...Coverage of nonperforming credit lower than the system average. Outlook: Stable Our outlook on UBI is stable. This reflects our expectation that the bank will be able to improve its risk-adjusted capital (RAC) ratio before adjustments to 5.5%-6.0% over the next two years thanks to increasing internal capital generation. It also reflects our view that UBI's nonperforming exposures (NPEs) ratio will gradually decline, remaining slightly below the domestic average in the next 24 months. We could raise the ratings on UBI if the bank accelerated its NPEs reduction and its NPEs coverage converged more closely with international standards without affecting its capital position. This could occur if its net NPEs to total-adjusted capital converged toward 50%-40%, compared with 110% as of June 2017, more in line with what we expect for higher rated peers. Although unlikely at this stage, we would downgrade UBI if we saw its combined capital and risk profile worsening. This could be due to unanticipated...
