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 that on our long-term ratings on Italy (unsolicited; BBB-/Stable/A-3) as we are unlikely to rate the bank above the sovereign credit rating. This reflects our view that, in the event of a sovereign default in Italy, UniCredit would be unlikely to pass the stress test scenario given the bank's Italian exposure and the parameters of the stress test. On a stand-alone basis, we believe UniCredit is on
