DBRS Upgrades Deposit Ratings of Certain Italian Banks

DBRS Ratings Limited (DBRS) upgraded by one notch the Long-Term Deposit ratings of 9 Italian banks, specifically Banca Akros SpA, Banca Monte dei Paschi di Siena SpA, Banca Popolare dell’Alto Adige - Volksbank SpA, Banca Sella Holding SpA, Banca Sella SpA, Banco BPM SpA, Credito Valtellinese SpA, Iccrea Banca SpA, and Unione di Banche Italiane SpA (or collectively “the Banks”). The Short-Term Deposit ratings of 8 banks were also upgraded. A full list of rating actions is included at the end of this press release.

KEY RATING CONSIDERATIONS

Today’s rating action reflects the introduction in Italy of full depositor preference in bank insolvency and resolution proceedings from January 1, 2019. This follows the implementation in Italy of the EU Bank Recovery and Resolution Directive No. 2014/59/EU (or BRRD) through the adoption of Legislative Decrees No. 180 and No. 181 in 2015.

The Decree No. 181, in particular, amended the rules concerning creditor hierarchy in insolvency proceedings. In line with article 108 BRRD, preference is granted to insured deposits and non-insured deposits by individuals, micro enterprises, and small and medium-sized enterprises (or SMEs). Furthermore, the Decree No. 181 establishes that from January 1, 2019, all other deposits, including corporate and institutional deposits held in legal banking entities in Italy, will rank senior to other unsecured debt, but junior to insured deposits, deposit guarantee schemes and the portion of uninsured deposits held by individuals and SMEs.

Reflecting this full depositor preference scheme, DBRS upgraded the Long-Term Deposit ratings of 9 Italian banks by 1 notch and they are now positioned 1 notch above their Intrinsic Assessment (IA). DBRS had previously rated these Long-Term Deposits in line with the Banks’ Senior Debt, which is at the same level as the Banks’ Intrinsic Assessment (IA). Concurrently, DBRS also upgraded the Short-Term Deposits of Banca Akros SpA, Banca Popolare dell’Alto Adige - Volksbank SpA, Banca Sella Holding SpA, Banca Sella SpA, Banco BPM SpA, Credito Valtellinese SpA, Iccrea Banca SpA, and Unione di Banche Italiane SpA. The Short-Term Deposit ratings of Banca Monte dei Paschi di Siena SpA remained unchanged, in line with DBRS’ Short-Term / Long-Term Mapping Table.

The Deposit ratings of Intesa Sanpaolo SpA are unaffected by this action, as they are already rated at the same level as the Italian Sovereign ratings (BBB (high)/R-1 (low), Stable Trend).
The Deposit ratings of Banca Nazionale del Lavoro SpA (BNL) are not affected by this rating action as the ratings of BNL’s Long-Term and Short-Term Deposits already incorporate rating uplift due to parental support from BNP Paribas.

RATING DRIVERS

The ratings of the Long-Term and Short-Term Deposits will generally be affected by changes in the IA of the individual banks. Furthermore, the ratings could also be affected by any further changes in the legal framework for bank resolution and / or creditor hierarchy.

Notes:
All figures are in Euros unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (July 2018). This can be found can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include Italian Legislation, Bank of Italy, company financials and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve-month period. DBRS’s outlooks and ratings are under regular surveillance

For further information on DBRS historical default rates published by the European Securities and Markets Authority (“ESMA”) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU and US regulations only.

Banca Akros SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: September 8, 2017
Most Recent Rating Update: December 13, 2018

Banca Monte dei Paschi di Siena SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: January 18, 2013
Most Recent Rating Update: June 19, 2018

Banca Popolare dell’Alto Adige - Volksbank SpA
Lead Analyst: Mario Carrara, Assistant Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: February 18, 2014
Most Recent Rating Update: June 11, 2018

Banca Sella Holding SpA
Lead Analyst: Mario Carrara, Assistant Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: July 07, 2014
Most Recent Rating Update: May 21, 2018

Banca Sella SpA
Lead Analyst: Mario Carrara, Assistant Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: May 15, 2015
Most Recent Rating Update: May 21, 2018

Banco BPM SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: January 05, 2017
Most Recent Rating Update: December 13, 2018

Credito Valtellinese SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: February 07, 2013
Most Recent Rating Update: March 08, 2018

Iccrea Banca SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: July 26, 2018
Most Recent Rating Update: July 26, 2018

Unione di Banche Italiane SpA
Lead Analyst: Nicola De Caro, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: November 25, 2015
Most Recent Rating Update: November 26, 2018

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