CRIF obtains registration as a Credit Rating Agency

Leader in Italy for credit management and lending solutions, CRIF issues credit ratings on Italian companies, which will be valid and recognized in all European Union countries.
CRIF is pleased to announce today that it has obtained Credit Rating Agency (CRA) registration from CONSOB and ESMA (the European Authority supervising securities and markets), in accordance with the EC Regulation 1060/2009 dated 16 September 2009, which regulates credit rating agency operations on an EU level.

The registration means that CRIF ratings can be used and are valid in all European Union countries. This is therefore an important recognition of the quality and robustness of CRIF methodologies, processes and organization, as well as compliance with the strict requirements of the September 2009 European Regulation, in particular in terms of the independence, objectivity and transparency of the assessments.

These values have been translated into a Code of Conduct and Internal Policy that CRIF has adopted in order to increase the knowledge and trust of operators in terms of the issued ratings, as well as to ensure the management and removal of any existing or potential conflicts of interest that may influence CRIF’s rating activities or activities of the subjects involved.
Furthermore, CRIF has set up a committee including participation from independent members that have held important positions within the financial sector, which has the task of controlling and supervising compliance with all the requirements of the European Regulation, and is independent from the rating activities of the company.

“We are very proud of having obtained registration as a credit rating agency,” commented Carlo Gherardi, CRIF CEO, “This will further strengthen our position as market leader in credit management services, an area which CRIF has been significantly investing in for years through the quantitative and qualitative improvement of information sources and the strengthening of the analytical skills and financial expertise necessary for an accurate assessment of the credit risk of businesses; from sole traders to large companies. What’s more, the rating market was in need of additional players, particularly in Europe.”

The evaluations of companies carried out by CRIF are based not only on the application of rigorous quantitative models, but also on the expertise and professionalism of its Rating Department analysts, Rating Committee, and a team of highly qualified specialists responsible for the supply, improvement and quality control of the information.

CRIF ratings are the opinion of CRIF in relation to the creditworthiness of a company, and more specifically, on its ability to fully repay its financial commitments on time in the medium-term. The analyses carried out within the CRIF Rating Department aim to widen the view of a company, assessing its competitive positioning in its sector/industry and, in the case of a company which is part of a corporate group, assessing any impacts on the company rating from an overall analysis of the group.
Ratings can therefore be distinguished from credit scoring in that as well as incorporating quantitative elements, they are the result of an assessment process carried out by a team of analysts with proven experience.
CRIF ratings are summarized by 14 alpha-numeric classifications (from A1, the best, to C3, the worst, as well as a classification for companies that have already defaulted), and are accompanied by a report illustrating the details of the assessment carried out on the company.

Before issuing ratings to its clients that have subscribed to the service, CRIF informs the assessed company of the rating. This is mandatory under CRA legislation so that the rated company has the possibility of checking the accuracy of the data, and identifying any material errors in the information used to calculate the rating.

“Getting our CRA activities underway and obtaining CRA registration,” continued Carlo Gherardi, “represent very important steps in CRIF’s growth strategy in a ‘core’ field, namely business credit risk assessment services. This is part of a program of growth and continuous investment which, in June 2009, led to the acquisition of the Italian subsidiary of Dun & Bradstreet, the most important operator on a global level in the field of business information, and the formation of a highly specialized company, CRIBIS D&B, within the CRIF Group.”

Moreover, the investments made and data acquired in relation to companies means that CRIF can now offer the market completely distinctive services, bringing together unique information assets, robust methodologies and analyses, outsourced engineered systems, and Business Process Outsourcing, software and consultancy services, which are indispensable to financial institutions for the improvement of business management processes throughout the entire credit lifecycle.
In particular, the unique wealth of information held by CRIF on companies comes from a variety of sources, and the information is twofold: credit information, thanks to EURISC (the CRIF credit reporting system, which includes in its 78 million credit lines more than 8 million credit lines held by businesses, with significance levels of over 90%), and business information, with CRIBIS iTRADE (containing the largest amount of data on the payment behavior of Italian and international companies, with over 26 million payment experiences relating to the Italian market).

“CRIF has invested, and will continue to invest significantly in its methodologies, tools and business assessment processes,” concluded Carlo Gherardi, “because we are sure that there will be a growing need within various segments of the market for independent and accurate evaluations of businesses; from SMEs to large-scale companies. The external credit rating market, which is changing significantly, has finally opened up to new professional operators that have been authorized by a long and rigorous registration procedure. We are very pleased and proud to be a recognized and well-regarded player in this market.” 

CRIF has also been represented on the EACRA (European Association of Credit Rating Agencies) board since December 2010. The association brings together European and non-European credit rating agencies in order to provide support to members in terms of market and legislative developments, working with regulators on the development of a new regulatory framework and facilitating an exchange in international experience and alternative business models to those of the Big 3.