DBRS cuts Veneto Banca to BB (low)

DBRS said it lowered Veneto Banca SpA’s senior long-term debt and deposit rating to BB (low) from BB.

The trend remains negative.

The bank’s short-term debt and deposit rating was confirmed at R-4 with a stable trend.

The intrinsic assessment was downgraded to BB (low) from BB, while the support assessment was confirmed at SA3.

DBRS said the downgrade takes into account the deterioration of Veneto Banca’s franchise, asset quality and litigation risks following a number of investigations by the supervisory authorities in 2015-2016, as well as increased liquidity and refinancing risks as a result of major deposit outflows.

However, the downgrade was limited to one notch, reflecting the €1 billion capital raise subscribed by Atlante fund.

The negative trend reflects the agency’s expectation that Veneto Banca’s weak asset quality and growing litigation risks will continue to weigh on the bank’s business activities and financial position throughout 2016.

© 2015 Prospect News.
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