Strong local franchise as the largest regional bank in northern Italy Consistent and focused strategy of improving the group's financial profile Sound asset quality at the retail banks Only adequate earnings track record Weak capitalization due to large minority interests and unseasoned revaluations Relatively high exposure to the corporate sector The ratings on Banche Popolari Unite (BPU) reflect the group's strong business profile, which benefits from good penetration rates in the wealthiest regions of Italy; an adequate financial profile characterized by strong liquidity; good revenue-generating capacity; adequate asset quality; and weak capitalization. The group leverages its favorable geographical coverage (mainly in the rich central and northern regions of Italy), loyal customer base, and large deposit base. It combines retail banking
