UBI Banca Group

• degree of “innovation” in the litigation, to be assessed by considering whether the issues
turn on matters already known and “weighed” by the Bank or on completely new matters which
therefore require study (e.g. resulting from a change in the legislation or in legal orientations);
• degree of “strategic importance” of the litigation to the bank: for commercial reasons the
Bank might for example decide to end a case very rapidly even if it had grounds of defence that
would allow it to resist in court for a long time;
• average length of litigation, to be weighted taking account of geographical factors, which is to
say the location of the jurisdiction in which the case is tried and the state of progress of the trial.
In this respect a decision must be taken on the source of the statistics from which data is
obtained and assistance can be obtained from the lawyers who represent the Bank in litigation
and who have direct knowledge of the jurisdictions concerned for each case;
• the “nature” of the counterparty (e.g. a private individual or a legal entity, a professional
operator or not, a consumer or not, etc.).
A contingent liability is defined as:
• a possible obligation, the result of past events, the existence of which will only be confirmed
by the occurrence or (non occurrence) of future events that are not totally under the control of
the enterprise;
• a present obligation that is the result of past events, but which is not recognised in the
accounts because:
it is improbable that financial resources will be needed to settle the obligation;
the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the financial statements but are only reported, unless
they are considered a remote possibility. In the latter case, in compliance with IAS 37, no
information is given on them in the notes to the financial statements.
Amounts for contingent liabilities are also subject to periodic verification because it is possible
that events may occur which make them remote or probable with the possible need, in the latter
case, to make a provision for them in the financial statements.
A list of contingent liabilities of a tax nature are listed below to which the Bank has attributed a
possible risk.
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