Corporate Credit Rating for FINECOBANK BANCA FINECO S.P.A.: A2- (Affirm)

modefinance published on its CRA website the Corporate Credit Rating (Affirm) of FINECOBANK BANCA FINECO S.P.A. and the rating assigned to the entity is A2- (Affirm). 

It is a very good bank with very good capability of repaying financial obligations.

The reasons for the review are the following:

• In July 2019, the former main shareholder Unicredit S.p.A. sold its stake in FinecoBank S.p.A.. This event can represent for the bank an important opportunity to confirm its independence, both operational and strategic, in Italian banking system. FinecoBank increased its floating share but this is a great opportunity for the bank led by the CEO Alessandro Foti, a prominent key figure in the financial industry management;
• FinecoBank S.p.A. disclosed 2019 half-year accounts. The overall financial and economic situation of FinecoBank is good and constant through all the considered period. The capital adequacy is extremely good compared to the industry and far above the minimum requirement of ECB. The profitability is quite high even if ROE has slightly decreased. The asset quality still remains at an adequate level. The general situation of the bank is good.

modefinance’s rating is also based on the following key elements:

• The bank's assets portfolio is composed mainly of financial assets that represent 42.78% of total earning assets. Most of the earning assets are Hold-To-Collect instruments (98.58%), showing the long-term horizon of the financial assets. The financial assets of HTC portfolio are composed of debt instruments (10,443 million EUR) and an important, but residual part of exposure to customers (3,405 million EUR), mostly private and families’ loans;
• Taking into account the 2018 annual financial figures (updated in August 2019), FinecoBank’s position confirms that it is one of the most profitable banks in Italy. Compared to peer group, all the considered parameters are at a good level. The entity holds a relevant amount of regulatory capital required by the supervisory bank authority;
• FinecoBank was established in 1999, so it’s a very young institution but we have to consider the business model and the reference market, since Fineco is a pioneer in the online banking market;
• FinecoBank overperformed the peer group in all the considered areas: the rated entity recorded very good values in terms of size, profitability and asset quality. The peer group has improved in the last three years in asset quality, while still remaining stable in the other considered area;
• Christine Lagarde has been appointed as new President of the European Central Bank. She is the former General Manager of the IMF and since she run it within an innovative and visionary leadership, most European Institutions and commissions are optimistic, nevertheless regarding the continuation of Mario Draghi’s work, her predecessor;
• Despite the progressive global economic slowdown, characterized by uncertainty and slowing consumption trends, FinecoBank S.p.A. shows an increase in total assets. Country risk has a negative impact on the bank;
• Italian government crisis has led to several tensions and uncertainties, which could have a negative impact on the overall financial industry.

The present Corporate Credit rating is issued by modefinance under EU Regulation 1060/2009 and following amendments.

The present rating is unsolicited: the rated entity and/or related third parties have not participated in the rating process and modefinance has no access to accounts or other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available on CRA website.

The present Corporate Credit Rating is issued on MORE Score Methodology for banks 1.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available at this link.

For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance, however, is not in a position to guarantee the accuracy of that information. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation.

The Rated Entity or Related Third Party has not purchased ancillary services from modefinance. The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Eva Vocci – Head Analyst
eva.vocci@modefinance.com
+39 040 3756740

Christian Raimondo – Assistant Analyst
christian.raimondo@modefinance.com
+39 040 3756740

Pinar Dilek – Responsible for Rating Approval
pinar.dilek@modefinance.com
+39 040 3756740