Today's decision to review the ratings for downgrade reflects Moody's concern regarding (1) the ability of the management team to restore CR Ferrara's profitability and ensure sufficient internal capital generation against the backdrop of a very challenging operating environment; (2) the bank's high stock of problem loans; and (3) its funding flexibilities to reduce dependence on central bank liquidity support. The review will therefore primarily focus on whether -- in the current difficult operating environment -- CR Ferrara's financial fundamentals can be sufficiently improved in a short period of time to reduce the risk of requiring external support .

RATINGS RATIONALE

Relative to its Italian banking peers, CR Ferrara's asset quality is amongst the worst, with problem loans as a percentage of gross loans at 20.3%, as of December 2011. CR Ferrara's Tier 1 capital (which stood at 8.1% at December 2011) remains vulnerable under Moody's adverse scenario .

Given high loan-loss provisions, Moody's notes that CR Ferrara has been loss-making for the last three years. In 2011 CR Ferrara reported a reduced net loss of EUR22million (2010: net loss of EUR58million, 2009: net loss of EUR78million), and whilst we expect its subsidiaries to be now mainly marginally loss-making, its future profitability will depend mainly on credit-expenditure costs. However, given its recently revised macroeconomic forecasts, Moody's is concerned that the bank faces strong headwinds in its restructuring programme, and the review will focus on the bank's progress versus its plans and its ability to adapt its restructuring plans towards a harsher operating environment. In Moody's view, CR Ferrara's management team, has been relatively decisive in restructuring CR Ferrara. However, given the ongoing financial crisis and the weak Italian operating environment, Moody's notes that CR Ferrara has had to amend its restructuring process.

CR Ferrara is a mainly retail funded institution; its other funds currently stem from the European Central Bank, (about 23% at December 2011), with the rest from wholesale market funding. Moody's believes that there is a risk that market access will continue to be restricted for an extended period. As a result, uncertainty regarding when the bank will again be able to fund itself regularly -- and on an economic basis --in the markets adds uncertainty to the restructuring plan and is another credit risk.

Moody's notes that CR Ferrara had undertaken an expansion strategy outside its home region (total assets roughly doubled between 2004-09), including the acquisition of a leasing and factoring company and several newly established local retail banks. Many of these institutions never reached break-even, and since 2009 -- especially under new management -- CR Ferrara has been refocusing on its core activities in its home territory. The intention was initially to sell non-core assets and subsidiaries, but with the crisis, this has been difficult and ultimately few have been sold, many have been consolidated, or are in run-off.

WHAT COULD CHANGE THE RATING UP/DOWN

As indicated by the review for downgrade, Moody's currently does not expect any upward rating pressure. Downward rating pressure on the bank's standalone credit assessment would primarily be driven by the banks success (or lack thereof) of its turnaround plan, its ability to improve profitability and clean up its balance sheet, thus protecting it against further asset quality deterioration.

CR Ferrara's Ba3 deposit ratings do not currently incorporate any uplift from systemic (government support), from the bank's standalone credit strength. Therefore, any change in the BFSR will likely have an impact on the deposit ratings.

Depending on Moody's assessment of the bank's financial fundamentals, the rating agency says that CR Ferrara's ratings might be downgraded by several notches.

LIST OF AFFECTED CREDIT RATINGS

Bank Deposits Ba3 -- on review for downgrade

Bank Financial Strength D- -- on review for downgrade

Baseline Credit Assessment ba3 -- on review for downgrade

Adjusted Baseline Credit Assessment ba3 -- on review for downgrade

Issuer Rating -Dom Curr Ba3 -- on review for downgrade

Senior Unsecured MTN -Dom Curr (P)Ba3 -- on review for downgrade

Subordinate MTN -Dom Curr (P)B1 -- on review for downgrade

Jr Subordinate MTN -Dom Curr (P)B2 -- on review for downgrade

Tier III MTN -Dom Curr (P)B1 -- on review for downgrade

METHODOLOGY USED

The principal methodology used in these ratings was "Moody's Consolidated Global Bank Rating Methodology" published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

CR Ferrara is headquartered in Ferrara, Italy. As of December 2011, it had total assets of EUR7.3 billion.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

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Christina Sterr Analyst Financial Institutions Group Moody's Italia S.r.l Corso di Porta Romana 68 Milan 20122 Italy Telephone:+39-02-9148-1100Johannes Wassenberg MD - Banking Financial Institutions Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Italia S.r.l Corso di Porta Romana 68 Milan 20122 Italy Telephone:+39-02-9148-1100(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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