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Italian banks downgraded by S&P rating agency

The US-based credit ratings agency said that the downgrades occured because the recession and economic downturn were becoming more prolonged than expected.

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15 Italian banks were downgraded Monday by S&P rating agency. (Olivier Morin/AFP/Getty Images)

Fifteen Italian banks were downgraded Monday by Standard and Poor's, while 15 other Italian lenders had their ratings affirmed.

The US-based credit ratings agency said that the downgrades occurred because the recession and economic downturn were becoming more prolonged than expected.

S&P said that problem assets among Italian banks are set to grow to 218 billion euros at the end of 2013, up from 166 billion euros at the end of 2011.

The Wall Street Journal noted that major banks UniCredit and Intesa Sanpaolo had their ratings affirmed rather than reduced, though both saw downgrades in February this year.

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Banca Carige SpA, Banca Popolare dell'Alto Adige and Unione di Banche Italiane, among others, saw their ratings further reduced, said the Press Association.

S&P had already lowered its rating on 34 banks in February, pointing to the country's financial vulnerability and likelihood of lower earnings.

Marketwatch said that the ratings firm expects Italy's gross domestic product to fall 2.1 percent in 2012.

http://www.globalpost.com/dispatch/news/business/120806/italian-banks-downgraded-sp-rating-agency