Press Release

DBRS Morningstar Places Carige Under Review with Positive Implications; LT Issuer Rating at B (low)

Banking Organizations
February 22, 2022

DBRS Ratings GmbH (DBRS Morningstar) placed the ratings of Banca Carige S.p.A. (Carige or the Bank) Under Review with Positive Implications, including the Long-Term Issuer Rating of B (low) and the Short-Term Issuer Rating of R-5. The Bank’s Long-Term Deposits Rating is B, one notch above the Intrinsic Assessment (IA), reflecting the legal framework in place in Italy which has full depositor preference in bank insolvency and resolution proceedings. The Bank’s Long-Term Critical Obligations Rating is B (high), two notches above the IA. The Bank’s IA is B (low), while the Support Assessment remains SA3. A full list of rating actions is included at the end of this press release.


The review will focus on the impact on Carige’s franchise and credit fundamentals of the upcoming potential acquisition of Carige by BPER Banca (BPER, unrated), which is expected to close by 30 June 2022, subject to the required regulatory approvals. The acquisition would allow BPER to become the fourth largest banking group in Italy, with total assets exceeding EUR 150 billion, and a larger geographic footprint across the country, especially in the regions of Liguria and Tuscany. DBRS Morningstar expects to conclude the review when the transaction closes. The review with positive implications reflects that the transaction should be credit positive for Carige as a result of joining BPER’s well established and diversified franchise which is supported by a solid credit profile.

On December 14, 2021, BPER submitted a non-binding offer to Carige’s main shareholders, Italy’s Interbank Deposit Protection Fund (FITD) and the Voluntary Intervention Scheme (VIS). This was deemed not to comply with FITD’s bylaws mainly due to the amount requested by BPER to recapitalise Carige as a condition for the deal. As a result, on January 9, 2022, BPER presented a new non-binding offer upon which the FITD decided to grant BPER with a due diligence exclusivity period of more than five weeks. Following this, on February 14, 2022, BPER signed a binding agreement for the acquisition of the approximately 80% of Carige held by the FITD and VIS, and the subordinated bond issued by Carige in 2018 currently worth EUR 5 million (nominal value), for a price of EUR 1. We note that, prior to the closing, the deal envisages a capital contribution of EUR 530 million, down from BPER’s initial request of EUR 1 billion, to be injected by the FITD into Carige with the aim to cover integration costs, additional de-risking, and charges arising from the early termination of some commercial and operational agreements. After the closing, BPER would launch a mandatory public purchase offer for Carige’s remaining shares at a price of EUR 0.80 per share.

The current B (low) Long-Term Issuer rating of Carige reflects the significant deterioration which has occurred in its franchise in Italy, as a result of past mismanagement issues. Due to these issues, Carige has been in a restructuring phase for several years. The rating also considers Carige’s very poor albeit gradually recovering profitability and its very weak capitalisation despite the recapitalisation completed in late 2019. The ratings also incorporate the significant progress Carige has made to reduce its stock of non-performing loans (NPLs) in recent years as well as improvements in the funding and liquidity profile.

If the acquisition does not go ahead and the Bank’s stand-alone status continues in the medium term, Carige will need to submit a new strategic plan to the ECB, including a capital strengthening plan, which should cover the period between June 2022 and end-2024. The capital increase amount would need to ensure compliance with the updated SREP minimum requirements of 8.83% and 13.75% respectively for the CET1 and Total Capital ratios, starting from 1 March 2022. We note that the new requirements imply a Pillar 2 Requirement (P2R) of 3.25%, up from the previous 2.75%. However, the requirements can be revised by the ECB depending on the evolution of the ongoing business combination. As of end-2021, Carige reported phased-in CET1 and Total Capital ratios of 10.9% and 13.2% respectively (or 9.1% and 11.4% on a fully-loaded basis), highlighting the shortfall on the Total Capital ratio. However, the ECB’s flexibility regime on capital ratios provides banks with the option to operate below the Capital Conservation Buffer of 2.5% until the end of 2022.


If the acquisition of Carige by BPER is completed, Carige's ratings are likely to be upgraded to reflect the positive impact of becoming part of a larger and stronger banking group.

If the acquisition does not go ahead as planned, the trend would likely revert back to Stable. A downgrade would occur if the acquisition fails and the Bank experiences a weakening in its capital position. A material deterioration in the Bank’s asset quality and/or funding and liquidity profile would also contribute to a downgrade.


We view the Business Ethics and the Corporate Governance ESG subfactors as significant to the credit rating. These are included in the Governance category. The Bank has suffered financial and reputational damage from legacy conduct issues, including criminal allegations against Carige’s former executives for criminal association, fraud and money laundering. In addition, failures in corporate governance forced the Bank to be under the ECB’s temporary administration from January 2019 to January 2020. Whilst the Bank has appointed a new Board of Directors, including the CEO, since the end of the temporary administration, we believe that Carige is still in the process of regaining investor and consumer confidence. As a result, these risks are incorporated in the Bank’s Franchise, Earnings Power and Risk Profile grid grades.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (19 July 2021)
Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (3 February 2021) 
The sources of information used for this rating include Morningstar Inc. and Company Documents, Carige FY 2021 Results Press Release, Carige Annual Reports 2017-2020, Carige 2020 Non-Financial Statement, Carige Press Release dated 14 February 2022, BPER Press Release dated 14 February 2022, BPER Press Release dated 10 January 2022, BPER Press Release dated 14 December 2021, FITD Press Release dated 14 February 2022, FITD Press Release dated 10 January 2022, and FITD Press Release dated 16 December 2021. DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

DBRS Morningstar 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 12-month period. DBRS Morningstar'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 Morningstar reviews and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage:

The sensitivity analysis of the relevant key rating assumptions can be found at:

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Andrea Costanzo, Vice President - Global FIG
Rating Committee Chair: Ross Abercromby, Managing Director - Global FIG
Initial Rating Date: July 30, 2021
Last Rating Date: July 30, 2021

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