When ratings agency Fitch downgraded UniCredit group to A from A+ in mid-April 2009, citing "increasing vulnerability to potential severe stresses in central and eastern Europe (CEE) and the Commonwealth of Independent States (CIS)", it was the latest in a line of statements from ratings agencies and equity research teams suggesting that the bank's presence in emerging Europe was a source of weakness. Standard & Poor's had placed the outlook on Intesa Sanpaolo on "negative" a month earlier, noting "we expect loan losses to accelerate" on the bank's €28bn CEE loan book.
And as both banks began negotiating with the Italian government on cash injections to boost capital adequacy, speculation was rife that they would be asked to concentrate on their domestic markets. This speculation appeared to be confirmed as UniCredit announced job cuts totalling 1400 in its Ukrainian and Kazakh subsidiaries in late 2008 and early 2009, respectively.
