UniCredit SpA, Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA were among 34 Italian financial firms downgraded by Standard & Poor’s (S&P), after the credit-ratings company reduced the nation’s grade last month.
UniCredit, Italy’s biggest bank, and No. 2 Intesa had their long-term ratings lowered to “BBB+” from “A,” S&P said on Friday in a statement.
Monte dei Paschi, the No. 3 bank, was reduced to “BBB” from “BBB+.” All three have a negative outlook, S&P said.
Italy’s credit rating was cut two levels to “BBB+” from “A” on Jan. 13 as S&P said European leaders’ struggle to contain the region’s debt crisis would complicate the country’s efforts to finance borrowings. S&P on Friday revised its banking industry country risk assessment, known as Bicra, for Italy to group 4 from group 3, citing mounting risks.
“Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” S&P said in a separate statement on the country’s financial industry. “We anticipate persistently weak profitability for Italian banks in the next few years.”
“Banks in highly indebted countries have a greater potential vulnerability than in others,” Italian Prime Minister Mario Monti said on Friday in a CNBC interview. “By and large, Italian banks have been less hit by the financial crisis than the banks in many other European countries.”
The extra yield investors demand to hold bonds of UniCredit and for Intesa rather than government debt was 508 basis points on Thursday, or 5.08 percentage points, compared with an average 306 basis points in the Bank of America Merrill Lynch Euro Corporates, Banking Index. European “BBB” ranked bonds are at 381 basis points and “BB” debt at 664, Bank of America Merrill Lynch index data show.
Fitch Ratings downgraded Intesa to “A-” from “A,” and Monte dei Paschi to “BBB” from “BBB+” in a statement on Monday.
The credit-ratings company affirmed its “A-” rating on UniCredit.
S&P downgrades linked to Europe’s debt crisis haven’t necessarily led to shifts in bond prices, as investors anticipated declines in creditworthiness.
UniCredit said on Friday in a press release on its Web site that S&P had aligned the bank with Italy’s credit rating and had maintained the lender’s stand-alone credit profile at “A-.”
Intesa’s long and short-term ratings are capped at the same level as Italy’s and the bank’s stand-alone credit profile is “A-,” Intesa said on Friday in a statement on its Web site.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
RSS