According to a study by the Moody's rating agency, the examination of the state of health of the 130 European banks that the ECB will begin in November and which will last 12 months will be negative for Italian institutions with weak capital ratios.
The minimum parameter which sees the common equity tier1 set at 8% does not help "the credit of junior bonds of Italian banks close to or below this threshold, or with low asset quality".
"It will be difficult for these banks - the experts explain - to meet the need for capital with private resources, a factor which increases the probability of public intervention and ultimately of a bail in", i.e. the contribution from bondholders, also because they do not there is no measure to stop any capital shortfalls.
The banks mentioned by Moody's are: Banca Carige (B2 rating under review for downgrade), Bpm (B1 negative, e+/b2 stable) and Credito Valtellinese (Ba3 negative, e+/B1 stable) given the low level of capital; Mps (B3, negative) and Banco Popolare (Ba3, negative) due to weak asset quality.
The rating agency specifies that Banca Carige, Banco Popolare and MPS plan to raise capital on the market and through the sale of assets. However, in the comparison with the European counterparts, Italian banks will benefit from the harmonization of the definition of non-performing loans to the EBA criteria, a parameter that the Bank of Italy has already adopted unlike the supervisory authorities of other countries. A benefit that "will presumably be offset by a more extensive scrutiny of the 'debt forbearance' measures, defined by the EBA as the extension of concessions to creditors in difficulty".
In response to the Moody's study, the Intermonte experts underlined that Carige and Bpm have already announced a capital increase, "while for the others it will be necessary to understand whether the validation of internal models will significantly improve the capital position".
