's long-awaiteddeal to combine its asset management division with 's may have hit aroadblock, but analysts are questioning its rationale anyway.

Nearlytwo years in the making, the attempt to combine with Santander Asset Management to create a €353 billion business may be on theverge of collapse as a result of the U.K.'s vote to leave the EU, according tothe Financial Times, although Reutersreported both sideswere looking for a way to salvage it.

SellingPioneer would be in tune with other disposals planned by UniCredit's new CEOJean-Pierre Mustier, who is trying to bolster the bank's capital ratio,which, at 10.85%, is uncomfortably close to a 10.75% regulatory minimum. Mustierhas already sold off10% stakes in FinecoBankSpA and in Polishunit Bank PekaoSA.

Butoffloading Pioneer may mean UniCredit sacrifices a profitable business forlittle capital benefit, according to Marta Bastoni, an analyst at Barclays, whosaid she had had mixed feelings about the proposed merger with Santander AssetManagement from the outset.

"Ifyou sell profitable assets, you solve one problem, but you impair the futureprofit generating ability of the group. It's like selling the crownjewels," she said in an interview, although she added: "There is noeasy solution for UniCredit. A capital increase would be extremely dilutive,and selling off valuable assets now means a trade-off in profitability."

HugoCruz, an investment banking analyst at Keefe Bruyette & Woods, agreed thatthe benefits of selling off the business would be muted, with UniCredit havingguided to a 25-basis-point positive impact on CET1.

"Ifthe deal did not happen, it would not be the end of the world," he said inan interview.

KBWcurrently has an "underperform" rating on UniCredit.

UniCredit'sasset management business made a pre-tax profit of €287 million in 2015, a 0.4%increase on 2014. However, its cost-to-income ratio crept up 3 percentagepoints to 66%.

Newsof the stalled deal came as asset managers are under pressure to cut fees.Steven Maijoor, head of the European Securities and Markets Authority,said in June thatasset managers should reduce charges so as not to lock retail investors out ofthe market. But despite thinner margins, asset management remains a usefulsource of income for some banks. Analysts have UniCredit's peer for itsprofitable fund management business. Its asset management division reportedoperating income grew by 38.8% to €759 million in the 12 months to December2015, largely due to increases in fee and commission income.

PioneerInvestments had €218.7 billion of AUM as of March 31, in a mixture of fixedincome, equity and money markets, with 77% of its exposure in Europe. SantanderAsset Management manages €165 billion in 12 countries, spanning Latin America,Europe, the U.S. and Japan.

UniCreditand Santander would each have 33.3% stakes in the merged company. Privateequity fund managers Warburg Pincus and General Atlantic would share 33%, undera preliminary agreement in April 2015.