UBI Banca Group

Capital adequacy
Capital ratios (Basel 2 standardised approach)
Figures in thousands of euro 31.12.2011 31.12.2010
Tier 1 capital before filters 8,075,253 6,766,798
Preference shares and savings/privileged shares attributable to non-controlling interests 489,191 489,191
Tier 1 capital filters -137,541 -73,593
Tier 1 capital after filters 8,426,903 7,182,396
Deductions from tier 1 capital -150,625 -134,508
Tier 1 after filters and specific deductions (Tier 1) 8,276,278 7,047,888
Supplementary capital after filters 4,305,074 3,770,505
Deductions from supplementary capital -150,625 -134,508
Supplementary capital after filters and specific deductions (Tier 2) 4,154,449 3,635,997
Deductions from tier 1+supplementary capital -148,574 -147,685
Total supervisory capital 12,282,153 10,536,200
Credit and counterparty risk 6,746,523 6,952,925
Market risk 73,545 106,636
Operational risk 460,749 489,312
Other prudential requirements - -
Total prudential requirements 7,280,817 7,548,873
Subordinated liabilities Tier 3
Nominal amount - -
Amount eligible - -
Risk weighted assets 91,010,213 94,360,909
Core tier 1 ratio after specific deductions from tier 1 capital (tier 1 capital net of preference
shares/risk weighted assets) 8.56% 6.95%
Tier 1 capital ratio
(tier 1 capital/Risk weighted assets) 9.09% 7.47%
Total capital ratio
[(Supervisory capital+tier 3 eligible)/risk weighted assets] 13.50% 11.17%
With a provision of 18 th May 2010 and a later communication of 23 rd June 2010 (“Clarification of supervisory measures concerning supervisory capital –
prudential filters”), the Bank of Italy issued new supervisory instructions for the treatment of fair value reserves relating to debt instruments held in the
“available-for-sale financial assets” portfolio for the purposes of calculating supervisory capital (prudential filters). More specifically, as an alternative to the
“asymmetric approach” (full deduction of net losses from the tier one capital and inclusion of 50% of the net gains in the tier two capital) already provided for
by Italian regulations, it was permitted – in compliance with 2004 CEBS guidelines – to completely neutralise gains and losses recognised in the reserves
mentioned (“symmetrical approach”) subsequent to 31 st December 2009, but limited to securities issued by the central governments of countries belonging to
the European Union. The Group decided to take advantage of the option and reported the decision to the Bank of Italy on 29 th June 2010. It was therefore
applied uniformly by all members of the banking Group, commencing with the calculation of supervisory capital as at 30 th June 2010.
The supervisory capital of the UBI Banca Group amounted to €12.3 billion as at 31 st
December 2011, an increase compared to €10.5 billion at the end of 2010 (+€1.8 billion), the
result of increases in both the tier one capital and the tier two capital.
The increase in the tier one capital (up €1.2 billion to €8.3 billion) mainly reflects the results of
the increase in the share capital completed in July, but also the elimination of the negative
filter regarding the substitute tax on goodwill and the increases in deductions and negative
filters, together with a fall in capital attributable to non-controlling interests.
Changes in the tier two capital (up €0.5 billion to €4.2 billion), on the other hand, were
attributable almost entirely to the trends for subordinated bonds, notwithstanding the
increase in negative filters and deductions. More specifically, the issue of subordinated
liabilities sold to retail customers of the Group (+€1 million) more than compensated on the
one hand for issues matured/redeemed/amortised during the year (approximately -€0.5
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