Fitch Ratings ha confermato per Banca Monte dei Paschi di Siena il rating a lungo termine ‘A-’ e il rating a breve termine “F2” rivedendo l’outlook da stabile a negativo. Confermati anche i rating di Antonveneta (A-/F2) con outlook da stabile a negativo
Fitch Ratings-London/Milan-15 September 2011: Fitch Ratings has revised the Outlook on Banca
Monte dei Paschi di Siena SpA’s (MPS) Long-term Issuer Default Rating (IDR) to Negative from
Stable. At the same time the agency affirmed the bank’s Long-term IDR at ‘A-‘, Short-term IDR at
‘F2’ and Viability Rating (VR) at ‘a-‘. The Outlook on MPS’s fully-owned subsidiary, Banca
Antonveneta (Antonveneta), has also been revised to Negative from Stable, and its Long-term and
Short-term IDRs affirmed at ‘A-‘ and ‘F2’, respectively. A full list of rating actions is at the end of
this comment.
The revision of MPS’s Outlook to Negative reflects the downside risks Fitch sees for the bank’s
performance and asset quality in the current difficult operating environment. MPS’s ratings are
based on its good domestic franchise with an 8% market share in Italy and its focus on commercial
banking with a diversified client base consisting primarily of SMEs and small businesses. They are
underpinned by its capitalisation, which has improved as a result of the EUR2.1bn capital increase
earlier this year. The ratings also reflect weak profitability, weak asset quality and the current
pressure in the funding markets for Italian banks.
The ratings of Antonveneta, a fully owned subsidiary bank of MPS, reflect potential support from
MPS given Antonveneta’s integration with the parent and its importance to MPS’s strategy in that it
acts as the group’s distribution network in north-eastern Italy.
MPS’s operating profitability remains weak, with an operating return on average equity (ROAE) of
below 3% in H111. Fitch expects the bank’s operating profitability to remain under pressure in a
difficult economic environment for Italian banks, where interest rates remain low, loan impairment
charges are likely to remain high and funding costs are rising on the back of euro area sovereign
concerns. Efforts to improve cost efficiency, which have included a reduction in staff numbers and
an improved group structure, are likely to continue and should help the bank mitigate more difficult
earnings generation. Under its strategic plan, presented in H111, MPS is aiming for net income of
EUR1.7bn in 2015 by aligning the performance of the branch network to internal best practice,
re-pricing products and services, and improving cross-selling of investment and insurance products.
Fitch considers this profit target challenging in the current market environment.
The quality of MPS’s loan book has suffered in the downturn, and gross impaired loans were equal
to a high 11.3% of gross loans at end-June 2011. Coverage of the riskiest doubtful loans
(“sofferenze”) has remained adequate at about 55%, and Fitch expects the inflow of new impaired
loans to slow. However, the agency believes the volume of impaired loans is unlikely to decline in
the short term. MPS’s loan book is well diversified by sector and by single exposure size.
MPS’s weak profitability and asset quality are to some extent mitigated by improved capitalisation.
MPS raised EUR2.1bn of fresh capital in 2011, which it plans to use partly to repay EUR1.9bn in
government hybrid instruments, thus improving the quality of its capital. Fitch considers the bank’s
8.9% Fitch core capital ratio including the fresh capital and its target 9% common equity Tier 1
ratio under Basel III by end-2013 to be acceptable given its weak asset quality.
MPS issued EUR4.6bn debt to wholesale investors between December 2010 and July 2011, which
enabled the bank to fund all bonds maturing in 2011. The bank reduced its net interbank position,
but repo funding – mainly to finance its securities portfolio – has increased and interbank funding
remains material. At end-June 2011 the bank utilised EUR6bn funding from the European Central
Bank.
The rating actions are as follows:
Banca Monte dei Paschi di Siena SpA:
Long-term IDR: affirmed at ‘A-‘; Outlook revised to Negative from Stable
Short-term IDR: affirmed at ‘F2’
Viability Rating: affirmed at ‘a-‘
Individual Rating: affirmed at ‘B/C’
Support Rating: affirmed at ‘2’
Support Rating Floor: affirmed at ‘BBB+’
Debt issuance programme: affirmed at ‘A-‘
Senior unsecured debt: affirmed at ‘A-‘
Lower Tier 2 subordinated debt: affirmed at ‘BBB+’
Upper Tier 2 subordinated debt, preferred stock and Tier 1 notes: affirmed at ‘BBB’
This rating action has no impact on the rating of the outstanding covered bonds issued by Banca
Monte dei Paschi di Siena.
Banca Antonveneta
Long-term IDR: affirmed at ‘A-‘; Outlook revised to Negative from Stable
Short-term IDR: affirmed at ‘F2’
Support Rating: affirmed at ‘1’