UBI Banca Group

Management accounting figures 1 as at the 31 st December 2011, show the following:
- in terms of type of financial instrument, the securities portfolio of the Group was composed as
follows: 80.5% of government securities, 17% of corporate securities (approximately 72% were
issued by major Italian and international banks and financial institutions and 88% of the
investments in corporate securities also carry an “investment grade” rating), 1.3% of hedge
funds and the remainder (1.2%) consisting of funds and equities;
- from a financial viewpoint, floating rate securities accounted for 50.3% of the portfolio 2 and
fixed rate securities for 40.4%, while structured instruments (for which the optional component
concerned the coupons only and not the capital invested), present mainly in the AFS portfolio,
accounted for 6.7%, while the remainder were composed of equities, funds and convertible
bonds;
- as regards the currency of denomination, 98.7% of the securities were denominated in euro and
0.6% in dollars with currency hedges, while in terms of geographical distribution, 95.8% of the
investments (excluding hedge funds) were issued from countries in the euro area and 2% from
the USA;
- finally, an analysis by rating (for the bond portfolio only) shows that 98.1% of the portfolio
consisted of “investment grade” securities with an average rating of Baa1 (A2 in December
2010).
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.
Information on the fair value hierarchy (levels one, two and three) is given in Section A.3 of Part A –
Accounting Policies in the Notes to the Consolidated Financial Statements.
Available-for-sale financial assets: composition
31.12.2011 31.12.2010 Changes
Figures in thousands of euro Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total amount %
Debt instruments 6,621,026 920,410 10,296 7,551,732 8,509,464 1,115,988 10,255 9,635,707 -2,083,975 -21.6%
of which: Italian government
securities 5,625,881 338,292 - 5,964,173 7,366,675 409,872 - 7,776,547 -1,812,374 -23.3%
Equity instruments 251,226 46,963 88,444 386,633 346,586 73,614 70,357 490,557 -103,924 -21.2%
Units in O.I.C.R.
(collective investment instruments) 39,064 62,280 - 101,344 18,313 106,596 - 124,909 -23,565 -18.9%
Financing - - - - - - 1,446 1,446 -1,446 -100.0%
Total 6,911,316 1,029,653 98,740 8,039,709 8,874,363 1,296,198 82,058 10,252,619 -2,212,910 -21.6%
Available-for-sale financial assets amounted to €8 billion at the end of 2011, having decreased
from €10.2 billion twelve months before. They were composed principally as follows:
- the UBI Banca AFS portfolio amounting to €6,706 million (€8,698 million in December
2010);
- the IW Bank portfolio, designed to stabilise that bank’s net interest income given the nature
of its normal operations, amounting to €722 million (€845 million);
1 The management accounting figures relate to a smaller portfolio than that recognised in the consolidated financial statements, because they
exclude equity investments and some minor portfolios, while they 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 77% of the floating
rate securities.
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