Strong franchise in Italy, Germany, Austria, and Central and Eastern Europe (CEE). High level of geographic diversification. Sound and well-balanced funding base. Significant business and credit exposure in higher economic risk countries than international peers. Likely rise in non-performing exposures and credit losses amid COVID-19-driven recession. Modest profitability prospects. The negative outlook on UniCredit primarily reflects increased pressure on revenue and asset quality and significant downside risks we see to our base-case expectations over the next two years. We could lower the rating if we see that economic and operating conditions have materially deteriorated, implying far more negative effects on UniCredit's credit metrics compared with our current expectations. In particular, a downgrade could follow if we saw the bank's projected
