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Investing.com -- Fitch Ratings has upgraded UniCredit S.p.A.’s Long-Term Issuer Default Rating to ’A-’ from ’BBB+’ and its Viability Rating to ’a-’ from ’bbb+’, the agency announced Thursday. The rating outlook is stable.
The upgrade follows Fitch’s recent upgrade of Italy’s sovereign rating to ’BBB+’ from ’BBB’, as UniCredit’s rating is capped at one notch above the sovereign. The action also reflects an upward revision of the Italian operating environment score to ’bbb+’ from ’bbb’, indicating improved business opportunities and reduced risks in the Italian banking system.
UniCredit’s exceptional strength relative to domestic peers allows it to be rated one notch above Italy, supported by successful geographic diversification in strong economies that would mitigate pressures during severe Italian sovereign stress.
The bank’s international presence in Germany and Austria, combined with its leading position in Italy, contributes to its sustainably strong profitability. Fitch expects UniCredit to maintain profitability above the average of large European banks, supporting strong internal capital generation.
The bank’s operating environment score of ’a-’ sits one notch above other Italian banks, reflecting the benefits of diversification into higher-rated economies. UniCredit has a pan-European presence in retail and commercial banking, ranking among leading banks by total assets in its key markets.
Asset quality remains sound with an impaired loans ratio of 2.9% at end-June 2025, slightly above the European average. Fitch forecasts only modest deterioration in asset quality over the next 12-24 months given conservative underwriting and active impaired loan management.
The agency expects UniCredit’s CET1 ratio to decline to around 14% by end-2025 from 16% at end-June 2025, as the group consolidates increased stakes in Alpha Bank and Commerzbank by the fourth quarter, consuming about 200 basis points of capital.
Rating upside for UniCredit is limited and would require an upgrade of Italy’s sovereign rating, a higher assessment of the Italian banking environment, and continued outperformance throughout the economic cycle.
UniCredit’s equity consolidation of its recently acquired 29.9% stake in Commerzbank has no immediate effect on its ratings, though a full takeover could have positive rating implications over the longer term if well managed.
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