• Outlook is stable

• The rating of UniCredit Bulbank is equal to the rating of Bulgaria

The international credit rating agency Standard and Poor’s confirmed the rating and the stable outlook of UniCredit Bulbank after reviewing its current performance. The rating is BBB/Stable/A-3 and thus is the highest rating from S&P in Bulgaria and equal to the rating of the country.

According to Standard and Poor’s the rating of UniCredit Bulbank reflects “the view of the bank’s ownership, as well as its leading banking franchise in Bulgaria, comparatively conservative risk profile, good risk management framework, and adequate capitalization and liquidity.”

“We expect UniCredit to provide strong financial assistance to its Bulgarian subsidiary, if necessary.”, continued Standard and Poor’s in official statement.

The ratings also reflect the challenging operating environment in Bulgaria, which, in S&P’s view, has put pressure on UniCredit Bulbank's financial profile. Nevertheless this, Standard and Poor’s point out that compared to its domestic peers UniCredit demonstrates better assets quality and performs with “stronger resilience to the recent economic downturn in Bulgaria by maintaining a smaller share of problem loans and stronger provisions than those of its domestic peers”.

“We expect NPLs to peak at midyear 2011 […] but to remain less than the sector average. This is partly because of UniCredit Bulbank's conservative risk profile and well-developed risk management framework.”, said Standard and Poor’s.

In addition Standard and Poor’s note that UniCredit Bulbank outperformed its domestic

peers, with a return on assets of 1.2% against 0.85% for the Bulgarian average and a return on equity of 7.4% against 6.2% in the first quarter of 2011. “We expect earnings pressure to persist for at least the rest of 2011. However, we expect new loan loss provisions to be lower in the second half of 2011 than in the first half because the pressure on asset quality should decrease.”, commented the agency.

Also on a comparative basis, Standard and Poor’s noted that UniCredit Bulbank's funding and liquidity is adequate, and “we expect this to continue”.

According to the agency, the ratings upside would depend on improvement in Bulgaria's operating environment and strengthening of the bank's asset quality and profitability.

More information is available through www.standardandpoors.com/ratingsdirect service.