UBI Banca Group

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- dividends and similar income fell from €3.8 million to €1 million and related to remuneration on investments held in Centrobanca and Arca Sgr; - net commission income of €112.2 million increased by €6.8 million, benefiting from growth in commissions on current accounts (including commitment fees) and also on collection and payment services; - trading, hedging and disposal and repurchase activities generated a loss of approximately €1 million (a profit of €3 million in 2010), attributable mainly to the negative impact of hedges on fixed rate mortgages and losses on the repurchase of financial liabilities, even if profits were recognised on fair value changes in hedges on bonds and domestic currency swap business in relation to swaps on certificates of deposit (primarily with Japanese yen); - other net operating income and expense rose to €3.1 million from €2.7 million the year before. Operating expenses, which fell by €3.1 million to €225.6 million, performed as follows: - personnel expense of €126.6 million increased slightly due to an increase in the average cost of the components of employment contracts, which was only partially offset by the reduction in average personnel numbers; - other administrative expenses, however, fell to €87.4 million (-€3.3 million), due in particular to lower expenses for rent payable, professional and advisory services, outsourced services and postal expenses; - net impairment losses on property, equipment and investment property and intangible assets also fell to €11.5 million, from €12 million the year before. As a result of work performed to improve the quality of loans, commenced as far back as 2008 by improving management and monitoring processes, net impairment losses on loans fell significantly from €51.5 million to €43.3 million (€38 million attributable to specific impairment losses on loans in default) and the loan loss rate fell as a consequence from 0.67% to 0.55%. Net provisions for risks and charges amounted to €1.3 million (€1.1 million in 2010) and related mainly to litigation concerning financial investments and the compounding of interest. As concerns the balance sheet, at the end of year loans to customers had reached €7.8 billion (+1.4% compared to twelve months before), driven by growth in mortgages and other forms of medium to long-term lending (+6.4% to €5.3 billion), while falls were recorded for current account overdrafts (-€0.1 billion to €1.4 billion) and other forms of short term lending (-€0.1 billion to €1.1 billion). The net deteriorated loans of the Bank rose to €661.6 million from €572.3 million in 2010. The trend affected all categories as follows: - net non-performing loans increased by 18.2% to €339.8 million and they increased at the same time as a percentage of total loans from 3.73% to 4.35%; - impaired loans recorded growth of 7.9% to €273.5 million, accounting for 3.5% of total loans (3.29% in December 2010); - restructured exposures almost doubled to €28.9 million due to new classifications of significant counterparties, while positions past due and/or in arrears amounted to €19.4 million (€15.7 million the year before), of which €11.6 million attributable to exposures in arrears for between 90 and 180 days backed by mortgages. Direct funding of €6.4 billion fell by 6% over twelve months. Within the item, securities issued fell to €2.1 billion (-€0.3 billion), affected mainly by the early redemption of a bond (€350 million) subscribed by the Parent, while growth was recorded in the item “Other certificates” (+€0.1 billion), composed mainly of certificates of deposit denominated in foreign currency (primarily Japanese yen). However, the fall in amounts due to customers was more modest (-€0.1 billion to approximately €4.4 billion), in relation to new demand for repurchase agreements by customers. In a particularly difficult market context, indirect funding also decreased to €3.5 billion from €3.8 billion in December 2010, penalised by negative performance by all components of assets 177
under management, which fell overall to €1.6 billion (-16.9%), and by mutual funds and Sicav’s in particular (-€0.2 billion to €0.6 billion). Assets under custody on the other hand increased slightly (+1.2% to approximately €2 billion), benefiting above all from the contribution of €0.2 billion made by bonds issued by the Parent and by third parties. At the end of year the net interbank position again consisted of debt of €0.8 billion (-€0.2 billion in December 2010), due to the maturity of term deposits held with the Parent and, in terms of liabilities, to new term deposits made by the Parent, designed to maintain structural balance. Capital ratios consisted of a tier one ratio (tier one capital to risk weighted assets) of 15.84% (15.13% in 2010) and a total capital ratio (supervisory capital and reserves to risk-weighted assets) of 16.27% (15.57%). The proposal for the allocation of profit is to distribute dividends of €2.1 million after an allocation to the extraordinary reserve of €131 thousand and an allocation of €90 thousand to a fund available to the Board of Directors. 178
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Joint stock co-operative company Re
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▪ Principal risks and uncertainti
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REPORT ON CORPORATE GOVERNANCE AND
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A low risk profile The Group has no
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UBI Banca: company officers Honorar
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UBI Banca Group: the main investmen
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The rating As the sovereign debt cr
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Notice of call 1 An Ordinary Genera
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The macroeconomic scenario In a gen
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Monetary policy action taken by the
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imports (+24.9%) than in exports (+
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permanently balance public accounts
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In the light of the very serious cr
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total of the variable component of
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The “hour glass” shaped distrib
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dynamic use of credit recovery serv
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The contribution of the outstanding
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4 th -7 th July 2011 (offer period
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Action undertaken on the branch net
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Disposal of UBI Pramerica SGR opera
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Finally, the UBI Banca Group increa
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• the “Italian Banking Associat
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- the global financial crisis, whic
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As a result of new loan disbursemen
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Again with regard to financial educ
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As concerns the Foreign-Commercial
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This dialogue with customers is not
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The distribution network and positi
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The Italian distribution network of
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Remote channels Market coverage by
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• private individual customers ca
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Human resources The composition of
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The percentage of part-time employe
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Personnel management policies and i
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• the implementation of the “Va
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editions were published in 2011). A
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15. Barberini Sa (100% controlled)
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Companies consolidated using the eq
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- 22 nd February 2011: UBI Banca de
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total price of €77 million. Conse
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Reclassified consolidated financial
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Reclassified consolidated income st
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Reclassified consolidated income st
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Notes to the reclassified consolida
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marked improvement compared to €8
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elation to higher volumes of busine
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equity investments (including PerMi
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(+0.9%). The changes summarise the
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Brescia and €116.3 million of imp
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- the partial non deductibility of
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The comments that follow are based
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Total funding Total group funding,
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On the other hand, while significan
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In detail, institutional funding wa
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The public tender offer to purchase
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As concerns mutual investment funds
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General banking business with custo
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The ratio of lending to funding in
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The change recorded was caused by a
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unsecured non-performing loans (€
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Loans to customers: changes in dete
Page 127 and 128: The interbank market and the liquid
Page 129 and 130: Loans to banks: composition Changes
Page 131 and 132: The collateral pool also benefited
Page 133 and 134: Financial assets The year 2011 was
Page 135 and 136: - the Centrobanca corporate bond po
Page 137 and 138: Financial instruments held for trad
Page 139 and 140: Financial liabilities held for trad
Page 141 and 142: As concerns, on the other hand, por
Page 143 and 144: Exposures to some types of products
Page 145 and 146: SPE underlying assets Figures in mi
Page 147 and 148: The table below summarises on- and
Page 149 and 150: OTC interest rate derivatives: deta
Page 151 and 152: OTC derivatives: first five counter
Page 153 and 154: Fair value reserves of available-fo
Page 155 and 156: illion) and on the other hand for t
Page 157 and 158: The system of internal control The
Page 159 and 160: from the scope of the regulations f
Page 161 and 162: Consolidated companies: the princip
Page 163 and 164: Direct funding from customers Figur
Page 165 and 166: The performance of the main consoli
Page 167 and 168: exposures secured by real estate pr
Page 169 and 170: million) and other services (+€5.
Page 171 and 172: BANCA POPOLARE COMMERCIO E INDUSTRI
Page 173 and 174: accounts and deposits and term depo
Page 175 and 176: - net interest income reached €16
Page 177: BANCA POPOLARE DI ANCONA SPA Figure
Page 181 and 182: million) and the repurchase of own
Page 183 and 184: CENTROBANCA SPA Figures in thousand
Page 185 and 186: principally to new classifications
Page 187 and 188: - the net result for financial acti
Page 189 and 190: IW BANK SPA Figures in thousands of
Page 191 and 192: overdrafts, while the remaining €
Page 193 and 194: y the “Company restructuring prog
Page 195 and 196: UBI PRAMERICA SGR SPA Figures in th
Page 197 and 198: UBI FACTOR SPA Figures in thousands
Page 199 and 200: impaired loans - attributable mainl
Page 201 and 202: managers of Banca Popolare Commerci
Page 203 and 204: Development Decree - Decree Law No.
Page 205 and 206: ‐ the tax treatment of provisions
Page 207 and 208: a different criterion is used to ca
Page 209 and 210: Further details of tax inspections
Page 211 and 212: In 2011, UBI Banca obtained visibil
Page 213 and 214: meetings with representatives of bo
Page 215 and 216: Legislation on the protection of pe
Page 217 and 218: • risks defined as measurable, fo
Page 219 and 220: uncertainty surrounding the outcome
Page 221 and 222: Compliance of corporate health and
Page 223 and 224: STATEMENT OF THE CHIEF EXECUTIVE OF
Page 225 and 226: Certification of the consolidated f
Page 227 and 228: Independent auditors’ report 226
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228
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Consolidated Balance Sheet
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Consolidated Income Statement figur
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Statement of changes in consolidate
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Consolidated Statement of Cash Flow
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PART A - Accounting policies A.1 -
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Accounting policies The accounting
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The income statement of the investo
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39. UBI Finance Srl Milan euro 10,0
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▪ ▪ ▪ 14 th March 2012: the U
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consequent absence of taxable incom
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List of the main IFRS standards end
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Reg. 1126/2008, SIC 7 Introduction
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1.2. Definition of financial assets
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performance by stock markets rather
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3.4 Derecognition criteria Held-to-
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original loan contract, or in the p
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The methods used for measurement of
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6.3 Measurement criteria Investment
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individual renewals, or if the asse
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An intangible asset is recognised i
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(a) within asset item 120 of the ba
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10.1. Current tax assets and liabil
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might affect the amount required to
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14.3.2 Post-employment benefits and
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Interest is recognised on an accrua
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Level 2 Where no prices are availab
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A.3.2.1 Accounting portfolios: dist
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2.2 Financial assets held for tradi
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3.3. Financial assets at fair value
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4.4 Available-for-sale financial as
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6.2 Loans to banks: assets subject
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- 5 % auto sector; - 3 % aeronautic
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SECTION 10 Equity investments - Ite
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10.3 Annual changes in equity inves
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SECTION 11 Technical reserves of re
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These valuation methods were perfor
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Details of the item “Goodwill”
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13.2 Annual changes in intangible a
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comparable transactions for corpora
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Second level impairment test Becaus
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Cash Generating Unit Increase in th
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No deferred tax assets were recogni
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14.7 Other information The tables a
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15.2 Other information Nothing to r
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SECTION 2 Due to customers - Item 2
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Details of item A.1 “Subordinated
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SECTION 4 Financial liabilities hel
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6.2 Hedging derivatives: compositio
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11.2 Other information The demograp
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demographic tables; the characteri
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Changes in liabilities in 2011 for
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The economic and financial assumpti
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• degree of “innovation” in t
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year, for 2004 the tax authorities
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Banca Carime (2003 and 2004) increa
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15.2 Share capital - Number of shar
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Also, with regard to the conversion
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UBI Leasing SpA + €353 thousand R
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5. Management and intermediation on
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1.4 Interest expense and similar: c
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2.2 Commission expense: composition
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SECTION 6 Income (loss) from dispos
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8.2 Net impairment losses on availa
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SECTION 9 Net premiums - Item 150 9
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SECTION 12 Net provisions for risks
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SECTION 16 Profits (losses) of equi
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SECTION 19 Profits (losses) on disp
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SECTION 21 Post-tax profit after ta
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(v) (vi) (vii) (viii) (ix) (x) on 5
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368
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- AMA) - in combined use with the t
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1.2 Policies for the management of
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- it works with the Rating Desk and
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Credit processes within the network
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Credit risk management policy A pro
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Policy for the distribution of mort
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- pledge. In the case of mortgage c
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Quantitative information A. Credit
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A.1.3 Banking Group - On- and off-b
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A.1.7 Banking Group - On-balance sh
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A.3.1 Banking Group - Guaranteed/se
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B. Distribution and concentration o
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B.3 Banking group - Geographical di
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of a loan portfolio was signed, whi
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• performing loans resulting from
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Orio Finance 3 Originator UBI Banca
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Tabella 7: 190090O|1 - NOTA C.1.6 I
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C.2 Transfers C.2.1 Financial asset
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C.3 Banking Group - Covered bond op
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transferred. Each of these swaps ha
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3. management of the operations. Th
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Subsequently, in November 2011, aft
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D. Banking group - Models for the m
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one day VaR limit for the UBI Group
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Backtesting analysis Backtesting an
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The analysis shows a very heightene
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different hypotheses for the elasti
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2.3 Currency risk Qualitative infor
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2.4 Derivative financial instrument
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A.3 Financial derivatives: gross po
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A.7 OTC financial derivatives: bank
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B. Credit derivatives B.1 Credit de
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The system for the management of li
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Quantitative information 1.1 Distri
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1.3 Distribution over time by resid
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1.5 Distribution over time by resid
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4 BANKING GROUP - OPERATIONAL RISKS
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- Local Operational Risk Support Of
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16031). It must also be underlined
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Quantitative information The graphs
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Operational losses detected in 2011
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B. Quantitative information Informa
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Section 2 - Capital and banking sup
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deductions and negative filters, to
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PART G - Business combination trans
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the consolidated income tax act) co
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Transactions with related parties -
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Principal income statement items wi
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it is calculated on the basis of th
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Distribution by business segment: b
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Assistance activities (risk assessm
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UBI Banca Group

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