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Moody's assigns P-2 short-term deposit ratings to Intesa Sanpaolo SpA, London Branch

June 26, 2014

Moody's Investors Service has today assigned local

and foreign currency Prime-2 short-term deposit ratings to Intesa

Sanpaolo SpA, London Branch.


The rating was assigned to Intesa Sanpaolo SpA through its London Branch.

The rating is in line with the Prime-2 short-term rating of Intesa

Sanpaolo SpA.

Due to an internal administrative error, the French certificate of

deposit program of Intesa Sanpaolo, London Branch, had been initially

rated under the name of Intesa Sanpaolo SpA. This program is now

correctly classified under Intesa Sanpaolo's London branch. The rating of

the program is not affected by this correction.

The below ratings rationale and sensitivity refer to Intesa Sanpaolo Spa.

Intesa Sanpaolo Spa's Baa2 senior debt and deposit ratings reflects the

incorporation of one notch of uplift from government (systemic) support,

from the bank's baa3 unsupported credit assessment. The unsupported

credit assessment reflects the rating agency's view that capital adequacy

continues to provide a considerable buffer to offset the bank's

profitability and asset quality pressures. Furthermore, the stable

outlook on the D+ Bank Financial Strength Rating reflects Moody's

expectations of a gradual recovery in Intesa's profitability from the low

point in 2013 and a stabilisation of asset quality from 2015.


Moody's could change the outlook to positive in the event of an

improvement in net profitability, broadly in line with business plan

targets, and an easing of problem loans as a proportion of equity and

loan loss reserves. Moody's could upgrade the deposit rating could be

upgraded if the bank's unsupported credit assessment is raised or if

Italy's sovereign creditworthiness improves.

Conversely, Moody's could lower Intesa's unsupported BCA if (1) the bank

is unable to return to net profit generation in 2014; and (2) there is

significant further deterioration of the ratio of problem loans to equity

and loan loss reserves. Moody's could downgrade Intesa's long-term

deposit and debt ratings as a result of a downgrade of the Italian

government bond rating.

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Source: EMBIN (Emerging Markets Business Information News)

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