Translation from the Italian original which remains the
10 th financial year
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 as at 5 th February 2013: euro 2,254,367,552.50 fully paid up
Letter to the registered and non-registered shareholders ........................................................ 5
UBI Banca: company officers .................................................................................................. 9
UBI Banca Group: branch network as at 31 st December 2012 ................................................ 10
UBI Banca Group: the main investments as at 31 st December 2012 ....................................... . 11
UBI Banca Group: principal figures and performance indicators ............................................. 13
The rating .............................................................................................................................. 14
Notice of call .......................................................................................................................... 16
CONSOLIDATED FINANCIAL STATEMENTS OF THE UBI BANCA GROUP AS AT AND FOR
THE YEAR ENDED 31 ST DECEMBER 2012
CONSOLIDATED MANAGEMENT REPORT ................................................................................... 19
▪ The macroeconomic scenario ............................................................................................ 20
▪ Significant events that occurred during the year ................................................................ 31
▪ Commercial activity ........................................................................................................... 41
▪ The distribution network and market positioning ............................................................. 59
▪ Human resources ............................................................................................................. 67
▪ The scope of consolidation ................................................................................................ 76
▪ Reclassified consolidated financial statements, reclassified income statement
net of the most significant non-recurring items and reconciliation schedules ..................... 86
▪ The consolidated income statement ................................................................................... 94
▪ General banking business with customers: funding ........................................................... 107
- Total funding ............................................................................................................................... 107
- Direct funding .............................................................................................................................. 108
- Indirect funding and assets under management ........................................................................... 114
▪ General banking business with customers: lending .......................................................... 117
- Performance of the loan portfolio ................................................................................................. 117
- Risk .............................................................................................................................................. 120
▪ The interbank market and the liquidity situation ............................................................... 126
▪ Financial activities ........................................................................................................... 130
▪ Equity and capital adequacy ............................................................................................. 149
▪ Research & Development .................................................................................................. 153
▪ The system of internal control .......................................................................................... 154
▪ Transactions with related parties ...................................................................................... 155
▪ Consolidated companies: the principal figures ................................................................... 158
▪ The performance of the main consolidated companies ....................................................... 162
▪ Other information ............................................................................................................. 193
- Treasury shares ........................................................................................................................... 193
- Litigation ...................................................................................................................................... 193
- Inspections .................................................................................................................................. 194
- Antitrust authority provisions ...................................................................................................... 196
- Tax aspects .................................................................................................................................. 196
- Investor relations and external communication ............................................................................ 205
- Social and environmental responsibility ....................................................................................... 207
- Compliance with personal data protection regulations .................................................................. 209
▪ Principal risks and uncertainties to which the UBI Banca Group is exposed ...................... 210
▪ Subsequent events occurring and the business outlook
for consolidated operations .......................................................................................... 218
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE SENIOR OFFICER
RESPONSIBLE FOR PREPARING THE COMPANY ACCOUNTING DOCUMENTS ............................. 219
INDEPENDENT AUDITORS’ REPORT ................................................................................ 221
CONSOLIDATED FINANCIAL STATEMENTS ........................................................................ 224
▪ Consolidated balance sheet ............................................................................................... 225
▪ Consolidated income statement ........................................................................................ 226
▪ Consolidated statement of comprehensive income ............................................................. 227
▪ Statement of changes in consolidated equity .................................................................... 228
▪ Consolidated statement of cash flows ............................................................................. 230
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................... 232
▪ Part A – Accounting policies ............................................................................................. 233
- A.1 – General part ........................................................................................................................ 233
- A.2 – The main items in the financial statements .......................................................................... 250
- A.3 – Information on fair value ...................................................................................................... 276
▪ Part B – Notes to the consolidated balance sheet ............................................................... 281
- Assets ........................................................................................................................................... 281
- Liabilities ..................................................................................................................................... 313
- Other information ......................................................................................................................... 335
▪ Part C – Information on the consolidated income statement ............................................... 338
▪ Part D – Consolidated statement of comprehensive income ............................................... 359
▪ Part E – Information on risks and the relative hedging policies ......................................... 360
▪ Part F – Information on consolidated equity ...................................................................... 466
▪ Part G – Business combination transactions concerning companies or lines of business .... 474
▪ Part H – Transactions with related parties ......................................................................... 475
▪ Part I – Share-based payments ......................................................................................... 480
▪ Part L – Segment reporting ............................................................................................... 482
ATTACHMENT TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 484
Disclosures concerning the fees of the independent auditors and for services other
than auditing in compliance with Art. 149 duodecies of Consob Issuers’ Regulations ......... 484
SEPARATE FINANCIAL STATEMENTS OF UBI BANCA SCPA AS AT AND FOR THE YEAR
ENDED 31 ST DECEMBER 2012
MANAGEMENT REPORT ............................................................................................... 1*
▪ UBI Banca: principal figures and performance indicators ................................................. 2*
▪ The UBI Banca organisation chart ..................................................................................... 3*
▪ The macroeconomic scenario ............................................................................................ 4*
▪ Human resources ............................................................................................................. 4*
▪ Reclassified financial statements, reclassified income statement net of the most significant
non-recurring items and reconciliation schedules ............................................................. 6*
▪ The income statement ....................................................................................................... 14*
▪ General banking business ................................................................................................. 25*
- Funding ....................................................................................................................................... 25*
- Lending ........................................................................................................................................ 28*
- Operations on the interbank market ............................................................................................. 31*
▪ Financial activities ........................................................................................................... 34*
▪ Equity and capital adequacy ............................................................................................ 42*
▪ Relations with Group member companies .......................................................................... 44*
▪ Research & Development .................................................................................................. 44*
▪ The internal control system .............................................................................................. 44*
▪ Transactions with related parties ...................................................................................... 45*
▪ Share performance and shareholder structure ................................................................... 46*
- Share performance ....................................................................................................................... 46*
- Report on corporate governance and the ownership structure ...................................................... 49*
- Treasury shares ........................................................................................................................... 51*
- Report on the admission of new registered shareholders ............................................................... 51*
- Report on mutual objects .............................................................................................................. 51*
- De jure and delegated powers of the corporate bodies .................................................................. 53*
▪ Other information ............................................................................................................. 54*
- Litigation ...................................................................................................................................... 54*
- Tax aspects .................................................................................................................................. 54*
- Compliance with personal data protection regulations .................................................................. 54*
- Complaints .................................................................................................................................. 54*
▪ Principal risks and uncertainties to which UBI Banca is exposed ....................................... 56*
Subsequent events and the business outlook for operations ............................................. 56*
▪ Proposal for the allocation of profit for the year and dividend distribution .......................... 57*
STATEMENT OF THE CHIEF EXECUTIVE OFFICER AND OF THE SENIOR OFFICER
RESPONSIBLE FOR PREPARING THE COMPANY ACCOUNTING DOCUMENTS ............................ 58*
INDEPENDENT AUDITORS’ REPORT ................................................................................ 60*
SEPARATE FINANCIAL STATEMENTS .............................................................................. 64*
▪ Balance sheet .................................................................................................................... 65*
▪ Income statement ............................................................................................................. 66*
▪ Statement of comprehensive income ................................................................................. 67*
▪ Statement of changes in equity .......................................................................................... 68*
▪ Statement of cash flows .................................................................................................... 70*
NOTES TO THE ACCOUNTS .......................................................................................... 72*
▪ Part A – Accounting policies ............................................................................................. 73*
- A.1 – General part ........................................................................................................................ 73*
- A.2 – The main items in the financial statements .......................................................................... 79*
- A.3 – Information on fair value ...................................................................................................... 103*
▪ Part B – Notes to the balance sheet .................................................................................... 105*
- Assets ........................................................................................................................................... 105*
- Liabilities ..................................................................................................................................... 142*
- Other information ........................................................................................................................ 163*
▪ Part C – Notes to the income statement ............................................................................. 166*
▪ Part D – Comprehensive income ....................................................................................... 188*
▪ Part E – Information on risks and the relative hedging policies .......................................... 190*
▪ Part F – Information on equity ........................................................................................... 286*
▪ Part G – Business combination transactions concerning companies or lines of business ... 293*
▪ Part H – Transactions with related parties ........................................................................ 295*
▪ Part I – Share based payments ......................................................................................... 303*
▪ Part L – Segment Reporting ............................................................................................... 305*
ATTACHMENTS TO THE SEPARATE FINANCIAL STATEMENTS ............................................... 306*
▪ List of real estate properties .............................................................................................. 307*
▪ Convertible bonds ............................................................................................................ 312*
▪ Disclosures concerning the fees of the independent auditors and services other than
auditing in compliance with Art. 149 duodecies of Consob Issuers’ Regulations ................. 313*
REPORT ON THE CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE OF UBI BANCA SCPA .... 1**
REPORT OF THE SUPERVISORY BOARD TO THE SHAREHOLDERS’ MEETING
in compliance with Art,153, paragraph 1 of Legislative Decree No. 58 of 24 th February 1998
and article 46, paragraph 1, letter h) of the Articles of Association .............................................. 73**
REPORTS ON THE OTHER ITEMS ON THE AGENDA OF THE SHAREHOLDERS’ MEETING................. 89**
GLOSSARY ..................................................................................................................................................... 135**
BRANCH NETWORK OF THE UBI BANCA GROUP
Calendar of corporate events of UBI Banca for 2013
DELIBERAZIONI ASSUNTE DALL’ASSEMBLEA DEL ........ 2012
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.
Letter to the registered and non-registered
Dear registered and non-registered shareholders,
The Chairman of the Supervisory Board, Corrado Faissola, passed away on 20 th December 2012.
With his passing we have lost an immeasurably well-respected banker who was a driving force
behind the creation of UBI Banca and left a permanent mark on the history of the Group and the
Italian banking industry as a whole.
We would like to remember him in light of the friendship that flowered in the years spent working
together. This friendship was a precious gift reserved for those who worked alongside him on a daily
basis in developing programmes to shape the future. Indeed, his basic inclination was to open up
unreservedly to anyone who was prepared to exchange ideas freely and commit to working towards
shared goals with the same intensity that he himself demonstrated.
Corrado Faissola was an unwavering follower of a strict personal code, fundamentally geared
towards espousing an overall ethical position that governed both life and work based on the principle
that the common good should never be supplanted by the possibility of delivering a result, no matter
how desirable. He worked in banking for many years, and was a shining example of tenacity,
wisdom and acumen.
He was one of the leading advocates of the aggregation that gave birth to UBI Banca: he initially filled
the position of Deputy Chairman of the Management Board and subsequently became Chairman of
the Supervisory Board. In these roles we had the opportunity to perceive his talents as an enlightened
banker, an inspirational strategist, a source of knowledge and insight into the world of banking and
credit, a keen judge of programmes and of people.
As a token of our esteem and affection, and in recognition of his great contribution, we have created a
scholarship in his name to be granted to a deserving student of economy and finance at the University
of Brescia. We believe that this practical gesture aimed at honouring his memory through providing
assistance to the next generation is something he would have genuinely appreciated.
We would also like to take this opportunity to remember Giuseppe Camadini, a Member of the
Management Board of UBI Banca and a figure of authority in the business and financial world, who
died on 25 th July 2012.
As a young notary, he soon dedicated himself to a career in the banking sector, initially joining Banca
di Valle Camonica and then moving to Banca San Paolo, where he became Chairman. Following the
merger with CAB, he promoted Banca Lombarda, where he held positions on the Boards of Banco di
Brescia and Banca di Valle Camonica itself. He continued to fill important roles following the
formation of the UBI Banca Group, on the Management Board of the Parent from 2007, and on the
Boards of Banco di Brescia, Banca di Valle Camonica and Banca Regionale Europea.
A long-standing Director and then Chairman of Cattolica Assicurazioni, Giuseppe Camadini was first
and foremost a man of faith and culture.
A tireless instigator of and participator in good works and charity initiatives, he played a driving role
in the leading Catholic institutions in the Brescia area for decades. Many of these institutions were
entrusted to his supervision and became his responsibility.
As President of Fondazione Tovini and Istituto Paolo VI, and Vice-President of Editrice La Scuola, he
helped preserve the memory and continue the good works of Antonio Tovini (founder of Banca di Valle
Camonica and Banco Ambrosiano) and of Pope Paul VI, tasks which represented his life’s work.
We would like to remember him, not only for his constant and unstinting support for the decisions and
strategic direction of UBI Banca, but also for his human characteristics: Giuseppe Camadini was a
man of gentle ways and refined thinking, whose life was inspired by extraordinary values, a
constructive spirit and the harmonious manner in which he fulfilled the roles and responsibilities
entrusted to him.
Dear registered and non-registered shareholders,
It is hard to abandon our affectionate thoughts in recognition of those that have left us in order to talk
about the situation at the Bank, but this is the task that now lies before us.
In 2012, the real economy weakened further and Italy was hit particularly hard. Italian GDP shrank
for the sixth consecutive quarter, although pressure on sovereign debts nevertheless gradually eased
and the spread on government bonds reduced as a consequence.
In this context, the UBI Banca Group continued to focus further on internal reorganisation, with priorty
given to a strong balance sheet and a balanced capital structure, as the right foundations for stability
and above all for future growth.
The year 2012 saw a continuation of the process already begun in preceding years, with a series of
major initiatives aimed at bringing about immediate further cuts to structural costs:
simplification of how the Group functions, with an overall reduction in the size of the branch
network and streamlining of internal units with shorter lines of lines in the network banks, the
Parent and UBI.S;
following agreements signed with trade unions in November 2012 and February 2013, a voluntary
redundancy programme was implemented for 736 staff in the first quarter of this year, while an
additional programme to suspend work/reduce working hours was launched. Demand from the
workforce for both programmes far exceeded the company’s target.
As part of those same agreements, the Bank undertook to transform employment contracts from
temporary to permanent or to recruit 283 young people in order to support generation turnover;
changes to the service model for private and corporate banking customers, with unification of
operating units in order to serve both types of customer and the creation at the same time of
combined units (Private & Corporate Unity) that came into operation at the beginning of 2013;
the coporate structure of the Group was streamlined through a series of mergers completed during
the course of the year: Banco di San Giorgio was merged into BRE, B@nca 24-7 was merged into
UBI Banca (after the prior contribution to Prestitalia of the salary and pension backed lending
operations ); and SILF was merged into the Parent.
On 6 th February 2013 work was begun on the merger of Centrobanca into UBI Banca, which
should be completed by the end of June.
Capital ratios improved significantly, as a result of the adoption of internal models for the calculation
of capital requirements (authorisation was received from the Bank of Italy for the corporate segment in
May 2012, while the validation process for the retail segment is ongoing), efforts made to optimise
risk weighted assets and capital management operations that were undertaken. The ratios now
remain more than adequate to support core banking activity: the core tier one ratio increased by +173
basis points to 10.29% and the total capital ratio increased by +251 basis points to 16.01%.
Moreover, as at 30 th June 2012 the Group had already achieved the ratios recommended by the
European Banking Authority (EBA), with a core tier one ratio of 9.16% at the end of the year, which
incorporated the impact of the fair valuation of government securities held in portfolio as at 30 th
September 2011 (-€868 million).
Direct funding from retail customers – traditionally one of the Group’s strong points, but subject to
increasing competitive pressure – amounted to €80.3 billion at year end (+€0.8 billion over the twelve
months). This result was driven by bonds, term deposits (which are both types of funding that help to
stabilise liabilities) and also by online current accounts at IWBank.
Total customer funding comprises over 80% of the Group’s direct funding and finances 86.5% of its
On the institutional front, the healthy liquidity position ensured that the Group could manage its
financial position without needing to renew its maturing medium to long-term funding, both because
renewal was not needed to maintain the structural balance between assets and liabilities and
because the conditions for renewing this financing were still too expensive. It was not until October
that UBI Banca returned to the international markets with a benchmark issue of €750 million.
Indirect funding, influenced by the so-called market effect, or in other words by the volatility of
financial markets, was €70.2 billion (-2.6%), of which assets under management (consisting of mutual
investment funds, managed customer portfolios, insurance policies and units in pension funds)
exceeded €38 billion (+3.3%) as a result of the success of the new UBI Pramerica sicav, which was
placed on the market during the year.
At the end of December the loan book amounted to €92.9 billion, 70% of which was disbursed in
Lombardy and 72% of which came from medium to long-term lending.
The Group’s strong position was nevertheless affected by a reduction in volumes (-6.8% compared to
2011), attributable on the one hand to weak demand from households and businesses still in the grip
of a serious recession and on the other to the impact of action taken to focus activity increasingly on
network bank customers, thereby strengthening the Group’s traditional links with local areas and
The Group has in fact completed the disposal of third party networks, with a consequent reduction in
lending to non-captive customers which involved all of its product companies, especially UBI Leasing.
It also continued to reduce its exposure to the large corporate segment.
These initiatives allowed the group to rebalance its lending to funding ratio, which improved to 94%
(97% at the end of 2011).
LIQUIDITY AND THE SECURITIES PORTFOLIO
The easing of pressures on sovereign debt allowed the wholesale market to start functioning again,
although the situation is not yet back to normal.
UBI Banca – which was allotted €12 billion from the two LTRO auctions held by the ECB in December
2011 and February 2012 – made a series of investments in government securities, while also
increasing its liquidity reserves.
At the end of the year, the financial asset portfolio had reached €21.4 billion, 84% of which consisted
of Italian government securities, and the Group continued to shun any exposure to “at risk” countries
or product types. As an example, the deliberately limited use of derivative contracts is entirely
dedicated to hedging items carried on the balance sheet or to trading with customers as
counterparties, which are then adequately balanced on the market.
The stabilisation of the operating environment, together with actions taken over the last two years to
tackle the systemic crisis, have allowed the group to achieve a liquidity position that is more than
satisfactory and which already complies with the provisions of Basel III regulations.
The Group ended the year with profit of approximately €83 million, having incurred €152 million of
expenses for redundancy incentive schemes in relation to agreements signed with trade unions in
November 2012 and February 2013.
This result was achieved as a result of revenues from core banking activities holding up well, which
led to operating income of €3.5 billion (+2.6% compared to the previous year, partly due to the overall
contribution of €257 million from financial activities), while operating expenses were contained to
approximately €2.3 billion, down by 5.2%, with further improvements expected as a result of the
initiatives launched in 2012.
These trends have driven an increase of 20% in net operating income, which came to nearly €1.3
billion, and an increase of 15% in pre-tax profit from continuing operations to €323 million.
On the income side, however, pressure on net interest income continued (-7.7% to €1.9 billion), which,
despite the guaranteed support from interest on the securities portfolio, was affected by the persistent
decline in market interest rates (the average one month Euribor rate was 0.34% in 2012 compared to
1.19% in 2011) and lower volumes of lending caused by weak demand for credit and by the selective
policies already described previously. Fee and commission income performed well, more or less
unchanged at €1.2 billion.
All components of operating expenses recorded a year-on-year fall, to reach the lowest level in the last
The current recession is reflected in the loan loss rate (€847 million), which rose to 91 basis points
(from 61 bps in 2011). However, this nevertheless confirmed UBI Banca’s place as one of the best
Italian banks in terms of asset quality: net non-performing loans as a percentage of the loan book
stood at 3.18%, compared to an average of 3.35% for the sector nationally.
In compliance with supervisory authority recommendations, the Management Board has decided to
propose a dividend of €0.05 per share. The total dividend payment will be €45 million, to be drawn
from the profit of the Parent.
Dear registered and non-registered shareholders,
The Annual General Meeting of the Shareholders scheduled for 19 th and 20 th April will be called upon
to elect members of the Supervisory Board, which will subsequently appoint a Management Board for
the next three-years.
The outgoing Directors have presided over the formation and subsequent consolidation of a major
Group of co-operative origins and one of the leading banks in the country. The key features of this
legal and financial model are democratic governance, retail lending and retail funding, closeness to
local people and a strong sense of social responsibility towards the communities served. Even today
these still remain indispensable requirements for enuring that developments in the banking system go
hand in hand with providing meaningful concrete support to small and medium-sized businesses in
the community to enable balanced economic development that is still mindful of social growth. We do
this in the context of our fundamental principle of mutual assistance, which unfortunately not always
These values, combined with a firm desire for independence and autonomy, will be passed on to the
new candidates, who will be selected and proposed by the Appointments Committee in a list
approved by the outgoing Supervisory Board. The list bears many new names, incorporating a more
modern outlook (with the presence of five female candidates) and new personal characteristics (the
average age of the candidates is 58) which will help enrich the composition of the next Supervisory
Board, ready to meet the challenges of an increasingly difficult and competitive market environment.
However, if it is to look to the future with confidence it must never overlook not only the basic tenets of
banking, but also the fundamental principles that underpin our identity and our local mission.
27 th March 2013
of the Management Board
Senior Deputy Chairman
of the Supervisory Board
UBI Banca: company officers
Supervisory Board (appointed by a Shareholders’ Meeting on 24 th April 2010)
Chairman Corrado Faissola (*)
Senior Deputy Chairman
Pietro Gussalli Beretta
Enrico Minelli (**)
Toti S. Musumeci
Armando Santus (**)
Management Board (appointed by the Supervisory Board on 27 th April 2010)
Chief Executive Officer
Giampiero Auletta Armenise
Giuseppe Camadini (***)
Gian Luigi Gola (****)
Senior Deputy General Manager
Deputy General Manager
Deputy General Manager
Deputy General Manager
Deputy General Manager
Senior Officer Responsible in accordance with
Art. 154 bis of the Consolidated Finance Act
DELOITTE & TOUCHE Spa
(*) Deceased 20 th December 2012.
(**) Appointed by a shareholders meeting on 28 th April 2012.
(***) Deceased 25 th July 2012.
(****) Appointed by the Supervisory Board on 30 th June 2010.
UBI Banca Group: branch network as at 31 st
UBI Banca Group: the main investments as
at 31 st December 2012
UBI Banca Group:
key figures and performance indicators 1
31.12.2012 31.12.2011 31.12.2010 31.12.2009 31.12.2008
Net loans and advances to customers/total assets 70.1% 76.8% 78.0% 80.1% 79.0%
Direct funding from customers/total liabilities 74.6% 79.2% 81.8% 79.5% 80.0%
Net loans and advances to customers/direct funding from customers 94.0% 97.0% 95.4% 100.8% 98.7%
Equity (including profit/loss for the period )/total liabilities 7.4% 6.9% 8.4% 9.3% 9.1%
Assets under management/indirect funding from private individual customers 54.3% 51.2% 54.6% 53.2% 53.1%
(total assets - intangible assets) /(equity inclusive of profit (loss) for the year + equity attributable to
non-controlling interests - intangible assets) 17.0 18.5 19.3 17.1 17.3
ROE (Profit for the year/equity including profit (loss) for the year) 0.8% 3.9% 1.6% 2.4% 0.6%
[profit for the year/tangible equity (equity inclusive of profit (loss), net of intangible assets)] 1.2% 5.9% 3.1% 4.6% 1.2%
ROA (Profit for the year/total assets) annualised 0.06% 0.27% 0.13% 0.22% 0.06%
Cost/Income ratio (operating expenses/operating income) 64.3% 69.5% 70.6% 64.4% 63.9%
Personnel expense/operating income 39.0% 41.4% 41.5% 37.5% 38.8%
Net impairment losses on loans/net loans to customers (loan losses) 0.91% 0.61% 0.69% 0.88% 0.59%
Net interest income/operating income 52.8% 61.7% 61.3% 61.5% 68.7%
Net fee and commission income/operating income 33.5% 34.7% 33.9% 31.1% 33.3%
Net result on financial activities/operating income 7.3% 0.2% 1.0% 3.2% -5.9%
Net non-performing loans/net loans to customers 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) 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 relative impairment losses 57.63% 59.06% 63.62% 66.10%
Net non-performing + net impaired loans/net loans to customers 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) 29.26% 30.55% 34.89% 35.93% 38.22%
CAPITAL RATIOS Basel 2 AIRB as at 31st December 2012
Tier 1 ratio (tier 1 capital/total risk weighted assets) 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 weighted assets) 10.29% 8.56% 6.95% 7.43% 7.09%
Total capital ratio [(regulatory capital+tier 3/total risk weighted assets)] 16.01% 13.50% 11.17% 11.91% 11.08%
Regulatory capital (in thousands of euro) 12,203,619 12,282,153 10,536,200 10,202,555 9,960,812
Tier one capital after the application of prudential filters and specific deductions 8,263,720 8,276,278 7,047,888 6,816,876 6,944,723
Risk weighted assets 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 period attributable to the shareholders of the Parent 82,708 (1,841,488) 172,121 270,099 69,001
Profit (loss) for the period attributable to the shareholders of the Parent normalised 97,324 111,562 105,116 173,380 425,327
Operating income 3,526,311 3,438,339 3,496,061 3,906,247 4,089,739
Operating expenses (2,266,660) (2,389,626) (2,468,564) (2,514,347) (2,611,348)
Net loans and advances to customers 92,887,969 99,689,770 101,814,829 98,007,252 96,368,452
of which: net non-performing loans 2,951,939 2,481,417 1,939,916 1,332,576 848,671
net impaired loans 3,602,542 2,533,780 2,032,914 1,845,073 1,160,191
Direct funding from customers 98,817,560 102,808,654 106,760,045 97,214,405 97,591,237
Indirect funding from customers 70,164,384 72,067,569 78,078,869 78,791,834 74,288,053
of which: assets under management 38,106,037 36,892,042 42,629,553 41,924,931 39,430,745
Total funding from customers 168,981,944 174,876,223 184,838,914 176,006,239 171,879,290
Equity (inclusive of profit/loss for the year) 9,737,882 8,939,023 10,979,019 11,411,248 11,140,207
Intangible assets 2,964,882 2,987,669 5,475,385 5,523,401 5,531,633
Total assets 132,433,702 129,803,692 130,558,569 122,313,223 121,955,685
Branches in Italy 1,727 1,875 1,892 1,955 1,944
Total personnel at the end of the period
(actual employees in service + workers on agency leasing contracts) 19,086 19,407 19,699 20,285 20,680
Total personnel average (*)
(actual employees in service + workers on agency leasing contracts) 18,490 18,828 19,384 20,185 20,606
Financial advisors 672 713 786 880 924
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 Consolidated Management 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.
Information on the share is reported in the relative section of the UBI Banca Management Report.
(*) Part time employees have been calculated within total average personnel numbers according to convention on a 50% basis.
As governments were perceived to fail to come to an agreement during the year over the reform
of European governance and over improvements to the mechanisms for managing the crisis in
the euro area, rising pressures on sovereign debts and the growing difficulties with the
macroeconomic environment led rating agencies to revise their ratings for Italy and Italian
banks, including UBI Banca, several times.
On 27 th January 2012, as part of action taken on six eurozone countries (set on rating watch
negative on 16 th December 2011), Fitch Ratings lowered its rating for Italy from A+ to A-
(down two notches), keeping it on outlook negative.
On the following 6 th February 2012, this agency removed its negative rating watches assigned
on 20 th December 2011 and made a series of cuts to the ratings of the main Italian banks. For
UBI Banca, its long-term and viability ratings were reduced from A-/a- to BBB+/bbb+ (-1
notch), again with a negative outlook.
On 14 th December Fitch confirmed its ratings and outlook negative for Italy 1 and on 29 th
January 2013 it revised its ratings for the four main Italian banks, including UBI Banca,
whose ratings (and the relative outlooks) all remained unchanged.
On 13 th July Moody’s intervened for the second time in 2012 on its Italian sovereign debt
rating, cutting it by two notches from A3 to Baa2 and maintaining its negative outlook. In
consideration of the magnitude of the changes already made to the ratings of Italian banks on
the preceding 14 th May, the adjustments that the agency made to take account of the new
ratings on sovereign debt were very limited and affected just ten banks, which did not include
As already reported, as part of extensive measures which affected the sovereign ratings of nine
European countries, on 13 th February 2012 this agency downgraded its rating on Italy’s longterm
debt from A2 to A3 (down one notch), again with a negative outlook and on the following
15 th February it announced a review for possible downgrading of 114 financial institutions
operating in 16 European countries.
This review was concluded for Italy on 14 th May and was accompanied by a general reduction
in the long-term ratings of 26 Italian banks, a reduction which in almost all cases reflected a
lower rating by Moody’s on the financial strength of single banks. In this context UBI Banca’s
bank financial strength rating was cut from C- (baa1) to D+ (baa3), while its long-term rating
fell from A3 to Baa2. In both cases the outlook was kept on negative.
On 3 rd August 2012, Standard & Poor’s released the results of a revision of the Italian
banking sector (which involved 32 financial institutions) that it performed to take account of
the deterioration of the outlook for credit risk in the context of a recession which is potentially
more severe than originally expected. In this context, the long-term rating for UBI Banca fell
from BBB+ to BBB (down by one notch), again with a negative outlook.
As a result of the sovereign debt downgrade of two notches announced on 13 th January (from
A to BBB+ with a negative outlook) and a consequent lowering of the Italian BICRA rating
(from three to four), this agency had already taken a series of negative measures on 10 th
February 2012 involving 37 Italian financial institutions, including UBI Banca, whose longterm
rating had been downgraded from A- to BBB+ (down one notch), with a negative outlook.
The tables below summarise the ratings currently assigned to the Group by the three
1 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 8 th March 2013 this agency further
downgraded its sovereign rating to BBB+ again with outlook negative.
STANDARD & POOR’S
Short-term Counterparty Credit Rating (i) A-2
Long-term Counterparty Credit Rating (i)
Stand Alone Credit Profile (SACP) (ii)
RATINGS ON ISSUES
Senior unsecured debt
Subordinated debt (Lower Tier 2)
Preference shares (former BPB-CV and former
French Certificats de Dépôt Programme A-2
(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 – C: worst rating)
Long-term: ability to pay interest and principal on debt with
a maturity of longer than one year (AAA: best rating – D:
(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.
Long-term debt and deposit rating (I)
Short-term debt and deposit rating (II)
Bank Financial Strength Rating (BFSR) (III) D+
Baseline Credit Assessment (BCA) (IV)
Outlook (deposit ratings)
Outlook (Bank Financial Strength Rating)
RATINGS ON ISSUES
Lower Tier 2 subordinated
(former BPB-CV and Banca Lombarda)
Euro Commercial Paper Programme
(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
(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.
Short-term Issuer Default Rating (1)
(1) The ability to repay debt maturing in the short-term (duration
of less than 13 months)
(F1+: best rating – D: worst rating)
Long-term Issuer Default Rating (2)
Viability Rating (3)
Support Rating (4) 2
Support Rating Floor (5)
Outlook (Long-term Issuer Default Rating) Negative
RATINGS ON ISSUES
Senior unsecured debt
Lower Tier 2 subordinated
Euro Commercial Paper Programme
(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
(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 (a: best rating - d:
(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.
Notice of call 1
An Ordinary General Meeting of the Shareholders of Unione di Banche Italiane Scpa is convened in first
call on Friday 19 th April 2013 at 5:00, p.m. at the registered address of the bank, at No. 8 Piazza Vittorio
Veneto, Bergamo, and in second call on Saturday 20 th April 2013 at 9:30 a.m. at the New Bergamo
Trade Fair, in Via Lunga, Bergamo to discuss and resolve on the following
1) Appointment of the members of the Supervisory Board and of the Chairman and Senior Deputy
Chairman for the three-year period 2013-2014-2015 and the determination of the related
remuneration in accordance with the Articles of Association.
2) Proposal for the allocation and distribution of profits, after first presenting the separate and
consolidated financial statements as at and for the year ended 31 st December 2012.
3) Report on remuneration.
4) Proposal for setting remuneration policies for members of the Management Board.
5) 2013 incentive scheme based on financial instruments:
proposal to pay a portion of the variable remuneration of “top management” and the “highest
management level of the control functions” by assigning ordinary shares of the Parent UBI Banca to
The subscribed and paid up share capital of UBI Banca Scpa amounts to Euro 2,254,367,552.5 consisting of
901,747,021 shares with a nominal value of Euro 2.50 each. At the date of this notice UBI Banca possesses 1,700,000
The total number of registered shareholders with the right to vote is 87,150.
Persons wishing to participate in Shareholders Meetings, to exercise voting rights and to be eligible for election to
corporate bodies must have been a registered shareholder for at least 90 (ninety) days from the date of registration in
the shareholders’ register.
Legitimate entitlement to participate in Shareholders’ Meetings and to exercise voting rights is certified by a
communication to the Bank, performed – pursuant to Art. 83-sexies of Legislative Decree No. 58 of 24 th February 1998
– by the relative intermediary, a member of the Monte Titoli Spa centralised management system, on the basis of its
accounting records, in favour of the party holding the right to vote. In this regard, Registered Shareholders for whom
the said communication has been made to the Bank by the end of the third market trading day prior to that set for the
Shareholders’ Meeting in first call may attend the Shareholders’ Meeting, in accordance with the law. The legitimate
right to attend and vote nevertheless remains, should the communications be received by the Bank later than the
aforementioned time limit, provided they are received before the commencement of the proceedings of each single
session of the shareholders’ meetings.
Registered shareholders holding shares that have not yet been dematerialised pursuant to the legislation and
regulations in force must deliver them in good time to an approved intermediary in order to perform the
dematerialisation procedure required and to make the communication mentioned above.
The communication performed by the intermediary shall contain a special section which may be used to authorise a
proxy by signing the said section.
Each registered shareholder has the right to one vote only no matter how many shares are held and it may not be
exercised by correspondence.
Each Registered Shareholder has the right to be represented by written proxy issued to another Registered
Shareholder entitled to attend the Meeting. Proxies may not be granted to any members of the Management Board or
the Supervisory Board, or to employees of the Bank, or to any of its subsidiaries or to any member of the management
or control bodies, or employees of the aforesaid subsidiaries, or to the firm of external statutory auditors appointed or
to the person responsible for the statutory audit of the Bank, or to parties to whom one of the other conditions of
incompatibility apply according to the law.
Each registered shareholder may act as a proxy for not more than 3 (three) other registered shareholders.
As concerns item 1) on the agenda, the election of the members of the Supervisory Board shall be performed in
accordance with the law and the Articles of Association by the Shareholders' Meeting on the basis of lists, which may
be submitted by registered shareholders or by the Supervisory Board, according to the following procedures.
The lists of candidates, signed by those submitting them, must be deposited at the registered offices of the Bank
between by the twentyfifth day prior to the Shareholders’ Meeting in first call and they must contain the names of at
1 Published on 14 th March 2013 on the corporate website www.ubibanca.it and also in the principal national newspapers, in local
newspapers in areas where the Group has a longstanding market presence and in the Official Journal No. 32 of 16 th March 2013.
least two candidates and also, where they are composed of at least three candidates, comply with the gender
proportions established by Law No. 120 of 12 th July 2011 in order to ensure that a balance is maintained between
them on the Supervisory Board. Submission of the lists may be performed by remote means of communication defined
by the Management Board in a manner, stated in the notice to convene, which allows those depositing the lists to be
identified. The signature of each Registered Shareholder submitting a list must be duly authenticated in accordance
with the law by employees of either the Bank or its subsidiaries specifically authorised by the Management Board.
The lists must also be accompanied by information concerning the identity of the registered shareholders who have
submitted them, with details of the number of shares and therefore the total percentage of the shares held by the
registered shareholders submitting them and, within the time limits set by the legislation and regulations in force, by
a communication which demonstrates ownership of the investment, as well as all other information required by the
regulations in force.
Exhaustive information must be deposited together with each list on the personal and professional characteristics of
the candidates as well as a declaration by the candidates themselves stating that they are in possession of the
requirements specified by the law and by regulatory and Articles of Association provisions and also that they accept
In cases where only one list has been presented within the time limit mentioned above, or in any event in the cases
provided for by the regulations in force, the Bank reports this immediately with a press release sent to at least two
press agencies. In this case lists may be presented up until the third day following the date of the time limit cited.
Again in this case the limits laid down in the subsequent paragraph are reduced by half.
The election of the members of the Supervisory Board shall take place on the basis of lists presented:
a) directly by at least 500 (fivehundred) Registered Shareholders who have the right to participate in and vote in the
Shareholders' Meeting called to elect the Supervisory Board, who provide documentary evidence of the right
according to the legislation in force, and that is by one or more registered shareholders who represent at least
0.50% of the share capital, calculated on the basis of the share capital existing 90 (ninety) days before the date set
for calling the Shareholders' Meeting and to be indicated in the notice given to call the meeting;
b) by the outgoing Supervisory Board on the basis of a proposal made by the Appointments Committee and with the
approval of the Supervisory Board passed with the votes of at least 17 (seventeen) of its members, and in any case
supported as reported in the preceding letter a) by at least 500 (fivehundred) Registered Shareholders who have
the right to participate in and vote in the Shareholders' Meeting called to elect the Supervisory Board, who provide
documentary evidence of the right according to the legislation in force, and that is by one or more registered
shareholders who represent at least 0.50% of the share capital, calculated on the basis of the share capital
existing 90 (ninety) days before the date set for calling the Shareholders' Meeting and to be indicated in the notice
given to call the meeting.
Each Registered Shareholder may participate in the presentation of one list only: if this rule is not observed, the
Registered Shareholder’s signature is not counted as valid for any list.
Each candidate may be included in one list only on pain of ineligibility.
Lists presented that fail to observe the procedures reported above are considered as not presented.
Each Registered Shareholder may vote for one list only.
The election of the Supervisory Board shall be performed as follows:
a) in the case of the presentation of more than one list and without prejudice to the provisions of the following letter
b), 22 (twentytwo) members of the Supervisory Board are taken from the list that obtains a majority of Registered
Shareholders' votes in the order of preference stated on it;
b) 1 (one) member of the Supervisory Board is taken from the list with the second highest number of votes which is
not connected within the meaning of the regulations in force with the list mentioned in letter b), and it is the name
of the first person on that list. If that list has obtained at least 15% of the votes counted in the Shareholders’
Meeting, in addition to the first name indicated on that list, a further 2 (two) members of the Supervisory Board
shall be taken from that list, and they shall be the second and third persons on that list. However, if that list has
obtained at least 30% of the votes counted in the Shareholders’ Meeting, in addition to the first name indicated on
that list a further 4 (four) members shall be taken from that list, and they shall be the second, third, fourth and
fifth persons on that list. Consequently 20 (twenty) or 18 (eighteen) members respectively of the Supervisory Board
shall be taken from the list that obtains a majority of Registered Shareholders’ votes in the order of preference
stated on it.
c) if the minority list mentioned in letter b) should contain the names of only two candidates, the third and if
necessary the fourth and fifth members of the board, where at least 30% of the votes are obtained, shall be taken
from the majority list consisting of the persons not already elected on that list in order of preference stated on it.
If, after identifying the candidates to be taken from the lists which received the majority of the votes on the basis of the
order in which they are indicated on the lists to which they belong, the gender proportions required under Law No.
120 of 12 th July 2011 are not complied with, then those members of the Supervisory Board taken last from the
aforementioned lists whose appointment would violate the said law are considered not elected. In this event the
number of those board members indicated on the same list to which they belong shall be appointed which allows
compliance with the composition requirements for the Supervisory Board in accordance with Law No. 120 of 12 th July
2011 and with the Articles of Association, again proceeding in the order in which those persons are indicated on the
list to which they belong. In particular, in this circumstance, the candidates to be appointed belonging to the gender
that is less represented on the basis of the results of the vote will be taken from each list in proportion to the total
number of candidates elected on each list according to the results of the voting. In this event, if the minority list
pursuant to letter c) has not complied with the gender proportions established by Law No. 120 of 12 th July 2011, the
candidates to be appointed belonging to the less represented gender will be taken from the list that obtained the
greatest number of votes only.
If only one list is validly proposed and this obtained the majority required for an ordinary Shareholders' Meeting, then
all 23 members of the Supervisory Board shall be taken from that list.
The Shareholders’ Meeting shall proceed by a relative majority vote to appoint those members of the Supervisory
Board, who for any reason whatsoever could not be elected by means of the procedures mentioned in the preceding
paragraphs or if no list at all is presented, again in compliance with the requirements for the composition of the
Supervisory Board pursuant to Law No. 120 of 12 th July 2011 and to the Articles of Association; in the event of a tied
vote the candidate more senior by age is elected.
If two or more lists obtain an equal number of votes, those lists must be voted on again until they no longer receive an
equal number of votes.
The positions of Chairman and Senior Deputy Chairman of the Board are reserved to the first and second members
respectively on the list that obtains a majority of votes, or on the only list presented or to the members appointed as
such by the Shareholders’ Meeting if no list is presented at all.
Furthermore, in accordance with article 44 of the Articles of Association, “the Members of the Supervisory Board must
be in possession of the requirements of integrity, professionalism and independence prescribed by regulations
currently in force. At least 15 (fifteen) 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 functions as
directors of banks.
In particular, at least 3 (three) members of the Supervisory Board must be chosen from amongst persons enrolled in
the register of external statutory auditors who have exercised statutory auditing activities for a period of not less than
Furthermore, the composition of the Supervisory Board must ensure, in compliance with the provisions of Law No.
120 of 12 th July 2011, that a balance is maintained between genders for the period provided for by that law.
While mandatory regulations of the law, the Supervisory Authority or other regulations must be complied with,
persons already holding the office of full statutory auditor, or who are members of other supervisory bodies in more
than five listed companies and/or their parent companies or subsidiaries, cannot hold office as a member of the
The lists of candidates, together with the related documentation required by the legislation in force and by the Articles
of Association, signed by those presenting them, must be deposited, in accordance with the provisions mentioned
above, by following one of the following procedures:
- at the “Management Board and Registered Shareholders Support Area” of the Banca at 8 Piazza Vittorio Veneto
Bergamo by 5:00 p.m. on 25 th March 2013;
- by sending them by certified electronic mail to the following address “firstname.lastname@example.org”, by the
absolute deadline of 25 th March 2013 and by attaching the documents in pdf format with a digital signature.
In relation to the provisions of paragraph six of article 45 of the Articles of Association, the share capital outstanding
as at 19 th January 2013 amounted to €2,254,367,512.5 divided into 901,747,005 shares of €2.50 each.
The lists received by the ”Management Board and Registered Shareholders Support Area” will be progressively
registered and numbered on the basis of the day and time of receipt.
When lists are deposited, a record of receipt of the documentation shall be prepared, signed by at least one of the
presenters of the list and by a member of General Management or by senior managers or management staff of the
“Management Board and Registered Shareholders Support Area” of UBI Banca.
In compliance with the regulations in force, the lists submitted shall be made available to the public at least twenty
one days before the Shareholders' Meeting at the registered address of the Bank and also published on the website of
UBI Banca (www.ubibanca.it – registered shareholders section).
Those who intend to present a list of candidates for the Supervisory Board may contact the “Management Board and
Registered Shareholders Support Area” of the Bank.
In compliance with Bank of Italy recommendations concerning regulations governing the organisation and corporate
governance of banks, the ideal profiles of candidates for membership of the Supervisory Board are made available at
the Bank and on the corporate website at www.ubibanca.it in the corporate governance section.
In order to facilitate procedures for the presentation of candidates to the Supervisory Board, the following may be
downloaded from the UBI Banca website (www.ubibanca.it – registered shareholders section) as examples to follow:
- form for the presentation of lists
- form for candidates declarations that they accept their candidature and certifying that they possess the
requirements to take up office.
The documentation relating to the items on the agenda will be deposited and made available to the public at the
registered address of the Bank and on the website (www.ubibanca.it – registered shareholders section) and it will be
filed with Borsa Italiana Spa within the time limits and according to the procedures of the Law and regulations.
Registered Shareholders may view and obtain copies of the aforementioned documentation in accordance with the law
by applying in advance to the “Management Board and Registered Shareholders Support Area”.
Bergamo, 12 th March 2013
The Chairman of the Management Board
The macroeconomic scenario
In 2012 the decisions of the European Central Bank (ECB), domestic reforms and European
economic governance reform to a large extent dispelled the pessimism about the single
currency that had worsened the sovereign debt crisis and pushed risk premiums on
government securities to exceptionally high levels in some EU member states.
Specifically, in the second quarter the emergence of fresh tensions had fed a growing
contagion effect, further sustained by the perception of a lack of cohesion by governments in
orienting the reform of governance in Europe and in improving the crisis management
mechanisms within the euro area.
Alongside the persistence of Greece's financial woes there have been growing difficulties for
the Spanish banking industry, which required a substantial government bail-out, leading its
government to make a formal request to the EU for funds to recapitalise its banks. In the last
week of June Cyprus also made a formal request to the European authorities for aid for its
financial sector, which is burdened by the amount of Greek debt in its portfolio.
The first step towards preventing the risk of a break-up of the euro area, breaking the vicious
circle between sovereign debt and banks, came with the summit in Brussels on 28 th -29 th June
and the announcement of a joint, independent banking supervision system. This, along with
an anti-spread shield, strongly pushed for by Italy, joined the European Stability Mechanism
(ESM) which is purely for the rescue of member states in difficulty.
The official decision by the ECB to introduce the plan for outright transactions in the
secondary sovereign bond markets for bonds issued by member states experiencing difficulties
(outright monetary transactions, or OMT) played a major part in easing tensions, and dispelled
any doubts about the concrete introduction of an ‘anti-spread shield’.
In the last quarter further events took place that will restore confidence in the market:
• the ratification in October of the treaty establishing the European Stability Mechanism
(ESM) which became effective alongside the temporary European Financial Stability Facility
• the concession to Greece of an additional two years (to 2016) to reduce its deficit to GDP
ratio to less than 3% 1 ;
• the positive outcome of the Greek government’s 2 operation to repurchase its debt in issue
(buy-back), which was accomplished in December and allowed approval of the second
payment of €49.1 billion by the EFSF 3 ;
• the payment of €37 billion in aid to Spain, to be used to recapitalise the four struggling
• the reaching of an agreement between the 27 EU member states on 12 th December in which
a single Europe-wide supervisory mechanism (SSM) was set up. This comprises the ECB
and national supervisory authorities of the member states (in the euro area and other EU
The agreement should be fully operational from 1 st March 2014. It divides tasks between the ECB,
which will directly supervise major banks (with assets in excess of €30 billion or 20% of GDP), and the
national central banks, which will monitor the other institutions, under the supervision of the ECB 4 . The
introduction of a single supervisory mechanism will allow direct recapitalisation of struggling banks by
the ESM, instead of bailing out member states with loans that have the effect of worsening their debt
1 At the same time the target for public debt to GDP ratio for 2020 has been raised from 120% to 124%.
2 The operation involved securities with a nominal value of €31.9 billion, allowing the debt to be reduced by about ten percentage
points of GDP.
3 €34.3 billion was paid in December, €16 billion of which for the recapitalisation of the banking sector and €11.3 billion for the
buyback, while the remaining €14.8 billion will be paid during the first quarter of 2013.
4 It is estimated that under the planned division of tasks around 200 banks should be under the direct supervision of the European
Central Bank, while 5,800 banks will be supervised by the national regulatory bodies. The ECB will also have the power to intervene,
where necessary, even in the case of banks not falling within its remit of direct supervision, while the central banks, according to
their respective domestic legislation, will in any case retain their powers to obtain information and to carry out inspections of banks.
It was also decided at the summit that the ECB will retain its EU-level supervisory powers and the
voting mechanism was reformed with a dual-majority system designed to protect EU countries not part
of the euro area which will therefore not be part of the single supervisory mechanism.
Completion of the banking union should therefore continue, before the end of June 2013,
with the reaching of an agreement on the creation of a European bank deposit guarantee
fund and an agency for managing the liquidation of insolvent banks.
Again with reference to European banking regulation, at the beginning of 2013 the Basel Committee
reviewed bank liquidity standards, with specific reference to the definition of liquidity capital ratio (LCR),
with a more gradual introduction of the 100% standard measure and a widening of the assets that can be
used in calculating the ratio.
In line with what has already happened in the United States, on 28 th February 2013 the European
Parliament and Council reached a preliminary agreement, which will need to be approved by a majority of
the 27 EU member-states, postponing the gradual introduction of the new rules on capital introduced by
The interventions reported above have played a part in reducing government bond spreads in
countries at risk 5 . As the graph shows, after peaking at over 500 basis point in July, the BTP-
Bund spread has progressively fallen, ending the year at 322 6 . This improvement has
continued into the first few weeks of the new year, also as a result of a slowdown in the flight
to quality that has
benefited public debt
Ten-year BTP-Bund spread (2010-2012)
Graph No. 1
in the core countries
beginning in early
2011. There has been
a sharp reversal in
the trend after the
elections of 24 th -25 th
Finally, the new
Fiscal Compact came
into force on 1 st
January 2013. This
- introduce a rule
to be balanced and
not to deviate
this, which is
Source: Thomson Financial Reuters
defined as a medium-term objective;
- gradually reduce the debt in excess of 60% of GDP 7 .
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
Given the increasingly difficult economic climate and the fact that inflation forecasts are in
any case low, the monetary policies adopted in 2012 by the central banks of developed and
emerging countries continued to be oriented towards support for growth, both by intensifying
the use of non-conventional operations, and by further loosening monetary conditions where
possible 8 .
5 Reducing the cost of Spain's debt has meant that for the moment it is not strictly necessary for the Spanish government to request
aid from the ESM.
6 According to a study carried out by Consob in 2012 the contagion effect for Italy is estimated to be around 200 basis points.
7 Specifically, after ending of the procedures for excessive deficits the pact requires deficits to converge towards the “medium-term
objective” at a certain pace, and with reference to debt, requires the debt in excess of 60% of GDP to be reduced at an average rate of
one twentieth per year.
8 In July the ECB reduced the main refinancing rate by 25 basis points to 0.75%, while for non-conventional operations, it introduced
the aforementioned OMT, a programme to buy government bonds on secondary markets which will affect government bonds with a
residual life of between one and three years without restrictions on volume or duration. At the meeting in early December it was then
decided to extend all the refinancing operations by means of fixed-rate tender procedures with full allotment of all bids for as long as
deemed necessary, and in any case at least until early July 2013.
The volatility on the 1.62
financial markets 1.58
also affected the 1.54
the euro, which,
compared with the
March and August
as the sovereign debt
crisis worsened, 1.14
picking up gradually 1.10
Graph 2 and the
table also show the
devaluation of the yen against
both the euro and the dollar
that took place during the last
quarter of the year, which was
identified by the Japanese
government as a possible
means of relaunching the
Euro-dollaro and dollaro-yen exchange rates (2009-2012)
The main exchange rates and oil (Brent) and commodities prices
€/$ $/Yen (right axis)
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
2009 2010 2011
Euro/Dollar 1.3194 1.2858 1.2658 1.3343 1.2945 1.9%
Euro/Yen 114.46 100.13 100.97 110.47 99.57 15.0%
Euro/Yuan 8.2200 8.0776 8.0416 8.4028 8.1449 0.9%
Euro/Franc CH 1.2074 1.2078 1.2004 1.2035 1.2133 -0.5%
Euro/Sterling 0.8127 0.7950 0.8056 0.8331 0.8328 -2.4%
Dollar/Yen 86.74 77.90 79.77 82.79 76.94 12.7%
Dollar/Yuan 6.2301 6.2841 6.3530 6.2975 6.2939 -1.0%
Futures - Brent (in $) 111.11 112.39 97.80 122.88 107.38 3.5%
CRB Index (commodities) 295.01 309.30 284.19 308.46 305.30 -3.4%
Source: Thomson Financial Reuters
The macroeconomic background
In the course of 2012 the world economy weakened due to slower growth in the United States
and emerging countries and to Japan and the euro area entering into recession. Within the
euro area the contrast grew between Germany and France, which saw modest growth, and
peripheral countries such as Spain and Italy, which are in deep recession.
The major imbalances in the leading industrialised economies and continuing geopolitical
tensions in the Middle East means that the pace of growth will remain slow in the coming
months, especially in advanced countries, while it should be more dynamic in the emerging
markets 9 .
The Federal Reserve has been very active in carrying out non-conventional operations, with a view to making financial conditions
more accommodating, in order to deliver substantial improvements to the labour market: In June it decided to extend Operation
Twist until the end of the year, which involves purchasing government bonds with maturities of between six and thirty years, to be
financed through the sale of securities with maturities of less than three years. With the end of the previous programme it
announced the launch of outright buybacks of long-term treasury bonds at a rate of $45 billon a month. Furthermore, in September
it also launched a new programme for the purchase of mortgage-backed securities for $40 billion a month with no time limits. With
regard to interest rates the Fed linked the changes in official rates to set inflation and unemployment levels: reference rates will
remain between 0%-0.25% while unemployment remains higher than 6.5%. The inflation forecast for one-two years will not be more
than half a percentage point higher than the 2% target and long-term inflation forecasts will remain closely linked.
Also in Japan the central bank has progressively increased the purchase of government bonds from 70 billion yen to 101 billion yen,
extending it for the whole of 2013. It has also set a specific inflation target of 2%. For the time being the reference interest rate has
been confirmed at between 0% and 0.1%.
As far as the main emerging economies are concerned, China reduced compulsory reserves by 0.5 percentage points both in
February and May 2012, which now stands at 20%, while the bank lending rate underwent two reductions for a total of 56 basis
points to 6%. The Central Bank of Brazil was especially active, reducing the reference rate seven times between January and
October 2012 from 11% to the record low of 7,25%. The Reserve Bank of India cut its repo rate by 50 basis points and then made a
further cut of 25 basis points bringing it to 7.75% in January 2013. In contrast, the Central Bank of Russia implemented a 25 basis
point rise in September to 8.25%.
9 According to the January 2013 update to the International Monetary Fund estimates, this year the global economy is expected to
grow by 3.5% (3.2% in 2012), which is the combination of 1.4% growth for advanced countries and 5.5% growth for emerging
The economic situation was one of high unemployment levels, which rose further in Europe,
and moderate inflation during the summer months following the rise in commodities prices,
which then fell back as a result of reduced growth forecasts.
The price of Brent oil was especially volatile, under the influence of tensions in the oilproducing
countries and the embargo against Iran. After rising to over $125 a barrel in March,
prices fell sharply to
bellow $90 in June,
Brent oil prices (2009-2012) Graph No. 3
partly as a result of
increased crude oil 120
supplies, before picking
up again in July and 105
August and stabilising at
around $110 in the last
According to initial
estimates, the US
economy seems to have
come to a standstill in
the fourth quarter. GDP
fell 0.1% year-on-year,
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
2009 2010 2011 2012
after rising 3.1% in the
previous quarter and
1.3% and 2% in the second and first quarters respectively.
On average US GDP rose 2.2% overall during the year compared with 1.8% in 2011, sustained
by domestic consumer and investment demand in which the property sector once more played
a positive part. In contrast the contribution from balance of trade was zero.
The situation on the jobs market appears to be slowly and gradually improving, with the
unemployment rate at 7.8% in December, the lowest level in the last four years. It has
remained more or less stable since August after falling continuously since the second half of
2011 (at the end of 2011 it was 8.5%). The 2012 average of 8.1% is lower than the previous
year’s average of 8.9%.
Inflation, which fell from 3% in December 2011 to 1.4% in July 2012, climbed rapidly back up
to 2.2% in October to then fall back again to 1.7% in December. Core inflation (net of food and
energy products) was slightly down from June and ended the year at 1.9% (compared with
2.2% at the end of 2011). The average figure for 2012 was 2.1% (compared with 3.2% in 2011).
During the year the negative balance of trade fell slightly to $540.4 billion (down 3.5%), mainly
benefiting from a smaller deficit with Opec countries and Africa. On the other hand the deficit
with China increased further.
The US growth prospects remain strongly conditioned by the need to balance the public
accounts. On 2 nd January a last-minute temporary measure was passed which avoided the
‘fiscal cliff’, the package of automatic increases in all the personal and corporate income tax
rates and cuts in public spending that would probably have pushed the US economy into
recession 10 . The failure to reach a parliamentary agreement at the end of February 2013 in
any case determined the automatic implementation of gradual spending cuts worth $85
billion, which according to estimates could lead to a potential loss of 750 thousand jobs during
the year, bringing about a 0.6% fall in GDP.
10 This agreement extends the tax relief introduced in 2001 and 2003 with the exception of relief for individuals with incomes in
excess of $400 thousand a year; the rate for the latter group has been increased from 35% to 39.6% and capital gains tax has been
increased from 15% to 20%. It was confirmed that the relief on social security contributions for workers would be abolished.
Actual and forecast data: industrialised countries
Gross domestic product
(average annual rate)
(average annual rate)
Deficit (+) Surplus (-) Public
sector (% of GDP)
2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) Dec-11 12-dic-13
United States 1.8 2.2 1.9 3.2 2.1 1.8 8.9 8.1 7.6 10.1 8.5 6.6 0-0,25 0-0,25
Japan -0.6 1.9 1.0 -0.3 -0.1 0.2 4.5 4.3 4.3 8.9 9.1 9.1 0-0,10 0-0,10
Euro Area 1.4 -0.6 -0.3 2.7 2.5 1.8 10.2 11.4 12.2 4.2 3.5 2.8 1.00 0.75
Italy 0.4 -2.4 -1.0 2.9 3.3 2.0 8.4 10.6 11.6 3.8 3.0 2.1 - -
Germany 3.0 0.7 0.5 2.5 2.1 1.8 5.9 5.5 5.7 0.8 -0.1 0.2 - -
France 1.7 0.0 0.1 2.3 2.2 1.6 9.6 10.3 10.7 5.2 4.6 3.7 - -
Portugal -1.6 -3.2 -1.9 3.6 2.8 0.6 12.9 15.7 17.3 4.4 5.0 4.9 - -
Ireland 1.4 0.7 1.1 1.2 1.9 1.3 14.7 14.8 14.6 13.4 7.7 7.3 - -
Greece -7.1 -6.4 -4.4 3.1 1.0 -0.8 17.7 24.7 27.0 9.4 6.6 4.6 - -
Spain 0.4 -1.4 -1.4 3.1 2.4 1.5 21.7 25.0 26.9 9.4 10.2 6.7 - -
United Kingdom 0.9 0.2 0.9 4.5 2.8 2.6 8.0 7.9 8.0 7.8 6.3 7.4 0.50 0.50
(1) Forecasts Source: European Economic Forecast and Official Statistics
Strong growth in China, the world’s second largest economy, continued during 2012, although
at a slower pace than in previous years. GDP rose 7.8% year-on-year (+9.3% in 2011), after a
gradual slowdown in the first three quarters (8.1%, 7.6% and 7.4%) and an improvement in
the last quarter (7.9%).
All the key indicators of domestic demand made important contributions during the year.
Fixed investments rose 20.6%, driven by manufacturing (up 22%). Retail sales of consumer
goods were up 14.3%. Industrial production rose 10% with peaks of 12% for the chemicals
and computer components industries.
As regards trade, exports increased more than imports (7.9% and 4.3% respectively), creating
a surplus of $231 billion which further strengthened the currency reserves, which rose to
$3,310 billion at the end of 2012, over a third of which is invested in US government
Inflation slowed from 4.5% in December 2011 to 1.7% in October, regaining momentum at the
end of the year at 2.5% (the 2012 average was 2.6%) driven by foodstuffs (up 4.2%).
Actual and forecast data: the principal emerging countries
Gross domestic product
Consumer prices (average
Percentages 2011 2012 2013 (1) 2011 2012 2013 (1) 2011 2012 2013 (1) Dec-11 Dec-12
China 9.3 7.8 8.1 5.4 2.6 3.0 4.1 4.1 4.1 6.56 6.00
India 8.0 4.7 6.0 8.9 9.3 9.6 n.a. n.a. n.a. 8.50 8.00
Brazil 2.7 0.9 3.5 6.6 5.4 4.9 6.0 5.5 6.5 11.00 7.25
Russia 4.4 3.6 4.1 8.4 5.1 6.6 6.6 5.7 6.0 8.00 8.25
, , , , , ,
(1) Forecasts Source: Prometeia, IMF and official statistics
Economic performance in the other emerging nations continued to slow. Growth rates are expected to
increase in the immediate future, albeit remaining below pre-crisis levels.
In the third quarter India’s GDP rose 2.9% year-on-year (compared with 3.8% and 5.6% in the first and
second quarters respectively), affected by domestic consumer and investment demand and by the negative
balance of trade resulting from stronger imports over exports. In November industrial production fell,
confirming the mainly negative trend of recent months. Inflation went back up to 10.6% in December due to
increased food prices, but is expected to fall in 2013.
Brazil reacted to the slowdown in the global economy by introducing barriers to the movement of capital in
order to curb currency appreciation, while some domestic prices were regulated in order to keep inflation
under control (it stood at 5.8% in December) and incentives for the industrial sector were tied to
interventions in the labour market. At the end of 2012 GDP had risen 0.9% year-on-year.
In the third quarter Russian GDP had risen 0.8% compared with the previous quarter (0.4%), thanks to the
rise in investments and stable consumption, which supported import growth (up 6.3% compared to the
second quarter). Exports also rose again slightly after falling in the first two quarters. High oil prices meant
the trade surplus remained substantial, while inflation has remained relatively stable since September
(6.6% in December). In December the unemployment rate was 5.3% (6.1% at the end of 2011).
Japan is experiencing another recession. In the fourth quarter GDP fell by 0.1%, for the third
consecutive quarter (down 1% and 0.2% in the two previous quarters and up 1.5% in the first
quarter), although it did show some signs of recovery in consumption. However, this was more
than offset by the fall in investments (except for the residential sector) and inventories, as well
as by the still negative contribution from foreign demand, even if this was improving.
In December industrial production rose 2.4% compared to the previous month, but the yearon-year
change worsened, falling for the seventh consecutive month (down 7.9%). December’s
Tankan report showed that the forecast for the entire industrial sector, especially
manufacturing, is still negative, with a small improvement for SMEs only.
Unemployment remained stable until April, and fell in the following months to 4.2% in
December (4.5% at the end of 2011), while price deflation continued (down 0.1% in December).
Despite a high level of public debt (estimated at 221.2% of GDP in 2012), the new government
that came into power in the autumn introduced an impressive programme of public works
worth a total of 20 thousand billion yen focusing on seismic prevention and reconstruction,
measures designed to boost competitiveness and welfare.
The euro area also remained in recession, with GDP falling 0.6% in the fourth quarter
compared with the previous quarter (down 0.1% and 0.2% in the two previous quarters and
unchanged prior to that). All the major economies in the euro area saw a slowdown between
October and December, including Germany (down 0.6%).
Overall GDP fell by an average of 0.6% during the year (compared with a rise of 1.4% in 2011).
This was due to a fall in fixed investments and consumption, which contrasted with an
increase in the trade surplus brought about by a significant fall in imports.
In December the monthly trend for industrial production went back into positive figures (up
0.7%), thanks to recovery in Germany and Italy. However, the year-on-year trend remains
negative, but improving (down 2.4%).
The unemployment rate rose steadily to reach 11.7% (10.7% at the end of 2011), with the
situation critical in some of the countries worst hit by the debt crisis: Greece (26.8% in
October), Spain (26.1%), Portugal (16.5%) and Ireland (14.7%).
As far as prices are concerned, in the last few months of 2012 the inflation rate measured by
the “Harmonised Index of Consumer Prices” stood at 2.2%, the lowest point of the year, after
the temporary rise during the summer months (2.6% in August and September and 2.7% at
the end of 2011). Net of foodstuffs and energy products it has been stable at 1.6% since
September, after slowly falling from 2% at the end of 2011. The average inflation for the year
was 2.5% (compared with 2.7% in 2011).
The economic prospects for the euro area are still conditioned by the risks involved in the slow
rate of implementation of structural reforms, potential impact of tensions in countries that
produce raw materials and imbalances existing in the leading industrialised nations. These
factors could delay the recovery of private investment, employment and consumption.
Of the leading euro area economies, Italy is one of the least dynamic. In the last quarter GDP
fell for the sixth consecutive quarter by 0.9% (after falls of 0.2%, 0.7% and 0.8% in the
Overall GDP fell by an average of 2.4% in 2012 (compared with a rise of 0.4% in 2011),
reflecting particularly poor consumption figures and a persisting weakness in fixed
investments, despite a good performance by net foreign demand.
The poorer macroeconomic background in 2012 was mainly due to the increased cost of
borrowing and reduced credit facilities, brought about by the worsening sovereign debt crisis
and higher spreads. The measures taken to correct public finances in the second half of 2011
in order to avoid conditions on the financial markets spiralling out of control had a negative
effect on demand, which can be estimated as more than one percentage point of annual
growth. The slowdown in the international economy and global trade were responsible for
subtracting a further 0.6 of a percentage point from the annual growth figure, while
approximately another half a percentage point was lost due to the increase in uncertainty and
loss of confidence among households and businesses, which impacted on consumption and
GDP is expected to contract further in 2013 as a result of the slowdown in the global economy
and foreign demand as well as the impact of budget measures.
Production continued to fall as the (seasonally adjusted) industrial production index shows,
which was down 6.6% year-on-year in December (for the sixteenth consecutive time). On
average industrial production fell 6.7% in 2012 compared with 2011, with contractions in all
sectors, particularly the ‘manufacture of rubber and plastic products’ (down 10.4%), 'electrical
equipment manufacturing' (down 10%), the 'wood, paper and printing industry' (down 9.9%)
and 'textiles' (down 9.4%).
The situation on the labour market also appears to be continuing to worsen, the
unemployment rate having risen to 11.2% from 9.5% a year earlier. The 15-24 age range has
been the most seriously affected age range (36.6% 11 ). The general figure has also benefited
from the input of state unemployment schemes, with a 12.1% increase in the use of the
government’s temporary lay-off benefits scheme (CIG). The total number of hours authorised
in 2012 was 1,090.6 million, compared with 973.2 million in 2011, close to the peak of
1,197.8 million reached in 2010 12 .
As far as prices are concerned, the inflation rate measured by the Harmonised Index of
Consumer Prices remained at over 3% until September, peaking at 3.8% in April, and then fell
to 2.6% in November and December (compared with 3.7% at the end of 2011), partly because
the statistical effects relating to the increase in VAT in autumn 2011 were no longer making
themselves felt. Average inflation for the year was 3.3% (2.9% in 2011), with significant
increases in ‘housing, water, electricity and fuel’ (up 7.1%) and ‘transport’ (up 6.5%).
The balance of trade accumulated a surplus of €11 billion, the biggest since 1999 (in 2011
there was a deficit of €25.5 billion), benefiting from the significant surplus generated by nonenergy
products (+€74 billion), two thirds of which are classified as plant and equipment.
Exports were driven by trade with non-EU countries, and rose by 3.7% (compared with a rise
of 11.7% in 2011), while imports fell overall by 5.7% (up 9.3% in 2011), especially from EU
Based on initial estimates from ISTAT, the benefits from higher tax revenues reduced the
deficit to GDP ratio (net of property sales and EFSF loans) to 3% (compared with a revised
figure of 3.8% in 2011). This was in line with the commitment made to Europe to balance the
structural budget in 2013. However the debt-to-GDP ratio rose by more than six percentage
points to 127% (compared with a revised figure of 120.8% in 2011), also as a result of the
sharp fall in production.
The trend for Italian yield curves reflects the
gradual reduction in the perceived risk of
Italian government securities during 2012. In
the first half of the year the downward slope in
the curve benefited from the liquidity
generated by LTROs carried out by the ECB –
mainly used by intermediaries to buy
government securities – and from corrective
measures taken by the government in the
expectation that the European reference rate
would be reduced, as was the case in early
July. The further reduction in the second half
of 2012 reflects the markets' renewed
confidence after the ECB governor's
announcement that there was no going back
11 The figure shows the percentage of unemployed young people out of the total of young people in work or seeking work.
12 Between January and November 2012 1,285,299 unemployment applications (up 14.5% compared with the same period in 2011),
and 133,052 redundancy applications were made (up 17.8%).
on the euro last July, and the announcement in September of a new programme of
government security purchases on the secondary market.
As the table shows, the performance of equity markets varied considerably during the year,
despite a positive overall trend. The positive first quarter was followed by heavy losses in the
second. A slow recovery began from July, which became stronger in the latter months of the
year and the first few weeks of 2013. In the US the agreement reached to avoid the fiscal cliff
actually allowed the indices to return to pre-crisis levels. In the euro area banking shares in
particular benefited from the looser and postponed tigher liquidity requirements of Basel III,
and for banks in peripheral countries in particular, from the downward pressure on
government bond yields. The outcome of the Italian government elections at the end of
February brought fears of a fresh ‘contagion effect’ to the markets, leading Fitch to downgrade
Italy’s sovereign rating.
After the heavy falls suffered in 2010 and 2011, the Italian markets managed by Borsa
Italiana ended the year with an annual gain of around 8%, despite taking a battering in the
second half of the year.
Despite this positive performance, trading was down both in terms of volumes (57.6 million,
down 15.9%) and value (€506.1 billion, down 28.7%) compared with the previous year.
However, the fixed income market (MOT and ExtraMOT) achieved its best ever trading
volumes, with approximately 6.5 million contracts (up 37.4%) worth €326.1 billion (up 57.7%).
This was partly due to three issues of the BTP Italia, the first inflation-linked Italian bond,
which brought in a total of more than €27 billion 13 .
The principal share indices in local currency
Borsa Italiana also confirmed its
Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 % change
leading position in Europe for
E A/E contracts traded electronically
Ftse Mib (Milan) 16,273 15,096 14,274 15,980 15,090 7.8% on both the ETF Plus and MOT
Ftse Italia All Share (Milan) 17,175 15,999 15,185 16,999 15,850 8.4%
Xetra Dax (Frankfurt) 7,612 7,216 6,416 6,947 5,898 29.1%
Cac 40 (Paris) 3,641 3,355 3,197 3,424 3,160 15.2% At the end of the year listed
Ftse 100 (London) 5,898 5,742 5,571 5,768 5,572 5.9%
companies on the Italian Stock
S&P 500 (New York) 1,426 1,441 1,362 1,408 1,258 13.4%
Exchange numbered 323, down
(New York) 13,104 13,437 12,880 13,212 12,218 7.3%
Nasdaq Composite (New York) 3,020 3,116 2,935 3,092 2,605 15.9% from 328 twelve months before
Nikkei 225 (Tokyo) 10,395 8,870 9,007 10,084 8,455 22.9%
as a result of eight new
Topix (Tokyo) 860 737 770 854 729 18.0%
MSCI emerging markets 1,055 1,003 937 1,041 916 15.2% admissions and thirteen
withdrawals. Total market
Source: Thomson Financial Reuters
capitalisation however was up at
€365.5 billion, from €332.4 billion at the end of 2011, equivalent to 22.5% of Italian GDP.
As a result of the lower value of the shares traded while capitalisation was higher, turnover
velocity 14 fell during the year to 138% from 214% at the end of 2011.
Despite a generally unfavourable context for assets under management, mutual funds ended
the year with positive net inflows of €1.2 billion 15 , showing an increasingly clear distinction
between foreign-registered funds (up €15 billion), which now represent 69% of managed
assets, and Italian-registered funds (down €13.8 billion).
Looking at net inflows by type, bond funds recovered strongly (up €23 billion) while flexible
funds remained essentially stable (up €0.4 billion) and other categories of funds fell, albeit at
different rates: monetary funds down €12.6 billion, equity funds down €7.1 billion, hedge
funds down €2.5 billion and balanced funds down 1.3 billion 16 .
Thanks to the recovery in prices, in December assets under management reached €482.2
billion, up from €421.7 billion at the end of 2011 (a 14.4% rise). In terms of the product mix
bonds did well, rising from 43.4% to 51.6%, while monetary funds fell from 11.6% to 6.7% and
equity funds also fell, from 22.3% to 20.6%.
13 The third issue, in October 2012, was Europe’s biggest ever bond placement, with over €18 billion paid in the first four days of
subscription on the MOT.
14 An indicator which, as the ratio of the value of the shares traded to the stock market capitalisation, gives a measure of the
turnover of the shares traded.
15 Assogestioni, “quarterly map of assets under management”, fourth quarter 2012.
16 Net inflows over the year also included an additional €1.3 billion into ‘non classified funds’.
Principal long-term interest rates (2010-2012)
Graph No. 5
US Treasury 10 anni BTP 10 anni Bund 10 anni
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
2010 2011 2012
The banking system
The easing of tensions on the sovereign debt markets helped to improve funding conditions for
Italian intermediaries, although these have not yet normalised. However, the unfavourable
economic conditions continued to manifest in terms of weak demand for credit from
households and businesses, and poorer credit quality.
Based on figures provided by the Bank of Italy 17 , at the end of December the year-on-year
change in direct funding (deposits of residents and bonds) continued to rise from the lowest
levels of the year (down 0.8% in May and July), despite remaining moderate (rising 1.6%
compared with 1% at the end of 2011). Within the mix the contrast between funding from
bonds (down 6.8%; up 3.2% 18 ) and other forms gradually increased (up 6.2%; down 0.2% 19 ).
The latter include deposits with a fixed term of up to two years, which grew considerably (up
87%), and repurchase agreements (up 34.1%).
Bank of Italy figures show that loans to residents in the private sector fell 1.8% in over the
year (whereas they had risen 2.9% at the end of 2011), after the lowest point in November,
when they were down 2.4%. In terms of recipients overall loans to households weakened (down
1.4% compared with a rise of 4.4% in December 2011), as did the various types of lending:
consumer credit (down 6.9% compared with an increase of 2.7%), mortgages (down 0.6%
compared with an increase of 4.4%) and other loans (down 1% compared with an increase of
The year-on-year trend for loans to businesses appears to be even worse (down 3.3%
compared with a rise of 3.1%), as the result of an across-the-board fall that has affected both
17 Bank of Italy, supplement to the statistics bulletin Moneta e Banche, March 2013.
18 The changes were calculated excluding the investments included in the securities portfolio (item “Other securities”) from the
funding from bonds. Including this component, at the end of December the funding for Italian banks from bonds had grown by an
annual rate of 5% (compared with a rise of 13.4% in December 2011).
19 The changes were calculated excluding sums related to disposals of loans and transactions with central counterparties from the
deposits. Including these components, at the end of December the funding consisting of the different types of deposit had grown by
an annual rate of 8.3% (compared to a fall of 3.8% in December 2011)
short-term loans (down 1.9% compared with a rise of 5.2%) – especially in the first half of the
year – and medium to long-term loans (down 4.1% compared to a rise of 1.9%), especially in
the second half of the year.
From the point of view of risk, after a stable first quarter, non-performing loans in the private
sector gross of write-downs rose sharply – especially those with non-financial companies,
reaching €124.7 billion in December (up 16.6% for the year and up 10.5% from June), €40.4
billion of which were to households and €83.5 billion to businesses. The ratio of gross nonperforming
loans in the private sector to loans to the private sector rose by one percentage
point during the year, ending at 7.24% (6.24% at the end of 2011), while the ratio of gross
non-performing loans in the private sector to share capital and reserves rose to 33.45% (from
Net non-performing loans, at €64.6 billion rose (by 25.6% year-on-year; up 19.5% from June),
after reaching their lowest level of the year in March (48.3 billion). Consequently the ratio of
net non-performing loans to total loans rose to 3.35% from 2.69% at the end of 2011, while
the ratio of net non-performing loans to capital and reserves rose to 17.34% (from13.55%).
Securities issued by residents in Italy in the portfolios of Italian banks reached €873.9 billion
in December, an increase of €203.3 billion over the year (up 30.3%), 60% of which consisted of
investments in Italian government securities (up €121.5 billion, €106.6 billion of which in the
first half of the year), which benefited from the injection of liquidity generated by two long-term
refinancing operations by the ECB in December 2011 and February 2012. Purchases were
mainly of medium to long-term government securities, (BTPs and CCTs; up €90.1 billion,
€67.9 billionof which in the first half of the year) and to a lesser extent of short-term securities
(BOTs and CTZs; up €29.7 billion).
“Other securities” also increased (81.9%), also driven by bank bonds (up €87 billion), which
accounted for over 70% by year end.
In December, the average interest rate on bank funding from customers calculated by the
Italian Banking Association ABI 20 (which includes the yield on deposits, bonds and repurchase
agreements in euro for households and non financial companies) stood at 2.08% (compared
with 2% at the end of 2011). The weighted average rate on loans to families and businesses
and non-financial companies gradually fell to 3.78% after peaking between December 2011
and January 2012 (4.23%).
* * *
In addition to the developments in international regulations mentioned above, a number of changes were
introduced into the legislative framework for Italian banks in 2012:
• on 5 th April the Constitutional Court issued ruling 78 declaring that article 2, paragraph 61 of Decree
Law No. 225 of 29 December 2010 (known as the “Thousand extensions”) on banks compounding
interest was unlawful. The Decree had introduced an authentic interpretation of article 2935 of the
Civil Code which, with the regard to the statute of limitations for legal actions relating to current
account transactions, set the ten-year period as running from the date on which the relevant
transaction was recorded on the account rather than from the day the account was closed;
• Law No. 62 of 18 th May 2012 set up an observatory within the Ministry of Finance and the Economy
to monitor the credit and terms granted by banks to customers, especially micro, small, mediumsized,
young people's and women's enterprises, and the implementation of agreements and
procedures to support their access to credit. The observatory monitors the trend in funding provided
by the banking and finance industry along with the relative terms and conditions, and it has the right
to apply to the Bank of Italy on a regular basis if required for information about the granting of loans
and their terms and conditions. The law also gives prefects the right to report specific problems
relating to banking and financial transactions and services to the Banking and Finance Ombudsman;
• from 1 st June banks are obliged to offer the ‘basic’ bank account introduced by Decree Law No.1 of
20 th January 2012 – converted into Law No, 28 of 24 th March – after the MEF, ABI, Poste Italiane
and Italian association of payment agencies and electronic payment services drew up an agreement
on 28 th March specifying the features it should offer;
20 ABI Monthly Outlook, “Economia e Mercati Finanziari e Creditizi”, February 2013.
• on 22 nd October MEF and ABI signed an agreement granting banks and financial intermediaries
access to the electronic platform for certifying payables due from public administration. This makes it
possible to check the status of the payable instantly, streamlining and accelerating the advance
payment or discount procedures for public administration suppliers;
• Law No. 134/2012, which converted Decree No. 83/2012 (the “Growth” Decree), introduced
numerous changes to company reorganisation, completing the Bankruptcy Law reforms introduced in
2005 by adding many provisions to make settlement procedures for struggling businesses more
efficient. The new regulations should therefore play a major part in helping crises to be identified
earlier and managed more carefully, as well as expanding recourse to arrangements with creditors
and restructuring agreements in accordance with article 182-bis of the Bankruptcy Law, as these
tools help foster a negotiated settlement to crises;
• in December the Bank of Italy published a measure containing regulatory provisions regarding
penalties and the procedure for administrative penalties. The document came into force on 1 st
February 2013. Its target includes banks and it establishes rules designed to communicate the
procedure for penalties followed by the Authority when exercising its regulatory powers in the proper
and prudent management of banking and financial activities, correct conduct and prevention in the
use of the financial system for laundering the proceeds of criminal activities and funding terrorism.
With reference to listed entities in particular, the following is also noted:
• Legislative Decree No. 91/2012, which came into force on 17 th July (implementing Directive
2007/36/EC on the exercise of certain rights of shareholders in listed companies), which changed
some regulations in the Civil Code and the Consolidated Finance Act in order to facilitate and
therefore provide an incentive for shareholders to take part in company life;
• Legislative Decree No. 184/2012, which came into force on 13 th November (implementing Directive
2010/73/EU harmonising transparency obligations for listed issuers), and abolished article 120,
paragraph 2 of the Consolidated Finance Act, meant that it was no longer necessary to inform the
investee company and Consob about the acquisition of investments of more than 10% in unlisted
S.p.A.s or S.r.l.s. The obligations for parent companies of listed issuers to provide the public with the
relevant information and to keep a record of the people with access to privileged information were also
Significant events that occurred during the
Strategic and organisational change in the UBI Banca Group
In line with the work that has been under way since 2010 (e.g. changes to the branch network,
revision of the marketing and distribution model, simplification of the customer service model,
the disposal of non-strategic assets, and rationalisation of the ownership structure) and in a
year that was once again a complex one in terms of the economy, the Group has implemented
the new mechanisms designed to further reduce overhead costs with immediate effect.
On 18 th July 2012, with the goal of simplifying operations so as to streamline them and make
them better respond to market needs, as well as to make them less of a burden both in terms
of costs and in terms of procedures and practices, we announced a change in strategy and
organisation for the entire Group, which is centred around the following key guidelines:
a) the implementation of a series of organisational changes designed to simplify the
functioning of the Group, which is to be achieved by way of the following:
- changes to the overall size of the branch network, including the closure of regular and
mini-branches, the transformation of ordinary branches into mini-branches, actions to
rationalise and simplify the internal structure of the network banks, of the Parent, and
of UBI Sistemi e Servizi, and more effective methods for the Parent and the network
banks to interact;
- a reduction in staff numbers estimated at approximately 1,500 full-time equivalents
through the use of provisions contained in labour contracts and labour law currently in
force, including the use, above all, of “solidarity funds” for early retirement and greater
flexibility with regard to working hours;
b) a reduction of at least 20% in governance expenses by reducing the number of members of
the various corporate bodies as well as their respective fees;
c) the revision of the service model for private-banking and corporate clients through the
creation of single operating units for both types of client with the creation of new “Private-
Corporate Centres” (approximately one for each Local Department), designed to provide an
integrated range of products and services for the Group’s core business clients on its local
markets and to facilitate the development of additional income opportunities.
A structural reduction in the cost of labour
On 28 th August 2012, in a letter sent to the various trade unions, the legally and contractually
required procedure concerning the strategic and technical evolution of the Group officially
The letter contained an explanation of the main mechanisms needed in order to achieve a
significant recovery in both efficiency and profitability through rigorous cost controls, and of
structural staff costs in particular. Without these mechanisms, such costs would no longer be
sustainable given both the current trend in revenues and the changes made to the social
security system introduced by way of the Salva Italia (Save Italy) decree 1 , which are affecting the
full achievement of targets for staff numbers called for in the 2011/2013-2015 business plan.
1 Italian law No. 214 of 22 nd December 2011 based on Italian Law Decree No. 201 of 6 th December 2011: In short, this reform
established that, as of 1 st January 2012, the retirement age for all employees is to be 66 years of age. The requirement for retirement
rose to 62 years of age in 2012 for employees, to 63 years 6 months in 2014, to 65 in 2016 and, finally, to 66 beginning in 2018. The
reform also changed the pension system by removing the possibility of retiring with quotas and introduced the possibility of early
retirement. Practically speaking, one may retire before old age only after the age of 41 years 1 month for women – increased to 41
years 2 months in 2013 and 41 years 3 months in 2014 – and 42 years 1 month for men – increased to 42 years 2 months in 2013
Trade union talks were held from 7 th September to 17 th October 2012 – the technical deadline
for the procedure, which was completed without agreement between the parties being reached
– and then continued on 21 st November in an effort to find possible areas of agreement. In the
meantime, UBI Banca did, nonetheless, begin work to optimise the Group's operations, as
described in greater detail below.
On 29 th November 2012, talks with the trade unions came to a close with the signing of a
framework agreement for the Group, which established the regulatory, financial and
operational solutions to be implemented in order to reach the stated objective, while also
calling for the introduction of an early retirement plan concerning all personnel at all levels
and affecting at least 650 staff throughout the various Group companies.
In order to mitigate the socio-economic impact of these changes, it has also been agreed that
the income support mechanisms established by way of Italian ministerial decree no. 158 of
28 th April 2000 as amended (i.e. the Bank Employee Solidarity Fund) would also be taken
advantage of, including:
• voluntary early retirement for employees meeting the requirements set by law granting
them the right to receive a pension by 1 st January 2014 (INPS “window” of no later than 1 st
January 2014 inclusive) and for employees that will obtain the right to receive a pension
after 1 st January 2014 and by no later than 1 st January 2018 (INPS “window” of no later
than 1 st January 2018 inclusive);
• the suspension of work or a reduction in working hours of up to 220,000 working days to
be implemented during the period 2013-2015, with a corresponding reduction in wages and
including the use of the ordinary services under Article 5(1° comma, lett a), point 2, of the
aforementioned ministerial decree No. 158/2000.
Overall, the targets set at the
Group level have been amply
achieved, as was seen during the
verification process with the trade
unions that signed the framework
agreement reached on 12 th
During the established sign-up
period, 920 requests for voluntary
early retirement were received.
Given the greater demand, a
supplement to the agreement was
signed by the trade unions that
allows for additional requests to
be accepted for a total of 736 early
retirements during the first
quarter of 2013, of which roughly
600 had already been carried out
by the end of January.
UBI Banca Group early retirement plan
No. of employees
29 11 2012
12 2 2013
UBI Banca 41 55
UBI Sistemi e Servizi 103 131
Banco di Brescia 39 48
Banca Popolare di Bergamo 106 116
Banca Popolare Commercio e Industria 39 55
Banca Regionale Europea 57 83
Banca Popolare di Ancona 72 68
Banca di Valle Camonica 6 14
Banca Carime 187 150
Centrobanca - 7
UBI Leasing - 3
UBI Factor - 5
UBI Banca Private Investment - 1
Total 650 736
As for the reduction of hours or the suspension of work, here, too, demand amply surpassed
the target of 220,000 working days. As such, the trade unions agreed to accept requests for a
total of no more than 377,459 days over the course of 2013-2015, which are to be financed, as
agreed, using the “National Income Support Fund”.
In order to support generation turnover, with the agreement of 29 th November 2012, a plan
was agreed to render contracts permanent and to hire 240 young people over three years
starting from 2013, taking advantage, amongst other things, of the opportunities afforded by
the “National Employment Fund”, recently established when the national labour contract was
renewed. The trade union agreement document signed on 12 th February 2013 called for
and 42 years 3 months in 2014. These age limits are to be increased further based on the mechanism linking retirement age to life
increasing this number by a further 43 young people in order to take account of the greater
number of early retirements than originally expected.
The one-off charges for the early retirements totalled €143.5 million, which was charged in its
entirety to the consolidated income statement during the fourth quarter of 2012.
On the whole, these initiatives (redundancies and suspension/reduction of working hours)
defined together with the trade union organisations will allow gross savings to be achieved,
beginning in 2013, estimated when fully phased-in in 2014 at over €100 million.
In parallel with these trade union proceedings and in an effort to achieve the same goals, UBI
Banca defined a “managerial manoeuvre” aimed at reorganising both the number of senior
executives and their related remuneration, for which the one-off charge for the Group is
estimated at €4.5 million not including the costs related to the personnel involved in the early
retirement plan. This expense has already been charged to the income statement in the third
quarter of 2012 and the consequent benefit in terms of the cost of labour is estimated at
roughly €7 million.
The optimisation of Group functioning
From a structural point of view, the reduction of administrative costs falls within the scope of
a broader programme referred to as the “Optimisation of Group Functioning”, which has been
organised and implemented in three stages.
Effective as of 5 th November 2012, the organisation of UBI Banca, UBI Sistemi e Servizi and of
the various network banks has been revised and the procedures for interaction between the
Parent and the network banks have been updated in order to further increase focus and
specialisation in their respective roles. In this respect the Parent is committed to providing
guidance, co-ordination, monitoring and support with an increasing focus on operations and
the network banks, within the scope of their respective prerogatives of governance, are keenly
focused on managing their local markets, optimising their distribution capacities and
controlling risks, with a particular emphasis on credit and operational risk.
The launch of stage one of the programme (roll-out) included the following actions:
• the organisational changes at the Parent, UBI Banca, with the following objectives:
- simplification through streamlining units and shortening reporting lines;
- redistribution and aggregation of activities in order to achieve greater synergies and
improve the management of the individual processes;
- standardisation and adaptation at the same time to innovations introduced to the
organisational structure of the network banks, with regard above all to commercial
- a change of focus by management with regard to risk and credit;
• the adoption of a new organisational model for UBI Sistemi e Servizi, with the following
- simplification of the organisational structure, which now consists of divisions,
departments and sectors, with the creation of a specific Business Services Division
based on the same operational areas as those in the Parent, in order to constitute the
primary interface with it;
- organisation of work in teams and improvements to some internal processes in order to
achieve greater fluidity in operations;
• the revision of the organisational structure of the network banks in the following areas:
- commercial, with the elimination of commercial retail/corporate/private-banking staff
units and the centralisation at the same time of the activities at the Parent, by creating
network support units for each market (retail and private banking/corporate);
- governance and support, with the creation of two new units: “General Management
Support”, to optimise the operations of all management support activities, and “Human
resources and organisation”, the latter along the same lines of that in the Parent and
complementary to it in order to promote greater co-ordination in the integrated
management of employee mobility within the Group and more effective implementation
of the projects developed.
On 10 th December 2012, stage two of the programme (branch network optimisation) began. This
stage focused on the scheduled series of actions involving the distribution network as follows:
the closure of branches and mini-branches where there was geographical overlap; and the
transformation of smaller branches into mini-branches. These actions affected Banca Popolare
di Bergamo, Banco di Brescia, Banca Popolare Commercio e Industria, Banca Regionale
Europea, Banca Popolare di Ancona, Banca Carime and Banca di Valle Camonica.
For a more detailed analysis, see the related section below, “Action undertaken on the branch
network of the Group”, where all of the changes that took place during the year are described.
Finally, on 7 th January 2013, stage three of the programme (completion) was implemented,
including the final part of the actions affecting the commercial processes of the network banks
in order to simplify coordinating activities and related roles and to enhance cross-market
coverage by developing a dedicated range of products and services and providing the new
specialist skills needed for our business and corporate customers.
The following actions were taken in particular: elimination of the commercial area, with the
Local Departments now reporting directly to General Management; elimination of the Retail
Co-ordination Staff Units of the Local Departments; the revision of the distribution network
with the introduction of integrated “Private & Corporate Unity” points of sale and the
elimination at the same time of the previous corporate-banking and private-banking units;
and, in the retail area, the revision of the branch groups (for the banks that adopt the
Head/Group model) and the consequent redistribution of the small-business and SME
customer portfolios among the former “Group” banks.
UBI Banca is the first Italian bank to unify its private
and corporate banking markets. From this integration,
we created UBI Banca Private & Corporate Unity, a
single unit for the management, custody and
development of the wealth of both businesses and
individuals. This range of products and services meets
the need to combine consulting services for individuals
with a specialist approach towards businesses, made
possible by the creation of specific units and the use of
expert teams. From the point of view of the
businessman-corporate client, value will be created by
way of the innovative, integrated advisory approach: for
personal wealth (Pro-Active Wealth Advisory®); for
generation turnover (Family Business Advisory®); and
for businesses (Corporate Advisory).
The new structure currently includes over 600
specialist bankers working in branches throughout
Private & Corporate Banking Units
Private & Corporate Banking Units 131
Private & Corporate Banking Units (PCUs) (*) 50
Banca Popolare di Bergamo 13
Banco di Brescia 9
Banca Popolare Commercio e Industria 7
Banca Regionale Europea 7
Banca Carime 5
Banca Popolare di Ancona 7
Banca di Valle Camonica 2
Banca Popolare di Bergamo 26
Banco di Brescia 12
Banca Popolare Commercio e Industria 9
Banca Regionale Europea 4
Banca Carime 6
Banca Popolare di Ancona 22
Banca di Valle Camonica 2
(*) The figure do es no t include s ix units o f UB I Banca P rivate Inves tment dedicated to
private banking cus to mers o nly.
The reduction of governance costs
The process of strategic organisational change for the Group as announced last July also
called for efforts to optimise governance costs. This commitment, which is to include a
reduction in both the number of and the fees paid to the members of the various corporate
bodies, was also expressed in a statement included in the framework agreement of 29 th
In line with the above, and as proposed by the Remuneration Committee, the Supervisory
Board authorised a proposal to be presented at the 2013 Shareholders Meeting to appoint the
new Supervisory Board for a reduction in the annual fees paid to members of that Board and
in the total annual remuneration paid to the Board Members vested with special powers, roles
and responsibilities. The Board has also prepared a proposed guideline for a reduction in the
remuneration of the Management Board, which is then to be promptly confirmed and finalised
by the newly appointed Supervisory Board.
As for the other Group companies, the Management Board has conducted an analysis of the
Articles of Association of the various subsidiaries with regard to the composition of the Boards
of Directors and related specific appointments. In light of this study, the Board then approved
a reduction in the number of members on the corporate boards of some companies and
consequent changes to their articles of association where necessary.
Therefore, in the first months of 2013, the Board took steps to initiate the process and
submitted the related documentation to the Supervisory Board where necessary.
The planned actions described above will result in a significant reduction in the total fees paid
throughout the Group and this will be implemented gradually as the terms of office of the
current Boards of Directors expire naturally.
Action undertaken on the branch network of the Group
In 2012, the distribution network of the UBI Banca Group underwent numerous actions
related mainly to the need to further rationalise the Group’s geographical presence in markets
that are either saturated or show limited room for growth, including changes to the units that
do not show sufficient current and/or potential profitability and at the same time to
strengthen both the branches that are close to those that are undergoing these changes and
those that show the greatest potential for growth.
In this context, two mass actions were carried out that affected all of the network banks and
made it possible to contain operating costs by eliminating several costly lease agreements.
The actions taken, effective as of 27 th February 2012, resulted in:
• the closure of 32 branches 2 and 46 mini-branches;
• the transformation of 40 branches into mini-branches and one mini-branch into a branch;
• the partial transfer of customers belonging to one branch and transformations into parent units for three
The subsequent rationalisation, effective as of 10 th December, was achieved through:
• the closure of 34 branches and 33 mini-branches;
• the transformation of 80 branches into mini-branches;
• transformations into parent units for four mini-branches.
At the same time, work was done within the broader efforts to simplify the Group’s
organisation and better focus geographical coverage, including the merger of Banco di San
Giorgio into Banca Regionale Europea (BRE), effective as of 22 nd October.
Action taken on the branch network of the Group in Italy in 2012
Openings/Merger acquisitions: Closures: Transformation of
branches mini-branches branches mini-branches
UBI Banca Scpa (*) 1 - - - - -
Banca Popolare di Bergamo Spa 3 - 4 4 16 -
Banco di Brescia Spa - - 33 9 24 -
Banca Popolare Commercio e Industria Spa - - 10 6 25 1
Banca Regionale Europea Spa (*) 45 8 7 16 17 -
Banca Popolare di Ancona Spa 1 - 5 14 21 -
Banca Carime Spa - 1 6 34 15 -
Banca di Valle Camonica Spa - - - - 2 -
Banco di San Giorgio Spa (*) - - 48 9 2 -
UBI Banca Private Investment Spa - - 1 - - -
B@nca 24-7 (*) - - 1 - - -
TOTAL 50 9 115 92 122 1
(*) The changes take into account the effects of the mergers of B@nca 24-7 into UBI Banca and of Banco di San Giorgio into BRE.
2 For logistics and organisational reasons, the closure or two Banca Popolare di Bergamo branches could only be performed after the
preparatory stage for the transformation into mini-branches. These branches have therefore been counted among transformations
into mini-branches in the table for 2012 changes and subsequently among closures of mini-branches.
The general economic landscape, on the other hand, called for a prudent revision of our short
and medium-term strategy regarding new branch openings, limiting them to tangible business
opportunities that should arise in a given area, although this does not affect the policy of
ongoing development and innovation in other commercial channels as alternatives to the
bricks-and-mortar variety. In 2012, the network banks opened six new branches in Italy (four
branches and two mini-branches). In January 2013, five BPB treasury branches were
transformed into mini-branches.
The ongoing rationalisation process also involves the logistical transfer of operating units
within the towns and cities where they are currently located with a view to a more appropriate
sizing of units and also to optimising costs.
A detailed report on closures and openings in the branch network of the Group that occurred in 2012 is given in the
subsequent section “The distribution network and positioning”.
Action to streamline the ownership structure and areas of
During the year, a series of actions were undertaken which sought to simplify and streamline
the Group’s structure and its areas of business. The strategic aspects of these initiatives,
which were approved in part by the UBI Banca Management Board on 14 th November 2011,
are summarised below, whereas the subsequent section “The scope of the consolidation”
provides details regarding the legal and corporate aspects of these operations and their impact
on the consolidation scope.
An important banking centre has been created in the North-West of the country:
- on 22 nd October 2012, the merger of Banco di San Giorgio into Banca Regionale Europea
became effective. The operation, based on clear and natural connections and synergies
existing between Liguria, Piedmont, Valle d’Aosta and the nearby France, was designed to
safeguard the recognised high quality of the activities and services which had been provided
by BSG, as well as its strong roots in local communities. The brand name of this Ligurian
bank has therefore been left on signs at branches and also on many documents. With the
merger, central units of BSG have been integrated into their counterparts at BRE on the
basis of the organisational model of the surviving bank, while branch network units have
been renamed and in some cases also transformed.
The process to streamline consumer credit business has been completed:
- on 1 st July 2012, the contribution of the “salary and pension backed loans and payment
authorisations” line of business by B@nca 24-7 to Prestitalia became effective. The
beneficiary company, which received approximately €3 billion of loans and receivables,
therefore became the Group company which specialises in this business sector;
- on 23 rd July 2012, the merger of B@nca 24-7 into UBI Banca became effective. The Parent
took full ownership of all assets, liabilities, rights, obligations and contractual
relationships, and it assumed the role of credit card issuer and will manage the remaining
outstanding non-captive mortgages and personal and special purpose loans of B@nca 24-7
(approximately €7 billion of loans). Operations for new disbursements for captive personal
loans had already been transferred to the Group’s network banks in May 2012;
- on 21 st December 2012, the merger of the Società Italiana Leasing e Financing Spa (SILF) into
UBI Banca was completed. In addition to helping to optimise overhead costs, this operation
represented the final act, from a corporate point of view, in the broader project of reorganising
the consumer credit segment, which, in April 2012, had already led to bringing a halt to
disbursements of non-captive personal loans, the origination of which was SILF’s sole
business. The company was therefore no longer operational (all the agent mandates having
been revoked) and the outstanding loan portfolio is now managed by UBI Banca following the
merger into it of B@nca 24-7.
An IW Bank business unit has been transferred to UBI.S:
- the transfer of an IW Bank business unit to UBI.S was completed on 30 th November 2012.
This business unit includes:
• information technology (application management, facility management and relations
with software vendors and providers of IT infrastructures) and back office activities
(limited to the financial services segment, i.e. regulations, securities custody, and back
office activities for funds and derivatives);
• security (both physical security and fraud) and logistics.
The operation will allow IW Bank to focus more on its business activities, conserving and
strengthening its specific online character operating with its own brand. At the same time,
the transfer of these activities to UBI.S has integrated internet banking within the Group’s
service model, thereby providing numerous benefits in terms of:
• aligning the operational model with existing operations at other Group banks;
• providing support to major operational areas with the expertise already present at UBI.S
(which has, for said purpose, made the changes needed to integrate the organisationsal
units constituting the operations contributed. This included the creation of a new unit
named “IWBank and Innovative Channels”, while the assets and personnel related to the
real estate and security areas have been allocated to the UBI.S units that handle those
areas of business);
• extending oversight of IT governance by UBI.S;
• creating cost synergies when fully operational as a result of geographical and
technological convergence of the basic IT infrastructures.
Also during the year, the Group completed the following operations with the same goal
- on 1 st August 2012, InvestNet International was merged into IW Bank;
- on 3 rd September 2012, the process resulting from exercising our right to withdrawal on the
shares in Arca SGR was completed;
- on 25 th October 2012, the voluntary liquidation of Barberini (which until January 2011 had
a controlling interest in Prestitalia) was completed;
- On 21 st December 2012, UBI Insurance Broker was sold with the goal of both optimising our
insurance brokerage services and realising cost savings.
Ten-year co-operation agreements were signed on an exclusive basis as part of the
operation, which involve maintaining all the current commercial relations of the company
and growth in the capacity to provide services to the corporate clients of the UBI Banca
On 6 th February 2012, the merger of Centrobanca into UBI Banca began and should be
completed during the first half of the year. Authorised by the Bank of Italy on 20 th February
2013, the merger had already been announced in November 2011 and is a part of the ongoing
process to simplify the Group’s organisation.
-The specialised lines of business currently handled by Centrobanca, particularly those in the
areas of corporate and investment banking, will continue to be managed by units within the
Parent and/or in tandem with other areas of its operations. UBI Sistemi e Servizi has already
selected the IT architecture needed to provide the necessary support for the specialist needs of
the activities to be migrated to the target system.
In the same way, the financial service activities conducted by Centrobanca will be allocated to
UBI Banca as part of the existing model, which already calls for a clear separation between
finance for the bank and finance for our customers.
The recapitalisation plan requested by the EBA
On the capital front, on 20 th January 2012 UBI Banca submitted a plan to the domestic
Supervisory Authority to achieve a core tier-one ratio of 9% by the end of June 2012, as
required by the European Banking Authority on the basis of the results of the capital exercise
conducted on 30 th September 2011 (pursuant to the recommendation of 8 th December 3 ).
In consideration of the temporary nature of the requested increase, the UBI Banca plan fully
excluded the option of new resort to the market following the substantial operation conducted
in the spring of 2011. It relied primarily, on the one hand, on the adoption of advanced
internal models for the calculation of capital requirements for corporate credit risk and on the
other, on further action to optimise risk weighted assets and on self funding.
With Bank of Italy measure No. 423940 of 16 th May 2012, the UBI Banca Group obtained the
authorisations needed to use advanced internal rating based (AIRB) systems to calculate capital
requirements for credit risk – i.e. the corporate (“exposure to businesses”) segment of the
network banks and Centrobanca – and for operational risk (using the Advanced Measurement
Approach, or “AMA”) for UBI Banca, UBI.S, Centrobanca and the network banks. 4
With the reduction in risk-weighted assets allowed by using these internal models, the Group’s
core tier one capital had already improved by 92 basis points by 30 th June 2012 (84 basis
points resulting from the use of the advanced approach to measure corporate credit risk and
eight basis points from using the AMA to measure operational risk).
In the second half of 2012, another phase of the Basel 2 project began. This phase calls for
extending the use of AIRB systems for credit risk to the retail segment for the portfolio
segments of “exposures backed by residential properties” and “other retail exposures towards
small businesses”. Within this context, the application of these models to the corporate area
will also be expanded to include UBI Banca.
Subject to prior authorisation by the supervisory authority, the goal is to use the retail models
for regulatory purposes in 2013.
The use of valuation reserves from revaluations of properties as authorised by prior year
special laws falls within the scope of the initiatives undertaken. They were used to perform no
cost increases to the share capital with the objective of increasing the core tier one ratio of
both the banks concerned and the Group.
The inclusion of those reserves within capital (pursuant to Art. 2442 of the Italian Civil Code)
does in fact involve the transfer of capital resources from the tier two capital to the tier one
capital, with a consequent improvement in the quality of the latter.
This action affected the following two banks:
• Banca Popolare di Ancona Spa: on 26 th June 2012, the bank approved an increase in share
capital in the amount of €24,958,090.32 by increasing the par value of its stock from €5.00
to €6.02 per share;
3 The recommendation concerning the creation of a temporary capital buffer to restore the confidence of the markets was issued by
the Board of Supervisors of the EBA on 8 th December 2011 in order to address the difficult situation facing the banking system in
the European Union, especially with regard to sovereign debt risk, and to restore stability to markets. The recommendation formed
part of a series of measures agreed within the EU, and it invited national supervisory authorities to ask banks included in a sample
to create an exceptional and temporary capital buffer to bring their core tier-one ratios up to at least 9%, by the end of June 2012.
Banks were also requested to form an exceptional and temporary buffer to cover exposure to sovereign debt, sufficient to reflect the
valuation at market prices at the end of September 2011. Despite the fact that prices significantly improved in the meantime, the
amount of the capital buffer required to cover the sovereign debt was not changed.
The initial sample of the banks that took part in the capital exercise consisted of 71 banks. The six Greek banks were treated
separately to take account of Greek participation in a programme of joint European Union and International Monetary Fund
assistance. Another four banks belonging to the original sample (Oesterreichische Volksbank AG, Dexia, WestLB AG and Bankia) are
monitored separately, because they are involved in significant restructuring processes. The final results published therefore involved
4 Compliance with qualitative and quantitative requirements set by the regulations for the advanced internal rating based (AIRB)
approach for the calculation of capital requirements for corporate credit risk and recognition of it for prudential purposes, as well as
validation of the advanced measurement approach (AMA) for the calculation of capital requirements for operational risk.
• Banca Regionale Europea Spa: on 27 th June 2012, the bank approved an increase in share
capital in the amount of €117,220,087.01 by increasing the par value of its stock from
€0.52 to €0.65 per share.
The impact of these actions on the consolidated core tier one capital was approximately €34
Finally, following the revision of supervisory regulations concerning redemptions and the
repurchase of liabilities that qualify for inclusion in regulatory capital – which eliminated the
replacement obligation that put limits on liability management – the Group performed a
repurchase operation in February and March 2012 by launching a public tender offer on its own
institutional liabilities, consisting of preference shares.
The offer generated a gain of approximately €15 million (net of taxes and the expenses
incurred) recognised in the first quarter of 2012. It also made it possible to generate higher
quality capital and to benefit from lower interest expense of over €7 million per year.
The action described above was taken together with measures to reclassify and rationalise risk
weighted assets, with regard above all to loans and advances to customers, performed in
selective terms, without prejudice to the Group’s traditional support to local economies and its
As confirmed by the EBA and by the Bank of Italy on 3 rd October 2012 (when the final result
for the year was published), the UBI Banca Group has fully complied with the
recommendation of reaching a core tier one capital ratio of greater than 9%, including the
sovereign-debt securities buffer, by achieving a ratio of 9.24% as at 30 th June 2012 and 9.16%
at year end.
That ratio not only included the fair valuation of sovereign-debt risk as at 30 th September 2011 (€868 million), but it
also comprises, in accordance with EBA instructions, a minimum capital requirement of 80% of capital requirements
calculated on the basis of Basel 1 rules.
Action taken on the liquidity front
During the first half of the year, the Group carried out important actions to strengthen
liquidity reserves and also to achieve sustainable funding from customers, which are basic
and necessary conditions to be able to provide financial support to economies in our local
On the liquidity front, while on the one hand the funds obtained from the European Central
Bank from two long-term refinancing operations (€12 billion) provided greater stability to the
structure of balance sheet liabilities, on the other hand, given the weak demand for credit from
the economy, they allowed new investments to be made in government securities with a view
to supporting net interest income, which increased Group liquidity reserves at the same time,
consisting of assets eligible for refinancing operations. These assets have nearly tripled
compared to December 2011, going from €11.6 to €29.4 billion, having benefited, in part, from
two government-backed issues in the first part of the year for a total nominal value of €6
Given the ample pool of segregated assets available to back the covered bonds, three selfretained
issuances were carried out in February for a total nominal value of €750 million as
part of the residential programme. At the same time, a second programme backed by
commercial loans intended solely for self-retained issues was structured and two issues have
already been carried out for a total nominal value of €2.3 billion (€1.8 billion in May and €0.5
billion in October).
Furthermore, and again with regard to initiatives designed to increase assets eligible as
collateral with the ECB, three new special-purpose vehicles (SPVs) were formed in accordance
with Law No. 130/1999 to be the purchasers of the new portfolios of loans eligible as
underlying collateral for Eurosystem monetary policy operations. On 8 th December 2011, one
of the measures decided by the ECB to support the bank liquidity was the extension of the
type of asset backed securities eligible for refinancing that can be securitised to include
performing loans to approved parties such as SMEs as defined in EU regulations.
Consequently, on 19 th April the following special purpose vehicles were formed: UBI SPV BBS
2012 Srl, UBI SPV BPCI 2012 Srl and UBI SPV BPA 2012 Srl.
On 26 th June 2012, the network banks involved sold loans for a total remaining principal
balance of €3 billion to their respective SPEs: €889 million for Banco di Brescia; €852 million
for Banca Popolare Commercio e Industria; and €1,017 million for Banca Popolare di Ancona.
On 30 th October 2012, securities were issued for a total of €1.93 billion in class A notes (€1.25
billion net of haircuts) and €829 million in class B notes.
In 2012, the UBI Banca Group launched a project to optimise Group functioning, designed, amongst other
things, to streamline the distribution network, to create synergies between services to private and corporate
banking customers and to standardise network bank branch units in order to simplify support activities
(the previous section “Significant events that occurred during the year” may be consulted in this respect).
The commercial performance of the Group continued to be focused on growth in direct funding, consistent
with the maintenance of high standards of structural balance.
Products such as bond issuances, new ranges of “welcome edition” deposit accounts and a specific
commercial campaign entitled “Risparmi Premiati” (rewarded savings) were employed to achieve this
objective. The campaign included the offer of a check-up to customers on their savings by account
managers, intended to enhance the UBI Banca services model on financial planning and advice as its main
distinguishing feature compared to the competition.
From the viewpoint of funding and current accounts in particular, the following were introduced: a “basic
account” designed specifically for customers in the socially most vulnerable groups, with reduced charges
for a limited number of transitions; and the “QUBÌ” account, a modular account for customers who wish to
combine the different services offered on the basis of needs and normal patterns of use on a flexible basis.
The approach to customers with regard to investments has become increasingly more advisory (“Pro-Active
Wealth Advisory” and “Family Business Advisory” for private banking customers; UBI Gold for Top Affluent
customers, in addition to the other investment advisory service model provided on the “Financial Planning
and Advisory Platform” in the “UBI Light” version) and was facilitated by the greater number of training
programmes for affluent account managers. At the same time the range of investment solutions was
diversified with new types of Sicav’s, including versions which pay a coupon and those linked to gradual
With regard to the range of insurance products, the range of non-life policies was broadened with the
launch of two new products (Blufamily xl for the health sector and Blucasa for the property sector) and it
was also enhanced with initiatives for potential customers conducted at the same time from sales outlets
and through direct channels (direct marketing campaigns using banners for selected customers on home
These initiatives for private individual customers were accompanied by action taken to improve funding
products for businesses, especially in the corporate segment, while the specialisation of the range of
advisory services for subsidised loans continued again in 2012 for the small business segment.
Initiatives concerning direct funding were accompanied by a strategy to manage lending designed to ensure
full support for medium to small-size and core corporate firms by developing customer relations across a
broad spectrum together with re-pricing action, to take account of the deterioration of credit risk and
funding conditions. Additional action was also taken to rationalise lending to the large corporate segment,
with careful management of trends for both volumes and pricing and also for the lowest credit rating
A strong focus was also maintained on the range of advisory services (“Corporate Advisory”) for mid and
large corporate clients.
Action to strengthen the multichannel strategy continued at the same time through the provision of
multichannel bank services on an innovative and complete platform which combines all the direct channels
available to private individual and business customers (internet and mobile banking, customer services,
self-service channels - ATMs and kiosks – evolved payment systems and POS terminals).
Action was taken in particular to improve the platform for online sales of the Enjoy and Qui UBI cards. New
and more powerful consultation functions were added to the platform for private individual and small
business customers and the release of free apps for smartphones, tablets and Blackberry phones were
completed. Direct marketing initiatives were also intensified through customer services activities.
Numerous changes were also introduced on the cards front, favoured by the technological advances for
these tools, with the objective of simplifying customer payment transactions. Various initiatives were
started for the Enjoy card, including some using smartphones and the Facebook social network to involve
greater numbers of potential customers.
Action also continued during the year to upgrade payment systems to comply with the European directive
on payment services (PSD) and the relative subsequent provisions, and to migrate onto SEPA payment
Finally, the Group increased its commitment for support to the third sector with the new service model for
the church and non-church nonprofit world, named UBI Community.
The retail market 1
The retail market is composed of 3.6 million customers, of which 3.3 million are private
individuals (mass market and affluent), 250 thousand are legal entities (small to medium-sized
enterprises and small economic operators) and 30 thousand are authorities, associations and
nonprofit organisations. Approximately 6,600 professional staff work in customer services
consisting of branch managers, account managers and customer contacts.
“Anti Crisis” measures to support small to medium-size enterprises 2 and
During the year the banks in the Group participated in a series of measures to help families
and business on their respective markets, both locally and nationally, co-operating with public
institutions (chambers of commerce, regional and provincial governments) and guarantee
bodies 3 .
Activities also continued, started back in 2009, to support families and small to medium-sized
enterprises with action taken, amongst other things, under the “Avviso Comune” (joint
announcement) of 3 rd August 2009 4 , the “Accordo per il Credito alle PMI” 5 (Agreement on Loans
to SMEs) of 16 th February 2011 and the agreement of 20 th January 2010 as part of the “Piano
famiglie” (families plan) organised by the Italian Banking Association.
“New measures for Credit to Small and Medium-Sized Enterprises” Accord
With regard to SMEs, in 2012 the Group adhered, on 29 th March, to the “New measures for Credit to
Small and Medium-Sized Enterprises Accord” signed on 28 th February 2012 by the Italian Banking
Association, the Ministries of the Economy and Finance and Economic Development and by other
This agreement involves the following:
1. deferments of up to twelve months on the capital repayments on medium to long-term mortgages and
unsecured loans (ordinary and subsidised) and up to twelve or six months for the repayment of the
capital portion implicit in property and non-property lease instalments, respectively;
2. extension of the terms of medium to long-term mortgages and unsecured loans (ordinary and
subsidised) for a maximum period of two years for unsecured loans and three years for mortgages;
3. extension of the maturities of short-term loans to 270 days to support cash flow requirements, for
advances on amounts that are certain, liquid and payable in cash (excluding import finance and
advances on contracts);
4. extensions for a maximum of 120 days of the terms for agricultural working capital credit pursuant to
Art. 43 of Legislative Decree No. 385/1993, granted with or without bills of exchange.
1 The retail market is composed of the following customers: mass market customers (private individuals with financial wealth – direct
and indirect funding – of less than €50,000 thousand), affluent customers (private individuals with financial wealth – direct and
indirect funding of between €50,000 thousand and €500,000 thousand) and small businesses (small economic operators with
turnover of less than €300,000 and businesses with turnover between €300,000 and €15,000,000).
2 According to the definition in EU regulations, small-to-medium size 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 or with
total assets of less than €43 million.
3 The Group participated in various initiatives to provide subsidies to businesses, including the following: measures in the Piedmont
Region for development and the promotion of co-operation with backing from the Regional Guarantee Fund; measures in the
Lombardy Region to support businesses backed by the following Fondi di Rotazione (rotation funds) funds, “FESR Sottomisura 2”
funds for the “Industrial application of the results of research” and “FRIM Linee 1, 4 e 5” funds for “company development”, “growth
in size” and the “transfer of company ownership” and also measures to support farms for investments under the “Extraordinary
Programme for the implementation of the Nitrates Directive” (e.g. biogas co-generation plants); measures in the Apulia Region to
support businesses in accordance with the new regulations under the Regional Operational Programme.
4 This agreement, which became operational on 28 th September 2009 is for SMEs that were in temporary difficulty but which reported
good operating prospects and were going concerns. It enabled them to benefit from four measures: i) the deferment for twelve months
of principal repayments on mortgages; ii) the deferment for twelve or six months of the principal repayment portion of property or
equipment leasing instalments respectively; iii) an extension to 270 days for the repayment of bank advances on short-term
receivables; iv) special finance designed to strengthen capital.
5 This agreement, which became operational on 21 st March 2011, involved the following: i) the extension until 31 st July 2011 of the
time limit for the presentation of applications to defer loans to banks in accordance with the Avviso Comune; ii) the extension of the
repayment schedules for medium to long-term loans which had benefited from the deferment under the Avviso Comune by up to a
maximum of two years (three years for secured loans). The deadline that had been set for the presentation of applications for
extensions by businesses was 31 st December 2011. The Group agreed to maintain the existing contractually agreed interest rate if
the extension had benefited from backing made available by the Cassa Deposito e Prestiti (CDP – state controlled fund and deposit
institution) on the basis of a special agreement signed on 31 st May 2011, which involved the assignment of a budget of up to a
maximum of €54,529,000.
By signing that agreement, the Group is committed to maintaining the contractually agreed interest rate
if, amongst the other conditions, the deferment or extension benefits from backing from the Guarantee
Fund for SMEs or the ISMEA (agricultural food market services institute) fund.
Again, in accordance with the agreement, the offer was renewed by Group banks to provide funding to
promote the recovery and development of economic activities by an amount proportional to increases in
owners’ funds made by businesses.
The deadline set for the presentation of applications, which was originally 31 st December 2012, was
extended until 31 st March 2013.
Approximately 20,700 applications were processed by the Group for deferments under the “Avviso
Comune” (joint announcement) and subsequent agreements – mainly on medium to long-term loans – for
a total of €6.8 billion and for deferred capital repayments of €850 million. Almost all the applications
meeting the requirements for eligibility were accepted.
In accordance with the agreements cited, approximately 350 applications were presented to extend
repayment schedules for loans where the remaining principal totalled €107 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 20 th May 2012, UBI Banca promptly applied the measures of Decree
Law No. 74 of 6 th June 2012 and subsequent amendments and additions which, with regard to loans,
established deferment – initially until 30 th September 2012 and subsequently until 30 th November 2012 –
of repayments on mortgages and loans of any kind granted by banks to individuals and businesses who
were resident or located on 20 th May 2012 in the area of the towns hit by the earthquakes.
The deferment was on repayments due in the period between 8 th June 2012 and 30 th November 2012.
However, in order to further meet the needs of its customers, UBI Banca decided to apply the deferment
period immediately from 20 th May 2012. Loans in default were also included in the deferment.
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) to
• 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
• 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. As at 31 st December 2012, over €6.5 million of this loan pool had been used with 115
loans to both businesses and private individuals. The time limit for use was extended by six months
until 30 th June 2013.
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 5 th November 2012 by the Italian Banking
Association and the Cassa Deposito e Prestiti (CDP – state controlled fund and deposit institution), as
added to on 18 th November, for the grant of loans to population groups hit by earthquakes (private
individuals and legal entities) pursuant to Decree Law No. 174 of 10 th 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 30 th November 2012 (on the basis of legislation for
earthquake victims) and they are due from 1 st December 2012 until 30 th 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 16 th December 2012 until 30 th June 2013).
Considering that the CDP funds allocated for the loans – a maximum loan pool of €6 billion – have hardly
been used in the sector nationally, a repeat of the subsidised loan procedure is planned.
Following the applications made by customers in the set period between 19 th November 2012 and 30 th
November 2012, the Group concluded 35 transactions for more than €2 million (additions may be
equested by the beneficiaries on the basis of the amount of the actual tax to be paid to the tax
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.
“Italy Investment Projects” and “Public Administration Receivables” Loan Pool
Again under the Accord “New measures for Credit to SMEs”, UBI Banca has already decided to adhere to
two new memorandums – signed on 22 nd May 2012 again by the Italian Banking Association, the
Ministry of the Economy and Finance, the Ministry of Economic Development and by representatives of
other business associations – to assist with financing for the investment projects of SMEs (“Italy
Investment Projects”) and to facilitate the payment of amounts due to companies from public
administrations (“Public Administration Receivables”).
By signing those memorandums, the Italian Banking Association is committed to promoting the
establishment of two specific loan pools for those initiatives amounting to €10 billion for each or them:
• the first entitled “Italy Investment Projects” is designed to support SME investment projects in assets
for use in operations;
• the second entitled “Public Administration Receivables” is designed to support SMEs who find
themselves in temporary difficulty due to delays in the payment of receivables from public
administrations by paying advances on those receivables. Those receivables may be unfrozen by
paying advances on them backed by the sale with recourse of receivables certified as “certain, liquid
and payable in cash” (in accordance with article 9 paragraph 3-bis of Decree Law No. 185/2008), by
the public administration debtor with compulsory indication of the agreed date of payment.
UBI Banca decided to contribute to the formation of those loan pools by allocating €600 million to each
The legislative framework for the launch of the two initiatives was not completed until the end of
December 2012 and they therefore became operational in January 2013.
Loans to SMEs drawn from Cassa Deposito e Prestiti (CDP – state controlled fund and deposit
Again as part of “anti crisis” action taken, the grant of loans continued to support planned and/or
existing investments or to increase working capital by drawing on CDP funds resulting from post office
In this context, UBI Banca adhered to the “fourth convention” for loans to SMEs, signed by the Italian
Banking Association and the CDP on 1 st March 2012, by which the CDP made a loan pool of €10 billion
available to banks for medium to long-term loans to SMEs following the almost total use of the loan pool
of €8 billion under the three previous conventions on the matter.
The new loan pool of €10 billion is 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 and they will come into operation
in the first months of 2013.
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
A total of 300 loans worth over €13 million have been concluded, drawn from the “investments loan pool”
established for the “fourth convention” and they became operational in the Group from November 2012.
The CDP “third convention”, signed on 17 th December 2010 involved the following:
- a “ten year loan pool” usable for loans with a maturity of from seven to ten years, with funding for the
banking sector nationally of €1 billion;
- a “Stable loan pool” to finance the growth of SMEs, into which the funds not fully used by the
previous pools gradually flowed, and which comprises all maturities (three, five, seven and ten years).
In June 2012, when the funds had been fully drawn on, Group banks had granted approximately 5,700
loans amounting to €320 million.
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 662/1996 amounted to €753
million, while disbursements in 2012 totalled €312 million. Banca Carime and Banca Popolare di Ancona
are the banks involved most in the use of this form of guarantee, however in 2012, the other network
banks contributed to a greater extent because the internal process for the relative applications also
became fully operational in those banks too.
“Memorandum of Intent” of 23 rd November 2011
On 12 th January 2012, the Group adhered to the “Memorandum of Intent” at national level, signed on
23 rd November 2011, by the Italian Banking Association and various employers’ associations: Alleanza
delle Cooperative Italiane (Alliance of Italian Co-operatives), Assoconfidi (association of loan guarantee
consortiums), Confagricoltura (the farmers association), Confedilizia (confederation of builders), CIA
(Italian farmers confederation), Coldiretti (the direct small farmers’ association), Confapi (the SMEs’
association), Confindustria (confederation of industry) and Rete Imprese Italia. It regarded regulatory
changes introduced to the time limit for reporting receivables past due, which was reduced to 90 days
from 31 st December 2011. Following applications made by businesses belonging to the associations
listed, positions to be classified within past due loans were examined on the basis of the relationship
between the amount of the credit lines agreed and amounts drawn on them, with particular reference to
the size and duration of the amounts past due. This was done with a view on the one hand to educating
business members of the association on the new regulations and, on the other, to preventing possible
inconveniences arising due to possible reports of late payments.
This agreement followed a similar memorandum of 22 nd September 2011, signed in the Region of
Lombardy by the Regional Commission of the Italian Banking Association and by Assolombarda (a
Lombard employers’ association), to which the Group had similarly adhered.
Initiatives designed to support families hit by the economic crisis
In addition to the those already mentioned to help people hit by the earthquake in Emilia, initiatives to
support families hit by the economic crisis included the continuation in 2012 of the various institutional
initiatives started in previous years. These included the following:
• the “Italian Banking Association moratorium”, which forms part of the “Families Programme” 6 ,
extended until 31 st March 2013, enabled 848 customers to defer mortgage repayments during the
year (on a total debt of almost €70 million);
• the “solidarity fund for the purchase of a main dwelling” 7 , which was created as the result of an
initiative by the Ministry of the Economy and Finance and became operational at the end of 2010,
enabled 24 customers to benefit in 2012 from the deferment of repayments amounting to over €2.5
• the “Loan of hope” 8 , which as a result of amendments made in 2010 by the Italian Banking
Association and the Italian Episcopal Conference, further increased its effectiveness with the
disbursement of 300 loans for a total of €1.7 million;
• 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 2009-2011, and subsequently extended to include
those children born between 2012-2015. It has allowed 262 families to obtain a guaranteed loan for a
total of over €1.2 million;
• the agreement signed between the Italian Banking Association and the CDP for the grant of loans to
support Abruzzo families hit by the 2009 earthquake, saw the overall grant of 14 loans for a total of
• “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, which follows
on from the previous “Give them credit” programme, saw the grant during the year of almost €200
thousand to 38 students;
• finally, in February 2012, the Group adhered to the Italian Banking Association’s “Young Couples’
Fund” initiative to provide the guarantees needed to obtain a mortgage for the purchase of a first
home by young couples or even single parent families with young children, with “atypical” or
temporary employment contracts. Ten loans for a total of €1.2 million were recorded in 2012.
To confirm the Group’s closeness to its traditional local markets, it also intervened, through Banco di
Brescia and the former Banco di San Giorgio, to support towns in the Veneto and Liguria regions
respectively, hit by flooding in October 2010 and November 2011, by adhering promptly – both for
6 Briefly, the agreement involves the deferment for at least twelve months of repayments on mortgages of up to €150,000 taken out for
the purchase, construction or renovation of a main dwelling even with arrears in payments of up to 180 consecutive days for
- with taxable annual income of up to €40,000;
- who have suffered from particularly negative events (death, job-loss, becoming non self-sufficient, becoming eligible for state
7 For mortgage contracts for the purchase of a main dwelling for borrowers, this 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.
8 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.
families and for SMEs – to the measures of the Ordinances of the President’s Office of the Council of
Ministers No. 3906 of 13 th November 2010 and No. 3974 of 5 th November 2011 (deferral of mortgage
Again in 2012, the commercial strategy for the private individual segment gave priority to the
capacity to attract and develop new direct funding in observance of customer needs and
characteristics, in order to improve the overall funding capacity of the Group consistent with
the objectives of overall financial structural balance.
A particular focus was placed on the capacity to satisfy customer needs in terms of proper
diversification of savings, especially in the asset management sector, and also on meeting
growing demands for capital and family protection.
With regard to commercial action taken to develop new funding, in addition to offers of
specialist products such as bond issuances and the new range of “welcome edition” deposit
accounts, a specific new campaign entitled “Risparmi Premiati” (rewarded savings) was
This campaign, which has become an important annual appointment for the Group, was
designed to encourage customers to carry out a check-up on their savings with their account
managers and to take the opportunity at the same time to enhance the UBI Banca customer
service model on financial planning and advice, as the main distinguishing feature of the
Group compared to its competitors.
In order to strengthen customer loyalty, the campaign was developed in combination with an
advertising initiative as part of the “Formula UBI” programme, which involved giving additional
points to the customers enrolled in it on the basis of new savings.
In the asset management sector, the ability to offer a range of diversified investments was
improved with new types of Sicav, including those which pay a coupon and those linked to
fund-based savings plans. The new range of Sicav’s was received very positively by customers
and helped reverse the trend in terms of net inflows for this type of business compared to
2011. Significant growth was also recorded in 2102 in fund-based savings plans, especially
after the launch of a special advertising initiative in the third quarter of 2012.
In accordance with the introduction of the UBI Gold customer service model and with the
strategic goal of deploying an increasingly advisory approach with customers on investments,
a specific training programme was implemented for affluent account managers, which will also
continue in 2013. It is designed to improve the ability of staff to assist customers in the
formulation of investment proposals and is oriented towards efficient allocation of their
Initiatives were started with regard to protection, designed to improve the range of non-life
policies, not only in the auto sector, but also in the health and property sectors which saw the
launch of two new products (Blufamily xl for health and Blucasa for properties).
The capacity to sell non-life policies in branches was strengthened by the introduction of more
co-ordinated action between staff responsible for family customers, both at the stage of
acquiring lists of potential customers and also when making proposals to potential target
customers. The activity of making commercial proposals was also accompanied by direct
marketing action through both email and banner channels targeted at customers selected
from those that use the home banking service (Qui UBI).
Finally, on a commercial level, a specific advertising campaign was commenced in the second
quarter of 2012, linked to a competition with monthly prizes for all customers who took out a
policy or requested an estimate.
On 28 th March 2012, the Ministry of the Economy and Finance, the Italian Banking Association, the
Italian Post Office and payment services associations – consistent with and in compliance with the time
limits set by article 12, paragraph three of Decree Law No. 201/2011 – concluded a Convention to define
the features of a Basic Account: a current account designed for financial inclusion purposes, which
constitutes an effective instrument for the full and real participation of all consumers in the single
market, constituting an instrument for broad social inclusion. The account also forms part of the
framework of initiatives taken by government in the fight against the use of cash and the promotion of
more efficient payment tools, by offering pensioners an ideal product for the receipt of pensions, which
can no longer be paid in cash.
In compliance with the provisions of that Convention, marketing of Basic Accounts commenced in the
Group on 1 st June 2012. They are available to all consumers, with a limited number of transactions at
Basic Accounts are designed in particular for disadvantaged customer groups in society, with an annual
ISEE (equivalent economic status indicator) income of less than €7,500, who can make the same annual
transaction and use the same services provided for consumers, without charges and with exemption from
stamp duty. Those with the right to a pension of up to €1,500 per month, who do not belong to socially
disadvantaged groups, may as an alternative request a bank account to be opened to be used solely for
certain types of services and a limited number of transactions.
On 2 nd July 2012 marketing of QUBÌ commenced, the new modular solution which allows customers to
combine different services offered on the basis of their needs and habitual use of banking services, with
the certainty of knowing in advance how much they will spend each month for the products they have
QUBÌ enabled UBI Banca to win first place in the family category of accounts in the special classification
table of the best banking products selected by the financial newspaper Milano Finanza.
At present QUBÌ is composed of four modules:
• Semplicity, the basic version which provides the main current account services, with all transactions
exempt from registration and account management fees, Qui UBI services and Bancomat international
Libramat debit cards;
• Liberty, which, depending on the option chosen, eliminates charges on transactions;
• Convenience, for those who make purchases using payment cards, benefitting from the advantages of
• Protection, which comprises accident insurance cover for customers.
There is a monthly charge for each module. The total cost is the sum of the charges for the individual
modules and services purchased and the amount may vary as a consequence of discounts and
promotions there may be.
The commitment to support small to medium-sized enterprises continued in 2012, especially
towards firms which have demonstrated innovative capacities and the ability to adapt to the
market context, a context that has continued to impose a pricing policy strictly linked to the
risk profiles of businesses.
Great attention was paid to foreign services, to qualified growth in short-term loans, to the
ability to attract and manage the liquidity of firms and entrepreneurs and to the design of tools
for use by account managers to improve their knowledge and management of customers.
A very large training project started in 2011 was completed in 2012, designed to further
increase the expertise of Small Business Account Managers on matters of interest to
businesses: choice of sources of funding, treasury management, internationalisation
processes, knowledge of opportunities for access to subsidised access to finance and different
forms of guarantee.
Profitable co-operation is in place between network banks and the associate company SF Consulting,
controlled by the Finservice Group. This company specialises in providing consulting services on
subsidised finance: assessment of the eligibility of companies for subsidies, the preparation of investment
projects, the assessment of investment plans and general assistance in making and processing
applications for subsidised loans.
Commercial interaction with the network banks resulted in more than 1,160 new potential applications
with over 5,800 visits to firms (small businesses and corporates).
UBI Banca, SF Consulting and Finservice have also signed a convention agreement for support and
advisory activities in relation to formalities for the issue of guarantees under Law No. 662/1996
(Guarantee Fund for SMEs), which has been operational since February 2011.
The purpose of the convention is to support account managers with activities required to obtain
guarantees issued by the Fund, ranging from feasibility assessment (inclusive of assessment of the
subjective and objective requirements of the client firm) to the acquisition of guarantee certification.
Businesses can benefit from the Fund for any type of operation, provided it is directly linked to the
operating activities of the business. Depending on the nature of the eligible operations, the type of
beneficiaries and their location, the guarantee covered 85%, 80% or 60% of the loan with a maximum
amount guaranteed per firm of €1.5 million. These percentages and limits were changed and improved by
the new fund regulations which came into operation in December 2012 and were immediately
implemented by the UBI Banca Group.
As part of the convention, SF Consulting has created a special IT platform, implemented by the Group,
which allows account managers to interact with the company while applications to the manager of the
Guarantee Fund are being processed.
In 2012, UBI Banca signed a further agreement with SF Consulting, in addition to the established cooperation
for medium to long-term loans, which governs this company’s activities for the preparation and
filing – in the name of and on behalf of BPB, BPCI, BBS, BRE and Banca di Valle Camonica – of
applications for access to the Fund pursuant to Law No. 662/1996 also for short-term loans approved for
The small business service model is also based on the development of distinct product ranges
focused on business sectors. By taking account of the principal financial needs and the
specifics of the “value chain” which characterise them, these ranges are designed to
strengthen the role of UBI Banca as a “partner bank”.
Action for farms
The farming sector, which varies greatly in terms of specialisation in its production, is of great
importance to regional economies and to the national economy, partly because of its connections with
the food industry and it represents an economic sector of interest to the Group.
Purchase of supplies – livestock
A new product was made available in 2012 specifically designed for livestock farms – the first of other
similar products that will be developed for other farming sectors of interest such as the wine sector – to
meet the demand for liquidity resulting from the introduction of regulations (article 62 of Law No.
27/2012) designed to govern commercial relations between farmers, the food processing industry and the
mass retail industry.
These regulations concern the sale of goods and they establish definite and stringent time limits on
payments with fines and penalties for failure to observe them. Farms are therefore required to meet the
deadlines for paying their suppliers.
This special new product, named “Purchase of supplies – livestock”, is designed to meet the resulting
needs of farmers for liquidity and it is based on a general farm loan contract for a total maximum
amount set on the basis of the planned spending for the purchase of animal feed for raising livestock.
This credit line can be used by taking out individual short-term loans, granted up to the maximum
authorised amount set in the general contract, with a term based on the livestock cycle financed.
Direct guarantee from SGFA - Società di Gestione Fondi per l’Agroalimentare Srl
In 2012 the Group took advantage of the new regulations governing the issue of SGFA direct guarantees 9
and extended its business to include unsecured farm loans with a term of less than 18 months.
In order to further educate the distribution network on the use of that form of guarantee, promotional
and training meetings were organised with the branches in areas where farming is more important to the
economy, with the participation of representatives from SGFA, an important trade association in the
sector and from the major farming guarantee bodies.
9 A first level or direct guarantee granted by SGFA: this is the same as a standard unsecured guarantee issued by SGFA to the bank
on behalf of the borrowing business, after independent risk assessment has been performed. This “direct” guarantee covers 70-80%
of the amount of the loan concerned and is recognised as an appropriate credit risk mitigation instrument because that company is
covered by a guarantee of last resort from the Italian government.
Again, in this respect co-operation was and is being established with trade associations and guarantee
bodies that operate in the sector in order to provide assistance to account managers in the preparation of
applications to SGFA for that guarantee.
Authorities, Associations and the third sector
The year 2012 saw the progressive consolidation of the service model for authorities and third
sector associations launched in 2011 with the following objectives: to meet the specific
demands of these customers more effectively; to grasp opportunities provided by market
trends; to adapt products and services to changes in the legislative and regulatory context.
More specifically, important activity to acquire data on counterparties was carried out
designed to provide a more accurate classification of the different types of authority (which
differ in terms of type of legal status and organisational model, which are often specific). The
reclassification of approximately 20 thousand counterparties will allow targeted commercial
policies to be set through a more accurate interpretation of their needs and the launch of
dedicated initiatives in 2013.
Associations and guarantee bodies
In order to support businesses and firms on the Group’s local markets and with a view to
facilitating access to credit by SMEs under competitive conditions in an economic and
financial environment which has been difficult for some time now, a central role continues to
be reserved to relations between Group Banks and guarantee consortiums and trade
associations as well as to the use of public sector instruments to mitigate credit risk, such as
the Guarantee fund for SMEs (pursuant to Law No. 662/1996) and the fund managed by
SGFA (Fund Management Company for the agricultural and food sectors) for farms.
As a result of new loan disbursements – €1,258 million for over 17,700 loans – total
outstanding loans backed by guarantee bodies and guarantee funds amounted at year-end to
approximately €3.7 billion.
The broad range of existing products was updated to incorporate the main initiatives organised
in co-operation with trade associations and local public institutions (chambers of commerce,
regions and provinces), in addition to specific initiatives launched at local level by individual
More specifically, with a view to supporting local businesses and providing a concrete answer
to strong concerns in the sector nationally in Italy over credit rationing for the real economy,
in the second half UBI Banca launched the project T 2 Territorio per il Territorio (C 2 The
Community for the Community), which involved the acquisition of funding – through the issue
of dedicated 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 promoted as part of that project – designed to help channel funding
acquired directly into a local market to support SMEs operating in that local area – by the
Parent or by Group banks in co-operation with local organisations and associations (consisting
for example of trade associations):
the first, launched in July, involved BBS, BPB and Banca di Valle Camonica in partnership with the
Associazione Industriali di Brescia (Brescia Association of Industrialists) with the issuance of bonds
for a total of €23 million and the subsequent creation of a loan pool of €46 million;
the second, which saw the issuance of bonds for a total of €16 million by BPB, BBS and Banca di
Valle Camonica and the subsequent creation of a loan pool of €32 million for the benefit of member
companies of the Bergamo Confindustria (confederation of industry);
there then followed an issuance of bonds, listed on the MOT (electronic bond market), for a total of
€18.55 million by UBI Banca – placed by BPCI, BPB and BBS – with the subsequent creation of a loan
pool of up to €37.1 million for the benefit of member companies of Assolombarda (an employers
association in the Milan area);
this was again followed by the issuance of bonds for a total of €5 million by BPB and the subsequent
creation of a loan pool of €10 million for the benefit of businesses registered with the Lecco Chamber
of Commerce and of member companies of the main local trade associations.
Further initiatives will be added to these in 2013, including those of BRE to assist business
members of the Cuneo Confartigianato (artisans’ association) and of BPB to assist businesses
registered with the Brianza Chamber of Commerce, Monza Brianza which are members of the
main local trade associations.
In the light of the increased competition between guarantee bodies and ownership changes
that have occurred in recent years (company reorganisations and mergers between guarantee
bodies and the transformation of some guarantee bodies into intermediaries supervised by the
Bank of Italy), activity to revise existing convention agreements with guarantee bodies (to bring
them into line with Bank of Italy prudential supervisory provisions in order to further reduce
regulatory capital requirements) has continued and is almost complete.
The UBI Community customer service model for the church and non-church nonprofit world
became firmly established in 2012. It was launched in the second half of 2011 with the
objective of providing rapid and effective responses to emerging needs in the third sector,
thereby further enhancing ties between the network banks and local communities.
Relations with nonprofit organisations (NPOs) are of strategic importance due to the
considerable growth in this sector over the last two decades. According to the latest – and still
provisional – Istat (national office for statistics) data (third nonprofit census), today there are
over 470 thousand NPOs active in Italy and they involve individuals linked to them –
employees, volunteers and helpers – which total at least five million people. UBI Community
was been positively received because it is considered a commercial proposal that is calibrated
to meet real needs and is able to support growth plans, thanks to its range of products and
services specially designed to provide banking and credit support for the management of daily
activities, projects and investments.
The range of commercial products and services has been progressively added to as follows:
• in April 2012, UBI Community social bonds were launched, an important innovation in the sector
nationally, which brought Italy into line with the more evolved European countries in the area of
finance for nonprofit organisations. UBI Community social bonds provide subscribers with the
opportunity to obtain a return on their investment (in line with the rates offered by the Bank with
respect to similar investments) and at the same time to help support high social value and impact
projects organised by public and private sector organisations in local communities. More specifically,
the Bank donates part of the funding acquired to support those initiatives, or it injects it into a loan
pool to disburse funds to third sector initiatives.
The reception by customers was very positive, which bears witness to the extent to which the Bank,
with its values and objectives as the issuer, is in tune with local communities: from April until the
end of the year, the UBI Banca Group issued 17 social bonds (14 by the network banks and three by
the Parent), which in many cases were fully subscribed well before the issue period came to an end.
Social bonds were issued worth €198.54 million, which resulted in charitable donations of over €1
million to institutions operating in the following sectors: social and welfare (8), public utility
infrastructures and services (5), universities and research (1), education and training (1) and
community and economic development (2).
Particularly important among these were the social bonds “UBI Comunità per l'imprenditoria sociale del
sistema CGM” issued by the Parent, which enabled a loan pool of €17.552 million to be created to be
used to grant medium to long-term loans under competitive terms and conditions to consortiums,
firms and social co-operatives that are members of the Consorzio Nazionale della Cooperazione Sociale
Gino Mattarelli (CGM – the Gino Mattarelli national consortium of social co-operation). Further
issuances of social bonds are planned for 2013;
• marketing of a new bundled product was launched in June 2012 entitled “Non Profit On Line”,
specially for organisations that prefer to use internet channels.
At the same time, the road show for the presentation of UBI Community to operators in the
sector, which had visited Milan, Genoa, Bergamo, Pavia and Jesi the year before continued. In
March and April Banca Popolare di Bergamo organised meetings at Varese, Monza and Erba
and in November Banco di Brescia and Banca di Valle Camonica held a joint event at Concesio
Important agreements have been concluded in the UBI Community context with major
nonprofit organisations and representatives of operators in the sector – the CGM Co-operative
Group, Federazione Italiana Scuole Materne di Bergamo e Brescia (the Bergamo and Brescia
Italian Federation of children’s nurseries) and Accademia Teatro alla Scala (La Scala theatre
academy) – designed to make products and services available to stakeholders under
competitive terms and conditions, with particular reference to access to sources of finance.
A fundamental requirement of the UBI Community customer service model is thorough
assessment of the creditworthiness of nonprofit organisations. Special tools have been created
for this purpose, able to value them on the basis of their specific characteristics and testing
was carried out during the year by some network banks to verify their effectiveness, with a
view, therefore, to adopting them as additional tools for assessing nonprofit counterparties.
With technical assistance from AICCON (Italian Association for the promotion of a co-operation
and nonprofit culture), UBI Banca has created the first national observatory on finance and
the third sector, a tool for processing and divulging information annually on the financial
requirements of the third sector. The observatory’s first publication was on the results of a
survey of the financial requirements of a sample of social co-operatives in Italy.
The “authorities” segment comprises public authorities and those institutions for which the
banks in the Group provide treasury management and payment and collection services (1,894
services of this type were managed at the end of December).
Commercial guidelines were drawn up during the year to define the terms and conditions to
apply to the treasury management and payment and collection service for public authorities
on core services with the objective of standardising the approach by network banks. The
significant regulatory changes that occurred in 2012, and in particular the changeover of
many authorities managed to a “Single Treasury” – which involved an outflow of funds of
approximately €430 million as a result of the centralisation of all funds held in special
accounts opened in the name of the authorities with the Bank of Italy – placed a question
mark over the operating and financial balance underlying existing treasury and cash services,
which resulted in the increasing use of a “cost to serve” approach to this type of business. The
implementation of commercial guidelines will continue in 2013 for non-core services.
The year 2012 was also one of significant changes in the collection and payment service
provided for schools. The Group worked profitably with the MIUR – Ministry of Education,
Universities and Research – participating in the preparatory stages for the launch of a project
to adopt the “IT Ordinance” in schools and it created a special task-force to provide schools
with expert and professional assistance to help them with the changeover to a paperless
The attention paid to the computerisation of treasury management and collection and
payment services provided to authorities also led to the proposal of a “substitute record
keeping” service for the relative documentation, which enables authorities, together with the
“IT Ordinance” to benefit from an efficient service which reduces operating risks and is
compliant with regulations for the digitalisation of public administrations.
A customer satisfaction survey was conducted in May and June on treasury and payment and
collection services provided to public authorities. This was also used for the certification of the
system for the management of the “quality of treasury services provided to public authorities”
(UNI EN ISO standard 9001:2008). The over 800 authorities interviewed gave very high
satisfaction scores for the service delivered by the Group, both in terms of expertise and
efficiency (see the following sub-section on customer care in this respect).
PattiChiari Consortium: Commitments to Quality
The involvement of Group banks in the PattiChiari Consortium continued during the year in
question with the application of “Commitments to Quality” and the dissemination of financial
As concerns “Commitments to Quality” (some of which were subject to specific action to
update them in consideration of the very many changes in the regulatory framework),
monitoring of results confirmed the increasingly higher levels of compliance, with positive
repercussions on the standard of service actually provided to customers.
Further action was planned in the second half of the year to enable customers, even as early
as 2013, to see even more clearly the areas in which self-regulation of the industry is
developing (current accounts compared, the transferability of services, the security of
transactions, credit assistance), thereby enhancing the commitment of member banks.
The network banks also continued to take action with regard to the dissemination of financial
education, above all with didactic activities for students. The brilliant results achieved, both in
numerical and qualitative terms, were again explicitly acknowledged by the consortium.
The contribution already made for many years by the Group to broadening knowledge on
financial subjects is designed to represent not only a concrete response to the growing demand
for financial education in society, but also a new tool for developing customer relationships
that are increasingly more open and positive on the Group’s markets.
The Private-Corporate Banking Market 10
UBI Banca carried out an in-depth analysis in 2012 of the needs of private and corporate
banking customers, which led to the definition of a new organisational model and a new
commercial range (Value Proposition) differentiated for each customer segment (cluster).
In consideration of the strategic focus on the development of stable funding, on a range of high
value added products and on the need to increase the customer base, the integration of private
and corporate banking markets was assessed positively. It is closely bound together by an
organisational “fabric”, a range of products and services and an expert professional team able
to satisfy the needs of the most evolved customers, both individuals and businesses, in a
complete, synergetic and innovative manner.
The private and corporate banking markets were therefore the protagonists of the birth of a
new customer service model in November 2012 entitled UBI Banca Private & Corporate Unity.
The new model involved the identification of three distinct customer segments served by 50
operating units (Private & Corporate Unity) and 81 “corners”:
- Private Individuals not Entrepreneurs and not Linked to Companies: 36,500 customers
with financial wealth of €20 billion, served by 200 Private Bankers or Private Banking Coordinators;
- Private Individuals Entrepreneurs or Linked to Companies: approximately 22,500
customers with financial wealth of €15 billion, served by 100 Wealth Bankers;
- Corporates: approximately 32,000 customers with capital of €35 billion, served by
approximately 600 Corporate Bankers and Assistants supported for “foreign commercial”
activities by 212 specialists operating in 37 Foreign Centres, in addition to the
Centrobanca, UBI Factor and UBI Leasing specialist centres.
Given the specific nature of each cluster, the range of advisory products and services was
standardised in parallel and currently comprises the following services:
1. the Pro-Active Wealth Advisory Service: a customised financial advisory service which performs
thorough assessments of the characteristics and needs of family groups, analysing estates and
proposing the best investment solutions available on the market. It is designed for:
a) private individuals of high financial standing;
b) businessmen and professionals linked to businesses who are offered integrated financial advice
(business and personal);
2. Corporate Advisory, designed for businessmen or companies;
a) Corporate Advisory: carries out outlook analyses on financial statements, sector performance and
benchmarking. At the same time it highlights risk factors to be included in analyses of a
businessman’s personal investments. This activity also allows proposals to be made to optimise
the balance in financial management between the personal wealth of the businessman and the
funding costs of the company;
b) the “Family Business Advisory Service: this is designed to meet specific customer requirements for
generation turnover, capital protection, family and corporate governance and estate control
3. Pro-Active Wealth Advisory Institutional: this is a customised financial advisory service which
performs thorough assessments of the characteristics and needs of institutional customers (Church
institutions, Charities and Onlus nonprofit organisations, Banking Foundations, Building Funds,
Trade Association Funds, Guarantee Body Consortia, Bank Treasuries), by analysing their capital and
making investment proposals consistent with their institutional objectives and with the presence of
10 The “Private-Corporate Banking Market” comprises customers with financial wealth (direct and indirect funding) of greater than
€500,000 and firms with turnover of greater than €15 million. More specifically, customers with financial wealth of greater than
€2 million are defined as “high net worth” and firms with turnover of over €250 million are defined as “large corporate”.
The following action was taken with regard to commercial activity in the first ten months of
2012 – before the definition of the new model – on the individual private and corporate
The process continued with regard to services for “private banking” customers to develop a
planning and financial consulting platform which is used, on the basis of customer data
analyses acquired from answers to the MiFID questionnaire, to formulate financial solutions
which match customers’ requirements.
The following activities were performed with regard to products in 2012:
the “UBI Pramerica asset management” range of products was broadened:
- the launch of the new “GP Top Selection” which, in the context of open customer portfolio
managements, allows customised lines of investments to be created on the basis of the
expectations and the risk profile of each subscriber;
- expansion of the range of Sicav classes dedicated to the private banking market;
the range of banc assurance products was revised by:
- the launch of two new external fund unit policies, that can be selected from 21 different and
prestigious asset management companies to ensure the maximum ability to diversify in terms of
As concerns corporate customers on the other hand, in consideration of the negative
macroeconomic scenario, a commercial policy differentiated by customer segment, already
launched in 2011 was continued. Its objective was to maintain the Group’s traditional “local
community banking” vocation and to develop the large corporate segment selectively, with the
continuation of repositioning action designed to maximise asset returns. This objective was
pursued in a context of rigorous monitoring of the portfolio, which resulted in de-risking
actions (withdrawal from high risk sectors and positions), while ensuring support at the same
time to the core segment. Given the risk of the economic context, a particular focus was placed
on the management of pricing in relation to the actual credit ratings for single positions.
As concerns the foreign commerce sector, the Group maintained its market position within an
economic environment of general crisis which had a negative impact on international trade in
2012. This activity gave rise to stable results, where a moderately positive rise in the exports
curve was accompanied by a sharp fall in imports (especially net of energy items).
The results for export business were unchanged compared with the year before and with the
performance of Italian exports which was positive, although in a negative economic situation,
which confirmed that Italian companies that are more open to international markets were
better able to manage the crisis experienced by the country.
The Group’s import business performed negatively in line with the fall in the country’s
imports, due to the collapse of domestic sales and the consequent failure to turn over stocks.
Even in this context, the Group never relaxed its focus on the quantity and quality of business
volumes intermediated on behalf of corporate clients.
The harmonisation of the single European payments market (SEPA), introduced by further
PSD regulatory developments during the year, did in fact lead to a remarkable rationalisation
of operations with positive repercussions in favour of customers in terms of charges.
On the other hand, the Group is focused on and committed to providing greater assistance to
Italian customers on markets outside Europe. Its presence in BRIC countries for example with
representative offices in each of them is providing confirmation of an increasingly more
effective response to company needs and is an optimum method of making a positive impact
on the standard of service and advice provided. The focus on business with emerging
economies (Turkey, India, China, Brazil, Russia, Middle East) is therefore continuing in order
to identify – with the assistance of commercial agreements and partnerships with major
international operators – business areas with high value added connected with the world of
The Group is also continuing to pursue policies set in recent years, by investing in:
a) initiatives designed to strengthen its image and that of its individual local banks. UBI International
Open Day, a genuine international trade fair open to businesses, has now become a regular event.
After the success of the initiatives organised in 2010 at the Kilometro Rosso in Bergamo and in 2011
at the Brescia Trade Fair, the initiative was held in Milan this year (as part of the “Security 2012”
trade fair) and in Bari (organised by UBI Banca and Banca Carime to reach businesses in southern
Italy). The large numbers attending the events confirmed the validity of the format, which involves the
participation of professional firms operating directly on emerging markets as exhibitors;
b) constant monitoring of the quality of the service provided by the dedicated distribution network,
combined with the search for new technical and organisational solutions to render processes
increasingly more efficient. The efforts made were rewarded by customer satisfaction surveys which
recorded a flattering opinion from the corporate clients interviewed;
c) an increase in the professionalism of personnel, achieved as a result of a continuing commitment to
the commercial and technical training of the personnel involved in the delivery of foreign commercial
Initiatives in co-operation with the European Investment Bank (EIB)
Having fully disbursed the first tranche in 2011, the UBI Banca Group continued to use the second
tranche of the “EIB covered bond” loan of €250 million, subscribed on 11 th November 2011 and used to
fund businesses operating in industrial, agricultural, tourism and service sectors, in order to implement
investment projects in the Republic of Italy and the European Union. The companies funded (some in the
form of finance leases) are SMEs with personnel numbering fewer than 250 employees or businesses with
employees numbering between 250 and 2,999 (mid caps).
Approximately 200 loans or leases had been disbursed for a total of €190 million as at 31 st December
As concerns new initiatives on the other hand, UBI Banca and Centrobanca signed agreements on 15 th
October 2012 with the EIB for four loan pools for a total of €130 million as follows:
− 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
− 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” 11 ;
− 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.
The disbursements and authorisations of funds drawn from those pools – which can only be used
through Centrobanca, but which are available to all Group customers – started to run from January
In addition to those credit lines, a further debt was subscribed on 28 th November 2012 (a “Global Loan”)
for €250 million, directly available to all Group banks. The purpose of this loan pool is to finance the
medium to long-term working capital requirements and investments of SMEs, MidCaps and private
sector businesses with more than 3,000 employees. Disbursement of loans drawn from that loan pool
runs from March 2013.
Finally, in view of the positive collaboration that has been established, the Group is currently preparing
new initiatives with the EIB for companies, and these should be operational in the second half of 2013.
11 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. 22 of 30 th
Following on from previous years “customer care” consultation activities continued, with the
level of satisfaction surveyed for approximately 130,000 customers of the network banks
(private individuals and corporate customers) and analyses of the competition conducted,
involving over 12,000 customers of competitors.
The research measured satisfaction on basic issues regarding bank-customer relationships:
relationship with the branch, products and services, image and corporate social responsibility
(CSR). The UBINDEX, an index which measures the quality perceived by customers in relation
to each operational unit found the following for 2012: a stable score of 56 compared to the
previous year for the retail market; a fall of four points to 50 for the corporate orate market, which is
nevertheless consistent with the difficult economic context; and an increase to a score of 56 for
private banking customers.
In addition to the usual subject areas surveyed, the Group decided to focus in-depth on issues
regarding the following: affluent customers, in consideration of the launch of UBI Gold; mini-
branches, after the organisational changes; and on lost customers, in order to improve
management of account closure processes.
Surveys were also carried out on “Treasuries” and public authorities and also on customers
who operate abroad:
• with regard to treasury services delivered to public authorities, 806 customers were
interviewed, representing municipalities, health institutes and hospitals, schools and
consortia, which recorded very high satisfaction scores on the service as a whole (UBINDEX
score of 74, higher than for the previous survey in 2010). The strengths declared were
expertise and efficiency, to the extent that the authorities would choose UBI Banca again.
Authority customers appreciate dealing with the same person in daily contacts with the
treasury office and short response times, but above all a service which meets their needs.
Excellent judgements were made on all services provided and in particular on the security
of the service and on compliance with the conditions set in the tender documents. These
customers said they received satisfactory answers to requests for regulatory and
operational information and when problems were raised or complaints made, these were
resolved in most cases;
• the 500 corporate clients interviewed who operate abroad making use of UBI Banca services
and products were generally ly more satisfied than ordinary customers (UBINDEX 58), with a
satisfaction score that increased with the number of services used (the most satisfied
customers where those who use advisory services). Those who use local “Foreign Centre”
services recorded the highest satisfaction scores (UBINDEX 69) and they particularly
appreciated the ease of contact, the speed with which transactions were performed and the
One initiative deployed in the retail market was measurement of satisfaction for small
business customers in the retail market after a “check-up” with the branch manager: the
extremely positive result of the survey confirmed the knowledge that frequent contact is a
primary condition for the high quality of customer relationships and user satisfaction. The
score recorded after the meeting was in fact eleven points higher than the total for small
The diffusion of a “quality” culture and of customer satisfaction is of fundamental importance,
amongst other things, in training. Consequently a remote training course was organised in
2012 on customer satisfaction which reached staff throughout the Group. The course was
taken by over 11,000 employees.
Education on quality is also provided with sections on the subject inserted in standard
training programmes, such as that for future branch managers, or within specific programmes
designed to enhance human resources.
Consultation activity also involved internal customer satisfaction (CSI) surveys, which involved
“internal customers” (i.e. the distribution network staff in contact with the final customers of
bank) and the suppliers of services to the distribution network (i.e. units at the Parent, UBI
Sistemi e Servizi and the product companies).
The purpose of the CSI surveys is to understand the level of satisfaction experienced with the
various services available to the distribution network, which could determine the level of
customer satisfaction experienced by the final customer.
An initial survey was carried out in 2011 to measure satisfaction with services provided to the
distribution network, such as the Contact Centre, the Help Desk, Training, QuiUBI Business
and Companies and also UBI Pramerica. Following a series of actions taken on the basis of
the results, the same subjects were proposed again at the end of 2012 to measure the
effectiveness of the action taken. Improvements were found on all services in terms of
simplicity and speed, with particularly positive judgements given for UBI Pramerica and the
Help Desk on most aspects surveyed.
An additional survey was commenced during the year to measure distribution network
satisfaction with 16 software applications in daily use (these included management of
customer details, applications to support the grant of loans and credit monitoring, product
sales and credit transfers). Each survey was carried out on over 11,000 staff to whom a total of
75 thousand questionnaires were distributed (they were sent via mail using the Computer
Assisted Web Interviewing – CAWI – method). These initiatives were received positively and the
percentage of staff who completed the interview was close to 60%. Over 46 thousand
completed questionnaires were analysed.
Complaint management in the network banks
The management of claims and complaints constitutes a fundamental tool for the UBI Banca
Group, in support of customer satisfaction management. Reports made by customers allow the
efficiency of processes to be investigated and constitute a tool for verifying the quality of
services provided and a guide to consequent corrective action where necessary. Careful and
prompt complaints management is also used as a tool to reduce potential “reputational risk”
connected with manifestations of dissatisfaction, when it is badly managed.
The process is strongly rooted locally: the network banks respond to complaints made by
customers through their own operating units. Centralised specialist units on the other hand
are involved in technical investigations of complaints and carry out administrative formalities.
This is all carried out in full compliance with the time limits set for processing complaints by
legislation and regulations and the aim is to work well within those time limits where possible.
Moreover, the entire process is co-ordinated by a unit specifically assigned at the Parent which
works in customer care.
Distribution of complaints received by the network
banks in 2012 by channel of reipt
In 2012 a total of 4,551 complaints were
received by the Group’s network banks,
down by 1.5% over the previous year..
The total percentage of solutions in
favour of customers was 35% (slightly
down compared to 39% in 2011). No
backlogs existed at the end of the year
in the processing of complaints.
The profiles of customers complaining
again consisted – by over 93% – of
customers with active accounts with the
network banks. The frequency of
customer complaints is a little over
eleven complaints for every 10,000 customer relationships.
The policy pursued for years now by the Group (to make conditions easy for customers to
make complaints) is translating into an increasingly greater use of remote communications
tools: emails and official complaint forms on the network bank websites, which total 37% of
An analysis of complaints by product or service confirm the composition that has been
established in the past with a prevalence for current accounts and savings deposits (39% of
the total), a reduction in the percentage for securities and investment services (10%) and an
increase in complaints over mortgages and loans (19%).
As concerns reasons, yet again for the year just ended, the main reason was the execution of
transactions (31% compared to
32% in 2011), followed by items
relating to the management of
terms and conditions, which as a
whole accounted for 27% of
Verbale / telefonico
Current accounts and savings
Securities and investment services
Complaints by product/service
0% 10% 20% 30% 40% 50%
In addition to initial complaints
and the relative repeat
complaints, the picture for
complaint management in 2012 is
completed by mediation
procedures initiated by customers
in accordance with Legislative
Decree No. 28/2010 and by
appeals to alternative mediation
bodies: 642 applications for
mediation were made for the
network banks. A total of 71
mediation processes were
concluded with a settlement
during the year.
A hundred and one cases were
presented to the Financial
Banking Arbitrator with 92 cases
concluded, 32 of which in favour
of customers. The Banking
Ombudsman who specialises in
complaints concerning investment
instruments dealt with six
applications, two of which settled
in favour of customers.
A total of 127 complaints were
Loans and mortgages
Collection and payment services
Credit and debit cards
Execution of transactions
Application of conditions
Frauds and losses
Communication and information to
Compounding of interest
Creditworthiness or similar
Reports to the centrale rischi (central
Complaints by underlying grounds
0% 10% 20% 30% 40%
filed with the supervisory authorities (122 with the Bank of Italy and five with the Consob –
Italian securities market authority).
Distribution of complaints received in 2012
by operating unit
An analysis of statistics for complaints show that
21% of local operating units received no complaints
and 23% received one complaint only in 2012 12 .
Operating units with more than 2 complaints per year
Operating units with 2 complaints per year
Operating units with 1 complaint per year
Operating units with no complaints
Again with regard to complaints, we report that the
merger of B@nca 24-7 into UBI Banca resulted in
769 complaints being recorded in the Complaints
Register of the Parent along with the related ADR 13
files (28 mediations, 59 applications to the Financial
The complaints related to credit card business,
where UBI Banca has become the direct issuer, and
to retail loans, already in the portfolio of the merged
The cases entered in the register relate both to
matters which migrated from this consumer bank
and to complaints managed directly after the merger took effect (23 rd July 2012).
12 The data is not comparable with 2011 because of the massive restructuring performed on the branch network during the year.
13 ADR is an acronym for alternative dispute resolution and therefore relates to bodies responsible for providing this service, such as
the Financial Banking Arbitrator and the Banking Ombudsman.
The distribution network and
The branch network of the Group
As at 31 st December 2012 the UBI Banca Group had 1,735 branches (which numbered 1,740
at the date of this report) as compared to the 1,884 at the end of 2011.
The branch network of the UBI Banca Group in Italy and abroad
number of branches
31.12.2012 31.12.2011 Change
UBI Banca Scpa 3 2 1
Banca Popolare di Bergamo Spa 353 358 -5
Banco di Brescia Spa 322 364 -42
Banca Popolare Commercio e Industria Spa (1) 219 235 -16
Banca Regionale Europea Spa (2) (3) 259 229 30
Banca Popolare di Ancona Spa 220 238 -18
Banca Carime Spa 255 294 -39
Banca di Valle Camonica Spa 66 66 -
Banco di San Giorgio Spa (3) - 57 -57
UBI Banca Private Investment Spa 25 26 -1
Centrobanca Spa 6 6 -
IW Bank Spa 2 2 -
B@nca 24-7 Spa - 1 -1
UBI Banca International Sa - Lussemburgo 3 3 -
Banque de Dépôts et de Gestion Sa - Svizzera 2 3 -1
TOTAL 1,735 1,884 -149
Total Branches in Italy 1,727 1,875 -148
Financial advisors 672 713 -41
ATMs 2,337 2,451 -114
POS TERMINALS 60,049 61,224 -1,175
(1) The figures do not include nine units dedicated exclusively to pawn credit operating under the Banca Popolare
Commercio e Industria brand.
(2) The figures include three foreign branches.
(3) The change takes into account the effect of the merger of Banco di San Giorgio into Banca Regionale Europea
which became effective on 22 nd October 2012.
As already reported in the previous section “Significant events that occurred during the year”,
the changes that occurred compared to the end of 2011 mainly reflect two important actions
taken to rationalise the branch network which took place over the twelve month period.
- The first step implemented and effective from 27 th February 2012 involved the closure of 32 branches
and 46 mini-branches, as well as the transformation of 40 branches into mini-branches and one minibranch
into a branch.
- A second step effective from 10 th December 2012 involved the closure of 34 branches and 33 minibranches
as well as the transformation of 80 branches into mini-branches.
A summary is given below of the changes that occurred from the beginning of the year until
the date of this report which affected Italian branches :
• UBI BANCA, following the merger into it of B@nca 24-7, it opened a branch in Via Stoppani in
Bergamo in July to support operations to manage the outstanding loans, while at the same
time it closed the existing branch of the merged bank;
• BANCA POPOLARE DI BERGAMO closed a branch in Como in Via dei Mille in February 2012,
while in March 2012 it opened a new branch for business in Rome in Via dello Statuto. In
July and September it closed mini-branches operating in Milan at the Centrobanca and in
Luino (Varese) in Via Vittorio Veneto, while the Ciampino (Rome) branch became
operational in October. In December one branch opened in Lurago D'Erba whereas 5
anches were closed 1 . In January 2013, the treasury branches in Camerata Cornello, Riva
di Solto, Roncola (Bergamo), Lozza and Castelseprio (Varese) were transformed into minibranches;
• BANCO DI BRESCIA closed 22 branches in February and 20 in December 2 ;
• BANCA POPOLARE COMMERCIO E INDUSTRIA closed ten branches in February and four in
December 3 and another two mini-branches at the beginning of November in Milan,
respectively in Via Trivulzio and in Via Grassi;
• BANCA REGIONALE EUROPEA opened the mini-branch at the Santi Antonio e Biagio hospital at
Alessandria in January, while in February five mini-branches were closed down located on
Via Margarita at Cuneo, Casteldelfino and Crissolo (Cuneo), in Via Lega Lombarda at
Valenza (Alessandria) and Ghiffa (Verbania). In December 18 other closures took place 4 ;
• BANCA POPOLARE DI ANCONA opened a new branch in March at San Salvo (Chieti) and closed
13 units in February and six in December 5 ;
• BANCA CARIME opened a mini-branch at the University of Bari in May, while it closed 24
branches in February and 16 in December 6 ;
• BANCO DI SAN GIORGIO, before its merger into the Banca Regionale Europea, had closed two
mini-branches in La Spezia in Corso Nazionale and in Sarzana (La Spezia) in Via Pietro Gori
and branches in Albenga (Savona) in Via Cesare Battisti, Vado Ligure (Savona) and
Ventimiglia (Imperia) in Via Roma in October;
• UBI BANCA PRIVATE INVESTMENT lastly closed a branch in Florence in Via Ricasoli, in February.
A full list of all Group branches in Italy and abroad is given in the final pages of this publication.
As at 31 st December 2012, the Italian distribution network of the Group was completed by
units dedicated specifically to private banking customers (private banking units and the
associated “corners”) and to corporate customers (corporate banking units and the associated
As can be seen from the table, at the end of the year, 104 private banking facilities were
operational, a decrease of three units, together with 98 corporate banking facilities,
unchanged on aggregate 7 .
1 Varese at 106 Viale Borri; Monza in Via Pesa del Lino; Gallarate (Varese) in Via Torino; Tradate (Varese) in Corso Bernacchi and
Besozzo (Varese) at 24 Via XXV Aprile.
2 In February: Barghe; Chiari in Via Maffoni; Gussago in Via Richiedei; Leno in Via Garibaldi; Lumezzane in Via Montini in the San
Sebastiano district and in Via Bixio in the Pieve district; Manerbio in Via Cremona; Ospitaletto in Via Rizzi; Salò (Brescia) in Piazza
Vittoria; Soncino (Cremona) in Largo Manzella; Lodi in Via Fissiraga; Codogno (Lodi) in Via Roma; Mantua in Via Bertani; Quistello
(Mantua) in Via Europe in the Nuvolato district; Cologno Monzese (Milan) in Via Cavallotti; Paderno Dugnano (Milan) in Via Tripoli;
Arta Terme (Udine); Viterbo in Via Cattaneo and in Via San Lorenzo; Venezia; Verona in Piazza Simoni and Storo (Trento) in the
In December: Brescia in Via San Rocchino, in Via Volturno and in Via Orzinuovi; Bedizzole in Via Sonvigo, Capriano del Colle in the
Fenili Belasi and Milzano district (Brescia); Bergamo in Via Borgo Palazzo; Milano in Via Staro, in Via Marche and in Via Muratori;
Cremona in Piazza Risorgimento; Rubano (Padova) in the Sarmeola district; Verona in Via Salgari; Castel d’Azzano and San Giovanni
Lupatoto (Verona); Altavilla Vicentina (Vicenza); Pieve di Soligo and Resana (Treviso); Magnano in Riviera (Udine) and Vasanello
3 In February: Milan in Via Pirelli, in Piazza Siena and in Via Saffi; Gorgonzola (Milano); Brallo di Pregola (Pavia); Voghera (Pavia) in
Via Sant’Ambrogio; Imola and San Giovanni Persiceto (Bologna); Formigine (Modena) and Colorno (Parma).
In December: Milan in Via Astesani; Vimodrone (Milano); Pavia in Piazza Duomo and Cassolnovo (Pavia).
4 Torino in Corso Trapani; Chianocco (Torino); Cuneo in Piazza Europa; Alba (Cuneo) in Piazza Savona; Alessandria in Piazza Marconi;
Casale Monferrato (Alessandria); Tortona (Alessandria) in Via Sacro Cuore, in Corso Don Orione and in the Rivalta Scrivia district;
Novara in Via Canobio; Borgomanero in Piazza Martiri della Libertà and Gozzano (Novara); Asti in Piazza 1° Maggio; Biella in Via XX
Settembre; Cossato (Biella) in Via Pajetta; Genova in Via Merano; Rapallo (Genoa) in Via Diaz and La Spezia in Corso Cavour.
5 In February: Belvedere Ostrense and Ostra Pianello (Ancona); Appignano (Macerata); Piobbico (Pesaro Urbino); Riardo (Caserta);
Naples in Piazza del Gesù Nuovo; Terzigno (Naples); Rimini in Via Caduti di Marzabotto and Pennabilli (Rimini); Guidonia Montecelio
(Rome) in Piazza Buozzi; Perugia in Via dei Filosofi; Collazzone and Fossato di Vico (Perugia).
In December; Fossombrone (Pesaro Urbino) in the Isola di Fano district; Treia (Macerata) in the Passo Treia district; Falerone (Fermo)
in Piazza della Concordia; Gualdo Cattaneo (Perugia); Pescara in Via Latina and Limatola (Benevento).
6 In February: Carolei, Francavilla Marittima, Grimaldi, Rocca Imperiale Marina (Cosenza); Squillace (Catanzaro); Cutro (Crotone);
Bovalino, Delianuova, Gioiosa Ionica, Molochio (Reggio Calabria); Briatico (Vibo Valentia); Matera in Via Dante Alighieri; Maratea
(Potenza); Atena Lucana and Sapri (Salerno); Bari in Corso Italia and in Via M. Cristina di Savoia; Fasano (Brindisi) in the Pezze di
Greco and Montalbano districts; San Pietro Vernotico (Brindisi); San Severo (Foggia) in Corso Garibaldi; Gallipoli and Ruffano
(Lecce); and Taranto in Via Battisti.
In December: Rende (Cosenza) in Piazza degli Eroi; Guardavalle and Nocera Terinese (Catanzaro); Crotone in Via Cutro; Stilo (Reggio
Calabria); Bernalda in the Metaponto and Pisticci (Matera) and Marconia districts; Avigliano (Potenza); Buccino, Buonabitacolo,
Corbara and Sarno (Salerno); Bari in Via Dalmazia; Monopoli (Bari) in Via Fra’ Ippolito; Brindisi in Via Commenda and Copertino
Following the integration of the private
banking and corporate markets,
mention of which is made in the
previous section “Significant events
that occurred during the year”, in
January 2013 the new UBI Banca
Private & Corporate Unity facility was
established to unify and rationalise the
already existing private and corporate
facilities. The new unit will include 131
centres (50 PCUs and 81 corners)
The distribution network of the Group
was also supported by a network of
672 financial advisors reporting to UBI
Banca Private Investment, consisting
of 392 operating in the Central and
Northern Division and 280 in the
Central and Southern Division.
The decrease compared to the 713
advisors operating at the end of 2011
continues to reflect the dynamics of
appointments and departures designed
to progressively increase the size or
average profitability per capita of the
customer portfolios under
management 8 .
Private and corporate banking units as at 31st December 2012
31.12.2012 31.12.2011 Change
Private Banking Units 104 107 -3
Private Banking Units (PBUs) 55 58 -3
Banca Popolare di Bergamo 14 14 -
Banco di Brescia 7 7 -
Banca Popolare Commercio e Industria 8 8 -
Banca Regionale Europea 7 6 1
Banca Carime 5 5 -
Banca Popolare di Ancona 7 7 -
Banca di Valle Camonica 1 2 -1
Banco di San Giorgio - 3 -3
UBI Banca Private Investment 6 6 -
Private banking "corners" 49 49 -
Banca Popolare di Bergamo 21 21 -
Banco di Brescia 6 6 -
Banca Popolare Commercio e Industria 4 5 -1
Banca Regionale Europea 2 1 1
Banca Carime 7 7 -
Banca Popolare di Ancona 9 9 -
Corporate Banking Units 98 98 -
Corporate Banking Units (CBUs) 63 64 -1
Banca Popolare di Bergamo 19 19 -
Banco di Brescia 10 11 -1
Banca Popolare Commercio e Industria 9 9 -
Banca Regionale Europea 11 8 3
Banca Carime 5 5 -
Banca Popolare di Ancona 7 7 -
Banca di Valle Camonica 2 2 -
Banco di San Giorgio - 3 -3
Corporate banking "corners" 35 34 1
Banca Popolare di Bergamo 2 2 -
Banco di Brescia 11 11 -
Banca Popolare Commercio e Industria 5 5 -
Banca Regionale Europea 3 2 1
Banca Carime 3 3 -
Banca Popolare di Ancona 9 9 -
Banca di Valle Camonica 2 2 -
In a highly concentrated sector (the four largest companies occupy approximately 65% of the market), the
data for December published by Assoreti (national association of stock brokerage companies) place UBI
Banca Private Investment in tenth place in terms of total assets (ninth in terms of banking groups), with a
substantially stable market share of 2.20%.
The international presence
At the date of this report the international presence of the UBI Banca Group was structured as
• two foreign banks: Banque de Dépôts et de Gestion Sa (with two 9 branches in Switzerland
at Lausanne and Lugano) and UBI Banca International Sa (with headquarters in
Luxembourg and branches in Munich and Madrid);
• three foreign branches of Banca Regionale Europea in France (at Nice, Menton and
• representative offices in Sao Paolo in Brazil, Mumbai, Shanghai, Hong Kong and Moscow;
• investments (prevalently controlling interests) in four foreign companies: UBI Trustee Sa
and UBI Management Co. Sa, UBI Capital Singapore Pte Ltd 10 , Lombarda China Fund
Management Company 11 ;
7 The following changes occurred during 2012:
- with regard to private banking facilities, in July Banca Popolare Commercio e Industria closed a private corner at Roma Parioli,
while Banca di Valle Camonica closed a PBU at Franciacorta. In October, when Banco di San Giorgio was merged into Banca
Regionale Europea, the PBU at Ponente ceased operations, while the PBU at Levante was transformed into a corner;
- as concerns corporate centres, in January, Banco di Brescia transformed its two CBUs at Iseo (Brescia) and Bergamo into corners
at the same time as it opened a new CBU at Brescia. The Banca also closed two corners at Milan Lambrate and Montebelluna in
October and December. Banca Regionale Europea did, however, open a new CBU at Turin whereas, in July ,it transformed a CBU
in Milan into a corner. In October the Banca lastly amalgamated the three CBUs into the Banco di San Giorgio.
8 The average size of financial advisors’ portfolios increased from approximately €6.2 million to €6.6 million of assets administered
over twelve months.
9 BDG closed its Geneva branch in June 2012.
• a Branch of UBI Factor Spa in Krakow in Poland;
• 37 commercial co-operation agreements with foreign banks (covering more than 50
countries), 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 with Standard Chartered Bank to
ensure corporate customers receive effective assistance on all the principal markets in
Again in 2012, 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 events 12 .
The current progressively deteriorating economic environment has advised optimisation of
geographical market coverage by rationalising the branch network and pursuing a more
prudent policy for opening new units. In this context, the continuous growth and technological
improvement in direct distribution channels is therefore increasingly becoming a strategic tool
for the acquisition of new customers and for the management of relationships with the current
customer base, which also ensures savings on operating costs at the same time.
Therefore, in parallel with targeted closures of conventional bricks and mortar facilities, the
Group is extending multichannel bank services provided through a single platform that
combines all the direct channels available to the private individual and corporate customers of
the network banks: internet and mobile banking, customer services, self service branches
such as ATMs and kiosks, cards and evolved payment systems and POS terminals.
In addition to the attractiveness of the economic conditions compared to standard conditions
available at branches, the integrated multi-channel service provides increasingly broader
guarantees in terms of security, accessibility 24 hours a day, seven days a week and the
ability to customise to suit the characteristics of the users.
Channels available to customers include:
• the QUI UBI internet banking service for information on banking positions (current
accounts, securities deposits, payment cards, mortgages, insurance policies, etc.) and to
10 An operation to transfer control of this company from its previous parent company, Banque de Dépôts et de Gestion Sa, to UBI
Banca International Sa was completed on 30 th May 2012. Following this, the company changed its name from BDG Singapore
Private Ltd to UBI Capital Singapore Pte Ltd, its present name.
11 The company will change its name to Zhong Ou Fund Management Co.
12 The very many initiatives included the following:
- sponsorship by the representative office in Mumbai of the 8 th annual Indian Trade & Export Finance Conference held in
- the contribution made by UBI Banca to the organisation of the twelfth International Conference of Russian Bankers and
Businessman, held in Rome on 23 rd and 24 th February. Staff members of the UBI Banca addressed issues regarding the economic
situation in the euro zone and relations between Italy and Russia, with a focus on the corporate market;
- collaboration by the representative office in Moscow in the organisation in March of the business mission in Russia, dedicated to
the food and agriculture sector, designed to organise meetings between companies from Brescia and Russia;
- participation on 19 th March as the exclusive banking sponsor in the 9 th edition of the China Trader Award, an important and
prestigious prize for Italian companies that have excelled in the development of business relations with Hong Kong and China;
- the presence of the Group's representative in Moscow as speaker at the convention, “Doing Business in Russia: what
opportunities for Italian companies with the entry of Russia into the WTO?" held in Milan on 28 th March 2012. The speech
focused on the local financial system, on the presence of the Italian banking system, on the methods of financing and on the
means of payment and risk hedging instruments;
- participation in May by the representative office in San Paolo in the multi-sector, joint Government-Regions-Chambers of
Commerce mission in Brazil, organised by the Ministry of Economic Development in co-operation with the Agency for the
Promotion Abroad and the Internationalisation of Italian businesses (ICE);
- the participation of the Group as main sponsor of INDIA DAY, an event organised by the MIP-Polytechnic of Milan held on 27 th
September to describe the country's economic situation, the main legal and financial problems and the services for Italian
- the third edition of the ”International Open Day” initiative designed to promote the internationalisation of Italian businesses. The
event was held at the Milan Trade Fair in Rho from 7 th to 9 th November and in Bari on 12 th November.
perform numerous payment and investment transactions autonomously, with maximum
security, speed and savings. The “Affari” (business) version for small business customers
provides access to specific additional functions for single bank management of a company,
which include the payment of single or multiple bills of exchange and the management of
commercial portfolios. The “Imprese” (Companies) version, which operates using the
services of the corporate banking interbank (CBI) platform, allows corporate clients to
consult their accounts remotely and to make payments with many advantages. These
include considerable savings in time, the optimisation of cash flows, improved organisation
of administrative activities, the automation of record making processes and the verification
and reconciliation of bank transactions. The authorised users may also see and operate on
the accounts of all the companies belonging to its particular group of companies;
• Customer Services, contactable on a toll free number even outside normal branch opening
times, available to customers less likely to use the internet or who do not have a
connection; 13 ;
• the Mobile Banking service for customers who wish to use the main internet banking
functions directly from their tablets, Blackberrys and smartphones, in the latter case
including the optimised version of the website (www.quiubi.it/m);
• a network consisting of over 2,300 self service facilities (ATMs and kiosks), which are
decreasing in number due to the rationalisation of the branches over the course of the year,
including over 300 able to deposit payments in cash and cheques using a “Bancomat” debit
card or the free-of-charge VersaQuick card (evolved ATMs) 14 .
At the end of the year the number of QUI UBI service customers grew by 15% to 1.07 million
(there were 928 thousand in 2011). This performance was driven by encouraging trends for
internet banking (up by 19.7% to 927 thousand users compared to 775 thousand at the end of
2011) including QUI UBI Business, for which users were over 112 thousand in December, up
from over 90 thousand twelve months earlier (+24.3%).
As concerns mobile banking, the number of monthly accesses to the site optimised for cell
phone navigation increased more than twofold to over 230 thousand (approximately 100
thousand in 2011), while approximately 100 thousand dedicated apps were downloaded.
The popularity with customers was also confirmed by the results for use over twelve months:
• +35%, to over 8.1 million, for payment and reload transactions;
• 54% of securities trades on regulated markets performed via internet;
• over a fifth of payments made using evolved ATMs;
• more than 2.8 million commercial contacts (2 million incoming and 800 thousand outgoing)
and over 37 thousand e-mails managed by customer services.
The initial results for the online sales platform launched in October 2011 are encouraging,
with 9,800 requests completed online and approximately 2,500 products sold.
These results were also assisted by continuous improvements made as follows:
• the trends on the platform for online sales of the Enjoy card and of QUI UBI from the
ubibanca.com commercial website and the quiubi.it site;
• the launch of numerous commercial initiatives to support the online sales of the prepaid
Enjoy card: including "Enjoy Your Summer", "Enjoy Your Card", “Enjoy & Fly” and “Enjoy &
Win”, the latter by using the Facebook social network to involve the greatest number of
• the expansion of the platform for small business and private customers with new
consultation functions (overall viewing of the commercial portfolio and “RiBa” automatic
electronic payment due date notification), payment functions (refusal to pay Ri.Ba.s) and
functions dedicated to increasing the security level of payment cards (e-mail alerts on
13 Customer relationship and consultation activity was further expanded in the first half of 2012 with the opening of a new centre at
Varese, in addition to those already in operation at Brescia and Milan.
14 A new experimental software application “Qui Multibanca plus” will be piloted in 2013. It will enable new consultation and payment
services to be developed on the Group’s Bancomat debit card ATMs and will also allow marketing messages to be sent, matched to
• the release of a virtual assistant (avatar) available in the area reserved for QUI UBI and QUI
UBI affari business internet banking, used for marketing initiatives to customers;
• the launch of the "Come over to QUI UBI and win!" competition to encourage QUI UBI Light
information service users to go over to the QUI UBI profile;
• the completion and development of free apps for all the main instruments on the market
(smartphones, tablets and BlackBerrys);
• the improvement in the graphics and the extension of the functions available on the mobile
• the development of the "My accounts" service with the availability of new documents on safe
deposit boxes 15 .
New initiatives are also planned for 2013, designed to generally improve the services on offer.
These include the following: the development of the online sales platform with an increased
range of products that can be purchased (such as the QUBI’ modular account and non-life
banc assurance products); the development of an innovative demo of the multichannel bank
designed to help customers become familiar with the various channels available for banking
services; the development of a virtual assistant and the ability to provide reply to customers’
questions via an innovative semantic engine and the launch of a new site dedicated to UBI
Banca Private & Corporate Unity.
Cards and payment systems
Despite the continuing difficult economic market conditions, the UBI Banca Group continues
to be very active in the payment card business, on the one hand by seeking the most up-todate
technological solutions and, on the other, by conducting an effective campaign to support
the products offered.
The total number of Libra credit cards issued by UBI Banca and CartaSi amounted to
approximately 723 thousand. This decrease of 3.9% compared to the more than 752 thousand
units of the previous twelve months also marks the effect of the migration towards cards with
microchips which occurred in 2011, leading to a contraction in the numbers of inactive cards.
The negative performance of the economy was reflected in the 3.8% fall in the use of cards.
The range currently offered by the UBI Group is differentiated by type of user:
• private individual customers can choose between charge cards and revolving or flexible
cards (with repayment either of the balance or in instalments) of different varieties
according to the market (retail or private banking);
• companies, on the other hand, are offered business and corporate cards which vary
according to the credit limit and the services.
The merger by incorporation of B@nca 24-7 into UBI Banca on 23 rd July brought about the
internalisation in the Parent of the management of the existing cards and activities to issue
new Libra and Kalìa cards. This guaranteed continuity of the service offered to customers
which even improved in the areas reserved for the www.cartalibra.it and www.cartakalia.it
sites, which became accessible through direct connection from QUI UBI banking.
THE good performance by prepaid cards continued with total exceeding cards in December
which exceeded 269 thousand, a 21% increase over twelve months, mainly due to the success
of the Enjoy card, the prepaid card associated with an IBAN number and to the connected
commercial initiatives. In detail:
• Enjoy Special Edition, the card for Group employees issued in December 2011, which
allows a donation to be made to charitable projects;
15 As at the end of December the number of customers who had agreed to forgo receipt of hardcopy correspondence reached
approximately 598 thousand (+48% compared to 404 thousand at the end of 2011), while the number of ordinary and deposit
accounts using the “My accounts” service increased by an equally significant number (+51% to 837 thousand).
• Enjoy UBI Community, the card with a customised design and special terms and conditions
reserved for employees of non-profit organisations;
• Enjoy Pension, a card with special terms and conditions designed for pensioners who do
not have current accounts. Pensions can be credited to these with no limits on the amount;
• Enjoy S.I.P., the card dedicated to members of the Italian Paediatric Association featuring
customised graphics with special terms and conditions, sold both in branches and via
The positive reception by the public of prepaid cards is also seen in the increase by over 15%
in their use.
The number of debit cards issued by the Group was around 1.43 million with an increase of
6% over December 2011. The use of card also increased (+7.5% for purchases with
PagoBancomat debit cards and +4.6% for withdrawals).
Over the year the Group continued with its commercial initiatives aimed at consolidating its
current user base and at attracting new potential customers. Some of them were founded on
the principles of integrated multichannel services, resorting in sequence to other channels for
contacting customers (texting, newsletter, banners in the QUI UBI reserved section, phone
calls from customer services) 16 .
Action was also taken to support people affected by the earthquake in Emilia Romagna, Veneto
and Lombardy which took the concrete form of deferment of repayments on the Libra cards
with instalment options and on the Libra Extra/Extra Plus cards as well as the exemption
from commissions for withdrawals at ATMs made using Libramat debit cards both in Italy and
The most significant technological innovation launched in 2012, however, was the realisation
of the pilot project "Enjoy Mobile Payments" presented to the market in January 2013. It
involves the virtualisation of a card (Enjoy) on a telephone SIM and the ability to make
payments using NFC smartphones on contactless POS terminals 17 .
As concerns payment systems, the Group also has over €60 thousand POS terminals installed
in retail outlets, slightly down on the previous year (-2%), the result of streamlining the
geographical market coverage of the network banks on the one hand and of the unfavourable
economic situation on the other. By contrast, volumes of business remained stable
(Visa/MasterCard) or increased slightly (PagoBancomat).
The necessary adjustments were completed over the twelve months to comply with legal
provisions requiring the elimination of commissions on petrol refuelling for amounts lower
During the year in particular, in accordance with Regulation No. 260/2012 (the European
regulation issued with immediate effect on 30 th March 2012, which establishes the technical
and commercial requirements for credit transfers and direct debits in euro and amends
Regulation EC 924/2009):
• the commissions on all “foreign” credit transfers in the EEA 18 have been set at the same
level as those for domestic transfers, regardless of the amount of the transaction;
• activities continued for the migration by February 2014, as required by the Regulation, of
all domestic payment instruments (direct debits and credit transfers) to the corresponding
SEPA payment instruments (Sepa Direct Debit 19 and Sepa Credit Transfer respectively).
In addition to its constant technological improvement of existing products, 2013 will see the
Parent Company also engaged in:
- the launch of a new prepaid card with microchip technology which will change part of the
typical additional functionalities of the Enjoy card but this will be offered to customers who
are minors, to non-residents and to business customers;
16 The “Experience the magic of Paris” and “A weekend for a true connoisseur” competitions and the commercial campaigns were used
to increase cross selling with the offer of Libramat and Libra Classic cards and free membership for the first year.
17 See the section “Research & Development” for further details.
18 In addition to the 27 countries of the European Union, the European Economic Area also includes Iceland, Norway and
19 In order to complete the range of services provided for businesses, marketing of the Sepa Active Direct Debit service will be
launched in the first half of 2013. The service will allow these customers to present payment collection instructions in euro to its
debtor customers within the SEPA area.
- in the progressive extension of the Contactless payment methods to other types of cards
(currently this opportunity is basically limited to the Enjoy card), and in the start-up of
replacement of the current POS terminals with equipment for Contactless technology;
The positioning of the Group
The table summarises the
market positioning of the UBI
Group in terms of branches,
conventional funding (excluding
bonds) and lending, both with
respect to the national and to
the regional and provincial
markets where the banks
operating in the Group have a
more significant presence.
The information is based on the
most recent data made available by
the Bank of Italy: 30 th September
2012 for branches and 31 st
December 2012 for the balance
sheet items, considered in relation to
Despite the action taken to
rationalise the distribution
network in February 2012,
marginal differences can be
seen in terms of market share
for branches compared to end of
More specifically, the market
share of the Group at national
level was 5.4%, with market
shares again higher than 10%
in 15 Italian provinces, together
with a substantial presence in
Milan (9%) and Rome
As concerns market share for loans,
the decrease for the Province of
Bergamo and, to a lesser degree, for
Lombardy is due mainly to
outstanding loans of the former
B@nca 24-7 contributed to the
Parent in July, affected by both an
organic reduction and by the
absence of grants of non-captive
loans, following the discontinuation
of distribution through indirect
UBI Banca Group: market share (*)
North Italy 6.3% 5.9% 6.6% 6.4% 6.3% 6.8%
Lombardy 12.8% 10.0% 9.8% 12.9% 10.7% 10.0%
Prov. of Bergamo 21.2% 30.3% 40.6% 21.0% 32.3% 43.1%
Prov. of Brescia 22.4% 36.1% 35.7% 22.8% 35.8% 35.8%
Prov. of Como 5.8% 5.4% 8.3% 6.0% 5.8% 8.0%
Prov. of Lecco 5.9% 5.7% 7.2% 5.8% 5.1% 6.7%
Prov. of Sondrio 8.1% 1.7% 3.3% 8.1% 1.7% 3.6%
Prov. of Mantua 5.1% 3.3% 3.7% 5.6% 3.6% 4.3%
Prov. of Milan 9.1% 4.8% 3.8% 9.2% 5.1% 4.0%
Prov. of Monza Brianza 8.3% 7.1% 9.8% 8.2% 8.0% 8.8%
Prov. of Pavia 15.1% 15.1% 11.4% 15.6% 16.6% 11.9%
Prov. of Varese 23.3% 28.3% 20.7% 23.0% 30.3% 21.1%
Piedmont 8.3% 5.3% 6.3% 8.3% 5.6% 6.3%
Prov. of Alessandria 12.0% 7.6% 10.4% 11.7% 8.4% 10.0%
Prov. of Cuneo 23.8% 21.3% 16.5% 24.2% 22.3% 16.9%
Prov. of Novara 4.6% 3.5% 6.6% 4.6% 3.2% 7.0%
Liguria 6.0% 5.0% 7.8% 6.0% 5.2% 8.2%
Prov. of Genoa 4.9% 4.4% 7.2% 4.8% 4.6% 7.7%
Prov. of Imperia 6.0% 3.4% 9.1% 5.8% 3.6% 9.2%
Prov. of Savona 6.6% 3.5% 9.4% 6.3% 3.5% 10.1%
Prov. of La Spezia 9.0% 11.1% 7.0% 10.1% 12.2% 7.2%
Central Italy 3.3% 2.6% 2.5% 3.5% 3.1% 2.5%
Marches 7.8% 8.8% 8.8% 8.1% 9.4% 9.0%
Prov. of Ancona 9.5% 13.3% 11.8% 10.0% 14.1% 11.8%
Prov. of Macerata 8.4% 9.7% 8.8% 8.8% 11.5% 9.7%
Prov. of Fermo 10.8% 10.5% 15.0% 10.8% 9.5% 14.0%
Prov. of Pesaro and Urbino 6.2% 3.7% 4.6% 6.9% 4.1% 4.8%
Latium 4.2% 2.5% 2.6% 4.2% 3.2% 2.6%
Prov. of Viterbo 14.0% 11.9% 11.1% 14.7% 13.4% 11.5%
Prov. of Rome 3.9% 2.4% 2.5% 3.9% 3.2% 2.5%
South Italy 7.8% 6.5% 5.3% 8.2% 6.9% 5.3%
Campania 5.6% 4.3% 4.2% 5.8% 4.4% 4.2%
Prov. of Caserta 8.7% 6.9% 7.7% 9.0% 6.9% 7.0%
Prov. of Salerno 7.5% 5.3% 5.9% 7.9% 5.7% 6.3%
Prov. of Naples 4.6% 3.8% 3.4% 4.8% 3.9% 3.3%
Calabria 20.6% 20.8% 14.3% 22.1% 21.3% 14.1%
Prov. of Catanzaro 13.6% 16.1% 9.9% 14.2% 16.0% 10.1%
Prov. of Cosenza 24.2% 27.1% 19.5% 25.7% 27.8% 19.1%
Prov. of Crotone 16.2% 11.8% 7.5% 18.9% 11.8% 7.1%
Prov. of Reggio Calabria 20.6% 16.1% 11.3% 22.4% 17.1% 11.3%
Prov. of Vibo Valentia 24.3% 28.2% 19.0% 26.3% 28.4% 18.6%
Basilicata 13.8% 11.8% 8.8% 14.3% 11.8% 8.9%
Prov. of Matera 15.0% 10.8% 7.5% 15.7% 10.5% 7.3%
Prov. of Potenza 13.3% 12.5% 9.6% 13.7% 12.7% 9.8%
Apulia 7.7% 6.7% 4.9% 8.1% 7.2% 4.8%
Prov. of Brindisi 9.9% 8.1% 5.4% 12.0% 9.5% 5.9%
Prov. of Bari 9.8% 7.9% 5.4% 10.0% 8.6% 5.4%
Prov. of Barletta Andria Trani 6.5% 5.7% 4.9% 6.4% 6.4% 5.1%
Prov. of Taranto 8.0% 7.1% 5.3% 8.4% 7.3% 5.4%
Total Italy 5.4% 5.0% 5.4% 5.6% 5.3% 5.6%
(*) The financial data is taken from Bank of Italy statistics.
(**) Current accounts, certificates of deposit, savings deposits.
As a result of the characteristics (***) Market share by location of the branch.
of the two original groups, in
some areas where the Group’s presence is stronger, it continues to have a market share of
conventional funding and/or lending that is greater than the percentage of branches.
The composition of Group staff and changes in 2012
Employees actually in service
31.12.2012 31.12.2011 Changes 31.12.2012 31.12.2011 Changes
Number A B A-B C D C-D
Banca Popolare di Bergamo Spa 3,697 3,723 -26 3,787 3,795 -8
Banco di Brescia Spa 2,555 2,584 -29 2,577 2,594 -17
Banca Carime Spa 2,143 2,183 -40 2,278 2,320 -42
Banca Regionale Europea Spa 1,899 1,932 -33 1,982 1,996 -14
Banca Popolare Commercio e Industria Spa 1,676 1,713 -37 1,859 1,896 -37
Banca Popolare di Ancona Spa 1,675 1,711 -36 1,762 1,798 -36
UBI Banca Scpa * 1,412 1,465 -53 2,328 2,359 -31
Banca di Valle Camonica Spa 346 348 -2 341 345 -4
Centrobanca Spa 300 316 -16 310 316 -6
IW Bank Spa 202 280 -78 210 296 -86
UBI Banca Private Investment Spa 163 165 -2 149 153 -4
UBI Banca International Sa 101 98 3 93 93 -
Banque de Dépôts et de Gestion Sa 62 68 -6 62 67 -5
TOTAL FOR BANKS 16,231 16,586 -355 17,738 18,028 -290
UBI Sistemi e Servizi SCpA 2,061 2,021 40 762 676 86
UBI Leasing Spa 244 255 -11 223 245 -22
Prestitalia Spa * 170 104 66 83 96 -13
UBI Factor Spa 151 153 -2 138 144 -6
UBI Pramerica SGR Spa 145 142 3 117 120 -3
UBI Fiduciaria Spa 22 24 -2 17 17 -
UBI Academy SCRL ** 16 - 16 - - -
UBI Capital Singapore Pte Ltd 10 18 -8 10 16 -6
BPB Immobiliare Srl 9 9 0 4 4 -
UBI Gestioni Fiduciarie Sim Spa 7 7 - 4 4 -
Centrobanca Sviluppo Impresa SGR Spa 6 6 - 2 2 -
Coralis Rent Srl 4 5 -1 - - -
UBI Trustee Sa 4 4 - 4 4 -
UBI Management Company Sa 3 3 - 3 3 -
S.B.I.M. Spa 1 1 - - - -
TOTAL 19,084 19,338 -254 19,105 19,359 -254
Workers on staff leasing contracts 2 31 -29 2 31 -29
TOTAL PERSONNEL 19,086 19,369 -283
Employees on the payroll
On secondment outside the Group
- out 28 30 -2
- in 7 9 -2
TOTAL WORKFORCE 19,114 19,399 -285 19,114 19,399 -285
* On 1 st July the contribution to Prestitalia of the B@nca 24-7 line of business consisting of salary backed lending operations became effective. On the
following 23 rd July Banca 24-7 was merged into UBI Banca.
** In July 2012 UBI Academy was formed, without staff transfers. Staff from the consortium company, previously working in the Training Service were
The table above gives details for each company of the actual distribution of employees (workers on permanent and temporary contracts,
and on apprenticeship contracts) within the Group as at 31 st December 2012, 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 2011 (column B) restated on a consistent basis.
Column C, on the other hand, gives details for each company of the number of employees on the payroll as at 31 st December 2012
compared with the end of 2011 also restated on a consistent basis (column D).
Compared to the figures published in the previous annual report, staff numbers as at 31 st December 2011 were adjusted as follows:
staff numbers at Banca Carime and Banca Popolare di Ancona increased by one including two reinstatements in the first quarter, due to
INPS (National Insurance) failing to recognise pension entitlements following retirement;
the UBI Banca workforce was restated to include the B@nca 24-7 and Silf mergers effective 23 rd July and 21 st December 2012. The total
figures also include a limited number of staff transfers to Prestitalia on 1 st July 2012, following the contribution of salary backed
the IW Bank workforce was restated to include the InvestNet International merger, effective 23 rd July 2012;
the Banca Regionale Europea workforce was restated to include the Banco San Giorgio merger, effective 22 nd October 2012;
UBI Insurance Broker was not included in the Group workforce due to the disposal of the company effective 31 st December 2012.
At the end of 2012, the total workforce of the UBI Banca Group numbered 19,086, compared
to 19,369 in December 2011 1 a decrease of 283.
These trends are the result of the almost complete elimination of workers on staff leasing
contracts (-29 contracts, almost all in the network banks), but is principally due to the
reduction in the workforce in terms of employees (-254), nearly half of which concentrated in
the fourth quarter.
Reductions in staff numbers reflects the efforts made to generate generalised efficiencies in all
Group companies, at the same time as the geographical and operational reorganisations that
accompanied the two large-scale branch rationalisations undertaken last year (in February
and December), in addition to the changes to units at the Parent, in the network banks and
the Service Companies.
The apparent exception of Prestitalia (+66 employees) was due to the contribution to that
company of B@nca 24-7 operations consisting of salary and pension-backed loans which
required an increase in the workforce using internal Group staff from governance and
Furthermore, the increase recorded in staff numbers at UBI Systems and Services (+40
employees), is to be seen in relation to the transfer to that Company of the IW Bank operations
consisting of IT, Back Office, Security and Logistics operations, which involved the transfer of
78 employees, effective from 1 st December.
The decline in staff numbers includes 60 staff leaving after accepting leaving incentive
proposals for employees covered by the safeguards of the "Salva Italia" (Save Italy) decree,
launched in March, and completed within the following three months.
The table gives details of changes in the
type of employee contract, with a total
decrease in employees on the pay-roll over
twelve months of 254 (228 of which on
This change is due to:
- 456 staff leaving, of which 112
voluntarily, 109 retired (100 early
on incentive schemes) and 143 for
Employees on the payroll
Number 31.12.2012 31.12.2011 Change
Total employees 19,105 19,359 -254
of which:permanent 19,010 19,238 -228
on temporary contracts 87 104 -17
apprentices (*) 8 17 -9
(*) 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.
- 202 new appointments composed of 61 permanent contracts and 141 temporary
contracts. The latter include the quota of 44 seasonal employees at BPB Immobiliare,
with the remainder being temporary staff hired to support company operations in
Apart from company
mergers, 586 employees
were involved in
As shown in the table no
significant changes in the
composition of personnel by
Composition of personnel in Group Banks by rank
Number 31.12.2012 % 31.12.2011 %
Senior managers 379 2.2% 391 2.2%
Middle managers 3rd and 4th level 3,250 18.3% 3,264 18.1%
Middle managers 1st and 2nd level 3,904 22.0% 3,886 21.5%
3rd Professional Area (office staff) 9,992 56.3% 10,256 56.9%
1st and 2nd Professional Area (other staff) 213 1.2% 231 1.3%
TOTAL FOR BANKS 17,738 100.0% 18,028 100.0%
1 The figures published in the consolidated Financial Statements as at 31 st December 2011 (19,405 employees) included 38 staff
working in UBI Insurance Broker, sold in 2012; but on the other hand, did not include the 2 employees (from the Banca Carmine
and Banca Popolare di Ancona) re-employed during the first quarter of 2012.
As at 31 st December 2012 the average age of Group employees was 45 years and two months,
compared to 44 years and four months at the end of 2011, reflecting lower staff turnover,
while the average length of service was between 18 years and six months, compared to 17
years and seven months a year before.
The percentage of part-time employees was 8.6% (7.9% at the end of 2011). Female staff made
up 36.9% of the total, unchanged compared to 36.8% the year before.
Further details in trends and in the composition of the Group workforce are given in the 2012
Social Report, which may be consulted.
As concerns the fourth quarter, staff numbers fell by 128 which mainly affected employees (in
total -126), due also to a number of temporary contracts coming to an end (28). Staff on
agency leasing contracts were also affected by contracts ending, with a reduction of two in the
Redundancies for the period do not include staff leaving under the trade union agreement of
29 th November 2012 and the subsequent agreement signed on 12 th February 2013, for a total
of 736 staff at Group level, of which approximately 600 had already left in January.
Remuneration and incentive policies
Details of remuneration and incentive policies are reported in the Remuneration Report which
is given in another part of this document.
The report has been prepared in accordance with the “Supervisory Provisions on remuneration
and incentive policies and practices in banks and banking groups” issued by the Bank of Italy
on 30 th March 2011 and with articles 123-ter of the Consolidated Finance Act and 84-quater of
the Issuers’ Regulations. Reference is also made to public disclosure requirements under Pillar
III published in July 2011 by the Basel Committee on Banking Supervision as regulated by
Bank of Italy Circular No. 263 of 27 th December 2006 and subsequent amendments.
Further information is given on the matter in the UBI Banca report on corporate governance,
again in an attachment to this document.
Personnel management policies and instruments
In a particularly difficult economic context like that of the present, the combined skills and
professional abilities of each staff member represent a fundamental and strategic asset to the
Group. Now more than ever, fostering professional development means growing the intellectual
capital of the Group to create competitive advantages which will provide stability and reliability
to the Group's performance in the long term. We strongly believe that the strength of the
Group is its people and their value, and for this very reason, we have an on-going commitment
to the development of our human resources, their professional skills, and abilities, to ensure
that at every opportunity we nurture these skills and confirm the strategic importance of each
role. To achieve these objectives in a more uniform and synergetic manner, a shared vision of
management development and policies was outlined and implemented, taking into account the
individual requirements of each member company.
With this in mind, all the Group member companies have now adopted a standard role
system, and tools for skill assessment, performance assessment, and measurement of
potential. These tools are used to increase knowledge of human resources and to define
actions consistent with supporting their career growth and development in terms of training
requirements, horizontal and vertical mobility, financial rewards, as well as cross company
transfers inside the Group structure.
Yearly measurement of potential and skill assessments were carried out respectively on 98.7%
and 91.2% of the Group staff.
In 2012, over 200 interviews were carried out using these "managerial appraisal" tools to
protect key roles in terms of new marketplace challenges and to promote the identification of
managers, consistent with the Group strategic goals in terms of organisational change. These
interviews are also an important instrument in identifying targeted career paths and to allow
for management engagement with the Group's key human resources.
Similarly, in order to foster opportunities for professional development, over 300 staff were
assessed in terms of their professional potential, 50% of which were Branch network
commercial managers. The results of these assessments will determine access to career paths
for future Branch Managers.
On the basis of these results, and during the year, in partnership with the Polytechnic of
Milan, an advanced career development course focused on the young talent within the Group
was launched, whereby they enrolled in a two year post-graduate Masters course. (the
following section specifically on training programmes may be consulted in this respect). At the
same time, and as happened in the past, specific career development training courses were
launched for other staff that were also assessed with the aim of strengthening their weakest
skills and competencies.
Trade Union relations
At the beginning of 2012 a process was implemented with the aim, on the one hand, of
rationalising the Group branch network, and on the other of revising the distribution model in
Banca Popolare Commercio e Industria, involving the introduction of the "Head Branch-Group
Branch” model, already effective in all Group companies, and fully and finally implemented in
February. The impact on staff working conditions only involved some limited geographical
As part of finalising the agreed procedures, on the 20 th April two trade union Memorandums of
Intent were signed relating to the B@nca 24-7 merger into UBI Banca, following the
contribution to Prestitalia of the B@nca 24-7 line of business consisting of salary backed
with regard to the B@nca 24-7 merger into UBI Banca, the parties shared the joint mission
of identifying appropriate solutions to minimise the impact on employees affected, by
introducing specific policies relating to insurance cover, supplementary pension benefits,
part-time contracts, and geographic mobility. Mobility itself was limited through identifying
opportune organisational actions to ensure that the distribution of the activities across
various geographic areas was optimised. With the aim of maximising human and
professional capital, particular importance is attributed to retraining and professional
development programmes for staff involved in occupational mobility processes and also for
staff required to work on a different IT system;
a memorandum of intent was signed with trade unions, to regulate overall treatment under
labour agreements with regard to both pay and conditions, for staff involved in the transfer
to Prestitalia, in relation to the contribution to Prestitalia of B@nca 24-7 salary and pension
backed loan operations.
In May 2012 the process commenced of transferring the training and managerial professional
development activities of Group companies to the consortium company UBI Academy. The
implementation of this programme involved transferring activities previously undertaken by
the UBI Banca Training Department and launching them at the same time at UBI Academy.
This operation which commenced on the 10 th of July did not impact on the relevant staff
involved, neither in terms of geographical mobility, nor in terms of their legal or professional
Again in May negotiations commenced relating to the merger of Banco di San Giorgio into
Banca Regionale Europea and they were concluded with the signing of a trade union
memorandum of intent on 30 th of May. This operation formed part of a broader project
designed to strengthen the position of the UBI Banca Group both in terms of commercial
effectiveness and operational efficiency and its purpose was to simplify the Group structure
through the creation of a single operational unit focused on the north west of the country. This
required adopting limited geographic mobility measures, some transitory, in conjunction with
suitable professional qualification courses and retraining programmes for certain staff.
Agreements were signed at the end of June and the beginning of July at the network banks,
the Parent UBI Banca and UBI Sistemi e Servizi with trade union organisations for the
payment of company bonuses (“employee value added”) relating to 2011. It was agreed during
these negotiations, having examined company performances for the period and with account
taken of the overall economic situation and specifically in relation to the credit sector, to
introduce new, 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). Similar discussions commenced in July with the trade
unions at the product companies resulted in the signing of relevant agreements.
In October procedures commenced for the merger of Silf Societa Italiana Leasing and
Finanziamenti Spa into UBI Banca, with the signing of a trade union agreement on the 12 th of
November. The company integration, within the framework of the overall reorganisation of the
consumer lending arm, did not in itself cause any job losses, nor was any geographical
mobility required of the staff.
Again in October procedures for the transfer of the IW Bank operations to UBI Sistemi e
Servizi took place, concluding with the trade union agreement on the 6 th of November. The
transfer, consistent with the Group service model which involves assigning support and
service activities to UBI.S for all companies in the consortium group, will allow IW Bank to
better focus on its own business activity.
This did not create any job losses at IW Bank and did not have any significant impact on the
staff involved, except to a limited degree in terms of geographical mobility.
In December the Trade Unions were sent the legislative information regarding UBI Banca’s sale
of the controlling share packet in UBI Insurance Broker to Marine & Aviation JTL Spa.
This operation did not have any impact on the working conditions of UBI staff transferred to
Finally negotiations were commenced on 28 th February 2013 in relation to the merger of
Centrobanca into the Parent.
UBI Academy, the corporate university of the UBI Group, was established on the 2 nd of July 2012. It was
formed as a consortium between UBI Banca, the network banks, UBI.S and the main product companies, to
study, plan, advise and provide training and professional managerial development programmes for staff
employed in the Companies of the UBI Banca Group.
Therefore, from the second half onwards, all activities relating to planning and management of professional
training programmes of the Group were carried out by UBI Academy.
The key elements of its mission are:
- the clear link between the training courses and overall company strategy in terms of the company's
culture of quality and customer-focus, with the consequent support and involvement extending to all the
main players on the corporate management team;
- forward-thinking and innovation;
- the creation of partnerships with national and international institutes of learning (universities, business
schools, consultancy businesses, research centres) adding value to the In-house School of Teachers;
- the use of training practices that complement classroom-based programmes in terms of offering
innovative distant learning and experience-based training channels;
- a focus on adding value to local communities, fostering social promotional initiatives in addition to
promoting cultural events and activities, research and third-level training.
Based on the key strategies of the Parent, UBI Academy proposes the launch of training and professional
development initiatives based on the virtuous balance of three fundamental elements: "Knowledge"
(continued growth of overall knowledge, information, etc., specialisms), "Know-how" (development of skills
for the practical implementation of the acquired Knowledge) and "Will do" (fostering and developing
exemplary behavioural models leading to efficient delivery of services)
Training activities by subject areas in 2012
Insurance 14,353 14,280 - 28,633 28.8% 29,716 28.7%
Commercial 14,861 - 489 15,350 15.4% 9,409 9.1%
Finance 5,172 18 157 5,347 5.4% 4,836 4.7%
Credit 5,277 956 1,111 7,344 7.4% 11,380 11.0%
Managerial-Behavioural 9,531 2,903 - 12,434 12.5% 9,732 9.4%
Regulatory 3,991 16,091 - 20,082 20.2% 26,891 26.0%
Operational and other subjects 1,613 1,304 7,351 10,268 10.3% 11,476 11.1%
TOTAL 54,798 35,552 9,108 99,458 100.0% 103,440 100.0%
Over 100 thousand days (between classroom training, distance learning and development
programmes) with an average of 5.4 training days per employee (5.6 in 2011, 5.2 in 2010),
were allocated to training activities aimed at promoting, developing and adding value to the
technical and professional knowledge-bases as well as to the experience and managerial skillbases,
in addition to the ethical and cultural behaviours within the Group.
The main initiatives implemented in 2012 were as follows:
the extension of the "Value Programme" 2 to other strategic functions in the business; small
business managers, Corporate Account Managers and private bankers;
training programmes to support the launch of the Branch service model "Mass Market
Team", for employees and referred clients;
the training project aimed at honing the skills for new programme developer roles, a focus
point of the new service model for the branch network;
initiatives relating to "Optimising the anti-Money-Laundering Model" to improve employee
knowledge when dealing with customers on anti-money-laundering legislation;
strengthening and educating employees in areas relating to "pricing excellence" and
strengthening the financial capabilities of the branch network by focusing on financial
markets and asset allocation analyses.
Almost one third of the whole training activity focused on the technical-professional
competencies (commercial, credit and finance operations) of branch staff.
Insurance topics continued to represent a significant proportion of the training programmes
allocated for the year (29%), with programmes differentiated per market and per client
2 These training programmes, already positively implemented with Bank Managers, over the two years from 2010-2011 involve
assessment workshops to identify exemplary behavioural models and the concrete actions required to improve on-going
performances and client relationships.
segment (private, company) focusing specifically on training and up-skilling employees
involved in insurance brokering activities in accordance with the ISVAP 5/2006 Regulation.
Updates on legislation (20% of the total training) is, as in the past, focused on areas relevant
to banking operations, such as "Transparency", "Enforcing health, and safety in the
workplace" and "anti-money-laundering" as previously mentioned.
The managerial training programme targeting roles of responsibility, not only focused on the
professional development of the whole organisation and managerial spectrum, but specifically
concentrated on employee management and motivation in order to foster a greater sense of
team spirit. Staff were also given access to a programme which allowed them the opportunity
to meet with leading managers, businessmen, academics, and university luminaries to
improve their knowledge in the areas of economics, politics, and sociology.
In a period of enormous shake-ups and changes in the competitive landscapes, it is important
for Management to become involved in these programmes, to ensure they are up to date with
changes in the real world, as well as offering them opportunities to reflect and take stock. This
is a strategic resource for the UBI Banca Group.
With regard to initiatives involving young talent within the Group, forty-five young employees
enrolled in the level II two-year University Masters programme in "Management of banking
companies,” developed in partnership with the Polytechnic Institute of Milan School of
The entire in-house training team, made up of over 400 employees spent a total of almost 30
thousand days on training (almost 54% of the total training was delivered in the classroom).
The preparation and the up-skilling programmes were structured in the form of training
courses aimed at developing and refining teaching techniques, classroom management, and
the skills of imparting best-practice behavioural models. The trainer's role is not simply one of
transferring knowledge, but the sharing of experiences, positive examples and exemplary
behaviours, so that a shared language, company culture, and values can become embedded
throughout the whole region coupled with a sense of belonging to the Group.
The 2013 programme based on the "lifelong learning" model (i.e. continuous learning) is
expected to involve a total investment of 90,000 training days, mainly delivered in classroombased
settings and supported by distance learning and "on the job" training programmes.
Amongst the initiatives planned for the current business are:
the "Quality in the Bank" project, which envisages a programme of initiatives aimed at creating a
greater sense of appreciation throughout the "sales network" of the importance of the quality of the
the strengthening of performance, maximising and re-launching of Affluent Managers (Value
programme). This operation is aimed at endorsing exemplary commercial behaviours and at
strengthening the distinctive competencies and performances of Affluent Managers within the
commercial and financial areas;
the strengthening of "excellent competencies" in the new UBI Private and Corporate Unity, with high
level training courses focused on the competencies of Managers and Wealth Bankers;
consolidating the training programme aimed at supporting the Mass Market team and dedicated to
employees and customer service employees, focused on refining the new service model and the
commercial behaviours expected;
consolidating the training programme for new business development employees, in terms of
competency training and competency up-skilling;
continuation of the training programme on the new credit monitoring tools, to support the
rationalisation of loan performance monitoring processes, launched at the end of 2012;
activities undertaken to outline the 2013 commercial objectives, concentrating on prioritising certain
segments and aimed at educating the Branch Managers on performance management of their own
developing the Branch Managers and the Managers of the new Private and Corporate units knowledge
of compliance procedures within the Group in relation to operational risks and controls, in addition to
MiFID legislation and Financial planning and consultancy to reinforce exemplary behavioural models
elating to controls, and linking these to the management and to the development of the commercial
maximising the Group's talents through the pursuit of the aforementioned level II University Masters
in "Management of banking companies" and the launch of further initiatives in partnership with other
Universities in the region;
Other specific initiatives in the area of Diversity Management, aimed particularly at
maximising the value of the over 55 groups, on which the Group has focused particular
attention in light of changes relating to pension legislation, to facilitate reintegration
operationally and within the context of staff on long term absences.
The development of the management culture will continue through a renewed workshop
programme organised with leaders from the world of business and academia as well as the
development of knowledge in the field of management and great company strategies offered by
qualified centres of excellence (Business schools, Universities etc.)
A new initiative aimed at developing "entrepreneurial skills,” strategic goals and leadership
qualities will accompany the 2013 management training programme and the on-going
With the purpose of involving and empowering staff to assume personal responsibility for
maintaining their skills up to date, as well as developing their own competencies, during the
course of 2013 a new e-Learning interface will be launched allowing each individual employee
to assess their own yearly learning goals, specific to each role and to monitor their own
achievement of these goals.
The new "UBILife" Corporate Group Portal, which went online in the first half of 2012, has
moved on to become a consolidated space permanently accessed by Group employees, with a
total number of 100,000 page views per week.
During the year and after a trial period, the "Job Posting" tool became live in all the banks and
Group companies, advertising all vacant professional positions so that employees, potentially
interested in these roles, could apply automatically, thereby not only promoting internal
mobility but also broadening the candidate pool to cover the roles.
As had already occurred in the two previous years, an easy to consult electronic magazine was
created and inserted in the home page of UBILife in order to provide all Group employees with
prompt information on the UBI Banca Annual General Meeting held on 28 th April 2012. It
contained the main news on the subjects addressed in the meeting, a few photos of the day and
videos of interviews with the Chairmen of the Management and Supervisory Boards and with
the Chief Executive Officer of UBI Banca.
Internal Communication activity also involved the use of institutional videos (UBIClick) to
furnish updates on Group life and strategies.
Multimedia videos were also produced, not only to support daily operations (e.g. the new credit
transfer procedure introduced in February 2012), but also for reports on specific projects and
internal communication initiatives (e.g. the results of the first suggestions box on the
“simplicity programme” and on charitable initiatives undertaken by the Group in 2011).
Of significant importance and greatly used by the Group employees were the information
videos on the reorganisation (November 2012) and leaving incentive scheme and the
suspension/reduction of working hours (December).
In terms of publications, the first edition of the Almanacco YOUBI was printed in April, with
news of the main events involving the Group as a whole as well as individual banks and
companies occurring in 2011 and at the beginning of 2012. 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 addition the creation of the three monthly "We, UBI trainers”, for employees who took on
training roles within the organisation.
On the 19 th and 20 th of April two annual conventions were held in Vigevano of the Associations
of Retired Personnel of the former BPB-CV and the former BPCI, which saw the overall
participation of over 500 people and provided the opportunity to give updated information on
the consolidated business results for 2011.
In mid-December the solidarity Christmas lunch was organised for disadvantaged people and
families. This is a traditional event for those most in need and made possible thanks to the
commitment across all Group companies and banks. The event took place in every town and
city where the banks and companies have offices, with the involvement of the Bari Bitonto
Caritas Diocese (for the Bari offices) and the Exodus Foundation (for all the other offices). Over
150 employees volunteered to serve lunches to over one thousand guests, including numerous
Finally, on 20 th December, at the New Bergamo Fair, a convention on the subject "
Opportunities in crises" brought together over 1,400 colleagues from all areas of the Group
In 2013 the range of internal communication tools and initiatives described above, was further
enhanced by several initiatives such as:
UBIPod, or the regular "radio transmissions" that can be heard on the UBILife, intranet
portal, including brief informative discussions on company topics;
the trial launch by the developers, of the first "professional community" space, a special
area of the UBILife portal, to share documents, activities and experiences, specific to groups
the development of UBILife consistent with the organisational transformation of the Group,
through the redefinition of the structure of some of the Portal pages, as well as the on-going
functional improvements to the tools that support work activities.
The working environment and staff welfare
The section “Principal risks and uncertainties to which the UBI Banca Group is exposed” may
be consulted for information on matters regulated by Legislative Decree No. 81 of 9 th April
2008 (health and safety at the workplace), while information on environmental responsibility is
given as part of the information on corporate social and environmental responsibility
contained in the section “other information”.
The main initiatives carried forward in the field of welfare are reported as part of the
information given on corporate social responsibility contained in the section “Other
The scope of Consolidation
The companies included in the consolidation as at 31 st December 2012 are listed below,
divided into subsidiaries (fully consolidated), and associates (accounted for using the equity
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
1. Unione di Banche Italiane Scpa – UBI Banca (Parent)
registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €2,254,367,552.50 1
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 (74.7159% controlled) 2
registered address: Cuneo, Via Rome, 13 – share capital: €587,892,824.35
6. Banca Popolare di Ancona Spa (92.9711% 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)
registered address: Avenue du Théâtre, 14 - Lausanne (Switzerland) – share capital: 10,000,000
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 (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: €153,997,228
14. IW Bank Spa (75.3750% controlled and 23.4960% held by Centrobanca) 3
registered address: Milano, Via Cavriana, 20 – share capital: €18,404,795
15. UBI Banca Lombarda Private Investment Spa (100% controlled)
1 This is the share capital as at 5 th February 2013, modified following the exercise of conversion rights.
As at 31 st December 2012, the share capital amounted to €2,254,367,512.50, an increase of €615 compared to €2,254,366,897.50
as at 31 st December 2011, the result of a similar conversion which occurred on 4 th July 2012.
2 The percentage of control relates to the total share capital held.
3 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).
egistered address: Brescia, Via Cefalonia, 74 – share capital: €67,950,000
16. Centrobanca Spa (94.3231% controlled and BPA a 5.4712% interest held)
registered address: Milano, Corso Europa, 16 – share capital: €369,600,000
17. Centrobanca Sviluppo Impresa SGR Spa (100% controlled by Centrobanca)
registered address: Milano, Corso Europa, 16 – share capital: €2,000,000
18. UBI Pramerica SGR Spa (65% controlled)
operating headquarters: Milano, Via Monte di Pietà, 5 – share capital: €19,955,465
19. UBI Management Company Sa (100% controlled by UBI Pramerica SGR)
registered address: 37/A, Avenue J.F. Kennedy, L – Luxembourg – share capital: €125,000
20. UBI Insurance Broker Srl (100% controlled) 4
registered address: Bergamo, Via f.lli Calvi, 15 – share capital: €3,760,000
21. UBI Leasing Spa (98.9927% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €241,557,810 5
22. 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
23. BPB Immobiliare Srl (100% controlled)
registered address: Bergamo, Piazza Vittorio Veneto, 8 – share capital: €185,680,000
24. Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa (100% controlled)
registered address: Brescia, Via A. Moro, 13 – share capital: €35,000,000
25. Società Lombarda Immobiliare Srl - SOLIMM (100% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €100,000
26. BPB Funding Llc (100% controlled)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000,000
27. BPB Capital Trust (100% controlled by BPB Funding Llc)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000
28. Banca Lombarda Preferred Capital Company Llc (100% controlled)
registered address: 1209, Orange Street the Corp. Trust Center, Wilmington, New Castle County,
Delaware, USA – share capital: €1,000
29. 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
30. BPCI Funding Llc (100% controlled)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000,000
31. BPCI Capital Trust (100% controlled by BPCI Funding Llc)
registered address: One Rodney Square, 10 th floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware, USA – share capital: €1,000
32. UBI Fiduciaria Spa (100% controlled)
registered address: Brescia, Via Cefalonia, 74 – share capital: €1,898,000
33. UBI Gestioni Fiduciarie Sim Spa (100% controlled by UBI Fiduciaria)
registered address: Brescia, Via Cefalonia, 74 – share capital: €1,040,000
34. Coralis Rent Srl (100% controlled)
registered address: Milano, Via f.lli Gabba, 1 – share capital: €400,000
35. UBI Sistemi e Servizi SCpA 6 – Consortium Stock Company (70.3592% 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, UBI Pramerica
4 The company was sold on 21 st December 2012 and was consolidated at year-end for income statement items only.
5 Following the increase in the share capital subscribed by the Parent in January 2013, the share capital rose to €541,557,810.
6 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% by UBI Insurance Broker.
SGR and Centrobanca; 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
36. 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
37. UBI Finance Srl 7 (60% controlled)
registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
38. UBI Finance CB 2 Srl 8 (60% controlled)
registered address: Milano, Foro Bonaparte, 70 – share capital: €10,000
39. Albenza 3 Srl 9
40. Orio Finance Nr. 3 Plc 9
41. 24-7 Finance Srl 10
42. Lombarda Lease Finance 4 Srl 11
43. UBI Finance 2 Srl 12
44. UBI Finance 3 Srl 13
45. UBI Lease Finance 5 Srl 14
46. UBI SPV BBS 2012 Srl 15
47. UBI SPV BPCI 2012 Srl 15
48. UBI SPV BPA 2012 Srl 15
Companies consolidated for using the equity method (the investment is by the Parent where no
other indication is given):
1. Aviva Vita Spa (50% interest held) 16
registered address: Milan, Via Scarsellini, 14 – share capital: €155,000,000
2. Aviva Assicurazioni Vita Spa (formerly UBI Assicurazioni Vita Spa) 16 (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
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 18 th March 2008 to allow UBI Banca to implement a
programme to issue covered bonds on residential mortgages.
8 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 20 th December 2011 to allow the UBI Banca to implement a
second programme to issue covered bonds on commercial non residential mortgages.
9 Special purpose entities 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). They were consolidated because they are in reality controlled, since their assets and liabilities were originated by Group
member companies. The consolidation only concerns those assets subject to securitisation and the relative liabilities issued.
10 A special purpose entity used in compliance with Law No. 130/1999 for the B@nca 24-7 securitisations 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.
11 A special purpose entity formed in accordance with Law No. 130/1999 when a securitisation was performed in 2005 by 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.
12 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.
13 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.
14 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.
15 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
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.
16 The companies in the Aviva Group transferred their registered offices and operating headquarters with effect from 1 st November
5. Polis Fondi SGRpA (19.6% interest held)
registered address: Milano, Via Solferino, 7 – share capital: €5,200,000
6. Lombarda China Fund Management Company 17 (49% interest held)
registered address: 8F, No.66, BEA Finance Tower, Huayuanshiqiao Road, Pudong New Area,
Shanghai (China) – share capital: 120,000,000 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. SPF Studio Progetti Finanziari Srl (25% interest held by BPA)
registered address: Roma, Via National, 243 – share capital: €92,960
10. Prisma Srl (20% interest held)
registered address: Milano, Via S. Tecla, 5 – share capital: €120,000
11. Siderfactor Spa – in liquidation (27% interest held by UBI Factor) 18
registered address: Milano, Via f.lli Gabba, 1/A – share capital: €1,200,000
12. Capital Money Spa (20.6711% interest held)
registered address: Milano, Via Lausanne, 16 – share capital: €2,042,955
13. BY YOU Spa – in liquidation (former Rete Mutui Italia Spa, 10% interest held) 19
registered address: Milan, Viale Vittorio Veneto, 2/A – share capital: €650,000
14. 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 the consolidation compared to 31 st December 2011,
except for those reported below. Details of the changes are grouped on the one hand into
action taken to rationalise the ownership structure of the Group (consistent with that which
has already been reported in the section “Significant events that occurred during the year”)
and changes which involved shareholdings in banks and other companies.
The following action already announced to rationalise Group structure and activities was
completed in 2012:
• the creation of a single banking operation in the North West
The merger of Banco di San Giorgio into Banca Regionale Europea (decided by the Boards of
Directors of the two banks on 21 st December 2011):
- on 27 th March 2012, the Management Board of UBI Banca and, on 2 nd and 3 rd April
2012, the Boards of BRE and BSG approved the modifications to the parameters for the
merger to take account of the results of impairment tests conducted at the end of 2011.
Those modifications resulted in a new exchange ratio of 2.33 ordinary shares of BRE for
each ordinary share of BSG;
- on 16 th May 2012 the Bank of Italy (with a subsequent addition on 25th May) issued its
authorisation, in accordance with Art. 57 of Legislative Decree No. 385/1993 (the
consolidated banking act), for this business combination transaction, while on 30 th May
2012 the merger plan was filed with and entered into the Register of Companies;
- on 23 rd August, BRE acquired all the shares held by UBI Banca in BSG at a price per
share of €4.344 (as a preliminary step to the merger): 26,001,474 shares (38.1927% of
the share capital) therefore changed hands for €112.9 million;
17 The company will change its name to Zhong Ou Fund Management Co.
18 The company was removed from the Company Register on 3 rd January 2013 following the completion of the liquidation procedures,
for which the accounting allocation took place on 21 st December 2012.
19 The company is consolidated because UBI Banca holds 20% of the voting rights and a pledge on a further 10% of the share capital.
- on 17 th September, the resolution of an Extraordinary Shareholders' Meeting of Banco di
San Giorgio (held on 7 th September) which approved the bank’s merger into BRE was
filed with the Company Registrar of Genoa.
- in the period from 17 th September to 2 nd October 2012, a put option, and that is the right
to have one’s shares purchased, was exercised on the basis of valuable consideration
calculated using the same criteria as those used for withdrawal from the company
(article 2437-ter of the Italian Civil Code) and set at €4.40 for each share sold. The put
option, granted by the surviving company in accordance with Art. 2505-bis of the Italian
Civil Code, resulted in the purchase of 1,748,855 shares, with a payout of approximately
€7.7 million, which brought control of BSG by BRE up to 98.2616%. Shareholders who
did not exercise their put option were allotted 2,757,522 newly issued ordinary shares
(inclusive of actual rounded fractions) of the surviving company, on the basis of an
exchange ratio of 2.33 ordinary new BRE shares with a nominal value of €0.65 per
share for each share of BSG held, with a nominal value of €1.50 per share, there being
no provision for cash settlements;
- on 22 nd October 2012 the merger of Banco di San Giorgio into Banca Regionale Europea
became effective, while for accounting and tax purposes the transaction took effect from
1 st January 2012. As a result of the merger, BRE acquired the stakes previously held by
BSG in UBI Banca International (0,1618% of the share capital) and in UBI Sistemi e
Servizi (1,4799%) in its investment portfolio;
- Banco di San Giorgio has no longer been included in the consolidation since 31 st
Banca Regionale Europea Spa: as a result of the above, the share capital of BRE rose by
€1,136,755.75 to €587,892,824.35 (€468,880,348.04 at the end of 2011, with account
taken of the increase in the share capital carried out free of charge described later in this
report), while at the end of the year, the total stake held by UBI Banca stood at 74.7159%
(74.9437% twelve months before) and in particular at 79.8256% of the ordinary shares, at
26.4147% of the privileged shares and 59.1400% of the savings shares.
During the course of the year, private individual shareholders sold 6,012 savings shares to
UBI Banca, which increased its percentage stake from 59.1270% as at 31 st December 2011
to 59.1400% at the end of the year.
• rationalisation of the consumer credit sector
The merger of B@nca 24-7 into the Parent (approved by the Board of Directors of the merged
bank on 26 th March 2012 and by the Supervisory Board on 28 th March 2012) and the
specialisation of Prestitalia in salary backed loans.
- on 23 rd May 2012 an extraordinary shareholders’ meeting approved the following:
the replenishment of losses recognised in the balance sheet as at 31 st March 2012,
amounting to approximately €7 million. While not subject to the provisions of Art.
2446, paragraph one of the Italian Civil Code (reduction of the share capital for losses)
it was nevertheless considered advisable before increasing the share capital to first
reduce it from €46,385,482 to €39,359,617, by cancelling 8,085 shares (nominal
amount of €869 per share);
an increase in the capital by a total of €145 million in order to equip the company
with adequate regulatory capital to support its acquisition of B@nca 24-7’s “salary
and pension-backed loans and deduction authorisation” (hereinafter “salary-backed”)
operations. Consequently, 90,625 shares were issued with a nominal value of €869
each, offered with option rights to B@nca 24-7, the sole shareholder, at a price of
€1,600 per share, which brought the share capital up from €39,359,617 to
€118,112,742 (equivalent to 135,918 shares). The total increase in the capital
(€145,000,000) therefore consisted of €78,753,125 allocated to the share capital and
€66,246,875 recognised within the share premium reserve;
- on 25 th June 2012 an Extraordinary Shareholders’ Meeting passed the following
a further increase in the share capital of €35,884,486, to bring that capital up from
€118,112,742 to €153,997,228, through the issue of 41,294 new ordinary shares for
a nominal amount of €869 each, to be offered with option rights to B@nca 24-7, the
sole shareholder and to be paid for in kind by the contribution of its salary-backed
the transfer for operational and organisational purposes of the registered address
from 131/L via Ostiense, Rome, to 15 via Stoppani, Bergamo.
B@nca 24-7 Spa:
- on 25 th June 2012 (with effect, for legal, accounting and tax purposes from 1 st July
2012), in full subscription of and payment for the shares issued, B@nca 24-7
contributed to Prestitalia its salary-backed operations, consisting of all the assets,
liabilities and contractual relationships relating to the aforementioned operations,
concerning the processing, approval, completion and after sales management of the
salary-backed loans contributed, on the basis of the value estimated using the dividend
discount model performed by an independent appraiser. In detail, the balance sheet as
at 31 st March 2012 recorded total assets of €3.2 billion, of which €3.060 billion
consisting of loans and advances to customers.
In return for the contribution, B@nca 24-7 was assigned 41,294 new shares with a
nominal value of €869 each in the recipient of the contribution, fully paid-up, with a
total nominal value of €35,884,486;
- on 5 th July 2012, the deed of merger of B@nca 24-7 into UBI Banca was signed, in
implementation of resolutions approved by the respective Boards and in compliance with
the legal authorisations obtained. As B@nca 24-7 was wholly owned, the merger fell
within the scope of application of the simplified procedure pursuant to Art. 2505 of the
Italian Civil Code;
- on 23 rd July 2012, the merger of B@nca 24-7 into UBI Banca took effect legally, while for
accounting and tax purposes it was effective from 1 st January2012.
As a result of the transaction, the Parent acquired in its portfolio the stakes previously
held by the merged bank in Prestitalia (100% of the share capital) and in UBI Sistemi e
- this consumer credit bank has not been included in the consolidation since 30 th
- on 17 th October 2012, the Bank of Italy authorised the merger of Società Italiana Leasing
e Finanziamento Spa (SILF) into UBI Banca which held full control of it;
- on 23 rd November an extraordinary shareholders’ meeting of SILF and the Supervisory
Board of the Parent approved the business combination transaction, to be carried out by
means of the simplified procedure pursuant to Art. 2505 of the Italian Civil Code;
- on 21 st December 2012 the merger of SILF into UBI Banca became effective (with effect for
accounting and tax purposes from 1 st January 2012).
As a result, the Parent acquired the stake previously held by the merged company in UBI
Sistemi e Servizi (0.074%) in its equity portfolio;
- the company has not been included in the consolidation since 31 st December 2012.
Barberini Sa – in liquidation:
- on 30 th March 2012, a Shareholders' Meeting of this Belgian registered company (100%
controlled) passed a resolution to close it down in advance and to put it into liquidation
(deed filed on the 24 th April with the Brussels Court of Commerce). The sole purpose of
Barberini (both in Belgium and abroad) was the management of the equity investment in
Prestitalia Spa, sold in January 2011 to B@nca 24-7. Since it held no other investments
in portfolio, the governing bodies passed a resolution to wind it up and prepared
liquidation financial statements as at and for the period ended 31 st January 2012. The
company was removed from the Company Register on 25 th October 2012, with the
preparation by the receiver appointed of a document entitled “Décisions Ecrites de
l’Actionnaire Unique”, which completed the liquidation procedures for the company, on
the basis of the Belgian commercial and company law applicable;
- the company has not been included in the consolidation since 31 st December 2012.
• optimisation of foreign subsidiary activities
UBI Banca International acquires UBI Capital Singapore Pte (formerly BDG Singapore Pte).
On 30 th May 2012, the acquisition of the former BDG Singapore Pte by the Luxembourg
bank was completed for consideration of 170,000 Singapore dollars, calculated on the basis
of an expert appraisal. In detail:
- UBI Banca International Sa: on 2 nd April 2012, an increase in the share capital of
€11,542,830 was performed raising it from €59,070,750 (December 2011) to
€70,613,580. This operation, which saw the issue of a total of 22,633 new shares with a
nominal value of €510 each, was achieved partly as a no cost issue, by freeing up
available reserves (€7,090,530 equivalent to 13,903 new shares, allotted on a pro-rata
basis to all shareholders) and partly through an issue against cash payment fully
subscribed by UBI Banca, the majority shareholder (for €7,909,380, of which a share
premium of €3,457,080, with the issue of 8,730 new shares – nominal value of €510 per
share and a share premium of €396). Strengthening the capital not only allowed the
bank to maintain a solvency ratio above the minimum level recommended by the
Luxembourg Supervisory Authority (9%), but it was also designed to support the
acquisition of the entire investment in the former BDG Singapore Pte.
Following that ownership transaction, at the end of the year the percentage interests
held by the investors involved had changed as follows: UBI Banca controlled UBI Banca
International with a 91.1959% interest (90.6031% in December 2011), while BBS held
5.4825% (5.8519% at the end of year), BPB held 3.1598% (down from 3.3723% before)
and BRE held 0.1618% (down from 0.1727%);
- UBI Capital Singapore Pte Ltd: on 30 th May 2012, UBI Banca International acquired the
entire interest held (100%) in BDG Singapore Pte Ltd from Banque de Dépôts et de
Gestion 20 .
On 5 th June 2012, following approval by shareholders, the company changed its name
from BDG Singapore Pte Ltd to UBI Capital Singapore Pte Ltd. As authorised by
shareholders in the same meeting, the Directors then approved an increase in the share
capital, fully subscribed by the sole shareholder UBI Banca International, amounting to
five million Singapore dollars, bringing it up from 5,600,000 SGD in December 2011 to
10,600,000 SGD at the end of the year.
• contribution of IW Bank operations to UBI Sistemi e Servizi
On 30 th November 2012 the contribution of IW Bank operations took effect. It was approved
on 8 th October 2012 by the Board of IW Bank and on 11 th October 2012 by the Board of the
UBI Sistemi e Servizi SCpA:
- on 26 th November 2012, an extraordinary shareholders’ meeting took account of the
valuation of the operations (pursuant to Art. 2343 of the Italian Civil Code) performed by
an independent expert and approved an increase in the share capital of €1,013,548.64.
The share capital was therefore raised from €35,136,400 (December 2011) to
€36,149,948.64 (consisting of 69,519,132 shares), by the issue of 1,949,132 ordinary
shares with a nominal value of €0.52 each and a premium per share of €0.24, at the
service of the contribution made by IW Bank of its operations termed “ICT and
IW Bank Spa:
- on 26 th November, the contribution agreement was signed which involved the
assignment to IW Bank of new shares (1,949,132) issued by UBI.S, with full recognition
of the value of the operations contributed within the equity of the company in receipt of
them (share capital and reserves not distributed). On completion of the transactions just
reported, the stake held by the internet bank in the service company had risen from
0.074% in December 2011 to 2.8757% at the end of 2012.
• share capital increases: use of valuation reserves
Free of charge capital increases were performed in June 2012, using reserves that had been
formed following property revaluations pursuant to prior year special laws:
20 With regard to Banque de Dépôts et de Gestion, a letter of 21 st December 2012 from the Federal Supervisory Authority for
Financial Markets officialised the return of this Swiss bank to ordinary supervision after the implementation of corrective action in
response to recommendations made by that authority in the first half of 2012.
• Banca Popolare di Ancona Spa: on 26 th June 2012, an extraordinary shareholders’
meeting approved an increase in the share capital free of charge by making use of
revaluation reserves amounting to €24,958,090.32. The operation – which did not
involve the issue of new shares, but the increase from €5 to €6.02 of the nominal value
of each of the 24,468,716 outstanding shares – increased the share capital of this
Marches bank to €147,301,670.32 (€122,343,580 as at 31 st December 2011);
• Banca Regionale Europea Spa: on 27 th June 2012, an extraordinary shareholders’
meeting approved an increase in the share capital at no cost by making use of
revaluation reserves amounting to €117,220,087.01. The operation – which did not
involve the issue of new shares, but the increase from €0.52 to €0.65 of the nominal
value of each of the 901,692,977 outstanding shares – increased the share capital of this
Piedmont bank to €586,100,435.05 (468,880,348.04 as at 31 st December 2011).
• increase in securitised assets eligible for refinancing with the ECB
UBI SPV BBS 2012 Srl – UBI SPV BPCI 2012 Srl – UBI SPV BPA 2012 Srl: on 19 th April
2012 three new special purpose vehicles were formed for the respective network banks. The
companies each have share capital of €10,000 and the Parent holds a 10% stake in each of
them, while the remaining 90% of each is held by three different Dutch registered
The following changes in the percentages of shares held in Group banks occurred during the
• Centrobanca Spa: in the first months of 2012, UBI Banca continued to purchase shares
held by non-controlling shareholders (mainly banks), acquiring 173,608 shares for a total of
approximately €300 thousand;
UBI Banca’s investment therefore rose from 94.2715% as at 31 st December 2011 to
94.3231% at the end of 2012, while Group control increased over the same period from
99.7427% to 99.7943%;
• Banca Popolare di Ancona Spa: UBI Banca made further purchases from non-controlling
shareholders for a total of 9,071 shares, which brought its controlling interest up from
92.9340% at the end of 2011 to 92.9711% as at 31 st December 2012;
• Banca Carime Spa: over the twelve month period the Parent acquired 54,194 shares from
non-controlling shareholders, bringing its control of the subsidiary up to 92.8371%
(92.8332% at the end of 2011);
• IW Bank Spa: on 3 rd April 2012 Centrobanca and Webstar Sa terminated the contracts they
signed in 2009 and gave instructions, also in the interest of UBI Banca, to complete the
transfer of ownership of the investment in IW Bank held by Webstar. The Parent therefore
acquired 7,609,144 shares in the online bank from this Luxembourg counterparty,
corresponding to 10.3358% of the share capital of IW Bank, in return for a total payout of
€15.5 million. After that transaction, the investment held by the Parent increased from
65.0392% in December 2011 to 75.3750% at the end of the year (Centrobanca’s investment
was unchanged at 23.4960%).
At the end of the year the Group therefore held 98.8710% control of IW Bank (up from
88.5352% in the previous December). It must also be considered that the percentages
reported do not include the treasury shares held by IW Bank (831,168 shares accounting
for 1.1290% of the total). If these are included, control of the share capital is total.
We report the following with regard to other companies:
• Arca SGR Spa: on 14 th March 2012 the UBI Banca Group disclosed that it had informed
this company of its desire to withdraw from the share capital of that company, with respect
to all the shares held. The right of withdrawal arose, in accordance with Art 2347 of the
Italian Civil Code, because the Group did not vote in favour of the resolution passed by an
Extraordinary Shareholders’ Meeting which, on 20 th February 2012 (filed with the Company
Registrar of Milan on 5 th March 2012), had made amendments to the Articles of
On 3 rd September 2012, the procedures resulting from the exercise of that right were
completed. The withdrawal involved 13,354,000 shares (11,562,000 held by UBI Banca and
1,792,000 by Banca Popolare di Ancona), corresponding to 26.708% of the share capital,
valued at an average of €2.09 per share. Following the exercise of that right, the Group had
the right to cash payment for the shares held, at a price of €2.70 per share, for total
consideration of approximately €36 million, as determined according to the law by the
Board of Directors of Arca SGR. The investment was recognised within assets held for sale
from 31 st March 2012, while on 30 th September 2012 it ceased to appear in the list of equity
accounted investees and the accounts only recorded movements in the income statement,
quantified as a gain (net of taxes and non-controlling interests) of €7.6 million;
• UBI Finance CB 2 Srl: on 20 th March 2012, following the issue of the authorisation from the
Supervisory Authority for acquisition of control of the Company, UBI Banca, which already
held 10% of the share capital, acquired a further 50% of UBI Finance CB 2. The company –
whose sole purpose is the issue of covered bonds in accordance with Art. 7-bis of Law No.
130 of 30 th April 1999 – was formed in December 2011 for the purpose of commencing a
second programme for the issuance of covered bonds backed by non-residential commercial
mortgages. The remaining part of the share capital (40%) is held by the Dutch registered
company Stichting Viola.
• UBI Academy SCRL: this consortium company was formed on 2 nd July 2012 for the
managerial training and development of staff who work in the UBI Banca Group (corporate
university). The share capital of UBI Academy, amounting to €100,000, had initially been
divided as follows: 70% to the Parent, 3% to the network banks (BPB, BBS, BPCI, BPA,
Carime, BRE) and to UBI.S and 1.5% to Banca di Valle Camonica, UBI Banca Private
Investment, IW Bank, UBI Leasing, UBI Factor and UBI Pramerica SGR.
On 19 th December 2012, the Parent transferred 1,500 shares to Prestitalia to allow it to
become a consortium member with a 1.5% stake. The percentage of the share capital
controlled by UBI Banca had therefore fallen at the end of year to 68.5%;
• InvestNet International Spa: on 17 th July the deed was signed for this company’s merger
into IW Bank and it was filed with the Company Registrar of Milan on 23 rd July 2012. The
merger became effective on 1 st August 2012, while it is effective for accounting and tax
purposes from 1 st January 2012. The company was therefore excluded from the
consolidation from 30 th September 2012.
• BY YOU Spa: on 13 th August the documents were filed with the Company Register to put
the company into voluntary liquidation, in view of the changed market context.
The Board of Liquidators is considering more appropriate measures to reach agreement on
a solution to the problems of this company, with account also taken of the new instruments
introduced to the Bankruptcy Act with Decree Law No. 83 of 22 nd June 2012, in a context of
greater satisfaction of creditor interests.
In this respect, in order to ensure better protection of the UBI Banca Group’s interests, in
relation, amongst other things, to the prior business relations with this company and with
its majority shareholders, negotiations were started with both the latter and with the Board
of Liquidators, designed to seek possible solutions to carry out the liquidation in a positive
• UBI Insurance Broker Srl: on 21 st December, this 100% controlled insurance brokerage was
sold to Marine & Aviation JLT Spa (75% controlled by Marine & Aviation and 25%
controlled by Jardine Lloyd Thompson) for over €19 million, of which approximately €5.8
million consisting of a gross consolidated gain and excluding the €3.2 million of dividends
UBI Insurance Broker is still included in the consolidation (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 streamline the organisational structure of the Group by
centralising, amongst other things, intragroup equity investments, on 21 st December UBI
Banca acquired the stake in UBI Leasing held by Banca Popolare di Ancona (7,647,921
shares accounting for 18.9965% of the share capital) for €29.9 million. The direct control
exercised over this leasing company by the Parent therefore rose from 79.9962% (December
2011) to 98.9927%.
In order to provide a more adequate level of capitalisation, on 30 th 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 2 nd
January 2013 the subscription of a tranche of a share capital increase was launched,
offered with option rights to shareholders, 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
31 st December 2012 to the current €541,557,810;
• UBI Sistemi e Servizi Scpa: various changes took place in the composition of the
shareholders, resulting mainly from the intragroup ownership transactions reported above:
- 23 rd July: UBI Banca acquired 1,000,000 shares following the merger of B@nca 24-7;
- 9 th October: the Parent sold 6,757 shares to UBI Academy, allowing the company to become a
member of the Consortium which delivers IT and other services to the Group;
- 22 nd October: BRE acquired 1,000,000 shares following the merger of BSG;
- 30 th November: increase of the share capital to €36,149,948.64 through the issue of 1,949,132
new shares, as valuable consideration to IW Bank for the contribution of its operations;
- 21 st December: UBI Banca acquired 50,000 shares following the merger of SILF;
- 21 st December: the Group sold its stake held in UBI Insurance Broker, but that company
nevertheless continued to maintain its interest in the service company (50,000 shares). As a
consequence of that transaction, Group control over UBI.S was 98.4896% (while the remaining
1.4385% is held by UBI Assicurazioni and 0.0719% is held by UBI Insurance Broker).
Reclassified consolidated financial
statements, reclassified income statement
net of the most significant non-recurring
items and reconciliation schedules
Reclassified consolidated balance sheet
Figures in thousands of euro
31.12.2012 31.12.2011 Changes
10. Cash and cash equivalents 641,608 625,835 15,773 2.5%
20. Financial assets held for trading 4,023,934 2,872,417 1,151,517 40.1%
30. Financial assets designated at fair value 200,441 126,174 74,267 58.9%
40. Available-for-sale financial assets 14,000,609 8,039,709 5,960,900 74.1%
50. Held-to-maturity investments 3,158,013 - 3,158,013 -
60. Loans and advances to banks 6,072,346 6,184,000 -111,654 -1.8%
70. Loans and advances to customers 92,887,969 99,689,770 -6,801,801 -6.8%
80. Hedging derivatives 1,478,322 1,090,498 387,824 35.6%
90. Fair value change in hedged financial assets (+/-) 885,997 704,869 181,128 25.7%
100. Equity investments 442,491 352,983 89,508 25.4%
120. Property, plant and equipment 1,967,197 2,045,535 -78,338 -3.8%
130. Intangible assets 2,964,882 2,987,669 -22,787 -0.8%
of which: goodwill 2,536,574 2,538,668 -2,094 -0.1%
140. Tax assets 2,628,121 2,817,870 -189,749 -6.7%
150. Non-current assets and disposal groups held for sale 21,382 22,020 -638 -2.9%
160. Other assets 1,060,390 2,244,343 -1,183,953 -52.8%
Total assets 132,433,702 129,803,692 2,630,010 2.0%
LIABILITIES AND EQUITY
10. Due to banks 15,211,171 9,772,281 5,438,890 55.7%
20. Due to customers 53,758,407 54,431,291 -672,884 -1.2%
30. Debt securities issued 45,059,153 48,377,363 -3,318,210 -6.9%
40. Financial liabilities held for trading 1,773,874 1,063,673 710,201 66.8%
60. Hedging derivatives 2,234,988 1,739,685 495,303 28.5%
80. Tax liabilities 666,364 702,026 -35,662 -5.1%
90. Liabilities associated with assets held for sale - - - -
100. Other liabilities 2,391,283 3,139,616 -748,333 -23.8%
110. Post-employment benefits 420,704 394,025 26,679 6.8%
120. Provisions for risks and charges: 340,589 345,785 -5,196 -1.5%
a) pension and similar obligations 80,563 76,460 4,103 5.4%
b) other provisions 260,026 269,325 -9,299 -3.5%
Share capital, share premiums, reserves, valuation reserves and treasury
shares 9,655,174 10,780,511 -1,125,337 -10.4%
210. Non-controlling interests 839,287 898,924 -59,637 -6.6%
220. Profit (loss) for the year 82,708 -1,841,488 1,924,196 n.s.
Total liabilities and equity 132,433,702 129,803,692 2,630,010 2.0%
Reclassified consolidated quarterly balance sheets
Figures in thousands of euro
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011 30.9.2011 30.6.2011 31.3.2011
10. Cash and cash equivalents 641,608 516,764 509,983 538,617 625,835 568,540 595,685 569,052
20. Financial assets held for trading 4,023,934 3,177,832 5,211,059 3,679,925 2,872,417 2,250,881 1,093,974 1,613,809
30. Financial assets designated at fair value 200,441 121,026 122,376 123,066 126,174 130,494 468,038 474,114
40. Available-for-sale financial assets 14,000,609 13,483,510 12,837,037 10,794,700 8,039,709 8,365,381 10,223,610 10,252,511
50. Held-to-maturity investments 3,158,013 3,220,200 3,192,239 3,254,437 - - - -
60. Loans and advances to banks 6,072,346 5,286,733 4,843,142 4,925,671 6,184,000 5,314,336 4,384,636 4,510,008
70. Loans and advances to customers 92,887,969 94,843,423 95,333,181 97,105,771 99,689,770 102,765,316 102,774,467 102,702,444
80. Hedging derivatives 1,478,322 1,541,973 1,340,946 1,087,609 1,090,498 995,341 413,389 351,398
90. Fair value change in hedged financial assets (+/-) 885,997 868,601 819,561 722,393 704,869 675,977 254,474 194,086
100. Equity investments 442,491 423,352 406,225 409,499 352,983 351,463 381,376 378,196
120. Property, plant and equipment 1,967,197 1,973,317 2,002,183 2,021,314 2,045,535 2,058,170 2,077,758 2,086,769
130. Intangible assets 2,964,882 2,962,430 2,971,246 2,979,781 2,987,669 5,268,352 5,287,195 5,452,328
of which: goodwill 2,536,574 2,538,668 2,538,668 2,538,668 2,538,668 4,286,210 4,286,210 4,416,659
140. Tax assets 2,628,121 2,525,656 2,631,652 2,641,166 2,817,870 2,604,967 2,312,956 1,704,774
150. Non-current assets and disposal groups held for sale 21,382 19,231 37,748 37,217 22,020 6,874 7,041 6,023
160. Other assets 1,060,390 1,138,807 1,350,560 1,189,953 2,244,343 2,272,277 2,476,298 2,442,098
Total assets 132,433,702 132,102,855 133,609,138 131,511,119 129,803,692 133,628,369 132,750,897 132,737,610
LIABILITIES AND EQUITY
10. Due to banks 15,211,171 14,765,300 14,708,333 15,143,195 9,772,281 8,611,714 4,966,574 7,332,517
20. Due to customers 53,758,407 56,356,021 57,074,877 52,358,466 54,431,291 56,392,736 56,199,737 56,144,592
30. Debt securities issued 45,059,153 43,907,855 45,171,850 47,084,745 48,377,363 47,502,685 49,964,140 48,678,875
40. Financial liabilities held for trading 1,773,874 1,479,098 1,274,898 934,366 1,063,673 654,949 844,259 1,040,163
60. Hedging derivatives 2,234,988 2,102,181 1,966,231 1,823,770 1,739,685 1,569,117 953,439 1,020,994
80. Tax liabilities 666,364 632,136 562,709 807,049 702,026 1,389,753 1,309,724 1,083,134
90. Liabilities associated with assets held for sale - - - - - 827 987 -
100. Other liabilities 2,391,283 1,608,626 1,991,859 2,094,393 3,139,616 4,554,208 4,778,011 4,606,189
110. Post-employment benefits 420,704 410,555 400,953 405,062 394,025 389,096 383,467 382,333
120. Provisions for risks and charges: 340,589 332,063 352,369 347,885 345,785 326,203 335,057 321,912
a) pension and similar obligations 80,563 76,601 77,680 75,453 76,460 65,806 67,022 67,317
b) other provisions 260,026 255,462 274,689 272,432 269,325 260,397 268,035 254,595
+180.+190.+ 200. Share capital, share premiums, reserves, valuation reserves and treasury shares 9,655,174 9,401,308 9,075,169 9,497,332 10,780,511 11,105,404 11,821,241 11,088,990
210. Non-controlling interests 839,287 884,960 870,347 909,478 898,924 949,008 942,551 973,302
220. Profit (loss) for the period/year 82,708 222,752 159,543 105,378 -1,841,488 182,669 251,710 64,609
Total liabilities and equity 132,433,702 132,102,855 133,609,138 131,511,119 129,803,692 133,628,369 132,750,897 132,737,610
Reclassified consolidated income statement
Figures in thousands of euro
2012 2011 Changes
A B A-B A/B C D C-D C/D
10.-20. Net interest income 1,863,561 2,018,978 (155,417) (7.7%) 417,494 520,280 (102,786) (19.8%)
of which: effects of the purchase price allocation (36,980) (49,931) (12,951) (25.9%) (8,966) (12,441) (3,475) (27.9%)
Net interest income excluding the effects of the PPA 1,900,541 2,068,909 (168,368) (8.1%) 426,460 532,721 (106,261) (19.9%)
70. Dividends and similar income 15,591 19,997 (4,406) (22.0%) 1,929 89 1,840 -
Profits (losses) of equity-accounted investees 44,426 9,947 34,479 346.6% 10,683 (3,171) 13,854 n.s.
40.-50. Net fee and commission income 1,182,276 1,193,708 (11,432) (1.0%) 310,677 315,142 (4,465) (1.4%)
of which performance fees 19,741 11,728 8,013 68.3% 19,741 11,728 8,013 68.3%
100.+110. Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at fair value 257,278 7,329 249,949 - 109,016 23,999 85,017 354.3%
220. Other net operating income/expense 163,179 188,380 (25,201) (13.4%) 41,047 47,987 (6,940) (14.5%)
Operating income 3,526,311 3,438,339 87,972 2.6% 890,846 904,326 (13,480) (1.5%)
Operating income excluding the effects of the PPA 3,563,291 3,488,270 75,021 2.2% 899,812 916,767 (16,955) (1.8%)
180.a Staff costs (1,373,719) (1,423,196) (49,477) (3.5%) (336,348) (350,339) (13,991) (4.0%)
180.b Other administrative expenses (701,797) (717,988) (16,191) (2.3%) (188,130) (195,751) (7,621) (3.9%)
200.+210. Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets (191,144) (248,442) (57,298) (23.1%) (49,605) (66,574) (16,969) (25.5%)
of which: effects of the purchase price allocation (20,099) (69,823) (49,724) (71.2%) (5,015) (17,455) (12,440) (71.3%)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets
excluding the effects of the PPA (171,045) (178,619) (7,574) (4.2%) (44,590) (49,119) (4,529) (9.2%)
Operating expenses (2,266,660) (2,389,626) (122,966) (5.1%) (574,083) (612,664) (38,581) (6.3%)
Operating expenses excluding the effects of the PPA (2,246,561) (2,319,803) (73,242) (3.2%) (569,068) (595,209) (26,141) (4.4%)
Net operating income 1,259,651 1,048,713 210,938 20.1% 316,763 291,662 25,101 8.6%
Net operating income excluding the effects of the PPA 1,316,730 1,168,467 148,263 12.7% 330,744 321,558 9,186 2.9%
130.a Net impairment losses on loans (847,214) (607,078) 240,136 39.6% (352,535) (208,413) 144,122 69.2%
130. b+c+d Net impairment losses on other financial assets and liabilities (54,810) (135,143) (80,333) (59.4%) (4,078) 3,694 (7,772) n.s.
190. Net provisions for risks and charges (49,212) (31,595) 17,617 55.8% (28,367) (11,812) 16,555 140.2%
240.+270. Profits from the disposal of equity investments 14,714 7,119 7,595 106.7% 6,091 5,616 475 8.5%
Pre-tax profit (loss) from continuing operations 323,129 282,016 41,113 14.6% (62,126) 80,747 (142,873) n.s.
Pre-tax profit (loss) from continuing operations excluding the effects of the PPA 380,208 401,770 (21,562) (5.4%) (48,145) 110,643 (158,788) n.s.
290. Taxes on income for the period/year from continuing operations (121,238) 95,942 (217,180) n.s. 17,570 (48,585) 66,155 n.s.
of which: effects of the purchase price allocation 18,862 39,423 (20,561) (52.2%) 4,620 9,842 (5,222) (53.1%)
310. Post-tax profit from discontinued operations - 248 (248) (100.0%) - 226 (226) (100.0%)
330. Profit for the period/year attributable to non-controlling interests (17,310) (28,833) (11,523) (40.0%) (1,547) (9,477) 7,930 n.s.
of which: effects of the purchase price allocation 3,580 8,687 (5,107) (58.8%) 834 2,132 (1,298) (60.9%)
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving incentives and
net impairment losses on goodwill and finite useful life intangible assets excluding the effects of the PPA 219,218 421,017 (201,799) (47.9%) (37,576) 40,833 (78,409) n.s.
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving
incentives and net impairment losses on goodwill and finite useful life intangible assets 184,581 349,373 (164,792) (47.2%) (46,103) 22,911 (69,014) n.s.
210.+260. Impairment losses on goodwill and finite useful life intangible assets net of taxes and non-controlling interests - (2,190,861) (2,190,861) (100.0%) - (2,047,068) 2,047,068 (100.0%)
180.a Expenses for leaving incentives net of taxes and non-controlling interests (101,873) - 101,873 - (93,941) - 93,941 -
340. Profit (loss) for the year/period attributable to the shareholders of the Parent 82,708 (1,841,488) 1,924,196 n.s. (140,044) (2,024,157) (1,884,113) (93.1%)
Total impact of the purchase price allocation on the income statement (34,637) (71,644) (37,007) (51.7%) (8,527) (17,922) (9,395) (52.4%)
Reclassified consolidated quarterly income statements
Figures in thousands of euro
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
10.-20. Net interest income 417,494 466,438 486,311 493,318 520,280 509,868 488,646 500,184
of which: effects of the purchase price allocation (8,966) (9,341) (9,051) (9,622) (12,441) (11,636) (12,018) (13,836)
Net interest income excluding the effects of the PPA 426,460 475,779 495,362 502,940 532,721 521,504 500,664 514,020
70. Dividends and similar income 1,929 980 12,384 298 89 1,243 16,555 2,110
Profits (losses) of equity-accounted investees 10,683 7,984 14,924 10,835 (3,171) 3,496 4,953 4,669
40.-50. Net fee and commission income 310,677 285,544 286,672 299,383 315,142 291,989 294,641 291,936
of which performance fees 19,741 - - - 11,728 - - -
Net income (loss) from trading, hedging and disposal/repurchase activities and from assets/liabilities
designated at fair value 109,016 42,898 11,397 93,967 23,999 (23,891) (7,391) 14,612
220. Other net operating income/expense 41,047 37,056 49,045 36,031 47,987 45,191 46,196 49,006
Operating income 890,846 840,900 860,733 933,832 904,326 827,896 843,600 862,517
Operating income excluding the effects of the PPA 899,812 850,241 869,784 943,454 916,767 839,532 855,618 876,353
180.a Staff costs (336,348) (348,572) (327,564) (361,235) (350,339) (334,913) (373,217) (364,727)
180.b Other administrative expenses (188,130) (161,445) (176,476) (175,746) (195,751) (165,947) (185,209) (171,081)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible
assets (49,605) (45,770) (47,020) (48,749) (66,574) (60,365) (61,779) (59,724)
of which: effects of the purchase price allocation (5,015) (5,020) (5,003) (5,061) (17,455) (17,456) (17,456) (17,456)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible
assets excluding the effects of the PPA (44,590) (40,750) (42,017) (43,688) (49,119) (42,909) (44,323) (42,268)
Operating expenses (574,083) (555,787) (551,060) (585,730) (612,664) (561,225) (620,205) (595,532)
Operating expenses excluding the effects of the PPA (569,068) (550,767) (546,057) (580,669) (595,209) (543,769) (602,749) (578,076)
Net operating income 316,763 285,113 309,673 348,102 291,662 266,671 223,395 266,985
Net operating income excluding the effects of the PPA 330,744 299,474 323,727 362,785 321,558 295,763 252,869 298,277
130.a Net impairment losses on loans (352,535) (160,328) (203,181) (131,170) (208,413) (135,143) (158,148) (105,374)
130. b+c+d Net impairment losses on other financial assets and liabilities (4,078) (992) (47,663) (2,077) 3,694 (119,245) (17,959) (1,633)
190. Net provisions for risks and charges (28,367) 34 (16,764) (4,115) (11,812) (5,228) (4,136) (10,419)
240.+270. Profits from the disposal of equity investments 6,091 8,593 9 21 5,616 170 1,152 181
Pre-tax profit (loss) from continuing operations (62,126) 132,420 42,074 210,761 80,747 7,225 44,304 149,740
Pre-tax profit (loss) from continuing operations excluding the effects of the PPA (48,145) 146,781 56,128 225,444 110,643 36,317 73,778 181,032
290. Taxes on income for the period/year from continuing operations 17,570 (62,554) 19,727 (95,981) (48,585) (70,191) 291,636 (76,918)
of which: effects of the purchase price allocation 4,620 4,746 4,643 4,853 9,842 9,575 9,936 10,070
310. Post-tax profit from discontinued operations - (13) - 13 226 22 - -
330. Profit for the period attributable to non-controlling interests (1,547) (1,352) (7,137) (7,274) (9,477) (6,097) (5,046) (8,213)
of which: effects of the purchase price allocation 834 1,002 862 882 2,132 2,114 2,139 2,302
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for leaving
incentives and net impairment losses on goodwill and finite useful life intangible assets excluding the
effects of the PPA (37,576) 77,114 63,213 116,467 40,833 (51,638) 348,293 83,529
Profit (loss) for the year/period attributable to the shareholders of the Parent before expenses for
leaving incentives and net impairment losses on goodwill and finite useful life intangible assets (46,103) 68,501 54,664 107,519 22,911 (69,041) 330,894 64,609
Impairment losses on goodwill and finite useful life intangible assets net of taxes and non-controlling
interests - - - - (2,047,068) - (143,793) -
180.a Expenses for leaving incentives 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 (140,044) 63,209 54,165 105,378 (2,024,157) (69,041) 187,101 64,609
Total impact of the purchase price allocation on the income statement (8,527) (8,613) (8,549) (8,948) (17,922) (17,403) (17,399) (18,920)
Reclassified consolidated income statement net of the most significant non-recurring items
net of non-recurring
net of non-recurring items
Figures in thousands of euro
Net interest income (including the effects of the PPA) 1,863,561 2,018,978 (155,417) (7.7%)
Dividends and similar income 15,591 19,997 (4,406) (22.0%)
Profits of equity-accounted investees 44,426 9,947 34,479 346.6%
Net fee and commission income 1,182,276 1,193,708 (11,432) (1.0%)
Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at fair
value 223,079 7,329 215,750 -
Other net operating income/expense 163,179 191,725 (28,546) (14.9%)
Operating income (including the effects of PPA) 3,492,112 3,441,684 50,428 1.5%
Staff costs (1,373,719) (1,451,128) (77,409) (5.3%)
Other administrative expenses (701,797) (717,988) (16,191) (2.3%)
Depreciation, amortisation and net impairment losses on property, plant and equipment and intangible assets
(including the effects of PPA) (188,921) (244,969) (56,048) (22.9%)
Operating expenses (including the effects of PPA) (2,264,437) (2,414,085) (149,648) (6.2%)
Net operating income (including the effects of PPA) 1,227,675 1,027,599 200,076 19.5%
Net impairment losses on loans (847,214) (607,078) 240,136 39.6%
Net impairment losses on other financial assets and liabilities 1,334 (9,690) 11,024 n.s.
Net provisions for risks and charges (49,212) (29,232) 19,980 68.3%
Profits from the disposal of equity investments 779 7,119 (6,340) (89.1%)
Pre-tax profit from continuing operations (including the effects of PPA) 333,362 388,718 (55,356) (14.2%)
Taxes on income for the year from continuing operations (224,046) (247,775) (23,729) (9.6%)
Post-tax profit from discontinued operations - 248 (248) (100.0%)
Profit for the year attributable to non-controlling interests (11,992) (29,629) (17,637) (59.5%)
Profit for the year attributable to the shareholders of the Parent 97,324 111,562 (14,238) (12.8%)
Reclassified consolidated income statement net of the most significant non-recurring: details
Prior year tax
Tax relief on nonaccounting
UBI Banca tax Impact of IRAP
pursuant to Law
net of nonrecurring
accordance with deferred tax Discontinuati
realignment in adjustment for
No. 111/2011 and
net of non-
deductions on corporate Disposal of
loan provisions income tax
Law No. 214/2011
shares and AFS
Release of Write-off of
tangible and items
Law No. 111/2011 provisions on of the UBI
of BPA goodwill
surplus B@nca 24-7 items
of UBI Banca purposes of and equity
on finite useful
and write-off of recognised as Leasing
recognised in the
pursuant to Law regional
provisions IT platform
deferred income at 31st agent network
No. 244/2007 production tax
tax assets/deferred December
(Section EC) on the cost of
IRAP tax assets 2010
Figures in thousands of euro
to Law No.
Net interest income (including the effects of the PPA) 1,863,561 1,863,561 2,018,978 2,018,978
Dividends and similar income 15,591 15,591 19,997 19,997
Profits (losses) of equity-accounted investees 44,426 44,426 9,947 9,947
Net fee and commission income 1,182,276 1,182,276 1,193,708 1,193,708
Net income (loss) from trading, hedging and
disposal/repurchase activities and from assets/liabilities
designated at fair value 257,278 (20,671) (13,528) 223,079 7,329 7,329
Other net operating income/expense 163,179 163,179 188,380 3,345 191,725
Operating income (including the effects of PPA) 3,526,311 (20,671) - - - - - (13,528) - 3,492,112 3,438,339 - - - - 3,345 - - 3,441,684
Staff costs (1,373,719) (1,373,719) (1,423,196) (27,932) (1,451,128)
Other administrative expenses (701,797) (701,797) (717,988) (717,988)
Depreciation, amortisation and net impairment losses on
property, plant and equipment and intangible assets
(including the effects of PPA) (191,144) 2,223 (188,921) (248,442) 3,473 (244,969)
Operating expenses (including the effects of PPA) (2,266,660) - - - - - - - 2,223 (2,264,437) (2,389,626) - - - - - (27,932) 3,473 (2,414,085)
Net operating income (including the effects of PPA) 1,259,651 (20,671) - - - - - (13,528) 2,223 1,227,675 1,048,713 - - - - 3,345 (27,932) 3,473 1,027,599
Net impairment losses on loans (847,214) (847,214) (607,078) (607,078)
Net impairment losses on other financial assets and
liabilities (54,810) 56,144 1,334 (135,143) 125,453 (9,690)
Net provisions for risks and charges (49,212) (49,212) (31,595) 2,363 (29,232)
Profits from the disposal of equity investments 14,714 (13,935) 779 7,119 7,119
Pre-tax profit from continuing operations (including the
effects of PPA) 323,129 (20,671) 56,144 - - - - (27,463) 2,223 333,362 282,016 - 125,453 - - 5,708 (27,932) 3,473 388,718
Taxes on income for the year from continuing operations (121,238) 5,684 (5,596) (24,992) (8,298) (66,086) (2,835) (685) (224,046) 95,942 (2,292) (352,841) 6,267 (1,407) 7,681 (1,125) (247,775)
Post-tax profit from discontinued operations - - 248 248
Profit for the year attributable to non-controlling interests (17,310) (21) 5,191 181 (33) (11,992) (28,833) (925) 129 (29,629)
Profit for the year attributable to the shareholders of
the Parent before expenses for leaving incentives and
impairment losses on goodwill and on finite useful life
intangible assets 184,581 (14,987) 50,527 - (24,992) (8,298) (60,895) (30,117) 1,505 97,324 349,373 - 123,161 (352,841) 5,342 4,301 (20,122) 2,348 111,562
Impairment losses on goodwill and finite useful life intangible
assets net of taxes and non-controlling interests - - (2,190,861) 2,190,861 -
Expenses for leaving incentives net of taxes and non-controlling interests (101,873) 101,873 - - -
Profit (loss) for the year attributable to the shareholders
of the Parent 82,708 (14,987) 50,527 101,873 (24,992) (8,298) (60,895) (30,117) 1,505 97,324 (1,841,488) 2,190,861 123,161 (352,841) 5,342 4,301 (20,122) 2,348 111,562
ROE 0.9% 1.0% -17.1% 1.0%
Cost/income ratio (including the effects of PPA) 64.3% 64.8% 69.5% 70.1%
Cost/income ratio (excluding the effects of PPA) 63.0% 63.6% 66.5% 67.1%
Reconciliation schedule as at 31st December 2012
RECLASSIFIED INCOME STATEMENT 2012 Reclassifications
Figures in thousands of euro
Profit of equityaccounted
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
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)
Depreciation, amortisation and net impairment losses on property,
200.+210. 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 from discontinued operations - -
330. Profit for the year attributable to non-controlling interests (8,958) (8,352) (17,310)
Profit (loss) for the year attributable to the shareholders of
the Parent before expenses for leaving incentives 82,708 101,873 184,581
Expenses for leaving incentives net of taxes and non-controlling
interests - (101,873) (101,873)
Profit for the year attributable to the shareholders of the
Parent 82,708 - - - - - 82,708
Reconciliation schedule for the year ended 31st December 2011
RECLASSIFIED INCOME STATEMENT 2011 Reclassifications
Figures in thousands of euro
goodw ill and finite
10.-20. Net interest income 2,121,689 (102,711) 2,018,978
70. Dividends and similar income 19,997 19,997
Profits of equity-accounted investees - 9,947 9,947
40.-50. Net fee and commission income 1,191,934 1,774 1,193,708
Net income from trading, hedging and disposal/repurchase
activities and from assets/liabilities designated at fair value 7,329 7,329
220. Other net operating income/expense 243,065 (163,065) 7,443 100,937 188,380
Operating income 3,584,014 (163,065) 9,947 7,443 - - 3,438,339
180.a Staff costs (1,423,196) (1,423,196)
180.b Other administrative expenses (881,053) 163,065 (717,988)
Depreciation, amortisation and net impairment losses on property,
200.+210. plant and equipment and intangible assets (783,496) (7,443) 542,497 (248,442)
Operating expenses (3,087,745) 163,065 - (7,443) - 542,497 (2,389,626)
Net operating income 496,269 - 9,947 - - 542,497 1,048,713
130.a Net impairment losses on loans (607,078) (607,078)
130. b+c+d Net impairment losses on other financial assets and liabilities (135,143) (135,143)
190. Net provisions for risks and charges (31,595) (31,595)
240.+270. Profits (losses) from the disposal of equity investments (1,856,783) (9,947) 1,873,849 7,119
Pre-tax profit (loss) from continuing operations (2,134,330) - - - - 2,416,346 282,016
290. Taxes on income for the year from continuing operations 271,991 (176,049) 95,942
310. Post-tax profit from discontinued operations 248 248
330. Loss (profit) for the year attributable to non-controlling interests 20,603 (49,436) (28,833)
Profit (loss) for the year attributable to the shareholders of
the Parent before impairment losses on goodwill and on
finite useful life intangible assets (1,841,488) - - - - 2,190,861 349,373
Impairment losses on goodwill and finite useful life intangible
210.+260. assets net of taxes and non-controlling interests - (2,190,861) (2,190,861)
340. Loss for the year attributable to the shareholders of the Parent (1,841,488) - - - - - (1,841,488)
The pre-tax profit from continuing operations in the mandatory financial statements includes the balance of the item 260, net impairment losses on goodwill.
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 22 nd
December 2005 and subsequent updates.
The following rules have been 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;
- impairment losses on goodwill and finite useful life intangible assets (net of taxation and non-controlling interests) include items
210 (partially) and 260 in the mandatory financial statements;
- leaving incentives expenses (net of taxation and non-controlling interests) partially include item 180a in the mandatory financial
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
The regulatory provisions published by the CICR (interministerial committee for credit and saving) on 4 th 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 price, 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 1 st July for new
customers and from 1 st October for customers already existing as at 30 th 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”). 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 previously published (quantitative details of the
reclassification have been given explicitly in the reconciliation schedules).
In order to facilitate analysis of UBI Banca’s operating performance and in compliance with Consob Communication
No. DEM/6064293 of 28 th July 2006, two special schedules have been included, the first a brief summary (which
provides a comparison of the normalised results for the year) 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:
full year 2012:
- gain on public tender offer to purchase outstanding Group preference shares;
- impairment losses on the Intesa Sanpaolo, A2A and other minor shares as well as on units in AFS units in OICR
(collective investment instruments);
- leaving incentives;
- 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 loan provisions and write-downs of UBI Banca (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);
- partial disposal of Intesa Sanpaolo shares and full disposal of investments in ARCA SGR and UBI Insurance
- impairment losses on property, plant and equipment and intangible assets;
full year 2011:
- impairment losses on goodwill and on finite useful life intangible assets;
- impairment losses on shareholdings in Intesa Sanpaolo, A2A and Siteba and on units in OICR (collective
investment instruments - AFS);
- UBI Banca tax realignment in accordance with Law No. 111/2011 and write-off of deferred income tax
assets/deferred IRAP tax assets;
- impact of IRAP adjustment for deferred tax provisions recognised as at 31 st December 2010;
- expenses incurred for restructuring of UBI Leasing agent network;
- release of surplus provisions;
- Write-off of B@nca 24-7 IT platform.
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 most significant
non-recurring items, condensed and complete) 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 2012 compared to
2011 and also those occurring in the fourth quarter of 2012 compared to the previous quarter (these comments
are highlighted with a slightly different background colour) in order to bring to light emerging events as they
developed during the year.
After an initial glimmer of an economic recovery in early 2012, weakness once more became
prevalent and then spread even to those European nations regarded as more solid. The financial
situation, one of the main obstacles to growth, gradually returned to normal late in the year,
with a decline in yields on the government securities of nations subject to the greatest pressures
and an improvement in liquidity and funding conditions on wholesale markets. By contrast, the
economic scenario continued to have an adverse impact on customers’ creditworthiness, in
relation both to the effects of the recession on corporate finances and those of households and to
the considerable increase in deteriorated loans reported by the banking sector (especially in the
second half of the year).
In this context, the UBI Banca Group ended the year with a profit of €82.7 million 1 , after having
charged €152 million in leaving incentive costs to the income statement in connection with the
trade union agreements of November 2012 and February 2013, aimed at a structural reduction
in operating costs (of which they represent a component, albeit the most significant).
In order to allow a consistent analysis of Group profits and operations, the above costs were stated in a single
separate item net of tax and non-controlling interests, shown in the reclassified consolidated financial statements on
the last line item before profit for the year.
Excluding non-recurring items (presented net of taxes and non-controlling interests) normalised
profit stood at €97.3 million compared to €111.6 million in the previous year. Those nonrecurring
items came to expense of €14.6 million in 2012 – owing to the aforementioned charges
and impairment losses on some financial assets, despite the capital gain from the public tender
offer for the preference shares, the benefits of certain tax measures and the disposal of shares
and equity investments – and they also consisted of expense of €1,953 million in 2011,
primarily due to impairment of goodwill and other intangible assets, although marginally
mitigated by the realignment of tax values.
The fourth quarter of the year – affected by the significant structural measures enabled by
the aforementioned trade union agreements, but also the increase in net impairment losses on
the loan portfolio, despite a significant contribution by financial activities – presented a loss of
€140 million, compared with a loss of €2,024.2 million in the corresponding period of 2011
and the profit of €63.2 million earned in the third quarter of 2012 (-€83 million, +€15.2 million
and +€59.8 million respectively in normalised terms).
During the year, ordinary banking business generated operating income of €3,526.3 million,
up by 2.6% compared with 2011, due above all to the results achieved by financial activities and
by equity-accounted investees, while net interest income was again affected by the generalised
1 In 2011 the UBI Banca Group had reported a loss of €1,841.5 inasmuch as it had recognised impairment losses on goodwill and
finite useful life intangible assets that had essentially arisen following the merger between the former BPU Banca Group and the
former Banca Lombarda e Piemontese Group. In other words, it significantly wrote down (by €2,397 million gross, accounting for
44% of the total on the books at the end of 2010) the carrying amounts that had been recognised.
Since those amounts had been generated by a “paper for paper” transaction, that is with no cash payments, the accounting
treatment introduced by IFRS – which does require recognition of the impairment through profit and loss – had yielded effects of an
accounting nature only, which have no impact on the Group’s operations. More specifically, it had no impacts on liquidity, capital
ratios (because these are calculated by deducting all intangible assets) or future profits, which in fact benefited from lower purchase
price allocation amortisation from 2012. The total charge resulting from the purchase price allocation declined to €34.6 million from
the €71.6 million recognised in 2011.
weakness of the context 2 and by de-leveraging and de-risking action taken on the loan portfolio.
Net fee and commission income also performed well, despite the difficult economic and operating
Interest and similar income: composition
Figures in thousands of euro
1. Financial assets held for trading 54,233 - 26 54,259 42,392
2. Financial assets designated at fair value - - - - -
3. Available-for-sale financial assets 454,581 - - 454,581 373,970
3. Held-to-maturity investments 96,150 - - 96,150 -
5. Loans and advances to banks 9,558 15,917 6 25,481 56,327
6. Loans and advances to customers 1,458 3,222,468 785 3,224,711 3,470,274
7. Hedging derivatives - - - - -
8. Other assets - - 1,095 1,095 1,872
Total 615,980 3,238,385 1,912 3,856,277 3,944,835
Interest and similar expense: composition
Figures in thousands of euro
1. Due to central banks (97,721) - - (97,721) (21,520)
2. Due to banks (28,841) - (194) (29,035) (62,336)
3. Due to customers (483,178) - (112) (483,290) (416,507)
4. Debt securities issued - (1,302,558) - (1,302,558) (1,325,414)
5. Financial liabilities held for trading (38,728) - - (38,728) (12,574)
6. Financial liabilities designated at fair value - - - - -
7. Other liabilities and provisions - - (595) (595) (728)
8. Hedging derivatives - - (40,789) (40,789) (86,778)
Total (648,468) (1,302,558) (41,690) (1,992,716) (1,925,857)
Net interest income 1,863,561 2,018,978
Net interest income 3 , which included the effects of the purchase price allocation of -€37 million,
compared with the previous -€49.9 million, amounted to €1,863.6 million, down by €155.4
million compared with 2011, the consequence, for each component of the item 4 , of the increased
impact of interest expense in line with market trends for interest rates. In short:
- business with customers generated net interest income of €1,527.2 million (-€246.4
million), impacted above all by both the interest rates for funding (the spread for business
with customers narrowed by 20 basis points compared with 2011) and by volumes of
business (consolidated loans decreased by €6.8 billion over the twelve months). In addition
to the obvious difficulties of the economic situation, the latter was also influenced by a
policy to reduce lending to large corporate clients in favour of non-captive customers
(following the disposal of third party agency networks), as well as by generalised de-risking
of the entire portfolio, despite improvement in the mark-up of approximately 80 basis
- the securities portfolio generated net interest income of €437.2 million, (+€165.4 million),
due to growth in investments in debt instruments over twelve months of €10.5 billion.
Purchases of Italian government securities continued to make a substantial contribution to
net interest income (€454.6 million of interest income from available-for-sale securities –
2 Interest rate trends moved in opposing directions, although to a lesser degree in the final months of the year, with a tendency of the
medium to long-term maturities of the yield curve to rise rapidly, while very short-term maturities fell further (the average
progressive Euribor one month rate fell further from 1.19% in 2011 to 0.338% in 2012).
3 Following the introduction of the expedited processing fee, a reclassification was conducted within the income statement, separating
out the sums (primarily) relating to the previous overdraft penalty from net interest income and reclassifying them within other
operating income. The comparative figures presented in the tables illustrating net interest income and operating income thus differ
from the published versions. Refer to the notes to the reclassified consolidated financial statements.
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).
AFS – and €96.2 million from the held-to-maturity – HTM – portfolio), although these
investments incorporate the costs of uncovered short positions and the differentials paid on
hedges on fixed interest rate bonds;
- activity on the interbank market resulted in net interest expense of €101.3 million (net
expense of €27.5 million in 2011), attributable almost entirely to debt with the central
bank, through LTROs in 2012 and full-allotment auctions in 2011, which helped to change
the mix of the sources of funding for the portfolio. Net of that expense (€97.7 million in
2012 compared with €21.5 million in 2011), the balance on business with other banks
passed from -€6 million in 2011 to the -€3.6 million at present.
Dividends received fell to €15.6 million (from €20 million before) and they related mainly to
securities in the AFS portfolio held by UBI Banca. The fall in the total reflects a lower
distribution of profits by all companies and on the 186,458,028 ordinary Intesa Sanpaolo shares
in particular (held on the books on the ex dividend date), with a dividend of €0.05 per share,
which paid €9.3 million (compared to €11.6 million in 2011).
Driven by the good performance of the insurance companies, profits of equity-accounted
investees 5 climbed to €44.4 million (+€34.5 million), the result of significant contributions
from: Aviva Vita (€14.4 million compared with €6 million in 2011), Lombarda Vita (€16.1
million, up from €4.5 million before), UBI Assicurazioni (€8.6 million, compared with €3.2
million) and Aviva Assicurazioni Vita (€8 million, compared with -€2.4 million).
Fee and commission income: composition
Fee and commission expense: composition
Figures in thousands of euro
Figures in thousands of euro
a) guarantees granted 50,078 49,793 a) guarantees received (44,171) (807)
c) management, trading and advisory services 636,406 622,140 c) management and trading services: (78,322) (82,257)
1. trading in financial instruments 27,165 38,410 1. trading in financial instruments (14,403) (18,268)
2. foreign exchange trading 7,400 11,868 2. foreign exchange trading (10) (38)
3. portfolio management 251,523 277,518 3. portfolio management (8,526) (6,236)
3.1. individual 67,994 72,042 3.1. own - -
3.2. collective 183,529 205,476 3.2. on behalf of third parties (8,526) (6,236)
4. custody and administration of securities 12,293 13,702 4. custody and administration of securities (7,502) (6,979)
5. depository banking - - 5. 6. placement financial instruments, of financial products instruments and
6. placement of securities 133,614 74,538 services
7. receipt and transmission of orders 49,521 40,852 distributed through indirect networks
8. advisory activities 6,398 4,855 d) collection and payment services (38,946) (44,141)
8.1 on investments 6,398 4,855 e) other services (26,177) (32,688)
8.2 on financial structure - -
9. distribution of third party services 148,492 160,397 Total (187,616) (159,893)
9.1. portfolio management 37 42
9.1.1. individual 37 42
9.2. insurance products 106,386 119,723
9.3. other products 42,069 40,632
d) collection and payment services 154,047 150,128
f) services for factoring transactions 26,240 26,486
i) current account administration 214,152 216,501
j) other services 288,969 288,553
Total 1,369,892 1,353,601 Net fee and commission income 1,182,276 1,193,708
Net fee and commission income remained basically steady at €1,182.3 million (down by 1% on
the previous year), the aggregate result of different performances within the item:
- management, trading and advisory services rose to €550.7 million 6 (+€22.6 million). They
were driven by the placement of securities (+€58.6 million), and in particular by
subscriptions of the new UBI Pramerica Sicav’s (Cedola Certa 2013-2016, Protezione e
Crescita 2017, Focus Italia, Cedola Mercati Emergenti and Cedola Certa 2013-2017) and by
the receipt and placement of orders and advisory services (+€10.2 million), despite
5 The item consists of the profits of the companies recognised on the basis of the percentage interest held by the Group. The item no
longer includes the profit for Arca SGR (-€1.1 million in 2011) following a decision taken by the Group to withdraw from the share
capital of this company. The investment (held by UBI Banca and by BPA) was disposed of on 3 rd September 2012.
6 The amount consists of management, trading and advisory services net of the corresponding expense items and is calculated
excluding currency trading.
continuing penalisation by portfolio managements (-€28.3 million), custody and
administration of securities (-€1.9 million) and the distribution of third-party services
(-€11.9 million, of which -€13.3 million relating to insurance products and +€1.4 million to
other products). The latter was only partially offset by lower commission expense for
financial instruments and products and services sold through indirect networks (-€3.3
million), in relation to the rationalisation of UBI Banca Private Investment in progress since
- fees and commissions on ordinary banking business 7 fell to €631.6 million (-€34.1 million).
The result included growth of collection and payment operations (+€9.1 million) and “other
services” (+€6.9 million, including commitment fees), but also decreases in current account
administration charges (-€2.3 million, due in part to the ongoing shift in customers’
preferences), in foreign exchange business (-€4.4 million) and above all in commissions on
guarantees (-€43.1 million). The item includes the expense (€42.8 million) of the guarantee
from the Italian government on the bonds issued in the first months of the year by UBI
Banca amounting to €6 billion nominal, designed to increase assets eligible for refinancing
with the ECB. The expense consisted of an annual percentage of the nominal amount of the
bonds issued. Because these were issued by the Parent, subscribed by Centrobanca and then
repurchased entirely by UBI Banca, on the basis of IFRS international accounting standards, like the
interest income and expense attributable to them, they are not recognised in the accounts. However, they
are nevertheless included within the assets eligible for refinancing that form part of the cover pool
available to the ECB.
As a result principally of the disposal of financial assets held for trading consisting of bonds,
the net result for financial activities rose to €257.3 million, a marked recovery compared to the
€7.3 million reported in 2011. In detail:
- trading made a positive contribution of €91.8 million (€10.7 million in 2011 8 ), almost
entirely attributable to the trading in debt instruments: +€101.8 million (net of unwinding
derivatives on assets and liabilities resulting in a loss of €34.2 million) from debt
instruments and derivatives on debt instruments and interest rates, +€4 million from
equity instruments and the relative derivatives and +€18 million from currency trading;
- changes in fair value – relating to investments in Tages funds and a residual position in
hedge funds, as well as the private equity investments held by Centrobanca classified
according to the FVO at the end of 2012 – recorded a profit of €0.9 million, compared to a
loss of €38.8 million in 2011, due to the performance of international markets 9 ;
- hedging activity, which represents the change in the fair value of derivatives and the relative
items hedged, resulted in a profit of €1.1 million (a profit of €8.9 million in 2011) and should
be interpreted in combination with the information reported on trading activity concerning
the unwinding phenomenon;
- the disposal of AFS instruments and the repurchase of financial liabilities generated profits
of €163.5 million (€26.5 million in 2011 10 ), of which: €139.4 million from the disposal of
financial assets and €124.6 million in particular from the sale of €6.4 billion of Italian
government securities (primarily securities held by UBI Banca maturing from 2013 to
2015); €16.3 million from equity instruments (of which: €14 million 11 non-recurring, from
the partial disposal of Intesa Sanpaolo shares and €1.6 million from the sale of Società per i
Mercati di Varese and of Risparmio e Previdenza); -€2.2 million from the disposal of former
B@nca 24-7 and Centrobanca unsecured non-performing loans and a BPB credit position;
while the remaining €24.1 million was from the repurchase of financial liabilities. The latter
7 All the changes were calculated by subtracting fee and commission expense from the respective fee and commission income.
8 Net of the unwinding phenomenon (-€18.4 million), the result for 2011 was composed of: +€26.4 million from debt instruments and
the related derivative instruments; -€15.9 million from equity instruments and the related derivative instruments (in relation to the
impairment loss on Medinvest International of €12.2 million); and +€13.7 million from foreign currency business.
9 In the comparative year, the result reflected: disposals of UBI Pramerica funds in the third quarter with a loss of €22 million, when
a stop-loss mechanism was triggered (in compliance with the limits set by the Financial Risks Policy), losses on Tages hedge funds,
formerly Capitalgest (-€11.4 million) and the fair valuation of residual positions in other hedge funds.
10 This sum included €12.1 million from the repurchase of securities issued – by the Parent (€14.1 million), mainly consisting of
securities in the EMTN programme, and by Centrobanca (€4 million), as part of ordinary business with customers – while €14.4
million was from the disposal of financial assets: €6.8 million from the equity investment in the London Stock Exchange (formerly
Borsa Italiana), €1.6 million from other lesser equity investments (including PerMicro), €2.5 million in funds originating primarily
with the former Capitalgest SGR, approximately €1 million in debt instruments, chiefly of IW Bank, and €2.5 million in unsecured
non-performing loans, largely originating with B@nca 24-7.
11 Only the share of the overall capital gain attributable to UBI Banca (€13.5 million) is subject to normalisation.
item also included a €20.7 million non-recurring gain on the public tender offer to purchase
preference shares, repurchases of bonds issued, including a profit of €14.3 million on the
buy-back of notes under the EMTN programme issued by the Parent and a loss of €10.8
million in relation to ordinary business with customer counterparties (mainly by the
Net trading income
Figures in thousands of euro (A) (B) (C) (D) [(A+B)-(C+D)]
1. Financial assets held for trading 112,875 186,923 (3,067) (82,043) 214,688 (67,392)
1.1 Debt instruments 21,928 72,024 (207) (8,763) 84,982 30,332
1.2 Equity instruments 1,675 799 (2,560) (325) (411) (10,488)
1.3 Units in O.I.C.R. (collective investment instruments) 72 133 (300) (4) (99) (265)
1.4 Financing - - - - - -
1.5 Other 89,200 113,967 - (72,951) 130,216 (86,971)
2. Financial liabilities held for trading 9,530 16 - (10) 9,536 (1,502)
2.1 Debt instruments 9,530 - - - 9,530 (2,367)
2.2 Payables - - - - - -
2.3 Other - 16 - (10) 6 865
3. Financial assets and liabilities: exchange rate differences X X X X 7,308 (5,011)
4. Derivative instruments 328,582 1,620,729 (317,630) (1,651,874) (139,729) 84,616
4.1 Financial derivatives 328,582 1,620,729 (317,630) (1,651,874) (139,729) 84,616
- on debt instruments and interest rates 291,999 1,608,832 (290,011) (1,637,661) (26,841) (19,932)
- on equity instruments and share indices 203 5,558 (54) (1,250) 4,457 (5,387)
- on currencies and gold X X X X (119,536) 105,723
- other 36,380 6,339 (27,565) (12,963) 2,191 4,212
4.2 Credit derivatives - - - - - -
Total 450,987 1,807,668 (320,697) (1,733,927) 91,803 10,711
Net hedging income
Figures in thousands of euro 2012 2011
Net hedging income 1,072 8,938
Profit from disposal or repurchase
Figures in thousands of euro
1. Loans and advances to banks 16 - 16 -
2. Loans and advances to customers 9,337 (11,484) (2,147) 2,464
3. Available-for-sale financial assets 145,791 (4,235) 141,556 11,929
3.1 Debt instruments 128,421 (3,825) 124,596 1,027
3.2 Equity instruments 16,686 (406) 16,280 8,404
3.3 Units in O.I.C.R (collective investment instruments). 684 (4) 680 2,498
3.4 Financing - - - -
4. Held-to-maturity investments - - - -
Total assets 155,144 (15,719) 139,425 14,393
1. Due to banks - - - -
2. Due to customers - - - -
3. Debt securities issued 46,964 (22,838) 24,126 12,136
Total liabilities 46,964 (22,838) 24,126 12,136
Total 202,108 (38,557) 163,551 26,529
Net profit (loss) on financial assets and liabilities designated at fair value
Figures in thousands of euro 2012 2011
Net profit (loss) on financial assets and liabilities designated at fair value 852 (38,849)
Net income from trading, hedging and disposal/repurchase activities and from
assets/liabilities designated at fair value
Other net operating income/expense decreased to €163.2 million (-€25.2 million) as a reflection
of the performance of income, which fell to €229.1 million (-€29.1 million), owing to lower
recoveries of expenses on current accounts (partly in light of ongoing regulatory
developments), insurance premiums (to be interpreted in relation to the corresponding cost
item) and finance lease contracts.
Under the line “other income and Other net operating income
exceptional receivables,” the item
also includes the new fast credit Figures in thousands of euro
processing fee, which from 1 st Other operating income 229,097 258,156
October 2012 replaced the previous
Recovery of expenses and other income on current accounts 14,158 15,458
Recovery of insurance premiums 28,140 31,644
overdraft penalty, reclassified under
Recoveries of taxes 156,473 163,065
this item from net interest income in Rents and other income for property management 7,494 8,158
the interests of consistency of Recovery of expenses on finance lease contracts 12,814 14,181
Other income and prior year income 166,491 188,715
presentation. A comparison between
Reclassification of "tax recoveries" (156,473) (163,065)
the two years shows a decrease of
Other operating expenses (65,918) (69,776)
approximately €12 million due to a Depreciation of leasehold improvements (7,484) (7,443)
reduction in the number of accounts Costs relating to finance lease contracts (7,607) (7,145)
Expenses for public authority treasury contracts (6,604) (6,977)
overdrawn (the result of monitoring
Ordinary maintenance of investment properties - -
action) and to the method used to Other expenses and prior year expense (51,707) (55,654)
calculate the new commission,
based on a fixed price, as opposed to
Reclassification of depreciation of leasehold improvements 7,484 7,443
Other net operating income 163,179 188,380
the overdraft penalty, which was
commensurate to the amount and duration of the overdraft.
Operating expense also decreased slightly to €65.9 million (-€3.9 million), owing to the
changes in prior year expense, which in the previous year included €3 million attributable to
applications for action by the Interbank Deposit Protection Fund and €3.3 million (nonrecurring)
aimed at terminating the contracts of agents of UBI Leasing.
In addition, both prior year items (of both income and expense) include on the one hand the
operating loss as a result of a bank robbery and on the other, the related insurance
In the fourth quarter, operating income, driven by the disposal of debt instruments and net fee
and commission income, came to €890.8 million, compared with €904.3 million in the fourth
quarter of 2011 and with €840.9 million in the third quarter of 2012 (which had benefited from
the results for financial activities to a lesser extent). The quarter-on-quarter increase in the item
(+€49.9 million) is explained by the following trends:
• a reduction in net interest income to €417.5 million (-€48.9 million), related to a further
decrease in interest rates 12 and the volume effect, which influenced business with customers.
Consequently, interest income on loans decreased by €50.6 million (in relation to a decrease
in outstanding loans of approximately €2 billion during the quarter), while the spread on
business with customers narrowed by more than 10 basis points. By contrast, the net
contribution of the securities portfolio did not change significantly compared with the
previous year (-€8.6 million; the impact was at least partially mitigated by the switch to
longer maturities and the increase in volumes of approximately €1.5 billion). As a result of
the LTRO financing from the ECB, the result for interbank business also remained negative,
with an expense of €25.2 million compared to the previous expense of €26.7 million;
• an increase in dividends to €1.9 million (+€0.9 million), relating to the available-for-sale
• a rise in the profits of equity-accounted investees to €10.7 million (+€2.7 million), primarily
attributable to the life insurance companies;
• an improvement in net fee and commission income to €310.7 million (+€25.1 million). It
should also be noted that the item includes performance commissions of €19.7 million,
entirely attributable to UBI Pramerica SGR and recognised in the fourth quarter of the year
alone 13 . If that variable is disregarded, net fee and commission income performed well
compared with the previous quarter (+€5.4 million), owing to an improvement in
management, brokering and advisory services (+€8.5 million, primarily related to the
distribution of insurance policies and order collection and placement), while traditional
banking services declined (by approximately €3 million, associated with the performance of
12 The average one month Euribor rate fell further from 0.167% in the third quarter to 0.112% in the fourth quarter.
13 Performance commissions accounted for 1.7% of net fee and commission income for the year, compared with 1% in 2011, when
performance commissions amounted to €11.7 million.
other services, in which commitment fees are classified, only partially offset by an uptrend in
collection and payment services and year-end charges for current account administration);
• a significant improvement in the result for financial activities to €109 million (+€66.1 million),
broken down into the disposal/repurchase of financial assets of €72.2 million (of which €64.7
million as the capital gain on government securities, €11.9 million on the Intesa Sanpaolo
shares, -€1 million from the repurchase of own bonds in business with customers and -€2.9
million from the disposal of a BPB credit position to the group controlling the borrower),
trading (primarily of debt instruments) of €22.3 million, hedging of €12 million (unwinding for
the quarter, amounting to -€14.9 million, should be considered for accurate interpretation)
and measurement at fair value of the units of OICR (collective investment instruments, i.e.,
Tages funds and residual hedge funds) and private equity investments of €2.5 million;
• an increase in other net operating income/expense (+€4 million), partly fostered by expense
recoveries traditionally recognised at year-end on current accounts and finance lease
contracts, but above all by the performance of prior year income and expense, which vary
considerably in amount from one period to another because they consist of components of a
heterogeneous nature and non-structural character.
Operating expenses totalled €2,266.7 million (-5.2%), benefiting from the results of ongoing
efforts to optimise the Group’s cost structure and from lower amortisation of the goodwill
arising from the merger due to the impairment losses recognised at the end of 2011.
Staff costs decreased to €1,373.7
million, compared with the €1,423.2
million reported in 2011.
However, this latter figure included a nonrecurring
component of +€27.9 million, recognised
within the item “expenses for retired personnel”
relating to a release of excess provisions 14 .
Net of this effect, labour costs for the
year decreased by €77.4 million.
As shown in the table, the decrease for
expenses relating to employees was
more significant (-€72.1 million), the
result of a reduction in staff numbers (-
338 in terms of total average staff
numbers), changes in variable
components of remuneration, the impact
of the new national labour contract (for
professional areas and middle
managers) and lower provisions for the
renewal of the national labour contract
signed in January 2012 15 .
Staff costs: composition
Figures in thousands of euro
1) Employees (1,353,539) (1,425,623)
a) Wages and salaries (939,900) (983,736)
b) Social security charges (248,748) (267,619)
c) Post-employment benefits (50,879) (60,928)
d) Pension expense (16) (74)
e) Provision for post-employment benefits (10,196) (9,078)
f) Pensions and similar obligations: (3,042) (3,069)
- defined contribution (113) (139)
- defined service (2,929) (2,930)
g) Payments to external supplementary pension plans: (42,626) (50,431)
- defined contribution (42,165) (50,154)
- defined benefits (461) (277)
h) Expenses resulting from share based payments - -
i) Other employee benefits (58,132) (50,688)
2) Other personnel in service (2,475) (6,504)
- Expenses for agency staff on staff leasing contracts (398) (3,671)
- Other expenses (2,077) (2,833)
3) Directors and statutory auditors (17,705) (19,001)
4) Expenses for retired personnel - 27,932
Total (1,373,719) (1,423,196)
Other administrative expenses fell to
€701.8 million (-€16.2 million).
This decrease is the aggregate result of an increase of €5.4 million in indirect taxation (primarily
due to the introduction of a municipal property tax) and savings of €21.6 million on current
spending, within which opposing trends were recorded. In detail, there were increases in services
in outsourcing (+€4.3 million, relating to the process of insourcing the management of financing
applications by Prestitalia, an activity that had previously been outsourced to specialised outside
firms, with which operating relationships were gradually discontinued), SW and HW license and
maintenance fees and lease instalments (+€2.1 million), tenancy of premises (+€1.1 million),
14 The amount in question related to the release of amounts recognised in previous years due to actuarial recalculations of post
retirement benefits, now no longer considered due. In the third quarter of 2011, the defined benefit obligation and the existing
mathematical reserve were reversed, with a positive impact on the item “administrative expenses: staff costs” of €27.9 million and
the relative portion of the “fair value reserve actuarial gains/losses on defined benefit plans” amounting to approximately €2
million was reclassified within “retained earnings”.
15 Expense items also benefited in the second quarter of 2012 from the recognition of a total of €17 million for the release of
provisions made in prior periods.
professional services (+€2 million,
associated with projects aimed at optimising
capital and liquidity – eligible assets – and
intragroup corporate integration
The line item “professional and advisory services”
(€92.2 million) groups together a variety of expense
types incurred in the Group’s activities. These expenses
are for the following purposes: commercial and sales
support (€11.7 million), support of issuances and
capital management (€14 million), legal expenses (€12.4
million), technical support (€14 million, inclusive of
auditors’ certifications), strategic and organisational
consulting (€7.8 million) and IT services (€32.3 million).
The latter include expenses relating to extraordinary
corporate integration operations, business support
projects and regulatory projects for compliance with
legislation as well as expenses relating to ordinary
On the other hand, action taken to contain
costs primarily involved the following:
advertising (-€9.5 million), rent payable
(-€4.4 million, related, amongst other
things, to branch closures carried out in
2011 and February 2012), telephone and
data transmission expenses (-€3.8 million),
postal expenses (-€2.7 million, partly due to
increased use of online communications),
forms and stationery (-€2.6 million),
information services and land registry
Other administrative expenses: composition
Figures in thousands of euro
A. Other administrative expenses (644,748) (666,346)
Rent payable (67,702) (72,060)
Professional and advisory services (92,216) (90,225)
Rentals hardware, software and other assets (41,073) (36,211)
Maintenance of hardware, software and other assets (37,765) (40,483)
Tenancy of premises (55,867) (54,755)
Property maintenance (25,971) (27,245)
Counting, transport and management of valuables (14,529) (16,004)
Membership fees (9,338) (9,468)
Information services and land registry searches (10,660) (12,612)
Books and periodicals (1,659) (1,877)
Postal (23,866) (26,576)
Insurance premiums (43,083) (44,276)
Advertising (16,489) (26,007)
Entertainment expenses (1,735) (2,017)
Telephone and data transmission expenses (54,728) (58,531)
Services in outsourcing (50,699) (46,439)
Travel expenses (23,330) (23,476)
Credit recovery expenses (43,872) (44,000)
Forms, stationery and consumables (8,510) (11,137)
Transport and removals (7,654) (7,354)
Security (8,450) (9,736)
Other expenses (5,552) (5,857)
B. Indirect taxes (57,049) (51,642)
Indirect taxes and duties (31,594) (37,498)
Stamp duty (142,951) (140,749)
Municipal property tax (16,915) (8,806)
Other taxes (22,062) (27,654)
Reclassification of "tax recoveries" 156,473 163,065
Total (701,797) (717,988)
searches (-€2 million) and counting, transport and management of valuables (-€1.5 million).
It must also be considered that all expense items incurred in 2012 were affected by a one percent increase in VAT which
occurred in September 2011, amounting to a total of approximately €4.3 million.
Depreciation, amortisation and net impairment losses on property, plant and equipment and
intangible assets fell to €191.1 million (-€57.3 million). Of this decrease, €49.7 million was due
to a reduction in the effects of the purchase price allocation arising from the merger, following
impairment losses recognised at the end of 2011 (which affected finite useful life intangible
assets, such as brand names, core deposits and assets under management, for a total of €523
million before taxes and non-controlling interests). Net of the effects of the purchase price
allocation, the item (€171 million) decreased by €7.6 million, despite greater amortisation of
software commenced in 2011 (+€6.7 million) and write-offs incurred for branch closures by
BPCI, BPA, BBS, Carime and BRE in 2012 (+€2.1 million), as well as the Centrobanca IT
system and, to a lesser extent, certain properties (for a total of +€2.2 million, classified within
non-recurring components). The decrease in the item also reflected lower depreciation of
hardware (-€4.6 million) and lower depreciation and amortisation of IW Bank and S.B.I.M.
tangible and intangible assets (-€4.4 million) and the absence of amortisation on intangible
assets related to By You, which was fully written-off in the second quarter of 2011 (-€1.5
million). Net impairment losses also included a non-recurring item of €3.5 million for the
write-off of the B@nca 24-7 IT system, which at the time was held for sale.
On a quarterly basis, operating expenses were affected by the seasonal nature of certain
expense items, as also confirmed by the normalised average quarterly figure, which showed a
further, marked reduction: from €618 million in 2009 to €608 million in 2010, €603 million in
2011 and €566 million in 2012.
In the third quarter, operating expenses rose to €574.1 million, compared with €612.7 million in
the same quarter of 2011 and €555.8 million in the third quarter of 2012. The quarter-onquarter
increase (+€18.3 million) was the result of the following factors:
• staff costs of €336.3 million were down by €12.2 million compared with the €348.6 million
recognised in the third quarter, partly owing to ongoing processes to increase efficiency;
• other administrative expenses totalled €188.1 million, compared with €161.4 million in the
third quarter, up by €26.7 million, of which €3.5 million was attributable to indirect taxation
(partly in relation to different payment due dates, which tend to concentrate in June and
December) and €23.2 million to current expenses (concentrated in professional and advisory
services, advertising, credit recovery expenses, travel expenses, maintenance of properties
and equipment and services in outsourcing), also influenced by the different seasonal nature
of some expense items;
• depreciation, amortisation and net impairment losses on property, plant and equipment and
intangible assets rose by €3.8 million to €49.6 million, reflecting two non-recurring factors,
an initial write-off of €1.3 million of the IT system of Centrobanca in view of migration to the
Group’s target system, as well as certain impairment losses on properties recognised by UBI,
UBI.S, Prestitalia and BPB Immobiliare (€0.9 million), in addition to write-offs recognised in
connection with the branch-closure process completed in December of approximately €1.3
As a summary of overall performance, net operating income rose to €1,259.7 million, an
improvement of 20.1% compared with 2011.
On a quarterly basis, net operating income stood at €316.8 million, compared with €291.7
million in the same quarter of 2011 and with €285.1 million in the third quarter of 2012.
The difficulties of the macroeconomic background continued to be reflected in the performance
of net impairment losses on loans, which increased to €847.2 million over the twelve months
(+€240 million compared with 2011), of which €503 million was attributable to the network
banks (+€198 million) and €347 million to the product companies (also including UBI Banca,
relating to the consumer finance activity acquired with the merger of B@nca 24-7, +€52
Net impairment losses on loans: composition
Figures in thousands of euro
reversals of impairment losses, net
A. Loans and advances to banks 2 (68) (66) - (5) (5)
B. Loans and advances to customers (882,628) 35,480 (847,148) (373,308) 20,778 (352,530)
C. Total (882,626) 35,412 (847,214) (373,308) 20,773 (352,535)
reversals of impairment losses, net
Specific Portfolio Specific Portfolio
Figures in thousands of euro
reversals of impairment losses, net
Specific Portfolio Specific Portfolio
A. Loans and advances to banks (3) (114) (117) 1 (18) (17)
B. Loans and advances to customers (544,777) (62,184) (606,961) (195,115) (13,281) (208,396)
C. Total (544,780) (62,298) (607,078) (195,114) (13,299) (208,413)
reversals of impairment losses, net
The total increase in the item of €240 million – of which more than €192 million is attributable
to the fourth quarter, which traditionally also incorporates net impairment losses on positions
brought to light after year-end – is in reality the aggregate result of higher specific impairment
losses of €338 million (of which €226 million relating to the network banks and €108 million
to the product companies) and a decrease in impairment losses on the performing portfolio of
As shown in the table, in 2012, owing in part to the reduction of the performing portfolio, the
Group recognised net portfolio reversals of €35 million 16 , of which €1.8 million originated with
the network banks and €23.2 million with the product companies. The latter include
approximately €24 million attributable to the former B@nca 24-7 17 (merged into the Parent in
the third quarter), due to two types of reasons. Firstly as a consequence of the rigorous
valuation polices pursued on this bank’s portfolio since 2009 and secondly as a result of
16 Of this figure, €10 million related to the reversal following the release of the guarantee granted by UBI Banca to the former B@nca
24-7 benefiting Prestitalia, which in the individual accounts was included among reversals on other assets and liabilities.
17 The impairment losses of B@nca 24-7 for 2011 included €19.4 million for impairment relating to the Ktesios Group, of which €8
million recognised as the reclassification of a provision for risks and charges made in the fourth quarter of 2010.
changing from collective recognition to more recognition of impairment losses on single
positions for the salary backed lending line of business contributed to Prestitalia, a prudential
change carried out in the second quarter in preparation for the contribution of the operations.
With regard to specific impairment, reversals were recognised in the period (excluding present
value discounts) amounting to €178.8 million (€216.8 million in 2011).
The loan loss rate (calculated as total net impairment losses as a percentage of net loans to
customers) increased at the same time to 0.91% from 0.61% for 2011.
Net impairment losses/reversals of impairment losses on loans: quarterly performance
Specific Portfolio Specific Portfolio
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)
On a quarterly basis, net impairment losses of €352.5 million were up compared both with the
third quarter of 2011 (when they came to €208.4 million) and the three prior months, during
which they amounted to €160.3 million.
The loan loss rate – annualised – was 1.52% compared with the 0.84% recorded in the same
quarter of 2012 and with 0.68% in the third quarter of 2012.
The income statement for the year also recorded €54.8 million of net impairment losses on
other financial assets/liabilities, of which €56.1 million of non-recurring items (including €47.1
million already recognised at the end of June) relating to impairment losses on instruments
held in the AFS portfolio: €31.8 million on the Intesa Sanpaolo share (based on the reference
price quoted on 29 th June 2012, €1.118) €3.5 million on A2A and €20.8 million on other
shares and OICR units (collective investment instruments – including €12.5 million on the
Centrobanca Sviluppo Impresa fund and €4.4 million on the Polis closed-end property fund) 18 .
The value of the Intesa Sanpaolo
shares recovered in the second half of
the year by €21.6 million, which
increased the reserve in equity and
did not change the half year
Following the partial disposal of 72,329,014
shares in the final four months of 2012, the
recovery in the capital amount was calculated on
the new number of shares (114,129,014) and on
the reference price on 28 th December 2012,
which was €1.3.
Net provisions for risks and charges
Figures in thousands of euro
Net provisions for revocation clawback risks (9,806) (2,248)
Net provisions for staff costs (259) (450)
Net provision for bonds in default 71 (286)
Net provisions for litigation (11,285) (10,425)
Other net provisions for risks and charges (27,933) (18,186)
Total (49,212) (31,595)
Net provisions for risks and charges totalled €49.2 million and included €12 million recognised
as part of the restructuring of indirect distribution networks launched in the previous year,
€10 million attributable to Prestitalia, relating to the process of insourcing the loan application
IT processing, which had previously been outsourced to third party companies and €3 million
attributable to B@nca 24-7, allocated in the first six months of the year to account for risks
associated with its business with customers.
18 In 2011 net impairment losses on other financial assets and liabilities amounted to €135.1 million, of which €9.7 million relating to
impairment losses on available-for-sale financial assets and impairment losses on guarantees granted and €125.4 million to
impairment losses on available-for-sale financial assets classified as non-recurring. They consisted of the following: impairment
losses on units in OICR funds (collective investment instruments) (€7.5 million, of which €4.3 million relating to the Polis property
fund) held by UBI Banca and impairment losses on investments in Banco di Brescia (€1.6 million), as well as a total of €116.3
million of impairment losses on equity investments in A2A (€3.3 million), in Siteba Spa (€0.5 million) and in Intesa Sanpaolo. The
latter incurred a total impairment loss of €112.5 million during the year on the basis of the official share price quoted on 30 th
December 2011 (1.2891 euro). The amount includes the impairment loss recognised in the first half (€15.9 million), together with
the recognition of a further impairment loss that became necessary in the third quarter (€112.9 million), which was then offset by a
recovery in the share price in the fourth quarter (+€16.3 million).
Provisions for litigation, primarily related to the network banks and litigation with customers
involving financial investments and compounding of interest, were up by €0.9 million
compared with 2011. By contrast, provisions for revocatory clawback risks rose by €7.6
million and related to a position in the process of being settled, for which the bodies of the
extraordinary administration procedure formulated a settlement proposal, on which the UBI
Banca Group expressed a favourable opinion.
In the previous year, net provisions for risks and charges of €31.6 million, primarily concentrated in the items “for
litigation” and “other provisions,” related, amongst other things, to the following: B@nca 24-7 (€7.5 million, to account
for operating risks associated with the provision of consumer loans and salary backed lending transactions brokered
by financial companies in conditions of objective difficulty, of which €3.6 million pertained to Ktesios SpA, net of a
release of provisions of €8 million, set aside in 2010 in connection with Ktesios, as the transfer to net impairment
losses on loans); IW Bank (€2.1 million, attributable to the closure of transit accounts which failed to balance,
regarding the former legacy platform created at the time of the follow-up to the IT migration carried out in February
2011); and UBI Leasing (€2.4 million, non-recurring, of provisions recognised as part of the process of disposing of the
network of agents, due to the termination of contracts, to be interpreted in conjunction with the figure of €3.3 million
recognised within non-recurring operating expenses).
The disposal of equity investments generated a profit of €14.7 million (of which €13.9 million
was non-recurring), attributable to the capital gain of €8.1 million earned on the liquidation of
the equity investment in Arca SGR (following the exercise of the right of withdrawal) and €5.8
million on the disposal in December of the entire equity investment in UBI Insurance Broker
(net of consolidation adjustments and excluding dividends received of €3.2 million).
In the case of Arca SGR, the capital gain indicated is significantly different from that recognised by the Parent
(€21.8 million) because the investment had been recognised at historical cost in the accounts of UBI Banca,
while it has been accounted for according to the equity method in the consolidated financial statements and
therefore the value increased progressively as a result of the profits distributed by the asset management
company over the years, which reduced the final gain.
In 2011 approximately €7.1 million had been realised, approximately €5 million from the sale of two properties (the
historic property of Neuchâtel by Banque de Dépôt et de Gestion for €3.8 million and a property located in Varese by
Banca Popolare di Bergamo) and €2.3 million from the capital gain on the partial disposal of the investee By You in
As a result of the performance described above, profit on continuing operations before tax
improved by +14.6% compared with the previous year to €323.1 million.
On a quarterly basis, the loss on continuing operations was €62.1 million, compared with a
profit of €80.7 million in the same quarter of 2011 and a profit of €132.4 million realised in
the third quarter of 2012.
The income statement for the year presents taxes on income for the year from continuing
operations of €121.2 million 19 , which benefited from certain non-recurring components,
€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 Banca Popolare di Ancona, in
accordance with Art. 23, paragraphs 12-15 of Decree Law No. 98 of 6 th July 2011 (Law No. 111/2011)
19 In the first half of 2011 tax income of €95.9 million was reported, following the recognition of a non-recurring item amounting to
+€352.8 million, relating to the Parent, consisting of:
+€377.8 million from the realignment of taxation on goodwill and other intangible assets in accordance with Decree Law No. 98 of
6 th July 2011, converted with amendments into Law No. 111 of 15 th July 2011. This legislation allowed, in accordance with the
principles of Law No. 2 of 28 th January 2009, the recognition for tax purposes of higher values attributed to controlling interests
acquired through extraordinary transactions. The realignment was performed by the payment of a substitute tax of 16% (€525.6
million paid in November 2011), which allowed tax to be deducted on the amortisation of the amount subject to tax relief
(€3,285.3 million) at constant rates over ten years with effect from 2018 (instead of from 2013, given the deferral effected by Law
No. 228/2012). Consequently, in the first half of 2011 deferred tax assets of €903.4 million were recognised within item 290 of
the income statement, corresponding to the future benefit arising from the deduction of amortisation on the intangible assets
subject to tax relief;
-€25 million from the write-off of deferred tax assets for IRAP (local production tax) purposes, already recognised in the financial
statements as at and for the year ended 31 st December 2010. As a result of the tax deductibility of the amortisation of the
amount subject to tax relief mentioned above, the Parent did not have sufficient taxable income for IRAP purposes to recover the
deferred tax assets which had been recognised, since IRAP is not included in the tax consolidation. Consequently the conditions
for its recognition were therefore no longer met.
The increase of 0.75% in the rate for IRAP (regional production tax) introduced by Art. 23, paragraph 5 of Decree Law No. 98/2011
already mentioned, applicable to banks and financial companies and in force with effect from the tax year 2011, resulted in changes in
both current taxation (with the recognition of greater current taxes of -€16.2 million) and deferred taxation, with the recognition of -
€6.3 million (non-recurring) deriving from the adjustment of the deferred tax liabilities allocated in the financial statements as at and
for the year ended 31 st December 2010, primarily relating to intangibles brought to light during the allocation of the cost of the merger
deficit for the former Banca Lombarda e Piemontese Group.
as amended by Art. 20 of Decree Law No. 201 of 6 th December 2011 (Law No. 214/2011). Following
enactment of the Decreto Salva Italia (“Save Italy Decree”), the payment terms were re-opened with
regard to extraordinary transactions performed in 2010 and in preceding years. As already reported,
in 2011 UBI Banca had taken advantage of the measures mentioned to obtain tax relief on the higher
amounts recognised on subsidiaries when the former Banca Lombarda e Piemontese was merged into
it with regard to goodwill, brands and other intangible assets as stated in the consolidated financial
statements. In consideration of the re-opened terms which allowed a precise evaluation of the
operating and financial impacts of the operation, it was also decided to obtain tax relief in 2012 on
the goodwill recognised in the consolidated financial statements arising from the acquisition of a
controlling interest in BPA by UBI Banca (formerly BPU Banca). 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 ten years with effect from 2018
(instead of 2013, owing to the deferral provided for by Law No. 228/2012). Consequently, in the first
half of 2012, deferred tax assets of €59.8 million were 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 31 st
December 2011, relating to the loan impairment provision of UBI Banca (section EC of the income tax
return). Law No. 244/2007 repealed, with effect from 2008, the ability to make non-accounting
deductions from income (pursuant to article 109, paragraph 4, letter b) of the Consolidated Income
Tax Act) for depreciation and amortisation, provisions and impairment losses of a tax nature, and
introduced the ability to obtain tax relief for those deductions in order to align statutory accounting
amounts with tax accounting amounts existing as at 31 st December 2007. Since the legislation
mentioned made it possible to obtain partial tax relief on uniform categories of deductions and also in
the light of changes to the operating perimeter (with the direct disbursement of loans to customers), it
was decided to take advantage of that opportunity with regard to provisions for impairment losses on
loans, not subject to tax relief in prior years. The income statement 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
31 st December 2011 (€19.8 million). Owing to the foregoing, from 2012 any loan losses are deductible
according to the ordinary tax provisions;
€66.1 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. The decree on tax deregulation made it possible to file a
corporate income tax refund application, recalculated as a result of the deductibility mentioned above,
for prior years, for which the time limit (on 2 nd March 2012) of 48 months indicated for the refund of
direct payments had not yet expired (i.e. the tax years 2007-2011). According to the Provision of the
Director of the Tax Authorities of 17 th December 2012, which establishes the terms and conditions for
filing for such refunds, the amount of the refund for which to apply for the UBI Banca Group was
recalculated (with respect to the amount originally defined in the half-yearly accounts) for the
aforementioned annual periods.
Net of non-recurring items, taxes came to €224 million from €247.8 million before, to give an
effective tax rate of 67.21% (63.74% in 2011).
Compared to the theoretical tax rate (33.07%), the taxation levied was conditioned by the
combined effect of greater IRES and IRAP, due to:
- the partial non-deductibility of interest expense (4%), introduced by Law No. 133 of 6 th
August 2008 (9.2 percentage points);
- the higher taxation on dividends eliminated in the consolidation (4.4 percentage points);
- non tax deductible expenses, costs and provisions accounting (2.2 percentage points);
- the non-deductibility for IRAP purposes of net impairment losses on loans and staff costs
and the partial non-deductibility of other administrative expenses and depreciation and
amortisation (32.6 percentage points).
These impacts were only partially cushioned by the following: the valuation of equity
investments according to equity method, not significant for tax purposes (4.4 percentage
points), the Aiuto alla crescita economica (“Aid to economic growth”) concessions (2.6
percentage points), the deduction for IRES (corporate income tax) purposes of an amount
equal to the IRAP (regional production tax) corresponding to the taxable portion of employee
and similar personnel expenses and the flat-rate deduction of 10% (4.8 percentage points),
and the deduction from the IRAP taxable income of the tax amortisation of goodwill
(approximately one percentage point) and of negative components not deducted in previous
years on loans disposed of during the year (1.5 percentage points).
On a quarterly basis, (normalised) taxes decreased to €14.4 million from the €50.2 million in
the fourth quarter of 2011 and €62.2 million in the third quarter of 2012. The quarter-onquarter
performance was affected above all by the change in taxable income, which became
negative during the reporting quarter, but also by the different weight assumed during the two
periods by certain components, such as net impairment losses on loans and provisions for
risks and charges, for the purposes of their significance in calculating taxable income or loss
for IRAP (regional production tax).
As a result of the performance already reported and also of the profits earned by Group banks
and companies, profit for the year attributable to non-controlling interests (inclusive of the
effects of consolidation entries) stood at €17.3 million, compared with €28.8 million in 2011.
This change reflects the different results which contributed to the item of the companies in
which non-controlling shareholders hold shares (for example the change from profit in 2011 to
the current loss for Carime, BPA and BRE and the decreases in profits for BPCI and
On a quarterly basis, profit attributable to non-controlling interests came to €1.5 million,
compared with €9.5 million in the same quarter of 2011 and €1.4 million in the previous three
months of 2012.
Staff leaving incentive costs of €101.9 million were presented within a single item, net of taxes
and non-controlling interests. The item originated to a significant degree in the fourth quarter of
the year (€93.9 million), following the signing of the trade union agreements of 29 th November
2012 and 12 th February 2013.
These costs totalled €152 million (subject to taxes of €41.8 million, whereas the share
attributable to non-controlling interests is €8.3 million), of which:
• -€4 million was charged in connection with the General redundancy incentive offer
implemented in March 2012 and aimed at employees eligible for the benefits provided by the
Salva Italia (“Save Italy”) Decree;
• -€4.5 million 20 (net of the related staff costs for the personnel covered by the redundancy
plan) was recognised in the third quarter in connection with the “Managerial manoeuvre”;
• -€143.5 million is attributable to the contents of the trade union agreements signed on 29 th
November 2012 and 12 th February 2013.
The impairment-testing procedure performed at the end of December 2011, in accordance with IAS 36 (Impairment of
assets), no longer ensured the recoverability of the carrying amounts for goodwill and finite useful life intangibles.
Accordingly, the reclassified income statement presented net impairment losses on goodwill (item 260) and net
impairment losses on finite useful life intangibles (part of item 210) recognised during the year, totalling €2,190.9
million, within a single item stated net of taxes and non-controlling interests. These were composed of €1,865.5
million for impairment losses on goodwill and €305.9 million for impairment losses on finite useful life intangible
assets, while the remaining €19.5 million (recognised in the second quarter of the year) related to the full impairment
loss on intangible assets associated with the investment in BY YOU (partially disposed of in April 2011), following the
renegotiation of distribution agreements.
In detail, the impairment test gave rise to total impairment losses of €2,396.8 million, composed as follows:
€1,873.8 million for the total impairment loss recognised on goodwill, of which:
- €521.2 million for the full impairment loss on goodwill recognised by UBI Banca arising from the business
combination involving the former BPU Group and the former BLP Group, which took effect from 1 st April 2007;
- €1,331 million for reductions in goodwill arising on consolidation, of which €987.5 million relating to the
network banks, €234.5 million to the main product companies, €96.8 million to the other banks and €12.2
million to other minor companies;
- €21.6 million for impairment losses on goodwill recognised in the separate balance sheets arising from
previous merger transactions (€12.1 million for Banca Carime, €7.2 million for Centrobanca, €2 million for UBI
Leasing and €0.3 million for BRE);
€523 million for impairment losses on all the finite useful life intangible assets (except for those relating to assets
under custody and software): €193 million relating to brands, €241.7 million to core deposits and €88.3 million to
assets under management.
20 Estimated costs of €7.6 million had been recognised in the third quarter of 2012.
The following comments are based on items in the consolidated balance sheet contained in the
reclassified consolidated financial statements, on which the relative tables furnishing details are
The sections “Consolidated companies: the principal figures” and “The performance of the main
consolidated companies” may be consulted for information on individual banks and Group
General banking business with customers:
The action taken as a whole during the initial months of 2012 freed the Group from all concerns
over liquidity so that it had no need in its financial management to renew maturing medium to
long-term institutional funding.
In fact, during the first quarter of the year, due partly to a temporary easing of sovereign debt
pressures, renewed interest was seen among institutional investors in Italian bank issuers. In this
context, the Group nevertheless preferred not to make new placements, which, moreover were not
strictly necessary for the structural balance of its assets and liabilities, as it considered that
market conditions were still too costly. It was only from October onwards, given reduced pressure
on sovereign spreads and the consequent improvement in cost levels, that UBI Banca returned to
international markets with a benchmark issue of €750 million, followed by two private placements
for a total of €525 million.
In the short-term institutional segment, in which the Group operates in euro commercial paper and
French certificates of deposit (instruments issued by UBI Banca International and listed in
Luxembourg), volumes of business were further reduced due to both the specific nature of this
funding (used as a “buffer” for optimising liquidity management and overall funding) and the
impact that Italy risk was having on the yields and the durations of investments. Another factor
was the minimum rating levels stipulated by the internal policies of a number of institutional
At the same time, commercial attention was increasingly directed towards funding from ordinary
customers, a traditional strategic strength for the Group, and even more important for the future,
although in an increasingly competitve environment. In this situation, commercial action was
organised principally around the range of bond products, with a view, amongst other things, to
stabilising liabilities and around term deposits.
Net of the institutional component (including repurchase agreements with the Cassa di
Compensazione e Garanzia – a central counterparty clearing house), at the end of the year,
funding from households and companies financed 86.5% of loans and advances to customers.
Total funding from customers
Figures in thousands o f euro
Direct funding 98,817,560 58.5% 100,263,876 58.7% 102,246,727 59.7% 99,443,211 57.9% 102,808,654 58.8% -3,991,094 -3.9%
Indirect funding 70,164,384 41.5% 70,665,545 41.3% 69,024,117 40.3% 72,381,158 42.1% 72,067,569 41.2% -1,903,185 -2.6%
of which: assets under
management 38,106,037 22.6% 37,969,326 22.2% 36,490,940 21.3% 37,604,598 21.9% 36,892,042 21.1% 1,213,995 3.3%
Total funding from customers 168,981,944 100.0% 170,929,421 100.0% 171,270,844 100.0% 171,824,369 100.0% 174,876,223 100.0% -5,894,279 -3.4%
Total funding net of CCG and
institutional funding 150,498,750 152,068,364 149,377,124 152,725,529 151,588,548 -1,089,798 -0.7%
Total Group funding, consisting of total amounts administered on behalf of customers,
amounted, as at 31 st December 2012 to €169 billion (-€5.9 billion compared to the end
of 2011), highlighting a progressive reduction during the year, attributable, although
at different rates over the various time frames, to both direct funding (-€4 billion) and
indirect funding (-€1.9 billion).
In actual fact, the trend for the
total was influenced by a series of
factors, some technical, which did
not relate to normal banking
business with customers as such,
on the one hand, for some 70,000
institutional components of 60,000
direct funding, the failure to
renew medium to long-term
EMTN funding, reduced shortterm
activity in euro 30,000
commercial paper and French
CDs, as well as repurchase
transactions with the Cassa di
Compensazione e Garanzia
(CCG) to fund the portfolio of
Italian government securities,
the latter meeting contingent
requirements as part of overall liquidity management;
Direct funding and indirect funding
(end of quarter totals in millions of euro)
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
2008 2010 2011
on the other hand, for indirect funding, the volatility which characterised the
financial markets for the whole of the first part of 2012, with signs of recovery only
firming up from September onwards. This inevitably impacted asset values (the
Net of the institutional items cited above, direct funding from customers grew (+€0.8
billion), partially offsetting the decline in indirect funding. Compared to December
2011, total direct funding of €150.5 billion fell more moderately as a consequence
As already reported above, direct Group funding, amounting to €98.8 billion,
contracted over the twelve-month period, incorporating trends in a number of factors
of an institutional nature (transactions with the Cassa di Compensazione e Garanzia
to fund the proprietary portfolio, failure to renew maturing institutional funding and
reduced activity in short-term institutional markets), net of which, the trend was
positive at +€0.8 billion.
In detail, after reaching €57.1 billion in June, amounts due to customers stood at
€53.8 billion, a reduction of €0.7 billion compared to December 2011.
The main cause of the downward trend is attributable to repurchase agreements, for
both the part relating to business with customers (which progressively fell to €0.3
billion from €1 billion) and that with counterparties through the Cassa di
Compensazione e Garanzia, which over the twelve-month period, fell from €4.6 billion
to €3.9 billion, although with fluctuating performance in the intervening periods,
reflecting the investment/disinvestment choices for the government bond portfolio and
also the improved Group liquidity position from the third quarter onwards.
During the first quarter, business with the CCG had been reduced (from €4.6 billion in December
2011 to €2.4 billion in March 2012) in parallel with the three-year liquidity acquired through the
two LTRO operations with the ECB (an operation which also provided greater stability to the
balance sheet liability structure). During the second quarter, on the other hand, recourse to the
Cassa di Compensazione e Garanzia was increased again (€7.2 billion in June) in order to
finance short-term investments. From the second half of the year onwards, a new phase of
educing these operations began, bringing them down to a total of €3.9 billion in December 2012,
as a consequence of partial divestments from the trading portfolio (all concentrated during the
third quarter) and the positive liquidity position of the Group
Considered net of repurchase agreements with the Cassa di Compensazione e
Garanzia, amounts due to customers were stable at €49.8 billion year-on-year.
For other forms of funding, a change in the mix of investment choices by customers
occurred, out of current accounts, which fell by €0.9 billion over the twelve-month
period to €45.1 billion, into term deposits (+€1.8 billion to €3.2 billion) partly in
relation to the commercial initiatives already in place from the end of 2011 in order to
exploit fixed term forms of funding, above all from private individual customers.
It should moreover be considered that the trend for current accounts was influenced
by changes, which varied during the year, in liquid assets deposited with UBI Banca
by UBI Pramerica 1 , (stable in the fourth quarter but down €0.2 billion compared to
December 2011), by the CCG (-€1.1 billion compared to September, -€0.9 billion
compared to the end of 2011), as well as by corporate customers (-€0.2 billion over the
last three months, +€0.3 billion over the twelve-month period).
Finally, mention must be made of growth in IWBank funding, the Group’s internet
bank (+€1 billion year-on-year), the result, amongst other things, of the growing
appreciation by customers for the products and services provided.
Direct funding from customers
31.12.2012 % 31.12.2011 %
Figures in thousands of euro amount %
Current accounts and deposits 45.149.448 45,7% 46.065.651 44,8% -916.203 -2,0%
Term deposits 3.184.368 3,2% 1.396.835 1,4% 1.787.533 128,0%
Financing 4.732.552 4,8% 6.022.955 5,8% -1.290.403 -21,4%
- repurchase agreements 4.273.890 4,3% 5.568.351 5,4% -1.294.461 -23,2%
of which: repos with the CCG 3.944.510 4,0% 4.615.754 4,5% -671.244 -14,5%
- other 458.662 0,5% 454.604 0,4% 4.058 0,9%
Other payables 692.039 0,7% 945.850 0,9% -253.811 -26,8%
Total amounts due to customers (item 20 liabilities) 53.758.407 54,4% 54.431.291 52,9% -672.884 -1,2%
Bonds 41.996.277 42,5% 44.429.027 43,2% -2.432.750 -5,5%
Certificates of deposit 2.449.278 2,5% 2.447.560 2,4% 1.718 0,1%
Other certificates 613.598 0,6% 1.500.776 1,5% -887.178 -59,1%
Total debt securities issued (item 30 liabilities) 45.059.153 45,6% 48.377.363 47,1% -3.318.210 -6,9%
securities subscribed by institutional customers: 14.538.684 14,7% 18.671.921 18,1% -4.133.237 -22,1%
- The EMTN programme (*) 7.091.040 7,2% 10.292.174 10,0% -3.201.134 -31,1%
- The French certificates of deposit programme 487.838 0,5% 750.616 0,7% -262.778 -35,0%
- The euro commercial paper programme 273.574 0,3% 1.044.055 1,0% -770.481 -73,8%
- The covered b ond programme 6.346.208 6,4% 6.128.355 6,0% 217.853 3,6%
- Preference shares (**) 340.024 0,3% 456.721 0,4% -116.697 -25,6%
bonds subscribed by ordinary customers 28.395.864 28,7% 27.749.274 27,0% 646.590 2,3%
- of the Group:
issued by UBI Banca 7.812.713 7,9% 6.856.713 6,7% 956.000 13,9%
issued by the network banks 16.654.669 16,8% 16.624.904 16,2% 29.765 0,2%
- external distribution networks:
issued by Centrob anca 3.928.482 4,0% 4.267.657 4,1% -339.175 -7,9%
Total direct funding 98.817.560 100,0% 102.808.654 100,0% -3.991.094 -3,9%
Due to customers net of the CCG 49.813.897 49.815.537 -1.640 0,0%
Total direct funding net of the CCG and institutional funding 80.334.366 79.520.979 813.387 1,0%
(*) The corresponding nominal amounts were €6.995 billion (€182 million subordinated) as at 31 st December 2012 and €10.186 billion (€212
million subordinated) as at 31 st December 2011. The amounts indicated in the table do not include two private placements, for a total of
€88 million, of an “intragroup” nature and therefore eliminated in the consolidation (€93 million as at 31 st December 2011 also due to a
(**) The preference shares were issued, in nominal terms, by BPB Capital Trust for €300 million, by Banca Lombarda Preferred Securities Trust
for €155 million and by BPCI Capital Trust for €115 million. Following the Public Exchange Offer of 25 th June 2009, the Public Purchase
Offer, concluded on 12 th March 2012 and further repurchases done afterwards, the nominal values of the debt securities issued were
€182.095 million for the issue by BPB Capital Trust, €90.314 million for that by Banca Lombarda Preferred Securities Trust and €65.338
million for BPCI Capital Trust.
1 Following an agreement signed in April 2011, the Parent of UBI Banca Group is the holder of the deposits intended for
the investment requirements of the number of funds managed by the asset management company: Euro Breve Termine,
Euro Cash (both from May 2011 onwards) and Portafoglio Prudente (from August 2011 onwards).
Debt securities issued, over 90% of which represent bonds, fell to €45.1 billion, with
a progressive contraction over the first three quarters of 2012 due to the downward
trend in funding from bonds and other securities, with a partial recovery in the final
months of the year.
Bonds amounted to €42 billion, affected by the maturities of the EMTN programme,
which were concentrated above all during the first half of the year, while other
securities (€0.6 billion compared to €1.5 billion outstanding at the end of 2011)
substantially reflected the trend for euro commercial paper.
Certificates of deposit, which were stable at €2.4 billion, almost unchanged compared
to the previous year, actually represented differring trends within the total: the French
certificates component, which is used for short-term institutional funding and liquidity
optimisation requirements, fell by €0.3 billion. Similarly, certificates swapped into yen
(€0.8 billion), fell compared to December 2011 (-€0.3 billion). The remaining types of
funding on the other hand benefited from renewed interest among customers, after
changes in taxation in effect from 1 st January 2012 onwards, reaching a total of €1.1
billion at the end of the financial year, with an increase of €0.6 billion since the start
of the year.
In terms of types of customers, funding from institutional customers totalled €14.5
billion, compared to €18.7 billion at the end of 2011. As already reported previously,
the decrease in the item was affected mainly by the partial renewal in the EMTN
programme (only during the last quarter of the year) of maturing notes, although also
by a progressive reduction in transactions in short-term markets, used as a buffer for
the optimisation of liquidity management, where, moreover, at least until September,
Italy risk influenced the yields and durations of investments, partly in relation to the
the minimum rating levels required by the internal policies of several institutional
In detail, institutional funding as at 31 st December 2012 was composed as follows:
EMTN instruments (Euro Medium Term Notes) amounting to €7.1 billion (of which
only €0.2 billion subordinated), issued as part of a programme for a maximum
issuance of €15 billion 2 .
These decreased by €3.2 billion over twelve months, which was in fact attributable
to the positive liquidity and structural balance of the Group, which made it possible
not to renew maturing securities, under market conditions which were still
considered too costly.
It was not until October 2012, after 18 months, that UBI Banca started to return to
international markets with three new issuances for a total of €1.275 billion
nominal, which partially replaced maturities, redemptions and repurchases during
the year, for total of €4.46 billion nominal.
On 30 th October a benchmark issue of €750 million with a three-year maturity and a fixed
coupon of 3.75% was placed by a public offer. This was followed by two private placements,
the first, for €200 million on 28 th November and the second, for €325 million on 11 th
December, both at a variable rate and maturing in 2013.
Covered bonds, amounting to €6.3 billion (+€0.2 billion over twelve months, the
result of a change in book value, with no issues made during the year).
As part of the “multioriginator” programme, backed by residential mortgages, with a
maximum ceiling of €10 billion, UBI Banca has eight covered bonds outstanding for
a nominal value of €5.717 billion, after three amortisations for a total of €33
million 3 . The securities are listed in London.
2 All the securities are traded in London, with the sole exception of the securities issued by the former Banca Lombarda e
Piemontese, which are listed in Luxembourg.
3 Considering the large pool of segregated assets available from UBI Finance, on 22 nd February 2012 three new issues were
made for an overall amount of €750 million, which were not placed on the market but used to strengthen the pool of
eligible assets with the Central Bank. At the same time, a second covered bond programme backed by commercial
As at 31 st December 2012, assets consisting of residential mortgages transferred to UBI
Finance to back the issues made, amounted to €11.2 billion, of which 22.9% originated by
Banca Popolare di Bergamo, 20.5% by Banco di Brescia, 18.9% by Banca Popolare Commercio
e Industria, 15.6% 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
The cover pool was again highly fragmented, including over 157,000 mortgages with an
average residual debt of €71,200, of which 72.1% in the north of Italy, and in particular, in
Lombardy (51% of the total).
On 1 st February 2012, a transfer of assets was concluded by Banca Popolare di Bergamo,
Banco di Brescia, Banca Carime and UBI Banca Private Investment. They transferred
mortgages already held as assets on their balance sheets for a total of €1.171 billion of
remaining principal debt to the special purpose company.
On 1 st October 2012, a further transfer of assets was concluded by BRE, the former BSG, BPA,
BPCI and BVC, which transferred mortgages for a total remaining nominal principal debt of
€1.4 billion held on their balance sheets to UBI Finance.
French certificates of deposit for €488 million, issued by UBI Banca International
as part of a €5 billion programme, listed in Luxembourg, and euro commercial
paper of €274 million, issued by UBI Banca International as part of a €6 billion
programme, listed in Luxembourg;
preference shares of €340 million, consisting of shares still in issue after the public
exchange offer of June 2009 and the more recent operation in February and March
Bond funding from ordinary customers, consisting of bonds subscribed by customers of
the network banks, increased over the twelve-month period by €0.6 billion rising to
€28.4 billion, due to an issuance programme by the Parent concentrated above all in
the last part of the year.
Due to 18 new placements for a total nominal amount of €1.8 billion (of which two, for
an amount of €1.2 billion, with a lower tier two subordination clause), at the end of
the year, UBI Banca’s holding of listed bonds had risen to €7.8 billion, with an annual
increase of around €1 billion (+€1.5 billion in the fourth quarter alone) and an issued
to maturity ratio of 191%. Bond funding from the network banks nevertheless
remained stable at €16.6 billion, reflecting a substantial balance between issuances
(overall €5.6 billion) and redemptions and repurchases.
Centrobanca funding, mainly from non-captive customers, continued to decline in the
absence of new issuance (-€0.3 billion year-on-year).
Excluding Centrobanca, during 2012, UBI Banca securities placed by the network
banks totalled €7.4 billion nominal, against maturities, repurchases and amortisation
repayments of €6.5 billion nominal, with an issued to maturity ratio of 113%.
During 2013, a strategic change is planned in the Group’s medium to long-term direct
funding strategy, with the predominant concentration of bond issues by UBI Banca,
while the network banks will focus primarily on placements with customers. This will
favour the progressive reduction of the number of securities in issue, to the benefit of
their liquidity, as a result of increasing the average size of the issues placed and with
greater efficiency also in the management of hedges where used.
mortgages was structured with the aim of making self-retained issues, i.e. intended to create new eligible assets. At the
end of May, the first issue for a nominal amount of €1.8 billion was made (six-year maturity), while a second issue was
completed at the end of October for a nominal amount of €0.5 million (ten-year maturity). In so far as these were
repurchased by the same Parent, on the basis of IAS/IFRS standards, such liabilities are not recorded in the accounts.
Maturities of bonds outstanding as at 31st December 2012
Nominal amounts in millions of euro
2014 2015 2016
UBI BANCA* 1,557 56 1,366 1,975 4,726 2,476 2,557 5,692 20,405
of which: EMTNs 1,424 - 642 1,663 2,076 965 100 125 6,995
Covered bonds ** - 25 - 25 51 551 1,801 3,264 5,717
Network banks 1,186 1,182 1,441 1,405 5,805 3,401 940 940 16,300
Other banks in the Group 5 7 23 56 422 448 2,304 630 3,895
Total 2,748 1,245 2,830 3,436 10,953 6,325 5,801 7,262 40,600
* The EMTN subordinated loan was placed on the exercise date of the call option (October 2013).
** The first half-yearly repayment, of €11 million, took place in the fourth quarter of 2011 and the second and third repayments, also for €11
million, took place respectively during the second and fourth quarters of 2012.
Bonds listed on the MOT (electronic bond market)
Nominal amount of
Book value as at
ISIN number issue 31.12.2012 31.12.2011
IT0001197083 Centrobanca zero coupon 1998-2018 L. 800 billion € 164,047,404 € 157,100,369
IT0001257333 Centrobanca 1998/2014 reverse floater L. 300 billion € 89,251,808 € 106,581,450
IT0001267381 Centrobanca 1998/2018 reverse floater capped L. 320 billion € 132,468,039 € 121,608,918
IT0001278941 Centrobanca 1998/2013 equity linked coupon L. 100 billion € 38,099,909 € 41,153,616
IT0001300992 Centrobanca 1999/2019 step dow n indicizzato al tasso sw ap euro 10 anni € 170,000,000 € 119,683,666 € 117,189,043
IT0001312708 Centrobanca 1999/2019 step dow n eurostability bond € 60,000,000 € 62,389,248 € 54,765,695
IT0003834832 Centrobanca 2005/2013 inflazione Italia con leva € 16,280,000 € 4,892,524 € 9,826,128
IT0004424435 UBI subordinato low er tier 2 a tasso variabile con ammortamento 28.11.2008-2015 € 599,399,000 € 356,528,893 € 474,738,713
IT0004457070 UBI subordinato low er tier 2 fix to float con rimborso anticipato 13.3.2009-2019 € 370,000,000 € 381,377,159 € 383,885,598
IT0004457187 UBI subordinato low er tier 2 a tasso variabile con ammortamento 13.3.2009-2016 € 211,992,000 € 168,290,705 € 209,976,428
IT0004497043 Unione di Banche Italiane Scpa tasso misto 30.6.2009-2014 € 219,990,000 € 218,273,272 € 217,147,237
IT0004497050 UBI subordinato low er tier 2 fix to float con rimborso anticipato 30.6.2009-2019 € 365,000,000 € 372,171,144 € 370,940,321
IT0004497068 UBI subordinato low er tier 2 a tasso variabile con ammortamento 30.6.2009-2016 € 156,837,000 € 124,233,447 € 154,914,482
IT0004496557 Unione di Banche Italiane Scpa tasso misto 7.7.2009-2014 € 200,000,000 € 198,834,101 € 198,215,118
IT0004517139 Unione di Banche Italiane Scpa tasso misto 4.9.2009-2013 € 84,991,000 € 84,923,166 € 84,809,448
IT0004572860 UBI subordinato low er tier 2 a tasso variabile con ammortamento 23.2.2010-2017 € 152,587,000 € 151,575,804 € 151,473,168
IT0004572878 UBI subordinato low er tier 2 a tasso fisso 3,10% con ammortamento 23.2.2010-2017 € 300,000,000 € 314,157,916 € 309,378,048
IT0004626617 IW Bank Obbligazioni agosto 2015 con opzione di tipo call asiatica (*) € 1,054,000 € 1,010,953 € 1,081,021
IT0004642382 IW Bank Obbligazioni ottobre 2015 con opzione di tipo call asiatica - II tranche (*) € 940,000 € 896,115 € 923,710
IT0004645963 UBI subordinato low er tier 2 a tasso fisso 4,30% con ammortamento 5.11.2010-2017 € 400,000,000 € 410,797,107 € 397,739,866
IT0004651656 Unione di Banche Italiane Scpa tasso fisso 2,30% 2.12.2010-2013 Welcome Edition € 81,322,000 € 81,264,633 € 81,041,477
IT0004652043 Unione di Banche Italiane Scpa tasso misto 2.12.2010-2014 € 174,973,000 € 174,136,269 € 173,997,117
IT0004710981 Unione di Banche Italiane Scpa tasso fisso 3,65% 20.5.2011-20.11.2013 € 5,787,000 € 5,911,171 € 5,914,831
IT0004713654 Unione di Banche Italiane Scpa tasso misto 10.6.2011-2015 € 120,000,000 € 123,276,629 € 121,935,110
IT0004718489 UBI subordinato low er tier 2 tasso fisso 5,50% con ammortamento 16.6.2011-2018 Welcome Edition € 400,000,000 € 423,622,244 € 412,216,859
IT0004723489 UBI subordinato low er tier 2 tasso fisso 5,40% con ammortamento 30.6.2011-2018 € 400,000,000 € 423,855,780 € 412,473,438
IT0004767742 UBI subordinato low er tier 2 tasso misto 18.11.2011-2018 Welcome Edition € 222,339,000 € 223,629,064 € 219,055,454
IT0004777550 Unione di Banche Italiane Scpa tasso fisso 5% 9.12.2011-9.6.2014 € 203,313,000 € 206,227,976 € 204,273,814
IT0004777568 Unione di Banche Italiane Scpa tasso fisso 5% 30.12.2011-30.6.2014 Welcome Edition € 176,553,000 € 178,073,154 € 176,231,023
IT0004779713 Unione di Banche Italiane Scpa tasso fisso 4,50% 30.12.2011-30.6.2014 € 287,722,000 € 289,994,069 € 286,920,098
IT0004780711 Unione di Banche Italiane Scpa tasso fisso 5% 29.12.2011-29.6.2014 € 95,109,000 € 95,605,512 € 94,660,143
IT0004785876 Unione di Banche Italiane Scpa tasso fisso 4,3% 17.2.2012-17.3.2014 € 19,991,000 € 20,358,184 -
IT0004785892 Unione di Banche Italiane Scpa tasso fisso 3,8% 31.1.2012-28.2.2014 € 25,000,000 € 25,464,290 -
IT0004796030 Unione di Banche Italiane Scpa tasso variabile 30.3.2012-30.3.2014 € 20,000,000 € 20,000,535 -
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IT0004803968 Unione di Banche Italiane Scpa tasso variabile 23.4.2012-23.4.2014 € 73,022,000 € 73,285,049 -
IT0004804560 Unione di Banche Italiane Scpa tasso fisso step up 3% 30.4.2012-30.4.2014 € 33,438,000 € 34,344,849 -
IT0004815368 Unione di Banche Italiane Scpa tasso fisso 4% 8.6.2012-8.6.2015 Welcome Edition € 15,371,000 € 15,481,581 -
IT0004815715 Unione di Banche Italiane Scpa tasso fisso 3,80% 15.6.2012-15.6.2016 € 20,224,000 € 20,333,588 -
IT0004841778 UBI subordinato low er tier 2 tasso misto 8.10.2012-8.10.2019 Welcome Edition € 200,000,000 € 201,603,727 -
IT0004842370 UBI subordinato low er tier 2 tasso fisso con ammortamento 6% 8.10.2012-8.10.2019 € 970,457,000 € 985,224,678 -
Unione di Banche Italiane Scpa tasso variabile 23.11.2012-23.11.2016 Welcome Edition
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Unione di Banche Italiane Scpa tasso fisso step up 4,00% 19.10.2012-19.10.2016 Welcome Edition
"UBI Comunità per la Comunità di Sant'Egidio" € 20,000,000 € 20,361,336 -
Unione di Banche Italiane Scpa tasso misto 7.12.2012-7.12.2015 Welcome Edition
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IT0004855554 Unione di Banche Italiane Scpa tasso fisso 4% 30.11.2012- 30.11.2014 Welcome Edition € 34,966,000 € 35,017,404 -
IT0004855562 Unione di Banche Italiane Scpa tasso fisso 4% 23.11.2012-23.12.2014 € 99,991,000 € 100,393,415 -
IT0004865579 Unione di Banche Italiane Scpa tasso fisso 3% 3.12.2012-3.12.2014 € 121,440,000 € 121,435,076 -
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Unione di Banche Italiane Scpa tasso fisso step up 3,00% 31.12.2012-31.12.2015 WE UBI Comunità per
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IT0004874985 Unione di Banche Italiane Scpa tasso fisso step up 3,00% 31.1.2013-31.1.2017 € 157,532,000 - -
IT0004874993 Unione di Banche Italiane Scpa tasso fisso 3,50% 31.1.2013-31.1.2016 Welcome Edition € 54,419,000 - -
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IT0004884208 Unione di Banche Italiane Scpa tasso fisso 1,60% 8.2.2013-8.2.2015 € 43,977,000 - -
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IT0004884745 Unione di Banche Italiane Scpa tasso misto 8.2.2013-8.2.2016 € 49,045,000 - -
IT0004883770 Unione di Banche Italiane Scpa tasso variabile 8.2.2013-8.2.2015 € 51,120,000 - -
IT0004884729 Unione di Banche Italiane Scpa tasso fisso 2,30% 8.2.2013-8.2.2015 Welcome Edition € 13,249,000 - -
IT0004884679 Unione di Banche Italiane Scpa tasso misto 8.2.2013-8.2.2016 € 102,898,000 - -
(*)The figures relate to bonds outstanding, that is net of repurchases by the company itself. On 9th January 2013 IW Bank launched a public tender purchase offer – concluded on 29th January –on the bonds in issue for the two listed
issues, designed to remove them from the listing. With a provision of 7th January 2013, Borsa Italiana removed them from the listing as of 6th March 2013 and as a consequence the company lost its status as a listed issuer.
Listed securities (contd.)
Convertible bonds listed on the MOT (electronic bond market)
Nominal amount of
IT0004506868 UBI 2009/2013 convertibile con facoltà di rimborso in azioni € 639,145,872 € 655,465,003 € 653,777,805
Covered bonds listed on the London Stock Exchange
Nominal amount of
IT0004533896 UBI Covered Bonds due 23 September 2016 3,625% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,096,717,624 € 1,068,507,939
IT0004558794 UBI Covered Bonds due 16 December 2019 4% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,145,948,084 € 1,081,847,471
IT0004599491 UBI Covered Bonds due 30 April 2022 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 216,118,631 € 239,418,111
IT0004619109 UBI Covered Bonds due 15 September 2017 3,375% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,078,025,809 € 1,028,594,052
IT0004649700 UBI Covered Bonds due 18 October 2015 3,125% guaranteed by UBI Finance Srl € 500,000,000 € 523,119,513 € 510,433,699
IT0004682305 UBI Covered Bonds due 28 January 2021 5,25% guaranteed by UBI Finance Srl € 1,000,000,000 € 1,202,660,589 € 1,131,286,542
IT0004692346 UBI Covered Bonds due 22 February 2016 4,5% guaranteed by UBI Finance Srl € 750,000,000 € 832,783,878 € 817,037,468
IT0004777444 UBI Covered Bonds due 18 November 2021 floating rate amortising guaranteed by UBI Finance Srl € 250,000,000 € 250,833,411 € 251,229,559
Innovative equity instruments (preference shares) listed on international markets
Nominal amount of
Non-cumulative Fixed/Floating Rate Guaranteed Trust Preferred Securities
Banca Popolare di Bergamo Capital Trust € 300,000,000 € 183,572,879 € 229,648,799
9% Non-cumulative Guaranteed Trust Preferred Securities Banca Popolare Commercio e Industria Capital € 115,000,000 € 65,787,479 € 101,929,335
XS0108805564 Step-Up Non-voting Non-cumulative Trust Preferred Securities Banca Lombarda Preferred Securities Trust € 155,000,000 € 90,663,343 € 125,142,835
The list does not include the numerous EMTN issues quoted in London and Luxembourg, nor the securities resulting from securitisations
carried out for internal purposes by UBI Leasing, Banco di Brescia, Banca Popolare di Bergamo, Banca Popolare Commercio e Industria, Banca
Popolare di Ancona and by the former B@nca 24-7, all listed on the Dublin stock exchange, nor the issuance of French certificates of deposit
and of euro commercial paper, listed in Luxembourg.
Geographical distribution of direct funding from
customers by region of location of the branch
(excluding repurchase agreements and bonds) (*)
Percentage of total 31.12.2012 31.12.2011
Lombardy 61.77% 59.14%
Piedmont 7.65% 8.02%
Latium 6.90% 8.54%
Apulia 4.42% 4.71%
Calabria 4.35% 4.50%
Marches 3.93% 3.97%
Campania 3.74% 3.88%
Liguria 2.45% 2.42%
Emilia Romagna 1.19% 1.23%
Veneto 1.00% 1.01%
Basilicata 0.97% 0.95%
Umbria 0.53% 0.52%
Abruzzo 0.45% 0.42%
Friuli Venezia Giulia 0.22% 0.26%
Tuscany 0.21% 0.19%
Molise 0.17% 0.18%
Valle d'Aosta 0.03% 0.03%
Trentino Alto Adige 0.02% 0.02%
Total 100.00% 100.00%
Lastly, the table “Geographical distribution
of funding from customers by region of
location of the branch” illustrates the
geographical distribution of traditional
funding (consisting of current accounts,
savings deposits and certificates of deposit)
in Italy. The data shows an increase in the
already significant geographical
concentration of the Group in North-west
regions, where the network banks are most
concentrated (71.9%, compared to 69.6% in
December 2011), and in Lombardy in
particular, with a share which rose to
61.8% (from 59.1%), also by virtue of the
growth in funding by IWBank.
North 74.3% 72.1%
- North West 71.9% 69.6%
- North East 2.4% 2.5%
Central 11.6% 13.2%
South 14.1% 14.7%
(*) The aggregates relate to banks only.
Indirect funding and assets under management
Indirect funding from ordinary customers
31.12.2012 % 31.12.2011 %
Figures in thousands of euro amount %
Assets under custody 32,058,347 45.7% 35,175,527 48.8% -3,117,180 -8.9%
Assets under management 38,106,037 54.3% 36,892,042 51.2% 1,213,995 3.3%
Customer portfolio management 7,744,074 11.0% 7,898,346 11.0% -154,272 -2.0%
of which: fund based instruments 1,642,689 2.3% 1,699,935 2.4% -57,246 -3.4%
Mutual investment funds and SICAV’s 19,102,247 27.2% 17,250,549 23.9% 1,851,698 10.7%
Insurance policies and pension funds 11,259,716 16.1% 11,743,147 16.3% -483,431 -4.1%
of which: Insurance policies 11,050,312 15.7% 11,545,015 16.0% -494,703 -4.3%
Total indirect funding from ordinary customers 70,164,384 100.0% 72,067,569 100.0% -1,903,185 -2.6%
At the end of December,
indirect funding amounted to
€70.2 billion, down €1.9 billion
compared to the €72.1 billion in
The overall trend actually
represents the opposing
performances by assets under
management, which rose to
€38.1 billion (+€1.2 billion) and
assets under custody, which fell
to €32.1 billion (-€3.1 billion, of
which -€2.6 billion in the first
half of the year 4 ), apparently
extending a declining trend,
substantially in place since the
third quarter of 2011.
It should nevertheless be
considered that the performance
of assets under custody was
impacted by customer choices,
(end of quarter totals in millions of euro)
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
2008 2009 2010 2011 2012
Assets under management
Assets under custody
where these translated into the reallocation of investments towards managed products
or forms of direct funding (listed bonds issued by UBI Banca).
Assets under management, which recovered during the second part of the year after
the decline between April and June, the share of which rose to 54.3%, were driven by
mutual investment funds and Sicavs (+€1.9 billion to €19.1 billion), which benefited,
on the one hand, from a recovery in financial asset prices that consolidated from
September onwards, and on the other, by the positive results of the placement (overall
€2.7 billion) of five new Sicavs of UBI Pramerica: Cedola Certa 2013-2016, Protezione e
Crescita 2017, Focus Italia, Mercati Emergenti and Cedola Certa 2013-2017 5 .
The favourable trend in mutual investment funds and Sicavs, representing half of
assets under management, more than offset the reduction in insurance policies and
pension funds (-€0.5 billion to €11.3 billion), entirely attributable to the insurance
sector, and a modest decline in customer portfolio management (-€0.2 billion to €7.7
billion), mitigated moreover by a partial recovery during the second half of the year
4 The negative change in the first half of the year must also be viewed with regard to the departure of a significant private
5 In January 2013 the placement of the “UBI Sicav Global Dynamic Allocation” funds were closed for a further €0.3 billion.
* * *
With regard to the periodic surveys carried out by Assogestioni, from the “Monthly map of assets
under management” of June 2012 onwards, the figure for assets under management also
includes, in view of their nature, management mandates granted by UBI Banca Group to
Pramerica Financial – a brand used by Prudential Financial Inc. (USA) – UBI Banca’s partner for
assets under management, via UBI Pramerica SGR (as at 31 st December 2012, €3.6 billion in
mutual investment funds and Sicavs, of which €1.5 billion in equity funds and €2.1 billion in bond
funds). This modification ensures a more consistent representation of the actual assets under
management of the UBI Banca Group.
Relative market shares as at 31 st December 2011 were thus recalculated to make them consistent
with those at the end of 2012.
With regard to the Mutual Investment Fund and Sicav sector, at the end of December,
the Assogestioni 6 data on the asset management companies of the UBI Banca Group
indicated the following for ASSETS UNDER DIRECT MANAGEMENT:
• negative net inflows in 2012 of around €90 million, corresponding to -0.5% of
managed assets at the end of 2011 (at sector level, on the other hand, net inflows
were positive by €1.2 million, corresponding to 0.3% of managed assets at the end
• favourable performance of assets under management (+€1.2 billion; +7.1%) which
compares with similar performance at sector level (+€60.5 billion; +14.4%). Both
cases recorded a particularly favourable trend during the second half of the year:
+€1.5 billion (+9.6%) for the UBI Banca Group and +€54.1 billion (+12.6%) for the
• net assets under management of €17.7 billion, ensuring the Group seventh place
among sector operators, with a market share of 3.67%, down from 3.91% a year
It should nevertheless be recalled that the Assogestioni sample representing the sector also
includes non-banking operators; this resulted in market share figures for the UBI Banca
Group in the assets under management sector which are inherently lower than those
expressed with regard to indirect funding, loans and branches (see the previous
section“Distribution network and market positioning”). Limiting the analysis solely to banks,
the UBI Banca Group’s market share as at 31 st December 2012 for Mutual Investment
Funds and Sicavs was 5.86% (5.68% at the end of 2011), placing the Group in fourth
position among operators in the sector.
Fund assets (including assets managed for the UBI Banca Group under a mandate)
UBI Banca Group
31.12.2012 % 31.12.2011 %
Figures in millions of euro amount %
Equities 2,276 12.9% 2,364 14.3% -88 -3.7%
Balanced 1,270 7.2% 1,293 7.8% -23 -1.8%
Bond 11,309 63.9% 9,387 56.9% 1,922 20.5%
Monetary funds 2,214 12.5% 2,782 16.9% -568 -20.4%
Flexible 615 3.5% 612 3.7% 3 0.5%
Hedge funds - - 67 0.4% -67 -100.0%
Total (a) 17,684 100.0% 16,505 100.0% 1,179 7.1%
Figures in millions of euro amount %
Equities 99,198 20.6% 94,001 22.3% 5,197 5.5%
Balanced 20,727 4.3% 20,061 4.8% 666 3.3%
Bond 249,051 51.6% 182,930 43.4% 66,121 36.1%
Monetary funds 32,358 6.7% 48,816 11.6% -16,458 -33.7%
Flexible 67,551 14.0% 61,175 14.5% 6,376 10.4%
Hedge funds 7,088 1.5% 9,495 2.2% -2,407 -25.4%
Unclassified 6,232 1.3% 5,208 1.2% 1,024 19.7%
TOTAL (B) 482,205 100.0% 421,686 100.0% 60,519 14.4%
MARKET SHARE OF THE UBI BANCA GROUP (a)/(b) 3.67% 3.91%
6 Assogestioni, “Monthly map of Assets under management”, 4 th quarter 2012.
The summary data given in the table confirms the prudent approach of the Group’s
customers, showing the following over the twelve month period:
• a high and stable share for low-risk categories of funds (monetary and bond funds),
accounting overall for 76.4% of the total, compared to 58.3% for the sector. For the
UBI Banca Group in particular, as well as for the Assogestioni sample, a lower
percentage of monetary funds was recorded (-4.4% and -4.9% respectively) in
favour of the bond components (+7%; + 8.2% sector);
• a slightly declining share of equity funds, which was consistently below the
reference sample (12.9% against 20.6%);
• reduction to zero of investments in hedge funds during the first quarter (a 1.3%
share at sector level for these latter funds at the end of the year).
* * *
On the other hand, with regard to ASSETS UNDER MANAGEMENT NET OF GROUP FUNDS,
which include collective instruments and customer portfolio management, at the end
of the fourth quarter, the UBI Banca Group was in eighth position among sector
operators and in seventh among Italian groups, with assets of €27.2 billion, of which
€5.6 billion attributable to institutional customers, and a market share of 2.44%,
down compared to December 2011 (2.97%).
Restricting the analysis solely to banks, UBI Banca Group’s market share as at 31 st December
2012 was 5.11% (4.97% at the end of 2011), placing the Group in fourth place among sector
General banking business with customers:
Performance of the loan portfolio
Composition of loans to customers
of which Changes
Figures in thousands of euro deteriorated
deteriorated amount %
Current account overdrafts 12.875.334 13,9% 1.343.890 12.907.301 13,0% 1.151.331 -31.967 -0,2%
Reverse repurchase agreements 618.901 0,7% - 923.859 0,9% - -304.958 -33,0%
Mortgage loans and other medium to long-term financing 54.226.909 58,4% 3.931.236 56.238.200 56,4% 3.172.375 -2.011.291 -3,6%
Credit cards, personal loans and salary-backed loans 5.058.147 5,4% 472.210 5.527.788 5,6% 206.948 -469.641 -8,5%
Finance leases 7.914.765 8,5% 1.250.191 8.886.514 8,9% 937.571 -971.749 -10,9%
Factoring 2.752.379 3,0% 303.609 3.199.870 3,2% 62.427 -447.491 -14,0%
Other transactions 9.431.048 10,1% 803.035 11.797.162 11,8% 748.232 -2.366.114 -20,1%
Debt instruments: 10.486 0,0% 1.003 209.076 0,2% 1.000 -198.590 -95,0%
- structured instruments - - - 8.893 0,0% - -8.893 -100,0%
- other debt instruments 10.486 0,0% 1.003 200.183 0,2% 1.000 -189.697 -94,8%
Total loans and advances to customers 92.887.969 100,0% 8.105.174 99.689.770 100,0% 6.279.884 -6.801.801 -6,8%
At the end of December, lending to customers amounted to €92.9 billion, down by 6.8% yearon-year
(-€6.8 billion), compared to -1.8% reported by the Bank of Italy for the sector
nationally to the private sector. This comparison was in fact affected by the impacts of actions
which the Group had already started to take to a significant degree from the closing months of
2011 onwards. The contraction in the portfolio continued during the second part of 2012,
although at levels more in line with those of other Italian banks: loans fell in fact by 2.6% over
six months and by 2.1% in the fourth quarter, compared to changes at sector level of -1.4%
and -0.3% respectively.
The overall trend is still suffering significantly from the adverse economic environment,
characterised by a persistent ongoing recession in the real economy, with a consequent fall in
consumption, production and investments, reflected in a reduction of demand from
households, but above all from businesses.
Actions were undertaken on the Group’s loan portfolio which influenced its performance and
also affected it structurally. These included the following:
• the progressive discontinuation of business with third party networks and the consequent
reductions in loans to non-captive customers, that is affecting all of the product companies
as well as B@nca 24-7 operations merged into the Parent, for the purpose of preserving
credit quality by withdrawing from higher risk businesses (-€1.8 billion over the twelvemonth
• the reorganisation of lending processes, in progress for some time in the leasing division, in
parallel with a change in the focus of business towards the captive market (-€0.5 billion
• the residual effects of the action taken to reduce exposure to the large corporate segment,
undertaken in the fourth quarter of 2011 (-€0.8 billion year-on-year, of which -€0.5 billion
during the first half of the year);
• a decrease in loans related to specific types of business carried out by the Parent
With regard to segmentation of customers by markets, at the end of December 49.7% of the
consolidated portfolio consisted of loans to the retail market (48.4% at the end of 2011), 31.8%
to the corporate market (32.1%), 0.9% to the private banking market (0.9%), while the
remaining 17.6% consisted of all those types excluded from the commercial portfolios, such as
leasing, factoring and loans by UBI Banca (18.6%).
From the viewpoint of types of lending, the reduction was general, although to a different
• while mortgages and medium to long-term loans were again the principal form of lending,
with a share of 58.4%, these fell progressively to €54.2 billion (-€2 billion), the result of a
slowdown in new grants.
On the basis of management accounting figures for the network banks, Centrobanca and
UBI Banca (as the manager of the remaining outstanding loans of the merged B@nca 24-7),
in December performing residential mortgages amounted to €24.5 billion, of which €22.2
billion disbursed to consumer households and €2.3 billion to businesses (€25.3 billion at
the end of 2011, of which €22.8 billion to households and €2.5 billion to businesses). Forty
seven percent of the latter had a loan to value ratio of less than 60%;
• reverse repurchase agreements, which fell to €0.6 billion (-€0.3 billion), reflected the trend
for business specific to UBI Banca and in particular: lower ordinary business with the
Cassa di Compensazione e Garanzia (CCG – a central counterparty clearing house)
(-0.5 billion) with Italian government bonds as the underlying, carried out to invest liquidity
temporarily, which were offset by the start, from the summer months onwards, of business
with a counterparty belonging to a banking group (+€0.2 billion) to be intepreted in relation
to financial liabilities held for trading (uncovered short positions on European government
• finance lease credit, relating almost entirely to UBI Leasing, fell to €7.9 billion (-€1 billion,
of which almost half attributable to non-captive business), as a consequence of the action
taken already mentioned;
• factoring loans, granted principally by UBI Factor, stood at €2.7 billion 1 , with an overall
decline of €0.4 billion over 12 months, although the trend reversed during the fourth
quarter (+€0.3 billion);
• consumer loans as a whole, which fell to €5.1 billion (-€0.5 billion), were impacted by
rationalisation initiatives regarding business with non-captive customers, for which only
the management of outstanding loans remained at the end of December. The decline over
twelve months involved both the outstanding portfolio of the former B@nca 24-7,
contributed to UBI Banca (personal loans, special purpose loans, credit cards, current
accounts and other forms of lending; -€0.7 billion) and that of Prestitalia (salary backed
loans; -€0.2 billion), partially offset by an increase in loans managed directly by the
network banks (+€0.4 billion);
• other forms of short-term lending, totalling €22.3 billion, fell by €2.4 billion year-on-year.
While the amount for current accounts remained substantially stable at €12.9 billion,
benefiting from a partial recovery during the last months of the year, “Other transactions”
(loans for advances, portfolio, import/export transactions, very short-term lending, etc.) fell
by €2.4 billion to €9.4 billion, during the first and fourth quarters in particular;
• debt securities fell to €10.5 billion (-€0.2 billion), in relation to the maturity of a security
issued by a bank amounting to €0.2 billion, subscribed by the Parent at the end of 2011.
With regard to maturities, due, amongst other things, to the performance described above, at
the end of the year, the Group’s loan portfolio consisted of €67.2 billion of medium to longterm
loans (-€3.7 billion; -5.2% year-on-year), accounting for 72.4% of the total, and of €25.7
billion of short-term loans (-€3.1 billion; -10.9% over the twelve-month period). The latter
decreased particularly significantly during the first half of the year (-€2.4 billion).
On that same date, the lending to funding ratio was 94%, an improvement compared to the end
of 2011 (97%).
1 The outstanding amount as of 31 st December 2012 included €466 million of loans for factoring granted by UBI Banca International.
Distribution of loans by economic sector (Bank of Italy classification)
(management accounting figures for performing loans of the network banks and Centrobanca)
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Manufacturing and service companies (non-financial companies and
producer households) 60.4% 60.6% 60.8% 61.6% 61.8%
of which: other services destined for sale 16.5% 16.6% 16.6% 17.0% 17.0%
Commerce, recovery and repair services 9.7% 9.6% 9.6% 9.6% 9.5%
Construction and public works (*) 8.7% 8.9% 8.9% 8.9% 9.1%
Energy products 3.6% 3.5% 3.4% 3.5% 3.7%
Agricultural, forestry and fishery products 2.3% 2.3% 2.3% 2.3% 2.3%
Metal products, excluding machines and means of transport 2.2% 2.2% 2.2% 2.3% 2.4%
Foodstuffs, beverages and tobacco products 2.1% 2.0% 1.9% 2.0% 1.9%
Hotels and restaurants 2.0% 2.0% 2.0% 2.0% 2.0%
Agricultural and industrial machinery 1.5% 1.5% 1.4% 1.5% 1.4%
Textiles, leather and footwear, clothing 1.4% 1.5% 1.5% 1.5% 1.5%
Consumer households 34.1% 33.8% 33.4% 32.4% 32.3%
Financial companies 2.5% 2.5% 2.7% 2.6% 2.8%
Public administrations 1.2% 1.2% 1.2% 1.3% 1.0%
Other (not-for-profit institutions and the rest of the world) 1.8% 1.9% 1.9% 2.1% 2.1%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
(*) “Construction and public works” refers to category 66. ATECOs [Classification of economic activities] are not considered (item L and item F – property and
construction activities) since they are included in the other categories.
From the management accounting figures presented in the table “Distribution of loans by
economic sector ”, relating to the network banks and to Centrobanca only, an aggregate
representing 66.9% of gross loans, it was found that as of December 2012:
• 94.5% of outstanding loans were to manufacturing and service companies and consumer
households, a share which had progressively increased from 94.1%, twelve months earlier,
which confirms the traditional attention paid by the Group towards supporting local
markets. Over the same period, a change in composition occured in favour of consumer
households, whose share of loans rose to 34.1% from 32.3% at the end of 2011;
• loans and advances to financial companies as a
percentage of the portfolio as a whole declined from
2.8% to 2.5%;
• the distribution by sector of performing loans to nonfinancial
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 (26.2%),
although down by one percentage point compared to a
year before (26.5%).
The table “Geographical distribution of loans and
advances to customers by region of location of the
branch” summarises the geographical distribution of
loans within Italy.
The actions taken concerning the Group’s loan portfolio
had a more significant impact within Lombardy, causing
a marginal change in composition among the various
Geographical distribution of loans to customers
by region of location of the branch (*)
Percentage of total 31.12.2012 31.12.2011
Lombardy 69.12% 70.06%
Piedmont 6.24% 6.16%
Latium 4.98% 4.81%
Marches 3.95% 3.84%
Liguria 2.92% 2.91%
Campania 2.42% 2.30%
Apulia 2.24% 2.14%
Emilia Romagna 2.14% 1.98%
Calabria 1.96% 1.92%
Veneto 1.53% 1.45%
Umbria 0.69% 0.68%
Abruzzo 0.64% 0.62%
Basilicata 0.44% 0.43%
Friuli Venezia Giulia 0.25% 0.25%
Molise 0.24% 0.23%
Tuscany 0.22% 0.20%
Valle d'Aosta 0.02% 0.02%
Trentino Alto Adige 0.00% 0.00%
Total 100.00% 100.00%
North 82.2% 82.8%
- North West 78.3% 79.1%
- North East 3.9% 3.7%
Overall, the share at the end of the year for the northern
regions was 82.2% of the total (78.3% in the North West),
with a slight decrease over the twelve-month period,
(*) The aggregates relate to banks only.
while that for central Italian regions was 9.9% and the remaining 7.9% of lending was to
From the viewpoint of concentration, the table highlights a significant and generalised
improvement, concentrated mainly in the first half of the year, the result, amongst other
things, of action undertaken during the last part of 2011. The improvement resumed during
the last three months of the year.
Concentration of risk
(largest customers or groups as a percentage of total loans and guarantees )
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Largest 10 2.9% 3.0% 3.0% 3.3% 3.5%
Largest 20 4.9% 5.1% 5.0% 5.5% 5.6%
Largest 30 6.2% 6.4% 6.5% 7.0% 7.1%
Largest 40 7.2% 7.5% 7.5% 8.1% 8.2%
Largest 50 8.0% 8.3% 8.3% 8.9% 9.1%
securities (€7.8 billion in December 2011);
With regard to “large exposures”, at the end of
the year, only two positions were outstanding
(three at the end of 2011 2 ), totalling €22.6
billion, an increase over the twelve-month
period, although down on June. In particular,
of the €22.6 billion reported:
• €18 billion were attributable to the Ministry
of the Treasury, mainly in relation to
investments by the Parent in government
• around €4.6 billion related to the Cassa di Compensazione e Garanzia due to overall
transactions by the Parent (€6 billion in December 2011).
In consideration of the reduction in Large exposures
the number of counterparties reported
compared to the year before and the
Figures in thousands of euro
application of a weighting factor of
zero to transactions with government,
the Group’s actual risk exposure after
weightings was €141.2 million (on a
single position), down both year-on-year and compared to the other comparative periods.
Each of the positions reported was considerably below the 25% limit set for banking groups as
a percentage of the consolidated regulatory capital.
31.12.2012 30.9.2012 30.6.2012 31.3.2012 31.12.2011
Number of positions 2 2 2 2 3
Exposure 22,599,040 22,349,704 25,774,877 17,869,444 15,388,367
Positions at risk 141,175 275,779 169,548 188,934 1,127,147
In line with the trend for on-balance sheet lending, guarantees granted by the Group also
totalled €6.2 billion at the end of the year, a reduction of over 15%, compared to the €7.3
billion in December 2011.
In detail, the change reflects a generalised reduction, more significant for guarantees of a
financial nature, to €2.1 billion (-€0.9 billion) and more contained for guarantees of a
commercial nature, which in December, totalled €4.1 billion (-€0.2 billion).
The difficult economic background has been progressively affecting the quality of loans and is
continuing to increase gross volumes of deteriorated loans, which at the end of December, had
reached almost €11 billion.
The overall change year-on-year was +€2.37 billion (+27.6%), of which +€0.52 billion
attributable to the first quarter, +€0.35 billion to the second, +€0.89 billion to the third and
+€0.61 billion to the fourth quarter and related mainly to impaired loans (+€1.28 million),
although also to non-performing loans (+€0.77 billion) and exposures past due and/or in
arrears (+€0.48 billion), while there was a reduction in restructured loans (-€0.16 billion).
The annual trend in the different categories of deteriorated loans was also affected by the
• internal reclassifications of some substantial positions which had already been recorded
among deteriorated loans;
• disposals of non-performing unsecured loans during the second quarter of 2012 by B@nca
24-7 (€103.2 million), prior to the merger into the Parent, and by Centrobanca (€5 million);
• the classification as impaired of a portfolio of salary backed loans belonging to B@nca 24-7
and Prestitalia for approximately €240 million.
This action should be considered in relation to the direct aquisition by B@nca 24-7 until 30 th June and
by Prestitalia from 1 st July 2012 of salary-backed operations after the liquidation in April 2011 of the
2 At the end of 2011, the report also included €1.6 billion attributable to different types of transaction outstanding with a major
finance company Ktesios Spa (which operated as an agent), with the disappearance as a consequence
of B@nca 24-7’s ability to use the “deducted for non-payment” clause. On the basis of that clause the
agent, Ktesios, guaranteed the repayments on the loans disbursed and was also responsible for all the
credit recovery activities and any enforcement of guarantees that were compulsory by law. The
discontinuation of the indirect distribution channels for salary-backed loans had also continued during
2011. This had involved not only Ktesios, but also other finance companies, whose mandates to operate
were revoked by the UBI Banca Group.
Therefore, in view of the above, salary-backed lending operations were progressively insourced within
the Group at Prestitalia Spa which specialises in these. 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
• the extension of reporting to include all positions which, on exceeding the threshold of
significance set by the supervisory regulations, were continuously in arrears for over 90
days and no longer for over 180 days, as permitted until 31 st December 2011.
Those same events also affected the trend for net deteriorated loans, which, at the end of
December, amounted to €8.11 billion, an increase of €1.83 billion (+29.1%), of which +€0.43
million attributable to the first quarter, +€0.31 billion to the second quarter, +€0.75 billion to
the third quarter and +€0.34 billion to the fourth quarter.
Notwithstanding a generalised increase in net impairment losses, total coverage of deteriorated
loans of 26.04%, fell slightly by comparison with the 26.89% recorded at the end of 2011
(although slightly up on September - 24.88% - and June - 25.74%), due to the
aforementioned disposals of non-performing loans 3 , which were almost entirely written down,
and to the increase in the percentage of positions backed by collateral, with less impairment
recognised on them, also the result of prudent loan to value ratios for residential mortgages
granted to private individuals by the Group.
Coverage for performing loans on the other hand was essentially stable at 0.55% (0.58% a year
In terms of type of loan, as shown in the table “Composition of loans and advances to
customers”, around 42% of the annual growth in net deteriorated loans related to the item
“Mortgages loans and other medium to long-term loans”, backed by collateral, which result
automatically in a lower level of coverage, while 30% related to non-banking financial business
and 14.5% to consumer credit lending, partly as a result of the reclassification of salarybacked
loans already mentioned.
Gross non-performing loans grew during the twelve-month period from €4.38 billion to €5.14
billion, with a €765 million increase, divided as follows: +€215.7 million in the first quarter,
+€112.9 million in the second quarter, +€176.6 million in the third quarter and +€259.8
million in the fourth quarter 4 .
In percentage terms, the annual change was +17.5%, which compares with +16.6% for loans
to the private sector by the banking sector nationally. During the second part of the year, on
the other hand, the pace of growth for gross non-performing loans in the UBI Banca Group –
+9.3% over the last six months and +5.3% over the last three months – was less than the
average growth for the sector nationally which was +10.5% and +6.3% respectively.
The annual trend also benefited from the disposal in June of non-performing unsecured loans, with almost
100% coverage, for a total amount of €108.2 million, belonging to the former B@nca 24-7 (€103.2 million)
and residually to Centrobanca (€5 million).
3 If the disposals of non-performing loans made in June are not included, overall coverage at the end of December would have been
26.70% (instead of 26.04%).
4 The new entrance of five significant positions occurred in the fourth quarter, for a total amount of €102 million. These included two
which totalled €67 million (one of which transferred from impaired loans) relating to the non-banking financial sector.
Year-on-year change in the total was due principally to the network banks and to UBI Leasing.
Loans and advances to customers as at 31st December 2012
Figures in thousands of euro
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 31st December 2011
Figures in thousands of euro
Deteriorated loans (8.38%) 8,589,416 2,309,532 (6.30%) 6,279,884 26.89%
- Non-performing loans (4.27%) 4,377,325 1,895,908 (2.49%) 2,481,417 43.31%
- Impaired loans (2.77%) 2,844,167 310,387 (2.54%) 2,533,780 10.91%
- Restructured loans (0.91%) 933,786 93,096 (0.84%) 840,690 9.97%
- Past due loans (0.43%) 434,138 10,141 (0.43%) 423,997 2.34%
Performing loans (91.62%) 93,951,550 541,664 (93.70%) 93,409,886 0.58%
Total loans and advances to customers 102,540,966 2,851,196 99,689,770 2.78%
The item as a percentage of the total is given in brackets.
(*) Coverage is calculated as the ratio of impairment losses to gross exposure.
Non-performing loans backed by collateral increased by €0.6 billion to €3.3 billion (+23.3%),
with a share of the gross total which rose progressively to 63.6% from 60.6% at the end of
An analysis of changes in 2012 shows a reduction, compared to the previous year, of around
one quarter in new classifications from performing loans, which was more than offset,
however, by transfers from other categories of deteriorated exposures, mainly from impaired
Total net non-performing loans rose from €2.48 billion to €2.95 billion, an increase of €470.5
million (+19%), of which +€151.6 million attributable to the first quarter, +€118 million to the
second quarter, +€103.5 million to the third quarter and +€97.4 million to the fourth quarter.
A comparison with data for the sector nationally reveals more moderate rises for the UBI
Banca Group, seen year-on-year (+19% compared to +25.6%), in the second half of the year
(+7.3% compared to +19.5%) and also in the fourth quarter (+3.4% compared to +11.5%).
Only 9.5% of the total outstanding loans at the end of the year were without any type of
backing (collateral/personal guarantees), a lower percentage than the figure of 11% for 2011 .
The combined effect of the trends described above and the reduction in the total loan portfolio
led to a non-performing loans to loans ratio, which increased to 5.34% in gross terms and to
3.18% net of impairment losses. Despite this, the loan quality of the Group continues to
outperform the average for Italian banks nationally, for