UBI Banca Group

exposures past due and/or continuously in arrears;
restructured positions;
impaired loans;
non-performing loans.
In addition to those classes, there remains a type of problem loan in respect of “country risk” for
unsecured exposures to institutional and ordinary customers belonging to countries considered as
“at risk” as defined by the supervisory authority. With regard to “impaired” loans, in order to optimise
management and solely for operational purposes, these are divided into positions for which it is
considered that the temporary situation of objective difficulty can be overcome in a very short period
of time (nine months) and the remaining positions, for which it is felt best to disengage from the
account with credit recovery out of court over a longer period of time. Additionally, loans past due
and/or continuously in arrears are subject to controls to decide, within a maximum operational
period of 60 days, whether to reclassify them as either “performing” or into another non-performing
loan class.
The management of problem loans is performed on the basis of the level of risk. It is performed by the
organisational units responsible for the management of problem loans of individual banks and
product companies. For “non-performing loan” positions of the network banks (limited to those
positions for which the management centralisation process has been completed) and Centrobanca
(from January 2012 for the latter), managemement is by the Non-Performing Loans Service of the
Credit and Credit Recovery Macro Areas of the Parent where the centralised management process was
completed.
Assessment of the appropriateness of impairment losses recognised is performed on a case by case
basis for individual positions to ensure adequate levels of cover for expected losses.
The analysis of deteriorated exposures is performed continuously by the single operational units
which manage risks and by the Parent.
The resolution of difficulties by counterparties is a determining factor for the return of positions to
“performing” status. This event occurs principally and above all for accounts which are past due
and/or continuously in arrears and for impaired accounts.
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