The ratings on Unione di Banche Italiane Scpa (UBI) reflect its strong northern Italian franchise and sound financial profile, which is based on a satisfactory operating performance and moderate cost of credit risk. Constraining the ratings are potential risks from a large credit exposure to Italian corporates and significant single-name loan concentration. Resulting from the merger of Banche Popolari Unite (BPU) and Banca Lombarda (BL) in April 2007, UBI is a leading Italian mutual banking group ("banca popolare") with a 6% national market share and about 4 million clients. UBI boasts a very strong market position in Lombardy, Italy's richest and most populous region, with a 15% market share, No. 2 after Intesa Sanpaolo SpA (AA-/Stable/A-1+). With a 55% cost-income
