UBI Banca Group

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have branches (Poland, Spain and Germany), with a significant diversification by business sector 22 . The extension of that business generated natural growth in operating relationships with other correspondents, mainly Turkish, but also in Spain, where intragroup synergies are being developed with UBI Banca International. The following is reported with regard to equity investments: • the liquidation period for Tex Factor Spa was concluded with the redemption of shares to shareholders, in accordance with a resolution passed by an extraordinary shareholders meeting of the Company itself held on 11 th February 2011. UBI Factor derecognised its investment with a profit of €84 thousand; • Siderfactor Spa was placed in voluntary liquidation with a resolution passed by an extraordinary shareholders meeting on 12 th December 2011, with effect from 11 th January 2012. The liquidation should be completed in 2012 with the disposal of all the assets and the extinction of the liabilities recognised. The year 2011 ended with a profit of €8.6 million, a decrease compared to €18.6 million the year before, the result primarily of recognised higher impairment losses. Net operating income amounted to €29.7 million, down on 2010 (-€1.9 million; -5.9%), the aggregate result of growth in operating expenses (+€3.2 million to €24.9 million) only partly offset by an improvement in income (+€1.3 million to €54.6 million). The trend for income was the result of net interest income, which rose to €38.3 million (+€3.5 million; +10%) – due to increases in advances and a focus on more profitable business – and other net operating income and expense, which increased to €3.6 million (+€1.5 million mainly for recoveries of expenses; +68.8%), while net commission income fell to €12.6 million (-€3.6 million; -22.2%), mainly as a result of greater sums paid to Group banks on the basis of a commercial co-operation agreement signed in 2008. On the expenses front, on the other hand, other administrative expenses increased to €12.3 million (+€2.5 million; +24.9%), attributable primarily to legal expenses for litigation concerning amounts owed by the health department of the Regional Government of Latium and also expenses for the migration to the new IT platform. Personnel expense, which increased to €11.7 million (+€0.6 million; +5.1%), included a provision for 2011 performance bonuses and the relative contributions of €0.2 million, while the increase in depreciation and amortisation related almost entirely to intangible assets. As a consequence, the cost:income ratio worsened by almost five percentage points, rising from 40.7% to 45.6%. Net impairment losses on loans rose from €3.1 million to €14.8 million (+€11.7 million), attributable principally to loans to public administrations, no longer considered core business for the Company. They included €9.5 million relating to the exposure to Fondazione Centro San Raffaele del Monte Tabor, details of which are given in the previous section “Banking business with customers: lending”. As concerns volumes of business, despite the discontinuation of business with public administrations, the turnover for business generated during the year amounted to €8.2 billion (+8.6%), including €7.8 billion of factoring business (+10%). Consequently, advances to customers rose to approximately €2.9 billion (including 3% for the Polish branch), an increase of 4.5% compared to €2.7 billion twelve months before. The performance within net deteriorated assets, which increased from €17.3 million to €63.6 million (+€46.3 million), was as follows: non-performing loans increased from €11.5 million to €36.5 million (+€25 million, including €21.5 million relating to the classification of the exposure to San Raffaele, already mentioned, as non-performing); 22 Negotiations to acquire the Turkish company Strateji Factoring Hizmetleri A.S. were interrupted because of a change in the orientation by some of the shareholders in the company being acquired, who wished to make changes to some terms of the contract and to policies, which were not considered acceptable to UBI Factor and the Parent in terms of legitimacy and feasibility. However, this did not affect the validity of the existing commercial agreement with Strateji Factoring concerning export factoring, which benefited in 2011 from increases in volumes of business. 197
impaired loans – attributable mainly to receivables purchased from public administrations and classified as deteriorated exposures because of the remaining duration of the advance and not on the basis of the collectability – increased slightly to €4.5 million (+€0.3 million); advances past due and in arrears totalled €22.6 million, an annual increase of €21 million, two thirds of which consisting of positions with public administrations. Capital ratios as at 31 st December 2011, consisted of a tier one ratio (tier one capital to risk weighted assets) of 7.05% (7.55% at the end of 2010) and a total capital ratio (supervisory capital and reserves to risk-weighted assets) of 7.04% (7.53%). The proposal for the allocation of profits is to distribute dividends of €1.04 million. 198
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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
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The interbank market and the liquid
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Loans to banks: composition Changes
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The collateral pool also benefited
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Financial assets The year 2011 was
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- the Centrobanca corporate bond po
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Financial instruments held for trad
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Financial liabilities held for trad
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As concerns, on the other hand, por
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Exposures to some types of products
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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 and 178: BANCA POPOLARE DI ANCONA SPA Figure
Page 179 and 180: under management, which fell overal
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: UBI FACTOR SPA Figures in thousands
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
Page 229 and 230: 228
Page 231 and 232: Consolidated Balance Sheet
Page 233 and 234: Consolidated Income Statement figur
Page 235 and 236: Statement of changes in consolidate
Page 237 and 238: Consolidated Statement of Cash Flow
Page 239 and 240: PART A - Accounting policies A.1 -
Page 241 and 242: Accounting policies The accounting
Page 243 and 244: The income statement of the investo
Page 245 and 246: 39. UBI Finance Srl Milan euro 10,0
Page 247 and 248: ▪ ▪ ▪ 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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