Dominant franchise in wealthy northern Italy. Conservative risk management and strategy. Lower-than-system-average asset quality deterioration. Moderate capital position. Modest earning capacity. Relatively low coverage of nonperforming assets. The negative outlook on Unione di Banche Italiane Scpa (UBI) reflects the possibility that Standard&Poor's Ratings Services could lower the ratings if it anticipates that the economic conditions in which Italian banks operate could deteriorate further and UBI's capital position could weaken--either because of higher economic risk or because of higher-than-expected pressures on the bank's profitability. We do not currently expect to revise the outlook on UBI to stable. However, we could do so if we expected an easing in the downside risks to the economic environment in Italy. The starting
