DBRS on Nov. 27 downgraded Unione di Banche Italiane SpA's long- and short-term issuer ratings to BBB/R-2 (high) from BBB (high)/R-1 (low).
The rating agency also lowered the Italian lender's long-term senior debt rating, deposits rating and intrinsic assessment to BBB and its short-term debt rating and deposits rating to R-2 (high). The bank's long- and short-term critical obligations ratings were also downgraded to A (low)/R-1 (low), while its support assessment remains unchanged at SA3.
The trend on the ratings is now stable, DBRS said.
The agency said the downgrade was driven by challenges to improving UBI's profitability, as well as its stock of nonperforming exposures, which remains high despite the recent downward trend in default rates and improving coverage levels.
Growing pressure from regulators and market participants to expedite UBI's reduction of nonperforming exposures could be an additional challenge for the bank, DBRS said.
