UBI Banca Group

Brescia and €116.3 million of impairment losses on investments in A2A (€3.3 million), in
Siteba Spa 12 (€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) 13 . The amount actually incorporates the impairment loss
recognised in the first half (€15.9 million, recognised on the basis of the share price quoted at
the end of June of 1.8075 euro), 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).
Impairment losses of €49.7 million were recognised in 2010 including €41.1 million classified as non-recurring, of
which: €36.8 million resulting from impairment losses on the investment in Intesa Sanpaolo, €2.6 million relating to
the company A2A and €1.7 million to the impairment loss on units held in the British TLcom fund.
Net provisions for risks and charges rose to €31.6 million 14 and were concentrated mainly in
the items “litigation” (all relating to the network banks and to legal action regarding financial
investments and compounding of interest, down by €6.5 million compared to 2010) and “other
provisions”, which, however, increased during the year by €9.4 million, and included the
following:
▪ B@nca 24-7 amounting to €7.5
million, net of the release of
provisions amounting to +€8
million, made in 2010 for Ktesios
Spa, as a transfer to impairment
losses on loans. The provisions
were made principally to meet
operating risks attaching to the
disbursement of consumer loans
and salary backed loan
▪
▪
Net provisions for risks and charges
2011 2010
Figures in thousands of euro
Net provisions for risks and charges for revocations (2,248) (1,440)
Provisions for personnel (450) (79)
Net provision for bonds in default (286) 46
Net provisions for litigation (10,425) (16,924)
Other provisions for risks and charges (18,186) (8,812)
Total (31,595) (27,209)
transactions brokered by financial companies in conditions of objective difficulty (of which -
€3.6 million relating to Ktesios);
IW Bank amounting to €2.1 million in relation to the closure of transit accounts which
failed to balance, regarding the former legacy platform and created at the time of the followup
performed following the IT migration carried out in February;
UBI Leasing amounting to €2.4 million, a non-recurring item. These provisions were made
as part of the discontinuation of the network of agents, to terminate their contracts (to be
interpreted in conjunction with non-recurring operating costs already mentioned
amounting to €3.3 million).
The income statement contains an aggregate item, profits from the disposal of investments (item
270) and from equity investments (item 240, excluding profits from equity-accounted investees)
amounting to €7.1 million, composed as follows:
• approximately €5 million from the sale of two properties: the historic property of Neuchâtel
by Banque de Dépôts et de Gestion (€3.8 million) and a property located in Varese by Banca
Popolare di Bergamo;
• €2.3 million from the gain on the partial disposal of the equity investment in BY YOU in
April 2011, although this was offset by the negative impact of its removal from the
consolidation (-€4.1 million, as a decrease in goodwill).
The item consisted of a profit of €95.9 million in 2010 and was mainly of a non-recurring nature. It included the
following significant gains: €81.1 million on the partial disposal of Lombarda Vita to a joint venture partner (Società
Cattolica di Assicurazione), €6.6 million on the disposal by BDG of its Yverdon and Neuchâtel branches and €5.4
million on the disposal of property belonging to the Parent located in Milan.
12 Sistemi Telematici Bancari is an interbank company specialising in outsourced technical support services to banks and acquirers
of payment cards. UBI Banca holds close to 7% of the share capital. The impairment loss was recognised as a result of a loss in
value of greater than 35%.
13 The impairment loss was recognised on the basis of the new number of ordinary shares of Intesa Sanpaolo (186,458,028) held by
the UBI Banca Group following the increase in the share capital (when 41,435,116 new ordinary shares were subscribed at a price
per share of 1.369 euro).
14 Net provisions for risks and charges amounted to €27.2 million in 2010 and included the following: a provision of €8 million made
by B@nca 24-7, relating to the company Ktesios, which operated in the salary backed loan sector as the agent of B@nca 24-7,
performing servicing activities for the collection of debts, by itself and through and associate; a provision of €2 million made by
Centrobanca to meet the costs of a possible clawback revocation action against the Burani Group; a provision of €2.3 million made
by IW Bank to meet future risks and charges connected with differences found when inspections were performed (increased and
further intensified for the migration of the IT system) relating to transit accounts.
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