Allegria!
FITCH DOWNGRADES BANCA POPOLARE DI INTRA TO 'BB'
Fitch Ratings-London/Milan-13 June 2006: Fitch Ratings has today downgraded Italy-based Banca Popolare di Intra's ("Intra") Issuer Default rating ("IDR") to 'BB' from 'BBB-' (BBB minus), Individual rating to 'D/E' from 'D' and Short-term rating to 'B' from 'F3'. The IDR and Short-term ratings are removed from Rating Watch Negative ("RWN"). At the same time the agency has affirmed Intra's Support rating at '3'. A Stable Outlook is assigned as the IDR is now at its support floor.
The downgrade of the bank's IDR reflects an increasing risk that the expected acquisition of Intra by another Italian cooperative will be materially delayed. Fitch's expectations that Intra would be acquired had underpinned the bank's IDR at investment-grade level since the downgrade of Intra's IDR to 'BBB-' ('BBB minus') and Short-term rating to 'F3' and their placement on RWN in February 2006. The ratings were put on RWN following large loan loss provisions as a result of the bank's exposure to the defaulted Finpart.
In Fitch's opinion, the delay in the acquisition process increases the risk faced by Intra given its significantly weakened financial situation as a result of losses stemming from Finpart. Intra had originally expected to receive binding offers from prospective acquirers by early June with the transaction to be approved by a shareholders' meeting in late July. However, the bank has had to postpone the final terms for the binding offers without fixing a new date as it plans to resolve a claim presented by the trustees of the defaulted Finpart first. A decision on this case is expected by 23 June, following which Intra will set a new timetable for the acquisition process.
Despite this delay, Fitch still considers an acquisition of Intra by on one of the four large regional cooperative banks (Banco Popolare di Verona e Novara (rated 'A+'/'F1'/'B'/'3'), Banca Popolare di Vicenza ('A-' (A minus)/'F2'/'C'/'3'), Veneto Banca ('A-' (A minus)/'F2'/'B/C'/'3') and Credito Valtellinese) very probable. Once a binding offer has been presented, Fitch will review Intra's ratings with the likely result of placing Intra's IDR and Short-term rating on Rating Watch Positive pending the completion of the transaction.
The downgrade of Intra's Individual rating reflects further deterioration of the bank's capital adequacy and asset quality. Intra reported a further EUR10 million net loss in Q106 as a result of a EUR25m provision against legal risks after its FY05 EUR113m net loss. Intra's losses have depleted its equity, demonstrated by its tier 1 capital ratio reaching c.5.4% at end-March 2006, which Fitch considers insufficient given the bank's large stock of impaired loans. Intra's reputation and corporate governance have also suffered from recent events as the bank has, since April 2006, lost six of its 13 board members, including the chairman, and the general manager.
Intra is a small cooperative bank with a strong local franchise. It operates through distribution network covering a number of prosperous provinces in Piedmont and Lombardy, benefiting from long-standing relationships with local families and small- and medium-sized enterprises.
La mia ipotesi era che l'andamento opposto all'inizio delle contrattazioni fosse dovuto alla vendita di azioni sul mercato per comprare CV.
