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

Loan loss provisionsLoan loss provisions were virtually nil, with €0.3m reversed, asopposed to the €113.3m provisions set aside last year, due to a one-offwriteback in an amount of €75m involving a single counterparty; even netof this item the heading would show a 34% reduction compared to lastyear.Provisions for other financial assetsThis item regards equity investments (€158.6m), shares owned as partof the AFS portfolio (€35.6m) and AFS and held-to-maturity bonds(€119.7m); in particular the provisions have been made in respect of theTelco investment (€125.6m), Greek government securities (€108.9m) andunlisted AFS equities (€32.9m).Income tax for the periodIncome tax for the period amounted to €127m, reflecting the fact thatthe provisions for equity investments and AFS shares are not taxdeductible and that interest payable can only be deducted in part. For thethird year running Mediobanca is the lead company for the Group’s taxconsolidation, which includes Compass, SelmaBipiemme Leasing, PalladioLeasing, CheBanca!, Cofactor and Futuro; the existing agreement expiresshortly and will be renewed for the next three financial years.* * *A total of twelve claims against Mediobanca, jointly with the otherparties in their alleged failure to launch a full takeover bid for LaFondiaria in 2002, are still pending for damages amounting to approx.€100m. The present status of the trials in respect of these claims is asfollows:— the court of appeals in Milan has ruled in favour of Mediobanca onfour claims, three of which rulings have been challenged in the courtof cassation;– 257