(Finance) – Moody’s has lowered the ratings on the long-term deposits of Cassa Centrale Banca to Baa2 from Baa1 and long-term issuer ratings to Ba2 from Ba1. In addition, Moody’s confirmed all other ratings and assessments, including the bank’s Baseline Credit Assessment (BCA) and adjusted BCA of ba1. L’outlook remains negative.
The rating downgrade reflects the continued long-term senior unsecured debt relief existing at group level Cassa Centrale which, according to Moody’s analysis, exposes junior depositors and bondholders to greater losses than previously thought, reads a note.
It is emphasized that the banking group is materially exposed to Italian small and medium-sized enterprises, which Moody’s considers more vulnerable to an economic downturn. However, the rating agency expects Cassa Centrale Banca and its affiliated banks to continue the disposals and securitizations of non-performing loans. Also, the solid capitalisation it will help the group cope with the deteriorating operating conditions.