...February 17, 2020 MILAN (S&P Global Ratings) Feb. 17, 2020--S&P Global Ratings today said that it views positively UBI Banca's efforts to tackle what we see as its main weaknesses--namely its modest profitability and efficiency--compared to peers. We note that the bank will increase its initiatives to adapt to the digital world, aiming at improving its internal processes and focusing on more value-added services. UBI Banca is targeting to increase its returns on tangible equity to 8.3% in 2022, from 3.3% as of December 2019, via a combination of de-risking, digitalization, and cross-selling. We consider this target ambitious given economic conditions in Italy. This is because a large part of the bank's planned improvement in its profitability is linked to a meaningful reduction of cost of risk to 46 basis points (bps) in 2022 from 87 bps at year-end 2019. We think that sluggish economic growth and UBI's low nonperforming exposures coverage, at 46% as of December 2019, will maintain UBI's...
