PARIS: Moody's rating agency said on Wednesday that it was putting leading Italian Unicredit bank on credit watch, after the bank announced on Monday a big loss and capital increase.
Moody's said that it had also placed on watch for a possible credit rating downgrade the bank's subsidiaries in other countries, notably in Germany, Luxembourg, Austria, Poland and Slovakia.
Unicredit is the leading bank in Italy and currently has a rating from Moody's of "C" for its financial strength and "A2" for its long-term credit worthiness.
On Monday it announced a third-quarter net loss of 10.461 billion euros ($14.2 billion) owing to write-downs in the value of assets.
The bank said that it would raise capital totalling 7.5 billion euros and would shed 6,150 jobs by 2015.
Moody's said that it took a positive view of the capital increase and also the fact that the bank had a strong position regarding access to short-term cash.
But the agency said that the restructuring of the business would take time and that Unicredit faced a difficult environment and a highly uncertain climate in putting the plan into action.
The warning from Moody's comes amidst great turbulence in Italy where new Prime Minister Mario Monti is taking the first steps with an interim government in relaunching economic reforms.
Comments
Comments are closed for this article.