Banco Popolare: Fitch brings the outlook to negative. The bank surprised by the decision – La Stampa

Banco Popolare: Fitch brings the outlook to negative. The bank surprised by the decision

          

Yesterday, April 21, 2016 Fitch changed from “Stable” to “Negative” outlook on the ratings of long-term IDR ‘BB’ Banco Popolare and the subsidiary Banca Aletti. The short-term rating “B” and the Viability rating “BB” have been confirmed.

“The Banco Popolare , noting with surprise orientation formulated by the Agency, noted the significant performance improvements achieved by the Group in 2015, the capital increase that It will further strengthen the already strong capital position of the Group, the strategic and income prospects that will result from the planned merger with Banca Popolare di Milano, an operation that will create the third national banking operator, with a strong market position in the most prosperous regions of Italy and with a financial profile among the best in terms of capital adequacy, income generation capacity and coverage of the risks. “

agency reports attributes the decision to worsen the outlook on the stock of Banco Popolare to high levels of non-performing loans not covered by reserves at the end of 2015 exceeded the 200% FCC (Fitch Core capital, which is a measure of the main capital of a company calculated by the Fitch) and poor quality of assets. The bank’s profitability ratios are below the industry average, according to Fitch, despite some recovery in 2015. The Fitch decision also takes for granted the proper execution of the capital of one billion Euros on arrival and takes account of a improvement of the Italian context in terms of reduction opportunities of stocks of non-performing loans.
The merger with BPM is considered by the agency a strength factor. The reduction in the stock of non-performing loans of the Bank since the end of 2014 was achieved through a combination of sales of impaired loans in the latter part of 2015, a minor formation of these impaired loans on the balance sheet and a strong focus on collecting receivables.
The gross impaired loan ratio of Banco Popolare (the ratio of gross impaired loans to total loans) is so slowly declined from 26.5% in 2014 to just under 26% at the end of 2015. According to Fitch, also , the doubtful loans roofs are low and reflect the long-term exposure to high levels of collateral.
The decline in the levels of cover than the end of 2014 is due to the sale of loan portfolios doubts heavily covered by reserves and provisions rather than a weakening of their profile.

Some numbers can better frame the case. 2015 budget shows that the total amount of impaired loans Banco Popolare to customers before amounts to about 18300000000 a decrease of € 914 million (-4.7%) compared to 19.2 in 2014.
impaired loans (doubtful, probable defaults and past due), to net of the value adjustments, on 31 December 2015 instead amounted to 12600000000 down slightly to 12.6 billion earlier this year.
L ‘ percentage of net non-performing assets compared to total net loans to customers , came from budget to 16.1% (15.8% in 2014); similar increase was recorded in the level of incidence calculated gross of value adjustments, which amounted to 21.8% compared to 22.1% last year.
percentage of impaired loans coverage stood at 31.1% compared to 34.2% at year-end 2014 (so it is declining).
shareholders’ equity of the bank amounts to EUR 6.69 billion or so.

(GD)