UBI Banca Group

Financial instruments held for trading
Financial assets held for trading
Asset item 20, “Financial assets held for trading”, comprises financial trading instruments “used to
generate a profit from short-term fluctuations in price”. They are recognised at fair value through profit or
loss – FVPL.
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.
Financial assets held for trading: 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 %
A. On-balance sheet assets
Debt instruments 2,135,752 84 - 2,135,836 1,964,319 11,013 - 1,975,332 160,504 8.1%
of which: Italian government
securities 1,873,865 - - 1,873,865 1,870,026 - - 1,870,026 3,839 0.2%
Equity instruments 12,811 - 85,850 98,661 72,856 2 104,082 176,940 -78,279 -44.2%
Units in O.I.C.R.
(collective investment instruments) 447 101 1,447 1,995 512 54 1,601 2,167 -172 -7.9%
Financing - 38,939 - 38,939 - 64,171 - 64,171 -25,232 -39.3%
Total (a) 2,149,010 39,124 87,297 2,275,431 2,037,687 75,240 105,683 2,218,610 56,821 2.6%
B. Derivative instruments
Financial derivatives 220 596,766 - 596,986 1,014 509,601 3,526 514,141 82,845 16.1%
Credit derivatives - - - - - - - - - -
Total (b) 220 596,766 - 596,986 1,014 509,601 3,526 514,141 82,845 16.1%
Total (a+b) 2,149,230 635,890 87,297 2,872,417 2,038,701 584,841 109,209 2,732,751 139,666 5.1%
Financial assets held for trading had risen to €2.9 billion as at 31 st December 2011, (up by
€0.1 billion compared to the previous year), as a result of the performance by debt
instruments 8 (+€0.2 billion). The basic stability of Italian government securities – almost 90%
of the total – is the result of considerable fluctuations that occurred during the year. Disposals
and maturities progressively reduced the total to €0.5 billion in the first half, while mainly
short-term (up to three years) BOTs and BTPs were purchased from the third quarter onwards
– favoured, amongst other things, by the significant fall in prices – which brought the total for
government securities to almost €1.9 billion.
The total also includes over €234.4 million of government securities issued by France and
Germany.
Equity instruments decreased during the year from €177 million to €98.7 million. Disposals of
fair value level one instruments by UBI Banca (-€38.3 million) and by Centrobanca (-€21.7
million) accounted for €60 million of this reduction.
For the Parent, this consisted of the disposal of an equity portfolio managed under a mandate
by UBI Pramerica SGR (European equities classified here amounted to €39 million as at 31 st
December 2010). The new management strategy employed in the first quarter of 2011 was
oriented towards investments in UBI Pramerica mutual funds, classified under the fair value
option, initially amounting to €330 million, which were completely disposed of in the following
September due to turbulence on financial markets (see the following sub-section in this
respect).
For Centrobanca, this consisted of the disposal of an equity instrument subscribed in
December 2010 and disposed of in January 2011.
8 Debt instruments included residual direct investments in “Asset Backed Securities”, all held by the subsidiary, UBI Banca
International Sa, consisting mainly of mortgage backed securities (MBS), with the underlying assets principally of European origin
amounting to €0.3 million (€0.5 million twelve months before). At the end of the year, on the other hand, a structured product
matured – similar in terms of risk to ABS instruments – also held by UBI Banca International Sa, with a book value of €2.6 million in
December 2010.
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