Moody's on Sept. 27 assigned a Baa3 long-term bank deposit rating, a Ba2 long-term issuer rating and a"ba3" stand-alone baseline credit assessment.
The outlook is stable on the deposit rating and negative onthe issuer rating.
In addition, the rating agency assigned long- and short-termcounterparty risk assessments of Baa3(cr)/P-3(cr). Moody's also assigned BPERshort-term deposit ratings of P-3.
The baseline credit assessment reflects the agency's view ofBPER's "very high" asset risk and low profitability, which arepartially mitigated by adequate capital and a good level of retail funding.
Moody's believes that the bank faces regulatory pressure tostrengthen the coverage of problem loans and reduce the stock of bad loans. Inaddition, Moody's believes that the bank will actively participate in theconsolidation of the Italian banking system, but expects any acquisition tohave a moderate impact on capital.
The stable outlook on the long-term deposit rating reflectsMoody's expectation of a gradual reduction of bad loans and rising levels ofprovision coverage. The negative outlook on the long-term issuer rating factorsin the fact that senior unsecured bonds have been sold to retail clients andif, as expected, this source of funding is not replaced by new senior debt, theoverall volume of senior unsecured debt would reduce, thereby increasingloss-given-failure for the remaining instruments.