UBI Banca Group

In consideration of the specific federal organisation of the UBI Group, the Parent decided to adopt a
“focused” model for the management of corporate customers common to more than one network bank
on the basis of which, briefly:
- decisions relating to credit risk management, pricing and the formulation of commercial policies for
customers common to two or more banks are centred on a lead bank, termed the pivot bank, thereby
avoiding the generation of a decrease in the overall profitability on the counterparty;
- non pivot banks abstain from opening new accounts and/or from granting new credit facilities.
A Pivot Bank may be defined as the bank which has the best chances, with its own business units, of
arranging new business and/or intensifying existing business with the customer in common, in order
to draw the greatest possible benefit for the whole banking Group. It therefore directs the other banks
involved with regard to the most appropriate conduct to follow to improve business with the customer
as a whole.
The various organisational units in banks and product companies are responsible for credit and
commercial activities and they also hold responsibility for monitoring both the activity they perform
directly and that performed by those units which report to them. More specifically, responsibility for
managing and monitoring performing loans lies in the first instance with the account managers who
handle daily relationships with customers and who have an immediate perception of any
deterioration in credit quality. Nevertheless, all employees of Group member companies are required
to promptly report all information that might allow difficulties to be identified at an early stage or
which might recommend different ways of managing accounts, by concretely participating in the
monitoring process.
In the second instance, the organisational unit responsible for monitoring credit risk is the Credit
Quality Management and Monitoring Unit, which carries out monitoring, supervision and analysis of
performing positions on both a case by case and a collective basis, where the intensity and degree of
detail of the analysis is a function of the risk class attributed to the counterparties and the
seriousness of the performance problems. This unit, not involved in loan approval procedures, either
on its own initiative or on submission of a proposal, may assess a position and decide (or propose to
a superior decision-making unit when the decision does not lie within its powers), to change the
classification of performing counterparties to a more serious status. In these cases it asks, through
its Credit Department, the Credit Area of UBI Banca to issue a prior non binding opinion in those
cases where Credit Authorisation Regulations require it. The Portfolio Policy and Quality Service in
the UBI Banca Credit and Credit Recovery Macro-Area is responsible for co-ordinating and defining
guidelines for monitoring the lending portfolio, overseeing the development of monitoring tools,
monitoring credit policies and preparing management reports.
Furthermore an “arrears management” system is operational, designed to preserve and protect
customer relationships through the prompt resolution of lending irregularities (late
repayments/unauthorised overdrafts) detected on performing private individual and “small economic
operator” customers by providing centralised support contact with customers to normalise problem
loan positions.
The Risk Management Area is located in the Risk Control Macro Area and it performs the following
through its Credit Risk Service:
– it defines, in co-operation with the Methods and Models Service, Group criteria and
methodologies for the development of internal rating models – probability of default (PD), loss
given default (LGD), and exposure at default (EAD) – in line with regulatory requirements and
best practices;
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