UBI Banca Group

The comments that follow 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
Funding policies
The year 2011 was one of severe financial turmoil, especially in the second half of the year,
when the heightened perception of country risk for Italy by investors – in the context of the
broader crisis which affected the sovereign debt of some countries in the euro area – resulted
in an unprecedented widening of the yield spreads between Italian and German securities.
This caused a significant increase in the cost of funding, affected also by repeated downgrades
performed by the main rating agencies, while international institutional funding and interbank
monetary markets became inaccessible for Italian banks.
In this scenario the UBI Banca Group benefited from its decision to move forward and
concentrate important international placements to cover its requirement for the whole year in
the first few months of 2011. A modest resumption of activity only occurred towards the end of
the year with a few private placements for small amounts.
The total nominal amount of securities subscribed by institutional investors in 2011
accounted for approximately 140% of items that matured.
Preference was given to covered bonds with longer maturities, in relation to the lower cost with
respect to senior EMTN issues for the same maturities, while the EMTN programme was
reserved for three year maturities.
UIB Banca made three covered bond issuances:
- a public placement in January for one billion euro with a ten year maturity (28 th January
2021) and a coupon of 5.25%;
- a second public offering in February of €750 million with a fifteen year maturity (22 nd
February 2016) and a coupon of 4.5%.
- a private issuance in November for €250 million with the European Investment Bank,
consisting of a second tranche under an agreement signed in April 2010 to finance Italian
SMEs.
At the date of publishing this report, UBI Banca had eight issuances of covered bonds in issue
for a total nominal amount of €5.75 billion (including €11 million already amortised) 1 .
Two public placements made performed under the EMTN programme: the first in February for
€700 million, with a two year maturity (28 th February 2013) at a fixed rate of 3.875%; the
second in April for €1 billion with a two and a half year maturity (21 st October 2013) at a fixed
rate of 4.125%. Following those, only private placements for smaller amounts were performed
(€50 million in June and €105 million in December).
Volumes of funding in the short-term institutional sector – where the Group operates using
euro commercial paper and French certificates of deposit (instruments listed in Luxembourg
1 In consideration of the large pool of segregated assets available at UBI Finance, three new issuances for a total €750 million were
made on 22 nd February 2012. These were not placed on the market but used to strengthen the pool of assets eligible for refinancing
with the central bank.
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