UBI Banca Group

The “hour glass” shaped distribution model
The revision of the distribution model of the Group’s network banks continued as an
organisational requirement designed to strengthen the Group’s “local banking” identity by
redefining departmental and network bank units and streamlining commercial, credit and loan
approval processes at the same time.
The “hour glass” model, which was already operational at the time of this report, introduced
“Local Headquarters”, the main points of reference for “Local Banks” as key units in the
commercial process for all customer segments and markets (branches, CBUs and PBUs), with
a twofold organisational interconnection: cross market (retail, private banking, corporate) and
cross process (commercial and credit). The new headquarters will be responsible for the most
significant commercial, credit and operational risk aspects, developing relationships with local
customers and with major clients and opinion leaders (“local social capital”).
The establishment of “micro-areas” within local areas was continued and strengthened with
the extension of the retail branch co-ordination model based on “head branches” and “grouped
branches”.
The first implementation action – in the commercial sphere – commenced on 1 st August 2011
(Stage 1) with the introduction of the new “hour glass” model, applied on a flexible basis to
take account of local differences, customer portfolios and the characteristics of individual
network banks. The introduction involved the following:
- the revision of the structures of the Commercial Areas of the network banks (with the
creation of specialist units to support Commercial Department Heads);
- the start-up of Local Headquarter units with a consequent revision of the distribution
structure;
- the revision of commercial processes (approval of interest rates and conditions) consistent
with the new organisational units;
- the refinement of customer segmentation criteria with a view to the following: expanding the
retail business segment by grouping it with the lower corporate segment (managed by the
Retail Market since 2012); a stronger focus on the more complex affluent (Premium)
customers and on SMEs; more active management of SEO customers (small economic
operators) not allocated, assigned to affluent/mass market team account managers; finally;
more effective specialisation for the large corporate segment (only for BPB, BBS, BPCI and
BRE);
- the revision of the overall structure of local private and corporate banking facilities (CBUs,
PBUs and the relative “corners”), which was completed in January 2012.
The completion of the changes in credit operations (Stage 2), which took place in January
2012, with the revision of network bank credit units and a new loan approval process, which
involved the following:
- the revision of the organisation of Credit Departments in the standard model, adopted by
the larger network banks of the Group, with the introduction of Local Credit Units (the
former local loan approval centres), specialist local units, physically close to Local
Headquarters;
- the introduction of customer contacts for Credit Quality in Local Headquarters;
- the creation of Local Loan Approval Committees (LLACs), bodies which approve loans with a
joint commercial/credit signature, designed to increase synergies between both processes
and to “develop a credit culture”.
Mass market team/Developers
The “hour glass” model is completed at branch level by the mass market team (responsible for
the management of branch mass market portfolios) and by the presence of developers (who
report directly to Local Headquarters).
In fact a standard branch has two quite separate areas of commercial operations: specialist
(small business and affluent) and pooled operations (reserved to mass market operations).
The creation of mass market teams (MMTs), using a pool approach, is designed to optimise the
use of human resources previously dedicated to operating activities and the management of
mass market customers. It involves branch personnel and simplifies the relative products and
improves service costs at the same time, as the result of exploiting “interchannel” management
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