UBI Banca Group

unsecured loans mentioned above, the coverage for non performing loans not backed by
collateral was 78.72%.
In addition to the disposals of non-performing loans mentioned, in the fourth quarter the
Group disposed of €23 million of unsecured loans subject to proceedings by creditors, with the
recovery of €0.7 million. Furthermore, Centrobanca disposed of loans (mainly performing) to
generate a gain of €0.5 million.
Total disposals of receivables and non-performing loans during the year gave rise to reversals
of impairment losses of €2.5 million, including €2.1 million relating to B@nca 24-7, which
confirmed the appropriateness of the valuations and impairment losses made by that bank.
UBI Factor: exposure to Fondazione Centro San Raffaele del Monte Tabor
This exposure amounted to approximately €31 million and relates to advances made in 2004 on VAT
credits held with the tax authorities totalling €137.2 million, subsequently found to be uncollectable in court
proceedings in relation to litigation between the invoice seller and the tax authorities themselves. Total
impairment losses of €9.5 million had been recognised on this exposure at the end of the year after a
reversal of impairment amounting to €6 million was recognised following the acceptance of an improved
offer on the disposal of this hospital with respect to the original proposal contained in the arrangement with
creditors presented by the Foundation (ruling of the Bankruptcy Court of Milan of 27 th October 2011), which
offered a higher percentage of recovery of the unsecured loan than had been originally estimated. On 19 th
March 2012 the creditors approved the proposed arrangement.
The classification of the position as non-performing loan had a significant impact on the ratio of net nonperforming
loans to net loans to customers of this company, which rose from 0.55% in September to 1.27%
at the end of year (0.42% in December 2010).
IMPAIRED LOANS
After four months of progressive growth, total outstanding gross impaired loans decreased for
the first time in the last three months of 2011, although only slightly, amounting to €2.84
billion.
Nevertheless, the cumulative change over twelve months was an increase of €523.7 million
(+22.6%), of which +€184.3 million attributable to the first quarter, +€192.4 million to the
second quarter, +€222.4 million to the third and -€75.4 million to the fourth quarter.
Approximately three quarters of the year-on-year increase was attributable to Centrobanca
and the network banks.
Gross impaired loans backed by collateral rose to €1.85 billion (+€0.44 billion year-on-year;
+31.3%) to account for 65% of total outstanding gross loans at the end of December (60.7% at
the end of 2010), notwithstanding a fall in the last quarter (-€42 million), but nevertheless
smaller than that for total gross impaired loans.
Performance during the year with respect to the previous year saw a reduction in the flow into
new classifications, although with a higher percentage of new classifications from performing
loans than transfers from other classes of deteriorated exposures.
The trend for net impaired loans was similar to that for gross impaired loans, rising from €2.03
billion to €2.53 billion during the year, up by €500.9 million (+24.6%) including +€200 million
relating to the first quarter, +€171.5 million to the second quarter, +€214.2 million to the third
and -€84.8 million to the fourth quarter.
The year-on-year fall in coverage from 12.39% to 10.91% basically reflects the increase in the
percentage of positions backed by collateral, as already mentioned.
Net of secured loans, coverage for impaired loans stood at 19.04% (22.41% twelve months
before).
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