We view positively the €1 billion capital increase that Italy-based Unione di Banche Italiane (UBI) announced. However, preprovision profitability deteriorated beyond our expectations in 2010 and no longer supports the current ratings. We are affirming our 'A/A-1' ratings on UBI. The negative outlook primarily reflects the bank's weak profitability. On May 6, 2011, Standard&Poor's Ratings Services affirmed its 'A/A-1' long- and short-term counterparty credit ratings on Unione di Banche Italiane Scpa (UBI). The outlook is negative. The affirmation reflects our view that the bank will maintain a sound level of capital after it carries out its announced €1 billion capital increase. It also factors in our expectations that the bank will gradually improve asset quality in the next
