UBI Banca Group

million) and other services (+€5.3 million; inclusive of commitment fees), which more than
compensated for the contraction in commissions from the placement of securities (-€6.2
million), attributable primarily to a fall in the placement of third party bonds;
- trading, hedging and disposal and repurchase activities generated income of €1.4 million (a
loss of €1.5 million in 2010), the result of opposing performance by the individual items:
losses on fixed rate mortgage hedges (-€2.4 million) and repurchases of financial liabilities (-
€0.4 million) were offset by profits on fair value changes in bond hedges (€1.8 million) and
business in domestic currency swaps, in relation to swaps on certificates of deposit
(totalling €1.6 million);
- the residual item, other net operating income and expense, amounted to €14.9 million,
unchanged compared to the year before.
Expenses, down to €312.8 million, performed as follows:
- personnel expense of €173.7 million rose slightly (+0.5%) due principally to growth in the
average cost of the various components of income, which was only partially offset by a
decrease in average personnel numbers;
- other administrative expenses of €128.8 million fell significantly (-€4.5 million) – which by
themselves account for the decrease in the whole aggregate – the result of a careful policy to
monitor expenses and improve efficiency. The main savings were made on “telephone and
data transmission expenses” (-€3.2 million) 5 , “postal expenses” (-€0.8 million) and
“outsourced services” (-€1.4 million), while increases were recorded by “fees for services
provided by Group companies” (+€1.7 million) and “tenancy of premises” expenses (+€0.6
million);
- impairment losses of €10.3 million on tangible and intangible assets decreased by €0.8
million compared to the previous year.
As a result of the performance reported above, the cost:income ratio fell from 59.1% to 57.7%.
Net impairment losses on loans fell to €65.7 million compared to €97.9 million in 2010 which
included an impairment loss for a large amount on a non-performing position.
Specific impairment losses on non-performing loans amounted to €60.7 million (€77.2 million),
of which €48.1 million on non-performing loans, while collective impairment losses on
performing loans amounted to €5 million (€20.7 million the year before). As a consequence, the
loan loss rate fell to 0.48% (0.65% in 2010).
Net impairment losses on other assets and liabilities were recognised amounting to €2.5
million (€0.8 million in 2010). The item includes impairment losses on securities classified
within the available-for-sale portfolio relating to equity investments held in the companies
Immobiliare Fiera di Brescia and Risparmio & Previdenza Spa (a total of €1.6 million).
Net provisions for risks and charges increased from €2.9 million to €5.7 million, a reflection of
greater charges for revocation clawback actions and legal action relating to compounding of
interest.
As concerns balance sheet items, loans to customers amounted to €13.6 billion, a fall of 10.1%
year-on-year, attributable to a reduction in short-term loans: current account overdrafts (-€0.4
billion to €2.2 billion) and other transactions (-€1.3 billion to €2.2 billion), while mortgages and
other forms of medium to long-term lending held firm (+€0.2 billion to €9.1 billion), now
accounting for 67.1% of total lending.
At the end of the year, the net deteriorated loans of the Bank had risen to €838 million
(+12.3% million euro over twelve months). In detail, increases were recorded for net nonperforming
loans (up from €184.9 million to €220.2 million) and impaired loans (up from
€318.7 million to €384.9 million), while slight decreases occurred for restructured exposures
(down from €201.5 million to €194.7 million) and positions past due and/or in arrears (down
from €41 million to €38.3 million), which included €26.8 million of exposures in arrears for
between 90 and 180 days secured by mortgage collateral.
5 Due, amongst other things, to the absence of an expense for participation in a guarantee system designed to cover the costs of
damages resulting from the fraudulent use of magnetic strip cards (subject to mass replacement with cards fitted with microchips in
2011).
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