Fitch: Banca Popolare di Milano view to negative

Fitch Ratings said it placed Banca Popolare di Milano’s BB+ long-term issuer default rating on Rating Watch negative and changed the outlook to negative from stable following a periodic review.

The review also considers news the bank will merge with Banco Popolare into a new parent bank, creating Italy’s third-largest banking group, Fitch said.

Although the merger is still subject to shareholder and regulatory approvals, the agency said believes the transaction is likely to go through.

The long-term issue default ratings of both banks are driven by their standalone creditworthiness as expressed by their viability ratings.

Banca Popolare di Milano has a viability rating of BB+ and Banco Popolare has a viability rating of BB.

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