Market leader in Italy, Germany, Austria, and Central and Eastern Europe (CEE). High geographic diversification. Sound and well-balanced funding base. Significant credit exposure in higher-risk countries than international peers. Likely rise in nonperforming exposures (NPEs) and credit losses as a result of the COVID-19 pandemic. Modest profitability prospects. S&P Global Ratings' negative outlook on Italy-based UniCredit SpA reflects the risks we see to our base-case expectations over the next two years. We could lower the ratings on UniCredit if the economic and operating conditions materially deteriorated, to the extent that they significantly weakened UniCredit's creditworthiness. In particular, if we saw the bank's projected risk-adjusted capital (RAC) ratio falling below 7% and a sharp deterioration in asset quality metrics. We could
