With Italy facing a potentially deeper and more prolonged recession than we had originally anticipated, we are of the view that the vulnerability of Italian banks to the impact of rising loan losses has increased due to the combined effect of mounting problem assets and reduced coverage of loan loss reserves. Nevertheless, we think it likely that UniCredit SpA's business and financial profiles will remain consistent with our current ratings even after it absorbs the negative impact of what we see as increased credit risk in the Italian economy. We are therefore affirming our 'BBB+/A-2' long- and short-term ratings on UniCredit and its core subsidiary UniCredit Leasing SpA (UniCredit Leasing). The negative outlooks on our long-term ratings on UniCredit and
