Strong franchise in Italy, Germany, Austria, and Central and Eastern Europe (CEE). High level of business and geographic diversification. Sound and well-balanced funding base. Significant business and credit exposure in higher economic risk countries than international peers. Still modest, although improving, profitability. Large, although declining, stock of problematic assets. The stable outlook reflects our expectation that UniCredit Group will be able to preserve its solvency, increasing its risk-adjusted capital (RAC) ratio above 7% in 2019. We also factor in our view that UniCredit will be able to achieve its business plan target to reduce the gross nonperforming exposure (NPE) stock to around €44 billion in 2019 from an estimated €59 billion as of September 2017, maintain NPE coverage ratio above
