Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

B.4.a Credit risk indicatorsa) Gross NPLs/total loansb) Irregular items/cash exposuresc) Net NPLs/regulatory capital30/6/11 30/6/101.21%3.03%2.72%2.04%3.19%2.72%B.4.b Large risks30/6/11 30/6/10a) Book valueb) Weighted valuec) No. of exposuresd) Large risks/regulatory capital13,767,40612,816,243101.614,553,01511,491,066121.6Leveraged finance transactionsAs part of its corporate lending activity, the Mediobanca Group takes anactive part in buyout transactions promoted or sponsored almost entirely byprivate equity funds in order to take over companies with promising growthprospects, low debt levels and stable cash flow over time. Such transactions havea sub-investment grade rating, a non-recourse contractual structure, andborrowing is commensurate with future cash flow levels. The purpose of suchtransactions is never for Mediobanca to acquire target companies, as the majoritystakes are held directly by the private equity funds.As at 30 June 2011, deals of this nature amounted to €2,421.2m, up slightlyon the figure of €2,380m, reported last year approx. 13% of the corporate loanbook, half of which in relation to domestic transactions, with the vast majority ofthe remainder for deals within the confines of the Eurozone. Movements duringthe period under review included the addition of five new deals worth a total of€223.2m, full repayment of seven loans (in an amount of approx. €270m), andother changes (use of credit lines and capitalization of interest) up €88m.The portfolio does not contain any positions with companies in financialdifficulties, while restructuring agreements for three accounts worth a total of€277.4m have been reached, one of which during the course of the financial year.– 167