The ratings on Italy-based UniCredito Italiano SpA (UniCredito) reflect the bank's strong business and geographic diversification in its core markets of Italy, Germany, Austria, and Central and Eastern Europe (CEE); good integration track record; and satisfactory profitability at the Italian and CEE businesses. The ratings are constrained, however, by the complex integration and turning around of banks operating in a variety of regulatory and economic environments; structurally weaker asset quality than peers'; only adequate capital ratios; and some appetite for market risk, related to market and investment banking activity. UniCredito has grown relentlessly since the 2005 purchase of Germany-based banking group Bayerische Hypo- und Vereinsbank AG (HVB; A+/Stable/A-1), namely through the merger agreement with Italy's Capitalia SpA (not rated), but
