intermedio di resoconto - ubi banca banca... · was authorised on 16th thmay 2012 (from the...
TRANSCRIPT
10
8°
Resoconto
intermedio di gestione
al 31 marzo 2013
Interim
Financial
Report
as at and for the
half year ended
30th June 2013
Translation from the Italian original
which remains the definitive version
Joint stock co-operative company Registered office: Bergamo, Piazza Vittorio Veneto 8
Operating offices: Bergamo, Piazza Vittorio Veneto 8; Brescia, Via Cefalonia 74 Member of the Interbank Deposit Protection Fund and the National Guarantee Fund
Tax Code, VAT No. and Bergamo Company Registration No. 03053920165 ABI (Italian Banking Association) 3111.2 Register of Banks No. 5678 Register of banking groups No. 3111.2
Parent of the Unione di Banche Italiane Banking Group Share capital on 26th August 2013: €2,254,371,430 fully paid up
www.ubibanca.it
1
Contents
UBI Banca: company officers .................................................................................................. 3
UBI Banca Group: subsidiaries, joint ventures and associates as at 30th June 2013 ............... 4
UBI Banca Group: branch network as at 30th June 2013 ........................................................ 6
UBI Banca Group: principal figures and performance indicators ............................................. 7
The rating .............................................................................................................................. 8
INTERIM CONSOLIDATED MANAGEMENT REPORT AS AT AND FOR THE PERIOD ENDED 30TH JUNE 2013
▪ The macroeconomic scenario ............................................................................................ 11
▪ Significant events in the first half 2013 ............................................................................. 19
The merger of Centrobanca in to UBI Banca ................................................................................. 19
The renewal of governing bodies ................................................................................................... 19
Authorisation to use the AIRB approach for the regulatory retail segment .................................... 20
▪ The distribution network and positioning ......................................................................... 21
▪ Human resources ............................................................................................................. 26
▪ Reclassified consolidated financial statements, reclassified income statement net of the most significant non-recurring items and reconciliation schedules ..................... 31
▪ The consolidated income statement .................................................................................. 40
▪ General banking business with customers: funding .......................................................... 50
Total funding ............................................................................................................................... 50
Direct funding .............................................................................................................................. 51
Indirect funding and assets under management .......................................................................... 58
▪ General banking business with customers: lending .......................................................... 61
Performance of the loan portfolio ................................................................................................. 61
Risk ............................................................................................................................................ 65
“Anti Crisis” measures to support small to medium-size enterprises and families ......................... 73
▪ The interbank market and the liquidity position ............................................................... 76
▪ Financial activities ........................................................................................................... 79
▪ Equity and capital adequacy ............................................................................................ 99
▪ Information on share capital, the share, dividends paid and earnings per share ............................................................................. 106
▪ Information on risks and hedging policies ......................................................................... 110
▪ Consolidated companies: the principal figures .................................................................. 124
▪ Transactions with related parties ...................................................................................... 128
▪ Other information ............................................................................................................ 131
Inspections .................................................................................................................................. 131
Anti-trust measures concerning IW Bank .................................................................................... 131
Tax aspects .................................................................................................................................. 131
Changes in the Articles of Association of UBI Banca ..................................................................... 134
▪ Outlook for consolidated operations ................................................................................. 135
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE PERIOD ENDED THE
30TH JUNE 2013 Mandatory interim consolidated financial statements
as at and for the period ended the 30th June 2013 .......................................................... 138
▪ Consolidated balance sheet .............................................................................................. 139
▪ Consolidated income statement ........................................................................................ 140
▪ Consolidated statement of comprehensive income ............................................................ 141
▪ Statement of changes in consolidated equity .................................................................... 142
▪ Consolidated statement of cash flows ............................................................................... 144
Explanatory notes ........................................................................................................... 146
▪ Accounting policies .......................................................................................................... 147
2
- Basis of preparation ...................................................................................................................... 147
- Other aspects ............................................................................................................................... 151
- Information on the fair value of financial instruments .................................................................. 154
- List of IAS/IFRS standards approved by the European Commission ............................................. 156
▪ The scope of consolidation ................................................................................................ 158
▪ Information on the accounts ............................................................................................. 164
- Explanatory tables for the consolidated income statement. ........................................................... 164
- Explanatory tables for the consolidated balance sheet ................................................................. 166
� Property, plant and equipment and intangible assets ............................................................. 168
� Non current assets/liabilities held for sale ............................................................................. 169
� Provisions for risks and charges ............................................................................................. 170
� Contingent liabilities .............................................................................................................. 170
- Litigation ...................................................................................................................................... 170
- Segment reporting ....................................................................................................................... 177
- Transactions with related parties pursuant to IAS 24 .................................................................. 178
▪ Events occurring after the end of the first half ................................................................... 181
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE SENIOR OFFICER RESPONSIBLE FOR PREPARING THE ACCOUNTING DOCUMENTS ............................................... 182
INDEPENDENT AUDITOR’S REPORT ............................................................................................................... . 186
REPORT ON THE PERFORMANCE OF THE PARENT, UBI BANCA SCPA, IN THE FIRST HALF OF 2013
▪ Reclassified financial statements, income statement net of the most
significant non-recurring items and reconciliation schedules ............................................ 191
▪ Performance in the period ................................................................................................ 201
- The income statement .................................................................................................................. 201
- The balance sheet ........................................................................................................................ 210
▪ Separate interim financial statements
as at and for the period ended the 30th June 2013 ............................................................ 218
- Balance sheet .............................................................................................................................. 218
- Income statement ........................................................................................................................ 219
- Statement of comprehensive income ............................................................................................ 220
- Statement of changes in equity .................................................................................................... 221
- Cash flow statement .................................................................................................................... 223
De jure and delegated powers of the corporate bodies CONSOB - Italian securities market authority - recommendation No. 97001574 of 20th February 1997 ..... 224
GLOSSARY ............................................................................................................................................... 230
BRANCH NETWORK OF THE UBI BANCA GROUP
CALENDAR OF CORPORATE EVENTS OF UBI BANCA FOR 2013
CONTACTS
Key
The following abbreviations are used in the tables: - dash (-): when the item does not exist; - not significant (n.s.): when the phenomenon is not significant; - not available (n.a.): when the information is not available; - a cross “X”: when no amount is to be given for the item (in compliance with Bank of Italy instructions).
All figures are given in thousands of euros, unless otherwise stated.
3
UBI Banca: company officers
Honorary Chairman Giuseppe Vigorelli
Supervisory Board (appointed by the Shareholders' Meeting of 20th April 2013)
Chairman Andrea Moltrasio
Senior Deputy Chairman Mario Cera
Deputy Chairman Alberto Folonari
Deputy Chairman Armando Santus
Dorino Mario Agliardi
Antonella Bardoni
Letizia Bellini Cavalletti
Marina Brogi
Pierpaolo Camadini
Luca Vittorio Cividini
Alessandra Del Boca
Ester Faia
Marco Giacinto Gallarati
Carlo Garavaglia
Gianluigi Gola
Lorenzo Renato Guerini
Alfredo Gusmini(*)
Federico Manzoni
Mario Mazzoleni
Enrico Minelli
Sergio Pivato
Andrea Cesare Resti
Maurizio Zucchi
Management Board (appointed by the Supervisory Board on 23rd April 2013)
Chairman Franco Polotti
Deputy Chairman Giorgio Frigeri
Chief Executive Officer Victor Massiah
Silvia Fidanza
Luciana Gattinoni
Francesco Iorio Italo Lucchini
Flavio Pizzini
Elvio Sonnino
General Management(**)
General Manager Francesco Iorio
Senior Deputy General Manager Elvio Sonnino
Deputy General Manager Rossella Leidi
Deputy General Manager Ettore Medda
Deputy General Manager Pierangelo Rigamonti
Senior Officer Responsible in accordance with Art. 154 bis of the Consolidated Finance Act Elisabetta Stegher
Independent auditors DELOITTE & TOUCHE Spa
(*) Secretary to the Supervisory Board (**) Giovanni Lupinacci was also a member of General Management until the 30th June 2013, occupying the position of Deputy General
Manager.
4
UBI Banca Group: subsidiaries, joint ventures and associates as at 30th June 2013
5
6
UBI Banca Group: branch network as at and for the period ended 30th June 2013
7
UBI Banca Group: principal figures and performance indicators1
1 The indicators have been calculated using the reclassified figures contained in the section “Reclassified consolidated financial statements, reclassified
income statement net of the most significant non-recurring items and reconciliation schedules” in the Interim Consolidated Management Report. Information on the share is reported in the relative section of that report.
The profit indicators for 2011 were calculated on profit before impairment losses on goodwill and finite life intangible assets, which amounted to €349,373 thousand.
2 On 19th July 2013 the Group was authorised (from the supervisory report as at 30th June 2013) to use the advanced internal rating based (AIRB) approach to meet credit risk relating to SMEs and to exposures backed by residential properties. The use of advanced internal approaches for the corporate segment
was authorised on 16th May 2012 (from the supervisory report as at 30th June 2012).
3 Part time employees have been calculated within total average staff numbers according to convention on a 50% basis.
30.6.2013 31.12.2012 31.12.2011 31.12.2010 31.12.2009 31.12.2008
STRUCTURAL INDICATORS
Net loans and advances to customers/total assets 71.3% 70.1% 76.8% 78.0% 80.1% 79.0%
Direct funding from customers/total liabilities 75.3% 74.6% 79.2% 81.8% 79.5% 80.0%
Net loans and advances to customers/direct funding from customers 94.7% 94.0% 97.0% 95.4% 100.8% 98.7%
Equity (including profit/loss for the period )/total liabilities 7.7% 7.4% 6.9% 8.4% 9.3% 9.1%
Assets under management/indirect funding from private individual customers 56.1% 54.3% 51.2% 54.6% 53.2% 53.1% Financial leverage ratio
(total assets - intangible assets) /(equity inclusive of profit (loss) + equity attributable to non-
controlling interests - intangible assets) 16.1 17.0 18.5 19.3 17.1 17.3
PROFIT INDICATORS
ROE (profit for the period/equity including profit/loss for the period) annualised 1.1% 0.8% 3.9% 1.6% 2.4% 0.6%
ROTE annualised
[profit for the period/tangible equity (equity inclusive of profit/loss, net of intangible assets)] 1.5% 1.2% 5.9% 3.1% 4.6% 1.2%
ROA (profit/total assets) annualised 0.08% 0.06% 0.27% 0.13% 0.22% 0.06%
The cost:income ratio (operating expenses/operating income) 64.9% 64.3% 69.5% 70.6% 64.4% 63.9%
Staff costs/operating income 39.1% 39.0% 41.4% 41.5% 37.5% 38.8%
Net impairment losses on loans/net loans to customers (losses on loans annualised) 0.84% 0.91% 0.61% 0.69% 0.88% 0.59%
Net interest income/operating income 51.2% 52.8% 61.7% 61.3% 61.5% 68.7%
Net fee and commission income/operating income 36.5% 33.5% 34.7% 33.9% 31.1% 33.3%
Net result on financial activities/operating income 6.6% 7.3% 0.2% 1.0% 3.2% -5.9%
RISK INDICATORS
Net non-performing loans/net loans to customers 3.56% 3.18% 2.49% 1.91% 1.36% 0.88%
Net impairment losses on non-performing loans/gross non-performing loans (coverage
for non-performing loans) 41.78% 42.60% 43.31% 48.69% 51.57% 54.58%
Coverage for non-performing loans, gross of write-offs of positions subject to bankruptcy
proceedings and the relative impairment losses 56.17% 57.63% 59.06% 63.62% 66.10%
Net non-performing + net impaired loans/net loans to customers 7.94% 7.06% 5.03% 3.91% 3.24% 2.08%
Net impairment losses on non-performing and impaired loans/gross non-performing
loans+impaired loans (coverage) 29.19% 29.26% 30.55% 34.89% 35.93% 38.22%
CAPITAL RATIOS Basel 2 AIRB from 31st December 2012 2
Tier 1 ratio (tier 1 capital/total risk weighted assets) 12.70% 10.79% 9.09% 7.47% 7.96% 7.73%
Core tier 1 ratio after specific deductions to tier 1 capital
(tier 1 capital net of preference shares and savings shares or privileged shares of non-controlling
interests/total risk w eighted assets) 12.08% 10.29% 8.56% 6.95% 7.43% 7.09%
Total capital ratio [(regulatory capital+tier 3/total risk weighted assets)] 18.67% 16.01% 13.50% 11.17% 11.91% 11.08%
Regulatory capital (in thousands of euro) 11,633,184 12,203,619 12,282,153 10,536,200 10,202,555 9,960,812
of which: Tier one capital after the application of prudential filters and specific deductions 7,940,338 8,263,720 8,276,278 7,047,888 6,816,876 6,944,723
Risk weighted assets 62,538,650 76,589,350 91,010,213 94,360,909 85,677,000 89,891,825
INCOME STATEMENT, BALANCE SHEET FIGURES (in thousands of euro),
STRUCTURAL DATA (numbers)
Profit (loss) for the year/period attributable to the shareholders of the Parent 52,933 82,708 (1,841,488) 172,121 270,099 69,001
Profit (loss) for the year/period attributable to the shareholders of the Parent normalised 52,238 97,324 111,562 105,116 173,380 425,327
Operating income 1,652,218 3,526,311 3,438,339 3,496,061 3,906,247 4,089,739
Operating expenses (1,071,873) (2,266,660) (2,389,626) (2,468,564) (2,514,347) (2,611,348)
Net loans and advances to customers 91,268,495 92,887,969 99,689,770 101,814,829 98,007,252 96,368,452
of which: net non-performing loans 3,248,720 2,951,939 2,481,417 1,939,916 1,332,576 848,671
net impaired loans 3,993,947 3,602,542 2,533,780 2,032,914 1,845,073 1,160,191
Direct funding from customers 96,343,798 98,817,560 102,808,654 106,760,045 97,214,405 97,591,237
Indirect funding from customers 68,944,184 70,164,384 72,067,569 78,078,869 78,791,834 74,288,053
of which: assets under management 38,696,590 38,106,037 36,892,042 42,629,553 41,924,931 39,430,745
Total funding from customers 165,287,982 168,981,944 174,876,223 184,838,914 176,006,239 171,879,290
Equity attributable to the shareholders of the Parent (including profit (loss) for the
period/year) 9,861,825 9,737,882 8,939,023 10,979,019 11,411,248 11,140,207
Intangible assets 2,946,268 2,964,882 2,987,669 5,475,385 5,523,401 5,531,633
Total assets 127,930,261 132,433,702 129,803,692 130,558,569 122,313,223 121,955,685
Branches in Italy 1,726 1,727 1,875 1,892 1,955 1,944
Total staff at the end of the period
(actual employees in service + workers on agency leasing contracts) 18,485 19,088 19,407 19,699 20,285 20,680
Average total staff 3
(actual employees in service + workers on agency leasing contracts) 17,661 18,490 18,828 19,384 20,185 20,606
Financial advisors 661 672 713 786 880 924
8
The rating
The ratings assigned to the UBI Banca Group by the three main international agencies are
given below.
In 2013, Fitch first reviewed its ratings for the four main Italian banks at the beginning of
January and this included UBI Banca, whose ratings (and the relative outlooks) all remained
unchanged. Subsequently, as a consequence of the results of the parliamentary elections, considered
inconclusive, and economic figures for the last quarter of 2012, which showed the Italian
economy to be in one of the deepest recessions in Europe, on 8th March this agency
downgraded its sovereign rating to BBB+ (down by one notch), again with outlook negative.
The action taken on the country’s long-term sovereign debt was followed on 18th March by a general review, which involved seven Italian banking groups, including UBI Banca, to take
account of the possible impacts of the government downgrade.
The actions taken by this agency varied. In UBI Banca’s case the review only involved its
support rating and the support rating floor, which in both cases were confirmed at “2” and
BBB, respectively.
The sovereign debt downgrade also had repercussions on covered bond ratings. On 20th March Fitch announced a reduction by one notch on the ratings for the covered bonds of five Italian
banks, including those of UBI Banca, for whom the rating was cut from AA- to A+ with the
outlook still negative.
On 9th July 2013 Standard & Poor’s revised its long-term rating on Italian sovereign debt (from BBB+ to BBB, down by one notch) in the light of the further deterioration in the
economic outlook while it maintained its outlook negative. As a consequence, on 12th July this
agency lowered its long-term ratings for 9 Banks and placed the long-term ratings of 23 Banks
and the short-term ratings of 15 banks on credit watch; UBI Banca was among the latter.
As a result of a reduction in the “Banking Industry Country Risk Assessment” (BICRA) for the
sector (from 4 to 5) – which in turn led to a decrease by one notch in the anchor SACP, the baseline for the definition of the rating – on 24th July S&P’s commenced a series of
downgrades, lifting the previous credit watches. All the ratings assigned to UBI Banca were
consequently lowered by one notch and the negative outlook was confirmed.
The downgrade was solely the result of assessments of increased economic and industry risk
for the Italian banking sector as a whole. The agency had made no reference to any change connected with the business profile, risk structure, funding capacity, liquidity position, capital
strength and profitability of the UBI Banca Group.
(i) The issuer credit rating reflects the agency’s opinion of the
intrinsic creditworthiness of the bank combined with an assessment of the potential for future support that the bank
might receive in the event of default (from government or from the group to which it belongs).
Short-term: ability to repay short-term debt with a maturity of less than one year (A-1+: best rating – D: Default)
Long-term: ability to pay interest and principal on debt with a maturity of longer than one year (AAA: best rating – D: default)
(ii) The SACP is a rating of the intrinsic creditworthiness of the bank in the absence of external support (from government or from the group to which it belongs). It is calculated on the
basis of an “anchor SACP”, which summarises economic and industry risk for the Italian banking sector. This is then
adjusted to take account of bank-specific factors such as capitalisation, market positioning, exposure to risk and the
funding and the liquidity situation, which are also assessed from a comparative viewpoint.
STANDARD & POOR’S
Short-term Counterparty Credit Rating (i) A-3
Long-term Counterparty Credit Rating (i) BBB-
Stand Alone Credit Profile (SACP) (ii) bbb-
Outlook Negative
RATINGS ON ISSUES
Senior unsecured debt BBB-
Subordinated debt (Lower Tier 2) BB+
Preference shares (former BPB-CV and former BPCI) BB-
French Certificats de Dépôt Programme A-3
9
(I) The ability to repay long-term debt (maturing in or after one
year) in local currency. By using the JDA method (Joint Default Analysis), this rating associates the financial strength
rating (BFSR – Bank Financial Strength Rating) with the probability of intervention if needed by external support (shareholders, the group to which it belongs or official
institutions). (Aaa: best rating– C: default)
(II) The ability to repay debt in local currency maturing in the
short-term (due in less than one year). (Prime -1: highest quality – not prime: speculative grade)
(III) This rating does not relate to the ability to repay debt, but considers the bank’s intrinsic financial strength (by analysing
factors such as its geographical market presence, the diversification of its activities, the financial basics, its
exposure to risk) in the absence of external support. (A: best rating – E: worst rating)
(IV) The Baseline Credit Assessment represents the equivalent of
the Bank Financial Strength Rating on the traditional scale of the long-term rating.
(1) The ability to repay debt maturing in the short-term (duration
of less than 13 months)
(F1+: best rating – D: worst rating)
(2) The ability to meet financial commitments in the long-term, independently of the maturity of individual obligations. This
rating is an indicator of the probability that an issuer will default.
(AAA: best rating – D: default)
(3) An assessment of a bank’s intrinsic strength in the event that it cannot rely on forms of external support (aaa: best rating - f: default).
(4) A rating of the possibility of concrete and timely external support (from the state or large institutional investors) if the
bank finds itself in difficulty (1: best rating – 5: worst rating).
(5) This rating gives additional information, closely linked to the Support Rating, in that for each level of the Support Rating it identifies the minimum level which the Issuer Default Rating
could reach if negative events were to occur.
MOODY'S
Long-term debt and deposit rating (I) Baa2
Short-term debt and deposit rating (II) Prime-2
Bank Financial Strength Rating (BFSR) (III) D+
Baseline Credit Assessment (BCA) (IV) baa3
Outlook (deposit ratings) Negative
Outlook (Bank Financial Strength Rating) Negative
RATINGS ON ISSUES
Senior unsecured Baa2
Lower Tier 2 subordinated Ba1
Preference shares (former BPB-CV and Banca Lombarda) Ba3(hyb)
Euro Commercial Paper Programme Prime-2
Covered Bond A2
FITCH RATINGS
Short-term Issuer Default Rating (1) F2
Long-term Issuer Default Rating (2) BBB+
Viability Rating (3) bbb+
Support Rating (4) 2
Support Rating Floor (5) BBB
Outlook (Long-term Issuer Default Rating) Negative
RATINGS ON ISSUES
Senior unsecured debt BBB+
Lower Tier 2 subordinated BBB
Preference shares BB
Euro Commercial Paper Programme F2
French Certificats de Dépôt Programme F2
Covered Bonds A+
INTERIM CONSOLIDATED MANAGEMENT REPORT FOR THE PERIOD ENDED 30TH JUNE 2013
11
The macroeconomic scenario
The first half of 2013, which began with a temporary improvement in conditions on financial
markets despite the continuing weakness of the world economy, was subsequently affected by
a series of events which helped maintain uncertainties over the prospects of recovery:
the worsening of the Cypriot banking crisis in the second-half of March, which led on 25th
March to the definition of an international bailout plan for the country with the involvement
of shareholders, bondholders and account holders with deposits of more than €100 thousand with the main banks subject to restructuring1;
fears of possible contagion by at risk banking systems of other countries, such as Slovenia,
fuelled also by the slow or inadequate implementation of structural reforms at European
level;
difficulties in the formation of a new government in Italy as a consequence of the results of the general election held at the end of February;
Greece’s persistent difficulties – faced with political instability and uncertainties over future
international aid payments due to delays in the implementation of agreed programmes – in
addition to new concerns at the end of June over the political situation in Portugal;
turbulence on financial markets that arose in May and June, attributable to profit-taking
on Japanese markets, uncertainties over credit prospects in China and the perception that the gradual tapering of quantitative easing in United States is soon to occur;
renewed geopolitical tensions in the Middle East with consequent repercussions on energy
raw material prices;
the weak trend for world demand dampened by processes to adjust budgets, by fiscal
tightening and by persistent restrictive credit conditions.
The situation remains particularly critical in the euro area within which the continuing
economic recession is related also to the effects of the rigorous fiscal consolidation policies
pursued in recent years. In view of this, in April Ireland and Portugal were given seven year
extensions by the European
authorities on the average maturities of the bailout
loans they had received.
When decisions were made
on 29th May concerning
excess deficit procedures, the European Commission
relaxed austerity rules
which require bringing
deficit-to-GDP ratios below
3%, allowing Belgium,
Holland and Portugal one extra year and Poland,
France, Spain and Slovenia
two extra years to comply
with the rule2. On the other
hand the procedure
commenced against Italy in 2009 was closed in that
same meeting.
1 The 25th March bailout plan involves payments of €10 billion being made to Cyprus over three years, of which €9 billion provided by
the European stability mechanism (ESM) and €1 billion by the International Monetary Fund. The ESM had already paid out €3
billion as at 30th June 2013. 2 The elimination of the excess deficit must take place by 2013 for Belgium, by 2014 for Holland and Poland, by 2015 for France,
Portugal and Slovenia and finally by 2016 for Spain.
0
50
100
150
200
250
300
350
400
450
500
550
600
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A
Ten-year BTP-Bund spread (2010-2013)
2010 2011
Basis points
20132012
Source: Thomson Financial Reuters
12
Notwithstanding the difficult economic environment, although still present, pressures on the
sovereign debt markets in the Eurozone remained low. This was due mainly to the outright monetary transaction programme (OMT) prepared by the ECB in 2012, which has never been
used by any European country, but is able to strongly reduce international speculation
directed to countries at risk. As shown in the chart, the spread between ten-year BTPs and
German Bund, which at the end of January had fallen to 250 basis points, rose to 350 basis
points in March, a reflection of the results of the general election. The spread fell from the
second half of April in parallel with the formation of a new government and the rise in yields on German Bund and returned to below 300 basis points. In August the spread fell below 250
basics points to its lowest level since July 2011. The high public debt and weak growth
prospects for Italy together with uncertainties over European governments, nevertheless make
the risk premiums on government securities highly sensitive to changes in the climate of
confidence on markets3. The slow progress made towards the formation of a European banking union led in June to two important agreements which form part of the attribution to the ECB of sole responsibility for the supervision of banks operating in the Eurozone, already decided in the last quarter of 2012, which will be operational at the end of 20144: governments in the Eurozone reached an agreement in Luxembourg on 20th June which allows the
European stability mechanism (ESM) to directly recapitalise crisis stricken banks once centralised
supervision by the ECB becomes operational. The ESM, which will have funds of €60 billion available to it for this purpose, will be able to intervene directly on the capital of banks, without effect on the sovereign debt of the countries to which they belong, if a series of conditions are met:
the member states in question must not be able contribute fully to bailouts without compromising their fiscal sustainability;
the banks in question must comply with capital requirements set by the ECB and be unable to find the funding required for recapitalisation on the market;
the banks in question must be of systemic importance or in any case such as to constitute a danger, in the event of failure to intervene, to the financial stability of the Eurozone or to the country to which they belong.
The agreement also established the relative contributions to be made by the ESM and member countries: if the bank to be recapitalised has a Tier 1 ratio of less than 4.5%, that level will be achieved by using state funds, while the excess will be provided by the ESM; on the contrary if the cited capital requirement has already been reached, the member country will make a contribution equal to 20% of the total required in the first two years following the entry into force of the procedures and to 10% subsequently;
EU ministers of finance came to an agreement in Brussels on 27th June over the rules to be applied for the restructuring or liquidation of a crisis stricken bank. In detail the agreement reached involves losses being incurred by individuals (in order: shareholders, junior bondholders, senior bondholders, account holders with deposits of over €100 thousand) up to a maximum limit of 8% of the bank’s liabilities. Governments will only be able to intervene over and above that level up to a maximum of 5% of the bank’s liabilities by making recourse to national rescue funds5, while direct intervention by the ESM only takes place in exceptional cases should guaranteed deposits or the financial stability of the country be at risk, as acknowledged by the European Commission. On 10th July that same Commission proposed the establishment of a single mechanism by which the banking union would solve crises. The union would be called upon to apply the substantive rules to bail out and solve bank crises established by the aforementioned agreement of 27th June. The crisis mechanism would be headed by a single
rescue committee composed of representatives from the ECB, European commission and national authorities of the country in which the crisis stricken bank is located, while medium-term financing during the restructuring of the bank would be made available through a single banking rescue fund, financed by contributions from the banking sector, which would replace single national funds.
Again on the question of regulations, on 27th June the new prudential regulatory framework was published in the Official Journal of the EU. This implements Basel 3 rules on capital requirements, liquidity risk and financial leverage which will therefore come officially into force from 1st January 2014. At the beginning of July those same provisions on prudential requirements were also unanimously approved by the Federal
3 On 9th July the rating agency Standard & Poor’s lowered its rating for Italy from BBB+ to BBB, with a negative outlook; the impact on
markets, however, was modest. 4 The commencement of centralised supervision will in turn be preceded by an exercise to assess the balance sheets of supervised
banks performed centrally at European level and, more specifically, by an analysis of the quality of their assets (an asset quality review).
5 According to the agreement the national rescue fund financed by banks in EU countries must reach either 0.8% or 1.3% of the deposits guaranteed within 10 years depending on whether it is separate from the guarantee fund existing for deposits up to €100
thousand or not.
13
Reserve which set entry into force from 1st January 2014 for major banks and from 1st January 2015 for smaller banks.
As shown in the table, at the end of the first semester the CRB index, which summarises
commodities prices, had fallen compared to March and December. This reflected a generalised fall which was greater for the energy component, attributable mainly to a
weakening of the Chinese economy given its importance to global consumption.
Brent oil prices, which had reached $119 per barrel at the beginning of February, also fell
subsequently due to fears of a slowdown in world growth. They fluctuated from the end of
April between $100 and $106, but then recovered in July at around $110, partly the result of increased geopolitical tensions in the Middle East and in Egypt in particular.
The reduction in energy product prices had its effect on inflation, with a generalised fall for
industrialised countries, but still at high levels in the main emerging economies.
With regard to foreign exchange rates, the yen
continued to devalue against
both the dollar and the euro
as it continued on the path
set in the fourth quarter of 2012 by the new Japanese
government in order to
favour the revival of the
economy. On the other hand,
the gradual and slow
appreciation of the yuan against the dollar continued,
while the dollar to euro exchange rate fluctuated at around 1.30 dollars to the euro, a
reflection of the Eurozone’s continuing political and economic difficulties. However, in the
weeks that followed the end of the first half, the European currency recovered rapidly coming
close to 1.33 dollars to the euro.
* * *
The recovery of the world economy was again modest in the first half of the year and also
varied from one area to another. The slowdown by the main emerging countries was set
against expansion by Japan and consolidation of the recovery in the United States, while the recession continued in the Eurozone with particularly critical situations in peripheral
countries (Greece, Spain, Portugal and Italy)6.
6 According to the International Monetary Fund’s most recent estimates (July 2013) world GDP will grow at 3.1% in 2013, the
aggregate result of +5% for emerging economies and +1.2% for advanced countries.
Actual and forecast data: industrialised countries
Percentages2012 2013
(1)2014
(1)2012
(2)Jun-13
(3)2013
(1) (2)2012
(2)Jun-13
(3)2013
(1) (2) 2012 2013(1)
2014(1) 12-Dec-13 13-Aug-13
United States 2.8 1.8 2.5 2.1 1.8 1.4 8.1 7.6 7.5 8.5 4.8 3.9 0-0.25 0-0.25
Japan 1.9 2.6 2.6 -0.3 0.2 0.6 4.3 3.9 4.1 8.9 11.6 10.2 0-0.10 0-0.10
Euro Area -0.6 -0.7 0.8 2.5 1.6 1.5 11.4 12.1 12.2 3.7 3.1 2.5 0.75 0.50
Italy -2.4 -1.9 0.7 3.3 1.4 1.5 10.7 12.1 12.2 3.0 3.2 2.7 - -
Germany 0.7 0.1 1.2 2.1 1.9 1.5 5.5 5.4 5.4 -0.2 0.5 0.0 - -
France 0.0 -0.2 0.8 2.2 1.0 1.2 10.3 11.0 11.1 4.8 4.0 3.5 - -
Portugal -3.2 -3.4 -0.7 2.8 1.2 0.8 15.9 17.4 17.9 6.4 5.4 4.2 - -
Ireland 0.9 0.1 2.0 1.9 0.7 1.6 14.7 13.5 13.5 7.6 7.5 4.8 - -
Greece -6.4 -5.3 -1.4 1.0 -0.3 -0.1 24.3 26.9 26.9 10.0 4.4 3.5 - -
Spain -1.4 -1.4 0.7 2.4 2.2 2.0 25.1 26.3 27.0 10.6 6.9 6.2 - -
United Kingdom 0.2 0.8 1.2 2.8 2.9 2.8 7.9 7.7 7.8 6.3 6.4 6.0 0.50 0.50
, ,(1) Forecasts Source: Prometeia and off icial statistics
(2) Average annual rate
(3) The latest available information has been used, w here data had not been published as at the 30th of June 2013
Gross domestic product Consumer prices UnemploymentDeficit (+) Surplus (-) Public
sector (% of GDP)
Reference interest
rates
Jun-13
A
Mar-13
B
Dec-12
C
% change
A/C
Sep-12
D
Jun-12
E
Euro/Dollar 1.3008 1.2814 1.3194 -1.4% 1.2858 1.2658
Euro/Yen 128.94 120.66 114.46 12.7% 100.13 100.97
Euro/Yuan 7.9835 7.9642 8.2200 -2.9% 8.0776 8.0416
Euro/Franc CH 1.2289 1.2172 1.2074 1.8% 1.2078 1.2004
Euro/Sterling 0.8550 0.8434 0.8127 5.2% 0.7950 0.8056
Dollar/Yen 99.12 94.11 86.74 14.3% 77.90 79.77
Dollar/Yuan 6.1374 6.2143 6.2301 -1.5% 6.2841 6.3530
Futures - Brent (in $) 102.16 109.69 111.11 -8.1% 112.39 97.80
CRB Index (commodities) 275.62 298.17 295.01 -6.6% 309.30 284.19
Source: Thomson Financial Reuters
The main exchange rates and oil (Brent) and commodities prices
14
United States GDP increased by 1.7% annualised in the second quarter of the year (+1.1% in
the previous three months; +0.1% in the last quarter of 2012) due mainly to the increased contribution from fixed investments, and from the non-residential component in particular,
and to good performance by consumption, while the contribution from the balance of trade
was again negative for the second consecutive quarter, the aggregate result of a strong
recovery by imports only partly offset by a simultaneous increase in exports.
The unemployment rate, which stood at 7.6% in May and June, only slightly better than at the
end of the year (7.8%), fell further to 7.4% in July, the lowest level since December 2008. After suddenly falling from 2% in February to 1.1% in April, inflation then rose again to 1.8% in
June (1.7% at the end of 2012). The falling trend for core inflation (net of foodstuffs and energy
products) on the other hand was smoother, down to 1.6% in June from 2% in February (1.9%
in December).
The balance of trade deficit fell in the first six months of the year to €242.1 billion dollars (-13%), benefiting principally from a lower deficit with OPEC countries and Africa.
As concerns monetary policy, the Federal Reserve continued its intention to maintain the reference rate unchanged within the range 0-0.25% until two macroeconomic targets are reached (an unemployment rate not higher than 6.5%; a one-two year inflation outlook of not more than half a percentage point above the target of 2% and a longer term inflation outlook well under control). It has also decided to continue with its programme of outright purchases of mortgage-backed securities for $40 billion a month and long-term treasury securities for a further $45 billion. In a meeting of 19th June, the Federal Reserve declared that if
the economy continued to improve as expected it could in future slow the pace of these purchases which it believes it will end in mid 2014. However it stated in July that it would act against undesirable restrictions on financial conditions.
While maintaining a relatively high
pace relatively on the international
scene, the Chinese economy is
nevertheless beginning to feel the
effects of an unfavourable world
economy, with GDP up in the first half by 7.6% (+7.7% and +7.5% in the first
and second quarters respectively).
Results for the first six months were
as follows: industrial production up by
9.3%; fixed investments up by 20.1%; investments in the property sector up
by 20.3% (from +16.6% in the first half of 2012); retail sales of consumer goods up by 12.7%
(from +14.4% in the first half of 2012).
While exports grew more than imports between January and June (+10.4% and +6.7%
respectively) generating a trade surplus of approximately $108 billion, both exports and
imports decreased year-on-year in June (-3.1% and -0.7%). Currency reserves rose further in June to $3,500 billion, of which over one third invested as always in United States government
securities.
Inflation rose significantly in June to 2.7% (2.1% in May; 2.5% in December 2012), driven by
food prices (4.9%), but, however, remaining below the peak reached in February (3.2%).
In the last few days of June interest rates on the Chinese monetary market reached a record high, the consequence of a series of technical causes, but also of fears concerning financial stability risks. In fact on 25th and 26th June, the People’s Bank of China issued two press releases in which it urged banks to improve their risk and liquidity management, saying that it would only loosen its monetary policy in the presence of pressures which might put financial stability in danger. The central bank nevertheless subsequently intervened to reassure markets that it would guarantee an adequate level of liquidity7.
The expansionary intervention taken in the autumn of 2012 by the government to revive the
Japanese economy resulted in quarter-on-quarter growth in GDP of 1% in the first quarter (+0.3% in the last quarter of 2012), driven mainly by a substantial recovery by exports – which
benefited from the depreciation of the yen – but also by good performance by consumption,
while the contribution from investments was modest.
7 As concerns other emerging countries, the central bank of India cut its repo rate three times – in January, March and May – bringing
it down from 8% to 7.25% in order to stimulate a slowing economy. The Central bank of Brazil, on the other hand, raised its
reference rate on three occasions, in April, May and July, from 7.25% to 8.50%, in relation to increased inflation risks.
Actual and forecast data: the principal emerging countries
Percentage
s 2012 2013(1)
2014(1)
2012(2) Jun-13(3) 12-dic-13 13-ago-13
China 7.8 7.4 7.5 2.6 2.7 6.00 6.00
India 4.1 5.4 6.0 9.4 10.7 8.00 7.25
Brazil 0.9 2.5 3.2 5.4 6.7 7.25 8.50
Russia 3.7 2.5 3.3 5.1 6.9 8.25 8.25
, ,
(1) Forecasts Source: Prometeia, IMF and official statistics
(2) Average annual rate
Gross domestic product Reference interest
ratesConsumer prices
(3) The latest available information has been used, where data had not been published as at the 30th of June 2013
15
The first indicators for the spring seem to confirm the improvement in progress in the
economy. Industrial output increased by 1.9% in May, the fourth consecutive month-on-month increase, in line with the progressive improvement in confidence in the manufacturing
and other sectors summarised in the Tankan report at the end of June.
The unemployment rate fell to 3.9% in June from 4.1% in the previous three months (4.3% in
December), while, with regard to consumer prices, the deflation in progress for a year seems to
have come to an end (+0.2% compared to a low of -0.9% in March).
In a meeting of 4th April, the Bank of Japan announced the introduction of “quantitative and qualitative monetary easing”, designed to reach a stability target of 2% for consumer prices over a time horizon of approximately two years. This decision produced a change in the main objective of monetary policy, which changed from the call rate on overnight deposits not backed by collateral to the monetary base, which is to double in two years. It was also decided in the same meeting that volumes of Japanese government securities and ETFs held in portfolio would double over two years in parallel with an increase in the average remaining maturity of government securities purchased to approximately seven years from just under three years at present. These objectives were reaffirmed in subsequent meetings.
After six consecutive quarterly falls, GDP in the euro area increased by 0.3% in the second
quarter (-0.3% and -0.6% in the two preceding periods), benefiting mainly from recoveries by Germany (+0.7%) and France (+0.5%). The year-on-year change, however, was again negative
(-0.7%).
The industrial output indicator continues to fail to show any clear change in economic
performance in the short-term (+0.7% in June after -0.2% in May), while over twelve months
the change was positive (+0.3%) for the first time since the beginning of the year. The unemployment rate on the labour market reached 12.1% in June (11.9% in December
2012) and was again critical in Greece (26.9% in April), Spain (26.3%) and Portugal (17.4%).
In June and July inflation, as measured by the harmonised consumer price index, stood at
1.6%, a decrease compared to the end of 2012 (2.2%), but up from the low recorded in April
(1.2%), due mainly to a technical statistical effect on energy product prices. However, the core
index, net of energy and fresh food components, stood at 1.3% in June (1.6% in December). The number of countries belonging to the European Union now stands at 28 with the entrance
of Croatia on 1st July 2013.
The ECB cut its rate on principal refinancing operations in May by 25 basis points to a record low of 0.50%, although it left the interest rate on deposits with the central bank unchanged at 0%. At the same time the ECB also extended the grant of unlimited finance to banks at a fixed rate until the middle of 2014 and it also decided to conduct quarterly refinancing operations at a fixed rate with full allotment of bids until the end of the second quarter of 2014. Declaring its medium-term intentions (forward guidance) for the first time, in a meeting of 4th July the ECB announced that the reference rate would remain at levels equal to or lower than the current rate for a prolonged period of time, based on an overall subdued outlook for inflation and subdued monetary dynamics.
In order, amongst other things, to encourage greater lending to small and medium-size enterprises, on 18th July the ECB finally decided to broaden the range of securitised assets (ABS) which banks may post as collateral in order to acquire liquidity. More specifically the ECB: relaxed the requirements for acceptance as collateral for six types of ABS (from two triple A ratings to two single A ratings); reduced the haircut applied for the eligibility of the securities (from 16% to 10%); lowered the valuation of retained covered bonds which banks issue but do not place on the market using them as collateral to acquire loans from the central bank.
The Italian economy seems to be moving slowly out of the recession which has now been in
progress since the second half of 2011. GDP fell quarter-on-quarter between April and June by
only 0.2% (-0.6% and -0.9% in the first quarter of 2013 and the last quarter of 2012
respectively), the aggregate result of a general fall in all sectors of economic activity. The year-
on-year change on the other hand was -2% (-2.3%; -2.8%). Other data for the second quarter also seems to confirm that the recession is weakening.
In June, seasonally adjusted industrial output, which has been negative since September
2011, recorded a year-on-year decrease of 2.1% (-7.4% in December). At individual sector level
the only positive year-on-year changes were in the “pharmaceuticals” (+2.8%), “fabrication of
means of transport” (+2.2%) and “electronics” (+1.5%) sectors, while the most significant contractions were seen in the “fabrication of coke and refined oil products” (-7.2%) and
“energy” (-6.9%) sectors. Some timid signs of recovery seem to be emerging from short-term
trends, with an increase in seasonally adjusted output showing growth for the second
consecutive month (+0.3% after +0.1% in May).
Again in June unemployment stood at 12.1% – slightly down compared to the peak of the
12.2% reached in May (11.4% in December) – although it was still up by over four percentage
16
points compared to 7.7% in April 2011, with typically difficult conditions for the 15-24 year
age group (39.1%)8. Moreover, the overall figure is helped by the presence of state income benefits which saw less
recourse in May and June to ordinary state layoff and redundancy benefits while use of
exceptional benefits increased. The latter benefited from resources made available to refinance
them by the new government9.
On the prices front, in June the harmonised consumer price index temporarily interrupted the
rapid fall which had been in progress since October 2012, standing at 1.4% compared to 1.3% in April and May (2.6% in December), but nevertheless below the European average for the
first time since August 2011. Estimates for July show inflation falling again at 1.2%10.
The balance of trade showed a surplus of €12.3 billion for the first six months of the year (-
€0.6 billion in the same period of 2012) due to a surplus on trade in non-energy products
(+€39.7 billion, of which two thirds relating to plant and equipment), which more than offset the deficit on energy products (-€27.4 billion). The overall surplus, however, reflects a drop in
trade connected with weak demand in Italy and in the euro area: in fact exports fell slightly
year-on-year (-0.4%) and imports contracted more substantially (-7%).
On 29th May the European Commission officially requested the closure of the excessive deficit procedure commenced against Italy in 2009. This decision rewarded the steps taken by Italy to progressively reduce its deficit-to-GDP ratio down to 3% in 2012, i.e. within the deadline set by the European Council. The achievement of this important public finance objective could in future ensure greater margins of investment, but nevertheless in compliance with the Stability and Growth Pact. Furthermore, Decree Law No. 35 of 8th April 2013 was converted into law in June. This measure initiated by the previous government for the repayment of a substantial proportion of government debt (approximately €40 billion) was designed to stimulate aggregate demand and accelerate recovery of the economy.
* * *
The performance of the Italian yield curve
reflects persistent association of risk with Italian government securities. The lowering of the curve
in the second half of 2012 drew benefit from
renewed confidence of markets following the
declaration of the irreversibility of the euro made
in July 2012 by the governor of the ECB and the announcement in September of a new programme
of purchases on the secondary market.
No significant changes to the curve occurred in
2013 compared to December. The positive effects
of accommodative monetary policies and the huge injections of liquidity made by the ECB were
almost totally offset by uncertainties in the political and economic environment in Italy. In a context of a still lengthy process to put public accounts in order, this led to a postponement
until 2014 and a downwards revision of expectations of economic recovery.
For most of the first half
financial markets benefited from the acceleration
commenced in 2012 and
driven by Japanese stock
markets in the wake of
robust injections of liquidity
made by the Japanese government. This trend
reversed however in the
third week of May fuelled by
prospects of an early end to
the expansionary policies
8 This figure gives young people unemployed as a percentage of total young people in employment and seeking employment.
9 Decree Law No. 54 of 21st May 2013, converted into law on 18th June 2013. 10 An increase in the ordinary VAT rate, which should have come into force on 1st July with probable future effects on consumer
prices, was postponed until the beginning of October.
The principal share indices in local currency
Jun-13
A
Mar-13
B
Dec-12
C
% change
A/C
Sep-12
D
Jun-12
E
Ftse Mib (Milan) 15,239 15,339 16,273 -6.4% 15,096 14,274
Ftse Italia All Share (Milan) 16,250 16,389 17,175 -5.4% 15,999 15,185
Xetra Dax (Frankfurt) 7,959 7,795 7,612 4.6% 7,216 6,416
Cac 40 (Paris) 3,739 3,731 3,641 2.7% 3,355 3,197
Ftse 100 (London) 6,215 6,412 5,898 5.4% 5,742 5,571
S&P 500 (New York) 1,606 1,569 1,426 12.6% 1,441 1,362
DJ Industrial (New York) 14,910 14,579 13,104 13.8% 13,437 12,880
Nasdaq Composite (New York) 3,403 3,268 3,020 12.7% 3,116 2,935
Nikkei 225 (Tokyo) 13,677 12,398 10,395 31.6% 8,870 9,007
Topix (Tokyo) 1,134 1,035 860 31.9% 737 770
MSCI emerging markets 940 1,035 1,055 -10.9% 1,003 937
Source: Thomson Financial Reuters
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
Italian yield curve
30th June 2012
31st December 2012
30th June 2013
1-6m1y 2y 5y 10y 30y
17
pursued by the Federal Reserve and by tensions on the Chinese interbank market.
As shown in the table, the main stock markets in advanced countries closed the first half with gains, although differing in magnitude. Only Italian markets, penalised, amongst other things,
by uncertainties following the elections, reported losses.
High volatility on financial markets in the euro area, in the United States and Japan spread to
emerging markets, where share prices fell sharply as summarised by the performance of the
MSCI index.
In the weeks following the end of the first semester, reassurances from the main central banks and the first encouraging macroeconomic data resulted in a general recovery in share prices.
As concerns assets under management, the mutual investment funds sector again recorded
encouraging performance in June. This made it possible to end the first half of the year with
positive net inflows of €30.9 billion, attributable principally to foreign registered funds (+€24.2 billion) – representing more than three quarters of assets under management – and only to a
lesser extent to Italian registered funds (+€6.7 billion).
In terms of type of fund, performance was driven mainly by flexible funds (+€16.2 billion) and
by bond funds (+€13.4 billion), while other categories remained much more stable: balanced
funds (+€2.7 billion), monetary funds (+€1.4 billion), equity funds (-€0.8 billion) and hedge
funds (-€1.4 billion)11. At the end of June assets under management had increased to €516.6 billion compared to
€481.6 billion at the end of December (+7.3%), the aggregate result of a change in the
composition in percentage terms into flexible funds (up from 14% to 16.1%) and into balanced
funds (up from 4.3% to 5.7%) and out of monetary funds (down from 6.7% to 5.5%), bond
funds (down from 51.7% to 50.7%) and equity funds (down from 20.5% to 19.9%).
* * *
The unfavourable economic context in the first half of 2013 continued to affect business in the
Italian banking system, characterised by very modest performance for funding and a fall in
lending which was greater for corporate and short-term lending. The progressive deterioration in credit quality continued at a fast pace, although this slowed slightly in June12.
On the basis of Bank of Italy figures13, at the end of June the month-on-month growth in direct funding (deposits of residents and bonds) had fallen to +0.5% (+1.6% in December),
back to the low levels of the summer of 2012, incorporating, moreover, a negative trend in the
first six months of 2013 (-1.6%). Within the item, the gap between funding from bonds (-9.5% compared to -6.8% in December14) and other forms of funding (+5.7% compared to +6.2% in
December15) remained. With regard to the latter, both “deposits with a preset maturity term of
up to two years” performed strongly year-on-year (+22.4%), attributable almost entirely to the
second half of 2012, while repurchase agreements recorded more even growth over twelve
months (+14.4%). As concerns loans to private sector residents, those same Bank of Italy figures show a year-on-
year fall in June of 3.6% (-1.9% in December 2012), a new low, and of 2.3% over six months.
In terms of borrowers, the data shows the continuing weakness of overall loans to households
(-1.4%, unchanged compared to December; -0.6% in the first half), also seen in the individual
types of lending: consumer credit (-5.4% compared to -6.9%; but just -0.6% in the first half), home purchase loans (-0.9% compared to -0.6%) and other loans (-1%, also since the
beginning of the year, compared to -1.1%).
The year-on-year change in lending to businesses was even more negative
(-4.8% compared to -3.2% in December)16 with a more marked deterioration within the item for
11 Net inflows in the first half also included -€0.6 billion into “unclassified funds”.
12 The deterioration in credit quality could ease in coming months due to the impact of repayments of arrears by public administrations to those companies furthest into debt and which are most vulnerable financially.
13 Supplement to the Statistics Bulletin Moneta e Banche, August 2013. 14 The changes were calculated by excluding the portion included within the investments in the securities portfolio (the item “other
securities”) from bond funding. Gross of that item, Italian Bank funding from bonds recorded a year-on-year fall at the end of June of 4.5% (+5% in December 2012).
15 The changes were calculated by excluding amounts relating to the disposal of loans and transactions with central counterparties from deposits. Gross of those items, funding consisting of other types of deposit recorded year-on-year growth at the end of June of
7% (+8.3% in December 2012). 16 Inclusive of loans not recognised in the balance sheets of banks because they are securitised and net of changes in amounts not
connected with transactions (e.g. changes due to fluctuations in foreign exchange rates, to impairment or to reclassifications) the
18
the short-term component (-4.6% compared to -1.8%) compared to the long-term component (-
5% compared to -4.1%). From the viewpoint of the risk, according to Bank of Italy figures non-performing loans to the private sector gross of impairment losses increased – especially those to non-financial
companies – to reach €137.7 billion in June, an improvement of 22.1% year-on-year (slowing
slightly from +22.5% in May) and of +10.5% compared to December. This total included €42.8
billion relating to households (+15.9% year-on-year) and €94 billion to businesses (+24.9%). The ratio of gross non-performing private sector loans to private sector loans was therefore 8.17% (7.24% at the end of 2012), while the ratio of gross non-performing private sector loans to capital and reserves rose to 36.06% from 33.43% in December.
Net non-performing loans rose to €70.6 billion, an increase of 30% over twelve months (+31.5%
in May) and of 9.1% in the first half. Consequently, the ratio of net non-performing loans to total loans rose to 3.75% from 3.36% at the end of year, while the ratio of net non-performing
loans to capital and reserves increased to 18.50% from 17.37% at the end of 2012.
Securities issued by residents in Italy held in the portfolios of Italian banks had reached €935.5
billion in June, a year-on-year increase of €104.6 billion (+12.6%), relating mainly to investments in Italian government securities (+€86.4 billion, of which +€70.7 billion since the
beginning of the year). Purchases of government securities mainly involved medium to long-
term maturities (BTPs and CCTs; +€76.2 billion, of which +€53.6 billion since January) and to
a lesser extent the short-term sector (BOTs and CTZs; +€9.7 billion).
Over twelve months, “other certificates” on the other hand, increased by €18.2 billion to €533.7 billion, but decreased since the beginning of the year (-€9.2 billion). Within the item,
the proportion of bank bonds remained fairly constant at 70% (+€13 billion year-on-year, but -
€8.5 billion compared to December).
The average interest rate on bank funding from customers calculated by the Italian Banking
Association17 (which includes the return on deposits, bonds and repurchase agreements for households and non-financial companies) was 1.96% in June (2.08% at the end of 2012). The average weighted interest rate on lending to households and non-financial companies on the
other hand was 3.75% (3.79% in December).
annual rate of change in loans to non-financial companies and households was -4.1% (-2% in December) and -1% (-0.5% in December) respectively.
17 Italian Banking Association, Monthly Outlook, Economia e mercati Finanziari-Creditizi, July 2013.
19
Significant events in the first half of 2013
Merger of Centrobanca into UBI Banca
The merger of Centrobanca into UBI Banca became effective on 6th May 2013, with effect for
accounting and tax purposes from 1st January 2013. The operation, which was officially launched on 6th February and authorised by the Bank of Italy on 20th February 2013, had
already been announced in November 2011 and forms part of the process in progress to
streamline the ownership structure.
In line with the civil law draft terms of the merger, the Supervisory Board of UBI Banca and
the Shareholders' Meeting of Centrobanca passed resolutions concerning the merger pursuant to article 2502 of the Italian Civil Code, with approval of the merger terms on 27th March 2013
(registration of the resolution with the Bergamo Registrar on 28th March 2013) and 5th April
2013 (registration of the resolution with the Milan Registrar on 8th April 2013). Details of technical and corporate aspects of the transaction are given in the “Condensed consolidated financial statements as at for the period ended 30th June 2013” in the section “The scope of consolidation”.
***
The relative trade union negotiations were commenced on 28th February and concluded on
23rd April 2013. The operation did not cause employment problems as such, because the
excess staff in the report presented to trade unions, which numbered approximately 90, were
already comprised within a greater number of redundancies covered by the Framework
Agreement of 29th November 2012 and linked agreements.
The Group has found new positions within it for these staff (the process will be completed gradually by the end of year), by using flexible working instruments already defined in the
agreement mentioned (intragroup mobility, secondment, equivalent duties).
These staff worked mainly in Governance or “staff” units (which now report to the same units
at UBI Banca), while the other three types of unit (Credit, Finance and Commercial) will only
see their numbers reduced a little to create efficiencies from synergies with the Parent. From a business viewpoint, the merger operation involves maintaining the specialist lines of
business operated by Centrobanca, consisting of corporate and investment banking. To
achieve this, an IT architecture solution was identified to guarantee the necessary support, at
present and going forward, on the target system for the specialist activities that were migrated.
From an organisational viewpoint, the changes made to Parent units were basically designed
to ensure continuity (also in terms of geographical location) to the operations carried out before, especially in the Credit, Finance and Commercial areas.
The renewal of governing bodies
As already fully reported in the previous quarterly financial report, the shareholders meeting held on 20th April 2013 appointed a new Supervisory Board to UBI Banca for the period 2013-
2015, which was composed of 18 board members elected from the list proposed by the retiring
Supervisory Board, having obtained the majority of votes cast (53.5%), and 5 board members
elected from the list named “UBI, banca popolare!”, which received 34.3% of votes .
In its first meeting on 23rd April 2013, in addition to appointing two Deputy Chairmen, a Secretary and members of the various Committees, the new Supervisory Board also appointed
a new Management Board. It reduced the number of members from 11 to 9, which also
included two members of senior management, the General Manager and the Senior Deputy
General Manager of UBI Banca, and proposed maintaining the same Chief Executive Officer.
20
The Management Board confirmed Victor Massiah as Chief Executive Officer in a meeting held
on 23rd April.
Consistent with a commitment to reduce government costs, the total remuneration approved
for the period 2013-2015 for the Supervisory Board and the Management Board of UBI Banca
was 18% lower than that which had been approved for the previous three-year period (which
had in turn incorporated a reduction of 11%).
Action has also been planned and in part has already been implemented in Group companies
in order to optimise governance costs by reducing the number of members on governing bodies
as part of strategic organisational changes commenced by the Group designed to simplify
operations making them more streamlined, less costly and more in line with market demands.
Authorisation to use the AIRB approach for the regulatory retail segment
With Provision No. 689988 of 19th July 2013, the Bank of Italy authorised the UBI Banca Group – as of the supervisory report as at 30th June 2013 – to use the advanced internal
rating based (AIRB) approach to calculate capital requirements to meet credit risk relating to
the small and medium-sized enterprise portfolio and to exposures backed by residential
properties [regulatory segments: “retail: other exposures (SME-retail)” and “retail: exposures
backed by residential properties”].
The Group had already received authorisation with regard to the corporate segment with
Provision No. 423940 of 16th May 2012, as of the report as at 30th June 2012.
The standardised approach will continue to be used for all the other portfolios with account
taken of the roll-out plan submitted to the Supervisory Authority.
In terms of the companies involved, at the date of this report the scope of application for the
approaches authorised is as follows:
AIRB: Banca Popolare di Bergamo, Banco di Brescia, Banca Popolare Commercio e
Industria, Banca Popolare di Ancona, Banca Regionale Europea, Banca Carime, Banca
Valle Camonica, UBI Banca Private Investment and UBI Banca1;
standardised approach: all other Group legal entities.
The rollout of the portfolios authorised to apply internal approaches led to an improvement of
over 1 percentage point of Group’s Core Tier 1 ratio compared to December 2012.
1 The Parent, UBI Banca, includes the exposures of the former B@nca 24-7 and the former Centrobanca to which the internal models
validated apply for the calculation of capital requirements.
21
The distribution network and market positioning
The branch network of the Group
The branch network of the UBI Banca Group as at 30th June 2013 consisted of 1,734
branches, of which 1,726 operating in Italy, one less compared to the end of 2012.
The branch network of the UBI Banca Group in Italy and abroad
number of branches30.6.2013 31.12.2012 Change
UBI Banca Scpa 4 3 1
Banca Popolare di Bergamo Spa 357 353 4
Banco di Brescia Spa 322 322 -
Banca Popolare Commercio e Industria Spa (1) 219 219 -
Banca Regionale Europea Spa (2) 259 259 -
Banca Popolare di Ancona Spa 220 220 -
Banca Carime Spa 255 255 -
Banca di Valle Camonica Spa 66 66 -
UBI Banca Private Investment Spa 25 25 -
IW Bank Spa 2 2 -
Centrobanca Spa (3) - 6 -6
UBI Banca International Sa - Lussemburgo 3 3 -
Banque de Dépôts et de Gestion Sa - Svizzera (4) 2 2 -
TOTAL 1,734 1,735 -1
Total Branches in Italy 1,726 1,727 -1
Financial advisors 661 672 -11
ATMs 2,330 2,337 -7
POS TERMINALS 59,700 60,049 -349
(1) The figures do not include 9 units dedicated exclusively to pawn credit operating under the Banca Popolare Commercio e Industria
brand. (2) The figures include 3 foreign branches.
(3) The change reflects the merger of Centrobanca into UBI Banca on 6th May 2013.
(4) Preliminary contracts were signed for the disposal of the bank on 19th August 2013.
Following significant action taken to rationalise operations in the previous year, changes in the
first half reflected the merger of Centrobanca into the Parent, with the closure of pre-existing
units in Naples, Bologna and Turin, the transformation of branches in Jesi (Ancona) and in
Rome into advisory branches and the merger into UBI Banca of the operating headquarters at 16 Corso Europa in Milan together with the opening at the same time of a support unit for the
administrative management of finance managed by the new Corporate Lending and Structured
Finance specialist unit.
As shown in the table,
the remaining marginal actions
taken all relate to
Banca Popolare di
Bergamo and
summarise the following: on the one
hand the
transformation into
mini-branches of the treasury branches at Camerata Cornello, Riva di Solto, Roncola
(Bergamo), Castelseprio and Lozza (Varese) in January; and on the other hand, the closure in
April of a mini-branch at Trezzo sull’Adda (Milan) located in Piazza Libertà.
Action taken on the branch network of the Group in Italy in 2013
branches mini-branches branches mini-branches
UBI Banca Scpa 1 - - - -
Banca Popolare di Bergamo Spa - - 5 - 1
Centrobanca Spa - - - 6 -
TOTAL 1 - 5 6 1
Openings/Merger
acquisitions:Transformation
of treasury
branches into
mini-branches
Closures:
22
The Italian distribution network is supplemented by the new UBI Banca Private &
Corporate Unity units (PCUs), created in
January, designed to unify and streamline the
previous private and corporate banking
facilities. At the end of the first half, 131
centres were operational (50 PCUs and 81 “Corners”) throughout Italy, unchanged
compared to the 31st January.
Finally, market coverage continued to be
guaranteed also by a network of 661 financial advisors reporting to UBI Banca Private
Investment, of which 342 operating in the
Northern Division and 319 in the Southern
Division.
The international presence
At the date of this report, the international presence of the UBI Banca Group was structured
as follows:
two foreign banks: UBI Banca International Sa (with headquarters in Luxembourg and
branches in Munich and Madrid) and Banque de Dépôts et de Gestion Sa (with headquarters at Lausanne in Switzerland and branch a branch at Lugano)1;
three foreign branches of Banca Regionale Europea in France (at Nice, Menton and
Antibes);
representative offices in Sao Paolo in Brazil, Mumbai, Shanghai, Hong Kong and Moscow;
investments (mainly controlling interests) in three2 foreign companies: UBI Trustee Sa, UBI
Management Co. Sa and Zhong Ou Asset Management Co. Ltd3;
a Branch of UBI Factor Spa in Krakow in Poland;
37 commercial co-operation agreements with foreign banks (covering more than 50
countries) – including two “Trade Facilitation” agreements with the European Bank for
Reconstruction and Development (EBRD) and with the International Financial Corporation
(IFC) – and also a “product partnership” in the Middle East and in Asia to guarantee effective assistance on all the principal markets in those areas for corporate clients.
Again in the first half of 2013 the UBI Banca Group sponsored events of national and
international importance in order to increase the visibility of its brand in Italy and abroad and
to consolidate its closeness to customers who operate on international markets. It also
organised conventions, meetings and study events4.
1 Preliminary contracts were signed on 19th August for the disposal of 100% of the share capital of BDG, subject to final authorisation
from the FINMA and completion of the IT migration onto the target systems of the acquirer.
2 On 14th June 2013, UBI Capital Singapore Pte Ltd, the company controlled by UBI Banca International Sa, was officially placed in liquidation.
3 With effect from 6th May 2013, Lombarda China Fund Management Co. changed its name to Zhong Ou Asset Management Co. Ltd..
4 The very many initiatives included the following:
co-operation by UBI Banca and Banco di Brescia with Probrixia to organise a seminar entitled “North Africa and Turkey”, held at Brescia on 22nd January, within which a presentation was given on the new regulations for the promotion of foreign investment in Turkey by UBI Banca’s Corresponding Banking Area Manager;
participation on 28th March, as the exclusive banking sponsor in the ninth edition of the Cathay Pacific Business Award, an important and prestigious recognition for Italian companies that in the past year have excelled in terms of know-how, dynamism,
innovation and creativity in the development of business relations on markets in Southeast Asia;
participation on 9th May at Pavia in the convention “Hong Kong at the centre of your business” organised by Cathay Pacific Airways and the Pavia Export Consortium, following the recent signing of a treaty against double taxation between Italy and Hong
Kong;
the organisation at Brescia on 13th and 14th June of the sixth edition of the biennial “UBI International Banking Forum” which saw the participation of the Group’s major foreign correspondent banks. The subject chosen, “Italy as a bridge between the
European Union and the New Mediterranean”, was designed to inform and reassure correspondent banks with regard to the
Private & Corporate Banking Units
30.6.2013 31.1.2013
Private & Corporate Banking Units 131 131
Private & Corporate Banking Units (PCUs) (*) 50 50
Banca Popolare di Bergamo 13 13
Banco di Brescia 9 9
Banca Popolare Commercio e Industria 7 7
Banca Regionale Europea 7 7
Banca Carime 5 5
Banca Popolare di Ancona 7 7
Banca di Valle Camonica 2 2
"Corners" 81 81
Banca Popolare di Bergamo 26 26
Banco di Brescia 12 12
Banca Popolare Commercio e Industria 9 9
Banca Regionale Europea 4 4
Banca Carime 6 6
Banca Popolare di Ancona 22 22
Banca di Valle Camonica 2 2
(*) The figure doe s not inc lude 6 units of UBI Ba nc a P riva te Inve s tme nt for use by
individua l c us tome rs only a nd thre e UBI Ba nc a units ope ra ting s inc e s ix Ma y 2013 a nd
a lso for individua l c us tome rs only.
23
Remote channels
In a context of a persistently deteriorating economic environment, the continuous
technological development and improvement of direct channels is becoming an increasingly more important strategic tool for the acquisition of new customers and the management of
relationships with the existing customer base. At the same time it lowers operating costs and
ensures appropriate management of product and process innovation.
Channels available to customers on the integrated platform of the UBI Banca Group include
the following:
the QUI UBI internet banking service which also includes “Business” versions for “Small
Business” and “Corporate” customers who operate using facilities made available by the
Corporate Banking Interbank (CBI) service;
the Customer Service for customer relationship and consultation activity was further
expanded in the first half of 2013 with the opening of a new centre at Cosenza, in addition to the UBI.S units already operating at Brescia, Milan and Varese;
the Mobile Banking service for access to the main internet banking functions by means of
devices such as smart phones, BlackBerry and tablets;
a network consisting of over 2,300 self service facilities (ATMs and kiosks), including over
300 also able to receive payments in cash and cheques using a “Bancomat” debit card or a
free-of-charge VersaQuick card (evolved ATMs).
Users of the QUI UBI service increased by a total of over 7% to approximately 1.15 million in
the first six months of 2013 (1.07 million in December 2012). This increase was driven by both
good performance by the Home Banking service (+8.2% to 881 thousand users) and also by
the QUI UBI Business service, users of which exceeded 125 thousand at the end of June (+12%).
Mobile Banking on the other hand, continued to record strong increases in both the number of
average monthly accesses to the optimised site (+37% to 315 thousand) and the number of
app downloads (+66% to 166 thousand).
The popularity with customers was also confirmed by the results for use in the first half:
+23% for credit transfers, payments and reloads, for a total of 4.6 million transactions;
56% of securities trades on regulated markets were performed via internet;
over one fifth of payments into accounts in cash and cheques were performed using evolved
ATMs;
over 570 thousand commercial contacts managed by the Customer Service.
Results for the online sales platform also continued to be encouraging, with approximately
12,800 requests completed online since the introduction of the service in October 2011 and
almost 4 thousand products sold.
New developments introduced include the following: the development of an innovative demo of
the Multichannel Bank to support customers; the launch of a dedicated site for UBI Banca Private & Corporate Unity; the launch of multiple commercial initiatives to support online
sales of the prepaid card Enjoy (“Enjoy Your Love”, “It’s time to Enjoy” and “Enjoy Your Card”).
Important initiatives were also commenced in July: the simplification of the process to manage
and recover access passwords for QUI UBI and QUI UBI Business; the launch of a plan for the
migration of Group ATMs to the new software named “QUI Multibanca Plus”, which will allow
economic situation in Europe and Italy, and also to provide a reliable general overview of the performance of Mediterranean
economies, following the important changes that had occurred in the area. Participants at the convention numbered 68 consisting of UBI Banca’s foreign correspondent banks international bodies and supranational institutions from 26 countries to give a total
of 97 participants during the two days;
another edition on 18th June at Jesi of the “UBI International Open Day” for Banca Popolare di Ancona customers, an event dedicated to all small, medium and large enterprises who show an interest in foreign markets. Businesses had the opportunity to
meet Group specialists assisted by outside professionals from all over the world. As usual the event was made more interesting by special focus workshops on BRIC countries, North Africa and the Middle East as well as on Europe presented by the managers of
UBI Banca’s representative offices in co-operation with outside professionals.
24
access to new consultation and payment services and also the ability to communicate profiled
commercial content via ATMs.
Payment cards
Despite the difficult economic context, the search for increasingly more advanced technological
systems continued in the area of cards and payment systems alongside initiatives designed to
consolidate and broaden customer relationships.
At the end of the first half, a total of approximately 716 thousand credit cards were in use,
issued by UBI Banca and CartaSi, a slight fall compared to over 723 thousand at the end of
2012 (-1%), the result of a contraction in company cards and revolving cards. The negative
performance of the economy and lower purchasing power by customers was also reflected in a fall of 4.5% in terms of use.
The range currently offered by the Group is differentiated by type of user:
individual customers can choose between charge cards, revolving or flexible cards (with
repayment either of the balance or in instalments) of different varieties according to the
market (retail and private banking);
for companies, on the other hand, business and corporate cards are available which vary
according to the credit limit and the services.
The encouraging trend for prepaid cards continued again in 2013 with total cards issued
exceeding 302 thousand at the end of June, an increase of 12.3% compared to approximately 269 thousand cards in issue in December, due mainly to the success of the Enjoy card (+17%
to 186 thousand) – the card associated with an IBAN – and commercial initiatives associated
with it.
In this respect, the card EnjoyMe was launched in June, supported by a digital multi-channel
and multi-format advertising programme. This is a new version of the card that can be
purchased online with full customisation of the graphics by the customer. The positive performance by prepaid cards is also reflected in an increase of 25% in their use.
Debit cards issued by the Group numbered approximately 1.47 million, an increase of 2.7%
compared to 1.43 million in December 2012. The trend for card use was also positive
notwithstanding the lower purchasing power of customers (+1.9% for the PagoBancomat network and +1.8% for the Bancomat network).
As concerns acceptance of payments, the Group also has approximately 60 thousand POS
terminals installed in retail outlets, slightly down compared to the end of the year (-0.6%). In
terms of transaction volumes purchases through Visa and MasterCard networks decreased
while those through the PagoBancomat network increased, which is attributable to the greater propensity of consumers to use debit cards in a period of economic downturn, because they
guarantee immediate disclosure in their current accounts and are easier to check.
In January the Group launched an innovative pilot project named “Enjoy Mobile Payments”,
which involves the virtual implementation of a prepaid card (Enjoy) on a telephone SIM card
with the ability to make payments with NFC smart phones on contactless POS terminals. Then in May the POS Mobile pilot project commenced on around 10 retailers allowing them to
receive card payments by means of a smart phone.
The Group’s product range was broadened over the summer with possibility to install POS
terminals at points of sale that request it, equipped with near field communication (NFC)5
technology, particularly suitable for transactions involving small amounts (known as micro
payments) currently handled almost exclusively in cash. It is therefore planned from 5th
5 NFC technology allows payments to be accepted in a contactless manner, i.e. without any physical contact (reading the magnetic
strip or the microchips) between the card and the terminal. With this technology payments can be made not only by using contactless cards, but also with other instruments such as NFC smart phones and for payments up to €25 the POS terminal issues
no receipt and no PIN needs to be typed in or a signature given to confirm the transaction.
25
August to progressively replace approximately 4 thousand standard POS terminals with
contactless installations, which could be completed by the end of the year.
The positioning of the Group
The table summarises the market
positioning of the UBI Group in terms
of branches, conventional funding
(excluding bonds) and loans both at
national level and in regions and
provinces where Group banks have a more significant presence. The figures are based on the latest available data from the Bank of Italy: 31st March 2013 for branches and 31st December 2012 for balance sheet items, considered on the basis of the location of the branch.
The update in March 2013 does not
show any significant changes in the
percentages of branches compared to
the position at the end of 2012. National market share remained stable
at 5.3%, again with shares of higher
than 10% in 15 Italian provinces
together with a substantial presence in
Milan (approximately 9%) and Rome
(over 4%).
As a result of the characteristics of the
two original groups, in some areas
where the Group’s presence is stronger,
it continues to have a market share of traditional funding and/or lending that
is greater than the percentage of
branches.
UBI Banca Group: market share (*)
31.3.2013
Branches Branches Funding
(**) (***)
Lending
(***)
North Italy 6.2% 6.1% 5.9% 6.6%
Lombardy 12.7% 12.6% 10.0% 9.8%
Prov. of Bergamo 21.7% 21.2% 30.3% 40.6%
Prov. of Brescia 22.0% 21.9% 36.1% 35.7%
Prov. of Como 6.2% 6.1% 5.4% 8.3%
Prov. of Lecco 6.1% 6.0% 5.7% 7.2%
Prov. of Mantua 5.2% 5.2% 3.3% 3.7%
Prov. of Milan 8.9% 8.8% 4.8% 3.8%
Prov. of Monza Brianza 8.2% 8.2% 7.1% 9.8%
Prov. of Pavia 14.8% 14.6% 15.1% 11.4%
Prov. of Sondrio 8.0% 8.0% 1.7% 3.3%
Prov. of Varese 23.0% 22.6% 28.3% 20.7%
Piedmont 7.8% 7.8% 5.3% 6.3%
Prov. of Alessandria 10.6% 10.6% 7.6% 10.4%
Prov. of Cuneo 23.7% 23.5% 21.3% 16.5%
Prov. of Novara 3.3% 3.3% 3.5% 6.6%
Liguria 5.3% 5.3% 5.0% 7.8%
Prov. of Genoa 4.5% 4.5% 4.4% 7.2%
Prov. of Imperia 5.2% 5.2% 3.4% 9.1%
Prov. of La Spezia 8.3% 8.3% 11.1% 7.0%
Prov. of Savona 5.6% 5.6% 3.5% 9.4%
Central Italy 3.3% 3.3% 2.6% 2.5%
Marches 7.3% 7.3% 8.8% 8.8%
Prov. of Ancona 9.5% 9.6% 13.3% 11.8%
Prov. of Fermo 10.3% 10.1% 10.5% 15.0%
Prov. of Macerata 8.1% 8.0% 9.7% 8.8%
Prov. of Pesaro and Urbino 4.9% 4.9% 3.7% 4.6%
Latium 4.3% 4.2% 2.5% 2.6%
Prov. of Rome 4.1% 4.0% 2.4% 2.5%
Prov. of Viterbo 13.8% 13.7% 11.9% 11.1%
South Italy 7.6% 7.5% 6.5% 5.3%
Campania 5.4% 5.3% 4.3% 4.2%
Prov. of Naples 4.7% 4.6% 3.8% 3.4%
Prov. of Caserta 8.7% 8.7% 6.9% 7.7%
Prov. of Salerno 6.6% 6.5% 5.3% 5.9%
Calabria 20.0% 19.8% 20.8% 14.3%
Prov. of Catanzaro 11.9% 11.9% 16.1% 9.9%
Prov. of Cosenza 24.1% 23.9% 27.1% 19.5%
Prov. of Crotone 13.9% 13.9% 11.8% 7.5%
Prov. of Reggio Calabria 20.5% 20.2% 16.1% 11.3%
Prov. of Vibo Valentia 25.0% 24.3% 28.2% 19.0%
Basilicata 13.0% 12.9% 11.8% 8.8%
Prov. of Potenza 12.9% 12.8% 12.5% 9.6%
Prov. of Matera 13.2% 13.0% 10.8% 7.5%
Apulia 7.6% 7.5% 6.7% 4.9%
Prov. of Bari 9.6% 9.5% 7.9% 5.4%
Prov. of Brindisi 9.5% 9.4% 8.1% 5.4%
Prov. of Barletta Andria Trani 6.7% 6.7% 5.7% 4.9%
Prov. of Taranto 8.4% 8.1% 7.1% 5.3%
Total Italy 5.3% 5.3% 5.0% 5.4%
(**) Current accounts, certificates of deposit, savings deposits.
(***) Market share by location of the branch.
31.12.2012
(*) Source Bank of Italy: statistics bulletin for branch shares; matrix reports for balance-sheet figures
26
Human resources
The composition of staff numbers and changes in the first half
Group staff
30.6.2013 31.12.2012 Changes 30.6.2012 30.6.2013 31.12.2012 Changes
Number A B A-B C D E D-E
Banca Popolare di Bergamo Spa 3,632 3,697 -65 3,722 3,700 3,787 -87
Banco di Brescia Spa 2,522 2,555 -33 2,567 2,533 2,577 -44
Banca Carime Spa 1,980 2,144 -164 2,174 2,123 2,279 -156
Banca Regionale Europea Spa 1,808 1,900 -92 1,921 1,888 1,983 -95
Banca Popolare Commercio e Industria Spa 1,629 1,676 -47 1,688 1,804 1,859 -55
Banca Popolare di Ancona Spa 1,627 1,675 -48 1,698 1,707 1,762 -55
UBI Banca Scpa * 1,621 1,712 -91 1,778 2,178 2,638 -460
Banca di Valle Camonica Spa 348 346 2 346 336 341 -5
IW Bank Spa 197 202 -5 283 206 210 -4
UBI Banca Private Investment Spa 156 163 -7 163 142 149 -7
UBI Banca International Sa 103 101 2 99 95 93 2
Banque de Dépôts et de Gestion Sa 61 62 -1 62 61 62 -1
TOTAL FOR BANKS 15,684 16,233 -549 16,501 16,773 17,740 -967
UBI Sistemi e Servizi SCpA 1,990 2,061 -71 1,994 1,112 762 350
UBI Leasing Spa 236 244 -8 239 219 223 -4
Prestitalia Spa * 170 170 - 123 72 83 -11
UBI Factor Spa 149 151 -2 149 132 138 -6
UBI Pramerica SGR Spa 145 145 - 143 117 117 -
BPB Immobiliare Srl ** 52 9 43 53 48 4 44
UBI Fiduciaria Spa 22 22 - 23 17 17 -
UBI Academy SCRL *** 16 16 - - - - -
UBI Gestioni Fiduciarie Sim Spa 7 7 - 7 4 4 -
UBI Management Company Sa 4 3 1 3 3 3 -
Coralis Rent Srl 3 4 -1 4 - - -
UBI Trustee Sa 3 4 -1 4 3 4 -1
Centrobanca Sviluppo Impresa SGR Spa 2 6 -4 6 - 2 -2
S.B.I.M. Spa 1 1 - 1 - - -
UBI Capital Singapore Pte Ltd **** - 10 -10 14 - 10 -10
TOTAL 18,484 19,086 -602 19,264 18,500 19,107 -607
Workers on staff leasing contracts 1 2 -1 6 1 2 -1
TOTAL STAFF 18,485 19,088 -603 19,270
On secondment outside the Group
- out 23 28 -5 30
- in 7 7 -
TOTAL WORKFORCE 18,508 19,116 -608 19,300 18,508 19,116 -608
Employees actually in service Employees on the payroll
* The merger of Centrobanca into UBI Banca became effective on 6th May 2013. As already reported, on 1st July 2012, the contribution to Prestitalia of the
B@nca 24-7 line of business consisting of salary and pension backed lending operations became effective, followed on 23rd July 2012, by the merger of
B@nca 24-7 into UBI Banca.
** At the end of the first half, BPB Immobiliare staff also included personnel appointed on seasonal contracts that were not banking industry contracts: 44 as at 30th June 2013 and 44 as at 30th June 2012.
*** UBI Academy was formed in July 2012 without the contribution of human resources. Staff who previously operated in the UBI Banca Training Service
were transferred on secondment to this consortium company. **** UBI Capital Singapore was subject to liquidation procedures as that 30th June 2013 and it therefore had no staff in service or on the payroll.
The table above gives details for each company of the actual distribution of ordinary employees (workers on permanent and temporary
contracts and on apprenticeship contracts) as at 30th June 2013, adjusted to take account of secondments to and from other entities within or external to the Group (column A) compared with the position at the end of 2012 (column B) and the position as at 30 th June 2012
(column C), both restated on a consistent basis. Column D, on the other hand, gives details for each company of the number of employees on the payroll as at 30th June 2013 compared with the end of 2012, also restated on a consistent basis (column E).
Compared to the previous Interim Consolidated Financial Report the figures as at 30th June 2012 have been adjusted as follows: the figure for UBI Banca staff has been restated to take account of the mergers of Centrobanca (6th May 2013), Silf (21st December 2012)
and B@nca 24-7 (23rd July 2012). A small number of staff were included in the total who were transferred to Prestitalia on 1st July 2012 with the contribution of the salary backed lending line of business;
the figure for IW Bank staff has been restated to take account of the merger of InvestNet International (23rd July 2012); the figure for Banca Regionale Europea has been restated to take account of the merger of Banco di San Giorgio (22nd October 2012). The
staff numbers were also increased by one in relation to a reinstatement that occurred in the second quarter of 2013; UBI Insurance Broker has been excluded from Group staff calculations following the disposal of the company with effect from 21st
December 2012.
Compared to the figures published in the last financial report, staff numbers as at 31st December 2012 have been adjusted by 1 for both
Banca Carime and Banca Regionale Europea following reinstatements in the first and second quarters of 2013 respectively. The figure for staff at UBI Banca has also been restated to take account of the merger of Centrobanca.
27
At the end of the first half of 2013 the total staff of the UBI Banca Group numbered 18,485
compared to 19,088 at the end of 2012, a decrease during the period of 603. As shown in the table, the numbers of employees actually in service at individual bank and company level fell
in all Group entities, with marginal exceptions at Banca di Valle Camonica, UBI Banca
International and BPB Immobiliare, the latter the result of the seasonal component (+44 staff).
Changes in total staff numbers over six months reflect those for permanent employees (-712
staff), which was only partially mitigated by use of temporary contracts (+70 new contracts, 44 of which relating to BPB Immobiliare) and of apprenticeships (+35 new contracts).
The decrease in permanent staff was due mainly to staff leaving by applying for early
retirement under the Group Framework Agreement of 29th November 2012 and the subsequent
agreement of 12th February 2013. Total redundancies agreed under the agreements mentioned
numbered 736, of which 723 already completed at the date of this report (714 at the end of the first half) and 13 expected by the end of the year.
To balance the staff leaving mentioned above, as at 30th June 63 temporary contracts had
been made permanent, 104 new appointments had been made and 68 temporary agency staff
had been recruited (82 at the date of publishing this report, corresponding to a total of 400
months). It is planned to both convert temporary contracts into permanent contracts and recruit staff, some of which not on permanent contracts, for a total of 283 workers by 31st
December 2015.
The framework agreement of 29th November 2012 and the subsequent agreement of 12th
February 2013 also contain provisions for the suspension or reduction of working hours by
means of access to the “ordinary cheque” of the Solidarity Fund for Banking Staff. The number of days requested for the reduction and/or suspension of work for 2013, totalled
approximately 137,000, which were accepted where compatible with the organisational and
production requirements of individual units and companies.
The table gives details of changes in the
type of employee contract, with a total decrease in numbers during the first
half of 607, the result of 824 staff
leaving – 716 due to use of the
“solidarity fund” or retirement, 35 for
end of contract – and 217 new appointments (28 permanent, 151 on
temporary contracts and 38 on
apprenticeship contracts).
Finally, as shown in the table there were no significant changes in the
composition of staff by rank.
Employees on the payroll
Number 30.6.2013 31.12.2012 Change
Total employees 18,500 19,107 -607
of which: permanent 18,300 19,012 -712
on temporary contracts 157 87 70
apprentices (*) 43 8 35
(*) Contract for young people between the ages of 18 and 29, by which they acquire a qualification
through training at work which provides them with specific occupational skills. The duration
varies from a minimum of 18 months to a maximum of 48 months.
Composition of staff in Group Banks by rank
Number 30.6.2013 % 31.12.2012 %
Senior managers 328 2.0% 379 2.2%
Middle managers 3rd and 4th level 2,976 17.8% 3,250 18.3%
Middle managers 1st and 2nd level 3,745 22.3% 3,904 22.0%
3rd Professional Area (office staff) 9,534 56.8% 9,994 56.3%
1st and 2nd Professional Area (other staff) 190 1.1% 213 1.2%
TOTAL FOR BANKS 16,773 100.0% 17,740 100.0%
28
Training
Training activity conducted in the first six months of 2013 was designed mainly to improve
basic technical and professional skills for all roles in the network banks. The priority was to
focus on professional retraining and reorganisation projects with particular reference to some
areas of the Credit segment.
From a quantitative viewpoint over 38 thousand training days were delivered, consistent with an objective of over 86 thousand person days set for the whole of 2013. Compared to the same
period in 2012 (48 thousand hours), the reduction is consistent with training plan forecasts
resulting from the Framework Agreement signed with trade unions on 29th November 2012.
In terms of quality, the training action to support the new “Human Resources Quality” project should be underlined first of all. This important initiative is designed to improve the
management and development of Group staff and it will come to full fruition in 2013-2014.
Further aspects can be seen in the summary table, which shows a significant increase in
commercial and credit training due to the action just mentioned and also to the
implementation of projects designed to increase the personal relationship skills of distribution
network staff. The main activities taken forward in the reporting period are as follows:
strengthening “excellence competencies” in the new UBI Private & Corporate Unity units, with high-level training courses focused on the skills of Managers and Wealth Bankers;
the programme on new credit monitoring tools to support the rationalisation of loan performance
monitoring processes;
consolidation of the programmes for staff working on the development and acquisition of new
customers (Commercial Development Force), in terms of qualification and skill refinement training;
activities to present 2013 commercial objectives, concentrating on prioritising certain segments and aimed at educating Branch Managers on how to manage the performance of their own staff and to support them;
activities focused on the priorities of the small and medium-sized business segment, designed to increase knowledge of Small Business Managers on the new features of products and services in the Foreign and Credit areas;
consolidation of the training programme to support the Mass Market Team dedicated to customer
contact and service staff, focused on refining the new service model and on the commercial behaviours expected.
In addition to continuing with the projects mentioned above, the start of the following
initiatives is planned for the second half of the year:
improving the performance, enhancing and relaunching Affluent Managers (Value Programme). This activity is designed to enhance virtuous commercial behaviours and to strengthen distinctive skills and the performance of Affluent Managers in commercial and financial areas;
study for Branch Managers and Managers of the new Private and Corporate Unity units on internal
Group compliance methods, on anti-money laundering, on risks and operational controls, on MiFID regulations and on financial planning and advice. This is designed to strengthen commercial behaviours in the field of controls, connecting them with the management and development of commercial activities;
Subject area
ClassroomRemote
trainingInternship
Total
person/days
of training
%
Insurance 8,464 3,658 - 12,122 31.2% 28,633 28.8%
Commercial 7,356 - 774 8,130 21.0% 15,350 15.4%
Finance 918 17 101 1,036 2.7% 5,347 5.4%
Credit 5,984 1,998 633 8,615 22.2% 7,344 7.4%
Managerial-Behavioural 4,529 362 - 4,891 12.6% 12,434 12.5%
Regulatory 2,079 1,131 - 3,210 8.3% 20,082 20.2%
Operational and other subjects 671 50 51 772 2.0% 10,268 10.3%
TOTAL 30,001 7,216 1,559 38,776 100.0% 99,458 100.0%
Training activity by subject area in the first half of 2013
FY 2012
Total
person/days %
29
improving knowledge of and opportunities offered by nonprofit customers, in order to support
objectives and strategic positioning in the third sector;
strengthening vision and strategic awareness capacities, a proactive approach, innovation and risk
management, through two days of managerial training for Group executives and local managers;
the construction of training programmes specially designed for the over 55’s, developed on the basis of training needs that emerged from an analysis of the results of a survey. It is designed to enhance knowledge, experiences and skills.
Trade union relations
Procedures were commenced in April 2013 concerning the creation of a new Customer Service
operating centre, a key component of the Group’s multichannel strategy. This operation, for which an agreement was signed on 23rd May 2013, forms part of the plan to simplify Group
organisation designed to contain labour costs as a whole.
More specifically, it is planned to create a new dedicated Customer Service centre at the UBI.S
premises at Cosenza and at the same time to redefine the number of staff currently employed
in Customer Service at the UBI.S centres in Milan, Brescia and Varese. Implementation of the
above required the adoption of limited geographical mobility measures, some transitory, and also recourse to intragroup secondment of individual employees or groups of workers. It also
involved, where necessary, appropriate training and retraining courses for staff.
Meetings with trade union organisations commenced at the end of June in the network banks,
at the Parent UBI Banca, UBI Sistemi e Servizi and the product companies in order to sign agreements for the payment of company bonuses for the financial year 2012. In those
companies where agreements were reached with trade unions – with account taken of
company performances for the period and of the overall economic situation and that specific to
the credit sector – as in the previous year, it was agreed to employ different innovative
instruments with, in addition to a cash payment, also a “welfare plan” option which will allow
staff to allocate their remuneration to finance services of a social nature (e.g. educational expenses, or an additional contribution to the company pension fund). At the date of this
report negotiations had been concluded positively in most Group banks and companies and
there is a desire to reach an agreement with trade unions as soon as possible also in the
remaining companies.
Internal communication
The first half of 2013 saw further consolidation of the main means of internal communication,
the “UBILife” Corporate Group Portal, a working digital environment, which now totals
approximately 100,000 page views per week by employees. This result is supported by
constant work performed to update the contents daily with news, organisational and commercial initiatives, and events carried out at both Group and individual company level.
The portal also hosts YOUBIMagazine, the digital version of the previous hardcopy quarterly
periodical YOUBI. It is updated daily and may be commented on using blogs that are always
open.
At the same time two new initiatives have been launched:
UBIPod, periodical radio interviews that may be listened to from the intranet portal
UBILife, created with the assistance of an external interviewer, to examine topical
company issues and to get to know the real-life voices of colleagues throughout the
Group. In fact, as opposed to the “UBIClick” video messages, reserved for senior
management, the protagonists on UBIPod are colleagues at various levels and with differing degrees of responsibility who speak of their direct work experiences in an
informal atmosphere typical of the radio;
30
the launch of “Professional communities” and that is the experimental start-up of an
innovative social collaboration experience designed to allow staff who occupy the same role or work on the same projects and activities to discuss and share experiences,
knowledge and best practices in virtual environments that are always available in the
reserved areas of UBILife. The first “Professional community” for developers started up in
the first half.
Following the positive experimentation of the “Job Posting” tool (an online window of jobs available which allows staff who may be interested to send in applications) in 2012 at two
network banks, the service was made available on request in 2013 to all Group banks.
Internal communication also continued to make use during the reporting period of corporate
videos (UBIClick) for senior management to communicate on Group life and strategies (e.g. an interview of the Chief Executive Officer Victor Massiah to give news of the video and audio
advertisements, which formed part of the advertising campaign conducted on national and
local TV and radio) and also for tutorial videos, which give information and support for the
most important changes in activities and procedures (e.g. the video on the new SEPA
procedure). The UBIClick videos based on individual Group banks will also continue to be
available.
The second edition of Almanacco YOUBI was published in April in hardcopy format, which
gave news of the main events affecting the Group as a whole between March 2012 and March
2013, with detailed articles also on individual banks and companies. The publication was
distributed not only to all employees of the UBI Banca Group, but also to registered shareholders who attended the UBI Banca Annual General Meeting in April 2013.
The traditional annual convention was held at the end of March for the two associations of
retired personnel of the former BPB and BPCI, with an illustration of Group prospects and
consolidated results for 2012.
Management policies and the welfare system
No changes occurred during the six month period – except with regard to the initiatives
relating to the 2013 company bonuses – with respect to the information reported in the 2012
Annual Report which may therefore be consulted.
31
Reclassified consolidated financial statements, reclassified income statement net of the most significant non-recurring items and reconciliation schedules
Reclassified consolidated balance sheet
ASSETS
10. Cash and cash equivalents 490,754 641,608 -150,854 -23.5% 509,983 -19,229 -3.8%
20. Financial assets held for trading 4,686,491 4,023,934 662,557 16.5% 5,211,059 -524,568 -10.1%
30. Financial assets designated at fair value 206,860 200,441 6,419 3.2% 122,376 84,484 69.0%
40. Available-for-sale financial assets 13,746,914 14,000,609 -253,695 -1.8% 12,837,037 909,877 7.1%
50. Held-to-maturity investments 3,122,272 3,158,013 -35,741 -1.1% 3,192,239 -69,967 -2.2%
60. Loans and advances to banks 4,774,761 6,072,346 -1,297,585 -21.4% 4,843,142 -68,381 -1.4%
70. Loans and advances to customers 91,268,495 92,887,969 -1,619,474 -1.7% 95,333,181 -4,064,686 -4.3%
80. Hedging derivatives 335,198 1,478,322 -1,143,124 -77.3% 1,340,946 -1,005,748 -75.0%
90. Fair value change in hedged financial assets (+/-) 57,657 885,997 -828,340 -93.5% 819,561 -761,904 -93.0%
100. Equity investments 412,881 442,491 -29,610 -6.7% 406,225 6,656 1.6%
120. Property, plant and equipment 1,921,669 1,967,197 -45,528 -2.3% 2,002,183 -80,514 -4.0%
130. Intangible assets 2,946,268 2,964,882 -18,614 -0.6% 2,971,246 -24,978 -0.8%
of which: goodwill 2,536,574 2,536,574 - - 2,538,668 -2,094 -0.1%
140. Tax assets 2,393,041 2,628,121 -235,080 -8.9% 2,631,652 -238,611 -9.1%
150.
Non-current assets and disposal groups held for
sale 23,792 21,382 2,410 11.3% 37,748 -13,956 -37.0%
160. Other assets 1,543,208 1,060,390 482,818 45.5% 1,350,560 192,648 14.3%
Total assets 127,930,261 132,433,702 -4,503,441 -3.4% 133,609,138 -5,678,877 -4.3%
LIABILITIES AND EQUITY
10. Due to banks 15,025,192 15,211,171 -185,979 -1.2% 14,708,333 316,859 2.2%
20. Due to customers 52,843,251 53,758,407 -915,156 -1.7% 57,074,877 -4,231,626 -7.4%
30. Debt securities issued 43,500,547 45,059,153 -1,558,606 -3.5% 45,171,850 -1,671,303 -3.7%
40. Financial liabilities held for trading 1,548,967 1,773,874 -224,907 -12.7% 1,274,898 274,069 21.5%
60. Hedging derivatives 1,016,669 2,234,988 -1,218,319 -54.5% 1,966,231 -949,562 -48.3%
80. Tax liabilities 536,670 666,364 -129,694 -19.5% 562,709 -26,039 -4.6%
100. Other liabilities 2,064,030 2,391,283 -327,253 -13.7% 1,991,859 72,171 3.6%
110. Post-employment benefits 372,182 420,704 -48,522 -11.5% 400,953 -28,771 -7.2%
120. Provisions for risks and charges: 328,812 340,589 -11,777 -3.5% 352,369 -23,557 -6.7%
a) pension and similar obligations 78,751 80,563 -1,812 -2.2% 77,680 1,071 1.4%
b) other provisions 250,061 260,026 -9,965 -3.8% 274,689 -24,628 -9.0%
140.+
170.+180.+
190.+ 200.
Share capital, share premiums, reserves, valuation
reserves and treasury shares 9,808,892 9,655,174 153,718 1.6% 9,075,169 733,723 8.1%
210. Non-controlling interests 832,116 839,287 -7,171 -0.9% 870,347 -38,231 -4.4%
220. Profit (loss) for the period/year 52,933 82,708 n.s. n.s. 159,543 -106,610 -66.8%
Total liabilities and equity 127,930,261 132,433,702 -4,503,441 -3.4% 133,609,138 -5,678,877 -4.3%
30.6.2012
C
Changes
A-C
% changes
A/CFigures in thousands of euro
30.6.2013
A
31.12.2012
B
Changes
A-B
% changes
A/B
32
Reclassified consolidated quarterly balance sheets
ASSETS
10. Cash and cash equivalents 490,754 487,951 641,608 516,764 509,983 538,617
20. Financial assets held for trading 4,686,491 5,045,199 4,023,934 3,177,832 5,211,059 3,679,925
30. Financial assets designated at fair value 206,860 202,979 200,441 121,026 122,376 123,066
40. Available-for-sale financial assets 13,746,914 14,134,430 14,000,609 13,483,510 12,837,037 10,794,700
50. Held-to-maturity investments 3,122,272 3,185,071 3,158,013 3,220,200 3,192,239 3,254,437
60. Loans and advances to banks 4,774,761 5,505,388 6,072,346 5,286,733 4,843,142 4,925,671
70. Loans and advances to customers 91,268,495 92,264,578 92,887,969 94,843,423 95,333,181 97,105,771
80. Hedging derivatives 335,198 410,003 1,478,322 1,541,973 1,340,946 1,087,609
90. Fair value change in hedged financial assets (+/-) 57,657 78,088 885,997 868,601 819,561 722,393
100. Equity investments 412,881 447,352 442,491 423,352 406,225 409,499
120. Property, plant and equipment 1,921,669 1,940,484 1,967,197 1,973,317 2,002,183 2,021,314
130. Intangible assets 2,946,268 2,956,402 2,964,882 2,962,430 2,971,246 2,979,781
of which: goodwill 2,536,574 2,536,574 2,536,574 2,538,668 2,538,668 2,538,668
140. Tax assets 2,393,041 2,625,658 2,628,121 2,525,656 2,631,652 2,641,166
150. Non-current assets and disposal groups held for sale 23,792 23,205 21,382 19,231 37,748 37,217
160. Other assets 1,543,208 1,089,100 1,060,390 1,138,807 1,350,560 1,189,953
Total assets 127,930,261 130,395,888 132,433,702 132,102,855 133,609,138 131,511,119
LIABILITIES AND EQUITY
10. Due to banks 15,025,192 15,086,195 15,211,171 14,765,300 14,708,333 15,143,195
20. Due to customers 52,843,251 54,816,744 53,758,407 56,356,021 57,074,877 52,358,466
30. Debt securities issued 43,500,547 43,861,671 45,059,153 43,907,855 45,171,850 47,084,745
40. Financial liabilities held for trading 1,548,967 1,801,256 1,773,874 1,479,098 1,274,898 934,366
60. Hedging derivatives 1,016,669 1,167,314 2,234,988 2,102,181 1,966,231 1,823,770
80. Tax liabilities 536,670 748,223 666,364 632,136 562,709 807,049
100. Other liabilities 2,064,030 1,647,419 2,391,283 1,608,626 1,991,859 2,094,393
110. Post-employment benefits 372,182 389,246 420,704 410,555 400,953 405,062
120. Provisions for risks and charges: 328,812 329,075 340,589 332,063 352,369 347,885
a) pension and similar obligations 78,751 79,575 80,563 76,601 77,680 75,453
b) other provisions 250,061 249,500 260,026 255,462 274,689 272,432
140.+170.
+180.+190.+ 200.
Share capital, share premiums, reserves, valuation
reserves and treasury shares 9,808,892 9,692,341 9,655,174 9,401,308 9,075,169 9,497,332
210. Non-controlling interests 832,116 829,946 839,287 884,960 870,347 909,478
220. Profit (loss) for the period 52,933 26,458 82,708 222,752 159,543 105,378
Total liabilities and equity 127,930,261 130,395,888 132,433,702 132,102,855 133,609,138 131,511,119
30.6.2012 31.3.2012Figures in thousands of euro
30.6.2013 31.3.2013 31.12.2012 30.9.2012
33
Reclassified consolidated income statement
1H 2013 1H 2012 Changes % changes 2Q 2013 2Q 2012 Changes % changes FY 2012
A B A-B A/B C D C-D C/D E
10.-20. Net interest income 845,442 979,629 (134,187) (13.7%) 428,222 486,311 (58,089) (11.9%) 1,863,561
of which: effects of the purchase price allocation (18,596) (18,673) (77) (0.4%) (9,033) (9,051) (18) (0.2%) (36,980)
Net interest income excluding the effects of the PPA 864,038 998,302 (134,264) (13.4%) 437,255 495,362 (58,107) (11.7%) 1,900,541
70. Dividends and similar income 8,218 12,682 (4,464) (35.2%) 7,763 12,384 (4,621) (37.3%) 15,591
Profits of equity-accounted investees 30,719 25,759 4,960 19.3% 22,213 14,924 7,289 48.8% 44,426
40.-50. Net fee and commission income 602,245 586,055 16,190 2.8% 297,459 286,672 10,787 3.8% 1,182,276
of which performance fees - - - - - - - - 19,741
80.+90.+
100.+110. Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at fair value 109,367 105,364 4,003 3.8% 67,351 11,397 55,954 491.0% 257,278
220. Other net operating income/expense 56,227 85,076 (28,849) (33.9%) 29,428 49,045 (19,617) (40.0%) 163,179
Operating income 1,652,218 1,794,565 (142,347) (7.9%) 852,436 860,733 (8,297) (1.0%) 3,526,311
Operating income excluding the effects of the PPA 1,670,814 1,813,238 (142,424) (7.9%) 861,469 869,784 (8,315) (1.0%) 3,563,291
180.a Staff costs (646,234) (688,799) (42,565) (6.2%) (314,881) (327,564) (12,683) (3.9%) (1,373,719)
180.b Other administrative expenses (335,250) (352,222) (16,972) (4.8%) (173,557) (176,476) (2,919) (1.7%) (701,797)
200.+210. Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets (90,389) (95,769) (5,380) (5.6%) (45,114) (47,020) (1,906) (4.1%) (191,144)
of which: effects of the purchase price allocation (10,196) (10,064) 132 1.3% (5,098) (5,003) 95 1.9% (20,099)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets
excluding the effects of the PPA (80,193) (85,705) (5,512) (6.4%) (40,016) (42,017) (2,001) (4.8%) (171,045)
Operating expenses (1,071,873) (1,136,790) (64,917) (5.7%) (533,552) (551,060) (17,508) (3.2%) (2,266,660)
Operating expenses excluding the effects of the PPA (1,061,677) (1,126,726) (65,049) (5.8%) (528,454) (546,057) (17,603) (3.2%) (2,246,561)
Net operating income 580,345 657,775 (77,430) (11.8%) 318,884 309,673 9,211 3.0% 1,259,651
Net operating income excluding the effects of the PPA 609,137 686,512 (77,375) (11.3%) 333,015 323,727 9,288 2.9% 1,316,730
130.a Net impairment losses on loans (383,892) (334,351) 49,541 14.8% (226,150) (203,181) 22,969 11.3% (847,214)
130. b+c+d Net impairment losses on other financial assets and liabilities (17,273) (49,740) (32,467) (65.3%) (8,960) (47,663) (38,703) (81.2%) (54,810)
190. Net provisions for risks and charges (11,604) (20,879) (9,275) (44.4%) (9,275) (16,764) (7,489) (44.7%) (49,212)
240.+270. Profits from the disposal of equity investments 1,085 30 1,055 n.s. 1,609 9 1,600 n.s. 14,714
Pre-tax profit from continuing operations 168,661 252,835 (84,174) (33.3%) 76,108 42,074 34,034 80.9% 323,129
Pre-tax profit from continuing operations excluding the effects of the PPA 197,453 281,572 (84,119) (29.9%) 90,239 56,128 34,111 60.8% 380,208
290. Taxes on income for the period/year from continuing operations (103,086) (76,254) 26,832 35.2% (46,507) 19,727 (66,234) n.s. (121,238)
of which: effects of the purchase price allocation 9,514 9,496 18 0.2% 4,669 4,643 26 0.6% 18,862
310. Post-tax profit (loss) from discontinued operations - 13 (13) (100.0%) - - - - -
330. Profit for the period/year attributable to non-controlling interests (12,642) (14,411) (1,769) (12.3%) (3,126) (7,137) (4,011) (56.2%) (17,310)
of which: effects of the purchase price allocation 1,796 1,744 52 3.0% 856 862 (6) (0.7%) 3,580
Profit for the year/period attributable to the shareholders of the Parent before expenses for leaving incentives
excluding the effects of the PPA 70,415 179,680 (109,265) (60.8%) 35,081 63,213 (28,132) (44.5%) 219,218
Profit for the year/period attributable to the shareholders of the Parent before expenses for leaving
incentives 52,933 162,183 (109,250) (67.4%) 26,475 54,664 (28,189) (51.6%) 184,581
180.a Expenses for the leaving incentives programme net of taxes and non-controlling interests - (2,640) (2,640) (100.0%) - (499) (499) (100.0%) (101,873)
340. Profit (loss) for the year/period attributable to the shareholders of the Parent 52,933 159,543 (106,610) (66.8%) 26,475 54,165 (27,690) (51.1%) 82,708
Total impact of the purchase price allocation on the income statement (17,482) (17,497) (15) (0.1%) (8,606) (8,549) 57 0.7% (34,637)
Figures in thousands of euro
34
Reclassified consolidated quarterly income statements
2nd
Quarter
1st
Quarter
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
10.-20. Net interest income 428,222 417,220 417,494 466,438 486,311 493,318
of which: effects of the purchase price allocation (9,033) (9,563) (8,966) (9,341) (9,051) (9,622)
Net interest income excluding the effects of the PPA 437,255 426,783 426,460 475,779 495,362 502,940
70. Dividends and similar income 7,763 455 1,929 980 12,384 298
Profits of equity-accounted investees 22,213 8,506 10,683 7,984 14,924 10,835
40.-50. Net fee and commission income 297,459 304,786 310,677 285,544 286,672 299,383
of which performance fees - - 19,741 - - -
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 67,351 42,016 109,016 42,898 11,397 93,967
220. Other net operating income/expense 29,428 26,799 41,047 37,056 49,045 36,031
Operating income 852,436 799,782 890,846 840,900 860,733 933,832
Operating income excluding the effects of the PPA 861,469 809,345 899,812 850,241 869,784 943,454
180.a Staff costs (314,881) (331,353) (336,348) (348,572) (327,564) (361,235)
180.b Other administrative expenses (173,557) (161,693) (188,130) (161,445) (176,476) (175,746)
200.+210.
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets (45,114) (45,275) (49,605) (45,770) (47,020) (48,749)
of which: effects of the purchase price allocation (5,098) (5,098) (5,015) (5,020) (5,003) (5,061) Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets excluding
the effects of the PPA (40,016) (40,177) (44,590) (40,750) (42,017) (43,688)
Operating expenses (533,552) (538,321) (574,083) (555,787) (551,060) (585,730)
Operating expenses excluding the effects of the PPA (528,454) (533,223) (569,068) (550,767) (546,057) (580,669)
Net operating income 318,884 261,461 316,763 285,113 309,673 348,102
Net operating income excluding the effects of the PPA 333,015 276,122 330,744 299,474 323,727 362,785
130.a Net impairment losses on loans (226,150) (157,742) (352,535) (160,328) (203,181) (131,170)
130. b+c+d Net impairment losses on other financial assets and liabilities (8,960) (8,313) (4,078) (992) (47,663) (2,077)
190. Net provisions for risks and charges (9,275) (2,329) (28,367) 34 (16,764) (4,115)
240.+270. Profits from the disposal of equity investments 1,609 (524) 6,091 8,593 9 21
Pre-tax profit (loss) from continuing operations 76,108 92,553 (62,126) 132,420 42,074 210,761
Pre-tax profit (loss) from continuing operations excluding
the effects of the PPA 90,239 107,214 (48,145) 146,781 56,128 225,444
290. Taxes on income for the period from continuing operations (46,507) (56,579) 17,570 (62,554) 19,727 (95,981)
of which: effects of the purchase price allocation 4,669 4,845 4,620 4,746 4,643 4,853
310. Post-tax profit (loss) from discontinued operations - - - (13) - 13
330. Profit for the period attributable to non-controlling interests (3,126) (9,516) (1,547) (1,352) (7,137) (7,274)
of which: effects of the purchase price allocation 856 940 834 1,002 862 882
Profit (loss) for the period attributable to the shareholders of the
Parent before expenses for leaving incentives excluding the
effects of the PPA 35,081 35,334 (37,576) 77,114 63,213 116,467
Profit (loss) for the period attributable to the shareholders
of the Parent before expenses for leaving incentives 26,475 26,458 (46,103) 68,501 54,664 107,519
180.a
Expenses for the leaving incentives programme net of taxes and
non-controlling interests - - (93,941) (5,292) (499) (2,141)
340.
Profit (loss) for the period attributable to the shareholders
of the Parent 26,475 26,458 (140,044) 63,209 54,165 105,378
Total impact of the purchase price allocation on the income
statement (8,606) (8,876) (8,527) (8,613) (8,549) (8,948)
Figures in thousands of euro
2013 2012
35
Figures in thousands of euro
Net interest income (including the effects of the PPA) 845,442 979,629 (134,187) (13.7%)
Dividends and similar income 8,218 12,682 (4,464) (35.2%)
Profits of equity-accounted investees 30,719 25,759 4,960 19.3%
Net fee and commission income 602,245 586,055 16,190 2.8%
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value 95,868 84,693 11,175 13.2%
Other net operating income/expense 56,227 85,076 (28,849) (33.9%)
Operating income (including the effects of PPA) 1,638,719 1,773,894 (135,175) (7.6%)
Staff costs (646,234) (688,799) (42,565) (6.2%)
Other administrative expenses (335,250) (352,222) (16,972) (4.8%)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (including the effects of PPA) (90,389) (95,769) (5,380) (5.6%)
Operating expenses (including the effects of PPA) (1,071,873) (1,136,790) (64,917) (5.7%)
Net operating income (including the effects of PPA) 566,846 637,104 (70,258) (11.0%)
Net impairment losses on loans (383,892) (334,351) 49,541 14.8%
Net impairment losses on other financial assets and liabilities 729 (2,690) 3,419 n.s.
Net provisions for risks and charges (9,986) (20,879) (10,893) (52.2%)
Profits from the disposal of equity investments 1,085 30 1,055 n.s.
Pre-tax profit from continuing operations (including the effects of PPA) 174,782 279,214 (104,432) (37.4%)
Taxes on income for the period from continuing operations (109,457) (147,421) (37,964) (25.8%)
Post-tax profit from discontinued operations - 13 (13) (100.0%)
Profit for the period attributable to non-controlling interests (13,087) (11,269) 1,818 16.1%
Profit for the period attributable to the shareholders of the Parent 52,238 120,537 (68,299) (56.7%)
Reclassified consolidated income statement net of the most
significant non-recurring items
Changes%
changes
1H 2013
net of non-
recurring items
1H 2012
net of non-
recurring items
36
Reclassified consolidated income statement net of the most significant non-recurring: details
Figures in thousands of euro
Net interest income (including the effects of the PPA) 845,442 845,442 979,629 979,629
Dividends and similar income 8,218 8,218 12,682 12,682
Profits of equity-accounted investees 30,719 30,719 25,759 25,759
Net fee and commission income 602,245 602,245 586,055 586,055
Net income from trading, hedging and disposal/repurchase activities and
from assets/liabilities designated at fair value 109,367 (11,974) (1,525) 95,868 105,364 (20,671) 84,693
Other net operating income/expense 56,227 56,227 85,076 85,076
Operating income (including the effects of PPA) 1,652,218 (11,974) (1,525) - - 1,638,719 1,794,565 (20,671) - - - - - 1,773,894
Staff costs (646,234) (646,234) (688,799) (688,799)
Other administrative expenses (335,250) (335,250) (352,222) (352,222)
Depreciation, amortisation and net impairment losses on property, plant and
equipment and intangible assets (including the effects of PPA) (90,389) (90,389) (95,769) (95,769)
Operating expenses (including the effects of PPA) (1,071,873) - - - - (1,071,873) (1,136,790) - - - - - - (1,136,790)
Net operating income (including the effects of PPA) 580,345 (11,974) (1,525) - - 566,846 657,775 (20,671) - - - - - 637,104
Net impairment losses on loans (383,892) (383,892) (334,351) (334,351)
Net impairment losses on other financial assets and liabilities (17,273) 17,860 142 729 (49,740) 47,050 (2,690)
Net provisions for risks and charges (11,604) 1,618 (9,986) (20,879) (20,879)
Profits from the disposal of equity investments 1,085 1,085 30 30
Pre-tax profit from continuing operations (including the effects of PPA) 168,661 (11,974) (1,525) 17,860 1,760 174,782 252,835 (20,671) 47,050 - - - - 279,214
Taxes on income for the period from continuing operations (103,086) (1,746) 102 (4,727) (109,457) (76,254) 5,684 (3,161) (24,992) (8,298) (40,400) (147,421)
Post-tax profit from discontinued operations - - 13 13
Profit for the period attributable to non-controlling interests (12,642) (445) (13,087) (14,411) 3,142 (11,269)
Profit for the period attributable to the shareholders of the Parent
before expenses for leaving incentives 52,933 (13,720) (1,423) 13,133 1,315 52,238 162,183 (14,987) 43,889 - (24,992) (8,298) (37,258) 120,537
Expenses for leaving incentives net of taxes and non-controlling interests - - (2,640) 2,640 -
Profit for the period attributable to the shareholders of the Parent 52,933 (13,720) (1,423) 13,133 1,315 52,238 159,543 (14,987) 43,889 2,640 (24,992) (8,298) (37,258) 120,537
Annualised ROE 1.1% 1.1% 3.5% 2.6%
Cost:income ratio (including the effects of PPA) 64.9% 65.4% 63.3% 64.1%
Cost:income ratio (excluding the effects of PPA) 63.5% 64.1% 62.1% 62.9%
1H 2013
Disposal of
Intesa
Sanpaolo and
A2A shares
(AFS)
Cerved Group
earn out
Net
impairment
losses on
financial
assets (AFS)
Replenishment of
G.E.C. Spa loss
and total write-off
of the investment
non-recurring items
1H 2013
net of non-
recurring items
1H 20121H 2012
net of non-
recurring items
Gain on public
tender offer to
purchase
preference
shares
Leaving
incentives
(purs. to Law
No. 214 of
22nd
December
2011)
Tax realignment
pursuant to Law
No. 111/2011 and
Law No.
214/2011 of BPA
goodwill
recognised in the
consolidated
financial
statements
Impairment
losses on
equity
instruments
and OICR
(collective
investment
instruments)
units (AFS)
Tax relief on non-
accounting
deductions on loan
provisions and
write-downs of UBI
Banca purs. to Law
No. 244/2007
(Section EC)
Prior year tax
credit for
deduction for
corporate
income tax
purposes of
regional
production tax
on the cost of
labour purs. to
Law No.
214/2011
non-recurring items
37
Reconciliation schedule for the period ended 30th June 2013
RECLASSIFIED INCOME STATEMENT 1H 2013 1H 2013
Figures in thousands of euro
Mandatory
consolidated
financial
statements
Tax
recoveries
Profit of equity-
accounted
investees
Depreciation
for
improvements
to leased
assets
Consolidation
reclassification
Reclassified
consolidated
financial
statements
10.-20. Net interest income 845,378 64 845,442
70. Dividends and similar income 8,218 8,218
Profits of equity-accounted investees - 30,719 30,719
40.-50. Net fee and commission income 602,245 602,245
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value 109,367 109,367
220. Other net operating income/expense 130,077 (76,012) 2,226 (64) 56,227
Operating income 1,695,285 (76,012) 30,719 2,226 - 1,652,218
180.a Staff costs (646,234) (646,234)
180.b Other administrative expenses (411,262) 76,012 (335,250)
200.+210.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (88,163) (2,226) (90,389)
Operating expenses (1,145,659) 76,012 - (2,226) - (1,071,873)
Net operating income 549,626 - 30,719 - - 580,345
130.a Net impairment losses on loans (383,892) (383,892)
130. b+c+d Net impairment losses on other financial assets and liabilities (17,273) (17,273)
190. Net provisions for risks and charges (11,604) (11,604)
240.+270. Profits from the disposal of equity investments 31,804 (30,719) 1,085
Pre-tax profit from continuing operations 168,661 - - - - 168,661
290. Taxes on income for the period from continuing operations (103,086) (103,086)
310. Post-tax profit (loss) from discontinued operations - -
330. Profit for the period attributable to non-controlling interests (12,642) (12,642)
340.
Profit for the period attributable to the shareholders of the
Parent 52,933 - - - - 52,933
Ite ms
Reclassifications
Reconciliation schedule for the period ended 30th June 2012
RECLASSIFIED INCOME STATEMENT 1H 2012 1H 2012
Figures in thousands of euro
Mandatory
consolidated
financial
statements
Tax
recoveries
Profit of equity-
accounted
investees
Depreciation
for
improvements
to leased
assets
Overdrawn
penalty
Expenses for
leaving
incentives
Reclassified
consolidated
financial
statements
10.-20. Net interest income 1,025,924 (46,295) 979,629
70. Dividends and similar income 12,682 12,682
Profits of equity-accounted investees - 25,759 25,759
40.-50. Net fee and commission income 585,685 370 586,055
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value 105,364 105,364
220. Other net operating income/expense 120,231 (84,344) 3,264 45,925 85,076
Operating income 1,849,886 (84,344) 25,759 3,264 - - 1,794,565
180.a Staff costs (692,780) 3,981 (688,799)
180.b Other administrative expenses (436,566) 84,344 (352,222)
200.+210.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (92,505) (3,264) (95,769)
Operating expenses (1,221,851) 84,344 - (3,264) - 3,981 (1,136,790)
Net operating income 628,035 - 25,759 - - 3,981 657,775
130.a Net impairment losses on loans (334,351) (334,351)
130. b+c+d Net impairment losses on other financial assets and liabilities (49,740) (49,740)
190. Net provisions for risks and charges (20,879) (20,879)
240.+270. Profits from the disposal of equity investments 25,789 (25,759) 30
Pre-tax profit from continuing operations 248,854 - - - - 3,981 252,835
290. Taxes on income for the period from continuing operations (75,159) (1,095) (76,254)
310. Post-tax profit from discontinued operations 13 13
330. Profit for the period attributable to non-controlling interests (14,165) (246) (14,411)
Profit for the period attributable to the shareholders of the Parent
before expenses for leaving incentives 159,543 2,640 162,183
180.a
Expenses for leaving incentives net of taxes and non-controlling
interests - (2,640) (2,640)
340. Profit for the period attributable to the shareholders of the Parent 159,543 - - - - - 159,543
Ite ms
Reclassifications
38
Reconciliation schedule for the year ended 31st December 2012
RECLASSIFIED INCOME STATEMENT FY 2012 FY 2012
Figures in thousands of euro
Mandatory
consolidated
financial
statements
Tax
recoveries
Profit of equity-
accounted
investees
Depreciation
for
improvements
to leased
assets
Fast Credit
Processing
fee/ Overdrawn
penalty
Expenses for
leaving
incentives
Reclassified
consolidated
financial
statements
10.-20. Net interest income 1,931,684 (68,123) 1,863,561
70. Dividends and similar income 15,591 15,591
Profits of equity-accounted investees - 44,426 44,426
40.-50. Net fee and commission income 1,181,806 470 1,182,276
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 257,278 257,278
220. Other net operating income/expense 244,515 (156,473) 7,484 67,653 163,179
Operating income 3,630,874 (156,473) 44,426 7,484 - - 3,526,311
180.a Staff costs (1,525,753) 152,034 (1,373,719)
180.b Other administrative expenses (858,270) 156,473 (701,797)
200.+210.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (183,660) (7,484) (191,144)
Operating expenses (2,567,683) 156,473 - (7,484) - 152,034 (2,266,660)
Net operating income 1,063,191 - 44,426 - - 152,034 1,259,651
130.a Net impairment losses on loans (847,214) (847,214)
130. b+c+d Net impairment losses on other financial assets and liabilities (54,810) (54,810)
190. Net provisions for risks and charges (49,212) (49,212)
240.+270. Profits from the disposal of equity investments 59,140 (44,426) 14,714
Pre-tax profit from continuing operations 171,095 - - - - 152,034 323,129
290. Taxes on income for the year from continuing operations (79,429) (41,809) (121,238)
310. Post-tax profit (loss) from discontinued operations - -
330. Profit for the year attributable to non-controlling interests (8,958) (8,352) (17,310)
Profit for the year attributable to the shareholders of the
Parent before expenses for leaving incentives 82,708 101,873 184,581
180.a
Expenses for the leaving incentives programme net of taxes and
non-controlling interests - (101,873) (101,873)
340.
Profit for the year attributable to the shareholders of the
Parent 82,708 - - - - - 82,708
Ite ms
Reclassifications
39
Notes to the reclassified consolidated financial statements
The mandatory financial statements have been prepared on the basis of Bank of Italy Circular No. 262 of 22nd December 2005 and subsequent updates. The following rules are applied to the reclassified financial statements to allow a vision that is more consistent with a
management accounting style:
the tax recoveries recognised within item 220 of the mandatory financial statements (other net operating income/expenses) were reclassified as a reduction in indirect taxes included within other administrative expenses;
the item profits (losses) of equity-accounted investees includes the profits (losses) of equity-accounted investees included within item 240 in the mandatory financial statements;
the item other net operating income/expense includes item 220, net of the reclassifications mentioned above;
the item net impairment losses on property, plant and equipment and intangible assets includes items 200 and 210 (the latter only partially) in the mandatory financial statements and also the instalments relating to the depreciation of leasehold improvements
classified within item 220;
the item profits (losses) from the disposal of equity investments includes the item 240, net of profits (losses) of equity-accounted investees and also item 270 in the mandatory financial statements;
leaving incentives expenses (net of taxation and non-controlling interests) partially include item 180a in the mandatory financial statements.
The reconciliation of the items in the reclassified financial statements with the figures in the mandatory financial statements has been facilitated, on the one hand, with the insertion in the margin against each item of the corresponding number of the item in the mandatory financial statements with which it is reconciled and, on the other hand, with the preparation of specific reconciliation schedules.
The comments on the performance of the main balance sheet and income statement items are made on the basis of the reclassified financial statements and of the reclassified financial statements for the comparative periods, and the tables providing details included in the subsequent sections of this financial report have also been prepared on that
same basis. As already reported, the regulatory provisions published by the CICR (interministerial committee for credit and saving) on 4th July 2012 (pursuant to article 117-bis of the consolidated banking act) required a revision of the commission
regime applied to customers who are past due, with the application of a commission, proportionate to the actual cost incurred by the Bank to manage past due positions, with a fixed amount, entitled a “fast credit processing fee” (FCPF), which is different for consumer and non-consumer customers. The new regime came into force with effect from 1st
July 2012 for new customers and from 1st October 2012 for customers already existing as at 30th June 2012. In consideration of the nature of the FCPF (related to neither the amount past due, nor the time past due and basically the same as a recovery of expenses), the relative income from the fee is recognised within item 220 “Other net operating income/expense” (within the line item “other income and prior year income”). As already reported in the
2012 Annual Report, in order to ensure consistent reporting, a reclassification was performed in the income statement with the transfer of amounts relating (mainly) to the previous past due penalty out of net interest income and into other operating income. It follows that the comparative figures presented (in the tables relating to net interest income and operating income and also in the normalised reclassified income statement and in the quarterly income
statements) are different from those originally published in the 2012 Interim Report (quantitative details of the reclassification have been given explicitly in the reconciliation schedules). In order to facilitate analysis of the Group’s operating performance and in compliance with Consob Communication
No. DEM/6064293 of 28th July 2006, two special schedules have been included, the first a brief summary (which provides a comparison of the normalised results for the period) and the second more detailed, which shows the impact on earnings of the principal non-recurring events and items – since the relative effects on capital and cash flow, being closely linked, are not significant – which are summarised as follows:
First half 2013:
- partial disposal of Intesa Sanpaolo shares and full disposal of A2A shares;
- adjustment in the price for the disposal in 2008 of the interest held in Centrale Bilanci (now the Cerved Group) (AFS);
- impairment losses on financial instruments held in the AFS portfolio;
- replenishment of the losses of the company Esazioni Convenzionate – G.E.C. Spa (of which BRE holds 7.2% of the share capital) and full write-down of the investment;
First half 2012:
- gain on the public tender offer to purchase outstanding Group preference shares;
- impairment losses on shares and on some units in OICRs (collective investment instruments);
- leaving incentives (pursuant to Law No. 214 of 22nd December 2011);
- tax realignment of BPA goodwill recognised in the consolidated financial statements, pursuant to Law No. 111/2011 and Law No. 214/2011;
- tax relief on non-accounting deductions on loan provisions and write-downs of UBI Banca pursuant to Law No. 244/2007 (Section EC);
- prior year tax credit for deduction for corprate income tax purposes of regional production tax on the cost of labour pursuant to Law No. 214/2011.
40
The consolidated income statement
The income statement figures commented on are based on the reclassified consolidated financial
statements (the income statement, the quarterly income statements and the income statement net of the more significant principal non-recurring items – in brief and detailed versions) contained in another section of this report and the tables furnishing details presented below are also based on those statements. The notes that follow those reclassified financial statements may be consulted as may the reconciliation schedules for a description of the reclassification. Furthermore, the commentary examines both changes that occurred in both the first half of 2013 compared to the same period in 2012 and also those occurring in the second quarter of 2013 compared to the first three months of the year (in the latter case the comments are highlighted with a slightly different background colour).
The generally weak trends for loans to households and businesses, although more critical for
small to medium-sized firms, is continuing to reflect the continuation of the recession and the consequent deterioration in credit risk, aspects which in the first part of the year were offset
by the favourable impacts of cuts in official interest rates and the relaxation, although partial,
of pressures on the sovereign debt market. In this context, in which conventional banking
business was penalised yet again, the UBI Banca Group ended the first half with a profit of
€52.9 million1 compared to €159.5 million earned in the first half of 2012.
On a quarterly basis, consolidated profit was €26.5 million a replica of the result achieved in
the first three months of 2013, although the composition of revenues was partially different,
while in the second quarter of 2012 the income statement recorded profit for the period of
€54.2 million, the result, amongst other things, of the recognition of the benefits of some tax
measures.
In the first half of 2013 ordinary operations gave rise to operating income of €1,652.2 million,
a decrease of €142.3 million compared to the first six months of 2012, due primarily to the
performance of net interest income.
Net interest income2, inclusive of the expenses of €18.6 million relating to the PPA, decreased
to €845.4 million (-€134.2 million compared to first half of 2012), a reflection above all of a fall
in interest rates3 and also of the difficult economic environment. In detail4:
• business with customers generated interest income of €679.9 million (-€135.7 million),
impacted by interest rates for funding (mainly short-term), but above all by the effect of
volumes of lending business (the spread narrowed by 16 basis points over twelve months). The latter appears to be increasingly penalised by the difficult economic situation,
aggravated in recent months by uncertainties over the political and institutional framework.
The item also benefited from the differentials earned mainly on bond hedges in a context of
falling interest rates (€98.8 million);
• the securities portfolio generated net interest income of €209.8 million, (-€3.4 million), while investments in debt instruments increased slightly over twelve months (+€0.6 billion).
Italian government securities nevertheless continued to make a substantial contribution to
net interest income (€213.4 million of interest income from AFS securities and €54.3
1 Net of non-recurring items (considered net of taxes and non-controlling interests) normalised profit for the period amounted to €52.2
million compared to €120.5 million previously. In the first quarter of 2013 these items consisted of income of €0.7 million (due
mainly to disposals of equity instruments, although partially offset by impairment losses on available for sale securities) and they also consisted of income in the first six months of 2012, but which amounted to €39 million (following the gain on the public tender offer to purchase preference shares and the benefits resulting from some tax measures, although impairment losses were recognised
on some financial assets and redundancy leaving incentives cost were incurred). Both first half periods include costs resulting from the purchase price allocation amounting to €17.5 million.
2 Following the introduction of the fast credit processing fee on 31st December 2012, a reclassification was performed in the income statement. Sums relating (mainly) to the previous past due penalty were reclassified out of net interest income and recognised within
other operating income. The comparative figures shown in the tables relating to net interest income and to other operating income are therefore different to those already published. See the “notes on the reclassified financial statements” for further information.
3 The average one month Euribor rate did in fact fall in the two periods from 0.536% in 2012 to 0.119% in the current year. 4 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 (with customers, financial, with banks). Balances relating to 2012 for business with customers and banks have been partially adjusted with respect to those published
previously (+/-€6.5 million respectively), following a more accurate accounting treatment for an institutional counterparty.
41
million from the HTM portfolio), although this income was offset overall by the costs of
uncovered short positions and hedges on fixed income bonds (the differentials paid on the derivatives);
• activity on the interbank market resulted in net interest expense of €44.4 million (net
expense of €49.4 million in the same period of 2012), attributable mainly to the cost of debt
with the central bank for the LTRO finance granted on 21st December 2011 and 29th
February 2012 (€40.8 million, compared to €50.5 million in the first half of 20125). Net of that component, the balance on business with other banks was -€3.6 million in 2013 and
+€1.1 million in 2012.
Interest and similar income: composition
Figures in thousands of euro
Debt
instrumentsFinancing
Other
transactions1H 2013 1H 2012
1. Financial assets held for trading 29,707 - 29,707 23,824
2. Financial assets designated at fair value - - - - -
3. Available-for-sale financial assets 213,400 - - 213,400 223,433
3. Held-to-maturity investments 54,258 - - 54,258 40,375
5. Loans and advances to banks 1,222 3,670 4,892 20,430
6. Loans and advances to customers 60 1,306,744 680 1,307,484 1,726,207
7. Hedging derivatives - - 35,270 35,270 -
8. Other assets - - 315 315 450
Total 298,647 1,310,414 36,265 1,645,326 2,034,719
Interest and similar expense: composition
Figures in thousands of euro
Borrowings SecuritiesOther
transactions1H 2013 1H 2012
1. Due to central banks (40,833) - - (40,833) (50,500)
2. Due to banks (8,198) - (306) (8,504) (19,304)
3. Due to customers (202,119) - (202,119) (246,956)
4. Debt securities issued - (524,250) - (524,250) (671,172)
5. Financial liabilities held for trading (23,979) - - (23,979) (15,096)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions - - (199) (199) (381)
8. Hedging derivatives - - - (51,681)
Total (275,129) (524,250) (505) (799,884) (1,055,090)
Net interest income 845,442 979,629
Dividends of €8.2 million were received in the first half almost entirely on the available-for-sale
securities portfolios held by UBI Banca, of which €4 million on Intesa Sanpaolo shares,
following the partial sales made in the fourth quarter of 2012 and in the first months of the
current year.
In 2012, however, the item had recorded income of €12.7 million, of which €9.3 million from
Intesa Sanpaolo. Profits (losses) of equity accounted investees6 rose from €25.8 million to €30.7 million, the
largest sums being generated by the following: Aviva Vita (€12.2 million, compared to €10.8
million in 2012), Lombarda Vita (€8.8 million, compared to €7.3 million before), Aviva
Assicurazioni Vita (€5.5 million, compared to €2.2 million) and UBI Assicurazioni (€3.8
million, compared to €5.8 million in 2012). Net fee and commission income improved to €602.2 million (up by €16.2 million compared to
2012), due to good performance by investment services business (+€29.2 million), which more
than offset the decrease recorded by general banking services (-€13 million):
5 It should be considered that the finance was granted at an interest rate of 1% (the rate for principal refinancing operations), which
was cut firstly on 5th July 2012 to 0.75% and subsequently, on 2nd May 2013, to 0.50%.
6 The item consists of the profits of the companies recognised on the basis of the percentage interest held by the Group.
42
• Management, trading and advisory services contributed €297.7 million7 to the result, driven
by the placement of securities (+€19.3 million) and in particular by the new Sicav’s (UBI High Yield Bond, Global Dynamic Allocation – Class B and Protezione Mercati Emergenti), by
the distribution of third party services, which included insurance products (+€6.5 million),
by portfolio managements (+€2.4 million) and also by stock market orders and advisory
services (+€2 million) and the custody of securities (+€1.2 million), while weak performance
continued to be recorded by trading in financial instruments (-€2 million). Fee and commission expense on sales of financial instruments, products and services through
indirect networks amounted to €21.9 million (€20.5 million in the comparative period);
• ordinary banking business8 generated €304.5 million, although penalised by the economic
environment which practically dampened all components of this income: current account
administration (-€5.1 million), foreign exchange trading (-€1.2 million), factoring (-€0.8 million), collection and payment services (-€1.3 million). However, other services (which
includes commitment fees) recorded no significant changes (-€0.4 million). As already
reported, the item “guarantees” (-€4.1 million) includes the cost (€23.1 million, compared to
€19.3 million in 2012) of the issue of a guarantee given by the Italian government on bonds
issued on 2nd January and 27th February 2012 by UBI Banca amounting to €6 billion nominal, designed to increase assets eligible for refinancing with the ECB. The expense
consists of an annual percentage of the nominal amount of the bonds issued. Because these
were issued by the Parent, subscribed by the former Centrobanca and then repurchased entirely by UBI Banca, on the basis of IFRS international accounting standards, these liabilities are not recognised in the accounts, nor is the interest income and expense attributable to them. They are nevertheless included within the assets eligible for refinancing that form part of the collateral pool available to the European Central Bank.
Fee and commission income: composition Fee and commission expense: composition
Figures in thousands of euro1H 2013 1H 2012
Figures in thousands of euro1H 2013 1H 2012
a) guarantees granted 26,180 26,002 a) guarantees received (24,019) (19,703)
c) management, trading and advisory services 340,500 310,869 c) management and trading services: (39,897) (38,249)
1. trading in financial instruments 12,383 15,534 1. trading in financial instruments (6,454) (7,560)
2. foreign exchange trading 2,916 4,144 2. foreign exchange trading (4) (4)
3. portfolio management 121,271 116,892 3. portfolio management (5,882) (3,871)
3.1. individual 34,154 33,409 3.1. own - -
3.2. collective 87,117 83,483 3.2. on behalf of third parties (5,882) (3,871)
4. custody and administration of securities 5,867 5,296 4. custody and administration of securities (3,310) (3,905)
5. depository banking - - 5. placement of financial instruments (2,331) (2,436)
6. placement of securities 94,244 75,041
7. receipt and transmission of orders 25,351 24,915 (21,916) (20,473)
8. advisory activities 3,183 1,654 d) collection and payment services (19,320) (20,117)
8.1 on investments 3,183 1,654 e) other services (14,987) (12,593)
8.2 on financial structure - -
9. distribution of third party services 75,285 67,393 Total (98,223) (90,662)
9.1. portfolio management 18 21
9.1.1. individual 18 21
9.2. insurance products 58,442 51,909
9.3. other products 16,825 15,463
d) collection and payment services 72,725 74,840
f) services for factoring transactions 12,369 13,199
i) current account administration 98,895 103,989
j) other services 149,799 147,818
Total 700,468 676,717 Net fee and commission income 602,245 586,055
6. financial instruments, products and
services distributed through indirect networks
As result of the stability on financial markets, however temporary its return may be and
despite the uncertainty surrounding the political and institutional framework, financial
activities replicated and improved on the 2012 result, up from €105.4 million to €109.4
million. In detail:
7 The amount consists of management, trading and advisory services net of the corresponding expense items and is calculated excluding
currency trading.
8 All the changes were calculated by subtracting commission expense from the respective commission income.
43
Net trading income
GainsProfits from
tradingLosses
Losses from
trading
Net income
1H 2013
Figures in thousands of euro (A) (B) (C) (D) [(A+B)-(C+D)]
1. Financial assets held for trading 50,918 133,371 (7,509) (33,847) 142,933 38,416
1.1 Debt instruments 6,408 22,672 (6,626) (4,105) 18,349 27,926
1.2 Equity instruments 359 1,240 (28) (69) 1,502 (954)
1.3 Units in O.I.C.R. (collective investment instruments) 34 - (29) (45) (40) (209)
1.4 Financing - - - - - -
1.5 Other 44,117 109,459 (826) (29,628) 123,122 11,653
2. Financial liabilities held for trading 9,146 0 0 (3) 9,143 4,736
2.1 Debt instruments 9,146 - - 9,146 4,735
2.2 Payables - - - - - (3)
2.3 Other - - (3) (3) 4
3. Financial assets and liabilities: exchange rate differences X X X X 4,143 5,652
4. Derivative instruments 365,377 455,918 (355,613) (454,769) (103,715) (27,654)
4.1 Financial derivatives 365,377 455,918 (355,613) (454,769) (103,715) (27,654)
- on debt instruments and interest rates 361,164 450,907 (351,516) (449,992) 10,563 (21,702)
- on equity instruments and share indices 281 1,603 (211) (1,541) 132 1,298
- on currencies and gold X X X X (114,628) (8,088)
- other 3,932 3,408 (3,886) (3,236) 218 838
4.2 Credit derivatives - - - - - -
Total 425,441 589,289 (363,122) (488,619) 52,504 21,150
Net hedging income (loss)
Figures in thousands of euro 1H 2013 1H 2012
Net hedging income (loss) (4,634) 12,011
Profit from disposal or repurchase
Figures in thousands of euro
Financial assets
1. Loans and advances to banks - - - 2,251
2. Loans and advances to customers 406 (730) (324) (418)
3. Available-for-sale financial assets 67,656 (4,565) 63,091 51,477
3.1 Debt instruments 52,457 (4,523) 47,934 49,416
3.2 Equity instruments 15,199 (42) 15,157 1,562
3.3 Units in O.I.C.R (collective investment instruments). - - - 499
3.4 Financing - - - -
4. Held-to-maturity investments - - - -
Total assets 68,062 (5,295) 62,767 53,310
Financial liabilities
1. Due to banks - - - -
2. Due to customers - - - -
3. Debt securities issued 3,353 (6,205) (2,852) 21,408
Total liabilities 3,353 (6,205) (2,852) 21,408
Total 71,415 (11,500) 59,915 74,718
Net profit (loss) on financial assets and liabilities designated at fair value
Figures in thousands of euro 1H 2013 1H 2012
Net profit (loss) on financial assets and liabilities designated at fair value 1,582 (2,515)
109,367 105,364
Profits LossesNet income
1H 20131H 2012
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value
1H 2012
• trading contributed €52.5 million (€21.2 million9 in the comparative period) as follows:
€27.5 million from debt instruments10 (of which €14.2 million of profit-taking from closing
uncovered short positions and €9.1 million of gains on existing uncovered short positions);
€10.6 million from derivatives on debt instruments and interest rates (of which +€5.3
9 Net of unwinding of derivative positions on assets and liabilities (-€30.4 million in the first half of 2012) this activity made the
following contribution: +€41.4 million from debt instruments and derivatives on debt instruments and interest rates, +€0.3 million from equity instruments and the relative derivatives and +€9.2 million from foreign exchange business.
10 In view of UBI Banca’s current operations on financial markets, an aggregate reading of the results for debt instruments and the relative derivatives is no longer appropriate. The commentary therefore gives a separate analysis, while the comparative figures
remain valid as they clearly reflect the position previously under examination.
44
million from the unwinding and voluntary closure of hedges); €1.6 million from equity
instruments and the relative derivatives and €12.6 million from currency activities;
• changes in fair value – in relation to investments in Tages funds and to a residual position
in hedge fund and private equity shareholdings formally held by the former Centrobanca –
generated a profit of €1.6 million (-€2.5 million in 2012);
• the result for hedging, consisting of the change in the fair value of hedging derivatives and the relative items hedged, was a loss of €4.6 million to be interpreted in combination with
unwinding phenomena (+€12 million in 2012, mainly in relation to derivatives on
mortgages, due to the accounting impacts of the unwinding);
• the disposal of AFS instruments and the repurchase of financial liabilities generated profits
of €59.9 million, as follows:
▪ +€47.9 million from debt instruments, of which +€49.7 million from government
securities and -€1.8 million from the sale of other bonds mainly issued by banks, all
relating to UBI Banca;
▪ +15.2 million from equity instruments consisting of: a gain of €11.4 million on Intesa Sanpaolo shares, €0.6 million on A2A shares and an addition of €1.5 million to the price
for the disposal of Centrale Bilanci – now the Cerved Group – performed in 2008
(amounts all subject to normalisation) and also €1.6 million resulting from the total
disposal of the investment in Unione Fiduciaria;
▪ -€2.9 million from the repurchase of securities issued as part of ordinary business;
▪ -€0.3 million from the disposal of unsecured non-performing loans by the network
banks, of which -€0.5 million by BPB relating to a single non-performing position subject
to bankruptcy proceedings for a substantial amount fully written down;
Profits of €74.7 million were realised in the comparative period, of which €53.3 million from the disposal of financial assets. They were composed of the following: €49.4 million mainly from the sale of €1.2 billion of Italian
government securities; €2.3 million from the disposal of a bank deposit certificate; €1.6 million from the sale of Società per i Mercati di Varese e di Risparmio e Previdenza; €21.4 million from the repurchase of financial liabilities, which included €20.7 million non-recurring from the gain on the public tender offer to purchase
preference shares; €8.7 million relating to the buy-back of issues under the EMTN programme performed by the Parent and -€8 million in relation to ordinary business with customers as counterparties (mainly by the network banks).
Other net operating income/expense fell to €56.2
million (€85.1 million in 2012), as
a reflection of a parallel reduction, although to differing degrees, in
expenses and income (especially in
the item other income/expenses
and prior year items).
The changes were affected
primarily by the absence of all business from the former B@nca
24-7 and on the other hand by the
trend for the fast credit processing
fee.
As already reported, the fast credit processing fee replaced the
previous overdraft penalty from 1st
October 2012 and has been
reclassified out of net interest income into other operating income and prior year income for
reporting consistency. A comparison between the two periods shows a decrease (€12.4
million), explained by a reduction in the number of accounts overdrawn (the result of monitoring action) and by the method used to calculate the new commission, based on a fixed
price, compared to the overdraft penalty, which was commensurate to the amount and
duration of the overdraft. It must be considered that because the underlying items of prior year income and expense items are of a varied and non-structural nature, they often fluctuate greatly from one period to another.
From a quarterly viewpoint, operating income (€852.4 million) compares with €860.7 million
recognised in the same period of 2012, but with €799.8 million earned in the first quarter of
Other net operating income
Figures in thousands of euro1H 2013 1H 2012
Other operating income 82,404 123,926
Recovery of expenses and other income on current accounts 6,319 5,967
Recovery of insurance premiums 13,144 14,729
Recoveries of taxes 76,012 84,344
Rents and other income for property management 3,243 3,432
Recovery of expenses on finance lease contracts 5,113 6,830
Other income and prior year income 54,585 92,968
Reclassification of "tax recoveries" (76,012) (84,344)
Other operating expenses (26,177) (38,850)
Depreciation of leasehold improvements (2,226) (3,264)
Costs relating to finance lease contracts (2,453) (4,201)
Expenses for public authority treasury contracts (2,799) (3,497)
Ordinary maintenance of investment properties - -
Other expenses and prior year expense (20,925) (31,152)
Reclassification of depreciation of leasehold improvements 2,226 3,264
Other net operating income 56,227 85,076
45
2013, which had similarly benefited from favourable market conditions. This latter increase
(+€52.6 million) was a result of the following:
• net interest income rose to €428.2 million (+€11 million), the result on the one hand of an
improvement in the balance with customers (+€5.2 million, driven above all by the impact
of interest rates on short-term funding, while the spread remained stable) and on the other
by business with banks (this expense position fell from -€24.8 million to -€19.7 million,
notwithstanding the LTRO financing from the ECB), while the contribution from the
securities portfolio remained unchanged (+€700 thousand received on assets, which grew by approximately €700 million quarter-on- quarter);
• dividends increased from €0.5 million to €7.8 million and related predominantly to the UBI
Banca AFS portfolio. The item included €4 million distributed by Intesa Sanpaolo;
• profits of equity-accounted investees made significant progress, up from €8.5 million to
€22.2 million, a reflection of performance by the insurance companies (Aviva Vita and
Lombarda Vita above all);
• net fees and commissions stood at €297.5 million (compared to €304.8 million). The
decrease (-€7.3 million) was attributable almost entirely to a fall in banking services (-€6.7
million) and in particular to other services and guarantees granted, although this was
partially offset by a recovery in the items current account administration and collection and
payment services. Services connected with the securities area, however, remained largely
unchanged (-€623 thousand), affected primarily by the performance of securities placement
and of trading in financial instruments;
• the result for financial activities improved to €67.4 million from €42 million in the first
quarter of 2013 due to gains of €45.2 million on the disposal/repurchase of financial
instruments (realised mainly on Italian government securities) and to profits of €26.2
million from trading (also realised mainly on Italian bonds, on derivatives on debt
instruments and interest rates, in terms above all of differentials recognised and also on
foreign exchange business). These results are offset by losses on hedging (-€3.3 million, within which unwinding for the period of +€1.6 million must be included for a proper
interpretation) and on assets designated at fair value (-€0.7 million, relating to value
changes in the Tages funds, the remaining hedge funds and private equity shareholdings);
• other net operating income/expense rose from €26.8 million to €29.4 million, benefiting from
expense recoveries on current accounts, on finance lease contracts and on insurance
premiums, as well as from the trend for prior year income (+€1.2 million), which includes fast credit processing fees which, due to the factors reported above, were affected by a
structural decline.
Consistent with the rationalisation action
taken on Group structure and operations, operating expenses fell in the first six
months of the year to €1,071.9 million, a
reduction of €64.9 million compared to
the comparative period, a reflection of the
following:
• a reduction in staff costs down to
€646.2 million (-€42.6 million),
attributable largely – as shown in the
table – to employees (-€40.9 million),
made possible by the trade union
agreements signed on 29th November 2012 and 12th February 2013.
These changes are the result of a
decrease in staff numbers (down by
924 in terms of average numbers
calculated according to Bank of Italy criteria), lower labour costs related to
trade union agreements and use of the “Solidarity Fund”. The changes were also seen in
the trend for ordinary wages;
Staff costs: composition
Figures in thousands of euro1H 2013 1H 2012
1) Employees (637,578) (678,499)
a) Wages and salaries (447,597) (475,306)
b) Social security charges (121,624) (131,083)
c) Post-employment benefits (24,106) (24,786)
d) Pension expense (625) (602)
e) Provision for post-employment benefits (2,062) (5,405)
f) Pensions and similar obligations: (1,125) (1,541)
- defined contribution (64) (59)
- defined service (1,061) (1,482)
g) Payments to external supplementary pension plans: (20,392) (21,843)
- defined contribution (20,392) (21,843)
- defined benefits - -
h) Expenses resulting from share based payments - -
i) Other employee benefits (20,047) (17,933)
2) Other staff in service (782) (1,237)
- Expenses for agency staff on staff leasing contracts (81) (292)
- Other expenses (701) (945)
3) Directors and statutory auditors (7,874) (9,063)
4) Expenses for retired staff - -
Total (646,234) (688,799)
46
• a contraction in other administrative expenses to €335.3 million (-€17
million, of which -€4.2 million
connected with indirect taxation,
mainly as a result of the absence of
intragroup VAT on rents and
condominium expenses from 26th
June 2012). The fall in current expenditure
(-€12.8 million) involved virtually all
the items summarised in the table
below to differing degrees. We report
the following in particular: professional and advisory services
(-€5.5 million, even though the item
included €5.6 million for consulting
services for projects and other
professionals services for the use of
advanced internal models for the calculation of capital requirements),
rents payable and the tenancy and
maintenance of properties (-€3
million, related also to branch
closures which took place in 2012),
as well travel expenses (-€2.2 million), leases on hardware and
software and instalments on the
relative maintenance contracts
(-€2.1 million), outsourced services (-€1.3 million) and credit recovery expenses (-€0.7
million). The increase recorded in the item advertising (+€5.1 million) relates on the other hand to
expenses incurred for the television and radio campaign entitled “Quality at the bank”,
designed to promote the UBI Banca brand;
• a fall in depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets to €90.4 million, (-5.4 million) due to write-offs carried out
as part of BPCI and BPA branch closures carried out at the beginning of 2012, to less amortisation and depreciation of software and hardware, to less depreciation and
amortisation relating to IWBank following the transfer of its IT operations to UBI.S and to
the full depreciation of some tangible fixed assets on the core perimeter of the Group.
A quarterly comparison shows operating expenses down again (€551.1 million in second quarter of 2012 and €538.3 million in the first three months of 2013, down to the current
€533.6 million). Short-term trends are in any event normally affected by the seasonal nature of
some characteristic expense factors in the second quarter of the year.
The fall compared to the first quarter (-€4.8 million) is the aggregate result of the following:
• -€16.5 million for staff costs, as a reflection of changes in staff numbers, suspensions of
and reductions in working hours, use of which began in March, reimbursements for staff
training and the release of a provision which had been made;
• +11.9 million for other administrative expenses, of which -€0.4 million for indirect taxation
and +€12.3 million for current expenditure, due to the different timing of the invoices which
tend to be concentrated in June and December. Other items included the following: +€6
million for advertising for the television and radio campaign launched in the second quarter; +€5.5 million for advisory and other professional services, for the reasons reported
above, and for costs incurred in connection with the shareholders meeting held in April;
and also +€3.3 million for credit recovery expenses, while most of the remaining items
recorded reductions);
• -€0.2 million for amortisation, depreciation and impairment losses on property plant equipment and intangible assets.
Other administrative expenses: composition
Figures in thousands of euro1H 2013 1H 2012
A. Other administrative expenses (309,894) (322,678)
Rent payable (31,907) (34,136)
Professional and advisory services (38,509) (44,021)
Rentals hardware, software and other assets (20,135) (21,385)
Maintenance of hardware, software and other assets (18,933) (19,786)
Tenancy of premises (26,475) (27,538)
Property maintenance (11,831) (11,533)
Counting, transport and management of valuables (6,753) (7,141)
Membership fees (5,128) (4,898)
Information services and land registry searches (4,908) (5,841)
Books and periodicals (829) (1,002)
Postal (11,856) (12,471)
Insurance premiums (20,921) (22,872)
Advertising (13,300) (8,240)
Entertainment expenses (847) (888)
Telephone and data transmission expenses (27,770) (28,111)
Services in outsourcing (22,666) (24,004)
Travel expenses (9,523) (11,684)
Credit recovery expenses (21,832) (22,589)
Forms, stationery and consumables (4,380) (4,479)
Transport and removals (3,517) (3,588)
Security (4,413) (4,310)
Other expenses (3,461) (2,161)
B. Indirect taxes (25,356) (29,544)
Indirect taxes and duties (11,565) (18,352)
Stamp duty (71,126) (78,467)
Municipal property tax (former ICI) (8,611) (6,991)
Other taxes (10,066) (10,078)
Reclassification of "tax recoveries" 76,012 84,344
Total (335,250) (352,222)
47
As a summary of overall performance, net operating income came to €580.3 million,
compared to €657.8 million in 2012. On a quarterly basis, net operating income of €318.9 million increased compared to both the
first three months of 2013 (€261.5 million), and to the same quarter in 2012 (€309.7 million). Net impairment losses on loans rose in the first half of the year to €383.9 million (€334.4
million in the comparative period) and were composed of €229.3 million (€189.5 million)
relating to the network banks and €131.1 million (€142.6 million) to the product companies (including UBI Banca, in relation to its corporate banking and consumer finance activities
acquired with the merger into it of the former Centrobanca and the former B@nca 24-7).
Net impairment losses on loans: composition
Figures in thousands of euro
A. Loans and advances to banks - 217 217 - 224 224
B. Loans and advances to customers (368,346) (15,763) (384,109) (212,689) (13,685) (226,374)
C. Total (368,346) (15,546) (383,892) (212,689) (13,461) (226,150)
Figures in thousands of euro
A. Loans and advances to banks - (42) (42) 1 (29) (28)
B. Loans and advances to customers (347,783) 13,474 (334,309) (225,563) 22,410 (203,153)
C. Total (347,783) 13,432 (334,351) (225,562) 22,381 (203,181)
Impairment losses/reversals of
impairment losses, net 2nd Quarter
2012Specific Portfolio
Impairment losses/reversals of
impairment losses, net 2nd Quarter
2013Specific Portfolio
Impairment losses/reversals of
impairment losses, net1H 2012
Specific Portfolio
Impairment losses/reversals of
impairment losses, net1H 2013
Specific Portfolio
The item increased by €49.5 million compared to 2012, the aggregate result of impairment losses of €15.5 million on the performing portfolio (reversals of €13.4 million were recognised
in the first six months of 201211) and specific impairment losses up by €20.6 million12, of
which €17.7 million related to the network banks.
As concerns the product companies, an improvement was recorded in the figures for those
companies subject to closest monitoring over the last three years (the former B@nca 24-7 merged into UBI Banca, UBI Leasing and UBI Factor), for which figures show an overall
contraction of €35.2 million compared to the first half of 2012, while an increase of over €16
million was recorded by Prestitalia.
Again with regard to specific impairment losses, reversals were recognised in the first half
(excluding present value discounts) amounting to €100.2 million (€117.3 million in 2012).
Losses on loans (calculated as total net impairment losses as a percentage of net loans to
customers) increased at the same time from 0.70% in the first half of 2012 to 0.84% in 2013
(annualised), partly as a consequence of a reduction in the underlying volumes, compared to 0.91% recorded for the whole of 2012.
On a quarterly basis, net impairment losses – which in reality also include seasonal factors
typical of the two periods – increased to €226.2 million (€203.2 million in the same quarter of
2012), compared to €157.7 million in the first three months of the year.
The quarter-on-quarter change (+€68.4 million) consisted of €57 million of specific impairment losses (due to the appearance of new positions among deteriorated loans, although the pace of
increase has slowed in recent quarters), while the remaining €11.4 million was due to
impairment losses on performing loans. The latter in particular incorporated an update of the
11 The latter were almost entirely attributable to the former B@nca 24-7, in relation on the one hand to the progressive reduction in
the size of its loan portfolio and on the other primarily to the accounting changeover from prudent collective write-downs to greater specific write-downs for the salary-backed lending business contributed to Prestitalia (this changeover, carried out prudentially in
the second quarter of 2012, did not affect the company’s risk management. In fact the consumer bank’s income statement contained impairment losses on loans of €22.6 million for the first quarter and €23.3 million for the second quarter of 2012).
12 As a consequence of consolidation entries, specific impairment losses do not include a recovery of €17.3 million due to the
enforcement of a guarantee which had been issued by the Parent to the subsidiary UBI Banca International on the Pescanova position. This guarantee is recognised in the separate financial statements of UBI Banca within the item impairment losses on
other financial operations.
48
historical PD data series as part of the authorisation issued by the Bank of Italy for the rollout
of advanced internal rating approaches for SMEs also. This had a negative impact only partly offset by the refinement of the models for acquisition finance.
The loan loss rate for the quarter therefore rose to 0.99% from 0.85% in the second quarter of
2012 and from 0.68% in the first three months of the year (all the figures are annualised).
Net impairment losses/reversals of impairment losses on loans: quarterly performance
2013 (155,657) (2,085) (157,742) (212,689) (13,461) (226,150)
2012 (122,221) (8,949) (131,170) (225,562) 22,381 (203,181) (161,535) 1,207 (160,328) (373,308) 20,773 (352,535)
2011 (96,010) (9,364) (105,374) (142,877) (15,271) (158,148) (110,779) (24,364) (135,143) (195,114) (13,299) (208,413)
2010 (105,366) (26,493) (131,859) (184,080) (5,765) (189,845) (124,200) (9,811) (134,011) (217,327) (33,890) (251,217)
2009 (122,845) (36,728) (159,573) (176,919) (58,703) (235,622) (178,354) (18,995) (197,349) (281,668) 9,001 (272,667)
2008 (64,552) 4,895 (59,657) (85,136) (8,163) (93,299) (77,484) (25,384) (102,868) (219,512) (90,887) (310,399)
Portfolio3rd
Quarter
Figures in
thousands of
euro
Portfolio PortfolioSpecific1st
Quarter
2nd
QuarterSpecific
4th
QuarterSpecific Portfolio Specific
The income statement for the first half also contained €17.3 million (€49.7 million in the comparative period13) of net impairment losses on other financial assets/liabilities, consisting of
non-recurring impairment of instruments held in the AFS portfolio totalling €17.9 million, of
which: €9.4 million relating to a financial instrument previously held in the Centrobanca
portfolio; €3.9 million to the Centrobanca Sviluppo Impresa fund; €4 million to OICR units
(collective investment instruments) and the remainder to equity instruments. Net provisions for risks and charges of
€11.6 million were set aside during the
period (€20.9 million 14 in 2012), of
which:
€2.9 million by Prestitalia, relating
to the insourcing of the activities of
outside finance companies and also
to the settlement of outstanding items generated by the records system;
€2.7 million due to UBI Leasing in relation to action taken to redevelop a portfolio property;
€1.6 million – non-recurring – attributable to BRE and relating to the replenishment of
losses incurred by an investee (with a 7.2% stake in the share capital) G.E.C. Spa (Gestione
Esazioni Convenzionate) and the complete write-off of the company following judicial
investigations which involved its senior management and directors;
€1.5 million originated by the Parent for expenses incurred in connection with the
liquidation of an investee.
The disposal of investments recorded a profit of €1.1 million, which includes €0.6 million as
the gain on the sale of a property by Banco di Brescia.
As a result of the performance described above, pre-tax profit from continuing operations
was €168.7 million, compared to €252.8 million in 2012.
On a quarterly basis continuing operations gave rise to a profit before tax of €76.1 million, a
decrease compared to €92.6 million in the first three months of 2013, but an increase
compared to the same quarter in 2012 (€42.1 million). Taxes on income for the period from continuing operations amounted to €103.1 million,
compared to €76.3 million in 2012, which, however, included substantial non-recurring items,
13 In 2012 this item was composed of the following non-recurring items: €47.1 million of impairment losses on instruments held in
the AFS portfolio; €31.8 million on the Intesa Sanpaolo share (the reference price on 29th June 2012 was €1.118), €3.5 million on
A2A and €11.8 million on other equity instruments and OICR (collective investment instruments) units (including €6.2 million on the Centrobanca Sviluppo Impresa fund and €4.4 million on the Polis closed-end property fund).
14 The figure for 2012 included provisions of €8 million recognised in connection with the process to reorganise third-party distribution networks. The sub-item “for litigation” relates, on the other hand, mainly to the network banks and litigation with
customers for financial investments and compounding of interest.
Net provisions for risks and charges
Figures in thousands of euro1H 2013 1H 2012
Net provisions for revocation clawback risks (1,164) (1,059)
Net provisions for staff costs (75) (274)
Net provision for bonds in default 276 99
Net provisions for litigation (3,473) (5,934)
Other net provisions for risks and charges (7,168) (13,711)
Total (11,604) (20,879)
49
to give a tax rate of 61.12%. Compared to the theoretical rate (33.07%), the actual tax rate
levied was mainly conditioned by the combined effect of greater IRES (corporate income tax) and IRAP (regional production tax), due to:
- the partial non-deductibility of interest expense (4%), introduced by Law No. 133 of 6th
August 2008 (7.1 percentage points);
- the higher taxation on dividends eliminated in the consolidation (3.3 percentage points);
- non tax-deductible expenses, costs and provisions (4.1 percentage points);
- losses of Group companies not recoverable for tax purposes (1.8 percentage points); - the non-deductibility for IRAP purposes of impairment losses on loans and staff costs and
the partial non-deductibility of other administrative expenses and depreciation and
amortisation (27.1 percentage points).
These impacts were only partially cushioned by the following: the valuation of equity
investments according to the equity method not significant for tax purposes (6 percentage points); the Aiuto alla crescita economica (ACE – “aid to economic growth”) concessions (2.2
percentage points); the deduction for IRES purposes of an amount equal to the IRAP
corresponding to the taxable portion of employee and similar staff costs and a lump sum 10%
deduction (4.8 percentage points); a deduction from the IRAP tax base of the tax amortisation
of goodwill (0.95 percentage points); and impairment losses (prior to 2008) on AFS investments
disposed of (Intesa Sanpaolo and A2A for 1.4 percentage points). The income statement for the first half of 2012 benefited from the following non-recurring tax items:
▪ €25 million as a result of the realignment of taxation on goodwill, recognised in the consolidated financial statements in relation to the purchase of a controlling interest in Banca Popolare di Ancona, in accordance with Art. 23, paragraphs 12-15 of Decree Law No. 98 of 6th July 2011 (Law No. 111/2011) as amended by Art. 20 of
Decree Law No. 201 of 6th December 2011 (Law No. 214/2011). In return for the cost of recognising the substitute tax at a rate of 16% (€34.8 million), it is possible to deduct the amortisation of the amount subject to tax relief (€217.3 million) at constant rates over 10 years with effect from 2018 (instead of from 2013, as a result of the postponement introduced by Law No. 228/2012). Consequently, in the first half of 2012, deferred tax assets of
€59.8 million had been recognised within item 290 of the income statement, corresponding to the future benefit arising from the deduction of amortisation on the goodwill subject to tax relief;
▪ €8.3 million resulting from tax relief in relation to non-accounting deductions existing as at 31st December 2011, relating to the loan impairment provision of UBI Banca (section EC of the income tax return). The income statement had therefore included the total substitute tax due of €11.5 million (16% of the amount of €72.1 million subject to tax relief declared in section EC of the 2012 income tax return) and also the proceeds from the write-off
of deferred liabilities recognised against the non-accounting deductions from the loan impairment provision as at 31st December 2011 (€19.8 million). Any losses on loans are deductible according to ordinary tax rules from 2012.
▪ €40.4 million relating to prior year tax credits, in view of the full deduction for corporate income tax purposes of IRAP (local production tax) on the cost of labour from 2012, as provided for by Art. 2, paragraph 1 quater of Decree
Law No. 201/2011, converted with amendments into Law No 214/2011 and subsequently supplemented by Art 4, paragraph 12 of Decree Law No. 16/2012, converted with amendments into Law No 44/2012. While the provisions
to implement the legislation had not yet been issued by the tax authorities (it was issued on 17th December 2012), the amount of the refund for the UBI Banca Group for the years 2007-2011 that will be applied for was estimated in the first half.
Taxes for the second quarter of 2013 were €46.5 million, compared to €56.6 million in the first
quarter of 2013, to give a tax rate of 61.11%, in line with 61.13% before.
As a result of the performance reported and also of the profits earned by Group banks and companies, profit for the period attributable to non-controlling interests (inclusive of the effects of
consolidation entries) stood at €12.6 million, compared to €14.4 million in 2012.
On a quarterly basis, profit attributable to non-controlling interests fell to €3.1 million from
€9.5 million in the first quarter of 2013 and from €7.1 million in the same period of 2012.
Expenses for leaving incentives of €2.6 million (€4 million gross) recognised in the first quarter of 2012 in relation to a
“General leaving incentive proposal” launched by the Group in March 2012 were grouped under a single item. They were destined to staff who are covered by the safeguards provided by the Salva Italia (Save Italy) decree.
50
The comments that follow are based on items in the consolidated balance sheet contained in the reclassified consolidated financial statements on which the relative tables furnishing details are also based. The section “Consolidated companies: the principal figures” may be consulted for information on individual banks and Group member companies.
General banking business with customers: funding
As a consequence of the trends for lending to customers in progress since the last quarter of 2011 that have occurred in parallel with progressive deterioration in the economic scenario, funding policies have also gradually adapted to the lower demands for funds to finance lending. Medium to long-term funding on international markets in the first half of 2013 – representing a constantly small proportion of total funding – continued to account for a marginal percentage of the total. Notwithstanding maturities for €1.4 billion, concentrated in the first months of the year, UBI Banca made only one EMTN issuance (private placement for €200 million in January). Issuance possibilities are nevertheless being considered with a view to satisfying the interest manifested by investors. As concerns, on the other hand, funding from ordinary customers, actions designed to optimise funding as a whole have been carried out by acting on the marginal and more costly components, and these have had positive impacts on net interest income. These actions were taken by UBI Banca, which abandoned forms of fixed maturity funding from corporate customers and reduced deposits by institutional customers, in order to focus increasingly on targeted issuances of bonds placed with network bank customers, partly with a view to lengthening the maturities. At the same time network bank activities have not involved recourse to aggressive pricing policies, offering an increasingly more diversified and high standard range of assets under management products.
Total funding
In addition to the factors mentioned above regarding Group funding policies in 2013, the following, as summarised in the table, should be considered when analysing trends for total funding of the UBI Banca Group:
� direct funding does not show the real trends for banking business with customers because it incorporates institutional factors (business in repos with the Cassa di Compensazione e Garanzia – a central counterparty clearing house – to finance the Italian government securities portfolio, the partial renewal of the maturing EMTN funding and also business on international short-term markets, although small);
� the investment choices of customers in individual periods can determine changes in the composition of total funding both between the two main items (investment of liquidity in forms of assets under management) and also within them (between current accounts and bonds on the one hand and assets under management and assets under custody on the other hand).
Total funding from customers
amount % amount % amount %
Direct funding 96,343,798 58.3% 98,678,415 58.9% -2,334,617 -2.4% 98,817,560 58.5% -2,473,762 -2.5% 102,246,727 59.7% -5,902,929 -5.8%
Indirect funding 68,944,184 41.7% 68,881,438 41.1% 62,746 0.1% 70,164,384 41.5% -1,220,200 -1.7% 69,024,117 40.3% -79,933 -0.1%
of which: assets under management 38,696,590 23.4% 38,316,266 22.9% 380,324 1.0% 38,106,037 22.6% 590,553 1.5% 36,490,940 21.3% 2,205,650 6.0%
Total funding from customers 165,287,982 100.0% 167,559,853 100.0% -2,271,871 -1.4% 168,981,944 100.0% -3,693,962 -2.2% 171,270,844 100.0% -5,982,862 -3.5%
Total funding net of CCG and institutional funding 146,832,878 149,281,392 -2,448,514 -1.6% 150,498,750 -3,665,872 -2.4% 149,377,124 -2,544,246 -1.7%
%Changes A/D
Figures in thousands of euro
30.6.2012 D
31.12.2012 C
%31.3.2013
B%
Changes A/C30.6.2013 A
%Changes A/B
51
Total Group funding as at 30th June 2013, consisting of total amounts administered on behalf
of customers, stood at €165.3 billion. Having fallen progressively over twelve months (-€6 billion year-on-year; -€3.7 billion since December; and -€2.3 billion since March), it was
concentrated mainly in direct funding due to the factors mentioned in the introduction,
notwithstanding growth in assets under management as result of the placement of the new
UBI Pramerica Sicav’s.
Net of institutional items, total funding contracted
by 1.7% year-on-year, with growth from June to
December 2012 driven by assets under
management – the result, amongst other things, of
a recovery by financial markets – subsequently incorporating the effects, especially in the second
quarter of 2013, of the Group funding policies
already mentioned.
Direct funding
Consolidated direct funding totalled €96.3 billion as at 30th June 2013, a fall of €5.9 billion year-on-year. Net of institutional factors the item, which stood at €77.9 billion, fell by €2.5
billion, concentrated in the second quarter of 2013, while it had remained unchanged in the
previous nine months. These changes, however, did not compromise the structural balance
between funding and lending, with over 85% of the loan portfolio stably financed through
funding from ordinary customers, households and businesses, the Group’s traditional strategic strength.
In detail, amounts due to customers amounted to €52.8 billion, a contraction of €4.2 billion
over twelve months which, however, was not the result of a linear trend because it was conditioned primarily by business in repurchase agreements with the Cassa di Compensazione e Garanzia (a central counterparty clearing house) used to finance the Italian government
securities portfolio (-€1.8 billion compared to June 2012; +€1.4 billion since December due partly to new investments made in 2013). This was overlapped by a fall in current accounts (-€2.3 billion), relating almost totally to the
period April-June, penalised by the effects of action taken to optimise the cost of funding
taken in 2013, which mainly affected institutional and large corporate customers (of UBI
Banca and the network banks). Term deposits, which include the various forms of fixed term deposits offered to individual
customers of the network banks, tended to fall, especially during the current year (-€0.5
billion since December), because no aggressive pricing policies were pursued for these
products.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q
Direct funding Indirect funding
Direct and indirect funding(end of quarter amounts in millions of euro)
2011201020092008 2012 2013
52
A summary is given below of some of the most important factors affecting the trend for current
accounts in the first six months of 2013, most of which are to be interpreted in relation to the action taken to optimise the cost of funding already mentioned. In detail:
for UBI Banca
- a reduction in the deposits of some accounts used to support the management of UBI Pramerica’s
mutual investment funds (total liquidity deposited by this asset management company fell by €0.9 billion during the first half of the year and by €0.8 billion over three months);
- the absence in the first quarter of some deposits by corporate customers (-€1 billion); - the disappearance, again in the first quarter, of institutional deposits by the Cassa di
Compensazione e Garanzia (-€0.2 billion);
for the network banks as a whole
- the disappearance in the first quarter of institutional deposits by the Cassa di Compensazione e
Garanzia (-€0.2 billion); - the settlement on 5th April 2013 of the new UBI Pramerica High Yield Bond Sicav for €1.2 billion,
with a consequent outflow of liquidity from direct funding to assets under management. This liquidity came mainly from maturities/disposals of assets under management, deposited temporarily in current accounts at the end of March.
Net of these factors, “core” funding from current accounts remained firm, assisted amongst
other things by growth in IW Bank funding, the Group’s online bank (+€0.8 billion year-on-year, +€0.3 billion in the first half and stable since March).
Direct funding from customers
Figures in thousands of euro amount % amount %
Current accounts and deposits 43,053,031 44.7% 45,149,448 45.7% -2,096,417 -4.6% 45,378,649 44.4% -2,325,618 -5.1%
Term deposits 2,714,005 2.8% 3,184,368 3.2% -470,363 -14.8% 2,854,015 2.8% -140,010 -4.9%
Financing 6,187,419 6.4% 4,732,552 4.8% 1,454,867 30.7% 8,037,586 7.9% -1,850,167 -23.0%
- repurchase agreements 5,739,764 6.0% 4,273,890 4.3% 1,465,874 34.3% 7,544,968 7.4% -1,805,204 -23.9%
of which: repos with the CCG 5,367,793 5.6% 3,944,510 4.0% 1,423,283 36.1% 7,196,478 7.0% -1,828,685 -25.4%
- other 447,655 0.4% 458,662 0.5% -11,007 -2.4% 492,618 0.5% -44,963 -9.1%
Other payables 888,796 0.9% 692,039 0.7% 196,757 28.4% 804,627 0.8% 84,169 10.5%
Total amounts due to customers (item 20 liabilities) 52,843,251 54.8% 53,758,407 54.4% -915,156 -1.7% 57,074,877 55.9% -4,231,626 -7.4%
Bonds 40,466,264 42.0% 41,996,277 42.5% -1,530,013 -3.6% 41,956,004 41.0% -1,489,740 -3.6%
Certificates of deposit (a)+(d) 2,476,972 2.6% 2,449,278 2.5% 27,694 1.1% 2,404,365 2.3% 72,607 3.0%
Other certificates (b)+(c) 557,311 0.6% 613,598 0.6% -56,287 -9.2% 811,481 0.8% -254,170 -31.3%
Total debt securities issued (item 30 liabilities) 43,500,547 45.2% 45,059,153 45.6% -1,558,606 -3.5% 45,171,850 44.1% -1,671,303 -3.7%
of which:
securities subscribed by institutional customers: 13,087,311 13.6% 14,538,684 14.7% -1,451,373 -10.0% 14,697,242 14.4% -1,609,931 -11.0%
The EMTN programme (*) 5,837,196 6.1% 7,091,040 7.2% -1,253,844 -17.7% 7,110,365 7.0% -1,273,169 -17.9%
French certificates of deposit programme (a) 401,311 0.4% 487,838 0.5% -86,527 -17.7% 524,705 0.5% -123,394 -23.5%
The euro commercial paper programme (b) 217,310 0.2% 273,574 0.3% -56,264 -20.6% 465,492 0.5% -248,182 -53.3%
The covered bond programme 6,291,493 6.5% 6,346,208 6.4% -54,715 -0.9% 6,251,216 6.1% 40,277 0.6%
Preference shares (**) (c) 340,001 0.4% 340,024 0.3% -23 0.0% 345,464 0.3% -5,463 -1.6%
securities subscribed by ordinary customers: 30,278,238 31.4% 30,357,304 30.7% -79,066 -0.3% 30,273,411 29.6% 4,827 0.0%
of the Group:
- Certificates of deposit (d) 2,075,661 2.1% 1,961,440 2.0% 114,221 5.8% 1,879,660 1.8% 196,001 10.4%
- Bonds: 24,396,726 25.3% 24,467,382 24.7% -70,656 -0.3% 24,104,792 23.6% 291,934 1.2%
issued by UBI Banca 10,059,926 10.4% 7,812,713 7.9% 2,247,213 28.8% 7,073,800 6.9% 2,986,126 42.2%
issued by the network banks 14,336,800 14.9% 16,654,669 16.8% -2,317,869 -13.9% 17,030,992 16.7% -2,694,192 -15.8%
external distribution networks:
- Bonds issued by the former Centrobanca 3,805,851 4.0% 3,928,482 4.0% -122,631 -3.1% 4,288,959 4.2% -483,108 -11.3%
Total direct funding 96,343,798 100.0% 98,817,560 100.0% -2,473,762 -2.5% 102,246,727 100.0% -5,902,929 -5.8%
Due to customers net of the CCG 47,475,458 49,813,897 -2,338,439 -4.7% 49,878,399 -2,402,941 -4.8%
Total direct funding net of the CCG and institutional
funding 77,888,694 80,334,366 -2,445,672 -3.0% 80,353,007 -2,464,313 -3.1%
30.6.2013
A%
Changes A/C31.12.2012
B%
Changes A/B 30.6.2012
C%
(*) The corresponding nominal amounts were €5,771 million (€182 million subordinated) as at 30th June 2013, €6,995 million (€182 million subordinated) as at 31st December 2012 and €7,024 million (€191 million subordinated) as at 30th June 2012. The figures shown in the table do not include €8 billion of private
placements of an intragroup nature, which were therefore eliminated in the consolidation (€88 million as at 31st December 2012 and as at 30th June 2012).
(**) The preference shares were issued for nominal amounts by BPB Capital Trust of €300 million, by Banca Lombarda Preferred Securities Trust of €155 million and by BPCI Capital Trust of €115 million. Following the public exchange offer of 25th June 2009 and the public tender offer to purchase concluded on 12th
March 2012, as well as other buy backs performed subsequently, the nominal amounts of the outstanding shares were €182.095 million for the BPB Capital
Trust issuance, €90.314 million for that by the Banca Lombarda Preferred Securities Trust and €65.338 million for that by the BPCI Capital Trust.
53
(*) The corresponding nominal amounts were €5,771 million (€182 million
subordinated) as at 30th June 2013 and
€5,771 million (€182 million
subordinated) as at 31st March 2013. The amounts shown in the table do not
include private placements of €8 million
of an intragroup nature, which were therefore eliminated in the consolidation.
Debt securities issued – over 90% of which are bonds – fell to €43.5 billion (-€1.7 billion year-on-year; -€1.6 billion in the first half; -€0.4 billion over three months).
Bonds amounted to €40.5 billion, down from €42 billion the year before, affected primarily by
institutional maturities under the EMTN programme. Other certificates, on the other hand,
amounting to €0.5 billion (-€0.3 billion over twelve months; -€0.1 billion in the first half),
reflected the trend for euro commercial paper, while the remainder of the item consisted of
preference shares. At €2.5 billion certificates of deposit were largely unchanged compared to June 2012 (+€0.1
billion), the aggregate result in reality of differing performance by the various items:
certificates swapped with yen were affected by exchange rates and were down by €0.2 billion
(the fall was concentrated in the second half of 2012); French certificates of deposit were
affected by the investment decisions of international subscribers and recorded fluctuating
performance compared to growth, although slowing, for ordinary certificates of deposit (+€0.4 billion year-on-year, +€0.1 billion in the first half, stable in the quarter as a result of pricing
policies).
In terms of type of customer, funding in debt securities from institutional customers continue
to represent a limited proportion of Group direct funding, amounting to 13.6%. It amounted to €13.1 billion at the end of the first half, having contracted progressively over
twelve months, but above all in the first quarter of 2013, a reflection of the partial renewal of
notes maturing under the EMTN programme and a decrease in short-term operations in
European commercial paper and French certificates of deposit. This was conditioned by the
minimum rating levels set by the internal policies of international market participants.
Direct funding from customers
Figures in thousands of euro amount %
Current accounts and deposits 43,053,031 44.7% 45,225,542 45.8% -2,172,511 -4.8%
Term deposits 2,714,005 2.8% 2,933,559 3.0% -219,554 -7.5%
Financing 6,187,419 6.4% 5,738,116 5.8% 449,303 7.8%
- repurchase agreements 5,739,764 6.0% 5,216,576 5.3% 523,188 10.0%
of which: repos with the CCG 5,367,793 5.6% 4,916,887 5.0% 450,906 9.2%
- other 447,655 0.4% 521,540 0.5% -73,885 -14.2%
Other payables 888,796 0.9% 919,527 1.0% -30,731 -3.3%
Total amounts due to customers (item 20 liabilities) 52,843,251 54.8% 54,816,744 55.6% -1,973,493 -3.6%
Bonds 40,466,264 42.0% 40,562,221 41.1% -95,957 -0.2%
Certificates of deposit (a)+(d) 2,476,972 2.6% 2,678,779 2.7% -201,807 -7.5%
Other certificates (b)+(c) 557,311 0.6% 620,671 0.6% -63,360 -10.2%
Total debt securities issued (item 30 liabilities) 43,500,547 45.2% 43,861,671 44.4% -361,124 -0.8%
of which:
securities subscribed by institutional customers: 13,087,311 13.6% 13,361,574 13.5% -274,263 -2.1%
The EMTN programme (*) 5,837,196 6.1% 5,859,468 5.9% -22,272 -0.4%
French certificates of deposit programme (a) 401,311 0.4% 590,517 0.6% -189,206 -32.0%
The euro commercial paper programme (b) 217,310 0.2% 280,707 0.3% -63,397 -22.6%
The covered bond programme 6,291,493 6.5% 6,290,918 6.4% 575 0.0%
Preference shares (c) 340,001 0.4% 339,964 0.3% 37 0.0%
securities subscribed by ordinary customers: 30,278,238 31.4% 30,351,552 30.7% -73,314 -0.2%
of the Group:
- Certificates of deposit (d) 2,075,661 2.1% 2,088,262 2.1% -12,601 -0.6%
- Bonds: 24,396,726 25.3% 24,396,900 24.7% -174 0.0%
issued by UBI Banca 10,059,926 10.4% 8,713,395 8.8% 1,346,531 15.5%
issued by the network banks 14,336,800 14.9% 15,683,505 15.9% -1,346,705 -8.6%
external distribution networks:
- Bonds issued by the former Centrobanca 3,805,851 4.0% 3,866,390 3.9% -60,539 -1.6%
Total direct funding 96,343,798 100.0% 98,678,415 100.0% -2,334,617 -2.4%
Due to customers net of the CCG 47,475,458 49,899,857 -2,424,399 -4.9%
Total direct funding net of the CCG and institutional
funding 77,888,694 80,399,954 -2,511,260 -3.1%
Changes A/D30.6.2013
A%
31.3.2013
D%
54
In detail, institutional funding was composed as follows as at the 30th June 2013:
EMTN instruments (Euro Medium Term Notes) amounting to €5.8 billion, (of which just €0.2 billion subordinated) issued as part of a programme for a maximum issuance of €15
billion38. Only 4 new placements were made for €1.475 billion nominal (€750 million in
October, €200 million in November and €325 million in December 2012; €200 million in
January 2013), against maturities, redemptions and repurchases for a total of €2.728
billion nominal (€1.424 billion in 2013, all in the first quarter);
covered bonds of €6.3 billion, for which no new issuances were made. The marginal changes shown in the table are attributable to amortisations and/or accounting
adjustments. UBI Banca has 8 covered bonds in issue under the “multioriginator”
programme backed by residential mortgages (with a €10 billion ceiling) for a nominal
amount of €5.691 billion, after €59 million of amortisations39.
As at 30th June 2013, the residential mortgage asset pool formed at UBI Finance to back the issuances totalled €10.8 billion, of which 22.7% originated by Banca Popolare di Bergamo, 20.5% by Banco di Brescia, 19% by Banca Popolare Commercio e Industria, 15.7% by Banca Regionale Europea, 11% by Banca Popolare di Ancona, 7% by Banca Carime, 2.4% by Banca di Valle Camonica and the remaining 1.7% by UBI Banca Private Investment.
The portfolio again had a high degree of fragmentation, including approximately 154 thousand mortgages with average residual debt of €70.1 thousand, distributed with approximately 72.1% in North Italy and in Lombardy especially (51% of the total);
A transfer of assets was concluded in June by Banca Carime, Banco di Brescia, Banca Popolare Commercio e Industria and Banca Popolare di Ancona, who transferred mortgages already held on their books to UBI Finance for a total of €1.2 billion of the remaining principal on the loans;
French certificates of deposit amounting to €401 million, issued by the UBI Banca
International as part of a programme for a maximum issuance of €5 billion, listed in
Luxembourg, and euro commercial paper amounting to €217 million, issued by UBI Banca
International as part of a €6 billion programme listed in Luxembourg;
preference shares amounting to €340 million, composed of the securities still in issue
following the public exchange offer of June 2009, the operation carried out in February and
March 2012 and some buy backs performed subsequently.
Funding in securities from ordinary customers – €30.3 billion consisting mainly of bonds partly
listed on the MOT (electronic bond market) – remained unchanged over twelve months.
Within the item, bonds placed with Group customers recorded differing performance for UBI
Banca issues (+€3 billion year-on-year and +€2.2 billion compared to December, +€1.3 billion
since March) and network bank issues (respectively -€2.7 billion and -€2.3 billion, -€1.3
billion), because of the change in the funding policy, whereby since January 2013 issues destined to ordinary customers are centralised mainly at the Parent and the network banks
perform placement activity for them.
The debt securities placed by UBI Banca and the network banks as a whole totalled €2.9
billion nominal in the first half of 2013 against maturities and amortisations of €2.5 billion
nominal (issues of €1.5 billion compared to maturities of €1.2 billion in the period April-June).
Funding from the former Centrobanca, primarily from non-captive customers, continued to decrease in the absence of new issuances (-€0.4 billion over twelve months).
The table below summarises maturities for Group bonds in issue at the end of the first half.
38All the notes are admitted for trading on the London Stock Exchange with the sole exception of those which were issued by the
former Banca Lombarda e Piemontese listed in Luxembourg. 39Self-retained covered bonds in issue also exist amounting to €3.050 billion nominal, three of which for a total nominal amount of
€0.75 billion issued in February 2012 as part of a residential mortgage backed programme and another two for a total of €2.3 billion nominal, performed again in 2012 as part of the second commercial mortgage backed programme. Because these were repurchased
by the Parent, these liabilities have not been recognised, in accordance with IFRS.
55
* The EMTN
subordinated note was placed on the date of the
exercise of a call option
(October 2013).
Listed securities
Bonds listed on the MOT (electronic bond market)
ISIN number 30.6.2013 31.12.2012
IT0001197083 Centrobanca zero coupon 1998-2018 L. 800 billion € 158,208,699 € 164,047,404
IT0001257333 Centrobanca 1998/2014 reverse f loater L. 300 billion € 86,989,283 € 89,251,808
IT0001267381 Centrobanca 1998/2018 reverse f loater capped L. 320 billion € 131,182,761 € 132,468,039
IT0001278941 Centrobanca 1998/2013 equity linked coupon L. 100 billion € 37,053,267 € 38,099,909
IT0001300992 Centrobanca 1999/2019 step dow n indicizzato al tasso sw ap euro 10 anni € 170,000,000 € 112,452,260 € 119,683,666
IT0001312708 Centrobanca 1999/2019 step dow n eurostability bond € 60,000,000 € 59,618,103 € 62,389,248
IT0004424435 UBI subordinato low er tier 2 a tasso variabile con ammortamento 28.11.2008-2015 € 599,399,000 € 357,402,669 € 356,528,893
IT0004457070 UBI subordinato low er tier 2 f ix to f loat con rimborso anticipato 13.3.2009-2019 € 370,000,000 € 376,242,871 € 381,377,159
IT0004457187 UBI subordinato low er tier 2 a tasso variabile con ammortamento 13.3.2009-2016 € 211,992,000 € 126,204,616 € 168,290,705
IT0004497043 Unione di Banche Italiane Scpa tasso misto 30.6.2009-2014 € 219,990,000 € 218,830,928 € 218,273,272
IT0004497050 UBI subordinato low er tier 2 f ix to f loat con rimborso anticipato 30.6.2009-2019 € 365,000,000 € 367,811,540 € 372,171,144
IT0004497068 UBI subordinato low er tier 2 a tasso variabile con ammortamento 30.6.2009-2016 € 156,837,000 € 93,164,659 € 124,233,447
IT0004496557 Unione di Banche Italiane Scpa tasso misto 7.7.2009-2014 € 200,000,000 € 198,979,742 € 198,834,101
IT0004517139 Unione di Banche Italiane Scpa tasso misto 4.9.2009-2013 € 84,991,000 € 85,082,919 € 84,923,166
IT0004572860 UBI subordinato low er tier 2 a tasso variabile con ammortamento 23.2.2010-2017 € 152,587,000 € 121,144,236 € 151,575,804
IT0004572878 UBI subordinato low er tier 2 a tasso f isso 3,10% con ammortamento 23.2.2010-2017 € 300,000,000 € 251,346,652 € 314,157,916
IT0004645963 UBI subordinato low er tier 2 a tasso f isso 4,30% con ammortamento 5.11.2010-2017 € 400,000,000 € 409,351,832 € 410,797,107
IT0004651656 Unione di Banche Italiane Scpa tasso f isso 2,30% 2.12.2010-2013 Welcome Edition € 81,322,000 € 81,366,890 € 81,264,633
IT0004652043 Unione di Banche Italiane Scpa tasso misto 2.12.2010-2014 € 174,973,000 € 174,358,650 € 174,136,269
IT0004710981 Unione di Banche Italiane Scpa tasso f isso 3,65% 20.5.2011-20.11.2013 € 5,787,000 € 5,854,421 € 5,911,171
IT0004713654 Unione di Banche Italiane Scpa tasso misto 10.6.2011-2015 € 120,000,000 € 122,135,027 € 123,276,629
IT0004718489 UBI subordinato low er tier 2 tasso f isso 5,50% con ammortamento 16.6.2011-2018 Welcome Edition € 400,000,000 € 420,432,977 € 423,622,244
IT0004723489 UBI subordinato low er tier 2 tasso f isso 5,40% con ammortamento 30.6.2011-2018 € 400,000,000 € 420,552,738 € 423,855,780
IT0004767742 UBI subordinato low er tier 2 tasso misto 18.11.2011-2018 Welcome Edition € 222,339,000 € 222,316,368 € 223,629,064
IT0004777550 Unione di Banche Italiane Scpa tasso f isso 5% 9.12.2011-9.6.2014 € 203,313,000 € 205,224,417 € 206,227,976
IT0004777568 Unione di Banche Italiane Scpa tasso f isso 5% 30.12.2011-30.6.2014 Welcome Edition € 176,553,000 € 177,381,657 € 178,073,154
IT0004779713 Unione di Banche Italiane Scpa tasso f isso 4,50% 30.12.2011-30.6.2014 € 287,722,000 € 288,939,814 € 289,994,069
IT0004780711 Unione di Banche Italiane Scpa tasso f isso 5% 29.12.2011-29.6.2014 € 95,109,000 € 95,344,123 € 95,605,512
IT0004785876 Unione di Banche Italiane Scpa tasso f isso 4,3% 17.2.2012-17.3.2014 € 19,991,000 € 20,296,069 € 20,358,184
IT0004785892 Unione di Banche Italiane Scpa tasso f isso 3,8% 31.1.2012-28.2.2014 € 25,000,000 € 25,387,509 € 25,464,290
IT0004796030 Unione di Banche Italiane Scpa tasso variabile 30.3.2012-30.3.2014 € 20,000,000 € 19,999,365 € 20,000,535
IT0004796048 Unione di Banche Italiane Scpa tasso f isso step up 3,50% 30.3.2012-30.3.2014 € 40,000,000 € 40,267,475 € 40,388,587
IT0004803968 Unione di Banche Italiane Scpa tasso variabile 23.4.2012-23.4.2014 € 73,022,000 € 73,268,610 € 73,285,049
IT0004804560 Unione di Banche Italiane Scpa tasso f isso step up 3% 30.4.2012-30.4.2014 € 33,438,000 € 33,791,048 € 34,344,849
IT0004815368 Unione di Banche Italiane Scpa tasso f isso 4% 8.6.2012-8.6.2015 Welcome Edition € 15,371,000 € 15,465,152 € 15,481,581
IT0004815715 Unione di Banche Italiane Scpa tasso f isso 3,80% 15.6.2012-15.6.2016 € 20,224,000 € 20,320,172 € 20,333,588
IT0004841778 UBI subordinato low er tier 2 tasso misto 8.10.2012-8.10.2019 Welcome Edition € 200,000,000 € 201,215,660 € 201,603,727
IT0004842370 UBI subordinato low er tier 2 tasso f isso con ammortamento 6% 8.10.2012-8.10.2019 € 970,457,000 € 984,839,878 € 985,224,678
IT0004851710
Unione di Banche Italiane Scpa tasso variabile 23.11.2012-23.11.2016 Welcome Edition
"UBI Comunità per l'imprenditoria sociale del sistema CGM" € 17,552,000 € 17,608,027 € 17,624,825
IT0004851728
Unione di Banche Italiane Scpa tasso f isso step up 4,00% 19.10.2012-19.10.2016 Welcome Edition
"UBI Comunità per la Comunità di Sant'Egidio" € 20,000,000 € 20,393,398 € 20,361,336
IT0004854490
Unione di Banche Italiane Scpa tasso misto 7.12.2012-7.12.2015 Welcome Edition
"Progetto T2 Territorio per il Territorio UBI Banca e Assolombarda" € 18,550,000 € 18,554,163 € 18,601,359
IT0004855554 Unione di Banche Italiane Scpa tasso f isso 4% 30.11.2012- 30.11.2014 Welcome Edition € 34,966,000 € 34,950,260 € 35,017,404
IT0004855562 Unione di Banche Italiane Scpa tasso f isso 4% 23.11.2012-23.12.2014 € 99,991,000 € 99,814,683 € 100,393,415
IT0004865579 Unione di Banche Italiane Scpa tasso f isso 3% 3.12.2012-3.12.2014 € 121,440,000 € 121,217,875 € 121,435,076
IT0004867310 Unione di Banche Italiane Scpa tasso f isso 3,50% 7.12.2012-7.6.2015 € 68,189,000 € 68,175,474 € 68,145,376
IT0004869860
Unione di Banche Italiane Scpa tasso f isso step up 3,00% 31.12.2012-31.12.2015 WE UBI Comunità per
Fondazione Umberto Veronesi € 20,000,000 € 20,034,296 € 20,000,000
IT0004874985 Unione di Banche Italiane Scpa tasso f isso step up 3,00% 31.1.2013-31.1.2017 € 157,532,000 € 159,202,994 -
IT0004874993 Unione di Banche Italiane Scpa tasso f isso 3,50% 31.1.2013-31.1.2016 Welcome Edition € 54,419,000 € 55,020,317 -
IT0004895352 Unione di Banche Italiane Scpa step up 5.4.2013-5.4.2016 Welcome Edition C Cesvi € 20,000,000 € 20,088,940 -
IT0004908478 Unione di Banche Italiane Scpa tasso misto 24.5.2013-24.5.2016 Welcome Edition T2 Confapi € 20,000,000 € 20,040,544 - -
Nominal amount of
issue
Book value as at
Maturities for bonds outstanding as at 30th June 2013
Nominal amounts in millions of euro3rd Quarter
2013
4th Quarter
20132014 2015 2016
Subsequent
yearsTotal
UBI BANCA 1,389 2,041 5,348 3,814 6,174 6,399 25,165
of which: EMTN* 642 1,663 2,276 965 100 125 5,771
Covered bonds - 25 51 551 1,800 3,264 5,691
Network banks 1,397 1,360 5,652 3,564 1,199 916 14,088
Other banks in the Group - - - 1 - 4 5
Total 2,786 3,401 11,000 7,379 7,373 7,319 39,258
56
***
As part of a policy to support the third sector, in the first half the UBI Banca Group continued with the issuance of “social bonds”, an innovative financial instrument launched in 2012 as part of the “UBI Community” platform introduced at the end of 2011. These are bond instruments where, in addition to providing remuneration at a market interest rate, the investment made by subscribers allows the issuing bank to allocate part of the funding acquired (e.g. 0.50%) to support projects of high social value undertaken by nonprofit organisations, or to pay it into a pool for the disbursement of finance to third sector initiatives. Since April 2012 until the date of this report 31 social bonds have been placed for a total value of €324 million, which have made it possible to make donations to support initiatives of social interest amounting to over €1.6 million. More specifically, 14 new bonds have already been placed since January 2013 of which 2 by the Parent, for a total of €125.7 million, which made it possible to make donations of €628 thousand. In recognition of the innovative nature of this initiative and of its success with investors, on 25 th June 2013 Giorgio Napolitano, the President of the Republic, awarded the UBI Banca Group the “Premio
Nazionale per l’innovazione” (national prize for innovation, known as the “Prize of Prizes”40). The UBI Banca Group’s candidature for the project was made possible because in March it won the Italian Banking Association prize for innovation in banking services in the category “La banca
solidale” (the charitable bank). The reason given was for “its concrete and effective nature in generating immediate positive impacts on the social and environmental context, helping to support the development of the ‘Economy of the common’ good directly and increasing social cohesion”.
***
40 The “Prize of prizes” was established by a decree of the President of the Council of Ministers (Prime Minister) in 2008 and it was
awarded to the winners of innovation prizes given periodically in the manufacturing and service industries, by universities and
government research institutes and by public administrations with the objective of underlining the importance attributed to companies, public authorities and private sector entities or individuals as protagonists of innovation, to support their role in the
social, economic and scientific development of the country.
Listed securities (continued)
Convertible bonds listed on the MTA
ISIN number
IT0004506868 UBI 2009/2013 soft mandatory convertible bond € 639,145,872 € 674,800,406 € 655,465,003
Covered bonds listed on the London Stock Exchange
ISIN number
IT0004533896 UBI Covered Bonds due 23 September 2016 3,625% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,103,415,206 € 1,096,717,624
IT0004558794 UBI Covered Bonds due 16 December 2019 4% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,156,048,308 € 1,145,948,084
IT0004599491 UBI Covered Bonds due 30 April 2022 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 204,714,571 € 216,118,631
IT0004619109 UBI Covered Bonds due 15 September 2017 3,375% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,087,892,721 € 1,078,025,809
IT0004649700 UBI Covered Bonds due 18 October 2015 3,125% guaranteed by UBI Finance Srl € 500,000,000 € 527,403,558 € 523,119,513
IT0004682305 UBI Covered Bonds due 28 January 2021 5,25% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,167,668,625 € 1,202,660,589
IT0004692346 UBI Covered Bonds due 22 February 2016 4,5% guaranteed by UBI Finance Srl € 750,000,000 € 807,495,346 € 832,783,878
IT0004777444 UBI Covered Bonds due 18 November 2021 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 236,854,896 € 250,833,411
Innovative equity instruments (preference shares) listed on international markets
ISIN number
Luxembourg
XS0123998394Non-cumulative Fixed/Floating Rate Guaranteed Trust Preferred Securities
Banca Popolare di Bergamo Capital Trust € 300,000,000 € 183,575,525 € 183,572,879
XS0131512450 9% Non-cumulative Guaranteed Trust Preferred Securities Banca Popolare Commercio e Industria Capital
Trust
€ 115,000,000 € 65,771,188 € 65,787,479
London
XS0108805564 Step-Up Non-voting Non-cumulative Trust Preferred Securities Banca Lombarda Preferred Securities Trust € 155,000,000 € 90,654,606 € 90,663,343
The list does not include the follow ing: EMTN issues listed in London and in Luxembourg; the covered bond issues repurchased (self-retained), listed in London; the securities from
securitisations performed for internal purposes by Banca Popolare di Bergamo, B@nca 24-7, UBI Leasing and Banco di Brescia, all listed on the Dublin stock exchange; the issues of
French certif icates of deposit and of commercial paper, listed in Luxembourg.
Nominal amount of
issue31.12.2012
Nominal amount of
issue31.12.2012
Nominal amount of
issue31.12.201230.6.2013
30.6.2013
30.6.2013
57
The table below summarises the
geographical distribution of conventional funding (consisting of current accounts,
savings deposits and certificates of
deposit).
The figures confirm the significant
concentration of the Group in north western regions (70.5%) and in the
Lombard area in particular (60%), even
though the actions taken to optimise
funding by UBI Banca have caused a
slight change in the composition out of Lombardy into other regions.
Percentage of total 30.6.2013 31.12.2012 30.6.2012
Lombardy 59.95% 61.77% 60.68%
Piedmont 7.94% 7.65% 7.55%
Latium 7.01% 6.90% 7.56%
Apulia 4.63% 4.42% 4.47%
Calabria 4.51% 4.35% 4.32%
Marches 4.25% 3.93% 4.06%
Campania 4.00% 3.74% 3.87%
Liguria 2.54% 2.45% 2.58%
Emilia Romagna 1.32% 1.19% 1.26%
Veneto 1.03% 1.00% 1.07%
Basilicata 1.03% 0.97% 0.97%
Umbria 0.60% 0.53% 0.52%
Abruzzo 0.45% 0.45% 0.44%
Friuli Venezia Giulia 0.25% 0.22% 0.23%
Tuscany 0.23% 0.21% 0.21%
Molise 0.21% 0.17% 0.17%
Valle d'Aosta 0.03% 0.03% 0.02%
Trentino Alto Adige 0.02% 0.02% 0.02%
Total 100.00% 100.00% 100.00%
North 73.1% 74.3% 73.4%
- North West 70.5% 71.9% 70.8%
- North East 2.6% 2.4% 2.6%
Central 12.1% 11.6% 12.3%
South 14.8% 14.1% 14.3%
(*) The aggregates relate to banks only.
Geographical distribution of direct funding from customers
by region of location of the branch
(excluding repurchase agreements and bonds)(*)
58
Indirect funding and assets under management
Indirect funding from ordinary customers
Figures in thousands of euro amount % amount %
Assets under custody 30,247,594 43.9% 32,058,347 45.7% -1,810,753 -5.6% 32,533,177 47.1% -2,285,583 -7.0%
Assets under management 38,696,590 56.1% 38,106,037 54.3% 590,553 1.5% 36,490,940 52.9% 2,205,650 6.0%
Customer portfolio management 7,556,920 11.0% 7,744,074 11.0% -187,154 -2.4% 7,643,213 11.1% -86,293 -1.1%
of which: fund based instruments 1,627,893 2.4% 1,642,689 2.3% -14,796 -0.9% 1,624,016 2.4% 3,877 0.2%
Mutual investment funds and SICAV’s 19,706,534 28.6% 19,102,247 27.2% 604,287 3.2% 17,355,893 25.1% 2,350,641 13.5%
Insurance policies and pension funds 11,433,136 16.5% 11,259,716 16.1% 173,420 1.5% 11,491,834 16.7% -58,698 -0.5%
of which: Insurance policies 11,193,674 16.2% 11,050,312 15.7% 143,362 1.3% 11,287,409 16.4% -93,735 -0.8%
Total indirect funding from ordinary customers 68,944,184 100.0% 70,164,384 100.0% -1,220,200 -1.7% 69,024,117 100.0% -79,933 -0.1%
Changes A/C30.6.2013
A%
30.6.2012
C%
Changes A/B31.12.2012
B%
Indirect funding of the UBI Banca Group
amounted to €68.9
billion at the end of
June, almost
unchanged year-on-year, but down on
the comparison with
€70.2 billion in
December,
notwithstanding a
slight recovery in the second quarter.
The trend for the item as a whole over twelve months reflects changes in the main
components.
Benefiting from a favourable trend for the sector nationally, assets under management rose to €38.7 billion in
terms of the total (+€2.2 billion) and
to 56.1% in percentage terms, driven
by mutual investment funds and
Sicav’s which, having risen for the
fourth consecutive quarter, had reached €19.7 billion at the end of the
first half (+€2.4 billion), to account for
over one fourth of total indirect
funding. The successful placement (a
total of over €3.2 billion over twelve months) of the new UBI Pramerica
Sicav’s (Focus Italia, Cedola Mercati
Emergenti, Cedola Certa 2013-2017,
Global Dynamic Allocation – classe A,
High Yield Bond, Protezione Mercati
Emergenti) made a large contribution to that result.
On the other hand, other components
of assets under management were
relatively stable consisting of
customer portfolio managements (down by €86 million to €7.56 billion), insurance policies and pension funds (down by €59 million to €11.4 billion).
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1 Q2 Q3 Q4 Q 1 Q2 Q3 Q4 Q 1 Q2 Q3 Q4 Q 1 Q2 Q3 Q4 Q 1 Q2 Q3 Q4 Q 1 Q2 Q
Assets under management Assets under custody
Indirect funding (end of quarter amounts in milions of euro)
2008 2009 2010 2011 2012 2013
Indirect funding from ordinary customers
Figures in thousands of euro amount %
Assets under custody 30,247,594 43.9% 30,565,172 44.4% -317,578 -1.0%
Assets under management 38,696,590 56.1% 38,316,266 55.6% 380,324 1.0%
Customer portfolio management 7,556,920 11.0% 7,777,365 11.3% -220,445 -2.8%
of which: fund based instruments 1,627,893 2.4% 1,654,707 2.4% -26,814 -1.6%
Mutual investment funds and SICAV’s 19,706,534 28.6% 19,095,297 27.7% 611,237 3.2%
Insurance policies and pension funds 11,433,136 16.5% 11,443,604 16.6% -10,468 -0.1%
of which: Insurance policies 11,193,674 16.2% 11,201,482 16.3% -7,808 -0.1%
Total indirect funding from ordinary customers 68,944,184 100.0% 68,881,438 100.0% 62,746 0.1%
Changes A/D30.6.2013
A%
31.3.2013
D%
59
As shown in the chart, the negative trend for assets under custody, which started in the third
quarter of 2011 continued, standing at €30.2 billion (-€2.3 billion, of which
-€1.8 billion since the beginning of the year ). It must nevertheless be considered that the performance of assets under custody has been
equally affected by customer decisions, where these translate into the reallocation of
investments into types of direct funding (listed bonds issued by UBI Banca) or into asset
management products. The decrease that occurred in the first quarter (-€1.5 billion) must be
interpreted in this sense. It occurred in parallel, at the beginning of April, with the end of the subscription of the High Yield Bond Sicav’s (+€1.2 billion) for which the liquidity was obtained
mainly from disposals and maturities of different types of assets under custody.
Indirect funding decreased as a whole by €1.2 billion between January and June 2013, the
aggregate result of a contraction in the assets under custody component (-€1.8 billion, of
which just -€0.3 billion in the second quarter), partially offset by an increase in assets under management (+€0.6 billion, of which +€0.4 billion in the second quarter) and in mutual funds
and Sicav’s in particular (+€0.6 billion, all relating to the second quarter). The partial recovery
in the insurance component in the first quarter (+€0.2 billion) was offset by a decrease in
customer portfolio managements (-€0.2 billion), concentrated in the second quarter.
In this respect the placement of the new UBI Pramerica Global Dynamic Allocation – Class B Sicav’s began on the 6th June for a total amount of €0.8 billion, which was not included in the
total at the end of the first half because it was settled with a value date of 19th July 2013.
* * *
As concerns the periodic surveys performed by Assogestioni (national association of asset management companies), in consideration of their nature, the figure for assets under management also includes the management mandates which the UBI Banca Group grants to Pramerica Financial – the brand name used by Prudential Financial Inc. (USA) –, a UBI Banca partner in assets under management operations through UBI Pramerica SGR (€5 billion of mutual funds and Sicav’s as at 30th June 2013, of which €1.6 billion of equities and €3.4 billion of bonds). This presentation provides a more consistent account of the actual assets under management of the UBI Banca Group.
At the end of June, Assogestioni data1 relating to the Group’s asset management company for
mutual funds and Sicav’s, were as follows for ASSETS UNDER MANAGEMENT:
net inflows were positive in 2013 at €930 million, amounting to 5.3% of assets under
management originated at the end of 2012 (net inflows for the sector nationally on the
other hand were positive at €30.9 billion, corresponding to 6.4% of assets managed at
the end of 2012);
good performance for total assets over six months (+€0.9 billion; +5%) compared with
similar performance for the sector (+€35.1 billion; +7.3%). The increase, on the other
hand, in assets under management by the UBI Banca Group over twelve months was
€2.4 billion (+15%), compared to an increase of €88.5 billion for the sector (+20.7%);
assets under management of approximately €18.6 billion, which places the Group again in seventh place among operators in the sector with a market share of 3.59%,
slightly down on both the end of the year (3.67%) and over twelve months (3.77%).
It must nevertheless be considered that Assogestioni’s representative sample of the sector also includes non-banking operators. Consequently, market shares for the UBI Group in the asset management sector are naturally smaller than those for direct funding, lending and number of branches. If the analysis is restricted to banks only, the Group’s market share as at 30th June 2013 was 5.80% (5.87% at the end of 2012), placing the UBI Banca in fourth position among operators in the sector.
The summary figures given in the table below confirm the prudential approach of Group
customers in the first half as shown by the following :
a stable and high percentage of lower risk funds (monetary funds and bonds), accounting as a whole for 73.3% of the total compared to 56.2% for the sector
nationally;
1 Assogestioni (national association of asset management companies), “Monthly map of assets under management”, June 2013.
60
a percentage of equity funds constantly lower than the benchmark sample (12.6%
compared to 19.9%);
no investment in hedge funds (these accounted for 1.3% of the total for the sector
nationally at the end of June).
Fund assets (including assets managed for the UBI Banca Group under a mandate)
UBI Banca Group
Figures in millions of euro amount % amount %
Equities 2,338 12.6% 2,276 12.9% 62 2.7% 2,204 13.7% 134 6.1%
Balanced 1,977 10.6% 1,270 7.2% 707 55.7% 1,169 7.2% 808 69.1%
Bond 11,501 62.0% 11,309 63.9% 192 1.7% 9,669 59.9% 1,832 18.9%
Monetary funds 2,089 11.3% 2,214 12.5% -125 -5.6% 2,398 14.9% -309 -12.9%
Flexible 659 3.5% 615 3.5% 44 7.2% 699 4.3% -40 -5.7%
TOTAL (a) 18,564 100.0% 17,684 100.0% 880 5.0% 16,139 100.0% 2,425 15.0%
Sector nationally
Figures in millions of euro amount % amount %
Equities 102,926 19.9% 98,864 20.5% 4,062 4.1% 92,960 21.7% 9,966 10.7%
Balanced 29,277 5.7% 20,726 4.3% 8,551 41.3% 19,746 4.6% 9,531 48.3%
Bond 262,159 50.7% 248,706 51.7% 13,453 5.4% 201,726 47.1% 60,433 30.0%
Monetary funds 28,493 5.5% 32,388 6.7% -3,895 -12.0% 39,449 9.2% -10,956 -27.8%
Flexible 82,957 16.1% 67,548 14.0% 15,409 22.8% 59,645 14.0% 23,312 39.1%
Hedge funds 6,645 1.3% 7,088 1.5% -443 -6.3% 8,267 1.9% -1,622 -19.6%
Unclassified 4,155 0.8% 6,232 1.3% -2,077 -33.3% 6,272 1.5% -2,117 -33.8%
TOTAL (b) 516,612 100.0% 481,552 100.0% 35,060 7.3% 428,065 100.0% 88,547 20.7%
MARKET SHARE OF THE UBI BANCA
GROUP (a)/(b) 3.59% 3.67% 3.77%
30.6.2013
A%
30.6.2013
A%
30.6.2012
C
Changes A/C
Changes A/C
%
31.12.2012
B%
Changes A/B
Changes A/B
31.12.2012
B%
30.6.2012
C%
* * *
As concerns on the other hand ASSETS UNDER MANAGEMENT NET OF GROUP FUNDS (which includes
collective instruments and customer portfolio managements), at the end of the first half of the
year the UBI Banca Group was positioned in ninth place among operators in the sector
(seventh among Italian groups) with assets amounting to €28.2 billion – including
approximately €6.2 billion relating to institutional customers – and market share of 2.43%, more or less unchanged compared to 2.44% at the end of the year.
If the analysis is restricted to banks only, the UBI Banca Group’s market share as at 30th June 2013 was 5.11%, unchanged compared to the end of 2012, placing the UBI Banca Group in fourth position among operators in the sector.
61
General banking business with customers: lending
Performance of the loan portfolio
The figures as at 31st December and as
at 30th June 2012 were affected by a
reclassification of subordinated loans out of the item “mortgage loans and
other medium to long-term financing”
into the item “other transactions” in compliance with supervisory
regulations (€98,073 thousand in
December and €98,114 thousand in June 2012).
Loans to customers at the end of June stood at €91.3 billion, down by €4 billion compared to
€95.3 billion in June 2012 and by €1.6 billion – of which €1 billion in the second quarter –
compared with €92.9 billion in December. In percentage terms, the year-on-year fall of 4.3% compares with a decrease of 3.6% for the private sector nationally, while in the first six months of 2013 the contraction of 1.7% for the UBI Banca Group was less
than that of the average of 2.3% for Italian banks nationally. Similarly Group loans decreased by 1.1% between April and June compared to a fall of 1.3% for the sector.
The performance of the item was affected significantly by the unfavourable economic
environment consisting of the persistent recession of the real economy, with consequent falls
in consumption, production and investments, which were reflected in weak demand from not
only households, but above all from businesses.
Furthermore, the year-on-year comparison was still affected, although to a lesser extent
compared to previous quarters, by the impacts of actions introduced in 2011.
Composition of loans to customers
Figures in thousands of euro amount % amount %
Current account overdrafts 12,100,894 13.3% 1,421,188 12,875,334 13.9% 1,343,890 -774,440 -6.0% 12,880,325 13.5% 1,237,061 -779,431 -6.1%
Reverse repurchase agreements 51,364 0.1% - 618,901 0.7% - -567,537 -91.7% 418,020 0.4% - -366,656 -87.7%
Mortgage loans and other medium to long-
term financing 53,506,027 58.6% 4,393,540 54,128,836 58.3% 3,931,236 -622,809 -1.2% 55,203,969 57.9% 3,514,010 -1,697,942 -3.1%
Credit cards, personal loans and salary-
backed loans 4,661,825 5.1% 489,222 5,058,147 5.4% 472,210 -396,322 -7.8% 5,447,493 5.7% 315,064 -785,668 -14.4%
Finance leases 7,671,205 8.4% 1,217,776 7,914,765 8.5% 1,250,191 -243,560 -3.1% 8,355,019 8.8% 1,029,343 -683,814 -8.2%
Factoring 2,488,709 2.7% 320,027 2,752,379 3.0% 303,609 -263,670 -9.6% 2,478,794 2.6% 144,639 9,915 0.4%
Other transactions 10,777,960 11.8% 882,144 9,529,121 10.2% 803,035 1,248,839 13.1% 10,539,528 11.1% 780,164 238,432 2.3%
Debt instruments: 10,511 0.0% 1,045 10,486 0.0% 1,003 25 0.2% 10,033 0.0% - 478 4.8%
- structured instruments - - - - - - - - - - - - -
- other debt instruments 10,511 0.0% 1,045 10,486 0.0% 1,003 25 0.2% 10,033 0.0% - 478 4.8%
Total loans and advances to customers 91,268,495 100.0% 8,724,942 92,887,969 100.0% 8,105,174 -1,619,474 -1.7% 95,333,181 100.0% 7,020,281 -4,064,686 -4.3%
30.6.2012
C%
of which
deteriorated
Changes A/CChanges A/B31.12.2012
B%
of which
deteriorated
30.6.2013
A%
of which
deteriorated
Composition of loans to customers
Figures in thousands of euro amount %
Current account overdrafts 12,100,894 13.3% 1,421,188 12,469,479 13.5% 1,396,389 -368,585 -3.0%
Reverse repurchase agreements 51,364 0.1% - 197,176 0.2% - -145,812 -74.0%
Mortgage loans and other medium to long-
term financing 53,506,027 58.6% 4,393,540 54,264,512 58.8% 4,200,990 -758,485 -1.4%
Credit cards, personal loans and salary-
backed loans 4,661,825 5.1% 489,222 4,840,336 5.3% 513,767 -178,511 -3.7%
Finance leases 7,671,205 8.4% 1,217,776 7,825,777 8.5% 1,216,225 -154,572 -2.0%
Factoring 2,488,709 2.7% 320,027 2,503,197 2.7% 307,377 -14,488 -0.6%
Other transactions 10,777,960 11.8% 882,144 10,153,638 11.0% 881,124 624,322 6.1%
Debt instruments: 10,511 0.0% 1,045 10,463 0.0% 1,004 48 0.5%
- structured instruments - - - - - - - -
- other debt instruments 10,511 0.0% 1,045 10,463 0.0% 1,004 48 0.5%
Total loans and advances to customers 91,268,495 100.0% 8,724,942 92,264,578 100.0% 8,516,876 -996,083 -1.1%
Changes A/D30.6.2013
A%
of which
deteriorated
31.3.2013
D%
of which
deteriorated
62
In detail:
• the progressive discontinuation of product company business with indirect distribution
networks and the consequent reduction in loans to non-captive customers, (-€1.3 billion
over twelve months, of which -€0.8 billion relating to the first half of 2013);
• the programme to reorganise lending processes in progress for some time for leasing
operations with, a change of focus at the same time onto the captive market (-€0.4 billion year-on-year, of which -€0.1 billion in the first half of 2013).
As concerns customer market segmentation, 49.1% of the consolidated portfolio at the end of
June consisted of loans to the retail market (49.7% in December and 49.3% in June 2012),
32.5% to the corporate market (31.8%, 32.2%) and 0.9% to the private banking market (0.9%,
0.8%), while the remaining 17.5% consisted of types of lending not included in the commercial banking portfolio such as leasing, factoring and UBI Banca lending other than those of the
former merged product companies (17.6%, 17.7%).
From the viewpoint of type of lending:
• mortgages and other medium to long-term lending fell to €53.5 billion (-€1.7 billion year-
on-year -€0.6 billion compared to December), which nevertheless confirmed it as the main
form of lending, accounting for 58.6%. of the total.
On the basis of management accounting figures for the network banks, Centrobanca and UBI Banca (as the manager of the remaining outstanding loans of B@nca 24-7 and a
survivor of the Centrobanca merger), gross performing residential mortgages amounted to
€23.6 billion in June, of which €21.5 billion disbursed to consumer households and €2.1 billion to businesses (a total of €24.2 billion in March 2013, of which €21.9 billion to
households and €2.3 billion to businesses and €24.5 billion in December 2012, of which
€22.2 billion to households and €2.3 billion to businesses);
• reverse repurchase agreements fell to €51 million (-€0.4 billion over twelve months), a reflection mainly of changes in specific business by UBI Banca with Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing house). The change
compared to December (-€0.6 billion) also incorporates the absence of Parent business with
a counterparty belonging to a banking group (-€0.2 billion), which had been commenced in
the third quarter of 2012;
• finance lease lending, relating almost totally to UBI Leasing, fell progressively to €7.7
billion, as a result of the action taken reported above (-€0.7 billion over twelve months, -
€0.2 billion compared to December);
• factoring loans, granted mainly by UBI Factor, remained more or less unchanged at €2.5
billion, the aggregate result of an increase of around €0.3 billion in the second half of 2012,
no longer present in subsequent months;
• the various types of consumer loans, which totalled €4.7 billion (-€0.8 billion year-on-year),
were affected by the rationalisation of business with non-captive customers. Over twelve months the reduction regarded both the former B@nca 24-7 loans contributed to UBI
Banca (personal loans, special purpose loans, credit cards, current account overdrafts and
other types of lending; -€0.6 billion) and the business contributed to Prestitalia (salary
backed; -€0.4 billion), compared to growth for the network banks (+€0.2 billion).
Consumer loans as a whole decreased by €0.4 billion in the first half of 2013, the aggregate result of a contraction in former B@nca 24-7 lending (-€0.3 billion) and Prestitalia
lending (-€0.2 billion) and a modest increase in network bank business (+€0.1 billion euro);
• other short-term forms of lending, which totalled €22.9 billion, decreased by approximately
€0.6 billion over twelve months (but were up by €0.5 billion since December). The year-on-
year change reflects a fall of €0.8 billion to €12.1 billion in current account overdrafts, only
partially offset by an increase of €0.2 billion to €10.8 billion in “other transactions” (loans
for advances, portfolio, import/export transactions, very short term lending, etc.). Furthermore, the latter type of lending increased substantially compared to December (up
by approximately €1.3 billion, of which +€0.3 billion connected with technical transactions
with the CCG), which more than compensated for a decrease in current account overdrafts
(-€0.8 billion).
From the viewpoint of maturities, the year-on-year contraction in the Group loan portfolio
affected both the medium to long-term component, amounting to €65.9 billion (-€3.1 billion, of
63
which -€1.3 billion compared to December) and accounting for 72.1% of the total and also the
short-term component, amounting to €25.4 billion (-€0.9 billion, of which -€0.3 billion in the first half of 2013).
As a result, amongst other things, of the different trends that affected the two items, the ratio of loans to funding was 94.7%, an increase compared to all the comparative periods (94% in
December 2012; 93.2% in June 2012).
Management accounting data on the distribution of loans by economic sector –
relating to the network
banks and the Parent only,
which account for 82.6% of
gross performing Group loans (82.4% in December) –
shows the following as at the
end of June:
• 94.5% of outstanding loans were destined to
manufacturing and
service companies and
consumer households,
which confirms the traditional attention paid
by the Group to local communities;
• the distribution by sector of performing
loans to non-financial companies and to
producer households confirmed that the
main sectors in receipt of loans were “other services destined for sale” and
“commerce, recovery and repair
services”, which partly due to their
heterogeneous nature, continued to
account for the largest percentage of total lending (23.7%), although slightly down compared to March 2013 (24.3%) and the end of 2012 (24%).
From the viewpoint of concentration, the table shows a further improvement, part of a positive
trend in progress now since the second half of 2011.
As concerns “large exposures”, only one position remained at the end of the first half totalling
€19.8 billion, attributable to the Ministry of the Treasury, mainly in
relation to investments in
government securities by the
Parent. This reduction in terms of
both the number and the amount compared to all the comparative periods reflects the absence of a position with the Cassa di Compensazione e Garanzia2, linked
to activities by the Parent, in relation to a more precise interpretation of supervisory
regulations.
As a consequence of the absence of that position and also of the application of a weighting
factor of zero to business with government, the actual exposure of the Group to risk after the weightings was therefore nil (a threshold limit of 25% of consolidated regulatory capital is set
for banking groups).
A summary of the geographical distribution of lending in Italy is given in the table
“geographical distribution of loans to customers by region of location of the branch”.
2 In detail: €5.6 billion in March 2013, €4.6 billion in December 2012, €6 billion in September 2012, €8.3 billion in June 2012.
30.6.2013 31.3.2013 31.12.2012
Manufacturing and service companies (non-financial companies and producer households)55.1% 55.4% 55.3%
of which: other services destined for sale 14.9% 15.2% 15.1%
Commerce, recovery and repair services 8.8% 9.1% 8.9%
Construction and public works (*) 7.7% 7.8% 8.0%
Energy products 3.4% 3.2% 3.3%
Agricultural, forestry and fishery products 2.1% 2.1% 2.1%
Metal products, excluding machines and means of transport 2.1% 2.0% 2.0%
Foodstuffs, beverages and tobacco products 2.0% 2.0% 1.9%
Hotels and restaurants 1.8% 1.9% 1.8%
Agricultural and industrial machinery 1.4% 1.3% 1.3%
Textiles, leather and footwear, clothing 1.4% 1.3% 1.3%
Consumer households 39.4% 39.3% 39.4%
Financial companies 3.0% 2.6% 2.5%
Public administrations 1.0% 1.1% 1.1%
Other (not-for-profit institutions and the rest of the world) 1.5% 1.6% 1.7%
Total 100.0% 100.0% 100.0%
Distribution of loans by economic sector (Bank of Italy classification)
Management accounting figures for performing loans for the network banks and UBI Banca (including
the former Centrobanca)
(*) “Construction and public w orks” refers to category 66. ATECOs [Classif ication of economic activities] are not considered (item
L and item F – property and construction activities) since they are included in the other categories.
30.6.2013 31.3.2013 31.12.2012 30.9.2012 30.6.2012
Largest 10 2.7% 2.9% 2.9% 3.0% 3.0%
Largest 20 4.5% 4.7% 4.9% 5.1% 5.0%
Largest 30 5.8% 6.0% 6.2% 6.4% 6.5%
Largest 40 6.8% 7.1% 7.2% 7.5% 7.5%
Largest 50 7.7% 7.9% 8.0% 8.3% 8.3%
Customers or
Groups
Concentration of risk (largest customers or groups as a percentage of total loans and guarantees)
Large exposures
Figures in thousands of euro30.6.2013 31.3.2013 31.12.2012 30.9.2012 30.6.2012
Number of positions 1 2 2 2 2
Exposure 19,813,641 24,992,651 22,599,040 22,349,704 25,774,877
Positions at risk - 62,418 141,175 275,779 169,548
64
At the end of June the total share of loans to northern regions amounted to 82.1% of the total, (of which 78% to the North-West), slightly down over twelve months, while that granted to central regions was 10%. The remaining 7.9% was to southern regions. As concerns Lombardy in particular, a downward trend is in progress which reflects that for Parent loans, due to both the natural reduction of the remaining consumer loans inherited from B@nca 24-7 and to a reduction in loans to Group companies. This tendency in the first half of 2013 was partially offset by an increase in lending business in Piedmont, Latium and some regions of the North-East.
−* * * In a macroeconomic context characterised by strong concerns over the rationing of loans to the real economy, the UBI Banca Group is continuing
to promote initiatives to support SMEs operating on its local markets. The further actions taken in connection with the T2 Territorio per il Territorio (C2 the Community for
the Community) project form part of these initiatives. They involve the acquisition of funding
through the issuance of special bonds to be put back into circulation by making credit lines available under competitive conditions destined to support communities in the Group's local markets. The following initiatives were undertaken by the Parent or by the network banks during the course of the first half of 2013 in co-operation with local networks of organisations and associations (consisting for example of trade associations):
• an issuance of instruments for €5 million by BRE and the subsequent creation of a loan pool of €10 million for the benefit of member companies of the Cuneo Confartigianato (artisans’ association);
• the issuance of two instruments for a total of €10 million by BPB and the subsequent creation of a loan pool of €20 million for use both by businesses registered with the Lecco Chamber of Commerce and by member companies of the main local trade associations and also by member companies of the Como Confindustria (confederation of industry) and the Como API (association of small to medium-size enterprises);
• an issuance of bonds, listed on the MOT (electronic bond market), for a total of €20 million by UBI Banca – placed by BPCI, BPB, Banco di Brescia, BRE, BVC, BPA and Banca Carime – with the subsequent creation of a loan pool of up to €40 million for the benefit of companies and institutions who are members of or linked to Confapi (an SME association).
As at the 30th June 2013, €30.4 million of loans had been granted from a total available loan pool of €149 million.
Again in the reporting period, the banks in the Group paid particular attention to relations with guarantee bodies and trade associations, which represent an important link in relations with local economies. With a view to facilitating access to credit by SMEs in the current difficult economic environment, the use of public sector instruments to mitigate credit risk continued at the same time. These included the Guarantee Fund
for SMEs (pursuant to Law No. 662/1996) and the fund managed by the SGFA (Fund Management Company for the agricultural and food sectors) for farms. New loans amounted to €644 million in the first half (+6.1% compared to the same period in 2012) and related to 9,346 transactions (+5.9%), with total outstanding loans amounting to €3.6 billion, of which €290 million relating to short-term finance.
Finally, as concerns initiatives in co-operation with the European Investment Bank (EIB), the UBI Banca Group fully disbursed the second tranche of the “EIB covered bond” loan of €250 million in the reporting period. It was subscribed on the 11th November 2011 and destined to finance businesses (SMEs with fewer than 250 employees or Mid Caps with employees of between 250 and 2,999 employees) operating in the industrial, agricultural, tourism and service sectors, in order to implement investment projects in Italy and
Percentage of total 30.6.2013 31.12.2012 30.6.2012
Lombardy 68.29% 69.12% 69.57%
Piedmont 6.79% 6.24% 6.26%
Latium 5.16% 4.98% 4.80%
Marches 3.95% 3.95% 3.87%
Liguria 2.89% 2.92% 2.95%
Campania 2.46% 2.42% 2.37%
Emilia Romagna 2.22% 2.14% 2.13%
Apulia 2.17% 2.24% 2.11%
Calabria 1.95% 1.96% 1.92%
Veneto 1.58% 1.53% 1.53%
Umbria 0.70% 0.69% 0.67%
Abruzzo 0.64% 0.64% 0.64%
Basilicata 0.43% 0.44% 0.44%
Friuli Venezia Giulia 0.28% 0.25% 0.27%
Molise 0.24% 0.24% 0.23%
Tuscany 0.22% 0.22% 0.22%
Valle d'Aosta 0.03% 0.02% 0.02%
Trentino Alto Adige 0.00% 0.00% 0.00%
Total 100.00% 100.00% 100.00%
North 82.1% 82.2% 82.7% - North West 78.0% 78.3% 78.8% - North East 4.1% 3.9% 3.9%
Central 10.0% 9.9% 9.6% South 7.9% 7.9% 7.7%
(*) The aggregates relate to banks only.
Geographical distribution of loans to customers by region of
location of the branch (*)
65
the European Union. The loan pool had been entirely dispersed as at the 30th June 2013, distributed among around 250 projects. At the same time use of the €250 million loan pool commenced, subscribed on 28th November 2012 (known as the “Global Loan”). The purpose of this loan pool is to finance the medium to long-term working capital requirements and investments of SMEs, Mid Caps and private sector businesses with more than 3,000 employees. At the end of the first half, approximately 50 outstanding loans existed amounting to €51 million.
As at 30th June, projects had been financed for a total of €34 million as part of activities relating to the four
loan pools3, which totalled €130 million, subscribed by UBI Banca with the EIB on 15th October 2012 and in operation since January 2013. In view of the positive collaboration that has been established, the Group is currently preparing further new initiatives with the EIB for companies, and these should be operational in the second half of 2013. In detail: a loan pool of €100 million for the purpose of financing corporate customers to implement projects in the energy efficiency and renewable energy sectors and a loan pool of €100 million for the purpose of financing the investments of “Mid Cap” companies.
Risk
The persistent period of recession experienced by the Italian economy is continuing to be reflected in credit quality, which is fuelling outstanding gross deteriorated loans, although to a
lesser degree than in the second quarter of 2013 compared to the three previous quarters. At
the end of June they had reached €11.8 billion.
The total change year-on-year was an increase of €2.39 billion (+25.2%) – although only +€0.88 billion related to the first half of 2013. It mainly related to impaired loans (+€1.50
billion, of which +€0.52 billion in the first half), but also to non-performing loans (+€0.87
billion, of which +€0.44 billion in the first half) and exposures past due and in arrears (+€0.25
billion, but only +€3 million in the first half), while restructured loans decreased (-€0.23
billion, of which -€0.08 billion in the first half).
Growth in gross deteriorated loans between April and June was only €0.38 billion, fuelled mainly by non-performing loans (+€0.30 billion), while growth in impaired loans was marginal
(+€0.06 billion).
The changes in the different categories of gross deteriorated loans were affected by the
following:
• internal reclassifications of some significant positions which were already recognised among
deteriorated loans;
• disposals of unsecured non-performing loans, almost fully written-down, carried out in
2013 by:
- Centrobanca in the first quarter (€0.7 million);
- the network banks in the first and second quarter (€13.4 million and €1.8 million respectively);
• the classification as impaired of positions relating to salary and pension-backed loans
belonging to the former B@nca 24-7, now Prestitalia, in relation to the insourcing of loan
processing, as a consequence of the discontinuation of indirect distribution networks. As already reported, since 2011 the UBI Banca Group has progressively discontinued indirect distribution channels for the distribution of salary-backed loans covered by a “deducted for non-payment”, by revoking the mandate to operate not only from Ktesios, but also from other finance
3 In detail:
a “Mid Cap IV” loan pool, amounting to €50 million, for firms with between a minimum of 250 and a maximum of 2,999 employees (Mid Cap) to finance any type of project in agriculture, industry and services for the purchase/renewal of tangible assets, investments in intangible assets and support for working capital;
a “Business Network” loan pool, amounting to €25 million, to finance initiatives in industry, services and the tourist sector by SMEs and Mid Caps belonging to a “business network”;
an “Industry 2015” loan pool, amounting to €30 million, for firms of all types and sizes operating in agriculture, industry and services for expenditure programmes for research, development and innovation approved as admissible for “Industrial Innovation Projects” (Industria 2015) implemented by the Ministry for Economic Growth;
an “Emilia Romagna Earthquake Victims” loan pool, amounting to €25 million, for public authorities and/or private sector companies hit by the earthquake last May located in Emilia Romagna or the Lombard and Venetian provinces affected by the earthquake.
66
companies. Therefore, the management of salary-backed lending operations has been progressively insourced within the Group at the specialist company Prestitalia Spa. This company not only carries out ordinary collection activities, but also the direct recovery of credit, enforcing compulsory legal guarantees where applicable and it also classifies positions, where necessary, in the most appropriate categories of deteriorated loan;
• the classification as impaired of positions at the Parent relating to the merged B@nca 24-7,
as a result of the extension of automatic classification procedures by the Group IT system
to include these loans;
• the classification as impaired from performing status of a series of positions of significant
amount in the first half of 2013.
In view of those same factors, at the end of June net deteriorated loans had risen to €8.7
billion, an increase over twelve months of €1.70 billion (+24.3%), of which just +€0.62 billion
relating to the first six months of 2013.
Loans and advances to customers as at 30th June 2013
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (12.48%) 11,839,996 3,115,054 (9.56%) 8,724,942 26.31%
- Non-performing loans (5.88%) 5,580,133 2,331,413 (3.56%) 3,248,720 41.78%
- Impaired loans (4.90%) 4,648,023 654,076 (4.38%) 3,993,947 14.07%
- Restructured loans (0.73%) 690,645 99,815 (0.65%) 590,830 14.45%
- Past due loans (0.97%) 921,195 29,750 (0.97%) 891,445 3.23%
Performing loans (87.52%) 83,011,572 468,019 (90.44%) 82,543,553 0.56%
Total loans and advances to customers 94,851,568 3,583,073 91,268,495 3.78%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st March 2013
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (11.98%) 11,456,762 2,939,886 (9.23%) 8,516,876 25.66%
- Non-performing loans (5.52%) 5,280,408 2,233,566 (3.30%) 3,046,842 42.30%
- Impaired loans (4.79%) 4,584,063 582,924 (4.34%) 4,001,139 12.72%
- Restructured loans (0.72%) 688,179 94,708 (0.64%) 593,471 13.76%
- Past due loans (0.95%) 904,112 28,688 (0.95%) 875,424 3.17%
Performing loans (88.02%) 84,206,657 458,955 (90.77%) 83,747,702 0.55%
Total loans and advances to customers 95,663,419 3,398,841 92,264,578 3.55%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st December 2012
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (11.39%) 10,958,381 2,853,207 (8.73%) 8,105,174 26.04%
- Non-performing loans (5.34%) 5,142,308 2,190,369 (3.18%) 2,951,939 42.60%
- Impaired loans (4.29%) 4,123,537 520,995 (3.88%) 3,602,542 12.63%
- Restructured loans (0.80%) 773,934 114,833 (0.71%) 659,101 14.84%
- Past due loans (0.96%) 918,602 27,010 (0.96%) 891,592 2.94%
Performing loans (88.61%) 85,253,156 470,361 (91.27%) 84,782,795 0.55%
Total loans and advances to customers 96,211,537 3,323,568 92,887,969 3.45%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 30th June 2012
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (9.62%) 9,453,515 2,433,234 (7.36%) 7,020,281 25.74%
- Non-performing loans (4.79%) 4,705,947 1,954,950 (2.89%) 2,750,997 41.54%
- Impaired loans (3.21%) 3,151,224 341,759 (2.95%) 2,809,465 10.85%
- Restructured loans (0.94%) 922,601 111,508 (0.85%) 811,093 12.09%
- Past due loans (0.68%) 673,743 25,017 (0.67%) 648,726 3.71%
Performing loans (90.38%) 88,819,661 506,761 (92.64%) 88,312,900 0.57%
Total loans and advances to customers 98,273,176 2,939,995 95,333,181 2.99%
The item as a percentage of the total is given in brackets.
(*) Coverage is calculated as the ratio of impairment losses to gross exposure. Impairment losses and gross exposures are given net of w rite-offs of positions subject to
bankruptcy proceedings.
Gross exposure Carrying amount
Gross exposure Carrying amount
Gross exposure Carrying amount
Gross exposure Carrying amount
67
Despite the increased percentage of positions backed by collateral – written-down by a smaller
amount, due amongst other things to the prudent loan to value (LTV) ratios of residential mortgages to individuals granted by the Group – at the end of June total coverage of 26.31%
had increased slightly compared to all the comparative periods (25.66% in March 2013;
26.04% and 25.74% in December and June 2012, respectively), due mainly to greater
impairment losses recognised in the fourth quarter of 2012 and the appearance from
performing loans of some heavily written down positions in the first half of 2013.
Coverage for performing loans, on the other hand, was generally unchanged at 0.56% (0.55%
in March 2013 and December 2012; 0.57% in June 2012).
In terms of the type of loan, as shown in the table, “Composition of loans to customers”, over
half of the annual growth in net deteriorated loans regarded the item “mortgage loans and
other medium to long-term loans” backed by collateral, which result automatically in a lower
level of coverage, while 21% relates to non-banking financial business and 10% to consumer credit lending, partly as a result of the reclassification of salary-backed loans already
mentioned.
NON-PERFORMING LOANS
Gross non-performing loans increased over twelve months from €4.71 billion to €5.58 billion,
up by €0.87 billion4, of which +€0.14 billion relating to the first quarter of 2013 and +€0.30
billion to second. The trend in the latter period was, however, affected by the reclassification
into non-performing loans of the IDI position relating to UBI Factor, amounting to €153
million, which had been classified within impaired loans in the fourth quarter of 2012.
In percentage terms, the change in non-performing loans was +18.6% year-on-year – compared with +22.1% for lending by banks nationally to the private sector – and +8.5%
compared to December (+5.7% since March), against +10.5% (+5.4% since March) for the
sector.
The changes reported above benefited from disposals of unsecured non-performing loans, almost fully written-down, which occurred in the first half of 2013 totalling €15.9 million (€15.2 million relating to the network banks, of which €13.4 million in the first quarter, and €0.7 million to Centrobanca).
In addition to UBI Factor, the year-on-year change in the total is attributable to the network
banks and to UBI Leasing, while compared to December, a little more than a third of the increase relates to the network banks.
Gross non-performing loans backed by collateral rose over twelve months to €3.4 billion (+€0.4
billion, + 14.6%), but they fell as a percentage of the total to 61.3% (63.8% in March 2013;
63.6% and 63.4% in December and June 2012 respectively), mainly as a result of the
appearance of the unsecured IDI position already mentioned. Net of that component, the percentage of secured loans would be 63%.
On the other hand, the change in gross non-performing loans backed by collateral in the first
half was +€0.1 billion (+4.5%).
An analysis of migrations over the first six months of the year compared to the same period in
2012, shows a two thirds fall in new classifications from performing loans, due partly to monitoring action put in place, and an increase by approximately €100 million in transfers
from other categories of deteriorated exposures which, however, include €153 million relating
to IDI. On the other hand, there has been a significant increase in write-offs accompanied by a
substantial absence of profits on disposals and transfers into performing loans.
Net non-performing loans rose from €2.75 billion to €3.25 billion, an increase of €0.50 billion,
of which +€0.09 billion relating to the first quarter of 2013 and +€0.20 billion to the second5.
In percentage terms, the year-on-year change of +18.1%, compares with +30% recorded by
banks nationally. The change for the UBI Banca Group compared to the end of December was
4 In the fourth quarter of 2012, five new positions of significant amount were classified in this category for a total of €102 million.
These included two which totalled €67 million – one of which reclassified out of impaired loans – relating to non-banking financial business.
5 The change compared to the second quarter of 2013 includes €153 million for the IDI position.
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+10.1% (+6.6% since the end of March), against +9.1% for the sector nationally (+10% since
the end of March). The appearance of the IDI position brought the percentage of net non-performing loans with
no coverage in terms of either collateral or personal guarantee to 14.6% at the end of June
(9.5% in December 2012; 9.9% in June 2012).
The combined effect of the trends reported above and of the reduction in the overall loan portfolio caused the ratio of non-performing loans to loans to rise over twelve months from
4.79% to 5.88% in gross terms (5.34% in December) and from 2.89% to 3.56% net of
impairment losses (3.18%). Despite this, in terms of quality the Group continues to outperform
the average for banks nationally, for which the ratios at the end of the first half were 8.17% for
gross non-performing loans to the private sector and 3.75% for net non-performing loans
(7.24% and 3.36% in December).
Coverage for non-perorming loans increased slightly year-on-year from 41.54% to 41.78%, but
fell compared to 42.60% in December, principally due to the following:
- the classification into non-performing loans in April of the IDI position, which had a
negative impact of 118 basis points;
- disposals of unsecured non-performing loans amounting to €15.9 million, almost fully
written down, which had a negative impact of 15 basis points. Net of these impacts, coverage for non-performing loans would be 43.11%, an increase
compared to December.
If positions written-off to the income statement relating to creditor actions still in progress are
also considered, coverage would in reality be 56.17% (57.63% in December 2012; 57.33% in June 2012).
Finally at the end of the first half, coverage for non-performing loans not backed by collateral
considered gross of those write-offs was 72.74%6 (77.18% in December 2012; 76.75% in June
2012).
IDI (ISTITUTO DERMOPATICO DELL’IMMACOLATA) – PROVINCIA ITALIANA DELLA CONGREGAZIONE DEI FIGLI
DELL’IMMACOLATA CONCEZIONE This is a church institution, a “religious congregation”, which carries out medical, scholastic and welfare activities both in Italy and internationally. It carries out its medical activities mainly through two organisations in Rome, one of which is IDI.
At the end of 2012 this position – relating to UBI Factor and examined by the Bank of Italy in its inspection conducted into this factoring company – was classified as impaired following its application to the courts for a “blank” arrangement with creditors. Subsequently, as a result of the admission of the counterparty to the extraordinary administration procedures, the position was transferred to non-performing status in April 2013. This classification was performed in compliance with internal UBI Banca regulations and completely independently of forecasts of losses. The gross exposure – amounting to €153 million7 – is a result of advances on receivables from the Region of Latium and the local health authorities that it controls, sold partly with recourse and partly without recourse. It is backed by total receivables sold amounting to €328 million. It is precisely in consideration of the amount of the receivables sold and the results emerging from the proceedings in progress (the court-appointed commissioner has already acknowledged that UBI Factor is owed €121 million in capital and interest), that it is considered that the advances on the receivables can be fully recovered.
IMPAIRED LOANS Gross impaired loans rose over twelve months from €3.15 billion to €4.65 billion, an increase
of €1.50 billion (+47.5%), of which +€0.46 billion in the first quarter of 2013 and +€0.06 billion
in the second8.
This change was also affected by some short-term technical factors:
• the classification of positions relating to Prestitalia (former B@nca 24-7) salary and pension backed loans in relation to the insourcing process already mentioned, as a consequence of
6 Net of the IDI position coverage would be 75.6%. 7 Net of a portion of €4 million with final payment without recourse.
8 The trend for this category benefited in the second quarter of 2013, amongst other things, from the reclassification into non-performing loans of the IDI position amounting to €153 million which had been transferred into impaired loans in the fourth quarter
of 2012.
69
the discontinuation of indirect distribution networks (a total of €354 million, of which €288
million relating to the second half of 2012 and €66 million to the first half of 2013)9;
• the classification in this category of former B@nca 24-7 positions, as a result of automatic
classification procedures carried out by the Group IT system (approximately €130 million in
the first half of 2013 after €134 million in the second half of 2012);
• the new classification in this category in the first half of the Pescanova position amounting
to approximately €79 million;
• the new classification in this category over twelve months of a series of significant positions transferred from other categories of deteriorated loans (from exposures past due and/or in
arrears and from restructured loans). We report the following in particular: the new
classification in the fourth quarter of 2012 of the Carlo Tassara position amounting to €152
million, reclassified out of restructured loans; further positions in the first half of 2013 for a
substantial amount of approximately €100 million, previously reported within restructured loans;
• a series of significant new classifications out of the performing category, carried out in the
first six months of 2013, in view of the difficult economic environment.
In consideration of the above, amongst other things, both the year-on-year and the half-year
performance of this category was driven mainly by the network banks, Prestitalia and UBI Banca (for the consumer finance activities of the former B@nca 24-7 and as a survivor of the
Centrobanca merger). The total for UBI Factor contracted significantly in the first half of 2013,
having benefited from the transfer to non-performing status of the IDI position already
mentioned.
Gross impaired loans backed by collateral increased by over €1 billion year-on-year to €3.1
billion (+51.3%) and came to account for 66.1% of the total, a significant rise compared to
62.7% in March (63.3% in December 2012 and 64.4% in June 2012), due partly to the
absence of IDI.
An analysis of migrations in the first half compared to the same period of the year before
shows a fall of approximately 10% in new classifications from performing loans accompanied by a strong increase in new classifications from other categories of deteriorated loans – mainly
from exposures past due and/or in arrears, but also from restructured loans – which more
than doubled. At the same time transfers into other categories of deteriorated loans increased
by over 20% (mainly to non-performing loans, but also to restructured loans), while payments
received grew by over 50%, particularly strongly in the second quarter. Net impaired loans rose from €2.81 billion to €3.99 billion, an increase of €1.18 billion
(+42.2%), of which +€0.40 billion relating to the first quarter of 2013 and -€7.2 million to the
second.
At the end of June coverage had risen to 14.07% from 10.85% twelve months before (12.63%
in December), due to increased impairment losses, but also to: - new classifications during the period of positions coming from performing loans or from
restructured loans, with high levels of coverage, such as Tassara;
- the reclassification into non-performing loans of the IDI position in the second quarter of
2013.
Finally, coverage for impaired loans not backed by collateral increased to 21.99% from 17.01%
in June 2012 (20.18% in December)
PESCANOVA The Pescanova Group, established in 1960 and composed of approximately 80 companies operating in 21 countries with activities ranging from fishing – by means of approximately 130 factory ships that it owns which fish, process and freeze directly on board – to the preparation and marketing of frozen foods
9 Although this form of lending is different from loans backed by collateral, it does provide a significant degree of protection, due both
to the transfer to the bank of the amounts payable to the beneficiaries of the loans from their employers and to the compulsory use
of an insurance policy to cover the risks of job-loss or premature death.
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throughout Europe. The Parent, Pescanova Sa, was listed on the Madrid stock exchange (the listing is now suspended). The group operates internationally with fishing licences that it owns or holds under long-term concessions (which amongst other things makes the entrance of new competitors into the sector extremely difficult). Normally, companies which hold licences are of mixed ownership – partly owned also by the licensing countries – but with corporate management maintained under the control of the companies in the Pescanova Group. Pescanova Sa’s difficulties were officially announced on 1st March 2013 with a request for the application of article 5 bis of the Spanish Bankruptcy Law which allows a maximum period of three months during
which creditors may not take any action against the company and negotiations must be conducted to renegotiate debt. As these negotiations were unsuccessful, on 15th April 2013 the company applied for admission to “Concurso Voluntario” proceedings under Spanish law similar to ”concordato preventivo in continuità” (arrangement with creditors on a going concern basis) in Italian law. The application was
approved on 25th April 2013 and led to Administraciòn concursal (receivership administration)
appointments (which included Deloitte, through its partners) and the suspension at the same time of the entire Pescanova Sa board of directors. Standstill agreements between companies in the Pescanova Group and banks are currently being signed. In the meantime a subsidiary (Pescafina Sa) has applied for (and obtained) admission to Concurso Voluntario (voluntary arrangement with creditors) proceedings.
The Pescanova Group has always been one of the main customers of UBI Banca International’s Madrid branch and until that time the banking relationship had always been carried out in a proper manner, with precise observance of due dates and commitments.
Following the ascertainment of irregularities in sales of receivables made by Pescanova and partly by Pescafresca (amounts collected directly on invoices and not used to pay-off advances obtained, or the presentation of irregular invoices), it became clear that the debtors relating to the invoices sold would no longer pay these debts and that what until then had been considered a secondary level risk had in fact been transformed into a genuine financial risk regarding the seller of the receivables. An agreement was signed on 31st May 2013 in relation to this between UBI Banca International Lux and the Pescanova Group (Acuerdo de novacion: the signatory of the agreement for Pescanova was the concursal administrator). While on the one hand this guarantees the operational continuity of this fishing
group – by the maintenance by UBI Lux of an operating credit line of €42.76 million at the service of factoring facilities for Pescanova and its trading subsidiaries10 – on the other hand it safeguards the UBI Banca Group’s credit interests by guaranteeing gradual repayment of the former second level exposure (€42.1 million gross) over a period of 7 years.
The table summarises the UBI Banca Group exposure to the Pescanova Group, which remains largely unchanged at the date of this report. As can be seen, the actual first level exposure, the real “Pescanova risk”, totals €89.2 million gross and €67.2 million net of impairment losses. These amounts are very different from the sums circulating in the media at the end of April when the Pescanova debt was first officially announced, because the figures published included second level exposures with credit risk for exposures NOT to Pescanova, but to the debtors relating to the receivables sold. The write-downs totalled €22 million, of which €11.2 million was recognised through profit and loss in the first quarter and the remaining part in the second quarter. In detail:
10 Pescanova Alimentacion, Pescafresca, Fricatamar and Pescafina Bacalao
Exposure to the Pescanova Group
% Amount
Pool quota 8,767 50% 4,384 4,384 impaired
Confirmation on Pescanova trade payables 35,188 40% 14,075 21,113 impaired
Factoring advances without recourse - Pescanova 35,274 10% 3,536 31,738 impaired
Factoring advances without recourse - Pescafresca 6,846 - - 6,846 performing
Photovoltaic leasing 1,453 - - 1,453 performing
Mortgage on warehouse (LTV 45%) 1,450 - - 1,450 performing
Interest rate derivative on mortgage 237 - - 237 performing
Total 1st level exposures 89,215 - 21,995 67,220
Factoring advances without recourse, Notified (mass retail and trading
companies) 36,088 - - 36,088 performing
Total 2nd level exposures (no Pescanova risk) 36,088 - - 36,088
General total 125,303 21,995 103,308
Type of instrumentImpairment lossesGross
exposureNet exposure Classification
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- the pool quota relates to a syndicated loan repayable in instalments originally for €75 million, maturing
in July 2016, in which UBI Banca International Lux had participated for an original pro rata sum of €10 million. The impairment loss recognised takes account of the purely financial nature of the exposure, which may be considered in the distribution plan;
- the credit confirmations relate to operations on trade payables to Pescanova Sa suppliers, with a
maximum maturity of 240 days. The impairment loss recognised takes into account the possibility of recoverability on the basis of current knowledge;
- the total exposure resulting from advances on irregular invoices now entirely past due (which before
discovery of their irregularity were considered second level risks) has been separated into the part relating to Pescanova, classified as impaired and written down by 10% on the basis of a specific forecast of repayment established by the agreement of 31st May 2013 and the part relating to Pescafresca, maintained as a performing loan because on the basis of that same agreement, the company has agreed to quickly define an accelerated repayment schedule for that exposure;
- exposures for photovoltaic leasing, a mortgage and a derivative, concluded in Italy by UBI Leasing and
Banca Popolare Commercio e Industria, are towards Ittinova Srl. These are being maintained as performing positions on the basis of the regular repayments (even instalments as at end of June 2013 had been paid);
- the second level risk relates to advances, of which 95% granted by UBI Banca International Lux on
receivables sold without recourse, notified and due from favourably assessed debtors (maximum duration 90 days) within the context of the €42.76 million credit line confirmed with the Acuerdo de novacion. The receivables sold are also insured.
RESTRUCTURED LOANS
As opposed to non-performing loans and impaired loans, gross restructured loans decreased
year-on-year from €922.6 million to €690.6 million, a fall of €232 million, of which -€85.8
million relating to the first quarter of 2013 and +€2.5 million to the second.
The year-on-year change – mainly attributable to the network banks, UBI Banca and UBI
Leasing – was affected by reclassifications into impaired loans which involved the Tassara position (€152 million) in the fourth quarter of 2012 and a further series of positions for
approximately €105 million, four of which of significant amounts, in the first half of 2013.
Various restructuring agreements were also signed in the first three months of 2013 (€108
million), some of which relating to substantial positions.
An analysis of migrations occurring in the first six months of the year shows an appreciable
increase compared to the same period of the year before in transfers to other categories of
deteriorated loans and to impaired loans in particular, which more than tripled. This
tendency, which was particularly strong in the first quarter of 2013, was associated with a
contraction in payments received and a virtual absence of transfers to performing status. Coverage for restructured loans was 14.45%, unchanged compared to December (14.84%), but
up from 12.09% in June 2012, due to the impact of the disappearance of positions written
down to a lesser extent, including Tassara, and the appearance of positions written-down
more on average.
EXPOSURES PAST DUE AND/OR IN ARREARS Gross exposures past due and in arrears rose from €673.7 million to €921.2 million, an
increase of €247.5 million (+36.7%), relating almost entirely to the third quarter of 2012
(+€312.1 million), followed by two reductions (-€67.2 million in the fourth quarter of 2012 and
-€14.5 million in the first quarter of 2013) and a modest increase in the second quarter of
2013 (+€17.1 million).
An analysis of migrations in the first half of 2013 shows the following compared with the same
period of 2012:
• an increase of 45% in new classifications from performing loans in relation to: the
extensions to moratoriums (past due repayments waiting for extensions); extension of
automatic classification procedures by the Group IT system to include loans of the former
B@nca 24-7, now merged into the Parent; the impacts already mentioned of the insourcing process in progress for Prestialia loans;
72
• the twofold increase in reclassifications into the performing category, which confirms the
high degree of turnover in this category, due to the automatic nature of the classification procedures;
• a significant percentage increase in transfers to other categories of deteriorated loan,
mainly to impaired loans.
Coverage of 3.23% appears to be falling compared to June 2012 (3.71%), but is recovering
progressively compared to December (2.94%).
Loans to customers: changes in gross deteriorated exposures in the first half of 2013
Figures in thousands of euro
Initial gross exposure as at 1st January 2013 5,142,308 4,123,537 773,934 918,602
Increases 794,561 1,705,997 150,749 1,253,582
transfers from performing exposures 50,445 739,535 8,944 1,236,317
transfers from other classes of deteriorated exposures 664,841 867,611 106,740 2,649
other increases 79,275 98,851 35,065 14,616
Decreases -356,736 -1,181,511 -234,038 -1,250,989
transfers into performing exposures -1,702 -265,627 -3,707 -326,487
write-offs -171,824 -550 -4,829 -32
payments received -148,378 -228,058 -44,631 -47,139
disposals -4,508 - - -
transfers to other classes of deteriorated exposure -5,265 -655,746 -180,425 -800,405
other decreases -25,059 -31,530 -446 -76,926
Final gross exposure as at 30th June 2013 5,580,133 4,648,023 690,645 921,195
Loans to customers: changes in deteriorated gross exposures in 2012
Figures in thousands of euro
Initial gross exposure as at 1st January 2012 4,377,325 2,844,167 933,786 434,138
Increases 1,575,306 3,396,208 283,980 2,122,264
transfers from performing exposures 312,131 1,963,721 19,323 2,011,486
transfers from other classes of deteriorated exposures 1,086,415 1,069,543 192,597 7,336
other increases 176,760 362,944 72,060 103,442
Decreases -810,323 -2,116,838 -443,832 -1,637,800
transfers into performing exposures -66,429 -471,808 -54,211 -379,038
write-offs -287,904 -31,880 -2,423 -
payments received -282,159 -365,676 -102,330 -188,455
disposals -106,172 - -4,215 -
transfers to other classes of deteriorated exposure -16,432 -1,056,104 -278,076 -1,005,280
other decreases -51,227 -191,370 -2,577 -65,027
Final gross exposure as at 31st December 2012 5,142,308 4,123,537 773,934 918,602
Loans to customers: changes in gross deteriorated exposures in the first half of 2012
Figures in thousands of euro
Initial gross exposure as at 1st January 2012 4,377,325 2,844,167 933,786 434,138
Increases 764,864 1,277,259 151,125 931,442
transfers from performing exposures 149,399 818,349 9,098 854,484
transfers from other classes of deteriorated exposures 567,747 373,452 103,913 3,991
other increases 47,718 85,458 38,114 72,967
Decreases -436,242 -970,202 -162,310 -691,837
transfers into performing exposures -40,986 -258,815 -32,057 -160,446
write-offs -127,186 -13,072 -418 -
payments received -144,163 -150,477 -71,579 -84,282
disposals -104,327 - - -
transfers to other classes of deteriorated exposure -8,861 -538,972 -57,183 -444,087
other decreases -10,719 -8,866 -1,073 -3,022
Final gross exposure as at 30th June 2012 4,705,947 3,151,224 922,601 673,743
Non-performing
loansImpaired loans
Restructured
exposures
Past-due
exposures
Non-performing
loansImpaired loans
Restructured
exposures
Past-due
exposures
Non-performing
loansImpaired loans
Restructured
exposures
Past-due
exposures
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“Anti Crisis” measures to support small to medium-size enterprises and families Again in the first half of 2013, the banks in the Group participated in various initiatives organised at national and local level and took action to support families and businesses in their respective local markets, in co-operation with public institutions (chambers of commerce, regional and provincial
governments) and guarantee bodies.
“New measures for Credit to Small and Medium-Size Enterprises” Accord Activities continued under the “New measures for Credit to Small to Medium-size Enterprises” Accord signed on 28th February 2012 by the Italian Banking Association, the Ministry of the Economy and Finance, the Ministry of Economic Development and by other business associations. This is designed to make adequate financial resources available to SMEs which, although subject to pressures, nevertheless present good operating prospects. The measures provided for under the Accord are as follows:
deferments for a maximum of 12 months for the capital repayments on mortgages and unsecured loans and the deferment for a maximum of 12 months and 6 months for the repayment of the capital portion implicit in “property” or “equipment” lease instalments respectively;
extension of the terms of mortgages and unsecured loans for a maximum period of 100% of the
remaining duration of the repayment schedule and in any case not longer than 2 years for unsecured loans and 3 years for secured loans;
extension of the maturities of short-term loans to 270 days to support cash requirements for advances on amounts that are certain, liquid and payable in cash and for a maximum of 120 days of the
maturities on short-term agricultural loans;
operations designed to promote the recovery and development of activities with an amount proportional to increases in owners’ funds performed by businesses.
SMEs operating in Italy and belonging to all sectors that are “performing” on the date on which the application is filed are eligible for the concessions granted under the agreement. The deadline set for the submission of applications, which was originally 31st December 2012, has been extended several times, with the last set at 30th September 2013.
Over 7,570 applications had been received as at 30th June 2013 by the network banks of the Group and by UBI Leasing to benefit from the intervention provided under the Accord, relating basically to medium to long-term loans for a total remaining debt of approximately €3 billion.
“Italy Investment Projects” and “Public Administration Receivables” Loan Pool Again under the “New measures for Credit to SMEs” Accord, UBI Banca has adhered to two memoranda – signed on 22nd May 2012 by the same signatories – designed to assist with financing for the investment projects of SMEs and to facilitate the payment of amounts due to them from public administrations. By signing those memoranda, the Italian Banking Association has promoted the industry-wide establishment of two specific loan pools amounting to €10 billion each.
• the first entitled “Italy Investment Projects” is designed to support SME projects to invest in operating assets;
• the second entitled “Public Administration Receivables” is designed to unlock receivables due from public administrations to SMEs in temporary financial difficulty due to delays in the payment of those
receivables. UBI Banca decided to contribute to the formation of those loan pools by allocating €600 million to each one. They became operational in the first half of 2013, with the definition of the regulatory framework.
Loans to SMEs drawn from Cassa Deposito e Prestiti (CDP – state controlled fund and deposit
institution) funds The UBI Banca Group has continued to grant loans using CDP funds by adhering to the Italian banking Association/CDP “fourth convention” of 1st March 2012.
As a result of that last convention, the CDP made available a new loan pool of €10 billion to banks divided into an “Investments Pool” of €8 billion to facilitate access to loans for investments by SMEs and a “Public Administration Receivables Pool” of €2 billion, designed to mitigate the negative effects of late payments by public administrations.
The Group has decided to use the CDP funds available from the “Investments Pool” for unsecured loans with a term of between 13 months (19 months if backed by the Guarantee Fund for SMEs pursuant to Law No. 662/1996) and 60 months, for investments to be made and/or being made and to increase working capital. Approximately 2,100 loans worth over €104 million had been granted, drawn from the “Investments loan pool” established by the “fourth convention” and put into operation in the Group from November 2012.
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Guarantee fund for SMEs pursuant to Law No. 662/1996 At the same time, with a view to facilitating access to credit by SMEs in the current difficult economic environment, use of public sector instruments such as the Guarantee Fund for SMEs pursuant to Law No. 662/1996 to mitigate credit risk continued. Outstanding loans in the Group backed by the guarantee pursuant to Law No. 662/1996 amount to €804 million (of which €206 million short-term and €598 million medium to long-term), while loans disbursed in the first half of 2013 exceeded 1.550 and were worth €155 million.
Initiatives for populations hit by the earthquake in Emilia Romagna, Lombardy and Veneto In order to assist the people and businesses damaged by the earthquakes which hit Emilia Romagna, Lombardy and Veneto on and after 20th May 2012, UBI Banca promptly applied the measures of Decree Law No. 74 of 6th June 2012 and subsequent amendments, which established the deferment until 30th November 2012 of repayments on loans granted by banks to individuals and businesses resident in the towns hit by the earthquakes. On the basis of that action, repayments on approximately 4.480 loans were deferred on a total remaining debt of approximately €283 million.
In addition to the measures reported above, UBI Banca also took two additional measures as follows:
the deferment for a maximum of 12 months (at the contracted interest rate for the loan) of
repayments on unsecured loans (businesses only) and on mortgages (businesses and individuals) for the following;
• individuals and businesses operating in all economic sectors inclusive of nonprofit organisations, holders of ordinary mortgage loans backed by residential, commercial and industrial property located in the municipalities hit by the earthquakes who suffered even partial, but significant damage;
• businesses with operational premises located in the municipalities hit by the earthquakes (including provincial capitals), holders of ordinary unsecured medium to long-term loans.
the creation of a loan pool totalling €60 million (distributed among the Group banks operating in the
areas hit) for the grant of medium to long-term unsecured loans under particularly competitive terms and conditions to businesses and individuals who have suffered material damage attributable to the earthquake. The deadline for use was extended until the 30th June 2013. As at that date over €9.1 million of the loan pool had been used with the grant of more than 170 loans to businesses and individuals.
Again for SMEs located in the zones hit by earthquakes, UBI Banca has also taken action on the basis, amongst other things, of measures taken by Mediocredito Centrale which involve the intervention of the
Fondo di Garanzia per le PMI (Guarantee Fund for SMEs) free of charge and with processing and approval priorities over other actions. The maximum amount that may be guaranteed for a single business is €2.5 million with maximum backing equal to 80% of each loan.
UBI Banca also promptly adhered to the Convention signed on 5th November 2012 by the Italian Banking Association and the CDP, as added to on 18th November, for the grant of loans to population groups hit by earthquakes (private individuals and legal entities) pursuant to Decree Law No. 174 of 10th October 2012. These loans with a term of 24 months, backed by central government guarantees, are for the payment in instalments of tax, social security and welfare obligations deferred until 30th November 2012 (on the basis of legislation for earthquake victims) and they are due from 1st December 2012 until 30th June 2013. The beneficiaries of the loans are either private individuals or legal entities that earn business income –
located (with registered offices or operating headquarters) in the municipalities hit by the earthquakes and who suffered damages from those events – and that earn ordinary income as employees, who are the owners of a damaged housing unit which is their principal dwelling (the latter only for the payment of taxes due from 16th December 2012 until 30th June 2013). Following the applications made by customers in the set period between 19th November 2012 and 30th November 2012, the Group concluded 35 transactions for more than €2.1 million of which approximately €1.7 million was used. Decree Law No. 43 of 26th April 2013 not only extended the date set for the end of the earthquake emergency until the 31st December 2014, but also extended the deadline for the application for loans
pursuant to Decree Law No. 174 until 31st October 2013. Taxpayers who have not already applied for subsidised loans under the first “tax moratorium” – if they are in possession of the objective requirements set – will therefore be able to apply for them to pay taxes falling due between 1st December 2012 (16th December 2012 for those with employee income) and 30th September 2013, inclusive of payments deferred until 30th November 2012 pursuant to the earthquake victim legislation and not yet paid.
On the other hand taxpayers who have obtained loans relating to payments due until the 30th June 2013 will be able to apply, by the same deadline of 31st October 2013, for similar loans for amounts falling due from 1st July 2013 to 30th September 2013.
On the basis of the aforementioned Decree Law No. 43, access to the loans is also available to individuals or legal entities that earn income, persons who carry on a retail business, self-employed persons and persons who carry on farming business, whose operating headquarters or tax domicile or whose market
75
is located in the municipalities hit by the earthquakes and who can demonstrate that they suffered direct economic damage caused by the earthquake events.
CDP funds have been used to create a maximum loan pool of €6 billion to be used on the basis of a further Italian Banking Association-CDP Convention soon to be signed.
The beneficiaries of the loans will only repay the principal, while the interest accruing will be paid to the Bank through a tax credit granted to it.
Again in order to assist groups hit by the 2012 earthquake, Decree Law No. 74 of 6th June 2012 provides for contributions to repair, restore or reconstruct properties. To achieve this article 3-bis of Decree Law No. 95 of 6th July 2012 allocated a maximum budget of €6 billion (of which €5.61 billion destined to Emilia Romagna, €366 million to Lombardy and €24 million to Veneto) to be used on the basis of the Italian Banking Association-CDP Convention signed on 17th December 2012 and amended on 23rd July 2013.
Under the terms of that Italian Banking Association-CDP Convention, unsecured loans may be granted repayable in six monthly instalments, for a term established on the basis of the amount up to a maximum of 25 years.
The beneficiaries will receive a tax credit for an amount equal to the instalments due inclusive of capital and interest, for which transfer to the lending bank is compulsory. That bank then uses it on the basis of the compensation procedures pursuant to article 17 of Legislative Decree No. 241 of 1997.
The UBI Banca Group manifested its interest in adhering to the Convention in February 2013. Preparatory activities for operations are in progress in view of regulatory developments contained in the addendum already mentioned to the Italian Banking Association-CDP Convention of 23rd July 2013.
The Group continued with the various institutional initiatives launched in prior years to assist FAMILIES. In detail, during the first half:
• the “Loans of hope” 11 an initiative resulting from an agreement between the Italian Banking
Association and the Italian Episcopal Conference allowed 126 loans to be granted for a total of €750 thousand;
• the “New babies loan”, which involves the creation of a guarantee fund to facilitate access to credit for
families with a child born or adopted between 2009-2014.12 It has allowed approximately 250 families to obtain a guaranteed loan for a total of over €1.1 million;
• “Give them a future”, an initiative of the Italian Banking Association and the Youth Ministry, which
the Group adhered to in September 2011 to grant subsidised loans to young students (following on from the previous “Give them credit” programme), saw the grant of €250 thousand to 53 students;
• since February 2012, the Group has adhered to the “Young Couples’ Fund”, a new initiative of the Italian Banking Association to provide the guarantees needed to obtain a mortgage for young couples
or even single parent families with young children with “atypical” or temporary employment contracts to purchase a first home.
The Group has also adhered to the new “solidarity fund for mortgages or the purchase of a main dwelling”13, which was created as a result of an initiative by the Ministry of the Economy and Finance and became operational from 27th April 2013. This initiative combines the two prior initiatives (“2010 Solidarity Fund” and “Families Plan – Italian Banking Association Moratorium”) making them simpler and more effective operationally.
In consideration of the serious economic and employment crisis which has hit the country, after adhering in 2009 to the National Convention with Confindustria (confederation of industry) and Confederation of trade union organisations and trade associations on the question of advances on Cassa Integrazione Guadagni Straordinaria (the extraordinary state redundancy/lay-off scheme) benefits, Group banks signed specific agreements also in their major local markets including Brescia, Cuneo and Milan. Under this initiative advances are paid to workers on Cassa Integrazione Straordinaria benefits, including exceptional benefits, until payments are received from the INPS (Italian national insurance institute).
11 For families that have lost all income from work, have no unearned income or income other than that generated by the ownership
of a home or ordinary or extraordinary state redundancy benefits. It is designed to implement projects for the return to work or the start of small businesses.
12 On 31st July 2012, a new Memorandum of Intent was signed between the Italian Banking Association and the Department for Family Policies which extends the access to credit to include families with children born or adopted in the years 2012-2013-2014.
13 For mortgage contracts for the purchase of a main dwelling for borrowers, the fund gives the possibility for a customer, if certain conditions are met, to apply for the deferment of repayments not more than twice for a maximum period of not longer than 18
months in the life of the mortgage.
76
The interbank market and the liquidity position
The net interbank position of the UBI Banca Group as at 30th June 2013 was net debt of €10.3
billion, slightly up compared to -€9.6 billion at the end of March and -€9.1 billion at the end of
December.
The balance continues to be related to refinancing operations (LTROs) with the ECB. Net of operations with central banks, the net interbank position was in fact one of funding of €1
billion as at 30th June 2013 and again of funding of €1.8 billion as at 31st March 2013 and as
at 31st December 2012. This trend basically reflects decreases in volumes of assets in the first
six months of the year.
The tendency of market conditions to normalise, which, however, suffered a partial slowdown
in the second quarter of the year, together with all the action undertaken, has enabled the
Group to first attain and then maintain a position of funding, as also demonstrated by short-
term (liquidity coverage ratio) and structural (net stable funding ratio) liquidity indicators
under Basel 3, both already above 100%1.
Loans and advances to banks of €4.8 billion at the end of June were almost unchanged
compared to June 2012, while they were down by €1.3 million compared to December, the
result of the following:
-€0.3 billion due to reductions in liquidity held with central banks regarding the centralised
account for the compulsory reserve.
The changes in end of period figures are completely normal and depend on balance management strategies, considering the average deposit requirements to be complied with in the reporting period. The Group normally maintains average deposits in line with the requirement;
-€1 billion due to reductions in all types of lending of which the item is composed and in
particular in other financing (-€1 billion, partly as a result of the repayment of liquidity
generated by a Group SPE) and in debt instruments (-€0.2 billion), with the sole exception
of reverse repurchase agreements (+€0.3 billion, which should be interpreted in relation to financial liabilities held for trading – uncovered short positions on European government
securities).
1 On the basis of the agreement reached by the Basel Committee on 6th January 2013, the LCR indicator will be introduced from 1st
January 2015, but the minimum ratio required will be set initially at 60%.
Net interbank position
Figures in thousands of euro
Loans and advances to banks 4,774,761 5,505,388 6,072,346 5,286,733 4,843,142
of which: loans to central banks 874,926 698,396 1,191,235 698,769 722,132
Due to banks 15,025,192 15,086,195 15,211,171 14,765,300 14,708,333
of which: due to central banks 12,139,750 12,121,417 12,098,917 12,075,917 12,052,000
Net interbank position -10,250,431 -9,580,807 -9,138,825 -9,478,567 -9,865,191
Figures in thousands of euro
Loans and advances to banks 4,843,142 4,925,671 6,184,000 5,314,336 4,384,636
of which: loans to central banks 722,132 577,133 739,318 1,485,674 325,450
Due to banks 14,708,333 15,143,195 9,772,281 8,611,714 4,966,574
of which: due to central banks 12,052,000 12,021,667 6,001,500 4,000,333 -
Net interbank position -9,865,191 -10,217,524 -3,588,281 -3,297,378 -581,938
30.6.2013
30.6.2012
30.6.2012
30.6.2011
31.3.2013
31.3.2012
31.12.2012
31.12.2011
30.9.2012
30.9.2011
77
Interbank funding of €15 billion at the end of June included a concentration of €12.1 billion
from the ECB (after participation in both the LTRO auctions in which the Group was allotted
funds of €12 billion2) and remained more or less stable over twelve months.
Net of funding from central banks, amounts due to banks stood at €2.9 billion (-€0.2 billion in
the first half), the aggregate result within the item of a decrease in current accounts and term deposits (for a total of -€0.6 billion) and an increase in other financing (+€0.3 billion), which
includes medium to long-term transactions with the EIB amounting to €889 million relating to
UBI Banca and the former Centrobanca and also other payables (+€0.1 billion), which include
the relationship for the settlement of credit cards with Istituto Centrale Banche Popolari.
***
As at 30th June 2013 the liquidity reserve, consisting of the portfolio of assets eligible for refinancing with the central bank, totalled €27.6 billion (net of haircuts), compared to €29.4
billion at the end of the year. It was composed of €17.5 billion of assets deposited with the
European Central Bank (the “collateral pool”) and of €10.1 billion of owned Italian government securities not refinanced with the Cassa di Compensazione e Garanzia (CCG - a central
counterparty clearing house), available non-pool.
Assets eligible for financing fell by €1.8 billion compared to 31st December 2012, the result
primarily of a smaller contribution from securitisations (-€1.1 billion), partly the consequence
of the natural amortisation of items and partly due to the temporary suspension of the 24-7
Finance note from the ECB pool (-€0.5 billion, the eligibility of which was restored in August).
The remaining changes consist of -€0.4 billion due to the reduction in available securities that
2 The carrying amount includes interest expense accruing.
Loans to banks: composition
Figures in thousands of euro amount % amount %
Loans to central banks 874,926 18.3% 698,396 12.7% 176,530 25.3% 1,191,235 19.6% -316,309 -26.6% 722,132 14.9%
Term deposits - - - - - - - - - - - -
Compulsory reserve requirements 842,015 17.6% 677,038 12.3% 164,977 24.4% 1,172,303 19.3% -330,288 -28.2% 718,846 14.8%
Reverse repurchase agreements - - - - - - - - - - - -
Other 32,911 0.7% 21,358 0.4% 11,553 54.1% 18,932 0.3% 13,979 73.8% 3,286 0.1%
Loans and advances to banks 3,899,835 81.7% 4,806,992 87.3% -907,157 -18.9% 4,881,111 80.4% -981,276 -20.1% 4,121,010 85.1%
Current accounts and deposits 2,018,394 42.3% 1,794,060 32.6% 224,334 12.5% 2,081,098 34.3% -62,704 -3.0% 2,101,215 43.4%
Term deposits 76,762 1.6% 85,542 1.5% -8,780 -10.3% 118,971 2.0% -42,209 -35.5% 506,812 10.5%
Other financing: 1,750,482 36.7% 2,873,264 52.2% -1,122,782 -39.1% 2,468,251 40.6% -717,769 -29.1% 1,280,888 26.4%
- reverse repurchase agreements 1,212,385 25.4% 1,198,387 21.8% 13,998 1.2% 953,977 15.7% 258,408 27.1% 211,463 4.3%
- finance leases 5 0.0% 4 0.0% 1 25.0% 30 0.0% -25 -83.3% 64 0.0%
- other 538,092 11.3% 1,674,873 30.4% -1,136,781 -67.9% 1,514,244 24.9% -976,152 -64.5% 1,069,361 22.1%
Debt instruments 54,197 1.1% 54,126 1.0% 71 0.1% 212,791 3.5% -158,594 -74.5% 232,095 4.8%
Total 4,774,761 100.0% 5,505,388 100.0% -730,627 -13.3% 6,072,346 100.0% -1,297,585 -21.4% 4,843,142 100.0%
30.6.2013
A%
Changes A/B31.3.2013
B%
31.12.2012
C%
30.6.2012
D%
Changes A/C
Due to banks: composition
Figures in thousands of euro amount % amount %
Due to central banks 12,139,750 80.8% 12,121,417 80.3% 18,333 0.2% 12,098,917 79.5% 40,833 0.3% 12,052,000 81.9%
Due to banks 2,885,442 19.2% 2,964,778 19.7% -79,336 -2.7% 3,112,254 20.5% -226,812 -7.3% 2,656,333 18.1%
Current accounts and deposits 1,039,023 6.9% 1,065,917 7.1% -26,894 -2.5% 1,215,750 8.0% -176,727 -14.5% 1,085,755 7.4%
Term deposits 98,481 0.7% 276,653 1.8% -178,172 -64.4% 534,610 3.5% -436,129 -81.6% 477,966 3.2%
Financing: 1,427,312 9.5% 1,327,879 8.8% 99,433 7.5% 1,144,494 7.5% 282,818 24.7% 978,638 6.7%
- repurchase agreements 405,632 2.7% 390,641 2.6% 14,991 3.8% 416,190 2.7% -10,558 -2.5% 280,157 1.9%
- other 1,021,680 6.8% 937,238 6.2% 84,442 9.0% 728,304 4.8% 293,376 40.3% 698,481 4.8%
Other payables 320,626 2.1% 294,329 2.0% 26,297 8.9% 217,400 1.5% 103,226 47.5% 113,974 0.8%
Total 15,025,192 100.0% 15,086,195 100.0% -61,003 -0.4% 15,211,171 100.0% -185,979 -1.2% 14,708,333 100.0%
30.6.2013
A%
Changes A/B31.3.2013
B
30.6.2012
D%%
Changes A/C31.12.2012
C%
78
can be refinanced with the CCG, -€0.1 billion due to a decrease in ABACO loans and -€0.2
billion as a result of the decrease in the value of government backed bonds.
Given the portion already pledged of €12.1 billion (unchanged compared to the end of 2012),
the margin of liquidity still available is €15.5 billion (€17.3 billion in December).
(*) These include government securities not refinanced with the Cassa di Compensazione e Garanzia for the following amounts:
30th June 2013: €13.2 billion (net of haircuts), of which €3.1 billion contributed to the pool and €10.1 billion available, non-pool;
31st March 2013: €14 billion (net of haircuts), of which €3.2 billion contributed to the pool and €10.8 billion available, non-pool; 31st December 2012: €13.5 billion (net of haircuts), of which €3.2 billion contributed to the pool and €10.3 billion available, non-pool;
30th September 2012: €12.4 billion (net of haircuts), of which €3.2 billion contributed to the pool and €9.2 billion available, non-pool;
30th June 2012: €10 billion (net of haircuts), of which €3 billion contributed to the pool and approximately €7 billion available, non-pool.
(**) ABACO (bank assets eligible as collateral) is the name given to procedures drawn up by the Bank of Italy for the management of loans eligible for
refinancing. In order to qualify as eligible, an asset must meet specific requirements contained in Bank of Italy regulations concerning the following: type of debtor (public sector, non-financial company, international and supranational institutions), credit rating (set by external ratings, rating tools of
approved providers and internal ratings [for banks authorised by the Bank of Italy to use internal rating models]), minimum amount (€0.1 million for
domestic loans) and type of asset.
Assets eligible for refinancing
Figures in billions of euro
nominal
amount
amount eligible
(net of haircuts)
nominal
amount
amount eligible
(net of haircuts)
nominal
amount
amount eligible
(net of haircuts)
nominal
amount
amount eligible
(net of haircuts)
nominal
amount
amount eligible
(net of haircuts)
Securities owned (AFS, HTM and L&R) (*) 13.89 13.93 14.65 14.67 14.26 14.32 13.49 13.34 11.33 10.97
Government backed bonds 6.00 5.59 6.00 5.54 6.00 5.79 6.00 5.67 6.00 5.31
Covered bonds ("self-retained" issues) 3.05 2.73 3.05 2.73 3.05 2.77 2.55 2.31 2.55 2.30
Securitisation of residential mortgages of the
former B@nca 24-7 - - 1.28 0.88 1.32 0.54 1.34 0.72 1.37 0.74
UBI Leasing leased assets securitisation 1.52 1.17 1.79 1.30 1.94 1.47 2.29 1.58 2.29 1.67
Banco di Brescia securitisation of performing
loans to SMEs 0.88 0.66 0.91 0.66 0.96 0.64 0.35 0.25 0.41 0.30
Banca Popolare di Bergamo securitisation of
performing loans to SMEs 1.09 0.80 1.86 1.29 1.86 1.21 1.86 1.33 1.86 1.31
Banca Popolare Commercio e Industria
securitisation of performing loans to SMEs 0.58 0.44 0.58 0.41 0.58 0.38 - - - -
Banca Popolare di Ancona securitisation of
performing loans to SMEs 0.71 0.54 0.71 0.50 0.71 0.46 - - - -
Loans eligible resulting from participation in
ABACO (**) 1.78 1.78 1.95 1.95 1.85 1.85 2.37 2.37 1.14 1.14
Total 29.50 27.64 32.78 29.93 32.53 29.43 30.25 27.57 26.95 23.74
30.6.2013 31.3.2013 31.12.2012 30.9.2012 30.6.2012
79
Financial activities
Total financial assets of the Group as at 30th June 2013 amounted to €21.8 billion, slightly up
on the figure for the end of the year (+€0.4 billion), but down compared to March (-€0.8 billion).
If financial liabilities are considered, almost a third of which consisted of financial derivatives, net
assets totalled €20.2 billion (€19.6 billion in December and €20.8 billion in March).
The most substantial part (95.2%) of the total continued to consist of Italian government securities, which recorded a total increase in the first quarter of €1.6 billion, of which €1
billion relating to the trading portfolio (BOTs and CTZs) and €600 million nominal to the
available-for-sale (AFS) portfolio (new investments in BTPs made in January).
The relative lack of change in the item “Italian government securities” in the second quarter is
the result of and incorporates a variety of actions undertaken since April on the government bond portfolio: four switching operations were carried out, with profit-taking on some positions
in the AFS portfolio, for a total of €2.19 billion nominal, which resulted in the realisation of a
gain of €49.7 million. At the same time securities were purchased, also classified as AFS,
amounting to €2.39 billion nominal.
-
The portfolio consisting of “financial assets held for trading” (€4,686,491 thousand) was smaller than the same portfolio held by the Parent (€4,858,058 thousand) due to
the presence of financial derivatives contracts entered into by UBI Banca with the Group network banks and product companies. These instruments, in addition to being
partially and potentially subject to intragroup elimination in the consolidation, were classified by the Parent as held for trading because the relative assets hedged were recognised in the balance sheets of the Group network banks and product companies. When the consolidation was prepared, those same instruments, entered into to
hedge the underlying assets, were recognised within hedging derivatives.
Financial derivatives classified as held for trading held by the Parent amounted to €740,620 thousand in June 2013, while the figure for the Group was €484,285 thousand.
Management accounting figures1 for the 30th June 2013, show the following: - in terms of type of financial instrument, the securities portfolio of the Group was composed as
follows: 93.4% of government securities; 5.5% of corporate securities (of which approximately 75% were issued by major Italian and international banks and financial institutions; 72% of the
investments in corporate securities also carry an “investment grade” rating); 0.6% of hedge
funds and the remainder (0.5%) consisted of funds and equities; - from a financial viewpoint, floating rate securities accounted for 20.1% of the portfolio2 and
fixed rate securities for 75.2%, while the remainder was composed of structured instruments
(held mainly in the AFS portfolio), equities, funds and convertible securities;
1 The management accounting figures relate to a smaller portfolio than that stated in the consolidated financial statements, because they
exclude equity investments and some minor portfolios, but nevertheless include transactions that may be performed at the end of the period
with the value date for settlement in the following month. 2 Fixed rate securities purchased as part of asset swaps are also considered as floating rate. They account for 79% of the floating rate
securities.
Financial assets/liabilities
Figures in thousands of euro Total A % Total B % amount % Total C % amount % Total D % amount %
Financial assets held for trading 4,686,491 21.5% 5,045,199 22.4% -358,708 -7.1% 4,023,934 18.8% 662,557 16.5% 5,211,059 24.4% -524,568 -10.1%
of which: financial derivatives contracts 484,285 2.2% 606,768 2.7% -122,483 -20.2% 587,824 2.7% -103,539 -17.6% 576,153 2.7% -91,868 -15.9%
Financial assets designated at fair value 206,860 1.0% 202,979 0.9% 3,881 1.9% 200,441 0.9% 6,419 3.2% 122,376 0.6% 84,484 69.0%
Available-for-sale financial assets 13,746,914 63.2% 14,134,430 62.6% -387,516 -2.7% 14,000,609 65.5% -253,695 -1.8% 12,837,037 60.1% 909,877 7.1%
Held-to-maturity investments 3,122,272 14.3% 3,185,071 14.1% -62,799 -2.0% 3,158,013 14.8% -35,741 -1.1% 3,192,239 14.9% -69,967 -2.2%
Financial assets (a) 21,762,537 100.0% 22,567,679 100.0% -805,142 -3.6% 21,382,997 100.0% 379,540 1.8% 21,362,711 100.0% 399,826 1.9%
of which:
- debt instruments 20,712,929 95.2% 21,411,146 94.9% -698,217 -3.3% 20,187,669 94.4% 525,260 2.6% 20,109,120 94.1% 603,809 3.0%
- of which: Italian government securities 19,545,124 89.8% 19,521,140 86.5% 23,984 0.1% 17,965,689 84.0% 1,579,435 8.8% 17,920,680 83.9% 1,624,444 9.1%
- equity instruments 345,092 1.6% 331,446 1.5% 13,646 4.1% 390,458 1.8% -45,366 -11.6% 457,211 2.1% -112,119 -24.5%
- Units in O.I.C.R.
(collective investment instruments). 220,231 1.0% 218,319 1.0% 1,912 0.9% 217,046 1.0% 3,185 1.5% 220,227 1.0% 4 0.0%
Financial liabilities held for trading (b) 1,548,967 100.0% 1,801,256 100.0% -252,289 -14.0% 1,773,874 100.0% -224,907 -12.7% 1,274,898 100.0% 274,069 21.5%
of which: financial derivatives contracts 444,994 28.7% 594,059 33.0% -149,065 -25.1% 610,004 34.4% -165,010 -27.1% 601,244 47.2% -156,250 -26.0%
Net financial assets (a-b) 20,213,570 20,766,423 -552,853 -2.7% 19,609,123 604,447 3.1% 20,087,813 125,757 0.6%
30.6.2012 Changes A/D30.6.2013 Changes A/B31.3.2013 Changes A/C31.12.2012
80
- as regards the currency of denomination, 99.6% of the securities were denominated in euro and
0.2% in dollars with currency hedges, while in terms of geographical distribution, 98.7% of the
investments (excluding hedge funds) were issued from countries in the euro area and 0.9% from the USA;
- finally, an analysis by rating (for the bond portfolio only) shows that 98.6% of the portfolio
consisted of “investment grade” securities with an average rating of Baa1 (unchanged compared
to both March 2013 and December 2012).
Available-for-sale financial assets
“Available-for-sale financial assets” (AFS), asset item 40, are measured at fair value with the recognition of changes in a separate fair value reserve in equity, except for losses due to reductions in value that are considered significant or prolonged. In this case the reduction in value that occurred in the period is recognised through profit or loss, the amount being transferred from the negative or positive reserve that may have been recognised in equity previously. Following the recognition of impairment losses, recoveries in value continue to be recognised in the separate fair value reserve in equity if they relate to equity instruments and through profit and loss if they relate to debt instruments. Any decreases below the level of the previous impairment losses are recognised through profit and loss. Definitions relating to the fair value hierarchy (levels 1, 2 and 3) are given in Section A.3 of Part A – Accounting Policies in the Notes to the Consolidated Financial Statements in the 2012 Annual Report.
Available-for-sale financial assets totalled €13.7 billion as at 30th June 2013 and were
composed as follows:
- over 90%, accounting for €12,814 million (€12,192 million in March and €11,955 million in
December 2012), in the UBI Banca AFS portfolio, which, as a result of the merger, now also
includes Centrobanca’s corporate bond portfolio (€365 million in March), composed mainly of investment-grade companies;
- €797 million in the IW Bank portfolio (€787 in March; €783 million at the end of the year),
consisting almost entirely of floating rate Italian government securities, designed to stabilise
the bank’s net interest income, given the nature of its normal operations;
Available-for-sale financial assets: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total B amount % L 1 L 2 L 3 Total C
Debt instruments 12,411,359 985,524 3,648 13,400,531 12,603,798 1,002,549 7,466 13,613,813 -213,282 -1.6% 11,405,373 970,335 10,212 12,385,920
of which: Italian
government
securities 11,857,399 395,216 - 12,252,615 11,029,798 399,247 - 11,429,045 823,570 7.2% 9,871,780 354,892 - 10,226,672
Equity instruments 100,958 - 152,114 253,072 154,798 26 139,749 294,573 -41,501 -14.1% 217,550 50,369 87,128 355,047
Units in O.I.C.R.
(collective investment
instruments) 40,777 52,534 - 93,311 37,894 54,329 - 92,223 1,088 1.2% 35,296 60,774 - 96,070
Financing - - - - - - - - - - - - - -
Total 12,553,094 1,038,058 155,762 13,746,914 12,796,490 1,056,904 147,215 14,000,609 -253,695 -1.8% 11,658,219 1,081,478 97,340 12,837,037
30.6.201230.6.2013 Changes A/B31.12.2012
Available-for-sale financial assets: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total D amount %
Debt instruments 12,411,359 985,524 3,648 13,400,531 12,807,403 994,906 3,648 13,805,957 -405,426 -2.9%
of which: Italian
government securities 11,857,399 395,216 - 12,252,615 11,546,038 399,483 - 11,945,521 307,094 2.6%
Equity instruments 100,958 - 152,114 253,072 93,773 - 143,435 237,208 15,864 6.7%
Units in O.I.C.R.
(collective investment
instruments) 40,777 52,534 - 93,311 38,703 52,562 - 91,265 2,046 2.2%
Financing - - - - - - - - -
Total 12,553,094 1,038,058 155,762 13,746,914 12,939,879 1,047,468 147,083 14,134,430 -387,516 -2.7%
30.6.2013 Changes A/D31.3.2013
81
The slight contraction that occurred in the AFS portfolio in the first six months of the year (-€0.3 billion), and also in the second quarter (-€0.4 billion) is mainly attributable to debt instruments, the result of different trends within the item.
On the one hand, Italian government securities rose to €12.3 billion, as a result of the
investments made in the first half already mentioned: +€600 million nominal of BTPs, with
maturities of between 2 and 3 years (in January), and a net balance of +€200 million as a
consequence of switches made in the second quarter.
On the other hand, corporate and foreign government bonds fell by approximately €1 billion,
mainly in relation to the maturity of government bonds held by the special purpose entity UBI Finance, consisting of a temporary investment of liquidity recognised among the segregated
assets (€750 million in December, of which €650 million renewed in March) and also as a
result of sales/maturities and fair value changes in the Parent’s corporate portfolio. After sales/maturities occurring in the first quarter and amounting to €0.2 billion, the latter included amounts relating to the former Centrobanca (€365 million in March 2013) together with the effects of trading and fair value changes in the second quarter.
Total debt instruments3 as at 30th June – amounting to €13.4 billion – were composed as
follows: €12.4 billion in fair value level 1 (of which €11.9 billion in government securities), €1
billion in level 2 (which includes €0.4 billion of Republic of Italy securities and bonds issued
mainly by Italian banks) and €3.6 million in level 3.
Equity instruments 4 amounted to €253.1 million, down over six months (-41.5 million), a
reflection of sales/disposals made at the beginning of the year, but up on March (+€15.9 million), due to increases in the fair value of some equities.
Within this category, listed equity instruments (€101 million, fair value level 1), decreased compared to December (-€53.8 million), as a result of the sale of 33,400,000 Intesa Sanpaolo
shares5 (this investment fell at consolidated level to €99.4 million from €148.4 million at the
end of 2012) and the total disposal of the investment in A2A (a fair value of €4.9 million at the
end of year). On the other hand these instruments increased in the second quarter (+€7.2
million), due to an appreciation in the fair value of the Intesa Sanpaolo share.
Equity instruments classified within fair value level 36 increased over six months (+€12.4
million) and also compared to March (+€8.7 million), the aggregate result of increases and
decreases in fair value in the first half which involved the following: S.A.C.B.O. (+€9.5 million),
Istituto Centrale delle Banche Popolari Italiane Spa (+€5.7 million) and SIA Spa (+€2.2 million),
which fully offset the sale of the entire investment held in Unione Fiduciaria Spa performed in April 2013 (for a sales price of €3.4 million) and the disposal at the end of June for €1.2
million of the investment in Società Corporation Financière Européenne held by UBI
International Sa.
Units in OICRs (collective investment instruments) – relating almost entirely to UBI Banca –
amounted to €93.3 million (€92.2 million in December), a reflection of an appreciation in the fair value of the Polis fund classified within fair value level 1 (up by €2.5 million to €10.9
million), which more than compensated for redemptions and reductions in the fair value of
instruments classified within fair value level 2.
3 Again as in March 2013 and December 2012, these did not include direct investments in ABS instruments as at 30th June 2013. The
only investments existing regarded own securitisations, eliminated in the consolidation, amounting to €23.4 million (€29 million in December 2012), composed as follows:
- €2.4 million relating to Lombarda Lease Finance 4 (UBI Banca ABS instruments classified within AFS financial assets, fair value level 1 – €2.6 million in March and €2.8 million in December);
- €21 million relating to Lombarda Lease Finance 4 classified within UBI Leasing loans and receivables (unchanged compared to December 2012).
The Orio Finance securitisations (RMBS structured securities relating to the Parent, classified within assets held for trading), amounting to €5.2 million in December 2012, were subject to early redemption in May.
4 Shareholdings that are not classified as companies subject to control, joint control or significant influence are recognised here. 5 The UBI Banca Group held a total of 80,729,014 shares as at 30
th June 2013 accounting for 0.52% of the share capital with voting rights (114,129,014 shares,
accounting for 0.74% of the share capital at the end of the year).
The disposal, which had already begun in the last months of 2012, was authorised by the Management Board on the assumption that the holding was not
strategic, as part of broader action taken to reduce the volatility of investments in listed shares.
6 On the basis of a more precise classification of unlisted equity investments, at the end of 2012 instruments previously classified
within fair value level 2 were almost all reclassified within fair value level 3.
82
Total property funds present in the O.I.C.R. portfolio amounted to €16.8 million (€15.5 million at the end of the year).
Held-to-maturity investments
“Held-to-maturity investments”, asset item 50, comprises financial instruments that an entity intends and is able to hold to maturity. These assets are measured at amortised cost with the recognition of impairment losses, or recoveries in value when the reason for the impairment no longer exists, through profit or loss.
Held-to-maturity investments had a book value of €3.1 billion as at 30th June 2013. The item
consisted solely of government securities purchased in the first quarter of 2012 (BTPs for a nominal value of €3 billion and with maturity in November 2014).
Held-to-maturity investments: composition
Figures in thousands of euro A L 1 L 2 L 3 Total B L 1 L 2 L 3 Total amount % L 1 L 2 L 3 Total
Debt instruments 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103 -35,741 -1.1% 3,192,239 3,154,500 - - 3,154,500
of which: Italian
government securities 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103 -35,741 -1.1% 3,192,239 3,154,500 - - 3,154,500
Financing - - - - - - - - - - - - - - - - -
Total 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103 -35,741 -1.1% 3,192,239 3,154,500 - - 3,154,500
Carrying
amount
C
Fair Value
30.6.2012Carrying
amount
30.6.2013
Fair Value
Changes A/B
Fair Value
Carrying
amount
31.12.2012
Held-to-maturity investments: composition
Figures in thousands of euro A L 1 L 2 L 3 Total D L 1 L 2 L 3 Total amount %
Debt instruments 3,122,272 3,198,149 - - 3,198,149 3,185,071 3,261,484 - - 3,261,484 -62,799 -2.0%
of which: Italian
government securities 3,122,272 3,198,149 - - 3,198,149 3,185,071 3,261,484 - - 3,261,484 -62,799 -2.0%
Financing - - - - - - - - - - - -
Total 3,122,272 3,198,149 - - 3,198,149 3,185,071 3,261,484 - - 3,261,484 -62,799 -2.0%
Changes A/DCarrying
amount
30.6.2013 Carrying
amount
31.3.2013
Fair Value Fair Value
83
Financial instruments held for trading
Financial assets held for trading Asset item 20, “Financial assets held for trading” (HFT), comprises financial trading instruments “used to generate a profit from short-term fluctuations in price”. They are recognised at fair value through profit or loss – FVPL. Definitions relating to the fair value hierarchy (levels 1, 2 and 3) are given in Section A.3 of Part A – Accounting Policies in the Notes to the Consolidated Financial Statements in the 2012 Annual Report.
Financial assets held for trading amounted to €4.7 billion as at 30th June 2013, an increase of
€0.7 billion compared to December (but down by €0.4 billion since March). The changes in the item are attributable to debt instruments (relating almost entirely to the Parent) and in
particular to net investments in short-term Italian government securities (BOTs and CTZs) classified within fair value level 1, up by €0.8 billion since the end of the year (+€1 billion net
in the first quarter, -€0.2 billion net in the second quarter).
Debt instruments included residual direct investments in “asset backed securities”, held in the portfolio of the subsidiary UBI Banca International Sa, consisting mainly of mortgage backed securities (MBS), with the underlying principally of European origin amounting to €0.2 million (unchanged compared to March 2013 and December 2012).
Equity instruments fell to €10.6 million from €18.8 million in December (€16.8 million in
March): fair value level 1 instruments fell by €3.2 million over six months, while the amount
recognised within level 3 until March 2013 fell almost to zero as a result of a more appropriate
Financial assets held for trading: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total B amount % L 1 L 2 L 3 Total C
A. On-balance sheet assets
Debt instruments 4,189,463 663 - 4,190,126 3,415,759 84 - 3,415,843 774,283 22.7% 4,528,646 1,628 687 4,530,961
of which: Italian
government securities 4,170,237 - - 4,170,237 3,378,631 - - 3,378,631 791,606 23.4% 4,501,769 - - 4,501,769
Equity instruments 10,156 466 2 10,624 13,455 - 5,370 18,825 -8,201 -43.6% 17,760 643 83,761 102,164
Units in O.I.C.R.
(collective investment
instruments) 363 1 1,092 1,456 372 - 1,070 1,442 14 1.0% 351 51 1,379 1,781
Financing - - - - - - - - - - - - - -
Total (a) 4,199,982 1,130 1,094 4,202,206 3,429,586 84 6,440 3,436,110 766,096 22.3% 4,546,757 2,322 85,827 4,634,906
B. Derivative instruments
Financial derivatives 1,867 482,418 - 484,285 1,745 586,079 - 587,824 -103,539 -17.6% 958 575,195 - 576,153
Credit derivatives - - - - - - - - - - - - - -
Total (b) 1,867 482,418 - 484,285 1,745 586,079 - 587,824 -103,539 -17.6% 958 575,195 - 576,153
Total (a+b) 4,201,849 483,548 1,094 4,686,491 3,431,331 586,163 6,440 4,023,934 662,557 16.5% 4,547,715 577,517 85,827 5,211,059
30.6.201230.6.2013 Changes A/B31.12.2012
Financial assets held for trading: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total D amount %
A. On-balance sheet assets
Debt instruments 4,189,463 663 - 4,190,126 4,419,388 89 641 4,420,118 -229,992 -5.2%
of which: Italian government
securities 4,170,237 - - 4,170,237 4,390,548 - - 4,390,548 -220,311 -5.0%
Equity instruments 10,156 466 2 10,624 11,389 - 5,449 16,838 -6,214 -36.9%
Units in O.I.C.R.
(collective investment
instruments) 363 1 1,092 1,456 370 1 1,104 1,475 -19 -1.3%
Financing - - - - - - - - - -
Total (a) 4,199,982 1,130 1,094 4,202,206 4,431,147 90 7,194 4,438,431 -236,225 -5.3%
B. Derivative instruments
Financial derivatives 1,867 482,418 - 484,285 431 606,337 - 606,768 -122,483 -20.2%
Credit derivatives - - - - - - - - - -
Total (b) 1,867 482,418 - 484,285 431 606,337 - 606,768 -122,483 -20.2%
Total (a+b) 4,201,849 483,548 1,094 4,686,491 4,431,578 606,427 7,194 5,045,199 -358,708 -7.1%
Changes A/D30.6.2013 31.3.2013
84
reclassification into “financial assets designated at fair value”. This consisted of two
investments held for private equity and merchant banking purposes: Medinvest International amounting to €1.9 million (€2.3 million at the end of the year) and Manisa Srl, amounting to
€3 million (€3.1 million). As at 30th June 2012, private equity and merchant banking investments held by the former Centrobanca were still classified within fair value level 3 and these were also reclassified as financial assets designated at fair value in the financial statements as at the end of 2012.
Investments in units in OICRs (collective investment instruments) – €1.5 million – related
mostly to hedge funds purchased by UBI Banca before 30th June 2007, classified within fair
value level 3 and amounting to €1.1 million7, more or less unchanged since the end of the
year. Finally financial assets classified as held for trading included derivative instruments
amounting to €484 million (€588 million in December) entirely of a financial nature, for which
the performance and amount must be interpreted in strict relation to the corresponding item
recognised within financial liabilities held for trading.
***
As concerns the position regarding United States companies belonging to the Lehman Brothers Group, as already reported in previous financial reports, proofs of claim had been filed against Lehman Brothers Holdings Inc. (“LBHI”) and Lehman Brothers Special Financing Inc. (“LBSF”) as part of Chapter 11 proceedings under the United States bankruptcy code in progress in the United States (the “United States Proceedings”). These relate to derivatives contracts which had been taken out with companies in the Lehman Brothers Group. Discussions are in progress in respect of these positions with Lehman Brothers representatives concerning claimed amounts receivable relating to the aforementioned proofs of claim which it is considered may be concluded during the course of 2013. As concerns the position with Lehman Brothers International (Europe) (“LBIE”), a British company belonging to the Lehman Brothers Group subject to an administration order in the United Kingdom, as already reported, on 17th September 2010, UBI Banca filed a proof of debt claiming amounts receivable of £485,930.71 in relation to derivatives contracts that had been entered into with LBIE. Discussions are still in progress with the receivers of LBIE in order to reach an agreement on the amount of the receivables to be accepted in the proof of debt.
As regards the last position, UBI Banca has already filed a proof of claim against LBHI with regard to the United States Proceedings, in its capacity as guarantor of LBIE in accordance with the derivatives contracts.
Financial liabilities held for trading Financial liabilities held for trading totalled €1.5 billion in June 2013, down compared to both
December (-€0.2 billion) and March (-€0.3 billion), while the composition of the item as a
whole remained almost unchanged during the first half.
With regard to on-balance sheet liabilities, all relating to the Parent, amounts due to banks continued to consist of uncovered short positions in foreign government securities (French and
German) amounting to €1,104 million (€1,197 million in March; €1,110 million at the end of
the year).
The remaining amounts present in the comparative periods relate to uncovered short positions
in Italian government securities: €10 million in March and €54 million in December.
On the other hand, the position regarding on-balance sheet liabilities as at 30th June 2012 consisted mainly of uncovered short positions in Italian government securities (€462 million).
7 The following sub-section, “financial assets designated at fair value”, may be consulted for a full picture of the Group’s investments
in hedge funds.
85
Financial assets designated at fair value
The item “financial assets designated at fair value” is comprised of financial instruments classified as such in application of the fair value option (FVO). These financial assets are recognised at fair value through profit or loss. Definitions relating to the fair value hierarchy (levels 1, 2 and 3) are given in Section A.3 of Part A – Accounting Policies in the Notes to the Consolidated Financial Statements in the 2012 Annual Report.
Financial liabilities held for trading: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total B amount % L 1 L 2 L 3 Total C
A. On-balance sheet liabilities
Due to banks 1,103,973 - - 1,103,973 1,163,870 - - 1,163,870 -59,897 -5.1% 584,552 - - 584,552
Due to customers - - - - - - - - - - 89,102 - - 89,102
Debt instruments - - - - - - - - - - - - - -
Total (a) 1,103,973 - - 1,103,973 1,163,870 - - 1,163,870 -59,897 -5.1% 673,654 - - 673,654
B. Derivative instruments
Financial derivatives 99 444,895 - 444,994 69 609,935 - 610,004 -165,010 -27.1% 207 601,037 - 601,244
Credit derivatives - - - - - - - - - - - - - -
Total (b) 99 444,895 - 444,994 69 609,935 - 610,004 -165,010 -27.1% 207 601,037 - 601,244
Total (a+b) 1,104,072 444,895 - 1,548,967 1,163,939 609,935 - 1,773,874 -224,907 -12.7% 673,861 601,037 - 1,274,898
30.6.201230.6.2013 31.12.2012 Changes A/B
Financial liabilities held for trading: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total D amount %
A. On-balance sheet liabilities
Due to banks 1,103,973 - - 1,103,973 1,207,197 - - 1,207,197 -103,224 -8.6%
Due to customers - - - - - - - - - -
Debt instruments - - - - - - - - - -
Total (a) 1,103,973 - - 1,103,973 1,207,197 - - 1,207,197 -103,224 -8.6%
B. Derivative instruments
Financial derivatives 99 444,895 - 444,994 16 594,043 - 594,059 -149,065 -25.1%
Credit derivatives - - - - - - - - - -
Total (b) 99 444,895 - 444,994 16 594,043 - 594,059 -149,065 -25.1%
Total (a+b) 1,104,072 444,895 - 1,548,967 1,207,213 594,043 - 1,801,256 -252,289 -14.0%
30.6.2013 31.3.2013 Changes A/D
Financial assets designated at fair value: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total B amount % L 1 L 2 L 3 Total C
Debt instruments - - - - - - - - - - - - - -
Equity instruments - 3,181 78,215 81,396 - 2,812 74,248 77,060 4,336 5.6% - - - -
Units in O.I.C.R.
(collective investment
instruments) 113,684 - 11,780 125,464 109,664 - 13,717 123,381 2,083 1.7% 105,308 17,068 122,376
Financing - - - - - - - - - - - - - -
Total 113,684 3,181 89,995 206,860 109,664 2,812 87,965 200,441 6,419 3.2% 105,308 - 17,068 122,376
30.6.201230.6.2013 Changes A/B31.12.2012
Financial assets designated at fair value: composition
Figures in thousands of euro L 1 L 2 L 3 Total A L 1 L 2 L 3 Total D amount %
Debt instruments - - - - - - - - - -
Equity instruments - 3,181 78,215 81,396 - 2,506 74,894 77,400 3,996 5.2%
Units in O.I.C.R.
(collective investment
instruments) 113,684 - 11,780 125,464 111,858 - 13,721 125,579 -115 -0.1%
Financing - - - - - - - - - -
Total 113,684 3,181 89,995 206,860 111,858 2,506 88,615 202,979 3,881 1.9%
30.6.2013 31.3.2013 Changes A/D
86
Financial assets designated at fair value rose to €206.9 million (+€6.4 million compared to
December), due both to net increases in the fair value of the instruments and to the
reclassification of a minor portfolio belonging to the Parent out of assets held for trading (€4.9 million).
This category – relating totally to UBI Banca – was composed as follows as at 30th June 2013:
- €81.4 million of equity instruments, held in relation to the merchant banking and private
equity business of the former Centrobanca (almost totally classified within fair value level 3), still classified as held for trading in June 2012;
- €125.5 million of units in OICRs (collective investment instruments), up by €2.1 million
compared to the end of the year, due to an appreciation in the fair value of the listed Tages
funds in fair value level 1 (up by €4 million to €113.7 million), which offset the reduction in
the fair value of the remaining investments in hedge funds classified within fair value level
3 (down to €11.8 million from €13.7 million).
If an amount of €1.1 million classified within held for trading assets is also included, total hedge funds held by the
Parent as at 30th June 2013 (fair value level 3 of held for trading assets and assets designated at fair value) amounted to €12.9 million (€14.8 million in December).
*** As concerns the Madoff collapse and the court action initiated by UBI Banca before the Commercial Court of Dublin against the fund Thema International Plc and the relative depository bank, HSBC Institutional Trust Services Ltd, following a settlement agreement reached with the HSBC Institutional Trust Services Ltd in December 2012, the proceedings are continuing only between UBI and the Thema International Plc fund. In the meantime, UBI Banca is monitoring the class actions brought in the USA and the liquidation proceedings in progress in the British Virgin Islands brought against three funds attributable to Madoff, Fairfield Sigma Ltd, Kingate Euro Ltd and Kingate Global Ltd, in order to protect UBI Banca’s creditor rights also with respect to these actions. On the other hand, recovery activities are still in progress with regard to the Dynamic Decisions Growth Premium 2X fund, in liquidation. An agreement had been signed with the receivers which gives UBI Banca preference in the redemption of sums recovered in the liquidation, in return for financing paid to the receivers.
Exposure to sovereign debt risk
The book value of net sovereign debt risk exposures of the UBI Banca Group as at 30th June
2013 was €19.4 billion, an increase compared to €18.5 billion at the end of 2012.
The exposure continues to be concentrated almost totally on Italy. In addition to loans of €829
million to public administrations (€893 million in December), the Group held €19.5 billion in
government securities (+€1.6 billion since the end of 2012), of which €12.2 billion classified as
available-for-sale (+€0.8 billion), €4.2 billion classified as held for trading, considered net of
the relative uncovered short positions (+€0.8 billion), and €3.1 billion classified as held-to-maturity.
As concerns sovereign debt exposures to other countries, these include limited amounts
relating to Spain (€79.7 million of credit business carried out by UBI Banca International in
that country)8 and Argentina (€0.5 million), as well as uncovered short positions – which form part of normal trading activities – relating to Germany (-€521 million; -€422 million at the end
of the year) and France (-€583 million, -€675 million in December 2012).
Finally, French and Dutch government securities totalling €750 million matured in the first
quarter of 2013, held in the AFS portfolio of UBI Finance (€480 million of French BTFs and
€270 million of Dutch government securities). A further investment of €650 million was made in BTFs at the beginning of 2013, which
matured in the second quarter of the year. No further investments were made.
8 Receivables in respect of factoring amounting to €24.1 million for which the receivables purchased relate to government
counterparties and direct loans to government authorities amounting to €55.6 million (of which €50 million to the State Railways).
87
On 28th July 2011, the European Securities and Markets Authority (ESMA) published document No. 2011/266 relating to information on sovereign
debt risk required of listed companies that adopt IFRS.
Details of the exposures of the UBI Banca Group are given on the basis that, according to the instructions issued by this European supervisory authority, “sovereign debt” is defined as debt instruments issued by central and local governments and by government entities and also as loans granted to them.
The table below shows the distribution by maturity of Italian government securities held in
portfolio.
The average residual life of the AFS portfolio is 6.7 years, that of the HTM portfolio is 1.4
years, while that for government securities classified in the HFT portfolio is 0.86 years.
The comparative figures at the end of the year show an overall increase in investments
together with a partial change in the composition of portfolio in terms of maturities as follows:
an increase in the short-term component “up to 6 months”, up from 1.7% to 9.3% and in the intermediate components “1 year to 3 years” and “3 years to 5 years” which rose as a whole to
60.4% from 49.3%. On the other hand investments with longer maturities decreased. The “5
years to 10 years” and “over 10 years” components fell to 23.7% from 31.6% at the end of year.
(*) Net of the relative uncovered short positions.
UBI Banca Group: exposures to sovereign debt risk
Country / portfolio of classification
Figures in thousands of euroNominal
amount
Carrying
amountFair Value
Nominal
amount
Carrying
amountFair Value
- Italy 19,829,784 20,373,885 20,444,864 18,241,692 18,804,673 18,889,763
financial assets and liabilities held for trading (net exposure)4,214,050 4,170,237 4,170,237 3,365,175 3,324,579 3,324,579
available-for-sale financial assets 11,790,416 12,252,615 12,247,717 10,990,625 11,429,045 11,429,045
held-to-maturity investments 3,000,000 3,122,272 3,198,149 3,000,000 3,158,013 3,243,103
loans and receivables 825,318 828,761 828,761 885,892 893,036 893,036
- Spain 79,658 79,658 79,658 79,234 79,240 79,240
financial assets and liabilities held for trading (net exposure)- - - 200 206 206
loans and receivables 79,658 79,658 79,658 79,034 79,034 79,034
- Germany -500,000 -521,080 -521,080 -390,408 -422,323 -422,323
financial assets and liabilities held for trading (net exposure)-500,000 -521,080 -521,080 -390,408 -422,323 -422,323
- France -549,896 -582,789 -582,789 -168,867 -194,511 -194,511
financial assets and liabilities held for trading (net exposure)-550,000 -582,893 -582,893 -648,867 -674,536 -674,536
available-for-sale financial assets - - - 480,000 480,025 480,025
loans and receivables 104 104 104 - - -
- Holland 10 10 10 270,010 270,033 270,033
available-for-sale financial assets - - - 270,000 270,023 270,023
loans and receivables 10 10 10 10 10 10
- Argentina 2,416 483 483 2,591 561 561
financial assets and liabilities held for trading (net exposure)2,416 483 483 2,591 561 561
- Austria - - - 791 946 946
financial assets and liabilities held for trading (net exposure) - - - 791 946 946
Total on-balance sheet exposures 18,861,972 19,350,167 19,421,146 18,035,043 18,538,619 18,623,709
30.6.2013 31.12.2012
Maturities of Italian government securities
Figures in thousands of euro
Financial
assets held for
trading (*)
Available-for-
sale f inancial
assets
Held-to-maturity
investmentsTotal %
Financial
assets held for
trading (*)
Available-for-
sale f inancial
assets
Held-to-maturity
investmentsTotal %
Up to 6 months 1,616,635 209,418 - 1,826,053 9.3% 311,579 252 - 311,831 1.7%
Six months to one year 1,284,242 - - 1,284,242 6.6% 2,764,630 351,138 - 3,115,768 17.4%
One year to three years 1,269,310 4,761,354 3,122,272 9,152,936 46.8% 246,672 3,961,668 3,158,013 7,366,353 41.1%
Three years to five years - 2,646,960 - 2,646,960 13.6% 1,250 1,472,961 - 1,474,211 8.2%
Five years to ten years 10 2,204,770 - 2,204,780 11.3% 273 3,216,789 - 3,217,062 18.0%
Over ten years 40 2,430,113 - 2,430,153 12.4% 175 2,426,237 - 2,426,412 13.6%
Total 4,170,237 12,252,615 3,122,272 19,545,124 100.0% 3,324,579 11,429,045 3,158,013 17,911,637 100.0%
30.6.2013 31.12.2012
88
The table reports total
debt instruments other than sovereign debt
recognised among the
assets of the UBI Banca
Group as at 30th June
2013 (financial assets
available-for-sale, financial assets held for
trading, loans and
advances to banks and
loans and advances to
customers).
Finally to complete the
disclosures required by
the ESMA, in June 2013
(as also in March and in
December 2012) the Group held no credit
default products, nor did
the Group carry out any
transactions in those
instruments during the first half, either to increase its exposure or to acquire protection.
Issuer Nationality Carrying amount Fair Value Nominal amount
Corporate Italy 164,656 164,656 159,550
Corporate Holland 53,829 53,829 55,050
Corporate United States 204,802 204,802 219,098
Corporate Luxembourg 32,707 32,707 37,347
Corporate United Kingdom 9,345 9,345 8,166
Corporate India 16 16 14
Corporate Spain 37,211 37,211 34,579
Corporate Hungary 10,322 10,322 10,000
Corporate France 42,960 42,960 40,000
Corporate Switzerland 5,046 5,046 5,046
Total Corporate 560,894 560,894 568,850
Banking France 53,100 53,100 50,000
Banking Germany 2 2 3
Banking Italy 497,900 497,900 513,038
Banking Luxembourg 50,793 50,793 50,000
Banking United Kingdom 21,126 21,126 20,000
Banking Sweden 37,275 37,275 33,971
Banking Republic of Cyprus 112 112 9,500
Banking Switzerland 2,809 2,809 2,809
Total Banking 663,117 663,117 679,321
E.I.B. Luxembourg 10 10 10
Total Supranational 10 10 10
Total debt instruments 1,224,021 1,224,021 1,248,181
Debt instruments other than government securities recognised within consolidated
assets
figures in thousands of euro
30.6.2013
89
Exposures to some types of products
This section provides an update of the position of the UBI Banca Group with regard to some
types of financial instruments which, since the subprime mortgage crisis in 2007, are now considered at high risk.
Special purpose entities (SPEs)
The Group’s involvement in special purpose entities (SPEs9) mainly concerns the following
types:
1. entities formed to allow the issue of preference shares;
2. conventional securitisation transactions 10 performed by Group member companies in
accordance with Law No. 130 of 30th April 1999;
3. the issue of covered bonds, in accordance with Art. 7 bis of Law No,130/1999.
1. SPEs existed as at 30th June 2013 for the issue of preference shares used as innovative
equity instruments on international capital markets. These issues, which current
supervisory regulations allow to be included in the consolidated tier one capital, take the form of non redeemable instruments and they have particularly junior levels of
subordination. The preference shares included in the tier one capital amounted to
€337.747 million and they were issued by a number of the banks which formed the Group
prior to the merger.
2. The list of SPEs used for the securitisations in which the Group is involved is as follows:
Lombarda Lease Finance 4 Srl,
UBI Lease Finance 5 Srl,
24-7 Finance Srl, UBI Finance 2 Srl,
UBI Finance 3 Srl,
UBI SPV BPA 2012 Srl,
UBI SPV BPCI 2012 Srl,
UBI SPV BBS 2012 Srl.
The securitisation relating to mortgage loans regarding Albenza 3 Srl and Orio Finance Srl
was permanently closed down in May 2013.
The only securitisation existing as at 30th June 2013 regarding 24-7 Finance Srl is that
relating to mortgages.
The securitisations concerning 24-7 Finance Srl, UBI Lease Finance 5 Srl, UBI Finance 2 Srl, UBI Finance 3 Srl, UBI SPV BPA 2012 Srl, UBI SPV BPCI 2012 Srl and UBI SPV BBS
Srl were performed in order to create a portfolio of assets eligible as collateral for
refinancing with the European Central Bank, consistent with Group policy for the
management of liquidity risk.
These were carried out on the following: performing residential mortgages of the former B@nca 24-711 (24-7 Finance Srl); lease contracts of UBI Leasing (UBI Lease Finance 5 Srl);
performing loans to small to medium-size businesses of Banco di Brescia (UBI Finance 2
Srl); performing loans to businesses of Banca Popolare di Bergamo (UBI Finance 3 Srl);
performing loans to small to medium-size businesses of Banca Popolare di Ancona (UBI SPV
BPA 2012 Srl), Banca Popolare Commercio e Industria (UBI SPV BPCI 2012 Srl) and Banco
di Brescia (UBI SPV BBS 2012 Srl). In the securitisations in question, the senior securities issued by the SPEs – assigned a
rating – are listed.
9 Special Purpose Entities (SPEs) are special companies formed to achieve a determined objective.
10 With normal securitisations the originator sells the portfolio to a special purpose entity which then issues tranches of asset-backed securities in order to purchase it. With a synthetic securitisation, on the other hand, the originator purchases protection for a pool
of assets and transfers the credit risk attaching to the portfolio – either fully or in part – by using credit derivatives such as CDSs (credit default swaps) and CLNs (credit-linked notes) or by means of personal guarantees.
11 The merger of B@nca 24-7 into UBI Banca took place on 23rd of July 2012.
90
The SPEs listed above are included in the consolidated accounts because these companies
are in reality controlled, since their assets and liabilities were originated by Group member companies.
3. With regard to the issue of covered bonds, the SPEs UBI Finance Srl and UBI Finance CB 2
Srl were created for the purchase of loans from banks in order to create cover pools for
covered bonds issued by the Parent.
The issue of covered bonds is designed to diversify the sources of funding and also to contain its cost.
Transfers were made in the first half of 2013 to the SPEs UBI Finance Srl and UBI Finance
CB2 Srl involving assets of €1.2 billion (with effect for accounting purposes from 1st
January 2013) and €0.3 billion (with effect for accounting purposes from 1st April 2013)
respectively, held by BPA, BPCI, Banca Carime and Banco di Brescia. As at 30th June 2013, UBI Banca had performed placements of covered bonds for a total of
€6.4 billion nominal for a maximum issuance of €10 billion and for a total of €2.3 billion
nominal as part of a second programme for a maximum issuance of €5 billion. The
originator banks issued subordinated loans to the SPE UBI Finance Srl and to the SPE UBI
Finance CB2 Srl, equal to the value of the loans progressively transferred, in order to fund
the purchase. At the end of June these loans amounted to €12.9 billion (€11.6 billion in December 2012) for UBI Finance Srl and €3.3 billion for UBI Finance CB2 (€3 billion in
December 2012).
Exposures are present in the Group which relate solely to the SPEs formed for the
securitisations mentioned and they all fall within the scope of the consolidation.
Ordinary lines of liquidity existed as at 30th June 2013 granted by the Parent to the SPE 24-7
Finance Srl for a total of €24.4 million, entirely drawn on (€24.4 million also entirely drawn on
at the end of 2012).
Following the downgrades performed by the rating agencies Moody’s and Fitch in 2011, UBI Banca dispersed a liquidity facility amount to UBI Finance 2 for €16.3 million and to UBI
Finance 3 for €28 million. In the meantime the originator Banca Popolare di Bergamo had
disbursed a subordinated loan designed to cover potential payouts connected with specific
risks (“set-off risk” relating to the securitised assets). The initial sum of €50 million, also
disbursed in October 2011, was increased during 2012 by a further €72.5 million to meet the same risks associated with the revolving credit portfolio transferred in 2012. Those lines
remained in existence as at 30th June 2013.
The following subordinated loans were disbursed for the three transactions completed in 2012
as a further form of guarantee when the securities were issued: €23 million to UBI SPV BBS
2012, €27 million to UBI SPV BPA 2012 and €26 million to UBI SPV BPCI 2012. Those lines
remained in existence as at 30th June 2013.
The securitisations (except for those structured in 2012) were backed by swap contracts where
the main objective is to normalise the flow of interest generated by the transferred or securitised portfolio, providing de facto immunisation to the SPE against interest rate risk. As
a consequence of the downgrading of UBI Banca, it became necessary to provide margin
deposits for the swap contracts entered into between the Parent or other Group companies and the SPEs for the securitisations.
Margin accounts were opened with an eligible institution which was the London Branch of
Bank of New York Mellon (ratings: Moody’s Aa1 stab/S&P AA- neg/Fitch AA stab). The margin
deposits were paid starting on 26th October 2011 for an initial total amount of a little more
than €1,015 million, of which €717 million for the covered bond programme and €298 million for the securitisations.
The total balance in June 2013 was €630 million, of which €340 million for the covered bond
programme and €290 million for the internal securitisation transactions.
No exposures exist to SPEs or other conduit operations with underlying securities or investments linked to United States subprime and Alt-A loans.
91
The total assets of SPEs relating to securitisations and to covered bonds amounted to €25.1
billion (€24.8 billion at the end of 2012). Details by asset class are given in the table below:
The distribution by geographical location and credit rating of the securities issued relating to the securitisations by the SPEs Lombarda Lease Finance 4 and UBI Lease Finance 5 are given
below:
Securitisations of UBI Leasing: distribution of the underlying assets and of the securities issued
(30th June 2013)
DISTRIBUTION BY GEOGRAPHICAL AREA DISTRIBUTION OF ASSETS BY CREDIT RATING
SPE underlying assets
Figures in millions of euro
Measurement Gross of Net of Gross of Net of
Entity Total assets Class of underlying asset Accounting criteria impairment impairment impairment impairment
Classification adopted losses losses losses losses
Albenza 3 Srl - Mortgages L&R CA - - 11.2 11.2
24-7 Finance 1,668.5 Mortgages L&R CA 1,441.2 1,432.5 1,486.4 1,479.3
Lease Finance 4 77.8 Leasing L&R CA 60.1 59.6 80.0 79.3
UBI Lease Finance 5 3,200.0 Leasing L&R CA 2,858.8 2,858.8 3,106.9 3,106.9
Orio Finance 3 - RMBS Notes (ALBENZA 3 Srl) L&R CA - - 12.2 12.2
UBI Finance 12,235.5 Mortgages L&R CA 11,987.3 11,970.4 11,058.5 11,043.8
UBI Finance CB2 2,940.3 Mortgages L&R CA 2,858.8 2,849.5 2,706.1 2,698.9
UBI Finance 2 778.2 Loans to SMEs L&R CA 709.2 706.2 754.9 752.2
UBI Finance 3 2,022.8 Loans to businesses L&R CA 1,900.0 1,890.9 2,143.1 2,135.3
UBI SPV BBS 2012 700.8 Loans to SMEs L&R CA 686.9 682.4 771.5 768.3
UBI SPV BPA 2012 803.7 Loans to SMEs L&R CA 774.5 768.8 885.4 880.9
UBI SPV BPCI 2012 655.9 Loans to SMEs L&R CA 654.0 651.0 733.8 731.2
Total impaired assets, mortgages and loans 926.5 817.4 731.3 643.3
Total impaired assets, leasing 410.6 359.4 388.5 353.3
TOTAL 25,083.5 25,267.9 25,046.9 24,869.8 24,696.1
Classification of underlying assets of the securitisation 31.12.201230.6.2013
51.67%
9.85%
4.66%
8.10%
2.16%
4.08%
4.14%5.96% 9.38%
Lombardy Veneto Piedmont
Latium Trentino Alto Adige Emilia Romagna
Campania Marches Other
71.53%
0.52%
27.95%
AAA BBB unrated
92
Exposures in ABS, CDO, CMBS and other structured credit products
As at 30th June 2013, the UBI Banca Group held direct investments in ABS instruments for a
residual amount of €0.2 million (unchanged compared to December 2012), consisting of ABS
instruments recognised within financial assets held for trading, relating to the subsidiary UBI Banca International, with underlying of European origin.
Own securitisations, eliminated when consolidating the accounts, totalled €9.1 billion and
related mainly to ABS instruments (including €6 billion of senior securities and €3.1 billion of
junior securities). Approximately €4.8 billion of these securities as at 30th June 2013 were
used as collateral for advances from the ECB. Further details are provided in the previous section, “The interbank market and the liquidity situation”, which may be consulted.
In addition to the direct exposures, hedge funds or funds of hedge funds were identified among
the assets present in Group portfolios with exposures to CDO and CMBS structured credit
products. Investment in these funds as at 30th June 2013 amounted to €126.5 million (net of
impairment losses/reversals) and it presented low percentages of exposure. Total indirect exposure to CDOs and CMBSs amounted to approximately €0.5 million (€3.3 million in
December 2012).
Other exposures to subprime and Alt-A mortgages and monoline insurers
Again in June 2013 indirect exposures to subprime and Alt-A mortgages and to monoline insurers existed that were contained in hedge funds or funds of hedge funds held by the
Parent. The percentages of exposure to subprime and Alt-A mortgages were again low (no fund
had a percentage exposure of greater than 0.4%), with total exposure to subprime, Alt-A
mortgages and monoline insurers of approximately €0.4 million (€0.3 million as at 31st
December 2012).
Leveraged Finance The term leveraged finance is used in the UBI Banca Group to refer to finance provided for a
company or an initiative which has debt that is considered higher than normal on the market
and is therefore considered a higher risk. Usually this finance is used for specific acquisition
purposes (e.g. the acquisition of a company by other companies – either directly or through
vehicles/funds – owned by internal [buy-in] or external [buy-out] management teams). They are characterised by “non investment grade” credit ratings (less than BBB-) and/or by
remuneration that is higher than normal market levels.
Leveraged finance business, performed in the past by Centrobanca, has been centralised at
UBI Banca following the merger of that company into the Parent on 6th May 2013. It is
regulated by the Group Credit Risk Policy designed to combine the achievement of budget
targets in terms of business volumes and profits with appropriate management of the attached risks.
Briefly, operations are based on a maximum investment ceiling, reviewed annually and
allocated on the basis of rating classes for operations according to predefined maximum
percentages. The system of limits is calculated to seek appropriate diversification both in
terms of sector and the concentration of risk on single companies or Group counterparties.
The table below
summarises on- and off-
balance sheet exposure for
leveraged finance by UBI
Banca. These loans (on-balance sheet) accounted
for 0.6% of total UBI Banca Group loans. The amounts shown as at 30th June 2013 relate to
112 positions (counterparties) for a total average net exposure per position of €5.5 million.
Four positions exist with exposures of greater than €20 million, all relating to loans and
receivables, and they account for around 19% of the total.
used impairment used impairment
608.1 -14.1 26.0 -1.7
644.7 -20.8 27.1 -2.3 31 December 2012
30 June 2013
UBI Banca leveraged finance business
figures in millions of euroOn-balance sheet exposure Unsecured guarantees
gross exposure to customers gross exposure to customers
93
The charts below show the distribution of leveraged exposures by geographical area and by
sector.
Distribution of UBI Banca leveraged exposures
(the figures as at 31st December 2012 are given in brackets)
EXPOSURE BY GEOGRAPHICAL AREA EXPOSURE BY SECTOR
Residual exposures also exist within the Group – approximately €178 million (€185 million as
at 31st December 2012) – relating to leveraged finance transactions performed before this type
of business was centralised at UBI Banca. They were performed by the network banks as a
whole relating to a total of 23 positions with average exposure per transaction of €7.7 million.
The distribution by bank is as follows: Banco di Brescia (€87 million), Banca Popolare di Bergamo (€55.8 million), Banca Popolare Commercio e Industria (€5.8 million), Banca
Regionale Europea (€14.7 million) and Banca di Valle Camonica (€14.3 million).
Europe18% (21%)
Italy80% (76%)
Other2% (3%)
manufacturing sector
64% (68%)
commerce and services
36% (32%)
94
Financial derivative instruments for trading with customers
The analysis performed as at 30th June 2013 for internal monitoring purposes confirms that
the risks assumed by customers continue to remain generally low and they outlined a
conservative profile for UBI Group business in OTC derivatives with customers.
A quantitative data update at the end of June 2013 showed the following:
- a reduction in the total negative mark-to-market for customers, which stood at 5.34% of the
notional amount of the contracts compared to 6.95% at the end of December 2012;
- the notional amount of existing contracts, totalling €6.205 billion, was attributable to
interest rate derivatives amounting to €5.552 billion and currency derivatives amounting to
€0.615 billion, plus a marginal notional amount for commodities contracts of €38 million;
- transactions in hedging derivatives account for approximately 98.7% of the notional amounts traded for interest rate derivatives and 94.5% of the notional amounts for
currency derivatives;
- the total net mark-to-market (interest rate, currency and commodities derivatives)
amounted to approximately -€322 million. Those contracts with a negative mark-to-market for customers were valued at -€332 million.
The rules governing trading in OTC derivatives with customers are contained in the “Policy for the trading, sale and subscription of financial products” and in the relative regulations to implement it, updated in 2013, as follows:
• customer segmentation and classes of customers associated with specific classes of products, stating that the purpose of the derivatives transactions must be hedging and that transactions containing speculative elements must be of a residual nature;
• rules for assessing the appropriateness of transactions, defined on the basis of the products sold to each class of customer;
• principles of integrity and transparency on which the range of OTC derivatives offered to customers must be based, in compliance with the guidelines laid down by the Italian Banking Association (and approved by the Consob) for illiquid financial products;
• rules for assessing credit exposure, which grant credit lines with maximum limits for trading with “qualified”, “professional” and “non-individual retail” counterparties and provide credit lines for single transactions for trading with individual retail counterparties, while counterparty risk is assessed on the basis of Bank of Italy circular No. 263/2006;
• rules for managing restructuring operations, while underlining their exceptional nature; • the rules for the settlement of transactions in OTC derivative instruments with customers that are
subject to verbal or official dispute; • the catalogue of products offered to customers and the relative credit equivalents.
95
OTC interest rate derivatives: details of instrument types and classes of customer
Data as at 30th June 2013
Type of instrument Customer classificationNumber of
transactionsNotional MtM of which negative MtM
Purchase of caps Qualified 23 51,452,433.34 75,012.22 -
3: Professional 47 50,460,278.61 91,146.63 -
2: Non private individual retail 1,275 388,124,403.71 1,777,088.41 -
1: Private individual retail 1,228 137,851,675.30 523,048.09 -
Purchase of caps Total 2,573 627,888,790.96 2,466,295.35 -
Capped swaps Qualified 36 137,600,147.60 -2,792,485.89 -2,792,485.89
3: Professional 58 211,224,512.84 -6,742,590.98 -6,742,590.98
2: Non private individual retail 1,255 813,695,951.89 -19,042,104.96 -19,042,104.96
1: Private individual retail 2,338 253,978,956.62 -4,394,167.87 -4,394,167.87
Capped swaps Total 3,687 1,416,499,568.95 -32,971,349.70 -32,971,349.70
IRS Plain Vanilla Qualified 38 135,492,897.82 -9,933,767.14 -9,934,652.44
3: Professional 250 1,179,886,010.99 -88,137,394.98 -88,149,394.44
2: Non private individual retail 1,074 1,602,781,977.73 -120,286,900.41 -120,734,603.80
1: Private individual retail 237 46,805,061.55 -1,874,694.39 -1,885,038.43
IRS Plain Vanilla Total 1,599 2,964,965,948.09 -220,232,756.92 -220,703,689.11
IRS Step Up Qualified 3 3,746,855.67 -500,579.04 -500,579.04
3: Professional 31 247,653,140.19 -36,778,261.76 -36,778,261.76
2: Non private individual retail 50 116,625,291.03 -26,470,283.67 -26,470,283.67
1: Private individual retail 2 1,185,323.81 -117,571.46 -117,571.46
IRS Step up Total 86 369,210,610.70 -63,866,695.93 -63,866,695.93
Purchase of collars Qualified 1 6,028,165.21 -380,095.46 -380,095.46
3: Professional 1 7,500,000.00 -261,264.70 -261,264.70
2: Non private individual retail 7 9,694,062.25 -464,135.10 -464,135.10
Purchase of collars Total 9 23,222,227.46 -1,105,495.26 -1,105,495.26
Total Class 1: hedging derivatives 7,954 5,401,787,146.16 -315,710,002.46 -318,647,230.00
Class 1: % of Group total 99.19% 97.29% 97.57% 97.59%
Purchase of caps with KI/KO 3: Professional 2 19,582,692.46 -289,382.17 -289,382.17
2: Non private individual retail 4 4,811,132.00 -48,891.88 -48,891.88
Purchase of caps with KI/KO Total 6 24,393,824.46 -338,274.05 -338,274.05
Purchase of collars with KI/KO2: Non private individual retail 2 5,160,217.54 -878,822.97 -878,822.97
Purchase of collars with KI/KO Total 2 5,160,217.54 -878,822.97 -878,822.97
IRS Convertible Qualified 1 10,000,000.00 -591,399.83 -591,399.83
3: Professional 7 12,390,592.02 -322,275.21 -322,275.21
2: Non private individual retail 13 26,360,806.01 -1,568,834.51 -1,568,834.51
IRS Convertible Total 21 48,751,398.03 -2,482,509.55 -2,482,509.55
Total Class 2: hedging derivatives with possible exposure 29 78,305,440.03 -3,699,606.57 -3,699,606.57
to contained financial risks
Class 2: % of Group total 0.36% 1.41% 1.14% 1.13%
3 a
IRS Range 3: Professional 4 12,500,000.00 -593,922.22 -593,922.22
2: Non private individual retail 28 52,400,000.00 -3,314,601.17 -3,314,601.17
IRS Range Total 32 64,900,000.00 -3,908,523.39 -3,908,523.39
Total Class 3a: partial hedging derivatives and 32 64,900,000.00 -3,908,523.39 -3,908,523.39
maximum pre-established loss
3 b
Gap floater swaps 2: Non private individual retail 2 2,484,840.00 -250,998.64 -253,218.21
Gap floater swaps Total 2 2,484,840.00 -250,998.64 -253,218.21
IRS Range stability 3: Professional 1 4,500,000.00 -12,773.18 -12,773.18
2: Non private individual retail 1 500,000.00 1,490.79 -
IRS Range stability Total 2 5,000,000.00 -11,282.39 -12,773.18
Total Class 3b: speculative derivatives and maximum loss 4 7,484,840.00 -262,281.03 -265,991.39
unquantifiable
Total Class 3: derivatives not for hedging 36 72,384,840.00 -4,170,804.42 -4,174,514.78
Class 3: % of Group total 0.45% 1.30% 1.29% 1.28%
Total UBI Banca Group 8,019 5,552,477,426.19 -323,580,413.45 -326,521,351.35
Product
class
1
2
96
OTC currency derivatives: details of instrument types and classes of customer
Data as at 30th June 2013
Product
classType of instrument Customer classification
Number of
transactionsNotional MtM
of which negative
MtM
Vanilla currency options purchased by the customer Qualified 4 396,316.68 622.48 -
Vanilla currency options purchased by the customer Total 4 396,316.68 622.48 -
Forward synthetic Qualified 30 14,020,156.65 163,544.91 -33,594.01
3: Professional 240 194,917,324.05 2,307,258.23 -427,890.97
2: Non private individual retail 36 16,501,655.80 28,128.75 -68,044.14
Forward synthetic Total 306 225,439,136.50 2,498,931.89 -529,529.12
Plafond Qualified 22 11,830,641.14 -8,246.93 -62,899.07
3: Professional 236 176,060,808.05 867,265.26 -1,072,615.61
2: Non private individual retail 239 74,780,751.06 2,243.04 -600,788.04
Plafond Total 497 262,672,200.25 861,261.37 -1,736,302.72
Currency collars 3: Professional 3 1,082,777.56 -3,400.82 -3,400.82
2: Non private individual retail 2 239,965.85 -246.26 -390.32
Currency collars Total 5 1,322,743.41 -3,647.08 -3,791.14
Total Class 1: hedging derivatives 812 489,830,396.84 3,357,168.66 -2,269,622.98
Class 1: % of Group total 74.43% 79.62% - 79.20%
2
Knock in collars 3: Professional 57 10,274,633.55 -4,806.96 -40,952.44
Knock in collars Total 57 10,274,633.55 -4,806.96 -40,952.44
Knock in forward 3: Professional 85 67,841,471.56 485,527.64 -281,255.82
2: Non private individual retail 23 6,959,494.88 42,866.71 -20,577.00
Knock in forwards Total 108 74,800,966.44 528,394.35 -301,832.82
New collars 3: Professional 1 5,725,863.29 -24,262.48 -24,262.48
2: Non private individual retail 2 907,782.48 -1,740.21 -1,740.21
New collars Total 3 6,633,645.77 -26,002.69 -26,002.69
Total Class 2: hedging derivatives with possible exposure 168 91,709,245.76 497,584.70 -368,787.95
to contained financial risks
Class 2: % of Group total 15.40% 14.91% - 12.87%
Knock out forward 3: Professional 4 1,415,097.24 11,878.84 -
Knock out forward Total 4 1,415,097.24 11,878.84 -
Knock out knock in forward Qualified 3 458,015.28 6,005.49 -
3: Professional 52 21,179,937.07 206,208.01 -8,922.20
Knock out knock in forwards Total 55 21,637,952.35 212,213.50 -8,922.20
Vanilla currency options sold by the customer 3: Professional 52 10,650,061.90 -218,227.65 -218,227.65
Vanilla currency options sold by the customer Total 52 10,650,061.90 -218,227.65 -218,227.65
Total Class 3: derivatives not for hedging 111 33,703,111.49 5,864.69 -227,149.85
Class 3: % of Group total 10.17% 5.48% - 7.93%
Total UBI Banca Group 1,091 615,242,754.09 3,860,618.05 -2,865,560.78
1
3b
97
OTC commodities derivatives: details of instrument types and classes of customer
Data as at 30th June 2013
Type of instrument Customer classificationNumber of
transactionsNotional MTM of which negative MtM
Commodity swaps Qualified 4 2,961,564.43 -178,718.31 -193,899.00
3: Professional 30 15,021,346.20 -765,203.08 -837,203.00
2: Non private individual retail 4 7,375,150.00 -60,974.00 -85,426.00
Commodity swaps Total 38 25,358,060.63 -1,004,895.39 -1,116,528.00
Forward synthetic commodities 3: Professional 11 6,229,350.00 -828,024.00 -828,024.00
2: Non private individual retail 4 1,571,100.00 -53,525.00 -58,017.00
Forward synthetic commodities Total 15 7,800,450.00 -881,549.00 -886,041.00
Commodity collars Qualified 1 2,214,000.00 -151,188.00 -151,188.00
Commodity collars Total 1 2,214,000.00 -151,188.00 -151,188.00
Total Class 2: hedging derivatives with possible exposure 54 35,372,510.63 -2,037,632.39 -2,153,757.00
to contained financial risks
Class 2: % of Group total 94.74% 93.83% - 99.42%
3 a
Commodity spread swaps Qualified 2 1,407,042.90 -11,496.23 -12,544.21
Commodity spread swaps Total 2 1,407,042.90 -11,496.23 -12,544.21
2 1,407,042.90 -11,496.23 -12,544.21
3 b Vanilla currency options sold by the customer 3: Professional 1 916,950.00 -6.00 -6.00
Vanilla currency options sold by the customer Total 1 916,950.00 -6.00 -6.00
1 916,950.00 -6.00 -6.00
Total Class 3: derivatives not for hedging 3 2,323,992.90 -11,502.23 -12,550.21
Class 3: % of Group total 5.26% 6.17% - 0.58%
Total UBI Banca Group 57 37,696,503.53 -2,049,134.62 -2,166,307.21
TOTAL UBI BANCA GROUP 9,167 6,205,416,683.81 -321,768,930.02 -331,553,219.34
Product class
2
Total Class 3a: partial hedging derivatives with pre-established maximum
loss
Total Class 3b: speculative derivatives with unquantifiable maximum loss
98
OTC derivatives: first 5 counterparties by bank (figures in euro)
Data as at 30th June 2013
Bank Classification MtM of which negative MtM
UBI Banca 3: Professional -28,786,151 -28,786,151
3: Professional -24,614,318 -24,614,318
3: Professional -5,278,304 -5,278,304
3: Professional -3,564,510 -3,564,510
2: Non private individual retail -2,423,970 -2,423,970
Banca Popolare Commercio & Industria 2: Non private individual retail -6,502,843 -6,502,843
Qualified -3,572,218 -3,572,218
3: Professional -2,405,810 -2,405,810
2: Non private individual retail -2,063,306 -2,063,306
Qualified -1,354,818 -1,354,818
Banca Popolare di Ancona 2: Non private individual retail -6,258,103 -6,258,103
2: Non private individual retail -1,563,709 -1,563,709
2: Non private individual retail -1,433,190 -1,433,190
3: Professional -1,242,478 -1,242,478
3: Professional -1,092,891 -1,092,891
Banca Regionale Europea 3: Professional -3,759,524 -3,759,524
2: Non private individual retail -1,608,587 -1,608,587
3: Professional -924,166 -924,166
3: Professional -888,451 -888,451
2: Non private individual retail -718,265 -718,265
Banco di Brescia 3: Professional -2,989,133 -2,989,133
3: Professional -1,783,178 -1,783,178
Qualified -1,747,820 -1,747,820
2: Non private individual retail -1,568,069 -1,568,069
2: Non private individual retail -1,375,408 -1,375,408
Banca Popolare di Bergamo 3: Professional -2,619,307 -2,619,307
2: Non private individual retail -2,540,787 -2,540,787
3: Professional -1,327,244 -1,327,244
2: Non private individual retail -1,312,448 -1,312,448
2: Non private individual retail -1,201,586 -1,201,586
Banca Carime 3: Professional -710,286 -710,286
2: Non private individual retail -420,293 -420,293
2: Non private individual retail -420,291 -420,291
2: Non private individual retail -170,431 -170,431
3: Professional -71,697 -71,697
Banca di Valle Camonica 3: Professional -442,415 -442,415
2: Non private individual retail -356,046 -356,046
2: Non private individual retail -312,773 -312,773
2: Non private individual retail -226,618 -226,618
3: Professional -221,446 -221,446
99
Equity and capital adequacy
Changes in consolidated equity
The equity of the UBI Banca Group as at 30th June 2013, inclusive of profit for the period,
amounted to €9,861.8 million, an increase compared to €9,737.9 million at the end of 2012.
As shown in the table “Changes in the consolidated equity of the Group in the first half of
2013”, the increase of €123.9 million is the result of the following;
the allocation of €48.6 million of 2012 consolidated profit to dividends and other uses1;
an improvement by €122.7 million in the negative balance on the valuation reserves – generated mainly by the impact of comprehensive income of €122.1 million – which
involved the following: +€117.3 million for available-for-sale financial assets; +€4.1 million
of actuarial gains/losses
relating to defined benefit
pension plans; +€0.7 million for cash flow hedges; +€0.6
million for special revaluation
laws;
a decrease on aggregate
in other reserves of
profits of €1.4 million;
1 The profit was then fully drawn on with an allocation to reserves of €34.1 million.
Figures in thousands of euro Equityof which:
Profit for the period
Equity and profit for the period in the accounts of the Parent 9,027,680 144,020
Effect of the consolidation of subsidiaries including joint ventures 1,027,190 115,626
Effect of measuring other significant equity investments using the equity method 53,864 31,360
Dividends received during the period - -221,888
Other consolidation adjustments (including the effects of the PPA) -246,909 -16,185
Equity and profit for the period in the consolidated accounts 9,861,825 52,933
Reconciliation between equity and profit for the period of the Parent with consolidated equity as at 30th June 2013
and profit for the period then ended
Changes in consolidated equity of the Group in the first half of 2013
30.6.2013
Figures in thousands of euro
Share capital: 2,254,368 - - - 3 - - 2,254,371
a) ordinary shares 2,254,368 - - - 3 - - 2,254,371
b) other shares - - - - - - - -
Share premiums 4,716,861 - - - 3 - - 4,716,864
Reserves 3,259,365 82,708 -48,585 -1,399 - - - 3,292,089
Valuation reserves -571,045 - - 639 - - 122,095 -448,311
Treasury shares -4,375 - - -1,746 - - - -6,121
Profit for the period 82,708 -82,708 - - - - 52,933 52,933
Equity attributable to the shareholders of the Parent 9,737,882 - -48,585 -2,506 6 - 175,028 9,861,825
Equity
attributable to
the
shareholders of
the Parent
Balances as at
31.12.2012
Allocation of prior year
profit
Changes January - June 2013
Changes in
reserves
Equity transactions Consolidated
comprehensi
ve incomeReserves Stock options
Dividends
and other
uses
New share
issues
Valuation reserves attributable to the Group: composition
Figures in thousands of euro 30.6.2013 31.12.2012
Available-for-sale financial assets -443,931 -561,244
Cash flow hedges -4,261 -4,937
Currency translation differences -243 -243
Actuarial gains/losses for defined benefit pension plans -60,947 -65,053
Special revaluation laws 61,071 60,432
Total -448,311 -571,045
100
the purchase of €1.7 million of treasury shares by the Parent in the first quarter for
use in the incentive scheme for the “Top Management of the Group”;
the recognition of profit for the period of €52.9 million.
As shown in the table, the increase mentioned above of €117.3 million in the “fair value reserve for available-for-sale financial assets” is attributable mainly to debt instruments held
in portfolio (up by €111.9 million to -€524.2 million net of tax and non-controlling interests)
and in particular to Italian government securities. The relative reserve increased by €103.8
million (of which +€92.8 million relating to Parent) up to -€485 million (-€588.8 million in
December 2012; - €623.7 million in March 2013)2.
The reserve relating to debt securities recorded an increase in fair value of €159.6 million in
the first half of 2013, of which €138 million relating to the Parent (over 90% regarding Italian
government securities), €11 million to Lombarda Vita and €9.6 million to IW Bank (almost
entirely attributable to the Italian government securities portfolio).
The table also shows transfers to the income statement of negative reserves of €13.1 million, of which €10.7 million attributable to UBI Banca composed of €6.9 million of profit on the sale of
securities and €3.8 million (net of tax) following the impairment of a financial security held in
the merged Centrobanca’s AFS portfolio.
The decreases, however, include reductions in fair value of €36.3 million – of which €23
million relating to UBI Banca (mainly on government securities) and €12.1 million to
Lombarda Vita – as well as transfers to the income statement of positive reserves from disposals of €26.7 million, of which €22.6 million by the Parent and €4.1 million by Lombarda
Vita.
As concerns equity instruments, increases in fair value came to €17.9 million, almost entirely
related to the Parent (€17.3 million) as follows: €9.4 million relating to an interest held in S.A.C.B.O.; €5.5 million to Istituto Centrale Banche Popolari Italiane and €2.1 million to SIA.
2 As already reported, as at 30th September 2011 the negative available-for-sale reserve for Italian government securities used as a
capital filter in the EBA exercise on capital amounted to -€868 million.
Figures in thousands of euro Positive reserve Negative reserve Total Positive reserve Negative reserve Total
1. Debt instruments 29,292 -553,453 -524,161 231,534 -867,565 -636,031
2. Equity instruments 80,892 -3,150 77,742 80,216 -4,889 75,327
3. Units in O.I.C.R.
(collective investment instruments) 5,626 -3,138 2,488 11,444 -11,984 -540
4. Financing - - - - - -
Total 115,810 -559,741 -443,931 323,194 -884,438 -561,244
31.12.2012
Fair value reserves of available-for-sale financial assets attributable to the Group: composition
30.6.2013
Valuation reserves of available-for-sale financial assets attributable to the Group: changes in the period
Figures in thousands of euro Debt instrumentsEquity
instruments
OICR units (collective investment
instruments)
Financing Total
1. Opening balances as at 1st January 2013 -636,031 75,327 -540 - -561,244
2. Positive changes 174,840 18,548 5,556 - 198,944
2.1 Increases in fair value 159,566 17,855 3,614 - 181,035
2.2 Transfer to income statement of negative reserves 13,052 692 1,841 - 15,585
- following impairment losses 5,829 630 1,817 - 8,276
- from disposal 7,223 62 24 - 7,309
2.3 Other changes 2,222 1 101 - 2,324
3. Negative changes -62,970 -16,133 -2,528 - -81,631
3.1 Reductions in fair value -36,284 -7,583 -2,507 -46,374
3.2 Impairment losses - - - -
3.3 Transfer to income statement of positive reserves: from disposal -26,686 -8,549 -20 -35,255
3.4 Other changes - -1 -1 -2
4. Closing balances as at and for the period ended 30th June 2013 -524,161 77,742 2,488 - -443,931
101
Reductions in fair value amounting to €7.6 million were attributable to the Parent (-€5.8 million) and to Lombarda Vita (-€1.4 million). They included €5.4 million relating to the
interest held in Intesa Sanpaolo. The table also shows transfers of positive reserves to the
income statement from disposals of €8.5 million, almost entirely attributable to UBI Banca, of
which €6.1 million relating to the investment in Intesa Sanpaolo and €1.4 to million Unione
Fiduciaria.
The share capital of UBI Banca
The table summarises changes in the share capital of the Parent in the first half.
Not all the Centrobanca non-controlling
shareholders exercised their right to sell
or to withdraw in relation to the resolution to merge the company into
UBI Banca. As a consequence, on 22nd
May 2013 the Parent issued 1,346 new
shares with dividend entitlement from
1st January 2013 (the section “The scope of the consolidation” in the
condensed consolidated interim report
may be consulted for further details).
Following the exercise of conversion
rights held by subscribers of the bond “UBI 2009/2013 convertibile con facoltà di rimborso in azioni”, 16 bonds were
presented for conversion in January
2013 with a nominal value of €12.75
each (total nominal value of €204),
which gave rise on 5th February to the issue of 16 new shares with a nominal
value of €2.5 each and dividend
entitlement from 1st January 2012, with
payment in cash of the 16 residual
fractions3. In June, 84 bonds (with a total nominal
value of €1,071) were presented for conversion, which gave rise to the issue, on the 3rd July
2013, of 84 new shares with a nominal value of €2.5 each and dividend entitlement from 1st
January 2013, with payment in cash of the 0.84 residual fractions.
A further 120 bonds (with a nominal value of €1,530) were presented for conversion in the
period from 1st to 3rd July 2013 in relation to the provisions of article 5, paragraph 4 of the Bond Regulations – the possibility of exercising conversion rights within the five working days
prior to maturity of the bond. This gave rise to the issue on the 10th July 2013 of 121 new
shares and payment in cash of the 0.20 residual fractions. Consequently at the date of this report, the share capital of UBI Banca Scpa had risen to €2,254,371,430 divided into 901,748,572 shares with a nominal value of €2.5 each. The bond “UBI 2009/2013 convertibile con facoltà di rimborso in azioni” matured on 10th July
2013. The 50,128,020 bonds still outstanding were redeemed in cash on the same date for a
total of €639,132,255 (together with the last annual interest payment), in accordance with
decisions approved by the Management Board and by the Supervisory Board on 28th May and
30th May 2013 respectively, in view of the capital strength and good liquidity position of the
Group.
3 The distribution of the 2011 dividend drawn from the extraordinary reserve involved a change in the conversion ratio (originally set
at 1 new share for each bond) to the new ratio of 1.01497 (rounded to 1.01) UBI Banca shares for each convertible bond with a
nominal value of €12.75 presented for conversion.
Ordinary sharesNominal value
2.50 euro
A. Shares as at 1st January 2013 901,747,005 2,254,367,512.50
- fully paid up 901,747,005 2,254,367,512.50
- not fully paid up - -
A.1 Treasury shares (-) -1,200,000 -3,000,000.00
A.2 Outstanding shares: initial number 900,547,005 2,251,367,512.50
B. Increases 1,362 3,405.00
B.1 New issues 1,362 3,405.00
- by payment: 1,362 3,405.00
- business combinations 1,346 3,365
- conversion of bonds 16 40.00
- exercise of warrants - -
- other - -
- free of charge: - -
- in favour of employees - -
- in favour of directors - -
- other - -
B.2 Sale of treasury shares - -
B.3 Other changes - -
C. Decreases 500,000 1,250,000
C.1 Cancellation - -
C.2 Purchase of treasury shares 500,000 1,250,000
C.3 Company disposal operations - -
C.4 Other changes - -
D.
Shares outstanding: final number as at 30th
June 2013 900,048,367 2,250,120,917.50
D.1 Treasury shares (+) 1,700,000 4,250,000.00
D.2 Shares as at the end of period 901,748,367 2,254,370,917.50
- fully paid up 901,748,367 2,254,370,917.50
- not fully paid up - -
Share capital - Number of shares of the Parent; changes in the first
half
102
As already reported in previous reports, on 28th February 2013 – in implementation of a shareholders' resolution approved on 28th April 2012 concerning the purchase of treasury
shares for use in the incentive scheme for the “Top Management of the Group” – UBI Banca
proceeded to purchase a total of 500,000 treasury shares. The purchases were made at an
average price of €3.4911 per share. The transactions were performed on the regulated market
in compliance with the limits set in the shareholders’ authorisation, with the provisions of the
law and the regulations applicable, inclusive of EC Regulation 2273/2003, and with admissible market practices.
As a result of those purchases, UBI Banca holds a total of 1,700,000 treasury shares,
accounting for approximately 0.19% of the current share capital.
The purchases made, for use entirely in the incentive schemes, currently account for approximately one third of the total shares to be assigned on the basis of the results achieved under the 2011 and 2012 incentive schemes. Assignment of the shares will be deferred from 3 to 5 years from the vesting of the incentive.
The remaining shares may be used to cover incentive schemes relating to subsequent years subject to the vesting of the relative incentive schemes by senior managers in their companies.
Capital adequacy
Following the issue of authorisation Provision No. 423940 by the Bank of Italy on 16th May 2012, from the 30th June 2012 consolidated supervisory report onwards, the UBI Banca Group uses internal models for calculating capital requirements for credit risk relating to the corporate segment (exposures to businesses) and for operational risk.
As already stated in the previous section “Significant events in the first half of 2013”, following Bank of Italy authorisation Provision No. 689988 of the 19th July 2013, from the supervisory report as at 30th June 2013, the UBI Banca Group now uses internal models to calculate capital requirements also to meet credit risk relating to the retail regulatory segment (exposures to small and medium-size enterprises and exposures backed by residential properties).
As at 30th June 2013, regulatory capital stood at €11,633 million (€11,678 million inclusive of the tier three capital), down by €570 million compared to €12,203 million at the end of 2012,
mainly as a result of the impact of the increase in deductions for excess expected losses over
impairment losses recognised, resulting from the adoption of the aforementioned internal
models for the retail regulatory segment.
These deductions – of which 50% applied to the tier one capital and 50% to the tier two capital
– explain much of the decrease in the tier one capital (-€323 million), notwithstanding the other increases which also affected the item, and also to an even greater extent the reduction
in the tier two capital (€-405 million), assisted by the absence of positive elements amounting
to approximately €74 million included in the December report relating to the recognition of
impairment losses in excess of actual losses on one regulatory asset class4.
4 See Table 3 in the “Pillar 3 Disclosures” document for further information.
103
With a provision of 18th May 2010 and
a later communication of 23rd June
2010 (“Clarification of supervisory measures concerning regulatory capital
– prudential filters”), the Bank of Italy
issued new instructions for the treatment of valuation reserves relating
to debt instruments held in the
“available-for-sale financial assets” portfolio for the purposes of calculating
regulatory capital (prudential filters).
More specifically, as an alternative to the “asymmetric approach” (full
deduction of net losses from the tier
one capital and 50% inclusion of net
gains in the tier two capital) already provided for by Italian regulations, it is
now permitted (in compliance with
2004 CEBS guidelines) to completely neutralise gains and losses in the
reserves mentioned, subsequent to 31st
December 2009, but only for securities issued by the central governments of
countries belonging to the European
Union (“symmetrical approach”). The Group decided to take advantage of the
option and reported the decision to the
Bank of Italy on 29th June 2010. It has therefore been applied uniformly by all
members of the banking Group,
commencing with the calculation of
regulatory capital as at 30th June 2010.
From 31st March 2013
the shareholdings and subordinated instruments held in insurance companies – deducted
until the 31st December 2012 from the total of tier one and two capital if purchased before 20th July 2006 – are now deducted 50% from the tier one capital and 50% from the tier two
capital5. This change involved a reclassification of the instruments, previously deducted from
the total of the tier one and tier two capital, for a total amount of €132 million.
The rollout of the new portfolios authorised to apply internal approaches contributed not only
to a one percentage increase in the core tier one capital, but also to a significant improvement in capital ratios which at the end of June 2013 were as follows: a core tier one ratio of 12.08%
(+179 basis points compared to December), a tier one ratio of 12.70% (+191 basis points) and
a total capital ratio of 18.67% (+266 basis points).
Other factors also contributed to this trend in addition to the new validated internal models.
These included the trend for volumes of lending business, a reduction in capital requirements for operational and market risk and the capitalisation of profits in the first half.
Total risk weighted assets fell by €62.5 billion (-€14 billion) and now account for 48.9% of total
consolidated assets (57.8% at the end of 2012), which therefore brings the Group close to the
average for major Italian banks.
5 See Circular No. 263/2006, Title I, Chapter 2, paragraph 11.
Capital ratios (Basel 2 AIRB)
Figures in thousands of euro 30.6.2013 31.12.2012
Tier 1 capital before filters 8,160,424 8,124,210
Preference shares and savings/privileged shares attributable to non-
controlling interests 382,854 382,854
Tier 1 capital filters -24,978 -30,471
Tier 1 capital after filters 8,518,300 8,476,593
Deductions from tier 1 capital -577,962 -212,873
of which: negative elements for 50% deduction Excess of expected losses
over impairment losses (IRB models) -370,446 -71,632
Tier 1 after filters and specific deductions 7,940,338 8,263,720
Tier 2 capital after filters 4,270,808 4,310,534
Deductions from tier 2 capital -577,962 -212,873
of which: negative elements for 50% deduction Excess of expected losses
over impairment losses (IRB models) -370,446 -71,632
Tier 2 capital after filters and specific deductions 3,692,846 4,097,661
Deductions from tier 1+tier 2 capital - -157,762
Total regulatory capital 11,633,184 12,203,619
Credit and counterparty risk 4,476,112 5,611,624
Market risk 63,458 78,253
Operational risk 421,000 437,271
Other calculations (*) 42,522 -
Total capital requirements 5,003,092 6,127,148
Tier 3 subordinated liabilities
Amount eligib le (**) 45,309 55,873
Risk weighted assets 62,538,650 76,589,350
Core tier 1 ratio after specific deductions from tier 1 capital
(tier 1 capital net of preference shares/risk weighted assets) 12.08% 10.29%
Tier 1 capital ratio
(tier 1 capital/risk weighted assets) 12.70% 10.79%
Total capital ratio
[(regulatory capital+tier 3 eligible)/risk weighted assets] 18.67% 16.01%
(**) Excess of tier tw o subordinated liabilities (low er tier tw o) over the amount that qualif ies for inclusion in tier tw o capital. The amount
may be used to cover capital requirements on market risks up to a maximum of 71.4% of those same requirements.
(*) The item comprises the addition for the f loor relating to the calculation of capital requirements for credit risk according to the AIRB
approach.
104
As concerns the objective set by the 2011 EBA recommendation in force at the end of the first
half of 2013 – designed to reach a core tier one ratio of 9% inclusive of the buffer on sovereign debt of €868 million as at 30th September 2011 – the core tier one ratio of the UBI Group for
EBA purposes as at 30th June 2013 was 10.79% (9.16% at the end of 2012).
On 27th June 2013 the texts were published in the Official Journal of the Eurpoean Union of Regulation No. 575/2013 and Directive 2013/36/EU with which the rules defined by the Basel Committee were introduced into the EU (Basel 3) and which therefore constitute the regulatory framework in the EU for banks and investment companies from 1st January 2014. The Regulation, which has direct effect in member countries, defines the rules for own funds, minimum capital requirements, liquidity risk, financial leverage and public disclosures. However, the Directive must be implemented in national legislations and it contains provisions governing authorisation to operate as a bank, freedom of establishment and freedom to provide services, co-operation between supervisory authorities, the supervisory review process, methods for calculating capital reserves (buffers), regulations for administrative penalties and rules on corporate governance and remuneration.
Finally, an estimate of ratios under Basel 3, based on 30th June 2013 data, gives a common
equity tier one ratio (when phased in) for the UBI Banca Group of greater than 10% and a
leverage ratio of 4.9%6.
6 Under Basel 3, financial leverage is calculated as the ratio of common equity tier one capital to total on- and off-balance sheet
assets, with a minimum requirement of 3%.
105
(*) Subsequent to the early redemption dates, the securities are callable every three months.
Subordinated securities
IAS AMOUNT
30.6.2013 31.12.2012 30.6.2013
6
2008/2015 - floating rate ISIN IT0004424435 -
Currency euro Listed on MOT (electronic bond
market)
Quarterly Euribor 3M + 0.85%. 28-11-2015
Redemption by f ixed rate
annual amortisation
schedule from 28-11-
2011
359,639 359,639 357,403
72006/2018 - floating rate EMTN ISIN
XS0272418590 - Currency euro
Quarterly Euribor 3M + 0.50% for years 1-7; Euribor 3M +
1.10% for years 8-12.30-10-2018 Call 30-10-2013 181,650 181,650 181,590
8
2009/2016 - floating rate ISIN IT0004457187 -
Currency euro Listed on MOT (electronic bond
market)
Quarterly Euribor 3M + 1.25%. 13-3-2016
Redemption by f ixed rate
annual amortisation
schedule from 13-3-2012
127,195 169,594 126,205
9
2009/2019 - mixed rate ISIN IT0004457070 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 4.15% until 2014; subsequently floating
rate Euribor 6M + 1.85%.13-3-2019 13-3-2014 370,000 370,000 376,243
10
2009/2016 - floating rate ISIN IT0004497068 -
Currency euro Listed on MOT (electronic bond
market)
Quarterly Euribor 3M + 1.25%. 30-6-2016
Redemption by f ixed rate
annual amortisation
schedule from 30-6-2012
94,102 125,470 93,165
11
2009/2019 - mixed rate ISIN IT0004497050 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 4% until 2014; subsequently floating
Euribor 6M + 1.85%.30-6-2019 30-6-2014 365,000 365,000 367,812
12
2010/2017 - fixed rate ISIN IT0004572878 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 3.10%. 23-2-2017
Redemption by f ixed rate
annual amortisation
schedule from 23-2-2013
240,000 300,000 251,347
13
2010/2017 - floating rate ISIN IT0004572860 -
Currency euro Listed on MOT (electronic bond
market)
Half year floating rate Euribor 6M + 0.40%. 23-2-2017
Redemption by f ixed rate
annual amortisation
schedule from 23-2-2013
122,070 152,587 121,144
14
2010/2017 - fixed rate ISIN IT0004645963 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 4.30%. 5-11-2017
Redemption by repayment
schedule at constant
annual rates from 5-11-
2013
400,000 400,000 409,352
15
2011/2018 - fixed rate ISIN IT0004718489 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 5.50%. 16.6.2018
Redemption by f ixed rate
annual amortisation
schedule from 16-6-2014
400,000 400,000 420,433
16
2011/2018 - fixed rate ISIN IT0004723489 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 5.40%. 30-6-2018
Redemption by f ixed rate
annual amortisation
schedule from 30-6-2014
400,000 400,000 420,553
17
2011/2018 - mixed rate ISIN IT0004767742 -
Currency euro Listed on MOT (electronic bond
market)
Quarterly fixed rate 6.25% until 2014; subsequently floating
rate Euribor 3M + 1%18-11-2018 222,339 222,250 222,316
18
2012/2019 fixed rate ISIN IT0004842370 -
Currency euro Listed on MOT (electronic bond
market)
Half year fixed rate 6%. 8-10-2019
Redemption by f ixed rate
annual amortisation
schedule from 8-10-2015
970,457 970,457 984,840
19
2012/2019 - mixed rate ISIN IT0004841778 -
Currency euro Listed on MOT (electronic bond
market)
Quarterly fixed rate 7.25% until 2014; subsequently variable
Euribor 3M + 5%8-10-2019 200,000 200,000 201,216
5,040,199 5,203,663 5,122,088
Until 14-2-2011 fixed rate of 8.364%; from 15-2-2011 floating
rate Euribor 3M + 5.94%.perpetual (*)
ISSUER
TYPE OF ISSUE
COUPONMATURITY
DATE
EARLY REDEMPTION
CLAUSE
TIER ONE CAPITAL
BPB CAPITAL TRUST
Innovative equity instruments
12001/perpetual - mixed rate - Currency euro
ISIN XS0123998394
BANCA LOMBARDA
PREFERRED SECURITIES
TRUST
22000/perpetual - mixed rate - Currency euro
ISIN XS0108805564
Until 9-3-2010 fixed rate of 8.17%; from 10-3-2010 to 9-3-2011
floating rate Euribor 3M + 3.375%; from 10-3-2011 floating rate
Euribor 3M + 5.94%.
perpetual 90,655
Until 26-6-2011 fixed rate of 9%; from 27-6-2011 floating rate
Euribor 3M + 5.94%.perpetual (*)
110,224
65,338 65,338 65,771
Half year Euribor 6M + 0.125% for years 1-5; Euribor 6M +
0.725% for years 6-10.4
2004/2014 - floating rate ISIN IT0003754949 -
Currency euro
BPCI CAPITAL TRUST 32001/perpetual - mixed rate - Currency euro
ISIN XS0131512450
110,843
NOMINAL AMOUNT
(*) 90,314 90,314
182,095 182,095
TIER TWO CAPITAL
183,575
138,426 138,244
TOTAL
52004/2014 - floating rate ISIN IT0003723357 -
Currency euro
Half year Euribor 6M + 0.125% for years 1-5; Euribor 6M +
0.725% for years 6-10.22-10-2014 139,021
Ordinary subordinated bond issues
(Lower Tier 2)
UNIONE DI BANCHE
ITALIANE SCPA
23-12-2014 110,979
106
Information on share capital, the shares, dividends paid and earnings per share
Information on share capital and shareholder structure
At the date of this report, the share capital of UBI Banca Scpa amounted to €2,254,371,430
divided into 901,748,572 ordinary shares with a nominal value of €2.5 each. All the
outstanding shares have normal dividend entitlement from 1st January 20131.
Under Article 120, paragraph 2 of the Consolidated Finance Act, persons holding more than 2% of the share capital in a share issuer which has Italy as its member state of origin must
notify this to the company and to the Consob (Italian securities market authority).
On the basis of reports received, and with account taken of the exemptions provided for by
recent Consob provisions2, at the date of this report, investments of greater than 2% in the
share capital of UBI Banca were as follows:
- Fondazione Cassa di Risparmio di Cuneo, with 2.230%;
- Fondazione Banca del Monte di Lombardia, with 2.207%;
- Silchester International Investors LLP, which had reported on 1st November 2011 that it
held 5.001% of the share capital of UBI Banca for asset management purposes;
- BlackRock Inc., which declared on 26th March 2013 that it held 4.951% of the share capital
through its asset management companies (it held 5.006% according to its previous report
on 11th January 2013).
We also report that on 13th June 2013 Norges Bank (the Norwegian central bank) had
reported that it owned 1.999% of the share capital (1.998% of the current share capital)
after having fluctuated several times above the 2% level.
In must in any case be considered that the percentage interests reported may no longer be those actually held if a change has occurred in the meantime which does not involve disclosure obligations by the shareholders.
On the basis of an updating of the shareholders register, registered shareholders numbered
93,051 as at 30th June 2013 (83,690 at the end of 2012)3. If shareholders who are not listed in the shareholders’ register are also considered, then the total of registered and unregistered
shareholders was over 150 thousand.
1 See the specific paragraph contained in the section “Shareholders’ equity and capital adequacy” for changes that occurred during
2013. 2 Exemption from disclosure obligations for asset management companies and qualified parties who have acquired investments under
management of greater than 2% and less than 5% as part of their management activities pursuant to article 116-terdecies of the Issuers’ Regulations (Consob Resolution No. 18214 of 9th May 2012).
3 At the date of this report the number of registered shareholders had risen to 94,636.
107
Share performance The UBI Banca share is traded on the Mercato Telematico Azionario (electronic stock exchange)
of Borsa Italiana in the blue chip segment and forms part of the 40 shares in the FTSE/Mib
Index.
Source Datastream
(1) traded on the MTA (electronic stock exchange) since 20th July 2009 (quotation on 20th July 2009: €107.190); redeemed at par in cash on 10th July 2013.
In a scenario of international financial markets which were still conditioned by volatility in the
first half of 2013, the Italian stock market continued to be affected by the continuing
recession, domestic political fragility and still active concerns over the sovereign debt of
“peripheral” European countries, summarised by the still fluctuating performance of the “spread”.
As shown in the table, on 28th June 2013 all the main indices were down compared to
December: the FTSE Italia All-Share -5.4% and the FTSE Italia Banche
-9.4%. The fall appears to be concentrated mainly in the first quarter. In reality as shown in Graph 2, an appreciable recovery occurred in the second quarter in the wake of the formation
of the new government, which was then wiped out by a new period of turbulence unleashed by
profit-taking on Japanese markets, fears of credit restrictions in China and the perception that
the loose monetary policy pursued in the USA was about to end.
In this context the UBI Banca share ended the first half with a fall of approximately 20%,
although with significant fluctuations during the period. Subsequently, in response to trends for the banking sector and the spread, the share price started on an upwards path rising in August to levels above €3.50.
Between January and June 2013, approximately 933 million UBI Banca shares were traded on the electronic stock exchange for a value of approximately €3.2 billion. A total of 789 million shares were traded in same period of the year before, with a value of €2.4 billion (almost 1.5 billion shares for a value
of €4.3 billion in the full year 2012)
Affected by the trends reported above, at the end of June the stock market capitalisation
(calculated on the official price) had fallen to €2.54 billion from €3.16 billion at the end of
2012. Nevertheless, UBI Banca continued to be one of the banking shares with the greatest
capitalisation, in 5th place among Italian banking groups and in first place among “popular”
banks.
At European level, the UBI Banca Group maintained its position among the first fifty in the classification drawn up by the Italian Banking Association in its European Banking Report, which considers the countries of the European Monetary Union plus Switzerland.
Performance comparisons for the Unione di Banche Italiane share
Amounts in euro
28.6.2013
A
28.3.2013
B
28.12.2012
C
% change
A/C
28.9.2012
D
29.6.2012
E
% change
A/E
2.4.2007
F
% change
A/F
Unione di Banche Italiane shares
- official price 2.814 2.880 3.505 -19.7% 2.922 2.500 12.6% 21.486 -86.9%
- reference price 2.782 2.874 3.506 -20.7% 2.876 2.570 8.2% 21.427 -87.0%
Convertible bonds 2009/2013 (1)
100.010 100.800 101.300 -1.3% 100.710 99.000 1.0% - -
FTSE Italia All-Share index 16,250 16,389 17,175 -5.4% 15,999 15,185 7.0% 42,731 -62.0%
FTSE Italia Banks index 8,539 8,338 9,429 -9.4% 8,445 7,838 8.9% 54,495 -84.3%
108
The main information concerning the UBI Banca share is summarised below, along with the principal stock market indicators which have been calculated using consolidated figures.
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
50,000,000
55,000,000
60,000,000
65,000,000
70,000,000
75,000,000
80,000,000
85,000,000
90,000,000
95,000,000
100,000,000
105,000,000
110,000,000
115,000,000
120,000,000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
l o g a l o g a l o g a l o g a l o g a l o g a l o g a l o g a l o g a l o g a l
Performance of the UBI Banca share since 1st July 2003 (*) and volumes traded
2003
(*) reference prices in euro
2004 2005 2006 2007 2008 2009
Graph No. 1
2010 2011
Volu
mes
2012 2013
05
101520253035404550556065707580859095
100105110
a m g l a s o n d g f m a m g l a s o n d g f m a m g l a s o n d g f m a m g l a s o n d g f m a m g l a s o n d g f m a m g l a s o n d g f m a m g l a
Performance of the FTSE Italia All-Share, the FTSE Italia Banks and the UBI Banca share (*)
since 2 April 2007
UBI Banca
FTSE Italia All-Share
FTSE Italia Banche
2007
(*) reference prices in euro
2008 2009
Graph No. 2
2010 2011 2012
109
(*) The total dividend payout for 2012 was calculated on the 900,047,021 shares outstanding on the date of the approval of the proposal to declare a dividend by the Management Board. That number includes 16 shares issued on 5th February 2013 in relation to the conversion of a bond issue, but it does not
include the 1,700,000 treasury shares held in portfolio on that same date.
Dividends paid
The dividend for the year 2012, drawn on the profit of the Parent and totalling €45,002,351.05
corresponding to €0.05 on each of the 900,047,021 UBI Banca shares in issue (excluding
treasury shares repurchased) was paid with value date 23rd of May 2013 (ex dividend date 20th
May and record date 22nd May) against coupon No. 14.
Earnings per share
JANUARY-JUNE 2013 Earnings attributable (in thousands of euro)
Weighted average ordinary shares
Earnings per share (in euro)
Basic EPS 49,296 900,391,459 0.0547
“Annualised” Basic EPS 98,592 900,391,459 0.1095
Diluted EPS 49,296 900,391,459 0.0547
“Annualised” diluted EPS 98,592 900,391,459 0.1095
FY 2012 Earnings attributable (in thousands of euro)
Weighted average ordinary shares
Earnings per share (in euro)
Basic EPS 84,342 900,546,881 0.0937
Diluted EPS 84,342 900,546,881 0.0937
JANUARY-JUNE 2012 Earnings attributable (in thousands of euro)
Weighted average ordinary shares
Earnings per share (in euro)
Basic EPS 159,543 900,546,759 0.1772
“Annualised” Basic EPS 319,086 900,546,759 0.3543
Diluted EPS 159,543 900,546,759 0.1772
“Annualised” diluted EPS 319,086 900,546,759 0.3543
The UBI Banca share and the main stock market indicators
I First half 2013 FY 2012
Number of shares outstanding at the end of period/year 901,748,367 901,747,005
Average price of the UBI share (average of the official prices quoted daily by Borsa Italiana Spa) - in euro 3.335 2.917
Minimum price (recorded during trading) - in euro 2.666 1.821
Maximum price (recorded during trading) - in euro 4.040 4.116
Dividend per share - in euro 0.05 0.05
Dividend yield (dividend per share/average price) 1.50% 1.71%
Total dividends - in euro (*) 45,002,351.05 45,002,351.05
Book Value - in euro (Consolidated equity, excluding profit for the period/No. shares) - in euro 10.88 10.71
Book value calculated by deducting goodw ill attributable to the shareholders of the Parent from consolidated equity - in euro 8.17 7.99
Book value calculated by deducting intangible assets attributable to the shareholders of the Parent from consolidated equity - in euro 7.75 7.56
Stock market capitalisation at the end of period (official prices) - in millions of euro 2,537 3,160
Price / book value [Stock market capitalisation at the end of period / (consolidated equity attributable to shareholders of the Parent excluding profit for the period/year)]0.26 0.33
Price/book value calculated by deducting goodw ill attributable to the shareholders of the Parent from consolidated equity 0.34 0.44
Price / book value calculated by deducting intangible assets attributable to the shareholders of the Parent from consolidated equity 0.36 0.46
EPS - Earning per share (consolidated profit per share pursuant to IAS 33) - in euro 0.1095 0.0937
110
Information on risks and on hedging policies
Banking Group risks
The measurement of risks in the strategic and competitive scenarios in which the Group has
set its annual and medium-term planning takes the form of defining limits and rules for the assumption of risk, which are able to guarantee capital strength and value creation oriented
towards sustainable growth.
The key principles on which Group risk analysis and management are based are as follows:
- rigorous containment of financial and credit risks and strong management of all types of risk;
- the use of a sustainable value creation approach to the definition of risk appetite and the
allocation of capital;
- definition of the Group’s risk appetite with reference to specific types of risk and/or specific
activities in a set of policy regulations for the Group and for the single entities within it.
The assessments performed by the Parent, UBI Banca, were carried out with account taken of
the operating specifics and the relative profiles of each company in the Group in order to
formulate integrated and consistent policies and guidelines. In order to achieve that objective,
the governing bodies of the Parent perform their functions with reference not only to their own
corporate reality but also by assessing the operations of the Group as a whole. The policies set by the Supervisory Board are then translated into operational regulations by the Management
Board.
1 Credit risk
Qualitative information
In the performance of its traditional banking business, the Group is exposed to the risk that the loans it grants will not be repaid by borrowers when they are due and that partial or full
impairment losses must be recognised on them. More specifically the risk profile for lending is
sensitive to the performance of the economy as a whole, to the deterioration in the financial
position of counterparties (shortage of liquidity, insolvency, etc.), or to changes in their
competitiveness, to structural or technological changes in corporate debtors and to other external factors (e.g. changes in legislation, deterioration in the value of financial guarantees
and mortgages connected with market performance). A further risk factor to which the Group
pays particular attention is the degree of diversification in the lending portfolio among different
borrowers and among the different sectors in which they operate.
The organisational model on which the units which manage lending activity is based is as follows:
Parent units for centralised monitoring and co-ordination;
the General Managements of banks and Group companies, to which the following report:
- Credit Departments;
- Local Departments;
- Branches;
- Private & Corporate Unity units created in the network banks in January 2013, for the management of both corporate and private banking clients as part of a reorganisation
designed to combine personal services with a specialist approach to corporate
customers.
111
Furthermore, in view of the merger of Centrobanca, specific units have been created in the Credit Area at the Parent to manage loans from that company’s operations.
The characteristics of that organisational model ensure strong standardisation between the
units of the Parent and the corresponding units in the network banks, with consequent
linearity in the processes and the optimisation of information flows. Loan granting activity is
also differentiated, at local level, by customer segment (retail/private banking/corporate and institutional) and specialised by the status of the loan: “performing” (managed by retail,
private banking and corporate lending units) and “default” (managed by problem loan units).
Moreover, with regard to banks, the introduction of decentralised Local Credit Units to support
retail branches and corporate banking and private banking units, ensures effective co-ordination and liaison between units operating on their respective markets. The Parent
oversees policy management, overall portfolio monitoring, the refinement of assessment
systems, problem loan management and compliance with regulations79.
As concerns the Basel 2 Project, with Provision No. 689988 of 19th July 2013, the Bank of Italy
authorised the UBI Banca Group to use the advanced internal rating based (AIRB) approach to calculate capital requirements to meet credit risk – for the regulatory segments “retail:
exposures backed by residential properties” and “retail other exposures (SME-retail)” from the
supervisory report as at 30th June 2013. The authorisation allows the use of internal estimates
for probability of default (PD) and loss given default (LGD) parameters for the RRE portfolio
(Individuals and Retail Businesses) and Retail Other (Retail Businesses).
For the Corporate segment, the UBI Banca Group has already been authorised by the
Supervisory Authority, with Provision No. 423940 of 16th May 2012, to use advanced internal
rating based (AIRB) systems as of the supervisory report as at the 30th June 2012.
For all the other portfolios, the standardised approach will be used, to be applied in accordance with the roll-out plan delivered to the Supervisory Authority.
At the date of this report, the scope of application of the approaches authorised in terms of
companies is as follows:
• AIRB: Banca Popolare di Bergamo, Banco di Brescia, Banca Popolare Commercio e Industria, Banca Popolare di Ancona, Banca Regionale Europea, Banca Carime, Banca
Valle Camonica (the “network banks”), UBI Banca Private Investment and UBI Banca80;
• the remaining legal entities in the Group will continue to use the standardised approach.
The output of the models consists of 9 rating classes that correspond to the relative PDs,
updated as at December 2011 for exposures to businesses and in 2012 for retail exposures.
These PDs are mapped on the Master Scale to 14 classes (comparable with the ratings of the
main external rating agencies) exclusively for reporting purposes.
79 Part E, section 1, sub-section 1 – Credit Risk in the Notes to the Consolidated Financial Statements as at 31st December 2012 in the
2012 Annual Report may be consulted for a detailed description of organisational aspects, credit policies and systems for the
management, measurement and control of credit risk. 80 The legal entity, UBI Banca, includes the exposures of the former B@nca 24-7 and the former Centrobanca to which the internal
models validated apply for the calculation of capital requirements.
112
With regard to LGD models, the UBI Banca Group has developed LGD models differentiated by
regulatory class.
Quantitative information Classification of exposures on the basis of external and internal ratings
Details are given below of:
a) the degree to which exposures to ordinary customers are covered81 by the different internal
rating models in use in the network banks, by market and commercial portfolio;
b) the distribution by classes of the “Master Scale” of the corporate commercial portfolio of the network banks.
Network banks: degree to which exposures are covered by internal rating with the UBI
internal rating system by market/commercial portfolio
Network banks: Corporate Market – Distribution of lending by Master Scale
81 The cover relates to exposure to which PD and LGD parameters are applied in order to calculate collective impairment losses.
However corporate exposures exist which use set coefficients for the calculation of impairment and these positions have been
excluded from the calculation of the cover.
Corporate and
Large
Corporate
Small
Business
Retail
Businesses
Private
individuals
class class class class class PD
SM1 0.030% 0.049% 1 1 1 Aaa-Aa3 0,000% - 0,046%
SM2 0.049% 0.084% 1 2 A1-A3 0,060% - 0,078%
SM3 0.084% 0.174% 2 2 2 Baa1-Baa2 0,138% - 0,164%
SM4 0.174% 0.298% 3 3 3 Baa3 0.296%
SM5 0.298% 0.469% 4 3 Baa3/Ba1 0,296% -0,631%
SM6 0.469% 0.732% 4 Ba1 - Ba2 0,631% - 0,730%
SM7 0.732% 1.102% 5 4 4 Ba2/Ba3 0,730% - 1,671%
SM8 1.102% 1.867% 5 5 Ba3 1.671%
SM9 1.867% 2.968% 6 5 B1 2.301%
SM10 2.968% 5.370% 7 6 6 6 B2 3.603%
SM11 5.370% 9.103% 7 B3-Caa1 6,616% - 8,465%
SM12 9.103% 13.536% 8 8 7 7 Caa1/Caa2 8,465% - 17,355%
SM13 13.536% 19.142% 9 9 8 Caa2 17.355%
SM14 19.142% 99.999% 8-9 9 Caa3-C 26,640% - 35,782%
(1) Cfr. "Moody's Corporate Default and Recovery Rates, 1920-2011", Exhibit 29, Average One-Year Alphanumeric Rating Migration Rates, 1983-2011.
Master
Scale
PD THRESHOLDS UBI INTERNAL RATING MODELS EXTERNAL RATINGS
Min PD Max PD
Moody's 2011
(1)
94.9% 93.9% 95.0%
60.0%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
Corporate Retail - Businesses Retail - Individuals0%
5%
10%
15%
20%
25%
113
2 – Market risk
1.2.1 Interest rate risk and price risk - Supervisory trading book
Qualitative information
General aspects
Information on organisational and methodological aspects, which are unchanged, is given in Part E, section 1, sub-section 2 – the Banking Group – Market risk of the Notes to the
Consolidated Financial Statements in the 2012 Annual Report, which may be consulted.
Quantitative information Supervisory trading book: internal models and other methods of sensitivity analysis
Change in market risk: daily market VaR for the UBI Banca trading portfolios in the first half of 2013
VaR by risk factor calculated on the entire trading book of the UBI Group as at 30th June 2013
is given below.
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
13,000,000
14,000,000
15,000,000
16,000,000
17,000,000
Trading book of the UBI Banca Group 30.6.2013 Average Minimum Maximum 31.12.2012 30.6.2012
Currency risk 201,105 119,583 9,134 370,743 329,002 361,885
Interest rate risk 889,164 536,465 242,377 1,186,003 316,522 498,979
Equity risk 295,232 721,234 282,894 2,063,556 1,620,044 1,230,202
Credit risk 15,732,011 12,557,904 9,339,709 15,787,377 11,973,823 6,873,747
Volatility risk 246,508 151,191 80,021 274,638 255,568 161,827
Diversification effect (1) (1,155,155) (1,877,018) (2,062,310)
Total (2) 16,208,865 12,925,847 9,669,623 16,240,416 12,617,941 7,064,330
(1) The diversif ication effect is due to the imperfect correlation betw een the different risk factors present in the Group’s portfolio.
(2) The maximum VaR w as recorded on 27th June 2013, the minimum VaR on 5 June 2013.
114
Backtesting analyses
UBI Banca Group trading book: backtesting for first half of 2013
Actual backtesting analysis of the
supervisory portfolios
of the UBI Group
identified one day in
the first half of 2013, 25th February 2013,
when the P&L was
worse than the VaR
calculated by the risk
management system.
Theoretical stress tests
The analysis shows a
heightened sensitivity of
the portfolios to credit
spread shocks
(consistent with the
presence of Italian
government securities
and corporate securities,
especially in the AFS
portfolios) and to interest
rate shocks (consistent
with the presence of
bonds and interest-rate
derivatives within the
Group portfolios).
-18
-15
-12
-9
-6
-3
0
3
6
9
Mili
on
i
Prof it & Loss VaR
Risk Factors IR
Shock Shock +1bp -98,823 0.00% -1,916,120 -0.02% -2,014,943 -0.01%
Risk Factors IR
Shock Shock -1bp 98,748 0.00% 1,915,461 0.02% 2,014,209 0.01%
Risk Factors IR
Shock Shock +100bp -10,167,955 -0.33% -195,249,984 -1.60% -205,417,939 -1.34%
Risk Factors IR
Shock Shock -100bp 9,961,221 0.32% 148,492,153 1.22% 158,453,374 1.04%
Risk Factors IR
Shock Bear Steepening -3,027,011 -0.10% 12,099,928 0.10% 9,072,917 0.06%
Risk Factors IR
Shock Bull steepening 3,943,348 0.13% 35,987,478 0.29% 39,930,826 0.26%
Risk Factors IR
Shock Bear Flattening -3,979,115 -0.13% -36,663,188 -0.30% -40,642,303 -0.27%
Risk Factors IR
Shock Bull Flattening 2,211,818 0.07% -36,884,141 -0.30% -34,672,323 -0.23%
Risk Factors Equity
Shock +10% -228,685 -0.01% 5,165,667 0.04% 4,936,982 0.03%
Risk Factors Equity
Shock -10% 1,318,388 0.04% -5,165,667 -0.04% -3,847,280 -0.03%
Risk Factors Volatility
Shock +20% 898,791 0.03% 2,732,583 0.02% 3,631,374 0.02%
Risk Factors Volatility
Shock -20% -797,957 -0.03% -3,036,012 -0.02% -3,833,969 -0.03%
Risk Factors Forex
Shock +15% 4,795,865 0.15% -994,356 -0.01% 3,801,509 0.02%
Risk Factors Forex
Shock -15% -837,721 -0.03% 994,356 0.01% 156,634 0.00%
Risk Factors Credit Spread
Shock -33,311,710 -1.08% -616,427,092 -5.05% -649,738,802 -4.25%
Flight to quality scenario -39,853,016 -1.29% -621,592,760 -5.09% -661,445,776 -4.32%
Data as at 30th June
2013
UBI BANCA GROUP
TRADING BOOK
UBI BANCA GROUP BANKING
BOOKTOTAL UBI BANCA GROUP
Change in NAV Change in NAV Change in NAV
115
1.2.2 Interest rate risk and price risk – Banking book
Qualitative information
Information on organisational and methodological aspects, which are unchanged, is given in
Part E, section 1, sub-section 2 – the Banking Group – Market risk of the Notes to the
Consolidated Financial Statements in the 2012 Annual Report, which may be consulted.
Quantitative information
The exposure of the Group to interest rate risk in terms of core sensitivity measured in a
scenario of a change in interest rates of -100 bps on items as at 30th June amounted to -€304.19 million, accounting for 2.60% of consolidated regulatory capital, compared to an early
warning threshold of -€450 million.
In compliance with the Financial Risks Policy, the total level of exposure includes an estimate
of the impact of early repayments and modelling of on-demand items on the basis of the
internal model.
The sensitivity originated by the network banks amounted to -€162.43 million. The sensitivity generated by the product companies was +€79.63 million and the Parent
contributes a total of approximately -€65.72 million.
The sensitivity for an increase in interest rates (+100 bp) was +€417.21 million.
The table reports the exposure, measured in terms of economic
value sensitivity in a scenario of
an increase in reference interest
rates of +200 bp, recorded in the
second quarter of 2013, given as
a percentage of the tier one capital and the regulatory
capital.
Sensitivity analysis of net
interest income focuses on
changes in profits resulting from a parallel shock on the yield curve measured over a time horizon of 12 months. The effect resulting from the behaviour profile of on-demand items (the
replicating portfolio) contributes to the overall determination of exposure. The UBI Group’s
exposure to interest rate risk, estimated in terms of an impact on net interest income of an
increase in reference interest rates of 100 bp, amounted to +€41.26 million as at 30th June
2013. This measurement was estimated in a scenario of an instant change in market interest
rates over a time horizon for the analysis of 12 months, assuming constant volumes over time. It cannot therefore be considered a forecasting indicator for future levels of net interest
income.
Change in market risk: daily market VaR for the portfolios in the Group banking book in the first half of 2013
235,000,000
240,000,000
245,000,000
250,000,000
255,000,000
260,000,000
265,000,000
270,000,000
Risk indicators - annual average June 2013 / June
2012
March 2013 /
March 2012FY 2012
parallel shift of +200 bp
sensitivity/tier one capital 2.43% 2.36% 2.50%
sensitivity/regulatory capital 1.65% 1.59% 1.74%
Risk indicators - end of period values 30.6.2013 31.3.2013 31.12.2012
parallel shift of +200 bp
sensitivity/tier one capital 2.45% 3.52% 1.33%
sensitivity/regulatory capital 1.66% 2.38% 1.74%
116
VaR by risk factor calculated on the entire banking book of the UBI Group as at 30th June
2013 is given below.
1.2.3 Currency risk
Further information on currency risk is given in Part E, section 1, sub-section 2 – Banking
Group – Market risk of the Notes to the Consolidated Financial Statements in the 2012 Annual
Report, which may be consulted.
3 Liquidity risk
Qualitative information
The section on activity on the interbank market of this interim report may be consulted for
information on net interbank indebtedness and details of the Group’s liquidity reserve. Short term liquidity analysis is monitored using a net liquidity balance model of analysis at
consolidated level over a time horizon of 30 days, supplemented with stress tests designed to
assess the Group’s ability to withstand crisis scenarios characterised by an increasing level of
severity. The position at the end of the first half was one of ample funds.
The structural balance between assets and liabilities, measured on the basis of their degree of
liquidity is also one of an ample positive balance.
Further information on liquidity risk is given in Part E, section 1, sub-section 3 – Banking
Group – Liquidity risk – of the Notes to the Consolidated Financial Statements in the 2012
Annual Report, which may be consulted.
4 Operational risks Qualitative information
A. General aspects, procedures for the management and methods for the measurement of operational risk
Operational risk is defined as the risk of loss resulting from inadequate or failed procedures,
human resources and internal systems or from external events. This definition comprises
legal82 and compliance risk83, while it excludes reputational84 and strategic risk85.
In order to guarantee a risk profile consistent with the risk appetite defined by the strategic Supervisory Body, the Group has defined an organisational model based on the combination of
various components identified according to the role filled and by the responsibility assigned in
the organisation chart. The different components are identified centrally at the Parent and
locally in the individual legal entities consistent with the Group’s federal model of
82 Defined as the risk of losses resulting from violations of laws and regulations and from contractual or non contractual
responsibilities or from other litigation. 83 Defined as the risk of incurring legal or administrative penalties, or substantial financial losses as a consequence of violations of
compulsory rules (laws or regulations) or internal regulations (e.g. articles of association, codes of conduct and voluntary codes). 84 Defined as the present or future risk of incurring loss of profits or capital resulting from a negative perception of the image of the
Bank by customers, counterparties, shareholders, investors or supervisory authorities. 85 Defined as the risk attaching to errors in decision-making concerning business strategies or bad timing in decisions relating to
markets.
Banking Book Portfolio of the UBI Banca Group 30.6.2013 Average Minimum Maximum 31.12.2012 30.6.2012
Currency risk 90,371 105,119 86,152 114,656 116,154 124,550
Interest rate risk 22,264,410 14,019,466 9,911,959 25,906,806 9,716,142 10,812,415
Equity risk 3,565,158 3,496,778 3,365,189 3,739,608 1,692,096 1,497,447
Credit risk 249,339,589 256,839,060 245,070,177 265,462,731 221,430,360 184,252,040
Volatility risk 720,394 808,680 707,560 867,669 872,048 881,447
Diversification effect (1) (25,023,363) (10,914,559) (13,373,397)
Total (2) 250,956,559 258,902,908 246,312,428 267,900,073 222,912,241 184,194,502
(1) The diversif ication effect is due to the imperfect correlation betw een the different risk factors present in the Group’s portfolio.
(2) The maximum VaR w as recorded on 3rd May 2013, the minimum VaR on 25th June 2013.
117
organisation, as reported in detail in the consolidated 2012 Annual Report which may be
consulted.
The measurement system The measurement system, unchanged compared to the previous year, takes account of
internal and external operational loss data, operational context factors and the system of
internal controls, in a manner whereby it detects the main determinants of risk (especially
those which impact on the distribution tail) and incorporates changes that occur in the risk
profile. Further details on the functioning of the calculation model are given in the consolidated 2012
Annual Report and in the following section on the capital requirement which may be consulted.
The reporting system
Monitoring of the operational risks assumed is carried out by means of a standard reporting
system organised on the basis of the same levels of responsibility present in the organisational model. Management reporting activities are carried out in service by the operational risk
control function of the Parent which periodically prepares the following:
- an analysis of changes in operating losses detected by the loss data collection system;
- benchmark analyses using the Italian Database of Operational Losses;
- a summary of assessments of exposure to potential risks;
- details of areas of vulnerability identified and the mitigation action undertaken.
The most appropriate corrective actions are identified on conclusion of the assessment of
exposure to potential operational risks for each area of activities analysed, or as a result of
operational losses detected historically by the loss data collection process. As a further form of mitigation, the UBI Banca Group has taken out adequate insurance
policies to cover the principal transferable operational risks with due account taken of the
requirements of supervisory regulations. The policies were taken out by UBI Banca Scpa in its
own name and on behalf of the network banks and product companies of the Group concerned.
Legal risk
The companies in the UBI Banca Group are party to a number of court proceedings originating
from the ordinary performance of their business. In order to meet the claims received, the
companies have made appropriate provisions on the basis of a reconstruction of the amounts
potentially at risk, an assessment of the risk in terms of the degree of “probability” and/or
“possibility”, as defined in the accounting standard IAS 37, and established legal opinion. Therefore, while it is not possible to predict final outcomes with certainty, it is considered that
an unfavourable conclusion of these proceedings, both taken singly or as a whole, would not
have a significant effect on the financial and operating position of the Group.
Specific sections of this consolidated condensed interim financial report may be consulted for information on corporate litigation, including tax litigation, which may be consulted.
Quantitative information
Descriptive data
From 1st January 2008 until 30th June 2013, 28,674 events were detected for a cost of €353
million (of which €37 million recovered) concentrated in the risk drivers “processes” (22% of
the number of events detected and 49% of the total losses, principally attributable to mistaken
execution of transactions and litigation for compounding of interest) and “external causes” (75% of the number of events detected and 40% of the total losses, due primarily to financial
and payment card fraud).
118
75%
2%
22%1%
External causes (external context) Persons (human factor)
Processes Systems
Percentage of operational losses by risk driver (detection 1st January 2008 – 30th June 2013)
Event frequency Profit impact
In the first six months of 2013, 867 events were detected for a cost of €14 million,
concentrated in the risk drivers “systems” (2% of the number of events detected and 41% of the total losses, attributable mainly to the management of suspense account items),
“processes” (47% of the number of events detected and 39% of the total losses, consisting
mainly of claims for compounding of interest and investment services).
Percentage of operational losses by risk driver (detection 1st January 2013 – 30th June 2013)
Event frequency Profit impact
The 28,674 events detected from 1st January 2008 until 30th June 2013, for a cost of €353 million (of which €37 million recovered), were concentrated primarily in the following types of
event: “external fraud” (70% of the number of events detected and 38% of the total losses,
mainly due to financial and payment card fraud), “customers, products and professional
practices” (8% of the number of events detected and 26% of the total losses, consisting mainly
of claims for compounding of interest and investment services) and “execution, delivery and
process management” (14% of the number of events detected and 24% of the total losses, mainly due to mistaken execution of instructions).
40%
7%
49%
4%
External causes (external context) Persons (human factor)
Processes Systems
48%
3%
47%
2%
External causes (external context) Persons (human factor)
Processes Systems
12%
8%
39%
41%
External causes (external context) Persons (human factor)
Processes Systems
119
Percentage of operational losses by type of event (detection 1st January 2008 – 30th June 2013)
Event frequency Profit impact
In the first six months of 2013, 867 events were detected for a cost of €14 million, concentrated mainly in the following types of event: “execution, delivery and process
management” (21% of the number of events detected and 55% of the total losses, mainly due
to management of suspense account items), “customers, products and professional practices”
(27% of the number of events detected and 25% of the total losses, consisting mainly of claims
for compounding of interest) and “external fraud” (46% of the number of events detected and
11% of the total losses, mainly due to robberies and thefts).
Percentage of operational losses by type of event
(detection 1st January 2013 – 30th June 2013)
Event frequency Profit impact
26.1%
0.9%
24.4%
38.3%
2.2% 2.3% 5.8%
25.1%
0.4%
54.6%
11.2%3.0%
0.7%5.0%
8.4% 1.4%
14.2%
69.8%
0.3%1.4% 4.5%
Customers, products and professional practices
Damage from external events
Execution, delivery and process management
External fraud
Internal fraud
Business interruption and system malfunctions
Employment and safety at work
26.5%
1.5%21.2%
45.7%
0.6%
1.2% 3.3%Customers, products and professional practicesDamage from external events
Execution, delivery and process management
External fraud
Internal fraud
Business interruption and system malfunctions
120
Capital requirements
The UBI Banca Group has adopted the advanced measurement approach (AMA) since 30th June 2012 used in combination with the “traditional standardised approach” (TSA) and the
“basic indicator approach” (BIA). The scope of application for the AMA includes the Parent,
UBI Banca, the network banks (Banco di Brescia, Banca Regionale Europea, Banca di Valle
Camonica, Banca Popolare di Bergamo, Banca Popolare Commercio e Industria, Banca
Popolare di Ancona and Banca Carime), UBI Banca Private Investment and UBI Sistemi e
Servizi. The entities within the scope of application for the TSA comprises IW Bank, UBI Factor, UBI Pramerica, UBI International and also UBI Leasing and Prestitalia. The other
financial and operating companies within the scope of consolidation are subject to the basic
approach.
The capital requirement net of expected losses for which provisions for risks and charges have
been made is €421 million (down by 4% compared to €437 million as at the 31st December 2012). The main changes recorded compared to 31st December 2012 were as follows:
– a reduction in the VaR estimated by the AMA calculation: a reduction was recorded (down
by 3% from €349 million to €339 million) determined mainly by an update of the sector
database (Italian database of operational losses - DIPO); – an increase in the capital requirement calculated using the TSA method and a reduction at
the same time in the BIA component: an increase in the TSA component of €31 million was
recorded (up by 94% from €33 million to approximately €65 million) and a reduction at the
same time of €37 million in the BIA component (down by 68% from approximately €54
million to €18 million), attributable to the adoption by UBI Leasing and Prestitalia of the
TSA method from the supervisory report as at 30th June 2013 (BIA before).
The Group has not taken up the option available under the regulations in force86 to deduct the
effects of insurance policies and other risk transfer mechanisms from the capital requirement.
86 See Bank of Italy Circular No. 263 of 27th December 2006, Title II, Chapter 5, Part three, Section IV.
121
The principal risks and uncertainties for the second half of the year
Risks
The UBI Banca Group attributes primary importance to the measurement, management and monitoring of risk, as activities necessary to the sustainable creation of value over time and to
the consolidation of its reputation on its markets.
In compliance with the regulations in force for the prudential supervision of banks (Bank of
Italy Circular No. 263/2006), the Group has put a process in place to calculate its capital
adequacy requirement – for the present and the future – to meet all significant risks to which the Group is or might be exposed (ICAAP - Internal Capital Adequacy Assessment Process)87.
Details are given below of risks which have significant impacts for the UBI Banca Group and
the action taken to mitigate them. Risks other than those just reported, which are of marginal
importance, are not expected to change during the course of the next six months.
Credit risk
Credit risk constitutes the most important characteristic risk of the UBI Banca Group:
historically this risk accounts for approximately 90% of the regulatory risk capital.
Italian GDP fell again in the first six months of the year, mostly as a result of a drop in
domestic demand, with high margins of uncertainty over the timing of a possible recovery. Until a final solution to problems is found on an international scale, with a return to a steady
pace of growth in global trade, more coordinated fiscal and monetary policies at European level
and above all until initiatives, which can no longer be delayed, are taken to improve the
efficiency of domestic production, no recovery is expected in the levels of household and
business risk recorded in the pre-crisis years.
In this context of objective difficulty, in 2013 the Group has further improved processes to support credit monitoring and recovery action. In detail:
• “Loan Quality” activities are continuing, with weekly monitoring of the achievement of
objectives to reduce the problem and default loan portfolio, performed by involving the
distribution network in peripheral loan approval committees for the purpose of agreement
over planning and actions taken on single positions. This activity, overseen centrally, is benefiting from the effects of new roles, the Credit Quality Contact and the Problem Loan
Contact, who oversee loan quality directly in their local areas;
• the programme “CR2 – Credit Recovery and Regularisation” is continuing as follows:
- completion of the full roll-out of the new credit monitoring model with the introduction of
“PEM - Pratica Elettronica di Monitoraggio – electronic case monitoring” and of the new
“Credit Portal” on the whole of the distribution network. These tools capitalise on the
great experience of the Group in the oversight of credit quality and they help to
rationalise credit recovery account manager activity, by setting clear priorities and providing simple IT support;
- completion of the consolidation of the new credit recovery model, which involves
specialist units and staff, based on the size and type of the non-performing loans to be
recovered. Activity is continuing to revise the credit recovery IT system which led in the first half of 2013 to the adoption of a new single and integrated IT system for the
management of default loans (roll-out in progress) and the complete dematerialisation
(paperless) of all in-process cases. This intervention is helping to simplify credit recovery
processes and increase the productivity of these units.
Liquidity risk
In its analysis of its liquidity position, the Group considers the concentration of maturities,
regulatory developments and reputational risks connected with market expectations.
Notwithstanding pressures on interbank markets, short-term liquidity risk is kept low by the substantial volumes of “assets eligible for refinancing” (for operations with the European
87 The list of risks and the relative definitions were unchanged with respect to the information published in the 2012 Annual Report,
which may be consulted.
122
Central Bank - ECB or through the MIC - collateralised interbank market), which the Group
holds. Nevertheless, in a context of a slowdown in conventional funding, attributable to the lower
available income of households and the strong competition for funding, a marginal risk
persists of a shortage of liquidity needed to finance ordinary medium to long-term loans.
Consequently, the UBI Banca Group carries out attentive prospective monitoring of Group
capital trends in order in particular to keep watch over the concentration of 3-4 year funding
maturities when the LTRO financing subscribed matures. Residual risk
In the current economic environment, the assets pledged to back customer loans could reduce
in value, thereby diminishing the intrinsic level of protection. Confirmation of this is given by
the foreclosure auctions of properties pledged to back non-performing positions, which are showing a tendency to push values below the appraisal levels, with a consequent need to make
greater than expected provisions. However, for mortgages to individuals (performing and
default), the Group has loan to value ratios lower than those for the sector nationally and this
mitigates the risk mentioned above.
Uncertainties An uncertainty is defined as a possible event for which the potential impact, attributable to one of the risk categories identified, cannot be determined and therefore quantified at present.
The elements of uncertainty identified below could manifest with impacts attributable to
credit, interest rate, liquidity and business and reputational risk, but without affecting the
capital strength of the UBI Banca Group.
The main uncertainties identified for the second half of 2013, with regard to the market
scenario and the regulatory context, relate to the following:
- developments in the macroeconomic situation. The situation at international level is
moderately encouraging, characterised mainly by good growth in the USA and Japan – in
the wake of strongly expansionary monetary policies – which would seem to have taken a
path of stable expansion and job creation. Good news is also arriving from the euro zone economy, where the GDP estimate for the
second quarter (+0.3%) could foreshadow the start of a moderate period of recovery. Some
difficulties nevertheless remain. Problems of excess public and private sector debt are still
unsolved as our those relating to the restrictive fiscal intervention implemented since 2011,
which even in the view of the main international bodies has had an extremely depressive impact on income, production and the labour market.
With regard to monetary policy, the Governing Council of the ECB recently introduced
“forward guidance” – unanimously approved – with which it indicates its intention to keep
key rates at current or lower levels for a prolonged period. It was stated that the Frankfurt
authority’s policy will remain accommodatory as long as necessary and that further
expansionary measures – both standard and unconventional – could be taken on the basis of cyclical developments and financial markets.
Nevertheless, risks of negative performance persist in Italy due mainly to a slowdown in
foreign demand, government budgetary constraints and the possibility of renewed
pressures on financial markets concerning government securities, factors which put a
further brake on an exit from the recession and on the ability to recover production capacity “destroyed” during the crisis.
Political uncertainties and a possible government crisis could also put new pressures on
financial markets, with a potential increase in the sovereign debt spread with regard to
benchmarks for countries with a high credit rating and negative repercussions on the
confidence of market operators and on the real economy.
The general environment described above could have a negative impact on the propensity of banks to grant new loans to households and businesses due to the heightened perception
of risk in the economy, to the high level of problem loans, which will continue to weigh on
the balance sheets of banks, to extremely prudential capital requirements, to the relatively
123
costly conditions for access to funding and also to the property market which should still
tend to create problems. With a cost of funding which basically cannot be reduced, the slow change in the
composition of the lending portfolio, which is mainly medium to long-term and floating rate
indexed, could suggest that no increases will be seen in net interest income from the
ordinary banking activities of the Group.
- changes in the legislative and regulatory context. The regulatory context is subject to various
processes of change following both the issue of a number of regulatory provisions at European and national level, with the introduction of the relative regulations to implement
them, relating to the provision of banking services (e.g. Tobin tax, stamp duty, etc.) and
also to the related jurisprudence (e.g. the form, content and modification of contracts,
interest, other items of remuneration for credit lines and overdrafts and the sale of
insurance policies). This scenario requires particular effort both in terms of interpretation
and implementation and has at times directly affected the profits of banks, and/or costs for customers. More specifically changes in the competition framework resulting from the new
European regulations concerning the single European payments market in euro (PSD
SEPA) is determining growing levels of competition. The possibility for non-banking
operators to become payment institutions could result in a potential reduction in the
volumes of transactions for the Group and in the relative fees and commissions on payment services (business risk).
* * *
The risks and uncertainties described above were subject to a process of assessment designed, amongst other things, to examine the impacts of changes in market parameters and conditions on corporate performance. The Group does in fact possess instruments to measure the possible impacts of risks and uncertainties on its operations (sensitivity analysis and stress tests in
particular), which allow it to rapidly and continuously adapt its strategies – in terms of its distribution, organisation and cost management systems – to changes in the operating context. Risks and uncertainties are also under constant observation through the implementation of the policies and regulations to govern risk adopted by the Group: policies are updated in relation to changes in strategy, context and market expectations. Periodic monitoring of policies is designed to verify their state of implementation and their adequacy. The findings of the analyses performed show that the Group is able to meet the risks and uncertainties to which it is exposed, which therefore confirms the assumption that it is a going concern.
124
Consolidated companies: the principal figures
Profit
Figures in thousands of euro First half 2013 First half 2012 Change % change FY 2012
Unione di Banche Italiane Scpa (1) 144,020 135,445 8,575 6.3% 223,496
Banca Popolare di Bergamo Spa 86,036 85,767 269 0.3% 129,453
Banco di Brescia Spa 19,944 40,396 (20,452) (50.6%) 23,198
Banca Popolare Commercio e Industria Spa 24,655 23,777 878 3.7% 24,003
Banca Regionale Europea Spa (2) 8,863 9,904 (1,041) (10.5%) (26,564)
Banca Popolare di Ancona Spa 507 10,166 (9,659) (95.0%) (4,443)
Banca Carime Spa 10,901 18,342 (7,441) (40.6%) (6,436)
Banca di Valle Camonica Spa 1,193 1,278 (85) (6.7%) 1,150
UBI Banca Private Investment Spa 3,415 1,991 1,424 71.5% 3,180
Centrobanca Spa - 9,646 (9,646) (100.0%) 283
Centrobanca Sviluppo Impresa SGR Spa (233) 115 (348) n.s. (173)
Banque de Dépôts et de Gestion Sa (*) (3) (5,034) (2,285) 2,749 120.3% (6,315)
IW Bank Spa (4) 2,321 9,662 (7,341) (76.0%) 11,619
UBI Banca International Sa (*) (1,430) 3,960 (5,390) n.s. 2,030
UBI Pramerica SGR Spa 13,890 13,438 452 3.4% 39,523
UBI Leasing Spa (31,822) (27,057) 4,765 17.6% (69,810)
UBI Factor Spa 6,441 8,779 (2,338) (26.6%) 3,844
B@nca 24-7 Spa - 5,293 (5,293) (100.0%) -
Prestitalia Spa (*) (9,626) (4,480) 5,146 114.9% (23,849)
BPB Immobiliare Srl 582 410 172 42.0% 1,230
Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa 1,092 1,060 32 3.0% 1,781
UBI Sistemi e Servizi SCpA - - - - -
UBI Fiduciaria Spa (125) (111) 14 12.6% (193)
UBI Assicurazioni Spa (49,99%) 3,810 5,800 (1,990) (34.3%) 8,553
Aviva Assicurazioni Vita Spa (49,99%) 5,450 2,250 3,200 142.2% 8,000
Aviva Vita Spa (50%) 12,200 10,800 1,400 13.0% 14,400
Lombarda Vita Spa (40%) 8,830 2,006 6,824 340.2% 16,056
UBI Management Co. Sa 1 108 (107) (99.1%) 200
UBI Trustee Sa (118) - (118) - 81
CONSOLIDATED 52,933 159,543 (106,610) (66.8%) 82,708
(*) The profit shown is from the financial statements prepared for the consolidation according to the accounting policies followed by the Parent.
(1) The figure for the first half of 2012 does not include the results for B@nca 24-7, merged on 23rd July 2012, and for Centrobanca, merged on 6th May 2013, but relates to UBI Banca only. The figure for the full year 2012 does not include the result for
Centrobanca.
(2) The figure for the first half of 2012 incorporates the loss of Banco di San Giorgio (-€7,187 thousand), merged into Banca Regionale
Europea on 22nd October 2012.
(3) Preliminary contracts were signed for the disposal of the bank on 19th August 2013.
(4) The figure for the first half of 2012 has been restated for consistency by including the result for InvestNet International Spa, merged on 1st August 2012.
125
Net loans and advances to customers
Figures in thousands of euro30.6.2013
A
31.12.2012
B
30.6.2012
C
Change
A-C
%
change A-C
Unione di Banche Italiane Scpa (1) 26,527,303 22,584,747 13,453,014 13,074,289 97.2%
Banca Popolare di Bergamo Spa 19,097,187 18,779,934 19,264,997 -167,810 -0.9%
Banco di Brescia Spa 13,322,557 13,177,657 13,482,717 -160,160 -1.2%
Banca Popolare Commercio e Industria Spa 8,409,795 8,347,255 8,470,895 -61,100 -0.7%
Banca Regionale Europea Spa (2) 9,274,199 9,203,899 9,462,725 -188,526 -2.0%
Banca Popolare di Ancona Spa 7,702,390 7,769,649 7,728,503 -26,113 -0.3%
Banca Carime Spa 4,565,561 4,730,986 4,709,767 -144,206 -3.1%
Banca di Valle Camonica Spa 1,827,571 1,798,703 1,831,358 -3,787 -0.2%
UBI Banca Private Investment Spa 475,272 472,038 466,776 8,496 1.8%
B@nca 24-7 Spa - - 9,826,026 -9,826,026 -100.0%
Prestitalia Spa 2,661,725 2,882,147 159,480 2,502,245 n.s.
Centrobanca Spa - 6,272,078 6,848,612 -6,848,612 -100.0%
Banque de Dépôts et de Gestion Sa (3) 172,495 192,788 189,651 -17,156 -9.0%
UBI Banca International Sa 854,507 981,009 973,726 -119,219 -12.2%
IW Bank Spa 300,578 287,029 268,390 32,188 12.0%
UBI Factor Spa 2,250,376 2,392,499 2,156,610 93,766 4.3%
UBI Leasing Spa 7,763,007 8,060,482 8,489,739 -726,732 -8.6%
CONSOLIDATED 91,268,495 92,887,969 95,333,181 -4,064,686 -4.3%
Risk indicators
Percentages 30.6.2013 31.12.2012 30.6.2012 30.6.2013 31.12.2012 30.6.2012 30.6.2013 31.12.2012 30.6.2012
Unione di Banche Italiane Scpa (1) 1.35% 1.01% - 2.41% 0.83% - 3.76% 1.84% -
Banca Popolare di Bergamo Spa 3.00% 2.88% 2.58% 3.74% 3.44% 2.28% 6.74% 6.32% 4.86%
Banco di Brescia Spa 2.15% 2.07% 1.86% 4.17% 3.26% 2.84% 6.32% 5.33% 4.70%
Banca Pop. Commercio e Industria Spa 3.83% 3.80% 3.72% 1.81% 2.04% 2.02% 5.64% 5.84% 5.74%
Banca Regionale Europea Spa (2) 3.31% 2.80% 2.67% 3.75% 3.87% 3.36% 7.06% 6.67% 6.03%
Banca Popolare di Ancona Spa 5.15% 4.96% 4.70% 5.85% 4.48% 3.91% 11.00% 9.44% 8.61%
Banca Carime Spa 3.18% 2.71% 2.34% 4.75% 4.11% 3.94% 7.93% 6.82% 6.28%
Banca di Valle Camonica Spa 4.20% 4.15% 3.33% 3.31% 2.79% 3.34% 7.51% 6.94% 6.67%
UBI Banca Private Investment Spa 2.59% 1.53% 1.41% 1.58% 2.80% 1.25% 4.17% 4.33% 2.66%
B@nca 24-7 Spa - - 2.60% - - 1.98% - - 4.58%
Prestitalia Spa 0.22% 0.19% n.d. 11.66% 8.99% n.d. 11.88% 9.18% n.d.
Centrobanca Spa - 1.94% 1.82% - 4.50% 3.84% 0.00% 6.44% 5.66%
Banque de Dépôts et de Gestion Sa (3) 0.11% 0.10% 0.10% 1.47% 1.76% 1.81% 1.58% 1.86% 1.91%
UBI Banca International Sa 1.16% 0.99% 0.19% 6.40% 2.03% 2.40% 7.56% 3.02% 2.59%
IW Bank Spa - - - 0.94% 0.15% 0.13% 0.94% 0.15% 0.13%
UBI Factor Spa 10.13% 3.30% 1.76% 0.55% 6.42% 2.30% 10.68% 9.72% 4.06%
UBI Leasing Spa 6.75% 6.49% 5.55% 5.78% 6.06% 4.60% 12.53% 12.55% 10.15%
CONSOLIDATED 3.56% 3.18% 2.89% 4.38% 3.88% 2.95% 7.94% 7.06% 5.84%
Net non-performing loans + Net
impaired loans/Net loans
Net non-performing loans/ Net
loansNet impaired loans/Net loans
(1) The figures as at 30th June 2012 do not include B@nca 24-7, merged on 23rd July 2012, and Centrobanca, merged on 6th May
2013, but relate to UBI Banca only. The figures as at the 31st December 2012 do not take account of Centrobanca.
(2) The figures as at the 30th June 2012 have been restated for consistency to include the amounts for Banco di San Giorgio, merged
into Banca Regionale Europea on 22nd October 2012.
(3) Preliminary contracts were signed for the disposal of the bank on 19th August 2013.
126
Direct funding from customers
Figures in thousands of euro30.6.2013
A
31.12.2012
B
30.6.2012
C
Change
A-C
%
change A-C
Unione di Banche Italiane Scpa (1) 33,493,754 29,147,156 31,009,085 2,484,669 8.0%
Banca Popolare di Bergamo Spa 17,809,075 19,202,234 19,917,457 -2,108,382 -10.6%
Banco di Brescia Spa 11,012,800 11,491,189 11,577,562 -564,762 -4.9%
Banca Popolare Commercio e Industria Spa 6,784,001 7,162,967 7,562,474 -778,473 -10.3%
Banca Regionale Europea Spa (2) 6,797,695 6,968,861 7,085,820 -288,125 -4.1%
Banca Popolare di Ancona Spa 6,523,481 6,445,102 6,697,044 -173,563 -2.6%
Banca Carime Spa 6,718,236 7,063,930 7,213,490 -495,254 -6.9%
Banca di Valle Camonica Spa 1,392,128 1,465,310 1,445,667 -53,539 -3.7%
UBI Banca Private Investment Spa 579,681 639,069 561,538 18,143 3.2%
Centrobanca Spa - 4,006,028 4,379,739 -4,379,739 -100.0%
Banque de Dépôts et de Gestion Sa (3) 300,702 313,158 334,749 -34,047 -10.2%
B@nca 24-7 Spa - - 154 -154 -100.0%
UBI Banca International Sa (4) 2,039,854 1,740,864 1,567,077 472,777 30.2%
IW Bank Spa (5) 3,141,640 2,883,298 2,317,539 824,101 35.6%
CONSOLIDATED 96,343,798 98,817,560 102,246,727 -5,902,929 -5.8%
Direct funding from customers includes amounts due to customers and debt securities issued, with the exclusion of bonds subscribed directly by companies in the Group.
Direct funding for the following banks was therefore adjusted as follows:
Figures in millions of euro 30.6.2013 31.12.2012 30.6.2012
Unione di Banche Italiane Scpa 665.1 2,155.8 3,413.1
Banca Popolare di Bergamo Spa - - 50.0
Banco di Brescia Spa 650.5 651.8 750.2
Banca Regionale Europea Spa 610.4 892.0 963.8
Banca Popolare di Ancona Spa 135.2 - -
Banca di Valle Camonica Spa 253.1 253.4 254.0
Centrobanca Spa - 2,323.1 2,324.5
B@nca 24-7 Spa - - 5,751.6
(1) The figure as at 30th June 2012 does not include B@nca 24-7, merged on 23rd July 2012, and Centrobanca, merged on 6th May 2013, but relates to UBI Banca only. The figure as at 31st December 2012 does not include Centrobanca.
(2) The figure as at the 30th June 2012 has been restated for consistency to include the amounts for Banco di San Giorgio, merged into Banca Regionale Europea on 22nd October 2012.
(3) Preliminary contracts were signed for the disposal of the bank on 19th August 2013.
(4) The figure as at 30th June 2013 is net of issues of French certificates of deposit and euro commercial paper for a total of €2,792.2
million (€2,265.9 million as at 31st December 2012; €1,829.2 million as at 30th June 2012).
(5) The figure as at 30th June 2012 has been restated to take account of InvestNet International Spa, merged on 1st August 2012.
127
Indirect funding from customers (at market prices)
Figures in thousands of euro30.6.2013
A
31.12.2012
B
30.6.2012
C
Change
A-C
%
change A-C
Unione di Banche Italiane Scpa 5 5 5 - -
Banca Popolare di Bergamo Spa 25,342,687 24,313,879 23,128,234 2,214,453 9.6%
Banco di Brescia Spa 12,424,064 12,450,726 12,159,201 264,863 2.2%
Banca Popolare Commercio e Industria Spa 9,899,227 9,791,680 9,546,850 352,377 3.7%
Banca Regionale Europea Spa (1) 8,352,939 8,069,733 8,107,930 245,009 3.0%
Banca Popolare di Ancona Spa 3,429,362 3,440,984 3,376,892 52,470 1.6%
Banca Carime Spa 5,805,620 5,664,244 5,405,336 400,284 7.4%
Banca di Valle Camonica Spa 1,100,318 1,018,588 996,124 104,194 10.5%
UBI Banca Private Investment Spa 5,297,189 5,361,049 5,120,320 176,869 3.5%
Banque de Dépôts et de Gestion Sa (2) 618,529 669,974 715,788 -97,259 -13.6%
Lombarda Vita Spa 4,672,243 4,507,184 4,718,037 -45,794 -1.0%
Aviva Assicurazioni Vita Spa 2,113,728 2,094,308 2,112,784 944 0.0%
UBI Pramerica SGR Spa 21,950,948 21,679,960 20,074,465 1,876,483 9.3%
UBI Banca International Sa 2,400,506 2,498,265 2,574,011 -173,505 -6.7%
IW Bank Spa 2,939,781 3,244,644 3,801,141 -861,360 -22.7%
Aviva Vita Spa 4,446,297 4,340,583 4,346,798 99,499 2.3%
CONSOLIDATED (2) 68,944,184 70,164,384 69,024,117 -79,933 -0.1%
Assets under management (at market prices)
Figures in thousands of euro30.6.2013
A
31.12.2012
B
30.6.2012
C
Change
A-C
%
change A-C
Unione di Banche Italiane Scpa - - - - -
Banca Popolare di Bergamo Spa 12,483,607 12,192,817 11,563,502 920,105 8.0%
Banco di Brescia Spa 6,491,124 6,309,441 6,199,795 291,329 4.7%
Banca Popolare Commercio e Industria Spa 4,494,019 4,338,237 4,126,910 367,109 8.9%
Banca Regionale Europea Spa (1) 4,192,432 4,140,316 4,107,104 85,328 2.1%
Banca Popolare di Ancona Spa 1,615,799 1,597,113 1,517,498 98,301 6.5%
Banca Carime Spa 2,962,532 2,982,988 2,868,916 93,616 3.3%
Banca di Valle Camonica Spa 451,199 413,923 385,331 65,868 17.1%
UBI Banca Private Investment Spa 4,209,490 4,098,237 3,813,839 395,651 10.4%
Banque de Dépôts et de Gestion Sa (2) 618,529 669,974 715,788 -97,259 -13.6%
Lombarda Vita Spa 4,672,243 4,507,184 4,718,037 -45,794 -1.0%
Aviva Assicurazioni Vita Spa 2,113,728 2,094,308 2,112,784 944 0.0%
UBI Pramerica SGR Spa 21,950,948 21,679,960 20,074,465 1,876,483 9.3%
UBI Banca International Sa 133,751 159,535 173,599 -39,848 -23.0%
IW Bank Spa 567,472 570,517 507,704 59,768 11.8%
Aviva Vita Spa 4,446,297 4,340,583 4,346,798 99,499 2.3%
CONSOLIDATED (2) 38,696,590 38,106,037 36,490,940 2,205,650 6.0%
(1) The figures as at the 30th June 2012 have been restated for consistency to include the amounts for Banco di San Giorgio, merged
into Banca Regionale Europea on 22nd October 2012.
(2) Preliminary contracts were signed for the disposal of the bank on 19th August 2013.
128
Transactions with related parties
With Resolution No. 17221 of 12th March 2010 – amended by the subsequent Resolution No.
17389 of 23rd June 2010 – the Consob (Italian securities market authority) approved a
Regulation concerning related-party transactions. The regulations concern the procedures to
be followed for the approval of transactions performed by listed companies and the issuers of
shares with a broad shareholder base with parties with a potential conflict of interest,
including major or controlling shareholders, members of the management and supervisory bodies and senior managers including their close family members.
The regulations currently apply within the UBI Banca Group to the Parent UBI Banca Scpa
only, as a listed company. In November 2010 the Supervisory Board appointed a Related
Parties Committee from among its members to which transactions falling within the scope of the regulations must be submitted in advance.
In this respect the UBI Banca regulations have excluded the following transactions from their
scope of application and these are consequently not subject to the disclosure obligations
required under the Consob regulation, but without prejudice to the provisions of Art. 5,
paragraph 8, where applicable, of the said Consob Regulation:
(a) shareholders’ resolutions concerning the remuneration of the Members of the Supervisory Board passed in accordance with Art. 2364-bis of the Italian Civil Code, including those concerning the determination of a total sum for the remuneration of the Members of the Supervisory Board assigned particular offices, powers and functions;
(b) remuneration schemes based on financial instruments approved by shareholders in accordance with Art. 22, letter b) of the Articles of Association and in compliance with Art. 114-bis of the Consolidated Finance Act and the
relative operations to implement them;
(c) resolutions, other than those referred to under the preceding letter a) of this article, concerning the fees of
Members of the Management Board appointed to special positions and other key management personnel and also the resolutions with which the Supervisory Board determines the fees of the Members of the Management Board on condition that:
(i) UBI Banca has adopted a remuneration policy;
(ii) the Remuneration Committee formed by the Supervisory Board in accordance with Art. 49 of the Articles of Association has been involved in the definition of that remuneration policy;
(iii) a report setting out the remuneration policy has been submitted for approval or a consultative vote to a Shareholders' Meeting;
(iv) the remuneration awarded is consistent with that policy;
(d) “transactions of negligible amount” are those related-party transactions for which the amount is less than €250 thousand. If a related-party transaction is concluded with a member of the key management personnel, a close family member of that person or with companies controlled by or subject to significant influence of those persons,
it will be considered a transaction of negligible amount if the amount of the transaction is not greater than €100 thousand;
(e) transactions which fall within the ordinary performance of operating activities and the related financial activities
concluded under equivalent market or standard conditions;
(f) transactions to be performed on the basis of instructions for the purposes of stability issued by the supervisory authority, or on the basis of instructions issued by the Parent of the Group to carry out instructions issued by the supervisory authority in the interests of the stability of the Group;
(g) transactions with or between subsidiaries and also venturers in joint ventures, as well as transactions with associates, if no significant interests of other related parties exist in the subsidiaries or associates that are counterparties to the transaction.
Also, in compliance with Consob recommendations, transactions with related-parties of UBI
Banca performed by subsidiaries are subject to the regulations in question if, under the
provisions of the Articles of Association or internal regulations adopted by the Bank, the
Supervisory Board, in response to a proposal of the Management Board, or even an officer of the Bank on the basis of powers conferred on that officer, must preliminarily examine or
approve a transaction to be performed by subsidiaries.
129
Transactions of greater importance
In accordance with Art. 5, paragraph 8 of Consob Resolution No. 17221/12 March 2010,
“Public disclosures on related-party transactions”, the following related-party transactions
concluded in the first half of 2013 were excluded from the scope of application of the regulations for related-party transactions with UBI Banca, because they were concluded with
subsidiaries:
2 transactions for the transfer of mortgages by Banco di Brescia for a total of €731,966,412, of which €628,145,188 under the first covered bond programme (residential mortgages)
and €103,821,224 under the second covered bond programme (commercial mortgages and
residential mortgages not used in the first programme);
9 new credit lines of the “very short-term lending” type for UBI Finance Srl, as approved by the Management Board of UBI Banca on 26th March 2013 for a total of €900,000,000 and callable on 31st March 2014;
6 “repurchase agreement” sales transactions by UBI Banca, with Banca Popolare di Bergamo as the counterparty for €1,216,394,043 on 22nd January 2013 (repurchase date
25th February 2013), €1,230,476,377 on 21st February 2013 (repurchase date 25th March
2013), €1,292,679,990 on 21st March 2013 (repurchase date 23rd April 2013),
€1,316,436,977 on 22nd April 2013 (repurchase date 23rd May 2013), €771,997,902 on 23rd
May 2013 (repurchase date 24th June 2013) and €788,416,436 on 20th June 2013 (repurchase date 23rd July 2013);
6 “repurchase agreement” sales transactions by UBI Banca, with UBI Leasing Spa as the counterparty for €1,469,124,535 on 30th January 2013 (repurchase date 28th February
2013), €1,301,002,444 on 26th February 2013 (repurchase date 28th March 2013),
€1,298,364,039 on 28th March 2013 (repurchase date 29th April 2013), €1,310,924,633 on
30th April 2013 (repurchase date 29th May 2013), €1,121,520,297 on 27th May 2013
(repurchase date 28th June 2013) and €1,167,492,257 on 26th June 2013 (repurchase date 29th July 2013).
We also report that:
With a resolution of 27th March 2013, notarised by dott. Giovanni Battista Calini, public
notary of Brescia, the Supervisory Board of UBI Banca approved the merger of Centrobanca
Spa into UBI Banca Scpa, carried out according to the simplified procedure pursuant to article 2505-bis of the Italian Civil Code. With Provision No. 0178638/13 of 20th February
2013, the Bank of Italy authorised the merger pursuant to article 57 of Legislative Decree
No. 385 of 1st September 1993 and it ascertained compliance of a possible increase in the
capital of UBI Banca at the service of the merger with the principle of sound and prudent
management, pursuant to article 56 of Legislative Decree No. 385 of 1st September 1993.
Finally, we also report that:
no transactions were performed in the reporting period with other related parties which
influenced the capital position or the results of the Parent, UBI Banca, to a significant
extent;
there have been no modifications and/or developments of transactions with related parties,
which may have been reported in previous financial reports, that could have a significant effect on the capital position or the results of the Parent, UBI Banca.
***
Information is reported in the notes to the condensed consolidated interim financial
statements in compliance with IAS 24 on balance sheet and income statement transactions
between related parties of UBI Banca and Group member companies, as well as those items as
a percentage of each item in the condensed consolidated interim financial statements.
***
130
In implementation of article 53, paragraphs 4 et seq of the Consolidated Banking Act and
Inter-Ministerial Credit Committee Resolution No. 277 of 29th July 2008, at the end of 2011 the Bank of Italy issued new regulatory measures (published in the Official Journal of 16th
January 2012) regarding risk assets and conflicts of interest concerning parties connected to
banks or banking Groups, where connected parties are defined as a related party and all the
parties connected to it. The new regulations are designed to guard against the risk that the closeness of persons to decision-making centres might compromise the objectivity and impartiality of decisions
concerning loans to and/or other transactions with the those persons.
The first measure therefore regards the introduction of supervisory limits for risk assets (of a
bank and/or of a group) lent to connected parties. The limits differ according to the type of
related party, with stricter levels for relations between banks and industry.
The supervisory limits are supplemented in the regulations with special approval procedures, together with specific recommendations concerning organisational structure and internal
controls.
The UBI Banca Group was within the limits recommended by the regulatory provisions in its first supervisory report as at 31st March 2013 sent to the Supervisory Authority. Again as at 30th June 2013, for which the supervisory report will be sent by 15th September 2013, UBI Banca Group was within the recommended limits.
131
Other information
Inspections
On 6th February 2013, inspections were completed into UBI Factor which the Bank of Italy had
commenced in November 2012 pursuant to article 108 of Legislative Decree No. 385/1993.
The relative report was received on 23rd April 2013.
This subsidiary and UBI Banca immediately furnished precise replies and defences to the
remarks and observations made in the report, together with details of action programmed in
the areas indicated.
Furthermore, on 14th March 2013 the inspections were completed into the UBI Banca Group,
pursuant to articles 54 and 68 of Legislative Decree No. 385/1993, to assess the adequacy of
the recognition of impairment on non-performing, impaired and restructured loans and also
that of the relative policies and operating procedures. As already reported, these inspections conducted by the Bank of Italy starting in November 2012 formed part of action taken in the
sector nationally which involved 20 Italian banking groups of medium and large dimensions.
The relative inspection report was delivered on 28th May 2013.
The activities conducted by the supervisory inspectors on the UBI Banca Group sample
examined led on aggregate to an increase in the impairment recognised which is among the
lowest in the sector nationally. This was accompanied by marginal reclassifications within the various categories of deteriorated loans (around 20 positions for a total of approximately €20
million). This was also because, while the Group’s policies for the classification of deteriorated
loans can be improved, they were recognised as adequately structured for the current context.
Consistent with the Italian supervisory authority’s policy of subjecting major banking groups to continuous controls by means of a series of targeted inspections, in a communication of the
26th July 2013 the Bank of Italy announced that it was commencing inspections into UBI
Banca designed to assess the Group’s strategies and governance and control systems.
Anti-trust Authority provision concerning IW Bank
With a provision of 23rd April 2013, notified to IW Bank at the beginning of May, the Antitrust
Authority accepted the commitments made by that bank pursuant to article 27, paragraph 7
of the Consumer Code, designed to refine procedures and raise the level of transparency, concerning the time required to close current accounts, thereby making them binding. The
procedure, which had been notified to IW Bank on 14th November 2012, was therefore closed
with no violation by that bank having been ascertained and without the imposition of fines.
Tax aspects
No significant changes occurred in the first half in the legislation and the relative
interpretations affecting Group companies, neither directly nor in relationships with
customers.
LEGGE DI STABILITÀ (“STABILITY” OR ANNUAL FINANCE ACT) FOR 2013 – LAW NO. 228/2012 Tobin Tax (tax on financial transactions) – a tax was introduced on financial transactions
from 2013 which regards the following:
- the purchase of shares issued by companies resident in Italy;
132
- trading in financial derivatives involving equity instruments and profit-sharing investments;
- “high frequency” trading in shares, profit-sharing investments and the derivatives
mentioned in the previous point.
This tax, levied in a proportional manner or on a bracket basis, is payable by the buyer, by
both parties or by the financial intermediary depending on the type of transaction. A broad range of exemptions or exclusions from the tax exist, connected moreover with the nature of
each individual transaction.
The new tax was originally set to run from 1st March 2013 or from 1st July 2013 with regard to
derivatives, but has now been postponed until 1st September 2013 for derivatives, but still
runs from 1st March 2013 for other types and the first payment has been postponed until 16th
October 2013. The last of the expected regulations to implement Law No. 228 was not issued until 18th July 2013. These give details of technical matters, documents and procedures
needed to support the transactions and they are effective retroactively from 1st March 2013
except for derivatives.
Since this law was enacted, investors and market operators in general have voiced their
concerns over possible repercussions. Moreover, France is the only country in Europe which has introduced a similar tax, which, however, employs different procedures. A heated debate is
still in progress in Europe on whether a tax of this type is appropriate. The European version
would hit all types of securities indiscriminately and debt instruments in particular and not
just shares and it would also override national laws.
The complexity of applying this law translates into substantial organisational commitments for
the UBI Banca Group as it does for other players. These are both internal and towards customers and non-resident financial counterparties.
STAMP DUTY
The amount of the stamp duty on communications sent to customers relating to financial
products has again been changed with effect from 2013. A maximum duty of €4,500 has been introduced for taxpayers that are not natural persons, while the maximum amount of €1,200
already set for 2012 for natural persons only has been removed.
ACCOUNTS REGISTER Under article 11, paragraph 2 et seq of Decree Law No. 201/2011, converted into Law No.
214/2011, financial intermediaries are required to furnish the tax register office with lists of balances and movements on some accounts. In practice this involves furnishing balances and
movements on individual customer accounts for the year 2011 and subsequent years.
Information relating to 2011 must be sent in by 31st October 2013.
It appears quite clear that intermediaries are obliged today, with retroactive effect, to rearrange
information in their databases on the basis of extremely complex procedures and at the same
time they must guarantee the security and confidentiality of this data. According to the intentions of the legislation, this information will determine whether or not tax investigations
and controls will be carried out on taxpayers.
FATCA LAW
A USA law enacted on 18th March 2010, added to by the “final regulations” of the USA Treasury Department and the USA Internal Revenue Service on 17th January 2013, introduced
the “foreign account tax compliance act” (FATCA), designed to prevent USA tax evasion by
United States citizens. To achieve this it imposes stronger customer identification and
documentation obligations, whether a United States customer or not, and also a requirement
for a declaration to be made to the USA tax authorities, based on procedures defined by them,
by non-USA financial intermediaries. In the event of failure to comply with the FATCA, payments originated in the USA (interest,
dividends, royalties, rents, pensions, etc) relating either to intermediaries or their customers,
will be subject to a 30% FATCA withholding tax in place of lower withholding taxes provided
for by double taxation treaties. Furthermore, the main operators on international financial
markets – United States banks above all – will no longer hold business relations with
intermediaries who are not FATCA compliant. A notice issued by the USA tax authorities on 12th July 2013 delayed entry into force originally
set for 1st January 2014 until 1st July 2014 in order to allow various countries including Italy
to conclude agreements with the USA government designed to facilitate the application of this
133
legislation through the automatic exchange of information between governments on their
respective taxpayers. In light of the above, the UBI Banca Group is still carrying out activities to implement the
regulations in question, in order to acquire FATCA compliant status.
***
The following procedural documents give information on interpretation.
Tax treatment of commercial paper and bonds – With Circular No. 4/E/2013, the tax
authorities furnished the first clarifications on the amendments to the tax regime for commercial paper and bonds introduced with Decree Law No. 83 of 2012 ("Decreto Sviluppo" –
Growth Decree) and Decree Law No. 179 of 2012 (“Decreto Sviluppo bis"). Consequently, direct
forms of financing on the market were facilitated by a broader range of companies and by smaller companies in particular.
Substitute tax on medium to long-term loans – With Resolution No. 20/E/2013 the tax
authorities, changing their orientation with regard to previous interpretation documents
issued, expressed their policy that for the purposes of the payment of a substitute tax due on
loans granted by resident banks with a term of longer than eighteen months – articles 15 of Presidential Decree No. 601/1973 et seq – it is not important that the contract is signed
abroad but that the formation of the contract (e.g. the “term sheet”) occurs in Italy.
In practice, where signing the contract abroad avoids the imposition of a substitute tax on the
basis of the territorial principle for registration tax pursuant to Presidential Decree No.
601/1973, in the opinion of the tax authorities it must be ascertained whether signing the
contract is merely a formality for agreements already defined in Italy and therefore falling in substance within the scope of the Presidential Decree No. 601/1973 already mentioned. On
the basis of the principle of legitimate expectation, the banking sector entered into discussions
with the tax authorities in order to achieve an interpretation more in line with actual operating
practices followed to-date and also with a view to competition and a comparison with similar
activities carried out by banks abroad. This issue involves some of the companies in the UBI Banca Group.
Expense based deduction of IRAP (local production tax) relating to personnel expense
from income tax – Article 2 of Decree Law No. 201 of 6th December 2011 introduced an
expense based deduction of IRAP relating to personnel expense for employees from income tax
starting with the tax period in progress as at 31st December 2012. This will supplement the previous flat rate deduction of IRAP relating to personal expense and to non-deductible
interest expense. In this regard, with Circular No. 8/E/2013, the tax authorities provided
clarification on how to benefit from the expense based deduction of IRAP relating to personal
expense from income tax and also on how to submit applications for refunds relating to prior
years. In this respect the UBI Banca Group received confirmation of the correctness of its accounting procedures from which a tax credit of €66.1 million had arisen, already recognised
in the 2012 consolidated financial statements.
Titoli di risparmio per l’economia meridionale – With article 8, paragraph 4 of Decree Law
No. 70 of 13th May 2011, a special tax regime (a reduced rate of 5% in place of the ordinary 20% rate) was introduced for interest on Titoli di risparmio per l’economia meridionale (savings
certificates for the southern economy). As already reported, these certificates are issued with
the purpose of restoring geographical balance to credit flows for medium to long-term
investments in small to medium-size businesses in southern Italy and to support ethical
projects in southern Italy. The tax authorities issued Circular No. 10/E of 30th April 2013 to
confirm that this subsidy was only available to individual investors and does not extend to
cover any other types of income.
Losses on loans – The tax authorities issued Circular No. 26 on 1st August 2013 to comment
on amendments introduced to article 101, paragraph 5 of the Consolidated Income Tax Act by
Decree Law No. 83/2012 on the tax deductibility of losses on loans. Although it refers to that
last provision, the Circular contains some statements which, where they relate to prior years, would allow some tax proceedings pending in the courts to be settled in favour of some Group
134
companies. These proceedings concern accrual issues relating to the deductibility of losses on
loans in the presence of bankruptcy proceedings.
Changes in the Articles of Association of UBI Banca
As already reported in the quarterly financial report, on 27th March the Supervisory Board
resolved, on the basis of an authorisation granted by the Bank of Italy on 14th March 2013 to
amend, pursuant to article 46 of the Articles of Association, articles 24 and 45 of the Articles of Association in order to implement the provisions of Legislative Decree No. 91 of 18th June
2012 (implementation of the Shareholder Rights’ Directive).
The new text of the Articles of Association may be consulted on the corporate website at www.ubibanca.it/Corporate Governance/Documenti Societari.
135
Outlook for consolidated operations
With regard to the business outlook for operations, we report the forecasts given below on the
basis of information currently available.
The future of the Italian economic environment remains particularly uncertain in the second
half of 2013. At present, a slight improvement is expected according to the estimates of leading
economic research centres.
As concerns the UBI Group, a further slight increase is forecast in net interest income in
coming quarters under current market conditions. This is due, amongst other things, to a
balanced financial structure which allows pursuit of an attentive policy to manage the more
expensive and less stable components of funding and notwithstanding the low market interest rates and the weak trends for volumes of business which will continue to affect the second half
of the year.
A further contribution could come from the repricing of the rollover of medium to long-term
loans.
The objectives to reduce operating expenses resulting from action (the trade union agreement in particular) commenced at the end of 2012 are confirmed.
Given the current context, as a result, amongst other things, of stronger management of
problem loans, loan losses should stand in absolute terms below the 2012 level.
Bergamo, 26th August 2013
THE MANAGEMENT BOARD
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE PERIOD ENDED 30TH JUNE 2013
137
MANDATORY INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE PERIOD ENDED 30TH JUNE 2013
139
Consolidated balance sheet
Figures in thousands of euro
30.6.2013 31.12.2012 30.6.2012
ASSETS
10. Cash and cash equivalents 490,754 641,608 509,983
20. Financial assets held for trading 4,686,491 4,023,934 5,211,059
30. Financial assets designated at fair value 206,860 200,441 122,376
40. Available-for-sale financial assets 13,746,914 14,000,609 12,837,037
50. Held-to-maturity investments 3,122,272 3,158,013 3,192,239
60. Loans and advances to banks 4,774,761 6,072,346 4,843,142
70. Loans and advances to customers 91,268,495 92,887,969 95,333,181
80. Hedging derivatives 335,198 1,478,322 1,340,946
90. Fair value change in hedged financial assets (+/-) 57,657 885,997 819,561
100. Equity investments 412,881 442,491 406,225
120. Property, plant and equipment 1,921,669 1,967,197 2,002,183
130. Intangible assets 2,946,268 2,964,882 2,971,246
of which:- goodwill 2,536,574 2,536,574 2,538,668
140. Tax assets 2,393,041 2,628,121 2,631,652
a) current 403,125 616,684 464,835
b) deferred 1,989,916 2,011,437 2,166,817
- of which pursuant to Law No. 214/2011 1,469,881 1,451,279 1,260,122
150. Non-current assets and disposal groups held for sale 23,792 21,382 37,748
160. Other assets 1,543,208 1,060,390 1,350,560
127,930,261 132,433,702 133,609,138TOTAL ASSETS
Figures in thousands of euro
30.6.2013 31.12.2012 30.6.2012
LIABILITIES AND EQUITY
10. Due to banks 15,025,192 15,211,171 14,708,333
20. Due to customers 52,843,251 53,758,407 57,074,877
30. Debt securities issued 43,500,547 45,059,153 45,171,850
40. Financial liabilities held for trading 1,548,967 1,773,874 1,274,898
60. Hedging derivatives 1,016,669 2,234,988 1,966,231
80. Tax liabilities 536,670 666,364 562,709
a) current 195,191 317,506 257,906
b) deferred 341,479 348,858 304,803
100. Other liabilities 2,064,030 2,391,283 1,991,859
110. Post-employment benefits 372,182 420,704 400,953
120. Provisions for risks and charges: 328,812 340,589 352,369
a) pension and similar obligations 78,751 80,563 77,680
b) other provisions 250,061 260,026 274,689
140. Valuation reserves -448,311 -571,045 -1,139,092
170. Reserves 3,292,089 3,259,365 3,247,410
180. Share premiums 4,716,864 4,716,861 4,716,859
190. Share capital 2,254,371 2,254,368 2,254,367
200. Treasury shares (-) -6,121 -4,375 -4,375
210. Non-controlling interests (+/-) 832,116 839,287 870,347
220. Profit for the period/year (+/-) 52,933 82,708 159,543
127,930,261 132,433,702 133,609,138TOTAL LIABILITIES AND EQUITY
140
Consolidated income statement
Figures in thousands of euro
1H 2013 1H 2012 FY 2012
10. Interest and similar income 1,645,262 2,081,014 3,924,400
20. Interest and similar expense (799,884) (1,055,090) (1,992,716)
30. Net interest income 845,378 1,025,924 1,931,684
40. Fee and commission income 700,468 676,347 1,369,422
50. Fee and commission expense (98,223) (90,662) (187,616)
60. Net fee and commission income 602,245 585,685 1,181,806
70. Dividends and similar income 8,218 12,682 15,591
80. Net trading income 52,504 21,150 91,803
90. Net hedging income (loss) (4,634) 12,011 1,072
100. Income from disposal or repurchase of: 59,915 74,718 163,551
a) loans and receivables (324) 1,833 (2,131)
b) available-for-sale financial assets 63,091 51,477 141,556
d) financial liabilities (2,852) 21,408 24,126
110. Net profit (loss) on financial assets and liabilities designated at fair value 1,582 (2,515) 852
120. Gross income 1,565,208 1,729,655 3,386,359
130. Net impairment losses on: (401,165) (384,091) (902,024)
a) loans and receivables (383,892) (334,351) (847,214)
b) available-for-sale financial assets (18,002) (47,735) (56,145)
d) other financial transactions 729 (2,005) 1,335
140. Net financial income 1,164,043 1,345,564 2,484,335
170. Net income from banking and insurance operations 1,164,043 1,345,564 2,484,335
180. Administrative expenses (1,057,496) (1,129,346) (2,384,023)
a) staff costs (646,234) (692,780) (1,525,753)
b) other administrative expenses (411,262) (436,566) (858,270)
190. Net provisions for risks and charges (11,604) (20,879) (49,212)
200. Depreciation and net impairment losses on property, plant and equipment (49,141) (52,383) (102,543)
210. Amortisation and net impairment losses on intangible assets (39,022) (40,122) (81,117)
220. Other net operating income/expense 130,077 120,231 244,515
230. Operating expenses (1,027,186) (1,122,499) (2,372,380)
240. Profits of equity investments 31,470 25,759 52,650
260. Net impairment losses on goodwill - - -
270. Profits on disposal of investments 334 30 6,490
280. Pre-tax profit from continuing operations 168,661 248,854 171,095
290. Taxes on income for the period/year from continuing operations (103,086) (75,159) (79,429)
300. Post-tax profit from continuing operations 65,575 173,695 91,666
310. Post-tax profit from discontinued operations - 13 -
320. Profit for the period/year 65,575 173,708 91,666
330. Profit for the period/year attributable to non-controlling interests (12,642) (14,165) (8,958)
340. Profit for the year/period attributable to the shareholders of the Parent 52,933 159,543 82,708
Annualised basic earnings per share 0.1095 0.3543 0.0937
Annualised diluted earnings per share 0.1095 0.3543 0.0937
141
Consolidated statement of comprehensive income
Figures in thousands of euro
1H 2013 1H 2012 FY 2012
A PROFIT (LOSS) FOR THE PERIOD/YEAR 65,575 173,708 91,666
Other comprehensive income, net of taxes, which will be reclassified to profit or loss
when specific conditions are met
Available-for-sale financial assets 123,283 153,168 708,764
Cash flow hedges 660 -1,923 -1,849
Share of valuation reserves of equity-accounted investees -5,798 57,139 90,169
B
Total other comprehensive income, net of taxes, which will be reclassified to profit or
loss when specific conditions are met 118,145 208,384 797,084
Other comprehensive income, net of tax, which will not be reclassified subsequently to
profit or loss
Actuarial gains (losses) on defined benefit plans 4,471 -12,500 -33,942
C
Total other comprehensive income, net of tax, which will not be reclassified
subsequently to profit or loss 4,471 -12,500 -33,942
D Total other comprehensive income net of taxes (item B+C) 122,616 195,884 763,142
E TOTAL COMPREHENSIVE INCOME (item A + D) 188,191 369,592 854,808
F
CONSOLIDATED COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING
INTERESTS 13,163 21,484 14,983
G
CONSOLIDATED COMPREHENSIVE INCOME ATTRIBUTABLE TO THE SHAREHOLDERS
OF THE PARENT 175,028 348,108 839,825
142
Statement of changes in consolidated equity for the period ended 30th June 2013
Figures in thousands of euro
Share capital: 2,764,895 - 2,764,895 - - -2,343 3 - - - - - - 2,762,555 2,254,371 508,184
a) ordinary shares 2,719,788 - 2,719,788 - - -2,343 3 - - - - - - 2,717,448 2,254,371 463,077
b) other shares 45,107 - 45,107 - - - - - - - - - - 45,107 - 45,107
Share premiums 4,772,714 - 4,772,714 - - -401 3 - - - - - - 4,772,316 4,716,864 55,452
Reserves 3,527,244 - 3,527,244 91,666 -66,316 -1,244 - - - - - - - 3,551,350 3,292,089 259,261
Valuation reserves -574,975 - -574,975 - - 625 - - - - - - 122,616 -451,734 -448,311 -3,423
Equity instruments - - - - - - - - - - - - - - - -
Treasury shares -4,375 - -4,375 - - - - -1,746 - - - - - -6,121 -6,121 -
Profit for the period 91,666 - 91,666 -91,666 - - - - - - - - 65,575 65,575 52,933 12,642
Equity 10,577,169 - 10,577,169 - -66,316 -3,363 6 -1,746 - - - - 188,191 10,693,941 9,861,825 832,116
Equity attributable to the
shareholders of the Parent 9,737,882 - 9,737,882 - -48,585 -760 6 -1,746 - - - - 175,028 9,861,825 X X
Equity attributable to non-
controlling interests 839,287 - 839,287 - -17,731 -2,603 - - - - - - 13,163 832,116 X X
Balances as
at 31.12.2012
Restate-
ment of
opening
balances
Balances as
at 1.1.2013
Allocation of prior year
profit
Changes January - June 2013
Stock
options
Dividends
and other
uses
New share
issues
Repurchase
of treasury
shares
Extraordinary
distribution of
dividends
Change in
equity
instruments
Derivatives
on treasury
shares
30th June 2013
Changes
in reserves
Equity transactions
Consolidated
comprehensive
incomeReserves Equity
attributable to
the
shareholders
of the Parent
attributable
to non-
controlling
interests
143
Statement of changes in consolidated equity for the period ended 30th June 2012
Figures in thousands of euro
Share capital: 2,758,122 - 2,758,122 - - 27,308 - - - - - - - 2,785,430 2,254,367 531,063
a) ordinary shares 2,722,032 - 2,722,032 - - 20,746 - - - - - - - 2,742,778 2,254,367 488,411
b) other shares 36,090 - 36,090 - - 6,562 - - - - - - - 42,652 - 42,652
Share premiums 7,506,086 - 7,506,086 -2,713,054 - -4,912 - - - - - - - 4,788,120 4,716,859 71,261
Reserves 2,734,888 - 2,734,888 850,963 -87,630 5,681 - - - - - - - 3,503,902 3,247,410 256,492
Valuation reserves -1,294,683 - -1,294,683 - - -42,927 - - - - - - 195,884 -1,141,726 -1,139,092 -2,634
Equity instruments - - - - - - - - - - - - - - - -
Treasury shares -4,375 - -4,375 - - - - - - - - - - -4,375 -4,375 -
Profit (loss) for the period -1,862,091 - -1,862,091 1,862,091 - - - - - - - - 173,708 173,708 159,543 14,165
Equity 9,837,947 - 9,837,947 - -87,630 -14,850 - - - - - - 369,592 10,105,059 9,234,712 870,347
Equity attributable to the
shareholders of the Parent 8,939,023 - 8,939,023 - -51,691 -728 - - - - - - 348,108 9,234,712 X X
Equity attributable to non-
controlling interests 898,924 - 898,924 - -35,939 -14,122 - - - - - - 21,484 870,347 X X
30th June 2012
Extraordinary
distribution of
dividends
Stock
optionsEquity
attributable
to non-
controlling
interests
Derivatives
on treasury
shares
Equity transactions
Repurchase
of treasury
shares
Change in
equity
instruments
attributable to
the
shareholders
of the Parent
Balances as
at 31.12.2011
Balances as
at 1.1.2012
Restate-
ment of
opening
balancesNew share
issues
Allocation of prior year
profit
Reserves
Dividends
and other
uses
Changes January - June 2012
Consolidated
comprehensive
income
Changes
in reserves
144
Consolidated statement of cash flows (indirect method)
Figures in thousands of euro
1H 2013 1H 2012
499,507 646,167
- profit for the period (+/-) 65,575 173,708
- gains/losses on financial assets held for trading and on financial assets/liabilities at fair value (+/-) -54,086 -18,635
- gains/losses on hedging activities (-/+) 4,634 -12,011
- net impairment losses on loans (+/-) 401,165 384,092
- depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets (+/-) 88,163 92,505
- net provisions for risks and charges and other expense/income (+/-) 11,604 20,879
- net premiums not received (-) - -
- other insurance income/expense not received(-/+) - -
- outstanding taxes and duties -2,159 46,901
- net impairment losses on disposal groups held for sale after tax (-/+) - -
- other adjustments (+/-) -15,389 -41,272
3,912,432 -835,445
- financial assets held for trading -610,053 -2,317,492
- financial assets designated at fair value -4,837 101
- available-for-sale financial assets 693,608 -4,427,010
- loans and advances to banks: repayable on demand - -
- loans and advances to banks: other loans and receivables 1,297,585 1,340,858
- loans and advances to customers 1,235,582 4,022,238
- other assets 1,300,547 545,860
-4,501,982 3,309,786
- amounts due to banks repayable on demand - -
- amounts due to banks: other payables -185,979 4,936,052
- due to customers -915,156 2,643,586
- debt securities issued -1,558,606 -3,205,513
- financial liabilities held for trading -224,907 211,225
- financial liabilities designated at fair value - -
- other liabilities -1,617,334 -1,275,564
-90,043 3,120,508
8,552 12,682
- disposals of equity investments 334 -
- dividends received on equity investments 8,218 12,682
- disposals of held-to-maturity investments - -
- disposals of property, plant and equipment - -
- disposals of intangible assets - -
- disposals of subsidiaries and lines of business - -
-1,308 -3,161,412
- purchases of equity investments -1,308 -
- purchases of held-to-maturity investments - -3,161,412
- purchases of property, plant and equipment - -
- purchases of intangible assets - -
- purchases of subsidiaries and lines of business - -
7,244 -3,148,730
- issues/purchases of treasury shares -1,739 -
- issues/purchases of equity instruments - -
- distribution of dividends and other uses -66,316 -87,630
-68,055 -87,630
-150,854 -115,852
Reconciliation
Figures in thousands of euro1H 2013 1H 2012
Cash and cash equivalents at beginning of period 641,608 625,835
Total net cash flows generated/absorbed during the period -150,854 -115,852
Cash and cash equivalents: effect of changes in exchange rates - -
Cash and cash equivalents at the end of the period 490,754 509,983
A. OPERATING ACTIVITIES
Net cash flows from/used in financing activities
NET CASH GENERATED/USED DURING THE PERIOD
1. Ordinary activities
C. FINANCING ACTIVITIES
1. Cash flows from
2. Cash flows used in
Net cash flows from/used in investing activities
2. Net cash flows from/used by financial assets
3. Net cash flows from/used by financial liabilities
Net cash flows from/used in operating activities
B. INVESTING ACTIVITIES
145
EXPLANATORY NOTES
147
Accounting policies
Basis of preparation
The Interim financial report as at and for the period ended 30th June 2013 of the UBI Banca
Group, approved by the Management Board on 26th August 2013, which authorised
publication, pursuant amongst other things to IAS 10, comprises the interim management
report on consolidated operations and the condensed interim consolidated financial statements. It has been prepared in compliance with article 154-ter of Legislative Decree No.
58/1998, with the IFRS international accounting standards 1 issued by the International Accounting Standards Board (IASB) and with the relative interpretations of the International
Financial Reporting Interpretations Committee (IFRIC) as endorsed by the European
Commission and in force on 30th June 2013.
More specifically the interim condensed consolidated financial statements (containing: the balance sheet, income statement, statement of comprehensive income, statements of changes
in equity, cash flow statement and notes) have been prepared in compliance with IAS 34,
which governs interim financial reporting.
In view of the option allowed by the standard just mentioned, the condensed interim
consolidated financial statements as at 30th June 2013 have been presented in condensed
form and therefore they do not provide all the full information required for annual financial statements and must be read in conjunction with the annual report prepared for the year
ended 31st December 2012.
The condensed interim consolidated financial statements as at and for the period ended 30th
June 2013 include the Parent, UBI Banca Scpa, and the companies comprised within the
scope of the consolidation2 and they have been prepared by using the positions of the single companies included within the consolidation, corresponding to their individual interim
financial statements examined and approved by their respective governing bodies and
appropriately modified and reclassified, where necessary, for compliance with the accounting
policies adopted by the Group.
The condensed interim consolidated financial statements contain a statement by the Chief Executive Officer and the Senior Officer Responsible pursuant to Art. 154 bis of Legislative
Decree No. 58/1998 and they have been subjected to a limited audit by the independent
auditors Deloitte & Touche Spa.
***
The condensed interim consolidated financial statements result from the application of IFRS and measurement criteria, adopted on the basis of a going concern assumption and in
compliance with the principles of accrual accounting, the relevance of the information and the
predominance of substance over form.
These criteria are the same as those applied for the 2012 Annual Report which may be
consulted in full, except for matters which may be detailed in the following sub-section “Other aspects”.
Where it is impossible to measure items in the financial statements with precision, the
application of those policies involves the use of estimates and assumptions which may have a
significant effect on the amounts recognised in the balance sheet and in the income statement.
The use of reasonable estimates forms an essential part of the preparation of financial statements and we have listed here those items in the financial statements in which the use of
estimates and assumptions is most significant:
1 Those standards, implemented in Italian law by Legislative Decree No. 38/2005, which took advantage of the option allowed under
EC Regulation 1606/2002, are applied on the basis of events occurring that are disciplined by them from the date on which their
application becomes compulsory, unless specified otherwise. 2 Details are given in the section “The scope of the consolidation”, in which changes that occurred during the period are also given.
148
- measurement of loans;
- measurement of financial assets not listed on active markets; - measurement of indefinite useful life intangible assets and equity investments;
- quantification of provisions for risks and charges;
- quantification of deferred taxes;
- definition of the depreciation and amortisation charges for property, plant and equipment
and intangible assets with finite useful lives;
- valuation of post-employment benefits.
Furthermore, in compliance with the provisions of IAS 34, income taxes are recognised on the
basis of the best estimate of the weighted average rate expected for the full year.
An adjustment may be made to an estimate following a change in the circumstances on which
it was based or if new information is acquired or yet again on the basis of greater experience. More specifically, although the processes adopted by the Group support the amounts
recognised as at 30th June 2013, in consideration of the current economic recession, the
calculation of estimates is particularly complex and is affected by factors that could be subject
to rapid changes that are unforeseeable today and which to that extent may have substantial
impacts on future amounts recognised.
A change in an estimate is applied prospectively and it therefore generates an impact on the income statement in the year in which it is made and, if it is the case, also in future years.
No changes were made in the first half to the criteria previously employed for estimates in the
financial statements as at and for the period ended 31st December 2012.
These condensed interim consolidated financial statements as at and for the period ended 30th June 2013 have been clearly stated and give a true and fair view of the capital and financial
position, the result for the period, the changes in equity and the cash flows generated.
The Group’s business is not significantly subject to seasonal and/or cyclical factors.
The information contained in this report is expressed, unless otherwise indicated, in euro as the accounting currency.
The mandatory financial statements and the notes to them are presented in thousands of
euro3.
The mandatory financial statements comply with those defined in Bank of Italy Circular No.
262/20054 and in addition to the financial statements as at 30th June 2013 they provide the following comparative information:
balance sheet: 31st December 2012 and 30th June 2012;
income statement: period ended 30th June 2012 and full year ended 31st December 2012;
statement of comprehensive income: period ended 30th June 2012 and full year ended 31st
December 2012;
statement of changes in equity: period ended 30th June 2012; statement of cash flows: period ended 30th June 2012.
The minimum information required under paragraphs 15 B and 16 A of IAS 34 relating to
dividends paid and trends for loan provisions is given in the interim consolidated management
report. This Interim Financial Report also includes a section on the Parent, even if it is required neither by Art. 154-ter nor by IAS 34, containing the separate condensed mandatory interim
financial statements as at and for the period ended 30th June 2013, the reclassified financial
statements and the relative notes and comments. Those financial statements were not
subjected to a limited audit.
With regard to the provisions of IAS 10, concerning events occurring subsequent to the balance sheet date of the condensed interim consolidated financial statements, subsequent to
30th June 2013, the balance sheet date, and until 26th August 2013, the date on which the
Interim financial report was approved by the Management Board, no events occurred to make
adjustments to the figures presented in the report necessary.
3 The relative rounding of the figures has been performed on the basis of Bank of Italy instructions. 4 The balance sheet lists assets and liabilities in order of decreasing liquidity and the income statement recognises expenses according
to their nature.
149
More specifically, in the preparation of this financial report measures introduced with the following provisions were taken into account:
the joint Bank of Italy/Consob/Isvap (insurance authority) document No. 4 of 3rd March
2010 which, following on from the previous joint document No. 2 of 6th February 2009
issued by those authorities, recommends that financial reports provide a clear, full and up-to-date view of the risks and uncertainties to which the company is exposed, the capital
available to meet those risks and its effective ability to generate income. The following sub-
section “Other aspects” may be consulted for information concerning impairment losses on
goodwill and available-for-sale financial assets;
the joint Bank of Italy/Consob/Isvap document No. 5 of 15th May 2012 on the accounting
treatment of deferred taxes resulting from Law No. 214/2011, in which it states that the tax rules basically confer “certainty” on the recovery of the deferred tax assets, by considering
that the probability test mentioned in IAS 12 is automatically passed. That test says that
deferred tax assets may only be recognised if it is probable that taxable income will be
earned against which the asset may be used;
document No. 6 of 8th March 2013 “Committee for coordination between the Bank of Italy, Consob and IVASS (the new insurance authority) on the application of IFRS: the accounting treatment of “term structured repos” 5 . We report in this respect that at present no
transactions of this type exist in relation to the UBI Banca Group.
Regulatory developments
The most important aspects of changes in international accounting standards are given below
with the periods from which they run.
International accounting standards in force from 2013
As already reported in the 2012 Annual Report, various provisions relating to regulations
issued by the European Union come into force in the current year. A brief summary of the
most important is given below.
1. Regulation EU 475/2012: made amendments to IAS 1 “Presentation of Financial Statements” relating to the
“Statement of comprehensive income”, the items of which are divided on the basis of
whether they may subsequently have an impact on the income statement or, by their
nature, are destined to remain recognised within the equity.
This interim financial report includes a “Statement of comprehensive income” among the “Mandatory interim consolidated financial statements as at and for the year ended
30th June 2013”, amended to implement the changes introduced by the regulation cited.
The comparative figures for the consolidated financial statements as at and for the
period ended 31st December 2012 and for the condensed interim consolidated financial
statements as at and for the period ended 30th June 2012 have been restated as a
consequence;
made amendments to IAS 19 which mainly regarded the elimination of the different
applicable accounting treatments for the recognition of actuarial gains and losses which,
on the basis of the new provisions, must be recognised within a single item in the
“statement of comprehensive income”.
These amendments had no significant impact for the UBI Banca Group either on the balance sheet or on the income statement, given the recognition procedures for actuarial
gains and losses described in the measurement criteria set out in the 2012 annual
report already in use. Consequently, no restatement of comparative figures was
necessary.
2. Regulation EU 1255/2012 introduces IFRS 13 “Fair value measurement” applicable to
assets and liabilities for which measurement at fair value or its disclosure in financial reports for information purposes is required.
5 More specifically these are long-term investments consisting of the purchase of securities, a derivative contract to hedge against interest rate risks and a repurchase agreement (known as a “term structured repo”).
150
This standard does not extend the scope of application for the measurement fair value, but
provides a common framework for the guiding principles to be used to calculate the fair value of all items for which that value must be quantified.
One of the most important aspects clarified by this standard is that fair value is defined on
the basis of an “exit price” notion, the price which would be received on the measurement
date from the sale of an asset or the price that should be paid for the transfer of a liability.
That definition resulted in the need to introduce methodological refinements with regard
above all to financial instruments. The Group defined these as part of a specific project, commenced in the second half of 2012, which led to the identification of the main impacts
for the different families of financial instruments resulting from the adoption of IFRS 13
and to the actions to be taken to upgrade the methodological framework in use for the
calculation of fair value.
More specifically the most significant impacts are attributable to the following: a) fair value of unlisted securities: market practice in estimating non-performance risk by
an issuer considers both credit risk and the illiquidity spread associated with the
security. Those parameters were subject to weighting even before the introduction of
IFRS 13, but the method for estimation of the illiquidity spread is further refined by the
introduction of the new standard which quantifies it on the basis of the credit spread in
order to calculate, as required by IFRS 13, the exit price of the instrument. This refinement resulted in the recognition as at 30th June 2013 of a difference before tax of
€13.6 million reflected in liability item 140 in the balance sheet, “valuation reserves”,
because it was attributable to securities classified within “available for sale financial
assets” with a fair value level 2;
b) fair value of unlisted derivatives: IFRS 13 provides clarification stating that both the
non-performance risk of the contractual counterparty (credit value adjustment – CVA)
and that of the reporting entity itself (debit value adjustment – DVA) must be taken into
consideration, because the nature of the contract may change from that of an asset to a
liability in the course of time. The analyses conducted showed that DVA constitutes the real innovation introduced by this standard, because CVA was in fact already reflected in
the determination of credit risk adjustment – CRA, already adopted by the Group. No
particularly significant impacts are presumed with regard to DVA due to the specific
business of the Group, which mainly involves derivative contracts backed by credit
support annex (CSA) contracts and therefore by the regulations governing cash collateral
to back the obligations assumed. As part of the second stage of the project, currently in progress and to be concluded with
the preparation of the 2013 Annual Report, it is planned to implement more refined
models for the calculation of CVA and DVA which take account of the specific nature of
the UBI Banca Group’s business and which constitute a development of the current
methodology in use, commencing with credit parameters such as exposure at default (EAD), probability of default (PD) and loss given default (LGD).
Further updates on the action in progress mentioned above will be given in the 2013
Third Quarter Financial Report and in the 2013 Annual Report.
3. Regulation EU 1256/2012 amends IFRS 7 “Financial instruments: disclosures” in relation
to disclosures for offsetting financial assets and liabilities with the particular regard to:
- all financial instruments subject to offsetting according to IAS 32; - those financial instruments which are subject to “master netting arrangements” – or
similar arrangements – in order to be able to indicate the impacts, or potential impacts,
to users of them on the financial position of the entity.
The amendments in question generate changes solely of a disclosure nature which will be
implemented in the 2013 Annual Report, since these disclosures are not required by IAS 34 which defines the minimum content of interim financial reports.
International accounting standards with compulsory application subsequent to the 2013
Annual Report
Regulation EU 1254/2012 introduces a “consolidation package” consisting of: IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint arrangements” and IFRS 12 “Disclosure of
interests in other entities” and it makes amendments to IAS 27 “Consolidated and separate
financial statements” and to IAS 28 “Investments in associates”.
151
The changes are basically designed to introduce modifications to the rules governing the
preparation of and also compulsory disclosures for consolidated and separate financial statements. More specifically, with the issue of IFRS 10 “Consolidated financial statements”
the IASB wished to introduce a refinement to the definition of “control”, also providing
operational guidelines for application in order to clear up any possible doubts over
interpretation and existing inconsistencies with regard to the current provisions of IAS 27 and
SIC 12. Some gaps were also filled in IAS 27 with specific instructions given for “de facto
control”, veto rights and relations with trust companies In view of the above, we report that the UBI Banca Group is currently assessing the effects of
these changes with studies designed to identify possible impacts on the scope of consolidation.
Regulatory reporting developments The economic situation and consequent pressure from the financial sector have accelerated
significant processes of change in recent years concerning the regulation and supervision of
European banks. In this context the EBA has commenced a process to innovate the regulatory
framework for reporting with the objective of standardising disclosure and reporting
obligations to supervisory authorities at European level through the introduction of common
rules (termed ITS - Implementing Technical Standards), in terms of formats, contents and frequency, in order to make the process of convergence and standardisation of reporting more
efficient.
In this respect we report the recent publication in the Official Journal of the European Union,
with compulsory application from 1st January 2014, of Regulation No. 575/2013 (the Capital
Requirements Regulation – CRR) on prudential requirements for credit institutions and investment companies and also of Directive 2013/36/EU (the Capital Requirements Directive
– CRD IV ) on access to business as a credit institution and also regulatory supervision over
them and over investment companies.
Alongside the innovations mentioned on regulatory and supervisory rules, significant changes
have also been made to IFRSs, with brief descriptions given of those to be implemented
soonest in the preceding sub-sections. The significance and broad scope of the changes, which have an impact on regulatory
reporting as a whole, persuaded the Group to launch a project for the integrated and
consistent implementation of the prescribed action in order to prioritise the following:
- the identification of links between different regulatory areas currently undergoing change
(EBA Reporting, IFRS, Basel 3 etc.) in order to govern and pinpoint possible synergies; - the redesign and rationalisation of processes currently in use in order to address the much
shorter times with which disclosures must be made for regulatory purposes (end-of-year
supervisory reports required for the 30th working day following the balance sheet date
compared to the current 15th day of the third following month).
Updates on developments in the project in question will be provided in the 2013 Annual
Report.
Other aspects
Impairment of available-for-sale securities
The fair value measurement of available-for-sale securities as at 30th June 2013 resulted in
the recognition of impairment losses through profit and loss of approximately €18 million
(gross of tax and non-controlling interests), of which €17.5 million relating to UBI Banca.
These impairment losses are attributable to the following:
€8.6 million to equity instruments and to a large extent to investments in OICR units
(collective investment instruments – held by the Parent), the fair value of which is obtained
on the basis of the NAVs periodically reported by the asset management companies. The impairment losses were recognised, in compliance with Group policy on the impairment
of available-for-sale equity instruments, when the fair value of the instruments either
remained below the historical cost of purchase for a period of longer than 18 months or fell
below that level by more than 35%. As is known any future recoveries in the value of those
152
instruments must be recognised in a separate reserve in equity in compliance with the
provisions of IAS 39;
€9.4 million to debt instruments, and more specifically to a financial instrument (already
written down in the accounts as at 31st March 2013 by €9 million by the merged bank Centrobanca Spa). The impairment was caused by the realisation that the conditions did
not exist to assume that the security would be redeemed at par. Any recovery in value,
objectively attributable to an event occurring subsequent to the recognition of the
impairment and strictly connected with the original cause of the impairment shall be
recognised through profit or loss.
Impairment tests on goodwill
The provisions of IAS 36 require goodwill and therefore the cash generating units (CGUs) or
groups of CGUs to which it was allocated, to be tested for impairment at least annually and
also certain qualitative and quantitative indicators of impairment to be monitored continuously to see whether the necessary conditions exist for testing goodwill for impairment
more frequently.
It is even more important to monitor the factors which might indicate possible impairment in
the current economic environment as fully reported in the Interim Management Report.
The importance of impairment tests was also emphasised by the Supervisory Authority in the
Joint Document No. 4 already mentioned, which underlined the need to pay maximum attention to full compliance with IAS 36 in the preparation of financial statements with regard
to the following:
the impairment testing procedures employed;
the information provided in the notes to the financial statements.
In consideration of the above, trends for the market value of UBI Banca and factors that affect its valuation and that could lead to a value markedly lower than that recorded as at 31st
December 2012 were analysed as at 30th June 2013 together with an assessment of whether
differences between budgeted figures and results for the period ended 30th June 2013 are
material or not
Both the quoted price of the share and the target prices of analysts were considered with
regard to market values.
In detail, it was found that although the share price fell significantly in the first half in
question (a circumstance which, however, also applied to numerous companies in the sector in
a highly critical general market context subject to substantial speculation), the median target price increased considerably, while the maximum target price, like the 5 year credit default
swap, did not undergo significant changes.
The following factors in particular which determine the valuation of UBI Banca were analysed:
i. the cost of equity for UBI Banca (and its determinants); ii. trends in net profit forecasts (and other income statement items) made by equity
analysts for 2013 and for subsequent years;
iii. the interest rate scenario.
The estimate of the cost of equity parameter (and its determinants) was updated as at 30th June 2013 and compared with that as at 31st December 2012 as shown in the table below.
A) Estimates as at
31.12.2012 B) Estimates
as at 30.06.2013 C) Delta estimates %
= B-A
A) Risk free rate (average daily 1 year) 1.97% 1.75% -0.22%
B) Beta based on options vs Stoxx 600 1.66x 1.62x -0.04x
C) Equity risk premium 5.00% 5.00% 0.00%
D) Cost of Equity = A + B x C 10.27% 9.84% -0.43%
E) Increase in the risk-free rate 0.47% 0.69% 0.22%
F) Adjusted cost of equity = D + E 10.74% 10.53% -0.21%
More specifically, the comparison was made at the level of the rate to be applied to the
terminal value. The table shows that a reduction was observed both in the beta and in the
risk-free rate. The overall effect was a reduction in the cost of equity as at 30th June 2013 of 21 b.p.
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The terminal value of the cost of equity (COE) as at 30th June 2013 was calculated using the
same method as that employed as at 31st December 2012 based on a capital asset pricing model. It made use of the yield to maturity of the interbank rate as the risk free rate, an
adjusted UBI Banca beta ( ) (calculated on the basis of the volatility implicit in options on the
share and on the Stoxx 600 index and on the basis of a one-year correlation between the index and the share), which stood at 1.62x as at 30th June 2013, and an equity risk premium of 5%
(COE = Risk Free + x Equity Risk Premium).
Because the interbank interest rate as at 31st December 2012 assumed by management to estimate cash flows for the terminal value was greater than the ten-year risk-free rate, the
estimate of the opportunity cost of capital was increased by an amount equal to the difference
between the future interbank interest rate forecast by management and the ten-year rate. That
approach was maintained as at 30th June 2013.
With regard to forecasts of net profit by equity analysts for the period 2013-2015, no
significant differences were found between the consensus forecasts of the analysts and
management forecasts assumed for the purpose of the estimates.
As concerns the interest rate scenario, indicators of its reasonableness used by Management for the purposes of formulating the business plan showed no changes.
Lastly, a comparison of consolidated results for the period ended 30th June 2013 with budget
forecasts for the same period revealed no differences.
On the basis of the factors reported above, no indicators were found which might require an
immediate evaluation of possible impairment and therefore no need was found, for the
purposes of this Interim Financial Report, to conduct impairment tests.
Collective measurement of performing loans:
Update of internal rating models and LGD
Authorisation was received from the Supervisory Authority to use the advanced internal
rating-based approach for the calculation of capital requirements to meet credit risk on the
small to medium-sized enterprise loan portfolio comprised within the SME retail segment and on exposures backed by residential real estate property, as of the supervisory report as at 30th
June 2013 (reported in the Interim Management Report on consolidated operations). Following
this, internal rating models and LGDs for the new portfolios validated were updated also for
the calculation of collective impairment losses on performing loans (which were already
calculated with Basel 2 parameters), together with historical PD data series in order to grasp only the more recent history of defaults, following the continuation of the difficult economic
situation which began in 2008.
This update had a negative impact on the calculation of impairment losses on the loan
portfolio, which was recognised in the income statement for the period ended 30th June 2013.
This was mainly due to the update of the historical data series for PD, but was partly offset by
a refinement of the models for acquisition finance.
Classification and measurement rules for deteriorated loans
In consideration of the deterioration in the general economic environment, the UBI Banca
Group launched a programme in 2012 named CR2 (Credit Recovery Regularisation) designed to improve monitoring of the quality of the loan portfolio. This project, currently in progress,
also involves refinement of the rules for the classification and measurement of deteriorated
loans in order to ensure greater operational efficiency and a provisioning process based on
even more prudential and uniform criteria. The new measurement rules will be introduced in a
first initial stage in the second half of 2013 by means of an update to Group regulations and in
a second stage (by the first half of 2014) by upgrading the information support system. From an accounting viewpoint these measurment changes will reinforce the standardisation and
provide a more objective treatment of deteriorated positions.
154
Information on the fair value of financial instruments
Transfers between portfolios
The UBI Banca Group made no portfolio reclassifications of financial assets during the
reporting period out of assets measured at fair value into assets measured at amortised cost, in relation to the possibilities introduced by EU Regulation No. 1004/2008 of the European
Commission.
Fair value hierarchy
No changes were made during the first half to the criteria employed for calculating fair value
hierarchies on the basis of the use of observable or non-observable inputs compared to those
used for the 2012 Annual Report, which may be consulted for full details.
Accounting portfolios: distribution by fair value level
Financial assets/liabilities measured at fair value
Figures in thousands of euro L1 L2 L3 L1 L2 L3
1. Financial assets held for trading 4,201,849 483,548 1,094 3,431,331 586,163 6,440
2. Financial assets designated at fair value 113,684 3,181 89,995 109,664 2,812 87,965
3. Available-for-sale financial assets 12,553,094 1,038,058 155,762 12,796,490 1,056,904 147,215
4. Hedging derivatives - 335,198 - - 1,478,322 -
Total 16,868,627 1,859,985 246,851 16,337,485 3,124,201 241,620
1. Financial liabilities held for trading 1,104,072 444,895 - 1,163,939 609,935 -
2. Financial liabilities designated at fair value - - - - - -
3. Hedging derivatives - 1,016,669 - - 2,234,989 -
Total 1,104,072 1,461,564 - 1,163,939 2,844,924 -
30.6.2013 31.12.2012
The item hedging derivatives has decreased significantly as a result of the ALM action taken in
the first half of the year.
The policy pursued by the Group to hedge interest rate risk has been implemented historically
through specific hedges on fixed rate asset items by taking out interest rate derivatives
contracts (“specific hedges”). This strategy was adjusted at the beginning of 2013 and oriented towards a “natural hedging”
model which allows interest rate risk to be managed with less use of derivative contracts. With
exposure to interest rate risk remaining substantially the same, changes were therefore made
in the first weeks of the new year to rationalise hedging by simultaneously cancelling out asset
and liability hedges. The result of this rationalisation process was the elimination of approximately 700 interest
rate derivatives transactions out of an original total of 1,500, equivalent to a nominal amount
of approximately €18 billion.
The action described achieved the following benefits:
- substantial operational simplification, together with less variation in the income statement determined by the impact of fair value changes on hedge accounting items;
- an interest rate position until 2017 which, limited to the items no longer hedged, improves
net interest income in the event above all of increases in the euribor rates (having cancelled
more fixed rate liability items than fixed rate asset items).
155
Changes in the first half in financial assets designated at fair value (level 3)
Figures in thousands of euro
1. Opening balances 6,440 87,965 147,215 -
2. Increases 1,557 6,115 18,706 -
2.1. Purchases 66 - 1,037 -
2.2. Profits recognised in:
2.2.1. Income statement 31 659 118 -
- of which gains 31 230 118 -
2.2.2. Equity X X 17,375 -
2.3. Transfers from other levels - - 9 -
2.4. Other increases 1,460 5,456 167 -
3. Decreases (6,903) (4,085) (10,159) -
3.1. Sales (66) - (4,545) -
3.2. Redemptions - (619) - -
3.3. Losses recognised in:
3.3.1. Income statement (670) (3,466) (516) -
- of which losses (195) (3,466) (492) -
3.3.2. Equity X X (1,270) -
3.4. Transfers to other levels (778) - (3,818) -
3.5. Other decreases (5,389) - (10) -
4. Closing balances 1,094 89,995 155,762 -
FINANCIAL ASSETS
designated at fair value available-for-sale hedgesheld for trading
In application of the classification and measurement criteria for shareholdings, the Parent reclassified its investments in Manisa Srl and Medinvest International Sca out of “financial
assets held for trading” and into “financial assets designated at fair value”. The total amount of
€5,368 thousand was already classified within level 3 as at 31st December 2012 and therefore
this was just a transfer between financial asset classes. The investments mentioned were also
written down together with that in Humanitas Spa, by a total of €1,410 thousand, while the
remaining losses in item 3.3.1 are due to other impairment losses relating to hedge funds. Line item 3.4 shows the write-downs of two debt instruments by €778 thousand (a high precision
engineering group) and by €3,818 thousand (a euro area banking group), respectively.
No financial liabilities recognised at fair value level 3 exist in the Group.
156
List of the main IFRS standards endorsed by the European Commission
IAS/IFRS ACCOUNTING STANDARDS ENDORSEMENT
IAS 1 Presentation of financial statements Reg. 1274/08, 53/09, 70/09, 494/09, 243/10, 149/11, 475/12, 1254/12, 1255/12, 301/13
IAS 2 Inventories Reg. 1126/08, 1255/12
IAS 7 Cash flow statements Reg. 1126/08, 1274/08, 70/09, 494/09, 243/10,
1254/12
IAS 8 Accounting policies, changes in accounting estimates and errors
Reg. 1126/08, 1274/08, 70/09, 1255/12
IAS 10 Events after the reporting date Reg. 1126/08, 1274/08, 70/09, 1142/09, 1255/12
IAS 11 Construction contracts Reg. 1126/08, 1274/08
IAS 12 Income taxes Reg. 1126/08, 1274/08, 495/09, 475/12, 1254/12, 1255/12
IAS 16 Property, plant and equipment Reg. 1126/08, 1274/08, 70/09, 495/09, 1255/12,
301/13
IAS 17 Leases Reg. 1126/08, 243/10, 1255/12
IAS 18 Revenue Reg. 1126/08, 69/09, 1254/12, 1255/12
IAS 19 Employee benefits Reg. 1126/08, 1274/08, 70/09, 475/12, 1255/12
IAS 20 Accounting for government grants and disclosure of government assistance
Reg. 1126/08, 1274/08, 70/09, 475/12, 1255/12
IAS 21 The effects of changes in foreign exchange rates Reg. 1126/08, 1274/08, 69/09, 494/09, 149/11, 475/12, 1254/12, 1255/12
IAS 23 Borrowing costs Reg. 1260/08, 70/09
IAS 24 Related party disclosures Reg. 632/10, 475/12, 1254/12
IAS 26 Retirement benefit plans Reg. 1126/08
IAS 27 (*) Consolidated and separate financial statements Reg. 1254/12
IAS 28 (*) Investments in associates Reg. 1254/12
IAS 29 Financial reporting in hyperinflationary economies Reg. 1126/08, 1274/08, 70/09
IAS 31 (**) Interests in joint ventures Reg. 1126/08, 70/09, 494/09, 149/11, 1255/12
IAS 32 Financial instruments: presentation Reg. 1126/08, 1274/08, 53/09, 70/2009, 495/09,
1293/09, 149/11, 475/12, 1254/12, 1255/12, 1256/12, 301/13
IAS 33 Earnings per share Reg. 1126/08, 1274/08, 495/09, 475/12,
1254/12, 1255/12
IAS 34 Interim financial reporting Reg. 1126/08, 1274/08, 70/09, 495/09, 149/11,
475/12, 1255/12, 301/13
IAS 36 Impairment of assets Reg. 1126/08, 1274/08, 69/09, 70/09, 495/09, 243/10, 1254/12, 1255/12
IAS 37 Provisions, contingent liabilities and contingent assets Reg. 1126/08, 1274/08, 495/09
IAS 38 Intangible assets Reg. 1126/08, 1274/08, 70/09, 495/09, 243/10, 1254/12, 1255/12
IAS 39 Financial instruments: recognition and measurement Reg. 1126/08, 1274/08, 53/2009, 70/09, 494/09, 495/09, 824/09, 839/09, 1171/09, 243/10,
149/11, 1254/12, 1255/12
IAS 40 Investment property Reg. 1126/08, Reg. 1274/08, Reg. 70/09, 1255/12
IAS 41 Agriculture Reg. 1126/08, 1274/08, 70/09, 1255/12
IFRS 1 First-time adoption of international financial reporting standards
Reg. 1126/09, 1164/09, 550/10, 574/10, 662/10, 149/11, 475/12, 1254/12, 1255/12, 183/2013,
301/13, 313/13
IFRS 2 Share-based payment Reg. 1126/08, 1261/08, 495/09, 243/10, 244/10,
1254/12, 1255/12
IFRS 3 Business combinations Reg. 495/09, 149/11, 1254/12, 1255/12
IFRS 4 Insurance contracts Reg. 1126/08, 1274/08, 1165/09, 1255/12
IFRS 5 Non-current assets held for sale and discontinued operations
Reg. 1126/08, 1274/08, 70/09, 494/09, 1142/09, 243/10, 475/12, 1254/12, 1255/12
IFRS 6 Exploration for and evaluation of mineral resources Reg. 1126/08
IFRS 7 Financial instruments: disclosures Reg. 1126/08, 1274/08, 53/09, 70/2009, 495/09,
824/09, 1165/09, 574/10, 149/11, 1205/11, 475/12, 1254/12, 1255/12, 1256/12
IFRS 8 Operating segments Reg. 1126/08, 1274/08, 243/10, 632/10, 475/12
IFRS 10 Consolidated financial statements Reg. 1254/12, 313/13
IFRS 11 Joint arrangements Reg. 1254/12, 313/13
IFRS 12 Disclosure of interests in other entities Reg. 1254/12, 313/13
IFRS 13 Fair value measurement Reg. 1255/12
157
SIC/IFRIC INTERPRETATION DOCUMENTS ENDORSEMENT
IFRIC 1 Changes in existing decommissioning, restoration and similar liabilities Reg. 1126/08, 1274/08
IFRIC 2 Members' Shares in co-operative entities and similar instruments Reg. 1126/08, 53/09,
1255/12, 301/13
IFRIC 4 Determining whether an arrangement contains a lease Reg. 1126/08, 70/09, 1255/12
IFRIC 5 Rights to interests arising from decommissioning, restoration and
environmental rehabilitation funds Reg. 1126/08, 1254/12
IFRIC 6 Liabilities arising from participating in a specific market - waste electrical and electronic equipment
Reg. 1126/08
IFRIC 7 Applying the restatement approach under IAS 29 “Financial reporting in hyperinflationary economies”
Reg. 1126/08, 1274/08
IFRIC 9 Reassessment of embedded derivatives Reg. 1126/08, 495/09,
1171/09, 243/10, 1254/12
IFRIC 10 Interim financial reporting and impairment Reg. 1126/08, 1274/08
IFRIC 12 Service concession arrangements Reg. 254/09
IFRIC 13 Customer loyalty programmes Reg. 1262/08, 149/11, 1255/12
IFRIC 14 Prepayments of a minimum funding requirement Reg. 1263/08, Reg. 1274/08, 633/10, 475/12
IFRIC 15 Agreements for the construction of real estate Reg. 636/09
IFRIC 16 Hedges of a net investment in a foreign operation Reg. 460/09, Reg. 243/10, 1254/12
IFRIC 17 Distributions of non-cash assets to owners Reg. 1142/09, 1254/12, 1255/12
IFRIC 18 Transfers of assets from customers Reg. 1164/09
IFRIC 19 Extinguishing financial liabilities with equity instruments Reg. 662/10, 1255/12
IFRIC 20 Stripping costs in the production phase of a surface mine Reg. 1255/12
SIC 7 Introduction of the euro Reg. 1126/08, 1274/08,
494/09
SIC 10 Government assistance – no specific relation to operating activities Reg. 1126/08, 1274/08
SIC 12 (**) Consolidation – special purpose entities Reg. 1126/08
SIC 13 Jointly controlled entities – non-monetary contributions by venturers Reg. 1126/08, 1274/08
SIC 15 Operating leases – Incentives Reg. 1126/08, 1274/08
SIC 25 Income taxes – Changes in the tax status of an enterprise or its
shareholders Reg. 1126/08, 1274/08
SIC 27 Evaluating the substance of transactions in the legal form of a lease Reg. 1126/08
SIC 29 Service concession arrangements: disclosures Reg. 1126/08, 1274/08, 70/09
SIC 31 Revenue – Barter transactions involving advertising services Reg. 1126/08
SIC 32 Intangible assets – Website costs Reg. 1126/08, 1274/08
(*) The version of the standards applicable today remains applicable until the date of the first application of standards
IFRS 10, IFRS 11 and IFRS 12. (**) Standards applicable until the date of the first application of standards IFRS 10, IFRS 11 and IFRS 12; those
standards are to be considered repealed from that date.
158
The scope of the consolidation
In compliance with the applicable accounting standards, companies in which no equity
investment is held, but for which shares have been received as pledges are excluded from the
scope of the consolidation, in consideration of the purpose of possession, which is to secure
the loan granted and not to exercise control and determine financial and operating policies in
order to obtain the economic benefits deriving from them.
The balance sheet, income statement and statement of cash flows of consolidated companies which operate with a reference currency other than the euro are translated at the exchange
rate ruling at the end of the first half. All the exchange rate differences resulting from the
translation are recognised in a separate reserve in equity. If an investment is disposed of, this
reserve is eliminated with a simultaneous profit or loss in the income statement at the time of
disposal.
No situations existed as at the balance sheet date of this condensed interim consolidated
report, other than those reported below, in which:
- in the presence of the direct or indirect ownership of shares equal to or greater than half
the actual or potential voting rights, it is considered that control is not exercised;
- in the presence of the direct or indirect ownership of shares equal to or greater than 20%, it is considered that significant influence is not exercised (except for equity
investments held for merchant banking activities classified within item 30 “Financial
assets designated at fair value”);
- in the presence of the direct or indirect ownership of less than 20% of the shares, it is
considered that significant influence is exercised.
No significant restrictions existed on that same date on the ability of subsidiaries and
associates to transfer funds to the Parent in payment of dividends or repayment of loans or
advances.
The interim balance sheet dates of all the companies included in the consolidation were the
same as the balance sheet date of the condensed interim financial statements of the Parent.
The companies included in the consolidation as at 30th June 2013 are listed below, divided
into subsidiaries (fully consolidated) and associates (accounted for using the equity method).
The percentage of control or ownership attributable to the Group (direct or indirect), their
headquarters (registered address or operating headquarters) and the share capital is also indicated for each of them.
Fully consolidated companies (control is by the Parent of the Group where no other indication is
given):
1. Unione di Banche Italiane Scpa – UBI Banca (Parent) registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €2,254,370,917.501
2. Banca Popolare di Bergamo Spa (100% controlled) registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €1,350,514,252
3. Banco di Brescia San Paolo CAB Spa (100% controlled) registered address: Brescia, Corso Martiri della Libertà, 13 – share capital: €615,632,230.88
4. Banca Popolare Commercio e Industria Spa (75.0769% controlled) registered address: Milano, Via della Moscova, 33 – share capital: €934,150,467.60
5. Banca Regionale Europea Spa (74.7325% controlled)2 registered address: Cuneo, Via Rome, 13 – share capital: €587,892,824.35
1 Following the exercise of conversion rights on 5th February 2013 and the issue of new shares from the exchange of Centrobanca
shares, the share capital increased compared to €2,254,367,512.50 as at 31st December 2012.
Following further exercises of conversion rights, the share capital rose in July to €2,254,371,430. 2 The percentage of control relates to the total share capital held.
159
6. Banca Popolare di Ancona Spa (92.9858% controlled) registered address: Jesi (Ancona), Via Don A. Battistoni, 4 – share capital: €147,301,670.32
7. Banca Carime Spa (92.8371% controlled) registered address: Cosenza, Viale Crati snc – share capital: €1,468,208,505.92
8. Banca di Valle Camonica Spa (74.2439% controlled and BBS holds 8.7156%) registered address: Breno (Brescia), Piazza Repubblica, 2 – share capital: €2,738,693
9. Banque de Dépôts et de Gestion Sa (100% controlled)3 registered address: Avenue du Théâtre, 14 - Lausanne (Switzerland) – share capital: 10,000,000 Swiss francs
10. UBI Banca International Sa (91.1959% controlled and 5.4825% held by BBS, 3.1598% held by
BPB and 0.1618% by BRE) registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €70,613,580
11. UBI Trustee Sa (100% controlled by UBI Banca International) registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €250,000
12. UBI Capital Singapore Pte Ltd – former BDG Singapore Pte Ltd (100% controlled by UBI
Banca International) registered address: 47 Scotts Road # 06-01/02, Goldbell Towers, 228233 Singapore – share capital: 10,600,000 Singapore dollars
13. Prestitalia Spa (100% controlled)
registered address: Bergamo, Via A. Stoppani, 15 – share capital: €205,722,715
14. IW Bank Spa (98.8710% controlled4)
registered address: Milano, Via Cavriana, 20 – share capital: €18,404,795
15. UBI Banca Private Investment Spa (100% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €67,950,000
16. Centrobanca Sviluppo Impresa SGR Spa (100% controlled) registered address: Milano, Corso Europa, 16 – share capital: €2,000,000
17. UBI Pramerica SGR Spa (65% controlled) operating headquarters: Milano, Via Monte di Pietà, 5 – share capital: €19,955,465
18. UBI Management Company Sa (100% controlled by UBI Pramerica SGR) registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €125,000
19. UBI Leasing Spa (99.5507% controlled) registered address: Brescia, Via Cefalonia, 74 – share capital: €541,557,810
20. Unione di Banche Italiane per il Factoring Spa - UBI Factor Spa (100% controlled) registered address: Milan, Via f.lli Gabba, 1 – share capital: €36,115,820
21. BPB Immobiliare Srl (100% controlled) registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €185,680,000
22. Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa (100% controlled) registered address: Brescia, Via A. Moro, 13 – share capital: €35,000,000
23. Società Lombarda Immobiliare Srl - SOLIMM (100% controlled) registered address: Brescia, Via Cefalonia, 74 – share capital: €100,000
24. BPB Funding Llc (100% controlled) registered address: One Rodney Square, 10th floor, Tenth and King Streets, Wilmington, New Castle County, Delaware, USA – share capital: €1,000,000
25. BPB Capital Trust (100% controlled by BPB Funding Llc) registered address: One Rodney Square, 10th floor, Tenth and King Streets, Wilmington, New Castle County, Delaware, USA – share capital: €1,000
26. Banca Lombarda Preferred Capital Company Llc (100% controlled)
3 Preliminary contracts were signed on 19th August for the disposal of this Swiss bank, which it is presumed will be concluded by the
end of 2013, subject to obtaining final authorisation from the FINMA and to completion of the IT migration onto the target systems of the acquirer.
4 In reality the Group fully controls this online bank, because the remaining shares, amounting to 1.1290% of the share capital, are held in portfolio by IW Bank (and as treasury shares do not pay a dividend).
160
registered address: 1209, Orange Street the Corp. Trust Center, Wilmington, New Castle County, Delaware, USA – share capital: €1,000
27. Banca Lombarda Preferred Securities Trust (100% controlled) registered address: 1209, Orange Street the Corp. Trust Center, Wilmington, New Castle County, Delaware, USA – share capital: €1,000
28. BPCI Funding Llc (100% controlled) registered address: One Rodney Square, 10th floor, Tenth and King Streets, Wilmington, New Castle County, Delaware, USA – share capital: €1,000,000
29. BPCI Capital Trust (100% controlled by BPCI Funding Llc) registered address: One Rodney Square, 10th floor, Tenth and King Streets, Wilmington, New Castle County, Delaware, USA – share capital: €1,000
30. UBI Fiduciaria Spa (100% controlled) registered address: Brescia, Via Cefalonia, 74 – share capital: €1,898,000
31. UBI Gestioni Fiduciarie Sim Spa (100% controlled by UBI Fiduciaria) registered address: Brescia, Via Cefalonia, 74 – share capital: €1,040,000
32. Coralis Rent Srl (100% controlled) registered address: Milano, Via f.lli Gabba, 1 – share capital: €400,000
33. UBI Sistemi e Servizi SCpA5 – Consortium Stock Company (71.7977% controlled and 4.3154%
held by BRE; 2.8769% held by: BPB, BBS, BPCI, BPA and Banca Carime; 2.8757% held by IW Bank; 1.4385% held by: Banca di Valle Camonica, UBI Banca Private Investment and UBI Pramerica SGR; 0.7192% held by UBI Factor; 0.0719% held by Prestitalia; and 0.0097% held by UBI Academy) registered address: Brescia, Via Cefalonia, 62 – share capital: €36,149,948.64
34. UBI Academy SCRL – Limited Consortium Company (68.5% controlled and 3% held by: BPB,
BBS, BPCI, BPA, Banca Carime, BRE and UBI.S; 1.5% held by: Banca di Valle Camonica, IW Bank, UBI Banca Private Investment, UBI Pramerica SGR, UBI Leasing, UBI Factor and Prestitalia) registered address: Bergamo, Via f.lli Calvi, 9 – share capital: €100,000
35. UBI Finance Srl6 (60% controlled) registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
36. UBI Finance CB 2 Srl7 (60% controlled) registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
37. 24-7 Finance Srl8
38. Lombarda Lease Finance 4 Srl9
39. UBI Finance 2 Srl10
40. UBI Finance 3 Srl11
41. UBI Lease Finance 5 Srl12
42. UBI SPV BBS 2012 Srl13
5 The Group holds a 98.49% controlling interest in the share capital of UBI.S; 1.44% is held by UBI Assicurazioni and the remaining
0.07% is held by the former UBI Insurance Broker (now May Jlt Srl).
6 A special purpose entity in accordance with Law No. 130/1999, this company, enrolled on the general list of intermediaries pursuant to Art. 106 of the consolidated banking act, was formed on 18th March 2008 to allow UBI Banca to implement a
programme to issue covered bonds backed by residential mortgages. 7 A special purpose entity in accordance with Law No. 130/1999, this company, enrolled on the general list of intermediaries
pursuant to Art. 106 of the consolidated banking act, was formed on 20th December 2011 to allow the UBI Banca to implement a second programme to issue covered bonds backed by commercial non-residential mortgages.
8 A special purpose entity used in compliance with Law No. 130/1999 for the securitisations of the former B@nca 24-7 performed in 2008. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by a Group
member company. UBI Banca holds a 10% stake. 9 A special purpose entity formed in accordance with Law No. 130/1999 when a securitisation was performed in 2005 by the former
SBS Leasing. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake.
10 A special purpose entity used in accordance with Law No. 130/1999 for the securitisation of a portfolio of performing loans performed by Banco di Brescia at the beginning of 2009. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake.
11 A special purpose entity used in accordance with Law No. 130/1999 for the securitisation of a portfolio of performing loans performed by Banca Popolare di Bergamo at the end of 2010. It was consolidated because this company is in reality controlled,
since its assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake. 12 A special purpose entity formed in accordance with Law No. 130/1999 for the securitisation of performing loans by UBI Leasing in
November 2008. It was consolidated because this company is in reality controlled, since its assets and liabilities were originated by a Group member company. UBI Banca holds a 10% stake.
13 A special purpose entity formed in accordance with Law No. 130/1999 for the securitisation of the performing loans to SMEs of some network banks (Banco di Brescia, Banca Popolare Commercio e Industria and Banca Popolare di Ancona). They were
161
43. UBI SPV BPCI 2012 Srl13
44. UBI SPV BPA 2012 Srl13
Companies consolidated using the equity method (the investment is by the Parent where no
other indication is given):
1. Aviva Vita Spa (50% interest held) registered address: Milan, Via Scarsellini, 14 – share capital: €155,000,000
2. Aviva Assicurazioni Vita Spa (formerly UBI Assicurazioni Vita Spa) (49.9999% interest held) registered address: Milan, Via Scarsellini, 14 – share capital: €49,721,776
3. Lombarda Vita Spa (40% interest held) registered address: Brescia, Corso Martiri della Libertà, 13 – share capital: €185,300,000
4. UBI Assicurazioni Spa (49.9999% interest held)
registered address: Milano, via Tolmezzo, 15 – share capital: €32,812,000
5. Polis Fondi SGRpA (19.6% interest held) registered address: Milano, Via Solferino, 7 – share capital: €5,200,000
6. Zhong Ou Asset Management Co. Ltd (formerly Lombarda China Fund Management - 35%
interest held) registered address: 8f Bank of East ASIA Finance Tower, 66 Hua Yuan Shi Qiao Road, Pudong New Area, 200120 Shanghai (China) – share capital: 188,000,000 yuan/renminbi
7. SF Consulting Srl (35% interest held) operating headquarters: Mantova, Via P.F. Calvi, 40 – share capital: €93,600
8. Sofipo Sa (30% interest held by Banque de Dépôts et de Gestion) registered address: Via Balestra, 12 - Lugano (Switzerland) – share capital: 2,000,000 Swiss francs
9. Prisma Srl (20% interest held)
registered address: Milano, Via S. Tecla, 5 – share capital: €120,000
10. UFI Servizi Srl (23.1667% interest held by Prestitalia) registered address: Roma, Via G. Severano, 24 – share capital: €150,000
Changes in the consolidation scope
No changes were made to the scope of consolidation compared to 31st December 2012, except
for the following:
• Banca Popolare di Ancona Spa: during the first half, UBI Banca made a few further
purchases from non-controlling shareholders of a total of 3,597 shares, which brought its
controlling interest up from 92.9711% as at 31st December 2012 to 92.9858% at the end of June;
• Banca Carime Spa: 107 shares were purchased by the Parent in May, without giving rise to
any changes in the total percentage of the share capital controlled (92.8371%);
• Banca Regionale Europea Spa: following the purchase of 150,374 ordinary shares from
individual shareholders, at the end of the first half the percentage of ordinary shares held
by the Parent had risen to 79.8447% (from 79.8256% at the end of the year), while other equity holdings consisting of 26.4147% of the privileged shares and 59.1400% of the
savings shares remained unchanged. As at 30th June 2013, UBI Banca held a total of
74.7325% control of BRE (74.7159% at the end of December 2012);
• UBI Insurance Broker Srl: on 21st December, this 100% controlled insurance brokerage was
sold to Marine & Aviation JLT Spa (a company 75% controlled by Marine & Aviation and 25% controlled by Jardine Lloyd Thompson) for over €19 million, of which €5.8 million as
gross consolidated gain, net of the dividends received of €3.2 million. The company
consolidated because they are in reality controlled, since their assets and liabilities were originated by Group member companies. UBI Banca holds a 10% stake in each of them.
162
nevertheless remained within the consolidation until 31st December 2012 (but for income
statement items only), because the Group continued to manage operations until the end of the year;
• UBI Leasing Spa: in order to provide a more adequate level of capitalisation, on 30th
November 2012 an extraordinary shareholders’ meeting of UBI Leasing approved an
increase in the share capital up to a maximum limit of €400 million, inclusive of any share
premium. On 2nd January 2013, the subscription of a tranche of a share capital increase
was launched, offered with option rights to shareholders (concluded on the following 21st January, with the purchase of shares on all options not taken up), but fully subscribed by
UBI Banca for €300 million, with the issue of 50,000,000 new shares with a nominal value
of €6 and no share premium. The new share capital of UBI Leasing therefore rose from
€241,557,810 as at 31st December 2012 to the current €541,557,810. As at 30th June
2013, the company was 99.5507% controlled by the Parent (98.9927% at the end of the year);
• Siderfactor Spa – in liquidation: the company was removed from the Company Register on
3rd January 2013 following the completion of the liquidation procedures;
• Centrobanca Spa: activities for the merger of this bank into the Parent were completed in
the first six months of the year. This became effective on 6th May 2013, with effect for
accounting and tax purposes from 1st January 2013.
- 20th March: UBI Banca purchased all the 18,383,132 shares, consisting of the
percentage interest held by Banca Popolare di Ancona (5.4712%), for consideration of
€24.2 million. This brought its direct control on the eve of the merger up to 99.7943%
from 94.3231% at the end of 2012;
- 27th March: the Supervisory Board of UBI Banca approved the merger in accordance
with article 2502 of the Italian Civil Code, approving the merger terms, with the
resolution filed with the Bergamo Company Registrar on 28th March 2013;
- 5th April: a general meeting of the shareholders of Centrobanca approved those same
merger terms and the resolution was filed with the Milan Company Registrar on 8th April 2013;
- 8th-23rd April: in the period set for the exercise of the right to sell (or withdraw) 685,602 Centrobanca shares were sold to UBI Banca for a total of €904 thousand. Therefore, at
the time of the merger, the Group held 335,994,492 Centrobanca shares, accounting for
99.9984% of the total share capital. The right of Centrobanca shareholders who had not approved the merger resolution, because they were absent, dissented or abstained, was in fact recognised to either sell their shares or withdraw from the company in accordance with article 2437 of the Italian Civil Code. If they exercised their right to withdraw, the consideration due to them in cash was €1.219 for each share owned, while if they exercised their right to sell, the consideration was €1.319 for every share presented. If they had fully exercised their right to sell or withdraw, the merger would have been completed without an increase in the share capital and therefore without the issuance of any new shares.
- 6th May: the merger takes effect. On that same date UBI Banca took over the investment portfolio held by corporate and investment bank to become the owner, amongst other
things, of 100% of Centrobanca Sviluppo Impresa SGR, 23.4960% of IW Bank (now
98.8710% directly controlled) and 1.4385% of UBI Sistemi e Servizi (now 71.7977%
controlled);
- 22nd May: Centrobanca’s remaining 5,508 shares (for which neither the right of
withdrawal, nor the to right to sell had been exercised), held by a small banking
counterparty, were exchanged for 1,346 new UBI Banca shares with regular dividend
entitlement (1st January 2013). The corporate ownership transaction involved an exchange ratio on a maximum of 168,934 new UBI Banca shares with a nominal value of €2.50 each, with a consequent increase in the share capital by a maximum of €422,335, a figure which could be rounded off. More specifically, the ratio allotted 1 new UBI Banca share for every 4.0919 Centrobanca shares held, rounded off to further protect controlling shareholders to 1 UBI Banca share for every 4.091 Centrobanca shares held;
• BY YOU Spa – in liquidation: the book value of the investment was written off in the fourth
quarter of the year in view of the state of progress of the liquidation. Consequently, the
company, which was previously accounted for using the equity method, now no longer appears in the consolidation;
163
• Zhong Ou Asset Management Co. Ltd (formerly Lombarda China Fund Management Co.): in
order to achieve an adequate level of capitalisation for the growth of the business and to allow a new shareholder to take a stake in the company, on 3rd April 2013 the share capital
of the company – amounting to 120 million renminbi – was increased to 68 million
renminbi, to reach a total of 188 million renminbi. UBI Banca, which before the operation
held a 49% stake in the company, contributed to the increase in the capital with a
subscription of capital amounting to 7 million renminbi, which brought its percentage stake
down to 35%. With effect from 6th May 2013, this company, which operates in the asset management
sector, changed its name to Zhong Ou Asset Management Company;
• SPF Studio Progetti Finanziari Srl: on 5th April this company, which operates in the field of
advisory services to small to medium-sized businesses and in which BPA holds a stake, was
sold to an individual for €35,000;
• Albenza 3 Srl - Orio Finance Nr. 3 Plc: in consideration of the very small volumes of
business involved after repeated amortisations, the securities held by this special purpose
entity were closed down in May with the transfer of the remaining receivables to the
originator (Banca Popolare di Bergamo) for €9.4 million (the initial amount was
approximately €390 million) and by redeeming the securities placed with institutional
investors and issued by Orio Finance Nr. 3 at the same time (class A notes amounting to €6.8 million, class B notes amounting to €1.6 million and class C notes amounting to €4.7
million). Both securitisations were included in the consolidation because they are in reality controlled, since their assets and liabilities were originated by Group member companies and their consolidation only regarded the assets securitised and the relative liabilities issued. These special purpose entities were formed in compliance with Law No. 130/1999 for the securitisations performed in 2001 and 2002 by the former BPB-CV Scrl (Albenza 3 Srl) and by BPU International Finance Plc Ireland, subsequently closed down – (Orio Finance Nr. 3 Plc).
• Capital Money Spa: on 13th June, following the use of the entire share capital to replenish
losses and the failure of UBI Banca to subscribe to the subsequent increase in capital, a
stake was no longer held in the company. An interest of 20.6711% had been held in this
company, which operates in the mortgage distribution field;
• UBI Capital Singapore Pte Ltd – in liquidation: this company was placed in voluntary liquidation on 14th June. Following market research and studies concerning future
business prospects conducted in the last quarter of 2012, it was found that in addition to
the known complexity of the operating context, the time taken to reach a break-even point
and therefore to generate revenues would be significantly longer than expected. In view of
this, the Group prudently took the decision to leave this market;
• Prestitalia Spa: on 19th June a shareholders’ meeting of this company voted to replenish
losses reported in the accounts for the periods ending 31st December 2012 and 30th April
2013 and also to replenish the negative reserve recognised when the former B@nca 24-7
contributed its salary backed operations (totalling €68,899,417.71) by making full use of
the reserve to replenish losses and the share premium reserve and also by reducing the
share capital – by the remaining proportion not covered by the aforementioned reserves – by €2,587,013 and cancelling 2,977 shares of Prestitalia. Subsequently, again on the same
date, the shareholders meeting voted to strengthen capital by €100 million, with an
increase in the share capital from €151,410,215 to €205,722,715, through the issue of
62,500 ordinary new shares with a nominal value of €869 each and a share premium of
€731 per share and the re-establishment of the share premium reserve amounting to
€45,687,500. The new capitalisation was needed to provide adequate support to develop business. At the end of the first half Prestitalia therefore had share capital of €205,722,715,
composed of 236,735 shares (at the end of 2012 the share capital amounted to
€153,997,228 and consisted of 177,212 shares).
164
Information on the accounts
This section contains the principal information relating to the balance sheet, financial position and income statement. The changes in the balance sheet and financial position that occurred in the reporting period (first six months of 2013), and the operating performance for the period January-June 2013, compared to the corresponding first six months of 2012, are commented on in the Interim Management Report on consolidated operations as at and for the period ended 30th June 2013.
Explanatory tables for the consolidated income statement
Interest and similar income: composition (item 10)
Figures in thousands of euroDebt instruments Financing
Other
transactions1H 2013 1H 2012
1. Financial assets held for trading 29,707 - 29,707 23,824
2. Financial assets designated at fair value - - - - -
3. Available-for-sale financial assets 213,400 - - 213,400 223,433
3. Held-to-maturity investments 54,258 - - 54,258 40,375
5. Loans and advances to banks 1,222 3,670 - 4,892 20,430
6. Loans and advances to customers 60 1,306,680 680 1,307,420 1,772,502
7. Hedging derivatives X X 35,270 35,270 -
8. Other assets X X 315 315 450
Total 298,647 1,310,350 36,265 1,645,262 2,081,014
Interest and similar expense: composition (item 20)
Figures in thousands of euroBorrowings Securities
Other
transactions1H 2013 1H 2012
1. Due to central banks (40,833) - (40,833) (50,500)
2. Due to banks (8,198) X - (8,198) (19,304)
3. Due to customers (202,119) X (306) (202,425) (246,956)
4. Debt securities issued X (524,250) - (524,250) (671,172)
5. Financial liabilities held for trading (23,979) - - (23,979) (15,096)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions X X (199) (199) (381)
8. Hedging derivatives X X - - (51,681)
Total (275,129) (524,250) (505) (799,884) (1,055,090)
Net interest income 845,378 1,025,924
Commission income: composition (item 40) Commission expense: composition (item 50)
Figures in thousands of euro1H 2013 1H 2012
Figures in thousands of euro1H 2013 1H 2012
a) guarantees granted 26,180 26,002 a) guarantees received (24,019) (19,703)
c) management, trading and advisory services 340,500 310,869 c) management and trading services: (39,897) (38,249)
1. trading in financial instruments 12,383 15,534 1. trading in financial instruments (6,454) (7,560)
2. foreign exchange trading 2,916 4,144 2. foreign exchange trading (4) (4)
3. portfolio management 121,271 116,892 3. portfolio management (5,882) (3,871)
3.1. individual 34,154 33,409 3.1. ow n - -
3.2. collective 87,117 83,483 3.2. on behalf of third parties (5,882) (3,871)
4. custody and administration of securities 5,867 5,296 4. custody and administration of securities (3,310) (3,905)
5. depository banking - - 5. placement of financial instruments (2,331) (2,436)
6. placement of securities 94,244 75,041
7. receipt and transmission of orders 25,351 24,915 (21,916)
8. advisory activities 3,183 1,654 d) collection and payment services (19,320) (20,117)
8.1 on investments 3,183 1,654 e) other services (14,987) (12,593)
8.2 on f inancial structure - - Total (98,223) (90,662)
9. distribution of third party services 75,285 67,393
9.1. portfolio management 18 21
9.1.1. individual 18 21
9.2. insurance products 58,442 51,909
9.3. other products 16,825 15,463
d) collection and payment services 72,725 74,840
f) services for factoring transactions 12,369 13,199
i) current account administration 98,895 103,989
j) other services 149,799 147,448
Total 700,468 676,347 Net fee and commission income 602,245 585,685
6. financial instruments, products and services
distributed through indirect networks (20,473)
165
Net trading income (item 80)
GainsProfits from
tradingLosses
Losses from
trading
Net income
1H 2013
Figures in thousands of euro (A) (B) (C) (D) [(A+B)-(C+D)]
1. Financial assets held for trading 50,918 133,371 (7,509) (33,847) 142,933 38,416
1.1 Debt instruments 6,408 22,672 (6,626) (4,105) 18,349 27,926
1.2 Equity instruments 359 1,240 (28) (69) 1,502 (954)
1.3 Units in O.I.C.R. (collective investment instruments) 34 - (29) (45) (40) (209)
1.4 Financing - - - - - -
1.5 Other 44,117 109,459 (826) (29,628) 123,122 11,653
2. Financial liabilities held for trading 9,146 - - - 9,143 4,736
2.1 Debt instruments 9,146 - - - 9,146 4,735
2.2 Payables - - - - - (3)
2.3 Other - - - (3) (3) 4
3. Financial assets and liabilities: exchange rate differences X X X X 4,143 5,652
4. Derivative instruments 365,377 455,918 (355,613) (454,769) (103,715) (27,654)
4.1 Financial derivatives 365,377 455,918 (355,613) (454,769) (103,715) (27,654)
- on debt instruments and interest rates 361,164 450,907 (351,516) (449,992) 10,563 (21,702)
- on equity instruments and share indices 281 1,603 (211) (1,541) 132 1,298
- on currencies and gold X X X X (114,628) (8,088)
- other 3,932 3,408 (3,886) (3,236) 218 838
4.2 Credit derivatives - - - - - -
Total 425,441 589,289 (363,122) (488,616) 52,504 21,150
Net hedging income (loss) (item 90)
Figures in thousands of euro1H 2013 1H 2012
Net hedging income (loss) (4,634) 12,011
Income from disposal/repurchase (item 100)
Financial assets
1. Loans and advances to banks - - - 2,251
2. Loans and advances to customers 406 (730) (324) (418)
3. Available-for-sale financial assets 67,656 (4,565) 63,091 51,477
3.1 Debt instruments 52,457 (4,523) 47,934 49,416
3.2 Equity instruments 15,199 (42) 15,157 1,562
3.3 Units in O.I.C.R (collective investment instruments). - 499
3.4 Financing - -
4. Held-to-maturity investments - -
Total assets 68,062 (5,295) 62,767 53,310
Financial liabilities
1. Due to banks - -
2. Due to customers - -
3. Debt securities issued 3,353 (6,205) (2,852) 21,408
Total liabilities 3,353 (6,205) (2,852) 21,408
Total 71,415 (11,500) 59,915 74,718
Net income (loss) on financial assets and liabilities designated at fair value (item 110)
Figures in thousands of euro1H 2013 1H 2012
Net profit (loss) on financial assets and liabilities designated at fair value 1,582 (2,515)
109,367 105,364
1H 2012
1H 2012Profits LossesNet income
1H 2013
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value
Figures in thousands of euro
166
Other administrative expenses: composition [item 180 b)]
Figures in thousands of euro1H 2013 1H 2012
A. Other administrative expenses (309,894) (322,678)
Rent payable (31,907) (34,136)
Professional and advisory services (38,509) (44,021)
Rentals hardware, software and other assets (20,135) (21,385)
Maintenance of hardware, software and other assets (18,933) (19,786)
Tenancy of premises (26,475) (27,538)
Property maintenance (11,831) (11,533)
Counting, transport and management of valuables (6,753) (7,141)
Membership fees (5,128) (4,898)
Information services and land registry searches (4,908) (5,841)
Books and periodicals (829) (1,002)
Postal (11,856) (12,471)
Insurance premiums (20,921) (22,872)
Advertising (13,300) (8,240)
Entertainment expenses (847) (888)
Telephone and data transmission expenses (27,770) (28,111)
Services in outsourcing (22,666) (24,004)
Travel expenses (9,523) (11,684)
Credit recovery expenses (21,832) (22,589)
Forms, stationery and consumables (4,380) (4,479)
Transport and removals (3,517) (3,588)
Security (4,413) (4,310)
Other expenses (3,461) (2,161)
B. Indirect taxes (101,368) (113,888)
Indirect taxes and duties (11,565) (18,352)
Stamp duty (71,126) (78,467)
Municipal property tax (8,611) (6,991)
Other taxes (10,066) (10,078)
Total (411,262) (436,566)
Explanatory tables for the consolidated balance sheet
As a consequence of the action taken to close down hedging
derivatives last January, the figure for mortgages as at 30th
June 2013 includes the change in the fair value of macro-
hedged financial assets which in December had been
classified within a separate item (asset item 90 on the
balance sheet) and which will be amortised on the basis of the remaining life of the
portfolio.
Composition of loans and advances to customers (asset item 70)
Figures in thousands of euro Performing Deteriorated Performing Deteriorated
1. Current account overdrafts 10,679,706 1,421,188 11,531,444 1,343,890
2. Reverse repurchase agreements 51,364 - 618,901 -
3. Long-term loans 49,112,487 4,393,540 50,295,673 3,931,236
4. Credit cards, personal loans and salary-backed loans 4,172,603 489,222 4,585,937 472,210
5. Finance leases 6,453,429 1,217,776 6,664,574 1,250,191
6. Factoring 2,168,682 320,027 2,448,770 303,609
7. Other transactions 9,895,816 882,144 8,628,013 803,035
8. Debt instruments: 9,466 1,045 9,483 1,003
8.1 Structured instruments - - - -
8.2 Other debt instruments 9,466 1,045 9,483 1,003
Total (carrying amount) 82,543,553 8,724,942 84,782,795 8,105,174
Total (fair value) 88,929,264 8,105,174
31.12.201230.6.2013
Composition of direct funding from customers (liability items 20 and 30)
Figures in thousands of euro
Current accounts and deposits 43,053,031 45,149,448
Term deposits 2,714,005 3,184,368
Financing 6,187,419 4,732,552
- repurchase agreements 5,739,764 4,273,890
- other 447,655 458,662
Amounts due for commitments to repurchase own equity instruments - -
Other payables 888,796 692,039
Total amounts due to customers 52,843,251 53,758,407
Bonds 40,466,264 41,996,277
Other certificates 3,034,283 3,062,876
Total debt securities issued 43,500,547 45,059,153
Total direct funding 96,343,798 98,817,560
31.12.201230.6.2013
167
Financial assets held for trading: composition (asset item 20)
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total
A. On-balance sheet assets
1. Debt instruments 4,189,463 663 - 4,190,126 3,415,759 84 - 3,415,843
1.1 Structured instruments 132 - - 132 111 - - 111
1.2 Other debt instruments 4,189,331 663 - 4,189,994 3,415,648 84 - 3,415,732
2. Equity instruments 10,156 466 2 10,624 13,455 - 5,370 18,825
3. Units in O.I.C.R.
(collective investment instruments) 363 1 1,092 1,456 372 - 1,070 1,442
4. Financing - - - - - - - -
4.1 Reverse repurchase agreements - - - - - - - -
4.2 Other - - - - - - - -
Total A 4,199,982 1,130 1,094 4,202,206 3,429,586 84 6,440 3,436,110
B. Derivative instruments
1. Financial derivatives 1,867 482,418 - 484,285 1,745 586,079 - 587,824
1.1 for trading 1,867 481,890 - 483,757 1,745 586,079 - 587,824
1.2 connected w ith fair value options - - - - - - - -
1.3 other - 528 - 528 - - - -
2. Credit derivatives - - - - - - - -
2.1 for trading - - - - -
2.1 connected w ith the fair value option - - - - -
2.3 other - - - - -
Total B 1,867 482,418 - 484,285 1,745 586,079 - 587,824
Total (A+B) 4,201,849 483,548 1,094 4,686,491 3,431,331 586,163 6,440 4,023,934
31.12.201230.6.2013
Financial assets designated at fair value: composition (asset item 30)
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total
1. Debt instruments - - - - - - - -
1.1 Structured instruments - - - - - - - -
1.2 Other debt instruments - - - - - - - -
2. Equity instruments - 3,181 78,215 81,396 - 2,812 74,248 77,060
3. Units in O.I.C.R.
(collective investment instruments). 113,684 - 11,780 125,464 109,664 - 13,717 123,381
4. Financing - - - - - - - -
4.1 Structured - - - - - - - -
4.2 Other - - - - - - - -
Total 113,684 3,181 89,995 206,860 109,664 2,812 87,965 200,441
Cost 109,664 2,812 87,965 200,441
30.6.2013 31.12.2012
Available-for-sale financial assets: composition (asset item 40)
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total
1. Debt instruments 12,411,359 985,524 3,648 13,400,531 12,603,798 1,002,549 7,466 13,613,813
1.1 Structured instruments 141,168 - 2,069 143,237 166,558 - 2,069 168,627
1.2 Other debt instruments 12,270,191 985,524 1,579 13,257,294 12,437,240 1,002,549 5,397 13,445,186
2. Equity instruments 100,958 - 152,114 253,072 154,798 26 139,749 294,573
2.1 At fair value 100,958 - 134,218 235,176 154,798 - 121,687 276,485
2.2 At cost - - 17,896 17,896 - 26 18,062 18,088
3. Units in O.I.C.R.
(collective investment instruments). 40,777 52,534 - 93,311 37,894 54,329 - 92,223
4. Financing - - - - - - - -
Total 12,553,094 1,038,058 155,762 13,746,914 12,796,490 1,056,904 147,215 14,000,609
30.6.2013 31.12.2012
Held-to-maturity financial assets: composition (asset item 50)
Figures in thousands of euro L 1 L 2 L 3 Total L 1 L 2 L 3 Total
1. Debt instruments 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103
1.1 Structured - - - - - - - - - -
1.2 Other debt instruments 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103
2. Financing - - - - - - - - - -
Total 3,122,272 3,198,149 - - 3,198,149 3,158,013 3,243,103 - - 3,243,103
30.6.2013
Carrying
amount
Fair Value
31.12.2012
Carrying
amount
Fair Value
168
Property, plant and equipment and intangible assets
Property, plant and equipment
Property, plant and equipment decreased in the first half by €45.5 million, of which
€37.1 million in relation to operating
assets (mainly owned) and €8.4 million to
investment properties (again mainly
owned assets).
Intangible assets
The book value of intangible assets as at
30th June 2013 was €2,946.3 million, a decrease of €18.6 million compared to
December 2012, the result of amortisation
for the period of -€39 million and
purchases of software for approximately
€20 million.
Intangible assets consist of goodwill of €2.5 billion relating to Group banks and
companies, unchanged over six months,
and other finite useful life assets
amounting to €409.7 million (€428 million
at the end of 2012). The purchase price allocation associated with the latter (in
relation to the merger with the Banca
Lomparda e Piemontese Group effective
from 1st April 2007) amounted €252 million at the end of June (€261 million as at 31st
December 2012).
Details of impairment tests on goodwill are given in the previous sub-section “accounting policies” of this section which may be consulted.
Figures in thousands of euro30.6.2013 31.12.2012
A. Assets used in operations
1.1 owned 1,712,804 1,748,302
a) land 871,552 870,547
b) buildings 718,177 734,926
c) furnishings 35,443 39,184
d) electronic equipment 36,726 43,667
e) other 50,906 59,978
1.2 acquired through finance leases 39,041 40,681
a) land 20,333 20,844
b) buildings 18,708 19,837
c) furnishings - -
d) electronic equipment - -
e) other - -
Total A 1,751,845 1,788,983
B. Assets held for investment
2.1 owned 169,519 177,906
a) land 102,681 107,365
b) buildings 66,838 70,541
2.2 acquired through finance leases 305 308
a) land 47 47
b) buildings 258 261
Total B 169,824 178,214
Total (A+B) 1,921,669 1,967,197
Property, plant and equipment: composition
Figures in thousands of euro30.6.2013 31.12.2012
Banco di Brescia Spa 671,960 671,960
Banca Carime Spa 649,240 649,240
Banca Popolare di Ancona Spa 249,049 249,049
Banca Popolare Commercio e Industria Spa 209,258 209,258
Banca Regionale Europea Spa 307,189 307,189
UBI Pramerica SGR Spa 170,284 170,284
Banca Popolare di Bergamo Spa 100,045 100,045
IW Bank Spa 68,565 68,565
Banca di Valle Camonica Spa 43,224 43,224
Prestitalia Spa 24,895 24,895
UBI Factor Spa 20,554 20,554
UBI Banca Private Investment Spa 20,189 20,189
UBI Sistemi e Servizi SCpA 2,122 2,122
Total 2,536,574 2,536,574
Composition of the item "Goodwill"
169
Commitments to purchase property, plant and equipment and intangible assets
As shown in the table, further commitments
assumed by the Group in the first half relate to the purchase of buildings for use in
operations amounting to €2.7 million and
also to other operating assets to be
purchased amounting to €3.5 million (the
item “other”).
Commitments relating to intangible assets
amounted to €11.5 million at the end of the
first half year, all relating to the purchase of
software by the Group’s service company.
Non current assets/liabilities held for sale
Assets held for sale, amounting to
€23.8 million, slightly up on the
figure reported at the end of the year (+€2.4 million), all relate to
properties destined for sale by Group
banks, each for fairly small amounts.
Commitments to purchase property, plant and equipment
Assets/amounts 30.6.2013 31.12.2012
A. Assets used in operations
1.1 owned 10,598 2,908
- land - -
- buildings 5,139 2,422
- furnishings 547 7
- electronic equipment 950 -
- other 3,962 479
1.2 Finance lease - -
- land - -
- buildings - -
- furnishings - -
- electronic equipment - -
- other - -
Total A 10,598 2,908
B. Assets held for investment
2.1 owned - -
- land - -
- buildings - -
2.2 Finance lease - -
- land - -
- buildings - -
Total B - -
Total (A+B) 10,598 2,908
Figures in thousands of euro30.6.2013 31.12.2012
A. Single assets
A.1 Financial assets - -
A.2 Equity investments - -
A.3 Property, plant and equipment 23,792 21,382
A.4 Intangible assets - -
A.5 Other non current assets - -
Total A 23,792 21,382
B. Groups of assets (discontinued operating units)
B.1 Financial assets held for trading - -
B.2 Financial assets designated at fair value - -
B.3 Available-for-sale financial assets - -
B.4 Held-to-maturity investments - -
B.5 Loans and advances to banks - -
B.6 Loans and advances to customers - -
B.7 Equity investments - -
B.8 Property, plant and equipment - -
B.9 Intangible assets - -
B.10 Other assets - -
Total B - -
C. Liabilities associated with-non current assets held for disposal.
C.1 Borrowings - -
C.2 Securities - -
C.3 Other liabilities - -
Total C - -
D. Liabilities associated with assets held for sale
D.1 Due to banks - -
D.2 Due to customers - -
D.3 Debt securities in issue - -
D.4 Financial liabilities held for trading - -
D.5 Financial liabilities designated at fair value - -
D.6 Provisions - -
D.7 Other liabilities - -
Total D - -
Non current assets and disposal groups held for sale:
composition by type of asset
170
Provisions for risks and charges
Total provisions for risks and charges were down by €11.8 million compared
to the end of December, of which -€3.9
million for litigation (line item 2.1) and
-€16.7 million for clawback revocation
actions (Other provisions – line item 1
recognised mainly following the conclusion of extraordinary
administration proceedings for
Giacomelli Sport), against an increase
of €9.7 million for other provisions
(line item 3). The latter related mainly
to Prestitalia, UBI Leasing, BRE and UBI Banca (see the information
reported in the section “the
consolidated income statement” in the
Consolidated Interim Management
Report.
Contingent liabilities
Contingent liabilities increased
compared to the end of the year
(+€18.4 million), as a result of a
change in the composition which saw
a reduction in the risk for compounding of interest (-€3.2
million) and for tax litigation (-€16.6
million), against growth for other
litigation (+€38.9 million).
A detailed report on both ordinary litigation and tax litigation, for which provisions were made or for which contingent liabilities were identified, is given in the following sub-sections which may be consulted.
Litigation
Ordinary litigation
Significant litigation (claims of greater than or equal to €5 million) for which the probable risk
has been estimated by Group banks and companies are as follows:
1. “revocation” bankruptcy clawback actions against Banca Popolare di Ancona, brought by Napoli Calcio Spa and by Romeo Andrea Francesco;
2. a “revocation” bankruptcy clawback action against Banca Popolare Commercio e Industria,
brought by FDG Spa;
Provisions for risks and charges: composition
Figures in thousands of euro30.6.2013 31.12.2012
1. Company pension funds 78,751 80,563
2. Other provisions for risks and charges 250,061 260,026
2.1 litigation 112,186 116,049
2.2 costs for staff 45,649 43,979
2.3 other 92,226 99,998
TOTAL 328,812 340,589
Provisions for risks and charges - other provisions
Figures in thousands of euro30.6.2013 31.12.2012
1. Provision for revocation risks 13,563 30,284
2. Provision for bonds and default 7,380 8,127
3. Other provisions for risks and charges 71,283 61,587
TOTAL 92,226 99,998
Contingent liabilities
Figures in thousands of euro30.6.2013 31.12.2012
for staff litigation 255 873
for revocation risks 2,604 2,603
for bonds in default - 80
for compounding of interest 160 3,392
for claim risks 36 47
for other litigation 439,544 400,604
for tax litigation 302,997 319,549
TOTAL 745,596 727,148
171
3. a “revocation” bankruptcy clawback action against Banca Carime brought by Società
Cooperativa Costruire a r.l.; 4. two actions brought against UBI Banca:
- an application for the payment of an end of contract indemnity to an agent following the
revocation of an agency mandate for just cause;
- an application for damages for non-contractual liability;
5. two actions brought against UBI Banca, originating with the former Centrobanca, a
company merged into its parent on 6th May 2013:
- an action with a government counterparty concerning an application for the restitution
of a payment collected following the enforcement of a guarantee granted; - a compensation action for claimed damages brought by the official receiver of a company
concerning the content of declarations made by the former Centrobanca to third parties
regarding the availability of securities held on deposit at that bank;
6. two actions brought against Banca Carime:
- a summons served for compounding of interest; - a damages claim for failure to report the extinction of a guarantee to Centrale Rischi (a
central credit register);
7. two actions brought against Banca Popolare di Bergamo:
- an action relating to a number of combined claims, regarding an appeal against an injunction, compounding of interest and compensation for damages following a
mistaken protest of cheques (case halted following the bankruptcy of the counterparty,
subsequently revoked and then resumed within the legal time limits. The judgement is
pending;
- an action concerning the purchase of covered warrants and Olivetti warrants (the latter
via internet banking). The counterparty not only alleged failure to receive proper information on the risks attaching to covered trades, but also disowned the signatures
on the contract documents, required by regulations governing financial instruments and
on the capital in question. Investigations performed by the internal audit function into
the affair found no evidence of liability of the Bank in the transactions in question. Later
the counterparty recognized the signatures as its own but claimed that he had signed blank forms which had subsequently been filled in abusively by the bank. A ruling by
the court of first instance has been given in favour of the Bank;
8. four actions brought against Banca Popolare di Ancona:
- various actions brought by Salumificio Vito sas claiming damages for contractual and
non-contractual liability;
- a claim for damages for pre-contractual and contractual liability in relation to a financing transaction brought by Eden Costruzioni;
- a claim for damages brought by the Fros sas receivership for alleged abusive grant of
loans and abusive management and co-ordination performed by the bank;
- an action for compounding of interest brought by Corderia Napoletana Spa.
Significant litigation (claims of greater than or equal to €5 million) for which a contingent liability has been estimated by Group banks and companies are as follows:
UBI Banca
- claim for damages for contractual liability, resulting from withdrawal from a contract
concerning software;
- three legal actions have been initiated against the former Centrobanca and therefore
against UBI Banca, as the survivor of the merger, from the bankruptcies of the Burani
Group, all before the Court of Milan:
1) on 11th October 2011, Centrobanca was served with a writ of summons from the Burani Designers Holding NV (“BDH”) Receivership with which it claimed the bank was liable for
“abusive grant of credit” in relation to a public tender offer to purchase launched by
Mariella Burani Family Holding Spa in 2008 (“MBFH”) on the shares of Marella Burani
Fashion Group Spa (“MBFG”);
2) on 1st March 2012, a similar writ of summons was served by the MBFH Receivership, based on arguments of fact and law similar to those already made in the summons
served by BDH Receiver.
172
In both cases the claims for damages amounted to approximately €134 million and no
provision was made for them because the bank, supported by reputable legal advisors, considered the claims without grounds and, besides that, considered the bank itself
(officially accepted as a creditor in all the creditor proceedings concerning the companies
in the Burani Group) damaged and certainly not jointly responsible for the conduct of
the Directors of the Burani Group. Furthermore, because the evidence used by the
Receiverships to support their demands applied in part also to Mediobanca Spa and to
Equita Sim Spa, the Bank decided to extend the proceedings to include these two companies;
3) finally on 26th March 2013, a writ of summons was served by the MBFH Receivership
applying to revoke (clawback action) a payment made the year before to the bankrupt
company relating to a repayment of €4 million that was due on 30th June 2009.
According to the claimant, this payment was made irregularly, and that is by withholding the proceeds from the sale of securities which had been pledged.
With regard to the first two cases, only preliminary documents have been filed and the next
hearings have been postponed until December presumably with a view to joining them. As
regards the third case, the bank is to appear in the hearing set for 17th September 2013.
As already reported, the total gross exposure of the UBI Banca Group to the Burani Group
amounts to €74.2 million, on which impairment losses of 95.74%. have been recognised.
Banco di Brescia
- a summons served by a former director of CIT Spa on Banco di Brescia and on five other
banks, on other directors, on the statutory auditors of CIT and on the independent auditors
of CIT. The intention was to ascertain the responsibilities of the other members of the board
of directors and statutory auditors of CIT and also of the banks which, by participating in a
company turnaround plan, had enabled the company to continue to operate. This caused damages to the company itself and to its creditors, with the consequent aggravation of the
capital and operating situation and strengthening of the guarantees given to back loans.
This writ followed on from litigation directly between the court appointed receiver of CIT and
the former director for responsibility over the failure of the company. On 15th June 2012 the
Ordinary Court of Milan ruled that the plaintiff lacked title to sue and rejected the
applications for a declaratory judgment (therefore deciding in favour of the Bank). The decision will shortly become definitive. In the meantime proceedings between the claimant
and the defendant Fondiaria SAI Spa continued. The proceedings brought by Taddeo
Arcangelo Felice against Fondiaria SAI spa were suspended at a hearing held on 12th June
2013 until a final ruling was given on a claim for damages by CIT in extraordinary
administration against Taddeo Angelo Felice in the criminal proceedings with Criminal Records Registry No. 36983/07 pending with the Court of Milan;
- a summons served by the company Programma Edile Srl, with a bankruptcy case begun in
1999 and still in progress, which in the person of the receiver has requested the return of
amounts drawn/used in the period September 1997-June 1998 by the sole director who
ceased to be a director in September 1997 without the Bank being informed. In December
2012 the Judge accepted the objections raised by the bank and dismissed the case. The case was resumed within the relative time limits, with the first hearing held on the 19th
June 2013 and the next set for 6th December 2013;
Banca Carime
- a “revocation” bankruptcy clawback action brought by Siprio spa;
UBI Leasing
- a claim for damages brought by Brescia Sviluppo and by FRG Costruzioni srl for alleged
failure to meet obligations under finance lease contracts relating to properties under
construction;
- a case brought by the receivership of a supplier company, San Pio Sas, with an application to have a sales contract declared null and void due to violation of the prohibition on
forfeiture agreements.
The following significant cases of litigation have been concluded with respect to the
information reported in the notes to the consolidated financial statements in the 2012 Annual
Report:
173
- “revocation” bankruptcy clawback actions against Banca Popolare di Bergamo, Banca
Popolare Commercio e Industria and Banco di Brescia taken by companies related to Giacomelli Sport S.p.A..
SHAREHOLDER MEETING ANNULMENT
On the 18th July 2013, the UBI Banca was notified of a summons by Giorgio Jannone and
other registered shareholders which, to summarise, applied for the following declarations (i)
that the only list valid for nominating members of the Supervisory Board of the Bank was that submitted by the registered shareholder Jannone himself and others, following the
ascertainment of the irregularities in the other two lists, which had obtained a greater number
of votes in the shareholders meeting held on 20th April 2013; or alternatively (ii) the invalidity
of the shareholders resolution concerning the appointment to company offices; or as a second
alternative (iii) the invalidity of some of the votes cast during a particular period of time in the proceedings of the shareholders’ meeting (when the voting commenced). The Bank considers
that the procedures preliminary to the shareholders meeting to check the lists submitted were
carried out correctly and that the proceedings of the shareholders’ meeting were also carried
out properly. It therefore judges the claims made in that summons to be without foundation.
ANTI-MONEY LAUNDERING NOTIFICATIONS In the first half of 2013 the Guardia di Finanza (Finance Police) served two “Written
notifications of findings” on the UBI Banca Group for failure to report suspect transactions, in
accordance with “Anti Money-Laundering” law, relating to a customer for a total of €3.7
million. An employee of the Group was also charged with failure to comply adequately with
obligations to make proper checks (minimum fine of €10 thousand – maximum fine of €200 thousand).
As already reported in the last financial report, on 8th October 2012, the Financial Information
Office officially launched inspections into UBI Banca on the reporting of suspect transactions
(article 47, paragraph 1 of Legislative Decree No. 231 of 21st November 2007). The inspections
were into the organisation of the anti money-laundering functions and certain products: credit
cards, prepaid cards and pawn credit. The inspections began on 9th October and were completed on the 28th January 2013. No findings of failings or irregularities concerning the
overall system of internal controls were reported, while six counts of failure to report suspect
transactions were found relating to five customers for a total amount of €1.7 million and a
violation for failure to make reports to the Ministry of the Economy and Finance (MEF) in
accordance with article 51 of legislative decree No. 231/2007 (limitations on the use of bearer certificates). The relative defence documents were filed with the MEF within the set time limits.
Furthermore, the MEF archived a case of failure to make a report in 2008 regarding €33
thousand, while for another case the MEF imposed a fine of €70 thousand, against which an
appeal was lodged at the ordinary tribunal. Finally, with regard to two cases in 2007 for which
an ordinary tribunal had annulled the MEF decree-injunction totalling €426 thousand in 2012, the Ministry itself lodged an appeal.
Tax litigation
No significant cases of litigation in progress were settled during the reporting period. The
following developments occurred:
A) TAX INSPECTIONS – TAX ASSESSMENT REPORTS
Banca Popolare di Bergamo: on 10th July 2013 a tax inspection was completed by the Large Taxpayers Office of the Regional Department for Lombardy. It was of the following
nature:
- general for 2010, regarding IRES (corporate income tax), IRAP (local production tax)
and VAT; - specific for the years 2008 and 2009, into the VAT regime for depository banking
services for mutual investment funds;
- specific, into the contribution of a Munich branch in 2008 to UBI Banca International Sa;
The tax assessment report contained the following findings:
174
- years 2008 and 2009: failure to subject payments received for depository banking activity relating to mutual investment funds to VAT. The amount subject to VAT
increased by €1.93 million;
- 2008: failure to subject increased gain on the contribution of the Munich branch to
IRES. Taxable income increased by €1.9 million.
With regard to the first finding, this bank will follow the same line of conduct as that
followed for similar cases in prior years (see below sub-section C).
With regard to the second finding, this bank, supported by an appraisal carried out by a
leading auditing company, considers that the calculation of the overall value of the company contributed and the consequent gain is in line with the normal value as
provided for by tax regulations.
UBI Pramerica SGR: on 7th February 2013 the Milan Tax Police of the Guardia di Finanza
launched an inspection into income tax relating to 2010 and 2011. The inspection is still
in progress.
Banca Regionale Europea: on 21st June 2013, on the conclusion of a general tax inspection relating to 2010 and commenced on 5th March 2013, the Large Taxpayers
Office of the Regional Department for Piedmont of the tax authorities produced a tax
assessment containing the following findings:
- non-deductibility of IRES on loan losses relating to parties who declared bankruptcy in periods prior to 2010;
- taxability for VAT purposes, in place of exemption, of some services provided by this
bank in relation to a securitisation.
This bank considers it advisable to comply with the tax assessment report, having
estimated the payout at €354 thousand plus interest, in consideration of the size of the
amount and also the possible recovery of the increased IRES because not applicable, without prejudice to the possible application to this particular case of the extremely
recent Tax Circular No. 26 of the 1st August 2013.
Banca Popolare Commercio e Industria: on 1st July 2013, on the conclusion of a tax inspection commenced on 17th June 2013, the Milan Tax Police of the Guardia di Finanza produced a tax assessment report in which it claimed that a substitute tax was
due on loans that were not short-term, disbursed to customers in 2010 and stipulated
abroad. The inspectors held that these loans had already been “formed” in Italy and were therefore subject to tax pursuant to article 15 et seq of Presidential Decree No.
601/1973. The document quantified the increased taxation due at €137 thousand, plus
fines and interest.
UBI Banca: on 29th July 2013 the Bergamo Tax Police of the Guardia di Finanza
commenced an inspection in response to the delivery by UBI Banca, as the survivor of
the Centrobanca merger, of data and documents relating to loans that were not short-term, disbursed to customers in the period 2010-2012 and stipulated abroad. The
inspection is currently in progress.
B) ASSESSMENT NOTICES
Substitute tax pursuant to Presidential Decree No. 601/1973 on medium to long-term
loans With Resolution No. 20/E of 28th March 2013, the tax authorities addressed the issue of the application of the substitute tax (0.25%) provided for by articles 15 et seq of Presidential
Decree No. 601/1973 on medium to long-term loans in relation to the specific case of
finance agreements for which the contracts are signed abroad.
More specifically, the tax authorities considered that signing these contracts abroad – and
therefore outside the scope of the substitute tax – was not relevant, while the actual formation of the contract in Italy was relevant (see agreement of the parties). On the basis of
that assumption, some Group banks (Banca Popolare di Bergamo, Banco di Brescia,
Centrobanca and Banca Popolare Commercio e Industria) have received payment demands
or questionnaires relating to the years 2009 and following, alleging failure to subject the
loans to a substitute tax in the terms indicated above. It must be considered that the conclusions reached by the resolution mentioned above, which triggered the notices issued
by the tax authorities, seem to differ from previous orientations of the authorities on the
175
question of the territorial nature of taxation and consequently the principle of “legitimate
expectation” should at least be invoked. Furthermore, most of the contracts to which the tax demands relate contain a clause allowing the increased tax to be charged-on to the
borrower. Since the controversy is common to the banking sector as a whole, contacts are
underway to arrive at a precise interpretation of the regulations.
As concerns temporary tax collection pending judgement, payment of the increased tax has
been made totalling approximately €88 thousand plus tax for the payment demands in
question, as provided for by relative legislation (articles 55 and 56 of Presidential Decree No. 131/1986, applicable to the substitute tax in accordance with the penultimate
paragraph of article 20 of the aforementioned Presidential Decree No. 601/1973).
C) Litigation concerning the VAT regime for mutual investment fund depository banking
services
With regard to the VAT regime applicable to income received in the years 2006 et seq for
depository banking business by Banca Popolare di Bergamo and Banca Popolare
Commercio e Industria, while legal action will be taken, a settlement agreement between
the banking sector and the tax authorities is in progress designed to identify the amount
taxable for the service as a whole.
In this respect, at present assessment notices have been received relating to the following years: 2006 for both BPCI and BPB, 2007 for both BPCI and BPB and 2008 for BPB only
(partial assessment). These notices make increased VAT demands totalling €6.77 million
(€4.45 million for BPB and €2.32 million for BPCI) and impose fines totalling €17.12 million
(€11.74 million for BPB and €5.38 million for BPCI). In consideration of the small size of the
assessment relating to BPB for 2008 this was settled with a payment of €5 thousand.
Pending a decision, BPCI made a temporary payment of €1.29 million (relating to 2006 and 2007), while BPB paid €0.65 million (relating to 2007).
As concerns progress in the litigation, Ruling No. 143 of the Tax Commission of the
Province of Milan was deposited on the case concerning BPB for 2006, which like Ruling
No. 321 of 2012 by the same Commission relating to 2006 for BPCI (appealed during the
first half):
- on the one hand, confirmed that VAT was due;
- on the other hand, cancelled the fines due to the objective of uncertainty of the
applicable tax rules and the good faith of the taxpayer, who had complied accurately
with recommendations made by the tax authorities, and pronounced the interest not payable.
As concerns the proposed settlement action mentioned above, the hearings scheduled for
the first half were postponed by the competent Tax Commissions.
It must also be considered that under the last paragraph of article 60 of Presidential Decree No. 633/72, a provider of services (the bank) has the right to charge on tax due following
tax assessment to customers, while it must bear costs for fines and interest.
D) PREFERENCE SHARES – UBI BANCA AND BANCO DI BRESCIA
As already reported, the litigation in question concerns the alleged failure to apply (and consequently to pay) a withholding tax at source pursuant to article 26, paragraph 5 of
Presidential Decree No. 600/1973 (at a rate of 12.5%, now 20%) on the interest due from
Italian banks (BPU Banca, Banca Popolare di Bergamo, Banca Popolare Commercio e
Industria, Banco di Brescia) on deposits which the foreign special purpose entity subsidiary
(Llc) resident in Delaware had made in the early 2000s and which still exist, as part of
complex operations to strengthen regulatory capital. Increased withholding taxes were assessed relating to the years 2004-2007, totalling €23.99 million.
The operations took place through the issue of financial instruments termed “preference
shares”. Because the deposit mentioned above contained a subordination clause, it was
reclassified by the tax authorities as a loan and was therefore subject to the withholding tax
already mentioned. Hearings were held during the first half at the competent Tax Commissions for the years
(2004-2007) subject to assessment, during the course of which the parties involved – UBI
Banca/Banco di Brescia and the tax authorities – proposed a postponement of the
proceedings because the issues in question had recently spread to include major national
banking groups with clear repercussions in terms of regulatory capital. Investigations and
176
discussions between the tax authorities and the Supervisory Authority are still in progress,
because the operations to strengthen capital were carried out on the basis of supervisory instructions in force at the time and on the basis of specific authorisations issued by that
authority.
E) UBI BANCA, BPB IMMOBILIARE AND BANCA CARIME – IMMOBILIARE SERICO CONTRIBUTIONS
The litigation in question concerns the reclassification for tax purposes of contributions of
operations made in 2003, which included properties, into property transfers, with a consequent demand for greater IRPEG (former corporate income tax) and VAT and the
relative fines.
The amounts demanded (increased tax, interest and fines) are as follows:
a) €36.1 million for BPB Immobiliare;
b) €38.9 million for Banca Carime; c) €12.4 million for UBI Banca.
As concerns the court proceedings, the companies concerned were victorious in the courts
of both first and second instance (Regional Tax Commission of Milan for UBI Banca and
BPB Immobiliare and Regional Tax Commission of Catanzaro for Carime).
Between November 2012 and the February 2013, the Attorney General, on behalf of the tax
authorities, appealed against the three favourable rulings in the court of second instance to the Court of Cassation and the companies appeared in turn in that supreme court for their
defence.
F) FORMER CENTROBANCA – 2006 IRES
On 4th March 2013, during the course of a hearing held before the Tax Commission of the Province of Milan a request was made, in agreement with the tax authorities, to adjourn the
case concerning a notice of assessment relating to 2006 to a new date. The case regarded to
a large extent a presumed non-deductibility of losses on and/or write-downs of loans
(assessment of increased IRES totalling €2.74 million). Tax authorities Circular No. 26 of 1st
August 2013 recently intervened on this point. Although it refers to modifications on the
question of the losses introduced by Decree Law No. 83/2012, it contains principles applicable to the prior year case in question and in this sense it endorses the actions of the
bank.
G) UBI LEASING
As already reported, the main tax litigation for this company regards (i) alleged improper application of a subsidised VAT rate on marine lease transactions, (ii) undue deduction of
VAT on invoices for allegedly non-existent transactions, and (iii) improper quantification of
the recognition of non-existent invoices for IRES and regional production tax (IRAP)
purposes. The total increased tax assessed amounts to €5 million.
With regard to the litigation on VAT on marine lease transactions, the tax authorities lodged
an appeal with the Cassation Court against the favourable decision in the court of second instance for tax relating to 2004 (the former SBS Leasing) and another appeal in the
Regional Commission against a decision in the court of first instance for tax relating to
2005 (the former BPU Esaleasing). The company is appearing in the relative courts to
defend itself.
As concerns the VAT, IRES and IRAP litigation for alleged non-existent transactions – and
with regard in particular to the “maxi-instalment” – the tax authorities lodged an appeal with the Cassation Court during the period against the favourable decision in the court of
second instance for tax relating to 2003 (former SBS Leasing). The company is appearing to
defend itself. Consistent with recent declarations by the EU Court of Justice, the company
has underlined in the court records of the proceedings that it has no connection whatsoever
with any illicit behaviour by third parties.
177
Segment Reporting
Distribution by business segment: income statement for the period ended 30th June 2013
Figures in thousands of euro
item/business segment Banking
(Aggregate)
Non-banking
financial
(Aggregate)
Parent and other
companies
(UBI, UBI.S, Property
companies + intercompany
and consolidation entries)
TOTAL
Net interest income 704,887 64,638 75,917 845,442
Net fee and commission income 585,289 38,749 -21,793 602,245
Other expense/income 43,531 4,609 69,445 117,585
Gross income 1,333,707 107,996 123,569 1,565,272
Net impairment losses on loans and financial assets -235,916 -75,926 -89,323 -401,165
Net financial income 1,097,791 32,070 34,246 1,164,107
Net income from insurance operations - - - -
Net income from banking and insurance operations 1,097,791 32,070 34,246 1,164,107
Administrative expenses -846,463 -63,762 -71,259 -981,484
Net provisions for risks and charges -7,387 -3,176 -1,041 -11,604
Depreciation, amortisation and net impairment losses on property, plant
and equipment and intangible assets -40,706 -2,430 -47,253 -90,389
Other net operating income/expense 48,220 6,465 1,542 56,227
Operating expenses -846,336 -62,903 -118,011 -1,027,250
Profits of equity investments 2,932 - 28,538 31,470
Net impairment losses on goodwill - - - -
Profits (losses) on disposal of investments 330 -9 13 334
Pre-tax profit (loss) from continuing operations 254,717 -30,842 -55,214 168,661
Taxes on income for the period from continuing operations -120,481 5,340 12,055 -103,086
Post-tax profit (loss) from discontinued operations - - - -
(Profit) loss for the period attributable to non-controlling interests -9,403 -4,718 1,479 -12,642
Profit (loss) for the period 124,833 -30,220 -41,680 52,933
Distribution by business segment: balance sheet as at 30th June 2013Figures in thousands of euro
item/business segment Banking
(Aggregate)
Non-banking
financial
(Aggregate)
Parent and other
companies
(UBI, UBI.S, Property
companies + intercompany
and consolidation entries)
Loans and advances to banks 6,055,662 - -
Due to banks - 10,782,475 5,523,618
Net financial assets 1,003,314 159,327 18,427,115
Loans and advances to customers 66,148,288 16,483,138 8,637,069
Due to customers 47,136,779 268,100 5,438,372
Debt securities issued 20,806,462 3,421,492 19,272,593
Equity-accounted investees 486 35 412,360
Non-controlling interests 825,936 34,918 -28,738
Profit (loss) for the period 124,833 -30,220 -41,680 Three segments have been identified in the presentation of the results and the financial position in the first half,
termed banking, non-banking financial and Parent and other companies. The banking segment comprises the eight network banks plus IW Bank Spa, Banque de Depots et de Gestione and UBI International. The non-banking financial segment comprises UBI Leasing, UBI Factor, UBI Pramerica SGR, Prestitalia, UBI
Fiduciaria and UBI Gestioni Fiduciarie SIM. The Parent and other companies segment comprises UBI Banca, UBI.S and all the remaining Group member companies. That segment includes all the consolidation entries including all the intercompany eliminations with the exception of those relating to the purchase price allocations assigned to the relative individual segments.
The algebraic sum of the three segments identified in this manner represents the income statement and balance sheet of the UBI Banca Group as at and for the year ended 30th June 2013. The items "loans and advances to banks" and "due to banks" have been stated in the three segments on the basis of
the prevailing balance. The item "non-controlling interests" in the "banking" and "non-banking financial" segments relates only to the portion of equity and of the profit for the period of the companies not wholly owned. It does not include non-controlling interests and the part of consolidated entries attributable to non-controlling interests, which have been assigned to
the "Parent and other companies" segment.
178
Transactions with related parties pursuant to IAS 24
In compliance with IAS 24, information is provided below on balance sheet and income statement transactions between related parties of UBI Banca and Group member companies,
as well as those items as a percentage of the total for each item in the consolidated financial
statements.
According to IAS 24, a related party is a person or entity that is related to the entity that is preparing its financial statements (the “reporting entity”).
(a) A person or close family member of that person is related to the reporting entity if that person:
(i) has control or joint control over the reporting entity:
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions apply:
(i) the entity and the reporting entity are members of the same group (which means that each parent, subsidiary
and fellow subsidiary is related to the others);
(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);
(iii) both entities are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment defined benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers
are also related to the reporting entity;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
In compliance with the regulations in force, we report that all transactions carried out by the
Group member companies with related parties were conducted in observance of correct
principles both in substance and form, under conditions analogous to those applied for
transactions with independent parties.
More specifically, the Parent and its subsidiary UBI Sistemi e Servizi SCpA provide Group member companies with a series of services, governed by intragroup contracts drawn up in
accordance with the principles of consistency, transparency and uniformity in line with the
organisational model of the Group. Under this model, strategic, and management activities
are centralised at UBI Banca and technical and operational activities in UBI Sistemi e Servizi
SCpA.
The prices agreed for the services provided under the contracts were determined on the basis of market prices or, where appropriate reference parameters could not be found in the
marketplace, in accordance with the particular nature of the services provided and also in
relation to the service contracts signed by UBI.S with its consortium shareholders, on the
basis of the costs incurred for the services provided.
The main intercompany contracts existing at the end of the first half included those which implement the centralisation of activities in the Governance and Business Areas of the Parent
and they involved the Parent and the main banks in the Group (Banca Popolare di Bergamo
Spa, Banca Popolare Commercio e Industria Spa, Banca Popolare di Ancona Spa, Banca
Carime Spa, Banco di Brescia Spa, Banca Regionale Europea Spa, Banca di Valle Camonica
Spa, UBI Banca Private Investment Spa), and also contracts to implement the “national tax
consolidation” (in accordance with articles 117 to 129 of Presidential Decree No. 917/1986, the consolidated law on income tax) concluded by the Parent Bank. There were also all the
intercompany contracts which implement the centralisation in UBI Sistemi e Servizi of
support activities for the principal companies in the Group.
We report with regard to transactions between companies in the Group and all of its related parties that no atypical and/or unusual transactions were performed; furthermore, no
transactions of that type were even performed with counterparties that were not related
parties.
Atypical and/or unusual transactions, as indicated in Consob Communications No.
98015375 of 27th February 1998 and No. 1025564 of 6th April 2001, are intended to mean all
179
those transactions which, because of their significance/importance, the nature of the
counterparties, the content of the transaction (even in relation to ordinary operations), the way in which the transfer price is decided and the timing of the event (close to the end of the
financial year) might give rise to doubts concerning: the correctness/completeness of the
information in the accounts, a conflict of interests, the security of the company’s assets and
the rights of non-controlling shareholders.
The information pursuant to article 5, paragraph 8 of Consob Resolution 17221/2010 on transactions of “greater importance” concluded with related parties in the first half of 2013, is
reported in the consolidated Interim Management Report, which may be consulted.
Transactions with related parties – principal balance sheet items
Figures in thousands of euro
Financial
assets held for
trading
Available-for-
sale f inancial
assets
Financial
assets FVO
Loans and
advances to
banks
Loans and
advances to
customers
Due to banksDue to
customers
Debt
securities
issued
Financial
liabilities held
for trading
Guarantees
granted
Associates - 10,891 - - 65,922 - 226,522 - 6 27,457
Senior managers (1)
- - - - 4,243 - 6,148 673 - -
Other related parties - - - - 34,763 - 38,420 122 - -
Total - 10,891 - - 104,928 - 271,090 795 6 27,457
(1) A “Senior manager” is defined as “a manager with strategic responsibilities of the entity or of its parent, where a manager with strategic responsibility is
intended to mean those who have power and responsibility for the planning, management and control of the activities of the entity including its directors”
Related-party transactions - percentage
Figures in thousands of euro
Financial
assets held for
trading
Available-for-
sale f inancial
assets
Financial
assets FVO
Loans and
advances to
banks
Loans and
advances to
customers
Due to banksDue to
customers
Debt
securities
issued
Financial
liabilities held
for trading
Guarantees
granted
With related-parties (a) - 10,891 - - 104,928 - 271,090 795 6 27,457
Total (b) 4,686,491 13,746,914 206,860 4,774,761 91,268,495 15,025,192 52,843,251 43,500,547 1,548,967 6,230,177
Percentage (a/b*100) - 0.08% - - 0.11% - 0.51% 0.00% 0.00% 0.44%
Summary of principal income statement related-party transactions
Figures in thousands of euro
Net interestDividends and
similar income
Net fee and
commission
income
Staff costsOperating
income/expenses
Other
administrative
expenses
Associates (956) - 52,768 584 706 (6,458)
Senior managers (1)
20 - 77 (6,861) - (6)
Other related parties (35) - 153 (157) 2 (134)
Total (971) - 52,998 (6,434) 708 (6,598)
(1) A “Senior manager” is defined as “a manager with strategic responsibilities of the entity or of its parent, where a manager with strategic responsibility is intended to mean those who have power and responsibility for the planning, management and control of the activities of the
entity including its directors”
Figures in thousands of euro
Net interestDividends and
similar income
Net fee and
commission
income
Staff costsOperating
income/expenses
Other
administrative
expenses
With related-parties (a) (971) - 52,998 (6,434) 708 (6,598)
Total (b) 845,378 8,218 602,245 (646,234) 130,077 (411,262)
Percentage (a/b*100) -0.11% - 8.80% 1.00% 0.54% 1.60%
Percentage of income statement transactions with related parties in respect of the items in the consolidated
financial statements
180
Principal balance sheet items with associate companies subject to significant influence
Figures in thousands of euro
Financial assets
held for trading
Available-for-
sale f inancial
assets
Loans and
advances to
customers
Due to banksDue to
customers
Debt securities
issued
Financial
liabilities held
for trading
Guarantees
granted
Aviva Assicurazioni Vita Spa - - 16,702 - 36,852 - 6 1,234
Aviva Vita Spa - - 25,600 - 60,787 - - 1,273
Lombarda Vita Spa - - 13,354 - 81,367 - - 24,950
Polis Fondi SGRpA - 10,891 102 - 24 - - -
Prisma Srl - - - - 248 - - -
SPF Studio Progetti Finanziari Srl - - - - - - - -
SF Consulting Srl - - 560 - 123 - - -
UBI Assicurazioni Spa - - 9,604 - 47,121 - - -
Total - 10,891 65,922 - 226,522 - 6 27,457
Principal income statement items with associate companies subject to significant influence
Figures in thousands of euro
Net interestDividends and
similar income
Net fee and
commission
income
Staff costsOperating
income/expenses
Other
administrative
expenses
Aviva Assicurazioni Vita Spa (262) - 2,076 (4) 5 -
Aviva Vita Spa (375) - 22,299 - - -
Lombarda Vita Spa (2) 45,361 18,340 - 6 (1,969)
Polis Fondi SGRpA - 65 129 - - -
Prisma Srl - - 3 - 16 -
SPF Studio Progetti Finanziari Srl - - 10 - 3 (7)
SF Consulting Srl - - 143 - - -
UBI Assicurazioni Spa (317) 11,099 9,768 588 676 (4,422)
UFI Servizi Srl - - - - - (60)
Total (956) 56,525 52,768 584 706 (6,458)
181
Events occurring after the end of the first half
No events of importance that might affect the operating and financial position presented
occurred after 30th June 2013, the reporting date of this interim financial report, and until
26th August 2013, the date of its approval by the Management Board of UBI Banca Scpa.
The following is nevertheless reported for your information:
on 10th July 2013, UBI Banca redeemed in cash the convertible bonds “UBI 2009/2013 convertibile con facoltà di rimborso in azioni” still outstanding, which matured on that same
date, for a total amount of €639,132,255;
on 19th July 2013, with Provision No. 689988 the Bank of Italy authorised the UBI Banca
Group – from the supervisory report as at 30th June 2013 – to use the advanced internal
rating based (AIRB) approach to calculate capital requirements to meet credit risk relating
to the small and medium-sized enterprise portfolio and to exposures backed by residential properties:
on 19th August 2013 – as part of processes involving rationalisation and the disposal of
non-strategic assets, UBI Banca signed contracts for the sale of 100% of the share capital of
Banque de Dépôts et de Gestion SA (BDG), a Swiss subsidiary, based in Lausanne, with a
branch in Lugano, to Banque Cramer & Cie SA (Norinvest Group). Once final authorisation is received from FINMA and the IT migration onto target systems of the acquirer has been
completed, BDG will be merged into Banque Cramer & Cie SA, presumably by the end of
2013. The disposal will have no significant impacts on the UBI Banca Group’s consolidated
income statement and capital ratios.
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE
SENIOR OFFICER RESPONSIBLE FOR
PREPARING THE COMPANY ACCOUNTING DOCUMENTS
183
Statement on the condensed interim financial report pursuant to article 81-ter of
Consob Regulation No. 11971 of 14th May 1999 and subsequent amendments and
additions
1. The undersigned Victor Massiah, Chief Executive Officer, and Elisabetta Stegher, Senior
Officer Responsible for preparing the company accounting documents of UBI Banca Scpa, having taken account of the provisions of paragraphs 3 and 4 of article 154 bis of Legislative
Decree No. 58 of 24th February 1998, hereby certify to:
the adequacy in relation to the characteristics of the company and
the effective application of
the administrative and accounting procedures for the preparation of the half year condensed
financial statements, during the first half of 2013.
2. The model employed
The assessment of the adequacy of the administrative and accounting procedures for the
preparation of the condensed interim financial report as at and for the half year ended 30th
June 2013 was based on an internal model defined by UBI Banca ScpA, developed in accordance with the framework drawn up by the Committee of Sponsoring Organisations of
the Treadway Commission (COSO) and with the framework Control Objectives for IT and
related technology (COBIT) which represent the generally accepted international standards for
internal control systems.
3. They also certify that:
3.1 the condensed interim financial report:
a) was prepared in compliance with the applicable international accounting standards
recognised by the European Community in accordance with the Regulation No. 1606/2002 (EC) issued by the European Parliament on 19th July 2002;
b) corresponds to the records contained in the accounting books of the company;
c) provides a true and fair view of the capital, operating and cash flow position of the
issuer and the companies included in the scope of the consolidation.
3.2 The half year management report comprises a reliable analysis of the important events
that occurred in the first six months of the year and of their impact on the half year condensed financial statements, together with a description of the main risks and
uncertainties relating to the remaining six months of the year. The half year management
report also comprises a reliable analysis of information on significant related party
transactions.
Bergamo, 26th August 2013
Victor Massiah Elisabetta Stegher
Senior Officer Responsible for preparing
the company accounting documents
(signed on the original)
Chief Executive Officer
(signed on the original)
185
REPORT OF THE
INDEPENDENT AUDITORS
187
189
REPORT ON THE PERFORMANCE OF THE PARENT
UBI BANCA Scpa IN THE FIRST HALF OF 2013
191
Reclassified financial statements, reclassified income statement net of the most significant non-recurring items and reconciliation schedules
Reclassified balance sheet
ASSETS
10. Cash and cash equivalents 115,362 203,442 -88,080 -43.3% 128,307 -12,945 -10.1%
20. Financial assets held for trading 4,858,058 4,766,163 91,895 1.9% 6,047,340 -1,189,282 -19.7%
30. Financial assets designated at fair value 206,860 123,381 83,479 67.7% 122,376 84,484 69.0%
40. Available-for-sale financial assets 12,813,746 11,955,356 858,390 7.2% 10,959,403 1,854,343 16.9%
50. Held-to-maturity investments 3,122,272 3,158,013 -35,741 -1.1% 3,192,239 -69,967 -2.2%
60. Loans and advances to banks 13,717,646 15,830,498 -2,112,852 -13.3% 24,594,109 -10,876,463 -44.2%
70. Loans and advances to customers 26,527,303 22,584,747 3,942,556 17.5% 13,453,014 13,074,289 97.2%
80. Hedging derivatives 246,075 925,693 -679,618 -73.4% 802,509 -556,434 -69.3%
90. Fair value change in hedged financial assets (+/-) 5,961 196,828 -190,867 -97.0% - 5,961 n.s.
100. Equity investments 10,975,983 10,911,721 64,262 0.6% 10,904,733 71,250 0.7%
110. Property, plant and equipment 633,267 586,806 46,461 7.9% 596,841 36,426 6.1%
120. Intangible assets 410 410 - - 422 -12 -2.8%
of which: goodwill - - - - - - -
130. Tax assets 1,552,572 1,605,830 -53,258 -3.3% 1,638,262 -85,690 -5.2%
140.
Non-current assets and disposal groups held for
sale 2,329 2,329 - - 124,706 -122,377 -98.1%
150. Other assets 714,059 485,037 229,022 47.2% 246,894 467,165 189.2%
Total assets 75,491,903 73,336,254 2,155,649 2.9% 72,811,155 2,680,748 3.7%
LIABILITIES AND EQUITY
10. Due to banks 28,531,411 28,081,434 449,977 1.6% 26,448,542 2,082,869 7.9%
20. Due to customers 7,441,689 7,897,195 -455,506 -5.8% 10,573,704 -3,132,015 -29.6%
30. Debt securities issued 26,717,190 23,405,765 3,311,425 14.1% 23,848,486 2,868,704 12.0%
40. Financial liabilities held for trading 1,787,611 2,553,159 -765,548 -30.0% 2,222,922 -435,311 -19.6%
60. Hedging derivatives 881,210 1,307,735 -426,525 -32.6% 1,021,449 -140,239 -13.7%
80. Tax liabilities 172,210 230,964 -58,754 -25.4% 219,978 -47,768 -21.7%
100. Other liabilities 833,387 1,168,383 -334,996 -28.7% 586,110 247,277 42.2%
110. Post-employment benefits 38,995 43,612 -4,617 -10.6% 39,482 -487 -1.2%
120. Provisions for risks and charges: 60,520 40,286 20,234 50.2% 25,816 34,704 134.4%
a) pension and similar obligations 1,083 - - - - 1,083 n.s.
b) other provisions 59,437 40,286 19,151 47.5% 25,816 33,621 130.2%
130.+160.+
170.+180.+1
90.
Share capital, share premiums, reserves, valuation
reserves and treasury shares 8,883,660 8,384,225 499,435 6.0% 7,689,221 1,194,439 15.5%
200. Profit for the period/year 144,020 223,496 n.s. n.s. 135,445 8,575 6.3%
Total liabilities and equity 75,491,903 73,336,254 2,155,649 2.9% 72,811,155 2,680,748 3.7%
30.6.2012
CFigures in thousands of euro
31.12.2012
B
Changes
A-C
% changes
A/C
Changes
A-B
30.6.2013
A
% changes
A/B
The balance sheet figures as at the 30th June 2013 include the effects of the merger of both Centrobanca (effective from 6th May 2013
and from 1st January 2013 for accounting and tax purposes) and of B@nca 24-7 (effective from 23rd July 2012 and from 1st January 2012 for accounting and tax purposes; this operation was preceded by the contribution of salary-backed lending business from B@nca
24-7 to Prestitalia, effective from 1st July 2012). The figures as at the 31st December 2012 include the effects of the merger of B@nca 24-7, as specified above.
192
Reclassified quarterly balance sheets
ASSETS
10. Cash and cash equivalents 115,362 124,660 203,442 128,641 128,307 144,030
20. Financial assets held for trading 4,858,058 4,831,209 4,766,163 3,814,263 6,047,340 4,447,881
30. Financial assets designated at fair value 206,860 125,579 123,381 121,026 122,376 123,066
40. Available-for-sale financial assets 12,813,746 12,192,040 11,955,356 11,449,348 10,959,403 9,374,570
50. Held-to-maturity investments 3,122,272 3,185,071 3,158,013 3,220,200 3,192,239 3,254,437
60. Loans and advances to banks 13,717,646 15,283,251 15,830,498 14,345,732 24,594,109 26,996,600
70. Loans and advances to customers 26,527,303 21,539,134 22,584,747 23,689,628 13,453,014 13,425,567
80. Hedging derivatives 246,075 108,737 925,693 925,466 802,509 650,707
90. Fair value change in hedged financial assets (+/-) 5,961 - 196,828 194,342 - -
100. Equity investments 10,975,983 11,235,287 10,911,721 10,963,847 10,904,733 10,881,080
110. Property, plant and equipment 633,267 581,597 586,806 591,993 596,841 600,856
120. Intangible assets 410 410 410 416 422 428
of which: goodwill - - - - - -
130. Tax assets 1,552,572 1,630,799 1,605,830 1,668,500 1,638,262 1,614,862
140. Non-current assets and disposal groups held for sale 2,329 2,329 2,329 2,329 124,706 124,706
150. Other assets 714,059 729,573 485,037 411,403 246,894 525,208
Total assets 75,491,903 71,569,676 73,336,254 71,527,134 72,811,155 72,163,998
LIABILITIES AND EQUITY
10. Due to banks 28,531,411 28,606,811 28,081,434 27,063,633 26,448,542 28,829,633
20. Due to customers 7,441,689 7,456,576 7,897,195 8,980,797 10,573,704 6,362,114
30. Debt securities issued 26,717,190 23,238,243 23,405,765 22,569,813 23,848,486 25,299,833
40. Financial liabilities held for trading 1,787,611 1,693,378 2,553,159 2,266,849 2,222,922 1,822,294
60. Hedging derivatives 881,210 950,122 1,307,735 1,275,490 1,021,449 900,032
80. Tax liabilities 172,210 284,167 230,964 257,812 219,978 348,781
100. Other liabilities 833,387 608,383 1,168,383 690,483 586,110 506,219
110. Post-employment benefits 38,995 35,218 43,612 41,769 39,482 40,035
120. Provisions for risks and charges: 60,520 39,133 40,286 37,180 25,816 26,781
a) pension and similar obligations 1,083 - - - - -
b) other provisions 59,437 39,133 40,286 37,180 25,816 26,781
130.+160.+
170.+180.+190.
Share capital, share premiums, reserves, valuation reserves
and treasury shares 8,883,660 8,561,643 8,384,225 8,182,213 7,689,221 8,045,123
200. Profit (loss) for the period 144,020 96,002 223,496 161,095 135,445 -16,847
Total liabilities and equity 75,491,903 71,569,676 73,336,254 71,527,134 72,811,155 72,163,998
Figures in thousands of euro
30.9.2012 30.6.2012 31.3.201231.3.201330.6.2013 31.12.2012
As reported in the previous footnote to the reclassified balance sheet, the figures from 30th June 2013 show the effects of the merger of Centrobanca (effective from 6th May 2013), while those from 30th September 2012 show the impact of the merger of B@nca 24-7
(effective from 23rd July 2012).
193
Reclassified income statement
10.-20. Net interest income (expense) 38,655 (88,596) 127,251 n.s. 51,166 (35,699) 86,865 n.s. (26,771)
70. Dividends and similar income 229,522 222,358 7,164 3.2% 63,705 218,922 (155,217) (70.9%) 339,096
40.-50. Net fee and commission income 6,404 (12,731) 19,135 n.s. 9,831 (8,504) 18,335 n.s. (12,211)
80.+90.+
100.+110.
Net income (loss) from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value 61,764 102,252 (40,488) (39.6%) 65,469 14,264 51,205 359.0% 247,705
190. Other net operating income/expense 55,578 49,226 6,352 12.9% 27,487 24,629 2,858 11.6% 116,735
Operating income 391,923 272,509 119,414 43.8% 217,658 213,612 4,046 1.9% 664,554
150.a Staff costs (74,734) (57,273) 17,461 30.5% (42,684) (24,890) 17,794 71.5% (129,446)
150.b Other administrative expenses (87,471) (62,663) 24,808 39.6% (48,699) (32,832) 15,867 48.3% (165,873)
170.+180.
Depreciation, amortisation and net impairment losses on property, plant and equipment
and intangible assets (11,602) (11,949) (347) (2.9%) (6,040) (5,943) 97 1.6% (24,303)
Operating expenses (173,807) (131,885) 41,922 31.8% (97,423) (63,665) 33,758 53.0% (319,622)
Net operating income 218,116 140,624 77,492 55.1% 120,235 149,947 (29,712) (19.8%) 344,932
130.a Net impairment losses on loans (55,242) (1,213) 54,029 n.s. (30,701) (1,168) 29,533 n.s. (67,600)
130.b+c+d Net impairment losses on other financial assets and liabilities (34,067) (47,266) (13,199) (27.9%) (32,844) (44,339) (11,495) (25.9%) (42,748)
160. Net provisions for risks and charges (991) (8,969) (7,978) (89.0%) (1,609) (3,958) (2,349) (59.3%) (11,106)
210.+240. Profits (losses) from the disposal of equity investments - (6) (6) (100.0%) 23 (4) 27 n.s. 37,250
250. Pre-tax profit from continuing operations 127,816 83,170 44,646 53.7% 55,104 100,478 (45,374) (45.2%) 260,728
260. Taxes on income for the period/year from continuing operations 17,105 52,477 (35,372) (67.4%) (7,086) 51,874 (58,960) n.s. 43,537
280. Post-tax profit from discontinued operations - 13 (13) (100.0%) - - - - -
Profit for the period/year before leaving incentives and impairment losses on
Group equity investments, goodwill and intangible assets 144,921 135,660 9,261 6.8% 48,018 152,352 (104,334) (68.5%) 304,265
150.a Expenses for the leaving incentives programme net of taxes - (215) (215) (100.0%) - (60) (60) (100.0%) (20,051)
210. Impairment losses on Group equity investments net of taxes (901) - 901 n.s. - - - - (60,718)
290. Profit for the period/year 144,020 135,445 8,575 6.3% 48,018 152,292 (104,274) (68.5%) 223,496
2nd Quarter
2013
C
2nd Quarter
2012
D
Changes
C-D
% changes
C/DFigures in thousands of euro
Changes
A-B
% changes
A/B
1H 2013
A
1H 2012
B
FY 2012
E
The income statement figures for the first half of 2013 include the effects of the merger of Centrobanca (effective from 6th May 2013 and from 1st January 2013 for accounting and tax purposes) and also of
B@nca 24-7 (effective from 23rd July 2012 and from 1st January 2012 for accounting and tax purposes; this operation was preceded by the contribution of salary-backed lending business from B@nca 24-7 to Prestitalia, effective from 1st July 2012).
The figures for the full year 2012 show the effects of the merger of B@nca 24-7, as specified above.
194
Quarterly reclassified income statements
2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
10.-20. Net interest income (expense) 51,166 (12,511) (22,448) 84,273 (35,699) (52,897)
70. Dividends and similar income 63,705 165,817 111,854 4,884 218,922 3,436
40.-50. Net fee and commission income 9,831 (3,427) (4,012) 4,532 (8,504) (4,227)
80.+90.+
100.+110.
Net income (loss) from trading, hedging and
disposal/repurchase activities and from assets/liabilities
designated at fair value 65,469 (3,705) 115,245 30,208 14,264 87,988
190. Other net operating income/expense 27,487 28,091 32,020 35,489 24,629 24,597
Operating income 217,658 174,265 232,659 159,386 213,612 58,897
150.a Staff costs (42,684) (32,050) (33,680) (38,493) (24,890) (32,383)
150.b Other administrative expenses (48,699) (38,772) (50,633) (52,577) (32,832) (29,831)
170.+180.
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets (6,040) (5,562) (6,385) (5,969) (5,943) (6,006)
Operating expenses (97,423) (76,384) (90,698) (97,039) (63,665) (68,220)
Net operating income (loss) 120,235 97,881 141,961 62,347 149,947 (9,323)
130.a Net impairment losses on loans (30,701) (24,541) (13,158) (53,229) (1,168) (45)
130.b+c+d Net impairment losses on other financial assets and liabilities (32,844) (1,223) 4,901 (383) (44,339) (2,927)
160. Net provisions for risks and charges (1,609) 618 277 (2,414) (3,958) (5,011)
210.+240. Profits (losses) from the disposal of equity investments 23 (23) 15,441 21,815 (4) (2)
250. Pre-tax profit from continuing operations 55,104 72,712 149,422 28,136 100,478 (17,308)
260. Taxes on income for the period/year from continuing operations (7,086) 24,191 (8,312) (628) 51,874 603
280. Post-tax profit (loss) from discontinued operations - - - (13) - 13
Profit for the period before leaving incentives and
impairment losses on Group equity investments, goodwill
and intangible assets 48,018 96,903 141,110 27,495 152,352 (16,692)
150.a Expenses for the leaving incentives programme net of taxes - - (17,991) (1,845) (60) (155)
210. Impairment losses on Group equity investments net of taxes - (901) (60,718) - - -
290. Profit (loss) for the period 48,018 96,002 62,401 25,650 152,292 (16,847)
Figures in thousands of euro
20122013
As reported in the previous footnote to the reclassified income statement, the figures for the first half of 2013 show the effects of the merger of Centrobanca (effective from 6th May 2013), while those from the period ended 30th September 2012 show the impact of the
merger of B@nca 24-7 (effective from 23rd July 2012).
195
Figures in thousands of euro
Net interest income (expense) 38,655 (88,596) 127,251 n.s.
Dividends and similar income 229,522 222,358 7,164 3.2%
Net fee and commission income 6,404 (12,731) 19,135 n.s.
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value 49,253 102,252 (52,999) (51.8%)
Other net operating income/expense 55,578 49,226 6,352 12.9%
Operating income 379,412 272,509 106,903 39.2%
Staff costs (74,734) (57,273) 17,461 30.5%
Other administrative expenses (83,861) (59,717) 24,144 40.4%
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets(11,602) (11,949) (347) (2.9%)
Operating expenses (170,197) (128,939) 41,258 32.0%
Net operating income 209,215 143,570 65,645 45.7%
Net impairment losses on loans (55,242) (1,213) 54,029 n.s.
Net impairment losses on other financial assets and liabilities (16,539) (1,148) (15,391) n.s.
Net provisions for risks and charges (991) (8,969) (7,978) (89.0%)
Losses from the disposal of equity investments - (6) (6) (100.0%)
Pre-tax profit from continuing operations 136,443 132,234 4,209 3.2%
Taxes on income for the period from continuing operations 9,495 12,981 (3,486) (26.9%)
Post-tax profit from discontinued operations - 13 (13) (100.0%)
Profit for the period 145,938 145,228 710 0.5%
Reclassified income statement net of the most significant non-
recurring items
Changes%
changes
1H 2013
net of non-
recurring items
1H 2012
net of non-
recurring items
196
Reclassified income statement net of the most significant non-recurring items: details
Figures in thousands of euro
Net interest income (expense) 38,655 38,655 (88,596) (88,596)
Dividends and similar income 229,522 229,522 222,358 222,358
Net fee and commission income 6,404 6,404 (12,731) (12,731)
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 61,764 (11,974) (537) 49,253 102,252 102,252
Other net operating income/expense 55,578 55,578 49,226 49,226
Operating income 391,923 - - (11,974) - (537) 379,412 272,509 - - - - - - - 272,509
Staff costs (74,734) (74,734) (57,273) (57,273)
Other administrative expenses (87,471) 3,610 (83,861) (62,663) 2,946 (59,717)
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets (11,602) (11,602) (11,949) (11,949)
Operating expenses (173,807) - - - 3,610 - (170,197) (131,885) - - 2,946 - - - - (128,939)
Net operating income 218,116 - - (11,974) 3,610 (537) 209,215 140,624 - - 2,946 - - - - 143,570
Net impairment losses on loans (55,242) (55,242) (1,213) (1,213)
Net impairment losses on other financial assets and
liabilities (34,067) 17,528 (16,539) (47,266) 34,354 11,764 (1,148)
Net provisions for risks and charges (991) (991) (8,969) (8,969)
Losses from the disposal of equity investments - - (6) (6)
Pre-tax profit from continuing operations 127,816 - 17,528 (11,974) 3,610 (537) 136,443 83,170 34,354 11,764 2,946 - - - - 132,234
Taxes on income for the period from continuing operations 17,105 (4,727) (1,746) (1,174) 37 9,495 52,477 (3,096) (810) (24,992) (8,298) (2,300) 12,981
Post-tax profit from discontinued operations - - 13 13
Profit for the period before leaving incentives and
impairment losses on Group equity investments,
goodwill and intangible assets 144,921 - 12,801 (13,720) 2,436 (500) 145,938 135,660 34,354 8,668 2,136 - (24,992) (8,298) (2,300) 145,228
Expenses for leaving incentives net of taxes - - (215) 215 -
Impairment losses on Group equity investments net of taxes (901) 901 - - -
Profit for the period 144,020 901 12,801 (13,720) 2,436 (500) 145,938 135,445 34,354 8,668 2,136 215 (24,992) (8,298) (2,300) 145,228
Impairment
losses on
equity
instruments
and OICR
(collective
investment
instruments)
units (AFS)
Cerved Group
earn out
Non-recurring items
Impairment
losses on
Group equity
investments
Disposal of
Intesa
Sanpaolo and
A2A shares
(AFS)
1H 2013
1H 2013
net of non-
recurring
items
1H 2012
net of non-
recurring items
Impairment
losses on
equity
investments
(AFS) Intesa
Sanpaolo and
A2A
Service fee for
migration of
B@nca 24-7
onto the
target system
Service fee for
migration of
Centrobanca
onto target
system
Non-recurring items
Tax realignment
in accordance
with Law No.
111/2011 and
Law No.
214/2011 of BPA
goodwill
recognised in
the consolidated
financial
statements
Prior year tax
credit for
deduction for
corporate
income tax
purposes of
regional
production tax
on the cost of
labour
pursuant to
Law No.
214/2011
Tax relief on
non-accounting
deductions on
loan provisions
of UBI Banca
pursuant to
Law No.
244/2007
(Section EC)
Leaving
incentives
(purs. to Law
No. 214 of
22nd
December
2011)
1H 2012
Impairment
losses on
other shares
and OICR
(collective
investment
instruments)
units (AFS)
197
Reconciliation schedule for the period ended 30th June 2013
RECLASSIFIED INCOME STATEMENT 1H 2013 1H 2013
Figures in thousands of euro
Separate
mandatory
financial
statement
Tax recoveries
Depreciation
for leasehold
improvements
Impairment losses
on Group equity
investments
Reclassified
financial
statement
10.-20. Net interest income 38,655 38,655
70. Dividends and similar income 229,522 229,522
40.-50. Net fee and commission income 6,404 6,404
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value 61,764 61,764
190. Other net operating income/expense 59,355 (3,840) 63 55,578
Operating income 395,700 (3,840) 63 - 391,923
150.a Staff costs (74,734) (74,734)
150.b Other administrative expenses (91,311) 3,840 (87,471)
170.+180.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (11,539) (63) (11,602)
Operating expenses (177,584) 3,840 (63) - (173,807)
Net operating income 218,116 - - - 218,116
130.a Net impairment losses on loans (55,242) (55,242)
130.
b+c+d Net impairment losses on other financial assets and liabilities (34,067) (34,067)
160. Net provisions for risks and charges (991) (991)
210.+240. Losses from the disposal of equity investments (901) 901 0
250. Pre-tax profit from continuing operations 126,915 - - 901 127,816
260. Taxes on income for the period from continuing operations 17,105 17,105
280. Post-tax profit (loss) from discontinued operations - -
Profit for the period before impairment losses on equity
investments of the Group 144,020 - - 901 144,921
210. Impairment losses on Group equity investments net of taxes - (901) (901)
290. Profit for the period 144,020 - - - 144,020
Ite ms
Reclassifications
Reconciliation schedule for the period ended 30th June 2012
RECLASSIFIED INCOME STATEMENT 1H 2012 1H 2012
Figures in thousands of euro
Separate
mandatory
financial
statement
Tax recoveries
Depreciation
for leasehold
improvements
Expenses for
leaving incentives
Reclassified
financial
statement
10.-20. Net interest expense (88,596) (88,596)
70. Dividends and similar income 222,358 222,358
40.-50. Net fee and commission income (12,731) (12,731)
80.+90.+
100.+110.
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value 102,252 102,252
190. Other net operating income/expense 49,237 (11) 49,226
Operating income 272,520 (11) - - 272,509
150.a Staff costs (57,569) 296 (57,273)
150.b Other administrative expenses (62,674) 11 (62,663)
170.+180.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (11,949) (11,949)
Operating expenses (132,192) 11 - 296 (131,885)
Net operating income 140,328 - - 296 140,624
130.a Net impairment losses on loans (1,213) (1,213)
130.
b+c+d Net impairment losses on other financial assets and liabilities (47,266) (47,266)
160. Net provisions for risks and charges (8,969) (8,969)
210.+240. Losses from the disposal of equity investments (6) (6)
250. Pre-tax profit from continuing operations 82,874 - - 296 83,170
260. Taxes on income for the period from continuing operations 52,558 (81) 52,477
280. Post-tax profit from discontinued operations 13 13
Profit for the period/year before expenses for leaving incentives and
impairment losses on Group equity investments 135,445 - - 215 135,660
150.a Expenses for leaving incentives net of taxes - (215) (215)
290. Profit for the period 135,445 - - - 135,445
Ite ms
Reclassifications
198
Reconciliation schedule for the year ended 31st December 2012
RECLASSIFIED INCOME STATEMENT FY 2012 FY 2012
Figures in thousands of euro
Separate
mandatory
financial
statement
Tax recoveries
Depreciation
for leasehold
improvements
Impairment losses
on Group equity
investments
Expenses for
leaving incentives
Reclassified
financial
statement
10.-20. Net interest income (26,771) (26,771)
70. Dividends and similar income 339,096 339,096
40.-50. Net fee and commission income (12,211) (12,211)
80.+90.
+100.+110.
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value 247,705 247,705
190. Other net operating income/expense 125,404 (8,796) 127 116,735
Operating income 673,223 (8,796) 127 - - 664,554
150.a Staff costs (157,103) 27,657 (129,446)
150.b Other administrative expenses (174,669) 8,796 (165,873)
170.+180.
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets (24,176) (127) (24,303)
Operating expenses (355,948) 8,796 (127) - 27,657 (319,622)
Net operating income 317,275 - - - 27,657 344,932
130.a Net impairment losses on loans (67,600) (67,600)
130.
b+c+d Net impairment losses on other financial assets and liabilities (42,748) (42,748)
160. Net provisions for risks and charges (11,106) (11,106)
210.+240. Losses from the disposal of equity investments (23,468) 60,718 37,250
250. Pre-tax profit from continuing operations 172,353 - - 60,718 27,657 260,728
260. Taxes on income for the year from continuing operations 51,143 (7,606) 43,537
280. Post-tax profit (loss) from discontinued operations - -
Profit for the year before leaving incentives and impairment losses
on Group equity investments 223,496 - - 60,718 20,051 304,265
150.a Expenses for the leaving incentives programme net of taxes - (20,051) (20,051)
210. Impairment losses on Group equity investments net of taxes - (60,718) (60,718)
290. Profit for the year 223,496 - - - - 223,496
Ite ms
Reclassifications
199
Notes to the financial statements
The mandatory financial statements have been prepared on the basis of Bank of Italy Circular No. 262 of 22nd December 2005 and subsequent updates.
The following rules are applied to the reclassified financial statements to allow a vision that is more consistent with a management accounting style:
the tax recoveries recognised within item 190 of the mandatory income statement (other net operating income) are
reclassified as a reduction in indirect taxes included within other administrative expenses;
the item net impairment losses on property, plant and equipment and intangible assets includes items 170 and
180 in the mandatory financial statements and the instalments relating to the depreciation of costs incurred for
improvements to leased assets classified within item 190;
expenses for the leaving incentive programme net of taxes partially include item 150a in the mandatory financial
statements;
net impairment losses on Group equity investments, net of taxes include item 210 in the mandatory financial
statements.
The reconciliation of the items in the reclassified financial statements with the figures in the mandatory financial statements has been facilitated, on the one hand, with the insertion bordering with each item of the corresponding number of the item in the mandatory financial statements with which it is reconciled and, on the other hand, with the preparation of specific reconciliation schedules.
The comments on the performance of the main balance sheet and income statement items are made on the basis of the reclassified financial statements and of the reclassified financial statements for the comparative periods, and the tables providing details included in the following section of this financial report have also been prepared on that same basis.
Following the business combination transactions concluded over the last 12 months, although UBI Banca has not prepared pro forma reclassified financial statements for the comparative periods, we nevertheless report the following:
the balance sheet figures as at the 30th June 2013 include the effects of the merger of both
Centrobanca (effective from 6th May 2013 and from 1st January 2013 for accounting and tax
purposes) and of B@nca 24-7 (effective from 23rd July 2012 and from 1st January 2012 for accounting
and tax purposes; this operation was preceded by the contribution of salary-backed lending business
from B@nca 24-7 to Prestitalia, effective from 1st July 2012).
The figures prior to 30th June 2013 are not therefore consistent. The following must nevertheless be
considered in this respect:
the impact of Centrobanca on the balance sheet of UBI Banca amounted to 13.3% of the total assets as at 31st
March 2013. The business of the merged bank was focused on lending to customers (85% of total Centrobanca
assets as at 31st March 2013, including the complementary corporate bond portfolio and the liquidity invested
in securities issued by the Parent). The assets were funded through the issuance of bonds (66%), of which over
a third subscribed by the Parent, and through short-term interbank credit lines made available by UBI Banca
(approximately 21%), accounting for a total of 87% of Centrobanca liabilities as at the 31st March 2013;
the impact of B@nca 24-7 on UBI Banca’s balance sheet was 15.7% of the Parent’s total assets as at 30th June
2012. The business of this consumer bank’s business was also concentrated on lending to customers (86% of
B@nca 24-7’s total assets as at 30th June 2012), financed exclusively through funding from UBI Banca (bonds,
interbank deposits and repurchase agreements, totalling 86% of the merged bank’s liabilities as at 30th June
2012);
from an income statement viewpoint, the figures for the first half of 2013 include the effects of the
merger of Centrobanca (effective from 6th May 2013) and of B@nca 24-7 (effective from 23rd July
2012).
The statements prior to the first half of 2013 are not therefore consistent.
It must nevertheless be specified that the income statement for the second quarter of 2013 included all
the income statement figures for Centrobanca also for the first quarter of 2013 (because the accounting
and tax effects are effective from 1st January 2013), just as the third quarter of 2012 included all the
income statement figures for B@nca 24-7 relating to the first half of 2012 (because the accounting and
tax effects were effective from 1st January 2012).
200
It follows that the comparison with both the first half of 2012 and the first quarter of 2013, especially for some items (net interest income and net impairment losses on loans, as well as net fee and commission income) does not always give comparable figures.
In order to facilitate analysis of UBI Banca’s operating performance and in compliance with Consob Communication No. DEM/6064293 of 28th July 2006, two special schedules have been included, the first a brief summary (which provides a comparison of the normalised results for the period) and the second more detailed, which shows the impact on earnings of the principal non-recurring events and items – since the relative effects on capital and cash flow, being closely linked, are not significant – which are summarised as follows:
First half 2013:
impairment losses on Group equity investments;
Impairment losses on equity instruments and OICR (collective investment instruments) units
(AFS)
disposal of Intesa Sanpaolo and A2A shares;
service fee for migration of Centrobanca onto the target system;
adjustment in price for the disposal in 2008 of the interest held in Centrale Bilanci (now the
Cerved Group).
First half 2012:
impairment losses on the Intesa Sanpaolo, A2A (AFS) and other shares as well as on units in
OICRs (collective investment instruments);
service fee for migration of B@nca 24-7 Spa onto the target system;
leaving incentives (pursuant to Law No. 214 of 22nd December 2011);
tax realignment of BPA goodwill recognised in the consolidated financial statements (pursuant to
Law No. 111/2011 and Law No. 214/2011);
tax relief on non-accounting deductions relating to UBI Banca loan provisions and write-downs
(pursuant to Law No. 244/2007 – Section EC);
prior year tax credit for deductions for corporate income tax purposes (IRES) of regional
production tax (IRAP) on the cost of labour (pursuant to Law No. 214/2011).
201
Performance in the period
The income and balance sheet structure of the Parent as at and for the period ended 30th June 2013 was
impacted by the merger of both Centrobanca (on 6th May 2013) and B@nca 24-7 (on 23rd July 2012 following the contribution of salary-backed lending business from B@nca 24-7 to Prestitalia). Consequently, its prevalent nature until the first half of 2012 as a holding company has changed partially.
The figures prior to these operations have not been restated to take account of these intragroup business combinations (see also the details contained in the notes to the financial statements).
The income statement
The income statement figures commented on are based on the reclassified financial statements (the income statement, the quarterly income statements and the income statement net of the principal non-recurring items – in brief and detailed versions) contained in another section of this report and the tables furnishing details presented below are also based on those statements. The notes that follow those reclassified
financial statements may be consulted as may the reconciliation schedules for a description of the reclassification. Furthermore, the commentary examines both changes that occurred not only in the first six months of 2013 compared to the same period in 2012, but also in the second quarter of 2013 compared to the preceding first quarter (these comments are highlighted with a slightly different background colour).
The first half of 2013 ended with a profit of €144 million, compared to €135.4 million in the first six months of the previous year1.
In reality, partly as a result of the merger of Centrobanca and of B@nca 24-7 before it,
although the income statement for the period summarises higher operating expenses (+€41.9
million) and the presence of impairment losses on loans (+€54 million), it also contains
positive values for some revenue items such as net interest income and net fee and
commission income, which increased more than proportionally on aggregate (+€146.4 million).
As concerns quarterly performance, the second quarter of the year generated a profit of €48
million compared with €152.3 million in the second quarter of 2012 (driven, amongst other
things, by the receipt of dividends of €218.9 million and of tax income of €51.9 million) and
with €96 million in the first three months of 2013 (also favoured by earlier dates for
shareholder meetings and the consequent distribution of dividends of €165.8 million).
The income statement for the first half of the year showed growth in operating income – a
measure of core banking operations – to €391.9 million (+€119.4 million), determined by the
factors reported below.
Before discussing individual items of revenue, it should be recalled that the prevalent role played by UBI Banca until 30th June 2012 as a holding company, was on the one hand that of managing the cash flows of all Group banks and companies for which it operated to guarantee the necessary funding and to enable them to invest excess liquidity accumulated, and on the other hand that of acting as the single manager of the Group’s portfolio of financial assets. In consideration of its role as coordinator and policymaker, reinforced also by the organisational configuration of the Group, UBI Banca holds investments in all the main consolidated companies and the profits that they distribute have always constituted its main source
of income. This role has certainly not been weakened following the corporate ownership transactions reported above, but is accompanied by new commercial activity consisting of specialist lending performed by the former Centrobanca, and that of a credit card issuer and manager of the residual mortgages and personal and special purpose loans of the former B@nca 24-7. This is also reflected in the partial change in the structure of the income statement.
1 Non-recurring items were recorded in both periods: consisting of expense of €1.9 million in 2013 (due mainly to impairment losses
on equity investments, shares and funds and also to the service fee for the Centrobanca IT migration, although this was partially offset by the sale of Intesa Sanpaolo and A2A shares) and an expense again in 2012 of €9.8 million (caused mainly by impairment
losses on shares and OICR -collective investment instruments- units and the service fee for the B@nca 24-7 IT migration, only partially offset by tax relief on BPA goodwill and on the “EC section”). Net of these the result for the first six months of the year was
€145.9 million compared to €145.2 million in the comparative first half.
202
Dividends and similar income rose to
€229.5 million in the first half (+€7.2
million compared to the first half of 2012), consisting of €132.4 million
from the network banks (of which
€107.4 million from Banca Popolare di
Bergamo) and of €89.5 million from
the product companies (of which €45.4 million relating to Lombarda Vita and
€25.7 million to UBI Pramerica SGR).
In terms of trends, as can be seen in
the table, a general fall in the contribution from the network banks
(with the exception of the Bergamo
bank) was more than offset by the
distribution of profits by the other
companies. While the securities
portfolio generated receipts totalling €7.6 million, affected by a smaller contribution from the Intesa Sanpaolo shares (€3.9 million
compared to €9 million in 2012), after the partial sales carried out in the fourth quarter of
2012 and in the first months of 2013.
The net result for financial activities was €61.8 million, compared to €102.3 million in 2012, in
relation to both trading activities and above all to the disposal of government securities. In
detail:
- trading showed a positive balance of €1.4 million (+€33.2 million in 2012), composed as
follows: -€2.6 million from trading in credit derivatives; +€1.6 million from equity instruments and the relative derivatives; +€1.6 million from foreign exchange business;
+€17.2 million from debt securities2 (of which €14.2 million from profits on the closure of
uncovered short positions) and -€25.5 million from derivatives on debt securities and
interest rates (profits, gains and accruals). In reality the latter item incorporates losses on interest
rate derivatives of €33.6 million (recognised at the beginning of the year), mainly the result of action taken to restructure interest rate hedges (IRS) on bonds issued, on former B@nca 24-7 mortgages and also on the assets and liabilities of Group companies. That impact was balanced by the positive effect on the assets and liabilities of the network banks and the product companies with a more or less neutral result on the consolidated financial statements;
- changes in fair value – in relation to investments in Tages funds, a residual position in
hedge funds and the private equity investments of the Group’s corporate bank – generated
a profit of €1.6 million (-€2.5 million in 2012);
- hedging activity – shown as the result of the change in the fair value of derivatives and the
relative items hedged – resulted in a loss of €2.4 million, connected mainly with bonds
(+€8.1 million in 2012, of which €5.4 million related to bond issuances and €2.7 million to
AFS securities held in portfolio);
- the disposal of AFS instruments and the repurchase of financial liabilities gave rise to profits of €61.2 million composed as follows: +€47.9 million euro attributable to debt
instruments (+€49.7 million from Italian government securities and -€1.8 million from the
sale of other bonds mostly issued by banks); +14.1 from equity instruments (€11.4 million
from the profit on Intesa Sanpaolo shares, €0.6 million on A2A shares and €0.5 million
from an addition to the price for the disposal of the Cerved Group performed in 2008 – all
amounts subject to normalisation – in addition to €1.6 million from the full disposal of the interest held in Unione Fiduciaria); and finally -€0.8 million from the repurchase of own
bond issues.
Profits of €63.4 million were realised in the first half of 2012 composed as follows: €51.3 million from the sale of €1.2 billion of Italian government securities; €1.1 million from the disposal of the entire investment in Società per i Mercati di Varese; €2.3 million from a bank certificate of deposit; while €8.7 million came mainly from the repurchase of notes issued under the EMTN programme.
2 In view of UBI Banca’s current operations on financial markets, an aggregate reading of the results for debt instruments and the
relative derivatives is no longer appropriate. The commentary therefore gives a separate analysis, while the comparative figures
remain valid as they clearly reflect the position previously under examination.
Dividends and similar income
Figures in thousands of euro1H 2013 1H 2012
Banca Popolare di Bergamo Spa 107,433 51,590
Lombarda Vita Spa 45,361 -
UBI Pramerica SGR Spa 25,683 24,256
Banco di Brescia Spa 13,372 28,518
Banca Popolare Commercio e Industria Spa 11,551 35,307
Banca Carime - 39,317
Banca Regionale Europea Spa - 20,891
Banca Popolare di Ancona Spa - 1,910
Centrobanca Spa (merged on 6th May 2013) - 1,268
UBI Factor Spa 2,275 1,042
Other equity investments (item 100) 16,213 7,320
Dividends received from item 100 equity investments 221,888 211,419
Dividends received from item 40 AFS 6,914 10,938
of which Intesa SanPaolo 3,880 9,011
Dividends received from item 20 for trading and item 30
designated at fair value 720 1
Total dividends and similar income 229,522 222,358
203
Net trading income
Net income 1H
20131H 2012
Figures in thousands of euro [(A+B)-(C+D)]
1. Financial assets held for trading 6,585 47,350 (6,447) (32,982) 14,506 17,315
1.1 Debt instruments 6,225 20,751 (6,392) (3,400) 17,184 23,224
1.2 Equity instruments 326 1,240 (27) (66) 1,473 (1,633)
1.3 Units in O.I.C.R. (collective investment instruments) 34 - (28) (45) (39) (71)
1.4 Financing - - - - - -
1.5 Other - 25,359 - (29,471) (4,112) (4,205)
2. Financial liabilities held for trading 9,146 - - - 9,146 4,735
2.1 Debt instruments 9,146 - - - 9,146 4,735
2.2 Payables - - - - - -
2.3 Other - - - - - -
3. Other financial liabilities: exchange rate differences X X X X 4,071 4,920
4. Derivative instruments 293,470 364,908 (286,239) (399,984) (26,355) 6,270
4.1 Financial derivatives 293,470 364,908 (286,057) (397,612) (23,801) 8,834
- on debt instruments and interest rates 291,310 361,650 (283,989) (394,502) (25,531) 7,455
- on equity instruments and share indices 280 1,603 (208) (1,542) 133 1,306
- on currencies and gold X X X X 1,490 73
- other 1,880 1,655 (1,860) (1,568) 107 -
4.2 Credit derivatives - - (182) (2,372) (2,554) (2,564)
Total 309,201 412,258 (292,686) (432,966) 1,368 33,240
Net hedging income (loss)
Figures in thousands of euro 1H 2013 1H 2012
Net hedging income (loss) (2,350) 8,106
Profit from disposal or repurchase
Figures in thousands of euro
Financial assets
1. Loans and advances to banks - - - 2,251
2. Loans and advances to customers 12 - 12 -
3. Available-for-sale financial assets 66,549 (4,556) 61,993 52,469
3.1 Debt instruments 52,447 (4,515) 47,932 51,326
3.2 Equity instruments 14,102 (41) 14,061 1,136
3.3 Units in O.I.C.R (collective investment instruments). - - 7
3.4 Financing - - - -
4. Held-to-maturity investments - - - -
Total assets 66,561 (4,556) 62,005 54,720
Financial liabilities
1. Due to banks - - - -
2. Due to customers - - - -
3. Debt securities issued 1,884 (2,725) (841) 8,701
Total liabilities 1,884 (2,725) (841) 8,701
Total 68,445 (7,281) 61,164 63,421
Net profit (loss) on financial assets and liabilities designated at fair value
Figures in thousands of euro 1H 2013 1H 2012
Net profit (loss) on financial assets and liabilities designated at fair value 1,582 (2,515)
61,764 102,252
Net profit
1H 20131H 2012
Losses from
trading
(D)
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value
Profits Losses
Gains
(A)
Income from
trading
(B)
Losses
(C)
Other net operating income/expense rose to €55.6 million (+€6.4 million), as a result on the
one hand of a reduction in other expenses and prior year expenses (after an operating loss
recognised in the second quarter of 2012, as a result of a robbery involving a strong room with
the relative insurance claim) and on the other hand of changes in income (connected with
business with customers, resulting from the merger of the former B@nca 24-7) and in particular to “recoveries of other expenses” (+€5.3 million from sending credit card statements
and above all to recoveries on loans to customers). Income for services provided to Group
companies in the period fell again, although slightly (from €31.5 million to €31 million), in
204
relation to the way out from
the served area of Centrobanca, B@nca 24-7, Silf
and UBI Insurance Broker
(which continues, however, to
receive UBI.S services), partly
offset by the extension of
service provision to include other companies (Prestitalia
and UBI Academy).
As a result of the business
acquired from the merged banks, net interest3 consisted
of income4 of €38.7 million,
compared to expense of €88.6
million recognised in the first
half of 2012. The commentary given here reports the contribution to net interest income by area of activity, although it must be considered that the Parent’s operations continue to involve movements across different business areas (e.g. funding from customers or from the network banks used for loans to the product companies).
In detail5:
- the securities portfolio generated interest income of over €201.5 million (€190 million in 20126), with growth in investments in debt instruments over twelve months of €1.5 billion.
Purchases of Italian government securities are continuing to make a substantial
contribution to net interest income (€205.9 million of interest income from AFS securities
and €54.3 million from the held-to-maturity portfolio), although these investments were
penalised by the total costs of uncovered short positions and hedges on fixed interest rate
bonds (the differentials paid on the derivatives);
- business on the interbank market, focused mainly on intragroup activities, generated a loss
of €128.9 million (+€54.4 million in 2012), due mainly to a decrease in intragroup lending
(-€11.8 billion over twelve months, following the disappearance of lending to the two merged
banks7). On the other hand, even though amounts due to banks increased (+€2.1 billion
compared to 30th June 2012), interest expense nevertheless diminished in parallel with the trend for the cost of money. Similarly interest paid on the LTRO finance (granted on 21st
December 2011 and 29th February 2012) also fell, in parallel with the cut in the rate on
principal refinancing operations (down from 1% to 0.50%);
- while business with customers continued to generate expense of €33.7 million, compared to
-€332.7 million in 2012, its contribution improved considerably due to interest income from
retail and corporate loans (a total of €298.7 million, compared to €93.5 million in the comparative period). Although both components of interest expense (on amounts due to
customers and on debt securities issued) contracted by a total of €98.4 million, the cost of
debt securities issued (which increased by €2.9 billion over twelve months, due to the
acquisition of the former Centrobanca liabilities and also due to the progressive
concentration of network bank issuing activity at the Parent) continues to affect the overall
balance on business with customers. The item includes the income received from positive differentials mainly on hedges on own issue bonds (€64.3 million; €68.9 million in the
comparative period).
3 The average one month Euribor rate did in fact fall in the two half-year periods from 0.536% in 2012 to 0.119% in the current year. 4 Net interest consisted of expense due to the nature of the holding company’s structure which includes the financial cost of
investments in Group subsidiaries among interest expense, while the related financial income is fuelled by the item dividends. 5 The calculation of net balances was performed by allocating interest income and expense on hedging derivatives and financial
liabilities held for trading within the different areas of business (financial, with banks, with customers). Balances relating to 2012 for business with customers and banks have been partially adjusted with respect to those published
previously (+/-€6.5 million euro respectively), following a more accurate accounting treatment for an institutional counterparty.
6 It must nevertheless be considered, for an accurate analysis of the phenomenon, that at the end of the first half of 2012, interest on Centrobanca AFS debt instruments amounted to approximately €12 million, earned on corporate bonds totalling €352.6 million.
7 In the first half of 2012 the item interest on loans to banks (a little more than €245 million) consisted of €129 million (of which €83.3 million on debt instruments) from the former B@nca 24-7 and of €45.3 million (of which €26.4 million on debt instruments) from the
former Centrobanca for loans granted and liabilities subscribed by the Parent.
Other net operating income
Figures in thousands of euro1H 2013 1H 2012
Other operating income 57,017 52,666
Recovery of expenses and other income on current accounts - -
Recovery of other expenses 5,347 83
Recoveries of taxes 3,840 11
Rents and other income for property management 16,153 16,431
Income for services to Group member companies 31,040 31,534
Other income and prior year income 4,477 4,618
Reclassification of "tax recoveries" (3,840) (11)
Other operating expenses (1,439) (3,440)
Depreciation of leasehold improvements (63) -
Costs relating to finance lease contracts - -
Other expenses and prior year expense (1,439) (3,440)
Reclassification of depreciation of leasehold improvements 63 -
Total other net operating income 55,578 49,226
205
Net fee and commission income rose to €6.4 million (after expense of €12.7 million in the first
half of 2012). It was the aggregate result of the following:
Fee and commission income: composition Fee and commission expense: composition
Figures in thousands of euro1H 2013 1H 2012
Figures in thousands of euro1H 2013 1H 2012
a) guarantees granted 3,561 5,859 a) guarantees received (23,074) (19,355)
c) management, trading and advisory services: 9,916 5,299 c) management and trading services: (12,632) (1,877)
1. trading in financial instruments 4,027 3,340 1. trading in financial instruments (1,603) (1,410)
2. foreign exchange trading 466 330 2. foreign exchange trading (4) (2)
3. portfolio management - - 3. portfolio management - -
3.1 individual - - 3.1 own portfolio - -
4. custody and administration of securities 114 4 4. custody and administration of securities (568) (465)
5. depository banking - - 5. placement of financial instruments - -
6. placement of securities 1,617 16
6. financial instruments, products and services distributed
through indirect networks (10,457) -
7. receipt and transmission of orders 1 5 d) collection and payment services (2,497) (607)
8. advisory activities 3,183 1,238 e) other services (5,889) (3,702)
8.1 on investments 3,183 1,238 Total fee and commission expense (44,092) (25,541)
9. distribution of third party services 508 366
9.1. portfolio management - -
9.2. insurance products 146 -
9.3 other products 362 366
d) collection and payment services 879 786
e) servicer activities for securitisation transactions 6 15
i) current account administration 11 4
j) other services 36,123 847
Total fee and commission income 50,496 12,810 Net fee and commission income 6,404 (12,731)
• on the one hand, the contribution from commercial activity by the merged banks consisting
(in terms of the change net of the respective expense items) of other services (+€33.1
million, of which €17.7 million for credit card business and €17.8 million for lending
activities – mortgages and other loans), the placement of securities (+€1.6 million) and
advisory activities (+€1.9 million). Commission expense, moreover, included €10.5 million attributable to products placed by the network banks (principally credit cards) contained in
the item financial instruments provided through indirect networks;
Interest and similar income: composition
Figures in thousands of euro
Debt
instrumentsFinancing
Other
transactions 1H 2013 1H 2012
1. Financial assets held for trading 28,844 - - 28,844 23,186
2. Available-for-sale financial assets 205,896 - - 205,896 194,648
3. Held-to-maturity investments 54,258 - - 54,258 40,375
4. Loans and advances to banks 11,298 12,782 - 24,080 245,053
5. Loans and advances to customers 9,316 289,388 - 298,704 93,491
6. Financial assets designated at fair value - - - - -
7. Hedging derivatives X X 705 705 17,559
8. Other assets X X 14 14 14
Total interest income 309,612 302,170 719 612,501 614,326
Interest and similar expense: composition
Figures in thousands of euroBorrowings Securities Other liabilities 1H 2013 1H 2012
1. Due to central banks (40,833) - - (40,833) (50,500)
2. Due to banks (112,191) X - (112,191) (141,931)
3. Due to customers (34,529) X - (34,529) (67,465)
4. Debt securities issued X (362,117) - (362,117) (427,596)
5. Financial liabilities held for trading (23,979) - - (23,979) (15,096)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions X X (197) (197) (334)
8. Hedging derivatives X X - - -
Total interest expense (211,532) (362,117) (197) (573,846) (702,922)
Net interest income 38,655 (88,596)
206
• on the other hand, commission expense for “guarantees received” amounting to €23.1
million. This consisted of the expense for a guarantee granted by the Italian government on bonds issued in January and February of 2012 by UBI Banca amounting to €6 billion
nominal, designed to increase assets eligible for refinancing with the ECB. The expense
consists of an annual percentage of the nominal amount of the bonds issued. Because these
were issued by the Parent, subscribed by the former Centrobanca and then repurchased in full by UBI Banca, on the basis of IFRS international accounting standards, they are not recognised in the accounts, however, like the interest income and expense attributable to them, they are nevertheless included within the assets eligible for refinancing that form part of the cover pool available to the ECB.
From a quarterly viewpoint, operating income of €217.7 million in the second quarter
compares with €174.3 million in the first three months of the year. This increase (+€43.4
million) is explained not only by the impacts of the merger of the corporate bank, but also by the performance of almost all components of the item:
dividends: €63.7 million compared to €165.8 million before. Bringing forward the date of
the general meeting, which allowed most consolidated banks and companies to distribute
profits before 31st March 2013, disadvantaged the comparison between the two periods.
Nevertheless, it must be said that Lombarda Vita declared a dividend of €45.4 million in the
second quarter;
financial activities: €65.5 million compared to a loss of €3.7 million before, caused by the
recognition of transactions to close down derivatives contracts described above. This
significant result was achieved as follows: mainly by the disposal of €2.2 billion of
government securities, which generated a profit of €45.6 million; the sale of a stake held in a trust company (+€1.6 million); trading in debt securities (+€11.3 million); derivatives in
securities and interest rates (+€7.8 million, resulting mainly from differentials) and equity
instruments (+€1.8 million). On the other hand losses were incurred both from hedging (-
€1.8 million) and from assets designated at fair value (-€0.4 million), as well as from the
repurchase of debt securities in issue (-€0.7 million);
other operating revenues and expenses were almost unchanged at €27.5 million (€28.1
million in the previous quarter), without any significant changes in the composition of the
item either;
net interest income (one of the items most affected by the recent merger of Centrobanca) was
positive amounting to €51.2 million compared to expense of €12.5 million in the first
quarter. In detail the securities portfolio earned €102.4 million (€99.1 million) and business
with banks generated expense again amounting to €68.1 million (-€60.9 million), while
business with customers gave rise to an income flow of €16.9 million (-€50.6 million in the
first quarter). As already occurred for the former B@nca 24-7, the latter balance incorporates interest income and expense of the merged bank relating to the whole of the
first half because of the accounting procedures adopted. Nevertheless, the positive
contribution that this new commercial business is able to provide for the Parent is quite
evident, despite the increased expense connected, amongst other things, with the
outstanding securities issued by this former subsidiary;
net fee and commission income (also positively impacted by the acquisition of Centrobanca)
amounted to €9.8 million (-€3.4 million in the first quarter). Although both periods were
penalised by the cost of the government guarantee for the issue of bonds mentioned above
(approximately €11.5 million for each quarter), the second quarter benefited from the recognition of commissions relating to the whole of the first half received by Centrobanca,
mainly classified within the line item “other services” (+€13.1 million net of the
corresponding expense item).
Operating expenses totalled €173.8 million in the first half of the year (€131.9 million in the
same period of 2012), an increase of €41.9 million, connected primarily with the former Centrobanca and former B@nca 24-7 mergers. In detail :
• staff costs rose to €74.7 million, up by €17.5 million. In reality, staff costs fell by €3.3
million on a like-for-like basis given the total costs incurred in the first half of 2012 by both
the merged banks (over €20 million). It is the result of the combined action of different
components. On the one hand, the workforce continued to contract8 (summarised by savings of €4.1 million) and on the other hand, the decrease in services provided (the result,
8 A restatement of the two periods on a like-for-like basis shows a decrease of 127 in staff numbers in terms of averages.
207
amongst other things, of
reductions and/or suspensions of working
hours), combined with
reductions in board member
and statutory auditor fees,
more than offset the trend for
wages. It must also be considered
that compared to the first half
of 2012, and partly as a result
of the mergers and the
rationalisation which followed, the items included fewer
expense recoveries for staff
“on secondment” at other
companies (net of
reimbursements for
employees of other companies working at the Parent), which
totalled €14.6 million;
• other administrative expenses rose to €87.5 million, up by €24.8 million, of which €1 million
relating to indirect taxation. It
must be considered that current expenditure (+€23.8 million)
included expenses relating to the
commercial activities of the
former corporate bank and the
former consumer bank, which
impacted the following items most: services provided by Group
companies (primarily UBI.S),
credit recovery, insurance
premiums, outsourced services
and postal expenses. On a like-for-like basis current
expenditure actually fell (-€3.7
million), even though it included
the following: €3.6 million, non-
recurring, of service fees for the
migration of Centrobanca onto the target IT system (comprised
within the service fees paid to
UBI.S); €2.2 million for advisory
services related to projects and
other professional services (connected with the use of
advanced internal rating models
to calculate capital requirements
and also with indispensable
administrative and regulatory
obligations required by the business combination transactions); €1.8 million of advertising expenses incurred for a television and radio campaign to advertise the UBI Banca brand.
These payments were compensated by action taken to contain expenses on most of the
remaining items. It should also be considered that the figure for 2012 included a non-recurring item of €2.9 million relating to the service fee for the migration of B@nca 24-7 onto the target IT system;
• depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets was more or less unchanged at €11.6 million (-€0.3 million).
Staff costs: composition
Figures in thousands of euro1H 2013 1H 2012
1) Employees (88,526) (85,257)
a) Wages and salaries (61,554) (59,366)
b) Social security charges (16,881) (17,661)
c) Post-employment benefits (3,564) (3,413)
d) Pension expense - -
e) Provision for post-employment benefits (211) (623)
f) Pensions and similar obligations (15) -
g) Payments to external supplementary pension plans: (3,146) (3,392)
- defined contribution (3,146) (3,392)
i) Other employee benefits (3,155) (802)
2) Other staff in service (118) (191)
- Expenses for agency staff on staff leasing contracts - -
- Other expenses (118) (191)
3) Directors (3,571) (3,947)
4) Expenses for retired staff - -
5) Recoveries of expenses for staff on secondment to other
companies 32,336 45,068
6) Reimbursements of expenses for staff on secondment at
the Bank (14,855) (12,946)
Total (74,734) (57,273)
Other administrative expenses: composition
Figures in thousands of euro1H 2013 1H 2012
A. Other administrative expenses (83,771) (59,994)
Rent payable (4,849) (4,659)
Professional and advisory services (14,364) (12,113)
Rentals on hardware, software and other assets (1,978) (1,641)
Maintenance of hardware, software and other assets (356) (243)
Tenancy of premises (3,751) (3,329)
Property and equipment maintenance (1,576) (1,006)
Counting, transport and management of valuables (1) (2)
Membership fees (1,141) (781)
Information services and land registry searches (278) (377)
Books and periodicals (297) (290)
Postal (1,341) (187)
Insurance premiums (2,734) (473)
Advertising (2,696) (856)
Entertainment expenses (518) (400)
Telephone and data transmission expenses (5,369) (4,614)
Services in outsourcing (3,308) (2,074)
Travel expenses (2,012) (1,789)
Fees for services provided by Group companies (UBI.S) (30,418) (23,631)
Credit recovery expenses (4,836) (26)
Forms, stationery and consumables (532) (347)
Transport and removals (242) (150)
Security (663) (574)
Other expenses (511) (432)
B. Indirect taxes (3,700) (2,669)
Indirect taxes and duties (422) (399)
Stamp duty (3,185) (39)
IMU / ICI (municipal property taxes) (2,869) (2,019)
Other taxes (1,064) (223)
Reclassification of "tax recoveries" 3,840 11
Total (87,471) (62,663)
208
In quarterly terms, operating expenses of (€97.4 million) compared with €76.4 million in the
first quarter of 2013, an increase of €21 million mainly attributable to the recognition in the second quarter of Centrobanca expenses relating to the entire first half. In detail: staff costs increased to €42.7 million (+€10.6 million); other administrative expenses rose to €48.7 million
(+€9.9 million, partly as a result of the differences in the timing of invoices between the two periods compared); on the other hand depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets totalled €6 million, almost unchanged
compared to the first three months of the year (+€0.5 million).
As a result of the performance reported above, net operating income increased to €218.1 million in the first half, an improvement of 55% compared to the same period in 2012.
On a quarterly basis, net operating income stood at €120.2 million, compared to €149.9
million in the second quarter of 2012 and €97.9 million euro in the period January-March
2013.
The following was also recognised in the first half of the year:
• 55.2 million (compared to €1.2 million in 2012) of net impairment losses on loans incurred
almost entirely on the portfolios of the merged banks as follows: €69.1 million of specific
net impairment losses (which benefited from reversals – other than for present value
discounts – of €24 million) and €13.9 million of net reversals on the performing portfolio
(attributable primarily to the former corporate bank);
Net impairment losses on loans: composition
Figures in thousands of euro
A. Loans and advances to banks - 217 217 - 217 217
B. Loans and advances to customers (69,096) 13,637 (55,459) (45,893) 14,975 (30,918)
C. Total (69,096) 13,854 (55,242) (45,893) 15,192 (30,701)
Figures in thousands of euro
A. Loans and advances to banks - - - - - -
B. Loans and advances to customers (139) (1,074) (1,213) (94) (1,074) (1,168)
C. Total (139) (1,074) (1,213) (94) (1,074) (1,168)
Portfolio
Impairment losses/
reversals of impairment losses, net
Portfolio
1H 2013
Specific
Impairment losses/
reversals of impairment losses, net1H 2012
Impairment losses/
reversals of impairment losses, net 2nd Quarter
2012Specific Portfolio Specific Portfolio
Impairment losses/
reversals of impairment losses, net 2nd Quarter
2013Specific
• €34.1 million (compared to €47.3 million9 before) of net impairment losses on other financial assets/liabilities, which included €17.5 million of non-recurring impairment losses on
instruments held in the AFS portfolio composed as follows: €9.4 million relating to financial
instruments previously held in the Centrobanca portfolio, €3.9 million to the Centrobanca
Sviluppo Impresa Fund and €4 million to OICR units (collective investment instruments) and the remainder to equity instruments. The item also included an impairment loss of
€16.5 million recognised on an unsecured guarantee granted (item 130d “impairment
losses on other financial transactions”), of which €17.3 million due to the enforcement of a
guarantee that had been issued by the Parent to the subsidiary UBI Banca International on
the Pescanova position;
• approximately €1 million of net provisions for risks and charges
including €1.5 million of
expenses connected with the
liquidation of an investee. The figure of €9 million shown in the table relating to the first half of 2012
9 That figure included non-recurring impairment losses on instruments held in the AFS portfolio as follows: €30.8 million relating to
the Intesa Sanpaolo share (on the basis of the reference price on 29th June 2012 of €1.118 ), €3.5 million to the A2A share and €11.8 million to other equity instruments and OICR (collective investment instruments) units (including €6.2 million on the Centrobanca
Sviluppo Impresa fund and €4.4 million on the Polis closed-end property fund).
Net provisions for risks and charges
Figures in thousands of euro
1H 2013 1H 2012
Net provisions for risks and charges for revocations - -
Provisions for personnel - -
Net provision for bonds in default - -
Net provisions for litigation (284) (169)
Other provisions for risks and charges (707) (8,800)
Total (991) (8,969)
209
includes €8 million recognised as part of the process to reorganise indirect distribution networks.
The following were recognised in the income statement in the second quarter compared to the first three months of the year: net impairment losses on loans of €30.7 million (€24.5 million),
which mainly reflected the Centrobanca merger; net impairment losses on other financial assets/liabilities of €32.8 million (€1.2 million), the aggregate result of the half-year figures
relating to write-downs of financial instruments and the enforcement of a guarantee on the Pescanova position; net provisions for risks and charges of €1.6 million (reversals of €0.6
million) connected mainly with the liquidation of an investee already mentioned.
Pre-tax profit from continuing operations therefore rose to €127.8 million, compared to
€83.2 million in 2012. On a quarterly basis, pre-tax profit was €55.1 million, compared to €100.5 million in the
second quarter of 2012 and €72.7 million in the first three months of 2013
In line with the changes in taxable income, the first half of 2013 recorded tax income for the item taxes on income for the period from continuing operations amounting to €17.1 million
(€52.5 million in 2012), basically a reflection of the different impact of non-recurring items. The first half of 2012 had in fact benefited from the following non-recurring tax items:
▪ €25 million from the realignment of taxation on goodwill, recognised in the consolidated financial statements in relation to the purchase of a controlling interest in BPA, in accordance with Art. 23, paragraphs 12-15 of Decree Law No. 98 of 6th July 2011 (Law No. 111/2011) as amended by Art. 20 of Decree Law No. 201 of 6th December
2011 (Law No. 214/2011). In return for the cost of recognising the substitute tax at a rate of 16% (€34.8 million), it is possible to deduct the amortisation of the amount subject to tax relief (€217.3 million) at constant rates over 10 years with effect from 2018 (instead of from 2013, as a result of the postponement introduced by Law No. 228/2012). Consequently, in the first half of 2012 deferred tax assets of €59.8 million had been recognised within
item 260 of the income statement, corresponding to the future benefit arising from the deduction of amortisation on the goodwill subject to tax relief;
▪ €8.3 million resulting from tax relief in relation to non-accounting deductions existing as at 31st December 2011,
relating to the loan impairment provision of UBI Banca (section EC of the income tax return). The income statement had therefore included the total substitute tax due of €11.5 million (16% of the amount of €72.1 million subject to tax relief declared in section EC of the 2012 income tax return) and also the proceeds from the write-off of deferred liabilities recognised against the non-accounting deductions from the loan impairment provision as at
31st December 2011 (€19.8 million). Any losses on loans are now deductible according to ordinary tax rules from 2012;
▪ €2.3 million relating to prior year tax credits, in view of the full deduction for corporate income tax purposes of IRAP (local production tax) on the cost of labour from 2012, as provided for by Art. 2, paragraph 1 quater of Decree
Law No. 201/2011, converted with amendments into Law No 214/2011 and subsequently supplemented by Art 4, paragraph 12 of Decree Law No. 16/2012, converted with amendments into Law No 44/2012. While the provisions to implement the legislation had not yet been issued by the tax authorities (it was issued on 17th December 2012),
the amount of the refund for UBI Banca for the years 2007-2011 that will be applied for was estimated in the first half.
Net of non-recurring items, taxes for the first half consisted of income of €9.5 million,
compared to the previous €13 million, due to the different composition of the pre-tax result.
Net impairment losses on Group equity investments (€0.9 million, non-recurring) are stated
separately after tax under a separate item and relate entirely to the interest held in BY YOU
(mortgage distribution), for which the carrying amount was written-off in view of the
liquidation of the company in progress.
In 2012 expenses for leaving incentives of €215 thousand, non-recurring, were shown in a similar
separate item, again net of taxes, charged in relation to a “General leaving incentive proposal” launched by the Group in March 2012 destined to staff who are covered by the safeguards provided by the Salva Italia (Save Italy) decree.
210
The balance sheet
The comments that follow are based on items in the balance sheet contained in the reclassified financial statements on which the relative tables furnishing details are also based.
As a result of the merger of Centrobanca – which brought all the non-captive bond funding of that subsidiary (€3.8 billion) to the Parent – UBI Banca’s direct funding from customers had
reached €34.2 billion as at 30th June 2013, bringing it back to almost the same amount as a
year before (€34.4 billion).
As shown in the table, net of that extraordinary item, not present in the comparative periods, the change in the total would have been a decrease – although small in the first quarter of
2013 – with, however, very different trends within the item for different types and forms of
funding.
More specifically, amounts due to customers of €7.4 billion, contracted significantly year-on-
year (-€3.1 billion), a reflection of business in repurchase agreements with the Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing house), used to finance the
Italian government securities portfolio. The decrease in these transactions (-€1.8 billion) was
concentrated in the second quarter of 2012 together with the decline of current accounts
(-€1.4 billion), which occurred since the first month of 2013.
If the first half of the year only is considered, amounts due to customers decreased less (-€0.5
billion since December and unchanged since March), because of the increase in business with
the CCG (+€1.4 billion over six months and +€0.5 billion over three months), in relation, amongst other things, to new investments in government securities made at the beginning of
the year, which partially compensated the downward trend for current accounts (-€2.1 billion
since December; -€0.6 billion since March). The latter incorporated the effects of the action
taken to optimise the cost of funding taken in 2013 as follows:
- a reduction in the second quarter in the deposits of some accounts used to support the management of UBI Pramerica’s mutual investment funds (total liquidity deposited by this
asset management company fell by €0.9 billion during the first half);
- the absence in the first quarter of some deposits by corporate customers (-€1 billion);
- the disappearance, again in the first quarter, of institutional deposits by the CCG (-€0.2
billion).
Debt securities issued consisted primarily of bonds and reached €26.7 billion to record growth
both year-on-year (+€2.9 billion) and over the first half (+€3.3 billion) as a result of positive performance by bonds subscribed by ordinary customers, which fully offset lower intragroup
liabilities and maturities at the beginning of the year for institutional funding that was not
renewed.
Bonds subscribed by ordinary customers of the network banks, partly listed on the MOT
(electronic bond market), reached almost €14 billion (+€6.8 billion year-on-year; +€6.1 billion since December; +€5.2 billion since March). They benefited on the one hand from the
acquisition of the former Centrobanca’s bond portfolio (€3.8 billion) and on the other, from the
favourable reception of new issuances (49 bonds for €2.4 billion nominal in the first half of the
year), partly in relation to a new funding strategy by which new issuances for customers had
been centred mainly at the Parent since January 2013 and placement activities are carried out by the network banks.
Intragroup funding (€0.7 billion), consisting of debt subscribed by some of the banks in the
Group in order to invest their liquidity, fell by €2.7 billion over twelve months, the combined
result of maturities of €1.4 billion nominal and eliminations, relating to bonds which had been
subscribed by the former Centrobanca, for a total of €1.6 billion nominal, against new issuances of just €0.3 billion nominal.
211
Direct funding from customers
Figures in thousands of euro amount % amount %
Current accounts and deposits 794,246 2.4% 2,890,798 9.2% -2,096,552 -72.5% 2,208,376 6.4% -1,414,130 -64.0%
Term deposits - - - - - - - - - -
Financing 6,504,010 19.0% 4,983,912 15.9% 1,520,098 30.5% 8,275,982 24.1% -1,771,972 -21.4%
- repurchase agreements 5,475,176 16.0% 3,944,510 12.6% 1,530,666 38.8% 7,196,478 20.9% -1,721,302 -23.9%
of which: repos with the CCG 5,367,793 15.7% 3,944,510 12.6% 1,423,283 36.1% 7,196,478 20.9% -1,828,685 -25.4%
- other 1,028,834 3.0% 1,039,402 3.3% -10,568 -1.0% 1,079,504 3.2% -50,670 -4.7%
Other payables 143,433 0.4% 22,485 0.1% 120,948 537.9% 89,346 0.2% 54,087 60.5%
Total amounts due to customers 7,441,689 21.8% 7,897,195 25.2% -455,506 -5.8% 10,573,704 30.7% -3,132,015 -29.6%
Bonds 26,659,591 78.0% 23,405,765 74.8% 3,253,826 13.9% 23,848,486 69.3% 2,811,105 11.8%
- bonds subscribed by institutional customers 12,128,689 35.5% 13,437,248 42.9% -1,308,559 -9.7% 13,361,581 38.8% -1,232,892 -9.2%
of which: EMTN (*) 5,837,196 17.1% 7,091,040 22.6% -1,253,844 -17.7% 7,110,365 20.6% -1,273,169 -17.9%
Covered bonds 6,291,493 18.4% 6,346,208 20.3% -54,715 -0.9% 6,251,216 18.2% 40,277 0.6%
- bonds subscribed by ordinary customers 13,865,777 40.6% 7,812,713 25.0% 6,053,064 77.5% 7,073,800 20.6% 6,791,977 96.0%
of which: non-captive customers
(former Centrobanca) 3,805,851 11.1% - - 3,805,851 - - - 3,805,851 -
- bonds subscribed by Group banks (intragroup)665,125 1.9% 2,155,804 6.9% -1,490,679 -69.1% 3,413,105 9.9% -2,747,980 -80.5%
Other certificates 57,599 0.2% - - 57,599 - - - 57,599 -
Total debt securities issued 26,717,190 78.2% 23,405,765 74.8% 3,311,425 14.1% 23,848,486 69.3% 2,868,704 12.0%
Total funding from customers 34,158,879 100.0% 31,302,960 100.0% 2,855,919 9.1% 34,422,190 100.0% -263,311 -0.8%
of which:
subordinated liab ilities 5,354,509 15.7% 5,538,467 17.7% -183,958 -3.3% 4,462,732 13.0% 891,777 20.0%
of which: subordinated deposits (**) 572,424 1.7% 572,464 1.8% -40 0.0% 572,599 1.7% -175 0.0%
subordinated securities 4,782,085 14.0% 4,966,003 15.9% -183,918 -3.7% 3,890,133 11.3% 891,952 22.9%
of which: EMTN (*) 181,590 0.5% 181,566 0.6% 24 0.0% 190,699 0.6% -9,109 -4.8%
Changes A/C 30.6.2013
A%
Changes A/B 30.6.2012
C%
31.12.2012
B%
(*) The corresponding nominal amounts were
€5,771 million (€182 million subordinated) as at 30th June 2013, €5,771 million (€182
million subordinated) as at 31st March 2013,
€6,995 million (€182 million subordinated) as at 31st December 2012 and €7,024 million
(€191 million subordinated) as at 30th June
2012. The figures shown in the table do not include private placements of an intragroup
nature, which were therefore eliminated in the
consolidation (€8 million as at 30th June and as at 31st March 2013; €88 million as at 31st
December and as at 30th June 2012).
(**) The figure refers to deposits made by BPB
Funding Llc for a nominal amount of €300
million, by BPCI Funding Llc for a nominal amount of €115.001 million and by Banca
Lombarda Preferred Capital Co. Llc for a
nominal amount of €155 million. That amount, previously classified within term
deposits, was reclassified within the item
“Financing – Other” as precribed by supervisory regulations.
Direct funding from customers
Figures in thousands of euro amount %
Current accounts and deposits 794,246 2.4% 1,376,500 4.5% -582,254 -42.3%
Term deposits - - - - - -
Financing 6,504,010 19.0% 6,019,017 19.6% 484,993 8.1%
- repurchase agreements 5,475,176 16.0% 4,916,887 16.0% 558,289 11.4%
of which: repos with the CCG 5,367,793 15.7% 4,916,887 16.0% 450,906 9.2%
- other 1,028,834 3.0% 1,102,130 3.6% -73,296 -6.7%
Other payables 143,433 0.4% 61,059 0.2% 82,374 134.9%
Total amounts due to customers 7,441,689 21.8% 7,456,576 24.3% -14,887 -0.2%
Bonds 26,659,591 78.0% 23,238,243 75.7% 3,421,348 14.7%
- bonds subscribed by institutional customers 12,128,689 35.5% 12,150,386 39.6% -21,697 -0.2%
of which: EMTN (*) 5,837,196 17.1% 5,859,468 19.1% -22,272 -0.4%
Covered bonds 6,291,493 18.4% 6,290,918 20.5% 575 0.0%
- bonds subscribed by ordinary customers 13,865,777 40.6% 8,713,395 28.4% 5,152,382 59.1%
of which: non-captive customers (former Centrobanca) 3,805,851 11.1% - - 3,805,851 -
- bonds subscribed by Group banks (intragroup)665,125 1.9% 2,374,462 7.7% -1,709,337 -72.0%
Other certificates 57,599 0.2% - - 57,599 -
Total debt securities issued 26,717,190 78.2% 23,238,243 75.7% 3,478,947 15.0%
Total funding from customers 34,158,879 100.0% 30,694,819 100.0% 3,464,060 11.3%
of which:
subordinated liab ilities 5,354,509 15.7% 5,422,403 17.7% -67,894 -1.3%
of which: subordinated deposits (**) 572,424 1.7% 572,370 1.9% 54 0.0%
subordinated securities 4,782,085 14.0% 4,850,033 15.8% -67,948 -1.4%
of which: EMTN (*) 181,590 0.5% 181,579 0.6% 11 0.0%
30.6.2013
A%
31.3.2013
D%
Changes A/D
212
At the end of June 2013, the institutional funding of UBI Banca totalled €12.1 billion
compared to €13.4 billion twelve months before and at the end of 2012. These changes are to be interpreted in relation to the EMTN programme. In fact only 4 new
placements of “notes” were made over twelve months for €1.475 billion nominal (€750 million
in October, €200 million in November and €325 million in December 2012; €200 million in
January 2013), against maturities, redemptions and repurchases for a total of €2.728 billion
nominal (€1.424 billion in 2013, all concentrated in the first quarter).
As concerns covered bonds on the other hand, amounting to €6.3 billion, no new issuances were made. The marginal changes shown in the table are attributable solely to amortisation
and/or accounting adjustments. UBI Banca has 8 covered bonds in issue under the
“multioriginator” programme backed by residential mortgages (with a €10 billion ceiling) for a
nominal amount of €5.691 billion, after €59 million of amortisation10.
Composition of loans to customers
Figures in thousands of euro amount % amount %
Current account overdrafts 1,101,084 4.2% 3,243 746,791 3.3% 440 354,293 47.4% 788,543 5.8% 65 312,541 39.6%
Reverse repurchase agreements 1,201,154 4.5% - 2,084,224 9.2% - -883,070 -42.4% 2,121,249 15.8% - -920,095 -43.4%
Mortgage loans and other medium to long-
term financing 11,660,652 44.0% 1,194,115 6,347,628 28.1% 403,598 5,313,024 83.7% 612,260 4.5% - 11,048,392 n.s.
Credit cards, personal loans and salary-
backed loans 1,387,347 5.2% 112,104 1,656,983 7.4% 87,872 -269,636 -16.3% - - - 1,387,347 -
Factoring 4,563 0.0% - - - - 4,563 - - - - 4,563 -
Other transactions 10,848,012 40.9% 60,455 11,427,683 50.6% 25,008 -579,671 -5.1% 9,614,067 71.5% 51 1,233,945 12.8%
Debt instruments 324,491 1.2% 1,045 321,438 1.4% - 3,053 0.9% 316,895 2.4% - 7,596 2.4%
of which: structured securities 323,228 1.2% - 321,438 1.4% - 1,790 0.6% 316,895 2.4% - 6,333 2.0%
other debt instruments 1,263 0.0% 1,045 - - - 1,263 - - - - 1,263 -
Total loans and advances to customers 26,527,303 100.0% 1,370,962 22,584,747 100.0% 516,918 3,942,556 17.5% 13,453,014 100.0% 116 13,074,289 97.2%
of which
deteriorated%
30.6.2012
C
Changes A/CChanges A/Bof which
deteriorated
31.12.2012
B%
30.6.2013
A%
of which
deteriorated
The figures as at 31st December
and as at 30th June 2012 were
affected by a reclassification of subordinated loans out of the
item “mortgage loans and other
medium to long-term financing” into the item “other transactions”
in compliance with supervisory
regulations (€98,073 thousand in December and €98,114 thousand
in June 2012).
Loans by the Parent as at the 30th June 2013 amounted to €26.5 billion, almost double compared to €13.5 billion recognised twelve months before and substantially up also on
December 2012 (+17.5%) and on March 2013 (+23.2%).
The year-on-year change must be interpreted in relation to the impacts of the following
operations to simplify Group structure:
the rationalisation which affected consumer credit business in July 2012, determined firstly
by the contribution to the subsidiary Prestitalia of salary and pension backed loans
previously managed by B@nca 24-7 and the subsequent merger of B@nca 24-7 into the
Parent. UBI Banca’s portfolio therefore expanded, on the one hand to include the remaining
10 Self-retained covered bonds in issue also exist amounting to €3.050 billion nominal, three of which for a total nominal amount of
€0.75 billion issued in February 2012 as part of a residential mortgage backed programme and another two for a total of €2.3 billion nominal, performed again in 2012 as part of the second commercial mortgage backed programme. Because these were
repurchased by the Parent, these liabilities have not been recognised, in accordance with IFRS.
Composition of loans to customers
Figures in thousands of euro amount %
Current account overdrafts 1,101,084 4.2% 3,243 782,845 3.6% 3,207 318,239 40.7%
Reverse repurchase agreements 1,201,154 4.5% - 1,495,548 7.0% - -294,394 -19.7%
Mortgage loans and other medium to long-
term financing 11,660,652 44.0% 1,194,115 6,451,020 30.0% 467,626 5,209,632 80.8%
Credit cards, personal loans and salary-
backed loans 1,387,347 5.2% 112,104 1,494,532 6.9% 105,672 -107,185 -7.2%
Factoring 4,563 0.0% - - - - 4,563 -
Other transactions 10,848,012 40.9% 60,455 10,993,398 51.0% 26,415 -145,386 -1.3%
Debt instruments 324,491 1.2% 1,045 321,791 1.5% - 2,700 0.8%
of which: structured securities 323,228 1.2% - 321,791 1.5% - 1,437 0.4%
other debt instruments 1,263 0.0% 1,045 - - - 1,263 -
Total loans and advances to customers 26,527,303 100.0% 1,370,962 21,539,134 100.0% 602,920 4,988,169 23.2%
Changes A/D30.6.2013
A%
of which
deteriorated
31.3.2013
D%
of which
deteriorated
213
outstanding loans managed by the merged bank and, on the other hand, because it started
to lend directly to Prestitalia;
the merger of Centrobanca, which specialises in corporate and investment banking
services, into UBI Banca with effect from the 6th May 2013, which resulted as a
consequence in the acquisition by the Parent of the outstanding loans of the merged bank.
At the end of June, the impact of the merger of B@nca 24-7 on UBI Banca assets amounted to
approximately €6.4 billion, (-€0.3 billion compared to December), of which:
€4.85 billion attributable to the item “mortgage loans and other medium to long-term
financing”. This item, which is decreasing progressively and organically given the residual
nature of the assets managed, increased slightly during the first half (+€32 million) due to
the change in fair value of assets subject to generic hedges, which in December had been
classified within a separate item (asset item 90), as a consequence of action taken to close down derivatives entered into in the first quarter. Outstanding “mortgages” on the other
hand had decreased compared to March (-€76 million);
€1.4 billion relating to various forms of consumer credit (-€0.3 billion in the first half; -€0.1
billion compared to March);
€0.15 billion recognised within “other transactions” (-€63 million in the first half; -€29
million compared to March).
Again at the end of the first half, the Centrobanca merger had an impact of €5.9 billion on the
Parent’s assets, of which:
€5.33 billion attributable to the item “mortgage loans and other medium to long-term
financing”;
€0.56 billion relating to “other transactions”;
€4.6 million for factoring transactions.
As a result, amongst other things, of the above, at the end of the first half the percentage of
UBI Banca’s lending to Group companies operating in the leasing and factoring sectors was in
organic decline compared to twelve months before, being in receipt of loans of €7.4 billion and €2.1 billion respectively, equivalent to 35.7% of total lending. Loans granted to UBI Leasing
and UBI Factor amounted to €8.5 billion and €2 billion respectively in June 2012, accounting
for 78.1% of total loans to customers (in December 2012: €8.1 billion and €2.2 billion,
accounting for 45.7% of the total; in March 2013: €7.7 billion and €2 billion, accounting for
44.8%). In July 2012 Prestitalia also started to receive loans directly, which at the end of June stood at
approximately €3 billion (€2.9 billion in December 2012 and €2.8 billion in March 2013), of
which approximately €1.2 billion recognised within “mortgage loans and other medium to
long-term financing” and €1.8 billion within “other short-term transactions”11.
The overall year-on-year change in UBI Banca lending was marginally affected also by technical factors, subject by their nature to a degree of variability over the course of the year:
ordinary business with the CCG totalled €0.5 billion at the end of June (-€0.5 billion over
twelve months), consisting almost entirely of margin deposits required to guarantee
repurchase agreements on Italian government securities (down by €0.1 billion to €0.5
billion), while reverse repurchase agreements were practically absent12 (-€0.4 billion to €34
million);
margin deposits on derivatives trading (only partially attributable to swaps to hedge the
covered bond programme and internal securitisations) amounted to €0.8 billion in June
(+€0.2 billion), consisting entirely of current accounts.
Loans increased by €3.9 billion in the first half of 2013. The contribution of the Centrobanca loans (+€5.9 billion) and the changes mentioned above in margin deposits (+€0.3 billion) were
partially offset by the following: reduced financing – principally short term – to other Group
member companies (-€1.7 billion); the natural decrease in the former B@nca 24-7 loans (-€0.3
11 With the exception of €200 million of “mortgages” granted by the former Centrobanca. These are loans previously granted to the
former B@nca 24-7 and as such classified within loans and advances to banks.
12 These were transactions with Italian government securities as the underlying, entered into as a temporary investment of liquidity.
214
billion); a reduction in business with the CCG (-€0.1 billion); the absence in the first quarter of
reverse repurchase agreements with a counterparty belonging to a banking group (-€0.2 billion), which had been entered into in the third quarter of 2012, to be interpreted in relation
to financial liabilities held for trading.
Loans and advances to customers as at 30th June 2013
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (7.40%) 2,016,918 645,956 (5.17%) 1,370,962 32.03%
- Non-performing loans (3.10%) 845,381 486,211 (1.35%) 359,170 57.51%
- Impaired loans (2.75%) 751,049 111,674 (2.41%) 639,375 14.87%
- Restructured loans (0.72%) 197,589 41,154 (0.59%) 156,435 20.83%
- Past due loans (0.83%) 222,899 6,917 (0.82%) 215,982 3.10%
Performing loans (92.60%) 25,246,539 90,198 (94.83%) 25,156,341 0.36%
Total loans and advances to customers 27,263,457 736,154 26,527,303 2.70%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st March 2013
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (4.66%) 1,025,390 422,470 (2.80%) 602,920 41.20%
- Non-performing loans (2.68%) 590,443 369,833 (1.02%) 220,610 62.64%
- Impaired loans (1.60%) 351,363 48,878 (1.40%) 302,485 13.91%
- Restructured loans - - - - - -
- Past due loans (0.38%) 83,584 3,759 (0.38%) 79,825 4.50%
Performing loans (95.34%) 21,000,949 64,735 (97.20%) 20,936,214 0.31%
Total loans and advances to customers 22,026,339 487,205 21,539,134 2.21%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st December 2012
Figures in thousands of euroImpairment
lossesCoverage (*)
Deteriorated loans (3.97%) 913,994 397,076 (2.29%) 516,918 43.44%
- Non-performing loans (2.55%) 586,953 359,511 (1.01%) 227,442 61.25%
- Impaired loans (0.95%) 218,967 32,395 (0.83%) 186,572 14.79%
- Restructured loans - - - - - -
- Past due loans (0.47%) 108,074 5,170 (0.45%) 102,904 4.78%
Performing loans (96.03%) 22,133,332 65,503 (97.71%) 22,067,829 0.30%
Total loans and advances to customers 23,047,326 462,579 22,584,747 2.01%
The item as a percentage of the total is given in brackets.
(*) Coverage is calculated as the ratio of impairment losses to gross exposure. Impairment losses and gross exposures are given net of w rite-offs of positions subject to
bankruptcy proceedings.
Gross exposure Carrying amount
Gross exposure Carrying amount
Gross exposure Carrying amount
Partly as a consequence of the Centrobanca merger, gross deteriorated assets exceeded €2
billion at the end of June – almost double compared to both December (+€1.1 billion) and
March (+€1 billion). Net of impairment losses, deteriorated loans reached almost €1.4 billion, relating almost entirely to “mortgage loans and other medium to long-term financing” (87%)
and to consumer credit business (8%). Consequently, they rose over six months as a
percentage of total loans from 3.97% to 7.40% in gross terms (4.66% in March) and from
2.29% to 5.17% in net terms (2.80% in March).
The acquisition of the Centrobanca portfolio – which also determined the appearance of the
restructured loan category, previously not present – was accompanied not only by a reduction in total coverage, down to 32.03%, but also by an improvement in coverage for performing
loans, which reached 0.36%.
Financial assets held by UBI Banca as at 30th June 2013 had reached €21 billion (€19.2 billion if calculated net of financial liabilities), an increase compared to the end of 2012 of
approximately €1 billion (of which €0.7 billion in the second quarter of the year), the result
both of an increase in the fair value of securities held in portfolio and of investments in Italian
215
government securities made with a view to strengthening the contribution made to net interest
income.
As shown in the table, the performance of the item is mainly attributable to Italian government
securities (+€1.6 billion, concentrated in the first quarter), and more specifically to new
purchases classified within fair value level 1 of the trading portfolio (+€0.8 billion) and of the
AFS portfolio (+€0.8 billion).
Total financial assets also recorded an overall decrease in financial derivatives held for trading
(-€0.7 billion), in relation to the action taken at the beginning of 2013 to rationalise interest-
rate hedges implemented by UBI Banca on behalf of the network banks13.
Financial assets/liabilities
Figures in thousands of euro
L 1 L 2 L 3Carrying
amount (a)% L 1 L 2 L 3
Carrying
amount (b)% amount %
Carrying
amount%
Financial assets held for trading 4,114,977 739,883 3,198 4,858,058 23.1% 3,327,983 1,424,233 13,947 4,766,163 23.8% 91,895 1.9% 6,047,340 29.8%
of which: financial derivatives contracts 1,865 738,755 - 740,620 3.5% 1,744 1,424,233 - 1,425,977 7.1% -685,357 -48.1% 1,585,702 7.8%
Financial assets designated at fair value 113,684 3,181 89,995 206,860 1.0% 109,664 - 13,717 123,381 0.6% 83,479 67.7% 122,376 0.6%
Available-for-sale financial assets 11,654,229 1,031,071 128,446 12,813,746 61.0% 10,810,410 1,036,320 108,626 11,955,356 59.8% 858,390 7.2% 10,959,403 53.9%
Held-to-maturity investments - - - 3,122,272 14.9% - - - 3,158,013 15.8% -35,741 -1.1% 3,192,239 15.7%
Financial assets (a) 15,882,890 1,774,135 221,639 21,000,936 100.0% 14,248,057 2,460,553 136,290 20,002,913 100.0% 998,023 5.0% 20,321,358 100.0%
of which:
- debt instruments 15,624,298 981,004 1,550 19,729,124 93.9% 13,946,101 984,442 6,774 18,095,330 90.5% 1,633,794 9.0% 18,194,666 89.5%
of which: Italian government securities 15,074,169 395,216 - 18,591,657 88.5% 13,479,833 399,247 - 17,037,093 85.2% 1,554,564 9.1% 17,048,854 83.9%
- equity instruments 101,903 3,646 205,111 310,660 1.5% 152,654 - 112,444 265,098 1.3% 45,562 17.2% 320,131 1.6%
- Units in O.I.C.R.
(collective investment instruments). 154,824 50,730 12,872 218,426 1.0% 147,558 51,878 14,787 214,223 1.1% 4,203 2.0% 218,387 1.1%
Financial liabilities held for trading (b) 1,104,072 683,539 - 1,787,611 100.0% 1,163,939 1,389,220 - 2,553,159 100.0% -765,548 -30.0% 2,222,922 100.0%
of which: financial derivatives contracts 99 683,539 - 683,638 38.2% 69 1,389,220 - 1,389,289 54.4% -705,651 -50.8% 1,549,268 69.7%
Net financial assets (a-b) 14,778,818 1,090,596 221,639 19,213,325 13,084,118 1,071,333 136,290 17,449,754 1,763,571 10.1% 18,098,436
30.6.2013 31.12.2012 Changes (a) / (b)
The fair value has not been shown for held-to-maturity investments, because they are recognised at amortised cost.
Financial assets/liabilities
Figures in thousands of euro
L 1 L 2 L 3Carrying
amount (a)% L 1 L 2 L 3
Carrying
amount (D)% amount %
Financial assets held for trading 4,114,977 739,883 3,198 4,858,058 23.1% 4,316,135 501,108 13,966 4,831,209 23.8% 26,849 0.6%
of which: financial derivatives contracts 1,865 738,755 - 740,620 3.5% 429 501,108 - 501,537 2.5% 239,083 47.7%
Financial assets designated at fair value 113,684 3,181 89,995 206,860 1.0% 111,858 - 13,721 125,579 0.6% 81,281 64.7%
Available-for-sale financial assets 11,654,229 1,031,071 128,446 12,813,746 61.0% 11,052,036 1,027,653 112,351 12,192,040 59.9% 621,706 5.1%
Held-to-maturity investments - - - 3,122,272 14.9% - - - 3,185,071 15.7% -62,799 -2.0%
Financial assets (a) 15,882,890 1,774,135 221,639 21,000,936 100.0% 15,480,029 1,528,761 140,038 20,333,899 100.0% 667,037 3.3%
of which:
- debt instruments 15,624,298 981,004 1,550 19,729,124 93.9% 15,237,948 977,788 6,769 19,407,576 95.4% 321,548 1.7%
of which: Italian government securities 15,074,169 395,216 - 18,591,657 88.5% 14,982,814 399,483 - 18,567,368 91.3% 24,289 0.1%
- equity instruments 101,903 3,646 205,111 310,660 1.5% 91,092 - 116,248 207,340 1.0% 103,320 49.8%
- Units in O.I.C.R.
(collective investment instruments). 154,824 50,730 12,872 218,426 1.0% 150,560 49,865 14,825 215,250 1.1% 3,176 1.5%
Financial liabilities held for trading (b) 1,104,072 683,539 - 1,787,611 100.0% 1,207,214 486,164 - 1,693,378 100.0% 94,233 5.6%
of which: financial derivatives contracts 99 683,539 - 683,638 38.2% 17 486,164 - 486,181 28.7% 197,457 40.6%
Net financial assets (a-b) 14,778,818 1,090,596 221,639 19,213,325 14,272,815 1,042,597 140,038 18,640,521 572,804 3.1%
30.6.2013 31.3.2013 Changes (A) / (D)
The fair value has not been shown for held-to-maturity investments, because they are recognised at amortised cost.
While a full and detailed discussion is given in the interim management report on the
consolidated operations contained in the earlier pages of this publication, the main changes that affected the principal types of financial asset in the first half of the year are as follows:
available-for-sale financial assets amounted to €12.8 billion, an increase of €0.9 billion in
the first half (€0.6 billion over three months), attributable primarily to changes in debt
securities, as follows:
- on the one hand, these included new investments in Italian government securities:
+€600 million nominal of BTPs with maturities of between 2 and 3 years (in January)
13 Although these were interest rate hedges consisting of derivative contracts, they were classified within financial assets and
liabilities held for trading, because the assets hedged were recognised in the balance sheets of the network banks.
216
and a net balance of +€200 million as a consequence of switches carried out in the
second quarter (further details are given in the interim manager report on consolidated operations in the
section Financial Activities); - on the other hand, at the end of the first half they included the amounts in the former
Centrobanca corporate bond portfolio (€365 million as at 31st March 2013) after sales and maturities of corporate securities held by the Parent performed in the first quarter
(-0.2 billion).
Within the item, listed equity instruments (€96.8 million, fair value level 1) decreased
compared to December (-€53.2 million), as a result of the sale of 33,400,000 Intesa
Sanpaolo shares14 and the total disposal of the interest held in A2A (a fair value of €4.9
million at the end of year) carried out at the beginning of 2013. However, these instruments increased in the second quarter (+€7.2 million), as a result of a recovery in the fair value of
the Intesa Sanpaolo share (+€6.9 million).
Equity instruments classified within fair value level 3 increased over six months (+€19.8
million) and also compared to March (+€16.1 million), due to the acquisition of some
investments of the former Centrobanca (+€5.9 million) and to increases in fair value which affected the following in the first half: S.A.C.B.O. (+€9.5 million), Istituto Centrale delle
Banche Popolari Italiane Spa (+€5.7 million) and SIA Spa (+€2.1 million), which fully offset
the sale of the entire interest held in Unione Fiduciaria Spa in April 2013 (sale price of €3.4
million);
held-to-maturity investments, amounting to €3.1 billion, consisted solely of government
securities purchased in the first quarter of 2012 (BTPs for a nominal amount of €3 billion with maturity in November 2014);
financial assets held for trading remained unchanged on aggregate at €4.9 billion, despite
new purchases of short-term government securities (BOTs and CTZs) amounting to €0.8
billion, (+€1 billion net in the first quarter, -€0.2 billion net in the second quarter), which
almost entirely offset the decrease in financial derivatives (-€0.7 billion, fair value level 2),
in relation to the action taken at the beginning of 2013, already mentioned, to rationalise hedges entered into by UBI Banca on behalf of the network banks. The performance of
financial derivatives should also be interpreted in relation to the corresponding item
recognised within financial assets held for trading;
financial assets designated at fair value rose to €206.9 million (+€83.5 million compared to
December) as a result not only of the acquisition – following the merger of Centrobanca into
UBI Banca – of the investment portfolio held by the former subsidiary, but also of the reclassification of a marginal UBI Banca portfolio out of held for trading assets.
This asset class was composed as follows as at 30th June 2013:
- €81.4 million of equity instruments, held in relation to merchant banking and private
equity business (almost totally classified within fair value level 3);
- €125.5 million of units in OICRs (collective investment instruments), up by €2.1 million
compared to the end of the year, due to an increase in the fair value of the listed Tages funds classified within fair value level 1 (up by €4 million to €113.7 million), which offset
the reduction in the fair value of the remaining investments in hedge funds classified
within fair value level 3 (down to €11.8 million from €13.7 million). If an amount of €1.1 million classified within held for trading assets is also included, total hedge funds held by the Parent as at 30th June 2013 (fair value level 3 of held for trading assets and assets designated at fair value) amounted to €12.9 million (€14.8 million in December).
14 UBI Banca held a total of 77,607,749 shares as at 30th June 2013, accounting for 0.50% of the share capital with voting rights.
217
Interbank market: quarterly trends
Figures in thousands of euro amount % amount % amount %
Loans and advances to banks 13,717,646 15,283,251 -1,565,605 -10.2% 15,830,498 -2,112,852 -13.3% 24,594,109 -10,876,463 -44.2%
of which:
- loans to central banks 737,251 606,308 130,943 21.6% 917,703 -180,452 -19.7% 576,857 160,394 27.8%
- intragroup 10,401,624 12,180,521 -1,778,897 -14.6% 12,203,596 -1,801,972 -14.8% 22,206,161 -11,804,537 -53.2%
of which: intragroup securities 1,647,346 3,835,593 -2,188,247 -57.1% 4,116,884 -2,469,538 -60.0% 10,063,464 -8,416,118 -83.6%
Due to banks 28,531,411 28,606,811 -75,400 -0.3% 28,081,434 449,977 1.6% 26,448,542 2,082,869 7.9%
of which:
- due to central banks 12,139,750 12,121,417 18,333 0.2% 12,098,917 40,833 0.3% 12,052,000 87,750 0.7%
- intragroup 14,179,303 14,629,652 -450,349 -3.1% 13,989,211 190,092 1.4% 12,558,843 1,620,460 12.9%
of which: subordinated deposits 200,319 201,060 -741 -0.4% 200,332 -13 0.0% 200,461 -142 -0.1%
Net interbank position -14,813,765 -13,323,560 1,490,205 11.2% -12,250,936 2,562,829 20.9% -1,854,433 12,959,332 698.8%
of which: intragroup -3,777,679 -2,449,131 1,328,548 54.2% -1,785,615 1,992,064 111.6% 9,647,318 -13,424,997 n.s.
non-Group banks -11,036,086 -10,874,429 161,657 1.5% -10,465,321 570,765 5.5% -11,501,751 -465,665 -4.0%
Changes A/D31.12.2012
C
30.6.2013
A
Changes A/B Changes A/C 30.6.2012
D
31.3.2013
B
As a consequence of the LTRO financing received from the ECB totalling €12 billion, at the end
of the first half the net interbank position was one of debt of €14.8 billion (an increase
compared to both -€13.3 billion at the end of March and -€12.2 billion at the end of 2012).
This position was the result of an intragroup balance of -€3.8 billion (+€2 billion compared to
31st December, partly as a result of the absence of loans to the former Centrobanca) and a balance of -€11 billion for net business on the market, which did not record any substantial
changes (+€571 million).
Following the mergers firstly of the former B@nca 24-7 (in the third quarter of 2012) and then of the former Centrobanca (in the second quarter of 2013), UBI Banca’s intragroup balance became one of debt due to a decrease in the volume of lending to subsidiaries. Both banks had in fact been supported by funding in the form of current accounts, term deposits, debt securities and reverse repurchase agreements (for the former consumer bank) and in the form of term deposits and debt securities (for the formal corporate bank).
Loans and advances to banks as at 30th June 2013, amounted to €13.7 billion, down by €2.1
billion over six months, of which -€0.2 billion due to a decrease in liquidity held with central
banks consisting of the compulsory reserve account with the central bank and -€1.9 billion due to loans to other banks. The latter item is in fact the aggregate result of a change in the
composition of the type of lending: growth in current accounts (+€2 billion) was in fact
accompanied by a fall in term deposits (-€1.2 billion), other financing (-€0.3 billion) and debt
instruments (-€2.4 billion, almost entirely intragroup).
Although reverse repurchase agreements (€4.6 billion at the end of the first half) remained unchanged compared to December 2012 (-€0.1 billion), amounts relating to Group banks with
the underlying consisting of securities issued as part of internal securitisations tended to fall
(down to €3.4 billion). This was offset, although only slightly, by the trend for reverse
repurchase agreements with counterparties outside the Group (to be interpreted in
combination with on-balance sheet financial liabilities held for trading – uncovered short
positions on European government securities). Following the discontinuation of business with Centrobanca, to which €4.1 billion of
intragroup business was related at the end of the year, lending to Group banking
counterparties fell at the end of the first half to €10.4 billion from €12.2 billion as at 31st
December 2012.
Funding from banks on the other hand, which totalled €28.5 billion as at 30th June 2013,
changed only slightly (+€0.4 billion) compared to the end of year, attributable to changes in
amounts due to banks (up to €16.4 billion), while the exposure to central banks (€12.1 billion,
inclusive of interest accruing) was virtually unchanged.
The composition of amounts due to banks also changed in terms of types of funding, affected
by changes in intragroup business as follows: a reduction in current accounts (-€2 billion) was more than offset by growth in term deposits (+€1.8 billion), financing (+€0.5 billion, for
medium to long-term transactions with the EIB, previously relating to Centrobanca) and also
“other payables” (+€0.1 billion, relating to business outside the Group). The latter item also
included the relationship for the settlement of credit cards with Istituto Centrale Banche
Popolari (slightly down during the reporting period).
218
Separate interim financial statements as at and for the period ended the 30th June 2013
Balance sheet
Figures in thousands of euro
30.6.2013 31.12.2012 30.6.2012
ASSETS
10. Cash and cash equivalents 115,362 203,442 128,307
20. Financial assets held for trading 4,858,058 4,766,163 6,047,340
30. Financial assets designated at fair value 206,860 123,381 122,376
40. Available-for-sale financial assets 12,813,746 11,955,356 10,959,403
50. Held-to-maturity investments 3,122,272 3,158,013 3,192,239
60. Loans and advances to banks 13,717,646 15,830,498 24,594,109
70. Loans and advances to customers 26,527,303 22,584,747 13,453,014
80. Hedging derivatives 246,075 925,693 802,509
90. Fair value change in hedged financial assets (+/-) 5,961 196,828 -
100. Equity investments 10,975,983 10,911,721 10,904,733
110. Property, plant and equipment 633,267 586,806 596,841
120. Intangible assets 410 410 422
of which:- goodwill - - -
130. Tax assets 1,552,572 1,605,830 1,638,262
a) current 296,890 412,800 342,478
b) deferred 1,255,682 1,193,030 1,295,784
- of which pursuant to Law No. 214/2011 985,958 920,811 843,476
140. Non-current assets and disposal groups held for sale 2,329 2,329 124,706
150. Other assets 714,059 485,037 246,894
75,491,903 73,336,254 72,811,155TOTAL ASSETS
Figures in thousands of euro
30.6.2013 31.12.2012 30.6.2012
LIABILITIES AND EQUITY
10. Due to banks 28,531,411 28,081,434 26,448,542
20. Due to customers 7,441,689 7,897,195 10,573,704
30. Debt securities issued 26,717,190 23,405,765 23,848,486
40. Financial liabilities held for trading 1,787,611 2,553,159 2,222,922
60. Hedging derivatives 881,210 1,307,735 1,021,449
80. Tax liabilities 172,210 230,964 219,978
a) current 111,363 165,766 166,167
b) deferred 60,847 65,198 53,811
100. Other liabilities 833,387 1,168,383 586,110
110. Post-employment benefits 38,995 43,612 39,482
120. Provisions for risks and charges: 60,520 40,286 25,816
a) pension and similar obligations 1,083 - -
b) other provisions 59,437 40,286 25,816
130. Valuation reserves -418,573 -502,574 -994,247
160. Reserves 2,337,119 1,919,945 1,716,617
170. Share premiums 4,716,864 4,716,861 4,716,859
180. Share capital 2,254,371 2,254,368 2,254,367
190. Treasury shares (-) -6,121 -4,375 -4,375
200. Profit (loss) for the period/year (+/-) 144,020 223,496 135,445
75,491,903 73,336,254 72,811,155TOTAL LIABILITIES AND EQUITY
219
Income statement
Figures in thousands of euro
1H 2013 1H 2012 FY 2012
10. Interest and similar income 612,501 614,326 1,315,833
20. Interest and similar expense (573,846) (702,922) (1,342,604)
30. Net interest income (expense) 38,655 (88,596) (26,771)
40. Fee and commission income 50,496 12,810 75,983
50. Fee and commission expense (44,092) (25,541) (88,194)
60. Net fee and commission income 6,404 (12,731) (12,211)
70. Dividends and similar income 229,522 222,358 339,096
80. Net trading income 1,368 33,240 77,474
90. Net hedging income (loss) (2,350) 8,106 12,942
100. Income from disposal or repurchase of: 61,164 63,421 156,086
a) loans and receivables 12 2,251 1,741
b) available-for-sale financial assets 61,993 52,469 140,036
d) financial liabilities (841) 8,701 14,309
110. Net income (loss) on financial assets and liabilities designated at fair value 1,582 (2,515) 1,203
120. Gross income 336,345 223,283 547,819
130. Net impairment losses on: (89,309) (48,479) (110,348)
a) loans and receivables (55,242) (1,213) (67,600)
b) available-for-sale financial assets (17,528) (46,118) (53,290)
d) other financial transactions (16,539) (1,148) 10,542
140. Net financial income 247,036 174,804 437,471
150. Administrative expenses (166,045) (120,243) (331,772)
a) staff costs (74,734) (57,569) (157,103)
b) other administrative expenses (91,311) (62,674) (174,669)
160. Net provisions for risks and charges (991) (8,969) (11,106)
170. Depreciation and net impairment losses on property, plant and equipment (11,539) (11,923) (24,138)
180. Amortisation and net impairment losses on intangible assets - (26) (38)
190. Other net operating income/expense 59,355 49,237 125,404
200. Operating expenses (119,220) (91,924) (241,650)
210. Losses of equity investments (902) (16) (23,508)
230. Net impairment losses on goodwill - - -
240. Profits on disposal of investments 1 10 40
250. Pre-tax profit from continuing operations 126,915 82,874 172,353
260. Taxes on income for the period/year from continuing operations 17,105 52,558 51,143
270. Post-tax profit from continuing operations 144,020 135,432 223,496
280. Post-tax profit from discontinued operations - 13 -
290. Profit for the period/year 144,020 135,445 223,496
220
Statement of comprehensive income
Figures in thousands of euro
1H 2013 1H 2012 FY 2012
A PROFIT FOR THE PERIOD/YEAR 144,020 135,445 223,496
Other comprehensive income, net of taxes, which will be reclassified to profit or loss
when specific conditions are met
Available-for-sale financial assets 111,001 125,364 619,034
Cash flow hedges - - -
Share of valuation reserves of equity-accounted investees - - -
B
Total other comprehensive income, net of taxes, which will be reclassified to profit or
loss when specific conditions are met 111,001 125,364 619,034
Other comprehensive income, net of tax, which will not be reclassified subsequently to
profit or loss
Actuarial gains (losses) on defined benefit plans 528 -945 -2,838
C
Total other comprehensive income (expense), net of tax, which will not be reclassified
subsequently to profit or loss 528 -945 -2,838
D Total other comprehensive income net of taxes (item B+C) 111,529 124,419 616,196
E COMPREHENSIVE INCOME (item A+D) 255,549 259,864 839,692
221
Statement of changes in shareholders’ equity for the period ended 30th June 2013
Balances as
at 31.12.2012
Figures in thousands of euro
Share capital: 2,254,368 - 2,254,368 - - - 3 - - - - - - 2,254,371
a) ordinary shares 2,254,368 - 2,254,368 - - - 3 - - - - - - 2,254,371
b) other shares - - - - - - - - - - - - - -
Share premiums 4,716,861 - 4,716,861 - - - 3 - - - - - - 4,716,864
Reserves 1,919,945 - 1,919,945 177,842 - 239,332 - - - - - - - 2,337,119
a) retained earnings 1,483,812 - 1,483,812 177,842 - - - - - - - - - 1,661,654
b) other 436,133 - 436,133 - - 239,332 - - - - - - - 675,465
Valuation reserves -502,574 - -502,574 - - -27,528 - - - - - - 111,529 -418,573
Equity instruments - - - - - - - - - - - - - -
Treasury shares -4,375 - -4,375 - - - - -1,746 - - - - - -6,121
Profit for the period 223,496 - 223,496 -177,842 -45,654 - - - - - - - 144,020 144,020
Equity 8,607,721 - 8,607,721 - -45,654 211,804 6 -1,746 - - - - 255,549 9,027,680
Equity as at
30.6.2013Changes in
reserves
Equity transactions
Comprehensive
incomeReservesDividends and
other uses
Stock
options
Restate-
ment of
opening
balances
Balances as
at 1.1.2013
Allocation of prior year profitChanges January - June 2013
New share
issues
Repurchase
of treasury
shares
Extraordinary
distribution of
dividends
Change in
equity
instruments
Derivatives
on treasury
shares
222
Statement of changes in equity for the period ended 30th June 2012
Balances as
at 31.12.2011
Figures in thousands of euro
Share capital: 2,254,367 - 2,254,367 - - - - - - - - - - 2,254,367
a) ordinary shares 2,254,367 - 2,254,367 - - - - - - - - - - 2,254,367
b) other shares - - - - - - - - - - - - - -
Share premiums 7,429,913 - 7,429,913 -2,713,054 - - - - - - - - - 4,716,859
Reserves 1,761,644 - 1,761,644 - -45,027 - - - - - - - - 1,716,617
a) retained earnings 1,528,839 - 1,528,839 - -45,027 - - - - - - - - 1,483,812
b) other 232,805 - 232,805 - - - - - - - - - - 232,805
Valuation reserves -1,118,666 - -1,118,666 - - - - - - - - - 124,419 -994,247
Equity instruments - - - - - - - - - - - - - -
Treasury shares -4,375 - -4,375 - - - - - - - - - - -4,375
Loss for the period -2,713,054 - -2,713,054 2,713,054 - - - - - - - - 135,445 135,445
Equity 7,609,829 - 7,609,829 - -45,027 - - - - - - - 259,864 7,824,666
Equity as at
30.6.2012
Allocation of prior year profitChanges January - June 2012
Equity transactions Restate-
ment of
opening
balances
Balances as
at 1.1.2012
ReservesDividends and
other uses
New share
issues
Changes in
reserves
Comprehensive
incomeRepurchase
of treasury
shares
Extraordinary
distribution of
dividends
Change in
equity
instruments
Derivatives
on treasury
shares
Stock
options
223
Cash flow statement (indirect method)
Figures in thousands of euro
1H 2013 1H 2012
54,031 41,122
- profit for the period (+/-) 144,020 135,445
- gains/losses on financial assets held for trading and on financial assets/liabilities at fair value (+/-) -30,162 3,368
- gains/losses on hedging activities (-/+) 2,350 -8,106
- net impairment losses on loans (+/-) 89,309 48,479
- depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets (+/-) 11,539 11,949
- net provisions for risks and charges and other expense/income (+/-) 991 8,969
- outstanding taxes and duties -17,105 -50,353
- other adjustments (+/-) -146,911 -108,629
7,627,946 1,417,092
- financial assets held for trading 488,746 -2,550,078
- financial assets designated at fair value 1,666 -669
- available-for-sale financial assets -546,334 -4,002,484
- loans and advances to banks 4,304,251 5,576,688
- loans and advances to customers 2,281,455 2,240,196
- other assets 1,098,162 153,439
-7,517,002 1,497,813
- due to banks -1,914,497 2,153,310
- due to customers -463,939 2,559,348
- debt securities issued -2,911,247 -3,494,751
- financial liabilities held for trading -1,251,348 364,180
- other liabilities -975,971 -84,274
164,975 2,956,027
221,893 211,460
- disposals of equity investments - -
- dividends received on equity investments 221,888 211,419
- disposals of held-to-maturity investments - -
- disposals of property, plant and equipment 5 41
- disposals of intangible assets - -
-427,570 -3,178,167
- purchases of equity investments -426,927 -16,275
- purchases of held-to-maturity investments - -3,161,412
- purchases of property, plant and equipment -643 -480
- purchases of intangible assets - -
- purchases of lines of business - -
-205,677 -2,966,707
- issues/purchases of treasury shares -1,739 -
- distribution of dividends and other uses -45,654 -45,027
-47,393 -45,027
-88,095 -55,707
Reconciliation
Figures in thousands of euro30.6.2013 30.6.2012
Cash and cash equivalents at beginning of period 203,442 184,014
Business combination transactions 15 -
Total liquidity generated/used -88,095 -55,707
Cash and cash equivalents at the end of the period 115,362 128,307
A. OPERATING ACTIVITIES
1. Ordinary activities
2. Net cash flows from/used by financial assets
3. Net cash flows from/used by financial liabilities
Net cash flows from/used in operating activities
B. INVESTING ACTIVITIES
1. Cash flows from
NET CASH GENERATED/USED DURING THE PERIOD
2. Cash flows used in
Net cash flows from/used in investing activities
C. FINANCING ACTIVITIES
Net cash flows from/used in financing activities
DE JURE AND DELEGATED POWERS
OF THE CORPORATE BODIES (Consob - Italian securities market authority - recommendation No. 97001574 of 20th
February 1997)
225
In compliance with recommendation No. 97001574 issued by the Italian securities market authority (Consob) on 20th February 1997, the de jure and delegated powers of the corporate bodies and General Management of Unione di Banche Italiane Scpa are set out below.
Supervisory Board The Supervisory Board is composed of 23 members appointed by a Shareholders' Meeting chosen from among those registered shareholders possessing the necessary qualities of integrity, professionalism and independence required by the legislation in force. At least 15 of the Members of the Supervisory Board must be in possession of the requirements of professionalism required by the legislation currently in force for persons who perform the functions of directors of banks. In particular, at least three members of the Supervisory Board must be chosen from amongst persons enrolled in the Registro dei Revisori Contabili (register of external statutory auditors) who have practiced as external statutory auditors for a period of not less than three years. They remain in office for three financial years.
The Supervisory Board meets, upon notice given by the Chairman, at least every 60 days; the meetings take place alternating between the city of Bergamo and the city of Brescia and once a year in the city of Milan. The meetings are considered as being validly held (i.e. a quorum is present) if they are attended by the majority of the Board Members in office. The Board passes resolutions where the absolute majority of the members attending the meeting (resolution quorum) casts a vote in favour, except for those cases where the Articles of Association prescribe higher quorums.
The functions of the Supervisory Board are set out in article 46 of the Articles of Association. The Chairman of the Supervisory Board convenes – on his own initiative and, in any event, in the cases prescribed by Law or the Articles of Association – and chairs the meetings of the Board itself, setting the agendas, taking account of the proposals formulated by the Senior Deputy Chairman and the other Deputy Chairmen and ensuring that adequate information about the topics contained on the agenda are provided to all the members of the Supervisory Board. The Chairman of the Supervisory Board also performs the functions pursuant to Art. 47 of the Articles of Association compatible with the exercise of the responsibilities of the Board. The following Internal Committees have been formed from among the members of the Supervisory Board.
Appointments Committee
The Appointments Committee (members of which pursuant to Art. 49 of the Articles of Association include the Chairman of the Supervisory Board with the functions of Chairman and the Senior Deputy Chairman) is composed of the following members of the Supervisory Board: Andrea Moltrasio – as the Chairman Mario Cera Alberto Folonari Mario Mazzoleni Enrico Minelli Armando Santus.
The committee is governed by special regulations which determine its responsibilities and functioning.
In compliance with the Articles of Association, the Appointments Committee’s duties include the following: - it identifies candidates for membership of the Supervisory Board to be proposed to the Supervisory
Board itself for submission to a Shareholders’ Meeting; - it identifies candidates for membership of the Management Board to be proposed to the Supervisory
Board; - it performs assessment activity for the issue of a non-binding opinion which the Supervisory Board
may express in accordance with article 46, paragraph one, letter n) of the Articles of Association, with a vote in favour of at least 17 (seventeen) of its members on the candidates proposed by the Management Board to the position of board member and statutory auditor of the subsidiaries listed in article 36, paragraph two, letter b) of the Articles of Association;
Remuneration Committee
The Remuneration Committee is composed of the following members of the Supervisory Board: Mario Cera – as the Chairman Marina Brogi Alessandra Del Boca Andrea Cesare Resti
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Armando Santus. The Remuneration Committee is governed by special regulations which determine its responsibilities and functioning in compliance with legal, regulatory and article-of-association provisions. The Remuneration Committee formulates the following: - recommendations for decisions which the Supervisory Board must submit to the shareholders for
approval concerning the following: setting the remuneration for members of the Supervisory Board; setting policies for the remuneration of the Management Board; remuneration and incentive policies for the corporate bodies of Group companies and for company officers, employees and associate workers not bound to companies by employee contracts;
- opinions on the consistency of resolutions on remuneration and incentives with policy as approved by the Supervisory Board.
The committee performs advisory functions and makes recommendations concerning remuneration for senior management as specified by article 26 of the Consolidated Banking Act and the relative regulations to implement it and for the officers of the internal control function. It also has advisory duties with regard to setting the remuneration criteria for key personnel, which in the UBI Banca Group comprises senior management as defined in the remuneration and incentive policies of the Group.
The Committee also carries out those duties assigned to it by the provisions of the supervisory authority with regard to the remuneration and incentive policies and practices of banks and banking groups. The remuneration committee was provided with the information and gained access to corporate functions needed for the performance of its duties. The Committee is permitted to retain outside consultants to assist it in determining matters as required by the regulations.
Internal Control Committee
The Internal Control Committee is composed of the following members of the Supervisory Board, all of whom are enrolled in the register of external statutory auditors: Sergio Pivato – as the Chairman
Pierpaolo Camadini Carlo Garavaglia Gianluigi Gola Alfredo Gusmini.
The committee is governed by special regulations which determine its duties and how it functions. The purpose of the Committee is to support the Supervisory Board by performing assessments, furnishing advice and submitting proposals in those areas overseen by the Board in accordance with regulatory requirements as may be in force from time to time.
The Committee's duties also include supporting the Supervisory Board with its supervisory functions pursuant to article 149, paragraphs one and three, of Legislative Decree No. 58 of 24th February 1998 having regard to the internal control system and other activities connected with the functions of the Supervisory Body. The Committee performs its internal control and audit functions in accordance with article 19 of Legislative Decree No. 39 of 27th January 2010, specifically including the following: - financial reporting; - effectiveness of the system of internal control, internal audit and risk management; - statutory audit of annual separate and consolidated financial statements; - the independence of auditors particularly with respect to the provision of non-audit services.
The Committee, by employing the services of the appropriate organisational units of the Bank, can
proceed to inspections and controls at any time and exchange information with the control bodies of the companies of the Group with regard to the management and control systems and to corporate activity. At least one member of the Internal Control Committee attends meetings of the Management Board on a rotating basis in compliance with regulations in force.
Accounts Committee
The Accounts Committee is composed of the following members of the Supervisory Board: Lorenzo Renato Guerini – as the Chairman Dorino Mario Agliardi Marina Brogi Federico Manzoni.
The purpose of the Accounts Committee is to support the Supervisory Board by performing assessments, furnishing advice and submitting proposals in accordance with regulatory requirements, as may be in force from time to time, relating to the approval of financial statements and periodic reports, by providing its support to the Board to reach a reasoned opinion on such statements and reports. The committee is, in that particular respect, required to provide the Supervisory Board with a factual and analytical understanding of such statements and reports. This is done through fact finding activities
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performed on the accounts prior to the preparation of annual separate and consolidated financial statements or half year and quarterly reports. The committee then oversees the preparation of accounting documentation through the examination of figures and other relevant information as and when they become available. In order to do this the Committee: discusses accounting issues common to all Group member companies; examines accounting issues relating to individual Group member companies; acquires detailed knowledge of issues concerning the measurement of items in the accounts; acquires detailed knowledge of issues concerning the presentation of accounts; studies issues concerning supervisory regulations for banks, acquiring knowledge of technical and
discretionary aspects.
The Supervisory Board may also ask the Committee to study specific issues within the scope of its responsibilities. The Committee normally performs its duties using the information provided to the Supervisory Board in compliance with the relevant regulations and any additional information provided by the Senior Officer Responsible for the Preparation of Corporate Accounting Documents.
Related Parties Committee
The Related Parties Committee composed of the following Supervisory Board members Marco Giacinto Gallarati – as the Chairman Antonella Bardoni Enrico Minelli.
The Related Parties Committee's responsibilities and functioning are governed by the aforementioned "Regulations for UBI Banca Scpa Related-Party Transactions" which is available on the website www.ubibanca.it.
Management Board The Management Board is composed of 11 Members appointed by the Supervisory Board. The members of the Management Board shall remain in office for three financial years. Their term of office shall expire on the date of the Supervisory Board meeting convened to approve the financial statements relating to their last year in office. They remain in office in any event until a new Management Board is appointed in accordance with article 46, letter a) of the Articles of Association and they may be re-appointed. The members of the Supervisory Board cannot be appointed as members of the Management Board as long as they continue to hold that office. The following rules apply: (i) at least one of the members of the Management Board must hold the requirements of independence
pursuant to Art. 148, paragraph three of Legislative Decree No. 58 of 24th February 1998; (ii) at least the majority of the members must have at least three years experience in management and/or
professional activities in financial and/or banking and/or insurance companies in Italy or abroad.
The Management Board meets at least once a month and also at any time the Chairman considers it appropriate or when a request is made by five members. Meetings are held alternating between the city of Bergamo and the city of Brescia and once a year in the city of Milan. The functions of the Management Board are specified in Article 37 of the Articles of Association.
The Chairman of the Management Board, who acts as the legally authorised representative and authorised signatory of the Bank, performs the tasks that are typically carried out by the chairman of a company’s management body, which he performs by liaising appropriately with the other bodies regulated by the Articles of Association. The Chairman of the Management Board exercises powers pursuant to article 39 of the Articles of Association.
The powers of the Chief Executive Officer are conferred and revoked by the Management Board. The Management Board, in compliance with the Articles of Association, has conferred the following powers on the Chief Executive Officer:
- to supervise the management of the Bank and of the Group;
- to supervise the strategic co-ordination and the operational control of the Bank and the Group;
- to supervise the implementation of the organisational, administrative and accounting structure
decided by the Management Board and approved by the Supervisory Board;
- to determine working directives for the General Management;
- to oversee the integration of the Group;
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- to submit proposals to the Management Board for the formulation of the general programmes and
strategic policies of the Bank and the Group and to draw up the business and/or financial plans and budgets of the Bank and the Group to be submitted for the approval of the Supervisory Board and to supervise implementation through the general management;
- to propose budgetary policy and policies on the optimisation of the use and enhancement of human
resources and to submit financial statements and periodic financial reports to the Management Board for approval;
- to propose appointments to the senior operational and executive management of the Group to the Management Board, in agreement with the Chairman and Deputy Chairman of the Management Board and after consultation with the General Manager;
- to promote integrated risk management;
- to make extraordinary requests for inspections and investigations to the internal control function
through the Internal Control Committee.
In accordance with the Articles of Association, the Chief Executive Officer reports quarterly to the Management Board on foreseeable developments and on the most important transactions performed by
the Bank and its subsidiaries. The Chief Executive Officer reports monthly to the Management Board on the results of the Bank and the main subsidiaries of the Group as a whole. Furthermore, the Management Board has assigned duties to the Chief Executive Officer pursuant to Art. 43 bis of the Articles of Association, with the support of the General Manager, with regard to the design of the overall architecture of internal control systems. UBI Banca has adopted its own model of organisation, management and control, which complies with Legislative Decree No. 231/2001 and the relative legislation and regulations that apply and is based on principles that are already rooted in its governance culture and on the recommendations contained in the Italian Banking Association Guidelines. In compliance with Art. 6, paragraph 1, letter b) of Legislative Decree No. 231/2001 and in view of the recommendations of the most representative business associations representing banks and of the Italian Banking Association above all, UBI Banca has formed its Supervisory Body as a collegial body composed of the following:
- two members of the Management Board;
- the Chief of the Legal Affairs and Litigation Area;
- the Chief of the Compliance Risk Area;
- an external professional, with the necessary specific expertise.
The Supervisory Body reports to the corporate bodies on the adoption and effective implementation of the model of organisation, management and control, on the functioning of that model and on supervision of updates to the model. It employs two separate lines of reporting to achieve this. The first is on a continuous basis directly to the Chief Executive Officer and the General Manager and the second consists of periodic reporting to the Management Board and the Supervisory Board. UBI Banca, as the Parent, informs subsidiaries of the policies it has set in relation to the prevention of crimes pursuant to Legislative Decree No. 231/2001 and recommends general criteria which subsidiaries may follow. In view of recent regulatory measures on the subject of internal controls – decided by the Bank of Italy in final form on 2nd July 2013 – and concerning “functional compatibility” between bodies with control functions and supervisory bodies, in July 2013 the competent corporate bodies of UBI Banca approved a proposal which for the Parent, UBI Banca, involves conferring the functions of the supervisory body on the Internal Control Committee and, similarly, the same function functions are attributed to the Board of
Statutory Auditors for subsidiaries. The objective is to achieve greater rationalisation and improved coordination for the internal control system.
***
As concerns the General Management, the Articles of Association provide for the appointment, by the Management Board, of a General Manager and, if nominated, a Joint General Manager as well as one or more Deputy General Managers, in accordance with the organisation chart established by the Management Board itself, which will determine their powers. The Management Board, in compliance with the Articles of Association, has appointed Francesco Iorio to the position of General Manager with the following functions and responsibilities:
- chief operating officer;
- chief of personnel;
- ensuring, as a rule (unless otherwise specified by the competent management bodies), that the
resolutions of the Management Board and of the Chief Executive Officer are implemented;
- managing day-to-day business in compliance with the policies set by management bodies;
- attending, with an advisory vote, the meetings of the Management Board;
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- supervising the strategic co-ordination of the Bank and the Group.
The Management Board appointed Elisabetta Stegher, who is the current Chief Financial Officer of the Bank, with the favourable opinion of the Supervisory Board, as the Senior Officer Responsible for the
preparation of corporate accounting documents pursuant to Article 154-bis of the Consolidated Finance Act.
Glossary
231 Glossary
ABS (Asset Backed Securities) Financial instruments issued against securitisations (cf. definition) on which the yield and redemption are guaranteed by the assets of the originator (cf. definition), which are earmarked exclusively to satisfy the rights incorporated in the
financial instruments themselves. Technically debt securities are issued by a special purpose entity (SPE - cf. definition). The portfolio underlying the securitisation may consist of mortgage loans, other loans, bonds, commercial paper, loans resulting from credit cards or even other assets. Depending on the type of underlying asset, ABSs may be classified as follows:
- credit loan obligation CLO (the portfolio consists of bank loans); - collateralised bond obligation, CBO (the portfolio consists of bonds); - collateralised debt obligation, CDO (the portfolio consists of bonds, debt instruments and securities in general); - residential mortgage backed security RMBS (the portfolio consists of mortgage loans on residential properties).
- commercial mortgage backed security, CMBS (the portfolio consists of mortgage loans on commercial properties). Acquisition finance Finance for company acquisition operations.
ALM (Asset & Liability Management) Integrated management of assets and liabilities designed to allocate resources in such a way as to optimise the risk to yield ratio.
Alternative Dispute Resolution (ADR)
This term refers to a set of methods, tools and techniques for resolving disputes out-of-court, where one or both parties rely on a third impartial party to resolve a dispute without resort to the courts. Alternative Investment
A ranges of forms of investment which includes, amongst other things, private equity investments (cf. definition) and investments in hedge funds (cf. definition). Asset Management
Management and custody of financial investments belonging to others. ATM (Automated Teller Machine) Automatic device used by customers to perform operations such as withdrawing cash, paying in cash or cheques,
requesting information on their accounts, paying utility bills, recharging telephones, etc.. Customers operate the machine by inserting a card and typing in a personal identification number. Audit
A process for the control of corporate activities and accounts performed by both internal units (internal audit – cf. definition) and external companies (external audit). Backtesting
Retrospective analyses designed to test the reliability of measurements of risk attached to the positions of asset portfolios. Banc assurance
Term used to refer to the sale of traditional insurance products through a bank’s branch network. Banking book This usually identifies that part of a securities portfolio, or in any case financial instruments in general, destined to
“ownership” activities.
Banking-Financial Conciliator
The “Banking-Financial Conciliator – Association for resolving banking, financial and corporate disputes – ADR” is an initiative promoted with the support of the Italian Banking Association by the ten largest banking groups, including the UBI Banca Group, to provide customers with a service to resolve disputes rapidly and efficiently as an alternative to going
through the courts (ADR stands for Alternative Dispute Resolution – cf. definition). The following services are provided:
Mediation: this consists of an attempt to settle a dispute by appointing an independent expert (mediator) to assist
in reaching an agreement between the parties quickly, within four months at the most. Mediation by the Banking-Financial Conciliator is regulated by Legislative Decree No. 28 of 4th March 2010 and by the relative regulations filed with the Ministry of Justice. The Banking-Financial Conciliator is a mediation facility which specialises in
banking, financial and corporate matters, that employs its own mediators who are present in many regions of Italy. If the parties reach an agreement, the report prepared by the mediator can be approved by the court on application by the parties and it thereby becomes enforceable;
Arbitration: procedure whereby parties submit a dispute to an arbitrator or board of arbitration, acknowledging
them as empowered to decide on the question;
Ombudsman Giurì Bancario: a body formed in 1993 and located at the Italian Banking Association to which
customers, dissatisfied with the decisions of the complaints departments of their banks or who have not received
replies to their complaints within prescribed time limits, might appeal without charge. Responsibility for running the ombudsman service was transferred to the Banking-Financial Conciliator on 1st June 2007. Disputes concerning investment services may be submitted to it to establish rights, obligations and powers, independently of the amount on the account in question. If the request concerns the payment of a sum of money
the matter falls within the jurisdiction of the ombudsman if the amount requested is not greater than €100,000. The Ombudsman decides within 90 days of the date of receipt of an application. Recourse to the ombudsman does
232 Glossary
not preclude a customer’s right to apply to the courts, or to request mediation by a conciliation board, or to submit the matter to a board of arbitration at any time, while the decision is binding for the intermediary.
Basel 2 International agreement on capital which identifies the guidelines for calculating the minimum capital requirements for banks1. The new prudential regulations are based on “three pillars”:
first Pillar (Pillar 1): while it maintains the objective of a level of capitalisation equal to 8% of risk weighted
exposures, a new system of rules has been defined for measuring risks typical of banking and financial activities (credit, counterparty, market and operational risks), which introduces alternative methods of calculation characterised by different levels of complexity, with the possibility of using internally developed rating systems, subject to prior authorisation from the Supervisory Authority;
second pillar (Pillar 2): this requires banks to equip themselves with processes and instruments to calculate their
total internal capital adequacy requirement (Internal Capital Adequacy Assessment Process - ICAAP) to meet each
type of risk, which may even be different from those covered by the total capital requirement (first pillar). The Supervisory Authority is responsible for reviewing the ICAAP process, for formulating an overall opinion and, where necessary, for activating appropriate corrective action;
third pillar (Pillar 3): this introduces the obligation to publish information on capital adequacy, exposure to risks
and the general characteristics of systems designed to identify, measure and manage these risks.
Basel 3
On 16th December 2010, the Basel Committee on Banking Supervision published new rules on the capital and liquidity of banks which will enter into force in Europe from 1st January 2014.
The new regulations seek to strengthen the quality and quantity of the capital of banks, to contain financial leverage in the banking system (with a maximum limit set), to reduce the possible pro-cyclical effects of prudential rules and to tighten control over liquidity risks, with the introduction of two indicators designed to monitor liquidity both over 30 days ((Liquidity Coverage Ratio - LCR, cf. definition) and also in more structural terms (Net Stable Funding Ratio -
NSFR, cf. definition) From the viewpoint of the composition of capital, the new rules give priority to ordinary shares and retained earnings (common equity), the adoption of more stringent criteria for the inclusion of other capital instruments and greater standardisation at international level of the components to be deducted.
Basis point One hundredth of a percentage point (0,01%).
Basis swap Contract which involves an exchange between two counterparties of payments linked to variable interest rates based on different indices.
Benchmark A standard for the measurement of financial investments: it may consist of well known market indices or of others that are more suited to the risk-yield profile.
Best practice Conduct that is comparable with the most significant and/or best level achieved in a given field or profession. Business risk
The risk of adverse and unexpected changes in profits and margins with respect to forecasts, connected with volatility in volumes of business due to competitive pressures and market conditions. CAGR – Compound Annual Growth Rate
The annual growth rate applied to an investment or other assets for a period of several years. The formula for calculating CAGR is [(present value/base value)^(1/number of years)-1]. Capital allocation
Process by which decisions are made on how to distribute investments among different types of financial asset (e.g. bonds, equities and liquidity). Capital allocation decisions are determined by the need to optimise the risk/return ratio in relation to the time horizon and the expectations of the investor.
Capitalisation (insurance) certificates Capitalisation contracts fall within the field of application of the legislation on direct life insurance contained in Legislative Decree No. 174 of 17th March 1995. As defined in Art. 40 of that legislative decree, these are contracts with
which insurance companies agree to pay capital equal to the premium paid, revalued periodically on the basis of the
1 The first version of the agreement, known as Basel 1, dates back to 1988 and was signed in that Swiss city where the Bank for
International Settlements (BIS) has its headquarters, an organisation which has been promoting monetary and financial co-operation on a worldwide scale since 1930 (it is known in Italy as Banca per i regolamenti Internazionali - BRI). The Basel Committee operates
within it, formed by the governors of the central banks of the ten most industrialised countries (G10) at the end of 1974, and it is this that has formulated the agreements or “accords”. The following are currently represented on it: Belgium, Canada, France,
Germany, Holland, Italy, Japan, Luxembourg, Spain, Sweden, Switzerland, United Kingdom, United States. The Basel Committee has no supranational authority: the member countries may decide to comply with the accords but they are not
bound to accept the decisions of the committee. The compulsory nature of Basel 2 for EU countries is in fact the result of a European Parliament directive which adopted it in September 2005.
The first Basel accord, signed by the central authorities of more than 100 countries established the obligation for the banks participating in it to set aside a share of their capital amounting to 8% of the loans disbursed independently of an assessment of the
reliability of the companies that had requested them, using rating procedures.
233 Glossary
return on separate internal management of financial assets or, if higher, a minimum guaranteed return, as the consideration for the payment of single or periodical premiums. They cannot have a life of less than five years and the policyholder has the right to cash-in the policy from the beginning of the second year onwards. In accordance with Art.
31 of the cited Legislative Decree No. 174, financial assets used to hedge technical reserves are reserved exclusively to comply with obligations connected with capitalisation contracts (separate management). Consequently, if the insurance company is placed in liquidation (Art. 67), the beneficiaries of those policies have title as creditors with special privileges.
Capitalisation policies See the item “Capitalisation (insurance) certificates”.
Captive Term generally used to refer to distribution networks or companies that operate exclusively with customers belonging to the company or group in question.
Cassa di Compensazione e Garanzia (CCG) A joint stock company which performs the functions of a central counterparty clearing house on spot equity and derivative markets operated by Borsa Italiana and also on the electronic stock market for Government securities.
Commercial paper Short term securities issued to collect funds from third party purchasers as an alternative to other forms of debt.
Company networks Businesses which sign a network contract with which a group of companies can pursue the objective of increasing
their ability to innovate and to compete on the market (article 42, Decree Law No. 78/2010, converted with amendments by Law No. 122 of 30th July 2010). Compliance risk
The risk of incurring legal or administrative penalties, substantial financial losses or damage to reputation as a
consequence of violations of laws and external regulations or internal regulations (by-laws, codes of conduct and voluntary codes). Concentration risk
Risk resulting from exposures in the banking portfolio to counterparties, groups of connected counterparties and counterparties in the same economic sector or counterparties which carry on the same business or belong to the same geographical area.
Conduit See the item SPE.
Consumer finance Loans granted to private individuals for the consumption of goods and services. Core tier 1 ratio
The ratio between the tier one capital (cf. definition) net of ineligible instruments (preference shares, savings shares and privileged shares) and the total risk weighted assets (cf. definition). Corporate governance
Corporate governance defines the assignment of rights and responsibilities to the participants in the life of a company in relation to the distribution of duties, responsibility and decision making powers by means of the composition and functioning of internal and external corporate bodies. One fundamental objective of corporate governance is to create maximum value for shareholders, which, in the medium to long term, is also advantageous for other stakeholders,
such as customers, suppliers, employees, creditors, consumers and the community. Cost income ratio A performance indicator defined as the ratio of operating costs to gross income.
Country Risk Premium This is that component of the cost of capital destined to specifically remunerate risk associated with the economic, financial, political and currency instability of a specific country.
Covered bonds Special bank bonds which, in addition to the guarantee given by the issuing bank, also offer as security a portfolio of mortgage or other high credit quality loans transferred for that purpose to a “special purpose entity”2.
Banks which intend to issue covered bonds must have assets of not less than 500 million euro and a total capital ratio at consolidated level of not less than 9%. The share of the assets potentially useable as security that are transferred may not exceed the following limits, calculated on the basis of the level of capitalisation:
- 25% in cases of a capital ratio 9% and > 10% with tier 1 ratio 6%;
2 Covered bonds issued by banks are regulated in Italy by Law No. 130 of 30th April 1999 (Art. 7-bis). The way in which they work is
for a bank to transfer high quality credit assets (mortgage loans and loans to public administrations) to a special purpose entity and
for a bank, even a different bank from the transferor, to issue bonds guaranteed by the special purpose entity with the collateral of the assets acquired which constitute separate capital. The details for the application of the regulations are contained in Ministerial
Regulation No.310 of 14th December 2006 and in the supervisory instructions of the Bank of Italy of 15th May 2007.
234 Glossary
- 60% in cases of a capital ratio 10% and > 11% with tier 1 ratio 6,5%;
- no limit in cases of a capital ratio 11% with tier 1 ratio 7%.
CPI (Credit Protection Insurance)
Credit protection insurance policies can be taken out by debtors of financial loans (personal loans, mortgages and credit card debt) to enable them (as policyholders) to pay the residual debt or a number of repayment instalments if temporary or permanent negative events occur (involuntary loss of employment, illness, accidents, permanent
invalidity or death). These policies can also be linked to loans to businesses with insurance cover for events which might affect shareholders, directors or key figures in a business. Credit crunch
Significant fall (or sudden tightening of conditions) in the supply of credit to businesses at the end of a prolonged expansionary period, capable of worsening the successive recessionary period. Credit Default Swap
Contract by which one party transfers, for a payment of a periodical premium to the other, a credit risk attached to a loan or a security when a determined event occurs linked to the deterioration in the solvency of the debtor. Credit risk
The risk of incurring losses resulting from the default of a counterparty with whom a position of credit exposure exists.
Cross selling A technique to increase customer loyalty by selling an integrated range of products and services.
Default A declared condition of being unable to honour debts and/or payment of the relative interest.
Duration When applied to a bond or bond portfolio, it is an indicator usually calculated as the average weighted maturities of the interest and capital payments associated with the instrument.
EAD (Exposure At Default) Estimate of the future value of a position at the time of default (cf. definition) of the relative debtor. e-MID (interbank deposits market)
Market for trading in interbank deposits on an electronic platform managed by e-MID Sim Spa. Eonia (Euro overnight index average) Interest rate calculated as the weighted average of overnight interest rates applied for all unsecured financing
transactions in the interbank market by the reference banks. Equity risk The risk of losses incurred in the equity investments portfolio that are not fully consolidated on a line-by-line basis.
Euribor (Euro interbank offered rate) Interbank interest rate at which major banks exchange deposits in euro with varying maturities. It is calculated each day as the simple average of the rates quoted at 11.00 a.m. on a sample of banks with a high credit rating selected
periodically by the European Banking Federation. Various floating rate loan contracts are linked to the Euribor rate (e.g. home mortgages). European Banking Authority (EBA)
Composed of representatives of the banking supervisory authorities of European Union member states, the EBA commenced operations on 1st January 2011, taking over the duties and responsibilities of the Committee of European Banking Supervisors (CEBS), which ceased to exist on that date. The EBA oversees the stability of the banking system, transparency on markets and for financial products and the protection of depositors and investors.
European Financial Stability Facility (EFSF) An instrument designed to provide temporary financial assistance to euro area countries in difficulty, following a
decision taken by the Council of the European Union on 9th May 2010, created in the legal form of a joint stock company with registered offices in Luxembourg. With the creation of the ESM (cf. definition), the new rescue programmes have been financed directly by the permanent mechanism since October 2012, while the EFSF is continuing to operate until it has received full repayment of the loans already granted before that date to Greece,
Portugal and Ireland. European Financial Stabilisation Mechanism (EFSM) An instrument designed to provide temporary financial assistance to euro area countries in difficulty, following a
decision taken by the Council of the European Union on 11th May 2010. Administered by the European Commission on behalf of the EU, the EFSM may grant loans up to a maximum of €60 billion. The funding transactions are backed by the EU budget. The EFSM will remain operational, according to the judgement of Commission, as long as the exceptional conditions which made its creation necessary persist.
European Insurance and Occupational Pensions Authority (EIOPA) Composed of representatives of the insurance and pension supervisory authorities of European Union member states, the EIOPA commenced operations on 1st January 2011, taking over the duties and responsibilities of the Committee of
235 Glossary
European Insurance and Occupational Pensions Supervisors (CEIOPS), which ceased to exist on that date. The EIOPA safeguards the stability of the financial system, transparency on markets and for financial products and the protection of insurance policy-holders and participants in and beneficiaries of pension schemes.
European Securities and Markets Authority (ESMA) Composed of representatives of the supervisory authorities of participants in the financial markets of European Union
member states, the ESMA commenced operations on 1st January 2011, taking over the duties and responsibilities of the Committee of European Securities Regulators (CESR), which ceased to exist on that date. The ESMA oversees the stability of the financial system, transparency on markets and for financial products and the protection of investors.
European Stability Mechanism (ESM) A permanent crisis management body established by a decision of the European Council on 28th-29th October 2010 and implemented in advance with the ratification of the Fiscal Treaty signed on 30th January 2012 by 25 of the 27 countries in the European Union. The ESM, which became operational in October 2012, is currently limited to
financing member countries. The assignment of powers to the ECB to supervise banks in the euro area will allow that organisation to intervene directly in the recapitalisation of banks.
Exchange Traded Fund (ETF)
A particular type of investment fund that is traded on stock markets like a share. Its sole investment objective is to track the index to which it is benchmarked by completely passive management. An ETF has the characteristics of both
a fund and a share, allowing investors to exploit the strong points of both instruments with the diversification and reduction of risk provided by funds, but guaranteeing the flexibility and transparency of information provided by trading in real time as a share at the same time.
Exchange Traded Commodities (ETC)
Financial instruments which represent the investment made by the issuer either in commodities (termed physically-backed ETCs in this case) or in commodities futures. The price of the ETC is therefore either directly or indirectly
linked to the performance of the underlying assets. Like ETFs (cf. definition), ETCs are traded on stock markets like shares, passively tracking the performance of commodities or of the benchmarks for them.
Factoring Contract for the sale, either without recourse (with the credit risk attaching to the purchaser) or with recourse (the
credit risk remains with the seller), of trade accounts receivable to banks or specialist companies, for management and cash receipt purposes, to which a loan to the seller may be associated. Fair value
The amount of consideration for which an asset can be exchanged, or a liability settled under free market conditions, between knowledgeable and willing parties. This is often the same as the market price. On the basis of IAS (cf. definition) banks apply fair value, when measuring the value of financial instruments (assets and liabilities) held for trading, available for sale and derivatives and they may also use it to measure the value of equity investments and
property, plant and equipment and intangible assets (with different impacts on the income statement for the different assets considered).
Financial Banking Arbitrator
The Financial Banking Arbitrator (FBA) is a body for the out-of-court settlement of disputes pursuant to the Art. 128-bis of the consolidated banking act, introduced by the Law on Savings (Law n. 262/2005). The organisation and
functioning of the FBA are regulated by the “Instructions concerning systems for the out-of-court settlement of disputes regarding banking and financial transactions and services” and subsequent amendments and additions issued by the Bank of Italy on 18th June 2009. Participation in the scheme is compulsory for all banks and other financial intermediaries.
The FBA has been operational since 15th October 2009. Disputes concerning the establishment of rights, obligations and powers may be submitted to it, independently of the amount on the account in question. If the request of the applicant concerns the payment of a sum for any reason whatsoever, the dispute falls within the jurisdiction of the FBA on condition that the amount requested is not greater than 100.000 euro.
Disputes concerning services and activities relating to investments and the sale of financial products and transactions and services that are components of financial products are excluded. Application may currently be made for these disputes to the Ombudsman Giurì Bancario of the Banking-Financial Conciliator (cf. definition) and to the Chamber of
Conciliation and Arbitration formed at the CONSOB (Italian securities market authority)3.
With the exception of cases where the application to the FBA is initiated by a Prefect (Chief of Police) 4, completion of the complaints procedures of the intermediary in question constitutes a preliminary and necessary condition for applying to the FBA, which may be performed in those cases where the outcome of the complaint made is unsatisfactory or when no reply has been made within thirty days of receipt by the bank.
3 With Resolution No. 16763 of 29th December 2008 the CONSOB (Italian securities market authority) approved the regulations to
implement Legislative Decree No. 179 of 8th October 2007, concerning the Chamber of Conciliation and Arbitration and the relative procedures. The chamber became fully operational in 2010 following approval of its constitution with Resolution No. 17204 of 4th
March 2010. All disputes concerning investment or collective asset management (mutual investment fund) services may be submitted to it by investors without limit on the amount, on condition that a complaint has been made to the intermediary.
4 With a measure of 13th November 2012, in order to implement the provisions of article 27-bis, paragraph 1 – quinquies of Decree Law No. 1/2012, converted with amendments by Law No. 27/2012 – the Bank of Italy established that the procedure of recourse to the
FBA may be initiated, when requested by a customer, by Prefects in relation to disputes concerning the failure to disburse, increase or revoke a loan, to the introduction of more severe conditions to the loan contract or to other conduct of a bank resulting from the
assessment of creditworthiness.
236 Glossary
Applications are free of charge except for a payment of 20 euro as a contribution to expenses for the procedure, which must be refunded by the bank to the applicant if the claim is either fully or partially successful. This contribution is not due if the procedure is initiated by a Prefect.
With a provision of 12th December 2011, the Bank of Italy modified the time limits on the jurisdiction of the FBA. This established that disputes relating to transactions or conduct prior to 1st January 2009 may no longer be submitted to the Arbitrator from 1st July 2012. As opposed to the conciliation procedure, which is designed to reach an agreement between the parties, the BFA
makes a decision on claims received by means of a special board of arbitration, while the parties retain the right to apply to the courts or to any other means provided for by law to protect their interests. The BFA consists of an arbitration body divided into three boards (Milan, Rome and Naples) and of a secretariat service provided by the Bank of Italy. Each arbitration board is composed of five members, three of whom (inclusive of
the president) designated by the Bank of Italy one by the associations of the intermediaries and one by associations representing customers.
Fiscal compact
Part of the Treaty on stability, coordination and governance in the Economic and Monetary Union, signed on 2nd March 2012 by all EU countries with the exception of the United Kingdom and the Czech Republic. It came into force
from 1st January 2013 for EU countries that had already ratified it. The fiscal compact obliges signatory countries to enact national legislation, preferably at constitutional level, containing a provision that requires the achievement and maintenance of a either a balanced budget or a structural deficit and a self-correcting mechanism should they deviate from it, drawn up on the basis of common principles proposed by the Commission. Structural deficits may not be
greater than 0.5% of GDP; they may reach 1% but only if the ratio of debt to GDP is well above 60% and if risks for the long-term sustainability of public accounts are limited. Fixed asset risk
The risk of changes in the value of the tangible fixed assets of the Group. Floor Derivatives contract on interest rates, traded outside regulated markets, with which a lower limit is set on the
reduction of the lending rate. FRA (Forward Rate Agreement) Contract whereby the parties agree to receive (pay) at the end of the contract, the difference between the amount
calculated by applying a set interest rate and the amount obtained on the basis of the level of a reference rate chosen beforehand by the parties. Funding
Acquisition in various forms of the funds required for the activities of a company or for particular financial operations. Future Standardised forward contracts with which the parties agree to exchange securities or goods at a set price on a future
date. These contracts are usually traded on organised markets where the execution of the contract is guaranteed. As opposed to options (cf. definition), which grant the right but not the obligation to buy, futures contracts oblige the two parties to sell or buy.
Geographical disaster recovery A set of technical and organisational procedures set in motion when a catastrophe occurs which causes the complete data processing platform to shut down. The objective is to reactivate EDP functions that are vital to the company at a secondary (recovery) site. A disaster recovery system is defined as “geographical” when it is located at least 50 km
from the original system. The primary objective is to mitigate risk arising from disaster events with a potential impact on an entire metropolitan area (i.e. earthquakes, floods, military intervention, etc.) as prescribed by international safety standards.
Goodwill This is the amount paid for the acquisition of an interest in a company which is the difference between the cost and the corresponding proportion of the shareholders’ equity, for that part that is not attributed to the assets of the company acquired.
Hedge fund A mutual investment fund which has the possibility (denied to traditional fund managers) of using sophisticated investment instruments or strategies, such as short selling, derivatives (options or futures, even up to more than
100% of the assets), hedging (hedging the portfolio against market volatility by short selling and the use of derivatives) and financial leverage (borrowing to then invest the money borrowed). IAS/IFRS
International accounting standards (IAS) set by the International Accounting Standards Board (IASB), a private sector international body set up in April 2001, to which the accounting professions of major countries belong, while the European Union, the IOSC (International Organisation of Securities Commissions) and the Basel Committee
participate as observers. This body has taken over from the International Accounting Standards Committee (IASC), formed in 1973 to promote the harmonisation of rules for preparing company accounts. When the IASC was transformed into the IASB, one decision taken was to term the new accounting standards “International Financial Reporting Standards” (IFRS).
An effort is currently being made at international level to harmonise IAS/IFRS with US Gaap (cf. definition).
237 Glossary
IBAN (International Bank Account Number) International standard used to identify bank accounts. The use of the IBAN code – composed of 27 characters – has been compulsory since 1st July 2008, not just for foreign payments but also for those made in Italy.
Identity access management A technical and organisational method used to manage and monitor the entire life cycle of granting, managing and revoking access privileges to ICT resources and therefore to company information by each user.
Impaired loans Loans at their face value to persons in situations of objective difficulty where, however, it is felt the difficulties can be overcome in an appropriate period of time.
Impairment tests Impairment tests consist of estimating the recoverable amount (i.e. the higher of its fair value less costs to sell and its value in use) of an asset or a group of assets. In accordance with IAS 36 the following must be tested for impairment
annually: - indefinite useful life intangible assets; - goodwill acquired in a business combination; - any asset, if there is an indication that it may have been subject to a lasting loss of value.
Index linked A life policy, the performance of which is linked to that of a reference parameter which could be a share index, a basket of securities or another indicator.
Institutional investors
These include the following: insurance companies, pension funds, OICVMs (cf. definition) and asset management companies. Intangible assets
Identifiable non-monetary assets with no physical substance. Interest rate risk Current or future risk of a change in net interest income and in the economic value of the Bank following unexpected
changes in interest rates which have an impact on the banking portfolio. Internal audit Function to which internal audit activity (cf. definition) is attributed institutionally.
Investment banking Investment banking is a highly specialist financial sector which assists companies and governments to issue securities and more generally to obtain funds on capital markets.
Investment grade High quality bonds which have received a medium-to-high rating (cf. definition) (e.g. not less than BBB on the Standard & Poor’s scale).
Investment property Property held for the purpose of receiving an income from it or to benefit from an increase in its value.
Investor Entity, other than the originator (cf. definition) and sponsor (cf. definition), which holds a position in a securitisation (cf. definition). IRB (Internal Rating Based) Approach
An internal rating (cf. definition) approach under Basel 2 (cf. definition), which consists of basic (FIRB) and advanced (AIRB) approaches. - FIRB (Foundation Internal Rating Based): under this basic, foundation, approach, banks use internal models to
estimate PDs, but use regulatory values, established by supervisory authorities, for LGD (cf. definition) and other
risk parameters; - AIRB (Advanced Internal Rating Based): under this advanced approach, which may only be used by banks which
satisfy minimum requirements that are more stringent than for the foundation approach, all estimates of inputs for the measurement of credit risk (PD, LGD, EAD, Maturity – cf. definitions) are carried out internally.
Joint venture Agreement between two or more companies to perform a determined economic activity usually by forming a joint stock company.
Junior In a securitisation (cf. definition), it is the most subordinated tranche of the securities issued, which is the first to meet
the losses that may be incurred in the recovery of the underlying assets. Leasing Contract by which one party (lessor) grants the use of an asset to the other party (lessee) for a determined period of
time. The asset is purchased by or constructed for the lessor on the instructions and as selected by the lessee, where
238 Glossary
the lessee has the right to purchase the ownership of the asset under preset conditions at the end of the leasing contract. Libor (London interbank offered rate) Interest rate calculated for each maturity, as the arithmetic average of the reported rates between the middle two quartiles of the interest rates at which a group of banks belonging to the British Bankers Association (BBA) are willing to make deposits in major currencies with primary customers. Liquidity Coverage Ratio (LCR)
This indicator is the ratio under stress conditions of high quality liquid assets to total net cash outflows calculated on the basis of certain scenario parameters. The ratio must not fall below 100%. It is designed to ensure that a bank maintains sufficient high quality liquid assets that are not pledged and which can be converted into cash to meet liquidity requirements over a period of 30 calendar days in a stress scenario. On the basis of an agreement reached by the Basel Committee on Banking Supervision on 6th January 2013, this ratio will be introduced from 1st January 2015, but the minimum ratio required will be set initially at 60% and will be progressively increased until it reaches 100% on 1st January 2018. Liquidity risk Risk of the failure to meet payment obligations which can be caused either by an inability to raise funds or by raising them at higher than market costs (funding liquidity risk), or the presence of restrictions on the ability to sell assets (market liquidity risk) with losses incurred on capital account. More specifically, structural liquidity risk is the risk resulting from a mismatch between the sources of funding and lending. Loss Given Default (LGD) Estimated rate of loss if a debtor defaults (cf. definition). Lower Tier 2 Subordinated liabilities which form part of the supplementary or tier 2 capital (cf definition) on condition that the contract governing their issue expressly stipulates that: a) in the case of liquidation of the issuer the debt will only be repaid after all the other higher ranking creditors have
been satisfied; b) the duration of the contract is equal to or longer than 5 years and, if a maturity date is not set, advance notice of
at least 5 years must be given prior to redemption; c) early repayment of the debt may only take place on the initiative of the issuer and must be authorised by the
Bank of Italy. The amount of subordinated bonds admissible as supplementary capital is reduced by one fifth each year over the five years prior to the maturity date of each bond in the absence of an amortisation plan which has similar effects. Loan To Value (LTV)
The ratio of the amount of a loan to the value of the asset for which the loan is requested or to the price paid by the debtor to acquire the property. The LTV ratio measures the size of the debtor’s own financial resources used to purchase an asset with respect to the value of the asset mortgaged for the loan. The higher the LTV ratio, the lower the value of the debtor’s own financial resources used to purchase the asset, and as a consequence the lower the protection afforded to the creditor. Mark down Difference between the average borrowing rate for the direct forms of funding employed and the Euribor rate. Mark to market Valuation of a securities portfolio and of other financial instruments on the basis of market prices. Mark up Difference between the average lending rate for the forms of lending employed and the Euribor rate. Market risk The risk of changes in the market value of positions in the trading portfolio for supervisory purposes due to unexpected changes in market conditions and in the credit rating of the issuer. It also includes risks resulting from unexpected changes in foreign exchange rates and commodities prices which relate to all balance sheet items. Maturity Residual life of an exposure, calculated according to rules of prudence.
Net Stable Funding Ratio (NSFR)
This is the ratio between available stable funding and required stable funding. This ratio, which will come into force on 1st January 2018, must be greater than 100%. The ratio establishes a minimum acceptable level of stable funding based on the liquidity of a bank’s assets and its transactions over a time horizon of one year. Merchant banking This activity includes: the acquisition of securities, equities or debt, of corporate customers for subsequent sale on the market; the acquisition of equity interests of a more permanent nature, but again with the objective of subsequent sale; advisory activities to companies for mergers and acquisitions or restructuring.
239 Glossary
Mezzanine In a securitisation (cf. definition) it is the tranche with an intermediate level of subordination between that of the junior (cf. definition) tranche and that of the senior (cf. definition) tranche.
New MIC (New collateralised interbank market) A market segment of the e-MID platform (cf. definition) in which interbank deposits are traded on an anonymous basis and guaranteed against credit risk, which started operating on 11th October 2010 as a development of the MIC
(collateralised interbank market), which ceased to operate on that same date. The MIC (collateralised interbank market) was introduced on 2nd February 2009 by the Bank of Italy in order to encourage a recovery in interbank business and greater variety in the maturities of the contracts. As compared to the MIC, apart from the changeover in the management of collateral from the Bank of Italy to the Cassa di Compensazione e Garanzia (cf. definition), longer
maturities are traded on the New MIC, trading hours are longer and limits are set on the securities accepted as collateral.
Monoline Insurance companies with one single line of business, which is financial insurance. Their activities include the insurance of bonds (ABS and MBS) for which the underlying assets consist of personal loans and property mortgage loans. The insurance guarantees the redemption of the bond by assuming direct responsibility for the risk of debtor
insolvency in exchange for a commission. Non performing A term which refers generally to loans with irregularities in the repayments.
Non performing loans Loans to persons or entities that are either insolvent (even if not declared as such in the courts) or in equivalent circumstances.
NUTS (Nomenclature of Territorial Units for Statistics in Italy) Nomenclature used for statistics purposes at European level (Eurostat), which involves the following division. Northern Italy: Piedmont, Valle d’Aosta, Liguria, Lombardy, Trentino Alto Adige, Veneto, Friuli Venezia
Giulia, Emilia Romagna; Central Italy: Tuscany, Umbria, Marches, Latium; Southern Italy: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sicily, Sardinia.
OICR (collective investment instrument) This term includes OICVMs (cf. definition) and other mutual investment funds (property mutual investment funds, closed mutual investment funds).
OICVM (collective equity security investment organisations) The term includes open, Italian and foreign mutual investment funds and investment companies with variable capital (Sicavs).
Operational risk The risk of loss resulting from inadequate or failed procedures, human resources and internal systems or from exogenous events. This type of risk includes losses resulting from fraud, human error, business disruption, system
failure, non performance of contracts and natural disasters. It includes legal risk. Options These consist of the right, but not a commitment, acquired with the payment of a premium, to purchase (call option)
or to sell (put option) a financial instrument at a determined price (strike price) before (American option) or on (European option) a future date. Originator
Entity which transfers its portfolio of deferred liquidity assets to an SPE (cf. definition) for it to be securitised. OTC (Over The Counter)
Transactions concluded directly between parties without the use of a regulated market. OTC derivatives traded with customers Activity to support customers in managing financial risks and more specifically in managing risks resulting from
fluctuations in exchange rates, interest rates and commodity (raw materials) prices.
Outsourcing
Recourse to operational support provided by outside companies. Past due
From 1st January 2012 this category includes loans and receivables past due and/or in arrears which satisfy both the following conditions:
- the debtor is in arrears on a significant credit obligation to a bank or banking group for over 90 consecutive days, where the exposures regard loans to individuals and SMEs, loans to nonprofit organisations and public sector authorities and loans to business other than SMEs (the term of 90 days was already in force for exposures other than those indicated and for exposures secured by real estate property);
- the significant threshold is 5% of the exposure, where the significant threshold is defined as the higher of the
following two amounts: the average of the repayments past due and/or in arrears as a percentage of the entire exposure measured on a daily basis in the preceding quarter; the repayments past due and/or in arrears as a
240 Glossary
percentage of the entire exposure measured on the date reported (the latter significance ratio does not apply to exposures secured by real estate).
Payout ratio The percentage of the net profit distributed by a company to its shareholders. PD (Probability of Default)
The probability that a debtor will reach a default (cf. definition) position over an annual time horizon. Plain vanilla swap Interest rate swap (cf. definition) in which one counterparty receives a variable payment linked to the LIBOR (generally
the six month LIBOR) and pays a fixed rate to the other counterparty, obtained by adding a spread to the yield on a specified type of government security.
Pooled financing (syndicated loans)
Loans organised and guaranteed by a consortium of banks and other financial institutions.
POS terminal (point of sale terminals) Automatic device for the payment of goods or services at suppliers premises using credit, debit or prepaid cards. Preference shares
Securities associated with remuneration linked to market rates characteristic of particularly junior subordination: for example, the non recovery of interest in subsequent years of interest not paid by the bank and sharing in the losses of the bank in the event of a substantial reduction in the capital requirements. Supervisory regulations set the conditions under which preference shares can be included in the tier one capital of banks and banking groups.
Price sensitive A term which generally refers to information or data that is not in the public domain, which if disclosed would have a marked effect on the price of a security.
Pricing This refers generally to procedures followed to determine the returns and/or costs of products and services provided by the Bank.
Private equity Activities involving the acquisition of equity interests and the subsequent placement with specific counterparties without offering them for sale to the public.
Project finance Financing of projects on the basis of forecasts of the cash flows that will be generated by them. As opposed to the way in which risks are analysed with ordinary lending, with the project financing technique, not only are the expected cash
flows analysed, but specific factors are also examined such as the technical aspects of the project, the suitability of the sponsors for carrying it out and the markets on which the products will be sold. Rating
A rating of the quality of a company or its issues of debt securities on the basis of the soundness of the company’s finances and its prospects. Regulatory capital
It is calculated as the algebraic sum of a series of positive and negative items, which are considered eligible for inclusion – with or without limitations - in relation to the ‘quality’ of the capital. The amount of those items is considered net of any tax expenses. Positive components of the capital must be fully available to the Bank, so that they can be used without restrictions to cover risks to which the intermediary is exposed.
Regulatory capital is composed of tier one capital (cf definition) and the supplementary capital (tier two, cf. definition), net of “prudential filters” 5 and some deductions. Reputation risk
The risk of incurring losses resulting from a negative perception of the image of the Bank by customers, counterparties, shareholders of the Bank, investors, the supervisory authority or other stakeholders. Residual risk
The risk of incurring losses resulting from the unforeseen ineffectiveness of established methods of mitigating risk used by the Bank (e.g. mortgage collateral). Restructured loan
Position for which a Bank has agreed a longer period of repayment for a debtor, renegotiating the exposure at lower than market rates.
ROE (Return On Equity)
This is the income earned on equity in terms of profit after tax. Together with ROTE (cf. definition) it constitutes the indicator of greatest interest to shareholders because it gives a measure of the profitability of risk capital.
5 Prudent filters are corrections made to equity items in the balance sheet made to safeguard the quality of the regulatory capital and
to reduce potential volatility induced by the application of IFRS.
241 Glossary
ROTE (Return On Tangible Equity)
This is the return on equity net of intangible assets. Risk free rate
Rate of interest on a risk free asset. In practice it is used to refer to the interest rate on short term government securities even if they cannot be considered risk free. Risks resulting from securitisations
The risk that the underlying economic substance of a securitisation is not fully reflected in decisions made to measure and manage risk. Risk weighted assets (RWA)
On- and off-balance sheet assets classified and weighted on the basis of risk coefficients, in accordance with banking regulations issued by the supervisory authority for the calculation of capital ratios. Securitisation
Operation to sell debts or other financial assets that are not negotiable instruments to a special purpose entity (SPE – cf. definition) whose sole business is to perform those operations and to convert those loans or assets into securities traded on secondary markets.
Senior In a securitisation transaction (cf. definition) it is the tranche with the highest level of privilege in terms of priority for
remuneration and repayment.
Sensitivity analysis System of analysis designed to detect the sensitivity of determined assets or liabilities to changes in interest rates and other reference parameters.
SEPA (Single European Payments Area) The Single Euro Payments Area came into force on 1st January 2008, within which payments will gradually be able to be made and received in euro under the same standard basic conditions, rights and obligations. A total of 32 European countries have joined (in addition to the 286 countries of the European Union, also Switzerland, Norway,
Iceland, Liechtenstein and the Principality of Monaco). The introduction of the new IBAN (cf. definition) bank code is one of the instruments used to standardise banking transactions. Servicer
In securitisation (cf. definition) transactions, it is a company which continues to manage the debts or assets subject to securitisation on the basis of a special servicing contract after they have been sold to the special purpose entity responsible for issuing the securities.
Side pocket
This is a measure to protect all the participants in a hedge fund (cf. definition), which is only employed in “exceptional circumstance” when a sudden reduction in the liquidity of the assets held in the portfolios of the funds, associated with high demand for the redemption of units held, can have negative consequences for the management of the funds themselves. In order to avoid compromising the interests of the participants in a hedge fund in cases where
it is necessary to sell illiquid assets in the absence of a market which would ensure reliable prices, the creation of a “side pocket” allows illiquid assets to be transferred to a specially created closed mutual investment fund (i.e. a closed side pocket fund). The operation is performed by partially splitting the hedge fund, after which the liquid assets continue to be held by
the fund itself, while the illiquid assets are transferred to the closed side pocket fund. The smaller, but liquid, hedge fund continues to perform its activities according to the investment policies set in the management regulations, while the closed side pocket fund (which cannot issue new units) is managed with a view to selling the illiquid assets held,
proceeding to redemptions of the units as the assets are gradually liquidated.
SMEs (small and medium-sized enterprises) According to the definition in EU regulations, small and medium-sized enterprises are considered entities which carry on a business and regardless of their legal status employ fewer than 250 persons, with an annual turnover of not more than 50 million euro or with total assets of less than 43 million euro.
SGR asset management company ( Società di Gestione del Risparmio)
Joint stock companies which are authorised to provide management services for both individually and collectively owned assets. More specifically, these companies are authorised to set up mutual investment funds, to manage mutual investment funds that either they or others have formed, to manage Sicav funds and to provide individual customer portfolio management services.
SPE/SPV Special purpose entities (SPE) or special purpose vehicles (SPV) – also known as conduits - are entities (companies, trusts or other entities), specially formed to achieve a determined objective that is well-defined and circumscribed, or
to perform a specific operation. SPEs/SPVs have a legal status that is independent from the others involved in the operation and generally have no operating or management units of their own.
6 Since 1st July 2013, following its entrance into the European Union, Croatia also forms part of SEPA.
242 Glossary
Sponsor Entity, other than the originator (cf. definition), which establishes and manages a conduit entity (cf. definition), as part of a securitisation transaction (cf. definition).
Spread This term normally refers to: - the difference between two interest rates;
- the difference between the buying (bid) price and the selling (asking) price in securities trading; - the premium that the issuer of securities recognises in addition to a reference rate.
Staff leasing contract (Contratto di somministrazione di lavoro)
A fixed term labour contract regulated by Legislative Decree No. 276 of 10th September 2003 (the “Biagi Law” based on Law No. 30 of 14th February 2003), whereby a legal entity uses the services of a worker employed by a staff leasing
agency authorised by the Ministry of Labour. The relations between the user company and the leasing agency are governed by a staff leasing contract which also regulates wages and social security contributions. This form of contract replaced those which governed temporary agency work regulated by Law No. 196 of 24th June 1997 (the “Treu reform”).
Stakeholder Individuals or groups who have specific interests in an enterprise either because they depend upon it to achieve their
goals or because they are considerably effected by the positive or negative effects of its activities. Stand-Still agreements Agreements designed to allow borrowers in situations of temporary financial difficulty to freeze existing credit lines,
while resolving the original cause of the difficulty or until a formula for full debt restructuring and a new business plan is drawn up. Stock Options
Term used to refer to options offered to the managers of a company which allow them to purchase shares in the company at a set price. Strategic risk
Current or future risk of a fall in profits or in capital resulting from: - changes in the operating context; - inadequate implementation of decisions; - failure to react to change in a competitive environment.
Stress test A simulation procedure used to assess the impact of “extreme”, but plausible, market scenarios on the Bank’s exposure to risk.
Structured notes Bonds for which the interest and/or the redemption value depend on a real parameter (linked to the price of a commodity) or the performance of indices. In these cases the implicit option is unbundled from the host contract in
the accounts. When it is linked to interest rates or inflation (e.g. CCTs – Treasury Certificates of Credit), the implicit option is not unbundled from the host contract in the accounts.
Subordinated bonds Financial instruments for which the conditions of sale state that the bearers of the debt certificates are satisfied after other creditors if the issuing entity goes into liquidation.
Subprime mortgages The concept of subprime does not refer to the loan in itself, but rather to the borrower. Technically it refers to a borrower who does not have a fully positive credit history, because characterised by negative lending events such as for example the presence of repayments on previous loans not made, of cheques without funds and/or protested and
so on. These past events are symptomatic of a greater intrinsic riskiness of counterparties from whom a corresponding higher remuneration is requested by the lender who grants them a mortgage. Business with subprime customers developed in the American financial market where the grant of these loans was usually accompanied by securitisation activity and the issue of securities.
Alt-A mortgage loans are defined as loans granted on the basis of incomplete or inadequate information. Subrogation A procedure by which a mortgage borrower negotiates a new mortgage with another bank to pay-off the original
mortgage by transferring the pledge of the same security (the mortgage on the property) which applied to the “original” bank to the new bank. Swaps (interest rate swaps and currency swaps)
A transaction consisting of the exchange of cash flows between counterparties according to contracted conditions. With an interest rate swap the counterparties exchange the interest payments calculated on notional reference capital on the basis of different criteria (e.g. one counterparty pays a fixed rate and the other a variable rate). In the case of
currency swaps, the counterparties exchange specific amounts of two different currencies, returning them over time according to set conditions which concern both the principal and the interest.
243 Glossary
Tankan index An indicator of the performance of the Japanese economy constructed on the basis of the results of a survey conducted by the Bank of Japan in the last month of each quarter. The survey is on both manufacturing and services
sectors, segmented according to the size of the businesses (large, medium or small).
Tax rate
The effective tax rate, obtained as the ratio of income tax to pre-tax profit.
Tier 1 capital
This includes paid up share capital, share premiums, reserves (considered prime quality items), non innovative instruments (not present in the UBI Group) and innovative equity instruments, profit for the period, net of the part available for distribution as dividends and other forms of distribution, positive prudent filters of tier one capital and
instruments subject to transition provisions (grandfathering). Treasury shares held in portfolio, goodwill, other intangible fixed assets, prior and current year losses, other negative items and negative prudent filters for tier one capital (termed negative elements of tier one capital) are deducted from those elements (termed positive elements of tier one capital). The algebraic sum of the positive and negative components of the tier one capital constitutes the “tier
one capital before items to be deducted”. The tier one capital is constituted by the difference between the “tier one capital before items to be deducted” and “items to be deducted from tier one capital”. Tier 2 (supplementary capital)
This comprises – with some limits on eligibility for inclusion – the fair value reserves, non innovative and innovative
equity instruments not included in the tier one capital, hybrid capital instruments, tier two subordinated liabilities, (the amount is reduced by one fifth during the five years prior to maturity, in the absence of an amortisation schedule which produces similar effects) other positive elements and positive prudent filters of supplementary capital (termed positive elements of tier two capital). Other negative items and negative tier two prudent filters (termed negative
elements of tier two capital) are deducted from the total of those items. Tier 3 (third level subordinated debt) Subordinated bonds that satisfy the following conditions:
- they have been fully paid; - they do not form part of the supplementary capital (cf. definition); - they have an original life equal to or longer than two years; if the maturity is not set, the advance notice of the
maturity must be at least two years;
- they meet the conditions specified for similar liabilities included in the supplementary capital except of course those concerning the life of the debt;
- they are subject to a “lock in” clause according to which the capital and the interest cannot be repaid if the repayment reduces the total amount of the bank’s capital to a level lower than 100% of the total capital
requirements. Until 31st December 2013, capital items that fall within the Tier 3 capital (Tier 3 issues and excesses that do not qualify for Tier 2) can be used to cover capital requirements on market risks – but not including capital requirements to meet counterparty risk and regulatory risk relating to the “trading portfolio for supervisory purposes” – up to a limit
of 71.4% of those requirements. Total capital ratio
A capital ratio calculated on all items of which regulatory capital is composed (tier one and tier two capital).
Trading book This usually identifies that part of a securities portfolio, or in any case financial instruments in general, destined to trading activities.
Trading on line System for buying and selling financial instruments on the stock exchange via Internet. Trigger event
A contractually predefined event, which determines the creation of rights in favour of the parties to the contract when it occurs. TROR (total rate of return swap)
This is a contract with which a “protection buyer” (also known as a “total return payer”) agrees to pay all the cash flows generated by a “reference obligation” to a “protection seller” (also know as the total return receiver), who in return transfers the cash flows linked to the performance of a “reference rate” to the “protection buyer”. On the dates on which the coupons for the cash flows are paid (or at the end of the contract), the “total return payer” pays the “total
return receiver” any increase there may be in the “reference obligation”; if, on the other hand the “reference obligation” has decreased then it is the “total return receiver” who pays the relative amount to the “total return payer”. A TROR is in actual fact a structured financial product consisting of a combination of a credit derivative and an interest rate swap (cf. definition).
Unit-linked Life insurance policies with performance linked to the value of investment funds.
Upper Tier 2
Hybrid capitalisation instruments which, until 31st December 2013, form part of the supplementary or Tier 2 capital (cf. definition) when the contract specifies that:
244 Glossary
a) if there are losses in the accounts which cause a decrease in the capital paid in and in the reserves below the minimum level required for the authorisation to operate as a bank, the sums from those liabilities and the interest accruing on them can be used to replenish the losses, in order to allow the issuing entity to continue its business;
b) if operating performance is negative, the right to remuneration can be suspended by that amount needed to prevent or limit the occurrence of losses as much as possible;
c) in the case of liquidation of the issuer, the debt will only be repaid after all the other higher ranking creditors have been satisfied;
Non irredeemable hybrid capitalisation instruments must have a life equal to or longer than ten years. There must be a specific clause in the contract stating that repayment is dependent on Bank of Italy authorisation. US GAAP (Generally Accepted Accounting Principles)
Accounting standards issued by the FASB (Financial Accounting Statement Board), which are generally accepted in the United States of America. VaR (Value at Risk)
A measure of the maximum potential loss that may be incurred on a financial instrument or portfolio with a set probability (level of confidence) in a determined time period (the reference or holding period). Warrant
Negotiable instrument which grants the holder the right to purchase fixed rate securities or shares from the issuer or sell them to the issuer under precise conditions. Zero-coupon
Bonds which do not pay an interest coupon, where the yield is given by the difference between the issue (or purchase) price and the redemption price.
Gruppo UBI Banca 1
BRANCH NETWORK OF THE UBI BANCA GROUP
www.ubibanca.it
Bergamo Via Crispi, 4 Via Stoppani, 15Brescia Via Cefalonia, 74Milano Corso Europa, 16
www.bpb.it
LoMBardia
Provincia di BergamoBergamo Piazza Vittorio Veneto, 8 Via dei Caniana, 2 (c/o Università) Via Borgo Palazzo, 51 Via Borgo Santa Caterina, 6 Via Gombito, 6 Via Borgo Palazzo, 135 Via Gleno, 49 Via Mattioli, 69 Piazza Risorgimento, 15 Piazza Pontida, 39 Via Corridoni, 56 Via San Bernardino, 96 Via Brigata Lupi, 2 Via Stezzano, 87 (c/o Kilometrorosso)adrara San Martino Via Madaschi, 103adrara San rocco P.zza Papa Giovanni XXIII, 6albano Sant’alessandro Via Cavour, 2albino Via Mazzini, 181 Via Lunga, 1 (Fraz. Fiobbio)almè Via Torre d’Oro, 2almenno San Bartolomeo Via Falcone, 2almenno San Salvatore Via Marconi, 3alzano Lombardo Piazza Garibaldi, 3arcene Corso Europa, 7ardesio Via Locatelli, 8azzano San Paolo Piazza IV Novembre, 4Bagnatica Via Marconi, 6 EBariano Via A. Locatelli, 12Barzana Via San RoccoBerbenno Via Stoppani, 102 (Fraz. Ponte Giurino) Piazza Roma, 2Boltiere Piazza IV Novembre, 14Bonate Sopra Piazza Vittorio Emanuele II, 20Bossico Via Capitan Rodari, 2Brembilla Via Libertà, 25Brignano Gera d’adda Via Mons. Donini, 2Calcinate Via Coclino, 8/cCalcio Via Papa Giovanni XXIII, 153Calusco d’adda Via Vittorio Emanuele II, 7Camerata Cornello Via Orbrembo, 23Capriate San Gervasio Via Trieste, 46
Caprino Bergamasco Via Roma, 10Caravaggio Piazza G. Garibaldi, 1Carvico Via Europa Unita, 3Casazza Via Nazionale del Tonale, 92Casirate d’adda Piazza Papa Giovanni XXIII, 1Castione della Presolana Via Donizetti, 2 (Fraz. Bratto - Dorga) Via A. Manzoni, 20Cazzano Sant’andrea Via A. Tacchini, 18Cenate Sopra Via Giovanni XXIII, 16Cenate Sotto Via Verdi, 5Cene Via Vittorio Veneto, 9Cerete Via Moscheni, 44 (Fraz. Cerete Basso)Chiuduno Via Cesare Battisti, 1Cisano Bergamasco Via Pascoli, 1Ciserano Via Borgo San Marco ang. Via Garibaldi, 7 (Fraz. Zingonia)Cividate al Piano Via Papa Giovanni XXIII, 3Clusone Via Verdi, 3Colere Via Tortola, 58 Via Papa Giovanni XXIII, 33 (Fraz. Dezzo di Scalve)Comun Nuovo Via Cesare Battisti, 5Costa Volpino Via Nazionale, 150Curno Largo Vittoria, 31dalmine Via Buttaro, 2 P.zza Caduti 6 luglio 1944 (c/o Tenaris Spa)dossena Via Carale, 9Entratico Piazza Aldo Moro, 18Fontanella Via Cavour, 156Foresto Sparso Via Tremellini, 63Gandino Via C. Battisti, 5Gazzaniga Via Marconi, 14Gorlago Piazza Gregis, 12Gorle Piazzetta del Donatore, 5Grassobbio Viale Europa, 8/bGrumello del Monte Via Martiri della Libertà, 10Leffe Via Mosconi, 1Lovere Via Tadini, 30Lovere-Lovere Sidermeccanica Spa Via Paglia, 45Madone Via Papa Giovanni XXIII, 44Mapello Piazza del Dordo, 5Martinengo Via Pinetti, 20Monasterolo del Castello Via Monte Grappa, 27Nembro Piazza della Libertàonore Via Sant’Antonio, 98orio al Serio Via Aeroporto, 13osio Sopra Via XXV Aprile, 29osio Sotto Via Cavour, 2Paladina Via IV Novembre, 13Palosco Piazza A. Manzoni, 16Parre Via Duca d’Aosta, 20/aPiario Via Mazzini, 1/aPiazza Brembana Via B. Belotti, 10Ponte Nossa Via Frua, 24Ponteranica Via Pontesecco, 32Ponte San Pietro Piazza SS Pietro e Paolo, 19Pontida Via Lega Lombarda, 161Presezzo Via Capersegno, 28ranica Piazza Europa, 2riva di Solto Via Porto, 24romano di Lombardia Via Tadini, 2
roncola Via Roma, 10rota imagna Via Calchera, 1rovetta Via Tosi, 13San Giovanni Bianco Via Martiri di Cantiglio, 19San Pellegrino Terme Via S. Carlo, 3Sant’omobono Terme Viale alle Fonti, 8Sarnico Piazza Umberto IScanzorosciate Via Roma, 27 Via Collina Alta, 3 (Fraz. Tribulina)Schilpario Via Torri, 8Sedrina Via Roma, 14Selvino Via Monte Rosa - angolo Via BetulleSeriate Viale Italia, 24Songavazzo Via Vittorio VenetoSovere Via Roma, 36Spirano Via Dante, 9/bStezzano Via Bergamo, 1Suisio Via Carabello Poma, 31Taleggio Via Roma, 837 (Fraz. Olda)Tavernola Bergamasca Via Roma, 12Telgate Via Morenghi, 17Torre Boldone Via Carducci, 12Torre de roveri Piazza Conte Sforza, 3Trescore Balneario Via Locatelli, 45Treviglio Viale Filagno, 11Ubiale Clanezzo Via Papa Giovanni XXIII, 1Urgnano Via Matteotti, 157Valbrembo Via J.F.Kennedy, 1BVerdello Via Castello, 31Vertova Via S. Rocco, 45Viadanica Via Pietra, 4Vigolo Via Roma, 8Villa d’adda Via Fossa, 8Villa d’almè Via Roma - ang. Via Locatelli, 1Villongo Via Bellini, 20Vilminore di Scalve Piazza Giovanni XXIII, 2Zandobbio Via G. Verdi, 2Zogno Viale Martiri della Libertà, 1
Provincia di Brescia Brescia Via Gramsci, 39Chiari Via Bettolini, 6Concesio Viale Europa, 183darfo Boario Terme Piazza Col. Lorenzini, 6desenzano del Garda Viale Andreis, 74Esine Via Manzoni, 97Manerbio Via Dante, 5orzinuovi Piazza Vittorio Emanuele II, 31/33ospitaletto Via Martiri della Libertà, 27Palazzolo sull’oglio Piazza Roma, 1Paratico Via Don G. Moioli, 17rezzato Via Europa, 5San Paolo Via Mazzini, 62San Zeno Naviglio Via Tito Speri, 1
Provincia di ComoComo Via Giovio, 4 Via Badone, 48 (Fraz. Camerlata) Via Gallio - ang. Via Bossi Via Cattaneo, 3 Viale Giulio Cesare, 26/28
articolazione territoriale del Gruppo UBi Banca
Cantù Piazza Marconi, 9 Via Enrico Toti, 1/a (Fraz. Vighizzolo)Casnate con Bernate S.S. dei Giovi, 5Cermenate Via Matteotti, 28Erba Via Leopardi, 7/e Via Mazzini, 12Guanzate Via Roma, 24Lomazzo Via Monte Generoso, 11Lurago d'Erba Via Manara, 4Lurate Caccivio Via Varesina, 88olgiate Comasco Via Roma, 75oltrona San Mamette Piazza Europa, 6Mariano Comense Corso Brianza, 20 Viale Lombardia, 54-54/arovellasca Via Volta, 1
Provincia di LeccoLecco Corso Matteotti, 3 Piazza Alessandro Manzoni, 16 Via Amendola, 6Bulciago Via Don Canali, 33/35Calco Via Italia, 8Calolziocorte Piazza Vittorio Veneto, 18/aCarenno Via Roma, 36Casatenovo Via G. Mameli, 16Cernusco Lombardone Via S. Caterina, 4Costa Masnaga Via Cadorna, 18Merate Via Alessandro Manzoni, 56Monte Marenzo Piazza Municipale, 5olginate Via S. Agnese, 38Valmadrera Via Fatebenefratelli, 23
Provincia di MilanoMilano Via Manzoni, 7 Piazza Cinque Giornate, 1 Via Foppa, 26 Corso Italia, 22 Via Richard, 5 (c/o Nestlè Spa)Cassano d’adda Via Milano, 14Cornaredo Via Tolomeo, 1 (c/o St Microelectronics Spa)Grezzago Piazza Aldo MoroTrezzo sull’adda Via A. Sala, 11Vaprio d’adda Piazza Caduti, 2
Provincia di Monza-BrianzaMonza Via Borgazzi, 83 Piazza Giuseppe Cambiaghi, 1 Via San Rocco, 44 Via Boito, 70 Via Vittor Pisani, 2 Via Manzoni, 22/30 Via Carlo Rota, 50 Piazza Duomo, 5agrate Brianza Via C. Olivetti, 2 (c/o St Microelectronics Spa) Via Marco d’Agrate, 61arcore Via Casati, 45Bernareggio Via Prinetti, 43Biassono Via Libertà, 1Brugherio Via de Gasperi, 58/62/64Carate Brianza Via Cusani, 49/51Carnate Via Don MinzoniCesano Maderno Via Conciliazione, 29 (Fraz. Binzago)Concorezzo Via Monza, 33 (Alcatel Italia Spa)
Cornate d’adda Via Circonvallazione, 10/12/14 Via Silvio Pellico, 10 (Fraz. Colnago)desio Via Matteotti, 10Giussano Via IV Novembre, 80 (Fraz. Brugazzo)Limbiate Via dei Mille, 32Lissone Via San Carlo, 4Meda Via Indipendenza, 111Mezzago Via Concordia, 22Muggiò Via Cavour, 11/15Nova Milanese Via Brodolini, 1Seregno Via S. Vitale, 17 Via Medici da Seregno, 29/31Sulbiate Via Mattavelli, 2Vedano al Lambro Largo della Repubblica, 7Villasanta Via Confalonieri, 1Vimercate Via B. Cremagnani, 20/a Via Torri Bianche, 3 Via Giuseppe Mazzini, 72 Via Trento, 30 (c/o Alcatel - Lucent Spa)
Provincia di VareseVarese Via Vittorio Veneto, 2 Via Dalmazia, 63 Piazza IV Novembre,1 (Fraz. Biumo Inferiore) Via Valle Venosta, 4 (Fraz. Biumo Inferiore - c/o Ascom Varese) Viale Luigi Borri, 155 Viale Borri, 237 (c/o Bassani Ticino Spa) Via Pasubio, 2 Via Caracciolo, 24 Via Virgilio, 27 Piazza Battistero, 2 Via S. Sanvito, 55 angera Via M. Greppi, 33azzate Via Vittorio Veneto, 23Besozzo Via XXV Aprile, 77 Biandronno Piazza Cavour, sncBisuschio Via Mazzini, 28Bodio Lomnago Via Risorgimento, 23Busto arsizio Piazza S. Giovanni, 3/a Corso Italia, 54 Via Magenta, 64 Viale Alfieri, 26 Viale Cadorna, 4 - Via Cattaneo, 9 Via Foscolo, 10Cairate Via Mazzini, 13 Via Genova, 1 (Fraz. Bolladello)Cantello Via Turconi, 1Caravate Via XX Settembre, 22Cardano al Campo Via Gerolamo da Cardano, 19Caronno Pertusella Via Roma, 190Casale Litta Via Roma, 4Casorate Sempione Via Milano, 17Cassano Magnago Via Aldo Moro, 6Castellanza Piazza Soldini (c/o Libero Istituto Universitario Carlo Cattaneo)Castelseprio Via San Giuseppe, 14Castiglione olona Via Papa Celestino, 22 Via Cesare Battisti, 13Castronno Via Roma, 51Cavaria con Premezzo Via Scipione Ronchetti, 1318Cislago Via IV Novembre, 250Cittiglio Via Valcuvia, 19
Clivio Via Ermizada, 10Comerio Via al Lago, 2Cunardo Via Luinese, 1/aCuveglio Via Battaglia di S. Martino, 50Cuvio Via Giuseppe Maggi, 20daverio Via Giovanni XXIII, 1Fagnano olona Piazza Cavour, 11Ferno Piazza Dante Alighieri, 7Gallarate Via A. Manzoni, 12 Via Buonarroti, 20 Via Marsala, 34 Via Varese, 7/a (Fraz. Cascinetta) Via Raffaello Sanzio, 2 Piazzale Europa, 2Gavirate Piazza della Libertà, 2Gazzada Schianno Via Roma, 47/bGemonio Via Giuseppe Verdi, 24Gerenzano Via G.P. Clerici, 124Germignaga Piazza XX Settembre, 51Gorla Maggiore Via Verdi, 2Gornate olona Piazza Parrocchetti, 1induno olona Via Porro, 46ispra Via Mazzini, 59Jerago con orago Via Matteotti, 6Laveno Mombello Via Labiena, 53Laveno Ponte Tresa Piazza A. Gramsci, 8 (Fraz. Ponte Tresa)Leggiuno Via Bernardoni, 9Lonate Ceppino Via Don Albertario, 3Lonate Pozzolo Piazza Mazzini, 2Lozza Piazza Roma, 1Luino Via Piero Chiara, 7Malnate P.zza Repubblica - ang. Via GaribaldiMaccagno Viale Garibaldi, 13Marchirolo Strada Statale 233, 27Marnate Via Diaz, 12 - angolo Via GenovaMercallo Via Prandoni, 1Mesenzana Via Provinciale, 11Monvalle Piazza Marconi, 1Mornago Via Cellini, 3 - angolo Via Carugoolgiate olona Via G. Mazzini, 56origgio Via Repubblica, 10 S.S. Varesina, 233 (c/o Novartis Italia Spa)Porto Ceresio Via Roma, 2Porto Valtravaglia Piazza Imbarcadero, 17Saltrio Via Cavour, 27Samarate Via N. Locarno, 19 (Fraz. Verghera)Saronno Via P. Micca, 10 Via Roma, 85 Via Giuseppe Garibaldi, 5 Piazza Borella, 4Sesto Calende Via XX Settembre, 35 Solbiate arno Via A. Agnelli, 7Somma Lombardo Corso della Repubblica - ang. Via RebagliaSumirago Via Brioschi, 2Ternate Piazza Libertà, 14Tradate Via XXV Aprile, 1 angolo Corso Ing. Bernacchi Via Vittorio Veneto, 77 (Fraz. Abbiate Guazzone)Travedona Monate Via Roma, 1Uboldo Via R. Sanzio, 46Varano Borghi Via Vittorio Veneto, 6Vedano olona Piazza S. Rocco, 8Venegono inferiore Via Mauceri, 16Venegono Superiore Piazza Monte Grappa, 8Viggiù Via A. Castagna, 1
LaZio
Provincia di romaroma Via dei Crociferi, 44 Corso Vittorio Emanuele II, 295 Via S. Silverio, 57 Largo Salinari, 24 - ang. Via B. Croce 82/84 Viale Gorizia, 34 Via di Porta Castello, 32 Via Val Maira, 125/131 Via Tiburtina, 604 Via dell’Aeroporto, 14/16 Via Pietro Boccanelli, 30 (c/o Sviluppo Italia Spa - Campo Elba) Via Calabria, 46 (c/o Sviluppo Italia Spa) Via Gattamelata, 109 Via Donna Olimpia, 128 Largo di Vigna Stelluti, 25 Via dello Statuto, 20Ciampino Via Kennedy, 163Monterotondo Via Salaria, 204Pomezia Via dei Castelli Romani, 22Velletri Via U. Mattoccia, 6
SardEGNa
Provincia di CagliariCagliari Via Mameli, 120
www.bancodibrescia.it
LoMBardia
Provincia di BresciaBrescia Piazza della Loggia, 5 Corso Magenta, 73 - ang. Via Tosio Via Lecco, 1 Via Trento, 7 Via San Martino, 2 - ang. Corso Zanardelli Contrada del Carmine, 67 Via Valle Camonica, 6/b Via Santa Maria Crocifissa di Rosa, 67 Piazzale Spedali Civili, 1 Corso Martiri della Libertà, 13 Via Trieste, 8 Via Vittorio Veneto, 73 - ang. Tofane Via San Giovanni Bosco, 15/c Via Bettole, 1 (Fraz. San Polo) Via Repubblica Argentina, 90 - ang. Via Cremona Via della Chiesa, 72 Via Prima, 50 - Villaggio Badia Piazzale Nava, 7 (Fraz. Mompiano) Via Masaccio, 29 (Fraz. San Polo) Via Bissolati, 57 Corso Martiri della Libertà, 45 Via Milano, 21/b Via Indipendenza, 43 Via Solferino, 30/a Via Trento, 25/27 Viale Duca d’Aosta, 19 Via Ambaraga, 126 Via Chiusure, 333/a Via Cefalonia, 76 Via Orzinuovi, 9/11
Via Lamarmora, 230 (c/o A2A) Via Cipro, 76 Via Triumplina, 179/b Via Vittorio Emanuele II, 60 acquafredda Via della Repubblica, 52adro Via Roma, 1Bagnolo Mella Via XXVI Aprile, 69/71Bagolino Via San Giorgio, 66Bedizzole Via Trento, 3/5Borgosatollo Via IV Novembre, 140Botticino Via Valverde, 1 (Fraz. Botticino Sera) Via Don Milani, 3Bovegno Via Circonvallazione, 5Bovezzo Via Dante Alighieri, 8/dBreno Via Giuseppe Mazzini, 72Calcinato Via Guglielmo Marconi, 51Calvisano Via Dante Alighieri, 1Capriano del Colle Via Morari, 26Carpenedolo Piazza Martiri della Libertà, 1Castegnato Piazza Dante Alighieri, 1Castelcovati Via Alcide De Gasperi, 48Castel Mella Via Caduti del lavoro, 56/aCastenedolo Piazza Martiri della Libertà, 4Castrezzato Piazza Mons. Zammarchi, 1Cedegolo Via Nazionale, 105Cellatica Via Padre Cesare Bertulli, 8Chiari Piazza Giuseppe Zanardelli, 7Collio Piazza Giuseppe Zanardelli, 32Comezzano - Cizzago Via Giuseppe Zanardelli, 31Concesio Via Europa, 203 Via Europa, 8 (c/o centro comm. Valtrumpino)darfo Boario Terme Via Roma, 2dello Piazza Roma, 36desenzano del Garda Via G. Marconi, 18 Via G. Marconi, 97 Via G. Di Vittorio, 17 (Fraz. Rivoltella)Edolo Via G. Marconi, 36/aFiesse Via Antonio Gramsci, 25Flero Via XXV aprile, 110Gardone riviera Via Roma, 8Gardone Val Trompia Via G. Matteotti, 212Gargnano Piazza Feltrinelli, 26Gavardo Via Suor Rivetta, 1Ghedi Piazza Roma, 1Gottolengo Piazza XX Settembre, 16Gussago Via IV Novembre, 112/aidro Via Trento, 60iseo Via Dante Alighieri, 10 Via Risorgimento, 51/c (Fraz. Clusane) isorella Via A. Zanaboni, 2Leno Via Dossi, 2Limone del Garda Via Don Comboni, 24Lograto Piazza Roma, 11Lonato Via Guglielmo MarconiLumezzane Via Alcide De Gasperi, 91 (Fraz. Pieve) Via M. D’Azeglio, 4 (Fraz. S. Sebastiano)Mairano Piazza Europa, 1Manerba del Garda Via Vittorio Gassman, 17/19Manerbio Via XX Settembre, 21Marone Via Roma, 59Moniga del Garda Piazza San MartinoMonte isola Via Peschiera Maraglio, 156Monticelli Brusati Via IV Novembre, 5/aMontichiari Via Trieste, 71 Via Felice Cavallotti, 25
Nave Piazza Santa Maria Ausiliatrice, 19Nuvolento Via Trento, 17Nuvolera Via Italia, 3/aodolo Via Praes, 13/bisofflaga Via Giuseppe Mazzini, 2orzinuovi Piazza Vittorio Emanuele II, 18ospitaletto Via Padana Superiore, 56Paderno Franciacorta Via Roma, 32Palazzolo sull’oglio Via XX Settembre, 22 Via Brescia, 1Passirano Via Libertà, 36Pavone del Mella Piazza Umberto I, 1Pisogne Piazza Umberto I, 11Poncarale Via Fiume, 8/aPonte di Legno Corso Milano, 34Pontevico Piazza Giuseppe Mazzini, 15Pralboino Via Martiri Libertà, 52Prevalle Piazza del Comune, 7Quinzano d’oglio Via C. Cavour, 29/31remedello Via Roma, 60rezzato Via IV Novembre, 98 Via Zanardelli, 5a/b (Fraz. Virle Treponti)rodengo Saiano Via Ponte Cigoli, 12roè Volciano Via San Pietro, 119roncadelle Via Martiri della Libertà, 119/a Via Guglielmo Marconi (c/o c.c. Auchan)rovato Corso Bonomelli, 52/54Sabbio Chiese Via XX Settembre, 83Sale Marasino Via Roma, 23/ BisSalò Via Pietro da Salò - Loc. Rive Piazza Vittorio Emanuele II, 20San Felice del Benaco Viale Italia, 9San Gervasio Bresciano Piazza Antica Piazzola, 5San Paolo Piazza Aldo Moro, 9Sarezzo Via Roma, 8 Via G. Carducci, 2 (Fraz. Ponte Zanano)Seniga Via San Rocco, 15Sirmione Via Colombare - ang. Via G. Garibaldi Piazza Castello, 58Sulzano Via Cesare Battisti, 85Tavernole sul Mella Via IV Novembre, 40/42Tignale Piazzale Francesco d’AssisiTorbole Casaglia Piazza Caduti, 8Toscolano Maderno Via Montana, 1 (Fraz. Maderno) Via Statale Toscolano, 114/a (Fraz. Toscolano)Travagliato Piazza LibertàVerolanuova Piazza Libertà, 1Vestone Via Perlasca, 5Villa Carcina Via G. Marconi, 39/cVisano Via Gugliemo Marconi, 11Vobarno Via Migliorini - ang. Via San RoccoZone Via Monte Guglielmo, 44
Provincia di BergamoBergamo Via Palma il Vecchio, 113 Via Tremana, 13 Via Camozzi, 101 Via Don Luigi Palazzolo, 89albano Sant’alessandro Via Tonale, 29alzano Lombardo Via Roma, 31Brembate Sopra Via B. Locatelli ang. Via SorteCologno al Serio Via San Martino, 2Grumello del Monte Via Roma, 63
Medolago Via Europa, 19/bSeriate Via Paderno, 25Trescore Balneario Via Lorenzo Lotto, 6/aTreviolo Piazza Mons. Benedetti, 10
Provincia di CremonaCremona Viale Po, 33/35 Via Dante, 241 Piazza Stradivari, 19 Via Mantova, 137 Casalmaggiore Via Porzio - ang. Via Nino BixioCastelleone Via Roma, 69Crema Viale Repubblica, 79Soncino Via IV Novembre, 25
Provincia di LodiLodi Via Incoronata, 12Codogno Via Vittorio Emanuele II, 35Lodi Vecchio Piazza Vittorio Emanuele, 48S. angelo Lodigiano Piazza Libertà, 10
Provincia di MantovaMantova V.le Risorgimento, 33 - ang. Valsesia Via Madonna dell’orto, 6 Viale Divisione Acqui, 14 Piazza Guglielmo Marconi, 7asola Viale della Vittoria, 17 Bagnolo San Vito Via Di Vittorio, 35 (Fraz. San Biagio)Borgofranco sul Po Via Martiri della Libertà, 64Castel Goffredo Via Europa, 27Castiglione delle Stiviere Via C. Cavour, 36Magnacavallo Via Roma, 23Marmirolo Via Ferrari, 66/dMoglia Piazza della Libertà, 19ostiglia Via Vittorio Veneto, 14Poggio rusco Via Trento e Trieste, 9Quistello Via G. Marconi, 12Sermide Via Cesare Battisti, 4Villa Poma Piazza Mazzali, 7
Provincia di MilanoMilano Piazza XXIV Maggio, 7 Piazza XXV Aprile, 9 Via Antonio Rosmini, 17 Via Ponchielli, 1 Via Giorgio Washington, 96 Via Vincenzo Monti, 42 Via Monte Rosa, 16 Via Mac Mahon, 19 Via Saffi 5/6 - ang. via Monti Via Silvio Pellico, 10/12 Via G.B. Morgagni, 10 Piazza Sant’Agostino, 7 Via Feltre, 30/32 Via Giovanni da Procida, 8 Piazza Borromeo, 1 Viale Monza, 139/b Via Lomellina, 14 Via Lecco, 22 Corso Indipendenza, 5 Via Porpora, 65 Largo Scalabrini, 1 Via Bertolazzi, 20 (Zona Lambrate)Bresso Via Vittorio Veneto, 57Cernusco sul Naviglio Via Monza, 15Cologno Monzese Viale Lombardia, 52Corsico Via G. Di Vittorio, 10Legnano C.so Magenta,127 - ang. Via Beccaria
Melegnano Viale Predabissi, 12Melzo Via Antonio Gramsci, 23Novate Milanese Via G. Di Vittorio, 22Paderno dugnano Via Erba, 36/38Paullo Piazza E. Berlinguer, 14Pioltello Via Roma, 92rho Viale Europa, 190Trezzano rosa Piazza San Gottardo, 14Trezzo sull’adda Via Bazzoni
FriULi VENEZia GiULia
Provincia di PordenonePordenone Via Santa Caterina, 4Fiume Veneto Via Piave, 1 (Fraz . Bannia)Prata di Pordenone Via Cesare Battisti, 1
Provincia di UdineUdine Via F. di Toppo, 87ampezzo Piazzale ai Caduti, 3Majano Piazza Italia, 26Paularo Piazza Nascimbeni, 5Prato Carnico Via Pieria, 91/dSutrio Piazza XXII Luglio 1944, 13Tolmezzo Piazza XX Settembre, 2
LaZio
Provincia di LatinaLatina Via Isonzo, 3 Via della Stazione, 187
Provincia di romaroma Via Ferdinando di Savoia, 8 Via Simone Martini, 5 Piazza Eschilo, 67 Via Bevagna, 58/60 Largo Colli Albani, 28 Via Vittorio Veneto, 108/b - Via Emilia Via Fabio Massimo, 15/17 Via Crescenzio Conte di Sabina, 23 Via Portuense, 718 Via Fucini, 56 Via Boccea, 211/221 Via Camillo Sabatini, 165 Via Val Pellice, 22 Via Ugo Ojetti, 398 Via Aurelia, 701/709 Via A. Pollio, 50 (c/o c.c. Casalbertone) Viale Guglielmo Marconi, 3/5 Piazza San Silvestro, 6 Piazza dei Tribuni, 58 Via Appio Claudio, 336
Provincia di ViterboViterbo Corso Italia, 36 Via Saragat - ang. Via Polidori Via Monte San Valentino Via Venezia Giulia, 20/22acquapendente Via del Rivo, 34Bassano in Teverina Via Cesare Battisti, 116Bolsena Via Antonio Gramsci, 28Bomarzo Piazza B. Buozzi, 5Canepina Via Giuseppe Mazzini, 61Capodimonte Via Guglielmo Marconi, 84Civita Castellana Via della RepubblicaCorchiano Via Roma, 45Fabrica di roma Viale degli EroiGradoli Piazza Vittorio Emanuele II, 10Marta Via Laertina, 35/39
Montalto di Castro Via Aurelia Tarquinia, 5/7 P.za delle mimose, 13 (Fraz. Pescia Romana)Montefiascone Piazzale RomaMonterosi Via Roma, 36orte Via Le Pianeronciglione Corso Umberto I, 78Soriano nel Cimino Piazza XX Settembre, 1/2Tarquinia Piazzale Europa, 4Tuscania Via Tarquinia Vetralla Via Roma, 21/23 Via Cassia, 261 (Fraz. Cura)Vignanello Via Vittorio Olivieri, 1/aVitorchiano Via Borgo Cavour, 10
VENETo
Provincia di PadovaPadova Via N. Tommaseo ang. via CodalungaCamposampiero Piazza Castello, 43Noventa Padovana Via Giovanni XXIII, 2 - ang. Via RisorgimentoPonte San Nicolò Via Padre M. Kolbe, 1/a
Provincia di VeneziaMestre Piazza XXVII Ottobre, 29Mira Via Nazionale, 193
Provincia di VeronaVerona Via Città di Nimes, 6 Via XXIV Maggio, 16 Via Albere, 18 Via Murari Brà, 12/b Via Campagnol di Tombetta, 30 Corte Farina, 4 Via Galvani, 7Bussolengo Via Verona, 43Caldiero Via Strà, 114-114/aGrezzana Viale Europa, 13isola della Scala Via Spaziani, 19Monteforte d’alpone Viale Europa, 30Negrar Via Strada Nuova, 17 (Fraz. S. Maria)Peschiera del Garda Via Venezia, 4San Bonifacio Via Camporosolo,16San Martino Buon albergo Via Nazionale, 21Sant’ambrogio Valpolicella Via Giacomo Matteotti, 2Sona Via XXVI Aprile, 19 (Fraz. Lugagnano)Villafranca di Verona Via della Pace, 58
Provincia di VicenzaVicenza Viale San Lazzaro, 179 Via IV Novembre, 60Bassano del Grappa Viale San Pio X 85Montecchio Maggiore Via Madonnetta, 231Schio Via Battaglion Val Leogra, 6
Provincia di TrevisoTreviso Piazza Vittoria, 14Castelfranco Veneto Via Forche, 2Conegliano Via XI Febbraio, 1Montebelluna Via Dante Alighierioderzo Via degli Alpini, 30/32Quinto di Treviso Via Contea, 33
TrENTiNo aLTo adiGE
Provincia di TrentoPieve di Bono Via Roma, 28
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LoMBardia
Provincia di MilanoMilano Via della Moscova, 33 Via Salasco, 31 Via Bocchetto, 13 Via Borgogna, 2/4 Via Buonarroti, 22 Via Boccaccio, 2 Via Canonica, 54 Viale Coni Zugna, 71 Corso Lodi, 111 Piazzale de Agostini, 8 Via Carlo Dolci, 1 Piazza Firenze, 14 Largo Gelsomini, 12 Via G.B. Grassi, 89 Via Gian Galeazzo - ang. Via Aurispa Corso Indipendenza, 14 Via La Spezia, 1 Viale Lombardia, 14/16 Corso Magenta, 87 - Porta Vercellina Viale Marche, 56 Piazzale Nigra, 1 Via Olona, 11 Via Padova, 21 Via Pergolesi, 25 Viale Piave, 15 Corso di Porta Romana, 57 Via del Torchio, 4 Via Eugenio Pellini, 1 - ang. Via Cagliero Via Vitruvio, 38 - Via Settembrini Via Solari, 19 Via Spartaco, 12 Largo Zandonai, 3 Viale Monte Santo, 2 Piazzale Zavattari, 12 Via Pellegrino Rossi, 26 Via Melchiorre Gioia, 28 Piazzale Susa, 2 Via Biondi, 1 Via Friuli, 16/18 Via C. Menotti, 21 - ang. Via G. Modena Viale delle Rimembranze di Lambrate, 4 Viale L. Sturzo, 33/34 Via A. Trivulzio, 6/8 Via Palestrina, 12 - ang. Viale A. Doria Via Bignami, 1 (c/o C.T.O.) Via Macedonio Melloni, 52 (c/o I.O.P.M.) Via della Commenda, 12 (c/o Istituti Clinici) Corso Porta Nuova, 23 (c/o Ospedale Fatebenefratelli) Via Francesco Sforza, 35 (c/o Osp. Maggiore) Piazza Ospedale Maggiore, 3 (c/o Niguarda) Via Pio II, 3 (c/o Ospedale San Carlo) Via Castelvetro, 32 (c/o Ospedale Buzzi) Corso Italia, 17 Via Lomellina, 50 Via Pisanello, 2 Corso Lodi, 78 Piazza Gasparri, 4 Via Panizzi, 15 Via dei Missaglia - angolo Via Boifava
Viale Monza, 325 Piazza Santa Francesca Romana, 3 Via Meda, angolo Via Brunacci, 13 Corso XXII Marzo, 22 Via Ampère, 15 Piazzale Lagosta, 6 Via Padova, 175 Viale Certosa, 138 Via Monte di Pietà, 7 Via A. di Rudini, 8 (c/o Ospedale San Paolo) Via Rizzoli, 8 (c/o RCS)abbiategrasso Piazza Cavour, 11 arluno Via Piave, 7assago Milanofiori Palazzo Wtc Viale MilanofioriBellinzago Lombardo Via delle 4 Marie, 8Binasco Largo Bellini, 16Bollate Via Giacomo Matteotti, 16Bresso Via Roma, 16Canegrate Via Manzoni, 48/aCarugate Via Toscana, 10Cassina de’ Pecchi Via Matteotti, 2/4Cinisello Balsamo Via Casati, 19 Viale Umbria, 4 Via Massimo Gorki, 50 (c/o Ospedale Bassini)Cologno Monzese Via Indipendenza, 32 - ang. P.zza CastelloCorbetta Corso Garibaldi, 14Cornaredo Piazza Libertà, 62 Via Magenta, 34Corsico Via Cavour, 45 Viale Liberazione, 26/28Garbagnate Milanese Via Milano, 110/112 Via Kennedy, 2 (Fraz. S. M. Rossa)inveruno Via Magenta, 1Lainate Via Garzoli, 17Legnano Corso Sempione, 221 Corso Sempione - angolo Via Toselli Via Novara, 8 Piazza Don Sturzo, 13Magenta Piazza Vittorio Veneto, 11Melegnano Via Cesare Battisti, 37/aMelzo Piazza Risorgimento, 2Novate Milanese Via Amendola, 9opera Via Diaz, 2Paderno dugnano Via Rotondi, 13/aParabiago Via S. Maria, 22Peschiera Borromeo Viale Liberazione, 41Pregnana Milanese Via Roma, 46rho Corso Europa, 209 Via Meda, 47 Via Pace, 165 (Fraz. Mazzo Milanese)rozzano Viale Lombardia, 17 Piazza Berlinguer, 6 (Fraz. Ponte Sesto) S. Giuliano Milanese Via Risorgimento, 3 Via S. Pellico, 9 (Fraz. Sesto Ulteriano)Segrate Piazza della Chiesa, 4Senago Piazza Matteotti, 10/aSesto San Giovanni Via Casiraghi, 167Settimo Milanese Piazza della Resistenza, 8Solaro Via Mazzini, 66Trezzano rosa Via Raffaello Sanzio, 13/sTrezzano sul Naviglio Viale C. Colombo, 1Vittuone Via Villoresi, 67
Provincia di Monza-BrianzaMonza Viale G.B. Stucchi, 110 (c/o Roche Boehringer Spa)
Provincia di PaviaPavia Via Montebello della Battaglia, 2 Corso Strada Nuova, 61/c Viale Matteotti, 63 (c/o Istituzioni Assistenziali Riunite) Via dei Mille, 7 Viale Ludovico il Moro, 51/b Via Taramelli, 20 Via Pavesi, 2 Corso Alessandro Manzoni, 17 Piazzale Gaffurio, 9 Via San Pietro in Verzolo, 4 Via Ferrata, 1 (c/o Università)albuzzano Via Giuseppe Mazzini, 92/94Belgioioso Via Ugo Dozzio, 15Borgarello Via Principale, 3Broni Piazza Vittorio Veneto, 52Casei Gerola Piazza Meardi, 9Casorate Primo Via S. Agostino, 1 - ang. P.zza ContardiCasteggio Viale Giuseppe Maria Giulietti, 10 Garlasco Corso C. Cavour, 55Giussago Via Roma, 38Godiasco Piazza Mercato, 19 Viale delle Terme, 44 (Fraz. Salice Terme)Landriano Via Milano, 40Linarolo Via Felice Cavallotti, 5Magherno Via G. Leopardi, 2Marcignago Via Umberto I, 46Montebello della Battaglia Piazza Carlo Barbieri “Ciro”, 1Mortara Piazza Silvabella, 33 Pinarolo Po Via Agostino Depretis, 84Portalbera Via Mazzini, 1 (c/o Comune)robbio Piazza Libertà, 8rosasco Via Roma, 4San Martino Siccomario Via Roma, 23Sannazzaro de’ Burgondi Viale Libertà 3/5Siziano Via Roma, 22Stradella Via Trento, 85Torrevecchia Pia Via Molino, 9Travacò Siccomario P.zza Caduti e Combattenti d’Italia, 1Valle Lomellina Piazza Corte Granda, 4Varzi Via Pietro Mazza, 52Vigevano Via Dante, 39 Via Madonna degli Angeli, 1 Corso Genova, 95 Via de Amicis, 5 Via Sacchetti Via Decembrio, 27Vistarino Via Vivente, 27/aVoghera Via Giacomo Matteotti, 33
EMiLia roMaGNa
Provincia di BolognaBologna Viale della Repubblica, 25/31 Via Murri, 77 Piazza Dè Calderini, 6/a Via Ercolani, 4/e Via Lombardia, 7/aSan Lazzaro di Savena Via Emilia, 208/210Zola Predosa Via Risorgimento, 109
Provincia di FerraraCento Via Ferrarese, 3
Provincia di ModenaModena Viale Trento e Trieste - ang. Via Emilia EstCarpi Via Baldassarre Peruzzi, 8/bSassuolo Viale Crispi, 24
Provincia di ParmaParma Via San Leonardo, 4 Via Emilia est, 17 Via Repubblica, 32 Fidenza Piazza G. Garibaldi, 41Langhirano Via Roma, 25 - Via Ferrari, 17
Provincia di PiacenzaPiacenza Via Verdi, 48 Via Manfredi, 7 Via Cristoforo Colombo, 19Caorso Via Roma, 6/aCarpaneto Piacentino Via G. Rossi, 42Gragnano Trebbiense Via Roma, 52Ponte dell’olio Via Vittorio Veneto, 75San Nicolò a Trebbia Via Emilia Est, 48 (Fraz. Rottofreno)
Provincia di reggio Emiliareggio Emilia V.le Monte Grappa, 4/1 - ang. V.le dei Mille Via Emilia all’Angelo, 35Correggio Via Asioli, 7/arubiera Viale della Resistenza, 7/a
LaZio
Provincia di romaroma Corso Vittorio Emanuele II, 25/27 Via Baldovinetti, 106/110 Via Boccea 51, a/b/c Viale dei Colli Portuensi, 298/302 Via F.S. Nitti, 73/75/77 Via Norcia, 1/3 Via Guidubaldo del Monte, 13/15 Viale delle Provincie, 34/46 Via Nizza, 71 Viale Trastevere, 22 Via Sestio Calvino, 57 Via Tiburtina, 544/546 - ang. Via Galla Placidia Largo Trionfale, 11/12/13/14 Via Cerveteri, 30 Piazza Vescovio, 3 - 3/a - 3/b - ang. Via Poggio Moiano, 1 Via dei Castani,133 Via delle Azzorre, 288 (Fraz. Ostia) Via Nomentana, 669/675 Via XX Settembre, 45 - ang. Servio Tullio Viale dei quattro venti, 83
ToSCaNa
Provincia di FirenzeFirenze Piazza Cesare Beccaria, 21
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PiEMoNTE
Provincia di CuneoCuneo Piazza Europa, 1 Via Luigi Gallo, 1 Via Roma, 13/b Via della Battaglia, 15 (Fraz. Madonna dell’Olmo) Corso Nizza, 57/a Corso Antonio Gramsci, 1 Via Savona, 8 - ang. Via Bisalta Via A. Carle, 2 (Fraz. Confreria) P.zale Repubblica (Fraz. Castagnaretta) Via Michele Coppino, 16 (c/o Ospedale)alba Via Teobaldo Calissano, 9 Viale Giovanni Vico, 5 Corso Piave, 74 Corso Langhe, 66/b - Borgo Moretta Corso Cavour, 14 Via G. Garibaldi, 180 (Fraz. Gallo d’Alba) Corso Canale, 98/1 (Fraz. Mussotto)Bagnasco Via Roma, 3Bagnolo Piemonte Via Cavalieri di Vittorio Veneto, 12Barbaresco Via Torino, 16Barge Viale Giuseppe Mazzini, 1Barolo Via Roma, 53Bastia Mondovì Piazza IV Novembre, 3Beinette Via Vittorio Veneto, 4Bernezzo Via A. Moro, 2 (Fraz. S.Rocco)Borgo San dalmazzo Piazza Liberazione, 8/10 Via Po, 41/43Bossolasco Corso Della Valle, 29Boves Piazza dell’Olmo, 2Bra Via Giuseppe Verdi, 10 Via Don Orione, 85 (Fraz. Bandito)Brossasco Via Roma, 11/aBusca Piazza Savoia, 9Canale Via Roma, 72Caraglio Piazza Madre Teresa, 8Carrù P.za V. Veneto, 2 - ang. Via Benevagienna Castelletto Stura Via Guglielmo Marconi, 6Castellinaldo Via Roma, 56Castiglione Tinella Via Circonvallazione, 12Castino Via XX Settembre, 1Centallo Piazza Vittorio Emanuele II, 17Ceva Via Roma, 40Cherasco Via Vittorio Emanuele II, 34Chiusa di Pesio Via Roma, 5Corneliano d’alba Piazza Cottolengo, 42Cortemilia Piazza Castello, 1Costigliole Saluzzo Via Vittorio Veneto, 94Cravanzana Via XX Settembre, 1demonte Via Martiri e Caduti della Libertà, 1dogliani Via Divisione Cuneense, 1dronero Piazza San Sebastiano, 7 Viale della Stazione, 10Entracque Via della Resistenza, 5Farigliano Piazza San Giovanni, 7Fossano Via Roma, 3Frabosa Soprana Piazza Guglielmo Marconi, 1
Frabosa Sottana Via Galassia, 61 (Fraz. Prato Nevoso) Via IV Novembre, 30 Gaiola Via Barale, 16Garessio Corso Statuto, 15Genola Via Roma, 32Govone Piazza Vittorio Emanuele II, 9Lagnasco Via Roma, 30La Morra Via Umberto I, 28Lesegno Via Roma, 23Limone Piemonte Via Roma, 62Magliano alfieri Via IV Novembre, 54/a (Fraz. S. Antonio)Magliano alpi Via Langhe, 158Mango Piazza XX Settembre, 6Monastero Vasco Via Variante, 3Monchiero Via Borgonuovo, B/15-1Mondovì Piazza G. Mellano, 6 Corso Europa, 23 Piazza Maggiore, 8 Piazzale Ellero, 20Monesiglio Via Roma, 4Monforte d’alba Via Giuseppe Garibaldi, 4Montà Piazza Vittorio Veneto, 31Montanera Via G. Marconi, 4Monticello d’alba Piazza Martiri della Libertà, 2 (Fraz. Borgo)Moretta Via Torino, 73/bisMorozzo Via Guglielmo Marconi, 78Murazzano Via L. Bruno, 6Murello Via Caduti Murellesi, 39Narzole Via Pace, 2Neive Piazza della Libertà, 2Neviglie Via Umberto I, 14Niella Belbo Piazza Mercato, 12/bPaesana Via Po, 41Pagno Via Roma, 1Peveragno Piazza P. Toselli, 1Piasco Piazza Martiri della Liberazione, 7Piobesi d’alba Piazza San Pietro, 12Pradleves Via IV Novembre, 108Priocca Via Umberto I, 65racconigi Piazza Roma, 8revello Via Saluzzo, 80rifreddo Piazza della Vittoria, 4robilante Via Umberto I, 22roccavione Piazza Biagioni, 27rodello Piazza Vittorio Emanuele II, 2rossana Via Mazzini, 1Saliceto Piazza C. Giusta, 1Saluzzo Corso Italia, 57Sampeyre Via Vittorio Emanuele II, 22San damiano Macra Via Roma, 15San Michele Mondovì Via Nielli, 15/aSanfront Corso Guglielmo Marconi, 14Santo Stefano Belbo Corso Piave, 82Savigliano Piazza Schiapparelli, 10Scarnafigi Piazza Vittorio Emanuele II, 14Sommariva del Bosco Via Donatori del Sangue, 11/bTarantasca Via Carletto Michelis, 3Torre San Giorgio Via Maestra, 17Valdieri Corso Caduti in Guerra, 13Valgrana Via Caraglio, 9Verduno Piazza Castello, 3Vernante Piazza de l’Ala, 4Verzuolo Piazza Martiri della Libertà, 13Vicoforte Via di Gariboggio, 43Villafalletto Via Vittorio Veneto, 24Villanova Mondovì Via Roma, 33/aVinadio Via Roma, 11
Provincia di alessandriaalessandria Via Dante - ang. Via C. Lamarmora Via Venezia, 16
(c/o Ospedale Santi Antonio e Biagio)acqui Terme Corso Bagni, 54arquata Scrivia Via Libarna, 56Borghetto Borbera Via San Michele, 2Brignano - Frascata Via Roma, 44Cabella Ligure Piazza della Vittoria, 7Casale Monferrato Viale G. Giolitti, 2 (c/o ASL) Piazza San Francesco, 10Casalnoceto Piazza Martiri della Libertà, 10Castelnuovo Scrivia Via Solferino, 11Garbagna Via Roma, 21isola Sant’antonio Piazza del Peso - ang. Via C. CavourMonleale Corso Roma, 41/43Novi Ligure Corso Marenco, 141 ovada Via Torino, 155Pontecurone Piazza Giacomo Matteotti, 5Pozzolo Formigaro Via Roma, 31rocchetta Ligure Piazza Regina MargheritaSale Piazza Giuseppe Garibaldi, 8Sarezzano Piazza L. Sarzano, 4Silvano d’orba Via Cesare Battisti, 32Stazzano Via Fossati, 2/aTortona Piazza Duomo, 13 Via Emilia, 422 Corso della Repubblica, 2/d P.zza Felice Cavallotti, 1 (c/o ASL)Valenza Via Dante, 68Vignole Borbera Via Alessandro Manzoni, 8Villalvernia Via Carbone, 69Villaromagnano Via della Chiesa
Provincia di astiasti C.so Vittorio Alfieri, 137 Corso Savona, 104Canelli Corso Libertà, 68Nizza Monferrato Piazza G. Garibaldi, 70
Provincia di BiellaBiella Via Nazario Sauro, 2Cossato Via Lamarmora, 9
Provincia di NovaraNovara Largo Don Luigi Minzoni, 1 Corso della Vittoria, 1arona Corso Liberazione, 39Borgomanero Via Garibaldi, 92/94oleggio Via Mazzini, 15romentino Via dei Conti Caccia, 1Trecate Piazza Dolce, 10
Provincia di VerbaniaVerbania Piazza Matteotti, 18 (Fraz. Intra)Cannobio Via Umberto I, 2
Provincia di VercelliVercelli Piazza Cavour, 23 Borgosesia Via Sesone, 36
Provincia di TorinoTorino Corso Dante, 57/b Corso Vittorio Emanuele II, 107 Corso Vercelli, 81/b Corso Unione Sovietica, 503 Via Madama Cristina, 30 - ang. Lombroso Corso Orbassano, 236
Corso Matteotti, 15 Via Alfieri, 17 Piazza Adriano, 5 Corso L. Einaudi, 15/17 Piazza Gran Madre di Dio, 12/a Corso Sebastopoli, 166 C.so Inghilterra, 59/g ang. C.so Francia Via Giolitti, 16 Corso Francia, 262 Corso Regina Margherita, 191airasca Via Roma, 101alpignano Via Cavour, 125Bibiana Via C. Cavour, 25Bricherasio Piazza Castelvecchio, 17Chieri Piazza Dante, 10Chivasso Via Po, 5Collegno Via XXIV Maggio, 1ivrea Via Circonvallazione, 7Moncalieri Corso Savona, 6 ter Strada Villastellone, 2Nichelino Via Torino, 172None Via Roma, 23Pinerolo Via Savoia - ang. Via Triesterivoli Via Rombò, 25/erondissone Piazza Roma, 1Santena Via Cavour, 43Settimo Torinese Via Petrarca, 9Villar Perosa Via Nazionale, 39/a
LoMBardia
Provincia di MilanoMilano Via Fabio Filzi, 23
VaLLE d’aoSTa
aosta Via Xavier de Maistre, 8
LiGUria
Provincia di GenovaGenova Via C.R. Ceccardi, 13/r Corso Torino, 61/r Via Pastorino, 118 (Loc. Bolzaneto) Via Sestri, 188/190r (Sestri Ponente) Piazza G. Lerda, 10/r (Loc. Voltri) Via Cinque Maggio, 101/r (Priaruggia) Via C. Rolando, 123 (Sampierdarena) Via Antonio Gramsci, 8/r Via Marina di Robilant, 5 Via Molassana, 82/r Via Fieschi, 11 Piazza Leopardi, 6Borzonasca Via Angelo Grilli, 15Chiavari Corso Dante Alighieri, 36Cicagna Via Statale, 8 - angolo Via Dante, 1Lavagna C.so Buenos Aires, 84 (Fraz. Monleone)Mezzanego Via Capitan Gandolfo, 138rapallo Via A. Diaz, 6recco Via Roma, 56rSanto Stefano d’aveto Via Razzetti, 11Sestri Levante Via Fascie, 70
Provincia di imperiaimperia Viale Giacomo Matteotti, 13 Via Giacomo Puccini, 7Bordighera Via Treviso,1 - ang. Via V. Emanuele IISanremo Via Roma, 54/60
Taggia Via Boselli, 62 (Fraz. Arma)Ventimiglia Via Ruffini, 8/a
Provincia di La SpeziaLa Spezia Via G. Pascoli, 22 Via Chiodo, 115 Via San Bartolomeo (c/o ASW Research) Via di Monale, 23/29 Piazza d’Armi (c/o comprensorio Maridipart) Via Fiume, 152 Via del Canaletto, 307Castelnuovo Magra Via Aurelia, 129 (Fraz. Molicciara)Lerici Calata G. Mazzini, 1 Sarzana Via Muccini, 48Portovenere Via Lungomare, 47
Provincia di SavonaSavona Piazza Aurelio Saffi, 7/r Corso Vittorio Veneto, 93alassio Via Mazzini, 55albenga Piazza Petrarca, 6albisola Superiore Corso Giuseppe Mazzini, 189andora Piazza Santa Maria, 7Cairo Montenotte Corso Marconi, 240 (Fraz. S. Giuseppe)Celle Ligure Via Boagno, 12Finale Ligure Via Concezione, 10rLoano Via Stella, 34
ToSCaNa
Provincia di Massa - CarraraCarrara Via Galileo Galilei, 32
FraNCia
Nizza 7, Boulevard Victor HugoMentone Avenue de Verdun, 21antibes Avenue Robert Soleau, 15
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MarCHE
Provincia di anconaancona Corso Stamira, 14 Viale C. Colombo, 56 Via Brecce Bianche, 68/i Via Umaniagugliano Contrada Gavone, 2/b (c/o Socopad)Castelfidardo Via C. Battisti, 5Chiaravalle Via della Repubblica, 83Cupramontana Piazza Cavour, 11Fabriano Piazza Miliani, 16 Via Corsi, 3Falconara Via IV Novembre, 8 Via Flaminia, 396 (Fraz. Palombina Vecchia)
Filottrano Via Oberdan, 5Jesi Corso Matteotti, 1 Via San Giuseppe, 38 Piazza Ricci, 4 Piazza Vesalio, 5 Via Leone XIII (c/o New Holland Fiat Spa)Jesi Zipa Via Don Battistoni, 4Loreto Via BramanteMaiolati Spontini Via Risorgimento, 52 (Fraz. Moie)Montemarciano Piazza Magellano, 15 (Fraz. Marina)Monterado Via 8 Marzo, 7 (Fraz. Ponte Rio)Morro d’alba Via Morganti, 56Numana Via Pascoli, 1Aoffagna Via dell’Arengo, 38osimo Piazza del Comune, 4 Via Ticino, 1 (Fraz. Padiglione)rosora Via Roma, 132 (Fraz. Angeli)Santa Maria Nuova Via Risorgimento, 68 (Fraz. Collina)Sassoferrato Piazza Bartolo, 17Senigallia Corso 2 Giugno, 76 Via R. Sanzio, 288 (Fraz. Cesano) Serra de’ Conti Piazza Leopardi, 2
Provincia di ascoli Picenoascoli Piceno Viale Indipendenza, 42acquasanta Terme Piazza Terme, 6Castel di Lama Via Salaria, 356Grottammare Via Montegrappa, 12San Benedetto del Tronto Piazza Matteotti, 6 Piazza Setti Carraro (Fraz. Porto d’Ascoli)
Provincia di FermoFermo Contrada Campiglione, 20 Via Dante Zeppilli, 56Falerone Viale della Resistenza, 168 Y (Fraz. Piane)Massa Fermana Via Ada Natali, 5Montegranaro Via Fermana NordMonte Urano Via Papa Giovanni XXIII, 37Petritoli Contrada S. Antonio, 217 (Fraz. Valmir)Porto S. Giorgio Via TassoPorto Sant’Elpidio Via Mazzini, 115Sant’Elpidio a Mare Viale Roma, 1Torre San Patrizio Via Mazzini, 19A
Provincia di MacerataMacerata Viale Don Bosco Corso Cavour, 34 Via Bramante, 103 (Fraz. Piediripa)Camerino Piazza Caio Mario, 5Castelraimondo Piazza della Repubblica, s.n.c.Civitanova Marche Corso Umberto I, 16Corridonia Piazzale della Vittoria, 1Loro Piceno Piazzale G. Leopardi, 8Matelica Viale Martiri della Libertà, 31Monte San Giusto Via Verdi, 11Monte San Martino Via Roma, 32Pollenza Via V. Cento, 6 (Casette Verdini)Potenza Picena Piazza Douhet, 23 (Fraz. Porto) Via Marefoschi, 1recanati Via Cesare Battisti, 20San Ginesio Piazza Gentili, 31
San Severino Marche Viale EuropaSarnano Piazza della Libertà, 76Tolentino Piazza dell’Unità
Provincia di Pesaro - UrbinoPesaro Piazzale Garibaldi, 22 Via Antonio Fratti, 23Urbino Viale Comandinoacqualagna Via Flaminia, 79Carpegna Via R. Sanzio, 12Colbordolo Via Nazionale, 143 (Fraz. Morciola)Fano Via dell’Abbazia, s.n.c.Fossombrone Piazza Dante, 24Lunano Corso Roma, 79Macerata Feltria Via Antini, 22Montecopiolo Via Montefeltresca, 37 (Fraz. Villagrande)Montelabbate Via Provinciale, 169 (Fraz. Osteria Nuova)Sant’angelo in Vado Piazza Mar del Plata, 6Sassofeltrio Via Risorgimento, 9 (Frazione Fratte)Urbania Via Roma, 24
aBrUZZo
Provincia di Chietiatessa Via Piazzano, 70 (Fraz. Piazzano)Francavilla al Mare Via della Rinascita, 2Guardiagrele Via Orientale, 17Lanciano Viale Rimembranze, 16Sant’Eusanio del Sangro Corso MargheritaSan Giovanni Teatino Via Aldo Moro, 8 (Fraz. Sambuceto)San Salvo Strada Istonia, 13/15Vasto Via Giulio Cesare, 5
Provincia di PescaraPescara Via Michelangelo, 2 Via Nazionale Adriatica Nord, 126 Viale Marconi, 21
Provincia di TeramoTeramo Piazza Garibaldi, 143alba adriatica Via Mazzini, 124Giulianova Via Orsini, 28 (Fraz. Spiaggia)roseto degli abruzzi Via Nazionale, 286
CaMPaNia
Provincia di avellinoavellino Via Dante Alighieri, 20/24Montoro inferiore Via Nazionale, 161/167
Provincia di BeneventoBenevento Via Delcogliano, 29 Piazza Risorgimento, 11/12Buonalbergo Viale Resistenza, 3San Giorgio la Molara Via S. Ignazio, 7/9Telese Viale Minieri, 143
Provincia di CasertaCaserta Via C. Battisti, 42 Via Douhet, 2/a (c/o Scuola Aeron. Milit.)alvignano Corso Umberto I, 287aversa Via Salvo D’AcquistoCaiazzo Via Attilio Apulo Caiatino, 23
Grazzanise Via del Medico, 1 (c/o Aeronautica Militare)Marcianise Strada Provinciale 22 (Oromare)Piedimonte Matese Via Cesare BattistiPietramelara Piazza S. Rocco, 18Pietravairano Via Padre Cipriani Caruso, s.n.c.Pignataro Maggiore Via TrentoSanta Maria Capua Vetere Via Pezzella Parco ValentinoSuccivo Via De Nicola - angolo Via TintoTeano Viale ItaliaVairano Patenora Via della Libertà, 10 (Fraz. Vairano Scalo) Via delle Rimembranze, 56Vitulazio Via Rimembranze, 37
Provincia di NapoliNapoli Corso Amedeo di Savoia, 243 Via Mergellina, 33/34 Via dell’Epomeo, 427/431 Via Cesario Console, 3C Via Crispi, 2 - ang. Piazza Amedeo Piazza Vittoria, 7 Galleria Vanvitelli, 42 Via Santa Brigida, 36 Via Santo Strato, 20/d Piazza Garibaldi, 127 Via Caravaggio, 52 Via Giovanni Manna, 11 Piazza Giovanni Bovio, 6afragola Corso Garibaldi, 38Boscoreale Via Papa Giovanni XXIII, 16Cardito Piazza S. Croce, 71Casalnuovo di Napoli Via Arcora Provinciale, 60Casamicciola Terme Piazza Marina, 29Cercola Via Domenico Ricciardi, 284/286Forio d’ischia Corso F. Regine, 24/25Grumo Nevano Via Cirillo, 78ischia Porto Via A. de Luca, 113/115Melito Via Roma, 33/43Monte di Procida Corso Garibaldi, 20/22Nola Via Mario de Sena, 201 Piazza Giordano Bruno, 26/27Pozzuoli Corso Vittorio Emanuele, 60 Via Domiziana (c/o Accademia Aeronautica)Qualiano Via S. Maria a Cubito, 146Quarto Via Campana, 286San Giuseppe Vesuviano Via Astalonga, 1Sant’antimo Via Cardinale Verde, 31Torre del Greco Corso Vittorio Emanuele, 77/79Volla Via Rossi, 94/100
EMiLia roMaGNa
Provincia di Forlì - CesenaForlì Viale Vittorio Veneto, 7D/7ECesena Via Piave, 27Cesenatico Viale Roma, 15Forlimpopoli Viale Giacomo Matteotti, 37
Provincia di ravennaravenna Piazza Baracca, 22Cervia Via G. Di Vittorio, 39Faenza Via Giuliano da Maiano, 34
Provincia di riminirimini Via Flaminia, 175 Via Luigi Poletti, 28Bellaria - igea Marina Via Uso, 25/cCattolica Via Fiume, 37Novafeltria Piazza Vittorio Emanuele, 1 riccione Viale Ceccarini, 207San Leo Via Montefeltro, 24Sant’agata Feltria Via Vittorio Emanuele II, 1Santarcangelo di romagna Via Braschi, 36
LaZio
Provincia di FrosinoneFrosinone Via Maria, 63 Via Armando Fabi, 192 (c/o Aeronautica Mil.)
Provincia di romaroma Via Nazionale, 256 Viale Buozzi, 78 Via Croce, 10 Via Cipro, 4/a Via Gasperina, 248 Piazza Mignanelli, 4 Via L. di Breme, 80 Via Prenestina Polense, 145 (Fraz. Castelverde)albano Laziale Via Marconi, 7Fonte Nuova Via Nomentana, 68Guidonia Montecelio Piazza Colleverde (Fraz. Colleverde) Via Nazionale Tiburtina, 122 (Fraz. Villalba) Via Roma, 26Lanuvio Piazza Carlo Fontana, 2Marcellina Via Regina Elena, 35/cMarino Piazzale degli Eroi, 4Palombara Sabina Via Ungheria, 7San Polo dei Cavalieri Via Roma, 12Tivoli Piazza S. Croce, 15 Via di Villa Adriana
MoLiSE
Provincia di CampobassoCampobasso Via Vittorio Veneto, 86Bojano Corso Amatuzio, 86Larino Via Jovine, 12Termoli Via Abruzzi
Provincia di iserniaisernia Via Dante Alighieri, 25Venafro Via Campania, 69
UMBria
Provincia di PerugiaPerugia Via Settevalli, 133 Via Deruta (Fraz. San Martino in Campo) Via P. Soriano, 3 (Fraz. Sant’Andrea delle Fratte)Bastia Umbra Via Roma, 25 - angolo Via de GasperiCittà di Castello Via Buozzi, 22deruta Via Tiberina, 184/186Foligno Viale Arcamone
Giano dell’Umbria Via Roma, 63 (Fraz. Bastardo)Magione Via della Palazzetta (loc. Bacanella)Marsciano Via dei Partigiani, 12Massa Martana Via Roma, 42Montecastello di Vibio Piazza Michelotta di Biordo, 10Todi Piazza del Popolo, 27 Via Tiberina, 64 Via Tiberina, 194 (Fraz. Pantalla)
Provincia di TerniTerni Corso del Popolo, 13acquasparta Via Cesare Battisti, 5/davigliano Umbro Corso Roma - ang. Via S. Maria
www.carime.it
CaLaBria
Provincia di CosenzaCosenza Via Caloprese Via XXIV Maggio, 45 Corso Mazzini, 117 Via F. Migliori (c/o Ospedale) Via degli Stadi, 57/d2 Via dei Mille Corso Telesio, 1acri Via Padula, 95aiello Calabro Via Luigi de Seta, 66/68altomonte Via Aldo Moro, 34amantea Via Elisabetta Noto, 1/3aprigliano Via Calvelli, 5Belvedere Marittimo - Marina Via G. Grossi, 71Bisignano Via Simone da BisignanoCariati Via S. Giovanni, 6Cassano allo Jonio Corso Garibaldi, 30Castrovillari Corso Garibaldi, 79/83Cetraro - Marina Via Lucibello, 10/14Corigliano Calabro - Scalo Via Nazionale, 101/103Corigliano Calabro Via Barnaba Abenante, 7Crosia Via Nazionale, 74/80 (Fraz. Mirto)diamante Via Vittorio Emanuele, 77Fuscaldo Via Maggiore Vaccari, 14Lago Via P. Mazzotti, 10/12/14Lungro Via Skanderberg, 86Montalto Uffugo Corso Garibaldi, 25 Via Manzoni, 57 (Fraz. Taverna)Morano Calabro Via Porto Alegre, 10Mormanno Via San Biase, 1Paola Via del Cannone, 34Praia a Mare Via Telesio, 2rende
Via A. Volta, 15 (Fraz. Quattromiglia)Viale Kennedy, 59/e (Fraz. Roges)
roggiano Gravina Via Vittorio Emanuele II, 136rogliano Via Guarasci, 31rossano Via G. Rizzo, 14rossano - Scalo Via Nazionale, 9/15San demetrio Corone Via D. Alighieri, 10San Giovanni in Fiore Via Gramsci
San Lucido Via Regina Elena, 64/72Saracena Via G. La Pira, 128/130Scalea Via M. Bianchi, 2Spezzano albanese P.zza della Repubblica, 5/1Spezzano della Sila Via Roma Via del Turismo, 77 (Fraz. Camigliatello Silano)Torano Castello Strada Provinciale Variante, 4Trebisacce Via Lutri, 146
Provincia di CatanzaroCatanzaro Piazza Indipendenza, 44 Corso Mazzini, 177/179 Via Nazario Sauro, 17 (Fraz. Lido) Via A. Lombardi - Area Metroquadro Chiaravalle Centrale Piazza Dante, 8Girifalco Via MilanoLamezia Terme Corso Nicotera, 135 Via del MareSersale Via A. GrecoSoverato Corso Umberto I, 167/169Soveria Mannelli Piazza dei Mille, 2Tiriolo Via Fratelli Bandiera
Provincia di CrotoneCrotone Via Mario Nicoletta, 32Cirò Marina Via Mazzini, 17/19Cotronei Via Laghi Silani, 40Petilia Policastro Via Arringa, 178Strongoli Corso Biagio Miraglia, 115
Provincia di reggio Calabriareggio Calabria Corso Garibaldi, 144 Viale Calabria, 197/199 Via Argine Destro Annunziata, 81Bagnara Calabra Corso Vittorio Emanuele II, 167Bianco Via Vittoria, 52Bova Marina Via Maggiore Pugliatti, 2Brancaleone Via ZelanteCinquefrondi Via Roma, 24Cittanova Via Roma, 44Gioia Tauro Via Roma, 52 - ang. Via DuomoLaureana di Borrello Via IV Novembre, 9Locri Via Garibaldi, 71Marina di Gioiosa ionica Via Carlo Maria, 12/14Melito di Porto Salvo Via Papa Giovanni XXIIIMonasterace Marina Via Nazionale Jonica, 113/114Palmi Via Roma, 44Polistena Piazza Bellavista, 1rizziconi Via Capitolo, 13roccella Jonica Via XXV Aprile, 16rosarno Corso Garibaldi, 28San Ferdinando Via Rosarno - ang. Via BrunoSant’Eufemia d’aspromonte Via Maggiore Cutrì, 10/aSiderno C.so Garibaldi (Fraz. Marina)Taurianova Piazza Garibaldi, 17Villa S. Giovanni Viale italia, 30
Provincia di Vibo ValentiaVibo Valentia Viale Matteotti 23/25 Via Emilia, 8 (Fraz. Vibo Marina)arena Piazza Generale Pagano, 1
Mileto Via Cattolica, 50/b-cNicotera Via Luigi Razza, 1Pizzo Calabro Via NazionaleSerra San Bruno Via de Gasperi, 52Soriano Calabro Via GiardinieriTropea Viale Stazione
BaSiLiCaTa
Provincia di MateraMatera Via del Corso, 66 Via Annunziatella, 64/68Bernalda Corso Umberto, 260Ferrandina Via Mazzini, 20Montalbano Jonico Piazza Vittoria, 3Montescaglioso Via Indipendenza, 83Pisticci Via M. Pagano, 25Policoro Via G. Fortunato, 2San Mauro Forte Corso Umberto, 12Tursi Via Eraclea, 2
Provincia di PotenzaPotenza Via Alianelli, 2 Via Angilla Vecchia, 5 Via Dante, 16/20 Via del GallitelloBrienza Viale della Stazione, 102Genzano di Lucania Corso Vittorio Emanuele, 180/184Lagonegro Via Colombo, 25Latronico Corso Vittorio Emanuele II, 105Lauria Piazza Plebiscito, 72Marsicovetere Via Nazionale, 53 (Fraz. Villa d’Agri)Melfi Piazza Mancini AbeleMuro Lucano Via Roma, 60/62Palazzo San Gervasio Via Isonzo, 14rionero in Vulture Via Gallianorivello Via Monastero, 73rotonda Via dei Rotondesi in Argentina, s.n.c.San Fele Via Costa, 12Sant’arcangelo Viale Isabella Morra, 48Senise Via Amendola, 33/39Tito Scalo P.zza Nassirya Rione Mancusi, 20Venosa Via Fortunato, 66 - angolo Via Melfi
CaMPaNia
Provincia di SalernoSalerno Via S. Margherita, 36 Viale Kennedy, 11/13 Via G. Cuomo 29 Via Settimio Mobilio, 26agropoli Via Risorgimento - ang. Via Brunoamalfi Via Fra’ Gerardo Sasso, 10/12angri Via Papa Giovanni XXIII, 48Baronissi Corso Garibaldi, 197Battipaglia Via Salvator Rosa, 98Campagna Via Quadrivio Basso (Fraz. Quadrivio)Castel San Giorgio Via Guerrasio, 42Cava dei Tirreni Piazza Duomo, 2Eboli Via Amendola, 86Marina di Camerota Via Bolivar, 54Mercato San Severino Corso Armando Diaz, 130
Minori Via Vittorio Emanuele, 9Nocera inferiore Via Barbarulo, 41Pontecagnano Piazza Risorgimento, 14roccapiemonte Piazza Zanardelli, 1San Cipriano Picentino Via S. Giovanni, 10 (Fraz. Filetta)Sant’Egidio del Monte albino Via SS. Martiri, 13 (Fraz. San Lorenzo)Teggiano Via Prov. del Corticato (Fraz. Pantano)Vallo della Lucania Via G. Murat
PUGLia
Provincia di BariBari Piazza Umberto I, 85 (Fraz. Carbonara) Via Napoli, 53/55 (Fraz. Santo Spirito) Via Bari, 27/c (Fraz. Torre a Mare) Via Toma, 12 Viale Pio XII, 46-46/a Viale de Blasio, 18 Via Pescara, 16 Via Lembo, 13/15 Via Melo, 151 Corso Mazzini, 138/b Via Tridente, 40/42 Via Calefati, 112 Piazza Cesare Battisti,1 (c/o Università)acquaviva delle Fonti Piazza Garibaldi, 49/52adelfia Via G. Marconi, 11/aaltamura Via Maggio 1648, 22/b-22/cBitetto Piazza Armando Diaz, 38Bitonto Piazza della Noce, 14Bitritto Piazza Aldo Moro, 35Capurso Via Torricelli, 23/25Casamassima Corso Umberto I, 48Castellana Grotte Piazza della Repubblica, 2Conversano Via Padre Michele Accolti Gil 29/a Corato V.le V. Veneto 160/166 - ang. Via Lega LombardaGioia del Colle Corso Garibaldi, 55Giovinazzo Via G. Gentile, 1Gravina in Puglia Corso Vittorio Emanuele, 30/cGrumo appula Via G. d’Erasmo, 12Modugno Piazza Garibaldi, 109Mola di Bari Piazza degli Eroi, 31Molfetta
Via Tenente Fiorini, 9Corso Fornari, 163 A
Monopoli Via Marsala, 2Noci Largo Garibaldi, 51Noicattaro Corso Roma, 8/10/12Polignano a Mare Piazza Aldo Moro, 1Putignano Via Tripoli, 98rutigliano Piazza XX Settembre, 8ruvo di Puglia Via Monsignor Bruni, 14Sannicandro di Bari Piazza IV Novembre, 15Santeramo in Colle Via S. Lucia, 78Terlizzi Via Gorizia, 86/dToritto Piazza Aldo Moro, 48Triggiano Via Carroccio, 5Turi Via A. Orlandi, 15Valenzano Via Aldo Moro
Provincia di Barletta-andria-Traniandria
Piazza Marconi, 6/10 Via Barletta, 137/139
Barletta Piazza Caduti, 21 Largo delle Palme, 8Trani Corso Italia, 17/bBisceglie Via Aldo Moro, 5Canosa di Puglia Via Imbriani, 30/34San Ferdinando di Puglia Via Papa Giovanni XXIII, 44
Provincia di BrindisiBrindisi Corso Roma, 39Cisternino Via Roma, 57Erchie Via Grassi, 19Fasano Via Forcella, 66Francavilla Fontana Via Roma, 24Latiano Via Ercole d’Ippolito, 25Mesagne Via Torre S. Susanna, 1oria Via Mario Pagano, 151ostuni Via L. Tamborrino, 2San Vito dei Normanni Piazza Vittoria, 13Torre Santa Susanna Via Roma, 38
Provincia di FoggiaFoggia Viale Ofanto, 198/c Via Salvatore Tugini, 70/74Cerignola Via Di Vittorio, 83ischitella Corso Umberto I, 111/113Lucera Via IV Novembre, 77Manfredonia Corso Roma, 22/24Margherita di Savoia Corso V. Emanuele, 23San Giovanni rotondo Piazza EuropaSan Severo Via Carso, 10Sant’agata di Puglia Piazza XX Settembre, 11Stornarella Corso Garibaldi, 22Troia Via Vittorio Emanuele, 1Vico del Gargano Via S. Filippo Neri, 10
Provincia di LecceLecce Viale Lo Re, 48 Via Gabriele D’Annunzio, 47/bCampi Salentina Via Garibaldi, 6/8Casarano Via F. Bottazzi - ang. Via Alto AdigeGalatina Via Roma, 26Maglie Piazza O. de DonnoNardò Via Duca degli Abruzzi, 58Squinzano Via Nuova, 25Trepuzzi Corso Umberto I, 114Tricase Via G. Toma, 30Veglie Via Parco Rimembranze, 30
Provincia di TarantoTaranto Corso Umberto I, 71 Corso Italia, 202Castellaneta Piazza Municipio, 7Fragagnano Via Garibaldi, 14Ginosa Corso Vittorio Emanuele, 92Grottaglie Via Matteotti, 72/78Laterza Piazzale Saragat, 11Lizzano Via Dante, 78Manduria Via per Maruggio, 9Martina Franca Via D’Annunzio, 34Massafra Corso Italia, 27/29Palagianello Via Carducci, 11San Giorgio Jonico Via Cadorna, 11Sava Corso Umberto, 110
www.bancavalle.it
LoMBardia
Provincia di BresciaBrescia Via Duca degli Abruzzi, 175 Viale Bornata, 2angolo Terme Piazza degli Alpini, 4artogne Via Geroni, 12Berzo demo Via San Zenone, 9Berzo inferiore Piazza Umberto I, 35/aBienno Piazza Liberazione, 2Borno Piazza Giovanni Paolo II, 13Breno Piazza della Repubblica, 1/2Capo di Ponte Viale Stazione, 16Cazzago S.M. Via del Gallo, 2 (Fraz. Bornato)Cedegolo Via Roma, 26/28Ceto Loc. Badetto, 23Cevo Via Roma, 44Cividate Camuno Via CortiglioneCoccaglio Largo Torre Romana, 4Corte Franca Via Roma, 78Corteno Golgi Via Roma, 1darfo Boario Terme Via Roma, 12 Viale della Repubblica, 2 Corso Lepetit, 77 (Fraz. Fraz. Corna)Edolo Via Porro, 51Esine Piazza Giuseppe Garibaldi, 4/6Gianico Via XXV Aprile, 7/9Malegno Via Lanico, 36Malonno Via G. Ferraglio, 4Marone Via Cristini, 49Niardo Piazza Cappellini, 3ome Piazza Aldo Moro, 7Palazzolo sull’oglio Via XXV Aprile, 23Piancogno Via Vittorio Veneto, 7 (Fraz. Cogno) Via XI Febbraio, 1 (Fraz. Pianborno)Pian Camuno Piazza Giuseppe Verdi, 8Pisogne Via Provinciale, 6 (Fraz. Gratacasolo)Ponte di Legno Via Cima Cadi, 5/7/9Provaglio d’iseo Via Roma, 12 Via S. Filastro, 18 (Fraz. Provezze)rodengo Saiano Via Guglielmo Marconi, 11/brovato Corso Bonomelli, 13/17Sonico Via Nazionale (c/o c.c. Italmark)Temù Via Roma, 71/73Torbole Casaglia Piazza Repubblica, 25/26Travagliato Via Brescia, 44Vezza d’oglio Via Nazionale, 65
Provincia di Bergamoardesio Piazza Alessandro Volta, 8/9Casazza Piazza della Pieve, 1Castione della Presolana P.zza Martiri di Cafalonia, 1Clusone Viale Gusmini, 47Costa Volpino Via Cesare Battisti, 34Lovere Via Gregorini, 43rogno Piazza Druso, 1Sarnico Via Roma, 68Sovere Via Roma, 20Villongo Via J. F. Kennedy, 5
Provincia di Comodongo Via Statale, 77Menaggio Via Lusardi, 74/76
Provincia di SondrioSondrio Via Trento, 50 - ang. Via Alessiaprica Corso Roma, 238Bormio Via Don Peccedi, 11Chiavenna Via Maloggia, 1Grosio Via Roma, 1Livigno Via Dala Gesa, 141/aMorbegno Piazza Caduti per la Libertà, 9Piantedo Via Nazionale, 875 Tirano P.zza Marinoni, 4Villa di Tirano Via Roma, 20
www.ubibancapi.it
aBrUZZo
L’aquila Via F. SaviniPescara Piazza Rinascita, 6/9
CaMPaNiaNapoli Via Santa Brigida, 63Pomigliano d’arco Via Roma, 31Caserta Corso Trieste, 170Salerno Via SS. Martiri Salernitani, 25
LiGUria
Genova Via Roma, 5 Via XX Settembre, 33
LaZio
roma P.zza Giuliano della Rovere, 9-11/a (Fraz. Lido di Ostia) Via Vincenzo Bellini, 27Latina Viale Le Corbusier, snc
LoMBardia
Milano Via Silvio Pellico, 10/12 Corso Giacomo Matteotti, 1Brescia Via Cefalonia, 74Cremona Via Rialto, 20Monza Via Girolamo Borgazzi, 7
PiEMoNTE
Torino Corso Re Umberto I, 47
PUGLia
Bari Via Nicolò dell’Arca, 9-9a
ToSCaNa
Firenze Viale G. Matteotti, 42
arezzo Via XXV Aprile, 28-28/a
San Giovanni Valdarno Corso Italia, 117
Grosseto Via Giacomo Matteotti, 32
Livorno Via Scali d’Azeglio, 46/50
- ang. Via Cadorna
Pisa Via G.B. Niccolini, 8/10
UMBria
Terni Via della Bardesca, 7/11
www.iwbank.it
Milano
Corso Europa, 20
Via Cavriana, 20
www.ubibanca.lu
LUSSEMBUrGo
37/a, Avenue J.F. Kennedy, L.
GErMaNia
Monaco Prannerstrasse, 11
SPaGNa
Madrid
Torre Espacio - Planta 45
Paseo de la Castellana, 259
www.bdg.ch
SViZZEra
Losanna Avenue du Théâtre, 14
Lugano Piazza Riforma, 3
Financial Calendar
Calendar of corporate events of UBI Banca for 2013
Date Event
12th November 2013 Approval of Interim Financial Report as at and for
the period ended 30th September 2013.
The date of the presentation of accounting data to the financial community will be
communicated during the course of the financial year.
Contacts
Contacts
All information on periodic financial reporting is available on the website www.ubibanca.it
Investor relations: Tel. 035 3922217 Email: [email protected]
Institutional communications and relations with the press Tel. 030 2433591
Email: [email protected]
Registered shareholders’ office: Tel. 035 3922312 Email: [email protected]