UBI Banca Group

and issued by UBI Banca International) – reduced progressively: in the first half of the year as
a consequence of the significant medium and long-term funding acquired (where short-term
funding is used as a “buffer” to optimise liquidity management and total funding) and in the
second half, due to the effects of country risk for Italy which affected asset flows strongly and
shortened the maturities of investments, even if a partial recovery occurred towards the end of
the year.
It must also be stated that, even if the repeated downgrades by rating agencies brought the
ratings on ECP and French CD programmes to levels more consistent with the internal
investment policies of some institutional operators, the UBI Banca Group still has outstanding
issues in the current year, that are virtually unchanged compared the end of 2011 and it is
succeeding in renewing all maturing issues.
Finally, following the revision of supervisory regulations concerning redemptions and the
repurchase of liabilities eligible for inclusion in supervisory capital – which eliminated the
replacement obligation that put limits on the ability to manage and optimise liabilities – the
UBI Banca Group performed a repurchase operation in February and March 2012 by
launching a public offer on its own institutional liabilities, consisting of preference shares.
The offer was taken up for a total nominal amount of €109 million, equivalent to
approximately one fourth of the nominal amount of the securities issued, and it generated a
net gain of approximately €15.8 million recognised in the first quarter of 2012. This also made
it possible to generate higher quality capital in line with Basel 3 recommendations and to
benefit from lower interest expense of over €7 million per year.
The difficult conditions on funding markets have led to a focus on funding from ordinary
customers, which has also been a factor of relative strategic strength for the Group and will
be increasingly more important in the future, although in a context of growing
competitiveness.
Bond issues subscribed by customers amounted to €9.36 billion in 2011 compared to
maturities of €8.7 billion.
In reality, with the exception of Centrobanca – in relation to the nature of its business (non
captive customers) and because it had net maturities of €1 billion during the year – the
Group’s ability to place issuances with its own captive customers was even stronger.
In fact total issuances by the network banks and UBI Banca amounted to €9.34 billion
compared to maturities of €7.67 billion, with a ratio of new issuances to maturities of 122%.
In this context, placements by UBI Banca – nine listed issuances for a nominal amount of €1.9
billion, three of which, totalling over €1 billion, with a lower tier two subordination clause –
concentrated above all in the second quarter and towards the end of the year, have gradually
replaced issuances by the network banks which recorded a slightly negative balance on the
ratio of new issuances to maturities.
104