Fitch lifts UniCredit’s rating to BBB-plus, one notch above Italy’s #ItalyFinance

With a strong presence in Germany and Austria and operations across 13 countries, UniCredit has traditionally sought to leverage the strength deriving from its presence in Germany, whose debt carries the top-notch AAA rating.

“The ratings reflect UniCredit’s international footprint, with large operations in strong economies (Germany and Austria), which Fitch considers a business model strength, and a leading position in its Italian home market,” the agency said in a statement.

Fitch had so far kept UniCredit’s long-term rating aligned with Italy’s. Banks are normally considered a proxy for sovereign risk given their exposure to a country’s economy and public debt.

Burdened by the world’s third-largest public debt, the Italian economy has been performing better than Germany’s in recent years.

Bank of Italy Governor Fabio Panetta on Thursday said Italy’s economy had grown 5.5% from pre-COVID levels, while Germany had expanded only by 0.2% from the end of 2019.

Fitch said its positive outlook on the UniCredit rating, which is currently capped at one notch above the sovereign one, reflected Italy’s positive outlook.

The agency said it saw “improving business prospects for Italian banks over the longer term as a result of a better medium-term economic growth outlook.”

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