Summary: Istituto Centrale delle Banche Popolari Italiane SpA

Leading market position in payment card related service market. Regulators likely to prevent excessive dividend distribution to the holding company. Material double leverage at the group level. High fixed costs. Potential losses in payment services and credit card related activities due to operational risks. The stable outlook on Istituto Centrale delle Banche Popolari Italiane SpA (ICBPI) and its core subsidiary CartaSi SpA mainly reflects our view that the ratings already incorporate most of the risks we see for ICBPI's performance over the next 12 months. In particular, it factors in our expectations that ICBPI's risk-adjusted capital (RAC) ratio will sustainably remain above 5% in 2017 and 2018 and that the regulator will eventually prevent excessive dividend distribution to the NOHC.

...The stable outlook on Istituto Centrale delle Banche Popolari Italiane SpA (ICBPI) and its core subsidiary CartaSi SpA mainly reflects our view that the ratings already incorporate most of the risks we see for ICBPI's performance over the next 12 months. In particular, it factors in our expectations that ICBPI's risk-adjusted capital (RAC) ratio will sustainably remain above 5% in 2017 and 2018 and that the regulator will eventually prevent excessive dividend distribution to the NOHC. Consequently, we could lower the ratings on ICBPI if we expected ICBPI's solvency to significantly deteriorate, and its projected RAC ratio to fall below 5%. We could consider upgrading ICBPI if we anticipated that the double leverage at the holding company level--calculated as the overall investment in subsidiaries as a percentage of the group's equity value--would materially...

Summary