Dominant franchises in key provinces of wealthy northern Italy. Improved efficiency following merger integration. Adequate capitalization. Income pressured by very low short-term interest rates. Comparatively high exposure to corporate credit risk. Relatively high single-name loan concentration. The ratings on Italy-based Unione di Banche Italiane Scpa (UBI) reflect the bank's strong customer franchise in Lombardy--Italy's richest and most populous region--and its more efficient, stable, retail-oriented funding base. UBI's vulnerability to the deterioration in the Italian economy, due to its large exposure to midsize corporations, high sensitivity of revenues to short-term interest rates, and potential risks from relatively high--albeit declining--single-name loan concentration constrain the ratings. Created by the merger of Banche Popolari Unite (BPU) and Banca Lombarda (BL) in April 2007, UBI
