Strong franchise in Italy, Austria, Poland, Central and Eastern Europe (CEE), and the German State of Bavaria. High level of business and geographic diversification. Sound and well-balanced funding base. Significant business exposure in Italy, where economic risk is higher than that for the average of international peers. Still modest, although improving, capitalization. Weaker asset quality track record than that of peers in Italy. Standard&Poor's Ratings Services' outlook on Italy-based UniCredit SpA is stable, reflecting the stable outlook on the sovereign credit rating on Italy. The outlook also reflects our expectation that UniCredit should be able to absorb still-high, albeit declining, impairment charges while posting positive bottom-line performance and preserving its capital position. Although we believe that prospects for
