Prospectus - Notowania

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RISK FACTORS
A number of LBO loans with significant balances outstanding, could, as a result of the
decreased operating ability of the borrowers to repay the debt used to finance the
acquisitions, lead to a deterioration in the overall performance of the UniCredit
Group’s loan portfolio. A continuation of the economic recession could make the
deterioration of the borrowers’ ability to repay the debt worse, by means of an
increase in the rates of insolvency of the various counterparts. The UniCredit Group
has been involved and may continue to be involved in transactions for restructuring
the debt of the borrowers. Some of the future restructuring transactions could have the
purpose of getting the Group to accept a credit position different from the previous
one, until in the last instance reaching the full or partial conversion of the credit
position on the capital of the borrower of the funds.
The UniCredit Group is also exposed to risks deriving from investments in companies
attributable to the private equity and hedge fund sectors.
These investments are attributable to three categories: direct equity investments of the
Group which due to their entity are considered core clients, investment portfolios in
private equity funds considered with a risk profile adapted to the so-called “risk
appetite” of the Group and long-term investments in hedge funds. As at September 30,
2009, the total amount of the commitments came to €2,672 million, of which €1,837
million (equal to approximately 69%) effectively deployed. These investments are
distributed over a high and diversified number of counterparts.
The Group’s direct equity investments in core customers and investments in private
equity funds are valued at original cost and are subject to periodic impairment tests.
During the first nine months of 2009, following the afore-mentioned tests, the Group
registered writedowns for €314 million, of which €110 million on direct investments
and €204 million attributable to private equity. Investments in hedge funds are by
contrast valued at fair value (mark-to-market): during the first 9 months of 2009, there
was a positive impact on the income statement for €20 million. The reduction in the
total exposure observed in the same period (from approximately €540 million to
around €380 million) was entirely attributable to divestments.
Any deterioration in the current macro-economic context and the market conditions
could have a negative impact on the value of these investments, exposing the
UniCredit Group to the risk of recording additional writedowns or generating transfer
values under the current book values.
4.1.10 Risks connected to the exposure to the trend of the real estate sector
The UniCredit Group is exposed to the real estate property segment also by means of
financing activities to companies, operating in this sector, whose cash flows are
essentially generated by the lease or sale of properties (commercial real estate). Over
the past year, the real estate market disclosed a drop in market prices and transactions
carried out; consequently, those active in the sector have experienced a drop in the
volumes of transactions, an increase in the commitments deriving from financial
charges and greater difficulty with regard to refinancing.