UBI Banca Group

million) and the repurchase of own bonds on the secondary market (-€1.6 million), while
profits were earned on securities trading (+€0.9 million);
- other operating income and expenses increased from €4.6 million to €10 million, benefiting
from an insurance reimbursement of approximately €4 million.
As concerns operating expenses:
- personnel expense fell by 5.4%, to €144.9 million, attributable mainly to a reduction in
average personnel numbers, while variable components of remuneration increased;
- other administrative expenses of €94.7 million remained almost unchanged compared to
2010 (+0.4%). Within the item, increases were recorded in “fees for services provided by
Group companies” (+€1.3 million), “insurance premiums” (+€1.2 million) and “tenancy of
premises” (+€0.9 million), while expenses decreased for “professional and advisory services”
(-€0.8 million), “outsourced services” (-€0.7 million), “postal expenses”
(-€0.6 million) and “telephone and data transmission” expenses (-€0.5 million);
- net impairment losses on property, equipment and investment property and intangible
assets also remained stable at €14.1 million (€14.6 million).
As a result of these changes, the cost:income ratio improved by almost six percentage points,
falling from 74.1% to 68.3%.
Net impairment losses on loans fell slightly to €22.8 million (€22.9 million twelve months
before), the result of a reduction in collective impairment losses (-€5.1 million) and an increase
in specific net impairment losses (+€5 million).
Net impairment losses on other assets/liabilities were again marginal at €0.5 million (€0.4
million), while net provisions for risks and charges amounted to €2.7 million consisting mainly
of provisions made for litigation with customers for compounding of interest (in 2010 the item
consisted of net reversals of €0.9 million).
Finally net operating income for the year included an expense of €11.4 million, the net result of
an impairment loss of €12.1 million on goodwill and gains on the sale of properties of €0.7
million.
As concerns the balance sheet, loans to customers rose to €4.9 billion with growth of €0.1
billion (+2.1%), driven by growth in medium to long-term lending (+€0.2 billion), consisting
principally of mortgages, which now accounts for 71.6% of the loan portfolio, while a
generalised fall was recorded by short term loans (-€0.1 billion).
The continuation of the economic crisis in a local economy, which was already particularly
fragile, was reflected in a decline in the quality of credit, with an increase in net deteriorated
loans to €270.5 million (+€85.9 million). In detail, net non-performing loans increased (+€35
million to €93.9 million) as did net impaired loans (+54.3 to €162.3 million), while slight
decreases occurred for restructured exposures (-€0.1 million to €2.1 million) and past due
exposures (-€3.3 million to €12.2 million), which included €8.7 million of exposures in arrears
for between 90 and 180 days secured by real estate property.
Direct funding from customers, totalling €7.6 billion, remained unchanged compared to the
year before. Within the item, amounts due to customers remained stable at €5.2 billion as did
securities issued at €2.4 billion, while a partial change in the composition occurred within the
item, out of bonds and into certificates of deposit, mainly into certificates of deposit
denominated in yen.
On the other hand indirect funding from customers amounting to €5.4 billion, fell by €0.4
billion due to decreases in assets under management (-0.8 billion to €2.9 billion), penalised by
significant declines in mutual investment funds and Sicav’s (-€0.7 billion to €1.6 billion). On
the other hand assets under custody rose to €2.5 billion (+€0.4 billion), as a result of the
placement of bonds issued by third parties and by the Parent in particular (a total increase of
€0.4 billion nominal).
At the end of 2011 the net interbank position consisted of funds of €3.6 billion (-€0.1 billion
compared to the end of 2010), a reflection of the significant liquidity held by the Banca.
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