DBRS Morningstar Assigns BBB (low)/BB (high) Ratings to BPER’s Senior Non-Preferred Debt and Subordinated Debt; Stable Trend

DBRS Ratings GmbH (DBRS Morningstar) assigned BBB (low) and BB (high) ratings to BPER Banca SpA’s (BPER or the Bank) Senior Non-Preferred Debt and Subordinated Debt. DBRS Morningstar expects that any future issuance by BPER of Senior Non-Preferred Debt and Subordinated Debt, under the Bank’s EUR 6 billion Euro Medium Term Note Programme would be rated at these levels. The BBB (low) and BB (high) ratings are one notch and two notches respectively below BPER’s BBB Long-Term Issuer Rating and Long-Term Senior Debt rating, in line with the Framework set out in DBRS Morningstar’s “Global Methodology for Rating Banks and Banking Organisations”, dated 23 June 2022.

RATING DRIVERS

Any positive change in the Bank’s Intrinsic Assessment (IA) would have positive implications for the Senior Non-Preferred Debt and Subordinated Debt ratings. An upgrade of BPER’s IA would require a material improvement in the Bank’s underlying profitability and continued progress in asset quality while maintaining sound capital buffers.

Similarly, any negative change in the Bank’s IA would have negative implications for the ratings. A downgrade of BPER’s IA would likely be driven by a significant deterioration in the Bank’s asset quality or capitalisation. A failure in the management of execution risks stemming from recent acquisitions could lead to a downgrade.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

There were no Environmental/ Social/ Governance factors that had a significant or relevant effect on the credit analysis.

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 https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.

Notes:
All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (23 June 2022) https://www.dbrsmorningstar.com/research/398692/global-methodology-for-rating-banks-and-banking-organisations. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (17 May 2022) https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.

The sources of information used for this rating include Morningstar Inc. and Company Documents, and BPER’s EMTN Programme Documentation (10 November 2021). DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

This rating concerns a newly issued financial instrument. This is the first DBRS Morningstar rating on this financial instrument.

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.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar's outlooks 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: https://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage: https://www.fca.org.uk/firms/credit-rating-agencies.

The sensitivity analysis of the relevant key rating assumptions can be found at: https://www.dbrsmorningstar.com/research/402378

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 28, 2022
Last Rating Date: July 28, 2022

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