S&P lowers credit ratings on 18 Italian Banks
Ratings agency sees Italian economy still struggling in 201424 July, 20:14
Another lender, Agos Ducato, was downgraded two notches from BB+ to BB-.
Intesa Sanpaolo and UniCredit were not included in the downgrade by the agency, which earlier this month downgraded Italy's sovereign rating to BBB from BBB+ with a negative outlook.
Both moves will likely increase borrowing costs for the banks involved as well as the government.
Standard & Poor's said its concerns stem from the negative outlook for the Italian economy.
"In our opinion, Italian banks have to operate in a situation with increasing risks to the economy, which leaves them more vulnerable to a longer and deeper recession...than previously expected," said the rating agency in a statement Already in recession, Italy's gross domestic product (GDP) will contract by 1.9% in 2013, said the agency.
This means GDP will have dropped by fully 9% in real terms from 2007 levels by the end of this year, S&P said, adding that it did not expect to see "this trend reverse significantly in 2014".