Feb. 6 (Bloomberg) -- Banca Monte dei Paschi di Siena SpA and Banco Popolare SC were among Italian banks to have their credit grades cut by Fitch Ratings after Italy was downgraded last month.
Monte dei Paschi, Italy’s third-biggest bank, and Verona- based Banco Popolare had their debt downgraded to BBB from BBB+, Fitch said today in a statement. Iccrea Holding SpA and Unione di Banche Italiane ScpA also were cut to BBB+ from A-, and Intesa Sanpaolo SpA was reduced to A- from A.
European nations are grappling with a debt crisis now in its third year as they seek to restore budget order. Fitch lowered Italy’s credit to A- on Jan. 27, two weeks after Standard & Poor’s stripped France of its top grade, leaving Germany as the sole nation in the euro area with a stable top rating of AAA.
“Given the close link between bank and sovereign risk on both sides of banks’ balance sheets, the key factors that drove the Italian sovereign action also contributed to the downgrades and negative outlooks on the Italian banks,” Fitch said.
--Editors: Peter Eichenbaum, Dan Reichl
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