With Italy facing a potentially deeper and more prolonged recession that we had originally anticipated, we are of the view that the vulnerability of Italian banks to the impact of rising loan losses has increased due to the combined effect of mounting problem assets and reduced coverage of loan loss reserves. In our view, the capital positions of the Italian network of cooperative banks (Banche di Credito Cooperativo; BBCs), and Iccrea Banking Group, comprising Iccrea Holding SpA (Iccrea Holding), Iccrea Banca SpA (Iccrea Banca), and Iccrea BancaImpresa SpA (Iccrea BancaImpresa), are negatively affected by the increased economic risk we see in the Italian economy. Therefore, we are lowering to 'BBB-/A-3' from 'BBB/A-2' our long- and short-term ratings on Iccrea Holding,
