Prospectus - Notowania

4.1.17 Risks associated with activities of the UniCredit Group in CEE countries
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RISK FACTORS
The UniCredit Group is active and has a significant presence in CEE countries. Even
though the risks and uncertainties are different with regard to their nature and intensity
in each of these countries, also in relation to whether they belong to the European
Union or otherwise, the CEE countries generally have in common greater volatility
with regard to the capital markets and exchange rates, political, economic and
financial instability, as well as, in many cases, reduced growth of the system and the
political, financial and legal infrastructures. Despite there being signals of a slowdown
in the recession, uncertainties still remain with regard to the timescales for economic
recovery.
In particular, in the Ukraine economic conditions have worsened to such an extent that
the most severe drop in gross domestic product in Eastern Europe since the beginning
of the year has been registered along with sharp currency depreciation. This situation
has led to a general deterioration of the national banking system and various foreign
banks, including UniCredit, have chosen to re-capitalize their subsidiaries in the
country. During the second quarter of 2009, UniCredit in fact took steps to enhance
the equity endowment of its subsidiary Ukrsotsbank with a capital injection totalling
UAH 500 million (around €41.5 million).
In this context, it cannot be excluded that in the Ukraine as in the other CEE countries
not belonging to the European Union, the UniCredit Group could carry out further recapitalization
measures on its subsidiaries or be subject – by way of example – to
unilateral policies adopted by the regulatory and governmental authorities of these
countries, including those aimed at imposing the relinquishment of the repayment of
loans granted or laying down a more significant level of risk provisions than the level
normally applied on the basis of the Group’s policies, action aimed at determining the
writedown of the local official currency vis-à-vis international reference currencies
and policies aimed at limiting the transfer of capital outside these countries. In the
Ukraine, for example, the central bank has recently reduced the amount of the foreign
currency loans that banks can grant and maintain in their balance sheets. The Ukraine
subsidiary of the Group is presently discussing the reduction of foreign currency loans
with the Central Bank of the Ukraine.
The UniCredit Group could also be required - in connection with the possible negative
performance of certain economies in the areas of the CEE countries – to transfer a
greater level of liquidity in an international context where access to the same could
emerge as increasingly difficult. In conclusion, it could become necessary to increase
the writedowns on disbursed loans, associated with the increase in the credit risk
estimated by the Group.
In conclusion, the significant slowdown in the growth of the economies of these CEE
countries with respect to the levels reported in the past and those of the economies of
the Eastern European countries, could have a negative effect on the Group’s strategic
objectives.
For further information, reference should be made to the First Section, Chapter 6.