UNICREDIT SPA, Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA were among 34 Italian financial firms downgraded by Standard and Poor’s, after the credit-ratings agency reduced the nation’s grade last month.

UniCredit, Italy’s biggest bank, and number two Intesa had their long-term ratings lowered to BBB+ from A, the agency said yesterday in a statement. Monte dei Paschi, the number three bank, was reduced to BBB from BBB+. All three have a negative outlook, the agency said. Italy’s credit rating was cut two levels to BBB+ from an A on January 13th as the agency said European leaders’ struggle to contain the region’s debt crisis would complicate the country’s efforts to finance borrowings. The agency yesterday revised its banking industry country risk assessment, known as Bicra, for Italy to group four from group three, citing mounting risks.

“Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” the agency said. “We anticipate persistently weak profitability for Italian banks in the next few years.” – (Bloomberg)