The ratings reflect Banche Popolari Unite's strong retail franchise in northern and central Italy, sound asset quality, strong liquidity, and adequate capitalization and efficiency levels. BPU has a solid business profile, with both nationwide coverage and regional roots in retail banking. It is the largest "banca popolare" in Italy and ranks among the 10 largest Italian banking groups overall. Standard&Poor's considers the retail and domestic nature of BPU's loan book to be a strength in terms of credit risk. Standard&Poor's does not expect a material deterioration in BPU's asset quality in the coming quarters, notwithstanding higher provisioning needs attributable to the currently weak economic climate. According to pre-merger, pro forma financial data, BPU's profitability is adequate,
