DBRS Places Banca Popolare di Vicenza Ratings Under Review with Negative Implications

DBRS Ratings Limited (DBRS) has today placed the ratings for Banca Popolare di Vicenza Scpa (BPVI, the Bank or the Group) Under Review with Negative Implications. The review includes the Senior Long-Term Debt and Deposits Rating of BBB (low), the Issuer Rating at BBB (low) and the Short-Term Debt and Deposits Rating of R-2 (low). As part of the review, the Group’s BBB (low) Intrinsic Assessment (IA) will also be reassessed. The support assessment remains unchanged at SA-3 and highlights DBRS’ view that the potential support for the Bank in case of need is not sufficiently predictable to provide rating uplift.

The review of BPVI’s ratings reflects the risks linked to the ongoing investigations by the European Central Bank (ECB) and Consob, as well as uncertainty for the Bank’s corporate governance and strategy linked to the resignation of BPVI’s Chief Executive Officer (CEO). The ECB started an inspection of the Group’s market risk and proprietary trading in late February 2015. In addition, Consob (the Italian Authority for financial markets) launched a separate investigation of BPVI’s market conduct in April 2015, including the effectiveness of the policies and procedures used to manage conflicts of interest in the sale and placement of securities issued by the Bank. Consob is also reviewing the Board’s process for updating the Bank’s share value, as well as the management of customer orders for share sales. Amongst these and other challenges faced by the bank, BPVI’s CEO unexpectedly resigned on May 12, 2015.

DBRS’ review will focus on the progress of the investigations and any implications for the Bank’s financial position, reputation and franchise. During the review period, DBRS will also re-evaluate the further evolution of the Bank’s corporate governance, management and strategy, as well as any steps towards the Bank’s legal transformation and restructuring.

DBRS rating reviews are typically expected to be resolved within a three month period.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2014). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2015) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2015). These can be found can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance.

This rating is under review. Generally, the conditions that lead to the assignment of reviews are resolved within a 90 day period. DBRS reviews and ratings are under regular surveillance.

For further information on DBRS historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository, see:
http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: Nicola De Caro
Rating Committee Chair: Roger Lister
Initial Rating Date: December 18, 2013
Most Recent Rating Update: December 15, 2014

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For additional information on this rating, please refer to the linking document located at: http://www.dbrs.com/research/236983/banks-and-banking-organisations-linking-document.pdf

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