Fitch upgrades Iccrea

Fitch Ratings said it raised its issuer default rating and senior preferred debt rating for Iccrea Banca SpA to BB+ from BB. The agency also hiked the senior non-preferred debt to BB from B+ and the subordinated debt to BB- from B

The rating boost is part of the upgrade for Gruppo Bancario Cooperativo Iccrea. Fitch cited an improvement in asset quality and improved profitability for the group. Iccrea Banca is the central institution.

Icrrea Banca's senior preferred debt is rated in line with the bank's long-term IDR because we expect it to use senior preferred debt to meet its minimum requirement for own funds and eligible liabilities, the agency said.

The senior non-preferred notes are rated a notch below IB's long-term IDR. The lower rating reflects the risk of below-average recoveries from the use of senior-preferred debt to meet resolution buffer requirements, and the combined buffer of additional tier 1, tier 2 and SNP debt being unlikely to exceed 10% of risk-weighted assets, Fitch noted.

The agency rates the tier 2 subordinated debt is rated two notches below the bb+ viability rating to reflect the prospects of poor recoveries in resolution given the notes' subordination, Fitch explained.

The outlook is stable.

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