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S&P Downgrades 15 Italian Financial Institutions, Says Country Faces Deeper Recession Than Previously Thought
It is late in the afternoon on a Friday, which means one thing: it is time to dump all left over bad news under the rug. Sure enough, here comes S&P. From Bloomberg:
- S&P CUTS RATINGS ON 15 ITALIAN FINL INSTITUTIONS
- S&P TAKES RATING ACTIONS ON 32 ITALIAN FINL INSTITUTIONS
- BANCA MONTE DEI PASCHI DI SIENA SPA CUT TO BBB-/NEGATIVE/A-3
- BANCA POPOLARE DI MILANO SCRL CUT TO BB+/NEGATIVE/B BY S&P
- S&P SEES ITALIAN BANKS' VULNERABILITY TO CREDIT RISK RISING
- S&P SAYS ITALY FACES POTENTIAL DEEPER RECESSION THAN IT THOUGHT
Full release:
Standard & Poor's Ratings Services today said it has taken rating actions on 32 Italian financial institutions.
These include affirming our counterparty credit ratings on 15 entities, lowering our ratings on 15, removing the ratings on four from CreditWatch negative, and revising the outlook on one.
The rating actions reflect our view of increased credit risk for the Italian economy and its banks. They follow our revision of our economic risk score for Italy, one of the main components of our Banking Industry Country Risk Assessment (BICRA), to '5' from '4'. We have maintained our BICRA for Italy at group '4' and our industry risk score at '4' (see "BICRA On Italy Maintained
At Group '4', Economic Risk Score Revised To '5' On Increased Credit Risk For Italian Banks," published Aug. 3, 2012, on RatingsDirect on the Global Credit Portal).
With Italy facing a potentially deeper and more prolonged recession than we had originally anticipated, we think Italian banks' vulnerability to credit risk in the economy is rising. In this context, the combined effect of mounting problem assets and reduced coverage of loan loss reserves makes banks more vulnerable to the impact of higher credit losses particularly in the event of deterioration in the collateral values of assets.
In our opinion, a more severe recession will likely push up the stock of Italian banks' problem assets in 2012 and 2013 to levels higher than we previously expected and high relative to the stocks in other banking systems in Europe. At the same time, the banks' coverage of problem assets through provisioning, which was already low by international standards because of the banks' extensive use of tangible collateral in their assessment of provisioning needs, has fallen further over the past few years.
See the list below for the rating actions on the financial institutions and their relevant subsidiaries.
We will publish individual research updates on the banks identified below, including a list of ratings on affiliated entities, as well as the ratings by debt type--senior, subordinated, junior subordinated, and preferred stock.
RATINGS LIST
The ratings listed below are issuer credit ratings unless otherwise stated.
Ratings Affirmed
Banca Fideuram BBB+/Negative/A-2
Banca Mediocredito del Friuli-Venezia Giulia SpA BBB/Negative/A-3
Banco Popolare Societa Cooperativa SCRL Credito Bergamasco BBB-/Negative/A-3
Banca Aletti & C. SpA
Credito Emiliano SpA BBB/Negative/A-2
Intesa Sanpaolo SpA BBB+/Negative/A-2
Banca IMI SpA
Istituto Centrale delle Banche Popolari Italiane SpA
CartaSi SpA BBB-/Negative/A-3
Istituto per il Credito Sportivo BBB+/Negative/A-2
Mediobanca SpA BBB+/Negative/A-2
MedioCredito Centrale SpA BBB-/Negative/A-3
UniCredit SpA BBB+/Negative/A-2
UniCredit Leasing SpA
Downgraded
To From
Banca Carige SpA BB+/Negative/B BBB-/Negative/A-3
Banca di Credito Cooperativo di Conversano S.c.r.l BB+/Negative/B BBB-/Negative/A-3
Banca Popolare dell'Alto Adige BBB-/Negative/A-3 BBB/Negative/A-2
Banca Popolare dell'Emilia Romagna S.C. BB+/Negative/B BBB/Negative/A-2
Banca Popolare di Vicenza ScpA BB+/Negative/B BBB-/Negative/A-3
Dexia Crediop SpA B+/Negative/B BB-/Negative/B
Eurofidi Scpa BB+/Negative/B BBB-/Negative/A-3
Iccrea Holding SpA
Iccrea Banca SpA
Iccrea BancaImpresa SpA BBB-/Negative/A-3 BBB/Negative/A-2
Unione di Banche Italiane Scpa BBB/Negative/A-2 BBB+/Negative/A-2
Downgraded; CreditWatch Action
Agos-Ducato SpA BBB-/Negative/A-3 BBB/Watch Neg/A-2
Banca Monte dei Paschi di Siena SpA BBB-/Negative/A-3 BBB/Watch Neg/A-2
Banca Popolare di Milano SCRL
Banca Akros SpA BB+/Negative/B BBB-/Watch Neg/A-3
Outlook Action
FGA Capital SpA BBB-/Negative/A-3 BBB-/Stable/A-3
CreditWatch Action; Ratings Withdrawn
Withdrawn To From
Cassa di Risparmio della Provincia di Teramo SpA N.R. B/Negative/B B/Watch Neg/B
NB. This list does not include all ratings affected.
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Paging Mr. Draghi. Pick up the red phone.
bagdad bob would be more appropriate?
Barilla pasta sauce going to go on sale soon.
A recession that is deeper than they thought? Who is they? S&P? When did the thinking part come into the analysis? Italy is gonna look like somebody put an M-80 in the pasta sauce.
Wow. Well this was unexpected.
We are getting close to end game, we truly are.
Red alert indeed Mr. Draghi.
See, socialism works !
Looks to me like S&P need to take a trip to ITALY, go ahead and dig deeper in their paperwork.. Italy is really in disarray, deplorable conditions "I wished that I was wrong, having been there in the last 12 months".
It may not be long before the people rise up under these conditions "which are worse then Spain by far".
Good Luck Italy!!
No need for concern. The European politicians and financial heads will simply say....the downgrades mean nothing. The markets will shrug their shoulders and say "whatever. All is good. Lets rock and roll some more!"
go to most of red states......stupid ass rednecks who have never been out of their small towns, eating shitty fried food, shopping junk at walmart, cars parked in their lawns.....yeah US is no better than Italy.
People don't "rise up" until they get hungry. That will take a while, even in Greece and Italy.
Of course, with the drought in the US that could be soon. What will the leaders use to purchase food from Archer Daniels Midland next year?
Hmm... maybe a buy on ADM?
Oh! Wait! http://www.marketwatch.com/story/sp-lowers-outlook-on-archer-daniels-midland-2012-08-03
How ironic.
Markets should rally cuz now QE is more likely?
Doesn't matter. At the end, every financial institution and sovereign rating will be junk, but equities will still be smoking hopium.
BUY THE DIP!!eleventyone11
I agree. The bulls seem unfazed.....when bad news hits....the markets drop very little and when a tiny little bit of good news comes out...the markets go beserk and drive things up like mad. I am starting to think it will take nothing short of a complete meltdown to scare the shit out of the "all is good" crowd and cause a correction to get things to fair value.
when a tiny little bit of good news comes out...the markets go beserk and drive things up like mad.
Yep, it is how they 'prove' that their denial is practical wisdom.
So... what else do the high rollers do with all of their money? Create jobs? Of course they will bet on equities. Unless they can gin up a Fed rate of less than zero, Bonds can only go down.
Generali is in Default
Italian 10yrs gonna hit 10% and need debt haircuts from 5-35%
*
Wonder when SP will downgrade whole German;Swiss and Frenchbank + Insurers
Not yet
wait for the next tb auction
Really? I wouldn't be so sure, look at its last trimestral...what film are U watchin' ?
now SPY 1500 is a lock. .maybe by next friday
ok...this phone is for local calls, and if this one rings we are in deep shit.
the EU/ECB QE package hasnt been designed and is clearly predicated on EFSF action which in turn requires that a country goes cap in hand and accepts conditionality (subjugation to Deutsche federation of euroland) before specific market intervention.
The only open question about ECB (forthcoming policy) is whether ECB can act on its own - my guess is despite its talk it wont go for premature ejaculation of the SMP until all bits are in place ... and in the meantime keep the algos/muppets busy with " Im coming, Im coming.... "
Isn't this release about 45 minutes too early?
Who the fuck are S&P? (When they arent whores?)
How far below "piece of shit" can a bank be rated?
The VIX needs some more "Tape Grenades" to chew on. Next week isn't going to be quiet. Lack of news will bring the nutjobs out.
no no . the worse the news the bigger the ramp..git it? this is all designed to mask how fucked up things are. Man. .Hitler would have just been dying to see this. masterful!
silver is bank and central bank kryptonite. think ill buy some more.
Merkel Coalition Members Show Acceptance Of ECB Bond-Buying
They will tie those hands.
No doubt it.
Hey! Look over there! The Olympics are on!!
..and Kim Kardashian lost 40
still not enough.
Remember way back when..the markets would sell off going into the weekend, because holding over the weekend could be risky?....Ahhhh those were the days.
OMG i was thinking the same. Back in the day when there were actually human traders they would book their nice gift at 2:30 and go hit Rivers by the CME or something like that. there was even volume it seemed at the end but i could be wrong.
No you aren't wrong. The volume would always pick up as there was some selling. I used to like hose markets. These are just no fun.They ramp it up then nothing. You might as well call it a day.
and according to yahoo. child page. Jenna Jamison is gonna vote for romney..
"These things gotta happen every five, ten years...helps get rid of all the bad blood."
"How bad do you think it will get?"
"Pretty damn bad..."
BARBECUED shorts today across the board - the hedgies are all getting smoked with the largest NYSE short position in years!
"He who sells what isn;t his'n; must deliver or goes to prison!"
"Turn those machines back on; get back in there and BUY,BUY, BUY, you moron!"
Has the VIX ever hit single digits?
No. I have seen it hover around $10 in the past. Usually a good time to go short. Of course this time could be different. These markets are fucked up.
2.2% off the high for the year, yet about to enter a global recession or worse. Fucked up is right.
I guess that's why it's called a "crack up boom"?
Of course nobody saw this coming. What bullshit.
Help me Mr wizzard - I dont want to be the ECB president anymore......... twizzle twazzle etc time for RESET
Bullish!
They're going for the gold now.
This kind of news always occur on Friday so that the equilty buyers can forget after a weekend. Dow to the moon on Monday!
Hey who cares. Dow +200 is all that matters, and Cramer's gonna have a double deluxe extra chocolaty shit-eatin grin.
Have a weekend.
http://www.youtube.com/watch?v=fiuXxjTusNo
So do the rating agencies include the perpetual funds required for an EU bailout in considering risks? It seems the circular logic would go exponential.
But but but those Italian banks were up today by 6-12% because of strong job numbers in the US.
Crack-cocaine is a hell of a drug.
Makes ya get just so crazzzzzzy!
About those "job numbers". Somebody needs to tell ya what they are.
1. Mostly part time jobs - like mowing someone else's lawn, working 20 hrs @ minimum wage, etc. 91,000
2. Full time jobs, mostly paying minimum wage, about 12,000
3. Fantasy jobs - the rest were made up from the whole cloth to juke up the market.
Of course, fantasy jobs is about what a fantasy market would respond to, isn't it?
God, I love this job!
I thought for sure that the U.S. was going to get downgraded again.
Next week, I guess.
Italy has No Balls!!
http://news.ninemsn.com.au/world/8508952/italy-rules-no-balls-insult-for...
Couldn't resist. ;)
Italian women do! i heard Janet Napolitano has a good set!
By using this language against honourable Mrs. Napolitano you will be considered a terrorist... (I need to vomit...)
Second bank on the list is shown as Banca Mediocre dito. You just can't make this shit up.
Calling Reggie Middleton, Calling Reggie Middleton
Calling Reggie Middleton, Calling Reggie Middleton
....and the difference between the Italian government and the US government is what?
nobody cares
people are too short this market and are feeling PAIN
This financial problem originated in the US and will end in the US. The banksters and the FED are manipulating the system to make it appear as though the problems reside in Europe, but in fact the greatest problem is the US financial health. This is all a game to distract the general public.
NOPOMO
Shouldn't S&P issue ratings on Gold while they are at it? Is Gold a BBB or an AAA? Without some reference point their estimations are useless.
Italian banks are old (maybe obsolete) and traditional. No subprime or fantasy bucketshops financial products there. Does S & P knows that in those banks there is the second world money supply (mostly private savings) ? Do they know Italy has the third gold reserve of the world ? Do they know that one third of the Italian economy is submerged ? Believe me Italy never die ! Only people that knows that country and that people can understand.
Yes, I agree, I don't see anyhow Italy sinking. Suffering a lot for sure, but still not sinkin'. The industrial export is near top 2008 levels, and still a 45% of the country is expected to go on holiday at sea or in the Alps this August.
Ouch, but what is stunning is that on italian press nobody cares anymore about S&P downgrade, just small news, but no reaction at all from bankers and institutions.
Is it a good news, if it is no more worth answering and explaining to your public opinion? But lookin' at the balance sheets of european and italian banks, they never had so many assets and liquidity as today, and this may well explain why nobody cares more of the 3 sisters. ...nice trick mr Draghi, nice trick!In the meantime eurobanks are filling up their vaults with european debt, bought with money lent by ECB at 1% with an interest gain at 3%, so the 2% difference goes to clean some dirty balance sheets of some banks. Nice trick Mr Draghi, nice trick!
And if you keep gaming with declarations, as Ecb declares total war and the following day Buba denies, and if some eurobanks friend of the ECB know the game in advance, there's even a lot of money to do, and what's most important, somebody on the other side of the pond is going to lose a bunch of money. Again, what a good trick, Mr Draghi, what a good trick!
S&P are late. As usual.
MIB is below 2008 crash levels. FTSE MIB
Or at least is was when I bought. I'm expecting some sort of minor "intervention" by the ECB and for it to bounce back up to just below the 2009 peak and decay from there back down to where we are now over about a year, maybe two. Unless the intervention is a proper (screw the poor) stagflationary boom in which case it'll take off. Course that won't happen with the current set of conservatives in Berlin.
So does this mean the recovery is stalling? </sarc>
Is that the black swan? Italy may sink nearly (before asking for the bailout) but it surely will take others with it .
Rollercoaster ahead...
Italy is clearly in deep trouble. High debt than Spain but lower budget deficits. Look at their debt rollover charts. Neither one is likely to survive in their current forms,
http://confoundedinterest.wordpress.com/2012/08/04/mission-improbable-ra...