Moody’s views Banca del Mezzogiorno negatively

Moody’s Investors Service said it changed Banca del Mezzogiorno - MCC SpA’s outlook to negative from rating under review and confirmed its ratings.

The agency started the review for downgrade on Dec. 2.

“The ratings and assessments of Banca del Mezzogiorno were confirmed mainly because the bank promptly addressed the requests from the Bank of Italy to increase its regulatory capital by issuing €70 million tier 2 debt and developed a public business plan which includes a material capital strengthening vetted by its 100% shareholder, state-owned entity Invitalia SpA,” Moody’s said in a press release.

“The negative outlook reflects the uncertain operating environment in Italy and the challenges that the bank will be facing in growing its loan book in the weakest regions of southern Italy,” the agency said.

Additionally, Moody’s noted the negative outlook reflects the negative outlook on Italy’s rating.

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