UBI Banca Group

marked improvement compared to €827.9 million in the preceding third quarter, penalised by
the loss incurred on those same financial activities (-€23.9 million).
Net interest income, which included the expense of the purchase price allocation of €49.9
million, amounted to €2,119.9 million (-€22.6 million compared to 2010), the consequence, for
each component of the item 1 , of the increased impact of interest expense in line with market
trends for interest rates 2 :
• the net balance on business with customers was down by 5% to €1,874.5 million, (-€94.9
million of which resulting from greater interest payments to the Cassa di Compensazione e
Garanzia - a central counterparty clearing house 3 ), despite the partial widening of the
spread on business with customers (+12 basis points for network banks). affected by the
cost of funding and interest rates, especially for medium to long-term lending (due also to a
delay in repricing floating rate items).
As concerns volumes of business, lending grew slightly over twelve months (+2.2% for the
network banks), held back by short-term loans, while funding remained more or less
steady, the composition of which changed partially in favour of the longer term maturities
of bonds.
The net balance also benefited from €45.2 million (€105.8 million in 2010) of positive
differentials earned on fix rate bond hedges;
Interest and similar income: composition
Figures in thousands of euro
Debt
instruments
Financing
Other
transactions
2011 2010
1. Financial assets held for trading 40,910 1,482 - 42,392 31,634
2. Financial assets at fair value - - - - -
3. Available-for-sale financial assets 373,970 - - 373,970 328,149
3. Held-to-maturity investments - - - - -
5. Loans to banks 2,993 53,174 160 56,327 29,782
6. Loans to customers 1,270 3,562,559 7,382 3,571,211 3,129,890
7. Hedging derivatives - - - - -
8. Other assets - - 1,872 1,872 1,785
Total 419,143 3,617,215 9,414 4,045,772 3,521,240
Interest and similar expense: composition
Figures in thousands of euro
Borrowings
Securities
Other
transactions
2011 2010
1. Due to central banks (21,520) - - (21,520) (14,115)
2. Due to banks (62,117) - (219) (62,336) (29,972)
3. Due to customers (412,256) - (4,251) (416,507) (196,582)
4. Securities issued - (1,325,414) - (1,325,414) (1,069,742)
5. Financial liabilities held for trading (12,574) - - (12,574) (9,108)
6. Financial liabilities at fair value - - - - -
7. Other liabilities and provisions - - (728) (728) (789)
8. Hedging derivatives - - (86,778) (86,778) (58,406)
Total (508,467) (1,325,414) (91,976) (1,925,857) (1,378,714)
Net interest income 2,119,915 2,142,526
• financial assets held in the owned securities portfolio generated net interest income of
€271.8 million, (+€85.3 million), despite disinvestments in debt instruments over twelve
months amounting to €1.9 billion. However, total debt instruments (consisting mainly of
Italian government securities) continued to make an important contribution to net interest
income (€374 million of interest income earned on available-for-sale assets).
1 The calculation of net balances was performed by allocating interest for hedging derivatives and financial liabilities held for trading
within the different areas of business (financial, with banks, with customers).
2 The average progressive one month Euribor rate practically doubled in the comparison between the two years from 0.573% in 2010
to 1.190% in 2011.
3 In relation to transactions employed to fund investments in government securities.
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