March 12, 2020 / 6:36 PM / 17 days ago

BRIEF-Fitch Changes Italian Banking Sector Outlook To Negative In Light Of Heightened Risks From Spread Of Coronavirus

March 12 (Reuters) - Fitch:

* FITCH SAYS CORONAVIRUS THREATENS ITALIAN BANKS’ EARNINGS AND ASSET QUALITY

* FITCH SAYS HAS CHANGED ITS ITALIAN BANKING SECTOR OUTLOOK TO NEGATIVE FROM STABLE IN LIGHT OF HEIGHTENED RISKS FROM SPREAD OF CORONAVIRUS

* FITCH SAYS SUBSTANTIAL SLOWDOWN OF ITALIAN ECONOMY IS LIKELY TO LEAD TO FASTER INFLOWS OF NEW NON-PERFORMING LOANS

* FITCH SAYS ASSET QUALITY OF ITALIAN BANKS MORE EXPOSED TO SMALL BUSINESSES COULD BE PARTICULARLY VULNERABLE GIVEN IMPACT OF OUTBREAK ON SEGMENT

* FITCH SAYS PROFITABILITY OF ITALY’S LARGEST BANKS SHOULD BE MORE RESILIENT GIVEN THEIR MORE DIVERSIFIED BUSINESS MODELS

* FITCH SAYS LARGE-SCALE NPL DISPOSALS TO MEET NPL REDUCTION TARGETS FOR ITALIAN BANKS WILL BE MUCH MORE CHALLENGING AS INVESTOR APPETITE WILL BE LIMITED

* FITCH SAYS EXPECT THAT ITALIAN BANKS WILL BE ABLE TO MEET THEIR FUNDING AND LIQUIDITY NEEDS IN NEAR TERM

* FITCH SAYS SUBSTANTIAL SLOWDOWN OF ITALIAN ECONOMY DUE TO MEASURES TO SLOW SPREAD OF VIRUS IS LIKELY TO LEAD TO FASTER INFLOWS OF NEW NPLS

* FITCH SAYS ITALIAN BANKS WITH HIGH EXPOSURE TO REGIONS RELYING HEAVILY ON TOURISM OR SUPPLY-CHAIN CONTINUITY COULD FACE EXTRA PRESSURE ON ASSET QUALITY Source text for Eikon:

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