Fitch downgrades seven mid-sized Italian banks

File photo shows a branch of Banca Popolare di Vicenza in Italy.

Fitch rating agency has downgraded the long-term ratings of seven mid-sized Italian bankers as recession in the eurozone’s third-biggest economy continues unabated. 

(PressTV) Among the banks cut on Tuesday were Banca Popolare di Milano, Banca Carige and Banca Popolare di Vicenza, Reuters reported.

Most banks remained within the investment grade category, but four of them – Banca Carige, Banca Popolare di Vicenza, Credito Valtellinese and Veneto Banca – slipped to BB -plus from BBB.

Other banks’ ratings were affirmed, including Banca Popolare dell’Emilia Romagna at ‘BBB’ and Credito Emiliano at ‘BBB+’. The outlook for all nine banks is negative.

Italian banks have come under high pressure in the wake of the widening euro zone debt crisis, and their large stock of impaired loans plus reliance on institutional funding have made them acutely vulnerable.

Banca Popolare di Milano posted a net loss of 131.3 million euros in the first half, as new management made a writedown of 239.4 million euros as part of a business plan to improve profitability.

Fitch said it currently expects Italian gross domestic product (GDP) to contract by 1.9 percent in 2012 and to show zero growth in 2013.

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