Fitch affirms Banco BPM at BBB-: off rating watch positive

Fitch affirms Banco BPM at BBB-: off rating watch positive

In a significant development for the Italian banking sector, Fitch Ratings has affirmed Banco BPM's credit rating at BBB-, maintaining a positive outlook. The move reflects the financial health and stability of Banco BPM, despite the ongoing uncertainty surrounding the proposed merger with UniCredit [1].

The decision comes amidst the backdrop of UniCredit's withdrawal of its bid for Banco BPM due to unmet conditions related to the golden power authorization [1]. This authorization, which is supported by BPM's leadership, has restricted UniCredit's ability to communicate effectively with BPM shareholders. The continued uncertainty surrounding the golden power provision has led to a delay in the resolution process, ultimately resulting in UniCredit's decision to withdraw its offer [1].

Despite the setback, Fitch Ratings has taken into account Banco BPM's strong financial position and the potential long-term benefits of consolidation in the Italian banking sector. The agency believes that the current rating reflects the bank's ability to navigate through the current challenges and maintain its financial stability.

UniCredit's CEO, Andrea Orcel, emphasized that the bank's priority is the implementation of its transformation strategy, which is reportedly exceeding expectations. Mergers and acquisitions will be considered only if they serve to further enhance this strategy and contribute to value creation [1].

In light of these developments, Banco BPM continues to face challenges, but its strong financial fundamentals and the positive outlook from Fitch Ratings provide a measure of reassurance for investors and stakeholders. The bank's ability to maintain its BBB- rating, despite the ongoing uncertainty, underscores its resilience and stability in the current market conditions.

References:
[1] https://www.retailbankerinternational.com/news/unicredit-pulls-bid-banco-bpm/