Today's decision to review the ratings for downgrade reflects Moody's concern about the bank's deteriorating asset quality and the adequacy of its provisions for these assets, against the backdrop of a very challenging operating environment in Italy. The concerns are further based on the bank's funding flexibility, with a significant dependence in central bank funding possibly being exacerbated by the maturity of its wholesale funding in 2014. The review will therefore focus on the bank's asset quality development and its ability to build sufficient loan loss provisions against non-performing assets, as well as its longer-term funding plans.

RATINGS RATIONALE

The banks' asset quality is weak and below average, with problem loans as a percentage of gross loans at 14.3% at June 2012. In particular, the bank's coverage of the different Italian problem-loan categories is very weak and has been falling over recent years. Following the capital increase of EUR180 million (about 10% of current total tangible common equity) in the first half of 2012, the bank's capital provides a sufficient buffer under Moody's central scenario, but renders the bank vulnerable to losses under the rating agency's adverse scenario. The bank's Tier 1 ratio stood at 8.4% at June 2012, compared with a system average of about 10%.

The bank is -- and has always been -- mainly retail funded; its other funds currently come from the European Central Bank (about 10% as of June 2012). The rest stems from wholesale market funding and Moody's believes that there is a risk that market access will continue to be restricted and costly 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 is an additional rating driver.

Macroeconomic data and the outlook for Italy was revised down from Q2 2012 to now. Unemployment increased from 10.1% in May 2012 to 10.8% in September 2012 (as of ISTAT, the Italian institute for statistics). According to Moody's most recent forecast from November 2012, Italian GDP is expected to fall between 2.0% and 3.0% in 2012 (instead of a 1-2% decline forecast in April 2012), and between 1% and 0.0% in 2013 (rather than -0.5% to +0.5% forecast in April 2012).

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 stem from further asset quality deterioration, coupled with insufficient profitability to allow an improvement in the coverage ratio of its non-performing assets. The bank's Ba1 debt and deposit ratings currently incorporate one notch of uplift due to 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.

LIST OF AFFECTED CREDIT RATINGS

Bank Deposits Ba1 -- on review for downgrade

Bank Financial Strength D -- on review for downgrade

Baseline Credit Assessment ba2 -- on review for downgrade

Adjusted Baseline Credit Assessment ba2 -- on review for downgrade

Senior Unsecured -Dom Curr Ba1 -- on review for downgrade

Subordinate -Dom Curr Ba3 -- on review for downgrade

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

Tier III MTN -Dom Curr (P)Ba3 -- 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.

Banca della Marche is headquartered in Jesi, Italy. As of June 2012, it had total assets of EUR23.9 billion.

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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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