S&P cuts rating on 18 medium-sized Italian banks
MILAN (Reuters) - Ratings agency Standard & Poor's cut its long-term counterparty credit ratings by one notch on 18 medium-sized Italian banks, including Unione di Banche Italiane (UBI.MI: Quote) and Credito Emiliano (EMBI.MI: Quote), citing a worsening economic outlook.
The ratings for UBI and Credem were lowered to 'BBB-', that of Banca Popolare di Milano PMII.MI and Banco Popolare Societa Cooperativa BAPO.MI to 'BB', while Banca Carige (CRGI.MI: Quote) was cut to 'BB-'.
Other affected banks included FGA Capital, Iccrea Holding, MedioCredito Centrale, Banca Popolare di Vicenza, Veneto Banca, Banca Popolare dell'Emilia Romagna (EMII.MI: Quote) and Unipol Banca.
"Italian banks are operating in an environment with higher economic risks, leaving them more exposed to a deeper and longer recession in Italy than we had previously anticipated," S&P said in a statement.
"Banks face tough operating conditions, which we believe could further weaken their financial profiles, notably in terms of asset quality and capital and earnings."
The outlook on the long-term ratings on all Italian banks remains negative, apart from that on Banca Carige and Dexia Crediop, whose ratings remain on CreditWatch negative, it added.
The moves followed an S&P downgrade of Italy's sovereign credit rating to BBB from BBB+, with a negative outlook, earlier in July.
(Reporting by Agnieszka Flak; Editing by David Evans)
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