Standard & Poor’s cut the rating of Banca Popolare di Milano from BB to BB- yesterday (Wednesday) and put it on CreditWatch negative after the resignation of the bank’s CEO, Piero Montani, on 31 October.

Banca Popolare di Milano

S&P said that the resignation was the latest development suggesting the Italian bank is facing more challenges in addressing corporate governance issues than the rating agency had previously expected.

“We consider that the persistence of these challenges, which affect BPM’s management stability and strategic focus, increases the risks in its financial profile,” said S&P.

“The CreditWatch placement reflects our views on the likelihood of the continuing implications of BPM’s corporate governance challenges on its business and financial profiles,” it added.