Prospectus UBI Banca Covered Bond Programme
Prospectus UBI Banca Covered Bond Programme
Prospectus UBI Banca Covered Bond Programme
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<strong>Prospectus</strong><br />
Defaulted and problem loans<br />
The supervisory regulations of the Bank of Italy relating to problem loans identify the following categories:<br />
• restructured loans (crediti ristrutturati);<br />
• loans subject to country risk (crediti soggetti a rischio paese);<br />
• impaired loans (partite incagliate);<br />
• bad and doubtful loans (crediti in sofferenza); and<br />
• loans past due (esposizioni scadute e/o sconfinanti).<br />
Restructured loans<br />
These are loans for which a bank (or a pool of banks) agrees to amend the original contractual terms and<br />
conditions, due to deterioration in the debtor's financial and economic conditions, giving rise to a loss.<br />
Loans subject to country risk<br />
"Country risk" relates to problems of solvency in countries where there are difficulties surrounding the service of<br />
debt. There are seven categories of risk. Italian banks must monitor the percentage of devaluation (0–15–20–25–<br />
30–40–60 per cent.) which has to be applied to loans in each of these categories which are not specifically<br />
guaranteed against political or economic risk. Italian banks must report monthly to the Bank of Italy on their<br />
positions for each country.<br />
Impaired loans<br />
Pursuant to guidelines established by the Bank of Italy, banks must classify a loan as an "impaired loan" if they<br />
determine that the borrower is experiencing financial or economic difficulties that are likely to be temporary.<br />
Bad loans<br />
Bad loans are loans in relation to which the relevant borrower is in a state of insolvency (whether or not<br />
insolvency proceedings have been commenced). A subjective test is used by the relevant lending bank to<br />
determine whether the borrower is in a state of insolvency.<br />
Loans past due<br />
Loans past due include loans in respect of which repayment is in arrears:<br />
• for more than 180 continuous days in the case of retail loans or public sector loans granted to subjects<br />
resident or having head office in Italy<br />
• for more than 180 continuous days, up to 31.12.2011, in the case of corporate loans granted to subjects<br />
resident or having head office in Italy<br />
• for more than 90 continuous days for other loans<br />
for an amount equal or higher than 5 per cent. of the total exposure<br />
The following table shows a breakdown of the Group's loans as at 31 December 2008.<br />
Loans to customers as at 31 December 2008<br />
Figures in thousands of Euro<br />
Gross<br />
exposure %<br />
Total net<br />
impairment<br />
losses<br />
Net<br />
exposure %<br />
Deteriorated loans........................................................................ 3,607,588 3.68 (1,291,675) 2,315,913 2.40<br />
Non-performing loans.................................................................... 1,868,615 1.90 (1,019,944) 848,671 0.88<br />
Impaired loans ............................................................................... 1,382,852 1.41 (222,661) 1,160,191 1.20<br />
Restructured loans.......................................................................... 142,114 0.15 (39,555) 102,559 0.11<br />
Past due loans ................................................................................ 214,007 0.22 (9,515) 204,492 0.21<br />
Performing loans.......................................................................... 94,486,871 96.32 (434,332) 94,052,539 97.60<br />
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