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DBRS revises trend on ratings of Banco BPM, Banca Akros

DBRS on Dec. 15 confirmed the BBB (low)/R-2 (middle) long- and short-term issuer ratings of Banco BPM SpA and unit Banca Akros SpA and revised the trend on the ratings to negative from stable.

The rating agency also revised the trend on both institutions' BBB (low)/R-2 (middle) long- and short-term deposit ratings, BBB (low) long-term senior debt ratings, R-2 (middle) short-term debt ratings to negative.

A similar action was also taken on Banco BPM's BBB (high)/R-1 (low) long- and short-term critical obligations ratings.

The change in trend reflects the current "very large" level of nonperforming loans and the challenges that the parent company will likely face to further speed up the reduction of its bad loan portfolio.

At the same time, DBRS maintained the group's BBB (low) intrinsic assessment and SA3 support assessment. The agency also maintained a support assessment of SA1 on Banca Akros, implying that the subsidiary will receive strong and predictable support from the parent.

The confirmation of the ratings is based on Banco BPM's progress in executing its strategic plan for the period from 2016 to 2019, according to the agency.