Research Update: UniCredit SpA Ratings Affirmed On Sufficient Capital Cushion; Outlook Remains Negative

On Oct. 23, S&P Global Ratings affirmed its 'BBB/A-2' ratings on Italy and revised the outlook to stable from negative. While we consider this a positive development, we still see a risk that the cyclical economic recovery in the countries in which UniCredit operates could be substantially weaker than we currently anticipate. We continue to assess that the group has sufficient buffers to cushion the pressure on earnings we expect over the next two years, under our base-case scenario. We are therefore affirming the 'BBB/A-2' ratings on UniCredit. We are maintaining the negative outlook, primarily to reflect the risk that the economic rebound might take longer than currently expected, which would imply a more negative effect on UniCredit's asset quality

...- On Oct. 23, S&P Global Ratings affirmed its '###/A-2' ratings on Italy and revised the outlook to stable from negative. - While we consider this a positive development, we still see a risk that the cyclical economic recovery in the countries in which UniCredit operates could be substantially weaker than we currently anticipate. - We continue to assess that the group has sufficient buffers to cushion the pressure on earnings we expect over the next two years, under our base-case scenario. - We are therefore affirming the '###/A-2' ratings on UniCredit. - We are maintaining the negative outlook, primarily to reflect the risk that the economic rebound might take longer than currently expected, which would imply a more negative effect on UniCredit's asset quality and capital....

Research Update