UBI Banca Group

2. Other information
Companies in which no equity investment is held, but for which shares have been received as
pledges are excluded from the consolidation scope, in consideration of the purpose of
possession, which is to secure the loan granted and not to exercise control and determine
financial and operating policies in order to obtain the economic benefits deriving from them.
The balance sheet, income statement and statement of cash flows of consolidated companies
which operate with a reference currency other than the euro are translated at the exchange
rate ruling at the end of the year. All the exchange rate differences resulting from the
translation are recognised in a specific reserve in equity. If an investment is disposed of, this
reserve is eliminated with a simultaneous debit or credit to the income statement at the time
of disposal.
International financial reporting standards require the recognition in the financial statements
of corporate events in a manner which reflects the underlying economic substance of them.
No equity investments held directly or indirectly by the Parent with an interest of less than
20% existed at the reporting date over which it is considered it exerted significant influence.
Furthermore, with the exception of equity investments held for merchant banking activities
classified within item 20 “Financial assets held for trading”, no equity investments held
directly or indirectly by the Parent Bank with an interest of more than 20% existed as at the
reporting date over which it is considered it did not exert significant influence.
No significant restrictions existed as at the balance sheet date on the capacity of associate
companies to transfer funds to the investing company in payment of dividends or repayment of
loans or advances.
The reporting dates of the companies valued according to the equity method and of those
consolidated proportionately were the same as that of the Parent.
Section 4 Subsequent events
With regard to the provisions of IAS 10, subsequent to 31 st December 2011, the reporting date,
and until 27 th March 2012, the date on which the draft Annual Report was approved by the
Management Board for submission to the Supervisory Board, no events occurred to make
adjustments to the figures presented in the report necessary.
For information purposes, the following events are mentioned:
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20 th January 2012: in compliance with requests made by the European Banking Authority
(EBA), UBI Banca presented a programme for achieving a core tier one ratio of 9% by 30 th
June 2012. In consideration of the temporary nature of the requested increase, the plan
does not include any possibility of new resort to the market. It relies substantially on the
adoption, by the end of the first half of 2012, of advanced internal models for the
calculation of capital requirements on corporate credit risk, on further action to optimise
risk weighted assets and on self funding. Any requirement remaining as at 30 th June 2012,
will be met, if substantial, by the partial conversion of outstanding convertible debt
instruments;
in January and February 2012, as part of action taken to strengthen the liquidity reserve
consisting of assets eligible for refinancing, UBI Banca took advantage of the opportunity to
issue government backed bonds: on 2 nd January it made two issuances for a total €3 billion
nominal (€2 billion with a three year maturity and €1 billion with a five year maturity),
followed on 27 th February by two additional issuances of €3 billion nominal (€2 billion with
a three year maturity and €1 billion with a five year maturity);
between 7 th February and 12 th March 2012, a public tender offer to purchase was launched
on tier one instruments (preference shares) in issue. The offer made to both qualified and
other investors was taken up for a total nominal amount of €109 million, equivalent to
approximately one fourth of the nominal amount of the securities issued, and it generated a
net gain of approximately €15.8 million recognised in the first quarter of 2012 (see the
section “General banking business with customers: funding” in the Consolidated
Management Report for further information);
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