Prospectus - Notowania

slowdown in both German and, more significantly, in Austria. The differences are largely
attributable to time deposit performance in Germany and, more generally, the performance of
deposits other than current account deposits in Austria, which showed a downturn over the last
12 months. Finally, in Italy bank bonds continued to grow at a pace in line with the general
growth in deposits.
In recent months, the reduction in bank rates has also continued, although only to a partial
extent and with differences between the three main countries of operation (Germany, Austria
and Italy). To be specific, the decline in rates on bank loans still appears to be less sharp in
Germany than in Austria and, especially, in Italy. As a result, in Germany bank spreads (the
difference between lending and deposit rates) continued to rise. On the other hand, there was a
particularly sharp reduction in bank spreads in Austria and in Italy, where the spread between
the average lending rate and average deposit rate was at a ten-year low.
With regard to CEE countries, at the beginning of 2009 the banking sector, which was under
pressure due to slow volume growth and, to a greater extent, due to the deterioration in credit
quality, showed some positive signs. In H1 2009, all banking sectors in CEE countries reported
profits (due to stable income and a significant reduction in costs), with the exception of the
Baltic countries (specifically Latvia), Ukraine and Kazakhstan. In these three areas, the ratio of
loans made to deposits is significantly higher than 100%, and thus, these systems are depending
on foreign funding.
Financial Markets
In 2009, stock markets showed a relative recovery on the previous year’s performance,
accompanied by a relative improvement in stock prices and financial sector ratios.
In the same period, the mutual fund market also showed signs of recovery, but at a much
slower growth rate. Net inflows of funds were positive in August 2009, amounting to €5.7
billion in Germany and €0.4 billion in Austria. In Italy from January to September 2009, there
was a net outflow of funds of €7.6 billion.
The conditions and context illustrated above underlie the factors which may have the greatest
impact on the UniCredit Group’s profit from current operations. Specifically:
• Loans and Receivables
The turmoil in the credit market has affected the global banking system since the second
half of 2007, contributing to a sharp slowing of the world economy. This macroeconomic
scenario has entailed the slowdown in the performance of bank lending, and has resulted in
a reduction in typical volumes which could affect the performance of the Group in terms of
its net interest income.
• Write-downs of loans
The current macroeconomic scenario has also resulted in an increase in the cost of credit
risk, a decrease in asset values as well as higher costs deriving from write-downs and
depreciation of some assets, combined with a decrease in profitability. Although the Group
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