Published by Jessica Weisman-Pitts
Posted on October 31, 2024
2 min readLast updated: January 29, 2026
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By Valentina Za
MILAN (Reuters) – Fitch Ratings on Thursday increased its long-term rating on UniCredit’s debt to BBB-plus, one notch above Italy’s sovereign level, in a move that reflects the bank’s restructuring progress and geographical diversification.
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.
After similar attempts by his predecessors failed, UniCredit CEO Andrea Orcel is considering a merger with Commerzbank after building a stake in Germany’s second-biggest bank. His advances have been rebuffed by the Berlin government.
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.
In early October Moody’s said it could consider raising UniCredit’s standalone rating in the event of a Commerzbank acquisition. Moody’s rates UniCredit’s long-term debt two notches above Italy’s – as high as it can go under the Moody’s methodology.
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.
Economic and budget progress, and greater political stability than in the past, this month prompted Fitch to improve its outlook on Italy’s sovereign rating to “positive”.
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.
Fitch on Thursday also raised to “positive” the outlook on Intesa Sanpaolo’s BBB long-term rating.
(Reporting by Valentina Za; Editing by David Holmes)
A credit rating is an assessment of the creditworthiness of a borrower, indicating the likelihood of repayment. It is often expressed as a letter grade, with higher ratings indicating lower risk.
A merger in banking refers to the combination of two or more financial institutions into a single entity, often to enhance market share, reduce costs, or expand services.
Geographical diversification is a strategy used by companies to spread their operations across different regions to reduce risk and enhance growth opportunities.
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