Strong business diversification Potential benefits of future growth in CEE Strong management and a clear strategy Satisfactory profitability in Italy and CEE Structurally weaker asset quality than peers' Low profitability in Germany and Austria Temporary weakening of capital ratios after the HVB acquisition High execution risk in creating a European banking group The ratings on Italy-based UniCredito Italiano SpA (UniCredito) reflect the banking group's strong business and geographic diversification in its core markets of Italy, Germany, and Austria; strategic presence in fast-growing economies in Central and Eastern Europe (CEE); strong management and clear strategy; and satisfactory profitability from the Italian and CEE businesses. On the other hand, the ratings are constrained by structurally weaker asset quality than peers'; the low
