Strong franchise and market position in Italy. Prudent strategy. Lower-than-system-average asset quality deterioration. Moderate capitalization. Still-high cost base compared to peers. Lower-than-system average coverage of nonperforming assets (NPAs). Standard&Poor's Ratings Services' outlook on Italy-based Unione di Banche Italiane Scpa (UBI) is stable. This reflects our expectation that UBI will be able to reach a risk-adjusted capital (RAC) ratio before adjustments of about 5.5% by end-2016. It also reflects our view that UBI's asset quality will remain slightly better than the domestic average in 2015 and 2016. Although unlikely at this stage, we could raise the long-term rating on UBI if its NPA coverage converged toward the Italian banking sector average and we raised the long-term sovereign credit rating
