unsolicited sovereign credit ratings on Italy to '###-/A-3' from '###/A-2'. + In our view, economic prospects in Italy are likely to be weaker than we had previously anticipated and weak overall in the next couple of years. We believe this will likely continue to dampen Italian banks' asset quality and profitability, and, specifically, may lead to high credit losses in the Italian banking system over the next two years significantly exceeding our previous expectations. + In this context, we now believe that the likely impact of the ongoing economic correction on the Italian banking system will be more severe than we had previously anticipated, in our view reflecting higher economic risk for Italian banks than previously. + We are lowering the long- and short-term ratings on 11 entities and three local branches of foreign banks. We are also lowering the long-term ratings on another seven entities, and removing from CreditWatch...

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