S&P downgrades 15 banks
Palestinian government workers wait in line to withdraw money for their salaries from a bank machine at the Palestine Bank in Gaza City, on Sunday, June 4, 2006. (AP Photo/Khalil Hamra)
Published Monday, August 6, 2012 6:43AM EDT
MILAN, Italy -- Standard & Poor's on Monday affirmed the ratings 15 of Italy's biggest banks, and has cut the ratings on 15 more lenders.
The U.S. credit ratings agency warned that Italy's recession will be potentially deeper and more prolonged than previously thought. It added that while problem assets were mounting, many banks had reduced provisions for loan losses, making them more vulnerable.
Investors are concerned that recession-hit Italy will find it more and more difficult to handle its debt burden -- about 123 per cent of its C1.58 trillion ($1.93 trillion) gross domestic product -- and have been demanding higher interest rates on its bonds.
The ratings of UniCredit SpA and Intesa Sanpaolo SpA were confirmed by S&P. They were among 34 banks that had their S&P ratings downgraded in February due to the country's financial vulnerability and expectations of lower earnings.
Banca Carige SpA, Banca Popolare dell'Alto Adige and Unione di Banche Italiane, among others, also saw their ratings reduced further.