OREANDA-NEWS. Fitch Ratings has affirmed Credito Fondiario S.p.A.'s (CF) Italian Residential and Commercial Primary Servicer Ratings at 'RPS3+' and 'CPS3+', respectively.

The affirmations reflect CF's more stable environment, following a period of significant change, which provides Fitch with comfort around the servicer's business and operational continuity.

The average tenure of senior management members remains relatively low, with the majority joining the company following the change of ownership in October 2013. However, the new joiners bring a wide experience to CF and have provided the servicer with a clear strategic direction, while the COO, with over 13 years' company experience, provides continuity of knowledge.

Following the change in ownership, the mortgage retail area was closed and CF's organisational structure has been adapted to reflect this. Although this resulted in a significant reduction in staff numbers, Fitch considers the current structure to be appropriate for the servicer's business needs. The average company and role experience among staff remains high at 24 years and ten years, respectively, providing comfort around the capability of the current team.

The servicer ratings also reflect CF's continued focus on staff support and development, which remained good throughout the transition period; with regular meetings between senior management and staff to ensure clear communication and targeted change management training. The average number of training hours in the 12 months to end-June 2014 was reported at 23.5 hours per employee, which compares well with previous years but remains lower than rated peers.

The ratings take into account that CF does not benefit from the support of a rated parent company, with the level of financial support provided by the new owners yet to be fully demonstrated. As a standalone company, the servicer has consistently reported losses over the past few years, although liquidity ratios have remained positive. Fitch expects the company's restructure and the signing of new business deals in 2H14 to stabilise the financial position.

At end-June 2014, the servicer was responsible, in various capacities, for administration and/or reporting on a total of 24 deals, excluding balance sheet loans; up from 19 at end-March 2013. The total portfolio volume for which CF is involved in some capacity has risen to EUR4.4bn from EUR3.9bn, with the number of loans under management increasing to 409,312 loans from 296,778. Fitch considers this portfolio growth positive for the sustainability of the business.

CF acts as primary servicer on six residential and commercial portfolios (March 2013: seven) consisting of 1,454 loans (5,161 loans) with a total value of EUR640m (EUR2.2bn).

Fitch employed its global servicer rating criteria in analysing the servicer's operations and financial condition, including a comparison against similar Italian servicers as part of the review process.