CA Italia, Moody’s: use badwill Creval for adjustments and to facilitate NPL sales

CA Italia, Moody’s: use badwill Creval for adjustments and to facilitate NPL sales
CA Italia, Moody’s: use badwill Creval for adjustments and to facilitate NPL sales

(Teleborsa) – Moody’s Investors Service today confirmed the Baseline Credit Assessment of Credit Agricole Italy at ba1, the Adjusted BCA at baa1, long-term deposit ratings at Baa1, as well as other valuations. The outlook on long-term deposit ratings remains stable. The rating agency has also updated all ratings and ratings of Creval, aligning them with the ratings and assessments of CA Italia. In particular, the BCA of Credito Valtellinese it went to ba1 from b1, the BCA adjusted to baa1 from b1, the long-term deposit ratings to Baa1 from Ba3. Moody’s ratings update follows theacquisition of Credito Valtellinese by Credit Agricole Italia, is explained in a note.

Confirmation of CA Italia’s standalone BCA comes from the fact that Moody’s analysts believe that theacquisition of Creval will have no material impact on CA Italia’s credit profile, which will not lead to a material deterioration in the asset quality and capitalization of the French bank’s Italian branch in the short term. At the same time, the integration of Creval will strengthen CA Italia’s presence and operations in Northern Italy, which could improve its profitability in the medium term.

The combined entity, the note from Moody’s Investors Service continues, will present a NPL pro forma ratio of approximately 6% based on the data reported at the end of 2020, close to the report recorded by CA Italia on the same date. Furthermore, CA Italia could use the significant amount of badwill (approximately 1 billion) deriving from the acquisition to set aside further loan adjustments and / or to facilitate the sale of problem loans, thus offsetting the expected increase in non-performing loans linked to Covid in the next 12-18 months.

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