Strong franchise in Italy, Austria, Poland, Central and Eastern Europe, and the German State of Bavaria. High business and geographic diversification. Sound and well-balanced funding base. Weaker asset quality than that of peers in Italy. Significant business exposure in Italy, where economic risk is higher than international peers' average. Constrained profitability mainly due to poor performance of domestic operations. The outlook on Italy-based UniCredit SpA (UniCredit) is negative, reflecting the possibility that we could lower the ratings if, all else being equal, we anticipate that one of the following conditions will occur: We lower the long-term sovereign credit rating on Italy; The economic and/or operating conditions in which Italian banks operate deteriorate further. Further deterioration in our view of the
