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

Impaired assets (i.e. non-performing, sub-standard, restructured andoverdue items) fell by 11,6%, from €803.2m to €709.9m, with a coverageratio of over 70% for consumer finance, 45% for mortgage lending andover 30% in wholesale banking (including leasing). Asset quality remainssatisfactory: impaired assets account for just 1% (1.47%) of total loans inthe large corporate segment, 4.6% (4.1%) in leasing, 2% (2.9%) inconsumer credit, and 2.4% (2.5%) in mortgage lending. The slightincrease in non-performing accounts (from 0.56% of total loans last year to0.59% at the reporting date) is concentrated in the leasing segment.At the reporting date there were a total of ten significant exposures togroups of customers (including market risk and equity investments), i.e.above 10% of regulatory capital (two fewer than at 30 June 2010), giving agross exposure of €13,767.4m (30/6/10: €14,553m).Equity investments — these fell from €3,348m to €3,156.1m, afterbooking €203m in profits from the equity-accounted companies, thewritedown to the Telco investment referred to above (€119.6m), andreductions in the valuation reserves totalling €169.4m net of dividendscollected on Assicurazioni Generali and Pirelli & C. amounting to €92.7mand €13.1m respectively. The value of the Assicurazioni Generaliinvestment fell from €2,317.5m to €2,241.5m due to: profits for the period(€239.4m); the writedowns charged by the company to its holdings in Telcoand Greek bonds (€37.8m); the reduction in the valuation reserves(€185m); and the dividend distributed (€92.7m). The book values of theholdings in RCS MediaGroup and Burgo rose slightly as a result of profitsfor the period: the former from €189.3m to €191.8m, and the latter from€80.7m to €82.2m. Conversely, the book values of the investments inGemina and Telco fell, from €199.8m to €196.4m in the case of the formerand from €358.1m to €252.6m in the case of the latter, owing to lossesincurred.Based on share prices as at 30 June 2011, the surplus of market overbook value on the portfolio had increased from €455.3m to €680.9m(virtually zero based on current prices). No impairment charges were takento book values deriving from application of the equity method during theperiod under review; the valuations made in the course of the impairmenttests are shown in part B of the notes to the accounts (see p. 90).24 –