UBI Banca Group

(+0.9%). The changes summarise the increased cost in relation to new software introduced in
2010, which was partially offset by the reduction at the same time in depreciation for
peripheral hardware (work stations).
In 2010 the item (€247.2 million) included a non-recurring amount of €4.5 million for the write-off of
some components of the UBI.S IT system (€3.1 million, related mainly to retirements for end of service
contract and for replacement of products) and of IW Bank (€1.4 million, mainly for the retirement of the
bank’s previous legacy system and to a lesser extent for the Twice Sim and InvestNet software).
On a quarterly basis, normalised operating expenses totalled €609.2 million, (€605.3 million in
the same period of 2010), compared to €589.2 million in the third quarter of 2011).
While the figures for the two corresponding quarters were unchanged, the growth observed
with respect to the third quarter of 2011 is the result of seasonal effects for some factors of
expense, as was also confirmed by the average normalised quarterly data, which fell
progressively from €618 million in 2009 to €608 million in 2010 and to €603 million in 2011.
In detail, the following trends emerged in the composition:
- personnel expense fell by €12.5 million Other administrative expenses: composition
to
€350.3 million, as a result of different
timings in the provisions made for
variable remuneration, but above all
due to the release of provisions made
in relation to the signing of the
national labour contract;
- other administrative expenses rose by
€29.8 million to €195.8 million, as a
result of the particular characteristics
of the two periods compared, which
present opposing seasonal trends for
some expense items, which were
nevertheless partially reduced by the
policy to contain spending
implemented precisely in the fourth
quarter of the year. The greatest
increases in spending were for
professional and advisory services
(+€15.3 million), insurance premiums
(+€3.9 million), property maintenance
(+€3.6 million), credit recovery services
(+€3 million), outsourced services
(+€1.6 million), travel expenses (+€1.4
million) and telephone and data
transmission services (+€1.3 million);
- net impairment losses on property,
equipment and investment property
2011 2010
Figures in thousands of euro
A. Other administrative expenses (666,346) (712,876)
Rent payable (72,060) (77,847)
Professional and advisory services (90,225) (102,647)
Rentals of hardware, software and other assets (36,211) (38,679)
Maintenance of hardware, software and other assets (40,483) (40,842)
Tenancy of premises (54,755) (51,748)
Property maintenance (27,245) (27,816)
Counting, transport and management of valuables (16,004) (16,503)
Membership fees (9,468) (10,818)
Information services and land registry searches (12,612) (13,168)
Books and periodicals (1,877) (1,901)
Postal (26,576) (31,906)
Insurance premiums (44,276) (45,806)
Advertising (26,007) (24,663)
Entertainment expenses (2,017) (2,099)
Telephone and data transmission expenses (58,531) (69,934)
Services in outsourcing (46,439) (51,223)
Travel expenses (23,476) (23,476)
Credit recovery expenses (44,000) (46,103)
Forms, stationery and consumables (11,137) (13,304)
Transport and removals (7,354) (6,987)
Security (9,736) (9,651)
Other expenses (5,857) (5,755)
B. Indirect taxes (51,642) (56,868)
Indirect taxes and duties (37,498) (40,467)
Stamp duty (140,749) (129,567)
Municipal property tax (8,806) (9,029)
Other taxes (27,654) (31,651)
Reclassification of "tax recoveries" 163,065 153,846
Total (717,988) (769,744)
and intangible assets also rose (+€2.7 million) to €63.1 million, incorporating depreciation
and amortisation for new IT investments.
As a result of action taken to contain costs, net operating income rose to €1,048.7 million in
2011 (+2.1%).
On a quarterly basis the result was €291.7 million, a decrease (-3%) compared to the fourth
quarter of 2010, but a marked improvement (+9.4%) on the previous quarter.
Net impairment losses on loans fell to €607.1 million in 2011 from €706.9 million before (-€100
million approximately), the aggregate result of an almost general reduction for both the
network banks and the product companies.
Particular improvements were recorded for B@nca 24-7 (-€44.5 million), as a result of action
taken to bring its credit quality up to Group standards, and also for the network banks (-€52.6
million).
The loan loss rate – total net impairment losses as a percentage of net loans to customers – fell
as a consequence to 0.61% from 0.69% in 2010.
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