The ratings on Italy-based Unione di Banche Italiane Scpa (UBI) reflect the bank's strong customer franchise in Lombardy--Italy's richest and most populous region--and its more efficient, stable, retail-oriented funding base. UBI's vulnerability to the deterioration in the Italian economy, due to its large exposure to midsize corporations, high sensitivity of revenues to short-term interest rates, and potential risks from relatively high--albeit declining--single-name loan concentration constrain the ratings. Created by 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 5.3% national deposit market share and about 4 million clients. UBI boasts a very strong deposit market share of 12% in Lombardy. Standard&Poor's
