2012 Consolidated Financial Report - UBI Banca

Reports and
Accounts 2012
Translation from the Italian original which remains the
definitive version
10 th financial year
Joint stock co-operative company
Registered office: Bergamo, Piazza Vittorio Veneto 8
Operating offices: Bergamo, Piazza Vittorio Veneto 8; Brescia, Via Cefalonia 74
Member of the Interbank Deposit Protection Fund and the National Guarantee Fund
Tax Code, VAT No. and Bergamo Company Registration No. 03053920165
ABI (Italian Banking Association) 3111.2 Register of Banks No. 5678 Register of banking groups No. 3111.2
Parent of the Unione di Banche Italiane Banking Group
Share capital as at 5 th February 2013: euro 2,254,367,552.50 fully paid up
www.ubibanca.it

Contents
Letter to the registered and non-registered shareholders ........................................................ 5
UBI Banca: company officers .................................................................................................. 9
UBI Banca Group: branch network as at 31 st December 2012 ................................................ 10
UBI Banca Group: the main investments as at 31 st December 2012 ....................................... . 11
UBI Banca Group: principal figures and performance indicators ............................................. 13
The rating .............................................................................................................................. 14
Notice of call .......................................................................................................................... 16
CONSOLIDATED FINANCIAL STATEMENTS OF THE UBI BANCA GROUP AS AT AND FOR
THE YEAR ENDED 31 ST DECEMBER 2012
CONSOLIDATED MANAGEMENT REPORT ................................................................................... 19
▪ The macroeconomic scenario ............................................................................................ 20
▪ Significant events that occurred during the year ................................................................ 31
▪ Commercial activity ........................................................................................................... 41
▪ The distribution network and market positioning ............................................................. 59
▪ Human resources ............................................................................................................. 67
▪ The scope of consolidation ................................................................................................ 76
▪ Reclassified consolidated financial statements, reclassified income statement
net of the most significant non-recurring items and reconciliation schedules ..................... 86
▪ The consolidated income statement ................................................................................... 94
▪ General banking business with customers: funding ........................................................... 107
- Total funding ............................................................................................................................... 107
- Direct funding .............................................................................................................................. 108
- Indirect funding and assets under management ........................................................................... 114
▪ General banking business with customers: lending .......................................................... 117
- Performance of the loan portfolio ................................................................................................. 117
- Risk .............................................................................................................................................. 120
▪ The interbank market and the liquidity situation ............................................................... 126
▪ Financial activities ........................................................................................................... 130
▪ Equity and capital adequacy ............................................................................................. 149
▪ Research & Development .................................................................................................. 153
▪ The system of internal control .......................................................................................... 154
▪ Transactions with related parties ...................................................................................... 155
▪ Consolidated companies: the principal figures ................................................................... 158
▪ The performance of the main consolidated companies ....................................................... 162
▪ Other information ............................................................................................................. 193
- Treasury shares ........................................................................................................................... 193
- Litigation ...................................................................................................................................... 193
- Inspections .................................................................................................................................. 194
- Antitrust authority provisions ...................................................................................................... 196
- Tax aspects .................................................................................................................................. 196
- Investor relations and external communication ............................................................................ 205
- Social and environmental responsibility ....................................................................................... 207
- Compliance with personal data protection regulations .................................................................. 209
▪ Principal risks and uncertainties to which the UBI Banca Group is exposed ...................... 210
▪ Subsequent events occurring and the business outlook
for consolidated operations .......................................................................................... 218
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE SENIOR OFFICER
RESPONSIBLE FOR PREPARING THE COMPANY ACCOUNTING DOCUMENTS ............................. 219
1

INDEPENDENT AUDITORS’ REPORT ................................................................................ 221
CONSOLIDATED FINANCIAL STATEMENTS ........................................................................ 224
▪ Consolidated balance sheet ............................................................................................... 225
▪ Consolidated income statement ........................................................................................ 226
▪ Consolidated statement of comprehensive income ............................................................. 227
▪ Statement of changes in consolidated equity .................................................................... 228
▪ Consolidated statement of cash flows ............................................................................. 230
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................... 232
▪ Part A – Accounting policies ............................................................................................. 233
- A.1 – General part ........................................................................................................................ 233
- A.2 – The main items in the financial statements .......................................................................... 250
- A.3 – Information on fair value ...................................................................................................... 276
▪ Part B – Notes to the consolidated balance sheet ............................................................... 281
- Assets ........................................................................................................................................... 281
- Liabilities ..................................................................................................................................... 313
- Other information ......................................................................................................................... 335
▪ Part C – Information on the consolidated income statement ............................................... 338
▪ Part D – Consolidated statement of comprehensive income ............................................... 359
▪ Part E – Information on risks and the relative hedging policies ......................................... 360
▪ Part F – Information on consolidated equity ...................................................................... 466
▪ Part G – Business combination transactions concerning companies or lines of business .... 474
▪ Part H – Transactions with related parties ......................................................................... 475
▪ Part I – Share-based payments ......................................................................................... 480
▪ Part L – Segment reporting ............................................................................................... 482
ATTACHMENT TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 484
Disclosures concerning the fees of the independent auditors and for services other
than auditing in compliance with Art. 149 duodecies of Consob Issuers’ Regulations ......... 484
SEPARATE FINANCIAL STATEMENTS OF UBI BANCA SCPA AS AT AND FOR THE YEAR
ENDED 31 ST DECEMBER 2012
MANAGEMENT REPORT ............................................................................................... 1*
▪ UBI Banca: principal figures and performance indicators ................................................. 2*
▪ The UBI Banca organisation chart ..................................................................................... 3*
▪ The macroeconomic scenario ............................................................................................ 4*
▪ Human resources ............................................................................................................. 4*
▪ Reclassified financial statements, reclassified income statement net of the most significant
non-recurring items and reconciliation schedules ............................................................. 6*
▪ The income statement ....................................................................................................... 14*
▪ General banking business ................................................................................................. 25*
- Funding ....................................................................................................................................... 25*
- Lending ........................................................................................................................................ 28*
- Operations on the interbank market ............................................................................................. 31*
▪ Financial activities ........................................................................................................... 34*
▪ Equity and capital adequacy ............................................................................................ 42*
▪ Relations with Group member companies .......................................................................... 44*
▪ Research & Development .................................................................................................. 44*
▪ The internal control system .............................................................................................. 44*
▪ Transactions with related parties ...................................................................................... 45*
▪ Share performance and shareholder structure ................................................................... 46*
- Share performance ....................................................................................................................... 46*
- Report on corporate governance and the ownership structure ...................................................... 49*
2

- Treasury shares ........................................................................................................................... 51*
- Report on the admission of new registered shareholders ............................................................... 51*
- Report on mutual objects .............................................................................................................. 51*
- De jure and delegated powers of the corporate bodies .................................................................. 53*
▪ Other information ............................................................................................................. 54*
- Litigation ...................................................................................................................................... 54*
- Tax aspects .................................................................................................................................. 54*
- Compliance with personal data protection regulations .................................................................. 54*
- Complaints .................................................................................................................................. 54*
▪ Principal risks and uncertainties to which UBI Banca is exposed ....................................... 56*
Subsequent events and the business outlook for operations ............................................. 56*
▪ Proposal for the allocation of profit for the year and dividend distribution .......................... 57*
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE SENIOR OFFICER
RESPONSIBLE FOR PREPARING THE COMPANY ACCOUNTING DOCUMENTS ............................ 58*
INDEPENDENT AUDITORS’ REPORT ................................................................................ 60*
SEPARATE FINANCIAL STATEMENTS .............................................................................. 64*
▪ Balance sheet .................................................................................................................... 65*
▪ Income statement ............................................................................................................. 66*
▪ Statement of comprehensive income ................................................................................. 67*
▪ Statement of changes in equity .......................................................................................... 68*
▪ Statement of cash flows .................................................................................................... 70*
NOTES TO THE ACCOUNTS .......................................................................................... 72*
▪ Part A – Accounting policies ............................................................................................. 73*
- A.1 – General part ........................................................................................................................ 73*
- A.2 – The main items in the financial statements .......................................................................... 79*
- A.3 – Information on fair value ...................................................................................................... 103*
▪ Part B – Notes to the balance sheet .................................................................................... 105*
- Assets ........................................................................................................................................... 105*
- Liabilities ..................................................................................................................................... 142*
- Other information ........................................................................................................................ 163*
▪ Part C – Notes to the income statement ............................................................................. 166*
▪ Part D – Comprehensive income ....................................................................................... 188*
▪ Part E – Information on risks and the relative hedging policies .......................................... 190*
▪ Part F – Information on equity ........................................................................................... 286*
▪ Part G – Business combination transactions concerning companies or lines of business ... 293*
▪ Part H – Transactions with related parties ........................................................................ 295*
▪ Part I – Share based payments ......................................................................................... 303*
▪ Part L – Segment Reporting ............................................................................................... 305*
ATTACHMENTS TO THE SEPARATE FINANCIAL STATEMENTS ............................................... 306*
▪ List of real estate properties .............................................................................................. 307*
▪ Convertible bonds ............................................................................................................ 312*
▪ Disclosures concerning the fees of the independent auditors and services other than
auditing in compliance with Art. 149 duodecies of Consob Issuers’ Regulations ................. 313*
3

REPORT ON THE CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE OF UBI BANCA SCPA .... 1**
REPORT OF THE SUPERVISORY BOARD TO THE SHAREHOLDERS’ MEETING
in compliance with Art,153, paragraph 1 of Legislative Decree No. 58 of 24 th February 1998
and article 46, paragraph 1, letter h) of the Articles of Association .............................................. 73**
REPORTS ON THE OTHER ITEMS ON THE AGENDA OF THE SHAREHOLDERS’ MEETING................. 89**
GLOSSARY ..................................................................................................................................................... 135**
BRANCH NETWORK OF THE UBI BANCA GROUP
Calendar of corporate events of UBI Banca for 2013
DELIBERAZIONI ASSUNTE DALL’ASSEMBLEA DEL ........ 2012
CONTACTS
KEY
The following abbreviations are used in the tables:
- dash (-): when the item does not exist;
- not significant (n.s.): when the phenomenon is not significant;
- not available (n.a.): when the information is not available;
- a cross “X”: when no amount is to be given for the item (in compliance with Bank of Italy instructions).
All figures are given in thousands of euros, unless otherwise stated.
4

Letter to the registered and non-registered
shareholders
Dear registered and non-registered shareholders,
The Chairman of the Supervisory Board, Corrado Faissola, passed away on 20 th December 2012.
With his passing we have lost an immeasurably well-respected banker who was a driving force
behind the creation of UBI Banca and left a permanent mark on the history of the Group and the
Italian banking industry as a whole.
We would like to remember him in light of the friendship that flowered in the years spent working
together. This friendship was a precious gift reserved for those who worked alongside him on a daily
basis in developing programmes to shape the future. Indeed, his basic inclination was to open up
unreservedly to anyone who was prepared to exchange ideas freely and commit to working towards
shared goals with the same intensity that he himself demonstrated.
Corrado Faissola was an unwavering follower of a strict personal code, fundamentally geared
towards espousing an overall ethical position that governed both life and work based on the principle
that the common good should never be supplanted by the possibility of delivering a result, no matter
how desirable. He worked in banking for many years, and was a shining example of tenacity,
wisdom and acumen.
He was one of the leading advocates of the aggregation that gave birth to UBI Banca: he initially filled
the position of Deputy Chairman of the Management Board and subsequently became Chairman of
the Supervisory Board. In these roles we had the opportunity to perceive his talents as an enlightened
banker, an inspirational strategist, a source of knowledge and insight into the world of banking and
credit, a keen judge of programmes and of people.
As a token of our esteem and affection, and in recognition of his great contribution, we have created a
scholarship in his name to be granted to a deserving student of economy and finance at the University
of Brescia. We believe that this practical gesture aimed at honouring his memory through providing
assistance to the next generation is something he would have genuinely appreciated.
We would also like to take this opportunity to remember Giuseppe Camadini, a Member of the
Management Board of UBI Banca and a figure of authority in the business and financial world, who
died on 25 th July 2012.
As a young notary, he soon dedicated himself to a career in the banking sector, initially joining Banca
di Valle Camonica and then moving to Banca San Paolo, where he became Chairman. Following the
merger with CAB, he promoted Banca Lombarda, where he held positions on the Boards of Banco di
Brescia and Banca di Valle Camonica itself. He continued to fill important roles following the
formation of the UBI Banca Group, on the Management Board of the Parent from 2007, and on the
Boards of Banco di Brescia, Banca di Valle Camonica and Banca Regionale Europea.
A long-standing Director and then Chairman of Cattolica Assicurazioni, Giuseppe Camadini was first
and foremost a man of faith and culture.
A tireless instigator of and participator in good works and charity initiatives, he played a driving role
in the leading Catholic institutions in the Brescia area for decades. Many of these institutions were
entrusted to his supervision and became his responsibility.
As President of Fondazione Tovini and Istituto Paolo VI, and Vice-President of Editrice La Scuola, he
helped preserve the memory and continue the good works of Antonio Tovini (founder of Banca di Valle
Camonica and Banco Ambrosiano) and of Pope Paul VI, tasks which represented his life’s work.
We would like to remember him, not only for his constant and unstinting support for the decisions and
strategic direction of UBI Banca, but also for his human characteristics: Giuseppe Camadini was a
man of gentle ways and refined thinking, whose life was inspired by extraordinary values, a
constructive spirit and the harmonious manner in which he fulfilled the roles and responsibilities
entrusted to him.
5

Dear registered and non-registered shareholders,
It is hard to abandon our affectionate thoughts in recognition of those that have left us in order to talk
about the situation at the Bank, but this is the task that now lies before us.
In 2012, the real economy weakened further and Italy was hit particularly hard. Italian GDP shrank
for the sixth consecutive quarter, although pressure on sovereign debts nevertheless gradually eased
and the spread on government bonds reduced as a consequence.
In this context, the UBI Banca Group continued to focus further on internal reorganisation, with priorty
given to a strong balance sheet and a balanced capital structure, as the right foundations for stability
and above all for future growth.
GROUP REORGANISATION
The year 2012 saw a continuation of the process already begun in preceding years, with a series of
major initiatives aimed at bringing about immediate further cuts to structural costs:
simplification of how the Group functions, with an overall reduction in the size of the branch
network and streamlining of internal units with shorter lines of lines in the network banks, the
Parent and UBI.S;
following agreements signed with trade unions in November 2012 and February 2013, a voluntary
redundancy programme was implemented for 736 staff in the first quarter of this year, while an
additional programme to suspend work/reduce working hours was launched. Demand from the
workforce for both programmes far exceeded the company’s target.
As part of those same agreements, the Bank undertook to transform employment contracts from
temporary to permanent or to recruit 283 young people in order to support generation turnover;
changes to the service model for private and corporate banking customers, with unification of
operating units in order to serve both types of customer and the creation at the same time of
combined units (Private & Corporate Unity) that came into operation at the beginning of 2013;
the coporate structure of the Group was streamlined through a series of mergers completed during
the course of the year: Banco di San Giorgio was merged into BRE, B@nca 24-7 was merged into
UBI Banca (after the prior contribution to Prestitalia of the salary and pension backed lending
operations ); and SILF was merged into the Parent.
On 6 th February 2013 work was begun on the merger of Centrobanca into UBI Banca, which
should be completed by the end of June.
CAPITAL STRENGTH
Capital ratios improved significantly, as a result of the adoption of internal models for the calculation
of capital requirements (authorisation was received from the Bank of Italy for the corporate segment in
May 2012, while the validation process for the retail segment is ongoing), efforts made to optimise
risk weighted assets and capital management operations that were undertaken. The ratios now
remain more than adequate to support core banking activity: the core tier one ratio increased by +173
basis points to 10.29% and the total capital ratio increased by +251 basis points to 16.01%.
Moreover, as at 30 th June 2012 the Group had already achieved the ratios recommended by the
European Banking Authority (EBA), with a core tier one ratio of 9.16% at the end of the year, which
incorporated the impact of the fair valuation of government securities held in portfolio as at 30 th
September 2011 (-€868 million).
CUSTOMER FUNDING
Direct funding from retail customers – traditionally one of the Group’s strong points, but subject to
increasing competitive pressure – amounted to €80.3 billion at year end (+€0.8 billion over the twelve
months). This result was driven by bonds, term deposits (which are both types of funding that help to
stabilise liabilities) and also by online current accounts at IWBank.
Total customer funding comprises over 80% of the Group’s direct funding and finances 86.5% of its
lending.
On the institutional front, the healthy liquidity position ensured that the Group could manage its
financial position without needing to renew its maturing medium to long-term funding, both because
renewal was not needed to maintain the structural balance between assets and liabilities and
because the conditions for renewing this financing were still too expensive. It was not until October
that UBI Banca returned to the international markets with a benchmark issue of €750 million.
Indirect funding, influenced by the so-called market effect, or in other words by the volatility of
financial markets, was €70.2 billion (-2.6%), of which assets under management (consisting of mutual
investment funds, managed customer portfolios, insurance policies and units in pension funds)
6

exceeded €38 billion (+3.3%) as a result of the success of the new UBI Pramerica sicav, which was
placed on the market during the year.
CUSTOMER LENDING
At the end of December the loan book amounted to €92.9 billion, 70% of which was disbursed in
Lombardy and 72% of which came from medium to long-term lending.
The Group’s strong position was nevertheless affected by a reduction in volumes (-6.8% compared to
2011), attributable on the one hand to weak demand from households and businesses still in the grip
of a serious recession and on the other to the impact of action taken to focus activity increasingly on
network bank customers, thereby strengthening the Group’s traditional links with local areas and
their people.
The Group has in fact completed the disposal of third party networks, with a consequent reduction in
lending to non-captive customers which involved all of its product companies, especially UBI Leasing.
It also continued to reduce its exposure to the large corporate segment.
These initiatives allowed the group to rebalance its lending to funding ratio, which improved to 94%
(97% at the end of 2011).
LIQUIDITY AND THE SECURITIES PORTFOLIO
The easing of pressures on sovereign debt allowed the wholesale market to start functioning again,
although the situation is not yet back to normal.
UBI Banca – which was allotted €12 billion from the two LTRO auctions held by the ECB in December
2011 and February 2012 – made a series of investments in government securities, while also
increasing its liquidity reserves.
At the end of the year, the financial asset portfolio had reached €21.4 billion, 84% of which consisted
of Italian government securities, and the Group continued to shun any exposure to “at risk” countries
or product types. As an example, the deliberately limited use of derivative contracts is entirely
dedicated to hedging items carried on the balance sheet or to trading with customers as
counterparties, which are then adequately balanced on the market.
The stabilisation of the operating environment, together with actions taken over the last two years to
tackle the systemic crisis, have allowed the group to achieve a liquidity position that is more than
satisfactory and which already complies with the provisions of Basel III regulations.
GROUP PROFITS
The Group ended the year with profit of approximately €83 million, having incurred €152 million of
expenses for redundancy incentive schemes in relation to agreements signed with trade unions in
November 2012 and February 2013.
This result was achieved as a result of revenues from core banking activities holding up well, which
led to operating income of €3.5 billion (+2.6% compared to the previous year, partly due to the overall
contribution of €257 million from financial activities), while operating expenses were contained to
approximately €2.3 billion, down by 5.2%, with further improvements expected as a result of the
initiatives launched in 2012.
These trends have driven an increase of 20% in net operating income, which came to nearly €1.3
billion, and an increase of 15% in pre-tax profit from continuing operations to €323 million.
On the income side, however, pressure on net interest income continued (-7.7% to €1.9 billion), which,
despite the guaranteed support from interest on the securities portfolio, was affected by the persistent
decline in market interest rates (the average one month Euribor rate was 0.34% in 2012 compared to
1.19% in 2011) and lower volumes of lending caused by weak demand for credit and by the selective
policies already described previously. Fee and commission income performed well, more or less
unchanged at €1.2 billion.
All components of operating expenses recorded a year-on-year fall, to reach the lowest level in the last
six years.
The current recession is reflected in the loan loss rate (€847 million), which rose to 91 basis points
(from 61 bps in 2011). However, this nevertheless confirmed UBI Banca’s place as one of the best
Italian banks in terms of asset quality: net non-performing loans as a percentage of the loan book
stood at 3.18%, compared to an average of 3.35% for the sector nationally.
In compliance with supervisory authority recommendations, the Management Board has decided to
propose a dividend of €0.05 per share. The total dividend payment will be €45 million, to be drawn
from the profit of the Parent.
7

Dear registered and non-registered shareholders,
The Annual General Meeting of the Shareholders scheduled for 19 th and 20 th April will be called upon
to elect members of the Supervisory Board, which will subsequently appoint a Management Board for
the next three-years.
The outgoing Directors have presided over the formation and subsequent consolidation of a major
Group of co-operative origins and one of the leading banks in the country. The key features of this
legal and financial model are democratic governance, retail lending and retail funding, closeness to
local people and a strong sense of social responsibility towards the communities served. Even today
these still remain indispensable requirements for enuring that developments in the banking system go
hand in hand with providing meaningful concrete support to small and medium-sized businesses in
the community to enable balanced economic development that is still mindful of social growth. We do
this in the context of our fundamental principle of mutual assistance, which unfortunately not always
prevails.
These values, combined with a firm desire for independence and autonomy, will be passed on to the
new candidates, who will be selected and proposed by the Appointments Committee in a list
approved by the outgoing Supervisory Board. The list bears many new names, incorporating a more
modern outlook (with the presence of five female candidates) and new personal characteristics (the
average age of the candidates is 58) which will help enrich the composition of the next Supervisory
Board, ready to meet the challenges of an increasingly difficult and competitive market environment.
However, if it is to look to the future with confidence it must never overlook not only the basic tenets of
banking, but also the fundamental principles that underpin our identity and our local mission.
27 th March 2013
The Chairman
of the Management Board
Emilio Zanetti
Senior Deputy Chairman
of the Supervisory Board
Giuseppe Calvi
8

UBI Banca: company officers
Honorary Chairman
Giuseppe Vigorelli
Supervisory Board (appointed by a Shareholders’ Meeting on 24 th April 2010)
Chairman Corrado Faissola (*)
Senior Deputy Chairman
Giuseppe Calvi
Deputy Chairman
Deputy Chairman
Alberto Folonari
Mario Mazzoleni
Battista Albertani
Luigi Bellini
Mario Cattaneo
Silvia Fidanza
Enio Fontana
Carlo Garavaglia
Alfredo Gusmini
Pietro Gussalli Beretta
Giuseppe Lucchini
Italo Lucchini
Federico Manzoni
Enrico Minelli (**)
Toti S. Musumeci
Sergio Orlandi
Giorgio Perolari
Sergio Pivato
Armando Santus (**)
Roberto Sestini
Giuseppe Zannoni
Management Board (appointed by the Supervisory Board on 27 th April 2010)
Chairman
Deputy Chairman
Chief Executive Officer
Emilio Zanetti
Flavio Pizzini
Victor Massiah
Giampiero Auletta Armenise
Giuseppe Camadini (***)
Mario Cera
Giorgio Frigeri
Gian Luigi Gola (****)
Guido Lupini
Andrea Moltrasio
Franco Polotti
General Management
General Manager
Senior Deputy General Manager
Deputy General Manager
Deputy General Manager
Deputy General Manager
Deputy General Manager
Francesco Iorio
Elvio Sonnino
Rossella Leidi
Giovanni Lupinacci
Ettore Medda
Pierangelo Rigamonti
Senior Officer Responsible in accordance with
Art. 154 bis of the Consolidated Finance Act
Elisabetta Stegher
Independent auditors
DELOITTE & TOUCHE Spa
(*) Deceased 20 th December 2012.
(**) Appointed by a shareholders meeting on 28 th April 2012.
(***) Deceased 25 th July 2012.
(****) Appointed by the Supervisory Board on 30 th June 2010.
9

UBI Banca Group: branch network as at 31 st
December 2012
10

UBI Banca Group: the main investments as
at 31 st December 2012
11

UBI Banca Group:
key figures and performance indicators 1
31.12.2012 31.12.2011 31.12.2010 31.12.2009 31.12.2008
STRUCTURAL INDICATORS
Net loans and advances to customers/total assets 70.1% 76.8% 78.0% 80.1% 79.0%
Direct funding from customers/total liabilities 74.6% 79.2% 81.8% 79.5% 80.0%
Net loans and advances to customers/direct funding from customers 94.0% 97.0% 95.4% 100.8% 98.7%
Equity (including profit/loss for the period )/total liabilities 7.4% 6.9% 8.4% 9.3% 9.1%
Assets under management/indirect funding from private individual customers 54.3% 51.2% 54.6% 53.2% 53.1%
Leverage ratio
(total assets - intangible assets) /(equity inclusive of profit (loss) for the year + equity attributable to
non-controlling interests - intangible assets) 17.0 18.5 19.3 17.1 17.3
PROFIT INDICATORS
ROE (Profit for the year/equity including profit (loss) for the year) 0.8% 3.9% 1.6% 2.4% 0.6%
ROTE annualised
[profit for the year/tangible equity (equity inclusive of profit (loss), net of intangible assets)] 1.2% 5.9% 3.1% 4.6% 1.2%
ROA (Profit for the year/total assets) annualised 0.06% 0.27% 0.13% 0.22% 0.06%
Cost/Income ratio (operating expenses/operating income) 64.3% 69.5% 70.6% 64.4% 63.9%
Personnel expense/operating income 39.0% 41.4% 41.5% 37.5% 38.8%
Net impairment losses on loans/net loans to customers (loan losses) 0.91% 0.61% 0.69% 0.88% 0.59%
Net interest income/operating income 52.8% 61.7% 61.3% 61.5% 68.7%
Net fee and commission income/operating income 33.5% 34.7% 33.9% 31.1% 33.3%
Net result on financial activities/operating income 7.3% 0.2% 1.0% 3.2% -5.9%
RISK INDICATORS
Net non-performing loans/net loans to customers 3.18% 2.49% 1.91% 1.36% 0.88%
Net impairment losses on non-performing loans/gross non-performing loans
(coverage for non-performing loans) 42.60% 43.31% 48.69% 51.57% 54.58%
Coverage for non-performing loans, gross of write-offs of positions subject to bankruptcy
proceedings and relative impairment losses 57.63% 59.06% 63.62% 66.10%
Net non-performing + net impaired loans/net loans to customers 7.06% 5.03% 3.91% 3.24% 2.08%
Net impairment losses on non-performing and impaired loans/gross non-performing
loans+impaired loans (coverage) 29.26% 30.55% 34.89% 35.93% 38.22%
CAPITAL RATIOS Basel 2 AIRB as at 31st December 2012
Tier 1 ratio (tier 1 capital/total risk weighted assets) 10.79% 9.09% 7.47% 7.96% 7.73%
Core tier 1 ratio after specific deductions to tier 1 capital (tier 1 capital net of preference shares
and savings shares or privileged shares of non controlling interests/total risk weighted assets) 10.29% 8.56% 6.95% 7.43% 7.09%
Total capital ratio [(regulatory capital+tier 3/total risk weighted assets)] 16.01% 13.50% 11.17% 11.91% 11.08%
Regulatory capital (in thousands of euro) 12,203,619 12,282,153 10,536,200 10,202,555 9,960,812
of which:
Tier one capital after the application of prudential filters and specific deductions 8,263,720 8,276,278 7,047,888 6,816,876 6,944,723
Risk weighted assets 76,589,350 91,010,213 94,360,909 85,677,000 89,891,825
INCOME STATEMENT, BALANCE SHEET FIGURES (in thousands of euro),
STRUCTURAL DATA (numbers)
Profit (loss) for the period attributable to the shareholders of the Parent 82,708 (1,841,488) 172,121 270,099 69,001
Profit (loss) for the period attributable to the shareholders of the Parent normalised 97,324 111,562 105,116 173,380 425,327
Operating income 3,526,311 3,438,339 3,496,061 3,906,247 4,089,739
Operating expenses (2,266,660) (2,389,626) (2,468,564) (2,514,347) (2,611,348)
Net loans and advances to customers 92,887,969 99,689,770 101,814,829 98,007,252 96,368,452
of which: net non-performing loans 2,951,939 2,481,417 1,939,916 1,332,576 848,671
net impaired loans 3,602,542 2,533,780 2,032,914 1,845,073 1,160,191
Direct funding from customers 98,817,560 102,808,654 106,760,045 97,214,405 97,591,237
Indirect funding from customers 70,164,384 72,067,569 78,078,869 78,791,834 74,288,053
of which: assets under management 38,106,037 36,892,042 42,629,553 41,924,931 39,430,745
Total funding from customers 168,981,944 174,876,223 184,838,914 176,006,239 171,879,290
Equity (inclusive of profit/loss for the year) 9,737,882 8,939,023 10,979,019 11,411,248 11,140,207
Intangible assets 2,964,882 2,987,669 5,475,385 5,523,401 5,531,633
Total assets 132,433,702 129,803,692 130,558,569 122,313,223 121,955,685
Branches in Italy 1,727 1,875 1,892 1,955 1,944
Total personnel at the end of the period
(actual employees in service + workers on agency leasing contracts) 19,086 19,407 19,699 20,285 20,680
Total personnel average (*)
(actual employees in service + workers on agency leasing contracts) 18,490 18,828 19,384 20,185 20,606
Financial advisors 672 713 786 880 924
1 The indicators have been calculated using the reclassified figures contained in the section “Reclassified consolidated financial statements, reclassified
income statement net of the most significant non-recurring items and reconciliation schedules” in the Consolidated Management Report.
The profit indicators for 2011 were calculated on profit before impairment losses on goodwill and finite life intangible assets, which
amounted to €349,373 thousand.
Information on the share is reported in the relative section of the UBI Banca Management Report.
(*) Part time employees have been calculated within total average personnel numbers according to convention on a 50% basis.
13

The rating
As governments were perceived to fail to come to an agreement during the year over the reform
of European governance and over improvements to the mechanisms for managing the crisis in
the euro area, rising pressures on sovereign debts and the growing difficulties with the
macroeconomic environment led rating agencies to revise their ratings for Italy and Italian
banks, including UBI Banca, several times.
On 27 th January 2012, as part of action taken on six eurozone countries (set on rating watch
negative on 16 th December 2011), Fitch Ratings lowered its rating for Italy from A+ to A-
(down two notches), keeping it on outlook negative.
On the following 6 th February 2012, this agency removed its negative rating watches assigned
on 20 th December 2011 and made a series of cuts to the ratings of the main Italian banks. For
UBI Banca, its long-term and viability ratings were reduced from A-/a- to BBB+/bbb+ (-1
notch), again with a negative outlook.
On 14 th December Fitch confirmed its ratings and outlook negative for Italy 1 and on 29 th
January 2013 it revised its ratings for the four main Italian banks, including UBI Banca,
whose ratings (and the relative outlooks) all remained unchanged.
On 13 th July Moody’s intervened for the second time in 2012 on its Italian sovereign debt
rating, cutting it by two notches from A3 to Baa2 and maintaining its negative outlook. In
consideration of the magnitude of the changes already made to the ratings of Italian banks on
the preceding 14 th May, the adjustments that the agency made to take account of the new
ratings on sovereign debt were very limited and affected just ten banks, which did not include
UBI Banca.
As already reported, as part of extensive measures which affected the sovereign ratings of nine
European countries, on 13 th February 2012 this agency downgraded its rating on Italy’s longterm
debt from A2 to A3 (down one notch), again with a negative outlook and on the following
15 th February it announced a review for possible downgrading of 114 financial institutions
operating in 16 European countries.
This review was concluded for Italy on 14 th May and was accompanied by a general reduction
in the long-term ratings of 26 Italian banks, a reduction which in almost all cases reflected a
lower rating by Moody’s on the financial strength of single banks. In this context UBI Banca’s
bank financial strength rating was cut from C- (baa1) to D+ (baa3), while its long-term rating
fell from A3 to Baa2. In both cases the outlook was kept on negative.
On 3 rd August 2012, Standard & Poor’s released the results of a revision of the Italian
banking sector (which involved 32 financial institutions) that it performed to take account of
the deterioration of the outlook for credit risk in the context of a recession which is potentially
more severe than originally expected. In this context, the long-term rating for UBI Banca fell
from BBB+ to BBB (down by one notch), again with a negative outlook.
As a result of the sovereign debt downgrade of two notches announced on 13 th January (from
A to BBB+ with a negative outlook) and a consequent lowering of the Italian BICRA rating
(from three to four), this agency had already taken a series of negative measures on 10 th
February 2012 involving 37 Italian financial institutions, including UBI Banca, whose longterm
rating had been downgraded from A- to BBB+ (down one notch), with a negative outlook.
The tables below summarise the ratings currently assigned to the Group by the three
international agencies.
1 As a consequence of the results of the parliamentary elections, considered inconclusive and economic figures for the last quarter of
2012, which showed the Italian economy to be in one of the deepest recessions in Europe, on 8 th March 2013 this agency further
downgraded its sovereign rating to BBB+ again with outlook negative.
14

STANDARD & POOR’S
Short-term Counterparty Credit Rating (i) A-2
Long-term Counterparty Credit Rating (i)
Stand Alone Credit Profile (SACP) (ii)
Outlook
RATINGS ON ISSUES
Senior unsecured debt
Subordinated debt (Lower Tier 2)
Preference shares (former BPB-CV and former
BPCI)
BBB
bbb
Negative
BBB
BBB-
BB
French Certificats de Dépôt Programme A-2
(i) The issuer credit rating reflects the agency’s opinion of the
intrinsic creditworthiness of the bank combined with an
assessment of the potential for future support that the bank
might receive in the event of default (from government or from
the group to which it belongs).
Short-term: ability to repay short-term debt with a maturity
of less than one year (A-1+: best rating – C: worst rating)
Long-term: ability to pay interest and principal on debt with
a maturity of longer than one year (AAA: best rating – D:
default)
(ii) The SACP is a rating of the intrinsic creditworthiness of
the bank in the absence of external support (from government
or from the group to which it belongs). It is calculated on the
basis of an “anchor SACP”, which summarises economic and
industry risk for the Italian banking sector. This is then
adjusted to take account of bank-specific factors such as
capitalisation, market positioning, exposure to risk and the
funding and the liquidity situation, which are also assessed
from a comparative viewpoint.
MOODY'S
Long-term debt and deposit rating (I)
Short-term debt and deposit rating (II)
Baa2
Prime-2
Bank Financial Strength Rating (BFSR) (III) D+
Baseline Credit Assessment (BCA) (IV)
Outlook (deposit ratings)
Outlook (Bank Financial Strength Rating)
RATINGS ON ISSUES
Senior unsecured
Lower Tier 2 subordinated
Preference shares
(former BPB-CV and Banca Lombarda)
Euro Commercial Paper Programme
Covered Bond
baa3
Negative
Negative
Baa2
Ba1
Ba3(hyb)
Prime-2
A2
(I) The ability to repay long-term debt (maturing in or after one
year) in local currency. By using the JDA method (Joint
Default Analysis), this rating associates the financial strength
rating (BFSR – Bank Financial Strength Rating) with the
probability of intervention if needed by external support
(shareholders, the group to which it belongs or official
institutions).
(Aaa: best rating– C: default)
(II) The ability to repay debt in local currency maturing in the
short-term (due in less than one year).
(Prime -1: highest quality – not prime: speculative grade)
(III) This rating does not relate to the ability to repay debt, but
considers the bank’s intrinsic financial strength (by analysing
factors such as its geographical market presence, the
diversification of its activities, the financial basics, its
exposure to risk) in the absence of external support.
(A: best rating – E: worst rating)
(IV) The Baseline Credit Assessment represents the equivalent of
the Bank Financial Strength Rating on the traditional scale of
the long-term rating.
FITCH RATINGS
Short-term Issuer Default Rating (1)
F2
(1) The ability to repay debt maturing in the short-term (duration
of less than 13 months)
(F1+: best rating – D: worst rating)
Long-term Issuer Default Rating (2)
BBB+
Viability Rating (3)
bbb+
Support Rating (4) 2
Support Rating Floor (5)
BBB
Outlook (Long-term Issuer Default Rating) Negative
RATINGS ON ISSUES
Senior unsecured debt
BBB+
Lower Tier 2 subordinated
BBB
Preference shares
BB
Euro Commercial Paper Programme
F2
(2) The ability to meet financial commitments in the long-term,
independently of the maturity of individual obligations. This
rating is an indicator of the probability that an issuer will
default.
(AAA: best rating – D: default)
(3) An assessment of a bank’s intrinsic strength in the event that
it cannot rely on forms of external support (a: best rating - d:
default).
(4) A rating of the possibility of concrete and timely external
support (from the state or large institutional investors) if the
bank finds itself in difficulty (1: best rating – 5: worst rating).
(5) This rating gives additional information, closely linked to the
Support Rating, in that for each level of the Support Rating it
identifies the minimum level which the Issuer Default Rating
could reach if negative events were to occur.
Covered Bonds
AA-
15

Notice of call 1
An Ordinary General Meeting of the Shareholders of Unione di Banche Italiane Scpa is convened in first
call on Friday 19 th April 2013 at 5:00, p.m. at the registered address of the bank, at No. 8 Piazza Vittorio
Veneto, Bergamo, and in second call on Saturday 20 th April 2013 at 9:30 a.m. at the New Bergamo
Trade Fair, in Via Lunga, Bergamo to discuss and resolve on the following
agenda
1) Appointment of the members of the Supervisory Board and of the Chairman and Senior Deputy
Chairman for the three-year period 2013-2014-2015 and the determination of the related
remuneration in accordance with the Articles of Association.
2) Proposal for the allocation and distribution of profits, after first presenting the separate and
consolidated financial statements as at and for the year ended 31 st December 2012.
3) Report on remuneration.
4) Proposal for setting remuneration policies for members of the Management Board.
5) 2013 incentive scheme based on financial instruments:
proposal to pay a portion of the variable remuneration of “top management” and the “highest
management level of the control functions” by assigning ordinary shares of the Parent UBI Banca to
them.
***
The subscribed and paid up share capital of UBI Banca Scpa amounts to Euro 2,254,367,552.5 consisting of
901,747,021 shares with a nominal value of Euro 2.50 each. At the date of this notice UBI Banca possesses 1,700,000
treasury shares.
The total number of registered shareholders with the right to vote is 87,150.
Persons wishing to participate in Shareholders Meetings, to exercise voting rights and to be eligible for election to
corporate bodies must have been a registered shareholder for at least 90 (ninety) days from the date of registration in
the shareholders’ register.
Legitimate entitlement to participate in Shareholders’ Meetings and to exercise voting rights is certified by a
communication to the Bank, performed – pursuant to Art. 83-sexies of Legislative Decree No. 58 of 24 th February 1998
– by the relative intermediary, a member of the Monte Titoli Spa centralised management system, on the basis of its
accounting records, in favour of the party holding the right to vote. In this regard, Registered Shareholders for whom
the said communication has been made to the Bank by the end of the third market trading day prior to that set for the
Shareholders’ Meeting in first call may attend the Shareholders’ Meeting, in accordance with the law. The legitimate
right to attend and vote nevertheless remains, should the communications be received by the Bank later than the
aforementioned time limit, provided they are received before the commencement of the proceedings of each single
session of the shareholders’ meetings.
Registered shareholders holding shares that have not yet been dematerialised pursuant to the legislation and
regulations in force must deliver them in good time to an approved intermediary in order to perform the
dematerialisation procedure required and to make the communication mentioned above.
The communication performed by the intermediary shall contain a special section which may be used to authorise a
proxy by signing the said section.
Each registered shareholder has the right to one vote only no matter how many shares are held and it may not be
exercised by correspondence.
Each Registered Shareholder has the right to be represented by written proxy issued to another Registered
Shareholder entitled to attend the Meeting. Proxies may not be granted to any members of the Management Board or
the Supervisory Board, or to employees of the Bank, or to any of its subsidiaries or to any member of the management
or control bodies, or employees of the aforesaid subsidiaries, or to the firm of external statutory auditors appointed or
to the person responsible for the statutory audit of the Bank, or to parties to whom one of the other conditions of
incompatibility apply according to the law.
Each registered shareholder may act as a proxy for not more than 3 (three) other registered shareholders.
***
As concerns item 1) on the agenda, the election of the members of the Supervisory Board shall be performed in
accordance with the law and the Articles of Association by the Shareholders' Meeting on the basis of lists, which may
be submitted by registered shareholders or by the Supervisory Board, according to the following procedures.
The lists of candidates, signed by those submitting them, must be deposited at the registered offices of the Bank
between by the twentyfifth day prior to the Shareholders’ Meeting in first call and they must contain the names of at
1 Published on 14 th March 2013 on the corporate website www.ubibanca.it and also in the principal national newspapers, in local
newspapers in areas where the Group has a longstanding market presence and in the Official Journal No. 32 of 16 th March 2013.
16

least two candidates and also, where they are composed of at least three candidates, comply with the gender
proportions established by Law No. 120 of 12 th July 2011 in order to ensure that a balance is maintained between
them on the Supervisory Board. Submission of the lists may be performed by remote means of communication defined
by the Management Board in a manner, stated in the notice to convene, which allows those depositing the lists to be
identified. The signature of each Registered Shareholder submitting a list must be duly authenticated in accordance
with the law by employees of either the Bank or its subsidiaries specifically authorised by the Management Board.
The lists must also be accompanied by information concerning the identity of the registered shareholders who have
submitted them, with details of the number of shares and therefore the total percentage of the shares held by the
registered shareholders submitting them and, within the time limits set by the legislation and regulations in force, by
a communication which demonstrates ownership of the investment, as well as all other information required by the
regulations in force.
Exhaustive information must be deposited together with each list on the personal and professional characteristics of
the candidates as well as a declaration by the candidates themselves stating that they are in possession of the
requirements specified by the law and by regulatory and Articles of Association provisions and also that they accept
their candidature.
In cases where only one list has been presented within the time limit mentioned above, or in any event in the cases
provided for by the regulations in force, the Bank reports this immediately with a press release sent to at least two
press agencies. In this case lists may be presented up until the third day following the date of the time limit cited.
Again in this case the limits laid down in the subsequent paragraph are reduced by half.
The election of the members of the Supervisory Board shall take place on the basis of lists presented:
a) directly by at least 500 (fivehundred) Registered Shareholders who have the right to participate in and vote in the
Shareholders' Meeting called to elect the Supervisory Board, who provide documentary evidence of the right
according to the legislation in force, and that is by one or more registered shareholders who represent at least
0.50% of the share capital, calculated on the basis of the share capital existing 90 (ninety) days before the date set
for calling the Shareholders' Meeting and to be indicated in the notice given to call the meeting;
b) by the outgoing Supervisory Board on the basis of a proposal made by the Appointments Committee and with the
approval of the Supervisory Board passed with the votes of at least 17 (seventeen) of its members, and in any case
supported as reported in the preceding letter a) by at least 500 (fivehundred) Registered Shareholders who have
the right to participate in and vote in the Shareholders' Meeting called to elect the Supervisory Board, who provide
documentary evidence of the right according to the legislation in force, and that is by one or more registered
shareholders who represent at least 0.50% of the share capital, calculated on the basis of the share capital
existing 90 (ninety) days before the date set for calling the Shareholders' Meeting and to be indicated in the notice
given to call the meeting.
Each Registered Shareholder may participate in the presentation of one list only: if this rule is not observed, the
Registered Shareholder’s signature is not counted as valid for any list.
Each candidate may be included in one list only on pain of ineligibility.
Lists presented that fail to observe the procedures reported above are considered as not presented.
Each Registered Shareholder may vote for one list only.
The election of the Supervisory Board shall be performed as follows:
a) in the case of the presentation of more than one list and without prejudice to the provisions of the following letter
b), 22 (twentytwo) members of the Supervisory Board are taken from the list that obtains a majority of Registered
Shareholders' votes in the order of preference stated on it;
b) 1 (one) member of the Supervisory Board is taken from the list with the second highest number of votes which is
not connected within the meaning of the regulations in force with the list mentioned in letter b), and it is the name
of the first person on that list. If that list has obtained at least 15% of the votes counted in the Shareholders’
Meeting, in addition to the first name indicated on that list, a further 2 (two) members of the Supervisory Board
shall be taken from that list, and they shall be the second and third persons on that list. However, if that list has
obtained at least 30% of the votes counted in the Shareholders’ Meeting, in addition to the first name indicated on
that list a further 4 (four) members shall be taken from that list, and they shall be the second, third, fourth and
fifth persons on that list. Consequently 20 (twenty) or 18 (eighteen) members respectively of the Supervisory Board
shall be taken from the list that obtains a majority of Registered Shareholders’ votes in the order of preference
stated on it.
c) if the minority list mentioned in letter b) should contain the names of only two candidates, the third and if
necessary the fourth and fifth members of the board, where at least 30% of the votes are obtained, shall be taken
from the majority list consisting of the persons not already elected on that list in order of preference stated on it.
If, after identifying the candidates to be taken from the lists which received the majority of the votes on the basis of the
order in which they are indicated on the lists to which they belong, the gender proportions required under Law No.
120 of 12 th July 2011 are not complied with, then those members of the Supervisory Board taken last from the
aforementioned lists whose appointment would violate the said law are considered not elected. In this event the
number of those board members indicated on the same list to which they belong shall be appointed which allows
compliance with the composition requirements for the Supervisory Board in accordance with Law No. 120 of 12 th July
2011 and with the Articles of Association, again proceeding in the order in which those persons are indicated on the
list to which they belong. In particular, in this circumstance, the candidates to be appointed belonging to the gender
that is less represented on the basis of the results of the vote will be taken from each list in proportion to the total
number of candidates elected on each list according to the results of the voting. In this event, if the minority list
pursuant to letter c) has not complied with the gender proportions established by Law No. 120 of 12 th July 2011, the
candidates to be appointed belonging to the less represented gender will be taken from the list that obtained the
greatest number of votes only.
If only one list is validly proposed and this obtained the majority required for an ordinary Shareholders' Meeting, then
all 23 members of the Supervisory Board shall be taken from that list.
The Shareholders’ Meeting shall proceed by a relative majority vote to appoint those members of the Supervisory
Board, who for any reason whatsoever could not be elected by means of the procedures mentioned in the preceding
paragraphs or if no list at all is presented, again in compliance with the requirements for the composition of the
17

Supervisory Board pursuant to Law No. 120 of 12 th July 2011 and to the Articles of Association; in the event of a tied
vote the candidate more senior by age is elected.
If two or more lists obtain an equal number of votes, those lists must be voted on again until they no longer receive an
equal number of votes.
The positions of Chairman and Senior Deputy Chairman of the Board are reserved to the first and second members
respectively on the list that obtains a majority of votes, or on the only list presented or to the members appointed as
such by the Shareholders’ Meeting if no list is presented at all.
Furthermore, in accordance with article 44 of the Articles of Association, “the Members of the Supervisory Board must
be in possession of the requirements of integrity, professionalism and independence prescribed by regulations
currently in force. At least 15 (fifteen) of the members of the Supervisory Board must be in possession of the
requirements of professionalism required by the legislation currently in force for persons who perform functions as
directors of banks.
In particular, at least 3 (three) members of the Supervisory Board must be chosen from amongst persons enrolled in
the register of external statutory auditors who have exercised statutory auditing activities for a period of not less than
three years.
Furthermore, the composition of the Supervisory Board must ensure, in compliance with the provisions of Law No.
120 of 12 th July 2011, that a balance is maintained between genders for the period provided for by that law.
While mandatory regulations of the law, the Supervisory Authority or other regulations must be complied with,
persons already holding the office of full statutory auditor, or who are members of other supervisory bodies in more
than five listed companies and/or their parent companies or subsidiaries, cannot hold office as a member of the
Supervisory Board.
***
The lists of candidates, together with the related documentation required by the legislation in force and by the Articles
of Association, signed by those presenting them, must be deposited, in accordance with the provisions mentioned
above, by following one of the following procedures:
- at the “Management Board and Registered Shareholders Support Area” of the Banca at 8 Piazza Vittorio Veneto
Bergamo by 5:00 p.m. on 25 th March 2013;
- by sending them by certified electronic mail to the following address “soci.comunicazioni@pecgruppoubi.it”, by the
absolute deadline of 25 th March 2013 and by attaching the documents in pdf format with a digital signature.
In relation to the provisions of paragraph six of article 45 of the Articles of Association, the share capital outstanding
as at 19 th January 2013 amounted to €2,254,367,512.5 divided into 901,747,005 shares of €2.50 each.
The lists received by the ”Management Board and Registered Shareholders Support Area” will be progressively
registered and numbered on the basis of the day and time of receipt.
When lists are deposited, a record of receipt of the documentation shall be prepared, signed by at least one of the
presenters of the list and by a member of General Management or by senior managers or management staff of the
“Management Board and Registered Shareholders Support Area” of UBI Banca.
In compliance with the regulations in force, the lists submitted shall be made available to the public at least twenty
one days before the Shareholders' Meeting at the registered address of the Bank and also published on the website of
UBI Banca (www.ubibanca.it – registered shareholders section).
Those who intend to present a list of candidates for the Supervisory Board may contact the “Management Board and
Registered Shareholders Support Area” of the Bank.
In compliance with Bank of Italy recommendations concerning regulations governing the organisation and corporate
governance of banks, the ideal profiles of candidates for membership of the Supervisory Board are made available at
the Bank and on the corporate website at www.ubibanca.it in the corporate governance section.
In order to facilitate procedures for the presentation of candidates to the Supervisory Board, the following may be
downloaded from the UBI Banca website (www.ubibanca.it – registered shareholders section) as examples to follow:
- form for the presentation of lists
- form for candidates declarations that they accept their candidature and certifying that they possess the
requirements to take up office.
***
The documentation relating to the items on the agenda will be deposited and made available to the public at the
registered address of the Bank and on the website (www.ubibanca.it – registered shareholders section) and it will be
filed with Borsa Italiana Spa within the time limits and according to the procedures of the Law and regulations.
Registered Shareholders may view and obtain copies of the aforementioned documentation in accordance with the law
by applying in advance to the “Management Board and Registered Shareholders Support Area”.
Bergamo, 12 th March 2013
The Chairman of the Management Board
Emilio Zanetti
18

The macroeconomic scenario
In 2012 the decisions of the European Central Bank (ECB), domestic reforms and European
economic governance reform to a large extent dispelled the pessimism about the single
currency that had worsened the sovereign debt crisis and pushed risk premiums on
government securities to exceptionally high levels in some EU member states.
Specifically, in the second quarter the emergence of fresh tensions had fed a growing
contagion effect, further sustained by the perception of a lack of cohesion by governments in
orienting the reform of governance in Europe and in improving the crisis management
mechanisms within the euro area.
Alongside the persistence of Greece's financial woes there have been growing difficulties for
the Spanish banking industry, which required a substantial government bail-out, leading its
government to make a formal request to the EU for funds to recapitalise its banks. In the last
week of June Cyprus also made a formal request to the European authorities for aid for its
financial sector, which is burdened by the amount of Greek debt in its portfolio.
The first step towards preventing the risk of a break-up of the euro area, breaking the vicious
circle between sovereign debt and banks, came with the summit in Brussels on 28 th -29 th June
and the announcement of a joint, independent banking supervision system. This, along with
an anti-spread shield, strongly pushed for by Italy, joined the European Stability Mechanism
(ESM) which is purely for the rescue of member states in difficulty.
The official decision by the ECB to introduce the plan for outright transactions in the
secondary sovereign bond markets for bonds issued by member states experiencing difficulties
(outright monetary transactions, or OMT) played a major part in easing tensions, and dispelled
any doubts about the concrete introduction of an ‘anti-spread shield’.
In the last quarter further events took place that will restore confidence in the market:
• the ratification in October of the treaty establishing the European Stability Mechanism
(ESM) which became effective alongside the temporary European Financial Stability Facility
(EFDF);
• the concession to Greece of an additional two years (to 2016) to reduce its deficit to GDP
ratio to less than 3% 1 ;
• the positive outcome of the Greek government’s 2 operation to repurchase its debt in issue
(buy-back), which was accomplished in December and allowed approval of the second
payment of €49.1 billion by the EFSF 3 ;
• the payment of €37 billion in aid to Spain, to be used to recapitalise the four struggling
nationalised banks;
• the reaching of an agreement between the 27 EU member states on 12 th December in which
a single Europe-wide supervisory mechanism (SSM) was set up. This comprises the ECB
and national supervisory authorities of the member states (in the euro area and other EU
member states).
The agreement should be fully operational from 1 st March 2014. It divides tasks between the ECB,
which will directly supervise major banks (with assets in excess of €30 billion or 20% of GDP), and the
national central banks, which will monitor the other institutions, under the supervision of the ECB 4 . The
introduction of a single supervisory mechanism will allow direct recapitalisation of struggling banks by
the ESM, instead of bailing out member states with loans that have the effect of worsening their debt
position.
1 At the same time the target for public debt to GDP ratio for 2020 has been raised from 120% to 124%.
2 The operation involved securities with a nominal value of €31.9 billion, allowing the debt to be reduced by about ten percentage
points of GDP.
3 €34.3 billion was paid in December, €16 billion of which for the recapitalisation of the banking sector and €11.3 billion for the
buyback, while the remaining €14.8 billion will be paid during the first quarter of 2013.
4 It is estimated that under the planned division of tasks around 200 banks should be under the direct supervision of the European
Central Bank, while 5,800 banks will be supervised by the national regulatory bodies. The ECB will also have the power to intervene,
where necessary, even in the case of banks not falling within its remit of direct supervision, while the central banks, according to
their respective domestic legislation, will in any case retain their powers to obtain information and to carry out inspections of banks.
20

It was also decided at the summit that the ECB will retain its EU-level supervisory powers and the
voting mechanism was reformed with a dual-majority system designed to protect EU countries not part
of the euro area which will therefore not be part of the single supervisory mechanism.
Completion of the banking union should therefore continue, before the end of June 2013,
with the reaching of an agreement on the creation of a European bank deposit guarantee
fund and an agency for managing the liquidation of insolvent banks.
Again with reference to European banking regulation, at the beginning of 2013 the Basel Committee
reviewed bank liquidity standards, with specific reference to the definition of liquidity capital ratio (LCR),
with a more gradual introduction of the 100% standard measure and a widening of the assets that can be
used in calculating the ratio.
In line with what has already happened in the United States, on 28 th February 2013 the European
Parliament and Council reached a preliminary agreement, which will need to be approved by a majority of
the 27 EU member-states, postponing the gradual introduction of the new rules on capital introduced by
Basel III.
The interventions reported above have played a part in reducing government bond spreads in
countries at risk 5 . As the graph shows, after peaking at over 500 basis point in July, the BTP-
Bund spread has progressively fallen, ending the year at 322 6 . This improvement has
continued into the first few weeks of the new year, also as a result of a slowdown in the flight
to quality that has
benefited public debt
Ten-year BTP-Bund spread (2010-2012)
Graph No. 1
in the core countries
600
beginning in early
550
2011. There has been
a sharp reversal in
500
the trend after the
elections of 24 th -25 th
450
February.
400
Finally, the new
Fiscal Compact came
into force on 1 st
January 2013. This
requires member
states to:
- introduce a rule
requiring their
structural budgets
to be balanced and
not to deviate
Basis
points
significantly from
this, which is
Source: Thomson Financial Reuters
defined as a medium-term objective;
- gradually reduce the debt in excess of 60% of GDP 7 .
350
300
250
200
150
100
50
0
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2010 2011
Given the increasingly difficult economic climate and the fact that inflation forecasts are in
any case low, the monetary policies adopted in 2012 by the central banks of developed and
emerging countries continued to be oriented towards support for growth, both by intensifying
the use of non-conventional operations, and by further loosening monetary conditions where
possible 8 .
2012
2013
5 Reducing the cost of Spain's debt has meant that for the moment it is not strictly necessary for the Spanish government to request
aid from the ESM.
6 According to a study carried out by Consob in 2012 the contagion effect for Italy is estimated to be around 200 basis points.
7 Specifically, after ending of the procedures for excessive deficits the pact requires deficits to converge towards the “medium-term
objective” at a certain pace, and with reference to debt, requires the debt in excess of 60% of GDP to be reduced at an average rate of
one twentieth per year.
8 In July the ECB reduced the main refinancing rate by 25 basis points to 0.75%, while for non-conventional operations, it introduced
the aforementioned OMT, a programme to buy government bonds on secondary markets which will affect government bonds with a
residual life of between one and three years without restrictions on volume or duration. At the meeting in early December it was then
decided to extend all the refinancing operations by means of fixed-rate tender procedures with full allotment of all bids for as long as
deemed necessary, and in any case at least until early July 2013.
21

The volatility on the 1.62
financial markets 1.58
also affected the 1.54
foreign exchange
1.50
markets, especially
the euro, which,
1.46
1.42
compared with the
1.38
other leading
1.34
international
currencies,
weakened between
1.30
1.26
March and August
as the sovereign debt
1.22
1.18
crisis worsened, 1.14
picking up gradually 1.10
since then.
1.06
Graph 2 and the
table also show the
substantial
devaluation of the yen against
both the euro and the dollar
that took place during the last
quarter of the year, which was
identified by the Japanese
government as a possible
means of relaunching the
Japanese economy.
Euro-dollaro and dollaro-yen exchange rates (2009-2012)
The main exchange rates and oil (Brent) and commodities prices
Dec-12
A
Sep-12
B
€/$ $/Yen (right axis)
G F M A M G L A S O N D G F M A M G L A S O N D G F M A M G L A S O N D G F M A M G L A S O N D
2009 2010 2011
2012
Jun-12
C
Mar-12
D
Dec-11
E
Graph No.2
% change
A/E
Euro/Dollar 1.3194 1.2858 1.2658 1.3343 1.2945 1.9%
Euro/Yen 114.46 100.13 100.97 110.47 99.57 15.0%
Euro/Yuan 8.2200 8.0776 8.0416 8.4028 8.1449 0.9%
Euro/Franc CH 1.2074 1.2078 1.2004 1.2035 1.2133 -0.5%
Euro/Sterling 0.8127 0.7950 0.8056 0.8331 0.8328 -2.4%
Dollar/Yen 86.74 77.90 79.77 82.79 76.94 12.7%
Dollar/Yuan 6.2301 6.2841 6.3530 6.2975 6.2939 -1.0%
Futures - Brent (in $) 111.11 112.39 97.80 122.88 107.38 3.5%
CRB Index (commodities) 295.01 309.30 284.19 308.46 305.30 -3.4%
103
101
99
97
95
93
91
89
87
85
83
81
79
77
75
Source: Thomson Financial Reuters
The macroeconomic background
In the course of 2012 the world economy weakened due to slower growth in the United States
and emerging countries and to Japan and the euro area entering into recession. Within the
euro area the contrast grew between Germany and France, which saw modest growth, and
peripheral countries such as Spain and Italy, which are in deep recession.
The major imbalances in the leading industrialised economies and continuing geopolitical
tensions in the Middle East means that the pace of growth will remain slow in the coming
months, especially in advanced countries, while it should be more dynamic in the emerging
markets 9 .
The Federal Reserve has been very active in carrying out non-conventional operations, with a view to making financial conditions
more accommodating, in order to deliver substantial improvements to the labour market: In June it decided to extend Operation
Twist until the end of the year, which involves purchasing government bonds with maturities of between six and thirty years, to be
financed through the sale of securities with maturities of less than three years. With the end of the previous programme it
announced the launch of outright buybacks of long-term treasury bonds at a rate of $45 billon a month. Furthermore, in September
it also launched a new programme for the purchase of mortgage-backed securities for $40 billion a month with no time limits. With
regard to interest rates the Fed linked the changes in official rates to set inflation and unemployment levels: reference rates will
remain between 0%-0.25% while unemployment remains higher than 6.5%. The inflation forecast for one-two years will not be more
than half a percentage point higher than the 2% target and long-term inflation forecasts will remain closely linked.
Also in Japan the central bank has progressively increased the purchase of government bonds from 70 billion yen to 101 billion yen,
extending it for the whole of 2013. It has also set a specific inflation target of 2%. For the time being the reference interest rate has
been confirmed at between 0% and 0.1%.
As far as the main emerging economies are concerned, China reduced compulsory reserves by 0.5 percentage points both in
February and May 2012, which now stands at 20%, while the bank lending rate underwent two reductions for a total of 56 basis
points to 6%. The Central Bank of Brazil was especially active, reducing the reference rate seven times between January and
October 2012 from 11% to the record low of 7,25%. The Reserve Bank of India cut its repo rate by 50 basis points and then made a
further cut of 25 basis points bringing it to 7.75% in January 2013. In contrast, the Central Bank of Russia implemented a 25 basis
point rise in September to 8.25%.
9 According to the January 2013 update to the International Monetary Fund estimates, this year the global economy is expected to
grow by 3.5% (3.2% in 2012), which is the combination of 1.4% growth for advanced countries and 5.5% growth for emerging
nations.
22

The economic situation was one of high unemployment levels, which rose further in Europe,
and moderate inflation during the summer months following the rise in commodities prices,
which then fell back as a result of reduced growth forecasts.
The price of Brent oil was especially volatile, under the influence of tensions in the oilproducing
countries and the embargo against Iran. After rising to over $125 a barrel in March,
prices fell sharply to
bellow $90 in June,
Brent oil prices (2009-2012) Graph No. 3
130
partly as a result of
125
increased crude oil 120
115
supplies, before picking
110
up again in July and 105
August and stabilising at
around $110 in the last
quarter.
100
95
90
85
80
75
70
According to initial
65
estimates, the US
60
economy seems to have
55
50
come to a standstill in
45
the fourth quarter. GDP
40
35
fell 0.1% year-on-year,
G F M A M G L A S O N D G F M A M G L A S O N D G F M A M G L A S O N D G F M A M G L A S O N D
2009 2010 2011 2012
after rising 3.1% in the
previous quarter and
1.3% and 2% in the second and first quarters respectively.
On average US GDP rose 2.2% overall during the year compared with 1.8% in 2011, sustained
by domestic consumer and investment demand in which the property sector once more played
a positive part. In contrast the contribution from balance of trade was zero.
The situation on the jobs market appears to be slowly and gradually improving, with the
unemployment rate at 7.8% in December, the lowest level in the last four years. It has
remained more or less stable since August after falling continuously since the second half of
2011 (at the end of 2011 it was 8.5%). The 2012 average of 8.1% is lower than the previous
year’s average of 8.9%.
Inflation, which fell from 3% in December 2011 to 1.4% in July 2012, climbed rapidly back up
to 2.2% in October to then fall back again to 1.7% in December. Core inflation (net of food and
energy products) was slightly down from June and ended the year at 1.9% (compared with
2.2% at the end of 2011). The average figure for 2012 was 2.1% (compared with 3.2% in 2011).
During the year the negative balance of trade fell slightly to $540.4 billion (down 3.5%), mainly
benefiting from a smaller deficit with Opec countries and Africa. On the other hand the deficit
with China increased further.
The US growth prospects remain strongly conditioned by the need to balance the public
accounts. On 2 nd January a last-minute temporary measure was passed which avoided the
‘fiscal cliff’, the package of automatic increases in all the personal and corporate income tax
rates and cuts in public spending that would probably have pushed the US economy into
recession 10 . The failure to reach a parliamentary agreement at the end of February 2013 in
any case determined the automatic implementation of gradual spending cuts worth $85
billion, which according to estimates could lead to a potential loss of 750 thousand jobs during
the year, bringing about a 0.6% fall in GDP.
10 This agreement extends the tax relief introduced in 2001 and 2003 with the exception of relief for individuals with incomes in
excess of $400 thousand a year; the rate for the latter group has been increased from 35% to 39.6% and capital gains tax has been
increased from 15% to 20%. It was confirmed that the relief on social security contributions for workers would be abolished.
23

Actual and forecast data: industrialised countries
Percentages
Gross domestic product
Consumer prices
(average annual rate)
Unemployment
(average annual rate)
Deficit (+) Surplus (-) Public
sector (% of GDP)
Reference interest
rates
2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) Dec-11 12-dic-13
United States 1.8 2.2 1.9 3.2 2.1 1.8 8.9 8.1 7.6 10.1 8.5 6.6 0-0,25 0-0,25
Japan -0.6 1.9 1.0 -0.3 -0.1 0.2 4.5 4.3 4.3 8.9 9.1 9.1 0-0,10 0-0,10
Euro Area 1.4 -0.6 -0.3 2.7 2.5 1.8 10.2 11.4 12.2 4.2 3.5 2.8 1.00 0.75
Italy 0.4 -2.4 -1.0 2.9 3.3 2.0 8.4 10.6 11.6 3.8 3.0 2.1 - -
Germany 3.0 0.7 0.5 2.5 2.1 1.8 5.9 5.5 5.7 0.8 -0.1 0.2 - -
France 1.7 0.0 0.1 2.3 2.2 1.6 9.6 10.3 10.7 5.2 4.6 3.7 - -
Portugal -1.6 -3.2 -1.9 3.6 2.8 0.6 12.9 15.7 17.3 4.4 5.0 4.9 - -
Ireland 1.4 0.7 1.1 1.2 1.9 1.3 14.7 14.8 14.6 13.4 7.7 7.3 - -
Greece -7.1 -6.4 -4.4 3.1 1.0 -0.8 17.7 24.7 27.0 9.4 6.6 4.6 - -
Spain 0.4 -1.4 -1.4 3.1 2.4 1.5 21.7 25.0 26.9 9.4 10.2 6.7 - -
United Kingdom 0.9 0.2 0.9 4.5 2.8 2.6 8.0 7.9 8.0 7.8 6.3 7.4 0.50 0.50
, ,
(1) Forecasts Source: European Economic Forecast and Official Statistics
Strong growth in China, the world’s second largest economy, continued during 2012, although
at a slower pace than in previous years. GDP rose 7.8% year-on-year (+9.3% in 2011), after a
gradual slowdown in the first three quarters (8.1%, 7.6% and 7.4%) and an improvement in
the last quarter (7.9%).
All the key indicators of domestic demand made important contributions during the year.
Fixed investments rose 20.6%, driven by manufacturing (up 22%). Retail sales of consumer
goods were up 14.3%. Industrial production rose 10% with peaks of 12% for the chemicals
and computer components industries.
As regards trade, exports increased more than imports (7.9% and 4.3% respectively), creating
a surplus of $231 billion which further strengthened the currency reserves, which rose to
$3,310 billion at the end of 2012, over a third of which is invested in US government
securities.
Inflation slowed from 4.5% in December 2011 to 1.7% in October, regaining momentum at the
end of the year at 2.5% (the 2012 average was 2.6%) driven by foodstuffs (up 4.2%).
Actual and forecast data: the principal emerging countries
Gross domestic product
Consumer prices (average
annual rate)
Unemployment (average
annual rate)
Reference interest
rates
Percentages 2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) Dec-11 Dec-12
China 9.3 7.8 8.1 5.4 2.6 3.0 4.1 4.1 4.1 6.56 6.00
India 8.0 4.7 6.0 8.9 9.3 9.6 n.a. n.a. n.a. 8.50 8.00
Brazil 2.7 0.9 3.5 6.6 5.4 4.9 6.0 5.5 6.5 11.00 7.25
Russia 4.4 3.6 4.1 8.4 5.1 6.6 6.6 5.7 6.0 8.00 8.25
, , , , , ,
(1) Forecasts Source: Prometeia, IMF and official statistics
Economic performance in the other emerging nations continued to slow. Growth rates are expected to
increase in the immediate future, albeit remaining below pre-crisis levels.
In the third quarter India’s GDP rose 2.9% year-on-year (compared with 3.8% and 5.6% in the first and
second quarters respectively), affected by domestic consumer and investment demand and by the negative
balance of trade resulting from stronger imports over exports. In November industrial production fell,
confirming the mainly negative trend of recent months. Inflation went back up to 10.6% in December due to
increased food prices, but is expected to fall in 2013.
Brazil reacted to the slowdown in the global economy by introducing barriers to the movement of capital in
order to curb currency appreciation, while some domestic prices were regulated in order to keep inflation
under control (it stood at 5.8% in December) and incentives for the industrial sector were tied to
interventions in the labour market. At the end of 2012 GDP had risen 0.9% year-on-year.
In the third quarter Russian GDP had risen 0.8% compared with the previous quarter (0.4%), thanks to the
rise in investments and stable consumption, which supported import growth (up 6.3% compared to the
second quarter). Exports also rose again slightly after falling in the first two quarters. High oil prices meant
the trade surplus remained substantial, while inflation has remained relatively stable since September
(6.6% in December). In December the unemployment rate was 5.3% (6.1% at the end of 2011).
24

Japan is experiencing another recession. In the fourth quarter GDP fell by 0.1%, for the third
consecutive quarter (down 1% and 0.2% in the two previous quarters and up 1.5% in the first
quarter), although it did show some signs of recovery in consumption. However, this was more
than offset by the fall in investments (except for the residential sector) and inventories, as well
as by the still negative contribution from foreign demand, even if this was improving.
In December industrial production rose 2.4% compared to the previous month, but the yearon-year
change worsened, falling for the seventh consecutive month (down 7.9%). December’s
Tankan report showed that the forecast for the entire industrial sector, especially
manufacturing, is still negative, with a small improvement for SMEs only.
Unemployment remained stable until April, and fell in the following months to 4.2% in
December (4.5% at the end of 2011), while price deflation continued (down 0.1% in December).
Despite a high level of public debt (estimated at 221.2% of GDP in 2012), the new government
that came into power in the autumn introduced an impressive programme of public works
worth a total of 20 thousand billion yen focusing on seismic prevention and reconstruction,
measures designed to boost competitiveness and welfare.
The euro area also remained in recession, with GDP falling 0.6% in the fourth quarter
compared with the previous quarter (down 0.1% and 0.2% in the two previous quarters and
unchanged prior to that). All the major economies in the euro area saw a slowdown between
October and December, including Germany (down 0.6%).
Overall GDP fell by an average of 0.6% during the year (compared with a rise of 1.4% in 2011).
This was due to a fall in fixed investments and consumption, which contrasted with an
increase in the trade surplus brought about by a significant fall in imports.
In December the monthly trend for industrial production went back into positive figures (up
0.7%), thanks to recovery in Germany and Italy. However, the year-on-year trend remains
negative, but improving (down 2.4%).
The unemployment rate rose steadily to reach 11.7% (10.7% at the end of 2011), with the
situation critical in some of the countries worst hit by the debt crisis: Greece (26.8% in
October), Spain (26.1%), Portugal (16.5%) and Ireland (14.7%).
As far as prices are concerned, in the last few months of 2012 the inflation rate measured by
the “Harmonised Index of Consumer Prices” stood at 2.2%, the lowest point of the year, after
the temporary rise during the summer months (2.6% in August and September and 2.7% at
the end of 2011). Net of foodstuffs and energy products it has been stable at 1.6% since
September, after slowly falling from 2% at the end of 2011. The average inflation for the year
was 2.5% (compared with 2.7% in 2011).
The economic prospects for the euro area are still conditioned by the risks involved in the slow
rate of implementation of structural reforms, potential impact of tensions in countries that
produce raw materials and imbalances existing in the leading industrialised nations. These
factors could delay the recovery of private investment, employment and consumption.
Of the leading euro area economies, Italy is one of the least dynamic. In the last quarter GDP
fell for the sixth consecutive quarter by 0.9% (after falls of 0.2%, 0.7% and 0.8% in the
previous quarters).
Overall GDP fell by an average of 2.4% in 2012 (compared with a rise of 0.4% in 2011),
reflecting particularly poor consumption figures and a persisting weakness in fixed
investments, despite a good performance by net foreign demand.
The poorer macroeconomic background in 2012 was mainly due to the increased cost of
borrowing and reduced credit facilities, brought about by the worsening sovereign debt crisis
and higher spreads. The measures taken to correct public finances in the second half of 2011
in order to avoid conditions on the financial markets spiralling out of control had a negative
effect on demand, which can be estimated as more than one percentage point of annual
growth. The slowdown in the international economy and global trade were responsible for
subtracting a further 0.6 of a percentage point from the annual growth figure, while
approximately another half a percentage point was lost due to the increase in uncertainty and
loss of confidence among households and businesses, which impacted on consumption and
investments.
GDP is expected to contract further in 2013 as a result of the slowdown in the global economy
and foreign demand as well as the impact of budget measures.
25

Production continued to fall as the (seasonally adjusted) industrial production index shows,
which was down 6.6% year-on-year in December (for the sixteenth consecutive time). On
average industrial production fell 6.7% in 2012 compared with 2011, with contractions in all
sectors, particularly the ‘manufacture of rubber and plastic products’ (down 10.4%), 'electrical
equipment manufacturing' (down 10%), the 'wood, paper and printing industry' (down 9.9%)
and 'textiles' (down 9.4%).
The situation on the labour market also appears to be continuing to worsen, the
unemployment rate having risen to 11.2% from 9.5% a year earlier. The 15-24 age range has
been the most seriously affected age range (36.6% 11 ). The general figure has also benefited
from the input of state unemployment schemes, with a 12.1% increase in the use of the
government’s temporary lay-off benefits scheme (CIG). The total number of hours authorised
in 2012 was 1,090.6 million, compared with 973.2 million in 2011, close to the peak of
1,197.8 million reached in 2010 12 .
As far as prices are concerned, the inflation rate measured by the Harmonised Index of
Consumer Prices remained at over 3% until September, peaking at 3.8% in April, and then fell
to 2.6% in November and December (compared with 3.7% at the end of 2011), partly because
the statistical effects relating to the increase in VAT in autumn 2011 were no longer making
themselves felt. Average inflation for the year was 3.3% (2.9% in 2011), with significant
increases in ‘housing, water, electricity and fuel’ (up 7.1%) and ‘transport’ (up 6.5%).
The balance of trade accumulated a surplus of €11 billion, the biggest since 1999 (in 2011
there was a deficit of €25.5 billion), benefiting from the significant surplus generated by nonenergy
products (+€74 billion), two thirds of which are classified as plant and equipment.
Exports were driven by trade with non-EU countries, and rose by 3.7% (compared with a rise
of 11.7% in 2011), while imports fell overall by 5.7% (up 9.3% in 2011), especially from EU
countries.
Based on initial estimates from ISTAT, the benefits from higher tax revenues reduced the
deficit to GDP ratio (net of property sales and EFSF loans) to 3% (compared with a revised
figure of 3.8% in 2011). This was in line with the commitment made to Europe to balance the
structural budget in 2013. However the debt-to-GDP ratio rose by more than six percentage
points to 127% (compared with a revised figure of 120.8% in 2011), also as a result of the
sharp fall in production.
Financial markets
The trend for Italian yield curves reflects the
gradual reduction in the perceived risk of
Italian government securities during 2012. In
the first half of the year the downward slope in
the curve benefited from the liquidity
generated by LTROs carried out by the ECB –
mainly used by intermediaries to buy
government securities – and from corrective
measures taken by the government in the
expectation that the European reference rate
would be reduced, as was the case in early
July. The further reduction in the second half
of 2012 reflects the markets' renewed
confidence after the ECB governor's
announcement that there was no going back
11 The figure shows the percentage of unemployed young people out of the total of young people in work or seeking work.
12 Between January and November 2012 1,285,299 unemployment applications (up 14.5% compared with the same period in 2011),
and 133,052 redundancy applications were made (up 17.8%).
26

on the euro last July, and the announcement in September of a new programme of
government security purchases on the secondary market.
As the table shows, the performance of equity markets varied considerably during the year,
despite a positive overall trend. The positive first quarter was followed by heavy losses in the
second. A slow recovery began from July, which became stronger in the latter months of the
year and the first few weeks of 2013. In the US the agreement reached to avoid the fiscal cliff
actually allowed the indices to return to pre-crisis levels. In the euro area banking shares in
particular benefited from the looser and postponed tigher liquidity requirements of Basel III,
and for banks in peripheral countries in particular, from the downward pressure on
government bond yields. The outcome of the Italian government elections at the end of
February brought fears of a fresh ‘contagion effect’ to the markets, leading Fitch to downgrade
Italy’s sovereign rating.
After the heavy falls suffered in 2010 and 2011, the Italian markets managed by Borsa
Italiana ended the year with an annual gain of around 8%, despite taking a battering in the
second half of the year.
Despite this positive performance, trading was down both in terms of volumes (57.6 million,
down 15.9%) and value (€506.1 billion, down 28.7%) compared with the previous year.
However, the fixed income market (MOT and ExtraMOT) achieved its best ever trading
volumes, with approximately 6.5 million contracts (up 37.4%) worth €326.1 billion (up 57.7%).
This was partly due to three issues of the BTP Italia, the first inflation-linked Italian bond,
which brought in a total of more than €27 billion 13 .
The principal share indices in local currency
Borsa Italiana also confirmed its
Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 % change
leading position in Europe for
A B
C D
E A/E contracts traded electronically
Ftse Mib (Milan) 16,273 15,096 14,274 15,980 15,090 7.8% on both the ETF Plus and MOT
Ftse Italia All Share (Milan) 17,175 15,999 15,185 16,999 15,850 8.4%
markets.
Xetra Dax (Frankfurt) 7,612 7,216 6,416 6,947 5,898 29.1%
Cac 40 (Paris) 3,641 3,355 3,197 3,424 3,160 15.2% At the end of the year listed
Ftse 100 (London) 5,898 5,742 5,571 5,768 5,572 5.9%
companies on the Italian Stock
S&P 500 (New York) 1,426 1,441 1,362 1,408 1,258 13.4%
DJ Industrial
Exchange numbered 323, down
(New York) 13,104 13,437 12,880 13,212 12,218 7.3%
Nasdaq Composite (New York) 3,020 3,116 2,935 3,092 2,605 15.9% from 328 twelve months before
Nikkei 225 (Tokyo) 10,395 8,870 9,007 10,084 8,455 22.9%
as a result of eight new
Topix (Tokyo) 860 737 770 854 729 18.0%
MSCI emerging markets 1,055 1,003 937 1,041 916 15.2% admissions and thirteen
withdrawals. Total market
Source: Thomson Financial Reuters
capitalisation however was up at
€365.5 billion, from €332.4 billion at the end of 2011, equivalent to 22.5% of Italian GDP.
As a result of the lower value of the shares traded while capitalisation was higher, turnover
velocity 14 fell during the year to 138% from 214% at the end of 2011.
Despite a generally unfavourable context for assets under management, mutual funds ended
the year with positive net inflows of €1.2 billion 15 , showing an increasingly clear distinction
between foreign-registered funds (up €15 billion), which now represent 69% of managed
assets, and Italian-registered funds (down €13.8 billion).
Looking at net inflows by type, bond funds recovered strongly (up €23 billion) while flexible
funds remained essentially stable (up €0.4 billion) and other categories of funds fell, albeit at
different rates: monetary funds down €12.6 billion, equity funds down €7.1 billion, hedge
funds down €2.5 billion and balanced funds down 1.3 billion 16 .
Thanks to the recovery in prices, in December assets under management reached €482.2
billion, up from €421.7 billion at the end of 2011 (a 14.4% rise). In terms of the product mix
bonds did well, rising from 43.4% to 51.6%, while monetary funds fell from 11.6% to 6.7% and
equity funds also fell, from 22.3% to 20.6%.
13 The third issue, in October 2012, was Europe’s biggest ever bond placement, with over €18 billion paid in the first four days of
subscription on the MOT.
14 An indicator which, as the ratio of the value of the shares traded to the stock market capitalisation, gives a measure of the
turnover of the shares traded.
15 Assogestioni, “quarterly map of assets under management”, fourth quarter 2012.
16 Net inflows over the year also included an additional €1.3 billion into ‘non classified funds’.
27

Principal long-term interest rates (2010-2012)
Graph No. 5
7.50
7.00
6.50
US Treasury 10 anni BTP 10 anni Bund 10 anni
6.00
5.50
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
G F M A M G L A S O N D G F M A M G L A S O N D G F M A M G L A S O N D
2010 2011 2012
The banking system
The easing of tensions on the sovereign debt markets helped to improve funding conditions for
Italian intermediaries, although these have not yet normalised. However, the unfavourable
economic conditions continued to manifest in terms of weak demand for credit from
households and businesses, and poorer credit quality.
Based on figures provided by the Bank of Italy 17 , at the end of December the year-on-year
change in direct funding (deposits of residents and bonds) continued to rise from the lowest
levels of the year (down 0.8% in May and July), despite remaining moderate (rising 1.6%
compared with 1% at the end of 2011). Within the mix the contrast between funding from
bonds (down 6.8%; up 3.2% 18 ) and other forms gradually increased (up 6.2%; down 0.2% 19 ).
The latter include deposits with a fixed term of up to two years, which grew considerably (up
87%), and repurchase agreements (up 34.1%).
Bank of Italy figures show that loans to residents in the private sector fell 1.8% in over the
year (whereas they had risen 2.9% at the end of 2011), after the lowest point in November,
when they were down 2.4%. In terms of recipients overall loans to households weakened (down
1.4% compared with a rise of 4.4% in December 2011), as did the various types of lending:
consumer credit (down 6.9% compared with an increase of 2.7%), mortgages (down 0.6%
compared with an increase of 4.4%) and other loans (down 1% compared with an increase of
4.9%).
The year-on-year trend for loans to businesses appears to be even worse (down 3.3%
compared with a rise of 3.1%), as the result of an across-the-board fall that has affected both
17 Bank of Italy, supplement to the statistics bulletin Moneta e Banche, March 2013.
18 The changes were calculated excluding the investments included in the securities portfolio (item “Other securities”) from the
funding from bonds. Including this component, at the end of December the funding for Italian banks from bonds had grown by an
annual rate of 5% (compared with a rise of 13.4% in December 2011).
19 The changes were calculated excluding sums related to disposals of loans and transactions with central counterparties from the
deposits. Including these components, at the end of December the funding consisting of the different types of deposit had grown by
an annual rate of 8.3% (compared to a fall of 3.8% in December 2011)
28

short-term loans (down 1.9% compared with a rise of 5.2%) – especially in the first half of the
year – and medium to long-term loans (down 4.1% compared to a rise of 1.9%), especially in
the second half of the year.
From the point of view of risk, after a stable first quarter, non-performing loans in the private
sector gross of write-downs rose sharply – especially those with non-financial companies,
reaching €124.7 billion in December (up 16.6% for the year and up 10.5% from June), €40.4
billion of which were to households and €83.5 billion to businesses. The ratio of gross nonperforming
loans in the private sector to loans to the private sector rose by one percentage
point during the year, ending at 7.24% (6.24% at the end of 2011), while the ratio of gross
non-performing loans in the private sector to share capital and reserves rose to 33.45% (from
28.15%).
Net non-performing loans, at €64.6 billion rose (by 25.6% year-on-year; up 19.5% from June),
after reaching their lowest level of the year in March (48.3 billion). Consequently the ratio of
net non-performing loans to total loans rose to 3.35% from 2.69% at the end of 2011, while
the ratio of net non-performing loans to capital and reserves rose to 17.34% (from13.55%).
Securities issued by residents in Italy in the portfolios of Italian banks reached €873.9 billion
in December, an increase of €203.3 billion over the year (up 30.3%), 60% of which consisted of
investments in Italian government securities (up €121.5 billion, €106.6 billion of which in the
first half of the year), which benefited from the injection of liquidity generated by two long-term
refinancing operations by the ECB in December 2011 and February 2012. Purchases were
mainly of medium to long-term government securities, (BTPs and CCTs; up €90.1 billion,
€67.9 billionof which in the first half of the year) and to a lesser extent of short-term securities
(BOTs and CTZs; up €29.7 billion).
“Other securities” also increased (81.9%), also driven by bank bonds (up €87 billion), which
accounted for over 70% by year end.
In December, the average interest rate on bank funding from customers calculated by the
Italian Banking Association ABI 20 (which includes the yield on deposits, bonds and repurchase
agreements in euro for households and non financial companies) stood at 2.08% (compared
with 2% at the end of 2011). The weighted average rate on loans to families and businesses
and non-financial companies gradually fell to 3.78% after peaking between December 2011
and January 2012 (4.23%).
* * *
In addition to the developments in international regulations mentioned above, a number of changes were
introduced into the legislative framework for Italian banks in 2012:
• on 5 th April the Constitutional Court issued ruling 78 declaring that article 2, paragraph 61 of Decree
Law No. 225 of 29 December 2010 (known as the “Thousand extensions”) on banks compounding
interest was unlawful. The Decree had introduced an authentic interpretation of article 2935 of the
Civil Code which, with the regard to the statute of limitations for legal actions relating to current
account transactions, set the ten-year period as running from the date on which the relevant
transaction was recorded on the account rather than from the day the account was closed;
• Law No. 62 of 18 th May 2012 set up an observatory within the Ministry of Finance and the Economy
to monitor the credit and terms granted by banks to customers, especially micro, small, mediumsized,
young people's and women's enterprises, and the implementation of agreements and
procedures to support their access to credit. The observatory monitors the trend in funding provided
by the banking and finance industry along with the relative terms and conditions, and it has the right
to apply to the Bank of Italy on a regular basis if required for information about the granting of loans
and their terms and conditions. The law also gives prefects the right to report specific problems
relating to banking and financial transactions and services to the Banking and Finance Ombudsman;
• from 1 st June banks are obliged to offer the ‘basic’ bank account introduced by Decree Law No.1 of
20 th January 2012 – converted into Law No, 28 of 24 th March – after the MEF, ABI, Poste Italiane
and Italian association of payment agencies and electronic payment services drew up an agreement
on 28 th March specifying the features it should offer;
20 ABI Monthly Outlook, “Economia e Mercati Finanziari e Creditizi”, February 2013.
29

• on 22 nd October MEF and ABI signed an agreement granting banks and financial intermediaries
access to the electronic platform for certifying payables due from public administration. This makes it
possible to check the status of the payable instantly, streamlining and accelerating the advance
payment or discount procedures for public administration suppliers;
• Law No. 134/2012, which converted Decree No. 83/2012 (the “Growth” Decree), introduced
numerous changes to company reorganisation, completing the Bankruptcy Law reforms introduced in
2005 by adding many provisions to make settlement procedures for struggling businesses more
efficient. The new regulations should therefore play a major part in helping crises to be identified
earlier and managed more carefully, as well as expanding recourse to arrangements with creditors
and restructuring agreements in accordance with article 182-bis of the Bankruptcy Law, as these
tools help foster a negotiated settlement to crises;
• in December the Bank of Italy published a measure containing regulatory provisions regarding
penalties and the procedure for administrative penalties. The document came into force on 1 st
February 2013. Its target includes banks and it establishes rules designed to communicate the
procedure for penalties followed by the Authority when exercising its regulatory powers in the proper
and prudent management of banking and financial activities, correct conduct and prevention in the
use of the financial system for laundering the proceeds of criminal activities and funding terrorism.
With reference to listed entities in particular, the following is also noted:
• Legislative Decree No. 91/2012, which came into force on 17 th July (implementing Directive
2007/36/EC on the exercise of certain rights of shareholders in listed companies), which changed
some regulations in the Civil Code and the Consolidated Finance Act in order to facilitate and
therefore provide an incentive for shareholders to take part in company life;
• Legislative Decree No. 184/2012, which came into force on 13 th November (implementing Directive
2010/73/EU harmonising transparency obligations for listed issuers), and abolished article 120,
paragraph 2 of the Consolidated Finance Act, meant that it was no longer necessary to inform the
investee company and Consob about the acquisition of investments of more than 10% in unlisted
S.p.A.s or S.r.l.s. The obligations for parent companies of listed issuers to provide the public with the
relevant information and to keep a record of the people with access to privileged information were also
abolished.
30

Significant events that occurred during the
year
Strategic and organisational change in the UBI Banca Group
In line with the work that has been under way since 2010 (e.g. changes to the branch network,
revision of the marketing and distribution model, simplification of the customer service model,
the disposal of non-strategic assets, and rationalisation of the ownership structure) and in a
year that was once again a complex one in terms of the economy, the Group has implemented
the new mechanisms designed to further reduce overhead costs with immediate effect.
On 18 th July 2012, with the goal of simplifying operations so as to streamline them and make
them better respond to market needs, as well as to make them less of a burden both in terms
of costs and in terms of procedures and practices, we announced a change in strategy and
organisation for the entire Group, which is centred around the following key guidelines:
a) the implementation of a series of organisational changes designed to simplify the
functioning of the Group, which is to be achieved by way of the following:
- changes to the overall size of the branch network, including the closure of regular and
mini-branches, the transformation of ordinary branches into mini-branches, actions to
rationalise and simplify the internal structure of the network banks, of the Parent, and
of UBI Sistemi e Servizi, and more effective methods for the Parent and the network
banks to interact;
- a reduction in staff numbers estimated at approximately 1,500 full-time equivalents
through the use of provisions contained in labour contracts and labour law currently in
force, including the use, above all, of “solidarity funds” for early retirement and greater
flexibility with regard to working hours;
b) a reduction of at least 20% in governance expenses by reducing the number of members of
the various corporate bodies as well as their respective fees;
c) the revision of the service model for private-banking and corporate clients through the
creation of single operating units for both types of client with the creation of new “Private-
Corporate Centres” (approximately one for each Local Department), designed to provide an
integrated range of products and services for the Group’s core business clients on its local
markets and to facilitate the development of additional income opportunities.
A structural reduction in the cost of labour
On 28 th August 2012, in a letter sent to the various trade unions, the legally and contractually
required procedure concerning the strategic and technical evolution of the Group officially
began.
The letter contained an explanation of the main mechanisms needed in order to achieve a
significant recovery in both efficiency and profitability through rigorous cost controls, and of
structural staff costs in particular. Without these mechanisms, such costs would no longer be
sustainable given both the current trend in revenues and the changes made to the social
security system introduced by way of the Salva Italia (Save Italy) decree 1 , which are affecting the
full achievement of targets for staff numbers called for in the 2011/2013-2015 business plan.
1 Italian law No. 214 of 22 nd December 2011 based on Italian Law Decree No. 201 of 6 th December 2011: In short, this reform
established that, as of 1 st January 2012, the retirement age for all employees is to be 66 years of age. The requirement for retirement
rose to 62 years of age in 2012 for employees, to 63 years 6 months in 2014, to 65 in 2016 and, finally, to 66 beginning in 2018. The
reform also changed the pension system by removing the possibility of retiring with quotas and introduced the possibility of early
retirement. Practically speaking, one may retire before old age only after the age of 41 years 1 month for women – increased to 41
years 2 months in 2013 and 41 years 3 months in 2014 – and 42 years 1 month for men – increased to 42 years 2 months in 2013
31

Trade union talks were held from 7 th September to 17 th October 2012 – the technical deadline
for the procedure, which was completed without agreement between the parties being reached
– and then continued on 21 st November in an effort to find possible areas of agreement. In the
meantime, UBI Banca did, nonetheless, begin work to optimise the Group's operations, as
described in greater detail below.
On 29 th November 2012, talks with the trade unions came to a close with the signing of a
framework agreement for the Group, which established the regulatory, financial and
operational solutions to be implemented in order to reach the stated objective, while also
calling for the introduction of an early retirement plan concerning all personnel at all levels
and affecting at least 650 staff throughout the various Group companies.
In order to mitigate the socio-economic impact of these changes, it has also been agreed that
the income support mechanisms established by way of Italian ministerial decree no. 158 of
28 th April 2000 as amended (i.e. the Bank Employee Solidarity Fund) would also be taken
advantage of, including:
• voluntary early retirement for employees meeting the requirements set by law granting
them the right to receive a pension by 1 st January 2014 (INPS “window” of no later than 1 st
January 2014 inclusive) and for employees that will obtain the right to receive a pension
after 1 st January 2014 and by no later than 1 st January 2018 (INPS “window” of no later
than 1 st January 2018 inclusive);
• the suspension of work or a reduction in working hours of up to 220,000 working days to
be implemented during the period 2013-2015, with a corresponding reduction in wages and
including the use of the ordinary services under Article 5(1° comma, lett a), point 2, of the
aforementioned ministerial decree No. 158/2000.
Overall, the targets set at the
Group level have been amply
achieved, as was seen during the
verification process with the trade
unions that signed the framework
agreement reached on 12 th
February 2013.
During the established sign-up
period, 920 requests for voluntary
early retirement were received.
Given the greater demand, a
supplement to the agreement was
signed by the trade unions that
allows for additional requests to
be accepted for a total of 736 early
retirements during the first
quarter of 2013, of which roughly
600 had already been carried out
by the end of January.
UBI Banca Group early retirement plan
Retirements
No. of employees
as per
framework
Company
agreement
29 11 2012
Retirements
as per
framework
agreement
annex
12 2 2013
UBI Banca 41 55
UBI Sistemi e Servizi 103 131
Banco di Brescia 39 48
Banca Popolare di Bergamo 106 116
Banca Popolare Commercio e Industria 39 55
Banca Regionale Europea 57 83
Banca Popolare di Ancona 72 68
Banca di Valle Camonica 6 14
Banca Carime 187 150
Centrobanca - 7
UBI Leasing - 3
UBI Factor - 5
UBI Banca Private Investment - 1
Total 650 736
As for the reduction of hours or the suspension of work, here, too, demand amply surpassed
the target of 220,000 working days. As such, the trade unions agreed to accept requests for a
total of no more than 377,459 days over the course of 2013-2015, which are to be financed, as
agreed, using the “National Income Support Fund”.
In order to support generation turnover, with the agreement of 29 th November 2012, a plan
was agreed to render contracts permanent and to hire 240 young people over three years
starting from 2013, taking advantage, amongst other things, of the opportunities afforded by
the “National Employment Fund”, recently established when the national labour contract was
renewed. The trade union agreement document signed on 12 th February 2013 called for
and 42 years 3 months in 2014. These age limits are to be increased further based on the mechanism linking retirement age to life
expectancy.
32

increasing this number by a further 43 young people in order to take account of the greater
number of early retirements than originally expected.
The one-off charges for the early retirements totalled €143.5 million, which was charged in its
entirety to the consolidated income statement during the fourth quarter of 2012.
On the whole, these initiatives (redundancies and suspension/reduction of working hours)
defined together with the trade union organisations will allow gross savings to be achieved,
beginning in 2013, estimated when fully phased-in in 2014 at over €100 million.
***
In parallel with these trade union proceedings and in an effort to achieve the same goals, UBI
Banca defined a “managerial manoeuvre” aimed at reorganising both the number of senior
executives and their related remuneration, for which the one-off charge for the Group is
estimated at €4.5 million not including the costs related to the personnel involved in the early
retirement plan. This expense has already been charged to the income statement in the third
quarter of 2012 and the consequent benefit in terms of the cost of labour is estimated at
roughly €7 million.
The optimisation of Group functioning
From a structural point of view, the reduction of administrative costs falls within the scope of
a broader programme referred to as the “Optimisation of Group Functioning”, which has been
organised and implemented in three stages.
Effective as of 5 th November 2012, the organisation of UBI Banca, UBI Sistemi e Servizi and of
the various network banks has been revised and the procedures for interaction between the
Parent and the network banks have been updated in order to further increase focus and
specialisation in their respective roles. In this respect the Parent is committed to providing
guidance, co-ordination, monitoring and support with an increasing focus on operations and
the network banks, within the scope of their respective prerogatives of governance, are keenly
focused on managing their local markets, optimising their distribution capacities and
controlling risks, with a particular emphasis on credit and operational risk.
The launch of stage one of the programme (roll-out) included the following actions:
• the organisational changes at the Parent, UBI Banca, with the following objectives:
- simplification through streamlining units and shortening reporting lines;
- redistribution and aggregation of activities in order to achieve greater synergies and
improve the management of the individual processes;
- standardisation and adaptation at the same time to innovations introduced to the
organisational structure of the network banks, with regard above all to commercial
functions;
- a change of focus by management with regard to risk and credit;
• the adoption of a new organisational model for UBI Sistemi e Servizi, with the following
objectives:
- simplification of the organisational structure, which now consists of divisions,
departments and sectors, with the creation of a specific Business Services Division
based on the same operational areas as those in the Parent, in order to constitute the
primary interface with it;
- organisation of work in teams and improvements to some internal processes in order to
achieve greater fluidity in operations;
• the revision of the organisational structure of the network banks in the following areas:
- commercial, with the elimination of commercial retail/corporate/private-banking staff
units and the centralisation at the same time of the activities at the Parent, by creating
network support units for each market (retail and private banking/corporate);
- governance and support, with the creation of two new units: “General Management
Support”, to optimise the operations of all management support activities, and “Human
resources and organisation”, the latter along the same lines of that in the Parent and
complementary to it in order to promote greater co-ordination in the integrated
33

management of employee mobility within the Group and more effective implementation
of the projects developed.
On 10 th December 2012, stage two of the programme (branch network optimisation) began. This
stage focused on the scheduled series of actions involving the distribution network as follows:
the closure of branches and mini-branches where there was geographical overlap; and the
transformation of smaller branches into mini-branches. These actions affected Banca Popolare
di Bergamo, Banco di Brescia, Banca Popolare Commercio e Industria, Banca Regionale
Europea, Banca Popolare di Ancona, Banca Carime and Banca di Valle Camonica.
For a more detailed analysis, see the related section below, “Action undertaken on the branch
network of the Group”, where all of the changes that took place during the year are described.
Finally, on 7 th January 2013, stage three of the programme (completion) was implemented,
including the final part of the actions affecting the commercial processes of the network banks
in order to simplify coordinating activities and related roles and to enhance cross-market
coverage by developing a dedicated range of products and services and providing the new
specialist skills needed for our business and corporate customers.
The following actions were taken in particular: elimination of the commercial area, with the
Local Departments now reporting directly to General Management; elimination of the Retail
Co-ordination Staff Units of the Local Departments; the revision of the distribution network
with the introduction of integrated “Private & Corporate Unity” points of sale and the
elimination at the same time of the previous corporate-banking and private-banking units;
and, in the retail area, the revision of the branch groups (for the banks that adopt the
Head/Group model) and the consequent redistribution of the small-business and SME
customer portfolios among the former “Group” banks.
UBI Banca is the first Italian bank to unify its private
and corporate banking markets. From this integration,
we created UBI Banca Private & Corporate Unity, a
single unit for the management, custody and
development of the wealth of both businesses and
individuals. This range of products and services meets
the need to combine consulting services for individuals
with a specialist approach towards businesses, made
possible by the creation of specific units and the use of
expert teams. From the point of view of the
businessman-corporate client, value will be created by
way of the innovative, integrated advisory approach: for
personal wealth (Pro-Active Wealth Advisory®); for
generation turnover (Family Business Advisory®); and
for businesses (Corporate Advisory).
The new structure currently includes over 600
specialist bankers working in branches throughout
Italy.
Private & Corporate Banking Units
31.1.2013
Private & Corporate Banking Units 131
Private & Corporate Banking Units (PCUs) (*) 50
Banca Popolare di Bergamo 13
Banco di Brescia 9
Banca Popolare Commercio e Industria 7
Banca Regionale Europea 7
Banca Carime 5
Banca Popolare di Ancona 7
Banca di Valle Camonica 2
"Corners" 81
Banca Popolare di Bergamo 26
Banco di Brescia 12
Banca Popolare Commercio e Industria 9
Banca Regionale Europea 4
Banca Carime 6
Banca Popolare di Ancona 22
Banca di Valle Camonica 2
(*) The figure do es no t include s ix units o f UB I Banca P rivate Inves tment dedicated to
private banking cus to mers o nly.
The reduction of governance costs
The process of strategic organisational change for the Group as announced last July also
called for efforts to optimise governance costs. This commitment, which is to include a
reduction in both the number of and the fees paid to the members of the various corporate
bodies, was also expressed in a statement included in the framework agreement of 29 th
November 2012.
In line with the above, and as proposed by the Remuneration Committee, the Supervisory
Board authorised a proposal to be presented at the 2013 Shareholders Meeting to appoint the
new Supervisory Board for a reduction in the annual fees paid to members of that Board and
in the total annual remuneration paid to the Board Members vested with special powers, roles
and responsibilities. The Board has also prepared a proposed guideline for a reduction in the
remuneration of the Management Board, which is then to be promptly confirmed and finalised
by the newly appointed Supervisory Board.
34

As for the other Group companies, the Management Board has conducted an analysis of the
Articles of Association of the various subsidiaries with regard to the composition of the Boards
of Directors and related specific appointments. In light of this study, the Board then approved
a reduction in the number of members on the corporate boards of some companies and
consequent changes to their articles of association where necessary.
Therefore, in the first months of 2013, the Board took steps to initiate the process and
submitted the related documentation to the Supervisory Board where necessary.
The planned actions described above will result in a significant reduction in the total fees paid
throughout the Group and this will be implemented gradually as the terms of office of the
current Boards of Directors expire naturally.
Action undertaken on the branch network of the Group
In 2012, the distribution network of the UBI Banca Group underwent numerous actions
related mainly to the need to further rationalise the Group’s geographical presence in markets
that are either saturated or show limited room for growth, including changes to the units that
do not show sufficient current and/or potential profitability and at the same time to
strengthen both the branches that are close to those that are undergoing these changes and
those that show the greatest potential for growth.
In this context, two mass actions were carried out that affected all of the network banks and
made it possible to contain operating costs by eliminating several costly lease agreements.
The actions taken, effective as of 27 th February 2012, resulted in:
• the closure of 32 branches 2 and 46 mini-branches;
• the transformation of 40 branches into mini-branches and one mini-branch into a branch;
• the partial transfer of customers belonging to one branch and transformations into parent units for three
mini-branches.
The subsequent rationalisation, effective as of 10 th December, was achieved through:
• the closure of 34 branches and 33 mini-branches;
• the transformation of 80 branches into mini-branches;
• transformations into parent units for four mini-branches.
At the same time, work was done within the broader efforts to simplify the Group’s
organisation and better focus geographical coverage, including the merger of Banco di San
Giorgio into Banca Regionale Europea (BRE), effective as of 22 nd October.
Action taken on the branch network of the Group in Italy in 2012
Openings/Merger acquisitions: Closures: Transformation of
branches into
branches mini-branches branches mini-branches
mini-branches
Transformation of
mini-branches
into branches
UBI Banca Scpa (*) 1 - - - - -
Banca Popolare di Bergamo Spa 3 - 4 4 16 -
Banco di Brescia Spa - - 33 9 24 -
Banca Popolare Commercio e Industria Spa - - 10 6 25 1
Banca Regionale Europea Spa (*) 45 8 7 16 17 -
Banca Popolare di Ancona Spa 1 - 5 14 21 -
Banca Carime Spa - 1 6 34 15 -
Banca di Valle Camonica Spa - - - - 2 -
Banco di San Giorgio Spa (*) - - 48 9 2 -
UBI Banca Private Investment Spa - - 1 - - -
B@nca 24-7 (*) - - 1 - - -
TOTAL 50 9 115 92 122 1
(*) The changes take into account the effects of the mergers of B@nca 24-7 into UBI Banca and of Banco di San Giorgio into BRE.
2 For logistics and organisational reasons, the closure or two Banca Popolare di Bergamo branches could only be performed after the
preparatory stage for the transformation into mini-branches. These branches have therefore been counted among transformations
into mini-branches in the table for 2012 changes and subsequently among closures of mini-branches.
35

The general economic landscape, on the other hand, called for a prudent revision of our short
and medium-term strategy regarding new branch openings, limiting them to tangible business
opportunities that should arise in a given area, although this does not affect the policy of
ongoing development and innovation in other commercial channels as alternatives to the
bricks-and-mortar variety. In 2012, the network banks opened six new branches in Italy (four
branches and two mini-branches). In January 2013, five BPB treasury branches were
transformed into mini-branches.
The ongoing rationalisation process also involves the logistical transfer of operating units
within the towns and cities where they are currently located with a view to a more appropriate
sizing of units and also to optimising costs.
A detailed report on closures and openings in the branch network of the Group that occurred in 2012 is given in the
subsequent section “The distribution network and positioning”.
Action to streamline the ownership structure and areas of
business
During the year, a series of actions were undertaken which sought to simplify and streamline
the Group’s structure and its areas of business. The strategic aspects of these initiatives,
which were approved in part by the UBI Banca Management Board on 14 th November 2011,
are summarised below, whereas the subsequent section “The scope of the consolidation”
provides details regarding the legal and corporate aspects of these operations and their impact
on the consolidation scope.
An important banking centre has been created in the North-West of the country:
- on 22 nd October 2012, the merger of Banco di San Giorgio into Banca Regionale Europea
became effective. The operation, based on clear and natural connections and synergies
existing between Liguria, Piedmont, Valle d’Aosta and the nearby France, was designed to
safeguard the recognised high quality of the activities and services which had been provided
by BSG, as well as its strong roots in local communities. The brand name of this Ligurian
bank has therefore been left on signs at branches and also on many documents. With the
merger, central units of BSG have been integrated into their counterparts at BRE on the
basis of the organisational model of the surviving bank, while branch network units have
been renamed and in some cases also transformed.
The process to streamline consumer credit business has been completed:
- on 1 st July 2012, the contribution of the “salary and pension backed loans and payment
authorisations” line of business by B@nca 24-7 to Prestitalia became effective. The
beneficiary company, which received approximately €3 billion of loans and receivables,
therefore became the Group company which specialises in this business sector;
- on 23 rd July 2012, the merger of B@nca 24-7 into UBI Banca became effective. The Parent
took full ownership of all assets, liabilities, rights, obligations and contractual
relationships, and it assumed the role of credit card issuer and will manage the remaining
outstanding non-captive mortgages and personal and special purpose loans of B@nca 24-7
(approximately €7 billion of loans). Operations for new disbursements for captive personal
loans had already been transferred to the Group’s network banks in May 2012;
- on 21 st December 2012, the merger of the Società Italiana Leasing e Financing Spa (SILF) into
UBI Banca was completed. In addition to helping to optimise overhead costs, this operation
represented the final act, from a corporate point of view, in the broader project of reorganising
the consumer credit segment, which, in April 2012, had already led to bringing a halt to
disbursements of non-captive personal loans, the origination of which was SILF’s sole
business. The company was therefore no longer operational (all the agent mandates having
been revoked) and the outstanding loan portfolio is now managed by UBI Banca following the
merger into it of B@nca 24-7.
36

An IW Bank business unit has been transferred to UBI.S:
- the transfer of an IW Bank business unit to UBI.S was completed on 30 th November 2012.
This business unit includes:
• information technology (application management, facility management and relations
with software vendors and providers of IT infrastructures) and back office activities
(limited to the financial services segment, i.e. regulations, securities custody, and back
office activities for funds and derivatives);
• security (both physical security and fraud) and logistics.
The operation will allow IW Bank to focus more on its business activities, conserving and
strengthening its specific online character operating with its own brand. At the same time,
the transfer of these activities to UBI.S has integrated internet banking within the Group’s
service model, thereby providing numerous benefits in terms of:
• aligning the operational model with existing operations at other Group banks;
• providing support to major operational areas with the expertise already present at UBI.S
(which has, for said purpose, made the changes needed to integrate the organisationsal
units constituting the operations contributed. This included the creation of a new unit
named “IWBank and Innovative Channels”, while the assets and personnel related to the
real estate and security areas have been allocated to the UBI.S units that handle those
areas of business);
• extending oversight of IT governance by UBI.S;
• creating cost synergies when fully operational as a result of geographical and
technological convergence of the basic IT infrastructures.
Also during the year, the Group completed the following operations with the same goal
specified above:
- on 1 st August 2012, InvestNet International was merged into IW Bank;
- on 3 rd September 2012, the process resulting from exercising our right to withdrawal on the
shares in Arca SGR was completed;
- on 25 th October 2012, the voluntary liquidation of Barberini (which until January 2011 had
a controlling interest in Prestitalia) was completed;
- On 21 st December 2012, UBI Insurance Broker was sold with the goal of both optimising our
insurance brokerage services and realising cost savings.
Ten-year co-operation agreements were signed on an exclusive basis as part of the
operation, which involve maintaining all the current commercial relations of the company
and growth in the capacity to provide services to the corporate clients of the UBI Banca
Group.
-
On 6 th February 2012, the merger of Centrobanca into UBI Banca began and should be
completed during the first half of the year. Authorised by the Bank of Italy on 20 th February
2013, the merger had already been announced in November 2011 and is a part of the ongoing
process to simplify the Group’s organisation.
-The specialised lines of business currently handled by Centrobanca, particularly those in the
areas of corporate and investment banking, will continue to be managed by units within the
Parent and/or in tandem with other areas of its operations. UBI Sistemi e Servizi has already
selected the IT architecture needed to provide the necessary support for the specialist needs of
the activities to be migrated to the target system.
In the same way, the financial service activities conducted by Centrobanca will be allocated to
UBI Banca as part of the existing model, which already calls for a clear separation between
finance for the bank and finance for our customers.
37

The recapitalisation plan requested by the EBA
On the capital front, on 20 th January 2012 UBI Banca submitted a plan to the domestic
Supervisory Authority to achieve a core tier-one ratio of 9% by the end of June 2012, as
required by the European Banking Authority on the basis of the results of the capital exercise
conducted on 30 th September 2011 (pursuant to the recommendation of 8 th December 3 ).
In consideration of the temporary nature of the requested increase, the UBI Banca plan fully
excluded the option of new resort to the market following the substantial operation conducted
in the spring of 2011. It relied primarily, on the one hand, on the adoption of advanced
internal models for the calculation of capital requirements for corporate credit risk and on the
other, on further action to optimise risk weighted assets and on self funding.
With Bank of Italy measure No. 423940 of 16 th May 2012, the UBI Banca Group obtained the
authorisations needed to use advanced internal rating based (AIRB) systems to calculate capital
requirements for credit risk – i.e. the corporate (“exposure to businesses”) segment of the
network banks and Centrobanca – and for operational risk (using the Advanced Measurement
Approach, or “AMA”) for UBI Banca, UBI.S, Centrobanca and the network banks. 4
With the reduction in risk-weighted assets allowed by using these internal models, the Group’s
core tier one capital had already improved by 92 basis points by 30 th June 2012 (84 basis
points resulting from the use of the advanced approach to measure corporate credit risk and
eight basis points from using the AMA to measure operational risk).
In the second half of 2012, another phase of the Basel 2 project began. This phase calls for
extending the use of AIRB systems for credit risk to the retail segment for the portfolio
segments of “exposures backed by residential properties” and “other retail exposures towards
small businesses”. Within this context, the application of these models to the corporate area
will also be expanded to include UBI Banca.
Subject to prior authorisation by the supervisory authority, the goal is to use the retail models
for regulatory purposes in 2013.
The use of valuation reserves from revaluations of properties as authorised by prior year
special laws falls within the scope of the initiatives undertaken. They were used to perform no
cost increases to the share capital with the objective of increasing the core tier one ratio of
both the banks concerned and the Group.
The inclusion of those reserves within capital (pursuant to Art. 2442 of the Italian Civil Code)
does in fact involve the transfer of capital resources from the tier two capital to the tier one
capital, with a consequent improvement in the quality of the latter.
This action affected the following two banks:
• Banca Popolare di Ancona Spa: on 26 th June 2012, the bank approved an increase in share
capital in the amount of €24,958,090.32 by increasing the par value of its stock from €5.00
to €6.02 per share;
3 The recommendation concerning the creation of a temporary capital buffer to restore the confidence of the markets was issued by
the Board of Supervisors of the EBA on 8 th December 2011 in order to address the difficult situation facing the banking system in
the European Union, especially with regard to sovereign debt risk, and to restore stability to markets. The recommendation formed
part of a series of measures agreed within the EU, and it invited national supervisory authorities to ask banks included in a sample
to create an exceptional and temporary capital buffer to bring their core tier-one ratios up to at least 9%, by the end of June 2012.
Banks were also requested to form an exceptional and temporary buffer to cover exposure to sovereign debt, sufficient to reflect the
valuation at market prices at the end of September 2011. Despite the fact that prices significantly improved in the meantime, the
amount of the capital buffer required to cover the sovereign debt was not changed.
The initial sample of the banks that took part in the capital exercise consisted of 71 banks. The six Greek banks were treated
separately to take account of Greek participation in a programme of joint European Union and International Monetary Fund
assistance. Another four banks belonging to the original sample (Oesterreichische Volksbank AG, Dexia, WestLB AG and Bankia) are
monitored separately, because they are involved in significant restructuring processes. The final results published therefore involved
61 banks.
4 Compliance with qualitative and quantitative requirements set by the regulations for the advanced internal rating based (AIRB)
approach for the calculation of capital requirements for corporate credit risk and recognition of it for prudential purposes, as well as
validation of the advanced measurement approach (AMA) for the calculation of capital requirements for operational risk.
38

• Banca Regionale Europea Spa: on 27 th June 2012, the bank approved an increase in share
capital in the amount of €117,220,087.01 by increasing the par value of its stock from
€0.52 to €0.65 per share.
The impact of these actions on the consolidated core tier one capital was approximately €34
million.
Finally, following the revision of supervisory regulations concerning redemptions and the
repurchase of liabilities that qualify for inclusion in regulatory capital – which eliminated the
replacement obligation that put limits on liability management – the Group performed a
repurchase operation in February and March 2012 by launching a public tender offer on its own
institutional liabilities, consisting of preference shares.
The offer generated a gain of approximately €15 million (net of taxes and the expenses
incurred) recognised in the first quarter of 2012. It also made it possible to generate higher
quality capital and to benefit from lower interest expense of over €7 million per year.
The action described above was taken together with measures to reclassify and rationalise risk
weighted assets, with regard above all to loans and advances to customers, performed in
selective terms, without prejudice to the Group’s traditional support to local economies and its
core customers.
As confirmed by the EBA and by the Bank of Italy on 3 rd October 2012 (when the final result
for the year was published), the UBI Banca Group has fully complied with the
recommendation of reaching a core tier one capital ratio of greater than 9%, including the
sovereign-debt securities buffer, by achieving a ratio of 9.24% as at 30 th June 2012 and 9.16%
at year end.
That ratio not only included the fair valuation of sovereign-debt risk as at 30 th September 2011 (€868 million), but it
also comprises, in accordance with EBA instructions, a minimum capital requirement of 80% of capital requirements
calculated on the basis of Basel 1 rules.
Action taken on the liquidity front
During the first half of the year, the Group carried out important actions to strengthen
liquidity reserves and also to achieve sustainable funding from customers, which are basic
and necessary conditions to be able to provide financial support to economies in our local
markets.
On the liquidity front, while on the one hand the funds obtained from the European Central
Bank from two long-term refinancing operations (€12 billion) provided greater stability to the
structure of balance sheet liabilities, on the other hand, given the weak demand for credit from
the economy, they allowed new investments to be made in government securities with a view
to supporting net interest income, which increased Group liquidity reserves at the same time,
consisting of assets eligible for refinancing operations. These assets have nearly tripled
compared to December 2011, going from €11.6 to €29.4 billion, having benefited, in part, from
two government-backed issues in the first part of the year for a total nominal value of €6
billion.
Given the ample pool of segregated assets available to back the covered bonds, three selfretained
issuances were carried out in February for a total nominal value of €750 million as
part of the residential programme. At the same time, a second programme backed by
commercial loans intended solely for self-retained issues was structured and two issues have
already been carried out for a total nominal value of €2.3 billion (€1.8 billion in May and €0.5
billion in October).
Furthermore, and again with regard to initiatives designed to increase assets eligible as
collateral with the ECB, three new special-purpose vehicles (SPVs) were formed in accordance
with Law No. 130/1999 to be the purchasers of the new portfolios of loans eligible as
underlying collateral for Eurosystem monetary policy operations. On 8 th December 2011, one
39

of the measures decided by the ECB to support the bank liquidity was the extension of the
type of asset backed securities eligible for refinancing that can be securitised to include
performing loans to approved parties such as SMEs as defined in EU regulations.
Consequently, on 19 th April the following special purpose vehicles were formed: UBI SPV BBS
2012 Srl, UBI SPV BPCI 2012 Srl and UBI SPV BPA 2012 Srl.
On 26 th June 2012, the network banks involved sold loans for a total remaining principal
balance of €3 billion to their respective SPEs: €889 million for Banco di Brescia; €852 million
for Banca Popolare Commercio e Industria; and €1,017 million for Banca Popolare di Ancona.
On 30 th October 2012, securities were issued for a total of €1.93 billion in class A notes (€1.25
billion net of haircuts) and €829 million in class B notes.
40

Commercial activity
In 2012, the UBI Banca Group launched a project to optimise Group functioning, designed, amongst other
things, to streamline the distribution network, to create synergies between services to private and corporate
banking customers and to standardise network bank branch units in order to simplify support activities
(the previous section “Significant events that occurred during the year” may be consulted in this respect).
The commercial performance of the Group continued to be focused on growth in direct funding, consistent
with the maintenance of high standards of structural balance.
Products such as bond issuances, new ranges of “welcome edition” deposit accounts and a specific
commercial campaign entitled “Risparmi Premiati” (rewarded savings) were employed to achieve this
objective. The campaign included the offer of a check-up to customers on their savings by account
managers, intended to enhance the UBI Banca services model on financial planning and advice as its main
distinguishing feature compared to the competition.
From the viewpoint of funding and current accounts in particular, the following were introduced: a “basic
account” designed specifically for customers in the socially most vulnerable groups, with reduced charges
for a limited number of transitions; and the “QUBÌ” account, a modular account for customers who wish to
combine the different services offered on the basis of needs and normal patterns of use on a flexible basis.
The approach to customers with regard to investments has become increasingly more advisory (“Pro-Active
Wealth Advisory” and “Family Business Advisory” for private banking customers; UBI Gold for Top Affluent
customers, in addition to the other investment advisory service model provided on the “Financial Planning
and Advisory Platform” in the “UBI Light” version) and was facilitated by the greater number of training
programmes for affluent account managers. At the same time the range of investment solutions was
diversified with new types of Sicav’s, including versions which pay a coupon and those linked to gradual
savings plans.
With regard to the range of insurance products, the range of non-life policies was broadened with the
launch of two new products (Blufamily xl for the health sector and Blucasa for the property sector) and it
was also enhanced with initiatives for potential customers conducted at the same time from sales outlets
and through direct channels (direct marketing campaigns using banners for selected customers on home
banking services).
These initiatives for private individual customers were accompanied by action taken to improve funding
products for businesses, especially in the corporate segment, while the specialisation of the range of
advisory services for subsidised loans continued again in 2012 for the small business segment.
Initiatives concerning direct funding were accompanied by a strategy to manage lending designed to ensure
full support for medium to small-size and core corporate firms by developing customer relations across a
broad spectrum together with re-pricing action, to take account of the deterioration of credit risk and
funding conditions. Additional action was also taken to rationalise lending to the large corporate segment,
with careful management of trends for both volumes and pricing and also for the lowest credit rating
classes.
A strong focus was also maintained on the range of advisory services (“Corporate Advisory”) for mid and
large corporate clients.
Action to strengthen the multichannel strategy continued at the same time through the provision of
multichannel bank services on an innovative and complete platform which combines all the direct channels
available to private individual and business customers (internet and mobile banking, customer services,
self-service channels - ATMs and kiosks – evolved payment systems and POS terminals).
Action was taken in particular to improve the platform for online sales of the Enjoy and Qui UBI cards. New
and more powerful consultation functions were added to the platform for private individual and small
business customers and the release of free apps for smartphones, tablets and Blackberry phones were
completed. Direct marketing initiatives were also intensified through customer services activities.
Numerous changes were also introduced on the cards front, favoured by the technological advances for
these tools, with the objective of simplifying customer payment transactions. Various initiatives were
started for the Enjoy card, including some using smartphones and the Facebook social network to involve
greater numbers of potential customers.
Action also continued during the year to upgrade payment systems to comply with the European directive
on payment services (PSD) and the relative subsequent provisions, and to migrate onto SEPA payment
instruments.
Finally, the Group increased its commitment for support to the third sector with the new service model for
the church and non-church nonprofit world, named UBI Community.
41

The retail market 1
The retail market is composed of 3.6 million customers, of which 3.3 million are private
individuals (mass market and affluent), 250 thousand are legal entities (small to medium-sized
enterprises and small economic operators) and 30 thousand are authorities, associations and
nonprofit organisations. Approximately 6,600 professional staff work in customer services
consisting of branch managers, account managers and customer contacts.
“Anti Crisis” measures to support small to medium-size enterprises 2 and
families
During the year the banks in the Group participated in a series of measures to help families
and business on their respective markets, both locally and nationally, co-operating with public
institutions (chambers of commerce, regional and provincial governments) and guarantee
bodies 3 .
Activities also continued, started back in 2009, to support families and small to medium-sized
enterprises with action taken, amongst other things, under the “Avviso Comune” (joint
announcement) of 3 rd August 2009 4 , the “Accordo per il Credito alle PMI” 5 (Agreement on Loans
to SMEs) of 16 th February 2011 and the agreement of 20 th January 2010 as part of the “Piano
famiglie” (families plan) organised by the Italian Banking Association.
“New measures for Credit to Small and Medium-Sized Enterprises” Accord
With regard to SMEs, in 2012 the Group adhered, on 29 th March, to the “New measures for Credit to
Small and Medium-Sized Enterprises Accord” signed on 28 th February 2012 by the Italian Banking
Association, the Ministries of the Economy and Finance and Economic Development and by other
business associations.
This agreement involves the following:
1. deferments of up to twelve months on the capital repayments on medium to long-term mortgages and
unsecured loans (ordinary and subsidised) and up to twelve or six months for the repayment of the
capital portion implicit in property and non-property lease instalments, respectively;
2. extension of the terms of medium to long-term mortgages and unsecured loans (ordinary and
subsidised) for a maximum period of two years for unsecured loans and three years for mortgages;
3. extension of the maturities of short-term loans to 270 days to support cash flow requirements, for
advances on amounts that are certain, liquid and payable in cash (excluding import finance and
advances on contracts);
4. extensions for a maximum of 120 days of the terms for agricultural working capital credit pursuant to
Art. 43 of Legislative Decree No. 385/1993, granted with or without bills of exchange.
1 The retail market is composed of the following customers: mass market customers (private individuals with financial wealth – direct
and indirect funding – of less than €50,000 thousand), affluent customers (private individuals with financial wealth – direct and
indirect funding of between €50,000 thousand and €500,000 thousand) and small businesses (small economic operators with
turnover of less than €300,000 and businesses with turnover between €300,000 and €15,000,000).
2 According to the definition in EU regulations, small-to-medium size enterprises are considered entities which carry on a business
and regardless of their legal status employ fewer than 250 persons, with an annual turnover of not more than €50 million or with
total assets of less than €43 million.
3 The Group participated in various initiatives to provide subsidies to businesses, including the following: measures in the Piedmont
Region for development and the promotion of co-operation with backing from the Regional Guarantee Fund; measures in the
Lombardy Region to support businesses backed by the following Fondi di Rotazione (rotation funds) funds, “FESR Sottomisura 2”
funds for the “Industrial application of the results of research” and “FRIM Linee 1, 4 e 5” funds for “company development”, “growth
in size” and the “transfer of company ownership” and also measures to support farms for investments under the “Extraordinary
Programme for the implementation of the Nitrates Directive” (e.g. biogas co-generation plants); measures in the Apulia Region to
support businesses in accordance with the new regulations under the Regional Operational Programme.
4 This agreement, which became operational on 28 th September 2009 is for SMEs that were in temporary difficulty but which reported
good operating prospects and were going concerns. It enabled them to benefit from four measures: i) the deferment for twelve months
of principal repayments on mortgages; ii) the deferment for twelve or six months of the principal repayment portion of property or
equipment leasing instalments respectively; iii) an extension to 270 days for the repayment of bank advances on short-term
receivables; iv) special finance designed to strengthen capital.
5 This agreement, which became operational on 21 st March 2011, involved the following: i) the extension until 31 st July 2011 of the
time limit for the presentation of applications to defer loans to banks in accordance with the Avviso Comune; ii) the extension of the
repayment schedules for medium to long-term loans which had benefited from the deferment under the Avviso Comune by up to a
maximum of two years (three years for secured loans). The deadline that had been set for the presentation of applications for
extensions by businesses was 31 st December 2011. The Group agreed to maintain the existing contractually agreed interest rate if
the extension had benefited from backing made available by the Cassa Deposito e Prestiti (CDP – state controlled fund and deposit
institution) on the basis of a special agreement signed on 31 st May 2011, which involved the assignment of a budget of up to a
maximum of €54,529,000.
42

By signing that agreement, the Group is committed to maintaining the contractually agreed interest rate
if, amongst the other conditions, the deferment or extension benefits from backing from the Guarantee
Fund for SMEs or the ISMEA (agricultural food market services institute) fund.
Again, in accordance with the agreement, the offer was renewed by Group banks to provide funding to
promote the recovery and development of economic activities by an amount proportional to increases in
owners’ funds made by businesses.
The deadline set for the presentation of applications, which was originally 31 st December 2012, was
extended until 31 st March 2013.
Approximately 20,700 applications were processed by the Group for deferments under the “Avviso
Comune” (joint announcement) and subsequent agreements – mainly on medium to long-term loans – for
a total of €6.8 billion and for deferred capital repayments of €850 million. Almost all the applications
meeting the requirements for eligibility were accepted.
In accordance with the agreements cited, approximately 350 applications were presented to extend
repayment schedules for loans where the remaining principal totalled €107 million.
Initiatives for populations hit by the earthquake in Emilia Romagna, Lombardy and Veneto
In order to assist the people and businesses damaged by the earthquakes which hit Emilia Romagna,
Lombardy and Veneto on and after 20 th May 2012, UBI Banca promptly applied the measures of Decree
Law No. 74 of 6 th June 2012 and subsequent amendments and additions which, with regard to loans,
established deferment – initially until 30 th September 2012 and subsequently until 30 th November 2012 –
of repayments on mortgages and loans of any kind granted by banks to individuals and businesses who
were resident or located on 20 th May 2012 in the area of the towns hit by the earthquakes.
The deferment was on repayments due in the period between 8 th June 2012 and 30 th November 2012.
However, in order to further meet the needs of its customers, UBI Banca decided to apply the deferment
period immediately from 20 th May 2012. Loans in default were also included in the deferment.
On the basis of that action, repayments on approximately 4,480 loans were deferred on a total remaining
debt of approximately €283 million.
In addition to the measures reported above, UBI Banca also took two additional measures as follows:
- the deferment for a maximum of 12 months (at the contracted interest rate for the loan) of
repayments on unsecured loans (businesses only) and on mortgages (businesses and individuals) to
the following:
• individuals and businesses operating in all economic sectors inclusive of nonprofit organisations,
holders of ordinary mortgage loans backed by residential, commercial and industrial property
located in the municipalities hit by the earthquakes who suffered even partial, but significant
damage;
• businesses with operational premises located in the municipalities hit by the earthquakes
(including provincial capitals), holders of ordinary unsecured medium to long-term loans.
- the creation of a loan pool totalling €60 million (distributed among the Group banks operating in the
areas hit) for the grant of medium to long-term unsecured loans under particularly competitive terms
and conditions to businesses and individuals who have suffered material damage attributable to the
earthquake. As at 31 st December 2012, over €6.5 million of this loan pool had been used with 115
loans to both businesses and private individuals. The time limit for use was extended by six months
until 30 th June 2013.
Again for SMEs located in the zones hit by earthquakes, UBI Banca has also taken action on the basis,
amongst other things, of measures taken by Mediocredito Centrale, which involve the intervention of the
Fondo di Garanzia per le PMI (Guarantee Fund for SMEs) free of charge and with processing and approval
priorities over other actions. The maximum amount that may be guaranteed for a single business is €2.5
million with maximum backing equal to 80% of each loan.
UBI Banca also promptly adhered to the Convention signed on 5 th November 2012 by the Italian Banking
Association and the Cassa Deposito e Prestiti (CDP – state controlled fund and deposit institution), as
added to on 18 th November, for the grant of loans to population groups hit by earthquakes (private
individuals and legal entities) pursuant to Decree Law No. 174 of 10 th October 2012. These loans with a
term of 24 months backed by central government guarantees are for the payment in instalments of tax,
social security and welfare obligations deferred until 30 th November 2012 (on the basis of legislation for
earthquake victims) and they are due from 1 st December 2012 until 30 th June 2013.
The beneficiaries of the loans are either private individuals or legal entities that earn business income –
located (with registered offices or operating headquarters) in the municipalities hit by the earthquakes
and who suffered damages from those events – and that earn ordinary income as employees, who are the
owners of a damaged housing unit which is their principal dwelling (the latter only for the payment of
taxes due from 16 th December 2012 until 30 th June 2013).
Considering that the CDP funds allocated for the loans – a maximum loan pool of €6 billion – have hardly
been used in the sector nationally, a repeat of the subsidised loan procedure is planned.
Following the applications made by customers in the set period between 19 th November 2012 and 30 th
November 2012, the Group concluded 35 transactions for more than €2 million (additions may be
43

equested by the beneficiaries on the basis of the amount of the actual tax to be paid to the tax
authorities).
The beneficiaries of the loans will only repay the principal, while the interest accruing will be paid to the
Bank through a tax credit granted to it.
“Italy Investment Projects” and “Public Administration Receivables” Loan Pool
Again under the Accord “New measures for Credit to SMEs”, UBI Banca has already decided to adhere to
two new memorandums – signed on 22 nd May 2012 again by the Italian Banking Association, the
Ministry of the Economy and Finance, the Ministry of Economic Development and by representatives of
other business associations – to assist with financing for the investment projects of SMEs (“Italy
Investment Projects”) and to facilitate the payment of amounts due to companies from public
administrations (“Public Administration Receivables”).
By signing those memorandums, the Italian Banking Association is committed to promoting the
establishment of two specific loan pools for those initiatives amounting to €10 billion for each or them:
• the first entitled “Italy Investment Projects” is designed to support SME investment projects in assets
for use in operations;
• the second entitled “Public Administration Receivables” is designed to support SMEs who find
themselves in temporary difficulty due to delays in the payment of receivables from public
administrations by paying advances on those receivables. Those receivables may be unfrozen by
paying advances on them backed by the sale with recourse of receivables certified as “certain, liquid
and payable in cash” (in accordance with article 9 paragraph 3-bis of Decree Law No. 185/2008), by
the public administration debtor with compulsory indication of the agreed date of payment.
UBI Banca decided to contribute to the formation of those loan pools by allocating €600 million to each
one.
The legislative framework for the launch of the two initiatives was not completed until the end of
December 2012 and they therefore became operational in January 2013.
Loans to SMEs drawn from Cassa Deposito e Prestiti (CDP – state controlled fund and deposit
institution) funds
Again as part of “anti crisis” action taken, the grant of loans continued to support planned and/or
existing investments or to increase working capital by drawing on CDP funds resulting from post office
savings.
In this context, UBI Banca adhered to the “fourth convention” for loans to SMEs, signed by the Italian
Banking Association and the CDP on 1 st March 2012, by which the CDP made a loan pool of €10 billion
available to banks for medium to long-term loans to SMEs following the almost total use of the loan pool
of €8 billion under the three previous conventions on the matter.
The new loan pool of €10 billion is divided into an “Investments Pool” of €8 billion to facilitate access to
loans for investments by SMEs and a “Public Administration Receivables Pool” of €2 billion, designed to
mitigate the negative effects of late payments by public administrations and they will come into operation
in the first months of 2013.
The Group has decided to use the CDP funds available from the “investments pool” for unsecured loans
with a term of between 13 months (19 months if backed by the Guarantee Fund for SMEs pursuant to
Law No. 662/1996) and 60 months, for investments to be made and/or being made and to increase
working capital.
A total of 300 loans worth over €13 million have been concluded, drawn from the “investments loan pool”
established for the “fourth convention” and they became operational in the Group from November 2012.
The CDP “third convention”, signed on 17 th December 2010 involved the following:
- a “ten year loan pool” usable for loans with a maturity of from seven to ten years, with funding for the
banking sector nationally of €1 billion;
- a “Stable loan pool” to finance the growth of SMEs, into which the funds not fully used by the
previous pools gradually flowed, and which comprises all maturities (three, five, seven and ten years).
In June 2012, when the funds had been fully drawn on, Group banks had granted approximately 5,700
loans amounting to €320 million.
Guarantee fund for SMEs pursuant to Law No. 662/1996
At the same time, with a view to facilitating access to credit by SMEs in the current difficult economic
environment, use of public sector instruments such as the Guarantee Fund for SMEs pursuant to Law No.
662/1996 to mitigate credit risk continued.
Outstanding loans in the Group backed by the guarantee pursuant to Law 662/1996 amounted to €753
million, while disbursements in 2012 totalled €312 million. Banca Carime and Banca Popolare di Ancona
are the banks involved most in the use of this form of guarantee, however in 2012, the other network
banks contributed to a greater extent because the internal process for the relative applications also
became fully operational in those banks too.
44

“Memorandum of Intent” of 23 rd November 2011
On 12 th January 2012, the Group adhered to the “Memorandum of Intent” at national level, signed on
23 rd November 2011, by the Italian Banking Association and various employers’ associations: Alleanza
delle Cooperative Italiane (Alliance of Italian Co-operatives), Assoconfidi (association of loan guarantee
consortiums), Confagricoltura (the farmers association), Confedilizia (confederation of builders), CIA
(Italian farmers confederation), Coldiretti (the direct small farmers’ association), Confapi (the SMEs’
association), Confindustria (confederation of industry) and Rete Imprese Italia. It regarded regulatory
changes introduced to the time limit for reporting receivables past due, which was reduced to 90 days
from 31 st December 2011. Following applications made by businesses belonging to the associations
listed, positions to be classified within past due loans were examined on the basis of the relationship
between the amount of the credit lines agreed and amounts drawn on them, with particular reference to
the size and duration of the amounts past due. This was done with a view on the one hand to educating
business members of the association on the new regulations and, on the other, to preventing possible
inconveniences arising due to possible reports of late payments.
This agreement followed a similar memorandum of 22 nd September 2011, signed in the Region of
Lombardy by the Regional Commission of the Italian Banking Association and by Assolombarda (a
Lombard employers’ association), to which the Group had similarly adhered.
Initiatives designed to support families hit by the economic crisis
In addition to the those already mentioned to help people hit by the earthquake in Emilia, initiatives to
support families hit by the economic crisis included the continuation in 2012 of the various institutional
initiatives started in previous years. These included the following:
• the “Italian Banking Association moratorium”, which forms part of the “Families Programme” 6 ,
extended until 31 st March 2013, enabled 848 customers to defer mortgage repayments during the
year (on a total debt of almost €70 million);
• the “solidarity fund for the purchase of a main dwelling” 7 , which was created as the result of an
initiative by the Ministry of the Economy and Finance and became operational at the end of 2010,
enabled 24 customers to benefit in 2012 from the deferment of repayments amounting to over €2.5
million;
• the “Loan of hope” 8 , which as a result of amendments made in 2010 by the Italian Banking
Association and the Italian Episcopal Conference, further increased its effectiveness with the
disbursement of 300 loans for a total of €1.7 million;
• the “New Babies Loan”, which involves the creation of a guarantee fund to facilitate access to credit
for families with a child born or adopted between 2009-2011, and subsequently extended to include
those children born between 2012-2015. It has allowed 262 families to obtain a guaranteed loan for a
total of over €1.2 million;
• the agreement signed between the Italian Banking Association and the CDP for the grant of loans to
support Abruzzo families hit by the 2009 earthquake, saw the overall grant of 14 loans for a total of
€1.6 million;
• “Give them a future”, an initiative of the Italian Banking Association and the Youth Ministry, which
the Group adhered to in September 2011, to grant subsidised loans to young students, which follows
on from the previous “Give them credit” programme, saw the grant during the year of almost €200
thousand to 38 students;
• finally, in February 2012, the Group adhered to the Italian Banking Association’s “Young Couples’
Fund” initiative to provide the guarantees needed to obtain a mortgage for the purchase of a first
home by young couples or even single parent families with young children, with “atypical” or
temporary employment contracts. Ten loans for a total of €1.2 million were recorded in 2012.
To confirm the Group’s closeness to its traditional local markets, it also intervened, through Banco di
Brescia and the former Banco di San Giorgio, to support towns in the Veneto and Liguria regions
respectively, hit by flooding in October 2010 and November 2011, by adhering promptly – both for
6 Briefly, the agreement involves the deferment for at least twelve months of repayments on mortgages of up to €150,000 taken out for
the purchase, construction or renovation of a main dwelling even with arrears in payments of up to 180 consecutive days for
customers:
- with taxable annual income of up to €40,000;
- who have suffered from particularly negative events (death, job-loss, becoming non self-sufficient, becoming eligible for state
redundancy benefits).
7 For mortgage contracts for the purchase of a main dwelling for borrowers, this gives the possibility for a customer, if certain
conditions are met, to apply for the deferment of repayments not more than twice, for a maximum period of not longer than 18
months in the life of the mortgage.
8 For families that have lost all income from work, have no unearned income or income other than that generated by the ownership of
a home or ordinary or extraordinary state redundancy benefits. It is designed to implement projects for the return to work or the
start of small businesses.
45

families and for SMEs – to the measures of the Ordinances of the President’s Office of the Council of
Ministers No. 3906 of 13 th November 2010 and No. 3974 of 5 th November 2011 (deferral of mortgage
repayments).
Private individuals
Again in 2012, the commercial strategy for the private individual segment gave priority to the
capacity to attract and develop new direct funding in observance of customer needs and
characteristics, in order to improve the overall funding capacity of the Group consistent with
the objectives of overall financial structural balance.
A particular focus was placed on the capacity to satisfy customer needs in terms of proper
diversification of savings, especially in the asset management sector, and also on meeting
growing demands for capital and family protection.
With regard to commercial action taken to develop new funding, in addition to offers of
specialist products such as bond issuances and the new range of “welcome edition” deposit
accounts, a specific new campaign entitled “Risparmi Premiati” (rewarded savings) was
launched.
This campaign, which has become an important annual appointment for the Group, was
designed to encourage customers to carry out a check-up on their savings with their account
managers and to take the opportunity at the same time to enhance the UBI Banca customer
service model on financial planning and advice, as the main distinguishing feature of the
Group compared to its competitors.
In order to strengthen customer loyalty, the campaign was developed in combination with an
advertising initiative as part of the “Formula UBI” programme, which involved giving additional
points to the customers enrolled in it on the basis of new savings.
In the asset management sector, the ability to offer a range of diversified investments was
improved with new types of Sicav, including those which pay a coupon and those linked to
fund-based savings plans. The new range of Sicav’s was received very positively by customers
and helped reverse the trend in terms of net inflows for this type of business compared to
2011. Significant growth was also recorded in 2102 in fund-based savings plans, especially
after the launch of a special advertising initiative in the third quarter of 2012.
In accordance with the introduction of the UBI Gold customer service model and with the
strategic goal of deploying an increasingly advisory approach with customers on investments,
a specific training programme was implemented for affluent account managers, which will also
continue in 2013. It is designed to improve the ability of staff to assist customers in the
formulation of investment proposals and is oriented towards efficient allocation of their
portfolios.
Initiatives were started with regard to protection, designed to improve the range of non-life
policies, not only in the auto sector, but also in the health and property sectors which saw the
launch of two new products (Blufamily xl for health and Blucasa for properties).
The capacity to sell non-life policies in branches was strengthened by the introduction of more
co-ordinated action between staff responsible for family customers, both at the stage of
acquiring lists of potential customers and also when making proposals to potential target
customers. The activity of making commercial proposals was also accompanied by direct
marketing action through both email and banner channels targeted at customers selected
from those that use the home banking service (Qui UBI).
Finally, on a commercial level, a specific advertising campaign was commenced in the second
quarter of 2012, linked to a competition with monthly prizes for all customers who took out a
policy or requested an estimate.
46

CURRENT ACCOUNTS
Basic Account
On 28 th March 2012, the Ministry of the Economy and Finance, the Italian Banking Association, the
Italian Post Office and payment services associations – consistent with and in compliance with the time
limits set by article 12, paragraph three of Decree Law No. 201/2011 – concluded a Convention to define
the features of a Basic Account: a current account designed for financial inclusion purposes, which
constitutes an effective instrument for the full and real participation of all consumers in the single
market, constituting an instrument for broad social inclusion. The account also forms part of the
framework of initiatives taken by government in the fight against the use of cash and the promotion of
more efficient payment tools, by offering pensioners an ideal product for the receipt of pensions, which
can no longer be paid in cash.
In compliance with the provisions of that Convention, marketing of Basic Accounts commenced in the
Group on 1 st June 2012. They are available to all consumers, with a limited number of transactions at
reduced charges.
Basic Accounts are designed in particular for disadvantaged customer groups in society, with an annual
ISEE (equivalent economic status indicator) income of less than €7,500, who can make the same annual
transaction and use the same services provided for consumers, without charges and with exemption from
stamp duty. Those with the right to a pension of up to €1,500 per month, who do not belong to socially
disadvantaged groups, may as an alternative request a bank account to be opened to be used solely for
certain types of services and a limited number of transactions.
QUBÌ
On 2 nd July 2012 marketing of QUBÌ commenced, the new modular solution which allows customers to
combine different services offered on the basis of their needs and habitual use of banking services, with
the certainty of knowing in advance how much they will spend each month for the products they have
chosen.
QUBÌ enabled UBI Banca to win first place in the family category of accounts in the special classification
table of the best banking products selected by the financial newspaper Milano Finanza.
At present QUBÌ is composed of four modules:
• Semplicity, the basic version which provides the main current account services, with all transactions
exempt from registration and account management fees, Qui UBI services and Bancomat international
Libramat debit cards;
• Liberty, which, depending on the option chosen, eliminates charges on transactions;
• Convenience, for those who make purchases using payment cards, benefitting from the advantages of
frequent use;
• Protection, which comprises accident insurance cover for customers.
There is a monthly charge for each module. The total cost is the sum of the charges for the individual
modules and services purchased and the amount may vary as a consequence of discounts and
promotions there may be.
Small Businesses
The commitment to support small to medium-sized enterprises continued in 2012, especially
towards firms which have demonstrated innovative capacities and the ability to adapt to the
market context, a context that has continued to impose a pricing policy strictly linked to the
risk profiles of businesses.
Great attention was paid to foreign services, to qualified growth in short-term loans, to the
ability to attract and manage the liquidity of firms and entrepreneurs and to the design of tools
for use by account managers to improve their knowledge and management of customers.
A very large training project started in 2011 was completed in 2012, designed to further
increase the expertise of Small Business Account Managers on matters of interest to
businesses: choice of sources of funding, treasury management, internationalisation
processes, knowledge of opportunities for access to subsidised access to finance and different
forms of guarantee.
Financial consulting
Profitable co-operation is in place between network banks and the associate company SF Consulting,
controlled by the Finservice Group. This company specialises in providing consulting services on
subsidised finance: assessment of the eligibility of companies for subsidies, the preparation of investment
47

projects, the assessment of investment plans and general assistance in making and processing
applications for subsidised loans.
Commercial interaction with the network banks resulted in more than 1,160 new potential applications
with over 5,800 visits to firms (small businesses and corporates).
UBI Banca, SF Consulting and Finservice have also signed a convention agreement for support and
advisory activities in relation to formalities for the issue of guarantees under Law No. 662/1996
(Guarantee Fund for SMEs), which has been operational since February 2011.
The purpose of the convention is to support account managers with activities required to obtain
guarantees issued by the Fund, ranging from feasibility assessment (inclusive of assessment of the
subjective and objective requirements of the client firm) to the acquisition of guarantee certification.
Businesses can benefit from the Fund for any type of operation, provided it is directly linked to the
operating activities of the business. Depending on the nature of the eligible operations, the type of
beneficiaries and their location, the guarantee covered 85%, 80% or 60% of the loan with a maximum
amount guaranteed per firm of €1.5 million. These percentages and limits were changed and improved by
the new fund regulations which came into operation in December 2012 and were immediately
implemented by the UBI Banca Group.
As part of the convention, SF Consulting has created a special IT platform, implemented by the Group,
which allows account managers to interact with the company while applications to the manager of the
Guarantee Fund are being processed.
In 2012, UBI Banca signed a further agreement with SF Consulting, in addition to the established cooperation
for medium to long-term loans, which governs this company’s activities for the preparation and
filing – in the name of and on behalf of BPB, BPCI, BBS, BRE and Banca di Valle Camonica – of
applications for access to the Fund pursuant to Law No. 662/1996 also for short-term loans approved for
customers.
Sector products
The small business service model is also based on the development of distinct product ranges
focused on business sectors. By taking account of the principal financial needs and the
specifics of the “value chain” which characterise them, these ranges are designed to
strengthen the role of UBI Banca as a “partner bank”.
Action for farms
The farming sector, which varies greatly in terms of specialisation in its production, is of great
importance to regional economies and to the national economy, partly because of its connections with
the food industry and it represents an economic sector of interest to the Group.
Purchase of supplies – livestock
A new product was made available in 2012 specifically designed for livestock farms – the first of other
similar products that will be developed for other farming sectors of interest such as the wine sector – to
meet the demand for liquidity resulting from the introduction of regulations (article 62 of Law No.
27/2012) designed to govern commercial relations between farmers, the food processing industry and the
mass retail industry.
These regulations concern the sale of goods and they establish definite and stringent time limits on
payments with fines and penalties for failure to observe them. Farms are therefore required to meet the
deadlines for paying their suppliers.
This special new product, named “Purchase of supplies – livestock”, is designed to meet the resulting
needs of farmers for liquidity and it is based on a general farm loan contract for a total maximum
amount set on the basis of the planned spending for the purchase of animal feed for raising livestock.
This credit line can be used by taking out individual short-term loans, granted up to the maximum
authorised amount set in the general contract, with a term based on the livestock cycle financed.
Direct guarantee from SGFA - Società di Gestione Fondi per l’Agroalimentare Srl
In 2012 the Group took advantage of the new regulations governing the issue of SGFA direct guarantees 9
and extended its business to include unsecured farm loans with a term of less than 18 months.
In order to further educate the distribution network on the use of that form of guarantee, promotional
and training meetings were organised with the branches in areas where farming is more important to the
economy, with the participation of representatives from SGFA, an important trade association in the
sector and from the major farming guarantee bodies.
9 A first level or direct guarantee granted by SGFA: this is the same as a standard unsecured guarantee issued by SGFA to the bank
on behalf of the borrowing business, after independent risk assessment has been performed. This “direct” guarantee covers 70-80%
of the amount of the loan concerned and is recognised as an appropriate credit risk mitigation instrument because that company is
covered by a guarantee of last resort from the Italian government.
48

Again, in this respect co-operation was and is being established with trade associations and guarantee
bodies that operate in the sector in order to provide assistance to account managers in the preparation of
applications to SGFA for that guarantee.
Authorities, Associations and the third sector
The year 2012 saw the progressive consolidation of the service model for authorities and third
sector associations launched in 2011 with the following objectives: to meet the specific
demands of these customers more effectively; to grasp opportunities provided by market
trends; to adapt products and services to changes in the legislative and regulatory context.
More specifically, important activity to acquire data on counterparties was carried out
designed to provide a more accurate classification of the different types of authority (which
differ in terms of type of legal status and organisational model, which are often specific). The
reclassification of approximately 20 thousand counterparties will allow targeted commercial
policies to be set through a more accurate interpretation of their needs and the launch of
dedicated initiatives in 2013.
Associations and guarantee bodies
In order to support businesses and firms on the Group’s local markets and with a view to
facilitating access to credit by SMEs under competitive conditions in an economic and
financial environment which has been difficult for some time now, a central role continues to
be reserved to relations between Group Banks and guarantee consortiums and trade
associations as well as to the use of public sector instruments to mitigate credit risk, such as
the Guarantee fund for SMEs (pursuant to Law No. 662/1996) and the fund managed by
SGFA (Fund Management Company for the agricultural and food sectors) for farms.
As a result of new loan disbursements – €1,258 million for over 17,700 loans – total
outstanding loans backed by guarantee bodies and guarantee funds amounted at year-end to
approximately €3.7 billion.
The broad range of existing products was updated to incorporate the main initiatives organised
in co-operation with trade associations and local public institutions (chambers of commerce,
regions and provinces), in addition to specific initiatives launched at local level by individual
network banks.
More specifically, with a view to supporting local businesses and providing a concrete answer
to strong concerns in the sector nationally in Italy over credit rationing for the real economy,
in the second half UBI Banca launched the project T 2 Territorio per il Territorio (C 2 The
Community for the Community), which involved the acquisition of funding – through the issue
of dedicated bonds – to be put back into circulation by making credit lines available under
competitive conditions destined to support communities in the Group's local markets. The
following initiatives were promoted as part of that project – designed to help channel funding
acquired directly into a local market to support SMEs operating in that local area – by the
Parent or by Group banks in co-operation with local organisations and associations (consisting
for example of trade associations):
the first, launched in July, involved BBS, BPB and Banca di Valle Camonica in partnership with the
Associazione Industriali di Brescia (Brescia Association of Industrialists) with the issuance of bonds
for a total of €23 million and the subsequent creation of a loan pool of €46 million;
the second, which saw the issuance of bonds for a total of €16 million by BPB, BBS and Banca di
Valle Camonica and the subsequent creation of a loan pool of €32 million for the benefit of member
companies of the Bergamo Confindustria (confederation of industry);
there then followed an issuance of bonds, listed on the MOT (electronic bond market), for a total of
€18.55 million by UBI Banca – placed by BPCI, BPB and BBS – with the subsequent creation of a loan
pool of up to €37.1 million for the benefit of member companies of Assolombarda (an employers
association in the Milan area);
this was again followed by the issuance of bonds for a total of €5 million by BPB and the subsequent
creation of a loan pool of €10 million for the benefit of businesses registered with the Lecco Chamber
of Commerce and of member companies of the main local trade associations.
Further initiatives will be added to these in 2013, including those of BRE to assist business
members of the Cuneo Confartigianato (artisans’ association) and of BPB to assist businesses
registered with the Brianza Chamber of Commerce, Monza Brianza which are members of the
main local trade associations.
49

In the light of the increased competition between guarantee bodies and ownership changes
that have occurred in recent years (company reorganisations and mergers between guarantee
bodies and the transformation of some guarantee bodies into intermediaries supervised by the
Bank of Italy), activity to revise existing convention agreements with guarantee bodies (to bring
them into line with Bank of Italy prudential supervisory provisions in order to further reduce
regulatory capital requirements) has continued and is almost complete.
Third sector
The UBI Community customer service model for the church and non-church nonprofit world
became firmly established in 2012. It was launched in the second half of 2011 with the
objective of providing rapid and effective responses to emerging needs in the third sector,
thereby further enhancing ties between the network banks and local communities.
Relations with nonprofit organisations (NPOs) are of strategic importance due to the
considerable growth in this sector over the last two decades. According to the latest – and still
provisional – Istat (national office for statistics) data (third nonprofit census), today there are
over 470 thousand NPOs active in Italy and they involve individuals linked to them –
employees, volunteers and helpers – which total at least five million people. UBI Community
was been positively received because it is considered a commercial proposal that is calibrated
to meet real needs and is able to support growth plans, thanks to its range of products and
services specially designed to provide banking and credit support for the management of daily
activities, projects and investments.
The range of commercial products and services has been progressively added to as follows:
• in April 2012, UBI Community social bonds were launched, an important innovation in the sector
nationally, which brought Italy into line with the more evolved European countries in the area of
finance for nonprofit organisations. UBI Community social bonds provide subscribers with the
opportunity to obtain a return on their investment (in line with the rates offered by the Bank with
respect to similar investments) and at the same time to help support high social value and impact
projects organised by public and private sector organisations in local communities. More specifically,
the Bank donates part of the funding acquired to support those initiatives, or it injects it into a loan
pool to disburse funds to third sector initiatives.
The reception by customers was very positive, which bears witness to the extent to which the Bank,
with its values and objectives as the issuer, is in tune with local communities: from April until the
end of the year, the UBI Banca Group issued 17 social bonds (14 by the network banks and three by
the Parent), which in many cases were fully subscribed well before the issue period came to an end.
Social bonds were issued worth €198.54 million, which resulted in charitable donations of over €1
million to institutions operating in the following sectors: social and welfare (8), public utility
infrastructures and services (5), universities and research (1), education and training (1) and
community and economic development (2).
Particularly important among these were the social bonds “UBI Comunità per l'imprenditoria sociale del
sistema CGM” issued by the Parent, which enabled a loan pool of €17.552 million to be created to be
used to grant medium to long-term loans under competitive terms and conditions to consortiums,
firms and social co-operatives that are members of the Consorzio Nazionale della Cooperazione Sociale
Gino Mattarelli (CGM – the Gino Mattarelli national consortium of social co-operation). Further
issuances of social bonds are planned for 2013;
• marketing of a new bundled product was launched in June 2012 entitled “Non Profit On Line”,
specially for organisations that prefer to use internet channels.
At the same time, the road show for the presentation of UBI Community to operators in the
sector, which had visited Milan, Genoa, Bergamo, Pavia and Jesi the year before continued. In
March and April Banca Popolare di Bergamo organised meetings at Varese, Monza and Erba
and in November Banco di Brescia and Banca di Valle Camonica held a joint event at Concesio
(BS).
Important agreements have been concluded in the UBI Community context with major
nonprofit organisations and representatives of operators in the sector – the CGM Co-operative
Group, Federazione Italiana Scuole Materne di Bergamo e Brescia (the Bergamo and Brescia
Italian Federation of children’s nurseries) and Accademia Teatro alla Scala (La Scala theatre
academy) – designed to make products and services available to stakeholders under
competitive terms and conditions, with particular reference to access to sources of finance.
A fundamental requirement of the UBI Community customer service model is thorough
assessment of the creditworthiness of nonprofit organisations. Special tools have been created
for this purpose, able to value them on the basis of their specific characteristics and testing
was carried out during the year by some network banks to verify their effectiveness, with a
view, therefore, to adopting them as additional tools for assessing nonprofit counterparties.
50

With technical assistance from AICCON (Italian Association for the promotion of a co-operation
and nonprofit culture), UBI Banca has created the first national observatory on finance and
the third sector, a tool for processing and divulging information annually on the financial
requirements of the third sector. The observatory’s first publication was on the results of a
survey of the financial requirements of a sample of social co-operatives in Italy.
Authorities
The “authorities” segment comprises public authorities and those institutions for which the
banks in the Group provide treasury management and payment and collection services (1,894
services of this type were managed at the end of December).
Commercial guidelines were drawn up during the year to define the terms and conditions to
apply to the treasury management and payment and collection service for public authorities
on core services with the objective of standardising the approach by network banks. The
significant regulatory changes that occurred in 2012, and in particular the changeover of
many authorities managed to a “Single Treasury” – which involved an outflow of funds of
approximately €430 million as a result of the centralisation of all funds held in special
accounts opened in the name of the authorities with the Bank of Italy – placed a question
mark over the operating and financial balance underlying existing treasury and cash services,
which resulted in the increasing use of a “cost to serve” approach to this type of business. The
implementation of commercial guidelines will continue in 2013 for non-core services.
The year 2012 was also one of significant changes in the collection and payment service
provided for schools. The Group worked profitably with the MIUR – Ministry of Education,
Universities and Research – participating in the preparatory stages for the launch of a project
to adopt the “IT Ordinance” in schools and it created a special task-force to provide schools
with expert and professional assistance to help them with the changeover to a paperless
system.
The attention paid to the computerisation of treasury management and collection and
payment services provided to authorities also led to the proposal of a “substitute record
keeping” service for the relative documentation, which enables authorities, together with the
“IT Ordinance” to benefit from an efficient service which reduces operating risks and is
compliant with regulations for the digitalisation of public administrations.
A customer satisfaction survey was conducted in May and June on treasury and payment and
collection services provided to public authorities. This was also used for the certification of the
system for the management of the “quality of treasury services provided to public authorities”
(UNI EN ISO standard 9001:2008). The over 800 authorities interviewed gave very high
satisfaction scores for the service delivered by the Group, both in terms of expertise and
efficiency (see the following sub-section on customer care in this respect).
PattiChiari Consortium: Commitments to Quality
The involvement of Group banks in the PattiChiari Consortium continued during the year in
question with the application of “Commitments to Quality” and the dissemination of financial
education.
As concerns “Commitments to Quality” (some of which were subject to specific action to
update them in consideration of the very many changes in the regulatory framework),
monitoring of results confirmed the increasingly higher levels of compliance, with positive
repercussions on the standard of service actually provided to customers.
Further action was planned in the second half of the year to enable customers, even as early
as 2013, to see even more clearly the areas in which self-regulation of the industry is
developing (current accounts compared, the transferability of services, the security of
transactions, credit assistance), thereby enhancing the commitment of member banks.
The network banks also continued to take action with regard to the dissemination of financial
education, above all with didactic activities for students. The brilliant results achieved, both in
numerical and qualitative terms, were again explicitly acknowledged by the consortium.
The contribution already made for many years by the Group to broadening knowledge on
financial subjects is designed to represent not only a concrete response to the growing demand
for financial education in society, but also a new tool for developing customer relationships
that are increasingly more open and positive on the Group’s markets.
51

The Private-Corporate Banking Market 10
UBI Banca carried out an in-depth analysis in 2012 of the needs of private and corporate
banking customers, which led to the definition of a new organisational model and a new
commercial range (Value Proposition) differentiated for each customer segment (cluster).
In consideration of the strategic focus on the development of stable funding, on a range of high
value added products and on the need to increase the customer base, the integration of private
and corporate banking markets was assessed positively. It is closely bound together by an
organisational “fabric”, a range of products and services and an expert professional team able
to satisfy the needs of the most evolved customers, both individuals and businesses, in a
complete, synergetic and innovative manner.
The private and corporate banking markets were therefore the protagonists of the birth of a
new customer service model in November 2012 entitled UBI Banca Private & Corporate Unity.
The new model involved the identification of three distinct customer segments served by 50
operating units (Private & Corporate Unity) and 81 “corners”:
- Private Individuals not Entrepreneurs and not Linked to Companies: 36,500 customers
with financial wealth of €20 billion, served by 200 Private Bankers or Private Banking Coordinators;
- Private Individuals Entrepreneurs or Linked to Companies: approximately 22,500
customers with financial wealth of €15 billion, served by 100 Wealth Bankers;
- Corporates: approximately 32,000 customers with capital of €35 billion, served by
approximately 600 Corporate Bankers and Assistants supported for “foreign commercial”
activities by 212 specialists operating in 37 Foreign Centres, in addition to the
Centrobanca, UBI Factor and UBI Leasing specialist centres.
Given the specific nature of each cluster, the range of advisory products and services was
standardised in parallel and currently comprises the following services:
1. the Pro-Active Wealth Advisory Service: a customised financial advisory service which performs
thorough assessments of the characteristics and needs of family groups, analysing estates and
proposing the best investment solutions available on the market. It is designed for:
a) private individuals of high financial standing;
b) businessmen and professionals linked to businesses who are offered integrated financial advice
(business and personal);
2. Corporate Advisory, designed for businessmen or companies;
a) Corporate Advisory: carries out outlook analyses on financial statements, sector performance and
benchmarking. At the same time it highlights risk factors to be included in analyses of a
businessman’s personal investments. This activity also allows proposals to be made to optimise
the balance in financial management between the personal wealth of the businessman and the
funding costs of the company;
b) the “Family Business Advisory Service: this is designed to meet specific customer requirements for
generation turnover, capital protection, family and corporate governance and estate control
structures.
3. Pro-Active Wealth Advisory Institutional: this is a customised financial advisory service which
performs thorough assessments of the characteristics and needs of institutional customers (Church
institutions, Charities and Onlus nonprofit organisations, Banking Foundations, Building Funds,
Trade Association Funds, Guarantee Body Consortia, Bank Treasuries), by analysing their capital and
making investment proposals consistent with their institutional objectives and with the presence of
regulatory constraints.
10 The “Private-Corporate Banking Market” comprises customers with financial wealth (direct and indirect funding) of greater than
€500,000 and firms with turnover of greater than €15 million. More specifically, customers with financial wealth of greater than
€2 million are defined as “high net worth” and firms with turnover of over €250 million are defined as “large corporate”.
52

The following action was taken with regard to commercial activity in the first ten months of
2012 – before the definition of the new model – on the individual private and corporate
banking markets.
The process continued with regard to services for “private banking” customers to develop a
planning and financial consulting platform which is used, on the basis of customer data
analyses acquired from answers to the MiFID questionnaire, to formulate financial solutions
which match customers’ requirements.
The following activities were performed with regard to products in 2012:
the “UBI Pramerica asset management” range of products was broadened:
- the launch of the new “GP Top Selection” which, in the context of open customer portfolio
managements, allows customised lines of investments to be created on the basis of the
expectations and the risk profile of each subscriber;
- expansion of the range of Sicav classes dedicated to the private banking market;
the range of banc assurance products was revised by:
- the launch of two new external fund unit policies, that can be selected from 21 different and
prestigious asset management companies to ensure the maximum ability to diversify in terms of
asset class.
As concerns corporate customers on the other hand, in consideration of the negative
macroeconomic scenario, a commercial policy differentiated by customer segment, already
launched in 2011 was continued. Its objective was to maintain the Group’s traditional “local
community banking” vocation and to develop the large corporate segment selectively, with the
continuation of repositioning action designed to maximise asset returns. This objective was
pursued in a context of rigorous monitoring of the portfolio, which resulted in de-risking
actions (withdrawal from high risk sectors and positions), while ensuring support at the same
time to the core segment. Given the risk of the economic context, a particular focus was placed
on the management of pricing in relation to the actual credit ratings for single positions.
As concerns the foreign commerce sector, the Group maintained its market position within an
economic environment of general crisis which had a negative impact on international trade in
2012. This activity gave rise to stable results, where a moderately positive rise in the exports
curve was accompanied by a sharp fall in imports (especially net of energy items).
The results for export business were unchanged compared with the year before and with the
performance of Italian exports which was positive, although in a negative economic situation,
which confirmed that Italian companies that are more open to international markets were
better able to manage the crisis experienced by the country.
The Group’s import business performed negatively in line with the fall in the country’s
imports, due to the collapse of domestic sales and the consequent failure to turn over stocks.
Even in this context, the Group never relaxed its focus on the quantity and quality of business
volumes intermediated on behalf of corporate clients.
The harmonisation of the single European payments market (SEPA), introduced by further
PSD regulatory developments during the year, did in fact lead to a remarkable rationalisation
of operations with positive repercussions in favour of customers in terms of charges.
On the other hand, the Group is focused on and committed to providing greater assistance to
Italian customers on markets outside Europe. Its presence in BRIC countries for example with
representative offices in each of them is providing confirmation of an increasingly more
effective response to company needs and is an optimum method of making a positive impact
on the standard of service and advice provided. The focus on business with emerging
economies (Turkey, India, China, Brazil, Russia, Middle East) is therefore continuing in order
to identify – with the assistance of commercial agreements and partnerships with major
international operators – business areas with high value added connected with the world of
trade finance.
The Group is also continuing to pursue policies set in recent years, by investing in:
a) initiatives designed to strengthen its image and that of its individual local banks. UBI International
Open Day, a genuine international trade fair open to businesses, has now become a regular event.
After the success of the initiatives organised in 2010 at the Kilometro Rosso in Bergamo and in 2011
at the Brescia Trade Fair, the initiative was held in Milan this year (as part of the “Security 2012”
53

trade fair) and in Bari (organised by UBI Banca and Banca Carime to reach businesses in southern
Italy). The large numbers attending the events confirmed the validity of the format, which involves the
participation of professional firms operating directly on emerging markets as exhibitors;
b) constant monitoring of the quality of the service provided by the dedicated distribution network,
combined with the search for new technical and organisational solutions to render processes
increasingly more efficient. The efforts made were rewarded by customer satisfaction surveys which
recorded a flattering opinion from the corporate clients interviewed;
c) an increase in the professionalism of personnel, achieved as a result of a continuing commitment to
the commercial and technical training of the personnel involved in the delivery of foreign commercial
services.
Initiatives in co-operation with the European Investment Bank (EIB)
Having fully disbursed the first tranche in 2011, the UBI Banca Group continued to use the second
tranche of the “EIB covered bond” loan of €250 million, subscribed on 11 th November 2011 and used to
fund businesses operating in industrial, agricultural, tourism and service sectors, in order to implement
investment projects in the Republic of Italy and the European Union. The companies funded (some in the
form of finance leases) are SMEs with personnel numbering fewer than 250 employees or businesses with
employees numbering between 250 and 2,999 (mid caps).
Approximately 200 loans or leases had been disbursed for a total of €190 million as at 31 st December
2012.
As concerns new initiatives on the other hand, UBI Banca and Centrobanca signed agreements on 15 th
October 2012 with the EIB for four loan pools for a total of €130 million as follows:
− a “Mid Cap IV” loan pool, amounting to €50 million, for firms with between a minimum of 250 and a
maximum of 2,999 employees (Mid Cap) to finance any type of project in agriculture, industry and
services for the purchase/renewal of tangible assets, investments in intangible assets and support for
working capital;
− a “Business Network” loan pool, amounting to €25 million, to finance initiatives in industry, services
and the tourist sector by SMEs and Mid Caps belonging to a “business network” 11 ;
− an “Industry 2015” loan pool, amounting to €30 million, for firms of all types and sizes operating in
agriculture, industry and services for expenditure programmes for research, development and
innovation approved as admissible for “Industrial Innovation Projects” (Industria 2015) implemented
by the Ministry for Economic Growth;
− an “Emilia Romagna Earthquake Victims” loan pool, amounting to €25 million, for public authorities
and/or private sector companies hit by the earthquake last May located in Emilia Romagna or the
Lombard and Venetian provinces affected by the earthquake.
The disbursements and authorisations of funds drawn from those pools – which can only be used
through Centrobanca, but which are available to all Group customers – started to run from January
2013.
In addition to those credit lines, a further debt was subscribed on 28 th November 2012 (a “Global Loan”)
for €250 million, directly available to all Group banks. The purpose of this loan pool is to finance the
medium to long-term working capital requirements and investments of SMEs, MidCaps and private
sector businesses with more than 3,000 employees. Disbursement of loans drawn from that loan pool
runs from March 2013.
Finally, in view of the positive collaboration that has been established, the Group is currently preparing
new initiatives with the EIB for companies, and these should be operational in the second half of 2013.
11 Businesses which sign a network contract with which a group of companies can pursue the objective of increasing their ability to
innovate and to compete on the market (article 42, Decree Law No. 78/2010, converted with amendments by Law No. 22 of 30 th
July 2010).
54

Customer Care
Following on from previous years “customer care” consultation activities continued, with the
level of satisfaction surveyed for approximately 130,000 customers of the network banks
(private individuals and corporate customers) and analyses of the competition conducted,
involving over 12,000 customers of competitors.
The research measured satisfaction on basic issues regarding bank-customer relationships:
relationship with the branch, products and services, image and corporate social responsibility
(CSR). The UBINDEX, an index which measures the quality perceived by customers in relation
to each operational unit found the following for 2012: a stable score of 56 compared to the
previous year for the retail market; a fall of four points to 50 for the corporate orate market, which is
nevertheless consistent with the difficult economic context; and an increase to a score of 56 for
private banking customers.
In addition to the usual subject areas surveyed, the Group decided to focus in-depth on issues
regarding the following: affluent customers, in consideration of the launch of UBI Gold; mini-
branches, after the organisational changes; and on lost customers, in order to improve
management of account closure processes.
Surveys were also carried out on “Treasuries” and public authorities and also on customers
who operate abroad:
• with regard to treasury services delivered to public authorities, 806 customers were
interviewed, representing municipalities, health institutes and hospitals, schools and
consortia, which recorded very high satisfaction scores on the service as a whole (UBINDEX
score of 74, higher than for the previous survey in 2010). The strengths declared were
expertise and efficiency, to the extent that the authorities would choose UBI Banca again.
Authority customers appreciate dealing with the same person in daily contacts with the
treasury office and short response times, but above all a service which meets their needs.
Excellent judgements were made on all services provided and in particular on the security
of the service and on compliance with the conditions set in the tender documents. These
customers said they received satisfactory answers to requests for regulatory and
operational information and when problems were raised or complaints made, these were
resolved in most cases;
• the 500 corporate clients interviewed who operate abroad making use of UBI Banca services
and products were generally ly more satisfied than ordinary customers (UBINDEX 58), with a
satisfaction score that increased with the number of services used (the most satisfied
55

customers where those who use advisory services). Those who use local “Foreign Centre”
services recorded the highest satisfaction scores (UBINDEX 69) and they particularly
appreciated the ease of contact, the speed with which transactions were performed and the
advice offered.
One initiative deployed in the retail market was measurement of satisfaction for small
business customers in the retail market after a “check-up” with the branch manager: the
extremely positive result of the survey confirmed the knowledge that frequent contact is a
primary condition for the high quality of customer relationships and user satisfaction. The
score recorded after the meeting was in fact eleven points higher than the total for small
businesses.
The diffusion of a “quality” culture and of customer satisfaction is of fundamental importance,
amongst other things, in training. Consequently a remote training course was organised in
2012 on customer satisfaction which reached staff throughout the Group. The course was
taken by over 11,000 employees.
Education on quality is also provided with sections on the subject inserted in standard
training programmes, such as that for future branch managers, or within specific programmes
designed to enhance human resources.
Consultation activity also involved internal customer satisfaction (CSI) surveys, which involved
“internal customers” (i.e. the distribution network staff in contact with the final customers of
bank) and the suppliers of services to the distribution network (i.e. units at the Parent, UBI
Sistemi e Servizi and the product companies).
The purpose of the CSI surveys is to understand the level of satisfaction experienced with the
various services available to the distribution network, which could determine the level of
customer satisfaction experienced by the final customer.
An initial survey was carried out in 2011 to measure satisfaction with services provided to the
distribution network, such as the Contact Centre, the Help Desk, Training, QuiUBI Business
and Companies and also UBI Pramerica. Following a series of actions taken on the basis of
the results, the same subjects were proposed again at the end of 2012 to measure the
effectiveness of the action taken. Improvements were found on all services in terms of
simplicity and speed, with particularly positive judgements given for UBI Pramerica and the
Help Desk on most aspects surveyed.
An additional survey was commenced during the year to measure distribution network
satisfaction with 16 software applications in daily use (these included management of
customer details, applications to support the grant of loans and credit monitoring, product
sales and credit transfers). Each survey was carried out on over 11,000 staff to whom a total of
75 thousand questionnaires were distributed (they were sent via mail using the Computer
Assisted Web Interviewing – CAWI – method). These initiatives were received positively and the
percentage of staff who completed the interview was close to 60%. Over 46 thousand
completed questionnaires were analysed.
Complaint management in the network banks
The management of claims and complaints constitutes a fundamental tool for the UBI Banca
Group, in support of customer satisfaction management. Reports made by customers allow the
efficiency of processes to be investigated and constitute a tool for verifying the quality of
services provided and a guide to consequent corrective action where necessary. Careful and
prompt complaints management is also used as a tool to reduce potential “reputational risk”
connected with manifestations of dissatisfaction, when it is badly managed.
The process is strongly rooted locally: the network banks respond to complaints made by
customers through their own operating units. Centralised specialist units on the other hand
are involved in technical investigations of complaints and carry out administrative formalities.
This is all carried out in full compliance with the time limits set for processing complaints by
legislation and regulations and the aim is to work well within those time limits where possible.
Moreover, the entire process is co-ordinated by a unit specifically assigned at the Parent which
works in customer care.
56

Distribution of complaints received by the network
banks in 2012 by channel of reipt
Hardcopy 62.7%
In 2012 a total of 4,551 complaints were
received by the Group’s network banks,
down by 1.5% over the previous year..
The total percentage of solutions in
favour of customers was 35% (slightly
down compared to 39% in 2011). No
Website 7.9%
backlogs existed at the end of the year
in the processing of complaints.
The profiles of customers complaining
again consisted – by over 93% – of
customers with active accounts with the
network banks. The frequency of
customer complaints is a little over
eleven complaints for every 10,000 customer relationships.
The policy pursued for years now by the Group (to make conditions easy for customers to
make complaints) is translating into an increasingly greater use of remote communications
tools: emails and official complaint forms on the network bank websites, which total 37% of
complaints communicated.
An analysis of complaints by product or service confirm the composition that has been
established in the past with a prevalence for current accounts and savings deposits (39% of
the total), a reduction in the percentage for securities and investment services (10%) and an
increase in complaints over mortgages and loans (19%).
As concerns reasons, yet again for the year just ended, the main reason was the execution of
transactions (31% compared to
32% in 2011), followed by items
relating to the management of
terms and conditions, which as a
whole accounted for 27% of
complaints.
Verbale / telefonico
0,2%
Email 29.2%
Current accounts and savings
deposits
Securities and investment services
Complaints by product/service
0% 10% 20% 30% 40% 50%
In addition to initial complaints
and the relative repeat
complaints, the picture for
complaint management in 2012 is
completed by mediation
procedures initiated by customers
in accordance with Legislative
Decree No. 28/2010 and by
appeals to alternative mediation
bodies: 642 applications for
mediation were made for the
network banks. A total of 71
mediation processes were
concluded with a settlement
during the year.
A hundred and one cases were
presented to the Financial
Banking Arbitrator with 92 cases
concluded, 32 of which in favour
of customers. The Banking
Ombudsman who specialises in
complaints concerning investment
instruments dealt with six
applications, two of which settled
in favour of customers.
A total of 127 complaints were
Loans and mortgages
Collection and payment services
Credit and debit cards
Insurance products
Other
General aspects
Execution of transactions
Application of conditions
Other
Frauds and losses
Communication and information to
customer
Conditions
Compounding of interest
Creditworthiness or similar
Reports to the centrale rischi (central
credit bureau)
Organisational aspects
Personnel
Equipment malfunctions
Complaints by underlying grounds
0% 10% 20% 30% 40%
2012
2011
2012
2011
57

filed with the supervisory authorities (122 with the Bank of Italy and five with the Consob –
Italian securities market authority).
Distribution of complaints received in 2012
by operating unit
An analysis of statistics for complaints show that
21% of local operating units received no complaints
and 23% received one complaint only in 2012 12 .
23%
15%
21%
41%
Operating units with more than 2 complaints per year
Operating units with 2 complaints per year
Operating units with 1 complaint per year
Operating units with no complaints
***
Again with regard to complaints, we report that the
merger of B@nca 24-7 into UBI Banca resulted in
769 complaints being recorded in the Complaints
Register of the Parent along with the related ADR 13
files (28 mediations, 59 applications to the Financial
Banking Arbitrator).
The complaints related to credit card business,
where UBI Banca has become the direct issuer, and
to retail loans, already in the portfolio of the merged
bank.
The cases entered in the register relate both to
matters which migrated from this consumer bank
and to complaints managed directly after the merger took effect (23 rd July 2012).
12 The data is not comparable with 2011 because of the massive restructuring performed on the branch network during the year.
13 ADR is an acronym for alternative dispute resolution and therefore relates to bodies responsible for providing this service, such as
the Financial Banking Arbitrator and the Banking Ombudsman.
58

The distribution network and
positioning
The branch network of the Group
As at 31 st December 2012 the UBI Banca Group had 1,735 branches (which numbered 1,740
at the date of this report) as compared to the 1,884 at the end of 2011.
The branch network of the UBI Banca Group in Italy and abroad
number of branches
31.12.2012 31.12.2011 Change
UBI Banca Scpa 3 2 1
Banca Popolare di Bergamo Spa 353 358 -5
Banco di Brescia Spa 322 364 -42
Banca Popolare Commercio e Industria Spa (1) 219 235 -16
Banca Regionale Europea Spa (2) (3) 259 229 30
Banca Popolare di Ancona Spa 220 238 -18
Banca Carime Spa 255 294 -39
Banca di Valle Camonica Spa 66 66 -
Banco di San Giorgio Spa (3) - 57 -57
UBI Banca Private Investment Spa 25 26 -1
Centrobanca Spa 6 6 -
IW Bank Spa 2 2 -
B@nca 24-7 Spa - 1 -1
UBI Banca International Sa - Lussemburgo 3 3 -
Banque de Dépôts et de Gestion Sa - Svizzera 2 3 -1
TOTAL 1,735 1,884 -149
Total Branches in Italy 1,727 1,875 -148
Financial advisors 672 713 -41
ATMs 2,337 2,451 -114
POS TERMINALS 60,049 61,224 -1,175
(1) The figures do not include nine units dedicated exclusively to pawn credit operating under the Banca Popolare
Commercio e Industria brand.
(2) The figures include three foreign branches.
(3) The change takes into account the effect of the merger of Banco di San Giorgio into Banca Regionale Europea
which became effective on 22 nd October 2012.
As already reported in the previous section “Significant events that occurred during the year”,
the changes that occurred compared to the end of 2011 mainly reflect two important actions
taken to rationalise the branch network which took place over the twelve month period.
- The first step implemented and effective from 27 th February 2012 involved the closure of 32 branches
and 46 mini-branches, as well as the transformation of 40 branches into mini-branches and one minibranch
into a branch.
- A second step effective from 10 th December 2012 involved the closure of 34 branches and 33 minibranches
as well as the transformation of 80 branches into mini-branches.
A summary is given below of the changes that occurred from the beginning of the year until
the date of this report which affected Italian branches :
• UBI BANCA, following the merger into it of B@nca 24-7, it opened a branch in Via Stoppani in
Bergamo in July to support operations to manage the outstanding loans, while at the same
time it closed the existing branch of the merged bank;
• BANCA POPOLARE DI BERGAMO closed a branch in Como in Via dei Mille in February 2012,
while in March 2012 it opened a new branch for business in Rome in Via dello Statuto. In
July and September it closed mini-branches operating in Milan at the Centrobanca and in
Luino (Varese) in Via Vittorio Veneto, while the Ciampino (Rome) branch became
operational in October. In December one branch opened in Lurago D'Erba whereas 5
59

anches were closed 1 . In January 2013, the treasury branches in Camerata Cornello, Riva
di Solto, Roncola (Bergamo), Lozza and Castelseprio (Varese) were transformed into minibranches;
• BANCO DI BRESCIA closed 22 branches in February and 20 in December 2 ;
• BANCA POPOLARE COMMERCIO E INDUSTRIA closed ten branches in February and four in
December 3 and another two mini-branches at the beginning of November in Milan,
respectively in Via Trivulzio and in Via Grassi;
• BANCA REGIONALE EUROPEA opened the mini-branch at the Santi Antonio e Biagio hospital at
Alessandria in January, while in February five mini-branches were closed down located on
Via Margarita at Cuneo, Casteldelfino and Crissolo (Cuneo), in Via Lega Lombarda at
Valenza (Alessandria) and Ghiffa (Verbania). In December 18 other closures took place 4 ;
• BANCA POPOLARE DI ANCONA opened a new branch in March at San Salvo (Chieti) and closed
13 units in February and six in December 5 ;
• BANCA CARIME opened a mini-branch at the University of Bari in May, while it closed 24
branches in February and 16 in December 6 ;
• BANCO DI SAN GIORGIO, before its merger into the Banca Regionale Europea, had closed two
mini-branches in La Spezia in Corso Nazionale and in Sarzana (La Spezia) in Via Pietro Gori
and branches in Albenga (Savona) in Via Cesare Battisti, Vado Ligure (Savona) and
Ventimiglia (Imperia) in Via Roma in October;
• UBI BANCA PRIVATE INVESTMENT lastly closed a branch in Florence in Via Ricasoli, in February.
A full list of all Group branches in Italy and abroad is given in the final pages of this publication.
As at 31 st December 2012, the Italian distribution network of the Group was completed by
units dedicated specifically to private banking customers (private banking units and the
associated “corners”) and to corporate customers (corporate banking units and the associated
“corners”).
As can be seen from the table, at the end of the year, 104 private banking facilities were
operational, a decrease of three units, together with 98 corporate banking facilities,
unchanged on aggregate 7 .
1 Varese at 106 Viale Borri; Monza in Via Pesa del Lino; Gallarate (Varese) in Via Torino; Tradate (Varese) in Corso Bernacchi and
Besozzo (Varese) at 24 Via XXV Aprile.
2 In February: Barghe; Chiari in Via Maffoni; Gussago in Via Richiedei; Leno in Via Garibaldi; Lumezzane in Via Montini in the San
Sebastiano district and in Via Bixio in the Pieve district; Manerbio in Via Cremona; Ospitaletto in Via Rizzi; Salò (Brescia) in Piazza
Vittoria; Soncino (Cremona) in Largo Manzella; Lodi in Via Fissiraga; Codogno (Lodi) in Via Roma; Mantua in Via Bertani; Quistello
(Mantua) in Via Europe in the Nuvolato district; Cologno Monzese (Milan) in Via Cavallotti; Paderno Dugnano (Milan) in Via Tripoli;
Arta Terme (Udine); Viterbo in Via Cattaneo and in Via San Lorenzo; Venezia; Verona in Piazza Simoni and Storo (Trento) in the
Lodrone district.
In December: Brescia in Via San Rocchino, in Via Volturno and in Via Orzinuovi; Bedizzole in Via Sonvigo, Capriano del Colle in the
Fenili Belasi and Milzano district (Brescia); Bergamo in Via Borgo Palazzo; Milano in Via Staro, in Via Marche and in Via Muratori;
Cremona in Piazza Risorgimento; Rubano (Padova) in the Sarmeola district; Verona in Via Salgari; Castel d’Azzano and San Giovanni
Lupatoto (Verona); Altavilla Vicentina (Vicenza); Pieve di Soligo and Resana (Treviso); Magnano in Riviera (Udine) and Vasanello
(Viterbo).
3 In February: Milan in Via Pirelli, in Piazza Siena and in Via Saffi; Gorgonzola (Milano); Brallo di Pregola (Pavia); Voghera (Pavia) in
Via Sant’Ambrogio; Imola and San Giovanni Persiceto (Bologna); Formigine (Modena) and Colorno (Parma).
In December: Milan in Via Astesani; Vimodrone (Milano); Pavia in Piazza Duomo and Cassolnovo (Pavia).
4 Torino in Corso Trapani; Chianocco (Torino); Cuneo in Piazza Europa; Alba (Cuneo) in Piazza Savona; Alessandria in Piazza Marconi;
Casale Monferrato (Alessandria); Tortona (Alessandria) in Via Sacro Cuore, in Corso Don Orione and in the Rivalta Scrivia district;
Novara in Via Canobio; Borgomanero in Piazza Martiri della Libertà and Gozzano (Novara); Asti in Piazza 1° Maggio; Biella in Via XX
Settembre; Cossato (Biella) in Via Pajetta; Genova in Via Merano; Rapallo (Genoa) in Via Diaz and La Spezia in Corso Cavour.
5 In February: Belvedere Ostrense and Ostra Pianello (Ancona); Appignano (Macerata); Piobbico (Pesaro Urbino); Riardo (Caserta);
Naples in Piazza del Gesù Nuovo; Terzigno (Naples); Rimini in Via Caduti di Marzabotto and Pennabilli (Rimini); Guidonia Montecelio
(Rome) in Piazza Buozzi; Perugia in Via dei Filosofi; Collazzone and Fossato di Vico (Perugia).
In December; Fossombrone (Pesaro Urbino) in the Isola di Fano district; Treia (Macerata) in the Passo Treia district; Falerone (Fermo)
in Piazza della Concordia; Gualdo Cattaneo (Perugia); Pescara in Via Latina and Limatola (Benevento).
6 In February: Carolei, Francavilla Marittima, Grimaldi, Rocca Imperiale Marina (Cosenza); Squillace (Catanzaro); Cutro (Crotone);
Bovalino, Delianuova, Gioiosa Ionica, Molochio (Reggio Calabria); Briatico (Vibo Valentia); Matera in Via Dante Alighieri; Maratea
(Potenza); Atena Lucana and Sapri (Salerno); Bari in Corso Italia and in Via M. Cristina di Savoia; Fasano (Brindisi) in the Pezze di
Greco and Montalbano districts; San Pietro Vernotico (Brindisi); San Severo (Foggia) in Corso Garibaldi; Gallipoli and Ruffano
(Lecce); and Taranto in Via Battisti.
In December: Rende (Cosenza) in Piazza degli Eroi; Guardavalle and Nocera Terinese (Catanzaro); Crotone in Via Cutro; Stilo (Reggio
Calabria); Bernalda in the Metaponto and Pisticci (Matera) and Marconia districts; Avigliano (Potenza); Buccino, Buonabitacolo,
Corbara and Sarno (Salerno); Bari in Via Dalmazia; Monopoli (Bari) in Via Fra’ Ippolito; Brindisi in Via Commenda and Copertino
(Lecce).
60

Following the integration of the private
banking and corporate markets,
mention of which is made in the
previous section “Significant events
that occurred during the year”, in
January 2013 the new UBI Banca
Private & Corporate Unity facility was
established to unify and rationalise the
already existing private and corporate
facilities. The new unit will include 131
centres (50 PCUs and 81 corners)
throughout Italy.
The distribution network of the Group
was also supported by a network of
672 financial advisors reporting to UBI
Banca Private Investment, consisting
of 392 operating in the Central and
Northern Division and 280 in the
Central and Southern Division.
The decrease compared to the 713
advisors operating at the end of 2011
continues to reflect the dynamics of
appointments and departures designed
to progressively increase the size or
average profitability per capita of the
customer portfolios under
management 8 .
Private and corporate banking units as at 31st December 2012
31.12.2012 31.12.2011 Change
Private Banking Units 104 107 -3
Private Banking Units (PBUs) 55 58 -3
Banca Popolare di Bergamo 14 14 -
Banco di Brescia 7 7 -
Banca Popolare Commercio e Industria 8 8 -
Banca Regionale Europea 7 6 1
Banca Carime 5 5 -
Banca Popolare di Ancona 7 7 -
Banca di Valle Camonica 1 2 -1
Banco di San Giorgio - 3 -3
UBI Banca Private Investment 6 6 -
Private banking "corners" 49 49 -
Banca Popolare di Bergamo 21 21 -
Banco di Brescia 6 6 -
Banca Popolare Commercio e Industria 4 5 -1
Banca Regionale Europea 2 1 1
Banca Carime 7 7 -
Banca Popolare di Ancona 9 9 -
Corporate Banking Units 98 98 -
Corporate Banking Units (CBUs) 63 64 -1
Banca Popolare di Bergamo 19 19 -
Banco di Brescia 10 11 -1
Banca Popolare Commercio e Industria 9 9 -
Banca Regionale Europea 11 8 3
Banca Carime 5 5 -
Banca Popolare di Ancona 7 7 -
Banca di Valle Camonica 2 2 -
Banco di San Giorgio - 3 -3
Corporate banking "corners" 35 34 1
Banca Popolare di Bergamo 2 2 -
Banco di Brescia 11 11 -
Banca Popolare Commercio e Industria 5 5 -
Banca Regionale Europea 3 2 1
Banca Carime 3 3 -
Banca Popolare di Ancona 9 9 -
Banca di Valle Camonica 2 2 -
In a highly concentrated sector (the four largest companies occupy approximately 65% of the market), the
data for December published by Assoreti (national association of stock brokerage companies) place UBI
Banca Private Investment in tenth place in terms of total assets (ninth in terms of banking groups), with a
substantially stable market share of 2.20%.
The international presence
At the date of this report the international presence of the UBI Banca Group was structured as
follows:
• two foreign banks: Banque de Dépôts et de Gestion Sa (with two 9 branches in Switzerland
at Lausanne and Lugano) and UBI Banca International Sa (with headquarters in
Luxembourg and branches in Munich and Madrid);
• three foreign branches of Banca Regionale Europea in France (at Nice, Menton and
Antibes);
• representative offices in Sao Paolo in Brazil, Mumbai, Shanghai, Hong Kong and Moscow;
• investments (prevalently controlling interests) in four foreign companies: UBI Trustee Sa
and UBI Management Co. Sa, UBI Capital Singapore Pte Ltd 10 , Lombarda China Fund
Management Company 11 ;
7 The following changes occurred during 2012:
- with regard to private banking facilities, in July Banca Popolare Commercio e Industria closed a private corner at Roma Parioli,
while Banca di Valle Camonica closed a PBU at Franciacorta. In October, when Banco di San Giorgio was merged into Banca
Regionale Europea, the PBU at Ponente ceased operations, while the PBU at Levante was transformed into a corner;
- as concerns corporate centres, in January, Banco di Brescia transformed its two CBUs at Iseo (Brescia) and Bergamo into corners
at the same time as it opened a new CBU at Brescia. The Banca also closed two corners at Milan Lambrate and Montebelluna in
October and December. Banca Regionale Europea did, however, open a new CBU at Turin whereas, in July ,it transformed a CBU
in Milan into a corner. In October the Banca lastly amalgamated the three CBUs into the Banco di San Giorgio.
8 The average size of financial advisors’ portfolios increased from approximately €6.2 million to €6.6 million of assets administered
over twelve months.
9 BDG closed its Geneva branch in June 2012.
61

• a Branch of UBI Factor Spa in Krakow in Poland;
• 37 commercial co-operation agreements with foreign banks (covering more than 50
countries), two “Trade Facilitation” agreements with the European Bank for Reconstruction
and Development (EBRD) and with the International Financial Corporation (IFC) and also a
“product partnership” in the Middle East and in Asia with Standard Chartered Bank to
ensure corporate customers receive effective assistance on all the principal markets in
those areas.
Again in 2012, the UBI Banca Group sponsored events of national and international
importance in order to increase the visibility of its brand in Italy and abroad and to
consolidate its closeness to customers who operate on international markets. It also organised
conventions, meetings and events 12 .
Remote channels
The current progressively deteriorating economic environment has advised optimisation of
geographical market coverage by rationalising the branch network and pursuing a more
prudent policy for opening new units. In this context, the continuous growth and technological
improvement in direct distribution channels is therefore increasingly becoming a strategic tool
for the acquisition of new customers and for the management of relationships with the current
customer base, which also ensures savings on operating costs at the same time.
Therefore, in parallel with targeted closures of conventional bricks and mortar facilities, the
Group is extending multichannel bank services provided through a single platform that
combines all the direct channels available to the private individual and corporate customers of
the network banks: internet and mobile banking, customer services, self service branches
such as ATMs and kiosks, cards and evolved payment systems and POS terminals.
In addition to the attractiveness of the economic conditions compared to standard conditions
available at branches, the integrated multi-channel service provides increasingly broader
guarantees in terms of security, accessibility 24 hours a day, seven days a week and the
ability to customise to suit the characteristics of the users.
Channels available to customers include:
• the QUI UBI internet banking service for information on banking positions (current
accounts, securities deposits, payment cards, mortgages, insurance policies, etc.) and to
10 An operation to transfer control of this company from its previous parent company, Banque de Dépôts et de Gestion Sa, to UBI
Banca International Sa was completed on 30 th May 2012. Following this, the company changed its name from BDG Singapore
Private Ltd to UBI Capital Singapore Pte Ltd, its present name.
11 The company will change its name to Zhong Ou Fund Management Co.
12 The very many initiatives included the following:
- sponsorship by the representative office in Mumbai of the 8 th annual Indian Trade & Export Finance Conference held in
February;
- the contribution made by UBI Banca to the organisation of the twelfth International Conference of Russian Bankers and
Businessman, held in Rome on 23 rd and 24 th February. Staff members of the UBI Banca addressed issues regarding the economic
situation in the euro zone and relations between Italy and Russia, with a focus on the corporate market;
- collaboration by the representative office in Moscow in the organisation in March of the business mission in Russia, dedicated to
the food and agriculture sector, designed to organise meetings between companies from Brescia and Russia;
- participation on 19 th March as the exclusive banking sponsor in the 9 th edition of the China Trader Award, an important and
prestigious prize for Italian companies that have excelled in the development of business relations with Hong Kong and China;
- the presence of the Group's representative in Moscow as speaker at the convention, “Doing Business in Russia: what
opportunities for Italian companies with the entry of Russia into the WTO?" held in Milan on 28 th March 2012. The speech
focused on the local financial system, on the presence of the Italian banking system, on the methods of financing and on the
means of payment and risk hedging instruments;
- participation in May by the representative office in San Paolo in the multi-sector, joint Government-Regions-Chambers of
Commerce mission in Brazil, organised by the Ministry of Economic Development in co-operation with the Agency for the
Promotion Abroad and the Internationalisation of Italian businesses (ICE);
- the participation of the Group as main sponsor of INDIA DAY, an event organised by the MIP-Polytechnic of Milan held on 27 th
September to describe the country's economic situation, the main legal and financial problems and the services for Italian
companies;
- the third edition of the ”International Open Day” initiative designed to promote the internationalisation of Italian businesses. The
event was held at the Milan Trade Fair in Rho from 7 th to 9 th November and in Bari on 12 th November.
62

perform numerous payment and investment transactions autonomously, with maximum
security, speed and savings. The “Affari” (business) version for small business customers
provides access to specific additional functions for single bank management of a company,
which include the payment of single or multiple bills of exchange and the management of
commercial portfolios. The “Imprese” (Companies) version, which operates using the
services of the corporate banking interbank (CBI) platform, allows corporate clients to
consult their accounts remotely and to make payments with many advantages. These
include considerable savings in time, the optimisation of cash flows, improved organisation
of administrative activities, the automation of record making processes and the verification
and reconciliation of bank transactions. The authorised users may also see and operate on
the accounts of all the companies belonging to its particular group of companies;
• Customer Services, contactable on a toll free number even outside normal branch opening
times, available to customers less likely to use the internet or who do not have a
connection; 13 ;
• the Mobile Banking service for customers who wish to use the main internet banking
functions directly from their tablets, Blackberrys and smartphones, in the latter case
including the optimised version of the website (www.quiubi.it/m);
• a network consisting of over 2,300 self service facilities (ATMs and kiosks), which are
decreasing in number due to the rationalisation of the branches over the course of the year,
including over 300 able to deposit payments in cash and cheques using a “Bancomat” debit
card or the free-of-charge VersaQuick card (evolved ATMs) 14 .
At the end of the year the number of QUI UBI service customers grew by 15% to 1.07 million
(there were 928 thousand in 2011). This performance was driven by encouraging trends for
internet banking (up by 19.7% to 927 thousand users compared to 775 thousand at the end of
2011) including QUI UBI Business, for which users were over 112 thousand in December, up
from over 90 thousand twelve months earlier (+24.3%).
As concerns mobile banking, the number of monthly accesses to the site optimised for cell
phone navigation increased more than twofold to over 230 thousand (approximately 100
thousand in 2011), while approximately 100 thousand dedicated apps were downloaded.
The popularity with customers was also confirmed by the results for use over twelve months:
• +35%, to over 8.1 million, for payment and reload transactions;
• 54% of securities trades on regulated markets performed via internet;
• over a fifth of payments made using evolved ATMs;
• more than 2.8 million commercial contacts (2 million incoming and 800 thousand outgoing)
and over 37 thousand e-mails managed by customer services.
The initial results for the online sales platform launched in October 2011 are encouraging,
with 9,800 requests completed online and approximately 2,500 products sold.
These results were also assisted by continuous improvements made as follows:
• the trends on the platform for online sales of the Enjoy card and of QUI UBI from the
ubibanca.com commercial website and the quiubi.it site;
• the launch of numerous commercial initiatives to support the online sales of the prepaid
Enjoy card: including "Enjoy Your Summer", "Enjoy Your Card", “Enjoy & Fly” and “Enjoy &
Win”, the latter by using the Facebook social network to involve the greatest number of
potential customers;
• the expansion of the platform for small business and private customers with new
consultation functions (overall viewing of the commercial portfolio and “RiBa” automatic
electronic payment due date notification), payment functions (refusal to pay Ri.Ba.s) and
functions dedicated to increasing the security level of payment cards (e-mail alerts on
denied transactions);
13 Customer relationship and consultation activity was further expanded in the first half of 2012 with the opening of a new centre at
Varese, in addition to those already in operation at Brescia and Milan.
14 A new experimental software application “Qui Multibanca plus” will be piloted in 2013. It will enable new consultation and payment
services to be developed on the Group’s Bancomat debit card ATMs and will also allow marketing messages to be sent, matched to
customer profiles.
63

• the release of a virtual assistant (avatar) available in the area reserved for QUI UBI and QUI
UBI affari business internet banking, used for marketing initiatives to customers;
• the launch of the "Come over to QUI UBI and win!" competition to encourage QUI UBI Light
information service users to go over to the QUI UBI profile;
• the completion and development of free apps for all the main instruments on the market
(smartphones, tablets and BlackBerrys);
• the improvement in the graphics and the extension of the functions available on the mobile
site www.quiubi.it/m;
• the development of the "My accounts" service with the availability of new documents on safe
deposit boxes 15 .
New initiatives are also planned for 2013, designed to generally improve the services on offer.
These include the following: the development of the online sales platform with an increased
range of products that can be purchased (such as the QUBI’ modular account and non-life
banc assurance products); the development of an innovative demo of the multichannel bank
designed to help customers become familiar with the various channels available for banking
services; the development of a virtual assistant and the ability to provide reply to customers’
questions via an innovative semantic engine and the launch of a new site dedicated to UBI
Banca Private & Corporate Unity.
Cards and payment systems
Despite the continuing difficult economic market conditions, the UBI Banca Group continues
to be very active in the payment card business, on the one hand by seeking the most up-todate
technological solutions and, on the other, by conducting an effective campaign to support
the products offered.
The total number of Libra credit cards issued by UBI Banca and CartaSi amounted to
approximately 723 thousand. This decrease of 3.9% compared to the more than 752 thousand
units of the previous twelve months also marks the effect of the migration towards cards with
microchips which occurred in 2011, leading to a contraction in the numbers of inactive cards.
The negative performance of the economy was reflected in the 3.8% fall in the use of cards.
The range currently offered by the UBI Group is differentiated by type of user:
• private individual customers can choose between charge cards and revolving or flexible
cards (with repayment either of the balance or in instalments) of different varieties
according to the market (retail or private banking);
• companies, on the other hand, are offered business and corporate cards which vary
according to the credit limit and the services.
The merger by incorporation of B@nca 24-7 into UBI Banca on 23 rd July brought about the
internalisation in the Parent of the management of the existing cards and activities to issue
new Libra and Kalìa cards. This guaranteed continuity of the service offered to customers
which even improved in the areas reserved for the www.cartalibra.it and www.cartakalia.it
sites, which became accessible through direct connection from QUI UBI banking.
THE good performance by prepaid cards continued with total exceeding cards in December
which exceeded 269 thousand, a 21% increase over twelve months, mainly due to the success
of the Enjoy card, the prepaid card associated with an IBAN number and to the connected
commercial initiatives. In detail:
• Enjoy Special Edition, the card for Group employees issued in December 2011, which
allows a donation to be made to charitable projects;
15 As at the end of December the number of customers who had agreed to forgo receipt of hardcopy correspondence reached
approximately 598 thousand (+48% compared to 404 thousand at the end of 2011), while the number of ordinary and deposit
accounts using the “My accounts” service increased by an equally significant number (+51% to 837 thousand).
64

• Enjoy UBI Community, the card with a customised design and special terms and conditions
reserved for employees of non-profit organisations;
• Enjoy Pension, a card with special terms and conditions designed for pensioners who do
not have current accounts. Pensions can be credited to these with no limits on the amount;
• Enjoy S.I.P., the card dedicated to members of the Italian Paediatric Association featuring
customised graphics with special terms and conditions, sold both in branches and via
remote selling.
The positive reception by the public of prepaid cards is also seen in the increase by over 15%
in their use.
The number of debit cards issued by the Group was around 1.43 million with an increase of
6% over December 2011. The use of card also increased (+7.5% for purchases with
PagoBancomat debit cards and +4.6% for withdrawals).
Over the year the Group continued with its commercial initiatives aimed at consolidating its
current user base and at attracting new potential customers. Some of them were founded on
the principles of integrated multichannel services, resorting in sequence to other channels for
contacting customers (texting, newsletter, banners in the QUI UBI reserved section, phone
calls from customer services) 16 .
Action was also taken to support people affected by the earthquake in Emilia Romagna, Veneto
and Lombardy which took the concrete form of deferment of repayments on the Libra cards
with instalment options and on the Libra Extra/Extra Plus cards as well as the exemption
from commissions for withdrawals at ATMs made using Libramat debit cards both in Italy and
abroad.
The most significant technological innovation launched in 2012, however, was the realisation
of the pilot project "Enjoy Mobile Payments" presented to the market in January 2013. It
involves the virtualisation of a card (Enjoy) on a telephone SIM and the ability to make
payments using NFC smartphones on contactless POS terminals 17 .
As concerns payment systems, the Group also has over €60 thousand POS terminals installed
in retail outlets, slightly down on the previous year (-2%), the result of streamlining the
geographical market coverage of the network banks on the one hand and of the unfavourable
economic situation on the other. By contrast, volumes of business remained stable
(Visa/MasterCard) or increased slightly (PagoBancomat).
The necessary adjustments were completed over the twelve months to comply with legal
provisions requiring the elimination of commissions on petrol refuelling for amounts lower
than €100.
During the year in particular, in accordance with Regulation No. 260/2012 (the European
regulation issued with immediate effect on 30 th March 2012, which establishes the technical
and commercial requirements for credit transfers and direct debits in euro and amends
Regulation EC 924/2009):
• the commissions on all “foreign” credit transfers in the EEA 18 have been set at the same
level as those for domestic transfers, regardless of the amount of the transaction;
• activities continued for the migration by February 2014, as required by the Regulation, of
all domestic payment instruments (direct debits and credit transfers) to the corresponding
SEPA payment instruments (Sepa Direct Debit 19 and Sepa Credit Transfer respectively).
In addition to its constant technological improvement of existing products, 2013 will see the
Parent Company also engaged in:
- the launch of a new prepaid card with microchip technology which will change part of the
typical additional functionalities of the Enjoy card but this will be offered to customers who
are minors, to non-residents and to business customers;
16 The “Experience the magic of Paris” and “A weekend for a true connoisseur” competitions and the commercial campaigns were used
to increase cross selling with the offer of Libramat and Libra Classic cards and free membership for the first year.
17 See the section “Research & Development” for further details.
18 In addition to the 27 countries of the European Union, the European Economic Area also includes Iceland, Norway and
Lichtenstein.
19 In order to complete the range of services provided for businesses, marketing of the Sepa Active Direct Debit service will be
launched in the first half of 2013. The service will allow these customers to present payment collection instructions in euro to its
debtor customers within the SEPA area.
65

- in the progressive extension of the Contactless payment methods to other types of cards
(currently this opportunity is basically limited to the Enjoy card), and in the start-up of
replacement of the current POS terminals with equipment for Contactless technology;
The positioning of the Group
The table summarises the
market positioning of the UBI
Group in terms of branches,
conventional funding (excluding
bonds) and lending, both with
respect to the national and to
the regional and provincial
markets where the banks
operating in the Group have a
more significant presence.
The information is based on the
most recent data made available by
the Bank of Italy: 30 th September
2012 for branches and 31 st
December 2012 for the balance
sheet items, considered in relation to
branch location.
Despite the action taken to
rationalise the distribution
network in February 2012,
marginal differences can be
seen in terms of market share
for branches compared to end of
2011 data.
More specifically, the market
share of the Group at national
level was 5.4%, with market
shares again higher than 10%
in 15 Italian provinces, together
with a substantial presence in
Milan (9%) and Rome
(approximately 4%).
As concerns market share for loans,
the decrease for the Province of
Bergamo and, to a lesser degree, for
Lombardy is due mainly to
outstanding loans of the former
B@nca 24-7 contributed to the
Parent in July, affected by both an
organic reduction and by the
absence of grants of non-captive
loans, following the discontinuation
of distribution through indirect
networks.
UBI Banca Group: market share (*)
30.9.2012
Branches
Funding
(**) (***)
Lending
(***)
Branches
Funding
(**) (***)
Lending
(***)
North Italy 6.3% 5.9% 6.6% 6.4% 6.3% 6.8%
Lombardy 12.8% 10.0% 9.8% 12.9% 10.7% 10.0%
Prov. of Bergamo 21.2% 30.3% 40.6% 21.0% 32.3% 43.1%
Prov. of Brescia 22.4% 36.1% 35.7% 22.8% 35.8% 35.8%
Prov. of Como 5.8% 5.4% 8.3% 6.0% 5.8% 8.0%
Prov. of Lecco 5.9% 5.7% 7.2% 5.8% 5.1% 6.7%
Prov. of Sondrio 8.1% 1.7% 3.3% 8.1% 1.7% 3.6%
Prov. of Mantua 5.1% 3.3% 3.7% 5.6% 3.6% 4.3%
Prov. of Milan 9.1% 4.8% 3.8% 9.2% 5.1% 4.0%
Prov. of Monza Brianza 8.3% 7.1% 9.8% 8.2% 8.0% 8.8%
Prov. of Pavia 15.1% 15.1% 11.4% 15.6% 16.6% 11.9%
Prov. of Varese 23.3% 28.3% 20.7% 23.0% 30.3% 21.1%
Piedmont 8.3% 5.3% 6.3% 8.3% 5.6% 6.3%
Prov. of Alessandria 12.0% 7.6% 10.4% 11.7% 8.4% 10.0%
Prov. of Cuneo 23.8% 21.3% 16.5% 24.2% 22.3% 16.9%
Prov. of Novara 4.6% 3.5% 6.6% 4.6% 3.2% 7.0%
Liguria 6.0% 5.0% 7.8% 6.0% 5.2% 8.2%
Prov. of Genoa 4.9% 4.4% 7.2% 4.8% 4.6% 7.7%
Prov. of Imperia 6.0% 3.4% 9.1% 5.8% 3.6% 9.2%
Prov. of Savona 6.6% 3.5% 9.4% 6.3% 3.5% 10.1%
Prov. of La Spezia 9.0% 11.1% 7.0% 10.1% 12.2% 7.2%
Central Italy 3.3% 2.6% 2.5% 3.5% 3.1% 2.5%
Marches 7.8% 8.8% 8.8% 8.1% 9.4% 9.0%
Prov. of Ancona 9.5% 13.3% 11.8% 10.0% 14.1% 11.8%
Prov. of Macerata 8.4% 9.7% 8.8% 8.8% 11.5% 9.7%
Prov. of Fermo 10.8% 10.5% 15.0% 10.8% 9.5% 14.0%
Prov. of Pesaro and Urbino 6.2% 3.7% 4.6% 6.9% 4.1% 4.8%
Latium 4.2% 2.5% 2.6% 4.2% 3.2% 2.6%
Prov. of Viterbo 14.0% 11.9% 11.1% 14.7% 13.4% 11.5%
Prov. of Rome 3.9% 2.4% 2.5% 3.9% 3.2% 2.5%
South Italy 7.8% 6.5% 5.3% 8.2% 6.9% 5.3%
Campania 5.6% 4.3% 4.2% 5.8% 4.4% 4.2%
Prov. of Caserta 8.7% 6.9% 7.7% 9.0% 6.9% 7.0%
Prov. of Salerno 7.5% 5.3% 5.9% 7.9% 5.7% 6.3%
Prov. of Naples 4.6% 3.8% 3.4% 4.8% 3.9% 3.3%
Calabria 20.6% 20.8% 14.3% 22.1% 21.3% 14.1%
Prov. of Catanzaro 13.6% 16.1% 9.9% 14.2% 16.0% 10.1%
Prov. of Cosenza 24.2% 27.1% 19.5% 25.7% 27.8% 19.1%
Prov. of Crotone 16.2% 11.8% 7.5% 18.9% 11.8% 7.1%
Prov. of Reggio Calabria 20.6% 16.1% 11.3% 22.4% 17.1% 11.3%
Prov. of Vibo Valentia 24.3% 28.2% 19.0% 26.3% 28.4% 18.6%
Basilicata 13.8% 11.8% 8.8% 14.3% 11.8% 8.9%
Prov. of Matera 15.0% 10.8% 7.5% 15.7% 10.5% 7.3%
Prov. of Potenza 13.3% 12.5% 9.6% 13.7% 12.7% 9.8%
Apulia 7.7% 6.7% 4.9% 8.1% 7.2% 4.8%
Prov. of Brindisi 9.9% 8.1% 5.4% 12.0% 9.5% 5.9%
Prov. of Bari 9.8% 7.9% 5.4% 10.0% 8.6% 5.4%
Prov. of Barletta Andria Trani 6.5% 5.7% 4.9% 6.4% 6.4% 5.1%
Prov. of Taranto 8.0% 7.1% 5.3% 8.4% 7.3% 5.4%
Total Italy 5.4% 5.0% 5.4% 5.6% 5.3% 5.6%
(*) The financial data is taken from Bank of Italy statistics.
31.12.2012
31.12.2011
(**) Current accounts, certificates of deposit, savings deposits.
As a result of the characteristics (***) Market share by location of the branch.
of the two original groups, in
some areas where the Group’s presence is stronger, it continues to have a market share of
conventional funding and/or lending that is greater than the percentage of branches.
66

Human Resources
The composition of Group staff and changes in 2012
Group personnel
Employees actually in service
31.12.2012 31.12.2011 Changes 31.12.2012 31.12.2011 Changes
Number A B A-B C D C-D
Banca Popolare di Bergamo Spa 3,697 3,723 -26 3,787 3,795 -8
Banco di Brescia Spa 2,555 2,584 -29 2,577 2,594 -17
Banca Carime Spa 2,143 2,183 -40 2,278 2,320 -42
Banca Regionale Europea Spa 1,899 1,932 -33 1,982 1,996 -14
Banca Popolare Commercio e Industria Spa 1,676 1,713 -37 1,859 1,896 -37
Banca Popolare di Ancona Spa 1,675 1,711 -36 1,762 1,798 -36
UBI Banca Scpa * 1,412 1,465 -53 2,328 2,359 -31
Banca di Valle Camonica Spa 346 348 -2 341 345 -4
Centrobanca Spa 300 316 -16 310 316 -6
IW Bank Spa 202 280 -78 210 296 -86
UBI Banca Private Investment Spa 163 165 -2 149 153 -4
UBI Banca International Sa 101 98 3 93 93 -
Banque de Dépôts et de Gestion Sa 62 68 -6 62 67 -5
TOTAL FOR BANKS 16,231 16,586 -355 17,738 18,028 -290
UBI Sistemi e Servizi SCpA 2,061 2,021 40 762 676 86
UBI Leasing Spa 244 255 -11 223 245 -22
Prestitalia Spa * 170 104 66 83 96 -13
UBI Factor Spa 151 153 -2 138 144 -6
UBI Pramerica SGR Spa 145 142 3 117 120 -3
UBI Fiduciaria Spa 22 24 -2 17 17 -
UBI Academy SCRL ** 16 - 16 - - -
UBI Capital Singapore Pte Ltd 10 18 -8 10 16 -6
BPB Immobiliare Srl 9 9 0 4 4 -
UBI Gestioni Fiduciarie Sim Spa 7 7 - 4 4 -
Centrobanca Sviluppo Impresa SGR Spa 6 6 - 2 2 -
Coralis Rent Srl 4 5 -1 - - -
UBI Trustee Sa 4 4 - 4 4 -
UBI Management Company Sa 3 3 - 3 3 -
S.B.I.M. Spa 1 1 - - - -
TOTAL 19,084 19,338 -254 19,105 19,359 -254
Workers on staff leasing contracts 2 31 -29 2 31 -29
TOTAL PERSONNEL 19,086 19,369 -283
Employees on the payroll
On secondment outside the Group
- out 28 30 -2
- in 7 9 -2
TOTAL WORKFORCE 19,114 19,399 -285 19,114 19,399 -285
* On 1 st July the contribution to Prestitalia of the B@nca 24-7 line of business consisting of salary backed lending operations became effective. On the
following 23 rd July Banca 24-7 was merged into UBI Banca.
** In July 2012 UBI Academy was formed, without staff transfers. Staff from the consortium company, previously working in the Training Service were
transferred.
The table above gives details for each company of the actual distribution of employees (workers on permanent and temporary contracts,
and on apprenticeship contracts) within the Group as at 31 st December 2012, adjusted to take account of secondments to and from other
entities within or external to the Group (column A) compared with the position at the end of 2011 (column B) restated on a consistent basis.
Column C, on the other hand, gives details for each company of the number of employees on the payroll as at 31 st December 2012
compared with the end of 2011 also restated on a consistent basis (column D).
Compared to the figures published in the previous annual report, staff numbers as at 31 st December 2011 were adjusted as follows:
staff numbers at Banca Carime and Banca Popolare di Ancona increased by one including two reinstatements in the first quarter, due to
INPS (National Insurance) failing to recognise pension entitlements following retirement;
the UBI Banca workforce was restated to include the B@nca 24-7 and Silf mergers effective 23 rd July and 21 st December 2012. The total
figures also include a limited number of staff transfers to Prestitalia on 1 st July 2012, following the contribution of salary backed
operations;
the IW Bank workforce was restated to include the InvestNet International merger, effective 23 rd July 2012;
the Banca Regionale Europea workforce was restated to include the Banco San Giorgio merger, effective 22 nd October 2012;
UBI Insurance Broker was not included in the Group workforce due to the disposal of the company effective 31 st December 2012.
67

At the end of 2012, the total workforce of the UBI Banca Group numbered 19,086, compared
to 19,369 in December 2011 1 a decrease of 283.
These trends are the result of the almost complete elimination of workers on staff leasing
contracts (-29 contracts, almost all in the network banks), but is principally due to the
reduction in the workforce in terms of employees (-254), nearly half of which concentrated in
the fourth quarter.
Reductions in staff numbers reflects the efforts made to generate generalised efficiencies in all
Group companies, at the same time as the geographical and operational reorganisations that
accompanied the two large-scale branch rationalisations undertaken last year (in February
and December), in addition to the changes to units at the Parent, in the network banks and
the Service Companies.
The apparent exception of Prestitalia (+66 employees) was due to the contribution to that
company of B@nca 24-7 operations consisting of salary and pension-backed loans which
required an increase in the workforce using internal Group staff from governance and
operating units.
Furthermore, the increase recorded in staff numbers at UBI Systems and Services (+40
employees), is to be seen in relation to the transfer to that Company of the IW Bank operations
consisting of IT, Back Office, Security and Logistics operations, which involved the transfer of
78 employees, effective from 1 st December.
The decline in staff numbers includes 60 staff leaving after accepting leaving incentive
proposals for employees covered by the safeguards of the "Salva Italia" (Save Italy) decree,
launched in March, and completed within the following three months.
The table gives details of changes in the
type of employee contract, with a total
decrease in employees on the pay-roll over
twelve months of 254 (228 of which on
permanent contracts).
This change is due to:
- 456 staff leaving, of which 112
voluntarily, 109 retired (100 early
on incentive schemes) and 143 for
end-of-contract;
Employees on the payroll
Number 31.12.2012 31.12.2011 Change
Total employees 19,105 19,359 -254
of which:permanent 19,010 19,238 -228
on temporary contracts 87 104 -17
apprentices (*) 8 17 -9
(*) Contract for young people between the ages of 18 and 29, by which they acquire a
qualification through training at work which provides them with specific
occupational skills. The duration varies from a minimum of 18 months to a
maximum of 48 months.
- 202 new appointments composed of 61 permanent contracts and 141 temporary
contracts. The latter include the quota of 44 seasonal employees at BPB Immobiliare,
with the remainder being temporary staff hired to support company operations in
2012.
Apart from company
mergers, 586 employees
were involved in
intragroup transfers.
As shown in the table no
significant changes in the
composition of personnel by
rank occurred.
Composition of personnel in Group Banks by rank
Number 31.12.2012 % 31.12.2011 %
Senior managers 379 2.2% 391 2.2%
Middle managers 3rd and 4th level 3,250 18.3% 3,264 18.1%
Middle managers 1st and 2nd level 3,904 22.0% 3,886 21.5%
3rd Professional Area (office staff) 9,992 56.3% 10,256 56.9%
1st and 2nd Professional Area (other staff) 213 1.2% 231 1.3%
TOTAL FOR BANKS 17,738 100.0% 18,028 100.0%
1 The figures published in the consolidated Financial Statements as at 31 st December 2011 (19,405 employees) included 38 staff
working in UBI Insurance Broker, sold in 2012; but on the other hand, did not include the 2 employees (from the Banca Carmine
and Banca Popolare di Ancona) re-employed during the first quarter of 2012.
68

As at 31 st December 2012 the average age of Group employees was 45 years and two months,
compared to 44 years and four months at the end of 2011, reflecting lower staff turnover,
while the average length of service was between 18 years and six months, compared to 17
years and seven months a year before.
The percentage of part-time employees was 8.6% (7.9% at the end of 2011). Female staff made
up 36.9% of the total, unchanged compared to 36.8% the year before.
Further details in trends and in the composition of the Group workforce are given in the 2012
Social Report, which may be consulted.
***
As concerns the fourth quarter, staff numbers fell by 128 which mainly affected employees (in
total -126), due also to a number of temporary contracts coming to an end (28). Staff on
agency leasing contracts were also affected by contracts ending, with a reduction of two in the
quarter.
Redundancies for the period do not include staff leaving under the trade union agreement of
29 th November 2012 and the subsequent agreement signed on 12 th February 2013, for a total
of 736 staff at Group level, of which approximately 600 had already left in January.
Remuneration and incentive policies
Details of remuneration and incentive policies are reported in the Remuneration Report which
is given in another part of this document.
The report has been prepared in accordance with the “Supervisory Provisions on remuneration
and incentive policies and practices in banks and banking groups” issued by the Bank of Italy
on 30 th March 2011 and with articles 123-ter of the Consolidated Finance Act and 84-quater of
the Issuers’ Regulations. Reference is also made to public disclosure requirements under Pillar
III published in July 2011 by the Basel Committee on Banking Supervision as regulated by
Bank of Italy Circular No. 263 of 27 th December 2006 and subsequent amendments.
Further information is given on the matter in the UBI Banca report on corporate governance,
again in an attachment to this document.
Personnel management policies and instruments
In a particularly difficult economic context like that of the present, the combined skills and
professional abilities of each staff member represent a fundamental and strategic asset to the
Group. Now more than ever, fostering professional development means growing the intellectual
capital of the Group to create competitive advantages which will provide stability and reliability
to the Group's performance in the long term. We strongly believe that the strength of the
Group is its people and their value, and for this very reason, we have an on-going commitment
to the development of our human resources, their professional skills, and abilities, to ensure
that at every opportunity we nurture these skills and confirm the strategic importance of each
role. To achieve these objectives in a more uniform and synergetic manner, a shared vision of
management development and policies was outlined and implemented, taking into account the
individual requirements of each member company.
With this in mind, all the Group member companies have now adopted a standard role
system, and tools for skill assessment, performance assessment, and measurement of
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potential. These tools are used to increase knowledge of human resources and to define
actions consistent with supporting their career growth and development in terms of training
requirements, horizontal and vertical mobility, financial rewards, as well as cross company
transfers inside the Group structure.
Yearly measurement of potential and skill assessments were carried out respectively on 98.7%
and 91.2% of the Group staff.
In 2012, over 200 interviews were carried out using these "managerial appraisal" tools to
protect key roles in terms of new marketplace challenges and to promote the identification of
managers, consistent with the Group strategic goals in terms of organisational change. These
interviews are also an important instrument in identifying targeted career paths and to allow
for management engagement with the Group's key human resources.
Similarly, in order to foster opportunities for professional development, over 300 staff were
assessed in terms of their professional potential, 50% of which were Branch network
commercial managers. The results of these assessments will determine access to career paths
for future Branch Managers.
On the basis of these results, and during the year, in partnership with the Polytechnic of
Milan, an advanced career development course focused on the young talent within the Group
was launched, whereby they enrolled in a two year post-graduate Masters course. (the
following section specifically on training programmes may be consulted in this respect). At the
same time, and as happened in the past, specific career development training courses were
launched for other staff that were also assessed with the aim of strengthening their weakest
skills and competencies.
Trade Union relations
At the beginning of 2012 a process was implemented with the aim, on the one hand, of
rationalising the Group branch network, and on the other of revising the distribution model in
Banca Popolare Commercio e Industria, involving the introduction of the "Head Branch-Group
Branch” model, already effective in all Group companies, and fully and finally implemented in
February. The impact on staff working conditions only involved some limited geographical
mobility requirements.
As part of finalising the agreed procedures, on the 20 th April two trade union Memorandums of
Intent were signed relating to the B@nca 24-7 merger into UBI Banca, following the
contribution to Prestitalia of the B@nca 24-7 line of business consisting of salary backed
lending operations:
with regard to the B@nca 24-7 merger into UBI Banca, the parties shared the joint mission
of identifying appropriate solutions to minimise the impact on employees affected, by
introducing specific policies relating to insurance cover, supplementary pension benefits,
part-time contracts, and geographic mobility. Mobility itself was limited through identifying
opportune organisational actions to ensure that the distribution of the activities across
various geographic areas was optimised. With the aim of maximising human and
professional capital, particular importance is attributed to retraining and professional
development programmes for staff involved in occupational mobility processes and also for
staff required to work on a different IT system;
a memorandum of intent was signed with trade unions, to regulate overall treatment under
labour agreements with regard to both pay and conditions, for staff involved in the transfer
to Prestitalia, in relation to the contribution to Prestitalia of B@nca 24-7 salary and pension
backed loan operations.
In May 2012 the process commenced of transferring the training and managerial professional
development activities of Group companies to the consortium company UBI Academy. The
70

implementation of this programme involved transferring activities previously undertaken by
the UBI Banca Training Department and launching them at the same time at UBI Academy.
This operation which commenced on the 10 th of July did not impact on the relevant staff
involved, neither in terms of geographical mobility, nor in terms of their legal or professional
status.
Again in May negotiations commenced relating to the merger of Banco di San Giorgio into
Banca Regionale Europea and they were concluded with the signing of a trade union
memorandum of intent on 30 th of May. This operation formed part of a broader project
designed to strengthen the position of the UBI Banca Group both in terms of commercial
effectiveness and operational efficiency and its purpose was to simplify the Group structure
through the creation of a single operational unit focused on the north west of the country. This
required adopting limited geographic mobility measures, some transitory, in conjunction with
suitable professional qualification courses and retraining programmes for certain staff.
Agreements were signed at the end of June and the beginning of July at the network banks,
the Parent UBI Banca and UBI Sistemi e Servizi with trade union organisations for the
payment of company bonuses (“employee value added”) relating to 2011. It was agreed during
these negotiations, having examined company performances for the period and with account
taken of the overall economic situation and specifically in relation to the credit sector, to
introduce new, innovative instruments with, in addition to a cash payment, also a “welfare
plan” option which will allow staff to allocate their remuneration to finance services of a social
nature (e.g. educational expenses). Similar discussions commenced in July with the trade
unions at the product companies resulted in the signing of relevant agreements.
In October procedures commenced for the merger of Silf Societa Italiana Leasing and
Finanziamenti Spa into UBI Banca, with the signing of a trade union agreement on the 12 th of
November. The company integration, within the framework of the overall reorganisation of the
consumer lending arm, did not in itself cause any job losses, nor was any geographical
mobility required of the staff.
Again in October procedures for the transfer of the IW Bank operations to UBI Sistemi e
Servizi took place, concluding with the trade union agreement on the 6 th of November. The
transfer, consistent with the Group service model which involves assigning support and
service activities to UBI.S for all companies in the consortium group, will allow IW Bank to
better focus on its own business activity.
This did not create any job losses at IW Bank and did not have any significant impact on the
staff involved, except to a limited degree in terms of geographical mobility.
In December the Trade Unions were sent the legislative information regarding UBI Banca’s sale
of the controlling share packet in UBI Insurance Broker to Marine & Aviation JTL Spa.
This operation did not have any impact on the working conditions of UBI staff transferred to
the company.
Finally negotiations were commenced on 28 th February 2013 in relation to the merger of
Centrobanca into the Parent.
Training
UBI Academy, the corporate university of the UBI Group, was established on the 2 nd of July 2012. It was
formed as a consortium between UBI Banca, the network banks, UBI.S and the main product companies, to
study, plan, advise and provide training and professional managerial development programmes for staff
employed in the Companies of the UBI Banca Group.
Therefore, from the second half onwards, all activities relating to planning and management of professional
training programmes of the Group were carried out by UBI Academy.
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The key elements of its mission are:
- the clear link between the training courses and overall company strategy in terms of the company's
culture of quality and customer-focus, with the consequent support and involvement extending to all the
main players on the corporate management team;
- forward-thinking and innovation;
- the creation of partnerships with national and international institutes of learning (universities, business
schools, consultancy businesses, research centres) adding value to the In-house School of Teachers;
- the use of training practices that complement classroom-based programmes in terms of offering
innovative distant learning and experience-based training channels;
- a focus on adding value to local communities, fostering social promotional initiatives in addition to
promoting cultural events and activities, research and third-level training.
Based on the key strategies of the Parent, UBI Academy proposes the launch of training and professional
development initiatives based on the virtuous balance of three fundamental elements: "Knowledge"
(continued growth of overall knowledge, information, etc., specialisms), "Know-how" (development of skills
for the practical implementation of the acquired Knowledge) and "Will do" (fostering and developing
exemplary behavioural models leading to efficient delivery of services)
Training activities by subject areas in 2012
Subject area
Classroom
Remote
training
Internship
Total
person/days
of training
Insurance 14,353 14,280 - 28,633 28.8% 29,716 28.7%
Commercial 14,861 - 489 15,350 15.4% 9,409 9.1%
Finance 5,172 18 157 5,347 5.4% 4,836 4.7%
Credit 5,277 956 1,111 7,344 7.4% 11,380 11.0%
Managerial-Behavioural 9,531 2,903 - 12,434 12.5% 9,732 9.4%
Regulatory 3,991 16,091 - 20,082 20.2% 26,891 26.0%
Operational and other subjects 1,613 1,304 7,351 10,268 10.3% 11,476 11.1%
TOTAL 54,798 35,552 9,108 99,458 100.0% 103,440 100.0%
%
2011
Total %
person/days
Over 100 thousand days (between classroom training, distance learning and development
programmes) with an average of 5.4 training days per employee (5.6 in 2011, 5.2 in 2010),
were allocated to training activities aimed at promoting, developing and adding value to the
technical and professional knowledge-bases as well as to the experience and managerial skillbases,
in addition to the ethical and cultural behaviours within the Group.
The main initiatives implemented in 2012 were as follows:
the extension of the "Value Programme" 2 to other strategic functions in the business; small
business managers, Corporate Account Managers and private bankers;
training programmes to support the launch of the Branch service model "Mass Market
Team", for employees and referred clients;
the training project aimed at honing the skills for new programme developer roles, a focus
point of the new service model for the branch network;
initiatives relating to "Optimising the anti-Money-Laundering Model" to improve employee
knowledge when dealing with customers on anti-money-laundering legislation;
strengthening and educating employees in areas relating to "pricing excellence" and
"customer satisfaction";
strengthening the financial capabilities of the branch network by focusing on financial
markets and asset allocation analyses.
Almost one third of the whole training activity focused on the technical-professional
competencies (commercial, credit and finance operations) of branch staff.
Insurance topics continued to represent a significant proportion of the training programmes
allocated for the year (29%), with programmes differentiated per market and per client
2 These training programmes, already positively implemented with Bank Managers, over the two years from 2010-2011 involve
assessment workshops to identify exemplary behavioural models and the concrete actions required to improve on-going
performances and client relationships.
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segment (private, company) focusing specifically on training and up-skilling employees
involved in insurance brokering activities in accordance with the ISVAP 5/2006 Regulation.
Updates on legislation (20% of the total training) is, as in the past, focused on areas relevant
to banking operations, such as "Transparency", "Enforcing health, and safety in the
workplace" and "anti-money-laundering" as previously mentioned.
The managerial training programme targeting roles of responsibility, not only focused on the
professional development of the whole organisation and managerial spectrum, but specifically
concentrated on employee management and motivation in order to foster a greater sense of
team spirit. Staff were also given access to a programme which allowed them the opportunity
to meet with leading managers, businessmen, academics, and university luminaries to
improve their knowledge in the areas of economics, politics, and sociology.
In a period of enormous shake-ups and changes in the competitive landscapes, it is important
for Management to become involved in these programmes, to ensure they are up to date with
changes in the real world, as well as offering them opportunities to reflect and take stock. This
is a strategic resource for the UBI Banca Group.
With regard to initiatives involving young talent within the Group, forty-five young employees
enrolled in the level II two-year University Masters programme in "Management of banking
companies,” developed in partnership with the Polytechnic Institute of Milan School of
Business.
The entire in-house training team, made up of over 400 employees spent a total of almost 30
thousand days on training (almost 54% of the total training was delivered in the classroom).
The preparation and the up-skilling programmes were structured in the form of training
courses aimed at developing and refining teaching techniques, classroom management, and
the skills of imparting best-practice behavioural models. The trainer's role is not simply one of
transferring knowledge, but the sharing of experiences, positive examples and exemplary
behaviours, so that a shared language, company culture, and values can become embedded
throughout the whole region coupled with a sense of belonging to the Group.
***
The 2013 programme based on the "lifelong learning" model (i.e. continuous learning) is
expected to involve a total investment of 90,000 training days, mainly delivered in classroombased
settings and supported by distance learning and "on the job" training programmes.
Amongst the initiatives planned for the current business are:
the "Quality in the Bank" project, which envisages a programme of initiatives aimed at creating a
greater sense of appreciation throughout the "sales network" of the importance of the quality of the
service offered;
the strengthening of performance, maximising and re-launching of Affluent Managers (Value
programme). This operation is aimed at endorsing exemplary commercial behaviours and at
strengthening the distinctive competencies and performances of Affluent Managers within the
commercial and financial areas;
the strengthening of "excellent competencies" in the new UBI Private and Corporate Unity, with high
level training courses focused on the competencies of Managers and Wealth Bankers;
consolidating the training programme aimed at supporting the Mass Market team and dedicated to
employees and customer service employees, focused on refining the new service model and the
commercial behaviours expected;
consolidating the training programme for new business development employees, in terms of
competency training and competency up-skilling;
continuation of the training programme on the new credit monitoring tools, to support the
rationalisation of loan performance monitoring processes, launched at the end of 2012;
activities undertaken to outline the 2013 commercial objectives, concentrating on prioritising certain
segments and aimed at educating the Branch Managers on performance management of their own
staff;
developing the Branch Managers and the Managers of the new Private and Corporate units knowledge
of compliance procedures within the Group in relation to operational risks and controls, in addition to
MiFID legislation and Financial planning and consultancy to reinforce exemplary behavioural models
73

elating to controls, and linking these to the management and to the development of the commercial
activities;
maximising the Group's talents through the pursuit of the aforementioned level II University Masters
in "Management of banking companies" and the launch of further initiatives in partnership with other
Universities in the region;
Other specific initiatives in the area of Diversity Management, aimed particularly at
maximising the value of the over 55 groups, on which the Group has focused particular
attention in light of changes relating to pension legislation, to facilitate reintegration
operationally and within the context of staff on long term absences.
The development of the management culture will continue through a renewed workshop
programme organised with leaders from the world of business and academia as well as the
development of knowledge in the field of management and great company strategies offered by
qualified centres of excellence (Business schools, Universities etc.)
A new initiative aimed at developing "entrepreneurial skills,” strategic goals and leadership
qualities will accompany the 2013 management training programme and the on-going
refresher courses.
With the purpose of involving and empowering staff to assume personal responsibility for
maintaining their skills up to date, as well as developing their own competencies, during the
course of 2013 a new e-Learning interface will be launched allowing each individual employee
to assess their own yearly learning goals, specific to each role and to monitor their own
achievement of these goals.
Internal Communications
The new "UBILife" Corporate Group Portal, which went online in the first half of 2012, has
moved on to become a consolidated space permanently accessed by Group employees, with a
total number of 100,000 page views per week.
During the year and after a trial period, the "Job Posting" tool became live in all the banks and
Group companies, advertising all vacant professional positions so that employees, potentially
interested in these roles, could apply automatically, thereby not only promoting internal
mobility but also broadening the candidate pool to cover the roles.
As had already occurred in the two previous years, an easy to consult electronic magazine was
created and inserted in the home page of UBILife in order to provide all Group employees with
prompt information on the UBI Banca Annual General Meeting held on 28 th April 2012. It
contained the main news on the subjects addressed in the meeting, a few photos of the day and
videos of interviews with the Chairmen of the Management and Supervisory Boards and with
the Chief Executive Officer of UBI Banca.
Internal Communication activity also involved the use of institutional videos (UBIClick) to
furnish updates on Group life and strategies.
Multimedia videos were also produced, not only to support daily operations (e.g. the new credit
transfer procedure introduced in February 2012), but also for reports on specific projects and
internal communication initiatives (e.g. the results of the first suggestions box on the
“simplicity programme” and on charitable initiatives undertaken by the Group in 2011).
Of significant importance and greatly used by the Group employees were the information
videos on the reorganisation (November 2012) and leaving incentive scheme and the
suspension/reduction of working hours (December).
In terms of publications, the first edition of the Almanacco YOUBI was printed in April, with
news of the main events involving the Group as a whole as well as individual banks and
companies occurring in 2011 and at the beginning of 2012. The publication was distributed
not only to all employees of the UBI Banca Group, but also to registered shareholders who
attended the UBI Banca Annual General Meeting.
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In addition the creation of the three monthly "We, UBI trainers”, for employees who took on
training roles within the organisation.
On the 19 th and 20 th of April two annual conventions were held in Vigevano of the Associations
of Retired Personnel of the former BPB-CV and the former BPCI, which saw the overall
participation of over 500 people and provided the opportunity to give updated information on
the consolidated business results for 2011.
In mid-December the solidarity Christmas lunch was organised for disadvantaged people and
families. This is a traditional event for those most in need and made possible thanks to the
commitment across all Group companies and banks. The event took place in every town and
city where the banks and companies have offices, with the involvement of the Bari Bitonto
Caritas Diocese (for the Bari offices) and the Exodus Foundation (for all the other offices). Over
150 employees volunteered to serve lunches to over one thousand guests, including numerous
children.
Finally, on 20 th December, at the New Bergamo Fair, a convention on the subject "
Opportunities in crises" brought together over 1,400 colleagues from all areas of the Group
structure.
In 2013 the range of internal communication tools and initiatives described above, was further
enhanced by several initiatives such as:
UBIPod, or the regular "radio transmissions" that can be heard on the UBILife, intranet
portal, including brief informative discussions on company topics;
the trial launch by the developers, of the first "professional community" space, a special
area of the UBILife portal, to share documents, activities and experiences, specific to groups
of professionals;
the development of UBILife consistent with the organisational transformation of the Group,
through the redefinition of the structure of some of the Portal pages, as well as the on-going
functional improvements to the tools that support work activities.
The working environment and staff welfare
The section “Principal risks and uncertainties to which the UBI Banca Group is exposed” may
be consulted for information on matters regulated by Legislative Decree No. 81 of 9 th April
2008 (health and safety at the workplace), while information on environmental responsibility is
given as part of the information on corporate social and environmental responsibility
contained in the section “other information”.
The main initiatives carried forward in the field of welfare are reported as part of the
information given on corporate social responsibility contained in the section “Other
information.”
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The scope of Consolidation
The companies included in the consolidation as at 31 st December 2012 are listed below,
divided into subsidiaries (fully consolidated), and associates (accounted for using the equity
method).
The percentage of control or ownership attributable to the Group (direct or indirect), their
headquarters (registered address or operating headquarters) and the share capital is also
indicated for each of them.
Fully consolidated companies (control is by the Parent of the Group where no other indication is
given):
1. Unione di Banche Italiane Scpa – UBI Banca (Parent)
registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €2,254,367,552.50 1
2. Banca Popolare di Bergamo Spa (100% controlled)
registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €1,350,514,252
3. Banco di Brescia San Paolo CAB Spa (100% controlled)
registered address: Brescia, Corso Martiri della Libertà, 13 – share capital: €615,632,230.88
4. Banca Popolare Commercio e Industria Spa (75.0769% controlled)
registered address: Milano, Via della Moscova, 33 – share capital: €934,150,467.60
5. Banca Regionale Europea Spa (74.7159% controlled) 2
registered address: Cuneo, Via Rome, 13 – share capital: €587,892,824.35
6. Banca Popolare di Ancona Spa (92.9711% controlled)
registered address: Jesi (Ancona), Via Don A. Battistoni, 4 – share capital: €147,301,670.32
7. Banca Carime Spa (92.8371% controlled)
registered address: Cosenza, Viale Crati snc – share capital: €1,468,208,505,92
8. Banca di Valle Camonica Spa (74.2439% controlled and BBS holds 8.7156%)
registered address: Breno (Brescia), Piazza Repubblica, 2 – share capital: €2,738,693
9. Banque de Dépôts et de Gestion Sa (100% controlled)
registered address: Avenue du Théâtre, 14 - Lausanne (Switzerland) – share capital: 10,000,000
Swiss francs
10. UBI Banca International Sa (91.1959% controlled and 5.4825% held by BBS, 3.1598% held by
BPB and 0.1618% by BRE)
registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €70,613,580
11. UBI Trustee Sa (100% controlled by UBI Banca International)
registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €250,000
12. UBI Capital Singapore Pte Ltd (100% controlled by UBI Banca International)
registered address: 47 Scotts Road # 06-01/02, Goldbell Towers, 228233 Singapore – share capital:
10,600,000 Singapore dollars
13. Prestitalia Spa (100% controlled)
registered address: Bergamo, Via A. Stoppani, 15 – share capital: €153,997,228
14. IW Bank Spa (75.3750% controlled and 23.4960% held by Centrobanca) 3
registered address: Milano, Via Cavriana, 20 – share capital: €18,404,795
15. UBI Banca Lombarda Private Investment Spa (100% controlled)
1 This is the share capital as at 5 th February 2013, modified following the exercise of conversion rights.
As at 31 st December 2012, the share capital amounted to €2,254,367,512.50, an increase of €615 compared to €2,254,366,897.50
as at 31 st December 2011, the result of a similar conversion which occurred on 4 th July 2012.
2 The percentage of control relates to the total share capital held.
3 In reality the Group fully controls this online bank, because the remaining shares, amounting to 1.1290% of the share capital, are
held in portfolio by IW Bank (and as treasury shares do not pay a dividend).
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egistered address: Brescia, Via Cefalonia, 74 – share capital: €67,950,000
16. Centrobanca Spa (94.3231% controlled and BPA a 5.4712% interest held)
registered address: Milano, Corso Europa, 16 – share capital: €369,600,000
17. Centrobanca Sviluppo Impresa SGR Spa (100% controlled by Centrobanca)
registered address: Milano, Corso Europa, 16 – share capital: €2,000,000
18. UBI Pramerica SGR Spa (65% controlled)
operating headquarters: Milano, Via Monte di Pietà, 5 – share capital: €19,955,465
19. UBI Management Company Sa (100% controlled by UBI Pramerica SGR)
registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €125,000
20. UBI Insurance Broker Srl (100% controlled) 4
registered address: Bergamo, Via f.lli Calvi, 15 – share capital: €3,760,000
21. UBI Leasing Spa (98.9927% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €241,557,810 5
22. Unione di Banche Italiane per il Factoring Spa - UBI Factor Spa (100% controlled)
registered address: Milan, Via f.lli Gabba, 1 – share capital: €36,115,820
23. BPB Immobiliare Srl (100% controlled)
registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €185,680,000
24. Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa (100% controlled)
registered address: Brescia, Via A. Moro, 13 – share capital: €35,000,000
25. Società Lombarda Immobiliare Srl - SOLIMM (100% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €100,000
26. BPB Funding Llc (100% controlled)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000,000
27. BPB Capital Trust (100% controlled by BPB Funding Llc)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000
28. Banca Lombarda Preferred Capital Company Llc (100% controlled)
registered address: 1209, Orange Street the Corp. Trust Center, Wilmington, New Castle County,
Delaware, USA – share capital: €1,000
29. Banca Lombarda Preferred Securities Trust (100% controlled)
registered address: 1209, Orange Street the Corp. Trust Center, Wilmington, New Castle County,
Delaware, USA – share capital: €1,000
30. BPCI Funding Llc (100% controlled)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000,000
31. BPCI Capital Trust (100% controlled by BPCI Funding Llc)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000
32. UBI Fiduciaria Spa (100% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €1,898,000
33. UBI Gestioni Fiduciarie Sim Spa (100% controlled by UBI Fiduciaria)
registered address: Brescia, Via Cefalonia, 74 – share capital: €1,040,000
34. Coralis Rent Srl (100% controlled)
registered address: Milano, Via f.lli Gabba, 1 – share capital: €400,000
35. UBI Sistemi e Servizi SCpA 6 – Consortium Stock Company (70.3592% controlled and 4.3154%
held by BRE; 2.8769% held by: BPB, BBS, BPCI, BPA and Banca Carime; 2.8757% held by IW
Bank; 1.4385% held by: Banca di Valle Camonica, UBI Banca Private Investment, UBI Pramerica
4 The company was sold on 21 st December 2012 and was consolidated at year-end for income statement items only.
5 Following the increase in the share capital subscribed by the Parent in January 2013, the share capital rose to €541,557,810.
6 The Group holds a 98.49% controlling interest in the share capital of UBI.S; 1.44% is held by UBI Assicurazioni and the remaining
0.07% by UBI Insurance Broker.
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SGR and Centrobanca; 0.7192% held by UBI Factor; 0.0719% held by Prestitalia; and 0.0097% held
by UBI Academy)
registered address: Brescia, Via Cefalonia, 62 – share capital: €36,149,948.64
36. UBI Academy SCRL – Limited Consortium Company (68.5% controlled and 3% held by: BPB,
BBS, BPCI, BPA, Banca Carime, BRE and UBI.S; 1.5% held by: Banca di Valle Camonica, IW Bank,
UBI Banca Private Investment, UBI Pramerica SGR, UBI Leasing, UBI Factor and Prestitalia)
registered address: Bergamo, Via f.lli Calvi, 9 – share capital: €100,000
37. UBI Finance Srl 7 (60% controlled)
registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
38. UBI Finance CB 2 Srl 8 (60% controlled)
registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
39. Albenza 3 Srl 9
40. Orio Finance Nr. 3 Plc 9
41. 24-7 Finance Srl 10
42. Lombarda Lease Finance 4 Srl 11
43. UBI Finance 2 Srl 12
44. UBI Finance 3 Srl 13
45. UBI Lease Finance 5 Srl 14
46. UBI SPV BBS 2012 Srl 15
47. UBI SPV BPCI 2012 Srl 15
48. UBI SPV BPA 2012 Srl 15
Companies consolidated for using the equity method (the investment is by the Parent where no
other indication is given):
1. Aviva Vita Spa (50% interest held) 16
registered address: Milan, Via Scarsellini, 14 – share capital: €155,000,000
2. Aviva Assicurazioni Vita Spa (formerly UBI Assicurazioni Vita Spa) 16 (49.9999% interest held)
registered address: Milan, Via Scarsellini, 14 – share capital: €49,721,776
3. Lombarda Vita Spa (40% interest held)
registered address: Brescia, Corso Martiri della Libertà, 13 – share capital: €185,300,000
4. UBI Assicurazioni Spa (49,9999% interest held)
registered address: Milano, via Tolmezzo, 15 – share capital: €32,812,000
7 A special purpose entity in accordance with Law No. 130/1999, this company, enrolled on the general list of intermediaries
pursuant to Art. 106 of the consolidated banking act, was formed on 18 th March 2008 to allow UBI Banca to implement a
programme to issue covered bonds on residential mortgages.
8 A special purpose entity in accordance with Law No. 130/1999, this company, enrolled on the general list of intermediaries
pursuant to Art. 106 of the consolidated banking act, was formed on 20 th December 2011 to allow the UBI Banca to implement a
second programme to issue covered bonds on commercial non residential mortgages.
9 Special purpose entities formed in compliance with Law No. 130/1999 for the securitisations performed in 2001 and 2002 by the
former BPB-CV Scrl (Albenza 3 Srl) and by BPU International Finance Plc Ireland – subsequently closed down – (Orio Finance Nr. 3
Plc). They were consolidated because they are in reality controlled, since their assets and liabilities were originated by Group
member companies. The consolidation only concerns those assets subject to securitisation and the relative liabilities issued.
10 A special purpose entity used in compliance with Law No. 130/1999 for the B@nca 24-7 securitisations performed in 2008. It was
consolidated because this company is in reality controlled, since its assets and liabilities were originated by a Group member
company. UBI Banca holds a 10% stake.
11 A special purpose entity formed in accordance with Law No. 130/1999 when a securitisation was performed in 2005 by SBS
Leasing. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by a
Group member company. UBI Banca holds a 10% stake.
12 A special purpose entity used in accordance with Law No. 130/1999 for the securitisation of a portfolio of performing loans
performed by Banco di Brescia at the beginning of 2009. It was consolidated because this company is in reality controlled, since its
assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake.
13 A special purpose entity used in accordance with Law No. 130/1999 for the securitisation of a portfolio of performing loans
performed by Banca Popolare di Bergamo at the end of 2010. It was consolidated because this company is in reality controlled,
since its assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake.
14 A special purpose entity formed in accordance with Law No. 130/1999 for the securitisation of performing loans by UBI Leasing in
November 2008. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by
a Group member company. UBI Banca holds a 10% stake.
15 A special purpose entity formed in accordance with Law No. 130/1999 for the securitisation of the performing loans to SMEs of
some network banks (Banco di Brescia, Banca Popolare Commercio e Industria and Banca Popolare di Ancona). They were
consolidated because they are in reality controlled, since their assets and liabilities were originated by Group member companies.
UBI Banca holds a 10% stake in each of them.
16 The companies in the Aviva Group transferred their registered offices and operating headquarters with effect from 1 st November
2012.
78

5. Polis Fondi SGRpA (19.6% interest held)
registered address: Milano, Via Solferino, 7 – share capital: €5,200,000
6. Lombarda China Fund Management Company 17 (49% interest held)
registered address: 8F, No.66, BEA Finance Tower, Huayuanshiqiao Road, Pudong New Area,
Shanghai (China) – share capital: 120,000,000 yuan/renminbi
7. SF Consulting Srl (35% interest held)
operating headquarters: Mantova, Via P.F. Calvi, 40 – share capital: €93,600
8. Sofipo Sa (30% interest held by Banque de Dépôts et de Gestion)
registered address: Via Balestra, 12 - Lugano (Switzerland) – share capital: 2,000,000 Swiss francs
9. SPF Studio Progetti Finanziari Srl (25% interest held by BPA)
registered address: Roma, Via National, 243 – share capital: €92,960
10. Prisma Srl (20% interest held)
registered address: Milano, Via S. Tecla, 5 – share capital: €120,000
11. Siderfactor Spa – in liquidation (27% interest held by UBI Factor) 18
registered address: Milano, Via f.lli Gabba, 1/A – share capital: €1,200,000
12. Capital Money Spa (20.6711% interest held)
registered address: Milano, Via Lausanne, 16 – share capital: €2,042,955
13. BY YOU Spa – in liquidation (former Rete Mutui Italia Spa, 10% interest held) 19
registered address: Milan, Viale Vittorio Veneto, 2/A – share capital: €650,000
14. UFI Servizi Srl (23,1667% interest held by Prestitalia)
registered address: Roma, Via G. Severano, 24 – share capital: €150,000
Changes in the consolidation scope
No changes were made to the scope of the consolidation compared to 31 st December 2011,
except for those reported below. Details of the changes are grouped on the one hand into
action taken to rationalise the ownership structure of the Group (consistent with that which
has already been reported in the section “Significant events that occurred during the year”)
and changes which involved shareholdings in banks and other companies.
The following action already announced to rationalise Group structure and activities was
completed in 2012:
• the creation of a single banking operation in the North West
The merger of Banco di San Giorgio into Banca Regionale Europea (decided by the Boards of
Directors of the two banks on 21 st December 2011):
- on 27 th March 2012, the Management Board of UBI Banca and, on 2 nd and 3 rd April
2012, the Boards of BRE and BSG approved the modifications to the parameters for the
merger to take account of the results of impairment tests conducted at the end of 2011.
Those modifications resulted in a new exchange ratio of 2.33 ordinary shares of BRE for
each ordinary share of BSG;
- on 16 th May 2012 the Bank of Italy (with a subsequent addition on 25th May) issued its
authorisation, in accordance with Art. 57 of Legislative Decree No. 385/1993 (the
consolidated banking act), for this business combination transaction, while on 30 th May
2012 the merger plan was filed with and entered into the Register of Companies;
- on 23 rd August, BRE acquired all the shares held by UBI Banca in BSG at a price per
share of €4.344 (as a preliminary step to the merger): 26,001,474 shares (38.1927% of
the share capital) therefore changed hands for €112.9 million;
17 The company will change its name to Zhong Ou Fund Management Co.
18 The company was removed from the Company Register on 3 rd January 2013 following the completion of the liquidation procedures,
for which the accounting allocation took place on 21 st December 2012.
19 The company is consolidated because UBI Banca holds 20% of the voting rights and a pledge on a further 10% of the share capital.
79

- on 17 th September, the resolution of an Extraordinary Shareholders' Meeting of Banco di
San Giorgio (held on 7 th September) which approved the bank’s merger into BRE was
filed with the Company Registrar of Genoa.
- in the period from 17 th September to 2 nd October 2012, a put option, and that is the right
to have one’s shares purchased, was exercised on the basis of valuable consideration
calculated using the same criteria as those used for withdrawal from the company
(article 2437-ter of the Italian Civil Code) and set at €4.40 for each share sold. The put
option, granted by the surviving company in accordance with Art. 2505-bis of the Italian
Civil Code, resulted in the purchase of 1,748,855 shares, with a payout of approximately
€7.7 million, which brought control of BSG by BRE up to 98.2616%. Shareholders who
did not exercise their put option were allotted 2,757,522 newly issued ordinary shares
(inclusive of actual rounded fractions) of the surviving company, on the basis of an
exchange ratio of 2.33 ordinary new BRE shares with a nominal value of €0.65 per
share for each share of BSG held, with a nominal value of €1.50 per share, there being
no provision for cash settlements;
- on 22 nd October 2012 the merger of Banco di San Giorgio into Banca Regionale Europea
became effective, while for accounting and tax purposes the transaction took effect from
1 st January 2012. As a result of the merger, BRE acquired the stakes previously held by
BSG in UBI Banca International (0,1618% of the share capital) and in UBI Sistemi e
Servizi (1,4799%) in its investment portfolio;
- Banco di San Giorgio has no longer been included in the consolidation since 31 st
December 2012.
Banca Regionale Europea Spa: as a result of the above, the share capital of BRE rose by
€1,136,755.75 to €587,892,824.35 (€468,880,348.04 at the end of 2011, with account
taken of the increase in the share capital carried out free of charge described later in this
report), while at the end of the year, the total stake held by UBI Banca stood at 74.7159%
(74.9437% twelve months before) and in particular at 79.8256% of the ordinary shares, at
26.4147% of the privileged shares and 59.1400% of the savings shares.
During the course of the year, private individual shareholders sold 6,012 savings shares to
UBI Banca, which increased its percentage stake from 59.1270% as at 31 st December 2011
to 59.1400% at the end of the year.
• rationalisation of the consumer credit sector
The merger of B@nca 24-7 into the Parent (approved by the Board of Directors of the merged
bank on 26 th March 2012 and by the Supervisory Board on 28 th March 2012) and the
specialisation of Prestitalia in salary backed loans.
Prestitalia Spa:
- on 23 rd May 2012 an extraordinary shareholders’ meeting approved the following:
the replenishment of losses recognised in the balance sheet as at 31 st March 2012,
amounting to approximately €7 million. While not subject to the provisions of Art.
2446, paragraph one of the Italian Civil Code (reduction of the share capital for losses)
it was nevertheless considered advisable before increasing the share capital to first
reduce it from €46,385,482 to €39,359,617, by cancelling 8,085 shares (nominal
amount of €869 per share);
an increase in the capital by a total of €145 million in order to equip the company
with adequate regulatory capital to support its acquisition of B@nca 24-7’s “salary
and pension-backed loans and deduction authorisation” (hereinafter “salary-backed”)
operations. Consequently, 90,625 shares were issued with a nominal value of €869
each, offered with option rights to B@nca 24-7, the sole shareholder, at a price of
€1,600 per share, which brought the share capital up from €39,359,617 to
€118,112,742 (equivalent to 135,918 shares). The total increase in the capital
(€145,000,000) therefore consisted of €78,753,125 allocated to the share capital and
€66,246,875 recognised within the share premium reserve;
- on 25 th June 2012 an Extraordinary Shareholders’ Meeting passed the following
resolutions:
a further increase in the share capital of €35,884,486, to bring that capital up from
€118,112,742 to €153,997,228, through the issue of 41,294 new ordinary shares for
a nominal amount of €869 each, to be offered with option rights to B@nca 24-7, the
80

sole shareholder and to be paid for in kind by the contribution of its salary-backed
loan operations;
the transfer for operational and organisational purposes of the registered address
from 131/L via Ostiense, Rome, to 15 via Stoppani, Bergamo.
B@nca 24-7 Spa:
- on 25 th June 2012 (with effect, for legal, accounting and tax purposes from 1 st July
2012), in full subscription of and payment for the shares issued, B@nca 24-7
contributed to Prestitalia its salary-backed operations, consisting of all the assets,
liabilities and contractual relationships relating to the aforementioned operations,
concerning the processing, approval, completion and after sales management of the
salary-backed loans contributed, on the basis of the value estimated using the dividend
discount model performed by an independent appraiser. In detail, the balance sheet as
at 31 st March 2012 recorded total assets of €3.2 billion, of which €3.060 billion
consisting of loans and advances to customers.
In return for the contribution, B@nca 24-7 was assigned 41,294 new shares with a
nominal value of €869 each in the recipient of the contribution, fully paid-up, with a
total nominal value of €35,884,486;
- on 5 th July 2012, the deed of merger of B@nca 24-7 into UBI Banca was signed, in
implementation of resolutions approved by the respective Boards and in compliance with
the legal authorisations obtained. As B@nca 24-7 was wholly owned, the merger fell
within the scope of application of the simplified procedure pursuant to Art. 2505 of the
Italian Civil Code;
- on 23 rd July 2012, the merger of B@nca 24-7 into UBI Banca took effect legally, while for
accounting and tax purposes it was effective from 1 st January2012.
As a result of the transaction, the Parent acquired in its portfolio the stakes previously
held by the merged bank in Prestitalia (100% of the share capital) and in UBI Sistemi e
Servizi (1.4799%);
- this consumer credit bank has not been included in the consolidation since 30 th
September 2012.
SILF Spa:
- on 17 th October 2012, the Bank of Italy authorised the merger of Società Italiana Leasing
e Finanziamento Spa (SILF) into UBI Banca which held full control of it;
- on 23 rd November an extraordinary shareholders’ meeting of SILF and the Supervisory
Board of the Parent approved the business combination transaction, to be carried out by
means of the simplified procedure pursuant to Art. 2505 of the Italian Civil Code;
- on 21 st December 2012 the merger of SILF into UBI Banca became effective (with effect for
accounting and tax purposes from 1 st January 2012).
As a result, the Parent acquired the stake previously held by the merged company in UBI
Sistemi e Servizi (0.074%) in its equity portfolio;
- the company has not been included in the consolidation since 31 st December 2012.
Barberini Sa – in liquidation:
- on 30 th March 2012, a Shareholders' Meeting of this Belgian registered company (100%
controlled) passed a resolution to close it down in advance and to put it into liquidation
(deed filed on the 24 th April with the Brussels Court of Commerce). The sole purpose of
Barberini (both in Belgium and abroad) was the management of the equity investment in
Prestitalia Spa, sold in January 2011 to B@nca 24-7. Since it held no other investments
in portfolio, the governing bodies passed a resolution to wind it up and prepared
liquidation financial statements as at and for the period ended 31 st January 2012. The
company was removed from the Company Register on 25 th October 2012, with the
preparation by the receiver appointed of a document entitled “Décisions Ecrites de
l’Actionnaire Unique”, which completed the liquidation procedures for the company, on
the basis of the Belgian commercial and company law applicable;
- the company has not been included in the consolidation since 31 st December 2012.
• optimisation of foreign subsidiary activities
UBI Banca International acquires UBI Capital Singapore Pte (formerly BDG Singapore Pte).
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On 30 th May 2012, the acquisition of the former BDG Singapore Pte by the Luxembourg
bank was completed for consideration of 170,000 Singapore dollars, calculated on the basis
of an expert appraisal. In detail:
- UBI Banca International Sa: on 2 nd April 2012, an increase in the share capital of
€11,542,830 was performed raising it from €59,070,750 (December 2011) to
€70,613,580. This operation, which saw the issue of a total of 22,633 new shares with a
nominal value of €510 each, was achieved partly as a no cost issue, by freeing up
available reserves (€7,090,530 equivalent to 13,903 new shares, allotted on a pro-rata
basis to all shareholders) and partly through an issue against cash payment fully
subscribed by UBI Banca, the majority shareholder (for €7,909,380, of which a share
premium of €3,457,080, with the issue of 8,730 new shares – nominal value of €510 per
share and a share premium of €396). Strengthening the capital not only allowed the
bank to maintain a solvency ratio above the minimum level recommended by the
Luxembourg Supervisory Authority (9%), but it was also designed to support the
acquisition of the entire investment in the former BDG Singapore Pte.
Following that ownership transaction, at the end of the year the percentage interests
held by the investors involved had changed as follows: UBI Banca controlled UBI Banca
International with a 91.1959% interest (90.6031% in December 2011), while BBS held
5.4825% (5.8519% at the end of year), BPB held 3.1598% (down from 3.3723% before)
and BRE held 0.1618% (down from 0.1727%);
- UBI Capital Singapore Pte Ltd: on 30 th May 2012, UBI Banca International acquired the
entire interest held (100%) in BDG Singapore Pte Ltd from Banque de Dépôts et de
Gestion 20 .
On 5 th June 2012, following approval by shareholders, the company changed its name
from BDG Singapore Pte Ltd to UBI Capital Singapore Pte Ltd. As authorised by
shareholders in the same meeting, the Directors then approved an increase in the share
capital, fully subscribed by the sole shareholder UBI Banca International, amounting to
five million Singapore dollars, bringing it up from 5,600,000 SGD in December 2011 to
10,600,000 SGD at the end of the year.
• contribution of IW Bank operations to UBI Sistemi e Servizi
On 30 th November 2012 the contribution of IW Bank operations took effect. It was approved
on 8 th October 2012 by the Board of IW Bank and on 11 th October 2012 by the Board of the
service company.
UBI Sistemi e Servizi SCpA:
- on 26 th November 2012, an extraordinary shareholders’ meeting took account of the
valuation of the operations (pursuant to Art. 2343 of the Italian Civil Code) performed by
an independent expert and approved an increase in the share capital of €1,013,548.64.
The share capital was therefore raised from €35,136,400 (December 2011) to
€36,149,948.64 (consisting of 69,519,132 shares), by the issue of 1,949,132 ordinary
shares with a nominal value of €0.52 each and a premium per share of €0.24, at the
service of the contribution made by IW Bank of its operations termed “ICT and
Organisation”;
IW Bank Spa:
- on 26 th November, the contribution agreement was signed which involved the
assignment to IW Bank of new shares (1,949,132) issued by UBI.S, with full recognition
of the value of the operations contributed within the equity of the company in receipt of
them (share capital and reserves not distributed). On completion of the transactions just
reported, the stake held by the internet bank in the service company had risen from
0.074% in December 2011 to 2.8757% at the end of 2012.
• share capital increases: use of valuation reserves
Free of charge capital increases were performed in June 2012, using reserves that had been
formed following property revaluations pursuant to prior year special laws:
20 With regard to Banque de Dépôts et de Gestion, a letter of 21 st December 2012 from the Federal Supervisory Authority for
Financial Markets officialised the return of this Swiss bank to ordinary supervision after the implementation of corrective action in
response to recommendations made by that authority in the first half of 2012.
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• Banca Popolare di Ancona Spa: on 26 th June 2012, an extraordinary shareholders’
meeting approved an increase in the share capital free of charge by making use of
revaluation reserves amounting to €24,958,090.32. The operation – which did not
involve the issue of new shares, but the increase from €5 to €6.02 of the nominal value
of each of the 24,468,716 outstanding shares – increased the share capital of this
Marches bank to €147,301,670.32 (€122,343,580 as at 31 st December 2011);
• Banca Regionale Europea Spa: on 27 th June 2012, an extraordinary shareholders’
meeting approved an increase in the share capital at no cost by making use of
revaluation reserves amounting to €117,220,087.01. The operation – which did not
involve the issue of new shares, but the increase from €0.52 to €0.65 of the nominal
value of each of the 901,692,977 outstanding shares – increased the share capital of this
Piedmont bank to €586,100,435.05 (468,880,348.04 as at 31 st December 2011).
• increase in securitised assets eligible for refinancing with the ECB
UBI SPV BBS 2012 Srl – UBI SPV BPCI 2012 Srl – UBI SPV BPA 2012 Srl: on 19 th April
2012 three new special purpose vehicles were formed for the respective network banks. The
companies each have share capital of €10,000 and the Parent holds a 10% stake in each of
them, while the remaining 90% of each is held by three different Dutch registered
foundations (stichting).
The following changes in the percentages of shares held in Group banks occurred during the
year:
• Centrobanca Spa: in the first months of 2012, UBI Banca continued to purchase shares
held by non-controlling shareholders (mainly banks), acquiring 173,608 shares for a total of
approximately €300 thousand;
UBI Banca’s investment therefore rose from 94.2715% as at 31 st December 2011 to
94.3231% at the end of 2012, while Group control increased over the same period from
99.7427% to 99.7943%;
• Banca Popolare di Ancona Spa: UBI Banca made further purchases from non-controlling
shareholders for a total of 9,071 shares, which brought its controlling interest up from
92.9340% at the end of 2011 to 92.9711% as at 31 st December 2012;
• Banca Carime Spa: over the twelve month period the Parent acquired 54,194 shares from
non-controlling shareholders, bringing its control of the subsidiary up to 92.8371%
(92.8332% at the end of 2011);
• IW Bank Spa: on 3 rd April 2012 Centrobanca and Webstar Sa terminated the contracts they
signed in 2009 and gave instructions, also in the interest of UBI Banca, to complete the
transfer of ownership of the investment in IW Bank held by Webstar. The Parent therefore
acquired 7,609,144 shares in the online bank from this Luxembourg counterparty,
corresponding to 10.3358% of the share capital of IW Bank, in return for a total payout of
€15.5 million. After that transaction, the investment held by the Parent increased from
65.0392% in December 2011 to 75.3750% at the end of the year (Centrobanca’s investment
was unchanged at 23.4960%).
At the end of the year the Group therefore held 98.8710% control of IW Bank (up from
88.5352% in the previous December). It must also be considered that the percentages
reported do not include the treasury shares held by IW Bank (831,168 shares accounting
for 1.1290% of the total). If these are included, control of the share capital is total.
We report the following with regard to other companies:
• Arca SGR Spa: on 14 th March 2012 the UBI Banca Group disclosed that it had informed
this company of its desire to withdraw from the share capital of that company, with respect
to all the shares held. The right of withdrawal arose, in accordance with Art 2347 of the
Italian Civil Code, because the Group did not vote in favour of the resolution passed by an
Extraordinary Shareholders’ Meeting which, on 20 th February 2012 (filed with the Company
Registrar of Milan on 5 th March 2012), had made amendments to the Articles of
Association.
83

On 3 rd September 2012, the procedures resulting from the exercise of that right were
completed. The withdrawal involved 13,354,000 shares (11,562,000 held by UBI Banca and
1,792,000 by Banca Popolare di Ancona), corresponding to 26.708% of the share capital,
valued at an average of €2.09 per share. Following the exercise of that right, the Group had
the right to cash payment for the shares held, at a price of €2.70 per share, for total
consideration of approximately €36 million, as determined according to the law by the
Board of Directors of Arca SGR. The investment was recognised within assets held for sale
from 31 st March 2012, while on 30 th September 2012 it ceased to appear in the list of equity
accounted investees and the accounts only recorded movements in the income statement,
quantified as a gain (net of taxes and non-controlling interests) of €7.6 million;
• UBI Finance CB 2 Srl: on 20 th March 2012, following the issue of the authorisation from the
Supervisory Authority for acquisition of control of the Company, UBI Banca, which already
held 10% of the share capital, acquired a further 50% of UBI Finance CB 2. The company –
whose sole purpose is the issue of covered bonds in accordance with Art. 7-bis of Law No.
130 of 30 th April 1999 – was formed in December 2011 for the purpose of commencing a
second programme for the issuance of covered bonds backed by non-residential commercial
mortgages. The remaining part of the share capital (40%) is held by the Dutch registered
company Stichting Viola.
• UBI Academy SCRL: this consortium company was formed on 2 nd July 2012 for the
managerial training and development of staff who work in the UBI Banca Group (corporate
university). The share capital of UBI Academy, amounting to €100,000, had initially been
divided as follows: 70% to the Parent, 3% to the network banks (BPB, BBS, BPCI, BPA,
Carime, BRE) and to UBI.S and 1.5% to Banca di Valle Camonica, UBI Banca Private
Investment, IW Bank, UBI Leasing, UBI Factor and UBI Pramerica SGR.
On 19 th December 2012, the Parent transferred 1,500 shares to Prestitalia to allow it to
become a consortium member with a 1.5% stake. The percentage of the share capital
controlled by UBI Banca had therefore fallen at the end of year to 68.5%;
• InvestNet International Spa: on 17 th July the deed was signed for this company’s merger
into IW Bank and it was filed with the Company Registrar of Milan on 23 rd July 2012. The
merger became effective on 1 st August 2012, while it is effective for accounting and tax
purposes from 1 st January 2012. The company was therefore excluded from the
consolidation from 30 th September 2012.
• BY YOU Spa: on 13 th August the documents were filed with the Company Register to put
the company into voluntary liquidation, in view of the changed market context.
The Board of Liquidators is considering more appropriate measures to reach agreement on
a solution to the problems of this company, with account also taken of the new instruments
introduced to the Bankruptcy Act with Decree Law No. 83 of 22 nd June 2012, in a context of
greater satisfaction of creditor interests.
In this respect, in order to ensure better protection of the UBI Banca Group’s interests, in
relation, amongst other things, to the prior business relations with this company and with
its majority shareholders, negotiations were started with both the latter and with the Board
of Liquidators, designed to seek possible solutions to carry out the liquidation in a positive
manner;
• UBI Insurance Broker Srl: on 21 st December, this 100% controlled insurance brokerage was
sold to Marine & Aviation JLT Spa (75% controlled by Marine & Aviation and 25%
controlled by Jardine Lloyd Thompson) for over €19 million, of which approximately €5.8
million consisting of a gross consolidated gain and excluding the €3.2 million of dividends
received.
UBI Insurance Broker is still included in the consolidation (but for income statement items
only), because the Group continued to manage operations until the end of the year;
• UBI Leasing Spa: in order to streamline the organisational structure of the Group by
centralising, amongst other things, intragroup equity investments, on 21 st December UBI
Banca acquired the stake in UBI Leasing held by Banca Popolare di Ancona (7,647,921
shares accounting for 18.9965% of the share capital) for €29.9 million. The direct control
exercised over this leasing company by the Parent therefore rose from 79.9962% (December
2011) to 98.9927%.
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In order to provide a more adequate level of capitalisation, on 30 th November 2012 an
extraordinary shareholders’ meeting of UBI Leasing approved an increase in the share
capital up to a maximum limit of €400 million, inclusive of any share premium. On 2 nd
January 2013 the subscription of a tranche of a share capital increase was launched,
offered with option rights to shareholders, but fully subscribed by UBI Banca for €300
million, with the issue of 50,000,000 new shares with a nominal value of €6 and no share
premium. The new share capital of UBI Leasing therefore rose from €241,557,810 as at
31 st December 2012 to the current €541,557,810;
• UBI Sistemi e Servizi Scpa: various changes took place in the composition of the
shareholders, resulting mainly from the intragroup ownership transactions reported above:
- 23 rd July: UBI Banca acquired 1,000,000 shares following the merger of B@nca 24-7;
- 9 th October: the Parent sold 6,757 shares to UBI Academy, allowing the company to become a
member of the Consortium which delivers IT and other services to the Group;
- 22 nd October: BRE acquired 1,000,000 shares following the merger of BSG;
- 30 th November: increase of the share capital to €36,149,948.64 through the issue of 1,949,132
new shares, as valuable consideration to IW Bank for the contribution of its operations;
- 21 st December: UBI Banca acquired 50,000 shares following the merger of SILF;
- 21 st December: the Group sold its stake held in UBI Insurance Broker, but that company
nevertheless continued to maintain its interest in the service company (50,000 shares). As a
consequence of that transaction, Group control over UBI.S was 98.4896% (while the remaining
1.4385% is held by UBI Assicurazioni and 0.0719% is held by UBI Insurance Broker).
85

Reclassified consolidated financial
statements, reclassified income statement
net of the most significant non-recurring
items and reconciliation schedules
Reclassified consolidated balance sheet
Figures in thousands of euro
31.12.2012 31.12.2011 Changes
%
changes
ASSETS
10. Cash and cash equivalents 641,608 625,835 15,773 2.5%
20. Financial assets held for trading 4,023,934 2,872,417 1,151,517 40.1%
30. Financial assets designated at fair value 200,441 126,174 74,267 58.9%
40. Available-for-sale financial assets 14,000,609 8,039,709 5,960,900 74.1%
50. Held-to-maturity investments 3,158,013 - 3,158,013 -
60. Loans and advances to banks 6,072,346 6,184,000 -111,654 -1.8%
70. Loans and advances to customers 92,887,969 99,689,770 -6,801,801 -6.8%
80. Hedging derivatives 1,478,322 1,090,498 387,824 35.6%
90. Fair value change in hedged financial assets (+/-) 885,997 704,869 181,128 25.7%
100. Equity investments 442,491 352,983 89,508 25.4%
120. Property, plant and equipment 1,967,197 2,045,535 -78,338 -3.8%
130. Intangible assets 2,964,882 2,987,669 -22,787 -0.8%
of which: goodwill 2,536,574 2,538,668 -2,094 -0.1%
140. Tax assets 2,628,121 2,817,870 -189,749 -6.7%
150. Non-current assets and disposal groups held for sale 21,382 22,020 -638 -2.9%
160. Other assets 1,060,390 2,244,343 -1,183,953 -52.8%
Total assets 132,433,702 129,803,692 2,630,010 2.0%
LIABILITIES AND EQUITY
10. Due to banks 15,211,171 9,772,281 5,438,890 55.7%
20. Due to customers 53,758,407 54,431,291 -672,884 -1.2%
30. Debt securities issued 45,059,153 48,377,363 -3,318,210 -6.9%
40. Financial liabilities held for trading 1,773,874 1,063,673 710,201 66.8%
60. Hedging derivatives 2,234,988 1,739,685 495,303 28.5%
80. Tax liabilities 666,364 702,026 -35,662 -5.1%
90. Liabilities associated with assets held for sale - - - -
100. Other liabilities 2,391,283 3,139,616 -748,333 -23.8%
110. Post-employment benefits 420,704 394,025 26,679 6.8%
120. Provisions for risks and charges: 340,589 345,785 -5,196 -1.5%
140.+
170.+180.+
190.+ 200.
a) pension and similar obligations 80,563 76,460 4,103 5.4%
b) other provisions 260,026 269,325 -9,299 -3.5%
Share capital, share premiums, reserves, valuation reserves and treasury
shares 9,655,174 10,780,511 -1,125,337 -10.4%
210. Non-controlling interests 839,287 898,924 -59,637 -6.6%
220. Profit (loss) for the year 82,708 -1,841,488 1,924,196 n.s.
Total liabilities and equity 132,433,702 129,803,692 2,630,010 2.0%
86

Reclassified consolidated quarterly balance sheets
Figures in thousands of euro
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011 30.9.2011 30.6.2011 31.3.2011
ASSETS
10. Cash and cash equivalents 641,608 516,764 509,983 538,617 625,835 568,540 595,685 569,052
20. Financial assets held for trading 4,023,934 3,177,832 5,211,059 3,679,925 2,872,417 2,250,881 1,093,974 1,613,809
30. Financial assets designated at fair value 200,441 121,026 122,376 123,066 126,174 130,494 468,038 474,114
40. Available-for-sale financial assets 14,000,609 13,483,510 12,837,037 10,794,700 8,039,709 8,365,381 10,223,610 10,252,511
50. Held-to-maturity investments 3,158,013 3,220,200 3,192,239 3,254,437 - - - -
60. Loans and advances to banks 6,072,346 5,286,733 4,843,142 4,925,671 6,184,000 5,314,336 4,384,636 4,510,008
70. Loans and advances to customers 92,887,969 94,843,423 95,333,181 97,105,771 99,689,770 102,765,316 102,774,467 102,702,444
80. Hedging derivatives 1,478,322 1,541,973 1,340,946 1,087,609 1,090,498 995,341 413,389 351,398
90. Fair value change in hedged financial assets (+/-) 885,997 868,601 819,561 722,393 704,869 675,977 254,474 194,086
100. Equity investments 442,491 423,352 406,225 409,499 352,983 351,463 381,376 378,196
120. Property, plant and equipment 1,967,197 1,973,317 2,002,183 2,021,314 2,045,535 2,058,170 2,077,758 2,086,769
130. Intangible assets 2,964,882 2,962,430 2,971,246 2,979,781 2,987,669 5,268,352 5,287,195 5,452,328
of which: goodwill 2,536,574 2,538,668 2,538,668 2,538,668 2,538,668 4,286,210 4,286,210 4,416,659
140. Tax assets 2,628,121 2,525,656 2,631,652 2,641,166 2,817,870 2,604,967 2,312,956 1,704,774
150. Non-current assets and disposal groups held for sale 21,382 19,231 37,748 37,217 22,020 6,874 7,041 6,023
160. Other assets 1,060,390 1,138,807 1,350,560 1,189,953 2,244,343 2,272,277 2,476,298 2,442,098
Total assets 132,433,702 132,102,855 133,609,138 131,511,119 129,803,692 133,628,369 132,750,897 132,737,610
LIABILITIES AND EQUITY
10. Due to banks 15,211,171 14,765,300 14,708,333 15,143,195 9,772,281 8,611,714 4,966,574 7,332,517
20. Due to customers 53,758,407 56,356,021 57,074,877 52,358,466 54,431,291 56,392,736 56,199,737 56,144,592
30. Debt securities issued 45,059,153 43,907,855 45,171,850 47,084,745 48,377,363 47,502,685 49,964,140 48,678,875
40. Financial liabilities held for trading 1,773,874 1,479,098 1,274,898 934,366 1,063,673 654,949 844,259 1,040,163
60. Hedging derivatives 2,234,988 2,102,181 1,966,231 1,823,770 1,739,685 1,569,117 953,439 1,020,994
80. Tax liabilities 666,364 632,136 562,709 807,049 702,026 1,389,753 1,309,724 1,083,134
90. Liabilities associated with assets held for sale - - - - - 827 987 -
100. Other liabilities 2,391,283 1,608,626 1,991,859 2,094,393 3,139,616 4,554,208 4,778,011 4,606,189
110. Post-employment benefits 420,704 410,555 400,953 405,062 394,025 389,096 383,467 382,333
120. Provisions for risks and charges: 340,589 332,063 352,369 347,885 345,785 326,203 335,057 321,912
a) pension and similar obligations 80,563 76,601 77,680 75,453 76,460 65,806 67,022 67,317
b) other provisions 260,026 255,462 274,689 272,432 269,325 260,397 268,035 254,595
140.+170.
+180.+190.+ 200. Share capital, share premiums, reserves, valuation reserves and treasury shares 9,655,174 9,401,308 9,075,169 9,497,332 10,780,511 11,105,404 11,821,241 11,088,990
210. Non-controlling interests 839,287 884,960 870,347 909,478 898,924 949,008 942,551 973,302
220. Profit (loss) for the period/year 82,708 222,752 159,543 105,378 -1,841,488 182,669 251,710 64,609
Total liabilities and equity 132,433,702 132,102,855 133,609,138 131,511,119 129,803,692 133,628,369 132,750,897 132,737,610
87

Reclassified consolidated income statement
Figures in thousands of euro
2012 2011 Changes
%
changes
4th Quarter
2012
4th Quarter
2011
Changes
%
changes
A B A-B A/B C D C-D C/D
10.-20. Net interest income 1,863,561 2,018,978 (155,417) (7.7%) 417,494 520,280 (102,786) (19.8%)
of which: effects of the purchase price allocation (36,980) (49,931) (12,951) (25.9%) (8,966) (12,441) (3,475) (27.9%)
Net interest income excluding the effects of the PPA 1,900,541 2,068,909 (168,368) (8.1%) 426,460 532,721 (106,261) (19.9%)
70. Dividends and similar income 15,591 19,997 (4,406) (22.0%) 1,929 89 1,840 -
Profits (losses) of equity-accounted investees 44,426 9,947 34,479 346.6% 10,683 (3,171) 13,854 n.s.
40.-50. Net fee and commission income 1,182,276 1,193,708 (11,432) (1.0%) 310,677 315,142 (4,465) (1.4%)
of which performance fees 19,741 11,728 8,013 68.3% 19,741 11,728 8,013 68.3%
80.+90.+
100.+110. Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at fair value 257,278 7,329 249,949 - 109,016 23,999 85,017 354.3%
220. Other net operating income/expense 163,179 188,380 (25,201) (13.4%) 41,047 47,987 (6,940) (14.5%)
Operating income 3,526,311 3,438,339 87,972 2.6% 890,846 904,326 (13,480) (1.5%)
Operating income excluding the effects of the PPA 3,563,291 3,488,270 75,021 2.2% 899,812 916,767 (16,955) (1.8%)
180.a Staff costs (1,373,719) (1,423,196) (49,477) (3.5%) (336,348) (350,339) (13,991) (4.0%)
180.b Other administrative expenses (701,797) (717,988) (16,191) (2.3%) (188,130) (195,751) (7,621) (3.9%)
200.+210. Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets (191,144) (248,442) (57,298) (23.1%) (49,605) (66,574) (16,969) (25.5%)
of which: effects of the purchase price allocation (20,099) (69,823) (49,724) (71.2%) (5,015) (17,455) (12,440) (71.3%)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets
excluding the effects of the PPA (171,045) (178,619) (7,574) (4.2%) (44,590) (49,119) (4,529) (9.2%)
Operating expenses (2,266,660) (2,389,626) (122,966) (5.1%) (574,083) (612,664) (38,581) (6.3%)
Operating expenses excluding the effects of the PPA (2,246,561) (2,319,803) (73,242) (3.2%) (569,068) (595,209) (26,141) (4.4%)
Net operating income 1,259,651 1,048,713 210,938 20.1% 316,763 291,662 25,101 8.6%
Net operating income excluding the effects of the PPA 1,316,730 1,168,467 148,263 12.7% 330,744 321,558 9,186 2.9%
130.a Net impairment losses on loans (847,214) (607,078) 240,136 39.6% (352,535) (208,413) 144,122 69.2%
130. b+c+d Net impairment losses on other financial assets and liabilities (54,810) (135,143) (80,333) (59.4%) (4,078) 3,694 (7,772) n.s.
190. Net provisions for risks and charges (49,212) (31,595) 17,617 55.8% (28,367) (11,812) 16,555 140.2%
240.+270. Profits from the disposal of equity investments 14,714 7,119 7,595 106.7% 6,091 5,616 475 8.5%
Pre-tax profit (loss) from continuing operations 323,129 282,016 41,113 14.6% (62,126) 80,747 (142,873) n.s.
Pre-tax profit (loss) from continuing operations excluding the effects of the PPA 380,208 401,770 (21,562) (5.4%) (48,145) 110,643 (158,788) n.s.
290. Taxes on income for the period/year from continuing operations (121,238) 95,942 (217,180) n.s. 17,570 (48,585) 66,155 n.s.
of which: effects of the purchase price allocation 18,862 39,423 (20,561) (52.2%) 4,620 9,842 (5,222) (53.1%)
310. Post-tax profit from discontinued operations - 248 (248) (100.0%) - 226 (226) (100.0%)
330. Profit for the period/year attributable to non-controlling interests (17,310) (28,833) (11,523) (40.0%) (1,547) (9,477) 7,930 n.s.
of which: effects of the purchase price allocation 3,580 8,687 (5,107) (58.8%) 834 2,132 (1,298) (60.9%)
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving incentives and
net impairment losses on goodwill and finite useful life intangible assets excluding the effects of the PPA 219,218 421,017 (201,799) (47.9%) (37,576) 40,833 (78,409) n.s.
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving
incentives and net impairment losses on goodwill and finite useful life intangible assets 184,581 349,373 (164,792) (47.2%) (46,103) 22,911 (69,014) n.s.
210.+260. Impairment losses on goodwill and finite useful life intangible assets net of taxes and non-controlling interests - (2,190,861) (2,190,861) (100.0%) - (2,047,068) 2,047,068 (100.0%)
180.a Expenses for leaving incentives net of taxes and non-controlling interests (101,873) - 101,873 - (93,941) - 93,941 -
340. Profit (loss) for the year/period attributable to the shareholders of the Parent 82,708 (1,841,488) 1,924,196 n.s. (140,044) (2,024,157) (1,884,113) (93.1%)
Total impact of the purchase price allocation on the income statement (34,637) (71,644) (37,007) (51.7%) (8,527) (17,922) (9,395) (52.4%)
88

Reclassified consolidated quarterly income statements
Figures in thousands of euro
2012
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
2011
10.-20. Net interest income 417,494 466,438 486,311 493,318 520,280 509,868 488,646 500,184
of which: effects of the purchase price allocation (8,966) (9,341) (9,051) (9,622) (12,441) (11,636) (12,018) (13,836)
Net interest income excluding the effects of the PPA 426,460 475,779 495,362 502,940 532,721 521,504 500,664 514,020
70. Dividends and similar income 1,929 980 12,384 298 89 1,243 16,555 2,110
Profits (losses) of equity-accounted investees 10,683 7,984 14,924 10,835 (3,171) 3,496 4,953 4,669
40.-50. Net fee and commission income 310,677 285,544 286,672 299,383 315,142 291,989 294,641 291,936
of which performance fees 19,741 - - - 11,728 - - -
80.+90.+
100.+110.
Net income (loss) from trading, hedging and disposal/repurchase activities and from assets/liabilities
designated at fair value 109,016 42,898 11,397 93,967 23,999 (23,891) (7,391) 14,612
220. Other net operating income/expense 41,047 37,056 49,045 36,031 47,987 45,191 46,196 49,006
Operating income 890,846 840,900 860,733 933,832 904,326 827,896 843,600 862,517
Operating income excluding the effects of the PPA 899,812 850,241 869,784 943,454 916,767 839,532 855,618 876,353
180.a Staff costs (336,348) (348,572) (327,564) (361,235) (350,339) (334,913) (373,217) (364,727)
180.b Other administrative expenses (188,130) (161,445) (176,476) (175,746) (195,751) (165,947) (185,209) (171,081)
200.+210.
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible
assets (49,605) (45,770) (47,020) (48,749) (66,574) (60,365) (61,779) (59,724)
of which: effects of the purchase price allocation (5,015) (5,020) (5,003) (5,061) (17,455) (17,456) (17,456) (17,456)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible
assets excluding the effects of the PPA (44,590) (40,750) (42,017) (43,688) (49,119) (42,909) (44,323) (42,268)
Operating expenses (574,083) (555,787) (551,060) (585,730) (612,664) (561,225) (620,205) (595,532)
Operating expenses excluding the effects of the PPA (569,068) (550,767) (546,057) (580,669) (595,209) (543,769) (602,749) (578,076)
Net operating income 316,763 285,113 309,673 348,102 291,662 266,671 223,395 266,985
Net operating income excluding the effects of the PPA 330,744 299,474 323,727 362,785 321,558 295,763 252,869 298,277
130.a Net impairment losses on loans (352,535) (160,328) (203,181) (131,170) (208,413) (135,143) (158,148) (105,374)
130. b+c+d Net impairment losses on other financial assets and liabilities (4,078) (992) (47,663) (2,077) 3,694 (119,245) (17,959) (1,633)
190. Net provisions for risks and charges (28,367) 34 (16,764) (4,115) (11,812) (5,228) (4,136) (10,419)
240.+270. Profits from the disposal of equity investments 6,091 8,593 9 21 5,616 170 1,152 181
Pre-tax profit (loss) from continuing operations (62,126) 132,420 42,074 210,761 80,747 7,225 44,304 149,740
Pre-tax profit (loss) from continuing operations excluding the effects of the PPA (48,145) 146,781 56,128 225,444 110,643 36,317 73,778 181,032
290. Taxes on income for the period/year from continuing operations 17,570 (62,554) 19,727 (95,981) (48,585) (70,191) 291,636 (76,918)
of which: effects of the purchase price allocation 4,620 4,746 4,643 4,853 9,842 9,575 9,936 10,070
310. Post-tax profit from discontinued operations - (13) - 13 226 22 - -
330. Profit for the period attributable to non-controlling interests (1,547) (1,352) (7,137) (7,274) (9,477) (6,097) (5,046) (8,213)
of which: effects of the purchase price allocation 834 1,002 862 882 2,132 2,114 2,139 2,302
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving
incentives and net impairment losses on goodwill and finite useful life intangible assets excluding the
effects of the PPA (37,576) 77,114 63,213 116,467 40,833 (51,638) 348,293 83,529
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for
leaving incentives and net impairment losses on goodwill and finite useful life intangible assets (46,103) 68,501 54,664 107,519 22,911 (69,041) 330,894 64,609
210.+260.
Impairment losses on goodwill and finite useful life intangible assets net of taxes and non-controlling
interests - - - - (2,047,068) - (143,793) -
180.a Expenses for leaving incentives net of taxes and non-controlling interests (93,941) (5,292) (499) (2,141) - - - -
340. Profit (loss) for the period attributable to the shareholders of the Parent (140,044) 63,209 54,165 105,378 (2,024,157) (69,041) 187,101 64,609
Total impact of the purchase price allocation on the income statement (8,527) (8,613) (8,549) (8,948) (17,922) (17,403) (17,399) (18,920)
89

Reclassified consolidated income statement net of the most significant non-recurring items
2012
net of non-recurring
items
2011
net of non-recurring items
Changes
%
changes
Figures in thousands of euro
Net interest income (including the effects of the PPA) 1,863,561 2,018,978 (155,417) (7.7%)
Dividends and similar income 15,591 19,997 (4,406) (22.0%)
Profits of equity-accounted investees 44,426 9,947 34,479 346.6%
Net fee and commission income 1,182,276 1,193,708 (11,432) (1.0%)
Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at fair
value 223,079 7,329 215,750 -
Other net operating income/expense 163,179 191,725 (28,546) (14.9%)
Operating income (including the effects of PPA) 3,492,112 3,441,684 50,428 1.5%
Staff costs (1,373,719) (1,451,128) (77,409) (5.3%)
Other administrative expenses (701,797) (717,988) (16,191) (2.3%)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets
(including the effects of PPA) (188,921) (244,969) (56,048) (22.9%)
Operating expenses (including the effects of PPA) (2,264,437) (2,414,085) (149,648) (6.2%)
Net operating income (including the effects of PPA) 1,227,675 1,027,599 200,076 19.5%
Net impairment losses on loans (847,214) (607,078) 240,136 39.6%
Net impairment losses on other financial assets and liabilities 1,334 (9,690) 11,024 n.s.
Net provisions for risks and charges (49,212) (29,232) 19,980 68.3%
Profits from the disposal of equity investments 779 7,119 (6,340) (89.1%)
Pre-tax profit from continuing operations (including the effects of PPA) 333,362 388,718 (55,356) (14.2%)
Taxes on income for the year from continuing operations (224,046) (247,775) (23,729) (9.6%)
Post-tax profit from discontinued operations - 248 (248) (100.0%)
Profit for the year attributable to non-controlling interests (11,992) (29,629) (17,637) (59.5%)
Profit for the year attributable to the shareholders of the Parent 97,324 111,562 (14,238) (12.8%)
90

Reclassified consolidated income statement net of the most significant non-recurring: details
non-recurring items
non-recurring items
Prior year tax
Tax realignment
Tax relief on nonaccounting
deduction for
credit for
2012
UBI Banca tax Impact of IRAP
2011
Impairment
pursuant to Law
Impairment
Gain on
Impairment
net of nonrecurring
losses on
accordance with deferred tax Discontinuati
recurring
Impairment
realignment in adjustment for
losses on
No. 111/2011 and
losses on
net of non-
public tender
deductions on corporate Disposal of
loan provisions income tax
losses on
2012
shares and
Law No. 214/2011
2011
shares and AFS
Release of Write-off of
offer to
Leaving
shareholdings
tangible and items
goodwill and
Law No. 111/2011 provisions on of the UBI
AFS OICR
of BPA goodwill
OICRs
surplus B@nca 24-7 items
purchase
incentives
of UBI Banca purposes of and equity
on finite useful
and write-off of recognised as Leasing
(collective
recognised in the
pursuant to Law regional
intangible
(collective
provisions IT platform
preference
investments
life intangible
deferred income at 31st agent network
investment
consolidated
No. 244/2007 production tax
assets A
investment
B
shares
assets
tax assets/deferred December
instruments)
financial
instruments)
(Section EC) on the cost of
IRAP tax assets 2010
statements
Figures in thousands of euro
labour pursuant
to Law No.
Net interest income (including the effects of the PPA) 1,863,561 1,863,561 2,018,978 2,018,978
Dividends and similar income 15,591 15,591 19,997 19,997
Profits (losses) of equity-accounted investees 44,426 44,426 9,947 9,947
Net fee and commission income 1,182,276 1,182,276 1,193,708 1,193,708
Net income (loss) from trading, hedging and
disposal/repurchase activities and from assets/liabilities
designated at fair value 257,278 (20,671) (13,528) 223,079 7,329 7,329
Other net operating income/expense 163,179 163,179 188,380 3,345 191,725
Operating income (including the effects of PPA) 3,526,311 (20,671) - - - - - (13,528) - 3,492,112 3,438,339 - - - - 3,345 - - 3,441,684
Staff costs (1,373,719) (1,373,719) (1,423,196) (27,932) (1,451,128)
Other administrative expenses (701,797) (701,797) (717,988) (717,988)
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets
(including the effects of PPA) (191,144) 2,223 (188,921) (248,442) 3,473 (244,969)
Operating expenses (including the effects of PPA) (2,266,660) - - - - - - - 2,223 (2,264,437) (2,389,626) - - - - - (27,932) 3,473 (2,414,085)
Net operating income (including the effects of PPA) 1,259,651 (20,671) - - - - - (13,528) 2,223 1,227,675 1,048,713 - - - - 3,345 (27,932) 3,473 1,027,599
Net impairment losses on loans (847,214) (847,214) (607,078) (607,078)
Net impairment losses on other financial assets and
liabilities (54,810) 56,144 1,334 (135,143) 125,453 (9,690)
Net provisions for risks and charges (49,212) (49,212) (31,595) 2,363 (29,232)
Profits from the disposal of equity investments 14,714 (13,935) 779 7,119 7,119
Pre-tax profit from continuing operations (including the
effects of PPA) 323,129 (20,671) 56,144 - - - - (27,463) 2,223 333,362 282,016 - 125,453 - - 5,708 (27,932) 3,473 388,718
Taxes on income for the year from continuing operations (121,238) 5,684 (5,596) (24,992) (8,298) (66,086) (2,835) (685) (224,046) 95,942 (2,292) (352,841) 6,267 (1,407) 7,681 (1,125) (247,775)
Post-tax profit from discontinued operations - - 248 248
Profit for the year attributable to non-controlling interests (17,310) (21) 5,191 181 (33) (11,992) (28,833) (925) 129 (29,629)
Profit for the year attributable to the shareholders of
the Parent before expenses for leaving incentives and
impairment losses on goodwill and on finite useful life
intangible assets 184,581 (14,987) 50,527 - (24,992) (8,298) (60,895) (30,117) 1,505 97,324 349,373 - 123,161 (352,841) 5,342 4,301 (20,122) 2,348 111,562
Impairment losses on goodwill and finite useful life intangible
assets net of taxes and non-controlling interests - - (2,190,861) 2,190,861 -
Expenses for leaving incentives net of taxes and non-controlling interests (101,873) 101,873 - - -
Profit (loss) for the year attributable to the shareholders
of the Parent 82,708 (14,987) 50,527 101,873 (24,992) (8,298) (60,895) (30,117) 1,505 97,324 (1,841,488) 2,190,861 123,161 (352,841) 5,342 4,301 (20,122) 2,348 111,562
ROE 0.9% 1.0% -17.1% 1.0%
Cost/income ratio (including the effects of PPA) 64.3% 64.8% 69.5% 70.1%
Cost/income ratio (excluding the effects of PPA) 63.0% 63.6% 66.5% 67.1%
91

Reconciliation schedule as at 31st December 2012
Ite ms
RECLASSIFIED INCOME STATEMENT 2012 Reclassifications
2012
Figures in thousands of euro
Mandatory
consolidated
financial
statements
Tax
recoveries
Profit of equityaccounted
investees
Depreciation
for
improvements
to leased
assets
Fast Credit
Processing
fee/ Overdrawn
penalty
Expenses for
leaving
incentives
Reclassified
consolidated
financial
statements
10.-20. Net interest income 1,931,684 (68,123) 1,863,561
70. Dividends and similar income 15,591 15,591
Profits of equity-accounted investees - 44,426 44,426
40.-50. Net fee and commission income 1,181,806 470 1,182,276
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 257,278 257,278
220. Other net operating income/expense 244,515 (156,473) 7,484 67,653 163,179
Operating income 3,630,874 (156,473) 44,426 7,484 - - 3,526,311
180.a Staff costs (1,525,753) 152,034 (1,373,719)
180.b Other administrative expenses (858,270) 156,473 (701,797)
Depreciation, amortisation and net impairment losses on property,
200.+210. plant and equipment and intangible assets (183,660) (7,484) (191,144)
Operating expenses (2,567,683) 156,473 - (7,484) - 152,034 (2,266,660)
Net operating income 1,063,191 - 44,426 - - 152,034 1,259,651
130.a Net impairment losses on loans (847,214) (847,214)
130. b+c+d Net impairment losses on other financial assets and liabilities (54,810) (54,810)
190. Net provisions for risks and charges (49,212) (49,212)
240.+270. Profits from the disposal of equity investments 59,140 (44,426) 14,714
Pre-tax profit from continuing operations 171,095 - - - - 152,034 323,129
290. Taxes on income for the year from continuing operations (79,429) (41,809) (121,238)
310. Post-tax profit from discontinued operations - -
330. Profit for the year attributable to non-controlling interests (8,958) (8,352) (17,310)
180.a
340.
Profit (loss) for the year attributable to the shareholders of
the Parent before expenses for leaving incentives 82,708 101,873 184,581
Expenses for leaving incentives net of taxes and non-controlling
interests - (101,873) (101,873)
Profit for the year attributable to the shareholders of the
Parent 82,708 - - - - - 82,708
Reconciliation schedule for the year ended 31st December 2011
Ite ms
RECLASSIFIED INCOME STATEMENT 2011 Reclassifications
2011
Figures in thousands of euro
Mandatory
consolidated
financial
statements
Tax
recoveries
Profit of
equityaccounted
investees
Depreciation
for
improvements
to leased
assets
Overdrawn
penalty
Net impairment
losses on
goodw ill and finite
useful life
intangible assets
Reclassified
consolidated
financial
statements
10.-20. Net interest income 2,121,689 (102,711) 2,018,978
70. Dividends and similar income 19,997 19,997
Profits of equity-accounted investees - 9,947 9,947
40.-50. Net fee and commission income 1,191,934 1,774 1,193,708
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 7,329 7,329
220. Other net operating income/expense 243,065 (163,065) 7,443 100,937 188,380
Operating income 3,584,014 (163,065) 9,947 7,443 - - 3,438,339
180.a Staff costs (1,423,196) (1,423,196)
180.b Other administrative expenses (881,053) 163,065 (717,988)
Depreciation, amortisation and net impairment losses on property,
200.+210. plant and equipment and intangible assets (783,496) (7,443) 542,497 (248,442)
Operating expenses (3,087,745) 163,065 - (7,443) - 542,497 (2,389,626)
Net operating income 496,269 - 9,947 - - 542,497 1,048,713
130.a Net impairment losses on loans (607,078) (607,078)
130. b+c+d Net impairment losses on other financial assets and liabilities (135,143) (135,143)
190. Net provisions for risks and charges (31,595) (31,595)
240.+270. Profits (losses) from the disposal of equity investments (1,856,783) (9,947) 1,873,849 7,119
Pre-tax profit (loss) from continuing operations (2,134,330) - - - - 2,416,346 282,016
290. Taxes on income for the year from continuing operations 271,991 (176,049) 95,942
310. Post-tax profit from discontinued operations 248 248
330. Loss (profit) for the year attributable to non-controlling interests 20,603 (49,436) (28,833)
Profit (loss) for the year attributable to the shareholders of
the Parent before impairment losses on goodwill and on
finite useful life intangible assets (1,841,488) - - - - 2,190,861 349,373
Impairment losses on goodwill and finite useful life intangible
210.+260. assets net of taxes and non-controlling interests - (2,190,861) (2,190,861)
340. Loss for the year attributable to the shareholders of the Parent (1,841,488) - - - - - (1,841,488)
The pre-tax profit from continuing operations in the mandatory financial statements includes the balance of the item 260, net impairment losses on goodwill.
92

Notes to the reclassified consolidated financial statements
The mandatory financial statements have been prepared on the basis of Bank of Italy Circular No. 262 of 22 nd
December 2005 and subsequent updates.
The following rules have been applied to the reclassified financial statements to allow a vision that is more consistent
with a management accounting style:
- the tax recoveries recognised within item 220 of the mandatory financial statements (other net operating income/expenses) were
reclassified as a reduction in indirect taxes included within other administrative expenses;
- the item profits (losses) of equity-accounted investees includes the profits (losses) of equity-accounted investees included within
item 240 in the mandatory financial statements;
- the item other net operating income/expense includes item 220, net of the reclassifications mentioned above;
- the item net impairment losses on property, plant and equipment and intangible assets includes items 200 and 210 (the latter only
partially) in the mandatory financial statements and also the instalments relating to the depreciation of leasehold improvements
classified within item 220;
- the item profits (losses) from the disposal of equity investments includes the item 240, net of profits (losses) of equity-accounted
investees and also item 270 in the mandatory financial statements;
- impairment losses on goodwill and finite useful life intangible assets (net of taxation and non-controlling interests) include items
210 (partially) and 260 in the mandatory financial statements;
- leaving incentives expenses (net of taxation and non-controlling interests) partially include item 180a in the mandatory financial
statements.
The reconciliation of the items in the reclassified financial statements with the figures in the mandatory financial
statements has been facilitated, on the one hand, with the insertion in the margin against each item of the
corresponding number of the item in the mandatory financial statements with which it is reconciled and, on the other
hand, with the preparation of specific reconciliation schedules.
The comments on the performance of the main balance sheet and income statement items are made on the basis of
the reclassified financial statements and of the reclassified financial statements for the comparative periods, and the
tables providing details included in the subsequent sections of this financial report have also been prepared on that
same basis.
The regulatory provisions published by the CICR (interministerial committee for credit and saving) on 4 th July 2012
(pursuant to article 117-bis of the consolidated banking act) required a revision of the commission regime applied to
customers who are past due, with the application of a commission, proportionate to the actual cost incurred by the
Bank to manage past due positions, with a fixed price, entitled a “fast credit processing fee” (FCPF), which is different
for consumer and non-consumer customers. The new regime came into force with effect from 1 st July for new
customers and from 1 st October for customers already existing as at 30 th June 2012. In consideration of the nature of
the FCPF (related to neither the amount past due, nor the time past due and basically the same as a recovery of
expenses), the relative income from the fee is recognised within item 220 “Other net operating income/expense”
(within the line item “other income and prior year income”). In order to ensure consistent reporting, a reclassification
was performed in the income statement with the transfer of amounts relating (mainly) to the previous past due penalty
out of net interest income and into other operating income. It follows that the comparative figures presented (in the
tables relating to net interest income and operating income and also in the normalised reclassified income statement
and in the quarterly income statements) are different from those previously published (quantitative details of the
reclassification have been given explicitly in the reconciliation schedules).
In order to facilitate analysis of UBI Banca’s operating performance and in compliance with Consob Communication
No. DEM/6064293 of 28 th July 2006, two special schedules have been included, the first a brief summary (which
provides a comparison of the normalised results for the year) and the second more detailed, which shows the impact
on earnings of the principal non-recurring events and items – since the relative effects on capital and cash flow, being
closely linked, are not significant – which are summarised as follows:
full year 2012:
- gain on public tender offer to purchase outstanding Group preference shares;
- impairment losses on the Intesa Sanpaolo, A2A and other minor shares as well as on units in AFS units in OICR
(collective investment instruments);
- leaving incentives;
- tax realignment of BPA goodwill recognised in the consolidated financial statements (pursuant to Law No.
111/2011 and Law No. 214/2011);
- tax relief on non-accounting deductions relating to loan provisions and write-downs of UBI Banca (pursuant to
Law No. 244/2007 – Section EC);
- prior year tax credit for deductions for corporate income tax purposes (IRES) of regional production tax (IRAP) on
the cost of labour (pursuant to Law No. 214/2011);
- partial disposal of Intesa Sanpaolo shares and full disposal of investments in ARCA SGR and UBI Insurance
Broker;
- impairment losses on property, plant and equipment and intangible assets;
full year 2011:
- impairment losses on goodwill and on finite useful life intangible assets;
- impairment losses on shareholdings in Intesa Sanpaolo, A2A and Siteba and on units in OICR (collective
investment instruments - AFS);
- UBI Banca tax realignment in accordance with Law No. 111/2011 and write-off of deferred income tax
assets/deferred IRAP tax assets;
- impact of IRAP adjustment for deferred tax provisions recognised as at 31 st December 2010;
- expenses incurred for restructuring of UBI Leasing agent network;
- release of surplus provisions;
- Write-off of B@nca 24-7 IT platform.
93

The consolidated income statement
The income statement figures commented on are based on the reclassified consolidated financial statements
(the income statement, the quarterly income statements and the income statement net of the most significant
non-recurring items, condensed and complete) contained in another section of this report and the tables
furnishing details presented below are also based on those statements. The notes that follow those
reclassified financial statements may be consulted as may the reconciliation schedules for a description of the
reclassification. Furthermore, the commentary examines both changes that occurred in 2012 compared to
2011 and also those occurring in the fourth quarter of 2012 compared to the previous quarter (these comments
are highlighted with a slightly different background colour) in order to bring to light emerging events as they
developed during the year.
After an initial glimmer of an economic recovery in early 2012, weakness once more became
prevalent and then spread even to those European nations regarded as more solid. The financial
situation, one of the main obstacles to growth, gradually returned to normal late in the year,
with a decline in yields on the government securities of nations subject to the greatest pressures
and an improvement in liquidity and funding conditions on wholesale markets. By contrast, the
economic scenario continued to have an adverse impact on customers’ creditworthiness, in
relation both to the effects of the recession on corporate finances and those of households and to
the considerable increase in deteriorated loans reported by the banking sector (especially in the
second half of the year).
In this context, the UBI Banca Group ended the year with a profit of €82.7 million 1 , after having
charged €152 million in leaving incentive costs to the income statement in connection with the
trade union agreements of November 2012 and February 2013, aimed at a structural reduction
in operating costs (of which they represent a component, albeit the most significant).
In order to allow a consistent analysis of Group profits and operations, the above costs were stated in a single
separate item net of tax and non-controlling interests, shown in the reclassified consolidated financial statements on
the last line item before profit for the year.
Excluding non-recurring items (presented net of taxes and non-controlling interests) normalised
profit stood at €97.3 million compared to €111.6 million in the previous year. Those nonrecurring
items came to expense of €14.6 million in 2012 – owing to the aforementioned charges
and impairment losses on some financial assets, despite the capital gain from the public tender
offer for the preference shares, the benefits of certain tax measures and the disposal of shares
and equity investments – and they also consisted of expense of €1,953 million in 2011,
primarily due to impairment of goodwill and other intangible assets, although marginally
mitigated by the realignment of tax values.
The fourth quarter of the year – affected by the significant structural measures enabled by
the aforementioned trade union agreements, but also the increase in net impairment losses on
the loan portfolio, despite a significant contribution by financial activities – presented a loss of
€140 million, compared with a loss of €2,024.2 million in the corresponding period of 2011
and the profit of €63.2 million earned in the third quarter of 2012 (-€83 million, +€15.2 million
and +€59.8 million respectively in normalised terms).
During the year, ordinary banking business generated operating income of €3,526.3 million,
up by 2.6% compared with 2011, due above all to the results achieved by financial activities and
by equity-accounted investees, while net interest income was again affected by the generalised
1 In 2011 the UBI Banca Group had reported a loss of €1,841.5 inasmuch as it had recognised impairment losses on goodwill and
finite useful life intangible assets that had essentially arisen following the merger between the former BPU Banca Group and the
former Banca Lombarda e Piemontese Group. In other words, it significantly wrote down (by €2,397 million gross, accounting for
44% of the total on the books at the end of 2010) the carrying amounts that had been recognised.
Since those amounts had been generated by a “paper for paper” transaction, that is with no cash payments, the accounting
treatment introduced by IFRS – which does require recognition of the impairment through profit and loss – had yielded effects of an
accounting nature only, which have no impact on the Group’s operations. More specifically, it had no impacts on liquidity, capital
ratios (because these are calculated by deducting all intangible assets) or future profits, which in fact benefited from lower purchase
price allocation amortisation from 2012. The total charge resulting from the purchase price allocation declined to €34.6 million from
the €71.6 million recognised in 2011.
94

weakness of the context 2 and by de-leveraging and de-risking action taken on the loan portfolio.
Net fee and commission income also performed well, despite the difficult economic and operating
scenario.
Interest and similar income: composition
Figures in thousands of euro
Debt
instruments
Financing
Other
transactions
2012 2011
1. Financial assets held for trading 54,233 - 26 54,259 42,392
2. Financial assets designated at fair value - - - - -
3. Available-for-sale financial assets 454,581 - - 454,581 373,970
3. Held-to-maturity investments 96,150 - - 96,150 -
5. Loans and advances to banks 9,558 15,917 6 25,481 56,327
6. Loans and advances to customers 1,458 3,222,468 785 3,224,711 3,470,274
7. Hedging derivatives - - - - -
8. Other assets - - 1,095 1,095 1,872
Total 615,980 3,238,385 1,912 3,856,277 3,944,835
Interest and similar expense: composition
Figures in thousands of euro
Borrowings
Securities
Other
transactions
2012 2011
1. Due to central banks (97,721) - - (97,721) (21,520)
2. Due to banks (28,841) - (194) (29,035) (62,336)
3. Due to customers (483,178) - (112) (483,290) (416,507)
4. Debt securities issued - (1,302,558) - (1,302,558) (1,325,414)
5. Financial liabilities held for trading (38,728) - - (38,728) (12,574)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions - - (595) (595) (728)
8. Hedging derivatives - - (40,789) (40,789) (86,778)
Total (648,468) (1,302,558) (41,690) (1,992,716) (1,925,857)
Net interest income 1,863,561 2,018,978
Net interest income 3 , which included the effects of the purchase price allocation of -€37 million,
compared with the previous -€49.9 million, amounted to €1,863.6 million, down by €155.4
million compared with 2011, the consequence, for each component of the item 4 , of the increased
impact of interest expense in line with market trends for interest rates. In short:
- business with customers generated net interest income of €1,527.2 million (-€246.4
million), impacted above all by both the interest rates for funding (the spread for business
with customers narrowed by 20 basis points compared with 2011) and by volumes of
business (consolidated loans decreased by €6.8 billion over the twelve months). In addition
to the obvious difficulties of the economic situation, the latter was also influenced by a
policy to reduce lending to large corporate clients in favour of non-captive customers
(following the disposal of third party agency networks), as well as by generalised de-risking
of the entire portfolio, despite improvement in the mark-up of approximately 80 basis
points;
- the securities portfolio generated net interest income of €437.2 million, (+€165.4 million),
due to growth in investments in debt instruments over twelve months of €10.5 billion.
Purchases of Italian government securities continued to make a substantial contribution to
net interest income (€454.6 million of interest income from available-for-sale securities –
2 Interest rate trends moved in opposing directions, although to a lesser degree in the final months of the year, with a tendency of the
medium to long-term maturities of the yield curve to rise rapidly, while very short-term maturities fell further (the average
progressive Euribor one month rate fell further from 1.19% in 2011 to 0.338% in 2012).
3 Following the introduction of the expedited processing fee, a reclassification was conducted within the income statement, separating
out the sums (primarily) relating to the previous overdraft penalty from net interest income and reclassifying them within other
operating income. The comparative figures presented in the tables illustrating net interest income and operating income thus differ
from the published versions. Refer to the notes to the reclassified consolidated financial statements.
4 The calculation of net balances was performed by allocating interest for hedging derivatives and financial liabilities held for trading
within the different areas of business (with customers, financial, with banks).
95

AFS – and €96.2 million from the held-to-maturity – HTM – portfolio), although these
investments incorporate the costs of uncovered short positions and the differentials paid on
hedges on fixed interest rate bonds;
- activity on the interbank market resulted in net interest expense of €101.3 million (net
expense of €27.5 million in 2011), attributable almost entirely to debt with the central
bank, through LTROs in 2012 and full-allotment auctions in 2011, which helped to change
the mix of the sources of funding for the portfolio. Net of that expense (€97.7 million in
2012 compared with €21.5 million in 2011), the balance on business with other banks
passed from -€6 million in 2011 to the -€3.6 million at present.
Dividends received fell to €15.6 million (from €20 million before) and they related mainly to
securities in the AFS portfolio held by UBI Banca. The fall in the total reflects a lower
distribution of profits by all companies and on the 186,458,028 ordinary Intesa Sanpaolo shares
in particular (held on the books on the ex dividend date), with a dividend of €0.05 per share,
which paid €9.3 million (compared to €11.6 million in 2011).
Driven by the good performance of the insurance companies, profits of equity-accounted
investees 5 climbed to €44.4 million (+€34.5 million), the result of significant contributions
from: Aviva Vita (€14.4 million compared with €6 million in 2011), Lombarda Vita (€16.1
million, up from €4.5 million before), UBI Assicurazioni (€8.6 million, compared with €3.2
million) and Aviva Assicurazioni Vita (€8 million, compared with -€2.4 million).
Fee and commission income: composition
Fee and commission expense: composition
Figures in thousands of euro
2012 2011
Figures in thousands of euro
2012 2011
a) guarantees granted 50,078 49,793 a) guarantees received (44,171) (807)
c) management, trading and advisory services 636,406 622,140 c) management and trading services: (78,322) (82,257)
1. trading in financial instruments 27,165 38,410 1. trading in financial instruments (14,403) (18,268)
2. foreign exchange trading 7,400 11,868 2. foreign exchange trading (10) (38)
3. portfolio management 251,523 277,518 3. portfolio management (8,526) (6,236)
3.1. individual 67,994 72,042 3.1. own - -
3.2. collective 183,529 205,476 3.2. on behalf of third parties (8,526) (6,236)
4. custody and administration of securities 12,293 13,702 4. custody and administration of securities (7,502) (6,979)
5. depository banking - - 5. 6. placement financial instruments, of financial products instruments and
(4,844) (4,416)
6. placement of securities 133,614 74,538 services
7. receipt and transmission of orders 49,521 40,852 distributed through indirect networks
(43,037) (46,320)
8. advisory activities 6,398 4,855 d) collection and payment services (38,946) (44,141)
8.1 on investments 6,398 4,855 e) other services (26,177) (32,688)
8.2 on financial structure - -
9. distribution of third party services 148,492 160,397 Total (187,616) (159,893)
9.1. portfolio management 37 42
9.1.1. individual 37 42
9.2. insurance products 106,386 119,723
9.3. other products 42,069 40,632
d) collection and payment services 154,047 150,128
f) services for factoring transactions 26,240 26,486
i) current account administration 214,152 216,501
j) other services 288,969 288,553
Total 1,369,892 1,353,601 Net fee and commission income 1,182,276 1,193,708
Net fee and commission income remained basically steady at €1,182.3 million (down by 1% on
the previous year), the aggregate result of different performances within the item:
- management, trading and advisory services rose to €550.7 million 6 (+€22.6 million). They
were driven by the placement of securities (+€58.6 million), and in particular by
subscriptions of the new UBI Pramerica Sicav’s (Cedola Certa 2013-2016, Protezione e
Crescita 2017, Focus Italia, Cedola Mercati Emergenti and Cedola Certa 2013-2017) and by
the receipt and placement of orders and advisory services (+€10.2 million), despite
5 The item consists of the profits of the companies recognised on the basis of the percentage interest held by the Group. The item no
longer includes the profit for Arca SGR (-€1.1 million in 2011) following a decision taken by the Group to withdraw from the share
capital of this company. The investment (held by UBI Banca and by BPA) was disposed of on 3 rd September 2012.
6 The amount consists of management, trading and advisory services net of the corresponding expense items and is calculated
excluding currency trading.
96

continuing penalisation by portfolio managements (-€28.3 million), custody and
administration of securities (-€1.9 million) and the distribution of third-party services
(-€11.9 million, of which -€13.3 million relating to insurance products and +€1.4 million to
other products). The latter was only partially offset by lower commission expense for
financial instruments and products and services sold through indirect networks (-€3.3
million), in relation to the rationalisation of UBI Banca Private Investment in progress since
2011;
- fees and commissions on ordinary banking business 7 fell to €631.6 million (-€34.1 million).
The result included growth of collection and payment operations (+€9.1 million) and “other
services” (+€6.9 million, including commitment fees), but also decreases in current account
administration charges (-€2.3 million, due in part to the ongoing shift in customers’
preferences), in foreign exchange business (-€4.4 million) and above all in commissions on
guarantees (-€43.1 million). The item includes the expense (€42.8 million) of the guarantee
from the Italian government on the bonds issued in the first months of the year by UBI
Banca amounting to €6 billion nominal, designed to increase assets eligible for refinancing
with the ECB. The expense consisted of an annual percentage of the nominal amount of the
bonds issued. Because these were issued by the Parent, subscribed by Centrobanca and then
repurchased entirely by UBI Banca, on the basis of IFRS international accounting standards, like the
interest income and expense attributable to them, they are not recognised in the accounts. However, they
are nevertheless included within the assets eligible for refinancing that form part of the cover pool
available to the ECB.
As a result principally of the disposal of financial assets held for trading consisting of bonds,
the net result for financial activities rose to €257.3 million, a marked recovery compared to the
€7.3 million reported in 2011. In detail:
- trading made a positive contribution of €91.8 million (€10.7 million in 2011 8 ), almost
entirely attributable to the trading in debt instruments: +€101.8 million (net of unwinding
derivatives on assets and liabilities resulting in a loss of €34.2 million) from debt
instruments and derivatives on debt instruments and interest rates, +€4 million from
equity instruments and the relative derivatives and +€18 million from currency trading;
- changes in fair value – relating to investments in Tages funds and a residual position in
hedge funds, as well as the private equity investments held by Centrobanca classified
according to the FVO at the end of 2012 – recorded a profit of €0.9 million, compared to a
loss of €38.8 million in 2011, due to the performance of international markets 9 ;
- hedging activity, which represents the change in the fair value of derivatives and the relative
items hedged, resulted in a profit of €1.1 million (a profit of €8.9 million in 2011) and should
be interpreted in combination with the information reported on trading activity concerning
the unwinding phenomenon;
- the disposal of AFS instruments and the repurchase of financial liabilities generated profits
of €163.5 million (€26.5 million in 2011 10 ), of which: €139.4 million from the disposal of
financial assets and €124.6 million in particular from the sale of €6.4 billion of Italian
government securities (primarily securities held by UBI Banca maturing from 2013 to
2015); €16.3 million from equity instruments (of which: €14 million 11 non-recurring, from
the partial disposal of Intesa Sanpaolo shares and €1.6 million from the sale of Società per i
Mercati di Varese and of Risparmio e Previdenza); -€2.2 million from the disposal of former
B@nca 24-7 and Centrobanca unsecured non-performing loans and a BPB credit position;
while the remaining €24.1 million was from the repurchase of financial liabilities. The latter
7 All the changes were calculated by subtracting fee and commission expense from the respective fee and commission income.
8 Net of the unwinding phenomenon (-€18.4 million), the result for 2011 was composed of: +€26.4 million from debt instruments and
the related derivative instruments; -€15.9 million from equity instruments and the related derivative instruments (in relation to the
impairment loss on Medinvest International of €12.2 million); and +€13.7 million from foreign currency business.
9 In the comparative year, the result reflected: disposals of UBI Pramerica funds in the third quarter with a loss of €22 million, when
a stop-loss mechanism was triggered (in compliance with the limits set by the Financial Risks Policy), losses on Tages hedge funds,
formerly Capitalgest (-€11.4 million) and the fair valuation of residual positions in other hedge funds.
10 This sum included €12.1 million from the repurchase of securities issued – by the Parent (€14.1 million), mainly consisting of
securities in the EMTN programme, and by Centrobanca (€4 million), as part of ordinary business with customers – while €14.4
million was from the disposal of financial assets: €6.8 million from the equity investment in the London Stock Exchange (formerly
Borsa Italiana), €1.6 million from other lesser equity investments (including PerMicro), €2.5 million in funds originating primarily
with the former Capitalgest SGR, approximately €1 million in debt instruments, chiefly of IW Bank, and €2.5 million in unsecured
non-performing loans, largely originating with B@nca 24-7.
11 Only the share of the overall capital gain attributable to UBI Banca (€13.5 million) is subject to normalisation.
97

item also included a €20.7 million non-recurring gain on the public tender offer to purchase
preference shares, repurchases of bonds issued, including a profit of €14.3 million on the
buy-back of notes under the EMTN programme issued by the Parent and a loss of €10.8
million in relation to ordinary business with customer counterparties (mainly by the
network banks).
Net trading income
Gains
Profits from
trading
Losses
Losses from
trading
Net income
2012
Figures in thousands of euro (A) (B) (C) (D) [(A+B)-(C+D)]
2011
1. Financial assets held for trading 112,875 186,923 (3,067) (82,043) 214,688 (67,392)
1.1 Debt instruments 21,928 72,024 (207) (8,763) 84,982 30,332
1.2 Equity instruments 1,675 799 (2,560) (325) (411) (10,488)
1.3 Units in O.I.C.R. (collective investment instruments) 72 133 (300) (4) (99) (265)
1.4 Financing - - - - - -
1.5 Other 89,200 113,967 - (72,951) 130,216 (86,971)
2. Financial liabilities held for trading 9,530 16 - (10) 9,536 (1,502)
2.1 Debt instruments 9,530 - - - 9,530 (2,367)
2.2 Payables - - - - - -
2.3 Other - 16 - (10) 6 865
3. Financial assets and liabilities: exchange rate differences X X X X 7,308 (5,011)
4. Derivative instruments 328,582 1,620,729 (317,630) (1,651,874) (139,729) 84,616
4.1 Financial derivatives 328,582 1,620,729 (317,630) (1,651,874) (139,729) 84,616
- on debt instruments and interest rates 291,999 1,608,832 (290,011) (1,637,661) (26,841) (19,932)
- on equity instruments and share indices 203 5,558 (54) (1,250) 4,457 (5,387)
- on currencies and gold X X X X (119,536) 105,723
- other 36,380 6,339 (27,565) (12,963) 2,191 4,212
4.2 Credit derivatives - - - - - -
Total 450,987 1,807,668 (320,697) (1,733,927) 91,803 10,711
Net hedging income
Figures in thousands of euro 2012 2011
Net hedging income 1,072 8,938
Profit from disposal or repurchase
Figures in thousands of euro
Profits
Losses
Net profit
2012
2011
Financial assets
1. Loans and advances to banks 16 - 16 -
2. Loans and advances to customers 9,337 (11,484) (2,147) 2,464
3. Available-for-sale financial assets 145,791 (4,235) 141,556 11,929
3.1 Debt instruments 128,421 (3,825) 124,596 1,027
3.2 Equity instruments 16,686 (406) 16,280 8,404
3.3 Units in O.I.C.R (collective investment instruments). 684 (4) 680 2,498
3.4 Financing - - - -
4. Held-to-maturity investments - - - -
Total assets 155,144 (15,719) 139,425 14,393
Financial liabilities
1. Due to banks - - - -
2. Due to customers - - - -
3. Debt securities issued 46,964 (22,838) 24,126 12,136
Total liabilities 46,964 (22,838) 24,126 12,136
Total 202,108 (38,557) 163,551 26,529
Net profit (loss) on financial assets and liabilities designated at fair value
Figures in thousands of euro 2012 2011
Net profit (loss) on financial assets and liabilities designated at fair value 852 (38,849)
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value
257,278 7,329
Other net operating income/expense decreased to €163.2 million (-€25.2 million) as a reflection
of the performance of income, which fell to €229.1 million (-€29.1 million), owing to lower
recoveries of expenses on current accounts (partly in light of ongoing regulatory
developments), insurance premiums (to be interpreted in relation to the corresponding cost
item) and finance lease contracts.
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Under the line “other income and Other net operating income
exceptional receivables,” the item
also includes the new fast credit Figures in thousands of euro
2012 2011
processing fee, which from 1 st Other operating income 229,097 258,156
October 2012 replaced the previous
Recovery of expenses and other income on current accounts 14,158 15,458
Recovery of insurance premiums 28,140 31,644
overdraft penalty, reclassified under
Recoveries of taxes 156,473 163,065
this item from net interest income in Rents and other income for property management 7,494 8,158
the interests of consistency of Recovery of expenses on finance lease contracts 12,814 14,181
Other income and prior year income 166,491 188,715
presentation. A comparison between
Reclassification of "tax recoveries" (156,473) (163,065)
the two years shows a decrease of
Other operating expenses (65,918) (69,776)
approximately €12 million due to a Depreciation of leasehold improvements (7,484) (7,443)
reduction in the number of accounts Costs relating to finance lease contracts (7,607) (7,145)
Expenses for public authority treasury contracts (6,604) (6,977)
overdrawn (the result of monitoring
Ordinary maintenance of investment properties - -
action) and to the method used to Other expenses and prior year expense (51,707) (55,654)
calculate the new commission,
based on a fixed price, as opposed to
Reclassification of depreciation of leasehold improvements 7,484 7,443
Other net operating income 163,179 188,380
the overdraft penalty, which was
commensurate to the amount and duration of the overdraft.
Operating expense also decreased slightly to €65.9 million (-€3.9 million), owing to the
changes in prior year expense, which in the previous year included €3 million attributable to
applications for action by the Interbank Deposit Protection Fund and €3.3 million (nonrecurring)
aimed at terminating the contracts of agents of UBI Leasing.
In addition, both prior year items (of both income and expense) include on the one hand the
operating loss as a result of a bank robbery and on the other, the related insurance
compensation.
In the fourth quarter, operating income, driven by the disposal of debt instruments and net fee
and commission income, came to €890.8 million, compared with €904.3 million in the fourth
quarter of 2011 and with €840.9 million in the third quarter of 2012 (which had benefited from
the results for financial activities to a lesser extent). The quarter-on-quarter increase in the item
(+€49.9 million) is explained by the following trends:
• a reduction in net interest income to €417.5 million (-€48.9 million), related to a further
decrease in interest rates 12 and the volume effect, which influenced business with customers.
Consequently, interest income on loans decreased by €50.6 million (in relation to a decrease
in outstanding loans of approximately €2 billion during the quarter), while the spread on
business with customers narrowed by more than 10 basis points. By contrast, the net
contribution of the securities portfolio did not change significantly compared with the
previous year (-€8.6 million; the impact was at least partially mitigated by the switch to
longer maturities and the increase in volumes of approximately €1.5 billion). As a result of
the LTRO financing from the ECB, the result for interbank business also remained negative,
with an expense of €25.2 million compared to the previous expense of €26.7 million;
• an increase in dividends to €1.9 million (+€0.9 million), relating to the available-for-sale
portfolio;
• a rise in the profits of equity-accounted investees to €10.7 million (+€2.7 million), primarily
attributable to the life insurance companies;
• an improvement in net fee and commission income to €310.7 million (+€25.1 million). It
should also be noted that the item includes performance commissions of €19.7 million,
entirely attributable to UBI Pramerica SGR and recognised in the fourth quarter of the year
alone 13 . If that variable is disregarded, net fee and commission income performed well
compared with the previous quarter (+€5.4 million), owing to an improvement in
management, brokering and advisory services (+€8.5 million, primarily related to the
distribution of insurance policies and order collection and placement), while traditional
banking services declined (by approximately €3 million, associated with the performance of
12 The average one month Euribor rate fell further from 0.167% in the third quarter to 0.112% in the fourth quarter.
13 Performance commissions accounted for 1.7% of net fee and commission income for the year, compared with 1% in 2011, when
performance commissions amounted to €11.7 million.
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other services, in which commitment fees are classified, only partially offset by an uptrend in
collection and payment services and year-end charges for current account administration);
• a significant improvement in the result for financial activities to €109 million (+€66.1 million),
broken down into the disposal/repurchase of financial assets of €72.2 million (of which €64.7
million as the capital gain on government securities, €11.9 million on the Intesa Sanpaolo
shares, -€1 million from the repurchase of own bonds in business with customers and -€2.9
million from the disposal of a BPB credit position to the group controlling the borrower),
trading (primarily of debt instruments) of €22.3 million, hedging of €12 million (unwinding for
the quarter, amounting to -€14.9 million, should be considered for accurate interpretation)
and measurement at fair value of the units of OICR (collective investment instruments, i.e.,
Tages funds and residual hedge funds) and private equity investments of €2.5 million;
• an increase in other net operating income/expense (+€4 million), partly fostered by expense
recoveries traditionally recognised at year-end on current accounts and finance lease
contracts, but above all by the performance of prior year income and expense, which vary
considerably in amount from one period to another because they consist of components of a
heterogeneous nature and non-structural character.
Operating expenses totalled €2,266.7 million (-5.2%), benefiting from the results of ongoing
efforts to optimise the Group’s cost structure and from lower amortisation of the goodwill
arising from the merger due to the impairment losses recognised at the end of 2011.
Staff costs decreased to €1,373.7
million, compared with the €1,423.2
million reported in 2011.
However, this latter figure included a nonrecurring
component of +€27.9 million, recognised
within the item “expenses for retired personnel”
relating to a release of excess provisions 14 .
Net of this effect, labour costs for the
year decreased by €77.4 million.
As shown in the table, the decrease for
expenses relating to employees was
more significant (-€72.1 million), the
result of a reduction in staff numbers (-
338 in terms of total average staff
numbers), changes in variable
components of remuneration, the impact
of the new national labour contract (for
professional areas and middle
managers) and lower provisions for the
renewal of the national labour contract
signed in January 2012 15 .
Staff costs: composition
Figures in thousands of euro
2012 2011
1) Employees (1,353,539) (1,425,623)
a) Wages and salaries (939,900) (983,736)
b) Social security charges (248,748) (267,619)
c) Post-employment benefits (50,879) (60,928)
d) Pension expense (16) (74)
e) Provision for post-employment benefits (10,196) (9,078)
f) Pensions and similar obligations: (3,042) (3,069)
- defined contribution (113) (139)
- defined service (2,929) (2,930)
g) Payments to external supplementary pension plans: (42,626) (50,431)
- defined contribution (42,165) (50,154)
- defined benefits (461) (277)
h) Expenses resulting from share based payments - -
i) Other employee benefits (58,132) (50,688)
2) Other personnel in service (2,475) (6,504)
- Expenses for agency staff on staff leasing contracts (398) (3,671)
- Other expenses (2,077) (2,833)
3) Directors and statutory auditors (17,705) (19,001)
4) Expenses for retired personnel - 27,932
Total (1,373,719) (1,423,196)
Other administrative expenses fell to
€701.8 million (-€16.2 million).
This decrease is the aggregate result of an increase of €5.4 million in indirect taxation (primarily
due to the introduction of a municipal property tax) and savings of €21.6 million on current
spending, within which opposing trends were recorded. In detail, there were increases in services
in outsourcing (+€4.3 million, relating to the process of insourcing the management of financing
applications by Prestitalia, an activity that had previously been outsourced to specialised outside
firms, with which operating relationships were gradually discontinued), SW and HW license and
maintenance fees and lease instalments (+€2.1 million), tenancy of premises (+€1.1 million),
14 The amount in question related to the release of amounts recognised in previous years due to actuarial recalculations of post
retirement benefits, now no longer considered due. In the third quarter of 2011, the defined benefit obligation and the existing
mathematical reserve were reversed, with a positive impact on the item “administrative expenses: staff costs” of €27.9 million and
the relative portion of the “fair value reserve actuarial gains/losses on defined benefit plans” amounting to approximately €2
million was reclassified within “retained earnings”.
15 Expense items also benefited in the second quarter of 2012 from the recognition of a total of €17 million for the release of
provisions made in prior periods.
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professional services (+€2 million,
associated with projects aimed at optimising
capital and liquidity – eligible assets – and
intragroup corporate integration
transactions).
The line item “professional and advisory services”
(€92.2 million) groups together a variety of expense
types incurred in the Group’s activities. These expenses
are for the following purposes: commercial and sales
support (€11.7 million), support of issuances and
capital management (€14 million), legal expenses (€12.4
million), technical support (€14 million, inclusive of
auditors’ certifications), strategic and organisational
consulting (€7.8 million) and IT services (€32.3 million).
The latter include expenses relating to extraordinary
corporate integration operations, business support
projects and regulatory projects for compliance with
legislation as well as expenses relating to ordinary
activities.
On the other hand, action taken to contain
costs primarily involved the following:
advertising (-€9.5 million), rent payable
(-€4.4 million, related, amongst other
things, to branch closures carried out in
2011 and February 2012), telephone and
data transmission expenses (-€3.8 million),
postal expenses (-€2.7 million, partly due to
increased use of online communications),
forms and stationery (-€2.6 million),
information services and land registry
Other administrative expenses: composition
Figures in thousands of euro
2012 2011
A. Other administrative expenses (644,748) (666,346)
Rent payable (67,702) (72,060)
Professional and advisory services (92,216) (90,225)
Rentals hardware, software and other assets (41,073) (36,211)
Maintenance of hardware, software and other assets (37,765) (40,483)
Tenancy of premises (55,867) (54,755)
Property maintenance (25,971) (27,245)
Counting, transport and management of valuables (14,529) (16,004)
Membership fees (9,338) (9,468)
Information services and land registry searches (10,660) (12,612)
Books and periodicals (1,659) (1,877)
Postal (23,866) (26,576)
Insurance premiums (43,083) (44,276)
Advertising (16,489) (26,007)
Entertainment expenses (1,735) (2,017)
Telephone and data transmission expenses (54,728) (58,531)
Services in outsourcing (50,699) (46,439)
Travel expenses (23,330) (23,476)
Credit recovery expenses (43,872) (44,000)
Forms, stationery and consumables (8,510) (11,137)
Transport and removals (7,654) (7,354)
Security (8,450) (9,736)
Other expenses (5,552) (5,857)
B. Indirect taxes (57,049) (51,642)
Indirect taxes and duties (31,594) (37,498)
Stamp duty (142,951) (140,749)
Municipal property tax (16,915) (8,806)
Other taxes (22,062) (27,654)
Reclassification of "tax recoveries" 156,473 163,065
Total (701,797) (717,988)
searches (-€2 million) and counting, transport and management of valuables (-€1.5 million).
It must also be considered that all expense items incurred in 2012 were affected by a one percent increase in VAT which
occurred in September 2011, amounting to a total of approximately €4.3 million.
Depreciation, amortisation and net impairment losses on property, plant and equipment and
intangible assets fell to €191.1 million (-€57.3 million). Of this decrease, €49.7 million was due
to a reduction in the effects of the purchase price allocation arising from the merger, following
impairment losses recognised at the end of 2011 (which affected finite useful life intangible
assets, such as brand names, core deposits and assets under management, for a total of €523
million before taxes and non-controlling interests). Net of the effects of the purchase price
allocation, the item (€171 million) decreased by €7.6 million, despite greater amortisation of
software commenced in 2011 (+€6.7 million) and write-offs incurred for branch closures by
BPCI, BPA, BBS, Carime and BRE in 2012 (+€2.1 million), as well as the Centrobanca IT
system and, to a lesser extent, certain properties (for a total of +€2.2 million, classified within
non-recurring components). The decrease in the item also reflected lower depreciation of
hardware (-€4.6 million) and lower depreciation and amortisation of IW Bank and S.B.I.M.
tangible and intangible assets (-€4.4 million) and the absence of amortisation on intangible
assets related to By You, which was fully written-off in the second quarter of 2011 (-€1.5
million). Net impairment losses also included a non-recurring item of €3.5 million for the
write-off of the B@nca 24-7 IT system, which at the time was held for sale.
On a quarterly basis, operating expenses were affected by the seasonal nature of certain
expense items, as also confirmed by the normalised average quarterly figure, which showed a
further, marked reduction: from €618 million in 2009 to €608 million in 2010, €603 million in
2011 and €566 million in 2012.
In the third quarter, operating expenses rose to €574.1 million, compared with €612.7 million in
the same quarter of 2011 and €555.8 million in the third quarter of 2012. The quarter-onquarter
increase (+€18.3 million) was the result of the following factors:
• staff costs of €336.3 million were down by €12.2 million compared with the €348.6 million
recognised in the third quarter, partly owing to ongoing processes to increase efficiency;
• other administrative expenses totalled €188.1 million, compared with €161.4 million in the
third quarter, up by €26.7 million, of which €3.5 million was attributable to indirect taxation
(partly in relation to different payment due dates, which tend to concentrate in June and
101

December) and €23.2 million to current expenses (concentrated in professional and advisory
services, advertising, credit recovery expenses, travel expenses, maintenance of properties
and equipment and services in outsourcing), also influenced by the different seasonal nature
of some expense items;
• depreciation, amortisation and net impairment losses on property, plant and equipment and
intangible assets rose by €3.8 million to €49.6 million, reflecting two non-recurring factors,
an initial write-off of €1.3 million of the IT system of Centrobanca in view of migration to the
Group’s target system, as well as certain impairment losses on properties recognised by UBI,
UBI.S, Prestitalia and BPB Immobiliare (€0.9 million), in addition to write-offs recognised in
connection with the branch-closure process completed in December of approximately €1.3
million.
As a summary of overall performance, net operating income rose to €1,259.7 million, an
improvement of 20.1% compared with 2011.
On a quarterly basis, net operating income stood at €316.8 million, compared with €291.7
million in the same quarter of 2011 and with €285.1 million in the third quarter of 2012.
The difficulties of the macroeconomic background continued to be reflected in the performance
of net impairment losses on loans, which increased to €847.2 million over the twelve months
(+€240 million compared with 2011), of which €503 million was attributable to the network
banks (+€198 million) and €347 million to the product companies (also including UBI Banca,
relating to the consumer finance activity acquired with the merger of B@nca 24-7, +€52
million).
Net impairment losses on loans: composition
Figures in thousands of euro
Impairment losses/
reversals of impairment losses, net
A. Loans and advances to banks 2 (68) (66) - (5) (5)
B. Loans and advances to customers (882,628) 35,480 (847,148) (373,308) 20,778 (352,530)
C. Total (882,626) 35,412 (847,214) (373,308) 20,773 (352,535)
2012
Impairment losses/
reversals of impairment losses, net
Specific Portfolio Specific Portfolio
4th
Quarter
2012
Figures in thousands of euro
Impairment losses/
reversals of impairment losses, net
Specific Portfolio Specific Portfolio
A. Loans and advances to banks (3) (114) (117) 1 (18) (17)
B. Loans and advances to customers (544,777) (62,184) (606,961) (195,115) (13,281) (208,396)
C. Total (544,780) (62,298) (607,078) (195,114) (13,299) (208,413)
2011
Impairment losses/
reversals of impairment losses, net
4th
Quarter
2011
The total increase in the item of €240 million – of which more than €192 million is attributable
to the fourth quarter, which traditionally also incorporates net impairment losses on positions
brought to light after year-end – is in reality the aggregate result of higher specific impairment
losses of €338 million (of which €226 million relating to the network banks and €108 million
to the product companies) and a decrease in impairment losses on the performing portfolio of
€98 million.
As shown in the table, in 2012, owing in part to the reduction of the performing portfolio, the
Group recognised net portfolio reversals of €35 million 16 , of which €1.8 million originated with
the network banks and €23.2 million with the product companies. The latter include
approximately €24 million attributable to the former B@nca 24-7 17 (merged into the Parent in
the third quarter), due to two types of reasons. Firstly as a consequence of the rigorous
valuation polices pursued on this bank’s portfolio since 2009 and secondly as a result of
16 Of this figure, €10 million related to the reversal following the release of the guarantee granted by UBI Banca to the former B@nca
24-7 benefiting Prestitalia, which in the individual accounts was included among reversals on other assets and liabilities.
17 The impairment losses of B@nca 24-7 for 2011 included €19.4 million for impairment relating to the Ktesios Group, of which €8
million recognised as the reclassification of a provision for risks and charges made in the fourth quarter of 2010.
102

changing from collective recognition to more recognition of impairment losses on single
positions for the salary backed lending line of business contributed to Prestitalia, a prudential
change carried out in the second quarter in preparation for the contribution of the operations.
With regard to specific impairment, reversals were recognised in the period (excluding present
value discounts) amounting to €178.8 million (€216.8 million in 2011).
The loan loss rate (calculated as total net impairment losses as a percentage of net loans to
customers) increased at the same time to 0.91% from 0.61% for 2011.
Net impairment losses/reversals of impairment losses on loans: quarterly performance
Figures in
thousands of
euro
1st
2nd
Specific Portfolio Specific Portfolio
Specific
Quarter
Quarter
Portfolio
3rd
Quarter
Specific
Portfolio
4th
Quarter
2012 (122,221) (8,949) (131,170) (225,562) 22,381 (203,181) (161,535) 1,207 (160,328) (373,308) 20,773 (352,535)
2011 (96,010) (9,364) (105,374) (142,877) (15,271) (158,148) (110,779) (24,364) (135,143) (195,114) (13,299) (208,413)
2010 (105,366) (26,493) (131,859) (184,080) (5,765) (189,845) (124,200) (9,811) (134,011) (217,327) (33,890) (251,217)
2009 (122,845) (36,728) (159,573) (176,919) (58,703) (235,622) (178,354) (18,995) (197,349) (281,668) 9,001 (272,667)
2008 (64,552) 4,895 (59,657) (85,136) (8,163) (93,299) (77,484) (25,384) (102,868) (219,512) (90,887) (310,399)
On a quarterly basis, net impairment losses of €352.5 million were up compared both with the
third quarter of 2011 (when they came to €208.4 million) and the three prior months, during
which they amounted to €160.3 million.
The loan loss rate – annualised – was 1.52% compared with the 0.84% recorded in the same
quarter of 2012 and with 0.68% in the third quarter of 2012.
The income statement for the year also recorded €54.8 million of net impairment losses on
other financial assets/liabilities, of which €56.1 million of non-recurring items (including €47.1
million already recognised at the end of June) relating to impairment losses on instruments
held in the AFS portfolio: €31.8 million on the Intesa Sanpaolo share (based on the reference
price quoted on 29 th June 2012, €1.118) €3.5 million on A2A and €20.8 million on other
shares and OICR units (collective investment instruments – including €12.5 million on the
Centrobanca Sviluppo Impresa fund and €4.4 million on the Polis closed-end property fund) 18 .
The value of the Intesa Sanpaolo
shares recovered in the second half of
the year by €21.6 million, which
increased the reserve in equity and
did not change the half year
impairment.
Following the partial disposal of 72,329,014
shares in the final four months of 2012, the
recovery in the capital amount was calculated on
the new number of shares (114,129,014) and on
the reference price on 28 th December 2012,
which was €1.3.
Net provisions for risks and charges
Figures in thousands of euro
2012 2011
Net provisions for revocation clawback risks (9,806) (2,248)
Net provisions for staff costs (259) (450)
Net provision for bonds in default 71 (286)
Net provisions for litigation (11,285) (10,425)
Other net provisions for risks and charges (27,933) (18,186)
Total (49,212) (31,595)
Net provisions for risks and charges totalled €49.2 million and included €12 million recognised
as part of the restructuring of indirect distribution networks launched in the previous year,
€10 million attributable to Prestitalia, relating to the process of insourcing the loan application
IT processing, which had previously been outsourced to third party companies and €3 million
attributable to B@nca 24-7, allocated in the first six months of the year to account for risks
associated with its business with customers.
18 In 2011 net impairment losses on other financial assets and liabilities amounted to €135.1 million, of which €9.7 million relating to
impairment losses on available-for-sale financial assets and impairment losses on guarantees granted and €125.4 million to
impairment losses on available-for-sale financial assets classified as non-recurring. They consisted of the following: impairment
losses on units in OICR funds (collective investment instruments) (€7.5 million, of which €4.3 million relating to the Polis property
fund) held by UBI Banca and impairment losses on investments in Banco di Brescia (€1.6 million), as well as a total of €116.3
million of impairment losses on equity investments in A2A (€3.3 million), in Siteba Spa (€0.5 million) and in Intesa Sanpaolo. The
latter incurred a total impairment loss of €112.5 million during the year on the basis of the official share price quoted on 30 th
December 2011 (1.2891 euro). The amount includes the impairment loss recognised in the first half (€15.9 million), together with
the recognition of a further impairment loss that became necessary in the third quarter (€112.9 million), which was then offset by a
recovery in the share price in the fourth quarter (+€16.3 million).
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Provisions for litigation, primarily related to the network banks and litigation with customers
involving financial investments and compounding of interest, were up by €0.9 million
compared with 2011. By contrast, provisions for revocatory clawback risks rose by €7.6
million and related to a position in the process of being settled, for which the bodies of the
extraordinary administration procedure formulated a settlement proposal, on which the UBI
Banca Group expressed a favourable opinion.
In the previous year, net provisions for risks and charges of €31.6 million, primarily concentrated in the items “for
litigation” and “other provisions,” related, amongst other things, to the following: B@nca 24-7 (€7.5 million, to account
for operating risks associated with the provision of consumer loans and salary backed lending transactions brokered
by financial companies in conditions of objective difficulty, of which €3.6 million pertained to Ktesios SpA, net of a
release of provisions of €8 million, set aside in 2010 in connection with Ktesios, as the transfer to net impairment
losses on loans); IW Bank (€2.1 million, attributable to the closure of transit accounts which failed to balance,
regarding the former legacy platform created at the time of the follow-up to the IT migration carried out in February
2011); and UBI Leasing (€2.4 million, non-recurring, of provisions recognised as part of the process of disposing of the
network of agents, due to the termination of contracts, to be interpreted in conjunction with the figure of €3.3 million
recognised within non-recurring operating expenses).
The disposal of equity investments generated a profit of €14.7 million (of which €13.9 million
was non-recurring), attributable to the capital gain of €8.1 million earned on the liquidation of
the equity investment in Arca SGR (following the exercise of the right of withdrawal) and €5.8
million on the disposal in December of the entire equity investment in UBI Insurance Broker
(net of consolidation adjustments and excluding dividends received of €3.2 million).
In the case of Arca SGR, the capital gain indicated is significantly different from that recognised by the Parent
(€21.8 million) because the investment had been recognised at historical cost in the accounts of UBI Banca,
while it has been accounted for according to the equity method in the consolidated financial statements and
therefore the value increased progressively as a result of the profits distributed by the asset management
company over the years, which reduced the final gain.
In 2011 approximately €7.1 million had been realised, approximately €5 million from the sale of two properties (the
historic property of Neuchâtel by Banque de Dépôt et de Gestion for €3.8 million and a property located in Varese by
Banca Popolare di Bergamo) and €2.3 million from the capital gain on the partial disposal of the investee By You in
April 2011.
As a result of the performance described above, profit on continuing operations before tax
improved by +14.6% compared with the previous year to €323.1 million.
On a quarterly basis, the loss on continuing operations was €62.1 million, compared with a
profit of €80.7 million in the same quarter of 2011 and a profit of €132.4 million realised in
the third quarter of 2012.
The income statement for the year presents taxes on income for the year from continuing
operations of €121.2 million 19 , which benefited from certain non-recurring components,
detailed below:
▪
€25 million from the realignment of taxation on goodwill, recognised in the consolidated financial
statements in relation to the purchase of a controlling interest in Banca Popolare di Ancona, in
accordance with Art. 23, paragraphs 12-15 of Decree Law No. 98 of 6 th July 2011 (Law No. 111/2011)
19 In the first half of 2011 tax income of €95.9 million was reported, following the recognition of a non-recurring item amounting to
+€352.8 million, relating to the Parent, consisting of:
+€377.8 million from the realignment of taxation on goodwill and other intangible assets in accordance with Decree Law No. 98 of
6 th July 2011, converted with amendments into Law No. 111 of 15 th July 2011. This legislation allowed, in accordance with the
principles of Law No. 2 of 28 th January 2009, the recognition for tax purposes of higher values attributed to controlling interests
acquired through extraordinary transactions. The realignment was performed by the payment of a substitute tax of 16% (€525.6
million paid in November 2011), which allowed tax to be deducted on the amortisation of the amount subject to tax relief
(€3,285.3 million) at constant rates over ten years with effect from 2018 (instead of from 2013, given the deferral effected by Law
No. 228/2012). Consequently, in the first half of 2011 deferred tax assets of €903.4 million were recognised within item 290 of
the income statement, corresponding to the future benefit arising from the deduction of amortisation on the intangible assets
subject to tax relief;
-€25 million from the write-off of deferred tax assets for IRAP (local production tax) purposes, already recognised in the financial
statements as at and for the year ended 31 st December 2010. As a result of the tax deductibility of the amortisation of the
amount subject to tax relief mentioned above, the Parent did not have sufficient taxable income for IRAP purposes to recover the
deferred tax assets which had been recognised, since IRAP is not included in the tax consolidation. Consequently the conditions
for its recognition were therefore no longer met.
The increase of 0.75% in the rate for IRAP (regional production tax) introduced by Art. 23, paragraph 5 of Decree Law No. 98/2011
already mentioned, applicable to banks and financial companies and in force with effect from the tax year 2011, resulted in changes in
both current taxation (with the recognition of greater current taxes of -€16.2 million) and deferred taxation, with the recognition of -
€6.3 million (non-recurring) deriving from the adjustment of the deferred tax liabilities allocated in the financial statements as at and
for the year ended 31 st December 2010, primarily relating to intangibles brought to light during the allocation of the cost of the merger
deficit for the former Banca Lombarda e Piemontese Group.
104

▪
▪
as amended by Art. 20 of Decree Law No. 201 of 6 th December 2011 (Law No. 214/2011). Following
enactment of the Decreto Salva Italia (“Save Italy Decree”), the payment terms were re-opened with
regard to extraordinary transactions performed in 2010 and in preceding years. As already reported,
in 2011 UBI Banca had taken advantage of the measures mentioned to obtain tax relief on the higher
amounts recognised on subsidiaries when the former Banca Lombarda e Piemontese was merged into
it with regard to goodwill, brands and other intangible assets as stated in the consolidated financial
statements. In consideration of the re-opened terms which allowed a precise evaluation of the
operating and financial impacts of the operation, it was also decided to obtain tax relief in 2012 on
the goodwill recognised in the consolidated financial statements arising from the acquisition of a
controlling interest in BPA by UBI Banca (formerly BPU Banca). In return for the cost of recognising
the substitute tax at a rate of 16% (€34.8 million), it is possible to deduct the amortisation of the
amount subject to tax relief (€217.3 million) at constant rates over ten years with effect from 2018
(instead of 2013, owing to the deferral provided for by Law No. 228/2012). Consequently, in the first
half of 2012, deferred tax assets of €59.8 million were recognised within item 260 of the income
statement, corresponding to the future benefit arising from the deduction of amortisation on the
goodwill subject to tax relief;
€8.3 million resulting from tax relief in relation to non-accounting deductions existing as at 31 st
December 2011, relating to the loan impairment provision of UBI Banca (section EC of the income tax
return). Law No. 244/2007 repealed, with effect from 2008, the ability to make non-accounting
deductions from income (pursuant to article 109, paragraph 4, letter b) of the Consolidated Income
Tax Act) for depreciation and amortisation, provisions and impairment losses of a tax nature, and
introduced the ability to obtain tax relief for those deductions in order to align statutory accounting
amounts with tax accounting amounts existing as at 31 st December 2007. Since the legislation
mentioned made it possible to obtain partial tax relief on uniform categories of deductions and also in
the light of changes to the operating perimeter (with the direct disbursement of loans to customers), it
was decided to take advantage of that opportunity with regard to provisions for impairment losses on
loans, not subject to tax relief in prior years. The income statement therefore included the total
substitute tax due of €11.5 million (16% of the amount of €72.1 million subject to tax relief declared
in section EC of the 2012 income tax return) and also the proceeds from the write-off of deferred
liabilities recognised against the non-accounting deductions from the loan impairment provision as at
31 st December 2011 (€19.8 million). Owing to the foregoing, from 2012 any loan losses are deductible
according to the ordinary tax provisions;
€66.1 million relating to prior year tax credits, in view of the full deduction for corporate income tax
purposes of IRAP (local production tax) on the cost of labour from 2012, as provided for by Art. 2,
paragraph 1 quater of Decree Law No. 201/2011, converted with amendments into Law No. 214/2011
and subsequently supplemented by Art 4, paragraph 12 of Decree Law No. 16/2012, converted with
amendments into Law No. 44/2012. The decree on tax deregulation made it possible to file a
corporate income tax refund application, recalculated as a result of the deductibility mentioned above,
for prior years, for which the time limit (on 2 nd March 2012) of 48 months indicated for the refund of
direct payments had not yet expired (i.e. the tax years 2007-2011). According to the Provision of the
Director of the Tax Authorities of 17 th December 2012, which establishes the terms and conditions for
filing for such refunds, the amount of the refund for which to apply for the UBI Banca Group was
recalculated (with respect to the amount originally defined in the half-yearly accounts) for the
aforementioned annual periods.
Net of non-recurring items, taxes came to €224 million from €247.8 million before, to give an
effective tax rate of 67.21% (63.74% in 2011).
Compared to the theoretical tax rate (33.07%), the taxation levied was conditioned by the
combined effect of greater IRES and IRAP, due to:
- the partial non-deductibility of interest expense (4%), introduced by Law No. 133 of 6 th
August 2008 (9.2 percentage points);
- the higher taxation on dividends eliminated in the consolidation (4.4 percentage points);
- non tax deductible expenses, costs and provisions accounting (2.2 percentage points);
- the non-deductibility for IRAP purposes of net impairment losses on loans and staff costs
and the partial non-deductibility of other administrative expenses and depreciation and
amortisation (32.6 percentage points).
These impacts were only partially cushioned by the following: the valuation of equity
investments according to equity method, not significant for tax purposes (4.4 percentage
points), the Aiuto alla crescita economica (“Aid to economic growth”) concessions (2.6
percentage points), the deduction for IRES (corporate income tax) purposes of an amount
equal to the IRAP (regional production tax) corresponding to the taxable portion of employee
and similar personnel expenses and the flat-rate deduction of 10% (4.8 percentage points),
105

and the deduction from the IRAP taxable income of the tax amortisation of goodwill
(approximately one percentage point) and of negative components not deducted in previous
years on loans disposed of during the year (1.5 percentage points).
On a quarterly basis, (normalised) taxes decreased to €14.4 million from the €50.2 million in
the fourth quarter of 2011 and €62.2 million in the third quarter of 2012. The quarter-onquarter
performance was affected above all by the change in taxable income, which became
negative during the reporting quarter, but also by the different weight assumed during the two
periods by certain components, such as net impairment losses on loans and provisions for
risks and charges, for the purposes of their significance in calculating taxable income or loss
for IRAP (regional production tax).
As a result of the performance already reported and also of the profits earned by Group banks
and companies, profit for the year attributable to non-controlling interests (inclusive of the
effects of consolidation entries) stood at €17.3 million, compared with €28.8 million in 2011.
This change reflects the different results which contributed to the item of the companies in
which non-controlling shareholders hold shares (for example the change from profit in 2011 to
the current loss for Carime, BPA and BRE and the decreases in profits for BPCI and
Centrobanca).
On a quarterly basis, profit attributable to non-controlling interests came to €1.5 million,
compared with €9.5 million in the same quarter of 2011 and €1.4 million in the previous three
months of 2012.
Staff leaving incentive costs of €101.9 million were presented within a single item, net of taxes
and non-controlling interests. The item originated to a significant degree in the fourth quarter of
the year (€93.9 million), following the signing of the trade union agreements of 29 th November
2012 and 12 th February 2013.
These costs totalled €152 million (subject to taxes of €41.8 million, whereas the share
attributable to non-controlling interests is €8.3 million), of which:
• -€4 million was charged in connection with the General redundancy incentive offer
implemented in March 2012 and aimed at employees eligible for the benefits provided by the
Salva Italia (“Save Italy”) Decree;
• -€4.5 million 20 (net of the related staff costs for the personnel covered by the redundancy
plan) was recognised in the third quarter in connection with the “Managerial manoeuvre”;
• -€143.5 million is attributable to the contents of the trade union agreements signed on 29 th
November 2012 and 12 th February 2013.
The impairment-testing procedure performed at the end of December 2011, in accordance with IAS 36 (Impairment of
assets), no longer ensured the recoverability of the carrying amounts for goodwill and finite useful life intangibles.
Accordingly, the reclassified income statement presented net impairment losses on goodwill (item 260) and net
impairment losses on finite useful life intangibles (part of item 210) recognised during the year, totalling €2,190.9
million, within a single item stated net of taxes and non-controlling interests. These were composed of €1,865.5
million for impairment losses on goodwill and €305.9 million for impairment losses on finite useful life intangible
assets, while the remaining €19.5 million (recognised in the second quarter of the year) related to the full impairment
loss on intangible assets associated with the investment in BY YOU (partially disposed of in April 2011), following the
renegotiation of distribution agreements.
In detail, the impairment test gave rise to total impairment losses of €2,396.8 million, composed as follows:
€1,873.8 million for the total impairment loss recognised on goodwill, of which:
- €521.2 million for the full impairment loss on goodwill recognised by UBI Banca arising from the business
combination involving the former BPU Group and the former BLP Group, which took effect from 1 st April 2007;
- €1,331 million for reductions in goodwill arising on consolidation, of which €987.5 million relating to the
network banks, €234.5 million to the main product companies, €96.8 million to the other banks and €12.2
million to other minor companies;
- €21.6 million for impairment losses on goodwill recognised in the separate balance sheets arising from
previous merger transactions (€12.1 million for Banca Carime, €7.2 million for Centrobanca, €2 million for UBI
Leasing and €0.3 million for BRE);
€523 million for impairment losses on all the finite useful life intangible assets (except for those relating to assets
under custody and software): €193 million relating to brands, €241.7 million to core deposits and €88.3 million to
assets under management.
20 Estimated costs of €7.6 million had been recognised in the third quarter of 2012.
106

The following comments are based on items in the consolidated balance sheet contained in the
reclassified consolidated financial statements, on which the relative tables furnishing details are
also based.
The sections “Consolidated companies: the principal figures” and “The performance of the main
consolidated companies” may be consulted for information on individual banks and Group
member companies.
General banking business with customers:
funding
The action taken as a whole during the initial months of 2012 freed the Group from all concerns
over liquidity so that it had no need in its financial management to renew maturing medium to
long-term institutional funding.
In fact, during the first quarter of the year, due partly to a temporary easing of sovereign debt
pressures, renewed interest was seen among institutional investors in Italian bank issuers. In this
context, the Group nevertheless preferred not to make new placements, which, moreover were not
strictly necessary for the structural balance of its assets and liabilities, as it considered that
market conditions were still too costly. It was only from October onwards, given reduced pressure
on sovereign spreads and the consequent improvement in cost levels, that UBI Banca returned to
international markets with a benchmark issue of €750 million, followed by two private placements
for a total of €525 million.
In the short-term institutional segment, in which the Group operates in euro commercial paper and
French certificates of deposit (instruments issued by UBI Banca International and listed in
Luxembourg), volumes of business were further reduced due to both the specific nature of this
funding (used as a “buffer” for optimising liquidity management and overall funding) and the
impact that Italy risk was having on the yields and the durations of investments. Another factor
was the minimum rating levels stipulated by the internal policies of a number of institutional
operators.
At the same time, commercial attention was increasingly directed towards funding from ordinary
customers, a traditional strategic strength for the Group, and even more important for the future,
although in an increasingly competitve environment. In this situation, commercial action was
organised principally around the range of bond products, with a view, amongst other things, to
stabilising liabilities and around term deposits.
Net of the institutional component (including repurchase agreements with the Cassa di
Compensazione e Garanzia – a central counterparty clearing house), at the end of the year,
funding from households and companies financed 86.5% of loans and advances to customers.
Total funding
Total funding from customers
Figures in thousands o f euro
31.12.2012
A
%
30.9.2012
B
%
30.6.2012
C
%
31.3.2012
D
%
31.12.2011
E
%
Changes A/E
amount %
Direct funding 98,817,560 58.5% 100,263,876 58.7% 102,246,727 59.7% 99,443,211 57.9% 102,808,654 58.8% -3,991,094 -3.9%
Indirect funding 70,164,384 41.5% 70,665,545 41.3% 69,024,117 40.3% 72,381,158 42.1% 72,067,569 41.2% -1,903,185 -2.6%
of which: assets under
management 38,106,037 22.6% 37,969,326 22.2% 36,490,940 21.3% 37,604,598 21.9% 36,892,042 21.1% 1,213,995 3.3%
Total funding from customers 168,981,944 100.0% 170,929,421 100.0% 171,270,844 100.0% 171,824,369 100.0% 174,876,223 100.0% -5,894,279 -3.4%
Total funding net of CCG and
institutional funding 150,498,750 152,068,364 149,377,124 152,725,529 151,588,548 -1,089,798 -0.7%
Total Group funding, consisting of total amounts administered on behalf of customers,
amounted, as at 31 st December 2012 to €169 billion (-€5.9 billion compared to the end
of 2011), highlighting a progressive reduction during the year, attributable, although
107

at different rates over the various time frames, to both direct funding (-€4 billion) and
indirect funding (-€1.9 billion).
In actual fact, the trend for the
total was influenced by a series of
factors, some technical, which did
not relate to normal banking
business with customers as such,
as follows:
110,000
100,000
90,000
80,000
on the one hand, for some 70,000
institutional components of 60,000
direct funding, the failure to
50,000
renew medium to long-term
EMTN funding, reduced shortterm
activity in euro 30,000
40,000
commercial paper and French
20,000
CDs, as well as repurchase
10,000
transactions with the Cassa di
Compensazione e Garanzia
0
(CCG) to fund the portfolio of
2009
Italian government securities,
the latter meeting contingent
requirements as part of overall liquidity management;
Direct funding and indirect funding
(end of quarter totals in millions of euro)
1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q
2008 2010 2011
2012
Direct funding
Indirect funding
on the other hand, for indirect funding, the volatility which characterised the
financial markets for the whole of the first part of 2012, with signs of recovery only
firming up from September onwards. This inevitably impacted asset values (the
“market effect”).
Net of the institutional items cited above, direct funding from customers grew (+€0.8
billion), partially offsetting the decline in indirect funding. Compared to December
2011, total direct funding of €150.5 billion fell more moderately as a consequence
(-€1.1 billion).
Direct funding
As already reported above, direct Group funding, amounting to €98.8 billion,
contracted over the twelve-month period, incorporating trends in a number of factors
of an institutional nature (transactions with the Cassa di Compensazione e Garanzia
to fund the proprietary portfolio, failure to renew maturing institutional funding and
reduced activity in short-term institutional markets), net of which, the trend was
positive at +€0.8 billion.
In detail, after reaching €57.1 billion in June, amounts due to customers stood at
€53.8 billion, a reduction of €0.7 billion compared to December 2011.
The main cause of the downward trend is attributable to repurchase agreements, for
both the part relating to business with customers (which progressively fell to €0.3
billion from €1 billion) and that with counterparties through the Cassa di
Compensazione e Garanzia, which over the twelve-month period, fell from €4.6 billion
to €3.9 billion, although with fluctuating performance in the intervening periods,
reflecting the investment/disinvestment choices for the government bond portfolio and
also the improved Group liquidity position from the third quarter onwards.
During the first quarter, business with the CCG had been reduced (from €4.6 billion in December
2011 to €2.4 billion in March 2012) in parallel with the three-year liquidity acquired through the
two LTRO operations with the ECB (an operation which also provided greater stability to the
balance sheet liability structure). During the second quarter, on the other hand, recourse to the
Cassa di Compensazione e Garanzia was increased again (€7.2 billion in June) in order to
finance short-term investments. From the second half of the year onwards, a new phase of
108

educing these operations began, bringing them down to a total of €3.9 billion in December 2012,
as a consequence of partial divestments from the trading portfolio (all concentrated during the
third quarter) and the positive liquidity position of the Group
Considered net of repurchase agreements with the Cassa di Compensazione e
Garanzia, amounts due to customers were stable at €49.8 billion year-on-year.
For other forms of funding, a change in the mix of investment choices by customers
occurred, out of current accounts, which fell by €0.9 billion over the twelve-month
period to €45.1 billion, into term deposits (+€1.8 billion to €3.2 billion) partly in
relation to the commercial initiatives already in place from the end of 2011 in order to
exploit fixed term forms of funding, above all from private individual customers.
It should moreover be considered that the trend for current accounts was influenced
by changes, which varied during the year, in liquid assets deposited with UBI Banca
by UBI Pramerica 1 , (stable in the fourth quarter but down €0.2 billion compared to
December 2011), by the CCG (-€1.1 billion compared to September, -€0.9 billion
compared to the end of 2011), as well as by corporate customers (-€0.2 billion over the
last three months, +€0.3 billion over the twelve-month period).
Finally, mention must be made of growth in IWBank funding, the Group’s internet
bank (+€1 billion year-on-year), the result, amongst other things, of the growing
appreciation by customers for the products and services provided.
Direct funding from customers
Changes
31.12.2012 % 31.12.2011 %
Figures in thousands of euro amount %
Current accounts and deposits 45.149.448 45,7% 46.065.651 44,8% -916.203 -2,0%
Term deposits 3.184.368 3,2% 1.396.835 1,4% 1.787.533 128,0%
Financing 4.732.552 4,8% 6.022.955 5,8% -1.290.403 -21,4%
- repurchase agreements 4.273.890 4,3% 5.568.351 5,4% -1.294.461 -23,2%
of which: repos with the CCG 3.944.510 4,0% 4.615.754 4,5% -671.244 -14,5%
- other 458.662 0,5% 454.604 0,4% 4.058 0,9%
Other payables 692.039 0,7% 945.850 0,9% -253.811 -26,8%
Total amounts due to customers (item 20 liabilities) 53.758.407 54,4% 54.431.291 52,9% -672.884 -1,2%
Bonds 41.996.277 42,5% 44.429.027 43,2% -2.432.750 -5,5%
Certificates of deposit 2.449.278 2,5% 2.447.560 2,4% 1.718 0,1%
Other certificates 613.598 0,6% 1.500.776 1,5% -887.178 -59,1%
Total debt securities issued (item 30 liabilities) 45.059.153 45,6% 48.377.363 47,1% -3.318.210 -6,9%
of which:
securities subscribed by institutional customers: 14.538.684 14,7% 18.671.921 18,1% -4.133.237 -22,1%
- The EMTN programme (*) 7.091.040 7,2% 10.292.174 10,0% -3.201.134 -31,1%
- The French certificates of deposit programme 487.838 0,5% 750.616 0,7% -262.778 -35,0%
- The euro commercial paper programme 273.574 0,3% 1.044.055 1,0% -770.481 -73,8%
- The covered b ond programme 6.346.208 6,4% 6.128.355 6,0% 217.853 3,6%
- Preference shares (**) 340.024 0,3% 456.721 0,4% -116.697 -25,6%
bonds subscribed by ordinary customers 28.395.864 28,7% 27.749.274 27,0% 646.590 2,3%
- of the Group:
issued by UBI Banca 7.812.713 7,9% 6.856.713 6,7% 956.000 13,9%
issued by the network banks 16.654.669 16,8% 16.624.904 16,2% 29.765 0,2%
- external distribution networks:
issued by Centrob anca 3.928.482 4,0% 4.267.657 4,1% -339.175 -7,9%
Total direct funding 98.817.560 100,0% 102.808.654 100,0% -3.991.094 -3,9%
Due to customers net of the CCG 49.813.897 49.815.537 -1.640 0,0%
Total direct funding net of the CCG and institutional funding 80.334.366 79.520.979 813.387 1,0%
(*) The corresponding nominal amounts were €6.995 billion (€182 million subordinated) as at 31 st December 2012 and €10.186 billion (€212
million subordinated) as at 31 st December 2011. The amounts indicated in the table do not include two private placements, for a total of
€88 million, of an “intragroup” nature and therefore eliminated in the consolidation (€93 million as at 31 st December 2011 also due to a
partial repurchase).
(**) The preference shares were issued, in nominal terms, by BPB Capital Trust for €300 million, by Banca Lombarda Preferred Securities Trust
for €155 million and by BPCI Capital Trust for €115 million. Following the Public Exchange Offer of 25 th June 2009, the Public Purchase
Offer, concluded on 12 th March 2012 and further repurchases done afterwards, the nominal values of the debt securities issued were
€182.095 million for the issue by BPB Capital Trust, €90.314 million for that by Banca Lombarda Preferred Securities Trust and €65.338
million for BPCI Capital Trust.
1 Following an agreement signed in April 2011, the Parent of UBI Banca Group is the holder of the deposits intended for
the investment requirements of the number of funds managed by the asset management company: Euro Breve Termine,
Euro Cash (both from May 2011 onwards) and Portafoglio Prudente (from August 2011 onwards).
109

Debt securities issued, over 90% of which represent bonds, fell to €45.1 billion, with
a progressive contraction over the first three quarters of 2012 due to the downward
trend in funding from bonds and other securities, with a partial recovery in the final
months of the year.
Bonds amounted to €42 billion, affected by the maturities of the EMTN programme,
which were concentrated above all during the first half of the year, while other
securities (€0.6 billion compared to €1.5 billion outstanding at the end of 2011)
substantially reflected the trend for euro commercial paper.
Certificates of deposit, which were stable at €2.4 billion, almost unchanged compared
to the previous year, actually represented differring trends within the total: the French
certificates component, which is used for short-term institutional funding and liquidity
optimisation requirements, fell by €0.3 billion. Similarly, certificates swapped into yen
(€0.8 billion), fell compared to December 2011 (-€0.3 billion). The remaining types of
funding on the other hand benefited from renewed interest among customers, after
changes in taxation in effect from 1 st January 2012 onwards, reaching a total of €1.1
billion at the end of the financial year, with an increase of €0.6 billion since the start
of the year.
In terms of types of customers, funding from institutional customers totalled €14.5
billion, compared to €18.7 billion at the end of 2011. As already reported previously,
the decrease in the item was affected mainly by the partial renewal in the EMTN
programme (only during the last quarter of the year) of maturing notes, although also
by a progressive reduction in transactions in short-term markets, used as a buffer for
the optimisation of liquidity management, where, moreover, at least until September,
Italy risk influenced the yields and durations of investments, partly in relation to the
the minimum rating levels required by the internal policies of several institutional
operators.
In detail, institutional funding as at 31 st December 2012 was composed as follows:
EMTN instruments (Euro Medium Term Notes) amounting to €7.1 billion (of which
only €0.2 billion subordinated), issued as part of a programme for a maximum
issuance of €15 billion 2 .
These decreased by €3.2 billion over twelve months, which was in fact attributable
to the positive liquidity and structural balance of the Group, which made it possible
not to renew maturing securities, under market conditions which were still
considered too costly.
It was not until October 2012, after 18 months, that UBI Banca started to return to
international markets with three new issuances for a total of €1.275 billion
nominal, which partially replaced maturities, redemptions and repurchases during
the year, for total of €4.46 billion nominal.
On 30 th October a benchmark issue of €750 million with a three-year maturity and a fixed
coupon of 3.75% was placed by a public offer. This was followed by two private placements,
the first, for €200 million on 28 th November and the second, for €325 million on 11 th
December, both at a variable rate and maturing in 2013.
Covered bonds, amounting to €6.3 billion (+€0.2 billion over twelve months, the
result of a change in book value, with no issues made during the year).
As part of the “multioriginator” programme, backed by residential mortgages, with a
maximum ceiling of €10 billion, UBI Banca has eight covered bonds outstanding for
a nominal value of €5.717 billion, after three amortisations for a total of €33
million 3 . The securities are listed in London.
2 All the securities are traded in London, with the sole exception of the securities issued by the former Banca Lombarda e
Piemontese, which are listed in Luxembourg.
3 Considering the large pool of segregated assets available from UBI Finance, on 22 nd February 2012 three new issues were
made for an overall amount of €750 million, which were not placed on the market but used to strengthen the pool of
eligible assets with the Central Bank. At the same time, a second covered bond programme backed by commercial
110

As at 31 st December 2012, assets consisting of residential mortgages transferred to UBI
Finance to back the issues made, amounted to €11.2 billion, of which 22.9% originated by
Banca Popolare di Bergamo, 20.5% by Banco di Brescia, 18.9% by Banca Popolare Commercio
e Industria, 15.6% by Banca Regionale Europea, 11% by Banca Popolare di Ancona, 7% by
Banca Carime, 2.4% by Banca di Valle Camonica and the remaining 1.7% by UBI Banca
Private Investment.
The cover pool was again highly fragmented, including over 157,000 mortgages with an
average residual debt of €71,200, of which 72.1% in the north of Italy, and in particular, in
Lombardy (51% of the total).
On 1 st February 2012, a transfer of assets was concluded by Banca Popolare di Bergamo,
Banco di Brescia, Banca Carime and UBI Banca Private Investment. They transferred
mortgages already held as assets on their balance sheets for a total of €1.171 billion of
remaining principal debt to the special purpose company.
On 1 st October 2012, a further transfer of assets was concluded by BRE, the former BSG, BPA,
BPCI and BVC, which transferred mortgages for a total remaining nominal principal debt of
€1.4 billion held on their balance sheets to UBI Finance.
French certificates of deposit for €488 million, issued by UBI Banca International
as part of a €5 billion programme, listed in Luxembourg, and euro commercial
paper of €274 million, issued by UBI Banca International as part of a €6 billion
programme, listed in Luxembourg;
preference shares of €340 million, consisting of shares still in issue after the public
exchange offer of June 2009 and the more recent operation in February and March
2012.
Bond funding from ordinary customers, consisting of bonds subscribed by customers of
the network banks, increased over the twelve-month period by €0.6 billion rising to
€28.4 billion, due to an issuance programme by the Parent concentrated above all in
the last part of the year.
Due to 18 new placements for a total nominal amount of €1.8 billion (of which two, for
an amount of €1.2 billion, with a lower tier two subordination clause), at the end of
the year, UBI Banca’s holding of listed bonds had risen to €7.8 billion, with an annual
increase of around €1 billion (+€1.5 billion in the fourth quarter alone) and an issued
to maturity ratio of 191%. Bond funding from the network banks nevertheless
remained stable at €16.6 billion, reflecting a substantial balance between issuances
(overall €5.6 billion) and redemptions and repurchases.
Centrobanca funding, mainly from non-captive customers, continued to decline in the
absence of new issuance (-€0.3 billion year-on-year).
Excluding Centrobanca, during 2012, UBI Banca securities placed by the network
banks totalled €7.4 billion nominal, against maturities, repurchases and amortisation
repayments of €6.5 billion nominal, with an issued to maturity ratio of 113%.
During 2013, a strategic change is planned in the Group’s medium to long-term direct
funding strategy, with the predominant concentration of bond issues by UBI Banca,
while the network banks will focus primarily on placements with customers. This will
favour the progressive reduction of the number of securities in issue, to the benefit of
their liquidity, as a result of increasing the average size of the issues placed and with
greater efficiency also in the management of hedges where used.
mortgages was structured with the aim of making self-retained issues, i.e. intended to create new eligible assets. At the
end of May, the first issue for a nominal amount of €1.8 billion was made (six-year maturity), while a second issue was
completed at the end of October for a nominal amount of €0.5 million (ten-year maturity). In so far as these were
repurchased by the same Parent, on the basis of IAS/IFRS standards, such liabilities are not recorded in the accounts.
111

Maturities of bonds outstanding as at 31st December 2012
Nominal amounts in millions of euro
1st Quarter
2013
2nd Quarter
2013
3rd Quarter
2013
4th Quarter
2013
2014 2015 2016
Subsequent
years
Total
UBI BANCA* 1,557 56 1,366 1,975 4,726 2,476 2,557 5,692 20,405
of which: EMTNs 1,424 - 642 1,663 2,076 965 100 125 6,995
Covered bonds ** - 25 - 25 51 551 1,801 3,264 5,717
Network banks 1,186 1,182 1,441 1,405 5,805 3,401 940 940 16,300
Other banks in the Group 5 7 23 56 422 448 2,304 630 3,895
Total 2,748 1,245 2,830 3,436 10,953 6,325 5,801 7,262 40,600
* The EMTN subordinated loan was placed on the exercise date of the call option (October 2013).
** The first half-yearly repayment, of €11 million, took place in the fourth quarter of 2011 and the second and third repayments, also for €11
million, took place respectively during the second and fourth quarters of 2012.
Listed securities
Bonds listed on the MOT (electronic bond market)
Nominal amount of
Book value as at
ISIN number issue 31.12.2012 31.12.2011
IT0001197083 Centrobanca zero coupon 1998-2018 L. 800 billion € 164,047,404 € 157,100,369
IT0001257333 Centrobanca 1998/2014 reverse floater L. 300 billion € 89,251,808 € 106,581,450
IT0001267381 Centrobanca 1998/2018 reverse floater capped L. 320 billion € 132,468,039 € 121,608,918
IT0001278941 Centrobanca 1998/2013 equity linked coupon L. 100 billion € 38,099,909 € 41,153,616
IT0001300992 Centrobanca 1999/2019 step dow n indicizzato al tasso sw ap euro 10 anni € 170,000,000 € 119,683,666 € 117,189,043
IT0001312708 Centrobanca 1999/2019 step dow n eurostability bond € 60,000,000 € 62,389,248 € 54,765,695
IT0003834832 Centrobanca 2005/2013 inflazione Italia con leva € 16,280,000 € 4,892,524 € 9,826,128
IT0004424435 UBI subordinato low er tier 2 a tasso variabile con ammortamento 28.11.2008-2015 € 599,399,000 € 356,528,893 € 474,738,713
IT0004457070 UBI subordinato low er tier 2 fix to float con rimborso anticipato 13.3.2009-2019 € 370,000,000 € 381,377,159 € 383,885,598
IT0004457187 UBI subordinato low er tier 2 a tasso variabile con ammortamento 13.3.2009-2016 € 211,992,000 € 168,290,705 € 209,976,428
IT0004497043 Unione di Banche Italiane Scpa tasso misto 30.6.2009-2014 € 219,990,000 € 218,273,272 € 217,147,237
IT0004497050 UBI subordinato low er tier 2 fix to float con rimborso anticipato 30.6.2009-2019 € 365,000,000 € 372,171,144 € 370,940,321
IT0004497068 UBI subordinato low er tier 2 a tasso variabile con ammortamento 30.6.2009-2016 € 156,837,000 € 124,233,447 € 154,914,482
IT0004496557 Unione di Banche Italiane Scpa tasso misto 7.7.2009-2014 € 200,000,000 € 198,834,101 € 198,215,118
IT0004517139 Unione di Banche Italiane Scpa tasso misto 4.9.2009-2013 € 84,991,000 € 84,923,166 € 84,809,448
IT0004572860 UBI subordinato low er tier 2 a tasso variabile con ammortamento 23.2.2010-2017 € 152,587,000 € 151,575,804 € 151,473,168
IT0004572878 UBI subordinato low er tier 2 a tasso fisso 3,10% con ammortamento 23.2.2010-2017 € 300,000,000 € 314,157,916 € 309,378,048
IT0004626617 IW Bank Obbligazioni agosto 2015 con opzione di tipo call asiatica (*) € 1,054,000 € 1,010,953 € 1,081,021
IT0004642382 IW Bank Obbligazioni ottobre 2015 con opzione di tipo call asiatica - II tranche (*) € 940,000 € 896,115 € 923,710
IT0004645963 UBI subordinato low er tier 2 a tasso fisso 4,30% con ammortamento 5.11.2010-2017 € 400,000,000 € 410,797,107 € 397,739,866
IT0004651656 Unione di Banche Italiane Scpa tasso fisso 2,30% 2.12.2010-2013 Welcome Edition € 81,322,000 € 81,264,633 € 81,041,477
IT0004652043 Unione di Banche Italiane Scpa tasso misto 2.12.2010-2014 € 174,973,000 € 174,136,269 € 173,997,117
IT0004710981 Unione di Banche Italiane Scpa tasso fisso 3,65% 20.5.2011-20.11.2013 € 5,787,000 € 5,911,171 € 5,914,831
IT0004713654 Unione di Banche Italiane Scpa tasso misto 10.6.2011-2015 € 120,000,000 € 123,276,629 € 121,935,110
IT0004718489 UBI subordinato low er tier 2 tasso fisso 5,50% con ammortamento 16.6.2011-2018 Welcome Edition € 400,000,000 € 423,622,244 € 412,216,859
IT0004723489 UBI subordinato low er tier 2 tasso fisso 5,40% con ammortamento 30.6.2011-2018 € 400,000,000 € 423,855,780 € 412,473,438
IT0004767742 UBI subordinato low er tier 2 tasso misto 18.11.2011-2018 Welcome Edition € 222,339,000 € 223,629,064 € 219,055,454
IT0004777550 Unione di Banche Italiane Scpa tasso fisso 5% 9.12.2011-9.6.2014 € 203,313,000 € 206,227,976 € 204,273,814
IT0004777568 Unione di Banche Italiane Scpa tasso fisso 5% 30.12.2011-30.6.2014 Welcome Edition € 176,553,000 € 178,073,154 € 176,231,023
IT0004779713 Unione di Banche Italiane Scpa tasso fisso 4,50% 30.12.2011-30.6.2014 € 287,722,000 € 289,994,069 € 286,920,098
IT0004780711 Unione di Banche Italiane Scpa tasso fisso 5% 29.12.2011-29.6.2014 € 95,109,000 € 95,605,512 € 94,660,143
IT0004785876 Unione di Banche Italiane Scpa tasso fisso 4,3% 17.2.2012-17.3.2014 € 19,991,000 € 20,358,184 -
IT0004785892 Unione di Banche Italiane Scpa tasso fisso 3,8% 31.1.2012-28.2.2014 € 25,000,000 € 25,464,290 -
IT0004796030 Unione di Banche Italiane Scpa tasso variabile 30.3.2012-30.3.2014 € 20,000,000 € 20,000,535 -
IT0004796048 Unione di Banche Italiane Scpa tasso fisso step up 3,50% 30.3.2012-30.3.2014 € 40,000,000 € 40,388,587 -
IT0004803968 Unione di Banche Italiane Scpa tasso variabile 23.4.2012-23.4.2014 € 73,022,000 € 73,285,049 -
IT0004804560 Unione di Banche Italiane Scpa tasso fisso step up 3% 30.4.2012-30.4.2014 € 33,438,000 € 34,344,849 -
IT0004815368 Unione di Banche Italiane Scpa tasso fisso 4% 8.6.2012-8.6.2015 Welcome Edition € 15,371,000 € 15,481,581 -
IT0004815715 Unione di Banche Italiane Scpa tasso fisso 3,80% 15.6.2012-15.6.2016 € 20,224,000 € 20,333,588 -
IT0004841778 UBI subordinato low er tier 2 tasso misto 8.10.2012-8.10.2019 Welcome Edition € 200,000,000 € 201,603,727 -
IT0004842370 UBI subordinato low er tier 2 tasso fisso con ammortamento 6% 8.10.2012-8.10.2019 € 970,457,000 € 985,224,678 -
IT0004851710
IT0004851728
IT0004854490
Unione di Banche Italiane Scpa tasso variabile 23.11.2012-23.11.2016 Welcome Edition
"UBI Comunità per l'imprenditoria sociale del sistema CGM" € 17,552,000 € 17,624,825 -
Unione di Banche Italiane Scpa tasso fisso step up 4,00% 19.10.2012-19.10.2016 Welcome Edition
"UBI Comunità per la Comunità di Sant'Egidio" € 20,000,000 € 20,361,336 -
Unione di Banche Italiane Scpa tasso misto 7.12.2012-7.12.2015 Welcome Edition
"Progetto T2 Territorio per il Territorio UBI Banca e Assolombarda" € 18,550,000 € 18,601,359 -
IT0004855554 Unione di Banche Italiane Scpa tasso fisso 4% 30.11.2012- 30.11.2014 Welcome Edition € 34,966,000 € 35,017,404 -
IT0004855562 Unione di Banche Italiane Scpa tasso fisso 4% 23.11.2012-23.12.2014 € 99,991,000 € 100,393,415 -
IT0004865579 Unione di Banche Italiane Scpa tasso fisso 3% 3.12.2012-3.12.2014 € 121,440,000 € 121,435,076 -
IT0004867310 Unione di Banche Italiane Scpa tasso fisso 3,50% 7.12.2012-7.6.2015 € 68,189,000 € 68,145,376 -
IT0004869860
Unione di Banche Italiane Scpa tasso fisso step up 3,00% 31.12.2012-31.12.2015 WE UBI Comunità per
Fondazione Umberto Veronesi € 20,000,000 € 20,000,000 -
IT0004874985 Unione di Banche Italiane Scpa tasso fisso step up 3,00% 31.1.2013-31.1.2017 € 157,532,000 - -
IT0004874993 Unione di Banche Italiane Scpa tasso fisso 3,50% 31.1.2013-31.1.2016 Welcome Edition € 54,419,000 - -
IT0004883762 Unione di Banche Italiane Scpa tasso fisso step up 1,50% 8.2.2013-8.2.2016 € 45,230,000 - -
IT0004884208 Unione di Banche Italiane Scpa tasso fisso 1,60% 8.2.2013-8.2.2015 € 43,977,000 - -
IT0004884539 Unione di Banche Italiane Scpa tasso fisso 1,70% 8.2.2013-8.8.2015 € 13,145,000 - -
IT0004884745 Unione di Banche Italiane Scpa tasso misto 8.2.2013-8.2.2016 € 49,045,000 - -
IT0004883770 Unione di Banche Italiane Scpa tasso variabile 8.2.2013-8.2.2015 € 51,120,000 - -
IT0004884729 Unione di Banche Italiane Scpa tasso fisso 2,30% 8.2.2013-8.2.2015 Welcome Edition € 13,249,000 - -
IT0004884679 Unione di Banche Italiane Scpa tasso misto 8.2.2013-8.2.2016 € 102,898,000 - -
(*)The figures relate to bonds outstanding, that is net of repurchases by the company itself. On 9th January 2013 IW Bank launched a public tender purchase offer – concluded on 29th January –on the bonds in issue for the two listed
issues, designed to remove them from the listing. With a provision of 7th January 2013, Borsa Italiana removed them from the listing as of 6th March 2013 and as a consequence the company lost its status as a listed issuer.
112

Listed securities (contd.)
Convertible bonds listed on the MOT (electronic bond market)
ISIN number
Nominal amount of
issue
31.12.2012 31.12.2011
IT0004506868 UBI 2009/2013 convertibile con facoltà di rimborso in azioni € 639,145,872 € 655,465,003 € 653,777,805
Covered bonds listed on the London Stock Exchange
ISIN number
Nominal amount of
issue
31.12.2012 31.12.2011
IT0004533896 UBI Covered Bonds due 23 September 2016 3,625% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,096,717,624 € 1,068,507,939
IT0004558794 UBI Covered Bonds due 16 December 2019 4% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,145,948,084 € 1,081,847,471
IT0004599491 UBI Covered Bonds due 30 April 2022 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 216,118,631 € 239,418,111
IT0004619109 UBI Covered Bonds due 15 September 2017 3,375% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,078,025,809 € 1,028,594,052
IT0004649700 UBI Covered Bonds due 18 October 2015 3,125% guaranteed by UBI Finance Srl € 500,000,000 € 523,119,513 € 510,433,699
IT0004682305 UBI Covered Bonds due 28 January 2021 5,25% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,202,660,589 € 1,131,286,542
IT0004692346 UBI Covered Bonds due 22 February 2016 4,5% guaranteed by UBI Finance Srl € 750,000,000 € 832,783,878 € 817,037,468
IT0004777444 UBI Covered Bonds due 18 November 2021 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 250,833,411 € 251,229,559
Innovative equity instruments (preference shares) listed on international markets
ISIN number
Luxembourg
XS0123998394
XS0131512450
London
Nominal amount of
issue
31.12.2012 31.12.2011
Non-cumulative Fixed/Floating Rate Guaranteed Trust Preferred Securities
Banca Popolare di Bergamo Capital Trust € 300,000,000 € 183,572,879 € 229,648,799
9% Non-cumulative Guaranteed Trust Preferred Securities Banca Popolare Commercio e Industria Capital € 115,000,000 € 65,787,479 € 101,929,335
Trust
XS0108805564 Step-Up Non-voting Non-cumulative Trust Preferred Securities Banca Lombarda Preferred Securities Trust € 155,000,000 € 90,663,343 € 125,142,835
The list does not include the numerous EMTN issues quoted in London and Luxembourg, nor the securities resulting from securitisations
carried out for internal purposes by UBI Leasing, Banco di Brescia, Banca Popolare di Bergamo, Banca Popolare Commercio e Industria, Banca
Popolare di Ancona and by the former B@nca 24-7, all listed on the Dublin stock exchange, nor the issuance of French certificates of deposit
and of euro commercial paper, listed in Luxembourg.
***
Geographical distribution of direct funding from
customers by region of location of the branch
(excluding repurchase agreements and bonds) (*)
Percentage of total 31.12.2012 31.12.2011
Lombardy 61.77% 59.14%
Piedmont 7.65% 8.02%
Latium 6.90% 8.54%
Apulia 4.42% 4.71%
Calabria 4.35% 4.50%
Marches 3.93% 3.97%
Campania 3.74% 3.88%
Liguria 2.45% 2.42%
Emilia Romagna 1.19% 1.23%
Veneto 1.00% 1.01%
Basilicata 0.97% 0.95%
Umbria 0.53% 0.52%
Abruzzo 0.45% 0.42%
Friuli Venezia Giulia 0.22% 0.26%
Tuscany 0.21% 0.19%
Molise 0.17% 0.18%
Valle d'Aosta 0.03% 0.03%
Trentino Alto Adige 0.02% 0.02%
Total 100.00% 100.00%
Lastly, the table “Geographical distribution
of funding from customers by region of
location of the branch” illustrates the
geographical distribution of traditional
funding (consisting of current accounts,
savings deposits and certificates of deposit)
in Italy. The data shows an increase in the
already significant geographical
concentration of the Group in North-west
regions, where the network banks are most
concentrated (71.9%, compared to 69.6% in
December 2011), and in Lombardy in
particular, with a share which rose to
61.8% (from 59.1%), also by virtue of the
growth in funding by IWBank.
North 74.3% 72.1%
- North West 71.9% 69.6%
- North East 2.4% 2.5%
Central 11.6% 13.2%
South 14.1% 14.7%
(*) The aggregates relate to banks only.
113

Indirect funding and assets under management
Indirect funding from ordinary customers
31.12.2012 % 31.12.2011 %
Changes
Figures in thousands of euro amount %
Assets under custody 32,058,347 45.7% 35,175,527 48.8% -3,117,180 -8.9%
Assets under management 38,106,037 54.3% 36,892,042 51.2% 1,213,995 3.3%
Customer portfolio management 7,744,074 11.0% 7,898,346 11.0% -154,272 -2.0%
of which: fund based instruments 1,642,689 2.3% 1,699,935 2.4% -57,246 -3.4%
Mutual investment funds and SICAV’s 19,102,247 27.2% 17,250,549 23.9% 1,851,698 10.7%
Insurance policies and pension funds 11,259,716 16.1% 11,743,147 16.3% -483,431 -4.1%
of which: Insurance policies 11,050,312 15.7% 11,545,015 16.0% -494,703 -4.3%
Total indirect funding from ordinary customers 70,164,384 100.0% 72,067,569 100.0% -1,903,185 -2.6%
At the end of December,
indirect funding amounted to
€70.2 billion, down €1.9 billion
compared to the €72.1 billion in
2011 (-2.6%).
The overall trend actually
represents the opposing
performances by assets under
management, which rose to
€38.1 billion (+€1.2 billion) and
assets under custody, which fell
to €32.1 billion (-€3.1 billion, of
which -€2.6 billion in the first
half of the year 4 ), apparently
extending a declining trend,
substantially in place since the
third quarter of 2011.
It should nevertheless be
considered that the performance
of assets under custody was
impacted by customer choices,
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Indirect funding
(end of quarter totals in millions of euro)
1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q
2008 2009 2010 2011 2012
Assets under management
Assets under custody
where these translated into the reallocation of investments towards managed products
or forms of direct funding (listed bonds issued by UBI Banca).
Assets under management, which recovered during the second part of the year after
the decline between April and June, the share of which rose to 54.3%, were driven by
mutual investment funds and Sicavs (+€1.9 billion to €19.1 billion), which benefited,
on the one hand, from a recovery in financial asset prices that consolidated from
September onwards, and on the other, by the positive results of the placement (overall
€2.7 billion) of five new Sicavs of UBI Pramerica: Cedola Certa 2013-2016, Protezione e
Crescita 2017, Focus Italia, Mercati Emergenti and Cedola Certa 2013-2017 5 .
The favourable trend in mutual investment funds and Sicavs, representing half of
assets under management, more than offset the reduction in insurance policies and
pension funds (-€0.5 billion to €11.3 billion), entirely attributable to the insurance
sector, and a modest decline in customer portfolio management (-€0.2 billion to €7.7
billion), mitigated moreover by a partial recovery during the second half of the year
(+€0.1 billion).
4 The negative change in the first half of the year must also be viewed with regard to the departure of a significant private
position.
5 In January 2013 the placement of the “UBI Sicav Global Dynamic Allocation” funds were closed for a further €0.3 billion.
114

* * *
With regard to the periodic surveys carried out by Assogestioni, from the “Monthly map of assets
under management” of June 2012 onwards, the figure for assets under management also
includes, in view of their nature, management mandates granted by UBI Banca Group to
Pramerica Financial – a brand used by Prudential Financial Inc. (USA) – UBI Banca’s partner for
assets under management, via UBI Pramerica SGR (as at 31 st December 2012, €3.6 billion in
mutual investment funds and Sicavs, of which €1.5 billion in equity funds and €2.1 billion in bond
funds). This modification ensures a more consistent representation of the actual assets under
management of the UBI Banca Group.
Relative market shares as at 31 st December 2011 were thus recalculated to make them consistent
with those at the end of 2012.
With regard to the Mutual Investment Fund and Sicav sector, at the end of December,
the Assogestioni 6 data on the asset management companies of the UBI Banca Group
indicated the following for ASSETS UNDER DIRECT MANAGEMENT:
• negative net inflows in 2012 of around €90 million, corresponding to -0.5% of
managed assets at the end of 2011 (at sector level, on the other hand, net inflows
were positive by €1.2 million, corresponding to 0.3% of managed assets at the end
of 2011);
• favourable performance of assets under management (+€1.2 billion; +7.1%) which
compares with similar performance at sector level (+€60.5 billion; +14.4%). Both
cases recorded a particularly favourable trend during the second half of the year:
+€1.5 billion (+9.6%) for the UBI Banca Group and +€54.1 billion (+12.6%) for the
Assogestioni sample;
• net assets under management of €17.7 billion, ensuring the Group seventh place
among sector operators, with a market share of 3.67%, down from 3.91% a year
earlier.
It should nevertheless be recalled that the Assogestioni sample representing the sector also
includes non-banking operators; this resulted in market share figures for the UBI Banca
Group in the assets under management sector which are inherently lower than those
expressed with regard to indirect funding, loans and branches (see the previous
section“Distribution network and market positioning”). Limiting the analysis solely to banks,
the UBI Banca Group’s market share as at 31 st December 2012 for Mutual Investment
Funds and Sicavs was 5.86% (5.68% at the end of 2011), placing the Group in fourth
position among operators in the sector.
Fund assets (including assets managed for the UBI Banca Group under a mandate)
UBI Banca Group
31.12.2012 % 31.12.2011 %
Changes
Figures in millions of euro amount %
Equities 2,276 12.9% 2,364 14.3% -88 -3.7%
Balanced 1,270 7.2% 1,293 7.8% -23 -1.8%
Bond 11,309 63.9% 9,387 56.9% 1,922 20.5%
Monetary funds 2,214 12.5% 2,782 16.9% -568 -20.4%
Flexible 615 3.5% 612 3.7% 3 0.5%
Hedge funds - - 67 0.4% -67 -100.0%
Total (a) 17,684 100.0% 16,505 100.0% 1,179 7.1%
Sector
31.12.2012
%
31.12.2011
%
Changes
Figures in millions of euro amount %
Equities 99,198 20.6% 94,001 22.3% 5,197 5.5%
Balanced 20,727 4.3% 20,061 4.8% 666 3.3%
Bond 249,051 51.6% 182,930 43.4% 66,121 36.1%
Monetary funds 32,358 6.7% 48,816 11.6% -16,458 -33.7%
Flexible 67,551 14.0% 61,175 14.5% 6,376 10.4%
Hedge funds 7,088 1.5% 9,495 2.2% -2,407 -25.4%
Unclassified 6,232 1.3% 5,208 1.2% 1,024 19.7%
TOTAL (B) 482,205 100.0% 421,686 100.0% 60,519 14.4%
MARKET SHARE OF THE UBI BANCA GROUP (a)/(b) 3.67% 3.91%
6 Assogestioni, “Monthly map of Assets under management”, 4 th quarter 2012.
115

The summary data given in the table confirms the prudent approach of the Group’s
customers, showing the following over the twelve month period:
• a high and stable share for low-risk categories of funds (monetary and bond funds),
accounting overall for 76.4% of the total, compared to 58.3% for the sector. For the
UBI Banca Group in particular, as well as for the Assogestioni sample, a lower
percentage of monetary funds was recorded (-4.4% and -4.9% respectively) in
favour of the bond components (+7%; + 8.2% sector);
• a slightly declining share of equity funds, which was consistently below the
reference sample (12.9% against 20.6%);
• reduction to zero of investments in hedge funds during the first quarter (a 1.3%
share at sector level for these latter funds at the end of the year).
* * *
On the other hand, with regard to ASSETS UNDER MANAGEMENT NET OF GROUP FUNDS,
which include collective instruments and customer portfolio management, at the end
of the fourth quarter, the UBI Banca Group was in eighth position among sector
operators and in seventh among Italian groups, with assets of €27.2 billion, of which
€5.6 billion attributable to institutional customers, and a market share of 2.44%,
down compared to December 2011 (2.97%).
Restricting the analysis solely to banks, UBI Banca Group’s market share as at 31 st December
2012 was 5.11% (4.97% at the end of 2011), placing the Group in fourth place among sector
operators.
116

General banking business with customers:
lending
Performance of the loan portfolio
Composition of loans to customers
of which
of which Changes
31.12.2012 %
31.12.2011 %
Figures in thousands of euro deteriorated
deteriorated amount %
Current account overdrafts 12.875.334 13,9% 1.343.890 12.907.301 13,0% 1.151.331 -31.967 -0,2%
Reverse repurchase agreements 618.901 0,7% - 923.859 0,9% - -304.958 -33,0%
Mortgage loans and other medium to long-term financing 54.226.909 58,4% 3.931.236 56.238.200 56,4% 3.172.375 -2.011.291 -3,6%
Credit cards, personal loans and salary-backed loans 5.058.147 5,4% 472.210 5.527.788 5,6% 206.948 -469.641 -8,5%
Finance leases 7.914.765 8,5% 1.250.191 8.886.514 8,9% 937.571 -971.749 -10,9%
Factoring 2.752.379 3,0% 303.609 3.199.870 3,2% 62.427 -447.491 -14,0%
Other transactions 9.431.048 10,1% 803.035 11.797.162 11,8% 748.232 -2.366.114 -20,1%
Debt instruments: 10.486 0,0% 1.003 209.076 0,2% 1.000 -198.590 -95,0%
- structured instruments - - - 8.893 0,0% - -8.893 -100,0%
- other debt instruments 10.486 0,0% 1.003 200.183 0,2% 1.000 -189.697 -94,8%
Total loans and advances to customers 92.887.969 100,0% 8.105.174 99.689.770 100,0% 6.279.884 -6.801.801 -6,8%
At the end of December, lending to customers amounted to €92.9 billion, down by 6.8% yearon-year
(-€6.8 billion), compared to -1.8% reported by the Bank of Italy for the sector
nationally to the private sector. This comparison was in fact affected by the impacts of actions
which the Group had already started to take to a significant degree from the closing months of
2011 onwards. The contraction in the portfolio continued during the second part of 2012,
although at levels more in line with those of other Italian banks: loans fell in fact by 2.6% over
six months and by 2.1% in the fourth quarter, compared to changes at sector level of -1.4%
and -0.3% respectively.
The overall trend is still suffering significantly from the adverse economic environment,
characterised by a persistent ongoing recession in the real economy, with a consequent fall in
consumption, production and investments, reflected in a reduction of demand from
households, but above all from businesses.
Actions were undertaken on the Group’s loan portfolio which influenced its performance and
also affected it structurally. These included the following:
• the progressive discontinuation of business with third party networks and the consequent
reductions in loans to non-captive customers, that is affecting all of the product companies
as well as B@nca 24-7 operations merged into the Parent, for the purpose of preserving
credit quality by withdrawing from higher risk businesses (-€1.8 billion over the twelvemonth
period);
• the reorganisation of lending processes, in progress for some time in the leasing division, in
parallel with a change in the focus of business towards the captive market (-€0.5 billion
year-on-year);
• the residual effects of the action taken to reduce exposure to the large corporate segment,
undertaken in the fourth quarter of 2011 (-€0.8 billion year-on-year, of which -€0.5 billion
during the first half of the year);
• a decrease in loans related to specific types of business carried out by the Parent
(-€1 billion).
With regard to segmentation of customers by markets, at the end of December 49.7% of the
consolidated portfolio consisted of loans to the retail market (48.4% at the end of 2011), 31.8%
to the corporate market (32.1%), 0.9% to the private banking market (0.9%), while the
remaining 17.6% consisted of all those types excluded from the commercial portfolios, such as
leasing, factoring and loans by UBI Banca (18.6%).
117

From the viewpoint of types of lending, the reduction was general, although to a different
degree:
• while mortgages and medium to long-term loans were again the principal form of lending,
with a share of 58.4%, these fell progressively to €54.2 billion (-€2 billion), the result of a
slowdown in new grants.
On the basis of management accounting figures for the network banks, Centrobanca and
UBI Banca (as the manager of the remaining outstanding loans of the merged B@nca 24-7),
in December performing residential mortgages amounted to €24.5 billion, of which €22.2
billion disbursed to consumer households and €2.3 billion to businesses (€25.3 billion at
the end of 2011, of which €22.8 billion to households and €2.5 billion to businesses). Forty
seven percent of the latter had a loan to value ratio of less than 60%;
• reverse repurchase agreements, which fell to €0.6 billion (-€0.3 billion), reflected the trend
for business specific to UBI Banca and in particular: lower ordinary business with the
Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing house)
(-0.5 billion) with Italian government bonds as the underlying, carried out to invest liquidity
temporarily, which were offset by the start, from the summer months onwards, of business
with a counterparty belonging to a banking group (+€0.2 billion) to be intepreted in relation
to financial liabilities held for trading (uncovered short positions on European government
bonds);
• finance lease credit, relating almost entirely to UBI Leasing, fell to €7.9 billion (-€1 billion,
of which almost half attributable to non-captive business), as a consequence of the action
taken already mentioned;
• factoring loans, granted principally by UBI Factor, stood at €2.7 billion 1 , with an overall
decline of €0.4 billion over 12 months, although the trend reversed during the fourth
quarter (+€0.3 billion);
• consumer loans as a whole, which fell to €5.1 billion (-€0.5 billion), were impacted by
rationalisation initiatives regarding business with non-captive customers, for which only
the management of outstanding loans remained at the end of December. The decline over
twelve months involved both the outstanding portfolio of the former B@nca 24-7,
contributed to UBI Banca (personal loans, special purpose loans, credit cards, current
accounts and other forms of lending; -€0.7 billion) and that of Prestitalia (salary backed
loans; -€0.2 billion), partially offset by an increase in loans managed directly by the
network banks (+€0.4 billion);
• other forms of short-term lending, totalling €22.3 billion, fell by €2.4 billion year-on-year.
While the amount for current accounts remained substantially stable at €12.9 billion,
benefiting from a partial recovery during the last months of the year, “Other transactions”
(loans for advances, portfolio, import/export transactions, very short-term lending, etc.) fell
by €2.4 billion to €9.4 billion, during the first and fourth quarters in particular;
• debt securities fell to €10.5 billion (-€0.2 billion), in relation to the maturity of a security
issued by a bank amounting to €0.2 billion, subscribed by the Parent at the end of 2011.
With regard to maturities, due, amongst other things, to the performance described above, at
the end of the year, the Group’s loan portfolio consisted of €67.2 billion of medium to longterm
loans (-€3.7 billion; -5.2% year-on-year), accounting for 72.4% of the total, and of €25.7
billion of short-term loans (-€3.1 billion; -10.9% over the twelve-month period). The latter
decreased particularly significantly during the first half of the year (-€2.4 billion).
On that same date, the lending to funding ratio was 94%, an improvement compared to the end
of 2011 (97%).
1 The outstanding amount as of 31 st December 2012 included €466 million of loans for factoring granted by UBI Banca International.
118

Distribution of loans by economic sector (Bank of Italy classification)
(management accounting figures for performing loans of the network banks and Centrobanca)
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Manufacturing and service companies (non-financial companies and
producer households) 60.4% 60.6% 60.8% 61.6% 61.8%
of which: other services destined for sale 16.5% 16.6% 16.6% 17.0% 17.0%
Commerce, recovery and repair services 9.7% 9.6% 9.6% 9.6% 9.5%
Construction and public works (*) 8.7% 8.9% 8.9% 8.9% 9.1%
Energy products 3.6% 3.5% 3.4% 3.5% 3.7%
Agricultural, forestry and fishery products 2.3% 2.3% 2.3% 2.3% 2.3%
Metal products, excluding machines and means of transport 2.2% 2.2% 2.2% 2.3% 2.4%
Foodstuffs, beverages and tobacco products 2.1% 2.0% 1.9% 2.0% 1.9%
Hotels and restaurants 2.0% 2.0% 2.0% 2.0% 2.0%
Agricultural and industrial machinery 1.5% 1.5% 1.4% 1.5% 1.4%
Textiles, leather and footwear, clothing 1.4% 1.5% 1.5% 1.5% 1.5%
Consumer households 34.1% 33.8% 33.4% 32.4% 32.3%
Financial companies 2.5% 2.5% 2.7% 2.6% 2.8%
Public administrations 1.2% 1.2% 1.2% 1.3% 1.0%
Other (not-for-profit institutions and the rest of the world) 1.8% 1.9% 1.9% 2.1% 2.1%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
(*) “Construction and public works” refers to category 66. ATECOs [Classification of economic activities] are not considered (item L and item F – property and
construction activities) since they are included in the other categories.
From the management accounting figures presented in the table “Distribution of loans by
economic sector ”, relating to the network banks and to Centrobanca only, an aggregate
representing 66.9% of gross loans, it was found that as of December 2012:
• 94.5% of outstanding loans were to manufacturing and service companies and consumer
households, a share which had progressively increased from 94.1%, twelve months earlier,
which confirms the traditional attention paid by the Group towards supporting local
markets. Over the same period, a change in composition occured in favour of consumer
households, whose share of loans rose to 34.1% from 32.3% at the end of 2011;
• loans and advances to financial companies as a
percentage of the portfolio as a whole declined from
2.8% to 2.5%;
• the distribution by sector of performing loans to nonfinancial
companies and to producer households
confirmed that the main sectors in receipt of loans
were “other services destined for sale” and “commerce,
recovery and repair services”, which partly due to
their heterogeneous nature, continued to account for
the largest percentage of total lending (26.2%),
although down by one percentage point compared to a
year before (26.5%).
The table “Geographical distribution of loans and
advances to customers by region of location of the
branch” summarises the geographical distribution of
loans within Italy.
The actions taken concerning the Group’s loan portfolio
had a more significant impact within Lombardy, causing
a marginal change in composition among the various
geographical areas.
Geographical distribution of loans to customers
by region of location of the branch (*)
Percentage of total 31.12.2012 31.12.2011
Lombardy 69.12% 70.06%
Piedmont 6.24% 6.16%
Latium 4.98% 4.81%
Marches 3.95% 3.84%
Liguria 2.92% 2.91%
Campania 2.42% 2.30%
Apulia 2.24% 2.14%
Emilia Romagna 2.14% 1.98%
Calabria 1.96% 1.92%
Veneto 1.53% 1.45%
Umbria 0.69% 0.68%
Abruzzo 0.64% 0.62%
Basilicata 0.44% 0.43%
Friuli Venezia Giulia 0.25% 0.25%
Molise 0.24% 0.23%
Tuscany 0.22% 0.20%
Valle d'Aosta 0.02% 0.02%
Trentino Alto Adige 0.00% 0.00%
Total 100.00% 100.00%
North 82.2% 82.8%
- North West 78.3% 79.1%
- North East 3.9% 3.7%
Overall, the share at the end of the year for the northern
regions was 82.2% of the total (78.3% in the North West),
with a slight decrease over the twelve-month period,
Central
South
(*) The aggregates relate to banks only.
9.9%
7.9%
9.5%
7.7%
while that for central Italian regions was 9.9% and the remaining 7.9% of lending was to
southern regions.
From the viewpoint of concentration, the table highlights a significant and generalised
improvement, concentrated mainly in the first half of the year, the result, amongst other
things, of action undertaken during the last part of 2011. The improvement resumed during
the last three months of the year.
119

Concentration of risk
(largest customers or groups as a percentage of total loans and guarantees )
Customers or
Groups
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Largest 10 2.9% 3.0% 3.0% 3.3% 3.5%
Largest 20 4.9% 5.1% 5.0% 5.5% 5.6%
Largest 30 6.2% 6.4% 6.5% 7.0% 7.1%
Largest 40 7.2% 7.5% 7.5% 8.1% 8.2%
Largest 50 8.0% 8.3% 8.3% 8.9% 9.1%
securities (€7.8 billion in December 2011);
With regard to “large exposures”, at the end of
the year, only two positions were outstanding
(three at the end of 2011 2 ), totalling €22.6
billion, an increase over the twelve-month
period, although down on June. In particular,
of the €22.6 billion reported:
• €18 billion were attributable to the Ministry
of the Treasury, mainly in relation to
investments by the Parent in government
• around €4.6 billion related to the Cassa di Compensazione e Garanzia due to overall
transactions by the Parent (€6 billion in December 2011).
In consideration of the reduction in Large exposures
the number of counterparties reported
compared to the year before and the
Figures in thousands of euro
application of a weighting factor of
zero to transactions with government,
the Group’s actual risk exposure after
weightings was €141.2 million (on a
single position), down both year-on-year and compared to the other comparative periods.
Each of the positions reported was considerably below the 25% limit set for banking groups as
a percentage of the consolidated regulatory capital.
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Number of positions 2 2 2 2 3
Exposure 22,599,040 22,349,704 25,774,877 17,869,444 15,388,367
Positions at risk 141,175 275,779 169,548 188,934 1,127,147
In line with the trend for on-balance sheet lending, guarantees granted by the Group also
totalled €6.2 billion at the end of the year, a reduction of over 15%, compared to the €7.3
billion in December 2011.
In detail, the change reflects a generalised reduction, more significant for guarantees of a
financial nature, to €2.1 billion (-€0.9 billion) and more contained for guarantees of a
commercial nature, which in December, totalled €4.1 billion (-€0.2 billion).
Risk
The difficult economic background has been progressively affecting the quality of loans and is
continuing to increase gross volumes of deteriorated loans, which at the end of December, had
reached almost €11 billion.
The overall change year-on-year was +€2.37 billion (+27.6%), of which +€0.52 billion
attributable to the first quarter, +€0.35 billion to the second, +€0.89 billion to the third and
+€0.61 billion to the fourth quarter and related mainly to impaired loans (+€1.28 million),
although also to non-performing loans (+€0.77 billion) and exposures past due and/or in
arrears (+€0.48 billion), while there was a reduction in restructured loans (-€0.16 billion).
The annual trend in the different categories of deteriorated loans was also affected by the
following:
• internal reclassifications of some substantial positions which had already been recorded
among deteriorated loans;
• disposals of non-performing unsecured loans during the second quarter of 2012 by B@nca
24-7 (€103.2 million), prior to the merger into the Parent, and by Centrobanca (€5 million);
• the classification as impaired of a portfolio of salary backed loans belonging to B@nca 24-7
and Prestitalia for approximately €240 million.
This action should be considered in relation to the direct aquisition by B@nca 24-7 until 30 th June and
by Prestitalia from 1 st July 2012 of salary-backed operations after the liquidation in April 2011 of the
2 At the end of 2011, the report also included €1.6 billion attributable to different types of transaction outstanding with a major
banking Group.
120

finance company Ktesios Spa (which operated as an agent), with the disappearance as a consequence
of B@nca 24-7’s ability to use the “deducted for non-payment” clause. On the basis of that clause the
agent, Ktesios, guaranteed the repayments on the loans disbursed and was also responsible for all the
credit recovery activities and any enforcement of guarantees that were compulsory by law. The
discontinuation of the indirect distribution channels for salary-backed loans had also continued during
2011. This had involved not only Ktesios, but also other finance companies, whose mandates to operate
were revoked by the UBI Banca Group.
Therefore, in view of the above, salary-backed lending operations were progressively insourced within
the Group at Prestitalia Spa which specialises in these. This company not only carries out ordinary
collection activities, but also the direct recovery of credit, enforcing compulsory legal guarantees where
applicable and it also classifies positions, where necessary, in the most appropriate categories of
deteriorated loan.
• the extension of reporting to include all positions which, on exceeding the threshold of
significance set by the supervisory regulations, were continuously in arrears for over 90
days and no longer for over 180 days, as permitted until 31 st December 2011.
Those same events also affected the trend for net deteriorated loans, which, at the end of
December, amounted to €8.11 billion, an increase of €1.83 billion (+29.1%), of which +€0.43
million attributable to the first quarter, +€0.31 billion to the second quarter, +€0.75 billion to
the third quarter and +€0.34 billion to the fourth quarter.
Notwithstanding a generalised increase in net impairment losses, total coverage of deteriorated
loans of 26.04%, fell slightly by comparison with the 26.89% recorded at the end of 2011
(although slightly up on September - 24.88% - and June - 25.74%), due to the
aforementioned disposals of non-performing loans 3 , which were almost entirely written down,
and to the increase in the percentage of positions backed by collateral, with less impairment
recognised on them, also the result of prudent loan to value ratios for residential mortgages
granted to private individuals by the Group.
Coverage for performing loans on the other hand was essentially stable at 0.55% (0.58% a year
before).
In terms of type of loan, as shown in the table “Composition of loans and advances to
customers”, around 42% of the annual growth in net deteriorated loans related to the item
“Mortgages loans and other medium to long-term loans”, backed by collateral, which result
automatically in a lower level of coverage, while 30% related to non-banking financial business
and 14.5% to consumer credit lending, partly as a result of the reclassification of salarybacked
loans already mentioned.
NON-PERFORMING LOANS
Gross non-performing loans grew during the twelve-month period from €4.38 billion to €5.14
billion, with a €765 million increase, divided as follows: +€215.7 million in the first quarter,
+€112.9 million in the second quarter, +€176.6 million in the third quarter and +€259.8
million in the fourth quarter 4 .
In percentage terms, the annual change was +17.5%, which compares with +16.6% for loans
to the private sector by the banking sector nationally. During the second part of the year, on
the other hand, the pace of growth for gross non-performing loans in the UBI Banca Group –
+9.3% over the last six months and +5.3% over the last three months – was less than the
average growth for the sector nationally which was +10.5% and +6.3% respectively.
The annual trend also benefited from the disposal in June of non-performing unsecured loans, with almost
100% coverage, for a total amount of €108.2 million, belonging to the former B@nca 24-7 (€103.2 million)
and residually to Centrobanca (€5 million).
3 If the disposals of non-performing loans made in June are not included, overall coverage at the end of December would have been
26.70% (instead of 26.04%).
4 The new entrance of five significant positions occurred in the fourth quarter, for a total amount of €102 million. These included two
which totalled €67 million (one of which transferred from impaired loans) relating to the non-banking financial sector.
121

Year-on-year change in the total was due principally to the network banks and to UBI Leasing.
Loans and advances to customers as at 31st December 2012
Figures in thousands of euro
Gross exposure
Impairment
losses
Carrying amount
Coverage (*)
Deteriorated loans (11.39%) 10,958,381 2,853,207 (8.73%) 8,105,174 26.04%
- Non-performing loans (5.34%) 5,142,308 2,190,369 (3.18%) 2,951,939 42.60%
- Impaired loans (4.29%) 4,123,537 520,995 (3.88%) 3,602,542 12.63%
- Restructured loans (0.80%) 773,934 114,833 (0.71%) 659,101 14.84%
- Past due loans (0.96%) 918,602 27,010 (0.96%) 891,592 2.94%
Performing loans (88.61%) 85,253,156 470,361 (91.27%) 84,782,795 0.55%
Total loans and advances to customers 96,211,537 3,323,568 92,887,969 3.45%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st December 2011
Figures in thousands of euro
Gross exposure
Impairment
losses
Carrying amount
Coverage (*)
Deteriorated loans (8.38%) 8,589,416 2,309,532 (6.30%) 6,279,884 26.89%
- Non-performing loans (4.27%) 4,377,325 1,895,908 (2.49%) 2,481,417 43.31%
- Impaired loans (2.77%) 2,844,167 310,387 (2.54%) 2,533,780 10.91%
- Restructured loans (0.91%) 933,786 93,096 (0.84%) 840,690 9.97%
- Past due loans (0.43%) 434,138 10,141 (0.43%) 423,997 2.34%
Performing loans (91.62%) 93,951,550 541,664 (93.70%) 93,409,886 0.58%
Total loans and advances to customers 102,540,966 2,851,196 99,689,770 2.78%
The item as a percentage of the total is given in brackets.
(*) Coverage is calculated as the ratio of impairment losses to gross exposure.
Non-performing loans backed by collateral increased by €0.6 billion to €3.3 billion (+23.3%),
with a share of the gross total which rose progressively to 63.6% from 60.6% at the end of
2011.
An analysis of changes in 2012 shows a reduction, compared to the previous year, of around
one quarter in new classifications from performing loans, which was more than offset,
however, by transfers from other categories of deteriorated exposures, mainly from impaired
loans.
Total net non-performing loans rose from €2.48 billion to €2.95 billion, an increase of €470.5
million (+19%), of which +€151.6 million attributable to the first quarter, +€118 million to the
second quarter, +€103.5 million to the third quarter and +€97.4 million to the fourth quarter.
A comparison with data for the sector nationally reveals more moderate rises for the UBI
Banca Group, seen year-on-year (+19% compared to +25.6%), in the second half of the year
(+7.3% compared to +19.5%) and also in the fourth quarter (+3.4% compared to +11.5%).
Only 9.5% of the total outstanding loans at the end of the year were without any type of
backing (collateral/personal guarantees), a lower percentage than the figure of 11% for 2011 .
The combined effect of the trends described above and the reduction in the total loan portfolio
led to a non-performing loans to loans ratio, which increased to 5.34% in gross terms and to
3.18% net of impairment losses. Despite this, the loan quality of the Group continues to
outperform the average for Italian banks nationally, for which the ratios are 7.24% for gross
non-performing loans and 3.35% for net non-performing loans, both to the private sector.
While recovering compared to 41.54% in June and September, coverage for non-performing
loans nevertheless fell year-on-year from 43.31% to 42.60%, reflecting the simultaneous effect
of a series of opposing factors: on the one hand, the increased percentage of positions backed
by collateral, and therefore automatically with less impairment recognised, as well as the
consequences of the already mentioned disposal of non-performing unsecured loans, because
these had already been fully written down 5 ; on the other hand, an increase in the recognition
5 If the disposals of non-performing loans, which occurred in June and which had an impact of 109 basis points, are not included,
coverage as at 31 st December 2012would have been 43.69% (instead of 42.60%).
122

of impairment, which contributed to the improvement in coverage by approximately 140 basis
points.
If positions charged to the income statement in relation to creditor actions still in progress are
considered, coverage fell from 59.06% to 57.63%.
Lastly, with reference to non-performing loans not backed by collateral, considered gross of the above writeoffs,
coverage for these at the end of the year stood at 77.18% (77.45% at the end of 2011).
Loans to customers: changes in deteriorated gross exposures in 2012
Figures in thousands of euro
Non-performing
loans
Impaired loans
Restructured
exposures
Past-due
exposures
Initial gross exposure as at 1st January 2012 4,377,325 2,844,167 933,786 434,138
Increases 1,575,306 3,396,208 283,980 2,122,264
transfers from performing exposures 312,131 1,963,721 19,323 2,011,486
transfers from other classes of deteriorated exposures 1,086,415 1,069,543 192,597 7,336
other increases 176,760 362,944 72,060 103,442
Decreases -810,323 -2,116,838 -443,832 -1,637,800
transfers into performing exposures -66,429 -471,808 -54,211 -379,038
write-offs -287,904 -31,880 -2,423 -
payments received -282,159 -365,676 -102,330 -188,455
disposals -106,172 - -4,215 -
transfers to other classes of deteriorated exposure -16,432 -1,056,104 -278,076 -1,005,280
other decreases -51,227 -191,370 -2,577 -65,027
Final gross exposure as at 31st December 2012 5,142,308 4,123,537 773,934 918,602
Loans to customers: changes in deteriorated gross exposures in 2011
Figures in thousands of euro
Non-performing
loans
Impaired loans
Restructured
exposures
Past-due
exposures
Opening gross exposure as at 1st January 2011 3,780,973 2,320,471 889,070 474,548
Increases 1,491,771 2,172,222 250,048 785,998
transfers from performing exposures 415,216 1,612,768 33,930 759,222
transfers from other classes of deteriorated exposures 873,878 387,217 136,218 3,244
other increases 202,677 172,237 79,900 23,532
Decreases -895,419 -1,648,526 -205,332 -826,408
transfers into performing exposures -37,316 -353,276 -1 -239,867
write-offs -328,588 -2,003 -2,963 -1
payments received -315,552 -368,314 -178,198 -57,097
disposals -174,581 - - -
transfers to other classes of deteriorated exposure -3,482 -897,419 -18,616 -481,040
other decreases -35,900 -27,514 -5,554 -48,403
Final gross exposure as at 31st December 2011 4,377,325 2,844,167 933,786 434,138
IMPAIRED LOANS
Gross impaired loans rose from €2.84 billion to €4.12 billion, an increase of €1.28 billion
(+45%), of which +€63.2 million in the first quarter, +€243.9 million in the second quarter 6 ,
+€348.1 million in the third quarter and +€624.2 million in the fourth quarter. This
progressive growth was also affected by a number of quarterly and technical factors:
• a more rigorous change from January in the rules for the automatic reclassification of UBI
Leasing’s exposures past due and/or in arrears as impaired, which gave rise in the first
quarter to new positions amounting to approximately €110 million;
• the classification as impaired, already mentioned, of the B@nca 24-7 (now Prestitalia) salary
and pension-backed loan portfolio totalling €240 million (€120 million in both the second
and third quarters) with an average write-down of 13.2%;
6 The change included the new classification as impaired of a large position amounting to €47 million relating to UBI Factor, which
was subsequently reclassified as non-performing during the fourth quarter.
123

• the new classification in this category during the year of a series of large positions
amounting to over €650 million, mainly transferred from other categories of deteriorated
loans (loans past due and/or in arrears and also restructured loans). During the fourth
quarter in particular, approximately half of the overall increase of €624 million, related to
the reclassification as impaired of two particularly large positions: €153 million relating to a
UBI Factor position and €152 million attributable to the Carlo Tassara position, reclassified
out of restructured loans into impaired loans.
Partly as a result of the above, the annual change in this category of deteriorated loans was
increased by over half by the product companies (Prestitalia, UBI Leasing and UBI Factor),
while the contribution made by the network banks, which was fairly modest during the first
nine months of the year, was affected during the fourth quarter by the reclassification of the
Tassara position already mentioned.
Gross impaired loans backed by collateral increased over the twelve-month period to €2.6
billion (+€0.8 billion; +41.1%), while their share of the gross outstanding total at the end of the
year was 63.3% 7 (65% in December 2011).
An analysis of changes in 2012 reveals a significant increase in transfers from other categories
of deteriorated loans – above all from exposures past due and/or in arrears, but also from
restructured loans – accompanied by a more modest increase in new classifications from
performing loans, as a reflection of the deterioration in the economy. At the same time,
transfers into performing exposures increased, which confirms the high degree of turnover in
this category, partly in relation to the severity and automatic nature of the classification
procedures which govern classifications in the categories which precede the impaired category.
With a trend similar to that for the gross total, net impaired loans rose from €2.53 billion to
€3.60 billion over the year, an increase of €1.07 billion (+42.2%), of which +€62 million in the
first quarter, +€213.7 million in the second quarter, +€309.8 million in the third quarter and
+€483.3 million in the fourth quarter.
At the end of the year, coverage, which stood at 12.63%, had increased compared to 10.91%
twelve months before, mainly the result of an increase in impairment recognised (+87 basis
points), but also due to the new classification of the Tassara position (+70 basis points).
Lastly, coverage for impaired loans not backed by collateral, which was affected by the new
classification as impaired of the salary backed portfolio, stood at 20.18% 8 (19.04% in
December 2011).
RESTRUCTURED LOANS
Unlike the other categories of deteriorated loans, gross restructured loans fell from €933.8
million to €773.9 million, an annual decrease of €159.8 million (-17.1%), mainly related to the
reclassification of the Tassara position as impaired during the fourth quarter. Quarterly
changes were as follows:
• +€44.4 million in the first quarter, due to the new classification as restructured of a
Centrobanca position;
• -€55.6 million in the second quarter, due partly to the transfer of a number of positions to
the non-performing category;
• +€52.3 million in the third quarter, over 70% of which due to two new positions for large
amounts;
7 Net of the new classification of the salary-backed portfolio, loans backed by collateral as at 31 st December 2012 would have
amounted to 67.3% of the gross total.
8 Net of the new classification of the salary-backed portfolio, coverage for impaired loans not backed by collateral would have been
21.51%.
124

• -€200.9 million in the fourth quarter, of which -€152 million resulting from the already
mentioned transfer of the Tassara position to the impaired category.
In view of the movements reported, an analysis of the changes in 2012 reveals an increase in
transfers from other categories of deteriorated loans, which were more than offset by the
increase in transfers to not only impaired loans and non-performing loans, but also to
performing loans.
The trends described above, together with the increase in adjustments, also due to a number
of write-downs of significant positions, led, during the course of the year, to a progressive
increase in coverage, which rose from 9.97% to 14.84%.
EXPOSURES PAST DUE AND/OR IN ARREARS
Gross exposures past due and/or in arrears more than doubled from €434.1 million to €918.6
million (+111.6%), an annual increase of €484.5 million, of which +€194.6 million in the first
quarter, +€45 million in the second quarter, +€312.1 million in the third quarter and -€67.2
million in the fourth quarter.
The overall change in this item, relating mainly to the network banks and to Prestitalia, is
closely connected with the end of the period (1 st January 2012) in which Italian banks were
excepted under Basel 2 from reporting positions in arrears, which introduced the obligation to
report them after 90 days (instead of the previous 180 days) also for exposures not backed by
real estate collateral, as already occurred for other European banking systems.
The changes that occurred in the third quarter of 2012 were affected, moreover, by the new
entrance to this category in September of large positions totalling €80 million, most of which
were still classified within this category of deteriorated loans at the end of December.
The reduction in the total between October and December on the other hand mainly reflects
reclassifications of positions as impaired loans.
New classifications in this category from performing loans, which more than doubled
compared to 2011, were affected by the new reporting practices, while a similar increase
occurred at the same time in transfers to other categories of deteriorated loans, which
nevertheless incorporated the already mentioned reclassification into impaired loans relating
to UBI Leasing.
Coverage, at 2.94%, had increased compared to December 2011 (2.34%).
125

The interbank market and the liquidity
situation
After flaring up again in the second quarter, pressures on sovereign debt progressively
eased, especially after the European Central Bank defined procedures for carrying out
outright monetary transactions (OMTs). The assurances provided by the ECB, together
with the broad availability of liquidity provided by the Eurosystem (85% of which was
allotted through LTROs - longer-term refinancing operations), had the effect of
stabilising wholesale markets, even if this still fell short of normality, as demonstrated
by an analysis of inflows from foreign funding (negative), interbank transactions
originated by foreign operators (falling) and deposits by non-residents (also falling).
Quarterly changes in net interbank debt
Figures in thousands of euro
31.12.2012
30.9.2012
30.6.2012
31.3.2012
31.12.2011
Loans and advances to banks 6,072,346 5,286,733 4,843,142 4,925,671 6,184,000
of which: loans to central banks 1,191,235 698,769 722,132 577,133 739,318
Due to banks 15,211,171 14,765,300 14,708,333 15,143,195 9,772,281
of which: due to central banks 12,098,917 12,075,917 12,052,000 12,021,667 6,001,500
Net interbank position -9,138,825 -9,478,567 -9,865,191 -10,217,524 -3,588,281
Figures in thousands of euro
31.12.2011
30.9.2011
30.6.2011
31.3.2011
31.12.2010
Loans and advances to banks 6,184,000 5,314,336 4,384,636 4,510,008 3,120,352
of which: loans to central banks 739,318 1,485,674 325,450 345,625 739,508
Due to banks 9,772,281 8,611,714 4,966,574 7,332,517 5,383,977
of which: due to central banks 6,001,500 4,000,333 - 1,255,064 2,219,152
Net interbank position -3,588,281 -3,297,378 -581,938 -2,822,509 -2,263,625
As at 31 st December 2012 the UBI Banca Group’s net interbank position was one of
net debt of €9.1 billion, with no substantial changes occurring over the course of the
year (-€9.5 billion in September, -€9.9 billion in June and -€10.2 billion in March),
although with an appreciable increase compared to -€3.6 billion as at 31 st December
2011.
The increase in the balance is directly correlated with UBI Banca Group’s participation
in the second set of refinancing operations (LTRO) carried out by the ECB on 29 th
February 2012, in which the Group was allotted a further €6 billion (for a total of €12
billion) of three-year funding (currently at an interest rate of 0.75%).
Net of transactions with central banks, the net interbank position was positive and
stable, as shown by the figures for interim periods: +€1.8 billion as at 31 st December
2012, +€1.9 billion as at 30 th September, +€1.5 billion as at 30 th June, +€1.2 million
as at 31 st March and +€1.7 billion in December 2011.
The progressive trend towards normalisation of market conditions, together with all of
the actions undertaken out over the last two years, have allowed the Group to first
reach and then maintain positive positioning. This is demonstrated, amongst other
things, by short-term liquidity (liquidity coverage ratio) and structural (net stable
funding ratio) indicators, which have both already exceeded 100% 1 . Moreover, these
have allowed UBI Banca to return to the international markets after 18 months, on
23 rd October of last year, with a EMTN benchmark issuance of €750 million.
1 On the basis of the Agreement reached by the Basel Committee on 6 th January 2013, the LCR indicator will be
introduced from 1 st January 2015 onwards, although the minimum level required will initially be 60%, with progressive
increases of 10% per year until it reaches 100% on 1 st January 2019.
126

Operations in the interbank market showed the following trends over the twelvemonth
period.
Loans and advances to banks: composition
31.12.2012 % 31.12.2011 %
Changes
Figures in thousands of euro amount %
Loans to central banks 1,191,235 19.6% 739,318 11.9% 451,917 61.1%
Term deposits - - - - - -
Compulsory reserve requirements 1,172,303 19.3% 738,100 11.9% 434,203 58.8%
Reverse repurchase agreements - - - - - -
Other 18,932 0.3% 1,218 0.0% 17,714 n.s.
Loans and advances to banks 4,881,111 80.4% 5,444,682 88.1% -563,571 -10.4%
Current accounts and deposits 2,081,098 34.3% 2,516,230 40.7% -435,132 -17.3%
Term deposits 118,971 2.0% 455,701 7.4% -336,730 -73.9%
Other financing: 2,468,251 40.6% 1,329,819 21.5% 1,138,432 85.6%
- reverse repurchase agreements 953,977 15.7% 534,373 8.6% 419,604 78.5%
- finance leases 30 0.0% 98 0.0% -68 -69.4%
- other 1,514,244 24.9% 795,348 12.9% 718,896 90.4%
Debt instruments 212,791 3.5% 1,142,932 18.5% -930,141 -81.4%
Total 6,072,346 100.0% 6,184,000 100.0% -111,654 -1.8%
Loans and advances to banks, which stood at €6.1 billion at the end of the year, did
not show any substantial change compared to the €6.2 million as at 31 st December
2011, even if these reflected a certain change in internal composition, above all within
the different forms of funding.
The increase in liquidity held with Central Banks shown in the table – from €0.7
billion to €1.2 billion, relating to the central bank account for the compulsory reserve
– was only an end of year position, because the average Group deposit is normally in
line with requirements.
Over the same period, loans to other banks fell to €4.9 billion from €5.4 million before.
The reduction (-€0.5 billion) was the result of the following:
• on the one hand, a declining trend involving almost all types of lending: current
accounts (-€0.4 billion), term deposits (-€0.3 billion) and debt securities (-€0.9
billion, due to the maturity of investments in securities eligible for refinancing
issued by banks made at the end of 2011, used to increase the pool of assets
eligible for refinancing);
• on the other hand, growth in the item “Other financing” (+€1.1 billion), including
reverse repurchase agreements (which rose from €420 million to approximately €1
billion), entered into with domestic or international counterparties, to be
interpreted in relation to financial liabilities held for trading (uncovered short
positions on European government securities). These transactions took place
during the second part of the year, while at the end of 2011, current activities were
directed towards acquiring securities eligible for refinancing.
Due to banks: composition
Changes
31.12.2012 % 31.12.2011 %
Figures in thousands of euro amount %
Due to central banks 12,098,917 79.5% 6,001,500 61.4% 6,097,417 101.6%
Due to banks 3,112,254 20.5% 3,770,781 38.6% -658,527 -17.5%
Current accounts and deposits 1,215,750 8.0% 896,512 9.2% 319,238 35.6%
Term deposits 534,610 3.5% 778,119 8.0% -243,509 -31.3%
Financing: 1,144,494 7.5% 1,881,780 19.2% -737,286 -39.2%
- repurchase agreements 416,190 2.7% 1,007,037 10.3% -590,847 -58.7%
- other 728,304 4.8% 874,743 8.9% -146,439 -16.7%
Amounts due for commitments to repurchase own equity
instruments - - - - - -
Other payables 217,400 1.5% 214,370 2.2% 3,030 1.4%
Total 15,211,171 100.0% 9,772,281 100.0% 5,438,890 55.7%
127

Interbank funding, which stood at €15.2 billion at the end of 2012, compared to €9.8
billion as at 31 st December 2011, consisted of €12.1 billion concentrated in funding
from the ECB, stable since March 2012, after participation in both of the LTROs (this
stood at €6 billion at the end of the previous year, when only the first operation had
been carried out).
Net of this funding, amounts due to banks stood at €3.1 billion, down by €0.7 billion
compared to twelve months previously.
The change is also due to a reduction in “Financing” and in particular, in the sub-item
consisting of repurchase agreements (-€0.6 billion), following the repayment of assets
borrowed which were not eligible for refinancing and which were outstanding at the
end of 2011, to be interpreted mainly in combination with the asset item: debt
securities.
Again within “Financing”, the sub-item “Others” includes a medium to long-term
transaction with the European Investment Bank, by the Parent for a residual amount,
after repayments for the year, of €523 million (€588 million at the end of 2011).
Again as at 31 st December 2011, the remaining forms of funding recorded more
modest trends: current accounts rose by €319 million, partially offset by the reduction
of €244 million in term deposits which, at the end of 2011, included €570 million
relating to a deposit by the EIB, which was subsequently withdrawn.
Assets eligible for refinancing
***
Figures in billions of euro
nominal
amount
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
amount eligible
(net of
haircuts)
nominal
amount
amount eligible
(net of
haircuts)
nominal
amount
amount eligible
(net of
haircuts)
nominal
amount
amount eligible
(net of
haircuts)
nominal
amount
amount eligible
(net of
haircuts)
Securities owned (AFS, HTM and L&R) (*) 14.26 14.32 13.49 13.34 11.33 10.97 13.79 13.48 6.25 5.76
Government backed bonds 6.00 5.79 6.00 5.67 6.00 5.31 6.00 5.56 - -
Covered bonds ("self-retained" issues) 3.05 2.77 2.55 2.31 2.55 2.30 0.75 0.69 - -
Securitisation of residential mortgages of the
former B@nca 24-7 1.32 0.54 1.34 0.72 1.37 0.74 1.40 0.76 1.44 0.76
UBI Leasing leased assets securitisation 1.94 1.47 2.29 1.58 2.29 1.67 2.54 1.85 3.44 2.47
Banco di Brescia securitisation of performing
loans to SMEs 0.96 0.64 0.35 0.25 0.41 0.30 0.46 0.33 0.59 0.44
Banca Popolare di Bergamo securitisation of
performing loans to SMEs 1.86 1.21 1.86 1.33 1.86 1.31 1.86 1.29 1.86 1.28
Banca Popolare Commercio e Industria
securitisation of performing loans to SMEs
0.58 0.38 - - - - - - - -
Banca Popolare di Ancona securitisation of
performing loans to SMEs 0.71 0.46 - - - - - - - -
Loans eligible resulting from participation in
ABACO (**) 1.85 1.85 2.37 2.37 1.14 1.14 0.65 0.65 0.65 0.65
Securities acquired through repurchase agreements - - - - - - - - 0.33 0.28
Total 32.53 29.43 30.25 27.57 26.95 23.74 27.45 24.61 14.56 11.64
(*) These include government securities not refinanced with the Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing
house), for the following amounts:
31 st December 2012: €13.5 billion (net of haircuts), of which €3.2 billion contributed to the pool and €10.3 billion available non-pool.
30 th September 2012: €12.4 billion (net of haircuts), of which €3.2 billion contributed to the pool and €9.2 million available non-pool.
30 th June 2012: €10 billion (net of haircuts), of which €3 billion contributed to the pool and approximately €7 billion available non-pool;
31 st March 2012: €11.9 million (net of haircuts), of which €3.2 billion contributed to the pool and €8.7 billion available non-pool;
31 st December 2011: €3.6 billion (net of haircuts), available non-pool;
(**) ABACO (bank assets eligible as collateral) is the name given to procedures drawn up by the Bank of Italy for the management of loans
eligible for refinancing. In order to qualify as eligible, an asset must meet specific requirements contained in Bank of Italy regulations
concerning the following: type of debtor (public sector, non-financial company, international and supranational institutions), credit rating
(set by external ratings, rating tools of approved providers and internal ratings [for banks authorised by the Bank of Italy to use internal
rating models]), minimum amount (€0.1 million for domestic loans) and type of asset.
The liquidity reserve consisting of the portfolio of assets eligible for refinancing with
the central bank, amounted to €29.4 billion as at 31 st December 2012 (net of
haircuts), compared to €11.6 billion twelve months before. It was composed of €19.1
billion of assets deposited in the collateral pool of the European Central Bank and
€10.3 billion in government securities not refinanced with the Cassa di
Compensazione e Garanzia, available non-pool.
128

Considering the quota which has already been pledged (€12.1 billion at the end of
2012 and €6 billion at the end of 2011), the liquidity margin amounted to €17.3
million, a clear improvement with respect to the comparative figure of €5.6 billion.
The increase in the assets (+€17.8 billion) is the result of a series of actions
undertaken in the first quarter of the year (+€13 billion) with regard to the more
significant components, which were subsequently reinforced with further measures
designed to ease liquidity risk even further.
The figures for assets eligible for refinancing were also positively influenced in the
second part of the year by the improvement in the financial context connected with
sovereign debt risk, involving not only government securities but also other assets
contributed.
The principal strategic initiatives implemented during 2012 were:
• the issuance by UBI Banca, of bonds with a government guarantee for a total
nominal amount of €6 billion 2 (€5.8 billion net of haircuts);
• five new issuances (in February, May and October) of covered bonds, which were
not placed on the market (“self-retained”) for a total of €3.05 billion (€2.8 billion net
of haircuts);
• greater availability of owned securities, and of government bonds in particular (see
the following section on financial activities for further information);
• an increase in assets eligible for participation in ABACO (+€1.7 billion net of
haircuts), the result firstly of broadening of the eligibility criteria decided by the
ECB and then, to a greater degree, in the third quarter of the year, of the
authorisation by the Bank of Italy to use the advanced internal system for rating
the creditworthiness of debtors;
• three new self-securitisation operations for a total value net of haircuts of €1.25
billion (€1.9 billion nominal). These are transactions with the underlying loans
transferred to the respective special purpose entities by Banco di Brescia, BPCI and
BPA, with the consequent subsequent issuance of class A notes, which became
eligible for refinancing from December 2012 onwards.
The increases reported more than offset the reductions that occurred during the year
and which mainly related to the following:
• amortisation repayments on the senior tranches of securitisations by UBI Leasing (-
€1.5 billion nominal, -€1 million net of haircuts, which also takes account of
changes in price), by Banco di Brescia (-€0.28 billion nominal, -€0.21 billion net of
haircuts) and by the former B@nca 24-7 (-€0.12 billion nominal, -€0.22 billion net
of haircuts);
• the complete elimination of securities acquired through reverse repurchase
agreements (-€0.28 billion net of haircuts);
• the lower contribution by €0.52 billion from ABACO assets, recorded in the fourth
quarter of the year, following the increase in the haircuts on bank loans
contributed to back lending transactions, termed “additional credit claims” (the
increase was decided by the Bank of Italy in November).
On 2 nd August 2012, Moody’s downgraded the rating of 257 ABS and RMBS Italian
securities following the downgrade of Italian sovereign debt on 13 th July. The securities issued as
part of UBI Banca Group securitisations were therefore subject to a similar downgrade of their
ratings down to A2, a level which nevertheless remains compatible with the eligibility
requirements set by the ECB.
2 UBI Banca made use of the government initiative by issuing two bonds on 2 nd January 2012 for a total nominal amount
of €3 billion (€2 billion with a three-year maturity and €1 billion with a five-year maturity), followed by two further
issuances again for a total of €3 billion nominal on 27 th February 2012 (€2 billion, with a three-year maturity and €1
billion with a five-year maturity).
129

Financial activities
Italy had another particularly complex and difficult year in 2012, with the spread between tenyear
Italian BTPs and German bunds returning to the record highs of 2011, causing elevated
volatility on the market.
Against this background, the Parent, UBI Banca, undertook a series of actions on government
securities, which can be summarised as follows:
during the first quarter, €5 billion nominal were invested in BTPs with maturities of
approximately three years (longest until June 2015) and financed by using part of the
liquidity obtained in the two LTRO operations with the ECB, consistent with internal
policies to balance assets and liabilities. The new investments were classified partly as
available-for-sale (AFS) (€2 billion) and partly as held-to-maturity (HTM) (€3 billion). At the
same time, the maturities on other BTPs in the AFS portfolio were lengthened by means of
switching operations for a total nominal amount of €1.2 billion;
mainly in the second quarter, new investments financed by repurchase agreements with the
Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing house) were
made in short-term Italian government securities, classified partly in the trading portfolio
(€2.6 billion) and partly in the AFS portfolio (€2 billion nominal);
during the second half of the year, with BTP-bund spreads improving to some extent,
trading activity was mostly geared towards a moderate extension of maturities in order to
benefit from the higher yields. Therefore, as the securities reached their natural maturity,
switching operations were carried out involving both the trading portfolio and the AFS
portfolio as follows:
- during the third quarter, a total of €2 billion in short-term securities (BOTs and CTZs)
were sold and simultaneously replaced by purchasing BTPs (€1.5 billion nominal) and
CTZs (€0.5 billion nominal);
- in the fourth quarter, €2 billion nominal of BTPs that had been bought at the start of the
year were sold and a total of €2.4 billion nominal was invested again in BTPs, together
with a further switch amounting to €1 billion nominal.
The Italian government securities purchased were not hedged against interest-rate risk.
Financial assets/liabilities
Figures in thousands of euro
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Changes A/E
Total
Total
Total
Total
Total
%
%
%
%
% amount %
A
B
C
D
E
Financial assets held for trading 4,023,934 18.8% 3,177,832 15.9% 5,211,059 24.4% 3,679,925 20.6% 2,872,417 26.0% 1,151,517 40.1%
of which: financial derivatives contracts 587,824 2.7% 584,690 2.9% 576,153 2.7% 548,436 3.1% 596,986 5.4% -9,162 -1.5%
Financial assets designated at fair value 200,441 0.9% 121,026 0.6% 122,376 0.6% 123,066 0.7% 126,174 1.2% 74,267 58.9%
Available-for-sale financial assets 14,000,609 65.5% 13,483,510 67.4% 12,837,037 60.1% 10,794,700 60.5% 8,039,709 72.8% 5,960,900 74.1%
Held-to-maturity investments 3,158,013 14.8% 3,220,200 16.1% 3,192,239 14.9% 3,254,437 18.2% - - 3,158,013 -
Financial assets (a) 21,382,997 100.0% 20,002,568 100.0% 21,362,711 100.0% 17,852,128 100.0% 11,038,300 100.0% 10,344,697 93.7%
of which:
- debt instruments 20,187,669 94.4% 18,735,563 93.7% 20,109,120 94.1% 16,576,565 92.9% 9,687,568 87.8% 10,500,101 108.4%
- of which: Italian government securities 17,965,689 84.0% 16,344,777 81.7% 17,920,680 83.9% 14,749,981 82.6% 7,838,038 71.0% 10,127,651 129.2%
- equity instruments 390,458 1.8% 462,012 2.3% 457,211 2.1% 500,838 2.8% 485,294 4.4% -94,836 -19.5%
- Units in O.I.C.R.
(collective investment instruments). 217,046 1.0% 220,303 1.1% 220,227 1.0% 226,289 1.3% 229,513 2.1% -12,467 -5.4%
Financial liabilities held for trading (b) 1,773,874 100.0% 1,479,098 100.0% 1,274,898 100.0% 934,366 100.0% 1,063,673 100.0% 710,201 66.8%
of which: financial derivatives contracts 610,004 34.4% 599,432 40.5% 601,244 47.2% 569,978 61.0% 625,772 58.8% -15,768 -2.5%
Net financial assets (a-b) 19,609,123 18,523,470 20,087,813 16,917,762 9,974,627 9,634,496 96.6%
,
The portfolio consisting of “financial assets held for trading” (€4,023,934 thousand) was smaller than the same portfolio held by the Parent (€4,766,163
thousand), due to the presence of financial derivative contracts entered into by UBI Banca with the Group network banks and product companies. These
instruments, in addition to being partially and potentially subject to intragroup elimination in the consolidation, were classified by the Parent as held for
trading because the relative assets hedged were recognised in the balance sheets of the Group network banks and product companies. When the
consolidation was prepared, those same instruments, entered into to hedge the underlying assets, were recognised within hedging derivatives.
Financial derivatives classified as held for trading held by the Parent amounted to €1,425,977 thousand in December 2012, while the figure for the Group
was €587,824 thousand.
130

The total financial assets of the Group at the end of 2012 – the aggregate result of all trading
activity throughout the year – amounted to €21.4 billion, having almost doubled over the
twelve months. Net of financial liabilities (34.4% of which consisted of financial derivatives),
net financial assets totalled €19.6 billion (€10 billion at the end of 2011).
As shown in the table, the changes in the item reflect the new investments made, especially in
the first half of the year, which mostly regarded the AFS portfolio (+€6 billion) and the
reconstitution of the HTM portfolio (€3.2 billion)
The trend for assets held for trading was more varied with a total increase of €1.1 billion, the
aggregate result of €2.6 billion of net purchases in short-term Italian government securities
during the first two quarters, €2.1 billion in BTPs, BOTs and CCTs maturing or being
disinvested in the third quarter, and almost €1 billion in new purchases towards the end of
the year.
Management accounting figures 1 as at the 31 st December 2012 show the following:
- in terms of type of financial instrument, the securities portfolio of the Group was composed
as follows: 91.8% of government securities, 7.1% of corporate securities (of which
approximately 79% were issued by major Italian and international banks and financial
institutions and 73% of the investments in corporate securities also carry an “investment
grade” rating), 0.6% of hedge funds and the remainder (0.5%) consisting of funds and
equities;
- from a financial viewpoint, floating rate securities accounted for 24.4% of the portfolio 2 and
fixed rate securities for 70.9%, while the remainder consisted of structured instruments
(present mainly in the AFS portfolio), equities, funds and convertible bonds;
- as regards the currency of denomination, 99.6% of the securities were denominated in euro
and 0.3% in dollars with currency hedges, while in terms of geographical distribution, 98.2%
of the investments (excluding hedge funds) were issued from countries in the euro area and
1% from the USA;
- finally, an analysis by rating (for the bond portfolio only) shows that 97.7% of the portfolio
consisted of “investment grade” securities with an average rating of Baa1 (BAA1 in
December 2011) 3 .
Available-for-sale financial assets
“Available-for-sale financial assets” (AFS), asset item 40, are measured at fair value with the recognition of
changes in a separate fair value reserve in equity, except for losses due to reductions in value that are
considered significant or prolonged. In this case the reduction in value that occurred in the period is
recognised through profit or loss, the amount being transferred from the negative or positive reserve that
may have been recognised in equity previously. Following the recognition of impairment losses, recoveries
in value continue to be recognised in the separate fair value reserve in equity. Any decreases below the
level of the previous impairment losses are recognised through profit and loss.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A –
Accounting Policies in the Notes to the Consolidated Financial Statements.
Available-for-sale financial assets: composition
31.12.2012 31.12.2011
Changes
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total B amount %
Debt instruments 12,603,798 1,002,549 7,466 13,613,813 6,621,026 920,410 10,296 7,551,732 6,062,081 80.3%
of which: Italian government securities 11,029,798 399,247 - 11,429,045 5,625,881 338,292 - 5,964,173 5,464,872 91.6%
Equity instruments 154,798 26 139,749 294,573 251,226 46,963 88,444 386,633 -92,060 -23.8%
Units in O.I.C.R.
(collective investment instruments) 37,894 54,329 - 92,223 39,064 62,280 - 101,344 -9,121 -9.0%
Financing - - - - - - - - - -
Total 12,796,490 1,056,904 147,215 14,000,609 6,911,316 1,029,653 98,740 8,039,709 5,960,900 74.1%
1 The management accounting figures relate to a smaller portfolio than that stated in the consolidated financial statements, because
they exclude equity investments and some minor portfolios, but nevertheless include transactions that may be performed at the end
of the period with the value date for settlement in the following month.
2 The fixed rate securities purchased as part of asset swaps are also considered as floating rate. They account for 75% of the floating
rate securities.
3 The downgrade in sovereign debt that occurred at the beginning of 2012 had already been incorporated in the average portfolio
ratings at the end of December 2011.
131

At the end of 2012, available-for-sale financial assets had reached €14 billion and were
composed principally as follows:
- the AFS portfolio of UBI Banca amounting to €11,955 million (€6,706 million euro in
December 2011);
- the IW Bank portfolio, designed to stabilise the bank’s net interest income given the nature
of its normal operations, amounting to €783 million (€722 million);
- the Centrobanca corporate bond portfolio, which represents activity complementary to and
consistent with the lending approach of that bank, amounting to €370 million (€479
million).
- temporary liquidity investments of €750 million, created through the segregated asset pool
relating to the special purpose entity UBI Finance (not in existence in December 2011),
consisting of French and Dutch government securities maturing in January and February
2013.
The increase over the twelve months (+€6 billion) was concentrated mainly in the first half of
the year and is almost entirely attributable to the trend of debt securities brought about, on
the one hand, by improving prices triggered by narrowing ten-year BTP-bund spreads from
September onwards and, on the other hand, by new investments in Italian government
securities (classified within fair value level one) by the Parent as part of the aforementioned
trading activities:
- in February, €2 billion nominal was invested in BTPs maturing by June 2015 4 (switched in
December in order to moderately extend their maturity date);
- in April, €1.5 billion nominal was invested in BOTs and €0.5 billion in CTZs (all sold and
replaced between late August and early September with investments of €1.5 billion in BTPs and
€0.5 billion in CTZs );
- in December, €0.4 billion nominal was invested in BTPs resulting from the switches carried
out at the end of the year.
Total debt securities held 5 as at 31 st December amounted to €13.6 billion and were composed
as follows: €12.6 billion within fair value level one (of which €11 billion in government
securities), €1 billion in level two (including €399 million in Italian treasury securities and
bonds issued mainly by Italian banks), and €7.5 million in level three.
The higher year-end fair values of securities classified within fair value level one helped to
increase the IW Bank portfolio by €61 million (consisting almost entirely of floating rate Italian
government securities), while the Centrobanca portfolio – composed mainly of investment
grade companies almost all classified (€353 million) within fair value level one – decreased in
value by €109 million as a result of the sale of “non-core” securities under a strategy that
prioritised the refocusing of assets on Italian corporate customers.
The relative section in this report may be consulted for information on the impacts on profit and
loss of movements in debt instruments, equity instruments and units in OICRs (collective
investment instruments).
Equity instruments 6 amounted to €294.6 million, mainly the result of sales/disposals of
investments and changes in the value of listed securities.
Regarding fair value level one – which stood at €154.8 million compared with €251.2 million at
December 2011 – the main changes related to:
• the sale of 72,329,014 shares in Intesa Sanpaolo, for which the investment at consolidated
level therefore fell to €148.4 million from €240.4 million at the end of 2011.
4 At the same time as that action was taken, the maturities on other BTPs held in portfolio were lengthened in the first quarter, by
means of a switching operation for a total of €1.2 billion nominal.
5 As at 31 st December 2012, there were no direct investments in ABS instruments. The only existing investments regarded own
securitisations, eliminated in the consolidation, totalling €29 million (€29.9 million in December 2011), composed as follows:
- Lombarda Lease Finance 4 (ABS instruments classified within AFS financial assets, fair value level one, held by UBI Banca)
totalling €2.8 million (€3.9 million);
- Orio Finance (RMBS instruments held by the Parent and classified within financial assets held for trading, fair value level three)
totalling €5.2 million (€5 million);
- Lombarda Lease Finance 4 amounting to €21 million, classified within loans and receivables and held by UBI Leasing (unchanged
compared with December 2011).
6 Shareholdings that are not classified as companies subject to control, joint control or significant influence are recognised here.
132

The sale was made in successive stages during the last months of the year, as follows: 7,000,000
shares in September, 9,100,000 shares in October and 56,229,014 shares in December. At the end of
2012, the Group held a total of 114,129,014 shares, equivalent to 0.74% of the share capital with voting
rights.
The disposal was authorised by the Management Board, bearing in mind the non-strategic importance
of the investment, as part of a wider action to reduce the volatility of investments in listed shares.
The disinvestment programme continued in 2013, with the sale of 33,400,000 shares (of which
30,900,000 in January), further reducing the UBI Banca Group’s stake to 0.52%;
the decrease in the fair value of A2A, which decreased to €4.9 million from €8.25 million at
the end of 2011, despite a partial recovery in the fourth quarter.
-In the first two months of 2013, 8,700,000 shares were sold, which therefore reduced the stake to
0.08% (i.e. 2,500,000 shares).
the disposal, in September, of Centrobanca’s stake in Greenvision Ambiente Spa (valued at
€2.5 million in December 2011), as a result of taking up the compulsory public tender offer;
the addition to this level of UBI Banca’s stake in Visa Inc. (€0.9 million) in July, due to the
merger of B@nca 24-7.
Fair value levels two and three 7 , totalling €139.8 million, in which unlisted equity instruments
are classified – almost 80% of which relate to UBI Banca – increased by €4.4 million, the
aggregate result of:
increases in fair value, relating in particular to S.A.C.B.O. (+€4.2 million), Autostrade
Lombarde (+€0.9 million), Istituto Centrale delle Banche Popolari (+€1.4 million) and SIA
(+€1.7 million);
disposal of equity investments, including: Risparmio e Previdenza (valued at €1.3 million in
December 2011), Siteba (€0.7 million) and Società per i mercati di Varese (€1.5 million).
Units of OICRs (collective investment instruments) – relating almost entirely to UBI Banca –
amounted to €92.2 million, a decrease of €9.1 million over the year, due mostly to the
impairment of the investment in the Centrobanca Sviluppo Impresa closed-end property fund
(a decrease to €15.3 million from €26.6 million at the end of 2011, the result, amongst other
things, of a partial redemption) and the Polis fund (a decrease from €12.4 million to €8.4
million).
The property funds included in the OICR portfolio totalled €15.5 million (approximately €20
million last year).
Held-to-maturity investments
Asset item 50, “Held-to-maturity investments” (HTM), are comprised of financial instruments that an entity
intends and is able to hold to maturity.
These assets are measured at amortised cost with the recognition of impairment losses, or recoveries in
value when the original reason for the impairment no longer exists, through profit or loss.
Held-to-maturity investments: composition
31.12.2012
Fair Value
Figure s in thousands of euro Carrying amount L 1 L 2 L 3 Total
31.12.2011
Carrying amount
Debt instruments 3,158,013 3,243,103 - - 3,243,103 -
of which: Italian government securities 3,158,013 3,243,103 - - 3,243,103 -
Financing - - - - - -
Total 3,158,013 3,243,103 - - 3,243,103 -
Held-to-maturity investments – which had not been held since 2009 and which had not been
acquired for two years in compliance with the tainting rule under IAS 39 – had a carrying
value of €3.2 billion as at 31 st December 2012.
7 For a more accurate reclassification of unlisted equities, instruments classed as fair value level two at 31 st December 2011 were
almost entirely transferred to fair value level three at 31 st December 2012.
133

This total consists exclusively of BTPs for a nominal amount of €3 billion with maturity in
November 2014. They were purchased in February as part of investments made at the
beginning of year, as outlined above.
Financial instruments held for trading
Financial assets held for trading
Asset item 20, “Financial assets held for trading” (HFT), comprises financial trading instruments “used to
generate a profit from short-term fluctuations in price”. They are recognised at fair value through profit or
loss – FVPL.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A –
Accounting Policies in the Notes to the Consolidated Financial Statements.
Financial assets held for trading: composition
31.12.2012 31.12.2011
Changes
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total amount %
A. On-balance sheet assets
Debt instruments 3,415,759 84 - 3,415,843 2,135,752 84 - 2,135,836 1,280,007 59.9%
of which: Italian government securities 3,378,631 - - 3,378,631 1,873,865 - - 1,873,865 1,504,766 80.3%
Equity instruments 13,455 - 5,370 18,825 12,811 - 85,850 98,661 -79,836 -80.9%
Units in O.I.C.R.
(collective investment instruments) 372 - 1,070 1,442 447 101 1,447 1,995 -553 -27.7%
Financing - - - - - 38,939 - 38,939 -38,939 -100.0%
Total (a) 3,429,586 84 6,440 3,436,110 2,149,010 39,124 87,297 2,275,431 1,160,679 51.0%
B. Derivative instruments
Financial derivatives 1,745 586,079 - 587,824 220 596,766 - 596,986 -9,162 -1.5%
Credit derivatives - - - - - - - - - -
Total (b) 1,745 586,079 - 587,824 220 596,766 - 596,986 -9,162 -1.5%
Total (a+b) 3,431,331 586,163 6,440 4,023,934 2,149,230 635,890 87,297 2,872,417 1,151,517 40.1%
As at 31 st December 2012, financial assets held for trading had risen to €4 billion, an increase
of €1.1 billion over the year, attributable to debt securities and in particular to a net
investment of €1.5 million in Italian government securities classified within fair value level
one, primarily by the Parent.
More specifically, changes in UBI Banca’s investments in Italian government securities during
2012 can be summarised as follows:
- the first quarter saw a net investment of €1 billion, the aggregate result of €1.8 billion in
matured and sold BTPs and BOTs outstanding at the end of 2011 and €2.8 billion in
purchases of BOTs;
- in the second quarter, an additional €1.6 billion was invested in short-term securities;
- in the third quarter natural maturities prevailed together with the total disposal of
outstanding instruments in order to partially extend their maturities (-€-2.1 billion in total);
- lastly, in the fourth quarter, as part of a switching operation that made it possible to realise
profits on sales of BTPs and BOTs totalling €1.3 billion, purchases of €2.3 billion were
made (mainly in BOTs).
The debt instruments included residual direct investments in “Asset Backed Securities”, in the portfolio
of the subsidiary, UBI Banca International Sa, consisting mainly of mortgage backed securities (MBS),
with the underlying principally of European origin amounting to €0.2 million (€0.3 in December 2011).
Equity instruments decreased to €18.8 million (€98.7 million last year) with contrasting and
varying performances within the item: fair value level one increased by €0.6 million to €13.4
million as a result of net new equity investments, while instruments classified within fair value
level three decreased to €80.5 million due mostly to the reclassification within “financial assets
134

designated at fair value” of the entire portfolio held by Centrobanca for private equity and
merchant banking purposes (€79 million at the end of 2011) 8 .
The residual amount as at 31 st December 2012, amounting to €5.4 million, relates exclusively
to the Parent’s shareholdings for private equity activities, which on aggregate decreased by
€1.4 million due to impairment losses on both Medinvest International (falling €1 million to
€2.3 million) and Manisa Srl (declining to €3.1 million from €3.5 million previously).
Investments in units in OICRs (collective investment instruments) – totalling €1.4 million –
related mainly to hedge funds purchased by UBI Banca before 30 th June 2007, classified
within fair value level three and amounting to €1.1 million. 9
Finally, financial assets classified as HFT also included derivative instruments amounting to
€588 million (€597 million last year), entirely of a financial nature, whose performance and
amount must be interpreted in strict relation to the corresponding item recognised within
financial liabilities held for trading.
At the end of 2011, loans of €39 million existed relating entirely to the positions pertaining to Prestitalia Spa.
***
Concerning the position with regard to the US-based companies of the Lehman Brothers Group:
- Pursuant to the “Chapter 11” procedure as set forth in the current United States Bankruptcy Code (the
“US Procedure”), UBI Banca has filed proof of claim applications against Lehman Brothers Holdings Inc.
(“LBHI”) and Lehman Brothers Special Financing Inc. (“LBSF”) in connection with derivatives contracts
which had been entered into with companies in the Lehman Brothers Group;
- Centrobanca has filed proof of claim applications against LBHI and LBSF under the US Procedure in
relation to derivatives contracts which it had entered into with LBSF;
During 2012 discussions were opened with Lehman Brothers representatives regarding the amounts due
according to the aforementioned proofs of claim by UBI Banca and Centrobanca. Discussions are still
ongoing and are expected ot be finalised in 2013.
As concerns the position with regard to Lehman Brothers International (Europe) (“LBIE”), an English
company belonging to the Lehman Brothers Group and subject to an administration order in the United
Kingdom, as reported in the 2010 and 2011 annual reports, on 17 th September 2010 UBI Banca filed a
proof of debt for £485,930.71 in relation to derivatives contracts that it had entered into with LBIE. During
2012 discussions were opened with LBIE administrators in order to come to an agreement over the amount
of the claim to be admitted among creditor claims, which are currently ongoing.
Finally, in relation to that position, as already reported, UBI Banca has filed a proof of claim under the US
Procedure against LBHI, in its capacity as the guarantor of LBIE according to the terms of the derivatives
contracts.
8 In accordance with the new classification and measurment criteria for shareholdings of less than 50%, as set out by the Parent in
the Board of Directors’ resolution of 17 th December 2012, on 16 th January 2013 the Board of Directors of Centrobanca resolved – in
view of the increasing heterogeneity of private equity and merchant banking holdings, and the minimal changes over the years – to
reclassify them, as of 31 st December 2012, in the accounting category “Fair Value Option”, thereby maintaining continuity of method
(fair value) and of impacts on valuations (recognition of changes in profit and loss).
9 The following sub-section, “financial assets designated at fair value”, may be consulted for a full picture of the Group’s investments
in hedge funds.
135

Financial liabilities held for trading
Financial liabilities held for trading: composition
31.12.2012 31.12.2011
Changes
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total amount %
A. On-balance sheet liabilities
Due to banks 1,163,870 - - 1,163,870 335,123 - - 335,123 828,747 247.3%
Due to customers - - - - 102,778 - - 102,778 -102,778 -100.0%
Debt instruments - - - - - - - - - -
Total (a) 1,163,870 - - 1,163,870 437,901 - - 437,901 725,969 165.8%
B. Derivative instruments
Financial derivatives 69 609,935 - 610,004 187 625,585 - 625,772 -15,768 -2.5%
Credit derivatives - - - - - - - - - -
Total (b) 69 609,935 - 610,004 187 625,585 - 625,772 -15,768 -2.5%
Total (a+b) 1,163,939 609,935 - 1,773,874 438,088 625,585 - 1,063,673 710,201 66.8%
At the end of 2012, financial liabilities held for trading totalled €1.8 billion, an increase of €0.7
billion compared to the preceding year, due to the performance of on-balance sheet liabilities
(+€0.7 billion), while financial derivatives remained practically unchanged.
Regarding on-balance sheet liabilities relating entirely to the Parent, the amounts due to
customers were eliminated and there was a significant increase in amounts due to banks,
consisting of uncovered short positions on mainly foreign – French and German – government
securities, totalling €1,110 million (€228 million at the end of 2011), as well as Italian
government securities, totalling €54 million (€210 million twelve months previously).
Financial assets designated at fair value
The item “financial assets designated at fair value” is comprised of financial instruments classified as such
in application of the fair value option (FVO). They are composed exclusively of units in OICRs (collective
investment instruments) and include the remaining units in hedge funds subscribed after 1 st July 2007.
These financial assets are recognised at fair value through profit or loss.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A –
Accounting Policies in the Notes to the Consolidated Financial Statements.
Financial assets designated at fair value: composition
31.12.2012 31.12.2011
Changes
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total amount %
Debt instruments - - - - - - - - - -
Equity instruments - 2,812 74,248 77,060 - - - - 77,060 -
Units in O.I.C.R.
(collective investment instruments) 109,664 - 13,717 123,381 104,846 - 21,328 126,174 -2,793 -2.2%
Financing - - - - - - - - - -
Total 109,664 2,812 87,965 200,441 104,846 - 21,328 126,174 74,267 58.9%
As at 31 st December 2012, financial assets designated at fair value amounted to €200.4
million and consisted of:
- equities amounting to €77.1 million, consisting of the shares held by Centrobanca for
merchant banking and private equity activities (classified in December 2011 under equities
held for trading, totalling €79 million). The equity investment portfolio of the Group’s
Corporate & Investment Bank declined compared with the previous year by over €2 million,
due to the disposal of an asset (valued at €1.6 million at the end of 2011) and the net
impacts of year-end valuations;
136

- units in OICRs (collective investment instruments) classified in levels one and three,
totalling €123.4 million. The result is the aggregate result of opposing trends among the
various components: listed Tages funds classified within level one increased €4.9 million
over the twelve months to €109.7 million, while residual investments in hedge funds
classified within fair value level three fell €7.7 million, partly due to redemptions during the
course of the year.
With regard to hedge funds only, inclusive of the remaining amount of €1.1 million
recognised within financial assets held for trading again in fair value level 3, the portfolio
held by UBI Banca as at 31 st December 2012 amounted to €14.8 million, compared with
€22.8 million the previous year. Management accounting figures show that redemptions of
more than €4 million were received during the year, net of redemption fees.
As concerns redemption applications, those same management accounting figures again show that at
the end of 2012 four funds, amounting to €6.6 million, were expected to pay and/or had declared that
they were implementing a deferred redemption plan (known as a "gate") – as allowed for in their
respective regulations and another 17 funds have created “side pockets” for an amount of €8.2 million.
***
As concerns the Madoff affair and the court action initiated by UBI Banca against the fund Thema
International Plc and the relative depository bank, HSBC Institutional Trust Services Ltd, before the
Commercial Court of Dublin, in December 2012 UBI Banca and HSBC Institutional Trust Services Ltd
signed a settlement agreement under which UBI Banca received €3 million plus costs and legal fees. As a
result of the agreement of the aforementioned settlement, the proceedings are now continuing exclusively
between UBI Banca and the fund Thema International Plc.
In the meantime, UBI Banca is monitoring the class actions brought in the USA and the liquidation
proceedings in progress in the British Virgin Islands brought against three funds attributable to Madoff,
Fairfield Sigma Ltd, Kingate Euro Ltd and Kingate Global Ltd, in order to protect UBI Banca’s creditor rights
also with respect to these actions.
***
The credit recovery process is still ongoing as concerns the Dynamic Decisions Growth Premium 2X fund, in
liquidation — in which regard an agreement has been signed with the receivers, which gives UBI Banca
preference in the redemption of sums recovered in the liquidation, in return for financing paid to the
receivers.
137

Exposure to sovereign debt risk
UBI Banca Group: exposures to sovereign debt risk
Country / portfolio of classification
31.12.2012 31.12.2011
Figures in thousands of euro
Nominal
amount
Carrying
amount
Fair value
Nominal
amount
Carrying
amount
Fair Value
- Italy 18,241,692 18,804,673 18,889,763 9,201,954 8,512,083 8,512,083
financial assets and liabilities held for trading (net exposure)
3,365,175 3,324,579 3,324,579 1,674,474 1,664,216 1,664,216
available-for-sale financial assets 10,990,625 11,429,045 11,429,045 6,649,895 5,964,173 5,964,173
held-to-maturity investments 3,000,000 3,158,013 3,243,103 - - -
loans and receivables 885,892 893,036 893,036 877,585 883,694 883,694
- Spain 79,234 79,240 79,240 117,470 117,470 117,470
financial assets and liabilities held for trading (net exposure)
200 206 206 - - -
loans and receivables 79,034 79,034 79,034 117,470 117,470 117,470
- Germany -390,408 -422,323 -422,323 15,150 9,189 9,189
financial assets and liabilities held for trading (net exposure)
-390,408 -422,323 -422,323 15,005 9,044 9,044
loans and receivables 145 145 145
- France -168,867 -194,511 -194,511 -1,999 -2,909 -2,909
financial assets and liabilities held for trading (net exposure)
-648,867 -674,536 -674,536 -1,999 -2,909 -2,909
available-for-sale financial assets 480,000 480,025 480,025 - - -
- Holland 270,010 270,033 270,033 10 10 10
available-for-sale financial assets 270,000 270,023 270,023 - - -
loans and receivables 10 10 10 10 10 10
- Argentina 2,591 561 561 2,941 705 705
financial assets and liabilities held for trading (net exposure)
2,591 561 561 2,941 705 705
- Austria 791 946 946 - - -
financial assets and liabilities held for trading (net exposure)
791 946 946 - - -
Total on-balance sheet exposures 18,035,043 18,538,619 18,623,709 9,335,526 8,636,548 8,636,548
On 28 th July 2011, the European Securities and Markets Authority (ESMA) published document No. 2011/266 relating to information on sovereign debt risk
to be disclosed in annual and half year financial reports prepared by listed companies that adopt IFRS.
Details of the exposures of the UBI Banca Group are given on the basis that, according to the instructions issued by this European supervisory authority,
“sovereign debt” is defined as debt instruments issued by central and local governments and by government entities and also as loans granted to them.
The book value of the sovereign debt risk exposures of UBI Banca Group as at 31 st December
2012 had risen to €18.5 billion, a reflection of investments made by the Parent during the
year.
The exposure is almost entirely concentrated in Italy: in addition to financing for Italian public
administrations amounting to €893 million (stable compared with the €883 million in 2011),
the UBI Banca Group also held Italian government securities amounting to €18.8 billion, of
which €11.4 billion classified within available-for-sale financial assets, €3.2 billion within
held-to-maturity investments and €3.3 billion within financial assets held for trading
(calculated net of uncovered short positions).
Regarding sovereign exposures to other countries, other than the limited exposure to Spain
(€79 million relating to lending activities, above all through factoring operations carried out by
UBI Banca International in the country), Argentina (€0.6 million) and Austria (€0.9 million),
uncovered positions were found in Germany (-€-422 million) and France
(-€675 million), as part of normal trading activities, as well as investments in Dutch (€270
million) and French (€480 million) government securities maturing in January/February 2013,
by way of temporary use of the liquidity created by the segregated asset pool relating to the
special purpose entity UBI Finance.
138

***
The table below shows the distribution by maturity of Italian government securities held in
portfolio, net of the relative uncovered short positions.
The average residual maturity of the AFS portfolio is 7.3 years and that of the HTM portfolio is
1.9 years, while that for Italian government securities classified in the HFT portfolio is 0.9
years.
The comparison with the equivalent figures for 2011 shows the effect of the aforementioned
investments made during 2012.
Specifically, it shows how the increase in the size of the investment has been accompanied by
the polarisation of maturities up to three years, which accounts for 60% of the entire
government securities portfolio. In detail:
the “six months to one year” category – which mostly relates to the trading portfolio – has
risen from 9.8% to 17.4% due to purchases of securities (mainly BOTs) with maximum
maturities of December 2013;
the “one year to three years” category increased from 24.4% to 41.1% as a result of the new
investments classified as held-to-maturity and the switching operations carried out to
extend maturities in the available-for-sale portfolio during the second half of the year.
Investments with the longest maturities (over five years) – approximately 50% of the AFS
portfolio – include €5.6 billion of BTPs (hedged in part by asset swaps), which account for
around a third of the total portfolio (49% in December 2011).
Maturities of Italian government securities
31.12.2012 31.12.2011
Figures in thousands of euro
Financial
assets held for
trading (*)
Available-forsale
financial
assets
Held-to-maturity
investments
Total %
Financial
assets held for
trading (*)
Available-forsale
financial
assets
Held-to-maturity
investments
Total %
Up to six months 311,579 252 - 311,831 1.7% 385,154 107,971 - 493,125 6.5%
Six months to one year 2,764,630 351,138 - 3,115,768 17.4% 750,458 - - 750,458 9.8%
One year to three years 246,672 3,961,668 3,158,013 7,366,353 41.1% 451,206 1,409,166 - 1,860,372 24.4%
Three years to five years 1,250 1,472,961 - 1,474,211 8.2% 77,171 711,089 - 788,260 10.3%
Five years to ten years 273 3,216,789 - 3,217,062 18.0% 216 1,786,281 - 1,786,497 23.4%
Over ten years 175 2,426,237 - 2,426,412 13.6% 3 1,949,666 - 1,949,669 25.6%
Total 3,324,579 11,429,045 3,158,013 17,911,637 100.0% 1,664,208 5,964,173 - 7,628,381 100.0%
On 12 th November 2012, the
European Securities and Markets
Authority (ESMA) published
document No. 725/2012 designed to
improve the financial information to
be disclosed by listed companies
that adopt IFRS. The European
supervisory authority called for
greater transparency on exposures
to credit risk represented by
securities other than sovereign debt.
Accordingly, a table summarising
the total debt instruments recorded
in UBI Banca Group’s assets
(available-for-sale financial assets,
financial assets held for trading,
loans and advances to banks, loans
and advances to banks, and loans
and advances to customers) is
provided below.
Debt instruments other than government securities recognised within consolidated
assets
figures in thousands of euro
31.12.2012
Issuer Nationality Carrying amount Fair Value Nominal amount
Corporate Italy 165,415 165,415 160,918
Corporate Jersey 20,314 20,314 19,150
Corporate Holland 78,741 78,741 78,472
Corporate United States 222,919 223,093 229,632
Corporate Luxembourg 7,366 7,366 14,661
Corporate Argentina 4 4 11
Corporate United Kingdom 10,465 10,465 9,190
Corporate India 17 17 15
Corporate Spain 38,071 38,071 35,065
Corporate Hungary 10,260 10,260 10,000
Corporate France 43,523 43,523 40,000
Corporate Switzerland 6,081 6,081 6,081
Total Corporate 603,176 603,350 603,195
Banking France 79,969 79,969 73,530
Banking Germany 2 2 3
Banking Italy 679,646 679,693 682,537
Banking Luxembourg 52,051 52,051 50,000
Banking United Kingdom 74,374 74,374 70,000
Banking Sweden 37,869 37,869 33,890
Banking Republic of Cyprus 3,818 3,818 9,500
Banking United States 137,787 137,787 142,418
Banking Switzerland 3,125 3,125 3,125
Total Banking 1,068,641 1,068,688 1,065,003
E.I.B. Luxembourg 1,629 1,629 1,485
Total Supranational 1,629 1,629 1,485
Total debt instruments 1,673,446 1,673,667 1,669,683
139

In order to complete the ESMA’s disclosure requirements, in December 2012 (as also in
December 2011), UBI Banca had no outstanding credit derivative contracts (credit default
products) and was not party to any transactions involving these instruments during the year
to increase its exposure or to acquire protection.
Derivative financial instruments
TRADING ACTIVITIES
As shown in the table “A.1 Supervisory trading portfolio: end of period and average notional
amounts” in the Notes to the Consolidated Financial Statements, Part E, the notional value of
derivatives recognised in the trading portfolio at the end of the year was €25.3 billion (€34.1
billion at the end of 2011).
Of this, €10.8 billion related to direct transactions with customers wishing to protect
themselves from interest rate or exchange rate risk, which were then “balanced” by entering
into symmetrical contracts with market counterparties. The residual amount relates to trading
on own account.
The measurement at fair value was essentially the same both for contracts entered into with
customers and for those entered into on own behalf: a total of €587 million was recognised as
financial assets held for trading and €610 million as financial liabilities held for trading.
HEDGING ACTIVITIES
As detailed in the table “A.2.1 Banking portfolio: end of period and average notional amounts –
for hedging” in the Notes to the Consolidated Financial Statements, Part E, the notional value
of hedging derivatives held in December 2012 amounted to €47.5 billion (€49 billion at the end
of 2011).
These mainly consisted of instruments to hedge the interest rate risk linked to debt securities,
and in particular fixed rate bonds and securities classified as available-for-sale.
In order to properly understand overall trading in these instruments, their measurement at
fair value must be considered in combination with the fair value of the corresponding hedged
assets/liabilities.
More specifically, the overall positive fair value of hedging derivatives (€1.5 billion) must be
considered in combination with the delta fair value relating to exchange rate risk on bonds
issued (€1.3 billion); the overall negative fair value shown (€2.2 billion) must, instead, be
linked to the delta fair value relating to the interest rate risk of loans to customers and
available-for-sale securities (approximately €2 billion).
THE EARLY-2013 OPERATION
The Group’s strategy for hedging interest rate risk has traditionally been to use normal fixedrate
hedges for assets and liabilities through interest rate derivatives contracts.
In early 2013 this strategy was altered and changed into a natural hedge model, making it
possible to manage exposure to interest rate risk with less recourse to derivatives contracts. In
the early weeks of 2013 – while essentially maintaining interest rate risk unchanged – hedging
activities were rationalised by simultaneously eliminating hedges of both assets and liabilities.
The result of this rationalisation process was the elimination of approximately 700 interest
rate derivatives out of an original total of 1,500, equivalent to a nominal value of around €18
billion.
The operation described will provide the following benefits:
- significant operational simplification, combined with less variable profit and loss due to the
effect of fair value valuations of hedge accounting relationships;
- an interest rate position that, until 2017 and limited to items that are no longer hedged,
will improve the interest income, especially if the Euribor rate rises (since more fixed-rate
liability items have been eliminated than fixed-rate asset items).
140

Exposures to some types of products
This section provides an update of the position of the UBI Banca Group with regard to some
types of financial instruments, which since the subprime mortgage crisis in 2007, are now
considered at high risk.
Special purpose entities (SPEs)
The involvement of the UBI Group in special purpose entities (SPEs 10 ) concerns the following types:
- entities formed to allow the issue of preference shares;
- conventional securitisation transactions 11 performed by Group member companies in accordance with
Law No. 130 of 30 th April 1999;
- the issue of covered bonds, in accordance with Art. 7 bis of Law No.130/1999.
Special purpose entities existed as at 31 st December 2012, within the UBI Banca Group for the issue of
preference shares used as innovative equity instruments on international capital markets. These issues,
which current supervisory regulations allow to be included in the consolidated tier one capital, take the
form of non redeemable instruments and they have particularly junior levels of subordination. The
preference shares included in the tier one capital amounted to €337.747 million and they were issued by
a number of the banks which formed the Group prior to the merger.
The list of SPEs used for the securitisations in which the Group is involved is as follows:
Orio Finance Nr. 3 Plc,
Albenza 3 Srl,
Lombarda Lease Finance 4 Srl,
UBI Lease Finance 5 Srl,
24-7 Finance Srl,
UBI Finance 2 Srl,
UBI Finance 3 Srl,
UBI SPV BPA 2012 Srl,
UBI SPV BPCI 2012 Srl,
UBI SPV BBS 2012 Srl.
The 24-7 Finance Srl securitisation relating to personal and special purpose loans was closed in May
2012. Only the mortgage operation therefore existed as at 31 st December 2012.
In the first half, three new securitisations were launched with the transfer to three special purpose
entities named UBI SPV BPA 2012 Srl, UBI SPV BPCI 2012 Srl and UBI SPV BBS 2012 Srl of loans to
small to medium-sized enterprises (according to the EU regulatory definition), held by Banca Popolare di
Ancona, Banca Popolare Commercio and Industria e Banco di Brescia respectively.
The transfer of the loans has been completed for all three transactions with effect for accounting
purposes from 1 st June 2012 and it involved assets totalling €2.76 billion.
The purchase of the loans by the special purpose entities was financed by deferring payment of the
transfer price, which was paid when the securities were issued, which occurred on 30 th October 2012.
The total nominal amount of the securities issued amounted to €2.76 billion as at 31 st December 2012.
The securitisations concerning the special purpose entities, 24-7 Finance Srl, UBI Lease Finance 5 Srl,
UBI Finance 2 Srl, UBI Finance 3 Srl, UBI SPV BPA 2012 Srl, UBI SPV BPCI 2012 Srl and UBI SPV BBS
Srl were performed in order to create a portfolio of assets eligible as collateral for refinancing with the
European Central Bank, consistent with Group policy for the management of liquidity risk.
They were carried out on the following: performing residential mortgages of the former B@nca 24-7 (24-7
Finance Srl); UBI Leasing lease contracts (UBI Lease Finance 5 Srl); performing loans to small to
medium-sized enterprises of Banco di Brescia (UBI Finance 2 Srl); performing loans to businesses of the
Banca Popolare di Bergamo (UBI Finance 3 Srl); and performing loans to small to medium-sized
enterprises of Banca Popolare di Ancona (UBI SPV BPA 2012 Srl), Banca Popolare Commercio e Industria
(UBI SPV BPCI 2012 Srl) and Banco di Brescia (UBI SPV BBS 2012 Srl).
In the securitisations in question, the senior securities issued by the entities – assigned a rating – are
listed and can be used for refinancing operations with the ECB.
10 Special Purpose Entities (SPEs) are special companies formed to achieve a determined objective.
11 With normal securitisations the originator sells the portfolio to a special purpose entity which then issues tranches of asset-backed
securities in order to purchase it. With a synthetic securitisation, on the other hand, the originator purchases protection for a pool
of assets and transfers the credit risk attaching to the portfolio – either fully or in part – by using credit derivatives such as CDSs
(credit default swaps) and CLNs (credit-linked notes) or by means of personal guarantees.
141

The special purpose entities listed above are included in the consolidated accounts because these
companies are in reality controlled, since their assets and liabilities were originated by Group member
companies.
Finally, with regard to the issue of covered bonds, the SPEs UBI Finance Srl and UBI Finance CB 2 Srl
(the latter was created on 20 th December 2011 and consolidated from 31 st March 2012) were created for
the purchase of loans from banks (residential mortgages for the former and commercial mortgages for the
latter) in order to create cover pools to back the covered bonds issued by the Parent, in accordance with
the structure of these operations.
The issue of covered bonds is designed mainly to diversify sources of funding for the Group and also to
contain its cost (the first programme backed by residential mortgages), although it is also used to create
assets eligible for refinancing (the second programme backed by commercial mortgages). As at 31 st
December 2012, UBI Banca had issued covered bonds for a total of €6.5 billion nominal 12 under the first
programme with a maximum issuance of €10 billion, and also for a total of €2.3 billion nominal (all selfretained)
under the second programme with a maximum issuance of €5 billion. The originator banks
issued subordinated loans to the SPE UBI Finance Srl and to the SPE UBI Finance CB2 Srl, equal to the
value of the loans progressively transferred, in order to fund the purchase. At the end of December these
loans amounted to approximately €11.6 billion (€9.72 billion in December 2011) for UBI Finance Srl and
€3 billion for UBI Finance CB2.
In this respect, exposures are present in the Group which relate solely to the special purpose entities
formed for the securitisations mentioned and they all fall within the scope of the consolidation.
Ordinary lines of liquidity existed as at 31 st December 2012, granted by the Parent to the SPE Orio
Finance Nr.3 Plc for a total of €5 million, but not drawn on (nor were they drawn on as at 31 st December
2011). Ordinary lines of liquidity also existed, granted to the entity 24-7 Finance Srl for a total of
approximately €24.4 million fully drawn on (€227.4 million entirely drawn down at the end of 2011).
Following the downgrades by the rating agencies Moody’s and Fitch on 5 th and 11 th October 2011
respectively, UBI Banca made a liquidity facility amount available to UBI Finance 2 of €16.3 million and
to UBI Finance 3 of €28 million. On the other hand, the originator Banca Popolare di Bergamo had
disbursed a subordinated loan of €50 million, designed to cover potential payouts connected with specific
risks (“set-off risk” relating to the securitised assets): the latter was increased in 2012 by a further €72.5
million to cover the same risks underlying the revolving portfolios transferred in 2012.
The following subordinated loans were also disbursed by the originator banks for the three transactions
completed in 2012 when the securities were issued: €23 million to UBI SPV BBS 2012, €27 million to
UBI SPV BPA 2012 and €26 million to UBI SPV BPCI.
The first covered bond programme (UBI Finance) and all the securitisations (except for three structured
transactions in 2012: UBI SPV BBS, UBI SPV BPA and UBI SPV BPCI) are hedged by swap contracts
where the main objective is to normalise the flow of interest generated by the transferred or securitised
portfolio and to concretely protect the special purpose entity from interest rate risk. As a consequence of
the downgrading of UBI Banca in October 2011, it became necessary to provide margin deposits for the
swap contracts entered into between the Parent or other Group companies and the SPEs for the
securitisations and the covered bond programme.
Margin accounts were opened with an eligible institution which was the London Branch of Bank of New
York Mellon (ratings: Moody’s Aa1 stab/S&P AA- neg/Fitch AA stab). The margin deposits were paid
starting on 26 th October 2011 for an initial total amount of a little more than €1,015 million, of which
€717 million for the covered bond programme and €298 million for the securitisations.
The total balance in December 2012 was €1,075 million, of which €866 million for the covered bond
programme (including approximately €750 million consisting of securities eligible as collateral for the
purposes of the CSA to the Master Agreement for the derivatives contracts underlying the programme)
and €209 million for the internal securitisation transactions.
No exposures exist to special purpose entities or other conduit operations with underlying securities or
investments linked to United States subprime and Alt-A loans.
The total assets of SPEs relating to securitisations and to covered bonds amounted to €24.8 billion
(€21.6 billion at the end of 2011). Details by asset class are given in the table below:
12 Of which €0.75 billion self-retained.
142

SPE underlying assets
Figures in millions of euro
Classification of underlying assets of the securitisation 31.12.2012
31.12.2011
Measurement Gross of Net of Gross of Net of
Entity Total assets Class of underlying asset Accounting criteria impairment impairment impairment impairment
Classification adopted losses losses losses losses
Albenza 3 Srl 12.2 Mortgages L&R CA 11.2 11.2 22.2 22.1
24-7 Finance 1,703.6 Mortgages L&R CA 1,486.4 1,479.3 1,688.2 1,681.4
24-7 Finance - Salary-backed loans L&R CA - - - -
24-7 Finance - Consumer loans L&R CA - - 1,322.0 1,283.9
Lease Finance 4 103.5 Leasing L&R CA 80.0 79.3 143.9 143.4
UBI Lease Finance 5 3,440.1 Leasing L&R CA 3,106.9 3,106.9 3,753.3 3,753.3
Orio Finance 3 12.2 RMBS Notes (ALBENZA 3 Srl) L&R CA 12.2 12.2 23.1 23.1
UBI Finance 11,258.5 Mortgages L&R CA 11,058.5 11,043.8 9,570.2 9,554.1
UBI Finance CB2 2,747.4 Mortgages L&R CA 2,706.1 2,698.9 - -
UBI Finance 2 839.7 Loans to SMEs L&R CA 754.9 752.2 949.9 946.8
UBI Finance 3 2,248.2 Loans to businesses L&R CA 2,143.1 2,135.3 2,047.0 2,039.6
UBI SPV BBS 2012 779.2 Loans to SMEs L&R CA 771.5 768.3 - -
UBI SPV BPA 2012 890.0 Loans to SMEs L&R CA 885.4 881.0 - -
UBI SPV BPCI 2012 733.3 Loans to SMEs L&R CA 733.8 731.2 - -
Total impaired assets, mortgages and loans 731.3 643.3 668.5 393.6
Total impaired assets, leasing 388.5 353.3 195.6 179.0
TOTAL 24,767.9 24,869.8 24,696.2 20,383.9 20,020.3
The distribution by geographical location and credit rating of the securities issued relating to the
securitisations by the special purpose entities Lombarda Lease Finance 4 and UBI Lease Finance 5 are
given below:
Securitisations of UBI Leasing: distribution of the underlying assets and of the securities issued
(31 st December 2012)
DISTRIBUTION BY GEOGRAPHICAL AREA
DISTRIBUTION OF ASSETS BY CREDIT RATING
23.20%
4.04%
5.80%
10.33%
1.35%
4.41%
7.76%
1.97%
51.10%
75.45%
9.88%
4.71%
Lombardy Veneto Piedmont
Latium Trentino Alto Adige Emilia Romagna
Campania Marches Other
AAA BBB unrated
Exposure in ABS, CDO, CMBS and other structured credit products
As at 31 st December 2012, the UBI Banca Group held direct investments in ABS instruments for a
residual amount of €0.2 million (€0.3 million in December 2011), consisting of ABS instruments
recognised within financial assets held for trading, relating to the subsidiary UBI Banca International,
with underlying of European origin.
Own securitisations, eliminated in the consolidation, totalled €10.4 billion and related to ABS
instruments (of which €7.4 billion of senior notes) used as collateral for advances from the ECB. Further
details are provided in the previous section, “The interbank market and the liquidity situation”, which
may be consulted.
In addition to the direct exposures, hedge funds or funds of hedge funds were identified among the
assets present in Group portfolios with exposures to CDO and CMBS structured credit products.
Investment in these funds as at 31 st December 2012 amounted to approximately €124 million (net of
impairment losses/reversals) compared to €105 million at the end of 2011 and presented low
143

percentages of exposure. Total indirect exposure to CDOs and CMBSs amounted to approximately €3.3
million, (€0.3 million in December 2011).
Other subprime, Alt-A and monoline insurer exposures
Again at the end of December 2012, indirect exposures to subprime and Alt-A mortgages and to monoline
insurers existed that were contained in hedge funds or funds of hedge funds held by the Parent. The
percentages of exposure to subprime and Alt-A mortgages were again low (no fund had a percentage
exposure of greater than 0.4%), with total exposure to subprime and Alt-A mortgages and to monoline
insurers of approximately €0.3 million (€0.3 million as at 31 st December 2011).
Leveraged Finance
The term leveraged finance is used in the UBI Banca Group to refer to finance provided for a company or
an initiative which has debt that is considered higher than normal on the market and is therefore
considered a higher risk. Usually this finance is used for specific acquisition purposes (e.g. the
acquisition of a company by other companies – either directly or through vehicles/funds – owned by
internal [buy-in] or external [buy-out] management teams). They are characterised by “non investment
grade” credit ratings (less than BBB-) and/or by remuneration that is higher than normal market levels.
Leveraged finance business is performed by Centrobanca and is regulated by the Group Credit Risk
Policy designed to combine the achievement of budget targets in terms of business volumes and profits
with appropriate management of the attached risks. Operations are based on a maximum investment
ceiling, reviewed annually and allocated on the basis of rating classes for operations according to
predefined maximum percentages The system of limits is calculated to seek appropriate diversification
both in terms of sector and the concentration of risk on single company or Group counterparties.
The table below summarises on- and off-balance sheet exposure for leveraged finance by Centrobanca.
That financing as a percentage of total Centrobanca financing was 9.95% (11.78% as at 31 st December
2011). On- and off-balance sheet amounts shown at the end of 2012 relate to 149 positions for an
average net exposure per position of €4.4 million. There were two positions with exposures of greater
than €20 million (all on-balance sheet loans) corresponding to approximately 10.4% of the total.
Centrobanca leveraged finance business
figures in millions of euro
On-balance sheet exposure
gross exposure to customers
Unsecured guarantees
gross exposure to customers
used impairment used impairment
31st December 2012
31st December 2011
644.7 -20.8 27.1 -2.3
857.2 -14.1 46.2 -3.9
The charts below show the distribution of leveraged exposures by geographical area and by sector.
EXPOSURE BY GEOGRAPHICAL AREA
Distribution of Centrobanca leveraged exposures
(the figures as at 31 st December 2011 are given in brackets)
EXPOSURE BY SECTOR
Other
3% (8%)
Europe
21% (18%)
commerce and
services
32% (23%)
Italy
76% (74%)
manufacturing
sector
68% (77%)
Residual exposures also exist within the UBI Banca Group – approximately €185 million (€218 million as
at 31 st December 2011) – relating to leveraged finance transactions performed before this type of
business was centralised at Centrobanca. They were performed by the network banks relating to a total
of 24 positions with average exposure per transaction of €7.7 million.
144

The distribution by bank is as follows: Banco di Brescia (€91 million), Banca Popolare di Bergamo (€55.3
million), Banca Popolare Commercio e Industria (€8.3 million), Banca Regionale Europea (€15.5 million)
and Banca di Valle Camonica (€14.6 million).
Financial derivative instruments for trading with customers
The analysis performed for internal monitoring purposes confirms that the risks assumed by
customers continue to remain generally low and they outlined a conservative profile for UBI
Group business in OTC derivatives with customers.
In detail an update of the quantitative data at the end of December 2012 showed the following:
- an increase in the total negative mark-to-market for customers, which stood at 6.95% of
the notional amount of the contracts compared to 4.95% at the end of December 2011. The
worsening of the mark-to-market amounts is closely connected with the European financial
crisis, which caused a generalised reduction in interest rate levels;
- the notional amount for existing contracts, totalling €6.399 billion, was attributable to
interest rate derivatives amounting to €5.882 billion and currency derivatives amounting to
€0.496 billion, plus a marginal notional amount for commodities contracts of €21 million;
- transactions in hedging derivatives account for approximately 98.4% of the notional
amount traded for interest rate derivatives and 93.3% of the notional amount for currency
derivatives;
- the total net mark-to-market (interest rate, currency and commodities derivatives)
amounted to approximately -€438 million. Those contracts with a negative mark-to-market
for customers were valued at -€445 million.
In 2011 the Group incorporated regulations for its business in OTC derivative instruments with
customers in its “Policy for the trading, sale and subscription of financial products” and the relative
regulations to implement it as follows:
• customer segmentation and classes of customers associated with specific classes of products, stating
that the purpose of the derivatives transactions must be hedging and that transactions containing
speculative elements must be of a residual nature;
• rules for assessing the appropriateness of transactions, defined on the basis of the products sold to
each class of customer;
• principles of integrity and transparency on which the range of OTC derivatives offered to customers
must be based, in compliance with the guidelines laid down by the Italian Banking Association (and
approved by the Consob) for illiquid financial products;
• rules and processes for assessing credit exposure, which grant credit lines with maximum limits for
trading in interest rate and currency derivatives and credit lines on each single transaction for
commodities derivatives or derivatives with private individual retail counterparties, while counterparty
risk is assessed on the basis of Bank of Italy circular No. 263/2006;
• rules and processes for managing restructuring operations, while underlining their exceptional
nature;
• the rules and processes for the settlement of transactions in OTC derivative instruments with
customers that are subject to verbal or official dispute;
• the catalogue of products offered to customers and the relative credit equivalents, updated with
respect to previous versions.
145

OTC interest rate derivatives: details of instrument types and classes of customer
Product
class
1
Type of instrument
Customer classification
Number of
transactions
Data as at 31st December 2012
Notional MtM of which negative MtM
Purchase of caps Qualified 21 47,451,311.29 28,266.98 -
3: Professional 48 74,213,734.98 27,315.64 -
2: Non private individual retail 1,430 372,583,177.84 748,569.75 -
1: Private individual retail 1,330 151,506,189.50 304,590.89 -
Purchase of caps Total 2,829 645,754,413.61 1,108,743.26 -
Capped swaps Qualified 35 138,230,671.73 -3,465,151.88 -3,465,151.88
3: Professional 63 255,216,669.91 -8,920,043.55 -8,920,043.55
2: Non private individual retail 1,277 828,744,207.30 -23,381,997.68 -23,381,997.68
1: Private individual retail 2,466 268,195,171.00 -5,504,798.50 -5,504,798.50
Capped swaps Total 3,841 1,490,386,719.94 -41,271,991.61 -41,271,991.61
IRS Plain Vanilla Qualified 41 144,055,641.47 -14,405,952.02 -14,405,952.02
3: Professional 277 1,486,046,271.87 -152,138,394.77 -152,180,741.95
2: Non private individual retail 1,033 1,657,570,462.64 -171,744,288.65 -171,744,288.65
1: Private individual retail 233 45,146,743.36 -2,950,867.99 -2,950,867.99
IRS Plain Vanilla Total 1,584 3,332,819,119.34 -341,239,503.43 -341,281,850.61
IRS Step Up Qualified 3 3,817,079.52 -622,441.54 -622,441.54
3: Professional 19 82,401,540.21 -10,174,875.69 -10,174,875.69
2: Non private individual retail 58 124,831,465.82 -30,519,034.34 -30,528,593.27
1: Private individual retail 2 1,216,764.57 -157,748.20 -157,748.20
IRS Step up Total 82 212,266,850.12 -41,474,099.77 -41,483,658.70
Purchase of collars Qualified 1 6,234,379.90 -526,986.29 -526,986.29
3: Professional 1 7,500,000.00 -362,954.99 -362,954.99
2: Non private individual retail 7 10,101,456.74 -659,464.59 -659,464.59
Purchase of collars Total 9 23,835,836.64 -1,549,405.87 -1,549,405.87
Total Class 1: hedging derivatives 8,345 5,705,062,939.65 -424,426,257.42 -425,586,906.79
Class 1: % of Group total 99.06% 96.98% 97.28% 97.27%
2
Purchase of caps con KI/KO 3: Professional 2 20,845,989.88 -340,876.22 -340,876.22
2: Non private individual retail 4 5,214,272.43 -61,506.64 -61,506.64
Purchase of caps with KI/KO Total 6 26,060,262.31 -402,382.86 -402,382.86
Purchase of collars with KI/KO 3: Professional 1 1,500,000.00 -15,680.78 -15,680.78
2: Non private individual retail 2 5,395,067.69 -1,104,636.73 -1,104,636.73
Purchase of collars with KI/KO Total 3 6,895,067.69 -1,120,317.51 -1,120,317.51
IRS Convertible Qualified 1 8,000,000.00 -747,677.19 -747,677.19
3: Professional 7 14,024,332.91 -577,761.36 -577,761.36
2: Non private individual retail 14 27,980,285.44 -2,178,448.87 -2,178,610.72
IRS Convertible Total 22 50,004,618.35 -3,503,887.42 -3,504,049.27
Total Class 2: hedging derivatives with possible exposure 31 82,959,948.35 -5,026,587.79 -5,026,749.64
to contained financial risks
Class 2: % of Group total 0.37% 1.41% 1.15% 1.15%
3 a
IRS Range 3: Professional 5 15,104,950.73 -961,764.49 -961,764.49
2: Non private individual retail 36 69,460,854.60 -5,595,968.21 -5,595,968.21
1: Private individual retail 1 500,000.00 -11,989.04 -11,989.04
IRS Range Total 42 85,065,805.33 -6,569,721.74 -6,569,721.74
Total Class 3a: partial hedging derivatives and 42 85,065,805.33 -6,569,721.74 -6,569,721.74
maximum pre-established loss
3 b
Gap floater swaps 2: Non private individual retail 2 2,600,345.00 -320,518.41 -324,094.03
Gap floater swaps Total 2 2,600,345.00 -320,518.41 -324,094.03
IRS Range Stability 3: Professional 1 4,500,000.00 36,120.69 -
2: Non private individual retail 3 2,300,000.00 15,050.21 -
IRS Range stability Total 4 6,800,000.00 51,170.90 -
Total Class 3b: speculative derivatives and maximum 6 9,400,345.00 -269,347.51 -324,094.03
unquantifiable loss
Total Class 3: derivatives not for hedging 48 94,466,150.33 -6,839,069.25 -6,893,815.77
Class 3: % of Group total 0.57% 1.61% 1.57% 1.58%
Total UBI Banca Group 8,424 5,882,489,038.33 -436,291,914.46 -437,507,472.20
146

OTC currency derivatives: details of instrument types and classes of customer
Data as at 31st December 2012
Product
class
1
Type of instrument
Customer classification
Number of
transactions
Notional
MtM
of which negative
MtM
Vanilla currency options purchased by the customer Qualified 10 990,791.70 9,289.46 -
Vanilla currency options purchased by the customer Total 10 990,791.70 9,289.46 -
Forward synthetic Qualified 25 8,618,302.92 -27,711.59 -79,857.65
3: Professional 251 138,606,110.37 1,661,508.39 -831,415.36
2: Non private individual retail 50 19,719,384.42 15,400.45 -315,828.48
Forward synthetic Total 326 166,943,797.71 1,649,197.25 -1,227,101.49
Plafond Qualified 13 6,616,386.00 -115,418.36 -115,458.53
3: Professional 177 119,236,103.51 -776,274.57 -1,792,571.45
2: Non private individual retail 218 83,859,996.27 -1,628,592.12 -2,041,935.29
Plafond Total 408 209,712,485.78 -2,520,285.05 -3,949,965.27
Currency collars 3: Professional 1 2,520,478.89 32,003.10 -
2: Non private individual retail 7 862,005.80 12,463.37 -
Currency collars Total 8 3,382,484.69 44,466.47 -
Total Class 1: hedging derivatives 752 381,029,559.88 -817,331.87 -5,177,066.76
Class 1: % of Group total 73.22% 76.78% - 77.59%
2
Knock in collars 3: Professional 57 8,982,216.85 183,139.22 -
2: Non private individual retail 1 800,000.00 -43,708.83 -43,708.83
Knock in collars Total 58 9,782,216.85 139,430.39 -43,708.83
Knock in forward 3: Professional 99 68,192,133.93 -397,905.96 -1,064,177.08
2: Non private individual retail 15 4,198,599.84 -69,044.19 -94,340.11
Knock in forwards Total 114 72,390,733.77 -466,950.15 -1,158,517.19
Total Class 2: hedging derivatives with possible exposure 172 82,172,950.62 -327,519.76 -1,202,226.02
to contained financial risks
Class 2: % of Group total 16.75% 16.56% - 18.02%
3b
Knock out forward 3: Professional 3 1,484,119.46 -15,719.90 -15,719.90
Knock out forward Total 3 1,484,119.46 -15,719.90 -15,719.90
Knock out knock in forward Qualified 13 2,329,066.44 -55,760.57 -55,760.57
3: Professional 60 24,320,536.18 148,597.76 -69,812.52
Knock out knock in forwards Total 73 26,649,602.62 92,837.19 -125,573.09
Vanilla currency options sold by the customer 3: Professional 27 4,913,491.01 -151,767.82 -151,767.82
Vanilla currency options sold by the customer Total 27 4,913,491.01 -151,767.82 -151,767.82
Total Class 3: derivatives not for hedging 103 33,047,213.09 -74,650.53 -293,060.81
Class 3: % of Group total 10.03% 6.66% - 4.39%
Total UBI Banca Group 1,027 496,249,723.59 -1,219,502.16 -6,672,353.59
147

OTC commodities derivatives: details of instrument types and classes of customer
Data as at 31st December 2012
Product class
Type of instrument
Customer classification
Number of
transactions
Notional MTM of which negative MtM
2
Commodity swaps Qualified 2 1,941,791.73 128,778.99 -
3: Professional 17 9,096,547.64 -123,599.28 -159,225.57
2: Non private individual retail 1 3,555,000.00 42,305.00 -
Commodity swaps Total 20 14,593,339.37 47,484.71 -159,225.57
Forward synthetic Qualified 1 306,950.00 -7,456.00 -7,456.00
3: Professional 10 5,654,700.00 -180,474.00 -188,866.00
2: Non private individual retail 3 629,125.00 -4,312.00 -4,501.00
Forward synthetic Total 14 6,590,775.00 -192,242.00 -200,823.00
Total Class 2: hedging derivatives with possible exposure 34 21,184,114.37 -144,757.29 -360,048.57
to contained financial risks
Class 2: % of Group total 100.00% 100.00% 100.00% 100.00%
Total UBI Banca Group 34 21,184,114.37 -144,757.29 -360,048.57
TOTAL UBI BANCA GROUP 9,485 6,399,922,876.29 -437,656,173.91 -444,539,874.36
OTC derivatives: first five counterparties by bank (figures in euro)
Data as at 31st December 2012
Bank Classification MtM of which negative MtM
Centrobanca 3: Professional -35,008,246 -35,008,246
3: Professional -30,438,076 -30,438,076
3: Professional -6,605,411 -6,605,411
3: Professional -4,378,782 -4,378,782
2: Non private individual retail -3,170,360 -3,170,360
Banca Popolare Commercio & Industria 2: Non private individual retail -7,044,008 -7,044,008
Qualified -4,558,297 -4,558,297
3: Professional -3,095,824 -3,095,824
2: Non private individual retail -2,462,594 -2,462,594
Qualified -1,756,718 -1,756,718
Banca Popolare di Ancona 2: Non private individual retail -6,729,045 -6,729,045
2: Non private individual retail -1,848,369 -1,848,369
2: Non private individual retail -1,661,539 -1,661,539
3: Professional -1,653,870 -1,653,870
3: Professional -1,416,310 -1,416,310
Banca Regionale Europea 3: Professional -4,662,705 -4,662,705
2: Non private individual retail -2,093,076 -2,093,076
3: Professional -1,081,750 -1,081,750
3: Professional -1,075,262 -1,075,262
3: Professional -986,643 -1,082,994
Banco di Brescia 3: Professional -4,069,764 -4,069,764
Qualified -2,392,171 -2,392,171
3: Professional -2,161,762 -2,161,762
2: Non private individual retail -2,106,842 -2,106,842
2: Non private individual retail -1,845,438 -1,845,438
Banca Popolare di Bergamo 3: Professional -3,504,971 -3,504,971
2: Non private individual retail -3,145,367 -3,145,367
3: Professional -1,770,646 -1,770,646
2: Non private individual retail -1,724,272 -1,724,272
2: Non private individual retail -1,724,272 -1,724,272
Banca Carime 3: Professional -938,589 -938,589
2: Non private individual retail -544,685 -544,685
2: Non private individual retail -539,348 -539,348
2: Non private individual retail -200,568 -200,568
3: Professional -104,483 -104,483
Banca di Valle Camonica 3: Professional -590,215 -590,215
3: Professional -560,608 -560,608
2: Non private individual retail -407,939 -407,939
2: Non private individual retail -393,927 -393,927
2: Non private individual retail -298,644 -298,644
148

Equity and Capital Adequacy
Changes in consolidated shareholders’ equity
Reconciliation between equity and profit for the year of the Parent with consolidated equity as at 31st December 2012 and
profit for the year then ended
Figures in thousands of euro
Equity
of which: Profit for the
year
Equity and profit for the year in the financial statements of the Parent 8,607,721 223,496
Effect of the consolidation of subsidiaries including joint ventures 1,301,369 93,706
Effect of measuring other significant equity investments using the equity method 83,910 45,290
Dividends received during the year - -325,631
Other consolidation adjustments (including the effects of the PPA) -255,118 45,847
Equity and profit for the year in the consolidated financial statements 9,737,882 82,708
The consolidated equity of the UBI Banca Group as at 31 st December 2012, inclusive of profit
for the year, amounted to €9,737.9 million, an increase compared to €8,939 million at the end
of 2011.
As shown in the table “Changes in consolidated equity of the Group in 2012 ” as well as in the
statement of changes in equity contained among the mandatory consolidated financial
statements, the following items contributed to the increase of €798.9 million that occurred
over twelve months:
− the appropriation of €51.7 million for dividends (UBI Banca) and other uses (other Group
banks) drawn from the extraordinary reserve 1 ;
− a reduction of €744.9 Valuation reserves attributable to the Group: composition
million in the negative
balance on the valuation
reserves –generated mainly
by the positive impact of
Figures in thousands of euro
Available-for-sale financial assets
Cash flow hedges
31.12.2012
-561,244
-4,937
31.12.2011
-1,350,979
-3,217
Currency translation differences -243 -243
comprehensive income of
Actuarial gains/losses for defined benefit pension plans -65,053 -34,155
over €757 million – which Special revaluation laws 60,432 72,729
involved the following: Total -571,045 -1,315,865
+€789.7 million for
available-for-sale financial assets, -€30.8mn for actuarial gains/ losses on defined benefit
plans; -€12.3 million for special revaluation laws (in relation to the free of charge increases
in share capital by BPA and BRE in June 2012 and the change in the percentage of BRE
owned at Group level following the merger into it of Banco di San Giorgio); -€1.7 million for
cash flow hedges;
− an overall increase of €23 million in other reserves of profits, relating mainly to the
following operations:
• +€11.1 million for the share capital increase in BPA performed by drawing on valuation
reserves;
• -€1.5 million for the purchases of shares in IW Bank from non-controlling interests;
• +€0,4 million for exchange rate differences relating to reserves of companies not resident
in Italy;
• the remaining part attributable to the positive impacts on Group reserves produced by
the merger of Banco di San Giorgio into BRE;
− posting of profit for the year of €82.7 million.
1 The loss incurred by the Group in 2011, amounting to €1,841.5 million (compared to €1,862.1 million at consolidated level, inclusive
of non-controlling interests) was replenished by drawing €2,713.1 million from the share premium reserve and allocating the
difference of €871.6 million to reserves of profits.
149

Changes in consolidated equity of the Group in 2012
Figures in thousands of euro
Balances as
at 31.12.2011
Allocation of prior year
profit
Reserves
Dividends
and other
uses
Changes in
reserves
New share
issues
2012 changes
Equity transactions
Stock
options
Consolidated
comprehensi
ve income
31.12.2012
Equity
attributable
to the
shareholders
of the Parent
Share capital: 2,254,367 - - - 1 - - 2,254,368
a) ordinary shares 2,254,367 - - - 1 - - 2,254,368
b) other shares - - - - - - - -
Share premiums 7,429,913 -2,713,054 - - 2 - - 4,716,861
Reserves 2,416,471 871,566 -51,691 23,019 - - - 3,259,365
Valuation reserves -1,315,865 - - -12,297 - - 757,117 -571,045
Treasury shares -4,375 - - - - - - -4,375
Profit/loss for the year -1,841,488 1,841,488 - - - - 82,708 82,708
Equity attributable to the
shareholders of the Parent 8,939,023 - -51,691 10,722 3 - 839,825 9,737,882
Fair value reserves of available-for-sale financial assets attributable to the Group: composition
31.12.2012
31.12.2011
Figures in thousands of euro Positive reserve Negative reserve Total Positive reserve Negative reserve Total
1. Debt instruments 231,534 -867,565 -636,031 78,744 -1,471,643 -1,392,899
2. Equity instruments 80,216 -4,889 75,327 51,267 -4,127 47,140
3. Units in O.I.C.R.
(collective investment instruments) 11,444 -11,984 -540 6,973 -12,193 -5,220
4. Financing - - - - - -
Total 323,194 -884,438 -561,244 136,984 -1,487,963 -1,350,979
As shown in the table, the increase mentioned above of €789.7 million in the fair value reserve
for available-for-sale financial assets is attributable mainly to debt instruments held in
portfolio (up by €756.9 million to -€636 million net of tax and non-controlling interests) and in
particular to Italian government securities, the reserve for which increased by €585.7 million
(of which +€477.5 million relating to the Parent) to -€588.8 million (-€1,174.5 million as at 31 st
December 2011, -€1,066.8 million as at end June and -€785.1 million as at 30 th September
2011) 2 .
Benefiting from a more favourable environment that has seen a recovery in financial markets
since September, the reserve for debt instruments recorded increases in fair value of €767
million during the year. These included €574.9 million relating to the Parent (over 80% of
which related to Italian government securities), €100.4 million to Lombarda Vita, €41.9 million
to IW Bank (almost entirely attributable to the portfolio of Italian government securities), €30.4
million to Centrobanca and €15 million to UBI Assicurazioni.
Increases included transfers of €30.1 million of negative reserves to the income statement,
almost entirely in relation to the sale of securities, predominantly government securities,
included in the UBI Banca portfolio (€14.5 million), the Lombarda Vita portfolio (€12.1 million)
and the Centrobanca portfolio (€2.5 million).
Equity instruments recorded increases in fair value of €29.3 million, including €27.9 million
relating to UBI Banca: of which €20.2 million for the investment in Intesa Sanpaolo, €4.1
2 As already reported, the negative available-for-sale reserve for Italian government securities used as a capital filter in the EBA
exercise on capital amounted to -€868 million as at 30 th September 2011.
150

million for S.A.C.B.O., €1.6 million for SIA and €1.4 million for Istituto Centrale delle Banche
Popolari.
The reserve for units in OICR (collective investment instruments) recorded increases of €5.1
million in fair values relating to UBI Banca (around €3 million) and Lombarda Vita (€2.1
million). Finally, increases also included the transfer of €4.1 million of negative reserves to the
income statement, €2.6 million of which following impairment losses almost entirely related to
UBI Banca.
Fair value reserves of available-for-sale financial assets attributable to the Group: annual changes
Figures in thousands of euro
Debt
instruments
Equity
instruments
OICR units
(collective investment
instruments)
Financing
Total
1. Opening balances as at 1st January 2012 -1,392,899 47,140 -5,220 - -1,350,979
2. Positive changes 798,416 31,028 9,717 - 839,161
2.1 Increases in fair value 767,006 29,310 5,128 - 801,444
2.2 Transfer to income statement of negative reserves 30,058 1,651 4,075 - 35,784
- following impairment losses 802 1,330 2,569 - 4,701
- from disposal 29,256 321 1,506 - 31,083
2.3 Other changes 1,352 67 514 - 1,933
3. Negative changes -41,548 -2,841 -5,037 - -49,426
3.1 Reductions in fair value -1,653 -1,132 -2,706 - -5,491
3.2 Impairment losses - - - - -
3.3 Transfer to income statement of positive reserves: from disposal -739 -1,455 -648 - -2,842
3.4 Other changes -39,156 -254 -1,683 - -41,093
4. Closing balances as at 31st December 2012 -636,031 75,327 -540 - -561,244
Capital adequacy
Following the official authorisation received from the Bank of Italy on 16 th May 2012, the UBI
Banca Group now uses, from the 30 th June 2012 consolidated supervisory report onwards,
internal models for calculating capital requirements for credit risk relating to corporate
customers and for operational risk.
Capital ratios had improved appreciably at the end of the year, benefiting from the adoption of
the internal models already mentioned, from action taken to optimise risk weighted assets and
from capital management action (lower tier two issues).
Further benefits in terms of lower risk weighted assets may well come from the validation of
advanced models for retail segment credit risk (private individuals and small businesses),
which is expected in the first half of 2013.
As shown in the table, in December regulatory capital amounted to €12.2 billion, slightly down
on €12.3 billion at the end of 2011 (-€78.5 million), due mainly to deductions related to an
excess of expected losses over total impairment losses, applied following the adoption of the
internal methods already mentioned. These deductions are mainly attributable to the fall in
tier one capital (-€12.6 million), not offset by other increases which did affect the item, while
their impact on tier two capital was greater (-€56.8 million).
At the same time risk weighted assets decreased by €14.4 billion to €76.6 billion, 57.8% of
total assets (compared to 70.1% at the end of 2011).
The core tier one ratio therefore improved by 173 basis points to 10.29%, and the tier one ratio
increased by 170 basis points to 10.79%, while the total capital ratio increased by 251 basis
points to 16.01%.
As already reported in the section “Significant events during the year”, the UBI Banca Group
has achieved the objective set by the EBA recommendation to achieve a core tier one ratio of
9% inclusive of the “buffer” on sovereign debt (€868 million as at 30 th September 2011). At the
end of December 2012 the core tier one ratio for EBA purposes was 9.16%.
151

Capital ratios
Figures in thousands of euro
31.12.2012
Basel 2 AIRB
31.12.2011
Basel 2 standard
Tier 1 capital before filters 8,124,210 8,075,253
Preference shares and savings/privileged shares attributable to non-controlling interests 382,854 489,191
Tier 1 capital filters -30,471 -137,541
Tier 1 capital after filters 8,476,593 8,426,903
Deductions from tier 1 capital -212,873 -150,625
of which: negative elements for 50% deduction Excess of expected losses over impairment
losses (IRB models) -71,632 -
Tier 1 after filters and specific deductions (Tier 1) 8,263,720 8,276,278
Tier 2 capital after filters 4,310,534 4,305,074
Deductions from tier 2 capital -212,873 -150,625
of which: negative elements for 50% deduction Excess of expected losses over impairment
losses (IRB models) -71,632 -
Tier 2 capital after filters and specific deductions 4,097,661 4,154,449
Deductions from tier 1+tier 2 capital -157,762 -148,574
Total regulatory capital 12,203,619 12,282,153
Credit and counterparty risk 5,611,624 6,746,523
Market risk 78,253 73,545
Operational risk 437,271 460,749
Other prudential requirements - -
Total prudential requirements 6,127,148 7,280,817
Subordinated liabilities tier 3
Amount eligible (*) 55,873 -
With a provision of 18 th May 2012 and a
later communication of 23 rd June 2010
(“Clarification of supervisory measures
concerning regulatory capital – prudential
filters”), the Bank of Italy issued new
supervisory instructions for the treatment
of fair value reserves relating to debt
instruments held in the “available-for-sale
financial assets” portfolio for the purposes
of calculating regulatory capital
(prudential filters). More specifically, as an
alternative to the “asymmetric approach”
(full deduction of net losses from the tier
one capital and inclusion of 50% of the
net gains in the tier two capital) already
provided for by Italian regulations, it was
permitted – in compliance with 2004
CEBS guidelines – to completely
neutralise gains and losses recognised in
the reserves mentioned (“symmetrical
approach”) subsequent to 31 st December
2009, but limited to securities issued by
the central governments of countries
belonging to the European Union. The
Group decided to take advantage of the
option and reported the decision to the
Bank of Italy on 29 th June 2010. It was
therefore applied uniformly by all
members of the banking Group,
commencing with the calculation of
regulatory capital as at 30 th June 2010.
Risk weighted assets 76,589,350 91,010,213
Core tier 1 ratio after specific deductions from tier 1 capital (tier 1 capital net of preference shares/risk
w eighted assets) 10.29% 8.56%
Tier 1 capital ratio
(tier 1 capital/risk w eighted assets) 10.79% 9.09%
Total capital ratio
[(regulatory capital+tier 3 eligible)/risk w eighted assets] 16.01% 13.50%
(*) Excess of tier two subordinated liabilities (lower tier two) over amount that qualifies for inc lusion in tier two c apital. The amount may be used to cover c apital requirements on market risks
up to a maximum of 71.4% of those same requirements.
152

Research & Development
Given that the Group offers chiefly financial and banking services, its research and
development activities - performed centrally by UBI Sistemi e Servizi - prevalently tries to
study the possible applications of new technology in customer relations, in order to improve
and augment the Group’s range of products and services, and also in internal corporate
processes, in order to simplify and streamline them.
The areas of greatest interest and/or potential are currently MOBILE INTERNET, especially with
regard to the opportunities offered by the remote payment sector, and by DEMATERIALISATION
(paperless operations), progressively being extended to new operational contexts and to new
functions, although in certain cases, this is still only at the experimental stages.
In 2012, the Group’s mobile internet business witnessed not only the enhancement of home
banking services, with the introduction of online trading, but also the extension of the
applications that enable these services to inlcude all the main currently available devices and
terminals. A specific application for tablets was introduced (joining the applications already
available for iPhone, Android and BlackBerry) and in 2013 a platform for Windows Mobile is
scheduled to be released.
In future years, the growing diffusion of mobile devices will offer interesting developments in
the field of mobile payments, to the benefit of both consumers and vendors.
Consequently, the UBI Banca Group has launched its UBI Mobile Payments Project, featuring
the experimental phase of payments via mobile telephone (NFC 1 compliant smartphone)
interacting with contactless POS terminals 2 , through the virtualisation of a payment card to a
SIM phone card.
The initiative was embarked upon in partnership with the following: a number of important
operators in the payment system and telephony sectors; with the city of Varese (in the context
of the Varese Smart City initiative); and with the LIUC Università Cattaneo. Launched through
a three-phase pilot project, the first phase was implemented at the beginning 2013, and the
full commercial launch is scheduled for 2014. In the meantime, in order to augment the
number of points of sale accepting NFC mobile payments, a programme for the progressive
migration of operators to contactless POS terminals was launched, in the Bergamo and Varese
areas in particular.
For merchants, in February 2013 the Banca Popolare di Bergamo commenced experimentation
of its Mobile POS, a technology which allows a smartphone or tablet to be used as a tool to
accept mobile credit/debit card payments. Due to its cost-effectiveness, the Mobile POS system
will be useful for those vendors with insufficient sales volumes to cover the fixed-costs of
normal POS solutions.
During the course of 2012, dematerialisation (paperless) initiatives advanced in two principal
directions:
the first involved documents, with the progressive extension of digitalisation to new areas of
operation. Specifically, computerised viewing, filing and transport services for documents
were created for mortgage, advertising campaign management (CRM), credit and real estate
activities. These services were also extended to a number of regular branch counter
activities (in particular to those regarding services such as "multiple bank transfers",
"money orders and bank drafts", "RIBA - cash orders", "RID - permanent direct debit
orders", and "MAV - payment by notice"), with significant results in terms of efficiency and
1 NFC: Near Field Communication. Technology which provides short range two-way wireless connections (up to a maximum of 10 cm).
2 State-of-the-art terminal which, in addition to providing all functions offered by traditional desktop POS devices, also allows the user
to accept credit cards with the same technology by simply bringing the card into close proximity to the POS with an NFC reader
(approximately 4-5 cm). Small transactions do not require a PIN number and the transaction is confirmed by a sound alert and a
flashing light emitted by the POS.
153

process monitoring, also with regard to compliance with time limits established by the PSD
legislation. Non-performing loan management documentation has also now been digitalised;
the second involved digital signatures, allowing documents to be produced digitally from the
outset (also known as dematerialisation ab origine). The experimentation, which began at
the end of 2011 at the five pilot branches of the Banca Popolare di Bergamo (Progetto Firma
Grafometrica - Biometric/Graphometric Signature Project 3 ) was gradually extended during the
year 2012, initially to paying-in and withdrawal operations, and then to all remaining
counter activities.
Finally, remote selling is yet another growth sector on which the Group intends to focus its
research and development activities in 2013. On the strength of the positive reception of the
online subscription of its Enjoy Card, the Group has launched a series of technologicallyadvanced
initiatives based on remote digital signatures 4 which will allow users to sign online
documents with a digital signature, without having to deliver a signed paper document.
The system of internal control
The document “Report on the corporate governance and ownership structure of UBI Banca
Scpa” attached to these reports may be consulted for a description of the architecture, rules
and organisational units of the system of internal controls. It also provides specific information
required under Art. 123 bis, paragraph 2b) of the Consolidated Finance Act (Legislative Decree
No. 58/1998) concerning the risk management and internal control systems that govern the
financial reporting process.
3 Biometric/graphometric technology is used to place a naturally produced digital signature on documents; this entails placing a
series of graphic strokes (the signature) on a special tablet that is able to “capture” the signature’s five characteristic traits: rhythm,
speed, pressure, acceleration and movement.
4 Remote digital signatures are a type of electronic signature configured as an on-line service (accessed via Intranet and/or Internet),
in which the signer's private key is stored, together with the signature certificate, within a secure remote server by an Accredited
Certifier. The signer is identified by the service and authorises the addition of the digital signature through the use of a security
mechanism.
154

Transactions with related parties
With Resolution No. 17221 of 12 th March 2010 – amended by the subsequent Resolution No.
17389 of 23 rd June 2010 – the Consob (Italian securities market authority) approved a
Regulation concerning related-party transactions. The regulations concern the procedures to
be followed for the approval of transactions performed by listed companies and the issuers of
shares with a broad shareholder base with parties with a potential conflict of interest,
including major or controlling shareholders, members of the management and supervisory
bodies and senior managers including their close family members.
The regulations currently apply within the UBI Banca Group to the Parent UBI Banca Scpa
only, as a listed company. In November 2010, the Supervisory Board appointed, from among
its members, a Related Parties Committee to which all transactions falling within the scope of
the regulations must be submitted in advance.
In this respect the UBI Banca regulations have excluded the following transactions from their
scope of application and these are consequently not subject to the disclosure obligations
required under the Consob regulation, but without prejudice to the provisions of Art. 5,
paragraph 8, where applicable, of the said Consob Regulation:
(a) shareholders’ resolutions concerning the remuneration of the Members of the Supervisory Board passed in
accordance with Art. 2364-bis of the Italian Civil Code, including those concerning the determination of a total
sum for the remuneration of the Members of the Supervisory Board assigned particular offices, powers and
functions;
(b) remuneration schemes based on financial instruments approved by shareholders in accordance with Art. 22, letter
b) of the Articles of Association and in compliance with Art. 114-bis of the Consolidated Finance Act and the
relative operations to implement them;
(c) resolutions, other than those referred to under the preceding letter a) of this article, concerning the fees of
Members of the Management Board appointed to special positions and other key management personnel and also
the resolutions with which the Supervisory Board determines the fees of the Members of the Management Board
on condition that:
(i) UBI Banca has adopted a remuneration policy;
(ii) the Remuneration Committee formed by the Supervisory Board in accordance with Art. 49 of the Articles of
Association has been involved in the definition of that remuneration policy;
(iii) a report setting out the remuneration policy has been submitted for approval or a consultative vote to a
Shareholders' Meeting;
(iv) the remuneration awarded is consistent with that policy;
(d) “transactions of negligible amount” are those related-party transactions for which the amount is less than €250
thousand. If a related-party transaction is concluded with a member of the key management personnel, a close
family member of that person or with companies controlled by or subject to significant influence of those persons,
it will be considered a transaction of negligible amount if the amount of the transaction is not greater than €100
thousand;
(e) transactions which fall within the ordinary performance of operating activities and the related financial activities
concluded under equivalent market or standard conditions;
(f) transactions to be performed on the basis of instructions for the purposes of stability issued by the supervisory
authority, or on the basis of instructions issued by the Parent of the Group to carry out instructions issued by the
supervisory authority in the interests of the stability of the Group;
(g) transactions with or between subsidiaries and also venturers in joint ventures, as well as transactions with
associates, if no significant interests of other related parties exist in the subsidiaries or associates that are
counterparties to the transaction.
Also, in compliance with Consob recommendations, transactions with related-parties of UBI
Banca performed by subsidiaries are subject to the regulations in question if, under the
provisions of the Articles of Association or internal regulations adopted by the Bank, the
Supervisory Board, in response to a proposal of the Management Board, or even an officer of
the Bank on the basis of powers conferred on that officer, must preliminarily examine or
approve a transaction to be performed by subsidiaries.
With reference to Article 5, paragraph 8 of Consob Resolution No. 17221/2010, entitled
“Public disclosures on transactions with related parties”, information regarding transactions
of major importance carried out in 2012 with related parties is reported in the section below.
155

Transactions of Greater Importance
During the period UBI Banca did not carry out any transactions which can be classified as “of
greater importance”, except for the intragroup transactions cited below, which in accordance
with the aforementioned internal regulations are exempt from the more rigorous decisionmaking
procedure and from the requirement to publish a report for the market (unless other
related parties have a significant interest in the relevant subsidiary).
We report some securitisation transactions and operations for the issuance of covered bonds
as described in Part E of the Notes to the Consolidated Financial Statements.
Intragroup repurchase agreements were also entered into with securities issued as part of
securitisation transactions as the underlying, all with a duration of one month stipulated
under market conditions.
In relation to the funding requirements of Banca Regionale Europea, UBI Banca disbursed
€605 million of short-term funds to it. This financing is subject to specific regulations which
govern intragroup transfer pricing.
In relation to UBI Leasing’s funding requirements, UBI Banca disbursed short-term funds to it
totalling €10,187 million. This financing is subject to specific regulations which govern
intragroup transfer pricing.
In relation to Prestitalia’s funding requirements, UBI Banca disbursed short-term funds to it
totalling €2,760 million. This financing is subject to specific regulations which govern
intragroup transfer pricing.
Pursuant to the Salva Italia (Save Italy) Decree Law enacted on 6 th December 2011 (No.
201/2011), UBI Banca resolved to make use of guarantees offered by the Italian government in
support of its debt instrument issuance activity. It therefore issued bonds for a total nominal
amount of €6 billion and obtained the relative government guarantee. When issued, these were
subscribed by Centrobanca and immediately sold back to UBI Banca under market conditions.
The financial terms and conditions for those bonds are as follows:
First issue – value date 2 nd January 2012 – nominal amount: €2,000,000,000 ; original duration: 36
months; redemption in a single payment on maturity; interest rate: fixed at 6.5%.
Second issue – value date 2 nd January 2012 – nominal amount: €1,000,000,000; original duration: 60
months; redemption in a single payment on maturity; interest rate: fixed at 7.0%.
Third issue – value date 27 th February 2012 – nominal amount €2,000,000,000; original duration: 36
months; redemption in a single payment on maturity; interest rate: fixed at 4.5%.
Fourth issue – value date 27 th February 2012 – nominal amount: €1,000,000,000; original duration:
60 months; redemption in a single payment on maturity; interest rate: fixed at 5.25%.
We also report that:
- on 17 th February 2012, the Supervisory Board of UBI Banca voted in favour of a motion to
merge InvestNet International Spa into IW Bank, in accordance with the merger plan
approved by the competent governing bodies of the companies involved;
- on 28 th March 2012, the Supervisory Board, in a deed drafted by Mr Armando Santus,
notary in Bergamo, resolved to merge the fully owned subsidiary B@nca 24-7 into the
Parent, UBI Banca;
- with reference to the plan to merge Banco di San Giorgio (BSG) into Banca Regionale
Europea (BRE), as approved by the Supervisory Board of UBI Banca in a resolution on 14 th
November 2011, the Supervisory Board, in its 28 th March 2012 meeting, resolved – based
on the results of the impairment test performed as at 31 st December 2011 – to change the
price per share at which BRE would purchase BSG shares held by UBI Banca to €4.344;
- on 23 rd November 2012, the Supervisory Board, in a deed drafted by Mr Giovanni Battista
Calini, notary in Brescia, resolved to merge the fully owned subsidiary SILF into the its
parent company, UBI Banca.
Finally, we also report that:
156

- no transactions were performed in the reporting period with other related parties which
influenced the capital position or the results of the Parent Bank, UBI Banca to a significant
extent;
- there have been no modifications and/or developments of transactions with related parties,
which may have been reported in previous financial reports, that could have a significant
effect on the capital position or the results of the Parent, UBI Banca.
***
In compliance with IAS 24, Part H of the Notes to the financial statements in both the
separate and the consolidatd report present figures for (a) balance sheet and income
statement transactions between parties related to UBI Banca and Group companies, and (b)
balance sheet and income statement transactions between UBI Banca and parties related to
it. The amounts for these transactions are also indicated as percentages of the total for each
relevant item of the consolidated and separate financial statements.
Further information is given in the “Report on corporate governance and the ownership
structure of UBI Banca Scpa” attached to these reports.
That report also contains information on the adoption of the recent Bank of Italy regulations
on transactions with related parties, with particular reference to internal policies regarding the
monitoring of risk activities and conflicts of interest with these parties.
In fact, as already reported, in implementation of article 53, paragraphs 4 et seq of the Consolidated
Banking Act and the CICR (Inter-ministerial Committee on Credit and Savings) Resolution No. 277 of 29 th
July 2008, the Bank of Italy issued new provisions at the end of 2011 (published in the Official Journal on
16 th January 2012) regarding the monitoring of risk assets and conflicts of interest with parties connected
to the bank and to the banking group, where “connected parties” are defined as a group consisting of a
related parted and all parties connected to it.
The new regulations contain specific decision-making procedures and also (from 31 st December 2012)
prudential limits for risk asset exposures to those parties set in proportion to regulatory capital.
157

Consolidated companies: the principal
figures
Profit
Figures in thousands of euro 2012 2011 Change % change
Unione di Banche Italiane Scpa (1) 223,496 (2,713,054) 2,936,550 n.s.
Banca Popolare di Bergamo Spa 129,453 171,768 (42,315) (24.6%)
Banco di Brescia Spa 23,198 94,952 (71,754) (75.6%)
Banca Popolare Commercio e Industria Spa 24,003 50,010 (26,007) (52.0%)
Banca Regionale Europea Spa (2) (26,564) 31,376 (57,940) n.s.
Banca Popolare di Ancona Spa (3) (4,443) 2,276 (6,719) n.s.
Banca Carime Spa (4) (6,436) 45,981 (52,417) n.s.
Banca di Valle Camonica Spa 1,150 728 422 58.0%
UBI Banca Private Investment Spa 3,180 (1,609) 4,789 n.s.
Centrobanca Spa (5) 283 1,225 (942) (76.9%)
Centrobanca Sviluppo Impresa SGR Spa (173) 260 (433) n.s.
Banque de Dépôts et de Gestion Sa (*) (6,315) (6,894) (579) (8.4%)
IW Bank Spa (6) 11,619 928 10,691 1152.0%
UBI Banca International Sa (*) 2,030 10,307 (8,277) (80.3%)
UBI Pramerica SGR Spa 39,523 37,576 1,947 5.2%
UBI Leasing Spa (7) (69,810) (30,151) 39,659 131.5%
UBI Factor Spa 3,844 8,564 (4,720) (55.1%)
B@nca 24-7 - 18,341 (18,341) (100.0%)
Prestitalia Spa (23,849) 482 (24,331) n.s.
BPB Immobiliare Srl 1,230 700 530 75.7%
Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa 1,781 1,373 408 29.7%
UBI Sistemi e Servizi SCpA - - - -
UBI Fiduciaria Spa (193) (186) 7 3.8%
UBI Assicurazioni Spa (49,99%) 8,553 2,000 6,553 327.7%
Aviva Assicurazioni Vita Spa (49,99%) 8,000 3,245 4,755 146.5%
Aviva Vita Spa (50%) 14,400 5,500 8,900 161.8%
Lombarda Vita Spa (40%) 16,056 4,507 11,549 256.2%
UBI Insurance Broker Srl 3,604 3,594 10 0.3%
UBI Trustee Sa 81 23 58 252.2%
CONSOLIDATED (8) 82,708 (1,841,488) 1,924,196 n.s.
(*) The profit shown is from the financial statements prepared for the consolidation according to the accounting policies followed by the
Parent.
(1) The figure for 2011 does not include the result for B@nca 24-7, merged on 23 rd July 2012, but relates to UBI Banca only. That
figure included impairment losses of €3,029.8 million on Group equity investments, goodwill and intangible assets (net of tax).
(2) The figure for 2011 includes the profit of Banco di San Giorgio (€1,190 thousand), merged into Banca Regionale Europea on 22 nd
October 2012.
(3) The figure for 2011 included the effects of the recognition of impairment losses on the investments in UBI Leasing (€16.2 million)
and in Centrobanca (€11.9 million).
(4) The figure for 2011 included the effects of the recognition of impairment losses of €12.1 million on goodwill.
(5) The figure for 2011 included the effects of the recognition of impairment losses of €7.2 million on goodwill.
(6) The figure for 2011 has been restated for consistency by including the result for InvestNet International Spa, merged on 1 st August
2012.
(7) The figure for 2011 included the effects of the recognition of impairment losses of €2 million on goodwill.
(8) The figure for 2011 included the recognition of impairment losses on goodwill and finite useful life intangible assets of €2,190.9
million (net of tax and non controlling interests).
158

Net loans and advances to customers
Figures in thousands of euro 31.12.2012 31.12.2011 Change % change
Unione di Banche Italiane Scpa (1) 22,584,747 15,692,663 6,892,084 43.9%
Banca Popolare di Bergamo Spa 18,779,934 19,609,764 -829,830 -4.2%
Banco di Brescia Spa 13,177,657 13,561,110 -383,453 -2.8%
Banca Popolare Commercio e Industria Spa 8,347,255 8,563,354 -216,099 -2.5%
Banca Regionale Europea Spa (2) 9,203,899 9,728,624 -524,725 -5.4%
Banca Popolare di Ancona Spa 7,769,649 7,810,341 -40,692 -0.5%
Banca Carime Spa 4,730,986 4,865,871 -134,885 -2.8%
Banca di Valle Camonica Spa 1,798,703 1,889,840 -91,137 -4.8%
UBI Banca Private Investment Spa 472,038 460,742 11,296 2.5%
B@nca 24-7 - 10,511,749 -10,511,749 -100.0%
Prestitalia Spa 2,882,147 103,979 2,778,168 n.s.
Centrobanca Spa 6,272,078 7,160,450 -888,372 -12.4%
Banque de Dépôts et de Gestion Sa 192,788 205,020 -12,232 -6.0%
UBI Banca International Sa 981,009 1,087,454 -106,445 -9.8%
IW Bank Spa 287,029 246,010 41,019 16.7%
UBI Factor Spa 2,392,499 2,868,344 -475,845 -16.6%
UBI Leasing Spa 8,060,482 9,045,465 -984,983 -10.9%
CONSOLIDATED 92,887,969 99,689,770 -6,801,801 -6.8%
Risk indicators
Net non-performing
loans/ Net loans
Net impaired loans/Net
loans
Net non-performing loans +
Net impaired loans/Net
loans
Percentages 31.12.2012 31.12.2011 31.12.2012 31.12.2011 31.12.2012 31.12.2011
Unione di Banche Italiane Scpa (1) 1.01% - 0.83% - 1.84% -
Banca Popolare di Bergamo Spa 2.88% 2.29% 3.44% 2.41% 6.32% 4.70%
Banco di Brescia Spa 2.07% 1.62% 3.26% 2.84% 5.33% 4.46%
Banca Popolare Commercio e Industria Spa 3.80% 3.60% 2.04% 2.15% 5.84% 5.75%
Banca Regionale Europea Spa (2) 2.80% 2.32% 3.87% 3.27% 6.67% 5.59%
Banca Popolare di Ancona Spa 4.96% 4.35% 4.48% 3.50% 9.44% 7.85%
Banca Carime Spa 2.71% 1.93% 4.11% 3.34% 6.82% 5.27%
Banca di Valle Camonica Spa 4.15% 2.79% 2.79% 3.05% 6.94% 5.84%
UBI Banca Private Investment Spa 1.53% 1.45% 2.80% 1.23% 4.33% 2.68%
B@nca 24-7 - 2.18% - 1.05% - 3.23%
Prestitalia Spa 0.19% n.d. 8.99% n.d. 9.18% n.d.
Centrobanca Spa 1.94% 1.48% 4.50% 3.52% 6.44% 5.00%
Banque de Dépôts et de Gestion Sa 0.10% 0.09% 1.76% 1.74% 1.86% 1.83%
UBI Banca International Sa 0.99% 0.08% 2.03% 2.31% 3.02% 2.39%
IW Bank Spa - - 0.15% 0.14% 0.15% 0.14%
UBI Factor Spa 3.30% 1.27% 6.42% 0.16% 9.72% 1.43%
UBI Leasing Spa 6.49% 4.52% 6.06% 2.85% 12.55% 7.37%
CONSOLIDATED 3.18% 2.49% 3.88% 2.54% 7.06% 5.03%
(1) The figures as at 31 st December 2011 do not include the result for B@nca 24-7, merged on 23 rd July 2012, but relate to UBI Banca
only.
(2) The figures as at 31 st December 2011 have been restated for consistency to include the result for Banco di San Giorgio, merged
into Banca Regionale Europea on 22 nd October 2012.
159

Direct funding from customers
Figures in thousands of euro 31.12.2012 31.12.2011 Change % change
Unione di Banche Italiane Scpa (1) 29,147,156 31,300,106 -2,152,950 -6.9%
Banca Popolare di Bergamo Spa 19,202,234 19,714,160 -511,926 -2.6%
Banco di Brescia Spa 11,491,189 11,980,422 -489,233 -4.1%
Banca Popolare Commercio e Industria Spa 7,162,967 7,496,973 -334,006 -4.5%
Banca Regionale Europea Spa (2) 6,968,861 7,260,445 -291,584 -4.0%
Banca Popolare di Ancona Spa 6,445,102 6,429,378 15,724 0.2%
Banca Carime Spa 7,063,930 7,552,126 -488,196 -6.5%
Banca di Valle Camonica Spa 1,465,310 1,358,499 106,811 7.9%
UBI Banca Private Investment Spa 639,069 517,020 122,049 23.6%
Centrobanca Spa 4,006,028 4,374,547 -368,519 -8.4%
Banque de Dépôts et de Gestion Sa 313,158 362,182 -49,024 -13.5%
UBI Banca International Sa (3) 1,740,864 1,060,263 680,601 64.2%
IW Bank Spa (4) 2,883,298 1,903,237 980,061 51.5%
CONSOLIDATED 98,817,560 102,808,654 -3,991,094 -3.9%
Direct funding from customers includes amounts due to customers and debt securities in issue, with the exclusion of bonds
subscribed directly by companies in the Group.
Direct funding for the following banks was therefore adjusted as follows:
Figures in millions of euro 31.12.2012 31.12.2011
Unione di Banche Italiane Scpa 2,155.8 3,922.9
Banca Popolare di Bergamo Spa - 50.0
Banco di Brescia Spa 651.8 752.3
Banca Regionale Europea Spa 892.0 935.0
Banca di Valle Camonica Spa 253.4 254.3
Centrobanca Spa 2,323.1 2,326.2
(1) The figure as at 31 st December 2011 does not include the result for B@nca 24-7, merged on 23 rd July 2012, but relates to UBI
Banca only.
(2) The figure as at 31 st December 2011 have been restated for consistency to include the result for Banco di San Giorgio, merged into
Banca Regionale Europea on 22 nd October 2012.
(3) The figure as at 31 st December 2012 is net of issues of French certificates of deposit and euro commercial paper totalling €2,265.9
million (€5,318.8 million as at 31 st December 2011).
(4) The figure as at 31 st December 2011 has been restated for consistency by including the result for InvestNet International Spa,
merged on 1 st August 2012.
160

Indirect funding from customers (at market prices)
Figures in thousands of euro 31.12.2012 31.12.2011 Change % change
Unione di Banche Italiane Scpa 5 5 - 0.0%
Banca Popolare di Bergamo Spa 24,313,879 24,563,676 -249,797 -1.0%
Banco di Brescia Spa 12,450,726 12,893,350 -442,624 -3.4%
Banca Popolare Commercio e Industria Spa 9,791,680 10,057,784 -266,104 -2.6%
Banca Regionale Europea Spa (1) 8,069,733 8,271,417 -201,684 -2.4%
Banca Popolare di Ancona Spa 3,440,984 3,533,775 -92,791 -2.6%
Banca Carime Spa 5,664,244 5,375,500 288,744 5.4%
Banca di Valle Camonica Spa 1,018,588 1,049,267 -30,679 -2.9%
UBI Banca Private Investment Spa 5,361,049 5,003,443 357,606 7.1%
Banque de Dépôts et de Gestion Sa 669,974 835,893 -165,919 -19.8%
Lombarda Vita Spa 4,507,184 5,007,705 -500,521 -10.0%
Aviva Assicurazioni Vita Spa 2,094,308 2,121,844 -27,536 -1.3%
UBI Pramerica SGR Spa 21,679,960 20,288,875 1,391,085 6.9%
UBI Banca International Sa 2,498,265 2,904,707 -406,442 -14.0%
IW Bank Spa (2) 3,244,644 3,161,568 83,076 2.6%
Aviva Vita Spa 4,340,583 4,234,773 105,810 2.5%
CONSOLIDATED 70,164,384 72,067,569 -1,903,185 -2.6%
Assets under management (at market prices)
Figures in thousands of euro 31.12.2012 31.12.2011 Change % change
Unione di Banche Italiane Scpa - - - -
Banca Popolare di Bergamo Spa 12,192,817 11,267,911 924,906 8.2%
Banco di Brescia Spa 6,309,441 6,488,943 -179,502 -2.8%
Banca Popolare Commercio e Industria Spa 4,338,237 4,132,113 206,124 5.0%
Banca Regionale Europea Spa (1) 4,140,316 4,211,543 -71,227 -1.7%
Banca Popolare di Ancona Spa 1,597,113 1,562,412 34,701 2.2%
Banca Carime Spa 2,982,988 2,894,381 88,607 3.1%
Banca di Valle Camonica Spa 413,923 437,371 -23,448 -5.4%
UBI Banca Private Investment Spa 4,098,237 3,659,999 438,238 12.0%
Banque de Dépôts et de Gestion Sa 669,974 835,893 -165,919 -19.8%
Lombarda Vita Spa 4,507,184 5,007,705 -500,521 -10.0%
Aviva Assicurazioni Vita Spa 2,094,308 2,121,844 -27,536 -1.3%
UBI Pramerica SGR Spa 21,679,960 20,288,875 1,391,085 6.9%
UBI Banca International Sa 159,535 181,843 -22,308 -12.3%
IW Bank Spa (2) 570,517 462,063 108,454 23.5%
Aviva Vita Spa 4,340,583 4,234,773 105,810 2.5%
CONSOLIDATED 38,106,037 36,892,042 1,213,995 3.3%
(1) The figures as at 31 st December 2011 have been restated for consistency to include the result for Banco di San Giorgio, merged
into Banca Regionale Europea on 22 nd October 2012.
(2) The figures as at 31 st December 2011 have been restated for consistency to include the result for InvestNet International Spa,
merged on 1 st August 2012.
161

The performance of the main consolidated
companies
BANCA POPOLARE DI BERGAMO SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 18,779,934 19,609,764 -829,830 -4.2%
Direct funding (*) 19,202,234 19,764,170 -561,936 -2.8%
Net interbank debt 1,941,420 1,603,761 337,659 21.1%
Financial assets held for trading 67,213 61,943 5,270 8.5%
Available-for-sale financial assets 21,252 20,196 1,056 5.2%
Equity (excluding profit for the year) 2,163,068 2,117,762 45,306 2.1%
Total assets 24,342,749 25,074,514 -731,765 -2.9%
Indirect funding from customers (including insurance) 24,313,879 24,563,676 -249,797 -1.0%
of which: assets under management 12,192,817 11,267,911 924,906 8.2%
Income statement
Net interest income (**) 482,470 479,850 2,620 0.5%
Dividends and similar income - 184 (184) (100.0%)
Net fee and commission income 323,898 316,002 7,896 2.5%
Net income (loss) from trading, hedging and disposal/repurchase activities (5,621) 2,105 (7,726) n.s.
Other net operating income/(expense) (**) 32,570 45,128 (12,558) (27.8%)
Operating income 833,317 843,269 (9,952) (1.2%)
Staff costs (***) (298,363) (272,399) 25,964 9.5%
Other administrative expenses (188,073) (197,029) (8,956) (4.5%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (7,263) (7,692) (429) (5.6%)
Operating expenses (493,699) (477,120) 16,579 3.5%
Net operating income 339,618 366,149 (26,531) (7.2%)
Net impairment losses on loans (134,663) (83,114) 51,549 62.0%
Net impairment losses on other assets/liabilities 138 (262) 400 n.s.
Net provisions for risks and charges (****) (3,870) (56) 3,814 n.s.
Profit (loss) on the disposal of equity investments (17) 1,486 (1,503) n.s.
Pre-tax profit from continuing operations 201,206 284,203 (82,997) (29.2%)
Taxes on income for the year for continuing operations (*****) (71,753) (112,435) (40,682) (36.2%)
Profit for the year 129,453 171,768 (42,315) (24.6%)
Other information
Number of branches 353 358 -5
Total work force (actual employees+personnel on leasing contracts) 3,697 3,724 -27
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] 5.98% 8.11%
Cost:income ratio (operating expenses/operating income) 59.25% 56.58%
Net non-performing loans/net loans to customers 2.88% 2.29%
Net impaired loans/net loans to customers 3.44% 2.41%
(*) The figure as at 31 st December 2011 included bonds subscribed by the Parent amounting to €50 million.
(**) The figures reported here for 2011 differ from those reported in the 2011 Annual Report due to the reclassification of the “fast credit
processing fee”.
(***) The 2012 figure includes charges for voluntary redundancy incentives amounting to €27.2 million.
(****) The 2012 figure includes provisions amounting to €1.7 million for the risk of revocatory clawback action relating to a counterparty.
(*****) For 2012, this item includes the positive effects amounting to about €14 million connected with tax credits for the tax years 2007 to 2011,
resulting from the deductibility of the regional production tax (IRAP) relating to staff costs from corporate income tax (IRES).
The share capital of Banca Popolare di Bergamo as at 31 st December 2012 was wholly owned by UBI
Banca.
The year 2012 ended with a net profit of €129.4 million, which is €42.3 million (or 24.6%) less
than the €171.8 million recorded for the previous year. Excluding the effects of non-recurring
items net of taxes (-€5.8 million in 2012, related to voluntary redundancy incentives incurred,
which were only partly offset by the tax benefit for the deductibility of regional production tax
related to staff costs from corporate income tax, compared to +€7.9 million in 2011 connected
162

to the release of excess provisions for staff costs), net profit for 2012 would be €135.2 million
(compared to €163.9 million in 2011).
Net operating income fell to €339.6 million (-€26.5 million or -7.2%) despite operating income
holding steady at €833.3 million (-€10 million or -1.2%), affected by higher operating expenses
at €493.7 million (+€16.6 million or +3.5%).
Revenues included:
− net interest income, up slightly to €482.5 million (+€2.6 million or +0.5%), the aggregate
result, on one hand of a decrease in the customer component (attributable to changes in
volumes of lending and to the overall increase in the cost of funding) and, on the other
hand, of favourable average interest rate trends for managing securitisations and the
relative liquidity;
− net fees and commissions rose €7.9 million or 2.5% to €323.9 million, incorporating: (a) a
€6.8 million increase in revenue from securities placements due to a good contribution from
UBI Pramerica’s new Sicavs; (b) a €7.2 million increase in commissions for other services,
including commitment fees; (c) a €4.1 million decrease in commissions on the sale of thirdparty
products and services, two-thirds of which was due to the termination of loan
origination activity by B@nca 24-7 in May 2012 (loans are now disbursed directly by BPB);
and (d) a €2.7 million reduction in income from current account fees;
− financial activities produced an overall loss of €5.6 million (+€2.1 million in 2011), due
mainly to negative impacts of fair value changes in hedges on fixed rate mortgages, to the
unwinding of hedges, to repurchases of financial liabilities, as well as to the disposal of
loans to a corporate counterparty, within the framework of an overall credit restructuring
agreement;
− other operating income, which includes income from the reclassified fast credit processing
fee, fell to €32.6 million (-€12.6 million or -27,8%), partly due to differences in
extraordinary items between the two years, and partly due to lower net income from
securitisation transactions and covered bonds.
Expenses included:
− an increase in staff costs to €298.4 million (+€26 million, +9.5%), essentially attributable to
voluntary redundancy incentives, which resulted in an expense of €27.2 million. Excluding
both this non-recurring component in 2012 and the release of excess reserves in 2011, this
item would be down 4.3% year-on-year due partly to a change in staff numbers;
− a reduction in other administrative expenses to €188.1 million (-€9 million or -4.5%);
specifically, reductions were obtained in fees for services provided by Group companies
(amounting to €3.9 million), rent payable (€1.6 million) and in advertising and promotional
expenses (€1.5 million), while there was a significant increase of €1.3 million in credit
recovery expenses.
The result for the year was also influenced by a substantial increase of €51.5 million (62%) in
net impairment losses on loans to €134.7 million, comprised of €143 million in net
impairment losses on specific non-performing loans, against €8.3 million in net portfolio writebacks,
with a view to reducing lending volumes and to bringing in customers with higher
credit scores. To a lesser extent, the result was affected by net provisions for risks and
charges, which rose to €3.9 million (the difference between €6.8 million in provisions for the
year – mainly for revocatory clawback actions and for litigation related to the compounding of
interest – and the release of €2.9 million of provisions).
Profit from the disposal of equity investments fell to zero in 2012, from €1.5 million in 2011,
when a property was sold.
Taxes on income for the year amounted to €71.8 million, inclusive of a non-recurring tax
benefit of about €14 million related to credits from the years 2007-2011, resulting from the
deductibility of the regional production tax (IRAP) relating to staff costs from corporate income
tax (IRES).
With regard to the balance sheet, the total loans stood at €18.8 billion, down €0.8 billion (-
4.2%), primarily due to the “large corporate” segment, while lending to “households and local
163

usinesses” remained broadly stable despite the unfavourable economic context, consistent
with the goal of maintaining support and liquidity for the local economies.
Net deteriorated loans rose by €122.3 million to €1.33 billion. In detail:
• net non-performing loans rose by €92.6 million to €541 million, mainly due to transfers
from the impaired loan category;
• net impaired loans, although the rate of increase diminished, reached €645.3 million, up
€173.2 million, of which, however, €116 million related to a single position for a large
amount having been reclassified from the ‘restructured’ category;
• net restructured loans came to €82.8 million, fell as a consequence by €187.2 million, due
partly to €24.7 million of repayments received;
• loans past due and in arrears rose to €65.7 million (+€43.7 million), affected by a new
regulation (in force since 1 st January 2012) that extends the obligation to reclassify loans
into this category for all loans with arrears exceeding 90 days.
Direct funding dropped by €0.5 billion (-2.8%) to €19.2 billion. This decrease is attributable to
a reduction in securities issued from €6.9 billion to €6.3 billion. The decrease involved both
bonds issued (-€0.3 billion) – mainly due to the maturity in June of a listed subordinated
2001-2012 upper tier two bond with a nominal value of €250 million and to the early
redemption in September of a subordinated 2007-2017 lower tier two bond subscribed by the
Parent with a nominal value of €50 million – and other securities issued (-€0.3 billion),
especially swaps on certificates of deposit denominated in yen.
By contrast, amounts due to customers increased by €0.1 billion to €12.9 billion (+0.6%) due
to good performance by term deposits (+€0.5 billion), which more than offset a reduction in
other forms of funding.
Indirect funding from private individual customers decreased by €0.3 billion to €24.3 billion (-
1%), as a net result of opposing trends for assets under custody (-€1.2 billion to €12.1 billion,
due in part to the disappearance of a substantial private banking position in the first half of
the year) and managed assets (+€0.9 billion to €12.2 billion, driven by UBI Pramerica’s
successful new Sicavs).
At the end of the year, the tier one capital ratio (tier one capital to risk weighted assets) was
20.62% (up from 16.33% at the end of 2011) and the total capital ratio (regulatory capital to
risk weighted assets) was 20.50% (up from 18.48%).
The proposal for the allocation of profit is to distribute dividends of €107.4 million after
allocations in accordance with the law and the articles of association and allocation of the
remaining €13.4 million to the voluntary reserve.
164

BANCO DI BRESCIA SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 13,177,657 13,561,110 -383,453 -2.8%
Direct funding (*) 12,143,008 12,732,715 -589,707 -4.6%
Net interbank debt -250,202 167,426 -417,628 n.s.
Financial assets held for trading 54,351 64,158 -9,807 -15.3%
Available-for-sale financial assets 33,038 26,690 6,348 23.8%
Equity (excluding profit for the year) 1,390,752 1,373,992 16,760 1.2%
Total assets 15,076,993 15,752,411 -675,418 -4.3%
Indirect funding from customers (including insurance) 12,450,726 12,893,350 -442,624 -3.4%
of which: assets under management 6,309,441 6,488,943 -179,502 -2.8%
Income statement
Net interest income (**) 252,888 303,844 (50,956) (16.8%)
Dividends and similar income 312 1,280 (968) (75.6%)
Net fee and commission income 187,569 199,666 (12,097) (6.1%)
Net income (loss) from trading, hedging and disposal/repurchase activities (3,124) 1,426 (4,550) n.s.
Other net operating income/(expense) (**) 21,721 35,525 (13,804) (38.9%)
Operating income 459,366 541,741 (82,375) (15.2%)
Staff costs (***) (171,546) (173,677) (2,131) (1.2%)
Other administrative expenses (122,627) (128,828) (6,201) (4.8%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (10,014) (10,255) (241) (2.4%)
Operating expenses (304,187) (312,760) (8,573) (2.7%)
Net operating income 155,179 228,981 (73,802) (32.2%)
Net impairment losses on loans (112,245) (65,704) 46,541 70.8%
Net impairment losses on other assets/liabilities (****) (1,430) (2,493) (1,063) (42.6%)
Net provisions for risks and charges (489) (5,718) (5,229) (91.4%)
Profit on the disposal of equity investments 206 184 22 12.0%
Pre-tax profit from continuing operations 41,221 155,250 (114,029) (73.4%)
Taxes on income for the year from continuing operations (18,023) (60,298) (42,275) (70.1%)
Profit for the year 23,198 94,952 (71,754) (75.6%)
Other information
Number of branches 322 364 -42
Total work force (actual employees+personnel on leasing contracts) 2,555 2,584 -29
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] 1.67% 6.91%
Cost:income ratio (operating expenses/operating income) 66.22% 57.73%
Net non-performing loans/net loans to customers 2.07% 1.62%
Net impaired loans/net loans to customers 3.26% 2.84%
(*) Includes bonds subscribed by the Parent amounting to €651.8 million as at 31 st December 2012 (€752.3 million as at 31 st December 2011).
(**) The figure reported for 2011 differs from that reported in the 2011 Annual Report due to the reclassification of the “fast credit processing
fee”.
(***) The 2012 figure includes voluntary redundancy incentives amounting to €7.2 million.
(****) The 2011 figure included impairment losses on the available-for-sale companies Immobiliare Fiera di Brescia (€1 million) and Risparmio e
Previdenza (€0.6 million).
The share capital of Banco di Brescia as at 31 st December 2012 was wholly owned by UBI Banca.
The year 2012 ended with a net profit of €23.1 million, down from €95 million in 2011.
Excluding the effects of non-recurring items net of taxes, related to voluntary redundancy
incentive expenses (€5.2 million) that were more than offset by a tax benefit for the
deductibility of regional production tax related to staff costs in corporate income tax (€8.8
million) and by profits from the disposal of AFS equity investments amounting to €1.8 million,
the net result for the year would be €17.8 million (€96.5 million in 2011).
Net operating income fell: the figure of €155.2 million (€73.8 million less than in 2011) is the
combined result of a significant decrease in operating income to €459.4 million (-€82.4 million,
-15.2%) and a more modest reduction in operating expenses to €304.2 million (-€8.6 million, -
2.7%).
165

Revenues included:
− net interest income fell to €252.9 million (-16.8%), mainly because of a decrease in the
volume of loans – both short-term and, to a lesser extent, medium to long-term (mortgages)
– but also due to a higher cost of funding with overall stable volumes of funding;
− net fees and commissions amounted to €187.6 million, a decrease of €12.1 million (-6.1%)
attributable to a drop in income generated from the distribution of insurance products (-
€7.3 million), as well as to the fact that commissions were no longer paid by B@nca 24-7 as
from May 2012 for personal loan origination activity, with the loans now disbursed directly
by the bank (-€3.7 million). In addition, income from securities placements also went down,
by €2.1 million, despite a positive contribution from UBI Pramerica’s new Sicavs;
− trading and hedging activity generated a loss of €3.1 million, compared to income of €1.4
million achieved in 2011. This trend was caused by the impact of hedging on fixed rate
mortgages and by repurchases of the bank’s own bonds on the secondary market. These
factors were only partly offset by gains on fair value changes in bond hedges, transactions
involving available-for-sale assets (profits from disposals and redemptions of equity stakes)
and by currency trading;
− other operating income, which includes income from the reclassified fast credit processing
fee, came to €21.7 million, down from €35.5 million the previous year, due partly to a lack
of income from securitisation and covered bond transactions, earned in 2011.
Costs included:
− staff costs of €171.5 million, €2.1 million less than the previous year. Excluding nonrecurring
costs, in the form of voluntary redundancy incentives in 2012 and a marginal
release of excess provisions in 2011, this item would be €9.5 million lower year-on-year;
− other administrative expenses of €122.6 million were down by €6.2 million, with notable
reductions in fees for services provided by Group companies (-€4.4 million), in rent payable
(-€0.9 million), in telephone and data service charges
(-€0.6 million) and in advertising and promotional expenses (-€1.2 million).
Net impairment losses on deteriorated loans rose to €112.2 million from €65.7 million in 2011,
due primarily to higher specific impairment losses recognised on deteriorated loans. Net
impairment losses on other financial assets and liabilities had an impact of €1.4 million, less
than the €2.5 million impact the previous year, which included write-downs of AFS equity
investments totalling €1.6 million.
Net provisions for risks and charges went from €5.7 million to €0.5 million, reflecting lower
provisioning needs for litigation related to the compounding of interest, financial investments
and revocatory clawback actions.
Income taxes for the year amounted to €18 million (compared to €60.3 million in 2011). The
former figure is net of a tax benefit of €8.8 million related to credits from the years 2007-2011,
resulting from the deductibility of the regional production tax (IRAP) relating to staff costs from
corporate income tax (IRES).
With regard to the balance sheet as at the end of 2012, total loans amounted to €13.2 billion,
a decrease of €0.4 billion (-2.8%) from a year before, attributable to a reduction in both
mortgage loans and short-term loans, only partly offset by increases in current account
balances.
The net deteriorated loans totalled over €1 billion, having risen by €0.2 billion over the course
of the year, due to a widespread increase in every category of deteriorated loan. In detail:
non-performing loans went up from €220.2 million to €273.1 million, led by
reclassifications of positions from other categories;
impaired loans, at €429.6 million, rose €44.7 million due partly to two major loans newly
classified as impaired totalling €29.5 million;
restructured loans rose by €29.6 million to €224.4 million, as four major lending positions
for a total of €44.5 million were added;
loans past due or in arrears amounted to €127.3 million, after an even more substantial
increase of €89 million, as a consequence of both a new regulation (in force since 1 st
January 2012) that extends the obligation to reclassify loans into this category to all loans
with arrears exceeding 90 days, and, more importantly, to the addition of several major
166

positions in the month of September, the majority of which were still outstanding as of
December.
Direct funding stood at €12.1 billion, €0.6 billion less than in 2011 (-4.6%), reflecting a
decrease in amounts due to customers from €9.2 billion to €8.1 billion. This negative trend
was seen in all types of funding, but especially in current accounts, with the exception of term
deposits. By contrast, the trend for debt securities issued was robust, rising by €0.5 billion to
€4 billion, due especially to positive net inflows from bonds subscribed by customers, as well
as to an increase in certificates of deposit (both euro-denominated deposits and swaps on
deposits into yen).
Indirect funding from private individual customers also decreased, by €0.4 billion to €12.4
billion, as a consequence of reductions in both assets under custody (-€0.3 billion to €6.1
billion) and assets under management (-€0.2 billion to €6.3 billion), despite a favourable trend
for both mutual funds and Sicavs, which benefited from sales of UBI Pramerica’s new Sicavs.
As at the end of the year, the tier one capital ratio (tier one capital to risk weighted assets)
was 17.60% (up from 15.43% at the end of 2011) and the total capital ratio (regulatory capital
to risk weighted assets) was 17.60% (up from 15.75%).
The proposal for the allocation of profit is to distribute dividends of €13.4 million after
allocations in accordance with the law and the articles of association.
167

BANCA POPOLARE COMMERCIO E INDUSTRIA SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 8,347,255 8,563,354 -216,099 -2.5%
Direct funding 7,162,967 7,496,973 -334,006 -4.5%
Net interbank debt -474,075 -139,265 334,810 240.4%
Financial assets held for trading 48,586 41,756 6,830 16.4%
Available-for-sale financial assets 15,501 10,366 5,135 49.5%
Equity (excluding profit for the year) 1,160,471 1,159,664 807 0.1%
Total assets 9,779,685 9,819,351 -39,666 -0.4%
Indirect funding from customers (including insurance) 9,791,680 10,057,784 -266,104 -2.6%
of which: assets under management 4,338,237 4,132,113 206,124 5.0%
Income statement
Net interest income (*) 171,948 205,715 (33,767) (16.4%)
Dividends and similar income 1 - 1 -
Net fee and commission income 141,005 137,313 3,692 2.7%
Net loss from trading, hedging and disposal/repurchase activities (3,158) (832) 2,326 279.6%
Other net operating income/(expense) (*) 13,539 14,884 (1,345) (9.0%)
Operating income 323,335 357,080 (33,745) (9.5%)
Staff costs (**) (132,256) (127,136) 5,120 4.0%
Other administrative expenses (101,015) (106,440) (5,425) (5.1%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (6,459) (7,097) (638) (9.0%)
Operating expenses (239,730) (240,673) (943) (0.4%)
Net operating income 83,605 116,407 (32,802) (28.2%)
Net impairment losses on loans (35,208) (25,220) 9,988 39.6%
Net impairment losses on other assets/liabilities (713) (888) (175) (19.7%)
Net provisions for risks and charges (***) (8,881) (2,134) 6,747 316.2%
Loss on the disposal of equity investments - (2) (2) (100.0%)
Pre-tax profit from continuing operations 38,803 88,163 (49,360) (56.0%)
Taxes on income for the year from continuing operations (14,800) (38,153) (23,353) (61.2%)
Profit for the year 24,003 50,010 (26,007) (52.0%)
Other information
Number of branches 219 235 -16
Total work force (actual employees+personnel on leasing contracts) 1,676 1,713 -37
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] 2.07% 4.31%
Cost:income ratio (operating expenses/operating income) 74.14% 67.40%
Net non-performing loans/net loans to customers 3.80% 3.60%
Net impaired loans/net loans to customers 2.04% 2.15%
(*) The figures as at 31 st December 2011 differ from those published in the 2011 Annual Report due to the reclassification of the Commissione
di Istruttoria Veloce ("fast credit processing fee").
(**) The figure as at 31 st December 2012 includes leaving incentive expenses in the amount of €12.9 million.
(***) The figure as at 31 st December 2012 includes allocations in the amount of €7.3 million made against the risks of a revocation clawback
action relating to a sole counterparty.
As at 31 st December 2012, UBI Banca held 75.077% of the share capital of Banca Popolare Commercio, the
Banca del Monte di Lombardia Foundation held 16.237% and the remaining 8.686% was held by Aviva
Spa.
This bank ended the year with a profit of €24 million, compared to the €50 million earned in
2011. Excluding non-recurring items (-€1.9 million in 2012; +0.3 million compared to the
previous year, both net of taxes) the net income for the year amounted to €25.9 million (€49.7
million in 2011).
Net operating income fell to €83.6 million (-€32.8 million), the result of a decrease in operating
income to €323.3 million (-€33.7 million; -9.5%) against essentially unchanged operating
expenses of €239.7 million (-0.9 million; -0.4%).
As regards revenues:
168

− net interest income decreased to €171.9 million (-16.4%), principally due to increased
interest rates on funding and to the reduction in the volume of lending, in both the short
and medium to long-terms, together with a fall in rates, particularly in the mortgage sector;
− net fee and commission income increased slightly to €141 million (+€3.7 million; + 2.7%),
the result of the positive trend for assets under management (+€9.1 million), benefiting
from placements of the new UBI Pramerica Sicav and from the positive results for current
accounts (+€2.8 million), which also includes commitment fees. Assets under custody
diminished (- €6.6 million), as did commissions for the sale of third-party products and
services, partially as a result of the termination, in May 2012, of loan placement business
by B@nca 24-7, now performed directly by the Bank;
− net trading and hedging activity recorded a loss of €3.2 million
(-€0.8 million in December 2011) due to the negative impact of hedges on fixed rate
mortgages and the repurchase of own bonds on the secondary market, which was only
partially offset by gains from fair value changes in hedges on bonds;
− the remaining operating income and expenses, including the reclassified Commissione di
Istruttoria Veloce ("fast credit processing fee") amounted to €13.5 million, as compared to
€14.9 million for the previous year, due partially to the effect of increased expenses
associated with securitisations.
With regard to expenses:
− staff costs rose to €132.3 million, with an increase compared to the previous year of €5.1
million, attributable to leaving incentive expenses amounting to €12.9 million. Net of nonrecurring
components, this item was down by €8.2 million, principally due to changes in
personnel numbers;
− other administrative expenses amounted to €101 million, a significant reduction (-5.4
million) due to cost control and to improved efficiency, in particular with regard to the item
"service fees paid to Group companies" (- €2.3 million).
The net impairment losses on loans increased by approximately €10 million to €35.2 million,
mainly due to a rise in specific impairment losses on deteriorated loans.
Net impairment losses on other assets/liabilities also fell slightly (to €0.7 million from €0.9
million).
The net provisions for risks and charges rose to €8.9 million (compared to €2.1 million at the
end of 2011) principally due to the effect of the provisions (€7.3 million) to meet the risks of a
revocation clawback action relating to a sole counterparty.
Taxes on income for the year amounted to €14.8 million (€38.2 million in 2011) and include
tax credit in the amount of €7.5 for the years 2007-2011, resulting from the tax benefits
connected to the deductibility of the IRAP (local production tax) relating to staff costs (a nonrecurring
item) from corporate income taxes (IRES).
In terms of the balance sheet, loans fell by €0.2 billion to €8.3 billion (- 2.5%), primarily due to
the performance of mortgage business.
Total net deteriorated loans stood again at €557.3 million, substantially unchanged compared
to last year's figure (+€5 million), as a result of a reduction in impaired loans (- €13.9 million
to €170.5 million) against increases in non-performing loans (+€8.6 million to €317.3 million),
in restructured exposures (+€2.5 million to €55.9 million) and in positions past due and/or in
arrears (+€7.8 million to €13.6 million), the latter subject, as of 1 st January 2012, to the new
regulations that require that all accounts over 90 days past due be placed into this category.
Direct funding amounted to €7.2 billion, falling by €0.3 billion compared to 2011(-4.5%), a
refection of the performance of amounts due to customers, down to €5.5 billion (from €5.8
billion in the preceding year) despite the favourable trend for term deposits (+€0.2 billion).
Debt securities issued remained stable at €1.6 billion (- €28.7 million), evidencing, within this
item, a net decrease in the rate of bond sales (- €44.9 million) and a positive trend for
certificates of deposit (+€16.2 million).
Indirect funding from private clients also decreased, down by €0.3 billion to €9.8 billion,
affected by the reduction in assets under administration (- €0.5 billion to €5.5 billion) only
partially compensated by the positive performance by assets under management (+€0.2 billion
169

to €4.3 billion), driven in particular by the mutual fund and Sicav business, on the strength of
sales of the new UBI Pramerica Sicav.
At the end of the year, capital ratios consisted of a tier one ratio (tier one capital to risk
weighted assets) of 24.57% (20.75% at the end of 2011) and a total capital ratio (regulatory
capital/risk-weighted assets) of 24.94% (20.74%).
The proposal for the use of profit is to distribute dividends of €15.4 million after legal and
article of association allocations.
170

BANCA REGIONALE EUROPEA SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 9,203,899 9,728,624 -524,725 -5.4%
Direct funding (*) 7,860,910 8,195,466 -334,556 -4.1%
Net interbank debt -463,634 -419,343 44,291 10.6%
Financial assets held for trading 28,906 29,972 -1,066 -3.6%
Available-for-sale financial assets 17,580 13,194 4,386 33.2%
Equity (excluding profit for the year) 1,351,491 1,473,446 -121,955 -8.3%
Total assets 10,246,864 10,970,006 -723,142 -6.6%
Indirect funding from customers (including insurance) 8,069,733 8,271,417 -201,684 -2.4%
of which: assets under management 4,140,316 4,211,543 -71,227 -1.7%
Income statement
Net interest income (**) 176,881 209,949 (33,068) (15.8%)
Dividends and similar income 237 412 (175) (42.5%)
Net fee and commission income 123,503 122,916 587 0.5%
Net loss from trading, hedging and disposal/repurchase activities (2,066) (958) 1,108 115.7%
Other net operating income/(expense) (**) 17,017 20,404 (3,387) (16.6%)
Operating income 315,572 352,723 (37,151) (10.5%)
Staff costs (***) (146,921) (137,645) 9,276 6.7%
Other administrative expenses (****) (100,680) (98,366) 2,314 2.4%
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (10,025) (10,092) (67) (0.7%)
Operating expenses (257,626) (246,103) 11,523 4.7%
Net operating income 57,946 106,620 (48,674) (45.7%)
Net impairment losses on loans (93,820) (47,041) 46,779 99.4%
Net impairment losses on other assets/liabilities 708 (1,100) 1,808 n.s.
Net provisions for risks and charges (2,639) (1,070) 1,569 146.6%
Loss on the disposal of equity investments and impairment of goodwill (*****) (4) (226) (222) (98.2%)
Pre-tax profit (loss) from continuing operations (37,809) 57,183 (94,992) n.s.
Taxes on income for the year from continuing operations (******) 11,245 (25,807) 37,052 n.s.
Profit (loss) for the year (26,564) 31,376 (57,940) n.s.
Other information
Number of branches 259 286 -27
Total work force (actual employees+personnel on leasing contracts) 1,899 1,936 -37
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] -1.97% 2.13%
Cost:income ratio (operating expenses/operating income) 81.64% 69.77%
Net non-performing loans/net loans to customers 2.80% 2.32%
Net impaired loans/net loans to customers 3.87% 3.27%
The figures as at 31 st December 2011 have been restated to included the results of the Banca di San Giorgio, merged on 22 nd October 2012.
(*) Inclusive of bonds subscribed by the Parent amounting to €892 million as at 31 st December 2012 (€935 million as at 31 st December 2011).
(**) The figures for 2011 have been revised due to the reclassification of the Commissione di Istruttoria Veloce ("fast credit processing fee").
(**) The figure for 2012 includes leaving incentive expenses in the amount of €17.4 million.
(****) The figure for 2012 includes non-recurring expenses in the amount of €3.7 million resulting from the merger of Banco di San Giorgio.
(*****) In 2011 the item included an impairment loss on the goodwill of the Nice branch amounting to €0.2 million.
(******) In 2012 the item included a positive impact of €7.7 million in tax credits, for the years 2007-2011, resulting from the tax benefits due to
the deductibility of IRAP (local production tax) relating to staff costs from corporate income tax (IRES).
As at 31 st December 2012, UBI Banca held 74.716% of the share capital of Banca Regionale Europea, the
Cassa di Risparmio di Cuneo Foundation held 24.904% and the remaining 0.380% was held by private
individual shareholders.
On 22 nd October 2012, the merger of Banco di San Giorgio (BSG) into Banca Regionale
Europea (BRE) became effective. For details of the operation, please see the "The consolidation
area" section on this Report. In order to facilitate operational analysis, the results for BRE
relative to the year 2011 have been recalculated on a like-for-like basis, taking into account
those of BSG.
The year 2012 ended with a loss of €26.6 million, compared with a profit of €31.4 million in
2011. Excluding non-recurring items (- €7.5 million in 2012 and +€0.2 million in 2011, net of
taxes), the company incurred a loss of €19.1 million in 2012 (compared to a profit of €31.2
million in 2011).
171

Net operating income performed poorly (-€48.7 million to €57.9 million), the aggregate result of
a sharp decrease, to €315.5 million, of operating income (-€37.2 million; -10.5%) and an
increase to €257.6 million of operating costs (+€11.5 million; + 4.7%).
Income performed as follows:
− the net interest income fell by €33.1 million to €176.9 million ( - 15.8%), due principally
increased interest rates on funding and to a reduction in the volume of lending to
customers;
− net fees and commissions remained unchanged, rising only slightly from €122.9 to 123.5
million. Within this component, managed assets grew (+€4.3 million) due to sales of the
new UBI Pramerica Sicav and to current accounts (+€3.7 million), which also includes
commitment fees. On the other hand, there was a drop in assets under custody (-€5.3
million) and in commissions on sales of third party products and services, due partially to
the termination, in May 2012, of loan origination activities by B@nca 24-7, now performed
directly by the Bank;
− trading and hedging activity produced negative results in the amount of -€2.1 million (-€1
million in 2011), due to the negative impact resulting from the change in fair value of
hedges on fixed rate mortgages and on repurchases on the secondary market of own bonds,
only partially offset by gains from fair value changes in hedges on bonds;
− other operating income and costs, including the reclassified Commissione di Istruttoria
Veloce ("fast credit processing fee"), fell by €3.4 million to €17 million also due to greater
costs for securitisations and reduced expense recovery.
With regard to expenses:
− staff costs rose to €146.9 million (+€9.3 million), but this figure includes €17.4 million in
leaving incentive expenses. Net of this non-recurring component, the item fell by 6.1%, in
relation amongst other things to changes in staff numbers;
− other administrative expenses, amounting to €100.7 million (+€2.3 million), include nonrecurring
expenses connected with the merger of the Banco di San Giorgio amounting to
€3.7 million, of which €3.4 million were for fees for services provided by Group companies.
Net of that extraordinary component, the item fell by €1.4 million attributable to savings on
costs, particularly with regard to advertising and promotion expenses (-€1.1 million).
Net impairment losses on loans doubled to €93.8 million (+€46.8 million), as a result of
increased case-by-case recognition of impairment on deteriorated loans, nearly half of which
originated by the former BSG. This was a consequence of higher provisions mainly the result
of a deterioration in nearly all property positions, caused by longer times for the completion or
commencement of creditor proceedings which not only caused a significant reduction in the
value of the credit recovered but also a decrease in the value of the mortgage guarantees
securing the loans.
Net reversals of impairment losses on other assets and liabilities were recognised amounting to
€0.7 million, against net impairment losses amounting to €1.1 million in 2011, due amongst
other things to an increase in unsecured guarantees in the amount of €0.6 million.
Net provisions for risks and charges, up by €1.6 million to €2.6 million, include provisions
charges for the year amounting to €2.3 million in relation to complaints, compounding of
interest, bonds and litigation, the latter includinng a large position amounting to
approximately €0.9 million.
Taxes on income for the year, positive in the amount of €11.2 million, benefited from €7.7
million in tax credits for the years 2007-2011, classified as non-recurring, the result of the tax
benefit from the deductibility of IRAP relating to staff costs from corporate income tax (IRES).
As concerns the balance sheet, loans amounted to €9.2 billion - including €137.3 million
relating to foreign branches – down by €0.5 billion (-5.4%), principally in short-term types of
lending. The difficult economic situation contributed to the deterioration in the quality of
loans and receivables and at the end of the year net deteriorated loans had reached €724.7
million (+110.7%). Non-performing loans increased (+€32 million to €257.3 million), as did
impaired loans (+€38.3 million to €356.6 million) and positions past due and in arrears
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(+€50.7 million to €78 million), the latter subject, as of 1 st January 2012, to the new
regulations that requires all accounts over 90 days past due to be placed in this category. On
the other hand, only restructured loans diminished (-€10.3 to €32.8 million), due to the partial
collection of one position and the reclassification into another category of deteriorated loans
relating to another counterparty.
Direct funding totalled €7.9 billion, down €0.3 billion compared to 2011 (-4,1%). The changes
in the item reflect similar changes in amounts due to customers, which fell €0.4 billion to €4.8
billion (including €47.4 million from foreign branches), despite the favourable performance of
time deposits (+€0.2 billion) On the other hand, debt securities issued increased slightly to €3
billion, driven by certificates of deposit (+€77 million), prevalently in euro, while the net flow of
bond placements ended with a loss of €20 million.
Indirect funding from private individual customers decreased by €0.2 billion to €8.1 billion (-
2.4%) as a consequence of the reduction in both assets under custody and assets under
management. In the latter case this was despite the gains in the mutual fund and Sicav
sector, driven by the placement of the new UBI Pramerica Sicavs.
Capital ratios at the end of the year consisted of a tier one ratio (tier on capital to risk weighted
assets) of 23.97% (26.19% at the end of 2011) and a total capital ratio (regulatory capital to
risk weighted assets) of 24.32%,(28,52%).
The proposal to replenish the loss of €26.6 million entails drawing entirely on the article of
association reserve.
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BANCA POPOLARE DI ANCONA SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 7,769,649 7,810,341 -40,692 -0.5%
Direct funding 6,445,102 6,429,378 15,724 0.2%
Net interbank debt -882,542 -839,437 43,105 5.1%
Financial assets held for trading 60,990 44,342 16,648 37.5%
Available-for-sale financial assets 17,659 19,740 -2,081 -10.5%
Equity (excluding profit for the year) 871,656 874,448 -2,792 -0.3%
Total assets 8,841,812 8,744,167 97,645 1.1%
Indirect funding from customers (including insurance) 3,440,984 3,533,775 -92,791 -2.6%
of which: assets under management 1,597,113 1,562,412 34,701 2.2%
Income statement
Net interest income (*) 172,439 198,050 (25,611) (12.9%)
Dividends and similar income 74 1,025 (951) (92.8%)
Net fee and commission income 114,455 112,157 2,298 2.0%
Net loss from trading, hedging and disposal/repurchase activities (5,778) (1,001) 4,777 477.2%
Other net operating income/(expense) (*) 16,610 18,649 (2,039) (10.9%)
Operating income 297,800 328,880 (31,080) (9.5%)
Staff costs (**) (135,056) (126,647) 8,409 6.6%
Other administrative expenses (85,112) (87,431) (2,319) (2.7%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (11,386) (11,489) (103) (0.9%)
Operating expenses (231,554) (225,567) 5,987 2.7%
Net operating income 66,246 103,313 (37,067) (35.9%)
Net impairment losses on loans (73,458) (43,334) 30,124 69.5%
Net impairment losses on other assets/liabilities (123) 726 (849) n.s.
Net provisions for risks and charges (799) (1,282) (483) (37.7%)
Profit (loss) on the disposal of equity investments (***) 5,159 (28,147) 33,306 n.s.
Pre-tax profit (loss) from continuing operations (2,975) 31,276 (34,251) n.s.
Taxes on income for the year from continuing operations (1,468) (29,000) (27,532) (94.9%)
Profit (loss) for the year (4,443) 2,276 (6,719) n.s.
Other information
Number of branches 220 238 -18
Total work force (actual employees+personnel on leasing contracts) 1,675 1,728 -53
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] -0.51% 0.26%
Cost:income ratio (operating expenses/operating income) 77.75% 68.59%
Net non-performing loans/net loans to customers 4.96% 4.35%
Net impaired loans/net loans to customers 4.48% 3.50%
(*) In 2011 the figures differ from those published in the 2011 financial statements due to reclassification of the Commissione di Istruttoria
Veloce (fast credit processing fee).
(**) The figure for 2012 includes leaving incentive costs of €16.6 million.
(***) The figure for 2012 includes the €1.5 million writeback for the investment in Centrobanca and the €3.7 million gain from the sale of the
investment in Arca SGR SpA. In 2011 the item included the effects of the recognition of impairment losses on the investments in UBI
Leasing (€16.2 million) and in Centrobanca (€11.9 million).
As at 31 st December 2012, UBI Banca held 92.97% of the share capital of Banca Popolare di Ancona, Aviva
Spa held 6.49% and the remaining 0.54% was held by non-controlling shareholders.
The year 2012 ended with a loss of €4.4 million, compared with a profit of €2.3 million in
2011.
Operating income fell, resulting in net operating income of €66.2 million (down 37.1 million),
due to operating income falling to €297.8 million (down €31.1 million, a decrease of 9.4%),
despite lower operating costs (down €6 million to €231.6 million).
Revenues performed as follows:
− net interest income fell to €172.4 million (down 12.9%), due on the one hand to the
increased cost of funding and on the other to the gradual reduction in volumes of shortterm
lending, only partly offset by the increase in medium to long-term loans (mortgages);
174

−
−
−
net commission income increased to €114.5 million (up €2.3 million, or 2%), the result of
the positive trend for assets under management, which benefited from the placement of the
new UBI Pramerica Sicavs and from current accounts, which also include commitment
fees.
Commissions on the placement of products and third-party services fell, in part due to the
discontinuation from May 2012 of the loan origination business by B@nca 24-7, which is
now provided directly by the Bank;
trading and hedging delivered a net loss of €5.8 million (compared with -€1 million in
December 2011) due to the negative impact of hedges on fixed-rate mortgages and the
repurchase of own bonds on the secondary market, only partly offset by hedges on bonds
and forex trading;
other operating income and expenses, including the reclassified commissione di istruttoria
veloce (fast credit processing fee) fell to €16.6 million from €18.6 million the previous year.
As concerns operating expenses:
− staff costs rose to €135.1 million, an increase of €8.4 million due to non-recurring items
such as the cost of leaving incentives, (charged at €16.6 million). Net of these non-recurring
components, the item fell by €8.2 million due partly to changes in staff numbers;
− other administrative expenses fell by €2.3 million to €85.1 million.
The main savings were in "tenancy of premises” (down €0.9 million), “telephone and data
transmission” (down €0.7 million) and "advertising and marketing” (down €0.5 million).
Net impairment losses on loans rose sharply from €43.3 million to €73.5 million, mainly as a
result of an increase in case-by-case recognition of impairment losses on loans.
Net provisions for risks and charges fell slightly to €0.8 million (from €1.3 million the previous
year) and mainly concerned provisions made for the compounding of interest and financial
investments.
The year recorded profits from the disposal of investments and equity investments for a total of
€5.2 million, comprising the writeback for the investment in Centrobanca (€1.5 million) and
the gain from the sale of the investment in Arca SGR (€3.7 million). In 2011 the item (a loss of
€28.1 million) consisted of impairment losses recognised on investments in UBI Leasing (€16.2
million) and Centrobanca (€11.9 million), as a result of impairment tests.
Taxes on income for the year totalled €1.5 million (compared with €29 million in 2011) and
includes a tax credit of €6.8 million for 2007-2011, resulting from the tax benefit deriving from
IRES (corporate income tax) being deductible from the IRAP (local production tax) relating to
staff costs (a non-recurring item).
As concerns balance sheet items, loans to customers amounted to €7.8 billion, more or less in
line with the levels at the end of 2011.
Total net deteriorated loans rose to €816.7 million from the €661.6 million in the previous
year. This increase affected all types of exposure, albeit at varying levels:
non-performing loans reached €385,2 million, up 13.4% (an increase of €45.4 million),
mainly due to transfers from components previously classified as impaired loans;
impaired loans rose from €273.5 million to €348.3 million, incorporating transfers from
past-due loans and especially new arrivals from performing loans;
restructured loans rose slightly from €28.9 million to €31.2 million;
loans past-due and/or in arrears more than doubled to €52 million (from €19.4 million at
the end of 2011). It should be noted that the latter are subject to the new rules effective
from 1 st January 2012 which extended the obligation of inclusion in this category to all
loans in arrears by more than 90 days.
Direct funding of €6.4 billion remained unchanged from the previous year (up 0.2%) as a
result of a marginal decrease in amounts due to customers, which fell to €4.3 billion (down
€55 million from 2011) – within which item there has been a partial switch from current
accounts to term deposits (up €0.2 billion to €0.3 billion) – and an equally small increase in
debt securities issued, which rose to €2.1 billion (up €71 million, of which €52 million were
bonds and €19 million certificates of deposit).
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Indirect funding from private individual customers amounted to €3.4 billion, a €0.1 billion fall
from the end of 2011 essentially due to assets under custody (down €0.1 billion to €1.8 billion)
against stable assets under management (€1.6 billion), sustained by the positive performance
of the mutual fund and Sicav sector, due to the placement of the new UBI Pramerica Sicavs.
At the end of the year the capital ratios consisted of a tier one ratio (tier one capital to risk
weighted assets) of 18.68% (15.84% at the end of 2011) and a total capital ratio (regulatory
capital to risk weighted assets) of 18.78% (16.27%).
On 26 th June 2012 an Extraordinary General Meeting of the bank passed a resolution for a free-of-charge
capital increase. This is described in the previous section of the report entitled ‘The scope of the
consolidation’.
The proposal to replenish the loss of €4.4 million entails drawing on the taxed profit reserve.
176

BANCA CARIME SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 4,730,986 4,865,871 -134,885 -2.8%
Direct funding 7,063,930 7,552,126 -488,196 -6.5%
Net interbank debt 3,130,275 3,555,824 -425,549 -12.0%
Financial assets held for trading 3,681 3,395 286 8.4%
Available-for-sale financial assets 18,667 27,661 -8,994 -32.5%
Equity (excluding profit for the year) 1,543,895 1,548,395 -4,500 -0.3%
Total assets 9,184,854 9,684,175 -499,321 -5.2%
Indirect funding from customers (including insurance) 5,664,244 5,375,500 288,744 5.4%
of which: assets under management 2,982,988 2,894,381 88,607 3.1%
Income statement
Net interest income (*) 200,574 235,838 (35,264) (15.0%)
Dividends and similar income 124 122 2 1.6%
Net fee and commission income 110,067 112,158 (2,091) (1.9%)
Net loss from trading, hedging and disposal/repurchase activities (5,359) (928) 4,431 477.5%
Other net operating income/(expense) (*) (**) 14,383 24,325 (9,942) (40.9%)
Operating income 319,789 371,515 (51,726) (13.9%)
Staff costs (***) (168,654) (144,902) 23,752 16.4%
Other administrative expenses (92,341) (94,708) (2,367) (2.5%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (13,403) (14,082) (679) (4.8%)
Operating expenses (274,398) (253,692) 20,706 8.2%
Net operating income 45,391 117,823 (72,432) (61.5%)
Net impairment losses on loans (42,965) (22,778) 20,187 88.6%
Net impairment losses on other assets/liabilities (324) (488) (164) (33.6%)
Net provisions for risks and charges (6,269) (2,676) 3,593 134.3%
Profit (loss) on the disposal of equity investments and impairment of goodwill (****) 61 (11,392) 11,453 n.s.
Pre-tax profit (loss) from continuing operations (4,106) 80,489 (84,595) n.s.
Taxes on income for the year for continuing operations (*****) (2,330) (34,508) (32,178) (93.2%)
Profit (loss) for the year (6,436) 45,981 (52,417) n.s.
Other information
Number of branches 255 294 -39
Total work force (actual employees+personnel on leasing contracts) 2,143 2,184 -41
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] -0.42% 2.97%
Cost:income ratio (operating expenses/operating income) 85.81% 68.29%
Net non-performing loans/net loans to customers 2.71% 1.93%
Net impaired loans/net loans to customers 4.11% 3.34%
(*) The figures for 2011 differ from those published in the 2011 Annual Report due to the reclassification of the Commissione di Istruttoria
Veloce ("fast credit processing fee").
(**) In 2012 the figure included a payment of €1.7 million relating to the loss on a revocation clawback action concerning a single position. In
2011 the figure included insurance compensation of approximately €4 million following a decision by the Court of Appeal of Catanzaro.
(***) The figure for 2012 included leaving incentive expenses in the amount of €29.3 million. In 2011 the figure included the release of a
provision made previously of €3.7 million.
(****) In 2011 the item included an impairment loss of €12.1 million on the goodwill of the bank.
(*****) In 2012 the item included the positive impact of €7.6 million in tax credits, for the years 2007-2011, resulting from the tax benefits of the
deductibility of IRAP (local production tax) relating to staff costs from corporate income tax (IRES).
As at 31 st December 2012, UBI Banca held 92.8371% of the share capital of the Banca Carime, Aviva Spa
held 7.1476% and the remaining 0.0153% was held by non-controlling shareholders.
The year 2012 ended with a loss of €6.4 million for Banca Carime, compared with a profit of
€46 million in 2011. Net of non-recurring items, net of taxes (-€13.7 million in 2012, relating
to leaving incentives only partially mitigated by the tax benefits arising from the deductibility
of IRAP [local production tax] relating to staff costs from corporate income taxes [IRES],
and -€8.3 million in 2011 due to impairment losses on goodwill), 2012 ended with a profit of
€7.3 million (a profit of €54.2 the year before).
The decrease in profits is due primarily to a fall in net operating income, which decreased to
€45.4 million (-€72.4 million; -61.5%), reflecting a drop in operating income to €319.8 million
(-€51.7 million; -13.9%) and an increase in operating expenses to €274.4 million (+€20.7
million; +8.2%).
177

As regards revenues:
− net interest income was €200.6 million (-€35.3 million; -15%) affected to a large extent by
the increase in interest rates on funding and by the reduction in volumes of lending;
− the trend for net fee and commission income, which fell to €110.1 million (-€2.1 million; -
1.9%), included: a decline in fee and commission income on the distribution of third party
services (-€5 million) connected on the one hand with the termination by B@nca 24-7, as of
May 2012, of its loan origination business, now performed directly by Banca Carime, and,
on the other, with the sale of insurance policies; lower commissions on the placement and
subscription of securities (-€0.9 million), despite the positive contribution from the new UBI
Pramerica Sicavs; an increase in other services (+€2.6 million), including commitment fees
and the receipt and placement of orders (+€1 million);
− the net loss from trading, hedging and disposals and repurchases worsened, falling from -
€0.9 million to -€5.3 million, principally due to fair value changes in hedges on fixed-rate
mortgages and to repurchases of own bonds on the secondary market;
− the contribution of other income and expense, including the reclassified Commissione di
Istruttoria Veloce ("fast credit processing fee"), fell to €14.4 million (-€9.9 million; -40.9%)
due, amongst other things, to changing contributions from certain items during the two
years (-€1.7 million due to a loss on a revocation clawback action in 2012; +€4 million
relating to an insurance reimbursement in 2011).
With regard to expenses:
− the increase in staff costs to €168,7 million (+€23,8 million; +16,4%) is due mainly to
leaving incentive expenses amounting to €29.3 million. Net of this non-recurring
component, the item fell by 3.9%, in relation, amongst other things, to changes in staff
numbers;
− reductions in other administrative expenses to €92.3 million (-€2.4 million; %-2.5) included
€1.1 million in fees for services provided by Group companies.
The year's results were also influenced by a significant increase in net impairment losses on
loans, which amounted to €43 million (+€20.2 million; +88.6%), and to a lesser degree by net
provisions for risks and charges, which more than doubled to €6.3 million (+3.6 million), due
above all to a provision of €7 million made against the risk relating to legal proceedings
regarding compounding of interest.
Taxes on income for the year, positive in the amount of €2.3 million, benefited from €7.6
million in tax credits for the years 2007-2011, classified as non-recurring, deriving from the
deductibility of IRAP (local production tax) relating to staff costs from corporate income taxes
(IRES).
As concerns the balance sheet, total loans amounted to €4,7 billion (-€0.1 billion; -2,8%) as a
consequence of the negative effects brought about by the generally unfavourable economic
situation. Net deteriorated loans rose to €361.4 million (+€90.9 million). This increase was
generalised and involved non-performing loans (+€34.3 million to €128.2 million), impaired
loans (+€32.1 million to €194.4 million), restructured exposures (+€7.7 million to €9.8 million,
relating to five positions) and positions past due and/or in arrears (+€16.8 million to €29
million), the latter subject, as of 1 st January 2012, to the new regulations that require all
accounts over 90 days past due to be placed in this category.
Direct funding, amounting to €7.1 billion (-€0.5 billion; -6,5%), was principally affected by a
fall of €0.4 billion to €4.8 billion in amounts due to customers – despite the strong
performance of term deposits (+€0.1 billion) – while debt securities issued fell by €0.1 billion to
€2.3 billion, the aggregate result of a partial change in the composition out of bonds (-€0.2
billion 1 ) and into certificates of deposit (+€0.1 billion), principally in euro.
Direct funding from private individual customers increased by approximately €0.3 billion to
€5.7 billion (+ 5.4%). Assets under custody rose by €0.2 billion to €2.7 billion, benefiting from
1 This trend was affected by the maturity, in June, of an upper tier two bond with subordination clause with a nominal value of €164
million.
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the subscription of bonds by the Parent amounting to €0.26 billion nominal. Assets under
management improved as well, up €0.1 billion to €3 billion, driven by the mutual fund and
Sicav business, on the strength of the positive response to the new UBI Pramerica Sicavs.
At the end of the year capital ratios consisted of a tier one ratio (tier one capital to risk
weighted assets) of 33.30%, (27.19% at the end of 2011) and a total capital ratio (regluatory
capital to risk-weighted assets) of 32.52% (31.63%).
The proposal to replenish the loss of €6.4 million entails drawing entirely on the extraordinary
reserve.
179

CENTROBANCA SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 6,272,078 7,160,450 -888,372 -12.4%
Direct funding (*) 6,329,156 6,700,750 -371,594 -5.5%
Net interbank debt -98,844 -642,178 -543,334 -84.6%
Financial assets held for trading 557,729 520,086 37,643 7.2%
Financial assets designated at fair value 77,059 - 77,059 -
Available-for-sale financial assets 377,443 487,522 -110,079 -22.6%
Equity (excluding profit for the year) 576,044 542,566 33,478 6.2%
Total assets 9,919,448 10,672,079 -752,631 -7.1%
Income statement
Net interest income 94,947 86,672 8,275 9.5%
Dividends and similar income 1,320 939 381 40.6%
Net fee and commission income 20,053 33,638 (13,585) (40.4%)
Net income from trading, hedging and disposal/repurchase activities 20,409 15,288 5,121 33.5%
Other net operating income/(expense) 1,786 2,002 (216) (10.8%)
Operating income 138,515 138,539 (24) (0.0%)
Staff costs (**) (31,399) (31,347) 52 0.2%
Other administrative expenses (***) (20,367) (19,512) 855 4.4%
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (996) (1,005) (9) (0.9%)
Operating expenses (52,762) (51,864) 898 1.7%
Net operating income 85,753 86,675 (922) (1.1%)
Net impairment losses on loans (80,003) (60,439) 19,564 32.4%
Net impairment losses on other assets/liabilities 1,378 (3,602) 4,980 n.s.
Net provisions for risks and charges 2,354 (1,040) 3,394 n.s.
Profit (loss) on the disposal of equity investments and impairment of goodwill (****) 2 (7,188) 7,190 n.s.
Pre-tax profit from continuing operations 9,484 14,406 (4,922) (34.2%)
Taxes on income for the year for continuing operations (*****) (9,201) (13,181) (3,980) (30.2%)
Profit for the year 283 1,225 (942) (76.9%)
Other information
Number of branches 6 6 -
Total work force (actual employees+personnel on leasing contracts) 300 316 -16
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] 0.05% 0.23%
Cost:income ratio (operating expenses/operating income) 38.09% 37.44%
Net non-performing loans/net loans to customers 1.94% 1.48%
Net impaired loans/net loans to customers 4.50% 3.52%
(*) Including bonds subscribed by the Parent amounting to €2,323.1 million as at 31 st December 2012 (€2,326.2 million as at 31 st December
2011).
(**) The figure for 2012 includes leaving incentive costs of €2 million.
(***) In 2012 the item includes €1.3 million in costs relating to the write-off of IT assets to be retired following the merger of Centrobanca with
UBI Banca.
(****) In 2012 the item referred to impairment losses on all the Company’s goodwill.
(*****) In 2012 the item includes the positive impact of €1.8 million in tax credits for the years 2007-2011, resulting from the tax benefit deriving
from IRES (corporate income tax) being deductible from the IRAP (local production tax) relating to staff costs.
As at 31 st December 2012 UBI Banca held 94.3231% of the share capital of Centrobanca, Banca Popolare
di Ancona SpA held 5.4712%, Veneto Banca ScpA held 0.008% and the remaining 0.1049%, was held by
three ‘Popular” banks (cooperatives).
On 6 th February 2013, the plan for the merger of Centrobanca into UBI Banca was approved.
This extraordinary operation had been announced by the Parent in November 2011 as part of
a process to streamline the structure of the Group. The merger will take place within the first
half of 2013 and will take effect from 1 st January 2013 for statutory and taxation purposes.
The severe economic recession in Italy has meant that Centrobanca has had fewer
opportunities to offer new loans to businesses, but has tried to act as a point of reference for
corporate customers seeking new opportunities for expansion in emerging markets (especially
Brazil and China).
180

The year 2012 ended with a profit of €0.3 million, compared with €1.2 million in 2011.
Excluding the effects of non-recurring items, net of taxes (a total of -€1.4 million in 2012 2 and
-€6.5 million in 2011 all of which relates to the writedown of goodwill), the company made a
profit of €1.7 million compared with €7.7 million in 2011.
Net operating income fell slightly to €85.7 million (down 0.9%, or 1.1%), affected by the
increase to €52.8 million in operating expenses (up €0.9 million, or 1.7%), while operating
income remained stable at €138.5 million.
Revenues performed as follows:
− net interest income rose to €94.9 million (up €8.3 million, or 9.5%), due to improved income
from interest-bearing assets after a careful pricing policy on new transactions carried out
during the year, which more than offset the rise in the cost of liabilities, within which there
has been a change in favour of paper funding (bond loans and certificates of deposit);
− net fees and commissions fell to €20 million (down €13.6 million, or 40.4%), affected by the
appreciable decrease in new lending volumes in the first half, while the contribution made
by investment banking rose;
− the profit from financial activities rose to €20.4 million (up €5.1 million, or 33.5%), boosted
by gains on the securities portfolio and on the buyback of own bonds.
With regard to costs:
− staff costs, which include leaving incentive expenses of €2 million, have remained stable at
€31.4 million as a result of the reduction in the average unit cost per employee and to
changes in staff numbers;
− other administrative costs, which rose to €20.4 million (up 0.9 million, or 4.4%), were
affected by higher charges for intragroup professional services (up €0.4 million), partly
because the deteriorated credit processing activity previously carried out by the company
was centralised in the Parent, but mainly due to higher charges for technology services
relating to the write-off of the IT system in preparation for the merger (up €1.3 million).
Total net deteriorated loans rose to €80 million (up €19.6 million, or 32.4%), including caseby-case
recognition of net impairment losses totalling €82.5 million (up €37.1 million) – which
were particularly affected by five significant items accounting for over half of the amount –
against €2.5 million in collective net reversals of impairment resulting partly from the
reduction in the book value of loans (in 2011 portfolio impairment losses of €15 million were
recognised).
The income statement shows €2.3 million in net reversals of provisions for risks and charges
(-€1 million in 2011), mainly due to the elimination of the risk on two significant items, which
involved the release of provisions for a total of €2.5 million.
The reduction to zero of the profits from the disposal of investments and equity investments
and impairment losses on goodwill should be compared with the loss of €7.2 million in 2011,
which was the result of the total writedown of the bank’s goodwill.
Taxes on income for the year amounted to €9.2 million, including a non-recurring income item
of €1.8 million representing the tax credit for the years 2007-2011 resulting from the tax
benefit of IRES (corporate income tax) being deductible from the IRAP (local production tax)
relating to staff costs.
In terms of the balance sheet, loans fell to €6.3 billion (down €0.9 billion, or 12.4%). With
regard to the type of business, there has been a change in the composition of assets out of the
“Acquisition & Shipping” and “Pool” categories, which fell respectively by 23.3% and 17.7%,
into “Project Finance” which rose 21.9%.
The bank’s actions to support local industry were considerably fewer than in 2011, in terms of
both the number of operations authorised (down 83.7% to €0.4 billion), and the funding
2 In detail: -€1.5 million for leaving incentives, +€1.8 million in tax benefits from the possibility of deducting corporate income tax
(Ires) from the local production tax (Irap) relating to staff costs, -€0,9 million in cost for the IT migration to UBI Banca, and -€0,8
million of impairment on AFS securities.
181

provided (down 64.3% to €0.7 billion), which continue to be concentrated mainly on captive
customers 3 .
In the course of the year the rising trend in net deteriorated loans affected all the different
categories, rising to €627.5 million (up €104.3 million, or 19.9%): non-performing loans (up
€15.6 million to €121.7 million), essentially due to the addition of a significant position;
impaired loans (up €30.3 million to €282.3 million), including the addition of six significant
positions for a total of €146.3 million; restructured loans (up €33.7 million to €193.5 million),
increased by transfers from impaired loans, of which €67.9 million are for four significant
amounts; loans that are past-due and in arrears increased €24.7 million to €30 million, the
latter subject since 1 st January 2012 to the new regulation requiring all loans in arrears by
more than 90 days to be included in this category.
Direct funding fell to €6.3 billion (down €0.4 billion, or 5.5%), essentially reflecting the trend in
bond loans, after securities worth €204 million in nominal terms reached maturity and there
were repurchases of €111 million nominal, with no new bond issuances.
Financial assets held for trading increased from €520.1 million to €557.7 million (up 37.6
million), mainly due to the market value of derivatives resulting from hedging risks on behalf
of Group clients.
Available-for-sale financial assets, down from €487.5 to €377.4 million (down €110.1 million),
were affected by changes in corporate bond portfolio investment policies that shifted the focus
of assets onto Italian corporate clients, which resulted in the sale of €126.6 million in
securities not considered core assets.
Financial assets designated at fair value totalled €77.1 million, comprising equity investments
held as part of merchant banking and private equity business, compared with the €79 million
that were classified in December 2011 under financial assets held for trading.
At the end of the year the capital ratios consisted of a tier one ratio (tier one capital to risk
weighted assets) of 9.88% (8.37% at the end of 2011) and a total capital ratio (regulatory
capital to risk weighted assets) of 11.45% (10.24%).
With regard to the imminent merger of the company into UBI Banca, the proposal for the
appropriation of profit is to allocate €268.8 thousand to retained earnings, after setting aside
€14.1 thousand for the statutory reserve.
3 Loans are mainly granted to non-financial counterparties in the manufacturing, commerce and service industries.
182

IW BANK SPA
Figures in thousands of euro
31.12.2012
31.12.2011 Change
% change
Balance sheet
Loans and advances to customers 287,029 246,010 41,019 16.7%
Direct funding 2,883,298 1,903,237 980,061 51.5%
Net interbank debt 1,866,111 853,274 1,012,837 118.7%
Financial assets held for trading 50,488 41,830 8,658 20.7%
Available-for-sale financial assets 783,384 721,772 61,612 8.5%
Equity (excluding profit for the year) 90,749 36,431 54,318 149.1%
Total assets 4,219,206 3,184,143 1,035,063 32.5%
Indirect funding from customers (including insurance) 3,244,644 3,161,568 83,076 2.6%
of which: assets under management 570,517 462,063 108,454 23.5%
Income statement
Net interest income 48,098 35,733 12,365 34.6%
Net fee and commission income 27,993 31,896 (3,903) (12.2%)
Net income (loss) from trading, hedging and disposal/repurchase activities (57) 3,310 (3,367) n.s.
Other net operating income/(expense) (439) 1,514 (1,953) n.s.
Operating income 75,595 72,453 3,142 4.3%
Staff costs (17,543) (19,913) (2,370) (11.9%)
Other administrative expenses (29,824) (32,836) (3,012) (9.2%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (4,789) (8,074) (3,285) (40.7%)
Operating expenses (52,156) (60,823) (8,667) (14.2%)
Net operating income 23,439 11,630 11,809 101.5%
Net impairment losses on loans (1,232) (1,472) (240) (16.3%)
Net impairment losses on other assets/liabilities (265) (373) (108) (29.0%)
Net provisions for risks and charges (*) (2,813) (3,729) (916) (24.6%)
Profit on the disposal of equity investments - 25 (25) (100.0%)
Pre-tax profit from continuing operations 19,129 6,081 13,048 214.6%
Taxes on income for the year from continuing operations (7,510) (5,153) 2,357 45.7%
Profit for the year 11,619 928 10,691 n.s.
Other information
Number of branches 2 2 -
Total work force (actual employees+personnel on leasing contracts) 202 281 -79
Financial ratios
ROE [profit for the year/equity (excluding profit for the year)] 12.80% 2.55%
Cost:income ratio (operating expenses/operating income) 68.99% 83.95%
Net non-performing loans/net loans to customers - -
Net impaired loans/net loans to customers 0.15% 0.14%
The figures as at 31 st December 2011 have been restated to include the results of InvestNet International Spa, merged on 1 st August 2012.
(*) In 2011 the figure included provisions amounting to €2.1 million against unreconciled accounts.
As at 31 st December 2012, UBI Banca held 75.375% of the share capital of IW Bank, Centrobanca held
23.496%, while the remaining 1.129% consisted of treasury shares held in portfolio by the Bank.
IW Bank is the Group's internet bank which provides both its institutional and retail
customers with banking and financial services almost exclusively via the internet. Its range of
services includes trading in financial instruments, the distribution of OICRs (collective
investment instruments), current accounts, the issue of credit and debit cards, electronic
money, insurance, personal loans and mortgages.
As detailed further in the "Significant events" and "Area of consolidation" sections of this annual report, in
2012 the bank saw the completion of a number of steps that are part of a more generalised reorganisation
process of the Group's overall structure and activities:
• on 3 rd April the purchase by UBI Banca of the entire equity investment held by Webstar Spa IW Bank
was concluded;
• the merger of InvestNet International Spa into IW Bank became effective on 1 st August and effective for
accounting and tax purposes as of 1 st January 2012;
• on 30 th November the contribution to UBI Sistemi e Servizi of the "Information Technology”, “Back Office
Trading”, “Security” and “Real Estate” operations took effect against the acquisition of an interest in the
share capital of the above services company.
In January, the company launched a public tender offer to purchase the debt securities issued named “IW
Bank Obbligazioni con opzione di tipo call asiatica” – with maturity on 12 th August 2015 – and “IW Bank
183

Obbligazioni con opzione di tipo call asiatica II tranche” – with maturity on 14 th October 2015 – amounting
to 959 and 878 bonds respectively with a nominal value of €1,000 each. The offer period commenced on
9 th January and concluded on 29 th January with the contribution of 109 bonds (out of 959) and of 54 bonds
(out of 878).
Borsa Italiana, with a provision dated 7 th January 2013, ruled that the two bonds were to be excluded
from the listing as of 6 th March 2013, with the consequent failure of IW Bank to meet the status of listed
issuer.
In 2012 IW Bank further increased the number of active accounts held, up to 121.6 thousand
from 112.1 thousand at the end of 2011. The average daily number of orders received from
customers and executed, however, fell 31.4 thousand from 36.6 thousand in 2011.
It is underlined that the comparative figures in the reclassified balance sheet and income
statement presented for 2011 have been restated on a consistent basis to include the figures
for the merged company InvestNet International Spa.
The bank ended the year with a profit of €11.6 million, an increase of €10.7 million compared
to €0.9 million in 2011, in which non-recurring expenses amounting to €2.1 million figured
heavily.
The increase in profit - mainly due to the improvement in the net operating income, which
more than doubled to €23.4 million (+11.8 million) - reflects an increase in operating income
to €75.6 million (+€3.1 million; +4.3%), together with a significant reduction in operating
expenses to €52.2 million (-€8.7 million; %-14.2).
Income performed as follows:
− growth in net interest income, up €35.7 to €48.1 million (+€12.4 million; +34.6%) is
primarily due to trends for interest rates with a consequent impact on owned available-forsale
securities, consisting principally of variable-rate Italian government securities, and also
on bonds subscribed with the Parent. The item benefited further from decreased interest
rates charged by the ECB during the year, in terms of lower interest to be paid on customer
current accounts, the remuneration of which is indexed to that parameter;
−
net fee and commission income fell to €28 million (-€3.9 million; -12.2%), especially with
regard to the securities trading business, partly in relation to the reduction in the overall
number of transactions performed by customers (-13,2%). On the other hand, the
contributions from assets under management, banking services and the electronic payment
card business were all positive;
− the net result for financial activities was a loss of €0.1 million (+€3.3 million in 2011),
incorporating losses connected with the purchase and sale of BOTs underlying the service
for the IW Power forward product (which in 2011 had generated profits of €1.2 million). The
item was also affected by the absence of gains on the sale of available-for-sale securities
which had been realised in the preceding year.
As regards expenses:
− staff costs fell by €2.4 million to €17.5 million and mainly reflect the reduction in the
average number of staff and the relative average cost;
− other administrative expenses fell by €3 million to €29.8 million due to a reduction in
advertising and promotion expenses (-€2 million) (which in 2011 included the costs of the
advertising campaign for the launch of the high remuneration deposit products IW Power
"Special"), in advisory services (-€1 million) and in rent payable (-€0.9 million), due to the
change in the scope of the lease contract for the bank’s headquarters. On the other hand,
the item "services in outsourcing provided by Group companies" increased significantly (+
2.6 million), including the consideration paid to UBI.S, given that it is a consortium, for
services provided from December relating to the operations contributed and inclusive of
staff costs and depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets which were contributed;
− depreciation, amortisation and net impairment losses on property, plant and equipment
and intangible assets also fell by €3.3 million to €4.8 million due to the interruption of the
depreciation and amortisation on the assets contributed.
184

Net provisions for risks and charges totalled €2.8 million - due entirely to litigation and
complaints - compared to €3.7 million in 2011 which included €2.1 million (non-recurring) for
risks related to accounting differences relating to the former legacy IT system.
As regards the balance sheet, direct funding reached €2.9 billion, rising again by
approximately €1 billion (+51.5%), as a result of the contribution of amounts due to customers
in the form of current accounts and deposits, which includes the above-mentioned high yield
products. On the other hand, debt securities issued, consisting of the two bond issues
repurchased in January 2013, fell by €4.1 million to €5.6 million.
The change in indirect funding was more modest, however: the item rose to over €3.2 billion
(+€83.1 million; +2.3%), driven by the assets under management component (+€108 million;
+23.5%).
Loans and advances to customers increased at the end of 2012 to €287 (+€41 million;
+16.7%), consisting of €202.6 million attributable to mortgages, €21.2 million to personal
loans and credit cards, €48.2 million to credit lines for margin trading and for temporary
overdrafts, while the remaining €15 million related to other transactions, mainly guarantee
margins with clearing houses relating to customer derivatives business.
The portfolio of available-for-sale financial assets, amounting to €783.4 million (+61.6 million
resulting from growth in the fair value of the securities), consisted mainly of Italian
government securities, including €778 million in floating rate certificates (CCT).
Capital ratios as at 31 st December 2012 consisted of a tier one ratio (tier 1 capital to risk
weighted assets) of 17.43% (13.02% at the end of 2011) and a total capital ratio (regulatory
capital and reserves to risk weighted assets) of 17.44% (13.01%).
The proposal for the allocation of profit is to allocate €11 million to retained earnings, after
allocating €0.6 million to the legal reserve.
During the year 2012 IW Bank earned numerous awards and accolades:
• first prize "Best Home Banking 2012" and first prize "Best Deposits 2012" according to the experts of the
"Osservatore Finanziario";
• second prize “IW Quick Trade” in the category “Trading App” and third prize “IW Loans” in the category
“Personal Loans” at the ’“MF Innovazione Awards 2012”;
• best on-line broker, "Assosim".
185

UBI LEASING SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change % change
Balance sheet
Loans and advances to customers 8,060,482 9,045,465 -984,983 -10.9%
Due to customers 315,882 387,638 -71,756 -18.5%
Net interbank debt -7,946,232 -9,532,793 -1,586,561 -16.6%
Financial assets available-for trading 66 60 6 10.0%
Available-for-sale financial assets 26 26 - -
Equity (excluding profit for the year) 298,603 329,046 -30,443 -9.3%
Total assets 8,655,300 10,382,757 -1,727,457 -16.6%
Income statement
Net interest income 90,360 96,439 (6,079) (6.3%)
Net fee and commission income (425) (1,879) (1,454) (77.4%)
Net income (loss) from trading, hedging and disposal/repurchase activities (3,583) 1,632 (5,215) n.s.
Other net operating income/(expense) (*) 12,236 31,514 (19,278) (61.2%)
Operating income 98,588 127,706 (29,118) (22.8%)
Staff costs (**) (17,519) (17,376) 143 0.8%
Other administrative expenses (24,523) (27,423) (2,900) (10.6%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (1,292) (995) 297 29.8%
Operating expenses (43,334) (45,794) (2,460) (5.4%)
Net operating income 55,254 81,912 (26,658) (32.5%)
Net impairment losses on loans (146,874) (111,556) 35,318 31.7%
Net provisions for risks and charges (***) (761) (2,497) (1,736) (69.5%)
Profit on the disposal of equity investments (****) 28 (1,962) 1,990 n.s.
Pre-tax loss from continuing operations (92,353) (34,103) 58,250 170.8%
Taxes on income for the year from continuing operations 22,543 3,952 18,591 470.4%
Loss for the year (69,810) (30,151) 39,659 131.5%
Other information
Total work force (actual employees+personnel on leasing contracts) 244 255 -11
Financial ratios
Cost:income ratio (operating expenses/operating income) 43.95% 35.86%
Net non-performing loans/net loans to customers 6.49% 4.52%
Net impaired loans/net loans to customers 6.06% 2.85%
(*) In 2011 the item included €3.3 million in costs relating to the termination of mandates conferred on UBI Leasing agents.
(**) The figure for 2012 includes leaving incentive costs of €0.5 million.
(***) In 2011 the item included €2.4 million in provisions relating to the termination of mandates conferred on UBI Leasing agents.
(****) In 2011 the item included goodwill impairment of €2 million.
Following the capital increase approved in December 2012, entirely subscribed by the Parent in January
2013 and recorded in the companies’ register in the following February, 99.55% of the share capital of UBI
Leasing is owned by UBI Banca and the remaining 0.45% by Banca Valsabbina ScpA.
The year 2012 saw a continuation of a particularly negative economic situation for the real
economy and a consequent lack of investments by companies, and was an even more difficult
year for the leasing sector than 2011.
According to data from Assilea (Italian Leasing Association), total leasing volumes stipulated in
Italy fell by €8.6 billion from €24.8 billion to €16.2 billion (a decrease of 34.7%).
In terms of segments, the overall decrease affected the property (down €3.4 billion, 48.9%),
energy (down €1.9, 46.4%), machinery and equipment (down €1.5 billion, 21.5%), auto (down
€1.4 billion, 23.6%) and aeronautical segments (down €0.4 billion, 50.8%).
Against this background, UBI Leasing was also affected by the effects of the ongoing
reorganisation of credit processes.
As the table shows, the company has effectively halved its operations in terms of both the
number of contracts taken out (from 4,999 to 2.145; down 57.1%) and the total value (down
€0.4 billion to €0.4 billion, a fall of 50.6%). As a result the market share fell 3.13% to 2.37%,
placing UBI Leasing thirteenth in the Assilea ranking (it was in tenth place at the end of 2011).
186

Performance by business sector
2012 2011 % change
Figures in thousands of euro number amount number amount number amount
Auto 941 31,924 2,901 109,671 -67.6% -70.9%
of which: - motor vehicles 556 16,657 1,685 52,731 -67.0% -68.4%
- commercial vehicles 253 6,218 732 17,117 -65.4% -63.7%
- industrial vehicles 132 9,049 484 39,823 -72.7% -77.3%
Machinery and equipment 1,049 147,805 1,639 169,521 -36.0% -12.8%
Aeronautical 8 14,944 54 17,081 -85.2% -12.5%
Property 126 167,529 335 339,370 -62.4% -50.6%
Energy 21 22,538 70 142,615 -70.0% -84.2%
Total 2,145 384,740 4,999 778,258 -57.1% -50.6%
The most significant steps which continued in 2012 taken to reduce credit risk include:
−
−
recovery of past-due loans by the company’s sales network, working in conjunction with the Problem
Loan Service. As well as recovery of the first instances of arrears, the objective of this activity was also
to assess clients’ actual economic and financial situation, and to introduce contractual adjustments
where necessary and appropriate, in order to help companies overcome temporary difficulties, and at
the same time safeguard UBI Leasing’s claims on loans;
the total closure of the agency network, through the gradual termination of the residual agency
mandates. At the same time assistance to the network banks was expanded in line with the new
distribution model, which came into effect on 1 st October 2011 and focuses exclusively on sales to the
Group’s captive clients.
Regarding the outcome of the Bank of Italy inspections which began in June and ended in October, and for
all the information regarding to capital increase approved in December, see the sections “Other information"
and “Scope of consolidation”.
As regards the balance sheet, UBI Leasing saw a reduction of approximately €1 billion in
loans, which fell to €8.1 billion (down 10.9%). Over 40% of the existing loans are in the
securitised portfolio as a result of the operations relating to Lombard Lease Finance 4 and UBI
Lease Finance 5.
The continued worsening of the global economic and financial situation, especially in the
property sector, continued to add to the stock of net deteriorated loans, which by the end of
the year had exceeded €1.2 billion (up 0.3 billion, or 33.3%). In detail:
• net non-performing loans rose from €409.1 million to €523.5 million (up €114.4 million, or
28%), and include the addition of two significant amounts totalling €35 million;
• net impaired loans rose to €488.8 million (up €231 million, or 89.9%), affected by additional
positions for €100 million resulting from the more rigorous updating from January 2012 of
the automatic reclassification of repayments past-due or in arrears as impaired loans;
• restructured loans fell to €16.2 million (down €64.7 million, or 80%);
• exposures past-due and in arrears increased to €221.7 million (up €31.9 million, or 16.8%),
partly the result of the change in the regulations from 1 st January 2012 which extended
mandatory classification in this category to include all payments in arrears by more than
90 days.
The rise in total deteriorated loans was accompanied by an increase in coverage, which rose
over the twelve month period from 20.47% to 23.15%. However, the level is still below the
Group average both because of the guaranteed nature of the loans (ownership of the leased
goods) and because of the predominance of property-related operations. Coverage for
performing loans rose from 0.63% to 0.82% due, amongst other things, to an increase in
impairment losses recognised in the fourth quarter.
As regards operations, there was a significant contraction in net operating income, which fell
to €55.3 million (down €26.6 million, or 32.5%), almost entirely due to the fall in operating
income to €98,6 million (down 29.1 million, or 22.8%), while expenses improved slightly at
€43.3 million (down €2.5 million, or 5.4%).
Revenues performed as follows:
187

−
−
interest income fell by €6.1 million to €90.4 million (down 6.3%), mainly due to a rise in the
cost of funding during the year and a fall in average loan volumes. However, the item
benefited from considerable savings in sales costs achieved as a result of the new strategy
of carrying out business exclusively via the Group’s network banks;
the fall in net income from financial activities consisting of a loss of €3.6 million (compared
with a €1.6 million profit in 2011) mainly reflects fair value changes in derivatives and the
items hedged;
− other operating income and expenses fell to €12.2 million (down €19.3 million, or 61.2%),
primarily due to a decrease in the profitability of the UBI Lease Finance 5 securitisation
transaction resulting from the use of the liquidity generated by the securitised portfolio for
redemption of part of the senior notes. At the end of 2011, expenses included €3.3 million
relating to the termination of mandates conferred on UBI Leasing agents.
Costs included:
− staff costs, including leaving incentive expenses of €0.5 million, remained more or less
stable at €17.5 million (up 0.8%). Net of the above non-recurring component the item fell,
due to the change in the average number of staff;
− other administrative costs fell €2.9 million to €24.5 million (down 10.6%), mainly due to
savings in the costs of credit recovery (down €0.8 million), professional consultancy costs
(down €0.6 million) and insurance on leased goods (down €0.6 million), despite the increase
in the cost of managing the IT platform (up €0.5 million).
Net impairment losses on loans rose to €146.9 million (up €35.3 million, or 31.7%) as a result
of the continued deterioration of the quality of the loans in the managed portfolio and the
increase in overall coverage mentioned above.
Net provisions for risks and charges – which in 2011 included provisions of €2.4 million for
the termination of agency mandates – fell to €0.8 million (down €1.7 million, or 69.5%) and
mainly related to legal disputes. Following the capital increase carried out in early 2013, the
tier one ratio and the total capital ratio increased respectively to 8.9% and 10.75%.
Losses from the disposal of investments and equity investments, which in 2011 related almost
entirely to the writedown of goodwill for €2 million, were reduced to zero.
Capital ratios as at 31 st December 2012 consisted of a tier one ratio (tier one capital to risk
weighted assets) of 3.82% (4.82% at the end of 2011) and a total capital ratio (regulatory
capital to risk-weighted assets) of 5.67% (6.66%).
The proposal to replenish the €69.8 million loss involves drawing fully on the share premium
reserve (€28.5 million), on the statutory reserve (€9.4 million), on the goodwill arising from the
merger (€27.3 million) and on the former provision for general financial risks (€1.8 million),
bringing forward a loss of €2.8 million.
188

UBI PRAMERICA SGR SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change % change
OWN "RETAIL CUSTOMERS" 6,861,893 6,782,454 79,439 1.2%
Of which: customer portfolio management 5,219,204 5,082,519 136,685 2.7%
Fund based instruments 1,642,689 1,699,935 -57,246 -3.4%
FUNDS 12,357,098 14,026,614 -1,669,516 -11.9%
of which: Pramerica funds included in fund based instruments 1,048,014 1,190,291 -142,277 -12.0%
Other duplications 90,022 110,961 -20,939 -18.9%
SICAV’s and other (net of duplications) 3,599,005 781,059 2,817,946 360.8%
TOTAL ASSETS UNDER MANAGEMENT 21,679,960 20,288,875 1,391,085 6.9%
Income statement
Net interest income 4,158 1,739 2,419 139.1%
Net fee and commission income 61,229 68,356 (7,127) (10.4%)
Performance fees 19,741 11,728 8,013 68.3%
Net income from trading, hedging and disposal/repurchase activity - 2,073 (2,073) (100.0%)
Other net operating income/(expense) 1,611 69 1,542 n.s.
Operating income 86,739 83,965 2,774 3.3%
Staff costs (14,556) (14,406) 150 1.0%
Other administrative expenses (13,105) (14,383) (1,278) (8.9%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (101) (124) (23) (18.5%)
Operating expenses (27,762) (28,913) (1,151) (4.0%)
Net operating income 58,977 55,052 3,925 7.1%
Net provisions for risks and charges (1,049) 20 (1,069) n.s.
Pre-tax profit from continuing operations 57,928 55,072 2,856 5.2%
Taxation for the year (18,405) (17,722) 683 3.9%
Profit from discontinued operations - 226 (226) (100.0%)
Profit for the year 39,523 37,576 1,947 5.2%
Other information
Total work force (actual employees+personnel on leasing contracts) 145 142 3
As at 31 st December 2012, UBI Banca held 65% of the share capital of UBI Pramerica SGR and the
remaining 35% was held by Prudential International Investments Corporation.
They year 2012 was again one of economic and financial pressures which inevitably influenced
trends for asset management business.
Despite the difficult economic situation, UBI Pramerica SGR confirmed its role as a lead player
at the national level, benefiting particularly from the results of six new UBI Sicav funds which
resulted in combined funding totalling approximately €2.9 billion. In detail, the range of
products offered during the year included:
• “UBI Sicav Cedola Certa 2013-2016” and “UBI Sicav Cedola Certa 2013-2017” with total net
inflows of €1.7 billion;
• “UBI Sicav Protezione & Crescita 2017” with €0.1 billion in net inflows;
• “UBI Sicav Cedola Mercati Emergenti” creating net inflows of €0.6 billion;
• “UBI Sicav Focus Italia” with net inflows of €0.3 billion;
• “UBI Sicav Global Dynamic Allocation”, placed between December 2012 and January 2013,
with total net inflows of €0.3 billion, €0.2 billion of which in 2012.
March 2012 also saw the liquidation of the three Italian registered speculative "Single Hedge"
funds: “UBI Pramerica Long/Short Euro”, “UBI Pramerica Beta Natural” and “UBI Pramerica
Managed Futures”. This decision was part of a wider strategic policy to disengage from the
business of directly managing products considered "alternative", which had already resulted in
the transfer of funds of hedge funds operations to Tages SGR in 2011.
UBI Pramerica SGR Spa again received important recognition in 2012:
− in the 2012 “Grands Prix – Fundclass” awards, in March UBI Pramerica SGR received the 2012
“European Funds Trophy-Fundclass” prize as the best management company in the category “16-25
funds”;
−
again in March, with regard to the 2011 “High Return Prize”, the “UBI Pramerica Obbligazioni Dollari”
fund was again recognised as the “Best American Bond Fund” as a result of its achievements over three
189

−
years, while UBI Pramerica Sgr was classified in third place as “The best Italian mutual fund manager
in the BIG category”, reserved for those companies having more than €4 thousand million in assets
under management;
in May, UBI Pramerica SGR was recognised by the business journal Milano Finanza as the company
with the “Highest number of Triple A Ratings”. The company received the "Triple A Italian Mutual Fund"
award for the results achieved by its mutual funds UBI Pramerica Portafoglio Moderato and UBI
Pramerica Portafoglio Prudente.
In March 2013, with regard to the 2012 High Return Awards, for the third consecutive year the "UBI
Pramerica Obbligazioni Dollari" fund was again recognized as the "Best American Bond Fund" while the
"UBI Pramerica Azioni Mercati Emergenti" fund was awarded first prize in the “Azionari Emerging”
category. Finally, UBI Pramerica again took third place in the "Best Italian Mutual Fund Manager in the BIG
category".
In terms of volumes, despite difficulties in the sector, total assets under management by UBI
Pramerica relating to ordinary customers amounted as at 31 st December 2012 to €21.7 billion,
an increase compared to 20.3 billion at the end of 2011. If the customer portfolios managed on
behalf of institutional customers are also considered, total assets under management by UBI
Pramerica at the end of 2012 amounted to €27.2 billion (net of duplications) compared to
€25.6 billion (again net of duplications) twelve months before.
With regard to the income statement, net operating income increased by €3.9 million to €59
million (+7.1%), the aggregate result of a rise in operating income to €86.7 million (+2.8
million; +3.3%) and the containment at the same time of expenses, which decreased to €27.7
million (-€1.2; -4%)
Within operating income:
− net interest income more than doubled to €4.2 million (+€2.4 million) due to a more
efficient allocation of cash and cash equivalents which benefited from favourable interest
rates;
− net fee and commission income, falling to €61.2 million (-€7.1 million; -10.4%), suffered
from the fall in asset management business resulting from the reduction in the average
assets managed in 2012, due also to the above-mentioned transfer of business operations
relating to funds of hedge funds that took place in 2011. On the other hand, performance
commissions rose significantly to €19.7 million (+€8 million; +68.3%).
With regard to expenses:
− staff costs rose slightly, to €14.6 million (+1%);
− other administrative expenses decreased by €1.3 million to €13,1 million (-8.9%), partly the
result of the above-mentioned transfer of operations. The most significant reductions
included the items "expenses for advertising, marketing and memberships"
(-€0.7 million) and "expenses for professional and consulting services" (-€0.6 million).
Net provisions for risks and charges, amounting to €1 million, include a prudential provision
made of €1.1 million against possible disputes regarding remuneration for services received in
previous years, concerning asset management business.
As a result of the performance reported above, 2012 ended with a profit of €39.5 million,
compared to €37.6 million earned in the previous year. The proposal for the allocation of profit
is to distribute the entire amount as dividends.
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UBI FACTOR SPA
Figures in thousands of euro
31.12.2012 31.12.2011 Change % change
Balance sheet
Loans and advances to customers 2,392,499 2,868,344 -475,845 -16.6%
Due to customers 1,553 5,161 -3,608 -69.9%
Net interbank debt -2,258,053 -2,732,941 -474,888 -17.4%
Equity (excluding profit for the year) 126,682 121,170 5,512 4.5%
Total assets 2,439,618 2,898,354 -458,736 -15.8%
Income statement
Net interest income 44,203 38,295 5,908 15.4%
Net fee and commission income 11,386 12,637 (1,251) (9.9%)
Other net operating income/(expense) 1,709 3,644 (1,935) (53.1%)
Operating income 57,298 54,576 2,722 5.0%
Staff costs (*) (12,722) (11,750) 972 8.3%
Other administrative expenses (9,313) (12,314) (3,001) (24.4%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (785) (823) (38) (4.6%)
Operating expenses (22,820) (24,887) (2,067) (8.3%)
Net operating income 34,478 29,689 4,789 16.1%
Net impairment losses on loans (**) (26,807) (14,813) 11,994 81.0%
Net provisions for risks and charges (505) (1) 504 n.s.
Profit on the disposal of equity investments 740 84 656 781.0%
Pre-tax profit from continuing operations 7,906 14,959 (7,053) (47.1%)
Taxation for the year (4,062) (6,395) (2,333) (36.5%)
Profit for the year 3,844 8,564 (4,720) (55.1%)
Other information
Total work force (actual employees+personnel on leasing contracts) 151 153 -2
Financial ratios
ROE [Profit for the year/equity (excluding profit for the year)] 3.03% 7.07%
Cost:income ratio (operating expenses/operating income) 39.83% 45.60%
Net non-performing loans/net loans to customers 3.30% 1.27%
Net impaired loans/net loans to customers 6.42% 0.16%
(*) The figure as at 31 st December 2012 includes leaving incentive expenses in the amount of €1.2 million.
(**) As at 31 st December 2011 the item included a provision of €9.5 million for a loan position relating to the Fondazione Centro San Raffaele del
Monte Tabor.
As at 31 st December 2012 the share capital of UBI Factor was wholly owned by UBI Banca.
UBI Factor, the UBI Group's principal factoring company, performs "captive factoring" activity,
mainly with customers of the network banks, representing nearly 80% of the counterparties.
The company has now ceased to accept any new business with clients selling public
administration invoices, for which only previously existing loans remain 4 . According to Assifact
(The Italian Factoring Association) data, in 2012 the Company was positioned in fourth place
nationally in the sector both in terms of advances with and without recourse, with a market
share of 5.26%, and in terms of outstanding amounts (receivables which have been
purchased, but not yet received), with a market share of 5.05%.
During 2012 the Company continued to focus its activities on captive counterparties
originating from the network banks of the Group, with particular attention paid to these
during this difficult period for the banking credit market 5 .
At the same time, the company has continued to increase its international presence through
factoring for export and import transactions with customers of high standing, good profitability
and normal credit risk. This growth was driven on the one hand by commercial initiatives
within the Factors Chain International network - a global network made up of the leading
factoring companies - in markets traditionally active for exports, such as Turkey, and, on the
other hand, by favourable results from the Polish branch in Krakow.
4 There are only isolated exceptions to this policy of complete disengagement, all of which feature cash flows in favour of UBI Factor of
modest amounts, and captive counterparties originated by the network banks, with receivables from public administrations with
good records of paying their debts.
5 The percentage of the UBI Factor's volume of business from network banks increased from 19% in 2008 to 42,2% in 2012.
191

With regard to equity investments, the liquidation of Siderfactor Spa was concluded with the redemption of
shares to shareholders, in accordance with a resolution passed by a shareholders meeting on 20 th
December 2012. UBI Factor therefore derecognised its investment, with a profit of €740 thousand,
recognised within the item "disposal of equity investments".
The year 2012 ended with a profit of €3.8 million, down by €4.7 compared to the previous
year, principally as a result of increased impairment losses recognised during the year.
Net operating income improved considerably, increasing by approximately €4.8 million to
€34.5 million 6 (+16.1%), benefiting from both the good performance of operating income, which
rose to €57.3 million (+€2.7 million; +5%) and by overall containment of expenses, down to
€22.8 million (- €2.1 million; -8,3%).
Revenues were boosted by the positive trend for net interest income, which increased to €44.2
million (+ €5.9 million; +15.4%), in relation to the financial component of the spread, in an
overall short-term context of increased efficiency in lending. The decline in net fee and
commission income, on the other hand, which fell to €11.4 million (- €1.2 million; -9.9%), was
due to the impact of increased fee and commission expenses paid to the network banks by the
Group for their activities on the Group's behalf for new business development.
On the expenses front, the rise in staff costs to €12.7 million (+ €1 million; +8.3%) is
attributable to expenses for leaving incentives amounting to €1.2 million, while the drop in
other administrative expenses to €9.3 million (- €3 million; -24.4%) is primarily due to the
significant reduction in legal costs, incurred in relation to the amounts owed by the health
department of the Regional Government of Latium. 7
The profitability of the company was affected by net impairment losses on loans, which rose by
approximately €12 million to €26.8 million (+81%), principally due to specific impairment
losses on deteriorated loans to the health department of the Regional Government of Latium.
As concerns volumes of business, the turnover for business generated during the year
amounted to €8.1 billion (-1.2%), including €7.4 billion of factoring business (-5.1%).
Consequently, loans and advances to customers amounted to €2.4 billion (5% of which was
from the Polish branch), falling by 16.6% compared to the €2.9 billion in the previous year,
but a recovery compared to the low recorded in September (€2.1 billion).
As a result of the difficult economic situation, net deteriorated assets rose from €63.6 to €289
million, an increase of €225.4 million year-on-year. In detail:
• non-performing loans rose from €36.5 million to €79.1 million (+€42.6 million), mainly due
to the reclassification from the impaired category in the third quarter of a large position
amounting to €43.9 million.
• impaired loans rose from €4.5 million to €153.6 million (+€149.1 million) due to the
transfer to this category of a particularly large position (€153 million) in the fourth quarter;
• exposures past due and/or in arrears, principally to public administrations, rose from
€22.6 million to €56.3 million (+€33.7 million), resulting from the new regulations that
came into effect on 1 st January 2012 requiring all accounts over 90 days past due to be
placed into this category. It is worth noting that the value of past due positions fell by over
15% in January 2013 .
Capital ratios as at 31 st December 2012 consisted of a tier one ratio (tier one capital to risk
weighted assets) of 8.79% (8.81% at the end of 2011) and a total capital ratio (regulatory
capital to risk weighted assets) of 8.76% (8.79%).
The proposal for the use of profits is to distribute dividends of €2.28 million.
6 The Polish branch generated gross operating income of €2.5 million (+€0.9 million compared to 2011).
7 The expenses are in relation to ongoing legal proceedings, which aim to obtain court rulings establishing the existence of the
assigned receivables, with a consequent court order for immediate payment of the amounts due by the debtor public administration.
192

Other information
Treasury shares
In 2012, the companies included in the consolidation did not hold any treasury shares nor
those of the Parent, with the sole exception of IW Bank which, as at 31 st December 2012, held
831,168 treasury shares, (corresponding to 1.13% of the share capital), unchanged compared
to twelve months before, for a nominal amount of €207,792 and a value at the purchase price
of approximately €2.6 million.
Litigation
As already reported in the 2011 Annual Report, on 11 th October 2011 Centrobanca was served
with a writ of summons from the Burani Designers Holding NV (“BDH”) Receivership (advised
by Prof. Avv. Bruno Inzitari) to appear before the Court of Milan. It claimed Centrobanca was
liable in relation to a public tender offer to purchase launched by Mariella Burani Family
Holding Spa on the shares of Marella Burani Fashion Group Spa (“MBFG”).
According to the writ of summons, the Burani family and the directors of BDH provided an inaccurate
representation of the accounts to non-controlling shareholders and markets and conceived of and promoted
the public tender offer to purchase with the sole purpose of artificially inflating the price of the MBFG share,
in order to delay the bankruptcy of the Burani Group. In this context, Centrobanca is considered responsible
for the abusive grant of loans to support the aforementioned operation, thereby generating, as a
consequence, false confidence in the capital and financial solidity of the Burani Group on the part of
creditors and the market.
The damages claimed against Centrobanca in the writ of summons amount to approximately €134 million.
Centrobanca – which has already been duly accepted as a creditor in all the bankruptcy
proceedings concerning the Burani Group – considers that this claim made through the courts
is without foundation and has applied to the court arguing both on points of law and merit to
defend against the Receiver’s claim and in support of the complete rightfulness of its conduct.
Furthermore, because the evidence used by the Receivership to support its demands applied
in part also to Mediobanca Spa and Equita SIM Spa, Centrobanca decided to extend the
proceedings to include these two companies.
The first hearing, originally scheduled for February 2012, was postponed until 19 th June and
then again until 29 th January 2013. At that hearing the judge decided to postpone the case
until 6 th May 2013 to allow it to be joined to the second proceedings brought by the Mariella
Burani Family Holding Receivership.
On 1 st March 2012, Centrobanca was in fact served with a writ of summons from the Mariella
Burani Family Holding Receivership (advised by the lawyers Stefano Ambrosini and Barbara
Rovati), containing a claim for compensation, again in this case too, amounting to
approximately €134 million, based on arguments of fact and law similar to those already
served in the summons served by the BDH Receiver. As a consequence these proceedings were
also extended to include Mediobanca Spa and Equita SIM Spa and the next hearing is set for
30 th April 2013.
Centrobanca is defended by the same team employed in the previous case (Prof. Avv. Antonio
Astolfi and Piero Schlesinger).
As already reported, the total gross exposure of the UBI Banca Group to the Burani Group
amounts to €74.2 million, on which impairment losses of 95.74%. have been recognised.
193

ANTI MONEY-LAUNDERING NOTIFICATIONS
In 2012 the Guardia di Finanza (Finance Police) served five “Written notifications of findings”
on the UBI Banca Group for failure to report suspect transactions in accordance with “Anti
Money-Laundering” law relating to three customers for a total of €5 million. The relative
defence documents were filed with the Ministry of the Economy and Finance within the set
time limits.
Furthermore, with regard to those notifications, the Ministry of the Economy and Finance
imposed two fines for failure to report suspect transactions on employees of a bank belonging
to the Group for a total €426 thousand. The repeals filed with the ordinary court have been
accepted.
Inspections
The Bank of Italy conducted inspections into the Group in the period between 15 th December
2011 and 16 th March 2012, in accordance with articles 54 and 68 of Legislative Decree No.
385/1993 (Consolidated Banking Act), designed to assess the adequacy of initiatives taken
following the findings of the September 2010 inspections concerning liquidity risks and also in
view of the particular situation on markets.
On 14 th May 2012, the Supervisory Body communicated its “Remarks and observations”
concerning the inspections and on 13 th June UBI Banca furnished precise replies to the single
remarks and observations contained in the inspection report.
With a communication of 15 th June 2012, the Bank of Italy launched new inspections (again
in accordance with articles 54 and 68 of the Consolidated Banking Act already mentioned),
designed to assess a series of questions in relation to the capital levels set in the EBA exercise
consisting of: the results of the initiatives contained in the capital plan; the performance of the
income statement and of risk weighted assets; methods and practices employed to set loan
provision levels. The inspections were concluded on 24 th August 2012.
On 14 th November 2012 Supervisory Body communicated its “Remarks and observations” on
the inspections. On the following 19 th December 2012, UBI Banca furnished precise replies to
the observations formulated in the inspection report
On 8 th October 2012, the Bank of Italy FIO 1 officially launched inspections into UBI Banca on
the reporting of suspect transactions (article 47, paragraph 1 of Legislative Decree No. 231 of
21 st November 2007). The inspections were into the organisation of the anti money-laundering
functions and certain products: credit cards, prepaid cards and porn credit.
On site inspections began on 9 th October and were completed on 22 nd November 2012. On
that date no communications were received concerning shortcomings or irregularities
regarding the overall system of internal controls. However a note was delivered requesting
further details from the “Group Delegate” on operational aspects and an assessment of the
procedures for processing powers of attorney for the release of objects deposited on a porn
basis. On 20 th December the results of those further investigations and assessments were
provided. Subsequently, further requests were received, the last of which was satisfied on 28 th
January 2013.
With a letter of 11 th February 2013, the Bank of Italy communicated that “the inspections are
to be considered completed on 28 th January 2013”, with no mention, to-date, of irregularities
and/or shortcomings.
Furthermore, the Bank of Italy carried out an inspection on the Sanremo branch of Banca
Regionale Europea from 3 rd until 7 th December 2012 into the adequacy of the organisational
structure and procedures and compliance with anti money-laundering activity concerning the
proceeds of criminal activities and the finance of terrorism (article 53 of Legislative Decree No
231/2007). No communications have been received from the supervisory authority as a result
of the latter inspection.
1 The Financial Information Office formed at the Bank of Italy on 1 st January 2008 in accordance with Legislative Decree No.
231/2007.
194

On 6 th November 2012, the Bank of Italy communicated that it was commencing inspections
into the subsidiary UBI Factor pursuant to article 108 of Legislative Decree No. 385/1993.
These were completed 6 th February 2013. On the date of this financial report, the inspection
report had not yet been delivered.
As part of action taken at national level, which involved the main Italian banking groups, on
9 th November 2012, the Bank of Italy launched inspections into the UBI Banca Group in
accordance with articles 54 and 68 of Legislative Decree No. 385/1993 in order to assess the
adequacy of impairment losses recognised on non-performing, impaired and restructured
loans, and the relative policies and practices to implement them.
The inspection, which should be completed a few days following the date of this report,
involved the Parent and the network banks, because the product companies that operate in
the non-banking financial sector (UBI Factor and UBI Leasing) were subject to specific
inspections in the second half of 2012.
The inspection, which took place in an economic context which led to a consolidated loss loan
of 91 basis points, nevertheless confirmed that the UBI Banca Group is one of the best in
terms of asset quality.
UBI LEASING
On 21 st June 2012 the Bank of Italy announced the launch of inspections into UBI Leasing in
accordance with article 108 of Legislative Decree No. 385/1993. The inspections were
concluded on 17 th October 2012.
The inspection report was delivered on 11 th January 2013, containing remarks and
observations on the basis of which penalty procedures were commenced against officers of UBI
Leasing (Board of Directors, Board of Statutory Auditors and General Manager at the time,
with the exclusion of board members appointed during the course of 2012).
The subsidiary and UBI Banca furnished precise replies and defences to the single remarks
and observations contained in the inspection report, giving details of action implemented and
scheduled to remedy the criticisms made.
FINES
On 20 th August 2012, the Bank of Italy notified UBI Banca, as the company into which B@nca
24-7 had been merged, and officers of B@nca 24-7 (members of the Board of Directors, the
Board of Statutory Auditors and the General Management at that time) of a provision
concerning the imposition, pursuant to article 145 of Legislative Decree No. 385/1993, of
administrative fines for a total of €63 thousand in relation to shortcomings found in the
organisation and internal controls of that bank.
The provision was issued following the inspections conducted between 31 st January and 30 th
June 2011, on the basis of the inspection report presented on 23 rd September 2011. That
report officially alleged that those officers of B@nca 24-7 were responsible for various
irregularities and initiated the relative disciplinary procedures, to which that bank had replied
with a letter of 21 st October 2011 to the Supervisory Authority containing its defence.
In accordance with Art. 145 of the Consolidated Banking Act, the Parent, as the survivor of the
merger with B@nca 24-7, was civilly liable to make the payment within thirty days of receipt of
the notice, with the obligation to recover the amounts from those responsible.
195

Antitrust Authority provisions
On 11 th July 2012, the Autorità Garante della Concorrenza e del Mercato (AGCM - Antitrust
Authority) issued a penalty provision concerning UBI Banca for improper commercial practices
pursuant to article 20, paragraphs 2 and 22 of the Consumer Code in relation to the
advertising campaign “3% Sposaci per interesse e poi ti innamorerai di noi” (Marry us out of 3%
interest and then you will fall in love with us), conducted between May and June 2011 by
means of radio commercials and advertising on websites, including Facebook, Google and
Yahoo.
Following a request for information issued to UBI Banca on 27 th May 2011, the Authority
acquired all the advertising messages broadcast as part of that campaign.
UBI Banca was informed on 13 th February 2012 of the launch of investigation No. PS7380 for
possible violation of articles 20, paragraphs 2, 21 and 22 of the Consumer Code.
On 1 st March the Bank exercised its right to be given access to the files relating to the
provision and on the following 12 th March, it issued a defence and a reply to the request for
information issued in the notice which launched the provision.
Since the advertising matter addressed by the provision was broadcast via radio and on the
internet, on 18 th May 2012 an opinion was requested from the Antitrust Authority pursuant to
article 27, paragraph 6 of the Consumer Code.
With an opinion received on 12 th June, that Authority held that the advertising practices in
question were improper within the meaning of the above mentioned articles of the Consumer
Code, because they were contrary to professional diligence and were designed to appreciably
distort the financial behaviour of the average consumer in relation to the service provided.
At the same time, the Antitrust Authority held that the arguments put forward by UBI Banca,
which were based on the briefness of the advertising messages contested, which invited
consumers to read the information sheets available in branches and on the website, and also
on the absence of complaints received by the Bank about the campaign, were inadequate.
The administrative fine imposed of €100 thousand was paid within the time limit of thirty days
following notification of the provision.
On 14 th November 2012, IW Bank was notified of the start of an investigation by the Antitrust
Authority into the timing of the closure of current accounts, pursuant to article 27, paragraph
3 of Legislative Decree of 6 th September 2006 and subsequent amendments (the Consumer
Code).
This bank submitted a “commitments” proposal to the assessments of the Authority pursuant
to article 27, paragraph 7 of the Consumer Code with a view to refining procedures and raising
the level of transparency. The investigation is still in progress and due to end on 6 th May 2013.
Tax aspects
Summary of changes introduced during the year
Provisions were issued in 2012, which involved the financial sector. It must be underlined,
that apart from those measures which have a direct impact on banks as taxpayers, many
provisions continue to subject banks to obligations - such as responsibility for levying
withholding taxes or carrying out checks and monitoring activities – and require them to fulfil
roles to assist government with serious repercussions on operations and organisation. They
necessarily affect relations with customers and their nature involves significant work for
compliance, which also translates into operating expense. This constitutes what might be
called an indirect tax expense which government intends to remove by means of tax
“simplification”.
A summary of the contents of the provisions introduced during the year is given below.
196

THE DECRETO “SEMPLIFICAZIONI” (“SIMPLIFICATIONS” DECREE) – DECREE LAW NO. 16/2012
(CONVERTED INTO LAW NO 44/2012)
• IRAP (local production tax): from 2012 the IRAP relating to the cost of labour (net of the
relative deductions) is considered a tax that is fully deductible for corporate income tax –
IRES – purposes, while the 10% lump sum deduction on interest expense remains for
IRAP, where that expense is wholly or partially non-deductible. The law applies
retroactively to the years 2007-2011 for which the Company has filed a special refund
within the time limits and in accordance with the procedures established by the relative
provision issued by the tax authorities on 17 th December 2012. The tax credit is recognised
in the consolidated balance sheet as at 31 st December 2012 within the item “tax assets”
and amounts to approximately €66.1 million;
• stamp duty on financial products: from 1 st January 2012 a stamp duty of 0.1% (0.15%
from 2013) has been extended to apply to all periodic communications to customers
concerning financial products, including those not subject to a deposit obligation, and they
include bank deposits and postal deposits, even if evidenced by certificates. The long
delayed official interpretations from the financial administration were not issued until last
December. They resolved some doubts and furnished a clearer interpretation for the
intermediaries required to apply the tax (see below). However, because the new tax
measure applies from 1 st January 2012, the charges already applied to customers during
the year must be recalculated.
THE DECRETO “SVILUPPO” (“GROWTH” DECREE) – DECREE LAW NO. 83/2012 (CONVERTED INTO LAW
NO 134/2012)
This decree introduces important changes not only with regard to tax:
• VAT tax regime for the lease and sale of properties: from 26 th June 2012 the normal regime
for the lease of properties is the VAT exemption regime, regardless of the nature of the user
and landlords may opt to be subject to VAT, clearly on the basis of their overall position for
VAT purposes. That exemption regime also regards in particular the lease of properties
used in operations, defined in cadastral terms.
As far as the Group is concerned, this regime has already been applied where appropriate
for contracts in existence as at 26 th June 2012 and the Group has also been able to benefit
from exemptions granted by landlords.
A similar exemption regime (unless the seller opts to make it subject to tax) also applies
from 26 th June 2012 to the sale of residential and non-residential/operating properties
performed by companies other than construction companies;
• financing instruments for unlisted companies: measures have been introduced to increase
the opportunities for unlisted companies to issue financial instruments, even in
uncertificated centralised form, for the direct issue on the domestic and international
market of short-term debt instruments in the form of financial bills and of medium to longterm
instruments in the form of bonds for placement and circulation exclusively with
qualified investors. These issuances must be endorsed by a “sponsor” consisting of banks,
asset management companies and so forth, which are subject to obligations concerning
capital and guarantees for the securities.
From a strictly tax viewpoint, the legislation places the financial bills under a tax regime
similar to that for bonds and it therefore extends the substitute tax regime pursuant to
Legislative Decree No 239/1996, reserved to-date to bonds issued by banks and listed
companies (“major issuers”), to include bonds and similar securities traded on regulated
markets or on multilateral trading facilities and issued by unlisted companies.
As already reported, the tax regime under Legislative Decree No. 239/1996 allows foreign
investors to benefit from the immediate exemption from all withholding taxes on capital
earnings;
• amendment of the Bankruptcy Act to help companies to continue to operate: the purpose
of the amendments introduced is to improve the efficiency of creditor settlement
procedures for crisis-hit companies. Changes were also made in this direction on the tax
deductibility regime for losses on loans (Art. 101, paragraph 5 of the Consolidated Income
Tax Act) with deductions allowed for: (i) losses resulting from loan restructuring
agreements pursuant to article 182-bis of the Bankruptcy Act in addition to the usual
creditor settlement procedures; (ii) losses on statute barred loans and on loans of modest
197

amounts if six months have passed since the due date. For IAS adopters, the certainty and
precision requirements for deduction are also met when loans are derecognised in the
balance sheet, regardless of events to extinguish the debt.
No ministerial interpretations of this legislation have been furnished to-date, above all with
regard to the tax period in which a company may make deductions with respect to the
start of creditor settlement procedures and to the correct interpretation of “events to
extinguish the debt”.
It is in fact precisely on these aspects that a large proportion of existing tax litigation cases
turn.
THE LEGGE DI STABILITÀ (“STABILITY” OR ANNUAL FINANCE ACT) FOR 2013
• VAT: the planned increase in the ordinary VAT rate from 1 st July 2013 from 21% to 22%,
unless the cuts to welfare spending are able to reduce the deficit, is of particular interest to
the Group. Also, individual portfolio management services and the relative brokering
services will be subject to VAT from 1 st January 2013 following a ruling by the EU Court of
Justice;
• tax on financial transactions: a tax on financial transactions is being introduced from 2013
(known as the “Tobin Tax”), which will be levied on transfers of shares and/or equity
instruments and on transactions involving derivative instruments and “high frequency”
trades provided that both relate to shares and/or equity instruments, even if
predominantly and not exclusively.
The tax, set at 0.2% (0.22% for 2013 only) and reduced by 50% if the trade takes place on
regulated markets, applies from 1 st March 2013 and it is levied on the buyer only. The tax
on derivatives is calculated on the basis of the value and the type of contract, as specified
in the table attached to the Decree, and it is levied on both parties to the trade from 1 st
July 2013.
Finally, the tax on “high frequency”, trades set at 0.02%, is levied on the amount cancelled
or modified for certain financial trades in a given period, to be quantified by a Decree to be
issued on 21 st February 2013. The tax enters into force from 1 st March or from 1 st July
depending on the type of transaction as described above.
The measure contains a wide range of exemptions, above all for market makers, and in any
case does on cover bond or similar instruments. Instructions and practical instructions are
naturally expected from the tax authorities given the highly technical nature and large
variety of the financial instruments involved. This will again have strong impacts on
organisation, IT systems and customer relationships;
• deductibility of intangible asset realignments: the deductibility of amortisation on
intangible assets arising from controlling interests, realigned on an optional basis in
accordance with Decree Law No. 98/2011 converted into Law No. 111/2011 as added to
and amended by article 20 of Decree Law No 201/2011 (converted into Law No.
214/2011), has been postponed for five years from 2013 until 2018. The Group made use
of this provision in 2011 and 2012 obtaining tax relief on amounts totalling approximately
€3.5 billion and it would have deducted €348 million per year, which has now been
postponed until 2018.
FATCA LAW
A law enacted on 18 th March 2010 by the USA Senate introduced Chapter 4 of the Federal
Internal Revenue Code (referred to as the Foreign Account Tax Compliance Act – FATCA). The
legislation was last added to by the “final regulations” of the USA Treasury Department and
the USA Internal Revenue Service on 17 th January 2013 and should be finally completed with
a special intergovernment agreement between the United States and Italian governments.
This legislation, which comes into force from 1 st January 2014, is designed to prevent evasion
of United States taxes by USA citizens by strengthening customer identification and
documentation obligations – USA and other – and with a requirement for a declaration to the
USA tax authorities by non-USA intermediaries.
The UBI Banca Group is currently carrying out activities to implement the regulations in
question, in order to acquire FATCA compliant status.
198

LAW TO REVISE THE TAX SYSTEM
Notwithstanding the efforts made by all forces in the economy, the bill to introduce new
criteria for the interpretation and application of important issues that regard all companies –
e.g. abuse of law, the management of tax risks in large companies, the penalty system, the
deductibility of costs (losses on loans, depreciation and amortisation, relations with foreign
parties, etc.), the doubling of the time limits for assessment, a Group VAT number – was not
passed by Parliament within the set time limit. Therefore various matters subject to litigation
remain open, because further litigation cannot be excluded on these matters since the desired
new law was not enacted.
The following documents are of particular importance with regard to interpretation:
***
Tax Authority Circular No. 11/E of 28 th March 2012
This circular – with effect retroactively from 1 st January 2012 – provides practical clarifications
on the application of the tax reform concerning financial assets introduced by Decree Law No.
138/2011 converted into Law No. 148/2012. Basically this is a realignment of the
withholding tax on financial income to 20%.
The document confirmed most of the practices and interpretations that the Group had
proposed and nevertheless required significant efforts to advise customers, especially on the
transition aspects and date of entry into force of the new legislation.
Tax Authority Circular No. 29/E of 5 th July 2012
As the deadline approached – 16 th July – for the payment of the special stamp duty on
segregated assets introduced by the Decreto Salva Italia (the “Save Italy” decree – Decree Law
No. 201/2011), the circular provided the necessary operational details needed by
intermediaries responsible for collecting and paying the tax. As already reported, where
customers do not make the amount due available, the name of the customer will be reported
to the tax authorities.
Tax Authority Circular No. 37/of 28 th September 2012
With the approach of the deadline for filing income tax returns for the tax year 2011, the tax
authorities published the expected circular to explain the procedures for transforming deferred
tax assets recognised into tax credits, in relation to write-downs of loans and receivables not
deducted pursuant to article 106, paragraph 3 of the Consolidated Income Tax Act and also to
the value of goodwill and other intangible assets where tax realignments apply. This occurs for
losses recognised in the statutory accounts and also for tax losses attributable to the
aforementioned items (article 2, paragraphs 55 to 58 of Decree Law No. 225/2010.
The circular confirms the tax-concession nature of the provision and the compulsory
application for banks because of the intention behind it to strengthen regulatory capital. With
account taken of the contents of the Bank of Italy/Consob/Isvap Document No. 5 of 15 th May
2012, the amount of deferred tax assets transformed into tax credits against the loss incurred
by UBI Banca for the year ended 31 st December 2011 was €268,550,575, details of which are
given in the Notes to the Consolidated Financial Statements, Part B, Section 14 of Balance
Sheet Assets.
The Bank of Italy recently made a pronouncement on the matter – Protocol dated 21 st
December 2012 – with regard to the Italian Banking Association and conversely indirectly to
the tax authorities, concerning whether the provision applies to possible deferred tax assets on
IRAP (local production tax). That pronouncement affirmed the qualification of deferred tax
assets on IRAP for inclusion in regulatory capital according the Basel 2, while this will not be
permitted under the different rules for Basel 3. This announcement will have no impacts for
the UBI Group because it has no deferred tax assets for IRAP purposes of the type which
would trigger the transformation.
Tax Authority Circular No. 48/E of 21 st December 2012
This circular does not affect corporate income tax directly, but compliance activities which
banks and financial companies are obliged to carry out to apply stamp duties on bank
statements and reports sent to their customers from 1 st January 2012, as already mentioned
previously.
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Substantial organisational and administrative changes have arisen with retroactive effect
regarding customer relationships, in terms of recalculating the duty from time to time in the
absence of proper instructions. Particular repercussions resulted from holding foreign assets
under custody or insurance policies for which the number of cases in which the intermediary
must apply a withholding tax increased.
Tax litigation
Like other large companies, the UBI Group is subject to constant tax inspections by the
competent regional departments of the tax authorities, as part of the tax “tutelage” carried out
on “large taxpayers”.
The following events occurred in 2012 and until the date of this report.
A) TAX INSPECTIONS – TAX ASSESSMENT REPORTS
• Banco di Brescia: on 12 th April 2012, the Large Taxpayers Office of the Regional Department for
Lombardy of the tax authorities undertook a general tax inspection for IRES (corporate income tax),
IRAP (local production tax), VAT and withholding tax purposes for the year 2009, subsequently
extended to include the years 2008 and 2010, but limited to transactions to strengthen regulatory
capital through the issue of preference shares. On conclusion of the inspection, on 30 th November
2012 a tax assessment report was issued alleging solely violation of article 26, paragraph 5, of
Presidential Decree No. 600/1973 (failure to apply the relevant 12.5% withholding tax) in relation to
the interest paid by Banco di Brescia to the Delaware-registered Banca Lombarda Preferred Capital
Company LLC through its Luxembourg branch for the years 2008 (€1.5 million of unpaid withholding
taxes), 2009 (€1.5 million) and 2010 (€2.1 million) for a total of €5.3 million.
Given that litigation concerning analogous claims for the years from 2004 to 2007 – about which more
later – is pending before the relevant Tax Commissions, it was decided that it would be best to await
subsequent service of the notices of tax assessment in order to then mount a challenge at that stage.
• Banca Carime: on 5 th June 2012, the Tax Control Office of the Regional Department for Calabria of
the tax authorities undertook a tax inspection, relating to the years 2008, 2009 and 2010 for IRES
and IRAP purposes, with specific regard to certain items of income. On conclusion of the inspection,
on 6 th December 2012 a tax assessment report was issued alleging that loan losses had been
improperly deducted for IRES purposes on the basis that for some of the files examined the relevant
tax requisites of certainty and precision had not been fulfilled. Consequently, the tax authorities
assessed higher IRES of €216 thousand for the year 2008, €18 thousand for the year 2009 and €89
thousand for the year 2010 for a total of €323 thousand.
The Bank felt that it was best to accept the tax assessment report – also bearing in mind the
interpretative uncertainty surrounding the unclear rules governing the deduction of loan losses for
tax purposes – which meant that it became liable for the above mentioned amount plus interest and
penalties reduced to the one sixth minimum. On 21 st December 2012 the Bank paid a total of €410
thousand in respect of the three years concerned.
• Banca Popolare di Ancona: on 8 th October 2012, the Tax Control Office of the Regional Department for
the Marches of the tax authorities sent this bank a questionnaire designed to obtain accounting and
tax documentation relating to certain transactions carried out in the 2009 financial year. That request
forms part of tax “tutelage” activity.
• Banca Popolare Commercio e Industria: on 30 th July 2012 the Large Taxpayers Office of the Regional
Department for Lombardy of the tax authorities issued a tax assessment report upon the conclusion
of a tax inspection for VAT purposes (for the 2007 and 2008 financial years limited to activities
carried out as a depositary bank) and for IRES, IRAP and VAT purposes (for the 2009 financial year)
that had commenced on 4 th April. That tax assessment report raised the following matters:
- VAT years 2007-2009: failure to subject payments received for depository banking activity relating
to mutual investment funds to VAT (greater VAT totalling €2.9 million, relating to three years).
That matter is similar to another already assessed for 2006;
- IRES year 2009: improper deduction of losses on loans relating to debtors subject to bankruptcy
proceedings (taxable income €1.4 million), because not relating to the same accounting period;
- IRES year 2009: improper deduction of costs for limited amounts held not to be legitimate
business expenses.
In response to that tax assessment report, on 28 th September 2012 the bank filed its observations
pursuant to article 12 of the Taxpayers’ Charter (Law No. 212/2000), contesting the grounds for all
the matters raised.
• UBI Banca: the general tax inspection for IRES, IRAP and VAT purposes for the year 2008 – extended
to include the years 2007, 2009, 2010 and 2011 – started by the Bergamo tax unit of the Guardia di
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Finanza (finance police) in 2011 ended with the issue on 24 th May 2012 of a tax assessment report.
That tax assessment report raised no matters concerning the above taxes, while the only question it
did raise was the failure by UBI Banca to apply a withholding tax on interest on deposits (article 26,
paragraph 2, of Presidential Decree No. 600/1973), with regard to interest paid to subsidiaries located
in Delaware (USA) in relation to the issuance of instruments used to strengthen regulatory capital
(preference shares), classified by the inspectors as resident for tax purposes in Italy. The withholding
tax in question totalled €55.2 million (for the years from 2007 to 2011). That tax assessment report
was subsequently shelved by the relevant Regional Department of the tax authorities. However, that
same Department did confirm its intention to charge UBI Banca with violation of its withholding tax
obligations under article 26, paragraph 5 of Presidential Decree No. 600/1973 – financing by foreign
entities.
• Subsidiary issuers of preference shares: as a direct consequence of the tax assessment report issued
to UBI Banca (see above), on 7 th June 2012 that same Bergamo tax unit of the Guardia di Finanza
issued three tax assessment reports to Banca Lombarda Preferred Capital Company LLC, Banca
Popolare di Bergamo Funding LLC and Banca Popolare Commercio e Industria Funding LLC,
reclassified as entities resident for tax purposes in Italy, owners of the interest paid on deposits by
UBI Banca. The notices of tax assessment subsequently issued by the Bergamo tax authorities were
cancelled internally by them.
• Banca Regionale Europea: on 20 th December 2011, on conclusion of inspections relating to 2008, the
Regional Department of Piedmont of the tax authorities sent the relative tax assessment report in
which the tax deduction of losses was alleged for the disposal without recourse of the loans to a
customer in difficulty in 2008 by the bank, together with other banks and finance company creditors
in a broader context of the restructuring of the customer’s debt. More specifically, the inspectors
alleged the absence of the assumptions of certainty and finality of the disposal because of the
existence of guarantees granted to the creditors recognised by the purchaser. As a consequence, the
bank was considered to have greater taxable income for IRES and IRAP purposes of €2.8 million,
which gave rise to increased taxes for IRES and IRAP totalling approximately €916 thousand, in
addition to fines – estimated at between €152 thousand and €305 thousand – plus interest.
The inspectors evidently did not consider the principle known as “reinforced derivation”, which the
bank employs as an entity subject to IFRS where, as in the case in question, the requirements are
met for the derecognition of the loans in question.
In connection with the said tax assessment report, in October 2012 the Provincial Department for
Turin of the tax authorities requested the Bank (and likewise other companies in the Group – Banca
Popolare di Bergamo and UBI Leasing – parties to the above mentioned transaction) for specific
documentation and explanations for the execution abroad of some of the documents pertaining to the
debt restructuring operation in question.
• SILF: in its tax assessment report of 19 th February 2010 the Regional Department for Piedmont of the
tax authorities disputed the deductibility of some costs (especially those linked to fees paid to
financial advisors) and loan losses for the 2008 financial year as well as the quantification of the
recognition of impairment losses on loans for that year. After having filed observations as permitted
by the Taxpayers’ Charter (Law No. 212/2000), on 10 th November 2011 an offer to accept the findings
of the tax assessment report was made following which on 22 nd November 2012 the relevant tax
assessment by consent documents were signed. On 30 th November 2012 a total of €0.486 million was
paid to settle the matter.
• Banca Popolare di Bergamo: on 16 th January 2013 the Large Taxpayers Office of the Regional
Department for Lombardy of the tax authorities commenced a tax inspection, (i) general for the year
2010 in relation to IRES, IRAP, VAT and being a withholding tax agent, (ii) targeted for the years 2008
and 2009 in relation to being a depository bank for mutual funds, about which more later, and (iii)
targeted for the 2008 transfer of the Munich branch to UBI Banca International SA.
• UBI Pramerica SGR: on 7 th February 2013 the Milan tax unit of the Guardia of Finanza (finance police),
commenced a tax inspection, still in progress, in relation to corporate income tax for the years 2010 and
2011;
• Banca Regionale Europea: on 5 th March 2013 the Large Taxpayers Office of the Regional Department
for Piedmont of the tax authorities commenced a general tax inspection for 2010.
B) NOTICES OF TAX ASSESSMENT
It should be noted that for IRES, IRAP and VAT tax inspections for 2007 onwards, a notice of
assessment replaces and now incorporates what was once a separate demand for payment
(termed an ‘enforceable notice’ under Law Decree No. 78/2010). Accordingly, even in the case
of an appeal, a provisional amount must still be paid by the statutory deadline for filing the
appeal. This is particularly important bearing in mind also the Bank of Italy notice of 7 th
August 2012 on “Financial Statements and Supervisory Reporting”.
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Banco di Brescia: on 18 th July 2012 the Large Taxpayers Office of the Regional Department for
Lombardy of the tax authorities served a notice of assessment and the imposition of fines for 2007,
with which it alleged the failure to apply a 12.5% withholding tax (pursuant to article 26, paragraph
5, of Presidential Decree No. 600/1973) by Banco di Brescia on interest paid on the subordinated
deposit made by Banca Lombarda Preferred Capital Company LLC. This assessment followed on from
similar assessments already served for the years from 2004 to 2006. The Bank has appealed to the
relevant Tax Commission by the statutory deadline and is awaiting the setting of a date for a hearing
in the matter. In the meantime a provisional sum of €0.611 million has been paid.
Banca Popolare Commercio e Industria and Banca Popolare di Bergamo: the tax authorities – the
Large Taxpayers Office of the Regional Department for Lombardy – served a notice of assessment on
BPCI on 24 th October 2011 and 11 th December 2012 and on BPB on 6 th December 2011 and 25 th July
2012, which challenged them over the treatment applied for VAT purposes to revenues received in the
years 2006 and 2007 for activity performed as a depository bank for mutual investment funds.
In particular the tax authorities are seeking €2.3 million in unpaid taxes and €5.3 million in penalties
from Banca Popolare Commercio e Industria and €4.4 million in unpaid taxes and €11.7 million in
penalties from Banca Popolare di Bergamo.
This issue is a common one in the banking sector and it arises over the interpretation at national level
of EU Directive 77/388/EEC of 17 th May 1977. The banking sector believes that the consideration for
that activity is exempt from VAT (Italian Banking Association Circular, Tax Series No. 25 of 28 th
December 2010 and Assogestioni – national association of asset management companies – Circular
No. 138 of 10 th December 2010) while the tax authorities consider it subject to VAT in full.
On 21 st November 2012 the Provincial Tax Commission of Milan partially rejected the appeal filed by
Banca Popolare Commercio e Industria relating to 2006, ruling, on the one hand, that no penalties
and interest were payable given the objective uncertainty surrounding the rule and, on the other
hand, that the tax itself was payable, in this regard strictly following the European Court of Justice’s
judgment in Case C-169/04 (“Abbey National”) cited by the tax authorities at the time of issuing the
assessment. The Bank will appeal that decision by the statutory deadline therefor.
A similar appeal filed by Banca Popolare di Bergamo in relation to 2006 was heard on 5 th December
2012 and the decision in that case is awaited.
In relation to 2007, at the hearings a motion to adjourn the matter will be submitted considering that
talks are currently being held between the relevant trade associations and the tax authorities with a
view to agreeing that a portion and not all of the entire fees received as a depository bank will be
subject to VAT on the assumption that it is a complex service only part of which concerns custody
and verification, the elements that the tax authorities deemed liable to VAT.
It should also be considered that pursuant to the last paragraph of article 60 of Presidential Decree
No. 633/1972, banks are entitled to recoup from client asset management companies the tax payable
following a tax inspection such that banks remain liable solely for the penalties. This is the Group’s
thinking too.
While awaiting judgment BPCI has paid a provisional amount of €0.4 million (2006) and BPB €0.6
million.
With regard to the litigation in question, in the light, amongst other things, of expert opinions, the
risk of losing is considered unlikely and more specifically it is maintained that the legal basis of the
appeal will be recognised in the courts without prejudice to the outcome of the trade association/tax
authorities talks.
Banco di Brescia: on 16 th November 2011, Banco di Brescia and UBI Banca (as the consolidating
company) were served with notices of assessment and notified of fines for IRES purposes relating to
2006 for a total of €5.1 million (of which €1.9 million for increased taxation, €272 thousand for
interest and €2.9 million of fines). These notices resulted from a tax assessment report received by
Banco di Brescia on 19 th June 2009, the findings of which are fully accepted, in which a different
criterion is used to calculate the timing of tax deductions for impairment losses on loans. On 6 th
December 2011, an application for tax assessment by consent was filed in order to obtain, as a
reduction in the increased tax demanded, what had already been paid voluntarily in accordance with
Law No. 244/2007 for the realignment of statutory accounts with tax accounts with regard to existing
provisions for risks and charges. This procedure was concluded on 1 st February 2012 without the
parties having reached an agreement. The Bank has appealed to the relevant Tax Commission by the
statutory deadline and is awaiting the setting of a date for a hearing in the matter. In the meantime a
provisional sum of €0.8 million has been paid.
Centrobanca: on 23 rd July 2009, on conclusion of an inspection, this bank received a tax assessment
report, which raised matters concerning the tax treatment criteria for the sales of loans and
receivables to customers, or the write-downs of these, while in the presence of the reinforced
derivation principle, introduced for entities subject to IFRS since 2005. In consideration of the
magnitude of the demands, the inspectors referred the case to the Public Prosecutor’s Office of Milan.
On 8 th June 2011, section nine of the Criminal Court of Milan issued a ruling dismissing the case
because there was “no case to answer”. On 20 th July 2011, a notice of tax assessment was received
from the tax authorities which clearly had taken no consideration whatsoever of the outcome of the
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criminal proceedings and therefore confirmed the results of the tax assessment report. After an
unsuccessful attempt was made to use compliance by consent procedures in relation to that notice,
an appeal was lodged with the relative Provincial Tax Commission and suspension of the provisional
tax demand was also requested: this occurred by virtue of order of 25 th September 2012. At the
hearing of 4 th March 2013 the case was postponed until a date not yet set.
With regard to the litigation in question, in the light, amongst other things, of expert opinions, the
risk of losing is considered unlikely and more specifically it is maintained that the legal basis of the
appeal will be recognised in the courts bearing in mind also the above mentioned principle of
“reinforced derivation”.
UBI Banca: on 28 th November 2011 UBI Banca was served with a notice of assessment and notified of
fines imposed for corporate income taxes relating to 2003 for a total of €47.1 million (of which €17.9
million for increased corporate income tax, €4 million for interest and €25.2 million of fines). That
notice stems from a tax assessment report served on the Bank on 8 th July 2010, alleging one
irregularity only concerning the transfer in June 2003 of a business unit from BPB-CV Scrl to the
newly incorporated BPB Spa and BPCI Spa within the context of the operation that gave birth to the
BPU Banca Group. In particular, the full deduction of the provisions for risks and charges taxed by
the transferor BPB-CV Scrl was disputed, with the tax authorities alleging that those provisions
should have been deducted in the following years by the transferees BPB and BPCI.
The above tax assessment report gave rise to criminal proceedings (fiscal offence of inaccurate income
tax returns) against the legally authorised representative of BPU Banca, when the tax returns for
2003 were filed. The case was closed on 21 st July 2010 with an order for no further action by the
Criminal Court of Bergamo, both because of the absence of specific intent and because the statute of
limitations applied to the alleged offence.
The assessment was performed as a result of Ruling No. 247 of 25 th July 2011 of the Constitutional
Court, which doubled the length of the assessment period for fiscal offences, even if the ascertainment
of the criminal offence occurs when the ordinary assessment period has expired. This issue is subject
to broad debate, which is still in progress. In the case in question, the inspection relating to 2003 had
taken place well after the time limit pursuant to article 43 of Presidential Decree No. 600/1973 had
expired.
The Bank has appealed by the statutory deadline and is awaiting the setting of a date for a hearing in
the matter.
With regard to the litigation in question, in the light, amongst other things, of expert opinions, the
risk of losing is considered unlikely and more specifically it is maintained that the legal basis of the
appeal will be recognised in the courts bearing in mind also the non-applicability of the doubling of
the limitation period.
UBI Banca and Banco di Brescia: in compliance with Supervisory Recommendations issued in Bank
of Italy Circular No. 229/1999, in 1999-2000 the former Banca Lombarda e Piemontese Spa, its
subsidiary Banco di Brescia Spa, the former Banca Popolare di Bergamo-Credito Varesino Scrl and
the former Banca Popolare Commercio e Industria Scrl each individually conducted operations to
strengthen capital, the results of which are still in existence, by issuing preference shares through
special companies located in the State of Delaware (U.S.A.). These operations were authorised by the
Bank of Italy and were conducted in compliance with the authorisation received. As already reported,
at the time (1999-2000) and in any case until the introduction of the company reform pursuant to
Legislative Decree No. 6/2003 (the “Vietti Reform”), the direct issue in Italy of financial instruments
with the characteristics necessary to comply with the requirements of the above supervisory
regulations was forbidden and, in view of that circumstance, those same supervisory
recommendations stated that “the innovative capital instruments, such as preference shares, are
instruments issued by foreign subsidiaries included in the banking group”.
Between 2009 and 2012 the Large Taxpayers Office of the Regional Department for Lombardy of the
tax authorities served specific notices of tax assessment on UBI Banca and Banco di Brescia for the
years 2004, 2005, 2006 and 2007 in relation to those transactions (for a total of €60.2 million of
which €24 million for increased withholding tax and a fine of €36.2 million in addition to interest)
alleging the failure to apply a withholding tax of 12.5% pursuant to article 26 paragraph 5, of
Presidential Decree No. 600/1973 by the Italian bank (UBI Banca and BBS) on the interest paid on
the subordinated deposit made by the LLC located in Delaware. The tax authorities’ argument is
based on a change in the classification for tax purposes only of the subordinated deposit from the
foreign company to the Italian company (exempt from withholding tax) as a loan (subject to
withholding tax of 12.5%).
The banks appealed against those notices. After a number of hearings, on 22 nd December 2011
section 25 of the Tax Commission of Milan rejected the appeal presented by UBI Banca relating to
2004, based on the statements made by the Bank of Italy for regulatory capital purposes, rather than
on the provisions of the Italian Civil Code or tax legislation, as one would have logically expected.
Moreover, that same commission held that fines were not due because of the objective uncertainty
surrounding the regulations.
As regards Banco di Brescia the hearing in relation to the 2004 financial year that had been
scheduled for 25 th October 2012 was postponed to 30 th May 2013. For the 2005 financial year
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hearings are scheduled for 15 th March 2013 (Banco di Brescia) and 8 th May 2013 (UBI Banca)
whereas no dates have been set yet for hearings in relation to subsequent financial years.
While waiting judgment UBI Banca has provisionally paid €10 million and Banco di Brescia €3.1
million.
The dispute in question has recently spread to the other banking groups who engaged in the same
type of capital strengthening operations implemented through the binding schemes that the Bank of
Italy had indicated.
With regard to the litigation in question, in the light, amongst other things, of expert opinions given to
the Parent and Banco di Brescia, the risk of losing is considered unlikely and more specifically it is
maintained that the legal basis of the appeal will be recognised in the courts, also because the
operations in question cannot be classified as a so-called “abuse of law” in view of their strict
supervision by the Bank of Italy and the utmost transparency shown in the various financial
statements.
UBI Banca, BPB Immobiliare and Banca Carime – These companies in the UBI Banca Group have
appealed against notices of tax assessment with which the tax authorities have reclassified
transactions as property disposals, which the companies had considered contributions of property
operations performed in 2003 to Immobiliare Serico, with a consequent demand for increased
corporate income tax and VAT and the relative fines for a total of approximately €82.8 million. The
companies won at first instance and on appeal. However, on 14 th November 2012 and 14 th January
2013 the State Attorney’s Office appealed to the Supreme Court against the judgments in favour of
UBI Banca and BPB Immobiliare. The companies duly entered an appearance in the proceedings.
With regard to the litigation in question, in the light, amongst other things, of expert opinions given to
the Company, the risk of losing is considered unlikely, bearing in mind also the victories at first
instance and on appeal. In the meantime no demand for actual payment of the taxes has been made.
UBI Leasing: on 13 th December 2012 the Regional Department for Lombardy of the tax authorities
served UBI Leasing a notice of tax assessment for the year 2007 based on various tax inspection
reports issued in previous years concerning:
- IRAP: alleged non-deductibility of (i) sponsorship reclassified as entertainment expenses, (ii)
amortisation in relation to solar panel leases whose terms were shorter than the minimum laid
down by tax law for deductibility and (iii) allegedly non-existent transactions. The total higher IRAP
was quantified as €11 thousand;
- VAT: improper deduction of VAT as a result of the findings mentioned above in relation to IRAP
and unlawful VAT exemption in relation to boat leases (use of vessels outside territorial waters,
huge rental, rental prior to navigation license, rental prior to delivery of vessel, no VAT liability
under article 8-bis, paragraph 1, of Presidential Decree No. 633/1972 for the transfer of vessels
intended for the carrying on of a business). The total higher VAT was quantified as €604 thousand.
In addition to the higher taxes and interest, a fine of €1.495 million was also imposed. The Company
will appeal the notice of assessment by the statutory deadline therefor.
UBI Banca and Banque de Depots et de Gestion: in May 2011 the Swiss tax authorities rejected the
appeal by UBI Banca and Banque de Dépôts et de Gestion against an alleged obligation on the part of
BDG to apply a withholding tax of 35% on dividends paid to the parent UBI Banca in the years from
2006 to 2008 because, in the view of the Swiss tax authorities, UBI Banca could not benefit from the
exemption envisaged for joint stock companies since it was actually a co-operative society. The
companies decided to appeal to the courts because they maintained that all of the requisites for the
application of the Swiss-EU agreement on the taxation of savings had been fulfilled in the case in
point meaning the Swiss withholding tax of 35% did not apply. The companies won at first instance
before the Federal Administrative Court and that decision was followed by a further totally favourable
one from the Federal Court in October 2012, which can no longer be appealed. That has given rise to
a refund of the €6.37 million in withholding taxes already paid on the dividends as well as recognition
of the direct applicability of the withholding tax exemption for future distributions of profits/reserves.
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Investor relations and external communication
Relations with analysts and institutional investors and communication through
the corporate website
Again in 2012 the Investor Relations Office, which reports directly to the Chief Executive
Officer, made particular efforts to manage relations with the financial community attentively
and promptly, aware of the continuous policy and regulatory developments in what was in any
case a difficult year for Italy due to the recession and the slow recovery of confidence in
markets. Continuous and open dialogue allowed prompt replies to be given to demands for
information from equity and debt security investors, analysts and the financial community as
a whole.
More specifically, interaction with the financial community took place by means of the
following:
• conference calls 2 organised when annual and interim results were approved;
• the participation of UBI Banca as a speaker at seven international conferences for
institutional equity and debt investors;
• periodic meetings with Italian and international investors and with the analysts who cover
the UBI share (the share is currently followed by 25 brokerage houses, including 19
international, while the remainder are Italian). Altogether, senior management and/or the
investor relations officer met more than 250 institutional investors (equity and debt) over
the twelve month period, sometimes on more than one occasion;
• the very many occasions on which analysts and investors were provided with information in
response to telephone or email queries, especially in view of the intense reporting activity
required by the situation on markets.
The activity involving direct contact with the financial community described above was
accompanied by the increasingly more important updating and constant expansion of the
corporate website at www.ubibanca.it. This is now a fundamental and also a regulatory tool for
conveying and broadcasting corporate information across the board.
Priority was given during the year to providing full documentation promptly, the process of
implementing new tools and advanced functions having been commenced in previous years.
In 2012, the UBI Banca website ranked 15 th place in the Italian league table drawn up
annually by the specialist "web ranking" company Hallvarsson & Halvarsson (KWD Group) and
in third place in the Italian banking segment.
Press relations
As always press relations activities were performed with a maximum of transparency and cooperation
with each publication and with each journalist in order to ensure an accurate
perception of the values and distinguishing features of the Group.
Established practice was continued with the network banks involved in the issue of press
releases at local level in order to attain widespread distribution of information to the public.
Mirroring the communication strategy of UBI Banca, the network banks themselves work to
obtain coverage in the press and in the local press above all, thereby helping to increase the
visibility of the Parent.
In 2012 UBI Banca obtained visibility in the Italian press in 8,835 articles, 30.1% of which
(2,660 articles) described the Group and its banks in detail, with a readership (an estimate of
the number of people who read these articles based on an Audipress survey) of almost €1.4
billion readers 3 .
Yet again during the year local newspapers were the media category most attentive to the
activities of UBI Banca, followed by the financial media.
2 With a view to encouraging the fullest participation of those potentially concerned, all the invitations (prepared in the English
language) are not only sent to a mailing list of analysts and investors, but are also communicated to the Consob and Borsa Italia Spa
through the SDIR-NIS network (the Borsa Italia regulated information network service) and published on the corporate website at the
same time. A copy of the presentation is made available on the Bank’s website, in good time beforehand.
3 Data processed by a company external to the Group.
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The percentage of positive articles out of total high standing articles was 16.35% (-0.65%
compared to 2011), while negative articles accounted for 9.7% (-3%). As much as 67% of the
positive articles were dedicated entirely to the UBI Banca.
The percentage of neutral articles increased as a consequence (from 70.3% to 73.95%), to be
considered in relation to both the greater quantity of articles which analysed the sector and
the huge attention paid by the general media to economic and financial issues, which were
given more space as a result of the crisis in progress.
Without doubt the launch of “social bonds” had a positive impact with as many as 78 articles
in the national press, although the effect was above all local.
Events and sponsorships
In order to enhance its brand and support commercial advertising, as it does every year UBI
Banca promoted a series of events on its local markets.
The profitable co-operation with the Einaudi Centre continued for the presentation of the XVII
Einaudi Report on the global economy and Italy. Over ten meetings were organised in 2012 in
important towns and cities such as Milan, Bergamo, Brescia, Turin, Varese, Mantua and Jesi
with the final meeting held in Rome.
The partnership with the Accademia Teatro alla Scala (La Scala Theatre Academy) continued,
supported by the publication of announcements in newspapers, especially with regard to the
UBI Community project. On the one hand this involved action taken by Group banks to
provide concrete support in training students of the Academy with a range of solutions
designed to meet financing and investment management requirements. On the other hand the
UBI Banca Group made a direct commitment to the diffusion of Italian artistic excellence in
the world: this year the UBI Banca Group co-operated with the Italian Consulate General in
Hong Kong to organise an "Italian month" with the sponsorship of a concert for piano and
singers from the Accademia del Teatro alla Scala in the Hong Kong City Hall Theatre. The
participation of artists from the Accademia Teatro alla Scala in the Festival of the Republic in
Hong Kong is now looked forward to greatly by lovers of culture in the local community.
In the first half of 2012, the network banks again organised a series of meetings in some of the
more important towns and cities in order to advertise the UBI Community service model for
the third sector. These saw the involvement of the major protagonists in the nonprofit world.
Again in order to promote the UBI Community project, UBI Banca supported the second
edition of the 2012 Sodalitas Social Innovation Award, organised by the Sodalitas Foundation
to give visibility to nonprofit organisation projects of greater social value. The website
www.socialinnovation.sodalitas.it is the first of its kind in Italy dedicated entirely to forprofitnonprofit
partnerships as a driving force behind the development of innovative social projects.
As concerns sponsorships, although the context was one of attention to costs and therefore of
rationalisation of initiatives, the Group chose to continue longstanding relationships: for UBI
Banca these included its traditional partnership with the Goggi Ski Club in Bergamo, the
International Tennis Tournament in Bergamo and the cycling team TX Active Bianchi, the
mountain bike team led by Felice Gimondi dedicated to the mountain bike and cross-country
fields, a sponsorship that encourages a sport close to nature out in the fresh air.
Again in the field of cultural activities, co-operation continued, now covering a number of
years, with the “Popotus a scuola” project, organised by the daily newspaper Avvenire, the aim
of which is to help children to read and understand newspapers, by introducing them to a
newspaper specially for them.
A new sponsorship during the year consisted of the Parent’s support for a photographic book
entitled Photoansa produced by the Agenzia ANSA press agency. It is a “historical” book which
features important facts which occurred during the past year portrayed with the most
significant photos.
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Social and environmental responsibility
UBI Banca pursues the convergence of corporate strategies, policies and objectives with its
values and principles and with the expectations of its stakeholders. The objective is to create
sustainable value through the control of reputational risk, to establish a strong and distinctive
corporate identity and to develop a climate of trust with its staff, its shareholder base and
markets
A summary of the main social responsibility activities performed in 2012, is given below, while
the Social Report may be consulted for further information and in-depth analysis.
CORPORATE GOVERNANCE (Code of Ethics)
The Code of Ethics approved at the end of 2010 by the Management Board and the
Supervisory Board of UBI Banca and subsequently by all subsidiary banks and companies
constitutes the main point of reference for the Group’s social responsibility policies and
strategies. It was completed at the end of 2011 with the adoption of a Code of Conduct, aimed
at all those in a working relationship with UBI Banca, both on a continuing and casual basis.
It is designed to furnish a framework of principles and rules of conduct with which to evaluate
concrete situations from time to time and compliance of decisions to be taken with ethical and
regulatory norms.
A training programme on Social Responsibility and the Code of Ethics was completed in 2012.
It involved a total of over 2,000 managers of central or network bank operating units through
classroom sessions and over 11,000 employees using remote training procedures. The
training programme was designed to communicate the most important aims and contents of
the Group Code of Ethics simply and directly, and to link them with broader corporate social
responsibility issues. The intention was to support the integration of corporate social
responsibility (CRS) in business strategies and to make it a source of innovation and enhanced
competitiveness and reputation.
MARKET
Business management is oriented towards innovation in products and services, marketing
approaches and distribution processes consistent with the ethical, social and environmental
expectations of stakeholders and in implementation of the mutual and community vocation of
the Group.
In addition to the action taken to assist families and businesses described in the section on
commercial activities, the most important new development was the launch of UBI Community
social bonds, an important innovation in the sector nationally, which brought Italy into line
with the more evolved European countries in the area of finance for nonprofit organisations.
They provide subscribers with the opportunity to obtain a return on their investment (in line
with the rates offered by the Bank with respect to similar investments) and at the same time to
help support high social value and impact projects organised by public and private sector
organisations in local communities. At Group level a total of 17 social bonds were placed for
€198.54 million.
SOCIAL INTERVENTION
The management of social intervention is designed to strengthen and support those large
numbers of nonprofit organisations which work in the following fields: social, recreational and
sport; welfare and solidarity; education and training; culture: university and research;
restoration of artistic heritage and the protection of the environment.
Taking the Parent, the network banks, the main product companies and foundations together,
the Group disbursed a total of €14 million in 2012 in the form of donations and sponsorships.
Each entity in the Group operates independently in response to the demands it encounters
and considers consistent with its own values and social responsibility objectives.
While the Social Report furnishes a full view of the activities performed during the year,
particular mention is made here of the donations to charity of €1 million made thanks to the
funds collected from the UBI Community social bonds. The donations were made to assist the
initiatives and projects of institutions and nonprofit organisations operating in the following
sectors: social and welfare (8), public utility infrastructures and services (6), universities and
research (1) and community and economic development (1).
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ENVIRONMENTAL RESPONSIBILITY
In addition to its pursuit of full and substantial compliance with regulations in force, it is
Group policy to contribute to sustainable economic development, thereby also concretely
implementing the principles of the Global Compact, which it has subscribed to.
The environmental policy approved in December 2008 commits the Group to reducing its
environmental impact through the intelligent and responsible management of both direct
impacts (i.e. impacts generated by its own operating activities through the consumption of
resources, the production of waste and harmful emissions) and also indirect impacts (i.e.
impacts generated by the conduct of third parties with whom the Bank does business, such as
its customers and suppliers). The Group Energy Manager and Mobility Manager are the main
protagonists assigned the duty of promoting and supporting the implementation of the
environmental policy through targeted initiatives, in co-operation with the Group Corporate
Social Responsibility Function.
With regard to direct impacts, the most important data concerns energy and paper
consumption. In 2012 the Group yet again made exclusive use of electricity certified as from
renewable sources (RECS certificates). Total electricity consumption was 118,788,253 kWh,
including 238,128 kWh of electricity generated by the photovoltaic plant installed at Jesi.
Consumption of paper was 1,698,982 kg. As concerns indirect impacts, the Group has been
active for some time in its commercial activities with “green” products, and that is credit lines
provided for investments in energy savings and in the diversification of energy sources, above
all from renewable sources or those with a low environmental impact.
UBI Banca’s environmental policy was acknowledged with the 2012 Green Globe Banking
Award.
ECONOMIC REPORT
In 2012 the Group generated economic value of €2,743.6 million (-3.7% compared to 2011).
The economic value distributed was €2,381.9 million as follows: 64.1% to employees, 26.6% to
suppliers for purchases of goods and services, 6.7% to public administrations for taxes, 1.9%
to registered and unregistered shareholders, 0.3% to the community in the form of donations
to institutions and nonprofit organisations for social activities and 0.4% to non-controlling
shareholders (see the 2012 Social Report for further details).
REPORTING AND CONTROL
The Social Report, together with the social responsibility section of the Group corporate
website, is the main instrument for integrated reporting on the economic aspects (the
economic value generated and distributed), social aspects (commitments, objectives and
results achieved in terms of satisfying the legitimate expectations of stakeholders) and
environmental aspects (commitments, objectives and results for controlling direct and indirect
impacts) of operations.
In accordance with requirements expressed by stakeholders in consultation activities
conducted during the year, consisting of the Consultation Project for customers and focus
groups with trade associations and local nonprofit organisations, and with developments in
best practices, it was decided to publish the following for 2012:
• a summary document, of an informative nature, to involve the broadest possible range of
stakeholders, printed in 30,000 copies, published on the occasion of the Annual General
Meeting and distributed through branches;
• a detailed document, prepared in compliance with the highest level A+ of the “Sustainability
Reporting Guidelines G3.1”, accompanied by a “Financial Services Sector Supplement” of
the Global Reporting Initiative 4 and subject to independent auditing by the independent
auditors Deloitte & Touche Spa. This document is published in electronic format only and
is also translated into English, while hardcopy versions are produced and sent only on
request.
In 2012 the social responsibility section of the Group corporate website, which has been
updated continuously, was awarded 4 th position among banks in the 2011 CSR Online Awards
Italy league table. The classification, drawn up each year by the communication company
4 An independent nonprofit foundation located in Amsterdam which was formed from a project started in 1997 by CERES of Boston (a
coalition of investors, environmental organisations and public interest groups which came together to promote corporate social
responsibility by addressing businesses directly on social and environmental issues). Its mission is to produce global standards for
sustainability reporting, thanks to the contribution of hundreds of experts in a large number of countries throughout the world
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Lunquist, assesses the quality of the online communication of businesses on social and
environmental, ethical and corporate governance issues and on the level of dialogue with
stakeholders.
Compliance with personal data regulations
With a view to simplifying personal data requirements (Art. 45), Decree Law No. 5 of 9 th
February 2012 “urgent measures on simplification and development” (published in the Official
Journal No. 33 on 9 th February 2012) subsequently converted into Law No. 35 of 4 th April
2012, abolished the obligation to prepare an annual update of the “Security Programme
Document” pursuant to Legislative Decree No. 196 of 30 th June 2003 and subsequent
amendments and additions (“Privacy Code”).
Nevertheless, the changes introduced did not remove the obligation to comply with "Security
Measures" required under Title V of the Privacy Code, to be met by each Data Controller. In
this respect, Group banks and companies maintained and updated documents relating to the
following: the list of personal data treatment processings carried out in the course of their
activities; the risk analysis required for that data; the minimum security measures and the
relative improvement plan; the checks and controls in place and/or planned with regard to
compliance with the aforementioned measures in view of the reduction in the risk of data
destruction or loss, of unauthorised access, or of data treatment which is not permitted or not
for the purposes for which it was acquired. Specific training initiatives were also undertaken to
manage the foregoing aspects.
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Principal risks and uncertainties to which
the UBI Banca Group is exposed
Risks
The UBI Banca Group attributes primary importance to the measurement, management and
monitoring of risk, as activities necessary to the sustainable creation of value over time and to
the consolidation of its reputation on its markets.
In compliance with the regulations in force for the prudential supervision of banks (Bank of
Italy Circular No. 263/2006), the Group has put a process in place to calculate its capital
adequacy requirement – for the present and the future – to meet all significant risks to which
the Group is or might be exposed (ICAAP - Internal Capital Adequacy Assessment Process).
In this respect very careful identification is performed on a continuous basis of the risks
subject to measurement. Risk identification activity is designed to verify the magnitude of
Group risks already subject to measurement and to detect signals of other types of risk which
may manifest. Identification involves precise conceptual definition of the risks to which the
Group is exposed, an analysis of the factors which combine to generate them and a description
of the relative manner in which they manifest. This activity was achieved by means of a
centralised process of analysis supplemented by self assessment conducted on all the entities
of the Group.
Once the activity to identify significant risks is completed, the ICAAP process involves the
measurement of the risks identified and the calculation of the total capital 1 required to meet it
(capital adequacy), both at present and in the future. Use is also made of specific (by assessing
impacts on a single risk) and global (by assessing impacts on all risks at the same time) stress
tests to perform a better assessment of exposure to risk and of systems for mitigating and
monitoring it and calculating capital requirements.
The UBI Banca Group has a system of risk governance and management in place which takes
account of organisation, regulations and methods in order to ensure consistency in its
operations and its relative propensity to risk.
In consideration of its mission, the operations of the Group and also the market context in
which it operates, the risks to be subjected to measurement in the ICAAP assessment process
were identified and divided into first pillar and second pillar risks, as required by the relative
regulations.
First pillar risks – already managed under the requirements of supervisory regulations – are as
follows:
• credit risk (including counterparty risk): the risk of incurring losses resulting from the
default of a counterparty with whom a position of credit exposure exists. This also
comprises the definition of counterparty risk, which constitutes a particular type of credit
risk. It is the risk that a counterparty to a transaction involving determined types of
financial instruments defaults before the transaction itself is settled.
market risk: risk of changes in the market value of financial instruments held, due to
unexpected changes in market conditions and in the credit rating of the issuer;
operational risk: the risk of incurring losses resulting from the inadequacy or malfunction
of procedures, human resources and internal events or from exogenous events. This
includes losses resulting from fraud, human error, business disruption, system failure,
non-performance of contracts and natural disasters and it comprises legal risk.
1 See Part F, section 1 of the Notes to the Consolidated Financial Statements for a definition of total capital.
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In addition to first pillar risks, second pillar risks were identified, consisting of the following:
• risks defined as measurable, for which established quantitative methods have been
identified, which lead to the determination of internal capital or for which useful
quantitative thresholds or limits can be defined which, combined with qualitative
measurements, allow allocation and monitoring processes to be defined;
• risks defined as non measurable, for which policies and measures for control, reduction or
mitigation are considered more appropriate because no established approaches exist for the
measurement of internal capital that are useful for allocation purposes.
The second pillar risks subject to analysis are as follows:
Measurable risks
- concentration risk: risk resulting from exposures to counterparties, groups of connected
counterparties and counterparties in the same economic sector or who carry on the same
business or belong to the same geographical area:
- interest rate risk: the current or future risk of a change in net interest income and in the
economic value of the Group following unexpected changes in interest rates which have an
impact on the banking book;
- business risk: the risk of adverse and unexpected changes in profits and margins with
respect to forecasts, connected with volatility in volumes of business due to competitive
pressures and market conditions;
- equity risk: the risk of losses incurred in equity investments that are not fully consolidated
on a line-by-line basis.
- fixed asset risk: the risk of changes in the value of the tangible fixed assets of the Group.
By convention measurable risks also include those risks for which, although no well
established approaches exist for the estimate of internal capital, operational limits of a
quantitative nature, for which there is a consensus in the literature, can be set to measure,
monitor and mitigate them. These risks are:
- liquidity risk: the risk of the failure to meet payment obligations which can be caused either
by an inability to raise funds or by raising them at higher than market costs (funding
liquidity risk), or by the presence of restrictions on the ability to sell assets (market liquidity
risk) with losses incurred on capital account;
- structural liquidity risk: the risk resulting from a mismatch between the sources of funding
and lending.
Non measurable risks
- compliance risk: the risk of incurring legal or administrative penalties, substantial financial
losses or damage to reputation resulting from violations of laws and mandatory external
regulations or internal regulations (by-laws, codes of conduct and voluntary codes);
- reputational risk: the risk of incurring losses resulting from a negative perception of the
image of the bank by customers, counterparties, shareholders of the bank, investors, the
supervisory authority or other stakeholders;
- residual risk: the risk of incurring losses resulting from the unforeseen ineffectiveness of
established methods of mitigating risk used by the Bank (e.g. mortgage collateral);
- risks resulting from securitisations: the risk that the underlying economic substance of a
securitisation is not fully reflected in decisions made to measure and manage risk;
Details are given below of risks which have significant impacts for the UBI Banca Group and
the action taken to mitigate them. It is considered that risks other than those reported below,
which are of marginal importance, will not change during the course of the year.
Credit risk
Credit risk constitutes the most important characteristic risk of the UBI Banca Group:
historically this risk accounts for approximately 90% of the regulatory risk capital.
In 2012 the Italian economy remained in recession suffering from the effects of weak domestic
demand and the impacts of action taken to stabilise public finances. Despite a certain
improvement in foreign demand, 2013 should as a whole be negative again in terms of national
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income, therefore continuing to exert an unfavourable influence on operating conditions for the
banking sector. The continuing difficulties of the economy in general and the related consumer
crisis have continued to have a negative impact on the ability of businesses and individuals to
meet their obligations, thereby maintaining high levels of credit risk and as a consequence also
high rates of loan impairment.
In this situation of objective difficulty, the Group has continued with initiatives launched in
2011 to improve credit monitoring and recovery. The following in particular are continuing:
• on the one hand the “Loan Quality” activity, with the objective to reduce the size of the
problem and default loan portfolio through the adoption of an approach for the
management of problem loans resulting from portfolio segmentation and the assignment of
strategies and objectives to staff in the distribution network;
• on the other hand the programme “CR2– Credit Recovery and Regularisation” which
involves the following in 2013:
- the full roll-out, having completed the pilot phase commenced at the end of 2012, of the
new credit monitoring model with the introduction of “PEM - Pratica Elettronica di
Monitoraggio – electronic case monitoring” and of the new “Credit Portal” on the whole of
the distribution network;
- the consolidation of the new credit recovery model launched in the second half of 2012
which involves specialist units and staff, based on the size and type of the nonperforming
loans to be recovered. Activities to perfect the functioning of the IT system for
credit recovery will also continue.
Liquidity risk
The problems of confidence on institutional and interbank markets, caused primarily by fears
for the solvency of some sovereign states, in a context of a slowdown in trends for traditional
funding, due to lower household disposable income, has led to the risk of shortfalls in the
liquidity required for banking activity. In this context the Group has addressed its liquidity
management by pursuing a number of lines of action. These include participation in two
Eurosystem refinancing operations with a three-year maturity (longer-term refinancing
operation – LTRO) and the issuance of three bonds on the institutional market for a total of
€1.275 billion nominal, to thereby guarantee greater stability to the liability structure of its
balance sheet in a market context still far from “normality”. We report that as at 31 st
December 2012, the net stable funding ratio and liquidity coverage ratio indicators met Basel
3 requirements.
As concerns the risk of failure to comply with capital requirements set by the supervisory
authority (9% for EBA purposes), at present the Group has a capital ratio (core tier 1 ratio) of
greater than 9%. This indicator may increase further following the validation of advanced retail
models currently in progress.
Detailed information on financial risk management objectives and policies and also on the
exposure of the Group to price risk, credit risk, liquidity risk and the risk of changes in cash
flows – pursuant to article 2428 of the Italian Civil Code – is given in Part E of the notes to the
consolidated financial statements, which may be consulted.
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Uncertainties
An uncertainty is defined as a possible event for which the potential impact, attributable to one
of the risk categories just mentioned, cannot be determined and therefore quantified at present.
The Group is currently operating in a highly uncertain macroeconomic environment.
Pressures on the sovereign debts of the “peripheral” countries of Euroland and the consequent
measures to balance public accounts taken by the governments hit hardest by the crisis have
deepened the recessionary phase in terms of both the size of the contraction in gross domestic
product and the duration of the period of economic crisis.
In detail, domestic demand is particularly weak in terms of: (i) public spending, due to fiscal
consolidation action taken by governments designed to comply with EU deficit targets; (ii)
consumer spending in light of the progressive rise in unemployment rates (which rose in
December to 11.2%, from 9.5% in the same period of 2011) and the fall in disposable income;
(iii) spending on investment, which reflects the modest rate of use of production capacity and
action taken by businesses to contain costs during the recession.
Nevertheless, some support for Italian GDP is coming from net exports, which reflects growing
foreign demand from the expansion of the world economy. Further positive signs are to be
seen in the agreements reached at EU level to support countries in difficulty, with particular
reference to the restructuring of Greek debt and the tranches of international aid to Athens,
resulting from the fiscal compact agreement – designed to stabilise public accounts and bring
the debt to GDP ratio down to 60% over the next twenty years – and from action taken by the
ECB. On the one hand, the latter provided banks with liquidity through refinancing operations
with full allotment of bids and on the other, it helped relax pressures on financial markets by
introducing outright monetary transactions (OMT), a programme for the purchase of
government securities designed to restore the proper mechanisms for the transmission of
monetary policy stimuli. OMTs require specific conditions to be met, including an official
request from a government and the signing of a memorandum of understanding at the same
time.
The outlook for the future still contains many uncertainties which could manifest with impacts
basically attributable to credit, interest rate, business and reputational risk, without, however,
compromising the capital strength of the UBI Banca Group.
In detail, the main uncertainties identified for 2013 are linked to the following aspects:
- developments in the macroeconomic situation. The outlook for the Italian economy is again
weak for the current year, with GDP expected to contract further. The recovery could begin
in the second half, but the pace could be particularly modest. The ambitious budget targets
set by the EU will be reflected in cuts to government spending and household spending
could also fall, consistent with downward pressures on income and the absence of
expectations that high unemployment will fall. A best scenario would be one of investment
by businesses, especially in the machinery, equipment and means of transport sectors,
where – partly due to a basic statistical comparison with particularly weak periods in the
past and the need to replace obsolete plant – an inversion of short-term (but not long-term)
economic trends might occur by the end of the year. In this sense some economic indicators
(SMEs, consumer and business confidence) have recently shown signs of stabilising at
modest levels, which might be the prelude to the start of a new economic upturn, although
at a moderate pace.
Particular attention will be paid to trends on financial markets, whose performance will
have significant impacts – positive or negative – on the real economy. A possible progressive
reduction in turbulence on financial markets in terms of government securities spreads
would have an indirect positive impact on the real economy, partly through an
improvement in the conditions for access to credit.
The macroeconomic environment in 2013 should therefore still be weak and subject to
considerable factors of uncertainty, some of which could be of exogenous origin. Dangers
exist for Italian exports – which at present constitute the biggest driver of growth in GDP –
resulting both from possible pressures on foreign exchange markets, with particular regard
to a substantial and long lasting appreciation of the euro and from a slowdown in
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international demand in the wake of the more moderate pace of growth in the world
economy. To conclude, the weakness of the macroeconomic environment should persuade
the ECB to maintain a strongly accommodating monetary policy with interest rates at very
low record levels, which could result in a contraction in net interest income compared to
last year. Default rates are also expected to remain stable in 2013 at the high rates reached
during the crisis;
- uncertainty of the political context. The results of the recent political elections have
generated concerns among the major rating agencies. Moody’s in particular judged the
scene resulting from the urns negatively both in terms of public debt and structural and
fiscal reforms. The scenario depicted is one of high uncertainty and the possibility of a
return to the polls shortly. What happened had no immediate effects on Italy’s rating for
Standard & Poor’s. This United States agency nevertheless underlined the presence of
numerous factors of uncertainty and considered that negotiations to reach an agreement
for a new executive will last around one month. The base scenario assumes that the fiscal
consolidation process will not deviate from its current path. The greatest risk is that a new
government will lack the strength to implement important structural reforms able to
improve the growth prospects for the country. The results have also impacted on
government securities spreads, with repercussions, although not dramatic at present, on
the value of portfolios.
- developments in the regulatory context. The regulatory context is subject to various
processes of change following both the issue of a number of provisions at European and
national level, with the introduction of the relative regulations to implement them, relating
to the provision of banking services (Tobin tax, stamp duty, etc.) and also to the related
jurisprudence (e.g. the form, content and modification of contracts, interest, other items of
remuneration for credit lines and overdrafts and the sale of insurance policies). This
scenario requires particular effort both in terms of interpretation and implementation and
has at times directly affected the profits of banks, and/or costs for customers.
The UBI Banca Group continuously studies action to soften the impacts of measures, which
includes constant and attentive monitoring of operating costs and a constant search for
greater efficiency in internal processes.
***
The risks and uncertainties described above were subject to a process of assessment designed,
amongst other things, to examine the impacts of changes in market parameters and conditions
on corporate performance. The Group does in fact possess instruments to measure the possible
impacts of risks and uncertainties on its operations (sensitivity analysis and stress tests in
particular), which allow it to rapidly and continuously adapt its strategies – in terms of its
distribution, organisation and cost management systems – to changes in the operating context.
Risks and uncertainties are also under constant observation through the implementation of the
policies and regulations to manage risk adopted by the Group: policies are updated in relation to
changes in strategy, context and market expectations. Periodic monitoring of policies is designed
to verify their state of implementation and their adequacy. The findings of the analyses
performed show that the Group is able to meet the risks and uncertainties to which it is exposed,
which therefore confirms the assumption that it is a going concern.
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Risks relating to health and safety at the workplace (Legislative
Decree No. 81 of 9 th April 2008)
These issues are overseen directly by a unit at the Parent – on the staff of the Chief Operating
Officer – which has the following duties: (i) to oversee the proper implementation of regulations
concerning health and safety at the workplace; (ii) to officially fill the role of the Prevention and
Protection Service for Group companies for which a specific service provision contract is in
place; (iii) to process and maintain risk assessment documents and; (iv) to fill the role of
“compliance oversight specialist” in order to ensure compliance with the relative regulations.
Activity was focused in 2012 on the following aspects:
• the identification of innovative criteria for the management over time of the compliance
levels achieved, in order to formulate improvement programmes and action priorities with
an approach which is increasingly linked to the actual accidents that occur;
• implementation of a health and safety at the workplace management system project based
on UNI-INAIL (Italian standards authority and Italian national accident insurance institute)
guidelines, through a risk assessment of corporate process compliance, the formulation of a
system manual and a set of procedures;
• development of the work-related stress assessment process which, once the objective data
acquisition, analysis and comparison stage was complete (the “alarm bell” events),
addressed the area of subjective perception;
• analysis of criminal phenomena (robberies) which have a direct impact on the mental and
physical well-being of personnel;
• changes to the Group training programme for compliance with the provisions of the Accordo
della Conferenza Stato Regioni (State-Regions Conference Agreement);
in order to ensure that the Group has a level of compliance sufficient to reduce operational,
reputational and compliance risks connected with the complex and interdisciplinary subject of
health and safety.
RISK ASSESSMENT, IMPROVEMENT PROGRAMME AND ACCIDENT PHENOMENA
The campaign for the prompt elimination of the highest level risks (16 and 12) reported by the Prevention
and Protection Service, carried out since 2011, has produced significant results and has helped the
Group to achieve very appreciable average compliance and absence of serious health risk levels.
It was therefore possible to address the subject of the progressive elimination of residual risk and to
move away from the methodology used today consisting of rules and tables based essentially on
statistical criteria adopted by INAIl (national insurance institute for accidents at the workplace) for all
sectors of production, in order to seek to link it more closely to the accidents which actually occur, year
by year, in the UBI Banca Group.
An experimental planning process was therefore set in motion in 2012 for action to be taken concerning
minor risks. It is designed to reduce or eliminate those situations - independently of the absolute risk
level - for which a cause and effect relationship may be assumed between the accident phenomena
actually measured, based on frequency statistics acquired and the seriousness of the accidents in which
employees and/or customers and suppliers are involved.
On the basis of statistics over the previous three years, particular importance was attributed to risks
which may result in falls or tripping (46% of accidents occurring at the workplace), compared to less
significant data for knocking against furnishings (16%) and being crushed (19%). The units responsible
in the Group’s consortium company focused their attention on eliminating these risks and on types of
design which would prevent these risks from arising in the first place.
As concerns the phenomenon of accidents travelling to and from work, which again last year accounted
for approximately 80% of the total accidents in which employees were involved, it must be underlined
that the Group has little or no power to reduce these. One reason is due to the degree to which the
banking sector is spread geographically and the lack of an integrated public transport network to cover
the entire country. Nevertheless, specific policies are pursued to reduce road accident risks at source,
giving priority to the use of public transport for work travel and making collective means of transport
available where significant geographical mobility has been caused by corporate restructuring processes.
UNI-INAIL PROJECT (Italian standards authority and Italian national accident insurance institute)
The “UNI-INAIL project” for the compliance of the health and safety at the workplace management system
with UNI-INAIl guidelines involves the adoption of an organisation and management system for
prevention based on the principles of effectiveness and reality-matching with respect to the
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organisational reality of the Group and the legislation. It is designed to achieve not only – as its primary
objective – greater protection from the risk of crimes being committed in terms of prevention (Legislative
Decree No. 231/2001), but also significant savings on the costs of annual accident insurance policy
premiums, resulting from the lower tariffs which INAIL charges companies which demonstrate that they
have adopted virtuous practices on prevention and protection from risks at the workplace.
A preventative risk assessment was completed in 2012 on areas and activities considered vulnerable in
terms of compliance. It was conducted in co-operation with a consulting firm by means of interviews with
the managers of Group units involved in the management of these issues. This activity made it possible
to introduce improvements to procedures already in progress and to educate all those involved in
company procedures which have an impact on prevention in a general sense. This risk assessment did
not find any situations of actual non-compliance with regulations, but underlined the need to make a
series of practices already in place official, in order to reach the level required by UNI INAIl guidelines
from the viewpoint of records and documents. Documentation was also prepared which will constitute
the future Group regulations on health and safety (the manual for the health and safety at the workplace
system and a set of procedures), already submitted to the relevant units for approval (compliance, legal
and organisation), before submission to senior management bodies for a final decision.
DEVELOPMENT OF THE WORK-RELATED STRESS ASSESSMENT METHODOLOGY
Assessment of work-related stress involves the implementation of a methodological process commenced
in 2011, consisting of two connected and sequential stages.
The first of these (the "prevention” stage), consisting of the acquisition and comparison of objective and
numerically significant data ("alarm bell" events, context and working content indicators), was generally
completed in 2011.
The data acquisition was updated in 2012 to make a longer time base available. Where workers’ safety
representatives were present, meetings were organised using focus group methods, led by a professional
psychologist to investigate - through representatives of the working populations - subjective perceptions,
amongst other things, of work-related stress.
Given the poor statistical significance of the sample, a project was started, in co-operation with a major
consulting firm that assists the Group, which involves the use of a web platform that can be used to put
one or more questionnaires to every employee, with compilation being voluntary. It was designed to
acquire data used to assess perceived stress. Designed in this way, on the one hand the process ensured
the anonymity of the participants in the initiative and on the other it acquired data for homogeneous
groups (males and females, age groups, type of work, etc.), in line with the provisions of the law, with a
view to analysing phenomena which diverge significantly from the average level of acceptable risk.
DEVELOPMENT OF ROBBERY RISK ASSESSMENT
The trend for bank robbery crime has been positive not only for our Group, but also for the entire sector,
with a considerable reduction in the number of both attempts and actual robberies (-70% in the period
2008-2012, and -20% in 2012 alone).
While this trend is encouraging, the result to a large degree of the widespread use of evolved cash
equipment with timers (“cash machines") and the reduction in the amount of immediately available cash
when robberies occur, there is however – also due to a different type of criminal, working increasingly
more often in “professional” organised gangs – a constant increase in robberies carried out using
methods which result in the need for psychological assistance. These are long affairs with personnel
taken hostage for long periods. The trend for robberies considered “serious” in terms of the impact on the
mental and physical well-being of staff has in fact reversed, with an increase inversely proportional to the
overall phenomenon. The ratio of “serious” robberies to total robberies which was approximately 21% in
2008, has progressively risen to 30% in 2009, 38% in 2010 and 50% in 2011 to reach 64% in 2012. The
data cited is for robberies only (not thefts from automatic telling machines or other equipment) with the
actual entrance of robbers into branches. Fortunately, however, no incidents have occurred involving
physical violence which involved our staff.
Co-operation is continuing on this matter between Group units responsible for managing safety issues,
in order to identify and inform people of new solutions – of a technical and organisational nature – which
act primarily as a deterrent to criminals, in order to effectively supplement what has already been put in
place over the years to maintain the positive results achieved to-date.
DEVELOPMENT OF THE HEALTH AND SAFETY TRAINING PROGRAMME
Training on health and safety matters plays a role of primary importance in risk prevention. New
legislation was enacted in 2012 (Agreement on health and safety training signed at a State-Regions
Conference to implement the powers conferred on the Permanent Conference by article 37 of Legislative
Decree No. 81/2008), which involved adding to the existing Group training programmes for compliance,
in terms of subjects and the length of the courses, with the new legislation on prevention. Preliminary to
the final entrance into force of that "Agreement”, scheduled for the beginning of 2013, in addition to the
classroom courses already programmed, initiatives were adopted for the education of all personnel. These
will differ according to the different exposure to risk or the roles of responsibility occupied in the
216

company and they will be delivered using e-learning methods. The courses were selected from the
Group's trade association’s catalogue of training programmes, which is particularly suited to the
operating reality of the banking sector.
In consideration of the delicacy of the role of safety officers in decentralised organisational units, the full
day course scheduled from the catalogue has been accompanied by an online course from the Italian
Banking Association training catalogue (“The role of the safety officer in company safety”). The Group
training catalogue has also been supplemented by a classroom session specially designed for central
management units.
In order to facilitate the dissemination of knowledge and awareness on the part of staff on the actual
scope of the legislation on work-related stress (and not on the phenomenon of stress in general), a web
based information course has been provided for all personnel, specifically prepared for the banking
sector, by a leading member of the academic world in co-operation with the Italian Banking Association
training department;
With a view to increasing personnel awareness of the importance of behaviour consistent with respect for
their own health and those of others – also in implementation of the principles and contents of the Code
of Ethics – a section has been created on the Group intranet portal dedicated specifically to health and
safety in which the following can easily be found: references to legislation and Group regulations; news
on Group safety organisation (e.g. emergency plans and exit routs to follow); all the material used in
classroom training initiatives; advice and information on correct life-styles to remain in good physical
and mental condition.
217

Subsequent events and the business outlook
for consolidated operations
Part A, Section 4 of the Notes to the Financial Statements may be consulted for significant
events occurring after the end of the year.
***
With regard to the business outlook for operations, we report the forecasts given below on the
basis of information currently available.
Yet again no growth is forecast for the Italian economy, with a consequent negative impact on
economic reference factors as a whole. The management policies adopted to-date by the Group,
which are enbabling it to weather the crisis with reasonable prudence, will therefore be
continued.
The low level of market interest rates, which hit net interest income in the fourth quarter of
2012 to an even greater extent than in previous quarters, will continue to affect 2013,
especially in the first half, while the pressure is expected to ease in the second half of the year,
partly in relation to the repricing of the roll-over of medium to long-term loans.
It is considered that the good performance by net fees and commissions in 2012 may continue
in 2013.
The continuing uncertainty over the future of sovereign debt risk makes it impossible to
assume that the excellent performance of the finance area in the past year will continue again
in 2013.
The “Group rationalisation” plan will enable pursuit of the policy for the structural reduction of
operating expenses to continue further.
Given the current context, loan losses are under control, as a result, amongst other things, of
stronger management of problem loans and it is expected that in the current year the loss on
loans in absolute terms will be contained below the 2012 level.
Bergamo, March 2013
THE MANAGEMENT BOARD
218

STATEMENT OF THE CHIEF
EXECUTIVE OFFICER AND OF THE
SENIOR OFFICER RESPONSIBLE
FOR PREPARING THE COMPANY
ACCOUNTING DOCUMENTS
219

Certification of the consolidated financial statements pursuant to Art. 81-ter of the
Consob Regulation 14 th May 1999, No.11971 and subsequent modifications and
integrations
1. The undersigned Victor Massiah, Chief Executive Officer, and Elisabetta Stegher, Senior Officer
Responsible for preparing the company accounting documents of UBI Banca Scpa, having taken account
of the provisions of paragraphs 3 and 4 of article 154 bis of Legislative Decree No. 58 of 24 th February
1998, hereby certify:
the adequacy in relation to the characteristics of the company and
the effective application
of the administrative and accounting procedures for the preparation of the consolidated financial
statements during the course of 2012.
2. The model employed
The assessment of the adequacy of the administrative and accounting procedures for the preparation of
the consolidated financial statements as at and for the year ended 31 st December 2012 was based on an
internal model defined by UBI Banca Scpa and developed in accordance with the framework drawn up
by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) and with the
framework Control Objectives for IT and related technology (COBIT) which represent the generally
accepted international standards for internal control systems.
3.Furthermore, it is certified that:
3.1 the consolidated financial statements:
a) were prepared in compliance with the applicable international financial reporting standards
recognised by the European Community in accordance with the Regulation No. 1606/2002
(EC) issued by the European Parliament on 19 th July 2002;
b) correspond to the records contained in the accounting books;
c) give a true and fair view of the capital, operating and financial position of the issuer and of
the group of companies included in the consolidation.
3.2 the management report comprises a reliable analysis of the performance, operating results and
position of the issuer and of the companies included in the consolidation, together with a description,
insofar as they are known, of the main risks and uncertainties to which they are exposed.
Bergamo, 12 th March 2013
Victor Massiah
Chief Executive Officer
(signed on the original)
Elisabetta Stegher
Senior Officer Responsible for
preparing the company accounting
(signed on the original)
220

INDEPENDENT AUDITORS’ REPORT
221

Consolidated
Financial
Statements

Consolidated Balance Sheet
ASSET ITEMS (figures in thousand euro) 31.12.2012 31.12.2011
10. Cash and cash equivalents 641,608 625,835
20. Financial assets held for trading 4,023,934 2,872,417
30. Financial assets designated at fair value 200,441 126,174
40. Available-for-sale financial assets 14,000,609 8,039,709
50. Held-to-maturity investments 3,158,013 -
60. Loans and advances to banks 6,072,346 6,184,000
70. Loans and advances to customers 92,887,969 99,689,770
80. Hedging derivatives 1,478,322 1,090,498
90. Fair value change in hedged financial assets 885,997 704,869
100. Equity investments 442,491 352,983
120. Property, plant and equipment 1,967,197 2,045,535
130. Intangible assets 2,964,882 2,987,669
of which:
goodwill 2,536,574 2,538,668
140. Tax assets: 2,628,121 2,817,870
a) current 616,684 459,282
b) deferred 2,011,437 2,358,588
- of which pursuant to Law No. 214/2011 1,451,279 1,428,849
150. Non current assets and disposal groups held for sale 21,382 22,020
160. Other assets 1,060,390 2,244,343
Total assets 132,433,702 129,803,692
Table 1: 100O|1 - NOTA1
ai “Criteri di redazione” .
LIABILITIES AND EQUITY (figures in thousand euro) 31.12.2012 31.12.2011
10. Due to banks 15,211,171 9,772,281
20. Due to customers 53,758,407 54,431,291
30. Debt securities issued 45,059,153 48,377,363
40. Financial liabilities held for trading 1,773,874 1,063,673
60. Hedging derivatives 2,234,988 1,739,685
80. Tax liabilities: 666,364 702,026
a) current 317,506 383,364
b) deferred 348,858 318,662
100. Other liabilities 2,391,283 3,139,616
110. Post employment benefits 420,704 394,025
120. Provisions for risks and charges: 340,589 345,785
a) pension and similar obligations 80,563 76,460
b) other provisions 260,026 269,325
140. Valuation reserves (571,045) (1,315,865)
170. Reserves 3,259,365 2,416,471
180. Share premiums 4,716,861 7,429,913
190. Share capital 2,254,368 2,254,367
200. Treasury shares (4,375) (4,375)
210. Non-controlling interests 839,287 898,924
220. Profit (loss) for the year 82,708 (1,841,488)
Total liabilities and equity 132,433,702 129,803,692 ldi di
confronto al 31 dicembre 2006 si riferiscono al solo ex Gruppo BPU Banca.ai “Criteri di redazione” .
225

Consolidated Income Statement
figures in thousands of euro
2012 2011
10. Interest and similar income 3,924,400 4,047,546
20. Interest expense and similar (1,992,716) (1,925,857)
30. Net interest income 1,931,684 2,121,689
40. Fee and commission income 1,369,422 1,351,827
50. Fee and commission expense (187,616) (159,893)
60. Net fee and commission income 1,181,806 1,191,934
70. Dividends and similar income 15,591 19,997
80. Net trading income 91,803 10,711
90. Net hedging income 1,072 8,938
100. Income from disposal or repurchase of: 163,551 26,529
a) loans and receivables (2,131) 2,464
b) available-for-sale financial assets 141,556 11,929
d) financial liabilities 24,126 12,136
110. Net income (loss) on financial assets and liabilities designated at fair value 852 (38,849)
120. Gross income 3,386,359 3,340,949
130. Net impairment losses on: (902,024) (742,221)
a) loans and receivables (847,214) (607,078)
b) available-for-sale financial assets (56,145) (128,182)
d) other financial transactions 1,335 (6,961)
140. Net financial income 2,484,335 2,598,728
170. Net income from banking and insurance operations 2,484,335 2,598,728
180. Administrative expenses (2,384,023) (2,304,249)
a) staff costs (1,525,753) (1,423,196)
b) other administrative expenses (858,270) (881,053)
190. Net provisions for risks and charges (49,212) (31,595)
200. Net impairment losses on property, plant and equipment (102,543) (110,888)
210. Net impairment losses on intangible assets (81,117) (672,608)
220. Other net operating income/(expense) 244,515 243,065
230. Operating expenses (2,372,380) (2,876,275)
240. Profits of equity investments 52,650 10,248
260. Net impairment losses on goodwill - (1,873,849)
270. Profits on disposal of investments 6,490 6,818
280. Pre-tax profit (loss) from continuing operations 171,095 (2,134,330)
290. Taxes on income for the year from continuing operations (79,429) 271,991
300. Post-tax profit (loss) from continuing operations 91,666 (1,862,339)
310. Post-tax profit from discontinued operations - 248
320. Profit (loss) for the year 91,666 (1,862,091)
330. (Profit) loss attributable to non-controlling interests (8,958) 20,603
340. Profit (loss) for the year attributable to the Parent 82,708 (1,841,488)
In considerazione dell’allineamento delle prassi contabili resesi necessarie a seguito della fusione tra gli ex Gruppi BPU e
Bana Lombarda, nonché della variazione del principio contabile relativo ai piani a benefici definiti per i dipendenti, i
rispetto a quelli già pubosito si rimanda a quanto I
Iesposto nella sezione relativa ai “Criteri di redazione” .
icembre 2006 si riferiscono al solo ex Gruppo BPU Banca.
226

Consolidated statement of comprehensive income
Fig u re s in th o u s a n d s o f e u ro 2012 2011
10. PROFIT (LOSS) FOR THE YEAR 91,666 (1,862,091)
Other comprehensive income net of taxes
20. Available-for-sale financial assets 708,764 (981,503)
60. Cash flow hedges (1,849) (2,694)
90. Actuarial gains (losses) on defined benefit plans (33,942) (21,435)
100. Share of valuation reserves of equity-accounted investees 90,169 (62,742)
110. Total other comprehensive income (loss) net of taxes 763,142 (1,068,374)
120. TOTAL COM PREHENSIVE INCOM E (LOSS) (item 10 + 110) 854,808 (2,930,465)
CONSOLIDATED COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NON-
130.
130.
CONTROLLING INTERESTS 14,983 (27,256)
CONSOLIDATED COM PREHENSIVE INCOM E (LOSS) ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT 839,825 (2,903,209)
227

Statement of Changes in Consolidated Equity
• to 31/12/2012
(figures in thousands of euro)
Changes during the year
Allocation of prior year
Balances as at 31/12/2011
Restatement of opening balances
profit
Equity transactions
Balances as at 01/01/2012
Reserves
Dividends and other uses
Changes in reserves
New share issues
Repurchase of treasury shares
Extraordinary distribution of
dividends
Change in equity instruments
Derivatives on treasury shares
Stock options
Consolidated comprehensive income
Equity as at 31/12/2012
Equity attributable to the shareholders
of the Parent as at 31/12/2012
Equity attributable to non-controlling
interests as at 31/12/2012
Share capital: 2,758,122 - 2,758,122 - - 6,772 1 - - - - - - 2,764,895 2,254,368 510,527
a) ordinary shares 2,722,032 - 2,722,032 - - (2,245) 1 - - - - - - 2,719,788 2,254,368 465,420
b) other shares 36,090 - 36,090 - - 9,017 - - - - - - - 45,107 - 45,107
Share premiums 7,506,086 - 7,506,086 (2,713,054) (20,320) 2 - - - - - 4,772,714 4,716,861 55,853
Reserves 2,734,888 - 2,734,888 850,963 (87,122) 28,515 - - - - - - 3,527,244 3,259,365 267,879
Valuation reserves (1,294,683) - (1,294,683) - - (43,434) - - - - - - 763,142 (574,975) (571,045) (3,930)
Equity instruments - - - - - - - - - - - - - - - -
Treasury shares (4,375) - (4,375) - - - - - - - - - - (4,375) (4,375) -
Profit for the year (1,862,091) - (1,862,091) 1,862,091 - - - - - - - 91,666 91,666 82,708 8,958
Equity: 9,837,947 - 9,837,947 - (87,122) (28,467) 3 - - - - - 854,808 10,577,169 9,737,882 839,287
- attributable to shareholders
of the Parent 8,939,023 - 8,939,023 - (51,691) 10,722 3 - - - - - 839,825 9,737,882 X X
- attributable to noncontrolling
interests 898,924 - 898,924 - (35,431) (39,189) - - - - - - 14,983 839,287 X X
The figures presented in this statement of changes in equity correspond to those reported in Table B.1 (Consolidated equity by type of company)
contained in Part F of the Notes to the Financial Statements.
Details of valuation reserves:
31-Dec-11 31-Dec-11 31-Dec-12 31-Dec-12
Shareholder
s of Parent
Noncontrolling
interests
Shareholder
s of Parent
Noncontrolling
interests
a) available-for-sale
b) cash flow hedge
c) foreign currency differences
d) actuarial gains/losses
e) special revaluation laws
-1,350,979 -9,115 -561,244 83
-3,217 -128 -4,937 -257
-243 0 -243 0
-34,155 -3,482 -65,053 -6,526
72,729 33,907 60,432 2,770
-1,315,865 21,182 -571,045 -3,930
228

(figures in thousands of euro)
• to 31/12/2011
Balances as at 31/12/2010
Restatement of opening balances
Balances as at 01/01/2011
Allocation of prior year
Reserves
profit
Dividends and other uses
Changes in reserves
Share capital: 2,112,552 - 2,112,552 - - (10,932) 656,502 - - - - - - 2,758,122 2,254,367 503,755
a) ordinary shares 2,076,462 - 2,076,462 - - (10,932) 656,502 - - - - - - 2,722,032 2,254,367 467,665
b) other shares 36,090 - 36,090 - - - - - - - - - - 36,090 - 36,090
Share premiums 7,179,155 - 7,179,155 - (2,604) 329,535 - - - - - 7,506,086 7,429,913 76,173
Reserves 2,690,200 - 2,690,200 69,885 - (25,197) - - - - - - 2,734,888 2,416,471 318,417
Valuation reserves (225,851) - (225,851) - - (458) - - - - - - (1,068,374) (1,294,683) (1,315,865) 21,182
Equity instruments - - - - - - - - - - - - - - - -
T reasury shares - - - - - - - (4,375) - - - - - (4,375) (4,375) -
P rofit for the year 185,723 - 185,723 (69,885) (115,838) - - - - - - (1,862,091) (1,862,091) (1,841,488) (20,603)
Equity: 11,941,779 - 11,941,779 - (115,838) (39,191) 986,037 (4,375) - - - - (2,930,465) 9,837,947 8,939,023 898,924
- attributable to shareholders
of
the Parent 10,979,019 - 10,979,019 - (102,236) (16,213) 986,037 (4,375) - - - - (2,903,209) 8,939,023 X X
- attributable to noncontrolling
interests 962,760 - 962,760 - (13,602) (22,978) - - - - - - (27,256) 898,924 X X
New share issues
Changes during the year
Equity transactions
Repurchase of treasury shares
Extraordinary distribution of
dividends
Change in equity instruments
Derivatives on treasury shares
Stock options
Consolidated comprehensive income
Equity as at 31/12/2011
Equity attributable to the shareholders
of the Parent as at 31/12/2011
Equity attributable to non-controlling
interests as at 31/12/2011
T he figures presented in this statement of changes in equity correspond to those reported in Table B.1 (Consolidated equity by type of company)
contained in Part F of the Notes to the Financial Statements.
Details of valuation reserves:
31-Dec-10 31-Dec-10 31-Dec-11 31-Dec-11
Shareholders
of Parent
Noncontrolling
interests
Shareholders
of Parent
Noncontrolling
interests
a) available-for-sale
b) cash flow hedge
c) foreign currency differences
d) actuarial gains/losses
e) special revaluation law s
-311,493 -4,355 -1,350,979 -9,115
-619 -32 -3,217 -128
-243 0 -243 0
-14,518 -1,684 -34,155 -3,482
73,146 33,947 72,729 33,907
-253,727 27,876 -1,315,865 21,182
229

Consolidated Statement of Cash Flows (Indirect method)
Figures in thousands of euro 31.12.2012 31.12.2011
A. OP ERATING ACTIVITIES
1. Ordina ry a c tivitie s 9 8 2 ,8 0 8 6 5 4 ,17 7
- profit (loss) for the yea r (+/-) 91,666 (1,862,091)
- gains/losses on financial a ssets held for trading and on financial a ssets/liabilities at fair value (-/+) (92,655) 28,138
- gains/losses on hedging activities (-/+) (1,072) (8,938)
- net impa irment losses on loans (+/-) 902,024 742,221
- net impa irment losses on property, plant a nd equipme nt and intangible a ssets (+/-) 183,660 2,657,343
- net provisions for risks and charges and other expense/income (+/-) 49,212 31,595
- net premiums not received (-) - -
- other insurance income/expense not rec eived (+/-) - -
- outstanding taxes and duties (+) (74,799) (860,402)
- net impa irment losses on disposal groups held for sale after tax (+/-) - -
- other adjustments (+/-) (75,228) (73,689)
2 . Ne t c a s h flo ws fro m/us e d by fina nc ia l a s s e ts 4 5 4 ,5 7 2 (3 ,0 15 ,4 6 6 )
- financial assets held for trading (1,138,754) (128,955)
- financial assets a t fair va lue 4,443 (18,919)
- a vailable-for-sale financial assets (4,848,205) 2,084,728
- loans to banks: repa yable on de mand - -
- loans to banks: othe r loa ns 111,654 (4,065,648)
- loans to customers 5,954,587 1,495,981
- other assets 370,847 (2,382,653)
3 . Ne t c a s h flo ws fro m/us e d by fina nc ia l lia bilitie s 1,8 7 7 ,0 3 3 1,6 0 8 ,7 2 3
- a mounts due to banks re payable on demand - -
- a mounts due to banks: other payables 5,438,890 4,388,304
- due to customers (672,884) (4,234,866)
- debt securities issued (3,318,210) 283,475
- financial liabilities held for trading 710,201 109,250
- financial liabilities designated at fair value - -
- other liabilities (280,964) 1,062,560
Ne t c a s h flo ws fro m/us e d in o pe ra ting a c tivitie s 3 ,3 14 ,4 13 (7 5 2 ,5 6 6 )
B. INVES TING ACTIVITIES
1. Ca s h flo ws g e ne ra te d by 7 0 ,16 1 3 9 ,4 2 9
- disposals of equity investments 50,588 2,704
- dividends received on equity inve stments 15,591 19,997
- disposals of held-to-maturity investments - -
- disposals of property, plant and equipment 1,569 9,662
- disposals of intangible assets 2,413 -
- disposals of lines of businesses - 7,066
2 . Ca s h flo ws us e d in (3 ,2 8 1,6 8 2 ) (14 9 ,4 9 4 )
- purchases of equity investme nts - (36,000)
- purchases of held-to-maturity investments (3,188,072) -
- purchases of property, plant and equipme nt (32,724) (48,992)
- purchases of inta ngible assets (60,886) (64,502)
- purchases of lines of business - -
Ne t c a s h flo ws fro m/us e d in inve s ting a c tivitie s (3 ,2 11,5 2 1) (110 ,0 6 5 )
C. FINANCING ACTIVITIES - -
- issues/repurchases of treasury shares 3 981,662
- issues/purchases of equity instruments - -
- distribution of divide nds and othe r uses (87,122) (102,236)
Ne t c a s h flo ws fro m/us e d in fina nc ing a c tivitie s (8 7 ,119 ) 8 7 9 ,4 2 6
CAS H FLOWS GENERATED/US ED DURING THE YEAR 15 ,7 7 3 16 ,7 9 5
Ke y: (+) gene rated (-) absorbed
230

Reconciliation
Figures in thousands of euro 31.12.2012 31.12.2011
Cash and cash equivalents at beginning of year 625,835 609,040
Total net cash flows generated/used during the year 15,773 16,795
Cash and cash equivalents at end of year 641,608 625,835
231

PART A – Accounting policies
A.1 – General Part
A.2 – The main items in the financial statements
A.3 – Information on F.V.
PART B – Notes to the consolidated balance sheet
Assets
Liabilities
Other information
PART C – Notes to the consolidated income statement
PART D – Consolidated statement of comprehensive
income
PART E – Information on risks and the relative
hedging policies
Notes to the
Consolidated
Financial
Statements
PART F – Information on consolidated equity
PART G – Business combination transactions
concerning companies or lines of business
PART H – Transactions with related parties
PART I – Share based payments
PART L – Segment Reporting
232

Part A – Accounting policies
A.1 – GENERAL PART
Section 1 Statement of compliance with IFRS
This consolidated financial report of Unione di Banche Italiane has been prepared in
compliance with the international financial reporting standards (IFRS) issued by the
International Accounting Standards Board (IASB) and with the relative interpretations of the
International Financial Reporting Interpretations Committee (IFRIC) 1 as endorsed by the
European Commission and in force as at 31 st December 2012, implemented in Italian law by
Legislative Decree No. 38/2005, which exercised the option under EC Regulation 1606/2002
concerning international accounting standards. No exceptions have been made in the
application of IFRS international accounting standards.
The consolidated financial statements, containing the balance sheet, income statement,
statement of comprehensive income, statement of cash flows, statement of changes in equity,
notes to the financial statements, accompanied by the consolidated management report,
include the Parent UBI Banca S.c.p.A. and its subsidiaries included in the scope of
consolidation. They have been prepared on the basis of the positions of the single companies
included in the consolidation, corresponding to the relative individual company financial
statements, examined and approved by their respective governing bodies and appropriately
modified and reclassified, where necessary, for compliance with the accounting policies
adopted by the Group.
The proposed consolidated annual financial statements approved by the Management Board
on 12 th March 2013 and submitted to the Supervisory Board for approval on 27 th March 2013,
contain a statement by the Chief Executive Officer and the Senior Officer Responsible
pursuant to Art. 154 bis of Legislative Decree No. 58/1998 and they have been subjected to
audit by the independent auditors Deloitte & Touche S.p.A.
Section 2 Basis of preparation
These financial statements have been prepared in accordance with measurement criteria
adopted on the basis of a going concern assumption and in compliance with the accrual
accounting principles, the relevance of the information and the predominance of substance
over form.
The financial statements have been clearly stated and give a true and fair view of the capital
and financial position, the result for the year, the changes in equity and the cash flows.
Unless otherwise indicated, the information contained in this annual report is expressed in
euro as the accounting currency and the financial information, the balance sheet and income
statement, the notes and comments and the explanatory tables are presented in thousands of
euro. The relative rounding of the figures has been performed on the basis of Bank of Italy
instructions.
The mandatory financial statements used in this annual report comply with those defined in
Bank of Italy Circular No. 262/2005 and subsequent amendments and additions. In addition
to information on the accounts as at and for the period ended 31 st December 2012, they also
provide the same comparative information as at and for the year ended 31 st December 2012
(which did not require adjustments with respect to the figures published in those financial
statements) and they do not include items for which there was no data for the current and the
previous year.
1
See the “List of IAS/IFRS standards endorsed by the European Commission”. The standards listed there and the
relative interpretations are applied on the basis of events occurring that are disciplined by them from the date on
which their application becomes compulsory, unless specified otherwise.
233

For the purposes of preparing this report, the Bank complied with the provisions indicated in
the following “addendum” letters issued by the Bank of Italy, with which the supervisory body
provided replies to requests for clarifications received and also required further reporting
obligations:
letter No. 0125853/12 of 10 th February 2012;
letter No. 0204858/12 of 7 th March 2012;
letter No. 0263122/12 of 23 rd March 2012;
letter No. 0677311/12 of 7 th August 2012;
letter No. 046586/13 of 15 th January 2013.
With particular reference to the provisions contained in letter No. 0677311/12 of 7 th August
2012 on the question of contingent assets, in compliance with the provisions of IAS 37, as in
previous years, the UBI Group has assessed the possible risk of losing legal cases for which
payment must be made to the tax authorities as a result of a temporary payment order, by
recognising sums within provisions for risks and charges within the balance sheet liability
item 120 “Provisions for risks and charges”, thereby not considering the contra entry for the
payments as contingent assets, as defined by the accounting standard mentioned.
This interpretation is based, amongst other things, on the grounds that following the tax
collection reform 2 , the receipt of a payment order is an “automatic” occurrence, which
generates an obligation to pay regardless of whether the tax claim is valid, and therefore has
no bearing in itself on the assessment made of the risk. As a consequence, in preparing these
financial statements, the contra entry for the sums paid temporarily are considered as a
cautionary deposit recognised in the balance sheet within asset item 160 “Other assets”,
unless that payment is made for a liability which is considered probable. In this case it is
recognised in the income statement within the item 190 “Net provisions for risks and charges”
or as use of the provision for risks and charges where provision has already been made.
To complete the information, account was also taken of the following documents in the
preparation of this separate annual report:
joint document No. 5 issued by the Bank of Italy/Consob/Isvap on 15 th May 2012 on the
accounting treatment for tax assets resulting from Law No. 214/2011;
the ESMA 3 document of 12 th November 2012, “European common enforcement priorities
for 2012 financial statements”, designed to promote uniform application of IFRS by
identifying subjects considered particularly significant for the financial statements of
listed European companies, in consideration, amongst other things, of current market
conditions.
2
The reference is to Art. 29 of Decree Law No. 78/2010.
3
European Securities Market Authority.
234

Accounting policies
The accounting policies contained in Part A.2 concerning the classification, measurement and
derecognition stages are the same as those adopted for the preparation of the 2011 annual
financial statements except for possible changes reported under “Other aspects”.
Where it is impossible to measure items in the financial statements with precision, the
application of those policies involves the use of estimates and assumptions which may even
have a significant effect on the amounts recognised in the balance sheet and in the income
statement.
The use of reasonable estimates forms an essential part of the preparation of financial
statements and we have listed here those items in the financial statements in which the use of
estimates and assumptions is most significant:
measurement of loans and receivables;
measurement of financial assets not listed on active markets;
measurement of indefinite useful life intangible assets and equity investments;
quantification of provisions for risks and charges;
quantification of deferred taxes;
definition of the depreciation and amortisation charges for property, plant and
equipment and intangible assets with finite useful lives;
valuation of the provision for post-employment benefits.
An adjustment may be made to an estimate following a change in the circumstances on which
it was based or if new information is acquired or yet again on the basis of greater experience. A
change in an estimate is applied prospectively and it therefore generates an impact on the
income statement in the year in which it is made and, if it is the case, also in future years.
No changes were made in 2012 to the criteria previously employed for estimates in the
financial statements as at and for the year ended 31 st December 2011.
The following is reported with regard to changes in IFRS accounting standards.
International accounting standards in force from 2012
In 2012 the application of EU Regulation No. 1205/2011 became compulsory. This amended
IFRS 7 “Financial instruments: disclosures” with particular regard to disclosures relating to
transfers of financial assets. These amendments, which were concretely applied in the
preparation of the financial statements as at and for the period ended 31 st December 2012,
only have an impact in terms of additional disclosures in financial reports.
International accounting standards application of which is compulsory after the 2012
annual report
In 2012, on conclusion of the “endorsement” process for international financial standards by
the European Commission, the following EU regulations were issued:
1. Regulation EU 475/2012 4 :
makes amendments to IAS 1 “Presentation of financial statements” with regard to the
“statement of comprehensive income”, the items of which were divided into:
items which will be transferred subsequently to the income statement (e.g. the cash
flow hedge reserve and the available-for-sale fair value reserve); and
items which will not be transferred to the income statement (e.g. reserve for
actuarial gains and losses on post employment benefit plans);
basically introduces a new version of IAS 19 “Employee benefits”, which, amongst other
things, involves the elimination of the “corridor method” to account for actuarial gains
and losses, changes to the method for calculating interest on plan assets, recognition of
the “service cost” and the introduction of new disclosure requirements;
2. Regulation EU 1254/2012 5 :
4
Application of the relative provisions is compulsory from 1/1/2013.
235

introduces IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint arrangements”
and IFRS 12 “Disclosure of interests in other entities”; and
amends IAS 27 “Consolidated and separate financial statements” and IAS 28
“Investments in associates”.
It introduces changes to the rules for the preparation of and compulsory disclosures for
consolidated and separate financial statements.
3. Regulation EU 1255/2012 6 :
introduces accounting standard IFRS 13 “Fair value measurement” applicable to assets
and liabilities to be measured at fair value (apart from some specific exceptions
provided for in application of the standard 7 ) or in other words balance sheet disclosures
on their fair value. The standard represents a common guide for all fair value items in
compliance with the provisions of IFRS. It introduces a standard framework for the
procedures by which fair value must be measured and it requires further disclosures
with respect to the provisions already contained in other accounting standards;
amends IAS 12 “Income taxes” by introducing an exception to the measurement
principle set by IAS 12 regarding deferred taxes in the form of relative presumption, by
which the accounting value of an investment property (i.e. former IAS 40 properties)
measured on a fair value basis would be recovered by its sale. Consequently an entity
would be required to make use of the tax rate applicable to the sale of the asset in
question;
amends FRS 1 “First-time adoption of international financial reporting standards”;
introduces IFRIC 20 “Stripping costs in the production phase of a surface mine”.
4. Regulation EU 1256/2012:
amends IFRS 7 “Financial instruments: disclosures” 8 concerning disclosures on
offsetting financial assets and liabilities with particular regard to:
all financial instruments subject to offsetting according to IAS 32;
those financial instruments which are subject to “master netting arrangements” –
or similar arrangements – in order to be able to indicate the impacts, or potential
impacts, to users of them on the financial position of the entity;
amends IAS 32 “Financial instruments: presentation” 9 in order to provide additional
guidelines to reduce inconsistencies in the practical application of the standard on the
question of offsetting financial assets and liabilities.
Finally, Regulation EU 183/2013, which was issued on 5 th March 2013, makes amendments
to IFRS 1 “First time adoption of International Financial Reporting Standards” 10 on exemptions
granted to new adopters of IFRS on the subject of government loans granted at below market
interest rates.
For full information with regard to the adoption of new accounting standards and
amendments for which application is compulsory from 1/1/2013, it is considered that these
should not have any significant impacts on the financial statements of the Group. More
specifically, with regard to the estimate of the impacts of the adoption of the new version of
IAS 19, information is given in Section 12 of Part B of these notes to the financial statements,
which may be consulted.
Amendments to IAS 39
The process of the full revision of IAS 39, is still in progress and at present no documents
issued by the IASB have been endorsed by the European Commission. As already reported
with regard to the compulsory adoption of the new accounting rules, on 16 th December 2011
the IASB issued the amendment “Mandatory Effective Date of IFRS 9 and Transition
5
Application of the relative provisions is compulsory from 1/1/2014.
6
Application of the relative provisions is compulsory from 1/1/2013.
7
For example, the provisions of IFRS 13 do not apply to share-based payments (IFRS 2), to lease transactions (IAS 17)
and to similar fair value measurements (such as, for example, the net realisable value of inventories according to IAS 2
and the value in use in IAS 36).
8
Application of the relative provisions is compulsory from 1/1/2013.
9
Application of the relative provisions is compulsory from 1/1/2014.
10
Application of the relative provisions is compulsory from 1/1/2013.
236

Disclosures”, which postponed the date in question until 1 st January 2015. We report the
following with regard to the three phases of the project:
Phase 1 – Classification and Measurement
An exposure draft was published in December 2012 which involves limited amendments to the
previous versions of the standard, issued in November 2009 and October 2010 respectively.
The exposure draft proposes the introduction of a third classification for financial assets – fair
value-OCI – for debt instruments which a company may hold with both the intention to receive
contracted cash flows from them and also the intention of selling them.
Phase 2 – Impairment methodology
Publication of a new exposure draft is expected in the first quarter of 2013 on the basis of the
analyses and decisions taken by the IASB following the publication of a supplementary
document in January 2011. This impairment methodology should be applied to all financial
assets measured at amortised cost, to financial assets which will be recognised in the new fair
value-OCI class and to commitments to make payments and to financial guarantees not
measured at fair value through profit or loss.
Phase 3 – Hedge Accounting
On 7 th September 2012, following the consultation process to which the exposure draft issued
in December 2010 was subject, a “staff draft” was published on general hedge accounting, the
provisions of which were basically designed both to align accounting treatments with risk
management approaches and to introduce a standard that is more focused on the objective to
be achieved using hedges and on the procedures for achieving that objective.
In short, the changes presented by the staff draft can be summarised as follows:
elimination of the compulsory nature of quantitative tests for effectiveness in favour of
the choice by entities of a qualitative rather than a quantitative method, which is then
applied constantly on the basis of what is considered most appropriate to capture the
most important aspects of a hedge (and also the underlying reasons for its
ineffectiveness);
the need, in the event of ineffectiveness, to rebalance the relations of a hedge by acting
on the item hedged or on the hedging instrument if the risk management strategy which
established the hedge is unchanged, instead of discontinuing the hedge;
the possibility of hedging net positions.
For full information we report that the publication of a discussion paper is expected in 2013
on “Macro hedge accounting”, a subject with the IASB intends to address in a separate issue,
subsequent to the entire project from which the new IFRS 9 will be triggered.
237

SECTION 3 Consolidation scope and methods
The consolidated financial statements include the financial and operating results of UBI Banca
Scpa and the companies either directly or indirectly controlled by it, including within the
scope of the consolidation also those companies which operate in sectors different from that to
which the Parent belongs and the special purpose entities, when the conditions of effective
control exist, even in the absence of an equity stake, but in relation to what is termed
“business”.
The following principal changes occurred in the composition of the consolidation as compared
with the situation as at 31 st December 2011.
Changes in the consolidation scope
- the formation, on 19 th April 2012, of three new special purpose entities: UBI SPV BBS
Srl , UBI SPV BPCI Srl and UBI SPV BPA Srl;
- the establishment, on 2 nd July 2012, of UBI Academy Scrl, a consortium company for
the managerial training and development of staff who work in the UBI Banca Group;
- the procedures were completed on 3 rd September 2012 resulting from the exercise of
the right of withdrawal of all the shares held in Arca SGR S.p.A.. The company has
been excluded from the consolidation since that date;
- on 25 th October 2012, the procedure for the liquidation of the company Barberini Sa
was completed. The company has been excluded from the consolidation since that
date;
- the disposal of the company UBI Insurance Broker S.p.A. was completed on 21 st
December 2012. Since the UBI Banca Group continued to manage the company until
the end of the year, the consolidated income statement contains the income statement
items relating to the company disposed of.
The following extraordinary transactions were recorded as taking place within the Group in
2012.
- the merger of Banco di San Giorgio S.p.A. into Banca Regionale Europea S.p.A;
- the merger of Banca 24-7 into UBI Banca Scpa;
- the merger of Società Italiana Leasing e Finanziamenti S.p.a (SILF) into UBI Banca;
- the merger of Investnet International S.p.A. into IW Bank S.p.A.
A series of transactions to purchase shares or subscribe share issuances also took place,
which resulted in changes in the percentage shareholdings of some Group companies. These
transactions did not determine changes in the consolidation methods.
Further information on the changes described above is given in the section “The consolidation
scope” contained in the Management Report, which may be consulted.
With regard to the consolidation methods used, companies subject to control are consolidated
using the line-by-line method, those subject to joint control are proportionately consolidated,
while those interests over which the Group exercises significant influence are measured using
the equity method.
The line-by-line consolidation method
Subsidiaries subject to control are consolidated using the full line-by-line method. The concept
of control goes beyond a majority percentage interest in the share capital of the company
invested in and is defined as the power to determine the financial and operating policies of the
entity in question for the purpose of obtaining the benefits from its activities.
The line-by-line consolidation method involves summing the items of the income statements
and balance sheets of subsidiaries on a line-by-line basis. The following adjustments are made
for this purpose:
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(a) the carrying amounts of the subsidiaries held by the Parent and the corresponding part of
the equity are eliminated;
(b) the proportion of equity and of profit or loss for the year attributable to other shareholders
is stated under a separate item.
If the results of the above adjustments are positive, then they are recognised (after first
allocating them if possible to the assets or liabilities of the subsidiary) as goodwill within item
130 “Intangible assets” on the date of the first consolidation, if the necessary conditions apply.
If the resulting differences are negative they are normally charged to the income statement.
Intragroup balances and transactions, including revenues, costs and dividends are completely
eliminated.
The operating results of a subsidiary that is acquired during the period are included in the
consolidated balance sheet starting from the date on which it is acquired Similarly, the
operating results of a subsidiary that is disposed of are included in the consolidated balance
sheet until the date on which control over the company is released.
The accounts used in the preparation of consolidated financial statements are stated as of the
same date.
The consolidated financial statements have been prepared using uniform accounting policies
for like transactions and events.
If a subsidiary uses different accounting policies from those employed in the consolidated
financial statements for like transactions and other events in similar circumstances,
adjustments are made to its accounts for the purposes of the consolidation.
The proportionate method
An equity investment is considered as subject to joint control even in the absence of equal
voting rights, if control over the operating activities and strategic policies of the company
invested in is shared with others on the basis of contractual agreements.
For these companies IAS 31 allows the possibility of consolidation according to the
proportional method or, alternatively, by adopting the simpler equity method.
As at 31 st December 2012, no investments had been comsolidated using the proportional
method.
The equity method
Equity investments over which the Group exercises significant influence, which is the power to
participate in the financial and operating policy decisions but not to control or have joint
control over them are measured using the equity method.
Under this method an equity investment is initially recorded at cost and the carrying amount
is increased or decreased to reflect the investor's share of the profit or loss of the associate
after the acquisition date. The proportion of the profit or loss for the year made by the investee
attributable to the investor is stated in the income statement of the latter. Dividends received
from an investee reduce the carrying value of the investment; adjustments to the carrying
amount may also be required arising from a change in the portion of the investee's equity
attributable to the investor that have not been recognised in the income statement. These
changes include changes arising from the revaluation of property, plant and equipment from
exchange rate differences on items in foreign currency. The portion of those changes
attributable to the investor are recorded directly in its equity.
Where potential voting rights exist, the investor's share of profit or loss of the investee and of
changes in the investee's equity is determined on the basis of present ownership interests and
does not reflect the possible exercise or conversion of potential voting rights.
Where the investee incurs continued losses, if these exceed the carrying value of the investee,
the carrying value is written off and further losses are only recognised if the investor has
contracted legal or implicit obligations or has made payments on behalf of the investee. If the
investee subsequently realises a profit, the investor resumes recognition of its share of the
profits only after reaching the share of the profit which was previously not recognised.
For the purposes of consolidating investments in associates, the figures from the financial
statements prepared and approved by the boards of directors of the individual companies are
used. Where accounts prepared according to international standards are not available those
239

prepared according to national accounting standards are used after first verifying that there
are no significant differences.
The consolidating entity ceases use of the equity method from the date on which it ceases to
exercise significant influence over the associate and the investment is classified within either
“financial assets held for trading” or “available-for-sale financial assets”, according to the case,
starting from that date on condition that the associate does not become a subsidiary or
subject to joint control.
240

1. Equity investments in companies subject to exclusive control and to joint control (proportionately consolidated)
D e ta ils o f inv e s tm e nt
N a m e
He a dqua rte rs
S ha re c a pita l
% o f v o te s
Inv e s ting c o m pa ny
% he ld
A .1 Line -by-line c o ns o lida te d c o m pa nie s
1. Unio ne di Banche Italiane Scpa - UBI Ba nca Bergamo
P A R ENT
2. 24-7 Fina nce Srl Bre s cia e uro 10,000 4 UB I B anca Scpa 10.000% 10.000%
3. Albenza 3 Srl Milan e uro 10,000 4 X X X
4. UBI Ca pital Singapo re P te Ltd Singapo re Singapo re do llars 10,600,000 1 UB I B anca Internatio na l Sa 100.000% 100.000%
5. B anca Carime Spa Co s enza euro 1,468,208,505.92 1 UB I B anca Scpa 92.837% 92.837%
6. B anca di Va lle C amo nic a Spa Bre no (BS) euro 2,738,693 1 UB I B anca Scpa 74.244% 82.960%
Banc o di B res c ia Spa 8.716%
7. B anca Lo mba rda P refe rre d Capital Co mpa ny LLC Delaware (USA) euro 1,000 1 UB I B anca Scpa 100.000% 100.000%
8. B anca Lo mba rda P refe rre d Securities Trus t Delaware (USA) euro 1,000 1 UB I B anca Scpa 100.000% 100.000%
9. B anca P o po lare Co mmercio e Indus tria Ca pital Trus t Delaware (USA) euro 1,000 1 BP CI Funding Llc - USA 100.000% 100.000%
10. Banc a P o po lare Co mme rcio e Indus tria Funding LLC Delaware (USA) euro 1,000,000 1 UB I B anca Scpa 100.000% 100.000%
11. Banca P o po lare C o mmercio e Indus tria Spa Milan euro 934,150,467.60 1 UB I B anca Scpa 75.077% 75.077%
12. Banc a P o po lare di Anco na Spa J es i ( AN) euro 147,301,670.32 1 UB I B anca Scpa 92.971% 92.971%
13. Banc a P o po lare di B erga mo Spa Bergamo e uro 1,350,514.252 1 UB I B anca Scpa 100.000% 100.000%
14. Banc a Regio na le Euro pea Spa Cune o e uro 587,892,824.35 1 UB I B anca Scpa 74.716% 75.800%
15. Banc o di B res c ia Spa Bre s cia euro 615,632,230.88 1 UB I B anca Scpa 100.000% 100.000%
16. Banque de Depo ts e t de Ge s tio n Sa Laus anne (Switzerland) Swis s fra ncs 10,000,000 1 UB I B anca Scpa 100.000% 100.000%
17. BP B Ca pital Trus t Delaware (USA) euro 1,000 1 BP B Funding Llc - USA 100.000% 100.000%
18. BP B Funding LLC Delaware (USA) euro 1,000,000 1 UB I B anca Scpa 100.000% 100.000%
19. BP B Immo biliare Srl Bergamo euro 185,680,000 1 UB I B anca Scpa 100.000% 100.000%
20. Centro banca Spa Milan euro 369,600,000 1 UB I B anca Scpa 94.323% 99.794%
Banc a P o po lare di Anco na Spa 5.471%
21. Centro banca Sviluppo Impre s a SGR Spa Milan euro 2,000,000 1 Centro banca Spa 100.000% 100.000%
22. Co ralis Re nt Srl Milan e uro 400,000 1 UB I B anca Scpa 100.000% 100.000%
23. IW Ba nk Spa Milan euro 18,404,795 1 UB I B anca Scpa 76.236% 100.000%
Centro banca Spa 23.764%
24. Lo mbarda Leas e Finance 4 Srl Bre s cia e uro 10,000 4 UB I B anca Scpa 10.000% 10.000%
25. Orio Finance Nr. 3 P lc Dublin (Ireland) e uro 10,000 4 X X X
26. P res tita lia Spa Bergamo euro 153,997,228 1 UB I B anca Scpa 100.000% 100.000%
27. So cie tà Bres ciana Immo biliare - Mo bilia re SBIM Spa Bre s cia euro 35,000,000 1 UB I B anca Scpa 100.000% 100.000%
28. So cie tà Lo mbarda Immo biliare Srl - SOLIM M Bre s cia euro 100,000 1 UB I B anca Scpa 100.000% 100.000%
29. UB I B anca Internatio na l Sa Luxembo urg euro 70,613,580 1 UB I B anca Scpa 91.196% 100.000%
Banc o di B res c ia Spa 5.483%
Banc a Regio na le Euro pea Spa 0.162%
Banc a P o po lare di B erga mo Spa 3.160%
30. UB I B anca P rivate Inve s tment Spa Bre s cia euro 67,950,000 1 UB I B anca Scpa 100.000% 100.000%
31. UBI Fac to r Spa Milan euro 36,115,820 1 UB I B anca Scpa 100.000% 100.000%
32. UB I Fiduc iaria Spa Bre s cia euro 1,898,000 1 UB I B anca Scpa 100.000% 100.000%
33. UB I Finance Srl Milan e uro 10,000 1 UB I B anca Scpa 60.000% 60.000%
34. UB I Finance 2 Srl Bre s cia e uro 10,000 4 UB I B anca Scpa 10.000% 10.000%
35. UB I Finance 3 Srl Bre s cia e uro 10,000 4 UB I B anca Scpa 10.000% 10.000%
36. UB I Ges tio ni Fiducia rie Sim Spa Bre s cia euro 1,040,000 1 UB I Fiduciaria Spa 100.000% 100.000%
37. UB I Leas e Fina nce 5 Srl Bre s cia e uro 10,000 4 UB I B anca Scpa 10.000% 10.000%
38. UB I Leas ing Spa Bre s cia e uro 241,557,810 1 UB I B anca Scpa 98.993% 98.993%
39. UB I Ma nage me nt Co mpany Sa Luxembo urg euro 125,000 1 UB I P rameric a SGR Spa 100.000% 100.000%
241

40. UBI P ramerica SGR Spa Milan euro 19,955,465 1 UBI Banca Scpa 65.000% 65.000%
41. UBI Sis temi e Servizi Scpa Bres cia euro 36,149,948.64 1 UBI Banca Scpa 70.359% 98.490%
Banca Carime Spa 2.877%
Banca P o po lare Co mmercio e Indus tria Spa 2.877%
Banca P o po lare di Anco na Spa 2.877%
Banca P o po lare di Bergamo Spa 2.877%
Banca Regio nale Euro pea Spa 4.315%
Banco di Bres cia Spa 2.877%
Banca di Valle Camo nica Spa 1.438%
Centro banca Spa 1.438%
UBI Banca P rivate Inves tment Spa 1.438%
UBI P ramerica SGR Spa 1.438%
UBI Facto r Spa 0.719%
IW Bank Spa 2.876%
UBI Academy 0.010%
P res titalia Spa 0.072%
42. UBI Trus tee Sa Luxembo urg euro 250,000 1 UBI Banca Internatio nal Sa 100.000% 100.000%
43. UBI Finance CB 2 Srl Milan euro 10,000 4 UBI Banca Scpa 60.000% 60.000%
44. UBI SP V BBS 2012 Srl Milan euro 10,000 4 UBI Banca Scpa 10.000% 10.000%
45. UBI SP V BP CI 2012 Srl Milan euro 10,000 4 UBI Banca Scpa 10.000% 10.000%
46. UBI SP V BP A 2012 Srl Milan euro 10,000 4 UBI Banca Scpa 10.000% 10.000%
47. UBI Academy Scrl Bergamo euro 100,000 UBI Banca S.c.p.a. 68.500% 100.000%
Banca P o po lare di Bergamo SpA 3.000%
Banco di Bres cia SpA 3.000%
Banca P rivate Inves tment SpA 1.500%
UBI Facto r SpA 1.500%
IW Bank S.p.A. 1.500%
UBI P ramerica SGR S.p.A. 1.500%
Banca Valle Camo nica SpA 1.500%
Banca P o po lare Co mmercio & Indus tria S.p.A. 3.000%
Banca Regio nale Euro pea SpA 3.000%
Banca Carime SpA 3.000%
Banca P o po lare di Anco na SpA 3.000%
UBI Sis temi e Servizi SpA 3.000%
UBI Leas ing SpA 1.500%
P res titalia Spa 1.500%
N a m e He a dqua rte rs S ha re c a pita l
D e ta ils o f inv e s tm e nt
Inv e s ting c o m pa ny
% he ld
% o f v o te s
Key
Type of ownership:
1 = majority of voting rights in ordinary general meetings
2 = dominating influence over ordinary general meetings
3 = agreements with other shareholders
4 = other forms of control
5 = “unitary management” control under Art. 26, paragraph 1, of “Legislative Decree No. 87/92”
6 = “unitary management” control under Art. 26, paragraph 2, of “Legislative Decree No. 87/92
7 = joint control
242

2. Other information
Companies in which no equity investment is held, but for which shares have been received as
pledges are excluded from the scope of the consolidation, in consideration of the purpose of
possession, which is to secure the loan granted and not to exercise control and determine
financial and operating policies in order to obtain the economic benefits deriving from them.
The balance sheet, income statement and statement of cash flows of consolidated companies
which operate with a reference currency other than the euro are translated at the exchange
rate ruling at the end of the year. All the exchange rate differences resulting from the
translation are recognised in a separate reserve in equity. If an investment is disposed of, this
reserve is eliminated with a simultaneous profit or loss in the income statement at the time of
disposal.
International financial reporting standards require the recognition in the financial statements
of corporate events in a manner which reflects the underlying economic substance of them.
No equity investments held directly or indirectly by the Parent with an interest of less than
20%, or for which voting rights below that threshold were held, over which it is considered it
exerted significant influence existed as at the balance sheet date. Furthermore, with the
exception of equity investments held for merchant banking activities classified within item 20
“Financial assets held for trading” and item 30 “Assets designated at fair value”, no equity
investments held directly or indirectly by the Parent Bank with an interest of more than 20%
existed as at the balance sheet date over which it is considered it did not exert significant
influence.
No significant restrictions existed as at the balance sheet date on the capacity of associate
companies to transfer funds to the investing company in payment of dividends or repayment of
loans or advances.
The balance sheet dates of the companies valued according to the equity method were the
same as that of the Parent.
SECTION 4 Subsequent events
With regard to the provisions of IAS 10, between 31 st December 2012, the reporting date, and
28 th March 2013, the date on which the Annual Report was approved by the Management
Board for submission to the Supervisory Board, no events occurred to make adjustments to
the figures presented in the report necessary.
For information purposes, the following events are mentioned:
▪
▪
▪
▪
2 nd January 2013: UBI Banca fully subscribed to the first €300 million tranche of the UBI
Leasing capital increase voted for by a resolution of the extraordinary shareholders’ meeting
of the Company on 30 th November 2012 (see the section “Scope of consolidation” in the
consolidated management report);
9 th January-29th January 2013: during this period the public tender offer was made by IW
Bank on all the outstanding bonds (“IW BANK bonds with Asian call option” - maturity
date 12 th August 2015; “IW BANK bonds with Asian call option 2 nd tranche” – maturity
date 14 th October 2015), in order to delist them. In a measure on 7 th January 2013, Borsa
Italiana excluded them from listing from 6 th March 2013, meaning that IW Bank is no
longer a listed issuer;
6 th February 2013: as already reported in the consolidated management report, which
should be consulted for details, the relevant bodies of Gruppo UBI Banca launched the
project for the merger of Centrobanca into UBI Banca. On 28 th February 2013 the relevant
trade union procedures began;
12 th February 2013: the talks with the trade unions to confirm the redundancy incentive
plan and reduction in working hours and temporary lay-offs from work pursuant to the
framework agreement signed on 29 th November 2012 ended. Given the applications for
voluntary redundancy received, a supplement was signed to the agreement with the trade
unions extending the number of applications from the 650 originally provided for to a total
of 736 within the first quarter of 2013. Based on the higher number of leavers, 43 staff will
be hired alongside the 240 already scheduled for the period from 2013 to 2015 (see the
243

▪
section “Significant events that occurred during the year” in the consolidated management
report, which also includes information about the forecast cost and benefits of the
agreements signed);
28 th February 2013: UBI Banca implemented the board resolution of 28 th April 2012 on the
purchase of own shares for the Group’s top management incentive scheme, buying a total
of 500,000 own shares. The purchases were made at an average price of €3.4911 per share.
The transactions took place on the regulated market in compliance with the limits set by
the shareholders' authorisation, with the provisions of the law including Commission
Regulation (EC) No. 2273/2003 and with permissible market practices. As a result of these
buy-backs, UBI Banca now holds a total of 1,700,000 of its own shares, the equivalent of
approximately 0.19% of its share capital.
Section 5 Other aspects
Impairment losses on available-for-sale equity instruments
The fair valuation of available-for-sale securities in 2012 resulted in recognition of impairment
losses through profit and loss of €56.1 million, in accordance with accounting standard IAS
39.
With regard to shareholdings in particular, for which impairment losses of €36.7 million were
recognised, the main write-downs related to the following shares:
Intesa Sanpaolo €31.8 million;
A2A €3.5 million.
The remaining write-downs totalling €19.4 million were attributable mainly to investments in
O.I.C.R.s (collective investment instruments) held by UBI Banca and in the Fondo
Centrobanca Sviluppo Impresa in particular.
To complete the information, in compliance with the above-mentioned accounting standard,
any reversals of losses are recognised in a separate valuation reserve in equity.
Leaving incentives – Company reorganisation
The plan to revise the organisational structure is described in the section “Significant events
that occurred during the year” in the management report.
As far as the purely accounting-related aspects of the operation are concerned, the procedure
relating to the trade union negotiations ended on 29 th November 2012, with an agreement
containing previsions that basically involve a reduction in staff numbers and recourse to
flexible working hours, reductions in working hours and temporary lay-offs from work, with
the latter financed partially by use of the “National Income Support Fund”.
Subsequently, the talks with the trade unions to confirm the redundancy incentive plan and
reduction in working hours and temporary lay-offs from work pursuant to the above
agreement ended on 13 th February 2013, and a supplement was signed to the agreement
extending the number of applications from that originally provided for.
As far as the complex operation involving staff is concerned, after a discounting effect of €1.9
million, an expense totalling a net value of €152 million was recognised under “Staff costs” in
the income statement for 2012. The figure was normalised given its non-recurrent nature.
Accounting for the “fast credit processing fee”
The “fast credit processing fee”, regulated by paragraph 2 of the Law of 22 nd December 2011,
the Salva Italia (Save Italy) Law 11 , is a charge payable by customers that have exceeded their
maximum credit limit without the Bank’s authorisation. This charge, which is payable
11
Further amended by Decree Law No. 1 of 24th January 2012, the Liberalisation Decree, and by Decree Law No. 29
of 24 th March 2012, subsequently converted by Law No. 62 of 18 th May 2012.
244

exclusively in cases in which the Bank carries out a brief investigation 12 in accordance with its
internal procedures before giving authorisation for the limit to be exceeded, essentially
replaces the “excess penalty” introduced in 2010 before a broader review of the terms and
conditions applied to customers was carried out, and is effective from 1st October 2012.
The relative amount is calculated as a fixed sum, expressed in absolute terms, proportionate
to the costs incurred and pursuant to CICR (interministerial committee for credit and savings)
Resolution No. 644 of 30 th June 2012, “does not exceed the average costs incurred by the
intermediary for carrying out the brief investigation and is directly related to it”; in other terms
the income from the “fast credit processing fee" is essentially simply a recovery of costs.
The accounting treatment for the fee in question is specified in the Bank of Italy’s service
instructions ("addendum letter”) No. 46586/13 of 15 th January 2013, which explain that the
income should be recognised in the income statement under item 220 “Other operating income
and expenses” in the bank’s financial statements. Therefore, in the financial statements as at
and for the year ended 31 st December 2012, the fast credit processing fee is recognised in the
income statement from 1 st October 2012 under “Other operating income and expenses”.
Conversely, the income statement for the year ended 31 st December 2011, published for
comparative purposes, includes the excess penalty under “Interest and similar income”, which
in the reclassified income statement, has been moved to “Other operating income and
expenses” in order to allow a comparison of the two financial years.
Transformation of deferred tax assets (DTA) into tax credits
As already reported in the interim report as at and for the year ended 30 th June 2012, under
specific operating and financial conditions – i.e. losses in the statutory financial statements –
Decree Law No. 225/2010, converted with amendments into Law No. 10/2011, allows
companies to transform deferred tax assets recognised in their financial statements into tax
credits, but only in the following cases:
deferred assets relating to excesses in the write-downs of loans and receivables (article
106 of the Consolidated Income Tax Act);
deferred assets relating to realignments of intangible assets such as goodwill and brands
(article 15, paragraphs 10. 10-bis and 10-ter of Decree Law No. 185/2008).
The above-mentioned law was subsequently added to by Law No. 214/2011, which extended
the ability to convert deferred tax assets to include situations of tax losses, although following
different procedures, even where the statutory accounts showed profits.
The matter is regulated from an accounting viewpoint by joint document No. 5 issued by the
Bank of Italy/Consob/Isvap on 15 th May 2012 13 , which states that the tax rules cited basically
confer certainty on the recovery of the deferred tax assets, by considering that the probability
test mentioned in IAS 12, paragraph 24 is automatically passed. According to that test
deferred tax assets may only be recognised if it is probable that taxable income will be earned
against which the asset may be used.
As a consequence, the effects of the tax rules do not cause any change in the accounting
classification of the deferred tax assets, which continue to be recognised within tax assets for
prepaid taxes until the time of conversion, which transforms them into “Current tax assets” in
accordance with the provisions of Decree Law No. 225/2010 and without generating any
impacts on the income statement.
12
Generally the fast credit processing fee is applied in the following circumstances:
• loan facilities are granted on a current account in which the client can use and pay back the amount of
available credit;
• overdrafts on current accounts when there is no loan facility;
• credit and overdraft facilities on payment accounts, granted in accordance with the provisions of article 114-
octies, paragraph 1, letter a) of the Consolidated Banking Act.
• overdrawn on credit cards.
13
In this regard, in Letter No. 1093994/12 of 21st December 2012, the Bank of Italy also provided clarifications about
the treatment of prepaid taxes for regulatory capital purposes in the light of the rules governing the conversion of tax
credits in question.
245

In view of the above, at consolidated level as a result of the loss on the financial statements in
2011, some of the Group companies transformed deferred tax assets into tax credits in 2012.
In terms of the most significant conversions of amounts, UBI Banca and UBI Leasing
transformed €268.5 million and €6.4 million in deferred tax assets respectively into tax
credits.
The credits resulting from the transformation were partly used during the year to offset
payments due to the tax authorities totalling €188.8 million.
The residual amount of tax credit resulting from the conversion of deferred tax assets stated
under item 140 of the balance sheet “Tax assets – a) current” in the financial statements as at
and for the year ended 31 st December 2012 was €86.1 million.
Recognition of credit for the corporate income tax (IRES) refund of local production tax
(IRAP) relating to the cost of labour
As mentioned in the interim report as at and for the half year ended 30 th June 2012, Decree
Law No. 201 of 6 th December 2011, the Salva Italia (Save Italy) Decree Law, converted with
amendments by Law No. 214 of 22 nd December 2011, and Decree Law No. 16 of 2 nd March
2012, the Tax Simplifications Decree, respectively made it possible:
a) to fully deduct the IRAP due in relation to expenses for employees and other staff, net
of the relevant deductions, from the income subject to IRES for the 2012 tax year;
b) to apply for IRES refunds, recalculated as a result of the deductibility of IRAP relating
to the cost of labour, for prior years (2007-2011).
On 17 th December 2012 the tax authorities issued provision No. 2101/140973 approving the
procedure and instructions for applying for refunds for tax periods prior to the current period
ending on 31 st December 2012, pursuant to article 2, paragraph 1-quater of Decree Law No.
201/2011.
In view of the above, in the 2012 financial statements, a credit was recognized under balance
sheet item 140 “Tax assets”, against the recognition of lower taxation amounting to €66.08
million in item 290 of the income statement (of which €5.2 million attributable to noncontrolling
interests). This represents the amount that it will be possible to claim back as a
refund for the 2007-2011 tax years.
To complete the information, the credit in question has not been discounted to present values
because the relative refund dates are not known.
Government-backed bonds
The above-mentioned Salva Italia Decree (converted by Law No. 22 of December 2011)
introduced the possibility until 30 th June 2012 for Italian banks to receive a government
guarantee underwriting bonds issued with maturities of between three months and five years,
or from 1 st January 2012 of up to seven years for covered bonds.
UBI Banca took up the government initiative, issuing four bond issues with government
guarantees for a nominal amount of six billion, of which four billion were three-year bonds and
the remaining two billion were five-year bonds.
After the bond issue, UBI Banca bought back the securities, which have the requisites to be
used as assets eligible for refinancing with the European Central Bank. This buy-back meant
that the bonds issued were derecognised in the financial statements.
The issue of a government guarantee involved payment of commission amounting to €42.8
million recognised under item 50 “Commission expenses”.
Classification of financial assets as “Held-to-maturity investments”
This year, as part of the asset liability management strategy, government securities meeting
the requirements of IAS 39 for financial assets in the held-to-maturity portfolio (HTM) were
246

purchased. These financial instruments were recorded in the financial statements under item
50 "Held-to-maturity investments”, for an amount of approximately €3,158 million, as this
more accurately reflects the Group’s aims.
The category in question became newly available after the two-year period specified by the
tainting rule in force since 31 st December 2009, the date on which a considerable part of the
HTM portfolio was sold. This involved reclassifying the assets in the HTM portfolio that were
not sold under AFS, pursuant to the provisions of IAS 39, and meant that no financial
instruments could be classified in the HTM portfolio until 31 st December 2011.
Option for tax consolidation
The Consolidated Income Tax Act allows companies belonging to the same group to calculate
a single overall global income, which corresponds generally speaking with the sum of the
taxable income of the various companies (parent companies and companies directly and/or
indirectly majority owned according to specific requirements), and therefore to calculate a
single income tax payment for Group companies ("national tax consolidation”, as regulated by
articles 117-129 of the Consolidated Income Tax Act ).
By virtue of this option, the Italian companies in the Group were included in national tax
consolidation under the parent company UBI Banca and their tax liabilities were calculated by
transferring their taxable income to the parent company.
List of the main IFRS standards endorsed by the European Commission
IAS/IFRS ACCOUNTING STANDARDS ENDORSEMENT
IAS 1 Presentation of financial statements Reg. 1274/08, 53/09,
70/09, 494/09, 243/10,
149/11, 475/12,
1254/12, 1255/12
IAS 2 Inventories Reg. 1126/08, 1255/12
IAS 7 Statement of cash flows Reg. 1126/08, 1274/08,
70/09, 494/09, 243/10,
1254/12
IAS 8 Accounting policies, changes in accounting estimates and errors Reg. 1126/08, 1274/08,
70/09, 1255/12
IAS 10 Events after the reporting date Reg. 1126/08, 1274/08,
70/09, 1142/09,
1255/12
IAS 11 Construction contracts Reg. 1126/08, 1274/08
IAS 12 Income taxes Reg. 1126/08, 1274/08,
495/09, 475/12,
1254/12, 1255/12
IAS 16 Property, plant and equipment Reg. 1126/08, 1274/08,
70/09, 495/09, 1255/12
IAS 17 Leases Reg. 1126/08, 243/10,
1255/12
IAS 18 Revenue Reg. 1126/08, 69/09,
1254/12, 1255/12
IAS 19 Employee benefits Reg. 1126/08, 1274/08,
70/09, 475/12, 1255/12
IAS 20 Accounting for government grants and disclosure of government
assistance
Reg. 1126/08, 1274/08,
70/09, 475/12, 1255/12
IAS 21 The effects of changes in foreign exchange rates Reg. 1126/08, 1274/08,
69/09, 494/09, 149/11,
475/12, 1254/12,
1255/12
IAS 23 Borrowing costs Reg. 1260/08, 70/09
IAS 24 Related party disclosures Reg. 632/10, 475/12,
1254/12
IAS 26 Retirement benefit plans Reg. 1126/08
IAS 27 (*) Consolidated and separate financial statements Reg. 1254/12
IAS 28 (*) Investments in associates and joint ventures Reg. 1254/12
247

IAS 29 Financial reporting in hyperinflationary economies Reg. 1126/08, 1274/08,
70/09
IAS 31 (**) Interests in joint ventures Reg. 1126/08, 70/09,
494/09, 149/11,
1255/12
IAS 32 Financial instruments: presentation Reg. 1126/08, 1274/08,
53/09, 70/2009, 495/09,
1293/09, 149/11,
475/12, 1254/12,
1255/12, 1256/12
IAS 33 Earnings per share Reg. 1126/08, 1274/08,
495/09, 475/12,
1254/12, 1255/12
IAS 34 Interim financial reporting Reg. 1126/08, 1274/08,
70/09, 495/09, 149/11,
475/12, 1255/12
IAS 36 Impairment of assets Reg. 1126/08, 1274/08,
69/09, 70/09, 495/09,
243/10, 1254/12,
1255/12
IAS 37 Provisions, contingent liabilities and contingent assets Reg. 1126/08, 1274/08,
495/09
IAS 38 Intangible assets Reg. 1126/08, 1274/08,
70/09, 495/09, 243/10,
1254/12, 1255/12
IAS 39 Financial instruments: recognition and measurement Reg. 1126/08, 1274/08,
53/2009, 70/09, 494/09,
495/09, 824/09, 839/09,
1171/09, 243/10,
149/11, 1254/12,
1255/12
IAS 40 Investment property Reg. 1126/08, Reg.
1274/08, Reg. 70/09,
1255/12
IAS 41 Agriculture Reg. 1126/08, 1274/08,
70/09, 1255/12
IFRS 1 First-time adoption of international financial reporting standards Reg. 1126/09, 1164/09,
550/10, 574/10, 662/10,
149/11, 475/12,
1254/12, 1255/12
IFRS 2 Share-based payment Reg. 1126/08, 1261/08,
495/09, 243/10, 244/10,
1254/12, 1255/12
IFRS 3 Business combinations Reg. 495/09, 149/11,
1254/12, 1255/12
IFRS 4 Insurance contracts Reg. 1126/08, 1274/08,
1165/09, 1255/12
IFRS 5 Non-current assets held for sale and discontinued operations Reg. 1126/08, 1274/08,
70/09, 494/09, 1142/09,
243/10, 475/12,
1254/12, 1255/12
IFRS 6 Exploration for and evaluation of mineral resources Reg. 1126/08
IFRS 7 Financial instruments: disclosures Reg. 1126/08, 1274/08,
53/09, 70/2009, 495/09,
824/09, 1165/09,
574/10, 149/11,
1205/11, 475/12,
1254/12, 1255/12,
1256/12
IFRS 8 Operating segments Reg. 1126/08, 1274/08,
243/10, 632/10, 475/12
IFRS 10 Consolidated financial statements Reg. 1254/12
IFRS 11 Joint arrangements Reg. 1254/12
IFRS 12 Disclosure of interests in other entities Reg. 1254/12
IFRS 13 Fair value measurement Reg. 1255/12
248

SIC/IFRIC INTERPRETATION DOCUMENTS ENDORSEMENT
IFRIC 1
Changes in existing decommissioning, restoration and similar
liabilities
IFRIC 2 Members' Shares in co-operative entities and similar instruments
IFRIC 4
IFRIC 5
IFRIC 6
IFRIC 7
Determining whether an arrangement contains a lease
Rights to interests arising from decommissioning, restoration
and environmental rehabilitation funds
Liabilities arising from participating in a specific market - waste
electrical and electronic equipment
Applying the restatement approach under IAS 29 “Financial
reporting in hyperinflationary economies”
Reg. 1126/08, 1274/08
Reg. 1126/08, 53/09,
1255/12
Reg. 1126/08, 70/09,
1255/12
Reg. 1126/08, 1254/12
Reg. 1126/08
Reg. 1126/08, 1274/08
IFRIC 9 Reassessment of embedded derivatives
Reg. 1126/08, 495/09,
1171/09, 243/10,
1254/12
IFRIC 10 Interim financial reporting and impairment Reg. 1126/08, 1274/08
IFRIC 12 Service concession arrangements Reg. 254/09
IFRIC 13
Reg. 1262/08, 149/11,
Customer loyalty programmes
1255/12
IFRIC 14
Reg. 1263/08, Reg.
Prepayments of a minimum funding requirement
1274/08, 633/10,
475/12
IFRIC 15 Agreements for the construction of real estate Reg. 636/09
IFRIC 16
Reg. 460/09, Reg.
Hedges of a net investment in a foreign operation
243/10, 1254/12
IFRIC 17
Reg. 1142/09, 1254/12,
Distributions of non-cash assets to owners
1255/12
IFRIC 18 Transfers of assets from customers Reg. 1164/09
IFRIC 19 Extinguishing financial liabilities with equity instruments Reg. 662/10, 1255/12
IFRIC 20 Stripping costs in the production phase of a surface mine Reg. 1255/12
Reg. 1126/08, 1274/08,
SIC 7 Introduction of the euro
494/09
Government assistance – no specific relation to operating Reg. 1126/08, 1274/08
SIC 10
activities
SIC 12 (**) Consolidation – special purpose entities Reg. 1126/08
Jointly controlled entities – non-monetary contributions by Reg. 1126/08, 1274/08
SIC 13
venturers
SIC 15 Operating leases – incentives Reg. 1126/08, 1274/08
SIC 21
(***)
SIC 25
SIC 27
Income taxes – Recovery of revalued non-depreciable assets
Income taxes – Changes in the tax status of an enterprise or its
shareholders
Evaluating the substance of transactions in the legal form of a
lease
Reg. 1126/08
Reg. 1126/08, 1274/08
Reg. 1126/08
SIC 29 Service concession arrangements: disclosures
Reg. 1126/08, 1274/08,
70/09
SIC 31 Revenue – Barter transactions involving advertising services Reg. 1126/08
SIC 32 Intangible assets – Website costs Reg. 1126/08, 1274/08
(*) The version of the standards applicable today remain applicable until the date of the first application of standards
IFRS 10, IFRS 11 and IFRS 12.
(**) Standards applicable until the date of the first application of standards IFRS 10, IFRS 11 and IFRS 12; those
standards are to be considered repealed from that date.
(***) That interpretation is considered repealed from 1/1/2013, the date of the last compulsory application of IAS 12
as amended by Reg. EU 1255/12.
249

A.2 – The main items in the financial statements
1. Financial assets and liabilities held for trading and
financial assets and liabilities designated at fair value
This category includes:
1.1. Definition of financial assets and liabilities held for trading
A financial asset or liability is classified as held for trading (at fair value through profit or loss
– FVPL) and is stated within either item 20 “Financial assets held for trading” or item 40
“Financial liabilities held for trading”, if it is:
acquired or incurred for sale or repurchase in the short term;
part of a portfolio of identified financial instruments which are managed together and for
which there is evidence of a recent and effective strategy of short term profit taking;
a derivative (except for derivatives designated and effective as a hedging instrument – see
the relative section below).
1.1.1. Derivative financial instruments
A “derivative” is defined as a financial instrument or other contract with the following
characteristics:
its value changes in response to the change in an interest rate, in the price of a financial
instrument, in a commodity price, in a foreign currency exchange rate, in a price, interest
rate or credit rating index, or credit worthiness index or other specific variable;
it requires no initial investment, or a net initial investment that is smaller than would be
required for other types of contract from which a similar response to changes in market
factors would be expected;
it is settled at a future date.
The UBI Group holds derivative financial instruments for both trading and for hedging
purposes (see the relative section below for information on the latter).
1.1.2. Embedded derivative financial instruments
An "embedded derivative financial instrument" is defined as a component of a hybrid
(combined) instrument which also includes a “host” non derivative contract such that some of
the cash flows of the combined instrument behave in a way similarly to the derivative as a
stand-alone instrument. The embedded derivative is separated from the host contract and
treated in the accounts as a stand-alone derivative if and only if:
the economic risks and characteristics of the embedded derivative are not closely related to
the economic risks and characteristics of the host contract;
a separate instrument with the same conditions as the embedded derivative would satisfy
the definition of a derivative;
the hybrid (combined) instrument is not recognised within financial assets or liabilities held
for trading.
250

1.2. Definition of financial assets and liabilities designated at fair
value
Financial assets and liabilities may be designated on initial recognition within “financial assets
and liabilities at fair value” and recorded within items 30 “Financial assets designated at fair
value” and 50 “Financial liabilities designated at fair value”.
A financial asset/liability is designated at fair value through profit or loss on initial recognition
only when:
a) it is a hybrid contract containing one or more embedded derivatives and the embedded
derivative significantly alters the cash flows that would otherwise be generated by the contract;
b) the designation at fair value through profit or loss allows better information to be provided
because:
it eliminates or considerably reduces an asymmetry in the valuation or in the
recognition, which would otherwise result from the valuation of assets or liabilities or
from recognition of the relative profits and losses on a different basis;
or
a group of financial assets, financial liabilities or of both is managed and its
performance is valued on the basis of its fair value according to a documented risk
management procedure or investment strategy and the information on the group is
provided internally on that basis to senior managers with strategic responsibilities.
1.3. Recognition criteria
The financial instruments “Financial assets and liabilities held for trading and financial assets
and liabilities designated at fair value” are recognised either:
at the time of settlement if they are debt or equity instruments; or,
on the trade date if they are derivative contracts.
Measurement on initial recognition is at cost considered to be the fair value of the instrument
without considering any transaction costs or income directly attributable to the instruments
themselves.
1.4. Measurement criteria
Subsequent to initial recognition, the financial instruments in question are measured at fair
value with changes recognised in the income statement within item 80 “Net trading income
(loss)”, for assets/liabilities held for trading and within item 110 “Net income/expense on
financial assets and liabilities designated at fair value” for financial assets/liabilities
designated at fair value”. The measurement of the fair value of the assets and liabilities in
question is based on prices quoted on active markets or on internal valuation models which
are generally used in financial practice as described in greater detail in Part A.3.2 of the Notes
to the financial statements “Fair Value Hierarchy”.
1.5. Derecognition criteria
“Financial assets and liabilities held for trading and financial assets and liabilities designated
at fair value” are derecognised in the accounts when the rights to the cash flows from the
financial assets or liabilities expire or when the financial assets or liabilities are transferred
with the substantial transfer of all the risks and rewards deriving from ownership of them.
The result of the transfer of financial assets or liabilities held for trading is recognised in the
income statement within item 80 “Trading income (loss)”, while the result of the transfer of
financial assets or liabilities designated at fair value is recognised within item 110 “Net
income/expense on financial assets and liabilities designated at fair value”.
251

2. Available-for-sale financial assets
2.1 Definition
Available-for-sale financial assets (AFS) are defined as non-derivative financial assets
designated on initial recognition as such or that are not classified as:
(1) loans and receivables (see section below);
(2) financial investments held until maturity (see section below);
(3) financial assets held for trading and measured at fair value recognised through profit or
loss (see section below).
These financial assets are recognised within item 40 “Available-for-sale financial assets”.
2.2 Recognition criteria
Available-for-sale financial assets are recognised initially when, and only when, the company
becomes a party in the contract clauses of the instrument and that is on the date of
settlement, at fair value which generally coincides with the cost of them. This value includes
costs or income directly connected with the instruments themselves.
The recognition of available-for-sale financial assets may result also from the reclassification
out of “held-to-maturity investments” or, but only and only in rare circumstances and in any
case only if the asset is no longer held for sale or repurchase in the short term, out of
“financial assets held for trading”; in this case the recognition value is the same as the fair
value at the moment of reclassification
2.3 Measurement criteria
Subsequent to initial recognition, available-for-sale financial assets continue to be recognised
at fair value with interest (resulting from application of the amortised cost) recognised through
profit or loss and changes in fair value recognised in equity within item 140 “Valuation
reserves”, except for losses due to impairment, until the financial asset is derecognised, at
which time the profit or loss previously recognised in equity must be recognised through profit
or loss. Equity instruments for which the fair value cannot be reliably measured according to
the methods described are recognised at cost.
The measurement of the fair value of available-for-sale financial assets is based on the prices
quoted on active markets or on internal measurement models which are generally used in
financial practice as described in greater detail in Part A.3.2 of the Notes to the financial
statements “Fair Value Hierarchy”.
At the end of each financial year or interim reporting period, objective evidence of impairment
is assessed, which in the case of equity instruments is also held to be significant or prolonged.
As concerns the significance of the impairment, significant indications of impairment exist
where the market value of an equity instrument is less than 35% of its historical cost of
acquisition. In this case impairment is recognised through profit or loss without further
analysis. If the impairment is less then it is recognised only if the measurement of the
instrument performed on the basis of its fundamentals does not confirm the soundness of the
company and that is its earning prospects.
As concerns the permanence of the impairment, it is defined as prolonged when the fair value
remains continuously below its historical cost of purchase for a period of longer than 18
months. In this case the impairment is recognised through profit or loss without further
analysis. If the fair value continues to remain below its historical purchase cost for periods
shorter than 18 months, then the impairment to be recognised through profit or loss is
determined by considering, amongst other things, whether the impairment is attributable to
general negative performance by stock markets rather than to the specific performance of the
individual counterparty.
252

If there is permanent impairment, the cumulative change, including that previously recognised
in equity under the aforementioned item, is recognised directly in the income statement within
item 130 “Net impairment losses on b) available-for-sale financial assets”.
Permanent impairment loss is recognised when the acquisition cost (net of any repayments of
principal and amortisation) of an available-for-sale financial asset exceeds its recoverable
amount. Any recoveries of value, which are only possible when the causes of the original
permanent impairment no longer exist are treated as follows:
if they relate to investments in equity instruments, then with a balancing entry directly in
the equity reserve;
if they relate to investments in debt instruments, they are recognised in the income
statement within item 130 b) “Net impairment losses on available-for-sale financial assets”.
The amount of the reversal of the impairment loss may not in any case exceed the amortised
cost which, in the absence of previous impairment losses, the instrument would have had at
that time.
Because the UBI Group applies IAS 34 “Interim financial reporting” to its half year interim
reports with consequent identification of a half year “interim period”, any impairment
incurring is recognised historically at the end of the half year.
2.4 Derecognition criteria
Available-for-sale financial assets are derecognised in the accounts when the contractual
rights to the cash flows from the financial assets expire or when the financial assets are sold
with the substantial transfer of all the risks and benefits deriving from ownership of them.
The result of the disposal of available-for-sale financial assets is recognised in the income
statement within item 100 “Income/expense from the disposal or repurchase of b) availablefor-sale
financial assets”. Upon derecognition, any corresponding amount of what was
previously recognised in equity under item 140 “Valuation reserves” is written off against the
income statement”.
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3. Held-to-maturity investments
3.1 Definition
Held-to-maturity investments (HTM) are defined as non-derivative financial assets with fixed or
determinable payments and fixed maturity that an entity intends and is able to hold to
maturity. Exception is made for those:
(a) held for trading and those designated upon initial recognition at fair value through profit
or loss (see previous section);
(b) designated as available for sale (see previous section);
(c) which satisfy the definition of loans and receivables (see section below).
When annual and interim reports are prepared the intention and ability to hold financial
assets until maturity is assessed.
The assets in question are recognised under item 50 “Held-to-maturity investments”.
3.2 Recognition criteria
Held-to-maturity investments are recognised initially when, and only when, the company
becomes a party in the contract clauses of the instrument and that is on the date of
settlement, measured at cost inclusive of any costs and income directly attributable to it. If the
recognition of assets in this category is the result of the reclassification out of “available-forsale
financial assets” or, but only and only in rare circumstances if the asset is no longer held
for sale or repurchase in the short-term, out of the “financial assets held for trading”, the fair
value of the assets as measured at the time of the reclassification is taken as the new measure
of the amortised cost of the assets.
3.3 Measurement criteria
Held-to-maturity investments are valued at amortised cost using the criteria of the effective
interest rate (see the section below “loans and receivables” for a definition). The result of the
application of this method is recognised in the income statement within item 10 “Interest and
similar income”.
When annual financial statements or interim reports are prepared, objective evidence of the
existence of an impairment of the value of the assets is assessed. If there is permanent
impairment, the difference between the recognised value and the present value of expected
future cash flows discounted at the original effective interest rate is included in the income
statement under the item 130 “Net impairment losses on c) held-to-maturity investments”.
Any recoveries of value recorded, should the cause that gave rise to the previous recognition of
impairment loss no longer exist, are recognised under the same item in the income statement.
The fair value of held-to-maturity investments is measured for disclosure purposes or where
effective currency or credit risk hedges exist (in relation to the risk hedged) and it is estimated
as described in greater detail in Part A.3.2 of the Notes to the financial statements “Fair Value
Hierarchy”.
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3.4 Derecognition criteria
Held-to-maturity investments are derecognised when the rights to the cash flows from the
financial assets expire or when the financial assets are sold with the substantial transfer of all
the risks and rewards deriving from ownership of them. The result of the disposal of held-tomaturity
financial assets is recognised in the income statement under the item 100 c)
“Income/expense from disposal or repurchase of held-to-maturity investments”.
4. Loans and receivables
4.1 Definition
Loans and receivables (L&R) are defined as non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. The following are exceptions:
(a) those which it is intended to sell immediately or in the short-term, that are classified as
held for trading and those that may have been designated on initial recognition as at fair
value through profit or loss;
(b) those designated upon initial recognition as available for sale;
(c) those for which the holder may not recover substantially all of its initial investment, other
than because of credit deterioration; in this case they are classified as available-for-sale.
Loans and receivables are recognised under the items 60 “Loans and advances to banks” and
70 “Loans and advances to customers”.
4.2 Recognition criteria
Loans and receivables are initially recognised in the accounts when the company becomes part
of a loan contract, which is to say when the creditor acquires the right to the payment of the
sums agreed in the contract. That moment corresponds to the date on which the loan is
granted.
Recognition in this category may result also from the reclassification out of “available-for-sale
financial assets” or, but only and only in rare circumstances if the asset is no longer held for
sale or repurchase in the short term, out of “financial assets held for trading”.
The amount initially recognised is that of the fair value of the financial instrument which is
the same as the amount granted inclusive of costs or income directly attributable to it and
determinable from the outset, independently of when they are paid. The amount of the initial
recognition does not include all those expenses that are reimbursed by the debtor
counterparty or that are attributable to internal expenses of an administrative character.
If the recognition is the result of reclassification, the fair value of the asset recognised at the
time of the reclassification is taken as the new measure of the amortised cost of the assets.
For loans not granted under market conditions, the initial fair value is calculated by using
special measurement techniques described below; in these circumstances the difference
between the fair value that is calculated and the amount granted is included directly in the
income statement within the item interest.
Contango and repo agreements with the obligation or right to repurchase or resell at term are
recognised in the accounts as funding or lending transactions. For transactions with a spot
sale and forward repurchase, the spot cash received is recognised in the accounts as
borrowings, while the spot purchase transactions with forward resale are recognised as
lending for the spot amount paid.
4.3 Measurement criteria
Loans are measured at amortised cost using the criteria of effective interest.
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The amortised cost of a financial asset or financial liability is the amount at which the
financial asset or financial liability was measured upon initial recognition net of principal
repayments, plus or minus the cumulative amortisation using the effective interest criterion
on any difference between that initial amount and the maturity amount, minus any reduction
(arising from an impairment or uncollectability).
The effective interest criterion is a method of calculating amortised cost of an asset or liability
(or group of assets and liabilities) and of distributing the interest income or expense over its
relative life. The effective interest rate is the rate that exactly discounts the estimated flow of
future cash payments or receipts until the expected maturity of the financial instrument. To
determine the effective interest rate, the cash flows must be estimated taking into
consideration all the contractual conditions of the financial instrument (e.g. payment in
advance, a purchase option or similar), but future impairments of the loan are not considered.
The computation includes all fees and basis points paid or received between parties to the
contract which are integral parts of the effective interest, the transaction costs and all other
premiums or discounts.
At each reporting date or when interim reports are prepared, any objective evidence that a
financial asset or group of financial assets has suffered impairment loss is assessed. This
circumstance occurs when it is probable that a company may not be able to collect amounts
due on the basis of the original contracted conditions or, for example, in the presence of:
(a) significant financial difficulties of the issuer or debtor;
(b) an infringement of the contract such as default or failure to pay interest or repay
principal;
(c) the lender, because of the economic or legal factors relating to the financial difficulties of
the debtor, granting a concession to the latter which the lender would not otherwise have
considered;
(d) the probability of the beneficiary declaring procedures for loan restructuring;
(e) the disappearance of an active market for that financial asset due to financial difficulties;
(f) available data which indicate a substantial decrease in expected future cash flows for a
similar group of financial assets since the time of the initial recognition of those assets,
although the decrease cannot yet be identified with the single financial assets of the group.
The measurement of non-performing loans (loans which, according to the definitions
formulated by the supervisory regulations in force issued by the Bank of Italy, are nonperforming,
impaired, restructured or past due) is performed on a case-by-case basis. The
remaining loans are measured using, collective, statistical methods which group uniform
classes of risk together.
The method for calculating the impairment losses recognised on non-performing loans is
based on discounting expected future cash flows for principal and interest, taking account of
any guarantees attached to positions and of any advances received. The basic elements for
determining the present value of cash flows are the identification of the estimated receipts, the
relative maturity dates and the discount rate to apply. The amount of the loss is equal to the
difference between the recognised value of the asset and the present value of expected future
cash flows, discounted at the original effective interest rate.
The measurement of performing loans relates to asset portfolios for which no objective
evidence of impairment exist and which are therefore valued collectively. Percentage rates of
loss calculated from historical data series are applied to the estimated cash flows from the
assets, grouped into uniform classes with similar characteristics in terms of credit risk for the
network banks of the Group, according to Basel 2 regulations, to which appropriate corrective
factors are applied to give a measurement consistent with the relative accounting standard.
If a loan is subject to individual measurement and shows no objective impairment loss, it is
placed in a class of financial assets with similar credit risk characteristics and subjected to
collective measurement.
Permanent impairment that is found is immediately recognised in the income statement under
the item 130 a) “Net impairment losses on loans” as are reversals of part or all of the
impairment losses previously recognised. Reversals of impairment losses are recognised where
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there is an improvement in credit quality sufficient to provide reasonable certainty of prompt
collection of the principal and the interest according to the original conditions of the original
loan contract, or in the presence of a progressive reversal of the present value calculated at the
time of recognising the impairment loss. Where loans are measured on a collective basis, any
upward value adjustments or reversals of impairment losses are recalculated as differences in
relation to each performing loan at the measurement date.
The fair value of medium and long-term loans is measured by considering future cash flows
discounted at the replacement rate or the market rate existing at the measurement date and
relating to a position with the same characteristics as the loan measured.
The fair value is measured for all loans for information purposes only. For loans subject to
effective hedging, the fair value is calculated in relation to the risk that is hedged for
measurement purposes.
4.4 Derecognition criteria
Loans are derecognised from the balance sheet when the rights to the cash flows from the
financial assets expire or when the financial assets are sold with the substantial transfer of all
the risks and rewards deriving from ownership of them and also when events to extinguish the
debt occur, in accordance with the definition provided in the supervisory regulations in force.
Otherwise loans continue to be recognised on the balance sheet for an amount equal to the
remaining involvement, even if legal title has been transferred to a third party.
The assets in question are derecognised in the balance sheet even when the Bank maintains
the contractual right to receive cash flows from them, but when at the same time it has a
contractual obligation to pay those cash flows to a third party.
If it results from disposals, the profit or loss from the derecognition of loans and receivables is
recognised in the income statement within item 100 a) “Income (loss) from the disposal or
repurchase of loans”, or if it results from the aforementioned events to extinguish debt, within
item 130 a) “Net impairment losses on loans and receivables”. In the latter case the events to
extinguish debt consist of either official actions taken by the competent bodies of the Bank
from which the total or partial non-recoverability of the financial asset results or the waiver of
recovery activities for reasons of financial expediency.
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5. Hedging derivatives
5.1 Definition
Hedging transactions are designed to neutralise potential losses on a specific item (or group of
items) attributable to a determined risk, by means of the gains realised on another instrument
or group of instruments if that particular risk should actually result in losses.
The UBI Group uses the following type of hedging transactions, appropriately represented in
the accounts and described below:
a fair value hedge: the objective is to offset adverse changes in the fair value of the asset or
liability hedged;
a cash flow hedge: the objective is to hedge against the exposure to variability in expected
cash flows with respect to the initial expectations.
Derivative contracts stipulated with external counterparties are designated as hedging
instruments.
5.2 Recognition criteria
As with all derivatives, derivative financial instruments used for hedging are initially
recognised and subsequently measured at fair value and are classified in the balance sheet
under assets within item 80 “Hedging derivatives” and under liabilities within item 60
“Hedging derivatives”.
A relationship qualifies as a hedge and is appropriately represented in the accounts if, and
only if, all the following conditions are satisfied:
at the start of the hedging transaction the relationship is formally designated and
documented, including the company’s risk management objective and strategy for
undertaking the hedge. This documentation includes identification of the hedging
instrument, the item or transaction hedged, the nature of the risk being hedged, and how
the entity will assess the hedging instrument's effectiveness in offsetting the exposures to
changes in the fair value of the item hedged or in the cash flows attributable to the risk
hedged;
the hedging is expected to be highly effective;
the planned transaction hedged, for hedging cash flows, is highly probable and presents an
exposure to changes in cash flows that could have effects on the income statement;
the effectiveness of the hedging can be reliably measured;
the hedging is measured on an ongoing basis and is considered highly effective for all the
financial years in which it was designated.
5.2.1 Methods for testing effectiveness
A hedge relationship is judged effective, and as such is appropriately represented in the
accounts, if at its inception and during its life the changes in the fair value or cash flows of the
hedged item attributable to the hedged risk are expected and have almost always been
completely offset by the changes in the fair value or cash flows of the hedging instrument. This
conclusion is reached when the actual result falls within a range of between 80% and 125%.
The effectiveness of a hedge is tested at inception and at each reporting date by means of a
prospective test designed to demonstrate the expected effectiveness of the hedge during its life.
Further retrospective tests are conducted monthly on a cumulative basis where the objective is
to measure the degree of effectiveness of the hedge in the reporting period and therefore to
verify whether the hedge has actually been effective in the period.
Derivative financial instruments that are considered hedges from a profit and loss viewpoint
but which do not satisfy the requirements to be considered effective instruments for hedging
are recognised under item 20 “Financial assets held for trading” or under item 40 “Financial
liabilities held for trading” and the profits and losses under the corresponding item 80
“Trading income (loss)”.
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If the above tests do not confirm the effectiveness of the hedge, then if it is not derecognised,
the derivative contract is reclassified within derivatives held for trading and the instrument
hedged is again measured according to the criterion applied for its balance sheet classification.
5.3 Measurement criteria
5.3.1 Fair value hedging
Fair value hedging is treated as follows:
the profit or loss resulting from measuring a hedging instrument at fair value is included in
the income statement under item 90 “Net hedging income (loss)”;
the profit or loss on the item hedged attributable to the hedged risk adjusts the value in the
accounts of the hedged item and is recognised immediately, regardless of the type of asset
or liability hedged, in the income statement within the aforementioned item.
Hedge accounting is discontinued prospectively in the following cases:
1. the hedging instrument expires or is sold, terminated, or exercised;
2. the hedge no longer meets the hedge accounting criteria described above;
3. the entity revokes the designation.
If the asset or liability hedged is measured at amortised cost, the higher or lower value
resulting from measuring them at fair value as a result of the hedge becoming ineffective is
recognised through profit or loss, according to the effective interest rate method or at constant
rates in the event of a hedge on a portfolio of assets and liabilities where that method is not
feasible, or in a single amount if the hedge has been derecognised.
The methods used for measurement of the fair value of the risk hedged in the assets or
liabilities subject to hedging are described in Part A.3.2 of the Notes to the financial
statements, “Fair value hierarchy”.
5.3.2 Cash flow hedging
When a derivative is designated as a hedge of exposure to changes in expected cash flows from
an asset or liability in the balance sheet or a future transaction considered highly probable,
the accounting treatment of the hedge is as follows:
the profits or losses (from the valuation of the hedging derivative) attributable to the
effective portion of the hedge are recognised in a special reserve in equity termed 140
“Valuation reserves”;
the profits or losses (from measurement of the hedging derivative) attributable to the
ineffective portion of the hedge are recognised directly in the income statement under item
90 “Net hedging income (loss)”;
the asset or liability hedged is measured according to the class of asset or liability to which
it belongs.
If a future transaction occurs which involves recognising non financial assets and liabilities,
the corresponding profits or losses initially recognised under item 140 “Valuation reserves” are
then transferred from that reserve and included as an initial cost of the asset or liability that is
recognised. If the future hedged transaction subsequently involves recognition of a financial
asset or liability, the associated profits or losses that were originally recognised under the item
140 “Valuation reserves” are reclassified to the income statement in the same reporting period
or periods during which the assets acquired or liabilities incurred have an effect on the income
statement. If a portion of the profits or losses recognised in the aforementioned reserve are not
considered recoverable, it is reclassified into the income statement within item 80 “Net trading
income (loss)”.
In all cases other than those already described, the profits or losses initially recognised under
the item 140 “Valuation reserves” are transferred to the income statement to reflect the time
and manner in which the future transaction is recognised in the income statement.
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An entity must discontinue hedge accounting prospectively in each of the following
circumstances:
(a) the hedging instrument expires or is sold, terminated, or exercised (for this purpose the
replacement or exchange of one hedging instrument with another hedging instrument is
not a conclusion or termination if that replacement or exchange forms part of an entity’s
documented hedging strategy). In this case the total profit (or loss) on the hedging
instrument continues to be recognised directly in equity until the reporting period in
which the hedge became effective and it continues to be recognised separately until the
programmed hedging transaction occurs;
(b) the hedge no longer satisfies the criteria for hedge accounting. In this case the total profit
or loss on the hedging instrument continues to be recognised directly in equity starting
from the reporting period in which the hedge became effective and it continues to be
recognised separately in equity until the programmed hedging transaction occurs;
(c) it is no longer considered that the future transaction should occur, in which case any
related total profit or loss on the hedging instrument recognised directly in equity starting
from the reporting period in which the hedge became effective must be recognised through
profit or loss;
(d) the entity revokes the designation. For hedges of a programmed transaction, total profits
or losses on the hedging instrument recognised directly in equity starting from the
reporting period in which the hedge became effective continues to be recognised separately
in equity until the programmed transaction occurs or it is expected that it will no longer
occur.
If it is expected that the transaction will no longer occur the total profit (or loss) that had been
recognised directly in equity is transferred to the income statement.
5.3.3 Hedging portfolios of assets and liabilities
Hedging of portfolios of assets and liabilities (“macrohedging”) and appropriate accounting
treatment is possible after first:
- identifying the portfolio to be hedged and dividing it by maturity dates;
- designating the risk to be hedged;
- identifying the interest rate risk to be hedged;
- designating the hedging instruments;
- determining the effectiveness.
The portfolio for which the interest rate risk is hedged may contain both assets and liabilities.
This portfolio is divided on the basis of expected maturity or repricing dates of interest rates
after first analysing the structure of the cash flows.
Changes in the fair value of the hedged instrument are recognised in the income statement
under item 90 “Net hedging income (loss)” and in the balance sheet under item 90 “Fair value
change in hedged financial assets” or under item 70 “Fair value change in hedged financial
liabilities”.
Changes occurring in the fair value of the hedging instrument are recognised in the income
statement within item 90 “Net hedging income (loss)” and under assets in the balance sheet
within item 80 “Hedging derivatives” or under liabilities side within item 60 “Hedging
derivatives”.
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6. Equity investments
6.1 Definition
6.1.1 Associates
An “associate” is defined as a company in which at least 20% of the voting rights are held or
over which the investing company exercises significant influence and which is neither a
subsidiary nor a company subject to joint control by the investing company. Significant
influence is the power to participate in the financial and operating policy decisions of the
company invested in but not to control or have joint control of it.
6.1.2 Companies subject to joint control
A “company subject to joint control” is defined as a company governed by a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to
joint control.
6.2 Recognition criteria
Equity investments in associates or joint ventures are recognised at cost of purchase plus any
accessory costs.
6.3 Measurement criteria
Investments in associates are measured using the equity method. Investments in companies
subject to joint control are measured by adopting either the equity method or the
proportionate method
Any objective evidence that an equity investment has been subject to impairment is assessed
as at each annual or interim reporting date. The recoverable amount is then calculated,
considering the present value of the future cash flows which may be generated by the
investment, including the final disposal value. If the recoverable amount calculated in this way
is less than the carrying value, the difference is recognised in the income statement under 240
“Profits (losses) of equity investments (valued at equity)”. Any future reversals of impairment
are also included in the item where the reasons for the original impairment no longer apply.
6.4 Derecognition criteria
Equity investments are derecognised in the balance sheet when the contractual rights to the
cash flows from the financial assets expire or when the financial assets are sold with the
substantial transfer of all the risks and rewards deriving from ownership of them. The result of
the disposal on investments valued using the equity method recognised in the income
statement under item 240 “Profits (losses) of equity investments (valued at equity)”; the result
of the disposal of equity investments other than those valued using the equity method is
recognised in the income statement under item 270 “Profits (losses) on the disposal of
investments”.
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7. Property, plant and equipment
7.1 Definition of assets for functional use
“Assets for functional use” are defined as tangible assets possessed to be used for the purpose
of carrying on a company’s business and where the use is planned to last longer than one
year.
Assets for functional use also include properties rented to employees, ex employees and their
heirs, as well as works of art.
7.2 Definition of investment property
“Investment property” is defined as properties held in order to earn rentals or for capital
appreciation. As a consequence, investment property is to be distinguished from assets held
for the use of the owner because they generate cash flows that are very different from the other
assets held by the banking group.
Finance lease contracts are also included within tangible assets (for functional use and held
for investment) even if the legal title to the assets remains with the leasing company.
7.3 Recognition criteria
Tangible assets, functional and other, are initially recognised at cost (item 120 “Property, plant
and equipment”), inclusive of all costs directly connected with bringing it to working condition
for the use of the assets and of purchase taxes and duties that are not recoverable. This
amount is subsequently increased to include expenses incurred from which it is expected
future benefits will be obtained. The costs of ordinary maintenance are recognised in the
income statement at the time at which they are incurred, while extraordinary maintenance
costs (improvements) from which future benefits are expected are capitalised by increasing the
value of the relative asset.
Improvements and expenses incurred to increase the value of leased assets from which future
benefits are expected are recognised:
– under the most appropriate category of item 120, “Property, plant and
equipment” if they are independent and can be separately identified, whether
they are leased assets the property of others or whether they are held under a
financial leasing contract;
– under item 120 “Property, plant and equipment” if they are not independent
and cannot be separately identified as an increase to the type of assets
concerned if held by means of a financial lease contract or under item 160
“Other assets” if they are held under an ordinary lease contract.
The cost of property, plant and equipment is recognised as an asset if, and only if:
it is probable that the future economic benefits associated with the asset will flow to the
enterprise;
the cost of the asset can be reliably determined.
7.4 Measurement criteria
Subsequent to initial recognition, items of property, plant and equipment for use in operations
are recognised at cost, as defined above, net of accumulated depreciation and any permanent
cumulative impairment. The depreciable amount, equal to cost less the residual value (i.e. the
amount that would be normally obtained from disposal, less disposal costs, if the asset was
normally in the conditions, including age, expected at the end of its useful life), should be
allocated on a systematic basis over the asset's useful life by adopting the straight line method
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of depreciation. The useful life of an asset, which is reviewed periodically to detect any
significant change in estimates compared to previous figures, is defined as:
the period of time over which it is expected that the asset can be used by a company or,
the quantity of products or similar units that an entity expects to obtain from the use of the
asset.
Since property, plant and equipment may consist of items with different useful lives, land,
whether by itself or as part of the value of a building is not depreciated since it constitutes a
fixed asset with an indefinite life. The value attributable to the land is deducted from the total
value of a property for all buildings in proportion to the percentage of ownership. Buildings, on
the other hand, are depreciated according to the criteria described above.
Works of art are not depreciated because they generally increase in value over time.
Depreciation of an asset starts when it is available for use and ceases when the asset is
written off the accounts, which is the most recent of when it is classified as for sale and the
date of elimination from the accounts. As a consequence depreciation does not stop when an
asset is left idle or is no longer in use, unless the asset has already been fully depreciated.
Improvements and expenses which increase the value are depreciated as follows:
if they are independent and can be separately identified, according to the presumed useful
life as described above;
if they are not independent and cannot be separately identified, then if they are held under
an ordinary leasing contract, over the shorter of the period in which the improvements and
expenses can be used and that of the remaining life of the contract taking account of any
individual renewals, or if the assets are held under a finance lease contract, over the
expected useful life of the assets concerned.
The depreciation of improvements and expenses to increase the value of leased assets
recognised under item 160 “Other assets” is recognised under item 220 “Other operating
income (expense)”.
At the end of each annual or interim reporting period the existence of indications that
demonstrate the impairment of the value of an asset are assessed. The loss is determined by
comparing the carrying amount of the tangible asset with the lower recoverable amount. The
latter is the greater of the fair value, net of any sales costs, and the relative use value intended
as the present value of future cash flows generated by the asset. The loss is immediately
recognised in the income statement under item 200 “Net impairment losses on property,
equipment and investment property”; the item also includes any future recovery in value if the
causes of the original write down no longer exist.
7.4.1 Definition and measurement of fair value
7.4.1.1 Properties
The fair value is measured on the basis of the market value intended as meaning the best
price at which the sale of a property might reasonably be expected to have been completed
unconditionally for cash consideration on the date of valuation, assuming:
− that the seller and the purchaser are independent counterparties;
− the intention of the seller to sell the assets is real;
− that there is a reasonable period (having regard to the nature of the property and the
state of the market) for the proper marketing of the property and for the agreement of
price and terms necessary to complete the sale;
− that the market trend, level of values and other circumstances were, at the date of
signing the preliminary contract of purchase and sale, identical to those existing at the
date of valuation;
− that no account is taken of bids by purchasers for whom the property has
characteristics which make it “outside the market range”.
The procedures adopted for determining the market value are based on the following methods:
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the direct comparative or market method, based on a comparison between the asset in
question and other similar asset subject to sale or currently on sale on the same market or
competing markets;
the income method based on the present value of potential market incomes for a similar
property, obtained by capitalising the income at a market rate.
The above methods are applied individually and the values obtained are appropriately
averaged.
7.4.1.2 Determination of the value of land
The method used for identifying the percentage of the market value attributable to land is
based on an analysis of the location of the property, taking account of the type of construction,
the state of conservation and the cost of rebuilding the entire building.
7.5 Property, plant and equipment acquired through finance leases
A finance lease is a contract that substantially transfers all the risks and rewards incident to
ownership of an asset. Legal title may or may not be transferred at the end of the lease term.
The beginning of the lease term is the date on which the lessee is authorised to exercise his
right to use the asset leased and therefore corresponds to the date on which the lease is
initially recognised.
When the contract commences, the lessee recognises the financial lease transactions as assets
and liabilities in its balance sheet at the fair value of the asset leased or, if lower, at the
present value of the minimum payments due. To determine the present value of the minimum
payments due, the discount rate used is the contractual interest rate implicit in the lease, if
practicable, or else the lessee’s incremental borrowing rate is used. Any initial direct costs
incurred by the lessee are added to the amount recognised for the asset.
The minimum payments due are apportioned between the finance charges and the reduction
of the residual liability. The former are allocated over the lease term so as to produce a
constant rate of interest on the residual liability.
The finance lease contract involves recognition of the depreciation charge for the asset leased
and of the finance charges for each financial year. The depreciation policy used for assets
acquired under finance leases is consistent with that adopted for owned assets. See the
relative paragraph for a more detailed description.
7.6 Derecognition criteria
Property, plant and equipment are derecognised in the balance sheet when they are disposed
of or when they are permanently retired from use and no future economic benefits are
expected from their disposal. Any gains or losses resulting from the retirement or disposal of
the property, equipment and investment property, calculated as the difference between the net
consideration on the sale and the carrying amount of the asset are recognised in the income
statement under item 270 “Profit (loss) on the disposal of investments”.
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8. Intangible assets
8.1 Definition
An intangible asset is defined as an identifiable non-monetary asset without physical
substance that is used in carrying on a company’s business.
The asset is identifiable when:
it is separable, which is to say capable of being separated and sold, transferred, licensed,
rented, or exchanged;
it arises from contractual or other legal rights, regardless of whether those rights are
transferable or separable from other rights and obligations.
An asset possesses the characteristic of being controlled by the enterprise as a result of past
events and the assumption that its use will cause economic benefits to flow to the enterprise.
An entity has control over an asset if it has the power to obtain future economic benefits
arising from the resource in question and may also limit access by others to those benefits.
Future economic benefits arising from an intangible asset might include receipts from the sale
of products or services, savings on costs or other benefits resulting from the use of the asset
by an enterprise.
An intangible asset is recognised if, and only if:
(a) it is probable that the expected future economic benefits attributable to the asset will flow
to the entity;
(b) the cost of the asset can be measured reliably.
The probability of future economic benefits occurring is assessed on the basis of reasonable
and supportable assumptions that represent the best estimate of the economic conditions that
will exist over the useful life of the asset.
The degree of probability attaching to the flow of economic benefits attributable to the use of
the asset is assessed on the basis of the sources of information available at the time of initial
recognition, giving greater weight to external sources of information.
In addition to goodwill and software used over several years, brands, core deposits, assets
under management and assets under management recognised following the merger of the
former BPU Banca and the former Banca Lombarda e Piemontese are also considered as
intangible assets.
8.1.1 Intangible assets with a finite useful life
An asset has a finite useful life where it is possible to estimate a limit to the period over which
the related economic benefits are expected to be produced.
Intangible assets considered as having a finite useful life include software, core deposits,
assets under management and brands.
8.1.2 Intangible assets with an indefinite useful life
An asset has an indefinite useful life where it is not possible to estimate a predictable limit to
the period over which the asset is expected to generate economic benefits for the Bank. The
attribution of an indefinite useful life to an asset does not arise from having already
programmed future expenses which restore the standard level of performance of the asset over
time and prolong its useful life.
Intangible assets considered as having an indefinite useful life include goodwill.
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8.2 Recognition criteria
Assets recognised under the balance sheet item 130 “Intangible assets” are stated at cost and
any expenses subsequent to the initial recognition are only capitalised if they are able to
generate future economic benefits and only if those expenses can be reliably determined and
attributed to the assets.
The cost of an intangible asset includes:
the purchase price including any non recoverable taxes and duties on purchases after
commercial discounts and bonuses have been deducted;
any direct costs incurred in bringing the asset into use.
8.3 Measurement criteria
Subsequent to initial recognition intangible assets with a finite useful life are recognised at
cost net of total amortisation and any losses in value that may have occurred. Amortisation is
calculated on a systematic basis over the estimated useful life of the asset (see definition
included in the section “Property, equipment and investment property”) using the straight line
method for all intangible assets with the exception of intangible assets relating to customer
accounts recognised following the purchase price allocation resulting from the merger of the
former BPU Banca and the former Banca Lombarda e Piemontese. In this case the
amortisation is calculated using percentage rates of amortisation which represent the
probability of the customer accounts ending over time.
Amortisation begins when the asset is available for use and ceases on the date on which the
asset is eliminated from the accounts.
Intangible assets with an indefinite useful life (see, goodwill, as defined in the section below if
positive) are recognised at cost net of any impairment loss resulting from periodic reviews
when tests are performed to verify the appropriateness of the carrying amount of the assets
(see section below). As a consequence amortisation of these assets is not calculated.
No intangible assets arising from research (or from the research phase of an internal project)
are recognised. Research expenses (or the research phase of an internal project) are recognised
as expenses at the time at which they are incurred.
An intangible asset arising from development (or from the development phase of an internal
project) is recognised if, and only if the following can be demonstrated:
(a) the technical feasibility of completing the intangible asset so that it becomes available for
sale or use;
(b) the intention of the company to complete the intangible asset to use it or sell it;
(c) the capacity of the company to use or sell the intangible asset.
At the end of each annual or interim reporting period the existence of potential impairment of
the value of intangible assets is assessed. The impairment is given by the difference between
the carrying value of the assets and the recoverable amount and is recognised, as are any
recoveries of value, under the item 210 “Net impairment losses on intangible assets”, with the
exception of impairment losses on goodwill which are recognised under item 260 “Net
impairment losses on goodwill”.
8.4 Goodwill
Goodwill is defined as the difference between the purchase cost and the fair value of assets
and liabilities acquired as part of a business combination which consists of the union of
separate enterprises or businesses in a single entity required to prepare financial statements.
The result of almost all business combinations consists in the fact that a sole entity, an
acquirer, obtains control over one or more separate businesses of the acquiree. When an entity
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acquires a group of activities or net assets that do not constitute a business it allocates the
cost of the group to individual assets and liabilities identified on the basis of their relative fair
value at the date of acquisition.
A business combination may give rise to a holding relationship between a parent company and
a subsidiary in which the acquirer is the parent company and the acquiree is the subsidiary.
All business combinations are accounted for using the purchase method of accounting.
The purchase method involves the following steps:
(a) identification of the acquirer (the acquirer is the combining enterprise that obtains control
of the other combining enterprises or businesses);
(b) determination of the acquisition date;
(c) determination of the cost of the business combination, intended as the consideration
transferred by the purchaser to the shareholders of the acquiree;
(d) the allocation, as at the acquisition date, of the cost of the business combination by means
of the recognition, classification and measurement of the identifiable assets acquired and
the identifiable liabilities assumed;
(e) recognition of any existing goodwill.
Business combinations performed with subsidiary undertakings or with companies belonging
to the same group are recognised on the basis of the significant economic substance of the
transactions.
In application of that principle, the goodwill arising from those transactions in the separate
financial statements is recognised:
(a) within asset item 120 of the balance sheet if significant economic substance is found;
(b) as a deduction from equity if it is not found.
These transactions are eliminated from the consolidated financial statements and are therefore
recognised solely as the relative costs incurred in relation to parties external to the Group.
The goodwill recognised in the consolidated financial statements of the Group (“goodwill
arising on consolidation” resulting from the elimination of the equity investments in
subsidiaries) is the result of all the goodwill and positive consolidation differences relating to
some of the companies controlled by the Parent.
Any changes in the share of ownership which do not result in the loss or acquisition of control
are to be considered, in compliance with IAS 27, as transactions between shareholders and as
a consequence the relative effects must be recognised as either an increase or a decrease in
equity.
8.4.1. Allocation of the cost of a business combination to assets and liabilities and
contingent liabilities
The acquirer:
(a) recognises the goodwill acquired in a business combination as assets;
(b) measures that goodwill at its cost to the extent that it is the excess of the cost of the
business combination over the acquirer's share of interest in the net fair values of the
acquiree's identifiable assets, liabilities and contingent liabilities.
Goodwill acquired in a business combination represents a payment made by the acquirer in
the expectation of receiving economic future benefits from the asset which cannot be identified
individually and recognised separately.
After initial recognition, the acquirer values the goodwill acquired in a business combination
at the relative cost net of cumulative impairment.
The goodwill acquired in a business combination must not be amortised. The acquirer tests
the asset for impairment annually or more frequently if specific events or changed
circumstances indicate that it may have suffered a reduction in value, according to the relative
accounting standard.
The standard states that an asset (including goodwill) has suffered an impairment loss when
the amount recognised in the accounts exceeds the recoverable amount understood as the
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greater of the fair value, net of any sales expenses and its value in use, defined by section 6 of
IAS 36.
In order to test for impairment, goodwill must be allocated to cash generating units or to
groups of cash generating units, in observance of the maximum aggregation limit which
cannot exceed the operating segment identified in accordance with IFRS 8.
8.4.2. Negative goodwill
If the acquirer’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities exceeds the cost of the business combination the acquirer:
(a) reviews the identification and measurement of the identifiable assets, liabilities and
contingent liabilities of the acquiree and the determination of the cost of the business
combination;
(b) immediately recognises any excess existing after the new measurement in the income
statement.
8.5 Derecognition criteria
Intangible assets are derecognised in the balance sheet following disposal or when no
economic future benefit is expected from its use or disposal.
9. Liabilities, debt securities issued (and subordinated
liabilities)
The various forms of interbank and customer funding are recognised within the balance sheet
items 10 “Due to banks”, 20 “Due to customers” and 30 “Debt securities issued”. These items
also include liabilities recognised by a lessee in financial leasing operations.
9.1 Recognition criteria
The liabilities in question are recognised in the balance sheet at the time when the funding is
received or when the debt securities are issued.
The amount initially recognised is the fair value, which is normally the same as either the
consideration received or the issue price, inclusive of any additional expenses or income that
are directly attributable to the transaction and determinable from the outset, regardless of
when they are paid.
The amount of the initial recognition does not include all those costs that are reimbursed by
the creditor counterparty or that are attributable to internal costs of an administrative
character.
9.2 Measurement criteria
After initial recognition medium to long-term financial liabilities are measured at amortised
cost using the effective interest method as defined in previous paragraphs.
Short-term liabilities, for which the time factor is insignificant, are measured at cost.
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9.3 Derecognition criteria
Financial liabilities are derecognised in the balance sheet when they mature or are
extinguished.
The repurchase of own securities issued results in derecognition of the securities with the
consequent redefinition of the liability for debt instruments issued. Any difference between the
repurchase value of the own securities and the corresponding carrying value of the liabilities is
recognised in the income statement under the item 100 “Income from the disposal or
repurchase of d) financial liabilities”. Any subsequent re-issue of the securities previously
subject to derecognition in the accounts constitutes a new issue for accounting purposes with
the consequent recognition at the new issue price without any effect in the income statement.
10. Tax assets and liabilities
Tax assets and liabilities are stated in the balance sheet under the items 140 “Tax assets” and
80 “Tax liabilities”.
10.1. Current tax assets and liabilities
Current tax for the current and prior periods is recognised as a liability to the extent that it
has not yet been settled; any excess compared to the amount due is recognised as an asset.
Current tax liabilities (assets) for the current and prior years, are measured at the amount
expected to be paid to/recovered from taxation authorities, using the tax rates and tax laws in
force.
Current tax assets and liabilities are derecognised in the accounts in the year in which the
assets are realised or the liabilities are extinguished.
10.2. Deferred tax assets and liabilities
Deferred tax liabilities are recognised for all taxable temporary differences unless the deferred
tax liability arises from:
goodwill for which amortisation is not deductible for tax purposes or
the initial recognition of an asset or a liability in a transaction which:
− is not a business combination and
− at the time of the transaction, affects neither the accounting nor the taxable profit.
Deferred tax assets are not calculated for higher values of assets for which the tax regime has
been suspended relating to equity investments and to reserves for which the tax regime has
been suspended because it is considered to-date there are no reasonable grounds to assume
they will be taxed in future.
Deferred tax liabilities are recognised within the balance sheet item 80 b) “Tax liabilities
deferred”.
A deferred tax asset is recognised for all deductible temporary differences if it is probable that
a taxable income will be used against which it will be possible to use the deductible temporary
difference, unless the deferred tax asset arises from:
negative goodwill which is treated as deferred income;
the initial recognition of an asset or liability in a transaction which:
− is not a business combination and
− affects neither the accounting profit nor the taxable profit at the time of the transaction.
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Assets for prepaid taxes are recognised under the balance sheet item 140 b) “Tax assets,
deferred”.
Deferred tax assets and deferred tax liabilities are subject to constant monitoring and are
measured using the tax rates that it is expected will apply in the period in which the tax asset
will be realised or the tax liability will be extinguished on the basis of the tax regulations
established by laws currently in force.
Deferred tax assets and deferred tax liabilities are derecognised in the accounts in the year in
which:
the temporary difference which gave rise to them becomes payable with regard to
deferred tax liabilities or deductible with regard to deferred tax assets;
the temporary difference which gave rise to them is no longer valid for tax purposes.
Deferred tax assets and deferred tax liabilities must not normally be discounted to present
values nor offset one against the other,
11. Non-current assets and disposal groups held for sale –
Liabilities associated with disposal groups held for sale
Non-current assets and liabilities and groups of non-current assets and liabilities for which it
is presumed that the carrying value will recovered by selling them rather than by continued
use are classified respectively under items 150 “Non-current assets and disposal groups held
for sale” and 90 “Liabilities associated with disposal groups held for sale”.
In order to be classified within these items the assets or liabilities (or disposal groups) must be
immediately available for sale and there must be active, concrete programmes to sell the
assets or liabilities in the short term.
These assets or liabilities are measured at the lower of the carrying amount and their fair
value net of disposal costs. Profits and losses attributable to groups of assets or liabilities held
for sale are recognised in the income statement under item 310 “Pre-tax profit from
discontinued operations”. Profits and losses attributable to individual assets held for disposal
are recognised in the income statement under the most appropriate item.
12. Provisions for risks and charges
12.1. Definition
A provision is defined as a liability of uncertain timing or amount.
A contingent liability, however, is defined as:
a possible obligation, the result of past events, the existence of which will only be confirmed
by the occurrence or (non occurrence) of future events that are not totally under the control
of the enterprise;
a present obligation that is the result of past events, but which is not recognised in the
accounts because:
− it is improbable that financial resources will be needed to settle the obligation;
− the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the accounts, but are only reported, unless they are
considered a remote possibility.
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12.2. Recognition criteria and measurement
A provision is recognised if and only if:
there is a present obligation (legal or implicit) that is the result of a past event; and
it is probable that the use of resources suitable for producing economic benefits will be
required to fulfil the obligation; and
a reliable estimate can be made of the amount arising from fulfilment of the obligation.
The amount recognised as a provision represents the best estimate of the expenditure required
to settle the present obligation at the reporting date and reflects the risks and uncertainties
that inevitably characterise a number of facts and circumstances. The amount of a provision is
measured by the present value of the expenditure that it is assumed will be necessary to settle
the obligation where the effect of the present value is a substantial aspect. Future events that
might affect the amount required to settle the obligation are only taken into consideration if
there is sufficient objective evidence that they will occur.
Provisions made for risks and charges include those for the risk attaching to any existing tax
litigation.
12.3. Derecognition criteria
The provision is reversed when it becomes improbable that the use of resources suitable for
producing economic benefits will be required to settle the obligation.
13. Foreign currency transactions
13.1. Definition
A foreign currency is a currency other than the functional currency of the entity, which is the
currency of the primary economic environment in which an entity operates.
13.2. Recognition criteria
A foreign currency transaction is recorded at the time of initial recognition in the functional
currency applying the spot exchange rate between the functional currency and the foreign
currency ruling on the date of the transaction.
13.3. Measurement criteria
At each reporting date:
(a) foreign currency monetary 14 amounts are translated using the closing rate;
(b) non-monetary items 15 measured at historical cost in foreign currency are translated using
the exchange rate at the date of the transaction;
14
“Monetary” items are defined as relating to determined sums in foreign currency, which is to say to assets and
liabilities which must be received or paid for a determined amount in foreign currency. The defining characteristic of a
monetary item is therefore the right to receive or an obligation to pay a set or calculable number of foreign currency
units. See the note on “monetary” items for the contrary.
15 See the note on “monetary” items for the contrary.
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(c) non-monetary items carried at fair value in a foreign currency are translated using the
exchange rates that existed on the dates when the fair values were determined.
Exchange rate differences arising from the settlement of monetary items, or from the
translation of monetary items at rates different from those at which they were translated when
initially recognised during the year or in previous financial statements, are recognised in the
income statement for the period except for exchange rate differences arising on monetary
items that form part of a net investment in a foreign operation.
Exchange rate differences arising from a monetary item that forms part of a net investment in
a foreign operation of an entity that prepares financial statements are recognised in the
income statement of the individual company financial statements of the entity that prepares
the financial statements or the individual company financial statements of the foreign
operation. These exchange rate differences in the financial statements that include the foreign
operation (e.g. in the consolidated accounts when the foreign operation is a subsidiary) are
initially recognised as a separate component in equity and are recognised in the income
statement at the time of the disposal of the net investment.
When a profit or loss on a non-monetary item is recognised directly in equity, each change in
that profit or loss is also recognised directly in equity. However, when a profit or loss on a nonmonetary
item is recognised in the income statement each change in that profit or loss is
recognised in the income statement.
The financial statements of foreign subsidiaries and associates which employ an accounting
currency that is different from that of the Parent are translated using the exchange rates
ruling at the reporting date
14. Other information
14.1 Treasury shares
Treasury shares if present in the UBI Group portfolio are deducted from equity. No profit or
loss arising from the purchase, sale, issue or cancellation of treasury shares is recognised in
the income statement.
The differences between the purchase and sale price arising from these transactions are
recorded in equity reserves.
14.2 Provisions for guarantees granted and commitments
Provisions made on a cases by case and collective basis to estimate possible payments to be
made connected with the assumption of credit risks attaching to guarantees granted and
commitments assumed are calculated by applying the same criteria as that reported for loans.
These provisions are recognised within the item 100 “Other liabilities” against the item in the
income statement 130d “Net impairment losses on: other financial transactions”.
14.3 Employee benefits
14.3.1 Definition
Employee benefits are defined as all forms of consideration given by an enterprise in exchange
for services rendered by employees. Employee benefits can be classified as follows:
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short-term employee benefits (not including benefits due to employees for severance
payments and benefits paid in the form of equity instruments) due entirely within twelve
months after the service is rendered by employees;
post-employment benefits due after the contract of employment has terminated;
post-employment benefit plans subsequent to the termination of the employment contract
and that is agreements whereby the enterprise provides benefits subsequent to the
termination of the employment contract;
long-term benefits, other than the previous, due entirely within the twelve months
subsequent to the end of the financial year in which employee rendered the relative service.
14.3.2 Post employment benefits and defined benefit plans
14.3.2.1 Recognition criteria
Following the reform of supplementary pensions pursuant to Legislative Decree No. 252/2005,
portions of post-employment benefit funds maturing from 1 st January 2007 constitute a
“defined benefit plan”.
The liability relating to those portions is measured on the basis of the contributions due
without the application of any actuarial methods.
However, post-employment benefits maturing up until 31 st December 2006 continue to
constitute a “post-employment benefit” belonging to the “defined benefit plan” series and as
such require the amount of the obligation to be determined on an actuarial basis and to be
discounted to present values because the debt may be extinguished a long time after the
employees have rendered the relative service.
The amount is accounted for as a liability amounting to:
(a) the present value of the defined benefit obligation as at the reporting date;
(b) plus any actuarial gains (less any actuarial losses) recognised in a separate reserve in
equity;
(c) less any pension costs relating to past service rendered not yet recognised;
(d) less the fair value at the reporting date of any assets at the service of the plan.
14.3.2.2 Measurement criteria
As concerns the accounting treatment for actuarial gains/losses, the UBI Group has opted for
direct recognition of these items within fair value reserves in equity.
“Actuarial gains/losses” comprise adjustments arising from the reformulation of previous
actuarial assumptions as a result of actual experience or from changes in the actuarial
assumptions themselves.
The “Projected Unit Credit Method” is used to calculate the present value. This considers each
single period of service as giving rise to an additional unit of severance payment and therefore
measures each unit separately to arrive at the final obligation. This additional unit is obtained
by dividing the total expected service by the number of years that have passed from the time
service commenced until the expected payment date. Application of the method involves
making projections of future payments based on historical analysis of statistics and of the
demographic curve and discounting these flows on the basis of market interest rates. The rate
used for discounting to present value is calculated with reference to market interest rates
published on the reporting date of bonds issued by major companies, as the average of the
swap, bid and ask rates appropriately interpolated for intermediate maturity dates.
14.3.2.3 Stock Options/Stock Grants
Stock option and stock grant plans are defined as personnel remuneration schemes where the
service rendered by an employee (or a third party) is remunerated by using equity instruments
(including options on shares).
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The cost of these transactions is measured at the fair value of equity instruments granted and
is recognised in the income statement under item 180 a) “Administrative expenses, staff costs”
on a straight line basis over the original life of the plan.
The fair value determined relates to the equity instruments granted at the time of grant and
takes account of market prices, if available, and the terms and conditions upon which the
instruments were granted.
14.4 Segment reporting
Segment reporting is defined as the manner in which financial information on an enterprise is
reported by operating segment.
An operating segment is intended as a component of an entity:
that engages in business activities that generate revenues and expenses;
whose operating results are reviewed regularly by the entity’s chief operating decision
maker, to make decisions about the resources to be allocated to the segment and
assess its performance;
for which discrete financial information is available.
Segment reporting is based on elements that senior management uses to make operating
decisions (a “management approach”) and consequently the identification of operating
segments is performed on the basis of the current system of reporting to management which is
based primarily on management analysis of legally recognised entities.
Segment reporting is completed by information on the geographical areas in which revenues
are produced and assets are held.
14.5 Revenues
14.5.1 Definition
Revenues are the gross inflow of economic benefits resulting from business arising from the
ordinary operating activities of an enterprise when these inflows create an increase in equity
other than an increase resulting from payments made by shareholders.
14.5.2 Recognition criteria
Revenues are measured at the fair value of the consideration received or due and are
recognised in the accounts when they can be reliably estimated.
The result of the rendering of services can be reliably estimated when the following conditions
are met:
the amount of revenue can be measured reliably;
it is probable that the economic benefits arising from the transaction will flow to the
company;
the stage of completion of the operation as at the reporting date can be measured reliably;
the costs incurred, or to be incurred, to complete the transaction can be measured reliably.
Revenue recognised in return for services rendered is recognised by reference to the stage of
completion of the transaction.
Revenue is only recognised when it is probable that the economic benefits arising from the
transaction will be enjoyed by the company. Nevertheless when the recoverability of an
amount already included within revenues is uncertain, the amount not recoverable or the
amount for which recovery is no longer probable is recognised as a cost, instead of adjusting
the revenue originally recognised.
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Revenue arising from the use by third parties of the company’s assets which generate interest
or dividends are recognised when:
it is probable that the economic benefits arising from the transaction will be received by the
enterprise;
the amount of the revenue can be reliably measured.
Interest is recognised on an accruals basis that takes into account the effective yield of the
asset. In detail:
interest income includes the amortisation of any discounts, premiums or other differences
between the initial carrying amount of a security and its value at maturity;
arrears of interest that are considered recoverable are recognised within the item 10
“Interest and similar income”, but only the part considered recoverable.
Dividends are recognised when shareholders acquire the right to receive payment.
Expenses or revenues resulting from the sale or purchase of financial instruments, determined
by the difference between the amount paid or received for the transaction and the fair value of
the instrument are recognised in the income statement on initial recognition of the financial
instrument when the fair value is determined:
by making reference to current and observable market transactions in the same
instrument;
by using measurement techniques which use, as variables, only data from observable
markets.
14.6 Expenses
Expenses are recognised in the accounts at the time at which they are incurred, while
following the criteria of matching expenses to revenues that result directly and jointly from the
same transactions or events. Expenses that cannot be associated with revenues are recognised
immediately in the income statement.
Expenses directly attributable to financial instruments measured at amortised cost and
determinable from the outset, regardless of the time at which they are settled, flow to the
income statement by applying the effective interest rate, a definition of which is given in the
section “Loans and receivables”.
Impairment losses are recognised through profit and loss in the year in which they are
measured.
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A.3 – INFORMATION ON FAIR VALUE
A Information on fair value
A.3.1 Transfers between portfolios
No reclassifications have been performed in the UBI Banca Group either in the current year, or
in the previous year in financial asset portfolios from asset classes recognised at fair value into
classes recognised at amortised cost, with regard to the possibilities introduced by EC
Regulation No. 1004/2008 of the European Commission.
To complete the information, we report the following with regard to shares held in 2012 as part
of private equity and merchant banking business. In order to provide a better view of the
nature of this portfolio, the investments of which are managed and monitored by the Group
using a fair value approach designed to represent the Group’s intention to draw benefit from
an increase in the value in the medium to long-term of the companies invested in, these
shares have been recognised within balance sheet asset item 30 “Financial assets designated
at fair value” instead of within item 20 “Financial assets held for trading”. This improved
accounting treatment has not made any impact on the income statement nor on Group equity.
A.3.2 Fair value hierarchy
The fair value used for measuring financial instruments is determined on the basis of criteria,
listed below, which involve the use of what are termed observable or unobservable inputs.
Observable inputs are parameters developed on the basis of available market data and they
reflect the assumptions that market participants should use when they price financial
instruments. On the other hand, unobservable inputs are parameters for which market data
are not available and which are therefore developed on the basis of the best available
information on the assumptions that market participants should use when they price financial
instruments.
Fair value determined on the basis of level one inputs:
the measurement is based on observable inputs, i.e. prices listed on active markets for
identical financial instruments to which the entity can gain access on the valuation date of the
instrument. A market is defined as active when the prices quoted reflect normal market
transactions, are regularly and readily available and if those prices represent actual and
regular market trading.
Fair value determined on the basis of level two inputs:
the measurement is performed using methods that are used if the instrument is not listed on
an active market and is therefore based on inputs that are different from those of level one.
The measurement of the financial instrument is based on prices inferred from market
quotations for similar assets or by using measurement techniques for which all the significant
factors – credit spreads and liquidity spreads – are inferred from observable market variables.
Although this is the application of a measurement technique, there is basically no element of
discretion in the resulting price, because the most important parameters used are drawn from
markets and the calculation methods used replicate quotations existing on active markets.
Fair value determined on the basis of level three inputs:
the measurement is performed using methods which consist of measuring unlisted
instruments by employing significant inputs not inferable from markets and which therefore
involve the use of estimates and assumptions made by management.
The choice of the method of measuring fair value is not optional, because the methods must
be applied in hierarchical order.
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Level 1
Equity instruments quoted on regulated markets, bonds quoted on the EuroMot circuit and
those for which prices that represent actual and regular market transactions continuously
available from the main contribution platforms occurring on the basis of a normal reference
period with price fluctuations over the last five days which occur at intervals considered
normal are considered as quoted on an active market.
The fair value of these instruments is given by the reference price recorded on the last working
day of the reference month on the respective markets on which they are listed, where available
and considered reliable. Otherwise the official price is considered first and then the opening
stock market price in that order.
Those derivatives for which a quotation on an active reference market (e.g. IDEM) are also
considered as quoted, to the extent that the markets are considered highly liquid. Their fair
value is the official closing price recorded on the last day of the month on the respective
markets on which they are quoted.
As concerns OICR units (collective investment instruments), mutual funds, Sicav’s and hedge
funds, the fair value is level one if given by the net asset value (NAV) provided by a fund
administrator as at the valuation date, or on the basis of contractually established periodic
dates. Fair value level one is only given by the closing price on the respective listed markets for
exchange trade funds (ETFs) and listed funds (including listed property funds).
As concerns private equity funds, the fair value is only considered level one in the presence of
a quoted price on an active market.
Level 2
Where no prices are available on active markets, the fair value of the financial instruments is
measured by using measurement models which make use of market inputs. The resulting
measurement is therefore based on factors inferred from official quotations, essentially similar
in terms of risk factors, by applying a determined method of calculation.
With regard to derivatives, almost all these consist of over the counter instruments and they
are therefore measured using internal models that use market inputs. The options implicit in
structured bonds and in the respective hedging derivatives are measured using appropriate
pricing models which make use of directly observable market inputs (e.g. interest rate curves,
volatility matrices and correlations, exchange rates). The calculation methodologies used
replicate the prices of financial instruments listed on active markets without making
discretionary assumptions which might influence the final price.
Stakes in private equity funds are included in level two, where the fair value is calculated on
the basis of the NAV provided by the manager and updated if necessary on the basis of
communications received from the fund (dividend distributions, redemptions, etc.), since the
date of the communication of the last NAV available as at the valuation date.
As concerns equity instruments recognised within the available-for-sale portfolio, these are
classified within level two if they are measured on the basis of measurement methods (direct
transactions method and the comparable transactions method) which consider transactions
occurring in the instrument in a reasonable period of time with respect to the date of
measurement or, in some cases, by means of the stock market multiples method for
comparable companies and if the value calculated using these measurement methods is not
adjusted, for example, to eliminate the possible effect of a control premium present in the
aforementioned transactions considered for measurements purposes.
277

Level 3
Level three is defined as the fair value determined using measurement models which use
inputs that are not directly observable on markets and which involve the use of estimates and
assumptions by management.
This level includes hedge funds for which adjustments have been made to the official NAV
prices communicated by the management company in order to take account of liquidity
and/or counterparty risk. For private equity funds too, any adjustment made to the NAV
prices to take account of particular risk positions results in a classification in this fair value
hierarchy level.
Complex OTC derivatives (not comprised within level two) are measured using internal models
that use implicit assumptions; the credit risk component is also considered explicitly for these.
The remaining part of the equity instruments classified as available-for-sale are measured
using methods based on an analysis of the fundamentals of the company in question and, as
an alternative of last resort, at cost. Shareholdings are also classified within level three for
which the fair value, even if calculated using the measurement methods described for level
two, has been adjusted to eliminate for example the possible effect of a control premium
present in the comparable transactions considered for measurement purposes.
It is necessary to use measurement models to measure the level three fair value of options
with underlying equity instruments that involve the use of market inputs that are not directly
observable and which involve the use of estimates and assumptions in the measurement. More
specifically the measurement instruments are designed using appropriate calculation methods
based on specific assumptions that regard:
• the performance of future cash flows affected by future events, to which probabilities are
assigned based on historical experience or on behavioural assumptions;
• determined input parameters not observable on active markets which are estimated from
financial instruments observable on the market but not identical to the instruments
measured.
Information on the measurement models used for securities and derivatives
The target instrument used for pricing securities and derivatives in the UBI Group is the
software application Mxg2000 by Murex. This software takes account of all market factors in
measuring the value of financial instruments.
The majority of the market data is acquired through the information provider Reuters, partly
in real time (i.e. prices, yield curves and exchange rates) and partly at preset times (ATM
volatility for swaptions and ATM volatility and smile curves for caps and floors). The
application is also fed “on demand” with a series of market parameters supplied by the
provider Bloomberg: correlations, dividend yields, index and forex volatility.
Fair value is calculated daily as follows:
• the market parameters acquired in real time by Mxg2000 (prices, yield curves and
exchange rates) are crystallised at 4.45 p.m. and used as reference data for calculating
the mark-to-market. The last update of the day for the volatilities of swaptions and
caps/floors (and the other market data acquired on demand if necessary) is performed
at 4.45 p.m.;
• at the end of the day closure (which occurs at 9.00 p.m.), a series of software
procedures are performed which extract various information from Mxg2000 including
the reference mark-to-market for the day.
The pricing of unlisted financial assets is currently calculated using the software application
Risk Watch by Algorithmics. For these instruments the future cash flows are discounted to
present values using interest rates which take into account the specific nature of the issuer
(credit spread).
OTC derivatives on interest rates and exchange rates and derivatives used to hedge bonds
(with interest rates and currencies as the underlying) are measured using the Mxg2000 target
software. Values are measured for all contracts which can be priced using closed formula
models. In detail, the main pricing models used in Mxg2000 for OTC derivatives are: Black
278

Yield, Black Fwd, Black Swap Yield, Cox Fwd, Trinomial, Lnormal and CMS Convexity
Analytical.
Derivative instruments that are not managed in Murex, relating to embedded options in
structured bonds issued and in the respective derivative hedges are measured using internal
models (stochastic models with MonteCarlo simulations).
Pricing for unlisted “plain vanilla” liabilities securities and the “plain vanilla” component of
structured securities is currently calculated on the Front Office Mxg2000 target system.
The pricing models employed for securities and derivatives are used continuously over time
and are only modified when substantial market changes occur.
A.3.2.1 Accounting portfolios: distribution by fair value level
Financial assets/liabilities measured at fair
value
31.12.2012 31.12.2011
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
1. Financial assets held for trading 3,431,331 586,164 6,440 2,149,230 635,890 87,297
2. Financial assets designated at fair value 109,664 2,812 87,965 104,846 - 21,328
3. Available-for-sale financial assets 12,796,489 1,056,904 147,215 6,911,316 1,029,653 98,740
4. Hedging derivatives - 1,478,322 - - 1,090,498 -
Total 16,337,484 3,124,202 241,620 9,165,392 2,756,041 207,365
1. Financial liabilities held for trading 1,163,939 609,935 - 438,088 625,585 -
2. Financial liabilities designated at fair value - - - - - -
3. Hedging derivatives - 2,234,989 - - 1,739,685 -
Total 1,163,939 2,844,924 - 438,088 2,365,270 -
A.3.2.2 Annual changes in financial assets recognised at fair value (Level 3)
1. Opening balances 87,297 21,328 98,740 -
2. Increases 2,614 86,549 64,522 -
2.1. Purchases 60 5,573 -
2.2. Profits recognised in:
2.2.1. Income statement 414 7,359 515 -
- of w hich gains 306 5,612 - -
2.2.2. Equity X X 10,034 -
2.3. Transfers from other levels 1,819 79,040 47,812 -
2.4. Other increases 381 90 588 -
3. Decreases (83,471) (19,912) (16,047) -
3.1.Sales (1,875) (1,690) (11,796) -
3.2. Redemptions (3,817) -
3.3. Losses recognised in:
held for trading
FINANCIAL ASSETS
designated at fair
value
available-for-sale
hedges
3.3.1. Income statement (2,071) (8,582) (1,428) -
- of w hich losses (2,071) (8,577) (1,298) -
3.3.2. Equity X X (969) -
3.4. Transfers to other levels (79,040) (5,525) (1,306) -
3.5. Other decreases (485) (298) (548) -
4. Closing balances 6,440 87,965 147,215 -
In application of the Parent’s classification and measurement criteria for shareholdings, the
subsidiary, Centrobanca S.p.A., reclassified its merchant banking equity investments out of
“Financial assets held for trading” and into “Financial assets designated at fair value”. The
total amount of €79,040 thousand was already classified within level three as at 31 st
December 2011 and in this sense this was just a transfer between financial asset classes. In
compliance with the methodology described in point A.3.2., the transfers reported in item 2.3
almost entirely regarded equity investments in SACBO Società per l’Aeroporto Civile Orio al
Serio, Sia S.p.A. and Siteba S.p.A and CYPRUS Bank obligations.
279

The losses reported in item 3.3.1 relate mainly to hedge funds amounting to €5,827 thousand
and the equity interests in Gatto Astucci S.p.A (€2,250 thousand), Medinvest International Sca
(€1,025 thousand) and Biocel Center (€400 thousand).
A.3.2.2 Annual changes in financial liabilities recognised at fair value (level three)
No financial liabilities recognised at fair value level three exist in the UBI Group.
A.3.3 Information on “day one profit/loss”
The information relates to paragraph 28 of the IFRS which concerns differences between
transaction prices and the value obtained by using measurement techniques that emerge on
initial recognition and that are not immediately recognised through profit and loss on the
basis of paragraphs AG76 and AG76A of IAS 39.
Where this type of event occurs, indication must be given of the accounting policies adopted by
the bank for recognition through profit or loss of the differences that arise in this manner
subsequent to initial recognition of the instrument.
UBI Banca has not performed any transactions for which a difference between the purchase
price and the value of the instrument obtained using internal measurement techniques has
arisen on initial recognition.
280

Part B – Notes to the consolidated balance
sheet
ASSETS
SECTION 1 Cash and cash equivalents – Item 10
1.1 Cash and cash equivalents: composition
3 1.12 .2 0 12 3 1.12 .2 0 11
a) Cash in hand 641,608 625,835
b) Deposits with central banks -
To ta l 6 4 1,6 0 8 6 2 5 ,8 3 5
SECTION 2 Financial assets held for trading – Item 20
2.1 Financial assets held for trading: composition by type
Ite ms /Amo u nts
3 1.12 .2 0 12
3 1.12 .2 0 12
3 1.12 .2 0 11
3 1.12 .2 0 11
L 1 L 2 L 3 L 1 L 2 L 3
A. O n-ba la nc e s h e e t a s s e ts
1. Debt instruments 3,415,759 84 - 3,415,843 2,135,752 84 - 2,135,836
1.1 Structured instruments 111 111 173 - - 173
1.2 Other debt instruments 3,415,648 84 3,415,732 2,135,579 84 - 2,135,663
2. Equity instruments 13,455 5,370 18,825 12,811 - 85,850 98,661
3. Units in O.I.C.R.
(collective investment instruments) 372 1,070 1,442 447 101 1,447 1,995
4. Financing - - - - - 38,939 - 38,939
4.1 Reverse repurchase agreements - - - - -
4.2 Other - - 38,939 - 38,939
Total A 3 ,4 2 9 ,5 8 6 8 4 6 ,4 4 0 3 ,4 3 6 ,110 2 ,14 9 ,0 10 3 9 ,12 4 8 7 ,2 9 7 2 ,2 7 5 ,4 3 1
B. De riva tive in s trume nts
1. Financial derivatives 1,745 586,079 - 587,824 220 596,766 - 596,986
1.1 for trading 1,745 586,079 587,824 220 596,766 - 596,986
1.2 connected with fair value options - - - - -
1.3 other - - - - -
2. Credit derivatives - - - - - - - -
2.1 for trading - - - - - - - -
2.2 connected with fair value options - - - - - - - -
2.3 other - - - - - - - -
Total B 1,7 4 5 5 8 6 ,0 7 9 - 5 8 7 ,8 2 4 2 2 0 5 9 6 ,7 6 6 - 5 9 6 ,9 8 6
Total (A+B) 3 ,4 3 1,3 3 1 5 8 6 ,16 3 6 ,4 4 0 4 ,0 2 3 ,9 3 4 2 ,14 9 ,2 3 0 6 3 5 ,8 9 0 8 7 ,2 9 7 2 ,8 7 2 ,4 17
As opposed to the previous year, level three equity instruments no longer include equity
investments relating to merchant banking business carried out mainly by Centrobanca Spa.
The assets in question have been reclassified as financial assets designated at fair value.
Item 3 “OICR units (collective investment instruments)” relates exclusively to remaining
investments in hedge funds.
281

2.2 Financial assets held for trading: composition by debtors/issuers
2.2 Financial assets hel d for trading: composition by debtors/issuers
3 1.12 .2 0 12 3 1.12 .2 0 11
A. ASSETS
1. D e bt ins trum e nts 3,415,843 2 ,13 5 ,8 3 6
a) Go vernments and Central Banks 3,393,213 2,108,953
b) Other public autho rities - 7
c) Banks 7,616 7,377
d) Other is s uers 15,014 19,499
2 . Equity ins trum e nts 18,825 9 8 ,6 6 1
a) Banks 4,176 2,598
b) Other is s uers : 14,649 96,063
- ins urance co mpanies -
- financial ins titutio ns 5,296 85,848
- no n financial ins titutio ns 9,344 6,415
- o ther 9 3,800
3 . Units in O.I.C .R . (co llective inves tment ins truments ) 1,442 1,9 9 5
4 . F ina nc ing - 3 8 ,9 3 9
a) Go vernments and Central Banks -
b) Other public autho rities -
c) Banks -
d) Other 38,939
To ta l A 3,436,110 2 ,2 7 5 ,4 3 1
B. DERIVATIVE INSTRUM ENTS
a) Banks - -
- fair value 117,473 72,409
b) Cus to mers - -
- fair value 470,351 524,577
Total B 587,824 5 9 6 ,9 8 6
Total (A+B) 4,023,934 2 ,8 7 2 ,4 17
2.3 Financial assets held for trading: annual changes
Cha ng e s /Unde rlying a s s e ts De bt ins trume nts Equity ins trume nts
Units in O.I.C.R.
(c olle c tive in ve stme n t
in stru me nts)
Fina nc ing
To ta l
A. Ope ning ba la nc e s 2 ,13 5 ,8 3 6 9 8 ,6 6 1 1,9 9 5 3 8 ,9 3 9 2 ,2 7 5 ,4 3 1
B. Inc re a s e s 3 5 ,18 4 ,6 8 1 3 0 ,4 2 0 4 6 4 - 3 5 ,2 15 ,5 6 5
B.1 Purchases 33,905,079 28,085 260 - 33,933,424
B.2 Positive changes in fair value 29,933 1,514 96 - 31,543
B.3 Other changes 1,249,669 821 108 - 1,250,598
C. De c re a s e s (3 3 ,9 0 4 ,6 7 4 ) (110 ,2 5 6 ) (1,0 17 ) (3 8 ,9 3 9 ) (3 4 ,0 5 4 ,8 8 6 )
C.1 Sales (31,804,734) (23,909) (293) - (31,828,936)
C.2 Redemptions (1,637,020) (4,421) (397) - (1,641,838)
C.3 Negative changes in fair value (246) (2,560) (300) - (3,106)
C.4 Transfers to other portfolios - (79,040) - - (79,040)
C.5 Other changes (462,674) (326) (27) (38,939) (501,966)
D. Fina l ba la nc e s 3 ,4 15 ,8 4 3 18 ,8 2 5 1,4 4 2 - 3 ,4 3 6 ,110
Within debt instruments, item B.3 “Other changes” (increases), the amount of €1.16 million
relates to uncovered short positions existing at the end of the year. Similarly, item C.5,
“Other changes” (decreases) includes an amount of €438 million relating to the total
uncovered short positions existing at the end of the year before.
Item C.4 “Transfers to other portfolios” shows the transfer made by Centrobanca to the
financial assets designated at fair value of own equity investments connected with merchant
banking business, totalling €79.04 million.
282

SECTION 3 Financial assets designated at fair value –Item 30
3.1 Financial assets designated at fair value: composition by type
Ite ms /Amo unt s 3 1.12 .2 0 12 To t a l 3 1.12 .2 0 11
To t a l
L 1 L 2 L 3 L 1 L 2 L 3
1. Debt instruments - - - - - - - -
1.1 Structured instruments - - - - - - - -
1.2 Other debt instruments - - - - - - - -
2. Equity instruments 2,812 74,248 77,060 - - - -
3. Units in O.I.C.R. (c o lle c tive inve s tme n t in stru me nts ) 109,664 13,717 123,381 104,846 - 21,328 126,174
4. Financing - - - - - - - -
4.1 Structured - - - - - - - -
4.2 Other - - - - - - - -
To ta l 10 9 ,6 6 4 2,812 8 7 ,9 6 5 2 0 0 ,4 4 1 104,846 - 21,328 126,174
Co s t 10 9 ,6 6 4 2 ,8 12 8 7 ,9 6 5 2 0 0 ,4 4 1 10 4 ,8 4 6 - 2 1,3 2 8 12 6 ,17 4
: 103000O|1 – NOTA
With regard to units in O.I.C.R.s (collective investment instruments), level one investments
consisted of a hedge fund of the company Tages Capital SGR. The amount shown for level
three relates to the residual value of non-Group hedge funds. Further information on this
item is given at the foot of Table 7.1 in income statement Section 7 – “Net value change in
financial assets/liabilities designated at fair value”, which may be consulted.
In application of the Parent’s classification and measurement criteria for shareholdings,
Centrobanca reclassified the following shareholdings out of balance sheet item 20 “Financial
assets held for trading” into item 30 “Financial assets designated at fair value”. The
amounts transferred relate to the fair value of the single shareholdings as at 1 st January
2012:
- Humanitas S.p.A €28,593 thousand
- Immobiliare Mirasole Ord. €24,122 thousand
- Immobiliare Mirasole Priv. €13,625 thousand
- Pama S.p.A. €5,525 thousand
- Ecas €2,292 thousand
- Gatto Astucci €2,250 thousand
- Fratelli Maritime Gr €1,600 thousand
- Biocell €1,000 thousand
- Straight Video Srl €33 thousand
Consequently, all the results of the operations of those shareholdings have been recognised
within item 110 of the income statement “Net profit on financial assets and liabilities
designated at fair value“.
283

3.2 Financial assets designated at fair value: composition by debtors/issuers
Ite m s / A m o unts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. D e bt ins trum e nts - -
a) Go vernments and Central Banks - -
b) Other public autho rities - -
c) Banks - -
d) Other is s uers - -
2 . Equity ins trum e nts 77,060 -
a) Banks - -
b) Other is s uers : 77,060 -
- ins urance co mpanies - -
- financial co mpanies 33,559 -
- no n financial co mpanies 43,501 -
- o ther - -
3 . Units in O.I.C .R . (c o lle c tiv e inv e s tm e nt ins trum e nts ) 123,381 126,174
4 . F ina nc ing - -
a) Go vernments and Central Banks - -
b) Other public autho rities - -
c) Banks - -
d) Other - -
To ta l 200,441 126,174
3.3. Financial assets designated at fair value: annual changes
De bt ins trume nts
Equity ins trume nts
Units in O.I.C.R.
(c o lle c tive in ve stme n t
in stru me n ts)
Fina nc ing
To ta l
A. Ope ning ba la nc e s - - 12 6 ,17 4 - 12 6 ,17 4
B. Inc re a s e s - 8 4 ,2 14 2 7 ,15 4 - 111,3 6 8
B.1 Purchases - 60 20,000 - 20,060
B.2 Positive changes in fair value - 5,023 4,464 - 9,487
B.3 Other changes - 79,131 2,690 - 81,821
C. De c re a s e s - (7 ,15 4 ) (2 9 ,9 4 7 ) - (3 7 ,10 1)
C.1 Sales - (1,690) - - (1,690)
C.2 Redemptions - - (23,697) - (23,697)
C.3 Negative changes in fair value - (5,464) (5,827) - (11,291)
C.4 Other changes - - (423) - (423)
D. Fina l ba la nc e s - 7 7 ,0 6 0 12 3 ,3 8 1 - 2 0 0 ,4 4 1
Per
The item B.3 “Other changes” (increases) includes the amount of €79.04 million referred to in the note at the
foot of table 3.1.
284

SECTION 4 Available-for-sale financial assets – Item 40
4.1 Available-for-sale financial assets: composition by type
Ite ms /Amo unts 3 1.12 .2 0 12 To ta l 3 1.12 .2 0 11
To ta l
L 1 L 2 L 3 L 1 L 2 L 3
1. Debt instruments 12,603,798 1,002,549 7,466 13,613,813 6,621,026 920,410 10,296 7,551,732
1.1 Structured instruments 166,558 - 2,069 168,627 73,426 - 3,773 77,199
1.2 Other debt instruments 12,437,240 1,002,549 5,397 13,445,186 6,547,600 920,410 6,523 7,474,533
2. Equity instruments 154,798 26 139,749 294,573 251,226 46,963 88,444 386,633
2.1 At fair value 154,798 - 121,687 276,485 251,226 46,937 54,467 352,630
2.2 At cost - 26 18,062 18,088 - 26 33,977 34,003
3. Units in O.I.C.R.
(collective investment instruments) 37,894 54,329 - 92,223 39,064 62,280 - 101,344
4. Financing - - - - - - - -
To ta l 12 ,7 9 6 ,4 9 0 1,0 5 6 ,9 0 4 14 7 ,2 15 14 ,0 0 0 ,6 0 9 6 ,9 11,3 16 1,0 2 9 ,6 5 3 9 8 ,7 4 0 8 ,0 3 9 ,7 0 9
Equity instruments are recognised within “Level three” if, for example, in the absence of a
price quoted on an active market, their fair value is estimated by assuming the value at cost
or the quota of the equity corresponding to the interest held.
In consideration of the particular nature of the shareholding, the equity investment held by
Banca Carime Spa and by Banca Regionale Europea Spa in the Bank of Italy of
approximately €2,246 thousand is recognised at cost. Amounts recognised at cost also
include all the equity investments held by the Group for the purposes of a more solid
presence on its local markets and for the development of commercial agreements.
Equity instruments measured at fair value level one consist primarily of Intesa San Paolo
(€148.4 million ) and A2A (€4.9 million).
The units in O.I.C.R.s – Level one relate almost exclusively to investments in the Polis
Portafoglio Immobiliare fund amounting to €8.4 million, to the Trackers EURSTOXX50 ETF
amounting to €19.5 million and to the Lyxor EU ST 50 ETF amounting to €9.9 million.
The units classified within level two relate to investments in private equity funds.
4.2 Available-for-sale financial assets: composition by debtors/issuers
Ite m s / A m o unts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. D e bt ins trum e nts 13 ,6 13 ,8 13 7 ,5 5 1,7 3 2
a) Go vernments and Central Banks 12,179,093 5,964,174
b) Other public autho rities - -
c) Banks 848,232 914,064
d) Other is s uers 586,488 673,494
2 . Equity ins trum e nts 2 9 4 ,5 7 3 3 8 6 ,6 3 3
a) Banks 184,833 275,412
b) Other is s uers : 109,740 111,221
- ins urance co mpanies 2,825 4,131
- financial co mpanies 13,470 14,877
- no n financial co mpanies 92,793 91,579
- o ther 652 634
3 . Units in O.I.C .R . (co llective inves tment ins truments ) 9 2 ,2 2 3 10 1,3 4 4
4 . F ina nc ing - -
a) Go vernments and central banks - -
b) Other public autho rities - -
c) Banks - -
d) Other - -
To ta l 14 ,0 0 0 ,6 0 9 8 ,0 3 9 ,7 0 9
Equity instruments include the following shares acquired by the network banks following
partial conversions of restructured loans (figures as at 31/12/2012):
• Aedes Ordinary €550 thousand;
• Gabetti cat. B €659 thousand
• GGP Green Field (A1-A3) €3,845 thousand
• Limoni €2,321 thousand.
285

|1 - NOTA
4.3 Available-for-sale financial assets: hedged assets
Ite ms /Co mpo ne nts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. Financial assets subject to fair value specific hedge -
a) interest rate risk 4,093,830 3,913,760
b) price risk - -
c) currency risk - -
d) credit risk - -
e) multiple risks - -
2. Financial assets subject to cash flow specific hedge -
a) interest rate risk - -
b) currency risk - -
c) other - -
To ta l 4 ,0 9 3 ,8 3 0 3 ,9 13 ,7 6 0
4.4 Available-for-sale financial assets: annual changes
De bt ins trume nts
Equity ins trume nts
Units in O.I.C.R.
(c olle c tive inve stme nt
instrume nts )
Fina nc ing
To ta l
A. Ope ning ba la nc e s 7 ,5 5 1,7 3 2 3 8 6 ,6 3 3 10 1,3 4 4 - 8 ,0 3 9 ,7 0 9
B. Inc re a s e s 13 ,0 4 7 ,7 3 1 4 9 ,4 6 5 2 7 ,3 0 4 - 13,124,500
B.1 Purcha ses 11,709,233 3,511 18,708 - 11,731,452
B.2 Positive cha nge s in fair value 1,135,717 28,961 4,162 - 1,168,840
B.3 Reve rsal of impa irment losses - 442 3,622 - 4,064
- recognise d in the income statement - - - - -
- recognise d in e quity - 442 3,622 - 4,064
B.4 Transfers from other portfolios - 243 - - 243
B.5 Othe r change s 202,781 16,308 812 - 219,901
C. De c re a s e s (6 ,9 8 5 ,6 5 0 ) (14 1,5 2 5 ) (3 6 ,4 2 5 ) - (7 ,16 3 ,6 0 0 )
C.1 Sales (6,698,645) (103,266) (11,977) - (6,813,888)
C.2 Rede mptions (256,326) - (3,687) - (260,013)
C.3 Nega tive c hanges in fair value (5,317) (969) (1,817) - (8,103)
C.4 Impairme nt losses (265) (37,117) (18,886) - (56,268)
- recognise d in the income statement (265) (37,117) (18,763) - (56,145)
- recognise d in e quity - - (123) - (123)
C.5 Transfers to other portfolios - - - - -
C.6 Othe r change s (25,097) (173) (58) - (25,328)
D. Fin a l ba la nc e s 13 ,6 13 ,8 13 2 9 4 ,5 7 3 9 2 ,2 2 3 - 14 ,0 0 0 ,6 0 9
Purchases of debt instruments consisted mainly of investments in government securities
(approximately €11.4 billion), while the remaining part consisted of purchases of bonds
issued by major banks.
The effects of the narrowing of the BTP-BUND spread led to an improvement in market
prices for debt instruments which had a positive impact on the valuation reserve with a net
increase in fair value of €757 million (net of taxes).
Sales of equity instruments included an amount relating to Intesa San Paolo totalling
€79.213 million.
Impairment losses charged to the income statement relate mainly to shares held in Intesa
Sanpaolo S.p.A. amounting to €31,766 thousand.
Income statement table 8.2 “Net impairment losses on available-for-sale financial assets:
composition” may be consulted for further information.
286

The schedule below shows changes and the effects in the income statement of the shares
held in Intesa Sanpaolo S.p.A..
historical values
amounts
31.12.2011
movements in reserves and in the
income statement as at 31.12.2011
number of
shares
cost
price
per
share
fair
value
reversal of share
to reserve (gross
of tax)
recognition in
the income
statement
(impairment)
186,458,028 881,325 1.2891 240,363 0 (112,542)
new historical
amounts
number of
shares
cost
amounts
31.12.2012
price
per
share
fair
val ue
movements in reserves and in the income
fair val ue of
share in
reserve (gross
of tax)
statement as at 31.12.2012
recognition
in the
income
statement
(impairment)
recognition
in the
income
statement
114,129,014 786,371 1.3000 148,368 21,571 (31,766) 14,022
Purchases of O.I.C.R. units amounting to €9.9 million relate to the ETF LYXOR EU ST 50
and to units in private equity funds.
Impairment losses charged to the income statement regarded the Centrobanca Sviluppo
Impresa Fund amounting to €12.5 million, the Polis Portafoglio Immobiliare Fund
amounting to €4.4 million and other private equity funds amounting to €1.8 million.
SECTION 5 Held-to-maturity investments – Item 50
5.1 Held-to-maturity investments: composition by type
3 1.12 .2 0 12
3 1.12 .2 0 11
Type o f tra ns a c tio n / Gro up ite ms
Ca rrying
Amo unt
Fa ir va lu e
L 1 L 2 L 3
To ta l fa ir va lu e
L 1 L 2 L 3
To ta l fa ir
va lu e
1. De bt instruments 3,158,013 3,243,103 - - 3,243,103 - - - - -
1.1 Structured - - - - - - - - - -
1.2 Other de bt instruments 3,158,013 3,243,103 - - 3,243,103 - - - - -
2. Fina ncing - - - - - - - - - -
To ta l 3,158,013 3,243,103 - - 3,243,103 - - - - -
Ca rrying
Amo u nt
Fa ir va lue
These are securities purchased during the year to support net interest income.
287

5.2. Held-to-maturity investments: debtors/issuers
Type o f tra ns a c tio n/ A m o unts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. D e bt ins trum e nts 3 ,15 8 ,0 13 -
a) Go vernments and Central Banks 3,158,013 -
b) Other public autho rities - -
c) Banks - -
d) Other is s uers - -
2 . F ina nc ing - -
a) Go vernments and Central Banks - -
b) Other public autho rities - -
c) Banks - -
d) Other - -
To ta l 3 ,15 8 ,0 13 -
To ta l fa ir v a lue 3 ,2 4 3 ,10 3 -
5.3 Held-to-maturity investments: hedged
No items of this type exist in the UBI Group.
5.4 Held-to-maturity investments: annual changes
5.4 Held-to-maturity investments: annual changes
De bt ins trume nts Fina nc ing To ta l
A. Ope ning ba la nc e s - - -
B. Inc re a s e s 3 ,18 8 ,3 6 3 - 3 ,18 8 ,3 6 3
B.1 Purc hases 3,188,072 3,188,072
B.2 Re ve rsa ls of impairme nt losses -
B.3 Transfe rs from othe r portfolios -
B.4 Othe r changes 291 291
C. De c re a s e s (3 0 ,3 5 0 ) - (3 0 ,3 5 0 )
C.1 Sales -
C.2 Re demptions -
C.3 Ne t impairme nt losse s -
C.4 Transfe rs to other portfolios -
C.5 Othe r changes (30,350) (30,350)
D. Fina l ba la nc e s 3 ,15 8 ,0 13 - 3 ,15 8 ,0 13
Table 2: 105030O|1 - NOTA
288

SECTION 6 Loans and advances to banks – Item 60
6.1 Loans and advances to banks: composition by type
Type o f tra ns a c tio n/ A m o unts 3 1.12 .2 0 12 3 1.12 .2 0 11
A . Lo a ns to C e ntra l B a nks 1,19 1,2 3 5 7 3 9 ,3 18
1. Term depo s its - -
2. Co mpuls o ry res erve requirement 1,172,303 738,100
3. Revers e repurchas e agreements - -
4. Other 18,932 1,218
B . Lo a ns to ba nks 4 ,8 8 1,111 5 ,4 4 4 ,6 8 2
1. Current acco unts and depo s its 2,081,098 2,516,230
2. Term depo s its 118,971 455,701
3. Other lo ans 2,468,251 1,329,819
3.1 Revers e repurchas e agreements 953,977 534,373
3.2 Finance leas es 30 98
3.3 o ther 1,514,244 795,348
4. Debt ins truments 212,791 1,142,932
4.1 Structured ins truments - -
4.2 Other debt ins truments 212,791 1,142,932
To ta l (c a rrying a m o unt) 6 ,0 7 2 ,3 4 6 6 ,18 4 ,0 0 0
To ta l (fa ir v a lue ) 6 ,0 7 2 ,4 15 6 ,18 4 ,3 5 0
Item 3.3.3 “Other loans – other” consists mainly of mortgages, cheques drawn on third
parties and pooled financing.
6.2 Loans and advances to banks: assets subject to specific hedging
Type o f tra ns a c tio n/Amo unts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. Loans subject to fair value specific hedge:
a) interest rate risk - 31,143
c) currency risk - -
d) credit risk - -
e) multiple risks - -
2. Loans subject to cash flow specific hedge:
a) interest rate - -
b) exchange rate - -
c) expected transactions - -
c) other - -
To ta l - 3 1,14 3
The amount recognised as at 31 st December 2011 relates to a position without recourse
which was closed during the year.
6.3 Finance leases
Duration
deteriorated
exposures
minimum payments
quota of principal
of which secured
remaining amount
quota of
interest
gross investment
of which unsecured
remaining amount
on demand - - - - - -
up to 3 months - 18 - - 18 -
between 3 months and 1 year - 12 - - 12 -
from 1 year to 5 years - - - - - -
more than 5 years - - - - - -
indeterminate maturity - - - - - -
total gross value - 30 - - 30 -
289

SECTION 7 Loans and advances to customers – Item 70
7.1 Loans and advances to customers: composition by type
3 1.12 .2 0 12
3 1.12 .2 0 11
Type o f tra ns a c tio n/Amo unts
P e rfo rming
De te rio ra te d
De te rio ra te d
P e rfo rming
P urc ha s e d Othe r P urc ha s e d Othe r
1. Current account overdrafts 11,531,444 - 1,343,890 11,755,970 - 1,151,331
2. Reverse repurchase agreements 618,901 - - 923,859 - -
3. Long-term loans 50,295,673 - 3,931,236 53,065,825 - 3,172,375
4. Credit cards, personal loans and salary-backed loans 4,585,937 - 472,210 5,320,840 - 206,948
5. Finance leases 6,664,574 - 1,250,191 7,948,943 - 937,571
6. Factoring 2,448,770 - 303,609 3,137,443 - 62,427
7. Other financing 8,628,013 - 803,035 11,048,930 - 748,232
8. Debt instruments 9,483 - 1,003 208,076 - 1,000
8.1 Structured instruments - - - 8,893 - -
8.2 Other debt instruments 9,483 - 1,003 199,183 - 1,000
To ta l (c a rrying a mo unt) 8 4 ,7 8 2 ,7 9 5 - 8 ,10 5 ,17 4 9 3 ,4 0 9 ,8 8 6 - 6 ,2 7 9 ,8 8 4
To ta l (fa ir va lue ) 8 8 ,9 2 9 ,2 6 4 - 8 ,10 5 ,17 4 9 6 ,3 9 3 ,3 6 1 - 6 ,2 4 0 ,6 3 6
Reverse repurchase agreement transactions amounting to €0.46 million were performed
with Cassa di Compensazione e Garanzia (a central counterparty clearing house).
Other transactions included a security deposit with the Cassa di Compensazione e Garanzia
amounting to €144 million.
Table 3: 107000O|1 - NOTA2_ASS
7.2 Loans and advances to customers: composition by borrowers/issuers
3 1.12 .2 0 12 3 1.12 .2 0 11
Type o f tra ns a c tio n/ A m o unts
P e rfo rm ing
D e te rio ra te d
D e te rio ra te d
P e rfo rm ing
P urc ha s e d Othe r P urc ha s e d Othe r
1. D e bt ins trum e nts 9 ,4 8 3 - 1,0 0 3 2 0 8 ,0 7 6 - 1,0 0 0
a) Go vernments - - - - - -
b) Other public autho rities 7,181 - - 7,637 - -
c) Other is s uers 2,302 - 1,003 200,439 - 1,000
- no n financial ins titutio ns 1,262 - 3 1,256 - -
- financial ins titutio ns 1,040 - 1,000 199,183 - 1,000
- ins urance co mpanies - - - - - -
- o ther - - - - - -
2 . F ina nc ing to 8 4 ,7 7 3 ,3 12 - 8 ,10 4 ,17 1 9 3 ,2 0 1,8 10 - 6 ,2 7 8 ,8 8 4
a) Go vernments 229,835 - 15,312 180,989 - -
b) Other public autho rities 791,256 - 39,447 869,391 - 18,857
c) Other 83,752,221 - 8,049,412 92,151,430 - 6,260,027
- no n financial co mpanies 47,428,328 - 5,624,819 52,452,519 - 4,506,570
- financial co mpanies 3,014,778 - 91,334 4,418,276 - 94,053
- ins urance co mpanies 130,485 - 187 134,419 - 197
- o ther 33,178,630 - 2,333,072 35,146,216 - 1,659,207
T o ta l 8 4 ,7 8 2 ,7 9 5 - 8 ,10 5 ,17 4 9 3 ,4 0 9 ,8 8 6 - 6 ,2 7 9 ,8 8 4
7.3 Loans and advances to customers: assets subject to specific hedging
Type o f tra ns a c tio n/Amo unts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. Loans subject to fair value specific hedge:
a) interest rate risk 623,713 640,551
c) currency risk - -
d) credit risk - -
e) multiple risks - -
2. Loans subject to cash flow specific hedge:
a) interest rate risk - -
b) currency risk - -
c) other - -
To ta l 6 2 3 ,7 13 6 4 0 ,5 5 1
290

7.4 Finance leases
Duration
deteriorated
exposures
minimum payments
quota of principal
of which
secured
remaining
amount
quota of
interest
gross investment
of which
unsecured
remaining
amount
on demand 98,223 30,052 - - - -
up to 3 months 16,820 219,660 15,664 70,490 291,113 -
between 3 months and 1
year 46,436 624,714 50,650 198,708 826,134 -
from 1 year to 5 years 186,423 2,206,034 220,480 786,972 3,003,752 -
more than 5 years 395,162 3,393,371 812,946 793,077 4,197,276 -
indeterminate maturity 507,127 190,743 - - 190,743 -
total 1,250,191 6,664,574 1,099,740 1,849,247 8,509,018 -
Net loans to customers for finance leases, net of intercompany eliminations and
consolidation entries, totalled €7,914,765 thousand of which €1,250,191 thousand were
“deteriorated assets” and €79,361 thousand “assets transferred not derecognised”.
The lending portfolio for the finance leases of UBI leasing consisted of 60,071 contracts,
composed, by remaining debt, as follows:
- 74% property sector;
- 12% machinery and equipment sector;
- 8% energy sector;
- 3% auto sector;
- 3% aeronautical sector.
The ten largest exposures had a total remaining value of €274,887,330 thousand.
A negative balance for potential lease instalments (relating to the index value of the
instalments) was recognised during the year amounting to €94,496 thousand.
SECTION 8 Hedging derivatives – Item 80
8.1 Hedging derivatives: composition by type of contract and underlying assets
Type o f de riva t ive /Unde rlying
a s s e t s
L 1 L 2 L 3 To t a l
3 1.12 .2 0 12 3 1.12 .2 0 11
NOMINAL
AMOUNT
L 1 L 2 L 3 To ta l
NOMINAL
AMOUNT
A) Fina nc ia l de riva tive s - 1,4 7 8 ,3 2 2 - 1,4 7 8 ,3 2 2 2 6 ,16 4 ,8 0 8 - 1,0 9 0 ,4 9 8 - 1,0 9 0 ,4 9 8 2 7 ,9 7 5 ,9 15
1) Fair value - 1,478,322 - 1,478,322 26,164,808 - 1,010,954 - 1,010,954 26,887,383
2) Cash flow - - - - - - 79,544 - 79,544 1,088,532
3) Foreign investments - - - - - - - - - -
B) Cre dit de riva tive s - - - - - - - - - -
1) Fair value - - - - - - - - - -
2) Cash flow - - - - - - - - - -
To ta l - 1,4 7 8 ,3 2 2 - 1,4 7 8 ,3 2 2 2 6 ,16 4 ,8 0 8 - 1,0 9 0 ,4 9 8 - 1,0 9 0 ,4 9 8 2 7 ,9 7 5 ,9 15
291

8.2 Hedging Derivatives: composition by portfolios hedged and type of hedge
Fa ir Va lue
Ca s h flo w
Tra ns a c tio ns /Type o f
h e dg ing
In te re s t ra te
ris k
Cu rre nc y
ris k
S pe c ific Ma c ro -he dg e S pe c ific Ma c ro -he dg e
Cre dit ris k
P ric e ris k
Multiple
ris ks
Fo re ig n
inve s tme nts
1. Ava ilable -for-sale financ ial
assets
X X X
2. Loans X X X X
3. Held-to-maturity investments X X X X X
4. P ortfolio X X X X X X X
5. Othe r transa ctions X X
To ta l a s s e ts - - - - - - - - -
1. Financial liabilities 1,478,322 X X X X
2. P ortfolio X X X X X X X
To ta l lia bilitie s 1,4 7 8 ,3 2 2 - - - - - - - -
1. Expected tra nsa ctions X X X X X X X X
2. P ortfolio of financial assets and
liabilities
X X X X X X
SECTION 9 Fair value change in hedged financial assets – Item 90
9.1 Fair value change in hedged assets: composition by portfolios hedged
Fa ir va lue c ha ng e in he dg e d a s s e ts /Gro up c o mpo ne nts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. P o s itive c ha ng e s
1.1 of specific portfolios: 885,997 704,869
a) loans and receivables 885,997 704,869
b) available-for-sale assets - -
1.2 general - -
2 . Ne g a tive c ha ng e s
2.1 of specific portfolios - -
a) loans and receivables - -
b) available-for-sale assets - -
2.2 general - -
To ta l 8 8 5 ,9 9 7 7 0 4 ,8 6 9
09000O|1 - NOTA
9.2 Assets of the banking group subject to interest rate risk macro hedge:
composition
He dg e d a s s e ts 3 1.12 .2 0 12 3 1.12 .2 0 11
1. Loans 6,463,896 7,383,359
2. Available-for-sale assets - -
3. Portfolio - -
To ta l 6 ,4 6 3 ,8 9 6 7 ,3 8 3 ,3 5 9
292

SECTION 10 Equity investments – Item 100
10.1 Equity investments in companies subject to joint control (accounted for using
the equity method) and in companies subject to significant influence:
information on investments
Name Headquarters Type of ow nership
Details of investment
Investing company
B. Companies
1. Aviva Assicurazioni Vita Spa Milan euro 49,721,776 significant influence UBI Banca Scpa 49.999% 49.999%
2. Aviva Vita Spa Milan euro 155,000,000 significant influence UBI Banca Scpa 50.000% 50.000%
3. By You Spa in liquidation Milan euro 650,000 significant influence UBI Banca Scpa 10.000% 20.000%
4. Capital Money Spa Milan euro 2,042,955 significant influence UBI Banca Scpa 21.185% 20.671%
4. Zhong Ou Fund Management Shenzen (China) renminbi 120,000,000 significant influence UBI Banca Scpa 49.000% 49.000%
6. Lombarda Vita Spa Brescia euro 185,300,000 significant influence UBI Banca Scpa 40.000% 40.000%
7. Polis Fondi SGR Milan euro 5,200,000 significant influence UBI Banca Scpa 19.600% 19.600%
7. Prisma Srl Milan euro 120,000 significant influence UBI Banca Scpa 20.000% 20.000%
8. SF Consulting Srl Mantua euro 93,600 significant influence UBI Banca Scpa 35.000% 35.000%
9. Sider Factor Spa Milan euro 1,200,000 significant influence UBI Factor Spa 27.000% 27.000%
10. Sofipo Sa
Lugano
CHF 1,200,000 significant influence Banque de Depots et de Gestion Sa 30.000% 30.000%
(Sw itzerland)
11. SPF Studio Progetti Finanziari Srl Rome euro 92,960 significant influence Banca Popolare di Ancona Spa 25.000% 25.000%
13. UBI Assicurazioni Spa Milan euro 32,812,000 significant influence UBI Banca Scpa 49.999% 49.999%
14. UFI Servizi Srl Rome euro 150,000 significant influence Prestitalia Spa 23.167% 23.167%
The balance sheet as at 31 st December 2012 includes equity-accounted investees only.
The larger equity investments were subjected to impairment testing, using the average of
the multiples of a sample of comparable companies.
Greater information is given here on the market values relating to the more significant
equity investments recognised in the consolidated financial statements of the UBI Banca
Group. More specifically, the market value for the insurance companies Aviva Assicurazioni
Vita Spa, Aviva Vita Spa and Lombarda Vita Spa was calculated on the basis of a sample of
companies quoted on active European stock markets considering the multiple price/book
value (P/BV) adjusted for non-controlling interests and for intangible assets. The source for
the amounts used was Bloomberg. The equity value was compared with the carrying
amount of the equity investments in the consolidated financial statements.
- Aviva Vita Assicurazioni Spa: – the equity attributable to the Parent, amounting to €59.1
million, inclusive of profit for 2012 and also of a positive consolidation difference amounting
to €2.6 million, compared with an equity value (pro rata) of €84.0 million;
- Aviva Vita Assicurazioni Spa: – the equity attributable to the Parent, amounting to
€116.8 million, inclusive of profit for 2012 and also of a positive consolidation difference
amounting to €0.1 million, compared with an equity value (pro rata) of €177.5 million;
- Lombarda Vita Spa: – the equity attributable to the Parent, amounting to €198.9 million,
inclusive of profit for 2012 and a positive consolidation difference amounting to €29.4
million compared with an equity value (pro rata) of €266.6 million.
For further details “Part A. Accounting policies – Section 3 – Consolidation scope and
methods” of this report may be consulted.
% held
% of votes
293

10.2 Equity investments in companies subject to joint control and in companies
subject to significant influence: accounting information
Name Total assets Total revenues Profit (Loss) Equity
Consolidated
carrying
amount
A. Equity accounted investees
1. Aviva Assicurazioni Vita Spa 2,371,200 584,100 16,000 112,988 59,104
2. Aviva Vita Spa 4,659,000 1,049,900 28,800 233,483 116,792
3. Capital Money Spa (1) 7,187 12,372 (228) 3,422 -
4. Lombarda China Fund Management Co. 14,133 1,017 (2,381) 10,707 5,247
5. Lombarda Vita Spa 5,216,962 1,069,588 40,139 423,942 198,943
6. Prisma Srl 885 851 (61) 136 27
7. SF Consulting Srl 7,069 6,205 106 813 284
8. Sofipo Fiduciarie Sa 4,818 3,182 36 2,467 729
9. SPF Studio Progetti e Servizi Finanziari Srl 1,071 1,352 8 152 38
10. UBI Assicurazioni Spa 712,992 215,744 17,105 106,257 58,721
11. UFI Servizi Srl (2) 234 289 3 170 40
12. Polis Fondi SGR Spa (3) 9,692 3,032 472 8,109 1,665
13. By You Spa (4) 6,626 24,079 (6,625) (3,557) 901
TOTAL 13,011,869 2,971,711 93,374 899,089 442,491
(1) The figures relate to the financial statements as at and for the year ended 31st December 2011. The UBI Group wrote-off the investment as at 31st December 2012.
(2) The figures relate to the financial statements as at and for the year ended 31st December 2011.
(3) The figures relate to the financial statements as at and for the period ended 30th June 2012.
(4) The figures relate to the financial statements as at and for the year ended 31st December 2011. The company was place in voluntary liquidation on 31st July 2012
No information on fair value is given because they are investments in companies that are
not listed on active markets.
10.3 Annual changes in equity investments
31.12.2012 31.12.2011
A Opening balances 352,983 368,894
B Increases 123,650 53,869
B.1 Purchases 36,000
B.2 Reversals of impairment losses
B.3 Revaluations
B.4 Other changes 123,650 17,869
C Decreases (34,142) (69,780)
C.1 Sales (27,964)
C.2 Impairment losses
C.3 Other changes (6,178) (69,780)
D Final balances 442,491 352,983
E Total revaluations
F Total impairment losses
The amount recognised on line B.4 “Other changes” is composed as follows:
- an amount of €76,451 thousand of which €282 thousand for positive exchange
rate differences and €76,169 thousand due to changes in the valuation reserve
(€61,197 thousand attributable to Lombarda Vita S.p.A. and €14,972 thousand
to UBI Assicurazioni S.p.A.);
- total profits of the year of €47,199 thousand. In detail:
Lombarda Vita S.p.A.
€16,056 thousand
Aviva Vita S.p.A.
€14,400 thousand
UBI Assicurazioni S.p.A.
€8,553 thousand
Aviva Vita Assicurazioni S.p.A. €8,000 thousand
The amount recognised on line C.1 “Sales” relates to the total disposal of the interest held in
Arca S.G.R. S.p.A..
294

The amount recognised on line C.3 “Other changes” is composed as follows:
- dividends of €2,230 thousand;
- other decreases of €1,175 resulting almost totally from the liquidation of the
company Sider Factor S.p.A.;
- losses for the period totalling €2,773 thousand, of which €1,572 thousand for
Capital Money S.p.A. and €1,167 thousand for Lombarda China Fund
Management Co..
10.4 Commitments relating to equity investments in subsidiaries
Commitments relating to the possible exercise of options
Banca Popolare Commercio e Industria/Banca Carime/Banca Popolare di Ancona –
bancassurance agreement with the Aviva Group: this agreement between UBI Banca and
Aviva involves three call options granted to UBI on equity investments in banks (BPCI,
Carime and Popolare di Ancona) for which the trigger events are connected with the
performance of the joint-venture or the termination of the distribution agreement or the
exclusive distribution condition. If UBI fails to exercise the call options, Aviva will have the
right from 30 th September 2016 (from 1 st January 2020 in the case of the investment in
Banca Popolare di Ancona), to exercise a put option on the same investments at a price
equal to the fair value at the time of exercise.
10.5 Commitments relating to equity investments in companies subject to joint
control
Commitments connected with the possible payment of further tranches of the price
Nothing to report.
10.6 Commitments relating to equity investments in companies subject to significant
influence
Commitments relating to the possible exercise of options
Lombarda Vita Spa: as part of the renewal of life bancassurance agreements with the
Cattolica Assicurazioni Group concluded on 30 th September 2010, the options on the
respective investments in the Lombarda Vita joint venture were reformulated with purchase
options only, exercisable on the basis of the occurrence of predetermined conditions.
Lombarda China Fund Management Company: the partnership agreement signed between
UBI Banca and Goudu Securities Banca Ltd. in the asset management sector, focused on
the Chinese market, involves a series of intersecting put/call options which can be
exercised if determined trigger events occur concerning the respective investments held in
Lombarda China Fund Management Company.
295

Recapitalisation commitments
Aviva Vita Spa: on 13 th February 2012, a shareholders meeting of Aviva Vita passed a
resolution to increase the share capital by a total of €15 million (€7.5 million attributable to
UBI Banca), in order to provide a more adequate solvency margin, which could be eroded by
possible fluctuations in the prices of government securities held in portfolio. It granted the
Board of Directors a mandate to request the payment if the solvency margin should fall
below the stability threshold of 120%.
SECTION 11 Technical reserves of reinsurers – Item 110
No items of this type exist.
SECTION 12 Property, plant and equipment – Item 120
12.1 Property, plant and equipment: composition of assets measured at cost
Assets/amounts 31.12.2012 31.12.2011
A. Assets used in operations
1.1 ow ned 1,748,302 1,822,888
a) land 870,547 875,524
b) buildings 734,926 774,081
c) furnishings 39,184 45,265
d) electronic equipment 43,667 56,909
e) other 59,978 71,109
1.2 acquired through finance leases 40,681 40,127
a) land 20,844 20,914
b) buildings 19,837 19,143
c) furnishings - -
d) electronic equipment - -
e) other - 70
Total A 1,788,983 1,863,015
B. Assets held for investment - -
2.1 ow ned 177,906 182,520
a) land 107,365 109,843
b) buildings 70,541 72,677
2.2 acquired through finance leases 308 -
a) land 47 -
b) buildings 261 -
Total B 178,214 182,520
Total (A+B) 1,967,197 2,045,535
12.2 Property, plant and equipment: composition of the assets at fair value or
revalued
No property, plant and equipment at fair value are held.
296

12.3 Property, plant and equipment used in operations: annual changes
Land Buildings Furnishings
Electronic
equipment
A. Gross opening balances 914,342 1,274,274 149,915 361,260 286,690 2,986,481
A.1 Total net reductions in value (17,904) (481,050) (104,650) (304,351) (215,511) (1,123,466)
A.2 Net opening balances 896,438 793,224 45,265 56,909 71,179 1,863,015
B. Increases 816 10,358 3,763 9,450 12,151 36,538
B.1 Purchases 13 4,082 3,488 9,444 12,059 29,086
B.2 Capitalised improvement expenses - 5,090 - - - 5,090
B.3 Reversal of impairment losses - - - - - -
B.4 Positive changes in fair value recognised in: - - - - - -
a) equity - - - - - -
b) income statement - - - - - -
B.5 Positive exchange rate differences 113 205 1 6 - 325
B.6 Transfers from properties held for investment
45 31 - - - 76
B.7 Other changes 645 950 274 - 92 1,961
- business combinations - - - - - -
- other changes 645 950 274 - 92 1,961
C. Decreases (5,863) (48,819) (9,844) (22,692) (23,352) (110,570)
C.1 Sales (367) (590) (273) (57) (105) (1,392)
C.2 Depreciation - (42,311) (9,525) (22,497) (23,030) (97,363)
C.3 Impairment losses recognised in: (158) (664) - (1) (27) (850)
a) equity - - - - - -
b) income statement (158) (664) - (1) (27) (850)
C.4 Negative changes in fair value - - - - - -
a) equity - - - - - -
b) income statement - - - - - -
C.5 Negative exchange rate differences - - - - - -
C.6 Transfers to: (4,173) (4,752) - - - (8,925)
a) tangible assets held for investment (884) (631) - - - (1,515)
b) assets held for sale (3,289) (4,121) - - - (7,410)
C.7 Other changes (1,165) (502) (46) (137) (190) (2,040)
- business combinations - - - - - -
- other changes (1,165) (502) (46) (137) (190) (2,040)
D. Final net balances 891,391 754,763 39,184 43,667 59,978 1,788,983
D.1 Total net reductions in value (29,529) (513,587) (117,562) (325,924) (238,149) (1,224,751)
D.2 Final gross balances 920,920 1,268,350 156,746 369,591 298,127 3,013,734
Other
Total
12.4 Annual changes in tangible assets held for investment (investment property)
Total
Land
Buildings
A. Opening balances 109,843 72,677
B. Increases 2,111 3,623
B.1 Purchases 1,220 2,418
B.2 Capitalised improvement expenses - 500
B.3 Positive changes in fair value - -
B.4 Reversals of impairment losses - -
B.5 Positive exchange rate differences - -
B.6 Transfers from properties used in operations 884 631
B.7 Other changes 7 74
C. Decreases (4,542) (5,498)
C.1 Sales (36) (141)
C.2 Depreciation - (4,258)
C.3 Negative changes in fair value - -
C.4 Impairment losses (59) (13)
C.5 Negative exchange rate differences - -
C.6 Transfers to other asset portfolios (4,441) (1,086)
a) properties for use in operations (45) (31)
b) non current assets held for disposal (4,396) (1,055)
C.7 Other changes (6) -
D. Final balances 107,412 70,802
E. Fair value 130,116 124,130
Since land and buildings are recognised at cost, the Parent arranged for expert external
appraisers to estimate the fair value of all property assets for the purposes of the annual
impairment test on the carrying amounts.
The estimate was based on generally accepted valuation principles, by applying the
following measurement criteria:
• the direct comparative or market method, based on a comparison between the asset in
question and other similar assets subject to sale or currently on sale on the same
market or competing markets;
• the income method, based on the present value of potential market incomes for a
property, obtained by capitalising the income at a market rate.
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The measurement methods just described were performed individually and the values
obtained were appropriately averaged.
The appraisals performed basically confirmed the appropriateness of the carrying amounts.
12.5 Commitments for the purchase of property, plant and equipment
Assets/amounts 31.12.2012 31.12.2011
A. Assets used in operations - -
1.1 owned 2,908 1,506
- land - -
- buildings 2,422 1,191
- furnishings 7 21
- electronic equipment - -
- other 479 294
1.2 Finance lease - -
- land - -
- buildings - -
- furnishings - -
- electronic equipment - -
- other - -
Total A 2,908 1,506
B. Assets held for investment - -
2.1 owned - -
- land - -
- buildings - -
2.2 Finance lease - -
- land - -
- buildings - -
Total B - -
Total (A+B) 2,908 1,506
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SECTION 13 Intangible assets – Item 130
13.1 Intangible assets: composition by type of asset
Assets/amounts
31.12.2012 31.12.2011
Finite
useful life
Indefinite
useful life
Finite
useful life
Indefinite
useful life
A.1 Goodw ill X 2,536,574 X 2,538,668
A.2 Other intangible assets 428,271 37 448,964 37
A.2.1 Assets measured at cost: 428,271 37 448,964 37
a) Internally generated intangible assets 173 - 249 -
b) Other assets 428,098 37 448,715 37
A.2.2 Assets at fair value: - - - -
a) Internally generated intangible assets - - - -
b) Other assets - - - -
Total 428,271 2,536,611 448,964 2,538,705
Details of the item “Goodwill” are given below.
Figures in thousands of euro
31.12.2012 31.12.2011 changes
UBI Banca Scpa - - -
Banco di Brescia Spa 671,960 671,960 -
Banca Carime Spa 649,240 649,240 -
Banca Popolare di Ancona Spa 249,049 249,049 -
Banca Popolare Commercio e Industria Spa 209,258 209,258 -
Banca Regionale Europea Spa (*) 307,189 307,189 -
UBI Pramerica SGR Spa 170,284 170,284 -
Banca Popolare di Bergamo Spa 100,045 100,045 -
IW Bank Spa (*) 68,565 68,565 -
Banca di Valle Camonica Spa 43,224 43,224 -
Prestitalia Spa 24,895 24,895 -
UBI Factor Spa 20,554 20,554 -
UBI Banca Private Investment Spa 20,189 20,189 -
UBI Sistemi e Servizi SCpA 2,122 2,122 -
UBI Insurance Broker Srl 2,094 ( 2,094)
TOTAL 2,536,574 2,538,668 ( 2,094)
(*) T he goodwill previously recognised for Banco Di San Giorgio Spa and InvestNet International Sa has been
attributed to Banca Regionale Europea spa and IW Bank Spa respectively, following the mergers into those
companies that occurred during 2012.
The goodwill recognised in the consolidated financial statements of UBI Banca Group
(“goodwill arising on consolidation” resulting from the elimination of the equity investments
in subsidiaries) is the result of all the goodwill items relating to some of the companies
controlled by UBI Banca.
Following the introduction of EU Regulation No. 494/2009, which became compulsory from
the financial year 2010, IAS 27 requires any changes in percentage ownership which do not
result in the loss or acquisition of control to be considered as transactions between
shareholders and as a consequence the relative effects must be recognised as either an
increase or a decrease in equity. In this respect, only changes in the consolidation scope
which have resulted in the acquisition or loss of control determine the appearance or
disappearance of goodwill.
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In compliance with IAS 36, an impairment test is performed at the end of each year (or more
frequently if an analysis of internal or external circumstances should give rise to doubts
that the value of the assets can be recovered).
The result of the impairment test as at 31 st December 2012 did not find any impairment
loss on the item goodwill. The result of the impairment test as at 31 st December 2011
determined an impairment loss on goodwill of €1,873,849 thousand. The only decrease in
the item goodwill, amounting to €2,094 thousand, related to the total disposal at the end of
the reporting year of the company UBI Insurance Broker Srl.
“Other finite useful life intangible assets” amounting to €428,271 thousand were comprised
mainly of the following:
- “brands” totalling €118,624 thousand. This amount relates to the value of the
brands of the banks in the former Banca Lombarda Group subject to
amortisation since 2010 (residual life of 16 years). The amortisation for the year
amounted to €7,414 thousand with a large decrease compared to €18,770
thousand the year before. As already reported, the result of the impairment test
as at 31 st December 2011 had determined an impairment loss on goodwill of
€193,053 thousand. Net of ordinary amortisation and of impairment losses, the
value of the brands of the single banks was as follows:
Banco di Brescia S.p.A.
€85,153 thousand
Banca Regionale Europea S.p.A./Banco Di San Giorgio S.p.A. €30,863 thousand
Banca Di Valle Camonica S.p.A.
€2,608 thousand
Totale
€118,624 thousand
- “core deposits”, i.e. intangible assets associated with customer relationships
totalling €48,938 thousand. In view of their close dependence on customer
relationships, these assets, arising from business combinations, are by definition
finite useful life assets and are subject to systematic amortisation according to a
schedule that takes account of the probability of current accounts being closed.
Amortisation for the year totalled €4,288 thousand (€29,107 thousand in 2011).
As already reported, the result of the impairment test as at 31 st December 2011
had determined an impairment loss of €241,679 thousand.
- “asset under management” consisting both of the actual management and the
relative distribution activities totalled €58,452 thousand. These assets are
amortised over the useful remaining life of the customer relationships. The
amortisation for the year was €3,871 thousand (€14,437 thousand in 2011). As
already reported, the result of the impairment test as at 31 st December 2011 had
determined an impairment loss of €88,248 thousand.
- “assets under custody” business totalled €45,739 thousand with total
amortisation of €3,210 thousand (€5,148 thousand in 2011). As already
reported, the result of the impairment test as at 31 st December 2011 had
determined no impairment loss.
- The remaining balance consists almost exclusively of software, allocated mainly
to UBISS S.c.p.a, the service company of the UBI Banca Group.
Finite useful life intangible assets have not been subjected to impairment testing, because:
a) with regard to the brand name, the estimate of the total value of the UBI brand
carried out by independent experts, and on which the previous measurements used
for impairment testing of the brand were based, were revised upwards during the
year;
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) the amounts relating to core deposits and to assets under management and under
custody (which determine the value of the intangible assets associated with them),
did not decrease by an amount greater than the amortisation of the intangible assets
themselves.
13.2 Annual changes in intangible assets
Goodwill
Other intangible assets:
internally generated
Finite useful
life
Indefinite
useful life
Other intangible assets: other
Finite useful
life
Indefinite
useful life
Bal ances as at
31.12.2012
A Opening gross balances 2,719,196 4,358 - 1,305,822 37 4,029,413
A.1 Total net reductions in value ( 180,528) ( 4,109) - ( 857,107) - ( 1,041,744)
A.2 Net opening balances 2,538,668 249 - 448,715 37 2,987,669
B. Increases - - - 61,047 - 61,047
B.1 Purchases - - - 60,886 - 60,886
B.2 Increases in intangible internal assets X - - - - -
B.3 Reversal of impairment losses X - - - - -
B.4 Positive changes in fair value - - - - - -
- in equity X - - - - -
- in the income statement X - - - - -
B.5 Positive exchange rate differences - - - - - -
B.6 Other changes - - - 161 - 161
C. Decreases ( 2,094) ( 76) - ( 81,664) - ( 83,834)
C.1 Sales ( 2,094) - - ( 319) - ( 2,413)
C.2 Impairment losses - ( 76) - ( 79,513) - ( 79,589)
- Amortisation X ( 76) - ( 79,513) - ( 79,589)
- Impairment losses - - - - - -
+ equity X - - - - -
+ income statement - - - - - -
C.3 Negative changes in fair value - - - ( 1,528) ( 1,528)
- in equity X - - - - -
- in the income statement X - - ( 1,528) - ( 1,528)
C.4 Transfers to non current assets held for
sale.
- - - - - -
C.5 Negative exchange rate differences - - - - - -
C.6 Other changes - - - ( 304) - ( 304)
D. Final net balances 2,536,574 173 - 428,098 37 2,964,882
D.1 Total net impairment losses ( 180,528) ( 4,185) - ( 926,522) - ( 1,111,235)
E. Final gross balances 2,717,102 4,358 - 1,354,620 37 4,076,117
F. Value at cost - - - - - -
13.3 Other information
Software
The useful life of software considered for the purposes of amortisation is five years.
The figure for contracted commitments to purchase intangible assets amounted to €26,371
thousand for the acquisition of software.
Impairment tests on goodwill
The goodwill recognised in the consolidated balance sheet of UBI Banca is the result of all
the goodwill items arising from positive consolidation differences relating to some of the
subsidiaries controlled by UBI Banca, reduced by prior year impairment losses.
In order to test goodwill for impairment, the criterion followed in allocating it considers the
minimum level at which it is monitored for the purposes of internal management control,
which coincides with the legal entities of the Group. As concerns the goodwill that arose
from the merger between the BPU and Banca Lombarda e Piemontese groups, the allocation
for the purposes of impairment testing followed the same logic as that employed for the
purchase price allocation. In detail, the goodwill attributable to synergies from which the
companies in the former acquiring group (BPU Group) benefit was allocated to the
individual units of the acquiring group, while the goodwill arising from the difference
between the fair value of the former equity investments of the Banca Lombarda e
Piemontese and their equity adjusted for the fair value of loans, properties and bonds was
allocated to the single cash generating units (CGUs). The goodwill of the CGUs of the former
BPU Group not affected by synergies created by that merger was tested for impairment
along the same lines as in previous years.
For CGUs that are not wholly owned, for impairment purposes goodwill was restated on a
notional basis including the goodwill attributable to non-controlling interests (not
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ecognised in the consolidated financial statements) by means of “grossing up” (goodwill
attributable to the Group/percentage ownership attributable to the Group) in consideration,
amongst other things, of example seven in IAS 36. The value measurement used to calculate
the recoverable amount of the business units to which goodwill was allocated was that of
their value in use. The fair value less cost to sell was not estimated for the main companies,
consisting of the network banks, because no comparable transactions designed to obtain
control were carried out during the reporting year. The value in use was estimated on the
basis of the financial criterion and the book value of the CGUs was determined on the basis
of the criterion used to estimate the recoverable value. The notional carrying amount of
each CGU to which goodwill was allocated corresponded to the sum of the following:
1) equity inclusive of the profit of the legal entity and of goodwill, net of dividends currently
being paid, calculated on the profit earned in 2012 and the carrying amounts of the equity
investments;
2) adjustments to the purchase price allocation (PPA), consisting of the revaluation of
properties, loans and receivables and obligations and intangible assets identified in the PPA;
3) any consolidation differences there may be, “grossed up” on a notional basis.
The impairment test, for which the procedure was defined prior to the approval of the
financial statements, made use of methodological support from an external appraiser of
high standing and with account taken of the following factors:
(i) reasonable and consistent assumptions, which represent the best estimate that can be
made by management of the possible economic conditions that may manifest over the
useful life of the asset in question;
(ii) the cash flows for the various CGUs used for the purpose of the measurements were
based on the 2013 budget and on 2014 – 2017 projections based in turn on best
management estimated and they are grounded on the current market context. The budget
and the projections were drawn up with account taken of differences between preliminary
and budgeted 2012 figures and the causes of those differences. With regard to the network
banks, to which 88% of the total goodwill is allocated, we report the following:
a) the estimated short-term interest rates (Euribor one month) was held below 1%
until 2015, to then rise to higher levels, but still below 3% in 2017. The
magnitude of the rise in rates will ensure a progressive return to normality for
markups and markdowns, although still below historical levels observed before
the crisis;
b) the scenario for projections of growth in direct funding is one of a progressive
change in the composition of the ratio of lending to direct funding in favour of
the latter;
c) operating expenses remain substantially constant during the forecast period;
d) the cost of risk (net impairment losses on loans as a percentage of loans to
customers) is forecast to fall compared to the figures for 2012.
(iii) the discounted cash flow criterion was used to estimate the value in use. This considers
the value of each CGU as the result of the sum of the following: 1) the present value of the
cash flows forecast over the period covered by the projections (2013 – 2017), discounted at a
rate that expresses the risk for those flows (the opportunity cost of the equity); and 2) the
present value of the cash flows that can be generated beyond the explicit forecast period,
(which determines the terminal value) obtained by capitalising the cash flow achievable
beyond the explicit forecast period (from 2018) at a rate that represents the difference
between the opportunity cost of the capital and the expected long-term growth rate for the
cash flows. For the network banks the cash flows that can be generated beyond the explicit
forecast period are based on the cash flows for the last year (2017) adjusted: (a) upwards to
take account of a complete change in the composition of the loan portfolio at remunerative
conditions in line with those obtained in 2012; (b) downwards to consider the lost income in
the years following 2017 until loans subject to interest rates lower than current market
rates are fully repaid. More specifically, the cash flows were calculated considering the
annual capital requirement generated by risk weighted assets consistent with the long-term
supervisory ratio objectives of the Group and with the minimum capital requirements
requested. The discounted cash flow criterion was applied after:
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a) verifying the nature of the differences between the 2011 budget figures and the
preliminary figures;
b) verifying the projections by comparing them with inputs from external sources
(consensus macroeconomic forecasts, consensus forecasts made by equity
analysts), with emphasis placed on inputs from external sources referred to for
impairment testing purposes in IAS 36 (section 33 letter a);
c) verifying the consistency between the implied risk in discount rates and the
implementation risk of the plan;
d) making growth rate assumptions for all CGUs up to 2% (expected long-term
inflation rate).
iv) Because the UBI Group presents costs that were not allocated to single CGUs, a general
impairment test (second level test) was performed on the Group as a whole in accordance
with sections 101 and 103 of IAS 36 (example 8 of IAS 36). The second level impairment test
was carried out by comparing the total recoverable amount for the UBI Banca Group with
consolidated equity.
v) The discount rates, defined as the opportunity cost of capital (cost of equity – coe), were
estimated in compliance with the provisions of IAS 36 and the “Guidelines for impairment
tests on goodwill in contexts of financial and real crisis” issued by the Organismo Italiano di
Valutazione (OIV – Italian Valuation Body) on the basis of a capital asset pricing model,
according to the following formula.
cost of equity = Risk Free + Beta x Equity Risk Premium
The opportunity cost of capital is therefore equal to the sum of the risk free rate and a risk
premium corresponding to the product of the beta of the share and the overall market risk
premium (equity risk premium).
a) The specific yield to maturity of the interbank rate for each year of the forecast was
assumed as the risk free rate, in accordance with paragraph A21 of IAS 36. The risk
free rate used to estimate the cost of equity is consistent with future interest rates
forecast by management and assumed for the estimate of future cash flows used in the
measurement. The risk free rate assumed in the terminal value is 2.44%, which is
consistent with the estimates for risk free rates used by management for long-term
forecasts of net interest income.
b) For the network banks and for the Group as a whole (second level impairment test), the
beta was obtained on the basis of the most recent volatilities implicit in options on the
UBI share and on the Stoxx 600 index. The beta estimate was 1.66x, an increase
compared to that used the year before. The estimate of the beta lies in the upper range
of the beta estimates obtained from daily historical returns for the UBI share and the
Stoxx 600 market index. More specifically the beta estimate based on historical returns
for the share over one year was 1.88x, that for two years was 1.55x and that for five
years was 1.11x. A beta estimate of 1.66x guarantees alignment of the estimate of the
opportunity cost of capital with that given by the median of the equity analysts’
estimates.
For the other companies, the beta was estimated using the same method as that used
in the previous year, on the basis of the returns for comparable European companies.
c) The equity risk premium was considered to be 5%.
On the basis of the above parameters, the opportunity cost of own equity is 10.74%,
compared to 11.45% the year before. The reduction in the cost of equity (coe) is attributable
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almost entirely to the reduction in the estimate of the risk free rate, which fell from 3.11%
the year before to 2.44%. The year before (impairment test as at 31.12.2011), the risk
premium was 8.34% (obtained from the product of a beta coefficient of 1.39x and an equity
risk premium of 6%). This year (impairment test as at 31.12.2012) the risk premium is
8.30% (obtained from the product of a higher beta coefficient of 1.66x and a lower equity
risk premium of 5%). The fall in the equity risk premium from 6% to 5% is less than the fall
in the country risk as measured by ten-year Italian CDS which was 114 basis points (CDS
Italy as at 31.12.2011 of 368 basis points compared to CDS Italy as at 31.12.2012 of 254
basis points). The beta coefficients are calculated using volatilities implicit in the options on
the UBI share. If the beta coefficient is held constant (i.e. if the UBI beta coefficient had not
risen from 1.39x to 1.66x), then the risk premium would have fallen by 139 basis points
(6.95% - 8.34%) instead of just 4 basis points (8.30% – 8.34%).
The growth rate assumed for long-term income was 2%, unchanged with respect to that
used for the impairment test as at 31.12,2011. Therefore the rate of capitalisation (coe – g)
as at 31.12.2012 was 8.74%, down by 0.71% compared to the measure assumed for the
2011 impairment test.
d) The following were assumed for the purposes of estimating the rate of capitalisation of
income for the estimate of the terminal value: growth rates aligned with future inflation
of 2% for the network banks and similar companies in terms of business risk; growth
rates of a fundamental nature, i.e. calculated as the product of the rate of profit
retention and expected income in the last year of the plan, for the other companies; the
growth rate used did not exceed future expected inflation of 2% for any of the CGUs.
The table below shows estimates of the opportunity cost of equity and of growth for the
different CGUs to which goodwill was allocated. The same measures assumed for the
impairment test as at 31.12.2011 are given in brackets and in italics.
CGU
Initial discount rate
net of taxes
Final discount rate
net of taxes
Nominal growth rate in
income for the
calculation of the
terminal value
Network banks, UBI Private Investment, 8.40%
(8.93%)
10.74%
(11.45%)
2.00%
(2.00%)
IW Bank
Prestitalia
UBI Factor
UBI Pramerica
6.15%
(6.55%)
5.92%
(6.86%)
6.97%
(7.89%)
7.53%
(8.41%)
8.49%
(9.07%)
8.26%
(9.38%)
9.31%
(10.41%)
9.87%
(10.93%)
1.95%
(2.00%)
0.00%
(1.89%)
0.00%
(0.00%)
0.00%
(0.00%)
The recoverable amount for all the CGUs calculated on the basis of the method and
parameters described above was greater than their carrying amount.
Finally, a sensitivity analysis was performed in compliance with IAS 36 to identify the
variation in key variables (cost of equity, cost of risk, income growth rate in the terminal
value, cost/income ratio) that would render the recoverable amount of the different CGUs
equal to their carrying amounts in the consolidated financial statements. The analysis
shows that in the case of the network bank CGUs, the lowest margins of tolerance regarded
the Banca Carime CGU, for which an increase of 0.22% in the cost of risk, a rise in the cost
of equity of 0.84%, a fall in the income growth rate in the terminal value of 0.65%, or finally
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a rise of 2.91% in the cost/income ratio (operating expenses divided by operating income)
would bring the recoverable amount into line with the carrying amount.
Rise in the cost of
risk required to
align the value in
use with the
carrying amount
Rise in the
cost:income ratio
required to align
the value in use
with the carrying
amount
Growth rate in the
terminal value
required to align
the value in use
with the carrying
amount
Rise in the
opportunity cost of
capital required to
align the value in use
with the carrying
amount
Banco di Brescia 0.28% 6.27% -1.23% 1.61%
Banca Regionale Europea 0.28% 6.40% -2.17% 1.86%
Banca di Valle Camonica 0.26% 6.33% -2.46% 1.92%
Banca Popolare di Bergamo 1.43% 30.50% n.s. 22.68%
Banca Pop. Comm. e Ind. 0.54% 11.37% -10.04% 4.28%
Banca Popolare di Ancona 0.52% 11.28% -9.48% 4.28%
Banca Carime 0.26% 3.43% 0.39% 1.00%
UBI Pramerica n,s, 1.66% -0.39% 0.28%
UBI Private Investment 0.92% 12.25% -6.76% 5.18%
UBI Factor 0.01% 0.86% -0.25% 0.19%
Prestitalia 0.25% 15.93% -1.66% 1.30%
IW Bank 0.10% 0.33% 1.77% 0.14%
305

SECTION 14 Tax assets and tax liabilities – Asset item 140 and Liability
item 80
14.1 Deferred tax assets: composition
31.12.2012 31.12.2011
Balancing entry in the income statement 1,729,173 1,831,151
Balancing entry in equity 282,264 527,437
Total 2,011,437 2,358,588
for the follow ing reasons:
- impairment loss on loans to banks and customers and unsecured guarantees not deducted 628,501 516,236
- losses 2,181 2,165
- post employment benefits 6,332 7,285
- maintenance expenses 4,063 1,924
- application of IFRS (amortised cost in particular) 111,196 85,110
- advance depreciation and amortisation 5,683 8,705
- property, plant and equipment 36,180 33,584
- personnel expense 18,843 19,591
- entertainment expenses - 11
- provisions for risks and charges not deducted 67,227 63,535
- sales price adjustments, long term costs and non recurring transactions 4,072 5,291
- intangible assets and goodwill 858,046 1,085,288
- fair value change in securities and equity investments 263,042 514,943
- impairment losses on properties - 149
- purchase price allocation of bonds - 10
- revaluation of hedged subordinated liabilities - -
- non recurring expenses not deducted 248 1,011
- cash flow hedges 2,504 1,617
- other 3,319 12,133
14.2 Deferred tax liabilities: composition
31.12.2012 31.12.2011
Balancing entry in the income statement 180,688 145,418
Balancing entry in equity 168,170 173,244
Total 348,858 318,662
O|1 - NOTA
14.3 Changes in deferred tax assets (balancing entry in the income statement)
31.12.2012 31.12.2011
1. Opening balance 1,831,151 885,951
2. Increases 299,028 1,091,400
2.1 Deferred tax assets arising during the year 297,028 1,058,319
a) relating to previous years 3,257 6,950
b) due to changes in accounting policies - -
c) reversals of impairment losses - 6
d) other 293,771 1,051,363
2.2 New taxes or increases in tax rates - 10,081
2.3 Other increases 2,000 23,000
3. Decreases (401,006) (146,200)
3.1 Deferred tax assets derecognised during the year (126,074) (132,905)
a) reversals of temporary differences (126,074) (107,248)
b) impairment losses on non-recoverable items - (25,657)
c) due to changes in accounting policies - -
d) other - -
3.2 Reductions in tax rates - -
3.3 Other decreases (274,932) (13,295)
a) transformation in tax credits pursuant to Law 214/2011 (274,912) -
b) other changes (20) (13,295)
Final amount 1,729,173 1,831,151
Deferred tax assets are recognised on the basis of the probability of there being sufficient
future taxable income and also taking into account the consolidated tax regime adopted in
accordance with articles 117 et seq of Presidential Decree No. 917/86.
No deferred tax assets were recognised for impairment losses on equity investments which
satisfied the requirements for participation exemption.
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The rates used to calculate deferred tax assets for IRES (corporation tax) and IRAP (local
production tax) purposes are 27.50% and 5.57%.
The increases shown in line item 2.1 d) include an amount of €59,764 thousand due
primarily to the Parent taking advantage of an option to realign tax accounts with statutory
accounts relating to the goodwill and other intangible assets of the subsidiary Banca
Popolare di Ancona S.p.A., recognised separately in the consolidated financial statements,
in accordance with paragraphs 12 to 15 of article 23 of Decree Law No. 98 of 6 th July 2011
as amended and added to by article 20 of Decree Law No. 201 of 6 th December 2011 (Law
No. 214/2011).
The amount of €274,912 thousand shown in “other decreases” relates to the transformation
of deferred tax assets into tax credits as a result of the loss recognised for the year 2011 by
the Parent, UBI Leasing S.p.A and UBI Private S.p.A. in accordance with Law No. 214/2011.
14.3.1 Changes in deferred tax assets pursuant to Law No. 214/2011 (balancing
entry in the income statement)
31.12.2012 31.12.2011
1. Opening balance 1,428,849 499,596
2. Increases 331,268 971,623
3. Decreases (308,838) (42,370)
3.1 Reversals of temporary differences (33,918) (39,113)
3.2 Transformation in tax credits (274,920) (3,257)
a) resulting from losses for the year (274,920) (3,257)
b) resulting from tax losses - -
3.3 Other decreases - -
4. Final balance 1,451,279 1,428,849
14.4 Changes in deferred tax liabilities (balancing entry in the income statement)
31.12.2012 31.12.2011
1. Opening balance 145,418 188,200
2. Increases 65,206 39,666
2.1 Deferred tax liabilities arising during the year 65,200 37,850
a) relating to previous years 339 3,702
b) due to changes in accounting policies - -
c) other 64,861 34,148
2.2 New taxes or increases in tax rates - 800
2.3 Other increases 6 1,016
3. Decreases (29,936) (82,448)
3.1 Deferred tax liabilities derecognised during the year (29,268) (74,079)
a) reversals of temporary differences (29,233) (70,060)
b) due to changes in accounting policies - -
c) other (35) (4,019)
3.2 Reductions in tax rates - -
3.3 Other decreases (668) (8,369)
4. Final balance 180,688 145,418
14040O|1 - NOTA
Deferred taxes are recognised on the basis of temporary differences between the financial
accounting value of an asset or liability and its value for tax purposes. That recognition was
made on the basis of the tax legislation in force.
307

No deferred tax liabilities were recognised on untaxed reserves because no uses of the
reserves were planned to affect the regime of tax exemption.
The difference between the “increases” and the “decreases” of the “deferred tax liabilities”
recognised in the income statement does not correspond to the item “change in deferred tax
liabilities”, in table 20.1 of the income statement section “Taxes on income for the year from
continuing operations“ amounting to approximately €1,846 thousand. That amount is
entirely the result of the transfer of deferred tax liabilities relating to the post employment
benefit provision which arose in prior years with the balancing entry in the income
statement and which were transferred during the year, with the balancing entry in equity.
These were increases in the post employment benefit provision due to non-deductible
actuarial losses.
14.5 Changes in deferred tax assets (balancing entry in equity)
31.12.2012 31.12.2011
1. Opening balance 527,437 187,103
2. Increases 12,527 386,259
2.1 Deferred tax assets arising during the year 12,416 385,192
a) relating to previous years - -
b) due to changes in accounting policies - -
c) other 12,416 385,192
2.2 New taxes or increases in tax rates - 908
2.3 Other increases 111 159
3. Decreases (257,700) (45,925)
3.1 Deferred tax assets derecognised during the year (232,711) (7,164)
a) reversals of temporary differences (232,705) (7,148)
b) impairment losses on non-recoverable items (6) (16)
c) due to changes in accounting principles - -
3.2 Reductions in tax rates - -
3.3 Other decreases (24,989) (38,761)
4. Final balance 282,264 527,437
14.6 Changes in deferred tax liabilities (with balancing entry in equity)
31.12.2012
31.12.2011
1. Opening balance 173,244 363,756
2. Increases 15,126 30,779
2.1 Deferred tax liabilities arising during the year 14,940 19,810
a) relating to previous years - 3
b) due to changes in accounting policies - -
c) other 14,940 19,807
2.2 New taxes or increases in tax rates 152 10,820
2.3 Other increases 34 149
3. Decreases (20,200) (221,291)
3.1 Deferred tax liabilities derecognised during the year (20,160) (217,088)
a) reversals of temporary differences (20,084) (216,680)
b) due to changes in accounting policies - -
c) other (76) (408)
3.2 Reductions in tax rates - -
3.3 Other decreases (40) (4,203)
4. Final bal ance 168,170 173,244
308

14.7 Other information
The tables above contain the aggregate figures giving all the information on the single
companies and banks fully consolidated line-by-line. The tables 14.3 “Changes in deferred
tax assets (balancing entry in income statement)” and 14.4 “Changes in deferred tax
liabilities (balancing entry in income statement)” recorded movements due to the
consolidation entries which determined changes in the consolidated profit.
Finally, taxes of €6,890 thousand in respect of dividends that will be paid by subsidiaries in
2013 have been recognised within deferred tax liabilities with the balancing entry in the
income statement (€2,882 thousand as at 31 st December 2011).
Probability test on deferred taxes
As reported in Part A – Accounting Policies in these notes to the financial statements – the
recognition of deferred tax liabilities and assets is performed in compliance with the criteria
of IAS 12, as follows:
– considering all taxable temporary differences, for deferred tax liabilities, except in
some specific cases;
– considering all taxable temporary differences, for deferred tax assets, if it is probable
that future taxable income will be earned, against which the temporary difference
may be used. The effects, amongst other things, of article 117 et seq of the
Consolidated Income Tax Act are taken into consideration in the calculation of
taxable income.
Tax assets are measured on the basis of the tax rates that it is expected will apply in
the year in which the tax asset will be realised. These assets are tested periodically
to measure the degree of recoverability and to verify the level of the rates applicable
as well as the obligation to measure assets not recognised or derecognised because
they do not satisfy the requirements (“reassessment”).
At the date of this report, deferred tax assets recognised within the item “130 Tax assets b)
deferred” totalled €2,011 million and were generated by the following:
- excess recognition of impairment losses on loans pursuant to article 106 paragraph 3 of
the Consolidated Income Tax Act: €629 million;
- goodwill and other intangible assets, subject, amongst other things, to tax relief in
accordance with the law, for which the amortisation is deductible in subsequent years:
€858 million, with regard to the amounts reported in both the separate and the
consolidated financial statements (article 15 paragraph 10 bis of Decree Law No.
185/2008 introduced by Decree Law No. 98/2011 converted by Law No. 111/2011);
- write downs of securities in the AFS portfolio amounting to €264 million and other
generating events amounting to €287 million.
As concerns deferred tax assets involving write downs of loans and receivables and the
amortisation of goodwill and intangible assets, it must be considered that Decree Law No.
225/2010, subsequently added to by Decree Law No. 201/2011 converted by article 9 of
Law No. 214/2011, gave companies (banks in particular) the right to convert those assets
into tax credits when losses for the year are recognised in separate financial statements
and/or tax losses are recognised, where those assets contributed to those losses.
These new procedures for recovering taxes are therefore in addition to and supplementary
to the ordinary criteria for recognition (i.e. the probability test), designed to ensure the
recovery of tax assets, independently of the future profits of a company. As reported in the
Bank of Italy, Consob and Isvap Document No. 5 issued on 15 th May 2012, the normal
recovery by transferring amounts when they become due is now accompanied by recovery
procedures that are certain when predetermined circumstances occur, which make passing
probability tests automatic.
Changes introduced by article 84 paragraph 1 of the Consolidated Income Tax Act must
also be considered in the presence of tax losses, which enables them to be carried forward
with no time limits applied.
On the basis of those assumptions, the UBI Banca Group has carried out the following
tests:
309

– identification of different types of deferred tax assets potentially and/or actually
recognised and of the ordinary recovery period;
– identification of the tax rates forecast on the respective due dates;
– forecasts of future income both with regard to the separate financial statements and
to the tax results for IRES (corporate income tax) and IRAP (local production tax)
purposes, which also take account of the automatic transformation into tax credits
when specific circumstances are met.
The calculations carried out, which also considered the expected positive impacts of Group
reorganisation and restructuring, resulted in a broad tax base able to reabsorb taxes
recognised as at 31 st December 2012.
310

SECTION 15 Non current assets and liabilities and groups of assets and
the associated liabilities held for disposal – Asset item 150 and Liability
item 90
15.1 Non current assets and disposal groups held for sale: composition by type of
asset
A. Singl e assets
31.12.2012 31.12.2011
A.1 Financial assets - 12,750
A.2 Equity investments - -
A.3 Property, plant and equipment 21,382 9,270
A.4 Intangible assets - -
A.5 Other non current assets - -
Total A 21,382 22,020
B. Groups of assets (discontinued operating units) - -
B.1 Financial assets held for trading - -
B.2 Financial assets designated at fair value - -
B.3 Available-for-sale financial assets - -
B.4 Held-to-maturity investments - -
B.5 Loans and advances to banks - -
B.6 Loans and advances to customers - -
B.7 Equity investments - -
B.8 Property, plant and equipment - -
B.9 Intangible assets - -
B.10 Other assets - -
Total B - -
C. Liabilities associated w ith non current assets held
for disposal.
- -
C.1 Borrow ings - -
C.2 Securities - -
C.3 Other liabilities - -
Total C - -
D. Liabilities associated w ith assets held for sale - -
D.1 Due to banks - -
D.2 Due to customers - -
D.3 Debt securities issued - -
D.4 Financial liabilities held for trading - -
D.5 Financial liabilities designated at fair value - -
D.6 Provisions - -
D.7 Other liabilities - -
Total D - -
The increase is due to transfers from the item “Property, plant and equipment” of properties
attributable almost entirely to the companies Banca Carime S.p.A. and UBI Banca S.p.A.
311

15.2 Other information
Nothing to report.
15.3 Information on equity investments in companies subject to significant
influence not accounted for using the equity method
Nothing to report.
SECTION 16 Other assets - Item 160
16.1 Other assets: composition
Description/Amounts 31.12.2012 31.12.2011
Tax credits relating to prior years and related interest - 2,827
VAT tax credits and payments on account 7,472 2,254
Credits for w ithholding taxes paid on behalf of third parties 4,143 11,723
Payments on account for stamp duty on banking documents and deeds 135,897 160,578
Tax credits for personal income tax and post-employment benefits on account 359 389
Tax credits on w ithholding tax 4,560 2,972
Items in transit 248,612 177,709
Debtor items in transit not yet posted to destination accounts 289,422 335,092
Bills, securities, coupons and fees to be debited to customers and correspondents 82,328 92,187
Cheques draw n on the bank 3,018 3,676
Improvements to third party leased assets 36,335 39,516
Accrued income not attributed to specific items 7,785 11,409
Prepaid expenses not attributed to specific items 180,346 90,534
Sundry debtor items 60,113 1,313,477
Total 1,060,390 2,244,343
312

LIABILITIES
SECTION 1 Due to banks – Item 10
1.1 Amounts due to banks: composition by type
Description/Amounts 31.12.2012 31.12.2011
1. Due to central banks 12,098,917 6,001,500
2. Due to banks 3,112,254 3,770,781
2.1 Current accounts and deposits 1,215,750 896,512
2.2 Term deposits 534,610 778,119
2.3 Financing 1,144,494 1,881,780
2.3.1 Repurchase agreements 416,190 1,007,037
2.3.2 Other 728,304 874,743
2.4 Amounts due for commitments to repurchase ow n equity instruments - -
2.5 Other payables 217,400 214,370
Total 15,211,171 9,772,281
Fair value 15,905,552 9,769,928
ab
The item 1 “Due to central banks” consists of the carrying amount of the financing received
from the ECB.
ella 1:
1.2 Details of the item 10 “Due to banks”: subordinated liabilities
No subordinated liabilities due to banks have been recognised.
1.3 Details of the item 10 “Due to banks”: structured debts
No structured debts due to banks have been recognised.
1.4 Amounts due to banks subject to specific hedge
Description/Amounts 31.12.2012 31.12.2011
1. Liabilities subject to fair value specific hedge: - 165,866
a) interest rate risk - 165,866
b) currency risk - -
c) multiple risks - -
2. Liabilities subject to specific cash flow hedge: - -
a) interest rate risk - -
b) currency risk - -
c) other - -
Total - 165,866
1.5 Amounts due for finance leases
No amounts due to banks for finance leases have been recognised.
313

SECTION 2 Due to customers – Item 20
2.1 Amounts due to customers: composition by type
Description/Amounts 31.12.2012 31.12.2011
1. Current accounts and deposits 45,149,448 46,065,651
2. Term deposits 3,184,368 1,396,835
3. Financing 4,732,552 6,022,955
3.1 repurchase agreements 4,273,890 5,568,351
3.2 other 458,662 454,604
4. Amounts due for commitments to repurchase own equity instruments - -
5. Other payables 692,039 945,850
Total 53,758,407 54,431,291
Fair value 53,758,447 54,431,314
Financial liabilities for repurchase agreements include a transaction with the Cassa di
Compensazione e Garanzia (a central counterparty clearing house) amounting to €3.9
billion.
Other financial liabilities include €441 million with the Cassa Deposito e Prestiti (CDP –
state controlled fund and deposit institution).
Tabel
2.2 Details of item 20 “Due to customers”: subordinated liabilities
No subordinated liabilities due to customers have been recognised.
2.3 Details of item 20 “Due to customers”: structured debts
No structured debts due to customers have been recognised.
2.4 Amounts due to customers subject to specific hedge
No amounts due to customers subject to specific hedge have been recognised.
Tabella 2: 202030O|1 - NOTA
2.5 Amounts due for finance leases
No amounts due to customers for finance leases have been recognised.
314

SECTION 3 Debt securities issued – Item 30
3.1 Debt securities issued: composition by type
Typ e o f s e c uritie s /
Amo u nts
A. S e c uritie s
Ca rrying
Amo unt
3 1.12 .2 0 12 3 1.12 .2 0 11
Fa ir Va lue
Ca rrying
Fa ir Va lue
Le ve l 1 Le ve l 2 Le ve l 3 Amo unt Le ve l 1 Le ve l 2 Le ve l 3
1. bonds 41,996,277 19,036,598 22,189,192 193,815 44,429,027 19,040,937 18,480,913 4,180,132
1.1 structured 7,205,978 871,686 5,961,792 189,545 8,193,086 1,358,001 6,161,199 239,665
1.2 other 34,790,299 18,164,912 16,227,400 4,270 36,235,941 17,682,936 12,319,714 3,940,467
2. other securities 3,062,876 - 2,888,738 176,226 3,948,336 - 3,731,633 218,802
2.1 structured - - - - - - - -
2.2 other 3,062,876 - 2,888,738 176,226 3,948,336 - 3,731,633 218,802
To ta l 4 5 ,0 5 9 ,15 3 19 ,0 3 6 ,5 9 8 2 5 ,0 7 7 ,9 3 0 3 7 0 ,0 4 1 4 8 ,3 7 7 ,3 6 3 19 ,0 4 0 ,9 3 7 2 2 ,2 12 ,5 4 6 4 ,3 9 8 ,9 3 4
Structured bonds listed on an active market (Level 1) include a convertible bond issued on
10 th July 2009 by the Parent for €655.5 million, inclusive of amounts accrued.
At the end of the year bonds issued in relation to covered bond operations amounted to €5.8
billion (the carrying amount inclusive of the fair value delta hedge amounting to €555.2
million was €6.3 billion).
Bond issues consisting of issues on the EMTN market totalled €7.1 billion.
3.2 Details of item 30 “Debt securities issued”: subordinated securities
Description/Amount 31.12.2012 31.12.2011
Subordinated securities issued 5,306,027 4,825,306
315

Details of item A.1 “Subordinated securities” are also given.
316

3.3 Debt securities issued subject to specific hedge
31.12.2012 31.12.2011
1. Securities subject to specific fair value hedge: 29,956,681 29,575,882
a) interest rate risk 29,954,774 29,573,877
A
b) currency risk - -
c) multiple risks 1,907 2,005
2. Securities subject to specific cash flow hedge: 826,354 1,128,268
a) interest rate risk - -
b) currency risk 826,354 1,128,268
c) other - -
317

SECTION 4 Financial liabilities held for trading – Item 40
4.1 Financial liabilities held for trading: composition by type
Type o f tra ns a c tio n / Gro up ite ms
A. On-ba la nc e s he e t lia bilitie s
3 1.12 .2 0 12
FV
FV
NA FV* NA
L1 L2 L3 L1 L2 L3
1. Due to banks 1,100,000 1,163,870 - - 1,163,870 325,000 335,123 - - 335,123
2. Due to customers - - - - - 105,000 102,778 - - 102,778
3. Debt instruments - - - - - - - - - -
3.1 Bonds - - - - - - - - - -
3.1.1 Structured - - - - X - - - - X
3.1.2 Other bonds - - - - X - - - - X
3.2 Other securities - - - - - - - - - -
3.2.1 Structured - - - - X - - - - X
3.2.2 Other - - - - X - - - - X
To ta l A 1,10 0 ,0 0 0 1,16 3 ,8 7 0 - - 1,16 3 ,8 7 0 4 3 0 ,0 0 0 4 3 7 ,9 0 1 - - 4 3 7 ,9 0 1
B. De riva tive ins trume nts - - - - - - - - - -
1. Financial derivatives - 69 609,935 - 610,004 - 187 625,585 - 625,772
1.1 For trading X 69 609,242 - X X 187 624,184 - X
1.2 Connected with fair value options X - - - X X - - - X
1.3 Other X - 693 - X X - 1,401 - X
2. Credit derivatives - - - - - - - - - -
2.1 For trading X - - - X X - - - X
2.2 Connected with fair value options X - - - X X - - - X
2.3 other X - - - X X - - - X
To ta l B X 6 9 6 0 9 ,9 3 5 - X X 18 7 6 2 5 ,5 8 5 - X
To ta l (A+B) X 1,16 3 ,9 3 9 6 0 9 ,9 3 5 - X X 4 3 8 ,0 8 8 6 2 5 ,5 8 5 - X
bella 3:
Items 1 “Due to banks” and 2 “Due to customers”, relate to outstanding uncovered short positions of which €54 million with Italian
government securities as the underlying and €1,110 million with government securities of other European countries as the underlying.
Key
FV = fair value
FV* = Fair value calculated excluding changes in value resulting from a change in the credit rating of the issuer since the date of issue
NA = nominal or notional amount
3 1.12 .2 0 11
FV*
318

4.2 Details of item 40 “Financial liabilities held for trading”: subordinated
liabilities
No subordinated financial liabilities held for trading have been recognised.
4.3 Details of item 40 “Financial liabilities held for trading”: structured debt
No structured debt financial liabilities held for trading have been recognised.
4.4 Financial liabilities held for trading (excluding “uncovered short positions”):
annual changes
No financial liabilities held for trading have been recognised.
SECTION 5 Financial liabilities designated at fair value – Item 50
The UBI Group has not applied the option under IFRS to designate financial liabilities at fair
value (fair value option).
SECTION 6 Hedging derivatives – Item 60
6.1 Hedging derivatives: composition by type of hedge and hierarchical level
Type o f de riva tive /
Unde rlying a s s e t s
Fa ir Va lue 3 1.12 .2 0 12 No mina l
Fa ir Va lue 3 1.12 .2 0 11
L1 L2 L3
a mo unt
L1 L2 L3
No mina l
a mo unt
A. Fina nc ia l de riva tive s - 2 ,2 3 4 ,9 8 8 - 13 ,8 4 8 ,9 2 5 - 1,7 3 9 ,6 8 5 - 17 ,6 0 4 ,19 6
1) Fair value - 2,129,499 - 13,052,146 - 1,739,328 - 17,564,103
2) Cash flow - 105,489 - 796,779 - 357 - 40,093
3) Foreign investments - - - - - - - -
B. Cre dit de riva tive s - - - - - - - -
1) Fair value - - - - - - - -
2) Cash flow - - - - - - - -
To ta l - 2 ,2 3 4 ,9 8 8 - 13 ,8 4 8 ,9 2 5 - 1,7 3 9 ,6 8 5 - 17 ,6 0 4 ,19 6
319

6.2 Hedging derivatives: composition by portfolios hedged and type of hedge
F a ir V a lu e
C a s h flo w
Tra n s a c t io n s /Ty p e o f h e d g e
In t e re s t ra t e
ris k
C u rre n c y
ris k
S p e c ific
C re d it
ris k
P ric e
ris k
F o re ig n
Mu lt ip le Ma c ro - h e d g eS p e c ificMa c ro - h e d g ein
ve s t me n t s
ris ks
1. Ava ila b le -for-sa le fina nc ia l a sse ts 1,133 ,949 - - - - X - X X
2. Loa ns 154,972 - - X - X - X X
3. He ld-to-ma tu rity in ve stme n ts X - - X - X - X X
4. P o rtfolio X X X X X 834 ,519 X - X
5. O th e r tra nsa c tions - - - - - X - X -
To t a l a s s e t s 1, 2 8 8 , 9 2 1 - - - - 8 3 4 , 5 19 - - -
1. Fina nc ia l lia bilitie s 11,4 13 - - X - X 105,489 X X
2. P o rtfolio - - - - - - - - X
To t a l lia b ilit ie s 11, 4 13 - - - - - 10 5 , 4 8 9 - -
1. E xpe c te d tra nsa c tions X X X X X X - X X
2. P o rtfolio of fina nc ia l a sse ts a n d lia b ilitie s X X X X X - X - -
SECTION 7 Fair value change in macro-hedged financial liabilities –
Item 70
No items of this type exist.
SECTION 8 Tax liabilities – Item 80
Details of tax liabilities are reported in assets section 14.
SECTION 9 Liabilities associated with assets held for disposal – Item 90
See assets section 15 for details.
320

SECTION 10 Other liabilities – Item 100
10.1 Other liabilities: composition
Description/Amounts 31.12.2012 31.12.2011
Balance of illiquid portfolio items 177,704
Credit items in transit in departments or branches pending posting to accounts 291,680 291,153
Sums available to customers and banks for transactions in the course of payment 79,866 139,587
Items payable to tax authorities on behalf of third parties 38,866 29,488
Items in transit 265,733 120,528
Sums due to customers but not available due to various restrictions 50
Tax w ithheld on income paid to third parties 101,341 129,800
Indirect taxes payable 18,974 6,336
Social security contributions for third parties in the course of payment 1,861 1,944
Dividends and sums due to shareholders 168 286
Amounts due to staff pension funds, inclusive of accessory costs 14,728 13,620
Accrued expenses not attributed to specific items 20,852 62,320
Deferred income not attributed to specific items 117,570 145,097
Payables for educational, cultural, charitable and social purposes 9,547 11,220
Debt for post-employment benefit/w elfare schemes 27,013 12,707
Doubtful overall outcomes on guarantees granted and commitments 52,679 62,252
Due to personnel 187,718 89,500
Residual creditor items 1,162,687 1,846,024
Total 2,391,283 3,139,616
210000O|1 - NOTA
SECTION 11 Post-employment benefits – Item 110
11.1 Annual changes in post-employment benefits
31.12.2012 31.12.2011
A. Opening balances 394,025 393,163
B. Increases 57,026 20,702
B.1 Allocation for the year 6,341 3,955
B.2 Other changes 50,685 16,747
C. Decreases (30,347) (19,840)
C.1 Payments made (22,918) (17,528)
C.2 Other changes (7,429) (2,312)
D. Final balances 420,704 394,025
321

11.2 Other information
The demographic and actuarial hypotheses adopted to value the post-employment benefit provision and
leaving entitlements as at 31/12/2012
Mortality rate
The “RGS48” tables (prepared by the State General Accounting Office) were used
appropriately modified on the basis of historical data for the Group.
Post-employment benefit The probability of advance payments, calculated on the basis of historical data for
advances
the Group, is 2% while the average amount requested is between 45% and 100% of
the available provision.
Inflation rates Long term forecasts of the scenario for inflation led to the use of a rate of 2%.
Discount rates
A discount rate of 2,4481%, was used, calculated as the weighted average of the
EUR Composite A curve as at 31.12.2012, using, as weights, the ratios between the
amount paid and advanced for each maturity date and the total amount to be paid
and advanced until the extinction of the population considered. This was performed
because IAS 19 states that reference should be made to the market yields of “high
quality corporate bonds”, or to yields on securities with a low credit risk. By making
reference to the definition of “investment grade” securities, where a security
qualifies for that classification if its rating is equal to or higher than BBB for S&P or
Baa2 for Moodys, it was decided to consider only securities issued by corporate
issuers with a class “A” rating with the assumption that this class identifies an
average level for “investment grade” securities and thereby excludes higher risk
securities. Since IAS 19 makes no explicit reference to a specific market sector for the
bonds, it was decided to opt for a “composite” market curve which therefore
summarises the prevailing market conditions on the valuation date for securities
issued by companies belonging to different sectors, including utilities, telephone,
financial, banking and industrial sectors. The area was used for the geographical
area.
The demographic and actuarial hypotheses adopted to value the post-employment benefit provision and
leaving entitlements as at 31/12/2011
Mortality rate
The “RGS48” tables (prepared by the State General Accounting Office) were used
appropriately modified on the basis of historical data for the Group.
Post-employment benefit The probability of advance payments, calculated on the basis of historical data for
advances
the Group, is 2% while the average amount requested is between 45% and 100% of
the available provision.
Inflation rates Long term forecasts of the scenario for inflation led to the use of a rate of 2%.
Discount rates
A discount rate of 3.9573%, was used, calculated as the weighted average of the
EUR Composite A curve as at 31.12.2011, using, as weights, the ratios between the
amount paid and advanced for each maturity date and the total amount to be paid
and advanced until the extinction of the population considered. This was performed
because IAS 19 states that reference should be made to the market yields of “high
quality corporate bonds”, or to yields on securities with a low credit risk. By making
reference to the definition of “investment grade” securities, where a security
qualifies for that classification if its rating is equal to or higher than BBB for S&P or
Baa2 for Moodys, it was decided to consider only securities issued by corporate
issuers with a class “A” rating with the assumption that this class identifies an
average level for “investment grade” securities and thereby excludes higher risk
securities. Since IAS 19 makes no explicit reference to a specific market sector for the
bonds, it was decided to opt for a “composite” market curve which therefore
summarises the prevailing market conditions on the valuation date for securities
issued by companies belonging to different sectors, including utilities, telephone,
financial, banking and industrial sectors. The area was used for the geographical
area.
322

SECTION 12 Provisions for risks and charges – Item 120
12.1 Provisions for risks and charges: composition
Items/Components 31.12.2012 31.12.2011
1. Company pension funds 80,563 76,460
2. Other provisions for risks and charges 260,026 269,325
2.1 litigation 116,049 108,612
2.2 costs for staff 43,979 70,932
2.3 other 99,998 89,781
Total 340,589 345,785
Provisions for staff costs consisted of 2012 provisions for the company bonus and trade
union agreements.
12.2 Provisions for risks and charges: annual changes
Items/Components
Pension funds
Total
Other provisions
A. Opening balances 76,460 269,325
B. Increases 11,642 118,134
B.1 Allocation for the year 171 114,668
B.2 Changes due to passage of time 2,841 1,088
B.3 Changes due to changes in discount rate 458
B.4 Other changes 8,630 1,920
C. Decreases (7,539) (127,433)
C.1 Use for the year (7,539) (69,886)
C.2 Changes due to changes in discount rate (2)
C.3 Other changes (57,545)
D. Final balances 80,563 260,026
12.3 Defined benefit company pension funds
The balance in the accounts for defined benefit company pension funds was composed of
Banca Carime Spa funds amounting to €52,581 thousand, Banca Regionale Europea Spa
funds amounting to €26,882 thousand and Centrobanca Spa funds amounting to €1,100
thousand.
12.3.1 Description of the funds
BANCA CARIME SPA
Banca Carime SpA recognised liabilities relating to internal pension funds set aside to cover
supplementary INPS (national insurance institute) pension obligations within liability item
120a “provisions for risks and charges: pension and similar obligations”.
The liabilities in question constitute a defined benefit plan and are subject to periodic
actuarial measurement in compliance with IAS 19 “Employee benefits”.
The following was performed in 2012, with regard to the measurement of these liabilities:
the measurement methods employed were brought into line with those already in use
in the rest of the UBI Banca Group with regard to the variables for the following:
the discount rate curve;
demographic tables;
the characteristics of the prediction model with regard to the disbursement of
the returns;
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the accounting procedures employed for actuarial gains and losses 1 were aligned with
those in use in the UBI Group which involves the recognition of these items in a
special valuation reserve in equity instead of recognising them through profit or loss.
The alignments described above had no impacts on the income statement, but only impacts
on equity consisting of the recognition, in a separate valuation reserve against the item
“Provisions for risks and charges: pension and similar obligations”, of 2012 actuarial losses
amounting to approximately €5.1 million.
To complete the information, because the above amounts were not significant with respect
to Group equity, no restatement of the comparative figures for 2011 was performed.
As at 31.12,2012 three defined benefit funds existed:
1. the fund to supplement I.N.P.S. (national insurance institute) benefits for compulsory
invalidity, old age and survivors insurance for retired staff of the former Cassa di Risparmio
di Calabria e Lucania (Reg. No. 9059 in the Pension Fund Register);
2. the fund to supplement I.N.P.S. (national insurance institute) benefits for compulsory
invalidity, old age and survivors insurance for retired staff of the former Cassa di Risparmio
di Puglia (Reg. No. 9124 in the Pension Fund Register);
3. the fund to supplement I.N.P.S. (national insurance institute) benefits for compulsory
invalidity, old age and survivors insurance for retired staff of the former Cassa di Risparmio
Salernitana (Reg. No. 9053 in the Pension Fund Register);
The funds pay the following welfare benefits as a direct pension for:
• old age, when the participants have reached 60 years of age if men and 55 years of age if
women, provided that they have participated in the fund for at least 15 years;
• length of service, at any age when the participants have participated in the fund for 35
years if men and 30 years if women;
• invalidity at any age when permanently and completely unable to work through disability
and participating in the fund (in addition, for the fund of the former Cassa di Risparmio di
Puglia, the invalidity must be caused by work and for the fund of the former Cassa di
Risparmio Salernitana, participation for at least five years is required).
Furthermore, survivors of participants receive an ‘indirect pension’ if a participant dies while
in service and a surviving dependent’s pension if a participant dies, provided a direct
pension has been paid.
Description of the main actuarial assumptions
The defined benefit plan funds were subjected to actuarial valuation which in the technical
audit as at 31.12.2012 resulted in an amount for the mathematical reserve which on
average, in the actuarial sense, will allow the pensions granted to pensioners and their
surviving dependents to be paid.
The valuations were performed in compliance with accounting standard IAS 19, with the
legislation governing the relative pensions schemes and with company regulations. More
specifically, the criterion used to calculate the liability is consistent with the projected unit
credit method required under IAS 19.
1 In accordance with IAS 19, actuarial gains and losses represent changes in the liability which occur in the period
generated:
differences between the assumptions used in the calculation model and the actual changes in the
magnitudes subjected to verification;
changes that occur in the assumptions in the period in question.
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The following demographic assumptions were assumed:
• for the probability of the death of pensioners, the RGS48 tables prepared by the State
General Accounting Office, separately by gender;
• for the probability of leaving a family, those adopted in the INPS (national insurance
institute) model for projections to 2011; separately by gender;
• for the probability of the death of a spouse, the RGS48” tables prepared by the State
General Accounting Office, separately by gender.
The economic and financial assumptions used in the actuarial valuation were as follows:
Former
Carical
pension fund
Former
Caripuglia
pension fund
Former
Carisal
pension fund
a) Discount rate* 2.41% 2.41% 2.41%
b) Annual pension revaluation rate 1.50% 1.50% 1.50%
c) Inflation rate 2.00% 2.00% 2.00%
* Calculated a s the weighted avera ge of the EUR Composite A interest rate c urve a s a t 31.12,2012, using, as weights, the ratios between the amount paid for each maturity
date a nd the total amount to be paid until the extinction of the population considered.
Actuarial valuations
The table below gives the results of the actuarial valuations performed as at 31 st December
2012 in relation to the different groups.
Changes in liabilities in 2012 for IAS 19 purposes
Former
Carical
pension fund
Former
Caripuglia
pension fund
Former
Carisal
pension fund
Total
A. Opening balances 39,509 10,652 692 50,853
B. Increases 5,808 1,013 88 6,909
B.1 Interest expense balancing entry in the income statement
"staff costs"
1,435 389 25 1,849
B.2 Actuarial losses balancing entry in "valuation reserves" 4,373 624 63 5,060
B.3 Provisions - - - -
B.4 Other changes - - - -
C. Decreases (4,118) (985) (78) (5,181)
C.1 Pension benefits paid (4,118) (985) (78) (5,181)
C.2 Actuarial gains balancing entry in "valuation reserves" - - - -
C.3 Other changes - - - -
D. Final balances 41,199 10,680 702 52,581
The average present value of pensions currently being paid (immediate costs) was identified
as constituting the economic commitments of the fund as at 31 st December 2012,
A sufficiently prudent system of financial capitalisation was adopted that is able to
guarantee the full cover of the benefits to be paid to the group of pensioners existing as at
31 st December 2012 with the accumulated reserves at any moment.
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CENTROBANCA SPA
This is a supplementary pension fund in which there are now 9 remaining pensioners from
Centrobanca participating. No changes in the population of the participants has occurred
since the previous year.
The contribution for the 2012, as specified by the “Fund Regulations” was calculated on the
basis of the weighted average rate used in the valuation performed 2.7%).
Against that contribution the Bank benefited from the returns on using the assets of the
fund. The sums in the fund are not invested in specific assets.
Except for the amount recognised within liability item 120 a), no other liabilities and/or
assets were recognised in the financial statements of the bank
The main actuarial hypotheses on which the valuation of the fund as at 31.12.2012 was
based are as follows:
- demographic assumptions deduced from the RG48 mortality tables prepared by the State
General Accounting Office, separately by gender;
- a discount rate calculated as the weighted average of the EUR Composite A interest rate
curve as at 31.12.2012, using, as weights, the ratios between the amount paid for each
maturity date and the total amount to be paid until the extinction of the population
considered.
The present value of the fund, calculated on the basis of those hypotheses, resulted in an
“actuarial loss” of €106 thousand (point C.3).
Changes in liabilities in 2012 for IAS 19 purposes
CENTROBANCA PENSION FUND
A. Opening balances 1,023
B. Increases 146
B.1 Interest expense balancing entry in the income statement "staff costs" 40
B.2 Actuarial losses balancing entry in "valuation reserves" 106
B.3 Provisions -
B.4 Other changes -
C. Decreases (69)
C.1 Pension benefits paid (69)
C.2 Actuarial gains balancing entry in "valuation reserves" -
C.3 Other changes -
D. Final balances 1,100
BANCA REGIONALE EUROPEA SPA
As at 31.12.2012 there was a fund to supplement compulsory invalidity, old age and
survivors insurance for the staff of Banca Regionale Europea originally from the former
Cassa del Monte di Lombardia and from the former Cassa di Risparmio di Cuneo.
The fund pays the following welfare benefits as a direct pension for:
• old age, when the participants have reached the age limits set in the contracts in force at
the time, provided that they have participated in the fund for at least 15 years;
• length of service, when the participants have reached the minimum age limits set in the
contracts in force at the time;
• invalidity when, having obtained acknowledgement of the condition of invalidity and
whatever the age, a length of service of at least five years has been served, or whatever the
length of service, if the invalidity is permanent and caused by work.
Furthermore, survivors of participants receive an ‘indirect pension’ if a participant dies while
in service after one year of participation in the fund or after any period if death was caused
by work and a surviving dependent’s pension if a participant dies, provided a direct pension
has been paid.
Description of the main actuarial assumptions
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The defined benefit plan fund was subjected to actuarial valuation which in the technical
audit as at 31.12.2011 resulted in an amount for the mathematical reserve which on
average, in the actuarial sense, will allow the pensions granted to pensioners and their
surviving dependents to be paid.
The valuations were performed in compliance with accounting standard IAS 19, with the
legislation governing the relative pensions schemes and with company regulations. More
specifically, the criterion used to calculate the liability is consistent with the projected unit
credit method required under IAS 19.
The following demographic assumptions were assumed:
• for the probability of death of pensioners, direct and/or indirect, those for the Italian
population taken from “RGS48” tables prepared by the State General Accounting Office,
separately by gender;
• for the probability of death of a spouse, those for the Italian population taken from
“RGS48” tables prepared by the State General Accounting Office, separately by gender;
• for the probability of leaving a family, those adopted in the INPS (national insurance
institute) model for projections to 2011 separately by gender.
The economic and financial assumptions used in the actuarial valuation were as follows:
• discount rate of 3%
• expected rate of pension revaluation of 1.50%
• annual inflation rate of 2.00%.
Actuarial valuations
The table below gives the results of the actuarial valuations performed as at 31 st December
2012 in relation to the different groups:
Changes in liabilities in 2012 for IAS 19 purposes
Former B.M .L.
pension fund
Former C.R.C.
pension fund
Total
A. Opening balances 11,230 13,354 24,584
B. Increases 1,743 2,845 4,588
B.1 Interest expense balancing entry in the income statement "staff costs" 460 532 992
B.2 Actuarial losses balancing entry in "valuation reserves" 1,152 2,313 3,465
B.3 Provisions 131 131
B.4 Other changes -
C. Decreases (722) (1,568) (2,290)
C.1 Pension benefits paid (722) (1,568) (2,290)
C.2 Actuarial gains balancing entry in "valuation reserves" -
C.3 Other changes -
D. Final balances 12,251 14,631 26,882
The average present value of pensions currently being paid (immediate costs) was identified
as constituting the economic commitments of the fund as at 31 st December 2012,
A sufficiently prudent system of financial capitalisation was adopted that is able to
guarantee the full cover of the benefits to be paid to the group of pensioners existing as at
31 st December 2012 with the accumulated reserves at any moment.
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12.4 Provisions for risks and charges – other provisions
31.12.2012 31.12.2011
1. Provision for revocation claw back risks 30,284 27,657
2. Provision for bonds and default 8,127 9,637
3. Other provisions for risks and charges 61,587 52,487
Total 99,998 89,781
Other provisions for risks and charges include €12 million set aside as part of the process
for the restructuring of indirect distribution networks commenced in 2011 and €10 million
related with risks related to salary backed lending operations managed by third party
companies.
12.5 Contingent liabilities
31.12.2012 31.12.2011
for personnel litigation 873 499
for revocation risks 2,603 2,210
for bonds in default 80 11
for compounding of interest 3,392 1,127
for claim risks 47 547
for tax litigation 319,549 238,260
for other litigation 400,604 73,506
Total 727,148 316,160
The increase relates to litigation attributable primarily to Centrobanca for the bankruptcy of
Burani Holding N.V. (BDH) and the bankruptcy of Mariella Burani Family Holding (MBFH).
The Management Report may be consulted for further information.
The liabilities regulated by IAS 37, characterised by the absence of certainty over the timing
or the amount of future expense required to settle presumed liabilities, can be classified as
being of two types:
probable liabilities;
contingent liabilities (possible or remote).
The correct identification of the nature of liabilities is of fundamental importance because it
determines whether or not the risk deriving from an obligation must be recognised in the
financial statements.
The recognition of a provision for risks and charges in the financial statements represents a
probable liability of uncertain timing or amount 2 and the amount recognised in the accounts
represents the best estimate of the expenditure required to settle the obligation existing as
at the reporting date and reflects the risks and uncertainties that inevitably characterise a
number of different facts and circumstances.
The amount of a provision is measured by the present value of the expenditure that it is
assumed will be necessary to settle the obligation where the effect of the present value is
significant.
Future events that might affect the amount required to settle the obligation are only taken
into consideration if there is sufficient objective evidence that they will occur.
The measurement of provisions is periodically reviewed to verify that they are reasonable.
2 Details of the criteria for recognising provisions are given in Part A.2 of the notes to the financial statements “The
main items in the financial statements”, sub-section 12 “Provisions for risks and charges”, which may be consulted.
328

The general and theoretical legal parameters which govern the process of determining the
present value of provisions, which is performed for each single case of litigation and for the
relative residual life, are given below:
• type/nature of the litigation, to be assessed in the light of the legal claims formulated by
the counterparty. Various “macro-families” are identifiable in this respect such as corporate
litigation, labour law cases, financial intermediation litigation, litigation generically definable
as compensation for damages (resulting from non-performance of contract obligations,
illegal actions, violation of regulations) etc.;
• degree of “innovation” in the litigation, to be assessed by considering whether the
issues turn on matters already known and “weighed” by the Bank or on completely new
matters which therefore require study (e.g. resulting from a change in the legislation or in
legal orientations);
• degree of “strategic importance” of the litigation to the bank: for commercial reasons
the Bank might for example decide to end a case very rapidly even if it had grounds of
defence that would allow it to resist in court for a long time;
• average length of litigation, to be weighted taking account of geographical factors, which
is to say the location of the jurisdiction in which the case is tried and the state of progress of
the trial. In this respect a decision must be taken on the source of the statistics from which
data is obtained and assistance can be obtained from the lawyers who represent the Bank in
litigation and who have direct knowledge of the jurisdictions concerned for each case;
• the “nature” of the counterparty (e.g. a private individual or a legal entity, a professional
operator or not, a consumer or not, etc.).
A contingent liability is defined as:
a possible obligation, the result of past events, the existence of which will only be
confirmed by the occurrence or (non occurrence) of future events that are not totally
under the control of the enterprise;
a present obligation that is the result of past events, but which is not recognised in the
accounts because:
− it is improbable that financial resources will be needed to settle the obligation;
− the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the financial statements but are only reported,
unless they are considered a remote possibility. In the latter case, in compliance with IAS
37, no information is given on them in the notes to the financial statements.
Amounts for contingent liabilities are also subject to periodic verification because it is
possible that events may occur which make them remote or probable with the possible need,
in the latter case, to make a provision for them in the financial statements.
With regard to contingent liabilities of a tax nature a list of notices of tax assessment,
written notification of findings and other tax litigation matters is given in the Management
Report which may be consulted.
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SECTION 13 Technical reserves – Item 130
No amounts were recognised within item 130 “Technical reserves”, neither as at
31/12/2012 nor as at 31/12/2011.
SECTION 14 Redeemable shares – Item 150
14.1 Redeemable shares: composition
No shares have been issued with redemption clauses.
SECTION 15 Equity attributable to the Parent – Items 140, 160, 170,
180, 190, 200 and 220
15.1 “Share capital” and “Treasury shares”: composition
31.12.2012 31.12.2011
Number of ordinary shares 901,747,005 901,746,759
nominal value per share in euro 2.50 2.50
Number of treasury shares 1,200,000 1,200,000
nominal value per share in euro 2.50 2.50
- NOTA
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15.2 Share capital – Number of shares of the Parent: annual changes
Items/type Ordinary Other
A. Shares existing at the beginning of the year 901,746,759 -
- fully paid up 901,746,759 -
- not fully paid up - -
A.1 Treasury shares (-) (1,200,000) -
B.2 Outstanding shares: initial number 902,946,759 -
B. Increases 246 -
B.1 New issues 246 -
- by payment: 246 -
- business combinations - -
- conversion of bonds 246 -
- exercise of w arrants - -
- other - -
- free of charge: - -
- in favour of employees - -
- in favour of directors - -
- other - -
B.2 Sale of treasury shares - -
B.3 Other changes - -
C. Decreases - -
C.1 Cancellation - -
C.2 Purchase of treasury shares - -
C.3 Company disposal operations - -
C. 4 Other changes - -
D. Outstanding shares: closing balances 902,947,005 -
D.1 Treasury shares (+) 1,200,000 -
D.2 Shares outstanding at the end of the year 901,747,005 -
- fully paid up 901,747,005 -
- not fully paid up - -
15.3 Share capital: other information
Convertible bond issue “UBI 2009/2013 convertibile con facoltà di rimborso in
azioni”
On 18 th June 2009, the Management Board of UBI Banca, following the decisions taken on
27 th May 2009 and in implementation of the authorisation granted by a shareholders’
meeting of 9 th May 2009, approved the final conditions for the convertible bond “UBI
2009/2013 convertibile con facoltà di rimborso in azioni”, offered as a rights issue to the
shareholders of UBI Banca.
The issuance of the convertible bonds was performed for a total nominal amount of
€639,145,872, through the issue of 50,129,088 convertible bonds for a nominal amount of
€12.75 each, offered as a rights issue to the shareholders of UBI Banca at a ratio of four
convertible bonds for every 51 ordinary shares of UBI Banca possessed. The issue price of
each convertible bond was €12.75.
The convertible bonds confer the right on the holders to the payment of a fixed coupon equal
to 5.75% gross per annum of the nominal amount of the convertible bonds to be paid
annually and which will have a term running from 10 th July 2009 until 10 th July 2013.
The Management Board also decided to increase the share capital at the service of the
convertible bonds by a maximum amount of €639,145,872 through the issue of a maximum
of 255,658,348 ordinary shares of UBI Banca, with a nominal value of €2.50 each, normal
dividend entitlement and having the same characteristics of the ordinary shares of UBI
Banca outstanding on the date of issue.
As concerns the conversion and redemption rights attaching to the convertible bonds, when
18 months have elapsed since the issue date of the convertible bonds:
• bondholders have the right to convert the convertible bonds into UBI Banca shares at a
ratio of one ordinary share for every one convertible bond held. If the conversion right is
exercised, UBI Banca shall have the right to pay a sum of money in place of the shares, not
331

less than the nominal amount of the bonds, calculated on the basis of the stock market
share price of the UBI Banca shares;
• UBI Banca has the right to call the convertible bonds by payment in cash and/or in UBI
Banca shares, with the addition of a premium equal to 10% of the nominal amount of the
convertible bonds.
The convertible bonds shall be redeemed at par on the maturity date. UBI Banca shall have
the right to perform the redemption by payment in cash and/or ordinary shares of UBI
Banca, in an amount not less than the nominal value of the convertible bonds.
Also, with regard to the conversion right, UBI Banca has set a cap on the value of its share
at €12.80, above which, redemption of the liability will be performed by repayment in
shares.
With regard to conversions performed during the year, details of all the movements in
shares is given in the table below.
Share capital increase and repurchase of treasury shares
Details of changes in the number of shares, in the share capital and in the share premiums
that occurred in 2012 are given below.
Date Reason Number of shares Share capital
Share premium
reserve
31.12.2011 901,746,759 2,254,366,898 7,429,912,824
04.07.2012 Conversion Convertible bonds July 2012 246 615 2,496
Replenishment of loss - 2,713,053,965
31.12.2012 901,747,005 2,254,367,513 4,716,861,355
No repurchases of treasury shares were made during the year.
15.4 Reserves of profits: other information
Reserves of profits in the consolidated financial statements decreased by €51,691 thousand
due to the distribution of the 2011 dividend and to allocations of profits made by the
governing bodies of the Bank and its subsidiaries.
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SECTION 16 Non-controlling interests – Item 210
16.1 Non-controlling interests: composition
Non-controlling interests net of valuation reserves and profits (losses) for the year decreased
by approximately €64,085 thousand. The changes were due primarily to extraordinary
transactions performed during the year, which have already been reported in full in the
Consolidated Management Report (merger of Banca Di San Giorgio S.p.A into Banca
Regionale Europea S.p.A., increase in the share capital of Banca Popolare di Ancona S.p.A.
and of Banca Regionale Europea S.p.A. by drawing on valuation reserves) and also to
purchases from non-controlling shareholders of remaining outstanding shares of IW Bank
S.p.A and the purchase by the Parent of the entire stake held by Banca Popolare di Ancona
S.p.A. in UBI Leasing S.p.A. The impacts on non-controlling interests were as follows:
Share capital: increase of approximately €6.8 million of which:
Banca Regionale Europea S.p.A.
+ €12,048 thousand
Banca Popolare di Ancona S.p.A.
+ €1,758 thousand
UBI leasing S.p.A.
- €3,227 thousand
IW Bank S.p.A. and its former subsidiary Investnet - €3,542 thousand
With regard to Banca Regionale Europea S.p.A., the increase in the share capital by drawing
on the valuation reserves resulted in an increase of approximately €29.4 million. An
increase of approximately €1.8 million also occurred due to the increase in the share capital
at the service of the merger of Banco San Giorgio S.p.A. together with a decrease of
approximately €19.1 million as a consequence of cancelling the share capital of the merged
bank.
The positive impact of Banca Popolare di Ancona S.p.A. is entirely due to the increase in the
share capital performed by drawing on the valuation reserves.
The negative impacts of UBI Leasing S.p.A. and IW Bank S.p.A. are due to the increase in
the percentage of ownership by the Group.
Non-controlling interests include €12,300 thousand consisting of savings shares and
€32,808 thousand consisting of the privileged shares of Banca Regionale Europea S.p.A.
Share premiums decreased by approximately €20.3 million of which:
31.12.2012 31.12.2011
Share capital 510,527 503,755
Share premiums 55,853 76,173
Reserves 267,879 318,417
Treasury shares
Valuation reserves (3,930) 21,182
Equity instruments
Profit for the year attributable to non-controlling interests 8,958 (20,603)
Total 839,287 898,924
former Banco di San Giorgio S.p.A.
IW Bank S.p.A. and its subsidiary Investnet
UBI leasing S.p.A.
- €14,995 thousand
- €4,078 thousand
- €1,091 thousand
The changes are due to the operations already described. The decrease for UBI Leasing
S.p.A. of approximately €1.1 million included €0.7 million due to the replenishment of
losses incurred the year before.
Reserves decreased by approximately €50.5 million. That decrease was determined
primarily by a decrease of €20 million (2011 loss) and by the distribution of
dividends and other outgoings amounting to €35.4 million. On the other hand, an
333

increase was recorded of approximately €6 million due primarily to the merger
already mentioned and to the changes in the percentage holdings in IW Bank S.p.A.
and UBI Leasing S.p.A..
The remaining differences relate to residual changes in percentage holdings due to the
purchase or sale of shares from or to non- controlling shareholders during the year.
The effect of the transfer to the income statement of asset items when the purchase
price allocation was performed had a negative impact on profit attributable to noncontrolling
interests amounting to approximately €3,665 thousand (€55,378
thousand in 2011, of which €45,605 thousand due to impairment losses recognised
on intangible assets as a result of impairment tests performed).
334

OTHER INFORMATION
1. Guarantees granted and commitments
Transactions 31.12.2012 31.12.2011
1) Guarantees granted of a financial nature 3,725,888 3,239,645
a) Banks 1,657,403 242,523
b) Customers 2,068,485 2,997,122
2) Guarantees granted of a commercial nature 4,309,603 4,462,468
a) Banks 191,694 133,237
b) Customers 4,117,909 4,329,231
3) Irrevocable commitments to pay funds 3,602,463 4,982,031
a) Banks 69,681 253,441
i) of certain use 69,473 253,344
ii) of uncertain use 208 97
b) Customers 3,532,782 4,728,590
i) of certain use 196,757 318,599
ii) of uncertain use 3,336,025 4,409,991
4) Commitments underlying credit derivatives: protection sales - -
5) Assets pledged to guarantee obligations to third parties - -
6) Other commitments 4,011,628 4,408,578
Total 15,649,582 17,092,722
bella 4: 301000O|1 – NOTA
2. Assets pledged to secure own liabilities and commitments
Portfolios 31.12.2012 31.12.2011
1. Financial assets held for trading 293,167 1,151,894
2. Financial assets designated at fair value - -
3. Available-for-sale financial assets 4,867,111 5,225,541
4. Held-to-maturity investments 3,158,013 -
5. Loans and advances to banks 50,068 1,138,914
6. Loans and advances to customers 13,981,274 9,882,100
7. Property, plant and equipment - -
Total 22,349,633 17,398,449
The table summarises assets recognised in the balance sheet pledged by the UBI Group to
secure its liabilities.
The amount shown in line item 6 “Loans and advances to customers" includes €13,953,702
thousand relating to the mortgages transferred to the special purpose entities UBI Finance
Srl and UBI Finance CB2 Srl as part of the programme to issue covered bonds as reported
below:
- UBI Finance Srl 11,207,995 9,646,931
- UBI Finance CB2 Srl 2,745,707 -
- Total 13,953,702 9,646,931
335

The financial assets contained in the table relate to securities and loans pledged by the
banks in the Group as reported in detail below:
Portfolios
Guarantees of liabilities or commitments
Financial assets held for trading
Repurchase agreements 293,167
293,167
Available-for-sale financial assets
Bank of Italy advances 900,314
Repurchase agreements 3,930,902
Issue of bankers' drafts 1,380
Interbank market collat. 6,902
Other transactions 27,613
4,867,111
Held-to-maturity investments
Repurchase agreements 3,158,013
3,158,013
Loans and advances to banks
Bank of Italy advances 50,068
50,068
Loans to customers
Mortgages 27,572
Mortgages to back covered bonds 13,953,702
13,981,274
In addition to the assets reported above, securities acquired through reverse repurchase
agreements were also pledged as guarantees as follows:
To guarantee
Nominal amount of securities
Liabilities or commitments
issued by third parties
issued by group banks and
companies
Bank of Italy advances 7,366,822 9,050,000
7,366,822 9,050,000
The securities issued by Group companies are notes – senior tranches – issued by the
special purpose entities for securitisations of the following originators:
• UBI Leasing: €4,114 million nominal;
• Banca Popolare di Ancona: €710 million nominal;
• Banco di Brescia: €665 million nominal;
336

• Banca Popolare Commercio e Industria: €576 million nominal;
• UBI Banca (former Banca 24-7): €1,322 million nominal.
The securities issued by the Bank consisted of fixed rate bonds backed by the government
for a nominal amount of €6,000 million and other floating rate bonds for a nominal amount
of €3,050 million.
3. Information on operating leases
No items of this type exist.
4. Composition of investments for unit-linked and index-linked policies
No items of this type exist.
5. Management and intermediation on behalf of third parties
Type of services
Amounts
1. Execution of orders on behalf of customers 149,660,022
a) Purchases 74,291,039
1. Settled 73,818,477
2. Not settled 472,562
b) Sales 75,368,983
1. Settled 74,878,880
2. Not settled 490,103
2. Portfolio managements 29,276,424
a) Individual 12,894,968
b) Collective 16,381,456
3. Custody and administration of securities 226,518,064
a) Securities of third parties held on deposit: connected w ith depository bank activity (not including portfolio management) -
1. Securities issued by companies included in the consolidation
2. Other securities
b) Other third party securities held on deposit (not including portfolio managements): other 120,668,687
1. Securities issued by companies included in the consolidation
2. Other securities 120,668,687
c) Securities belonging to third parties, deposited w ith third parties 79,144,946
d) Ow n securities deposited with third parties 26,704,431
4. Other transactions 43,372,920
337

Part C – Notes to the consolidated income
statement
SECTION 1 Interest – Items 10 and 20
1.1 Interest income and similar: composition
Items/Type
Debt
instruments
Financing
Other
transactions
2012 2011
1. Financial assets held for trading 54,233 - 26 54,259 42,392
2. Financial assets designated at fair value - - - - -
3. Available-for-sale financial assets 454,581 - - 454,581 373,970
4. Held-to-maturity investments 96,150 - - 96,150 -
5. Loans and advances to banks 9,558 15,917 6 25,481 56,327
6. Loans and advances to customers 1,458 3,290,591 785 3,292,834 3,572,985
7. Hedging derivatives X X - - -
8. Other assets X X 1,095 1,095 1,872
Total 615,980 3,306,508 1,912 3,924,400 4,047,546
Interest on impaired assets relates almost entirely to loans to customers and totalled
€195,307 thousand.
As already reported in Part A of the Notes to the financial statements, interest income from
customers includes €67,653 thousand, relating to overdraft penalties recognised until the
end of September. With effect from 1 st October 2012, the overdrawn penalty was replaced by
a fast credit processing fee (amounting to €21,622 thousand for 2012), recognised within
“Other operating income”, in compliance with the Bank of Italy “addendum letter” No.
46586/13 of 15 th January 2013.
As already reported, the amount for the “overdraft penalties” for the whole of 2011 was
€100,937 thousand.
1.2 Interest income and similar: hedging differentials
The interest balance for hedging differentials to 31 st December 2012 was negative.
Details are given in Table 1.5 later in this section.
1.3 Interest and similar income: other information
Items/Amounts 2012 2011
Interest income on financial assets held in foreign currency 57,755 44,063
Interest income on finance lease transactions 229,794 300,126
ble 4: 501030O|1 - NOTA
338

1.4 Interest expense and similar: composition
Items/Type Borrow ings Securities
Other
transactions
'2012 '2011
1. Due to central banks (97,721) - - (97,721) (21,520)
2. Due to banks (28,841) X (194) (29,035) (62,336)
3. Due to customers (483,178) X (112) (483,290) (416,507)
4. Debt securities issued X (1,302,558) - (1,302,558) (1,325,414)
5. Financial liabilities held for trading (38,728) - - (38,728) (12,574)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions X X (595) (595) (728)
8. Hedging derivatives X X (40,789) (40,789) (86,778)
Total (648,468) (1,302,558) (41,690) (1,992,716) (1,925,857)
e 5: 502000O|1 - NOTA3_ALTRE
1.5 Interest expense and similar: hedging differentials
able 6: 502010O|1 - NOTA
Items 2012 2011
A. Positive differentials on hedging transactions 955,791 1,086,381
B. Negative differentials on hedging transactions (996,580) (1,173,159)
C. Balance (A-B) (40,789) (86,778)
1.6 Interest expense and similar: other information
Items/Amounts 2012 2011
Interest expense on liabilities held in foreign currency (28,731) (30,360)
Interest expense on finance lease transactions (653) (759)
Table 7: 502020O|1 - NOTA
339

SECTION 2 Commissions – Items 40 and 50
2.1 Fee and commission income: composition
Type of services/Segments 2012 2011
a) guarantees granted 50,078 49,793
b) credit derivatives - -
c) management, trading and advisory services: 636,406 622,140
1. trading in financial instruments 27,165 38,410
2. foreign exchange trading 7,400 11,868
3. portfolio management 251,523 277,518
3.1. individual 67,994 72,042
3.2. collective 183,529 205,476
4. custody and administration of securities 12,293 13,702
5. depository banking - -
6. placement of securities 133,614 74,538
7. receipt and transmission of orders 49,521 40,852
8. advisory activities 6,398 4,855
8.1 on investments 6,398 4,855
8.2 on financial structure - -
9. distribution of third party services 148,492 160,397
9.1. portfolio management 37 42
9.1.1. individual 37 42
9.1.2. collective - -
9.2. insurance products 106,386 119,723
9.3. other products 42,069 40,632
d) collection and payment services 154,047 150,128
e) servicer activities for securitisation transactions - -
f) services for factoring transactions 26,240 26,486
g) tax collection and payment services - -
h) management of multilateral trading systems - -
i) current account administration 213,682 216,501
j) other services 288,969 286,779
Total 1,369,422 1,351,827
The sub item j) “Other services” for 2012 includes “Other commission income” consisting of:
- Loans to customers €211,251 thousand
- foreign transactions €10,558 thousand
During the year Centrobanca performed transactions which led to the recognition within
commission income of “day one profit” amounting to €700 thousand (these commissions
totalled €141 thousand in 2011). These are transactions for which a difference between the
transaction price and the value of the instrument obtained using internal valuation
techniques arises on initial recognition.
Compared to the previous year, commissions for the placement of third party securities
increased by approximately €59 million, the result above all of the component related to the
subscription of the new UBI Pramerica Sicav’s (Cedola Certa, Protezione Crescita, Focus
Italia, Mercati Emergenti and Global Dynamic Allocation).
340

2.2 Commission expense: composition
Services/Segments 2012 2011
a) guarantees received (44,171) (807)
b) credit derivatives - -
c) management and trading services: (78,322) (82,257)
1. trading in financial instruments (14,403) (18,268)
2. foreign exchange trading (10) (38)
3. portfolio management (8,526) (6,236)
3.1. own - -
3.2. on behalf of third parties (8,526) (6,236)
4. custody and administration of securities (7,502) (6,979)
5. placement of financial instruments (4,844) (4,416)
6. financial instruments, products and services distributed through indirect netw orks (43,037) (46,320)
d) collection and payment services (38,946) (44,141)
e) other services (26,177) (32,688)
Total (187,616) (159,893)
Table 8: 505000O|1 - NOTA1_BANCHE
As already reported in Part A of the Notes to the financial statements, fee and commission
expense for guarantees received includes €42.8 million paid by the Parent for the issue of
guarantees by the government on debt issued and used for refinancing operations with the
European Central Bank.
Table 9: 505000O|1 - NOTA3_ALTRE
SECTION 3 Dividends and similar income – Item 70
3.1 Dividend and similar income: composition
Items/Income
Dividends
2012 2011
Income from
OICR units
(c o lle c tive in ve stme nt
ins trume nts)
Dividends
Income from
OICR units
(c o lle c tive in ve stme nt
ins trume nts)
A. Financial assets held for trading 38 - 1,037 18
B. Available-for-sale financial assets 11,287 3,224 16,079 2,863
C. Financial assets at fair value 1,042 - - -
D. Equity investments - X - X
Total 12,367 3,224 17,116 2,881
Dividends recognised within “available-for-sale financial assets”, included those received on
the Intesa Sanpaolo Spa shares, which amounted to approximately €9.3 million, while
dividends on “financial assets designated at fair value” relate to Centrobanca merchant
banking equity investments, which have been transferred this year from “financial assets
held for trading” to “financial assets designated at fair value”.
Table 10: 507000O|1 - NOTA
341

SECTION 4 Net trading income (loss) – Item 80
4.1 Net trading income (loss): composition
Transactions/Components of income
Gains
(A)
Income from
trading
(B)
Losses
(C)
Losses from
trading
(D)
Net income
[(A+B) - (C+D)]
1. Financial assets held for trading 112,875 186,923 (3,067) (82,043) 214,688
1.1 Debt instruments 21,928 72,024 (207) (8,763) 84,982
1.2 Equity instruments 1,675 799 (2,560) (325) (411)
1.3 Units in O.I.C.R. (collective investment instruments) 72 133 (300) (4) (99)
1.4 Financing - - - - -
1.5 Other 89,200 113,967 - (72,951) 130,216
2. Financial liabilities held for trading 9,530 16 - (10) 9,536
2.1 Debt instruments 9,530 - - - 9,530
2.2 Payables - - - - -
2.3 Other - 16 - (10) 6
3. Other financial assets and liabilities: exchange rate
X X X X 7,308
differences
4. Derivative instruments 328,582 1,620,729 (317,630) (1,651,874) (139,729)
4.1 Financial derivatives 328,582 1,620,729 (317,630) (1,651,874) (139,729)
- on debt instruments and interest rates 291,999 1,608,832 (290,011) (1,637,661) (26,841)
- on equity instruments and share indices 203 5,558 (54) (1,250) 4,457
- on currencies and gold X X X X (119,536)
- other 36,380 6,339 (27,565) (12,963) 2,191
4.2 Credit derivatives - - - - -
Total 450,987 1,807,668 (320,697) (1,733,927) 91,803
The amount shown in line 1.5 “Other” relates principally to the exchange rate differences for
certificates of deposit denominated in yen and it is linked to the amount shown in line 4.1
“Financial derivatives on currencies and gold”.
SECTION 5 Net hedging income (loss) – Item 90
5.1 Net hedging income (loss): composition
Income components/Amounts 2012 2011
A. Relative income
A.1 Fair value hedge derivatives 490,397 873,414
A.2 Hedged financial assets (fair value) 427,730 800,569
A.3 Hedged financial liabilities (fair value) 62,995 116,520
A.4 Cash flow hedge financial derivatives - -
A.5 Assets and liabilities in foreign currency - 1,152
Total income from hedging activity (A) 981,122 1,791,655
B. Relative expense
B.1 Hedging derivatives designated at fair value (469,600) (935,417)
B.2 Hedged financial assets (fair value) (26,461) (141,837)
B.3 Hedged financial liabilities (fair value) (483,989) (705,430)
B.4 Cash flow hedge financial derivatives - (33)
B.5 Assets and liabilities in foreign currency - -
Total expense from hedging activity (B) (980,050) (1,782,717)
C. Net hedging income (A-B) 1,072 8,938
342

SECTION 6 Income (loss) from disposals/repurchases – Item 100
6.1 Income (loss) from disposals/repurchases: composition
2012 2011
Items/Income components
Profits Losses Net result Profits Losses Net result
Financial assets
1. Loans and advances to banks 16 - 16 - - -
2. Loans and advances to customers 9,337 (11,484) (2,147) 7,848 (5,384) 2,464
3. Available-for-sale financial assets 145,791 (4,235) 141,556 12,372 (443) 11,929
3.1 Debt instruments 128,421 (3,825) 124,596 1,407 (380) 1,027
3.2 Equity instruments 16,686 (406) 16,280 8,467 (63) 8,404
3.3 Units in O.I.C.R (collective investment instruments) 684 (4) 680 2,498 - 2,498
3.4 Financing - - - - - -
4. Held-to-maturity investments - - - - - -
Total assets 155,144 (15,719) 139,425 20,220 (5,827) 14,393
Financial liabilities
1. Due to banks - - - - - -
2. Due to customers - - - - - -
3. Debt securities issued 46,964 (22,838) 24,126 21,198 (9,062) 12,136
Total liabilities 46,964 (22,838) 24,126 21,198 (9,062) 12,136
As concerns equity instruments, the most significant transaction was the disposal of the
interest held in Intesa Sanpaolo SpA, which generated a profit of approximately €14 million.
With regard to financial assets consisting of debt instruments, the profits were mainly
attributable to disposals of government securities and amounted to €124 million.
The profit shown in the table above on financial liabilities is attributable to the sale and
redemption of own issue bonds, of which €20.7 million consisted of the gain on the public
tender offer to purchase preference shares.
SECTION 7 Net income (loss) on financial assets and liabilities
designated at fair value – Item 110
7.1 Net change in financial assets/liabilities designated at fair value: composition
Transactions/Components of income
Gains
(A)
Income from
trading
(B)
Losses
(C)
Losses from
trading
(D)
Net income
[(A+B) - (C+D)]
1. Financial assets 9,486 2,781 (11,290) (125) 852
1.1 Debt instruments - - - - -
1.2 Equity instruments 5,022 90 (5,463) - (351)
1.3 Units in O.I.C.R. (collective investment instruments) 4,464 2,691 (5,827) (125) 1,203
1.4 Financing - - - - -
2. Financial liabilities held for trading - - - - -
2.1 Debt instruments - - - - -
2.2 Due to banks - - - - -
2.3 Due to customers - - - - -
3. Other financial assets and liabilities: exchange rate
X X X X -
differences
4. Credit and financial derivatives - - - - -
Total 9,486 2,781 (11,290) (125) 852
From 2012, the item has incorporated the effects on the income statement of the securities
transferred by Centrobanca into the portfolio of financial assets designated at fair value,
reported in greater detail in the corresponding section on the balance sheet.
The following table gives the changes that occurred in the hedge fund portfolio in 2012:
343

de s c riptio n
o pe ning
ba la nc e s
purc ha s e s
s a le s /
re de mptio ns
pro fits /
lo s s e s
g a ins /lo s s e s
e xc ha ng e
ra te e ffe c ts
c lo s ing
ba la nc e
Madison Funds 10,777 - - - (5,037) (208) 5,532
Corinthian Funds 951 - (1,880) 1,351 (422) - -
Tages Funds 104,846 20,000 (19,880) 824 3,874 - 109,664
Other hedge funds 9,600 - (1,937) 391 221 (90) 8,185
To ta l 12 6 ,17 4 2 0 ,0 0 0 (2 3 ,6 9 7 ) 2 ,5 6 6 (1,3 6 4 ) (2 9 8 ) 12 3 ,3 8 1
344

SECTION 8 Net impairment losses on loans – Item 130
8.1 Net impairment losses on loans: composition
Im pa irm e nt lo s s e s
R e v e rs a ls o f im pa irm e nt lo s s e s
Tra n s a c tio ns / C o m p o ne nts o f
inc o m e
Write -o ffs
S p e c ific
Othe r
P o rtfo lio
Of inte re s t
S p e c ific
Othe r
re v e rs a ls
Of inte re s t
P o rtfo lio
Othe r
re v e rs a ls
2 0 12 2 0 11
A . Lo a ns a nd a dv a n c e s to ba nks - - (6 8 ) - 2 - - (6 6 ) (117 )
- Financing - - (68) - 2 - - (66) (117)
- Debt ins truments - - - - - - - - -
B . Lo a ns a nd a dv a n c e s to c u s to m e rs (13 0 ,4 3 8 ) (9 8 1,6 6 4 ) (3 5 ,8 9 4 ) 5 0 ,6 2 7 17 8 ,8 4 7 - 7 1,3 7 4 (8 4 7 ,14 8 ) (6 0 6 ,9 6 1)
Deterio rated lo ans purchas ed - - - - - - - - -
- Financing - - X - - - X - -
- Debt ins truments - - X - - - X - -
Other lo ans and receivables (130,438) (981,664) (35,894) 50,627 178,847 - 71,374 (847,148) (606,961)
- Financing (130,438) (981,587) (35,894) 50,627 178,847 - 71,374 (847,071) (606,884)
- Debt ins truments - (77) - - - - - (77) (77)
C . To ta l (13 0 ,4 3 8 ) (9 8 1,6 6 4 ) (3 5 ,9 6 2 ) 5 0 ,6 2 7 17 8 ,8 4 9 - 7 1,3 7 4 (8 4 7 ,2 14 ) (6 0 7 ,0 7 8 )
Table 11: 514000O|1 - NOTA1_BANCHE
Table 12: 514000O|1 - NOTA3_ALTRE
345

8.2 Net impairment losses on available-for-sale financial assets: composition
Tra ns a c tio ns / C o m po ne nts o f
inc o m e
Im pa irm e nt lo s s e s
R e v e rs a ls o f im pa irm e nt lo s s e s
S pe c ific
S pe c ific
Write -o ffs Othe r o f inte re s t o the r re v e rs a ls
2 0 12 2 0 11
A. De bt ins truments - (288) - - (288) (373)
B. Equity ins truments - (37,117) X X (37,117) (119,733)
C. Units in O.I.C.R.
(co llec tive inves tment ins truments ) - (18,740) X - (18,740) (8,076)
D. Lo ans to ba nks - - - - - -
E. Lo ans to cus to mers - - - - - -
To ta l - (5 6 ,14 5 ) - - (5 6 ,14 5 ) (12 8 ,18 2 )
The main impairment losses on equity instruments related to Banca Intesa Sanpaolo Spa, for which the valuation on 31 st December 2012
resulted in recognition of impairment of €31.8 million (€112.5 million as at 31/12/2011). An impairment loss was also recognised on the
investment in A2A Spa of €3.5 million (€3.3 million as at 31/12/2011).
Impairment losses on units held in OICRs (collective investment instruments) included those relating to the following: the Centrobanca
Sviluppo Impresa fund amounting to €12.5 million, the Polis fund (Portafoglio F. immobiliare C.) amounting to €4.4 million, the ITAL. Inv. -
Port fund amounting to €0.5 million and the GGP Greenfield A1 and A3 fund amounting to €0.8 million. These impairment losses, the result
of the adoption of a policy for the impairment testing of available-for-sale financial assets reported in part A.2 of the notes to the consolidated
financial statements, were recognised in relation to the continued lower value of the units with respect to the historical cost of purchase.
8.3 Net impairment losses on held-to-maturity investments: composition
This type of item is not present for the UBI Group.
346

8.4 Net impairment losses on other financial transactions: composition
Tra ns a c tio ns /
C o m po ne nts o f inc o m e
Im pa irm e nt lo s s e s
R e v e rs a ls o f im pa irm e nt lo s s e s
S pe c ific S pe c ific
po rtfo lio
2 0 12 2 0 11
po rtfo lio
Write -o ffs Othe r o f inte re s t o the r re v e rs a ls o f inte re s t o the r re v e rs a ls
A. Guarantees granted (150) (12,752) (3,179) - 12,268 - 4,367 554 (6,256)
B. Credit derivatives - - - - - - - - -
C. Co mmitments to pay funds - - (476) - - - 1,352 876 (366)
D. Other trans actio ns - (97) - - 2 - - (95) (339)
To ta l (15 0 ) (12 ,8 4 9 ) (3 ,6 5 5 ) - 12 ,2 7 0 - 5 ,7 19 1,3 3 5 (6 ,9 6 1)
347

SECTION 9 Net premiums – Item 150
9.1 Net premiums: composition
This item no longer exists in the UBI Banca Group, because UBI Assicurazioni has been
excluded from the consolidation since 1 st January 2010.
13: 516000O|1 - NOTA
SECTION 10 Other income/expense of insurance operations – Item 160
10.1 Balance of other income/expense of insurance operations: composition
This item does not exist in the UBI Banca Group.
10.2 Composition of the sub-item “Net change in technical reserves”
This item does not exist in the UBI Banca Group.
10.3 Composition of the sub-item “Claims paid during the year”
This item does not exist in the UBI Banca Group.
14: 517020O|1 - NOTA
SECTION 11 Administrative expenses – Item 180
11.1 Staff costs: composition
Type of expense/Sectors 2012 2011
1) Employees (1,505,574) (1,425,623)
a) Wages and salaries (951,619) (983,736)
b) Social security charges (250,702) (267,619)
c) Post-employment benefits (50,879) (60,928)
d) Pension expense (1,152) (74)
e) Provision for post-employment benefits (10,196) (9,078)
f) Provision for pension and similar: (3,042) (2,930)
- defined contribution (113) (139)
- defined benefits (2,929) (2,930)
g) Payments to external supplementary pension plans: (43,142) (50,431)
- defined contribution (42,681) (50,154)
- defined benefits (461) (277)
h) Expenses resulting from share based payments - -
i) Other employee benefits (194,842) (50,688)
2) Other personnel in service (2,474) (6,504)
3) Directors and statutory auditors (17,705) (19,001)
4) Expenses for retired personnel - 27,932
Total (1,525,753) (1,423,196)
The amount recognised within line item 4 as at 31 st December 2011 relates to the release of
amounts recognised in prior years due to actuarial recalculations of post retirement
benefits, now no longer considered due.
348

11.2 Average number of employees by category
2012 2011
EM PLOYEES 18,360 18,645
a) senior managers 452 468
b) middle managers 7,517 7,482
c) remaining employees 10,391 10,695
OTHER PERSONNEL 374 476
“Other personnel” also includes the directors and statutory auditors of Group member
companies. 15: 519010O|1 - NOTA
11.3 Defined benefit company pension funds: total expenses
See section 12.3 “Defined benefit company pension funds” in the balance sheet liabilities
section.
11.4 Other benefits for employees
The item “Other benefits for employees” consists mainly of expenses relating to the leaving
incentive plan amounting to €152 million, expenses for luncheon vouchers amounting to
€19.4 million and insurance expenses of €17.0 million.
Details of redundancy plans are given in the “Management Report” in the section “Human
resources”, which may be consulted.
11.5 Other administrative expenses: composition
Table 16: 519000bO|1 - NOTA
2012 2011
A. Other administrative expenses (644,748) (666,346)
Rent payable (67,702) (72,060)
Professional and advisory services (92,216) (90,225)
Rentals hardw are, softw are and other assets (41,073) (36,211)
Maintenance of hardware, software and other assets (37,765) (40,483)
Tenancy of premises (55,867) (54,755)
Property maintenance (25,971) (27,245)
Counting, transport and management of valuables (14,529) (16,004)
Membership fees (9,338) (9,468)
Information services and land registry searches (10,660) (12,612)
Books and periodicals (1,659) (1,877)
Postal (23,866) (26,576)
Insurance premiums (43,083) (44,276)
Advertising (16,489) (26,007)
Entertainment expenses (1,735) (2,017)
Telephone and data transmission expenses (54,728) (58,531)
Services in outsourcing (50,699) (46,439)
Travel expenses (23,330) (23,476)
Credit recovery expenses (43,872) (44,000)
Forms, stationery and consumables (8,510) (11,137)
Transport and removals (7,654) (7,354)
Security (8,450) (9,736)
UBI Group merger expenses - -
Other expenses (5,552) (5,857)
B. Indirect taxes (213,522) (214,707)
Indirect taxes and duties (31,594) (37,498)
Stamp duty (142,951) (140,749)
Municipal property tax (16,915) (8,806)
Other taxes (22,062) (27,654)
Total (858,270) (881,053)
349

SECTION 12 Net provisions for risks and charges – Item 190
12.1 Net provisions for risks and charges: composition
Provisions
Releases
Net provisions
in 2012
Net provisions
in 2011
Additions to and uses of revocation provisions (11,440) 1,634 (9,806) (2,248)
Additions to and uses of staff cost provisions (271) 12 (259) (450)
Additions to and uses of provisions for bonds in
default
(147) 218 71 (286)
Additions to and uses of litigation provisions (29,546) 18,261 (11,285) (10,425)
Other additions to and uses of provisions for risks
and charges
(35,306) 7,373 (27,933) (18,186)
Total (76,710) 27,498 (49,212) (31,595)
Table 17: 520000O|1 - NOTA
Table 12.2 “Provisions for risks and charges – annual changes” in the balance sheet
liabilities section may be consulted for provisions and uses of provisions for risks and
charges
SECTION 13 Net impairment losses on property, plant and equipment –
Item 200
13.1 Net impairment losses on property, plant and equipment: composition
Assets/Components of income
Depreciation
(a)
Impairment
losses
(b)
Reversals of
impairment
losses (c)
Net result
(a+b-c)
A. Property, plant and equipment
A.1 Ow ned (100,859) (922) - (101,781)
- for operational use (96,608) (850) - (97,458)
- for investment (4,251) (72) - (4,323)
A.2 Acquired through finance lease (762) - - (762)
- for operational use (755) - - (755)
- for investment (7) - - (7)
Total (101,621) (922) - (102,543)
: 521000O|1 - NOTA3_ALT
350

SECTION 14 Net impairment losses on intangible assets – Item 210
14.1 Net impairment losses on intangible assets: composition
Assets/Components of income
Amortisation
(a)
Impairment
losses
(b)
Reversals of
impairment
losses (c)
Net result
(a+b-c)
A. Intangible assets
A.1 Ow ned (79,589) (1,528) - (81,117)
- Internally generated by the company (76) - - (76)
- other (79,513) (1,528) - (81,041)
A.2 Acquired through finance lease - - - -
Total (79,589) (1,528) - (81,117)
Details are given in the footnote to Table 13.2 in the balance sheet assets section, which
may be consulted.
SECTION 15 Other net operating income/expense – Item 220
15.1 Other operating expense: composition
2012 2011
Other operating expenses (73,402) (77,219)
Fines and charges for late tax payments (51) (219)
Depreciation of improvements to third party leased assets (7,484) (7,443)
Ordinary maintenance of investment properties - -
Other expenses and prior year expense (65,867) (69,557)
- of which costs relating to finance lease contracts (7,145)
Table 18: 523000O|1 - NOTA1
15.2 Other operating income: composition
2012 2011
Other operating income 317,917 320,284
Charges to third parties for expenses on deposit and current accounts 14,158 15,458
Recovery of insurance premiums 28,140 31,644
Other income for property management 1,508 1,633
Recovery of taxes 156,473 163,065
Rent income 5,986 6,525
Other income, expense recoveries and prior year income 111,652 101,959
- of which recoveries on lease contracts 12,814 14,181
Table 19: 523000O|1 - NOTA2
From 1 st October 2012, “Recoveries of other expenses” include “Fast credit processing fees”,
which came to €21,622 thousand.
351

SECTION 16 Profits (losses) of equity investments – Item 240
16.1 Profits (losses) of equity investments: composition
Income components/sectors 31.12.2012 31.12.2011
1) Jointly controlled entities
A. Income - 301
1. Revaluations - -
2. Profits on sale - 301
3. Reversals of impairment losses - -
4. Other income - -
B. Expense - -
1. Write-downs - -
2. Impairment losses - -
3. Losses on sale - -
4. Other expense - -
Net result - 301
2) Companies subject to significant influence
A. Income 55,472 14,143
1. Revaluations - -
2. Profits on sale 8,273 -
3. Reversals of impairment losses - -
4. Other income 47,199 14,143
B. Expense (2,822) (4,196)
1. Write-downs - -
2. Impairment losses due to deterioration - -
3. Losses on sale - -
4. Other expense (2,822) (4,196)
Net result 52,650 9,947
Total 52,650 10,248
Table 20: 525000O|1 - NOTA
The amount in line item A.2 of section 2 “Profits on sale” relates to the gain on the total
disposal of Arca S.G.R. S.p.A. carried out in September 2012.
The amounts in lines A.4 “Other income” and B.4 “Other expense” of section 2 represent the
profits and losses respectively of equity-accounted investees. More specifically, item B.4
includes €2,773 thousand of losses of equity accounted companies and €49 thousand for
the expense due for the liquidation of the company Sider Factor S.p.a.
Details are given in the note at the foot of Table 10.3 “Equity investments: annual changes”
in the balance sheet section.
352

SECTION 17 Net result of changes in the fair value of property, plant
and equipment and intangible assets – Item 250
17.1 Net result of changes in the fair value (or at revalued amount) of property,
plant and equipment and intangible assets
No “Net result of changes in the fair value of property, plant and equipment and intangible
assets” was recognised.
SECTION 18 Net impairment losses on goodwill – item 260
18.1 Net impairment losses on goodwill: composition
No net impairment losses on goodwill have been recognised. The impairment test performed
as at 31 st December 2011 resulted in recognition of impairment losses of €1,873,849
thousand.
SECTION 19 Profits (losses) on disposal of investments – Item 270
19.1 Profits (losses) on disposal of investments: composition
Income components/sectors 31.12.2012 31.12.2011
A. Properties 711 6,793
- Profits on sale 711 6,915
- Losses on sale - (122)
B. Other assets 5,779 25
- Profit on sale 5,907 120
- losses on sale (128) (95)
Net result 6,490 6,818
Profits on the sale of “Other assets” includes the gain on the total disposal of the interest
held in UBI Insurance Broker Srl, performed in December 2012, of approximately €5.8
million.
353

SECTION 20 Taxes on profit for the year from continuing operations –
Item 290
20.1 Taxes on profit from continuing operations for the year: composition
Income components/sectors 2012 2011
1. Current taxes (-) (290,521) (702,119)
2. Change in current taxes of prior years (+/-) 75,061 3,119
3. Reduction in current taxes for the year (+) - -
3.a Reduction in current taxes for the year for tax credits pursuant to Law 214/2011 (+) 274,912 -
4. Change in deferred tax assets (+/-) (101,765) 927,399
5. Change in deferred tax liabilities (+/-) (37,116) 43,592
6. Taxes for the year (-) (-1+/-2+3+/-4+/-5) (79,429) 271,991
The reduction in current taxes, by €274,912 thousand, is shown to highlight the
transformation of deferred tax assets resulting from the losses incurred by the Parent, UBI
Leasing S.p.A and UBI Private S.p.A. in 2011 into tax credits, as requested by the
“addendum” letter of 7 th August 2012 issued by the Bank of Italy. This reduction was fully
offset by movements in tax assets (with the balancing entry in the income statement)
because the transformation of deferred tax assets into tax credits had no impact on the
income statement, in compliance with the instructions in the addendum letter cited and in
Document No. 5 of 15 th May 2012, issued as a result of co-ordination between the Bank of
Italy, Consob (Italian securities market authority) and Isvap (Italian insurance authority).
354

20.2 Reconciliation between theoretical taxation and actual taxation recorded in
the accounts
IRES (CORPORATE INCOM E TAX)
Taxable
income
IRES %
Theoretical IRES payable 333,362 (91,675) 27.50%
Permanent increases
- Non deductible interest expense 89,872 (24,715) 7.41%
- Taxes on dividends of UBI subsidiaries - (15,201) 4.56%
- Other minor impacts 26,785 (7,366) 2.21%
Permanent decreases
- Valuation of equity-accounted investees (44,426) 12,217 -3.66%
- deduction of IRAP (local production tax) relating to staff costs (49,440) 13,596 -4.08%
- Allow ance for Corporate Equity (31,470) 8,654 -2.60%
- 10% IRAP deduction (9,562) 2,630 -0.79%
Effective IRES payable 315,121 (101,860) 30.56%
IRAP (LOCAL PRODUCTION TAX)
taxable
income
IRAP %
Theoretical IRAP payable 333,362 (18,568) 5.57%
Permanent increases
- Staff costs + administrative expenses not deductible for IRAP purposes 1,035,801 (57,694) 17.31%
- Net impairment losses on loans not deductible for IRAP purposes 847,214 (47,190) 14.16%
- Non deductible interest expense 108,329 (6,034) 1.81%
- Provisions for risks and charges not deductible for IRAP purposes 49,212 (2,741) 0.82%
- Impairment of tangible and intangible assets not deductible for IRAP purposes 18,892 (1,052) 0.32%
Permanent decreases
- Impairment losses on loans in prior years for disposal (90,023) 5,014 -1.50%
- Tax amortisation of UBI Banca goodw ill (56,906) 3,170 -0.95%
- Valuation of equity-accounted investees (44,426) 2,475 -0.74%
- Dividends (7,796) 434 -0.13%
Effective IRAP payable 2,193,659 (122,186) 36.65%
Total effective IRES and IRAP tax expense
333,362 (224,046) 67.21%
355

SECTION 21 Profit (loss) after tax from discontinued operations – Item
310
21.1 Profit (loss) after tax from discontinued operations: composition
Income components/sectors 2012 2011
Asset/liability group
1. Income - -
2. Expense - -
3. Results of change in fair value of assets and associated liabilities - -
4. Profit (loss) on sale - 256
5. Taxes and duties - (8)
Profit - 248
Table 21: 532000O|1 - NOTA
21.2 Details of taxes on income in relation to discontinued operations
2012 2011
1. Current taxation (-) - (8)
2. Change in deferred tax assets (+/-) - -
3. Change in deferred tax liabilities (-/+) - -
4. Taxes on income for the year (-1+/-2+/-3) - (8)
able 22: 530010O|1 - NOTA
SECTION 22 Profit (loss) for the year attributable to non-controlling
interests – Item 330
22.1 Details of the item 330 “Profit for the year attributable to non-controlling
interests”
Profit attributable to non-controlling interests, inclusive of the effects of consolidation
entries, totalled €20,771 thousand and was composed as follows:
2012 2011
UBI Pramerica 13,453 -
Banca Popolare Commercio e Industria Spa 5,780 5,354
Banca Carime Spa - 3,165
Banca Popolare di Ancona Spa - 2,117
Other companies 1,538 899
Total 20,771 11,535
356

22.2 Details of the item 330 “Loss for the year attributable to non-controlling
interests”
Losses attributable to non-controlling interests, inclusive of the effects of consolidation
entries, totalled €11,813 thousand and were composed as follows:
2012 2011
Banca Regionale Europea S.p.A. (9,760) (24,442)
UBI Leasing Spa (868) (826)
Banca di Valle Camonica Spa (232) (4,202)
UBI Pramerica S.G.R. S.p.A. - (2,365)
Other companies (953) (303)
Total (11,813) (32,138)
SECTION 23 Other information
No situations exist which require further information.
SECTION 24 Earnings per share
Introduction
With the adoption of international accounting standards, all listed companies, or companies
for which listing is in progress, which are required to prepare separate company and/or
consolidated financial statements in compliance with IFRS (Legislative Decree No. 38/2005),
must report the calculation of their earnings per share (EPS) in their financial statements in
accordance with IAS 33.
More specifically the standard requires both basic earnings per share and diluted earnings
per share to be reported:
(i) basic EPS is calculated by dividing the profit attributable to the ordinary equity
holders of the Parent (numerator) by the weighted average number of ordinary
outstanding shares (denominator) during the year;
(ii) diluted EPS is calculated by taking into account the dilutive effect of potential
ordinary shares, i.e. financial instruments and/or contracts which assign rights
to the holders to acquire ordinary shares.
Earnings per share for the year ended 31 st December 2012
Calculation of basic EPS
On the basis of what has been stated above, the numerator for calculating basic EPS
amounts to €82,708 thousand.
With regard to the denominator of this indicator, the weighted average number of
outstanding ordinary shares as at 31 st December 2012 was 900,546,881.
In this respect:
(i) as at 1 st January 2012 the outstanding ordinary shares of UBI Banca numbered
900,546,759;
(ii) on 4 th July 2012, 246 shares were issued for the conversion of a convertible
bond issue;
(iii)
(iv)
as at 31 st December 2010 UBI Banca held 1,200,000 treasury shares in portfolio;
as a result of the above changes, the ordinary shares outstanding of UBI Banca
numbered 900,547,005 as at 31 st December 2011.
357

Calculation of diluted EPS
For the purposes of calculating diluted EPS, as already stated, account must be taken of the
dilutive effect on the ordinary shares of the Parent resulting from the presence of “potential”
ordinary shares that are outstanding, such as for example:
(i) instruments representing debt or equity, including preference shares, that are
convertible into ordinary shares;
(ii) options and warrants;
(iii) shares to be issued if the conditions defined in contractual agreements are met.
As already reported in the balance sheet section 15 “Equity attributable to the Parent”,
potential ordinary shares of UBI Banca existed as at 31 st December 2012 for the possible
conversion of a convertible bond issue (a maximum of 255,657,498 new ordinary shares).
The right to convert the convertible bonds into ordinary shares of UBI Banca was exercised
in 2012 for at total of 246 new shares.
To summarise:
EPS 2012 2011
Consolidated profit attributable to the Parent (thousands of euro) 84,342 (1,831,333)
Weighted average number of ordinary shares outstanding 900,546,881 774,891,234
Basic earnings per share (in euro) 0.0937 (2.3633)
Diluted earnings per share (in euro) 0.0937 (2.3633)
The table that follows contains: (i) a reconciliation of consolidated profit attributable to the
Parent and profit attributable to ordinary equity holders and also (ii) the dilutive effect on
the average number of outstanding ordinary shares.
EPS 2012 2011
EPS with recognised profits
Consolidated net profit attributable to the Parent (thousands of euro) 82,708 (1,841,488)
Profit not attributable to owners of ordinary equity instruments (thousands of euro) (1,634) (10,155)
Consolidated profit attributable to the Parent (thousands of euro) 84,342 (1,831,333)
Number of shares existing at the beginning of the year 900,546,759 639,145,902
Number of shares issued during the year 246 262,600,857
Weighted average shares issued during the year - 135,745,332
Weighted average number of ordinary shares outstanding 900,546,881 774,891,234
Weighted dilutive effect resulting from the exercise of potential ordinary shares - -
Weighted average number of ordinary shares for diluted capital 900,546,881 774,891,234
Basic earnings per share (in euro) 0.0937 (2.3633)
Diluted earnings per share (in euro) 0.0937 (2.3633)
358

PART D – Consolidated statement of comprehensive
income
Items
31.12.2012
Gross amount Tax on income Net amount
10. Profit (loss) for the year X X 91,666
Other comprehensive income
20. Available-for-sale financial assets: 962,104 (253,340) 708,764
a) changes in fair value 935,327 (246,734) 688,593
b) transfer to income statement 26,128 (6,477) 19,651
- impairment losses 2,443 (707) 1,736
- profits (losses) on sale 23,685 (5,770) 17,915
c) other changes 649 (129) 520
30. Property, plant and equipment -
40. Intangible assets -
50. Foreign investment hedges - - -
a) changes in fair value -
b) transfer to income statement -
c) other changes -
60. Cash flow hedges: (2,766) 917 (1,849)
a) changes in fair value (2,766) 917 (1,849)
b) transfer to income statement -
c) other changes -
70. Currency translation differences: - - -
a) changes in fair value -
b) transfer to income statement -
c) other changes -
80. Non current assets held for sale: - - -
a) changes in fair value -
b) transfer to income statement -
c) other changes -
90. Actuarial gains (losses) on defined benefit plans: (46,496) 12,554 (33,942)
100.
Portion of fair value reserves attributable to equity-accounted
investees:
119,248 (29,079) 90,169
a) changes in fair value 154,060 (37,533) 116,527
b) transfer to income statement 17,644 (4,322) 13,322
- impairment losses 180 (56) 124
- profits (losses) on sale 17,464 (4,266) 13,198
c) other changes (52,456) 12,776 (39,680)
110. Total other comprehensive income items 1,032,090 (268,948) 763,142
120. Comprehensive income (items 10+110) 854,808
130. Consolidated comprehensive income attributable to non-controlling
140.
interests
Consolidated comprehensive income attributable to the shareholders
of the Parent
14,983
839,825
359

Part E - Information on risks and the relative
hedging policies
Section 1 - Banking Group Risks
In compliance with current regulations, the UBI Group has adopted a risk control system which
disciplines and integrates the organisational, regulatory and methodological guidelines of the system
of internal controls with which all Group member companies must comply in order to allow the
Parent to perform its activities of strategic, management and operational control in an effective and
economical manner.
Group member companies co-operate pro-actively in identifying risks to which they are subject and
in defining the relative criteria for measuring, managing and monitoring them.
The key principles on which Group risk analysis and management are based for the pursuit of an
increasingly more knowledgeable and efficient allocation of economic and supervisory capital are as
follows:
- rigorous containment of financial and credit risks and strong management of all types of risk;
- the use of a sustainable value creation approach to the definition of risk appetite and the
allocation of capital;
- definition of the Group’s risk appetite with reference to specific types of risk and/or specific
activities in a set of policy regulations for the Group and for the single entities within it.
The appetite for risk helps to define the strategic positioning of the Group and it is defined in
compliance with its mission and its strategy and its business and value creation objectives.
The definition of the UBI Group’s appetite for risk includes quantitative and qualitative factors:
• from a quantitative viewpoint, the risk appetite is given by the amount of capital that the
Bank is willing to put at risk and it helps to define the strategic positioning of the Group;
• from a qualitative viewpoint, risk appetite relates to the Group’s desire to strengthen its
management and monitoring systems and the efficiency and effectiveness of its system of
internal controls.
With Provision No. 423940 of 16 th May 2012, the Bank of Italy authorised the UBI Banca Group to
use advanced internal rating based (AIRB) systems to calculate capital requirements to meet credit
risk – “exposures to businesses” (“corporate”) segment – and operational risks, from the supervisory
report as at 30 th June 2012. With specific reference to credit risk, the authorisation allows the use of
internal estimates for probability of default (PD) and loss given default (LGD) parameters for the
corporate portfolio.
Therefore for all the other portfolios, the standardised approach is used, to be applied in accordance
with the roll-out plan delivered to the Supervisory Authority.
As at the reporting date, the scope of application, in terms of companies, for the approaches
authorised is as follows:
• AIRB: Banca Popolare di Bergamo, Banco di Brescia, Banca Popolare Commercio e Industria,
Banca Popolare di Ancona, Banca Regionale Europea, Banca Carime, Banco San Giorgio, Banca
Valle Camonica (the “Network Banks”), UBI Banca Private Investment and Centrobanca;
• the remaining legal entities in the Group will continue to use the standardised approach.
The output of the models consists of nine rating classes that correspond to the relative PDs which are
360

mapped on the Master Scale to 14 classes (comparable with the ratings of the main external rating
agencies) exclusively for reporting purposes.
With regard to the second pillar, the ICAAP report as at 31 st December 2012 is to be filed with the
supervisory body in April 2013 and it will include first pillar risks, second pillar risks specified by
regulations and risks identified independently by the Group. The structure of the report gives details
of the following: strategic lines of development and the forecast horizon considered by the Group
business plan; a description of corporate governance, organisational structures and systems of
control related to ICAAP; exposure to risks, methods of measuring and aggregating them and stress
tests; the components, estimates and methods of allocating internal capital; the relationship between
internal capital, supervisory requirements and supervisory capital; and finally the self assessment of
ICAAP, which identifies areas for further growth in the methodological model as well as process areas
where improvement is possible.
When the ICAAP report is filed, a report will be made available to the public at the same time on the
UBI Banca website (www.ubibanca.it), in the investor relations sector, in compliance with the third
pillar requirements. The regulations introduce obligations to publish information on capital
adequacy, exposure to risks and the general characteristics of the systems designed to identify,
measure and manage them.
The information to be provided favours greater transparency in the ways in which banks manage
risk. The Bank of Italy has made special tables available in this respect in which the quantitative and
qualitative information which banks must publish is classified, thereby making the data comparable.
This part – sections 1 to 4 1 - provides information on the risk profiles listed below, on the relative
management and hedging policies pursued by the Group and its activities relating to financial
derivative instruments:
a) credit risk;
b) market risks:
− interest rates,
− price,
− currency;
c) liquidity risk;
d) operational risks.
Sections 5 and 6 also provide information on the risks pertaining to the insurance companies and
other companies in the consolidation.
A report on the general framework of the risks and uncertainties to which the UBI Group is exposed
is given in a special section of the Management Report, prepared in compliance with Legislative
Decree No. 32 of 2 nd February 2007, which implements EC Directive No. 2003/51/EC.
1 Sections 1 to 4 provide information for the banking group only, except in cases where explicit reference is made to all the
companies in the consolidation.
361

1. CREDIT RISK
Qualitative information
1.1 General aspects
The strategies, policies and instruments for the assumption and management of credit risk are
defined at the Parent by the Risk Officer in co-operation with the Chief Lending Officer, with the
support and co-ordination of the relative specialist units.
There is a particular focus in the formulation of policies to manage credit risk on maintaining an
appropriate risk-yield profile and on assuming risks that are consistent with the risk appetite defined
by senior management and, more generally, with the mission of the UBI Group.
The priorities in the orientation of the Group's credit management policies are to support local
economies, families, businessmen, professionals and small to medium-sized enterprises.
The particular attention paid to maintaining relationships established with customers and to
developing them over the years is one of the strong points of the Group and it helps to eliminate
information asymmetries and offers continuity in customer relationships with a view to long term
support.
Even in the continuing and difficult current economic situation, the Bank is ensuring that the
economy has adequate access to credit by participating, amongst other things, in “Agreements”
stipulated between the Italian Banking Association, the Ministry of Finance and trade associations,
while preserving the quality of its assets and by employing an extremely selective approach to “noncore”
exposures.
With regard to “business” customers in particular, lending rules have been formulated and are being
followed for the disbursement and management of loans, which in operational terms translate into
action which ranges from the development to the containment of exposures. These rules are based on
a number of drivers as follows:
• internal counterparty rating (average weighted rating for Groups of companies), linked to the
degree of protection provided by any accessory guarantees there may be;
• degree of engagement of the UBI Group with the counterparty or Group of companies;
• the economic sector to which the counterparty or Group of companies belongs with a view to:
− the level of sector risk;
− the overall level of concentration of the UBI Group in the individual economic sector (with
verification also of the concentration at individual bank or company level).
Finally, particular attention is paid to the definition of guidelines for the treatment of new products,
with adequate reporting to senior management concerning observance of risk-yield objectives, the
calculation of minimum interest rates for granting loans, the quality of borrowers, guarantees
received and expected rates of recovery in cases of insolvency.
362

1.2 Policies for the management of credit risk
1.2.1 Organisational aspects
In the performance of its traditional banking business, the Group is exposed to the risk that the
loans it grants will not be repaid by borrowers when they are due and that partial or full impairment
losses must be recognised on them. More specifically the risk profile for lending is sensitive to the
performance of the economy as a whole, to the deterioration in the financial position of
counterparties (shortage of liquidity, insolvency, etc.), or to changes in their competitiveness, to
structural or technological changes in corporate debtors and to other external factors (e.g. changes in
legislation, deterioration in the value of financial guarantees and mortgages connected with market
performance). A further risk factor to which the Group pays particular attention is the degree of
diversification in the lending portfolio among different borrowers and among the different sectors in
which they operate.
The organisational model on which the units which manage lending activity is based is as follows:
• Parent units for centralised monitoring and co-ordination;
• the General Managements of banks and Group companies, to which the following report:
- Credit Departments;
- Local Credit Centres,
- Branches;
- Corporate Banking Units (CBUs);
- Private Banking Units (PBUs).
Reorganisation was launched in the network banks in January 2013, in order to combine personal
services with a specialist approach to corporate customers. This led to the creation of units entitled
“Private Banking & Corporate Unity” specifically for the management of both corporate and private
banking customers. Furthermore, in view of the merger of B@nca 24/7, specific units have been
created in the Credit Area at the Parent to manage loans from that company’s operations.
As a whole the characteristics of the organisational model ensure strong standardisation between the
units of the Parent and the corresponding units in the network banks, with consequent linearity in
the processes and the optimisation of information flows. Loan granting activity is also differentiated,
at local level, by customer segment (retail/private banking/corporate and institutional) and
specialised by the status of the loan: “performing” (managed by retail, private banking and corporate
lending units) and “default” (managed by problem loan units).
Furthermore, with regard to banks, the introduction of decentralised Local Credit Units to support
retail branches and corporate banking and private banking units, ensures effective co-ordination and
liaison between units operating on their respective markets. The Parent oversees policy management,
overall portfolio monitoring, the refinement of assessment systems, problem loan management and
compliance with regulations through the units that report to the Chief Lending Officer and the Risk
Control and the Strategic Development and Planning units and the Audit Function of the Parent and
the Group.
For all those entities (individual companies or groups) with authorised credit from banks and
companies in the Group (including risk activities involving issuer and related risks), which totals
more than €50 million, the Parent must set an operational limit which is the maximum credit that
may be authorised for the counterparty at UBI Group level. The Management Board of the Parent is
363

esponsible for granting, changing and renewing operational limits on the proposal of the UBI Credit
Area after first consulting the UBI Credit Committee.
The banks and companies of the Group must also request a prior, consultative, non-binding opinion
from the Parent for combinations of a) amounts of authorised credit and b) determined internal rating
classes. It is the Parent’s duty to assess whether it is consistent with the credit policies of the Group,
according to the criteria and parameters laid down in the credit authorisation regulations of the
Group. A prior opinion is not required for credit authorisations for single counterparties or groups of
companies which fall within the operational limits that have been set.
In consideration of the specific federal organisation of the UBI Group, the Parent decided to adopt a
“focused” model for the management of corporate customers common to more than one network bank
on the basis of which, briefly:
- decisions relating to credit risk management, pricing and the formulation of commercial policies for
customers common to two or more banks are centred on a lead bank, termed the pivot bank, thereby
avoiding the generation of a decrease in the overall profitability on the counterparty;
- non pivot banks abstain from opening new accounts and/or from granting new credit facilities.
A Pivot Bank may be defined as the bank which has the best chances, with its own business units, of
arranging new business and/or intensifying existing business with the customer in common, in order
to draw the greatest possible benefit for the whole banking Group. It therefore directs the other banks
involved with regard to the most appropriate conduct to follow to improve business with the customer
as a whole.
The various organisational units in banks and product companies are responsible for credit and
commercial activities and they also hold responsibility for monitoring both the activity they perform
directly and that performed by those units which report to them. More specifically, responsibility for
managing and monitoring performing loans lies in the first instance with the account managers who
handle daily relationships with customers and who have an immediate perception of any
deterioration in credit quality. Nevertheless, all employees of Group member companies are required
to promptly report all information that might allow difficulties to be identified at an early stage or
which might recommend different ways of managing accounts, by concretely participating in the
monitoring process.
In the second instance, the organisational unit responsible for monitoring credit risk is the Credit
Quality Management and Monitoring Unit, which carries out monitoring, supervision and analysis of
performing positions on both a case by case and a collective basis, where the intensity and degree of
detail of the analysis is a function of the risk class attributed to the counterparties and the
seriousness of the performance problems. This unit, not involved in loan approval procedures, either
on its own initiative or on submission of a proposal, may assess a position and decide (or propose to
a superior decision-making unit when the decision does not lie within its powers), to change the
classification of performing counterparties to a more serious status. In these cases it asks, through
its Credit Department, the Credit Area of UBI Banca to issue a prior non-binding opinion in those
cases where Credit Authorisation Regulations require it. The Portfolio Policies and Quality Service in
the unit that reports to the Chief Lending Officer is responsible for co-ordinating and defining
guidelines for monitoring the lending portfolio, overseeing the development of monitoring tools,
monitoring credit policies and preparing management reports.
Furthermore an “arrears management” system is operational, designed to preserve and protect
customer relationships through the prompt resolution of lending irregularities (late
repayments/unauthorised overdrafts) detected on performing private individual and “small economic
operator” customers by providing centralised support contact with customers to normalise problem
loan positions.
364

Management of the “non-performing” positions of the network banks and of Centrobanca (the latter
from January 2012) is entrusted to the Problem Loan and Credit Recovery Area of UBI Banca, within
the unit reporting to the Chief Lending Officer.
This unit underwent substantial organisational change (completed in December), as part of the
implementation of the new model for the management of non-performing loans, designed to improve
credit recovery processes, by means of the following:
– the introduction of segmentation approaches and division into portfolios of non-performing
positions, on the basis of the size and complexity of the loan;
– the specialisation of recovery processes and the units responsible for it, consistent with the
segments and portfolios identified;
– monitoring of processes for the management of positions;
– the assignment of recovery objectives to managers and assessment of results;
– the introduction of strategies designed to optimise recovery on specific portfolios, such as for
example, recourse to property operators to value the properties which back mortgage loans.
As part of that initiative, three specialist services on specific segments have been created within the
above mentioned areas:
– Small Sum Recovery Service, to manage non-performing unsecured loans to private
individuals for amounts of less than €25,000;
– Large Loan Recovery Service, specialising in the management of non-performing loans to both
private individuals and businesses for amounts of over €1 million, or with a net book value of
over €500,000. Particularly complex types of position are also managed by this service (e.g.
pool financing, etc.);
– Private Individual and Corporate Recovery Service, for the management of other types of loan
which are not included within the scope of the two services just mentioned. This unit is
organised into six specialist functions according to geographical criteria.
The Risk Management Area in the unit that reports to the Chief Risk Officer, performs the following
through its Credit Risk function:
– it defines criteria and methodologies for the development of internal rating models –
probability of default (PD), loss given default (LGD) and exposure at default (EAD) – in line
with regulatory requirements and best practices;
– it works with the Group Rating Unit on the definition of corporate methods for assigning
counterparty ratings;
– it produces periodic analyses which illustrate the risk profile of the total lending portfolio and
the commercial sub-portfolios at Group level and at the level of individual legal entities, in
terms of distribution by rating class, LGD and expected loss, loan impairment rates and
concentration in the largest customers;
– it develops methods, in co-operation with the unit that reports to the Chief Financial Officer,
for calculating collective provisions to be recognised in the financial statements on the basis of
internal credit ratings for the network banks and Centrobanca and loan impairment rates for
the other banks and product companies;
– it calculates loan impairment rates for the Group and defines the relative calculation methods
for individual legal entities;
– it provides input parameters (PD and LGD) for product pricing activities.
Furthermore, the Credit Risk Function plays a key role within the Basel 2 project:
– it formulates guidelines on credit risk matters generally and also with regard to periodic
reporting to the Supervisory Authority;
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– it draws up roll-out plans for models implemented at the Parent;
– it monitors the extent to which regulatory provisions are covered by internal rating models;
– it co-ordinates activities for the development and maintenance of internal rating processes
and systems;
– it formulates policies for the assumption and management of credit risk.
More specifically, the Function formulates the operational details of policies by preparing regulations
to implement them and also detailed documents, both for the Parent and for single banks and
companies, which illustrate aspects relating to the definition, use, monitoring and reporting of risk in
relation to compliance with the guidelines and the indicators that are set.
These documents are implemented by the Group banks and companies, which must have a
knowledge of the risk profile and the risk management policies defined by the senior management of
the Parent and which must contribute, each within the scope of their responsibilities, to the
implementation, consistent with the reality of their companies, of the risk management strategies and
policies decided by the senior management of the Parent.
Finally, the Function also provides specialist support for the operational implementation of the
policies and regulations for them, concerning the assumption and management of credit risk and it
periodically monitors their consistency with Group operations, and proposes corrective action if
necessary.
Finally, the unit that reports to Chief Risk Officer then defines in detail, and undertakes, active credit
portfolio management action designed to optimise the creation of value on the loan portfolio and also
takes initiatives to mitigate, monitor and transfer credit risk (e.g. securitisations), assessing the
impact on economic capital and on supervisory capital requirements. As concerns the production and
distribution of products which involve the assumption of credit risk by Group member companies, it
participates, together with the Commercial Macro Area, in the definition of the relative convention
agreements.
1.2.2 Management, measurement and control systems
The Credit Risk Function is responsible for Group reporting on credit risk in order to monitor
changes in the risk attached to lending for individual banks and commercial portfolios. The reports
are submitted quarterly to the Boards of Directors of the individual network banks. For the network
banks and Centrobanca the reports describe distributions by internal rating classes, LGD and
expected loss and for the network banks they also give changes in average risk for the corporate
market, the small business portfolio in the retail market and for the affluent and mass market
portfolios again in the retail market. Reporting for the product companies is based on the specific risk
for the various types of lending and products marketed. Special reports on specific matters are also
prepared on the main components of credit risk.
The set of models which constitute the internal rating system of the Group is managed by the Risk
Management Area with support from the Credit Area.
The system at present involves the use of automatic models for medium to large-size businesses,
private individuals and small-sized businesses.
The rating and LGD models for medium to large-sized companies were submitted for validation by the
Supervisory Authority in the first half of 2012. Estimates for a new generation of rating and LGD
models for the “retail exposures” regulatory portfolio are in progress for private individuals and small-
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sized businesses as part of the Basel 2 project. These are accompanied by the necessary interaction
with the Supervisory Authority, designed to obtain authorisation in 2013 for the adoption of these
models for the calculation of regulatory capital using the advanced internal rating based approach.
The validation perimeter for these models comprises the network banks, UBI Banca and
Centrobanca.
The main features of this new generation of rating models are as follows:
• the development of new quantitative models for monitoring and granting loans, which assess
the creditworthiness of small-sized businesses which integrate the following assessments:
geo-sectoral; economic-financial; external and internal performance;
• the development of a new quantitative model for monitoring, which assesses the
creditworthiness of private individuals supplementing it with personal data and external and
internal performance assessments;
• the development of a new quantitative model for the grant of mortgages to private individuals,
which assesses counterparty risk, supplementing it with personal data and product
assessments.
As concerns retail LGD, new models for the network banks were estimated, based on updated
historical data series references and on re-estimated or updated estimate components.
Credit processes within the network banks work with information channelled from the rating system
as described in detail below.
The operational units involved in the loan disbursement and renewal process use internal credit
ratings, which constitute necessary and essential evaluation factors for credit authorisations when
these are assessed and revised. Powers to authorise loans are based on the risk profiles of the
customers or the transactions as given by the credit rating and by the expected loss, while they are
managed using Pratica Elettronica di Fido (electronic credit authorisation) software. The credit ratings
are used, amongst other things, to monitor loans both by the management reporting system and in
the information made available to units in banks involved in the lending process.
The assignment to rating classes that are different from those calculated by the internal rating
system on the basis of the models adopted is made by proposing an override on the rating for which
the methods of presentation, examination and validation are different for cases of:
• higher rating override;
• lower rating override.
These changes are made on the basis of information not already considered by the rating model, not
adequately weighted by the model or where it is intended to anticipate the future influence of the
information.
In addition to the process for the disbursement, renewal and monitoring of credit and to the
departmental reporting process just described, the processes directly affected by internal ratings or in
which internal estimates of PD and LGD are described below.
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The calculation of collective impairment losses on performing loans
The calculation methodologies used for the calculation of collective impairment losses on performing
loans in the network banks and in Centrobanca are different from those used by the main product
companies of the Group.
More specifically a method is employed for loans (and guarantees) to customers in network banks
and in Centrobanca based on internal estimates of PD (probability of default) associated with internal
ratings and estimates of LGD (loss given default). The latter uses operational corrective factors with
respect to the parameters used for regulatory purposes. It should be noted that the percentages of
impairment resulting from the application of the PD and LGD are also used for “irrevocable
commitments of uncertain use” to which the supervisory credit conversion coefficient is also applied.
The approach currently used for those product companies most subject to credit risk and for UBI
Banca (in relation to former B@nca 24/7 business acquired operationally from July 2012 due to its
merger into the Parent) is that based on impairment rates for loans calculated internally which uses a
broader definition of default that includes changes of classification from performing to impaired and
non-performing classes (UBI Banca – former B@nca 24/7 and UBI Leasing) and internal estimates of
LGD.
As concerns LGD, different internal estimates are used at UBI Leasing for different types of product
and marketing, while expert values are applied for UBI Banca – former B@nca 24/7, estimated on the
bank’s own data where significant and in other cases values are borrowed from similar products sold
by the network banks. Special “danger rates” need to be applied to render the definitions of default
used for impairment rates and estimates of LGD consistent. For both UBI Leasing and UBI Banca –
former B@nca 24/7, these are estimated on internal data and differentiated by product. Further
refinements and updates of parameters were performed within this methodological framework in
2012. For UBI Leasing they involved an update of the historical data series and for Prestitalia a
specific development of the management of the salary backed loans portfolio.
The calculation of risk adjusted pricing levels
Risk adjusted pricing is the break-even price which ensures remuneration of lending risk such as
expected loss and unexpected loss, or in other words the cost of the capital absorbed in accordance
with prudential supervisory regulations (Basel 2.5). Consistent with value creation approaches, risk
adjusted pricing will generate a level of profit adjusted for risk, which will ensure the creation of
value.
Creation of value, capital allocation and incentive schemes
As part of its capital management processes, the UBI Group applies methodologies to assess risk
adjusted performance that are designed to measure and summarise the effects of economic, asset,
risk (recognition of impairment) and capital (risk weighted assets and expected loss net of impairment
losses recognised) variables that impact the creation of wealth for shareholders. The creation of value
is fully incorporated in incentive schemes as a determining factor in triggering incentives.
Stress tests
Stress tests for credit risk are performed in relation to the ICAAP Report, as support in the
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preparation of business plans or budgets and in response to specific requests by the Bank of Italy or
other supervisory authorities. More specifically, stress tests are performed on those exposure classes
that can present greater variability in the ratio between risk weighted assets (RWA) and the
corresponding amount of the exposure.
The scenarios analysed involve an increase in the average ratio between the amount of the exposure
and RWAs of differing dimensions, estimating the impact on capital ratios. Stresses are created by
acting on PD (probability of default) and LGD (loss given default) parameters, hypothesising scenarios
of differing levels of seriousness for both risk parameters and estimating the impacts in terms of
capital ratios.
Activity also continued in 2012 to revise, update and adopt policies and regulations for credit risk
management.
Existing policies are listed below together with the principal contents.
Credit risk management policy
Policies exist within the UBI Group to manage Group credit risk, the relative regulations to
implement it and documents to set limits both for the Group and for single banks and companies.
This regulation allows a common approach to be followed for the assumption of risk and procedures
to manage it across the entire Group and it standardises risk indicators, while taking account of the
specifics of each class of risk.
The policy gives details of limits and it defines the procedures for assuming risk for the following
types of risk:
- credit risk (including counterparty risk): the risk of incurring losses resulting from the default of a
counterparty with whom a position of credit exposure exists. Credit risk can be divided into the
following two types:
- credit risk relating to business with ordinary customers, with a specific focus on credit risk for
Centrobanca structured finance operations;
- credit risk relating to business with institutional customers and with ordinary customers
resident in high risk countries;
- concentration risk: risk resulting from the existence of large exposures to single counterparties (or
groups) or resulting from exposures to groups of counterparties which operated in the same
economic sector or which are located in the same geographical area. Concentration risk is divided
into two types:
− single name concentration risk;
− sector concentration risk.
Ordinary customers
Standards, principles and limits to manage credit risk are set for ordinary customers both at
consolidated level and for individual legal entities, on the basis of the availability of risk drivers
generated by the internal rating model (rating class, probability of default and loss given default). The
definition of the limits is based on a series of indicators expressed in terms of: capital allocation,
values for maximum risk (i.e. target and maximum expected loss and cost of credit), limits on the
assumption of risks in terms of the distribution of exposures by credit rating class and the
management of credit quality.
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The Credit Risk Function prepares quarterly reports on compliance with the indicators set for all the
Areas concerned and for the governing bodies of the Parent and the individual banks and companies
in the Group.
Structured Finance
A specific focus was placed on structured finance business performed by Centrobanca.
The term structured finance operations refers to non-standard finance operations, formulated on the
basis of the specific requirements of customers, usually performed for industrial or infrastructure
investments, or to acquire listed and unlisted companies. It may be promoted by institutional
investors.
Specific limits are set for this business which combine the achievement of budget targets in terms of
volumes disbursed and profitability with appropriate management in terms of distribution by rating
and transaction classes, concentration for single exposures and maximum duration.
The Centrobanca Credit Monitoring Service introduced a target process for monitoring limits, with the
relative monthly reporting.
Institutional counterparty and country risk
For institutional and ordinary customers resident in high risk countries, the risk management policy,
the relative regulations to implement it and the documents containing the limits set standards,
principles and limits designed to ensure proper management of the entire process of the assumption,
management and monitoring of credit risk in this area.
Limits are set for maximum exposure to credit risk as follows:
− maximum exposure limits: maximum limits on total authorised credit for the different risk
classes of the exposures (combinations of counterparty ratings and country ratings) at Group
and individual company level;
− single name concentration limits: maximum limits on total authorised credit for each borrower
for the different risk classes (combinations of counterparty ratings and country of residence
ratings) defined at Group level;
− country concentration limits: maximum limits on total authorised credit for each country defined
at Group and individual company level.
Concentration risk
Geo-sectoral concentration risk is dealt with as part of second pillar risks. The policy sets a specific
capital requirement to take account of the higher sensitivity of a more concentrated portfolio.
Single name concentration risk is addressed by setting maximum exposure limits on single
counterparties in order to limit risks of instability that would arise from high rates of concentration
for loans to major borrowers if one of these should default. The limits set are based on counterparty
ratings and the type of transaction.
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Risk-adjusted pricing
The risk adjusted price setting process involves a detailed process of defining and using prices to
ensure that:
− the prices approved become the reference used by the Credit Committee of the Parent and the
loan approval units of the individual banks and they must be given in all loan approval
proposals;
– appropriate operational and IT procedures are defined to implement the pricing framework.
The contents of the policy have been set out in regulations and in a document which gives details of
the limits approved by the Management Board.
Policy for the distribution of mortgages through brokers
This policy regulates the procedures for the use of external distribution networks for granting
mortgages to non-captive customers in order to mitigate potential credit, operational and reputational
risks.
The policy defines the following:
− minimum capitalisation limits for the brokerage companies and a prohibition on direct
agreements with mortgage brokers and real estate agents;
− minimum contents for agreements between distribution networks and banks or companies in the
UBI Group including, for example, the specification of a minimum list of risk indicators to be
monitored for which there must be a provision in the agreement that requires the network to
remain within certain limits. Once those limits are exceeded penalties are applied (if maximum
risk limits are exceeded) or bonuses are paid (if particularly low levels of risk are achieved) to the
distribution network;
− an obligation by banks entering into agreements to put a process in place to monitor changes in
the risk indicators just mentioned, with support from the Parent.
Policy on the portability, renegotiation, substitution and early repayment of the mortgages of direct
customers of the network banks
The policy on the portability, renegotiation, substitution and early repayment of mortgages of the UBI
Group furnishes guidelines for portability (in both directions), the renegotiation (including the
rescheduling of instalments as regulated by the agreement between the Ministry of the Economy and
Finance and the Italian Banking Association), the substitution and early repayment (partial or total)
of mortgages. It is designed (by setting minimum standards of service amongst other things) to
minimise processing times, conditions and related costs and also to equip the Group with appropriate
processes and instruments to manage the relative risks (credit, operational and reputation).
The policy also defines objectives for the maximum time limits for responding to customers for which
a specific monitoring process has been launched.
Policy on the portability, renegotiation, substitution and early repayment of mortgages granted through
brokers
As was defined for the mortgages of direct customers of the network banks, the policy on the
portability, renegotiation, substitution and early repayment of brokered mortgages sets, for this
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specific type of business, maximum time limits for responding to customers for which the necessary
monitoring process must be put in place.
Policy on risks resulting from securitisations
The “Policy on risks resulting from securitisations” sets guidelines for the Group to manage risks
relating to securitisations defined as “the risk that the underlying economic substance of a
securitisation is not fully reflected in decisions made to measure and manage risk”. This risk relates
to both conventional and synthetic securitisations originated by the Group which involve the transfer,
at least partial, of the risk attaching to the securitised assets.
The process of implementing a securitisation must involve stating the objective of the transaction and
the role played by the UBI Banca Group in it and verification that it is fully compliant with the
requirements contained in Bank of Italy Circular 263 “New regulations for the prudent supervision of
banks” of 27 th December 2006.
The UBI Group will make sole use of agencies recognised by the Bank of Italy (ECAI – External Credit
Assessment Institution) when assigning ratings to bonds and/or the tranches issued.
Policy on residual risk
The “Policy on residual risk” formulates strategic orientations relating to the management of “residual
risk”, defined as the risk of incurring losses resulting from the unforeseen ineffectiveness of
established methods of mitigating credit risk used by the UBI Group.
The policy contains a definition of the process of control over the acquisition and use of techniques to
reduce credit risk in order to mitigate that risk.
That process is centred on the definition of appropriate risk management processes designed firstly to
ensure the verification of compliance with supervisory regulations, distinguishing between:
• “general requirements”, such as “legal certainty”, the “speed of implementation” and
“organisational requirements”;
• “specific requirements”, with particular attention to revaluation and monitoring of collateral
and guarantees and verification of the absence of substantial correlation between the ability of
the debtor to repay and the collateral.
Policy on internal controls to manage risk assets and conflicts of interest with regard to connected
parties.
The “Policy on internal controls to manage risk assets and conflicts of interest with regard to
connected parties”, which implements Bank of Italy recommendations on “risk weighted assets and
conflicts of interest with regard to connected parties”. Connected counterparty risk arises from the
fact that “the closeness of persons to the decision-making centres of a bank might compromise the
objectivity and impartiality of decisions concerning the grant of loans to, and other transactions with,
those persons, which may result in possible distortions in the resource allocation process, the
exposure of the bank to inadequately measured or monitored risks, and potential harm to depositors
and shareholders”
The policy defines guidelines and criteria for the adoption by the Group as a whole and by individual
Group banks and companies of appropriate organisational structures, internal control systems and
specific internal policies to manage that risk within two areas defined by the regulations: prudential
limits and approval procedures;
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Finally, in order to take account of potential risks of conflicts of interest caused by counterparties
that do not, strictly speaking, fall under the definition of connected parties but whose work could in
any case have a significant impact on the bank’s risk appetite (e.g. “significant personnel”), the UBI
Group has adopted – in line with provisions on connected counterparties – appropriate processes to
manage transactions in which such parties could have a direct or indirect interest, personally or
otherwise.
Policy to manage equity risk
The “Policy to manage equity risk”, for which procedures were concluded in January 2013, completes
the adoption of policies to manage the various risks to which the UBI Group is exposed in terms of its
operating and organisations characteristics and it incorporates provisions recently issued by the
Bank of Italy on the subject of “Equity investments that may be held”.
Equity risk is defined as the risk of losses incurred in equity investments that are not fully
consolidated on a line-by-line basis.
With the adoption of this policy the Group has put appropriate controls in place designed to:
- contain the risk of locking up too much liquidity as a result of making equity investments in
financial and non-financial companies;
- with specific reference to non-financial companies, promote risk and conflicting interest
management that complies with the criterion of sound and prudent management.
Finally, a specific focus was placed on private equity business which consists of acquiring stakes in a
target company either by purchasing existing shares from third parties or by subscribing new share
issues to bring new capital to the target company. More specifically the mission and relative
strategies are specified, distinguishing between the acquisition of direct interests and the
subscription of units in private equity funds formed by entities within the Group or outside it.
1.2.3 Techniques for mitigating credit risk
The Group employs standard risk mitigation techniques used in the banking sector by acquiring
collateral such as properties and financial instruments as well as personal guarantees from
counterparties for some types of loan. Determination of the total amount of credit that can be granted
to a given customer and/or group of companies to which the customer belongs takes account of
special criteria for assigning weightings to the different categories of risk and to guarantees. Prudent
"haircuts" are applied to the estimated value of collateral depending on the type of security.
The main types of security accepted by the Group are as follows:
- real estate mortgage
- pledge.
In the case of mortgage collateral, a distinction is made between specially regulated “land” mortgage
loans and ordinary mortgage loans with regard to the amount of the loan, which in the former case
must comply with limits set in relation to the value or the cost of the assets used as collateral.
Pledges represent the second general class of collateral used and different possible types of pledge
exist within the Group depending on the instrument which is used as the collateral. They are as
follows:
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- pledges on dematerialised financial instruments such as for example government securities,
bonds and shares in listed companies, customer portfolio managements, bonds of the Group,
etc.;
- pledges of material securities, e.g. valuables and/or sums deposited on current accounts or
bearer or named savings accounts, certificates of deposit, units in mutual funds, shares and
bonds issued by unlisted companies;
- pledges on insurance policies;
- pledges of quotas held in limited liability companies, which by law must be formed by a
notarial deed and are subject to registration.
A pledge on the value of financial instruments is performed using defined measurement criteria and
special “haircuts” which reflect the variability in the value of the security pledged. In the case of
financial instruments denominated in foreign currency, the “haircut” applied for the volatility of the
exchange rate must be added to that for the volatility of the security.
As concerns pledges on rights arising from insurance policies, these may only be constituted on life
insurance policies for which the regulations expressly allow the possibility of a pledge in favour of the
Bank and only if determined conditions are met (e.g. once the time limit for exercising redemption
rights has expired, policies which pay only in “case of death” must be excluded, and so forth). Special
measurement criteria and “haircuts” are also defined for insurance policies.
In order to ensure that general and specific requirements are met for recognition of collateral, as part
of its credit risk mitigation techniques (CRM) (in accordance with Bank of Italy Circular No. 263 of
27/12/2006 and subsequent updates), for prudent purposes the UBI Group has performed the
following:
- redefined credit processes relating to the acquisition and management of collateral. With
particular regard to mortgages, in network banks it is compulsory to enter all data on a
property needed to render collateral eligible in account manager software systems. Particular
attention was paid to the compulsory nature of expert appraisals and to the prompt recovery
of the relative information, including notarial information (details of registrations), essential
for guarantees to be accepted;
- acquired, for existing mortgages, all the information required to ensure that they are
admissible, in line with the provisions of Basel 2 in terms of specific requirements.
1.2.4 Deteriorated financial assets
The classification of the problem loan portfolio complies with official regulations and can be
summarised as follows:
• exposures past due and/or continuously in arrears;
• restructured positions;
• impaired loans;
• non-performing loans.
In addition to those classes, there remains a type of problem loan in respect of “country risk” for
unsecured exposures to institutional and ordinary customers belonging to countries considered as
“at risk” as defined by the supervisory authority. With regard to “impaired” loans, in order to optimise
management and solely for operational purposes, these are divided into positions for which it is
considered that the temporary situation of objective difficulty can be overcome in a very short period
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of time (nine months) and the remaining positions, for which it is felt best to disengage from the
account with credit recovery out of court over a longer period of time. Additionally, loans past due
and/or continuously in arrears are subject to controls to decide, within a maximum operational
period of 120 days, whether to reclassify them as either “performing” or into another non-performing
loan class.
The management of problem loans is performed on the basis of the level of risk. It is performed by the
organisational units responsible for the management of problem loans of individual banks and
product companies. For non-performing loan positions of the network banks (limited to those
positions for which the management centralisation process has been completed) and Centrobanca
(from January 2012 for the latter), management is by the Credit and Credit Recovery Area of the
Parent. As already mentioned in the preceding pages, this unit underwent substantial organisational
change designed to make credit recovery processes more effective through the specialisation of both
credit recovery processes and units.
Assessment of the appropriateness of impairment losses recognised is performed on a case by case
basis for individual positions to ensure adequate levels of cover for expected losses.
The analysis of deteriorated exposures is performed continuously by the single operational units
which manage risks and by the Parent.
The resolution of difficulties by counterparties is a determining factor for the return of positions to
“performing” status. This event occurs principally and above all for accounts which are past due
and/or continuously in arrears and for impaired accounts.
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Quantitative information
A. Credit quality
A.1 Deteriorated and performing credit exposures: amounts, impairment losses,
changes, economic and geographical distribution
A.1.1 Distribution of financial assets by portfolio and according to credit quality
P o rtfo lio s /qua lity
No n-
pe rfo rming
lo a ns
Impa ire d
lo a ns
Ba nking g ro up
Re s truc ture
d e xpo s ure s
P a s t-due
e xpo s ure s
Othe r c o mpa nie s
Othe r a s s e ts De te rio ra te d Othe r a s s e ts
1. Fina ncial assets held for trading 1,346 10,317 2,005 312 3,989,687 4 ,0 0 3 ,6 6 7
2. Ava ilable-for-sale financial assets 2,069 13,611,745 13 ,6 13 ,8 14
3. He ld-to-ma turity investments 3,158,013 3 ,15 8 ,0 13
4. Loa ns a nd advances to banks - 5,912,081 160,265 6 ,0 7 2 ,3 4 6
5. Loa ns a nd advances to customers 2,951,130 3,602,339 659,101 891,561 84,771,614 1,043 11,181 9 2 ,8 8 7 ,9 6 9
6. Financ ial a ssets de signa te d a t fa ir va lue -
7. Financ ial a ssets he ld for disposal -
8. He dging deriva tives 1,478,322 1,4 7 8 ,3 2 2
3 1.12 .2 0 12 2 ,9 5 2 ,4 7 6 3 ,6 12 ,6 5 6 6 6 3 ,17 5 8 9 1,8 7 3 112 ,9 2 1,4 6 2 1,0 4 3 17 1,4 4 6 12 1,2 14 ,13 1
3 1.12 .2 0 11 2 ,4 8 1,8 0 5 2 ,5 4 1,15 0 8 4 2 ,12 5 4 2 5 ,9 6 6 110 ,9 6 2 ,6 16 9 6 8 3 3 ,13 3 117 ,2 8 7 ,7 6 3
To ta l
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A.1.2 Distribution of credit exposures by portfolio and by credit quality (gross and net
amounts)
P o rtfo lio s /qua lity
G ro s s e xpo s ure
De te rio ra te d a s s e ts
S pe c ific
impa irme nt lo s s e s
Ne t e xpo s ure
G ro s s e xpo s ure
Othe r a s s e ts
P o rtfo lio
impa irme nt lo s s e s
Ne t e xpo s ure
To ta l
(ne t e xpo s ure )
A. Ba nking g ro up
1. Financ ial assets he ld for trading 16,206 (2,226) 13,980 3,989,687 3,989,687 4 ,0 0 3 ,6 6 7
2. Available-for-sa le financ ial assets 2,069 - 2,069 13,611,745 13,611,745 13 ,6 13 ,8 14
3. Held-to-ma turity investments - - - 3,158,013 3,158,013 3 ,15 8 ,0 13
4. Loans a nd advances to ba nks - - - 5,912,298 (217) 5,912,081 5 ,9 12 ,0 8 1
5. Loans a nd advances to customers 11,276,176 (3,172,045) 8,104,131 85,241,956 (470,342) 84,771,614 9 2 ,8 7 5 ,7 4 5
6. Financia l a ssets designated at fair value - - - - - -
7. Financia l a ssets held for disposal - - - - - -
8. Hedging derivative s - - - 1,478,322 1,478,322 1,4 7 8 ,3 2 2
To ta l A 11,2 9 4 ,4 5 1 (3 ,17 4 ,2 7 1) 8 ,12 0 ,18 0 113 ,3 9 2 ,0 2 1 (4 7 0 ,5 5 9 ) 112 ,9 2 1,4 6 2 12 1,0 4 1,6 4 2
B. Othe r c o ns o lida te d unde rta king s
1. Financ ial assets he ld for trading -
2. Available-for-sa le financ ial assets -
3. Held-to-ma turity investments -
4. Loans a nd advances to ba nks - - - 160,265 - 160,265 16 0 ,2 6 5
5. Loans a nd advances to customers 1,173 (130) 1,043 11,200 (19) 11,181 12 ,2 2 4
6. Financia l a ssets designated at fair value -
7. Financia l a ssets held for disposal -
8. Hedging derivative s -
To ta l B 1,17 3 (13 0 ) 1,0 4 3 17 1,4 6 5 (19 ) 17 1,4 4 6 17 2 ,4 8 9
3 1.12 .2 0 12 11,2 9 5 ,6 2 4 (3 ,17 4 ,4 0 1) 8 ,12 1,2 2 3 113 ,5 6 3 ,4 8 6 (4 7 0 ,5 7 8 ) 113 ,0 9 2 ,9 0 8 12 1,2 14 ,13 1
3 1.12 .2 0 11 8 ,8 9 7 ,5 2 8 (2 ,6 0 5 ,5 14 ) 6 ,2 9 2 ,0 14 111,5 3 7 ,5 6 2 (5 4 1,8 13 ) 110 ,9 9 5 ,7 4 9 117 ,2 8 7 ,7 6 3
A.1.2.1 Distribution of renegotiated and non-renegotiated performing credit exposures by
portfolio (total for the "Banking Group" and "Other consolidated undertakings ")
Portfolios/time past due
Exposures subject to renegotiation as part of collective agreements
Past due for Past due over Past due over Past due
up to 3 months 3 months 6 months over 1
Not past due
Past due
for up to 3
Past due
over 3
Other exposures
Past due Past due
over 6 over 1 year
Not past due
Total
(net
exposure)
1. Financial assets held for trading - - - - - - - - - 3,989,687 3,989,687
2. Available-for-sale financial assets - - - - - - - - - 13,611,745 13,611,745
3. Held-to-maturity investments - - - - - - - - - 3,158,013 3,158,013
4. Loans and advances to banks - - - - - 13,006 - - - 6,059,340 6,072,346
5. Loans and advances to customers 202,344 813 190 - 1,279,992 4,995,080 98,016 47,234 1,356 78,157,770 84,782,795
6. Financial assets designated at fair value - - - - - - - - - - -
7. Financial assets held for disposal - - - - - - - - - - -
8. Hedging derivatives - - - - - - - - - 1,478,322 1,478,322
Total (T) 202,344 813 190 - 1,279,992 5,008,086 98,016 47,234 1,356 106,454,877 113,092,908
Total (T-1) 15,256 4,416 4,168,498 - 126,439 45,269 1,203 106,634,668 110,995,749
377

A.1.3 Banking Group - On- and off-balance sheet credit exposures to banks: gross and net
amounts
Type o f e xpo s ure /a mo unts
G ro s s e xpo s ure
S pe c ific
impa irme nt lo s s e s
P o rtfo lio
impa irme nt lo s s e s
Ne t e xpo s ure
A. O n-ba la nc e s he e t e xpo s ure
a) non-performing loans X -
b) Impaired loans X -
c) Restructured exposures X -
d) Past due exposures X -
e) Other assets 7,518,194 X (217) 7,517,977
To ta l A 7 ,5 18 ,19 4 - (2 17 ) 7 ,5 17 ,9 7 7
B. O ff-ba la nc e s he e t e xpo s ure s
a) Deteriorated - X -
b) Other 2,389,526 X (397) 2,389,129
To ta l B 2 ,3 8 9 ,5 2 6 - (3 9 7 ) 2 ,3 8 9 ,12 9
To ta l A+B 9 ,9 0 7 ,7 2 0 - (6 14 ) 9 ,9 0 7 ,10 6
A.1.4 Banking Group - On-balance sheet credit exposures to banks: changes in gross
deteriorated exposures
De s c riptio n/c a te g o rie s
No n-pe rfo rming
lo a ns
Impa ire d lo a ns
Re s truc ture d
e xpo s ure s
P a s t-due
e xpo s ure s
A. Initia l g ro s s e xpo s ure 17 9 - - -
- of which: exposures transferred not derecognised - - - -
B. Inc re a s e s - - - -
B.1 transfers from performing exposures - - - -
B.2 transfers from other categories of deteriorated exposures - - - -
B.3 other increases - - - -
C. De c re a s e s (17 9 ) - - -
C.1 transfers to performing exposures - - - -
C.2 write-offs - - - -
C.3 payments received (179) - - -
C.4 from disposals - - - -
C.5 transfers to other categories of impaired exposures - - - -
C.6 other decreases - - - -
D. Fina l g ro s s e xpo s ure - - - -
- of which: exposures transferred not derecognised - - - -
378

A.1.5 Banking Group - On-balance sheet credit exposures to banks: changes in total net
impairment losses
De s c riptio n/c a te g o rie s
No n-pe rfo rming
lo a ns
Impa ire d lo a ns
Re s truc ture d
e xpo s ure s
P a s t-due
e xpo s ure s
A. To ta l initia l ne t impa irme nt (112 ) - - -
- of which: exposures transferred not derecognised - - - -
B. Inc re a s e s (6 8 ) - - -
B.1 impairment losses (68) - - -
B.1.a losses on disposal - - - -
B.2 transfers from other categories of deteriorated exposures - - - -
B.3 other increases - - - -
C. De c re a s e s 18 0 - - -
C.1 unrealised reversals of impairment losses 2 - - -
C.2 realised reversals of impairment losses - - - -
C.2.a profits on the disposal - - - -
C.3 write-offs - - - -
C.4 transfers to other categories of impaired exposures - - - -
C.5 other decreases 178 - - -
D. To ta l c lo s ing ne t impa irme nt - - - -
- of which: exposures transferred not derecognised - - - -
A.1.6 Banking Group - On- and off-balance sheet credit exposures to customers: gross and net
amounts
Type o f e xpo s ure /a mo unts
G ro s s e xpo s ure
S pe c ific
impa irme nt lo s s e s
P o rtfo lio
impa irme nt lo s s e s
Ne t e xpo s ure
A. O n-ba la nc e s he e t e xpo s ure
a) non-performing loans 5,461,243 (2,509,245) X 2,951,998
b) Impaired loans 4,123,304 (520,966) X 3,602,338
c) Restructured exposures 776,003 (114,833) X 661,170
d) Past due exposures 918,563 (27,002) X 891,561
e) Other assets 103,820,790 X (470,338) 103,350,452
To ta l A 115 ,0 9 9 ,9 0 3 (3 ,17 2 ,0 4 6 ) (4 7 0 ,3 3 8 ) 111,4 5 7 ,5 19
B. O ff-ba la nc e s he e t e xpo s ure s
a) Deteriorated 243,656 (19,660) X 223,996
b) Other 15,133,932 X (31,329) 15,102,603
To ta l B 15 ,3 7 7 ,5 8 8 (19 ,6 6 0 ) (3 1,3 2 9 ) 15 ,3 2 6 ,5 9 9
To ta l A+B 13 0 ,4 7 7 ,4 9 1 (3 ,19 1,7 0 6 ) (5 0 1,6 6 7 ) 12 6 ,7 8 4 ,118
379

A.1.7 Banking Group - On-balance sheet credit exposures to customers: changes in gross
deteriorated exposures
De s c riptio n/c a te g o rie s
No n-pe rfo rming
lo a ns
Impa ire d lo a ns
Re s truc ture d
e xpo s ure s
P a s t-due
e xpo s ure s
A. Init ia l g ro s s e xpo s ure 4 ,6 6 8 ,8 9 8 2 ,8 4 6 ,0 8 1 9 3 3 ,7 7 6 4 3 4 ,15 8
- of which: exposures transferred not derecognised - - - -
B. Inc re a s e s 1,5 7 5 ,9 7 1 3 ,3 9 4 ,6 9 4 2 8 5 ,2 5 5 2 ,12 2 ,18 4
B.1 transfers from performing exposures 312,097 1,963,532 18,520 2,078,775
B.2 transfers from other categories of deteriorated exposures 1,087,165 1,069,520 192,597 7,337
B.3 other increases 176,709 361,642 74,138 36,072
C. De c re a s e s (7 8 3 ,6 2 6 ) (2 ,117 ,4 7 1) (4 4 3 ,0 2 8 ) (1,6 3 7 ,7 7 9 )
C.1 transfers to performing exposures (44,546) (471,787) (54,211) (375,959)
C.2 write-offs (288,055) (6,780) (2,423) (3,079)
C.3 payments received (282,036) (390,704) (102,330) (138,608)
C.4 from disposals (106,172) - (4,215) -
C.5 transfers to other categories of impaired exposures (16,432) (1,056,854) (278,076) (1,005,257)
C.6 other decreases (46,385) (191,346) (1,773) (114,876)
D. Fina l g ro s s e xpo s ure 5 ,4 6 1,2 4 3 4 ,12 3 ,3 0 4 7 7 6 ,0 0 3 9 18 ,5 6 3
- of which: exposures transferred not derecognised - - - -
A.1.8 Banking Group - On-balance sheet credit exposures to customers: changes in total net
impairment losses
De s c riptio n/c a te g o rie s
No n-pe rfo rming
lo a ns
Impa ire d lo a ns
Re s truc ture d
e xpo s ure s
P a s t-due
e xpo s ure s
A. To t a l initia l ne t impa irme nt (2 ,18 8 ,0 6 5 ) (3 11,6 5 2 ) (9 3 ,0 9 5 ) (10 ,15 2 )
- of which: exposures transferred not derecognised
B. Inc re a s e s (9 10 ,6 8 9 ) (4 14 ,5 4 1) (6 4 ,8 3 8 ) (2 9 ,2 5 9 )
B.1 impairment losses (748,015) (343,652) (31,544) (18,889)
B.1.a losses on disposal (510) - (3,139) -
B.2 transfers from other categories of deteriorated exposures (122,535) (13,602) (23,675) (1,067)
B.3 other increases (39,629) (57,287) (6,480) (9,303)
C. De c re a s e s 5 8 9 ,5 0 9 2 0 5 ,2 2 7 4 3 ,10 0 12 ,4 0 9
C.1 unrealised reversals of impairment losses 82,343 15,696 2,719 1,911
C.2 realised reversals of impairment losses 84,417 40,781 10,474 2,764
C.2.a profits on the disposal - - - -
C.3 write-offs 288,055 6,780 2,423 3,079
C.4 transfers to other categories of impaired exposures 17,766 114,172 24,345 4,596
C.5 other decreases 116,928 27,798 3,139 59
D. To t a l c lo s ing ne t impa irme nt (2 ,5 0 9 ,2 4 5 ) (5 2 0 ,9 6 6 ) (114 ,8 3 3 ) (2 7 ,0 0 2 )
- of which: exposures transferred not derecognised - - - -
380

A.2 Classification of exposures on the basis of external and internal ratings
A.2.1 Banking Group - Distribution of on- and off-balance sheet exposures by class of external rating
Exposures External rating classes Unrated Total
Class 1 Class 2 Class 3 Class 4 Class 5 Class 6
A. On-balance sheet exposure 1,017,544 2,291,219 13,065,800 1,109,478 293,183 424,623 100,774,557 118,976,404
B. Derivatives 67,208 33,300 215,732 - - - (62,335) 253,905
B.1 Financial derivatives 67,208 33,300 215,732 - - - (60,050) 256,190
B.2 Credit derivatives - - - - - - (2,285) (2,285)
C. Guarantees granted 2,724 119,614 118,241 - - - 7,762,052 8,002,631
D. Commitments to grant funds - 42,617 280,285 36,438 1,042 1,928 3,240,153 3,602,463
E. Other - - - - - - - -
Total 1,087,476 2,486,750 13,680,058 1,145,916 294,225 426,551 111,714,427 130,835,403
A.2.2 Banking Group - Distribution of on- and off-balance sheet exposures by class of internal rating
Exposures Internal rating classes
unrated TOTAL
Rating 1 Rating 2 Rating 3 Rating 4 Rating 5 Rating 6 Rating 7 Rating 8 Rating 9 Rating 10 Rating 11 Rating 12 Rating 13 Rating 14
A. On-balance sheet exposure 552,112 1,818,982 3,883,851 4,331,927 18,280,246 1,639,479 8,069,221 12,730,443 3,159,706 6,753,509 3,168,308 1,699,869 1,053,487 483,195 34,390,562 102,014,897
B. Derivatives 1,177 6,607 40,149 23,533 35,834 10,117 103,768 76,786 9,101 69,125 8,747 2,894 663 2,057 2,508,341 2,898,899
B.1 Financial derivatives 1,177 6,607 40,149 23,533 35,834 10,117 103,768 76,786 9,101 69,125 8,747 2,894 663 2,057 2,506,056 2,896,614
B.2 Credit derivatives 2,285 2,285
C. Guarantees granted 96,705 574,051 84,102 1,253,926 1,895,264 60,501 602,601 684,895 87,398 159,221 39,544 20,500 5,920 7,162 29,449,883 35,021,673
D. Commitments to grant funds 32,579 74,078 73,846 204,591 519,771 136,628 246,601 299,438 71,783 150,040 24,927 8,421 2,742 13,559 1,607,621 3,466,625
E. Other - - - - - - - - - - - - - - - -
Total 682,573 2,473,718 4,081,948 5,813,977 20,731,115 1,846,725 9,022,191 13,791,562 3,327,988 7,131,895 3,241,526 1,731,684 1,062,812 505,973 67,956,407 143,402,094
The classes on the “Master Scale” consist of probability of default (PD) intervals within which PDs corresponding to the single class of
the different internal rating models are mapped. The rating classes are presented in decreasing order of creditworthiness: the best
creditworthiness in rating class 1; the worst creditworthiness in rating class 14.
The distribution shows the aggregates of exposures (i.e. net of intercompany eliminations) to the ordinary customers to which internal
credit ratings have been assigned by UBI Banca, the network banks of the Group (Banca Popolare di Ancona Spa, Banca Carime Spa,
Banca Popolare di Bergamo Spa, Banca Popolare Commercio e Industria Spa, Banca di Valle Camonica Spa, UBI Banca Private
Investment Spa, Banca Regionale Europea Spa, Banco di Brescia Spa) and Centrobanca Spa (“specialised lending” exposures are also
given for the latter).
381

A.3 Distribution of guaranteed/secured credit exposures by type of guarantee
A.3.1 Banking Group – Guaranteed/secured credit exposures to banks
Amount of net exposure
Properties
Secured (1)
Securities
Other collateral
CLN
Personal guarantees (2)
Credit derivatives
Unsecured guarantees
Other derivatives
Governments
and central
Other public
authorities
Banks
Other
Governments and
central banks
Other public
authorities
Banks
Other
Total (1)+(2)
1. on-balance sheet secured/guaranteed credit exposures:
1.1. fully guaranteed/secured 3,998,757 49,839 3,996,934 - - - - - - - - 6 24,424 4,071,203
- of which deteriorated - - - - - - - - - - - - - -
1.2. partially guaranteed/secured 917,641 - 912,215 - - - - - - - - - - 912,215
- of which deteriorated - - - - - - - - - - - - - -
2. Off-balance sheet guaranteed/secured credit exposures:
2.1. fully guaranteed/secured 701,002 - - 716,737 - - - - - - - - - 716,737
- of which deteriorated - - - - - - - - - - - - - -
2.2. partially guaranteed/secured 169,445 - - 167,490 - - - - - - - - - 167,490
- of which deteriorated - - - - - - - - - - - - - -
382

A.3.2 Banking Group – Guaranteed/secured credit exposures to customers
Amount of net exposure
Properties
Secured (1)
Securities
Other collateral
CLN
Credit derivatives
Other derivatives
Governments
and central
Other public
authorities
Banks
Other
Personal guarantees (2)
Unsecured guarantees
Governments and
central banks
Other public
authorities
Banks
Other
Total (1)+(2)
1. on-balance sheet secured/guaranteed credit exposures:
1.1 fully guaranteed secured 59,356,094 129,885,887 3,997,199 356,846 - - - - - 397,710 319,585 199,022 57,097,170 192,253,419
- of which deteriorated 4,748,107 11,155,160 124,824 27,365 - - - - - 28,377 46,380 12,368 7,645,668 19,040,142
1.2 partially guaranteed/secured 12,600,424 228,446 738,816 4,561,371 - - - - - 135,406 58,603 128,444 4,389,950 10,241,036
- of which deteriorated 1,648,155 50,250 58,129 352,333 5,740 6,023 2,740 997,991 1,473,206
2. Off-balance sheet guaranteed/secured credit exposures:
2.1 fully guaranteed secured 2,655,599 2,463,718 164,381 59,599 - - - - - 1,655 5,410 13,167 3,037,589 5,745,519
- of which deteriorated 68,197 76,610 3,278 881 - - - - - - 17 448 110,324 191,558
2.2 partially guaranteed/secured 237,272 14,991 29,957 8,045 - - - - - 775 195 35,865 20,725 110,553
- of which deteriorated 4,312 - 189 104 - - 400 1,298 1,991
383

B. Distribution and concentration of credit exposures
B.1 Banking group - Distribution of on- and off-balance sheet exposures to customers by sector (carrying amount)
Governments and Central Banks Other public authorities Financial companies Insurance companies Non financial companies
Other
Exposures/Counterparties
Net exposure
Specific impairment losses
Portfolio impairment losses
Net exposure
Specific impairment losses
Portfolio impairment losses
Net exposure
Specific impairment losses
Portfolio impairment losses
Net exposure
Specific impairment losses
Portfolio impairment losses
Net exposure
Specific impairment losses
Portfolio impairment losses
Net exposure
Specific impairment losses
Portfolio impairment losses
A. On-balance sheet exposure
A.1 Non-performing loans 75 - X 3,927 (1,798) X 13,212 (50,772) X 163 (1,781) X 2,069,830 (1,614,284) X 864,791 (840,610) X
A.2 Impaired loans - - X 274 (19) X 59,708 (30,967) X 24 (6) X 2,351,216 (349,970) X 1,191,116 (140,004) X
A.3 Restructured exposures - - X 7 - X 10,795 (5,529) X - - X 642,758 (107,976) X 7,610 (1,328) X
A.4 Past due exposures 15,312 - X 35,238 - X 8,810 (24) X - - X 560,756 (17,607) X 271,445 (9,371) X
A.5 Other exposures 18,208,738 X (37) 799,934 X (2,710) 3,092,097 X (11,879) 149,632 X (9) 47,689,544 X (301,812) 33,410,507 X (153,891)
TOTAL A 18,224,125 - (37) 839,380 (1,817) (2,710) 3,184,622 (87,292) (11,879) 149,819 (1,787) (9) 53,314,104 (2,089,837) (301,812) 35,745,469 (991,313) (153,891)
B. Off-bal ance sheet
exposures
B.1 Non-performing loans - - X - - X 3,640 - X - - X 11,381 (9,922) X 162 (21) X
B.2 Impaired loans - - X - - X 28,210 (35) X - - X 100,280 (4,794) X 1,926 (72) X
B.3 Other deteriorated assets - - X - - X 422 (3) X - - X 77,374 (4,808) X 601 (5) X
B.4 Other exposures 256,744 X (1) 1,132,041 X (1,269) 1,504,463 X (3,856) 41,198 X (61) 10,973,490 X (14,059) 1,194,667 X (12,083)
TOTAL B 256,744 - (1) 1,132,041 - (1,269) 1,536,735 (38) (3,856) 41,198 - (61) 11,162,525 (19,524) (14,059) 1,197,356 (98) (12,083)
31.12.2012 18,480,869 - (38) 1,971,421 (1,817) (3,979) 4,721,357 (87,330) (15,735) 191,017 (1,787) (70) 64,476,629 (2,109,361) (315,871) 36,942,825 (991,411) (165,974)
31.12.2011 8,569,767 - (90) 2,168,047 (1,232) (5,191) 5,500,713 (96,399) (15,045) 591,489 (1,960) (28) 68,483,238 (1,626,786) (345,974) 38,204,292 (895,859) (219,964)
384

B.2 Banking group – Geographical distribution of on- and off-balance sheet exposures to customers (carrying
amount)
ITALY
OTHER EUROPEAN
COUNTRIES
AMERICA ASIA REST OF THE WORLD
Exposures/Geographical areas
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
A. On-balance sheet exposure
A.1 Non-performing loans 2,935,685 (2,476,867) 14,088 (21,385) 2,033 (5,820) - (4,737) 192 (436)
A.2 Impaired loans 3,555,562 (506,113) 43,372 (14,720) 51 (20) - (1) 3,353 (112)
A.3 Restructured exposures 640,544 (109,678) 20,549 (5,154) 32 (1) - - 45 -
A.4 Past due exposures 875,778 (26,985) 15,780 (16) - - - - 3 (1)
A.5 Other exposures 100,185,083 (457,332) 2,298,327 (9,551) 659,552 (3,426) 6,012 (14) 201,478 (15)
TOTAL 108,192,652 (3,576,975) 2,392,116 (50,826) 661,668 (9,267) 6,012 (4,752) 205,071 (564)
B. Off-balance sheet exposures
B.1 Non-performing loans 15,183 (4,250) - - - - - - - -
B.2 Impaired loans 130,213 (10,588) 203 (6) - - - - - -
B.3 Other deteriorated assets 77,577 (4,808) 820 (8) - - - - - -
B.4 Other exposures 13,695,828 (30,868) 1,208,587 (454) 183,893 (4) 2,484 (2) 11,811 (1)
TOTAL 13,918,801 (50,514) 1,209,610 (468) 183,893 (4) 2,484 (2) 11,811 (1)
31.12.2012 122,111,453 (3,627,489) 3,601,726 (51,294) 845,561 (9,271) 8,496 (4,754) 216,882 (565)
31.12.2011 118,820,414 (3,145,707) 3,730,866 (44,919) 734,236 (12,232) 15,808 (4,541) 216,222 (1,129)
385

B.3 Banking group – Geographical distribution of on- and off-balance sheet exposures to banks (carrying amount)
ITALY
OTHER EUROPEAN
COUNTRIES
AMERICA ASIA REST OF THE WORLD
Exposures/Geographical areas
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
Net exposure
Total
impairment
losses
A. On-balance sheet exposure
A.1 Non-performing loans - - - - - - - - - -
A.2 Impaired loans - - - - - - - - - -
A.3 Restructured exposures - - - - - - - - - -
A.4 Past due exposures - - - - - - - - - -
A.5 Other exposures 2,874,626 (217) 3,666,615 - 891,048 - 28,053 - 57,635 -
TOTAL 2,874,626 (217) 3,666,615 - 891,048 - 28,053 - 57,635 -
B. Off-balance sheet exposures
B.1 Non-performing loans - - - - - - - - - -
B.2 Impaired loans - - - - - - - - - -
B.3 Other deteriorated assets - - - - - - - - - -
B.4 Other exposures 1,081,043 (2) 1,202,339 (228) 36,044 (12) 62,156 (126) 7,547 (29)
TOTAL 1,081,043 (2) 1,202,339 (228) 36,044 (12) 62,156 (126) 7,547 (29)
31.12.2012 3,955,669 (219) 4,868,954 (228) 927,092 (12) 90,209 (126) 65,182 (29)
31.12.2011 4,671,953 (160) 4,372,103 (440) 416,030 (20) 62,040 (213) 216,300 (80)
386

B.4 Large exposures
On the basis of updates to Bank of Italy Circular No. 263 of 27 th December 2006 and subsequent
regulatory clarifications issued by the supervisory authority, the number of large risks presented in
the table was determined by making reference to the non-weighted “exposures”, including those
towards Group counterparties, with a nominal value equal to or greater than 10% of the regulatory
capital, where “exposures” are defined as the sum of on-balance sheet risk assets and off-balance
sheet commitments (excluding those deducted from regulatory capital) towards a customer or a group
of connected customers, without the application of weighting factors.
Due to such exposure criteria, the balance sheet table relative to Large risk positions encompass also
subjects which – although have weighting of 0% -present a non–weighted exposure equal to or greater
than 10% of the equity capital valid for the purposesof Large risks.
31.12.2012
Number of positions 2
Exposure 22,599,040
Risk position 141,175
“Large exposures” consisted of the following:
• €17,975 million to the Ministry of the Treasury (€0 million considering weighting factors)
mainly in relation to investments in government securities by the Parent;
• €4,625 million to the CCG (a central counterparty clearing house) (€141.2 million considering
weighting factors), principally as a result of overall transactions by the Parent.
The percentage of consolidated regulatory capital is well below the limit of 25% set for banking
groups for each of the exposures reported.
387

C. Securitisations and transfer of assets
C.1 Securitisation transactions
Qualitative information
Underlying objectives, strategies and processes of securitisations
Own securitisations
The “own” securitisations of the UBI Group are of the following two types:
i) conventional securitisations of the assets of Group member companies which allow direct
access to capital markets, with the objective of narrowing the liquidity gap between
medium-to-long term lending and short term funding, diversifying the sources of financing
at a competitive cost of funding and reducing risk assets calculated for the purposes of
solvency ratios, without excluding the originator (transferor) from the management of
customer relationships;
ii) conventional securitisations of own assets in order to generate assets eligible as collateral
for refinancing with the European Central Bank (termed self-securitisations). These
transactions, which are structured in exactly the same way as those in the preceding
point i), are performed to strengthen the liquidity position of the Group, in compliance
with internal policies, in order to maintain a high level of counterbalancing capacity.
Law No. 130/99 “Measures on the securitisation of loans” introduced into national legislation
the possibility of performing securitisation transactions using specially formed Italian
registered companies (termed special purpose entities), which allow an entity to acquire
funding by securitising part of the assets which it owns. Generally the assets (usually loans)
recognised in the balance sheet of an entity are transferred to an SPE, which issues securities
sold on the market in order to fund the purchase and pay back the amount received to the
transferor. The redemption and return on the securities issued depend on the cash flows
generated by the loans transferred. In conventional securitisation transactions of its own
assets, designed to generate assets eligible as collateral, UBI fully subscribes two tranches of
the securities issued by the SPE in order to finance the purchase of the loans. The senior
securities assigned a rating are listed and can be used for refinancing operations with the
ECB.
The following companies in the UBI Group have taken advantage of Law No. 130 for
securitisations: UBI Finance 2 Srl, UBI Finance 3 Srl, Lombarda Lease Finance 4 Srl, UBI
Lease Finance 5 Srl, Albenza 3 Società per la Cartolarizzazione Srl – Orio Finance nr 3 Plc, ,
24-7 Finance Srl, UBI SPV BPA 2012 Srl, UBI SPV BPCI 2012 Srl, UBI SPV BBS 2012 Srl.
***
Downgrades performed in the last quarter of 2011 in the wake of the lowering of Italy’s credit
rating by Moody's and Fitch, had the consequence, amongst other things, of making it
necessary to restructure the securitisations originated and held on the books as owned by the
Group (“self securitisations”), in order to ensure continuity to the investments of the special
purpose entities without compromising the eligibility of the senior notes issued.
More specifically, on the one hand the ratings on the financial instruments invested in by the
special purpose entities had to be redefined and on the other hand collateral had to be lodged
on behalf of those entities for the swaps which back those securitisations, where UBI Banca is
a direct counterparty.
The new ratings assigned did not compromise their eligibility for refinancing operations with
the European Central Bank.
The downgrade of UBI Banca’s ratings by Fitch in 2010 made it necessary to take action again
with further restructuring of the three securitisations rated by Fitch (UBI Finance 2, UBI
Finance 3 and UBI Lease Finance 5).
The action described above helped to reduce the link between the discussed securitisations
with the Parent, UBI Banca, making them less vulnerable to possible further downgrades
caused by changes in the Parent’s rating.
388

In 2009 the UBI Group set a specific policy for the management of securitisation risk in
compliance with supervisory regulations (Circular No. 263/06). Sub-section 1 of Section 1,
“Credit Risk”, in these Notes to the financial statements may be consulted for further
information.
Third party securitisation transactions
As an investor the UBI Group holds a residual position in instruments relating to
securitisations (ABS and other structured credit products) with a market value of €0.2 million
as at 31 st December 2012, which was classified within financial assets held for trading.
More specifically direct investment in the instruments in question consisted exclusively of ABS
instruments relating to the subsidiary UBI Banca International, with the underlying mainly of
European origin.
Securitisations: characteristics
The UBI Finance 2 Srl transaction which holds a UBI Banco di Brescia securitisation was
concluded in the first few months of 2009. On 13 th January 2009 the contract for the transfer
of a loan portfolio was signed, which consisted of €2,093,238,616.49 of performing loans to
small-to-medium sized businesses, while the issuance of the relative notes, fully subscribed by
the originator (UBI Banco di Brescia), was performed on 27 th February 2009.
The main characteristics of the UBI Finance 2 securities issued in 2009 are as follows:
• class A notes (senior tranches): nominal amount €1,559,500,000.00 at floating rate, made
available to the Parent, UBI Banca, by means of repurchase agreements, to be used as
collateral in refinancing transactions with the ECB or to guarantee intraday transactions with
the Bank of Italy. Following the action described above, the notes were downgraded by Moody's
from “Aaa” to “A2” and by Fitch from “Aaa” to “A-” (from 15 th January 2013 from “A-” to “A+”);
• class B notes (junior tranches): nominal amount €519,850,000.00 unrated and with a yield
equal to the additional return on the transaction, which allow the originator, Banco di Brescia,
to benefit from the excess spread on the underlying portfolios.
From 20 th July 2011, the progressive amortisation of the class A notes commenced, amounting
to approximately €1,210 million. Therefore as at 31 st December 2012, the senior tranches
amounted to €311,042,587, nominal while the amount of the class B notes, which because of
their subordination received no amortisation payment, remained unchanged. On 20 th January
2013 a further €43 million approximately was repaid on the class A notes.
In the second half of 2011 a new securitisation transaction was performed by transferring
loans to small and medium-sized enterprises, classified as performing and held by the
subsidiary Banca Popolare di Bergamo Spa, to the special purpose entity UBI Finance 3 Srl.
The transaction was performed in two stages:
• the transfer of the loans by the originator Banca Popolare di Bergamo to the special purpose
entity UBI Finance 3 on 6 th December 2010, for an amount of approximately €2.8 billion;
• the issue of notes by UBI Finance 3 (performed in July 2011).
The main characteristics of the UBI Finance 3 notes issued in 2011 are as follows:
• class A notes (senior tranches): original nominal amount €1,863,600,000.00 at floating rate
with maturity in 2050. Following the action described above, the notes were downgraded by
Moody's from “Aaa” to A2 and by Fitch from “Aaa” to “A-”;
• class B notes (junior tranches): nominal amount €897,300,000.00 unrated and with a yield
equal to the additional return on the transaction.
When the mortgages were transferred, servicing and sub-servicing contracts were signed by
which UBI Banca as the Parent performs the role of servicer, while the collection of payments
and the management of relations with customers for the securitised assets were delegated to
389

the originator, Banca Popolare di Bergamo, as the sub-servicer (here too, except for those
positions reclassified as non-performing, which will be handled by the Problem Loan and
Credit Recovery Area of the Parent).
The Lombarda Lease Finance 4 Srl securitisation was performed by means of a number of
interconnected contracts, with the following structure:
• on 11.05.2005 a contract was signed for the periodic transfer without recourse by the UBI
Leasing Spa to Lombarda Lease Finance 4 S.r.l. (LLF4) of loans relating to leasing contracts,
against payment of the nominal value of the loans transferred by the special purpose entity
(LLF4). On 19.10.2005, UBI leasing transferred to LLF4, under the transfer contract signed,
loans relating to leasing contracts for an amount equal to the loans transferred which had
expired;
• the amount of the loans transferred in the first transfer was €1,100,007,686 and the amount
for the first transfer scheduled under the “revolving” programme was €63,637,298;
• collection of the repayments was managed by the “originator” as the “servicer” of the
transaction, on specific mandate of the transferee;
• on 15.06.2005, LLF4 issued notes with different redemption characteristics in order to fund
the transaction;
• subscription of class A1-A2-B “Senior and Mezzanine” notes by institutional investors;
• subscription of class D “Junior” securities by the originator.
The UBI Lease Finance 5 Srl securitisation was performed by means of a number of
interconnected contracts, with the following structure:
on 13.11.2008 a contract was signed for the transfer without recourse by UBI Leasing Spa to
UBI Lease Finance 5 S.r.l. (LF5) of the principal of implicit performing loans recognised in the
accounts as at 31.10.2008 relating to leasing contracts, against payment of the nominal
amount of the loans transferred by the SPE (LF5);
• the amount of the loans transferred was €4,024,051,893.21;
• collection of the repayments was managed by the “originator” as the “servicer” of the
transaction, on specific mandate of the transferee;
• on 28.11.2009 LF5 issued notes with differing redemption characteristics;
• subscription of class A-B “senior and junior” notes by the originator. Following the events
described above, the senior notes were downgraded by Moody's from “Aaa” to “A2” and by
Fitch from “Aaa” to “A-”.
The securitisation Albenza 3 Società per la Cartolarizzazione Srl was performed in 2001 on
performing loans resulting from mortgages granted to private individuals resident in Italy. The
transfer contract was structured as follows:
• the transfer without recourse of the loans to the special purpose entity Albenza 3 Società per
la Cartolarizzazione S.r.l., in which the UBI Banca Group holds no interest, amounting to
€389,532,000;
• funding of the operation by the issue of a single Albenza 3 Società per la Cartolarizzazione
S.r.l. note (unrated);
• the note was purchased by BPB International Finance Plc (liquidated in 2004) and
securitised again with the assistance of the Irish registered SPV Orio Finance nr. 3 Plc.
The Orio Finance nr 3 plc securitisation was performed in 2002 on the securities present in
the BPB International Finance plc portfolio amounting to €390,000,000 and on the Albenza 3
notes already mentioned, together with other MBS securities (Holmes Funding nr 1 Plc;
Holmes Funding nr 2 Plc).
The transfer contract was structured as follows:
• transfer of securities to the special purpose vehicle Orio Finance nr 3 plc, in which the UBI
Banca Group holds no interest;
• funding of the operation by the issue of notes divided into three classes:
- class A notes (senior notes): floating rate notes equal to the Euribor three month + 0.260%
for an amount of €427,200,000;
- class B notes (mezzanine notes): floating rate notes equal to the Euribor three month +
0.70% for an amount of €17,800,000;
- class C notes (junior securities): floating rate notes equal to the Euribor three month +
1.00%, for an amount of €21,600,000;
390

• the different classes were assigned a different degree of subordination in the definition of
payment priorities for both the interest and principal components. The class C notes were
recognised within the trading portfolio of UBI Banca Scpa and were eliminated in the
consolidation against the junior securities recognised within liabilities in the balance sheet of
Orio Finance nr 3 Plc.
The 24-7 Finance Srl securitisation was performed in 2008 on:
• performing loans resulting from mortgages granted to private individuals resident in Italy,
secured by prime grade mortgages on residential properties located in Italy all fully built;
• performing loans resulting from salary backed loans to private individuals resident in Italy,
secured by a “deducted for non payment” clause and by a loss of employment insurance
policy;
• performing loans resulting from personal loans and dedicated loans to private individuals
resident in Italy.
The transfer contract was structured as follows:
• the transfer without recourse of the loans to the special purpose entity 24/7 Finance Srl in
which UBI Banca Spa holds a 10% interest;
• funding of the transaction by the issue of notes divided according to the sub-transaction as
follows:
- mortgages:
class A notes (senior notes): floating rate bond equal to the Euribor three months + 0.02 % for
an original amount of €2,279,250,000. Following the action described previously, the senior
notes were downgraded by Moody's from “Aaa” to “A2”, while the DBRS “A high” rating was
confirmed;
class B notes (junior notes): bonds with a yield equal to the “additional return”, for an
amount of €225,416,196;
- salary backed loans:
class A notes (senior notes): floating rate bonds equal to the Euribor three months for
an original amount of €722,450,000;
class B notes (junior notes): bonds with a yield equal to the “additional return”, for an
amount of €113,728,307;
- consumer loans:
class A notes (senior notes): floating rate bonds equal to the Euribor six month + 0.35%
for an original amount of €2,128,250,000.
class B notes (junior notes): bonds with a yield equal to the “additional return”, for an
amount of €435,940,122.
On 20 th December 2011, the entire salary backed loan securitisation was wound up with the
consequent repurchase of the loans by Banca 24/7 for a total of €298,451,078.94 (equal to
the entire residual debt). Consequently, on receipt of the sales price the special purpose entity
redeemed all the securities issued. Finally, on 21 st May 2012 the consumer loan transaction
was wound up with the repurchase of the loans by the originator for €1,410,363,588.22, with
the subsequent redemption of the notes issued by the special purpose entity.
Therefore only the mortgage securitisation was still in progress as at 31 st December 2012.
The class A note, amortised from February 2010, was worth €1,322,386,049 nominal as at
that date, while the class B note has not been amortised, because of the subordination clause.
On 20 th February 2013 a further €21 million approximately was repaid on the class A notes.
Three new securitisations were launched in the first half of 2012, with the transfer to three
new special purpose entities named UBI SPV BPA 2012 S.r.l., UBI SPV BPCI 2012 S.r.l. and
UBI SPV BBS 2012 S.r.l. of loans to small and medium-sized enterprises classified as
performing, held by Banca Popolare di Ancona, Banca Popolare Commercio and Industria ed
Banco di Brescia respectively.
The transfer of the mortgages was completed for all three transactions, with effect for
accounting purposes from 1 st June 2012. The portfolio transferred consisted of assets totalling
approximately €2.76 billion, was distributed as follows among the three originator banks:
391

Originator
Bank
Remaining
principal debt
Banca Pop. di Ancona €1,016,844,683 36.88%
Banca Pop. Comm. e Industria €852,086,254 30.90%
Banco di Brescia €888,575,097 32.22%
%
€2,757,506,034 100.00%
When the mortgages were transferred, servicing and sub-servicing contracts were signed, by
which UBI Banca as the Parent performs the role of servicer, while the collection of payments
and the management of relations with customers for the securitised assets were delegated to
the three originator banks, as the sub-servicers (here too, except for those positions
reclassified as non-performing, which will be handled by the Credit Area of the Parent).
The main characteristics of the securities issued in 2012 for each securitisation are as follows:
1) Securitisation UBI SPV BPA 2012
• class A notes (senior tranches): nominal amount €709,800,000 at floating rate,
maturity in 2057, assigned ratings A- by Standard & Poor’s and A low by DBRS at
the time of issue;
• class B notes (junior tranches): nominal amount €307,800,000, maturity 2057,
unrated and with a yield equal to the additional return on the transaction.
2) Securitisation UBI SPV BPCI 2012
• class A notes (senior tranches): nominal amount €575,600,000 at floating rate,
maturity in 2057, assigned ratings A- by Standard & Poor’s and A low by DBRS at
the time of issue;
• class B notes (junior tranches): nominal amount €277,100,000, maturity 2057,
unrated and with a yield equal to the additional return on the transaction.
3) Securitisation UBI SPV BBS 2012
• class A notes (senior tranches): nominal amount €644,600,000 at floating rate,
maturity in 2057, assigned ratings A- by Standard & Poor’s and A low by DBRS at
the time of issue;
• class B notes (junior tranches): nominal amount €244,400,000, maturity 2057,
unrated and with a yield equal to the additional return on the transaction.
These securitisations were structured with the objective of creating collateral for the Group
eligible for refinancing with central banks, according to the model described above. As a
consequence on this occasion too, the originator banks fully subscribed the entire amount
of the securitised notes when they were issued and then made only the class A notes
available to UBI Banca, by means of repurchase agreements. Here too, the new ratings
assigned to the above securities are compatible with the eligibility requirements for
refinancing operations with the central bank.
The transactions in question are “revolving” operations and therefore it is possible for
further transfers of mortgages within 18 months of issue by the originators, to be financed
by the three special purpose entities with the receipts of each securitised portfolio.
Securitisations: entities and roles
The entities of the UBI Banca Group involved in the securitisation transactions and the
respective roles played are listed below:
UBI Finance 2
Originator
Issuer
Servicer
Subservicer
UBI Banco di Brescia Spa
UBI Finance 2 Srl
UBI Banca Scpa
UBI Banco di Brescia Spa
392

Calculation Agent
Italian Account Bank
English Account Bank
Cash Manager
UBI Finance 3
Originator
Issuer
Servicer
Subservicer
Calculation Agent
Italian Account Bank
English Account Bank
Cash Manager
Lombarda Lease Finance 4
Originator
Issuer
Servicer
Collection Account Bank
Investment Account Bank
Cash Manager
UBI Lease Finance 5
Originator
Issuer
Servicer
Italian Account Bank
Cash Manager
Paying Agent
English Account Bank
Albenza 3
Originator
Issuer
Servicer
Collection Account Bank
Calculation Agent
Orio Finance 3
Originator
Issuer
Servicer
Collection Account Bank
Cash Manager
24-7 Finance
Originator
Issuer
Servicer
Collection Account Bank
Cash Manager
Calculation Agent
Investment Account Bank
UBI SPV BPA 2012 S.r.l.
Originator
Issuer
Servicer
Subservicer
UBI Banca Scpa
UBI Banca Scpa
The Bank of New York Mellon
The Bank of New York Mellon
UBI Banca Popolare di Bergamo Spa
UBI Finance 3 Srl
UBI Banca Scpa
UBI Banca Popolare di Bergamo Spa
UBI Banca Scpa
UBI Banca Scpa
The Bank of New York Mellon
The Bank of New York Mellon
UBI Leasing Spa
Lombarda Lease Finance 4 Srl
UBI Leasing Spa
UBI Banca International Sa
UBI Banca International Sa
UBI Banca International Sa
UBI Leasing Spa
UBI Lease Finance 5 Srl
UBI Leasing Spa
The Bank of New York Mellon
The Bank of New York Mellon
The Bank of New York Mellon
The Bank of New York Mellon
UBI Banca Popolare di Bergamo Spa
Albenza 3 Società per la Cartolarizzazione Srl
UBI Banca Scpa
UBI Banca Popolare di Bergamo Spa
Centrobanca Spa
UBI Banca (former BPB Inte Fin – Dublin)
Orio Finance nr 3 Plc
Citibank N.A.
Citibank N.A.
Citibank N.A.
B@nca 24-7 Spa now merged into UBI Banca Scpa
24-7 Finance Srl
B@nca 24-7 Spa now merged into UBI Banca Scpa
The Bank of New York
The Bank of New York Mellon
The Bank of New York Mellon
The Bank of New York
UBI Banca Popolare di Ancona Spa
UBI SPV BPA 2012 S.r.l.
UBI Banca Scpa
UBI Banca Popolare di Ancona Spa
393

Cash Manager
English Account Bank
UBI SPV BPCI 2012 S.r.l.
Originator
Issuer
Servicer
Subservicer
Cash Manager
English Account Bank
UBI SPV BBS 2012 S.r.l.
Originator
Issuer
Servicer
Subservicer
Cash Manager
English Account Bank
The Bank of New York Mellon
The Bank of New York Mellon
UBI Banca Popolare Commercio e Ind. Spa
UBI SPV BPCI 2012 S.r.l.
UBI Banca Scpa
UBI Banca Popolare Commercio e Ind. Spa
The Bank of New York Mellon
The Bank of New York Mellon
UBI Banco di Brescia Spa
UBI SPV BBS 2012 S.r.l.
UBI Banca Scpa
UBI Banco di Brescia Spa
The Bank of New York Mellon
The Bank of New York Mellon
Internal risk measurement and monitoring systems connected with securitisation transactions
including measurement, for those transactions originated by the Group, where risks were
transferred to third parties. Illustration of the organisational structure for managing
securitisation transactions including systems for reporting to senior management or to a
similar body.
It was decided to outsource corporate servicing to TMF Management Italy Srl for these
securitisations described above: UBI Finance 2, UBI Finance 3, Lombarda Lease Finance 4,
UBI Lease Finance 5, UBI SPV BPA 2012 S.r.l., UBI SPV BPCI 2012 S.r.l. and UBI SPV BBS
2012 S.r.l. A professional firm of consultants was appointed for the remaining securitisations
with the exception of 24-7 Finance, for which corporate servicing was performed by Zenith
Service.
It was decided not to outsource IT and accounting operations related to servicer activities.
Continuous cash collection activities were performed by the originators making use, amongst
other things, of the main Group accounting system. This was also useful for reconstructing
movements in the accounts of the securitisation companies and therefore for providing them
with the information needed by the corporate servicers for preparing financial statements.
In order to ensure continuity and effectiveness in the performance of their servicer functions,
appropriate technical and organisational units were created to monitor the various phases of
the securitisation process. Accounting and reporting systems in particular were designed,
which took account of the need to be able to reconstruct all transactions at any moment.
The main organisational units responsible for managing the securitisations were the Finance
Area and the units under the Chief Financial Officer and the Chief Risk Officer. The roles and
tasks relating to the performance of the various operational phases of servicing and to
monitoring performance data were defined in those units. More specifically, a set of quarterly
reports are prepared to monitor each individual securitisation transaction.
Description of the hedging policies adopted to mitigate risks connected with securitisations,
including the strategies and processes adopted to continuously monitor the effectiveness of
these policies.
All the securitisations carried out until the end of 2011 are hedged by swap derivative
contracts where the main objective is to stabilise the flow of interest generated by the
securitised portfolio and to protect the special purpose entity from interest rate risk.
Swap contracts were concluded for each securitisation between the respective SPEs and the
respective swap counterparties who, in order to be able to “close” the risk with the originators,
signed contracts identical in form but opposite in their effects with UBI Banca which in turn
renegotiated further mirror swaps with the respective originators. The following constituted
exceptions to that practice: the UBI Lease Finance 5, UBI Finance 2 and UBI Finance 3
transactions, where the special purpose entity entered into swap contracts directly with UBI
394

Banca (which then renegotiated mirror swaps with the originators UBI Leasing, UBI Banco
Brescia and Banca Popolare Bergamo).
The last three securitisations UBI SPV, BBS 2012, UBI SPV BPA 2012 and UBI SPV BPCI 2012
have been structured without the use of swaps. This method of structuring the securitisations
was possible because of the lower ratings assigned at the time of issue - A- by S&P and A low
by DBRS, compared to the AAA ratings required in the past for eligibility with the European
Central Bank – the central bank having lowered the eligibility criteria.
Further information on Group activities concerning securitisation transactions is given in the
Management Report which may be consulted.
395

Quantitative information
C.1.1 Exposures resulting from securitisation transactions by quality of the underlying assets
On-balance sheet exposures Guarantees granted Credit lines
Senior Mezzanine Junior Senior Mezzanine Junior
Senior Mezzanine Junior
Quality of underlying
assets/Exposures
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
Gross exposure
Net exposure
A. W ith ow n underlying assets:
a) Deteriorated - - - - - - - - - - - - - - - - - -
b) Other - - - - - - - - - - - - - - - - - -
B. W ith underlying assets of others:
a) Deteriorated - - - - - - - - - - - - - - - - - -
b) Other 233 233 - - - - - - - - - - - - - - - -
190060O|1 - NOTA
C.1.2 Exposures resulting from the principal “own” securitisation transactions by type of securitised assets and by type of exposure
No exposures resulting from “own” securitisation transactions to report.
396

C.1.3 Exposures resulting from the principal “third party” securitisation transactions by type of securitised assets and by type of exposure
On-balance sheet exposures Guarantees granted Credit lines
Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior
Type of underlying assets/Exposures
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
Carrying amount
Impairment losses/reversals
A.1 Securitisation FTA UCI 6 A - 00/30 - Company UCI
ABS instruments 233 - - - - - - - - - - - - - - - - -
C.1.4 Exposures to securitisations by financial asset portfolio and by type
Exposure/portfolio
Trading
Designated at Available-forsalmaturity
receivables
Held-to-
Loans and
fair value
31.12.2012 31.12.2011
1. On-balance sheet exposures 233 - - - - 233 -
- Senior 233 - - - - 233 -
- Mezzanine - - - - - - -
- Junior - - - - - - -
2. Off-balance sheet exposures - - - - - - -
- Senior - - - - - - -
- Mezzanine - - - - - - -
- Junior - - - - - - -
397

Tabella 5: 190080O|1 - NOTA
C.1.5 Total amount of the securitised assets underlying the junior securities or other forms of lending support
A. Ow n underlying assets:
A.1 Subject to full derecognition
Assets/amounts
Traditional
securitisations
Synthetic
securitisations
1. Non-performing loans - X
2. Impaired loans - X
3. Restructured exposures - X
4. Past due exposures - X
5. Other assets - X
A.2 Subject to partial derecognition
1. Non-performing loans - X
2. Impaired loans - X
3. Restructured exposures - X
4. Past due exposures - X
5. Other assets - X
A.3 Not derecognised
1. Non-performing loans - -
2. Impaired loans - -
3. Restructured exposures - -
4. Past due exposures - -
5. Other assets - -
B. Underlying assets of others: 233
B.1 Non-performing loans - -
B.2 Impaired loans - -
B.3 Restructured exposures - -
B.4 Past due exposures - -
B.5 Other assets 233 -
398

Tabella 6: 190090O|1 - NO
C.1.6 Interests in special purpose entities
Name Registered address % interest
Lombarda Lease Finance 4 Srl Via XX Settembre, 8 - Brescia 10%
UBI Lease Finance 5 Srl Via Foro Bonaparte, 70 - Milan 10%
24-7 Finance Srl Via XX Settembre, 8 - Brescia 10%
UBI Finance Srl Via Foro Bonaparte, 70 - Milan 60%
UBI Finance 2 Srl Via XX Settembre, 8 - Brescia 10%
UBI Finance 3 Srl Via XX Settembre, 8 - Brescia 10%
UBI Finance CB 2 Via Foro Bonaparte, 70 - Milan 60%
UBI SPV BBS 2012 Srl Via Foro Bonaparte, 70 - Milan 10%
UBI SPV BPCI 2012 Srl Via Foro Bonaparte, 70 - Milan 10%
UBI SPV BPA 2012 Srl Via Foro Bonaparte, 70 - Milan 10%
399

C.1.7 Servicer activity – payments received on securitised loans and redemptions of securities issued by the special purpose entity
Servicer
Special purpose entity
Securitised assets (end
of period figure)
Payments received on
loans during year
Percentage of securities redeemed (end of period figure)
Senior Mezzanine Junior
Deteriorate Performing Deteriorate Performin Deteriorat Performin Deteriorat Performin Deteriorat Performin
d assets assets d assets g assets ed assets g assets ed assets g assets ed assets g assets
UBI Banca Scpa Albenza 3 Società per la cartolarizzazione Srl 1,043 11,176 105 10,675 0.17% 96.01% - - - -
UBI Banca Scpa UBI Finance 2 Srl (1) - - - - - - - - - -
UBI Banca Scpa UBI Finance 3 Srl (1) - - - - - - - - - -
UBI Banca Scpa 24-7 Finance Srl (1) - - - - - - - - - -
UBI Leasing Spa Lombarda Lease Finance 4 Srl 20,107 79,361 3,065 57,826 - 97.46% - 46.69% - -
UBI Leasing Spa UBI Lease Finance 5 Srl 333,228 3,106,897 30,042 689,661 - 43.62% - - - -
UBI Banco di Brescia Spa UBI SPV BBS 2012 Srl (1) - - - - - - - - - -
UBI Banca Popolare di Ancona Spa UBI SPV BPA 2012 Srl (1) - - - - - - - - - -
UBI Banca Popolare Commercio & Industria Spa UBI SPV BPCI 2012 Srl (1) - - - - - - - - - -
(1) These transactions are not reported in detail in these notes to the financial statements in view of the repurchase by the originator of all the
liabilities issued by the special purpose entity.
C.1.8 Special purpose entities belonging to the banking group
No special purpose entities belonging to the banking group to report.
400

C.2 Transfers
C.2.1. Financial assets transferred not derecognised
Tabella 7: 190120O|1 - NOTA
Legend:
A = Financial assets transferred and fully recognised (carrying amount)
B = Financial assets transferred and partially recognised (carrying amount)
C = Financial assets transferred and partially recognised (entire amount)
401

C.2.2 Financial liabilities resulting from financial assets transferred not derecognised
Liabilities / Portfolio activities
Financial assets
held for trading
Financial
assets
designated at
fair value
Available-for-sale
financial assets
Held-tomaturity
investments
Loans to banks
Loans to
customers
Total
31.12.2012
1. Due to customers 286,993 - 3,326,472 - - - 3,613,465
a) against fully recognised assets 286,993 - 3,326,472 - - - 3,613,465
b) against partially recognised assets - - - - - - -
2. Due to banks - - 280,151 - - - 280,151
a) against fully recognised assets - - 280,151 - - - 280,151
b) against partially recognised assets - - - - - - -
3. Debt securities issued - - - - - - -
a) against fully recognised assets - - - - - - -
b) against partially recognised assets - - - - - - -
31.12.2012 286,993 - 3,606,623 - - - 3,893,616
31.12.2011 1,126,052 - 3,524,349 - - - 4,650,401
C.2.3 Transfers with liability backed exclusively by the assets transferred: fair value
Financial assets held for
fully
recognised
trading
partially
recognised
Financial assets
designated at fair value
fully
recognised
partially
recognised
Available-for-sale
financial assets
fully
recognised
partially
recognised
Held-to-maturity
investments (fair value)
fully
recognised
(FV)
partially
recognised
(FV)
Loans to banks (fair
fully
recognised
(FV)
value)
partially
recognised
(FV)
Loans to customers (fair
fully
recognised
(FV)
value)
partially
recognised
(FV)
31.12.2012
A. On-balance sheet assets 293,167 - - - 3,930,902 - - - - - - - 4,224,069
1. Debt instruments 293,167 - - - 3,930,902 - - - - - - - 4,224,069
2. Equity instruments - - - - - - X X X X X X -
3. O.I.C.R.
Type of asset / Portfolio
(collective investment
- - - - - - X X X X X X -
instruments)
4. Financing - - - - - - - - - - - - -
B. Derivative instruments - - X X X X X X X X X X -
Total assets 293,167 - - - 3,930,902 - - - - - - - 4,224,069
C. Associated liabilities 286,993 - - - 3,606,623 - - - - - - - 3,893,616
1. Due to customers 286,993 - - - 3,326,472 - - - - - - - 3,613,465
2. Due to banks - - - - 280,151 - - - - - - - 280,151
3. Debt securities issued - - - - - - - - - - - - -
Total liabilities 286,993 - - - 3,606,623 - - - - - - - 3,893,616
Net value 31.12.2012 6,174 - - - 324,279 - - - - - - - 330,453
Net value 31.12.2011 11,925 - - - (33,481) - - - - - - - X
Total
402

C.3 Banking Group – Covered bond operations
Objectives
In 2008 the Management Board of UBI Banca passed a resolution to proceed to implement a
structured programme for the issue of covered bonds designed to produce benefits in terms of
funding while containing the cost at the same time.
In detail, the Management Board performed the following:
• it identified the objectives of the programme;
• it identified the basic structure of an operation to issue covered bonds in the light of the
legislation and explained and examined the main elements, including the portfolio of
loans, the criteria for selecting them, the structure of the financial transaction and the
relative tests;
• it assessed and approved the impacts and the organisational, IT and accounting changes
that would be required. These changes were performed to ensure proper risk management
by the Parent and also by the single banks participating. Account was also taken, in
drawing up the procedures, of the requirements set by regulations issued by the Bank of
Italy;
• it assessed the risks connected with the operation to issue covered bonds;
• it assessed the organisational and operating structure of the special purpose entity
concerned in order to ensure that the contracts involved in the operation contained
clauses that would guarantee the proper and efficient performance of the functions of the
special purpose entity itself;
• it assessed the legal aspects through an in-depth examination of the parties and contract
documents used, with particular attention paid to the nature of the guarantees given by
the special purpose entity and the relations between the issuing bank, the originator
banks and the special purpose entity.
The structure
The basic structure of the operation to issue covered bonds involved the performance of the following
activities:
• one bank (the originator) transfers a set of assets with determined characteristics to a special
purpose entity to form a separate set of assets termed a “cover pool”;
• the originator bank (acting here as a financing bank) grants a subordinated loan to the special
purpose entity designed to fund the purchase of the assets by the entity;
• the bank (the issuing bank) issues covered bonds backed by a primary, unconditional and
irrevocable guarantee given by the special purpose entity to the sole benefit of the holders of
the covered bonds and the hedging counterparties involved in the transaction. The guarantee
is backed by all the assets transferred to the special purpose entity and which form part of the
cover pool.
As part of the structure described above, the UBI Banca Group has launched a programme for issues
of ten billion euro of covered bonds. The structure that was adopted also allows the transfer of the
portfolios which constitute the segregated assets of the special purpose entity from more than one
originator bank, which are not issuer banks.
To achieve this, a special purpose entity, UBI Finance S.r.l. was formed, which as the guarantor of
the issue performed by UBI Banca acquired a portfolio of residential mortgages transferred to it from
network banks of the Group, which participated in the programme both as originator banks and as
financing banks.
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The roles of master servicer, calculation agent and cash manager of the transaction were performed
by the Parent, while that of paying agent was performed by Bank of New York (Luxembourg) Sa. The
representative of the bondholders is BNY Corporate Trustee Services Limited.
UBI Banca then delegated responsibility for servicing activity, consisting of collecting payments and
managing relations with customers for the portfolio transferred by each originator, to the originator
banks as sub-servicers. The originator banks also perform the role of swap counterparties in the
“balance guarantee swaps” stipulated with the special purpose entity in order to normalise the cash
flows generated by the mortgage portfolio.
A summary of the main features of the structure of UBI Banca’s covered bond programme is given
below.
Asset
Monitor
Loan granted
Interest on loan
(monthly)
Annual Coupon
(fixed)
Covered Bond
Funding from
covered
bond issue
Covered bond investors
Guarantee
Sellers
Interest on subordinated loan
Euribor + spread
Asset SWAP
Interest on Cover Pool
Subordinated Loan Granted
UBI Finance SRL
SPE
Euribor + spread
floating (monthly)
LIABILITY SWAPS
Coupon (fixed)
Mortgage
cover pool
A). Covered bonds. UBI Banca S.c.p.a. issues covered bonds under the programme;
B). Bond Loan. In order to allow the funding acquired on institutional markets from the issue of
covered bonds to flow back to the originator banks, these banks may issue bonds and the right to
require subscription of them by UBI Banca, within the limits of their quota of participation in the
programme. These bonds shall have the same maturity as the covered bonds and a yield equal to (or
slightly higher than) that of the covered bonds.
C). Subordinated Loan. In order to fund the purchase of mortgages by the special purpose entity, the
originator banks grant subordinated loans to it. The yield on these loans is calculated as a “premium”
or “extra spread” equal to the amount of the interest received, which remains in the accounts of the
special purpose entities once priority amounts in the chain of payments have been deducted, relating
to items such as the expenses incurred by the entity, payments to swap counterparties and
allocations to “reserve accounts”.
D). Swaps to hedge interest rate risk. If the covered bonds are issued at a fixed rate, UBI Banca
hedges the interest rate risk by entering into swap contracts with market counterparties, thereby
transforming the exposure to a variable rate. These swaps lie outside the perimeter of the covered
bond programme and are entered into with a view to interest rate risk management as part of the
Parent’s ALM.
E). Asset Swaps. Asset swap contracts are entered into between the originator banks and the special
purpose entity to normalise the cash flows consisting of the interest instalments on the portfolios
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transferred. Each of these swaps has an initial notional value equal to the value of the portfolios
transferred to UBI Finance by each originator. This notional amount is then adjusted monthly on the
basis of the contraction of the portfolio and increases due to the addition of new mortgages. The
duration of the swaps are related to the maturities of the mortgages in each portfolio transferred.
Since the individual originator banks are not assigned ratings themselves and as a consequence
would not comply as swap counterparties with the criteria set by the rating agencies to rate the
programme, UBI Banca backs the payments between the originator banks and UBI Finance by
signing a guarantee.
The swap contracts involve the monthly flow back to the originator banks of the interest received on
the loans present in each portfolio (net of the expenses of the special purpose entity and of provisions
in its accounts as indicated in the chain of payments) against the payment of a sum equal to the
notional return indicated at the Euribor rate plus a spread.
F). Liability Swaps. A liability swap contract is entered into between UBI Banca and UBI Finance for
each fixed rate issue. These are designed to protect against interest rate risk, which might affect the
cash flows received from the special purpose entity (including those from the asset swaps) and the
amounts due from the special purpose entity to investors (fixed rate coupons on the covered bonds)
in the event of default by UBI Banca.
The structure of the liability swaps only requires the exchange of cash flows between UBI Banca and
the special purpose entity in the event of default by UBI Banca or when UBI Banca assigns a swap
contract to another eligible counterparty. Both the asset and the liability swaps are structured in a
manner to comply with all the conditions required by the rating agencies and they incorporate all the
standard provisions required by the market for a downgrade.
The total hedging using derivatives contracts was a necessary condition for obtaining an “AAA” rating
on the programme. UBI Banca’s rating levels at the time when the programme was structured were
sufficiently high to allow it to be the direct counterparty in these swaps with the special purpose
entity (directly on the liability Swaps and indirectly on the asset swaps, providing a guarantee to the
transferring banks). In view of the downgrades of UBI Banca, which occurred in the year just ended,
UBI Banca and the transferring banks are today in a position where they are contractually obliged to
transfer the derivatives contracts entered into under the programme (asset swaps and liability swaps)
to third party counterparties.
A restructuring process is in progress at the time of writing these notes to the financial statements
and is subject to assessments by the rating agencies and by the representative of the holders of the
covered bonds.
G). Current accounts. The operation involves a complex system of current accounts to pay and receive
the cash flows involved in the operation. A series of accounts were opened in the name of the special
purpose entity for each originator bank as follows:
Collection account at UBI Banca S.c.p.a. linked to each originator bank into which sums
received are paid consisting of interest and principal on the portfolios of each originator, and,
where applicable, other assets transferred to the special purpose entity under the programme
(e.g. eligible assets and top-up assets);
Interest account with Bank of New York Mellon, London Branch linked to each originator
bank into which all interest paid into the collections accounts will be paid on a daily basis and
also all amounts paid to the special purpose entity by the counterparties of the swap
contracts.
Principal account with Bank of New York Mellon, London Branch linked to each originator
bank into which all the principal repayment amounts paid into the collection account will be
paid on a daily basis;
405

a Reserve Fund Account, with Bank of New York Mellon, London into which interest accruing
on the covered bonds is paid monthly in order to guarantee the payment of current coupons;
an Expense account, into which the amounts required to meet the expenses of the special
purposes entity will be paid, drawn from interest accounts, in proportion to the quota of
participation in the programme of each originator bank.
Effectiveness tests
Effectiveness tests are performed monthly on the whole cover pool and separately on the portfolios
transferred by each originator, in order to determine the financial integrity of each bank’s portfolio.
As required by the regulations, because it is a multioriginator programme, with cross-collateralisation
of the originator banks’ portfolios, the only valid test for investors is that performed on the whole
cover pool, while the tests performed on the individual portfolios are used to determine the integrity
of each originator’s portfolio for the purposes of cross-collateralisation between the different
originator banks.
In detail:
the nominal value test verifies whether the nominal value of the loans in the transferred
portfolio is greater than the nominal value of the covered bonds issued. In order to ensure an
adequate degree of over-collateralisation in the portfolio, while the covered bonds are
considered at their nominal value, the loans in the portfolio are weighted on the basis of the
relative collateral backing them and the total amount is further reduced by an asset
percentage;
the net present value test verifies whether the present value of the loans remaining in the
portfolio is greater than the present value of the covered bonds issued;
the interest cover test verifies whether the interest received and held in accounts and the cash
flows from interest to be received net of the entity’s expense is greater than the interest to be
paid to the holders of the covered bonds;
amortisation test (similar to the nominal value test, but only performed if UBI Banca is
downgraded by rating agencies);
the top-up assets test verifies whether, before UBI Banca defaults, the total amount of
additional assets and liquidity is not 15% greater than the nominal value of the loans
remaining in the portfolio transferred, in compliance with the Ministry of the Economy and
Finance and Bank of Italy instructions.
If all the tests are passed simultaneously then the special purpose entity may proceed to pay all the
parties involved in the programme, including the originator banks as the lenders of the subordinated
loan, in the order indicated in the “payment chain”.
However, if the results of the tests are negative, then the contract states that the UBI Banca Group
must increase the collateral of the portfolio by transferring new mortgages to it and that is “top up”
with extra assets. Failure to pass the tests, once the time limit allowed for the Group to add assets
has passed, results in an “issuer event of default” with a consequent enforcement of the guarantee
issued by UBI Finance. In this event the originator banks would only receive the repayments of the
subordinated loans granted after the redemption of the covered bonds by the special purpose entity
and within the limits of the remaining funds.
Organisational action and control procedures
As part of an organisational analysis process, four general processes were identified to which the
main activities of the programme were assigned. In detail:
1. identification of the liquidity requirements and approval of the operation by the competent
bodies. This general process involves assessment of proposals for the issue of covered
bonds by the Finance Committee of UBI Banca and approval of the basic outline by the
Management Board. Subsequently the network banks involved are informed, which assess
406

the proposals and their involvement in the issues on the basis of the information received.
In this context an “arranger” is identified who will supervise the operation and the internal
organisational units involved are also brought in;
2. planning and arrangement of the transaction: this general process involves verifying the
criteria for extracting and validating the assets which form part of the portfolio which is to
cover the issue. It interfaces with the rating agencies and external auditors and
preparatory work is done for proper segregation of the asset portfolio and for transfer to
the special purpose entity and all the relative contracts are prepared by internal units of
the bank and external advisors;
3. management of the operations: this general process involves opening current accounts for
the operations of the special purpose entity, granting the subordinated loan, entering into
derivatives contracts between the network banks and the special purpose entity, once the
“chain of payments” has been determined, performing tests on the effectiveness of the
portfolio and identifying the mortgage loans to top-up the cover pool which backs the
covered bonds issued. These activities are performed on a continuous basis;
4. regulatory controls: this general process involves putting internal and external controls
required by regulations in place to: analyse and monitor obligations to ensure the quality
and integrity of the assets transferred to back the portfolio; to define effectiveness tests
and to produce summary reports; to verify compliance with limits set on the transfer of
eligible assets; to verify cover for financial risks; to verify compliance by the special
purpose entities with the obligations resulting from the guarantee given; to verify the
contract documents employed; and to verify the completeness of the controls to be
performed by the Parent. External controls are also put in place to ensure compliance of
the measurement criteria applied by the bank with those required for the preparation of
annual financial statements and also to guarantee the proper performance of the
transaction and the validity of the guarantee given to back redemption of the covered
bonds.
This organisational model, drawn up in 2008 to govern the first issuance of covered bonds under the
residential programme still remains valid and applicable even for the regulation of subsequent
issuances. For complete information, we report that a series of organisational activities is in progress
carried out by the competent units of the UBI Group designed to define a project to develop the
current processes for the issuance and management of the covered bonds described above, in
consideration of the following:
- the growing complexity and pervasiveness in Group units of the activities to manage the issuance
of covered bonds;
- the structuring of a second programme concluded during the year just ended, an account of which
is given in the following pages.
The risks connected with the operation
In 2012 the Bank revised its analysis of the risks identified with the programme when it was
approved in June 2008 and it prepared a new map of those risks. The risks identified, listed below,
are derived from the current regulatory framework (EU and Italian) and they are based on the current
methodologies used by rating agencies.
The different types of risk are attributable to the following four general categories:
1. Risk of UBI Banca downgrade, which includes the risk relating to the swap contracts to
which UBI Banca is a counterparty and the risk relating to the account bank activities
performed by UBI Banca;
2. Risk attached to the underlying mortgages (collateral). The issuance of covered bonds
bases its rating on the credit enhancement provided by the portfolio of mortgages transferred to
back the special purpose entity. A decrease in the level of over-collateralization would lead
primarily to a downgrade of the operation and, in the most serious cases, to a default of the
407

issuer, if the minimum level provided for in the contracts were not guaranteed and/or the
regulatory tests were not passed. Various mechanisms are provided within the programme to
address these risk. They include the following: a nominal value test and the overcollateralization,
designed to ensure that the special purpose entity is able to fully guarantee the
covered bonds issued even in the event of some defaults on the underlying assets; the ability to
inject liquidity in order to guarantee the issues (within the limits of 15% of the total amount of
the assets held by the special purpose entity); the ability to also insert assets with a higher
rating in the cover pool such as RMBSs with a higher rating in compliance with regulations or
government securities and finally, with regard to redemption by the special purpose entity (or by
UBI Banca in the event of its default) of the capital maturing, the maturity of the covered bonds
may be extended by one year (termed a “soft bullet maturity”).
In any event, the units responsible at UBI Banca periodically verify the adequate availability of
mortgages in order to ensure the necessary over-collateralization for covered bonds already
issued and for those to be issued in the coming year.
3. Risks connected with continuous management of the programme: the programme involves
various third parties (asset monitors, bank account providers, trustees, possible swaps
providers), for each of which there is a risk of insolvency. Counterparty replacement rules have
been put in place to limit that risk if determined events occur. The programme also requires
continuous management of matters which include servicing activities, investment activities, the
management of possible swap contracts, the calculation of regulatory tests and the production
of reports. In order to manage the related risks, the Bank initially adopted the tools and
processes described above, which are undergoing further revision and update.
4. Legal risks, which, due to the particular multi-originator structure of the UBI Banca
programme, include the risk of cross-collateralization. The participation of a number of
originator banks in the programme mean that all the transferor banks are subordinated
creditors on an equal basis, of the special purpose entity and above all, they assume the
obligation to “remedy” the tests if they are not passed, even if the shortcoming is not due to
their portfolios. To mitigate that risk, the contract documents state that if the transferor bank
required to restore assets does not meet that obligation, in the first instance the Parent will be
required to restore the cover pool until the required level of over-collateralization is reached,
while the transferor banks will only be required to restore the cover pool if the Parent should fail
to do so.
The history of the UBI Banca’s residential mortgage covered bond programme
In the context of the procedures described above, the UBI Banca Group launched a ten billion euro
programme for the issue of covered bonds in July 2008, with the first transfers of mortgages
performed by two banks in the Group, Banco di Brescia and Banca Regionale Europea, for a total
amount, as at that time, of approximately two billion euro.
Subsequently, in the years 2008 – 2010, all the Group’s network banks joined the programme
progressively transferring portions of their assets. Further transfers of assets were then concluded in
each of the following years.
In 2012 in particular two transfers of assets were made: the first concluded on 1 st February 2012, for
a total of €1.171 billion, of which approximately €347 million transferred by Banco di Brescia,
approximately €452 million by Banca Popolare di Bergamo, approximately €280 million by Banca
Carime and approximately €92 million by UBI Banca Private Investment. The second was on 1 st
October 2012 for a total €1.411 billion, of which approximately €225 million transferred by Banca
Regionale Europea, approximately €141 million transferred by Banco di San Giorgio (subsequently
merged into Banca Regionale Europea), approximately €603 million by Banca Popolare Commercio ed
Industria, approximately €94 million by Banca di Valle Camonica and approximately €348 million by
Banca Popolare di Ancona.
As at 31 st December 2012, the cover pool of mortgages for the issues, which for accounting purposes
is recognised within the assets of each originator bank, amounted to a total of over €11 billion.
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The table below gives the distribution of the portfolio (remaining principal debt) for each originator
bank and the total by class of credit quality as at 31.12.2012.
TYPE OF LOAN
TOTAL
PORTFOLIO
originated
by BRE
originated
by Banco
di Brescia
originated by
Banca
Popolare di
Bergamo
originated by
Banca
Popolare di
Ancona
originated by
Banca
Popolare di
Commercio e
Industria
originated
by Banca
Carime
originated by
Banca di Valle
Camonica
originated
by UBI
Banca
Private
(Remaining principal debt – figures in
thousands of euro)
Performing
9,623,411 1,501,944 1,859,876 2,241,142 1,068,919 1,879,089 685,356 224,333 162,752
loans
Delinquent loans 1,377,407 214,985 387,368 267,803 152,683 212,735 78,645 35,632 27,557
Cover pool
(1+2)
11,000,818 1,716,929 2,247,244 2,508,945 1,221,602 2,091,823 764,001 259,966 190,309
Defaulted loans 207,177 35,701 49,477 52,692 15,352 27,385 17,804 3,979 4,786
Total UBI
Finance
portfolio
11,207,995 1,752,630 2,296,720 2,561,637 1,236,954 2,119,208 781,805 263,945 195,094
In 2012 this portfolio generated total payments received of approximately €1.3 billion, distributed as
follows among the portfolios of the different originators:
TYPE OF LOAN
TOTAL
PORTFOLIO
originated
by BRE (*)
originated
by Banco di
Brescia
originated by
Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
originated by
Banca
Popolare di
Commercio e
Industria
originated
by Banca
Carime
originated
by Banca di
Valle
Camonica
originated
by UBI
Banca
Private
(figures in thousands of euro)
payments
received in 2012
1,333,856 192,133 271,184 358,813 136,982 210,100 117,181 26,191 21,272
As part of the €10 billion of issues allowed under the programme, in the preceding years UBI Banca
issued covered bonds for a total of €5,750,000,000. The tables give details of the individual issues:
409

Number in
order ISIN Name Issue date
Maturity
date
Principal(*)
Coupon
(**)
1 (public) IT0004533896 UBI BANCA 3.625% CB due 23/9/2016 23/09/2009 23/09/2016 1,000,000,000 36,250,000
2 (public) IT0004558794 UBI BANCA 4.000% CB due 16/12/2019 16/12/2009 16/12/2019 1,000,000,000 40,000,000
3 (private) IT0004599491 UBI BANCA TV CB due 30/04/2022 30/04/2010 30/04/2022 215,909,092 1,010,766
4 (public) IT0004619109 UBI BANCA 3.375% CB due 15/09/2017 15/09/2010 15/09/2017 1,000,000,000 33,750,000
5 (public) IT0004649700 UBI BANCA 3.125% CB due 18/10/2015 18/10/2010 18/10/2015 500,000,000 15,625,000
6 (public) IT0004682305 UBI BANCA 5.250% CB due 28/01/2021 28/01/2011 28/01/2021 1,000,000,000 52,500,000
7 (public) IT0004692346 UBI BANCA 4.500% CB due 22/02/2016 22/02/2011 22/02/2016 750,000,000 33,750,000
8 (private) IT0004777444 UBI BANCA TV CB due 18/11/2022 18/11/2011 18/11/2022 250,000,000 3,900,100
(*) For issues subject to amortisation the remaining principal is given as at the reporting date.
(**) For floating rate issues, the amount of the current coupon as at the reporting date is given.
When issued all the bonds indicated above had received the highest ratings from Fitch (AAA) and
Moody’s (Aaa).
Three new issuances of floating rate covered bonds were made in the first quarter of 2012 for €250
million each, which were repurchased by the Parent in order to use them as eligible collateral in
operations with the central bank. These new issues initially received ratings of AA+ (Fitch) and Aa2
(Moody’s).
Details of these latest issues are given below:
Number in
order ISIN Name Issue date
Maturity
date Principal Coupon(*)
9 (private) IT0004799331 UBI BANCA TV CB due 17/02/2014 22/02/2012 17/02/2014 250,000,000 1,700,563
10 (private) IT0004799349 UBI BANCA TV CB due 18/02/2014 22/02/2012 18/02/2014 250,000,000 1,700,563
11 (private) IT0004799091 UBI BANCA TV CB due 19/02/2014 22/02/2012 19/02/2014 250,000,000 1,719,250
(*) The coupons are quarterly floating rate and the amount indicated relates to the coupons maturing as at the reporting date.
From the second half of 2011 onwards, the three agencies, Moody’s, Fitch and Standard and Poor’s,
repeatedly downgraded the Bank’s rating as a consequence of the progressive downgrades of the
rating for Italy. The rating for the covered bond programme was reduced from AAA to AA- by Fitch
and to A2 by Moody’s.
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The UBI Banca five billion euro – “retained” – commercial mortgage covered bond programme
In the first half of 2012, a new covered bond programme was structured for the issue of new covered
bonds to be retained, and that is to be subscribed by UBI Banca itself, which will be used as
collateral for posting with the European Central Bank in order to strengthen the pool of assets eligible
for refinancing available to the Group.
To achieve this, a specific new special purpose entity, named UBI Finance CB2 S.r.l. was formed, to
function as the guarantor of the issues of the new series of covered bonds. Mainly commercial
mortgages and, in addition, residential mortgages eligible according to national legislation and
regulations, but not covered by the rating agency methodologies for the first programme, are
transferred by Group banks to UBI Finance CB2 S.r.l. In fact, as opposed to the procedures applied
for the residential programme, the retained programme is not assessed by the rating agencies, but
benefits solely from the senior rating of the Parent, UBI Banca. UBI Banca will be able to issue
covered bonds under that programme for a total amount, from time to time, of not greater than €5
billion.
Again, for this second programme, the Management Board has:
• identified the objectives of the programme and the issues;
• identified the basic structure of the operation, examining the initial loan portfolio and the
criteria used to select it as well as the financial structure of the transaction and the tests;
• assessed and approved the impacts and the organisational, IT and accounting changes
that would be required, considering that those actions had already been carried out to
ensure proper risk management for the first programme;
• assessed the risks connected with the operation to issue covered bonds;
• assessed the organisational and operating structure of the special purpose entity;
• assessed the legal aspects of the programme.
We refer to what has already been reported above concerning the residential programme for that
which regards the structural, organisational and risk aspects of the operation, while here we report
only those points where the €5 billion programme differs from that which has already been reported:
A. asset swaps: in consideration of the retained nature of the programme and the absence of a
specific rating on the issues, no swap contracts have been taken out at present on the portfolio;
B. liability swaps: at present no fixed rate issuances have been made and therefore no liability swap
contracts exist between the special purpose entity and third party counterparties;
C. current accounts: interest and principal collection accounts have been opened for the second
programme with UBI Banca International;
D. the liquidity generated by the programme. In consideration of the type of operation performed by
the Group with the retained programme, designed to increase the quantity of assets available for
refinancing operations with the Eurosystem, no issuance of bonds is put in place, in this case, to
channel funds back to the originator banks.
History of the UBI Banca Retained Covered Bond Programme
The portfolio to back the retained programme was transferred in two tranches: on 1 st March 2012 the
first assets were transferred by Banca Regionale Europea (approximately €356 million), Banca
Popolare di Ancona (€512 million approx.), Banca Popolare Commercio ed Industria (€332 million
approx.) and Banca di Valle Camonica (€101 million approx.), while on the following 1 st April assets
were transferred by Banca Popolare di Bergamo (€562 million approx.), Banco di Brescia (€628
million approx.), Banco di San Giorgio (€209 million approx.) and Banca Carime (€310 million
approx.).
The portfolio transferred, which – as already was the case for the first programme – continued to be
recognised as assets on the books of each originator bank, totalled €2.7 billion as at 31 st December
2012.
411

The table below gives the distribution of the portfolio (remaining principal debt) for each originator
bank and the total by class of credit quality as at 31.12.2012.
TYPE OF LOAN
TOTAL PORTFOLIO
originated
by BRE
(*)
originated
by Banco di
Brescia
originated
by Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
originated
by Banca
Popolare di
Commercio
e Industria
originated
by Banca
Carime
originated
by Banca di
Valle
Camonica
(Remaining principal debt – figures in thousands of euro)
Performing loans
Delinquent loans
Cover pool (1+2)
Defaulted loans
2,316,044 447,207 455,304 455,536 362,115 269,052 251,609 75,221
385,137 62,957 106,447 51,413 98,829 24,873 30,476 10,140
2,701,181 510,164 561,751 506,950 460,944 293,925 282,084 85,362
44,526 5,341 9,938 10,675 8,811 1,907 3,708 4,146
Total UBI Finance
2,745,707 515,505 571,689 517,625 469,755 295,832 285,793 89,508
CB2 portfolio
(*) The column includes the figures for Banca San Giorgio merged into BRE during the year.
Also for the portfolio transferred to UBI Finance CB 2, the master servicer, UBI Banca, delegated
responsibility for servicing activity, consisting of collecting payments and managing relations with
customers for the portfolio transferred by each originator (except for positions reclassified as nonperforming,
handled by the Credit Area of the Parent), to the originator banks as sub-servicers.
The total sums received in payments on the portfolio in 2012 are given below:
TYPE OF
LOAN
TOTAL
PORTFOLIO
originated
by BRE (*)
originated by
Banco di
Brescia
originated by
Banca
Popolare di
Bergamo
originated by
Banca
Popolare di
Ancona
originated by
Banca
Popolare di
Commercio e
Industria
originated
by Banca
Carime
originated by
Banca di
Valle
Camonica
(figures in thousands of )
payments
received in
324,030 60,350 68,278 54,364 53,164 42,732 32,059 13,082
2012
(*) The column includes the figures for Banca San Giorgio merged into BRE during the year.
412

In the first year of the life of the second programme, two covered bond issuances were made, both
retained, for a total €2.3 billion, details of which are given in the following table:
Number in
order ISIN Name Issue date
Maturity
date Principal Coupon (*)
1 (retained) IT0004818701 UBI BANCA TV CB2 due 28/05/2018 28/05/2012 28/05/2018 1,800,000,000 10,074,060
2 (retained) IT0004864663
UBI BANCA TV CB2 due 29/01/2013 29/10/2012 29/10/2013 500,000,000 3,453,833
(*) The coupons are floating rate and the amount indicated relates to the coupons maturing as at the reporting date.
D. Banking group - Models for the measurement of credit risk
With regard to the measurement of credit risk, the Group has developed a portfolio credit risk model
using the Algorithmics PCRE calculation engine. The model, which includes PD and LGD used for
supervisory purposes among its input variables, considers the total risk for a loan portfolio by
modelling and capturing the component resulting from the correlation of counterparty defaults,
calculating credit losses and the capital at credit risk at portfolio level. This involves the use of a
complex method for measuring the total risk of the entire portfolio, designed to capture mutually
dependent phenomena in changes in counterparty creditworthiness and to determine the distribution
of total losses for the whole portfolio as the basis for calculating risk.
Calculation of the correlation between defaults therefore makes it possible to establish the
concentration of risk within a portfolio, which can be used as a basis both for managing and
mitigating total risk by employing an appropriate diversification strategy and also for implementing
efficient pricing policies.
The model proposed uses an approach similar to that of the Merton model (1974). Counterparty
creditworthiness is given by an intermediate variable, the Credit Worthiness Index (affected by two
components: a system and a specific component). The future level of this variable determines
creditworthiness on the basis of specially calculated thresholds and therefore also any corresponding
losses.
The analysis of changes in counterparty creditworthiness can be performed over a time period of
longer than one year with intermediate steps.
413

2. BANKING GROUP - MARKET RISK
2.1 Interest rate risk and price risk – supervisory trading portfolio
Qualitative information
A. General aspects
The considerations that follow relate exclusively to the “trading book”, as defined by supervisory
regulations. Transactions designed to affect sensitivity at Group level and equity investments in other
companies classified as for trading according to IAS are excluded.
Management of Group financial risk is centralised in general in the Parent and is performed by the
Finance Area. Exception is made for the portfolios managed directly by Centrobanca, IW Bank, BDG
and UBI Banca International.
B. Management and measurement of interest rate risk and price risk
The guidelines for the assumption and monitoring of financial risk in the UBI Banca Group are
defined in the Policy to Manage Financial Risks of the UBI Banca Group and in the relative documents
to implement it (Regulations and document setting operational limits) with particular reference to
market risk on the trading book and to interest rate, currency and liquidity risks on the banking
book.
More specifically the policy defines the capital allocated (maximum acceptable loss) to trading book
activities, equal to 1% of the available first and second level financial resources (with an early
warning threshold for amounts greater than 80% of the capital allocated), and it sets an early
warning threshold on VaR, which must not exceed 20% of the capital allocated.
Within the trading book, the monitoring of the consistency of the risk profiles of Group portfolios with
respect to risk-return objectives is based on a system of limits which involves the combined use of
various indicators. The following are defined for each portfolio of the Group:
• Mission,
• maximum acceptable loss limit
• VaR limit
• possible limits on the type of financial instruments permitted,
• possible limits on composition.
Consistent with the limits set by the policy, the Document setting operational limits defines operational
limits for the trading book of the UBI Group in 2012, both at general level and for counterparties and
single portfolios.
The main operational limits for 2012 (including reallocations and any new limits set in the second
half of the year) are as follows:
• Maximum acceptable loss for the UBI Group trading book
• early warning threshold on maximum acceptable loss (MAL)
• One day VaR limit for the UBI Group trading book
• early warning threshold on VaR
€104.53 million
70% MAL
€21 million
80% VaR
Observance of the limits set for each portfolio is monitored daily.
414

The summary measurement used to assess the exposure of the Bank to financial risks is value at
risk (VaR). It is a statistical measurement used to estimate the loss that might occur following
adverse changes in risk factors.
The VaR of the UBI Banca Group is measured using a confidence interval of 99% and a holding
period of one day. This value is defined in terms of limits consistent with the time horizon for the
possible disinvestment of the portfolios. The VaR gives the “threshold” of the daily loss which, on the
basis of probability hypotheses could only be exceeded in 1% of cases.
The method used for calculating VaR is that of historical simulation. With this approach the portfolio
is revalued by applying all the changes in risk factors recorded in the two previous years (500
observations). The values thus obtained are compared with the present value of the portfolio to give a
hypothetical series of gains or losses. The VaR corresponds to the sixth worst result (confidence
interval of 99%) of those obtained.
The Group employs a stress testing programme to identify events or factors which could have a
significant effect on positions to supplement the risk indicators obtained from the use of VaR.
Stress tests are by nature both quantitative and qualitative and they consider not just market risks
but also the effects on liquidity generated by market turbulence. They are based on both specially
created theoretical shocks and market shocks actually observed in a predetermined historical period.
The predictive power of the model adopted for risk measurement is currently monitored using daily
backtesting analysis, which uses an actual P&L calculated by the front office systems of the Group.
Retrospective tests consider changes in the value of the portfolio resulting from the front office
systems of the Group, determined on day t with respect to positions present at t-1. The actual P&L is
generated from all the transactions opposite in sign to the initial position for a total amount less than
or equal to the total of the position t-1 without considering transactions of the same sign as the initial
position that may have arisen during the day.
The risk of losses caused by unfavourable changes in the price of traded financial instruments due to
factors related to the issuer can be the result of daily trading activity (idiosyncratic risk) or of a
sudden change in price with respect to general market trends (event risk, such as the risk of default
by the issuer caused by a change in the market’s expectation that an issuer itself will default).
The UBI model for monitoring specific risk for debt securities is capable of detecting the first of the
two components (idiosyncratic risk) because it considers spread curves by economic sector and rating
as risk factors.
Total risk on equity instruments (and OICR – collective investment instruments) is measured by
considering single shares as risk factors and it includes both the generic risk component (i.e. the risk
of losses caused by unfavourable trends in the prices of the financial instruments traded in general)
and a specific component relating to the situation of the issuer.
415

Quantitative information
1.1 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: Euro
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL EURO
1. On-balance sheet assets 346 26.000 304.057 2.766.801 339.065 2.812.110 404 - 6.248.783
1.1 Debt instruments 121 14.435 304.057 2.765.501 304.287 2.812.081 404 - 6.200.886
- w ith early redemption option 312 169 481
- other 121 14.435 304.057 2.765.501 303.975 2.811.912 404 - 6.200.405
1.2 Other assets 225 11.565 - 1.300 34.778 29 - - 47.897
2. On-balance sheet liabilities - 11.664 - 671.073 470.825 - - - 1.153.562
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - 11.664 - 671.073 470.825 - - - 1.153.562
- - - - - - -
3 Financial derivatives (83.050) (9.429.602) (17.068) 427.626 3.034.563 3.005.249 4.106.953 (21.406) 1.023.265
3.1 With underlying security - (803) 656 1.506 19.922 265 (1) (21.406) -
- Options - - - - 18.156 - - (18.156)
+ Long positions - 23.147 4.991 28.138
+ Short positions - 4.991 23.147 28.138
- Other - (803) 656 1.506 1.766 265 (1) (3.250)
+ Long positions - 87.455 72.310 1.845 2.433 265 164.308
+ Short positions - 88.258 71.654 339 667 1 3.250 164.169
3.2 Without underlying security (83.050) (9.428.799) (17.724) 426.120 3.014.641 3.004.984 4.106.954 - 7.852
- Options - 75.733 3.342 (1.515) (15.499) (5.569) (48.640) -
+ Long positions - 521.295 176.706 157.268 105.824 75.217 164.877 1.201.187
+ Short positions - 445.562 173.364 158.783 121.323 80.786 213.517 1.193.335
- Other (83.050) (9.504.532) (21.066) 427.635 3.030.140 3.010.553 4.155.594 -
+ Long positions 96.792 10.846.735 3.373.487 791.055 5.935.233 4.091.559 4.980.538 30.115.399
+ Short positions 179.842 20.351.267 3.394.553 363.420 2.905.093 1.081.006 824.944 29.100.125
416

1.2 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: USD
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL USD
1. On-balance sheet assets - - - - - - - - -
1.1 Debt instruments - - - - - - - - -
- with early redemption option -
- other - 3,741 27 - 3,822 - - - 7,590
1.2 Other assets - - - - - - - - -
2. On-balance sheet liabilities - - - - - - - - -
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - - - - - - - - -
- - - - - - -
3 Financial derivatives - 236 (158,962) 6,697 4,430 (379) - - (147,978)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - 236 (158,962) 6,697 4,430 (379) - - 3,839
- Options - 3,839 - - - - - -
+ Long positions - 133,593 115,752 145,355 13,047 407,747
+ Short positions - 129,754 115,752 145,355 13,047 403,908
- Other - (3,603) (158,962) 6,697 4,430 (379) - -
+ Long positions - 724,975 19,080 10,527 35,309 37,896 - 827,787
+ Short positions - 728,578 178,042 3,830 30,879 38,275 - 979,604
417

1.3 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: CHF
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL CHF
1. On-balance sheet assets - - - - - - - - -
1.1 Debt instruments - - - - - - - - -
- with early redemption option -
- other - - - - - - - - -
1.2 Other assets - - - - - - - - -
2. On-balance sheet liabilities - - - - - - - - -
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - - - - - - - - -
- - - - - - -
3 Financial derivatives - (488,856) (158,377) (456) - - - - (647,689)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - (488,856) (158,377) (456) - - - - -
- Options - - - - - - - -
+ Long positions - 3,108 1,103 384 991 5,586
+ Short positions - 3,108 1,103 384 991 5,586
- Other - (488,856) (158,377) (456) - - - -
+ Long positions - 161,272 55 - - - - 161,327
+ Short positions - 650,128 158,432 456 - - - 809,016
418

1.4 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: GBP
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL GBP
1. On-balance sheet assets - - - - - - - - -
1.1 Debt instruments - - - - - - - - -
- with early redemption option -
- other - - - - - - - - -
1.2 Other assets - - - - - - - - -
2. On-balance sheet liabilities - - - - - - - - -
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - - - - - - - - -
- - - - - -
3 Financial derivatives - (2,522) (10,577) 3,761 - - - - (9,338)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - - - - - - - - -
+ Short positions - - - - - - - - -
- Other - - - - - - - -
+ Long positions - - - - - - - - -
+ Short positions - - - - - - - - -
3.2 Without underlying security - (2,522) (10,577) 3,761 - - - - 26,529
- Options - 15,450 7,318 3,761 - - - -
+ Long positions - 15,450 7,318 3,761 - - - - 26,529
+ Short positions - - - - - - - - -
- Other - (17,972) (17,895) - - - - -
+ Long positions - 91,794 1,186 - - - - - 92,980
+ Short positions - 109,766 19,081 - - - - - 128,847
419

1.5 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: YEN
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL YEN
1. On-balance sheet assets - - - - - - - - -
1.1 Debt instruments - - - - - - - - -
- with early redemption option -
- other - - - - - - - - -
1.2 Other assets - - - - - - - - -
2. On-balance sheet liabilities - - - - - - - - -
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - - - - - - - - -
- - - - - - -
3 Financial derivatives - (38,849) (5) - - - - - (38,854)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - (38,849) (5) - - - - - (3,573)
- Options - (3,573) - - - - - -
+ Long positions - 5,798 2,981 1,331 598 10,708
+ Short positions - 9,371 2,981 1,331 598 14,281
- Other - (35,276) (5) - - - - -
+ Long positions - 144,895 15,060 - - - - 159,955
+ Short positions - 180,171 15,065 - - - - 195,236
0.00
420

1.6 Supervisory trading portfolio: distribution of on-balance sheet financial assets and liabilities and financial derivatives by
residual maturity (repricing date). Denominated in: other currencies
Type/Residual maturity On demand Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL OTHER
CURRENCIES
1. On-balance sheet assets - - - - - - - - -
1.1 Debt instruments - - - - - - - - -
- with early redemption option -
- other - - - - - - - - -
1.2 Other assets - - - - - - - - -
2. On-balance sheet liabilities - - - - - - - - -
2.1 Repurchase agreements - - - - - - - - -
2.2 Other liabilities - - - - - - - - -
- - - - - - -
3 Financial derivatives - (153,676) - - - - - - (153,676)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - (153,676) - - - - - - -
- Options - - - - - - - -
+ Long positions - 6,665 5,074 3,245 14,984
+ Short positions - 6,665 5,074 3,245 14,984
- Other - (153,676) - - - - - -
+ Long positions - 101,733 19,574 320 1,602 - - 123,229
+ Short positions - 255,409 19,574 320 1,602 - - 276,905
0.00
421

2. Supervisory trading portfolio: internal models and other methods of sensitivity analysis
The graph below shows the changes in VaR in 2012, for the UBI Group trading portfolios.
Change in market risk: daily market VaR for the UBI Group in 2012
14.000.000
12.000.000
10.000.000
8.000.000
6.000.000
4.000.000
2.000.000
0
VaR by risk factor calculated on the total UBI Group trading book as at 31 st December 2012 is given
below.
Trading book of the UBI Banca Group 31.12.2012 Average Minimum Maximum
Currency risk 329,002 301,265 180,789 401,754
Interest rate risk 316,522 484,136 167,928 888,959
Equity risk 1,620,044 594,676 114,886 1,674,922
Credit risk 11,973,823 6,935,178 3,664,030 13,004,255
Volatility risk 255,568 145,412 96,258 265,732
Diversification effect (1) (1,877,018)
Total (2) 12,617,940 7,331,761 3,807,270 13,068,147
(1) The diversification effect is due to the imperfect correlation between the different risk factors present in the Group’s portfolio.
(2) The maximum VaR was recorded on 13/11, the minimum VaR on 10/02
Backtesting analyses
Backtesting analysis is designed to test the predictive power of the VaR model adopted. It uses an
actual profit and loss calculated on the basis of returns on positions in the portfolio on the previous
day.
The backtesting analysis for the trading book of UBI Group for 2012 is given below.
422

UBI Group trading book: backtesting for 2012
Millions Profit & Loss VaR
8
5
2
-1
-4
-7
-10
-13
02/01 24/01 15/02 08/03 30/03 21/04 13/05 04/06 26/06 18/07 09/08 31/08 22/09 14/10 05/11 27/11 19/12
Actual backtesting analysis of the supervisory portfolios of the UBI Group identified no overshoots,
i.e. days when the profit and loss was worse than the VaR calculated by the risk management
system.
Theoretical stress tests
The Group has a stress testing programme designed to analyse the reaction of portfolios to risk factor
shocks with the objective of verifying the ability of the regulatory capital to absorb very large potential
losses and to identify possible measures needed to reduce risks and conserve the capital itself.
Stress tests based on theoretical shocks consist of specially created extreme shifts in interest rate
(short, medium and long-term), credit spread, exchange rate, equity price and volatility curves. A
brief description of the most significant stress tests is given below.
• Bull/Bear Steepening: a shock on the yield curve where the decrease/increase in short term
interest rates is greater/smaller than that for long term rates.
• Bull/Bear Flattening: a shock on the yield curve where the decrease/increase in short term
interest rates is smaller/greater than that for long term rates.
• Shock Credit Spread: a widening in the credit spread of 100 basis point for corporate and
government securities with a rating of less than AAA.
• Flight to quality: this simulates a shift from investment in high risk to low risk assets. The
shock applied is a decrease of 100bp in the interest rates for AAA government securities, an
increase of 100bp in the credit spread on corporate and banking securities, and a
depreciation in equity instruments of 10%.
423

The table below gives the results of the theoretical stress tests performed on the UBI Group’s
portfolios.
The effect of theoretical shocks on the trading and banking book of the UBI Group
Data as at 31/12/12
UBI GROUP TRADING BOOK
31/12/12
UBI GROUP BANKING BOOK
31/12/12
TOTAL UBI GROUP
31/12/12
Change in NAV Change in NAV Change in NAV
Risk Factors IR
Shock Shock +1bp -177,998 -0.01% -1,212,621 -0.01% -1,390,620 -0.01%
Risk Factors IR
Shock Shock -1bp 177,903 0.01% 1,211,477 0.01% 1,389,380 0.01%
Risk Factors IR
Shock Shock +100bp -18,020,068 -1.22% -126,989,292 -1.13% -145,009,360 -1.14%
Risk Factors IR
Shock Shock -100bp 3,272,589 0.22% 30,085,573 0.27% 33,358,162 0.26%
Risk Factors IR
Shock Bear Steepening -243,540 -0.02% 79,373,164 0.71% 79,129,624 0.62%
Risk Factors IR
Shock Bull steepening 1,519,901 0.10% -4,997,991 -0.04% -3,478,090 -0.03%
Risk Factors IR
Shock Bear Flattening -1,546,336 -0.10% 3,853,927 0.03% 2,307,592 0.02%
Risk Factors IR
Shock Bull Flattening -9,268 0.00% -107,311,888 -0.96% -107,321,155 -0.85%
Risk Factors Equity
Shock +10% 4,160,707 0.28% 4,977,297 0.04% 9,138,004 0.07%
Risk Factors Equity
Shock -10% -3,235,235 -0.22% -4,977,297 -0.04% -8,212,532 -0.06%
Risk Factors Volatility
Shock +20% 473,766 0.03% 3,205,860 0.03% 3,679,626 0.03%
Risk Factors Volatility
Shock -20% -454,555 -0.03% -3,609,230 -0.03% -4,063,785 -0.03%
Risk Factors Forex
Shock +15% -2,743,597 -0.19% -1,277,377 -0.01% -4,020,974 -0.03%
Risk Factors Forex
Shock -15% 2,743,597 0.19% 1,277,377 0.01% 4,020,974 0.03%
Risk Factors Credit Spread
Shock -22,351,259 -1.51% -617,324,251 -5.51% -639,675,510 -5.04%
Flight to quality scenario -29,488,033 -2.00% -622,301,548 -5.55% -651,789,581 -5.14%
The analysis shows the heightened sensitivity of the UBI Group’s portfolios to credit spread shocks
(consistent with the presence of Italian government securities and corporate securities, which are
present in the UBI available-for-sale, the Centrobanca Corporate and the UBI International
Luxembourg portfolios), to interest rate shocks (consistent with the presence of bonds and interest
rate derivatives in Group portfolios).
The limits set for the trading book are also used for the portfolios in the banking book, which contain
assets classified for IFRS purposes as available-for-sale (the UBI available-for-sale portfolio, the
424

Centrobanca corporate portfolio and the IW Bank available-for-sale portfolio) and under the fair value
option (UBI hedge funds portfolio). The main operational limits for the banking book of the UBI
Group decided for 2012, including the reallocations and the new limits set in the second half of the
year, are given below.
maximum loss for UBI banking book portfolios
€2,998.07 million
one day VaR limit for UBI banking book portfolios
€238.48 million
The graph below shows the changes in VaR that occurred in 2012 for the UBI Group banking book
portfolios.
Market VaR does not include VaR on hedge funds, instruments for which a specific investment policy is employed.
VaR by risk factor calculated on the entire UBI Group banking book as at 31 st December 2012 is
given below.
Banking book of the UBI Banca Group 31.12.2012 Average Minimum Maximum
Currency risk 116,154 134,506 89,242 158,741
Interest rate risk 9,716,142 11,326,516 8,191,383 17,321,584
Equity risk 1,692,096 1,857,853 1,410,477 3,696,651
Credit risk 221,430,360 185,885,223 127,345,160 225,106,889
Volatility risk 872,048 851,340 702,327 938,448
Diversification effect (1) (10,914,559)
Total (2) 222,912,241 187,750,657 132,215,497 226,774,064
(1) The diversification effect is due to the imperfect correlation between the different risk factors present in the Group’s portfolio.
(2) The maximum VaR was recorded on 19/12, the minimum VaR on 06/01,
2.2 Interest rate risk and price risk – banking portfolio
Qualitative information
A. General aspects, management and measurement of interest rate risk and price risk
Interest rate risk consists of changes in interest rates which have the following effects:
• on net interest income and consequently on the profits of the bank (cash flow risk);
• on the net present value of assets and liabilities, which has an impact on the present value of
future cash flows (fair value risk).
The control and management of structural interest rate risk - fair value and cash flow – is performed
in a centralised manner by the Parent within the framework, defined annually, of the Policy to
Manage Financial Risks of the UBI Banca Group, which identifies measurement methods and models
and limits or early warning thresholds in relation to net interest income and the economic value of
the Group.
Measurement, monitoring and reporting of interest rate risk exposure is performed at consolidated
and individual level by the Risk Management Area of the Parent, which performs the following on a
monthly basis:
• a sensitivity analysis designed to measure changes in the value of assets on the basis of
parallel shocks on interest rate levels for all the time buckets of the curve;
• a simulation of the impact on net interest income for the current year by means of a static gap
425

analysis (i.e. assuming that the positions remain constant during the period), considering the
effect of elasticity on demand deposits.
On the basis of the periodic reports produced, the ALM service of the Parent Bank takes appropriate
action to prevent the limits and early warning thresholds from being exceeded.
Exposure to interest rate risk is measured by using gap analysis and sensitivity analysis models on
all those financial instruments, assets and liabilities, not included in the trading book, in accordance
with supervisory regulations.
Sensitivity analysis of economic value includes an estimate of the impacts resulting from the early
repayment of mortgages and long-term loans, regardless of whether early repayment options are
contained in the contracts.
This is accompanied by an estimate of the change in net interest income. The analysis of the impact
on net interest income is over a time horizon of twelve months, with account taken of both the
variation in the profit on demand items (inclusive of viscosity phenomena) and that variation for
items to held to maturity. This analysis also includes an estimate of the impact of
reinvesting/refinancing maturing interest flows.
The 2012 Policy to Manage Financial Risks of the UBI Banca Group defines a system of early warning
thresholds on exposure to interest rate risk based on indicators measured in a scenario of a +/-100
bp change in interest rates. More specifically, a sensitivity early warning threshold is set of 4% of first
and second level available financial resources along with an early warning threshold of a 2% change
in consolidated net interest income. The Management Board has also set an early warning threshold
on sensitivity of €430 million.
At individual level the 2012 Policy to Manage Financial Risks of the UBI Banca Group sets a
sensitivity early warning threshold of 1% of the separate company regulatory capital for maturing
items only. By including on demand items (including the performance model) in the sensitivity
calculation, an early warning threshold is set for which the risk assumed by single entities cannot be
greater than 10% of individual regulatory capital (a threshold set by the Supervisory Authority for
interest rate risk in the banking book).
Both at consolidated and individual level, the amount to compare with the early warning threshold is
the absolute figure for the negative sensitivity resulting from the application of two different interest
rate scenarios (parallel shock of +/-100 b.p. on the yield curve).
Compliance with individual limits is pursued by Group member companies by means of hedging
derivative contracts entered into with the Parent. UBI Banca may then close the position with
counterparties outside the Group, acting in accordance with strategic policies and within the
consolidated limits set by the governing bodies.
B. Fair value hedging
Specific and macro-hedges were performed at Group level using financial derivative instruments, in
order to reduce exposure to adverse changes in fair value due to interest rate risk. More specifically
the following are hedged: fixed interest rate securities in the available for sale portfolio (specific
hedges) loans to ordinary customers on fixed and mixed interest rate schedules (macro-hedges),
mortgages with cap options (macro-hedges) and fixed rate bond and covered bond issues (specific
hedges).
The derivative contracts used are of the interest rate swap and interest rate cap type.
The hedging transactions entered into in 2012 were for the following:
• fixed rate bond issues (specific hedges) of approximately €5.9 billion.
Tests for effectiveness are performed prospectively when a hedge is first implemented and this is
generally followed by monthly retrospective tests.
426

Prospective effectiveness tests are performed by the Finance Area. Retrospective tests are performed
by the Risk Management Area, which keeps official records of effectiveness over time for each hedging
transaction.
The interest rate risk hedging policy pursued in the UBI Group consists mainly of normal hedges on
fixed rate asset items, by taking out derivatives contracts. While on the one hand this activity ensures
the elimination of interest rate risk on differences resulting from different maturities on balance sheet
items (yield curve risk), on the other hand it has led to a proliferation and stratification of derivative
contracts over the years.
In compliance with UBI Group Policy to manage financial risks, it was decided from 2013 to
accompany the ordinary hedging described with natural hedging techniques. Consequently hedges
existing at the end of the year were rationalised by closing the following:
• all asset hedge derivatives (macro-hedges) except for those with interest rate options as the
underlying;
• asset hedge derivatives on available-for-sale financial assets (specific hedges), with maturities
between 1 st January 2016 and 31 st December 2019;
• liability hedge derivatives (bond issues) with maturities after 31 st December 2014.
This action also involved a reduction in the UBI Group’s exposure to interest rate risk.
C. Cash flow hedging
Details of cash flow hedges are reported in the financial statements of the UBI Group in relation to
issues of certificates of deposit denominated in Japanese currency (JPY), which are hedged by
domestic currency swaps (DCS).
427

Quantitative information
1.1 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in: Euro
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL EURO
1. On-balance sheet assets 21,998,638 49,760,016 10,213,436 2,800,046 15,122,510 8,284,609 5,366,926 91,716 113,637,897
1.1 Debt instruments 256,130 595,117 1,353,015 422,743 8,368,258 2,819,111 2,395,375 - 16,209,749
- with early redemption option 989 660 - - 21,955 5,106 - - 28,710
- other 255,141 594,457 1,353,015 422,743 8,346,303 2,814,005 2,395,375 - 16,181,039
1.2 Financing to banks 1,108,541 2,408,422 2,120,356 60,753 34,778 29 - - 5,732,879
1.3 Customer finance 20,633,967 46,756,477 6,740,065 2,316,550 6,719,474 5,465,469 2,971,551 91,716 91,695,269
- current accounts 12,122,408 2,571 4,806 24,683 27,273 490,333 - - 12,672,074
- other financing 8,511,559 46,753,906 6,735,259 2,291,867 6,692,201 4,975,136 2,971,551 91,716 79,023,195
- w ith early redemption option 4,666,712 38,566,899 3,609,099 1,462,873 4,247,242 2,391,057 2,923,679 91,716 57,959,277
- other 3,844,847 8,187,007 3,126,160 828,994 2,444,959 2,584,079 47,872 - 21,063,918
2. On-balance sheet liabilities 48,204,008 32,165,284 5,368,361 7,266,709 18,452,625 3,217,277 510 - 114,674,774
2.1 Due to customers 45,516,830 5,362,947 808,337 822,693 4,215 8,135 - - 52,523,157
- current accounts 43,049,335 - - - - - - - 43,049,335
- other 2,467,495 5,362,947 808,337 822,693 4,215 8,135 - - 9,473,822
- w ith early redemption option 2 63,283 33 193 2,789 4,519 - - 70,819
- other 2,467,493 5,299,664 808,304 822,500 1,426 3,616 - - 9,403,003
2.2 Due to banks 2,307,627 12,525,046 280,163 1,831,657 947,896 - - - 17,892,389
- current accounts 888,577 - - - - - - - 888,577
- other payables 1,419,050 12,525,046 280,163 1,831,657 947,896 - - - 17,003,812
2.3 Debt instruments 379,508 14,224,893 4,279,861 4,612,359 17,500,514 3,209,142 510 - 44,206,787
- with early redemption option 5,642 827,387 379,388 9,808 40,813 80,076 - - 1,343,114
- other 373,866 13,397,506 3,900,473 4,602,551 17,459,701 3,129,066 510 - 42,863,673
2.4 Other liabilities 43 52,398 - - - - - - 52,441
- with early redemption option - - - - - - - - -
- other 43 52,398 - - - - - - 52,441
3 Financial derivatives (170,161) (11,033,236) (5,374,905) 2,345,329 16,044,888 1,735,682 (5,149,150) - (1,601,553)
3.1 With underlying security - - - - (208,101) (335,848) (112,783) - (656,732)
- Options - - - - (208,101) (335,848) (112,783) -
+ Long positions - - 639,135 1,865 34 1,299,666 1,940,700
+ Short positions - - 639,135 209,966 335,848 112,817 1,299,666 2,597,432
- Other - - - - - - - - -
+ Long positions - - - - - - - - -
+ Short positions - - - - - - - - -
3.2 Without underlying security (170,161) (11,033,236) (5,374,905) 2,345,329 16,252,989 2,071,530 (5,036,367) - (944,821)
- Options (452,063) (1,666,992) (224,546) (356,779) 1,828,083 1,090,306 (247,131) - (29,122)
+ Long positions 31,052 2,548,110 68,497 421,890 2,730,406 1,371,725 2,244,189 - 9,415,869
+ Short positions 483,115 4,215,102 293,043 778,669 902,323 281,419 2,491,320 - 9,444,991
- Other 281,902 (9,366,244) (5,150,359) 2,702,108 14,424,906 981,224 (4,789,236) - (915,699)
+ Long positions 284,393 13,042,527 2,930,083 3,367,154 17,856,803 3,098,853 - - 40,579,813
+ Short positions 2,491 22,408,771 8,080,442 665,046 3,431,897 2,117,629 4,789,236 - 41,495,512
4 Other off-balance sheet transactions (49,120) 2,497 175 4,781 13,616 7,314 23,097 - 2,360
+ Long positions 1,704,192 2,497 175 4,781 13,616 7,314 23,097 - 1,755,672
+ Short positions 1,753,312 - - - - - - - 1,753,312
428

1.2 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in: USD
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL USD
1. On-balance sheet assets 108,793 333,525 15,514 87 26,680 - - - 484,599
1.1 Debt instruments 205 10,079 - - - - - - 10,284
- with early redemption option - - - - - - - - -
- other 205 10,079 - - - - - - 10,284
1.2 Financing to banks 9,490 4,866 1,983 31 59 - - - 16,429
1.3 Customer finance 99,098 318,580 13,531 56 26,621 - - - 457,886
- current accounts 19,843 - - - - - - - 19,843
- other financing 79,255 318,580 13,531 56 26,621 - - - 438,043
- w ith early redemption option - - - - - - - - -
- other 79,255 318,580 13,531 56 26,621 - - - 438,043
2. On-balance sheet liabilities 335,995 203,708 14,763 574 379 - - - 555,419
2.1 Due to customers 323,279 67,618 7,322 531 379 - - - 399,129
- current accounts 321,555 621 379 531 379 - - - 323,465
- other 1,724 66,998 6,943 - - - - - 75,665
- w ith early redemption option - 14,503 - - - - - - 14,503
- other 1,724 52,494 6,943 - - - - - 61,161
2.2 Due to banks 11,956 124,051 808 - - - - - 136,815
- current accounts 1,805 - - - - - - - 1,805
- other payables 10,151 124,051 808 - - - - - 135,010
2.3 Debt instruments 760 12,039 6,633 43 - - - - 19,475
- with early redemption option - 4,908 - - - - - - 4,908
- other 760 7,131 6,633 43 - - - - 14,567
2.4 Other liabilities - - - - - - - - -
- with early redemption option - - - - - - - - -
- other - - - - - - -
3 Financial derivatives - 44,338 - - (45,096) - - - (758)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - 44,338 - - (45,096) - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - 44,338 - - (45,096) - - -
+ Long positions - 45,096 45,096
+ Short positions - 758 45,096 45,854
4 Other off-balance sheet transactions (551) 551 - - - - - - -
+ Long positions 689 551 1,240
+ Short positions 1,240 - - - - - - 1,240
429

1.3 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in: CHF
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL CHF
1. On-balance sheet assets 10,221 621,314 16,880 3,092 - - 338 - 651,845
1.1 Debt instruments - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - - - -
1.2 Financing to banks 8,462 - - - - - - - 8,462
1.3 Customer finance 1,759 621,314 16,880 3,092 - - 338 - 643,383
- current accounts 54 - - - - - - - 54
- other financing 1,705 621,314 16,880 3,092 - - 338 - 643,329
- with early redemption option - - - - - - - - -
- other 1,705 621,314 16,880 3,092 - - 338 - 643,329
2. On-balance sheet liabil ities 57,658 107 3,463 104 - 38 - - 61,370
2.1 Due to customers 57,119 - - - - 38 - - 57,157
- current accounts 56,204 - - - - 38 - - 56,242
- other 915 - - - - - - - 915
- with early redemption option - - - - - - - - -
- other 915 - - - - - - - 915
2.2 Due to banks 469 - - - - - - - 469
- current accounts 469 - - - - - - - 469
- other payables - - - - - - - - -
2.3 Debt instruments 70 107 3,463 104 - - - - 3,744
- with early redemption option - - - - - - - - -
- other 70 107 3,463 104 - - - - 3,744
2.4 Other liabilities - - - - - - - - -
- with early redemption option - - - - - - - - -
- other - - - - - - - - -
3 Financial derivatives - 78,546 (2,444) (29,018) (37,765) (9,319) - - -
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - 78,546 (2,444) (29,018) (37,765) (9,319) - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - 78,546 (2,444) (29,018) (37,765) (9,319) - -
+ Long positions - 90,342 90,342
+ Short positions - 11,796 2,444 29,018 37,765 9,319 90,342
4 Other off-bal ance sheet transactions (39,990) - 39,899 - - - - - (91)
+ Long positions - 39,899 39,899
+ Short positions
39,990 - - - - - - 39,990
430

1.4 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in: GBP
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL GBP
1. On-balance sheet assets 15,196 8,657 552 - - - - - 24,405
1.1 Debt instruments 17 380 - - - - - - 397
- w ith early redemption option - - - - - - - - -
- other 17 380 - - - - - - 397
1.2 Financing to banks 2,379 - - - - - - - 2,379
1.3 Customer finance 12,800 8,277 552 - - - - - 21,629
- current accounts 1,652 - - - - - - - 1,652
- other financing 11,148 8,277 552 - - - - - 19,977
- w ith early redemption option - - - - - - - - -
- other 11,148 8,277 552 - - - - - 19,977
2. On-bal ance sheet liabilities 18,904 4,164 86 - - - - - 23,154
2.1 Due to customers 18,884 3,765 - - - - - - 22,649
- current accounts 18,678 - - - - - - - 18,678
- other 206 3,765 - - - - - - 3,971
- w ith early redemption option - 713 - - - - - - 713
- other 206 3,052 - - - - - - 3,258
2.2 Due to banks 19 - - - - - - - 19
- current accounts 19 - - - - - - - 19
- other payables - - - - - - - - -
2.3 Debt instruments 1 399 86 - - - - - 486
- w ith early redemption option - - - - - - - - -
- other 1 399 86 - - - - - 486
2.4 Other liabilities - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - -
3 Financial derivatives (3) 26,957 - - (17,154) (9,803) - - (3)
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security (3) 26,957 - - (17,154) (9,803) - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other (3) 26,957 - - (17,154) (9,803) - -
+ Long positions - 26,957 26,957
+ Short positions 3 17,154 9,803 26,960
4 Other off-balance sheet transactions - - - - - - - - -
+ Long positions -
+ Short positions
- - - - - - -
431

1.5 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in: YEN
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL YEN
1. On-balance sheet assets 2,559 25,599 572 131 - - - - 28,861
1.1 Debt instruments - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - - - -
1.2 Financing to banks 1,834 - - - - - - - 1,834
1.3 Customer finance 725 25,599 572 131 - - - - 27,027
- current accounts - - - - - - - - -
- other financing 725 25,599 572 131 - - - - 27,027
- with early redemption option - - - - - - - - -
- other 725 25,599 572 131 - - - - 27,027
2. On-bal ance sheet liabil ities 4,137 395,942 262,626 158,496 - - - - 821,201
2.1 Due to customers 2,182 - - - - - - - 2,182
- current accounts 2,181 - - - - - - - 2,181
- other 1 - - - - - - - 1
- with early redemption option - - - - - - - - -
- other 1 - - - - - - - 1
2.2 Due to banks - - - - - - - - -
- current accounts - - - - - - - - -
- other payables - - - - - - - - -
2.3 Debt instruments 1,955 395,942 262,626 158,496 - - - - 819,019
- w ith early redemption option - - - - - - - - -
- other 1,955 395,942 262,626 158,496 - - - - 819,019
2.4 Other liabilities - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - - - -
3 Financial derivatives 1,748 396,874 265,194 162,844 - - - - 826,660
3.1 With underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security 1,748 396,874 265,194 162,844 - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other 1,748 396,874 265,194 162,844 - - - -
+ Long positions 1,748 396,874 265,194 162,844 826,660
+ Short positions - -
4 Other off-balance sheet transactions (92) - - 92 - - - - -
+ Long positions - - 92 92
+ Short positions 92 - - - - - - - 92
432

1.6 Banking portfolio: distribution of the financial assets and liabilities by residual life (repricing date). Denominated in:
other currencies
On demand
Up to 3 months
3 months to 6
months
6 months to 1
year
1 year to 5 years
5 years to 10
years
Over ten years
Indeterminate
maturity
TOTAL OTHER
CURRENCIES
1. On-balance sheet assets 40,333 103,807 27,264 15,096 22 809 - - 187,331
1.1 Debt instruments - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - - - -
1.2 Financing to banks 18,287 2,740 - - - - - - 21,027
1.3 Customer finance 22,046 101,067 27,264 15,096 22 809 - - 166,304
- current accounts 2,254 - - - - - - - 2,254
- other financing 19,792 101,067 27,264 15,096 22 809 - - 164,050
- w ith early redemption option 142 11,205 36 4 22 - - - 11,409
- other 19,650 89,862 27,228 15,092 - 809 - - 152,641
2. On-balance sheet liabilities 19,505 10,283 1,259 10 - - - - 31,057
2.1 Due to customers 9,515 4,831 1,259 - - - - - 15,605
- current accounts 9,240 - - - - - - - 9,240
- other 275 4,831 1,259 - - - - - 6,365
- w ith early redemption option - - - - - - - - -
- other 275 4,831 1,259 - - - - - 6,365
2.2 Due to banks 9,990 5,452 - - - - - - 15,442
- current accounts 446 - - - - - - - 446
- other payables 9,544 5,452 - - - - - - 14,996
2.3 Debt instruments - - - 10 - - - - 10
- w ith early redemption option - - - - - - - - -
- other - - - 10 - - - - 10
2.4 Other liabilities - - - - - - - - -
- w ith early redemption option - - - - - - - - -
- other - - - - - - -
3 Financial derivatives - - - - (2,317) - - 2,317 -
3.1 With underlying security - - - - (2,317) - - 2,317 -
- Options - - - - (2,317) - - 2,317
+ Long positions - 2,317 2,317
+ Short positions - 2,317 2,317
- Other - - - - - - - -
+ Long positions - -
+ Short positions - -
3.2 Without underlying security - - - - - - - - -
- Options - - - - - - - -
+ Long positions - -
+ Short positions - -
- Other - - - - - - - -
+ Long positions - - -
+ Short positions - - - -
4 Other off-balance sheet transactions 1,277 (1,277) - - - - - - -
+ Long positions 1,725 448 2,173
+ Short positions 448 1,725 - - - - - - 2,173
YEAH!!!
433

2. Banking portfolio: internal models and other methods of sensitivity analysis.
The exposure of the Group to interest rate risk, measured in terms of core sensitivity in a scenario of
an increase in interest rates of +100 bp, on items as at 31 st December 2012, amounted to
approximately +€46.28 million (-€243.78 million as at 31 st December 2011).
The relevant scenario for internal monitoring is that associated with a negative shock of -100 bp on
the yield curve. In this case the exposure, net of early mortgage repayments and of the AFS portfolio
for which specific limits are set, amounted to -€186.55 million compared with an early warning
threshold on that indicator of -€430 million.
The total level of exposure includes an estimate, consistent with the provisions of the Financial Risks
Policy, of the impact of the early repayment of loans (approximately +€163.09 million in terms of
sensitivity) and also the effect of structural ALM action taken using derivatives, even if subject to a
capital requirement for market risk, with the objective of acting on the individual sensitivity of Group
companies.
In detail, the core sensitivity originated by the network banks amounted to approximately -€353.21
million, while approximately +€79.46 million is attributable to the activities of the product
companies. The Parent contributes a total of approximately +€87.21 million, including +€3.77 million
from structural and sensitivity action relating to Group member companies. In fact UBI Banca
operates as the sole counterparty for Group member companies in hedging derivatives contracts and,
if necessary, it then closes the positions on the market on the basis of positioning with respect to the
limits set by the Financial Risks Policy and expected scenarios for future interest rate trends.
The table below reports the exposure, measured in terms of economic value sensitivity in a scenario
of an increase in reference interest rates of +200 bp, recorded in 2012, given as a percentage of the
tier one capital and the regulatory capital as at 31 st December 2012.
Risk indicators - average amounts 2012 2011
parallel shift of +200 bp
sensitivity/tier one capital 2.50% 6.90%
sensitivity/regulatory capital 1.74% 4.65%
Risk indicators - end of period values 31/12/2012 31/12/2011
parallel shift of +200 bp
sensitivity/tier one capital 1.33% 5.66%
sensitivity/regulatory capital 1.74% 3.81%
Sensitivity analysis of net interest income focuses on changes in profits resulting from a parallel
shock on the yield curve measured over a time horizon of 12 months. The overall determination of
exposure contributes to the analysis of the viscosity of on-demand items. The UBI Group exposure to
interest rate risk, estimated in terms of an impact on net interest income of an increase in the
reference interest rates of 100 bp, amounted to -€9.79 million as at 31 st December 2012.
The impact on that income shows the effects of changes in interest rates on the portfolio monitored,
excluding hypotheses of future changes in the mix of assets and liabilities. These factors mean that
the indicator cannot be used to assess the Bank’s future strategy.
434

2.3 Currency risk
Qualitative information
A. General aspects, management and measurement of currency risk
Currency risk is calculated on the basis of mismatches existing between assets and liabilities in
foreign currency (spot and forward), relating to each currency other than euro. The main sources of
risk are as follows:
• lending and funding in foreign currency with corporate and retail customers;
• holding financial instruments denominated in foreign currency;
• holding units in O.I.C.R. (collective investment instruments) for which, even if they are
denominated in euro, it is not possible to determine the composition in foreign currency of the
underlying investments and/or for which the maximum limit on investment in foreign
currency is not known and binding;
• dealing in foreign bank notes.
Foreign currency risk in the UBI Group regards banking book exposures originated by the network
banks and/or by the product companies – resulting from their commercial activities – and their
positions relating to trading in foreign currency.
Trading on foreign exchange markets is performed by the Group treasury function which operates by
using instruments such as forward trades, forex swaps, domestic currency swaps and currency
options, thereby optimising risks resulting from Group positions in foreign currency.
Exposure to currency risk is calculated starting from the net foreign currency position using a
method based on supervisory regulations. Equity investments and tangible assets are not included in
the calculation of the net foreign currency position.
B. Currency risk hedging
Foreign currency risk arising from exposures in the banking book is mitigated by systematically
hedging them with funding and lending transactions in the same currency as the original
transaction. This activity to contain risk is also performed by the product companies for their own
banking book positions. The remaining exposures and trading portfolio exposures are fully and
precisely hedged with spot forex positions.
For some network banks in the Group (Banca Popolare di Bergamo S.p.A. and Banca Popolare di
Ancona S.p.A), issues of certificates of deposit in foreign Japanese currency (JPY) are hedged by
simultaneously entering into DCS contracts with customers, as already mentioned in the sub-section
on interest rate risk. The accounting treatment employed for these transactions is that for cash flow
hedging.
435

Quantitative information
1. Distribution of assets, liabilities and derivatives by foreign currency in which they are
denominated
Items
Currencies
US Dol lars UK sterling Yen Canadian Doll ar Sw iss Francs Other currencies
A. Financial assets 739,023 67,889 30,812 11,088 865,230 201,349
A.1 Debt instruments 41,176 30,361 - - 5,705 -
A.2 Equity instruments 888 - - - 10 -
A.3 Financing to banks 45,602 12,565 2,065 5,322 2,561 38,294
A.4 Financing to customers 638,447 24,963 28,747 5,766 856,954 163,055
A.5 Other financial assets 12,910 - - - - -
B. Other assets 7,503 3,972 379 649 7,871 1,593
C. Financial l iabilities 798,713 63,607 823,855 11,095 249,990 55,756
C.1 Due to banks 349,663 31,865 2,549 60 31,318 29,600
C.2 Due to customers 429,575 31,255 2,287 11,035 210,894 26,147
C.3 Debt instruments 19,475 487 819,019 - 7,778 9
C.4 Other financial liabilities - - - - - -
D. Other liabilities 1,192 762 - - 3,746 933
E. Financial Derivatives (138,106) (35,011) 787,806 (79) (647,689) (152,949)
E.1 Options 3,839 - (3,573) - - -
E.1.1 Long positions 407,747 26,529 10,708 7,065 5,586 7,919
E.1.2 Short positions 403,908 26,529 14,281 7,065 5,586 7,919
E.2 Other derivatives (141,945) (35,011) 791,379 (79) (647,689) (152,949)
E.2.1 Long positions 668,087 93,837 986,615 22,327 161,327 97,521
E.2.2 Short positions 810,032 128,848 195,236 22,406 809,016 250,470
Total assets 1,822,360 192,227 1,028,514 41,129 1,040,014 308,382
Total l iabilities 2,013,845 219,746 1,033,372 40,566 1,068,338 315,078
Bal ance (+/-) (191,485) (27,519) (4,858) 563 (28,324) (6,696)
2. Internal models and other methods of sensitivity analysis.
The absorption of capital for currency risk as at 31 st December 2012 was nil, given a general net open
position in foreign currency of less than two per cent of supervisory capital.
Exposure to currency risk benefited during the year from a reduction in investments in hedge funds.
436

2.4 Derivative financial instruments
A. Financial derivatives
A.1 Supervisory trading portfolio: end of period and average notional amounts
Underlying assets/type of derivative
31.12.2012 31.12.2011
Over the counter Central counterparties Over the counter Central counterparties
1. Debt instruments and interest rates 19,674,568 693,493 28,658,326 623,007
a) Options 5,638,399 7,765,102 -
b) Swaps 14,036,169 20,893,224 -
c) Forwards - -
d) Futures 693,493 - 623,007
e) Other - -
2. Equity instruments and share indices 54,913 54,704 59,681 1,440
a) Options 54,913 42,601 59,681 100
b) Swaps - -
c) Forwards - -
d) Futures 12,103 - 1,340
e) Other - -
3. Currencies and gold 4,799,924 - 5,342,657 -
a) Options 1,926,580 2,030,499 -
b) Swaps - -
c) Forwards 2,873,344 3,312,158 -
d) Futures - -
e) Other - -
4. Commodities 29,908 5,785 -
5. Other underlying 1,076 - - -
Total 24,560,389 748,197 34,066,449 624,447
Average amounts 29,313,419 686,322 41,363,171 1,640,207
437

A.2 Banking portfolio: notional, end of period and average amounts
A.2.1 For hedging
Underlying assets/type of derivative
31.12.2012 31.12.2011
Over the counter Central counterparties Over the counter Central counterparties
1. Debt instruments and interest rates 46,637,562 - 47,902,850 -
a) Options 5,896,021 5,230,386 -
b) Sw aps 40,741,541 42,672,464 -
c) Forw ards - -
d) Futures - -
e) Other - -
2. Equity instruments and share indices - - - -
a) Options - -
b) Sw aps - -
c) Forw ards - -
d) Futures - -
e) Other - -
3. Currencies and gold 826,659 - 1,128,625 -
a) Options - -
b) Sw aps 826,659 1,128,625 -
c) Forw ards - -
d) Futures - -
e) Other - -
4. Commodities - -
5. Other underlying - -
Total 47,464,221 - 49,031,475 -
Average amounts 48,247,799 46,398,792 -
A.2.2 Other derivatives
Underlying assets/type of derivative
31.12.2012 31.12.2011
Over the counter Central counterparties Over the counter Central counterparties
1. Debt instruments and interest rates 97,194 - 126,494 -
a) Options 9,094 19,094 -
b) Sw aps - -
c) Forw ards - -
d) Futures - -
e) Other 88,100 107,400 -
2. Equity instruments and share indices 1,812,715 - 2,167,983 -
a) Options 1,812,715 2,167,983 -
b) Sw aps - -
c) Forw ards - -
d) Futures - -
e) Other - -
3. Currencies and gold - - - -
a) Options - -
b) Sw aps - -
c) Forw ards - -
d) Futures - -
e) Other - -
4. Commodities - -
5. Other underlying - -
Total 1,909,909 - 2,294,477 -
Average amounts 2,102,193 5,615,810 -
438

A.3 Financial derivatives: gross positive fair value – by type of product
Positive fair value
Portfolio/type of derivative
31.12.2012 31.12.2011
Over the counter Central counterparties Over the counter Central counterparties
A. Supervisory trading portfolio 585,406 1,745 595,567 220
a) Options 34,683 1,676 61,106 35
b) Interest rate sw aps 523,805 489,384 -
c) Cross currency sw aps 23 -
d) Equity sw aps - -
e) Forw ards 26,163 44,024 -
f) Futures 69 - 185
f) Other 755 1,030 -
B. Banking portfolio - for hedging 1,478,322 - 1,090,498 -
a) Options - -
b) Interest rate sw aps 1,478,322 1,010,954 -
c) Cross currency sw aps -
d) Equity sw aps -
e) Forw ards - -
f) Futures - -
f) Other 79,544 -
C. Banking portfolio - other derivatives 673 - 1,199 -
a) Options 673 1,199 -
b) Interest rate sw aps - -
c) Cross currency sw aps - -
d) Equity sw aps - -
e) Forw ards - -
f) Futures - -
f) Other - -
Total 2,064,401 1,745 1,687,264 220
A.4 Financial derivatives: gross negative fair value – by type of product
Negative fair value
Portfolio/type of derivative
31.12.2012 31.12.2011
Over the counter Central counterparties Over the counter Central counterparties
A. Supervisory trading portfolio 609,206 69 624,066 187
a) Options 29,890 49,123 -
b) Interest rate sw aps 552,987 522,968 -
c) Cross currency sw aps 47 -
d) Equity sw aps - -
e) Forw ards 25,695 50,889 -
f) Futures 69 - 187
f) Other 634 1,039
B. Banking portfolio - for hedging 2,234,988 - 1,739,685 -
a) Options - -
b) Interest rate sw aps 2,129,499 1,739,328 -
c) Cross currency sw aps - -
d) Equity sw aps - -
e) Forw ards - -
f) Futures - -
f) Other 105,489 357 -
C. Banking portfolio - other derivatives 729 - 1,413 106
a) Options 634 1,413 -
b) Interest rate sw aps - -
c) Cross currency sw aps - -
d) Equity sw aps - -
e) Forw ards - -
f) Futures - -
f) Other 95 - 106
Total 2,844,923 69 2,365,164 293
439

A.5 OTC financial derivatives: supervisory trading portfolio – notional amounts, gross positive and negative fair
values by counterparty – contracts not covered by clearing agreements
Contracts not covered by clearing
agreements
Governments and
central banks
Other public
authorities
Banks
Financial companies
Insurance companies
Non financial
companies
Other
1) Debt instruments and interest rates
- notional amount - 14,993 102,702 48,077 - 5,253,626 801,508
- positive fair value - - - 1,919 - 412,113 9,683
- negative fair value - 4 471 1 - 898 316
- future exposure - 4 50 162 - 16,943 695
2) Equity instruments and share indices
- notional amount - - - - - - 54,913
- positive fair value - - - - - - -
- negative fair value - - - - - - -
- future exposure - - - - - - 649
3) Currencies and gold
- notional amount - - 1,703,746 1,035,152 315 1,068,529 17,444
- positive fair value - - 21,780 3,358 - 7,793 116
- negative fair value - - 1,804 22,999 13 6,445 118
- future exposure - - 17,037 10,321 3 7,084 174
4) Other securities
- notional amount - - - - - 16,033 -
- positive fair value - - - - - 1,436 -
- negative fair value - - - - - 215 -
- future exposure - - - - - 1,672 -
440

A.6 OTC financial derivatives: supervisory trading portfolio – notional amounts, gross positive and negative fair
values by counterparty – contracts covered by clearing agreements
Contracts not covered by clearing
agreements
Governments and
central banks
Other public
authorities
Banks
Financial companies
Insurance companies
Non financial
companies
Other
1) Debt instruments and interest rates
- notional amount - - 13,003,874 449,788 - - -
- positive fair value - - 105,672 8,748 - - -
- negative fair value - - 541,804 21,372 - - -
2) Equity instruments and share indices
- notional amount - - - - - - -
- positive fair value - - - - - - -
- negative fair value - - - - - - -
3) Currencies and gold
- notional amount - - 841,236 133,502 - - -
- positive fair value - - 10,569 1,845 - - -
- negative fair value - - 10,159 2,236 - - -
4) Other securities
- notional amount - - 14,951 - - - -
- positive fair value - - 374 - - - -
- negative fair value - - 351 - - - -
441

A.7 OTC financial derivatives: banking portfolio – notional amounts, gross positive and negative fair values by
counterparty – contracts not covered by clearing agreements
Contracts not covered by clearing
agreements
Governments and
central banks
Other public
authorities
Banks
Financial companies
Insurance companies
Non financial
companies
Other
1) Debt instruments and interest rates
- notional amount - - 73,995 163,691 4,050 3,500 11,747
- positive fair value - - 7,677 - - - -
- negative fair value - - 331 4,059 - - -
- future exposure - - 471 329 - - -
2) Equity instruments and share indices
- notional amount - - 649,397 137,909 682,821 256,833 46,496
- positive fair value - - 75 - - - -
- negative fair value - - - - - - 36
- future exposure - - 38,537 13,789 33,854 23,956 451
3) Currencies and gold
- notional amount - 196 - 17,467 - 22,945 786,051
- positive fair value - - - - - - -
- negative fair value - 4 - 2,676 - 2,863 99,946
- future exposure - 2 - 175 - 232 7,971
4) Other securities
- notional amount - - - - - - -
- positive fair value - - - - - - -
- negative fair value - - - - - - -
- future exposure - - - - - - -
442

A.8 OTC financial derivatives: banking portfolio – notional amounts, gross positive and negative fair values by
counterparty – contracts covered by clearing agreements
Contracts not covered by clearing
agreements
Governments and
central banks
Other public
authorities
Banks
Financial companies
Insurance companies
Non financial
companies
Other
1) Debt instruments and interest rates
- notional amount - - 43,638,368 2,839,405 - - -
- positive fair value - - 1,430,959 39,687 - - -
- negative fair value - - 1,919,344 205,860 - - -
2) Equity instruments and share indices
- notional amount - - 39,259 - - - -
- positive fair value - - 598 - - - -
- negative fair value - - 598 - - - -
3) Currencies and gold
- notional amount - - - - - - -
- positive fair value - - - - - - -
- negative fair value - - - - - - -
4) Other securities
- notional amount - - - - - - -
- positive fair value - - - - - - -
- negative fair value - - - - - - -
443

A.9 Residual maturity of OTC financial derivatives: notional amounts
Underlying asset/Residual maturity Up to 1 year 1 year to 5 years More than 5 years Total
A. Supervisory trading portfolio 10,821,848 7,869,126 5,869,415 24,560,389
A.1 Financial derivatives on debt instruments and interest rates 6,057,606 7,748,623 5,868,339 19,674,568
A.2 Financial derivatives on equity instruments and share indices - 54,913 - 54,913
A.3 Financial derivatives on exchange rates and gold 4,735,826 64,098 - 4,799,924
A.4 Financial derivatives on other securities 28,416 1,492 1,076 30,984
B. Banking portfolio 11,049,753 25,693,470 12,630,907 49,374,130
B.1 Financial derivatives on debt instruments and interest rates 9,502,266 25,238,383 11,994,107 46,734,756
B.2 Financial derivatives on equities and share indices 720,828 455,087 636,800 1,812,715
B.3 Financial derivatives on exchange rates and gold 826,659 - - 826,659
B.4 Financial Derivatives on other securities - - - -
Total 31.12.2012 21,871,601 33,562,596 18,500,322 73,934,519
Total 31.12.2011 27,970,227 36,984,785 20,437,389 85,392,401
A.10 OTC financial derivatives: counterparty risk/financial risk – Internal models
The UBI Banca Group does not use internal models to measure counterparty risk and financial risk for OTC financial derivatives.
444

B. Credit derivatives
B.1 Credit derivatives: end of period and average notional amounts
No items of this type exist in the UBI Banca Group.
B.2 OTC credit derivatives: gross positive fair value – by type of product
No items of this type exist in the UBI Banca Group.
B.3 OTC credit derivatives: gross negative fair value – by type of product
No items of this type exist in the UBI Banca Group.
B.4 OTC credit derivatives: gross fair value (positive and negative) by counterparty –
contracts not covered by clearing agreements
No items of this type exist in the UBI Banca Group.
B.5 OTC credit derivatives: gross fair value (positive and negative) by counterparty –
contracts covered by clearing agreements
No items of this type exist in the UBI Banca Group.
B.6 Residual maturity of credit derivatives: notional amounts
No items of this type exist in the UBI Banca Group.
B.7 Credit derivatives: counterparty risk/financial risk – internal models
The UBI Banca Group does not use internal models to measure counterparty and financial risk for
credit derivatives.
C. Financial and credit derivatives
C.1 OTC financial and credit derivatives: net fair value and future exposure by
counterparty
No OTC financial and credit derivatives with contracts covered by clearing agreements were
recognised.
445

3 BANKING GROUP - LIQUIDITY RISK
Qualitative information
A. General aspects, management and measurement of liquidity risk
Liquidity risk is defined in the UBI Group as the risk of the failure to meet payment obligations,
which can be caused either by an inability to raise funds, by raising them at higher than market
costs (funding liquidity risk), or by the presence of restrictions on the ability to sell assets (market
liquidity risk) with losses incurred on capital account.
Structural liquidity risk is defined as the risk resulting from a mismatch between the sources of
funding and lending.
The primary objective of the liquidity risk management system is to enable the Group to meet its
payment obligations and to raise additional funding at a minimum cost and without prejudice to
potential future income.
The general principles on which liquidity management within the Group is based are as follows:
• the adoption of a centralised management system run by Group Treasury;
• diversification of the sources of funding and limits on exposure to institutional counterparties;
• protection of Group capital in liquidity crisis situations;
• a proper financial balance between assets and liabilities;
• a proper level of eligible and/or liquid assets, sufficient to meet liquidity requirements even under
stress conditions.
The reference framework for the measurement, monitoring and management of exposure to liquidity
risk is defined annually as part of the Policy to Manage Financial Risks of the UBI Banca Group and
the relative regulations to implement it and the document setting operational limits approved by the
corporate governance bodies.
Corporate risk policies are supplemented by a contingency funding plan (CFP), an emergency plan for
liquidity management, the main aim of which is to protect the Bank’s assets in situations of liquidity
drainage, by putting in place crisis management strategies and procedures to find sources of funding
in cases of emergency.
These documents set out rules for the pursuit and maintenance of an adequate degree of
diversification in the sources of funding and a proper structural balance between the sources and
uses of funds for the network banks and the product companies, through the pursuit of co-ordinated
and efficient funding and lending policies.
The following are responsible for liquidity risk management:
• the units that report to the Chief Financial Officer (1 st level management), which monitor liquidity
daily and manage risk on the basis of defined limits;
• the Risk Management Area (2 nd level management), responsible for periodically verifying that limits
are observed.
The system for the management of liquidity risk defined by the Policy to Manage Financial Risks of
the UBI Banca Group and supplemented by the Contingency Funding Plan is based on a system of
early warning thresholds and limits consistent with the general principles on which liquidity
management within the Group is based.
446

More specifically, liquidity risk is managed by means of the measurement, monitoring and
management of the expected liquidity requirement, using a net liquidity balance model of analysis at
consolidated level, supplemented with stress tests designed to assess the Group’s ability to withstand
crisis scenarios characterised by an increasing level of severity.
The net liquidity balance is obtained from the daily liquidity ladder by comparing expected cash flow
projections with counterbalancing capacity over a time horizon of up to three months. The cumulative
sum of expected cash flows and of the counterbalancing capacity, for each time bucket, quantifies
liquidity risk measured under different stress scenarios. The UBI Banca Group reports that indicator
to the Bank of Italy on a daily basis, following standard procedures set by that supervisory authority.
The liquidity position is supplemented, on request by the Bank of Italy, on a weekly basis with the
following information:
• the principal maturities, forecast over a time horizon of twelve months, both on the institutional
and the retail market, with details according to the type of funding instrument (e.g. bond issues,
repurchase agreements, commercial paper);
• details of assets available for refinancing transactions with the central bank and of liquid assets;
• the main providers of funds on the interbank market.
The objectives of stress tests are to measure the vulnerability of the Group to exceptional but
plausible events and they provide a better assessment of exposure to liquidity risk, the systems for
mitigating and monitoring them and the length of the survival period under hypotheses of adverse
scenarios. The following risk factors that can alternatively affect the cumulative imbalance of cash
inflows and outflows or the liquidity reserve are considered in the definition of stress scenarios,
divided into base stress and internal scenarios:
• wholesale funding risk: shortage of unsecured and secured funding on the institutional market;
• retail funding risk: volatility of on demand liabilities relating to ordinary customers and
redemptions of own securities;
• off-balance sheet liquidity risk: use of margins available on irrevocable credit lines granted;
• market liquidity risk: fall in the value of securities which constitute a liquidity reserve and an
increase in the margins requested for positions in financial derivative instruments.
Monitoring the level of cover to meet expected liquidity requirements through an adequate reserve of
liquidity is accompanied by daily monitoring of exposure on the interbank market.
A “contingency funding plan” is triggered if the preceding limits and early warning thresholds are
exceeded.
In compliance with supervisory provisions, the system for the management of liquidity risk employed
by the Group also involves monitoring sources of funding both at consolidated and individual
company level, by using a system of indicators. In this respect specific thresholds are set both for the
maximum level of funding from institutional markets, considered more volatile under stress
conditions, and the minimum levels of cover for lending activity with funding from ordinary
customers or with medium to long-term funding from institutional customers.
Finally the management of structural balance is performed by using models which measure the
degree of stability of liabilities and the degree of liquidity of assets in order to mitigate risk associated
with the transformation of maturities within a tolerance threshold considered acceptable by the
Group. The model employed by the Group to monitor structural balance is designed to incorporate
the general lines currently being defined in the process to revise supervisory regulations for liquidity
risk with specific reference to medium to long-term indicators. Measurement of the degree of stability
447

of liabilities and the degree of liquidity of assets is based principally on criteria of residual life and on
the classification of the counterparties which contribute to the definition of the weightings of assets
and liabilities.
Further information on Group activities on the interbank market is given in the Management Report
which may be consulted.
448

Quantitative information
1.1 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in euro
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL EURO
On-balance sheet assets 20,723,146 946,420 1,280,148 3,940,531 4,165,841 4,206,708 9,218,274 34,010,163 38,330,842 1,685,834 118,507,907
A.1 Government securities 1,467 69 18,162 - 70,187 485,012 3,327,083 8,616,800 5,333,006 49 17,851,835
A.2 Other debt instruments 388,105 4 50 935,528 46,035 26,085 109,172 463,915 387,059 59,332 2,415,285
A.3 Units in OICR
(collective investment instruments)
204,137 - - - - - - - - - 204,137
A.4 Financing 20,129,437 946,347 1,261,936 3,005,003 4,049,619 3,695,611 5,782,019 24,929,448 32,610,777 1,626,453 98,036,650
- Banks 2,805,749 9,248 231,254 769,225 55,331 65,877 113,914 899,358 9,541 851,251 5,810,748
- Customers 17,323,688 937,099 1,030,682 2,235,778 3,994,288 3,629,734 5,668,105 24,030,090 32,601,236 775,202 92,225,902
On-balance sheet liabilities 48,459,504 3,960,161 392,393 2,276,113 5,196,160 2,747,610 7,958,656 37,100,321 5,322,453 198,392 113,611,763
B.1 Deposits e current account overdrafts 46,686,041 383,844 69,515 160,611 962,875 580,126 639,277 5,207 3,578 - 49,491,074
- Banks 2,122,269 5,231 30,008 127 1,135 - 91 4,007 - - 2,162,868
- Customers 44,563,772 378,613 39,507 160,484 961,740 580,126 639,186 1,200 3,578 - 47,328,206
B.2 Debt instruments 39,115 40,242 183,971 2,029,048 3,580,331 1,823,926 6,999,443 24,339,769 5,227,077 184,674 44,447,596
B.3 Other liabilities 1,734,348 3,536,075 138,907 86,454 652,954 343,558 319,936 12,755,345 91,798 13,718 19,673,093
Off-balance sheet transactions (1,533,807) 91,218 28,289 238,361 465,852 727,245 (603,897) 368,400 (66,619) 865,558 580,600
C.1 Financial derivatives with
exchange of principal
- 48,463 15,981 187,043 415,071 332,841 (1,243,910) (190,915) (448,380) 646,908 (236,898)
- Long positions - 368,064 29,910 1,136,743 516,308 527,450 142,929 45,825 286 674,455 3,441,970
- Short positions - 319,601 13,929 949,700 101,237 194,609 1,386,839 236,740 448,666 27,547 3,678,868
C.2 Financial derivatives without
exchange of principal
(22,088) 24,295 24 (4,003) (38,011) 71,195 63,854 - - - 95,266
- Long positions 525,260 26,757 481 2,917 85,214 151,462 299,180 - - - 1,091,271
- Short positions 547,348 2,462 457 6,920 123,225 80,267 235,326 - - - 996,005
C.3 Deposits and financing to be received - - - - - - - - - - -
- Long positions - - - - - - - - - -
- Short positions - - - - - - - - - - -
C.4 Irrevocable commitments to
disburse funds
(1,522,653) 18,456 11,706 31,206 65,125 318,828 563,638 453,127 287,081 197,454 423,968
- Long positions 434,343 18,456 11,706 31,206 65,125 318,828 563,638 453,127 287,081 205,897 2,389,407
- Short positions 1,956,996 - - - - - - - - 8,443 1,965,439
C.5 Financial guarantees issued 10,934 4 578 24,115 23,667 4,381 12,521 106,188 94,680 21,196 298,264
C.6 Financial guarantees received - - - - - - - - - - -
C.7 Credit derivatives w ith
exchange of principal
- - - - - - - - - - -
- Long positions - - - - - - - - - -
- Short positions - - - - - - - - - -
C.8 Credit derivatives w ithout
exchange of principal
- - - - - - - - - - -
- Long positions - - - - - - - - - - -
- Short positions - - - - - - - - - - -
449

1.2 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in USD
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL USD
On-balance sheet assets 133,113 31,182 30,627 133,374 147,419 20,564 21,323 146,989 78,064 27 742,682
A.1 Government securities 80 156 312 144 27 719
A.2 Other debt instruments 2 737 3 36,265 153 37,160
A.3 Units in OICR
(collective investment instruments)
12,910 12,910
A.4 Financing 120,203 31,182 30,627 133,372 146,682 20,481 21,167 110,412 77,767 - 691,893
- Banks 20,084 2,356 9,229 3,627 2,928 5,040 2,305 59 45,628
- Customers 100,119 28,826 21,398 129,745 143,754 15,441 18,862 110,353 77,767 646,265
On-balance sheet liabilities 348,358 145,281 6,623 29,660 28,697 20,673 2,017 5,287 - - 586,596
B.1 Deposits e current account overdrafts 335,820 145,153 6,196 29,383 21,503 13,197 1,974 379 - - 553,605
- Banks 1,881 120,892 2,274 635 125,682
- Customers 333,939 24,261 3,922 29,383 21,503 12,562 1,974 379 427,923
B.2 Debt instruments 748 128 64 277 6,669 6,664 43 4,908 19,501
B.3 Other liabilities 11,790 - 363 - 525 812 - - 13,490
Off-balance sheet transactions 591 1,640 19,650 2,615 (10,881) (152,774) 8,539 14,106 - - (116,514)
C.1 Financial derivatives with
- 1,640 19,650 2,595 (10,800) (156,903) 6,696 4,431 - - (132,691)
exchange of principal
- Long positions 51,836 38,563 603,351 89,954 112,133 136,818 16,402 1,049,057
- Short positions 50,196 18,913 600,756 100,754 269,036 130,122 11,971 1,181,748
C.2 Financial derivatives without
exchange of principal
(468) - - - (1,041) 57 (979) - - - (2,431)
- Long positions 13,817 57 63 13,937
- Short positions 14,285 1,041 1,042 16,368
C.3 Deposits and financing to be received - - - - - - - - - - -
- Long positions - - - - - - - - - - -
- Short positions - - - - - - - - - - -
C.4 Irrevocable commitments to
disburse funds
(551) - - 20 531 3,760 1,746 4,448 - - 9,954
- Long positions 689 20 531 3,760 1,746 4,448 11,194
- Short positions 1,240 1,240
C.5 Financial guarantees issued 1,610 429 312 1,076 5,227 8,654
C.6 Financial guarantees received
C.7 Credit derivatives w ith
exchange of principal
- Long positions
- Short positions
C.8 Credit derivatives w ithout
exchange of principal
- Long positions
- Short positions
450

1.3 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in CHF
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL CHF
On-bal ance sheet assets 64,553 26,016 9,669 8,527 34,149 7,648 11,726 90,262 652,024 - 904,574
A.1 Government securities -
A.2 Other debt instruments 1,192 830 915 1,256 1,248 5,441
A.3 Units in OICR
(collective investment instruments)
-
A.4 Financing 64,553 24,824 9,669 7,697 33,234 7,648 11,726 89,006 650,776 - 899,133
- Banks 37,124 37,124
- Customers 27,429 24,824 9,669 7,697 33,234 7,648 11,726 89,006 650,776 862,009
On-bal ance sheet liabilities 216,988 102 103 251 1,100 3,983 1,463 1,370 394 - 225,754
B.1 Deposits e current account overdrafts 215,968 - - 20 766 119 150 - 38 - 217,061
- Banks 7,072 10 7,082
- Customers 208,896 20 756 119 150 38 209,979
B.2 Debt instruments 105 102 103 231 334 3,864 1,313 1,370 356 7,778
B.3 Other liabilities 915 915
Off-balance sheet transactions (40) (16,023) (163) (73,032) (399,453) (1,158,283) (1,850) - - - (1,648,844)
C.1 Financial derivatives w ith
exchange of principal
- (16,023) (165) (73,032) (399,345) (1,158,377) (455) - - - (1,647,397)
- Long positions 159,287 2,616 3,171 1,158 384 991 167,607
- Short positions 175,310 165 75,648 402,516 1,159,535 839 991 1,815,004
C.2 Financial derivatives w ithout
- - 2 - (108) (85) (1,395) - - - (1,586)
exchange of principal
- Long positions 2 19 28 159 208
- Short positions 127 113 1,554 1,794
C.3 Deposits and financing to be received - - - - - - - - - - -
- Long positions -
- Short positions -
C.4 Irrevocable commitments to
disburse funds
(40) - - - - 179 - - - - 139
- Long positions 179 179
- Short positions 40 40
C.5 Financial guarantees issued - - - - - - - - - -
C.6 Financial guarantees received
C.7 Credit derivatives w ith
exchange of principal
- Long positions
- Short positions
C.8 Credit derivatives w ithout
exchange of principal
- Long positions
- Short positions
451

1.4 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in GBP
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL GBP
On-balance sheet assets 15,568 1,505 3,719 3,771 3,497 1,362 7,843 14,172 13,478 - 64,915
A.1 Government securities -
A.2 Other debt instruments 15 1,006 199 13,479 13,478 28,177
A.3 Units in OICR
-
(collective investment instruments)
A.4 Financing 15,553 1,505 3,719 3,771 2,491 1,163 7,843 693 - - 36,738
- Banks 3,323 3,697 5,546 12,566
- Customers 12,230 1,505 22 3,771 2,491 1,163 2,297 693 24,172
On-balance sheet liabilities 27,476 713 7 - 3,452 150 - - - - 31,798
B.1 Deposits e current account overdrafts 27,298 713 7 - 3,052 64 - - - - 31,134
- Banks 9 47 56
- Customers 27,289 713 7 3,052 17 31,078
B.2 Debt instruments 400 86 486
B.3 Other liabilities 178 178
Off-bal ance sheet transactions - (19,978) (61) 2,384 50 (17,851) (888) 55 - - (36,289)
C.1 Financial derivatives w ith
exchange of principal
- (19,978) (61) 2,384 31 (17,895) - - - - (35,519)
- Long positions 21,544 674 75,846 7,781 4,848 3,586 114,279
- Short positions 41,522 735 73,462 7,750 22,743 3,586 149,798
C.2 Financial derivatives w ithout
exchange of principal
- - - - 5 44 (888) - - - (839)
- Long positions 109 75 44 101 329
- Short positions 109 70 989 1,168
C.3 Deposits and financing to be received - - - - - - - - - - -
- Long positions - - - - - - - - - - -
- Short positions - - - - - - - - - - -
C.4 Irrevocable commitments to disburse
funds
- - - - 7 - - - - - 7
- Long positions - - - - 7 - - - - - 7
- Short positions - - - - - - - - - - -
C.5 Financial guarantees issued 7 55 62
C.6 Financial guarantees received
C.7 Credit derivatives w ith exchange of
principal
- Long positions
- Short positions
C.8 Credit derivatives w ithout
exchange of principal
- Long positions
- Short positions
452

1.5 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in YEN
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL YEN
On-bal ance sheet assets 2,228 10,737 4,647 5,590 6,626 584 135 - - - 30,547
A.1 Government securities - - - - - - - - - - -
A.2 Other debt instruments - - - - - - - - - - -
A.3 Units in OICR
- - - - - - - - - - -
(collective investment instruments)
A.4 Financing 2,228 10,737 4,647 5,590 6,626 584 135 - - - 30,547
- Banks 1,628 1,628
- Customers 600 10,737 4,647 5,590 6,626 584 135 28,919
On-bal ance sheet liabilities 4,610 28,991 30,958 77,232 258,799 262,739 158,617 - - - 821,946
B.1 Deposits e current account overdrafts 2,767 - - - - 27 - - - - 2,794
- Banks 508 508
- Customers 2,259 27 2,286
B.2 Debt instruments 1,843 28,991 30,958 77,232 258,799 262,712 158,617 819,152
B.3 Other liabilities -
Off-balance sheet transactions (92) (7,365) (12,617) (14,645) (4,196) (4) 92 - - - (38,827)
C.1 Financial derivatives w ith
exchange of principal
- (7,365) (12,617) (14,645) (4,196) (4) - - - - (38,827)
- Long positions 1,645 143,909 4,970 16,094 1,331 598 168,547
- Short positions 9,010 12,617 158,554 9,166 16,098 1,331 598 207,374
C.2 Financial derivatives w ithout
exchange of principal
- - - - - - - - - - -
- Long positions 100 100
- Short positions 100 100
C.3 Deposits and financing to be received - - - - - - - - - - -
- Long positions -
- Short positions -
C.4 Irrevocable commitments to
disburse funds
(92) - - - - - 92 - - - -
- Long positions 92 92
- Short positions 92 92
C.5 Financial guarantees issued -
C.6 Financial guarantees received
C.7 Credit derivatives with
exchange of principal
- Long positions
- Short positions
C.8 Credit derivatives without
exchange of principal
- Long positions
- Short positions
453

1.6 Distribution over time of financial assets and liabilities by residual contractual maturity– Denominated in other currencies
On demand 1 to 7 days 7 to 15 days
15 days to 1
month
1 month to 3
months
3 months to 6
months
6 months to 1
year
1 year to 5 years
More than 5
years
Indeterminate
maturity
TOTAL OTHER
CURRENCIES
On-balance sheet assets 38,258 3,739 2,973 36,641 54,413 28,985 16,227 13,250 - - 194,486
A.1 Government securities -
A.2 Other debt instruments -
A.3 Units in OICR
-
(collective investment instruments)
A.4 Financing 38,258 3,739 2,973 36,641 54,413 28,985 16,227 13,250 - - 194,486
- Banks 35,563 3,579 2,484 918 762 268 43,574
- Customers 2,695 160 489 35,723 54,413 28,223 15,959 13,250 150,912
On-balance sheet liabilities 40,610 5,606 39 1,300 4,963 11 - - - - 52,529
B.1 Deposits e current account overdrafts 30,797 5,606 39 1,300 4,963 11 - - - - 42,716
- Banks 350 5,453 5,803
- Customers 30,447 153 39 1,300 4,963 11 36,913
B.2 Debt instruments -
B.3 Other liabilities 9,813 9,813
Off-balance sheet transactions (440) (8,833) (22,495) (122,458) 173 - - (2,317) - 3,558 (152,812)
C.1 Financial derivatives w ith
exchange of principal
- (9,281) (22,495) (122,458) 133 - - (2,317) - 2,317 (154,101)
- Long positions 2,075 759 99,650 1,656 19,072 2,443 2,317 127,972
- Short positions 11,356 23,254 222,108 1,523 19,072 2,443 2,317 282,073
C.2 Financial derivatives w ithout
exchange of principal
3 - - - - - - - - - 3
- Long positions 442 442
- Short positions 439 439
C.3 Deposits and financing to be
received
- - - - - - - - -
- Long positions - -
- Short positions - -
C.4 Irrevocable commitments to
disburse funds
(448) 448 - - - - - - - - -
- Long positions 448 448
- Short positions 448 448
C.5 Financial guarantees issued 5 40 1,241 1,286
C.6 Financial guarantees received
C.7 Credit derivatives with
exchange of principal
- Long positions
- Short positions
C.8 Credit derivatives without
exchange of principal
- Long positions
- Short positions
Details of the securitisations in which Group member companies (originators) subscribe the liabilities issued by special purpose
entities, at the time of issue, are given in section 1, sub-section 1 – Credit risk, part C “Securitisations and the transfer of assets” in
these notes and in the Management Report, which may be consulted.
454

4 BANKING GROUP - OPERATIONAL RISKS
Qualitative information
A. General aspects, management and measurement of operational risk
Operational risk is defined as the risk of loss resulting from inadequate or failed procedures, human
resources and internal systems or from external events. 1 This definition comprises legal 2 and
compliance 3 risk, while it excludes reputational 4 and strategic 5 risk.
In order to ensure a risk profile consistent with the risk appetite defined by the Strategic Supervisory
Body, the Group has defined an organisational model based on the combination of various
components identified according to the role filled and by the responsibility assigned in the
organisation chart. The different components are identified centrally at the Parent and locally in the
individual legal entities consistent with the Group’s federal model of organisation.
The model involves centralisation at the Parent of policy-setting functions and of second and third
level internal controls as described below:
the Operational Risks Committee (ORC): is the consultation and reporting body for the
entire operational risk management process. Its composition, functional rules, duties and
powers are governed by the General Corporate Regulations;
Second Level Control Functions: consistent with the regulations in force 6 , these
activities are delegated to the Operational Risks and Internal Validation Functions;
Third Level Control Functions: consistent with Bank of Italy recommendations, these
activities are delegated to the internal audit function.
Various levels of responsibility have been identified in each legal entity, listed below, assigned on the
basis of the operating area:
Operational Risks Officer (ORO): this is the General Manager for the Parent. In other
legal entities it is either the Managing Director or the General Manager, depending on
their corporate regulations. The Operational Risk Officer is responsible, within his/her
legal entity for implementing the entire operational risk management system as defined
by Group policy;
Local Operational Risk Support Officer (LORSO): this role is the figure responsible for
the unit in charge of local risk control. Within his/her legal entity, this officer supports
the Operational Risks Officer in the implementation and co-ordination of the operational
risk management system as defined by Group policy 7 ;
Risk Champion (RC): this role is responsible for units which report directly to the
General Management, to Department Managers (including Local Departments where
present) and to the managers of units who are responsible for specialists activities
including the following operations:
– logical security
– physical security
1
2
Defined as the risk of losses resulting from violations of laws and regulations and from contractual or non contractual
responsibilities or from other litigation.
3
Defined as the risk of incurring legal or administrative penalties, or substantial financial losses as a consequence of violations
of compulsory rules (laws or regulations) or internal regulations (e.g. articles of association, codes of conduct and voluntary
codes).
4 Defined as the present or future risk of incurring loss of profits or capital resulting from a negative perception of the image of
the Bank by customers, counterparties, shareholders, investors or supervisory authorities.
5 Defined as the risk attaching to errors in decision-making concerning business strategies or bad timing in decisions relating
to markets.
6
Bank of Italy Circular No. 263/2006 and subsequent updates.
455

– disaster recovery and operational continuity
– prevention and protection at work as defined by the legislation 81/2008
– anti money-laundering and anti-terrorism activities
– accounting controls as defined by legislation 262/2005
– complaints
– securities brokering
– legal and tax matters.
–
They are assigned responsibility for operational supervision of the proper performance of
the operational risk management process in relation to the activity for which they are
responsible and for co-ordinating the Risk Owners that report to them;
Risk Owner (RO): this role is that of the managers of the units which report hierarchically to a Risk
Champion. Their task is to recognise and report loss events, both actual and/or potential,
attributable to operational risk factors which occur in the course of everyday operations.
The measurement system
The measurement system takes account of internal and external operational loss data, operational
context factors and the system of internal controls, in a manner whereby it detects the main
determinants of risk (especially those which impact on the distribution tail) and incorporates
changes that occur in the risk profile. The model implemented by the UBI Banca Group takes
account of operating context factors and of the system of internal controls through the use of self
risk assessment techniques. The Operational Risk Management System of the Group is composed of
the following:
– Loss Date Collection (LDC): is a decentralised process for collecting data on operational
losses designed for integrated and systematic detection of damaging events that occur
which result in an actual loss, almost a loss (a “near miss”) or a profitable event;
– Self Risk Assessment (SRA): is a process of self-diagnosis of exposure to potential risk
of future losses, of the effectiveness of the control system and of the mitigation
measures in place;
– Italian Database of Operational Losses (IDOL): the measurement systems makes use
of external data in order to compensate for shortage of internal data and to assess risks
from new operating segments for which historical data series are not available. In this
respect the UBI Group has participated since 2003 in Italian Banking Association’s
Italian Database of Operational Losses (IDOL) in order to gain access to loss data for the
Italian banks that participate.
Further details on the functioning of the calculation model are given in the following section on the
capital requirement which may be consulted.
The reporting system
Monitoring of the operational risks assumed is carried out by means of a standard reporting system
organised on the basis of the same levels of responsibility present in the organisational model.
Management reporting activities are carried out in service by the operational risk control function of
the Parent which periodically prepares the following:
– an analysis of changes in operating losses detected by the loss data collection system;
456

– benchmark analyses using the Italian Database of Operational Losses;
– a summary of assessments of exposure to potential risks;
– details of areas of vulnerability identified and the mitigation action undertaken.
On conclusion of the assessment of exposure to potential operational risks for each area of activities
analysed, or as a result of operational losses detected historically by the loss date collection process,
appropriate corrective actions are identified.
As a further form of mitigation, the UBI Banca Group has taken out adequate insurance policies to
cover the principal transferable operational risks with due account taken of the requirements of
supervisory regulations. The policies were taken out by UBI Banca Scpa in its own name and on
behalf of the network banks and product companies of the Group concerned.
Legal risk
The companies in the Group are party to a number of legal proceedings arising from the ordinary
performance of their business. In order to meet the claims received, the companies have made
appropriate provisions on the basis of a reconstruction of the amounts potentially at risk and an
assessment of the risk in terms of the degree of “probability” and/or “possibility” as defined in the
accounting standard IAS 37. Therefore, while it is not possible to predict final outcomes with
certainty, it is considered that an unfavourable conclusion of these proceedings, both taken singly or
as a whole, would not have a significant effect on the financial and operating position of the UBI
Banca Group.
Significant litigation (claims of greater than or equal to €5 million) for which the probable risk has
been estimated by Group banks and companies are as follows:
1. revocation bankruptcy clawback actions against Banca Popolare di Bergamo, Banca Popolare
Commercio e Industria and Banco di Brescia, brought by companies related to Giacomelli
Sport S.p.A.;
2. revocation bankruptcy clawback actions against Banca Popolare di Ancona, brought by Napoli
Calcio Spa and by Romeo Andrea Francesco;
3. a revocation bankruptcy clawback action against Banca Popolare Commercio e Industria,
brought by FDG Spa;
4. a revocation bankruptcy clawback action against Banca Carime, brought by Società
Cooperativa Costruire a r.l.;
5. two actions brought against UBI Banca:
- litigation resulting from a damages claim for non-contractual liability;
- request for recognition of end of contract indemnity following the revocation of an agency
mandate for just cause;
6. two actions brought against Banca Carime:
- a summons served for compounding of interest;
- damages claim for failure to report the extinction of a guarantee to Centrale Rischi (a
central credit register);
7. two actions brought against Centrobanca:
457

- one action with a government counterparty concerning the restitution of a payment
collected following the enforcement of a guarantee granted;
- a compensation action for claimed damages brought by the official receiver of a company
concerning the content of declarations made by Centrobanca to third parties regarding the
availability of securities held on deposit at that bank;
8. two actions brought against Banca Popolare di Bergamo:
- an action relating to a number of combined claims, regarding an appeal against an
injunction, compounding of interest and compensation for damages following a
mistaken protest of cheques (case halted following the bankruptcy of the
counterparty, subsequently revoked and then resumed within the legal time limits).
The judgement is pending;
- action concerning the purchase of covered warrants and Olivetti warrants (the latter
via internet banking). The counterparty, not only alleges failure to receive proper
information on the risks attaching to covered trades, but also disowned the signatures
on the contract documents, required by regulations governing financial instruments
and on the capital in question. Investigations performed by the internal audit function
into the affair found no evidence of liability of the Bank in the transactions in
question. Later the counterparty accepted that the signatures were his, but claimed
that he had signed blank forms which had subsequently been filled in abusively by
the bank. A ruling by the court of first instance has been given in favour of the Bank;
9. two actions brought against Banca Popolare di Ancona:
- various actions brought by Salumificio Vito sas claiming damages for contractual and
non contractual liability;
- claim for damages for pre-contractual and contractual liability in relation to a
financing transaction brought by Eden Costruzioni.
Significant litigation (claims of greater than or equal to €5 million) for which a contingent liability has
been estimated by Group banks and companies are as follows:
UBI Banca
Centrobanca
- claim for damages for contractual liability, resulting from withdrawal from a contract
concerning software;
- Mariella Burani Group. As already reported in the 2011 Annual Report, on 11 th October 2011
Centrobanca was served with a writ of summons from the Burani Designers Holding NV
(“BDH”) Receivership to appear before the Court of Milan. It claimed Centrobanca was liable
in relation to a public tender offer to purchase launched by Mariella Burani Family Holding
Spa on the shares of Marella Burani Fashion Group Spa (“MBFG”). On 1 st March 2012, a
similar writ of summons was served by the Mariella Burani Family Holding Receivership,
based on arguments of fact and law similar to those already made in the summons served by
BDH Receiver. Further details are given in the section “Other information” in the
Consolidated Management Report;
458

- a summons served by a private individual claiming damages allegedly caused by Centrobanca
for enforcing guarantees received in relation to a company of which the person was a
shareholder and guarantor, which defaulted and then went bankrupt;
- a summons for the alleged illegitimate termination of a financing contract;
Banco di Brescia
- a summons served by a former director of CIT Spa on Banco di Brescia, on five other
banks, on other directors, on the statutory auditors of CIT and on the independent auditors
of CIT, with the intention of ascertaining the responsibilities of the other members of the
board of directors and statutory auditors of CIT and also of the banks which, by
participating in a company turnaround plan, had enabled the company to continue to
operate, causing damages to the company and to its creditors, with the consequent
aggravation of the capital and operating situation and strengthening of the guarantees given
to back loans. This writ followed on from litigation directly between the court appointed
receiver of CIT and the former director for responsibility over the failure of the company. On
15 th June 2012 the Ordinary Court of Milan ruled that the plaintiff lacked title to sue and
rejected the applications for a declaratory judgment (therefore deciding in favour of the
Bank). The decision will shortly become definitive;
- a summons served by the company Programma Edile Srl, with a bankruptcy case which
began in 1999 and is still in progress, which in the person of the receiver has requested the
return of amounts drawn/used in the period September 1997-June 1998 by the sole director
who ceased to be a director in September 1997 without the Bank being informed. In
December 2012 the Judge accepted the objections raised by the Bank and dismissed the
case, which is now pending the deadline for possible resumption;
Banca Popolare di Ancona
- revocation bankruptcy clawback actions: Elmarc Spa and Antonio Merloni Spa;
- claim for damages from Calzaturificio MCR srl;
- action for compounding of interest brought by Corderia Napoletana Spa;
Banca Popolare Commercio e Industria
- litigation for claims concerning trading in securities;
Banca Carime
- a revocation bankruptcy clawback action brought by Siprio spa;
459

With respect to the information reported in the previous Notes to the financial statements in the 2011
Annual Report, we report that the significant revocation clawback action brought against Banco di
Brescia by Alcado Spa has been concluded.
The specific sections of this report may be consulted for information on corporate litigation not
directly related to ordinary business operations and on tax litigation.
460

Quantitative information
The graphs below show that the main sources of operational risk for the Bank in the period from
January 2008 to December 2012 were “processes” (21% of frequencies and 48% of the total impacts
detected) and “external causes” (76% of frequencies and 43% of the total impacts detected).
The “external causes” risk driver included, amongst other things, human actions performed by third
parties and not directly under the control of the Bank. The “process” risk driver included
unintentional errors and incorrect application of regulations.
Percentage of operational losses by risk driver (detection 1 st January 2008 - 31 st December 2012)
Number of events
Impact on profit
21.47%
1.46%
6.74%
48.39%
1.53%
75.54%
42.58%
2.29%
Operational losses during the year were again concentrated on
the following risk factors: “processes” (43% of frequencies
and 54% of the total impacts detected) and “external causes” (52% of frequencies and 37% of the total
impacts detected).
Percentage of operational losses by risk driver (detection 1 st January 2012 - 31 st December 2012)
Number of events
Impact on profit
42.5%
1.9%
8.0%
54.1%
51.7%
3.9%
36.8%
1.1%
461

The types of event which recorded the greatest concentration of operational losses during the period
examined were “external fraud” (71% of frequencies and 40% of the total impacts detected),
“customers, products and professional practices” (8% of frequencies and 25% of the total impacts
detected) and “execution, delivery and process management” (14% of frequencies and 23% of the total
impacts detected).
Percentage of operational losses by type of event (detection from 1 st January 2008 to 31 st December 2012)
Number of events
Impact on profit
0.3%
1.4% 4.4%
7.9%
1.3%
13.8%
40.4%
2.5%
2.3%
5.3%
25.4%
70.9%
23.1%
0.9%
Operational losses incurred during the year were concentrated mainly in the following types of event:
“external fraud” (43% of frequencies and 34% of the total impacts detected), “customers, products
and professional practices” (22% of frequencies and 31% of the total impacts detected), “external
fraud” (55% of frequencies and 14% of the total impacts detected) and “execution, delivery and
process management” (20% of frequencies and 23% of the total impacts detected).
Percentage of operational losses by type of event (detection from 1 st January 2012 to 31 st December 2012)
Number of events
Impact on profit
0.7%
1.7% 8.0%
22.4%
1.4%
1.1% 8.6%
30.6%
3.5%
43.4%
20.3%
33.7%
2.0%
22.6%
462

The operational losses detected during the year were concentrated in the “retail banking” (77% of the
total impacts detected) and “retail brokerage” (12% of the total impacts detected) lines of business.
Capital requirements
With Provision No. 423940 of 16 th May 2012, the UBI Banca Group was authorised by the Bank of
Italy to use the advanced internal model (advanced measurement approach – AMA) to calculate the
capital requirement for operational risks. The first consolidated supervisory report submitted on the
basis of this model was made for the report as at and for the period ended 30 th June 2012.
More specifically, the UBI Banca Group adopted the advanced measurement approach (AMA) used in
combination with the “traditional standardised approach” (TSA) and the “basic indicator approach”
(BIA)
The scope of application for the AMA includes the Parent, UBI Banca, the Network Banks (Banco di
Brescia, Banca Regionale Europea, Banca di Valle Camonica, Banca Popolare di Bergamo, Banca
Popolare Commercio e Industria, Banca Popolare di Ancona and Banca Carime), UBI Banca Private
Investment, Centrobanca and UBI Sistemi e Servizi. The scope of application for the TSA comprises
IW Bank, UBI Factor, UBI Pramerica and UBI International, while the remaining companies use the
BIA.
The measurement of operational risk using the AMA methodology is performed using an extreme
value theory (EVT) approach, based on operational losses measured internally (loss data collection –
LDC), empirical data acquired from outside the Group (IDOL - “Italian database of operational losses”)
and potential losses evaluated using self risk assessment (SRA) scenarios. The first two information
sources represent the quantitative component of the measurement model and furnish a historical
view of the internal risk profile and of the Italian banking sector. On the other hand, the scenario
analyses constitute a qualitative and quantitative information component, because they are derived
from risk assessments provided as part of the internal self risk assessment process, where the
purpose is to provide a forward looking view of the internal risk profile, operational context factors
and the system of internal controls.
The model developed follows the loss distribution approach and it involves estimating severity
distributions for each class of risk on two distinct components: a generalised pareto distribution
(GPD) for the tail and an empirical distribution for the body. The estimates of severity obtained on the
tails are subsequently integrated, by applying credibility theory, with risk information evaluated by
means of a self risk assessment (SRA) process. The probabilities of events occurring are described by
using Poisson curves. The estimate of capital at risk is obtained by cutting the annual loss curve
resulting from a convolution between the curve of the probabilities of events occurring and the
integrated severity curve at the 99.9 th percentile. The consolidated capital requirement is calculated
as the sum of the capital at risk estimated on each risk class. The robustness of the model and of the
underlying assumptions is tested by employing a stress testing process, which provides an estimate
of the impacts on measurements of expected loss and of VaR when particular stress conditions occur.
463

The capital requirement calculated according to the TSA is the product of the multiplication of gross
income (the “significant indicator”), divided into supervisory lines of business, by the specific “beta”
coefficients defined in the supervisory regulations (see Bank of Italy circulars No. 263 of 27 th
December 2006 and No. 155 of 18 th December 1991).
Finally, the capital requirement according to the BIA is calculated by multiplying average gross
income for the last three years by the “alpha” coefficient defined by supervisory regulations.
The capital requirement calculated using a combined AMA, TSA and BIA approach was €437 million
(about 4% less than the €456 million calculated using the combined TSA and BIA approaches) and it
was calculated on the following three components:
– the AMA component: the capital requirement net of expected losses for which provisions
have been made, estimated on the legal entities within the AMA perimeter only was
€349 million (it was €382 million gross and represented 80% of the total) and it was
determined principally by the risk classes “execution, delivery and process
management” (27%), “customers, products and professional practices” (21%) “internal
fraud” (21%) and “external fraud” (17%);
– the TSA component: the capital requirement calculated for legal entities within the BIA
perimeter only was €33 million (8% of the total);
– the BIA component: the capital requirement calculated for legal entities within the BIA
perimeter only was €55 million (12% of the total).
The main changes recorded compared to the preceding half year were as follows:
1. an increase in the VaR estimated by the AMA calculation method: an increase was
recorded (+5%, up from €364.0 million to €382.6 million) determined mainly by an
average annual number of events higher that the significance threshold observed in the
period of analysis (see the following points);
2. a reduction in the capital requirement calculated using the TSA+BIA method: a decrease
was recorded (-2%, down from €462.7 million to €455.6 million) determined by a drop in
average gross income (GI) over the last three years (the calculation included GI 2012 = €3.4
billion - in line with GI 2011 – and excluded GI 2009 = €3.8 billion);
3. an increase in the deductible provisions made: an increase was recorded (+7%, up from
€31.7 million to €33.5 million) determined by the combined effect of an increase in the
expected loss estimated by the method (which sets the maximum deductible amount for
this) and growth in the provisions made for events which determine operational risk.
When the UBI Group applied for validation of its first use of the AMA, it did not take up the option
available under the regulations in force 8 to deduct the effects of insurance policies and other risk
transfer mechanisms from the capital requirement.
8 See Bank of Italy Circular No. 263 of 27 th December 2006, Title II, Chapter 5, Part three, Section IV.
464

Section 2 - Risks for insurance companies
The Group holds interest in the share capital of insurance companies as part of banc assurance
agreements with major insurance groups 9 .
In terms of risks, these equity investments are deducted from regulatory capital and account for less
than 0.3% of consolidated assets.
Section 3 - Risks for other companies
No significant risks are reported for the remaining companies included in the consolidation which are
not part of the banking Group and are not insurance companies.
9
The section “the scope of consolidation” in the consolidated management report may be consulted for details.
465

PART F – Information on consolidated
equity
Section 1 – Consolidated equity
A. Qualitative information
Equity is defined by international financial reporting standards in a residual manner as
“what remains of an entity’s assets after all the liabilities have been deducted”. From a
financial viewpoint, equity is the means, measured in monetary form, contributed by the
owners or generated by the entity.
Operational levers are developed on a broader base, consistent with the supervisory
aggregate, which are characterised not just by equity in the strict sense but also by
intermediate instruments such as innovative instruments and subordinated liabilities.
As the Parent of the Group, UBI Banca performs supervision and co-ordination activities for
the companies in the Group and, without prejudice to the independence of each of them in
terms of their business and articles of association, lays down appropriate policies for them.
The Parent assesses capitalisation requirements in both the strict sense and also through
the issue of subordinated liabilities by subsidiaries. The senior management of the Parent
submits proposals to its governing bodies which decide accordingly.
The proposals, once approved by the governing bodies of the Parent, are then submitted to
the competent bodies of the subsidiaries.
In compliance with regulatory constraints and internal objectives, the Parent analyses and
co-ordinates capital requirements on the basis of the business plan, the budget and the
related risk profiles and it acts as a privileged counterparty in gaining access to capital
markets applying an integrated approach to optimising capital strength.
The following analysis metrics are used from the viewpoint of capital management to cover
risks:
• regulatory capital, defined as a supervisory measurement of capital – specified in
supervisory regulations – to be held to cover capital requirements (Pillar 1 risks);
• total capital, or available financial resources (AFR), defined as the sum of capital
elements that the Group considers can be used to cover internal capital and total
internal capital 1 requirements (Pillar 2 risks).
Capital adequacy management is designed to govern the current and future capital strength
of the Group by verifying compliance with the supervisory requirements of Pillar 1 and by
continuously monitoring the adequacy of the total capital to meet Pillar 2 risks. This activity
regards above all an analysis of capital requirements in relation to budget and business
plan objectives and it is carried out at both consolidated and single legal entity level.
1
“Internal capital” is defined as risk capital, the capital requirement for a determined risk that the bank considers
necessary to cover losses above a given expected level. “Total internal capital” is defined as internal capital required
for all significant risks assumed by the bank, including possible internal capital requirements due to considerations
of a strategic character.
466

B. Quantitative information
Please refer to the information given in Part B of these Notes to the financial statements in
Liabilities Section 15 – Equity attributable to the Parent.
B.1 Consolidated equity by type of company
Consolidation
Equity items
Banking
group
Insurance
companies
Other
companies
eliminations
and
adjustments
31.12.2012
1. Share capital 8,618,231 - 489 (5,853,825) 2,764,895
2. Share premiums 5,568,610 - - (795,896) 4,772,714
3. Reserves 5,338,176 - (2,159) (1,808,773) 3,527,244
4. Equity instruments - - - -
5. (Treasury shares) (6,971) - - 2,596 (4,375)
a) parent (6,971) - - 2,596 (4,375)
b) subsidiaries - - - - -
6. Valuation reserves: (560,826) 15,442 - (29,591) (574,975)
- Available-for-sale financial assets (576,520) - - (83) (576,603)
- Property, plant and equipment 35,917 - - (6,583) 29,334
- Intangible assets - - - - -
- Foreign investment hedges - - - - -
- Cash flow hedges (5,451) - - 257 (5,194)
- Foreign currency differences (243) - - - (243)
- Non current assets held for disposal - - - - -
- Actuarial gains (losses) on defined benefit plans (72,414) - - 835 (71,579)
- Share of fair value reserves of equity accounted investees - 15,442 - - 15,442
- Special revaluation law s 57,885 - - (24,017) 33,868
7. Profit (loss) for the year attributable to the Parent and
to non-controlling interests
325,519 47,008 3,636 (284,497) 91,666
Total 19,282,739 62,450 1,966 (8,769,986) 10,577,169
For greater clarity and comprehension of the amounts relating to consolidated equity by
type of company, we have included the following reconciliation between total equity and non
controlling interests and the equity attributable to the Parent.
Reconcil iation schedul e Group Non-control ling interests Total
Share capital 2,254,368 510,527 2,764,895
Share premiums 4,716,861 55,853 4,772,714
Reserves 3,259,365 267,879 3,527,244
Equity instruments 0 0 0
(Treasury shares) ( 4,375) 0 ( 4,375)
Valuation reserves ( 571,045) ( 3,930) ( 574,975)
Profit (loss) for the year (+/-) attributable to the Parent and
to non-controlling interests
82,708 8,958 91,666
Equity 9,737,882 839,287 10,577,169
467

B.2 Valuation reserves of available-for-sale financial assets: composition
Assets/amounts
Banking group
Insurance
companies
Other companies
31.12.2012
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Positive reserve
Negative reserve
Consolidation
eliminations and
adjustments
1. Debt instruments 32,941 (684,451) 198,703 (183,573) - - (198,757) 183,802 32,887 (684,222)
2. Equity instruments 77,584 (2,326) 2,981 (2,565) - - (3,074) 2,567 77,491 (2,324)
3. Units in O.I.C.R.
(collective investment
2,255 (2,523) 9,358 (9,462) - - (9,525) 9,462 2,088 (2,523)
instruments)
4. Financing - - - - - - - - - -
Total al 31.12.2012 112,780 (689,300) 211,042 (195,600) - - (211,356) 195,831 112,466 (689,069)
Total al 31.12.2011 52,365 (1,345,979) 85,699 (160,427) - - (86,672) 169,648 51,392 (1,336,758)
B.3 Valuation reserves of available-for-sale financial assets: annual changes
Debt
instruments
Equity
instruments
Units in
O.I.C.R
(c o lle c tive
in ve stme n t
in stru me nts)
Financing
A. Opening balances (1,327,638) 47,047 (4,775) -
2. Positive changes 679,090 30,465 6,037 -
2.1 Increases in fair value 660,632 28,821 3,016 -
2.2 Transfer to income statement of negative reserves 17,142 1,643 3,021 -
- following impairment losses 12 1,307 2,572 -
- from disposal 17,130 336 449 -
2.3 Other changes 1,316 1 - -
3. Negative changes (2,787) (2,345) (1,697) -
3.1 Decrease in fair value (1,550) (966) (1,360) -
3.2 Impairment losses - - - -
3.3 Transfer to income statement of positive reserves:
from disposal
(445) (1,373) (337)
3.4 Other changes (792) (6) -
4. Closing balances (651,335) 75,167 (435) -
468

Section 2 – Capital and banking supervisory ratios
2.1 Scope of the regulations
Regulatory capital and the relative ratios are calculated on the basis of Circular No. 263/06
(New regulations for the prudent supervision of banks) and Circular No. 155/91 (Instructions
for compiling regulatory capital reports and capital ratios), both issued by the Bank of Italy,
as amended by the 13 th update of 29 th May 2012 and by the 14 th update of 21 st December
2011 respectively.
More specifically, Circular No. 263 sets out prudent principles of a general nature for the
calculation of regulatory capital and the absorption of capital.
The UBI Group in particular has adopted the regulations cited following the advanced
approach. After obtaining authorisation from the supervisory authority 2 , the Group now
uses the advanced internal rating based (AIRB) approach for the calculation of capital
requirements – from the supervisory report as at 30 th June 2012 – for the “credit exposures
to businesses (corporate)” segment for the network banks, UBI Private Investment and
Centrobanca. The remaining legal entities of the Group use the standardised approach. For
operational risks the Group uses an internal model, the advanced measurement approach
(AMA) in combined use with the traditional standardised approach (TSA) and the basic
indicator approach (BIA). The scope of the AMA includes the Parent, UBI Banca, the network
banks, UBI Banca Private Investment, Centrobanca and UBI Sistemi e Servizi. The scope of
the TSA comprises IW Bank, UBI Factor, UBI Pramerica and UBI International, while the
remaining companies use the BIA 3 .
The consolidation scope used for regulatory capital and capital ratio (the “Banking Group”)
purposes differs from the statutory accounting scope of consolidation used to prepare the
financial reports in accordance with IFRS. More specifically the consolidation scope for
statutory accounting purposes includes non-banking, non-financial and service companies
which are excluded from the banking supervisory consolidation scope. Furthermore, the
latter employs proportionate consolidation of banking, financial and operating companies
which are jointly controlled, while these are consolidated using the equity method in the
statutory financial statements.
There are no hindrances within the Group, either legal or substantial, which might prevent
the rapid transfer of capital resources or funds.
2 Bank of Italy provision No. 423940 of 16 th May 2012.
3
Further information on the advanced methods is given in Part E of these Notes to financial statements.
469

2.2 Banking regulatory capital
A. Qualitative information
Regulatory capital is determined on the basis of the figures for capital and profit and loss
resulting from the application of IFRS and it is calculated as the algebraic sum of a series of
positive and negative items, which are considered eligible for inclusion – with or without
limitations - in relation to the ‘quality’ of the capital. The amount of those items is
considered net of any tax expenses. Positive components of the capital must be fully
available to the Bank, so that they can be used without restrictions to cover risks to which
the intermediary is exposed.
Regulatory capital is composed of tier one capital and tier two capital net of “prudential
filters” 4 and some deductions.
1. Tier one capital
The tier one capital includes the paid up share capital, share premiums, reserves
(considered prime quality items), innovative capital instruments, profit for the period, net of
the part potentially available for distribution as dividends and other forms of distribution,
positive prudent filters of tier one capital and instruments subject to transition provisions
(grandfathering). Treasury shares held in portfolio, goodwill, other intangible fixed assets,
prior and current year losses, other negative items and negative prudent filters for tier one
capital (termed negative elements of tier one capital) are deducted from the total of the items
mentioned previously (termed positive elements of tier one capital). The algebraic sum of the
positive and negative components of the tier one capital constitutes the “tier one capital
before items to be deducted”. The tier one capital is constituted by the difference between
the “tier one capital before items to be deducted” and “items to be deducted from tier one
capital”.
2. Tier two capital
The tier two capital comprises – with some limits on eligibility for inclusion – the valuation
reserves, tier two subordinated liabilities, other positive elements and positive prudential
filters (termed positive elements of tier two capital). Other negative items and negative tier
two prudential filters (termed negative elements of tier two capital) are deducted from the
total of those items.
Details of innovative equity instruments eligible for inclusion in the tier one capital and of
tier two subordinated liabilities included in the supplementary capital are given in Part B of
these notes to the financial statements, under Liabilities, Section 3, Debt securities issued –
item 30.
4 Prudent filters are corrections made to equity items in the balance sheet made to safeguard the quality of the
regulatory capital and to reduce potential volatility induced by the application of IFRS.
With regard to those prudent filters that are most important to the UBI Group, the regulations state that unrealised
gains and losses on available-for-sale financial assets are divided between equity instruments (inclusive of collective
investment instruments) and debt instruments. For each of these aggregates, if the reserve in question is negative it
reduces the tier one capital and if it is positive the tier two capital is increased by 50% of the reserve.
470

3. Tier three capital
Tier three capital includes the part of the tier two subordinated liabilities not eligible for
inclusion in the supplementary capital because it exceeds 50% of the “tier one capital before
items to be deducted”. The amount may be used to cover capital requirements on market
risks up to a maximum of 71.4% of those requirements. As at 31 st December 2012 this item
amounted to approximately €55.9 million.
B. Quantitative information
In the calculation of the regulatory capital as at 31 st December 2012 – in compliance with
provisions issued by the Bank of Italy in May 2010 5 – of the possibility of completely
neutralising the impacts on regulatory capital of gains and losses recognised in the fair
value reserves relating to government securities issued by EU member states held in the
“available-for-sale financial assets” portfolio. This approach is in addition to that already
contained in regulations, which requires losses to be deducted entirely from regulatory
capital and gains to be only partially included. The option in question has been applied to
equal extent by all members of the banking group from 30 th June 2010.
The consolidated regulatory capital of UBI as at 31 st December 2012 amounted to €12,204
million (€12,259 million including the tier three capital), slightly down compared to 31 st
December 2011 (€12,282 million).
As compared to measurement as at 31/12/2011 – following the adoption of the internal
rating based approach for the calculation of the capital requirement for credit risk (AIRB,
see above) – the difference between the expected loss and total net impairment losses is
deducted from the tier one capital. This deduction is attributable to the fall in tier one
capital of approximately €12 million, not offset by other increases in the item. The
deductions due to that same difference between the expected losses and total net
impairment losses had a greater impact on tier two capital, down by €57 million.
5 With a provision of 18 th May 2010 and a later communication of 23 rd June 2010 (“Clarification of supervisory
measures concerning regulatory capital – prudential filters”), the Bank of Italy issued new instructions for the
treatment of valuation reserves relating to debt instruments held in the “available-for-sale financial assets” portfolio
for the purposes of calculating regulatory capital (prudential filters). More specifically, as an alternative to the
“asymmetric approach” (full deduction of net losses from the tier one capital and partial inclusion of net gains in
the tier two capital) already provided for by Italian regulations, it is now permitted – in compliance with 2004 CEBS
guidelines –, limited to securities issued by the central governments of countries belonging to the European Union,
to completely neutralise gains and losses in the reserves mentioned (“symmetrical approach”). The measure is
designed to prevent unjustified volatility in regulatory capital, caused by sudden changes in the prices of securities
that are not related to changes in the credit ratings of the issuers.
471

31.12.2012 31.12.2011
A. Tier 1 capital before the application of prudent filters 8,507,064 8,564,444
B. Tier 1 capital prudent filters: (30,471) (137,541)
B.1 IFRS positive prudent filters (+) 240 579
B.2 IFRS negative prudent filters (-) (30,711) (138,120)
C. Tier 1 capital before items to be deducted (A+B) 8,476,593 8,426,903
D. Items to be deducted from tier 1 capital (212,873) (150,625)
E. Total tier 1 capital (C-D) 8,263,720 8,276,278
F. Supplementary capital before the application of prudent filters 4,322,532 4,312,934
G. Supplementary capital prudent filters: (11,998) (7,860)
G.1 IFRS positive prudent filters (+) - -
G.2 IFRS negative prudent filters (-) (11,998) (7,860)
H. Supplementary capital before items to be deducted (F+G) 4,310,534 4,305,074
I. Items to be deducted from supplementary capital (212,873) (150,625)
L. Total supplementary capital (tier 2) (H-I) 4,097,661 4,154,449
M. Items to be deducted from total tier 1 and supplementary capital (157,762) (148,574)
N. Regul atory capital (E+L-M ) 12,203,619 12,282,153
O. Tier three capital 55,873 -
P. Regulatory capital inclusive of tier 3 (N+O) 12,259,492 12,282,153
2.3 Capital adequacy requirement
A. Qualitative information
Capital adequacy is monitored constantly from present and future point of view to maximise
its efficiency and, at the same time, to ensure that the Group achieves its capitalisation
objectives and complies with minimum limits set by supervisory regulations.
Compliance with capitalisation objectives is also monitored at both individual company and
consolidated level and corrective action is immediately taken when objectives change to
bring the various lines of business back into line with optimum risk/yield profiles
B. Quantitative information
The table below shows the absorption of regulatory capital as a function of the total capital
adequacy requirement.
Compliance with that requirement at the end of the year required capital of €6,127 million
(total requirements), against which the Group recorded actual regulatory capital of €12,204
million (€12,259 million inclusive of tier three capital).
Finally, the table that follows summarises compliance with requirements in terms of ratios.
Capital ratios as at 31 st December 2012 had improved appreciably due to the adoption of
internal models, a contraction in volumes of business and action taken to optimise risk
weighted assets. These factors more than offset the recognition of the difference between the
expected loss and provisions of -€143 million, of which 50% deducted from the tier one
capital and 50% from the tier two capital. To summarise, the core tier one ratio rose
compared to 31 st December 2011 by 173 bps (up from 8.56% to 10.29%), the tier one ratio
by 170 bps (from 9.09% to 10.79%) and the total capital ratio by 251 bps (up from 13.50%
to 16.01%).
472

On 31 st December 2012 the UBI Group again satisfied the requirement set by the EBA
recommendation designed to reach a core tier one ratio of 9% inclusive of the “buffer” on
sovereign debt of €868 million as at 30 th September 2011. The core tier one ratio of the UBI
Group for EBA purposes was 9.16%.
Categories/Amounts
Amounts not w eighted
Weighted amounts/requirements
31.12.2012 31.12.2011 31.12.2012 31.12.2011
A. RISK ASSETS
A.1 Credit and counterparty risk 135,348,523 138,669,242 70,145,305 84,331,533
1. Standardised approach 93,346,140 138,665,393 43,976,288 84,328,842
2. Method based on internal ratings 41,999,577 - 26,166,417 -
2.1 Basic - -
2.2 Advanced 41,999,577 - 26,166,417 -
3. Securitisations 2,806 3,849 2,600 2,691
B. SUPERVISORY CAPITAL REQUIREM ENTS
B.1 Credit and counterparty risk 5,611,624 6,746,523
B.2 M arket risk 78,253 73,545
1. Standard methodology 78,253 73,545
2.Internal models - -
3. Concentration risk - -
B.3 Operational risk 437,271 460,749
1. Basic indicator approach 54,753 48,965
2. Standardised approach 33,446 411,784
3. Advanced measurement approach 349,072 -
B.4 Other prudent requirements -
B.5 Other calculations -
B.6 Total prudent requirements 6,127,148 7,280,817
C. RISK ASSETS AND SUPERVISORY RATIOS
C.1 Risk w eighted assets 76,589,350 91,010,213
C.2 Tier 1 capital/Risk w eighted assets (tier 1 capital ratio)
C.3 Regulatory capital including tier 3/risk w eighted assets (Total capital ratio)
10.79% 9.09%
16.01% 13.50%
Section 3 – Insurance capital and supervisory ratios
No items of this type exist.
473

PART G – Business combination
transactions concerning companies or
lines of business
SECTION 1 - TRANSACTIONS PERFORMED DURING THE YEAR
No business combinations involving companies or lines of business were performed by the
UBI Banca Group in 2012.
SECTION 2 - TRANSACTIONS PERFORMED AFTER THE END OF THE
YEAR
No business combinations were performed after the end of the year.
474

PART H – Transactions with related parties
1.Information on the remuneration of directors and senior managers
Information is provided in the notes to the separate company financial statements of Banche
Popolare Unite Scpa, which may be consulted.
2. Information on transactions with related parties
In compliance with IAS 24, information is provided below on balance sheet and income
statement transactions between related parties of UBI Banca and Group member
companies, as well as those items as a percentage of the total for each item in the
consolidated financial statements.
According to IAS 24, a related party is a person or entity that is related to the entity that is preparing its financial
statements (the “reporting entity”).
(a) A person or close family member of that person is related to the reporting entity if that person:
(i) has control or joint control over the reporting entity:
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions apply:
(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary
and fellow subsidiary is related to the others);
(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of
a group of which the other entity is a member);
(iii) both entities are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment defined benefit plan for the benefit of employees of either the reporting entity
or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring
employers are also related to the reporting entity;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
personnel of the entity (or of a parent of the entity).
In compliance with the regulations in force, we report that all transactions carried out by
the Group member companies with related parties were conducted in observance of correct
principles both in substance and form, under conditions analogous to those applied for
transactions with independent parties.
More specifically, the Parent and its subsidiary UBI Sistemi e Servizi SCpA provide Group
member companies with a series of services, governed by intragroup contracts drawn up in
accordance with the principles of consistency, transparency and uniformity in line with the
organisational model of the Group. Under this model, strategic, and management activities
are centralised at UBI Banca and technical and operational activities in UBI Sistemi e
Servizi SCpA.
The prices agreed for the services provided under the contracts were determined on the
basis of market prices or, where appropriate reference parameters could not be found in the
marketplace, in accordance with the particular nature of the services provided and also in
relation to the service contracts signed by UBI.S with its consortium shareholders, on the
basis of the costs incurred for the services provided.
The main intragroup contracts existing at the end of the year included those which
implement the centralisation of activities in the Governance and Business Areas of the
Parent and they involved the Parent and the main banks in the Group (Banca Popolare di
Bergamo Spa, Banca Popolare Commercio e Industria Spa, Banca Popolare di Ancona Spa,
Banca Carime Spa, Banco di Brescia Spa, Banca Regionale Europea Spa, Banca di Valle
Camonica Spa, Banco di San Giorgio Spa, UBI Banca Private Investment Spa) and also
475

contracts to implement the “national tax consolidation” (in accordance with articles 117 to
129 of Presidential Decree No. 917/1986, the consolidated income tax act) concluded by the
Parent. There were also all the intragroup contracts which implement the centralisation in
UBI Sistemi e Servizi of support activities for the principal companies in the UBI Group.
We report with regard to transactions between companies in the Group and all of its related
parties that no atypical and/or unusual transactions were performed; furthermore, no
transactions of that type were even performed with counterparties that were not related
parties.
Atypical and/or unusual transactions, as indicated in Consob Communications No.
98015375 of 27 th February 1998 and No. 1025564 of 6 th April 2001, defined as all those
transactions which, because of their significance/importance, the nature of the
counterparties, the content of the transaction (even in relation to ordinary operations), the
way in which the transfer price is decided and the timing of the event (close to the end of
the financial year) might give rise to doubts concerning: the correctness/completeness of
the information in the accounts, a conflict of interests, the security of the companies assets
and the rights of non-controlling shareholders.
Further information is given in the “Report on corporate governance and the ownership
structure of UBI Banca Scpa” attached to these reports.
476

Transactions with related parties – principal balance sheet items
Financial
Financial
Loans and Loans and
Debt
Available-for-sale Financial
Due to
liabilities Guarantees
assets held for
advances to advances to Due to banks
securities
financial assets assets FVO
customers
held for granted
trading
banks customers
issued
Figure s in thousa nds of e uro
trading
Associates - 8,428 - - 62,624 - 332,291 - 13 24,950
Senior managers (1) - - - - 2,742 - 8,187 933 - -
Other related parties 30,438 0 37,780 - 308,339 17 124,701 1,775 - -
Total 30,438 8,428 37,780 - 373,705 17 465,179 2,708 13 24,950
(1) A “senior manager” is defined as “a member of the key management personnel, where key management personnel are those w ho have pow er and responsibility for the planning, management and control
of the activities of the entity and they include its directors”.
Transactions with related parties - percentage
Financial
Financial
Loans and Loans and
Debt
Available-for-sale Financial
Due to
liabilities Guarantees
assets held for
advances to advances to Due to banks
securities
financial assets assets FVO
customers
held for granted
trading
banks customers
issued
Figure s in thous a nds of e uro
trading
With related-parties (a) 30,438 8,428 37,780 - 373,705 17 465,179 2,708 13 24,950
Total (b) 4,023,934 14,000,609 200,441 6,072,346 92,887,969 15,211,171 53,758,407 45,059,153 1,773,874 8,035,491
Percentage (a/b*100) 0.756% 0.060% 18.848% 0.000% 0.402% 0.000% 0.865% 0.006% 0.001% 0.310%
Summary of principal income statement transactions with related parties
Dividends and Net fee and
Operating
Other
Net interest
Staff costs
Figure s in thousa nds of e uro
similar income commission
income/expens administrative
Associates (820) 6,135 income 87,630 1,184 3,069 es expenses (10,676)
Senior managers (1) (183) - 260 (16,479) (15) (95)
Other related parties 2,819 - 942 (183) 9 (331)
Total 1,816 6,135 88,832 (15,478) 3,063 (11,102)
(1) A “senior manager” is defined as “a member of the key management personnel, w here key management personnel are those w ho have pow er and
responsibility for the planning, management and control of the activities of the entity and they include its directors”.
Percentage of income statement transactions with related parties in respect of the consolidated financial statements
Dividends and Net fee and
Operating
Other
Net interest
Staff costs
Figure s in thousa nds of e uro
similar income commission
income/expens administrative
With related-parties (a) 1,816 6,135 income 88,832 (15,478) 3,063 es expenses (11,102)
Total (b) 1,931,684 15,591 1,181,806 (1,525,753) 244,515 (858,270)
Percentage (a/b*100) 0.094% 39.350% 7.517% 1.014% 1.253% 1.294%
477

Principal balance sheet items with associate companies subject to significant influence
Financial
Loans and
Financial
Available-for-sale
Due to Debt securities
Guarantees
assets held for
advances to Due to banks
liabilities held
financial assets
customers issued
granted
trading
customers
for trading
Importi in miglia ia di e uro
Arca SGR Spa - - - - - - - -
Aviva Assicurazioni Vita Spa - - 17,960 - 189,032 - 13 -
Aviva Vita Spa - - 24,263 - 50,841 - - -
Capital Money Spa - - 40 - 6 - - -
Ge.Se.Ri. Spa in liquidazione - - - - - - - -
Lombarda China Fund Management Company - - - - - - - -
Lombarda Vta Spa - - 8,921 - 75,844 - - 24,950
Polis Fondi - 8,424 261 - 18 - - -
Prisma Srl - - - - 696 - - -
S.P.F. Studio Progetti Finanziari srl - - 142 - 441 - - -
SF Consulting Srl - - 901 - 135 - - -
Siderfactor Spa - - - - - - - -
Sofipo Fiduciaire Sa - - - - - - - -
Tex Factor Spa in liquidazione - - - - - - - -
UBI Assicurazioni Spa - - 9,775 - 15,277 - - -
UFI Servizi Srl - - - - - - -
Total - 8,424 62,263 - 332,290 - 13 24,950
478

Principal income statement items with associate companies subject to significant influence
Net fee and
Operating
Dividends and
Net interest
commission Staff costs income/expens
similar income
Fig u re s in th o u s a n d s o f e u ro
income
es
Other
administrative
expenses
Arca SGR Spa - - 1,673 - - -
Aviva Assicurazioni Vita Spa (302) - 5,932 (9) 1 (616)
Aviva Vita Spa (506) - 35,531 - 50 -
Capital Money Spa - - (2,820) - - -
Ge.Se.Ri. Spa in liquidazione - - - - - -
Lombarda China Fund Management Company - - - - - -
Lombarda Vta Spa (103) 3,905 28,539 - 1,523 (6,398)
Polis Fondi 117 168 261 - - -
Prisma Srl (1) - 20 - 31 -
S.P.F. Studio Progetti Finanziari srl (2) - 37 - 8 (236)
SF Consulting Srl - - 407 - 16 -
Siderfactor Spa 103 - 2 - 110 -
Sofipo Fiduciaire Sa - - - - - -
Tex Factor Spa in liquidazione - - - - - -
UBI Assicurazioni Spa (125) 2,062 18,047 359 1,330 (3,308)
UFI Servizi Srl - - - - - (118)
Total (819) 6,135 87,629 350 3,069 (10,676)
479

Part I – Share based payments
A. Qualitative information
In implementation of the update of “UBI Banca Group remuneration and incentive policies”
(the “Policy”) for 2012, which was approved by the Supervisory Board on 28 th March 2012,
after prior consultation with the Remuneration Committee, in compliance with “Supervisory
provisions on the remuneration and incentive policies and practices of banks and banking
groups” issued by the Bank of Italy, on 28 th April 2012 an ordinary shareholders meeting of
UBI Banca approved the payment of the variable component of bonuses to be made by the
use of shares for top management and the highest management level of the control
functions.
Incentive schemes for 2012 are described in the “2012 Annual report to the shareholders
meeting on remuneration and incentives policies” which may be consulted. They are subject
to specific trigger conditions which guarantee the capital stability (core tier one) and
liquidity (net stable funding ratio) of the UBI Banca Group, as well as the ability to generate
value by the Group and the single companies belonging to it (economic value added). The
calculation of bonuses is related to the degree to which set objectives are achieved, each
being weighted on the basis of their importance.
The following was confirmed, following on from 2011, with regard to top management and
the highest management level of the control functions:
- deferment of payment of a portion (according to the role performed) of between 40% and
60% of annual bonuses if they are due;
- the grant of financial instruments, by the assignment of ordinary shares of the Parent, UBI
Banca, for a portion equal to at least 50% of variable remuneration, setting an adequate
period of personnel retention for this, in order to align the incentives to the Bank' s medium
to long-term interests.
As a consequence of the above, the first portion of share-based bonuses should be assigned
in the third year following the reporting year, while the second portion should be assigned
in the fifth year following the reporting year. In order to ensure the Group's value generation
capability over time, the second deferred portion is also subject to the achievement of set
conditions relating to the creation of value corrected for risk, and that is to profit.
Therefore:
- the assignment of a first portion of shares is scheduled for 2014 in relation to
bonuses earned in 2011;
- the assignment of a first portion of shares is scheduled for 2015 in relation to
bonuses earned in 2012;
- the assignment of the second portion of shares is scheduled for 2016 in relation to
bonuses which may have been earned in 2011;
- the assignment of the second portion of shares is scheduled for 2017 in relation to
bonuses which may have been earned in 2012.
480

B. Quantitative information
According to IFRS 2 “share-based payments”, the scheme in question constitutes an “equity
settled” operation where payment is based on shares and made using equity instruments.
On this basis, because the objective of IFRS 2 is to recognise the impact on profit and loss
of the remuneration paid by means of equity instruments in the income statement in the
form of staff costs, UBI Banca and the subsidiaries involved in the scheme recognised the
cost for the year within the item 150a “Administrative expenses: staff costs” against an
increase in equity made by posting the amount to a separate reserve in equity because the
obligation of the company will be extinguished by the delivery of equity instruments and
that obligation will be settled in any event by the Parent.
As concerns the quantification of the cost of the scheme, since it is impossible to measure
the value of the services provided by employees with precision, in compliance with IFRS 2, it
is calculated on the basis of the fair value of the UBI share on the grant date 33 multiplied by
the number of shares that it is estimated will be vested.
More specifically, the fair value of the equity instruments granted is calculated considering
the timing of their delivery, which, as planned, will start in 2014 and will last until 2017.
Those estimates, based on the market price of the shares, does not include the effect of any
dividends that may be distributed in the period and in general it adequately weights the
terms and conditions governing the grant of the instruments.
The total cost total of the scheme estimated on that basis is €1,390 thousand, divided as
follows:
- an up-front portion consisting of:
• 229,302 shares to be granted in 2014, equivalent to €653 thousand;
• 61,174 shares to be granted in 2015, equivalent to €207 thousand;
- deferred portions (if the conditions to which the deferment is subject are met) consisting
of:
• 152,869 shares to be granted in 2016, equivalent to €401 thousand;
• 40,783 shares to be granted in 2017, equivalent to €129 thousand;
In accordance with the vesting conditions hypothesised, the cost of the scheme is dispersed
over the whole of its vesting period, with the portion for the year recognised in the income
statement, which for the reporting year amounted to €342 thousand. Furthermore, any
change in the cost will only occur if the vesting requirements are not met because the
services and/or result conditions set by the plan on the basis of which the number of
shares that will actually be delivered is decided are not satisfied, while changes will not be
based on changes in the fair value of the UBI shares.
33 In this case this is the date on which the treasury shares are repurchased, because it is only on that date that
the number of financial instruments needed to meet the obligation assumed by the company can be estimated.
481

PART L – Segment Reporting
Three segments have been identified in the presentation of the results and the financial
position for 2011, termed banking, non-banking financial and other companies, as opposed
to the four segments presented in prior years.
The banking segment comprises the nine network banks of the Group, IW Bank Spa,
Banque de Depots et de Gestione Sa and UBI International Sa.
The “non-banking financial sector” comprises Centrobanca Spa, Ubi Leasing Spa, Ubi
Factor Spa, Ubi Pramerica SGR Spa, Banca 24-7 Spa, Silf Spa, Prestitalia Spa, Ubi
Fiduciaria Spa and UBI Gestioni Fiduciarie SIM Spa.
The “other companies” segment comprises UBI Banca Scpa, Ubi Sistemi e Servizi Scpa and
all the remaining Group member companies. That segment also includes all the
consolidation entries including all the intercompany eliminations with the exception of
those relating to the purchase price allocations made to the relative individual segments.
The algebraic sum of the three segments identified in this manner represents the income
statement and balance sheet of the UBI Banca Group as at and for the year ended 31 st
December 2011.
Distribution by business segment: income statement
Corporate Centre
item/business segment
Banking
(Aggregate)
Non-banking
financial
(Aggregate)
(UBI, UBIS,
Property companies
+ all intercompany
and consolidation
entries)
To ta l
Net interest income (expense) 1,612,092 262,549 57,043 1,931,684
Net fee and commission income 1,097,276 129,144 -44,614 1,181,806
Other expense/income -24,074 16,499 280,444 272,869
Gross income 2,685,294 408,192 292,873 3,386,359
Net impairment losses on loans and financial assets
-512,975 -277,675 -111,374 -902,024
Net financial income 2,172,319 130,517 181,499 2,484,335
Net income from insurance operations 0
Net income from banking and insurance operations 2,172,319 130,517 181,499 2,484,335
Administrative expenses -1,900,444 -180,508 -146,601 -2,227,553
Net provisions for risks and charges -27,119 -10,893 -11,200 -49,212
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets -87,730 -5,966 -97,448 -191,144
Other net operating income/expense 53,192 12,556 29,781 95,529
Operating expenses -1,962,101 -184,811 -225,468 -2,372,380
Profits of equity investments 2,044 740 49,866 52,650
Net impairment losses on goodw ill - - - 0
Profits on disposal of investments 224 501 5,765 6,490
Pre-tax profit from continuing operations 212,486 - 53,053
11,662 171,095
Taxes on income for the year from continuing operations - 95,112
499 15,184 -79,429
Post-tax profit (loss) from discontinued operations - - - 0
Profit for the period attributable to non-controlling interests 1,294 - 13,200
2,948 -8,958
Profit for the period 118,668 - 65,754
29,794 82,708
482

Distribution by business segment: balance sheet
Corporate Centre
item/business segment
Banking
(Aggregate)
Non-banking
financial
(Aggregate)
(UBI, UBIS,
Property companies
+ all intercompany
and consolidation
entries)
Loans and advances to banks 7,895,998 0
Due to banks 11,860,057 5,174,766
Net financial assets 1,848,145 672,406 14,059,890
Loans and advances to customers 65,915,538 23,646,491 3,325,940
Due to customers 47,089,531 264,095 6,404,781
Debt securities issued 22,638,076 10,184,224 12,236,853
Equity-accounted investees 523 35 441,933
Non-controlling interests 820,643 47,378 -28,734
Profit for the year 106,141 -67,895 44,462
The items "loans to banks" and "due to banks" have been stated in the three segments on
the basis of the prevailing balance.
The item "non-controlling interests" in the "banking" and "non-banking financial" segments
relates only to the portion of equity and of the profit for the year of the companies not
wholly owned. It does not include non controlling interests and the part of consolidated
items attributable to non-controlling interests which have been attributed to the "corporate
centre".
483

Attachment to the consolidated financial statements
Disclosures concerning the fees for independent auditing and other
services in compliance with Art. 149 duodieces of Consob Issuers’
Regulations
In accordance with Art. 149 duodieces of Consob Issuers’ Regulations, information
concerning payments made to the independent auditors Deloitte & Touche Spa and
companies belonging to the same network for the following services is given in the table
below.
1) Auditing services which include:
audit of the annual accounts for the purposes of expressing a
professional opinion;
review of the interim accounts.
2) Certification services which include appointments where the auditor assesses a
specific element, the determination of which is performed by another who is
responsible for it, by employing appropriate criteria in order to furnish a conclusion
which gives the recipient a measure of the reliability of that specific element.
3) Tax consultancy services.
4) Other services.
The fees presented in the table relating to the financial year 2012, are those contractually
agreed, inclusive of any indexing (but not of out-of-pocket expenses, nor of supervisory
authority contributions and VAT).
Pursuant to the regulations cited, payments made to possible secondary auditors or to firms
belonging to the respective networks are not included.
484

Type of service
Firm providing the
service
Recipient of the service Fees (€000)
Audit of the accounts
Deloitte & Touche Spa,
Deloitte SA, Deloitte &
(*) 2,459
Touche LLP
Certification services
Deloitte & Touche Spa,
Deloitte SA, Deloitte ERS
(**) 1,079
Srl
Tax consultancy services -
Other services: 1,207
Administrative and methodological
support for audit activities
preparatory to the project for the
adoption and development and for
Deloitte Consulting Spa Prestitalia Spa 469
the stabilisation process of the
Creditolab procedures
Methodological support for the
design of the IT platform for
Deloitte Consulting Spa IW Bank Spa 182
financial consulting
Methodological support for mapping
rating systems
Deloitte Consulting Spa UBI Banca Scpa 179
Methodological support for the gap
analysis stage in the corporate
project to analyse the
organisational impacts of the
Deloitte Consulting Spa UBI Banca Scpa 160
merger of Banca 24-7 Spa into UBI
Banca S.c.p.a.
Methodological support for
recognition of incentive schemes
Deloitte Consulting Spa UBI Banca Scpa 105
Other services
Deloitte & Touche Spa,
Deloitte ERS Srl, Deloitte
SA,
UBI Sistemi e Servizi Scpa,
Banque de Depots et de
Gestion Sa
Total 4,745
112
(*) UBI Banca Scpa, Banca Popolare di Bergamo Spa, Banca Popolare di Ancona Spa, Banca Carime Spa, Banca
Popolare Commercio e Industria Spa, UBI Sistemi e Servizi Scpa, BPB Immobiliare Srl, UBI Pramerica SGR Spa,
Centrobanca Spa, Centrobanca Sviluppo Impresa SGR Spa, SBIM Spa, Solimm Spa, Coralis Rent Srl, UBI
Academy, IW Bank Spa, Banque de Depots et de Gestion Sa, UBI Capital Singapore Pte Ltd, UBI Banca
International Sa, UBI Management Company Sa, UBI Trustee Sa, UBI Finance Srl, UBI Finance 2 Srl, UBI Finance
CB 2 Srl, 24-7 Finance Srl, UBI SPV BBS 2012 Srl, UBI SPV BPCI 2012 Srl, UBI SPV BPA 2012 Srl.
(**) UBI Banca Scpa, Banca Popolare di Ancona Spa, Banque de Depots et de Gestion Sa
485