(The following statement was released by the rating agency)
May 30 -
Summary analysis -- Banca Popolare dell'Alto Adige ---------------- 30-May-2012
CREDIT RATING: BBB/Negative/A-2 Country: Italy
Primary SIC: Commercial Banks
Credit Rating History:
Local currency Foreign currency
10-Feb-2012 BBB/A-2 BBB/A-2
18-Oct-2011 BBB+/A-2 BBB+/A-2
16-Feb-2011 A-/A-2 A-/A-2
The negative outlook reflects Standard & Poor's Ratings Services' view that it could lower the ratings on Italy's Banca Popolare dell'Alto Adige (BPAA) if the bank's capital were to deteriorate more than Standard & Poor's currently expects, or if the domestic economy and bank industry environment were to weaken further. More specifically, we might lower the ratings if our risk-adjusted capital (RAC) ratio for BPAA fell below the 7.0%-7.3% range.
Our baseline expectation for next year is for our assessment of the bank's capital to remain adequate, as our criteria define the term, and for gross nonperforming assets (NPAs) to remain significantly lower than our expectation for the Italian banking system average.
A revision of the outlook to stable would depend on an improvement in economic and competitive conditions in Italy, coupled with a stabilization in BPAA's asset quality and earnings capacity.