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Investing.com -- S&P Global Ratings has raised its credit ratings on Banca Popolare di Sondrio (BIT:BPSI) (BPS) to ’BBB/A-2’ from ’BBB-/A-3’, reflecting the expected full integration of the bank into BPER Banca over the next 12 months.
The ratings agency also upgraded BPS’s long-term resolution counterparty credit rating to ’BBB+’ from ’BBB’, its senior non-preferred debt ratings to ’BBB-’ from ’BB+’, and its subordinated debt ratings to ’BB+’ from ’BB’. The outlook is stable.
S&P maintained its ’BBB/A-2’ ratings on BPER Banca with a stable outlook.
Following a tender offer, BPER now owns approximately 58.5% of BPS and plans to call a shareholder meeting to vote on merging the two institutions. S&P believes there is a high likelihood the merger proposal will receive the necessary two-thirds majority vote, despite BPER’s ownership being below that threshold.
The ratings agency now considers BPS a core strategic subsidiary of BPER and has aligned its ratings accordingly.
S&P believes the acquisition will strengthen BPER’s market positions and support its business growth strategy, citing strong strategic rationale, geographic and business fit, and limited overlaps. The agency views BPER’s expectation of €290 million in synergies by 2027 as achievable.
While the acquisition will expand BPER’s exposure to corporates and small and midsize enterprises, S&P does not expect it to materially affect BPER’s asset quality. The capital impact is considered manageable, likely 30-40 basis points in 2027 compared with pre-acquisition expectations.
S&P identifies preserving BPS’s franchise and customers as BPER’s main challenge, noting BPS’s strong position in Lombardy, one of Italy’s wealthiest regions, and its longstanding ties with local businesses and communities.
The stable outlook for both banks reflects S&P’s view that BPER will remain resilient over the next couple of years while maintaining its solid capital base and asset quality, and that BPS’s acquisition and operational integration will proceed smoothly without major execution risks.
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